How To Budget Your Finances and Invest Like a Boss — Zoomer Edition

Financial freedom is the goal. Here’s a step-by-step guide with tools/strategies you can use to own your finances.

Don’t Know Where to Begin? Lost With All The Finance Jargon? Start Here

I’m gonna break down a few basic financial concepts and explain them as I would to a 5-year-old. You need to understand the building blocks before you can make buildings 🙂

  • Budgeting — The art of seeing how much money you make vs. how much you spend. (Ideally) good budgeting is making sure you make more money than you spend.
  • Debt — How much money you owe someone (or someone owes you) is almost always accompanied by interest.
  • Interest Rate — How much money is made from an investment. AKA ‘money working for you.’ You invest $100 and have a 1% interest rate per year, you will have $101 in 1 year.
  • Compound Interest — Derived from a ‘compounding formula’ where previous money is reinvested. Given enough time, a small sum of money turns into ridiculous sums of money. Like the previous example, your $101 at 1% interest becomes $102.10 next year, and so forth.
  • Checking Account — Normal bank account to deposit and withdraw money. Has little to no interest rate.
  • Savings Account — Similar to a checking account, just a slightly slower rate of depositing and withdrawing money (2–3 business days). Has a low-interest rate (usually below 1%).
  • Inflation Rate—Economic concept that prices of goods and services increase yearly, so the cost of living increases over time (at about 2% in the US). Ideally, you want your investments to be greater than 2%, so your money doesn’t lose value over time. Ex. $100 in cash today will be worth $98 in 1 year in terms of ‘buying power.’
  • Brokerage Account — A place to buy and sell things on the stock market, bonds market, crypto market
  • Individual Retirement Account — Also known as an IRA, is a super useful retirement account. There are two types: Roth and Traditional IRA. ROTH, you pay taxes upfront and get tax-free growth. A normal IRA pays taxes when you pull your money out. Read more here
  • Stock Market — A marketplace to buy and sell ownership of companies.
  • Options Market — Also known as a ‘derivative’ market, where Option Contracts are ‘derived’ from the Stock Market or Futures Market. This is leveraging money to (ideally) make more money in a shorter period of time.
  • Futures Market — A marketplace to buy and sell commodities and futures for a future date. Such as buying Gold or Oil.
  • Bond Market — A marketplace to buy and sell ownership of countries’ debt and or companies’ debt

High-Level Steps on Achieving Financial Freedom

I started with these steps, courtesy of Dave Ramsey’s Baby Steps, but tailored to younger generations (Millenials, Gen Z, etc). Also, Pricelesstay is a solid Gen Z resource on Instagram

  1. Start by saving money for your emergency fund; Dave Ramsey suggests $1,000. The section below shows the high-yield savings account I recommend for this.
  2. Keep your cost of living low and budget yourself. Got an extra Hulu subscription or old gym membership still active that you don’t use? ‘It’s only $10!’ Let those subscriptions pile up, and it surmounts to quite a bit. Have high bills from companies like your internet bill? Try calling and negotiating that you’ll leave if they don’t lower prices. I’ve done it with AT&T, you’d be surprised that it works sometimes! Another tip is to have a separate debit card that you use solely for discretionary spending, or in other words, a card that you set a personal limit on, and use it for day-to-day transactions. Some budgeting tools include Nerd Wallet (track spending across different accounts), Wealthfront (net worth analyzer), and Yotta for my self-budgeting Debit card.
  3. Pay off all debt besides your home (if you own one). Look to pay off debts from the highest interest rates to the lowest interest rates. In this case, a huge emphasis on paying off your credit card debt and student loans since these have ridiculous interest rates; 15–30% on credit cards, and if you default on student loans, you won’t qualify for business loans, home loans, etc and your future credit-worthiness will be shot down.
  4. Invest. ONCE the previous three steps are completed, THEN you can begin looking into investing. Look for investments that yield at least over 2% to surpass inflation rates. However, I definitely recommend finding strategies that yield double or even triple-digit returns. Whether through a hedge fund (section below), investing in real estate, options trading, buying and holding high-growth stocks or bonds, it’s up to you! Also ideally, automate your investment strategy so that a portion of your paycheck/bank account automatically gets invested, so you don’t need to think twice about it. I go over more details below.

Concrete Tools and Investment Strategies

Dave Ramsey and other financial gurus are great, but I like easy-to-implement tools. So here are all the things I use to manage my finances all from my phone

  1. Wealthfront to visualize my net worth (assets and liabilities like brokerage accts, checking accounts, saving accounts, and credit cards). I found that seeing my net worth, along with it changing over time, is incredibly motivating and makes ‘getting wealthy’ much more attainable. It helps you go from ‘I wanna be a millionaire,’ to ‘I want to make $1.5 million over the next 5 years.’
  2. Titanvest as my hedge fund/retirement accounts— I have my Roth IRA and an individual account set up. Mine are up ~28% and ~32% for the year — rated best Robo advisor by US News, went through Y Combinator, Stanford and UPenn founders, and the list continues. Not to mention, only $100 is needed to invest upfront (as opposed to hundreds if not thousands on other platforms). For me, having my investing automated with little to no fees is ideal (1% fee, minus .25% for every friend you refer for both of you for life. Here’s my link).
  3. Credit Karma for everything related to credit. From seeing my car value (depreciate month over month,) to applying to credit cards and getting entry rewards (a side hustle known as credit card churning) along with knowing your approval odds before applying to a credit card or loan. I 10/10 recommend Credit Karma. Not to mention, Credit Karma is having monthly $20K giveaways if you invest $1 or more into their Credit Karma Savings Account. Not a bad ROI if it pans out!
  4. Robinhood for personal investments. Now there are a couple of brokerage accounts you can use: TastyTrade, Think or Swim, Webull, you name it. I just happen to like the UI/UX of Robinhood. If you want to get serious about day trading, Think or Swim and Tasty Trades might be ideal with Options trading especially. But if you’re like me, I’m pretty hands-off and prefer my stuff managed. You can buy ETFs (diversified goodies) and some stocks or cryptocurrencies on Robinhood. I’ll put a list of stocks and ETFs that I personally would recommend at the bottom of this article
  5. Marcus by Goldman Sachs is my ‘high yield savings acct,’ although that went from ~1.8% to ~0.5% annual returns because of rate cuts from the Federal Reserve, so it’s more of an emergency fund for me. Although, definitely not ideal for long-term investing. This is where my ‘3–6 months of runway’ from Dave Ramsey’s Baby Steps is stored for me. However, I like the app; it’s easy to use, there’s no minimum balance for APY, and it’s backed by a big company (Goldman Sachs)
  6. BlockFi for high yield APY on USDC (US Dollar Coin), Dai, and or Gemini USD (I have my portfolio split between all 3 to diversify). Coming up at 9% APY (as of December 2021), this can beat a Savings account and even investment accounts in a volatile market. This has become my go-to ‘safe, high ROI’ investment.
  7. Yotta for a new type of bank account (like a neo bank) that rewards you (I’m at 4.6% APY for the month) by putting money in and referring friends — you’re my friend now ;). And the best part: weekly sweepstakes where you can win: $10 Million, a Tesla, or even just a couple of cents. Nonetheless, still beats out a traditional bank account. Plus it’s FDIC secured, popular on Forbes and Bloomberg, etc.

Now before going into the final section let me reiterate; I am not a registered financial advisor. Anything you invest in is under your decision. These just happen to be part of my investment philosophy and are entirely my opinions. I am not responsible for any of your financial decisions.

List of stocks recommendations

Value stocks that are here to stay (in order)

  1. Amazon — Shoutout to Professor G from NYU and his approach from this book. TLDR: Amazon is everywhere. Healthcare, retail, AWS servers, you name it. Amazon is the goliath with vertical mergers, dominating every market aspect. I don’t see Amazon going away any time soon.
  2. Google — 90% market share with all internet searches. The second biggest search engine is YouTube, owned by Alphabet (Alphabet also owns Google). Don’t believe me? Just Google it 😉 Plus when a company becomes a ‘verb,’ chances are it’s not going anywhere.
  3. Apple — The ecosystem with Apple hardware is entirely unique to Apple. iPhones, Macs, iWatches, you name it. Apple has such a strong brand image and ‘Why’ behind the company, it is unmatched; the reason that Apple can charge so much for products and people happily wait in lines to get them.
  4. Facebook — The data king of social media. I don’t see Facebook dying out soon with an ever-growing portfolio by buying out every new social media platform that grows on the market.
  5. Tesla —A lot of people may disagree with me here, but given the ridiculous growth of Tesla, the hilarious clout and leadership Elon Musk brings, and most importantly the development of Stage 5 Autonomous Vehicles, it’s definitely a Buy from me. Also, I have tons of FOMO from not buying in years earlier, so if/when Tesla dips, I’ll definitely be buying some shares.List of ETF recommendations

List of companies I have credit cards with and ranking them

Through Credit Karma, I have opened up credit cards with various companies. However, some are a hassle to work with. From having a wonky app to being unable to redeem rewards points up to a certain point. Here are the companies that I like (greatest to least). I picked credit cards with ‘cashback’ rewards and no annual fees.

  1. American Express — High credit limit, easy to use the app, can redeem rewards at any point. Absolutely love them.
  2. Capital One — Decent credit limit, somewhat wonky app, can redeem rewards at any point.
  3. Discover — High percent back on some purchases (5%) but only on a tiny fraction of your credit limit ($75 at 5% back, then 1% only). A bit awkward of an app to use. Able to redeem rewards at any point.
  4. Wells Fargo — Highest credit limit is given to me (granted I also have my Checking Account with them). Downsides: Can only withdraw cashback rewards once you hit $25. Great customer service.
  5. Bank of America — Annoying application, absolutely tiny credit limit given, issues with double paying, and having to hassle on the phone to get my payment back. Maybe I just had a bad experience, but I didn’t like using their credit card one bit.

Resources to continue learning from

You could go with the traditional Wall St Journal, Seeking Alpha, CNBC, you name it. But if you want an easy-to-understand email letter, here are the ones I personally enjoy:

Robinhood Snacks

Chartr Daily

The Hustle

Phew. This took me quite some time to write! I hope this helps you on your financial journey.