How to become middle class in 8 years, and stay there.

For the sake of argument let’s stipulate that being middle class is having a net worth of $68,000. Getting there may seem impossible if you don’t expect an inheritance and have even a small amount of credit card debt. All is not lost. Keep it simple. Here is a plan.

If you are like most people you don’t have enough money to take care of your monthly spending and are worried about it. How can someone with no money get enough money together so that the money can produce more money than they can earn. That is essentially the first step in being really middle class.  That sounds like an achievable life goal, not a task that most people feel is within their grasp, at the moment. Well that is only true if you never start.

Can you make brownies? Probably. Can you follow a simple recipe and make a dish? Of course, if its not to complicated.

No lectures here, no special get rich quick schemes, just five simple steps. I get no money from you and expenses are VERY low. All you need is a smart phone and a tiny bit of discipline, and the ability to leave something alone. Ready?

1. Download the app “Tip Yourself”. The next time you go into a store and buy something you normally buy, on sale, transfer half of the savings into this app BEFORE you get to the check out counter. Most people spend $40 to $100 a week on discretionary things. Shop on sale and save the money- this should be $40 to $200 per month.  Try to double the amount of money you save for 3 months in a row and then hold that level of savings- ANY WAY YOU CAN. After 1 year try to double the amount of money you are investing.  Then double the amount at three, five and seven years. That money isn’t yours. It belongs to the you, that you might become, in 8 years. You need discipline and you need to keep your savings private, isolated and working for you. No one needs to know what your goal is- it is better if you tell no one.

2. Download the app “Robin Hood” by using this link. (They may give you a free share of stock as a sign up bonus! See, its already working! :-($) )

3. After you have saved $20 in your tip yourself account, transfer it to the Robin Hood account. Now you have to buy a stock! What do buy? Why start doing homework now? Go my my account on (link below) and look at the latest posting for a Robin Hood stock pick.   I have my money in Robin Hood too, so just do what I do. Why? I’ve been doing this for over 40 years. I probably can guess better than you. Check back from time to time send me your email if you want notifications. Want to be a sponsor? Don’t – put that money into your Tip Yourself account and get back to me in five years. (Free lesson- Save means save. Free means free, until you feel rich, or guilty.)

4. Sign up for a Motif account in about a year. Use this link to do so, and friend me. (link) This is a social investing website where you can actually see exactly what I am investing in. You will see broad diversification and several levels of risk distributed across a bell curve. I have lots of Motifs, designed for different people. I bet one will fit you quite well. After you have $530 in your Robin hood account ask for a recommendation from me on which two Robin Hood accounts are suitable for you. We will establish your goals and I will select two for you that are appropriate. Click the links and buy. Every time I make a change Motif will notify you. Your results will me more or less the same results of an adult with a forty year base of investing experience. Later select more blue chip stocks that pay between 2-6% -hold them long term. Keep buying the ones that work. Reinvest those dividends yearly in good stocks. Assuming you have other efforts besides this one, you should have a net worth on excess of $68K within the 8 years that started with initiating this plan. Macro events shouldn’t have stopped you if you kept to the plan!

5. Watch one hour of financial advice on CNBC and start making lists of stocks that interest you. Only add 20% of your total portfolio with your own choices. Watch what I do, the changes that I make, and keep notes on my rebalancing strategies. Buy stocks on Robin Hood, try your hand at a Motif.  Add money to stocks which I have selected. Go to my website for more specific details on what is going on- this group of people is growing- and enjoy! My other site on this topic, more general is- Remember the money flows from Robin Hood to Motif bundles to long term holding of blue chip stocks that pay dividends. Never remove or reverse the flow.

At some point, probably sooner than you are ready for, I will die and managing your portfolios will be up to you. I will be writing a column on that transition phase soon, but I’m not in a hurry, and I want you to know you need to get serious and start learning soon. It is just like a seed, time is against you,until you plant it and it starts to grow. In about 8 years- if you are serious and feed the plan you should have $68,000 in 8 years if you save, compound and aggressively behave in ways that save and invest your money. If we have another Great recession- all bets are off.

EXTRA BONUS- Set it up as a self directed IRA account and save the taxes you aren’t paying too. 

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