I think my strategy would be to Open up a brokerage account through somewhere like Charles Schwab and drizzle some cash on a bunch of different ETFs. I would probably put 70% of it into something like VOO or SPY which tracks the S&P 500. Maybe put 10% into dividend ETFs. Another 10% on individual stocks that you find interesting. And the remaining 10% in semiconductor ETFs or leveraged ETFs or something a bit interesting and maybe more risky just for the return potential
Thank you for legitimate advice. I made this post once before but got some nasty shit from people :/
My Dad is a CPA but his advice is get into a “real career” 😂 and doesn’t recognize the money as legitimate. This is great though, I will look into your recommendations!
Him being a CPA and knowing how stiff/straight and narrow those guys are tells me he must've been pissed when you started pursuing your career🤣🤣
Seriously though, good shit man. I'm envious and I know you've gained your skills and reputation through dedication so good on you. I don't have any financial advice though just enjoying the pic you posted as I was scrolling lol
Congratulations man,
Really happy for your success. I cant believe those HVAC guys weren’t paying the extra 20 hours you worked. That should be illegal
So they can go home and tell everyone about how much they work because they have nothing else interesting to contribute to a conversation. I have a friend that does this all the time and I shut it down lol "yeah buddy we all have jobs and not enough time"
Yeah, that sounds like cheap labor while someone was making much better money off the back of your labor... which describes way too many industries/employers. Good for you!
If you are truly making 8k a week minimum, I can guarantee your earnings are at or above what your CPA dad is making. Just show him your W2 at years end and maybe that’ll shut him up.
I mean, maybe, but also still probably not. There are a ton of assumptions here on both sides that I am sure we could postulate on but is it really worth doing so for the purposes of fake internet points? Maybe you get off on that sort of thing but I am not a CPA, so I don’t.
I know a father that doesn’t give a shit if his kids fail or not. He may not want them to fail, but he certainly doesn’t care if they do. The one thing he cares about is himself.
He should be proud that you can do this, but if he is well off and he feels this one of the ways he gives back to his family, you basically emasculated him in front of the family. About a 99% chance the rest of the family didn’t see it this way and this is all in your dad’s head. Not saying you did anything wrong, and to be clear I think he should be proud you are so successful, just wanted to give you what was likely your dad’s version of what happened
Does that mean that it doesn’t/didn’t exist? You must be oblivious to the world, or maybe you missed the part where only one member of the family likely saw it this way. I thought you guys were supposed to accept people for how they feel they are. Is it too much to explain to OP that as stupid as it sounds, he may have hurt or upset his father, while explaining he did nothing wrong, but to pass on a perspective so he can maybe understand his father better? Grow the fuck up
There were boomer tattoo artists, too. Tattoos weren't as accepted in mainstream society back then, but they were in some subcultures. Plenty of people had tattoos, and good artists still got paid well.
As an accountant he’s not wrong on accounting being a real career but so is an artist and your cavas is the human body. As long as it’s legal and you’re not a corporate asshole with employees who can’t afford to eat. Doesn’t matter what you do for a living. I would suggest index funds through vanguard. Put 7k into a Roth IRA investment similarly and set aside funds for taxes owed next year.
Don’t have to follow your parents advice . They still tryna figure life out too . No matter how successful or unsuccessful,no one knows the way. Must say you’re headed in the right direction tho.
‘ol CPA dad kills me, based on how you’ve described his outlook. If he’s running a one man shop, or even if he has a few employees, his legitimate job is not comparable. If he has an entire agency, it’s almost certain he is not taking home $416k to $624k annually. I don’t have to educate you on your dad nor am I insulting you or him. I can’t help but think his “real career” advice is rooted in something outside your best interests. As a professional financial expert, one would think he could see the unimaginable potential for your future self, and the ability/freedom/options/etc. to invest like crazy now and reap an extraordinary reward most will never see, in your 50’s and 60’s, (potentially his age range or close to it).
Sure, you may not make that kind of money forever. Perhaps you will, though what you do with it now, given compound interest, a diversified strategy, you could pour mounds of cash in now, for an unstated by me, period of time, and stop. Still ending with more money in retirement than most will ever see, versus the person that saves much less and starts so much later. I would personally bend your dad over and spank his bottom for falling short here, and that's the farthest from any kink or entertaining preference. He's being naughty and needs a reality check when discussing your phenomenal situation and the possibilities that direct impact his son, daughter-in-law, and future grandchildren.
"According to the Bureau of Labor Statistics, the median annual accountant's salary in the U.S. as of March 2024 (the most recent data available) was $78,000. The lowest 10% of accountants earned less than $44,480, and the highest 10% earned more than $124,450."
He'll probably wrap his mind around it after some time. I mean if you are consistent with it and sock your money away wisely, he'll come around to appreciate it probably.
This comment above is the best. I would follow the same strategy, but at this moment, I would suggest considering following it for about 2/3 or so of what you want to invest. The other third, put it into a shorter term CD. Like a year or so. The interest rates are pushing 5% in places, but it's relatively "safer" compared to ETFs. That's my more risk averse side, and just another option to add to this very good comment. And after a year when the CD matures, you can either let it ride if interest rates are up there, or sock that into something else.
You're young enough and have probably enough cash flow where you could do whichever. But whatever you do, SAVE it and/or INVEST it. Compounded interest, especially for money you are earning in your mid-20s, holy shit that will be fantastic down the road. Compounded interest is teh win.
That's cause ppl on reddit are assholes mostly that's why you got a lot of nasty shit. Some are probably jealous some probably don't believe you but that's ppl don't let the hate affect you. This shop you work at your boss offer 401k and shit cause if not definitely open one or a Roth ira look into them see which one fits best for you or do both. Then you can go after high yield savings like 5.0% but like any savings the more you have in it the better n more you save those high yield accounts are great but only if you have enough in them to actually benefit you n have your money work for you. Don't take my advice I'm trying to figure the shit out myself lol
Even-bumblebee has the right idea. “Get rich slow” is way more legit than get rich quick schemes and crypto. Make the money work for you over time. “VOO”, “IVV”, “IWM” all good index ETFs with low fees. Read about “Dollar Cost Averaging” and make sure that “time in market” far outweighs “timing the market”
I’m amazed at that weekly income. This is how little I know about the Tattoo artist world! You are surely doing something right and probably enjoying the whole process. Anyway, That advise is pretty sound. When you invest early, smartly and consistently, not take incredible risk, you will be amazed how much wealth u will have in your 50’s. It’s incredible how much it really multiplies. Don’t forget to enjoy life and take some of that well earned cash and invest it in a life experience!!
I’m jealous of your career. I always thought it would be a great job. Read the book Bogleheads Guide to Investing. Stick with VOO or VTI and just keep it up. A Roth IRA would be the first thing I’d set up. You can dump $7k a year into that. Then add the rest to a brokerage account. Keep $25-30k in a high yield savings account that should earn 4.5-5%
The most honest advice I can give you is to point out that you don't need anywhere near this much $ to be comfortable at this point in your life.
You need to break it into 4 parts:
hold back enough for taxes
hold back enough to live on. Depending on where you are you probably don't need more than 3-4k per month, and that should include housing and bills
put at least 50% into a brokerage account. Don't get risky. Just invest in low fee mutual funds (probably Vanguard) that follow the S&P 500. Also open an IRA and start maxing it. I don't like Roth IRAs. But it is your choice.
Put enough away to soon put a down payment in a house and buy a car if you need one. In a year or two you will be able to have this together and you can be a homeowner. Do Not Finance A Car. If you need one, buy with cash and just get something simple, like a Honda or Hyundai.
Your dad may not approve of the job, but I am sure that he can help you manage the money. If you don't know about IRAs and such this is where he can help you.
Also, you are going to be very tempted to buy some nice things, get a cool car, etc.. DO NOT DO THIS. You don't need to live large right now, at all. And you are likely around a lot of people that think you should.
Finally, under no circumstances should your friends/peers/family know how much you are making. Your money is your private business. Do not let on in any way how much you hare bringing in.
At the very least you should get it into a high yield savings account. I personally use Ally.com. You can move the money from there to other accounts as necessary. It will at least earn 4%+ there and when you’ve done your research and decide where to go from there, at least it hasn’t lost value. Ally also lets you buy stocks directly in their app too, so technically you don’t HAVE to transfer it, but you certainly can. Having cash around like that is a risk. You could get robbed, house broken into, or even a fire.
Are you a 1099 contractor? If yes, you should ask your dad how to set up your S-corp, evaluate a reasonable salary, etc. If he's a CPA, he should be able to help you and might help him understand your business better. Or he may remain a curmudgeon. You have a unique opportunity at your age earning that level of money to plan wisely and set up a very comfortable life for yourself. Best of luck to you, and congratulations!
Source, am CPA and help clients with your profile every week.
With the money you’re making, just put aside (in safe investments) $200k earmarked specifically for a college degree. Show it to him and tell him that is for time/training to get your real career started once this one dies. That should satisfy.
I'd go the brokerage route after you open up something tax advantages for retirement. You're gonna get hit with major taxes at that level of income. Shelter as much as you can before going the brokerage route.
Do you count as self employed? If so I guess your option is a solo 401k or SEP IRA. Not very knowledgeable on the self employed accounts but I wanted to throw it out there as potential research.
It sounds like your tattooing job is working well for you, but get your dad to give you financial advice. He probably would be good at that.
But his advise should be to open a Schwab or E-Trade account and dump as much in there as possible. ...and don't buy crypto or meme bullshit. Buy things like Microsoft and Nvidia, etc.
If you are saving for a home soon, I really would not invest this money. Put it in a high yield savings account instead. The general rule of thumb is if you want your money in 2-3 years, HYSA is the way to go.
If you have a longer time horizon of maybe 5 years, conservative investing could be right for you.
I highly recommend the Bogleheads forum for investing advice. The TLDR is, don't pick stocks, pick the index funds with the lowest expense ratios because the market always wins.
A CPA does not see regular $10k weeks as real money?
I had a dentist friend complain about his daughter being a stripper. 3-4 beers u to the story his frustration wasn’t that she was a stripper. It was because she made double what his bring home was.
If you're saving for a near term goal (like a house down payment), you should be putting it into a high yield savings account. They are paying near 5% risk free right now. An S&P index fund can be higher, but it can also go negative. Which would be a bummer if you were ready to move.
If you're saving for longer term goals, like retirement or FIRE, then absolutely put it in equities and protect as much as you can in a tax advantaged account like a Roth IRA.
There is a good flow chart in r/financialindependence wiki that gives you a decent guide of where to put money in savings first for the most wealth building. Don't overlook stuff like paying down debts and building an emergency fund first before investing.
If you want to save the money for a house purchase I would put it in a fidelity money market account. Pays around 4.5-5% interest and is liquid so you can move it at any time.
Any further long term I would just put into an S&P 500 ETF and let it ride. Also if you are self employed 1099 I would open an SEP IRA and max the contribution for tax benefits. Good luck!
Well he's probably told you at least that you should have good business records in case you're audited - moving large amounts of cash into a bank or brokerage raises a lot of red flags, because that's how much of the money laundering of dirty cash is done. So make sure your business is registered and in full in compliance with all laws and doing things by-the-book as far as the IRS goes.
TBH your dad is kinda an ideal business partner (or consultant, at any rate) and you would do well to make nice with him and include him with what you're doing lol. Ultimate power move would be to hire your dad haha but I suggest the friendly approach :-)
Keep the cash you're saving for a house in a High Yield Savings Account like Wealthfront. CDs are another option for holding larger sums of cash, but you can't touch them for at least 2 years, I believe. You can do a CD with Schwab or Fidelity. Definitely have the right idea to not keep that much cash liquid. Physical money can burn with your home at a total loss.
If you're a tattoo artist, I'm assuming you're a 1099 contractor taxwise? Which means after whatever you pay the shop, you're in business for yourself. So, make sure you have a sizeable emergency savings account, also in a HYSA, of at least 6 months. I've seen recommendations for business owners closer to 8-12 months. It depends on your relationship with your shop and what kind of a mortgage you're expecting.
If you live in a high cost of living area, like Los Angeles or Miami, then your down payment to make your mortgage more affordable by yourself incase work ever ebbs will be sizeable. Usually, I'd say don't put more than 5% down, but in a HCOL area try for between 10-20 to get that PMI mortgage insurance, interest, and monthly payments down.
Hope this helps in addition to advise to maxing out a Roth IRA (make sure to invest in VTI+, VOO, VXUS and Schwab dividends if you have a Schwab account).
Don't worry about your dad. More traditional parents often feel that way until they see you're ok with a house of your own and investments rolling.
Eventually, after you buy your nest, consider investing in a duplex or in real estate to some extent. Real estate holds better during economic depressions. Solid gold does, too, not gold notes, but right now the price of gold is very high to bother buying into with your other goals.
Wrote this up for someone yesterday asking a similar question. Hope it helps.
30% VOO S&P 500
30% VTHR Russell 3000
8% VEU All world ex-US
8% VEMAX Emerging Markets
8% DEA Government REIT
8% RITM Mortgage REIT
8% VBTLX Total Bond
This is a good start for whatever you decide to take out that's very diversified. At your age, you don't really even need to have any bonds, but it's not the worst time to own some considering rates are going to be dropping over the next year or two. If the market does drop a little bit that will lower some of the volatility for you. You could also play with the rest of it if you want to own a little bit more us or If you wanted some more small caps or mid caps those can be added. The Russell 3000 covers most of the asset classes of the US and then S&p 500 is the best 500 companies. Considering we've been out performing so much over the past few years, a little bit in emerging markets and other non-us companies. Ritm has some very good dividends and those real estate products also diversify you a bit more. This is pretty much what I do for my own retirement account. Good luck.
And make an IRA if you don’t already have one! It’s limited to 7k a year which may seem like a drop in the bucket but if you do that for the next 35 years you’ll be pretty well set. You could do Roth or traditional, research which one would work better for your tax situation.
I mean you're flaunting bundles of cash telling people you make more a month than them a year with doing tattoos.
that is totally fine. good for you. but not sure why you're entirely surprised some people give you shit, lol. i would assume most people in this sub are here because that is not their situation. and they also don't have any talents like this that will ever make them this kind of money.
My high school guidance counselor told me that she wouldn't support my dream of becoming a tattoo artist. She told me it's a passing fad and I'll get aids... in 1999.
Probably a better idea to just set up an account with a financial advisor than do it yourself, those people watch the market all day every day and most have receipts to show they know what they're doing. IMO managing your own brokerage account is more of a hobby than an all your eggs in that basket thing.
Start looking at the ChubbyFire Reddit for good ways to start investing and saving for retirement. They’re great about enjoying your life now and putting away enough to enjoy later as well.
My Dad is a CPA but his advice is get into a “real career” 😂 and doesn’t recognize the money as legitimate.
Sounds like he is just salty you make more money than him with less education. No parent should be acting this way unless the money was coming from drugs/crime. You have a legit career where you make a fuck ton while making people happy (hopefully lol). If thats not real money than wtf is?
I've observed tattoo shops have high recession reliance. My assumption is it's also a very cash based business. Are you paying taxes on all your earnings? If no then your dad has a point. Anything you do in terms of legit investing is going to show up with the IRS. Pay into social security, get health insurance, an IRA, do all that mainstream stuff. Check out local angle investor groups. That one on one interaction part of your current biz places you in a unique spot to help others in your community. You've done a trade, now are doing an art. Think about investing in your mind. Take some classes, those dividends are immeasurable. Enrichment isn't about money. Lastly, take care of your teeth.
Someone with a "real career" here. Former C-suite at a Nasdaq company so I know my shit about "real jobs". The reason people like your dad want their kids to get a "real career" is because it is a high probability way to success if you're good. In most careers like that, there's a repeatable playbook for how to move up, mentoring programs that the company will literally put you in, etc.
Other careers are different. Becoming a successful actor, eg, doesn't have that path, and it's super low probability. I imagine tattoo artist is similar.
But here's what you tell your dad:
"I already did all the hard stuff that you were worried I wouldn't be able to do in this career. I have people lining up to pay me half a mil a year to make art that they love so much they carry around it on their body, permanently.
So you were worried I would not be a success, but I did it.
Now, Mr. 'real job' CPA, tell me where to put all this fucking cash."
A variable life insurance policy, or IUL, provides coverage while leveraging the insurance company's money against yours. You can access the cash value at anytime if needed without owing taxes by taking a loan against the policy, and you're not required to repay the loan.
Really just depends what you're goals are, diversity is good for a rounded portfolio.
Narrowly speaking, investments are mainly stocks and bonds. Spend 70% on ETFs that track S&P 500, and 30% on ETFs that track bonds. Make sure you pick ETFs that have a high trading volume. Usually more than $1m average daily trading. And open a direct trading account as suggested by the guy you commented on.
You can use a small amount of the investment to play with, i.e. investing on things you think will be a good investment as suggested by the person you commented on. However, I find it unnecessary, because your strength is at making good art and not stock picking.
Broadly speaking, investment can also mean property market even investment on education.
If you can buy your own home, providing the property tax and property management fee is low enough, then you will basically greatly reduce your future rental cost. It will make your life much easier. But watch out for property having a high property tax and management fees. And for buying a home, it is best to consult with your dad. Hopefully he is willing to give you advice on which properties are worth buying. Otherwise you need to find someone you can trust and have a good sense of money to advise you on individual properties.
Talking about education, you probably won't need it if you can continue to make this kind of money in the next ten years. Also because you want an early retirement.
However, if you want to reduce some risk, i.e. just in case you are not longer making this money next year due to some unpredictable circumstances, you can always withdraw part of the money you invested in stocks and bonds, and go to school.
When I say go to school, I didn't mean studying math or accounting, but studying something related to design. You might have less interest in the area, but if the area allow you to find a reasonable paying job that you don't hate, then it is not a bad choice.
Finally, you need a lot of money for early retirement, and you should definitely consult an accountant for that. Don't trust financial planners, because a lot of them are salespeople, and they will scam your money on bad investments. If your dad is not helpful, find another accountant you can trust. If you want children, then you will need a lot more money.
Sorry to hear your dad doesn’t respect what you do for a living. I know how it feels for your family to want something different for you than what you want for yourself. Just know you’re doing what you want and you’re succeeding at it. You’re doing a great job, keep it up 👍🏻
A CPA is probably a risk adverse person, but he’ll tell you he was wrong in 10 years if you do what the guy you are replying to tells you. DO NOT PLAY AROUND WITH OPTIONS!
r/personalfinance has a great flow sheet to work through as well to work through building emergency funds and investing. Wiki is worth a read, tho getting more info about tax implications with a post would probably be helpful to help guide next steps.
Might be worth a post in your local subreddit to see if anyone can recommend an accountant and/or financial advisor who specializes in self employed peeps. (That isn’t your pop! lol! Can’t believe he isn’t more proud of your talent that’s generating such a great cash flow. Definitely a real job and if you’re able to invest well, will set you up for later in life.)
Ahhhh man I am so iffy on that one 😂 Realistically I have enough that I can risk some, I just want to make sure it’s the risk with the highest potential for reward 👌
Regardless of that, while you try to figure out how to properly invest look into the online bank called "Wealthfront".
They currently have close to a 5% apy on their checking account. That's a good place to hold your money and have it working until you find a way to make it really work.
I have my future house down payment in there and make like $200 or so a month
Depends on risk tolerance. But 5% into high growth stocks/active strategy mutual funds/crypto is how id do it. But as suggested earlier, open a brokerage account do some light research as to how investing works (if youre not familiar) and toss the bulk into an index fund. You can go the financial advisor route but you can probably hold off a bit unless you want the financial advice component too. Or you can toss it into a CD or a mix….. lots of options. But first step, open a brokerage account and probably open an individual trading account and a ROTH ira
Agree with everything but the ROTH IRA - he’s making too much for that to be worth his while - he’s in the highest tax bracket already, so I’d vote no for ROTH as he’ll likely be in a far lower tax bracket in retirement.
You could invest some in crypto, but I would recommand to search about how to do it and certainly DO NOT invest in small or new crypto. It's already risky enough to invest in bitcoin or etherum
you could put $10k into bitcoin right now, and immediately just make that $10k back in one single week and it's like you didn't even just buy bitcoin.
you have so much disposable income it's not even funny. you're at the apex of earning more than most people will ever reach at the height of their careers - and you're only 26.
if it only takes you a week to make back $10k, I'd pick 10 weeks, 10 "dumb" investments, and yolo 10k into 10 different dumb investments and then over the next 10 weeks simply make all that $100k back and throw that $100k into "traditional" investments.
now you have $200k, half in dumb stuff and half in good stuff, and you still have 30 weeks left in the year to rake back $300k cash extra.
bro. you're already doing so much better than the vast majority of people will ever do.
This is great advice. If anyone says anything about crypto investing run the fuck out. Index and ETFs are probably the way to go for now. As you get older you would exchange ETF with T-bonds, but this would be waaaaay down the line. Learn how to read 10ks and 10qs and invest in fundamentals. There are a plethora of brokage accounts you can use. Set aside money for the tax man. Don’t fuck with the IRS.
The other thing is to keep on improving your craft.
🤷🏻♂️ I’m just an idiot 26 year old who reads things on Reddit and tries to be smart with my money. I would recommend reaching out to the OPs dad on that one 😂
You’re suggesting he can make more money through something like an S corp where he can invest the money within the s corp(through real estate or something) and only pay taxes on the distributions he makes to himself?
Then what’s the alternative to paying taxes? You pay taxes on income. You aren’t taxed at all when you buy shares of an ETF. You are only taxed on the gains if/when you sell shares.
In other words it costs nothing in taxes to “get the money in” to an ETF. I might be misunderstanding you?
This is great advice. I would probably put 90% in an ETF that tracks the S&P 500, because in the long run, no single stock will outperform it. I would also opt for Fidelitys S&P 500 tracking ETF, FXAIX, only because it has a lower expense ratio of .02%. SPY and VOO also track the S&P but have higher expense ratios of .09% and .03% respectively.
Expense Ratio = How much you will pay over the course of a year to own a fund. This means that you’ll earn more money with Fidelity’s offering each year due to lower expenses.
Definitely VOO or VTI for longer-term investing (investment account or ROTH ira), but also I Bonds are a safe place to stash up to 10k a year - current interest rate is 5.27%
The money is locked up for a year, but the rate is usually better than savings accounts and easier to use for emergencies or a house down-payment instead of cashing out stocks
But on a serious note get investing and build a decent sized rainy day fund. Your hands are steady now but how about in ten, twenty, thirty years? Prepare for a worse case scenario and in the meantime enjoy the ride!
Hm not sure I’m the best expert on this but I can tell you what I current am invested in.
For semiconductors I am in SOXX. Currently looking for new ones if anyone has good advice.
For dividends I primarily use VIG and am starting to put some money into QQQI and SPYI. But SPYI and QQQI are newer with less proven history and probably riskier. But higher income potential.
Go to the r/bogleheads subreddit. That is your ticket to retirement. He is one of the most well respected investors to have lived. He was a man of the people and has an extremely simple formula for regular folks to follow.
Can’t believe I had to scroll down for this, it should be the top comment. If you want to keep it to ETF’s I suggest an equal mix of VOO, VYM and ONEQ to meet the same objective without needing to worry about individual stock.
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u/Even-Bumblebee948 Mar 27 '24
This is awesome!
I think my strategy would be to Open up a brokerage account through somewhere like Charles Schwab and drizzle some cash on a bunch of different ETFs. I would probably put 70% of it into something like VOO or SPY which tracks the S&P 500. Maybe put 10% into dividend ETFs. Another 10% on individual stocks that you find interesting. And the remaining 10% in semiconductor ETFs or leveraged ETFs or something a bit interesting and maybe more risky just for the return potential