Investing for Complete Beginners - The Promotion Levels of Personal Finance

Welcome to your free crash course on how to invest your money. This guide is going to cover everything you need to know as a total beginner. It starts off with assuming you're in debt and goes through what to consider doing as you start to make money and build wealth.

I'm not a financial advisor so do your own research. I'm a guy who went from being a broke and struggling English teacher trying to build an online business, to an expat who actually has an online business with decent cash flow.

I mention this to let you know I've been on both sides of the proverbial coin. Let's get to it.

Level 1 - Pay off credit card and student loan debt

When you decide to take control of your finances I describe this as level 1. Your investing strategy is simple. Don't worry about investing and instead focus on getting out of debt. You'll get a bigger return on your money by eliminating debt as it's akin to having your foot on the break pedal. I know this is a tall order for most.

Credit cards on average charge you anywhere from 18% to 27% a month in interest payments. Just by paying this off, your income will skyrocket by this amount. We all get into credit card debt for various reasons, sometimes our own incompetence, sometimes just bad luck because when problems happen the credit card is your way out.

It's not always just being irresponsible and buying stuff we can't afford. Sometimes we start a business that fails or perhaps we need the money to cover an emergency. I'm not judging, but before you think of starting any type of investment, you need to get out of credit card debt.

Next is student loan debt which is a true nightmare for many. I was watching the Dave Ramsey show and one guy had 1 million dollars in student loans! He was studying to be an orthodontist. All in all it will take him 10 years of schooling for his career field and then an additional 10 years to pay off his debt. So in 20 years he will finally start making money when he is in his 50s. Dumb.

I paid off my student loan debt because I served in the Air Force and used the GI Bill. I also majored in finance and accounting and got a high paying salaried position at PWC. There is no real advice here, be very careful not to ruin your life with student debt.

Level 1 First Class - Save $20k to $30K, open a tax advantaged account (Roth IRA, SEP IRA etc)

Alright, so you slain your debt back to the fiery pits of Wall Street hell from which it came. You're significantly ahead of most people believe it or not. Now it's the time to lay the foundations of your basic investments.


First thing is to save up $20k to $30 in a high yield savings account or stable coins like PAX Gold, GUSD, USDC etc if you're more risk tolerant. You'll need an amount that can cover a few months expenses, to prove you have income for visa purposes if you decide to live abroad or just money to invest into an opportunity.

You can't do any of this if you only have $8K in checking account. Trust me, you'll feel a lot more secure and happy knowing you got a decent emergency fund in the bank.

Roth IRA

Now you need to open a Roth IRA. It's a tax advantaged account. That means the earnings within this account grow tax free upon withdrawal at age 59.5. With a Roth, you can take out the principle you put in but not the gains until age 59.5. You also can't write off any contributions with a Roth, but you can with s SEP IRA if you're self employed.

The max amount you can contribute is $6k a year which goes up to $7k a year if you're over 50. There are income limits if you make too much money as you're not technically allowed to contribute to a Roth IRA, but you can do a "back door" contribution.

A Roth IRA is a basic, boring investment all should have. You can open a Roth with any brokerage like M1 Finance or Charels Schwab. I personally would invest in boring index funds for the next 30 years or pick 5-10 companies max you believe in. In general you go with index and ETFs if you don't know what you're doing.

Vanguard is also a good company for this, but with M1 Finance you can just model after the Vanguard time date fund and invest in what it invests in (which is public information). That way you have a bit more control over what your Roth is invested in. The only downside is you'll need to rebalance each year but again that's not a big deal.

401k contribution match

Last if your employer has a 401k contribution take advantage of that to the max amount. Simply ask HR what amount your employer will match. It's free money so you're crazy to not take advantage of it.

If you have money left over after putting $6K into your Roth and did your employer match for the 401K, you have two options:

1 - Invest the rest into your 401k. Work in your career field for the rest of your life and simply budget your money by maxing out the Roth, contributing as much as possible to your 401k and enjoy your life. Congrats level 1 first class, you'll be way ahead of your peers just through this consistency.

2 - Invest in yourself to increase your income. 

If you want to get to level 2, you'll need to invest in yourself.

Bitcoin, Ethereum and altcoins

Bitcoin may prove to be one of the most valuable assets to own in time and to ignore it is a mistake. No one can predict the future but to only be in equites and real estate is a mistake. Bitcoin and Ethereum are the most stable and established so I would consider putting as much as 20% of my monthly investment money into these two.

Alt coins are speculation. They have potential, but the risk is there. In general, I would go 60% BTC, 20% ETH and the other 20% into speculative alt coins.

Level 2 - Increase your income and start dividend investing and diversification of assets

Now that you have the basics down, a decent amount of savings, a fully funded Roth IRA and a 401K each year, it's time to grow your income so you can get to a point where you invest thousands each month, not just 6K a year and some money into crypto. You can do that by becoming self employed, living simply, or to move up the corporate ladder but also not increase your monthly expenditures.

Grow your income

First and foremoest, you need money to invest money. Yes, while it's very important to invest $100 a month when you're 20 years old you do want to focus on growing your income and increasing your earning power while lowering your costs. 

You want to get to a point where you can invest a solid $1K or more each month. The idea is to sacrifice the things you can buy now with that money for the long term earning potential that money can make you.

A lot talk about automating your finances and I love that, but there are two sides to the coin. Frugality and earning a higher income. If you're making enough to invest $50K a year you're going to be in fantastic financial shape. 

Also, it gets easier as you invest. It's daunting to think of ever having a 200K investment portfolio but everyone starts with zero. Once your money grows and compounds you'll need to make less and less contributions over time. Instead of investing 70% you make, you can scale that down as your money grows.

Dividend investing

Dividend investing is where you invest your money into individual stocks and ETF's (there are ETF's that only track dividend paying companies) that pay dividends. This style of investing I love because your portfolio grows slowly in value but you get paid for owning the stocks

That means you don't need to sell off your shares but rather you can spend the dividend payments. You could eventually get to a point where you have a million dollar portfolio but get $30,000 a year in dividend income. 

Yes it's not rich by any stretch of the imagination, but that's a pension for the rest of your life you just built for yourself on top of growing your own business. Also, depending on how much you can invest, you can reach this goal pretty quick which is why at level 2 you want to focus on making bank so you can get this setup and growing so in 10 years time you're well off.

The truth is you don't know how long you'll have with regards to earning money so it makes sense to live a middle class life and build your own pension. 


I'm personally bullish on crypto. You should prioritize your Roth first, but do consider getting some crypto currency as I stated earlier. You'll want to be exposed to it as well as to understand how it works. Not understanding crypto now is like it being 1999 and having no idea what email is.

Real Estate

I'm an expat and have no desire to own a house. I currently don't want to be tied down or have to worry about a property or a property management company and associated taxes. To each their own. Eveyone needs there castle and perhaps when my income is larger, I'll consider buying apartments in foreign cities I enjoy living in, but for now I'll keep renting.

If you're like me, then you may want to look at Fundrise. You own part ownership of a bunch of different properties and get paid dividends as rent. Please note that these dividends are not taxed as dividends at 15% but are taxed as regular income. Regardless, Fundrise is a way to diversify your income and investments.

Taxes for the self employed

Last, if you're determined to go the self employment route I strongly suggest you get an accountant once you start making over $40K a year or around $3K a month. Let's just say $2500 per month.

An accountant is invaluable because they will do everything right with regards to your filings. They will also inform you of how much to pay quarterly because you will have to start paying quarterly as an America.

So, once your accountant informs you of this number, maybe it's $1500 every quarter for example you should then add that amount up which would be roughly $6000 in taxes and put that in a high yield savings account or a stable coin (Blockfi for example will give you 8.6% interest on your stable coin balance). 

So in the above example I personally would set aside 10K or so and put in Blockfi where it earns 8.6% interest and then withdraw when I need to issue a payment.

Conclusion - Level 3 fire and beyond

Level 3 is when you start hitting FIRE (financial - independence - retire - early). Your money is growing from dividend payments and asset appreciation. You're now making enough off your money to know you can stop worrying about money.

At this level just keep working on cool stuff you like, making money and investing. When you want to take some cash your money made you then follow the 4% rule where you start paying yourself. 

Remember, no one is coming to save you. You need to become the rock others can rely on.