If I Had Listened To “Good Advice,” I Could Not Have Retired At 42.
I have heard so much advice over the years that people consider to be “good advice”. But if I had listened to all of this good advice, I would not have been able to retire young.
By ignoring good advice, I was able to reach my goals.
Table of Contents
“You Have Too Much Debt, You Are Going To Go Bankrupt”
When I was in my middle 20s I had around $1M in debt. It was shortly before the real estate collapse of 2008. My income from my salary grew to around $30,000 at the time. It was on its way up to being $50,000 by the time I was 30.
So many people told me I was going to go bankrupt. The hardest one to hear was from my dad. I looked up to him as being a business mastermind. He had a successful career starting businesses. (He actually retired for the first time in his late 30s when I was wrapping up high school). He used his businesses to be tenants for buildings he owned. So I really was crushed when he told me this.
But I knew I had a solid plan. I knew I designed a plan that could cover expenses even when I had vacancies. I knew if I stayed the course tenants would pay off the houses.
It was hard to hear, but I knew I was not going to go bankrupt. I trusted my plan to retire early.
“You Are Too Young To Buy A House”
I bought my first house when I was 21. So many of my friends told me I was too young to buy a house. Then after I bought one, so many people of all ages told me I was too young to own a home. As I bought more houses, more people told me I was too young.
I have no idea why age matters when buying a house. But to other people, it did. Other people do not retire young.
“You Have Too Many Houses”
This is another piece of “good advice” that many people told me, including my dad. It was especially painful when he told me I had too many houses when they dropped 40% in value in 2008.
I remember telling him, “look, I have the houses. Now isn’t the time to tell me I have too many. Now is the time to tell me I am going to be ok”.
I knew I didn’t have too many houses. I knew if I had less homes then I wouldn’t be able to cover rent if I had multiple vacancies at once. I knew 8-10 houses was a sweet spot for me. Anything less and I couldn’t afford problems. Anything more and I would have to quit my day job.
“You Have Way Too Much Credit Card Debt”
I had so much credit card debt. It was part of my strategy. I had a really high credit score so I had amazing terms and huge credit lines. I would take out 0% interest 18 month cash advances and use them for down payments on houses. Then I would aggressively pay them off before the term was up.
Sometimes I had to take out another advance to cover whatever was left of the last one. It was a very high risk strategy. But my math said it would work. My math was right.
I also knew that I bought my houses under value. I knew I could sell one if I had to. That ended up not being true when 2008 happened. But selling was always a last resort anyway. Rents covered paying down credit cards.
To be clear, paying down credit card means paying them off. It doesn’t mean covering the minimum. It doesn’t mean chipping away at the balances. I mean I attacked the credit card balances. I was very aggressive.
I didn’t spend my money on what other 20 and 30 year olds did. Instead I paid off debt. This isn’t totally true. Tenants paid off the debt.
Related: Finance Expert (With 820+ Credit Score) Debunks Credit Card Myths
“You Need A 20% Down payment”
Every expert tells you that you need a 20% down payment. It is so arbitrary. When I was a teenager I used to go to the library and read books by authors like Carleton Sheets. He would talk about buying houses with no money down. He referred to it as other people’s money. I thought it was brilliant.
There are so many strategies to buying houses without any money down. I’ve tried many of them. One I never tried was borrowing from family or friends.
My first house I put $800 down. This was less than a 1% down payment. I never put another dollar down out of my own pocket.
I could not have retired at 42 if I waited to have 20% down on a single house, let alone 8 houses.
Plus, it’s smarter to pay discount points anyway if you understand math and plan to own the home longer than the break-even calculation.
Related: “Do Something That Makes You Go To The Library”
“You Need A Real Estate Agent”
Everyone thinks you need a real estate agent to buy a house. I’m not sure why. They never brought me good deals. They never negotiated the way I would have. I was always willing to walk away, they weren’t.
They weren’t able to really give me any value. So I stopped using real estate agents to buy houses. I can read a contract. I’d just negotiate with the seller’s agent and offer them a transaction fee or a dual agency arrangement.
Plus I knew if real estate agents knew how to invest in real estate then they wouldn’t be agents. They would be investors. Their expertise was getting commissions, not getting rich.
According to The Millionaire Next Door, people become millionaires by investing, not commissions.
Related:
“You Need To Go To Graduate School”
My degrees were in psychology and philosophy. I worked in Financial Services. My managers did not know what to do with me. They all took the easy path when discussing my development path and told me to get a master’s degree in business.
But I didn’t want to. I didn’t want to learn what everyone else learned. I sat in meetings all day long and no one could solve problems from unique angles. They all said the same nonsense. I wanted to be different. It made me great at my job.
But I did go to Grad School. It was way too easy. I wasn’t learning anything. In fact, I was teaching people some of the coursework for a few of the classes because the professor’s English wasn’t the best.
I begged the University to let me take the harder classes and test out of classes. I told them I would pay for the ones I tested out of. I just wanted to go to school to learn. I didn’t care about the letters. But I was not learning.
I was frustrated. At the time, there was this guy that ran a blog. No one really knew who this guy was. I followed his blog. No one knew what a blog was. This was before Twitter was created.
This was before most social media existed. Every now and then, I would exchange emails with this guy.
One of my emails expressed how frustrated I was with grad school being too easy. I asked him if “MBAs” really mattered. His reply changed my life. He said something to the effect of letters don’t matter. He said what you learn and do with knowledge matters.
So I dropped out of Graduate School and bought more houses.
His name is Mark Cuban. This was way before Shark Tank. This was a few years after he bought the Dallas Mavericks.
Many people would have considered his advice to drop out of graduate school and do something that would let me learn to be bad advice. I didn’t.
Here’s the email. I want to remain anonymous, so I redacted a bunch.
“You Need To Determine A Career Path”
So many of my managers and mentors told me I needed to determine a career path. It was so frustrating. I had the mindset that “if you become what you want to be when you grow up then you didn’t learn anything along the way”.
I wanted to learn what existed and then pursue those roles.
I also live by the rule of “pursue what is interesting, until it isn’t”. Here was my education and career path. I pursued what was interesting.
Education
- Degree in Psychology
- Degree in Philosophy
- Many Finra licenses
- Chartered Financial Analyst
Career
- Technical Writer
- Mortgage Broker
- Financial Services: Operations – Imaging Department
- Financial Services: Operations – Security Master File
- Financial Services: Product Development
- Financial Services: Product Management
- Financial Services: Different Company: Investment Product Risk
- Financial Services: Investment Risk Manager
- Financial Services: Analytic Manager Reporting To Chief Risk Officer
- Financial Services: Sr Product Manager – Research & Advice Department
- Financial Services: Back to first company-> Program Manager: Managed Accounts
- Retired at 42
- Now, I’m a full-time dad. I write to give me something to do and to share my story.
Most of those people who advised me on determining a career path are still working, and many of them have a lot of debt. Many of them complain about their jobs, their bosses, their coworkers, and their career path.
Not me. I am happy and free.
“You Need To Become A Manager”
Managers did not know what to do with me. They knew I was smart. They knew I got bored easily. They always wanted to retain me. The easiest lever for them to pull was to promote me to manager.
But I resisted. I constantly made it clear I wanted to be an Individual Contributor. I’m an Introvert and I don’t like politics. I just wanted to float around and solve problems. In general that is exactly what I did.
But every now and then a manager would promote me to manager. Remember my rule about pursuing what is interesting. Being a manager was not interesting. I made it clear before I was promoted. So each time I was made manager, I moved on to a new role. I always moved on to a higher paying Individual Contributor role.
This is the benefit of having the rental houses and maxing out my 401k. It is exactly what The Millionaire Next Door said. If you have multiple income streams and money saved, you have the freedom to do what you want with your time.
I knew I was in a financial position to move on from any role. I also knew I could take years off if I wanted until I found the next role.
That’s why it pays to save money! Satisfice matters. My McDonald’s Principle matters.
“You Need To Become A Better Presenter”
I am an Introvert. I don’t like talking to people. It’s why DadisFIRE’s YouTube Channel doesn’t show my face or voice.
I knew if I became a better speaker, I could make $300,000 to $500,000 a year. That was the next step when I left my career. But no amount of money was worth my discomfort. I preferred being behind the scenes. I prefer other people getting attention and credit.
I still would have retired early if I listened to this advice. But I would have been miserable. I chose happiness. I chose avoiding promotions. I avoided situations where I was forced to present. I preferred having people present my ideas.
I prefer to be present, then to present. As an introvert, it’s hard to be present when presenting.
My strength is ideas and problem solving. My strength isn’t standing up and communicating my ideas or solutions. I am not wired to think everything is so complicated. That’s for other people.
If I Listened To What People Told Me, I Would Be Like Everyone Else
If I had listened to everyone’s good advice. I would not have been in a financial position to have retired at 42. I followed my own path. I trusted myself. I trusted my plan. It worked out.
Trust yourself.
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