This week’s Money Master is Dominic of Gen Y Finance Guy. Dominic recently featured us on his website. He gave us a list of great fun questions, the answers to which you can read here.
Dominic is making a great impact in the personal finance blogesphere and his story is great. See below what you can learn from Dominic and his story.
Lastly, click here to be a Money Master. We’re always seeking new personal finance bloggers or industry experts to help our followers be debt free, have fun and be money conscious.
1. What’s your story?
I grew up in a really poor family and neighborhood. Most of the families in my neighborhood lived on welfare and some sort of subsidized housing like section 8. For those that are not familiar, section 8 is a government program that subsidizes rent for low income families. My three brothers and I slept on the floor of our grandmothers 2 bedroom apartment. Our mother shared a room with my grandmother and my uncle lived in the other bedroom.
That’s right; there were 7 of us in a 2 bedroom 1 bathroom apartment. Without my grandmother, we likely would have been living on the streets. There was actually a period of time that we lived in a homeless shelter.
My mother has suffered from both alcohol and drug abuse the majority of her adult life. I can’t remember a time that she ever held down a job for longer than a few months. As you could imagine, she didn’t make much of a role model growing up. My father was even worse. He is a drug addict and has been a frequent guest in the state penitentiary system for the manufacturing methamphetamine.
He has spent at least 10 years of his life behind bars and now finds himself in his mid-fifty’s with nothing to show for the past half century on this earth. I am not confident he has learned his lesson, but in all honesty it’s not my problem.
I was really lucky to have met a very altruistic man that took me in under his wing when I was in the 6th grade. His name was Dan and he owned a pizza place. He would allow me to come in to the pizza place to fold boxes in exchange for free pizza and soda. He is way too modest to admit this, but he started a homework club for me, that was of course open to other middle school students as well.
Before I met Dan I was earning a 1.33 GPA. Part of the deal for hanging out at the pizza place so much was that I had to bring him a weekly progress report of my grades. I turned my act around and became a 4.0 student, all because someone cared and held me accountable.
It’s a longer story but eventually I moved in with Dan and his family for a year. My brothers had gone to live with our father during my time with Dan and his family. After a year I went to visit my brothers and dad for a week during the summer right before starting 8th grade. When I returned back from my visit, I told Dan and his wife Sonya that I wanted to go live with my brothers.
This was heart breaking to them and was something they feared might happen by letting me go visit. Before they agreed to let me move they got in contact with my grandfather to make sure he would be there in the high probability event that my father would screw up and end up back in prison.
My grandfather was a great man and agreed to be there if anything happened. I moved to Southern California with my dad and brothers in August of 1999. In another disappointment, my father was picked up within a short 3 months of my arrival (actually the day before my birthday). My brothers and I ended up moving in with my grandparents in October of 1999.
I was really lucky again. My grandfather was the best man I ever knew. He served our country for 30 years in the Marine Corps, where he retired a Major. During his time he served 5.5 years as a POW during the Vietnam War. He came back and started a publishing company and then moved on to build a thriving business in the insurance industry. Between Dan and my grandfather I learned a ton about the type of man I wanted to be.
I lived with my grandparents through high school and then moved away to attend college. At this point I knew that I was going to do whatever it took to be financially secure. So naturally I got my degree in Finance, fitting right? It was also during college that I started investing and trading stocks.
My first job out of college was with an oil company where I spent 3.5 years as a financial analyst before spending another 2.5 years on the trade desk. As the head trader I ran a million dollar options portfolio for profit, where I managed an active income producing strategy. I also ran all the hedging activity for a multi-billion dollar operation and traded west coast products via EFP’s (exchange for physical).
Unfortunately the company had to shut down the trading operation as tensions heated up in the Middle East and the company was no longer comfortable with taking risk in the market, mostly due to the lack of domain knowledge of exactly what I did to make money trading options. They also had a bad taste in their mouth from when oil shot up to $150/bbl and the company found itself upside down on a very large short position. The short story is the previous trader took on a position that was far greater than the companies risk policy allowed.
It was fun while it lasted. I eventually moved on to a new company back into finance, where I continued to manage and trade my own money. At the end of 2013 I started to get the entrepreneurial itch and by January of 2014 I had started a consulting business in the digital analytics and marketing space. I leveraged this opportunity to learn as much as I could about online business so that I could start a platform of my own.
Then on September 25th, 2014 Gen Y Finance Guy was born. I finally found the confidence to pull the trigger and start my blog.
I launched it with a big hairy audacious goal that I announced to the world. That goal is building a net worth of $10M in 20 years by the time I am 48 years old. My mission is to Humanize Finance, Build Wealth, and Reach Financial Freedom.
Oh and I created a plan to pay off my $350K mortgage in 7 years, before my wife and I turn 35. The mortgage on our house and our investment condo are the only debts we have.
Well that’s at least the version of the story that is relevant for this series. And of course the story is still a work in progress…
2. What’s your point of view, as a personal finance blogger?
I think there isn’t enough transparency online. One of the things I decided early on was that I would provide full transparency of my finances and that I would put my money where my mouth is. Most people are scared to show everyone how the sausage is made. I share my net worth and detailed monthly financial reports, where I hold nothing back. I share everything: net worth, income, expenses, investments, and liabilities.
Don’t get me wrong, there are a lot of other good bloggers who don’t share their details. Or they only show a slice of their financial life and that is great. But I believe that people need the total picture for context. It makes it easier for them to relate to and apply to their own financial situation. I think that sharing my story with absolute transparency is the best way to Humanize Finance.
There are many roads to Rome as they say. Because of this I try not to tell people what to do, instead I share what and why I am making certain decisions. There is no holy grail. At the end of the day each individual has to pick what works for them. Think of the Personal Finance space as an all you can eat buffet, where you can pick and choose what you put on your plate. Remember that you can go back as many times as you need to, so don’t worry about getting everything on your first trip around the food stations.
Many who read my blog will tell you pretty quickly that I am not a part of the massive frugality movement. I try not to waste money on things that don’t bring joy, but we are pretty spendy compared to a lot of other bloggers out there. However, we are high earners and still save a respectable amount of our money. Where most tend to be more expensed focused, I tend to focus more on the income side of the equation.
The universal financial truth is that there is a floor on how low you can cut your expenses, yet no ceiling in how much income you can earn. For me earning more money is way more fun than cutting expenses. I would rather find new ways to earn to pay for the diners out and the Starbucks coffees. We also enjoy a house keeper, which is kind of a cardinal sin in the frugal community, where most are pretty focused on being self-sufficient and following the DIY philosophy.
Along the lines of increasing income, I think that everyone should have a side hustle. The internet has made this super easy to do, where the only barrier to entry is a smart phone and a laptop computer. Stop making excuses and start taking action.
When it comes to investments I think you should diversify across asset classes. You will likely have a preferred asset class. For me its stocks and options and for others it’s Real Estate. I think that self-directed is the way to go.
Investing is not nearly as complicated as the financial media and financial services industry makes it out to be. Remember that they have an agenda to make money via the advice they give (sell) you. Take the time to learn how to manage your own money and think for yourself. Mutual funds are a joke (not all, but most), the fees are outrageous and 80% of the fund managers underperform the market. If you have the option, opt for ETF’s.
The biggest beef I have with mutual funds is the fact that they make money regardless of whether they make money for you.
Every story starts and ends with money, so you might as well get good at managing your own. Money doesn’t have to be a taboo. Everyone has a baseline, so take inventory of yours and then start taking steps to improve your financial situation from that baseline.
3. In one sentence, what’s one piece of sage advice from your personal finance background that
you’d like to share with our readers?
It’s really hard to boil it down to just one piece of advice so I will provide a few:
A. Risk is a function of education, educate yourself.
B. Manage risk at order entry.
C. Remember that time is the ultimate currency, and money is just a tool to control more of your time.
D. Reject herd mentality.
E. If it sounds too good to be true, RUN the other way!
F. Buy into weakness.
G. Sell into strength.
H. Max out your pre-tax accounts.
I. Spend less than you make and invest the difference.
J. Be contrarian.
K. Maintain an abundant mindset.
L. Stay optimistic.
M. Be the change you want to see.
N. Never stop learning.
O. Stay open minded.
P. Have fun.
I will leave you with a quote:
“If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much.” – Jim Rohn