Reader Story: How She Became Wealthy

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I’ve been searching for a real life story of wealth for a long time, and I finally found one with Johannah B., one of our regular readers. This is someone that didn’t strike it rich in the lottery, or invent a simple contraption that made millions, but she is now living happy and well – all because of the basic financial principles outlined in her story below. I hope to read much more from Johannah in the future – she has had a fascinating life! And, just so you know, Johannah didn’t come up with the title, I did. She’s too humble to say anything of the sort. But, in today’s society, anybody that’s debt free is rich in my eyes.

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At first, I thought this article would be easy to write. I had written articles before and they were published in our local computer newspaper. However, I always wrote about work related topics. My life has so much in it to tell, that it’s going to be hard for me to sum it up in a few hundred words.

Today I run a computer service business which we started in 1985. All the money we have earned as income since then has been from this company. It has allowed us to live, raise two boys and save for over 25 years now. We have no debt either personally or corporately.

Here are the basic principles we used on our debt free living journey.

1.  We would avoid debt in every way. This doesn’t mean we wouldn’t use debt if we needed to for a mortgage or a car, but we would choose to pay it off as soon as we could.  For us this included:

  • Paying off our credit cards in full every month or not ever using them again
  • Putting my entire paycheck in the bank and always living on one salary
  • Saving for items we wanted/needed and paying cash for them instead of using credit
  • Starting this company without debt and keeping it debt free

2.  We would save. For us this didn’t mean there was a plan to save a certain number of dollars a month, or per paycheck, but we would always live beneath our means and save some of our current income for that eventual rainy day. Saving for us takes many forms.

  • We don’t pay list price. Somewhere there is an item as good for less, or the item you want with a discounted price tag. Think out of the box and it’s not only do-able, it’s throwing your money away if you don’t.
  • Shop sales and use coupons for groceries. We hardly buy anything that isn’t on sale; we use coupons, send in for the rebates, and plan our meals around these specials. It takes time, but it saves dollars.
  • Bank any income tax return or “surprise” money. You can always spend it later when you need or want something but can get it on sale.

3. We would learn and stretch ourselves to be self-sufficient. This means that if we didn’t know how to fix a pipe, install a new faucet, wall paper, fix a gutter, patch a wall, install a new light fixture, fix a clogged toilet, install tile, fix the lawnmower, or change our own oil, we would learn and then do it ourselves. We rarely have to call a repairman for any reason because we have the skills needed to figure out the problem and do the repairs on our own.

4. We would help others. This help takes many forms including donations of money, goods, food and skills and is almost never repaid in kind.  We don’t do it to be repaid.

I believe everyone can do these things. You have to be honest with yourself, be willing to make do with what you have, find alternative solutions and not let yourself be caught up with someone else’s thoughts and things. It’s not an easy road – till you start to reap the rewards. Not having any debt is freeing. And our house is one heck of a large asset should we need to sell it.

Economic times are currently hard, but we saved & invested during the good years. Our current salary is 75% less than what it was 4 years ago, but our investment income now bridges that gap. We still live frugally because it’s now a lifestyle but more importantly we live happily. Hopefully, ever after!

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

25 Comments

  1. That is a really great story. Your writing is very concise and it seems that there was a lot to your journey. The only thing I wish is that there were more details and that the post was longer, but as an anonymous blogger I understand if you do not want to give away too much personal information/etc. I really agree with your sentiment that the key is to helping others. It seems that in business, as in life, there is an element of karma to everything. My hopes for continued success for you, your business and your family!

  2. It is so inspiring to read your story when everyone now seems to be mired in debt! To be debt free both personally and professionally is amazing.

    I wonder how your boys have been affected watching their parents live this way. Are they now frugal too and responsible with money? What a great example you have set!
    Melissa recently posted..Keep Your Eyes on Everything &8211 A Guest Post

  3. To brokeprofessionals
    There is alot more to this story – and when I first started to write it, I found I had pages and pages. I need to get it to “blog” size to start to tell it. I hope Derek will enterain some additional posts which detail certain aspects of this post as well as delve into the HOW we did it, more deeply.

  4. Melissa
    Thank you ~ short answer ~ I have one of each. One is debt resistant 100% and the other doesn’t see the harm in it and is 100% in debt. Both however understand the journey we took and especially in this economy appreciate the results.

  5. Moneycone – absolutely. I do admit there are some days I wish I could let go and splurge. We’ve had some over the years for the company, my husband, sons, or family. Maybe that’s another story – how sometimes you can and do fit splurges into the plan.

  6. Crystal, I have some peace of mind, but I still worry about things. I don’t think I’d be human if I didn’t (smile).

  7. Love the story, fantastic job you did with your life! I totally believe in working hard and saving hard so you can splurge and have fun on the things that matter most to you. Very interesting to hear how your sons turned out quite differently!
    SavingMentor recently posted..Shopping Online Is Safe- Easy- And Saves Money

  8. SavingMentor, isn’t that just strange how that works out. You just never know, each child is so unique, and you just have to love them for who they are!

  9. Great motivational and inspirational story. It all requires determination and discipline. Being out of debt and staying that way is not easy. I have huge respect for people who can manage it.

  10. Fat Guy — well you are 1/2 way there! Now just get that personal stuff worked on, and before you know it you will be debt free too.

  11. Aloysa, you are right you need determination and discipline. Once you get started on this road the “lure” of things isn’t as overwhelming because you start to evaluate everything differently.

  12. What a great, inspiring story!

    I love that you can live on 75% of what your old income was due to investment income. We are just starting our investment journey (paid off our non-mortgage debts last year, so now we want to invest with the extra money; we’ve been paying into IRAs for years though).
    Amanda L Grossman recently posted..Frugal Confessions – Frugal Living

  13. Inspirational post! You are living the dream.

  14. Thank you Derek for asking me to write — Thank you for all your comments! Sincerely appreciate all of them!

    Amanda – You are so right, it is wonderful not to have to worry. But to get to the 75% point we cut our income slowly and adjusted along the way ~ for example we now carpool – that saves $200 a month in gasoline costs, in addition to wear and tear/tires and other factors.

    And Mark, thanks I am glad it was inspiring!

    • You’re welcome Johannah! I loved that you wrote this piece, and I would love to have you back as well. I think your life story will be a hit – from beginning ’til now. We all have an idea of what our plans are for the future, but you’ve actually done it! It really is inspiring. We’d love to hear about your challenges, your thoughts, and of course, your successes! Thanks again for writing.

  15. My tip would have to be responsible on how you spend your money and don’t go way over budget. It’s just a matter of discipline and not think about your wants “NOW”. Johannah was responsible enough to think about the future and what spending like crazy can do to you. She is definitely rich because she’s debt free! Even big celebrities who earn twice or more than any of us here combined in a month still have debt. That’s why when they go bankrupt, they’ve got loads and loads of bills to pay and by that time, they won’t be able to pay for them anymore.

    Debt Counseling Iowa

  16. Johanna, you are so right about doing your own repairs. It’s not a tip I see very often, but I know it’s saved us many thousands over the 15 years we’ve been in our house. We’re still working on saving, but we’re vastly improved over where we were just a few years ago.

  17. What a wonderful story. Unfortunately, so many people don’t choose to live “beneath their means” and it is the only way to save a substantial amount. We have always done it so it seems natural but we watch young people today spend what they do not have…

  18. I read your article a couple of time so I could be sure I took in all the points. I’m in agreement with you on a lot of this content.


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