As my regular readers know, I like to find fault in others, haha. Just kidding, I only like to find fault in useless data (got some sweet hate mail in response to that post… seriously…) or even more useless data. I’m otherwise pretty supportive, especially of people who think! You don’t have to agree with me (although it would make the world a better place). But if you show an ounce of thought and no sense of being a spoiled brat I’ll still respect you for having an opinion, even if it’s wrong… 
But I love when people take control of their finances no matter what the world looks like around them. I’m not sure whether it takes brains or … err… something lower…but following through with a plan while the news is telling you to stockpile guns and canned foods is something to respect.
For some cool examples of some bold moves made right when everyone else was panicking (see how I did that with the bold font for the word bold right there…) check out this slide show over at CNNMoney.com, which highlights nine people who took control over the last few years.
Let’s dig in (link is to each page in the slide show):
- Sold stock, paid off the house. This guy had $80,000 in company stock that he sold to pay off his mortgage. I know this took a lot of guts, but it is absolutely the right thing to do – even irresponsible not to, imo. Be really careful with company stock piling up. I would get it out as soon as you can and put it in index funds. Too much risk (you have both your income and your investments tied to one place – if it goes under you lose both your income and your nest egg, ya know..). Verdict: A+. I’d make this all…day…long (one reader will get that reference…(yes, I send subliminal messages to regular readers once I get to know you…creepy?))
- Bought a condo in cash. Love it. I dream of a paid-off mortgage. I’m not a big fan of condos, but if you’re going to do it, cash is king. Verdict: A-. Good move, but not a fan of condos.
- Became a landlord. Not as bold because it’s relatively conventional, but buying a place for a price that allows you to live for pennies a month or make a profit is pretty stylin’ on one condition – that you could afford the total costs of the place if you lost the tenant. If it weren’t your primary home, too, I wouldn’t be as conservative. But the rent should be gravy, imo, not the entire meal… Verdict: A-. Not a fan of FHA loans, but it looks like he was conservative enough with the cash flow numbers. I love multi-families.
- Tripled salary, maxed out savings. Hats off to finding a new job at triple your salary. Most people would just complain about their salary, right? The real brains come from maintaining a low standard of living and banking the difference. Why don’t more people do this?!?!? Verdict: A+. Keep your costs down, OK?
- Refinanced into a 15-year mortgage. For those of you unable to refinance have no idea how tempting it is to stick with a 30-year mortgage, especially with interest rates so low. These days a bunch of people are saving so much in interest that they end up paying less and shaving 5 or more years off of their mortgage. I’m all about the 15-year mortgage if at all possible. Verdict: A+. Took brains and … something lower … to make this move. It’s the right move, imo.
- Held onto my old Mustang. Doesn’t sound very tough until you learn that it was a 2003 with 150,000 miles on it and the alternative was buying a Lexus CT Hybrid. Now, now, I know hybrids are better for the environment and all. This blog is not about politics. It’s about money. The smart move was to stick with the clunker until he could better afford the hybrid. Don’t worry, I’m sure he’ll get one eventually. Verdict: A-. This was a very good move. I’d still sell the Mustang and buy a used Corolla or something, but can’t fault the guy.
- Resisted the urge to sell. This one’s my favorite so far. Sometimes the best move you can make is to do nothing and stay the course. Remember, if you planned correctly, your strategy was based on a long history of performance, which included ups and downs. So selling when things were down would be the exact opposite of what you should do. (If, on the other hand, you picked a bunch of single stocks that you saw on some blowhard’s late night cable TV show, you’re on your own!) Verdict: A. Great non-move.
- Focused on becoming debt free. Yay! These are getting good, right? It’s hard to resist the urge to pile up cash when the world is going nuts. But if your job is pretty secure and you got some debt, aggressively paying it all off may be the best move for you. Imagine having no payments other than your monthly consumption… pretty cool. Verdict: A. Awesome move to take control.
- Strengthened safety net. Oh man! The article was firing on all cylinders until they got to this guy. Even he started out great by plugging a few money leaks. But his second “smart move” was not very smart at all. It was luck, right? Sure it worked out, but the next time he gets a hunch he might not be that lucky. Plus, my guess is he wasn’t buying at the low either, but it’s not really clear. Verdict: C+. Sorry, but timing the market is not a good idea, even if it happens to work out once or twice. That’s luck, not brains.
Am I too tough a grader? I’d say overall these folks made some pretty great moves.
What’s the smartest thing you’ve done with money in the last few years? I’d say setting up auto-invest years ago and my “life insurance cash value” fund are the best moves I’ve made that were relatively new.
Incidentally, I’ve been aching to talk about my life insurance strategy and the rip-off whole life that I was being peddled for a while. Maybe I’ll do that soon. I got a detailed quote from a whole life broker and almost puked on my shoes when she tried to convince me that I was irresponsible for buying term and investing the difference. She actually didn’t believe me and called me a liar! Turns out I was lying. I was investing less than the difference and still doing better than her piece of junk policy… don’t get me started….
Until next time, put your credit card down and slowly step away from the mall!
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{ 6 comments… read them below or add one }
These are all great things to do!
Sounds like some wise financial moves, other than the last guy who got lucky. It reminds me that I should probably consider trying to sell my Mustang. With the amount I pay in insurance, it's probably not too smart to keep it. Luckily I don't need to drive it to work everyday. So I don't spend much on gas.
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I refinanced my mortgage (which had 28 more years) to a 15 year at only about $500 more per month (got a great interest rate). Bonus kicker is, I was already overpaying it by $500 every month to knock down the principal a bit. I am saving hundreds of thousands of dollars with this move, and it only cost me about $2000 on attorneys fees and other costs. Awesome.
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I could read stories like this all day. Tough, but great choices. I'm pretty impressed with these folks.
That's a good point, too, about the Mustang. I've fortunately never been a car guy (I drove a 1997 Geo Metro until 2009 when my won was born…) so I'm lucky not to have the "Mercedes Tug."
That's AWESOME Kooz! It's so tempting to see the lower payment for a 30-year and say "I can always pay extra." But keeping your actual payment w/ the extra the same and knocking off 13 years is pretty impressive, especially for a young family.