Motivation Archives

Perpetual Failure: The Reason Why I Continue To Save So Much

Updated: 07/15/2021 by Financial Samurai 85 Comments

Perpetual failure is the reason why I save

One of the reasons why I continue to save so much is that I’m a perpetual failure. I’ve made so many mistakes in my life that I need a financial buffer to constantly bail me out.

Even after negotiating a severance and leaving Corporate America in 2012, I still save most of my passive income and online income each month.

It feels like eventually, this early retirement dreamworld my wife and I have been living in will come crashing down on us. In 2020, it almost did to the global pandemic.

Always Question Your Luck

Whenever things are going well for an extended period of time, I begin to worry. Where did all the bad luck go? Something must be wrong. I’m not sure why life has turned out OK when there are plenty of smarter, more deserving people out there who still struggle. Maybe the exhausted fumes of good karma from a past life?

The longer you live, the longer you realize nothing good lasts forever. Something bad is bound to happen – a break of an ankle, a bad investment, a friend who disappoints, a boss who lies, a disease that debilitates, a coronavirus pandemic.

The global pandemic began months after our daughter was born. Then, preschools shut down. Then, stocks crashed in March 2020. If there’s one thing 2020 taught us, it’s that anything and everything can happen!

Instead of waiting for disappointment, I sometimes like to seek out failure to knock some reality back into my life. Getting rejected is also a great way of keeping the ego under control.

I believe most of our wealth is mainly due to luck. To start thinking our wealth was mostly due to hard work and skill will set you up for failure.

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2Q2020 Financial Samurai Review: To The Edge And Back!

Updated: 07/13/2020 by Financial Samurai 47 Comments

At last, I finally experienced the longest month of my life: June 2020. I’m so glad the month and the quarter are behind us. But it’s also exhausting to think about what lies ahead in an even longer July as America experiences a second wave of COVID-19 cases.

In this 2Q2020 Financial Samurai review, I just want to recap some things that happened so I can reminisce more accurately when I’m older. I already don’t remember what happened in January and February without checking my notes.

Further, I’m absolutely sure 50 years from now, my grandkids will want to get an idea of what grandad was thinking during a global pandemic. I hope all y’all keep a recorded journal of this crazy time as well!

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What Income Level Is Considered Rich?

Updated: 07/28/2021 by Financial Samurai 380 Comments

So you’re wondering what income level is considered rich. After all, if everybody makes $1,000,000 a year, are you considered rich if you make only $500,000 a year? Probably not! In other words, rich is relative and also subjective.

When Obama was president, he considered single people making over $200,000 to be rich. He specifically called for raising taxes on singles making over $200,000 and couples making $250,000 every year he was in office.

At the end of 2012, there was a compromise in Congress for raising income taxes for those making $400,000/$450,000 and above.

Why $400,000 + $400,000 doesn’t equal $800,000 for a married couple to pay more taxes, I’m not sure. The government harkened back to its old days of believing one spouse should stay at home. Thankfully, the marriage penalty tax has all but been abolished.

Now in 2021+, Joe Biden also believes anybody or any household making over $400,000 is rich. He has promised to raise taxes back to 39.7% from 37% for those making over $400,000. That’s tough for parents with kids who are already burned out from working some much at home during the pandemic.

Therefore, if you are constantly stressed out making a lot of money, you might want to consider taking things down a notch! Making over $400,000 while working 80 hours a week is not considered rich. That makes you a time mendicant with minimal freedom to do what you want.

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Never Let A Crisis Go To Waste: Three Things Every Household Should Do Now

Updated: 01/15/2021 by Financial Samurai 43 Comments

The coronavirus pandemic is a crisis. As such, we should never let a crisis go to waste. There’s always something good to be done during difficult times.

Before the coronavirus, our family of four had everything planned out. We were going to lead a simple, early-retirement lifestyle in the San Francisco Bay Area.

Our three-year-old son would attend preschool during the day while my wife and I would take care of our baby daughter. During my free-time, I would write on Financial Samurai, as I have been doing since 2009, and play some tennis and softball to stay in shape.

Once our daughter turned six months old, we planned to go up to Lake Tahoe and escape for a month or two during the summer.

Once the coronavirus hit, everything changed. Not only were we robbed of our freedom due to the shelter-in-place rules, at one point, we were down over $600,000 in our equity investments alone. The sudden downturn was so swift, that I even thought about trying to find a job again to bolster our finances.

Thankfully, the stock market rebounded from its lows in March and I’m no longer thinking of going back to work. Although our family is ineligible for stimulus checks and enhanced unemployment benefits that are doing a great job to support our nation, we are at least thankful that our investments have recovered, for now.

Here are three things our family is doing to ensure that this latest crisis doesn’t destroy us. I recommend you do these three things too so that we may all potentially prosper in the end.

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When People Doubt You, Just Keep On Winning

Updated: 04/28/2021 by Financial Samurai 32 Comments

When people doubt you, just keep on winning. If you keep on winning, people will eventually shut up and leave you alone. As a winner, they might actually start respecting you! But you don’t really care because you don’t care about prestige.

After 10 years of grinding away, one of my friends sold his business for $73 million at age 32. It was a bootstrapped business, so he ended up getting over 80% of the gross proceeds. Can you imagine? Wow.

When I asked him what he did with his newfound riches, he said he took a month off to go surfing with his buddies. After he got his fill, he then started a new software business.

When I asked him why he decided to get back into the grind so quickly, he responded, “I want to see if I can go do it again to prove to everyone and to myself that it wasn’t a fluke.”

During my financial journey, I’ve met so many people who have done extraordinarily well, yet continue to work all day and night because they know they were extremely lucky to have achieved their success. By replicating their success they also eradicate their guilt.

Their work ethic and self-awareness are both inspiring and concerning. But I empathize with my friend because I have the same desire to prove my doubters wrong all the time. It’s in my DNA.

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Create An Abundance Mindset To Grow Your Wealth

Updated: 08/19/2021 by Financial Samurai 86 Comments

An abundance mindset is key to growing your wealth. As soon as you start believing you deserve to be rich, you will experience more opportunities.

I’m on a financial journey just like all of you. The only real difference may be that I record my thoughts and feelings about my progress publicly. I will do my best to be as authentic as possible. By sharing what we know, we’re able to learn from others. I think we all have blind spots that need illuminating.

There’s one new observation I’ve learned since starting Financial Samurai in 2009 and leaving Corporate America in 2012 that I’d like to share with you. It’s a realization that lends weight to the power of positive thinking.

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Candid Advice For Those Joining The Startup World: Sleep With One Eye Open

Updated: 10/21/2021 by Financial Samurai 73 Comments

Thinking about joining a startup to get rich in the new decade? You’re not alone. After so many successfully IPOs, during a pandemic no less, startup fever is high!

There’s been a great shift away from traditional careers like big law, medicine, management consulting, and banking towards joining startups. With promises of riches and the greater ability to make an impact, who wouldn’t want to join a startup?

Unfortunately, I believe most people who join startups end up poorer than richer. Given most startups fail, this is an indomitable truth. Only the lucky ones get all the media attention and praise.

The Importance Of Equity Ownership

Ever since college graduation in 1999, I’ve had equity ownership in every single company I’ve worked for. When you get equity, no matter how small it is, you tend to pick up the litter in the hallway, champion your company outside of work, and work harder than the actual value of your total compensation. In short, having equity makes you care more!

Pride of ownership is important for maximizing employee production. There’s just one problem: sharing.

If you’re a founder, you’ve got to have the generosity and foresight to let your employees share in your company’s equity. Giving up equity is one of the hardest things a founder can do because we are all naturally greedy. We want everything for ourselves despite the need for great people to make our company a raging success.

Sometimes, we’d rather fail and hold onto everything than give up equity in order to succeed. Irrational.

As an owner of an online business and as a consultant/advisor for startups, I straddle both sides of the fence. I’ve found it impossible to get truly passionate about something without any equity.

Working with no equity feels off. It makes me want to do only 101% of what is expected, not 130%. I wonder if this is how much of the workforce feels where they don’t have any stake in the organization they are working for? Please let me know.

If you want to join a startup, this post offers up some candid advice. I’ve lived in San Francisco, the startup capital of the world, since 2001. I’ve seen the good and bad. This post is a 3,500 word beast that will make you see the world a little differently by the end.

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Freedom Is Way More Valuable Than Money: Quarantine Edition Review

Updated: 01/16/2021 by Financial Samurai 62 Comments

I moved from annual reviews to quarterly reviews this year, but with how quickly April flew by, I just had to write another!

April was supposed to be a terrible month based on the downward trajectory we were experiencing in March. It was easy to imagine the S&P 500 heading below 2,000. However, financially, April ended up as one of the best months ever.

The S&P 500 rebounded by an astounding ~30% from its bottom. Over 80 million Americans got a stimulus check. Over 25 million are getting an extra $600/week in unemployment benefits. And over 2 million small businesses are getting 2.5 months of payroll covered if they keep their employees with the same pay for at least eight weeks.

On the coronavirus front, although there have been tragically over 50,000 deaths attributed to the virus, the government had at one point guided us to expect over a million deaths. With much dire warning, it feels like a blessing the government got their predictions so consistently wrong.

Then on April 29, it was announced some of the Bay Area’s shelter-in-place restrictions would finally be lifted. Starting on May 4, we will finally be allowed to once again play golf, sunbathe in parks, fish, go to the car wash, buy plants at nurseries, and start doing home construction again. I’m excited to dust off my old golf sticks that haven’t been touched in two years.

Once I heard the news, I was reminded what I’ve always known since 2012, that freedom is way more valuable than money.

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Want More Money? Ask Yourself This One Question

Updated: 09/20/2020 by Financial Samurai 26 Comments

Believe In Yourself, Squaw Valley — Once you believe, it’ll start raining money

If you want more money, one of the most important things is believing you deserve to have more money. There are trillions of dollars out there for the taking. Why shouldn’t you enjoy some of the world’s prosperity as an honest, diligent, and talented individual as well?

I began developing my money mindset after reading countless stories of CEOs earning millions of dollars while driving their companies into the ground. They would get massive multi-million dollar severance packages for crap work that even a baboon could do. As soon as I started believing in my worth, my confidence shot up and the money started coming in.

For example, IBM’s CEO got a $100,000 base pay raise to $1.6 million in 2015 along with a $3.6 million bonus in 2014, and a $13.3 million stock incentive reward payable in 2018. Meanwhile, IBM was down ~20% over the past two years while the S&P 500 was up 40% for 60% underperformance!

For half the compensation, you and I could do just as good a job as the IBM CEO. I’m picking on IBM here because I bought the stock in my active portfolio. One day this dog will bark!

On a more common level, I’ve seen people who are utterly unqualified get hired for jobs making multiple six figures with multiple six figures in stock options. Every time I see such an event I’m thinking to myself a couple things. The first is, What the hell were they thinking?!

The second question is the subject of this post.

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Dear Minorities, Use Racism As Motivation For Achieving Financial Independence

Updated: 08/19/2021 by Financial Samurai 115 Comments

When I was a kid, I used to be very combative when it came to fighting racism. Part of the reason had to do with attending international schools in Asia until I was 14.

Kids from all over the world can get pretty nasty towards each other along racial lines, even though you’d think the opposite might happen in a diverse group.

I took up martial arts and learned ways to cripple my opponents in a fight if necessary. It’s just in my personality to stick up for myself and others, even if it means going to the hospital or jail.

Use Racism As Motivation To Get Better

It’s easy to dismiss racism as no big deal if you’re not a minority. You don’t experience the same slights, perceived or otherwise, that frequently come your way. It happens at work, or in the grocery store, or on an airplane, or when you’re standing in line anywhere minding your own business.

Over time you become inured to the insults, but the sting never goes away. It just gets buried. You move on.

Now that I’m an adult who has gone through the system to finally have enough to live life on my own terms, people have stopped pissing me off as much.

I don’t have to kiss someone’s ass to get ahead, nor do I have to sacrifice any shred of dignity to make more money. I’ve really got nothing to complain about, so I don’t.

But when I see bullshit incidences like when a white woman called the cops on a black man after he simply asked her to leash her dog in Central Park or when a white police officer murders a black man by placing his knee on his neck for over five minutes after he cries out multiple times for help, I am outraged!

These types of situations keep happening over and over again. We need to make our voices heard. We need to share our experiences. We need to make people accountable for their actions.

I don’t know what it’s like to be a black man living in America, but I do want to share some perspective on what life is like as an Asian minority living in America. Racism was a big reason why I decided to save so much and aggressively work on my passive income streams.

The desire to have absolute choice and be beholden to no one was and still is a huge motivating factor.

I hope by sharing my experiences with racism others will share their own experiences as well. Ultimately, I hope to encourage those with racist tendencies to realize how much their actions hurt others so they can finally stop.

Every single hateful encounter I experience offline or online is from someone who has something difficult going on with their financial or personal lives. I believe that if more people at least can get their financial lives in order, some of their hate for others will slowly melt away.

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