How I got out of poverty. notice – I am NOT your lawyer, investor, tax guy, but have some knowledge. This is not professional advice, this is just my advice.

Background on me – I WAS an immigrant. I am now an American citizen. I am from the USSR(it was called that then died then we were free to come to the United States) I grew up poor. So poor that minimum wage back in the 90’s was $4.25. This is what my parents made when we first got here. I didn’t know I was poor until somewhere in highschool. So, understand that when I explain the following, it is because I grew up poor, and I HATED BEING POOR. I never complained about it, but when I realized I was there, GOD did I want to get out. And I did.

Teenage years – GET YOUR LICENSE ASAP Get a job. get an old raggedy car. My first car cost $600. And I spent lots of time and very LITTLE money fixing it with my old man and HIS old man. We bonded so much from that car alone. My insurance for that shit car was $400 a year. After speeding tickets(multiple) it went to $800 a year. No fucks given, as it was nothing to me at the time. Keep it until it dies.

Cell phone was $40 a month. Required for me to have a life outside of the house.

I did no afterschool things. I worked. I saved money, and spent money like the young fuck I was, but hey you gotta learn sometime.

Everyday after school I worked from 5pm-10pm. Weekends I worked all day Saturday either opening or closing(at the mall) or did a double. I was paid less than $10 an hour, but I was living with parents, and only had my car insurance/cell phone bill.

When I got out of highschool I had over $5000 saved in my bank account. I burned it on a GF I had from highschool over the next few years. But there was motivation from that and lessons learned.

Early 20’s- Job hop like a motherfucker and go to school. I have a bachelors and a masters. I dropped out of school multiple times as I went into college right after and just wasn’t into it. When I finally decided to do it, I did it all. I went to school and picked up the bachelors and the masters in 4 years instead of 6.

You earn more money by job hopping in your professional career than staying at the same place for multiple years. The correct length these days is 2-3 years. Read more below

Until I was in my mid to late 20’s, I made less than $30,000 a year. This was for many reasons, the first, is that I was going to school, and needed flexible hours. AFTER my degrees, I jumped from 30k total to 30k base plus 30k commissions per year, to 47.5k base plus 35k commissions per year, to MID 60’s plus commissions per year. You can do the math.

the last 3 positions came within 3 years of each other, I have no loyalty to a company, it is all for my best interest. Treat companies like women, understand that they can and will turn on you. Also, treat women like companies, makes life easier

I did this by going into SALES. SALES is the most RP profession ever created. It’s the oldest profession in the world. If anyone says prostitution is, well that’s SALES. People with a hustler mentality do the best. Understanding that hustle is the most important and knowing how and why is what gets you successful. Some rules to get out and stay out of being poor. Lots of these are mental

Iron rule #1. YOU GET PAID FIRST. – 10% of what you make POST tax, goes into your savings/emergency fund. Period. No questions. Some people like to do this with commissions also. I am one of those people. This money can be used for rainy day things, investments, and whatever else you need to get you up into the next tax bracket.

Iron rule #2. If your job has a 401K plan with matching, YOU MATCH THE MAX AMOUNT. It’s FREE MONEY. And it’s PRE tax. Which means if it costs you 100 bucks a check, it really costs you 70-75. Plus, your employer matches. You can take loans out on it(I do not recommend this) but in rainy days it’s possible. They charge you interest, you can tax deduct interest paid on this

Example – your job matches 50% of your contribution to 401K up to 7%. This means if you put in 7%, they will put in 3.5%. IF you put in 10%, they will put in 3.5%. 3.5 max, 50% of whatever you put in.

Some places say “vested” after a certain time. Meaning you have to be there 2 years to get the full vested interest.

Example – If you stay with us for 1 year, you get 50% of what we vested in your 401k. that means it’s a 2 year plan. They have 2-3 year plans also. It is an incentive for people to stay at companies longer. Also, your employer has a stock buying program. USE IT. You get discounts on their stock. When they do well, you do well. This is the only stock I believe is ok for selling. Read more below for explanation.

Iron rule #3. When you invest in the stock market, that money you put into it is gone. DO NOT treat it like you still have it. Accept that it is gone. If you can’t accept this mentality, do not invest in stocks. Stocks low? Buy more. On an annual basis, I put in a few thousand dollars into my e-trade account. I do my own research, I pick the stock, and I buy about $1000 worth of each that I think is worth my time. Then I sit and wait. After a year, I re-evaluate. I bought Netflix in 2012/2013. I’ve never let it go. And I don’t care that it’s dropped so hard. The money is gone. Never sell stock unless it’s for special reasons – paying off student debt, down payment on house, BIG THINGS. Work stocks may make you sell if you don’t work there anymore. This is acceptable. Sometimes you don’t have a choice.

Iron Rule #4. Create a roth IRA. Put $1000 into said IRA once a year when it matures. If you “can’t” then save 100 a month. Place it into said IRA at maturity. Do this every year and then forget about it. I started this when I was in the early 20’s, it has grown past 10k already. I understand that isn’t lots, but once you get to about $60 a year plus in salary, you can begin to start adding more every year. This is TAX FREE when you retire.

Iron rule #5 – never buy new STUFF, and if you can BARTER or get stuff for free, do it.

There is no excuse. As a treat, sure, but on the regular, no. There are plenty of thrift shops that sell brand name bad ass clothes for pennies on the dollar and you can look right on the cheap. I spend $500 bucks on a blazer. But I also spend $2 on the button down shirt that I really like. You like video games? Steam, GOG, greenmangaming.com. sales. Amazon even has PC titles that go for dollars. I wait until a game has been out for a while and I pick it up on sale. Cars? Never new. Ever. I doubt I will own a brand new car until I’m retired. It’s just not worth. I picked up a car that is 3 years old and had less than 50k miles on it. Same model cost 26k brand new. I snagged mine for 16. You like time pieces? Go to pawn shops. Cell phones? Never buy them new. Ever. After a month lots of people hate their new phones and will sell them at a loss. Discount stores – also have “new” clothes from designers at cheap ass prices. My personal exception to this rule is shoes. I will buy new shoes when my old ones are pretty done. I’ve kept certain pairs for 15 years until I couldn’t wear them anymore. When I was a kid and had no money, I would trade food from the restaurant I worked at with the managers of the movie theater for free movie tickets. I traded food for cookie cakes I couldn’t afford. Pretty much anything that can’t be tracked like physical goods, can be bartered for.

I buy things “new in opened box” so I don’t have to pay full price. That $200 item becomes $120. That $80 item becomes 30 bucks.

Iron rule #6. Do not go out to eat too often. If anything keeps anyone poor, it’s this shit right here. Learn to shop and cook at home. This is a life skill. The amount of money you will not spend and or save while simultaneously increasing your own passive value would astound people.

Iron Rule #7. Figure out a way to have a passive income. Also known as marginal revenue which then turns into incremental revenue. Rent on a place, rent for your equipment, ideas, properties, anything. Passive income is where you don’t have to do anything and money keeps coming in. Monetizing a blog, making your youtube channel large enough, interest on large deposits in the bank. Do not be afraid to use other people’s money to invest into things that can build you a future.

Iron rule #8. Never discuss your money. It’s no one’s business. I made this mistake. When you become successful, other people resent you, they are mad that you got wherever you are now. In your mind you aren’t anywhere near where you want to be, but to them, you are already miles ahead. And people don’t like that. People don’t like knowing you are succeeding. They can’t help it. Mothers, fathers, sisters, aunts, FRIENDS, PLATES. Which leads into the next rule.

Iron rule #9. There are no “loans” to your friends/family. Never expect it back. IF you are giving, give once say it’s a gift, and then move on.

Iron rule #10. Always keep your hands in multiple pots. The goal here is multiple. You have wealth spread around in multiple places, so when things go to hell not all of your wealth is affected.

flexible rule - debt can be a financially good thing. When you make enough money, you want to be able to deduct your “interest paid” on student loans, car notes, mortgages(ESPECIALLY MORGAGES) and whatever else. This drops your effective taxable income and you get more money back. This usually happens when you are hovering closely between 2 tax brackets.

edit

]SureImShore - was corrected by this user. Thanks bro.

Not disagreeing with the overall logic, and solid post in general. However, the tax calculation is incorrect: if you make $90751 in 2015, you pay $18481 in tax. If you paid any interest(or an expense) on anything, and drop that by a DOLLAR, to go to 90750, you suddenly only have to pay 5200 plus 25% of whatever over $37450. Which totals $14518. For a dollar, there is a $4000 penalty. Yea, debt is a beautiful thing. 90750 - 37450 = 53300 53300 .25 = 13325 13325 + 5200 = 18525 I'm an accountant and I have experience in corporate and individual taxation. While interest deductions can be good, it is never a 1-for-1 deduction. In the example OP gave above, he indicates a dollar of interest paid can save you $4000. Not only is this incorrect, a dollar of interest paid will never save you even a dollar of tax. Taking the above example, lets assume you paid $10000 in interest (or combined interest/property taxes). Your taxable income goes from $90750 to $80750. Your new tax calculation: 80750 - 37450 = 43300 43300 .25 = 10825 10825 + 5200 = 16025 18525 - 16025 = 2500 Because you are in the 25% marginal tax bracket, the value of your deductions is only worth 25%. While this is an overly simplistic example, from purely a tax perspective, you would be better off not paying the $10000 in interest and giving up the $2500 you save in tax. If you are using the mortgage to purchase a home, or business loan to grow and earn more money, that is a more nuanced definition of "value" end edit

If you do only the first 4 rules, you will have 5 wells of money. 5 emergency funds. That mind shift you get when you know you can job hop because you are financially secure, that is important. That is abundance mentality realized.

My final thought – being poor sucks. It’s nature’s way of telling you something. Adapt or die.