Johnny Appleseed - Johnny Moneyseed

Setting up a passive income stream

Financial Independence can be achieved in one of two ways. The first being that you have a pile of money that is so big you won’t ever be able to burn through it by the end of your life.

The second, and more feasible way for most of us to achieve Financial Independence is by creating passive income streams. It’s a very simple idea on paper: Once you have more passive income being generated annually than you are spending annually you have become Financially Independent.

Passive income creation is paramount to any “FI”er that is seeking early retirement. This is the idea that sparked my lovely moniker, Johnny Moneyseed (which is surprisingly not my real name).

Johnny Appleseed (John Chapman) was a businessman in the 1800s. His dream was to plant so many apple trees that no one would ever go hungry. Legend told of Johnny going to many places across the country planting apple seeds along the way.

Mr. Appleseed knew that he could eventually create an “infinite supply” of apples, by repeated planting, cultivating and harvesting of his nurseries.

Mr. Moneyseed does the exact same thing, but with… you guessed it, Money! Money has an amazing ability to produce more of itself, if handled correctly.

For every $100 you plant, you could expect it to produce an additional $5 a year. Of course I’m not talking about planting it in the ground, I’m referring to the stock market. The stock market is the first area of opportunity to generate passive income that I will cover, but it’s not the only one!

Naturally, if I have $50,000 invested, I can safely assume that $2,500 will be produced every year. If reinvested (replanted) instead of being withdrawn (harvested) then the following year our $52,500 balance will produce (yield) $2,625.

You can tell me that I’m wrong about my numbers. You can tell me that there’s no way of predicting the stock market. You can tell me that we’re bound to see another recession, depression, or otherwise that will gobble up my money and make me look like an asshole. If you’re a naysayer, leave your comments below and I’ll address each one individually!

But if you are still willing to hear me out, let’s look at the one of the more common indexes, the S&P 500, as a benchmark for the following example. The words “S&P 500” may sound familiar, but newscasters tend to focus of the S&P’s little brother instead, the DOW Jones Industrial Average.

In extreme brevity, the S&P 500 tracks 500 U.S. equities and displays a generally accurate depiction of how the entire market is faring.

I’m not going to go all Dave Ramsey on you and try to tell you that the S&P 500 is a sure-fire investment that has gained 12% since it’s inception in the early 1970s. He’s not half-wrong though, because it truly is a beast!

S&P 500 - Johnny Moneyseed

The S&P 500 since inception.

As a point of reference I would like to use the year 1984, because it was a fabulous year. Not only was it the first year that Apple began to sell Macintosh computers, but it was also the year that I was born.

For scientific purposes, if you were to travel back to 1984 in your DeLorean Time Machine and invest $100 into the S&P and then fast-forward back to the future to December 31, 2012 your investment would be worth $791.00. That’s an average climb of about $20 a year. It’s safer to not have such lofty goals, so I’d prefer to sticking to the safe value of $5 for every $100.

Obviously, the more money that we could have invested back then, the more it would produce us today. Unfortunately, you probably don’t have a DeLorean, and even if you do, Doc Brown probably hasn’t made his way to tuning it up for you yet.

The stock market is kind of a weird place. You can’t just say “I want some S&P 500 please” because it’s an index, not a stock. You could buy shares of all 500 companies that it’s comprised of, but the more realistic option is to buy a mutual fund based on the index. Vanguard has a low-cost* mutual fund called the Vanguard 500 Index Fund Investor Shares with the ticker VFINX, which is exactly that.

I wouldn’t recommend creating a portfolio that only consists of VFINX shares, but I also wouldn’t recommend neglecting it’s power. For best results and the highest dividends possible I focus on a technique called Dollar Cost Averaging. That’s just a Fancy term for scheduling recurring investments of a given amount of money regardless of current stock price. For example, every month I may buy $500 worth of VFINX, I don’t care if there’s a recession or the market is hitting all-time highs, because we aren’t looking to time the market, we are looking to create the best average stock price over time.

Recessions, or market lows are actually great times to buy shares, because it’s like the stock market is having a sale! You can buy more shares for a lower price! It can be risky though, because if the stock market bottoms out, you will lose everything (but if that happens, we’re all screwed!).

To become financially independent, with the ability to never have to lift another finger as long as I live, I would have to have a passive income stream of at least $30,000 a year. I had stated that every $100 that I have invested will create $5 every year, so the math to figure out how much I will need to have invested to sustain my minimum threshold is very easy. Just multiply the amount we want to receive every year by 20.

To produce $30,000 a year, I would need to have $600,000 invested.

I’m going to save how we plan on living our life for under $30,000 a year for a later post, so if your mouth is open or you are squinting at your screen saying “Yea right!” Rest assured, I will let you see how inexpensive life can truly be.

*VFINX has an expense ratio of 0.17%. Comparable funds can have expense ratios over 1.0%!

**Past performance of the stock market does not guarantee future returns. But it’s a safer bet than the casino!

  64 comments for “Setting up a passive income stream

  1. March 18, 2013 at 8:12 am

    I have known about the power of compound interest since grade school but I only learned about passive investing in 2013.

    Learning about the best way to invest my money to create a passive income stream is my focus. I still have debt to deal with but I have created a tiny trickle of dividend paying stocks.

    I am a lazy person so making money while I am asleep or watching reruns of Law And Order while wearing pajamas is a very exciting idea.

    • Johnny Moneyseed
      March 18, 2013 at 11:42 am

      Jane — Every three months we make dividends from our stock mutual funds and every month we make dividends from our bond mutual funds. It used to be something that I would anticipate and get really excited about, but now it’s just the reality. I love it. I couldn’t imagine any other way of living.

      • March 18, 2013 at 8:34 pm

        Do you do DRIPs with your dividends?

        Also, found a niftly little S&P500 calculator here:

        • Johnny Moneyseed
          March 18, 2013 at 8:52 pm

          Mr. 1500 — We reinvest all dividends for now. Once we retire (about 7 years from now) we’ll have the dividends pay directly to us instead. Hopefully by that point, they’re producing more than we actually need to live!

          • December 9, 2013 at 3:25 pm

            So are all of the investments in a personal investment account or another financial vehicle? And would this change after you retire in 7 years?

          • Johnny Moneyseed
            December 11, 2013 at 6:12 pm

            We have one rental home now, a second on the way, but the rest of our money is in investment accounts. We’re going to keep the current strategy for as long as it makes sense. I’m not really one to sell off assets, so I don’t think we’d ever make a huge investment-plan change. But, we have started allocating our investments differently, and I’ll probably explain more about that in an upcoming post about how we’re not going to pay income tax in 2014 :)

        • March 18, 2013 at 9:26 pm

          I have a drip in my TFSA but there is only $3,000 in stocks in there so the drips are very small and slow.

          • Johnny Moneyseed
            March 18, 2013 at 9:30 pm

            Would you say you’re pulling in around $150/year in dividends from that $3000 you have invested?

          • March 18, 2013 at 9:36 pm

            Much less than that. I only hold 3 stocks and I haven’t seen that much dividend.

            1 bank, 1 food company and 1 big pharmacy chain. I will get there eventually.

            I will be buying another good Canadian bank in April or May.

          • March 19, 2013 at 6:30 am

            I just looked at my dividends for 2013- $15.00. I only started buying stocks in 2012.

            If I was 28 this would be ok but I am 48 and time is rushing past.

          • Johnny Moneyseed
            March 19, 2013 at 7:22 am

            What type of fund(s) are you bought into? Are they actively managed by a team of white collar executives? Or are they individual stocks that pay shit dividends (if at all)?

            Re-allocating some of that money could be extremely beneficial to you.

          • March 19, 2013 at 5:51 pm

            My work pension and my bank RRSP are managed funds but I drip in to my TFSA. The manager is wearing a pink shirt today and I think she looks pretty great.

            I manage those stocks myself and I only started buying in 2012. $400 of the $3,000 in the account is cash waiting for the next purchase.

  2. March 18, 2013 at 9:34 am

    Well put. The stock market is a good way to create passive income. I use the term loosely because some people will run their lives with investing. I think the best passive income strategy is to use the stock market along with dividend paying stocks. Then you can create some income every couple of months depending on the payout schedule.

    • Johnny Moneyseed
      March 18, 2013 at 11:45 am

      Grayson — Yeah when I first started investing I watched the stock market from 9:30 am until 4:00 pm every day. Thankfully, I grew out of that, and realized that I don’t really care where the market it going because I’m in it for the long haul. Now I have a WordPress dashboard to keep close track of in it’s place haha.

  3. March 18, 2013 at 9:46 am

    I’m shocked Johnny Moneyseed is not your real name!!! 😉 I wish using the stock market to create passive income is something I could even THINK of doing right now but with my huge pile of debt, it\s simply not a wise move. Maybe in a few years :)

    • Johnny Moneyseed
      March 18, 2013 at 11:46 am

      GMD — That gives you a few years to learn how the market works! I jumped in head first then learned as I went. I wouldn’t consider doing that, as I lost a lot of money before I understood what I was doing :)

  4. March 18, 2013 at 9:46 am

    Oh, if only I could go back in time… I just need a new Flux Capacitor.

    I like the last bit about living on less than $30,000 a year. We have started keeping track of all expenditures in a notebook. A simple when, where, how much for a couple of months to see how much we really spent. We consider ourselves very frugal, and were surprised that it was so high. We looked through the list again and saw where to cut. It wasn’t even that hard, it just took planning.

    I was going to the grocery store multiple times in one week. Everyone knows you can’t go into the grocery store for just one item, and come out with just that one item. There is always something that grabs your eye. Or two or nine somethings.

    I read the book Cut Your Grocery Bill in Half with America’s Cheapest Family. I recommend this book to anyone looking to save money at the grocery store. Anyway, they shop once a month. I could not possibly shop only once a month, (and they don’t expect you to be able to do everything they do) but they put a challenge up for you. If you go multiple times a week, try going only once. And it has worked. My grocery bill is reduced significantly just by going less frequently.

    Thanks for a great post.

    PS. I love your name!

    • Johnny Moneyseed
      March 18, 2013 at 11:49 am

      Mrs. 1500 — I would love to be able to go to the grocery store once a month! But, wouldn’t you lose the ability to eat produce since it usually only stays fresh for about a week or so? We blow through milk like it’s cool too as we have two very young children.

  5. March 18, 2013 at 9:48 am

    Index investing is substantially better than nothing, but if you’re willing to expend a bit of extra time and effort, value investing makes more sense and helps you avoid buying stocks that are priced well above what they’re worth. I feel that it all comes down to how much time and effort you are willing or able to spend on your investments. If you decide to half-ass stock picking, you’ll wind up doing much worse than an index fund.

    • Johnny Moneyseed
      March 18, 2013 at 11:56 am

      Very true. I’m not looking to really “build wealth” I’m more looking to be able to create a sustaining income over the long-term. Obviously the best investors (like Warren Buffett) didn’t get rich with index funds, and they thoroughly think through their purchases. But even the best investors can be wrong. I steer clear of actively managed funds as well, because I don’t want to pay anyone else’s salary.

  6. March 18, 2013 at 12:24 pm

    I’ve been looking into investing and admittedly find it daunting for now, and viewing it more as a supplement to retirement over passive income. I’m curious to know what you’re projected timeline/goal date is for achieving the $30k passive income (if that’s too personal to reveal though, no worries). Great job with explaining it so even I can understand. :)

    • Johnny Moneyseed
      March 18, 2013 at 12:34 pm

      Oh it’s not too personal. My entire life is on the Internet :) We are just rounding the $100k investment mark now. We invest an average of almost $5,000 a month throughout the year (that includes our ENTIRE tax return). Without any growth or dividends we’d be able to accomplish that in 8.5 years. Luckily for us, every fund we buy into produces dividends, which helps speed up the process significantly. We’re hoping by the end of 2020.

  7. March 18, 2013 at 1:52 pm

    Passive income is the way to go! Banging away 5k per month will certainly get you where you want to go! Are you looking at diversifying outside of equities in your development of passive streams of income? And blogging doesn’t count! It isn’t passive! :)

    • Johnny Moneyseed
      March 18, 2013 at 1:58 pm

      Yeah blogging is a pretty active source of income and I’m not sure you’d even call it income quite yet! Our next venture into passive income will be buying a rental property. We’ve been playing with the idea at least. Calling realtors. Talking to the bank. Expect more on this topic at a later date :)

      • March 18, 2013 at 8:25 pm

        Looking forward to hearing about it! I love the process of analyzing rental properties, even if I’m not buying!

      • Blayne Midthun
        September 26, 2013 at 2:23 pm

        Great article, dividend stocks are a great source of income. Rental property is my favorite and did what my wife and I use as our primary income generator.

        You seem like an intelligent man, why not spend the few hundred dollars and get your own real estate license? I have had mine since I was 21, nine years, and I love the idea of getting paid to purchase property. I hold my own license and do not work for a real estate office. Purchase one property and your license is paid for and then some.

        Look forward to new passive income ideas, thanks for the good read.

        • Johnny Moneyseed
          September 26, 2013 at 2:28 pm

          Blayne — you must be a mind reader. My wife is actually planning on getting her Real Estate license within the next couple years. I’ll do more of the necessary hands-on stuff with the properties while she is able to chose houses for us to buy/sell and possibly help friends find houses as well.

  8. March 18, 2013 at 2:23 pm

    I’ve been investing since 2006 but I haven’t really calculated how much income I’ve generated through my investments – they are all automatically reinvested. I DO know that I am far away from the $600K mark!

    • Johnny Moneyseed
      March 18, 2013 at 2:38 pm

      We re-invest dividends as well, and we’ll keep doing that until we actually need to live on them. I hope to be able to set up further income streams so I can let our market investments continue to grow.

      And we’re nowhere near $600k either. It’s a mid-term goal.

  9. March 18, 2013 at 4:50 pm

    This hits home for me. I’ve been pursing passive income for the last 15 years and am only now getting it dialed in. My biggest upcoming move is to migrate some money from real estate and IN to the market. I’m a little worried about a big correction coming soon, but it’s still the right move for this point in my life. Just hope the timing works out.

    • Johnny Moneyseed
      March 18, 2013 at 5:44 pm

      Nick — Does that mean you’re trying to get OUT of real estate?

      • March 19, 2013 at 12:51 pm

        Somewhat. I still have quite a bit in real estate, my house and two other properties. I feel a little over-exposed there and am frankly sick of paying to fix stuff, etc.

  10. Briana T
    March 18, 2013 at 5:12 pm

    What do you think about Options? I am so ignorant when it comes to the stock market despite my fiance’s pretty extensive knowledge. He’s all about Options, which are very risky. Since I was tempted, I started a virtual account to see what it’s all about. I bought stock in a certain company AND options… I’m up $3500 on the options but only $200 on the stocks. This immediate gain is enticing, but I realize it’s a gamble too…

    • Johnny Moneyseed
      March 18, 2013 at 5:44 pm

      Briana — If you would tell me which options you “bought” maybe I can paint a better picture for you.

      • Briana T
        March 18, 2013 at 7:48 pm

        I’m talking about my good friend Apple.

      • Briana T
        March 18, 2013 at 7:51 pm

        I meant more about what you think of them in general though, not necessarily specific ones.

        • Johnny Moneyseed
          March 18, 2013 at 9:03 pm

          This is the warning label they affix to Options: “Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital. ”

          That says something significant that you should only use risk capital to purchase Options. For anyone who doesn’t know, risk capital is like gambling money. It’s money that you don’t care if you lose or not. If you win, shit you just made some mon-ayyy. And if you lose, you’d say “fuck it”. If you can’t make that kind of commitment, or you are investing all of your money into Options, then you need to re-evaluate your strategy.

          • Briana T
            March 18, 2013 at 9:22 pm

            OK cool, I read the same thing! I’m hoping to be able to find a balance between doing some light Options and investing in Indexes. Thanks!

          • Johnny Moneyseed
            March 18, 2013 at 9:30 pm

            I think options will lose their appeal for you the first time you see a significant drop in price (as well as a drop in your stomach). That’s why I was so turned off from individual stocks. I had shares lose 70% in one day… I almost passed out. Since indexing, I haven’t worried whatsoever and my money has been growing at a smooth 7%.

          • March 23, 2013 at 9:33 am

            @Johnny Moneyseed – I’m guessing you did have too many of the stocks that were in the S&P 500 if they were shedding 70% in one day. I have enough time on my hands and picking individual stocks is interesting to me so I go that route. But to each his own.

            @Briana T – I’d shy away from buying options. I did purchase some BAC options but they were very long dated and the government wouldn’t let BAC fail. Options can be risky if not managed correctly. I prefer to sell puts on companies. It’s essentially the same as setting a limit order and getting paid to see if that price comes. If it does then great I get to buy shares of a company I wanted to own at that price. If it doesn’t then great oh well I didn’t get to buy the shares but I try to sell puts that will give a 10% annualized return from the option premium. Selling puts and covered calls are actually 2 very conservative routes. Once you start buying options it’s more speculative because you paid money and now are hoping for the stock price to move in the right direction for you.

  11. March 18, 2013 at 6:45 pm

    Rock on! This post gets me super pumped to start investing. :)

    • Johnny Moneyseed
      March 18, 2013 at 9:13 pm

      Nick — The method I use for investing isn’t a glamorous one by any means, but it’s a proven system. If you want to further understand index fund investing read “A Random Walk An Investor’s Guide” by Burton Malkiel. It’s a fairly short book, and it explains the theory to ad nauseam. I’ll write more in depth about it in the future as well.

  12. March 19, 2013 at 7:24 am

    Passive income….my favorite topic! My hope is to have enough passive income through investments and my rental properties to retire early if I want to. Unfortunately, owning rental properties isn’t quite passive income. Close enough, though =)

  13. March 19, 2013 at 8:36 am

    I am a bit afraid of the market, if you count on it for income, during those dips you would have lean days. Real estate is my favorite.

    • Johnny Moneyseed
      March 19, 2013 at 8:45 am

      Pauline — Diversity is key, of course. We’re hoping to get into the real estate market in the near future. I wouldn’t rely solely on the roller coaster stock market for our prolonged income. It’s just a great starting point, as well as the easiest to get into.

  14. March 19, 2013 at 10:38 am

    We’ve started to ‘dip our toes’ in the market this year. We’re not investing a lot right now because we’re concentrating on the mortgage, but I don’t see the point in saving any extra cash right now.

    • Johnny Moneyseed
      March 19, 2013 at 10:49 am

      Laura — It really depends on the person. I know that I will make more off the market than I would save by paying my house down. I have a 3.25% interest rate, and after receiving the tax deduction for mortgage interest, our interest rate rate is essentially at inflation. Having a paid off house does sound pretty nice though!

  15. March 19, 2013 at 1:54 pm

    I’m a firm believer that generating passive income is key to early retirement/financial independence. We would like to own rental properties but since we’re not there yet, I’m focusing on stocks. B is wary of the market, and I’m still trying to convince him that putting more than half his savings in the bank is safe but will not generate wealth. I, on the other hand, was too greedy and plunked down a good chunk of money on Apple when shares were trading at$600. We need to find a good balance between our investment styles, and I think index funds may be the answer.

    • Johnny Moneyseed
      March 19, 2013 at 2:04 pm

      Well even the best interest rates on current savings accounts still lose to inflation. I made and lost a lot of money with individual stocks (including AAPL), but they’re too volatile. I’d give up the possibility of high returns for average regular growth.

  16. March 19, 2013 at 3:09 pm

    Great post, although I am saddened to learn that your real name is not Johnny Moneyseed. LOL!! I think stock market investing is a key component to financing retirement and/or other goals. It’s not the only way, but should definitely be a part of your plan. Sometimes I wish I worked with more passive investors and then on the other hand being too passive isn’t good either!

    • Johnny Moneyseed
      March 19, 2013 at 3:14 pm

      Shannon — :) Exactly. We’re always looking for investment opportunities. Since our portfolio is saturated in the stock market, I think it’s about time to branch out.

  17. March 19, 2013 at 9:27 pm

    Great post. I’m actually going to start investing later this year after I pay off my student loans. I think I will set up an automatic payment each month and not worry about the day to day market fluctuations.

  18. March 21, 2013 at 2:07 pm

    Mr. Moneyseed, you’ve got the right idea! I’ve got to applaud your goals and how much you sock away each month. Definitely something I admire and aspire to!

    • Johnny Moneyseed
      March 21, 2013 at 2:13 pm

      It sucked to know that when we were in debt that all of that money was going to our past and not our future. So we had to keep going once we were out of the hole. And thanks :)

  19. March 23, 2013 at 1:06 pm

    Not trying to pick nits or anything, but is your goal to live more off a safe withdrawal rate or to live off dividends? With the current yield of 2.05% on the SPY, that’s only less than half of the 5% you’re planning off of. I know you’re using P2P lending so that will help juice the income, but I was just wondering where that 5% was coming from.

    I prefer a more hands on approach, although most of the companies I’m invested in are in the S&P 500. It’s not as laid back as investing in the index, but I enjoy it and I have the time to research and keep up to date so it suits me now.

    By the way I love this line: “It sucked to know that when we were in debt that all of that money was going to our past and not our future.”

    • Johnny Moneyseed
      March 24, 2013 at 8:36 am

      JC — I don’t see myself ever moving past passive investments myself. But the stock market only represents on piece of our passive income strategy. Over any period long than 10 years, the S%P averaged returns of at least 5%. Check it out:

      • March 24, 2013 at 1:10 pm

        So you’re going with more of a safe withdrawal rate route? Not a big deal, to each their own. Just curious, on the annualized rate of 5% is that assuming that dividends are reinvested or just price appreciation? I think you would need to use the price appreciation alone because it’s said that reinvestment provides around 40% of the total return. Although from about 2001 on dividends have provided almost all of the return. Since 2001 through March thus far it’s a 1.237% annualized price return and a 3.138% annualized return with dividends reinvested, and that’s without accounting for inflation.

        I really like that calculator, thanks for the link.

        • Johnny Moneyseed
          March 24, 2013 at 6:16 pm

          We’re going to keep reinvesting dividends through retirement. At that point, we’re only going to withdraw as much as necessary to pay our living expenses. Hopefully, our withdrawal rate is below the rate of dividend production. That’s the goal anyway.

  20. September 30, 2013 at 4:39 am

    Do you suggest building these up one at a time? Or dipping your toe a little bit into each pool one at a time? I’d imagine getting one fully up and running and then going on to another.

  21. November 24, 2013 at 10:49 am

    I really like your whole philosophy and find it very refreshing. I’m also following a similar path and aim to ‘retire early’ in a similar vein to yourselves in terms of working in an area I enjoy and have passion about and having the choice about work. However, I struggle with one area in the early retirement philosophy and frankly I haven’t sat down and run numbers which I should have done by now but wondered what kind of consideration you’ve giving to inflation? Assuming a rough historical average of 3 – 4% per annum continues the 30k passive income would likely be woefully insufficient especially if you are contemplating a very long ‘retirement’ especially given increased longevity.

    To preempt one answer being that you intend to save the money from your work of pleasure, whilst this is one solution, does this now not mean you still have to work in a sense? Any thoughts on this.

    If you still have to work to save in case of an extended retirement how does this then effect your other plans around spending more time with the children and not saving for their education which I believe was one of your goals discussed in the not paying for education post?

    Does it concern you that the point by which it becomes apparent that your passive income was insufficient is most likely the point when you can do nothing about it? old age. Times have changed so dramatically that as you state social security may not necessarily be something to fall back on. With this in mind it seems there may be an argument to earn and save as much as is physically possible to guard against the relative loss of financial spending power in later life due to longevity.

    Further, with long term care increasingly becoming a burden to be shouldered by the individual and their family do you give consideration to what this may cost and the effect it would have on your reducing your asset base?

    I may be overly cautious and again I haven’t run any stress tests or anything but your posts got me thinking on these points. I’m from the UK if any of the above is lost in translation.

    Keep up the good work.

  22. ADupuis
    December 6, 2013 at 10:48 am

    Buy one of those home warranties on the property you are renting out. It covers the big stuff…we spent $500 with Old Republic Home warranty and I’ve already had $900 in plumbing/gas line repairs completed. It more than paid for itself and the company lets you use your own contractor more often than not. I can’t wait to see what else it pays for the rest of this year.

  23. January 7, 2014 at 9:56 pm

    Great article – love that you hit all the necessary areas to get a high level understanding like DCA and expense ratio. Two things:

    1. When purchasing a fund do you wait until you have the min. 3k or start with the ETF and exchange/convert once you hit it? I know you can convert to admiral ($10k) but wasn’t sure if there was an option for < $3k
    2. Saw your comment about not paying taxes in 2014. If you haven't already check out Madfientist's articles on some example strategies for this – they're great!

    • Johnny Moneyseed
      January 8, 2014 at 5:52 pm

      Refinerr — I always wait until I have the $3k to start investing in a fund. Then once it hits $10k I immediately convert it to an Admiral account.

      And of course I’ve read the Mad Fientist’s posts on the topic. If any readers haven’t, check out his site here.

      • January 30, 2014 at 11:43 am

        Thanks I’ve been doing this but wasn’t sure it was the smartest thing to do since I just started getting my financial s* together. I haven’t made my through everything on Madfientist’s blog yet but will do!

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