Level up: Investing at a low level wont make you rich. 

The investment club and all other affiliated entities have been growing like wild fire.  I have delegated membership intake to the lovely Candace but I still get emails from people who find a way to contact me directly. I love it. I thank you all for your enthusiasm.

Part of this club is also managing expectations. This isn’t just expectations as they relate to the club but expectations as they relate to investing period. The club is part about what we do inside but more so about the skills you learn to invest on your own outside.  First, I have to give you some context.

When I first started my career as a licensed financial adviser with Edward Jones, after passing the series 7, we were then tasked with going out and generating commission. The best way to generate big commission is to bring in big accounts. Therefore, I spent most of my time going after five and six figure IRA rollovers because this presented the most optimal opportunity. This ruled out a lot of smaller investors.

After leaving Edward Jones I worked at Chase Private Client.  As a Private Client banker it was my job to bring in clients who had over $250,000 in assets. That is what I did. I spent time going after people who had six figure savings accounts or large pensions that needed to be put to better use. Again, this ruled out smaller investors.

My problem was the the minimums required to invest with a firm like Edward Jones or CPC made getting in the game impossible for people not sitting on a bunch of money.

I realized that I wasn’t able to help the little guy.  This is what sparked the idea for the investment club for stocks and the investment club for real estate. 

When I created the club I wanted to make it easy to succeed and hard to fail. I wanted everyone to have a slice of the pie and I didn’t want to create any artificial barriers.  This is what brought on the $100 investment club and then the $25 light club.  This is also what allows people to contribute over time to save money and get to the $1000 for our real estate deals.

The key though is that $25 wont make you rich.  You can’t invest $25 a month and expect to get to financial freedom.  Investing is saving, it is a way to trick yourself into putting money aside. The return you get is icing. In order to attain financial freedom (aka wealth) you HAVE to be investing around 50% of your monthly income and putting it to work. People in the  FI community do this.  I would assume that $25 is about 1% of most peoples income.  You are never going to make it acting a that low level while you LIVE at a high level #gotthemjaysthoug.

Furthermore, $1000 wont make you rich. You can get the biggest return on a small amount and it will still be a small amount. A 25% cash on cash or a 25% ROI on $1000 is just $250. Therefore, don’t expect to invest a grand and get a  huge check at the end of the  year. You have to stack more and more wood on the fire.  If you make 40k and the most you invested was 1k, just accept that you aren’t doing enough and focus on leveling up.

One thing I talk to my mom about is how our money is transferable.  Many people say they want things but then go blow the money on things that are a direct contradiction to what they say want. If you want take a trip to Hawaii but you are allowing other things to come in place to that trip (other small trips, family outings, spur of the moment shopping), you won’t take the trip, but you had the money. You spent it on purses, shoes and dinners. You had the money though.  Likewise you have the money to invest at a high level if you are willing to forgo certain things.

Stocks and real estate aren’t lottery tickets. Its not a quick flip. Its not a little for a lot type deal. Most of the time wealth is made by betting big on the right thing and earning a little on that big. The people who get eaten alive are the something for nothing people who hope to make a quick buck or who are chasing high ROIs.  High risk is high reward but its also high risk of loss. High risk, high risk of loss.

You have to make a decision, invest or consume.  Most of the $25 people are consuming and then throwing their future the little scraps they have left after they have lived high on the hog. They treat it like a one dollar lottery ticket when it should be treated, when done right, as something you do big, the right way.  High ROI chasing is bad for your wealth. 

So I want to encourage you that if you get in at $25 don’t stay at $25. Don’t invest $25 and expect it to explode into easy money. There is no easy money, not even as a business owner and investor.

Investing takes commitment and that commitment is the frugality and deferred gratification that I always speak on. If you want to succeed as an investor you need to be more excited about investing than you are about consuming. It can’t work any other way. If you are investing to consume you will lose. If you are investing for the play play you will lose. Commit to the process and going all in and the play play will come. Don’t tip your investment account. Go all in on your investment account and then pull tips out. Wealthy people invest and spend whats left. Be like the wealthy.

If you are interested in joining any of our clubs and making a difference in your community, email info@capitaltodd.com if you haven’t yet done your taxes and haven’t created an LLC to organize your hustle, do so now! Email charles@capitaltodd.com today!

Be great and invest well!

Todd Millionaire

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