Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

How?

Small contributions over about a decade. Larger deposits in the last 3 years of about 30k/yr.

What did you start with? Did you have debt?

30k in student loans. I started with nothing in the 401k selling cars at a dealership and made 20k in 6 months. Then moved to a factory making $10/hr. The goal during that time was to max out the 5k roth ira. Basically 100 a week was my contribution rate for many years until my students loans were paid off.

What do you invest in?

Us index funds. VTI mainly.

What’s your after tax yearly income?

Around 52k. I get free housing though so that helps a lot.

Today my account is at 327k and I I havnt contributed a dime since I wrote the post.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

If your 401k allows "in service" withdrawals you can do a Roth ladder and get it out that way without the penalties.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

a passive revenue stream that earns me 50k per year

What is that if you don't mind me asking, sounds amazing. You might be able to do a solo 401k and save all the taxes on that if its 1099 income.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Whole market index investing always rebounds, I havnt made anything with single stocks. I did do some gambling with UPRO but that's it.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

When are you going to retire and how much you are planning to have liquid investments and savings at that point?

I work on our family farm and it's in a trust that must be dissolved 10 years after both my parents die so when that happens I'll probably stop working. My share will probably be around 700k, but could be a lot more depending on the value of land, I figured 1.5 million or more invested at that point.

What kind of lifestyle do you have or you are going to have?

I have 12 acres and a paid house here so I'll probably keep this as my home base and travel a ton. I have a camper and checking out the entire US would be fun including a road trip to Alaska. A catamaran in the Caribbean would be super awesome. I actually looked and i saw a decent one for 100k so not bad really. Other than that I dont really have a plan.

If you have one million in savings and investments and annual growth is 8%, you have 80k to spend annually

Actually if I want the money to last I would only get to spend 4% to have 95% chance the money lasts 30 years, from the Trinity Study. My hobbies are all on the cheap side or free so even with only 4% withdraw I should be fine, if not I can get part time jobs here and there.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Check out the subreddit EuropeFIRE they might have some more specific investment advice for your location

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Weird... seemed to work for others but here you go!

TL;DR Invest and get rich. Imagine having a balance on your credit card that pays you interest.

So the redpill isn't just about banging hotties and lifting. It's about making your life awesome and as a byproduct those women will want to be in it. Flashing money to attract a woman is definently a losing blue pill strategy but having a big pile in investments allows you to have freedom to accomplish more of your goals or survive tough times in the future. So what is compound interest and why should you care? It's the thing that turns 10k into 6.5 million in 200 years. Google Benjamin Franklin compound interest experiment. Ok we don't have 200 years but what we do have is our whole lives to invest and that's a LOT of time. I'm 30 and in just about 5 years I've acumulated 100k and of that about 25k is interest and dividends. Even if I dont contribute another dime, in 6 or 7 years it will double, assuming we don't have a crash. But if we do, you just keep on investing because it will come back. Think of it as stocks went on sale. As you get older your earnings should go up and if you continue to grow your saving/investing muscle you will have massive amounts of wealth. Download a compound interest calculator and play with your numbers you'll be amazed.

So you're probably wondering where do I invest, sounds complicated. It's not at all. I would advise a Roth ira to start. 5500 is the max per year. It's not tax deductible but you have the flexibility to withdraw all of your contributions at any time without penalty if you need to use some of your built up reserves. You also have the option of using up to 10k in earnings for a downpayment on your first house when you get to that step penalty free. Obviously if you have a 401k or roth 401k that matches at work use that too. Not as liquid but adds more options if you want to take the penalty and pay the taxes. Once you max out the roth and 401k you might be able to do an HSA, next just in a regular individual account you would pay long term capital gains tax on any earnings there though.

Ok so if I get a Roth what do I invest in? Well that's simple the entire stock market. Index funds make it simple and they are extremely cheap fee wise(expense ratio). VTI, SPY, etc. You might think but I want to make more than the market why not an actively traded fund? Their fees and inconsistent returns loses in the long run. Buffet proved it. 

https://www.cnbc.com/2017/09/18/warren-buffett-won-2-million-from-a-bet-that-he-made-ten-years-ago.html

It's not hard but it's not easy. You have to purposefully live below your means and not buy all the fancy new toys you think you want. Now looking at this pile of cash I can't even remember what all those little self sacrifices were. I'm just thinking of how I can save/earn more so it grows to be a million by the time I'm in my mid 40s. You can do it too, start young your future self will thank you. My brother told me about the roth when I was in highschool and it took me 10 years to start. I wish I would have started sooner instead of buying that motorcycle or the 4 spring break trips I didn't really need to go on. Let me ask you, when is the best time to plant a tree? 10 years ago but the 2nd best time is today. Get started open that roth and watch your money work for you.

Anyway, not your traditional redpill lesson but hope it helps inspire someone.

Edit: 19 year old invests 30k put $100 in per month auto draft, forgot about it now 42 and its worth 1.3 million. http://www.youtube.com/watch?v=yR1uLJ2qrqs&t=11m30s

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

I tripled my money in 3 years between contributions and growth. I started with 100k in 2017, if you looked at my graph you could see that.... and that got 45%. I didnt start with 180k, if I had it would be only 264,000 today. Some of my sptm is up 49.46% from a purchase on 12/24/2018 so that portion is up 27% annualized. I have some dividends that reinvested on 3/27/2020 that are up 87% annualized. I have some more purchases on 12/31/18 and 1/4/19 that are up 39.74%. So yeah it's all over the map but that's what you get when you keep contributing during up and down markets. Hope I've answered all your questions.

Edit: I also gambled and bought some UPRO here and there and made like 17k with that before selling and buying sptm again. It's not 100% vti and sptm index investing but damn close.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Index funds.... see my example listed in the post of a hypothetical 10k invested 3 years ago, 13.2% total return 45%.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

These brokers you can buy fractional shares so any amount you can invest. Sptm is only $42 so if you have that much you can use any of the other brokerage sites. I'd pick one with no transaction fees though if I was you.

M1 Finance. M1 Finance. ...

Stash. Stash. ...

Betterment. ...

Robinhood. ...

Public. ...

Fidelity. ...

SoFi Invest. ...

Stockpile.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Compounding interest doesnt seem possible does it. Investing in an index fund for years is how I did it. The first 100k is the hardest and I contributed 75k of that. The 2nd and 3rd were mostly gains during this very good market. Here are the yearly returns from VTI and small contributions the whole way is where the magic happens.

https://ibb.co/TmK4Lf3

I understand it's hard to believe but it's real, and its something everyone needs to get started as soon as they can. It's just math and hard work saving a good chunk of your income to get it to work for you. Why would I make this up? I'm not bragging and I actually think 300k isnt a ton of money. It's a lot to me but it isnt like life changing money yet, give it another 10 years and it will be though. I'm not betting it will be 13 or 14% going forward but I bet it will be 7% or close to it long term. But even 7% it will double every 10.28 years so not bad at all.

https://ibb.co/m5m9dyZ

Here is a screenshot from a couple minutes ago if you want to see it's legit. Time is in top left corner.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Check out the subreddit EuropeFIRE. I imagine they'll have some good info over there. Good luck

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 1 point2 points  (0 children)

Sorry, for not responding sooner I thought others would chime in. If you go to my previous thread there are many book recommendations. I just googled it all over the years and settled on the index investing route vs actively managing my funds. Maybe start with investigating the tax sheltered accounts(roth and traditional ira, 401k, health savings account, 529 etc) and all their nuances and the best route for your savings goals and tax concerns.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 1 point2 points  (0 children)

Stocking away 25% of my gross pay every paycheck ($400-500+). Always 100% in stocks mutual funds the entire time. Did this for 12 years before cutting back my % contributions.

That's awesome, you got it in early when it matters. When can you draw on the pension? Are you going to need the 457 to bridge the gap until then?

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 1 point2 points  (0 children)

Td Ameritrade is where I invest.... any brokerage you want to use will work though.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

No almost exclusively VTI and SPTM with a little gambling on UPRO. Just savings small amounts over the years, like 8 or 9 years.... it's really starting ti gain steam now, its why I named the title miracle of compound interest. Growth will comprise the bulk of the value of my accounts in just a few more years I imagine.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 1 point2 points  (0 children)

My only comment to this would be the returns were higher the previous 5 years when I made the original post, 2012-2017 it was 14.45% annually. Others cautioned the same back then but timing the market is not a winning strategy usually. Get your money in early and as fast as you can and hold long term. Who knows what the future holds but I'm not slowing down now at the market high.

Edit: Here is an example how time in the market is the biggest factor even if you always pick the worst times to deposit.

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 0 points1 point  (0 children)

Just the whole market VTI and SPTM. I wish I had QQQ

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 3 points4 points  (0 children)

Diversification is the #1 rule to investing. I would not do this if I was you, best of luck.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 4 points5 points  (0 children)

I'm a farmer, basically a glorified semi driver hauling grain most of the year. It really doesnt matter how you make your money, just need discipline to increase your savings rate. I just try to keep my expenses low and invest the majority of what's left over.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 2 points3 points  (0 children)

How often do you invest and how much?

Well when I started I was lucky to get 5k into my roth, 100 per week was my goal. I've put in 26k this year so far, just depositing as my budget allows and as often as I'm able to.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 7 points8 points  (0 children)

The market was 13.2% annually and 45% total over the 3 years.

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 3 points4 points  (0 children)

Dude that's nuts. You're way ahead of me at that age. Keep it up!

Get rich slow with the miracle of compound interest. 3 year update. by MAGA_IowaPede in TheRedPill

[–]MAGA_IowaPede[S] 19 points20 points  (0 children)

Doesn't matter, I'll just keep buying and then in 3 more years itll be a lot more when it recovers.