Finding Hope In The Bleakest Of Situations

This guest post from Sam is part of the “reader stories” feature at Get Rich Slowly. Sam writes at Financial Samurai and is one of the esteemed colleagues with whom I'm exchanging ideas this weekend at the second annual Financial Blogger Conference. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.

At the age of 35, I engineered my layoff. For 13 years after college, I spent on average 50-60 hours a week working in finance. I would get in at 5:25am and often stay until 7:30pm just so I could partake in the free cafeteria buffet my company provided. Living in New York City for two years hardened my determination but softened my belly.

I enjoyed the ride immensely, even after the dotcom collapse in 2000. Every one of us thought we were brilliant traders until the tide went out. At least my friends and I were poor then, and didn't have much to lose. The economy and the markets recovered from 2003 to 2007, but then the housing bubble began to burst in 2006, leading to the financial crisis of 2008-2010.

In 2009, I lost about one third of my net worth, despite having diversified like crazy. I had 35% of my net worth in 4-4.5% yielding long-term CDs, 35% of my net worth in stocks, and another 30% of my net worth in real estate which consisted of my primary home and two rentals. Oops! With real estate and the stock market taking a beating, I started to curse the world. How could I do everything right and still lose so much money? I kept asking myself. I was depressed that after all those years of saving and investing, I could lose so much in so little of time.

The answer, as it turns out, is that I didn't do everything right. If I did everything right, I would have sold all my stocks and property at the end of 2007 and went 100% cash. If I was super smart, I would have not only sold everything, but shorted everything via electronic traded funds as well! Alas, I didn't have the foresight to see how absolutely miserable things would get.

Doing Something Right
Ironically, one of the things I did do to cope with the pain of losing hundreds of thousands of dollars was start Financial Samurai, my personal finance blog, in the summer of 2009. I began to write to extinguish the mental anguish that I had been experiencing. I wanted to connect with other depressed souls who had saved aggressively and invested “wisely” all their lives, only to see their hard work VANISH in mere weeks.

I was angry at the government for taxing us to death, and bailing out big businesses. I was angry at politicians for abusing their power and saying one thing while doing another. I hated how small late payments destroyed credit scores given corporations had no more leniency since they were worried about their own survival. For example, my credit score got crushed by 100 points because I didn't pay a $8 bill to my utility company that my tenants were supposed to pay! Most of all, I was disappointed in myself for being so stupid as to think stocks and property would continue to rise in a steady fashion forever.

Writing an online journal helped me cope, and participating in blogs such as Get Rich Slowly (commenter since 2008) helped me realize that I was not alone. With friends losing their jobs left and right, I found a community of the best personal finance blogs on the web whom I could relate to, and trade ideas with. I slowly began to forget about the financial losses and focus on the things that I could control, which was my own outlook on life. Pretty soon, I began to make friends online and the economy started to recover once again.

The economic crisis of 2008-2010 in retrospect, turned out to be one of the biggest blessings in disguise!

A Changed Man
Before 2008, I planned on buying as many rental properties as possible. After all, property had been going up every year for a decade before, and money is just a medium of exchange. I wanted to own hard assets and not just keep money tucked away in a bank account that I'd never see!

I still feel that over the long term, property is a wonderful asset class whose true value is the cash flow generated from rent, or the rent you don't have you pay once you pay off your mortgage. Furthermore, property can be passed down from generation after generation and always provides a place for people to live. With the asset class still down, and homeowners able to refinance their mortgages at record low levels, I should be buying more property.

That said, I'm all about simplifying life now. I no longer have the patience to fix something when broken. Having to host an open house and pray that my tenant won't be a psycho killer isn't on top of my priority list. Finally, I abhor paying the ever rising property taxes of San Francisco when we get so little in return.

The life of a landlord is no cherry pie. Even if I could hire a property manager to do all the work for 10% of profits, it would still take too long for the returns to be deemed worth it. I don't want to lock up hoards of capital in an asset that could burn to the ground. Instead, I want to focus on doing work with low overhead, and more importantly, low maintenance.

I never sought to make money from Financial Samurai, just like how JD never thought he'd be able to sell his site and become financially independent from GRS five years after inception. My personal finance blog was there to connect with others and heal my own soul. Losing a third of my net worth literally meant losing about 3-4 years worth of living expenses since I had about 9-12 years of living expenses saved up by then!

But, by the time 2011 came, my readership had grown to over 100,000 pageviews a month, and I was actually starting to make a decent minimum wage income online! The stock market rallied over 100% from its lows, and we are finally seeing signs of strength in the real estate market with rents skyrocketing, at least here in San Francisco.

The Happiness Change
Whenever you start gaining momentum, do whatever you can to keep the ball rolling. Get out of your own way if you have to and protect yourself from yourself. Just don't kill your progress! I started to believe in 2010, after saving over 50% of my after tax income for 11 consecutive years after college that maybe, just maybe I could retire early and do whatever I want.

With this belief, I began to plan my escape by:

Step 1: Optimizing the budget framework and see where I could save money and still be happy.

Step 2: Raising my after-tax savings rate to 70% from 50% to get myself used to living on less.

Sept 3: Diversifying my assets so that in case the world goes back into a recession, I wouldn't lose as much.

Step 4: Increasing my commitment to writing online by promising to produce at least three articles a week.

Step 5: Figuring out how to engineer my layoff so that I could leave my job of 10+ years with something in my pocket.

In just under two years, I finally took the leap of faith and announced my retirement in early July, 2012!

Retirement Means Different Things to Everyone
My definition of retirement is doing what I want, when I want, and not worrying about money. Retirement means financial independence. I don't think I will ever completely stop worrying about money, but I know I can now come and go as I please and report to no one. I didn't hate my job, I just didn't love it like I once did for the first 5-10 years after college. After a while, everything gets a little stale, and I believe it is healthy to do something new.

In “retirement,” I plan to see more of the world, spend more time with my parents and sister, and discover what it is I truly am here on this Earth to do. I believe all of us have the ability to do a multitude of things and encore careers are the norm. It's just that many of us don't try because we get comfortable in our ways. I was way too comfortable at my corporate job and was no longer challenged. I knew I had to do something new in fairness to my company, and ultimately to myself.

One can't help feel the entrepreneurial spirit living here in San Francisco. With Twitter, Dropbox, Airbnb, Quora and a host of other startups all clustered in this region, it's hard not to want to join or create a startup yourself! I'm going to see if there's a startup company that might be a good fit for me to join. In addition, I plan to write more, building my online consulting practice, and write more books.

Whether I succeed or fail is secondary to my goal of just trying. I didn't want to look back on my life and regret not having tried doing something new, or building something on my own. There's a lifetime to make money, but there are only so many shots one can take before the chamber runs out.

Without the financial crisis, I would never have started Financial Samurai. Without Financial Samurai, I would never have challenged myself to learn about the online world. Without ever learning about the online world, I would never have had the guts to engineer my layoff at the age of 35 and be free.

There's always hope in the worst situations. We just need to recognize opportunities when they arise. It's easy to just give up and curse the world for our misfortunes. The pain of losing so much money, and ultimately time was almost unbearable in 2009. But everything comes back and often times even better than before!

Sam Dogen is an optimist who slices through money's mysteries at Financial Samurai. His mission to help readers build wealth through multiple asset classes while empowering readers to take control of their own financial well-being. Sam is also the founder of the Yakezie Network, the web's largest collaborative network of personal finance and lifestyle bloggers.

 

More about...Planning, Psychology, Retirement

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
99 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Nicole
Nicole
7 years ago

Funny about Money runs an editing business called The Copy Editor’s Desk. http://www.thecopyeditorsdesk.com/ She would be a great hire to clean up inadvertent grammatical errors that jar the reader, among other editing tasks. And I bet she would like doing so better than she likes adjuncting as her side-job.

Kris
Kris
7 years ago
Reply to  Nicole

Sometimes the comments at GRS are valuable – and sometimes they are not. This is a finance blog. I read the comments for their finance content. Do you really think people are interested in reading your thoughts on the grammar errors?

I could be wrong – maybe people are interested. Did you write that comment for the GRS audience?

You pay nothing to visit this site. If you truly want to help – send JD or the writer an email message offering whatever help. Don’t be the first commenter and not comment on the actual content.

Elizabeth
Elizabeth
7 years ago
Reply to  Kris

I have written to GRS a couple of times in the past about an error messages I keep getting. No one has ever responded. I know that the folks at GRS are busy, but the problem still hasn’t been addressed several months later.

I agree that these issues are best handled in a less public forum, but I can’t fault Nicole for speaking up when it seems GRS staff respond to comments but not emails.

J.D. Roth
J.D. Roth
7 years ago
Reply to  Elizabeth

Elizabeth, what error message do you keep getting?

Elizabeth
Elizabeth
7 years ago
Reply to  Elizabeth

@J.D. — thanks for the response! This is the message I keep getting:

Internal Server Error – Read

The server encountered an internal error or misconfiguration and was unable to complete your request.
Reference #3.55f4f748.1347233165.3fae5b3

It happens anytime I try to comment using Safari, and sometimes using Firefox. I access GRS via different devices so I don’t think it’s my computer.

Samantha
Samantha
7 years ago
Reply to  Kris

Yes, people care. It takes us out of the article – it’s jarring, as Nicole said. I think her comment is very useful. There are comments complaining about typo’s and grammatical errors on here all the time, and either no one from the site answers, or other commenters jump on the one who pointed out the mistake. Apparently some people don’t notice the errors, and I guess it would be annoying to read a comment about something you don’t notice. But the frustration that you feel about a comment on grammar is the same frustration some of us feel reading… Read more »

Ramblin' Ma'am
Ramblin' Ma'am
7 years ago
Reply to  Samantha

Is this a good time to mention that the Reader Story pitch itself says, “Want submit your own reader story?”

That has been bugging me for a while.

Ru
Ru
7 years ago

Always make me laugh when North Americans say they are being “taxed to death”. Try living in Europe! Sales tax in the UK is currently 20%, and income tax and national insurance take as much as 40% out of your paycheck. But I enjoy having access to quality healthcare without worrying about bankruptsy. I felt the title of the article was misleading. “The bleakest of sitations”? Really? Yes, losing 1/3rd of your net worth is pretty bad, but you admitted that you still had years of living expenses saved up, and a job. It’s not like you were ill, uninsured,… Read more »

MamaMia
MamaMia
7 years ago
Reply to  Ru

Agreed. Calling these the “the bleakest of situations” is just plain insensitive to the many, many people who’ve lost more, or who are starting with less. A little empathy for the typical GRS reader goes a long way.

Financial Samurai
Financial Samurai
7 years ago
Reply to  Ru

I’m not sure if it’s optimism, or whether we have short memories, but the 2008-2010 time period was VERY bleak in my mind for a lot of people. I’m describing the economic landscape with my title, and the way my mind was churning at the time. Yes, even in this scenario, I realize compared to much of the world, things are not that bad. An that is what I discovered as I wrote in my post as I decided to focus on what I can control. Just being born in the US puts us in the top percentiles of wealth.… Read more »

Tracy
Tracy
7 years ago
Reply to  Ru

I understand different philosophical stances on taxation, but the idea that Americans are suffering most of their woes due to high taxes is silly IMO. Tax rates are at their lowest since the 50s (yes, even for the middle class). Likewise, pretty much all consumer goods are considerably cheaper now than they were back in Ye Goode Olde Days. The problem is that wages have stagnated or dropped, at the same time that three essential categories of spending (housing/education/health care) have risen faster than the rate of inflation (much faster). ETA: there are two of us Tracys posting. I think… Read more »

Tracy
Tracy
7 years ago
Reply to  Tracy

Replying to myself…looks like I’m the newer one LOL. I’ll come up with a different handle for any future posts. The Other Tracy or something like that.

tracylee
tracylee
7 years ago
Reply to  Tracy

Hi Tracy! I’ve been around for awhile but don’t post a lot. You are welcome to post as Tracy – I’ll be tracylee from now on.

Lance @ Money Life and More
Lance @ Money Life and More
7 years ago

I really liked reading this side of the story from Sam. I’ve been reading his blog for a while but this is the first time I’ve seen it all in one place and saw the whole story. What he has done is amazing and I only hope I can be anything like it one day with my blog.

Anne
Anne
7 years ago

Does anybody else get the feeling that some commenters are just trying to get their blog name out there?

Derek
Derek
7 years ago

Ive also followed Sam’s writing. I must say this is a very encouraging post. Being able to read your story like this. You are only 5 years older then me and you are retired, how crazy is that!

Going through hard times in life always seems to have a point to it. I’m currently going through some hard times now.. guess I have something to look forward to. I’ll see what good comes out of it! Life takes hard work, setting goals and gaining knowledge and wisdom from people like Sam or JD.

Pauline
Pauline
7 years ago

Congratulations Sam for retiring so early! I have recently started reading your blog and enjoy it greatly. You have a similar vision to mine about financial independence and retirement. Keeping the motivation and never giving up is very important, although like Ru I agree that you have always been way ahead financially and as bleak as it may have seemed, it was not foreclosure hardship and the like!

Kiernan
Kiernan
7 years ago

Sam, did your stocks not recover their value by 2010/2011? Or had you sold them? My accounts also lost 1/3 of their value in 2009 but two years later they had regained that and more.

Sam
Sam
7 years ago

@Ru You are right about taxes in Europe vs the US. I just got back from Amsterdam and around the region for 2.5 weeks this past Monday. You will enjoy the post “I’ve Seen The Future And It Looks So Bright” on my home page. @Pauline One person’s hardship might be another person’s vacation. At the time, I thought I was going to get fired and lose it ALL, thereby wasting all those years slaving away. I could have emphasized more pain in my post, but didn’t want it to be a pity fest. @Kiernan Yes, my stock portfolio has… Read more »

Sam
Sam
7 years ago

@Nicole – Shoot, does this mean I blew my shot at writing for the NY Times? At least I tried. Thx @Kris!

MB @ 12 Year Career
MB @ 12 Year Career
7 years ago

I can totally relate to your feelings about your career after the first 5-10 years. I don’t hate my job, but I can’t imagine myself doing it, or anything for that matter, for the next 40 years. I want to experience so much more than a single career path in my lifetime.

Charles
Charles
7 years ago

>In 2009, I lost about one third of my net worth, despite having diversified like crazy. I had 35% of my net worth in 4-4.5% yielding long-term CDs, 35% of my net worth in stocks, and another 30% of my net worth in real estate which consisted of my primary home and two rentals. Oops! Oh FFS. You worked in Finance in NYC. You drank the Kool-Aid and it was poisoned. You were part of the industry that engineered the destruction of the economy, and wailed when your imaginary profits vanished. You are the 1%. Let me tell you how… Read more »

Marla
Marla
7 years ago
Reply to  Charles

That isn’t the 1%. By definition the 1% are the mega-rich, not the middle class workers trying to save money. He’s writing for his audience, and by doing so he isn’t putting less value to your situation or putting you down.

I don’t understand why there are so many comments from the “you don’t have it hard enough so you don’t have anything to say” camp. The message here is pretty clear and applicable across the board, so I don’t know why people aren’t picking up on it.

El Nerdo
7 years ago
Reply to  Marla

@Marla I think the protest (I’m not making it, but I think I understand it) has to do with calling it “the bleakest of situations.” It’s not like he was a schizophrenic homeless cancer patient who was denied a cure. He was well-off and took a hit like everyone else, was able to course-correct and do well for himself again, which is a nice story of overcoming setbacks, but it’s not One Day in the Life of Ivan Denisovich (that’s my go-to book for coping with actual bleak situations). For REAL bleak situations, therefore, my thought is “abandon all hope… Read more »

MamaMia
MamaMia
7 years ago
Reply to  El Nerdo

This is why I love your posts, @El Nerdo.

Josetann
Josetann
7 years ago
Reply to  El Nerdo

Yes…I know many who would just LOVE to have their whole life as good as his bleakest period. “Oh nos, I’ve lost tens of thousands of dollars and only have many tens of thousands left in my retirement accounts! The multiple houses I own dropped in value. Woe is me!” No, I don’t know his exact circumstances…but that’s basically how it’s reading. Seriously…this is the bleakest of situations? No…maybe it was a bit depressing, maybe things looked a bit bleak…but I guarantee it’s not the bleakest. You had money. You had a house to live in. You had food to… Read more »

Babs
Babs
7 years ago
Reply to  El Nerdo

IVAN DENISOVICH! I haven’t thought about him in years. Living in the gulag in the dark, cold, Siberian winter eating fish eyes. That will adjust your misery meter all right!

Financial Samurai
Financial Samurai
7 years ago
Reply to  El Nerdo

I’m not sure if it’s optimism, or whether we have short memories, but the 2008-2010 time period was VERY bleak in my mind for a lot of people.

I’m describing the economic landscape with my title, and the way my mind was churning at the time.

Yes, even in this scenario, I realize compared to much of the world, things are not that bad. An that is what I discovered as I wrote in my post as I decided to focus on what I can control.

getagrip
getagrip
7 years ago
Reply to  El Nerdo

To me it’s the title, not just a poor choice, a horrible choice. “Bleakest of situations” to me is like when my friend was diagnosed with a rare and aggressive form of cancer in late 2008 Even as he suffered the affects of the cancer and the treatment he had to constantly fight with his office while they tried to find creative ways to fire him to get him off their insurance rolls. This at the same time he’d watched his carefully grown assests plummet in value at the point he and his family needed them most. Then he got… Read more »

Josetann
Josetann
7 years ago
Reply to  Marla

“That isn’t the 1%. By definition the 1% are the mega-rich, not the middle class workers trying to save money.” I thought by definition the 1% were the ones better off than the other 99% of the population. Now, for every person like the the OP, are there 99 people (on average) who are worse off? In the town I’m originally from, I’d say he would be in the top 0.5%, maybe even higher. Across the whole US…I dunno, maybe he’s not the top 1% but he’s gotta at least be in the top 5%. “I don’t understand why there… Read more »

Clint
Clint
7 years ago
Reply to  Josetann

Cripes, it’s just a title, people! When did we all become so easily offended? Does a guy have to lose his house and be at death’s door before you can take just a little something away from his story?

Bleakest of times? Why I never! Cancel my subscription immediately!

Wait, you’re saying all these interesting stories are free?

Why I never! Cancel the internet!

Kevin
Kevin
7 years ago
Reply to  Charles

Dear Charles,

I’m sorry you made so many poor choices in life. I sincerely wish someone had taken you aside when you were young and told you that choices had consequences.

BD
BD
7 years ago
Reply to  Kevin

Kevin,
You do realize that some people are in dire situations through no fault of their own, right? A person can make all the right choices in the world, have been a straight-A student, kept their nose clean, worked hard, been frugal and saved what they could their entire life, and STILL end up in misery, due to long-term illness, undiagnosed mental problems, accidents, and careers that suddenly drop out and disappear from underneath them at the worst times (in their elder years).
I know this all too well.

Financial Samurai
Financial Samurai
7 years ago
Reply to  BD

BD,

I hear what you are saying and agree with you.

Unfortunately, even after writing a ~1,900 word post, I havent fully described my situation as good enough to not warrant an attack.

Hence, it shouldn’t be a surprise if Charles gets attacked after his comment that lacks more details of his background.

Responses are always so interesting when guest posting on different sites.

Kevin
Kevin
7 years ago
Reply to  BD

BD, Fair enough, we know little about the details of Charles’ situation. Perhaps I should have added some qualifications to my condemnation. If you’re white, male, physically and mentally healthy, and have a net worth of $0 at age 54, then you are a failure. I firmly believe that life is only 10% what happens to you, and 90% how you react to it. I’m sure some awful things have happened to Charles. So what? Everyone endures some measure of misfortune. You can either pick yourself up and do something about your situation, or you can cry and moan about… Read more »

Tracy
Tracy
7 years ago
Reply to  Kevin

@Kevin – I hope this reply is sarcastic. Seriously – I can’t tell. I used to love GRS for the comments – lots of people supporting, encouraging, and challenging each other, J.D., and the writers. Many thought provoking comments, and I felt I learned something from the community. But this is sad. Can we have a little compassion? If the comment was serious – do you have any knowledge of Charles’ life other than his comment? You have no idea what choices he has had to make that have brought him to his current situation. Medical bills, unemployment, disability… If… Read more »

Kevin
Kevin
7 years ago
Reply to  Tracy

It’s not sarcastic. I have no patience for self-entitled whiners who blame everybody but themselves for their situation.

Life doesn’t owe you a thing. If you want something, go out and get it. Don’t sit around complaining about how “unfair” life is because someone else busted their butt and earned something you want. Jealousy is ugly and laziness is pathetic.

mrs bkwrm
mrs bkwrm
7 years ago
Reply to  Kevin

I know right? And the first mistake a lot of people make is choosing the wrong damn parents.

Lincoln
Lincoln
7 years ago
Reply to  Charles

Charles has a point. The article reads a little bit like, “Sure I’m rich now compared to most people, but I used to be only a little bit rich.” The bigger issue, for me, is that I can’t really learn anything from this particular post. I don’t have any interest in (1) starting my own personal finance blog or (2) getting a time machine and working in NYC finance in the go-go 2000’s. Remove those two pieces from the puzzle, and all the rest rings a little hollow. I’d like to hear a little bit more about the investments though.… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Lincoln

Howdy Lincoln, “Rich” is relative. I can assure you that I am poor compared to many of my friends in SF. Furthermore, I don’t have a W2 income anymore, and am therefore earn much less since I’m just surviving off my passive investments now (rental, dividends, deferred comp etc). I don’t know your financial status, age, goals, outlook, but here’s what I would do if I did not discover the online world: * Look into rental property that have been hit and yield 2X the borrowing cost if you need a mortgage e.g. 8% rental yield and 4% mortgage. I… Read more »

Ryan
Ryan
7 years ago

Sam, As a reader of this blog from 2007, and having seen JD’s path to financial independence, I can’t help but have a little bit of cynicism about what you discuss here. Please let me expound further. So JD begins a blog, helps develop an online personal finance community, increases number of pageviews, sells out the blog, declares financial independence and doesn’t inform readers at the time of his selling out. You follow same path here today…now declaring financial independence. It seems that yet another personal finance blogger has fixed their personal finances by blogging (and I suspect also selling… Read more »

Sam
Sam
7 years ago

@Charles, sorry that your car broke down. I remember every weekend during sophomore year in high school waking up on weekends to open up our local McDonald’s at 6am for $3.25 an hour. The job sucked, the manager was abusive, and I felt a little embarrassed when a female crush would walk in to order. At least I became good at cracking eggs with one hand! I knew then that I had to do some more studying so I could do something else. Taking the $4/hr job packing boxes was much better. You are welcome to blame me for your… Read more »

Charles
Charles
7 years ago
Reply to  Sam

This is how the 1% try to show their empathy. They give a speech like Paul Ryan, telling about how they worked at McDonalds as a kid.

I am sure this sounds great to your friends inside your 1% bubble.

Brent
Brent
7 years ago
Reply to  Charles

Charles,

You sound pretty angry. Just curious what life path led you to be 54 and living paycheck to paycheck. I am serious and would like to learn from you.

Also, I don’t believe that Sam is the typical financial industry type…he saved 50% and then 70% of his income.

Brent

Carla
Carla
7 years ago
Reply to  Brent

Its easier to save 50% and 70% of your income when you’re making way more than a basic living wage while single, childless and (I assume) healthy. At $11.85/hr I don’t see how that’s possible.

Financial Samurai
Financial Samurai
7 years ago
Reply to  Charles

Charlie, I was planning on voting for Obama as the future looks pretty bright (http://www.financialsamurai.com/2012/09/06/ive-seen-americas-future-and-it-looks-bright/)

You cool with that? Or are we not allowed to be on the same side?

MamaMia
MamaMia
7 years ago
Reply to  Sam

@Sam wrote, “I knew then that I had to do some more studying so I could do something else.”

WOW, was that condescending!

And THIS:

“You are welcome to blame me for your troubles if it helps.”

THIS is just a bit hypocritical given that in your article you blame the gov’t for “taxing you to death.”

Financial Samurai
Financial Samurai
7 years ago
Reply to  MamaMia

I had a 3.3-3.4GPA out of 4.0 Freshman/Sophomore year and working at MCD was a wake up call to do better my Junior and Senior year b/c I didn’t wanto to be limited to MCD. How is that condescending?

I blamed the world for my losses and stupidity, until I stopped being angry and started doing something for myself, like writing and diversifying my income further in case of another collapse. Pls explain the hypocrisy.

Thx

MamaMia
MamaMia
7 years ago

Condescending because by stating that studying hard was your key to financial success, you imply that Charles (and others who have not met with the same success) did not study hard – indeed that he’s even uneducated or undereducated. Though I don’t know Charles personally (and I’ll grant you that he seems to have a chip on his shoulder), I’m sure there are many others here who can tell you that achieving a higher education can just as easily be the key to back-breaking debt. (Where’s Honey Smith when you need her?) Hypocritical because yes, in the article you do… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  MamaMia

Fair enough, but do you think your first comment saying “wow this is hypocritical” and “condescending” is really constructive criticism?

How would you react if you got that type of response? Your second comment is constructive, but definitely not your first.

Share with me your story. Why do you think other commenters have no problem with this post?

Do you mind reading this post after you’re done answering my questions? http://www.financialsamurai.com/2012/06/23/you-will-always-be-viewed-as-arrogant-if-you-have-more/

Josetann
Josetann
7 years ago
Reply to  Sam

If McDonald’s is the worst job you’ve ever had…congrats! You’re living the high life! Trust me, there’s much worse jobs than getting paid minimum wage in a halfway comfortable environment (ok, maybe it got a wee bit hot in the summers) and all the food you could eat (when the main manager’s not around). That said, many people never work a job as low as McDonald’s, and I think it’s important to have some experience in such an area. For one thing, it’s not completely beneath you; if you’re about to lose everything you had, I’m guessing that YOU would… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Josetann

Would love to read about your worst job experiences and pay. Thx!

Josetann
Josetann
7 years ago

Worked on a farm most of my childhood, so fixing barbwire fences, bush hogging, cutting/raking hay, cold cold mornings trying to start the tractor so you can get hay out to the cows, etc. Didn’t get paid except when I cut/raked hay, then it was $1-$2 per bale (round bales…I didn’t exactly make bank). Worked at Taco Bell for a bit, that was probably one of the best “real” jobs. Barely above minimum wage. Then it was on to Tyson’s (the chicken company) doing clean-up. I forget the hours, had to be 8-10 hours of just washing chicken parts off… Read more »

BD
BD
7 years ago

Josetann, It’s funny how some people’s hardships are others’ dreams. I think you’re lucky for having been able to live on a farm at least once in your life (and as a child! Lucky!) I’ve always wanted to live on a farm as a child. I still wish I was able to live on a farm and even have to do all that hard farm-work you describe. It’d be worth it to be able to own my own chickens, horses, and goats. But, so far, it’s a dream I have not even been able to come close to attaining. (Having… Read more »

Josetann
Josetann
7 years ago

“I still wish I was able to live on a farm and even have to do all that hard farm-work you describe.” Those with money can have fun owning a farm. Because when a cow dies and has to be drug to a ditch (hooking a chain around its legs), you just call the help. Fence down, again, call the help to deal with the barbed wire (and rounding up the lost cows). Cow’s having problems giving birth and you need someone to attach a come-a-long to the calf’s feet and pull it out…well, you get the idea. But if… Read more »

Carla
Carla
7 years ago

I find it interesting how many people idealize farm life. A friend of mine grew up on a farm and it was no walk in the park: getting up at 3:00AM to deliver a sheep (yuck) and some of them died in the process, getting kicked in the gut by a cow while in the process of performing an enema on them (yes, they get constipated), dealing with the aftermath of an enema, getting chased by a swarm of bees while you’re allergic, dealing with the financial burden of sick animals, unseasonable weather, etc. Never being able to travel or… Read more »

BD
BD
7 years ago

Carla, I’m not a total greenhorn. I KNOW what farm life entails. I’m NOT romanticizing it. However, unlike most people, I don’t mind being armful up in cow fetus and goo to pull out a calf. It simply doesn’t gross me out. I’d even clean the smegma out of a gelding, or put down an animal that is suffering. I’d deal with botflies in the nose, stomach and anus of the animals, or a cow that has explosive diarrhea (word to the wise: Do NOT stand behind a cow when it is sick if you don’t want to get dirty).… Read more »

MelodyO
MelodyO
7 years ago

Ha, the tone of some of these comments makes me feel like I’m back in the good old days over at The Simple Dollar. It’s The Hunger Games around here! I really enjoyed this article, as my financial position will likely be imploding soon as well, and it’s a bitter pill to swallow when you’ve worked hard for a long time only to see the fruit of that snatched away. It’s hard to start again, but exciting too – so I’m with you on that one. I might not retire at 55, which was my plan A, but Plan B… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  MelodyO

” I might not retire at 55, which was my plan A, but Plan B is that *I’m* in control of whatever happens to me next”

GREAT attitude! That is the optimistic spirit I love!

Shilpan
Shilpan
7 years ago

Sam, your story is very inspiring to millions who are facing setbacks. What advice would you give to someone who has still not recovered from the housing bubble of 2008?

The stock market has recovered, but not all stocks have bounced. Apple commands a major percentage of Nasdaq with its market capitalization.

m
m
7 years ago

Sheesh these comments are harsh, I’m not as well off as this guy either even during his lowest point but I felt uplifted by the article and I too was an optimist after reading it. Watching years of hard work go up in smoke bites whatever your circumstance. As I’m trying to be smarter about personal finance I’m grateful that people like JD and this guy and others write articles for me to enjoy for free. Saves me from buying a book and helps me keep a positive mindset. The thing I eventually wised to is, if you resent successful… Read more »

Sam
Sam
7 years ago

@Shilpan My advice is to try and view one’s house as a home instead of an investment and try to forget about the lost equity and focus on making the best memories possible. The median homeownership duration is only about 5.6 years, too short IMO to build long term wealth. If affordability is an issue, research your state law on short-sales, foreclosures, government support, and implications for taxes and credit scores. Hopefully most people’s overall stock portfolios have rebounded. I would encourage folks to lower expectations of the markets to ~4% and work on other income generating ideas based solely… Read more »

Marla
Marla
7 years ago
Reply to  Sam

From what I understand, real estate doesn’t build wealth over the long term by itself. House values average out to 1% growth, with inflation at 3%. Of course there’s small periods of time there’s a lot of gain or loss, but that’s playing roulette.

You can build wealth through renting, but of course there’s pros and cons to that.

Sam
Sam
7 years ago

@m “The thing I eventually wised to is, if you resent successful people, its likely you’re not going to end up one; because why would you want what you don’t like? ”

That’s one of the most insightful comments I’ve ever read! Thx! I’ve failed a lot, and still have some crappy investments to work through. Money investing is hard. But, I encourage everyone to at least try!

Sam
Sam
7 years ago

@Maria – Over the log run, inflation and real estate appreciate rates are roughly the same. The benefit is on a tax shield perspective and on a leverage perspective.

A 10% increase in a property (100 to 110), after putting 20% down (20), means your cash on cash return is 10/20 = 50%.

krantcents
krantcents
7 years ago

Multiple careers is inevitable! Financial independence is an opportunity to explore and experience multiple careers. The adventure is just beginning, it is up to you where this goes. I know that is how I handles financial independence.

Untemplater
Untemplater
7 years ago

What I love about Sam is that he is a man of action and always looks at the positives. The commenters who are complaining are missing the point and obviously aren’t familiar with how much Sam has accomplished and helped people in the PF community as well as his readers. As a blogger I appreciate and have a lot of respect for fellow bloggers who openly share their personal experiences and knowledge with others. We don’t have to share our life stories and knowledge with the world, but we do because we want to help others, get people thinking, connect… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Untemplater

Thanks Sydney! Always appreciate the support! We must go to Fincon13 next year! Hope it’s in San Diego, or perhaps even SF.

Hope all is well and I’m glad you are feeling better!

Rob
Rob
7 years ago

Read a few blogs similar to his (mr Money Mustache comes to mind) and the same question keeps coming to mind. How the heck can someone save 50-70 percent of thier wage, I run a tight ship along with many of my friends and there is no way any of us can save that much!!!!

I’d love to hear on those who do that, specficly how you do that, especially when rent and utilities take up half your pay.

Rob

Marla
Marla
7 years ago
Reply to  Rob

I think half of it is priorities (if your rent and utilities take up 50%, that’s usually called being “house poor” – but some people don’t want to live in smaller, less expensive places or locations) and half of it is how much money you make (i.e. finding ways to make more money, either with side businesses or a different job/career track).

Josetann
Josetann
7 years ago
Reply to  Rob

“How the heck can someone save 50-70 percent of thier wage” Idea’s simple. Increase your wage, keep your expenses low. Last year we were probably able to save over 70%, I never checked the final numbers though. Wife had a travel nurse contract in Fairbanks, AK that paid decent. Included housing, utilities, car allowance, etc. We did have to pay minimal utilities on our house back home (which is paid for, so it’s just utilities, insurance, and property taxes). We did splurge some…trip to Anchorage (to get our medicals done for Australia visa), bought scooter so I could ride it… Read more »

Susan
Susan
7 years ago
Reply to  Rob

I think Marla and Josetann are right, you can only lower expenses so much. After that, you have to increase the income to increase the savings. In my own financial situation, I’ve seen that maintaining expenses while saving the increases in income is the key (for me) to hitting a higher savings rate. For example, from 2007-2011 my husband and I lived off of one income in one of the cheapest cities in the Midwest. We could save 2-4% of our income, and 40-50% of our income was spent on housing/utilities and food. The rest wasn’t wasted, we used that… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Rob

Howdy mate, as others have commented, it’s about priorities.

I shared a $1,800 a month studio with another dude in NYC my first year b/c I wanted to save money (was the cheapest we could find within a 10 minute walk to work). I made around $50,000 that year and maxed out my 401K and saved several more thousand as my living was $900/month and I had free food thanks to the company. Didn’t have time to go out too much!

Julie+@+The+Family+CEO
[email protected]+The+Family+CEO
7 years ago

Sam, I appreciate your perspective and your positive attitude. Quick question re: Step 3, what changes are you making to your diversification strategy since you felt fairly diversified last time?

Financial Samurai
Financial Samurai
7 years ago

Hi Julie! Great seeing you in Denver this weekend!

Since the various income stream post , I bought some structured notes (derivatives that invest in the S&P and Dow with downside protection, but upside limitation), and plan to invest in social lending. http://www.financialsamurai.com/2012/05/07/understanding-structured-derivative-products-cdsnote-as-an-investment/

Social lending really seems attractive with returns of well over 5% for a diversified portfolio.

I also plan to continue working on marketing my book slowly. It’s a 6 month plan.

Chasa
Chasa
7 years ago

There were some commenter’s on JD’s ‘Vacation’ post that mentioned that they don’t learn anything on GRS. I agree, but I keep coming back because the soap-opera comments are addicting. The examples on this post are a good example. That being said – no one has mentioned the ‘engineering my layoff’ comments. What does that mean? Did you set yourself up to be let go? How does one do that? Does that mean you got severance? You say at one point in the article that you retired, but you used the term ‘engineered layoff’ at least twice. Sounds fishy.

Marla
Marla
7 years ago
Reply to  Chasa

It’s his version of “planning early retirement”.

Financial Samurai
Financial Samurai
7 years ago
Reply to  Chasa

“Engineered layoff” is a term I’ve coined that describes the result of a person who empowered themselves with employment rights and managed to negotiate a positive exit strategy for all parties.

Unless you plan to work until death, you will want to eventually get laid off. Don’t ever quit. There’s a big difference.

Holly@ClubThrifty
7 years ago

I think this is a great post and I think that losing one’s net worth- at any income level- is catastrophic. I don’t understand where all the negativity is coming from.

Sam, I think you’re great!

Financial Samurai
Financial Samurai
7 years ago

Hey Holly! Good to see ya here. Thanks for your thoughts.

It is ALWAYS painful, no matter what income or net worth level indeed. One can even argue that it could be more painful with a higher net worth, but not absurd net worth, b/c it might have taken longer and with more hours of work to get there.

Erica
Erica
7 years ago

Exactly. He still lost a third of his hard-earned money. While it may not have been a debilitating situation like it would be to some, I’m sure it was very frustrating, demoralizing and scary.

Although I do agree the title of this article could use an adjustment.

Financial Samurai
Financial Samurai
7 years ago
Reply to  Erica

Hi Erica,

I should have done a better job of redescribing how bleak the 2009 year was. I really thought I was going to lose everything and get fired and live at home w/ my parents.

I was hoping to connect w/ others who lost a lot during this time period share their stories as well.

S

Lincoln
Lincoln
7 years ago

I had significant “paper losses” in my 401(k) during 2008-09, but since I still have decades to go for retirement, I just viewed it as dollar-cost-averaging that would probably help me in the long-term. As such, I INCREASED my 401(k) contributions during the years the market was looking awful.

Steve J
Steve J
7 years ago

Sam,

Are you married/significant other with kids to raise or support?

Andrew
Andrew
7 years ago

It’s good to meet another financial optimist out there! I had a similar experience with the second crash of the ‘oughts’ (I wasn’t in the market back in 2000), but even as I watched my portfolio (mostly stocks) clutch its chest and gasp, I couldn’t help but think; FIRE SALE! You don’t actually lose (or make) money in stocks unless you sell. Until then, it’s all theoretical. So I took what cash I had and bought into stocks like crazy. After all, the stock market has all or mostly recovered from every single major downturn within a year or two… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Andrew

Right on! It’s more fun to be an optimist than a pessimist.

Brooklyn Money
Brooklyn Money
7 years ago

I found this post very valuable (granted I see similarities between my situation and the author, but I’m still chugging away on the 9-8 track). I don’t understand all of the negative backlash. Also, he is not the 1% (at least not from how he described himself I am guessing). From the Economist: The average household income of the 1% was $1.2m in 2008, according to federal tax data. The ultra-rich skew that average upwards: admission to the 1% began at $380,000 in 2008. The Congressional Budget Office puts the cut-off lower, at $347,000 in 2007, or $252,000 after subtracting… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Brooklyn Money

Hi BM,

I’m definitely not in the 1% with no more day job income! 🙂 But, that’s the thing, I don’t mind. The free time increase has been wonderful and worth it.

S

Financial Samurai
Financial Samurai
7 years ago

@Ryan #76, Thanks for your comment. To answer your questions, I became financially independent through 13 years of saving, investing, sweating, and taking a lot of risks. 2008-2009 slaughtered me financially, and I thought I was going to lose everything at one point. I never thought I’d be able to last at my job more than 5 years, let alone 13 years. Everything gets a little dull after a while, and I know a lot of people feel the same way about their jobs. You can read this post (http://www.financialsamurai.com/2012/04/16/achieve-financial-freedom-slice/) where I highlight my investments and passive income streams. I… Read more »

Kathleen @ Frugal Portland
Kathleen @ Frugal Portland
7 years ago

Best of luck — and kudos for having a thick enough skin to post here at the shark tank!

Financial Samurai
Financial Samurai
7 years ago

Ahh, my skin as as thick as an elephant’s butt! I love everyone’s thoughts!

Jay
Jay
7 years ago

I’m willing to bet not everyone reading this blog worked in finance for 13 years playing with other people’s money nor was able to accumulate those kinds of numbers in about 10 years time. If I’m doing the math correctly, in the span of 9 or 10yrs you were able to accumulate at least 600k (College grad at ~22yo, working 13yrs takes you to 35) you lost hundreds of thousands of dollars quickly by ~2009) in investments – so money invested after paying your living expenses were accounted for. Those that get there, wherever “there” is sometimes forget how to… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  Jay

How is this a ‘get rich blogging’ article when 99% of my wealth is from my savings and investments?

What’s your story? Love to hear it.

Tim Murphy
Tim Murphy
7 years ago

Fantastic post. Love the author’s relentlessly positive attitude in the face of spectacular misfortune. Sounds like he took a big hit but was able to improvise, modify, adapt, and overcome. I really dig stories like this because it requires a toughness that, frankly, few people have.

Truly inspiring – thanks a ton for writing.

Tim Murphy

RJB
RJB
7 years ago

I only scanned the comments, but two things are unclear to me. First, if you retired at age 35, how are you paying for health insurance? Are you paying for it with your savings, or are you going without? Second, I fail to understand how the collapse of the housing market directly affected you. Granted, if you were about to sell your own home, or one of the rental properties, then yes, that’s a problem. But if the rentals were paying for themselves, who cares what their market value would be? And if you were comfortable in your own home,… Read more »

Financial Samurai
Financial Samurai
7 years ago
Reply to  RJB

Hi RJB, Health insurance is pretty cheap if you check online. A single health 35 year old can get HI for $350/month for example. There are a lot of issues. Check esurance or somewhere. As part of my severance, I have health care for a specific period of time for free. It is great, and something one gets if they get to engineer their layoff or just get laid off. You don’t quit, you get nothing. One of my properties is sucking wind. So yes, it is only a paper loss, but it is psychologically a painful loss and does… Read more »

RJB
RJB
7 years ago

OK, that works well for a single 35-year-old. However, you won’t stay 35 for long. At some point, you’ll be 50, 55, 60. The rates might not seem so reasonable anymore for a person that age, and the benefits from your former job would have ended long ago.

Also, you may or may not still be single at that time. Let’s say you’re not. Now there are health insurance costs for your spouse, and for your children if any. How would those be covered?

Financial Samurai
Financial Samurai
7 years ago
Reply to  RJB

Yes, we all grow old, and then that’s the end of life. I fully expect health insurance costs to go up. For $1,500 a month, you can get coverage for a family of four with two kids.

The secret to coverage is to just pay more for coverage. I’m not quite sure what the deeper meaning is that you are asking.

Perhaps you want to read this post to have a better understanding of my current income streams.

http://www.financialsamurai.com/2012/04/16/achieve-financial-freedom-slice/

Thanks,

Sam

Lucille
Lucille
7 years ago

I don’t see any of this as “bleak”. These are just life lessons. I’m not sure you’ve really dealt with adversity. Perhaps prosperity doesn’t ride well with humility.

shares