[Please welcome one half of the duo from DukeofDollars.com today, as Jack spills his heart here on all things financial he learned from growing up in a helluva toxic household, ugh… As a parent this KILLS ME, and I wish this upbringing on no kids out there! What is wrong with people????]
The first time I rode a four wheeler as a kid, my dad plopped me down on the machine without a helmet and pointed me at the trailhead. This same guy — we’ll call him Ronald, because he’s kind of a clown — then hopped on his mechanical high horse and proceeded to take off down the trail, yelling “Follow me!” behind him. A 90-degree corner immediately greeted me, and with my limited 20 feet experience of riding so far, I was bucked off the machine as it proceeded to climb straight up a tree. I cracked my head, and the four wheeler landed right on top of me.
After waiting a minute or two, I realized I was all on my own with this problem as Ronald was long gone. I mustered the strength to kick off this heavy burden, climbed back on top of that mofo, and then sped passed Ron while flipping him the bird.
That’s pretty much how my financial life started too: flat on my ass with an enormous weight holding me down and no parent in sight.
Lesson #1: Don’t Sell The Shares You Inherited and Blow The Proceeds on Four Wheelers!
Those same ATVs mentioned above? They were purchased from stock my parents inherited. I wasn’t privy to all the details, but the sum I guestimated they received was in the $50k – $100k range: invested in what my parents called “blue chips,” which was the first time I’d heard that phrase before. What I do know, however, is that a $15k chunk started its brief life under the tutelage of my parents as the bluest of blue stocks on the market: IBM.
In 1992, a single share of IBM was worth about $88 unadjusted for splits, meaning my parents possessed roughly 170 shares. Let’s assume that instead of rushing down to Honda Motorsports before the check even cleared, Ron and his wife had the foresight to hold onto this small fraction of their inheritance and just let it ride. They could’ve spent almost $29,000 in dividends to date and still be sitting on a split-adjusted 680 shares, which would now be worth over $95,000; the annual dividend for 2017 and beyond is projected to be > $3,800.
That’s a lot of Power Wheels.
When I draw lessons from this mistake, I look at not only the hypothetical end-result, but also what kind of mindset it would take to ride IBM from 1992 to 2017. Seven years into the experiment, IBM experienced a meteoric rise powered by the turbo booster of the tech bubble. The shares reached a high of roughly $138 in 1999, right about where the price sits today, nearly 20 years down the road. During the ensuing crash, IBM dipped below $60.
Depending on your mindset, it might’ve been tempting to sell at both the high and the low phases: lock in gains in the former, or salve your fear of further losses with the latter. The company was considered the unassailable stalwart of tech during the 90’s, but its waning market position redefined the business in investors’ eyes. Declining revenue and a lack of innovation has transformed the perception of IBM from a shining star to a washed-up has-been.
I try to focus much of my investing efforts on the hold part of buy-and-hold. In the case of IBM, a dividend powerhouse, I’d pool the dividends and invest in a different, more stable sector. Diversify not through selling, but by redirecting the increasingly fat dividend stream into other businesses.
Lesson #2: Maintain Your $hit or It Becomes Worthless
They lasted just two years. No, not my parents’ faltering marriage, still talking about those damn ATVs. It turns out that engines have this weird substance called “oil,” and it needs to be changed every now and then. Three gently-used automobiles later, my parents finally discovered that cars, too, also have this same strange substance in it.
The three cars: 1) Ford Explorer, 2) Mercury Sable, 3) Lincoln Town Car – all bought with < 40k miles, and all dead by 75k miles because of engine problems.
A dear relative of mine gifted me a granny car when I was 16. I loved and appreciated the crap out of that vehicle, old people smell and all. When I scurried off to college, a school that banned freshmen from parking vehicles on campus, my parents decided to reappropriate my car to my older sister for a year. She begrudgingly returned it with a dead inspection sticker soon after the school year ended. Yes, I got a ticket on my ride home.
Surprise, surprise: she too had never learned about oil. Within a week, I heard the familiar sound of a seizing engine. Fortunately, I was able to limp the car to my friend’s house where his girlfriend was palling around with this hot chick in a bikini who happened to be a mechanic’s daughter. Though I’d learned the lesson already, I pretended to be ignorant about checking fluids while she “assisted” me.
She’s now my wife.
The first time I met my future father-in-law, he towered over me, crushed my handshake, and told me, “Boy if you ever hurt my daughter, I’ll rip your head off and cram it up your ass.” The most productive man I ever met, he was always tinkering on something. When he helped me with a plumbing issue, I asked him how he knew what the problem was. He replied, “I had no idea. I just figure out how to take it apart and then figured out how to put it back together.”
That’s perhaps the best repair advice I’ve ever received. Everything comes apart somehow, even if it’s not obvious at first. As far as maintenance tasks go, I rely on reminders. Google calendar is set to nudge me whenever air filters need to be replaced, batteries charged, gutters cleaned, and yes – especially when oil needs changing.
Lesson #3: Cheating and Refusing to Pay Taxes Are – Go Figure – Illegal
Leave it to my parents to find a silver lining in a DIY storm cloud. They ended up donating all four totaled vehicles to a registered charity. Pretty generous, right? Except for the part where they forged the receipts to show that the cars were in pristine condition and worth 4x the correct stated value.
Tax time for ol’ Ronnie was a game he played with TurboTax – fudging every number until the exact moment that the software threw a red flag. It was an endless game of chicken with the IRS. Unclaimed income, fictitious and overstated donations, illegal claiming of dependents, falsified businesses, enormous home offices: if you can think of a way to cheat taxes, my parents did it.
Before I cut ties for good, I learned that they were outraged to have received a thick envelope from Uncle Sam. Those IBM divvy’s probably would’ve come in handy around the time Ronald & Company decided to burn the mysterious contents of that package.
Determined to be their antiprotégé, I once filed an amended return when I realized that tips weren’t automatically included in my pizza delivery summer job W2 to stay on the “good” side.
Lesson #4: Cigarettes and Drugs – A Surefire Path to Financial Ruin and Misery
Legal correspondence wasn’t my family’s favorite fuel. That award would be split between the cigarettes and the drugs. At the age of fourteen, I sneaked one of my parents’ cigs to see what the fuss was about. I ratted myself out with a nasty gagging fit on my first couple draws and was promptly scolded right after: par for the course for teenage mischief.
The next day, however, my parents gave me a pack of my own cigarettes so that I wouldn’t have to steal theirs. I smoked for four formative years until I landed my first office job and realized how much the habit would hold me back in the workplace. And by that time, the free cigarette train had run out of track.
With an hourly pay rate just a smidgen above minimum wage, it didn’t take me long to figure out how expensive it was to roll up and burn a $5 bill every day.
While cigarettes seared a massive hole in the household “budget,” at least they were legal. My drug dabbling experience, getting caught, and the resulting parental guidance all adhered to the same pattern as the tobacco. Drugs, however, were difficult for my parents to find. In me, they saw a budding conduit to the black market.
My relationship with my parents had been strained, to put it kindly, up until the moment they realized that I had nefarious connections. That revelation ushered in a brief golden age between father, mother, and son. They were oh-so-friendly during my mid-teens. Bless their hearts.
Ron was pulling in a solid income by this time frame, helped along by his thievery from the taxman. He approached the drug market much like a soccer mom at Costco – preferring to buy in bulk to secure the discounts. Behind the force of his seed capital, along with the entrepreneurship of the local high school slinger, a small narcotics empire quickly rose in my town. Faster than it had risen, the entire enterprise crashed down hard right after, tossing a few people straight into prison along its demise.
Miraculously, neither Ron nor I emerged with a scratch on our records. He employed me as a delivery driver specializing in felonious interstate transportation, nearly ruining my life before adulthood was even on the horizon. I was a child. His child. For this, forgiveness isn’t in the cards.
Between the ages of 15 and 18, I did glean a few useful money lessons throughout these illicit business ventures though. I learned about cost of goods sold, profit margins, inventory, goodwill with vendors, shrinkage, the compounding power of addictive consumerism, etc. One of my top investments to this day is an alcohol purveyor.
Most of all though, I started to learn about risk. I’ve read that the human brain doesn’t reach its full risk-processing power until age 25, and I know from experience that I was nearly blind to the concepts of probability and consequences as an adolescent. Nearing my mid-twenties, I began to realize just how mind-bogglingly reckless my teenage endeavors were regardless of whether I’d acted at the behest of my parents or not.
The whole clusterf*ck set into motion a deep-set sense of personal responsibility. I learned that I needed to take control of my own life, live up to my own standards, and then reap the rewards of my own hard work, while accepting the consequences of any misdeed that I committed on my own.
I eventually got out of the drug game. The first person that I ever cut out of my life was a young man I considered to be my best friend. He also happened to be the founder and CEO of my parents’ personal apothecary. Little did I know at the time, the night I watched a movie with him, shook his hand, and told him to never contact me again was also the beginning of the end of my parent-child relationship. What precious little of it remained, anyway.
As my underworld connections withered and died, my parents’ addictions grew ravenously. They latched on to as many mind-altering substances they could find to escape from the reality that their house was falling down all around them. And I mean that quite literally, not a metaphor at all.
Their master bathroom had sprung a leak, causing the tub to partially fall through the kitchen ceiling where it remained for a number of years – completely suspended above a mountain of dishes that stared back at the foreign visitor from upstairs, each neglected task accompanied by its own steady drip drip drip of water that seemed to spend all night debating with its counterpart over which quagmire would be resolved first.
I didn’t stick around long enough to find out who won.
One by one, major appliances choked out their last efforts. Water heater, washer, A/C, furnace: all met their demise over a $200 repair bill that Ron refused to pay, instead opting for a $200 baggie in its place. All the while, he pulled in a six figure income.
With financial ruin creeping up from behind, my parents found a frugal alternative to visiting the ghetto: they could manufacture the drugs themselves! I’m not aware of a federally sponsored comeuppance for this crime, but it’s only a matter of time. I still have nightmares of black helicopters and predawn raids.
Lesson #5: Running a Puppy Mill Inside Your House Might Not Be a Good Idea For Side Income
In a last-ditch effort to support their drug habits over their children, my parents turned to exploiting something even more defenseless: dogs.
Because affording a kennel was out of the question, the clown committee determined that the operation should be run indoors. Eventually all manner of canine bodily fluids spread across the floors and down the walls as up to 20 helpless, unvaccinated, creatures were forced to reproduce inside the crumbling confines of my parents’ nightmare.
One poor soul died of a perpetual and untreated kidney infection; he’d bay woefully as he urinated blood behind my father’s overused recliner. They were heartless enough to have named that dog Cash. I’d moved out well before the breeding began, and my bewildered parents wondered why I never came to visit any more.
Lesson #6: “I’ll Just Come Live With My Adult Child” Is Not a Valid Retirement Plan
When the eviction was finally enforced, my parents — considering themselves victims of the gravest injustices — turned to me for help, requiring assistance which absolutely must be delivered in the form of $30,000 cash.
I’ll never forget hearing the words on the phone from my mother, “You have good credit, right?”
Invitations from me to them became exceedingly rare, so they continuously strategized ways to drop in unannounced. Once when I was still under their roof and underage, my father decided to spend an entire year without speaking a single word to me. He returned to this antisocial mechanism later at my own house as he sat on my couch, uninvited and scowling, while his wife tried to coax a few dollars out from my pockets. And if I didn’t have any, then certainly I might have some drugs they could borrow, right?
That day didn’t end pleasantly, and the next time I heard from them, my parents extended an invitation for me to celebrate dear ol’ Dad on Father’s Day.
I didn’t show up. That single inaction, one decision of defiance, was my sole moment when I’d finally had enough. It unleashed a torrent of hatred. He compared my absence — my refusal to fete the fool — to the terrorist attacks on 9/11. My inbox, voicemail, and mailbox overflowed with verbal vomit. I responded with silence.
In the years that followed, I spoke just eight total words to him on two separate occasions: “Never contact me again” and “Leave my wife alone.” I didn’t owe him the time of day, much less an explanation.
Where We Are Today – A Position of Strength
That’s the origin of my quest for financial independence. Ronnie knew that my separation from my parents had something to do with money, but his thoughts on the matter were completely twisted. In his magnum opus on the fantasy of filicide, he wrote,
“I am sorry I didn’t save money for you, blahahahahaha. You did nothing to earn it. Parents owe their children nothing.”
The fact was I wanted nothing from my parents but love and respect. I may as well have asked for the moon. When I was 18, I discovered that I could leverage frugality and a decent income to build a fortress that no person could disturb. Money was my ticket out from under the thumb of an abusive upbringing, and I still get chills when I watch Mr. Collins’ rendition of “F*ck You Money.”
Now, I’m close to that position of ultimate financial strength. I live in my own house with my beautiful, loving wife, and our pets whose healthcare rivals that of a senator’s. All my appliances and vehicles work flawlessly, and I pay gobs of taxes each year. Every single person in my inner circles shares with me a mutual love and respect, and I’m not beholden to any addictive or destructive force whatsoever.
Life is good… And I don’t own any damn four wheelers!
The Master Dukes of Dollars are the dynamic duo from The Duke of Dollars Kingdom. The two bloggers held court frequently, delving into lifestyle and personal finance discussions as they searched for ways to live an optimal life, eventually deciding to invite a global audience into their mindsets by establishing their own blog together. Chris is the younger of the two and recently launched his Great War on Debt soon after achieving a positive net worth, while Jack – the author of this guest post – is further down the road towards FIRE and is seeking a cure for onemoreyearitis. Their primary mission is to help others build their financial kingdoms, providing the world with a road-map that leads to a fortified personal monetary policy.
Want more stories like this? Check out these posts next:
- My Life (And Finances) After Escaping a Cult
- What Being Homeless Taught Me About Money and Happiness
- Seeking Financial Stability as a Gay, Non-White, Man of Muslim Faith
[Photo up top NOT of Jack’s dad – it comes courtesy of zachandlinz on Flickr]