Inaction Is Costing You A Fortune

in Financial Planning by

Inaction is a disease. It’s much easier to complain why the world isn’t fair than do something about a situation.

I knew a fella who would come into work every single day and complain how much he hated his work and his boss. For two years he used me as his personal therapist while never offering to buy me a steak dinner in return for my bleeding ears. Then one day he was gone, not by choice, but because his managers let him go.

He couldn’t find work for 10 months, and when he finally found a new job at a competitor, he was still moaning! Here’s an example of someone who didn’t take matters into his own hands. When you let other people dictate your fate, unideal situations may occur.

We’ve all been through an experience where we know we should have done something, but didn’t. For example, some users sign up for the Personal Capital Dashboard and don’t aggregate enough accounts to get maximum use out of our free technology. But once they do, they wonder why they waited so long.

I’d like to share with you a personal story about how my inaction for several years lost me a fortune.

NOT BOTHERING TO LISTEN OR TO TRY

In 2004, my father told me about this crazy world of online publishing where bloggers could make a healthy living in their PJs by typing random thoughts thanks to Google’s Adsense advertising program. I paid no attention to him because I was just promoted at work and was doing my best to prove my worth. I had also started business school part-time. There’s always something, right?

I graduated from business school in 2006, and suddenly had an extra 30 hours a week to do something productive. I didn’t. I cherished my free time before and after work until 2009.

2009 was hell for practically everybody in the financial services industry. Plenty of other industries suffered as well. Bear Sterns and Lehman Brothers went under, and everybody knew someone who got laid off. Many didn’t even want to come to work out of fear of getting the call from HR. If they couldn’t find us, they couldn’t fire us, so the logic went.

I easily lost 35% of my net worth within 6 months despite having 25% of my net worth in CDs due to my investments in multiple properties that were all imploding. It was crazy to think that what took years of savings and sacrifice could be gone in a few short months. I was depressed with my ineptitude, because all this time I thought I was doing the right thing with my money. Lesson learned: you don’t really know your true risk tolerance until the tsunami comes crashing down on your head.

Some friends turned to alcohol and cigarettes to cope. I never understood the term “self-medicating” until 2009. Given I’m allergic to pretty much everything remotely poisonous, I passed on the narcotics and decided to write an open journal online instead through FinancialSamurai.com. My site was the catharsis I needed because I had already been struggling with working in finance after 9/11 happened. When people are dying from a senseless act, it feels extremely empty to work in the finance industry. Just months before the planes hit I was at the top of the World Trade Center II for a Latin America conference. After the accident, I kept think there has to be more to life than slaving away from 5:30am until 7:30pm+ every day.

After starting Financial Samurai, I soon discovered there were thousands of people who were also struggling to cope with financial loss. We created an online support group where we started sharing our stories and helping each other get better. Each comment left gave me more motivation to write myself until one day, I realized there was enough traffic to squeak out a livable income stream in expensive San Francisco.

LEAVING A TON OF MONEY ON THE TABLE

I always thought I’d work in finance until age 40 (18 years post college) and then try something new. Maybe I’d just go back to Hawaii and farm mango trees for a living. Or maybe I’d move to China to finally improve my Mandarin to fluency while working on something entrepreneurial. All one has to do is replicate American success stories in China.

But at the age of 34, I decided to take the leap of faith and focus on my website full-time after two and a half years of writing as a hobby. I had always wanted to do my own thing since growing up overseas in middle school, and I was finally given a second opportunity to try. The first opportunity was right after college to go work for my father’s friends eyeglass factory in Shenzhen, China.

Even though I wasn’t miserable at my finance job, I certainly lost a lot of enthusiasm the final two years. To stay would be unfair to my colleagues, clients, and to other people who coveted my job. 11 consecutive years at one place, and 13 consecutive years in the same industry was a respectable enough time to move on. It was incredibly scary to leave a steady paycheck after so long, but the severance and savings helped soften the landing.

I’m 37 now and although my site has continued to grow since I left my old job, I can’t help but wonder how much larger my site would have been if I had just started it in 2004 like my father asked, instead of in 2009. Sites that began in the early 2000s have a huge competitive advantage in terms of branding and search traffic. Many sites aren’t very good in terms of design, usability, or content, but because they started early, they just dominate the organic search results.

As a result of my inaction, I’ve felt the need to constantly hustle much harder to try and one day “catch up.” All told, I think I’ve left over $2 million dollars on the table. One personal finance blogger friend of mine sold his site for over $5 million dollars after starting just one year earlier in 2008. There are plenty more who’ve sold their sites for millions as well.

YOU NEVER KNOW WHAT WILL HAPPEN

It’s always worth trying something new because you never know what will happen.

For two years starting in March, 2012, I fulfilled my goal of becoming my own boss. I was a one man show who ran accounting, operations, marketing, business development, product development, and sales. It was a ton of work, but when you are working for yourself you have the ability to work forever.

Part of business development is working with and promoting great financial products such as the free financial tools by Personal Capital. I got to know the affiliate manager over several lunches in early 2012 since we were both based in San Francisco. I even got to interview Bill Harris, Personal Capital’s CEO and Jim Del Favero, Personal Capital’s CPO down in Redwood City for an hour and a half.

Every day I’d wake up at 6am – conditioned by the stock market’s 6:30am opening – and be done with my online endeavors by 11am at the latest. I had the whole day to do whatever I wanted, but everybody I knew was at work. To kill time, I visited every museum San Francisco had to offer. I also became a regular early bird special customer at a couple diners. Life was good, but I was getting bored always hanging out with tennis junkies at Golden Gate Park.

All was going well with my online venture until one day in late 2013, my Personal Capital contact highlighted a job opportunity in the marketing department for a social media/content management position. Hmmm, here’s an interesting opportunity to rejoin the real world again and fulfill one of my bucket lists of working for a startup. I was thinking about going back to work at this time, but I just didn’t know what kind of role would demand my skill set given I didn’t want to return to finance.

In the end, I decided that joining Personal Capital as a part-time consultant was a great opportunity. I had gotten to know them for two years from the outside. Now it was time to try my hand in the marketing department of a financial technology company. Two things I’ve always been interested in doing, but never knew how to get into. The thrill of work returned!

Personal Capital has helped me fill the void, and I am grateful for the opportunity. There are so many synergies involved with creating and managing content here on Daily Capital and on my network of sites. I’m allowed to continue my freedom of expression, while actively helping Personal Capital build its presence online. What’s also great is that Personal Capital has a great balance of freedom and structure, compared to the very formal environment on Wall Street.

Finally, work has renewed meaning again. Personal Capital is here to help individuals and families build wealth in order to lead better lives. There’s nothing more satisfying than helping people solve their financial problems either for free with our technology or through our financial advisory business headed up by Kyle Ryan.

SLAP FEAR IN THE FACE

Before my colleague and trusty mailroom attendant of 10 years got laid off in 2011 he told me, “We will regret more the things we don’t do, than the things we end up doing.” He speaks the truth. If I never took the leap of faith in 2012, I would be filled with regret later for never trying my hand at entrepreneurship. Without my online business, I never would have been given the opportunity to pivot into a new career. Taking action helps create new opportunities.

The end result is never as scary or as bad as anticipated. Our minds have a very skillful way of tricking us into inaction. We don’t kiss the girl for fear of rejection. We don’t raise our hand in class for fear of looking stupid. We don’t take the necessary steps to secure our financial future because we’re suspicious of anybody who is looking to help us. We wait until we’re broken to see the world.

Don’t let inaction take away your fortune. Although I missed out on perhaps $2 million dollars by not starting my business five years sooner, I’ve learned my lesson. Don’t let inaction take away your freedom to do what you want. Regret, is an even worse punishment!

Photo Credit: John Hoey, licensed under CC BY 2.0

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Financial Samurai

Sam is the former Managing Editor of the Daily Capital blog. He worked in finance from 1999-2012 before deciding to focus full-time on his online endeavors - FinancialSamurai.com and the Yakezie Network. Sam is an avid tennis fan who loves to travel. He received his BA from William & Mary and his MBA from UC Berkeley.

6 comments

  1. Larry

    Inaction is a disease is right! It feels like America is getting lazier and lazier everyday thanks to a different set of expectations for how to get rich and who should get rich.

    Back in the day, it was get in first, do everything asked of you, never complain, and work until the cows come home. Thanks to the internet, everybody seems to have ADD or something!

    Pay your dues people!

    Reply
  2. Josh

    It doesn’t sound like inaction unless you wanted to start a site back in 2004 and just ended up procrastinating. Can you share the name of the site which got sold for $5 mil? How many readers do these sites which are sold for millions have typically?

    Reply
    • Financial Samurai

      It’s confidential. But it’s readership is about 50% larger than Financial Samurai’s, but it has gone downhill since the author left.

      Reply
  3. Josh

    My personal example of inaction was waiting until 2009 to buy a house when I could’ve bought one back in 2000. Inaction isn’t always financial. For others, it’s waiting until they’re much older to try to have a family even though they had a spouse or partner when younger and coming to terms with having to adopt instead. For others it’s waiting too long to tell someone something and letting time pass by.

    Reply
  4. Dylan Robertson

    Sam. I really appreciate your insight and honesty. When I read this personal reflection of yours “After the accident, I kept think there has to be more to life than slaving away from 5:30am until 7:30pm+ every day.”, I couldn’t help but be reminded of the words of King Solomon found in Ecclesiastes – arguably one of the richest men in history who accumulated a massive empire and accomplished quite a bit.

    “6 Better is a handful of quietness than two hands full of toil and a striving after wind. 7 Again, I saw vanity under the sun: 8 one person who has no other, either son or brother, yet there is no end to all his toil, and his eyes are never satisfied with riches, so that he never asks, “For whom am I toiling and depriving myself of pleasure?” This also is vanity and an unhappy business. ”

    Thanks for writing and teaching
    Dylan

    Reply
    • Financial Samurai

      Thanks for sharing these wise quotes and reading Dylan!

      Reply

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