After two and a half years of writing this blog, I’m finally ready to share my back story with my readers. Some might find it hard to believe that I grew up on welfare and had drug addict parents. To be honest, from my current vantage point, that life seems like just a dream. The following was originally published as a guest post over at Financial Samurai about 2 years ago. After reading some posts between Rich and his cousin Penny, I was reminded of my own past, and inspired to share my story.
They say the best time to plant a tree is 20 years ago. You know when the second best time is? TODAY!
As you are about to discover, it doesn’t matter where you start in life, what matters is how you play the hand you were dealt. You can stand around and complain how the world is unfair, and yes it’s very unfair…get over it. Complaining and dwelling on your dire circumstances will do nothing to improve your life, so don’t waste your time. The thing to remember is that successful people do what unsuccessful people are unwilling to do.
We live in unprecedented times with more opportunity than any other time in history. You just have to decide if you’re willing to put in the work to achieve your vision of success.
You could say I’m one of those rags to riches stories in the making. I entered this world like most, in a hospital room naked and screaming. However, I entered the world with absolutely no advantage. Some might say I was dealt a crap hand. I grew up in a low-income area, where my family and most other families were on welfare or some kind of government support. Growing up I slept on the hard-floor of my grandmother’s 2-bedroom apartment with my 3 brothers, while my grandmother and mom shared a bedroom, and my uncle took the other room.
Shit, we were so poor that my grandmother would use the oven to heat the apartment (not for cooking for, instead cracking the oven door while it was on with nothing in it). That couldn’t have been safe. And to this day I don’t really know if it was actually cheaper to heat the apartment using the oven vs. the actual heating unit. Either way my grandmother was determined it was the best and cheapest way to heat the house.
MY PARENTS WERE NOT ROLE MODELS
My mom never held down a job longer than a few months and is both an alcoholic and drug addict. You can imagine that it would be pretty hard to hold down a job under these circumstances. I still remember days where she would pile my brothers and I into a car to go and buy drugs with her food stamps. Luckily, we lived with our grandmother who always made sure we had something to eat, even if was just a bologna sandwich.
Oh, and my dad was a real winner himself. He is a drug addict and meth manufacturer. A real pair if you ask me. I can actually recall memories of being in a trailer out in the middle of nowhere, while my dad was extracting the pseudoephedrine from cold medicine to use in his meth cook. There were times when he would come home from a cook gone wrong and had his hands wrapped in gauze.
You could only guess that the batch had exploded (later in life he confirmed this by the stories he told). This might all sound like a scene out of Breaking Bad, and after watching the series, that wouldn’t be too far from the truth. My father has been incarcerated more times that I can count and has spent at least 10-years of his life behind bars.
My parents and their friends just like them were the kinds of “role models” I had growing up. If that’s what you want to call them. I could probably count on one hand how many of them actually finished high school. I had to reach out to people outside my circle of influence and live vicariously through the people I admired. From an early age I knew I wanted nothing to do with the type of lifestyle I grew up in. I realized early on that education was important and would be my ticket out of poverty. The recurring theme from successful people I met during my childhood was that they all had a college education.
THE REALIZATION TO GET IT TOGETHER
My ah-ha moment didn’t really come until I had a mentor who entered my life sometime in the 6th grade. At the time I had a 1.33 GPA and my school performance didn’t really get much attention at home. However, the new mentor held me accountable and made me bring him weekly progress reports. Soon enough I was getting all A’s and my first of many 4.0 report cards.
This mentor took me under his wing and spent a lot of time with me. He was an entrepreneur that owned several pizza places where I spent a lot of my time studying, doing homework, and learning about business. By the time I got into high school I knew I would study business in college.
Let’s face it; statistically I should be in prison based on my background. Instead I went to college, graduated with honors, and got a high paying job in finance out of school. I can’t remember exactly when I made the goal to become financially successful and eventually reach financial independence, but it’s been an obsession from an early age.
Now I earn more money in a month than my mother has ever made in a year (maybe two years combined). My father may have had some good months when he was selling drugs, but in the end he is almost 60 years old and has nothing.
Over the years I tried to help both parents get their life together and have even helped out financially. However, I eventually learned that I was only enabling their lifestyle since they weren’t willing to change. They just saw me as the bank, and I will warn you that this is the risk you run when doing well for yourself. It’s sad that the only time I hear from most of my family is when they need something from me (and its usually money).
Don’t take this the wrong way. I’m not opposed to helping people out, I have spent thousands of dollars over the years helping family and friends (I recently shared how I helped my brother Anthony). My goal is to use the money I make to make sure my wife and our future family will never have to worry about money.
Over the years, many people have asked how I turned out the way I did, in light of such a shitty situation. I almost always start with a famous study I remember hearing about in my college psychology class that followed two brothers over a 30 year period in a very similar upbringing and family background to my own.
One brother went on to be very successful by American standards (he was earning a 6-figure income, was college educated, owned a home, drove a nice car, and took nice vacations with his wife and kids) while the other brother ended up in and out of prison. Like his parents he was addicted to drugs and hadn’t amounted to much. At the end of the study the psychologist asked both brothers the same question…Why did you turn out the way you did?
And you know what they said?
They both answered the question the same, when they said “how else would I have turned out when you come from a family and upbringing like I did”.
The moral of my story is that you can use circumstance as a crutch or as a motivator. This country has always been filled with endless opportunity for those willing to play the long game and put in the work. And some might even get lucky here and there and end up with some sort of windfall.
THE THREE MAIN STEPS I TOOK TO CHANGE MY STATION IN LIFE
1) Work Harder Than Your Peers – If you want to be successful, you have to be willing to put in the hard work. You have to be willing to do what other unsuccessful people are unwilling to do. I have been able to grow my income to multiple 6-figures because I put in the extra hours when everyone else was running for the door at 5 p.m. And it wasn’t always in the office. A lot of the extra hours I put in was learning new skill sets that would make me better and more efficient at my job.
2) Get A College Education – The studies continue to show that there is a direct correlation with income and education level. If you want to earn more than you need to learn more. If you want to enter the workforce making $50,000 to $100,000 year, you need to get an education. Yes, there are successful people without college educations and they are the exception to the rule. And you don’t have to go to a Ivy League either. I went to a state school that cost about $10,000 in total for my bachelor’s degree.
3) Pay Yourself First – I learned early on in my career that you need to pay yourself first in the form of savings for retirement and investments. I have maxed out my 401K for years now, My wife and I own an investment condo and are always looking for other places to put our money to work. This also means that I don’t drive a fancy car and we live in a house that is significantly less than we can afford. Instead we live well below our means.
This doesn’t mean your standard of living is degraded. The perfect example is the house we bought 3 years ago. Instead of buying in Orange County, where we were approved for a $750K loan, we opted to move inland and buy a huge house for $370,000 (today our mortgage is less than 8% of our gross income). Our standard of living actually increased, based on the increase in disposable income, for both investments and the things we enjoy.
Growing up I promised myself that I would never be anything like my parents and that I would not take the opportunities in this country for granted. I found people that were where I wanted to be. I studied them intently and listened to advice that was so generously given. I’ve been fortunate to find many mentors to help me along the way. I believe there is a bit of luck in every success, but luck is really found at the intersection of preparedness and opportunity. If you never prepare yourself by doing the work and making the investment of time and effort, you will never be “lucky.”
You make your own luck based on the decisions you make on a daily, weekly, and monthly basis. You’re either preparing yourself for success or you’re preparing yourself for failure. I was on welfare as kid, but I haven’t let that hold me back. I graduated college at the top of my class in December of 2008 and got hired as a financial analyst with a starting salary of $58,000/year. Fast forward to 2017 and my income is projected to hit $300,000 and $440,000 when combined with my wife.
JOURNEY TO FINANCIAL INDEPENDENCE
I had nothing to lose and everything to gain. Why wouldn’t I work my ass off to take advantage of the abundance of opportunity staring me and the rest of the world in the face? My ultimate goal is to produce a monthly income of $50,000/month. That means I need a net worth of around $10M that earns 6% annually in order to never touch the principal. I track and share all of my progress here on this blog.
If you’re not where you want to be in life then do something about it. Take action. Or as Gandhi has so famously said “be the change you want to see”. Or take a lesson from the late Jim Rohn. He says “If you want to have more, then you must become more.” There is no way around it that it will take time and effort, but if you’re willing to pay the price of success you can achieve anything. It’s never too late.
Yes the best time to start to achieve financial independence was 20 years ago.
You know when the second best time is?
– Gen Y Finance Guy
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