Another visit with the real Millionaire Next Door
It was sunny last Friday afternoon, so I decided to go for a ride. Because Kim has been riding motorcycles all her life, I took a training class last August and now own a used Honda Rebel. When the weather's nice in Portland, I like to do my errands on the bike so that I build skills and confidence.
My ex-wife had told me I ought to pick up mail from her house, so I rode down to visit Kris and the cats. When I got there, she wasn't home. To kill time while I waited, I went across the street to say hello to my former neighbor, the real millionaire next door.
“Who can that be?” John blustered when I rang the doorbell. He's a 77-year-old former shop teacher who spends summers on his boat in Alaska and winters doing volunteer carpentry on farms in New Zealand. But for a month in the spring and two months in the fall, he lives in the same home he's owned for more than 50 years.
John and his beloved (but beat-up) boat.
“J.D.!” he beamed when he saw me standing there with my motorcycle helmet under my arm. “What the hell are you doing here?”
“I saw your used minivan in the carport, so I thought I'd stop in to see how things are going,” I said. He invited me in to sit with him at the kitchen table. “How are things?” I asked. And we began to chat.
What John's been up to
“I'm sad that Kris's co-worker was transferred to Bend,” John said. “She was a great roommate. I liked having her here. I liked how she took care of the yard. But I found another gal who's going to move in next week. She's a truck driver, and I think she'll be handy to have around.”
Even though John is a millionaire, and even though he owns his home outright, he still prefers to live with a roommate. For one, that means somebody's around to take care of the place as he's gallivanting across the globe. For another, it brings in extra income. He doesn't charge much for the place, but because he spends very little, it's enough to pay for most of his personal pleasures. The modest rent is a win-win for both John and his renters.
“I was giving the new gal a tour of the place,” John said. “She asked me how to reach the top shelf in the kitchen cupboards. ‘Like this,' I told her, and I pulled out the bottom drawer to act as a step-stool. She seemed surprised, but I told her I've been doing that for 40 years!” He laughed at the thought of it.
We talked for a while about John's boat. In a couple of weeks, he'll drive up to Seattle to prep Prime Time for the summer. Then he'll make the slow way north to Petersburg in southeast Alaska.
“My girlfriend's brother worked on a boat,” I said. “He was chef on a yacht. They spent time in Alaska and in Costa Rica. When I saw Doug at Christmas, I told him how you'd taken us to the hot springs on Baranof Island. He knew the place. I showed him video of the spot, and he loved it.”
We talked about whether Kim and I would ever join him for a week in Alaska. I said we might. I explained that recently she and I have been toying with the idea of buying a used RV, driving it around the U.S. and Canada, and then selling it when we're finished. John nodded. “That's a smart way to do it,” he said. “My son did that and ended up selling his RV for $1,000 more than he'd paid for it!”
What I've been up to
“So, tell me what you've been up to,” he said. “I haven't seen you since you got home from Ecuador.”
“Well, I've spent most of the last six months on a new project,” I said. “It's a guide to managing your money in the same way a business would.”
John looked puzzled, so I tried to explain.
“You see, I think that most people understand that a business has to make a profit to survive. Profit might not be the purpose of a business, but it's the fuel that allows a business to pursue its goals. But most people don't realize that the same idea applies to their own money. With this project, I'm trying to get people to act as the chief financial officer of their own life.”
“That's a neat idea,” John said. “Will this be a book or something?”
“Not really a book,” I said. “We're calling it a guide. And it's all online. I just finished editing the 120-page book portion of the guide yesterday. But there's also a year-long email series, 18 recorded interviews with financial experts, and all sorts of other stuff. It's been a lot of work to pull together. In fact, I ought to be working on it now instead of talking to you.”
Be Your Own CFO is nearing completion! We plan to launch on April 22nd.
John made me promise to send him a copy when I'm finished. I'm curious to hear what he has to say about it. He's been one of the biggest evangelists for Your Money: The Missing Manual, handing out copies to his friends and family and berating the local bookstore when they don't have it in stock. (John's support means more to me than any other endorsement, actually.)
Stock market or bust
“Say,” said John. “I'm finally back over a million bucks again. Boy, isn't that something?” For a few years, his balance had dropped due to the market crash and because he's been giving money to his family. (For instance, he paid off his grand-daughter's student loans.)
On a whim, he pulled up the Fidelity website to check his numbers. “Will you look at that?” he said. “I lost $4,000 today.” He laughed.
“Don't you worry about the ups and downs of the stock market?” I asked.
“Hell no! It'll go up $8,000 tomorrow. I'll tell you what. I was talking with one of those young guys at Fidelity once and he told me he'd never met anyone like me. ‘What do you mean?' I asked. ‘Well, you don't worry about your investments,' the guy said. And I don't. I set them up the way I want them and then I ignore them. I let them take care of themselves.”
He paused to think for a moment.
“You know, the last guy at Fidelity had me move my money to something more conservative. It was something like a 50-50 split between stocks and bonds. Fifty-fifty! Screw that. I've had too good results at the high-risk end. I moved it back. I made over $90,000 from my investments last year. That's more money than I made when I was working!”
He grinned at the thought of it.
Quite a character
“Well, I should be going,” I said. “It looks like Kris and her boyfriend just got home.”
“I saw that Kris is remodeling her kitchen,” John said. “She told me she's putting in granite countertops. I don't know about that. That's a good way to chip your dishes. I've had the same fricking Formica countertops for 40 years, and they work fine.”
I picked up my motorcycle helmet and moved to the door.
“You should come back next month,” John told me as I was leaving. “The cherry tree will be full of fruit and you're welcome to pick whatever you want. Just hack off the branches and let them fall to the ground.”
“I'll do that,” I said, remembering how Kris and I used to pick cherries and apples and grapes from his property. (She still does.) “Meanwhile, you have fun in Alaska. I'll see you in September.”
I walked across the street to see Kris and her boyfriend. He was hooking up a new air compressor and Kris was getting ready to paint the kitchen. When she and I bought the house 10 years ago, she'd bemoaned the state of the kitchen. Now, at last, she's found the time and the money to mold it to her image. She and her boyfriend have put down a new linoleum floor, are installing a built-in dishwasher (replacing the 30-year-old rollaway model we inherited with the house), and replacing the countertops. But they're keeping the 90-year-old metal cabinets. “I like them,” Kris said. Her boyfriend shook his head; he thinks they're a pain in the ass.
Kris's kitchen remodel is nearing completion!
“John doesn't think you should install granite countertops,” I told her. “He says you're going to chip your dishes.”
She laughed and shook her head. “John,” she said. “He's a character.” Yes. Yes, he is. But I'm glad he is. And I'm glad I've known him for these past 10 years.
John is a great example of how to have a healthy relationship with money. One of these days — and it won't be long — I'll fly to Alaska with a video camera. While we take Prime Time out to catch halibut and salmon, I'll ask John about his financial philosophy. How did he become a millionaire? That ought to make for entertaining viewing.