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.
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!
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.