May the Fourth, Be with you!
Isn’t it a rule you have to say that today? Moving on! A major reason that I started this blog was for our own Personal Finance. Financial Independence is a dream many seek, but for many it remains exactly that, a dream. In our family, I’m the dreamer, and my wife keeps both feet planted, financially speaking. I’m constantly planning what we’ll do when we retire tomorrow. If I had my way, that’s exactly what we’d do. Last October, in my planning and dreaming I came across a blog called “Budgets are Sexy.” And since then I’ve read the majority of his posts. At least the recent ones. A few things I like:
- That he’s real
- He wants others to succeed
- He posts a monthly update of his Net Worth
- He’s not ashamed of wanting $1 million
He started his own club even. The Million Dollar Club. Simple to join, and totally depends on you. Well today, I’m joining the club.
But, before I identify our path to The Million Dollar Club, I want to reflect upon the past for a moment. Mostly because I believe where I stand today is a direct consequence of my life. You can learn a lot from the past, the important thing is to keep your vision on the future.
[Putting this together I noticed it is starting to look like a resume. If you like what you see, send me an offer. …………No, Seriously.]
When you think about how we first learn as human beings, thoughts turn to falling down, or touching the fire and feeling the pain. “I’m not doing that again!” From our family we learn that we don’t have to experience everything if we just listen to counsel from those that have been through it already. My parents taught me a basic rule of Personal Finance. It can be described in two steps:
- 10% to charity
- 50% to savings
The rest was ours to freely spend on whatever desires our little minds could discover. Truthfully, I wish I had followed this counsel my entire life, but I had to learn the hard way.
What’s another area of education? University. I attended as many do and studied the same, but learning was something that came quickly to me and I would often get disinterested in the subject matter. My saving grace was the discovery of extra-curricular competitive teams where we would work on real-life scenarios and compete against other schools. I studied Construction Management, so these consisted of real estate project development projections. Thus, a new passion was sparked. I would speak with friends, peers, and teachers of business ventures and deal strategies, dreaming of future endeavors to come. I learned strategies from audio books, reading, and hands on experience. One of my favorite books is “Rich dad, poor dad” By Robert Kiyosaki.
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Graduation came in April 2007, but not before I secured a local job in the booming business of real estate development. You see where I’m going with this right? I loved my job as a project manager for a development company. Next step was obviously to purchase a home. Homes are what I do! So in early 2008 against the counsel of my parents (but with their support), I chose to invest in a townhome. Now, you would think that I would have listened, but I was young and free. Life was good! I even upgraded my Harley!
How to tear apart the perfect world in four easy steps:
- Buy the most expensive townhouse in the development
- Builder suffers fatal accident leaving project uncompleted
- Those left behind sell other properties at major discount
- Economy which is on recession, continues recession for multiple quarters.
1 + 2 + 3 + 4 = -($50,000+)
I don’t mean to make light of the builder, or their families that suffered the most in this situation, merely to paint the picture of multiple terrible unexpected outcomes clashing into one giant loss of net worth.
After all this, I could see my time as project manager slowly fading. There was one small spark of hope that transferred me for some time down to Utah (in the short time I was there I was T-boned while riding my Harley). A new development with high prospects. As a company, we followed sound investing principles, but over time my salary became less and less, a necessary expense.
New job opportunity
While working out of town I got a call from a friend with an opportunity. Long-story short, I quit my job moved back to Idaho, and began working for a company called Primerica, teaching personal finance, and the road to safe retirement. Dreaming again! It went well at first, but being the adventurous type I made some choices that slowed my progress and ultimately with no alternative income, a gap in my debt to personal financial freedom ratio occurred. I fully believe in what the company does, but if you want any advice about working there, I would say the majority of the time, to keep your day job while working there until you can ‘quit’ comfortably.
From working at Primerica I learned I’d rather be my own boss. The freedom it offers is incomparable. In the following years I started or helped start companies in Vacation Rentals, Music Education, and Bookkeeping. Of which only one is no longer in business. The financial rewards beings small for the effort spent. But the finance education, immeasurable. In fact if you have a moment visit the fundraiser for the Music Program that I was a co-founder of.
Moving to Italy
Going from what I felt at the time to be The Top, and then living what would be equal to a negative net income for a number of years, It was easy for me to desire a change. That change came when I met my wife. Together we started a beautiful family. Check out the presentation on our last vacation if you want to meet them!
Italy is a beautiful country, rich in culture. In comparison to the United States it lacks technology, but people are happy. Many are rich, however, many people have no choice but to live simply. Buildings of the past abandoned, to live in, many times, miniature studio apartments. The apartments found in towns that are clustered, surrounded by farms on each side. Each town with a church, a bar and an ice cream shop.
For me Learning Italian has been slow, considering that I am taking the ‘Immersion’ course. Because of this, most of our time together has been with one income. Which has caused us to be creative about our personal budgets, and savings goals. Which again brings me to planning our financial independence.
Out of all this the things I’ve learned!
- It’s Ok to Dream
- You can be happy through failure.
- Believe in Yourself.
- J. Money is right, Budgets truly are sexy!
As beautiful as the simple life can be. I’ve had enough. No, no… our marriage is fine. All I mean to say is:
In order for me, The DauvO, to become a millionaire, I pledge to do the following:
- 10% income to Charity
- Save 50% income
- Max my IRA
- Open and Max my SEP
- Self-Direct majority of Retirement savings to Investment Properties
- Buy and Hold 5 (auction) rental properties
- Sell Properties after 5 years for non-taxable gain.
- Create web/mobile app for passive income
If I follow my plan I will be a millionaire (cash in hand) in 7 years (Age 39)
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