Wednesday, February 27, 2008

What would you do with $100,000?

Several years ago, I hit a huge financial milestone and like any accomplishment or good news, I was eager to share. I mentioned to a good friend of mine (former college roommate and fellow engineer) that I had saved and invested my earnings resulting in a nest egg of $100,000. (I also had a small mortgage at the time, so my net worth was actually much less)

Her response was that of surprise and prompted several questions: How did you ever do that? Do you invest in stocks? Where did you learn to invest?

I responded that what little investment knowledge I possessed was from self-directed reading of financial magazines and a few discussions with my family members. My folks and one grandfather had invested in stocks, so it was not totally foreign to me. In fact, I was always intrigued with the market. I have a flare for gambling and as a young, wide-eyed kid, the market seemed to be a gambler's paradise. Even so, at that time I only had a couple of individual stocks while the bulk of my money was in mutual funds.

Anyway, after answering her questions, I asked what she and her husband would do if they had $100,000. Without a second thought, she said they would quit their jobs and live off the money until they had to return to work. I was stunned.

For a little background, this friend is a very logical person, an engineer, a problem solver. She was from a middle class family just like myself and she had always had a job and always had money. I never heard her say even once that she didn’t have money to do something or go somewhere. And this was before everybody had a credit card. Back then you actually had to have cash in your hand to go have a good time.

I realized then that money to my friend was a tool to get things. Money just comes and goes in and out of her life. It is not something to hang on to for a rainy day or even to grow for future needs. Her attitude was that if she needed more, she would work to generate more. She would often say – It’s just money, I can always make more.

I admit that I do admire her confidence and positve attitude towards work. She seemed to be certain that it was never going to be a problem to get more money.

I have never thought in those terms, ever. I have always viewed money and even things as coming in discrete, finite, limited quantities. I must have lived a previously life during the depression, or something. LOL. I was one of those kid's that would never use my cool magic markers from K-mart, because I didn't know if I would get anymore, ever again.

For whatever reason, I have a great respect for money and even things - because they require money to get. And I enjoy watching my money grow with very little effort from me. It is extremely cool to know that your money is working for you all of the time. Even while you are resting, asleep, on vacation, shopping, etc. I saw it as a way to get off the treadmill, so that one day I wouldn’t need to work to make more.

By the way, my friend never asked me what I was going to do with the money. And that is another story for another day's

For more PF stories, please visit the Carnival of Money, Growth and Happiness. My article "What to expect for the average pay raise in 2008" was included.


  1. Nice Entry. I also believe that money is a tool, but I'm not as cavalier as your friend regarding accumulating it .

    In truth, none of us know what our actual earning potential will be in the future and we can't just assume there will always be a job waiting for us that will allow us to earn the money to suit our lifestyle.

    To me, money is a tool for comfort, but it's also a means for increasing your options and ultimately granting you the means to financial independence.

    I know many folks that don't even consider accelerated accumulation/growth and are content to just put in 30+ years of work while they wait for their 401Ks to grow. When I try to tell them about other investment options and opportunities, most dismiss it as too hard or too boring.

    I think whatever we do with our savings to make financial freedom arrive faster is anything but boring. =)

  2. Appreciate the comments. You’re right, it seems most people are content with the 30 year treadmill. Whenever I mention investment options to co-workers, they tell me they don’t have the money, but they have every electronic gadget imaginable.