A rant for your future: set yourself up for long-term (financial) success

Nocturnae

Instagram Legend
Apr 12, 2017
935
1,079
93
33
Belgium
Hello guys,

I wanted to create this thread (although it feels more like a blog post :p ) for a while now. I just feel like I needed to rant about you for a bit, hand out some “fatherly” advice so to say. Everything in this thread is written out of love for humankind and my hopes are that it will guide everybody to a long and successful (and stable) life.

Why are you writing this?

Well, in a few months I’ll be 30 (which is ancient compared to a lot of you guys/girls here). Having two kids I’m really happy that I obtained the knowledge I will share with you in this post when I did. This has allowed me to build a semi-certain financial future for our family (if that USA Prez dumps us in a nuclear war, nothing will be certain…). I haven’t made it yet, but I’m in a good place.

Instagram has been a success for a lot of people, giving them access to a new found source of money, fame and awesomeness. However, a lot of people don’t know how to manage that money properly in order to obtain long-term success. Sure it’s attractive to spend it all on a new pc, smartphone, car, girlfriend,... but the harsh truth is, those things are relatively meaningless in the long term (apart from the girlfriend of course).

If you really want long-term (financial) success, you will have to prepare yourself for it, get in the right mindset. Here are a few pointers I would like to give you. It’s not super structured but it’s a rant. So f* structure ;-).

Should you have any questions about these topics whatsoever, please ask away. I’ll gladly reply.

So I’m earning a lot money (with this IG thing), what do I do?

First things first, here is what I would personally do (and did in the past):

1. Pay off debt first

Although debt should be avoided at any time, it is not always possible. If you are gaining a lot of money now, please pay of debt first. Start with the debt with the highest interest rates and snowball down to the smaller ones.

Paying off debt will give you more financial freedom, and more breathing room when times are harsh (for instance, if the IG money well dries up).

In my case my IG management business paid off an outstanding car loan I had, that freed up €300 in my monthly budget which now goes to investing.

2. Build a rainy day fund

New found wealth is awesome! It gets you pumped up and dreaming of all the things you can buy with it. That shiny new iphone X sure looks amazing! But my advice to you is: put some money away for a rainy day.

Make sure you have some money saved (and don’t ever touch it!) in case of a ‘disaster’. Imagine you get hit by a car, or your house burns to the ground,...
Having a rainy day fund will make sure you can at least cover a part of the expenses yourself. Sure if you house burns down you’ll be devastated. But in this case, chances are your insurance will cover most of the costs. Having a rainy day fund however will help you to find a new (temporary) roof over your head and will make sure you can buy food, clothes (all the basic necessities) without going into debt (too much).

My rule of thumb is: keep 3-6 months of your monthly expenses aside.

3. Invest in yourself

The best investment, is one in yourself. Put some money towards learning new skills. This can mean spending money on courses, books, trainings,... The more skills you learn, the better you’ll be at everything you do.

Educate yourself in these areas: finances (learn to manage your money), psychology, marketing, business, health & nutrition. A combination of skills in these areas is guaranteed to put you up for long term success!
Get a healthy body & mind, become a powerful social being (not saying you should force yourself to be extroverted, I am one of the most introverted beings in my surroundings) that understands where emotions and reactions come from, and learn to make smart decisions (whether it be in finance, business,...).

Take it from Charlie Munger, his investment philosophy uses skills learned from 40+ industries and models. And looking at Berkshire Hathaway you can’t said that hasn’t paid off. ;-)

4. Invest in other business ventures

It doesn’t need any confirmation that Instagram is a hot business, RIGHT NOW. But chances are that in 5 years it will have become irrelevant. Sure facebook will put all its money and power behind it to make sure it sustains over the long term, but the current methods we are using to monetize it (whether that is CPA, selling accounts, doing mgmt,...) will dry up eventually.

That’s why you need to invest in other business ventures. I always put a percentage of my earnings towards other business ventures. This can be :
  • Running an ecommerce store
  • Venturing in another social platform
  • Building websites and selling them
  • Starting an advertising business
  • Creating and selling guides, tutorials, books to sell

Spend some money trying some business ideas. There is a high possibility that the next idea you try, will be even more successful than your IG adventures! I’m talking millionaire potential here ;).

What I’m saying comes down to this: don’t put all your eggs in one basket. If the basket falls over, you’re done.

5. Invest in wealth building vehicles

Smart people invest in the right things. You can categorize almost everything material into 2 areas:
  • Assets
  • Liabilities

Assets will make you money (e.g. rental property, stocks, business ventures,...), liabilities will cost you money (e.g. car maintenance).

If you still have money left after all of the above things, invest them into assets. My preferred assets are stocks. Why stocks, because of the power of compounded interest (I suggest you look that up in Google, but I’ll say this: Einstein called it the 8th wonder of the world for a good reason). I also don’t have the time nor the knowledge to invest into real estate, but that’s also a good area to own assets in.

Although I do some rigorous market research into a handful of companies and cherry pick my investments (in hopes of beating the market), an investment into regular index funds (ETF) will set you up for long term (financial) success without breaking a sweat or spending a lot of time doing it!
One of my favorite index funds is: VGT The Vanguard Information Technology ETF.

Here’s why VGT (Vanguards Information Technology ETF) is one of my favorites:
  • Average return of VGT since 2004: 9.27%
  • They pay a dividend (which means you will receive a few $ for every stock you own at certain intervals)
  • The expense ratio is small (0.10%) as compared to other tech funds (1.40%). That’s less money paid to the manager, more money kept in your portfolio…
  • It’s IT, and that’s only going to grow as we grow even more digital each day

Now let’s create a mathematical example: say we invest $50 ($600 a year) a month for 35 years (which in my case would be close to my retirement) in the above mentioned VGT:
$50/month
Average yearly return: 9.27%
Duration: 35 years

That’s $21 000 invested. Investing that in VT will get you (at the current return rate): $150 364.02. So that’s a “profit” of +-$130 000 without breaking a sweat and by just depositing money into a fund. I don’t know about you, but that sure does sound yummy!

Now let’s say you would invest $100 a month ($1200 a year), at a more conservative rate of 7% (that’s about what the S&P500 has done over its existence, adjusted with inflation) for the same 35 year period: that $42 000 transforms into $177 469.15. Again, effortless profit.

Sure, the more you invest, the better it will be. But one piece of advice: don’t monitor your investments daily. We humans are scaredy pants and we get greedy. We are panicking when the market is plummeting (while that’s the best time to buy) and get overly excited and greedy when a stock jumps up. With my investments I only do quarterly check-ups. I don’t care about short term panicking, I’m in this for the long term (+35 years).

I’m sorry

This has become a long post with a lot of financial blabber. I’m hoping I didn’t waste your time and that you feel like you’ve learned something from this. Should you have any questions, please let me know and I’ll try to responds as good as I can!

TL;DR: I’ll leave you with a recap in one sentence: “leverage short term gains for long term success”.
 

BlnInsta

Member
Jul 9, 2017
23
2
3
33
Great post! Im making some expendable income with my business ventures aswell and startet investing in gold and crypto (over stocks because crypto and gold just interest me more and I had an easier time learning about it). So if you have soe pointers to material to read for a stock beginner (and I mean beginner beginner) like myself, it would be much appreciated!

Cheers!
 

incomesurfer

Instagram Legend
Frequent Contributor
Jan 28, 2017
255
54
28
WWW
nice one mate, I'm planning to invest in stock market soon.

Here are some basic accounts/investment every person must have,

- Savings
- Emergency fund
- Educational fund
- Health fund/insurance
- 401k plan or something the same in your country for retirement
- Investments (stocks, housing, car, mutual funds)

good luck to all
 

Kurtax

Instagram Legend
Feb 13, 2017
404
266
63
Europe
This is an incredible post, I don't know how I only saw it now.
It's funny how this resonates so well with me as it has largely been the message my parents have always been passing on to me.
 
  • Like
Reactions: Nocturnae

Nocturnae

Instagram Legend
Apr 12, 2017
935
1,079
93
33
Belgium
This is an incredible post, I don't know how I only saw it now.
It's funny how this resonates so well with me as it has largely been the message my parents have always been passing on to me.
Well, i am a parent xD so I'm probably already handing out fatherly advice xD
 
  • Like
Reactions: Kurtax

FelixK

Elite Member
BANNED
Nov 19, 2017
164
67
28
20
Utrecht, Netherlands
grown-marketing.com
@Nocturnae your post really got me thinking and I think I am ready to actually start making money without working small jobs. However you must know how hard it is, as a fellow Dutchie, to legally set up a small business if you are under 18 (which I am). Is there anything I can do right now for the long term?
 

Nocturnae

Instagram Legend
Apr 12, 2017
935
1,079
93
33
Belgium
It depends on how old you actually are @Scarko, but there are serious dangers here in working off-the-record. I don’t know about Holland, but at least In Belgium the government is chasing down people who make (serious) money without paying much taxes. That said, freelance sites like fiverr, upwork are often overlooked. And if you are being paid with Paypal and don’t transfer much of that money to your personal bank acc. You should be okay ish.

What do you plan on doing?
 

FelixK

Elite Member
BANNED
Nov 19, 2017
164
67
28
20
Utrecht, Netherlands
grown-marketing.com
It depends on how old you actually are @Scarko, but there are serious dangers here in working off-the-record. I don’t know about Holland, but at least In Belgium the government is chasing down people who make (serious) money without paying much taxes. That said, freelance sites like fiverr, upwork are often overlooked. And if you are being paid with Paypal and don’t transfer much of that money to your personal bank acc. You should be okay ish.

What do you plan on doing?
Currently I am planning to grow instagram accounts and sell them for paypal/bitcoin, and once I get 18 I want to start my own webshops.
 

Nocturnae

Instagram Legend
Apr 12, 2017
935
1,079
93
33
Belgium
Currently I am planning to grow instagram accounts and sell them for paypal/bitcoin, and once I get 18 I want to start my own webshops.
You wont need an official business then ;) since you can’t ‘legally’ sell accounts. You will probably be doing the majority of your transactions on forums so eh :p
 

Chris Chandler

New Member
Nov 26, 2017
1
0
1
48
Awesome thread! Heck even if you can afford $50/mo starting at age 25 investing in a moderately successful mutual fund, you are going to make bank at retirement. Reinvest dividents. Compounding interest is a very powerful concept. Use a Roth IRA. I wished I had done it. I started later on and I am about 7 years in and I am amazed at the results. I only monitor my account quarterly as well. Let it grow.

Hello guys,

I wanted to create this thread (although it feels more like a blog post :p ) for a while now. I just feel like I needed to rant about you for a bit, hand out some “fatherly” advice so to say. Everything in this thread is written out of love for humankind and my hopes are that it will guide everybody to a long and successful (and stable) life.

Why are you writing this?

Well, in a few months I’ll be 30 (which is ancient compared to a lot of you guys/girls here). Having two kids I’m really happy that I obtained the knowledge I will share with you in this post when I did. This has allowed me to build a semi-certain financial future for our family (if that USA Prez dumps us in a nuclear war, nothing will be certain…). I haven’t made it yet, but I’m in a good place.

Instagram has been a success for a lot of people, giving them access to a new found source of money, fame and awesomeness. However, a lot of people don’t know how to manage that money properly in order to obtain long-term success. Sure it’s attractive to spend it all on a new pc, smartphone, car, girlfriend,... but the harsh truth is, those things are relatively meaningless in the long term (apart from the girlfriend of course).

If you really want long-term (financial) success, you will have to prepare yourself for it, get in the right mindset. Here are a few pointers I would like to give you. It’s not super structured but it’s a rant. So f* structure ;-).

Should you have any questions about these topics whatsoever, please ask away. I’ll gladly reply.

So I’m earning a lot money (with this IG thing), what do I do?

First things first, here is what I would personally do (and did in the past):

1. Pay off debt first

Although debt should be avoided at any time, it is not always possible. If you are gaining a lot of money now, please pay of debt first. Start with the debt with the highest interest rates and snowball down to the smaller ones.

Paying off debt will give you more financial freedom, and more breathing room when times are harsh (for instance, if the IG money well dries up).

In my case my IG management business paid off an outstanding car loan I had, that freed up €300 in my monthly budget which now goes to investing.

2. Build a rainy day fund

New found wealth is awesome! It gets you pumped up and dreaming of all the things you can buy with it. That shiny new iphone X sure looks amazing! But my advice to you is: put some money away for a rainy day.

Make sure you have some money saved (and don’t ever touch it!) in case of a ‘disaster’. Imagine you get hit by a car, or your house burns to the ground,...
Having a rainy day fund will make sure you can at least cover a part of the expenses yourself. Sure if you house burns down you’ll be devastated. But in this case, chances are your insurance will cover most of the costs. Having a rainy day fund however will help you to find a new (temporary) roof over your head and will make sure you can buy food, clothes (all the basic necessities) without going into debt (too much).

My rule of thumb is: keep 3-6 months of your monthly expenses aside.

3. Invest in yourself

The best investment, is one in yourself. Put some money towards learning new skills. This can mean spending money on courses, books, trainings,... The more skills you learn, the better you’ll be at everything you do.

Educate yourself in these areas: finances (learn to manage your money), psychology, marketing, business, health & nutrition. A combination of skills in these areas is guaranteed to put you up for long term success!
Get a healthy body & mind, become a powerful social being (not saying you should force yourself to be extroverted, I am one of the most introverted beings in my surroundings) that understands where emotions and reactions come from, and learn to make smart decisions (whether it be in finance, business,...).

Take it from Charlie Munger, his investment philosophy uses skills learned from 40+ industries and models. And looking at Berkshire Hathaway you can’t said that hasn’t paid off. ;-)

4. Invest in other business ventures

It doesn’t need any confirmation that Instagram is a hot business, RIGHT NOW. But chances are that in 5 years it will have become irrelevant. Sure facebook will put all its money and power behind it to make sure it sustains over the long term, but the current methods we are using to monetize it (whether that is CPA, selling accounts, doing mgmt,...) will dry up eventually.

That’s why you need to invest in other business ventures. I always put a percentage of my earnings towards other business ventures. This can be :
  • Running an ecommerce store
  • Venturing in another social platform
  • Building websites and selling them
  • Starting an advertising business
  • Creating and selling guides, tutorials, books to sell

Spend some money trying some business ideas. There is a high possibility that the next idea you try, will be even more successful than your IG adventures! I’m talking millionaire potential here ;).

What I’m saying comes down to this: don’t put all your eggs in one basket. If the basket falls over, you’re done.

5. Invest in wealth building vehicles

Smart people invest in the right things. You can categorize almost everything material into 2 areas:
  • Assets
  • Liabilities

Assets will make you money (e.g. rental property, stocks, business ventures,...), liabilities will cost you money (e.g. car maintenance).

If you still have money left after all of the above things, invest them into assets. My preferred assets are stocks. Why stocks, because of the power of compounded interest (I suggest you look that up in Google, but I’ll say this: Einstein called it the 8th wonder of the world for a good reason). I also don’t have the time nor the knowledge to invest into real estate, but that’s also a good area to own assets in.

Although I do some rigorous market research into a handful of companies and cherry pick my investments (in hopes of beating the market), an investment into regular index funds (ETF) will set you up for long term (financial) success without breaking a sweat or spending a lot of time doing it!
One of my favorite index funds is: VGT The Vanguard Information Technology ETF.

Here’s why VGT (Vanguards Information Technology ETF) is one of my favorites:
  • Average return of VGT since 2004: 9.27%
  • They pay a dividend (which means you will receive a few $ for every stock you own at certain intervals)
  • The expense ratio is small (0.10%) as compared to other tech funds (1.40%). That’s less money paid to the manager, more money kept in your portfolio…
  • It’s IT, and that’s only going to grow as we grow even more digital each day

Now let’s create a mathematical example: say we invest $50 ($600 a year) a month for 35 years (which in my case would be close to my retirement) in the above mentioned VGT:
$50/month
Average yearly return: 9.27%
Duration: 35 years

That’s $21 000 invested. Investing that in VT will get you (at the current return rate): $150 364.02. So that’s a “profit” of +-$130 000 without breaking a sweat and by just depositing money into a fund. I don’t know about you, but that sure does sound yummy!

Now let’s say you would invest $100 a month ($1200 a year), at a more conservative rate of 7% (that’s about what the S&P500 has done over its existence, adjusted with inflation) for the same 35 year period: that $42 000 transforms into $177 469.15. Again, effortless profit.

Sure, the more you invest, the better it will be. But one piece of advice: don’t monitor your investments daily. We humans are scaredy pants and we get greedy. We are panicking when the market is plummeting (while that’s the best time to buy) and get overly excited and greedy when a stock jumps up. With my investments I only do quarterly check-ups. I don’t care about short term panicking, I’m in this for the long term (+35 years).

I’m sorry

This has become a long post with a lot of financial blabber. I’m hoping I didn’t waste your time and that you feel like you’ve learned something from this. Should you have any questions, please let me know and I’ll try to responds as good as I can!

TL;DR: I’ll leave you with a recap in one sentence: “leverage short term gains for long term success”.