Are You Managing Your Money?

I actually got out of all my debt with the exception of public student loans-- and I probably would've done that too if it hadn't been for the interest rate and payment moratorium.

When I mentioned about "luck" coming around for simply having your finances adjusted, I'll tell you a little bit of my story. I started out worse than broke because I paid my way through college, so I had private student loans, public student loans, medical and credit card debt. I just found it impossible to live below my means-- truly impossible; I am not materialistic to begin with, but this debt was from eating fast food and living in an almost condemned building. But once I got out of school I swore I'd never be in that position again, so I read that book and some Dave Ramsey, along with some investment strategy books.

First, I paid off all my outstanding debts except the student loans, but at the exact same time I put away the 10% as Clason said and I still, to this day, haven't spent it. Any gift, any "boon," any money from a guy asking me to do a gig for him went into a separate savings account; I extracted my 10% and put any extra money not from my primary income in a second savings account that went towards debt. I kept building up until I was about 6 months safe from any kind of bad and unexpected financial situation, and (sort of) debt free. In other words, only 90% my primary income is what I adjust my standard of living to. 10% of any kind of income goes into a do-not-touch fund. 90% of any money from a secondary source goes into investment accounts, savings, the stock market, etc. I actually plan this out on excel.

I ended up with about $13,000 dollars set aside, not including my "only 10% savings"-- we can call the 10% of my entire net earnings my "Do not touch" fund because only God himself or starvation could get me to touch that money.

I did something some might consider stupid-- I started stockpicking, but only because I work in electronics and have inside knowledge about the industry. I bought a ton of semi-conductor stocks in 2020. I started making a lot of money off of them, and then I started margin investing at only 33% of my total stocks. I kind of trail all my gains with a margin that equals about 33% of all investments, or 50% of my actual stock market assets-- so at $10,000 that'd be $5,000 margin, $20,000 I'd take out $10,000 margin.

I believe it was Warren Buffet who advised not exceeding a 33% margin.

A few tips on stock picking though: I got lucky in my situation; I have no doubts on my investments. Some days, I am down $1,000, but I often don't even blink because I know about semi-conductors and I can see 99% of the scenarios with them, the other 1% being the sun explodes or World War 3 would cause my investments to tank (and the latter might even be questionable). But I wouldn't stock pick without insider knowledge. I'd instead put my money up with a financial advisor, even if its a robo-advisor or an investment account like Goldman Sachs Marcus offers.

This has been some of my strategy. I do plan on paying off the student loans once the moratorium is lifted, but at 0% interest, payment requirements frozen, and a bull market I see no reason to.

 

Yes. All my money is paid into my bank account. My regular bills are paid on direct debit from my bank account and most of my purchases are paid on a debit card. I have never had nor will I have a credit card. Managing money is easy for me. I've never been in debt at any time in my life.

 

First step for me I guess is sobriety or forgeddaboutit probly end up under a bridge if I am as lucky as a duck if I keep going like this.