A financial milestone/manifesto!

Well, I just totaled everything up in quicken and after years of being a typical debt ridden American I have acheived a positive net worth.

I made every mistake in the book aside from going bankrupt. Big credit card balances for toys and clothes, no savings, no investing, new vehicles every year or two along with financing cosmetic dentistry and medical loans. Almost had to go bankrupt after the .com bust and ended up with nothing. Even after this and getting back on my feet I didn't learn my lesson. Soon as I got a job again I got more debt.

It suprisingly only took a few years of discipline and I learned a TON about credit, cash flow, investing, home buying and everything else they really should teach you in high school.

I now have a paid for vehicle, a more modest lifestyle, a 401k, a savings account, a home and clear financial and investment goals both short and long term.

For next year I plan on getting rid of the last vestiges of credit card debt and purchasing a rental property. Note that I said I plan on, not hope to.

What turned it around and how was it done? This might be remedial for some but I'm hoping it inspires someone like me 3 years ago.

1: Take stock of your situation. For me it was sitting down, totalling up what I made, what I paid out, what I owned and what I owed. I realized that if I sold everything I had I would be roughly 20k in the hole and would make it 2 months without a paycheck. How sad is that?

2: Get in the right mindset. Defense before offense. This means you need to decide you are going to be the world's cheapest bastard. Get rid of the trappings of success because they are keeping you from being sucessful. For me this meant dumping toys like motorcycles, cars, expensive hobbies, eating out all the time, clubbing, bars, buying new clothes constantly and electronics. I sold off a lot of junk on ebay. for a while we were a single vehicle household. I still don't have a car, just a paid for motorcycle.

For hobbies I focused on inexpensive, healthy activities like hiking, camping, staying in with my wife and watching movies, lifting, mountain biking and other stuff.

3: Get a plan together. I know it is tedious. But plot out how much you earn, how much you spend and then how much you can afford to pay off debts with. Pay this first before you are tempted to buy shit. Some advise saving for emergencies, for me as the cards were paid down they could be used for emergencies which let me focus on a single goal. I started out doing $150 a check which was tough. As I shed debts (motorcycle loan, paid off medical) I was able to do more. I got promoted and do 1k a month.

4: Be disciplined. Stick to your plan. Remember that it is a marathon, not a sprint. You will be tempted to go back to your old ways. I do little rewards for myself. A cigar once a month or so. A nice dinner out. But always as a reward for doing well the rest of the time, never a lifestyle.

5: Once you're more financially sound, then start thinking and planning on investments and making money. For me that started with a no-brainer, 401k. employer matches half up to 6% of my salary and its tax free till I withdraw it. That is just free money and stupid to pass up. After that get some savings going in case of emergency. Then start reading up on investments and deciding what game you want to be in. Could be real estate, could be stocks, could be mutual funds, could be your own business, it might even be maxing out your 401k and working a job you love till retirement. I know a guy that has close to 50% of his check into 401k because he hates the taxman, has no bills but a house payment, likes working and doesn't want to F with investments. To each his own. But study up, be smart and follow your plan.

6: Next for me was quitting the rent game and buying a house. Yes its taking on a big debt and there are expenses renters don't pay. Buy what you can reasonably afford, 25%-30% of your net monthly income in a monthly payment is a good benchmark. If the rest of your bills are low you can still swing the payment if you end up between jobs and have to take up something low payment to get by. Plus you have tax advantages (interest is tax deductable), will eventually have real property and most homes steadily appreciate in value. Make this choice yourself based on the facts, the $$ involved and your position.

7: Enjoy the rewards. At this point I have a different outlook on life, work and money. I don't feel as much pressure from the financial slings and arrows life throws my way. I'm not weathly (yet), I'm not completely debt free (yet) but I'm not living paycheck to paycheck either. I realize that I really am going to be ok, in fact I'll probably retire early. I've done some things I thought would be nice but thought I'd never do like travelling overseas. I'll get to do more of those as the years roll on.

Anyhow, thats it for now. This is stuff I wish someone had told me when I was 18 and certainly at 25. Anyone can feel free to add, ask specifics, tell your own story, argue or whatever.

Great to hear! You probably sleep a hell of a lot better at night too...

I've found that the less I had the more I spent. Now the more I make the cheaper I get... LOL

Good to see you were able to turn things around.

The trappings sure are tempting, but it's better to skip on most of them.

that's awesome!

8 don't get married.


Congrats big_slacker and thanks for sharing.

So what changed your attitude and made you start taking action to control your finances? Was there a real low point for you that did it? A stern talking from the wife?

"So what changed your attitude and made you start taking action to control your finances? Was there a real low point for you that did it? A stern talking from the wife?"

Actually as I said the low point didn't cure me. The low point was living in my parents basement working an $8 an hour job, dealing with collections calls, selling my car and driving a beater. Well the beater was paid for and all I had was one credit card and some assorted bills. What did I do when I got a steady job? Bought a car and a motorcycle. WTF????

It wasn't a single moment of drama that did it. Most of it was looking back and seeing the missed opportunities.

For instance, in '00 I had the opportunity to buy a condo for 90k. But I thought my current small town/small time job didn't value me enough and I wanted to move back to the city and make big bucks and work with all the new techie toys. go to zillow.com and search 227 ski ct, stateline nv. I make twice what I did back then now and have serious resume bling in my industry. I'd trade it all to go back and slap the shit out of my younger self, tell him to deal cards 3 days a week, sit in the sun for 4 and love that $600 a month mortgage.

Or totalling up the 10 years or so that I had a $500 a month car and insurance payment and realizing that if I just kept the civic I had paid for instead I'd have 70k in the bank. And be able to almost pay off my 90k condo......

The afformentioned totalling up net worth and realizing I was 20k in the hole.

And then looking way back when I let a guy who had gone bankrupt in his early 20's talk me into getting my first store credit card. To buy clothes. He is still a good friend but I should never have taken financial advice from him. I didn't need that shit then, I was fine with a beater car and grungy clothes. Hell, it was the 90's, grunge was in.

I rememeber in high school there was a kid who at 18 had learned a trade from his dad (carpentry) and with help from dad had saved and got a loan on his first house. I met him again when he was 26 and he owned 5 houses and was only working carpentry part time to support his rental income.

Finally all this built up and built up till I couldn't ignore it any more. I never needed cars and clothes and clubs to make me happy. They never did anyway. I should have stayed the nerdy jock kid who didn't give a fuck about status or what people thought.

The last little sting was this: I met my future wife and we decided to move to the city and buy a house. Well, I had to spend a year paying down debts, selling stuff off, saving up. And the 230k house that was for sale when I moved here? I ended up paying 270k for it. Course knowing what I do now I could have financed 0 down and probably managed to squeek in with a shitty interest rate. But oh well, I've made decent $$ on my house anyway and I don't live with white walls.

I won't say what if anymore. No more crying over spilled milk. Instead of posing I'm getting back to the real me and putting myself in a position to get what I want in life, not what people convinced me was important.

Right behind you, brother. Things that are helping me:

  1. Make it fun. I use Microsoft Money and actually enjoy playing with it to keep my finances in check.

  2. Be firm with the s/o. StephenL's comment is sorta true. When I broke up with the girlie, I went back to a more Spartan lifestyle. No dinners out, etc. I'm not saying dump your girl, but make it clear to her what your plans are. Either she's supportive or...

  3. Break your larger goals into smaller milestones. My biggest one right now is $1,000,000 net worth. I'm not there yet, but I went from being 30k in the hole to about 5k all by making little goals. Next is debt-free, then 5k, 10k, etc. Reward yourself appropriately for them.

  4. More income. If you can follow Slacker's advice and discipline, don't forget to sharpen your swords, get out there and advance. Most people ignore this advice because most folks simply use the new income as an excuse to spend more. Don't get caught in this. At the same time, go out there and look for opportunities to increase your cashflow.

And GREAT JOB, SLACKER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Good points all. My wife is supportive, she wants to be a stay at home mom eventually and knows that we need to live lean for that to happen. We talk openly about our finances and both of us agree that I'll handle the $$ and she'll get an allowance.

Making it fun is part too. I like charts and graphs and calculators.

I also want to be a millionaire. The positive net worth is one small milestone for me. Next two are debt free (other than mortgage) and second house.

More money and career advancement are very nice. They are SO much more rewarding when you are financially sound. For instance, notice in my original post that I said I when I got promoted I had that money going to pay off debts. Not buying more shit. When they are paid off, I'm still not buying more toys. Monthly spending won't increase, that money goes to more 401k and savings until it is big enough to put down on another property. And on and on till I don't have to work anymore.

And T0ki, glad to hear you're doing it too my friend. Lets do a slow race to 1 mil net!

The millionaire calculator. Smoke comes out of my ears when it gives me 20 years to that number.



my fear is that, for the 1st time in my life, i have extra money that i know needs investing.

places to put it are so overwhelming.


I hope you've got it parked in a high interest saving or money market account while you consider your options, Stephen.


which one do ya'll recommend: microsoft money or quicken?