I’ve noticed that financial literacy has been on the rise exponentially in the past year. I imagine it is a combination of people studying finance on a need-to-know basis after hardship caused by the COVID-19 economic disaster, people being bored during the COVID-19 pandemic isolation period and want­ing to put their time to better use, and the ever-increasing accessibility of knowledge through the Internet.

 
I’m the Director of Operations of Tempo. We started out as an esports team and gaming strategy content website, but have since then expanded to be a gaming and interactive media production company and game development company. I joined back in 2015 when the company was a year old and have stuck with it—through all its ups and downs—for the past 6 years. As the head of corporate operations, I oversee and personally handle a lot of the com­pany’s legal, finance, and human resources matters.

As you’d expect from a role like that, I am one of two people in the entire company who have the security clearance to access any and all of our con­fi­dential and sensitive information. That gives me a unique insight into our employees’ and contractors’ lives and allows me to build a general profile of what the average esports player, content creator, and influencer is like from a financial sense.

 
This guide is not going to walk you through the fundamentals of being a content creator. I’m not going to tell you when you can quit your day job, or describe how you can best monetize your Twitch stream, or explain how to file your taxes as someone with no W-2 income. If you don’t know how to even get started being a sole proprietor, or if you don’t even know what that means, then you need to take care of that first.

Instead, this guide is going to point out some basic things about finances that I often never see covered in other guides. Maybe it’s because these are a bit more obscure, or maybe it’s because relaying this kind of information to someone may be perceived as brutal. Either way, I think this is information that you need to know to improve your baseline financial competency as a content creator or other kind of online influencer.

As a disclaimer, I live in the United States, and a lot of this advice is geared specifically for residents of the United States. Additionally, I am not an in­vest­ment advisor, certified accountant, financial advisor, or real estate agent… and even if I was, I wouldn’t be your advisor, accountant, or agent. To you, I am nothing more than a guy on the Internet writing blog posts on his personal website. If any of this information sounds helpful to you, make sure you consult with a real professional to see how this may apply to your unique, individual situation.

1. You probably won’t have this job forever.

   You need to worry about your job security far more than normal people. If a “normie” loses their job, they can submit their résumé to a similar, comparable company and probably get hired somewhere else (unless they did something incredibly stupid and got involuntarily terminated due to their conduct). You, on the other hand, can’t really do that. How many companies do you think would want to hire you when your entire pro­fessional experience involves playing video games all day and talking to a camera?

   A lot can change in the content creation and entertainment industry. There might be some sort of accident that affects your face, and people stop watching your content because they no longer find you attractive. That sounds terrible, but you very well know that that’s definitely a possibility. Maybe, due to the stress and pressure of being a content creator, you start overeating and become overweight, and then people stop watching your content because they, again, no longer find you attractive.

   Even on a less personal level, trends change. What if you’re a video game streamer, but the video game (or maybe even the entire genre) that you’re good at becomes not as popular anymore? There are many examples of extremely popular StarCraft II players who just don’t pull viewership num­bers anymore because people don’t really play much StarCraft anymore. Or, what if your target audience gets older and consumes less content, while you fail to make a personal connection with the new younger generation?

   What if you randomly get canceled for something you didn’t do? What if someone just doesn’t like you or is jealous of your success, and decides to make up a story that turns your entire community against you? It’s considered taboo to ask questions or not believe the victim. Sure, you can file a defamation lawsuit, but what about your income source right now?

   Never take a single day as a content creator for granted. Save your money like your life depends on it, because it does. Take this especially to heart if you don’t have an academic background or degree beyond secondary school that you can fall back on if your content creation career goes awry.

   Treating yourself to something that makes you happy once in a while is very important, but I do not recommend splurging on anything big until you have five (yes, five) years’ worth of basic expenses saved up. This should obviously be assessed on a case-by-case basis, and the savings buffer can be reduced depending on your non-influencer qualifications, but the 3-6 months of expenses that normies save up for is not enough for you. Five years’ worth of expenses will cover things while you get back on your feet, enroll in a vocational or trade school, and build a up a new career.
    

2. Invest in your own safety and security.

   As a public figure, there is a large target on your forehead. No matter how wholesome and well-liked you might be, there will still be people out there who dislike you. Most people take out their anger by sending you mean messages on social media, but there are people out there who are men­tal­ly unstable and will take things too far. If you are unlucky, you end up becoming a victim of one of these people.

   One of the best ways to invest your money is to spend a little bit more to make sure you are safe and secure in your home.

   It might feel good saving a ton of money by living in a regular house in a regular neighborhood with a bunch of other people, but that leaves you out in the open. It is fairly easy to find people’s addresses nowadays. For example, did you know that, if you are registered to vote and didn’t fill out a special form to tell your local government not to release your information, your address and party affiliation becomes public record? If you live in a regular house, someone can literally drive up to your home and threaten you in-person.

   Ever since moving out of my parents’ house, I have never lived in a publicly-accessible location. I’ve only lived in high-density apartments and condominium complexes that have 24/7 security. At the condo that I recently moved out of, you would need a credential to even drive into the building property at all, then you need a key fob to get into the building, a key fob to be able to use the elevator, then a physical key to unlock your door and bolt lock to your own unit. Does this absolutely guarantee that a predator won’t show up at my door? No, but it sure makes it borderline impossibly difficult.

   You are your own most valuable asset. If you have the funds available to upgrade your living situation, don’t underestimate the value of security guards and restricted-access building lobbies that stand between your door and the street. (On a related note, don’t fall for the false sense of security that an unattended “gated community” might give you—those are functionally useless, as people can climb over the gate, and the access code is often given away by your neighbors to delivery drivers.)
    

3. Set up a wishlist of personal items you need or want.

   A lot of content creators and influencers have Amazon wish lists or other gift registries, but people tend to make two distinct mistakes. First, some people… don’t actually have wish lists. Second, some people put exclusively business items on their wish list but leave out all their personal items.

   It is in your best interest to buy business expenses with your own pre-tax income so you can write them off as deductions, and be gifted personal items from others so you end up saving as much of your post-tax income as possible. The magical element here is that you do not have to report your gifts as income (because they are gifts); taxes on gifts are (usually) paid by the giver, not the receiver.

   Imagine that there is something worth $70 that you have to buy for business. All you need to do to earn this purchase is to make $70 and buy the business item. Now imagine that there is something worth $70 that you have to buy for personal reasons. In order to afford this $70, you have to make about $100 in actual income, pay $30 in income taxes (this is just an example, and your tax bracket may be different), and then use the leftover $70 to buy your personal item. Consequently, if someone wants to give you money to buy this $70 personal product, it’s in their best interest to just straight-up buy and give you the $70 product, as opposed to giving you $70 in cash so you can buy it yourself—because, after taxes, $70 in cash won’t be enough anymore.

   There’s nothing wrong with putting high-value business expenses on your wish list, especially if you have a few whales who love to spend a ton of money on you. However, keep in mind that, if you still have personal expenses left that you need to account for, it’s not optimal for someone to buy you business products in lieu of personal products, if the value of both products are identical.
    

4. Take full advantage of all your tax-advantaged retirement accounts.

   Most people are aware of IRAs now and have started a Roth or Traditional IRA with their favorite brokerage or provider. If you’re going for a long-term savings plan, it is very important that you max out this account every single year before you put your money in any other kind of savings plat­form. For example, if you have an individual brokerage account and an IRA, and your investment objective is long-term growth, and you put mon­ey in your individual brokerage account prior to maxing out your IRA’s yearly contribution, you’re doing it wrong.

   (As a disclaimer, note that I said you should always be maxing out your IRA if you have a long-term savings plan. Early withdrawals from IRAs come with penalties, so if you need investments with the utmost liquidity for an upcoming big purchase, then putting that income in tax-advantaged retirement accounts may not be the best course of action. If you are unsure how to proceed, consult with your own tax professional prior to committing to any investments.)

   But let’s say that you’ve already put in the maximum allotted amount into your Roth IRA this year, but you still have some leftover funds that you want to invest for long-term growth. Then you would put that money into your individual brokerage account, right? … Well, no.

   As a sole proprietor, you have access to more tax-advantaged retirement savings options. Before you start buying index funds on your regular brokerage account, do some research and look into SEP-IRAs, i401(k)s, and SIMPLE IRAs. These are all special retirement programs for business owners (and all content creators and influencers who make Form 1099-NEC income count as business owners, even if you might be your own employee), and they may carve a fairly large chunk away from your tax liability.

   For example, I have a SEP-IRA with Vanguard. Each year, I can contribute several thousand dollars into this SEP-IRA, depending on how much taxable income I made that year—and this is on top of the $6,000 I put in my Roth IRA. These several thousand dollars in my SEP-IRA are tax-deductible, which means it’s as if I had never made this income to begin with. Within this SEP-IRA, I am able to invest my money as if it was a normal brokerage account. Seeing as my objective is long-term growth, I usually buy growth-oriented Admiral Shares, a special type of index fund by Vanguard.
    

5. Be cautious of aggressive Schedule C deductions if you’re planning on getting a traditional mortgage soon.

   The real estate market has been absolutely insane lately, and you might be someone who wants to get in on the hype. Warnings of emotional in­vesting aside, if you do truly want to purchase a house, chances are, you’ll need to borrow some money from a lender and get a mortgage.

   This process is fairly straightforward for normies because they’re on a set sal­a­ry. The lender will contact their employer, check on their job se­cu­ri­ty, verify their employment, and base their approval amount on their sal­a­ry. However, independent contractors generally don’t have set sal­a­ries—you never know how much advertising revenue or sponsorships or tips/donations you’re going to get each month—so lending to an independent contractor is inherently higher-risk.

   The way banks calculate how much they lend to an independent contractor is to look at your Schedule C in your yearly Form 1040 filing to the IRS. From there, they look at your net income (not gross income), re-add business expenses for home office use and depreciation, and subtract the remaining 50% of your meals deduction to find your overall yearly income. They look at the previous two years of tax returns for this; if your in­come has increased year-over-year, they take the average of the two, and if your income has decreased, they use the lower value.

   If you’re intuitive, you may see where this is going. If you take a lot of business expense deductions, your net income is going to decrease, and your mortgage amount is going to decrease as well. This is because lenders are using the information on your Schedule C while honoring the true spirit of the concept of “business deductions,” in the sense that, the only reason you were able to make that amount of gross income is because you had to spend your own money too. Thus, they don’t see deductions as ever having been your money, but rather, a resource you needed to use to make your income.

   For people with squeaky clean Schedule Cs, this might not be a problem. However, if you smudge your deductions a bit or walk within the gray area, it may seem counterintuitive to have a lower mortgage approval amount, even though you’re keeping more money by giving less of it to the gov­ern­ment in taxes.

   I personally faced this problem for years, and this is the conclusion I came to: If you’re rich enough that you’re willing to pay income taxes on your money, then the lender can feel comfortable taking that money into consideration when determining how much you can borrow. If you’re taking a ton of deductions, the bank has no concrete way to prove that you’re not just scraping by and taking those deductions because you have to, so it’s in their best interest to not take the risk and just disregard that from being eligible income.

   And yes, there is yet another side to this—independent contractors can just elect not to take deductions (because you are not required by law to take deductions), thus artificially inflating how much money it appears like they’re making. Banks would then base their lending decision on this information, you end up wasting more money on taxes, you get a bigger mortgage, and you increase your chances of not being able to make pay­ments and defaulting on the loan.

   This is obviously a fairly involved process, and I have no be-all-end-all advice for you apart from doing research on this and calculating a good bal­anced situation for yourself for your taxes. The point here is, don’t be caught off guard that this system exists in this manner, and educate your­self about how mortgages work (and possibly some alternative lending solutions) at least two years before you plan on purchasing a house.
    

As you’d imagine, this only scratches the surface of finances for sole proprietors. I’d classify most of this as basic information, or low-intermediate at best—and this is why a lot of people off-load their finances to a certified accountant.

I mentioned this at the top of this blog post, but to reiterate, if any of this seems useful to you, make sure you do your own research and reach out to your own advisors and professionals to figure out how this may apply to your unique, individual situation.

As is hopefully clear by the title, I want to point out that I am not a registered investment advisor and do not have the qualifications to become one. This anecdote outlines my personal experiences only, and is not to be used as guidance to manage your assets in lieu of a certified professional.

With that being said, my advice to you is actually very similar to the disclaimer above, and it is: Do not trick yourself into making unjustifiable in­vest­ment decisions based on others’ experiences if you are not fully informed of the entire situation.

 
The reason I’m writing this blog post is because I’ve been chatting quite a bit lately with my friends about investments. Most have listened to my ex­pe­ri­ences and intelligently used them as learning opportunities to do their own research about the related topics, but a few others… have made some ques­tion­able decisions.

It’s fun to talk about the wild and unexpected nature of the stock market, and it can be thrilling to share stories of huge successes or massive failures. What isn’t fun is talking about the steady growth of reliable index funds. Thus, if you were to ever ask me about my investments, I will probably talk about meme stocks, because talking about meme stocks makes for an inherently more interesting conversation.

A very important thing to remember is that the ratio of topics in a conversation does not necessarily correlate with the ratio of my actual investment dis­tri­bution. That means, if I spend 95% of my time talking with you about meme stocks and the remaining 5% about index funds, that does not mean I own 95% meme stocks and 5% index funds.

If you misinterpret that and assume I have 95% meme stocks, then proceed to align your own portfolio to have 95% meme stocks, then you have prob­ably made an incredibly stupid decision. That isn’t to say that you won’t see success—if you’re lucky, you could become a millionaire overnight, and I never said that there can’t be stupid millionaires—but you have just as likely of a chance of losing almost everything.

 
I always keep that last point in mind—that you have a chance of losing almost everything. That’s why the amount I invest in meme stocks and other extremely high-risk securities is limited only to the amount that I am comfortable losing. I am not comfortable losing my entire portfolio, so I choose to put a vast majority of it in things that I know will not suddenly vanish overnight.

I have a simple way to visualize this. Here is a table of the diversity of my portfolio.

If you loosely categorize my investments, you can say that I have 94.39% in “safe” holdings and 5.61% in “dangerous” holdings.

 
Let’s assume that disaster strikes. Bitcoin crashes and falls from $58,000 to just $4,000 like it was throughout a lot of early 2019, losing 93%+ of its value. Ethereum faces a similarly proportional crash. COVID-19 mutates into COVID-9001 and locks down the entire planet again, causing travel companies’ stocks to plummet to only 20% of their current value. And of course, GameStop, AMC, and Blackberry all go entirely bankrupt. In this theoretical sce­nar­io, I lose 5.11% of my portfolio.

Not ideal, but I’m ok with that.

An even greater mitigating factor is that this loss is based on the current value of my portfolio. If you’re familiar with cryptocurrency, you know how fast it’s risen in value. If you calculate my losses relative to cost basis rather than current value, then the percentage of money I would lose is even less.

 
So if you’re ever interested in buying Bitcoin or shares of GameStop because of me or someone else talking excitedly about the topic, and you want to “copy” us because we seem to sound like knowledgeable investors, keep the table above in mind. Don’t let our excitement falsely trick you into thinking that we’ve gone all-in on meme stocks.

To be clear, this is not me telling you whether you should or should not go all-in on meme stocks; this is me making sure you know that I absolutely did not.

Most people are hesitant to sign up for credit cards with annual fees because they never know if it will be worth it. Back in July 2018, I signed up for the Chase Sapphire Reserve because, after a quick calculation, I knew for a fact that I would get way more value out of it than a regular, no-annual-fee credit card.

Now that one year has passed, I decided to do a deep dive on all the spending I’ve done on my Chase Sapphire Reserve to see just how much value I got out of it.

Before we begin, I want to separate this benefit from everything else: I received 50,000 rewards points as a sign-up bonus, which is equivalent to $750 worth of travel redeemed through the rewards portal. All monetary value calculations of points will be done at the 1.5¢ per point rate, as I actually use all my points to their fullest extent (then usually still run out of points and end up buying more travel out-of-pocket).

According to my account’s spending report, here is what I bought between August 2018 and July 2019 (I don’t think all these categories are accurate; I’m just going off what Chase thinks each purchase is):

With that being said, here are the key points:

• The annual fee is $450, but the card comes with a $300 travel credit that I am guaranteed to redeem each year, so the effective annual fee is actually $150.
• If I had spent $34,529.21 on a 1% cash back credit card, I would’ve earned $345.29 in rewards. By using the Chase Sapphire Reserve instead, I accrued $814.47 in rewards points during the year. That is $469.18 more than if I had stuck with a regular credit card.
• I am enrolled in Global Entry, but I enrolled one year prior to getting a Chase Sapphire Reserve, so I haven’t used the card’s Global Entry credit yet. However, over the span of the five-year renewal period, this benefit is equivalent to a value of $20 per year.
• In regards to Priority Pass Select, my travel tendencies tend to fluctuate a lot, but if taking a very rough average, I travel about once a month and often enter an airport lounge 2 times per trip, for 24 visits per year. The cheapest way to enter an airport lounge this frequently is through Priority Pass Prestige, which is $429 per year. Now of course, if I didn’t have Priority Pass Select with the Chase Sapphire Reserve, I just wouldn’t use airport lounges, so the weight put on this benefit is different than the raw monetary value of other benefits. However, I do get free food in lounges, and if I were to assign a conservative value of $5 worth of food eaten per lounge visit that I otherwise would’ve had to buy elsewhere, the benefit is worth about $120.
• The card comes with various elements of travel insurance, like for flights and rental vehicles, but I’ve never needed to use this insurance, neither during the 1 year I’ve had the Chase Sapphire Reserve, or at all throughout my entire life of travel. Thus, because it is so difficult to predict when emergencies and inconveniences will happen, I’m not going to assign a concrete value to travel insurance.

This is a lot of information, a lot of which is situational. But if you want a raw number without having to account for the arbitrary value of benefits, it is $319.18. I will passively make about $319.18 each year just for using the Chase Sapphire Reserve instead of a no-annual-fee credit card.

With benefits considered (including the introductory offer), that number goes up to $1,189.18 earned in the first year (non-repeatable, of course).

Ever since suddenly being very interested in pickup trucks out of nowhere, I’ve been following pickup truck and truck modification news pretty closely, and I get excited when something fresh comes into the market. When Jeep announced that they would be releasing a pickup truck of their own, I was pretty excited; even though I personally would never buy a Jeep myself because it just really isn’t my style, having more mid-size trucks available in the market ramps up the competition and encourages other automakers to improve their own vehicles.

Then, I saw the 2020 Jeep Gladiator Launch Edition pricing. On April 4, they went on sale to celebrate the new pickup truck, and only 4190 Launch Editions are being made (that is paying homage to the 419 area code of Toledo, Ohio, the home of the Gladiator). The price? MSRP US$62,310.00.

… I like going to automobile manufacturers’ websites once in a while to load up the vehicle builder/configurator and see what kinds of options are available. I thought this would be a great time to do that just so I could see exactly what else you can buy instead of a $62,310 mid-size pickup truck.

• 2019 Ford F-150 Raptor with 801A – $60,540

  Probably the truck that is given most frequently as the answer to the question “what is your favorite pickup truck,” the Ford F-150 Raptor with the 801A equipment package (which includes everything included on the standard 800A package, plus 10-way power heated leather-trimmed seats, power-adjustable pedals, and a power-sliding rear window) is $1,770 cheaper than a 2020 Jeep Gladiator Launch Edition.

  Yes, the Ford F-150 Raptor, the truck that most truck enthusiasts would call their “dream truck,” and then follow it up by saying “but it’s way too expensive to actually buy,” is cheaper than the Launch Edition. Now sure, a lot of dealerships actually sell the Raptor at prices higher than MSRP, but if you want to maintain the example, you can just take the 801A upgrade down to the standard 800A, then there’s nothing more you can say.

• 2019 Ram 1500 Rebel, fully optioned – $60,290

  Not a fan of the Ford Raptor? Go to the Ram 1500 Rebel configurator and click on literally every single available option for a fully-optioned truck, and you can get it for $2,020 cheaper than a 2020 Jeep Gladiator Launch Edition. This includes options like the 5.7L V8 HEMI MDS VVT eTorque engine, air suspension, the Rebel 12 package (which comes with the 12″ tablet-like display), Level 2 equipment group, bedliner and tonneau cover, and power sunroof… and literally everything else, because I actually mean fully optioned.

  Remember that Ram was the first manufacturer to introduce the oversized center console display. That, combined with the black leather interior with tastefully attractive red contrast stitching and accents throughout the cabin, and the fully-loaded Ram Rebel feels like you’re driving a top-tier luxury vehicle off-road.

• 2019 Ram 2500 Power Wagon with Level 2 Equipment Group and 12″ display – $62,385

  Don’t forget that the Jeep Gladiator is a ¼-ton, mid-size pickup truck, and the two examples I gave above are ½-ton, full-size pickup trucks. But is that still not enough for you? Then take a look at the ¾-ton Ram 2500 Power Wagon – you even have the luxury of tacking on a Level 2 Equipment Group and the iconic Ram 12″ display and only exceed the cost of the Jeep Gladiator by $75.

  All of these trucks are still very off-road-capable vehicles – that’s not unique to the Jeep Gladiator. But, beyond the obvious increase in payload and towing, keep in mind that the Power Wagon actually feels like a luxury vehicle on the inside, as opposed to the Jeep Gladiator that seems a bit too committed to the off-road look-and-feel.

• 2019 GMC Canyon Denali… AND A 2020 TOYOTA COROLLA – $62,245

  Being the owner of a 2018 GMC Canyon, I felt like it would be appropriate to include it as an example in my list. A 2019 GMC Canyon Denali with 4WD is currently $43,240, and the starting MSRP on a 2020 Toyota Corolla is $19,500; combined, they are $65 cheaper than the Jeep Gladiator Launch Edition.

  Yes, this does indeed mean that you can get a Denali, the sub-brand recognized among pickup truck enthusiasts as the “luxury GMC,” as well as a small daily driver sedan that gets over 30 MPG in fuel efficiency, and you’ll still have money left over for a little cargo tote for your trunk straight from the Toyota dealership.

• A 20% down payment on a $311,550 house

  … You get the point.

Honestly, Jeep has to know that the Gladiator Launch Edition is overpriced. They might have been able to pull off something like this for the Jeep Wrangler, because the only “competition” to the boxy off-road vehicle is basically the Mercedes-Benz G-Class, and those two aren’t really that com­pa­ra­ble. With no competition comes market control, and a Jeep Wrangler Rubicon Launch Edition at the $60k+ price point might have worked.

But entering the already-very-competitive pickup truck market, then proceeding to price themselves to compete against full-size trucks as well… they’re really preying on Jeep fanatics who like driving with the doors off and top down, because once capitalism kicks in, I foresee unbelievably high dealer discounts off MSRP for the Jeep Gladiator.