As an interesting follow-up to the questions I asked you yesterday, I wanted to post some excerpts from my interview with MR, a furniture store owner in Salt Lake City. He was good enough to spend about half an hour on the phone with me, and gave me great insight into what it takes to be a successful person, and his thoughts on becoming financially independent.
First a little background on him. As a young man, MR spent two years in North Carolina, and during some of his spare time he toured the furniture factories and other industries in the area.
He says he was “fascinated by the furniture thing”, so when he moved back to Utah in his early 20s he went to work in a furniture store, and became one of their most “prolific salesmen.”
The store he was selling for was struggling though, and he saw that they would soon be closing their doors. Around that time a major furniture manufacturer approached him about the opportunity to become one of their first franchisees.
The thought of striking out on his own was scary, and he had to borrow $50,000 to get the business off the ground. For him, borrowing that money and facing the task of opening a successful store and paying off that debt was, as he put it, “gut wrenching.”
But he did do it, and in his words “We really haven’t had, other than the initial fear, [any] setbacks. It’s been solid since the year we opened. It’s just grown every year since then.”
MR is a great example of someone whose primary goal has been to limit risk by avoiding debt and making only sure money investments. That strategy has paid off in a big way for him. He’s now a multi-millionaire, with not a penny of debt to anyone, and no exposure to the risks of the markets.
Our conversation started with a look at what it takes to be successful:
Mark: The word tenacious keeps coming up in my millionaire interviews. What single attribute of yours would you say has contributed most to the success you’ve had?
MR: [T]hat word, tenacious. It’s a sticktoitiveness.
I’ve never met anyone who it was a flash in the pan that made him a ton of dough instantly and life was good. The guys that I run with have been tenacious, have done it a brick at a time, till they built the wall over a long period of time.
The get rich quick thing you always hear about usually doesn’t happen. It’s always hard work, and almost exclusively, all entrepreneurs. They did their own thing; they weren’t working for anyone, or [at least] for very long. They did their own business, their own thing.
I don’t know anybody who inherited wealth, personally. I don’t know anybody who got rich quick. I know a lot of millionaires in my circle of friends, and all of them have done it, you know, a year at a time, a month at a time over their careers.
Building wealth is not a big deal once you get a little bit of dough under your belt, and you’re smart about it, and you clear all debt – and that was crucial.
My wife and I, we worked two jobs when we were first married, each, so that we could pay off our huge mortgage of thirty thousand bucks. And we did that in a couple years and then we saved like bandits, and invested in businesses.
Mark: What is the one piece of financial advice you’d give?
MR: First, clear all debt, at any sacrifice. Clear your mortgage. Don’t borrow money for cars. If you can’t pay for it, don’t buy it. And that takes discipline, and that takes tenacity, and that takes guts. And once you’ve cleared debt, then you’ve got a little money that you can invest in a business without putting your family at risk, without putting your own financial well-being at risk.
Mark: You know, there are a lot of people out there who say, “Don’t pay off your house. Leverage your house.”
MB: So, why is it so important to clear ALL the debt before anything else?
MR: Because it’s a personal triumph. You’re not in bondage to anybody. You’ve cleared every debt you owe. Nobody’s coming after you; nobody’s looking at you for money, and you control what you do with your money. The leveraging your house thing is the biggest bunch of nonsense in the history of the planet, and you’re seeing the results of that right now in the collapse of the market, the real estate market.
[I]f you mortgage a solid asset like that, and if you take the money and you gamble with the money, odds are you’re going to lose. So that’s an asset you don’t fool with. You just don’t. You clear it out so your family’s secure, you’re secure. And then you go after businesses.
Clear all your dough – any debt you have and you’ll be surprised what an inner strength that gives you if you’ve had the discipline to do that. Don’t drive a Lexus; don’t drive a BMW, don’t do any of that until all of those debts are gone, then you can start doing some of that other stuff.
So what do you think? How can you implement some of these philosophies into your own personal financial plan? My conversation with MR made a big impact on me. The day after he and I spoke I paid off a car and 3 credit cards.
Sure, the car and the credit cards were all at super-low interest rates, and the payments were very manageable for me, but MR inspired me to get out of debt, so I did what I could that day and made a plan to get rid of the rest of my debt as quickly as possible.
You know the best part? By paying off that car and those credit cards I effectively gave myself a five-figure raise in my annual net income! Maybe that would make a good article for this site…
Image Credit: Kenn ChaplinSubscribe to the Butler Project's RSS Feed and get fresh content as soon as it's posted.