Five years ago today, I started a new blog. Inspired by the success of a popular post at my personal site, I sat down to create what I thought would be the first personal-finance blog on the internet. I was wrong, of course; there were plenty of similar blogs before mine. I had no idea what I was getting myself into.
In the Beginning…
In April 2006, I was still deep in debt. I’d begun to turn things around, but I still felt overwhelmed by how much I owed. I was also still selling custom boxes for my family’s box factory, doing half-ass work at a job I hated. My personal blog had a modest audience (mostly friends and family who didn’t mind reading about my obsessions with cats, computers, and comics), and I figured it’d be fun to start another blog: a blog about money.
Now, five years later, my life has changed completely.
- In December 2007, I paid off the last of my consumer debt. After 20 years, the burden was gone.
- In March 2008, I quit my day job. For the past three years, I’ve been writing full time.
- At first, I wrote solely for Get Rich Slowly. Gradually, though, I’ve branched out. I wrote Your Money: The Missing Manual. I have a monthly column in Entrepreneur magazine. And I’ve contributed to NPR, CNN, CNBC, and many other books and magazines.
- Now, slowly but surely, Get Rich Slowly is becoming a multi-author blog. To avoid burn-out, I’ve brought in other great writers to share what they know about personal finance. In theory, this should give me time to pursue other projects — such as Awesome People.
Most of all, I’ve learned the power of targeted saving and conscious spending. By choosing how I want to use my money, I’m able to do the things I want most. Why did it take me forty years to learn this?
The Get Rich Slowly Philosophy
When I started this blog, I didn’t have a coherent financial philosophy. I was making things up as I went. I read books and blogs and magazine articles — basically, I read everything about money I could find. In time, I developed a set of personal financial guidelines.
Based on my research — and my experience with what does and doesn’t work — I’ve compiled a list of fifteen tenets that form the basis of everything I write. Some of these rules draw on age-old wisdom: “Saving must be a priority” is just the ancient truth that you’ve got to “pay yourself first”, for example. But other rules — such as “do what works for you” — I came up with on my own.
The Get Rich Slowly philosophy currently comprises these fifteen tenets:
- Money is more about mind than it is about math. That is, financial success is more about mastering the mental game of money than about understanding the numbers. The math of personal finance is simple — spend less than you earn — it’s controlling your habits and emotions that’s difficult.
- The road to wealth is paved with goals. Without financial goals, you have no direction. If you have no direction, it’s easy to spend money on things you’ll regret later. But if you’re saving for a house, your daughter’s college education, or a trip to Europe, your goal will keep you focused, making it easier to spend on what’s important and ignore the things that aren’t.
- To build wealth, you must spend less than you earn. Basic math, yes, but it’s important. Successful personal finance is all about building positive cash flow. By decreasing your spending while increasing your income, you can get out of debt and build wealth.
- Saving must be a priority. Before you pay your bills, before you buy groceries, before you do anything else, you should set aside some part of your income. If you have to start small, start small. Even $25 a month is good. As you earn more and develop better habits, save as much as possible. (My wife saves nearly a third of her paycheck!)
- Small amounts matter. Your everyday habits have a huge impact on your financial success. Frugality and thrift help build good habits, and make a real difference over time. Plus, there are tons of opportunities to flex your frugal muscles.
- Large amounts matter, too. It’s good to clip coupons and to save money on groceries, but it’s even better to save on the big stuff like buying a car or a house. By making smart choices on big-ticket items, you can save thousands of dollars at once.
- Slow and steady wins the race. The most successful folks are those who work longest and hardest at things they love to do. So try to find ways to make frugality fun, and recognize that you’re in this for the long haul. You’re making a lifestyle change, not looking for a quick fix.
- The perfect is the enemy of the good. Too many people never get started putting their finances in order because they don’t know that the “best” first step is. Don’t worry about getting things exactly right — just choose a good option and do something to get started.
- Failure is okay. Everyone makes mistakes — even billionaires like Warren Buffett. Don’t let one slip-up drag you down. One key difference between those who succeed and those who don’t is the ability to recover from a setback and keep marching toward a goal. Use failures to learn what not to do next time.
- Do what works for you. Each of us is different. We have different goals, personalities, and experiences. We each need to find the tools and techniques that are effective for our own situations. There’s no one right way to save, invest, pay off debt, or buy a house — and don’t believe anyone who tells you there is. Experiment until you find methods that are effective for you.
- You can have anything you want — but you can’t have everything you want. Being smart with money isn’t about giving up your plasma TV or your daily latte. It’s about setting priorities and managing expectations, about choosing to spend only on the things that matter to you, while cutting costs on the things that don’t.
- Financial balance lets you enjoy tomorrow and today. You don’t have to choose between spending today and saving for tomorrow. You can do both. Strive for moderation in all things: Pursue your goals, but don’t forget frugality; be frugal, but don’t forget your goals.
- Action beats inaction. It’s easy to put things off, but the sooner you start moving toward your goals, the easier they’ll be to reach. It’s better to start with small steps today than to wait for that someday when you’ll be able to make great strides. Get moving.
- Nobody cares more about your money than you do. The advice that others give you is almost always in their best interest, which may or may not be the same as your best interest. Don’t do what others tell you just because they hold a position of authority or seem to have a persuasive argument. Do your own research, get advice from a variety of sources, and in the end, make your own decisions based on your own goals and values.
- It’s more important to be happy than it is to be rich. Don’t be obsessed with money — it won’t buy you happiness. Sure, money will give you more options in life, but true wealth is about something more. True wealth is about relationships, good health, and ongoing self-improvement.
In the past, I thought “do what works for you” was the most important tenet in this list. It was this site’s unofficial motto. Recently, though, the site’s theme has changed. Now the core value here is “nobody cares more about your money than you do”. Smart money management is all about taking an active role in your financial future, about becoming your own financial guru.
Two years ago, I tried to outline what I called the “phases of personal finance”. These are the stages people pass through in their relationship with money.
- In the zeroth stage of personal finance, a person doesn’t exercise any sort of financial skills at all. Often, he isn’t even aware that he should. He uses money without thinking. And, more often than not, he lives reactively, spending in response to outside forces.
- The first stage of personal finance is all about learning the basics: understanding compound interest, reducing debt, beginning to save.
- The second stage involves putting the basics into practice: choosing to live frugally, saving in earnest, and pursuing financial goals.
- The third stage means doing more of the same — continuing on the path to financial success. But it’s here that you can start asking yourself why you’re doing this. Why are you saving? What’s next. It’s here that you begin enjoying the fruits of your labors while continuing to save for the future.
- The final stage of money management is Financial Independence, as defined in Your Money or Your Life. This is the point at which you have â€œenough — and then someâ€.
Though I haven’t revisited these stages, I think about them every time I write an article. Maybe it’s time for me to cover them again?
Now, as we do every year, let’s take a trip through the GRS time-machine.
Get Rich Slowly: Year One
When I started Get Rich Slowly, I made several posts per day, most of which were short summaries of things I’d read elsewhere or glimpses at interesting personal-finance products and tools. It was several months before I found the pattern that lasted for the next several years: two posts per day, with the early post being a longer entry.
Most of these early articles were about my personal history, and about the tools and techniques I was using to get out of debt. Here are some of my favorite from that first year:
- The Entrepreneurial Spirit, a Tribute to My Father — My father was an entrepreneur. He was always starting businesses. He was always selling things.
- The Worst Job I Ever Had — I made some poor choices at the end of my college career; as a result, I graduated without a prospect for work. No matter — I lived off my credit cards for a few months, basking in the glow of adulthood. Eventually I realized that I needed to find a job.
- Money Blueprints: What Our Parents Taught Us About Money — I had dinner with two friends from high school last night. We shared good wine, good food, and, especially, good conversation. We talked about how we perceived money when we were younger.
- Which Online High-Yield Savings Account is Best? — The most-commented post ever on this site, and one folks refer to again and again. It’s not story-oriented, but is simply a resource for finding a good online bank.
Get Rich Slowly: Year Two
The second year of this site saw a creative explosion. As the GRS community grew, it fed me new ideas. And as I defeated debt after debt, I found inspiration all around me. Success with personal finance led to success in other areas of my life. By the end of 2007, I’d managed to pay off the last of my consumer debt; a few months later, I quit the day job to blog full time.
Some of the best stories from this site’s second year include:
- The Power of Yes: A Simple Way to Get More Out of Life — For much of my adult life I’ve been shackled by fear. I’ve been afraid to try new things, afraid to meet new people, afraid of doing anything that might lead to failure. This fear confined me to a narrow comfort zone. Recently, however, I made a single small change that has helped me to overcome my fear, and allowed me to get more out of life.
- You Are Your Own Worst Enemy — My friend Gillian called the other day — she’s been having money trouble and was looking for help. â€œI’m not really a financial advisor,â€ I told her. â€œI write about money, and I try to help people at my web site, but I’m not qualified to coach you one-on-one.â€ Still, she’s a friend, so I resolved to at least give her some advice.
- Free at Last! Saying Good-Bye to 20 Years of Debt — It took a lot of time and effort, but these actions have finally paid off. Today I wrote a check for the last of my consumer debt. I’m now debt-free, except for my mortgage. I’ve been walking around in a happy little haze all day long.
- Luck is No Accident: 10 Ways to Get More Out of Work and Life — Dale Carnegie once said, â€œHappiness doesn’t depend on ay external conditions — it is governed by your mental attitude.â€ Some people might dismiss this as bunk, but research bears it out. Don’t worry about circumstances beyond your control. Learn to control the things you can, including your reaction to the world around you. How you respond to an unfortunate event is often more important than the event itself.
Get Rich Slowly: Year Three
The third year of Get Rich Slowly was turbulent, though most of this occurred behind the scenes. The blog grew rapidly, and I realized it had turned from a hobby to a business. This was both a blessing and a curse. I felt like there was way too much for one man to take care of, so I began to cast around for solutions.
Meanwhile, I found it difficult to find financial balance. I’d been pinching pennies for a long time in order to pay off my debt, and it was tough for me to loosen up. With your help, I eventually realized it was okay to use money to have a little fun. To add to this year’s ups and downs, my best friend died. This had a profound impact on my life and on this blog.
Here are some of the top stories from Get Rich Slowly year three:
- A Real Millionaire Next Door — Kris and I love our neighbors. One of our favorite neighbors is the old guy next door. Let’s call him John. He’s a man who has lived the philosophy I’ve adopted for myself, who has lived the philosophy I espouse on this web site. He’s lived this life and has been successful. He’s a man who is happy and fulfilled. He’s a real-life millionaire next door.
- You Can’t Always Get What You Want — It’s okay to have something in your life that you hate. And it’s okay to have something you want. It’s natural. The problem is that once you get that thing, you’re just going to hate something else, you’re just going to want something more. It’s not want that’s the problem, but the habit of constantly satisfying wants.
- The Razor’s Edge: Lessons in True Wealth — My friend Sparky made what I thought were odd choices. He lived like a monk while at home so that he could spend his money on travel and other things that were important to him. This article describes the lessons he taught me.
- How to Build Confidence and Destroy Fear — Without self-confidence, we have a tendency to make poor decisions. We make choices based on fear instead of what’s best for us. If you lack confidence, you might fill your life with self-destructive behavior. You might work at a job you hate. You may allow yourself to get deep in debt. You may find yourself moving from one bad relationship to another. Without confidence, you don’t allow yourself to pursue your dreams. Here are a few courage-building techniques I’ve picked up over the years.
Get Rich Slowly: Year Four
My fourth year at Get Rich Slowly was one of great personal fulfillment — and great personal struggle. As a result of my best friend’s death, I made some big behind-the-scenes changes so that I could free some time to pursue other life goals. First, though, I wrote Your Money: The Missing Manual, which consumed six months of my life (and led me to gain twenty pounds).
One of the most notable changes this year was the addition of staff writers. This helped take the load off my shoulders, and introduced some new voices around here. The blog also moved to a “one long article a day” format, which most people seem to prefer.
Great articles from year four include:
- How to Negotiate Your Salary — I don’t think people spend enough time looking for ways to boost their income. Learning how to negotiate your salary is one of the best ways to improve your financial well-being.
- Understanding the Federal Budget and The Truth About Taxes — We cannot have informed discussions about taxes and government spending if we don’t have the baseline information. Because my own education on this subject is weak, and because I want GRS readers to be informed, I spent twelve hours last week researching a variety of tax topics. These two articles record my attempts to discover that baseline information.
- The Paradox of Choice and the Dangers of Perfection — While it’s true that some choice is a good thing, too much is not. It’s easy to pick the best option from a pool of three, but it’s difficult to find the perfect choice in a pool of thirty. “Perfect” is a moving target. It’s better to make a solid decision today than a perfect decision next week.
- Spend Based on Who You Are, Not Who You Want to Be — Buy things as rewards, not because you expect merely having them will change who you are. Or, another way to think of it: Buy things as you need them instead of buying them with the expectation that you’ll use them.
Get Rich Slowly: Year Five
Last year, I finally admitted the truth: Get Rich Slowly is no longer about me. Get Rich Slowly is a group blog. Mine is the strongest voice, and I provide the editorial vision, but the multi-author format is here to stay. Last year allowed me to hone the direction of GRS as a group blog.
For one thing, I was able to incorporate more reader voices. I’ve said all along that you folks are what make Get Rich Slowly great. It’s not me. It’s not the other writers. It’s the community that has grown around this site. I love how freely everyone shares their tips, stories, and experiences. It’s fantastic. Over the past year, I’ve worked to make your voice more prominent on this site, incorporating features like Reader Stories and regular Ask the Readers questions. Lately, I’ve made a couple of other small changes, such as introducing follow-ups to past discussions and making a conscious effort to weave continuity from post-to-post.
Here are some of my favorite stories from the past year:
- The Rewards of Frugality and Thrift (or Why We Scrimp and Save) — I write about thrift and frugality a lot, but it’s only because I recognize their value in helping me obtain my goals.
- Action Not Words: The Difference Between Talkers and Doers — If there’s something you want to be or do, the best way to become that thing is to actually take steps toward it, to move in that direction. Don’t just talk about it, but do something. It doesn’t have to be a big thing. Just take a small step in the right direction every single day.
- From the Rich to the Poor (or What I Learned in Africa) — My trip to Africa changed me. I want to do more with myself. I want to help others, if I can. I have some ideas on how to do this, but time will tell just where this experience will lead me.
- Earning, Spending, and Saving: The Building Blocks of Personal Finance — Yes, this article’s only a week old. That’s okay. It’s an important one. It shares a subtle re-structuring in the way I view personal finance. Subtle, but important.
Get Rich Slowly: The Next Generation
What does the future hold for Get Rich Slowly? I’m not sure. For the foreseeable future, things will continue as they are. I feel like the blog has found a good rhythm lately, a fine balance between my voice, the voices of the other writers, and your voices, as well. The blog seems to be helping people achieve their financial goals, and that’s what matters most.
At the same time, there’s no question that I’m itching to work on other projects:
- Awesome People has been nagging at my brain for six months, and I’m finally moving forward with it. (It’ll be a slow start at first, but I’m fine with that.)
- I’d love to make Success Daily viable, too. I started it last April, but then stopped almost immediately. I haven’t given it up; I just need more time.
- And, most of all, after returning from southern Africa, I want to figure out how to channel the calling I feel inside to do something productive to help the world. (More on that in May, I think.)
I have a lot of plans and ideas. I’m eager to see where life takes me.
Thank you for five great years! I’m happy to have helped so many people, and I appreciate how much you have helped me. I look forward to continuing this journey together.
Birthday cake photo by chidorian.