My Net Worth Growth, Part 3: Doing these ten things helped me quickly reach $100,000
[10/10/2005 - This post was originally included in a series that I have decided to put on hold. It has now been reclassified to Money Saving Tips.]
As a college grad in the late 70s, my starting salary was around $17,000. Yet only a few years later my net worth topped $100,000. This post lists ten things I did that helped me get off to a quick start.
Note: This is the third in a series where I review my personal finances over the past 25 years (read Part 1 and Part 2). If you are new to my blog, I hit the million dollar mark about 10 years ago. Read more about me.
Ten things I did to quickly reach $100,000
1. In terms of spending, I didn't fully let go of the "college-student mentality". For example, I:
- - Drove a used car
- - Lived with roommates
- - Bought used / hand-me-downs
- - Did my best to avoid the temptation to purchase things I didnt need
2. Generated additional income by working a 2nd (part-time) job the first year after graduation
3. Attended seminars and a few night classes to gain additional skills needed to advance my career
4. Bought and sold stuff for a profit (like a 70s/80s version of eBay)
5. Bought and leased-out an expensive piece of office equipment
6. Paid by cash or check, and pretty much avoided credit
7. Thought of expenditures in terms of how many hours would I need to work in order to cover the cost (I looked at expenses as a percentage of income, which is something I still do today)
8. Cut my living expenses when traveling for work (gas, food, entertainment...)
9. Lived rent-free by buying a house with a walkout basement, which I converted to an apartment; I rented the basement, the garage, and had a roommate living with me on the main floor; Monthly rent was about enough to cover the PITI
10. Had a professional invest my money (see last paragraph of earlier post)
Live for tomorrow
In my case, I worked hard and did my best to "live without" for the first 5 or so years of my career. Doing this helped me create the foundation needed to build wealth, which now allows me to coast in (early) semi-retirement.
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what was the "expensive piece of office equipment?"
In the early '80s, word processing was a standalone application. A single workstation and printer complete with the software sold for $15,000. I bought one used for about $4,500, then rented it out. I do not recall the exact rental income, but believe it was in the $400 - $500 month range. Also because of the price, I lost very little in depreciation when the unit was eventually sold.
