Life or Debt: A One-Week Plan for Financial Freedom

This chapter is about me and my life. It’s not necessary for you to know anything about me at all for this plan to work for you, so if you feel like skipping this part of the book, feel free. But I think it may make sense for you to know the person you’re getting advice from, so here’s the abbreviated version of how I came to be writing Life or Debt.

Ever notice how practically all self-help or motivational books start out with the author revealing some sort of catharsis that suddenly caused them to see the light? You know, stuff like “There I was, forty-five years old, living on the street and eating from a Dumpster, when suddenly inspiration struck like a divine lightning bolt! All I had to do was follow the seven magic steps and I’d become rich beyond my wildest expectations. And sure enough, it’s happened! Now I have a mansion in Malibu, my own helicopter, and I party at the Playboy mansion.” What the author often leaves out, of course, is how much of that newfound wealth comes from following the seven magic steps and how much comes from selling books and videotapes on infomercials and home shopping channels.

Here’s the first of many embarrassing admissions I’ll make: While I have made my share of stupid mistakes, I’ve never been poor, gone bankrupt, or had a sudden revelation that laid the “true path” to fame and fortune at my feet. Nor am I rich now, at least not in the “beachhouse in Malibu” sense. And while I hope that I make money from this book (and get invited to the Playboy mansion, for that matter), it’s not really that big a deal to me one way or the other. Why? Because my life is fine exactly the way it is. I’m doing precisely what I want to do, and what I make doing it is fine by me.

But that isn’t how my life has always been. As you’ll soon discover, there was a time—and not so long ago—that I forgot who I was and what I wanted out of life.

Here’s how I came to be your humble narrator:

In 1973 I was seventeen years old. For those of you who weren’t alive and/or aware at that time, trust me, it was an interesting time to be in America. By 1973, the hippie message of love, peace, and togetherness may have been fading, but you couldn’t tell it by talking to me. Another aspect of the love generation that I could especially relate to was the wholesale rejection of all things material. The idea of sharing with your brothers and sisters (that is, everyone younger than thirty) and thereby avoiding the traps that lurked in money, property, and politics seemed both reasonable and realistic. But I wanted to try it for myself. So promptly after graduating from high school, I left my middle-class home in Atlanta and hitchhiked across the country. My goal was to forget how my parents and society had taught me to view the world and instead to live life the way it was meant to be lived: with no obligations and plenty of adventure.

And this wasn’t a summer vacation we’re talking about here. This was going to be my life. So for several months, that’s what I did. I experienced the ultimate in freedom. I went where I wanted, did what I wanted, and stayed as long as I wanted. For most of that time, I didn’t have two nickels to rub together. I survived mostly by doing day labor, stuff like furniture delivery or unloading boxcars. Always something different, which was cool because I got to learn how to do lots of things and had the opportunity to meet lots of people. Then, when I’d satisfied my curiosity and earned enough to meet my meager needs, I moved on. My ultimate goal was to reach the Mecca of my generation: San Francisco and Haight-Ashbury. That was the capital of this brave new nation, where society was being reinvented, where free love and flower power were going to replace greed and war. When I pictured my future, I saw myself pitching in at a commune or homesteading in Alaska. Naive? Of course, but hey, this is my story. So stop laughing and listen.

You can probably guess what happened during the course of my personal path to spiritual enlightenment. It didn’t take long to figure out that the love and peace movement was either nonexistent or at least so far underground that I couldn’t dig it up. What I did find a lot of, however, were deviants, con artists, and common crooks. That’s not to say I never found genuine, kind, caring people. I did. But by the time I reached San Francisco, I understood that flower power was an idea whose time had either come and gone or had existed more in song than in real, day-to-day life. I also had firsthand experience that many of the people living on the streets weren’t poets and adventurers who had rejected the possession-obsession society; they were people who were rejected by that society and had no place else to go. So while I valued my experiences, I realized that this was not the life I wanted to lead.

After I returned to Atlanta, my life soon began to resemble those of my more traditional contemporaries. I went away to college. And since the freedom of the road hadn’t lived up to my lofty expectations, I thought I’d try a more old-fashioned way of finding freedom: making tons of money! My dreams of homesteading in Alaska were gradually replaced with visions of yachts, mansions, and Penthouse Pets. Seem like a major about-face? I guess it was. But considering my newfound cynicism about the hippie movement, and taking into account that virtually every mass-media, peer, and parental message I ever received was all about acquiring money, my transformation was both simple and rapid.

I started college intending to major in philosophy, but by my junior year I decided that accounting would take me where I wanted to go a lot faster. In retrospect, I believe the reason I chose that particular degree went back to a casual dinner conversation I’d had with my father years before. I must have been about twelve or thirteen years old. While talking about one of his old friends who was a CPA, he had casually mentioned that CPAs were never out of work and always made a good living. So there you have it! Security, money, and parental approval all rolled into one. In any case, I graduated in 1977 with a degree in accounting, cut my hair, and took a job with the state of Arizona as an auditor.

Unfortunately, there was an integral part of accounting that my dad had forgotten to mention to me at that dinner years before: An accountant has to go to work and actually do accounting for eight hours a day, five days a week. While some people may find this an exciting and rewarding way to occupy their working lives, for me it was like watching paint dry, only slower. Still, another thing my dad had taught me was that work wasn’t supposed to be fun (“That’s why they call it work!”). So I did it for a few years, picking up my CPA certificate along the way and trying to ignore the narcolepsy that had become a prominent feature of my working life.

By 1981, I came to the conclusion that I’d rather chop off my own foot with a dull ax than be an accountant for a minute longer. In other words, my fear of being out of work had finally been outweighed by the despair I was enduring in my chosen profession. Besides, I had another idea that would forward my ambitions to obscene wealth a lot faster. In the office building where I worked, there was a big E. F. Hutton office. And it looked really cool—a giant open space filled with desks and people and a stock ticker dancing across the front of the room. There was even a place for spectators! Can you imagine an office job so interesting that people actually stopped to watch? You could practically feel the excitement just walking by the place. Bye-bye, crummy salary! Bye-bye, narcolepsy! And it went without saying that these guys would hire me. After all, investing in stocks was all about analyzing companies, and who could do that better than a CPA?

I’ll never forget my first interview with the manager of E. F. Hutton. He peered at my completed application as though it included a lengthy prison record. This was confusing. After all, I was a CPA—a master of numbers and financial analysis! But when I finally found the courage to verbalize the obvious, his exact words were, “I’d much rather have a used-car salesman sitting across the desk from me right now than a CPA.” I was stunned. Potentially doomed by an alarming lack of sales experience!

Fortunately, the news wasn’t all bad. Because despite the embarrassingly inappropriate education and professional credentials I was saddled with, I was able to convince my tormentor that I did possess the one personality trait necessary to the success of any stockbroker: I was desperately greedy! He told me that after a few years of hard work (which, as he explained, actually entailed doing nothing more than using the telephone to mercilessly harass sixty or seventy innocent people every day), I could expect to make $50,000 a year, maybe more. And that was just about all the money in the world to me, since I was making only $18,000 at the time. I told him that there was nothing, short of murder, that I wouldn’t do to make $50,000. And despite the fact that I had drawn the line at capital crime (probably a mistake in retrospect), he decided that I at least warranted a test to see if I could actually sell. I passed and was subsequently hired, trained, and licensed in stocks, mutual funds, commodities, and life insurance.

In many ways, being a stockbroker was exactly what I had hoped. It was exciting, especially compared with auditing school districts. And my manager hadn’t been exaggerating about the money, either, probably because I had stumbled into the stock brokerage business with nearly perfect timing. When I started my career in 1981, the Dow Jones Industrial Average was around 800 and interest rates on risk-free money market accounts were around 15 percent, so pretty much nobody wanted to invest in stocks. But in 1982, rates started to plummet and the stock market began what turned out to be one of the greatest bull markets of the century. This rising tide floated all ships, including mine. Less than three years after being hired, I was indeed making $50,000 a year. As I closed in on my thirtieth birthday, I was working ninety hours a week, and my income had grown to more than $100,000 a year. Not exactly rich, but I was certainly a success, especially when I compared myself to my parents and the friends I’d grown up with. Like many people who find themselves making big money, I honestly believed that I deserved it. After all, I was making a lot of money for my clients, wasn’t I? And I was certainly making a lot of money for my employer. Therefore I must be smart, and therefore deserving, right?

So since my hitchhiking days of all freedom and no money, the pendulum had swung to the other extreme. The 1960s are known historically as the “love generation,” and the 1980s are often called the “greed generation.” For me, at least, both labels fit like a glove. The altruism and idealism of the 1960s became distant memories as the 1980s marched on and my income continued to rise.