Hey there! Welcome to the Independent Money newsletter 👋 We’ll be exploring the latest financial news and discussing how it affects entrepreneurs like you. Plus, we'll share some awesome wealth creation insights from successful entrepreneurs that you won't find anywhere else.

Let’s dive in! 🏊‍♂️

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In this week’s newsletter, we’ll discuss:

• Financial Tips and Tricks: The dangers of paying AUM (assets under management) fees.

• Entrepreneur’s Corner: The common wealth mistakes that many millennials make.

• Entrepreneur’s Journey: Learn how to get started angel investing with Gale Wilkinson.

• What’s Happening at Carry: New product updates and upcoming events

Financial Tips and Tricks 💰️ 

We’ve mentioned before the dangers of paying AUM (assets under management) fees…

This graphic that Graham Stephan retweeted is a great visual representation of why this model isn’t the most profitable for you:

Entrepreneur’s Corner 📚️ 

Thomas Kopelman is the co-founder of All Street Wealth and helps high income millennial entrepreneurs build wealth. He recently shared a tweet discussing the common mistakes that many millennials make, and here were our three favorites (paraphrased) from the thread:

Mistake #1: Making Their Finances Too Complex

This is something I see way too often. People start making good money and their wealth builds, so they think they need to start investing in anything and everything.

Anytime a friend or someone they know comes with a business idea, they get involved and then all of the sudden their balance sheet is all over the place.

They have little organization or coordination, and oftentimes lack liquidity.

Be careful doing this! You do not need to invest in anything and everything. Oftentimes, the best strategy is to keep things simple.

Mistake #2: Taking On Too Much Unneeded Risk

As your wealth builds, you can take on more risk, but you also typically do not need to take on that additional risk.

A strategy I like to use is to invest in a diversified portfolio with the dollars needed for your key goals: kids college, retirement, etc. to make sure you are on track.

Then you can take some added risk on additional dollars if you really need to or want.

But... remember you do not have to do this just to hope to get even wealthier. Sometimes it is not worth the added risk.

Mistake #3: Inflating Their Lifestyle Too Fast

As people start making a higher income quickly, they immediately inflate their lifestyle.

Then, all of the sudden, that income drops by 25-50% and they are stuck.

They have a huge mortgage, large car payments, private school, etc. and they don't have enough cash flow to handle it.

If you are a business owner, in sales, etc. take your time inflating your expenses. You do not know how long that income will last.

As your income grows, make sure you keep a high savings rate.I like for all my clients to have a minimum 20% investment rate, but more is always better to give you a cushion and push you further ahead

Entrepreneur’s Journey 💬

Today we chat with founder, angel investor, and venture capitalist, Gale Wilkinson.

She has led 125 institutional deals and personally invested in 50 angel deals.

She’s also the founder VITALIZE, which is a fund and angel community of 500+ people that invest in early stage startups. The group is unique as it allows anyone to invest, whether or not they are accredited. For about $50 per month, you get access to deals and educational information, and our investors write checks as low as $1K each.

What’s something you would do differently in your angel investing strategy if you could go back in time?

The most important thing for any angel to do is set a strategy first. How much money can you comfortably deploy each year?

Take that number and divide it by 3, 5, or 10 so you can see how much money you'll be investing per deal.

Let's say you have $10K to invest. You could do three $3K investments, five $2K investments, or ten $1K investments.

I've learned over time that I should always write the same size check into every deal I do. If a founder wants a minimum check size that is higher than I can afford (my checks are $1-10K), then I pass.

About two years ago, I invested $25K into a startup, and they shut down just a few months later due to a co-founder blowup. You can't predict something like that, so it's best to play the field the same every time, with the same size check.

What’s one piece of advice you have for anyone looking to start angel investing?

To expand on the strategy above, it's important to invest in at least 15 companies over a 3-5 year period. This is why I think three deals is the minimum anyone should do per year. Ten deals is a good upper bound on the range, with five checks per year a happy medium.

As you work through this math before writing your first check, I reiterate to any new angel that you should only invest money that you don't need.

In other words, only invest money that you could literally light on fire and still be okay from a financial perspective.

What’s one money rule you live by?

Money is meant to work for us, support us, and help us have fun. I think angel investing is a great way to invest in markets and founders we are drawn to. It should be fun. Too often, I think people are scared to lose money, and that type of thinking and energy can really limit their ability to grow their wealth in the future.

This is exactly why we started VITALIZE Angels, as we want to give people a chance to write a few small checks per year and realize that it can be fun and that it's not as scary as they may have thought. :)

Where can our readers follow you to learn more?

I post daily on Twitter, and we also have an Angel Insights newsletter you may want to check out. We post about 2x a month; sign up here.

What’s Happening at Carry?

Here’s what you can expect in the coming weeks

See the full list of events here. ⏰

Want More?

Still can’t get enough? Well, we’ve got you covered!

Think your friends might like it? Be sure to share it with them! 📩

If you want more resources on building wealth as an solopreneur/entrepreneur, check these out:

• The Solo 401k handbook 

• What is a Solo 401k?

• How to Open a Solo 401k

• Common Solo 401k FAQs

• Solo 401k Contribution Calculator