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I’ll never forget Lori. I met her one weekend during my Junior year at Buffalo University.
Lori was in town visiting her best friend Mary (my housemate’s girlfriend). And, as luck would have it, Lori’s visit coincided with a house party we were throwing.
So there we were, 50 to 60 of America’s somewhat best and brightest, imbibing heavily on Genny Cream Ale, and rocking to the musical styling’s of the Doors, the Ramones, and the J. Geils Band. And, then, out of nowhere, Lori challenged me to a shot contest.
I was aghast. Where did she get the chutzpah to challenge me? I was in prime drinking shape, for heaven’s sake! In a battle of livers, she was severely outgunned. But what was I to do? Decline? Walk away? She challenged my manhood! In front of my housemates, no less! I had no choice but to school the young lady.
Well, I won’t get into the gory details, but things didn’t exactly go my way. Lori buried my sorry arse. Or at least I thought so. It wasn’t until a few months after this infamy that the truth was finally revealed. “Didn’t you notice that the Jack Daniels was being poured from two different bottles?” one of my housemates chortled. “Your shots were filled with Jacks. Hers were filled with ice tea.”
Well, I”ll be damned, I thought to myself. What a clueless bastard I was!
Missing Vital Financial Clues
Sadly, my inability to discern important clues wasn’t limited to social settings involving alcohol and unscrupulous housemates. It also dogged my financial life. In fact, up until my forties, my failure to recognize financial clues had left my financial condition so racked by mediocrity that I used to jokingly describe my situation as follows:
“Never hath God given a man so much talent and seen so little come of it.”
My humble brain missed so many key financial clues, it took me decades to turn my financial life around. Here, then, are some of those clues.
Clue Number One: There is life outside of New York.
While growing up on Long Island, I was very parochial. In my mind, New York City and its suburbs were the center of universe. If you lived elsewhere, you surely had a bleak, dreary existence. “New York, New York. So nice they had to name it twice.”
But then I went to college in Buffalo, New York, and a funny thing happened. I was no longer in the center of the universe, but life was still good. Sure, Buffalo didn’t have a cultural scene comparable to New York. But what scene it did have was more than adequate for my needs. And the people of Buffalo were hardly a sorry lot. They were great, fun-loving people. In fact—you haven’t lived until you’ve gone bowling with a bunch of Polish-Americans!
So here was a great financial clue. No single city in America is the center of the universe. If one city isn’t meeting your needs, whether that’s socially, spiritually, or FINANCIALLY, there are plenty of others that will. You have options.
But because I was clueless—and a snob—I stayed on Long Island after college and suffered financially for over twenty years.
Clue Number Two: Learning never ends.
A day or two after my last final of my freshman year, I remember walking into the room of a floor-mate while he was packing for home. And what he was packing at that particular moment almost floored me. He was packing his books! I had just sold every freakin’ book I bought for the recent semester back to the college bookstore.
“You’re packing your books?” I asked rather perplexed.
“Yes,” he retorted. “I’ll read them again this summer. Besides, they’re nice to have around for a reference.”
“Read again?” I remember thinking. “Use for a reference?” What an effing weirdo.
But this effing weirdo was studying to be a chemical engineer. After he graduated the following year, a major chemical company offered him a starting salary of over $60K. And $60K back in 1981 was very good money for a 22-year-old. Heck, it’s very good money for a 22-year-old now.
So let me tease out the financial clue here. Learning isn’t something you do for a certain number of hours over a certain number of weeks. In others words, learning doesn’t stop after school. Learning is something you do every day. Learning is how you grow. Learning is how you become more valuable to others—especially to those others who are looking to hire or promote you.
But because I was clueless—and a partial philistine—I didn’t grasp the power of relentlessly pursuing personal development until I was well into my 30s.
Clue Number Three: Don’t buy things to impress others.
In the late 1980s, I went to Boston for a cousin’s wedding and forgot my shoes. To rectify this oversight, my grandfather took me to one of the last remaining shoe factories in New England.
The shoes available at this factory’s showroom weren’t very appealing. They were all clunky looking, very old-man like. But there was nothing I could do. I needed a pair of shoes, and grandpa was all excited about my feet being wrapped in the last vestiges of the once great Yankee shoe industry. So I plunked down twenty-five bucks for some unsightly shoes.
The next day at the wedding ceremony, I was sitting in the church pew and feeling very self-conscious about the fashion statement my shoes were making. How was I going to impress any of the bridesmaids with these boats on my feet? And who sits next to me, of course? Jay.
Jay was the husband of another cousin. He graduated from Dartmouth a few years earlier with an MBA and was working at Fidelity. What he did at Fidelity, I couldn’t say. But he was making over half a million dollars a year. And sure enough, not too long after we exchanged pleasantries, he looked down at my feet and said, “Nice shoes.”
I, of course, thought he was mocking me. But just before I threw grandpa under the bus, I looked down at his shoes and noticed that they were even more clunky looking than mine.
“Where did you get your shoes?” I asked.
“They were selling surplus stuff at the national guard airbase a few weeks ago,” he answered. “I got these beauties for ten dollars.”
So let’s see what we got here. The millionaire was wearing ten dollar shoes and was proud of it. The zero-aire was wearing shoes two and half-times more expensive and was mortified by it. Could a financial clue be any more clear? You don’t buy things to impress others. You buy what you need. And if ten dollar shoes get the job done, you buy ten dollar shoes. You don’t buy twenty-five dollar shoes.
But because I was clueless—and very much sucked into the hedonic treadmill—I spent decades, “buying stuff I didn’t need with money I didn’t have to impress people I didn’t like.”
Clue Number Four: Don’t buy individual stocks.
In the early 1990s, my father and I joined forces to make our mark in the world of investing. We had each read Peter Lynch’s One Up on Wall Street, so we knew everything we needed to know about buying stocks.
We began our assault on Wall Street by each contributing $5,000 to our joint brokerage account. But things quickly went south. In a little over a year, our portfolio’s value dived from $10K to slightly more than $1K. Our worst bet was throwing $5K at a company trying to develop an erection cream (I kid you not). And when this company failed to get FDA approval, our $5K turned into $0K overnight.
The financial clue here, of course, was to not invest in individual stocks. But because I was clueless—and full of hubris—I blamed my father for our demise. Yes, it was all his fault. He was the one who came up with the erection cream company, for heaven’s sake! Sure, I failed to study the fundamentals of the companies we invested in. How important was a company’s P/E ratio anyway? And, sure, I thought every company we invested in—especially the erection cream company—was going to make us rich. But these inconvenient facts were beside the point. Dad was the real problem. And I vowed that the next time I had money to invest, I would show him and the world how to pick stocks.
Clue Number Five: Get money to invest and invest in a mutual fund.
Anthony was a co-worker at my previous job. We had the same title and the same salary.
One day after we had lunch together, he asked if we could stop by his bank before we headed back to the job site. He needed to make a deposit. And since there was nothing pressing at the job site (it was a government job, after all), I readily agreed.
Anthony wasn’t making a deposit into a savings account. He was making a deposit into a mutual fund. Since high school, he had a one-man landscaping business. And every dime he made from this side-hustle went into that mutual fund—over twelve years of methodical investing.
After he made the deposit, he asked the teller for a print out of his account balance. He then took the print out and showed it to me. He had over half a million dollars in his account.
So let me paint a scene for you. It’s the mid-1990s. We have two fellows. One is a few years older and college educated. The other isn’t book smart, but has a knack for earning extra money and a knack for saving. The older, wiser fellow is broke. The younger, industrious fellow is a financial rock star. And he didn’t get that way with smoke and mirrors (or an inheritance). He got that way by taking the $10K-$15K in profits his landscaping business generated every year and putting that money into a boring mutual fund.
The financial clue that Anthony provided was breathtakingly simple. Get a second job and use the money from that gig to invest in a mutual fund. Anyone could do it. But because I was clueless—and an egomaniac—I couldn’t admit that unsophisticated Anthony had put me to shame. No, I had to make excuses for why my financial life wasn’t on a similar trajectory. Anthony was a workaholic—and a miser. Who wanted that kind of life? Not me. I wanted to enjoy life while I was young.
But Anthony wasn’t a workaholic (his side-hustle entailed ten hours a week for six months out of the year), and he wasn’t a miser (he had just as much stuff as I had). I simply preferred fiction to the cold, hard truth. And because of this, my financial renaissance had to wait another ten years.
Final Thoughts
Thankfully, I’m no longer a financial ignoramus. Mrs. Groovy came into my life roughly sixteen years ago and introduced me to Dave Ramsey. I’ve been studying personal finance ever since, and sniffing out financial clues is now second nature to me. But what about you? Have you missed financial clues in your past? Are you still missing financial clues? I’d love to hear about your adventures in financial sleuthing.
Okay, groovy freedomists, that’s all I got. Have a great weekend!
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