An interview with AJC …

I’ve created a new Facebook Group called 7million7years

Feel free to join! It’s where all of us can ask and answer questions about personal finance … ask anything you like, and see who responds; sometimes, I’ll weigh in, as well!


Here’s an interview that I did a while back for the nice folks at Spectrem Group (a research company specializing in the ultra high net worth market). It was quite ironic that they asked me to do this interview, because I called their book the most dangerous idea in retirement planning that I have ever read!

Still, for new readers, this interview is a great overview of who I am and why I write this blog (as well as what you can expect, if you choose to stick with me):


What is your financial goal? Adrian J. Cartwood (a nom de plume) had one: $5 million in five years. He didn’t quite make it. But he did make $7 million in seven years and he writes about it in his blog of the same name. His is the sort of self-directed, out-of-debt story that makes for lively posts. Cartwood lives in Australia and he communicated via email with Millionaire Corner about his hard-earned success. What inspired you to start your blog?

Adrian J. Cartwood: I inherited a failing family business, and I was $30K in debt. During this time, in 1998, I found what I like to call my “Life’s Purpose,” or “Life after Work”. Others call this retirement, but who wants to wait until they’re 65 to start living their passion? So, I calculated my “number,” that is how much I would need in the bank to stop working in five years instead of 20 or 40. That number was a very scary $5 million.


Five million dollars in five years seems like an impossible target, especially when you’re starting $30k behind the 8-ball, so I started reading every single personal finance book that I could get my hands on. What I quickly realized is that they are mostly written by people who became rich because they wrote a book about how to get rich. Needless to say they were mostly full of rubbish. So, I found another one of my passions! It was, and remains, to be the first true multi-millionaire to write about personal finance, hence the blog.


MC: When did you launch your blog? How many visitors does it get?

AC: Three years ago. I don’t do any advertising, marketing, or promotion for my blog at all. I’m not even sure how you found me! Yet, in the time that I’ve been writing it, I’ve somehow built a dedicated audience in the thousands who seem to read it every day. I hope to never disappoint them.


MC: For whom is your blog intended?

AC: This is an excellent question because I often get comments from new readers who say “Well, my 401k is company matched, so it’s a great investment.” Sure it is, but it won’t make them rich. So my blog is specifically targeted to people like me who want to stop full-time work to pursue their passion, be it writing a novel, traveling, researching great wines, volunteering, whatever. The kicker is, when they calculate their own “number”- how much they will need in passive investments to support them, it’s inevitably something like $2 million in 6 years. If you run their starting position (say $100,000) through any simple online compound growth rate calculator, as I encourage my readers to do, they quickly see that they need to achieve a 65% compound growth on their investments. Given that their 401k can’t achieve more than 8% over 40 years, it’s clear that they need somebody to teach them how to become rich. That narrows down my readership to those who have done the same kind of self-reflection that I did seven years ago and realize that they actually need to become rich.


MC: What do most hope your readers get out of it?

AC: I hope that my new readers realize that they should evaluate their lives and see if what they are currently doing is going to truly satisfy them. If so, don’t change anything. But, for those who need more out of life, I hope that they walk away with the tools to evaluate what they truly want to do with their lives, how much money they will need (and by when), and the real personal financial steps that they need to take to bridge the gap … quickly. It’s not about getting rich quick. But it is about getting richer, quicker.


MC: For those unfamiliar with your blog, what are some representative posts?


I like this one, because it encourages you to start thinking externally rather than internally, which is the first step to financial freedom:

This one shows that where you invest your money is more important than how much you put aside each week or month:


MC:  Did you grow up in a financially literate household? Did your parents discuss money matters with you?

AC: I grew up in a poor household. The rest of my family grew up in a rich one. The trouble was it was the same house! You see, my father lived beyond his means, but I was the only other male in the family, so he only confided his true financial situation in me. Therefore I grew up paying for all of my own clothes, cars, and so on. The rest of my family still lives on handouts from richer relatives.


That knowledge taught me financial responsibility, but it didn’t teach me how to make money. That came from my $7 million/7 year journey. Naturally, I taught my own children about money. My son is a natural entrepreneur, my daughter is more social, but both know how to save and how to spend responsibly.


MC: What books or financial pundits, if any, influenced you/

AC: Rich Dad, Poor Dad by Robert Kiyosaki and The E-Myth Revisited by Michael Gerber. The first is about money and the second about business.


MC: How did you get started in investing?

AC: My very first investment was an apartment that I bought soon after college because a friend of mine was buying one in the same block. I knew nothing other than to copy him. I sold it a couple of years later to pay for a trip overseas. It’s safe to say that was not the start of my financial journey. When my financial wake-up call arrived seven years ago, I made my first real real-estate investment. Like most people, I knew that I wanted to invest in real-estate but I had no idea how.


One day I was driving around my neighborhood and saw a ‘For Sale’ sign on a condo in an older block of 12. There was an auction just about to start.  I figured that not many people would know about it because the sign was by an out-of-town agent, so I stopped to check it out.


My next problem was that I had literally no idea of how much to pay. But, I saw a young guy in a tradesman’s outfit measuring doors and windows and so on. I guessed that he was planning to buy it for himself, fix it up and flip it. I decided to bid against him and pay $1 more. I figured that if he was looking to take a quick profit that he would be operating on a tight budget, and that I could then afford to pay just that little bit more to buy and hold.


And, that’s what happened. I found myself as the winning bidder for a property that I had never been in before. I had to call my wife (who was not pleased) to rush over with my checkbook. We still own that condo today and it has been a star performer.
MC: What are some of the defining lessons you learned when you first started out?

AC: You can’t save your way to wealth. Running some simple numbers through that online calculator quickly showed me that my 401(k) would never be able to fund my retirement even if I waited until 65. Investment returns from mutual funds are simply too low and fees are too high, not to mention inflation eats up half of everything every 20 years. I realized that I would need to create my own perpetual money machine by taking as much income as I could put aside and invest it in assets that I could borrow against (so that I could buy more), but still had enough income to cover the costs of owning those assets. Real-estate (and, to a lesser extent a small portfolio of hand-picked stocks) could fit the bill. I also learned that starting a business is the best way to increase income. More income means more investments and more investments means more real wealth.


MC: What are some of the most common mistakes investors make?

AC: The most common and costly mistake is confusing good and bad debt with cheap and expensive debt. Because so many people have trapped themselves into bad credit card debt, which they should pay off as quickly as possible because it’s just so expensive, they have been lead to believe by so many financial pundits that they should pay off all of their debt, including their mortgages. For most people, this is actually a mistake.


Instead they should pay off expensive debt (such as credit cards, and auto loans) as quickly as possible. But, as soon as their remaining loans are at a lower rate than the cost of an investment loan (such as you might get to buy an investment property), why pay it off just to take out a bigger, more expensive investment loan?


The second mistake is thinking that your house is an investment: it’s not. The chances are that you will never be able to sell that house, even when you retire. Retirees plan on selling their big houses but they rarely move into a small, two bedroom condo. They realize that they either don’t want to move, or they want to stay close to their children, or move into an expensive retirement community. That and the moving costs (plus, are you going to move old furniture into a nice, new condo?) mean that they pocket a lot less than they thought. Suddenly, there’s a huge hole in their retirement budget.


MC: What is the most common question you are asked?

AC: Mostly, people ask me how I became rich. I tell them on my blog because it’s something that anybody can do.


That’s the interview! What did you think?

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2 thoughts on “An interview with AJC …

  1. Hi AJC,

    Having read your blog for some time, you have already repeated almost everything in the interview before. However this format put most of your thoughts together in a succinct manner.

    Good stuff!


  2. @ Mike – This is the lazy man’s way of writing a post 😉

    Actually, thought it would make a good intro for new readers …

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