Persistence, Patience, Purpose


We grew up in the age of microwaves, airplanes and high speed internet, which means we want everything yesterday. The same is true for our financial security. However, no matter how quickly we can download movies or get from one coast to the next, we have to accept that short of an inheritance or the Mega Millions, we have to build our success one block at a time.

Having the level of comfort that we want, does not happen overnight. We must first set goals to have something to strive for (Purpose). But we will surely face obstacles, and worse yet, failure. We must continue to push forward in the face of adversity (Persistence). Falling short of our goals is not a condemnation of  our plan itself but an indication that our approach was not the correct one. But most importantly, we have to be able to wait to reap the fruits of our labor (Patience). Rome was not built in a day, neither will your first million. Few great successful self-made millionaires saw overnight success. While it does get easier over time, and the second million may be earned overnight (because it takes money to make money), your first break won’t happen that quickly.

These are the 3 Ps of success that will help you keep a fourth one in mind: Perspective.


Adulting 101: Big Girl Money


Adulting is hard. It’s even harder for the millennials who came of age during or after the Great Recession. It certainly doesn’t help that financial literacy has always lacked in our society. So I decided to put together a list of 10 things you can do to manage your personal finances like a grown up.

1. Have a budget to help you keep tabs on money.

2. Set specific and realistic financial goals to make sure that you not only have something to look forward to but that you also stick with it.

3. Find a money role model who will give you something to strive for. S/he will make you realize that it is possible to get yourself out of debt, they can keep you accountable and they are a much better influence than your friend who says: “YOLO!”

4. Practice the art of ‘No’. Establishing boundaries protects your wallet as much as your sanity. Girls trip to Bali? Matching designer duds for the bachelorette week end? Expensive steak dinner after work? If you can’t afford it, say no & stay firm.

5. Don’t overspend. It sounds simple but if it were that easy, studies results wouldn’t show that 1/2 of all Americans are struggling financially. There’s no greater sign of maturity than exercising self control & being able to delay gratification.

6. Save, save, save. Emergency funds, retirement, short & long term goals. Save for all of them. Saving will prevent you from spiraling out of control under a mountain of debt.

7. Monitor your credit. There should never be surprises when it comes to your finances. Maybe except for pleasant ones like being ahead of your savings schedule or inheritance from a rich long lost cousin. You don’t want to find out long after you’ve started the process that your mortgage has been denied or after your clunker breaks down that you don’t qualify for a car loan. You should show up for credit applications equipped with enough information to negotiate from a position of power.

8. Be properly insured. When I landed in the hospital in late 2009, I couldn’t have imagined my life would change the way it did. In fact, I did 2-hour street parking outside of the hospital. I ended up leaving 4 weeks later & a month after that, I got $50,000 bill. All but $150 was covered by insurance. As a seemingly healthy 23 year old, I could have passed on coverage to save myself the $250 a month I was paying. Instead, I decided I needed to be properly covered like the adult that  I was & that decision saved me from financial disaster.

9. Start learning investment basics. You cannot save your way to wealth. You can only earn your way to wealth either through wages, investments or some combination of both. You don’t have to become an expert stock picker, but you should learn the difference between some key concepts like 401k v. IRA, stocks, bonds & mutual funds, associated fees & tax implications of different investment types, etc.

10. Track your net worth. Your net worth is a measure of your financial progress. It is also a motivating & financial management tool & that is why I began actively tracking my net worth late last year.

Rushing is the Enemy of Discernment: How Patience Prevented a $40,000 Loss


I was recently discussing the importance of patience relative relationships with a group of women. We went over some of the sources of failure in relationships and one of the things mentioned is how people often are not who they claim to be. That’s when I mentioned that no one can keep up a pretense forever. With enough times, everyone will reveal their true colors. This then led me to thinking of the time I saved myself a lot of heartache because I did something that was completely against my nature: showing patience in the face of what at the time seemed to be a fantastic opportunity when in reality it was a well-dressed scam.

In November of 2015 I met a Real Estate Broker who offered to take me under his wing. It was a working relationship where he would play the role of mentor and trainer. Everything was going as planned until he made me a new proposition in January of 2016: Investing in a new construction project in a high end neighborhood. According to him, the 4,000 square foot house would sell for $4.5 million, $4 million minimum. He already had the land, which his largest investor put $1 million towards purchasing. He was looking for additional investors to fund the actual construction. He was offering a 10% return on investment for every $10,000 invested. This was the most tempting investment opportunity presented to me yet because at the time, my husband and I had $40,000 in savings. According to him, the project would be complete in May or June and would hit the market in July or even maybe late June. This offer meant that I could turn $40,000 into $56,000 before Thanksgiving.

But there was one problem. The money was not easily accessible. It was parked in a CD that would not mature for another month, in late February. It normally would be a no brainer to break the CD, pay the bank a couple hundred dollars in early termination fees to access the funds and hand them over but I decided  against it. It simply did not make any sense to rush so quickly into a project. It was only a month away and if it was that great of an opportunity, and meant to be it would still be there in 3-4 weeks. I thought that the delay was a unique opportunity to fully evaluate the offer and weigh the pros and cons.

I often hear that patience is a virtue. Thankfully there are other characteristics that are also virtues because patience is not one of my strong suits. But this time, there was something keeping me grounded. Maybe it was how large the sum was. Maybe it was the financial security I was experiencing. Yet, I was in no rush to take the offer. I told him I’d think about it and get back to him. I explained that I not only needed to discuss it with my husband, but that the money itself was tied up. He agreed to wait and the days ticked by.

However, instead of being excited at the new opportunity that was fast approaching, I became increasingly uneasy. The more time I had to think about the project, the less attractive it seemed. Not the numbers, but the circumstances.

A) This man who had been a real estate broker and investor for more than 30 years and has never moved out of his hometown, somehow decided that a couple that he met only a few months ago should benefit from this opportunity. I know that many people will give a stranger a shot, but I think a deal that great should have been offered to and taken up by his friends first. The fact that it was still available to us made me wonder if it was as good as he made it out to be.

B) He gave me a contract outlining the terms of the agreement, claiming the contract was drafted by his attorney, but it was shock-full of spelling and grammatical errors.

C) He embellished/oversold some aspects of the project. While the real estate market in Boston is very strong and there are a lot of wealthy people in the area, a multi-million dollar home is still only accessible to the 1%  and would not sell very quickly. He kept insisting the deal would be done fast and that made me wonder what else he exaggerated and/or straight up lied about.

D) The calls… The bloody calls… He kept calling, texting and emailing asking when the money would be available. I don’t know about you, but I never heard of someone who has a great opportunity that will make someone else money and he has to beg others to take it. It reeked of desperation and made me suspicious. He was contacting me in some manner at least once a week wanting an update. Finally, a few days before the CD matured, I got a “reminder” text about how he’s gathering investors because he needs to move forward and I needed to make a decision.

I did make a decision: I turned him down.

Fast forward to November 2016…

I am waiting on a $4,000 check he owes me for a real estate transaction. Meanwhile I have a lunch date on a snowy Saturday with a mutual acquaintance who happens to be his former assistant where I discover a series of interesting tidbits:

  1. The house had still not been built (months after it was supposed to have been sold). There was only a fence around the land and he didn’t even have building permits yet. There was no money. None. In fact, the temporary fence they normally put around construction sites had collapsed and the company that put up the fence refused to come out and fix it because he had not paid them for putting up the fence in the first place. The extremely past due account made him ineligible for any additional work.
  2. He owed a long list of people money and the sum was astounding:
    1. 5 “investors” from each he took $10,000 for that new construction = $50,000
    2. A commercial real estate buyer $50,000 (that particular deal cost him his license since it was part of a transaction. In Massachusetts mishandling of client funds is the fastest way to get your license suspended or revoked)
    3. A different investor he owed $30,000
    4. Agent 1 he owed $31,000
    5. Agent 2 he owed $20,000
    6. Agent 3 he owed $12,000
    7. Agent 4 he owed $7,000
    8. An other real estate company he owed $5,000
    9. He owed me $4,000
    10. A lumber company he owed $2,500
    11. Fence company (sum unknown)
    12. Wages to his former office manager (sum unknown)
    13. Wages to his former assistant (sum unknown)
  3. There were 3 pending lawsuits against him in 2 different district courts
  4. He had grossly inflated the potential for profit. The new construction would not sell for $4-4.5 million. The assistant herself had worked on the market analysis and said the house would likely sell for $2.5 million, maybe $3 million at the most.
  5. His initial investor who bought the land wanted not only his first million back but an additional $200,000 in returns. With an estimated cost to build of $800,000, he would be in for at least $2 million, not including an additional $125k for commission, $15-20k for staging and marketing. Which means he understated his expenses, and with all the “investors” waiting in line for their 10-50% ROIs, someone was not going to get paid.

Well, it turns out that “someone” really was a whole lot of people. All of his accounts had negative balances and all the checks he began writing to appease people were bouncing. While the land and the project are real, the money he collected from people were really to pay off others that he had swindled in recent years. He had no intention of using the money towards the house. Which means, I wasn’t going to get my money by Labor Day, Thanksgiving or ever. I wasn’t even going to collect $4k let alone $40k or even $56k. In other words, my rare patience making an appearance at that critical time gave me the opportunity to carefully evaluate and reject something that would have been a costly devastating mistake. My decision to wait saved us from being ripped off.

Maybe I should make a meme… I don’t always wait, but when I do, I save $40,000.

Question Everything

I don’t mean to speak for anyone but I’d like to think that we work hard for our money and we would like to keep it. That’s why I discussed fraudulent investments earlier and some of their tell-tale signs to help you recognize and avoid them. But people can be really crafty when it’s time to con you out of some cash.

If the proposed investment initially passes the smell test, here are three questions you can ask to further pull back some layers and determine the merits of the deal:

Does the dealer have a license? Even with the best of intention, the market has shown that it cannot be trusted to regulate itself. The best way of ensuring that people and organizations are doing the right thing is to have the threat of severe penalties (usually financial) hanging over their head. Unlicensed advisers are illegal and accountable to no one. Furthermore, we do not know what their qualifications are.

Does the risk/reward structure make sense? “High risk, high reward” is a common cliche, but it is true. If someone is offering a low risk guaranteed investment, the returns will likely be very low. The opposite applies if the rewards are significant. The risk is likely to be high and the returns will not be guaranteed. Anything different is likely a scam, or at best it is misrepresented.

Is the investment registered? It is similar to an unlicensed dealer. Who is tracking and regulating the security if it is unregistered? Personally, I do not like to rely on a company that is financially invested in me being uninformed for the truth. Registering a security ensures that the SEC, an independent government organization will ensure transparency by providing you with the necessary information to make good choices.

No Rest for Dead Presidents: My Dollars aren’t Lazy Bastards

What an awful headline. But I’m not feeling particularly creative today so it will have to do.


In an introductory investment post, I liken dollars to employees who must work to make my life better. Money has a significant advantage over us when it comes to working and earning potential. We get tired, we need sleep, our loved ones want our attention. Money has none of those conflicts so what reason is there for it to not be working tirelessly to free you from the rat race? In my case, my little dead presidents’ only duty is to slave away to improve my quality of life. Here are some of the ways I make sure they aren’t being lazy little bastards.

I structure my bank accounts deliberately: Some days I can’t even keep track of how many accounts I have. But the complexities of both life and banking regulations do not allow me to simply have a checking and a savings. While I have a checking account for my every day use, that is the lowest yielding account there is. I can’t keep all my money in a checking account. However, the highest yielding bank account is a CD (learn more about CD’s here and here) and there are penalties for early withdrawals. Since emergencies do not wait for CDs to mature, I also have a money market account which provides me with quick access to cash at a much higher rate than a checking but without the potential for a penalty.

I only use cash back credit cards: Your bank is making money off your use of the card, shouldn’t you do the same? My credit card gives me 1.5% cash back on everything I buy and on a monthly basis, the bank runs some specials at various merchants where I get an additional 5-15% cash back. For example, my tail lights went out a few weeks ago. We have both an Auto Zone and an Advanced Auto Parts in our area. However, our credit card company was running a 10% cash back special at Advanced Auto Parts. When it was time for my husband to replace the tail lights, I told him to make sure he went there. He spent $40 and we ended up getting $4.60 back (10% special + the 1.5% we would normally get). Of course, since there is no annual fee and we pay the balance in full every month to avoid interest, we are being paid to use our card.

I get educated: It’s hard to make or save money when you don’t know what benefits or features are available to you. I’ve discussed my solar adventures in the past. We got thousands of dollars in rebates courtesy of the U.S. Government for our investment in solar panels (if you pay taxes, thank you!). Although we would have eventually taken the plunge, we might have missed the opportunity for our big tax credit if we waited too long. There is no guarantee that the program will be available indefinitely or even beyond 2020. We also learned about the energy credits which we are on track to receive quarterly for 10 years. While they are small amounts, they will be offsetting nearly half of the cost of the system. So not only did we get a 30% subsidy, we are also selling some of the credits we produce over a period of time to offset the remaining 70% of the cost. That does not include our actual energy savings which have been pretty substantial (my March 2017 electric bill was $38. I live in a 3,100 square foot house in New England).

I pay debt aggressively: Debt is slavery. It’s crippling because it’s expensive. The best way to handle debt is to get rid of it as quickly as possible. My student loan interest is 5.16%. It makes no sense for me to carry that balance for 10 years (standard repayment) if it’s costing me as much as a moderate investment portfolio would cost. So when I graduated from an MBA program with a balance of $47k and change, I was determine to get rid of it by any means necessary. Two years later, my balance is  $11,600. I have saved myself thousands in interest and the amount that I did have to pay, I have able to deduct it from my taxes. So I have used the money I have in the bank and the money I earned working both my regular job and real estate to cut my balance and reduce my interest.

I keep cash to a minimum: ‘Minimum’ is relative.  It doesn’t mean I only have $1,500 in the bank. I keep a fat emergency fund which correlates with my low risk appetite. The more risk adverse you are, the more money you want available to weather unpleasant unforeseen events. For me that number is a year’s worth of living expenses. Before the recession, the recommended amount was 3 months. After 2008, financial experts were recommending 6 months. I like to be cautious, maybe overly so, thus, I choose 12 months. Anything above that number is invested in various types of projects (or debt payments) that are meant to increase cash flow (or cut my interest expense).

Think of the ways you can make your money work for you. Idle funds are being eaten away by inflation and are not doing anything to improve your bottom line and get you closer to financial freedom. This is the value equivalent of throwing your money away.

Knowing the Investment Products

Investing can be overwhelming. The key is knowing what is available and where to start. There are many investment products. I will list them below and provide a high level overview of some of their features and inherent risks.

Stocks Capital appreciation & Dividend payments Capital & Market expansion Growth potential Volatility
Bonds Steady income & Capital preservation Capital investments Predictable returns Interest Rate Risk
Certificates of Deposits Steady income & Insured balances Low cost access to liquidity No risk Low returns
Real Estate Investment Trust Investing in commercial real estate Access to capital Diversification & real estate income Lack of transparency

Most Common Investment Frauds


I discussed in a previous post that there are mechanisms in place to protect investors however, we should never under estimate the determination of a scammer. Their most recent successes show that they are innovating just as quickly as the laws are evolving to stay ahead of the regulators. One of the ways that you can protect yourself is by learning to recognize the features of a fraud  before it happens. Here I will discuss some of the most recent and successful schemes that have robbed Americans of billions.

PONZI SCHEME: The fraud is set up in a way that the existing investors’ “returns” are actually payments from the funds collected from new investors. The issue with a Ponzi scheme is that the investment managers do not actually invest the money so there is no return. The dividends being paid out rely on a continuous flow of new investors and eventually, they will run out of new investors, at which point the oldest investors will see their returns decline and the newer ones will never have a chance at getting their money back as the scam collapses.

Some red flags include guaranteed returns (there is no such thing), unlicensed investment managers (no regulatory oversight), inaccurate or inconsistent records (if it’s true the information should be correct and consistent every time).

PYRAMID SCHEMES: We’ve all seen the social media posts of Shakeology/Beach Body, Herbal Life, #shoppingannuity, etc. Before social media, those of us who were kids in the 90s remember our parents discussing Amway. They are old and the concept has not changed. The only thing that changed is the service or product they’re selling. Essentially, the participant offers a service or product, but the key to actually making money heavily relies on recruiting new members. Participation often requires steep membership fees or even low but regular dues that quickly add up in addition to being required to buy the product being offered. The primary emphasis is usually on recruiting as the products being sold tend to be available elsewhere for a more reasonable price, making it difficult to build a consistent client base with it. All pyramid schemes will collapse eventually and most investors except for those at the very top of the pyramid will lose their money.

Pyramid scheme red flags are aggressive recruiting efforts that border desperation (that’s where the real money is), confusing commission structure (why does everyone above you get a cut of what you earn?), no real revenue from product (as stated above).

PUMP AND DUMP SCHEMES: This one is near and dear to my heart. When I first started investing in the stock market at 22, I lost $5,000 in a pump and dump scheme after following the advice of someone I thought was a knowledgeable after he made some good profit on Citi stock. Usually the scammers will tell you they have info (pumping) on this hot new stock, often penny stocks (which is why some brokerage firms won’t let you invest in penny stocks if you don’t mean a minimum account balance). You and hundreds if not thousands of other people invest and the activity drives up the price of the stock. The fraudsters then decide when they get tired of the game or when they have run out of people to contact, they sell their share of the stock (dumping) making big profits right before the price collapses and everyone else who didn’t know better loses big time.

Some red flags you should watch for are stocks that no one else has heard of, stocks that you’ve only ever seen on social media or unsolicited email chains, stocks for companies where little to no financial information is available.

Remember that no one is immune fraud no matter how seasoned or inexperienced the investor is. The key is to stay vigilant and scrutinize every proposal.