Your Obsession With Being The Best Is Killing Happiness

World's Happiest People

World’s Happiest People

Since I can remember, I’ve been made fun of and criticized for trying to be the best at whatever thing it was I was interested in at the time. My AP History teacher in high school was amazing and I would sit in the front of the class engrossed by all the stories he told about the Civil War and how he got to be an extra in Matthew Broderick and Denzel Washington’s 1989 movie, Glory.

At the end of the year, Mr. Stanton was kind enough to give me the AP History Award for most outstanding student. I was honored, but surprised because I wasn’t a great student and this was my only academic award I ever received. I think he just appreciated someone always attentively listening instead of dozing off like some of my other classmates.

But I disappointed Mr. Stanton in the end because I didn’t try harder. When I got the award, a couple classmates made me feel like a loser. They said I was a dork for liking history so much. As a result of such feedback, I decided not to study a lot for the AP History placement test, which could have given me college credit if I scored a 3 or better out of 5.

When Mr. Stanton enthusiastically asked how I did once he knew the scores were out, I didn’t want to tell him because I only scored a 2. I was not the most outstanding student he had envisioned and I felt horrible for letting him down.

“Sam, don’t worry about the exam,” replied Mr. Stanton. “It’s hard to remember everything in history anyway. But if you remember one thing, remember to never let anybody keep you from going for what you want. Thanks for always attending my classes and playing a good game of Risk!”

After Mr. Stanton’s talk, I began feeling angry that I let people negatively affect something I cared about. The battle was on between trying to be the best, not wanting to be a disappointment to others, and never letting anybody keep me from doing what I enjoyed again. Perhaps you’ve experienced a similar battle growing up and as an adult today.

How To Convince Your Spouse To Work Longer So You Can Retire Earlier

Retiring early on the beachOne can either work hard for their wealth, inherit their wealth, or marry into wealth. No way is the right way to get rich. Although the most honorable way is probably getting wealthy with your own two hands.

When I wrote the post, “Stay At Home Men Of The World, UNITE!” in February of 2012, I was being a little silly. The post was just a fun way of forecasting life as a stay at home man as I sought to build my online media business. Two years later there’s still a huge bias against men who are stay at home dads or non-breadwinners. Men who work traditional day jobs love to poke fun at men who don’t. Women, on the other hand, don’t seem biased at all against men who don’t work. In fact, I know several men and women who don’t work who ended up being secret lovers!

One of the strategies to retiring early is to have a working spouse. I have a couple lady friends who retired at 32 and now enjoy playing tennis and drinking chamomile tea during the day at my club as their husbands work their private equity jobs. One lady worked in advertising, and the other lady worked in corporate retail. When I asked whether either of them missed working they laughed in unison and said, “Not at all!”

During my time away from Corporate America from 2012-2013, I also met a lot of guys at Golden Gate Park (where I also play tennis) who retired early because their spouses worked. They were a little older on the early retiree spectrum (40-50). One husband’s wife is a cardiologist at UCSF Hospital. Another guy’s girlfriend is an executive at Salesforce.com. No doubt both their partners are doing well. All of the early retiree guys employed nannies to take care of their children during the day so they could play tennis as well. Gotta love it.

Thanks to the strengthening equality of men and women in the work force, more men are able to break free from corporate bondage to live alternative lifestyles. Men can be the stay-at-home parent now. Men can drink beers at the country club after a round of golf with their buddies and not have to worry as much about money anymore. The equalization of the sexes for career advancement and pay have been a big boon for men as well.

In this article, I’d like to share some tips from early retirees who successfully convinced their spouse or partner to continue working so they don’t have to. 

Interview With Sarah Wood, Co-Founder Of Unruly Media On Advertising, Entrepreneurship, London

Sarah Wood Unruly Media Co-FounderAs I’m off to London this summer for business and Wimbledon, I thought it would be a good idea to interview Sarah Wood, Co-Founder of Unruly Media, a social video advertising platform based in London. Sarah has been voted UK Female Entrepreneur of the Year by the Growing Business Awards, one of 15 Women to Watch in Tech by Inc., one of 10 London-Based Entrepreneurs to Watch by Forbes, Digital Woman of the Year by RED Magazine, and a Rising Star in Computer Weekly’s Most Influential Women in UK IT. Rock star!

Sarah is kind enough to take us out to dinner and host us at their corporate apartment somewhere north of Canary Wharf while we are there. If you happen to be in London from June 20 to June 30th, I’m happy to get a drink at your local pub.

I first worked with Unruly Media a couple years ago on a couple car campaigns for BMW and Jeep (video for Veteran’s Day). I was introduced by Courtnay, who used to work at another advertising platform in San Francisco and who now works at Unruly. The world is small, so it’s always good to maintain good relationships over time. Everybody will eventually know everybody.

London is truly one of the world’s great international cities. The last time I was there was in 2011 and I chronicled how much I spent on food, transportation, and shelter. London makes Manhattan look cheap, and San Francisco feel like a developing nation in terms of costs.

Without further ado, here’s my interview with Sarah on entrepreneurship, advertising, video, and London!

From Debtor To Millionaire: How A Windfall Changed My Life

This is a guest post from J.D. Roth, who founded the blog Get Rich Slowly in 2006 and is the author of Your Money: The Missing Manual. I first met JD four years ago for lunch up in Portland when I was still working. By that time, J.D. was already a mini-celebrity in the personal finance world through his story telling abilities and topical focus of paying down debt and living a more frugal lifestyle. We came from opposite ends of the financial and topical spectrum, but as fate would have it, we’re in pretty similar boats now.

I admire J.D. because he is a “blogging purist” – someone who writes for the love of writing first, community second, and income a distant third. Instead of an interview, I asked J.D. to share his story of how he went from debtor living paycheck-to-paycheck to financially free in just a few short years. His latest project is a year-long course on how to master your money, which explains how to slash costs, properly budget, and boost income so that you can pursue early retirement and other goals. Please enjoy this great post about struggle, loss, change, and love. 

In The Beginning

My parents

I’m a lucky man, and I know it. But for a long time, it sure didn’t seem that way.

When I was a boy, my family was poor. We lived in a single-wide trailer house in rural Oregon. My father was often out of work. When he was unemployed, things were rough. We never went hungry, but sometimes we came close. More than once, we were bailed out by the kindness of other families in our church.

We didn’t always struggle. Sometimes my parents had money, at least for a little while. You see, my father was a serial entrepreneur. He was always starting businesses. Even when he had a job selling boxes or staplers or candy bars, he had something going on the side. Most of his businesses failed, but some succeeded.

In 1977, my father sold one business for $300,000. He was supposed to receive $5000 per month for fifteen years, which seemed like a lot of money at the time. To celebrate, he went out and bought an airplane, a sailboat, and a Kenwood stereo. Life was good — until the buyer went bankrupt. Because he hadn’t saved anything from the few payments, Dad was broke again. And unemployed. We were right back where we’d started.

This “famine or feast” pattern continued throughout my entire childhood. Most of the time, it was famine — not feast.

In the late 1980s, I went away to college. Because I knew my parents couldn’t help me pay for school, I took care of things myself. I was a good student with a lot of extracurricular activities: president of the computer club, national competitor in Future Business Leaders of America, editor of the school literary magazine, and so on. Plus I had terrific scores on the the PSAT and SAT. As a result, I earned a full-ride scholarship. I worked two or three or five jobs to pay for housing and to earn spending money.

During college, I developed a spending habit. In order to keep up with my friends, many of whom seemed to be rich (as I defined it at the time), I used credit cards. I began to carry debt. At first, I only owed a few hundred dollars, but by the time I graduated with a psychology degree, I had a few thousand dollars in credit-card debt.

After college, my debts continued to mount. I bought a new car. When I had money, I spent it. When I didn’t have money, I still spent it. By the middle of 1995, just four years after I’d graduated, I’d accumulated over $20,000 in credit-card debt. It got worse. In 2004, my consumer debt topped $35,000. I felt like I was drowning. (See: How Many Credit Cards Should I Have Until It’s Too Many?)

FutureAdvisor Review: An Interview With Bo Lu, CEO On The Digital Wealth Management Industry

FutureAdvisor ReviewI’m pleased to share an interview I did with Bo Lu, the CEO of FutureAdvisor. FutureAdvisor is an algorithmic money manager with sophisticated tools to help clients manage their money. Over 200,000 households use FutureAdvisor’s advice to help grow $30 billion.

I invited Bo over to play tennis at my club and chat about business in between games. I’m fascinated by the entrepreneur’s story and I hope you’ll find this interview insightful. Bo shares his thoughts about the future of the online wealth management business, immigrating to America, why he decided to leave his job at Microsoft, the Y Combinator experience, and more.

INTERVIEW WITH FUTUREADVISOR CEO, BO LU

Please tell me about your background. You mentioned your parents came to the States when they were 40. Did you have a difficult time assimilating into a new culture? I’m curious to hear your thoughts on why there are so many immigrant success stories.

Bo: I was seven when I came to the US from China. I only knew two words of English — lake and cake — and I usually got them mixed up. So yes, there were some speed bumps. But I had a really great English teacher in Morgantown, Virginia, who basically made me fluent within a year. Mrs Hutchison. I’m still grateful to her.

Immigrants can see with clearer eyes how enormous the opportunities in America are. A lot of them come from places where their choices are extremely limited, so they can almost feel the freedom with their fingertips. They can taste it. If you grow up in America and never see the alternatives, you might be blind to how much you can do here.

Why did you decide to work at Microsoft? Why do people stay at Microsoft when it seems like they have gone ex-growth?

Bo: I was recruited for an internship at Microsoft while I was completing my computer science degree at the University of Illinois Champaign-Urbana. There are great people working there. You have to remember that Microsoft is a huge company. Some parts may seem ex-growth, but some are very much in the growth mindset. When they released the Kinect in 2011, that was ground breaking. Google’s only catching up now with Project Tango. There’s a lot of innovation going on.

What gave you the courage to leave your job at Microsoft to start FutureAdvisor? Please share with us your experience at Y-Combinator.

Bo: The company was really born out of scratching our own itch so to speak. Our friends kept coming to us for financial advice and it seemed like there were no great options for young professionals like us. My co-founder Jon Xu and I both saw our projects slow down at Microsoft, so we suddenly had some time and energy to devote to our friends. Jon’s got a lot of talents, including being a great technical lead. So we set out to build this solution to help our friends take control of their finances. To do market research, we talked to our friends and countless strangers at coffee shops about what they expect from a product like this and whether they would pay for this service.

We’re great friends with Garry Tan, then the co-founder of Posterous who did Y Combinator and had nothing but great things to say about the experience. When we got in, Y Combinator exceeded our expectations. Because we built the first iteration of FutureAdvisor from scratch during YC, we got a lot of insightful feedback from the partners and our peers on a constant basis, allowing us to iterate very quickly. It also gave us a great platform to introduce our product to investors, customers and talented engineers we would later hire.

Did you make a financial plan or create financial goals before leaving Microsoft?

Bo: I’ve been investing and thinking about financial goals since I was a teenager. Most of what I earned at my first internship got invested in a number of tech funds. That was before the dot-com bust, and it taught me an important lesson about diversifying.

What is your definition of success in the startup world?

Bo: It depends on the stage of the startup. Very early stage startups are successful if they can identify a product people want, and gather a team to build it. A couple years in, startup success usually means very fast growth — like 30 percent month on month revenue increases — even if the business isn’t profitable yet. The next milestone is when the startup finds a way to acquire customers inexpensively and reaches a scale where it becomes profitable. At that point, it’s become a company that can be judged by normal financial metrics.

Bo Lu, FutureAdvisors

What percentage would you attribute success to hard work vs. luck?

Bo: Well, I’m a well educated male who was raised by loving parents and lives in America. That support and those opportunities make me feel very lucky. My parents also taught me the value of hard work, and like most founders, I do work very hard. At a certain point, work lays the groundwork for luck. A friend of mine says: “The harder I work, the luckier I get.” For me, that means that all of us create an ecosystem of friends and partners around us. We all build networks of support, we all have reputations, and we all try to deliver on our promises. The better we do that, the better the world responds.

What are the two or three main reasons why some startups fail even though the market opportunity is huge?

Bo: Every successful startup does similar things to succeed, while every failed startup fails in its own way. Everyone thinks their market opportunity is huge, otherwise they wouldn’t be doing it. But they need to confirm that. They need to take what they made to the people who might use it and verify how much those people would pay. That’s the first step. Some people are too precious about their ideas to really test them. Tech risk and market risk are the two biggest reasons startups fail.

Secondly, founders need to be people who can build a team. That means being just hard-assed enough to make sure things get done, and just soft enough to attract a good team and keep them happy. That’s a fine line to walk and it’s easy to err on either side.

The best CEOs are listening all the time. They’re listening to customers to discover their problems and fix them. They’re listening to employees to make operations run smoother. They’re listening to experienced investors who may have confronted similar problems before.

Third, some startups are wildly innovative but don’t manage to convince the world that’s the case. Engineers need great marketers, great communicators, and lots of visibility. The worst way to fail is to never be noticed when you’ve built something great.

What do you look for when looking for investors?

Bo: We had our choice of great investors. But best thing I would recommend anyone do is talk to other founders they trust, who have worked with investors you’re considering, and learn about how they work. You want people who will share your values, trust you to do your work, and stick with you through thick and thin.

You mentioned the FutureAdvisor algorithm is on its 8th iteration. Please explain what that means exactly.

Bo: FutureAdvisor’s recommendation engine has gotten smarter with every iteration. When we started this, we made recommendations at the asset level only. For example, very early on we would tell you that you needed to increase your foreign developed equities from 5% to 10% or that you are overpaying in fees by $250 per year on a fund.

Over time, we’ve developed more precise recommendations down to the commission-free fund that you should actually buy to move your foreign developed equities percentage and save you on fees. We would take into account your employer sponsored 401(k) plan as well in our analysis of your portfolio. A much smarter algorithm now allows us to deliver more precise portfolio results. Our premium service now takes into account tax lots to minimize tax impact of rebalancing and we can automatically harvest tax losses to further minimize your tax exposure.

Where do you see the future of the financial tech advisory industry in five years? Is the market big enough for everybody to win?

Bo: In the long run, no market is big enough for everyone to win. But for the moment, financial tech is a pretty green field. There’s so much to be done. The choke point is the talent and drive to execute on a vision. Financial services have been getting more automated for decades, ever since the back-office crisis of 1970. People and paper simply are not built to handle the volume and speed of financial data. The evolution away from people and paper will continue. In five years, a handful of financial tech firms will be household names. We plan to be one of them.

What is FutureAdvisor’s competitive advantage over other algo advisors such as Betterment and Wealthfront.

Bo: From our perspective, the major online investment managers have different strengths: Betterment is great if you’re focused on short-term savings rather than retirement. Wealthfront is great if you’re coming straight from cash, but they can’t see assets that aren’t held by them directly (i.e. prior investments across many accounts). FutureAdvisor looks at all your assets, including your 401k. We rebalance your portfolio, spreading your risk exposure across domestic and foreign equities, bonds and REITs. We balance the rest of your assets around your 401(k).

FutureAdvisor also conduct daily tax-loss harvesting — which uses any stock-market losses to offset the taxes you owe. Our typical account size is about $100,000, and we usually save people around $1000 in fees and taxes per year.

How do you think about pricing? I believe FutureAdvisor is at 50 bps, which is higher than your competitors.

Bo: Our prices are half the price of traditional wealth managers, and lower than some of our competitors. And we aim to do a lot more for investors than our competitors.

At 50 bps, FutureAdvisor can generate $5 million in revenue managing $1 billion dollars. How much under management do you need to run in order to generate an operating profit? Does being profitable matter in the short-term since there is so much venture capital money chasing deals? Do you have a target AUM over the next 1, 3, and 5 years?

Bo: We run a very lean team. Since we don’t need to pay for a large sales staff, our path to profitability is fairly short. We expect to revenue neutral at $1B in AUM. That said, we expect to raise additional funding to enable us to grow beyond that point.

Sam: Do you believe the industry is a little too complacent right now given stock markets are at record highs? How do you think the industry will change if there is a prolonged multi-year downturn?

Bo: I don’t see any complacency. Most of us experienced the dot-com crash and the great recession, and we have vivid memories of what a downturn is like. Everyone (here and industry wide) is working to make sure we can handle that situation well. Prolonged multiyear downturns always have an effect on finance. Usually you see consolidation. Firms pool their resources or die. Fewer challengers enter the market.

Sam: What is your advice for users who are skeptical of using an algorithmic advisor?

Bo: First of all, I’d say: Give us a try. You can set up a free account in a few minutes, and we’ll give you actionable advice for no charge. See what you think. Secondly, I’d say that traditional advisors are using algorithms, too. It’s just that people feel the handshake and don’t see the math. All financial advisors have models they apply to their clients.

HERE’S A SAMPLE OF HOW FUTUREADVISOR WORKS

1) Once you register, you’ll be promoted to share a little about yourself. The first chart helps FutureAdvisor ascertain your current risk-profile and goals to come up with an ideal target portfolio recommendation.

FutureAdvisor Dashboard

2) The second chart shows you your existing portfolio grades based on Performance, Diversification, Fee Efficiency, and Tax Efficiency. The goal is to get A’s in all categories.

FutureAdvisor Dashboard

3) The third chart gives you specific advice on how to improve your portfolio. I love this feature because too many times financial advice is very general in nature. I like advice that provides concrete steps.

FutureAdvisor Recommendations

4) The final chart shows your now A-rated portfolio, all thanks to FutureAdvisor’s algorithms. You can do all the changes yourself for free, or you can have FutureAdvisor manage your portfolio for you for 0.5% of assets a year. They’ll conduct tax loss harvesting to optimize your portfolio as well and there will be no more trading fees once you are a client.

DIGITAL WEALTH MANAGEMENT SOLUTION

FutureAdvisor looks like a terrific solution for those who are tech savvy, but don’t have hundreds of thousands of dollars to invest at the moment. You can start with as little as $10,000 and go from there, or use their free financial tools.

Good savings habits builds wealth. But it’s the proper investment of those savings that creates great wealth over time. FutureAdvisor can help you build financial freedom sooner, rather than later. Once you link your accounts, you’ll get a free Personalized Investing Plan in 2 minutes. They’ll tell you exactly how to improve it.

Regards,

Sam

Updated: 12/1/2014