Personal finance knowledge is important to just about everyone, but with the rise of social media, the conversations we see about it can also be filled with misconceptions, hot takes, or even lies.
Jeremy Schneider, Founder of Personal Finance Club, cuts through the noise of risky cryptocurrency betting, leveraging debt and overspending with a concise message to help others build wealth: Live Below of your means and invest early and often.
This principle – along with the sale of his first company, a start-up called RentLinx – allowed him to retire at 36. Now he spends his days running a popular Instagram account showcasing all things personal finance.
Select recently caught up with Schneider to better understand his journey, the growth and impact of the Personal Finance Club – and his top tips for building your own net worth.
A man with a plan – and a big way out
Before Schneider hit it big, he lived the life of a regular student, attending and running at the University of Michigan. Thanks to the help of his parents, scholarships and money earned by working on the side, he was able to graduate without debt.
After graduating, Schneider decided to take a big risk, turned down a full-time job at Microsoft, and went on his own as an entrepreneur.
While building his first company, RentLinx, throughout his 20s, Schneider lived a very modest lifestyle. He still brags about the 1999 Ford Explorer he bought used and how he paid himself a low salary of $36,000 a year despite being CEO and living in a area where the cost of living is high. All the while, he persisted in investing the way his parents taught him when he was 16 — in low-cost index funds within a Roth IRA.
In 2015, at age 34, Schneider struck gold by selling RentLinx for $5 million. He immediately started dreaming of sitting on an island forever until his new CEO asked him, “What are you going to do when you get back?” That’s when he knew he had to do something else – after celebrating a bit of course.
Following the sale, Schneider put over $2 million in his pocket and continued to work for the same company under new management. Shortly after, he decided to take a sabbatical year.
So what did this self-made millionaire do with all his new free time? He played video games. Schneider admits it was a waste of time, but since he was heavily invested in market-tracking index funds, his net worth continued to grow significantly, even as he spent hours playing games. Schneider also mentions on his website that he spent time traveling and finding smart ways to manage his money.
After his sabbatical year, he created the Personal Finance Club and his community has since grown to over 400,000 subscribers.
Schneider says he’s always been passionate about the subject. The Personal Finance Club actually started as a social drinking club about 10 years ago and what started as a friendly joke – and eventually became a simple Instagram post on a two-step plan to becoming a millionaire by investing in index funds – has since morphed into a full-scale business with a purpose.
The impact of the Personal Finance Club
The education provided for free through the Personal Finance Club Instagram account is quite robust. You’ll see everything from investing in index funds, business news and tips for paying off your debt to taxes and interest rates, among other topics – and most notably, the results of Schneider’s two-step plan to live below your means and invest regularly.
Schneider and his team also create similes to help illustrate hypothetical investing situations — one person lives by their two golden rules, while the other doesn’t — that seem to resonate with his followers.
Once the Instagram account gained traction, Schneider decided to monetize its growth and create an actionable personal finance course so everyone could learn how to grow their wealth in a realistic way.
Schneider told Select that his “messages of simplicity and transparency” paid off, including disclosing his company’s operations and how much money the social media account actually makes.
In a recent Instagram post, Schneider revealed that the Personal Finance Club has made nearly $1 million in revenue since October 2020 and in the process has changed many lives. He now has two full-time employees, actively donates 20% of his income to charity, and has helped thousands of people start investing for the future.
His top tips for growing your personal wealth
Even with a net worth of $4.4 million, Schneider continues to practice what he preaches both on and off the Personal Finance Club Instagram account by living frugally and investing regularly in index funds.
Besides his two golden rules, Schneider tells Select that his personal advice is threefold:
- Keep things simple rather than complex
- Pay off all your debts (except a mortgage) before investing
- Peace of mind makes you money
Schneider refers to an endless list of potential investment opportunities that are now available, all clamoring for your attention and your money. By simply limiting your expenses and investing regularly in proven index funds, you can increase your net worth, regardless of your annual salary.
He often suggests investing regularly in index funds that track the S&P 500, which have produced an average annualized return of around 10% since 1957 (note that past results do not guarantee future success). Cost averaging and compound interest can help your money grow exponentially over long periods of time. In the example below, if you were to invest $10,000 per year ($833 per month) in an S&P 500 fund from age 25 until retirement at age 65, you would have more than $4.4 million. While you may not be able to invest that much, it still shows that with consistent habits, you can become a millionaire in retirement.
How to start investing in index funds
To start your own investment journey, consider buying low-cost index funds that track the S&P 500, such as Charles Schwab’s S&P 500 Index Fund or the Vanguard Total Stock Market Index Fund, which tracks the broader market. American scholarship. Note that you’ll need to open a brokerage account, a traditional IRA, or a Roth IRA — or choose to invest in index funds through your 401(k) — to get started.
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Deposit and minimum balance requirements may vary depending on the investment vehicle selected. No minimum to open a Vanguard account, but a minimum deposit of $1,000 to invest in many retirement funds; robo-advisor Vanguard Digital Advisor® requires a minimum of $3,000 to sign up
Fees may vary depending on the investment vehicle selected. No commission fees for stock and ETF transactions; zero transaction fees for over 3,000 mutual funds; $20 annual service fee for IRAs and brokerage accounts, unless you opt for paperless statements; robo-advisor Vanguard Digital Advisor® charges up to 0.20% advisory fee (after 90 days)
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For a more passive approach, robo-advisors such as Wealthfront or Betterment might be better suited, as they can invest in certain index funds and ETFs on your behalf. These types of investment accounts can also rebalance your portfolio based on market conditions and other factors such as your financial situation, risk tolerance level, and investment schedule.
On the Wealthfront secure site
Minimum deposit and balance
Deposit and minimum balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts
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At the end of the line
Schneider launched his company and his community with a simple message that almost anyone can follow: by limiting your expenses, not spending money on frivolous purchases, and investing early and often, you can quickly increase your net worth. and take financial control of your life.
Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.