Living the dream: you can do extraordinary things with ordinary amounts of money

Kiplinger's Personal Finance Magazine, Sept, 1998 by Robert Frick, Ed Henry, Kimberly Lankford

You can do extraordinary things with ordinary amounts of money.

MAYBE IT'S A CALL FROM A SECOND COUSIN WHO'S quit his job at the post office to chase his dream at Le Cordon Bleu Ecole de Cuisine, in Paris. Or you read about some couple who worked as janitors all their lives and left $5 million to a local college. Maybe a guy at work announces he's sending his daughter to Harvard--with out a scholarship. Or reading The Millionaire Next Door makes you start to wonder about your neighbors.

The scenarios vary, but the same question springs to mind: How in the heck did they do it? How did these seemingly ordinary people accomplish such amazing teats?

They dared to dream a big dream, that's how. On the following pages you'll read about five who did it. They maintained their focus on a goal, refusing to allow distractions to divert their time, effort and money from accomplishing it. That may sound simple, but for many people, aligning values with spending and investing habits isn't simple at all.

Distinguishing lip service to a goal from how you actually spend your money is essential, says financial planner Constance Barber, a former psychologist in Needham, Mass. She recalls a woman who declared that she desperately wanted to own a house but was dropping $1,900 a month on clothes, vacations and hairdos. A cash-flow analysis was the slap of financial reality she needed to start saving $1,200 a month for a down payment. She is now shopping for a home in the $200,000 range.

The final ingredient is something more intangible--call it determination, maybe even grit. The stories here are peppered with people who have the ability to weather hard times, sometimes over long periods.

INTO THE WEST

Lisa Wax's staff meetings are offen held on a boat gliding on Prince William Sound. Sometimes they're held on a pristine mountainside, alter which everyone skis back to the "office"--the lodge and restaurant Wax owns 40 miles north of Valdez, Alaska. When she needs to be alone, Wax, 30, can paraglide in remote locations, with a laptop in her backpack, along with a Smith & Wesson .44 in case of bears. No distractions, save an occasional eagle flying by.

Her journey to this pinnacle began eight years ago, when the former social worker packed up her jeep in suburban Detroit to follow her curiosity north to Alaska. It took rugged living, prodigious saving, serious study--and a pinch of serendipity.

She literally stumbled on Tsaina Lodge about seven years ago. She was searching for a place to warm up after the large snow cave where she had lived for a month--and which she had dug out herself, including a kitchen area, benches and bookshelves--began to melt. She was working for a law firm, making about $36,000 at year interviewing natives in remote Alaskan villages. Her simple lifestyle--living in tents and caves, bathing in glacial rivers and lakes, hitchhiking on mail planes--allowed her to bank almost all of it.

Tsaina Lodge (which means "the valley of many brown bears" in Aleut) is a rustic roadhouse with shellacked spruce interiors and huge picture windows. It's tucked into the Chugach Mountains, now home to the World Extreme Skiing competition and a mecca for hard-core skiers who take helicopters to untamed slopes. In the summer--when it's light for up to 22 hours a day--it's surrounded by a sea of wildflowers.

The lodge wasn't so charming when Wax discovered it. But after a few visits, she started to dream of owning h. "I had a vision for the lodge," she says. But the idea seemed so outlandish that she kept it to herself.

Her entrepreneurial juices started to flow, however, when she learned that the Small Business Administration was about to foreclose on the owners' loan. Although she figured she had little chance against deep-pocket investors, Wax quietly studied the laws of foreclosure. She doggedly tracked the proceedings and made sure friends knew how to contact her if she was in the wilderness when news broke.

And, of course, she was--kayaking in northern Alaska. She arrived at a tiny village to find a message left for her at the general store: The lodge would be auctioned the following day in Anchorage, more than 500 miles away. Alter a rare hot shower, she hopped a small plane from the village to Kotzebue, where she got the last seat on a plane to Anchorage.

Wax was one of a handful of people in the courtroom when the federal judge opened the bids on the lodge and the surrounding seven acres. She offered about $160,000--and won. And what about those deep-pocket investors? Apparently, they didn't know about the auction. Wax paid about $100,000 in cash and borrowed $63,000, which has since been repaid.

How could she afford it? Besides her salary savings, Wax was ready to bank a terrific bonus. Because her job was so grueling, the law firm had promised to double her money if she finished the three-year project. That added an instant $108,000 to her nest egg.

It took Wax two years to fix up the lodge. She held down costs by helping experts as a laborer or doing projects herself--she learned rooting, put in a septic system, and peeled logs to build cabins and a bunkhouse.