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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 744140  
Subject: Net Worth Tracker (and a Shocking Confession) Date: 2/17/2007 7:27 PM
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I have posted a Monthly Net Worth Tracker spreadsheet that I created on my website:
http://www.madcapitalist.com/tools.htm

The Importance of Net Worth
I think net worth is the key metric to focus on in the quest to achieve financial freedom and to maintain it once you have achieved it. Net worth is simply assets minus liabilities – what you own minus what you owe. It is the bottom line of your personal balance sheet. Your current net worth reflects the results of all the decisions you have made over the years that affect you financially, and your future net worth will also reflect the decisions you make now and in the future. Your net worth reflects many other financial metrics all in one place. It reflects the results of your savings rate as well as your investment rates of return. Your change in net worth is your net income. By focusing on your net worth, you can determine how all your decisions fit together to determine your overall financial performance and overall financial condition.

Net worth management is really about life management, because not only does your net worth reflect the quality of your financial decisions such as investment and financing decisions, your lifestyle decisions are also ultimately reflected in your net worth. Your lifestyle decisions determine how much you spend and how much you will work and earn. Your decisions about the type of career you wish to pursue will also obviously be reflected in your net worth.

My Story – How My Life Has Changed Dramatically
I have really been focusing on my net worth since December 2004. Actually, I have been tracking my finances using Quicken since 1995, but it wasn't until December 2004 that I began to really get focused on my net worth. I had made many attempts to create budgets for myself, but I never stuck with it. It is easy to track your spending and income in Quicken, so I have continued to do this since 1995, but I found that I really wasn't using the information. I still wasn't really paying attention to the information that Quicken so neatly summarized.

Then something happened in December 2004 that changed me forever. I hit financial rock bottom. This is something that I have never admitted publicly before. I was loaded down with credit card debt, and for the first time in my life, there was no way that I was going to be able to pay all my bills. This sorry state of affairs was all my fault, and I blame no one but myself. It should come as no surprise to many of you that I feel that we are personally responsible for our lives. Except for very rare exceptions, we aren't helpless victims. I have believed this as far back as I can remember, but in December 2004, the stark reality of years of stupid decisions slapped me in the face.

I have never been extravagant. I have never bought an expensive car. I don't have expensive clothes. I still have the same TV that I bought for $400 in 1996. I still have the same computer that I bought in 1999. I don't live an austere life, but it clearly hasn't been unreasonable in a material sense. So what had brought me to such a low point in my life? For me, the problem was that my income was far too inconsistent. Leaving accounting jobs after working for only a short time without having another job lined up became my modus operandi. I would get all worked up because I didn't like the way things were done. I always knew a better way of doing things, but supervisors and managers often wouldn't allow changes to the processes, even when the desirability of change seemed obvious to me. I would allow it to frustrate me until I couldn't take it anymore, and then I would put in my two weeks' notice.

After a while, few people were interested in hiring me because they didn't want to take the risk that I would quickly leave. I couldn't blame them because I would feel the same way about someone else. It was especially frustrating because my former employers invariably felt that I had done a great job (although my attitude was overly aggressive at times), and I had enjoyed some significant successes, including getting a job as a controller at the age of 30, which is a rare achievement. It got to the point that I couldn't get jobs at my experience level because people thought that I would leave, and I couldn't get jobs below my experience level because they thought that I was overqualified and just wouldn't be happy at the lower level.

In 2002, I finally decided to start my own business as an investment advisor. I didn't have any money and I already had some debt, but I figured that I could survive by working temp jobs and building the business at the same time. Unfortunately, finding temp jobs became increasingly difficult, and building the business was proving to be much more difficult than I anticipated. My credit card debt grew, and I borrowed some money from my parents to keep me going, rationalizing that I would soon be successful. After all, I had enjoyed success at my previous jobs – before I quit, that is. It slowly started to become clear that starting a business despite my severe lack of capital and my lack of a good business plan (along with my poor sales and business development ability) was a huge mistake.

My high self-confidence that developed from significant success academically, in games, in sports, and at work over the course of my life was causing me to make foolish decisions such as leaving jobs early, starting a business that was poorly planned, and accumulating debt rapidly, by rationalizing that I was destined to soon be successful as I had been at other things.

In December 2004, I had come to the stunning conclusion that I had failed dramatically! I didn't think it was possible. I'm too smart to fail, I thought. But here I was in a situation where paying all my bills was going to be impossible for the first time in my life. I finally decided to suck it up and ask my parents for a small loan and admit to them that I had failed. It was one of the hardest things that I have had to do in my life. First of all, I had already borrowed money from them to keep my business going, so you can imagine how difficult it was to ask them for more money after I had failed, especially at the ripe old age of 35. Luckily for me, they were willing to help me out, even though I told them that I would understand completely if their answer was no.

When you hit rock bottom and you know that it is your fault, it is not uncommon to reflect on what brought you there. I knew that I was intelligent, and throughout my life I worked harder than most people around me. After some deep introspection, it became clear that my failure resulted from my attitude and from rationalizing poor decisions on a continuing basis. I was in need of a radical attitude adjustment. The painful shock to my ego that I could fail so badly and the severe pain of admitting to my parents that I failed brought me to the point that I committed to never making a decision that would put me in that position again. I committed to doing whatever it takes to increase my net worth on a consistent basis so that not only would I never have to worry about not being able to pay my bills again, I would move consistently closer to the day when I would achieve total financial freedom, a day when I won't have to worry about working for someone else any longer.

Not long after my Great Awakening, I ended up moving from North Carolina to New Jersey in early March 2005 to work for my best friend, who out of the blue called me up and offered me a job as the Managing Operations Director of his small financial services firm. I thought this was both a great opportunity financially and career-wise, but also a great opportunity to work with my best friend. I eventually decided to tell my few clients that I was going out of business, a decision that was made a little easier after my biggest client withdrew his assets. However, I soon found out that my best friend, who I had been friends with for about 29 years, was a Dr. Jekyll and Mr. Hyde. He was the nicest guy you could meet outside of work, but at work he would scream and yell at the top of his lungs. I am now certain that he associates losing his temper with his success (although it is clear to me that he is successful *despite* his temper).

Turnover had been extremely high, and all the employees were incredibly stressed out, including me. It was the most stressful job of my life, but I was determined to stick it out because I was still determined to move forward on the path to financial freedom, and to be honest, I was being generously compensated. At one point, while my friend and I were hanging out at a bar, I had a heart-to-heart talk with him about his temper and how it was affecting everyone. He was sincerely surprised and thanked me for being so honest with him. I was the only person to ever confront him in the 14 years that he had been in the business. After that conversation, his temper was much better controlled for a while, with only very occasional outbursts. Then, his temper became worse than ever. My theory is that the company's financial results were falling short of his expectations, and he still had it in the back of his mind that his temper is an important factor in his success. Whatever the reason, I couldn't take it any longer. I was still committed to making this a success, so I decided to write him a letter. I figured that this would allow me to calmly collect my thoughts and point out how much his temper is costing him.

I wrote a detailed letter, trying to be careful not to be insulting. In retrospect, writing a letter may have been a mistake, although I am trying not to worry about that now. I mailed the letter to his house. He received it on a Saturday morning when we were supposed to play golf together. He gave me a call and said, “I received your letter. I'm very disappointed. We will talk about it on Monday. Needless to say, golf is cancelled.”

I was very surprised and didn't know what to think. I went into work on Monday, and he called me into his office. He said, “I'm sorry, but this isn't working out.”

That was that. I was fired for the first time in my life. I was stunned. He didn't say a word about the letter, and I didn't ask him why I was being fired. I knew why. Our business philosophies were diametrically opposed. He was right. It wasn't working out. And it wouldn't work out as long as he thinks it's okay to scream at employees and treat them like dirt. We are still friends, although we haven't been hanging out together nearly as much. I still like the guy that I know outside of work (Dr. Jekyll). It's the guy at work that I don't like (Mr. Hyde). I think we will slowly get back to normal.

I am now working as an accountant for a small software company. My compensation is a lot less, but I'm still saving a lot. I like the job and I like the people, but there are a lot of things that I would do differently if I were in charge. Whereas years ago I would get stressed out about it, my attitude has changed. Now I just remember that I am getting paid to do things the way my boss wants it done. It doesn't matter if I could do it a better way if the boss doesn't want it done that way. Charles Givens called this the “ballpark principle.” If you want to win in someone else's ballpark, you have to play by their rules. If you don't want to play by their rules, go to another ballpark.

I eventually want to get my own ballpark. It might take some time, but my goal is to accumulate enough capital to own my own business once again. This time it will be well capitalized and well planned. I will have enough cash to survive a considerable period of time without income.

My net worth bottomed out in January 2005, the month following my Great Awakening. Since the end of January 2005, my net worth has increased $42,241.24 (through Jan. 2007). I have completely paid off my massive credit card debt, and after I save a few more months, I will begin paying back my parents (who refused to cash the check that I sent them in 2005 because they wouldn't accept money from me until my credit card debt was paid off. They are the best!).

I began preparing monthly financial statements for myself in February 2005, and it's hard to describe the feeling of watching my net worth increase. I increased my net worth 19 out of the last 24 months, and 3 out of the 5 months that it went down was because I was unemployed after getting fired.

I am certain that focusing on my monthly net worth has changed my behavior. Without it, I probably would have gotten a new car, but I have stuck with my 1989 Jeep because I want to see my net worth increase.

Being the accounting nerd that I am, I have created monthly financial statements that integrate income statements, balance sheets (net worth), statements of cash flows, debt schedules, and schedules of savings and investments (I just added this). It allows me to make projections far into the future so I can see what impact my decisions will have on my net worth before I make them. I still don't make a budget, per se, but I definitely look at my actual spending more closely now to see how it is affecting my net worth. I still don't live an austere life, but now I weigh the value of what I'm buying more carefully against the value of increasing my net worth.

I will post this spreadsheet in the not too distant future, but I still need to make some changes before it's ready for public consumption.

Stay tuned.
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Author: BILLDOGG1 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333746 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 7:51 PM
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Thank You for sharing.


Bill

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Author: AOLFoolman100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333757 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 9:33 PM
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Wow MadCap, a very nice and most interesting post. I have read your posts for years on many boards, but have really known nothing personally about you.

It's nice to finally attach a human side and personal story with your screenname.

Continued good luck with your financial situation

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Author: YoThomashawkSir Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333759 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 9:48 PM
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MadCapitalist,

Excellent. Thanks for sharing your personal experience. When someone puts a real situation with detailed ages, dates, and figures, it really helps me guage my own financial decisions and adds credibility to the post. In my opinion you are already a success story. Good luck in your future endeavors and do keep us posted.

regards, Paul

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Author: tmeri Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333760 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 10:09 PM
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Thank you for sharing with us the lessons you have learned. I admire your ability to be honest with yourself about your own human frailties. Not everyone can do that.

You've come a very long way in a short two years. I wish you much success.


I liked this part the best:

I have created monthly financial statements that integrate income statements, balance sheets (net worth), statements of cash flows, debt schedules, and schedules of savings and investments

We've seen so many examples of engineers using their talents to solve problems. This is a great example of someone using something other than engineering skills to solve these problems.


Regarding your parents:

They are the best!

Indeed.



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Author: GusSmed Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333761 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 10:11 PM
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That was a fascinating post. I see some interesting parallels in our working careers, and if I didn't know better from your posting history on the Fool, if this was the first post of yours I had ever read, I'd think we were kindred spirits in many ways.

I had a tempestuous career, because I too had a hard time when I saw problems at work. I understand exactly what you mean about getting worked up because I saw a better way, and supervisors and managers wouldn't allow changes. It's not something I ever developed a tolerance for, and it made me miserable in most of my jobs.

I think it's a common pattern with certain kinds of people. My father was the same way. We moved every few years until I was 12 because he'd get fed up with the other lawyers in his office. The only working relationship he could tolerate over any length of time was sharing office expenses with 1-2 other lawyers, where they all essentially had independent practices.

It's not so much intolerance for other people, as difficulty dealing with co-workers who don't see the picture clearly. I had a brief period from 1999-2001 where I worked with a small team who did see the issues clearly. I don't know if you ever found a similar work environment.

Like you, I tried to strike out on my own a few times. 3 times, to be exact. Unlike you, I never ran up debt doing it. I found out that, whatever I might wish, I don't really have the correct temperament for working alone. The first two times, I ended it by getting another job. The third time, I discovered I didn't need another job, because I was making enough money from my investments.

I agree about the importance of tracking net worth. You may or may not be aware of this, but the current version of Quicken has a summary of net worth on the main page. It's always been possible to get a report with that information, but it's highly useful to have that number around as a standard display. You can also schedule future expenses and income, and project what your cash situation will be like far into the future.

I find an interesting, but probably meaningless, coincidence that your personal bottom occurred 2 months after October 2004. That's when I was fired for the first and only time from the last job I ever held.

Your bottom was at 35. Mine was at 30, in 1995. I ran up a debt for the first time since college then, financing my move from Colorado to California. It was the right decision, because it got me out of a barely break-even rut.

I never did accept the "Ballpark Principle", and I don't believe in it now as a general concept. I do agree that in many matters, it's the boss's decision because it's his ballpark. Certainly when you're talking about things like the overall direction of the company. But sometimes the boss is dead wrong, and in a healthy company, you should be able to do what you can to fix it.

You were right to send that letter to Mr. Hyde, and he was only hurting himself by not acknowledging that it was a problem. He was violating what Steve McConnell terms "work hygiene."

One of the tougher things about being a good employer is being open to corrections. When I was a team lead, I know I sometimes had a hard time with this, but I kept it uppermost in my mind because I knew it was difficult for me. Running a project as a democracy almost always ends in disaster, but so does running it as a totalitarian state.

- Gus

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Author: mazske Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333763 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 10:24 PM
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Hey MadCap,

Reading your story was great. I applaud you.

However, it reminds me of the rabbit and the hare.

You are the rabbit and I'm the hare.

You had the potential, in my eyes, to be FIRE'd by now. Yet, you now seem to be back on track and you will be FIRE'd one day.

Me, last year, I made the most money in a year I've ever made in my life. I made $39,000.

I'm almost 40.

Yet, I still think, even if I stay in this country when I retire, that I can retire when I'm 50. I just keep plugging away, one day at a time.

If you've read my recent note on my work in promoting literacy, that's what I do while working. One day at a time. School was out this past Friday. So, even though I went to work, I felt "blahish" due to not going into any classrooms to read to kids or to hand out free books.

Yet, I perservered and made it through the day doing other things that needed to be done. Such, as sending some authors e-mails inviting them to attend Book 'Em.

I'm a cop. I have no idea if come Monday my Chief will say, mazske, I'm tired of you doing what you do, you are back to shift work and working patrol.

My mind says if that day ever happens, well, mazske will post here asking you all to help me find a new job as a Book 'Em cop somewhere else. I've tasted the good life in helping others and I can't give it up. Yet, I do have my family to support and my goal of being FIRE'd, so work I must.

One day at a time. I'm slow. Yet, as long as I don't get fired from my job and I keep saving the tiny amount I save, well, maybe in about 11 years, when I'm 50, I'll retire. Or, maybe I'll be FI to such an extent that I'll just work a bit here and there, maybe ask to work PT as a cop if they'll let me keep doing my literacy work.

Or, maybe my first book will be a start of a new writing career that pays me money. Or, maybe my Foundation which I co-founded and am the President of will one day pay me a salary.

There are a lot of "ifs" in life for all of us. If live to be 60, and if I get my 20 in the Navy Reserves, I'll get another pension.

Anyway, too much on me as I'm apt to do.

I do applaud you. Both for telling your story and living your story and for being back on track.

I wish you and everyone on this board the best in life. I'm getting too philosophical at my still young age, but at times, I think my time is drawing near. I hope not, as my boys need me, but something is nagging at me. Probably the fact that I'm a crazy loon who goes into prisons and will verbally challenge gang members to get out and improve their lives. I guess my cynical side is telling me they are going to get me one day. Maybe they will, but I hope not. I try to stay aware of my surroundings. I do believe in the power of being positive, so I'm banishing my negative thoughts to a far corner of my mind.

I'll keep plugging away and I'm sure you will as well.

And, everyone who is still reading this, no that you, each and everyone one of you, can do your small part to make this world a better place.

mazske



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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333767 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 10:52 PM
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I agree about the importance of tracking net worth. You may or may not be aware of this, but the current version of Quicken has a summary of net worth on the main page. It's always been possible to get a report with that information, but it's highly useful to have that number around as a standard display. You can also schedule future expenses and income, and project what your cash situation will be like far into the future.

I'm very aware of Quicken's capabilities. In fact, I use the income statement and net worth reports to plug totals into my financial statements spreadsheet. I have a very strong knowledge of spreadsheets, and love the flexibility it provides. I can use formulas to provide innumerable ways of forecasting expenses. For example, it is easy for me to use a rolling twelve month average as a forecast for my expenses if I want. It's easy for me to bump up my expense by a certain percentage if I would like.

My spreadsheet also calculates my savings rate (another metric I follow closely) by month and by year, as well as my overall effective interest rate each month.

The thing I like most about Quicken is that it lets me download the activity for my accounts over the Internet, and reconciling my accounts is a snap. Quicken does all the heavy lifting.

I never did accept the "Ballpark Principle", and I don't believe in it now as a general concept. I do agree that in many matters, it's the boss's decision because it's his ballpark. Certainly when you're talking about things like the overall direction of the company. But sometimes the boss is dead wrong, and in a healthy company, you should be able to do what you can to fix it.

You should be able to do what you can to fix it? Even if your boss doesn't want you to?

Personally, I still try to convince the boss when I am confident that I know how to improve things. However, the difference is that now I don't stress about it if he disagrees and doesn't want to go along with it. It's his ballpark and his rules.

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Author: GusSmed Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333769 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 11:19 PM
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I'm very aware of Quicken's capabilities.

I wasn't sure, because earlier versions didn't have it, and I wasn't clear on why you needed a net worth spreadsheet if the information is always available to you in Quicken. It makes a bit more sense if you're doing forecast tweaks that aren't convenient to make in Quicken.

I have a very strong knowledge of spreadsheets, and love the flexibility it provides.

I'm a big fan of spreadsheets as well. They're great tools.

You should be able to do what you can to fix it? Even if your boss doesn't want you to?

If it's a serious problem, and the boss doesn't want you to fix it, the company is unhealthy. In extreme cases, it goes bankrupt. This in fact happened at 3DO, which owned New World Computing, my employer from 1998-2002. The problems were at the top, and to a lesser degree with some of the managers a couple of levels below the top.

Even if you don't go bankrupt, everyone can be unhappy when they don't need to be. The shouting you mentioned is extremely counterproductive. In companies that involve skilled labor, the loss of morale can seriously affect the bottom line. I've got a couple of good books on software development which analyze this in great depth.

However, the difference is that now I don't stress about it if he disagrees and doesn't want to go along with it. It's his ballpark and his rules.

That strikes me as a way to cope, but that doesn't mean he's doing what's in his own self interest, or his company's.

- Gus


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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333771 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/17/2007 11:32 PM
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That's an inspriring story. And I have heard that most people with their own businesses fail at least once. Sometimes spectacularly. I have no doubt that (when you want to) you will start again and make it a success.

My best friend started her own engineering company many years ago and went into business with a partner with whom she had worked very successfully over the years. It became apparant after a short while that they had radically different approaches to the business. Needless to say, thing didn't work out and after a few years they disolved it. Then for a decade she worked for others, acquired many contacts and a sterling reputation in her field. She then started her own business again. It's been a huge success. And she couldn't have made it so without what she learned the first time out.

I work for myself, and it's been the most eye-opening thing I have ever experienced. There's so much to consider and plan for. It's exciting and overwhelming. I consider it a gift to have this time in my life. I don't get many vacations any more, but I like the control. Planning is different - and you are so right you need a good chuck of capital to ride you over the slow times.

I don't think you have "hit rock bottom" in that you have learned so much from the experience. You are young with time to recover. I have no doubt things will accelerate from here.

Cool also that this post can be politics-free and something everyone can appreciate and draw inspiration from - thanks for that! I look forward to your spreadsheet. I'm a total spreadsheet and numbers geek.

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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333778 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 12:46 AM
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MadCap,

It's posts like yours and Fools like you that keep me coming back!

Thank you for sharing your story!

Jim

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Author: retireearlyboi Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333781 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 1:35 AM
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MadCap what a fantastic post! I think your experience at the office was similar to my own. I would get angry at the system and just stew in it. Or I would explode after hours. I later learned that it was actually entertaining for people to come to my office and tweak me just enough to watch me screw myself into the ceiling. I have no idea where I learned it. But I never quit my job and had financial problems. I did something worse: I just gutted it out.

And the result? I believe I helped give myself Cancer due in large part to my inability to deal with anger and frustration. When I was in chemotherapy I had a lot of time to think. One day in a bookstore I came across the book "The Anger Trap" which deals with effective techniques for anger management. I recognized so much of myself in the book that I bought it. I read it cover to cover and made extensive notes on how I could respond more effectively. Finding this book, and recognizing the problem, could have been one of those serendipitous events which saved my life.

So be happy you you still have your health. And be thankful for your epiphany which has presented you with an amazing learning experience.

I also track my net worth and think there is tremendous value in tracking it. Here's something to look forward to. When you finally FIRE and you can continue watch that net worth increase month after month. That's where I am after a hard fought battle similar to yours. It's an amazing feeling to have accumulated that "critical mass" where you are living your dream and you know you are going to be OK.

So good on ya MadCap. You've been through a hurricane and come out whole. I look forward to the future updates.

-reb

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Author: inparadise Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333787 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 7:54 AM
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Great post MadCap. Thanks for putting yourself out there.

If it were not for the part of your story where you turn yourself around, you could be my brother. He has a genius IQ, but his EQ or emotional intelligence is in the negatives. It was only after reading the book linked below that I had a prayer of understanding what has impacted my family to various degrees. As you have discovered, IQ is only part of the success equation, and possibly not the most important part.

It's an interesting read.

http://www.amazon.com/Emotional-Intelligence-Matter-More-Than/dp/0553375067

Best,

IP

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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333795 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 8:58 AM
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Wow, great post MadCap, it's funny how many people, including me, who see parallels between your frustrations and their own, maybe that's why so many people strive for FIRE so they aren't at the whim of some hothead or some manager not looking to rock the boat.

2828

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333798 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 9:36 AM
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Wow, great post MadCap, it's funny how many people, including me, who see parallels between your frustrations and their own, maybe that's why so many people strive for FIRE so they aren't at the whim of some hothead or some manager not looking to rock the boat.

2828


For me, financial freedom is a much more important goal than retiring early. I may decide to keep working after I reach financial freedom, but it would be on my terms, which is why I'm so interested in running my own business. But then again, I just might decide to pack it in after reaching financial freedom. It will be great to have that option, no matter what I decide. I would like to reach that point by the time I'm 50, which is only 12 years away. It is an aggressive goal, but I think that I can do it.

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Author: LuckyDog2002 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333802 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 10:19 AM
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Great post MadCap., very inspiring and I did like all the detail you provided about your journey in the working life. As a businesswoman, I had problems with employees who just right after starting work, would want to change things, they were know-it-alls,argumentative and/or they had a smart azz attitude....they became thorns in my side. I told the ones who wanted to change things that first, learn it my way and then later on, if you can show how it would improve things, then perhaps we can change it...but not before.

And you're right, whenever I saw a job application where they jumped around like fleas from job to job....I didn't want them because I knew they weren't going to last long, why go through the pain and expense of hiring them just to fill a position if it's going to be short term?

It takes a lot of maturity and discipline to come through to the other side like you did, you are to be congratulated for that and you'll be FIRE'ed before you know it.

I look forward to more of your shares. :)

LuckyDog

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333803 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 10:19 AM
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>> For me, financial freedom is a much more important goal than retiring early. I may decide to keep working after I reach financial freedom, but it would be on my terms, which is why I'm so interested in running my own business. But then again, I just might decide to pack it in after reaching financial freedom. <<

Agreed. I've always focused on the FI part of FIRE more than the RE, knowing that RE is possible with FI, but not without it. I really don't think I want to do *nothing* when I reach FI (hopefully within 10 years with my "FIRE Clock" at 11:40), but as you said, I want it to be on my terms. I don't want to be in a position to work a job I hate, or hours I don't like, for bosses who are jerks.

I know I shared it before but it bears repeating: My dad thought he wanted to retire at 55, as soon as he was eligible, but as soon as that happened, suddenly his bosses made his job a LOT more pleasant for him because they didn't want him to retire. (He stuck it out for another couple years until 1992, when an early retirement incentive too good to pass up came his way.) Sometimes, even if nothing really changes, just having the *ability* to call it quits may change a lousy job situation, at least if you're valuable to your employer.

#29

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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333841 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 2:08 PM
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>I finally decided to suck it up and ask my parents for a small loan and admit to them that I had failed. It was one of the hardest things that I have had to do in my life. First of all, I had already borrowed money from them to keep my business going, so you can imagine how difficult it was to ask them for more money after I had failed, especially at the ripe old age of 35.

MadCap, your story is fascinating and I thank you for sharing it. Judging from the responses here, there are others who've had similar job experiences to yours.

If I may offer a perspective from the side of your parents' generation, of which I'm surely a member, having a 35-year-old son myself.

Most everyone in our circle of friends is retired now. All planned carefully for this time in their lives. All want the same thing: financial independence, no/low debt, enough cashflow to fund a comfortable life and some extra to indulge grandkids with life's minor luxuries (fishing trips, birthday outings, family reunions, etc.), and to help out in a true emergency.

What no one planned for was to be called upon to bail out poor decision-making by their grown kids. While an emergency loan for a short-term crisis is one thing (and your parents do sound like "the best")... I have watched many of our retired friends and family members nearly done in by the serial mistakes of their kids' financial disasters. We have friends who are making mortgage payments on TWO extra homes to keep those two adult kids from foreclosures. One family member financed $100K for a son's start-up (which failed).

For all those reading who plan to retire early -- or just retire period some day, please remember that once you have your nest egg it is vulnerable to the fledglings who come back to pick at it. It hasn't happened to us and appears unlikely it ever will, due to our son's strong work ethic and responsible behavior towards money. But... no one is immune to life's emergencies. A serious illness or disability can happen to anyone. More often it is simply poor decision-making. And, it is happening more and more often to my generation whose kids are 30-40.

So as you plan for that retirement, remember that significant and frequent gouges to the nest egg are not replaceable once you're no longer working. Plan accordingly!


Jeanie

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Author: ascenzm Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333855 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 4:58 PM
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For all those reading who plan to retire early -- or just retire period some day, please remember that once you have your nest egg it is vulnerable to the fledglings who come back to pick at it. It hasn't happened to us and appears unlikely it ever will, due to our son's strong work ethic and responsible behavior towards money. But... no one is immune to life's emergencies. A serious illness or disability can happen to anyone. More often it is simply poor decision-making. And, it is happening more and more often to my generation whose kids are 30-40.

So as you plan for that retirement, remember that significant and frequent gouges to the nest egg are not replaceable once you're no longer working. Plan accordingly!

TMFJeanie


Excellent, if not sobering, point. I'm single with no children. Howeven even without children, I still have to worry about family members who may need financial assistance in future. An elderly mother has limited financial resources and a medical condition (Parkinson's disease) that is almost certain to land her in a nursing home in the future. A sibling who is mentally handicapped and who cannot take of himself is also likely to need financial assistance in the future.

Therefore, to anyone contemplating pulling the plug on a good paying job and FIREing, look at all possible future scenarios where your nest egg may have some unexpected lump sum withdrawals.

Mike

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Author: ascenzm Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333856 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 5:03 PM
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I know I shared it before but it bears repeating: My dad thought he wanted to retire at 55, as soon as he was eligible, but as soon as that happened, suddenly his bosses made his job a LOT more pleasant for him because they didn't want him to retire. (He stuck it out for another couple years until 1992, when an early retirement incentive too good to pass up came his way.) Sometimes, even if nothing really changes, just having the *ability* to call it quits may change a lousy job situation, at least if you're valuable to your employer.

#29


I've experienced the same at my job. I feel that my manager, with whom I've worked for 26 years, knows that I'm closing in on FI status. He'll apologize to me if he gives me a work assignment that is not particularly interesting. Another nice thing that FI status or almost FI status does for me is that it allows me not to get flustered on the job and to keep my hours worked to a reasonable level just over 40 hours per week.

Mike

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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333858 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 6:06 PM
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Your post was excellent. You have certainly learned many important lessons.

I hope you don't mind, if I mention that you don't seem aware that you still seem overconfident.

For example, you wrote:
"In 2002, I finally decided to start my own business as an investment advisor. I didn't have any money and I already had some debt, but I figured that I could survive by working temp jobs and building the business at the same time."

You didn't express any awareness that many potential customers, with substantial savings to invest (who would be most likely to need an investment advisor), would not think that a whippersnapper, who was himself broke, in debt, and never successful at a longterm job, would be qualified to advise anyone on how to invest money. (Especially someone who hates to lose money.)

You wrote: "I eventually want to get my own ballpark. It might take some time, but my goal is to accumulate enough capital to own my own business once again. This time it will be well capitalized and well planned. I will have enough cash to survive a considerable period of time without income."

You sound more motivated by the desire to own your own ballpark, than to provide a product or service that can uniquely serve the needs, of your customers.

When you say that your business will be "well planned," I hope you will get plenty of experienced input, before launching.

For the sake of your parents, who really do seem to be "the best," I hope that you plan to leave them out of your capitalization plans. Good for you, for paying them back (assuming you meet your personal commitment, to pay them back...hopefully, with interest?). If you were 35, in Dec. 2004, you are 37, now. You are over the threshold of middle age. You aren't a kid, anymore. Your parents are probably in or near retirement, themselves.

Perhaps (over)confidence is a necessary characteristic of entrepreneurs? I only mention this because you still appear to have the same attitude, as before.

I do agree that tracking net worth is a tremendous motivator. I have been doing this, for almost 20 years.

Wendy



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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333862 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 6:45 PM
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>> If you were 35, in Dec. 2004, you are 37, now. You are over the threshold of middle age. <<

37 is middle aged?

But I thought 50 was the new 40 and 40 was the new 30.

And forgive me for saying so, but you're coming across rather preachy.

#29

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333864 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 6:55 PM
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If you were 35, in Dec. 2004, you are 37, now. You are over the threshold of middle age.

And...? So...?

I don't think this is all that relevant. Yes, time to RE matters, but having a good business plan matters more. I started working for myself at 39 and have seen my net worth triple since then.

I agree that MadCap has some more planning to do before he could launch his own business, but that seemed to me to be his point. He is biding his time, building savings and figuring out how to do it better next time.

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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333867 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 7:09 PM
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<you're coming across rather preachy.>

Sorry! I try not to, but nobody else was cautioning, at all.

As for being 37 middle-aged, this is an early retirement board.

Don't MadCapitalist's parents have the same right to retire, as he is hoping for, for himself? Don't they have the right to know, unequivocally, that their bright but reckless son won't tap them again, jeopardizing their secure retirement?

MadCap's parents are probably 57 to 77 years old (that is, MadCap was born when his parents were between 20 and 40 years old). This means that they are between pre-retirement age (or possibly even already Retired Early) and old age.

MadCap still hasn't paid his parents back, for their previous double support of his failures (though he intends to). MadCap is still talking like a youth (he wants his own ballpark!). He sounds as if he implicitly feels that he could fall back on Mom and Dad, should his next scheme fail.

That is why I stressed to MadCap that he is middle aged. Not because I feel that middle age is enfeebled, but because middle age is a time of personal responsibility.

How would MadCap change his approach, if he truly believed that he had no safety net? Would he be humbler, more cautious, more likely to hedge his bets, less likely to take risks?

I hope I'm not sounding preachy, or too critical, when I say: MadCap still doesn't sound as if he recognizes the risk in what he is doing, because he doesn't sound like he expects to carry that risk, entirely, by himself.

Wendy


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Author: sutton One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333871 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 7:42 PM
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MadCap:

This July 1, I'll put together the seventeenth annual sutton net worth page. It doesn't seem that long ago, but your note made me pull the spreadsheet up, and there the first column was: July 1, 1992. I started it the year I completed my training and got my first real job.

It's been extremely useful for all the reasons you say, and I agree entirely with keeping the numbers conservative. Also, I keep two totals at the bottom: the "with house" total and the "without house" total. The reason for this is that I'm of the school of thought that one's house is only technically an investment.

Another benefit, I think, will be in showing my children -- when they're in their late twenties or early thirties, and perhaps a bit overwhelmed with kids, income and grownup financial reality in general-- the first page, say 1992 through 1998 or so. It might bring home that Mom and Dad were truly in their place once upon a time, and (more to the point) that with some discipline things can steadily get better.

If it seems to motivate them at all, the a few years later I might show them page two -- the one that has the inflection point where we started our own business.

For the here and now, it's actually become an annual exercise that my wife and I both look forward to a bit. The initial reason we chose July 1 is now a bit trivial, but we now look forward to it as a prequel: our Financial Independence Day, now looking to be at about spreadsheet year twenty or twenty-two.

It's really pretty neat to sit down each year and look at all the red ink go away, and the black ink columns become bigger.

Best of luck (and thanks for the annual return calculator, BTW)

--sutton





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Author: MoneyPenny07 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333873 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 7:55 PM
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Thank you for sharing your story.

Sooner or later, we arrive at this place. As they say: "Truth is One, Paths are Many."

Ironically, in some ways I wish I had had the guts to do the same.

After college, I pursued a career in business, going on to pursue for an MBA at night, studying all the right ways to generate shareholder return, trying to match that up with my own inclinations to continuously uncover efficiencies wherever I could find them.

I didn't count on the walls I would run into - the bureaucracy, the egos, the politics. There were so many times I wished I could just get up and run away. Financially, I could have survived, but I grew up relatively poor and the fear of a return to poverty overruled the desire to flee. Still, I always kept an FU fund in case the need arose. At least in your case, you had benefactors to fall back on :)

Somewhere in my mid to late 30s, I finally reached some measure of peace with all of this (although some might term it resignment). Although they talked a good game about teamwork, in the final analysis we were each of us lone rangers and I came to see myself as a mercenary, mentioned before here as a consultant masquerading as an employee. It's a huge relief to stop caring. You can briefly state your case and turn away without the need to see it accepted. It is freedom in every sense of the word.

Many times the best answer for the intelligent and ambitious is to work for themselves.

Wishing you the best.


MP




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Author: arrete Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333874 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 8:01 PM
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37 is middle aged?
--------------------
Yikes! I must have been decrepid to retire at 50. I wonder what I am now? Dilapidated?

arrete

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Author: tmeri Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333875 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 8:22 PM
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Wow. Your post is hitting me all wrong, perhaps, but are we reading the same MC post?

WendyBG writes,

I hope you don't mind, if I mention that you don't seem aware that you still seem overconfident.

For example, you wrote:
"In 2002, I finally decided to start my own business as an investment advisor. I didn't have any money and I already had some debt, but I figured that I could survive by working temp jobs and building the business at the same time."

You didn't express any awareness that many potential customers, with substantial savings to invest (who would be most likely to need an investment advisor), would not think that a whippersnapper, who was himself broke, in debt, and never successful at a longterm job, would be qualified to advise anyone on how to invest money. (Especially someone who hates to lose money.)



Did you read ANY of these subsequent comments by MC about his first attempt at a business?

building the business was proving to be much more difficult than I anticipated.

It slowly started to become clear that starting a business despite my severe lack of capital and my lack of a good business plan (along with my poor sales and business development ability) was a huge mistake.

In December 2004, I had come to the stunning conclusion that I had failed dramatically! I didn't think it was possible. I'm too smart to fail, I thought.

After some deep introspection, it became clear that my failure resulted from my attitude and from rationalizing poor decisions on a continuing basis.




WendyBG: You sound more motivated by the desire to own your own ballpark, than to provide a product or service that can uniquely serve the needs, of your customers.

People often have multiple reasons for starting a business. I took this comment to be in the context of his previous experiences. I think you are off base here to conclude something about his strongest motivation.


WendyBG: When you say that your business will be "well planned," I hope you will get plenty of experienced input, before launching.

Uh, he HAS experience. He owned a business before, or did you not notice that?

Good judgment comes from experience, and experience comes from bad judgment.

Who knows if he will succeed in his next business? It seems clear that he will take a few lessons from the old business to apply to the new one. He already made one major adjustment in working for others by not insisting that they do things his way all the time. Many very successful people have lots of failures before they succeed. It is not at all uncommon.

Cut him some slack. Do you own a business? If not, then what is the basis for your advice to MC?





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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333876 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 8:24 PM
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An elderly mother has limited financial resources and a medical condition (Parkinson's disease) that is almost certain to land her in a nursing home in the future. A sibling who is mentally handicapped and who cannot take of himself is also likely to need financial assistance in the future.

Mike, you make excellent points. Even those who don't have kids who might take over three decades to grow up, anyone could be faced with disabled parents or siblings who cannot be abandoned as they age.

This is such good advice:
"Therefore, to anyone contemplating pulling the plug on a good paying job and FIREing, look at all possible future scenarios where your nest egg may have some unexpected lump sum withdrawals."


Thanks for your insight.


Jeanie

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333878 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 8:39 PM
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I hope I'm not sounding preachy, or too critical, when I say: MadCap still doesn't sound as if he recognizes the risk in what he is doing, because he doesn't sound like he expects to carry that risk, entirely, by himself.

What risk in what I'm doing?

You aren't making any sense at all.

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Author: ascenzm Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333879 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 8:42 PM
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Thanks for your insight.


Jeanie


You're welcome.

Mike

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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333881 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/18/2007 9:00 PM
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<Cut him some slack. >

You're right. I was wrong, to jump all over MadCap. He really is trying.

Wendy

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333900 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 12:19 AM
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<Cut him some slack. >

You're right. I was wrong, to jump all over MadCap. He really is trying.

Wendy


I'm trying? You make it sound like I'm failing.

You want to judge me? Go right ahead.

Personally, I think your judgement was *way* off base. From what you said, it seems like you barely paid attention to my story. Did you jump to the conclusion that I'm overconfident merely because I said that I want to try to start my own business again after making sure it is well capitalized and well planned? I think that is a little ridiculous.

I'm glad that you aren't my mother. I'm pretty sure that I failed my first time trying to walk. My life would have been much worse if my mother criticized me for being overconfident because I wanted to make another attempt at learning to walk.

Am I confident? You betcha! Why shouldn't I be? I'm proud to have achieved quite a few accomplishments that few others have achieved. I'm intelligent, I'm motivated, and despite how I may come across over the Internet, I'm easygoing and likeable.

I *will* achieve my goals, and I won't let people like you discourage me. I fully expect to fail in the future -- many times actually. Show me a successful person who hasn't failed and I'll show you a liar.

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Author: OldOne Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333902 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 12:28 AM
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What no one planned for was to be called upon to bail out poor decision-making by their grown kids....

We have made it clear to our kids, that while we will always rescue them, the jams we got them out of while we were working were high-budget rescues. Future rescues are going to be low-budget affairs.

Can't make your house payments? Well, you can come back & live with Mom and Dad, but it is our house, our rules, etc. You won't go hungry or get cold, but you will live by our rules.

Car broke down? I can help you find a jalopy that runs.

Financing for a start-up? Go talk to the bank. Nothing spends so quick and easy as someone else' money.

OTOH, we do have a budget for gifts, but I have read The Millionaire Next Door, and I intend to make it easy for our kids to make it on their own.

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Author: OneupOnedown Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333912 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 4:33 AM
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To post in this forum is inherently asking for comment and feedback.

Wendy, Don't take it back. It's OK to point out a few flaws in this love fest. You qualified your remarks with references and respect.

I didn't post earlier because IMHO the OP is FOS. And I'm really not given to snarkiness. I imagine there are others out there who wonder, as I have, why they haven't hit the ignore thread button already. I can only answer that one for myself - insomnia and voyeurism - I was curious to see where this display of ego would unravel. And it did. At the first suggestion that there was anything the OP might be missing.

Who, in their 30s has to learn that if you tell your boss about his temper they SHOULD fire you? Not even considering that this boss is your best friend who offered you a high paying job when you had no other prospects. This is the EQ of a teenager. I agree with you - he shows no understanding of risk - or of reciprocity, for that matter.

He might learn from his mistakes, the ones he can now see, but he appears oblivious that there might now be things he still would benefit to learn, that he can't see yet. He appears to lack a capacity to learn from others' mistakes - that requires, empathy, prudence, patience, and perhaps most of all a high tolerance for the questions: Am I missing something here? Who will point out what's missing from my current view? And when people make an effort to say thank you, even when you disagree.

To the OP:
Don't comeback with more of the confidence schtick! YOU have a temper!




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Author: OneupOnedown Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333913 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 5:28 AM
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Uh, he HAS experience. He owned a business before, or did you not notice that?

Good judgment comes from experience, and experience comes from bad judgment.

Who knows if he will succeed in his next business? It seems clear that he will take a few lessons from the old business to apply to the new one. He already made one major adjustment in working for others by not insisting that they do things his way all the time. Many very successful people have lots of failures before they succeed. It is not at all uncommon.

Cut him some slack. Do you own a business? If not, then what is the basis for your advice to MC?


One doesn't have to own a business or fail at self-employment to understand some things about the risks involved. There are plenty of us who've resisted that siren's song because we took a long (or short) hard look and realized that, a) We don't have a single, well-developed idea of the customer's need that we hope to meet. b) We don't know enough about our competition and how they found their market. and c) We don't have 3 years worth of living expenses so that any positive cash flow can be used to BUILD the business. An afternoon in a public library will easily uncover these three issues as being among the top things that distinguish successful business launches from unsuccessful business launches. But that's not a very sexy story, nor a very tempting use of one's intellect, when one is SURE of their eventual success.

The OP lacks credibility. He trades successfully but hasn't paid his parents back. His confessional story is marketing for his future business plans to host a financial blog and he seems oblivious to the notion that he will be entering a crowded genre or that his 20-something competitors have far superior net oratory skills.



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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333915 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 6:59 AM
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We have made it clear to our kids, that while we will always rescue them, the jams we got them out of while we were working were high-budget rescues. Future rescues are going to be low-budget affairs.

Can't make your house payments? Well, you can come back & live with Mom and Dad, but it is our house, our rules, etc. You won't go hungry or get cold, but you will live by our rules.

Car broke down? I can help you find a jalopy that runs.


OldOne,

Our offer to our kids (all 16 or under) is the same. We will always be there for them. If they need help, we will render help, however, the help we give won't necessarily be the help that they want.

The only time we wouldn't allow them to come back and live with us is if we thought they were a danger to us or other kids. They would also live by our rules.

Sometimes the long term good of your children requires them to figure things out for themselves!

Jim

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Author: WuLong Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333923 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 9:04 AM
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Fwiw (possibly very little) this thread brings to mind George Bernard Shaw's definition of the the true artist (Man and Superman).

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333926 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 9:41 AM
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To post in this forum is inherently asking for comment and feedback.

Yes, I understand that, which is why people are also free to criticize Wendy's criticism.

Wendy, Don't take it back. It's OK to point out a few flaws in this love fest. You qualified your remarks with references and respect.

She still hasn't explained this comment:
"MadCap still doesn't sound as if he recognizes the risk in what he is doing, because he doesn't sound like he expects to carry that risk, entirely, by himself."

What risk? What am I doing that is so risky?

Her assertion is that I'm still too overconfident. What am I currently doing that reflects overconfidence?

It seems to me that accumulating *more* debt would reflect overconfidence, but instead I paid off a large amount of credit card debt and will now begin to pay off my parents. Is paying off debt risky? Because I thought I was reducing my risk.

What about my business? I'm not in business anymore. Instead, I have a good paying job that provides steady income and great benefits, including a great health insurance plan. Is that risky? If so, what in the world should I do to reduce my risk and be worthy of Wendy's respect?



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Author: LuckyDog2002 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333928 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 9:46 AM
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oneup and wendy, why not just tell the OP congrats and keep up the good work rather than pizzing on his parade?



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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333950 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 10:48 AM
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Great Post Madcap! I love hearing the personal stories of the FIRE dudes and dudettes and their struggles to achieve FI.

I like your Net Worth watch and how you acknowledge that it keeps you on the straight and narrow.

Along the same lines of a "net worth” indicator focus, I'll briefly relate some of the key indices that I have used to keep me on the FI path.

Even though I have been pretty financially disciplined most of my life, DW and I succumbed to the McMansion syndrome that retarded our financial growth for about 4 years.

We moved onto a 5 acre parcel of land with a pool and 3000 square foot house back in 1996. Not really extravagant but I was only making 46k per year at the time and DW did not work. I financed 60% of it and was doing fine with all the payments. For the 1st 6 months that is.

Then both our car's engines locked up; washer and dryer went out; refrigerator went out; oldest daughter hit 16 and turned into a money gobbling beast; all this was after we had drained our savings and ran up about 5k of "no interest cc debt for 12 months" filling the house up with furniture and an entertainment system. This all occurred in about 1 year.

I stopped making IRA and 401k contributions to service the debt. My net worth continued upward because of the fantastic stock market of the 90's and my home appreciated, but my consumer debt load hit 40k in that one miserable 12 month period. At 1st, I decided not to fret over it since my net worth was still growing and I was enjoying my new home. However, one month I had more bills than money left over after my daughter ran up another $250 cell phone bill.

I decided to make changes right then and there. I confiscated the cell phones, got a better paying job, took moonlighting software assignments and stopped buying things. DW got a part time job and we were able to pay off the debt in about 2 years. It was rewarding to watch the debt total reduce by several thousands of dollars each month.

Watching that debt total indicator was a great motivator on days I did not feel like working on a contract job after my normal day job work load.

Half way through the debt payoff, I started contributing to the 401k again and took full advantage of a SEP IRA with the contract income. After all debt was paid down, I continued the contract work but only occasionally. I used that money to fully invest in ROTH IRA's after they became available. We also sold that 3000k home for a 85k increase and downsized.

Since being consumer debt free, I have watched 2 indicators every month for the past 5 years. My net worth and the total amount of my FIRE investments which I use to calculate a FI % indicator. If my FIRE total is 250k, then I divide 250k by 1mil (1 mil being the total amount I want to consider myself FI) to get 25%. That means I'm 25% of the way there. Another way of looking at it is each time my total FIRE amount goes up 10k, I can add 1% to my FI % indicator.

Another small indicator I watch on an annual basis is my mortgage debt. I pay a little extra each month towards my mortgage so that it will be paid off in 8 years, right about the time I hope to hit my 1 mil mark.

decath


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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333959 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 11:19 AM
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TMFJeannie:
What no one planned for was to be called upon to bail out poor decision-making by their grown kids. While an emergency loan for a short-term crisis is one thing (and your parents do sound like "the best")... I have watched many of our retired friends and family members nearly done in by the serial mistakes of their kids' financial disasters. We have friends who are making mortgage payments on TWO extra homes to keep those two adult kids from foreclosures. One family member financed $100K for a son's start-up (which failed).


My mom actually came up to me a few years ago and thanked me for never being a burden to them by being one of those "problem" children. They have so many friends and aquaintences that cannot retire because they still support their children in some way.

They both retired a couple of years ago when dad could draw on SS at 62. They have over a mil in assets and a paid off home after raising 2 children. I learned much of my financial savvy from them.

decath




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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333981 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 12:45 PM
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Show me a successful person who hasn't failed and I'll show you a liar.

Define successful. Is it someone who grows a business where he/she is rolling in the dough and owning huge homes and yachts? Or it is someone who runs a business that supports the family and retirement saving over a long period of time. I can name two people in my immediate family that own their own businesses over long periods of time without failure. They live a comfortable life.

IF

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333985 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 1:16 PM
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Show me a successful person who hasn't failed and I'll show you a liar.

Define successful. Is it someone who grows a business where he/she is rolling in the dough and owning huge homes and yachts? Or it is someone who runs a business that supports the family and retirement saving over a long period of time. I can name two people in my immediate family that own their own businesses over long periods of time without failure. They live a comfortable life.

IF


Define success however you wish.

How many people have been offered a job on every interview? And passed every test they have ever taken? And had every proposal for a date with the opposite sex accepted?

I think you get the picture. We *all* fail at some point in our lives. It is not a good reason to give up though.


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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333988 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 1:34 PM
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How many people have been offered a job on every interview? And passed every test they have ever taken? And had every proposal for a date with the opposite sex accepted?

I think you get the picture. We *all* fail at some point in our lives. It is not a good reason to give up though.


I didn't know you were defining failure so broadly. I thought you were defining more narrowly. I thought you were limiting failure to the success/failure of small business owners.

IF

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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 333994 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 1:44 PM
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<I'm intelligent, I'm motivated, and despite how I may come across over the Internet, I'm easygoing and likeable.>

Wow! You really are a special person! I'm sure that you are handsome and debonaire, too.

No wonder you quit all your early jobs. Your employers, foolishly, just didn't understand that a special person, like you, should have the right to tell everyone how to organize their own business, instead of focusing on doing his own job, reliably and competently.

Your potential customers, foolishly, just didn't understand why a young man, who couldn't manage his own finances, should be allowed to invest their hard-earned savings.

<My life would have been much worse if my mother criticized me for being overconfident>

If she had, instead of supporting your decision to quit all your jobs (by giving you financial support), maybe you would have learned that the world expects adults to act like adults. You might have learned to hang in there, humbly do the tough stuff, earlier, and your life might have been better.

<I *will* achieve my goals, and I won't let people like you discourage me. I fully expect to fail in the future -- many times actually.>

I hope that you achieve your goals. I'm not trying to discourage you.

I'm trying to teach you a little caution (though, you have made it clear that you have to hit rock bottom, after many failures, to learn anything, so I doubt that any advice will take).

If you expect to fail many times, in the future, please tell your parents and future investors and customers, before you ask them for money. If you expect to fail, don't lose other people's money, for them. Don't expect others to provide you with a safety net, as your parents have always done.

Wendy

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334010 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 2:18 PM
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No wonder you quit all your early jobs. Your employers, foolishly, just didn't understand that a special person, like you, should have the right to tell everyone how to organize their own business, instead of focusing on doing his own job, reliably and competently.

I hate to disappoint you, but virtually all of my former employers have very high opinions of me, and many of them later offered me new positions that opened up (but I turned them down). They knew that I was going to perform at a high level.

Your potential customers, foolishly, just didn't understand why a young man, who couldn't manage his own finances, should be allowed to invest their hard-earned savings.

They didn't know about my financial situation. They just knew that I had an excellent investment track record and that I was very upfront about how I was going to invest their money. I wanted to be certain that they understood my investment philosophy, and I wanted to make sure that they were going to be comfortable with it. I also made it very clear that I was a money manager, not a financial planner.

I wouldn't have started an investment advisor business if I didn't have significant expertise in investing.

I'm trying to teach you a little caution (though, you have made it clear that you have to hit rock bottom, after many failures, to learn anything, so I doubt that any advice will take).

For crying out loud, I don't need to be taught caution. If it's anything that you should have picked up from my post, it's that the pain of my failure has caused me to approach things with an abundance of caution.

If you are so wise, please share your wisdom. You still haven't answered my question:
What risks am I taking?

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Author: Anibaldo Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334039 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 4:05 PM
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What risks am I taking?

The risk of not being humble, I believe.

Abe

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Author: OneupOnedown Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334058 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 4:37 PM
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Dear Lucky,

oneup and wendy, why not just tell the OP congrats and keep up the good work rather than pizzing on his parade?

I answered this already in my posts. While I found the OP story entertaining, IMO it wasn't credible. There appears to be some embellishment for the sake of marketing. The OP was already getting enough validation from posters (who did believe the story) whose stories I did find credible, and are part of why I was still reading. My posts are for the other people reading and posting because I don't think the OP is open to learning anything from the feedback he is getting here.

OneUp

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Author: OneupOnedown Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334067 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 4:48 PM
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What risk? What am I doing that is so risky?

Her assertion is that I'm still too overconfident. What am I currently doing that reflects overconfidence?


Me thinks thou doest protest too much. Shakespeare

We all have blind spots. By definition we don't know what they are.
Anger management. Self-control. These are the obvious obstacles to your future freedom. They are no doubt not the only obstacles you'll face.

Good luck to you!

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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334072 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 4:56 PM
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<You still haven't answered my question:
What risks am I taking?>

At the moment, you are not taking any risks. You are building up your assets, in a safe job. That is good. That's why I recced your post. I think that, at the present time, you are doing what you should be doing.

If you start a new business, you will be taking risks.

First, you will need to quit your job, to focus on your new business. (Trying to run a business, out of your employer's office, would be unethical, and would get you fired.)

You have already said that you plan to protect yourself, with a large cash cushion. This is also good.

The larger your cash cushion, the less your risk of running out of money, before your business becomes profitable enough to support yourself. However, before that time, you will be burning through money, which took you time and effort, to accumulate. You will be spending savings. You will also sacrifice your salary, which is an opportunity cost.

There is a risk that your business will never become profitable enough, to support you. (The risk that you may make less than your current salary is less important, since the satisfaction of being your own boss may compensate you.) You may burn through all your money, and go bust. This is a risk you are familiar with, since you have done this before.

Starting a new business often requires startup capital. You didn't say what your business will be. If you choose the same business, as before, money manager, your startup capital needs will probably be relatively small. You may only need your own domicile, your own computer, and your own telephone, which you already have. However, if you borrow startup capital, you will be risking your venture capitalists' money.

Finally, you will be risking your customers' money. The reason that your posts hit a hot button with me -- the reason I am taking the time to respond -- is that I am frequently the target of young, overconfident money managers, with less knowledge, experience, and money than myself. Like you, they all say, "I had an excellent investment track record...I wouldn't have started an investment advisor business if I didn't have significant expertise in investing."

They are playing, like a game, with OPM (Other People's Money). Do I think that they have significant expertise? More than me? Then, why don't they make a living, managing their own money, instead of trying to parasitize me?

Sorry, you sound like you are playing the same game! I wouldn't invest a penny, with someone who had this self-centered, overconfident attitude. Someone whose "investment expertise" led him to debt (but, you write, "They didn't know about my financial situation." Well, that's a good thing, isn't it?).

If I can give you any advice, it is: focus on the customer.

Everything that you have written so far focuses on your abilities, your talents, your needs. Your investment knowlege is great, your business plan is wonderful...as wonderful as the last business plan?

This is the risk: that you overestimate yourself, that you underestimate your competitors and customers, and that, if you don't succeed, other people will pay the price.

You aren't admitting the risk. That is the most dangerous thing, of all.

Wendy


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Author: ariechert Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334101 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 7:14 PM
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And had every proposal for a date with the opposite sex accepted?

I think you get the picture. We *all* fail at some point in our lives. It is not a good reason to give up though. - IndecisiveFool


I dated a girl for two years. When she was away at college she wrote me a letter and told me "I don't miss you when your not here." Her mother really disliked me; she said, "Art, your just not our kind of people."

The ver first girl I ever tried to kiss in the 6th grade spit in my face. No lie. Very traumatic. I was seventeen before I finally kissed a girl.

Art


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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334112 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 7:50 PM
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You aren't admitting the risk. That is the most dangerous thing, of all.

Wendy


Admitting the risk does nothing.

The important thing is that I'm fully aware of the risk. If I didn't think it was risky, then I wouldn't bother accumulating a large amount of capital or developing a good business plan.

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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334120 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 8:32 PM
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Madcap,




Leaving accounting jobs after working for only a short time without having another job lined up became my modus operandi. I would get all worked up because I didn't like the way things were done. I always knew a better way of doing things, but supervisors and managers often wouldn't allow changes to the processes, even when the desirability of change seemed obvious to me. I would allow it to frustrate me until I couldn't take it anymore, and then I would put in my two weeks' notice.


Good for you for sharing such a personal story.

Here's my .02

I'm a kindred spirit when it comes to wanting leave frustrating work situations. Heck, I bet a lot of FIRE wannabees are. Not being happy with the status quo is a powerful motivation for wanting to FIRE.

As you found out, the trick is to hang in there and play the game until you are FI.

One method that worked for me was to take temporary work assignments in my field. Often by the time I got sick of the way things are done, my contract was up. These assignments either provide paid overtime or limit you to 40 hours per week, and you don't have to get involved with company politics.



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Author: MichaelRead Big gold star, 5000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334127 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 8:57 PM
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You aren't admitting the risk. That is the most dangerous thing, of all.

Wendy


Admitting the risk does nothing.

The important thing is that I'm fully aware of the risk. If I didn't think it was risky, then I wouldn't bother accumulating a large amount of capital or developing a good business plan.

MadCapitalist


The biggest risk is doing nothing. What hurts in remembering is remembering when you didn't do something (do I hear a murmuring of 'damn right' in the background?).

Your amassing of capital isn't there to reduce risk: it's there to keep you going until the money starts coming in. Some say the risk is in losing it and they're correct but not right. They're missing the point and introducing a red herring. If you have a stash that you can draw upon so you don't have to depend on others until the client cash comes in, that is just maintenance money. If it runs out then you go and get a job somewhere.

What's the risk, really? You are going to live across those months anyway.

I have seen more than a hundred startups and a handful of failures. Want to know the common characteristic of the failures? “This would be a fantastic business if it weren't for all the damn customers.” Too succinct? Failures have many reasons for failures and will expound at length on all of them yet the root cause is they were bothered by customers.

One thing on business plans: they're almost useless. Yes, I know the experts say you should have one but, in truth, a business plan is there to satisfy a financial source lending you money and isn't there to plot a business. If it were every business would succeed. There is only one business plan: be in business next year and, to do that, you may have to change course deviating from your business plan. If you lock yourself into an unyielding plan then you can't swerve when it's needed to.

I realize I'm digressing from the thread somewhat yet it's my belief that what one person considers a risk is another's certainty. In any event, no successful business begins by being afraid of risks.

MichaelR




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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334129 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 9:19 PM
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One thing on business plans: they're almost useless. Yes, I know the experts say you should have one but, in truth, a business plan is there to satisfy a financial source lending you money and isn't there to plot a business. If it were every business would succeed. There is only one business plan: be in business next year and, to do that, you may have to change course deviating from your business plan. If you lock yourself into an unyielding plan then you can't swerve when it's needed to.

I've talked to numerous people on business plans, and most of them feel that the business plan isn't important, but the planning process is invaluable. This has been my experience as well. I just developed a budget from scratch for the company that I'm currently working for, and it helped me learn a considerable amount about the costs involved. Being a small, fast growing company, we will probably end up tossing out the budget within months (the revenue side is especially difficult to forecast or budget for), but the thought process involved in developing the budget is very helpful.

Business plans, of course, are more involved than budgets. You really have to analyze the market and think carefully about the strategy you are going to use to take advantage of that market. I agree that many business plans are pretty useless. Quite a few of them are little more than marketing material to attract capital from venture capitalists. Having worked at several small start-ups, it's something that I have had to deal with. For example, they want to see a revenue curve that looks like a hockey stick, and you should hit revenue of $100 million in 5 years. There is so much B.S. involved.

In any case, my point is simply that business plans can be very valuable if you use them to force you to think carefully about the business.

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Author: GusSmed Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334131 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 9:49 PM
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Who, in their 30s has to learn that if you tell your boss about his temper they SHOULD fire you?

I don't understand this sentence, as written. Could you clarify it for me?

Do you might it's morally correct for the boss to fire you if you point out a problem in the office? I can't agree with that.

Or do you mean that it's likely that an employer with an anger problem is more likely to fire you than to listen? That's definitely true. Pointing out something like that carries a huge risk, and you have to really be prepared to lose your job.

As a practical matter, you have to be incredibly good at dealing with conflict to pull something like that off. I doubt a letter is the best way to do it, since the written word lacks the emotional nuances of face to face communication. Voices and face are complex devices for communicating emotion.

If you can manage it, it's an incredibly valuable thing to do. But I've never seen it done successfully.

- Gus

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Author: darrenasu One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334142 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/19/2007 11:33 PM
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Hey Madcap, sorry to break up the debate, but I have a question on your annual returns calculator.

I started investing in late 2004 but have not tracked my annualized returns. Using your spreadsheet, I wanted to go back and give it a shot, because I do feel it's important.

The problem is that I don't know how to find the ending value of each month. I have a brokerage account with USAA and I kept a detailed spreadsheet of what I bought, when, and at what price. But I can't find a way to determine exactly what amount I had in the account at the end of each month.

I'm going to call USAA tomorrow and see if there's a trick to it. Until then, I thought I'd ask you if you had any suggestions.

Thanks for sharing your story and your tools on this board.

dw

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Author: desertdaveataol Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334147 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 1:22 AM
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They are playing, like a game, with OPM (Other People's Money). Do I think that they have significant expertise? More than me? Then, why don't they make a living, managing their own money, instead of trying to parasitize me? WendyBG

Exactly! And stock brokers too!

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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334149 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 1:45 AM
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My mom actually came up to me a few years ago and thanked me for never being a burden to them by being one of those "problem" children.

How sweet! Obviously you were raised to be self-supporting and responsible, so tell her she and dad get some of that credit. As you said, I learned much of my financial savvy from them.

They have so many friends and aquaintences that cannot retire because they still support their children in some way.

I have a relative who retired and within a year had to go right back to work to pay off a huge credit card debt one of her grown kids ran up on *her* card. That kind of reckless disregard for a newly-retired parent is appalling to me.
Our son always had one of our CCs since he was 15. It was for emergency use while travelling or for a car towing... whatever. Mostly for my peace of mind. In all that time, through college and his early work years, it never even occurred to him to use that card for pizza and beer or shopping sprees. He totally forgot he's still an authorized signer on the card until last month while he was applying for his first mortgage and the loan officer asked him "what about that huge open credit line?"

Now that he's buying a more expensive house than ours, guess it's time to delete him from our account!


Jeanie

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334165 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 9:34 AM
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Hey Madcap, sorry to break up the debate, but I have a question on your annual returns calculator.

I started investing in late 2004 but have not tracked my annualized returns. Using your spreadsheet, I wanted to go back and give it a shot, because I do feel it's important.

The problem is that I don't know how to find the ending value of each month. I have a brokerage account with USAA and I kept a detailed spreadsheet of what I bought, when, and at what price. But I can't find a way to determine exactly what amount I had in the account at the end of each month.

I'm going to call USAA tomorrow and see if there's a trick to it. Until then, I thought I'd ask you if you had any suggestions.

Thanks for sharing your story and your tools on this board.

dw


The easiest way is usually to look at monthly statements. If you don't have paper statements, check to see if statements are available online.

You could also calculate it manually, but it would take a lot of work. You would have to get quotes for each of your holdings at month-end to determine each position's value, and then you would add in the ending cash or money market balance.

Before you do it manually, I would check with USAA. In dealing with financial institutions, I have found that they can quite often tell you the value at dates at the end of a period such as a month, quarter, or year (and slightly less often, at interim dates).

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Author: OneupOnedown Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334192 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 3:45 PM
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dw,

What you want are historical quotes.

The problem is that I don't know how to find the ending value of each month. I have a brokerage account with USAA and I kept a detailed spreadsheet of what I bought, when, and at what price. But I can't find a way to determine exactly what amount I had in the account at the end of each month.


If you can't download the data directly from your broker. You can get the info you seek manually for any stock ticker and any date.

Google "Historical quote" and the top list is from Big Charts. This is also useful to find the exact closing value of any index or other fund you want to use a benchmark for your performance. So for example you can look up the SP500 on the day you bought or sold the stock and on any other date for the time frame you want to compare, the end of the month or end of the quarter, or end of the year.

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Author: OneupOnedown Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334230 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 8:30 PM
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Who, in their 30s has to learn that if you tell your boss about his temper they SHOULD fire you?

Gus asked:
I don't understand this sentence, as written. Could you clarify it for me?

Do you [mean that] it's morally correct for the boss to fire you if you point out a problem in the office? I can't agree with that.


No.

It's insubordination and is sufficient cause for termination, along with lying, stealing, violence and sexual misconduct, all of which create short term distractions and long term liabilities for a manager or employer.

In the OP's story he fails to acknowledge what seems like an obvious scenario – his unwillingness to follow someone else's procedures or guidance, or to accept constructive criticism, might have been behavior that was driving the boss nuts!

Employees are hired to do work that frees the manager to do other work. A job never includes behavioral analysis and advice unless you are hired to manage other people. Even then your field of focus is restricted to those who report to you and not to your peers and never to your superiors. If a manager wants feedback on their behavior they'll hire a consultant or a shrink. Even if the OP was right and his boss did have a temper, he didn't have the right to take the issue on directly, let alone to take it on a second time.

Or do you mean that it's likely that an employer with an anger problem is more likely to fire you than to listen? That's definitely true. Pointing out something like that carries a huge risk, and you have to really be prepared to lose your job.

As a practical matter, you have to be incredibly good at dealing with conflict to pull something like that off. I doubt a letter is the best way to do it, since the written word lacks the emotional nuances of face to face communication. Voices and face are complex devices for communicating emotion.

If you can manage it, it's an incredibly valuable thing to do. But I've never seen it done successfully.


You've nicely elaborated some practical aspects of this very difficult issue and the reason why many people will not say or do anything. But doing nothing can also take a long term toll on morale, health, and profitability.

And yes, employees who master how to diffuse highly charged situations with their voice, face, and body language become highly valued employees. People with EQ can learn how to “Create Space & Save Face.”

It's useful to understand that people who are under high pressure, upset, angry, yelling, blowing their top, etc. may not be thinking clearly. Stress hormones really do interfere with rational thinking. Anything you say is likely to be misconstrued.

People who are out of control are often very embarrassed after they've had time to calm down. While most will not apologize they really wish everyone could just forget it ever happened and get back to work. Most would rather be more effective, but they don't know what their buttons are or know how to control their emotions & behavior. And so it goes… rinse & repeat. The employees whom they'll rely on and promote are the ones who can duck, get out of the way, or compensate in some other way get the job done anyway.

And as you and other posters have pointed out knowing you are piling up your FU money can help you keep perspective. Until then keeping your sanity can mean staying networked and knowing your value in the marketplace should you have to bail before your boss's bad behavior sinks your division or your company.


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Author: sydsydsyd Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334237 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 9:40 PM
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Even if the OP was right and his boss did have a temper, he didn't have the right to take the issue on directly, let alone to take it on a second time.

There is exactly one instance when it is appropriate to tell your boss just what you think of his behavior: during your exit interview after you hand him your resignation. Been there, done that.

sydsydsyd

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Author: LuckyDog2002 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334242 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 10:12 PM
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There is exactly one instance when it is appropriate to tell your boss just what you think of his behavior: during your exit interview after you hand him your resignation. Been there, done that.

sydsydsyd


that's the worst time to do that, especially if you expect him to give you a reference....best to keep your mouth shut and start anew at the new job with no grumping about previous employer. That comes across as sour grapes...best to be neutral.

I didn't want to hear my employees bitXhing about their former employers or employees, it wasn't productive for either one of us....it just put me on guard around them, namely that they were "complainers".

LuckyDog
night y'all

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Author: sydsydsyd Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334248 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/20/2007 10:48 PM
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that's the worst time to do that, especially if you expect him to give you a reference

I've never had occasion to desire or request a reference from a sh!tty boss. I can't say my career has suffered even slightly as a consequence of my being forthright and refusing to be an asslicker. Your mileage may vary etc.

sydsydsyd

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Author: howdydo100 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334428 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/22/2007 2:15 AM
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hi there madcap,

you elicited great responses and some not so great

but when you put yourself "out there" that is often one's fate!

how brave you are - you're a star!


you know, the funniest thing is that in the middle of this thread of posts, there is this "woody allenesque" post. am i the only one who noticed?
imagine: woody allen(in this case, ariechert)
walks into a room (in this case, this discussion board)
where a bunch of people are talking heatedly (i.e. madcap, wendy, oneuponedown and others)
and in the middle of the fight, woody allen (ariechert) starts talking to the camera about how he was an early "failure" in love.
funny!! thanks, ariechert, things were getting a bit too hot in there.
http://boards.fool.com/Message.asp?mid=25193127

p.s. some of my older kids live with me. i've loaned one of my kids some money to pay back some student loans that had too high an interest rate. i certainly don't expect interest on that loan. i'm not rich, but to give a helping hand is my pleasure. my husband's too. we were born for this.

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Author: VikingErik Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334527 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/22/2007 3:32 PM
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darrenasu wrote:

The problem is that I don't know how to find the ending value of each month. I have a brokerage account with USAA and I kept a detailed spreadsheet of what I bought, when, and at what price. But I can't find a way to determine exactly what amount I had in the account at the end of each month.

If you have all the transactions (from which your total holdings on any date can be derived), then the missing info needed to find the value at the end of each month is the price of each of your holdings at that time. That's not hard to find online, but certainly is a bit labor intensive for many holdings over multiple years.

I might suggest using MS Money or Quicken to do the task, since they can automatically get all the price quotes for you. I use Money 2004 myself, and it's got exactly what you want - a graph for net worth by month, which it calculates based on the transactions you enter and automatic historical price updates. There's free trials available if you want to play with one.

- Erik

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Author: markr33 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334564 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/22/2007 9:42 PM
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You didn't mention the biggest risk of all. He might not be the "type" to be able to run a business successfully. By "type" I mean the whole gamut from being disciplined enough, careful enough, having the proper skills, the drive, etc...

In my case, I have been working for other people for about 30 years (so far) mainly because I know that I am not the "business owner type". Even though I think I am smart enough, have lots of skills, and might even have the drive, I simply don't think I have the necessary discipline to do it properly to have a good chance of success.

I think the most critical factors in business success is discipline and drive, and few people possess those items in the abundance necessary for true business success.


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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334577 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/22/2007 10:15 PM
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<<At the moment, you are not taking any risks. You are building up your assets, in a safe job. That is good. That's why I recced your post. I think that, at the present time, you are doing what you should be doing.

If you start a new business, you will be taking risks.

First, you will need to quit your job, to focus on your new business. (Trying to run a business, out of your employer's office, would be unethical, and would get you fired.)

You have already said that you plan to protect yourself, with a large cash cushion. This is also good.

The larger your cash cushion, the less your risk of running out of money, before your business becomes profitable enough to support yourself. However, before that time, you will be burning through money, which took you time and effort, to accumulate. You will be spending savings. You will also sacrifice your salary, which is an opportunity cost.

There is a risk that your business will never become profitable enough, to support you. (The risk that you may make less than your current salary is less important, since the satisfaction of being your own boss may compensate you.) You may burn through all your money, and go bust. This is a risk you are familiar with, since you have done this before.
>>


That's an interesting list of risks for someone starting a business.

I started my furnace repair business in 1994, and it's interesting to sieve my experience through your filter.

Firstly, I didn't aim very high. My aim was self employment rather than a larger business that would have employees and might offer much larger risks and rewards. My insurance company classifies me as an "Artisan-Craftsman" which I think is accurate enough and is a term I fancy.


I started my business moonlighting while working my regular job doing similar kinds of work for a utility company. I quit that job in 1999 in favor of working only my business.


I used Yellow Pages advertising to attract business. I went too cheap on that and wound up with relatively little work the first year, A larger add in subsequent years easily produced all the work I wanted at a reasonable cost.

A second mistake was that I used a commercial voicemail service, but lots of people don't like leaving messages. The next year I got a cell phone and found that people DO like talking to the repairman who can schedule their call himself.

I had a suitable vehicle all ready. Tools and equipment I already more or less had. Inventories of parts I acquired as needed, taking care not to acquire too much in most cases.

In short, I had a pretty good idea of the business since I was already doing the work for my employer. The mistakes I made the first year were corrected the second year easily enough.

The past two years I've used no paid advertising at all ---I now get more work than I want by referrals or repeat business.

And I'm planning on selling, giving away or simply closing the business by the middle of the year, I no longer need the income it produces.

All in all I made decisions that have panned out well with a high degree of consistency. I've kept costs low and gotten paid top dollar for my services. Most people have been quite happy with my services.

My father was 25 years old when he started a butcher shop with two partners in 1935, so I've had the satisfaction of feeling like I was something of a chip off the old block even if I started my business at age 44 rather than 25.


Seattle Pioneer




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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334579 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/22/2007 10:38 PM
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<I had a pretty good idea of the business since I was already doing the work for my employer.>

Interesting that you responded, SP. In fact, I was thinking of you, when I thought of how an entrepreneur would start a successful business. Artisan-Craftsman...I like that title, too :-).

You have always described how you focused on the customers' needs, how you built up your expertise and clientele, and your careful, risk-reducing, gradual entry, into your business.

Great advice, SP. Thanks.
Wendy



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Author: tmeri Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334586 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/22/2007 11:02 PM
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What kind of business have you owned, Wendy? How would SP's advice apply to a business like you own, or would it not apply?




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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 334609 of 744140
Subject: Re: Net Worth Tracker (and a Shocking Confession Date: 2/23/2007 7:21 AM
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I suspect that after I achieve FI, I would become a consultant for my current company. Basically I could charge my company 1/2 of what they bill my services for and still come out ahead.

This would allow me to continue doing work that I know very well & earn a large chunk of money over a short period of time.

The major downside is that I would rapidly lose touch with the latest & greatest technology in my field so I might only be employable as a consultant for 2-4 years or so.

Jim

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