Following

The Goods
Financial Management
for the Young and Ambitious

Adam Goodman, MBA

Illustrated by Allyson Stone

Blue Pig Publishing, Toronto

Copyright © 2009 by Adam Robert Goodman

All rights reserved. No part of this publication may be reproduced in any form, or by any means,
electronic or mechanical, including photocopying, recording or any information storage and
retrieval system, without permission in writing from the publisher.

Care has been taken to trace ownership of copyright material contained in this book.
The Publishers will gladly receive any information that will enable them to rectify any reference
or credit line in subsequent editions.
Although the author has exhaustively researched all sources to ensure the accuracy
and completeness of the information contained in this book, we assume no responsibility for
errors, inaccuracies, omissions, or any inconsistency herein. Any slights of people, places, or
organizations are unintentional.
This publication contains opinions and ideas of the author. They are not presented to
provide a basis of action for any particular circumstances without consideration by a competent
professional. The author and publisher expressly disclaim any liability or loss, or risk, personal or
otherwise which is incurred as a consequence, direct or indirect of the use or application of the
contents of this book.

Published in 2009 by
Blue Pig Publishing
1210 Sheppard Ave E, Suite 203
Toronto, Canada
M2K 1E3

First printing December 2008

Canadian Cataloguing in Publication Data

Goodman, Adam Robert, 1979-

Following the goods : financial management for the young and
ambitious / Adam Robert Goodman ; editor, Hailey Eisen ; illustrator,
Allyson Stone.

Includes index.
ISBN 978-0-9811260-0-5

1. Finance, Personal. I. Eisen, Hailey, 1981- II. Title.

HG179.G66 2008 332.024 C2008-907996-5

ATTENTION CORPORATIONS, UNIVERSITIES, COLLEGES, AND PROFESSIONAL ORGANIZATIONS: Quantity

discounts are available on bulk purchases of this book for educational or gift purposes. Special
books or book excerpts can also be created to fit specific needs. For information, please contact
Blue Pig Publishing; sales@bluepigpublishing.com

Production Credits:
Editor: Hailey Eisen
Cover Design: Joe Donnelly Design.com

Printed in Canada
 Table of Contents

1. 28 Years Old and Broke .............................................................. 1

2. How Much Money Do You Really Make? ................................... 7
3. Do You Know Where Your Money Goes Each Month?............. 11
4. What it all Means ..................................................................... 17
5. The Future Cost of Life .............................................................. 21
6. What’s the Deal with Credit? ................................................... 31
7. How Interest Really Works ....................................................... 37
8. A Glossary of Interest Related Terms ...................................... 49
9. Is Credit Good or Bad? .............................................................. 51
10. Debit Cards ................................................................................ 59
11. What About Investing? ............................................................. 63
12. How to Invest Wisely................................................................ 67
13. Professional Designations and How to Tell Them Apart......... 71
14. How to Stay Current in Investing ............................................. 75
15. Tax ............................................................................................. 79
16. Retirement and Tax Free Savings ............................................ 83
17. Moving Out of the Basement .................................................. 87
18. Rules to Follow ......................................................................... 91
19. Now You’re on Your Own! ......................................................103

Appendix A ....................................................................................105
Appendix B ....................................................................................106
Appendix C .....................................................................................107

Order Following The Goods...........................................................109

 Chapter 1:
28 Years Old and Broke

It has taken me 28 years to realize the value of a dollar. When I

think about all the money I’ve wasted in my life, I finally realize
that if I had done things differently, I probably wouldn’t be living
in my mom’s basement right now, asking my parents to help me
lease a car. A sad tale, but it didn’t have to end up
this way.

My name is Adam, and my book will hopefully

help you understand the value of a dollar so you
don’t end up 28 and broke like me. This book will not
teach you how to calculate the compound annual growth rate
(otherwise known as CAGR) of an investment, or how to pick
stocks for your investment portfolio. Frankly, there are tons
of books out there on these subjects. Instead, this book will
teach you, through my life experiences, just how important
it is to get a grasp on basic money management principles
from a young age. If you are like me, no one has ever sat
you down and formally taught you how to manage your
money. Likewise, money management was never offered as
an elective in high school or university (a true shame).

But how can I teach you about money management if you don’t know anything
about me? For all you know we could have nothing in common. So, let me
begin by telling you a little bit about myself.

I grew up in a comfortable home with hard working parents who provided me

with whatever I wanted.

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 Chapter 1: 28 Years Old and Broke

During high school I was never forced to

get a job, but being the go-getter eldest
child I felt it was something I wanted to
do. Unfortunately, no one ever told me
what to do with all the money I earned
from birthday presents, allowance,
and work. My money always seemed
to disappear. I guess the problem with
growing up in a comfortable environment
is that you don’t learn what it is like to
be uncomfortable. I never learned the
value of a dollar because if I wanted
something, my parents would always
buy it for me. Sure, there were certain
items I couldn’t convince anyone to buy
— that Ferrari still eludes me — but for the most part, if I wanted it, I got it.

Ironically, my lack of understanding around money management had nothing to

do with my parents’ knowledge or profession. My dad is a successful accountant
and my mom has been involved in finance for as long as I can remember.
My parents just never taught me about the subject of money, nor did I think
to ask. I just assumed knowing what to do with money would come naturally;
I never thought that money management was a subject that could or should
be studied.

And so, life went on. I graduated from high school,

started my own business and went to university.
I was studying computers at the tail end of the
dot-com boom, and not only was I making a
considerable amount of money through my
business, but I also found a co-op job that paid
me the equivalent of $100,000 a year. Not too
shabby for a baggy-pant wearing 19-year-old.

Some of the money I earned went to pay for my

university tuition and living expenses. Paying
for school was something I chose to do rather
than being forced to do, but I’m glad I did it
because I learned the value of doing things for
myself. The rest of my money just seemed to
disappear into thin air. Ironically, even though I

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 Chapter 1: 28 Years Old and Broke

was independent during my undergrad years, I still never learned anything

about money management.

By the time I graduated I had no debt from university, but I had already owned
six cars, racked up some credit card debt, and didn’t have a single penny to my
name. I don’t know how much you know about owning cars, but whenever you
sell a car, you seem to lose money on it. Imagine selling six cars and wasting
all that money. In fact, I once lost $7,000 on the sale of one car, which I then
brilliantly rolled into a new car loan. In hindsight, selling that particular car was
probably one of the more stupid things I did. To be honest, the car was in great
shape and the only reason why I sold it was because I was bored with it.

A lot of my money was wasted on frivolous things and I was probably one of
the few university students living like a king. I ate steak three to four times a
week, I bought new clothes almost all the time, and I never hesitated before
buying anything I wanted, be it a DVD or new furniture.

By the time I had graduated from university, I owned in excess of 300 DVDs,
which works out to more than $6,000. Again — frivolity 1, Adam 0.

At that point in my life, I was still young and naïve. I thought that by the time
I graduated from university I would be making close to $200,000 a year; to be
fair, I was making a large sum of money while still in university and thought
things would only get better once I graduated. I’m not sure about you, but I
have never heard of anyone graduating from an undergraduate degree and
earning a starting salary of $200,000. I was caught up in the dot-com hype and,
like many others around the world, I thought that my salary would continue to
blossom. As history shows this was not the case; just Google “dot-com bust” to
find out about all of the money lost between the years 2000 and 2002.

After I graduated from university I decided to return home to Toronto to find a

job while my friends went backpacking across Europe. I was addicted to making
money and assumed that I would find a job with ease. Boy was I wrong! It took
me almost a year to find employment after I graduated (the economy was still
recovering from the dot-com bust) so I made some spare cash by working as a
bouncer. After a few months of throwing drunken frat boys out of bars, I finally
got my first “real” job and bought myself yet another car. This new job was a
contract that lasted for three months. Even though they asked me to stay on, I
left for a full-time job with benefits and traded in my three-month-old car for
yet another new car. I have this pattern with cars; I don’t seem to keep them
long and always seem to lose money. This is a pattern I’m still trying to break.

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 Chapter 1: 28 Years Old and Broke

While negotiating my salary I realized that I could only get the company to pay
me 60 percent of what I had been earning in university. Alarm bells should
have been going off in my mind, but sure enough, I went on thinking that my
financial situation would magically straighten itself out.

I worked at the same company for two years and moved into my dad’s house.
Life was good. I had a fancy car, a house where no one was ever around
(my dad was single and always out) and I bought whatever I wanted, when I
wanted it. For a 20-something, it was like living the dream.

But I was stagnating professionally. I was bored with the IT industry and felt
my career options were limited. I finally decided to go back to school to get
my MBA — something I had always wanted to do. At this point, I had only a
few thousand dollars in my bank account, a car loan for over $15,000 and a
brand new student loan for $60,000. Hey, no one ever said getting an MBA
was cheap.

My dad had become fed up with me as a roommate (a single father and son
living in a small house doesn’t provide for a lot of privacy) and offered to rent
me a condo while I pursued my MBA.

After a year and a half of intensive studying I learned a great deal about
business and the world; I met some amazing people and forged some life-long
relationships. Once again I graduated from school, but this time with serious
debt — $60,000 worth. During my MBA I learned that a whole world existed
outside of Toronto, Canada that I had yet
to explore.

Reflecting back on my past I realized

that I had lead an extremely sheltered
life and my entire world revolved around
Toronto. The concept of living outside of
my hometown was completely foreign to
me. So, I decided I had to see this world
I knew so little about. I sold everything I
owned and moved to China. I eventually
found work there, making about $2,000
a month, and after a year away decided
I would never pay off my debt earning
what I was abroad.

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 Chapter 1: 28 Years Old and Broke

Sure enough, I came crawling back to

Toronto. I had to move into my mom’s
basement because my dad was doing
his own thing and I couldn’t afford a
place of my own, nor did I want to
borrow any more money. I found a job
making less money than I did before my
MBA and was blessed by an additional
$10,000 in consumer debt that I racked
up during my year in China.

So there you have it — a glimpse into

my debt, my life, my adventures,
my crazy decisions and how my lack
of understanding the basic concepts
of money management escalated into this mess. I’m living at home for the
foreseeable future and have a nagging wish that I had taken the time to ask
someone what money management was all about.

Fortunately, as I sit here writing this book, I can say with confidence that
I’ve finally learned my lesson. Personal financial management is something
you have to learn, and hopefully this book will be your starting point. Begin
planning today so you too don’t end up 28, broke, and living in your moms’
basement — like me!

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