Author Topic: **UPDATE** for MrCleanShaven  (Read 1125 times)

MrCleanShaven

  • 5 O'Clock Shadow
  • *
  • Posts: 12
**UPDATE** for MrCleanShaven
« on: July 24, 2018, 01:46:20 PM »
"Hello Mustachians!

I posted this first in "Ask a Mustachian" but was told it would be better received in this forum so here we go!

I recently found this site and am blown away by the content. Actually to be honest it is overwhelming. I really don't even know where to start to get my life on track in the most efficient manner. So what I decided to do was ask this wonderful forum for some help and/or guidance! I am going to give you guys some details of where I am in life right now and see what you guys all think would be my best direction for my first few steps. I realize many on this forum seem to be wealthy or financially independent already and I hope to move in that direction. So with the risk of some embarrassment and ridicule here we go.....

I am 44 years old and single. I recently got out of a business that cost me the bulk of my life savings and wasted many years of my life. My current income will be approximately 30k in 2018. I play poker player in small stakes games to earn my living. I played a bunch before I owned the business and a small bit during the years of running the business but am back at it full time now. I average about $15/hr over a large sample size and should play about 2000 hours in 2018. I am also dabbling in a bigger stakes game where I believe my earn should be in the $25-$35 range with the potential to be higher but for my purposes here I am counting on a solid 30k earn playing the small stakes. I am currently straddled with about 20k in credit card debt. (from the business) and a medical collection ($2000) so my credit is not good sitting in the 620 range.

Credit card balances are as follows:

Chase Freedom $3600 @ 27%
Chase Slate $1500 @ 0%
Capital One $4500 @ 19%
Barclay $5000 @ 0%
Discover $4000 @ 19%
BestBuy $400 @ 0%
Total Rewards Visa $1500 @ 24%
American Express Blue is at ZERO balance

I just sold off an asset and now have $40,000 liquid. I also started a ROTH IRA in 2017 and funded $1500 and have it set up to do $50 a week in 2018.
I have about $2500 worth of Crypto Currency in Coinbase.


So let's begin!

Do I pay off all the credit cards and medical collection and start fresh?
Do I pay off the credit cards that have an interest rate in full and just pay the 0% ones over time? (medical is also not charging any int or penalties)

Is there a better way to put my $40,000 to work for me to make money while I start paying down the debt more aggressively?

I'd also like to know what should I do as far as bank accounts? Right now I have a Chase Total Checking account and that's it. I closed my Chase Savings because it was charging a monthly fee since I didn't have enough of a balance. Should I look to online banking that offers some interest? Should I play the bonus game jumping around to different accounts? I'd also like advice on doing an optimal credit card strategy? Which should I use for rewards programs, etc. and I see some people talking about ways to make $1500 a year or so playing the credit card bonus game.

My expenses are pretty cheap as I have a cell phone for about $100/mo and pay Mom $350/mo rent. $100/mo in gas for the car. My car is paid off but might be near the end of the line! A lot of home cooked meals compliments of Mom and plenty of free food at the casino keeps my expenses down. (I'm a poker player not a gambling degenerate...don't worry. I am a profitable player.)

I know this is a lot all at once gals and guys but I'm hoping for some solid feedback. I understand that much of the information I'm asking for is probably available on the forums but there is just so much and some might be outdated, etc. So thanks in advance to anyone that takes the time to look over my situation and can offer some advice. Feel free to leave any questions you may have and again Thank you!

MrCleanShaven"






Please note that was my original post back on January 20th, 2018. So here we are 6 months later and I thought I would post an update.


Link to original thread.....   https://forum.mrmoneymustache.com/case-studies/*case-study-clean-shaven-but-hoping-to-grow-some-whiskers!/msg1872529/#msg1872529


Credit card balances are as follows:

Chase Freedom $0 @ 27%
Chase Slate $0 @ 0%
Capital One $0 @ 19%
Barclay $960 @ 0% (two payments of $480 left before interest kicks in)
Discover $0 @ 19%
BestBuy $0 @ 0%
Total Rewards Visa $0 @ 24%
American Express Blue $0 @ 18%

Credit Score has crept it's way up to 709 (CHASE,DISCOVER,AMEX) although MINT shows it at 768?

The medical collection has a balance of $1320. After the final two payments to the Barclay card I will up my monthly payment to the collection and pay it off by December.

I should have listened to you guys and dumped the Crypto as now it is worth $1363! It is still sitting in Coinbase...any further advice on that? It is Bitcoin and Litecoin.

I increased my weekly contribution to my Roth IRA up to $75. That account is with ETRADE and it's fun. Every 6 weeks I pick a stock and make a purchase or every 3rd time around I add to VTI. ETRADE is offering no commission or brokerage fees on ETF's.

Poker playing has been going well as I am earning more than expected thus far however that can change at anytime. For the year I have averaged $22.19/hr however I still base my numbers on a goal of $15/hr which should be a worse case scenario.

My emergency fund is sitting at $5500 which is just sitting in a CHASE savings account. Any better options for that?

A better breakdown of my monthly expenses:

Rent $350
Cell $100
Gas $100
Ins $220
Food $200
Misc $100

My poker bankroll is segregated from life stash and is currently at $5000. The first $1100 I profit each month goes to the pay bills account. After that I will pad the emergency fund and then the poker bankroll at a variable ratio depending on where the balances are at. The bigger the poker BR the less I will put towards it until the emergency fund reaches 10k. At that point all the money will go towards the poker BR and investments. The standard thinking behind a poker bankroll is to have about 20 buy-ins for your game. I play in a $200 buy-in game mostly so $4000 should be sufficient. As the bankroll grows I will take more and more shots at a bigger game until eventually moving up full time as the bankroll and skill level warrants.

I am also looking into doing some arbitrage via Amazon FBA for some added income. Real estate investing is something I've always wanted to do as well. Going to start studying that a bit so when the money is right I will be prepared.

That's all for now as always any and all feedback is appreciated. I expect some harsh comments as I do things a little outside the box of what you are all used to and that's fine. I don't take offense to any comments, advice, etc. Let me have it!

Thanks,

MrCleanShaven
« Last Edit: July 25, 2018, 03:05:08 AM by MrCleanShaven »

swashbucklinstache

  • Stubble
  • **
  • Posts: 196
  • Location: Midwest U.S.
Re: **UPDATE** for MrCleanShaven
« Reply #1 on: July 24, 2018, 03:31:49 PM »
Do you have a link to your old post? If so, could you include it at the top?

Thoughts and responses to questions


I should have listened to you guys and dumped the Crypto as now it is worth $1363! It is still sitting in Coinbase...any further advice on that? It is Bitcoin and Litecoin.

Can you deduct losses on your taxes? It is very tempting to say dump this and bring things in line with your overall strategy. Alternatively, 15 years from now when you're a millionaire this is a small enough amount of money that it isn't worth stressing about.

I increased my weekly contribution to my Roth IRA up to $75. That account is with ETRADE and it's fun. Every 6 weeks I pick a stock and make a purchase or every 3rd time around I add to VTI. ETRADE is offering no commission or brokerage fees on ETF's.

Are you saying you pick a stock to invest in one week, do the same the next, then the third week you add to VTI? Unless you are investing money that you'd otherwise be spending or you're doing an appropriate amount of research and have the skill to do so, I'm going to pick on you a bit here. 1) Do you have an IPS? If you do not, create one right now and then follow it every single time. 2) If the answer is no, can you explain with rational logic why you're doing this? What is your savings rate and target FI number? Because if you have a plan to be FI in < 15 years, this is poker player you intentionally choosing a hand with a lower win probability 2 out of every 3 times (and, if you're not doing enough research and are skilled enough, this is without even counting cards to boost your odds).

Keep in mind:
1) I don't know shit about poker, but I do know statistics.
2) This is a small amount of money compared to what you'll have in 15 years. As long as you are intentionally making choices and understand why this is a bad choice (but, e.g. it keeps your spirits up and keeps you investing) it might not really matter much.


Poker playing has been going well as I am earning more than expected thus far however that can change at anytime. For the year I have averaged $22.19/hr however I still base my numbers on a goal of $15/hr which should be a worse case scenario.

Does this include taxes?

My emergency fund is sitting at $5500 which is just sitting in a CHASE savings account. Any better options for that?
This is probably fine. Smaller concern than other things, though I'm sure others may recommend Ally or something with a high interest rate, that matters less than many things.



Rent $350
Cell $100
Gas $100
Ins $220
Food $200
Misc $100

As the bankroll grows I will take more and more shots at a bigger game until eventually moving up full time as the bankroll and skill level warrants.

What is your end game here? Specifically, you're scaling investments $3900 a year and scaling investment in yourself (poker). How much will you invest in the latter compared to the former, now that your stated expenses of ~$13,000 per year are significantly under your expected $30,000 salary? No wrong choice, or at least I'm far from educated enough about the world of poker to know (but hopefully you aren't),  and failing to plan as they say... I guess I'm thinking, is it prudent to take some "risk" off of the table via putting it into investments, to protect against running into a string of bad luck? Not just poker, but maybe something that takes you away from the table indefinitely. Do you pay / have you paid into social security?

pay Mom $350/mo rent

With you at 44, it might be prudent to be mindful of the market rate or what your mother pays for housing expenses. I'm thinking worst-case scenario here where she passes away - is your EF / income enough to keep you in the house if you want that? Is it enough to afford housing otherwise if not? Do you have enough information to address these questions? Again no actionable advice here just things to keep in mind as you plan your financial future (you might consider writing all of your plan down somewhere)


Chase Freedom $0 @ 27%
Chase Slate $0 @ 0%
Capital One $0 @ 19%
Barclay $960 @ 0% (two payments of $480 left before interest kicks in)
Discover $0 @ 19%
BestBuy $0 @ 0%
Total Rewards Visa $0 @ 24%
American Express Blue $0 @ 18%

Credit Score has crept it's way up to 709 (CHASE,DISCOVER,AMEX) although MINT shows it at 768?

The medical collection has a balance of $1320. After the final two payments to the Barclay card I will up my monthly payment to the collection and pay it off by December.

CONGRATULATIONS!!!!!!!!!!!!!! Very happy to see you pay off your debt and stay on the good side of it to boot. Seriously, nice job.
« Last Edit: July 24, 2018, 03:37:14 PM by swashbucklinstache »

MrCleanShaven

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: **UPDATE** for MrCleanShaven
« Reply #2 on: July 25, 2018, 03:31:20 AM »
Thank you so much Swash! I have a lot to think about! The learning, researching and decision making is what makes all this fun! Here are a few answers to some of your questions which I know were meant to just be thought provoking for myself but I like to engage and learn as much as possible.



Do you have a link to your old post? If so, could you include it at the top?

Put a link in my opening post, thanks for that tip!

Thoughts and responses to questions


I should have listened to you guys and dumped the Crypto as now it is worth $1363! It is still sitting in Coinbase...any further advice on that? It is Bitcoin and Litecoin.

Can you deduct losses on your taxes? It is very tempting to say dump this and bring things in line with your overall strategy. Alternatively, 15 years from now when you're a millionaire this is a small enough amount of money that it isn't worth stressing about.

I do believe if I sell I can take a capital gains loss.

I increased my weekly contribution to my Roth IRA up to $75. That account is with ETRADE and it's fun. Every 6 weeks I pick a stock and make a purchase or every 3rd time around I add to VTI. ETRADE is offering no commission or brokerage fees on ETF's.

Are you saying you pick a stock to invest in one week, do the same the next, then the third week you add to VTI? Unless you are investing money that you'd otherwise be spending or you're doing an appropriate amount of research and have the skill to do so, I'm going to pick on you a bit here. 1) Do you have an IPS? If you do not, create one right now and then follow it every single time. 2) If the answer is no, can you explain with rational logic why you're doing this? What is your savings rate and target FI number? Because if you have a plan to be FI in < 15 years, this is poker player you intentionally choosing a hand with a lower win probability 2 out of every 3 times (and, if you're not doing enough research and are skilled enough, this is without even counting cards to boost your odds).

Keep in mind:
1) I don't know shit about poker, but I do know statistics.
2) This is a small amount of money compared to what you'll have in 15 years. As long as you are intentionally making choices and understand why this is a bad choice (but, e.g. it keeps your spirits up and keeps you investing) it might not really matter much.


So you are saying just chunk everything into the VTI as there is no way I would be able to outperform the index fund by picking individual stocks? I guess I just did it for the sake of amusement. I had not heard of an IPS so I did a quick search and will come up with one for myself.


Poker playing has been going well as I am earning more than expected thus far however that can change at anytime. For the year I have averaged $22.19/hr however I still base my numbers on a goal of $15/hr which should be a worse case scenario.

Does this include taxes?

No it does not, I do file as a professional gambler and pay into medicare, soc security and pay self employment tax. I get to write off some business expenses, etc.

My emergency fund is sitting at $5500 which is just sitting in a CHASE savings account. Any better options for that?
This is probably fine. Smaller concern than other things, though I'm sure others may recommend Ally or something with a high interest rate, that matters less than many things.



Rent $350
Cell $100
Gas $100
Ins $220
Food $200
Misc $100

As the bankroll grows I will take more and more shots at a bigger game until eventually moving up full time as the bankroll and skill level warrants.

What is your end game here? Specifically, you're scaling investments $3900 a year and scaling investment in yourself (poker). How much will you invest in the latter compared to the former, now that your stated expenses of ~$13,000 per year are significantly under your expected $30,000 salary? No wrong choice, or at least I'm far from educated enough about the world of poker to know (but hopefully you aren't),  and failing to plan as they say... I guess I'm thinking, is it prudent to take some "risk" off of the table via putting it into investments, to protect against running into a string of bad luck? Not just poker, but maybe something that takes you away from the table indefinitely. Do you pay / have you paid into social security?

Yeah I want to get the emergency fund to $10,000 and as long as the poker BR is above $5000 the rest I can chunk into various investments. Once I max out the Roth IRA I will seek other investment tools. Eventually I'd like to do some real estate investing, house flipping, rentals.


pay Mom $350/mo rent

With you at 44, it might be prudent to be mindful of the market rate or what your mother pays for housing expenses. I'm thinking worst-case scenario here where she passes away - is your EF / income enough to keep you in the house if you want that? Is it enough to afford housing otherwise if not? Do you have enough information to address these questions? Again no actionable advice here just things to keep in mind as you plan your financial future (you might consider writing all of your plan down somewhere)

Definitely need to put more thought into this!


Chase Freedom $0 @ 27%
Chase Slate $0 @ 0%
Capital One $0 @ 19%
Barclay $960 @ 0% (two payments of $480 left before interest kicks in)
Discover $0 @ 19%
BestBuy $0 @ 0%
Total Rewards Visa $0 @ 24%
American Express Blue $0 @ 18%

Credit Score has crept it's way up to 709 (CHASE,DISCOVER,AMEX) although MINT shows it at 768?

The medical collection has a balance of $1320. After the final two payments to the Barclay card I will up my monthly payment to the collection and pay it off by December.

CONGRATULATIONS!!!!!!!!!!!!!! Very happy to see you pay off your debt and stay on the good side of it to boot. Seriously, nice job.


THANKS feels good!



What would you look for as far as investments with any excess money I have after maxing out the ROTH IRA?



Thanks again,

MCS

swashbucklinstache

  • Stubble
  • **
  • Posts: 196
  • Location: Midwest U.S.
Re: **UPDATE** for MrCleanShaven
« Reply #3 on: July 25, 2018, 03:55:58 PM »
Thank you so much Swash! I have a lot to think about! The learning, researching and decision making is what makes all this fun! Here are a few answers to some of your questions which I know were meant to just be thought provoking for myself but I like to engage and learn as much as possible.




I increased my weekly contribution to my Roth IRA up to $75. That account is with ETRADE and it's fun. Every 6 weeks I pick a stock and make a purchase or every 3rd time around I add to VTI. ETRADE is offering no commission or brokerage fees on ETF's.

Are you saying you pick a stock to invest in one week, do the same the next, then the third week you add to VTI? Unless you are investing money that you'd otherwise be spending or you're doing an appropriate amount of research and have the skill to do so, I'm going to pick on you a bit here. 1) Do you have an IPS? If you do not, create one right now and then follow it every single time. 2) If the answer is no, can you explain with rational logic why you're doing this? What is your savings rate and target FI number? Because if you have a plan to be FI in < 15 years, this is poker player you intentionally choosing a hand with a lower win probability 2 out of every 3 times (and, if you're not doing enough research and are skilled enough, this is without even counting cards to boost your odds).

Keep in mind:
1) I don't know shit about poker, but I do know statistics.
2) This is a small amount of money compared to what you'll have in 15 years. As long as you are intentionally making choices and understand why this is a bad choice (but, e.g. it keeps your spirits up and keeps you investing) it might not really matter much.


So you are saying just chunk everything into the VTI as there is no way I would be able to outperform the index fund by picking individual stocks? I guess I just did it for the sake of amusement. I had not heard of an IPS so I did a quick search and will come up with one for myself.


I would consider it, and I in fact do just that. (again, in the context of your IPS, risk tolerance, life, etc. that are all individual to you). Many here will strongly suggest index funds over individual stocks. Strictly addressing the underlined statement I would say that for most people it isn't that there is no way you would win, just that you shouldn't expect to. In poker this might be choosing pocket 9s over pocket queens to go all in on pre-flop given a choice between the two and no other information except that no matter what you will be called. Over 10,000 hands there is a correct choice, but no one knows if this is the hand where the other two 9s flop down. 9s aren't horrible, you'd expect to win > 50% of hands that way, but why not go with queens.


What would you look for as far as investments with any excess money I have after maxing out the ROTH IRA?

Thanks again,

MCS

So, most immediately I would say do what your IPS says :). As you develop the first iteration of that, look on this forum for a stickied post titled Investment Order or something along those lines. That'll handle choosing accounts through which you might invest securities once you've filled up your IRA. Real estate or other investments are more of a individual decisions.

A taxable brokerage account could be a good next choice, or perhaps some sort of solo-Roth 401k if such a thing exists.