Financial Samurai

President Obama considers single people making over $200,000 to be rich.  He has specifically called for raising taxes on singles making over $200,000 and couples making $250,000 every year he’s been office.  Yet, he’s been unable to pass any tax increases because I don’t believe most people agree with him that $200,000 for singles and $250,000 for couples is rich.  If most people agreed, higher taxes would pass!

There are two aspects of monetary wealth we can focus on: Income and Capital.  Some make a lot of income, but have only a little amount of capital since they are either starting off in their careers, or haven’t saved and invested an appropriate amount.  That’s not going to happen to you because you read Financial Samurai and will follow my savings guide to ensure capital accumulation.

Meanwhile, there are those with a tremendous amount of Capital, with little income given they may have inherited their wealth but have no income generating skills.  Capital heavy people may have invested skillfully over the years, built great companies, or were incredibly disciplined in their savings.  There are many different types of folks in the Capital heavy category.  It’s not a bad place to be at all.

Ideally, it’s best to have both high income and a large capital base.  This is my goal, and therefore my goal for all of you as well.  In this post, we’ll focus on the income side of the equation and what to strive for just in case we don’t have a trust fund from mom and dad.

HOW MUCH INCOME DO YOU NEED TO BE CONSIDERED RICH? Read more…

$180,000 by age 30, $500,000 by age 40, $1 million by age 50, and $2 million by age 60. These are the rough estimates for what I think everybody needs to have in their 401Ks to have a reasonable attempt at a comfortable retirement. If you read the comments from my “401K amount by age” article, you will notice that those in their mid-30s and below tend to disagree with these amounts, while those older generally agree, verify, and accept.

I don’t know why younger folks aren’t willing to follow along. It’s often times just rebel and justify why they aren’t saving.  ”Live life!“, they say.  True, but who says you can’t live life while saving?  The easiest way to learn, is to listen to an older person who has gone through what you will go through. Perhaps it’s immaturity, or the way things are where every generation needs to question the next generation and the status quo.

There’s really no mystery to money. The more you have, the more you can make.  It’s all about building the NUT large enough so that when you make a fortuitous 10% return, you’re pulling in an extra $50,000-$100,000 on your $500,000-$1 million portfolio.  Saying you doubled your returns from $10,000 to $20,000 due to contributions is fine, but it’s really chump change and misleading.  Build the nut, so that you can have real returns.

If you aren’t on retirement track based on my 401k age chart and disagree with my figures, just do the math YOURSELF and see whether you’ve saved enough to retire on. I don’t think you’re going to like the results.

There’s one question that kept coming up over and over again, and that’s, “How can I save so much, if I don’t make so much?” It’s a fair question that needs addressing. One commenter mentioned my table must be of “California Currency”, which made me chuckle. The problem of not making enough and therefore not being able to save enough is an honest problem which I’d like to address via a change in mindset and a chart. Read more…

The older I get, the more I realize how necessary it is for people first starting out to find a mentor.  A mentor is there to guide you through all the landmines in a career or start-up venture.  In fact, I encourage everyone to get a mentor with every serious endeavor they are about to undertake.

“You are special.  You deserve the world and can do anything.“  These words do more damage to young people than any insult.  If all you hear growing up is how special you are, you’re going to develop the biggest entitlement attitude ever!  You’re going to think you walk on water and your shit don’t stink.

Is there any wonder why the most typical complaint by the 99% protest movement is not getting a dream job after going tens of thousands of dollars in debt?  What is wrong with picking crops and making hamburgers? College graduates are told to go to school, don’t be afraid to take out massive debt because their lives will be great since they are so special.  As a result, they aren’t willing to put in the hours to get straight A’s, work unpaid internships every summer to gain experience, and develop technical skills beyond the classroom.  Being told they are special DOOMS them.

This is why growing up in a free and developed country like the United States is pretty easy, ironically.  If you don’t have the “I’m special” attitude, then you will never be delusional.  And since so many of your peers think they are special, they aren’t willing to put the extra time and effort into whatever they are doing.  Just realizing you are just another nobody will put you far ahead in this world.

In “How To Succeed The Dumb And Easy Way” on Untemplater.com, I try and knock some sense into folks who need a nice kick in the pants.  I love the stories and interviews there because it shows how people can live differently.  The Untemplaters make it look easy, but that’s what skilled people do.  Feel free to share your thoughts here or there!

Do you believe you’re special?

Photo: Hissing Stray Baby Cat, Venice, 2011.  Sam.  Can you guess the symbolism?

Best,

Sam

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Back in 2001 the economy was imploding much like it was in 2008-2009.  I was worried about losing my job and I asked my mentor for advice.  He told me something so important that it has guided my approach to doing everything ever since.

David took me to a conference room and sat me down and said, “If you become the best at what you do, you will NEVER have to worry about getting fired.”

He went on to say, “The bottom 10% of people always get fired even during good times.  Look at Jack Welch from General Electric.  Even in the brightest of good times, he canned the bottom 10% .  There’s no room for underperformers, underachievers, and people who blame the world for their own failures.  You are in control of your career and your finances.  Stop worrying and start being invaluable.”

THE CHANGE IN MINDSET Read more…

Every now and again, people surprise me.  One of the greatest feelings is when you want to laugh and cry at the same time.  For years I’ve had the most wonderful tenant.  Timothy, was always courteous and kind, and never more than 10 days late on rent.  When he told me in January of his plans to move back East, he did so in a hand written letter that was so kind.

Saddened by his impending departure, I wrote a post asking a basic question, “Is It Better to Rent To Males or Females?” to help deal with the preparation ahead.  Most of you mentioned you prefer females, however all of the past five tenants have been males.

WHO COMES HITHER? Read more…

I was driving home from grocery shopping one day when I saw this little boy in the picture holding a clipboard and smiling.  It was your typical, chilly 58 degree San Francisco day and the boy stood so patiently in his parka, saying “hello” to every passerby.  His presence filled my heart and I zipped Moose around the corner to park so I could see what he was selling.  Whatever he was selling, I was going to buy!

Little Henry was selling $1 raffle tickets to support his school choir so they could take a trip down to Los Angeles and perform.  Oh my goodness Henry, you are a star!  I pulled out my wallet and gave him my only bill and told him I’ll take 10.  His smile got even bigger as he gave me the clipboard and asked me to fill out my contact info.

“Thank you Mr!“, Henry said gleefully.  I smiled back at him asking if I could take his picture.  Of course he said yes to one of his best customers.

Henry, it is I who thanks you.  You’ve given me perhaps years of mental smiles and motivation that I so dearly need all the time.  Why do I love to blog so much?  It’s partly because of memories like this where I can capture, record, and come back to any time in the future.

THE DIFFERENCE MAKER Read more…

I want you guys to visualize a world where there is no media schadenfreude.  Imagine never reading stories debasing others out of delight in order to make the writer and you feel better about yourself.  My how nice the world would be!

The reason why there are so many negative articles out there is simply because there are a lot more people making a lot more money and doing much greater things than one realizes.  If you can’t make it on your own, it’s easier to just try and bring others down.  Don’t do that!

You know from a previous article that $60,000 to $75,000 is such a silly low range for what researchers and the media think is the ideal income level where happiness rises no more.  It’s so silly because that is clearly not the case if you ask anybody who has ever made more.  Is it a coincidence that researchers and reporters make on average not much more than $75,000?  Of course not and therefore it helps makes them feel better about their wages.  It’s perfectly rational.

THE SECRET MOVEMENT Read more…

On Sunday, January 16th Yakezie.com received around 6,300 visitors thanks to Little House’s (Yakezie Scholarship Committee Member) efforts to reach out to other organizations online.  That organization was Fastweb.com, a site that helps students find monetary support for education around the web.

Not expecting such a surge in traffic, immediately things started going haywire.  My registration e-mail notifications started flooding in, and then personal e-mails started coming in asking why they didn’t get an e-mail confirmation to register to the allow them to apply.  Frantically, I tried addressing all problems over comments, Twitter, and e-mail myself as Chris was not near a computer.  When Chris returned, he did some testing and things seemed to work, but because of the sheer flood of visitors, things locked up.

Our e-mail system (Google) supposedly has a ~200 limit per day on sending e-mail notifications for new registrants.  After about 1:30pm on Sunday, the 200 limit was quickly hit but the registrants kept coming in.  As a result, any eager student who was looking to register and compete could not.  Oh my, how bad I felt for them.

MY FEAR AND GUILT Read more…