How I got (moderately) rich by investing in myself and my family

Fair warning: this post is all about decisions I made and why I made them. If you don’t want to hear about that, skip it.

I just agreed to purchase the home of my wife’s and my dreams in Portland, Maine. And pretty soon we will move there and own it, free and clear. This looks like a pretty good final chapter in my career and my life. I started to wonder, how did I get here? And are there lessons in that?

Don’t trust people who strike it rich

Consider 100 people who take a lot of risks in their careers. For 95 of them, those risks don’t pay off. For the remaining five, they do. Who do you think is blabbing about their brilliant decisions?

The five people who got lucky. They write the books and give the speeches. You never hear from the other 95.

This is, of course, survivor bias. It’s why you shouldn’t trust people who tell you to “take risks” and “follow your passion.” Of course, that works out sometimes. And it doesn’t work out a lot of the time. If your livelihood is at stake — especially if you have a family — then making high-risk career decisions may not be the best choice.

You also have to wonder about how much suffering comes along with those high-risk decisions.

I chose a different way to pursue success. At each juncture in my career, I did this:

• Strived to do something new and interesting that would stretch my abilities and teach me new skills.
• Attain a better situation that I was in — including an increase in compensation.
• Do work that was fulfilling.
• Plan carefully so that when I did take risks, I had the resources to recover if I failed.

That’s not a way to get filthy rich. But if you do it continuously and consistently, you’ll keep getting better off. And it can pay off financially in the long run.

What investing in yourself and your family looks like

Here are some decisions I made along the way, according to the principles above.

• I leave graduate school (MIT math Ph.D. program) to take a technical writing job at Software Arts, the company that created the first spreadsheet. That generates a steady income, but it is also far more rewarding emotionally than doing graduate work in an obscure mathematical subfield.
• I take a management/leadership role at that company, one that doesn’t come with a raise in pay. I thought it was worth it to learn about managing projects and people. (It was.)
• I am offered a job doing options valuation at a 40% pay increase. I turn it down. It seems sterile and boring.
• I join a startup called Javelin Software. That is my first management job. I find it challenging and rewarding. I receive stock, but it never pays off.
• I join a startup called Mathsoft. I become a VP and run the parts of the product organization that do not involve coding or marketing. It is a rewarding way to combine my math background and new responsibilities. While Mathsoft goes public, I bail before that happens and miss out on a $750,000 payday but get enough money to buy a house. My wife and I pick a house that nobody else wants which is more affordable.
• I join a startup called Course Technology. I get a chance to learn book creation and production, which is fascinating. The company eventually gets acquired; my stock is worth about $12K.
• I get bored with book production. I hire my own replacement and help start the company’s push into interactive learning materials (at the time, CD-ROM). I felt like this was a rewarding way to push forward rather than doing something that had become tedious.
• I get laid off. I join an edutainment CD-ROM company, pre-funding, for no salary. I tell my wife if it doesn’t pay off in six months, I’ll get another job. (It is enjoyable to work on, and never goes anywhere, but I learn a lot about interactive software.)
• I take a job as a technology analyst at Forrester Research. It seems like it would be fun to learn about new technologies and write and speak about them. It is.
• I start a family. My wife doesn’t have to work because my analyst job pays pretty well. We buy a bigger house.
• I keep trying new things at Forrester. I develop Technographics, which becomes the company’s survey business. I became an expert on the television industry. I am endlessly curious, and learning about these new industry trends is endlessly diverting.
• Forrester goes public. This is the first time I receive serious money for equity, and it isn’t one of the startups that were “supposed” to make me rich. Rather than invest in expensive things like fancy cars, I pay off my house. Now I don’t have to worry about making the mortgage.
• We decide to homeschool our kids. With my wife not working and the big house, that works out pretty well. (As I write this, one child has now graduated from college and has a job; the other is still in college.)
• I decide to write a book. I squirrel away a year’s salary so I can quit and take the risk without putting my family in jeopardy. The CEO of Forrester rejects my resignation and asks me to write a book for the company. I agree to do that, since even at a reduced salary it is less risky than going off on my own. The book, Groundswell, written with Charlene Li, becomes a bestseller. I get to give hundreds of speeches and write more books.
• I invent a new role helping analysts develop ideas at Forrester. I manage the development of the company’s intranet. I start a daily email for Forrester clients highlighting the best research of the day. These are all challenging and interesting tasks.
• After 20 years, I leave Forrester when an opportunity for severance arises. I get a year’s pay. My financial advisor says I can live on what I have saved, if I need to. I use the time to write a book on writing and start an editing and coaching business. That business is successful and generates a good living.
• I buy the house in Maine. Soon after, I’ll sell the house near Boston.

All along the way, I could have made different decisions that would have paid more. But instead, I chose decisions that would allow me to enjoy my work and keep learning. I hedged every risky decision. This is not the way to maximize wealth. But is the way to generate enough wealth to retire securely, to enjoy the trip, and to not put your future or your family at risk.

If you are making career decisions, are you trying to maximize your future opportunity? Are you leaping headlong or hedging your risks?

I’d be curious to know about your choices. What did you do, and how did it work out?