There was a time when Michael Dinich was happy, in what he calls a “naïve way.”
He lived comfortably, not extravagantly, on his six-figure salary in the personal-finance industry.
Yet he had slim savings and even less preparation for the nasty curves coming.
Dinich said a broker allegedly bilked him out of $50,000. He racked up $200,000 in debt and put on 100 pounds.
Dinich said a broker allegedly bilked him out of more than $50,000, upending his business. He racked up $200,000 in debt and put on 100 pounds, never admitting to himself how “miserable” he’d become.
That was then.
Now Dinich is happy again — but wiser.
He’s shed the weight and is also shedding the debt.
The 38-year-old Athens, Pa. husband and father of two has about $140,000 left to pay off between credit-card debt, loans and back taxes, but is aiming for financial independence by age 45.
“I got to the point where I felt I was working for everybody else. I didn’t have the feeling I was working for me,” Dinich told MarketWatch.
He added, “Everything I went through, I know it was self-inflicted. I never want to be in a situation where I feel I have to work for somebody else again.”
‘I’d definitely shake young Michael’
Dinich didn’t plan on getting into financial services. He eyed a career in the military, but his parents brought him into their insurance-brokerage business.
He loved helping people with their money and obtained licenses to become a broker-dealer registered representative.
It was the early 2000s, after the dot-com bubble, and the market was humming along. Dinich built up clientele advising retirees.
‘I got to the point where I felt I was working for everybody else. I didn’t have the feeling I was working for me.’
He averaged about $200,000 a year through commissions and fees, but his yearly take-home salary could climb even higher.
So Dinich spent. “New cars all the time. Nice cars, not Lexuses
” The couple bought new Jeeps
and several Nissan
SUVs. “We felt we got them at good prices.”
The bank approved Dinich and his wife, Elizabeth, for a mortgage up to $500,000 but they bought a three-bedroom ranch with 13 acres for $250,000. Then they finished the basement and put down hardwood floors for another $30,000.
With so much land to tend and a little farm, he also bought equipment like a skid steer, an ATV and a mini-excavator.
“I’d definitely shake young Michael and get him to save more money, for sure,” he said.
A business goes bad
Dinich said he needed a broker-dealer firm to execute his trades and purchase investment vehicles for his clients. The firm acted as an intermediary and supervisor, passing along Dinich’s commissions and fees, while taking a cut.
Around late 2007, Dinich started working with one broker-dealer firm.
The firm fell behind on paying him commissions for trades and sales, and fees for assets under management. The firm blamed a new employee, a new accounting system or an audit, according to Dinich.
‘I’d definitely shake young Michael and get him to save more money, for sure.’
“They would just trickle enough out to you that you got strung along,” Dinich said.
By late 2008, the economy was descending into the Great Recession and Dinich was fed up with the firm. He accused it of stealing his commissions and fees.
In one October 2008 email from someone at the brokerage firm, the author told Dinich that the firm had been “honest and forthcoming” and if Dinich was going to allege stealing, all further conversations would have to go through lawyers.
Dinich hired a lawyer, but never sued. The firm didn’t have any money to pay Dinich, his lawyer said, and he said other advisers had also alleged they’d been stiffed. “We said alright. We moved on.”
Bouncing around rock bottom
Dinich resumed work with another firm, though some of his old clients didn’t follow him. He put more business expenses on his credit card, like marketing services and office equipment.
The family also didn’t scale back their lifestyle — “maybe it was denial,” Dinich said.
He paid around $39,000 for a Corvette Z06
in 2009. Dinich had fun with the wheels, but it was an investment too; he said he scored good business leads through the Corvette Club he joined.
Dinich had production expectations and he also needed to rebuild his book of business — no easy task as the market downturn wore on.
‘I bounced around rock bottom and hit it multiple times.’
The former track runner and National Guard member was working 60 hours a week and put on 100 pounds over the years. He owed the Internal Revenue Service back taxes. “I bounced around rock bottom and hit it multiple times.”
In 2016, Dinich saw a book pledging readers could lose 10 pounds in two weeks. He lost 14 pounds. At first, he skipped breakfast and, sometimes, lunch, and eat a big dinner. But then he stuck to a 200-calorie breakfast of oatmeal or greek yoghurt, a 400-calorie lunch of chicken or turkey, and a salad for dinner. If he was still hungry, he would sometimes have a protein milk shake or cottage cheese. He kept going, losing around 40 pounds on a daily diet of 1,200 calories. Then he started working out, dusting off the Bowflex
in the basement.
Dinich was making a dent in taking off the excess weight, but not the debt. He also carried the burden of unspoken expectations — “that perception in the industry, if you’re not perfect, then you must not know what you are talking about.”
Dinich told his life-insurance carrier he’d lost 100 pounds, which he said halved his yearly insurance policy payments.
Around 2017, he started checking out money blogs, reading how some FIRE blogger said they were able to live frugally and save tons. “I was like, that’s what I should’ve been doing all along. If I had been like this, I would have been retired by now.”
That inspired a purge to attack the debt. “Anything that could go, we got rid of,” he said. Dinich sold the Corvette and the farm equipment. They stopped paying for a land line telephone and shopped for better insurance rates. Dinich told his life-insurance carrier he’d lost 100 pounds, which he said halved his yearly insurance policy payments.
His wife started searching for coupons, using the ibotta app and now gets groceries at the low-cost Aldi. They basically stopped eating out, except for special occasions — but they only eat out in the afternoons to take advantage of the lunch specials.
Dinich now shares his financial lessons
He started blogging full-time this year, sharing financial advice. Dinich said he’d had enough working as a representative driving around to clients. “I wasn’t really going forward.”
Dinich earns about $7,900 a month on the blog, which includes his posts and sponsored posts.
‘I’d rather shoot for the stars and land on the moon.’
The family cut monthly expenditures to $3,500 from a high of $10,000 per month, according to a five-year plan they developed. Everything else goes towards Dinich’s debts and building up an emergency fund.
Financial independence is farther off, but he hopes to get there by expanding the blog’s readership. Maybe it will take him longer than seven years to get there, Dinich says. “It’s an industrious goal, but I’d rather shoot for the stars and land on the moon.”
Looking back, Dinich said, he “didn’t think we were being stupid,” pointing to transactions like a $250,000 mortgage instead of one for $500,000.
It taught him to question everything, and be more cautious when it comes to spending. “When it was all going on,” he said, “it seemed innocent enough.”