fbpx

Wealth of Understanding - Visuals

Since a picture is worth a 1,000 words, I can help you understand complex financial ideas with little more than an image. If you like these, you'll love the e-book with over 19 illustrated principles of wealth creation.

Get the e-book

Specific Knowledge

There are things you know that few others do. Things that you learned, that can’t easily be taught. That specific knowledge is what you can leverage to earn money.

Simple vs Compound Growth

If you increase 20% per year for 30 years, that’s not just 30 x 20%; it’s such a larger number. Look at this image to get a better understanding of compound interest. 30 Years @ 20% Interest. Simple growth vs Compounding growth.

Investments Are Better Than Wages

You can only earn money while you’re working. But your money can earn more money while you sleep… …if you put it to work.

Elimination is the Highest Form of Optimization

Elimination is the highest form of optimization. If your budget feels too complicated try eliminating some of the specificity and creating broader categories. You can get my budget course here to learn how to make a budget that’s easy and effortless instead of a chore: https://gumroad.com/a/494441587/OHljB

You Can Be Wealthy Without a Large Salary

You can be wealthy without a large salary because it’s not about how much you make, it’s about how much you keep after expenses. If you can invest more than 20% of your income each year, you’ll be achieving wealth faster than 70% of Americans. The more that you’re able to save/invest, the less you […]

Person A is Wealthier

Do you know why? Person A only has to work 4 months to have 1 month of freedom. Person B has to work 15.6 months. Increasing your savings automatically decreases your expenses (by percent) and reduces the amount of time you need to earn before you’re financially independent (wealthy).

Online Learning

“The list of things that cannot be learned from YouTube is approaching non-existent.” — Josh Newman (@Josh_M_Newman) Nov 20, 2021 It’s true. You can learn just about anything online.

Amount Invested > Investment Return

Getting a really high rate-of-return (how much your investment grows in value) is awesome. But if you invest small ($) but see big returns (%), you still sort of have a small amount ($). But when your investment account gets really big ($), even small wins (%) feel huge in dollar amounts ($). 40% gain […]

Inflation

Inflation is triggered by a rise in the cost of goods & services (stuff). It becomes a big problem when wages & income don’t rise at the same level. In the US, the Federal Reserve works to keep inflation between 2-4%. But if your paycheck isn’t growing by more than that each year you’re actually […]

To Achieve My Goal in 10 Years, What Do I Need To Do Today?

James Clear says it this way, “If I want to be on track to achieve X in 10 years, what do I need to do today?” Maybe you need to open an investment account, or transfer some money to it, or pick out an index fund, or research an investment, or pick up that book. […]

How Interest Rate Affects House Purchase

Despite what a buyer negotiates with a seller, interest rates have a huge impact on the total cost of a home. If you bought a home for $250,000 with 10% and 90% financed at 3% APR, you’d pay about $116,499 in interest to the lender over the life of the loan. If that interest rate […]

How Interest Rate Affects House Payment

The difference between a 3% and 4% mortgage on a $250,000 house (with 10% down) is an additional $126/mo. That 1% rate increase becomes 9% higher payment every month.

Stepping Over Dollars to Pick-Up Pennies

Stop stressing about the $5 coffee, and look for the $1,000 savings (insurance, rent, APR on loans, etc.) For a more detailed write-up check out this.

Payoff House or Invest

Should you payoff low interest debt or use that money to invest? If you have a $250k mortgage at 3% and you pay an extra $100 per month you’ll save $19k in interest over 30 years. If you instead invest $100 a month with a 7% rate of return, in 30 years you’ll have $118k. […]

Crypto Exposure

Should you buy BTC? Let’s look at an example: $10,000 invested in stocks (at their average return of 10%) would yield: $10,100 in 12 months. $9,000 invested in stocks with $1,000 invested in Bitcoin (at its average return of 200%) would yield: $11,900 in 12mo. You can nearly double your return with a 10% exposure. […]

Purchasing Power of $USD

Have you heard the term “inflation”? It describes how goods and services have increased in price over time. It’s why when Grandma was a little girl she could gat a malt at the soda shop for $0.05 but my smoothie costs $5. Since the early 1900’s the US dollar has lost the bulk of it’s […]

It Starts Small

Investing often feels lame because for the first while the returns are awful. But stick with it and eventually, given either enough time or capital (money), the returns get very exciting.

Wealth is Perspective

Wealth is a matter of perspective, and often a function of contentment. Did you know nearly half the world lives on less than $5.50/day; and 71% of the population lives on less than $10/day. You might be doing better than you thought.

Cost / Opportunity Cost of Netflix

If you want to get ahead do yourself a favor and cancel Netflix. Not because you need the $13, but because you need your time. Assuming you watch about 10hrs a week and you earn about $16/hr, the opportunity cost of binging Netflix is $640/month. You could do a lot with an extra $600+ each […]

Going Parabolic

This chart is the historical S&P 500 (blue line) laid over historical $BTC (candlesticks). Some people think BTC’s rise is too exponential to be safe. But the market is no stranger to exponential curves. Investing always carries some risk, but hopefully this helps you to see the full picture.

Averaging Down

“Averaging Down” is a strategy for when an investment (the market) is down, but you believe it will go back up. Imagine that last week you bought $XYZ stock for $60. Everyone is saying it’s going to rocket to the moon. But then it drops. And drops some more. You bought at $60. It’s now […]

5% More is 100% More

The difference between investing 5% of your paycheck and 10% of your paycheck is not just 5%… It’s a 100%. 10% is two times as much as 5%. You’ll reach your goal twice as fast by giving just another 5% of your paycheck.

Spending Reflects Your Values

“Money is a store of value.  The way you spend it reflects what you value.” -Chris B (Twitter) Your employer pays you because they value the work you do.Then you take your paycheck and spend it on things you value. If you don’t value something you don’t spend much on it. Every once in a […]

Can Money Buy Happiness?

No, it turns out money can not buy happiness. But, being broke can’t buy happiness either. Learn how to manage your money.

What Affects Your Credit Score

You can improve your score by: – Paying on time – Use less than 30% of your card limit – Don’t close out old accounts – Don’t open a bunch of accounts at once – Use different types of credit (cards, LOC, etc.)

What’s a Credit Score

Your Credit Score is a measure of how creditable banks and lenders think you are. 300 – 850 Very Bad – Excellent Check your score for free with Credit Karma https://creditkarma.com If you want to build wealth, having a good credit score is a great tool to use.

The Secret To Wealth

“The real secret to wealth is to spend less than you earn, invest the difference and do it regularly for not less than two decades.” — @dmuthuk (D.Muthukrishnan) Most people want a short-cut to wealth, but the secret is that there are no secrets. Some people try to sell a secret to becoming wealthy, but […]

Investing Time

“Everyone looks for a better way to invest money, few look for a better way to invest time.” — Jack Butcher @jackbutcher Obviously, it’s important to invest your money. But often we overlook one of our most precious resources: Our Time. If you want to become wealthy you need to invest your money and your […]

Dollar Cost Averaging

Dollar Cost Averaging is when you buy a stock at different times (monthly) to average a better price rather than trying to “time” the market. Experts with more experience than us have a hard time picking the low; so our best bet is to DCA. When you buy every month–regardless of price–to get an average […]

A Test of Discipline

“Wealth building is a test of discipline, not a test of intelligence.” –@APompliano Smart people with no discipline will know the best exercises, but never do them. They’ll know the best investment strategy, but never follow through. They’ll know how to create wealth, but never do it. Disciplined people, however, will do a less effective […]

Lifestyle Creep

“Lifestyle creep is the single greatest threat to your wealth”– @twindadmoney Lifestyle Creep is when your expenses rise every time (and to the extent) that your income rises. When you let your expenses increase because you got a raise you’re not really getting ahead, you’re not closer to financial independence or financial freedom. Instead, you […]

Desire

“Desire is a contract that you make with yourself to be unhappy until you get what you want.” @naval Having goals is great; but don’t withhold happiness from yourself until you achieve it. Find the balance of contentment and achievement. You can be happy with (or thankful for) what you own or have and still […]

Wealth & Peace

“No wealth can ever make a bad man at peace with himself.” -Plato Increasing your wealth won’t buy you more peace with yourself. Learning to love yourself and/or changing yourself doesn’t cost money.

Tax on Wages vs Capital Gains

In the United States, a single-filer earning $100,000/yr will be taxed at 24%. However, $100,000 worth of (long-term) investment earnings will be taxed at the “Capital Gains” rate of 15%. The US tax code incentivizes investing, and punishes employees.

Historical Trends

It’s easy to get focused on the day-to-day of market movements: up one day, down the next; bullish or bearish. But historically, the market (as measured by the S&P 500) has gone up and to the right. Despite three major pull-backs (a bubble, recession, and a pandemic) the market is up over 846% since ’92. […]

Make or Keep

It’s not about how much you make. It’s always about how much you keep. Learn to budget. Learn conscious spending. Learn to keep more.

Investment Return from Real Estate

There’s more to meets the eye when you’re looking at investments. And being able to look past the surface is what allows investors to think differently than the average person. For example, in real estate, the average person would look at a rental property and calculate that a $42,000 investment would only return about $1,025/yr […]

Asset Allocation

“You should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.” -Ray Dalio Asset Allocation, is how you divide your money and investments. We split it up so that our eggs aren’t all in one basket. Focus will create wealth, but diversification will protect it.

Formula For Freedom

“Freedom is wanting less than you can afford.” -Jack Butcher When you choose to desire less than your income can buy, you’re choosing contentment; and freedom from debt; and if you continue that path long enough, financial independence.

A Business or a Portfolio

Investing is a way to grow wealth over time—but building a business is the quickest way to wealth.  Building a business takes a lot more time each day, but builds wealth more quickly.  Investing (index funds in the stock market) takes years to grow wealth, but takes very little time day-to-day. If you have lots […]

The First $100k is The Hardest

Because of the effects of compounding, money grows quicker as the numbers get bigger. The first $100,000 is the hardest. And the same is true for your first $10,000.Or your first $1,000.Or your first $100. The first is always the hardest. But don’t let that stop you. You’ve done hard things before. It’s all down […]

2x Longer is 4x Greater

The nature of compounding is that it always favors the later years. So if you can invest for twice as long, you’ll get more than 4x the return! $1,000 invested at 10% for 15 years is $417.72$1,000 invested at 10% for 30 years is $1,744.94 Get started today–even if it’s a little amount. Because right […]

The Secrets to Wealth

The secret to building wealth is 10% basic money management and automated investments; the other 90% is the ability to stop spending your income on short-term desires. It’s simple; but not easy. H/T to The Wealth Dad. You can follow him on twitter.

Simple vs Compound Interest

Recently we discussed that not all loans are created equal because of the way the lender structures your payments. But loans can also differ in the way they charge interest. And this is bigger than loans–this is also a major key in how you earn interest. The big difference is whether the loan/investment uses Simple […]

Amortization Schedule

There’s a lot more to a loan than just the interest rate. Especially if you think you’ll pay it back early (which is usually a good idea). Aside from the rate and term, one of the things that you’ll run into is the Amortization Schedule (or sometimes called Amortization Table). And that’s a schedule of […]

The Power of Compounding

When thinking about legacy and building wealth–not just for yourself, but for your kids–compounding interest is the single biggest weapon. Take a look at that chart. The chart shows two kids who’s parents opened retirement accounts for them. One kid was 5, the other was 1. Both families invested $1,980/yr for 13 years (totaling $25,740). […]

Financial Freedom or Servitude?

Jack Butcher (@jackbutcher) had a quick little tweet the other day that simply said: Financial servitude:Earn, spend. Financial freedom:Earn, invest, earn, spend. And I can’t think of a more concise way to sum it up. However, for those of you that want something a little more long-form, here it is: When you live paycheck to […]

Savings Account

It was pointed out recently (by @BusinessFamous) that there might be a better place to put your money than a traditional savings account. Bank of America’s Savings Account has a yield of 0.01%For every $2,500 deposited, they’ll pay you $0.25/yr interest. Bank of America’s stock pays shareholders about 2.77% in dividends. For every $2,500 of […]

Purpose is a Prerequisite

“Purpose is a prerequisite to progress.” –Steve Adcock Without a purpose to your efforts you aren’t making progress, you’re just spinning your wheels. Think of it like a swimmer. If you jump in a pool without a purpose, you aren’t swimming–you’re splashing. However, someone who decides to swim laps for practice or fitness, has purpose. […]

“Where” vs “How” to Invest

“Where should I invest?” is a short-sighted question that typically get’s an answer that’s only good for one investment. “How should I invest?” is a much better question that opens up a lifetime of investing.

Automate Your Money

As soon as I started getting serious about my money I started to automate things like retirement contributions, savings transfers, brokerage funding and investments. The more serious I get, the more I automate. Successful people rely on systems, not motivation; so make it automatic so you don’t even have to think about reaching your goals–it […]

Power of Compounding

You only have to contribute 14% of the total of your retirement account when you let compounding interest work in your advantage. That $300/mo invested for 40 years (at 8%) becomes over $1 million, but it only took $144,000 of your money to do it. That’s why Einstein called compounding interest the eighth wonder of […]

Scaling Your Income

Scaling your income is limited when it’s tied to the hours in a day. In order to truly scale your income in an exponential way you need to separate your earnings from the hours you work. Even if a client will pay you $1,000/hr, you’d still have to exchange your hours for those dollars and […]

Earn With Your Mind

Earn with your Mind, Not with your Time. Most of us work in an environment where we exchange time for money; hours for dollars. Whether it’s a first job that pays by the hour, or an office job that pays a nice salary but expects you there 9-5, it’s common to exchange hours for dollars. […]

Wealth Myth vs Fact

Wealth Building Myth: You must have a high income to build wealth. Wealth Building Fact: It’s not about your income, but rather what you do with your money. $500 a month invested (at 8%) for 35 years is $1,146,940. For the last seven years my salary has been less than $50k/yr but my net-worth has […]

Use Money to Make Money

You go to work, and you collect a paycheck. Then you choose to either invest or spend your money. If you invest it, you begin the process of building wealth. The money you invest then goes off to make more money. But if you choose to spend all the money you make, you’ll find yourself […]

10x Longer is not 10x Greater

Many would assume that if you let an investment sit (compounding annually at 10%) for 10x longer, it would produce 10x more. But those many people would be wrong. 10x longer is NOT 10x greater. It’s 117x! Time is the miracle worker of compounded interest. More time creates vastly more wealth. So more important than […]

Teach Others

I don’t claim to know everything, but I’ve learned a lot. And a big part of learning is teaching. We remember more when we teach others. “We remember: 10% of what we read. 20% of what we hear. 30% of what we see. 50% of what we see and hear. 70% of what we discuss […]

Motion vs Action

Don’t confuse motion and action. Motion:– Think about a bank you’d like to work with– Shop around for a brokerage account– Follow someone who invests on Twitter– Feel bad for over-spending Action:– Make a transfer to your savings account– Fund your brokerage account– Take action on advice you saw on twitter– Review your monthly budget […]

Simple Solutions – Big Results

There is usually a simple solution that will deliver 90% of the results you want. The extra bit of effort can be worthwhile, but it’s not usually worthwhile. Save that extra effort for the stuff that really, truly matters. When it comes to investing, keep it simple, and keep going. Don’t get caught up in […]

Exponential Gains

Exponential gains are driven by incremental behavior. Keep at it. Keep going. Keep grinding. Even when it feels like you aren’t making a huge difference, these small small consistencies create compounded results.

Priorities

The difference between successful people and most other people is that successful people made it top priority. But others merely said they’d get to it “someday”. If you’ve got financial goals, don’t put it off until someday. Make it a top priority, and don’t got to bed tonight until you’ve taken your next step.

Two Ways to Get Wealthier

There are essentially only two ways to get wealthier: Earn More Spend Less It’s simple, but not always easy. And if you want to build wealth really fast, do both.

Security/Risk Cross Section

Finances are personal because they represent the cross-section of our risk tolerance and our objectives. Some people want to reduce debt and increase their security. But that goal will often draw you away from high-risk investments that involve leverage. Some people want to increase their income with a side hustle or a second job, while […]

Car Loan vs Index Fund

If you finance a car every five years at $395/mo, you’re always carrying a debt and never getting ahead. If you took $395/mo and invested it in a low-fee index fund (with an average return of 8%) the account would grow to: 10 years: $72,263 20 years: $232,662 30 years: $588,691 Financing a car prevents […]

We’ve just begun working on a “budget quiz” that makes customizing your budget fun.

It’s the sort of fun you’d expect if you ‘shipped Buzzfeed & The Wall Street Journal

Do you want to learn how to stop working for money and make money work for you? Subscribe to the newsletter.

Don't worry, we won't ever spam you or sell your info.