Personal Questions:
Paul: In your journey through finance, what books have you read that really have helped you grow? What books do you recommend people just starting out in finance read?
Derek: The book/course that most impacted me was Financial Peace University, by Dave Ramsey. I used the tools in this book to get out of consumer debt, build up an emergency fund, invest in the market, and pay off my house! Today, I enjoy a peaceful life (even among the turmoil all around us) with plenty of funds to live on for years. I’m so glad I’m not like the 67 million Americans today that are worried about making their next credit card payment.
Other books that have impacted me over the years:
- The Richest Man in Babylon
- Rich Dad, Poor Dad – Robert Kiyosaki
- The Automatic Millionaire – David Bach
- The Millionaire Next Door
- The Index Card
Paul: How did you balance working a full-time job, doing a “hustle”, maintaining relationships, social lives, physical shape, etc. while also performing optimally? Is there anything you had to sacrifice?
Derek: Ha, it’s not always easy!! With wife and kids, a full time job, and a blog… For a while there, I was thinking about selling the site because it was simply taking up too much time! Thankfully, I didn’t get the 6-figure offer I wanted and decided to keep it…with a little bit of hired help. I now have a virtual assistant that handles my advertising and emails, and I also have 3-4 staff writers at any given time.
I’ve come to realize that I’d rather spend 5 hours a week on my blog and earn $2,000 a month than 20 hours a week and earn $3,000. It’s a wayyyyy better scenario!
Also, I’ve cut way back on screen time (used to be video games and TV). It’s just not that important to me. I’d rather use the time to play with the kiddos, work out a bit here and there, and continue to learn by reading!
Paul: Over the past couple of years, what is the biggest lesson you have learned through your finance blog, and what suggestions would you give to beginners?
Derek: Oh man, a big one sticks out in my mind… I was running the blog, working Corporate America, trying to be a great husband and dad, but also to propel us ahead financially. My wife and I already had one rental house and saved up a good chunk of change for another. It took a few months of searching, but I finally found that diamond in the rough! Or so I thought…
It was going to be great! We’d fix it up, I’d blog about the process and increase my following, and then we’d rent it out for $1,300 a month, which would double our rental income. I was in love!
And then we got into month 6 or 7 of the “fix-up” stage…
This house was a disaster. It smelled like cat, dog, smoke, you name it. We had to tear down drywall, pull up sub-floor, remove ceiling tiles. It was a HUGE project! I still wasn’t overly concerned, but my wife was fed up with me working mornings, nights, weekends… It nearly broke our marriage to be honest. I still found time for the kids, but had no time for the wife. NOT SMART!
Once we were finally done, she could barely even look at that house. We had to sell it to get rid of the reminder of that awful time. We still made $27,000…but it truly wasn’t worth the sacrifice of those 8 grueling months…
Yes, money is important and we all need to have it, but there is such a thing as ‘enough’ money. Relationships, exercise, our spiritual walk…there are so many other things that are important as well. It’s all about the balance of everything, not the domination of one.
Paul: To unwind and relax, what activities do you take part in that gives you a second wind, so you can start fresh the next day?
Derek:
(1) Getting outside. My favorite way to do this is go golfing. If there’s not enough time for that, I’ll just go for a walk or a run through the woods!
(2) Talking with people. I always learn something and grow a bit more, just by chatting with someone else.
(3) Exercise. Lifting weights, swimming, and running – those are my staples. They get my heart pumping, my mind cruising, and they distract me from my day-to-day work.
Paul: Do you have a favorite quote, and if so, what is it?
Derek: “We buy things we don’t need with money we don’t have to impress people we don’t like.” — many have claimed to be the originator of this quote…
The point is, stop living your life for someone else. Live it wisely, and live it for you.
Finance Questions:
Paul: During volatile times, what measures do you take to protect from downside risk, while concurrently maintaining upside potential?
Derek: After sifting through dozens of articles and thousands of data points, I’ve come to the realization that investing with the market (ie. Index funds) makes way more sense than trying to time the market or pay someone else to try to time the market (ie. active mutual funds). So, I put a good portion of my retirement investments into Vanguard index funds.
Besides this, I’m a huge fan of real estate investments. I have one rental house now that’s a complete cash cow and my wife and I plan to buy a couple more in the upcoming years.
And, a solid chunk of cash is never a terrible thing. We all need a safe-guard against job loss and unfortunate accidents.
Paul: What type of investor are you (income investor, growth investor, combination, speculative, etc.)?
Derek: I’m more about growth. I never got that big into dividend investing – the concept makes sense but too many people end up investing heavily in a company purely for a 6% dividend…while growth stocks can average 10%+. Sure, it’s more volatile, but on average it’s the absolute truth!
And…like I said before, I just chunk my money into Index Funds modeling the S&P 500. Unless you have a ton of money and a lot of time on your hands to learn the ins and outs of the market, betting your funds of single stocks here and there just isn’t worth it. You might have some big winners, but you’ll also lose many times as well.
Paul: What advice would you give someone who has a partner who is bad with finances and is simply uneducated in the world of finance?
Derek: Ugh, this one is tough…and it’s more or less why my first marriage failed. She saw no reason in having more than $1 in our bank account. I wanted millions in investments. Needless to say, it was tough to find a middle ground. So, the first point of advice is,
“Find a partner that shares your spending habits, your religious beliefs, and your exercise habits” — or at least, comes close.
If you’ve already chosen a partner and didn’t quite get the saver you wished you had now, it will never be easy, but the best thing to do is set some common goals.
– Where do you want to be in 5 years? 10 years? 20 years?
– What do you have to do with your money today to get you there?
Even the biggest spender should realize that money needs to be saved if you want to travel the world in retirement or buy that cottage on the water.
Also — be willing to compromise. You’re not fully right and neither is your partner. Learn to meet in the middle.
Paul: What is the best investment you have ever made (You don’t need to name the specific company if you don’t want), and what research led you to this investment?
Derek:
1st – my best investment was in me – my education. I’ll earn millions more than the average person because of my college degree, my MBA, and most importantly, what I’ve learned through both of those programs (ie. the application of what I’ve learned is probably more important than the piece of paper I earned).
2nd – my spouse that I’m on the same page with. I put tons of time into wooing my current spouse. 7 years later and I still say the investment was totally worth it. We’re on the same page with money, with our kids, and with our future selves!
3rd – my Roth 401k at work. I get a match, an additional 4% from my company, and I don’t have to pay taxes on the money in retirement! And of course, I invest largely in index funds. 🙂
Worst investment? When I was broke and bought 5 shares of Coach. The stock went up and earned me $60, but I spent $20 on transaction fees and another $60 to file the additional tax schedules to record my earnings… Therefore, I lost $20 and had to pay taxes on my “earnings”.
When you’re broke, pay off debt. It’s the best investment you can make.
Paul: What is the biggest mistake you have made investing or doing personal finance?
Derek: Ha, I guess I jumped the gun on this question! Refer to the above…
Oh, also, I invested $2,000 in silver a few years ago. The stock market soared and my silver tanked. Pretty sure I sold that investment for $1,400… Not worth it!
My investments today are real estate, index funds, and cash. It’s simple, but good enough for me!
Paul: Any general finance rules of thumbs you would like to share with my audience?
Derek: Absolutely!!
– Never take out a mortgage that’s more than 2X your yearly income.
– If you have consumer debt, do everything you can to pay if off quickly!
– Once you have consumer debt paid off, keep living frugally – preferrably on 50% of your take-home pay. Invest the rest. It’s amazing what a pile of money will allow you to do — take a different job, start working for yourself, retire extremely early, give money away to those in need… Having money is way better than not having money, so why not just work at having the latter!
Derek Sall is a lover and writer of all things personal finance. And, there’s nothing he’d love more than to see you succeed!! Follow him on his site at https://lifeandmyfinances.com
-BlogCast on 3/22/2020
Derek SallPersonal Questions:
Paul: In your journey through finance, what books have you read that really have helped you grow? What books do you recommend people just starting out in finance read?
Derek: The book/course that most impacted me was Financial Peace University, by Dave Ramsey. I used the tools in this book to get out of consumer debt, build up an emergency fund, invest in the market, and pay off my house! Today, I enjoy a peaceful life (even among the turmoil all around us) with plenty of funds to live on for years. I’m so glad I’m not like the 67 million Americans today that are worried about making their next credit card payment.
Other books that have impacted me over the years:
- The Richest Man in Babylon
- Rich Dad, Poor Dad – Robert Kiyosaki
- The Automatic Millionaire – David Bach
- The Millionaire Next Door
- The Index Card
Paul: How did you balance working a full-time job, doing a “hustle”, maintaining relationships, social lives, physical shape, etc. while also performing optimally? Is there anything you had to sacrifice?
Derek: Ha, it’s not always easy!! With wife and kids, a full time job, and a blog… For a while there, I was thinking about selling the site because it was simply taking up too much time! Thankfully, I didn’t get the 6-figure offer I wanted and decided to keep it…with a little bit of hired help. I now have a virtual assistant that handles my advertising and emails, and I also have 3-4 staff writers at any given time.
I’ve come to realize that I’d rather spend 5 hours a week on my blog and earn $2,000 a month than 20 hours a week and earn $3,000. It’s a wayyyyy better scenario!
Also, I’ve cut way back on screen time (used to be video games and TV). It’s just not that important to me. I’d rather use the time to play with the kiddos, work out a bit here and there, and continue to learn by reading!
Paul: Over the past couple of years, what is the biggest lesson you have learned through your finance blog, and what suggestions would you give to beginners?
Derek: Oh man, a big one sticks out in my mind… I was running the blog, working Corporate America, trying to be a great husband and dad, but also to propel us ahead financially. My wife and I already had one rental house and saved up a good chunk of change for another. It took a few months of searching, but I finally found that diamond in the rough! Or so I thought…
It was going to be great! We’d fix it up, I’d blog about the process and increase my following, and then we’d rent it out for $1,300 a month, which would double our rental income. I was in love!
And then we got into month 6 or 7 of the “fix-up” stage…
This house was a disaster. It smelled like cat, dog, smoke, you name it. We had to tear down drywall, pull up sub-floor, remove ceiling tiles. It was a HUGE project! I still wasn’t overly concerned, but my wife was fed up with me working mornings, nights, weekends… It nearly broke our marriage to be honest. I still found time for the kids, but had no time for the wife. NOT SMART!
Once we were finally done, she could barely even look at that house. We had to sell it to get rid of the reminder of that awful time. We still made $27,000…but it truly wasn’t worth the sacrifice of those 8 grueling months…
Yes, money is important and we all need to have it, but there is such a thing as ‘enough’ money. Relationships, exercise, our spiritual walk…there are so many other things that are important as well. It’s all about the balance of everything, not the domination of one.
Paul: To unwind and relax, what activities do you take part in that gives you a second wind, so you can start fresh the next day?
Derek:
(1) Getting outside. My favorite way to do this is go golfing. If there’s not enough time for that, I’ll just go for a walk or a run through the woods!
(2) Talking with people. I always learn something and grow a bit more, just by chatting with someone else.
(3) Exercise. Lifting weights, swimming, and running – those are my staples. They get my heart pumping, my mind cruising, and they distract me from my day-to-day work.
Paul: Do you have a favorite quote, and if so, what is it?
Derek: “We buy things we don’t need with money we don’t have to impress people we don’t like.” — many have claimed to be the originator of this quote…
The point is, stop living your life for someone else. Live it wisely, and live it for you.
Finance Questions:
Paul: During volatile times, what measures do you take to protect from downside risk, while concurrently maintaining upside potential?
Derek: After sifting through dozens of articles and thousands of data points, I’ve come to the realization that investing with the market (ie. Index funds) makes way more sense than trying to time the market or pay someone else to try to time the market (ie. active mutual funds). So, I put a good portion of my retirement investments into Vanguard index funds.
Besides this, I’m a huge fan of real estate investments. I have one rental house now that’s a complete cash cow and my wife and I plan to buy a couple more in the upcoming years.
And, a solid chunk of cash is never a terrible thing. We all need a safe-guard against job loss and unfortunate accidents.
Paul: What type of investor are you (income investor, growth investor, combination, speculative, etc.)?
Derek: I’m more about growth. I never got that big into dividend investing – the concept makes sense but too many people end up investing heavily in a company purely for a 6% dividend…while growth stocks can average 10%+. Sure, it’s more volatile, but on average it’s the absolute truth!
And…like I said before, I just chunk my money into Index Funds modeling the S&P 500. Unless you have a ton of money and a lot of time on your hands to learn the ins and outs of the market, betting your funds of single stocks here and there just isn’t worth it. You might have some big winners, but you’ll also lose many times as well.
Paul: What advice would you give someone who has a partner who is bad with finances and is simply uneducated in the world of finance?
Derek: Ugh, this one is tough…and it’s more or less why my first marriage failed. She saw no reason in having more than $1 in our bank account. I wanted millions in investments. Needless to say, it was tough to find a middle ground. So, the first point of advice is,
“Find a partner that shares your spending habits, your religious beliefs, and your exercise habits” — or at least, comes close.
If you’ve already chosen a partner and didn’t quite get the saver you wished you had now, it will never be easy, but the best thing to do is set some common goals.
– Where do you want to be in 5 years? 10 years? 20 years?
– What do you have to do with your money today to get you there?
Even the biggest spender should realize that money needs to be saved if you want to travel the world in retirement or buy that cottage on the water.
Also — be willing to compromise. You’re not fully right and neither is your partner. Learn to meet in the middle.
Paul: What is the best investment you have ever made (You don’t need to name the specific company if you don’t want), and what research led you to this investment?
Derek:
1st – my best investment was in me – my education. I’ll earn millions more than the average person because of my college degree, my MBA, and most importantly, what I’ve learned through both of those programs (ie. the application of what I’ve learned is probably more important than the piece of paper I earned).
2nd – my spouse that I’m on the same page with. I put tons of time into wooing my current spouse. 7 years later and I still say the investment was totally worth it. We’re on the same page with money, with our kids, and with our future selves!
3rd – my Roth 401k at work. I get a match, an additional 4% from my company, and I don’t have to pay taxes on the money in retirement! And of course, I invest largely in index funds. 🙂
Worst investment? When I was broke and bought 5 shares of Coach. The stock went up and earned me $60, but I spent $20 on transaction fees and another $60 to file the additional tax schedules to record my earnings… Therefore, I lost $20 and had to pay taxes on my “earnings”.
When you’re broke, pay off debt. It’s the best investment you can make.
Paul: What is the biggest mistake you have made investing or doing personal finance?
Derek: Ha, I guess I jumped the gun on this question! Refer to the above…
Oh, also, I invested $2,000 in silver a few years ago. The stock market soared and my silver tanked. Pretty sure I sold that investment for $1,400… Not worth it!
My investments today are real estate, index funds, and cash. It’s simple, but good enough for me!
Paul: Any general finance rules of thumbs you would like to share with my audience?
Derek: Absolutely!!
– Never take out a mortgage that’s more than 2X your yearly income.
– If you have consumer debt, do everything you can to pay if off quickly!
– Once you have consumer debt paid off, keep living frugally – preferrably on 50% of your take-home pay. Invest the rest. It’s amazing what a pile of money will allow you to do — take a different job, start working for yourself, retire extremely early, give money away to those in need… Having money is way better than not having money, so why not just work at having the latter!
Derek Sall is a lover and writer of all things personal finance. And, there’s nothing he’d love more than to see you succeed!! Follow him on his site at https://lifeandmyfinances.com
-Published 3/22/2020
Disclaimer:
Nothing stated in this article is a recommendation from Forehand Financial to buy or sell a particular security or asset class. You should wisely consider your tolerance for risk, time horizon, and financial goals before making an investment. With investing, you run the risk of losing money, always read an investment prospectus and make an informed decision before allocating capital to a particular investment.
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