There’s something about Todd …

Poor Todd, where I don’t fear to tread, Todd (now) refuses to go:

Everybody hates Todd Henderson.

In case you haven’t heard, he’s the University of Chicago law professor who unwisely blogged about his financial woes in a post headlined “We Are the Super Rich.”

Mr. Henderson and his wife, an oncologist, make more than $250,000 a year, and apparently they’re struggling to get by. If President Barack Obama gets his wicked way, and tax rates rise for those earning more than $250,000 a year, Mr. Henderson says it will mean real sacrifice in his family.

It’s too easy to pelt Mr. Henderson with rotten eggs, as so many have now done. (He yanked the post, but way too late–and on the Internet, one’s blunders never die.)

Never, ever, ever again blog about how hard it is to live on $300,000 or $350,000 a year at a time when one middle-aged man in four can’t find a full-time job, and one in five can’t find any job at all.

Yeah, I understand that Mr Todd was whinging to people much worse off than him.

But, I’m not afraid to speak my mind – when it comes to money – after all, ever heard of “teach a man to fish …”?

Early retirement in the extreme …

Jacob and I are really the bookends for early retirement: he says that he has retired on $6k per year (a budget of $500 p.m.), and I am retired on $250k per year (around $20k p.m.).

I know I’m happy, and I’m pretty sure that Jacob is happy, too.

Now, there are some non apples-for-apples comparisons, here:

– Jacob has a spouse who works; my spouse does not work but has thought about working

[AJC: one of the problems with being ‘rich’ is that it’s embarrassing to take a part-time admin. job that pays $13k per year, driving there in 10 years salary worth of car and driving home to 461 years worth of house! I told her that it might be better if she just donated her time to the charity that wanted to hire her]

– Jacob has no children; I have two

– Jacob’s net worth is higher than the typical American’s … so is mine!

Wealth is defined as being able to live comfortably on the passive proceeds of your investments; clearly, both Jacob and I can do that according to our individual assessments of ‘comfort’, so we are both wealthy.

Moreover, our wealth and retirement strategies are not for the masses … but, the lessons learned can be!

However – and, this is a big ‘however’ – I simply don’t believe that ‘extreme’ early retirement strategies really work for any, but a small minority of families. There will simply be too much financial pressure – some generated directly, and some indirectly (yes, peer pressure is real) from the children:

– Food: you may be happy eating home-cooked meals. Your kids will want sushi and sodas with their friends.

– Clothing: you may be happy with last-season Gap and TJ Maxx. Your kids will want this season Abercrombie and Ed Hardy.

– Education: you may be happy on $500 p.m., but how much college will that buy? Your kids will resent having to buy their own, so that you can do nothing.

– Health: your kids will be at the doctor every day … for everything from a runny nose to broken bones to removal of superfluous bits (foreskins, adenoids, tonsils, and appendix … and, that’s just in healthy children!). They won’t ask to go … every time they so much as sneeze, you’ll be dragging them there in a panic!

– Cars/phones/bling/going out/travel: see ‘college’, above!

Of course, you could bring your children up like BF:

He too, is a minimalist, but his parents (well, his father) trained him to be like that from young.

When they were kids, they weren’t poor in the sense that they were living paycheque to paycheque. They had money, they had savings, but they never spent it.

BF joked that to his parents, Money = No Object(s)!

No Television: “It’s all crap on there. Sorry kids. No TV. It’s not reality, and if you want to watch TV, you go over to your cousin’s place. But it’s crap. The radio is better. And free.”

Then from not having a TV they avoided buying:

  • TV accessories
  • A couch to sit in to watch TV
  • A VCR or DVR to record things on TV or to watch videos on the TV
  • …anything the commercials were selling

No Telephone: “Why do we need a telephone for? If you want to talk to somebody, just go over and see them.”

Then from not having a telephone:

  • No phone bills
  • No actual phone to purchase
  • No long distance calls

So what did they spend their money on? Food. And utilities to cook food. That’s it.

No extra clothes, toys, or anything I ever took for granted as a kid. Not even soccer club fees or lessons, because that would mean that you’d have to buy a soccer ball and a uniform.

… you could – and, it might even be character building for both you and your children – but, I wouldn’t count on your future familial happiness 😉

Avoid wiggly-line investments!

UPDATE: We have a winner in my $700 in 7 Days Giveaway … yep, ‘barbaramontgom’ (with 6 points) was chosen by random drawing (see below) and wins the entire $700 Cash!!!!!! Barbara just needs to send me an e-mail ajc [at] 7million7years [dot] com to claim her $700 cash prize (less any PayPal fees)!

Bet you wished that you had entered 😉

Special thanks to Steve and Trisha who tied at the top of the leader board … if you send me an e-mail with your name/mailing address I will send each of you a $60 Apple Gift Card! Thanks to all of the others who entered and promoted the contest like crazy!

LAST CHANCE to enter my free contest: CONTEST OVER: in just ONE more today, I am giving away $700 cash to one lucky reader (drawn at random) as part of my $700 in 7 Days No Strings Attached promotion. It’s free to enter simply by clicking here.

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CNNMoney fields a question from a reader who’s scared that her money will run out before she does:

Question: I recently had to take early retirement at age 57 because of back problems. I’m now looking for a safe place to invest my retirement money where I’ll have no risk losing it. Any suggestions? — Donald H., Morris, Alabama

Yes, I have a suggestion: don’t post your questions to a financial ‘expert’ who still works for a living!

If you do, you’ll get answers like:

Answer: If the threat of losing principal were the only financial risk you had to protect yourself against in retirement, then finding a safe haven for your money would be pretty simple. You could plow your entire nest egg into Treasury bills or spread it among FDIC-insured savings accounts and CDs (taking care to stay within the FDIC coverage limits).

But while doing this would insure that you would never lose a cent of your money, it would also insure that your retirement stash earned a pretty measly return.

Good, so far … so, no cash. Got it!

What should she do instead (?):

If you want to have a decent shot at your retirement savings lasting as long as you do, you also want to invest in a way that has at least some potential for long-term growth.

[Keep some in cash and the] rest of your savings you want to keep in a diversified portfolio of stock and bond funds. Again, there’s no single correct mix. Typically, though, someone just entering retirement might have 50% or so of his or her portfolio in stocks and the rest in bonds.

Zowie!

Question: If you are aiming to retire, why do you want long-term growth?!

Answer: Because, you expect to lose some significant proportion of your capital to:

– Spending too much,

– Inflation,

– Market downturns.

In other words, the expert recommends to invest in a ‘wiggly line’ investment, hoping that the upswings outweigh all the downswings + spending after inflation is taken into account.

How well has that been working out for the past, oh, 20 years?

So, can you think of an investment that tends to grow with inflation, and provides income that also tends to grow with inflation?

Well those treasury-protected bonds certainly have principal that keeps up with inflation, but the returns are so low that income will become a real problem.

But, what about real-estate?

It’s where ‘the rich’ have kept the bulk of their retirement savings since time immemorial … I wonder why? 😉

Happiness = $75,000 a year!

It’s not too late to enter my free contest: in just 3 more days, I am giving away $700 cash to one lucky reader (drawn at random) as part of my $700 in 7 Days No Strings Attached promotion. It’s free to enter simply by clicking here.

Remember, the more entries you earn the more chance you have to win! You can check out the current leaders here!

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Finally, there is a study that equates money to happiness!

The Wall Street Journal reports a study by “the Princeton economist Angus Deaton and famed psychologist Daniel Kahneman”, which states:

As people earn more money, their day-to-day happiness rises. Until you hit $75,000. After that, it is just more stuff, with no gain in happiness.

Let’s assume you want to retire in 20 years on the equivalent of $75k p.a. – after adjusting for inflation (roughly double your required income every 20 years) and applying the Rule of 20 (equates to a 5% p.a. drawdown on your money), this means:

Your Optimal Happiness Number = $3,000,000

None of my readers are chasing less – otherwise, why would you be reading a blog called How To Make $7 Million In 7 Years (?) – but, the point of the study has been taken by the press and the pf blogging community to mean that it’s pointless to chase more than $3 million … seemingly making my uniquely positioned blog redundant by half 🙁

Well, it’s quite interesting because there’s a second part to the study that the media and most other bloggers are conveniently ignoring:

That doesn’t mean wealthy and ultrawealthy are equally happy. More money does boost people’s life assessment, all the way up the income ladder. People who earned $160,000 a year, for instance, reported more overall satisfaction than people earning $120,000, and so on.

“Giving people more income beyond 75K is not going to do much for their daily mood … but it is going to make them feel they have a better life,” Mr. Deaton told the Associated Press.

I don’t know about you, but I like to be happy ($75k p.a. happy) and have a better life ($250k p.a. better life)!

How about you?

The difference between a business and a job …

In just 6 more days, I am giving away $700 cash to one lucky reader (drawn at random) as part of my $700 in 7 Days No Strings Attached promotion. It’s free to enter simply by clicking here.

Optional: Once you enter, you will be shown fun ways to spread the word and win more free entries. Remember, the more entries you earn the more chance you have to win!

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You already know that I won the business lottery!

[Let’s face it, some guys have all the luck: It took me just 7 years to build a $7 million real-estate, business, and investment portfolio from worse than scratch (I was $30k in debt when I started). Then, I managed to sell my businesses (in the USA, Australia and New Zealand) just before the market crashed. On the other hand, I’m only 5 ft 4 inches tall and balding … so, things have a way of balancing themselves out.]

So, now I get lots of people who are clearly excited when they tell me that they are “also in business” … except that they aren’t!

Mostly, they’re just working 60 to 80 hours a week – on little to no pay – for the toughest boss of all: themselves.

Worse … their spouses!

Let me give you a couple of real-life examples that should help to explain:

Peter Hastings, who already owns the antiques store right next door, opens a sandwich shop at 2264 North Lincoln Avenue. A quaint sandwich shop that he decorates with many of the items from his antique store. The shop thrives and provides Peter with a nice income for the next 20 years, when he sells it. Peter, with his two little businesses, has carved out a nice niche for himself. He was careful with his money, both before and after ‘retirement’, so – after 20+ years of hard but fulfilling work – he can finally afford to take it a little easier.

Bryant Keil buys a sandwich shop; it’s uniquely (and, quaintly) decorated, it’s in a nice location, had one owner who is selling in order to wind down a little after ‘working’ the business for 20 years. Bryant buys the little shop and develops a franchise model around it. Within 10 years, Bryant has “over 200 stores, in Illinois, Indiana, Michigan, Minnesota, Ohio, Texas, Maryland, Virginia, Pennsylvania, New Jersey, Washington, D.C., Kentucky, and Wisconsin.” Bryant is now a billionaire.

So, if you own a little sandwich shop – or, the online equivalent (here’s how you spell it: B-L-O-G) – don’t bother me with the details … it’s nice that you’re keeping yourself busy, but I’ll get bored listening to your story.

But, if you’re working on the next Potbelly Sandwich Works – or, the online equivalent (F-A-C-E-B-O-O-K) – drop me a line and don’t spare the gory details … I’m listening to every single word you say!

Win $700 In 7 Days!

UPDATE: We have a winner in my $700 in 7 Days Giveaway … yep, ‘barbaramontgom’ (with 6 points) was chosen by random drawing (see below) and wins the entire $700 Cash!!!!!! Barbara just needs to send me an e-mail ajc [at] 7million7years [dot] com to claim her $700 cash prize (less any PayPal fees)!

Bet you wished that you had entered 😉

Special thanks to Steve and Trisha who tied at the top of the leader board … if you send me an e-mail with your name/mailing address I will send each of you a $60 Apple Gift Card! Thanks to all of the others who entered and promoted the contest like crazy!

LAST CHANCE to enter my free contest: CONTEST OVER: in just ONE more today, I am giving away $700 cash to one lucky reader (drawn at random) as part of my $700 in 7 Days No Strings Attached promotion. It’s free to enter simply by clicking here.

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I am giving away $700 cash to one lucky reader. There are NO CATCHES other than I will only pay by transfer from my PayPal account to yours.

The contest is entirely free to enter … NO gotchas!

So, why am I simply throwing away $700 cash?

Well, I like the number ‘7’ (this site is called $7 million 7 years) … but, it’s really to test an idea that I have for my new startup venture! I do a lot of “off the wall” stuff on this site, and I like to share what I’m up to with my readers.

This time, I want to see how many people join, what the referral sources are, and how active various readers are in promoting this contest, and so on.

My experiment is your gain … all you need to do is ENTER for your chance to win $700 cash in just 7 days, when I announce the winner exactly one week from today! Who knows, it might even be you!

Optional: For even more chances to win, get your links (below) and promote the contest to earn more points (each point = 1 entry). You can promote via Twitter, Facebook, Youtube, and you are even rewarded with more points (‘points’ = more chances to win) for leaving comments here.

Good Luck!

[contest_links contest=”win_700_in_7_days_”]

Rules: there are none, except that I will only pay by transfer from my US PayPal account to yours (it’s up to YOU to make sure that you can accept payments via PayPal from the USA).

This is the world’s easiest contest. Simply enter for your chance to win.

Optional: Spread the word for even more chances to win. And, help a new experiment in social marketing while you’re at it!

A fund manager’s view …

This is a little different to all of those “this is what a millionaire thinks” posts, because Evan is in a support role (“my role is more brain storming and putting together documents and calculations….then I prepare materials for the planners’ second meeting and beyond”) at a financial planning office that specializes in sucking the blood out of – I mean assisting – high net-worth clients:

My role is more brain storming and putting together documents and calculations. So basically I see almost every balance sheet that may have significant net worth which goes through my office

Since I’m a sample of one, when it comes to high net-worth clients, it might be interesting to see what Evan sees:

The House is almost always Paid off

Prepaying your mortgage is always a hot topic on Personal Finance Blogs.  Everyone once in a while one of the big players in the field will put a post and it will garner tons of comments.  The comments are usually heated and go both ways about how the move is stupid and then invariably someone will say, its a great move.  Regardless of how you feel, most of the high net worth clients’ balance sheet that I see will have either a paid off house, or one with a very low debt to equity ratio.

They Almost Always Own a Business

Almost every high net worth client’s balance sheet has a business on it.  The types of businesses range from the mundane, lawyer who owns their practice, to beyond what I could have imagined as a viable business.

They Almost Always have Investment/Financial Advisors

Almost every single high net worth client/prospect is not hands on when it comes to their own investments.  Some are more active than others when it comes to asset allocation, but for the most part unless they are in the money business (fund managers, hedge fund execs, etc.) they just don’t deal with it.

Since Evan is coming from a position of observation of his sample size of many, I will observe from my position of a sample size of one:

– I found it valuable to have a business; indeed, it’s the ultimate driver of my financial success; even before selling the business I could use the spare cashflows (after attending to the business’ own growth needs) to fund a substantial real-estate and investment portfolio.

– I own a house, and almost always have … now that I am wealthy, I carry no debt on these houses, but started reducing my debt almost in proportion to the increase in my wealth. It’s not a strategy, just a happenstance. But, I will not hesitate to use some (perhaps, up to 50%) of that equity, if required to fund an investment.

– I certainly use an investment advisor – in fact, multiple; but (here is where my experience diverges from Evan’s observations) Evan says: “Almost every single high net worth client/prospect is not hands on when it comes to their own investments.”, yet the opposite is true for me. Could this be observation bias for either Evan (he does work for a financial planning/advisory firm, right?) and/or for me?

I would never hand the keys over to my Future Fortune [AJC: How do you make $1,000,000? Give an ‘investment advisor’ $10 million … and, wait!] to somebody who has not already made their’s … if so, why do they need me?

Thanks for sharing, Evan!

Announcing the 5 x $100 Apple Gift Card winners!

Speaking of contests: I have launched (in ‘stealth mode’) a new site that marries contests and social marketing. I am now looking for a team to help with the build/launch. If you love contests and if you have experience with social/viral marketing or development, then contact me immediately at ajc [at] 7million7years [dot] com. This is your opportunity to hit the big-time with a small salary (full or part-time) + a chunk of equity + your name in lights!

_________________________________________

Thanks to everybody who entered the contest inspired by Trent Hamm, from a Simple Dollar, who is giving away a book called Everything You Ever Really Needed to Know About Personal Finance On Just One Page.

If you want to find out more about the contest, click here: http://7million7years.com/2010/10/28/just-one-page/

It’s too hard to pick a “best” entry, but, I did like Mike Hunt’s stool analogy (“needs all three legs to stand up”):

Our other winners (in no particular order) are:

– Roger, the Amateur Financier certainly deserves a card for his entry: http://www.theamateurfinancier.com/blog/the-amateur-financier-one-page-financial-guide/

– Jaime @ Eventual Millionaire just got $100 closer with her gift card: http://www.eventualmillionaire.com/blog/2010/11/the-one-page-financial-system/

– Daniel is Sweating the Big stuff, but (thankfully) still had time for this: http://sweatingthebigstuff.com/put-your-system-onto-just-one-page/

… and, I’m saving the final prize for a cartoon character. Seriously!

You can see Eugene Krabs’ entry as the first comment to this Free Money Finance blog post: http://www.freemoneyfinance.com/2010/10/how-to-get-rich-quick.html

He described a formula for wealth (it’s not THE formula for wealth; this is: the key to untold wealth):

I’ve boiled what I’ve read myself down to the following equation:

Wealth = Capital + Risk + Time

(To be clear, capital is the money you have right now to make more money with.)

Technically, any one of those factors can do it for you. For example, if you have a massive amount of capital, or if you take massive amounts of risk and beat the odds, or if you have a lot of time to build your wealth, then you can still become wealthy at the expense of the other two factors.

However, there are downsides to all of these individual factors.

The best thing to do is to push on all three of these fronts at the same time, I believe you will then maximize your chances of becoming wealthy.

That’s it. As we have all have probably known for quite some time that there is no real secret to being wealthy. It’s just not easy. Bottom line, we need start now, stay fanatically focused, and be mindful of the risks involved.

The winners need to contact me via e-mail [ajc AT 7million7years DOT com] for details on how to claim their prizes; if any prize isn’t claimed I’ll donate the $100 to charity and post back here.

Thanks to everybody who entered, commented, and/or spread the word!

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Come and visit us at this week’s Carnival of Personal Finance: http://www.simplyforties.com/2010/11/carnival-of-personal-finance-283.html

The key to untold wealth!

If you’ve been following this blog for a while, you may have the sneaking suspicion that I’m also a bit of a ‘mad scientist’.

For example, I told you that, like Albert Einstein, I’ve been working on a ‘unified theory’ [AJC: I’m rather proud of this post, so go ahead and pull it out of the 7m7y archives by clicking on this link: The Big Papa lives in the 11th Dimension!].

Unlike Albert Einstein, though, I am (a little more) kempt; (very slightly) less absent-minded;  (a lot) less than genius (even a little more ‘less’ each year); and, have no Germanic accent, although my parents spoke the language fluently (but, never allowed me to learn it … it was their ‘secret language’).

On the positive side, unlike Albert Einstein who reportedly went to his grave with his secret, I have found the Unified Theory of Finance!

After literally years of searching – and, this blog has been a way for me to publicly articulate my thoughts, and get the feedback that I needed along the way [AJC: so, I will need to remember to thank all of my readers – that’s you! – at my Nobel Prize for Finance acceptance speech] – I finally made this Great Discovery (?!) on the weekend.

In fact, the breakthrough came in two parts:

The Search

Because I am (still) enamored with Sponge Bob, I was attracted to “Eugene Krabs“, who left his version of the secret formula for wealth in a seemingly innocuous comment on Free Money Finance’s blog:

I’ve boiled what I’ve read myself down to the following equation:

Wealth = Capital + Risk + Time

(To be clear, capital is the money you have right now to make more money with.)

Technically, any one of those factors can do it for you. For example, if you have a massive amount of capital, or if you take massive amounts of risk and beat the odds, or if you have a lot of time to build your wealth, then you can still become wealthy at the expense of the other two factors.

However, there are downsides to all of these individual factors.

Sensational stuff!

Unfortunately, I can’t thank “Mr Krabs” because he didn’t include any links with his moniker. On the other hand, you may quickly spot a few issues:

1. Clearly Wealth isn’t an additive of capital, risk, and time, it’s really a complex function. But, that can be solved by rewriting the equation as W = C * R * T or, even better yet, as:

W = Fn {C,R,T} i.e. Wealth is a (perhaps, complex) function of Capital, Risk, and Time.

But, understanding the math is not the point – I’m sure that Mr Krabs’ formula is meant as conceptual, not mathematically rigorous – it’s understanding that you need to balance Capital, Risk, and Time, if you want to become wealthy, that’s important … at least, according to a fictional cartoon character who saves every penny that he can get his claws on 😉

2. The more important point is that this version of the formula forgets Return; and, if we substitute Return (e.g. the 9% or 0.09 return that you supposedly get if you stick your money in the stock market for long enough), you actually have something very similar to the basic formula for compounding (which, at least according to Einstein, is the ‘most powerful force in the universe’:

3. Even if I somehow modified Mr Krabs’ simple version (and/or the more complex – but, correct – mathematical representation of compounding) to include both Risk and Return (a.k.a. Reward), the formula IMHO still wouldn’t explain why Warren Buffett is sensationally rich investing in exactly the same stocks that we invest in, yet we manage to lose money (in the short term, in absolute value, and even in the long term, certainly after inflation is taken into account)!?!

Until I can explain that, there is no formula 🙁

The Breakthrough

Still my gut told me that Mr Krabs [AJC: I love using his pen name … I’ll see how many more times I can fit it into this really very serious post!] was on the right track, because his representation did provide the missing simplification that I needed.

But, I kept hitting brick wall after brick wall …

… until last Sunday.

Last Sunday, I took my son and a few friends to play in their weekly teenage tennis competition [AJC: we all got free ‘slurpies’ from a 7-11 Convenience store on the way back home from tennis because it was 7-11 Day: November 7, 2010. Go figure!].

Instead of watching the game, I sat in the car with all my notes – pages and pages of complex math, simple math, all trying to fit Risk, Return, Capital, Time, and so on into a simple, conceptual ‘formula’ … all the while, trying to use it to explain the difference between you, me, and Warren Buffett.

As I said, until I could do that, I had nothing!

It was driving me crazy! So, I did the only sensible thing: I laid back the car seat and dozed off … but, when I woke up half an hour later, I had it:


“Is that all?”, you say [yawn]

Hell, yes!

Really understand this, and you have the key to untold wealth … in any field of endeavor.

I’ll explain the X-Factor (it can be explained!) in an upcoming post …

AJC.

PS Remember: this ‘formula’ is conceptual and is more correctly (but, still grossly) simplified as:

W = Fn {C,X,T} i.e. Wealth is a (definitely, very) complex function of Capital, The ‘X-Factor’, and Time.

The False War On Debt …

There’s a war raging out there: it’s being fought by authors and bloggers everywhere.

But, is it the right war? Is it a just war? Or, are we just throwing ourselves, by the millions, into a hail of fire: exploding spending, rampant inflation, the death of social security?

Sure, as we sit in the relative safety of our trenches (at least, that’s what we tell ourselves, until a random mortar shell of job loss or unexpected expenses chooses to lob our way) this is not OUR future … it’s somebody else’s, or it’s too far away, or it just can’t happen …

The sad truth is that legions have jumped the wall before us and have been brutally cut down for lack of an adequate nest-egg; it’s sad to see them go over the dreaded wall of retirement (be it their time, or forced on them early) without an adequate safety net … when they do, it’s as though their grim fate had already been sealed.

Broke – or ‘just’ financially crippled – and unable (for financial reasons) to live life as they had hoped, they are a sad, sad lot.

You see, the war that they fought wasn’t – isn’t – a just war. It’s not even a war … well, it shouldn’t even be more than a skirmish.

It’s the War Against Debt!

When it comes to that war, I’m strictly a pacifist; isn’t it better to simply avoid BAD debt?

Of course, that doesn’t mean that we can’t … shouldn’t … defend ourselves.

Far from it: if we find that BAD debt has snuck through our defences, let’s keep an eye on it. And, if we find that it’s also EXPENSIVE debt, then let’s whip out the Big Guns and wipe it out. Quickly, surgically …

… but, let’s not commit Debt Genocide.

You see, unlike the well-intentioned, but largely Debt-McArthyist “ALL Debt Is Bad, So Let’s Wipe It Out” rabble out there, let’s first ask The Missing Question:

What will you do after your debt is paid off?

“Well, start investing of course!”

But, does that REALLY happen? Who better to ask than Money Reasons:

This past February 2010, I became totally debt free, but now what!

I thought that there would be a period where I would break even for a while, and then start to plow about $1,000 extra each month into investments!  So now that it’s seven months later and how much extra did I save or invest?  Not a single cent!

Hang on, the whole purpose of suiting up for battle – for going to war against debt – was so that you could start investing, right? What’s up with that, Money Reasons:

Well it’s been a matter of bad luck with equipment breaking down and needing replaced and spending too much for our past vacation to Hilton Head Island!

But it’s also been a subtle form of LifeStyle Inflation!  Thinking back now, I realize that when wants would arise, I would just go ahead and buy it.  Yeah, I thought about it a bit, but I knew that I had the cash.  Then when your car and lawn mower broke down, I had the cash too…

Money Reasons should have started investing well before all of his debt was paid off … he should have started investing as soon as his expensive debt was paid off and left his cheap debt on a regimen of minimum payments.

The problem with this war is that it’s an unjust war; as TraineeInvestor said: “Debt is a tool. Paying it off is simply choosing not to use the tool.”

Yes, becoming debt free is simply a tactic

If you have to go and fight a war, don’t fight a war against debt …

… go and fight a war for investment 😉