Two Things About Personal Finance I Realized Very Early

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I have always been attracted to the topic of personal finance as far back as I can remember.

As life evolved and as I went through certain experiences, the love for personal finance grew, evolving into more sophisticated topics in finance and eventually entrepreneurship.

Of course I believe the two can be very much interrelated, especially for an aspiring entrepreneur, or one who already is one. In my own life’s experience, I learned two things quickly about personal finance.

I realized that learning and applying basic principles in personal finance were not going to cut it if I wanted to achieve MY goals and objectives. I also realized that in order to be a successful entrepreneur, one must condition the mind (thought process) to think on a higher level compared to the rest of the crowd.

Limitations of Basic Personal Finance

Most personal finance blogs and websites that I have come across online do a good job of covering the basic fundamentals that our schools unfortunately do not teach our youth.  However, very few of these discuss ways to expedite wealth building and perhaps retire early without subscribing to lifestyle servitude.

There is nothing wrong or unusual about getting rich slowly over time through the age old advice of living below your means, saving and dollar cost average investing.  But that route wasn’t for me.

I was not willing to subscribe to a life of mediocrity at best, hoping for the markets to cooperate and for me to be alive at 65 to enjoy the few remaining years of my life.  I was not OK working for 20 to 30 or more years only to hope to enjoy an average retirement at best.

I decided very early that Corporate America was not for me in the long run.  I was therefore more interested in advanced topics in personal finance, ones that went beyond just setting up retirement plans, employer match on 401k and getting out of debt from an education perspective.

Basically, I found most topics in basic personal limiting or restricting in many ways for someone who wanted to get rich quickly (not slowly) and retire early (at least in the traditional sense of the word retirement). And yes, there is such a thing as get rich quickly.

As a result, I started reading about business and finance on a larger scale, such as studying the economics, successful companies, how money works, banking, and so forth. Reading such material expanded my perspective and gave me ideas about how I can apply some of that education in my own life.

Adapting a Macro Level View

A broader perspective of business and finance helped me see the bigger picture.  Rather than simply executing on the basics, I started contemplating ways to increase the top line. I became more of a planner, a strategist more so that an executor.

It is because of that broader macro level view of the “world” that I was able to start thinking and acting more like an entrepreneur.  This shift in mentality, coupled with execution of basic personal finance fundamentals is tactically why I consider myself successful and far ahead of most who are my age.

With that said, I don’t consider myself a personal finance guru by any means, but I know enough to generate, grow, manage and protect wealth, just as good as anyone else I can trust.

Over the years I have made an effort to learn, understand and practice some of the more complex areas of personal finance.  For example, owning real estate under an IRA to legally avoid taxes is an excellent way to propel your riches. Reducing your effective tax rate as much as possible is another.

I am also not saying that there is anything wrong with the tortoise’s approach to slow, steady and guaranteed road to financial security. In fact, most people that reach a level of financial security do it this old fashioned way.

I am all for the Tortoise method, but if you want a bit more out of life and separate yourself from the crowd, you have to start doing some things different from the rest of the them.

Readers: Have you decided to follow the tortoise’s path? Or have you chosen to expedite your journey and reach your destination sooner?  Why did you choose what you chose?  Do you think you will switch gears at some point? Why?

Sunil
Expediting Growth

15 Responses to “Two Things About Personal Finance I Realized Very Early”

1. Kevin says:

   November 7, 2011 at 2:58 pm

   I think the Tortoise method is perfectly fine, as a backup plan. There is nothing wrong with taking risks on top of that so long as they don’t jeopardize the plan. I think you’ve quite right about needing to be willing to branch out and be a bit different. The results may just pay off!

   Reply
   • Sunil says:

     November 7, 2011 at 6:27 pm

     I look at things the same way Kevin. There is the path of norm that which every financially responsible individual walks on and there is another path – the fast lane – which one can also be on

     Reply
2. Romeo says:

   November 8, 2011 at 2:28 pm

   Oh, man. I, too, am not looking to get rich slowly. The very though of hoarding away $16,500 yearly in an IRA, that I can’t touch for another 30 years, is depressing. I wan’t that money to go to use today. This is why I’m experimenting with real estate. I would love more money making, passive income ideas. Maybe I should learn how to market my book better. I think I’m sitting on a Goldmine but am unable to uncover the gold. *sigh*

   Reply
   • Sunil says:

     November 8, 2011 at 7:13 pm

     Romeo – tell us more about your book. Where are you selling / marketing it and how? Slow and steady is certainly not the only way you are right about that. Have you considered making money online? If so how are you attempting to do it?

     Reply
3. Ash @ Sterling Effort says:

   November 8, 2011 at 2:57 pm

   I think you’ve put this perfectly. I certainly don’t want want to save my whole life just to enjoy a mediocre existence in my old age. That said, I do take care of my money. I’ve been hoarding it for the last few years and investing heavily. I’m building a position that will let me quit my job and work on my own projects full time.

   Reply
   • Sunil says:

     November 8, 2011 at 7:14 pm

     Welcome to the blog Ash. Your approach is a good one and one that many aspiring entrepreneurs engage in as well. Would love to hear more about your intentions?

     Reply
4. Hard Boiled Greg says:

   November 8, 2011 at 8:06 pm

   I attended university right out of high school, got an economics degree and began a career with a major Canadian bank. Fifteen years later I was managing my own branch, but I found my self in the corporate rut you describe in this article. So I quit.

   It was scary for sure, I mean I had a decent salary and a good pension, but no freedom to really live and enjoy any of it.

   My parents had a hard time understanding as you just don’t give up that type of financial security no matter how miserable you are.

   It ended up being the best decision I’ve ever made. Certainly there have been obstacles, but I truly feel I am living life unencumbered while still being young enough to enjoy the experience.

   HBG

   Reply
   • Sunil says:

     November 9, 2011 at 5:15 am

     Welcome to the blog HBG. What did you end up doing after you left the banking career? How did you prepare for it? Or did you not? I am interested in the evolution to date.

     Reply
     • Hard Boiled Greg says:

       November 9, 2011 at 5:57 am

       Thank you for the welcome.

       I had always been interested in tech. So many times in my career, I caught my self-saying “if I could only do it over again…” But once you get on the treadmill of a good job and regular paycheck it is hard to get off. Even if it is not what you are passionate about.

       I discovered John Chow and began dabbling with niche websites. A few were picking up momentum and I ultimately reached a point where I said to myself “I know I could make a go of this if I did it full-time”.

       There are no guarantees and it hasn’t all been smooth sailing since I quit, but I love what I do now (Internet marketing) and I look forward to each and every day instead of dreading them. Additionally the nature of the work allows me to live a lifestyle now, that many toil away their entire lives to only achieve at retirement.

       Take care,

       HBG

       Reply
       • Sunil says:

         November 9, 2011 at 9:19 am

         Greg you are a lot of what this blog stands for and I am glad to have you here. I am looking forward to interacting with you more here.

         Spent some time on the HBG – Your blog is fascinating –

         Reply
         • Hard Boiled Greg says:

           November 9, 2011 at 9:32 am

           Wow Sunil, what a generous compliment; thank you so much for your kind words. I look forward to interacting with you more as well.

           Reply
5. Sylviane Nuccio says:

   November 9, 2011 at 3:06 am

   Good point Sunil. The truth is that school doesn’t teach much about money, does it? I can’t say that a single wealthy person I know has learned the secrets of money there and, very few people will ever get rich in Corp America. That’s not for me either 🙂

   Reply
   • Sunil says:

     November 9, 2011 at 5:18 am

     Some schools are getting better about it but for the most part you are correct. Corporate America has a lot of good to be said about it and many do get rich if they toil overtime within, but there are certainly other options outside of that.

     How long ago did you leave corporate? What do you do now?

     Reply
6. Evan says:

   November 9, 2011 at 12:59 pm

   I think I follow Kevin’s approach – I am in the middle. It is nice to have the back up plan (401k DCA type stuff) but I see my path much different then the standard. Will that play out? Not sure but I sure as hell hope it does.

   Reply
   • Sunil says:

     November 9, 2011 at 2:56 pm

     You’re right Evan – a lawyer’s salary is not a bad paycheck to take home at the end of the day 😉

     Reply