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Freedom Fighter Interview #19 – Michael @ Financially Alert

Gen Y Finance Guy Freedom Fighter, Interview 17 Comments

Today we have our 19th Freedom Fighter interview in this series.

Our guest today started an IT services company a couple years out of school that he and his partners grew to over $2M in annual revenues. After 10 years running his own business they decided to sell it for a sum that earned each partner a 10 year compounded return of 69%. Each partner put in $2,000 initially to get the business going and besides the income they enjoyed while running the company they turned that initial investment to $380,000 (each). After selling his company in 2012, Michael, stayed on the payroll for a while until negotiating a severance package to retire early and be home for his new daughter.

I will let Michael take it from here in his interview below:

Michael

Who are you and what do you do? What is your story? How are you fighting for your Freedom? Where did you start, where in the journey are you, and where do you ultimately want to end up?

My name is Michael.  I’m a Dad, husband, blogger, and investor. I guess I’ve been a freedom fighter since I was a little kid. I was always looking for an angle, or hustling something on the side.  I can clearly remember brokering playground deals in primary school, selling baseball cards, candy, or firecrackers!  You could say I’ve always had the entrepreneurial itch.

After my parents got divorced, we downsized into a much smaller house and finances became tight.  I decided then in my early teens that this was no way to live and I would become a millionaire by the age of 30.  Of course I had no clue how I was going to do it, but the mind and money have a very special relationship. You can read about my decision process here.

A few years out of University, I started an IT services company with a couple friends.  We supported desktops, servers, and networks for small and medium sized businesses. We had humble beginnings, but grew it steadily over a decade to just under $2MM revenue per year.

While we were profitable throughout and never took on any debt, it was also difficult to scale a service business.  Despite making a comfortable 6-figure income, I felt like I was stuck.  So in 2012, we sold the company to a national IT company and spent the next year and a half helping with the transition.

With the arrival of my daughter in mid-2013, I decided to make my exit into “early retirement”. I negotiated a generous severance package from the acquiring company and headed home to be with my family.  It’s been an incredible blessing from God that I’ll never take for granted.

It was really quite strange being at home at first – no more going into the office, dealing with business problems, or HR issues!  I loved it.  But at the same time, there was still something missing.  So, I decided to take on a new challenge by building my next business completely online.

To that end, I started a personal finance site, www.financiallyalert.com, to share, inspire, and learn with a community of like-minded friends.  I love to explore the relationship between money and mind with the hopes of helping others to find financial freedom and independence sooner than later.

Remember, it’s never too late to become financially alert!

What is your favorite Quote or Mantra that you live by?

It’s all a matter of perception!  Mastering our minds and how we perceive things makes all the difference in how we make decisions.  Decisions fuel our drive and actionable choices we make in life.  So, I believe strongly that financial freedom is a choice.  Once you come to this realization, building wealth is just mechanics from there on in.

Where in the world are you from?

I am from a Los Angeles suburb called, Covina, which used to be covered in orange trees in the early 1900’s.  After high school, I moved to sunny San Diego to attend the University of California, San Diego (UCSD).  The weather is pretty much perfect here year round and the traffic much better than LA and this is where my family calls home now.

I love being able to go fishing in the SD Bay and local reservoirs anytime. We have gorgeous beaches and the best tasting fish tacos this side of the border (did I mention I’m a food blogger also?)!

What is the worst financial decision you have ever made?

This one is pretty easy. My first rental property was a complete BUST!  Read more about my real estate investing failure here.

What is the best financial decision you have ever made?

My best financial decision was starting a business when I was 25.  My partners and I each put up $2000 to launch the company and the average annual return year over year for 10 years straight was a fat 69% (based on return of equity when we sold).

Are you a morning or a night person? What time do you wake up and go to sleep?

I’m definitely a night owl… always have been.  However, there are some very successful people that swear by being a morning person.  Maybe I’ll try it someday.

For now, I go to sleep around 3:30am, wake up around 8am, and take a 1-2 hr nap during the afternoon (coincides with my kids’ naps).  A bit abnormal, I know!

What is your definition of Financial Freedom? And what is your FREEDOM number?

My definition of Financial Freedom is having enough money to do whatever you like on a daily basis.  This doesn’t necessarily mean you are financially independent (can live off your asset basis indefinitely), but you do have enough to be free of financially worry… maybe you work part time, or have a side business consulting, etc., whatever it is it’s on your own terms.

My financial freedom number is $1M and my financial independence number is $10M.  I’ve got quite a ways to go to hit my financial independence number, but I’m pretty confident I’ll figure it out.

What is your favorite Asset Class to invest in (i.e Real Estate, Stocks, Bonds, Peer to Peer lending, etc)? Why? And what platforms do you use (i.e TD Ameritradefor stocks, Realty Shares for Real Estate, Prosper for Peer to Peer lending, etc.).

My favorite asset class is real estate.  It takes a little more leg work, but if you purchase the right properties at the right time, you can have an indefinite return on investment.  Invest for cash flow and allow appreciation to make you rich over time. And, yes, this is much easier said than done!  (For each investment home I’ve actually purchased, I’ve probably looked at 1000 more)

I also use Realty Shares to invest in flips and debt deals. It’s been great for me now that I have less free time to search for physical properties.

Although I have a large chunk of my assets in real estate, it’s important to have a balanced Net Worth Allocation. To calculate your own, you can download my tool for free.  I’m also a big fan of P2P lending (I use Lending Club at the moment).

What is your favorite online financial resource, paid or free (i.e. MintPersonal Capital, blogs, podcasts, Tasty Trade, etc.)?

Personal Capital gives a great snapshot of your overall cash flow and net worth. I also use Merrill Lynch’s wealth management tool. My favorite personal finance blogs are Financial Samurai and Retire by 40.  Oh, and let’s not forget Gen Y Finance Guy – love the $10M goal and progress tracking…awesome!

My favorite podcasts are: Eventual Millionaire, Michael Hyatt, and Smart Passive Income.

When it comes to building wealth, do you spend more time figuring out how to cut expenses or increase income? Why?

I try to spend more time on increasing income because cutting expenses is a finite task.  Increasing income though has unlimited potential.  Having said that, it always make sense to manage your cash flow efficiently as a good habit that rich people keep.

How many hours a week do you watch TV? What’s your favorite show?

I used to watch a lot more TV, but at some point I realized I was killing my productivity time.  I still do indulge in specific shows like Game of Thrones, Suits, and Shark Tank.  I’m guessing I still watch 8 hours per week on average.

If you had to recommend 1 book, what would it be? And why?

My favorite book is probably Unlimited Power by Anthony Robbins.  He taught me that I have choices in life and can control my own destiny. Once you figure that out, it’s impossible to fail because you’ll always be falling forward. And this doesn’t just apply to money.

What is the best piece of advice you have ever received or what advice would you give to the readers?

The best piece of advice I’ve ever been given is to become a life-long learner which I learned primarily from my Mom.  For me this means reading constantly, listening to audiobooks/programs, attending workshops, etc.  Tony Robbins says, “If we’re not growing, we’re dying.  There’s no in between!” This applies to money, relationships, health, and all other aspects of our lives.

My best piece of advice I can give is to live a life of gratitude. Remember, you’ve already won the lottery right when you were born!  So, never take your life for granted, or settle for good enough. I believe we all have enormous untapped potential that is available for us. Not living life to our fullest potential is cheating yourself and your Creator. It’s up to you to uncover your talents, be courageous enough to share them with others, and play to win.

What does living life by design look like to you? A typical day, week, month, year, or whatever?

For me living a life by design starts with a balance of all things good.  This means ample time spent with my wife, children, family, and friends.  Next it means spending sometime pursing my passion to learn and give back to others.

I would also take time to travel to interesting international destinations in order to experience new cultures and cuisines.  Finally, I would attend conferences on personal development, investing, and business throughout the year.

What is holding you back from living life by design?

I don’t think much, but there are always goals in motion.  At some point I would love to teach or speak in a more formal setting.  I believe the journey is half the fun and what you become in the process while attaining a goal is invaluable.

Where can we find you online? If you’re a blogger, this is the perfect plug to talk about your blog and why it’s great 

You can find my blog at Financially Alert.  I discuss the relationship of money and mind, and all things in between.  I explore questions like:

Why do you do what you do with your money?  How can you make lasting change to your money habits?  How do you consciously move towards financial freedom?

We’ll explore developing a mindset for wealth and analyze strategies and tactics for to achieve extraordinary financial results.  I will also share my own successes, and failures.

Finally, using my free assessment tool, you can determine where you fall into the 6 Stages of Financial Consciousness.  Once you know where you’re at, you can figure out where to head to.

Remember, it’s never too late to become financially alert!!

Comments 17

  1. Great article Michael. It’s always a joy when people open up about their journey and goals. I never thought about differentiating between financial freedom and financial independence. That is a subtle by important distinction.

    Cheers.

  2. Great story & interview, Michael! You’ve got audacious goals (you & GYFG – both!) but what’s admirable for the two of you is that the pivotal focus isn’t just money – it’s about the whole picture. How you view your relationships, health, mindset, etc. I think that’s the incredible way to take on all of your goals in a holistic way. How do all the pieces work together simultaneously to get you to where you want to be? Kudos as well to being a life-long learner, especially since it is a lesson learned from your Mom. 🙂

    1. Thanks for reading Alyssa. Great question! For me, I think things fall into place when my mind is centered and I feel like I’m living a life of purpose. And while I certainly try to live a balanced life, I’m also susceptible to neglecting certain areas of my life for too long.

      BTW, I love the work you’re doing over at Generation YRA!

  3. Great story and very inspiring! I especially liked your comment about focusing your efforts on increasing income, rather than on reducing your spending, as increasing income has unlimited potential. Definitely something I need to remind myself constantly to focus on. I think focusing on reducing spending can sometimes be the easy, default setting, whereas challenging ourselves to think of ways to earn more is harder, but can have much greater rewards.

  4. Thanks for taking the time to respond Freedom 40. You’re right. It is definitely more challenging to figure out ways to earn more, but the rewards are definitely greater.

    I believe a business or real estate have the greatest reward potential relative to effort and offer some nice tax advantages. Of course there are many other ways to achieve FIRE. Looks like you’re on a great trajectory yourself! Congrats.

  5. Michael, great post and great story! Thanks for sharing your journey, I’m a new reader to your site as well. Your stated goal of “living a life of purpose” is great, Scott Adams has noted that the way to a satisfying life is not to have more money-and-toys, but to “be useful.” Also fully respect your priority to be with your children, you are “keeping the main thing, the main thing.”

    Really admire your differentiation of financial “freedom” and “independence”, never thought about it in those terms but share the same philosophy. I have a guest post coming up on this GYFG site on December 17, addressing that very subject; my own strategy has been to address “risk” quite differently for reaching “freedom” (more conservatively) and “independence” (a little breathing room provided by “freedom” allows for more risk-taking.

    P.S. – San Diego is a fantastic place to be, and to raise kids. You have a great head-start to living the dream!

    1. Post
      Author

      Yes, Michael thanks for sharing your story with the GYFG community.

      Stoked that we have actually been able to connect both on and offline.

      Cheers!

      1. The pleasure is mine Dom! Thanks so much for sharing with your GYFG community.

        As you know you’ve inspired me to create my own interview series. So, I can’t wait to feature your amazing personal story. I know it will be a hit.

        Anyhow, so glad we’ve connected. Your drive aligns perfectly with mine… even if I am home playing with my kids most days. 😉

    2. Jay, I appreciate you taking the time to comment! I’m looking forward to reading your guest post here on GYFG soon. It sounds like you have a wealth of wisdom and I thoroughly enjoyed reading your interview as well. How do you like living up in N. Cal? I love living in San Diego because it doesn’t have the congestion like LA, but it’s still close enough to go visit family and friends that still live there.

      It’s certainly been a huge blessing to focus on my family at this point. I’m not able to save 50% anymore, but it’s just even more incentive to create a side hustle that generates passive income. I figure once the kids are in school full time, I should have more capacity. With any luck, I can use the blog as a launch platform for other products or services at that point.

      1. Michael, thanks for asking! Gotta say, N. Cal is the tits! Outside of larger urban areas, the land is practically free. You can say ‘hi’ or ‘excuse me’ to a stranger in a supermarket, and they will say ‘hi’ or ‘no problem’ back. If you signal in traffic to switch lanes, people don’t take it as a challenge to eff you up and instead will adjust to allow you to merge. People don’t throw their used gum on the ground, or urinate in public while mad-dogging anyone who glances their way. So, yeah, N. Cal is great. Now, I leave the property 3-4 times a week and love the privacy, quiet, and respect for others.

        Population density is a pretty big problem in S. Cal as you know. I used to drive quite a bit for my many jobs in Los Angeles, and Covina was a ‘piss-stop’ both literally and figuratively. My wife and I used to drive 6 miles to a favorite breakfast place on weekends, and thought nothing of 35 minutes each way. I had many jobs in San Diego/Oceanside, and in 1990 it was a 2-hour drive but by 2010 it was a 3-hour drive. I like S.D. because everything is 20 minutes away no matter what. Love La Jolla, Imperial Beach, Mission Bay. Everything cool about L.A is right there in San Diego for 2/3 the price, and the people only have 2/3 the hostility. Plus, geographically it won’t get much bigger or denser. Nice~!

  6. Pingback: Focusing on Earning More – Freedom 40 Plan

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