How I Invest my Money: 6 Steps You Can Take to Become a Millionaire

I'm writing this post today not because I'm an expert, but am pretty sure that what I'm doing with my money will make you 99% better off than everyone else. The investment strategies I follow are simple, straight forward, and financially prudent.

There is so much misleading info out there, so many gamblers who think they know something that others don't, financial planners and mutual fund managers that will rip you off. Worst off, there are many of you who will do absolutely nothing with your money or just follow whatever you have been doing for the past 10 years without really understanding the big picture. This blog post contains the things I personally do with my money and what I would recommend if you don't know where to start.

I went from having $200 in my bank to having over $100k and committed to becoming a millionaire. This is how I'm going to do it and how you can as well.

First off I want to thank everyone who has helped me through my journey, from the blog readers who gave me sound advice through comments when I first started investing in facebook stock, to my mentor JP, and to Ed who was kind enough to Skype with me for an hour and explain his strategies in detail.

Step 1: Educate Yourself in the Basics

To educate yourself on the basics of investing, you can read books like Tony Robbin's new book, Money: Master the Game which gives a great overview and sound advice. Then ignore his advice on his "All Seasons Portfolio" and recommendation of using Stronghold Financial.

Your goals in this step are to understand why mutual funds, financial planners and stock brokers are  are terrible ideas and don't have your best interest in mind, ever. By the end of the book you should understand that even experts like Warren Buffet would only recommend investing in index funds and why having 30% growth is just luck and the same as gambling, and why all mutual fund ratings are bullshit.

If you have a friend who claims to have beaten the system, or knows something others don't, or that they are somehow different, they aren't, everyone is a genius in a bull market.

Step 2: Stack Cash

Even though having $30,000 in cash sitting in a checking account may sound like a stupid idea as it doesn't earn any interest. Your goal in this step is to have enough cash money to have in case a business opportunity comes up, there is an emergency, or you suddenly can't work for a year.

Instead of spending time researching how to invest money you don't yet have, bookmark this post and come back when you have at least $20,000 in cash sitting in a bank account as a backup. Only then should you be investing in anything. Cash is king and you never know why you might need it. If you're thinking, there is no freaking way you can save up that amount of money, read my post about my Thai Millionaire Gold Watch Challenge or if you want more detail read my book Life Changes Quick.

The best way to save up $30k is to increase your income while keeping your expenses as low as possible. Living in Chiang Mai for less than $1,000 a month while making a U.S. salary has allowed me to pocket 90% of my income.

Step 3: Dollar Cost Averaging

Even though it was tempting to buy as many shares of VTI as soon as I found out what an exceptional index fund it is, I forced myself not to jump in with both feet. I started investing the same amount every month regardless of if the market was up or down. This allows me to buy at an average rate instead of gambling and buying too high or too low. No one can time the market, not even you.

Once you are ready to start investing, choose a day of the month such as the 19th which historically has been the lowest price, and stick to it. Then choose a fixed amount such as $2,000 a month that you'll buy the same amount of every month no matter if it's high or low.  If your income goes up or if you start having too much cash sitting in your bank, you can increase the amount.

The reason why I buy VTI is they have the lowest annual management fees at only 0.05 percent a year which compared to a typical 2-4% fee for mutual funds ends up being tens of thousands over the years if you calculate what you would have received.  I buy VTI directly through as there are zero trading fees which saves me $8.95 every time I want to buy shares.

Step 4: Don't Sell!

Here's the big reason why you need to have $30,000 in cash in your bank. It's to help you get through the year if we have another recession. Historically as long as you hold onto your shares and don't panic and sell like everyone else, the value goes back up eventually and your 300 shares are still worth 300 shares. You only lose money if you sell the shares. 

Instead of selling when the market is low, you should be buying more now that shares are on sale. This is why I bought more shares of Facebook Stock when their shares dropped from $69 which I originally bought it for down to $55 which caused a bit of a panic. Big thanks to everyone who commented and to Ed for messaging me to cancel my "auto-sell" and for educating me.  

I ended up buying more FB when the price dropped to $55 and it ended up making me close to $10,000 because I bought it when everyone else was selling. If it wasn't for the helpful advice of others who were smart enough to see past the scare, I would have lost money and lost the opportunity to make more, which is the why I'm so thankful and also wanting to pass along this knowledge here.

Step 5: Set Auto "Buy"

So instead of setting "Sell" actions, I have my account with Vanguard setup to automatically Buy more shares in VTI as the price drops down. If the market drops to 90 a share, it'll buy $5,000 worth. Then if it drops down to $85 a share, it'll buy $10,000, another $10k at 75 and another $10k if it ever drops to $70.  Most likely the market will ever drop in those 60 days to fill the order, but you lose nothing if it doesn't and you gain cheap shares if it does.

I recently had my settings to buy more shares at $106 and because I had it set to buy more if it ever dropped below $100 a share, it immediately bought another 90 shares when the market tanked earlier this week during "Black Monday" and I got in at $96.40 which brings my entire investment portfolio down to a lower average price. 

Step 6: Reinvest then Retire

Then that's it. Set your calendar to keep investing, buy more as the price lowers, and set your account to automatically reinvest the dividends into more shares. Unfortunately doesn't have a way to setup automatic buying on a specific date, so instead I just have a reminder on my calendar every month. As a tip, if you aren't in a hurry to get more shares (and you shouldn't be) you can set your buy limit at a certain price, which I usually choose by finding the mid ground between the last day's trade price. ($107-$109 would make me set it at $108)

With VTI you are already investing in the entire stock market so just by doing that you are diversified.  The reason why I don't use Betterment, Wealthfront, Stronghold Financial or Tony Robbin's All Seasons Portfolio is because of the 80/20 rule. If you look at any of those services, 70% of your money will be in an ETF anyways, and the rest is just to manage your risk tolerance. I say forget that, save yourself money on fees, and just take the risk and keep things simple.

My plan is to keep investing in only VTI and nothing else and to never sell until I am retired and the market happens to be in an upswing.  If you want to save on taxes you should buy your first $5,550 worth of VTI through your Roth IRA every year as a bonus. 

With every share of VTI this is what you're buying.

Thoughts on Real Estate: 

A big part of me has always wanted to buy my own home. It's the American dream. But it doesn't make financial sense, especially after reading articles like this. Instead, my goal would be to buy rental properties such as multifamily apartments while renting my primary residence. 

I was really tempted into investing into REITs (Real Estate Investment Trusts) for their high dividend payouts and because it is an easy way to own real estate without managing it yourself.  But because of that they are often over leveraged with debt I don't trust the market. 

So even though I want to have a stable home one day, I'd rather just rent my primary residence than take out a 30 year mortgage and buy and rent holiday villas whenever we travel and need a big enough place to have our families all meet.

In Koh Lanta, Thailand with the Family

P.S. This is what I wrote on my facebook wall earlier today:
I really like this condo and it's exactly the type of place I'd like to live if I moved back to San Francisco. But if you do the math, the unit would cost $3,726.82 a month at 4.06% over 30 years. Plus the monthly HOA dues are $726.22 a month.
Here in Chiang Mai, I can have the exact same condo and amenities for just the cost of the HOA fee, plus the condo would come completely furnished. That's $3,726.82 a month I can put into savings. If you do the math, that $775,000 condo you bought will cost you $1.35 million in payments at the end of the 30 years.
Now here's what gets really crazy, if you invest just the payments you would have spent on mortgage and earned 10% on your investment annually, letting it compound, you would have $8,498,362.02 saved up. This is why I'm not buying a house and why I'm not living in San Francisco...I'd rather have $8 million dollars.

I sincerely hopes this post helps, as this is really basic advice that I wish someone would have taught me 20 years ago. It's insane that we never learned any of this in school and that now it just seems like such basic common sense yet 98% of Americans still don't understand any of it.

If you have mutual funds I encourage you to switch them all into a low fee index fund like VTI instead, and if you haven't already started investing yet, go through the steps and make a plan. 

For my sister's birthday last year, I bought my niece and nephew $2,000 worth of VTI with automatic dividend reinvesting. Hopefully when they realize they have it 20 years from now, it'll be worth $14,656 even if I don't ever add any more in. But I have a feeling that uncle Johnny will be buying them shares of VTI instead of PS4's for their birthday from now on. The best present you can buy yourself and for your future is an education in the basics of finance then a plan on making it happen. I don't have all the answers, I'm not an expert, and I may be wrong, but the advice I've learned and shared is prudent and is what I personally do.

I'd love to see everyone following my journey to be successful in your journey as well. Keep in touch and best wishes.

2020 Update:

A lot of friends and family members have been messaging me asking how they can start investing. I finally took the time to sit down and write it all out. You can read my How to Invest in Stocks and Index Funds 101 Blog Post, listen to Episode 139 of the podcast.

Or watch the video below. All three are on the same topic but feel free to watch all three or choose one of the above.

Warm Regards,


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  1. Thanks for sharing how you invest Johnny, I'm looking to buy some Index Funds and ETFs and this is really useful reading along with all your other posts and podcasts. I've just finished reading 'The Global Expatriates Guide to Investing' by Andrew Hallam which is the best book I've read in a while and recommends low cost ETFs/Indexes and the 'Couch Potato Portfolio'. You should see if you can get Andrew Hallam on your show as he's a retired international teacher but now a digital nomad.

    1. Hey really glad you've enjoyed this post! There was some good info here in the comments but when I moved from Disqus to Blogger comments they got erased =(

      Thanks for the suggestions on Andrew, I'll check him out.

  2. Johnny:
    Good words sir.....Roth: spot on, Vanguard: the gold standard.....your strategies are excellent. My strategy is slightly modified; not better than yours - just different. In my professional life I've observed more innovation and creativity in smaller and mid-sized companies. The largest 500 companies are more prone to complacency and typically don't have significant growth potential. With the all kinds of new capabilities, these larger companies can more easily be out-flanked compared to smaller and more nimble competitors. The 10 year performance proves this out. The Vanguard Total Stock Market index averaged 8.1% over 10 years. The small-cap index funds averaged 8.68% and the mid-cap index fund averaged a really nice 8.84%. The large cap index only got 7.84% - which explains why your fund was OK - but still somewhat under performing - especially for someone your age.

    1. Hey David, good comment. I know there are ways to get slightly more growth by being more aggressive, but the reason why I only invest in Vanguard is because it frees up my mental energy to build my businesses so I can make more money that way. =)

  3. Hey Marufur, really glad you found my blog, even by accident!


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