I Attended a Modest, Billion Dollar Party

Not the actual party

Over the weekend I had the pleasure to attend an interesting party. I was invited by one of my favorite clients to a quaint house warming party. My client has been in real estate for decades and built up a solid business of rental properties. I thought it would be a great opportunity to socialize with my client outside the job, and just make an appearance.

Now, reading the title you’re probably assuming the party itself cost a billion dollars. It was a mild manner affair, catered of course, but when the other guests began to show up it turned into something I’ve never seen before. The combined net worth of all the guests was in the billions. I was rubbing shoulders with a class I’d never been exposed to before. I took it all in.

When you think of a party of combined billionaires, what do you think of? Maybe what comes to mind is gold jewelry, Crystal poured by the gallon, and whatever else is found in high-budget rap videos. Or maybe your mind is drawn to the more conspiratorial, the secret society of the rich direction, imagining some Eyes Wide Shut affair with masks, cloaks, and ritualistic sex?

The truth is much less extravagant. To me, it looked like most people had just stepped off their yacht. It was shorts and polos for as far as the eyes could see. Some women wore dresses and I only saw one man in a suit. Wearing ‘business casual’ I felt overdressed. The wealth was only obvious in the cars people arrived in; the owner’s driveway contained a BMW, Lexus, and Maserati alone. The house was a thing of beauty — recently remodeled and completely overhauled. But for the most part, the wealthy themselves did not flaunt. No extravagant jewelry, no big watches, no trophy wives. There was no snapping of selfies or showing off.

I was immediately reminded of Stanley and Danko’s The Millionaire Next Door. If you’re not familiar, the authors surveyed hundreds of millionaires across the United States, looking for common statistics among the wealthy. What they found was that almost unanimously do millionaires live modest lives, shopping off brand or generic for most things, buying used cars, and not living extravagant lives.

The other noticeable thing? Most were older.

Why does this matter? It reinforces the idea that to become truly wealthy, billionaire level wealthy, it takes a lifetime of financial discipline. Have you ever seen the ‘hockey stick’ graph of Warren Buffet’s wealth? He didn’t cross $1 billion dollars until he was 56 years old. Unless you invent Facebook or design the Model T, it takes time to be a billionaire.

My mind wandered some more at the party: The extravagant parties (and lifestyles) are usually attributed to entertainment moguls, professional athletes, and…lottery winners. What do all three of those have in common? High bankruptcy rates. Rapper 50 Cent went from a $155 million valuation in 2015 to bankruptcy in 2016, $23 million in debt. MC Hammer went from earning nearly $33 million per year in 1991 to $13 million in debt just 5 years later. Johnny Depp is the latest celebrity struggling with debt and lost fortune. Nicholas Cage had serious financial problems, even blowing a $150 million fortune. According to a 2009 Sports Illustrated article, 78% of NFL players are either bankrupt or under “financial stress” just two years after leaving the league and 60% of NBA players go bankrupt within 5 years of leaving the sport.

And then there are the lottery winners.

According to several studies, 70% of all lottery winners go broke and file for bankruptcy. Here’s another staggering statistic: 90% of surveyed lottery winners believe the money will be gone completely by the family’s third generation. One last one: 44% of all lottery winners spend the entirety of their winnings within 5 years.

What I was seeing at this party was the key to wealth: financial literacy. These were people that built and owned businesses, that invested in real estate, that probably had pretty thick stock and bond portfolios. These were people who made sure that dollars incoming remained much higher than dollars outgoing. Are you paying attention? Because this is the secret to being wealthy.

As Roberty Kiyosaki likes to say, “The poor stay poor.” What he means by this is the mentality doesn’t change, even after winning the lottery or landing the big sports contract. Without financial literacy (with which comes discipline), that multimillionaire still has the mentality of poor person — so they spend on liabilities instead of acquiring assets. They live lavishly, enjoying their new found freedoms with being able to buy whatever they want. Nicholas Cage bought an island. MC Hammer bought a $30 million house. Famous lottery winner Michael Carroll smoked $2,000 worth of crack every day and ultimately ended up in prison at one point. The rich buy assets. Real estate. Businesses. Stocks. They put their money to work to make more money.

Being wealthy is a mindset. And all of these khaki shorts, gray-haired party goers had that mindset. I regret not wandering about more, asking what people did. I would have loved to get a sampling of where their wealth came from. I guarantee you that none of them were lottery winners.

If you want to quit your job and become wealthy, you cannot do it without financial literacy. I wasn’t born into wealth. When it comes to knowing money, the public school system failed me — it fails everyone. Schools do not teach financial literacy. There’s no classroom discussion on debt or taxes or passive income. I plan on writing a post dedicated solely to financial literacy and failure of such in the education system; but for now know that the path to true wealth lies in knowledge.

I leave you with a few tips should you ever find yourself in a billion-dollar party:

  1. Dress the opposite of how you think you should dress. Head to a department store and pick up an outfit in the Ralph Lauren/Polo section. Shorts and a polo shirt.
  2. Unless you drive a luxury vehicle, park a block away.
  3. ‘Catered’ does not mean hors d’oeuvres, caviar, and champaign. It means cold beer, margaritas, and steam trays.
  4. Bring a gift, or at least, a bottle of wine.
  5. Don’t be the first one there or the last one to leave

5 Ways to Build Your Savings Fast

Savings is a key component of having a healthy lifestyle. Having savings means not worrying about the “what ifs” — What if the car breaks down? What if I need a new roof on my house?

It also means having money when opportunity appears — whether to take that vacation or invest in a startup idea. Having money waiting in the wings gives you freedom.

#1. Pay Yourself First

If you take away anything from this post, let it be this one. I saw my savings grow exponentially when I started paying myself first. The idea comes from the book The Richest Man in Babylon, a book of financial advice told through parables: take 10% of what you earn for yourself.

This means save 10% of everything you make BEFORE bills, expenditures, and anything else in your budget. If your paycheck is $1,000 you save $100 before anything else. The $100 goes in to savings, and you have $900 to spend on bills, entertainment, etc. If you do nothing else to save, you’ll have tucked away quite a bit in a year. I love this rule and I follow it every time I get paid or make money.

The psychological effect of this is huge. I know what it feels like to get a paycheck and it’s gone. You feel like you’re not getting anywhere, you work for bills. When you pay yourself 10% first, it gives a sense of accomplishment and more importantly — worth.

#2. Keep the Change

No 8,000-year-old Babylonian wisdom here; I came up with this one myself. When I began my financial transformation, I started using a budget to keep track of spending. I would estimate my next paycheck (I was wage plus commission, so no two paychecks were ever the same), determine what bills must be paid during those two weeks, and determine what I could spend. I always gave myself a $100 buffer from each paycheck — this gave me breathing room so I wouldn’t fret about every penny plus if a friend wanted to grab lunch or something small caught my eye, it came out of the $100 buffer.

That way, I wasn’t living like a monk every two weeks.

But I rarely spent the full $100. Sometimes there was a dollar left, sometimes much more. When the next payday came, I would take whatever was left in my checking account and move it into savings. By sweeping up the leftovers, it would eventually build up in my savings account. $10 may not sound like much, but when you put it into savings every two weeks, before long you’ve got $100s in there.

#3. The Waiting Game

A big part of building wealth is knowing yourself. That means knowing your (bad) habits, like for me impulse purchases was something that got me into trouble. It plagued me throughout my 20s, and helped run up big balances on my credit cards. Amazon made it easy to get anything in two days and it was so easy to put things in the cart and hit “buy now.”

I knew my weakness. I knew how I behaved. So I made myself institute a waiting period on Amazon purchases. Any thing I add to my cart I wait three days to buy. What happens in three days? The impulse dies away. I forget about stuff I put in there. When I go back in, a lot of times I’ll delete things or move them to “save for later.” I have literally hundreds and hundreds of items “saved for later” in my Amazon account…but I didn’t buy them. It’s money well not-spent.

It’s an added bonus that sometimes Amazon will lower the price of things in your cart to draw you back to buying! So if there is something you plan to buy, Amazon might put it on sale to get you to pull the trigger.

#4. Think on a Full Stomach

This may sound dumb, but going to the grocery store hungry will cost you a fortune. I noticed a big difference in grocery bills just by going after a meal instead of before. I mean, it makes sense, right? But it’s one of those things you never think about. I certainly didn’t, but I was looking at my own habits to find out where I could cut down on spending, I started to study my grocery shopping.

If you’re hungry when you push the cart down the aisle, EVERYTHING looks good. You’re shoveling extra snacks into the cart. Fantasizing about giant meals you’re going to make — all of which need massive amounts of ingredients. By the time you get to check out, you’ve blown up the budget.

If you’re full, however, you don’t really want to think about food. You just want to get out of there. Get what you need and get out. It’s much easier on your cart – and your wallet.

#5. Separate Your Savings

If you haven’t caught on by now, each of these things has a psychological component. “Save more, spend less” is really just a mind game. You have to know yourself, how you are, and what you can do to beat yourself to the punch.

I recommend separating your savings from all your other money. Make it hurt to draw from it. When I first started saving, my first $1,000 was in cash. Why? Because cash feels real. You have it in your hands instead of seeing a number on a computer screen. You don’t want to part with it. I also kept it in $100s, because I didn’t want to break any of those nice, big bills.

When it was time to move to an actual savings account, I opened up a savings account with the same bank as my checking. It was easy to funnel money back and forth. So easy, in fact, the savings account became an account for several things (like where to put aside my tax withholdings). It got so convoluted I didn’t know what my actual savings were — what was savings and what was meant for taxes? How much of it was set aside for an upcoming big purchase? Money was coming and going, and my savings was getting caught up in it.

I finally got my savings its own account, isolated from everything else. I have a nice, easy number to look at and know “that’s how much I have saved.”

See, it’s all psychology.

Required Reading: 5 Takeaways from The Millionaire Fastlane

One of the segments I want to do with this blog I’m called “Required Reading,” which essentially is a combination book review and recommendation. I’ll write a post on a particularly educational or useful book and break down the top 5 takeaways.

If you read my “Top 10 Books For Financial Freedom” post, you’ll know that MJ Demarco’s The Millionaire Fastlane sat at my #1 spot. For me, this book changed everything in my journey to financial independence. Moreover, because I read it after reading so many other common authors on personal finance, DeMarco’s book came as a shock.

The first time I read it, I had to actually put it down after a few chapters because it scared the crap out of me. DeMarco’s arguments were sound, rational, and completely countered the more conventional ‘gurus’ and authors out there. I was midway through my personal financial transformation when I picked up The Millionaire Fastlane and it made me rethink my process. So without further ado, let’s get into it:

#1. “The Promise of Wealth…The Price? Your Life”

“By working faithfully 8 hours a day, you may eventually get to be the boss and work 12 hours a day.” ~ Robert Frost

The conventional financial ‘wisdom’ of financial gurus such as Dave Ramsey, Suze Orman, or Tony Robbins is build around the idea of using time to compound investments. By continually contributing to a 401k or IRA and allowing it to compound (e.g., increase in value and reinvest dividends) over time, it becomes your method of financial freedom. As Ramsey calls it, a “Cash Mutual Fund Millionaire.” The key to this, of course, is time. Work a job for forty years, investing all the while. Take the employer 401k or IRA match. Let it grow, and when you retire at 65, you’ll have millionaires to “retire with dignity.”

DeMarco refers to this strategy as the ‘Slow Lane.’ He counterpunches: “It’s a lie so deceiving that when uncovered, decades of life have passed…The driving force behind behind wealth under Get Rich Slow is time — time employed at the job and time invested in the markets. Your glorious tomorrow might arrive after 40 years, when you’re living your last presidential administration and on your second hip replacement.”

DeMarco goes on to point out the best way to enjoy wealth is when it’s lived young, when you have “health, vibrancy, energy, and yes, maybe even some hair.” The idea of waiting to enjoy life when you’re older, breaking down, and possibly even bedridden does not come across as appealing. You give up the good, healthy years to be free during the older, medically-dependent years.

Even worse, what’s the guarantee you’ll even make it? The average life expectancy (as of 2018) in the U.S. is 76. That means working for 40 years to enjoy 11 (if you retire at 65). The math isn’t worth it. DeMarco brings up the fact that, even if you do live long enough to retire, there’s no guarantee you’ll be a millionaire. The gurus’ plans don’t work without a job, or if the market goes south, or if a housing crisis wipes out 40% of your illiquid net worth in a year (as the 2008 crisis exposed to many).

#2. Your Definition of Wealth Has Been Corrupted

“Money doesn’t buy happiness when it’s misused,” DeMarco writes. “Instead of money buying freedom, it buys bondage.” The idea is that people want to feel wealth, so they buy things they cannot afford to look wealthy. By craving respect and admiration, you expect wealth to bring you into happiness. “Society says wealth is “stuff,” and because of this faulty definition, the bridge between wealth and happiness collapses.”

Indeed, wealth has become something of a dirty word in society in the era of “We Are the 99%.” Wealth is equated with sports cars, big houses, and showing off lavish vacations on Instagram. These objects of wealth are sources of envy and disdain, leading many people to sneer at the mention of wealth or money. However, DeMarco says, “used properly, money buys freedom.” Freedom buys choice. Those that chose to use money to flaunt fake wealth end up deeply in debt trying to maintain it, and are forced to work to pay that debt and keep the cycle going.

DeMarco illustrates wealth as freedom further:

  • Money buys the freedom to watch your kids grow up
  • Money buys the freedom to pursue your craziest dreams
  • Money buys the freedom to make a difference in the world
  • Money buys the freedom to build and strengthen relationships
  • Money buys the freedom to do what you love, with financial validation removed from the equation

These are nothing to be ashamed of.

#3. “Wealth is a Process, Not an Event”

Earning wealth is not a sexy process. Sexy is winning the lottery, opening your front door to find Ed McMahon with a giant check, or hitting it big at the casino. However, these events are highly, highly unlikely and cannot be planned or earned, no matter how much effort or time is put into it. As DeMarco puts it, “Millionaires are forged by process…self made millionaires create their wealth by a carefully orchestrated process.”

The ‘process’ never makes the headlines. DeMarco uses the examples of an athlete scoring a $50 million contract or an Internet wiz selling his company for $30 million. The ‘event’ (the contract or deal) is “showcased for all to admire.” People read about it and say “gee, if only I could be so lucky.” What’s not lauded is the amount of work it took to get there. Years of shooting free throws alone in a gym or endless nights coding alone in the dark are unsexy. The process is hidden from the headlines, buried deep in paragraphs or tucked into the end of the story.

Wealth takes time. Don’t plan to inherit a family fortune, to win the lottery, or file frivolous lawsuits trying to win big. Do it one step at a time. Put the hours in. Be okay with things taking time; learn to respect and enjoy the process. As a reminder, 70% of lottery winners go broke because they didn’t have a process. They won money through an event and quickly spent it away because they didn’t earn it.

#4. Never Start a Business ‘Doing What You Love’

This one was a bit of shocker. Not because I started a business out of doing what I loved, but because it’s such a common saying. Do you love animals? Open a pet grooming shop. Do you love doing yoga? Open a yoga studio. If you’re going to put time and money into a business, why not do what you love? It only makes logical sense right?

DeMarco points out the fatal flaw: opening a business doing what you love does not guarantee business. Most business started out of a love of something end up shuttering their doors due to lack of customers. They weren’t started to satisfy a ‘need’ or no ‘need’ was identified to build a business around the solution. Without a guarantee of customers who have a need for your solution, it’s not going to work.

“Stop thinking about business in terms of your selfish desires, whether it’s money, dreams or “do what you love.” Instead, chase needs, problems, pain points, service deficiencies, and emotions.”

I can testify to this. I started my business in 2014 after identifying a need working at Apple. Business owners and customers all wanted on-site support or installation, which Apple refused to provide (for a myriad of reasons). It eventually got to the point where customers were offering bribes to get me to come to their house or office to resolve issues or help them. I eventually quit my job to build a business around these needs. Five years later, the company is doing more business than ever before.

So what does DeMarco suggest to finally do what you love? If you go back to #2 on this list, the answer is have wealth first. If you build a business around a need, you’ll have customers. Customer will bring wealth. Wealth will allow you to do whatever you want, including pursuing what you love to do.

#5. Instead of Digging For Gold, Sell Shovels

I love the wisdom of “What’s the best way to get rich in a gold rush? Sell shovels.” Being a producer is the fastest way to become wealthy. What is a producer? Someone who has something to offer. As Robert Kiyosaki says, “Have something to sell. The poor have nothing to sell.”

DeMarco: “Instead of digging for gold, sell shovels. Instead of taking a class, offer a class. Instead of borrowing money, lend it. Instead of taking a job, hire for jobs. Instead of taking a mortgage, hold a mortgage. Break free from consumption, switch sides, and reorient to the world as producer.”

The point is, make yourself valuable. If you have a valuable or useful skill, people will seek you out. If you have something to offer, customers will be found. A lot of the mentality I find — especially among coworkers and family — is based around “what can I buy” or “how much can I have.” It’s a consumer culture. We are bombarded with advertisements and incentives to consume. It’s up to you to change your way of thinking, “switch sides” as DeMarco calls it, and become the one offering to consumers. “If millions seek you,” he adds, “you will be paid millions.”


I highly recommend The Millionaire Fastlane to anyone interested in breaking free of The Slow Lane or even The Sidewalk. It will change your way of thinking and hopefully set you in a direction to prosperity and financial freedom. I could easily have expanded my top 5 takeaways to top 10 or even 15, but this post would have gone on forever. DeMarco followed up The Millionaire Fastlane with a sequel, called UNSCRIPTED, which I will cover in another blog post! Pick up a copy of The Millionaire Fastlane (you can do so by clicking the book above) and take off down the Fastlane.