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During my public service days, I had a very interesting co-worker named Tony. To the casual observer, we were very similar. We were both the same age, worked in the same department, and had the exact same titles. We were both construction inspectors.
But beyond those superficial characteristics, we were very different. I, for lack of a better term, was SAT smart. Tony, for lack of a better term, was compound-interest smart. Here’s the skinny on our differences as they stood way back in 1997.
Me
| Education | Bachelor’s degree, just enrolled in graduate school. |
| Government Salary | $42K. |
| After Work Activities | Read a book, sleep. |
| Marital Status | Single, no girlfriend in sight. |
| Housing | First foray into home-ownership, a one-bedroom condo. |
| Money Habits | Save when necessary, but mostly live paycheck to paycheck. |
Tony
| Education | Associate’s degree. |
| Government Salary | $42K. |
| After Work Activities | A side-hustle landscaping business he started just after high school. |
| Marital Status | Newly married to a fabulous girl. |
| Housing | Nice single-family home in a nice neighborhood. |
| Money Habits | Spend wisely and save for the future. |
Now before I explain two additional differences between Tony and me, I just want to make clear that Tony wasn’t a dolt. Yes, I could out score him on the SAT and other standardized tests. But it wouldn’t be a total blowout. If we both prepared for the same standardized test, I would rank in the 80-85 percentile and he would rank in the 65-70 percentile. Defining myself as SAT smart was just a shorthanded way of saying I had a slightly greater aptitude for things such as calculus, statistics, and programming.
Okay, with that important qualifier out of the way, here’s the first additional difference between Tony and me that needs to be addressed: our respective net worth.
In either 1995 or 1996, I forget the exact year, I was on an asphalt job with Tony and we broke for lunch. Before we headed to All-American Burgers, however, Tony needed to stop by his bank to make a contribution to his mutual fund.
I don’t remember what bank it was, nor do I remember what mutual fund Tony invested his money in. All I know is that he showed me his account balance and it was over $900K. Nine hundred freakin’ K! By the time 1997 rolled around, he was surely a millionaire. I on the other hand had a net worth around $10K in 1997. Pretty pathetic.
And speaking of something being pretty pathetic, here’s the second additional difference between Tony and me: I was a snob and he wasn’t.
Tony was the embodiment of the Millionaire Next Door. And I didn’t just work with him, I was friends with him. Heck, we even played ice hockey together. So did I ask him how he amassed such a fortune at the tender age of 36? Hell no. After all, what could someone with a lowly associate’s degree teach me? In my warped mind, wisdom only came from those with an elite credential. And since Tony didn’t have one, I chalked up his wealth to luck. He surely had the benefit of a large inheritance I concluded.
Tony, on the other hand, didn’t believe in credentialized wisdom. His father only had a high school diploma. But his father was very savvy when it came to personal finance, and he taught Tony everything he knew about saving, mutual funds, and compound interest. And because Tony wasn’t in thrall of a fancy piece of paper with Latin words written on it, he didn’t sneer at his father’s uncredentialized teachings. He embraced them—with gusto.
Tony, in effect, mastered the money game before he was even out of high school. Is it any wonder then that he was a millionaire as the 90s came to a close and I was a broke loser?
Final Thoughts
In 2003, I had my financial come-to-Jesus moment. Mrs. Groovy introduced me to Dave Ramsey. And it was only after reading his Total Money Makeover that I had the sense to start picking Tony’s brain.
Tony’s financial rise wasn’t the result of an inheritance. It was the result of work, discipline, and faith. He lived on his government paycheck, poured every dime he made from his landscaping business into his mutual fund, and let the magic of compound interest do the rest. It was as simple as that. Nothing fancy or highfalutin. And certainly nothing beyond the grasp of the Average Joe or Josephine.
But it was beyond the grasp of my supposedly high-powered brain until I was in my early 40s.
In pondering the main takeaway from this post, I couldn’t help but think of some lyrics from a Brooks and Dunn song called Red Dirt Road. Here they are:
I learned the path to heaven
Is full of sinners and believers
Learned that happiness on earth
Ain’t just for high achievers
And here’s the takeaway (thank you, Messrs. Brooks and Dunn):
Wealth on earth ain’t just for high achievers. You don’t need a PhD from Wharton or a law degree from Harvard to get rich. You can get rich even if you have a crappy government job. But you got to have a stomach for work and a fondness for saving—like my friend Tony. And most importantly, you got to be compound-interest smart. Just like my friend Tony.
Okay, groovy freedomist, that’s all I got. What say you? Is it better to be compound-interest smart than SAT smart? Or are you screwed in today’s America if you’re not Ivy-League material? Let me know what you think when you get a chance. Peace.
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