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Way back at the beginning of the year I hopped into a friendly little wager among personal finance people to see who would have the highest value portfolio at the end of the year. Now that we’re passed two months, it’s time to see how my investments are doing.
First, let’s recap a little. Unlike most of the challenge participants, I am not relying on stock for the bulk of my wealth building in this challenge. I split my $1,000 initial investment into peer-to-peer lending (25%), stock investing (25%) and my own little side business (50%). I’m going to go in order of returns.
I managed to transfer $250 into the account aaaaand nothing. I haven’t touched it at all. I don’t even remember the password. There is some serious work to be done in this area. Here’s the problem, I have never been able to invest in stock outside of my 401(k) because I traditionally worked for investment banks. I hated jumping through hoops to get permission to invest, so I never bothered. Now that I can do it, I am so not used to the freedom that it’s a bit daunting. This is a mental hurdle to get over. But, I did earn 7 cents in interest. Hey, it’s something.
Nothing to it but to do it, right? The way I see it, I haven’t missed too much. The market has had more ups and downs than a seesaw. Next month will be different…I promise.
I chose Lending Club as my P2P lending provider with a fresh portfolio. Instead of using their automatic investing option where they place your money into portfolios based on your risk tolerance, I decided to choose the individual loans to invest in.
This can be slow, time consuming process when the loan that you choose to invest in gets cancelled. That happened a few times, but I finally have my $250 now invested in 10 different loans. So far, my porfolio’s value is $251.44. My net annualized return is 10.44%. So far, I have received interest payments totaling $1.51.
This was meant to be my “aggressive” portfolio, but I found myself playing it safe. Must put my money where my mouth is. Heck, this is still my money that I’m playing with. I’m having a hard time being as aggressive as I should be, especially if I want to beat the pants off the other
suckers participants. What I will do is reinvest the profits into new loans that are more risky but offer greater potential rewards.
I’m A Hustler Baby
This, my friends, is where I will shine. Half of my money went into a side business. I’m selling cell phone cases that I design on Amazon. Since January, I made a net profit of $1,078.10 from what I sold on Amazon. So, my investment more than doubled. What? Doubled. You want to know how, don’t you? Alright, read on.
Although I design the cases, I don’t make them myself. I subcontract that out to my brother who owns all of the equipment. He also gives me generous net 30 day terms meaning that I don’t have to pay for anything up front and he also drop ships for me, meaning that I don’t have to store inventory. Basically, I run a business as lean as humanly possible.
Amazon literally pays me before I have to pay him for the items so I could have invested nothing more than the cost of the professional seller account and a stack of UPC numbers (required for selling on Amazon) and still made out like a bandit. If I wasn’t making my own stuff and just reselling things that other people manufactured, I wouldn’t have even needed to purchase UPC numbers. Lots of sellers on Amazon resell old books. That’s a great place to start if you have a stack of them or if you pick up a bunch at yard sales for pennies.
Do you think that I’m bullshitting or that I didn’t sell that much on Amazon in that time? Go ahead and look at the report that I downloaded from Amazon (PDF). What you don’t see here is the cost of goods sold, the cost of reshipments for orders that were incorrectly shipped (crap happens) or for shipments that were lost in the mail.
How Am I Doing?
Just peachy. My portfolio, if you can call it that, is up a total of $1,079.68. The biggest difference here was of course my own side business. I didn’t include anything like website sales or any other selling platform. I specifically chose to sell just on Amazon because everyone can do exactly what I did and have your Amazon business up and running in a short time.
To be fair, I am in the unique position of being close to a drop shipper with a product that I trust. My brother provides the same service for a number of different people, so I don’t have any exclusivity here. If you can find a trusted company with products that you like and others want to buy; who are aware of Amazon’s rules; who are willing to work with you and who drop ship, you have struck gold my friend. I’ve always said that a small side business is essential in today’s economy. Now, you get to see what I’m doing and how I’m doing as well.
But, I’m not the only one taking this challenge. You can check out the
people who will lose challengers and see how they’re doing. Just remember, I’m making it rain over here.
Don’t listen to a thing I say or take whatever I do here as investment advice. My portfolio’s performance doesn’t guarantee you a dang thing. Consult your own investment professional for advice before taking on some risky crap like betting against a bunch of personal finance people in a public spectacle of wits and stuff. I warned you.
With all of the things that I share on this site my net worth has never been one of them. It’s not like I’m an incredibly private person, but I always felt as if I should hold at least ONE thing close to the chest. That’s about to go right out the window.
Blogging buddy J. Money asked bloggers if we were willing to share our net worth and I guess I felt challenged enough to (1) calculate that number and then (2) share that with the world (okay, the three of you who read this site).
You already know about my debt. This blog was established with the sole purpose of documenting my way out and upward and it’s been some ride.
When I started this blog way back my very first post detailed my debt of $105,665.31 and optimism. I started owing less money than I do now but the circumstances are so much more different (grammatically incorrect, but it stays) than they were then. Back in 2009 the only thing that I owned was my debt and two degrees…and a lemon of a newish car that I had to have constantly repaired at the dealer.
January came and went so quickly that I didn’t write my monthly summary. Big whoops, so here it is.
For those of you who are new, the entire reason why this blog exists is to chronicle my way out of debt and into freedom on a beach in Bora Bora. The second part is a lie, but if I win the lottery, you’ll know where to find me. This blog has been running for five long years and I’ve been doing this every single month since we started. Okay, there was one month where I was going to change to doing this every other month so I didn’t do the monthly check in. That was last February.
Performance artist Carvens Lissaint robs to get his financial aid…well, he does so verbally anyway. His TedYouth video below is inspiring in just how desperate students are for financial aid and how important financial aid is for students.
One of the most stirring lines in this entire video is when he said, “My ancestors did sit-in just so I can sit in a classroom.” He then goes on to say that student loan debt “sounds like the rust of shackles locking their way onto my degree.”
Have a minute? Watch Carvens at work.
Remember when you used to buy envelopes and stamps and then spent time writing out bills, licking and sealing all those envelopes and then mailing them in just to pay a bill? Yeah me neither. It seems like you Generation Y people are taking advantage of the technology available to you to pay your bills as well. According to a survey by Western Union 64% of this age group receive more than half of their bills online. I’m not in that age group but I get 100% of mine online. Why deal with paper when you don’t have to?
When was the last time that you wrote a check? 21% of Gen Yers have never written a check in their lives. Honestly though, I don’t even have a check book for my checking account. Everything goes through the online bill pay with me. Ain’t nobody got time fo’ checks!
Even more impressive, Gen Y is smart with their cash, probably because they’ve got massive student loans. 71% of Gen Yers in the survey planned on cutting unnecessary spending within the next six months. Smart! If you’d like to learn more about how Generation Y handles their money, check out the infographic below. Click to enlarge.
As usual there are no resolutions for this blog, but we are going to take a look back on 2013 to review how I did with my finances.
I began 2013 owing creditors exactly $144,224.79. It wasn’t bad but it wasn’t too good either. I really didn’t have a goal number in mind to end the year with and so I plodded along just paying the overall debt down.
March 1 stuck and I was not so suddenly but very happily unemployed. While this didn’t halt the debt repayment, it did slow down considerably. That was fine because I had planned for it. I had a decent severance package, an emergency fund, passive income from my rental homes and income from this blog. Combined, it was enough to make me comfortable enough to take six full months off doing what I wanted to do.
Happy 2014! While everyone is busy looking backwards I’m looking forward and I’m looking forward to doing things differently. This year I have joined the Grow Your Dough Throwdown by Jeff Rose at Good Financial Cents.
What Jeff and a bunch of other personal finance bloggers are doing is investing $1,000 various ways. The goal is for each blogger to report back monthly on how their portfolio is doing and I guess whoever ends up with the most money at the end of the year gets serious bragging rights. While they’re mostly investing in the stock market, and honestly, who wouldn’t since the markets returned something like 30% last year, I’m going to be a little unorthodox.
I constantly get into disagreements with my other half about working too hard and being too focused on money. He thinks that I have both of those issues. I agree to disagree.
Yes, I work hard. I put in nine to ten hour days at work then get home and run my own small business and then find time to write articles for this site. I don’t get as much sleep as I should but that doesn’t bother me. It’s not the money that motivates me, it’s the freedom.
I’m more than a little focused on getting completely out of debt and I have a very short time table to do so. With over $130,000 owed to creditors and a goal of paying it all off in less than five years, I am extremely aggressive in my narrow-minded focus of paying debt and amassing retirement funds. The goal is that once everyone is paid I will work for myself on my own terms – effectively retiring at 40.
I have a confession that will seem very Grinch-like: I don’t buy Christmas gifts and I don’t want anyone else to buy gifts for me either.
I used to be like everyone else; scrambling every year deciding who to get what while worry about spending money that I didn’t have. I would think of who could possibly send me a Christmas gift. Was I getting a gift for someone who as not getting me a gift and therefore would feel obligated to get me some tchotchke? Was I not getting a gift for someone who I should be getting a gift for? Was I getting something too expensive?
All of the time that I was spending money on gifts for friends and family, I was actively trying to get out of debt. It finally occurred to me that I was spending money that I didn’t have to please others. After running around during the Christmas season it would take me about two or three months to pay off the balance from the gifts that I had bought. The thought finally hit me that I was being an idiot. I decided that I had had enough and I did what made sense: