I remember it like it was yesterday. I was twenty-two years old and had just moved to Los Angeles to start my first legit job out of college. It was a city where I knew no one. By itself not a big deal, except there were 10 million other people living there. To say that I was scared was an understatement. I had $2,000 in my checking account. But the guy who I was renting a room from wanted a $2,400 down payment (first month, last month, deposit). He happened to be a nudist, rock musician in his forties whose living was earned by giving deep tissue massages in our living room. Great guy, but different story.
So what did I do? I called my parents and just as they had done many times before, they emptied their savings account and wired me whatever they could. The only person more scared than me was my mother.
I was so embarrassed.
I was 22.
Why the heck did I still need my parents’ help?
That day I promised myself to do whatever it takes, so I’d never had to ask my parents for financial help again. No more bailouts.
My career was about to begin. And I decided to make a plan that would ultimately set me up for the rest of my life – even though at the time I didn’t know it. The plan was simply meant to ensure true financial independence from my parents.
I called the plan Start Hard and it really only had one objective. Save 50% of what I earn. I guess I could have aimed to set-up a simple emergency fund, but that didn’t come to mind.
To get there, I decided to work hard at my job (1), work hard on projects outside of my job (2) and live frugally (3).
My financial habits were strict:
- My bosses once gave me a $5,000 bonus to buy a car. I bought a car for $1,800 which I sold back to the same guy for the same price a couple of years later. Regardless, my ambition and hard work were being noticed.
- Other than clothes, I owned a (used) mattress, a laptop, a pillow, a sleeping bag (no blanket) and a desk made out of milk crates. A newly married friend once came over. Seeing my place made his wife cry and an offer was made for me to move in with them. I didn’t.
- My only luxury was a gym membership, which needed to be walking distance from my place. It happened to be the only gym with only one-star reviews.
- I ate more rice and beans than any German man in the history of Los Angeles. I actually had a tab with the local food truck, supplying me with my $2 bean and cheese burritos. Those were my “treat” meals.
- I spent most nights and weekends working in a little coffee shop in Little Tokyo. There I started a myriad of side projects. I tried to sell ties, trips, flights, rooms, matchbox cars and dating site subscriptions. Most ideas failed but a couple paid off in spades. There were years when I made more on the side than in my day job. But most of all, I learned digital marketing which ultimately became the foundation of my career.
By the time I was 24, my net worth reached six figures. I had also tripled my annual income.
Those years went according to plan.
They were hard. Super hard.
But now almost sixteen years later, I can say that they ultimately set me up for life.
What I didn’t understand at the time was the power of compounding and how it applies to starting hard. By starting hard I was able to acquire assets, skills, and relationships that have been able to compound ever since. And they’ll continue to compound for many years to come. Having these experiences early on in my career allowed me to benefit from them for a much longer period of time and the impact of that compounding is way more powerful than I could have ever expected. Also, the impact these experiences have can be much more incremental as they have longer to compound. I don’t need to earn a bunch of money anymore, because what I earned early on has and is compounding. I don’t need to be gungho about my fitness anymore because I have been building on top of a solid foundation created in my early twenties. I don’t need to network, but rather just maintain the friendships I made early on.
So, long story short, start hard.
In your career.
With your money.
In the gym.
Because if you do, it’s easier for much longer.
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