Money is on my mind. That’s probably because it’s the end of the month and I’m not a millionaire. Actually, when I was a millionaire, money was on my mind at the end of the month, but the thoughts were significantly different. There was a bit of anxiety in both situations, but one is understandably more pronounced. In both cases though, the anxieties came from unknowns. Will there ever be enough? Will it all suddenly disappear? What if? What if?
Around the time of the Internet bubble and again a few years later, while married, I spent some time as one half of a millionaire household. It wasn’t a dynamic achievement. It wasn’t the result of singular luck. As I describe in my book, Dream. Invest. Live. (now available on kindle!), our net worth accomplishment was the result of good jobs, a comfortable and frugal lifestyle, and a diversified stock portfolio. Want more details? Read the book. The main story though is that a lot of tired advice is unfashionable but correct. Spend less than you make. Invest the rest. Go ask someone who lived through the Great Depression.
We didn’t have a million dollar bills sitting in a vault. Most millionaires get there by adding up various pots of money and other assets: stocks, businesses, real estate, etc. They add up to over a million on paper, but it can be hard to believe they are real. There are too many ways that each can vanish. Each valuation is a guess, and their sum is a sum of guesses. Each could be worth more, and maybe eventually worth much more, but each can also lose value and they could lose their value together. We’ve just witnessed the Dismal Decade when bubbles popped in the stock and real estate markets and when businesses were worth less because the economy wasn’t healthy.
Staring at a seven digit TOTAL on a spreadsheet is not the same as being ready to pay bills from a stuffed checking account. The bills drain from a smaller reservoir and their impact is therefore larger. Despite that, the optimist also can look at the potential growth in the other assets. As long as the assets’ worth grows faster than the expenses, the total increases. Nice – if you can count on it. An awareness of wealth brings an awareness of economic frailty. When you’ve got it, you realize you can lose it.
Regardless of wealth, life has other circumstances, situations and consequences. Divorces happen, and no, the details of that story aren’t in the book, but it wasn’t soap opera material or dramatic events. In my case amidst national economic turmoil, enough for two divided by two, was not enough for one. Stock market bubbles pop. Real estate fluctuates. Specialized careers, like commercial aerospace engineering, aren’t worth much outside the corporate cubicles. Anxiety ensued. Optimism did too.
Median household annual income in America is about $31,000. Should I get such a job? I consider that question, especially during the numerous downturn months we’ve recently experienced. Obviously, many maintain households on that amount, and that amount would greatly ease my situation, especially because I have a moderate stock portfolio and a reasonable house and mortgage. At the same time though, that moderate stock portfolio has managed much larger swings within minutes as stellar news has hit individual stocks. One or two such good days per year, with the rest averaging to zero, and I’d be better without the stress and cost of time spent at a job. I’m an investor. I’m an optimist. Of course I think I can have more than enough such good days every year.
Nothing is certain, neither jobs nor stocks. My stocks and my real estate currently total to a much smaller number than they did when I bought this house. As long as they last, jobs bring paychecks and benefits for the cost of time. Jobs can also be major sources of stress or satisfaction, depending on the job.
I invest in companies that I believe will succeed. Most of the companies represented in my stock portfolio are doing well. One or two (hello MVIS) don’t appear to be doing well, but have enormous potential. Two companies, American Superconductor and Dendreon, are progressing as I expected, but their stocks, AMSC and DNDN, are worth much less than I think is reasonable. Maybe I am wrong. Maybe the market is wrong.
If I am significantly wrong, then sometime in the next few years I’ll have to get a job, as long as I don’t mind draining my IRA later this year. If I am right, even without extra optimism, then my worries will look silly in retrospect and my time will be better spent the way I am spending it now: as an artist, entrepreneur, volunteer, social innovator, relaxed human being living long and prosperously. Some of the most optimistic scenarios put me back into that seven digit realm, though its return would be tempered by experience.
My answer has been to follow my intuition. It’s a path that is not obvious, but that has led me to community and insights unavailable elsewhere. This path has produced art via my books and photos. I’ve enjoyed public speaking and teaching. (Don’t forget tonight’s class.) Entrepreneurship and social innovation are fascinating open-ended avenues to travel. All of these trails lead to various satisfactions. Any of these trails could lead to income (those books and photos are on sale now!), which wraps back into thoughts about jobs and careers.
Investor, employee, or bohemian; which should I be? I suspect that eventually it will look like I am all three.
So here I sit, waiting for money from a recent stock trade within a dwindling portfolio. After the money shows up in my checking account, I’ll pay a pallet of bills. If you thought I lived this life without worry or concern, you obviously weren’t thinking about this as much as me.
By the way, as I typed this, DNDN is up about a dollar. Multiply by a few thousand shares and many bills could be paid from one day’s action. Ah, but what about tomorrow?