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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