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

 

[voltran]

@gegen i mean i was being polite before that's an insane goal for almost all people and you know it.

unless you're in the top 10% of income earners and live like you're in the bottom 20%, that's insane. and it's an insane thing to recommend to people. i live in a LCOL area and I've have to be in the top 5% of income earners in the country to save 90% of my income after my (extremely modest) living expenses.

 

[nguyenthaonhi]

@brewersgirl74 Where ever you bank ask your banker to make a joint meeting with a financial advisor.

This way they'll be able to get information on your business and personal spending and develop a roadmap for you based on your goals

 

[thebibledude]

@brewersgirl74 Carefully with Financial Planners and coaches, for every good one there is 10-20 scammers and most of them do not even realize they are scamming you, they are just caught up in some BS doctrine.

Look up Dave Ramsey. He has easy to understand no-bs ways to manage your finances with good information on finances everyone should learn. Basically it says make a sensible budget, pay off debt, make emergency savings, then start putting money into investments.

Like you said living under your means does wonders for your mental health, pending dangerous circumstances. You also have to take finical leaps sometimes... with the understanding your going to catch up. Example of this would be starting a business or purchasing a home. I wouldn't recommend extending yourself for a car, because it depreciates over time, but something like a home or a business you plan on growing maybe worth the risk/short-term sacrifice in the long term gain.

The things I do not regret purchasing are things that enhance my current life, not change it. We have all bought something under the mental flaw of changing like buying stuff for a new hobby you never actually do or exercise weights that never get picked up.

You already know the fundamentals of investing, just need to know how to apply them. You do not want people to front you anything!!!, aka lend you something with the requirement you pay them back plus extra (Debt). Instead you want your money to go out and work for you in a savings account, Mutual Fund, Real-estate, ... etc.

You do not need someone to manage your money for you, in fact it is not worth it unless you are doing something extra complicated. You can open up personal investments accounts on your own and its pretty easy. I personally like vanguard.

Things to research...

IRA's

Your current Employee Benefits, specially related to HSA's and 401k (is there matching?)

Difference between an Roth and a Traditional IRA

I personally Hate insurance and insurance plans. No one has ever been able to explain it to me other then fear mongering marketing. The fact of the matter is their one source of income they have is from all the people paying for their plans.. means a whole lot of people are not getting their money's worth.... so they can run their company, pay for millions in ads, and buy billion dollar football stadiums. Please look into it and remember no one cares if you are successful, so look out for yourself.

The amount of fake/false information that I have been told from professional CPA's and CFP's is astounding to me and they have a way higher success rate of telling me real facts then joe blow off the street. Every time someone tells me some crazy tax loop hole or way finances work.. they usually 80% wrong.

Congrats on giving a crap btw. You would be amazed how many of my clients that make a lot of money, like over $300,000 annually and if they missed next weeks pay check... they would be at the soup kitchen. Do not get distracted by your peers/neighbors, they are most likely making poor finical choices to appear better off then actuality, but they probably just cry to the government to give them free relief from their poor choices lol.

Sorry if I just mentally diarrahea'd to much here, it selfishly helps me organize my thoughts. Hopefully something useful in their for ya.

Just some other advice too. Remember that all this is just money. Your not going to become the next multi-millionaire investor over night, you do not need to make some 1000% option play, and you didn't just find the next 100x stock off a google search. You want the money for some reason and not the money itself.. I can not answer that for you, but make sure that is your goal and not a money total.

 

[rtfguy]

@brewersgirl74 What exactly do you need help with?

Budgeting, growing your business, fixing a certain bad habit?

What exactly do you want to fix?

 

[resjudicata]

@brewersgirl74 Start by paying your debts off - credit cards especially. Create a budget for everything you spend on (rent/mortgage, groceries, utilities, vacation, xmas, home repair, car etc.) set that aside each paycheck. Give yourself an allowance for free spending (you know, sex, drugs and rock n roll, dining out, movies). Save up a years worth of salary. Invest half and put the other half into a high yield savings account and never ever touch it if you can help it. Then, invest at least 10% of your earnings into a retirement account Roth first trad IRA for the rest if you are over the max. You can drop it all into SPY and some bond/CD ladders if you don’t care to learn about stocks. Finally, invest the rest when you have more. I keep a brokerage account for cash I am just sitting on and going to use for anything right away.

Aim for at least a 6% return on your money. 10% is better. Anyone offering you 20-30% or higher for private investment is shady.

Finally, give yourself a pat on the back. You’ve come so far. Congrats.