I’ve Gone From $30K In Debt To $400K In 3 Years — Here Are 5 Things I’ve Learned

Sof

12 min readDec 17, 2020

#2. Money does not grow linearly.

Photo by Hu Chen on Unsplash

I graduated from college with $30,000 worth of debt.

Yet within a couple of months, I had paid this debt off and three years later my net worth has risen to $400,000.

Getting here hasn’t meant living under a bridge.

I don’t skip meals and, yes, I change my underwear daily.

I’ve traveled to Italy and Argentina. I’ve been to Portland and Vancouver and Yellowstone and Zion.

But there are things I’ve done differently over these past few years from many of the people I know.

And, through living differently, there are a few things I’ve learned along the way:

1. “Getting rich easy” does not exist.

My friend Felix lost $10,000 back in April, close to two month’s salary for him. On Monday this money was in his bank account and on Tuesday it was gone. Can you guess what happened?

COVID is what happened. Indirectly at least.

Back in April (why does it feel like that was a lifetime ago?) when the world was beginning to react to COVID and the markets were awash in uncertainty, Felix, thinking he could turn a quick profit, decided to open up his Robinhood app and gamble.

He didn’t think he was gambling, of course, but that’s exactly what he was doing.

He saw the entrancing graphs, the plummeting numbers, the trillions of dollars being exchanged and the siren song of “Get Rich Easy” lured him in.

“It makes no sense,” he kept saying the next day. “It makes no sense.”

And he was right. Little about the world back in April made much sense. So why had he made such a reckless bet?

The answer is the myth of “Get Rich Easy”.

Everywhere on the Internet people are screaming “Get Rich Easy!”

Sell on Etsy! Write on Medium! Vlog on YouTube! Start a blog! Print on-demand — t-shirts, mugs, phone cases too! Dropship on Shopify! Day-trade on Robinhood!

Look, I made $1,000! I made $5,000! Come in, come in, before it’s too late! I made $10,000!

When I read these headlines and I find myself choosing the color of my Lamborghini, I take a deep breath and remind myself that if it were easy everyone would be doing it.

I know people who are making money selling on Etsy and writing on Medium, but what they do is anything but easy. It’s hours of work and dedication.

So don’t be lured — “Get Rich Easy” does not exist.

2. Money does not grow linearly.

It took me 15 months to get to $100,000, another 12 months to get to $200,000, 8 more months to get to $300,000, and just another two to get to $400,000.

I only realized this recently and it blew my mind.

But it makes total sense. Every dollar you make and save is a dollar you can put to work for you.

Compound interest on $1 won’t get you anywhere. Compound interest on one million dollars will.

To illustrate this, if you invest $1 and it grows at a 5% annual rate, at the end of 20 years you’ll have $2.72. In 20 years that won’t even get you a cup of water at Starbucks.

Invest $1,000,000 instead and at the end of 20 years you’ll have $2,718,095. And that will buy you quite a few lattes with extra whipped cream.

So don’t be discouraged by the slow going in the beginning. You’re an avalanche in the making.

3. You need to invest.

More has been written about investing than about any other topic except maybe God and religion. Ask any three people and you’ll get three wildly different answers.

(All I can say is what I do, so take this with a pound of salt and do your own research and come to your own conclusions.)

As I said before, every dollar you save is a dollar that could be out working for you. All a dollar stuffed under your mattress is doing is losing value due to inflation.

With this in mind, every month I make an automatic investment into VTSAX, an index fund.

Why do I invest in an index fund, which will never ‘beat’ the market? Because I know there’s no “Get Rich Easy”.

There’s no stock you can consistently buy for a penny and sell for a hundred dollars. And if you try to find it you’ll end up like Felix.

A book that influenced me much in this arena was John Bogle’s The Little Book of Common Sense Investing.

Bogle, who founded Vanguard, the first company to offer index funds, had this to say:

The winning formula for success in investing is owning the entire stock market through an index fund and then doing nothing. Just stay the course.

If the stock market is foreign to you read this book, read some others, and then decide for yourself.

4. Investing won’t make you rich.

Wait, didn’t you just say that if you were not investing you were losing money? Yes, I did.

Growing your money passively (i.e., investing) is key, but, as I showed with the $1 vs the $1,000,000 example, for compound interest to work its magic the principal must be large.

Compound interest alone won’t do it.

About $75,000 of my net worth has been ‘free’ — by ‘free’ I mean that this money has come from interest in my savings account and growth in the stock market.

I didn’t have to get up and work for this money.

The other $325,000, though, (which is 81% of the total, if you’re doing the math) I’ve made myself through my 9 to 5 and side hustles.

The thing to note here is that investing is key to growing your wealth, not making it.

5. If you don’t know where you’re going, any road will get you there.

At the end of every month, I sit down at my computer and fill in a spreadsheet I keep where I track how much I’ve spent that month, how much I’ve saved, and what my net worth is currently at.

I’ve been doing this since August 2017.

I do this because as Seneca said:

If a man knows not to which port he sails, no wind is favorable.

My 9 to 5 is fine. The pay is good and the people are nice. But I will not be doing this for the next forty years.

There are a million other more pleasant things I want to do with my time.

I want to have more time to write.

I want to have more time to read and think.

I want to learn another language.

When I have kids I want to watch them grow up.

And I want to do all these things without the specter of money looming over me.

This is why I plan — it’s the only way to turn these ‘wants’ into a reality.

I feel a bit like an ass when I write about money. Because the truth is I really don’t care much about it. There’s no physical possession I want that I don’t have. And that’s because there’s not much I want.

I don’t derive any meaning or purpose from accumulating money because money by itself is meaningless. Money is only good in terms of what it can buy.

And what I’m planning on buying is time and freedom.

Time for myself, time for my passions, time to be with my loved ones.

Freedom from the grind of the 9 to 5, freedom from worrying about minor expenditures, freedom to live life on my own terms.

So when I see the numbers in my spreadsheet go up at the end of the month and I get excited, this nearing time and freedom are the reasons why.

Did you enjoy this?

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I’ve Gone From $30K In Debt To $400K In 3 Years — Here Are 5 Things I’ve Learned

#2. Money does not grow linearly.

1. “Getting rich easy” does not exist.

2. Money does not grow linearly.

3. You need to invest.

4. Investing won’t make you rich.

5. If you don’t know where you’re going, any road will get you there.

Did you enjoy this?

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