HALF A MILLIONAIRE

A farmer lost a white mare, so he put on a sad face wherever he went. His neighbors comforted him with nice comments when he complained about his bad luck. A few months passed by, and the man seemed to have forgotten about his misfortune. Amazingly, one morning, while feeding his cattle, he heard horses neighing. He quickly ran to the front gate, and his white mare was standing next to a black stallion. Apparently, the lost horse had brought home a boyfriend. The farmer felt blessed, so he shared his fortune with his neighbors. Some were happy for him, but a few of them were jealous. His son loved the black stallion and begged him for it. The happy father gave his only son the black stallion and instructed him to take good care of the animal. One afternoon, neighbors knocked on the farmer’s door and told him that his son had broken a leg because he fell off the black stallion. The farmer became sad and started to complain about the misfortune that the black stallion had brought to his family. A few years later, a war broke out in the region, and the farmer’s son was exempt from the draft because he had a broken leg. The farmer was joyful, so he shared the good news to everyone.

The above story teaches us a few financial lessons. For example, when one invests in the stock market, one must have the determination to cut losses and move on. Learn from mistakes, but don’t dwell on them. Do not complain about one’s misfortune, but do something to change the situation. Do not tell your neighbors everything about your life because some can become jealous.

Personally, I once acted like the farmer. It was raining cats and dogs, and I decided to drive home after a long day because I did not live very far from work. Unfortunately, my car dipped in a pool of water on the road, and the engine was dead. I quickly escaped as the water rushed in from the engine compartment. It was dark, and I was soaked. I spent a few hours working with Geico to report the claim and to direct him to where he should tow my brand-new car. I was very angry, so I cursed at my stupidity for leaving work in the rain. I blamed every single drop of rain in the sky. Financially, I knew I was in trouble because I still owed money on the car. A month later, the insurance company gave me a check for about $10,000. It was a total loss. I had to finance $24,000 to buy the car in the beginning. I had sent in my car payments for more than two years, so I owed about $12,000. The estimated value of my car at the moment of the accident was about $22,000 because the traveled milage was about 30,000 miles. I knew that I had lost money, but the situation was not so bad. I told the sky that I was sorry for having pointed “the finger” at it. I had to find a way to take advantage of the situation. What should I do with the money?

I spent several days contemplating the problem. I decided that I would not buy an expensive car, and my first choice was Honda Civic because it would burn less gas and was known for durability. I went for a brand-new Civic because a used one was only a couple of thousands cheaper. I paid about $14,000 for it because I bought it from an online fleet. I financed the entire amount at 3%. For my previous car, I had to pay $450 per month, but for the new one my monthly payment was just above $300. I saved about $150 per month, and I had a vehicle to move around. I was elated.

I did think about using the entire ten thousand dollars to pay for the new car, but I felt that I needed to invest it in something. And, I did. I used it as a downpayment for my first rental property. I bought a small, but brand-new house located in an expanding city where there are two large universities and new business developments. It generates about $200 per month when it is occupied. However, because the renting market has become very competitive, I am just making even in the past several years. Although it brings in $2400 per year when rented out, a few months of vacancy will drain all of the profit. My plan is to hold on to it for about ten years, and then I will sell it. Sometimes, I thought if I had made a mistake by investing in real estate when at the time I did not know much about the industry. I have learned so much since then, but this current financial crisis has taught me the most valuable lesson of all, “don’t be too greedy”. I felt lucky because I bought the house in an area where the housing market had bottomed. The price could not go lower than what I paid for.

Regardless, I feel that I have become a smarter investor, who researches before investing. I feel that I am able to take any monetary loss because I have found the source of happiness, which is hidden within life itself. We all carry boulders of burden in life. The secret is to identify and to let go, and life will become more simple and beautiful. When one is truly happy, a million or half-a-million, it does not matter anymore. For the game at hand, my target is $500,000.