$40

My total investments in stock as of now are just over $4,000. It is diversified into S&P 500 tracking index funds and Asian index funds. The Asian move was to try to play the falling dollar as well as the booming Chinese economy. So $4,000 after just over 7 months of work. Not too bad. But it’s getting much better. I had some things to buy when I first got the job. Namely a $1,500 gaming PC I threw together, a $1,600 car and a $1,500 motorcycle. Plus all the fees that come along with those things like inspections, registration, insurance (which I paid up front in full).

But now that those things are successfully aquired their maintenance costs are negligable since I’m so handy. So now all funds, other than $75/week, are going straight into stock purchases. All my brokerage accounts are in tax-sheltered status. One is my 401k which is currently being maxed out and the other is a traditional IRA which is also being maxed out. One friend of mine was concerned that you can’t open a traditional IRA if you already have a 401k, which got me a little nervous. But after looking into it it appears you sure can have both, provided your income for the year is less than $85,000. Which for the next couple of years it will be. Bullet dodged.

So in addition to all this saving I’m doing I also ought to be collecting a sizable refund check from the feds when I file my taxes in the spring since all this money is going into non-taxable status.

The thing that has really got me excited though is the idea that, even if I never do anything again, I’m guaranteed an average return on that money of about $40/month for the rest of my life. This is a basic formula I use. I assume an average 10% annual return and then whatever that number is I divide by 10 to figure out roughly what the monthly income from it will be. (12 is too hard to divide in my head). Of course, this is a rough figure, I’ll probably get a slightly higher annual return, but I’m not looking at inflation yet. So really, to not draw down principle and keep up with inflation I’m looking at only being able to collect 4 to 5.5% annually from the principle.

But this isn’t about accurate estimates, I can save those for my time with the spreadsheets. This is for pay day when I can think about how another deposit has been made into my brokerage accounts and my passive monthly income has just increased by another $5-$10. Then I think to myself, “Not too long ’til it’s at $400 instead of $40, or $1,500 even! Keep on chugging, Mike!”

Actually, since I’ve made it my habit and I don’t really know anything else, I’m a little confused about where everybody’s money is going. Are new cars and mortgages really THAT expensive?

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