Future investment plans

I’m coming up on work here soon and its had me thinking about what I want to invest in and where I want that money to go. Just like a kid at Christmas I get a little giddy inside just thinking about it. If you didn’t know I am planning on saving 40% of my income before taxes however I am hoping my living expenses are so minimal that I will still have excess outside of my cost of living expenses. I am looking to add an alternative investment to my belt known as Ground Floor, a peer to peer hard money investing platform like Lending Club. It has high returns and a shorter time period than Lending Club which should allow for a great ROI and passive income generation. With returns around 8-12% depending on the loan and duration I would like to get $1,000 in there as soon as possible and get the money churning out of that platform. I have about $30 in there now thanks to the extremely low minimum required ($10).

Coming up next I would like to get into the Cardone Capital fund for non-accredited investors as soon as possible. It requires a minimum of $5,000 to invest and it has a 10-year time horizon. They anticipate a 6% return per year with it increasing as time progresses and then a big chunk of profit at the end when they sell or refinance. At $300 a year in passive income that would help me hit my future passive income goals substantially. I could also try and reinvest into the fund if it is still open later down the road and would not be opposed to putting in an additional $5,000 into it and bring the passive income total to $600 a year or $50 a month.

I would also like to bring my Robinhood account back up to $10,000 its currently sitting at $8,050. I wish I could make this happen sooner and take advantage of some of the panic selling that has gone on lately however I expect to see some more of that in the future. I would also like to bring up my Lending Club account significantly and believe once I start making money and no longer need to pull every dollar and cent out of my account that it will compound nicely come August-December and finish the year off strong. I would also like to build my stash account back up again as well from its current $2,500 or so up to $4,500. I’ve depleted it for a while and would like to pick up some good deals and get some dividends coming back through it as well.

One of the last investments I’ll mention is in myself, I plan to buy a real estate investing program from the YouTuber MeetKevin and learn from a realtor and real estate investor exactly what I want to do and how I want to get there. It’s a $300 program or so and I think the knowledge will be extremely valuable in the future when I plan to get into real estate investing.

As you can see most of my investments are passive income related and there is good reason for that. With the next 6 months solely focused on learning and training for work followed by an additional 12 months of inside sales which will need to take up most of my time to be successful. The plan is to establish these passive income sources and let Father Time do the work and I’ll just sit back and collect the interest, dividends, and the rent checks. It will also take massive amounts of action to reach my $2500 passive income goal by the end of 2019, however with a little bit of side hustle and a proper plan we might just get there!

Till next time, B^2

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

 

 

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.

IMG-3403.png

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

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.

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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.

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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

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stock port

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2018 Goal Review

About a year ago I wrote a blog post titled “2018 Goals” an article which I reflected over my recent short coming and looked to 2018 with open eyes and tried to make the best of my situation. Recently inspired by Grant Cardone’s “10X rule” I set lofty goals and set a series of plans in place to achieve them. Today we’ll review what happened to all of that and what I intend to do moving forward. Below are the goals followed by a bullet point explanation as to what happened.

Goals:

$2500 in my aspiration emergency fund (this would give me the 1.00% APY interest rate)

  • This had quite a turn of events occur. First off, I no longer use Aspiration as my savings account, I upgraded to a Discover Savings Account which pays out 2.00% APY and may increase with the recent federal rate increase. Overall, I fell very short of this goal and ended up with $900 saved (was $1,000 but Christmas fucked me). I focused on adding funds to accounts that would make more than the 2.00%. I do have a joint savings account my parents started for me when I was very young, if I transfer that account over I would be able to hit my goal as shown above.

$20,000 In my Robinhood portfolio (originally shooting for $10,000, hoping some options trading will give me the edge I need to achieve this goal)

  • I hit the original goal of $10,000, in fact I will finish 2018 with $11,500 and I have recently been getting destroyed in the stock market. $20,000 was an incredibly lofty goal in terms of being able to generate that much profit from the markets and I was unable to achieve that. I did increase my portfolio by $3,500 but I turned my attention towards Lending Club.

$10,000 in stash app (originally $5,000)

  • I believe Stash topped out at $3500 at some point this fall but has since dropped due to stock market performance as well as several withdrawals to fund my ski trip and other activities that I have going on. I was able to increase this portfolio by $1700, but again primarily focused on Lending Club.

$10,000 in Lending club (originally $5,000, would be incredibly useful in the stretch investing method)

  • I have preformed rather well in this category this year. My plans continually shift, and Lending Club became my primary target in terms of funding this Summer and Fall. I topped out the account at $6,381 as far as my records indicate, in pursuit to stretch invest my rent this school year. While $10,000 was quite ambitious that may be my new goal for 2019. In total, I added over $4,000 to this account this summer and fall.

Collect over $1,000 in dividends and stock interest (this year projected amount was ~$300, original goal was $500)

  • This one is a constant battle for me. I love passive income, I love making money while I sleep, but I also need to generate positive returns in the stock market too. My investing strategy constantly shifts but I also look at growth stocks that could deliver amazing returns and not just dividend stocks. Between lack of funding in my Robinhood portfolio and investing mostly in growth and value stocks rather than just dividend stocks I was unable to hit my target.

Have 5, $1,000+/year income streams by the end of 2018 (Anticipate being Dividends/interest, Lending Club interest, Internship, Drop Shipping, Blog)

  • I honestly don’t know what I was thinking on this one, perhaps, diversifying my income streams more however my summer required extreme focus to achieve the desired results. My most lucrative income streams in order:
    • Internship $22,200
    • Lending Club interest $419 (still waiting on December results so approximately $500)
    • Stock profit $375 (approximated)
    • Dividend income $300 approximately
    • Various odds and ends of selling unused things or doing odd jobs might come out to $200/year or so

As you can see my alternative income streams just did not come together like they needed to.

150 blog posts by the end of 2018

I thought I was going to make impressive headway during this summer but that was not the case. With my line of work, I was working 6-7 days a week and had no set schedule which hindered my blogging. My goal is to finish 2018 with 75 blog posts and this one will come in at #69 (nice) (gang gang gang) (RBP).

Image result for ross bolen podcast

As you can see, none of my big goals of the year were accomplished however that is not always a bad thing. I would rather go big and come up short rather than go small and have no ambition in what I am pursuing. The 10X mentality may not translate perfectly into my academic life or my internship as well as it would to a post graduate’s career and starting out his or her life. You can’t 10X your GPA from a 4.0 to a 40.0. There is a finite amount of time and resources as an intern to try and compete with targets and goals set by full-time coworkers that can work 9 months compared to your 3 months.

The good news is I will be making that transition this summer to a full-time employee and be finished with college. While I will be training for most of 2019 and will not have control of my income like I will when I really get into sales, I will have access to more income than I have in all my life. With that all in mind, I plan to make some big moves in 2019 to make the most of my opportunities. Keep your eyes open for that post!

So, tell me some of your goals and ambitions this year, I look forward to reading your comments.

Thanks, B^2

 

Lending Club Update 12/13/18

Hey everyone, sorry for the delay, I just took my last 2 exams yesterday 12/12/18 for school and can finally settle down and get some non-school related work done. So today I’ll be comparing my Lending Club portfolio to what it was on the last update from 9/17/18. Now for those of you who are reading this blog for the first time let me catch you up quick. If you are familiar with me and Lending Club skip down to the horizontal line.

My name is Brandon, I’m a college student if you couldn’t tell by the exams above, I graduate this upcoming May, and already have a job secured so that’s exciting. Lending Club is a peer to peer (P2P) lending platform where, rather than borrowing money from a bank or financial institution, individual investors fund the borrows and receive interest and what not just like a bank does. I’m obviously on the investor side of things so I can’t say much about the borrowing side.

It’s a rather simple platform, I as an investor put in say $1,000 (you can invest with as little as $25 but this is just an example), I can pick which loans I want to fund and fund it into $25 increments (it’s not all or nothing). So, for example, XYZ is requesting a loan for $20,000 for credit consolidation, Lending Club does its due diligence in terms of background information (credit score, credit history, current income, current debt, debt-to-income ratio, etc. etc,), they then assign them a scoring based on the above information in an A-E, 1-5 scale. An A1 rating represents the safest investment while an E5 represents the riskiest investment. Based on that scoring the interest rate is calculated as of today (the rates have changed recently due to rising interest rates in the U.S. and Lending Club has been doing a good job of keeping their investments in line with rising interest), an A1 loan has a 6.46% interest rate, while an E5 has a 27.27% interest rate. The loans come in either 3 year or 5-year lengths and the investors get paid monthly. So in the previous example if I were to take that $1,000 and put the money to work in a variety of loans ($25*40=$1,000) spread over different ratings, I would get paid monthly on all of those and earn somewhere between 4%-7% give or take because of course Lending Club takes a 1%-2% cut or so. Now the loans can always default, or get paid back early, in that case you lose potential interest. So obviously there’s some risk involved as with any investment and even the high-quality A grade loans have defaulted on me before.

My favorite aspects of Lending Club are the monthly principal and interest payments from every loan. In November I collected $75.28 in interest and received about $250 in principal back. I also love the ease of reinvesting at the level I am at. With about $325 coming in from last month divided by the $25/note price tag I could reinvest my P&I 13 times in a month all while earning around 7% interest! Only place you can reinvest quicker is a good savings account and even then, the best you’ll make is 2% (at least that’s what my discover account makes a year)

Alright time to compare the last 3 months side by side. For the following comparisons we’ll do the September data on the left and the December data on the right.         lending club notes       LC notes snip 12.13.18

As you can see, we have a significant increase in notes over the almost 3-month period. I mentioned in the previous update that I was waiting on my internship bonus to come in to help fund this endeavor and when it arrived it allowed me to put another $1,500 into Lending Club. Charge offs, fully paid and other scenarios have gone up as they always had.

I did not include the following pictures in my previous update but here they are now. Below is a pie chart depicting my current portfolio by what rating it has. As you can see it is relatively spread even throughout the spectrum except for F and G as they are no longer offered and were incredibly risky. My detailed returns are also shown below.

note composition 12.13.18 note details 12.13.18

Moving on, we’ll examine the overall account value as well as return on investment. Since these pictures are long, the September numbers will be shown first, then December.

lending club adjusted

LC interest 12.13.18

This shows the adjusted account value and return for my entire portfolio. It is adjusted based off the probability and amount of the various late and defaulted notes in my portfolio. As you can see the account value is dramatically higher as well as the % return. I expected this to happen for a few reasons. For one I mentioned a $1,500 deposit I made to the account increasing its value as well as being able to compound the account through October to reinvest my earnings. As for percent return the account had an influx of new notes at the time as you can see by the first set of pictures. When notes are not issued they add to the account value but not to the profit because they haven’t started paying you yet. This decreases the % return significant and I have seen it every time I make a large deposit. Over time this will drop due to notes defaulting and being paid late.

The next set of pictures show the non-adjusted account values again we will go September then December.

lending club no adjust

LC interest non adjust

As you can see the percent return and account values are both up and consistent with the previous set of pictures.

So you may be asking what the point of all of this is, like nice bro you made some money, but what’s the deal? Well making money especially passively has always been a huge focus for me, you only have 24 hours in a day and you gotta sleep, so until you can make money while you sleep or while you are not working you will be broke forever. (paraphrased from Warren Buffett) So check that one off the box. I mentioned earlier that I am a college student, I have internships over the summer and I don’t work for the other 9 months of the year, and I needed a way to generate income in a fluid manner throughout the school year. Yes I know I could just stick it all in the bank and withdraw when needed but you don’t make shit at the bank so that’s wasting your money’s potential.

Here’s a bit of background, I moved out of my fraternity house this semester, so I was kinda on my own as far as rent went and I wanted a way to pay my rent and make money at the same time as I have been eluding to in the previous paragraph. I decided to go balls out in Lending Club, utilize the monthly payouts, utilize the return, utilize the fluidity from Lending Club to checking account transaction, and fund my rent through Lending Club.

Overall, I think I accomplished what I was trying to do, if you recall the September update, I mentioned my rent at school was $275 + utilities = approx. $350. I know that’s dirt cheap but it’s a small college town and its not the most glamorous house but whatever I’ve dealt with worse. The total collected amount for principal and interest in November was about $350 so I technically made it, but it doesn’t quite feel like it. I wanted to do better than where I am at now and I am currently in full out withdrawal mode to pay rent, and credit cards, fund my ski trip, buy Christmas presents etc. etc. So, I can’t compound or add to Lending Club any time soon. I believe that if I could’ve started adding to Lending Club sooner this summer (between rent and deposits and just starting work, I was seriously in the hole the first month of my internship this summer) I would’ve had a better shot. I made incredible money over the summer, but I lost the time value of it and the compounding power, because I received about half of my total payment after I left to go back to school. You can read about my internship here

Well awesome guys thank you so much for taking the time to read this, lots more will be coming here in December, we’ve got big plans, big goals, and lots of ambition to get there. Please let me know what you like, don’t like, want to hear more about, if you want shorter or longer posts, videos, tweets, more or less stuff on Instagram etc etc.

I’m here to provide insight and value to all my followers and readers. I want to know what you guys want to hear so I can deliver the best content in the best format possible. Hit me up here and leave a comment, or dm me on Instagram @bsquared.website.

Here’s the link to Lending Club Update 9-17-18

Thank you everyone!

B^2