The 2 Levers Of Financial Independence

Subscribe to the Making of a Millionaire newsletter for exclusive podcast episodes: https://benlefort.substack.com/  Follow all my writing on Medium: https://benjaminlefort.medium.com/subscribe  Summary of today’s episode While investing in physical real estate requires a lot of money, investing in REITs allows someone with less than $100 to begin investing in real estate. REITs are companies that buy real estate and payout 90% of their taxable income to their shareholders. You can easily buy REITs in the same way you would buy stocks. Additionally, you can increase your diversification by buying REIT index funds in the same way you would buy an S&P 500 index fund. REITs have historically provided a strong return while maintaining a low correlation to stocks. However, investing in REITs is investing in one specific sector of the economy (real estate), which exposes investors to idiosyncratic risk. REITs solve the three biggest problems of investing in physical real estate. Diversification Liquidity Management time and effort REIT investors need to know that the dividends from REITs are less tax-efficient than dividends from other publicly traded companies. This means the most efficient way to invest in REITs is through retirement and other tax-sheltered accounts. Spread The Wealth 👉 If you have a friend that’s into personal finance, I would be grateful if you shared this podcast with them and encouraged them to join the community

The term first-generation wealth builder refers to someone who does not have any financial inheritance and builds wealth, starting from $0, or even less in some cases. For this podcast, I will add to the definition of a first-generation wealth builder to include someone who is building wealth to support themselves, their family, and future generations of their family. In 2013, I finished graduate school with $50,000 in debt, $600 in the bank, and a mission to begin my journey as a first-generation wealth builder. Every major financial decision I’ve made since that point has had the express purpose of accomplishing two goals: Improve my personal financial situation. Improve my family’s financial situation. That goes for my current family members and future generations of my family. With that in mind, in this episode, I discuss how  I manage money as a first-generation wealth builder. Join the weekly newsletter: https://dogged-mover-9757.ck.page/d1a6fccdf6  Leave us a voicemail question and get featured on the Podcast: https://anchor.fm/ben5933 This podcast is for entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.

In today’s episode, I am discussing why our ability to earn an income, what economists would call our “Human Capital” is our greatest asset. That means, losing that asset is our greatest financial risk. Luckily there is a simple and cheap way to manage that risk which we discuss in today’s episode. For more discussions on the Present Value of our human capital check out this article on Making of a Millionaire: https://themakingofamillionaire.com/3-reasons-it-makes-sense-for-me-to-be-invested-100-in-stocks-4a5d4c3681c2 Follow Making of a Millionaire: https://themakingofamillionaire.com/ Leave me a voice mail/question here and I’ll feature it on the podcast: https://anchor.fm/ben5933 Don’t forget to sign up for our weekly newsletter: https://dogged-mover-9757.ck.page/d1a6fccdf6

In this episode, I discuss why bumper sticker advice like “debt is evil and should be avoided at all costs” is short-sited. I do this by reviewing all the ways debt has helped me build a life that I love with financial security. I also provide a framework of questions to ask yourself if you ever consider taking on debt: 1. What phase of your financial life are you in? 2. What are your financial goals? 3. Is the use of debt likely to move you towards those goals? 4. What are the risks of taking on debt, and have you prepared for them? Here is the link to the article on the pros and cons of owning a home: https://themakingofamillionaire.com/the-financial-paradox-of-owning-a-home-2dc36bfca080?sk=a92bb6d33d2688c7e658d602b5e046df  Here is the link to the Facebook group: https://www.facebook.com/groups/makingofamillionaire  Here is a link to my weekly newsletter: https://dogged-mover-9757.ck.page/d1a6fccdf6 

In this episode, we discuss why managing money is less of a science than it is an elegant dance. There will be times for frugality and times for abundance; knowing what to do during these times is what will determine your financial future. Most of us have three phases of our financial life Forced frugality Optional frugality Thoughtful abundance If you’re lucky, you move in a straight line from forced frugality and eventually hit thoughtful abundance and never look back. Let’s discuss what each of these phases looks like and the top priorities for your money. Check out all of our work at Making of a Millionaire: https://themakingofamillionaire.com/ Sign up for the weekly newsletter: https://dogged-mover-9757.ck.page/d1a6fccdf6

Three factors that explain why I should be invested 100% in stocks 1. My wife and I each have high job security and extremely predictable income. 2. We are lucky enough to each have Defined Benefit (DB) pensions through work, which means our retirement income will be very secure and extremely predictable. 3. I am relatively young at 32 years old, which means I have a lot more income I will earn in my life through my human capital. That does NOT mean it makes sense for you. In this episode, we discuss some of the important factors we all need to consider when making asset allocation decisions.  Don’t forget to subscribe to my weekly newsletter: https://dogged-mover-9757.ck.page/d1a6fccdf6 Check out all the other investing articles on Making of a Millionaire: https://themakingofamillionaire.com/investing/home

When most people think about assets that will build wealth, they think about the stock market and real estate. While stocks and real estate are great investments, they are not even close to your greatest asset; yourself. In this episode, I discuss why your human capital, aka “your ability to earn an income,” is by far the greatest asset in your financial tool belt and how you can unleash it. Don't forget to sign up for my FREE weekly newsletter here: https://dogged-mover-9757.ck.page/d1a6fccdf6

Topics covered in today's episode. Why passive income is a myth An example of how scalable income works The simple path to wealth lies in keeping your expenses constant, increasing your income, and investing the difference How scalable income helped me save my first $100,000 The road to saving $1 million The goal of generational wealth The cost of working two jobs Sign up for my weekly newsletter and get your free expenses tracker here: https://dogged-mover-9757.ck.page/d1a6fccdf6

Topics discussed in today's episode: COVID-19 as an accelerant of change in the economy.  The importance of diversifying your income streams Two types of side hustle to diversify your income Are you a stock or a bond? Working from home has torn down the final barrier to part-time entrepreneurship Why a digital business works best as a side hustle Join my weekly newsletter to stay up to date on all of my work: https://dogged-mover-9757.ck.page/d1a6fccdf6 Follow Making of a Millionaire on Medium: https://medium.com/makingofamillionaire 

Personal finance does not always need to be complicated! When you boil it down; most personal finance problems can be solved through a combination of; Making more money. Cutting back your current spending. That's why I call these the "two levers of financial independence." In this episode, we dive into each with examples.