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5 Money Secrets From a Corporate Exec


It's 2013 and I'm working my first job out of college where I'm navigating, what were for me at the time, the choppy waters of personal finance.


I'm investing in my 401K and just dealt with an unexpected car repair that nearly sent my bank account into the red.


Then, I receive the following email: "Please Join Us to Celebrate Melanie's Early Retirement!"


Melanie was 50 years old.


"Wait a minute," I said to myself, "I thought you had to be 65 to retire."


I was confused. So I attend her early retirement party. I sulk around and pick at the fruit tray and the cake that cheerfully reads: "Congratulations, Melanie!"


And I'm more antisocial than normal, lost in my thoughts on just how in the heck she's doing it.


I thought you couldn't even access your 401K until you were 60?


Where's she going to get money?


Doesn't she have bills to pay?


I had a lot of questions. So I set up time with her get answers. I walked into her office, made some pleasantries, then point-blank asked: "How are you retiring early?"


Here's what I learned.


YOUR LIFE WON'T LOOK AS NICE AS EVERYONE ELSE'S


The first thing Melanie said is this: "If you want to retire early - or, in other words, if you want financial freedom - then you need to be okay with the fact that, right now, your life won't look as nice as everyone else's."


She said, "When you compare yourself to your friends, you won't have the newest car, you won't live in the high-rise at the city center, and you won't be taking fancy vacations. But, eventually, you'll be able to afford those things if you want them, with one important difference - you'll be financially free, while your friends will still be working."


This was hard to hear; the self-comparison game was alive and well, even then. And one person in particular came to mind.


You know the one. The girl with the cutest clothes, and the prettiest home decor, and the fancy car, who lives in the best location, and goes on the swankiest trips.


But then I started to wonder about this girl's finances. Does she have any savings? Is she in debt from all those nice things? Does she enjoy her job? Her life?


It's hard to know how someone FEELS just by looking at their life.


All I knew is that I felt stressed about money, and I didn't want to feel that way anymore.


So if that meant driving an older car, wearing older clothes, and living in a place that didn't look as nice as everyone else's and maybe took a little longer to get to - I could figure out how to make that work.


DRIVE THE SAME CAR UNTIL IT FAILS


The next thing Melanie said is: "Own as few cars as possible in your life. Drive each car until it fails."


I should mention: at the time, leasing cars wasn't really a thing yet. So when she said 'own as few cars as possible' - she didn't mean 'lease a car'.


She meant buy a car, and don't get another one until the car you have fails in such a bad way that it would be cheaper for you to buy a different car than to fix your current one.


If you can avoid a car payment, even better, because oftentimes the interest rate can be quite high. So, if possible, buy a car you can pay for in full, then drive it to failure before buying another one. And always buy used.


If memory serves, Melanie had had only 3 cars in her life at the time of this conversation.


READ THESE THREE BOOKS


Three book recommendations Melanie gave me were Rich Dad, Poor Dad by Robert Kiyosaki, Your Money Or Your Life by Vicki Robin, and The Millionaire Next Door by Thomas Stanley & William Danko.


Without a shadow of a doubt, reading these three books dramatically changed my life.


Digging deeper into these subjects with these authors really helped me learn the basics of things like:

  • How to buy assets and not liabilities

  • How the rich get richer and the poor get poorer

  • How most of America's wealthy don't look or act like what we'd expect

  • How wealth isn't how much you MAKE but how much you KEEP

  • How to stop thinking in terms of "This shirt costs $65" and start thinking in terms of "This shirt costs 2 hours of my life"

And after implementing the teachings of these books, that's when I really started to see things begin to change.


INVEST IN REAL ESTATE


One of the investment strategies that had worked well for Melanie was investing in real estate with a group. (Robert Kiyosaki is also big on real estate investing.)


She said she was part of a group that would go in together to invest in big property projects, like apartment complexes.


Instead of one person having to fund the entire project alone, you can join a group of people who each provide smaller chunks of money to invest in the project together. Whatever percentage you put into the pool, that's the percentage you'll get back on the return when the property is sold or rented out.


This is a nice option if you want to invest in real estate but don't have enough to invest in a large real estate project on your own.


Different groups work in different ways, and the formal groups Cory and I have explored do require a hefty minimum, but there are other ways to use this option.


For example, you could talk to friends and family about going in on the purchase of a house, then use that house as an AirBnB or a long-term rental.


Same as in the formal group investments, when you collect rent or AirBnB earnings or profits from the sale of the property, you'll divide it up based on the percentage each person put into the purchase of the house.


Investing in real estate can be scary, but if you're willing to work out the details and be patient, it's often well worth it. It certainly has been for me.


VACATION CLOSE TO HOME


I'm a big fan of international travel, so this was another one that was hard to stomach.


But, thankfully, Melanie wasn't there to tell me what I wanted to hear; she was there to tell me how she was retiring early. And this was part of her strategy.


Reminiscent of item #1, she said, "Vacations don't have to be to a faraway place or look super fancy. Find cool spots within a day's drive of your house to explore. You'll save loads of money on flights, rental cars, and Ubers. If you're into camping, you can do that for almost free. Or if you're willing to travel with a group, you can often save on accommodations that way, too."


It was tough, but she made a good point. And for the next 5 years, the only international travel I did was for work.


I'll admit to using airline points for a couple domestic flights for big events like meeting my then-boyfriend's family and attending a bachelorette party, but the majority of the 'vacations' I had during that period were to places I could drive to like New Orleans (which was a group trip where we carpooled and split accommodations) or the Texas Gulf Coast (where we typically camp for free).


So try it out - do a quick online search of places within a 6 hour drive of your city and cool things to do there. I bet you'll be pleasantly surprised.


So there you have it - 5 money secrets from a corporate exec.


PS - I want to acknowledge how uncomfortable it was to set up this meeting and ask this question.


Money is such a taboo subject in our culture, which needs to change because the more we talk about it the more we learn - which was probably my biggest learning of all from this experience.


As I say often, this conversation with Melanie changed my life forever, and had I not pushed past the fear I felt when I considered asking her advice, I never would have received her valuable input.


So, ask questions. Seek guidance. Find mentors. Talk about money. And do it now.


A year from now you'll be glad you did.


(and if ya wanna know what happened after that conversation with Melanie, you can see what happened next here!)

 

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