I think my personal story on how to build even a basic wealth within 2 years might help you or at least inspire you not to give up. This is not a guidebook and financial advise BUT I encourage you to read through it if you have reached financial bottom and feel like a piece of useless crap, loser or just want to achieve more and feel like there is no room for financial growth.
Since one of my comments on this topic gained several hundred likes, I think that it would be a valuable experience to share with others, especially with those who struggle and maybe feel like they are not worthy. I will divide it into two parts: how did I save money and how did I multiply saved money
How did I end up learning this valuable secrets:
At that time, while being 27 years old and wanting to have over one million dollars on my account by 30, I got so cocky and self-confident in my speculative abilities, that I put $50,000 of my own funds on X50 leverage(in simple words - it allows me to turn my $50,000 into a $2,500,000 of capital for speculation, but significantly puts my money into a risk of a liquidation under any volatility). Needless to say that I lost those money fairly quick. In addition to that, the startup which I invested in, got some ugly internal conflict between partners, as a result, several “star” team members and advisors left the project. I was able to pull some of my money in loss. At the same time, my girlfriend at a time (who lived with me and paid 50% of the rent) had her visa expired and she wasn’t able to extend it, so I was left alone and broke, just with enough money to pay for rent and food for the next 6–8 month. I could definitely say that I was emotionally unhappy and lost any motivation for a month, which I spent watching movies, reading books and playing videogames.
Since I don’t have parents, relatives or very close friends in the US, I could relay only on myself. I needed to find a quick way out of the situation and after a month of doing nothing, I got my shit together and started to re-build my financial life.
Considering that I have IT skills (networking, pentesting) and had experience working in large companies like Apple it wasn’t that difficult to find a job BUT I didn’t want to become another corporate little insect, so I ended up working in a very young IT company, with flexible schedule, but it was paying only $15 per hour at the time.
So, this is the situation which I had: $15 per hour would give me about $2000 per month, full-time, after tax. Not that much for Austin, TX, where the average apartment rent in $1,369.
So how did I save and then increased my wealth?
The biggest expense at a time was rent. I had to cut the rent first and so the first thing that I did is to move to a cheaper apartment. I downsized from 1 bedroom to studio, from fancy apartment complex to a “blue-collar” apartment complex. I saved almost $450 per month on that OR $5400 per year.
I needed a car badly but at the time, I calculated that I can’t afford having a car. Vast majority of Americans can’t imagine having a life without a car, but instead of taking a car loan, paying insurance, gas and repairs, I just used public transportation for 1 year, which cost me only about $41 per month. Using public transportation in Austin is no fun, plus the nearest bus stop was about 2.5 miles away from my apartment, and I had to walk there every morning. And yet, I did it - gas+insurance+repairs and no car payments saved me at least $2000–$3000.
This is what my expenses looked like:
1) Rent: $680 per month
2) Mobile data: about $15 per month - got a good deal at “Mint”
3) Internet: about $35 per month
4) Electricity+water+garbage = around $100 per month
5) Food: $200 per month
6) Misc (books, gifts, bus)- $150–170 per month
So in total I had about $1100 expenses.
Now, I would like to give you more details on how I minimized my expenses and how I made money work for me
Food - don’t eat out regularly. Let me give you an example. One meal, after tax and tips would be about $18. Instead of spending tons of money on eating out I found great dietary solutions at minimal cost. Example: 4 pounds of Chicken breast cost me only $7, bag of bean sprouts in Asian market: 0.75 cents. Red and green bell pepper - around 30–50 cents per item. Tomatoes, rice, onions, greens, garlic, eggs - all that is under 1 dollar. In other words, for the same $18 I could eat at least • for 3–5 days of healthy, balanced and nutritious food.
• No loans. Since I moved to the US I have never owned a credit card, hence I don’t have any loans or interest to pay. When you have money which you actually own, it’s much easier to handle them . I do not oppose loan if you plan to use it to make more money, for example - if you flip houses or take small business loan, but never ever take loans for a new iPhone, gaming PC or a newest car model. It’s dumb and irrational.
4. • Car. If you get a car loan, you also shouldn’t forget about insurance, gas and small fixes like flat tire etc . Seriously, don’t get a car if you can’t afford to have one. I know that people will look down on you, some might consider that you are a loser . Whatever, your goal right now is not to impress some people who don’t give a crap about you, but to build a wealth. So fu*k them and their opinions -• concentrate on your goals. I bought a car again once my income has increased and I saved enough money. Even then, I bought a used car in good condition, from Facebook Marketplace. I was able to negotiate great price because it had couple small hail dents on the roof. But before buying it, I spent 2 month looking for a “perfect deal”, and patiently waited for it - no car loans, and it saved me about $4000-$5000 (that’s how much more I would pay if I would buy from dealership and finance it). I also plan to sell it for $500 more than I bought it after 2 years of using it, simply at home? Cable will cost you about $600 annually, and much more in opportunities.
5. Take care of yourself. I go to gym and try to eat relatively healthy. Limit alcohol and smoking as much as possible. Not only that saves you money on your medical bills, it also boosts your motivation and energy to do things, hence you are more likely to make money.
So, my next step was to make money work for me and increase my income. This is what I did:
1. I worked more hours (overtime) and took some online, side opportunities. Overall that generated me about $400 more per month (after tax). Which brings me to the following monthly scenario: $2400 (income after tax) - 1100 (expenses) = $1300 per month which I could save or invest
2. Out of that $1300, set $700 on my savings account, $500 on my stocks and cryptocurrency,
because I researched the car market for this particular model in this particular area - don’t be lazy and do your research.
2. • Cable TV. Seriously, get off that thing. First of all, most of the stuff you can find nowadays online. Why do you need to pay for a cable? Do you think that you can build a wealth while watching a cable and the rest $100 I left of my bank account for unexpected monthly expenses.
3. For example I invested about $1500 in one 5G company stock - I got average buy price of $2.50 per stock. In less than a year, I sold it for $5 per stock, making additional $1500 only out of it. I also did some good investment in some cryptocurrency, which turned my small 1000 investment into $3000 within 6 or 8 month. Some other stocks made me on average about 25%–30% returns, which generated about additional $3000–4000.
So what I have at the end of the year?
• $8400 on my savings account (started from 0)
• $6000 + $5000 = ~$8000 (after tax) in my bank account from buying and selling stocks
Result? Wealth increase from 0 to $16400 within a year working on $15 per hour JOB and just doing occasional side gigs, investments and overtime.
Now, I understand that $16400 might not seem like a lot, but you can definitely increase that amount by changing a job, getting a promotion, negotiating with your boss (I did both) or by finding a roommate to cut your expenses. You can easily bring this number to $22,000-$25,000 per year by increasing your salary by a few dollars per hour and splitting your expenses with a roommate or girlfriend/boyfriend. If you can save $25,000 per year, just in 10 years you can purchase your own HOUSE without any MORTGAGE. Or you can continue to invest and make more money, like I do and basically double that number every year, which allows me to save more than people who make 100k+ per year in Bay Area
I do realize that it’s much more difficult if you have medical conditions or kids, but you can still apply the same principles, it will be just more slower and more difficult emotionally but you can still handle it. I know how difficult life can get sometimes, but your only way to build a wealth
on average/low income situation is to stay self-disciplined, care less about what people think about you, save more, invest and stay focused on your goals - you will prosper.
