My Advice for the Newly Successful - Save Save Save

[jstover77]

If there is one piece of advice I could give my old self, it would be to save, save, save. In the 11 years I've been doing this, I've seen quite a few $100K+ months, as well as tons of mid 5 figure months, but I never saved for the lean times, and let me tell you, they will come for most who are in this business. I was doing stupid shit like buying Range Rover Sports, and M3's cash, then traveling all over the place, living it up to the point where I spent literally $200K in a 2 year span traveling (seeing my accountants face was always priceless when I tried to write it all off). I would wake up in the morning and tell the wife...get up, we're heading to Vegas, or Mexico, or Jamaica..with zero fucks given. In retrospect, if I even cut down on half of what I was spending and put that energy into my work, I'd be a multi-millionaire.

I still do well now, but I'm learning with my old age not to spend like a retard, because the slim times will come if you aren't careful.

 

[animalstyle]

To chime in with @jstover77 above - save save save.

I'll never forget an uber ride to the airport where the conversation with the driver had him describing his 6-figure paychecks, ex-wife's spending habits, and simply over extending. I asked him what the one lesson he learned was and it was simply to live within your means and be extremely conservative when you begin to earn more and want to increase your lifestyle and luxuries.

I feel fortunate to have self control when it comes to spending. Saving comes naturally and I can tell you from experience that it makes all the difference to have a financial backing when things dip. Everything comes in waves, nothing is permanent.

Also - debt is poison. It works against you every minute you carry it. It doesn't care if you're beaten and battered - it will kick you when you're down. FIGHT to get rid of it. Paying an extra $100 of the principle of your home won't give you the dopamine release like blowing $100 on something you don't need, but in the long run this mindset creates amazing results.

 

[eliquid]

Since we've talked about save, save, save and debt already, I just want to leave this thought out there because some people take debt lightly.

I don't care what kind of debt it is ( because I've had all and every kind ), debt makes you a slave twice.


First, it makes you a slave to whomever you are in debt with.

Secondly, it makes you a slave to whomever and whatever gives you/earns you your money to pay the holder of your debt.


Every example works out this way.

Example one:

You take out a car loan for $30k or a mortgage for $300k. Maybe it's a second mortgage or just braces at $5k for one of your kids. It could just be credit card debt or school loans.

You're a slave to the bank or whomever financed you. You won't be bankrupting out of your obligation. You're a slave for more than you borrowed more likely, adding more time on to your sentence so to speak. Missed a payment or rates went up? More time added.

You're now more of a slave to your employer who gives you money each month to pay your new bank loan ( and other bills ). Or you're self-employed and now can't escape those clients ( bad or good ) and feel compelled to sit at your desktop for longer hours to make sure the revenue comes in to pay that new loan ( and other bills ). In either situation you can't just up and leave for 30 days to enjoy a month on the beach or to start writing the next great screenplay. Well, unless you're working the whole time on the beach that is...

Maybe you can pull it off to where you can, but most can't. In some way that new debt will restrict something in your life.

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Example two:

You have a bricks and mortar business that is doing well, around $2M a year in revenues. You get an opportunity presented to you that you can't pass up, but your cash flow right now doesn't allow you to jump in, so you dip into your line of credit at $300k.

Cash flow is still tight, but now you have $300k in debt and a new monthly payment you need to make. You are already working hard to run this business and pay all the salaries and overhead you had before the loan. Now you need to work harder to ensure you can pay the loan too.

Maybe that means longer hours, new employees ( overhead ) to handle more tasks like sales, maybe it means you have to develop and manage a new strategy in the coming months, maybe the new opportunity means a pivot in your business that has to be cared for like a new baby.

No matter what, you are more married to that business now to ensure you can meet the demand of that new payment.

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My stepson told me the other day his real father said to him, "You need loan's to have the nice things in life".

Whoa, what a crock of shit.

I told my stepson if he took out a loan for $4k to buy a truck ( he is 17 years old ), he now has to pay that loan. He understood.

Then I told him, he had to keep a job for as long as needed to pay off that loan. He somewhat understood this.

I told him in order to pay the loan, he needed an income stream. Either a business he owned or working for someone else. More than likely working at the local grocery store bagging groceries or putting food on the shelves at midnight.

At those pay rates, it might be a full 12 months before he pays off the loan, which equals possibly giving up his weekends and nights playing video games, going out with friends, and possibly hurting his grades for college. It for sure means no long and easy summer vacations now too. He for sure wouldn't be able to go with us on trips we take as a family now.

Basically, his next 12 months are somewhat taken away from him when it comes to him deciding what he wants to do.

Now he got it.

You want to know what's nice? Not being a slave. Especially not being a slave 2x.

.

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[Joe]

I just want to leave this thought out there because some people take debt lightly.

Especially Americans. Mind boggling casual to attitude towards debt. I've seen threads online where the guy says "oh yeah, just $450K in student loan debt; any ideas on how to reduce it?". My response is generally "yeah, don't be a fucking masochist idiot in the first place". Doesn't really get a warm response though