The Easiest $10,000 I Ever Made

By the time I was 19 I knew it wasn’t complicated to be wealthy. Quite the contrary: it was simple.

Simple, but incredibly difficult.

The real problem is that no one likes following the basics for years on end. It gets boring. We want to believe there is an easier, faster way and the occasional story about some entrepreneurs or lottery winner makes us believe that maybe we too could find one of those hidden shortcuts to wealth.

Except we can’t. Getting lucky is not an investment strategy.

Strangely enough it was the Marine Corps that helped me stumble onto this foundational principle of financial responsibility. I started with a base annual salary of $12,531.60 and progressing all the way to a mind-blowing $21,445.20 before getting out. Yet somehow I saved over $10,000 without even trying as a young man with a less-than-stellar track record of making decisions.

Interest + Laziness = Cash

Two things helped me along the way: being lazy and compound interest. For those who haven’t seen this quote from Albert Einstein, it’s worth pondering.

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

But I’m getting ahead of myself. Compound interest doesn’t help without the laziness. And while that may not sound right, it’s true. I learned this in a very unexpected way.

In May 2001 I shipped off to boot camp in San Diego, California. Life was confusing and hectic during the first few days as heads were shaved and gear was issued. At some point — tucked into the many hours of presentations and lectures — we were asked to fill out some forms setting up our finances.

One of the boxes you could check said “Bond allotment”. Below it were two additional choices: Series I or Series EE bond types; and $25, $50, $100, or $200 per month. I checked two boxes that day, and had $10,000 four years later without lifting a finger.

A Family Affair

I had a quirky uncle who always paid me for yard work in bonds (don’t ask). Well, thank God for him. I was exactly not a profound thinker — how many 18 year-old boys have you talked to recently — but my reasoning went something like this:

Uncle Lloyd is rich. Uncle Lloyd has bonds. If I get bonds, I will be rich.

Can you find anything wrong with that logic? I certainly can’t . . .

So I checked Yes for Bond Allotment and Yes for Series I (meaning investor, which I obviously was at this point), and Yes for $200 per month.

That was it, and here’s where my laziness was so important. If I bothered to check into my finances then I probably would have stopped the allotment to cover some ridiculous and unnecessary expense. Instead I forgot about this allotment during the ensuing 48 months as my savings slowly ticked up each month, and eventually began accruing interest. Laziness can work in your favor.

You can do the math: Once I left in May 2005 I had $9,600 (48 months @ $200 per month) in face value, which had already appreciated to well over $10,000, and continued to grow.

Bonds . . . Savings Bonds

This money came in very handy over the next nine years. It was liquidated in three big chunks: paying for some of college; buying a motorcycle; and the final bit just this year for a party celebrating my engagement with my now-wife.

I needed college, liked the motorcycle, and love my wife. Not too shabby for the easiest $10,000 I ever made.

One last point that is subtle but important. Once I had that chunk of money saved at such a meager salary, I realized there was never an excuse for financial dependence on anyone else. Saving money may not be easy, but it isn’t complicated either. Every time I forget this, I pay.

Hopefully this saves you some trouble down the line, too. God bless.