Stop 3: Where Am I Today?

 

Has any one heard of Jeff Bezos? What about Warren Buffet? Bill Gates? Oprah? I could continue but this isn’t Forbes and I can only fight the money envy for so long. These people are considered by Forbes as the richest of the rich.

Of the four people I listed guess how many inherited a significant portion of their money?

Zero.

Zip.

Zilch.

These four incredibly wealthy people made their money in one lifetime and could spend the rest of that lifetime trying to spend it to limited success. But how do they judge their wealth? Is there some comedic sized money counter hidden in a secret layer that works non-stop (presumably powered by nuclear fission)? Furthermore, how is some magazine finding this out? It’s hard to imagine Warren Buffet bragging about his wealth while munching on an Egg McMuffin.

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How did you get in here?

 

Forbes and everyone with an internet connection knows these astronomical numbers because they are not tracking their cash; they are tracking their Net Worth. By tracking their purchases of appreciating assets they can track their estimated Net Worth. Net Worth is the single most important number in your financial picture! It’s the financial scoreboard that lets you know how you’re doing. Seems important right? Than why do so few people even know their number!?!?!

Do you know yours?

 

Where am I today?

Continue reading “Stop 3: Where Am I Today?”

Stop 2: How Long Do I Want to Have to Work?

Have you ever watched a commercial for prescription drugs? There are usually two kinds. The cold clinical kind that spells out all the benefits of the drug they are advertising and the other kind. I want to talk about the other kind for a second.

The other prescription drug commercial shows people before and after they take this revolutionary drug. It opens with people miserable. They’re sitting in some non-descript room staring longingly out the window wishing they could enjoy the day. Then suddenly the hard to pronounce wonder drug is introduced to them by their doctor (who definitely is not paid to recommend this branded product). All of the sudden they’re kite surfing and running with the bulls. They’re finally living the life they always dreamed of! If you haven’t seen one of these here’s an example

While I have no pills or a medical license I do want you to get to the after just like in the drug commercials. In Stop 1 we decided what that “after” looks like. Now let’s choose when we reach that magical world. Continue reading “Stop 2: How Long Do I Want to Have to Work?”

Stop 1: What is Success?

The first stop on your Roadmap to Success is to answer this question:

What is success?

Don’t look to the hacks over at Merriam-Webster for help here. Success has as many definitions as there are people on the planet. Every person has an idea of what success is and it is in stark contradiction to what others may consider it to be.

A reality TV star likely views fame as success but Daniel Day Lewis can barely be bothered to be recognized for his amazing acting. Success is deeply personal and until you’ve quantified what your success vision is, you’ll never reach it.

The first step in shaping your financial picture is deciding what success looks like. This is a fun step. Unlike your tweed wearing 3rd grade teacher I am asking you to daydream. I want you to close your eyes. Imagine someone you admire telling you that you’re a success.

What does successful you look like?

Continue reading “Stop 1: What is Success?”

The Roadmap to a Successful Comeback

“A journey of a thousand miles starts with a single step” -Lao Tzu

Aside from providing uninteresting people with material for the captions of their Instagram photos, Lao Tzu taught any trip, regardless of distance, begins the same way. However, Lao Tzu did not provide guidance on how to take the first step.

Quotes are funny that way. They can give us a small piece of what we seek but never the full recipe. Personal finance is no different.  Look at almost any mainstream personal finance article and it is rife with quotes to inspire change.

“Save 10% of your income!”

“Build a 3 month emergency fund!”

“There are hot singles in your area!”

 Each of these quotes is equally useless without proper context. Surprisingly, it is the context that separates success from failure. Every piece of our financial picture is a cropped close-up of a much larger portrait. Bringing that entire image into focus at once is a daunting task. Naturally, every person becomes overwhelmed and asks the same question:

Where do I begin?

Continue reading “The Roadmap to a Successful Comeback”

Fighting Psychology: Why Saving is Defense and Investing is Offense

  • Note: If you hadn’t guessed it by the title of the blog, I am a combat sports fan. Throughout my writing I will use many fighting metaphors, similes, and analogies to illustrate various points.

 

In fighting, the fans are drawn to the knockout artist, dynamite arm ripper offer, or even the tap on their face until the ref stops me type of fighters. In other words, the offensive-minded draws the crowds and is showered with lucrative sponsorships at places like Mike’s Rib Shack.

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Tastes like victory!

 

We all watch their every move in open mouth amazement, and if we’re honest we find ourselves daydreaming that we are them. Flexing in the mirror and spouting off their famous catchphrases.

Their next fight comes and we are the first people at the bar to watch their next successful conquest; shouting at anyone who dares attempting to talk during their fight. And right before our very eyes it happens!

They lose…..

But how could this be? Weren’t they too smooth, too strong, too fast (too furious?) to be defeated? No man, woman, or orangutan could even touch them let alone best them!

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Ok, maybe an orangutan.

 

In the coming weeks, we see armchair pundits break down how they lost. They had a dynamite offense but lacked the appropriate defense.

Defense? Who cares about defense?!?! No one buys a PPV to watch two people block punches!

While this example may be extreme, it is indicative of how some sports fans treat their favorite teams/fighters/athletes/mascots, and even more suggestive of how most people treat their finances; only in reverse.

In finances, much like fighting, there is an offense and a defense. In this case everyone seems to focus on the defense while being terrified of the offense. For our financial purposes, I am referring to saving (defense) and investing (offense).

Continue reading “Fighting Psychology: Why Saving is Defense and Investing is Offense”

Fighting Psychology: The Value of a Dollar

                Disclaimer: I will be using my first few posts more so to discuss my personal philosophies than to impart hard advice on how to get your finances in order. This will be for two reasons:

  1. To show how my mind operates when it comes to these subjects so you can determine if our ideologies align enough for you to select me to be the Great Financial Guru, GFG for short, that I already softly tell myself I am every morning in the mirror.
  2. To generate discussion from those who read it so that we can learn new ideas together while also giving new readers an insight into what fuels my frenzied rants.

 

Method to the Madness

I have been told, quite often, that tangents often derail what otherwise are clear ideas and make trains of thought hard to follow. So with that in mind let me start this post with a tangent.

As children most of us went to school for many years and were taught assorted topics that our teachers told us would be super important for being a successful adult. You know those things we use every day like imaginary numbers, what year George Washington became president, and cursive writing for letters that aren’t in your signature block.

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My imaginary friend had to go but somehow you got to stay.

 

However, in the midst of all that vital knowledge someone forgot to tell us about finances. Heck, even our parents were little to no help as they also hadn’t learned about it in school nor did they have the internet to fall back on at the time.

Isn’t it ironic though that those same parents gave us the only lesson about money most of us ever received?

The simple lesson I am so mysteriously drawing out before directly referencing is that a dollar has value. I imagine your lesson was much like mine. Your parents took you to some store/carnival/illegal back alley poker game and gave you some cash to buy whatever your little heart desired. Being the innocent little darling who only understood that money meant “I can have things I didn’t have a second ago by trading this green paper” you did one of three things:

  1. Grabbed something that was too expensive for the amount you were given
  2. Grabbed too many affordable things which added up to more than you were given
  3. Took everyone’s money in the poker game and ruined the life of some poor sap who shouldn’t have paid to see the river

 

Once this happened your parent lovingly looked down at you and told you that you didn’t have enough money for what you were trying to purchase.

Or they just covered the difference and deprived you of a key learning moment that you could tearfully thank them for once you make your first million dollars, I don’t know I wasn’t there or paying attention enough to remember.

For most of us that’s when we learned the basic concept of money that sticks with us to this day. In my mind that is only one of the two true values of a dollar.

Continue reading “Fighting Psychology: The Value of a Dollar”

Insert Montage Here

30 and 0.

For the fight fans among you this may seem like an impressive record. The record of a champion. The footnote of a conquering hero’s career rife with awards, fanfare and the adulation of women and men alike.

I believe this situation qualifies for what they call a double entendre.

I won’t insult your intelligence this early in our relationship and explain what a double entendre is. Mostly, because I’m sure I’m using it wrong in an attempt to impress you. I’ve heard Jay-Z use it so maybe check with him. That said I will explain myself.

In this instance 30 and 0 speaks to a sudden realization of how poor some of the choices you have made really turned out to be. In this case 30 and 0 means I arrived at the age of 30 with $0 saved.

Goose Egg. Zilch. Zero. Nada.

How did this happen? Wasn’t I supposed to be married with children, a six figure income, and a full head of hair at 30? For those keeping track none of those things panned out. I’m single, balding, and fairly penniless. Come to think of it I think my lack of savings is likely what caused my balding but I digress.

Don’t get me wrong my life is pretty great. I am not writing to add to the whining that the internet has become filled with these days. Rather, I am sharing my situation in the hopes that I can show how you can rebuild your finances or convince someone younger to make better choices.

So How Did I Get Here? 

Continue reading “Insert Montage Here”