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).
My current net worth is about 7 million, so that would be seventh degree.
Give us the break down on your current net worth. What is it invested in and do you have any debt?
Back in December 2012, I started a nutrition website called Authority Nutrition. It grew very quickly and eventually became the world’s biggest nutrition website. I sold it to a US company called Healthline on July 31st, 2017. You can read the full story here.
My sale of the company for a high 7-figure amount was responsible for most of my current net worth.
I have zero debt and part of my net worth is tied up in my apartment, which would likely sell for about 700K today.
But the majority of my net worth is either invested in the stock market or waiting to be invested. I would say that about 50% of it is invested, mostly in individual companies. The rest is either in savings and brokerage accounts collecting yield or short-term treasury bond ETFs (mostly SHV).
My top stock holdings are Facebook (FB), Alphabet (GOOGL), Microsoft (MSFT), Berkshire Hathaway (BRK.B). Then I have smaller amounts in Alibaba (BABA), Tencent (TCEHY), NVIDIA (NVDA), CVS (CVS) and a few others.
How was your childhood? Was your family wealthy, middle class or low-income?
My childhood was very good. My parents broke up when I was an infant, so I was mostly raised by a single mother until she met my step dad when I was about 6 years old. I would say that it was a middle-class family with average income, but we did have some rough periods of low income. The 2008 financial collapse was a particularly challenging time in Iceland and my family was at the brink of bankruptcy, but my mother found incredibly intelligent ways of saving money and cutting down debt and we managed to get by.
As a teenager, I did have a lot of problems with drug addiction. During this time, I didn’t really have a steady job for long and was in and out of school. I would say that I was a regular user from about 15 to 20 years old and went to rehab at least 6 times, with multiple trips to the emergency room and going to jail multiple times. I was even admitted into a mental hospital once. Eventually I went into rehab for the last time on January 4th, 2007 and I have been sober ever since.
Did you go to college?
Yes, I did one year in biomedical science and then three years in medicine at the University of Iceland. I now have a Bachelor’s degree in medicine.
What is your fighting style? (Career path from first dollar ever made to present).
I have never been particularly good at managing my money and have usually spent everything I have earned. It wasn’t until I sold my company that I started to think about saving and investing. Because my income is now much lower, I need to be careful with how much I spend.
My main fighting style would be enterpreneurship, because this has been my major source of wealth.
Would you recommend people to pursue the same career path? Would you choose a different job if you could go back?
I think becoming an enterpreneur and starting your own company or website is a great idea. But it’s not for everyone, it takes a certain type of obsessive personality to be able to succeed with it. It took me a long time to see the first paycheck, but after that the paychecks grew quickly.
If you have the type of personality who gets obsessed and driven to succeed at a project, then this may be a good approach for you.
I would definitely not choose a different path if I could go back in time.
Have you had any side hustles?
Not really. I used to work at Domino’s Pizza but I quit when the income from my website was high enough so that I didn’t need to work anymore.
If you have a spouse, how have they contributed to your net worth?
I do not have a spouse.
How old were you when you became a financial black belt?
I was 31 when I sold my company. My net worth had probably been hovering around 1 million for a couple of years before then.
At what age did you start seriously saving money?
I didn’t really start to consider it until after I sold my company, at 31. That’s when I decided to learn about investing because I thought that it would be the most efficient way to increase my wealth after selling my company.
What has been your investment strategy?
I like to invest in highly profitable growth stocks with strong and growing free cash flows. Even better if they have secular growth opportunities that are likely to provide a multi-decade tailwind. Internet companies are my favorite because I understand them and their business models very well.
I plan to be a buy-and-hold investor, then using the future dividends to invest in even more businesses.
Who was your financial sensei? (Most influential person/source of information in your financial life).
My main source of information and inspiration is Warren Buffett. I have read many books about him and watched/listened to many of Berkshire’s annual meetings. His investing philosophy makes a lot of sense to me, although I like investing in tech and internet companies more because those are included in my own “circle of competence.”
I also read Ben Graham’s book, The Intelligent Investor, and highly recommend it. The book is fairly dry and boring, but it teaches you a certain mindset that is likely to be valuable in the long-term.
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?
I have enough money to retire already and I did take a few months after I quit the company I sold where I didn’t do much. I didn’t enjoy it that much since I really like working and keeping busy.
So I started a new website called Search Facts where I teach people how to build their own high-traffic websites using search engine optimization and other methods.
I don’t know if and when I will ever retire.
Mind over matter
Do you think psychology plays a more important role than math with finances?
Absolutely, psychology is just as important as math when it comes to finances, especially with investing. I think it also helps to have good intuition.
What was your toughest mental opponent on the path to your black belt?
It did take me a long time to accept the idea of selling my company. I wasn’t convinced until after months of negotiations. But it was one of the best decisions of my life in retrospect.
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?
My main focus is on preserving and growing my wealth. But most people have different priorities, such as making enough to have a decent quality of life.
What does wealth mean to you? Should everyone pursue it?
To me, wealth means being able to do what I want to do. It means freedom. I think it is worth pursuing for me personally, but I don’t think it’s for everyone.
Wealth does not bring happiness on its own and it is never enough. Once you make your first million, you are probably going to become obsessed with making your second million, etc. No number will be fulfilling, there is always the next milestone to go after.
Should people follow their passions or just do something practical?
It’s best if you can combine both. Do what you are passionate about, but try to do it in a practical and smart way.
What is your weapon of choice? (favorite money tool/app)
What has been your favorite way to earn money?
I like passive income from a website that gets traffic from search engines. Ranking in Google and having ads or selling products on your website works very well. If you can get consistent high rankings, then you can get income from a single article for many years. It is much better than working for hourly pay.
What’s your favorite way to use money?
I like traveling and staying in nice hotels.
What’s your one piece of money advice to us financial underbelts?
If you’re passionate about something, start a website about it. Put some ads on it when you start to get traffic. Then scale it up and make it bigger. That’s what worked for me.
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.