Warning: Longer than usual post.
As all of you know I normally just write condensed posts that typically highlight a buy/sell or a dividend update of some sort. The reason for the concise posts is that I can easily bounce around from topic to topic without warning or organization. I also find that I tend to add a few profanities, non PC statements, and other potentially offensive content. Quite honestly, I really don't care and I will most likely ramble on. Consider this your warning.
I also am going to do my best to write these posts from the point of view I had at the time. We all change and evolve as we get older and I know that I certainly have. At the ripe old age of thirty I am sure that my attitude was more confident (cocky), somewhat more reckless, bold, and in many instances less tactful. As the years have passed by a lot of the rough edges have become smoother as the need to "prove myself" has diminished. Don't get me wrong, I still have a fierce competitive desire and at times a win at all costs/excuses are for losers attitude.
One of several Flashback posts....Marty (I mean MDP) fire up the Delorean
For some strange reason, I feel the need to reveal my life at several different points in time. While many years of my life seem like a blur, a few stand out from the rest. Since this blog mainly covers financial information and strategies, I will do my best to keep the car between the lines so to speak. As mentioned above there will be several detours and unexpected course changes along the way. The years that I will be focused on most likely will include 1987, 1991, 1994, 1997, 2000, 2001, 2002, 2004, 2005, 2007, 2009, and 2011. The posts will not be chronological and could take years to cover each year mentioned.
Why do this? Mostly it is for my own benefit, but I would also like to fill in some of the void from before 2014 when I started the blog. Seeing the result of my life's efforts without seeing the process that I went through mentally, financially, and emotionally really doesn't paint the whole picture. It's like turning on a light switch and seeing the bright lights without seeing the effort and time that it takes to create and distribute electricity. Watching me document purchases and dividend payments without seeing my early life jouney minimizes both the difficulties and triumphs that I have experienced along the way.
Sometimes as life is happening, we don't even understand the significance of the events we witness or are a part of until many weeks, months, or perhaps years after the fact. Often times I am amazed as I watch athletes give interviews immediately after accomplishing a great feat like a world title.Inevitably some reporter will ask the question "How do you feel right now after accomplishing (insert spectacular achievement)?" On many occassions the individuals are unable to describe their emotions very well in a two or three sentence sound bite and justifiably so. Just a few day ago Lebron James was asked a similar question after the Cavaliers win at Golden State and his answer was simply "It means everything."
How can you effectively summarize 10,000 hours in the weight room, practice field drills, team meetings, countless competitions, wins & losses? How to do you describe doing the same things over and over again often times with no visible results in sight? How to you describe working at 5:00 am and 11:00 pm while others are sleeping?
How can you describe wanting to quit many times, yet picking yourself up off the ground knowing soon enough you will knocked back to the ground yet again? How do you continue to attack hurdles while those around you are tapping out and going back to an easy life? How do you ignore your family when they say "Just do what we did for 45 years? or better yet take the safe secure route?"
What do successful people do that average people don't. They FORGE AHEAD regardless of their short term discomfort knowing a better life awaits them and they alone have the power to make it so.
The say FUCK SAFETY!!!
MDP, what about don't bite off more than you can chew???? Make the decision to CHOKE on GREATNESS rather than NIBBLE on MEDIOCRITY!!!
Despite all of these sacrifices you know the likelihood of reaching lofty goals is very small....that may be true, but regrets later in life suck far worse than failure.
How do you save $450 (10%) of a $4500 monthly paycheck when you have car loans exceeding $40,000, a mortgage exceeding $75,000, and credit cards exceeding $32,000?
How do you spend your life working for bill money??? Even worse, how do you spend your life year after year building other people's dreams while looking at your wife/kids/parents and knowing you are seemingly helpless to change your course?
Sometimes you just have to rediscover your backbone. It's there for a reason.
Self pity is for losers.
Those are a lot of question to ponder. When life feels unbearable and totally overwhelming, it can become easy to shrivel up in a ball and crawl into a hole. Many have done this including myself at various stages in my life. It feels good in the short term, but DOES NOT solve any problems and unfortunately very weak people tend to follow this pattern over and over throughout their lives.
This is a very brash and in-your-face statement. I know. There are obviously many reasons physically, emotionally, and pychologically that can cause people to feel self pity. When I feel self pity I don't believe that I am suffering from anything other than a TEMPORARY weakness in mindset. This is something that I and I alone have the power to correct.
While I am certainly not an avid reader of poetry, I am very familiar with this D H Lawrence poem. When I see my salespeople with their heads hanging low, seemingly dejected, I remind them of the words below. I remind myself as well.
I never saw a wild thing sorry for itself.
A small bird will drop frozen dead from a bough without ever having felt sorry for itself.
It is only two sentences, but it is very powerful. Self pity is destructive and must be avoided at all costs. We have all been through difficult circumstances, life struggles, losses, and catastrophic failures. Many times particularly difficult events force us to make a choice between two crossroads. You can tap out or continue fighting!
Wandering aimlessly in the wilderness
The year 2002 was a very interesting. We were in the early aftermath of 9/11, the war on terror was commencing, and the painful reminders of the Dot Com bubble were still fresh. In fact the S&P 500 was still working on a 50% correction from the 2000 highs. There was also a small company with 20,000 employees that was sending shockwaves all across Houston. Can anyone say Enron??
Why was this year (2002) important for me? For many different reasons. Hopefully I get to all of them. I was thirty years old and I was drowning in debt, working long hours at a job I supposedly hated. On top of that I felt that I was falling behind many of my peers both at work and from college. I know I know I know...Don't compare yourself to others. Focus on reaching my potential....blah blah blah. Again, I am writing about how I felt back in 2002. When you first graduate from high school or college you still feel equal in many ways to friends and classmates. As time goes by however, separation starts to take place between people. Sometimes we grow, sometimes we stagnate, and sometimes we fall behind the pack.
Around 6-8 years is more enough time for two people to have very different looking lives on a number of fronts including careers, health, finances, debts, spiritual changes, and even general attitudes about life and what is important. If you don't believe that, just look at the difference between someone who started dividend investing yesterday versus someone who started six years ago in 2009. Night and Day!
I started my career making about $50,000 a year in 1994. I was miles ahead of most of my friends and classmates. As time ticked by we drifted, interaction and communication diminished and eventually all my friends now were my coworkers. This tends to happen more often that we would like. Unfortunately my new friends prided themselves on making a lot of money, spending more money, and doing whatever it takes to advance regardless of collateral damage.
It was a new and exciting world to me, but I often regret some my earlier friendships that slowly faded as time went by. My world was much different that when I graduated college and I was getting a bit lost in my way. Was I having a mid-life crises at 30? Maybe.
Are you building a brick house MDP? It seems rather straw-like.......Where is the wolf anyway???
In the spring of 2002, I honestly believed having a house (albeit modest), two large V8 vehicles, numerous credit cards totaling the aforementioned $32,000 was the definition of success. Don't get me wrong, I did not like the way it felt and the pressure that accompanies debt, but all my coworkers and their families were in the same boat. My income unfortunately had grown only slightly because I became complacent with my career. There were a few high achievers around me, however I started associating with the average achievers.
I also started noticing how I was becoming older than a few of the managers around me and several of the newer associates were 7 or 8 years younger than me. Just two years earlier I was considered one of the "Young Guns" and now I was becoming the 30 year old guy that hasn't lived up to his potential. Ouch, that hurts! Don't become THAT GUY!
Talk about a panic attack!!! I felt that I had totally lost control.
So my friends and co-workers were (in my eyes) progressing and I was drifting with no rudder and no sail. Helplessness was starting to permeate within my psyche. I really hate when shit like this happens and I felt that I had no help or guidance to fall back on.
What on earth was I doing? I felt as if I made a wrong turn on the road of life and I couldn't turn things around. Frustration was another emotion that had a stranglehold on me. I kept asking myself "How the fuck did I get here and more importantly....How the fuck do I change course?" Hell I didn't even know where I wanted to go.
What I did know was that I was hemorrhaging cash and had nothing to show for it. Also I was tired of getting passed over for promotions even though I knew that I wasn't upping my game enough to warrant consideration for more responsibility.
It was time for a complete lifestyle change.
Here is a general summary of my early 2002 finances.
- House ---- $90000 Loan ---- $78000
- Auto 1 ---- $22000 Loan ---- $28000
- Auto 2 ---- $10000 Loan ---- $12000
- Cash ---- $0
- 401K ---- $30000
- Credit cards ---- $32000
- Student loans ---- $4000
- Wife braces ---- $3500
Total net worth ---- ($5500)
That it painful just typing it out. Wow! 30 years old and living on the edge. Thankfully I at least had the 401k as a safety net.
The most obvious problem was the credit card debt. In my opinion I was about to reach a critical mass of the negative variety. If this balance had reached $40k, I would probably have "unhitched the wagon" (just stopped paying....this did not happen and over time I paid every last fucking cent off) Luckily I had held the line from 2001 through 2002. My credit card balance wasn't dropping but at least it was stabilized around the $32k area.
To steal a line from The Water Boy, credit cards are the DEVIL!! I was essentially paying $1000 each month, but due to interest charges I was only knocking $500 a month off the balance. If I charged $300 the next month (out of necessity usually) then I was only $200 to the good. Basic math told me that I was going to spend decades just to pay off the credit cards.
To make matter worse, my wife wasn't totally on board with the extreme measures necessary to get our financial house in order. I'm sure many people are in the same boat. You know the boat I am talking about. The one where I am not necessarily asking my wife to put her oar in the water and help row....but at least stop dropping the anchor off the back of the boat while I'm rowing. :-)
It was time to take extreme measures in another area of my life.
A brutal July run and a trash bag full of khakis
The 90s were a badass decade. One of the biggest changes I noticed around the work place was the introduction of business casual attire. People traded their suits and ties for Dockers and company polo shirts. This was great. It was strange in that sometimes customers, vendors, employees, and even the top bosses at times were indistinguishable. I didn't have to use the dry cleaners although I still had my pants pressed. In Texas casual attire is a big hit during the summer months. It seems like many companies in many different industries were all jumping on board with this change in acceptable business attire.
If you ever want to visit Houston, don't come in July, August, or September. The only thing worse than the heat is the humidity It was a typical July day in Houston when I decided to leave work at 2:00 to go for a long run. I went home put on my running shorts and shoes and headed for the high school track. The last time I ran further than a few hundred feet was in 1996 on Thanksgiving and it was unseasonably cool (around 40 degrees). That July day I went to the track was seasonably hot around 100 degrees (the heat index was around 105-110). No matter. I felt the need to run and clear my mind.
After one lap I was dying. The great thing about running is your mind really clears out the noise and you can really think and focus on important things. That day I was trying to figure out how to seriously change my life's course. Working just to give the money to banks each month was not an acceptable option for me.
I needed to form a plan of some sort even if it was rudimentary, I needed to take action immediately.
Here are some of the ideas that I came up with during the next 30 minutes.
- Go to work everyday and take no days off (except Sundays) until you make $6000 for the month. If you can make it by the the 15th of the month great. If is the 31st and it's 8:00 pm and you have only made $5900, then keep hustling. This is scorched earth old school motivation than has rewards and punishment built into it.
- Never borrow money for a car again once I can get out of the two I am "upside down" in.
- Advance your career!!!
- Throw away every pair of Dockers you own. From now on it's black dress pants, starched white shirts, and solid color neckties for as long as you are in the work force.
After 30 minutes and 3 miles I was dehydrated, exhausted, extremely focused, recommitted, and had a fierce attitude that would make a hyena proud.
I went back home put all my khakis in a trash bag and proceeded to dump them at the clothing donation bin. To this day I still wear a shirt and tie with black pants each and every day I go to work. If you are going to be in the business world, don't look and dress like you should work in the produce department at a grocery store. That tie (noose) around my neck was going to be my "scarlet letter" a constant reminder that I am going to get myself out of this hole I have put myself in.
I must have stuck out like a turd in a punch bowl when I came back to work that afternoon. Hardly anyone wore dress shirts and ties and certainly not in July. No matter. I had a mission and was determined to succeed. There were several months when I worked over 80 hours a week over and over again. Hell there still are. As the year continued the results soon followed.
To this day I still marvel at the rain as it hits my office window at night. There is nothing like working when it is pouring down rain and you know the easiest (most comfortable) thing to do is go home and start over tomorrow. That is what most of our competitors do.....There is no tomorrow only today! This is the mantra of a hustler!
By the end of 2002, I reached a career high income and made over $9,000 in the month of December alone.
By no means was I out of the woods, but I was accelerating hard and closing the gap on my perceived life and my coworkers/friends/rivals.
Two years later in 2004 I still had a mountain of credit card debt, but my cars were free and clear, I was advancing into management, and forming the foundation for a 2004-2014 run that would see my net worth grow from $0 to $700,000.
Sorry about the rambling, but I hope at least one person can benefit from this post. Several choices I made in this episode were bad, some good, and in some cases in order to turn my life around I had to make very painful choices.