The purpose of this blog is financial ideas that move you from middle to upper class.
99% of blogs I’ve found are strategies that either (1) move you from lower to middle class, or (2) optimize middle class money.
If you’re looking for other blogs that share my goal, I definitely recommend Financial Samurai.
Conventional financial milestones for a middle class are probably like Dave Ramsey’s baby steps:
- Buying a house
- Paying off debts
- Maxing out retirement contributions (an annual event)
Cool. Those are totally fine (and totally boring). If you’re stuck in debt, worry about that before you go further.
Milestones for the aspiring monopoly man
These are good milestones to me because each one is both attainable has a real-life consequence. So once I’m there, why not celebrate it?
1. No longer qualified to invest in a Roth
When you make too much money, you can’t contribute to Roth. Here are the 2023 limits.
If you’re single, it’s $153,000. If married, it’s $228,000 (with lots of caveats).
Weirdly, it seems to punish you if you’re married? Maybe you get credits for being married somewhere else. I don’t know, I’m not an accountant.
2. Becoming an accredited investor
Being an accredited investor means you can invest in startups and other “private securities offerings.” Basically, it means the IRS trusts you to not ruin yourself by investing in a startup.
To hit this milestone, you need to either make over $200,000 from the same employer for two consecutive years, or have a $1,000,000 net worth.
3. Able to live off passive income
Obviously, we’re all already investing in something. But are those investments paying you dividends?
If not, it’s chiefly speculation. Yes, every asset not producing cash is speculation.
Even my precious Bitcoin ₿.
Speculation isn’t bad. But you have to recognize it for what it is.
You can’t live off of it.
- You buy a business, hire a manager to run it (who makes most of the money) and you collect your own “dividend” from it.
- Buy real estate like every other rich person, rent it out (or AirBnB it) and collect that cash while storing cash in the home’s equity
- You buy dividend stocks, which pay you out every quarter.
These are all legit strategies. Pick something you like. The stipulation is it has to be largely passive, which is a buzzword way of saying it can scale beyond your time investment.
Pick your number you know that would let you live minimally. Is it $50,000 a year? $100,000 in a HCOL area, or because you have a family to take care of?
If your investments can return that much to you after expenses, you’ve just hit a major, major milestone.
Now, if you got sick or injured, or needed a break from your regular work, you are totally free to.
4. Internationalize your presence
This is my bougie dream.
There are 100 ways to do this. Here are five I’m interested in:
- Getting a second passport
- Open a foreign bank account (be careful on this one with taxes if you’re American)
- An investor’s visa lets you stay in a country, e.g. Portugal’s Golden Visa
- Buy and renovate a run-down house in Italy for €1
- Get a boat (either commerical or private) and flag it to another country
There are a host of interesting reasons to do any of these. But I’ll be honest—half of the motivation it is just for fun.
All of these could be terrible ideas for your personal situation. But maybe it sparks an idea that does make sense for you. E.g. if your parents live back in the old country, maybe you could buy them “cheap” property they can retire on with some kind of crop so they themselves are always taken care of. Then you can just keep the property in your name, paying off taxes as a gift to them, and also a way to long-term diversify your own wealth.
Obviously the above example is very country and culturally-specific. But have a think on it.
All of these milestone are personal to me because I find them motivating.
Once you’ve hit the conventional milestones (own a house, paid off car) then it’s easy to get bored.
Setting a real goal gets you out of that rut.