The Control Your Cash 2012 Woman of the Year


(Not pictured: CYC Woman of the Year commemorative sash and scepter)

(Not pictured: CYC Woman of the Year commemorative sash and scepter)


Every year we honor someone who embodies the Control Your Cash spirit, and name that person our Man of the Year. To win, all you have to do is buy assets, sell liabilities; and most importantly, act as the primary determinant of where your money goes instead of complaining about how the world is stacked in somebody else’s favor. That describes fewer people than you’d think, despite our best efforts to change the world’s collective mindset. Previous Control Your Cash Men of the Year have included a presidential candidate, a guy whom we never met yet who managed to lead an interesting and productive life despite making little money, and a CYC acquaintance who refuses to spend money stupidly and take on unnecessary expenses.

With 2012 in the bag, we’re proud to announce that its honoree is our first Woman of the Year. And a personal finance blogger, although that’s just a coincidence.

It’s Paula Pant, who runs Afford Anything and whose attitude and acumen we’ve espoused multiple times on this site. More to the point, she’s a real estate investor whose cash is flowing at a large enough volume that a significant chunk of her income now derives from investments. Investments of her own creation, no less.

Standard, incorrect thinking maintains that anyone who succeeds in this rapacious capitalist society of ours either a) came from money or b) killed herself by working 17-hour days and never coming up for air. The first is at best a sufficient condition, not a necessary one. The second is a sucker’s game, which you instinctively know, whether you choose to acknowledge it or not.

Ms. Pant didn’t start off with gigantic privileges. She’s a 1st-generation American who grew up in a stable household of ordinary means, neither summering in the Hamptons nor panhandling for sustenance.

She didn’t even study corporate finance in college, nor neurosurgery, nor something else with a promise of immediate financial rewards upon graduation. Nor did she go to an Ivy League or other exclusive private college. She majored in sociology (of all things), at the University of Colorado. A school where most people major in weed, if you give credence to stereotypes.

We don’t know what kind of salary Paula draws, but she’s a freelance writer. Her direct income is probably closer to modest than it is to exorbitant. Yet she owns 3 rental properties, travels the world like she’s being chased by Interpol, and is still on the innocent side of 30. How is this possible, when the typical 20-something journalism graduate is

  • drowning in tens of thousands of dollars of student loans
  • often working retail, given the dubious long-term prospects for the business model of newspapers and magazines?

Short answer, Paula is a hopelessly original thinker. As proof of this, she wrote a post titled “If I Had $1 Million, I’d Go Into Debt” and wasn’t kidding. Most people are too dumb to draw a distinction between consumer debt (that monstrous VISA bill that you try to wish away the existence of) and smart leverage (borrowing money at x% so you can earn a return of x+y%, which is the only legitimate and lasting way for most of us to build wealth.) Paula is the exception.

She bought one of those houses at an 80% discount (not a typo). The house cost less than a new Ford F-150 without options, and while the house needed some cosmetic work, the effort she put into said work (her sweat, her contractor boyfriend’s sweat, the money she paid to some professionals) paid for itself several times over. And continues to, as her tenants are making her rich(er).

Last January, Ms. Pant announced that she was somewhat improbably going to invest every single penny she made in 2012. This wasn’t some character-building exercise, nor a New Year’s Resolution. It was a way to focus the “pain” of forgoing immediate luxuries in order to enjoy further and more pronounced pleasures. (Pleasures in the form of greater rental income, and ultimately greater self-determination. It also meant a year of deferring world travel, her passion.)

Wait, you mean you can invest your money obsessively and still enjoy life? Come on.

YES. What shameless self-promoter Tim Ferriss argues you can do in theory, Paula does in practice. And it doesn’t involve weighing your food to the nearest milligram, nor paying money up front to a fulfillment company and hoping for the best, nor hiring an Indian remote assistant to proofread your documents (which will invariably require another round of proofreading upon their return.)

Her priorities are specific, with flexible but detailed plans on how to get there. Contrast that with the directionlessness that most people exist under.

I hope I get a raise this quarter.
I really should ask for a raise.
Should I apply for another job? What if I don’t get it, then word gets around that I’m looking? Oh, I’ll be so screwed.
If I stay, they’ll match my 401(k). I couldn’t leave if I wanted to.
My landlady raised the rent again. So unfair. 

Look: most transactions in our society are mutually beneficial. Otherwise, they wouldn’t happen. For instance, no one likes paying rent, but it beats living under a bridge or with your parents. But fortunately (fortunately for the landed gentry, that is), there are plenty of people undisciplined enough that their very existence enriches the people who own things. And by “things”, we don’t necessarily mean high-rise apartment buildings or Class A shares of Berkshire Hathaway stock. A few single-detached rental properties in Atlanta will do.

Furthermore, it’s so easy to get to get to this position. All it takes is a tiny bit of motivation and again, discipline. Paula could have squandered paycheck after paycheck on unnecessarily expensive vacations and vehicles. Instead she travels largely on the cheap, sees no economic potential in $3000 leather car seats, and invests all the cash she has available. Not every investment turns to gold, of course, but it’s not that hard to minimize the potential risk. And as the saying goes, you miss 100% of the shots you don’t take.

When we talk about Paula’s modest background and stress that anyone with a brain can do what she’s done, we don’t mean to denigrate her nor her accomplishments. Far from it. Actually deciding to follow through on a plan, like Paula has done, is surprisingly difficult for many people to do. Most people, in fact. Better to lament one’s station in life than say, “I can do this, and will figure out how.” Paula Pant can, and did, and does. Leverage your assets into higher-valued ones, carry intelligent debt rather than stupid debt, and generate positive cash flow, and you could be a finalist for our 2013 Woman (or Man) of the Year.

2011 Man of the Year

This photo was taken 146,000 “Yes honey, I was wrong”s ago


Every year we choose an honoree who embodies the Control Your Cash principles. For instance, here’s last year’s. The award itself is nothing physical, just a commendation here on CYC. Winning doesn’t even guarantee you notoriety; the 2010 winner appears to have fallen off the face of the Earth. This year’s winner is erstwhile presidential candidate Herman Cain.

This is not an endorsement of his political candidacy. And the preceding sentence doesn’t mean that we reject his candidacy, either. Moot point, anyway. For the record, our guy is Ron Paul, the most principled candidate since Calvin Coolidge. But Paul’s story doesn’t illustrate our point as well as our Man of the Year’s does.

It’s an easy mindset to get into, that building wealth is restricted to the moneyed class, the bluebloods, the politicians and their scions, what the filthy people who appear to have finally removed themselves from Zucotti Park called “the 1%”. No, this is America. Believe it or not, complaining about The Man wasn’t always our national pastime.

We can agree that 130 years ago, being born into a poor family was a far greater obstacle than it is today. Let’s split the difference and look at whether being born into modest circumstances 65 years ago would result in a life of want and need.

Our previous Men of the Year have been relatively obscure; just regular folk who buy assets, sell liabilities, and enjoy the inevitable wealth that accrues. In 2011, class warfare became such an overriding theme of life in America that we had to look for a Man of the Year whose story proves that growing up modestly is neither a necessary nor a sufficient condition for staying that way. There are millions of people like that, but our winner was easy to find biographical information on.

Here’s a man who ran for the office of most powerful person in the world, and whose parents were a housekeeper and a barber/janitor. He grew up black in the 1940s and 1950s in Memphis and Atlanta, which is similar to growing up Jewish in the 2010s in Damascus and Aleppo.

Again, read what his parents did for a living. Their collars were bluer than Lake Tahoe. Young Herman studied hard in school, and applied to the University of Georgia. As a black man. In 1963. You’re not going to believe this, but they didn’t allow him in.

So Herman turned to a life of recreational drug use and folk songs. Just kidding, he attended historically black Morehouse College instead and earned a degree in women’s studies. Alright, more kidding. Women’s studies didn’t exist at the time. Math, on the other hand, did and always will. He majored in that, and followed it up with a master’s in computer science.

This didn’t guarantee him a life of riches, but it helped immensely. It almost certainly guaranteed him a job. Civilian ballistics analyst for the Navy, if that sounds like something worth aspiring to.

From there, you’re probably somewhat familiar with the story. But advancing from computer systems analyst to CEO of a major corporate subsidiary to director (and then chairman) of a regional Federal Reserve Bank was just gravy. What got Herman Cain the Control Your Cash Man of the Year award was his ability to make sound decisions that lesser people just refuse to make.

Yes, he bought some assets and sold some liabilities along the way, financial ones. But he applied the same principles to hugely important non-financial decisions, too. Living the right way (or not living stupidly) is a hell of a lot more crucial than remembering to rebalance your 401(k) with the recommended asset classes. Here’s an example.

Herman Cain’s family creation plan, in chronological order:

  1. Get married
  2. Have one kid
  3. Have another
  4. STOP.

There are some intermediate steps, e.g., look at your net worth and cash flow and determine if you can create another mouth to feed, but what we’ve given you there is the gist of it.

Your average poor person’s family creation plan, also in chronological order:

  1. Get pregnant/impregnate someone.
  2. Weigh having the kid versus sucking it out with a vacuum tube.
  3. Collect welfare either way.
  4. Get pregnant/impregnate someone again, not necessarily the person in Step 1.
  5. Repeat Step 4.
  6. Remain unmarried. Or get married, for no better reason than you’re already in too deep.
  7. Divorce. Somewhere along the way, introduce substances to assuage the self-inflicted pain.

Your average poor person’s education plan has fewer steps than the family creation plan, but they’re just as stupid. And none of them involve the hard sciences.

Public disclosure forms estimate Cain’s wealth at between $2.9 million and $6.6 million. If you grew up miles and decades from the nearest lynching and/or cross-burning, what’s your excuse for your net worth?

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Man of the Year 2010 update

He‘s gotten even smarter, which we didn’t think was possible.

Bob had 22 years left on a $148,000 mortgage at 6¼%. Knowing an opportunity when he saw it, Bob didn’t complain about how low interest rates are and how hard it is for banks to make a profit. Nor did he lament that his house had lost $115,000 from its inflated peak value (which, of course, is just a number on an appraiser’s calculator. Bob’s house gained value, albeit not very much, in one of the most brutal housing markets in America.)

He, and we, noticed how low 15-year mortgages had gotten. Bob refinanced, and next month will begin making payments on his new 15-year, 3¾% mortgage. He’ll save $200/month. But, there’s always a trade-off. In this case, it’s that he’ll now own his house free-and-clear 7 years earlier.

Wait – he pays less monthly, and repays the debt faster? Alright, maybe there is no trade-off.

Poor people, would you even have thought of this? Back away from tonight’s episode of Celebrity Disagreement and learn from the master.