Chapter Thirteen - Your Life And Economical Stability

Which of these two options would you rather do?

-Spend your hard earned check on consuming and buying?

-Save and invest your hard earned check?

While both are beneficial in multiple ways, focusing on one TOO much can be detrimental for your own sanity.

78% of Americans live paycheck to paycheck.

With so much knowledge on finances and economical structuring out there for people to educate themselves on, this is a depressing reality for most.

Being that I have a diverse audience from all across the world, I hope to touch on simple fundamentals that could help anyone living in the Americas the same as someone living in Europe, Asia, etc.

I’ve been at the lowest rung of the social ladder. I was that American struggling from paycheck to paycheck.

I didn’t become a multi-millionaire, start a Fortune 500 company, or create some next age revolutionary technology that propelled me from rags to riches.

I merely simplified my own finances. In doing so, I’ve gone from living in the streets to renting a decent apartment, with additional sources of income growing for the future.

In describing a simplified financial structure, I hope to improve the economies of the typical everyday worker. People who head out and grind it out, struggling day in and day out. This is something I personally needed to hear but had to figure out the hard way.

Before we can spend, we have to earn and save. Makes sense right?

Earning and Saving will help build a defense for crisis and catastrophes. Credit cards DO NOT count.

I have to reiterate. How can you buy a $500 car upgrade if you don’t even have $1,000 in case your car breaks down?

The fundamental is simple: Before you can grow, you must have a stable foundation.

You should Earn and Save for:

-Car Breakdowns and Repairs

Your car needs an expensive part? You’ve got $1,000 saved just for it. Bonus if you know a thing or two about auto repairs.

-Medical Emergencies

This category is super important. Having a quick reaction to a life threatening event is critical. The same $1,000 would be helpful to use in this situation.

-Home Emergencies

Toilet broke down? Maybe you’re the victim of a home burglary? Having some sort of plan and an emergency budget would help tremendously. This is another use of $1,000.

-Employment Emergencies

Got laid off? What if you get fired? Having at least some funds to provide food and shelter for a little while will help you as you get back on your feet.

-Personal Security and Family Security

To prevent burglaries and health crises, you could allocate some funds to video surveillance perhaps. Some funds could go to home defense like pepper spray, tasers or even firearms.

As a general rule, I advise matching your Emergency Funds to the TOTAL of the highest credit available in your biggest credit card account.

You can never be too unprepared for a crisis, so the more funds you have is for the best.

Additionally, you can choose to store these funds in an account that slowly grows. I wouldn’t know what to suggest generally as every situation and area is different. I do suggest you do your homework meticulously when searching for the following institutions.

Growth Accounts To Save In:

-Credit Unions (Savings)

These institutions are operated by the community and owned by an elected board. They serve to help communities grow, therefore offering favorable rates to store your money in them.

-Everyday Bank Accounts
These can include big name banks you see everyday. These are for profit generally, so the returns for your savings account will be minimal.

-Mutual Funds

Although these accounts can be risky to put your money in, it could potentially grow a lot over time. It is worth mentioning that this should only be reserved for the economically stable households.

Once you’ve got a safety fund to respond to emergencies with, you are equipped to deal with most contingencies.

Your ability to keep a safety fund will enable you to expand on your assets. These are things that generate income with higher volatility.

The idea was to create an untouchable emergency fund where if you fall economically, you could revert to in case the worst scenario happens.

If you’re like me and you want to make money by spending money, growing capital is the best way to get there.

With a safety net in place, making money is the next logical step. This is taking the offensive, economically speaking.

Growth Funds:

This next section does not really have a ratio of money to be set aside for this project. However invested you are in growing funds is up to you.

All of these include Stock Market investing, each system with it’s own separate quality and feature.

1) Robinhood Stock Trading

If you have extra funds laying around and want to see them grow faster, a good way to do this is by buying pieces of a company and watching them grow in value over time. As with all investing, this comes with risk and should be approached carefully.

Link: Robinhood Investment - Personal Invite By Rodrigo

Get a free stock for joining with the link above.

2) Cryptocurrency

Cryptocurrency is becoming mainstream, with bitcoin making the news for it’s $14,000 a coin valuation. This becomes an easy way to buy low and sell high, given the hectic nature of the market. NOT ADVISEABLE for the uninformed, I advise you to inform yourself before attempting this.

3)Acorns Investing (Mutual Fund)

Acorns is still an investment platform like Robinhood. The difference is simple: It goes into a large pool of money where professionals wisely put the money in places where it will grow. I use it personally for it’s ability to take the difference from purchases into the fund. For example. If I spend 1.99 for a bag of chips, 1 cent goes towards the fund. With their three tier risk system to choose from, it’s easy to invest passively from relative peace of mind.

Link: Invest with Acorns - Rodrigo V.

Acorns puts $5 in your account to start.

4)Stash Investing

Stash is another platform that is similar to Acorns and Robinhood, with the difference being that you can invest by the dollar. Robinhood’s system works by the unit purchased, Acorns works by the total pool amount, while Stash you simply buy $5 worth of a company. If you can’t afford the $14,000 price of bitcoin, you can simply buy $5 worth of it and watch the returns increase (or deacrease) nevertheless. Very useful for beginners who have a basic understanding of Robinhood/Investing in general.

Link: Invest with Stash and get $20 to invest

To recap, Robinhood requires moderate to expert knowledge in the investment world. Investing with Stash is an easy to moderate endeavor, while investing with Acorns is pretty much doable by anyone. This is just the nutshell of things.

I hope you liked this article. If you know of any other methods of growing capital and maintaining econonical stability, I would appreciate your input.

If you really liked this article and found it useful, ABSOLUTELY share this article with those you feel this could help.

If you’re interested in the investment options presented above, do feel free to use the links provided. That helps me keep the site running to keep sharing with you all I’ve got to share.