“How much of my income should I invest in stocks?”
I get that question all the time. And it’s the wrong first question.
The real question is how much of your income you should invest, period. Stocks are one bucket. The habit is the whole game.
Here’s the pattern I see in every millionaire I work with. Make money, invest money, pay the least amount of taxes legally. Make, invest. Make, invest.
Most of you run a different pattern. Make, spend. Make, spend. Then you look at the crumb left at the end of the month and think, maybe I’ll invest that. Crumbs don’t build wealth. Rules do. Let’s set yours.
Your Investing Percentage Is a Money Rule, Not a Leftover
In The Millionaire Maker, I teach money rules: investing criteria you build from your vision, values, and financial goals. Once you set them, you stop deciding every month. You already made the decision.
So pick a percentage of everything you make and send it to new investments every single month. Let’s use 20% as the example.
If you make $10,000 a month, you put $2,000 to work. Month one, you have $2,000 invested. Month two, $4,000. Month three, $6,000. By the end of year one, you’ve put $24,000 to work, before any growth.
Is 20% your number? That’s your call. Some of my clients start at 10%. Some invest $50,000 to $100,000 a month because their income supports it. The number matters less than the rule.
Broke folks invest what’s left over. Wealthy business owners invest first and live on the rest.
“Crumbs don’t build wealth. Rules do.”
You Can Start Investing With $50 a Month
Don’t wait for a big number. Open an account and start with $50 a month.
Then add. $100. $1,000. $5,000. Every raise, every new client, every win in your Cash Machine bumps the number up.
If you can’t manage the little you have, how can you expect to manage a lot? The $50 investor who never misses a month builds the muscle. The person waiting for a lump sum to “do it right” never starts.
I use a stock software called iFlip for this stage, and I’ll tell you why in a minute. Right now, the point is simple. Open the account this week and automate the deposit.
“If you can’t manage the little you have, how can you expect to manage a lot?”
At $25,000, Stocks Stop Being Your Only Bucket
Stocks are where you stockpile. They’re not where you stop.
Once you build up roughly $20,000 to $25,000, start looking at other asset classes. Real estate. A franchise. A laundromat. Oil and gas. A private business venture.
Why that number? Many real projects carry minimums as big as $50,000. Show up with $25,000 and a team, and you can get into deals. Show up with nothing, and you just read about them.
This is the heart of Wealth Cycle Investing: direct asset allocation into real assets you can see and touch. The wealthy didn’t get there by maxing out their 401(k)s. They turn income into assets and assets into income, over and over.
On the 20% rule with a $10,000 monthly income, that first $25,000 takes about a year. Year one, stockpile. Year two, add an asset class.
“Year one, stockpile. Year two, add an asset class.”
Park and Pray Costs You More Than You Think
Here’s the misconception that hurts people the most. You park your money with a financial planner, pray it grows, and hear “sit tight” when it drops.
I call that park and pray, and I can think of nothing riskier. Any plan that makes you cross your fingers isn’t good.
In 2020, a lot of you lost around 30%. Your planner said it was okay. In 2022, many of you lost 25% to 28%. Then you spent years just trying to get back.
The other trap runs the opposite way. You trade on your own, and one bad trade kills you because you didn’t get out fast enough. You were sleeping. To trade well alone, you have to get up with the market, go to bed with the market, and watch trends like it’s your full-time job.
Most of you run a business and a family. You don’t have that time. If you don’t have time, you need a team or system to watch for you.
That’s why I use iFlip. It’s AI-driven software that brings Wall Street tools to Main Street, designed by a gentleman who oversaw $600 billion at Deutsche Bank. You pick from smart portfolios, themed groups of about 12 or 13 stocks: oil, crypto, high tech, or dividend stocks if you want more cash flow. You set your allocation and change it whenever you want.
The part I care about most is downside protection. The software can pull you out to cash when the market turns and move you back in on a buy-low, sell-high model. In my own account, I lost 2.87% in 2020 and nothing in 2022, because it pulled out faster. I’ve seen returns from 15% to 22% at different points.
Those are my results, not a promise. Every investment carries risk, and past results don’t guarantee future ones. But I’d rather have a system protecting my downside than a planner telling me to wait.
Don’t be lied to by conversations like “leave your money and let it be.”
“Any plan that requires you to cross your fingers is not a good plan.”
Your Kids Should Have Money Rules Too
Money rules don’t stop with you. They’re a family conversation.
I never pay my kids an allowance. They earn. For kids under 18, my rule is that 50% of what they make goes into an investment account or a Roth account. Even $5, $10, or $20 a week builds the habit.
Start a weekly family money night at the dinner table. Anyone five and up gets a seat. Ask two questions. What did you learn about money this week? What are you going to do with it?
In Wealth Cycle Investing, I wrote about my son Logan. As a little kid, he made a priority payment to his Wealth Account and his Roth IRA every time he got paid. He’d wait on the bike because he knew assets build more assets, and he’d get a better bike later. Kids pick this up fast. They don’t carry the barriers we grew up with.
This is not the piggy bank model. We’re growing, not stowing away. My book Make Your Kids Millionaires lays out the full formula by age.
“This is not the piggy bank model. We’re growing, not stowing away.”
Start Today
Here’s your week:
- Set your percentage. Write it down as a money rule. 10%, 20%, whatever you’ll commit to every month.
- Open an account and automate it. $50 a month is enough to start. Do it this week.
- Mark your $25,000. That’s your signal to start scouting real estate, a business, or another asset class.
- Hold your first family money night. Five years old and up. Two questions, one dinner.
- Get your Gap Analysis. Find the distance between where you are and where you want to be.
- Read the first three chapters of The Millionaire Maker. That’s where sequencing and money rules start.
Make, invest. Make, invest. That’s the pattern. The percentage is yours to choose. The habit isn’t optional.
Go to AskLoral.com. Ask a question, make a request.
