Tag Archives: Success

Was it Luck or Good Habits?

Has anyone ever told you that you are lucky?  I don’t share my financial situation with many people.  I do on this blog, but I do so anonymously.  There have been a few times in my life when I broke my code of secrecy.  I share about my financial situation when someone asks me for financial advice.

I am not a financial advisor, so I cannot give advice on a professional level.  I can, however, share my experience with others.  People seem to get more out of a story than from a list of steps to follow.  This is where I started, this is what I did, this is where I am.

When I have shared my relative level of success, it was never to sound braggadocios.  It was always in the spirit of trying to help that person improve their financial situation.  Most of these conversations where started by them asking if I think they should take out a car loan or if they should start buying stocks.

I never share closed-ended answers.  I just share about how I navigated similar situations.  My approach is to let my results be their guide.

Most of these conversations were enlightening discussions for them.  The other person walked away surprised by what was financially possible if they applied some discipline in their life.  They thanked me for sharing my experience with them.  Some said that I was lucky to be in the financial shape that I was in.

That comment made me think.  Was I lucky?  I never thought of myself as unlucky, but I never thought about if luck contributed to my financial situation.

On some levels, I was lucky.  I was born into a stable and loving family who always supported me and would correct me when I needed it.  There have never been any major health issues in my life.  I also have been blessed with the most selfless person who I have ever met for a wife.  Yes, I do count my lucky stars every day for those blessings.

Debt

Debt causes me fear.  At a young age, I took out a small car loan.  The car ended up being a junk and I had a few grand in debt and nothing to show for it.  I swore off debt from then on.  Fortunately, debt spooked me at a young age.

Being afraid to go into debt forced me to work my way through college.  That allowed me to pay cash for my first two years of community college.  The only debt that I had to take was to pay for my second two years.  I came out owing only $18,000 and my student loans were only $156 per month.  Many of my coworkers had student loan payments of over $700 per month.  They lived in dorms, partied, took out the meal plan, and did not hold a job during college.

The same fear carried over when it was time to buy a house.  My wife had bought our house before we were married.  She was able to make payments on her salary alone.  Instead of moving to a bigger house in a new development, we just decided to stay in that house and pay it down quicker.

Savings

Saving money just came naturally for me.  I did not have debt, so I had money in my pocket.  The work that I performed for my first few years of full-time employment was hard manual labor.  It just felt like the right thing to do was to save the money.  It would have depressed me to blow it on what I felt was stupid crap.

My saving rate was always at least 30%.  Saving money was fun.  It was like a game.  How could I find ways to save more?

That mindset became ingrained in me.  As I earned more, I saved more.  Saving money gave me pleasure, so I kept doing it.

Saving is like exercise.  It is hard but addicting.  A hard workout is painful, but also provides pleasure.  There is a sacrifice with saving money, but the sense of accomplishment is more pleasurable to me than the feeling I get when money is wasted.

Investing

I did not want the money that I was working hard to save just sit in an FDIC checking account.  It would not grow fast enough there.  I wanted my money to grow and work for me.

After reading about compound interest, I decided to invest in mutual funds.  They felt like the right fit for me.  Individual stocks seemed to take up too much time with having to research companies.  With mutual funds, an investor can buy a basket of stocks in a single fund.

My approach to investing was based on life-cycle investing.  When I started investing, I did not have much money, so I wanted to maximize returns.  In my 20’s, I was invested 100% in stocks for about ten years.

After I had a nice little nest egg, I took some risk off the table.  I added some bonds to my asset allocation.  They helped reduce the volatility when the economy tanked in 2007-2009.

Ten years later, I reached financial independence and decided to add even more bonds to reduce risk.  The game is not over, but I have a big lead.  It is now time to run the ball and play stingy defense.  For the next ten years, I just need to earn about 6% based on my savings rate to reach my goal of early retirement.

Conclusion

I was lucky to be born with an able mind and body.  Yes, I have caught a few lucky breaks in my life.  However, I feel that I had taken the required actions and developed the right habits to put myself into the position to be successful.

Lottery winners are lucky.  I worked my butt off for everything I have.  I did not go into debt because I did not want to be backed into a corner by creditors.  Saving money seemed logical to me because I did not want to waste all that energy to just blow it.  As an investor, I took a risk and accepted market returns during booms as well as recessions.

Even though I do not believe that luck has had much to do with what I have achieved, I count my blessing every day.  Life has taught me that it is much better to be practice humility and to always help others.  As the result of all of that, I truly have a thankful and grateful heart.

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Know Your Competition

We start competing the moment we are born.  Competition is everywhere.  Completion is natural.  It is the cycle of life.  Eat or be eaten.  We must compete every day.  Only the strong survive.

When I was a boy, our dog had a litter of puppies.  They too were competing from their earliest days.  They would compete to get to the bottom of their basket to stay warm.  The puppies would compete with their brothers and sisters to get closer to mom to eat.  When I would watch and care for this litter, it did not take long to establish who the alpha of the litter was.  He always ate first and would not roll over when playing with the other pups.  How could such a young and tiny dog have established such will?

You might not see yourself as an alpha or even a competitive person.  If you are working on reaching financial independence, odds are you are more completive than you might think.  I would guess that you are very competitive.

Before I really gave it much thought, I never saw myself as a competitive person.  For the most part, I am a laid-back guy.  Growing up, I played baseball but was not very good.  The only football that I have ever enjoyed playing was when I played Madden.  The chess club or the debating team were also not for me.  I always saw myself as a Type B personality.

The first time that I realized how competitive I truly was when I read about capitalism.  I realized that I was competitive when I read that capitalism as an economic system where trade and industry are controlled by private owners who compete for profit.  I have been competing for a buck since I started earning a paycheck.

Even though I have only won a few trophies and awards in my life, I am hyper-competitive.  My whole adult life has been focused on competing.  I am not referring to being in competition with my neighbors.  What they have is not my concern.  The type of competition I am referring to is competition with myself and society to reach my goal.

I set a lofty goal.  My goal was to become financially independent.  For anyone to reach financial independence, there will be a great deal of competition.  On the road to that level of success, a person will have to face off against and defeat internal and external competing forces.

Postponing gratification is a form of competition.  The ability to save money is always at odds with the desire to spend money.  It is like there is an angel on one shoulder saying to save as much as possible.  On the other shoulder, there is the temptation to spend and waste money.  Temptation says if you want to be happy, buy that new car, house, or boat. You can afford it and you deserve it.

It is easy to give in to temptation.  Who wants to work hard and sacrifice to get ahead?  How can anyone sacrifice for decades to become financially independent?

Spending and having a good time is much easier than saving and investing for the future.  Internal competition is fierce.  At times, It is an internal fist fight.  It certainly felt that way for me.  As the saying goes, it is harder to conquer yourself than to conquer a city.  in order to conquer self, a person needs to develop emotional intelligence.

While it might be harder to conquer yourself, the external competition is also not exactly easy.  Most resources are limited.  Everyone is fighting to get ahead.

If you own a business, you are competing with other businesses and market forces to be successful.  Even if it is a side gig, there is still competition.  To survive, a business owner must provide the best products or services at the lowest price.

While it might appear that being an employee is easier than being an entrepreneur.  Being an employee is far from being easy.  An employee must compete to land a job.  There is competition to keep the position.  There is competition with peers to advance in the organization.  If your boss is a jerk, dealing with them brings on a level of competition.

The competition does not end after you earn the money.  There are competing forces who want to take your money.  Marketers are out to sell you stuff that you do not need.  They don’t care if you land in debt.  They are just competing to sell you something and to take your money.

You might have to compete at home to keep your money.  You might have your emotions under control, but your family has their own needs and desires that need to be considered.  It is not easy to keep a family on a budget.  It takes creativity to keep a family satisfied and not bored.

They might be the most difficult completion that you have to face.  You should not play a zero-sum game at home unless you want to have your family resent you.  It is wise to approach this level of competition with good faith and to negotiate.

Competition truly is all around us.  We face competition daily.  It does not mean that you are not competitive just because you were not the captain of the basketball team in high school.  For some people, it takes longer for their competitive drive to develop.

If you have decided that you want to be successful in this world, that thought alone requires a competitive nature.  If you are taking the required steps to get ahead in life, you are more competitive than you give yourself credit for.  If you are working on reaching financial independence by paying off debt, saving, sacrificing, and investing, you are extremely competitive.

Do you see yourself as being competitive?

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My Uncle Xavier: Veteran, Millionaire, Mentor

I have been thinking about writing this post since I started my blog.  As you will read, Veterans Day might be the most fitting day to publish it.  This post is about my Uncle Xavier.  As the title suggests, Xavier was a veteran, millionaire, and mentor to me.  Below is his story and a little bit about our relationship.

Like many members of the Greatest Generation, my Uncle Xavier had humble roots.  He grew up in West Scranton, Pa during the Great Depression.  His Father owned a small corner grocery store.  His mother was home-bound because she went blind at an early age from diabetes.

After high school, there was not much opportunity for Xavier.  He lived with his parents when he was in his early 20’s.  Jobs were hard to come by in those days.  He used to tell me about taking the Laurel Line Train from Scranton to Pittston to work at McCrory’s Department Store.  He described the scenery as “the outskirts of hell” as the train would pass by the stripping pits where coal was once mined.

When Xavier was age 26, he was drafted into the U.S. Army.  It was the early 1940’s and the world was at war.  While in the Army, he served on 2 major theaters in Northern Africa and in Europe during World War II.  Even though he saw horrific fighting, he spoke highly of his time in the service.

After the war ended, he returned home to Scranton, Pa.  While the economy was booming for most of the country, the good times skipped Scranton as they always seem to do.  He could not find a decent paying job.  He decided to take advantage of the newly created G.I. Bill and went to The University of Scranton where he earned a BS Degree in Economics. He then moved to New York City and went to graduate school at NYU.

My Uncle was a straight-laced guy.  He did not enjoy living in Greenwich Village all that much.  He said the bohemian crowd was not for him.

Following graduate school in New York, he decided to move to the Washington D.C. area.  He said that there was a tremendous amount of job opportunity there.  He had an easy time landing a government job because he was a veteran.

While in Washington D.C., he met and married my Aunt Ann.  They both worked for the State Department.  They settled into a townhouse in Arlington, Virginia.  He said it was a great investment because it was near a new Metro Station.  They also bought a weekend house at Bethany Beach in Delaware.

My Aunt loved to travel.  She made my Uncle Xavier join a travel club.  They took many trips to Africa, Europe, Asia, and South America.  They were truly jet-setters.

Even though they lived the high life, my uncle was a great saver and investor.  This was many years before index funds were available to individual investors.  My Uncle invested his money in blue-chip stocks.  He was a big believer in the consumer staples sector.

My dad would talk about Uncle Xavier from time to time, but I do not remember meeting him until 1998 when I was age 21. He moved back to the Scranton area because he had to move his wife into a nursing home and wanted to be closer to the family.  One Saturday evening, he called my dad and said that he wanted him to come to his apartment to talk about money.  He brought me with him for the visit.

It was a surreal meeting.  My Dad was an Accountant and he wanted him to be the executor of his will.  He also needed help picking out a PC because he wanted to track his investments online.

When we were at his apartment, he showed my dad his investment portfolio.  He had $1.8 million dollars invested in stocks with Merrill Lynch, tax-free bonds with Fidelity, and mutual funds with Vanguard.  I think my dad almost had a heart attack when he found out he was worth so much money.

I never met a millionaire before.  I was taken aback.  It felt surreal.  I thought that this would be a great opportunity to learn more about the markets.

Moving forward, my dad felt obligated to spend time with Xavier.  It was truly a pleasure to hang out with him.  We went out to the local diner for breakfast almost every Saturday for many years.  We took him to see a Notre Dame football game at FedEx Field in Washington D.C. and my parents took him to Las Vegas twice.

I was already saving and investing for over one year when Xavier came into my life.  Meeting him enhanced my desire to become financially independent.  He taught me so much about living below your means and investing.  He was worth almost two million dollars and lived in a one-bedroom apartment.  He spent his days reading the Wall Street Journal, watching CNBC, and taking two trips per day to the nursing home to have lunch and dinner with his wife.

Uncle Xavier was in my life for seven years.  I spent a great amount of time with him.  Other than going out to eat, I would take him to his appointments as he was getting older.  I was in college, so I had some free time to do so.  My Aunt passed away in 2001 and he passed away in 2004.

I have experienced death before, but never mourned anyone the way I mourned when he died.  It hurt.  I felt like I was punched in my chest.  I remember crying for a good 10 minutes when he passed away from a heart attack.

I miss him.  It has been a while since I gave him this much thought.  He was my Uncle, but also my friend.

While other 21-year old kids were out messing around, I was learning how to live and be a man from a guy who truly was the millionaire next door.  Spending time with Xavier has shaped my life.  I am truly grateful for the time that we spent together.

I hope you enjoyed this special veteran’s day post.  It is a tribute to my uncle, my father, as well to all the men and women who served in the armed forces.  Thank you all for your service.

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