Profiles of Badass Investors – Key

This is the second in an ongoing series about badass investors. Here are the previous entries in this series:

Introduction – Badass Investors

Badass Investor 1 – CC

There are many ways to be a badass. For some people this means making lots of money. For others this means earning market-beating returns over a long period of time. And for others, such as today’s badass, it means a focus on frugality and a high savings rate.

Badass Investor #2 – “Key”

Key, as she’s asked to be called, is a true badass. At just 25 years old she’s already adopted the personal finance best practices that most people aspire to but few people actually achieve. She’s definitely further along on her path to financial independence than I was at 25 years old.

Key has only been working for 3 years, but in that time she’s already achieved a net worth of $74k. IN JUST 3 YEARS she has a net worth equal to her current salary.

Over the last month or so I’ve traded emails with Key to learn more about her and how she’s managed to get such a great financial start.

Lesson 1 – Education matters

Perhaps unsurprisingly, this is the same lesson 1 that we found with CC (the first Badass Investor). The simple fact is that education is strongly correlated with wealth, happiness, and income.

The problem is that an education isn’t free. It requires an investment of both time and money. Through hard work and proper planning, Key was able to get her education completely free.

She graduated from Merrimack College in 2014 with a degree in Business Management.  Key attended on a full athletic/academic scholarship (softball). This scholarship had significant value – the total cost of attending Merrimack in 2017 is approximately $53k. The scholarships allowed Key to pay nothing get an education that would have cost $212k over 4 years.

She then joined BAE Systems as apart of their Finance Leadership Development Program (FLDP). Key learned that BAE would pay the majority of the costs for a Master’s degree of Key’s choice. Without hesitation, she went back to Merrimack College to begin what should have been a two-year Master’s of Accounting program. After a year of working 40+ hours a week and taking classes full-time at night she graduated with distinction in May of 2015 and was chosen by her peers to give the commencement speech. The funding from Merrimack combined with some additional scholarships from Merrimack allowed Key to pay nothing for her Master’s degree.

In 2017 she changed companies to work for Waters Corporation (also in Boston). She’s now planning to begin studying to obtain a professional certification to become a Certified Internal Auditor. Key expects this additional certification to result in higher compensation and faster career growth.

From Key:

I plan to continue learning forever, either by obtaining different certifications or obtaining degrees/taking courses. I think is so important to never stay complacent and to show your employer constant growth.

How has this education impacted her earning ability? Here’s Key’s salary since she graduated (rounded to nearest $1,000):

2014 – $54,000
2015 – $56,000
2016 – $65,000 (+ $5,000 signing bonus)
2017 – $74,000
$54k a solid starting salary, and Key has managed to grow her income at a compounded 11% rate over the 3 years since she graduated. Her focus on education no doubt had a lot to do with that.
It’s also important to note that even though Key was able to get her education at no financial cost, she still had to make a significant investment of time to get her degrees.
Successful people realize the value of both formal and informal education and make investments of time and money accordingly.

Lesson 2 – You can’t overstate the importance of a high savings rate

Becoming wealthy is pretty simple if you save and invest a large portion of your income. Of course, in order to save money the first thing you have to do is not spend it. Key has mastered this.

From Key:

My worst nightmare is ‘lifestyle creep’. I read about this too often and don’t want this to happen to me.

Not only does Key understand the concept of lifestyle creep, she’s actively working to combat it. What is her current spending level?

For the past 3.5 years (July, 2013 – Jan, 2017), I have spent on average $21K/year. I place all spending on credit cards to make this easy to track. My big categories are travel, and restaurants/dining. In my mind, this is quite high, so I have started to dial back on travel. This is another reason I have learned to cook various cuisines so I can save money by limiting my going out purchases.

$21k/year is just $1,750/month. That’s already pretty low. But this year Key decided she wanted to lower her expenses even further.

By moving home with my parents a few years ago it has been easy.

I lived on my own/others from 18 years old – 23 years old. My rent was maybe about $1,400 all in split between my roommate and me ($700/month for each of us).

Now, I am back home with my parents. I have gotten more serious with wanting to purchase a multi-family property. Renting was hindering my savings ability. I plan to be home for another year and a half or so.

Currently, the biggest expense I have is my parents cable bill, I pay one bill a month as well as help them with an additional payment for their credit card debt, for the free rent. I strongly am against paying for traditional cable package personally, but it’s free rent so, it is a little over $220 a month! Honestly, who needs 200+ channels and HD?!

These efforts have paid off for Key. She’s managed to lower her expenses from $21k/year last year to just $11.5k this year.

Here are Key’s actual expenses before and after moving in with her parents:

Before moving home (per month):
Rent / electric / internet package = $710
Gas = $200-$275 going to and from work, school and various road trips (average)
Grocery = $150
Cell phone = $90* my portion of family plan
Car = $220
Car insurance = $134
Travel (includes going out to dinner/drinks, explorations, airfare/hotel/rental cars, etc) = $225 *
Total = ~$1,700/month
After moving home (per month): 
Rent = $0
Cell Phone = $67
Gas = $80
Car = $306
Car Insurance = $103
Cable/Internet/Phone Bill = $220
Parents credit card = $145
Allowance = $ 45 (utilizing Groupon and other sites, I can find some great activities or just hang out with friends)
Total = $966/month
Of course, not all of us can (or want to) live with our parents.  But in this case, moving home is a win-win for Key and her parents – Key saves on rent and her parents get additional money to help them with their debt. The lesson here is that it’s possible to save a lot of money if you’re willing to be creative. And in this case, there’s really very little sacrifice being made.

But saving money isn’t just about sacrifices. Sometimes it’s as easy as just asking.

I actually attempt each year to reduce my recurring expenses. I sit down and will call my cell phone provider, car insurance, etc. to see if I can get an breaks. Worst they can say is no, but I always at least ask. I also call my credit card companies if I want to take a trip to see if I can get 0% APR for x months so I don’t have to drop a whole bunch of cash all up front. I can spread it for x number of months.

I’ve never done any of these things but they are GREAT ideas. It probably takes 1-2 hours per year to call your credit card company, cable/Internet provider, cell phone service, and any other recurring bills to see if they can reduce your costs in some way.

Key reduced her cell phone bill by getting off the family plan (which had data restrictions that her family always exceeded and had to pay for) and is on a single unlimited plan so she knows exactly what her cell phone bill will be each month.

What’s the result of all of this? Key and I did some simple math. She currently makes $74k/year. Yearly living expenses are around $11.5k. She maxes out her 401k ($18,000/year) as well as her traditional IRA ($5,500/year). After subtracting out ESSP, dental, and FSA, and taxes she will actually take home $33,750. Living expenses are $11.5k, which leaves $22,250 in additional cash flow.

Total savings = 401k + IRA + cash flow = $18k + $5.5k + $22.5k = $46,000

Total savings rate = $46,000/$74,000 = 62% of GROSS income

Saving 62% of your gross income and resisting lifestyle inflation – THAT is how you get rich.

Lesson 3 – Have a plan for your investments


What does Key do with that massive savings rate?

She saves and invests.

Her goal? Total net worth of $10M by the time she retires.

Is that a reasonable goal? To find out, Key and I worked through some numbers together.

First we calculated her total retirement savings (not including her extra cash flow, which might go towards a real estate purchase soon). Her company 401k matches dollar for dollar up to 6% of Key’s salary. This makes her total retirement savings per year $18K (401k) + $5.5K (IRA) + $4.44K (401k company match) = $27,940. To make things simpler we’ll round this off to $28k/year.

Here are ways that Key can hit $10M using different assumptions, starting with her $72K current net worth and $28k/year savings:

  • Save $28k/year at an average 8%/year return. She’ll have $10.3M when she retires at 66.
  • Save $28k/year, earn 10%/year (instead of 8%), and hit $10.6M at 60
  • Save $28k/year, increase her savings by 3% each year (as she receives raises), earn 8%, and hit $10M at 62

Of the 3 scenarios, Key liked the third one the best. She said she likes the pressure of saving 3% more each year. And given her 11% average annual increase in salary over the last 3 years she should easily be able to increase her savings rate by 3% each year.

Key is doing a great job maximizing her tax savings through every tax deferred vehicle available. She started by investing in both a Roth 401k and a Roth IRA but recently switched to a traditional 401k and traditional IRA. Why? Well, in her words, “why pay taxes if you don’t have to?”.

Asset allocation

Here’s her current asset allocation for her various tax-deferred accounts:

  • Traditional IRA: 75% domestic stock / 16% foreign stock / 9% cash
  • Roth IRA: 89% domestic stock / 11% foreign stock
  • Rollover IRA: 95% domestic stock / 5% foreign stock. The domestic stocks are dividend stocks. These are all conservative, blue-chip, large-cap companies.
  • 401K: 40% VTIAX (total stock market) / 40% FSEVX (mid cap blend) / 20% company stock

This is solid asset allocation for a 25-year old. Astute readers will note that she has no bond allocation, and I think this is fine. I have virtually no bond allocation and I’m 16 years older than Key. Here’s my thinking – why lock up your money at today’s ridiculously low interest rates? You might as well hold cash so you can jump on future opportunities when they arise.

In addition to the above, Key has a $12k emergency fund. Given her low spending, this is a full years worth of living expenses. This is a nice conservative counterbalance to her moderately aggressive asset allocation.

Real estate

Key does not plan on living with her parents forever. Her plan is to live with her parents for another 12-18 months, then purchase a duplex. She’d like to live on one side and rent out the other. Given that she lives in the Boston area, this is no small feat. Her plan is look for a place on the outskirts of Boston near one of the state universities. This should provide her with a ready source of tenants, and living next to the rental should reduce the risk of renting to college students.

Her current plan is to buy the duplex with a 15-year mortgage, and after a decade or so use accumulated equity in the property to purchase additional properties. Key estimates that she should buy a fixer-upper duplex for $250k, invest $50k in repairs/improvements, and rent half the duplex for ~$2,100/month.

Although early in her career, Key has already put substantial thought into how to manage her investments.

Lesson 4 – Find ways to maximize income

Key has done a great job investing in herself. She went to school full-time to get a Bachelor’s degree and got a great job out of college. She then went to school at nights and weekends to get a Master’s degree, which allowed her to find an even better job.

She’s not planning on stopping there. After all, to hit her goal of a net worth of $10M by the time she’s 62 years old she needs to find a way to continue growing her income by at least 3%/year. Here’s her plan:

I see myself rising through the corporate ladder, as I obtain more experience on both my role and how we operate. I will obtain 2 professional certifications and will always either do personal development courses and/or webinars on industry annually. I don’t plan on stopping learning. In 10 years, I hope to be in a managerial role making over 6 figures from work. I make over $70K now so I believe this to be a realistic goal as long as I keep showing my worth, and growing. I welcome any and all feedback both positive and especially negative from work to make sure I am helping my boss achieve her (annual) goals and achieve my own goals.

It’s easy to get complacent, especially once you’re in a job making more money than you’ve ever made before. For Key, having a big audacious goal helps keep her focused on growing and improving. She is always looking to maximize her income.

Are you doing everything you can to maximize your income? I find that in the personal finance community there’s almost a fetishization of the idea of “side hustles”. Sure, it’s always good to have multiple income streams. But the reality is that you’re almost certainly better off investing additional time in your primary job/career than in creating a “side hustle”.


Because there’s only so much money you can make from side hustles. That’s why they are side hustles and not careers. Yes, you can earn a few bucks pet sitting or selling things on eBay, but to really move the needle you need to find a way to grow your primary source of income much faster than inflation. This means finding way to acquire deep expertise in one or more areas, then finding a job that allows you to reap the rewards from your expertise and productivity.

The big difference between a side-hustle and a career is that a side-hustle is usually something where expertise is neither needed nor rewarded. For example, let’s say you’re a pet sitter and you make $20/day to walk and feed somebody’s dog. Now let’s say you decide to become an expert in pet sitting. You read about animal psychology. You learn about optimal feeding and exercise schedules for animals of every kind. You even amass 10 years of experience doing nothing but pet sitting.

How much money do you think you can charge as a pet sitter? $25/day?

Compare that to an accountant. Let’s say the average accountant makes $75k/year. You decide to become an expert in accounting. You get a Masters in Accounting. You attend additional training classes on IRS auditing techniques, read Treasury bulletins, and read a few books a month on accounting techniques. After 10 years you’re recognized as an expert who can solve the toughest accounting problems. How much do you think you could charge for your services? $200k/year? $500k/year?

If you want to grow your income you need to invest time and effort into becoming awesome at your career. Key understands this. It’s why she’s pursued a Master’s degree to increase her earning potential. It’s why she’s also looking at working towards additional certifications to further her career.

Side hustles are fine, but never let a side hustle distract you from maximizing your career.

Lesson 5 – Don’t be afraid to spend money on things that are important to you

When you see that Key is spending less than $1,000/month you probably assume she spends her time sitting home alone, reading library books by candlelight to save a few dollars. In fact, Key is not against spending money on the things that are important to her. For Key, this means travel.

I had every other Friday off at BAE, I made use of that by travelling. I hadn’t really seen anything outside of Massachusetts before so I went to Las Vegas, New Orleans, Louisville, Kansas City, Florida, Washington DC, Virginia practically anywhere just to see stuff.

Key pays for some of these adventures with a bit of travel hacking:

I have researched and utilized credit card hacking and have paid for several of my adventures for little next to nothing.

Key’s choice of where to live helps with her passion for travel.

I love to travel, Boston is great for that, many options without as many layovers as you most likely would face in a heartland state.

She also loves to cook. This is a great hobby for frugal people, as it can enable you to eat well and not spend a lot of money. Key’s best dishes are fish & chips and pan seared salmon with rosemary and garlic served with veggie succotash.

Saving and investing a large portion of your income over a long period of time is impossible if you’re not able to enjoy yourself along the way. Getting rich is a marathon, not a sprint, and you can’t stay on track for decades if you’re in a constant state of deprivation.

Travel can be expensive, but Key has made sacrifices in other areas to allow her to travel and still save a significant portion of her salary.

Lesson 6 – Have a mentor

When Key was growing up her family didn’t have a lot of money.

For as long as I can possibly remember, my parents struggled with money. Struggled in the sense that there was never anything left over. We always had a house, food and clothing but there was nothing extra. I can vividly remember my mother sitting at the table for hours after getting paid, going through and paying bills.

My family was not going to be able to afford college, I knew this. So, I made sure I learned as much as I could from various coaches and even my competitors. I have no one more to thank for my free education than my family.

Key’s parents might have struggled with money, but they wanted to make sure that she wouldn’t.

My dad and brother always told me the importance of saving as early as I could. I opened my first IRA when I was a sophomore in college. I had an internship in Arizona and saved as much as I could. The people at the bank were very confused about why I wanted an IRA at 19. That’s how I knew it was the right thing to do. Do the opposite of what normal people do.

But the person who’s had the biggest impact on Key’s financial life is her brother.

I do have a brother that is ~14 years older than I am. He is an amazing man and I absolutely idolize him and his wife (dating for as long as I can remember). I believe my brother was the one that signed me up for all of my sports. My dad, brother and sister-in-law never missed a game from high school through college.

My brother co-signed for my first car when I was a junior in college. He went over why credit is so important and explained that if I am not responsible I could also ruin his. With that in mind, that was an easy decision. Pay my bills on time, and if I can’t afford it don’t buy it.

When you read biographies of successful people you’ll find that they’ve almost always had a role model and mentor who’s helped them along the way. Learning from your mistakes is great, but learning from other people’s mistakes is a more efficient.

A mentor can take many forms. Some people have many mentors, others have a single mentor that they learn from and work with for many years. And sometimes, like in my case, a mentor can be very informal. In fact, my mentor doesn’t even know he’s been a mentor to me. I met him a few years into my current job. He is somebody I really admired – he was excellent at his job and exuded confidence and competence. I watched what he did and how he did it. I occasionally asked questions about why he did things in certain ways. Emulating and learning from him made a huge difference in my career.

Do you have a mentor? If not, why not?

Key’s final pieces of advice:

I asked Key if she had any final advice for somebody just starting in their career. Here are her 3 suggestions:

Learn about investing fundamentals – how to read a stock chart, how to read a 10K (annual report) so you understand the business and how it deploys, invests and finances its cash.

Learn about tax, what AGI is, how to reduce it, etc.

Credit card/bank account hacking, explore places, experience different cultures/people/food. (Know your credit score and use auto pay to pay bills in full)



The reason I am doing the Profiles of Badass Investors series is because I’m always looking to learn from other people.

The more I learn about other successful people the more commonalities I find in the way they think and act. They tend to:

  • Recognize the value of education and continuous learning
  • Save much more than the 10% of salary that’s recommend by most “experts”
  • Have a plan for how to invest the money they save
  • Maximize their income by working hard and constantly finding ways to make their labor more valuable
  • Be unafraid to spend money on things they value
  • Have a mentor who can help with accelerate the learning process and avoid mistakes.

How many of these traits do you have?

Do you find the “Profiles of Badass Investors” series interesting? Do you know somebody who might make a good candidate for the next installment of this series?


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