Is Scooby Rich?
Great question and I will answer it shortly but first, what do you mean by “rich”? In my book, “rich” is as ambiguous a financial term as “toned” is a fitness term. Is toned lean? Is toned strong? Is toned a little lean and a little strong? I hate the word because you can never tell when you are “toned” because it means a thousand different things to a thousand different people. Same with “rich”. “Rich” means something completely different to a 18 year old than it does to a 55 year old retiree like myself. Does rich mean making a lot of money? Does rich mean having a lot of expensive things? No and No. If you think that is what rich means then you will never ever be rich. That materialistic definition of rich is what makes people POOR! More on that next month in my article, how to get rich.
My definition of rich means you get to do the things you love doing every day and by that definition I am very rich. I love working with my hands in my shop. I love working out and doing outdoor sports. I love writing software tools for my website. I love helping others to become passionate about fitness. I love cameras and making videos. I love flying and building airplanes. Every day I get to do things I passionately love doing so I am RICH! Being rich doesnt take money. When I was biking across Burma this year, I saw people making less that $3/hour who were incredibly rich. They would fish in the morning with their friends on the beautiful Bay of Bengal, then go home and socialize with their family and friends on the porch of their bamboo huts overlooking the bright crystal blue water. THAT is rich. Every year I travel in very remote, poor places in Asia and I can tell you for certain from my travels that money does not buy happiness nor does it make you rich. These people have nothing but are infinitely richer than Americans who have 80″ TVs, the fastest cars, but no time to enjoy them because of the stressful, horrible jobs that kill them on the corporate treadmill. Money and things do not make you rich.
Having all your daily activities in alignment with your passions, goals, and values makes you rich.
I have never mentioned this before but I am retired and have been for over 10 years. I “work” because I love to, not because I have to. I was retired before I started my fitness website and fitness videos. Thats why I had time to do my fitness website and videos, because I was retired. Thats why my website was free rather than bundling my website information into a bunch of expensive eBooks as Elliot Hulse and Sixpackshortcuts have done. For them, bodybuilding is a business, for me, its a passion. My only goal was to give back to the sport that so completely changed my life by giving me confidence and improving my self-esteem. I wanted to make it so that everyone, regardless of how poor, could become fit and healthy which is why I have always focused on home workouts with minimal used equipment rather than gym workouts.
I don’t tell people that I am retired because so many people get the wrong impression. People often get *really* jealous when they hear that someone is retired these days because so few can afford it. Retirement seems to be a relic of America’s Golden Era which I consider to be the post WWII booming 50’s. Now-days, it seems that government employees are about the only ones who can ‘retire’ because they actually get a livable pension but the rest of the population pretty much have to work till they drop. Everyone knows someone who worked for 25 years at a company promising a generous pension then the company declares bankruptcy – there goes pension and they become a greeter at Walmart :( I hate the image that “retired” conjures up in most peoples mind. They think of old men hobbling to the park with a cane to play checkers and feed the pigeons. I have been retired for 10 years but work just as many hours now as I did before I retired. The difference is that now my work is my passion and I don’t have to decide what to do based on how much I can make per hour, in fact, most of my work doesn’t make any money – I don’t care, I’m retired!
Am I rich? Let me say this. Every financial planner in the country would have cringed if they knew how little I had in the bank when I retired. The way I figure it, even with health insurance, a health disaster can wipe out a few million dollars so to be totally secure in retirement would require far more than I could possibly save. Scratch that, I’ll just make sure I am insured and take my chances. Most financial planners have this wacky conservative model of massive amounts of money to retire, not me. Its all about keeping a small financial footprint, the lower your monthly expenditures, the easier it is to retire. The way I look at it too, I am STILL working – a lot. I am not looking for it but there is a chance that some of the things I am doing in retirement will end up making money. I follow my passions and if money follows, thats cool, if not, I dont care because I love what I am doing. Scoobysworkshop.com is a great example of that, I never in a million years thought it would end up making money – as I mentioned before, thats not why I was doing it. Its a great example though of how following your passion can lead to money in unexpected ways. I only started using YouTube to host my fitness videos because the bandwidth charges for self hosting the videos on my free fitness website were too expensive. After a few months, YouTube offered to make me a “partner”. I had no idea what that meant but, what the heck I signed up. Ok, looking back on this its really funny but when I got my first check from YouTube I didn’t cash it because I was sure it was a mistake. Then the next month, I got another, and another and another. After six months of these checks piling up, I did some research and was shocked to find out that THEY were paying ME rather than the other way around!
OK, so from the above you see that I am “rich” by my definition because every day I wake up excited to jump out of bed and do the thousand things that I am passionately want to accomplish. The only disappointment every day is that I can only work on each of them for a few hours so I can make time for them all.
Does Scooby make a lot of money?
A common misconception is that making a lot of money makes you rich. If you look at the bankruptcy rate of those making over $250,000 a year you will suddenly see that making a lot of money is NO guarantee of financial success nor of being rich by my definition. Every month the tabloids seem to report on another Hollywood star having to auction off their things to pay off creditors. Let me tell you the most amazingly simple thing and if you remember this one simple thing you will become rich:
Its not how much you make, its how much you save.
Before I retired, I never made over $90,000/year in any tax year. I am an engineer, we are paid well but not extravagantly – certainly not before the dot com boom when I was an engineer. $90,000 may seem like a lot of money to you but the cost of living near these high paying engineering jobs is sky high. A tiny 1,100 square foot two bedroom house on a postage stamp lot rents for well over $5,000 a month. I never made money on stock options. I had an uncanny ability to pick the wrong stocks and get into and out of the stock market at the perfectly wrong time. Doesn’t matter, I always saved. I saved probably 20-30% of my before tax salary by keeping expenditures very low. Eating out only once a month, making my lunches every day, having three roommates, taking very cheap backpacking vacations, buying used econo-cars and driving them into the ground, etc. As my retirement account consistently languished in the stock market, I put my own savings into real estate. With the money I saved, I built two houses while I was working as an engineer that are now rental properties. That rental income is what allowed me to retire because I don’t get diddly squat from my former employers. Keeping a small economic footprint helps you in two ways. First it lowers your expenses so you can save more. Second it makes it so you can live longer on the money you have saved should the need arise.
Money is time
Its VERY true, money is time, so decide which is more important to you because you cant have both. Most people in America seem to decide that money is more important so they can buy lots of things … that the have no time to use or enjoy! Sounds stupid to me. Every month when you save money, it sometimes helps to think of that as TIME rather than money. Next month in my “how to get rich” you will see that my advice is to work on your passion a few hours a day while the 9-5 job pays your bills. Even doing this, there will likely come a time when you cant keep one foot on each side of the line and you have to jump completely into your new career. That money you have saved up is time. Its time to help you get your new career established without having the pressure of not knowing where the rent money will come from. Money in the bank is freedom. Its the freedom to take the risk moving to a better, higher paying job that might not work out. Its the freedom to start your own company. Its freedom to put all your belongings in storage and travel the world for a year and find a new home. Debt is a ball and chain to poverty, a savings account is a passport to becoming rich … by my definition of rich anyway :)
Lets look at a concrete example of how money is time. You have a 2011 Honda Fit and the lease is now up. It works fine but it needs new brakes and a 60,000 service which will cost $800 so you figure you will just buy that hot new Ford Mustang GT Convertible which you have had your eye on for years. With the options you want, tax and license, its 65k out the door and with 20% down its ‘only’ $817/month. Not only did you have to take 13k out of savings to buy the car but now you have added $817/mo to your financial burden – plus your car insurance doubled. Before the Mustang you had $50,000 in savings and expenses of $4000/month – a 12 month runway. Now you have $37,000 in savings and expenses of $5300 a month – your runway is now only 7 months. Money is time. What did that awesome Mustang cost? 5 months of your life! 5 months you could have used to quit your job and travel the world. 5 months you could have started your music company.
I know I have gone on and on about this but its to make an important point. Even if you dont make much money, its important to save. Savings accounts are freedom. Low monthly expenses are freedom. Consumer debt is modern slavery. Delayed financial gratification leads to being “rich”.
Does Scooby have a lot of expensive things?
Again, it depends on what you mean – what do you consider expensive and what do you consider a lot? My thriftiness would make even the best Dutchman or Jew proud. Being thrifty does *not* mean buying inexpensive junk that quickly breaks and has to be thrown out. Thrifty sometimes means saving for years so that you can buy something more expensive that will last a lifetime. The best bargain is almost never the cheapest item available nor the most expensive – that goes for bikes, cars, cameras, and pretty much everything else I can think of. The value sweetspot is usually in the upper middle of the range. Walmart is full of what I call “direct to landfill” products. Really inexpensive but so poorly made that it will end up in a dump somewhere within a year. Inexpensive, yes, but certainly not a value when you consider dollars per day. What I am saying is that its not the price tag on an item that determines if its a luxury purchase or not, you have to look at how long it will last and how much it will cost per day. My favorite bicycle is a titanium Zepplin (no longer made). I bought it 25 years ago for $1800 and that was a LOT of money then but I still use that awesome bike to this day and its still my favorite bike to use for my triathlons. Is it an expensive bike? Well, when you consider that its only cost me 19 cents per day it doesnt look nearly as expensive as the folks who bought the $300 Walmart bike that broke after 1 year and now permanently collects dust in their garage.
Yes, my husband and I have a nice house and in addition, I have two other houses that I built myself. They are not Swiss chalets sitting there empty waiting for me to saunter in after Apre Ski to sip Champagne, they are rental properties that I actively manage to get my retirement income. Yes, I have two airplanes but one is an investment and is on lease back at a club which means I have to pay the same rate as everyone else to fly it. The other airplane is one that I have built myself. I consider that airplane to be education and any investment in yourself is a great investment. When I am done at Scoobysworkshop I plan on starting an aviation related company and using the knowledge I have gained building the airplane as a springboard for it. I could have gone $80,000 in debt taking classes at an A&P school or place like Embry Riddle but I love the self taught method – more on this next month. So three houses and two airplanes, but I don’t consider those luxury items – they are investment vehicles which let me do the thing I love most which is to build things. I also have a lot of expensive tools of all sorts. Of the mechanical variety I have welders, machine tools, planers, and saws of every variety. I have one of the most powerful home computers available. I have several very high end cameras including a Canon 5D mark III with a whole box of EF lenses. The thing is, these are all for “work”. My next career will most likely involve aircraft, very high end cameras, and some incredible software and all these tools are part of that. As I said, investing in yourself is always the best investment.
Yes, I travel a lot. For the most part though, my travel is pretty rugged and inexpensive. In my bike treks in Asia, we almost always end up in huts without electricity nor water for quite a few of the days. I don’t need five star, in fact, I prefer zero star because thats when you see the countryside and really meet the people. Again, I consider travel to be an investment in myself. Most Americans have never left the country which often makes them nationalistic with an irrational superiority complex. Traveling opens your eyes. Some of my best and most creative ideas have been hatched while overseas. Ask and expert on creativity and they will tell you that changing the environment is a sure fire way to spark creativity. With travel, like anything else, you have to be a smart shopper! Use one of the last minute bargain places like travelzoo.com to get vacations with amazing discounts.
The two purchases I have made in my life that are pure luxury are our diamond wedding rings and my Porsche Boxter S. I admit those are luxuries. At a certain point in my life I realized that I was financially independent because my expenses were so low and that buying a few luxury items would not affect my retirement.
So what the heck is all this about??? Who cares about Scooby and whether he is rich or not? These days, the subject of money and wealth is kind of tabu. It seems that the role models that the world presents are always horrible, materialistic, obnoxious ones – not to mention any YouTube fitness trainers :) I hope that in my frank, admittedly rambling, personal discussion of money has helped to change your view of money and what it means to be “rich”. I am not telling you all this stuff to impress you, in fact, I would have rather kept this private but I was doxed so I might as well use it as a teaching moment. When strangers meet me at social occasions, they can talk to me all night and just think I am an average geeky 9-5 engineer who likes building things and playing beach volleyball. I like talking about things I am passionate about – money and wealth do not interest me. Fitness interests me. Machining interests me. Woodworking interests me. Photography interest me. Triathlons interest me. I hate it when you meet people for the first time and in the first two minutes they tell you how much money they make and all the fabulous things they own. Gotta feel sorry for people this insecure. I try *really* hard not to roll my eyes then excuse myself telling them I am late for my appointment for ocular acupuncture. I feel no need to impress, in fact, I get rather uncomfortable when the subject of money comes up. The reason I am telling you all this stuff about my life is to help YOU become rich. Next month, I build upon this and show you how to do what you love .. and get paid for it! In other words, how to get RICH!