Guest Post: If You Follow the Program (you can have anything)

Hi, friends!

If you’ve recently started following me on Twitter, thank you! I hope you enjoy the blog.

Today I have a guest post from frequent contributor Chris Pascale. 


If You Follow the Program (you can have anything) 

by Christopher Pascale

Through my writing, I’ve been able to meet some pretty cool people. One of them is retired military officer Douglas Nordman, who goes by “Nords”.

Nords and I have a mutual friend in the anonymous Grumpus Maximus, who runs a site by the same name, and through some minor coordination, we scheduled to meet up during this year’s FinCon, a personal finance conference, in Washington, DC.

First, I’ll say that Nords, despite being a bit of a celebrity among military people in the finance space, was incredibly accessible. We were sitting outside under an umbrella, and while talking, people began pulling up chairs to join us. One thing that really stuck with me was that while discussing nearly free travel via military “Space A” flights, Nords said that he and his wife typically travel twice a year for two months at a time – flying for almost nothing with great flexibility. Noting this, he said to us, “If you follow the program, once your kids are grown, you can do that, too.”

What Program? Doug Nordman’s?

When a guy who is actively building something talks about following a program, he almost always means something he’s created that you can buy. Dave Ramsey will say it’s the 7 baby steps, which you can learn about by taking his $500 class, reading his $20 books, or his podcast episodes for free. Clark Howard also has good products of a similar nature.

But Nords? He doesn’t mean that I can have a good life if I become his follower, so much as maybe follow in some of his footsteps.

And that’s what’s so unique about the F.I.R.E. (financially independent, retiring early) community. While some have, and more will, release books and other things you can buy, they are more passionate about bringing out a message than building a brand they can cash in on. And it’s because their initial business was setting themselves up for a lifetime of financial comfort. When they proved their program, they went out to spread their gospel.

And you should know what these programs are.

The F.I.R.E. Programs

Nords is a military retiree who was able to retire for good upon leaving the service. He recommends living within your means, so that you don’t have to keep working if you don’t want to. He has a book called The Military Guide to Financial Independence, and could have released 30 more, but appears to be happy with a life of travel and leisure, with some podcast interviews thrown into the mix.

It should be noted that Nords donates the royalties for his book, which is a testament to the fact that he is set up independently through a combination of a healthy pension, savings, and living within his means.

Paula Pant, who inspired part of the title of this piece, wants you to know that “you can afford anything, but you can’t afford everything.” She runs a terrific blog, and also a podcast where she’s interviewed Clark Howard and many others. She gives away her book, Escape, to anyone who subscribes to her online community. Her main point is that if you get your stuff in order, the life you want can be yours, but within the confines of what you’ve created. It’s when you leave your reach that you find yourself in debt and in trouble.

Pete Adeney, AKA Mister Money Mustache, says to make a high income, live in a place less like Silicon Valley and more like suburban Colorado, and live close enough to work so you can bike there. By doing this, he and his ex-wife socked away about half their combined $150,000 income, and at 31-years-old had a paid off house and $800,000 in cash. With only 1 car, 1 kid, no debt payments of any kind, and a low-cost lifestyle, he went on to do other things, like raise his son, accidentally create the cult of Mustachianism, and spread the gospel of not spending like a crazy person. He has no books, gives no seminars, and created a place in his hometown where people can hang out and talk about finance, home improvement projects, or just listen to music, lift weights, and drink beer.

Choose FI: Brad and Jonathan at Choose FI offer a foundation built upon their pillars of FI. They include overlapping guidance with Wealthy Joe in advising people not to try and time the market. They also recommend index funds, cheaper cell phone plans, and keeping grocery costs down by striving to serve meals that cost $2.00 per-person-per-meal. This could be eggs, coffee and oatmeal for breakfast. A salad with chicken breast for lunch. Meatloaf for dinner. It can be done, and it really works.

Millennial Revolution: Kristy Shen and Bryce Leung are a couple of badass mofos from Canada who will tell you that owning a home is downright terrible for your finances. When you’re done reading or listening to their stuff, you’ll have to embrace your cognitive dissonance with great vigor to get back to convincing yourself that the home you bought was a wise choice (I did it, and so can you!).

These whippersnappers are a couple of software engineers from Toronto who couldn’t seem to get their heads around the housing bubble, and so balked at buying. When everything crashed, they were only emboldened more so. Going back a bit farther, Kristy grew up in extreme poverty in China, where she would find toys to play with in the local dump. Their story can be heard pretty much anywhere for free, but they also have a book called Quit Like a Millionaire, which tells you to consider your profession for the success it can bring you. For example, the average author makes $5,000 a year when ALL AUTHORS, including Stephen King and JK Rowling, are included, whereas the average accountant makes $65,000.

Eric Milton here at Wealthy Joe has been saying for years to buy into good companies and then buy more. You get all of the content for free, and it evolves over time to discuss passing and “evergreen” issues. I found this site because I read The Stock Market is for Everyone, which I recommend highly.

So Many F.I.R.E. Writers. Are They All Good to Follow?

Like diets, the general idea is that they all work so long as you actually work them. Whole 30? I personally lost 14 lbs. one month just eating meat, fruits and vegetables. It was expensive, because I was eating all the time to make sure I never felt hungry in front of ice cream, but I really did lose 14 lbs. Weight Watchers? Sure. They literally watch you get weighed, and you don’t want to be heavier when they do. Increased exercise while changing nothing else? Definitely. Replacing soda with water when you drink it every day? A guarantee.

But you cannot do what every F.I.R.E. writer recommends. For one, if you’re not in the military, Nords’ advice is moot. If you’re like me and the expense of owning a home is one you prefer, then Kristy Shen will have to move on without you. If you’re not going to buy single stocks, how did you wind up here?

Also, no one knows everything, and you need to remember not to follow anyone as your end-all-be-all. Take me, for example. I can tell you how I hacked tuition in multiple ways, how to weigh expenses as being “worth it” or not, and about setting up your teens with Roth IRAs (Daughter No. 2 just started hers at 14!), but I have a fairly heavy personal debt load that my wife and I are only recently knocking out, as explained in a 2018 piece called Wife on F.I.R.E., so while I can tell you some things, I cannot tell you everything, and might not even be the right guy to tell you anything.

And now, we conclude.

If You Follow the Program…

Nords and Paula Pant said it best. If you follow the program – of saving and investing, and not having debt – you can have anything, if not everything.

But you know this. You know that you must save something, or you’ll be poor when you’re old. The key is to be on the program.

Christopher Pascale is an author, accountant and adjunct professor from Long Island. He is the former CFO of Portfolios with Purpose, and is a current member of the IRS’ Office of the Chief Counsel.


My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)


Guest Post: Do You Want to Be Poor When You’re Old? by Chris Pascale

Hello, all. Today I’m turning the blog over to Chris Pascale. Chris is an author, accountant and adjunct professor from Long Island. He is the former CFO of Portfolios with Purpose, and is a current member of the IRS’ Office of the Chief Counsel.

Do You Want to Be Poor When You’re Old?

In sales, people are taught to get people to yes. The idea is that if you get them to say yes a bunch of times, they’ll agree to buy from you. For example, if you become a stock broker, you might say ‘would you agree that people have gotten rich with stocks?’ They would. ‘Would you like to own a portfolio of stocks?’ Of course.

The thing about this is that it’s nothing more than a 10-cent sales trick taught to morons who don’t know how to relate to others. Having been one, I know.

Like a lot of people who wanted to be in business, I joined AmWay when I was 18. And like many young people, I gained a lot of lessons the hard way. At the age of 33, I was the national sales manager for a $10,000,000 company, landing accounts like Wal-mart and Amazon. I regularly gave presentations to groups of salespeople as large as 100, but during my 15 years of sometimes being in sales, I spent a lot of time being very bad at it, studying techniques like the idiotic “getting them in a yes state,” as well as the very creepy mirroring technique where you cross your arms if they cross their arms; you put your hand to your chin if their hand goes to their chin. The idea is that if you mirror them, they feel you are the same, and will like you. The reality is that it’s very weird if they don’t know what you’re doing, and cheap and sleazy if they do.

Having run the gamut with sales approaches, I found some success by just being honest and upfront, and by keeping meetings short by making them say whether or not they wanted what I had. Nowadays, I don’t sell anything, but in the classroom, I do pitch ideas – particularly the idea of saving for the future. When doing so, I don’t tout the virtues of saving, or the gains they could make; I simply say “Do you want to be poor when you’re old?”

The answer is the opposite of Yes. And several students each semester get Roth IRAs or sign up to have their company sponsored retirement plans started.

You’re not in my classroom, but we can still explore how not to be poor when you’re old.


Can You Save Your Way to Comfort?

The wisdom of saving is get some money, and then keep a portion of it. But how much? It honestly depends on how much you live on, and how quickly you want to be free from needing to work. You may still work, but not because you need money.

The following table explains how much time it takes to buy your freedom by saving for the future based on percentage of savings.

How Much You Live on Savings Rate Years of Work : Years of Freedom
90% 10% 9:1
80% 20% 5:1
67% 33% 2:1
50% 50% 1:1

If you live on 90% of your income, you’ll obtain 1 year of freedom after 9 years of working/saving. If you live on 50% of your income, then every year worked leads to a year of being free.

The problem is that if you just save cash, you cannot buy long-term freedom.


Inflation Will Eat Your Equity

Money isn’t worth as much as it used to be. My parents’ first home was purchased in 1975 for $41,500. That home today costs about 6x that amount. During that same year, a gallon of gas was $0.57 and a postage stamp was a dime.

In the past 44 years it seems like a lot of very necessary items have gone up by a factor of 5. This means that having saved $200,000 in 1975 would have made you comfortable with admirable wealth, just like having $1,000,000 would today.

Taking this into account, even saving $1,000,000 is not enough if it’s just in the bank.

You have to buy assets like stock. This is where you plant your capital so that it can become wealth that will grow. Cash is static in the short-term, which is normal since it’s the medium of exchange, but the assets it buys can go up in value, partially because cash goes down in value.


What Assets to Buy so You’re Not Poor When You’re Old

Keep it simple. If you want to buy a home (not everyone does), buy a home you can afford without trouble. But also invest in the stock market.

How to Buy a Home: A popular saying is that “your home is your biggest asset.” For many, it will be true. Having the value a home brings can make one’s retirement years much easier. However, if your home is your biggest asset that means you have nearly no real cash to draw from, and it’s possibly because you were trying to keep up with the Joneses.

In a piece I wrote about being “partial FI,” I discussed the passive income I have, as well as how I have bought homes. My current residence has a monthly payment on a 15-year loan that is affordable for me.

And that is something you must do. You need to buy a home that won’t make you stretch to make the payment. The rule of thumb is often that your payment should be 25% or less of your take home pay. This means that if you take home $4,000/month, you should not have a payment of more than $1,000. Where I live, that won’t get you much, so if you have an average income, you must consider where you can live well, or how you can make more money. You can also engage in a strategy called House Hacking.

By having a giant mortgage payment (or high rent that prevents you from saving for a home), you will not be able to build wealth. Not only will you be constantly stretched, but you’ll miss out on the better things in life, like simply relaxing.

Also, if you spend too much on a home, you won’t be able to buy any stocks, which is crucial for building wealth.

How to Buy Stocks: First, if you have a company matching program, like I do with my job in the federal government, you must take part in it. Your contributions will bring guaranteed 100% gains. If you do not have a company match, you should consider getting a job that offers this benefit because even if the fund underperforms, you’re going to do well. In fact, if it cuts in half, you still have your original amount.

Outside of that there are multiple ways to go, between Vanguard, Edward Jones, or even seeing how Wealthy Joe’s Eric Milton does by picking high-quality companies that he’ll research on your behalf.

If you wish to go on your own as an investing hobbyist, please note the following: (1) I do this personally, and greatly enjoy it, (2) Keep this account relatively small. If you put $100 into the retirement account, put $50 into this one. And (3) Read about the subject.

Regarding No. 3, I obviously recommend Eric’s book. But there are other good ones out there, too, like The Simple Path to Wealth, Your Money: The Missing Manual, and another terrific title is The Millionaire Next Door, which outlines how the average American millionaire lives, including how they buy homes, cars, etc.

For those unsure of whether to start investing because of the risk, consider the alternative.


Is Investing Risky?

Historically, not investing is much more risky.

Homes: My dad was a college graduate, and the average graduate in 1975 earned about $12,000 per year. My parents’ first home was about 3.5x that amount. Today, the average salary is around $50,000, and that same home costs 5x that.

A house can fall in value, but if you buy well and don’t get trapped in high monthly payments, you can pay it off and keep all the money if you sell it later. If you never sell it, then it will be a wonderful gift to your heirs.

Stock: The Gap used to be a penny stock. Does that mean you should invest in penny stocks? No, but what it does mean is that high-quality businesses with good leadership will grow. Some readers might be thinking about failing businesses that were once on top, like Sears and JC Penney’s, and they are good examples of companies that failed to stay strong as the market changed. After all, Wal-mart is still doing very well, particularly because they have a great website that provides good service.

The stock market, overall, has done very well. Knowing this, you should be investing in the market. The alternative is not to invest, which means you’ll have nothing.

Do not be so afraid at the chance of losing something that you, instead, guarantee it.

Gold: I don’t invest in precious metals. But if you look at the chart you’ll see that the year I was born (1982) gold was $447 an ounce. For the next 23 years it was mostly down or flat. Had you kept buying gold during that time, you’d have eventually done well, tripling your money as I write this, but had you invested in Ford Motor Co., you could have bought shares for about $1.00 in 1982, and could have cashed out at 20x your investment in under 20 years while getting quarterly dividends. Had you bought a piece of property you would have also done very well.

Keeping Dollars Only: If you want to stay “safe” and just save your dollars away, you will be better off than those who do nothing, but worse off for all your hard work.

But don’t listen to me; this very short clip from Lebron James and Warren Buffett tells you that you should buy a home and US stock. It does not mention gold, but does say to keep some cash at hand, too.


How to Invest in the Stock Market

If your company has a 401(k) with a match, do that. You’ll double your money on day zero.

You can also set up an account with Eric right here, or Google who your local Edward Jones person is.

Whatever you do, get it done now, not later.


Doing Nothing Will Make You Poor

You must put something away for later. At some point you either won’t want to work, or won’t be able to. If you have nothing saved/invested, you will be poor.

Social Security will not pay enough, nor is it supposed to. After all, only 6.2% of each paycheck goes to the program, and it can pay you from age 62-162, so in order to survive, it becomes a cheap system that keeps getting cut.

Adding insult to injury, being poor will hurt you in so many ways.


Poor People Are Stupid

Scientific studies have proven that when in a scarcity state, people are not as smart. Rich people who become poor have lower IQ test results, and vice versa.

Why? Because they’re always thinking about money – how much they have, how much they need, and if they forgot about some other expense. I know that in times of economic hardship, I would check my online banking every morning to see which check was cashed. The combination of worry and stress likely made me forgetful or neglectful of other things.


Poor, Stupid & Gross

Let’s not forget that old people are gross! You’re going to be gross, no matter what, but you have a choice right now not to be poor and stupid. I suggest you take it.

Just enact this simple plan to prevent yourself from winding up this way:

  1. Earn money
  2. Put some money away
  3. Buy a home you can afford, and then pay it off

The alternative is to do none of those things. You’ll have no savings when you need it, and won’t be able to have as much fun when you want, which will also make you boring.



My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)