The College Discussion

I have about a week and a half until I graduate college and as I stand on the edge of this portion of my life I think I ought to reflect back and share my experiences and go over the whole “college thing” since that seems to be a hot topic nowadays. Let’s get some background out of the way first, I graduated high school in 2014 with above average grades and above average ACT score and all that stuff. I was smart and I went to good schools and I had all of that going for me. I went to Missouri University of Science and Technology for Mechanical Engineering and then I later added Engineering Management (exactly what it sounds like) to my curriculum as well. It took my 5 years to get both of those degrees and I took a co-op as well (I was ahead of schedule it would normally take 5.5 years to do that). I also failed a class during my time here (differential equations which is after Calculus 3) and I took 12 hours of summer class throughout my time here as well. So that’s a little bit about my college background academically so I’ll give you my hot take on college now.

There’s a lot of debate surrounding colleges these days for instance we probably all heard about the various college admission scandals and how parents are paying their kid’s way to prestigious colleges. We’ve heard of some of the larger tech companies no longer requiring 4-year degrees. We’ve heard about the overqualified Starbucks barista that has a 4-year degree in humanities and can’t find a job and is in lots of student debt. There is lots to be heard so let’s jump into some of the issues.

First off, your decision to go to college or not. There is an old school style of thinking from our parents that I believe pressures often, too many people to go to college. I think that’s fair to say that our parents want us to succeed and believe a college degree is the golden ticket to get us there. There’s also a mentality that college is unnecessary in the world of instant limitless information and with the internet and the ability to become an entrepreneur or start your own business overnight sways people that they don’t need to go to college and that it is a waste of money. To me that seems to be the two mentalities in each corner of the ring.

From my perspective if I want to do what I am doing I had to go to college. Sure, you can learn all there is to know about engineering from buying books and doing all of that on your own, but you need documentation and proof and a degree to get a job anywhere. I think having the college qualifications is necessary for my career path, it would be hard to convince a company that you should work for them and build bridges, buildings, roads, cars etc. that must be built safely when you have no official qualifications. I can clearly see the other perspective as well, if you want to be an entrepreneur you don’t need to get a business degree, one of my best friends has built out a 6-figure dropshipping store and built programs and what not around that and he dropped out of college his sophomore year. For some things you don’t need a college degree, for others I think it would be next to impossible to get a job without it. I know there are a lot of people in one camp or the other and refuse to see the other side and I think it is frustrating to hear, as a successful college student, with a job walking out of here that college is a big scam and isn’t worth it when I can clearly proof otherwise and will do so in the following paragraphs.

Another factor that should contribute to a decision to go to college or not is a simple cost benefit analysis. It’s very simple what is the benefit of the degree, the job, the opportunities, etc. of going to college vs. the cost of college. To give you an example I will take my personal numbers into account and demonstrate the cost benefit of the education I have received for what I paid. I should note that I am very fortunate to have parent’s that have worked hard all of their lives and have paid for my college almost in its entirety and due to this I am not all that familiar with student loans or how that affects cost but I will continue with the numbers I have at hand and go from there.

I pulled for 2017-2018 rates for both freshman and as a sophomore -senior the rates for tuition for the year. (https://futurestudents.mst.edu/costs/cost-estimates/) For your average freshman including room and board, books, classes, fees, tuition, everything it would cost $25,000 for a year at S&T. For a sophomore through senior, that cost is $23,0000 a year. As I mentioned before I went to school for 5 years, (really 4.5 but I’ll count 5 for easier math) which would equate to a total cost of $117,000 for attending here the last 5 years. There are however a lot of discrepancies so let’s discuss those. That number does not count for scholarships so that would lead to $3,000 a year off that price so down to $102,000. There have also been dramatic price increases to my college since I’ve been here, but I won’t factor that in (I believe my estimated freshman cost was $19,000 vs the $25,000 now suggested). I haven’t bought $800 in books like they have suggested since my freshman year so knock off $2000 over 5 years would seem reasonable putting us at $100,000 even. They have suggested $10,400 for room and board a year for sophomore through senior and I paid $3,000 a semester for room, board, dues food and all for my fraternity and we’ll throw in $500 of extra play money in for whatever else I spent money on college related for those 3 years. Altogether my fraternity costs saved me about $3,400 a year x 3 years + my current living situation saved me about $2000 off the suggested price ultimately saving me about $12,000. This brings my college cost down to $88,000. I also worked internships and co-ops throughout my time at school, factoring in taxes and what not I walked away from those jobs with $56,000 earned, I did not factor the cost of living into that number. If you factor the money, I earned throughout my time here I am only down $32,000 for 5 years and walked away with two degrees and had a great time doing it. All the above really focuses on the cost portion of the analysis, looking at the benefit side we see my schools average starting salary is $62,000 and my respective majors have a starting bachelor’s salary of $62,600 for engineering management and $63,800 for mechanical engineering. My starting salary is about $63,000 a year with obvious potential to go up with commissions so I will use the $63,000 as my benefit portion.

If we look at both the cost benefit ratios of the advertised price and the adjusted price, we’ll see that the real price produces:

$117,000/$63,000 = 1.857 or the cost is 1.857 times the benefit, or a ROI (return on investment) of 53.8%

For the adjusted price:

$32,000/$63,000 = 0.508 or the cost is 0.508 times the benefit, or a ROI of 197%

Now these numbers are relatively meaningless if you don’t have anything to compare them to so I will take some information I know about someone and apply it to this equation, unfortunately I don’t have their adjusted price information but nonetheless we’ll see what the real price produces.miam

Took 5.5 years of school (4 years undergrad and a year and a half grad school) undergrad at Miami Ohio in Oxford Ohio, assuming living in state https://miamioh.edu/onestop/your-money/tuition-fees/oxford-campus/undergrad-fall-2016/2018-cohort/index.html. Total price including all fees, books, room and board, tuition etc for 2018-2019 comes out to $32,800 a year or $131,200 for the duration of the 4-year degree. Again, I will make similar assumptions based on the price has gone up drastically over the last several years but will not account for that in my calculation. Then the year and a half at grad school I will be low balling this at 30 credit hours at $750 a credit hour (Fontbonne University STL, https://www.fontbonne.edu/admission-aid/scholarships-tuition/tuition-fees/) I won’t be accounting for any room and board fees since they don’t have any suggested for grad students. That adds $22,500 to the tap bring the total to $153,700. For the job being worked the average salary is about $61,200 which leads to a non-adjusted ratio of:

$153,700/$61,200= 2.511 or the cost is 2.511 times the benefit, the ROI is 39.8%

Again, I am not aware of the adjusted price including scholarships and the like however I know that the same internship and co-op opportunities do not exist to the level and the rate of what I was offered. I believe this example speaks for itself as to how this can get out of control when considering adding student loans, private colleges, and lower paying jobs into the equation.

Now I think my personal story and cost benefit analysis has more than explained that when done a certain way the college ROI can be massive. I didn’t go to any Ivy League school or get a full ride either, I had a small scholarship for academics, and I had living situations that saved me money and also gave me lots of leadership and learning opportunities and for the most part helped with my grades as well.

Ok you’ve made your decision to go to college or not. If you’re not planning on going to college you still have lots of options, there are a variety of trade schools in high demand now and most pay well and require less schooling than conventional college. There is also the route of entrepreneurship and other similar avenues that don’t require the traditional 9-5. As I mentioned before we live in a world that has more open avenues than you can count, you can do so much with a phone or a laptop to earn money without a college education of a degree. The possibilities are quite endless with this one. If you decided, you want to go to college you’ve got a couple more steps ahead of you. For one I think you would need to start off with taking an inventory of your strengths and weaknesses, or take an aptitude test, or both and figure out what you may be well suited at/like. I put this one in the same because I feel like for the most part people like to do what they are good at for the most part. From there I would make sure that venture is profitable and works with that cost benefit analysis. For example, there would be a lot fewer doctors if they were pad $40,000 a year and still had $300,000 in medical school debt, because that would simply not make sense.

Now I know if you are that 18 year old reading this, it’s a lot to take in, you’re probably not judging your college decision off the criteria I stated above, you’re probably basing it off the football team, and the campus, and the cool rec center etc. I would challenge you to take a deeper look than that, its alright to not know what you want to do, in fact I’m aware I am the odd ball that had it all figured out before I was 16. Your teens and 20’s are valuable times in your life, it would not be wise to waste valuable time and money if the progress you’re making is not moving you forward in some way shape or form. Your happiness is valuable as well, if you hate every minute of what you’re studying and don’t like it then it might not pan out for you as a career. After all, assuming you go into that field that will be what you’ll be doing for a long time.

I think a lot of mistakes can be prevented from some simple due diligence and basic understanding of the world (aka common sense that isn’t all that common anymore). Like it boggles my mind how some people end up in these crazy situations with $200k in college debt from a liberal arts college with a useless degree that has no jobs and adds no real value. Like its supply and demand that drives a lot of the issues some people have with wages and jobs, and YOU LEARN THAT IN A FUNDAMENTAL ECON COURSE IN HIGH SCHOOL! If you didn’t learn that in high school, I bet there are 10,000 videos on YouTube explaining the same concept! As with the due diligence thing I found all the information I stated above from simple google searches, the salaries, the tuition, everything. The biggest irony of them all is we live in the era of total information and some people are too lazy to bother looking for the information.

Enough with the rant, let me finish up here and end with some advice. How I got to where I am in terms of college and all of that was, I knew I was good at Math and Science (various standardized tests), I took an aptitude test in high school and I scored pretty much dead on for being an engineer. I also loved to build and take things apart when I was younger (think Legos, Lincoln logs, bike jumps etc.) I lived in St. Louis, I didn’t have any desire to go far from home (my parents are dope, and why be further away than you need to be), I had several colleges to choose from and I went with the best value, cheapest, which also provided the best education. That’s a homerun if I have ever heard one. I joined a fraternity ( I much like many people in my fraternity had no intention of going Greek when we got to school yet that is 75% of us so I guess we’re not exactly status quo) that allowed me tons of leadership opportunities. I joined the rugby team, that gave me more perspective and more people to meet, also a great leadership opportunity. I took my classes seriously and I often pushed myself harder and harder throughout the years which developed me to be a hard-working individual that got the tasks done at all costs no matter the time or at what cost. (yea that’s some 3am nights, and 16-18-hour days, to get what I had to do done) I jumped at all internship and co-op opportunities and not only learned from them in terms of engineering knowledge but in terms of everyday life. Not many 20-year old’s live by themselves like that and have to make their own food, budget, go to work, and also get tossed into an environment where you’re the lowest on the totem pole and sometimes the youngest member on the team by 10+ years. I also worked and developed myself outside the classroom and job floor, I read books, watched YouTube videos, listened to podcasts, etc. I continually learned and improved upon myself to be the best I could be. That led to different job opportunities and added to my skill set and got me where I am today. And that is the secret to my pretty decent success.

Put yourself where opportunities will come up.

Take any and all opportunities even if you don’t know if it’s a good fit or how to do it, you will learn.

Push yourself so you grow.

Never stop learning.

A couple nuggets of wisdom before I end this,

“If you do what you love you’ll never work a day in your life” – I see this thrown around a lot and sure it has meaning but if you’re one of those people that get the most obscure degree or education known to man because you love it and then bitch that you can’t get a job you should take a hard look in the mirror and toughen up buttercup cause the world isn’t going to bend to your will for your stupid weird major.

Parent’s be supportive, college is tough, probably tougher than it was back in your day. There’s more outside influence and stress today than previously and it will crack some kids. If you forced you’re kid to study in high school and were a helicopter parent I can almost guarantee they will not succeed when they get away from the nest. Same with parent’s being over protective of their kids in their younger years, then they get that taste of freedom in college and go wild and crazy and end up in the hospital from alcohol poisoning, I’ve seen that shit happen.

 

That’s about it, like I mentioned I am almost out of here, I graduate May 17th, it’s exciting, it’s the next stage of my life and I can’t wait to show you all what I can do!

B^2

What I Read and Why

If you keep up with my Instagram you’ve seen, I’ve been cranking through some reading over the past couple weeks. I have also been reading more than I ever have throughout this whole journey I’ve been on and I would like to highlight some of things I read and the direction I intend to take. I will start from the past and move to the present in terms of what I read and why. If you are early in your journey to transform yourself or are looking to get started, you can look at what I’ve read and see what aspect you need to improve on! Many of the books below have links attached to them, I have reviewed some of these books in the past and if you want a quick overview or to get the gist of it feel free to check out the link pertaining to each book.

I read a book on modern long-term stock market investing from a guy I followed on YouTube. His channel is the Financial Education channel and he has some good content. His book however is a little mundane and useless if you’ve already consumed his content. All his book is, is a couple of his YouTube videos all summarized into a book so if you’re already familiar with it’s a waste of money.

The next “book” I read was “The Millionaire Booklet” by Grant Cardone and this was more of a shift in mindset “book”.  It’s very short, very informative and is written with passion, if you need to get fired up and get something that will spark you to change your life, I would suggest this book. You may be able to get it for free and pay shipping they often run promos on this booklet.

From here, I got fired up on all things Grant Cardone, so I read a couple more of his books, the next two being “The 10X Rule” and “Sell or be Sold”. “The 10X Rule” is a productivity and mindset book and will really challenge you to pursue success and to think bigger. “Sell or Be Sold” is sales related, and at the time I confirmed that I was going into a sales position for my summer internship which led to the obvious choice to read the book. Even if you are not going into sales it is something very important to learn for your career and for your life. Everything is a sale, from dating a girl and selling her on you, to getting a raise at your job and selling your boss on your performance.

Next, I went with Gary Vaynerchuk’s “Crush It” and I believe I read the sequel “Crushing it” sometime around there as well but I don’t have a date on that one. As with most things GaryVee is involved with these books revolve around entrepreneurship and circles around social media. If you’re at all interested in becoming an entrepreneur and starting your own business and following your passion these are the books and the guy you should investigate.

I read “Rental Property Empire” since I became interested in real estate and while the book was dry and tough to make it through it had all the information you could ever want to pertain to real estate investing. Same can be said about “How to Create Wealth Investing in Real Estate” by Grant Cardone, though this book was much more manageable and easier to get through.

The next two books I read that’ll get lumped together as a mindset and motivation style books are “Rise and Grind” by Daymond John, and “Rich Dad, Poor Dad” by Robert Kiyosaki. Both change your mindset in terms of what is necessary to achieve financial success and how to work hard as well as motivate you to achieve higher things in life.

The book I would suggest for anyone to read out of all of these on this list would be “How to Win Friends and Influence People” by Dale Carnegie. This book is the holy grail in my opinion. It contains practical advice that is timeless as to how to interact with people daily that will transfer to sales skills, negotiation skills, and conflict resolution skills. I can not recommend this book enough, in fact, the day after our new Recruitment Chair was elected to take the position, I handed him the book and said start reading this will be one of the tools towards your success.

The most recent book I read was “Getting Things Done” by David Allen and while useful in terms of organization and increasing your productivity the book is a little dated in terms of technology since it was written in 2001. If you struggle with productivity or get distracted easily or you’re not organized this book could be your solution. A large part of the book involves clearing your mental RAM, like the passive thoughts in your brain that are saying “don’t forget to do X” or “don’t forget to call Y” things of that nature that suck out the productivity and creativeness that people sometimes lack these days. If you fit in that category this book may also be for you!

Onto the last book that I am in the process of reading now is, “Think and Grow Rich” by Napoleon Hill and my oh my I believe this one is going to be a banger. Written with inspiration and in close association to Dale Carnegie you know this book is just going to be life changing! I’m only 10% done with it right now but I will for sure give my opinion on it in the future.

Onto what I am looking to read and learn in the future. My full-time job involves sales so that will primarily be my focus going into the summer, I plan to listen to more Hardcore Closer Podcast by Ryan Stewman for all things sales related. I plan to read various books by Zig Ziglar who I hear is another sales prodigy. I have several productivity type books on my shelf, as well as investing and business books. I also plan to purchase a course by MeetKevin on YouTube related to real estate investing and all aspects of that. I also plan to listen to Bigger Pockets again in the future, and purchase some of their material.

You can clearly see that there remains a nearly infinite amount of knowledge out there in the form of books, podcasts, YouTube videos, courses, etc. I suggest that if you are looking to make a change in your life or to level up a certain aspect of your life you start looking into the books, podcasts, videos that pertain to what you are trying to do and go deep into them. If you first need to get some motivation in you, I have suggestions above for that (Eric Thomas is a good guy to YouTube if you need some motivation really quick). If you want to start your own business, I have suggestions above for you. If you want to get into real estate, I have suggestions above as well.

You have a vast amount of knowledge at your fingertips, figure out what you want to do and go after it.

Thanks,

B^2

 

 

Stock Portfolio Overview 4/24/19

Today I’ll be giving an update on my stock portfolio. The previous blog post about my stock portfolio can be found here* it is from January 23, 2019 and will be briefly recapped below.
Last time I had $11,500 funded in my Robinhood portfolio, today we are sitting at $8,500 with $350 in process of being withdrawn. This was due to pulling profits and the need to pay the bills and paying Uncle Sam this year. In January I had a total profit of 1,132.90, today we are sitting at $1950.53 which has been a terrific gain in the last 3 months. Also this is real, dividend and profit gains from sold positions, this is not based off the account value/paper value. If you run the numbers, it equates to a yearly gain of 32.7% (quarterly gain of 8.17%) when using a $10,000 account value (average account value over this duration). Some of the larger sales and profits made during this time include, Proctor and Gamble (PG), Roku, Caterpillar (CAT), ULTA, BPMX, Chesapeake Energy (CHK), Apple, Alibaba (BABA), and Facebook (FB). Some of these were large full position sales, others were pulling profits and reallocating funds with small sales. As a result, my account looks incredible right now. A few of the highlights include $550 profit from Ulta, $245 profit from Roku, Apple-BABA-CAT together came out to around $100 profit.(single shares were sold)

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The markets have been on quite a tear since the major hiccup in December and with reallocation and making some big sales I have continue to do well in all aspects of my account. I am looking into adding into some of my dividend positions as my yield could come up quite a bit to hit my passive income targets for 2019. I am finishing writing this article on 4/25/19 and Ford just broke $10, and several dividend stocks I’ve been looking at have hit recent lows which I am hoping to capitalize on.

Below I will highlight some of my positions.

CHK has come up considerably but still rough considering its my largest position, I did sell off 75 shares for a nice little gain (still a loss though) to recycle some more cash back into my account.

F just went up around 8% AH on a great earnings report, more to come on that, plan to hold for a while and collect 6% dividends for years to come.

JD and BABA are doing well overall, China and U.S. trade tensions have eased a bit and both positions look good.

FB is doing incredible now as well as AMBA which was one of my low runners for the longest time.

For a complete view of my portfolio check out the screenshot of my tables below.

I am currently looking at adding to my AT&T position, APLE, IRM, and LB. I am also trash at options and should really avoid using them till I feel more confident and just stick to my value and dividend investing and make my returns that way instead of trying to get rich quick.

Thanks

B^2

1/24/19 stock portfolio

sp 12319

sp2 12319

NEW 4/24/19

4.24.19 sp mv

4.24.19 sp gl

 

 

The Math Behind your Goals

I talk a lot about setting goals and what my goals are on this blog and my Instagram page, and while goals give you something to shoot for you must also draw out that goal into something more tangible. Today I will go through some examples of how I wrap my head around my goals and how to do the math on your goals. Let’s start with one of my goals I am working on right now, writing 150 blog posts by the end of 2019. This very post will be number 78, that means I have 72 blog posts to write in 256 days (end of 2019). If you do the math that means I need to write a blog post every 3.6 days or about 2 a week, every week, without fail to reach my goal. When you do the math and break things down it adds clarity what you must do to achieve your goals. Now this goal is cut and dry, I simply must get on my laptop and write about something two times a week. The brainstorming and all of that could be involved but this is a rather simple goal and very one dimensional. Let’s look at something a little bit more complex.

Another goal pertaining to the one above is 1500 blog visitors and 2500 blog views in 2019. I am currently sitting at 176 visitors and 318 views. With 256 days to go that equates to 5.17 new visitors per day and 8.52 views per day. If you extrapolate that out to a month using 30.5 days in a month you get 158 visitors a month and 260 views per month. So now we know what we need to shoot for but how do we get there? I stated above that these goals pertain to each other, over the years I have noticed that the more posts I put up the more views and visitors I typically get so increasing volume on the writing side will increase traffic. Another way to look at this problem is to look at is how does the person viewing my blog post get there? Below you can see that most of my traffic comes from Instagram, google search, and a little bit of Facebook.

blog referers

Let’s further dissect that. Keeping my Instagram presence strong and even pushing on that harder (which I have done recently) will yield better results as far as the data shows. As I increase the volume of articles and write about things people are interested at the time as well as what is known as evergreen content (content that people will forever be searching for i.e. how to save money etc.) I will be able to generate more traffic organically through search engines. I will also be able to better optimize SEO (search engine optimization) by providing more content with more tags and gain more clicks to my articles. When discussing Facebook, I will be the first to admit that it is my Achilles heel of my online life. I normally just post the same picture that I post on Instagram as I do on Facebook. Clearly Facebook’s platform caters to a different type of content than Instagram does, and I simply haven’t put the time and effort into Facebook as I need to. Instagram is obviously the leading platform and with searching being more of a passive grower I should be focusing my efforts toward Facebook with GaryVee’s 79/21 rule. https://www.garyvaynerchuk.com/instagram-for-business-180-strategy-grow-business-brand/

Another aspect to consider is what I write and how that affects traffic. In the picture below all the articles with blue sidebars were written in 2019.

posts by view

There seems to be a trend for newer content especially when analyzing the data on a month to month basis. I also see trends toward reviews, updates, and overviews of what I am doing to be some of the more popular posts. By catering to the viewership and utilizing some of the strategies I’ve mentioned above you can see where I will be putting my time energy and effort to maximize results and to ultimately achieve my goal.

Let’s take a goal that may resonate with people a little bit more and then gives some insight as to how to work with those numbers to make your goal achievable. One of my monetary goals is to have a net worth of $75,000 by the end of 2019. For those of you that are not aware of my background, I am currently a college student that graduates in May and start a full-time job in June.  Considering that and I’ll have a $20,000 net worth when I graduate it is a very ambitious goal. Many of you may be in a similar boat, you want to take your finances to the next level and may have a goal but don’t know how to really get there. So, let’s take a closer look, as I mentioned earlier, I start working in June and I am paid salary now so I can easily calculate my returns every month.

new budget

 

I made the table above, using the 40% rule, getting taxed at 22%, 401k withdrawal of 5% leaves me with a $1750 monthly budget which will be tough but very possible. Now remember I’ll need to increase my net worth by $55,000 in 7 months or so. The 40% rule will get me to about $16,000 including the 2.1% APY I get in my savings account. My 401k will contribute to my net worth to the tune of $2,000. So, if you are keeping up with the math, I’m $18,000 down with $37,000 to go. My Lending Club portfolio assuming some little deposits here and there as well as compounding at 8% a year I can see that going from around $4,750 to $7,000 or so by EOY 2019. My stash portfolio could also see returns similar and can see that rising from $2750 to $4,000 or more. My Robinhood portfolio currently sits at a $9500 account value and with the returns and small deposits down the road could potentially see $12,000 out of that vehicle. So that adds $6,000 to my net worth so only $31,000 to go. This is where the creativity starts to come into effect because I already know I’ll need a side hustle or something to get me to my goal. A side hustle would have to generate $5,000 a month however any extra money is getting invested in some way shape or form so I believe $4500 a month would suffice assuming I can earn solid returns. A side hustle appears to be a must however, I have also considered buying rental property late in 2019. If I can buy something that requires the work and I put some sweat equity into the project I could come out with realized equity in the property also raising my net worth. Now I intentionally made this goal difficult, I did some back of the envelope calculations in January this year when I was setting my goals and looked at $50,000 net worth as being achievable and bumped it up to $75,000 because of the 10X rule and thinking. As always, I’ll keep you all posted on my progress and let you know how it all goes. Thanks for reading and I hope you could find some value behind running the numbers behind your goals and to break it down in smaller time increments like every month or every week rather than the full year outlook. I also hope this inspired you to go for big goals and to stop thinking so small.

Thanks, B^2

 

2019 Goals, Quarter 1 Review

A couple months ago I wrote an article explaining my 2019 goals. That article by the way can be found HERE. In that article I explain my reasoning and thought process behind it all however I think I can do a little bit better now that the dust has settled, and I’ve had time to collect my thoughts.

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As you can see my first three goals are money related. A $75,000 net worth is one my goals because I believe it is outside of what I can predict to be my net worth. With a few assumptions like anticipating that my net worth will be about $20k when I leave school and calculating my salary, savings, and money earned through investments my anticipated net worth lands somewhere around $40-$50k and obviously I want to challenge myself so bump that number up by 50% and take a crack at it.

My next goal was earning $2,500 in passive income in 2019. This has been a progressively growing goal for me for a couple years now. Some would say you have achieved financial freedom when your passive income exceeds your living costs. Whatever your definition, earning more passive income than active income is one of my goals and while it will take years for that to occur, I can make some progress towards it every day. I made $830 last year in passive income and with new income and coming from a good year as far as investments are concerned, I believe $2500 will be attainable.

A $10,000 emergency fund is my next goal, and it is more like a sacred account than an emergency fund but either way I should be able to smash this and hit about $16,000 based off the 40% rule and my calculations.

The next couple goals revolve around my online life in terms of this blog and my Instagram account. If you haven’t seen my Instagram profile check me out @bsquared.website to see what I’m doing in terms of my investments and what’s going on with me. First up is writing 150 total blog posts, this one has been an emphasis for me because sometimes I just must be in the mood to write and I need the time and energy for it as well. I simply want more content on this blog to improve my SEO and just to have a variety of information available to you all. I am currently at 76 posts with this one going live.  The next goal has to do with traffic and that is driving 1500 unique visitors and 2500 views organically. In the past I have driven some traffic with paid ads and what not but that’s not what I’m trying to do. I don’t have anymore amazon offers or anything like that anymore, I’m not trying to build this out to be a passive income stream just yet. I’m just trying to build an audience and a following by sharing my triumphs and struggles and hoping I can help some people out along the way. In 2018, I had 803 unique visitors and 1300 views, so I essentially doubled my numbers and came up with my goal in that manner. Again, some of that traffic was driven by paid ads so reaching those numbers organically is going to take some serious effort.

My next two goals revolve around Instagram as that is my main social media platform. Instagram is where I get my audience engagement and I can show all things B^2 so naturally I would like to grow my audience and my brand there. I would like to finish out 2019 with 750 posts and 3000 followers.

Related to my net worth and passive income generation I would also like to earn $5k or more from a side hustle of some sort because my income will remain static till early 2020 when I can begin earning commission. I haven’t quite figured out my game plan for this yet and so far its only been making a few dollars here and there from some of the apps I use to save money.

Last two goals are to own income generating real estate and to read 12 books or 1 book a month in 2019. I think the income generating real estate is a little bit ambitious but I will be done with my work training around November and then I can finally settle down in St. Louis and hopefully by then I can save up enough money to buy a duplex and house hack it. As far as the reading good I am always looking to improve myself and to keep learning and I listen to lots of educational podcasts however reading has been one of the harder things I have to do and I really wanted to focus on that and grow that “muscle” if you will during 2019.

Now that we flushed out all the goals with a little more detail lets see how we ended up. Below is a full 2019 goal comparison as well as one that has been scaled down for the quarterly evaluation, I essentially took the total increase needed to hit my goals and divided it by 4 to gauge where I was at and where I need to go.

IMG-3855

IMG-3854.png

As you can see, I’ve been doing atrocious in regard to the progress towards these goals but there are a few reasons and reminders I need to share. As far as reading is concerned, I knew that would be bad however, I should be able to make up ground over the month that I have off between school and work.  Passive income will scale with my earned income so coming in short for this is to be expected, however we should see a dramatic jump in June and on once the earned income starts rolling in. Blog visitors, blog views, blog posts, Instagram posts and followers are all related. A rising tide raises all ships so by picking up the weakest link (probably writing blog posts) we’ll be able to raise all those numbers I expect; I do believe these numbers will be easier to achieve as they work off each other and each other’s momentum. The side hustle bit is totally on me, I have made no real effort towards that and I should since I’m getting crushed on net worth thanks to Uncle Sam and all the fun I had in March.

Expect a new Quarter 2, 2019 goals Instagram pic to come out soon, I believe that is where we will see some progress considering my month off school and work as well as starting to make some money.

If you have any questions or concerns, I’d love to hear them, you can reach out to me on Instagram or here and I’d be happy to talk about anything with you. Also let me know what you want to hear more of!

Thanks, B^2

 

Lending Club Update 4/4/19

I know this is long over due and I normally like to get these done every 3 months however March was a busy month and I finally carved out some time for this, so let’s get started.

To refresh everyone on the update from December found here, I had 274 active notes after investing another $1500 into the platform. I had a rather even split of notes with an average weighted rate of 15.88% and had collected $717.29 as of then.

LC notes snip 12.13.18note details 12.13.18

I began pulling money out of the platform about November or late October and have been pulling money out ever since. I plan to keep pulling money out until I begin work full time in June and shortly after that I will begin reinvesting back into the platform as well as putting new money into assuming I have extra money left over after the 40% rule. For those of you that are joining for the first time or forgot the backstory, I am a college student with no income for 9 months of the year, I invested in Lending Club to receive a great yield (6-9% generally) and keeping my money liquid with monthly payments to pay for my expenses during school. In early April my portfolio looks like this.

lc 4.4.19lc pie chart

Had some defaults and some fully paid notes along the way but not looking bad, we earned another ~$260 in interest in the last 4 months so far although it is slowing down.

Below we will compare the non-adjusted and adjusted account values with December data first followed by April data.

LC interest non adjust

lc adj 4.4.19

The account value has decreased dramatically due to pulling out hundreds of dollars every month to live off of.

LC interest 12.13.18lc non adj 4.4.19

The April adjusted value has taken a big hit due to the numerous late notes I am currently holding. Even if they default I still should be in good shape overall and will just need to ride out the storm the next few months until we can get some new money into the account and breathe some life into it.

lc table

Above is a table I populate nearly every month on various aspects of the account including the immediate return taken from dividing the adjusted account value by the (total deposited into the account – the total withdrawn). This is taken over the course of 2 years now so the 10% isn’t all that great however as with all of my accounts they have grown dramatically over the years and I have made wiser investing decisions as time has gone on usually. Also returns were so low in October due to the influx of new capital into the account and the notes hadn’t started payments yet essentially making them dead money at the time.

The final table I will show you guys today is a simple interest table by each month.

interest lc

You can see the dramatic uptick with the $3000 I put into the account this summer as we entered Fall and now its on the downswing again.

That just about wraps it up for me, I hope you all learned something today in regards to Lending Club and how I keep track of its performance. I can’t recommend the platform enough assuming it fits your investment criteria. I mentioned earlier my need for liquidity while making a decent return and getting paid monthly to cover my expenses and this platform does just that. I can’t beat the return with what I am getting either and I look forward to putting some more money into it in the future and being able to compound my returns rapidly. I should be able to purchase 8-10 notes a month at my current rate and with additional funds I could compound interest and reinvest in notes every 2 days on average in the future (15 notes a month or $375 in interest and principal every month).

As always let me know if you have any questions!

Thanks,

B^2

The 40% Rule

As many of you know I am a fan of Grant Cardone with a lot of his stuff and one of the key takeaways I look forward to applying to my life is the 40% rule. The 40% rule was documented in the Great Depression where the wealthy were saving 40% of their income, and its just that simple.  The 40% rule is saving 40% of your income before taxes, so if you make $10,000 a month that would require you to save $4,000 a month. If you start looking at the math you’ll realize after taxes and expenses that it is very difficult to achieve the 40% rule, and it is. Income is a priority for the 40% rule, you can’t save what you don’t make, and you must pay yourself first. I will show you a real example using my actual projected salary for my full-time job starting in June.

For my full-time job I have a $57,600 salary ($4800 monthly), a $5,000 signing bonus paid in first month, and a $500-month stipend for the first 18 months. It is a salary and commission pay plan however I will only account for the salary part since I don’t know how much I will sell yet.

Because I start mid-June, I calculated my gross income as half of my monthly salary ($2,400) + $5,000 bonus + $500 stipend = $7,900

June July August September October November December Total
4800 $7,900 $5,300 $5,300 $5,300 $5,300 $5,300 $5,300 $39,700
save 40% $3,160 $2,120 $2,120 $2,120 $2,120 $2,120 $2,120 $15,880
tax $1,738 $1,166 $1,166 $1,166 $1,166 $1,166 $1,166 $8,734
budget $3,002 $2,014 $2,014 $2,014 $2,014 $2,014 $2,014 $15,086

Looking at the table you can see my budget is around $2,000 and it will be less than that when you consider my 401k will also be pulled out of my income. I did assign a tax rate of 22% which is the bracket you would be in for this income however your marginal tax rate is less than that, either way I prefer to be conservative with my estimates. (I calculated my marginal tax rate to be 11.5% which would add $570 to my budget every month or $570 more to invest every month) For reference, I take data on my spending habits every summer when I am on internship or co-op. This summer I had no living stipend and was completely on my own, my monthly spending came out right at $2,000, though that includes some extraneous cost that most likely will not happen in the first 6-months of my full-time job. I also will be living at home or my girlfriend’s house during the first 6 months of my full-time job as I will be traveling 90% of the time during training.

Realistically looking at the first 6-months I will have extremely low expenses and may be able to save even more aggressively than what I have shown. Any extra income I can save will be put into my other investing accounts (Robinhood, Lending Club, and Stash). Ideally, I would like to save around $20,000 from my full-time job in 2019, which will help me achieve my $75,000 net worth goal. I would also like to try and purchase a 4-plex or duplex at the end of 2019 assuming all goes according to plan.

Looking at 2020, the saving and income numbers look the same as the later half of 2018. Commission will be included assuming I make sales and as my commissions come in, I plan to add those additional funds to my investment accounts as stated above. Looking at 2019 and 2020 I plan to save $40,000 with the 40% rule and invest additional income in my investing accounts. I plan to save in my Discover Savings account which earns 2.10% APY, which will add to my saving goals as well.

2020 will be difficult to keep in budget, I will then be paying rent and will be living full time in St. Louis. The $2,000 I lived on during internship was living like a poor college student for the most part, as I enter the real world, I expect my standard of living from the food I eat to the activities I participate in to be more expensive as well. However, I at least have an idea of what I spend monthly in preparation, I suggest to everyone to start documenting your spending to get an idea of your habits. If you need help or would like to look at how I do it, I cover it in THIS article.

As I mentioned earlier in the article, income is critical to achieving this aggressive saving plan, for your convenience I will run an example with a salary of $40,000, and I will use a marginal tax rate to ensure accuracy. I included above my actual budget above when marginal tax rate is considered ($2570/month).

June July August September October November December Total
$40,000 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $23,331
save 40% $1,333 $1,333 $1,333 $1,333 $1,333 $1,333 $1,333 $9,332
tax $283.31 $283.31 $283.31 $283.31 $283.31 $283.31 $283.31 $1,983
budget $1,716 $1,716 $1,716 $1,716 $1,716 $1,716 $1,716 $12,015

As you can see with $850 less a month in your budget that makes things considerably more difficult depending on your life style and where you live.

I hope you learned some valuable information about budgeting and saving money, I’d love to hear about how you save and what your targets are!

Thanks, B^2

How to Invest your first $500

Just a quick heads up, I don’t normally write articles like this, in fact this wasn’t even for my blog. Another Instagram investing page/ blog asked me to write this article and after waiting to hear back from him for 2 weeks and not seeing it posted on his blog either I decided to put this article on my blog since after all it was my hard work and effort to write it.

So, you saved up your first $500 and you want to invest it. First off, I would like to congratulate you on this feat, approximately 78% of Americans (I’m writing this in the United States, sorry to everyone outside the United States that this statistic doesn’t apply to you) live paycheck to paycheck so the fact that you escaped that cycle deserves some kudos. Before you start investing though, we need to get a couple things straight. If you have any high interest debt (i.e. credit card debt) please handle that before you even think about investing. A beginner at investing will have a hard time earning more than the debt is costing not to mention the other ways high interest debt affects your credit score and other financial aspects of your life. So first and foremost, handle high interest debt if you have it before you start investing. Secondly, if you do not have an emergency account or fund, I would highly advise to put your $500 into that before you start investing. Accidents happen, illness happens, the world is an unpredictable place and having extra money in the event of an emergency can be a life saver.

You’ve taken care of step 1 and step 2 and you still have $500 you’re ready to invest with. Congratulations you are about to embark on the path to financial success! Warren Buffett, one of the most successful and renown investors once said, “If you don’t find a way to make money while you sleep, you will work until you die.” That’s what we aim to do! Before we begin everyone should know that all investments carry some sort of risk and have different time horizons to work with. Pending your current financial situation and what you aim to do with that $500 you can take several different routes listed below.

Quotation-Warren-Buffett-If-you-don-t-find-a-way-to-make-money-87-85-65

  1. Invest in yourself

Let me make this clear before you go on a shopping spree, there are ample resources when it comes to free education. YouTube, Podcasts, Free eBooks, Blogs, Written articles, Company financial documents etc. are all at your disposal with an internet connection. Assuming you have exhausted the resources above or are looking for something more detailed I would recommend several investing and financial books and making the commitment to read and follow through on them. To name a few, The Intelligent Investor – Benjamin Graham, Think and Grow Rich – Napoleon Hill, Rich Dad Poor Dad – Robert T. Kiyosaki, The Little Book of Common Sense Investing – John C. Bogle. While not all directly related to stock market investing someone trying to invest their first $500 would benefit from the messages in these books. Note that buying 3-4 books will still leave you with plenty of money from your initial savings, I would suggest reading and using the advice given in the books and in this article to utilize the rest of your capital at your own will. An investment in yourself will yield dividends for the rest of your life to come, it is therefore one of the most essential investments to make early on. If the books above aren’t your forte there are several other books centered around general success that may light a fire in your heart to pursue greatness.

  1. CD/High-Yield Savings Account

Holding your money in a CD or a high yield savings account is a great option if you need your money to remain liquid or you have a short time horizon and low risk tolerance. Besides investing in yourself this option carries the lowest risk but also lower returns than can be seen with the other options. I currently use a savings account with a 2.10% yield. This would generate $10.50 a year in a savings account and while that is not a lot there is extremely little risk in this approach and your money is accessible.

CD’s or Certificate of Deposit have a fixed time period to invest over but have higher returns than a savings account. I quickly searched CD rates for 1, 3- and 5-year terms which produced the following yields respectively 2.8%, 2.85%, and 3.10%. (2/11/2019) These were the best rates I could find while adhering to a $500 minimum deposit and would produce returns of $14, $44, and $82 respectively. Now these returns are low, they slightly outpace inflation, but they are safe and rather liquid. I would recommend this strategy if you are new to investing and are trying to combine strategy 1 (learning about investing) and putting your money in a safe modest return investment until you know what you want to invest in.

  1. ETF’s and Index Funds

An ETF index fund may be the best mix of aggressive and save on this list. Let me pull up some definitions real quick to make sure we are all on the same page.

ETF – “An ETF, or exchange-traded fund, is a marketable security that tracks a stock index, a commodity, bonds, or a basket of assets. Although similar in many ways, ETFs differ from mutual funds because shares trade like common stock on an exchange. The price of an ETF’s shares will change throughout the day as they are bought and sold. The largest ETFs typically have higher average daily volume and lower fees than mutual fund shares which makes them an attractive alternative for individual investors.” – Investopedia

Index Fund – “An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor’s 500 Index (S&P 500).” – Investopedia

A S&P 500 ETF index fund provides good returns on average, low expense ratio, little knowledge or analysis required, and it provides a dividend which all contribute to their success. An app that provides these funds for a low cost would be Stash App, in addition to picking an index fund you can also pick a variety of ETF’s including those that track bonds, precious metals, technology companies, banks, etc. For the S&P 500 the following tickers IVV, VOO, SPY will mimic the index closely and save you money on the expense ratio as well.

In this strategy you are investing in the broad market which has experienced volatility recently. The index and ETF’s will experience ups and downs providing more risk but higher rates of return on average. In the event of a market downturn, the investor will not be able to withdraw the investment without realizing losses. If pursuing this strategy, the investor should understand the risk and possible length of this investment as both are much greater.

  1. Individual Stock of a well-known company

This strategy presents the highest risk/reward of the strategies discussed. Buying shares of an individual stock effectively puts all your eggs in one basket which adds to the risk however an individual stock can move both up or down much quicker than an ETF. Companies such as Apple, Google, Amazon, Facebook, etc. are popular options. Some stocks such as Google and Amazon have share prices of $1,000+. In this event you will need a platform that allows you to buy partial shares to be able to purchase these stocks with limited funds. I would not recommend a small cap company, penny stock, or any speculative play.

Whichever platform you choose it should be noted that a platform that minimizes brokerage and additional fees should be desired. With $500 to invest with it is critical to not waste capital on fees. Apps I am familiar with that are friendly toward beginner investors with limited capital include, Robinhood, Stash App, Acorns, M1, and Webull. Like strategy 3 a longer investment horizon is required for individual stocks.

In conclusion, there are multiple strategies to invest your first $500. Based on what your goals, risk tolerance, and investment horizon are you should be able to come to a solid conclusion on what strategy is best for you. Having a realistic approach to investing is vital, expecting 100% returns in your first year is asking for failure and discouragement. Hopefully you found this information useful and can begin your investments on a good note.

Thanks,

B^2

IG @ Bsquared.website

Blog @ Bsquared.website

Email @ Bsquared.web@gmail.com

 

 

 

 

2019 Goals

Looking into 2019 I have some goals and aspirations and I plan to look at them closer than I did last year. After all, it’s critical to know where you are going and remind yourself what your targets are. I mentioned previously that I graduate in May and begin my full-time job in Mid-June. I’ve calculated potential income with my salary and decided to shoot a little higher than that. I would like to have a net worth of $75,000 up from my current net worth of $26,500. While building up my net worth I plan to put at least $10,000 to my emergency fund in my discover savings account. I make a nice 2.10% APY on that account leading to a $210 yearly passive income generated from that account alone. Overall making money while I sleep is nice and I would like to make $2500 in passive income this year. On average that is $200 a month and from there we’ll keep bumping that number up. With the eventual goal of surpassing my active income. To help get that income up so I can invest more I aim to have a side hustle that will generate $5000 this year. With all of that in mind I plan to buy income generating real estate at the end of 2019 or invest significantly with a syndicator.

Money isn’t everything so on the note of building my personal brand and learning more I have several goals related to this. I would first and foremost like to have 150 blog posts in total by the end of 2019. This comes out to writing about 1.5 posts a week. In addition, I would like to have 1500 visitors and 2500 views on my blog in 2019 organically. My other large platform is Instagram and is probably how you are reading this article. I would like to finish 2019 with 750 Instagram posts and 3000 followers. The blog goals and Instagram goals will go hand in hand as they both stimulate each other. The last of my goals involve learning, I aim to read a book every month of 2019, 12 books in total. I’m aware this isn’t a whole lot however I will be learning and studying for school as well as work for most of the year and you can only cram so much into your brain at once.

I know this is very late to be talking about 2019 goals however it took me awhile to decide what I really wanted to go for this year as well as taking the time to sit down and write this out. Feel free to leave a comment below about your 2019 goals or post your comments on Instagram!

B^2

Stock Portfolio Update 1/23/19

Today I’ll be giving an update on my stock portfolio. The previous blog post about my stock portfolio can be found here* it is from September 14, 2018 and will be briefly recapped below.
Last time I had $9,750 funded in my Robinhood portfolio, today we are sitting at $11,500 funded. This was done by putting my income from the internship into the stock portfolio in late September and October. Previously I had profit and dividends of $670.92, today we are sitting at $1,132.90. Several large sales were made to attain this profit including selling the entire O, Realty Income position. While the numbers above show profit, all earnings have been reinvested back into the account and my account value is below the funded portion not to mention the $1.1k profits in their as well. I have several positions that require more maturity and I believe in 2020 I will be in the black. Below are pictures showing my account, for all side by side pictures, the picture on the left will be from September while the picture on the right will be recent.

IMG-2940-2974543385-1536945254322.png IMG_3463

As I am sure you are all aware the markets have been volatile lately and performance hasn’t been the best as of late. As I mentioned earlier in September the account was funded at $9,750, while currently the account is funded to $11,500.

Below I will highlight some of my positions.

IMG-2942 IMG_3467.png

My largest positions is also one of my worst preforming. This is a company and a situation that is getting better but I wouldn’t get my hopes up till 2020 or later. I have cost average down this position substantially and plan to wait on it to recover.

I mentioned ULTA on the last update however the situation hasn’t changed much. Its gone up, down, and sideways and I have used that to my advantage by skimming some profit off the top and buying back the share when it fell. Still waiting for it to reach new highs, price target is going to be reduced from $335 to somewhere around $315-$320 or so.

I sold O, Realty Income, and my total gain is around 22% according to a back of the napkin calculation including dividends and appreciation. While it may not have been the smartest move since I try to stick with my dividend stocks I felt that at the time it was towards the high end of the spectrum and I needed to cost average down other positions. Most of the updates this time around revolve around cost averaging positions. As we approach the end of this article take a look at the final two tables and look at the average price per stock in some of these positions. With the stock market shakeout/weakness I tried to take advantage of the sale and buy where I thought I could expect future appreciation.

IMG-2943-675463075-1536945409533.pngIMG_3468.png

Apple was a hot topic back in September with my screenshot showing a $221 stock price. We all know how that turned out and I’m still holding and collecting dividends on it.

Ford is another position I cost averaged down on, it also helped supplement my dividend income from the sale of O. In September I was holding Ford at $10.74 @ 100 shares, today I’m holding 150 shares at $10.00 yielding 6% on the dividend.

I always gotta harp on my best pick of 2018 so far, P&G still killing it after a good earnings report. Wish I had bought about 10 shares instead of 2 but we live and we learn and I have made some pick mistakes in my investing career that’s for sure.

IMG-2949IMG_3461.png

Dividends are rolling in strong for 2019 after an incredible December. Look for an update on those soon. Other notable mentions as far as my stock portfolio. I cost averaged JD and BABA on weakness as well as FB, and ROKU. I believe these will be great positions in the future so long as I hold while the markets do their thang.

It’s been a rock end to 2018. Here’s to hoping 2019 goes better. Couple of quick notes, thanks you for reading this as always, feel free to drop a comment in the blog or on IG. Pending how my taxes go there may be some changes my accounts will have to undergo. I will keep you all updated and try to keep Uncle Same happy.

Lastly, below are the full spreads of m Robinhood account

Thanks

B^2

OLD

stock port

NEW

sp 12319sp2 12319