Mark’s Market Update – 10/1/2021
I’ve been blessed to have a lot of influencing people in my life teach me about money…and arguably, I think I’ve done a pretty good job saving and doing the right things.
Am I perfect? Yeah, no. I’ve blown some cash on things that were probably not smart. I’ve bought new cars, I’ve blown cash on hobbies that I don’t do anymore (but my garage is filled with the remains of those hobbies), and I’ve probably paid for things I, simply, shouldn’t have ever bought.
I’ve been generous to a fault – or chintzy beyond chintz when it should have been the opposite.
Where I know I’ve succeeded – buying real estate (step 1), having $25,000 set aside as “emergency funds” to dip into ONLY when absolutely necessary (to keep from having to borrow the money or liquidate funds from another account that would hurt more to do so, such as my retirement accounts) (step 2), and, finally, I have had my 401(k) and retirement account contributions maxed out for as long as I can remember (step 3).
BUT – I didn’t do it right – because I didn’t realize or think about Step 4. The first three steps above are absolutely critical – because if you don’t do any of them, you will NOT be able to grow generational wealth.
Don’t forget the last step: Once you’ve completed the first three – you MUST start contributing 20% of your net take-home pay (or more) into investment accounts with your financial planner. S&P 500, three to four mutual funds, five to ten different stocks with companies that make sense for you. It must be diversified – but it must be done.
This is the mistake I made – and I didn’t identify it until two years ago. I wish I’d identified it sooner…but, as they say, “no better time than the present”. So – I started contributing money into a separate investment account. I started slowly at 10%, but every three months I’ve been increasing the amount by 2% per paycheck, and now am contributing 22% – and I’ve never noticed it because of that.
This is the difference maker – and I’m already seeing the fruits of those labors. More importantly – this can be used, really, for anything. Unlike my retirement accounts, or my home, or the $25,000 that’s locked up – this money is liquid, accessible, and available and I can leverage it to buy the next home, or simply let it grow.
Four steps. Own a home. Have money to protect you. Max out your retirement account. Save 20% of your net paycheck.
Do those things – and you will not need to worry about money when you choose to retire. The only thing you’ll have to work on is how to fill your day between 8:00 a.m. and 8:00 p.m.
If I’m this good at helping people establish a way to grow wealthy, imagine how good a job I’ll do with mortgage lending.
Cheers – and to your financial success!