20 Steps to Bankruptcy

Step 1: people you’ve never heard of come up with the potential for a sensation and then promote the hell out of it

Step 2: the price gains momentum to 5x

Step 3: broke people put $100 in it “to test it out” (there is no such thing)

Step 4: broke people see massive multi-dozen dollar return

Step 5: broke people take to the digital streets to declare “I don’t know how ya’ll do that 9-5 sht”

Step 6: broke people begin massive scramble to find additional money to “invest” at now the 10x level

Step 7: broke people borrow thousands from upcomming rent payments and car payment due in order to invest at 15x level (dont worry, I’ll make it back by the end of the month)

Step 8: broke people convince other broke people to borrow from future bills in order to invest at 20x level

Step 9: broke people are now “invested” close to $18k from credit card cash advances, upcomming rent and life savings

Step 10: sensation begins to crack at the 20x level

Step 11: broke people say sensation is on sale and that you’re a fool if you don’t buy more

Step 12: broke people borrow from 401k to tripple down on sensation

Step 13: sensation drops to 15x level

Step 14: broke people borrow from multiple friends with the guarantee of doubling their return

Step 15: sensation drops to 10x level

Step 16: sensation drops to 5x level

Step 17: broke people think “why didnt I sell at the 20x level”

Step 18: sensation gets a little boost from the 5x level to the 6x level

Step 19: broke people tap that one remaining friend that doesnt know about their gambling addiction because “the trend is back on!”

Step 20: bankruptcy court for multiple who are taken down with sensation

Rinse and repeat every 7-10 years.

#irrationalexuberance

#itsneverthefirstpurchasethatgetsya

Why You Should Avoid Acorns (and other expensive, poorly thought out investing gimmicks)

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Lately there have been many questions coming my way in regards to the new Acorns Investing App.

“What do you think about Acorns?”

I don’t.

“Do you recommend the Acorns app?”

No.

“Should I…”

No.

No.

No.

Listen folks. We have to stop trying to take the easy way out of things that were a piece of cake to begin.
When we opt for even lazier, we opt for even more expensive.

How expensive?

Lets start from the top:

Acorns is a mobile app that supposedly rounds up your recent spending transactions and invests the rounded up portion.

But for someone to provide this “service”, there is going to be an expense for it. (even though there is no benefit of micro investing in the first place)

The service itself becomes expensive for two reasons: #1 Acorns has to keep track of your spending, calculate the difference and then find someone to pay for this service.

That person is you. This is part of the $1/month fee in addition to .50% of your balance you get to hand over each year.

What does that mean for your money? The below is if someone invested $200/month using www.BKFInvestingSchool.com principals.

no acorns

And below is what happens when you take a seemingly small, yet actually substantial .50% out of someone’s return over long periods of time using “Acorns”:

w acorns

Yes, that is a cold hard $139,824 difference between the first return and the second return.

A cold hard $139k taken right out of your pocket.

And it doesn’t even do what you think.

Which brings us to the #2 reason the Acorns service is expensive – starting your investing career off of lies is one of the most harmful things you can do. If you fall for simple tricks, you will fall for larger ones. And they only get more expensive.

If you notice on the Acorns website, the term “virtual” is used to describe this rounding up of transactions. This is because the app doesn’t actually take the rounded up portion of that $3.95 cup of Starbucks you bought. No your checking account nor the transactions you make are not incorporated into to the Acorns app in any way. Its true function is to simply make an automatic transfer from your bank account of whatever dollar amount you want whenever you want.

Which any person on earth can do, for free.

This means that to achieve the same investment regimen, all you would need to do is schedule an automatic transfer of X amount of money from your checking into your TD Ameritrade brokerage account, use the same commission free ETFs and not pay anyone an additional X amount to do so.

Better yet? Now you’ll be able to actually teach your kids how to invest because you know how, vs depending on some app that may or may not be in business in 5 years to do blind allocations on your behalf. You can not pass on an App to your kids and expect to form a wealthy lineage. (to be fair, we’re talking about apps and not website platforms that go more in depth with the process)

We must do better.

Next thing to understand about just how expensive this app is in other areas, is how psychology affects your investment returns.

Bad psychology

Consider this:

Sam makes a complete financial overhaul and learns to manage his money. After eliminating his liabilities (his consumer debt) and now that he isn’t paying $1,100 in car loans, credit cards and personal loans, he takes half of that amount to add to his investments each month. ($550/month)

Over 40 years, his portfolio becomes worth $2,953,972.

Chris on the other hand likes the easy way out. He never buckles down to learn to manage his money and instead defers to a random app he heard about on the internet that promises to round up his horrible spending habits while charging him for the ability to do so.

Since Chris continually drowns in monthly liabilities & debt payments instead of getting his life and finances together, he only has about $1/day in rounded up change to invest over those 40 years.

Over 40 years, this becomes $142,098 in the bank.

He blows through this amount with one medical procedure in “retirement”.

Moral of the story: when you’re encouraged to be broke, broke is exactly what you will aim to be.

dontbestupid

But lastly and potentially most detrimental of all?
taxes1


Let me give you a quick overview on how taxes are paid on traditional investments.

If you buy 4 shares of a mutual fund on March 3rd 2014….and you sell those 4 shares on March 30th 2014, you will receive paperwork from your brokerage account indicating you’ve done so. You would then take that information and plug it into Turbotax or provide it to your tax person.

You or they would then do the math and figure out the net gain (or loss) on that transaction (the date you bought the specific number of shares and the date you sold them) so that you can pay taxes based on the amount. (most brokerages don’t provide this last part to you)

And that’s the semi-easy part.

But now what happens when you buy 4 shares of that same mutual fund on March 4th, 5th, 6th, 7th, 8th, 9th…. and essentially every day of the year? Who calculates and records net profit from these purchases and when you sell them?

Once it gets too overwhelming for you and/or your tax person on 365 purchases a year, how much will you be charged in addition to your normal fee for having a far more complicated tax return than normal? (they charge upwards of $500 for this managing high numbers of stock transactions)

Even worse? Now that we have a multitude of purchases on the front end, what happens when Acorns does its “automatic re balancing” and dividend reinvesting on your behalf? For re-balancing that means you’re triggering a taxable event by selling portions of your investments when you otherwise might not have. (you should be buying and holding for 5 years minimum vs selling frequently)

And for the over abundance of dividend reinvestment? In conjunction with the re-balancing just mentioned?… lets just put it like this… you will be in one bonafied….

tax nightmare 2

Don’t do it to yourself.

Investing is simple. Don’t try to make something simple, simpler by taking away hundreds of thousands of dollars in potential return and forcing yourself into the wrong psychology.

And for damn sure don’t place yourself in an un-needed tax war with the IRS for when you never get around to putting together last years tax return after being overwhelmed.

In reality, nobody gets successful in America by being lazy.

                                                                                              -Bruno Tonioli

Learn how to invest the right way, here.

7 Stages to Financial Wealth

**7 Stages to Financial Wealth** (applicable to even the most stubborn of our recruits)

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Stage -1– Can’t nobody tell you NOTHIN. You’re deep in denial and ignorant to the truth about the damage your current mentality has done to your finances. You’re completely trapped in the credit/debt slave matrix and have no idea that you are truly broke underneath all of your monthly financial facade frontin. You react violently

Stage 2– Exploration and Acknowledgement of the truth.

Someone or something has come along and figured out how to give you an extremely rude awakening.

You’ve begun to reluctantly question a lot of things. You know somethings wrong with how you’ve been handling things, something wrong with your immediate surroundings and the way the world works but you just dont know exactly what it is or how to fix it. In this stage you begin to fish around for proper education on personal finance, self esteem and even improving your health if necessary for the upcoming fight.

Whatever that fight may turn out to be.

Stage 3– Absolute anger. At this point you’re gaining momentum in your pursuit of knowledge. Yet the more you learn, the more you feel the walls have closed in due to all of the stupid sht you’ve done financially. The more you’re able to accurately calculate the totality of your financial f*ckery, the harder it seems it will be for you to climb out of it.

You’re feel both completely against the wall and at the same time completely ready to break the cycle…yet you now acknowledge that your previous ignorance was definitely bliss.

Stage 4- Your anger has propelled you into an all out war against debt and financial struggle each month. You’re cutting expenses, selling things on Craigslist, budgeting, setting money aside as a starter emergency fund & aggressively fighting to pay down your credit cards, car loans and medical bills. You see progress, yet due to your intense battle with debt, you have no leftover funds to begin to aggressively save and invest for you and your kids future. However, you have woken up to the fact that by eliminating such harmful liabilities, you are putting yourself into the perfect position to more than catch up on those luxuries in 24 months.

Stage 5- Initial victory! You’ve paid your consumer debts and have a medium sized chunk of change saved up to weather a storm. You do however, still have student loans and maybe even a mortgage left. You start investing lightly and begin to contribute up to the match in your 401k while focusing most of your resources to knocking out your two remaining  debt monsters. (mortgages and student loans)

Stage 6- **Debt Freedom**. It has been a long time coming. You have never seen such a powerful cash flow each month and because you have no interest payments you need to send to ANYONE ever again, you’ve never seen so much money pile up in your bank and investment accounts so quickly. You rejoice.

You spend some of that cash-flow on yourself this month to celebrate your hard work. You make a pact to yourself to never allow you to get in that position again. You also promise that you will go full fledge into wealth generation mode through investing, getting your kids college straightened out and possibly even starting your own business/ income rental property portfolio.

Stage 7- You have been enjoying your financial freedom and new self esteem for sometime while investing properly, buying rental units properly and in general doing whatever the hell you want with your money. But you realize there is still one piece to the wealth puzzle left.

You realize the only way for you to be truly financially wealthy is by uplifting the next person in your family or community. So you seek out someone as unfortunate to be stuck in stage 1, send them a cold glass of water to the face and you completely change their outlook on life and the building of their family tree. A new cycle of wealth begins to combat the previous cycle of poverty.

Welcome to The Winner’s Circle.

BKF Program Recommended Products

BKF Online

**Updated 9/11/16

I’m continually updating a list of items that people constantly ask me whether or not they should purchase.

While getting out of debt, a lot of time in the financial community, we like to pretend like throughout the duration of someone’s debt free journey, that they will purchase absolutely nothing. While this would be great and definitely help that person get out of debt faster, we know in practice that this just isn’t the case.

With that being said, students within BKF university who are trying to get out of debt and build wealth should understand there is a sweet spot for those who find themselves in the market to purchase specific products. We’re not saying you can’t succeed if you venture slightly outside of these suggestions; again this is simply the sweet spot or set of purchase points you want to aim for so you do not find yourself too far off track.

A few good BKF approved purchase points for individual items you may be trying to obtain are as follows:

===========================

**Houses**

You should be out of all non student loan debt, have an emergency fund of 6 months expenses, and don’t buy anything unless your total monthly real estate expenses are below 33% of your gross monthly income. (Prop taxes, Home warranty, hazard insurance, maintenance, utilities etc). Avoid 1 level condos.

Learn more here.

And even better than that? Smart people who feel they need houses and want to actually be wealthy, here’s how to buy them in cash here.

**For NEW Cars**

You should not be driving a new anything while you’re in debt. Especially not consumer debt.

For those who refuse to listen and only have student loan debt left, understand that the absolute least expensive form of automobile is leasing the 100% electric car under $28k. Take out a 36 month pre-paid in cash lease which allows you a car pool lane sticker, a $2500 check from the state of CA sent to your house, a car with virtually no maintenance and virtually no fuel costs. Learn more about the leasing portion of this here.

**When purchasing a car if yours has become too expensive to fix**

Over 3 years old, reliable (Honda, Toyota/Scion, Nissan), $12k or under and paid for in CASH. If you do not have $12k to purchase a vehicle and you only have $6k to purchase a vehicle then great, thats even better – you know what you can afford. “I can afford it” means you “have the cash to purchase said item”.

**GAS**

Chevron gas preferred. Second choice is Texaco 91. Third choice is 76. Stay clear away from Arco and Costco gas. Contrary to popular belief all gas is not created equal and a lot of us spend a whole lot more burning through cheap gas. Visit facebook.com/jplynn to view our photo album of social media feedback from our 3 month gas challenge.

**For Car Insurance**

Progressive Insurance (www.progressive.com), http://www.WawanesaGeneral.com, AAA.com and http://www.Metromile.com (per mile insurance).

**Transportation in General**

(For the smart ones trying to wean themselves off of owning/using cars altogether, the best type of transportation is a creative mix of the below while keeping an old reliable clunker parked on the street for emergencies:)

>Bikes:

Most affordable & portable for transportation:

http://www.citizenbike.com/catalog.asp

Fastest & most portable for both transportation and leisure:

http://www.ternbicycles.com/us/

Not as portable but high quality full sized bikes for transportation and leisure:

http://www.montaguebikes.com/

Strictly for leisure

http://www.panamajack.com/eSource3/items/items-3-S1-lV1Shop-lV2Bikes-lV3Bikes.aspx?store

Most affordable high quality electric bikes for transportation and lesiure:

http://prodecotech.com/

Many cities now have bike rental services as well.

Electric longboards (latest technology) coming soon:

http://www.youtube.com/watch?v=IWV8irg64oM

Public Transportation:

Metro 30 day pass (or whatever your local bus/train pass is called)

http://www.metro.net/riding/fares/

Ride Share & Hourly Car rentals:

Uber, Lyft, Relayrides, Sidecar (www.side.cr), Zimride or Zipcar

Couple two of the alt transportation methods above with the purchase of a $3k-$6k reliable Honda Toyota or Nissan that stays parked at your house the majority of the month and you can’t lose!

**For new laptops needed for work or school**

Between $225-$600 (never pay over $600 for a laptop while in debt) HP, Sony, Toshiba, Asus, Acer or Samsung. The Microsoft Surface is great for many people that want extreme portability and full computing functions. Apple if you’re an art director, graphic designer or special effects editor. Just say no to Chrome Books.

**For inexpensive cell phone external batteries and accessories** (will save your life)

www.NewTrent.com

www.LimeFuel.com

**For banking products/bank accounts**

Checking Accounts- must have “free” checking or the ability to avoid account maintenance fees using direct deposit. No mandatory transferring of money between to avoid fees. Must have ALL overdraft “protection” removed from accounts.

**Checking accounts can be from the following:**

One or more of the following Black owned banks:

Last 24 Black banks in the U.S..png

Bank of America (the free eBanking account has been phased out – use MyAccess checking)

Allybank.com

USAA.com

Unionbank.com

Schwab.com

Wellsfargo.com

USBank.com

Credit unions/community banks

>>Stay away from Chase!

**Savings Accounts:**

One of the Black owned banks listed previously

Capitalone360.com

USAA.com

Allybank.com (must have a clean-ish credit report)

FNBODirect.com

Everbank.com

Credit unions/community banks

**Investment Accounts**

TDAmeritrade.com

Vanguard.com

Betterment.com

**Financial advisors -investment related**

YOURSELF (read a book like www.BKFInvestingSchool.com and/or joing the investing school program)

You can’t pass down someone else’s app or website that may or may not be in existence, to your kids.

If wanting to discuss a complex estate matter, try Vanguard personal advisor services https://investor.vanguard.com/advice/personal-advisor

**Budgeting/Getting out of Debt Software**

http://www.Mint.com

http://www.readyforzero.com

**For Healthy Eats**

L.A.:

Simply Wholesome (black owned – Los Angeles) http://www.yelp.com/biz/simply-wholesome-los-angeles

Stuff I eat (black owned – Inglewood) http://www.yelp.com/biz/stuff-i-eat-inglewood

Mo Better Burgers (black owned -check out their veggie burger and veggie tacos – Mid Wilshire) http://www.yelp.com/biz/mo-better-burgers-los-angeles-2

Derrick’s Jamaican Cuisine (black owned – Ladera) http://www.yelp.com/biz/derricks-jamaican-cuisine-los-angeles

**For cable TV packages**

AVOID Cable TV – this does not enhance your life. Use Hulu/Netflix or various free tv/free movies services online.

For stand alone digital boxes, use the Roku 3 player, Apple TV, Amazon Fire TV or Chromecast. (Roku is the best option right now for those who do not have Apple laptops. For those who have Apple laptops and use AirPlay to beam all types of content to your TV, the new Apple TV is best)

**For cell phone service**

Cell phone service is a highly subjective field. You have to try a few and settle with the one you like. You also have to go with the one that offers the best package for what you need. Some people only use 500mb of data and aren’t affected by throttling after that for example.

Cricket (https://www.cricketwireless.com) <– bought by AT&T. Offers a prepaid feature phone plan with unlimited talk, text and data  (2.5mb at high speed) for $40.

Ting Wireless (https://ting.com) <–uses Sprint’s network

Straight Talk Wireless (http://www.straighttalk.com/) <– depending on your location, will use AT&T, T-Mobile, Verizon & Sprint’s towers)

Republic Wireless (https://republicwireless.com) <–uses Sprint’s network

Boost Mobile (https://www.boostmobile.com) <–uses Sprint’s network

Virgin Mobile (http://www.virginmobileusa.com) <– uses Sprint’s network

Metro PCS (http://www.metropcs.com) <– uses T.Mobile’s network

>>Note: Verizon and others are far too expensive for mediocre benefits!

**For Internet providers**

Stick to Time Warner cable or Comcast over ATT Uverse.  ClearWire sucks (and will be out of busines ssoon). DirecTV if you hate your money.

A Quick Note on CA Real Estate

A few quick things you need to understand about CA real estate:

  • The typical time frame for a house to double in value is 30 years from date of purchase.
  • Median income in CA went from $29,275 in 1969 to $47,493 in 1999. This is nearly a doubling of median CA income in 30 years.
  • The two points above correlate to an “affordable” real estate market where prices double as incomes double over a specific period of time.
  • An abnormal real estate bubble occurred and then burst in the mid 2000s due to no doc loans and “banks gone wild” financing.
  • Even with this bursting of CA’s real estate bubble, house prices have doubled since 1999 (about 13 years ago)
  • During this same timeframe, median income in CA only went from $47,493 to $57,664.
  • Where in the #^T@# do you think demand is going to come from to keep feeding this real estate market? In a near fiscally bankrupt state where median income is contracting faster than anywhere else and the unemployment rate is sky high?

YOU HAVE TIME TO WAIT. HOUSE FEVER IS GOING TO CAUSE YOU TO DO SOMETHING STUPID. YOU’RE NOT GOING TO BECOME A MILLIONAIRE IF YOU SIGN UP FOR HUGE MORTGAGE PAYMENTS IN HOPES OF YOUR HOUSE DOUBLING IN VALUE.

The Official BKF Stance on Real Estate

20120729-114406.jpg

The message I’m constantly receiving on social media:

“I’m confused as to what to do on real estate. Sometimes i see dont buy and sometimes I see buy if you can get it under 33% of your income.”

**Here is the official BKF stance on primary residence real estate:**

1. Before even getting into the conversation on whether or not its smart to buy a house, you have to ask yourself do you even want a house?

Are you simply trying to buy a house because every other broke and struggling person around you is talking about doing so?

Are you mistakenly buying a house because someone told you it was an investment? (its not)

Are you trying to dump what little money you do have into real estate because you were told thats the only way for someone like you to build wealth and appreciation? (its not)

Have you gotten house fever and sold yourself on needing a larger residence for your kid and/or dog? (we’ve got to stop doing this)

Or have you been sold on the misconception that buying a house is cheaper than renting? (just a little simple math can show you its not if you do what you’re supposed to be doing)

Only once you’ve looked internally can you even PROCEED to #2.

2. Smart people buy personal residences for non external reasons, non investment reasons and ONLY WHEN THEY CAN AFFORD IT.

This means that if you’re in Texas, you and your $85k salary need to save half your income for 3-4 years and buy that $125k house in cash and never owe anyone a dime. This means if you’re in L.A., you and your spouse’s combined $150k salary needs to be budgeted properly and used to buy that $300k starter house in cash over 4-5 years. This also means that you as a single individual need to take your $100k income and buy that $250k-$300k house in cash after investing half your income over 7-8 years.
 
IF YOU HAVE TO TAKE ON DEBT TO PURCHASE SOMETHING, NO, YOU CAN NOT AFFORD N-E-THING. CASH IS THE SMARTEST OPTION FOR EVERYTHING IN YOUR LIFE . And the best way to come up with cash is to stop trying to buy ALONE. Real estate is purchased best with dual income households (read: marriage or mws). This “I don’t need no n%^%a syndrome has to stop.

3. So then that brings us to # 3. No matter what sense we (BKF/The Winner’s Circle) try to talk into you, there will be a high number of you still getting house fever and buying properties you know you can’t afford simply for external societal reasons. This is known as trying to keep up with the Joneses even though you’ve yet to realize the Joneses are flat broke.

And for these reasons we have provided you a handy dandy debt stupidity cheat sheet.

As you see, at the bottom of our hierarchy of debt stupidity at the bottom, after pay day loans, cash advances, credit cards etc, you’ll find mortgages (and student loans) as the least stupid (but still stupid) debt to take out. So for these people who are going to do what we encourage you not to anyways, we can only aim to not allow them to get completely raped by the banking industry.

For that to happen we’ve provided the guidelines below:

A. You should be out of all non student loan debt (including zero credit card accounts open. No mortgage or low mortgage rate on earth requires a revolving CC account.
B. Your emergency fund should be 6 months minimum of your new SOON TO BE monthly expenses (real estate expenses included).
C. Your downpayment is very important however, more importantly than that, you should get your TOTAL monthly real estate costs below >>33% of your gross monthly income.<<
(Total real estate costs equal the monthly average for annualized repair totals, HOA, PMI, hazard insurance, home warranty, property taxes, annualized maintenance, [maintenance is different from repairs], increased amount for utilities, mortgage payment and everything else expense wise specific to your land type. Or you can add a general 60-70% more to what you’ve calculated your mortgage to be.)
D. Our criteria is more stringent than a banks, which it should be. For those who want to have a general rule of thumb to see if a bank will lend to you on a property, make sure your annual income (or your household combined income) is 1/3rd the amount of the mortgage you’re taking out. If you’re taking out a $300k mortgage, your household should be making $100k annually!

Bonus suggestion: Avoid 1 bedroom flat condos. If you have to choose, a townhouse is your friend.

Doing this can actually save you from yourself and ensure you’re actually prosperous in real estate.

4. Credit scores and credit reports- know the difference between a standard FICO score and CoreLogic’s CoreScore that has/is becoming the standard for what is now considered your MORTGAGE SCORE. This isnt 1998. If you’re going to be insist on taking out a mortgage, you need to understand that you do NOT need credit cards, car loans, personal loans and other consumer credit products to build your mortgage score. Mortgage scores are now being made up of rental payment history, cel phone payment history and student loan timely payments. Please do your research.

In addition, if your mortgage company is still strictly going off FICO scores for qualification, understand the following:

How a FICO Score is Calculated

Fico breakdown

A FICO score is made up of the percentages above. The person who just has student loans and who does the following credit wise, will have an 800-807 FICO score and be approved for the lowest tier mortgage rates:

  • Payment history (35%): pay your student loans early and on time.
  • Amounts Owed (30%): pay your student loan balance down by staying away from paying on other debt so capital to do so is available.
  • Length of Credit History (15%): take out your small student loan balance when you are in undergrad or grad school and apply for a mortgage later in your 20s/early 30s.
  • New Credit (10%): the object here is to not apply for any credit until you’re ready to apply for a mortgage.
  • Types of Credit Used (10%): This category represents having a mix of types of credit, ie- installment loans and revolving accounts. Simply by having your student loans in good standing you will have 5% of this category. Remember both your student loans and your mortgage are INSTALLMENT ACCOUNTS. No revolving accounts, ie. credit card accounts, are needed.

**DOING THE ABOVE GIVES YOU 95% OF WHAT A “HIGH” FICO SCORE IS WITHOUT THE ADDED RISK OF POVERTY AND BANKRUPTCY THAT COMES WITH USING CREDIT CARDS.**

5. Renting and investing the difference- You’ll notice the fools who find out you’re renting will always judge you as if you’re stupid or less than. These people are known as coons and have zero idea how wealth works.

Its important to still know at the end of the day, the person who sinks all of their money into real estate, which has an average compound appreciation rate of 3% (or 0.4% in terms of real dollars) and has never learned to invest (which has had a 9.7% annual compound rate of return since 1926) , will EVERY SINGLE TIME be doing the exact opposite of what they thought they were going to do.

This is why there are relatively so many black seniors and parents with mortgages in the rural areas of this country yet their kids are going to school saddled with tens of thousands of dollars in student loan debt.

IF DEBT WAS SUCH A GOOD INVESTMENT AND YOUR FAMILY IS NOW MAGICALLY RICH, WHY IN ALL HELL DID YOU HAVE TO TAKE OUT MORE DEBT TO GO TO SCHOOL?

Ok then, now that we’re on the same page, your parents are broke and you’re about to be broker.

Why do they have car loans? Why are they borrowing from their 401ks?

We’re so used to paying things monthly that we don’t realize student loans aren’t what people with money shackle their children to. Student loan debt is only normal for normal people.

Don’t be normal. Be wealthy.

True wealth is generated from investing in the EQUITIES representing the companies your broke a$$ parents go to work for each day. You bought land to give you freedom yet you’re in debt like a slave. You bought a large house up on the hill for social status and now you have to work, scrimp, save and stress every month because you will be paying for that house in some form of fashion for the rest of your entire life.

6. Rental income property. Understand that everything we’ve mentioned above has to do with YOUR PERSONAL/PRIMARY residence. Rental income property from multi unit facilities you own under an LLC or S Corp IS an investment. You must understand that if you must use credit in business this is completely different than credit in personal finance. Build up your LLC (limited liability corp) credit lines, protect your personal finances by avoiding personal debt at all cost and THEN go into the landlord BUSINESS if you decide to. And even then you should be aiming at cash first.

Debt in personal finance = A NO NO
Debt against your fully incorporated business that is also fully seperated from your personal finances in the event things dont go as planned?= your choice.

This is how Donald trump file bankruptcy 50-11 times. He isnt filing PERSONAL bankruptcy, he’s filing BUSINESS BANKRUPTCY.

7. Myself. I have no current and will most likely never have a desire to purchase a single family residence. I’m living life like I never have before. I don’t have the stress of taking jobs I don’t like to make ends meet. I dont have the stress from considering doing illegal things to get some quick cash to pay off these payday loans. I don’t wake up everyday depressed because my student loan payments are due and I can’t find a 6 figure job to offset the cost. I don’t have to decide between making my rent or making my car note when I decide I want to go travel on vacation.

No no my friends, I will 1,000% be using rental properties in various parts of the country that my BUSINESS OWNS or staying in hotels before I ever get trapped in the personal debt addiction mind frame they teach you that you need to be in to buy houses and build wealth.

(sidenote: the best way to get into rental properties is to rent while buying rentals)

Instead, I invest my money into owning a portion of every single company you work for and every single loan company responsible for issuing you that credit/debt in the first place.

Thank each of you who refuse to stop struggling each month trying to keep your credit scores “intact” and going to work each day so that you can pay the living expenses of investors like me. Somethings telling me we have you by the balls for what…say..30 years or so?

Learn how to purchase houses in cash here.

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Brass Knuckle Finance – The Book – is out NOW!

And You Thought “Ho-Ho-Ho” Was Just a Random Santa Claus Saying

All the malls across the land are currently filled with broke fucks.

As all of the malls across America fill up more and more each winter day with broke fucks who can’t pay their bills, I too show up at the mall. But its not for what you think. Trust me when I tell you: if you ever see me in the mall its because I’m there checkin up on my bitches. Allow me to explain.

A woman named Becky spends all of her money in a Gucci retail store on Christmas gifts for herself and select family members. By doing so, she then overdraws her account and starts using her American express for every day purchases including gas.

The wealthy like myself, immediately begin to pimp her with Exchange Traded Funds, Index Funds and Individual Stocks. This is exactly how:

Mutual Funds are essentially pools of money given to portfolio or money managers who then invest that money according to whatever they describe is that fund’s primary objective. The problem is traditional mutual funds charge too effin much. There are upfront fees, backend fees, expense ratios and the whole 9. Whats worse is historically speaking, these funds fail to beat the average return for the stock market as a whole.

So what do you do? Well its really what John Bogle of Vanguard did. He introduced the Index Fund.

Index funds ARE mutual funds only they have no one person managing them. There are no typical portfolio manager fees and 3% this and that. The expense ratio is often 0.25 percent or lower. This is because the company that offers you the Index fund doesnt do any trading, they dont try and time the market, its simply a computer that buys all of the same types of stocks in a specific Index.

An index of the same types of stocks could include one for all emerging markets overseas stocks, it could be made up of all clothing and retail stocks, it could be made up of all automotive stocks. But the key is that they buy pieces of the stock market and seperate them into indexes and hold them forever. Since before the beginning of time practically, this strategy has beaten 80% of typical mutual funds. For instance an index fund of all small company stocks that have been beaten up in price (called a small company value index fund) has returned about 18% since 1964.

And if you didnt know, 18% is HUGE when most mutual funds may return 4%-6% on a good day.

So to pimp the lady above, since shes addicted to consumerism, you’d buy the following investments:

A. The “VCR”  aka The Vanguard Consumer Discretionary Exchange Traded Fund (which is the same as an Index fund but is easer to purchase. It makes money from her expensive clothing purchases at places like GUCCI)

http://finance.yahoo.com/echarts?s=VCR+Interactive#symbol=VCR;range=5y

B. The Vanguard Financials index fund aka “VFAIX”,  which holds a group of banking/financial stocks, will make money for you by pimping her on that overdrafting shes doing on her bank account.

http://finance.yahoo.com/q?s=VFAIX

And finally C. You would buy American Express stock itself (AXP) and play all of the interest she’ll be paying to the credit card company very soon. All because she wanted to be a Gucci whore and lives her life based on what people think.

http://finance.yahoo.com/echarts?s=AXP+Interactive#chart1:symbol=axp;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

**REMEMBER: IF YOU DO NOT WANT TO BE THE WHORE FOR SHAREHOLDERS LIKE MYSELF THEN STAY OUT OF THE MALL AND LIVE LIKE NOONE ELSE SO THAT ONE DAY YOU CAN LIVE LIKE NOONE ELSE!!**

This is exactly how big money is pimping you everyday. I’m just showing you a peak behind the curtain. As blacks and latinos, we do NOT have to take part in this and instead profit off of America’s addiction to consumerism. But unfortunately we spend more than any other race in terms of percentage of our income

Aren’t you tired of it always being US who fund these guys college funds by now??? Now do you see what I’m trying to do here??

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