Saturday, February 22, 2014

So, why $100 Million? It's about the Journey!

I received a few questions from folks about my goal of reaching $100 million net worth. How did I arrive at $100 million? Why not $5 or $10 or $50 million? What is so special about $100 million. 

I think I can sum it up with a quote from Michelangelo:
"The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark."
The journey towards a goal is more interesting to me than attaining the goal itself -- and the more audacious the goal the more exciting the journey.  Let's make this journey an exciting one with a goal if $100 million in net worth!  The process of  a) establishing the goal, b) setting out a strategy to meet that goal, c) establishing plans aligned with the strategy, d) taking actions laid out in the plan and finally e) seeing your actions translate to results is exciting .  If the path to move from point 'a' to 'e' is clear and easy the journey is less interesting.  Less interesting for me and certainly less interesting for someone else to follow along and learn from the journey.  If my goal was to move from where I am today to a $5 or $10 or $20 million net worth, I have a clear path to get there.  I can continue what I have been doing and have great certainty the journey will end with my goal attained.  It might only be a matter of degree.  I might need to cut a few dollars in spending to invest more or I might need to add another rental real estate property or two.  My established plans today will get me to these less audacious goals. 

I am setting out on this journey with you to develop those plans that will take me to $100 million.  This will take exploring areas for new investment and additional ways of generating income.  I will have to learn and grow in areas that I know nothing about today.  This is where I believe you and I can learn together.  I also hope that by setting such an audacious goal and making clear progress towards reaching it that I might inspire others to start a journey of their own with a goal that they once thought impossible.

Secondly, part of my definition of financial freedom is to have the flexibility to participate in the building of exciting new businesses that will change the world.  By participation I mean venture capital funding.  To participate in a meaningful way, I believe I need to have substantial means.  $5 or $10 million might be enough to ride away into the sunset and enjoy a life of luxury but it won't be enough to enjoy a life of luxury, participate in building new ventures and go to bed each night with little to no worry. 

To recap, here is a summary of why I have chosen my net worth goal to be $100 Million:
  1. I want an audacious goal that makes this journey more exciting for me and for you to follow along.  If there is not some level of risk to attaining the goal it wouldn't be a very exciting ride.
  2. I want to have the means to substantially participate in building exciting businesses that will change the world.  To do this I believe I need more than just a few million dollars.
  3. Let's face it - $100 Million Net Worth sounds cool.
What's your goal and how did you chose it?

Until next time, happy investing!

Saturday, February 15, 2014

How I Got to Where I am Today....A History of Building My Asset Base

Last week I introduced myself, wrote about my high level goals and some things I would write about here. This week, I am going to give an overview of my assets and how those have grown since I started my journey in 2001.

In 2001, I graduated from a well respected engineering school and joined a large corporation. My starting salary was average for someone in my field of engineering with a Bachelors degree. To my benefit, I grew up understanding that you lived within or below your means. My parents instilled this value early and they set a good example by living their financial lives within their means. While in college, I worked with the corporation that I would eventually join full-time. During that time, I had the opportunity to learn further about personal finance and for the first time investing from a very wise retired engineer. I rented a room from this retired engineer and he took special effort to mentor me in some very basic concepts of personal finance and investing that I have carried on to this day. He also shared with me the details of his assets, investment choices, lessons learned and how his investments had grown over time. Seeing this first hand from an engineer just like me provided more lessons than any book, article or investment newsletter I have read since. The most important thing I learned was to start doing SOMETHING. Start contributing to a 401(k), an IRA, invest in a few individual stocks. Whatever it is just get started. So I did just that - I got started and early compared to many.

Saturday, February 8, 2014

My Journey to Financial Independence

I am 37 years old and started my journey to financial independence when I graduated from college in 2001. My goal is to achieve financial independence by the age of 50. I define financial independence as the ability to live the lifestyle I chose with little to no financial constraints. That lifestyle choice may or may not include a '9-5' job. It may or may not include extravagent trips around the world. It could include the freedom to start a business or invest in one for which I have a passion. It might include the freedome to make a large gift to a cause or group that is fighting a noble cause. Bottom line, I want those choices to be mine without constraint of my bank account. So, what is the dollar amount that equals financial independence for me? I am not sure. I have set goals along the way but not yet discovered what dollar amount will be. That will be part of my journey here with you.