Investments Update: Dec 2014

Hey guys, it's been a while since I've done anything with the money sitting in my bank and I figured it was a bit of a waste, so here's the plan.  For this past year I've been steadily growing my income while keeping my expenses relatively the same which has allowed me to save quite a bit of cash. If you guys want to know the secret to saving up so much money, it's pretty simple.

Live somewhere super cheap like Chiang Mai, while making a US wage.  Even if you only make $5,000 a month which is average in the US, you actually get to pocket $4,000 of it which is $48k a year into your investments.  Here's what I did with all of that money.

I suddenly realized that even though my money is spread out all over the place, just in my checking account I had almost $60k just sitting there, which is insane to me as I barely had $60.00 not much more than a year ago.  I realized that by letting my money sit there, it wasn't working for me and wasn't helping me get towards my goals. If you guys remember, earlier this year I bought a bunch of facebook stock because a friend recommended it.

It was a scary rollercoaster as I originally bought in at $69 a share and it dropped down to $55 for a while.  Luckily, I took some good advice from both JP and my buddy Ed and bought more then it dropped. A few months ago, I cashed out on some of the higher priced shares.  Now I'm left with these that are doing quite well.

So now that I've gotten a bit of financial schooling from the experience, what did I learn? Well first, don't take any of this as financial advice because I really have no idea what I'm doing, but basically my theory is that I should listen to people smarter and richer than myself, and when stocks go down, I should buy more of it instead of selling.

Taking my own advice, I listened to a friend who gave me some advice to invest in ETF (Exchange-Traded Funds) months ago and finally pulled the trigger. I asked him over chat and skyped him for a bit to clear up my plan of action, then just as a backup, I also emailed my other mentor JP and asked him if the plan sounds decent. Here's the email I sent JP.

In the above email, I basically explained to JP that my buddy Ed (who is far smarter than me when it comes to financial anything) advised me that instead of buying a bunch of Stock or ETF at once, to spread it over the months so my buy in average is stable, which makes perfect sense to me. He also advised to buy the same amount on the same day every month no matter what happens, expect if it suddenly drops more than 25%, then I should buy twice the amount as I normally do and if it drops by 50% I should put all of my money into it.

It also sounds insane, but I really do think that it's as easy as that. When the economy is bad and everyone is panic selling, I should buy as much as I can and hold it until the US recovers again. So here's what I bought yesterday.

So basically I did exactly what Ed recommended and what I told JP in the email. I bought around $2k worth of VTI and will keep buying $2,000 of it every month as a way to invest my money. 

That's pretty much it. Doesn't sound that exciting I know. But I'll let you guys know when I hear back from JP and let you know what he says about it all.  At the end of the day, even with my limited financial knowledge, this just feels like common sense, and by seeing less money in my checkings account, this forces me to work harder to keep building new businesses and streams of revenue.  

If you're curious, here are the three posts I made about buying FB a few months ago:
FB Stock Part 1 (the plan), Part 2 (buying more), and Part 3 (selling).

If you have no idea how I came up and how I afford my life of travel check out this post:

If you want to read how I got motivated to actually stop being broke and accomplished all of this, read my new book available on Amazon.

Keep in touch!

I just heard back from JP. He said my investments were prudent, but he didn't mention anything about XOM.  He did however mention that he thinks FB will double or triple in price in the next 5 years and not to sell it even if it goes over $100 a share, so I'm planning on holding it for the long term.

Warm Regards,

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