How did you do it? Financial Success Thread

[ArturiusX]

Save 30% of your income, re-invest it in diversified portfolio of housing and stocks, and take advantage of strong business opportunities. You'll be very rich by 40.

[Do Not Reply]

I lucked into a lucrative job when I was 17 and worked my ass off at it. I'm not RICH rich, but I was in the 1% salary bracket throughout my 20s and I have done well by any standard.

I did an OK job of capitalizing on the windfall, making some good decisions and some poor ones too.

The lessons I took away:

- having money can be surreal, but don't mention it too often or to the wrong people. My #1 regret that I reminded my friends of where I was at way more often than was necessary. You're asking them to share the burden of surreality without sharing in the actual, you know, MONEY. So show some restraint. I must have been insufferable sometimes, but was fortunate to have good friends who stuck around and didn't take advantage.

- it's tempting to spend money on friends who can't afford to do so for themselves, but this will breed resentment. Do things they can afford.

- the incremental utility of (spent) cash drops off sharply once you have more of it than the average person. The system is rigged so that looking and feeling rich is absurdly expensive. If your savings plan doesn't pinch sometimes, it's too lax.

- one hidden cost of a baller lifestyle is that it lets the money define you, so that adjusting becomes a life-altering trauma instead of a budgeting exercise. Settle on a lifestyle and social circle that can weather your financial downturns.

- do everything you can to avoid dealing with people who work on commission.

[SlowHabit]

When I was in high school, I planned on graduating college, find a decent job, save enough money, and voila “do my own thing.”

I found hold ‘em during my sophomore year in college. I was still going to graduate college but I wasn’t looking for a decent job anymore. As I accumulated more cash and cash, I quickly realized “doing my own thing” isn’t as easy as it seems when you start doing it. I get on tilt nowadays whenever I hear my friends or high school students wanting to “do their own thing” after a decent job. I mean, wtf is “doing your own thing” anyway?

I learned that creating a business is hard as hell. You can’t just have money and think that somehow, “your money will be working for you.” Even worse, those that got through high school and college easily tend to think that if they try “extra hard and care a little,” they’re going to achieve greatness. Well, it doesn’t work that way. Just because you try hard doesn’t mean your business will profit. It has a higher chance of surviving but there's no guarantee.

Then of course, I found stocks. OMG! I’ve always wanted to trade but due to lack of capital, I didn’t start until near the end of college. It was going to be a piece of care. Buy high sell low. Well, the market told me to go [censored] myself. So I started reading about the market. I put down the investment book after five minutes because I didn’t know wtf Benjamin Graham was talking about in the “Intelligent Investor.” But I knew I don’t want to bet/fold/raise all my life so I forced myself to start all over again. I went out and buy books and books for stocks. But unlike the first time, I learned what all the fancy vocabularies meant. Then it didn’t seem like I was chewing glass anymore. Needless to say, I read more in 6 months about stocks than my whole education combined. And I actually went back and read on sessions I didn’t understand [which unfortunately was far too many times].

Then everything started to make sense. Buy when the market sells below the business’s value. Why didn’t I think of that? I am young and dangerous now. Well, I learned that I was young but I was as dangerous as low-stakes grinders at live games. I read more and learned that I didn’t know anything.

During this time, I got into real estate investing. Wow, I love America. Buy a house and let others pay off your mortgages. Or buy foreclosure properties and fix it up …???? … profits. What I neglected when those thoughts ran through my head was who can I trust in this business? How do I price these properties, especially in the current real estate market? Why are there so many freaking papers to sign? And why the hell California’s prices so out of wack?

Ok, I’ll sum it up. Here’s what I learned. Work with people you trust and who opinion you respect [Buffett]. Write down an idea that you think might make you moneys. Then write a business plan and see how far you’ll go. If you actually complete the business plan, find out how you are going to start it and if you need any partner or not? If you need a partner, where are you going to find one? And during any of the downtime, will you think, “this shiet isn’t worth it. Set mining and stacking others are more fun and profitable than this.”

And oh, I learned that I love stocks [not because I ran great but because it's the only way for me to become wealthy without getting involved in politics or run businesses or working with others]. I used to think I enjoy working with others but what I really meant was I enjoy working with one or two persons. I also learned that I was born in the wrong decade because if I was born a decade earlier, I would be chilling with the dotcom boom, the real estate boom, the poker boom, the web2.0 boom, and the foreclosure boom. The only thing that I have going for me is the SlowHabit boom. Hopefully, you'll be hearing from my friends [and virtual buddies] how they managed to miss out on that.

[ahnuld]

slowhabit, I dont know why but I really appreciate your post.

[Taylor Caby]

Good posts guys. I especially liked the post about adjusting to the wealth and the point about dealing with people who work on commission is one i am learning the hard way.

[ QUOTE ]
I also learned that I was born in the wrong decade because if I was born a decade earlier, I would be chilling with the dotcom boom, the real estate boom, the poker boom, the web2.0 boom, and the foreclosure boom. The only thing that I have going for me is the SlowHabit boom. Hopefully, you'll be hearing from my friends [and virtual buddies] how they managed to miss out on that.

[/ QUOTE ]

One thing I would like to add is that there is always another boom. Yes, most of us (young guys) missed out on dotcom boom. I missed out on RE boom as well because I didn't have the money or more importantly the time to make a big splash.

I hear people say things all the time like "I wish I had been playing online poker when the boom started." Or "I wish I had been trading when it was much easier 15 years ago." I generally find that people who say things like this are not the type of people who WOULD have been "in" on the booms at the beginning. It's true, it's always (relatively) easy to make absurd amounts of cash at the beginning of a boom time. It is NOT easy to identify what the boom will be and develop the system to profit from it because at the beginning no one else has ever done it.

What I have learned from this concept is you need to be thinking to the next boom. If you, as an average American (or whatever), are aware that a boom is happening, it is 99% of the time too late to do much about it.

Challenge yourself to think "what's next?" If you can predict with even a remote degree of accuracy what the next big thing will be, you will make far more money than the guy who waits to learn about some "system" from someone who has already done it and then complains his whole life about how it just isn't as easy as people say. Well, yeah, it isn't anymore, because everyone else knows about it now.

I don't know, just a little rant/something i've been thinking about lately.

Please keep these coming, I am really enjoying this stuff.

El D, you're up!

tc

[AZK]

I read slowhabits post and was going to post the exact same thing TC did. He just beat me to it and more eloquently.

Just to highlight. Stop thinking [censored], I missed that boom. Start thinking about what's next.

[xxThe_Lebowskixx]

i have alot of ideas but i am one lazy SOB.

[BPA234]

Sorry in advance, this turned out awfully long. (Also, Cardrunners is great and I am happy that it is doing well for you.)

So far, I think I have had an interesting run. Based on my childhood peer group; not dead, addicted to drugs and/or in prison equals monster success.

I moved out of my family home at fifteen and worked two jobs: gas station attendant and night-shift dishwasher. The first paychecks were like hitting the lottery. After several months, I realized that I may have been overly optimistic about my long-term prospects, so I quit the two jobs and pursued other opportunities.

Also, my former schoolmates driving through the intersection where my gas station was located (every morning and afternoon) and hanging out the bus windows, yelling words of encouragement like " nice move piss-pumper!" helped to make it an easy decision.

Some of the opportunities I pursued included all the usual low-skill temp jobs as well as a few interesting jobs like carny worker, music studio peon and temporary tattoo artist ( yay strippers, ugh fat, old Italian guys).

After about six-months of that BS, I went to work in a construction trade that was a family occupation. I had been dragged into the trade at a young age, and despite my teenage rebellion, my age (I always had to lie about my age and claim that I was 18) and the hard physical work I realized a skilled-trade was better money, steadier and less hours than working two no-skill jobs or applying temporary tattoos to some guido's fat ass.

Over the next twenty-three years, I owned two businesses. I started the first one at seventeen. The second one I started at twenty-four. By the time I was thirty, my net worth was >1M. Excluding some small investment properties, my entire net worth was tied up in my business.

During that fifteen year time period, I experienced times of tremendous success and equally awful failure. After my first business went bust during the recession in the late 80's, I moved from the Boston area to the mid-west. When I arrived in the mid-west I had no money, no car and few prospects.

I arrived with a small suitcase that contained all my personal belongings and a few hand tools. I stayed with a family member and went back to work. After a month, I had enough money to either buy a POS work vehicle or rent a small apartment in the worst part of town. I rented the apartment.

I was then laid off. Incidentally, here's a lesson: You can sleep in your car. But, you can not drive an apartment. Always get the vehicle first.

The next few months were a lot of fun. I was down to "borrowing" toilet paper from the library and stealing hot sauce from Taco Bell to put on the only food source I had left: Uncle Ben's Instant Rice which was really cheap and available in huge boxes from the discount supermarket.

At this time, I also ran afoul of the law. I needed to borrow a truck from the guy who I had previously been working for. I tracked him down to his usual after work hang-out and found him sitting with several of his friends.

They had all been there since lunch and were showing the effects. One of them for whatever reason, started ragging me for having a heavy Boston accent.

I ignored him while I tried to negotiate the borrowing of my former boss' truck. As the keys were being handed to me, the guy who had been mouthing off knocked the keys to the floor.

I picked the keys up and started walking out. As I reached the door, I just couldn't help myself and I turned around.

Apparently, in that small town, they don't like it when losers from Boston beat the [censored] out of the locals; especially when their fathers' are politically well connected.

Also, my "been reading a lot of Hemingway lately" defense, did not help. I got to go to the local vacation center for the poor and hopeless. Apparently, it was owned owned by the NAACP, because there were only African-Americans there with just a few dumb white people like me thrown in for texture.

On the plus side, during that whole span of time, I lost some weight, quit smoking, read a ton of books, lost my racial prejudices and grew the [censored] up.

I also lost the arrogance of youth that was born of being able to earn a lot of money from a young age. It also gave me some time to think about my life and the mistakes I made to end up where I was. Basically, up to that point, I had lived my life like there was no end in sight. I had made a lot of money (especially for a kid > 60K annual) and despite the hard work, it all seemed very easy.

Lots of -EV lifestyle choices along the way. Lots of trips to AC, the track and it was the 80's after all, were distractions that drained away my earnings and contributed to my first business failure.

In my defense, all of that stuff was standard for where I was from. Growing up, college was never an option and the expectations, if there were any, were always very low. I actually had friends with names like Fast Eddie (father was a bookie), Smoothie (degen gambler), Feen-Dog (father was a two-bit criminal, drug dealer and, in his youth, a hitter for the boys in Southie) Rocky (true name, I swear) and other assorted winners.

At any rate, at thirty-one, I did a business deal with a large competitor that shuttered my business and transferred all assets and liabilities into a new corporation.

The new corp. had a regional presence, was 10x's the size of my old business and I was a minority partner. If everything worked out correctly, I would be very wealthy.

Here are some lessons I learned along the way:

1. Education:
Formal and field specific education are invaluable. I went to night school for both HS and college and I finally graduated with a BS in Management in 2004. No regrets.

Field specific education is even more important. You need to be an expert in your field, period.

For people in business, an absolute requisite is knowing how businesses function financially.

2. Communication:
Face to face>>>>phone>>>>email. Also, understanding that certain situations require one form or another. Major issues equal fact time, minor issues phone with follow-up by email. etc. etc.

Also, anything you put on paper should be done with the understanding that if it were read out loud in court, to your friends, or to your parents you would not be embarrassed or legally exposed.

Never write an angry word (or Alec Baldwin yourself).

3. Conflict Resolution:
Always argue the other sides case first, then respond. Also, if in that process you think, They can't possibly be looking at it like this, can they? They probably are.

4. Government:

Google conflict criminology. The same applies to all government agencies. If they are not producing reasons for their existence, then they are losing budget money. Budget money, ultimately, equals their jobs. None of these people are on your side. From the IRS to the unemployment office, they all work against you in one fashion or another.

5. Do not be impressed by titles. Especially true for bankers, attorneys and anyone from a government agency. Like above, if you find yourself asking, They couldn't be that stupid, could they? They probably are.

6. Never take no for an answer. This doesn't mean that you can't accept someone declining your offer. But, always find out the specific reasons for their declination.

7. Always pay yourself, protect your personal assets, and diversify your holdings.

8. Never quit. It can always get worse and it probably will, so you might as well keep plugging.

9. Take time away to think about and analyze your business. Do not allow distractions and focus solely on the operation.

10. Take vacations. Ten years from now the work weeks all blur together. But, the week you spent in FL or whatever will be a memory that stands out.

11. Never lie, cheat or steal. If you want to do that be a criminal, it pays better.

12. Be aggressive and fearless. WTF, they're not shooting at you and it's only money.

There are many more. But, this thing is sick long as it is.

Regarding my last business deal, nothing worked out correctly, so I am now busto. Yay bad business deals. Admittedly, when I did the deal, I knew I was letting it all ride and there was a chance I could lose it all.

I was fine with that. I am 38, white, male, degreed (in the US that means I have all the advantages) and, as my field is specialized, I am in demand.

Presently, I have a job that pays, depending on performance, from $50-400K per year. The company's ultimate owner is Warren Buffet. Which means along with a Christmas card, I get cool memo's on ethics and civic responsibility from the man himself. I live in a nice house on the water and I am basically happy . For a kid from the neighborhood, that is pretty [censored] good.

[BPA234]

[ QUOTE ]
Good posts guys. I especially liked the post about adjusting to the wealth and the point about dealing with people who work on commission is one i am learning the hard way.

[ QUOTE ]
I also learned that I was born in the wrong decade because if I was born a decade earlier, I would be chilling with the dotcom boom, the real estate boom, the poker boom, the web2.0 boom, and the foreclosure boom. The only thing that I have going for me is the SlowHabit boom. Hopefully, you'll be hearing from my friends [and virtual buddies] how they managed to miss out on that.

[/ QUOTE ]

One thing I would like to add is that there is always another boom. Yes, most of us (young guys) missed out on dotcom boom. I missed out on RE boom as well because I didn't have the money or more importantly the time to make a big splash.

I hear people say things all the time like "I wish I had been playing online poker when the boom started." Or "I wish I had been trading when it was much easier 15 years ago." I generally find that people who say things like this are not the type of people who WOULD have been "in" on the booms at the beginning. It's true, it's always (relatively) easy to make absurd amounts of cash at the beginning of a boom time. It is NOT easy to identify what the boom will be and develop the system to profit from it because at the beginning no one else has ever done it.

What I have learned from this concept is you need to be thinking to the next boom. If you, as an average American (or whatever), are aware that a boom is happening, it is 99% of the time too late to do much about it.

Challenge yourself to think "what's next?" If you can predict with even a remote degree of accuracy what the next big thing will be, you will make far more money than the guy who waits to learn about some "system" from someone who has already done it and then complains his whole life about how it just isn't as easy as people say. Well, yeah, it isn't anymore, because everyone else knows about it now.

I don't know, just a little rant/something i've been thinking about lately.

Please keep these coming, I am really enjoying this stuff.

El D, you're up!

tc

[/ QUOTE ]

All really good points. Also, remember that for every boom there is a bust that can have opportunities that are equal or greater than the boom that came first.

For example, I moved to FL a few years ago and the housing boom was going full tilt. I remember wishing I had some cash to take advantage of the bust that I knew would soon be arriving.

Right now, we are full bust mode and there are sick deals down here.

[Scorpion Man]

Taylor -- I hope the comment about people who work on commission was not regarding my referral to you...please give me a shout if it is.

SM