The Story of Frujinator

F

frujinator

Dryer sheet aficionado
Joined
Apr 2, 2006
Messages
43
I thought I'd start a new thread, for the folks who are interested in my story. Many people have called me a wonderkid/genius, but I don't accept that. I'm just a humble college student, but a very cautious saver.

I'm only 19 years old truly yes. I made my little fortune all in the California red-hot real estate boom. I became a loan officer in early 2005, and struck a few very good loan deals, and I made some nice bucks. Over 100K for 2005, and looks like over 100k for 2006.

That kind of income is very high for someone in my position because I don't own a home, family, or even married, so I get taxed at max rate. Thats one reason I opened a SEP-IRA and put $9500 into it, to pay less taxes.

I'm currently an Accounting student, and I want to become a CPA after I graduate with my Bachelors in Accounting. I've been in college since I was 17, so soon Ill be done hopefully. Real estate runs in cycles, and many people find themselves out of work now a days. I know that just when I started, it was and still is a temporary position for me. Its unstable and I will not rely on it.

I am a also a very big saver. I save nearly all my money, and try not incur any expenses. I guess I am ahead of people my age, because I did not abuse the money I received. On some months I would get paychecks around $10,000 - $25,000, and I put it all away in a savings account. I did not make the stupid mistake of buying a car or expensive toys.

So to date I'm set ok financially:

-$80,000 I saved from earnings, have loaned under a promissory note to a very well respected colleague who was in dire need of a quick hard money loan at 13.50% interest rate. I'm making a great return on that money now and will be doing that for about a year, so I'm beating inflation for now with that money :) However I don't what to do with the that money when I get it back in a few months. Savings accounts are lame, and I don't like CD's, but I might have to do that.

-$5600 in a ROTH IRA with VANGUARD - Target Retirement 2045

-$9500 in a SEP-IRA with VANGUARD - STAR Fund, but I want to invest 50% of that into maybe VEXMX or VUVLX and get more aggresive exposure.

-Virtually have no debt, only a few balances on some credit cards, maybe $2,000 or $3,000 that I forgot to payoff.

-Great credit history

Quick Run Down -

-$80,000 loaned at 13.50% rate earning monthly of $900.
-$15,000 in my checking
-$5,600 in my ROTH IRA
-$9,500 in my SEP-IRA
-$1,000 in Ameritrade Izone Account, do a little day trading every now and then with penny stocks.

I WISH I COULD OPEN TWO ROTH IRA's!!!


I'd say my interest in and background in Loans and Real Estate, studying in accounting, has really taught me to be financially conservative and not spend money on useless things.

I can tell you countless stories of family members, friends who felt that they made some great money a month or two, then go out and buy all this stupid stuff.

But I'm very happy to have found this forum. So many friendly folks on here. I look forward to making many new friends, and continue towards my goal of an early retiremnet with you guys! I am also a devout christian of the Pentecostal faith, and a pianist. I love learning about investing and financial info.!

Thanks to all, take care and God Bless!

-Frujinator
 
Amazing.

Couple observations, with respect. 

Hope the $80K loan works out OK.  Most of us have learned the hard way those can become a loss of principal, and friends.  Not a criticism at all ... every case is different.  But these are often very problematic.  Any collateral?  Documented?

Regarding becoming a CPA.  Think it over hard, especially your long-term goal.  I'm a CPA, and been a Chief Financial Officer for nearly 20 years.  Great income ... tough row to hoe.  Average tenure for a CFO is 28 months, and that is real.  CPA's work long hours, and the returns are not commensurate.  Not to mention all the unwelcome attention you can get from attorneys, the SEC, law enforcement ... ;)

If I had it to do all over again, I'd take a different course ... and my impression is that many CPA's feel the same way these days.

Consider going to work for a private equity group ("PEG") / venture capital firm.  Also lots of hours, but you get to participate in portfolio companies, get a seat on their Board, great variety in the work, potentially excellent returns on your time investment.  It's about equity, real equity ... not salary, or even bonus ... you certainly want a great salary and bonus ... but that's not the end of the rainbow.

At least take plenty of finance courses, even if you go for the CPA ... give yourself options ... hedge.  And keep plenty of rainy day money ... you will have rainy days, and the more ambitious the job ... the more likely, and the longer rainy day periods.

Best of luck ... you've had an interesting start.  Sure beats my course of pumping gas at age 17.  ;)
 
yeepers, I'm with Charles on the 80k loan. At the same time, I have a friend who loans seed money to colleagues who start businesses but don't have the credit history with even bigger profit margins. I'm thinking getting burned once will have him getting future loans vetoed by the Mrs.

The good news is, by starting so young, doing so well, and continuing to sock money away, even if you meet Ms. Right and get married at say, 25, and she convinces you to live more for today and sock away less, that nest egg will continue to compound and have regulary retirement taken care of. Nice job!
 
Wow charles, thank you for the reply. Would you mind exchaning emails with me? I'd like to stay in touch everyonce in a while if you don't mind.

Actually to be quite honest, at my current job I put in 10 - 11 hours some days. I know it takes real dedication, but the job stability is very attractive. I hope to get in to work for the state some day. Job stability is very imporant to me.

I'm taking some business courses, maybe to get a second degree too.

Thanks for the advice, much appreciated!
 
frujinator said:
I WISH I COULD OPEN TWO ROTH IRA's!!!
Click to expand...

Get married.

Unfortunately, that will probably not be as cost effective as you want.

Enjoy yourself.  Hopefully, you won't have a great story about how you almost became rich.
 
Well he did sign a promissory note, and agreed his home would be as collateral.

He's my uncle really, and he is very well established financially, runs his own business. Has about 6 homes, so I'm not too worried.
 
"Almost" means you've got a lot going right but a lot can still go wrong.  I can give you "old fart crap" about the need to be careful and being methodical.  Fortunately for you, most fortunes are made by wild dashes to glory.  You're young enough to lose it all which many in your situation do and still come back in a few weeks.

The best story I have is a guy who worked at a low level job at Enron.  He got a bunch of free Enron stock that went up to about $2.5 MM.  That was so much he got worried about what could go wrong.  He couldn't sell unless he left the company.  Everyone at Enron said to "be patient and it will be $5 MM soon."  He baled and went into ER.  Six months later Enron imploded.

I'm sure there's a lot of tech IPO million dollar babies out there that would have lost it all if they had stayed with the company.

BTW, nobody well connected financially borrows money at 13.5%. That's a rate for someone with poor credit no matter how many assets they appear to own.
 
I assume your uncle gave you a first or second deed of trust on the real estate ...

Your hours will be good practice if you become a CPA. 12+ hours / day are not uncommon, unless you're a staff accountant, and you don't sound like the type.
 
I'd appreciate the old-fart crap. Can you give it to me? :)

I hear what your saying absolutely right. I want to be careful and methodical.

All advice is appreciated
 
Charles said:
I assume your uncle gave you a first or second deed of trust on the real estate ...

Your hours will be good practice if you become a CPA. 12+ hours / day are not uncommon, unless you're a staff accountant, and you don't sound like the type.
Click to expand...

But 12+ hours is not bad, thats a lot of overtime! :) Ya I'm ready for the dedication. I know I'll get burned out, but thats what vacation/retiremtn is for :)
 
Charles said:
Amazing.

Couple observations, with respect.

Hope the $80K loan works out OK. Most of us have learned the hard way those can become a loss of principal, and friends. Not a criticism at all ... every case is different. But these are often very problematic. Any collateral? Documented?

Regarding becoming a CPA. Think it over hard, especially your long-term goal. I'm a CPA, and been a Chief Financial Officer for nearly 20 years. Great income ... tough row to hoe. Average tenure for a CFO is 28 months, and that is real. CPA's work long hours, and the returns are not commensurate. Not to mention all the unwelcome attention you can get from attorneys, the SEC, law enforcement ... ;)

If I had it to do all over again, I'd take a different course ... and my impression is that many CPA's feel the same way these days.

Consider going to work for a private equity group ("PEG") / venture capital firm. Also lots of hours, but you get to participate in portfolio companies, get a seat on their Board, great variety in the work, potentially excellent returns on your time investment. It's about equity, real equity ... not salary, or even bonus ... you certainly want a great salary and bonus ... but that's not the end of the rainbow.

At least take plenty of finance courses, even if you go for the CPA ... give yourself options ... hedge. And keep plenty of rainy day money ... you will have rainy days, and the more ambitious the job ... the more likely, and the longer rainy day periods.

Best of luck ... you've had an interesting start. Sure beats my course of pumping gas at age 17. ;)
Click to expand...

Can you explain the tough row to hoe:confused: Out of curiosity, is CFO 6 or 7 seven figures? I don't mind putting in 15 hours for that kind of dough :)
 
CFO's will tend to earn $150K to $250K in most companies, plus stock options / equity (that are too often worth zero).  Yes, it is good money.  Also expect 6 months down time every 2 to 4 years, and lots of aggravation.  It is not steady work, it is very high pressure, it is interesting, but ... you can find more steady work, and same hours with higher returns via a PEG.  Being a CPA has changed a lot in the last decade, especially with Sarbanes Oxley and increased global business competition.

15 hours a day for 20 years is a lot of brain damage, and not much family / life time.  When you finally have a family to support, the net comp you can put into savings will be a bit less than you expect.

It's not what you earn, it's what you keep ... and the quality of life along the way.  None of it is worth a dam* if you're not having fun.  You'll find a great number of very wise folks here who have come from many, many different walks of life.  They are wise in life, and investing, and have built secure and happy lives for their families and themselves.  Consider a different thread in the Young Dreamers section as you brainstorm your career choices. 

And always hedge ... you never, ever really know what is coming around the bend.  Expect to be surprised, but like a Boy Scout ... be prepared.  With investments, cash, and education / experience.

Best of luck.
 
A law that dramatically increased corporate costs to do accounting that was intended to cut down on funny business, but while doing plenty of the former, does little of the latter.

It kept Ballmers kids from getting an xbox360 last christmas. I'm sure he managed to scarf one up off of ebay with .0002% of his weekly paycheck. Or get someone to hand him a box in the parking lot.
 
How did it keep ballmers kids from getting an Xbox360?

So it's a law, not a company?
 
What about Ballmers kids not getting an Xbox? Whats that all about?
 
Ok sorry still lost and having a blonde moment.

Why would he have to hold it between his knees? :confused:
 
He means that it would have been illegal for Ballmer to sneak one out and not have it show up on the books. The law, in theory, is supposed to prevent things like Enron.

SOX is a real big deal and creates lots of headaches even for those of us not in the finance world. As a software engineer, I deal with it almost daily.
 
Thanks for the info.

Interesting, how do you deal with it as a software engineer specifically if you are not an accountant:confused:
 
Hee...This reminds me of why my husband was more interested in me than in the pretty younger things he was also dating at the time. I knew what Jack Nicholson's waitress was supposed to hold between her knees--and why.
 
Nicholson: I'd like a plain omelette, no potatoes, tomatoes instead, a cup of coffee, and wheat toast.
Waitress: (She points to the menu) No substitutions.
Nicholson: What do you mean? You don't have any tomatoes?
Waitress: Only what's on the menu. You can have a number two - a plain omelette. It comes with cottage fries and rolls.
Nicholson: Yeah, I know what it comes with. But it's not what I want.
Waitress: Well, I'll come back when you make up your mind.
Nicholson: Wait a minute. I have made up my mind. I'd like a plain omelette, no potatoes on the plate, a cup of coffee, and a side order of wheat toast.
Waitress: I'm sorry, we don't have any side orders of toast...an English muffin or a coffee roll.
Nicholson: What do you mean you don't make side orders of toast? You make sandwiches, don't you?
Waitress: Would you like to talk to the manager?
Nicholson: ...You've got bread and a toaster of some kind?
Waitress: I don't make the rules.
Nicholson: OK, I'll make it as easy for you as I can. I'd like an omelette, plain, and a chicken salad sandwich on wheat toast, no mayonnaise, no butter, no lettuce. And a cup of coffee.
Waitress: A number two, chicken sal san, hold the butter, the lettuce and the mayonnaise. And a cup of coffee. Anything else?
Nicholson: Yeah. Now all you have to do is hold the chicken, bring me the toast, give me a check for the chicken salad sandwich, and you haven't broken any rules.
Waitress (spitefully): You want me to hold the chicken, huh?
Nicholson: I want you to hold it between your knees.
Waitress (turning and telling him to look at the sign that says, "No Substitutions") Do you see that sign, sir? Yes, you'll all have to leave. I'm not taking any more of your smartness and sarcasm.
Nicholson: You see this sign? (He sweeps all the water glasses and menus off the table.)
 
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