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Money Mentors: Software Entrepreneur Ben Slivka On Investing, Financial Education


Ben Slivka, a software entrepreneur and trustee of Northwestern University, shares his money advice for starting out.

Ben Slivka (right), is a software entrepreneur and education philanthropist with ideas for how we can learn good habits and make the most of our money.

Note from David: Maria is Money Under 30’s new assistant editor. This is her first post.

I’ve always thought the best part of studying journalism is being able to ask any question I want. When I don’t have an answer, it’s great to be able to get an expert opinion, educate myself, and share what I’ve learned.

When it comes to personal finance, I definitely don’t have all the answers. But I do know a few places I can find them. And I’m excited to share my discoveries with you.

In a new series called “Money Mentors,” we at Money Under 30 will introduce you to men and women who exemplify the positive financial traits that we admire. They’re entrepreneurs, executives, parents, friends, and most importantly, financial mentors.

To kick it off, I’m pleased to introduce you to Ben Slivka.

If you’re reading this post on Internet Explorer, you can thank him for your browsing experience. He started its development at Microsoft in 1994 and saw it through its third version in 1996. (He calls that period of time  “an intense 22-month death march.”)

Slivka spent 14 years at working at Microsoft, beginning in 1985. When he left the company in 1999, he did a brief stint at Amazon. He is a member of Northwestern University’s board of trustees and a noted philanthropist.

I’m impressed by his commitment to Northwestern and mentoring young people, so I asked him a few questions about his (almost hard to fathom) financial success.

Maria: Was there a moment when you really felt like you were secure in your finances? What is a good marker of success for that?

Ben: If you’re living within your means and have zero debt, you’re in good shape. I got married when I was 21 and (my wife) Lisa was 19, and we were self-supported at that point. We got married in ‘82, I took a job with IBM … it was $24,000 a year, and we were paying for our living expenses, feeding ourselves, putting Lisa through school.

She had two more years of undergraduate school, on our own nickel. We took out some loans to finance her education, but we were able to pay all of those back. When we bought cars, we never took a loan out for those. The only debt we ever had was when we took a mortgage on a house. We were always trying to save a little money and not spend more than we earned … There was a period of time we had not much cash in the bank. … [but] by the time I was 25 I felt secure.

Maria: What’s your advice for people just starting out in their careers, who might be unsure of how to manage their finances?

Ben: The problem is, it doesn’t matter how much money you make or how much you have in the bank or what your investment portfolio is, if you take on debt you can get in trouble. Look at Michael Jackson. His net worth was negative despite his assets because he had so much liability.

You see people who want to keep up with the Joneses, get this fancy car and furniture. Whatever you’re making, don’t spend it all but save some money for yourself.

When we started Microsoft in ‘85, they encouraged you to do a 401(k). There was a matching thing … you could have up to six percent withheld, and Microsoft would match 50 percent.  So if you withheld the full six percent of your salary, Microsoft would match that with a further 3% of your salary. Separately, there was an employee stock purchase plan. That was a thing … you could take out a payroll deduction and there was an opportunity every six months to buy some shares, so that was [more] encouragement to save. We did both of those things. These are simple ideas. It’s not rocket science.

Maria: You’re interested in education and education reform. Do you think there’s any place for personal finance to be covered in schools?

Ben: You can teach all sorts of things at school, and it’s not clear that’s the most effective way to do things. Up until 150 years ago, we learned by doing.

The best way to establish these good financial habits is to have a job. To work and get an allowance, but ideally you’d be working as a young person and saving money and not just getting handed everything. It’s really the family and structure you set up there.

Our daughter gets $150 per month. She’s 16 now, and all her clothing, shoes, cosmetics, comes out of that. When she runs out, that’s it.

Living within your means is a habit [and] starting younger is better.

What do you think of Ben’s ideas? What would you like to ask a mentor in the future? Let us know what your thoughts are on our new series!

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About Maria LaMagna

Maria LaMagna is a recent graduate of Northwestern University where she served as editor-in-chief of the university’s award-winning daily newspaper and studied for five months in Argentina. Before joining Money Under 30, Maria worked as a reporter for CNN and the Indianapolis Business Journal. Follow Maria on Twitter @MCLaMagna.

Comments

  1. Really simple and down to earth advise, starting early, with good financial sense is the way to go. Parents and schools have a responsibility to educate younger minds to finances, and that is what Ben is doing with his daughter’s allowance, teaching her a budget and the value of money. Thank you for sharing.

  2. Welcome Maria! Great first post. Thanks for sharing Ben’s advice.

    Curious, does Ben’s daughter work? How did they arrive at $150/month for her?

  3. I definitely think we need to incorporate a personal finance class into high school senior classes. At that point, we are old enough to understand the basics of personal finance. It would be very beneficial to every one if there was a strong focus on student loan debt, how it works, and what it means after college when it’s time to pay it back. Unfortunate, most people go into debt blindly and then get an eye poping wake up call after graduation. Just seems to make sense to me.

    • Maria LaMagna says:

      Hi Drew!

      I went to a huge high school, and it did/does offer a few finance-related classes, including accounting (which was very popular).

      In some ways, I do wish I’d taken that, or a specific personal finance class. So I definitely think you make a good point.

      My only other thought is, what classes would you be giving up in that slot? Would it be better to learn personal finance from your parents like Ben suggests, and learn another type of elective at school?

      Either way, it’s worth the conversation. That was a great comment.

  4. Jenna: My daughter would love to work, but it’s very hard to find jobs here in suburban Seattle if you are 16 or under. We arrived at the $150/month figure by considering how much we were spending on these items for her over a several month period.

    Drew: The problem with a class is that it doesn’t really hit you in the gut. I have two older sons, and they also got allowances. Having that fixed income made them face choices and budget. Because if they spent it all and there were still 2 weeks left in the month, they were out of money and had no recourse. This approach of course requires the parents to have firm resolve!

    • Maria LaMagna says:

      Thanks for following up, Ben!

    • David Weliver says:

      “Hitting you in the gut” is a good way to put it.

      My dad always tried to tell me how to save and be mindful with money, but in the long-run, my parents provided what I needed and never gave me that “you’re on your own” approach. I had jobs even in high school, but spent the money on whatever I wanted. It wasn’t until I was out of college and on my own (and failing miserably at managing my money) that I got kicked in the gut, and eventually got straightened out. I will remember your approach in 11 years when my two-year old becomes a teenager!

  5. I also suggest getting MSFT options from the 90s.

  6. I’m saying you need both lessons at home and in school. My high school did not offer any personal finance classes, and I recall having 3 free periods my last semester senior year, so there was room for 1 more class. How many parents sit down and discuss student loans in detail with their kids, or beyond that are even informed themselves? I learned some from my parents, but where I really learned everything was working at bank in high school. I learned the structure and terms of loans and saw a huge number of examples of what successful people do and what unsuccessful people do.

    I think that structured education combine with support from home is the way to go.

  7. Great post! At 24, I’m just learning how to manage my money (slowly, but surely). I’m just entering the workforce right out of college and it’s challenging learning how to budget. I think it’s great if schools have the resources to educate students about student loans, budgeting, etc., however, the learning really doesn’t kick in for most until you HAVE to learn. My Dad was always there like an ATM machine but now that I’m on my own, I’m forced to learn how to deal with money the right way. I believe there’s a greater appreciation for financial education once you’re faced with financial obligations. I found Money Under 30 because I wanted to learn how to manage my money.

    I’m excited for the rest of this series! Thanks Maria!

    • Maria LaMagna says:

      Ha, I think other people can probably relate on the parent-as-an-ATM image. I’m glad you liked it, Val! There will definitely be more coming.

  8. Ben – Great first time job if you daughter likes to swim. Lifeguard! Good pay, life saving skills and great management learning. I was making ~$640/month working 20 hours/week!