Is It Worth Keeping Tons Of Cash On The Sidelines Waiting For A Stock Market Correction?

On January 26, 2025January 26, 2025 By Dean BrooksLeave a comment

A thought experiment.

Over a decade ago, after moving to North Dakota to work in the oilfield, I lived in a church basement that had been fitted with dorm-style units. One of my “basement mates” was a nice guy in his 50’s from Virginia named “Alan.” We got to talking one day and he told me how he had $50,000 saved up that he was planning on using in the next big stock market correction. This was only a few years after the 2008 Wall Street crash, so it was still fresh on everyone’s minds.

At the time, ND was undergoing a massive oil boom due to technological improvements in the fracking process. Everyone working in the industry was making huge amounts of money, and like a rising tide, that lifted other sectors as well. Cooks at fast food places were starting at $18 an hour and up. Wal-Mart was paying people $25 an hour. Rent skyrocketed, too. I paid $1000 a month for my tiny basement dorm.

Alan was a CDL treater truck driver. Basically, he drove around to well sites with a giant mobile furnace that could heat up oil and water, and flushed chemicals, water, or oil down well heads in order to keep the lines clear and lubicated. He was probably making around $160K a year with all the OT he was pulling in. So, it was no surprise he had piles of cash sitting around.

I remember asking Alan that if the market were to crash, at what point would he jump in with his war chest? When it was down 10%? 15%? 20%? He didn’t have an answer. Back then interest rates were super low. He was probably only getting around 2% max on a savings account. That’s losing out to inflation badly. The real rate of inflation is not 2–3% like the government likes to report. It’s more like 7% when you factor in everything like real estate, college tuition, cars, medical care — everything that goes into living a life.

Since my talk with Alan over a decade ago (around spring, 2013), the S&P has gone up 3.5x from 1680 to over 6,000. That $50,000 would be worth $175,000 today had it been invested in an ETF like SPY. Interest rates have increased modestly, going as high as 5.5% for some savings accounts when they were at their highest. But nowhere close to a 3.5x return like the S&P.

Worth noting: SPY was about $156 back then. The ETF paid out $1.97 per share in its last dividend distribution. Buying $50K worth of SPY then would pay you $630 per quarter now, and nearly $2,500 a year. That’s the same amount you’d get if you just stuck that $50k in the bank with a 5% interest rate. So, the dividends alone are matching savings accounts. To say nothing of the compound growth in dividend reinvestment, or employing other forms of income like selling covered calls.

Bottom line: Owning the S&P is going to likely give you 10%-15% returns every year over the long-term.

Also worth noting: the stock market hasn’t crashed like it did in 2008 since my talk with Alan. Even the brief Covid crash and the 2022 correction weren’t anywhere close to the near -50% drop seen in 2007 through 2009.

Here’s another way to think about it. Let’s say you have a million dollar stock portfolio in the S&P 500, and $100,000 in dry powder on the sidelines waiting to use for the next big crash. If stocks drop 10%, even if you timed the bottom perfectly, you’re only getting a 10% discount. How many years of dividend gains and compound growth did you give up for that “big” discount there? Obviously, you wouldn’t time the bottom perfect, either. No one can. Anything less than a 5% discount is only matching what you’d get in a high-interest savings account. So, it’d be a wash at that point.

But what about investors like Warren Buffett who keeps hundreds of billions in cash sitting around? What about individual stocks and investments outside the S&P?

Big investors like Buffett and others operate at such a high level that it’s hard to know their ultimate motives or aims. Buffett isn’t concerned with grabbing a mere 10% discount on the S&P. He wants to own entire companies or take controlling interests in things, like how he bought BNSF railroad in 2010. Accredited investors like him are also afforded “insider” opportunities on things that average investors are not, such as IPOs and such. An investor like him might keep cash sitting around waiting for an AirBnb to come along.

For the average “buy and hold” diversification-style investor, aka the one looking to retire at 60ish with one mil plus, it doesn’t make sense to keep tons of cash sitting around waiting on some big crash. Especially if you’re largely just buying the S&P 500 or the NASDAQ anyway. For someone like that, you really only need emergency savings PLUS “peace of mind.” Meaning whatever extra you need that helps you sleep at night. Five thousand, ten thousand, whatever.

For more active investors, more cash is going to be strategically optimal depending on their experience and timing. During market drawdowns, individual stocks afford better buy-in opportunities than the S&P, obviously. Buyers of META during Mark Zuckerberg’s Congressional hearings in 2022 could have bought the stock at near $100. It’s since gone up past $600. A fantastic return in only two years.

Last March, Reddit offered users the opportunity to invest in the company’s pre-IPO share price at $34. I bought some myself, as I talk about in this article here. Since the stock’s public listing, it’s gone up to $180, giving over a 5x return. That was a time when having some cash lying around proved a good idea for me. But remember, speculation is still speculation. Plenty of individual stocks that once looked like bargains have continued to crash.

I read articles saying you should keep 10–20% of your portfolio in cash sitting around for big opportunities. I don’t think you need quite that much. Ideally, you would simply take one investment’s profits to switch into another investment. After measuring the tax hit, of course. Then you’re kind of playing with house money. For instance, I sold a bunch of alt coins a few weeks back, some of which I’d made multiple x returns on over the last 18 months. I rolled most of the gains into my River exchange account where I get a 3.8% annual return paid in Bitcoin, while using the money toward my $20 daily DCA 2025 experiment. As Bitcoin hits certain benchmarks, I’ll likely ladder out some of my holdings into the S&P or into other assets. If I were to take, say, $50K out of my Bitcoin profit holdings for use as a down payment on a house, it’d be like I got that $50K for free. I also made that $50K way faster than it would have taken me if I tried saving it.

And that’s another thing to consider. It takes forever to save up cash even if you have a high income. Even if you make $100k a year, after taxes and expenses, it might take you a few years to save up a mere $50K. Meanwhile, the S&P is going up 10–15% a year, and other stocks or cryptos are going up big. Most likely, you’re better off just putting as much of your money to work as possible, and keeping enough on the side for emergencies and a little extra for peace of mind.

My Very Simple Investing Strategy For 2025

On December 31, 2024December 31, 2024 By Dean BrooksLeave a comment

Keeping things easy and mostly automatic going into the new year.

I love investing. I love saving. I love seeing my money grow over time without having to do anything other than sit and wait. I think it was Charlie Munger or Warren Buffett who said, “Compound interest is the eight wonder of the world.” He was quite right.

2024 delivered some fantastic gains across the board for virtually all assets — gold, Bitcoin, and US stocks, of course. Like many others, I’ve seen my networth grow substantially. At this rate, I’ll be semi-retired far earlier than I expected. All good.

While I love investing and watching markets, I hate all the hand-wringing and consternation that often goes along with it. It’s great to make money, but not if you’re going to obsess about it and be checking stock tickers and the Bitcoin price every five seconds. What kind of a life is that?

It stressed me out all year. As I get older, I’ve learned that nothing beats having peace of mind.

I’ve been burned in the past on bad investments that I put way too much time and thought into, while ironically doing quite well in ones I didn’t think much about because they were diversified and “boring.”

My ETFs and index funds? All in the green. But often I do poorly in individual stocks or options investing. I did do great with the Reddit IPO in 2024, nearly 5x-ing my small pre-public investment. Looking back, I wish I had put way more in than I did. But hindsight is 20/20 and all.

To help keep things simple and easy, I’ve decided on a very straightforward strategy. Basically, any money I use for investing after taxes, expenses, and my retirement account contributions will be apportioned like this:

60% equities — Meaning SPY and QQQ, the only two holdings currently in my main non-retirement brokerage account.

20% Bitcoin — This is in addition to my 2025 DCA experiment, which I outlined here. Bitcoin is volatile as hell, obviously, but I’m in it for the long haul. I’ve been in crypto since 2020, so I’m a weathered vet at the ups and downs.

10% precious metals (mainly gold)— I only buy bullion in one ounce increments to save on over spot mark-up, and I prefer the .9999 purity of the incomparable British Britannias. Such a lovely coin, and actually the cheapest way to buy gold over the American Eagles, Buffalos, Canadian Maple Leafs, or almost anything other than packaged gold bars. I also like to buy the silver Britannias every year, too.

10% cash savings — This is money I’ll be saving for pretty much anything. It could be for investing into any of the above categories, toward vacations, collectibles, something risky like options, or whatever. This is savings that sits on top of my emergency fund. Obviously, if I had to dip into my emergency savings for something I’d have to replinish that first before anything else.

What’s missing? Real estate. I don’t own a house or any property, and don’t have any plans to just yet. Housing is not really practical or even worthwhile where I live because of the harsh winters and the constant maintenance problems. So, I continue to rent, which I think is a better value overall for now. In the future, I’d like to own my own home. So when that happens my investment strategy would have to be adjusted accordingly.

Also missing, a side business. Medium provided a nice little side income for 2024, but not enough to make a big difference. I’m looking to get into YouTube in the new year, but that may take awhile to become monetized. I have considered buying businesses and such. It would have to be the right deal and the right situation. I’m not going to plunk down money into something just because it’s trendy or seems like a “sure thing.” There is no such thing as a sure thing in business.

Really, at the end of the day, I’m a writer. A “content creator,” to use that hated phrase that’s in vogue. I think I’d rather just focus on that gift. I’m only happy when I’m writing and creating something to entertain or inform people. I’ll look for ways to expand, improve, and monetize my writing skills.

Hopefully, this new investing strategy will help alleviate my mind. Looking back, I’ve spent way too much time thinking and worrying about money, while neglecting other areas of my life. Money is great and all, but it cannot give you a fulfilled life, necessarily. I love being in the game, don’t get me wrong. The process of making money is fun and fulfilling. But after awhile, it just becomes video game points.

Have a happy New Year. 🙂

Watch Out Your Bank Doesn’t Screw You “Accidentally”

On December 20, 2024December 20, 2024 By Dean BrooksLeave a comment

’Cause mine just did.

If you ask me, the entire banking industry has still not recovered its reputation from the 2008 Wall Street crash.

You know, the crash that nearly brought the global economy to its knees. The crash they made that movie about where Margot Robbie explains mortgage backed securities in a bubble bath. The crash that saw millions laid off, small businesses destroyed, while the U.S. government rushed to save precious giant institutions that were “too big to fail.”

You know, that crash.

Has the banking industry EVER had a reputation that wasn’t ranked somewhere between a sewer rat and rattlesnake? That’s hard to say.

Anyway, a few months ago I wrote an article about how my stupid bank wants to charge me $15 to use my own money. Check it out here.

Basically, my bank changed their policy starting November of this year. In order to avoid a monthly service fee of $15, you must maintain a monthly average account balance of $5,000.

Prior to this policy change, it was pretty easy to avoid a monthly fee. As little as one monthly direct deposit of $200 or more was enough to prevent a tiny haircut worth a Lincoln and a Hamilton, plus a few other flexible options.

Obviously, the Federal Reserve has lowered rates recently, thus changing the financial landscape. Banks have to adapt to interest rate fluctuations, and many do by adjusting their rates. Fair enough. Business is business.

Anyway, after I received the email about the policy change, I made sure to move $5,000 into my checking account well before the deadline. The policy took effect November 1st. I moved my money over October 3rd. Plenty of time.

All’s good, says I, initiating the transfer with a few easy clicks. I was slightly annoyed by having to keep $5,000 in my checking, especially when it offers a slightly lower rate than my premium savings account (by about a percent or so). But whatever, first world problems and such, you know?

Then a week or so ago, right as my overseas vacation was winding down, I log onto my bank. And what do I find?

They’d charged me $15 anyway.

:::sad slide whistle:::

WTF? I carefully scrolled down the entire month. Had I accidentally dipped below the $5,000 average? Nope. Not one day did my account go below the big 5–0. In fact, my account fluctuated between $5K-$8K all month due to direct deposits, transfers, and such.

Of course, I immediately messaged customer servicce about this oversight. A task made impossible the first morning I tried due to their not being any “available agents.” My bank is one of the biggest brokerages in the world. They can’t afford an army of customer service warriors? Fine, whatever.

I tried later that night, and was finally able to get through. I expressed the problem. After some investigating, the agent came to the conclusion that yes, I had been accidentally charged.

But why, I ask? How did that happen? Is there another policy I’m unaware of that I transgressed? Did I miss something? What can I do to help ensure I don’t get charged again?

Their response? Absolutely no explanation. It was apparently a pure phenonomen that I was charged $15 erroneously. Like the Phoenix lights. Or the Bloop. Or the “Wow!” signal.

Hmmm, perhaps magic is real afterall. Perhaps an evil troll or gremlin snuck past my bank’s digital firewall and pilfered that $15 to buy magic beans to grow a beanstalk to the giant’s castle. It sure is a mystery.

However, the agent assured me that she “shared my frustration.” Well, thanks. I’m glad we’re all in this together. Just you, me, and a giant banking institution worth hundreds of billions. Yep, we’re arm in arm here, totally.

Long story short, my bank DID refund me the money. That fifteen dollars is now safely back in my hands, where it belongs.

Fifteen bucks is not a lot of money. In fact, I made almost as much as that in interest just in my checking account for November.

But that’s not the point. The point is to watch your bank carefully and anyone who manages or holds your money.

You know, not long ago Wells Fargo (aka Shithead, Inc.) got caught making fake accounts without customer approval, resulting in it having to pay $3 billion in damages. Almost every week I’m reading about some new scandal some bank somewhere committed.

Let’s not forget about FTX and Celsius. Let’s not forget about the millions of people who saw their savings wiped out after the 1929 stock market crash. Let’s not forget about the Cyprus banking crisis in 2012. On and on.

People, you have to watch these banks and other financial institutions like a hawk. You have to be ever vigilant. You can’t just trust them to do the right thing. They don’t know what the “right thing” is. They didn’t even know that they had taken my money without proper cause.

Think about that. Imagine if I stole $15 out of your wallet, and when you went to confront me my excuse was “I didn’t know I took it.” And then when you went to the cops to report me the cops do nothing. That’s basically the arrangement we have with these enormous banks. We trust them to guard our money. But they’re really just looking out for themselves.

Be careful with your money. Watch your bank. Especially nowadays. Things may be “okay” for now economically. But that can change in a hurry. Times can become tough. And when times get tough, institutions can be become dangerous, wreckless, and even more dishonest than usual.

You Don’t Really Want To Retire

On December 18, 2024 By Dean BrooksLeave a comment

You just hate working 9–5 for some dipshit.

One of my biggest pet peeves in life is misrepresentation. It pisses me off. Considering I’m on the internet 24/7 like everyone else (gotta check X, bro, or I’ll die), that of course means I’m pissed off all the time.

I’m not alone. I had a pastor years ago back when I went to church regularly who would rage against scam charity drives that offer a “free product WITH a donation.” Oh God did that burn him bad. “It’s not free if you have to make a donation!” He went off more on that than he ever did the gays, backsliding, or any End Times rapture stuff.

(I went to a lot of Southern Baptist hellfire and damnation churches growing up; no, I’ll never recover my lost sanity.)

But I did happen to agree with him. About the misrepresenting charity drives. Not much of anything else.

I see it all the time in these “retire early” YouTube niches. Gurus all over the place claim to be retired, or encourage you to retire as soon as possible.

“You’re wasting you life, bro. Retire now, bro, and live with me in (fill in the blank shitty tropical developing country) right now, bro.”

And I don’t totally disagree with them. If you can feasibly and legitimately “retire” that early and everything checks out, then by all means. However, these gurus aren’t telling you the whole truth. A lot of them aren’t really retired. They’re just working online now.

NEWS FLASH: You’re not really retired if you’re still needing to make $3,000 a month from YouTube yammering about “retiring early.”

Retirement is such a misused, misrepresented word these days. It’s been bastardized. Often its spoken by cavalier glib hype masters trying to gain clicks. I just wrote an article about people shilling LEAPS to make $10,000 a month so they can “retire” early. News flash again. You’re not retired if you’re having to carefully trade the markets and you’re constantly putting your networth at stake under precarious market fluctutations. You’re a trader. You’re not kicking back on a beach relaxing. Having to watch the market everyday is frankly the opposite of relaxation for me.

People these days take these gurus to mean ACTUAL retirement, as in they don’t work at all anymore. But in actuality, retirement means something else in the online FIRE (financial independence retire early) dude bro finance space. It really means starting a business online, or starting a YouTube channel, “content creation” (hate that phrase) or doing some other ecommerce deal or whatever to make location-independent income, so that you can (hopefully permanently) leave the “9–5 grind.”

It’s not really retirement in the true sense of the word. It’s becoming an entrepreneur in the digital economy. A business owner, to make it simple. Or an investor/trader. It’s taking on a whole lot of other duties and knowledge and workload to make an income. It’s sticking your face on Tiktok or YouTube or Instagram or whatever all the time to sell either clicks or a product. But psychologically, it still kind of fools people into thinking it’s actual “retirement.”

It’s not. It’s “worktirement,” to coin an awkward term. Well, no. It’s really still just work.

Nobody really wants to “retire.” They don’t want to sit on the freeway everyday in bumper to bumper traffic just to go to an office where some MBA douche with a comb over tells them their budget report is two minutes late and how they need to be more mindful of the company timeline.

It’s really corporate wage slavery people hate and want to escape from. This is why these gurus get so popular. And more power to them, don’t get me wrong. I don’t mind people encouraging other people to free themselves from jobs or careers they hate. I just wish they would be more honest about it and represent the situation of their “retirement” better. Otherwise it sells people on a false dream. Not everyone will be able to or want to just quit a job and then mug for YouTube to make a living. YouTube might take years to work out. Or it doesn’t at all. YouTube is great. But it’s not the life for everyone.

What does retirement really mean anyway? Basically, just not working. It doesn’t have to imply that you’re financially independent enough to not need an income from anywhere else. You could be dead ass broke and just sit around not working. You could be worth a billion dollars and still grind every day.

Nobody wants to otally not work period unless they are exceptionally lazy sacks of shit with zero ambition and few functioning brain cells. They just want their lives back and the freedom to do what they want.

To paraphrase my pastor from decades past: “It’s not retirement if you still have to earn a living to keep from ending up on the street!”

Can You Really Retire Early By Making $10,000 Per Month With LEAPS? It’s Not That Simple

On December 7, 2024 By Dean BrooksLeave a comment

It’s happening again.

You know you’re at frothy market highs when you start seeing videos about totally can’t fail easy shortcuts to early retirement by (fill in the blank with whatever financial trading scheme you want).

We saw this with crypto back in 2021. I remember arguing with a guy on X (then Twitter) who was out there telling people to retire early by staking their money on high interest earning liquidity pools. I got into another Twitter fight with some fresh MBA grad finance bro who was out there recommending random dividend shit stocks that were paying out 10%+ to his followers.

“Bro, you don’t understand. Every five grand you put in equals $500 a year for life. For life, bro!”

Mind you, I wasn’t being nasty or anything. I was simply asking what happens if stocks go down or those liquidity pools dry up? I was asking standard good faith due diligence type questions. But like the guy who pointed out that maybe the Titanic needed more life boats, I was ignored and ridiculed.

Then the Federal Reserve hiked interest rates and stocks fell into an 18 month bear market. Crypto plummeted back to Death Valley. Mysteriously, I didn’t see too many finance bros on Twitter soon after. Same with crypto bros.

But now markets are back at all time highs. The Fed just cut rates by half a point. Stocks are roaring. Bitcoin is back, baby! It’s all good. “Biggest bull market ever, yo!”

Which of course means gurus and finance experts and self-appointed wealth wizards are out there peddling their know-how for clicks.

The latest big idea I’ve seen involves buying LEAPS and then selling calls against those leaps.

What the hell am I talking about, you might be wondering? What’s a LEAP?

LEAPS

LEAPS are an option on a stock. It stands for Long-Term Anticipation Equity Securities — LEAPS. LEAPS are at least one year out from expiration, and sometimes they can go out as long as three years. An option, as you may know, is the right but not the obligation, to buy a stock within a certain time period. If I buy one option on Apple with a strike price of $200 that expires in one year, that means I have a year to exercise my right to buy 100 shares of that stock at $200. Option contracts are worth 100 shares each.

The appeal of options is they give you the ability to potentially control 100 shares without having to actually buy the 100 shares. The downside is that option contracts expire and they are more volatile than stocks.

Option contracts are also way cheaper than buying the shares. A $200 call option on Apple for December 19th 2025 as of this writing costs about $5,300 while 100 shares of Apple would cost roughly $23,000. If Apple goes up to $250 this time next year, the value of the option you hold on those shares would also go up. Let’s say our $200 option we paid $5,300 for becomes worth $7,000. That would mean you’ve made a profit of $1,700. That’s nearly a 25% return in one year. Had you bought 100 shares at $233 instead, you’d have also made $1,700, but you would have risked about $23,000 to do so. You would have also only made about a 7% return. You can see how options can give you enormous leverage on a stock.

The Strategy

However, there is a way to maximize your returns on that LEAP call. You could also sell calls against the stock. The key here is you want to sell calls that are high above the stock price (“out of the money”) and therefore unlikely to be exercised by the buyers.

And you want to sell calls with close expiration dates. Say, a week, or a month out. Right now, a November 1st, 2024 (one week from this writing) $240 call on Apple is going for about $200. Hypothetically, if you were to sell a $200 call like that every week, you could potentially make $10,400 a year. That’s with only one LEAP option that cost you a mere $5,300.

Now, imagine if you could buy 20 LEAPS. That would mean you could sell 20 calls against them, and make $208,000 a year, or over $17,000 a month. That’s a nice income stream. On top of that, you’ll also make $34,000 if Apple goes up to $250 and your LEAPS become worth $7,000 as mentioned earlier. That’s a grand total of $242,000 of profit in one year.

Sounds too good to be true? Well, that’s because it is, duh. What you see above is where the gurus all stop talking. They don’t mention the possibility that your calls might get assigned, forcing you to liquidate your LEAPS holdings.

They also don’t mention what happens if stocks slide into a bear market, which is the biggest threat. Even a strong bull market will see big dips and corrections. But what happens during a prolonged downturn, like what we saw in 2022 through late 2023? Or what happened after the Dot Com meltdown? Or after the 2008 financial crash? It took stocks years to get back to all time highs again after 2000. It took about five years for stocks to return to highs after 2008.

You can see the problem here if you have a bunch of financial assets that EXPIRE in a relatively short amount of time. Even if you have a three year LEAP option, it might take that long before stocks get back to even. Meaning you would likely lose your investment. Option values go down way harder than stocks during pullbacks.

Yes, you could buy put options to hedge your positions. But those may only limit your downside risk. You can still lose money. Lots of money.

I’m not saying this LEAPS strategy doesn’t work or can’t work. I’ve bought LEAPS myself and profited. I’ve also sold coverered calls and put options. I’m just saying that you need to get a fuller picture of what you’re getting into. You need to understand the substantial RISK you are taking on by doing this. Using a small part of your portfolio to trade might be okay depending on your networth and risk tolerance. This strategy could potentially offer some relativey steady returns if done prudently.

But is this LEAPS stategy something you could actually RETIRE on? I certainly wouldn’t bank my retirement on this. It would only “work” assuming you have significant assets to fall back on should the market crap out for 18 months. Thinking you’re going to make $10,000 or whatever a month every month no problem is foolish.

I really get tired of these so-called experts out there chasing clicks and ad revenue by misrepresenting trading strategies or whatever other financial schemes are in vogue. Actually, no. It pisses me off. Because the fact is trading is high risk and few people make regular money from it. At worst they offer half-baked schemes that only work in optimal markets. At best they’re not giving you all the facts.

Be on the lookout for these gurus and bull market snake oil salesmen. Do your own thorough research. Do not get sucked in by the hype. Do not just blindly follow some strategy because you think it’ll give you easy returns. Be careful out there.

How Not To F*ck Up Your Chance At Becoming Financially Secure

On November 7, 2024November 7, 2024 By Dean BrooksLeave a comment

A few common sense tips to avoid some common pitfalls.

I’m constantly seeing all kinds of articles about side hustles and other ways to make money and become wealthy.

While these are helpful, I’ve found that building your net worth is less about what you do and more about what you don’t do. Unfortunately, nobody hands you a guide called “How Not To Fuck Up” when you turn 18, that shows you the many spring-loaded bear traps laying about out there. In fact, it seems people are more apt to let you walk right into one and snap your leg off.

Nobody was there to tell me anything. So some of these pitfalls are ones I learned myself, the hard way. Others I was fortunate to avoid on my own.

Finish High School And Keep Your Fucking Legs Closed (meaning don’t have kids) Until You’re Married.

I combined these two tips because they are common refrains from Dave Ramsey. It really is that simple. If you do these two things, you are virtually guaranteed NOT to end up in poverty. Do one of them, and your chances of one day becoming financially successful are very low. Do both and it’s almost impossible. The welfare register, the ghettos, and the trailer parks are filled with people who did both or either. I’ve met many single moms in my life who were not married before having a kid, and virtually all of them were in the poorhouse and on government assistance. I’ve met guys who had kids when they were super young, and nearly all of them were broke.

Guys are less threatened by this pitfall because young children are not physically dependent on us to live, obviously. We’re also expected to work regardless of our ejaculative accomplishments, too. But for women, this is a crucial, even life critical step. Having a baby with some lowlife dickbag loser who runs off, then not having the legal and financial support that a committed marriage provides, can seriously fuck you and the kid up for life.

Even in a good marriage having kids is tough. And yes, people divorce and go through hell. But trying to raise a kid while dealing with baby daddy or baby momma drama is a complete fucking nightmare and almost impossible to work through. Yet millions stumble into this pitfall every year. It may be funny to watch child support fights or paternity drama on Judge Judy or Maury Povich, but in real life this shit is tragic and often forms the basis for why our society is so fucked up. So, to be clear:

Keep it in you pants if you want to keep money in your wallet!

Don’t Take Out Student Loans For Stupid Bullshit Degrees. Let Me Repeat That. Don’t Take Out Student Loans For Stupid Bullshit Degrees.

This is a BIG one. And it hits home because I fell into this pitfall myself, and it seriously screwed me up for years. I mean, I would be a completely different person today had I not borrowed money for college. I would not be living where I am. I would not have gone through hell as a result. I might even be in a better place. While I’ve since cleaned up the disaster I made for myself and am doing quite well now, I lost YEARS and therefore OPPORTUNITIES because I needlessly saddled myself with student loan debt.

Here’s the deal. For years, only the wealthy earned liberal arts college degrees for a “well-rounded education.” Then the banks, working with the government, came along and convinced everyone else they could and should too, even if that meant taking out vast sums of money. Now you have millions of college graduates stuck with trillions in student loan debts they can’t discharge through bankruptcy, while having no real employment prospects, and therefore no income. You have young people graduating with $100k+ in debt for fucking useless art degrees.

There’s a reason only the wealthy used to do this. Because they knew they had a job at daddy’s company when they graduated. They knew they’d end up on their feet. As harsh as this is to say, if you’re middle-class or lower, you’re almost certainly wasting your time and money by doing the same thing as the rich. Sorry, no, you don’t need a “well-rounded education.” You’ve been duped by banks and the government. What you need is fucking money. You’re not sophisticated and elite because you learned about the French Revolution and fill-in-the-blank-philosopher’s-name, you’re poor and broke. Unless your degree leads to a real career with real prospects and real money, do not waste one goddamn second on it.

I look back at my stupid idiot self. I took out over $25,000 in loans for a degree in political science from a private college that I had absolutely no business attending. I hated it there, too. Most of the students were, unsurprisingly, trust fund kids, or at least had big help from mommy and daddy toward paying tuition. I did not fit into the scene whatsoever being a broke mixed-race kid from the other side of the tracks. I left after one year without a degree. Obviously, I had no help myself other than what I could scrounge up through financial aid. I’m not even proud of the fact that I qualified to get in to this school. I’m ashamed, because going there left me in debt with no way to repay. I wound up working in a fucking department store afterward before getting back into the printing trade.

To say that student loan debt ruined my life would be an understatement. Robbing a bank would have fucked me up less. At least then I’d have a cool story and some prison tats.

Look, I get it. The allure of an “elite” institution is hard to overcome. Everyone wants the prestige of a four-year degree from a “top” college or university. But the reality is, especially in this day and age, it’s not necessary. And if you’re poor, it might even be financial suicide. If you want a “well-rounded education,” go to the library or watch YouTube. They’re both free.

The delusion over degrees is un-freaking-real. I could go on for hours. One time I met an obese broke single woman in her mid-20s who was a few months pregnant. She was convinced she was still going to get into a prestigious law school in New York City and become a lawyer and fight for “women’s rights” or some bullshit. I asked how she planned to do this with an infant, no money, while living in one of the most expensive places in the world, all to chase a profession in what was certainly low-paying non-profit work, to which I received only a derisive snort and nostril flaring in response. As though I were a complete idiot for even asking. I never saw this lady again, but I’d be willing to bet she ain’t hobnobbing with high-powered feminist do-gooders in Manhattan.

Drive A Shit Box You Paid In Cash For Because You Don’t Need A Luxury Vehicle To Pick Up Hungry Man Microwave Dinners At The Grocery Story.

I’ve written previously about my “senior vehicle” and how it only costs me $64 a month to drive.

I drive a 2006 Saturn Ion with over 180,000 miles despite having an above average networth for my age, and more than enough to pay for a premium new car in cash. I fucking love my “shit box.” At this point, I’m planning on keeping it and driving it for as long as possible, and giving it a Viking funeral for whenever that time comes. It’s a “grocery getter” at this point. It used to drive me back and forth between Philadelphia and New Jersey. Nowadays I don’t drive it more than 120 miles at a time. If I need to go on a road trip I rent a car or fly. If my life situation were to change and require me to upgrade vehicles, I’d still get something cheap and used and do the same damn thing that I’ve done with this car.

My “senior vehicle” only costs me $25 a month to insure, and very little to maintain. Because of the substantial savings I’ve made over the years, I’ve been able to put way more into my investment accounts. If I were instead one of those clowns who feels the need for a new shiny set of wheels just to drive to my crappy cubicle job, I’d not have been able to max out my 401k, my IRA, and build up a solid net worth that has put me on the path to financial independence and early retirement. The average car payment nowadays is around $700 a month, which means many people pay WAY more than that. That’s just the financing payments. There’s insurance and maintenance on top of that. You have people literally pissing away millions in potential compound gains because they need to sit in a metal box with a name brand logo on it. Absolutely ridiculous.

Once again, for many years, only the wealthy bought premium vehicles because only they could afford them. Then along came “easy” financing schemes and loose lending standards by the banks. Now everyone can “afford” to buy BMWs and Mercedes and SUVs that cost a gold brick to fill up at the gas station. This is why you see hot rods parked in the ghetto, and those giant monster “America-fuck-yeah!” trucks parked in the sticks. Isn’t “equality” great? Well, it’s not really equality, because those people still can’t afford those vehicles. They can only (barely) afford the $1000 monthly payments. At least until they lose their job. Then it’s the repo man laughing all the way to the bank. And the dealership, too, which just turns around and sells the car to another sucker who needs to compensate for his inadequacies by overpaying for a pile of plastic and sheet metal that can move 70 M.P.H.

All these tips basically boil down to “Don’t buy shit you can’t afford.” Which seems easy. But so much of money management has nothing to do with math, but emotion. People attach emotional value to things like college degrees or vehicles that they really don’t need, that they don’t realize will screw them for years to come. People get irresponsibly caught up in the passions of a relationship and wind up trapped with offspring they are not prepared for or capable of properly taking care of.

People have gross misunderstandings when it comes to money. Many think making big money is all about some big score or windfall. Winning the lottery. Making out on some stock or cryptocurrency. While a lucky few will hit those jackpots, for the most part, building wealth is a largely a “brick by brick” deal. It’s a stifling boring process, actually. People overcomplicate it. But it’s less about doing a bunch of things right, and more about simply not colossally fucking up with a few wrong decisions that are actually quite easy to control.

A Few Easy Ways I Automatically Make Extra Money Every Month

On October 31, 2024 By Dean BrooksLeave a comment

Who says side income has to be hard work?

Everyone needs side income these days. Thanks to inflation and the rapidly rising cost of living, one income is too close to having none. Many people work two or even three part-time jobs if they don’t have a solid main source of income. Wealth “gurus” will sell you all sorts of complicated programs guaranteed to make you rich.

The effect of all this is PRESSURE. Pressure to make more. It can all seem complicated, difficult, and time-consuming. Luckily, there are some very simple, stupidly easy (and lazy) ways to supplement your income. Every little bit helps, even if it’s just a few dollars. Here some methods I use.

1. High Interest Savings Accounts

This one may seem obvious, but you’d be really surprised how few people take advantage of this. Even though the Federal Reserve just recently lowered rates by half a point, there are still opportunities to earn decent yields. Just go to an aggregate site like Bankrate and look under their high yield savings account section. As of now, October 2024, you can still find savings accounts with reputable FDIC-insured banks offering 4.00% to as high as 5.30% APY. Some banks even offer decent savings rates in their checking accounts, though this is not often.

Another key to taking advantage of this is to have multiple savings accounts. I do this with bank accounts in the interests of safety and diversification, should one of my accounts become compromised or I lose a debit card. But it’s also good to have at least one seperate account that you can transfer money to. This can even motivate you to save money, because you wont see it everyday in your regular bank. “Out of sight, out of mind,” as they say.

Right now, between all my accounts, I earn over $50 a month from interest. I expect to make at least $600 this year.

2. Credit Card Reward Points

This will bother the Dave Ramsey fanatics, I know. The money management radio host is famous for his devout stance against credit cards no matter what. I used to think the same way. But if you’re disciplined, and you use them for things you would be spending money on anyway, then there’s no reason not to take advantage of their cash back rewards.

My one card pays 1.5% cash back. I have a number of bills that automatically deduct from that card every month, that add up to anywhere between $300-$500. This means at the end of the month I can apply $5–$8 to my bill. I always pay my bill in full. I’m a proud “deadbeat,” as the credit card companies refer to those who never maintain a revolving balance. Even though $8 may not seem like a lot, that’s basically a free $96 or more every year, that you can make without having to really think about it. Put another way, if you saw $96 lying on the sidewalk, would you not bend down to pick it up? Of course you would.

Cash back can also help when you have a big purchase. If you were to spend $1,000 on something like a new computer, that would translate to a $15 “discount” due to the cash back feature. Some credit cards even offer higher cash back rewards with certain companies.

Again, the key here is to buy things you would anyway. Don’t just buy something to “get a discount.” That’s what gets people in trouble, and why Dave Ramsey is mostly right about avoiding credit cards altogether. But if you’re savvy and disciplined enough, there’s no reason not to look for ways to save even just a few dollars.

3. Dividends On ETFs/Index Fund Stocks

This one requires some clarification. I don’t personally buy dividend stocks. I stick to low-cost ETFs that track the S&P and Nasdaq. Namely SPY and QQQ. This goes for both my retirement accounts and my personal brokerage account.

Many people will recommend this dividend stock or that, looking only at the yield. I don’t really care. Many dividend stocks tend to go down in value over time, essentially making any gains you make from the dividends a wash. For example, AT&T (T) offers a nice 5.15% dividend, or about $.27 a share, but its stock has declined by almost 50% over the last five years. If you had bought 100 shares in 2019, you’d have made around $550 in dividends so far. But your position overall in terms of the value of the stock would be down almost $740. Meaning you’ve lost about $200 on paper. AT&T has gone up this year, but it’s long-term trend is down. This is not the case with every dividend stock, of course. Some may actually be good deals, but they’re just not for me. Do your own research here.

My personal brokerage allows me to see an estimate of future earnings from my dividends. As of now, I earn about $100 a quarter from my SPY and QQQ holdings. SPY offers a “low” 1.21% yield, while QQQ only gives a “measly” 0.61%. But these ETFs track the market, including the largest and most successful companies. SPY has gone up over 50% over the last five years. QQQ has more than doubled in the same time span. You have to look at the overall value of the asset and the risk involved in holding it, not just its annual yield. A dividend stock may offer a decent yield one year, then cut it the next. But even if SPY and QQQ were to cut their dividends entirely, they would still track their indexes. Whereas a dividend stock’s price might drop big because a flood of investors exit over its diminished yield.

Adding up these three brain-dead easy ways to make extra money comes out to almost $1,000. Or about $83 a month. That’s like getting an annual “performance bonus” from a job. A thousand may not seem like much. But it’s enough to pay rent for a month. Or get a “free” computer every year.

The best part is I don’t have to do anything really to get this $1,000. I consisently save money. I use credit cards to conveniently centralize monthly payments. I invest into my personal brokerage regularly. An extra thousand bucks is just a nice incentive for doing things I’d be doing anyway.

I Sure Hope I Don’t Catch ‘Sudden Wealth Syndrome’

On October 28, 2024October 28, 2024 By Dean BrooksLeave a comment

You think being broke and destitute is bad? This is far worse.

Dollar sign lesions. One of the first symptoms of this horrible new disease. (Made with Midjourney)

Forget Covid. Forget Monkeypox. Don’t even think about H.I.V. or Ebola. There’s a new pandemic threatening to strike soon. It’s called ‘“Sudden Wealth Syndrome.” What’s that, you ask? A recent Yahoo Finance article explains:

Sudden wealth syndrome is a real challenge for people who suddenly get a lot of money. Children who inherit enormous sums or receive unexpected wealth may experience overwhelming anxiety and uncertainty about what to do with all of their newfound income.

I don’t know about you, but that sounds downright terrifying. I once found $200 on the ground as a kid and I had to be hospitalized for six weeks due to acute shock. I couldn’t even imagine the impact of a million dollar windfall on my fragile psyche. Surely, that would kill me. I’m no longer worried about bleeding blood from my eyes, losing my immune system, or being covered in puss-filled lesions, I’m worried about waking up every morning with eight figures in my bank account.

So, what’s driving this new epidemic? Is there anyway to avoid this scourge? Or are we all doomed?

Well, as it turns out, Sudden Wealth Syndrome, will likely only effect the super wealthy. More specifically, their kids. There’s a generous tax incentive for inheritance that’s set to expire at the end of 2025. Right now, individual parents can transfer up to $13.61 million tax-free to their children, while couples can transfer up to $27.22 million.

But that tax incentive is scheduled to end in a little over a year. Many wealthy people are worried that if Democrats retain control over the White House, they won’t renew the benefit, and may even increase taxes. This has prompted a stampede as parents try to hand down their wealth before the window of opportunity closes. If that happens, the amount that can be transferred down tax-free may drop by a whopping half.

The article goes on to state that over the next decade, 1.2 million people worth $5 million or more will pass down over $31 trillion. The vast majority will come from those worth more than $30 million.

My heart goes out to those poor people who will soon be suffering from this ravaging new disease. I’ve had the good fortune of associating with a few trust fund kids in my life, and let me tell you, it’s not their fault that they’re often entitled, condescending, lazy assholes who think the world revolves around them. Those traits are just symptoms of Sudden Wealth Syndrome. They’re helpless victims in all this, and this new scourge threatens to only make things worse.

Is there nothing that can be done for these poor souls? I sure hope the CDC is cooking up a vaccine or some kind of cure for them. Should we hold a telethon and ask for donations? Maybe not. More money would just make things worse.

Luckily for the super wealthy, I’m here to help. I’m starting a professional counseling service. For the low rate of $700 an hour (plus travel and lodging expenses), I’ll happily lend guidance and emotional support during this troubling time. Note: my services are only available to heiresses aged 18–25 with modeling contracts, and my counseling involves sensual massages and seductive pillow talk.

Going Back To College In Your 30’s: Is It Worth The Trouble?

On October 27, 2024October 28, 2024 By Dean BrooksLeave a comment

Is college worth it at all? Examining the time and opportunity cost vs. benefits of a diploma.

Photo by Stanley Morales from Pexels: https://www.pexels.com/photo/people-wearing-backpacks-1454360/

Nowadays, college is under fire. Enrollment overall is down. Fewer men are signing up, and instead choosing the trade route or just going to work. The value of a 4-year-degree is being challenged. The “uselessness” of liberal arts degrees (i.e. Himalayan Basket Weaving or Gender Studies) has become a meme.

But it doesn’t end there. Even business degrees, MBAs and Master’s degrees are getting excoriated anymore. We’ve reached our quota for finance bros.

You’ve got the extreme left wing culture that has permeated the college campus scene. 1960s UC Berkley looks like a GOP convention compared to today. Combined with the uber-feminized atmosphere, college is a weird place anymore. Many will charge that it’s no longer a place of free thought or learning, but an indoctrination camp. Yes, there is a strange preoccupation college has with turning students into activists. But to be fair, I think some of the right wing hysterics are overblown.

Above all, college is ridiculously costly anymore, and often it ends up just leaving graduates in serious debt with minimal employment prospects. Many end up working in jobs that have nothing to do with whatever degree they earned, if they find jobs at all.

College has become tainted by the S-word — SCAM. It’s grossly inefficient, too. Four years is a LONG time to invest into something, only to get little or nothing out of it. Apple went from its founding to IPO in four years. A presidential term is four years. Colleges takes as long all while making you learn a bunch of stuff you end up not needing in the “real world.” This is especially glacial in today’s fast-paced digital world where apps like TikTok have built up tens of millions of users in as little as a few months.

The college system seems antiquated today. Almost purposefully faulty. A lot of the reputational attacks against it are justified. But it helps to think of college not as an educational system, but just as big business. Everything makes sense when you understand that people are getting rich off a bad system. Billions are made from student loans and sports programs. School administration has swelled, giving an elite few cushy jobs and incomes protected from economic fluctuations through tenure and grants. All while parents and the culture at large reinforce the NEED to go to college.

Every year millions of psyopped young people zombie walk their way into freshman year, happily shackling themselves with undischargable student loan debt, while getting little in return, and giving four of their prime years they can never get back. College is like the modern day equivalent of selling indulgences, like the Catholic Church did centuries ago.

It’s not even a great place to meet anyone for a long term relationship anymore. Fewer students graduate with a partner, instead choosing to venture into the world single.

What about medical school, engineering, and STEM degrees? Those are surely valuable and necessary. No one’s arguing with them. But the modern college system would collapse if it were stripped down to just those essential components.

All that said, is it worth going to college at all, especially for a worthless degree? I think it depends on your goals and what you’re getting out of it. And how you’re paying for it and what it costs. Due to lack of money, but mostly a lack of drive and focus, I failed to finish college in my early 20s. I attended two community colleges to complete my general credits, working full-time and doing classes piecemeal as best I could. I was accepted into a decent private school I really had no business attending, but only managed to pay for one full year. I dropped out with around 72 credits, right in the no-man’s land before the required minimum of 120 to graduate.

After dropping out, I was forced to go back to work. This was tough and demoralizing. I took it as a real personal failure and it bothered me intensely for years. It wreaked havoc on my psyche and my sense of self-worth. You see, I had been one of the “smart kids” growing up. I was in all the advanced placement classes and so forth. I‘d graduated from one of the best high schools in the country. There were BMWs parked in the student parking lot, though I drove a troubled 1982 Buick Skylark at the time. Many of my peers went on to the Ivy Leagues. I simply had to keep up with them, even if I was from the lower middle class. I had fully bought into the cultural psyop that a college dgree was crucial to SUCCESS. Making matters worse, I saddled myself with over $20,000 of student loan debt for a degree I never finished.

For the longest time, I gave up on my dream of completing college. Trapped by debt and terrible job prospects, I consigned myself to failure. But eventually, I found my way to the North Dakota oilfield in 2012, determined to fix my financial problems and set things right. In a few years, I had paid down almost $35,000 in debt, all while living in a basement with five other guys. There was a severe housing shortage in the town I lived in during the mid-teens oil boom. I didn’t find an apartment until two years after I moved to ND. It was tough living, to say nothing of the harsh weather and isolative nature of the region.

The effort took a toll on my mental health, too. After almost four years I’d had enough of the oilfield and decided to finally go back and finish my college degree. I enrolled in the state school at age 35, choosing to attend most of my classes in-person. Even though I could have finished my degree through any number of online methods, I wanted to go back and “do it right.” Even if that meant giving up working in a lucrative industry and moving across the state.

I decided on English as my degree. Not because it offered any real economic utility, but because I liked writing, and it gave me the shortest route to finishing as quickly as possible. I was passionate about completing what I’d started, but I wasn’t about to invest anymore time than neccessary. I had built up some decent savings, and was largely able to pay the tuition out of pocket.

Is it awkward going to college in your mid-30s? Initially, it was. A lot people tell me I look younger than I am, which might have helped. But it is slightly uncomfortable sitting in classes with people who are 15 years younger than you. I largely kept to myself, though. For me, the biggest struggle was overcoming my own psychological limitations. I had tried several times before to restart my college degree, only to give up. Could I finally break through the invisible barrier? As it turns out, this was largely part of my rationale for returning. I needed to prove that I could do it. My failure to finish almost a decade and a half earlier had left me crippled with self-doubt, depression, and if I’m being honest, self-loathing. If I couldn’t even finish a “worthless” liberal arts degree, what good was I? I know that sounds harsh, but this is part of the pressure that is put on “smart” kids living in a culture where college attendance is akin to worship of the Almighty or else your soul is eternally condemned to hell.

For me, college was not really a practical “necessity.” It was more like therapy. It was a way to heal my damaged psyche and get the monkey off my back. After two years, I graduated with my degree with well over the 120 credits I needed. I had finally done it. Fifteen years later than I had planned. But it was done.

The experience reignited my love of writing and illuminated my outlook on life. It definitely changed me for the better. I’d spent my twenties and early 30s largely pessimistic and depressed. But after paying off my debt and finishing my degree — two things I’d once thought impossible — suddenly anything seemed possible. I felt like Neo finally breaking out of the Matrix at the end of the movie, as corny as that may sound. I saw life not as just a string of unstoppable misfortunes, or as something that was merely happening to me, but as something I could take ownership of. “No fate but what we make for ourselves,” as John Connor puts it in Terminator 2: Judgment Day.

After graduating in 2018, propelled by twin successes, I attempted completing a novel again. Something I had tried and failed at eleven years prior. I not only finished it, but went on to write another and another. I just completed my 11th.

Still, there was a severe time and opportunity cost to finishing my degree. Looking back, there were certainly ways of doing it that were more efficient and less costly. It did not cost me just the tution, but the income I would have made had I stayed working in the oilfield. At the time, I was making almost $90,000 a year. So, the decision to go back to school in-person, as opposed to online, really cost over $200,000 in income over the two years. That’s more than the cost of going to Harvard, for God’s sake. I could have bought a house for that instead of just a piece of paper with my name written in fancy font.

By every practical measure, returning to college like I did was not worth the cost. But you really can’t put a price on mental health and personal development. Finishing school helped transform my mindset. It helped me break a decade-plus-long negative feedback loop. Nothing succeeds like success. Paying off my debts kickstarted my “rebirth.” But finishing my degree permanently put me onto a better path. Even if my English degree has no real economic value, it means a lot to me.

After college, I returned to work in the oilfield. Using my reinvigorated mindset, I studied investing and personal finance. I’ve remained debt-free, and built up a solid net worth. Enough to know that in a few short years I’ll achieve another dream I never thought possible — becoming a self-made millionaire. And long before the statistical average for my age group. I’ll likely be able to retire before I’m 50.

College is not for everyone. College degrees, especially liberal arts ones, are overinflated in value and largely unneccessary. For most of history, the only people who went to college for liberal arts were rich kids whose parents could easily pay it. It’s only been relatively recent that anyone could “afford” to go via student loans. I don’t know that that’s a positive development. I think young people today are better served by staying out of debt, unless they are pursuing a degree with real economic value. You can learn most of what you need off YouTube and online for free. The future of education is not the grossly inefficient and costly system we have now, especially with the emergence of AI. It’s in learning specific, concrete skills with real utility. A monthly subscription to an online learning portal like Udemy is probably a better option than a four-year commitment. Way cheaper, too.

College is obsolete in many ways now unless you’re going for a high-value degree. It’s a dinosaur. It’s unnecessary for many. But so is climbing a mountain or putting a 1000 piece puzzle together. For me, going back in my mid-30s was expensive therapy, and a way to get back on the horse. Sometimes proving to yourself that you can do something hard can help motivate you to achieve other things as well. If college can help put you on a better path, then I say it’s ultimately worth it no matter how “worthless” the degree is that you’re obtaining. Not every decision will balance perfectly in an accountant’s ledger. Like with anything else in life, if it means something to you, then it matters.

Minimalizing Your Way to Wealth: Can It Work?

On October 15, 2024October 15, 2024 By Dean BrooksLeave a comment

It’s possible, but requires discipline and commitment.

Striving for a high income vs. cutting your spending and investing the maximum possible. Which strategy comes out on top?

It’s not easy to withold buying stuff. Especially when anything you could ever want is just a click or finger tap away. Dave Ramsey is known for making the point that credit cards help numb the “pain” of spending, making it feel like it’s not real money. Until the bill comes due.

Combined with the ease of e-commerce, credit cards make for a potent combination that can lead to fiscal disaster. Making matters worse is the current subscription trend. Not just streaming companies like Netflix, either. Even razor blade companies want you to subscribe for a monthly fee. Wal-Mart just tried to get me to start a toothpaste subscription. It’s getting out of hand.

Diligently investing a part of every paycheck into retirement accounts and personal investments, particularly into S&P 500 index funds/ETFs is probably the best and most assured path to wealth for the average person. The problem is most people in the United States don’t make a high income. The median individual income is only $37,000, while the national average wage index is only around $64,000.

If you live in a major city or have a family, those incomes hardly go far. This is why side hustle culture has become so necessary and so big today. Everyone has some kind of side gig or second or even third job. Because without one, it’s almost impossible to get ahead.

It’s easy to blame things like out of control cost of living expenses, greedy companies, competition, industry fluctuations, economic crises, and inflation. Those things are at fault in many cases. But very often people set themselves up to fail.

It’s not an income problem, it’s a spending problem.

Years ago I worked for a market research company. When our director got promoted to the Vice President level overseeing our facility, she immediately went out and financed a downtown condo and a new Cadillac Escalade. All while declaring openly she had “no idea” how she was going to pay for any of it. Her new “big” salary was all of in the $70,000 area.

Another guy I knew at another place did something similar. When he got a promotion he ran out and financed a new Ford SUV, justifying it as a “need” because he went on camping trips a lot and needed something to pull his camper. Oh, and he also bought a high-end camper, too. Something he was somehow convinced would actually save him money in the long run on lodging costs for his family. All on a salary of around $100,000.

I worked with one lady who was studying for a Masters in Psychology so she could get higher pay in the mental health field. She was already $40k in the hole in student loans, with more to come. When I asked her how much she stood to gain once she had this prestigious degree, she just smiled and shrugged her shoulders.

I’ve screwed myself, too. Twelve years ago I was drowning in debt. I had about $20,000 in student loan debt, $6,500 in an auto loan, and two credit cards maxed out. What was really sinking me was the student loan, as my payments were being garnished out of my paycheck. Garnishment is not a fancy side dish, by the way. It’s a horrible thing that allows your employer to extract money from your paycheck for repayment to the government. It sucks. Before my wages became garnished, I was actually doing okay, even though I was only making about $35,000 a year. I had extra money every month. I was contributing what I could to my retirement accounts. But that garnishment took the maximum allowable of 15% out of my income. A huge chunk.

On top of that, I had constant car troubles. Eventually, I was forced to finance a newer car since my beaters kept breaking down. That left me with a monthly auto payment and a much higher insurance rate. Between those and gas and tolls I was paying almost $750 a month just to drive a car back and forth to work. Mere existence became a living nightmare.

Looking back, my wounds were largely self-inflicted. I made the wreckless decision to take out student loans for a private college that was way out of my economic station. For a worthless liberal arts degree, too. I chose to keep working in a bad industry (printing) that was undergoing consolidation, that offered little real prospects for growth and promotion. Basically, I wandered onto a minefield and eventually got blown up.

Had I not hamstrug myself, even with my low income, I still would have been able to squeak out a win. I was investing something like 15% of my money until the garnishment hit. That was about $5,000 a year into my retirement accounts, including the company match. A mere $5,000 a year over 30 years earning an annual 10% comes out to almost $900,000. Not bad for a low salary.

As you can see, becoming wealthy is not all about just having a high income. You can make good money and cripple yourself with debt and high ticket purchases that lose value. You can also make a low income and still become a millionaire.

Nowadays, I invest close to 60% of my income. I live pretty simply. I still drive a beater car. I have zero revolving debt. Most importantly, I weigh spending options much more carefully. Generally, it’s not so much a lack of income that will get you. It’s making a few big mistakes that can set you up badly for years to come. Student loan debt. Car debt. Or something catastrophic like a nasty divorce or relationship issues.

As I’ve learned over the years, financial succes or failure very often comes down to making good or bad personal choices. Especially when you’re young. It doesn’t mean it’s all on you. Medical problems or family issues can make things very hard, and those struggles are not always anyone’s fault. But you should try to control what you can.