You can’t avoid the endless distractions of today’s world.
You are going to fall prey to impulse driven sales, Instagram reel blackholes and the feeling of FOMO when Disney posts the latest update to one of their parks.
I see you staring down the barrel of your selfie camera, anticipating that sudden hit of dopamine like a drug addict. Maybe you are wondering how you got to this point and telling yourself that you can stop any time you want? You tell yourself you need it. You can’t live without it. It will make you better. But will it?
I’m not judging you. I just bought a 7.5’ Mickey Mouse Nutcracker animatronic like a dealer, contributing to my wife’s addiction to Disney and Christmas. What went through my head? It’s sold out everywhere except an hour away so I will be one of the few that have it and I can return it if we regret buying it. But will I really return it? What story am I going to tell myself to keep it?
So here is my justification, “It’s only money. I can always make more.”
The Beginning
Not everyone can afford this mindset. When my wife and I bought our first house, we were $20 in the red each month after bills. Rich Dad, Poor Dad by Robert Kiyosaki and Sharon Lechter helped us focus on lowering expenses and finding ways to build passive income to escape the “Rat Race.” We stopped buying unnecessary things and focused on paying down high-interest credit card debt.
We stuck to our plan, made some moves in our careers and made some good decisions financially. On the other side of this mountain that we climbed was something I didn’t actually know was possible, freedom of choice. We had more income than bills and could buy whatever we wanted and go out whenever we wanted. It was intoxicating.
We still had some of the same frugal tendencies, doing our research and questioning if we still needed it, but we got so good at telling ourselves stories of why we needed it we found ourselves financially secure, but with no money in the bank account. We are spending it as fast as we can earn it and I hate it.
I’m reminded of every time I get on an airplane and the flight attendant demonstrates how to put the oxygen mask on myself before helping anyone else. How can I expect to help others if I can’t help myself?
Identify the Problem
Whenever I want to make a change, I start by identifying one specific problem. This isn’t easy because it often means admitting there’s a better way. If you’re stuck with too many problems, focus on one that could act as the first domino to help knock down the others.
My Problem: We don’t have any savings built up in the off chance there is a financial emergency.
Three Viable Options
Once the problem is identified it’s time to brainstorm some potential options. Look from every angle and become devil’s advocate after you think of solutions to better test potential outcomes.
Solution #1:
Stop spending money on things we don’t need. Simple and would show quick results.
Devil’s advocate: It’s not just about convincing myself—I’d need to get my wife on board, and managing others’ emotions is exhausting.
Solution #2
Automatically set aside part of each paycheck into a savings account. Some workplaces can split your paycheck so you don’t even see the savings. For extra security, use a separate account.
Devil’s advocate: It’s a lot of steps, and even if it’s in another account, I might still be tempted to check the balance.
Solution #3
Invest a small amount weekly in reliable stocks. Today’s tech makes it easy to get started, and investing can grow savings beyond direct access.
Devil’s advocate: I don’t know much about stocks, and there’s always risk. Plus, I’ll need to convince my wife that this money won’t be touched for a long time.
Recommended Solution
Now that I have laid out my options I begin to weigh the pros and cons. Look deep into past experiences and need to be honest with myself on whether each option could hold itself on its own. I also like to do something called a “Pre-Mortem,” where you fast forward a year or two ahead and come up with all the ways this decision went wrong.
One lesson my wife and I haven’t been able to implement from Rich Dad, Poor Dad is to build passive income. My wife’s uncle actually gave us Cashflow, the board game that gamifies the lessons from the book, and passive income was objective, but it wasn’t always the first step. You need money to invest in passive income and one area to get this cash is the stock market. So with that in mind I decided to work with my wife to begin investing.
The First Bite
Starting with my goal in mind, “To have the freedom to choose what I want to do without concerns of repercussions,” my why, “So that in 15 years I can pursue the life coach goal that I have established without fear of losing the house or letting my family down,” and the power of SWEAT, I began to identify the first bite of the elephant.
What is the smallest risk and effort that I can put in to begin and learn from? I already knew about the Robinhood app, but there have been some negative thoughts towards the app and company running it since the whole Gamestop stock debacle that happened a few years back. Found out that you have to watch out for the fees for trading and services, so I added that into my considerations. I chose a company called Public Holdings, Inc. They have a relatively simple app that allows you to invest and they don’t charge commissions on trading stocks or funds, and there are no account minimums. (Here’s their FAQ about fees: https://help.public.com/en/articles/5988626-does-public-charge-any-fees)
Public is an investing platform where you can invest in stocks, bonds, options, crypto, and more. Sign up from my page and get $20 invested into an asset of your choice https://share.public.com/Brian62747
So I signed up, connected my bank account, made sure I was in alignment with my wife because we are partners in all of this, and invested my first $100. I’m not giving you advice that this will work for you. I’m merely sharing what I did for my first bite.
After some research I learned about several types of categories in stocks and the one that fit my goal best was an exchange-traded fund (ETF). These are stocks that pay dividends, so the thought process is that the value could increase and the dividend could be reinvested to purchase more stock. The one I chose was SPDR Portfolio S&P 500 High Dividend ETF. This was a cheaper stock that fit my needs and showed a lot of reliability.
Fast Forward 5 Months
I have invested a total of $310 across two different apps. Invested another $100 into my Public account. This time I had invested in another ETF that was more risky and then the dividend was announced to be a whopping $0 so I took it out of that stock and invested it into another ETF that had a monthly dividend that has been very consistent.
The other app that I decided to explore helps diversify your portfolio and is called Groundfloor. I decided to invest $110 into that app to see how that would work and grow. It’s a lot slower growth, but if you spread your investments out you can begin to mitigate the risk of losing it all in one shot. I said mitigate, not eliminate.
When you create an account on Groundfloor and transfer your first $100 with this link https://app.groundfloor.us/r/cf97d9, you will receive $50 in Groundfloor credit.
My current progress is as follows:
- Public
- Invested: $200
- Value: $220
- Average Monthly Growth: $1.16
- Groundfloor
- Invested: $110
- Value: $160.08 (I received a $50 credit from my first $100 invested!)
- Average Monthly Growth: $0.016
Conclusion
Bite-size is the right size! With small steps and a 15-year plan, I know financial freedom is possible. By setting auto-invest and leaving it alone, I know this small start will grow. It’s not a million yet, but building the habit of investing—and learning as I go—will help me on my journey to financial freedom.
Disclaimer
I am not a financial advisor. This article is for informational purposes only. The information in this article and on this website is not financial advice, and you should not consider it to be financial advice. You should always seek appropriate financial advice from a professional financial advisor in your state.
I also want to be clear that the Groundfloor and Public links are generated referral links and if you sign up I will receive an incentive for your sign up. They did not ask me to do this, but this is also part of my plan for passive income as well!