Don’t get depressed over lack of wealth mobility

Something that seems to be sweeping the newspapers and blogs is how bad the economy is. The articles seem to point out how pay has been flat for several few years and that there is little income mobility.

What may not be clear is that there are two different results. One set of results is found when you average large groups of people and then compare different time periods like now vs twenty years ago. An entirely different set of results is found when you pick individual flesh-and-blood people, track their wealth mobility over twenty years and then average THAT. The results are much more pleasing.
Why is that? Well, the people in a given group today aren’t the same people that were in that same group twenty years ago. Which makes the first result set inherently flawed. But the fate of your retirement wealth shouldn’t be tied to such metrics.

Instead, you should focus on how you can become an owner, not just an employee. The wealthy members of society don’t settle for being simple employees. Instead they go out and own things including real estate, cash yielding stocks, cash value life insurance, and business equity. When you become an owner, the weight of income mobility, whether a valid concern or not, eventually fades in importance.

It may seem beyond your reach to build a million dollar business. But setting aside $100-500 every month and buying blocks of VNR, KO, WMT, GD, or any other blue chip stock that has paid increasing dividends for 25+ years is very realizable. 
These stocks become cash generators. By becoming business owners you can partake a piece of the profits. $500/month over 30 years would turn into $180,000 of pure investment capital, growing at 9% a year, would turn into $817,000.  Collecting 4% dividends would be tantamount to receiving over $32,000 a year just for being alive.
This is just one strategy but should illustrate that instead of worrying whether or not your salary is going up or not, people like Dividend Mantra are showing that your future is very much in your control. You’re the boss. Don’t let politicians and newspapers deter you from building your retirement wealth. 

Why I’m all in on Employee Stock Purchase Plans (ESPPs)

My company recently finished another six month round of its Employee Stock Purchase Plan or ESPP. And I couldn’t be happier.

If you monitor the stock market, or hear news updates on the radio, you might be aware that the DOW recently had a 300 point sell off. Some Wall Street people refer to it as consolidation, whatever that means. Essentially, the market on average had a pull back. The DOW index fell 300 points. I noticed it in my stock options and other holdings.

So why am I excited about my ESPP? ESPPs are an almost guaranteed way to make a little bit of profit with a built in savings component. Every program is different, but the two that I have been through both involved setting aside a piece of every pay check over six months. At the end of the round, all the money is used to buy company stock at a discount. On the same day, you can immediately sell it at market value.

My current one basically buys a chunk of stock at a 15% discount. By turning around and selling immediately on the date you got it, you score an immediate gain on your money. In this case, you are buying stock at 85% of its current price. Inverting that shows a 17.6% immediate gain on the money you invested. My previous company’s ESPP actually picked the lowest price point over the six month period, and bought it at THAT price, discounted 15%. In one stretch, I saw a 25% total discount. Wow!

Hence, I would set aside as much as I could afford into the ESPP program.

BTW, this is only if you can sell on the same day you receive the stock. If you have to hold it for a month, a year, or more, then that’s something I’m not really interested in.

There is a convenient side effect. The money that is accumulated for the ESPP purchase round is a chunk of savings. In my eyes, I just got a big collection of money. The cost of the money was a good deal. But I now have enough to eye picking up either KO or BP, two of the stocks on my short list that are sporting cheap P/E ratios. That is also why I say “as much as you can afford”. The money you pour into an ESPP program is taken out of each paycheck. Can you do without it? If so, then it will grow nicely as shown above. And it will be available in big block when its handed back to you six months later.

What are the risks involved in an ESPP. Despite buying and selling stock on the same day with a 15% boost, there is a chance that the stock could drop more than that. In that situation, you would have lost money. There is also the risk that you will not pay attention, miss the date your stock purchase is made, and not execute your sell off. That’s why its called risk capital.

To me, the risk is minimal. In just a few days (I didn’t sell until three days after this latest round), I don’t really expect stocks to drop THAT much. But nothing is for certain.

And if you didn’t catch on, I only entertain ESPP programs with the intent to sell on the day its awarded. I really don’t think about holding onto the stock. But that’s because this stock is NOT on my short list of things I want to hold onto long term. You might have a different opinion.

So you want to predict movements in the stock market?

I get pinged by people every now and then about what should the stock market be doing. Several of these requests have even been from co-workers with whom we share stock options. Of course we want to figure out the best time to exercise options!

I can list some of the behaviors:

  • the stock rallies then slumps by the end of the day due to day traders cashing in on the rally
  • company beats an earnings estimate and rallies over several days, even a few months
  • company misses an earnings estimate by a penny, and drops thirty points
  • news about an acquisition causes stock to rally five points
  • news about a new court case causes stock to drop fifteen points
These are just a few. By themselves, they make sense. But trying to guess what the ACTUAL behavior of the stock is going to be in aggregate has been studied and proven to be unpredictable. And of course I’m plugging in fake numbers. The actuals can vary widely. The time frames can vary

The company that holds my stock option beat it’s quarterly earnings estimate three months ago and recovered from the mid 60s up into the mid 90s. Then it beat its latest quarter earning estimate by a penny. What happened? It dropped five points in after hours trading. The next couple of days didn’t improve much. What’s with that?

I recently formed a plan that I would wait until I got my final BIG chunk of stock, which is coming in the next week or so, and THEN make a real decision on whether to cash out. I have a certain price in mind at which I would sell immediately. My hope is that by beating the latest estimates, it will make it there. But who knows?!?

When I get the money, I hope to buy a big chunk of stock from my short list that I haven’t mentioned yet. I also hope to reload the cash reserves backing my real estate investments. I can then open a custodial account for the latest addition to our family. And after that, there should be enough cash left to buy a new CUV with no auto loans. Maybe just maybe the price will rally enough that I can actually buy two positions.

Metrics of a company

I have observed stocks miss an earnings estimate, tumble 30%, then make the next quarterly estimate and recovery most of what was lost. The thing is, we are talking a time frame of six months. Businesses don’t make huge, fundamental, life altering changes in such a short time frame. But their stock price can rise and fall by huge swaths.

And here’s the challenge. There are many metrics which serve as gauges on how a company is doing. Earnings, profits, debt, etc. There are countless charts to read. Some people in fact go out and develop their entire investing plans based purely on charts instead of the fundamentals of the business. But the key flaw in trying to predict the movement of stock prices based on these readouts is that every single trader applies different weights to each of them. P/E may be very important to you, but less important to others, and hence your decision to buy and sell will be slightly different from everyone else.

This means that situations where you expect the price to rise, others may decide to dump their positions, and it can push the price down. Like I said before: you CAN’T predict the movements of the market. Countless studies have been made that demonstrate day trading based on these factors tends to cause people to lose money.

Let’s study those that HAVE beaten the market consistently

We just discussed how you can’t predict movements of the market. Yet people like Warren Buffett HAVE beaten the market by wide margins 40+ years. How??? It seems sensible to investigate what he does compared to the entire investment industry, right?

Warren Buffett has socked away GOBS of cash. Berkshire Hathaway has something like $30+ billion (with a “b”) in pure cash. He sits there and waits for businesses that have strong fundamentals, quality products, and successful execution to have some “bad news” occur. Or he waits for these companies to miss some earnings estimate and for people to panic and dump stock. When stocks crash because of day traders and investment houses freaking out, he steps in and buys a solid business at a discount.

He either buys businesses themselves, or large chunks of stocks. That is why Berkshire Hathaway owns companies like Geico, Dairy Queen, and Acme Brick Company. But they also own millions of shares of Coca-Cola, Wells Fargo, and IBM. These businesses all built solid sources of revenue and many generated powerful cash flows that Berkshire Hathaway has managed to use to accrue yet more investments.

So in the end, I can’t help you predict the movements of stocks. I can’t suggest when the best time is to exercise your stock option. You have to choose for yourself and be happy with your deal. In my experience, it seems often that as soon as you exercise some options, the price suddenly jumps. Never look back. Instead, take the equity you just collected and put it into better performing places like blue chip, dividend kings or leveraged rental property. Or recharge your cash reserves.

Please don’t fall for worthless promotional offers

Today when I visited my brokerage site, because my stock options had a sudden rise in price, I saw an absurd advertisement.

“Open an IRA, Get up to $600: 60 days of free trades with $10K or more”

What an absurdity! First of all, how much can a single $600 contribute to my retirement plans? You may say every nickel counts, but this is purely meant to pull us on board to someone that is salivating to collect mutual fund fees and brokerage fees from us for years to come.

The part about 60 free trades is a bit ridiculous as well. If I had $1 million and wanted to invest that in ten different blue chip stocks, it would amount to…drum roll…ten trades. I shouldn’t be chomping to do gobs of trades. But that’s where brokerage houses make their money. They want us to become day traders, something that has historically failed to build wealth.

According to one article, 4 out of 5 people lose money day trading, and only 1 in 100 do it well enough to generate a predictable profit. Google the failure of day trading yourself to understand why buying and selling is unhealthy for your bottom line.

Bottom line: your goal should be to rack up over $1 million in assets, because that’s what you need to yield a decent cash flow. What is $600 compared to $1 million? Not enough to be the big factor in your decision for a brokerage.

You should look for costs, features, and the means to manage your portfolio. There are services that let you invest on a monthly basis for free. They don’t have the best websites nor do they have the slickest way to look at your portfolio. But they may afford you the best way to grow your holdings in solid blue chip stocks. THAT should be what drives your decisions, not a few nickels.

The secret value of dividend yields: reduced risk of capital loss

One thing I try to bring into focus in my various writings is not only the value of various investment tools, but also their risk. There seems to a big movement afloat to find the tool with the least amount of risk. Everyone wants to dodge risk and avoid it all costs.

The problem is, you can’t. The only way to grow adequate retirement wealth is to take on risk and then mitigate it. What does that mean? It means that you recognize risks are out there and you actually have options in place if and when the risks become true. Because eventually, some risk factor will kick in.

When it comes to investing in stocks, I’ve mentioned many times how I have picked some strong dividend payers and am accumulating their dividends to either buy more shares or pay off my debt of funding. Do you know what happens anytime I mention this plan for investing in stocks to other people? I get shocked reactions.

“Your buying stocks? Isn’t that risky?”

“What if there’s another melt down?”

“Wouldn’t it be safer to buy a mutual fund or an index fund?”

These are typical reactions from people that have been coached since Day 1 by their employer’s 401K representative, by money-based magazines, by many financial radio shows, and by gobs of articles. The only place you should be putting such important money is into safe, risk free vehicles like 401K funds.

Risk free 401K funds – they don’t exist

When one of your friends tells you to pick risk free mutual fund, tell them there are none. The stock market corrections of 2000 and 2008 knocked the entire mutual fund industry on its side and caused a huge number of people to jump ship. Not everyone did, but in order to satisfy those that bailed out, a lot of funds had to sell holdings when they were down and lock in a loss for everyone involved. To make matters worse, many funds had to maintain their status, so they actually increased fees on those that stayed in!

Looking at my stock position in VNR, I can see how much the total value has grown since I bought it. It’s actually up, but only a few percentage points. But over the past few months, I have been raking in 8.5% yields on a monthly basis. Essentially, if I added up all those dividends and subtracted them from my cost basis, THAT’s how much the stock would have to dip to REALLY impact me.

Every month that I receive another dividend check from VNR is another month that my position gets more solid. This growing value of my stock position isn’t reflected in either the price of the stock or its cost basis. When looking at historical charts for the stocks performance, there is nothing that tilts the graph based on dividend yield, and hence, many people don’t see the time value of holding stocks directly instead of mutual funds.

Another place I can see this magic of secret value growth is my children’s custodial accounts. I opened an account for each and put a certain amount of money in each. I bought shares in two different stocks and set the accounts to auto-reinvest (DRIP) with each dividend. In this situation, the entire price of the stock plus all dividends will gather together over time. While the value of the stocks may slowly appreciate in value, the compound power of buying more shares will also kick in. I can already see that despite both stocks actually being negative from when I first bought them, the total value of the account is higher than the initial seed money I put in. With that, I can see that the money is truly growing, and nobody is taking out any annual fees on the order of 2-4%. (Of course, I’ll need to run this by my accountant so proper taxes are paid.)

Plastic isn’t ceramic, and don’t you forget it

The title of this post might seem a bit cryptic. It came to me as I was loading the dishwasher. I am the pro dish washer loader in the household, and prefer to not be disturbed while doing it. That’s because I’ve learned several tactics to essentially fit as many dishes as possible and thus save myself from washing anything by hand.

A key facet of loading the dishwasher is to avoid letting dishes hit each other. This isn’t good and can break your ceramic crockery. But this principal doesn’t apply to plastic ware. Things like plastic bowls, kid’s cups & bowls, and cooking spoons can certainly touch. Hence, I always try and load the frail items first, ensuring they don’t touch. Then I start eyeballing where I slip in “big” plastic items, and finally, layering in the smallest things. I use plastic’s innate lack of a brittle nature to my extreme advantage.

And I realized this is the same thing I do with my wealth building plan. There is a debate that won’t die over at (the most popular real estate investment website). This subject keeps appearing in new blog postings and forum discussions: stocks vs. real estate. Check out these titles:

You can keep going back and finding more. But they often cite different aspects, and reach a conclusion of which one is better at building wealth. Several cited factors in the various articles include: liquidity, leverage, and efficiency of the market (or lack thereof).

Liquidity: good or bad?

Let’s examine some of these. For starters, stocks are highly liquid; real estate is not. You can get in and out of a stock in seconds. Can’t say the same for real estate. Is that a plus or minus? And here comes the proverbial…it depends. Warren Buffett has said, “Our favorite holding period is forever” and “Only buy something that you’d be perfectly happy to hold if the market shut down for ten years”.

This may say that you should only buy stocks if you are highly confident that you’ll be happy with the purchase for ten years or your entire lifetime. But stocks offer an escape hatch that real estate doesn’t. If something goes wrong, such as a dividend cut to your high paying company, you can sell it and move on to the next item on your short list. Real estate requires much more careful thought. When I had a boon of money dropped in my lap from the sale of my previous home, facilitated by the HELOC on my current house, I immediately lunged at the chance to buy a big position in VNR. I knew the dividend payment rate (8.6% at the time) would trump my HELOC’s 4% rate. I quickly computed that with no dividend increase and no interest rate increase, I could pay off the HELOC in 8 1/2 years and then pocket the difference from there on forevah!

Since then I’ve contemplated whether I should have taken all that money and simply bought another rental property, with the intention of using extra rent to pay off the HELOC. I quickly dismissed it on the grounds that my rental wasn’t liquid enough to deal with unforeseen issues with the HELOC.

However, on another note, I have a stock option with my current company. When it goes public, I’ll get a chunk of change. There won’t be any debt connected to it, so it will be a perfect opportunity to ring up Jeff Brown and pick up another unit or two. The liquidity won’t be needed to hedge a risk in that situation. So once again, whether or not to put a pile of money into an illiquid asset like a rental vs. a highly liquid investment such a stock depends on what risk your are mitigating. And hence the reason I often tell people, “Why pick one over the other?” Stocks AND real estate can be good wealth building vehicles.


Here’s a good one that people usually slam out of the park. Real estate leverage usually trumps stock leverage. It’s possible to buy stocks on the margin, but the rules are all different.

If the value of your stock position goes down, your broker will be on the phone hitting you up for more cash. This is the famous margin call, and something you don’t want to ever experience. It sounds too analogous to someone upping the ante in a poker game and then asking to either up your own position, or fold.

With real estate and fixed debt, no one will be calling you up if the value of your property drops. As long as rent is rolling in such that you can make payments, there is nothing to worry about. 
Simply put, I own stocks without leverage. I own real estate with leverage. I don’t foresee how my wealth building would be adequate with a stock-only approach. History has shown that the rich invest in real estate and it has also been a strong wealth builder for the middle class.

Efficiency of the market

There is a popular theory out there called the Efficient Market Hypothesis. It says that everything about the stock you need to know is factored into the current price. It also says that you can’t “beat the market” because you don’t have an edge. The EMH is highly controversial and has many supporters and critics. I don’t totally agree with it because all you have to do it point out that Warren Buffett has beaten the market by wide margins for over forty years.

Something not directly stated but that seems to get tied into the EMH is that the market is always rational. Essentially, the price of stocks includes all risk, rewards, and other factors embedded in the price. This one I find hard to swallow. British Petroleum (BP) took a big hit three years ago when their stock price fell 33% from the mid 60s down to the low 40s. This was because people were concerned that BP was going to have to payout tons of money in claims amongst other concerns. Today, most of the claims have been paid. On top of that, BP still has a strong balance sheet with much capital, supplies, and is producing as much oil as ever. And yet the price still hovers around $46/share.

In the first article link up above, the author describes EMH to mean that there is no opportunity to go and buy someone’s stock at a huge discount. There is no way to find someone in distress, buy their shares at a low price, fix them up, and then re-sell them at fair market value. This simply doesn’t exist in the stock market, and hence you can’t make the same profits as real estate. He goes on to point out that real estate is incredible inefficient based on the process it take to complete a transaction, thus making it possible for people to create good value.

But again I look at stocks like BP. Other stocks have similar things happen all the time. Some event happens, people panic & sell, and others buy at a relative discount. Then things recover. From a 10,000 foot perspective, this sounds very similar. And it also sounds a lot like what Warren Buffett has been doing for years.

Whereas I might disagree with the author about the definitions about the EMH, there is a nugget of value in all this. A real estate transaction can cost thousands of dollars. A stock transaction is probably less than $10. That alone can make a difference on slowing down the pace of real estate, allowing one to make much bigger gains. Sometimes for better and sometimes for worse. When the value of your rental drops in value, you aren’t as likely to panic and sell. You realize it will cost thousands to sell it and acquire another. So you are driven to do a more careful analysis of the situation. Sometimes slowing things down can help you not panic, a phenomenon many in the investment industry say causes common people to not do well with investment products.

But being able to drop your stock in a heartbeat because a company stopped paying dividends may be just what the doctor ordered.

If you head is starting to hurt, because efficiency, leverage, and liquidity seem to be different sides of a coin (three-sided?), then you’re right. We are simply comparing the dynamics of each vehicle and seeing that they operate a little differently. But dropping one for some foolish rule of thumb can impair our ability to build wealth.

End result

I like having spare cash from my cheap HELOC put towards growing wealth instead of simply residing within the walls of my home. People seem to relish the value of their primary residence except you can’t eat your home. You would have to sell it to harvest the equity.  I prefer doing that now while I still have time on my side.

But I also like the monthly cash flow from my leveraged real estate. Both of these approaches work together in a synergistic fashion and are making it possible to build a better retirement wealth than shelling out 2-4%/year to a mutual fund house.

All metaphors break down, which is why I can’t say that real estate is ceramic or stocks are plastic ware. They each have their pluses and minuses. For example, ceramic may be more fragile to contact, but it’s more resilient to hot water. Plastic can bump against other things, but tomato-based foods need to be rinsed out before hand.  The important aspect is handle each part of your investment portfolio properly and be sure to guard against the risky things as well as take full advantage of their benefits.

The psychological stress of buying stocks

I remember buying one of my first stock holdings, General Dynamics. I had done hours of research. I can still remember the week I was in San Francisco, stomping around to restaurants, reading gobs of investment articles and reading fundamentals reports. In fact, it was all I could think of even as I ate fantastic sushi every night.

When I bought my first position in General Dynamics, the price was about $72/share. And like clockwork the price dropped to $66. Doesn’t it seem to alway do that?

Suffice it to say, I felt a strong, negative reaction. I understood why people panic and sell their holdings in a very real way. I had ready about that phenomenon, but not really experienced so directly.

But I didn’t sell. I knew General Dynamics was a solid company with strong business underpinnings. They are a leading manufacturer of aircraft and avionics among other things. Bottom line: nobody is going to stop buying aircraft, commercial or military, in the next fifty years.

Instead, I put my attention on other wealth building plans. Or should I say, I focused on other facets of my overall wealth building plan.

It took almost a year for the price of General Dynamics to get back to where I had started. But here’s the key: I wasn’t shopping for price. I was looking for dividends. And they were paid on time as expected. Today the price of General Dynamics is around $87.

Now when I buy stocks, I don’t feel the same concern when it goes negative the day after I buy a position. Instead, I count the days to my next dividend payment. I now almost crave dips in the prices. It’s an opportunity because my profit isn’t in price the dividend yield. That’s where a more reliable form of money can be made when you are buying stocks. My wealth building has been going great and cash flows are rock solid. I couldn’t be happier, and I know I made the right decision back then when I took the plunge.

Ready to buy TWTR (Twitter)? Not I

Today, yet another company popular in many people’s eyes made the IPO debut on the stock market: Twitter trading under the symbol TWTR.

This is the perfect opportunity to lay out the reasons I’m NOT investing in it.

  • Twitter is a seven year old company, and has yet to turn a profit.
  • Companies with no profit aren’t places to turn to, looking for dividend payouts
  • They have no history of growing their stock price…because they just started trading.

My wealth building plan is based on strong cash building opportunities. That is where my rental property comes into play. While it’s boring to only get a monthly report on people paying rent, it has gone off without a hitch yet again. A little money moved into my real estate check book, and in three days, a smaller portion of it will flow out to pay off the banks that have empowered me to buy this property.

I got my monthly dividend from Vanguard Natural Resources, despite an overall lack of exciting news and bell ringing on the stock market. I scheduled an electronic payment of that money to help knock out my HELOC a little bit more.

A couple weeks ago, another chunk of money was routed into my EIUL where my total principal value continues to rise, and will not decline in value.

None of this is fancy, but it’s working great. These investments have proven themselves to yield cash and grow over time. Twitter has proven nothing. It might be hot right now, but IPOs aren’t the place where wealthy people make lots of money. The people that make a real killing are the ones that get a chunk of equity from the company. For example, if you are an employee and have been issued options at $2/share (which is totally made up), you stand to make good money. But if you are a first time buyer, the opening price was around $45/share. Big difference.

So, in a nutshell, I’m not diving into Twitter. If you want to, make sure you are doing because you have a solid reason, NOT because you are emotionally connected to the buzz.

For the record, I am fanatical Twitter user. I buy paid Twitter client apps (tweetbot) on all my devices and chat all the time. It doesn’t make me a Twitter investor.

Happy wealth building!

Chevron posts $1.00 dividend

Chevron (CVX) has declared a $1.00 dividend to be paid out on November 18th. This adds up to $4.00/year or about 3.3% yield with stock price around $128/share as of last Friday.

I own a small piece of Chevron in my Roth IRA. But to really put my money where my mouth is, I opened a custodial brokerage account for both of my kids and bought shares of Chevron for both. It adds up to about 60% of the account holdings.  I hope that when my kids reach the age of majority, they will have learned enough to let the shares keep on growing. 
Chevron has strong history of paying and growing dividends.
Heads up: talk to your CPA to understand your options in gifting money to your kids through custodial brokerage accounts. Basically, it’s a tax free donation now, with no tax consequences to you down the road. For them, it’s a long term capital gain from something they didn’t have to set aside. So like I said, be sure to talk to your tax advisor to see if it fits in your plan. 

Real estate vs. stocks vs. EIULs

I’ve written many articles about real estate, stocks, and EIULs. You may be wondering if I value one over the other.

The truth is, they all have their purpose. A lot of investment sites tend to prefer one over the other. For example, a lot of investor websites talk about mutual funds. Some even focus specifically on index funds. To find a site that suggests using multiple tools is, in my humble opinion, a bit rare.

I might have given the wrong impression with some of my articles that I value some vehicles more than others, given the number of times I mention my primary stock, Vanguard Natural Resources. I like VNR, and it provides a good medium to discuss different wealth building options, but it’s not my primary asset.

The way I track my wealth involves adding a new row to my spreadsheet every month for every asset and every liability. But I also have a secondary worksheet where I track groupings of various assets. This lets me observe how my portfolio is distributed.

  • 51.3% of my holdings are rental property
  • 31.7% is personal property (personal home and vacation home)
  • 6.3% Vanguard Natural Resources stock
  • 1.1% other stocks
  • 3.4% Roth IRA and 401K
  • 3.2% exercisable stock options
  • 1.5% cash
  • 0.9% EIUL

That may not add up to 100%, but it’s pretty close. One thing I’ve seen mentioned by others is to not invest too heavily in your own home. A tip was to have no more than 25%. This breakdown doesn’t account for liabilities such as mortgages, so it doesn’t track the fact that I have HELOC-based cash invested in VNR. It simply has the value of my properties and my stock holdings grouped together, divided by the total value of my assets.

The point of this article isn’t to steer you towards a certain asset allocation. And it isn’t to tell you that you must also put half of your assets into real estate. Frankly, it’s the way my portfolio has come together. When I withdrew my 401K holdings, I plowed them into rental properties, and bought what I could. The left over cash was put into reserves to back my play. I have used some of that cash to buy some stock positions, and I have also used HELOC cash to increase my position in VNR. The EIUL was set up so that I could fund it with the same money I was using to fund my 401K.

Essentially, I didn’t start with a top-down plan to spread my money into percentages. Instead, I built things from the bottom-up, picking opportunities as I saw them. I just put together this spreadsheet so I could keep a bird’s eye view on things. And ever since I put this in motion, I’ve seen 89% total growth. This says I’ve already made back the money I lost in early withdrawal penalties. I’m cautious to throw that out there because part of it is tied to estimated value of my rental properties. But I can tell my wealth building plan is doing much better than before with the monthly cash flows I am now receiving.