Being a black belt in finance means to have a net worth of a million dollars.
Just like a martial arts dojo, Your Money Geek is a place where we can learn about personal finance and eventually become financial black belts ourselves. In this series, we get to hear the stories of actual millionaires and see what it took for them to get to that level.
Now for the interview:
What degree black belt are you? (e.g. one million = first degree, two million = second degree).
Give us the break down on your current net worth. What is it invested in and do you have any debt?
Our current net worth is $1.25 million as of June 2019.
Most of our net worth is in investments, both retirement and non-retirement accounts. The rest is our house, cash, and personal belongings.
Here is a breakdown:
- Retirement Accounts: 55%
- Taxable Accounts: 21%
- Primary Residence: 14%
- Cash: 6%
- Personal Belongings: 5%
The only debt we have is our house and a car we just bought. Before the car, we had no other debt besides our mortgage for 5 years.
Our investments are in low cost ETFs. I keep our investments as basic as possible, and just diversify across a few asset classes, like large cap, small cap, international and bond funds.
Our equity to fixed income allocation is 80% equities and 20% fixed income.
How was your childhood? Was your family wealthy, middle class or low-income?
We were middle class. My parents didn’t go to college. My Dad worked at a factory and my Mom stayed home with my sisters and me until I started school. Then she entered back into the work force.
I never had the sense that we could have anything we wanted, but we definitely had everything we needed.
I remember going to JCPenney and Sears every August for our annual school clothes shopping trip.
My parents were definitely of the frugal mind and watched their money. They didn’t spend a lot of money on themselves.
Our splurges were a family vacation every summer and then at Christmas, in addition to our gifts, there was a larger family gift.
Did you go to college?
Yes, I got my undergrad from Mercyhurst University and my graduate degree from St. Joe’s University
My undergrad degree is in Liberal Arts with concentrations in business and criminal justice. I originally majored in criminal justice with the idea of going into the FBI.
But when I looked at the application and I had to agree to live anywhere in the world for at least 6 months, I decided against it.
My graduate degree is in finance.
What is your fighting style? (Career path from first dollar ever made to present).
My first job was when I was 15. I worked at my church trimming weeds around gravestones earning $5 an hour.
It was great as I made my own hours.
After that I worked at a grocery store as a stock boy earning $5.15 an hour.
The summer before college, I worked at the factory my Dad worked at. He got me the job as a lesson. If I didn’t go to college, this was what my life would be.
The job was demanding. I had to wear jeans and steel toed boots and I worked next to the ovens, so it was routinely 125 degrees or hotter all summer long.
The nice thing was that the hours were 6am – 2:30pm so getting done early was great.
In college I did work study at the library, earning minimum wage for the first 2 years. During the summers I worked in a textile factory cutting fabrics for office chairs earning $11 an hour.
My senior year of college I took a job at Enterprise Rent A Car washing cars. It was one of my favorite jobs.
I was only earning $6 an hour, but I was getting to drive a bunch of cars, and for a car guy, this was great.
My boss was great too. They completely understood that I was in college and let me take off during finals week and during the holidays so I could go home.
My coworker was great too. He was retired and did the job for something to do. When we would have to run out together to pick up a car from the shop, he would pull into McDonald’s and buy me food.
After college, I had a tough time finding a job. In fact, I got depressed and ended up in credit card debt.
The reason was because I was expecting to land a great paying job and start the rest of my life. But the economy went into a recession and I couldn’t find a job in the finance industry.
Eventually I took a part time job at Circuit City as a customer service rep earning $7 an hour. My bosses loved my hard work and increased my pay to $7.25 after a month.
They also tried to get me onto the sales floor, but I wasn’t interested in sales.
A few months later, I landed a temporary position with Vanguard manning the phones for tax season. The problem was that the economy was just coming out of the recession and not enough temps were hired.
The result was a call queue every day of 150 people. It was madness. During this time I was still working at Circuit City.
This was around the holidays and I was closing the store. This meant I worked at Vanguard from 8am until 5pm.
Then I would go straight to Circuit City from 7pm and stay until 12am or 1am by the time I finished counting the money and balancing the drawers.
The lack of sleep caught up with me one day when I was at Vanguard and I answered the phone by saying “Thank you for calling Circuit City, this is Jon, how may I help you”.
After the temp position with Vanguard ended, I found a permanent job at SEI Investments. I stayed there for 6 years working in various roles.
Next I moved on to a small high net worth planning firm, which I loved.
It was great being on the front line helping people with their money as opposed to helping them on the back lines and not seeing the impact you have on their lives.
During this time I was running my personal finance blog on the side. I thought it would be amazing to make it my full time job, but assumed that it would always be a side hustle.
But then I got laid off out of blue. After talking things over with my fiancé, we agreed I would try to grow my blog income for the next 6 months and go from there.
That was back in 2013 and I never looked back.
Would you recommend people to pursue the same career path? Would you choose a different job if you could go back?
My career path was all over the place as I was figuring out what I enjoyed and didn’t enjoy.
For that reason, I would suggest the same thing to others.
Remember, you are going to be spending 40 hours a week or more at your job, and this doesn’t factor in any commute.
So finding something you enjoy doing is critical.
As for changing anything, I wouldn’t. I took something from every job I’ve had and applied that knowledge to my next job.
Have you had any side hustles?
I don’t have any side hustles at the moment, but have been doing side hustles since college.
It first began my freshman year. That is when eBay became mainstream. Back then, you could list just about anything on the site and it would sell.
For example, to prove this to a friend, I listed a $5 bill on the site. The only thing that made it special was that it was nice and crisp, right from the bank.
I sold it for $7.
Eventually, my roommate and I joined BMG and Columbia House to get CDs, which we resold on eBay.
It was a great gig while it lasted, but then Napster came and ended our fun.
After that, I sold items on Amazon through their FBA program and then my blogs were my next side hustle that I started.
If you have a spouse, how have they contributed to your net worth?
My wife has contributed greatly to our net worth.
She worked in sales for many years before we met and a few years while we were dating. She was a rock star and was earning bonuses all the time.
She is a saver at heart, so while she did splurge, most of her bonuses and income went towards savings.
Eventually though she became burnt out to the grind and switched careers. She took a pay cut as a result, but her health and happiness are more important than money.
How old were you when you became a financial black belt?
I was 35 years old.
At what age did you start seriously saving money?
I have always been a saver. I can remember as a young child my Mom taking my sisters and me to the bank on Friday nights and depositing $0.25 into my savings account.
The idea of giving the bank my money and them giving me more money amazed me.
With that said, I really started saving money after I paid off my debt. I started to calculate my net worth monthly and this motivated me to save as much as I could.
I turned this into a game, trying to grow my net worth every month.
Then when I met my wife we were on the same page in terms of valuing saving. Since we have been together we make it point to save at least 40% of our income.
What has been your investment strategy?
My investment strategy has changed over the years.
I first started investing when I was 17. My economics teacher in high school showed us the movie Wall Street and I was hooked.
My Mom opened an account for me since I was a minor and I took the advice of Peter Lynch. I went to the mall and noticed that every woman was walking around with a shopping bag from Victoria’s Secret.
Every time I went to the mall, this was the case. And their stores were always packed.
So I bought shares in Intimate Brands, the parent company. This investment served me well over the years.
Unfortunately, it turns out I wasn’t a great stock picker.
I invested in Ford right before the Firestone tire ordeal and lost a bunch of money.
I invested in a tech mutual fund right before the dot com bubble burst. It earned 60% the previous year and I wanted to earn that same return. I lost 60% instead.
I also invested in Worldcom. That was a wild ride, especially when there were rumors of a merger with Sprint.
Sadly, I owned this stock as it dropped and kept buying more the entire way down. Then news broke they were “cooking the books” and the stock became worthless.
Realizing I wasn’t growing my wealth with this strategy, I began to take a passive investing approach. I have followed this mantra ever since.
I have a core holding of select low cost mutual funds and ETFs and invest money into them on a regular basis.
Who was your financial sensei? (Most influential person/source of information in your financial life).
My parents. Because of our upbringing, I never felt the need to have a lot to “show off” my success. I just put my head down, work hard and save my money.
This has been reinforced now that my parents are retired and I see they are financial black belts as well.
I would have never guessed they would be, but it shows that if are smart with your money, you can become wealthy.
Are you pursuing FIRE (financial Independence/retire early)? If so, how much money do you plan to retire on and are you going to quit working for money altogether?
Yes, we are planning to retire early. Our goal is to retire by 55 with around $2.5 million dollars in savings.
Neither one of us is going to quit working altogether.
Our idea of early retirement is to simply not have to be tied down to a job. We want to be able to spend the summer at the beach with our daughters and not have to worry about getting back for work on Monday.
In a sense, I feel like I am already living this dream as I can work from anywhere and I get to be flexible with my hours.
But with that said, I am not there 100% yet as I do have to put in many hours to keep my sites earning an income.
Mind over matter
Do you think psychology plays a more important role than math with finances?
I think it does for 2 reasons.
First, the more money you can save, the better off you will be. But saving a few dollars here and there is hard for most people because they feel it won’t add up to much over the long run.
If they could change their mindset and understand that small savings grows your wealth, they could change their financial lives in the future.
Second, when it comes to investing, psychology is critical. The market swings wildly and investors hear the doom and gloom from news channels and online.
But if they don’t panic and stay invested for the long-term, they will come out ahead.
When I worked for the high net worth planning firm, we had to hold many clients hands during the Great Recession and again during the summer 2011. It was a scary time.
But all those clients we kept invested made all of their losses back by late 2011 and early 2012. Now most have doubled what they had.
If they had run away scared and not come back, they would be in much worse financial shape.
So to me, controlling your emotions is critical for financial success.
What was your toughest mental opponent on the path to your black belt?
The media and advertisers.
They have become really good at making you think you need things that you really don’t.
I’ve found that I have to play spending games at times just to avoid making knee-jerk purchases.
I usually ask myself if the item will improve my life for the better now and how my life will look like in 5 years with the item.
Other times I just make a note of the item and forget about. Usually in time, I realize I don’t want the item.
This works great for clothing. I take a picture of the shirt or pants and then a few weeks later as I am scrolling through the pictures on my phone, I see it and end up just deleting it.
There are a lot more financial white belts than black belts out there. How do you think differently than the average person when it comes to money?
I know and understand what I value.
When I was younger, I would spend money as I pleased. This got me into credit card debt and simply being unhappy with life.
I realized over time that I needed to understand what I value in life. Once I did this, I shifted my spending.
Now I only spend money on certain things and I couldn’t be happier.
Too many people buy the big house, the brand new luxury SUV and the like to show off their success, but none of these things have any meaning to them.
The result is them being unhappy in life and having the added stress of credit card debt, high bills and lots of maintenance.
If they could take the time to understand what they value, they could dramatically improve their finances and their happiness.
What does wealth mean to you? Should everyone pursue it?
Wealth means having options to me. By having wealth I can choose to work, not be required to do it in order to survive.
And I do think everyone should pursue it. This isn’t to say that everyone needs $10 million dollars. You need to define what wealth is to you and then go out and work to achieve it.
When you do, you will have options in life. You can choose to take a job you love even though it pays a lot less.
You can choose to live somewhere else because you enjoy the culture.
Should people follow their passions or just do something practical?
This is hard to answer. Most people say to follow your passions, but you may find out that your passion really isn’t a passion at all.
At the same time, you might find your calling from being practical.
For example, I love personal finance. I love reading and learning about it and teaching it to others. But my whole life I hated writing. I didn’t enjoy English class in high school and barely got by.
But here I am, writing every day for a living and I am happier than ever.
On the other hand, I enjoy taxes. But when I was working as a mutual fund tax accountant, I hated every minute of it.
In the end, my answer is to simply be open to trying new things and be willing to change if you find that you’ve made a mistake.
What is your weapon of choice? (favorite money tool/app)
My favorite money tool is my Charles Schwab accounts. I invest in low cost ETFs and just keep buying regardless of what the market is doing.
What has been your favorite way to earn money?
They give me a lot of freedom. For example, I get up at 5am and work for a few hours before our daughters get up.
I will come out of my office to eat breakfast with them and play for a little until their nanny gets here.
On Fridays, I typically spend all day with them.
And during the workday, I sometimes sneak out to go grocery shopping or mow the lawn. This frees up our nights and weekends to spend as a family.
What’s your favorite way to use money?
To help out others. We tithe money to our church as well as to those in need. It feels good to give back and help out others since we have the means to do so.
What’s your one piece of money advice to us financial underbelts?
The race is long, so don’t let one day define you.
When you make mistakes, take a step back and learn from them and start again.
As long as you keep pushing forward and don’t get caught up in the short term, you will reach your goals.
Nathan has been a personal finance writer since early 2018. He and his wife reached a net worth of one hundred thousand at the age of 25 and are on their way to financial independence. His favorite way to make money is selling things on eBay and has grown his eBay business to earn five figures selling part-time. He loves sharing what he learns about finance and any eBay tips he comes across. If you’re interested in becoming an eBay seller, check out his reseller Facebook group.