Should I Invest In SpaceX?

Brought to you by the EveryDollar app. Start budgeting for free today. I'm debt free. I have my emergency fund. I have a regular income that supports me. I'm single. Children are grown. Live on their own. My question is, I would like to talk to someone about investing with this Elon Musk SpaceX. I have a little extra money. I'm thinking about investing. I do have investments, but they are through a company. It's not something that does personal investing. And I figured your show could guide me a little better. Sure. Okay. So for people watching or listening at home, as of the day we're doing this show, SpaceX has gone public, as they say. They IPO'd at the price of $135. It opened at $150. The price is already over $160, over $162 now per share. And so you're saying, I've got a little extra money. Should I buy this single stock in this company that I think is going to do well? Correct. How much money? Wait a minute. Y'all both said something. I'm sorry. How much money are we talking? How much do you plan on buying? I wanted to go small, like maybe 10 shares, 100 shares. Okay. So about $1,600 worth? I'm sorry? So about $1,600 worth is what you're willing to put into this? Yeah. Or 5,000. I don't want to lose a lot. I had a good friend tell me she believed it is going to skyrocket, but how long it will is the only time I'm going to tell. Well, I love the pun that you used. She told me it's going to skyrocket SpaceX. Get it? Yeah. I like that. Okay. Well, I don't know if your friend is a fortune teller. I mean, we're all hoping it does, but I also remember when Dogecoin was pushed by Elon on SNL and everybody thought, guys, everybody should buy Dogecoin right now. And it didn't do what we thought it would do. Now that's a meme coin, obviously very different from a company that's producing a good, a product and service here. So I'm not going to put in that category, but this is the same guy we're talking about. And I'm a Tesla fan. I think Elon is really good at launching new innovative things. So it would not shock me if this stock doubled eventually. Yes, I'm sure it'll do just fine. But either way, I kind of want to give you a basis of our teaching around this so that you can understand why our advice will be what it is. If you called in and you told me, hey, I've been investing in mutual funds for the last 20 years. I've got over a million dollar net worth, blah, blah, blah, blah, blah. And I want to play a little bit and buy a couple of single stocks and spend 5,000. I wouldn't stop you from doing it. I think that you would have amassed the net worth to be able to do that. So if that's not your situation, we need to know. It is. It is your situation. What's your net worth? I talked with Colbridge the other day and I'm around $200,000. Okay. How much of that is your investments? That's just with Colbridge. So you've got $200,000 with them. I have a Roth. Yes. Great. What else? I have a Roth. It's just a little bit in that one. And then I have savings and checkings. You know, I've spread it out. I don't want it all together. And it all equals $200,000 total? No, that's just the financial one. What's the total of your net worth? Close to 250. Okay. $250,000. Do you have a home? Correct. Yes. Okay. Is there a mortgage on it? Paid for. Paid for. No. Fantastic. Okay. So here's the general teaching. If you are sort of eating the vegetables first, you're investing 15% of your household income into tax advantage retirement accounts, like a 401k or IRA. Roth is even better. Then you can spend a little fun money on this kind of stuff because it's not a huge part of your world. So just imagine this. Dave Ramsey calls it the kitchen table test. If you put this $5,000 on the table and it burnt up in flames, would you survive? Would you be okay? Yes. Okay. That tells me it could be a fun ride for you. Now, it may add some stress. You might see it go up. You might see it go down. And the truth is the US stock market has doubled about every seven years. So that $5,000 would turn into $10,000 if you just put it into an S&P 500 index fund. So what you're really saying is, I think this is going to do so much better than the S&P 500 that it's worth it to lock this money up in this stock right now. For how long? And see, that's where we get into... That's the question mark. Do you plan on getting out? Do you plan on just holding it forever? I'm thinking at least 10 years. So I can tell you, what we teach is if you're still building your net worth, which you are, you're not at a point where you could stop investing your 15% into mutual funds. We like diversification. We like investing money into mutual funds where there's a mix of 100 plus stocks inside of that one fund so that you're not placing your eggs in one spaceship in this case. And I don't believe... I mean, you're asking me. Today, I wouldn't do it. I think your money is better spent going into mutual funds as you continue to build your net worth. Like I said, if you had called here and you're like, hey, I got a million dollars. I'm doing really well. I just want to play with this money. I would say, you know what? You've been doing all the other things right. Go ahead and do it. But I think you're still building. And the truth is, over time, good growth stock mutual funds, aggressive funds, they're going to add SpaceX into their mix. And you're going to have a piece of that. Do you see what I'm saying? If the company's worth its salt, it'll end up in the S&P 500. And therefore, your mutual funds and index funds would already own a piece of that. Exactly. Just in a more diversified way. I got you. So there's nothing wrong with what you're doing at your stage. But you want to just be thinking about the opportunity cost of where else could that money go? And will this add more stress to my life than it's going to add wealth or joy? Correct. That's the issue with single stocks is they're just more volatile than a more diversified fund that has 90 to 200 companies in it. That's a little more balanced. I think also to the motivation behind it. If it's just this is so fun and I just want to play. But if you're thinking at any point, this is the thing that's going to take my portfolio to the moon, then you need to take a moment. So many space puns. I know. I can't help it. Well, you're fun to talk to. You are. You keep on the path. Stay out of debt. Keep investing 15% of your income. And if you want to use some play money, and this applies to anything, guys. If you're looking to invest in crypto or Bitcoin, we would be saying the same exact thing. It's volatile. It's risky. You better know that you could lose all this money and you should be okay with that if you're willing to put this money into it. And make sure that this kind of stuff is no more than 5% to 10% of your total portfolio. Yeah, I agree. Otherwise, too much concentration in that one thing. It feels like a baby step six activity in that I want to make sure I'm doing my 15% where it goes. I want to make sure I'm doing kids college, putting a little extra on the mortgage. And then if I have some play money, it's fun. And I am not, just to let everyone know, I'm not investing in SpaceX. I'm not buying single stock in that company. As much as I'm rooting for it, I'm like, it could double and I could have so much regret. Or I could just keep doing what I'm doing, invest in mutual funds and stay boring. All right, you get an opportunity to go to the moon, like Katy Perry and all those people do. Do you take it? No, I'm scared of heights. That's just really high up is all I'm saying. Here's the thing, I don't think my wife would let me. Because if something were to happen, she would collect a very large life insurance policy. She'd be yelling at you from beyond the grave. Exactly. I would never hear the end of it. I'd be up there in heaven and she'd be yelling to the skies. It'd still make it through. And I'd hear the echoes. The angel would be like, who is that? I'm like, sorry, that's my wife. She's really mad that I went to space. And never came back. Never came back. I want to float. That's what I realized. I wanted to be an astronaut growing up, but I realized I just want to float. Just get in one of those salt float chambers, you can get the same thing. You can float in other ways. You don't have to go to space to do that. Create your free every dollar budget today. The simplest way to budget for your life.