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OK, so I'm not Michael J. Fox in a cheezy 80's movie, but you'll get the idea.

I recently sat down and prepared a personal Balance Sheet. The resulting net worth on my freshly minted spreadsheet was higher than I expected and much higher than I would have predicted had you asked me to forecast my future net worth 10 years ago.

My "aha" moment came as I realized that the majority of my current net worth can be traced back to a single decision, made over and over. While admittedly oversimplified, this single decision can be called the "secret" to my success. In 1995, I bought a used 1992 Miata with 9,000 miles. Every year since, I've thought about upgrading my car to something newer, cooler, even sexier. I look, I drool, yet each time I decide to keep driving my reliable Miata.

In 1999, I made my last payment on the car.
In 2000, thanks to the additional FCF, I bought a lot on the water. If I still had a car payment, I could not have afforded the lot.

In 2001, we moved. Instead of sell our house, we chose to rent it out. I could just afford to keep the house and pay for a new one. If I still had a car payment, I could not have afforded to keep the old house as a rental.

In 2002, repeat. Now I own 2 rental properties and still driving with the top down.

In 2004, I picked up our 3rd rental property. This time I didn't have to move. I could afford to buy the property as an investment. In each case, the difference between investing and not investing was about the same as my car payment. Still driving with the top down.

Now, we are finally in a position to achieve a long-time goal - we broke ground on our waterfront lot. Very exciting - thanks to a frugal DW, other LBYM principles, and that same 1992 Miata, now with 119k miles.

So looking back, I could have upgraded my ride and driven a cool, new, shiny car that holds more than 1 friend, or I could keep the Miata. Over and over, I picked keep the Miata, and as a result I could afford to build true net worth by investing the freed up cash in real estate. So it's not really a secret, but it will be with great satisfaction that I park my '92 Miata in the garage of our beautiful lake house when it is finished next summer.

Perhaps when the house is done I'll trade in the Miata.....or just pick up another property.

Happy New Year

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