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This week we have: Jon from Compounding Pennies!
Jon helps people improve their finances one day at a time at his blog Compounding Pennies. There he writes about his struggles and successes with money. By making small changes every day, you will see a massive change over time.
Take it away, Jon!
When I first read the Wins & Losses series, it made me start thinking about my life and the successes and struggles I’ve faced
It was easy to come up with a list of these things, but digging in deeper to understand the lessons learned was where the real benefit came from.
I am a firm believer that we need to learn from our experiences, both positive and negative if we want to be the best version of ourselves possible. Sadly, too many of us, including myself at times, just coast through life and don’t reflect on the things that happen to us.
In every experience, both good and bad, we can take lessons and use these lessons to grow as a person.
The growth won’t be monumental. You won’t wake up tomorrow as a completely changed person, but in time, making small improvements makes a difference.
This is what I try to help readers of Compounding Pennies understand with their finances. Anyone in debt wants to be debt free overnight, or those looking to become rich want wealth immediately.
But it doesn’t work this way. Small changes over time lead to massive change. If you are willing to be patient and do the work, amazing things will happen.
With that said, below are my biggest wins and losses in my life and how they have affected my life and helped to shape me into the person I am today.
#1 Win: My Attitude
By far, this is the biggest win in my life. I don’t believe that things in life are a result of luck. I feel that people who are seen as lucky are simply people who have put in the work behind the scenes to take advantage of situations when they present themselves.
This work that is done is not strictly defined as physical work. A professional athlete works on his or her craft for 8 hours a day or more to be great. I work on my attitude. By having a positive attitude and seeing the good in all situations, I have lived a great life.
I can sum up my attitude as “everything works out for me in the end”. If you don’t know me, this might come off as me sounding arrogant. But it is not arrogance at all. It is simply stating that no matter the situation that presents itself, something good eventually comes from it.
I’ll offer a couple of examples to explain myself
When I was younger I was in a relationship with a great woman. She checked off most of my needs in a relationship. Still, something was missing. So I ended things.
After ending things, life was miserable. I was sad and alone. And then dating new women was just as bad. After 4 years of searching and failing to find love, I could have begun to question if I made the wrong choice by letting such a great woman go.
But during my 5th try at online dating, I met an incredible woman who is my wife today. While it would have been easy to get discouraged during this process and give up, I kept reminding myself that everything works out in the end.
Of course, there were times during this journey I was discouraged. I am human after all. But I knew that if I stuck with it, things would work out.
In another example, I was laid off in 2013, two months before I was to get married
The layoff blindsided me.
I remember driving home that Tuesday morning in September and not being able to fully comprehend what just happened.
I remember eating some lunch and then going out to play golf. I needed that time to organize my thoughts and my emotions.
After a couple of days, I was presented with a crossroads. I could start looking for another traditional job and continue living my life as is. Or I could try to take my side business of running a website full time.
I was making some money from my website and thought I could increase this income if I were work at it full time.
After thinking things through, I decided to give it a 6-month trial. If I was not able to increase my income during these 6 months, I would look for a traditional job.
Six months came and went and I haven’t looked back.
A few years ago, my wife was ready to switch careers and with it, take a large pay cut. We weren’t sure if we could survive financially and I might have had to go back to a traditional job.
I started to look, but deep down I wasn’t that interested in doing this. I loved running my website. Then out of the blue, an old friend emailed me. He mentioned how his online business was too much for him and he needed a partner.
I ended up working for him while also running my websites.
In both these examples, things worked out for me in the end. There were setbacks and struggles along the way, but I don’t focus on them. I work to focus on the long-term when everything will work itself out.
I’m not sure when I started thinking this way or even if there was a moment in my life that made me. For as long as I can remember, I’ve always believed this will continue to do so.
Your attitude plays a huge role in your life. If you wake up, stub your toe and hold on to the negative thoughts associated with this, you will subconsciously focus on all of the negative things for the rest of the day.
You will get mad that when you get into your car, you just missed your favorite song. You will get frustrated when you hit the third red light in a row.
You’ll get discouraged when your boss drops a task on your desk that he needs done today.
That one negative thought will have you seeing every bad thing in your life and your mood, body language, and interactions with others will reflect this.
But if you start off in a positive frame of mind, you will focus on the positive things throughout the day. Your mood, body language, and interactions with others will be more positive and beneficial.
At the end of the day, you decide on your attitude. Having a positive one and finding the good in the bad will carry you a long way in life.
#1 Loss: Impressing Others
When I was younger, my happiness came from impressing others. This meant I would buy expensive clothing, sports cars, and the latest electronics, just to show off.
Having the admiration of others is where I got my self-worth. And this is exactly not how you should find value in yourself.
By going this route, I was spending all of my income every month, and in some cases, more.
Then one day at work, I had my “aha moment”. I was walking to the break room when I saw a co-worker with a shirt that like I liked. I asked him where he bought it.
I was expecting him to reply with a high-end retailer, but his answer stunned me. He bought it at a department store.
I walked away confused, questioning everything I thought about spending money to impress others.
Up until this moment, I felt great about how I was living my life and thought that others liked and respected me more for having nice things.
But I was wrong. They liked and respected me for who I was, not because I spent $200 on my dress shirt.
After some time thinking, I came to the realization that impressing others is a waste of time and a waste of money.
When it came to my clothes, no one knew what the name on the label was or how much I paid for it. Only I did and I needed to learn that there are other, more important things in life than the designer of my clothing.
At the end of the day trying to impress others is going to get you nowhere. You might do something to impress one person, but then have to do something different to impress the next, then the next, and so on.
You are going to spend all your time and energy doing this and never enjoy life. After all, most of these people come and go in your daily life. You are the one who has to live with yourself every day.
Therefore, it is important you get your self-worth from within.
I now get my self-worth from within and don’t worry about the name on my clothes or need to have the latest electronics.
I take my time and buy quality items that I need and are going to last. Of course, I still splurge from time to time, but it’s not done to impress others. I do it because I enjoy the thing I am buying.
By following my values and not trying to impress others, I’ve been able to get on a path of financial independence and live the best and fullest life possible.
#2 Win: Doing Something That Scares Me
I want to be the best person I can be. As a result of this, I like to look at where I fail or am not my best and try to work on bettering myself.
I credit this to my old boss who encouraged me to fail. He never got upset with me when I failed. His belief was that when you stretch yourself to become a better person, you are bound to fail because you’ve never tried the task before.
But if you can learn from your mistake and try again after making the necessary adjustments, you will eventually succeed.
So for an entire year, I looked at the things in my life that scared me and forced myself to confront these fears.
One of the biggest fears I had was flying. I was OK when we were in the air and it was smooth flying, but takeoffs, landings, and turbulence while in the air gave me white knuckles.
So I decided to look out the window during a flight and try to understand what was happening instead of just accepting the feeling of fear.
We took a trip to Belize when I faced my fear of flying. I did a good job on facing my fear on the two flights to get to Belize. But the biggest hurdle was the flight to the island off the coast where we were staying.
We had to take a puddle jumper. The takeoff wasn’t bad, but we had to make a quick stop at another island first. The runway was a small strip of sandy land that looked extremely short and ended in the ocean.
It didn’t help that during this flight the co-pilot was more interested in reading the newspaper than paying attention to the flight!
I had to work to remind myself to calm down and think through the situation and not allow my emotions to turn the situation into one of life or death.
Long story short, I am not as afraid of flying. I am comfortable with all parts of the flight and now love looking out the window as we land. The only thing that still makes me nervous is a lot of turbulence.
By stepping outside of my comfort zone, I grow as a person. I don’t see these changes take place as they happen, but when I look back, I can see new patterns for how I have done things differently, all because I chose to push myself.
For example, the flights back from Belize were good but I was still a little scared. But as I’ve flown more, my fear lessens more and more.
And facing my fears and trying to grow as a person affects all parts of my life, from relationships to my career, and everything in between.
#2 Loss: Buying My House
I bought my first house in the summer of 2007. If you can remember, housing prices were high and homes were selling fast.
I was trying to buy a house using only my income, which wasn’t the highest at the time. As a result, my realtor was showing me the houses I could afford, which happened to be in the least desirable sections of the city.
I asked to see some homes that were a little more expensive and found a nice condo. The problem was when you took into account the homeowners association fee, I couldn’t afford the house.
But this wasn’t an issue since everyone was being approved for mortgages back then. This included me. Looking back, I have no idea how I was expected to make my monthly payments.
When you took everything into account, I was paying close to 70% of my net monthly income on my house. I should have paid attention to this red flag, but wanted to own a house so bad that I ignored it.
The next warning sign telling me not to buy this house was on closing day.
I got a call from my realtor telling me the lender went bankrupt. They had to fund $200 million in loans that Wednesday and only had $1 million in the bank.
We scrambled and found another lender and I closed on the house a few weeks later. Because money was so tight for me, I had to bring in a roommate for a few years just so I could survive financially.
Even then, I went into some credit card debt that I eventually paid off.
It is critical that when you have a choice to make, you step back and remove emotion from the equation. If I had done this, I would not have bought the house.
But I wanted to be a homeowner and wasn’t going to buy in the area of the city that I didn’t like.
As a result of buying the house, I spent many nights reviewing my budget and making hard choices about where and how to spend my money.
In the first few years, the issue only grew larger as the HOA fees continued to increase, but because the economy was still bad, I wasn’t earning a raise at work.
This led to more stress.
But, as you know from reading this post, I look at the positive side of things. Even though this was a big loss for me, I learned a lot from it.
I became a better budgeter of my money. I learned to take the time to think through my purchases more so that I have fewer purchases that I regret. I learned to work harder so that I could earn a decent raise.
Eventually, I moved out of the house and in with my girlfriend. The house value dropped dramatically so I ended up renting the house out for 4 years before selling it.
I absolutely love your stance of a positive attitude through the highs and the lows of life. It’s completely true that your outlook colors the inputs of life that you receive throughout the day! Well said and done, Jon! What about you, reader? What part of Jon’s story stood out to you? Let us know in the comments section below and we’ll keep this discussion going!
Thanks for reading!