Went from broke to 6 figure income, need help

[count_sock]

@brewersgirl74 Don’t hire anyone, learn yourself. If you can survive the streets, get an education, and make 6 figures you can be financially literate. Budgeting and investing is not nearly as complicated as people make it seem, the reason they make it seem complicated it to charge you money and do it for you.

Start with some good books like the “Psychology of money” and “simple path to wealth.” Read subs and forums like this learn how to set a budget, have an emergency fund, pay down debt, and then invest. Having financial understanding will provide you with stability most never think is possible. Best of luck

 

[harryremon]

@brewersgirl74 Congratulations, this is an amazing story!

I recommend YNAB budgeting software and the videos associated with it.

 

[samuelg29]

@brewersgirl74 For $80 you can enroll in Dave Ramsey's Financial Peace University, which should teach you all the basics of money. You can also watch videos for free on YouTube of Dave Ramsey as well as The Money Guys. Watch a bunch of those videos and you'll learn a ton! Having said that, you can arm yourself with all the money knowledge available but may still have problems implementing any of it because of the trauma you've experienced. So, I would also recommend that you invest in counseling to unpack all of that. Things that happened to you as a child profoundly affects you the rest of your life. I think the combination of counseling and gaining knowledge of the basics of budgeting/investing will put you in a good place. And congrats for overcoming incredible odds to be a successful adult!

 

[foluwashola]

@brewersgirl74 Your entire post and comment history is questionable.

This is just my opinion and you won’t like it but it can be helpful.

BLUF: it’s pretty clear from the way you word things that you dont prioritize accountability and responsibility. This change in mindset can be good for you. Don’t blame the past and others, don’t think too highly of yourself, live in reality.

That last part would entail stopping online gambling and stock market gambling.

Basic rule of thumb is to have 6-12 months of living expenses in a liquid savings account, preferably HYSA. Then pay down debts with high interest. This means effective interest, not just the interest rate. So do the math and figure out how much money is being lost to interest and pay down the items with most money lost first.

Afterwards. Invest in your future by saving money in tax advantaged accounts. IRA, SEP IRA, eg.

How long do you want to work? Figure out the numbers for when you want to retire, and how much you’ll need. Then find the necessary savings rate for you to reach that goal by your preferred date. Once you’ve done these steps, you can feel more comfortable about how you spend the rest of your money.

If you aren’t able to do these steps then you need to work on reducing expenses and increasing income until you can.

The basic logic behind this isn’t difficult. It’s better to apply this when you’re just starting out but youth is wasted on the young. By the time most people are ready to start these steps, they’ve already put themselves in positions that make this difficult to apply in real life. It just means they have to struggle a bit more and work a bit harder or be a bit more clever until they get on track. But nearly anyone can do this with some dedication and responsibility.

 

[elsieflynn]

@brewersgirl74 -Find a fiduciary. They must – by law – manage your money and property for your benefit, not theirs. Other financial advisors can act in the interest of taking commissions, and not have as strict of credentials.

-Set budgets for different categories of spending, decide how much you want to put towards savings each year, and then adjust the categories accordingly. and track every expense, it’s really important to understand where your money is going and to make sure you are hitting your budget.

-Max out your retirement accounts. The fiduciary can make sure you put into the right funds and accounts.

-listen to The Money Guy podcast

 

[shannone]

@brewersgirl74 You should hire a financial advisor who is a fiduciary. I know of at least 2 who would be able to counsel you.

But you can do this. All you need to do is set up 3 accounts: A Roth IRA, a 401k (your business can open a solo 401K for you), and a HYSA. Then put in the max into your 401k. If you make too much to do a Roth, then back into it by putting the funds into an IRA and Roth converting. You should max the Roth contributions. Then put $100/mo into the HYSA. When you realize that $100 is easy, then do it every other week, then do it every week. Use an online bank like Synchrony or First Foundation where you have to wait to move the funds from the account to your checking account at your bank. It will make it easier to ignore. The Roth and 401k are even more unavailable to you since there is a tax penalty charge when you withdraw funds and it is really difficult to withdraw them from the 401k while the business is still active. Those restrictions will keep you from damaging those accounts.

Don’t look at those accounts except once a year, but invest them pretty aggressively. Your background will actually help you win the long game of wealth accumulation because you are used to having nothing and are not scared to take risks. I had the same background and now am a multi millionaire, retired at 55 but could’ve retired much earlier.

 

[lover4you]

@brewersgirl74 A professional financial adviser

 

[lucynichols101]

@brewersgirl74 Sit down and write out a budget for the year. Every expense you can think of should be on it. Then follow that budget. Anything left over after you cover the listed expenses goes into a savings account.

Set fiscal rules for yourself to follow. I typically start with 1) Do not “lend” money to family or friends, you probably will never see it again, 2) Only give to causes you believe in and have a passion for. It’s okay to give but make sure you are giving to organizations and not individuals. Also make sure you research those organizations, either through the IRS website charities and non-profit page or the State Secretary website. 3) Plan for future expenses by revising your budget to include any new recurring expenses.

Have a plan for your future. Buying a house, buying a car. Only spend on things that are a necessity. Learn to tell yourself “no”.

Focus on growing the business so it makes more per year.

 

[markana]

@brewersgirl74 Since you have your own business first you should hire a good local cpa. I hope you have been putting 30% away for taxes and are paid and up to date since starting your business. The easiest way to start saving is setting money aside into a high yield savings account. I use Wealthfront and have no complaints.

To begin investing you should speak to your tax advisor to see which accounts are most beneficial to a self employed person. Then start contributing remember this money is for the future only invest money you don’t need. You should have 6 months of savings built up before investing heavily. The investment choices you make are too personal for me to give you a recommendation. Take the time to educate yourself on investing then you can make that decision.

All this ignores savings for house and paying off debts this is only general advice as you learn more you’ll be able to control your destiny.

 

[vizzerdrikz]

@brewersgirl74 If you break your leg and don't use a crutch you can damage your leg again. But if you keep using the crutch your legs will be weaken, increasing the chances of damaging again.

So crutches are needed, but I can see how they can be bad. But we still need them.

 

[poena]

@brewersgirl74 Watch the Dave Ramsey show on YouTube every day (or read total money makeover) and learn the steps to get yourself into good money habits. It is VERY helpful to get yourself into the right money mentality for the long term.

 

[gegen]

@brewersgirl74 You don’t really need to hire anyone to help you except maybe a psychologist to get over some of the ways you deal with money.

As for finances - I’ll give you basic rules to live by.

Save 90, spend 10 - this is what I call the iceberg. Icebergs have most of their mass hidden beneath the water line. It’s invisible to others who just pass by. This is what I strive for. If you look at me on any given day, I look like a normal person. I don’t wear fancy clothes or have fancy bags but I could certainly afford them. Most of my wealth is hidden beneath the surface and locked away in very long term investments that I will never sell or need to touch. Under the water I have several houses and brokerage accounts that just keep growing.

The little bit above the waterline of the iceberg that others see are not opulent but can be deceiving. No one ever sees me working day to day (I haven’t worked at a job for more than 13 years). I’m always seemingly in a different place (I travel quite a bit). But I don’t seem to spend anything - again, nothing too expensive or fancy. A lot of people buy LV and Gucci stuffs which is fine and dandy but I prefer to be nondescript and not garner attention. It’s confusing at best. Friends and family know I have wealth but don’t know the extent of it.

As for helping others, I have a very strict rule to not outlay money for anyone, including family. I greatly believe in the idea that the decisions you make will give you the life that you have. For me this is especially true. I went to a good college on a full ride and worked at tech companies. I married a very smart woman who created a business that makes us high six figures of profit every year with almost no input from us now (was tough for first 10 years as we worked nonstop).

For example, my sister had made some terrible decisions in her life and is relatively poor. I don’t ever offer financial support as that will just make her dependent on me. I have offered her help in making decisions but she has never taken my advice really thus she stays broke. She could make money driving Uber or getting a job but refuses to do so and just lives off her husband’s income which is middle class at best.

Anyway - I feel that you don’t owe anything to others for their friendship. If they feel bad about you making money and growing wealthy without “sharing” with them, then they weren’t on your side to begin with.

 

[voltran]

@gegen 90% savings rate is a little ambitious...

 

[gegen]

@voltran Depends on income but totally feasible