Money Talk With Tiff
Money Talk With Tiff
Episode•December 19, 2023•23 min

From Futon to Fortune: A Millionaire's Journey with Steven Stack | Ep. 286

Ready to transform your financial future? Join Tiffany as she sits down with Steven Stack, a millionaire who turned the market's mayhem into his wealth-building playground. Learn how Steven's early exposure to savings, a pivotal Denzel Washington movie quote, and a fearless dive into the stock market during its lowest ebb catapulted him into the millionaire's club. This episode is not just a story; it's a blueprint for anyone daring to dream big and invest smart. Connect with Steven Website: http://stevenlstack.com Instagram: @stackingwithstack Connect with Tiffany Website: https://moneytalkwitht.com Facebook: Money Talk With Tiff Twitter: @moneytalkwitht Instagram: @moneytalkwitht LinkedIn: Tiffany Grant Additional Links & Resources Inside Man (Movie): https://amzn.to/3RtOQU6 (affiliate link) Roth IRA vs Traditional IRA: Which One is Best For You? (https://moneytalkwitht.com/blog/roth-ira-vs-traditional-ira/) More Information about the Great Recession: https://www.history.com/topics/21st-century/recession Mastering Your Health Savings Accounts: 10 Tips for Making the Most of Your HSA Maximize Your Child's College Savings With 529 Plans This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

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Key Takeaways

  • 1

    Start investing aggressively early, even during market downturns

    Steven began maxing his 401(k) in his early 20s during the Great Recession, putting 90% into stock funds and 10% into company stock

    He viewed market crashes as buying opportunities, inspired by the quote 'when there's blood in the streets, buy property' from the movie Inside Man

    This contrarian approach led to 5-10x+ growth on his early investments

  • 2

    Saving alone won't build wealth—investing is essential

    Steven realized in college that CDs and savings accounts wouldn't generate enough returns to build real wealth

    He knew he needed greater returns than traditional savings vehicles could provide

    This mindset shift prompted his entry into the stock market via his employer's 401(k)

  • 3

    Maintain a long-term mindset for investing success

    Steven's parents instilled a patient mentality from their farming background—'things take time'

    He set a goal at age 25 to be 'retireable' by 45, focusing on the long haul rather than quick gains

    He never considered pulling money out during downturns, trusting that markets recover over time

  • 4

    Diversify across multiple account types for tax efficiency and flexibility

    Steven uses 401(k)s, Roth IRAs, taxable brokerage accounts, HSAs, real estate, and custodial accounts

    This multi-bucket approach allows for tax-efficient income replacement in retirement

    He also invests for his nephew through a custodial account using birthday money and chore earnings

  • 5

    You may not miss the money you contribute to retirement accounts

    Steven lived on what remained after maxing his 401(k), starting with just a futon as his nicest possession

    Tax savings from pre-tax contributions reduce the actual impact on take-home pay

    Tiffany recommends starting with the employer match and adjusting as needed

Intro

  • Tiffany interviews her cousin Steven Stack, a self-made millionaire who built wealth by investing aggressively during the Great Recession and maintaining a long-term mindset.
  • Steven Stack is a millionaire investor and entrepreneur who started with a futon and built wealth through 401(k) maxing, stock market investing, real estate, and diversified accounts. He shares his journey to inspire others.
WebsiteInstagram

– Early Money Mindset and the Decision to Invest

  • Steven's journey began with watching his entrepreneur father work diligently and observing his parents' saving habits. In college, he realized CDs weren't providing meaningful returns and knew he couldn't save his way to wealth.

I'm not going to be able to save my way to wealth... I just knew I needed to get greater returns than the stuff that I knew as far as savings accounts and CDs.

– Steven Stack

– First Steps into the Stock Market via 401(k)

  • After graduating with an engineering degree, Steven's first exposure to investing came through his corporate job's 401(k). With only a futon as his nicest possession, he decided to max out contributions despite the ongoing Great Recession.

I'm just going to put as much money as they'll allow me to withdraw from my paycheck into this 401k and just figure out living with what's left.

– Steven Stack
  • He allocated 90% to stock funds and 10% to company stock—an aggressive strategy during a market crash.

– The Denzel Washington Movie That Changed Everything

  • Steven's contrarian investing philosophy was sparked by a single line from the 2006 movie Inside Man: 'when there's blood in the streets, buy property.'

When things are down, people are trying to get out of the market instead of rushing into it to get these discounts.

– Steven Stack
  • He recognized that market downturns are like sales on quality assets, and he bought while others fled.

– Long-Term Mindset and Patient Capital

  • Steven credits his parents' farm upbringing for instilling patience. He set a goal at age 25 to be 'retireable' by 45, well before FIRE terminology existed.

Most of the things that are of incredible value take time. And investing is not an exception.

– Steven Stack
  • He maintained a long-term view throughout, never considering pulling money during downturns.

– Results: Massive Growth Through Diversification

  • Steven's early investments grew 5-10x or more. Beyond 401(k)s, he invested in foreclosed real estate, funded Roth IRAs for over a decade, used taxable brokerage accounts, HSAs, and opened a custodial account for his nephew.

I would easily say that there were things that we're talking five, six X types of things. Or if I'm talking about my dollars from the beginning, well over 10 X.

– Steven Stack
  • Tiffany emphasizes the power of diversification across account types for tax efficiency in retirement.

– Where to Find Steven Stack

  • Steven shares his website and social handles for those wanting to connect and learn more about wealth building in all its facets—money, health, and relationships.

Books Mentioned

Resources

Topics

investing401kstock marketlong-term investingGreat Recessionretirement planningdiversificationRoth IRAreal estate investingwealth building
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