Trucking Pay Big?

James, you'll often see us throwing around the phrase "performance based pay." Trucking incomes vary extremely. There is considerable disparity in the final results truckers experience.

The best advice I can give is to be safe, productive, and easy to get along with. When you're being paid by the mile you have to maximize your utilization of the drive time you're allotted each week.

I've got a suggestion for you that might help you get started on a strategy for success. Keep track of how many hours you are burning through on your logs. Also keep track of the miles you are turning. If you're burning through your 70 yet only averaging something like 2,300 miles, then you've got work to do on being more efficient.

Set goals and work out your own strategies for reaching them. Your goals should focus on squeezing more miles into each week. Do this incrementally with little increases as you consistently reach your current goal. Communicate your desire for increased success with your dispatcher. They can help you understand the things they need from you that can help them keep you moving.

Your company and your dispatcher both want to see you making great money. That's how trucking works. The more efficient you become, the more money you can earn. If you're earning some good money it means your employer is also. They love that scenario. It's a win win for everyone.

The best advice I can give is to be a Mustachian. see there's this guy Mr. Money Mustache who does a bunch of free advice on his blog about early retirement. the jist of it all is you get yourself in the habit of spending less then you make and you start putting a chunk of that extra money in index funds. I'd do a crappy job of explaining those but search for what he has to say about it. one of the safest ways to invest over the longterm and get good returns and if you start now when you're this young you'll be sitting pretty down the road. I'm putting 10k in at the end of my first year and plan on doing that again each year, maybe 20k if I can start to swing it. so now if your averaging 10% return on investment per year which is how the index funds go and I keep on putting 10k in each year, in 20 years that's $430,000 interest earned. now at that point you got $640k total and if you stop putting money in then you still average $64k interest each year, that's most people's whole salary, but it's free money each year, sacrifices in the short term pay off big in the long run.

I've read some of Mr. Money Mustache as well as some others in the FIRE movement. I also follow the Minimalists. I agree with them both and, in my opinion, people would be much better off financially and emotionally if they could learn to distinguish the difference between wants and needs.

I'm in complete agreement with your method of consistent investing, and index funds are the best way to go for people that don't have the time or interest in spending a lot of effort on investment education & research.

There is a difference between interest earned and average rate of return in the stock market. The statement above, "....you still average $64k interest each year..." is incorrect. It is an average investment return, not interest paid, and to realize that money, one would have to sell part of the asset (index mutual fund).

An investor earns interest on interest bearing cash deposits, like a savings account or certificates of deposit. The initial deposit (principal) is essentially not at risk, and once the interest is paid, it doesn't go away either.

One is NOT earning interest if invested in a stock market index fund. Both the initial investment and any reinvested returns are constantly at risk in the market. For instance, the S&P 500 has averaged a 10.67% return from 1957 to the end of 2021. That is the 50 year average. Between October 2007 and March 2009, the S&P 500, and thus, an S&P 500 Index Fund, fell by 46%. So a $500,000 account in October '07 was worth about $270,000 by March '09. But then a 10 year bull run started and if one had $500,000 in the fund at that point, by the end of 2019 it would have been worth around $1,250,000! The S&P took a 20% hit in 2020 with the C-19 panic ($500k became $400k !).

Mutual funds, whether indexed to something like the S&P 500, or not, lessen an investor's risk. Investing in individual stocks can yield both better returns, as well as higher losses. I've had stocks I made a lot of money on. I've also had stocks that I lost my entire investment!

Thanks Bush Country - that was well said!

Some of the comments about "interest" were misleading and confusing.

Thanks Bush Country - that was well said!

Some of the comments about "interest" were misleading and confusing.

Thank you OS.

Just trying to contribute to the "educate" part of this web site. I may not have much to say about trucking, but I've been investing for almost 40 years. Believe it or not, that response was edited for brevity!

Bush Country I appreciate it like I was saying to read the Mustache King cause I'd do a bad bad job of explaining those. if its alright I'd like to run my whole understanding by you though to make sure I've got it square since after all it's about my future. lol

Interest is the wrong term I see that now but the logic behind it was that since me and him are both youngins we could reasonably figure the return on investment would be closer to 10% since we're talking about the stock market as a whole over a few decades, that's why I say average cause its just an example for talking general. now what I mean by interest even if it's not the right term is just the pay off, twenty years down the road with the example numbers I'm giving at 10% you could start taking out the dividend the index fund pays towards that $64k each year and the rest of it set to automatically withdraw into your account, there would be less shares cause you sold some but over a few years the amount the rest will grow back could keep resetting you back to where you were when you started taking money back out. yeah this will all depend on what the stock market is doing at that time but give it a few years and it tends to keep going back up, also why you wanna set an amount higher than what you will live on and also why you take from the index funds before touching the 401k. sorry if I cant explain it better than that but that's kinda the way it goes if I was reading him right? thanks man

Bush Country I appreciate it like I was saying to read the Mustache King cause I'd do a bad bad job of explaining those. if its alright I'd like to run my whole understanding by you though to make sure I've got it square since after all it's about my future. lol

Interest is the wrong term I see that now but the logic behind it was that since me and him are both youngins we could reasonably figure the return on investment would be closer to 10% since we're talking about the stock market as a whole over a few decades, that's why I say average cause its just an example for talking general. now what I mean by interest even if it's not the right term is just the pay off, twenty years down the road with the example numbers I'm giving at 10% you could start taking out the dividend the index fund pays towards that $64k each year and the rest of it set to automatically withdraw into your account, there would be less shares cause you sold some but over a few years the amount the rest will grow back could keep resetting you back to where you were when you started taking money back out. yeah this will all depend on what the stock market is doing at that time but give it a few years and it tends to keep going back up, also why you wanna set an amount higher than what you will live on and also why you take from the index funds before touching the 401k. sorry if I cant explain it better than that but that's kinda the way it goes if I was reading him right? thanks man

Danny K., to be clear, your thought process is correct. I chimed in to hopefully provide some clarity in terminology and the difference in earning interest and market returns. For the sake of discussion, you can use interest = return on investments. As long as you understand the underlying difference – that you are not going to get that 10% every year.

To give a personal example, I calculate my net worth at the end of every quarter. Our investments fell 18.84% between December 31, 2019 and March 31, 2020. That was when Covid hit. It has since come back, although I’m not looking forward to the calculation that I’ll do two days from now.

The point being you have to make allowances for things like that. As you said “yeah this will all depend on what the stock market is doing at that time but give it a few years and it tends to keep going back up”. That is spot on. It’s also the reason you cannot automatically withdraw 10% every year. Because there are some years in there that the market is going to be down over 30%. You can count on it. After significant drops, the market usually comes back fairly quickly. But there have been times that it took six or seven years to get back to where it was previously. The general rule of thumb is the “4% Rule”. This says that, over the course of a 35-year retirement, you should be able to withdraw 4% from your investments and never run out of money. Do a web search for that for a more in-depth explanation.

Here's the link to where I got my information on historic returns:

https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

Me: " For instance, the S&P 500 has averaged a 10.67% return from 1957 to the end of 2021. That is the 50 year average. "

Dang it. That's 64 years, not 50. I need an embarrassed emoji.

For the record, the S&P 500 actually has 505 stocks in it. The index that became the 500 originally started in 1926 with 90 stocks, and has also returned an average of a little over 10% since then.

Thanks again man that's great to hear I'm pointed in the right direction at least, when I first started pondering his blog I was looking just like your avatar there but I buckled down to get my head screwed on straight with this stuff cause money can't solve all your problems but it can make damn sure you have a hell of a lot less of them to have to be worrying about. best of luck man