Archive for June, 2007
Amassing Wealth Before Age 30
I will admit that the path to my current wealth has been a combination of factors and events, everything from hard work, to luck, and just about everything in between. In the personal finance blogging community I seem to find few bloggers in the same financial standing as myself. For our age, (29 and 30), my husband and I have accumulated a sizable net worth, including two homes. We have no debt other than our mortgages and our primary home is set to be paid off before we turn 40. On Wednesday I was considering removing the details of my net worth from my blog, but Alex’s comment led me down a different path.
Rather than removing the details, (for now), I have decided to blog about the details of my financial journey. How have my husband and I managed to save so much money in just a few short years. Obviously, Rome wasn’t built in a day, and it has taken many years and a lot of discipline to lead us to our current financial status.
As with any story mine cannot be duplicated, but some of the principle decisions and turning points in my life certainly can be. If you are reading this blog you may be too old for many of the decisions, but if nothing else I hope you can impart the thoughts and ideas on your own children.
My thoughts and feelings about finances were formed at a young age, but important decisions in high school, college, and just after graduation have been the largest factors in transforming my wealth. The posts that follow will retrace the steps of my journey.
Anonymity and Net Worth
Lately I’ve been thinking a lot more about how much I reveal in this blog. If my family or friends read any of my posts they would immediately identify me as the author. As I continue to write I now realize that even distant friends and acquaintances might be able to piece the clues of my identity together. Just a few short weeks ago a co-worker identified me.
Originally I wanted this blog to remain entirely anonymous, but as time progresses I’ve decided it’s difficult to tell the story of my financial life without revealing quite a lot about myself. Plus, it makes this blog much more interesting. To date I have written 210 posts and I’ve decided there is only one financial topic I would be uncomfortable sharing in the ‘real’ world. Amazingly, of all the topics I’ve written about I am most uncomfortable with posts detailing my net worth.
I originally included these details in an effort to demonstrate how one can work hard and accumulate money at a very young age. At 29 and 30 my husband and I have a net worth that rivals those twice our age. I did not come from money, marry into money, or fall into a high paying job just out of college. I am simply a frugal girl, with great debt aversions who has scrimped and saved money.
I have considered removing the details of my net worth from my blog. Although I know this information may be cached in the realm of the Internet I believe my family and friends will be less likely to discover these numbers. I worry how friends and family would perceive my husband and I if our finances were revealed to them.
Loyalty is for Dogs not Employees
These days there simply aren’t many reasons to remain loyal to a company. In fact, the term “company loyalty” is perceived negatively not only by fellow members of my generation but by employers as well. Having worked for the same company for a number of years, I know all too well how ‘loyal’ employees can become dinosaurs of the working world, failing to stay up-to-date in technologies and thus losing all marketable skills. Working within the same organization employees tend to perform similar tasks each and every day, eventually they lose touch with the advancement of both business and technology.
These days with frequent layoffs and no pensions employees have few reasons to remain loyal to an employer. Although I imagine that very few employees have ever been loyal for loyalty’s sake. The term loyalty brings to mind images of nationalism, patriotism, and allegiance, and we would be kidding ourselves if we didn’t recognize that life-long employees remain committed to their companies primarily for the pensions and benefits.
So if loyalty is considered a negative attribute of an employee, when should a ‘loyal’ employee consider leaving his or her job? Also what factors are worth staying for? Should a pension plan be taken into consideration? What about medical benefits after age 55? What other factors should be considered in staying or leaving? How large a role should personal fulfillment play? If you’ve recently switched employers are you happier in your new job or did you switch solely for the financial benefits? What was the largest deciding factor in your decision to change?
Advice to Help You Prepare for a Layoff
There are a lot of rumors bouncing around my workplace these days and the signs on the wall all lead to pink slips. So what’s a girl to do? Do you jump ship prior to the pink slip or hold out to see what comes your way? A number of employees have taken their life in their hands and started looking for positions elsewhere. A number have already left and quite a few others are considering the move. Some are holding on for dear life and others, like myself, are waiting it out in the hopes of a severance package.
There are rumors of layoffs but no one in the trenches knows for sure which departments or employees might be cut. This is, of course, the way it always happens in organizations, but I wonder how many employees are considering their alternatives and planning for the the possibilities of being let go. I’m not particularly worried about my position, but I figure it never hurts to think ahead. I’ve been poking around the Internet and have found a few tidbits of wise information I thought I’d share.
- If you think you might be laid off take advantage of your medical benefits while you still have them. Have routine check-ups and yearly dental visits completed before your insurance runs out.
- Similarly, if you have a flexible spending account, (FSA), use all the money prior to your lay off. Once you leave you generally aren’t allowed access to that money.
- Immediately sign up with COBRA if you have any pre-existing medical conditions. A new medical carrier can exclude you from coverage for a pre-existing condition for 6 months to a year if you can’t show that you’ve had continuous coverage. Also elect COBRA if you are planning on traveling overseas.
- Clean out clutter and make a little extra cash by selling unnecessary items in your home. Hold a yard sale or use eBay.
- Ask for a letter of recommendation if your layoff was the result of downsizing and not an indication of poor performance.
- Exercise stock options. Employers typically provide a limited time period, after which your options will expire.
- Lastly a lot of websites I found recommend looking on the bright side. Many individuals who are laid off aren’t particularly happy in their jobs anyway. Once forced to leave a job you don’t like, you might actually find a new job that provides greater satisfaction.
Waiting For a Pink Slip
My cubicle at work has been relocated quite a lot lately. While other coworkers pile all of their belongings into boxes, I’ve made a clear and conscious effort to downsize my clutter. I started cleaning out my desk long before the rumors of layoffs and pink slips started circling. The transition from there to here started slowly. On the first day I brought home old family photos. Over the course of a week I carried home old programming books, just two or three, a day at a time. By the second week I converted old papers to PDFs, and by the end of the month I recycled and shredded just about every paper in my cube. The remainder of my personal items: three or four programming books, a stapler, a couple of pens, plastic silverware and various odds and ends are small enough to fit in a small box that resides inside a cabinet in my cube.
The cubicles next to mine are filled with clutter. My company breeds a sense of loyalty that has kept fellow co-workers here for 10 to 20 years. As employees pin children’s art projects and family photos to makeshift walls their cubicles become a direct extension of their homes. I often wonder if it’s easier to devote yourself to work when you envision the faces of those you are working for or if it becomes more difficult to arrive early and stay late when you peer into the faces of those you love? I wonder how many of my co-workers take their work home with them. Are there as many reminders of work in their homes, as their are of home at their work? Spending more than eight hours at work each day it’s easy to see how the lines become blurred.
As rumors of pink slips whirl through the air I am saddened by the thought of loyal employees filling up their cardboard boxes. This time it won’t be to move to another office or cube. This time they’ll be pulling down artwork and family photos and shipping them home. I think about all of the long nights I have awarded my employer and imagine many employees beside me who have done the same. In relationships they say: “It is better to have loved and lost then never to have loved at all.” I wonder if loyal employees will feel the same. In the end will they feel grateful for the good years they’ve had with the organization or simply bitterness at having been let go?
Why Do I Still Work For My Employer?
I have worked at the same job since I graduated from college. Most of my friends have had five or six jobs in that same period of time. A number of them have even had multiple career changes. When I tell people that I have been with the same employer since I graduated I am inevitably asked why I have never switched jobs. Interestingly, as time passes my answers have changed as has my relationship with my employer.
I interviewed in January of the year I graduated, and was sent an offer letter in March for a position starting in the summer. I was interning for a small company at the time who also offered me a job. The starting salary at the smaller organization was much larger, but I felt the overall opportunity for growth at a large company would be much higher. Although it’s true that young employees can make a larger impact in a small company, there is also a stifling feeling of low ceilings and little growth. After all, if there is only one person between you and the CEO how far up the chain can you travel?
The first few years with my employer gave me the butterflies of a new romance. I demonstrated a desire to learn and a drive to succeed right from the start. While other employees my age were performing meaningless and low level tasks, I was quickly moving into roles with greater responsibilities.
But as time ticked by I became bored with my employer, which is often the case when you find yourself performing similar tasks over and over. The itch to jump ship grew stronger, but not as strong as the desire to attain a second degree. Ultimately, company benefits paid for every penny of my advanced degree with the exception of the very paper it’s printed on. For only $100 of my own money and over $19,000 of the company’s I earned my Master’s.
With a new degree in hand the itch to leave continued to grow. By the summer of my fourth year with the company I was determined to set sail. I interviewed elsewhere and offer letters flowed in but the benefits just couldn’t compare. With each interview I convinced myself that the work elsewhere wouldn’t be better. If I had changed careers it would have been a different story, but sitting in front of a computer at Company A or Company B just didn’t seem to matter.
Another year passed and co-workers who brightened each work day began leaving. First it was just one or two, then there were many. I thought I’d give the company one last try and rotated into a few different internal positions. Something new was certainly better than the same old, same old, and for awhile it all seemed doable.
Then one day I fell unexpectedly ill. My company supported me through an often forgotten benefit… short-term disability. Many companies offer long-term disability but few will continue to pay you for months of extended leave. Not mine. The good old girl paid for an extended absence and my heart fell in love once again with the company.
As time passes this complicated relationship with my company has bred a strong loyalty. In good times and in bad it has been the solid rock that supports me. I am not certain how much longer I will stay, but I will always be grateful for all that she has given me.
Pursue Your Passions
I have always loved to write. I wrote my first poem at the age of six and continued to write on and off again through the years. As a young girl I wrote short stories and sent them to children’s magazines and publishing companies. For all my efforts I received a very nice stack of rejection letters. In college I studied literature, but knowing that most writers can’t make a living through their art, I decided to get a ‘real job’ to pay the bills. For me, writing has never been about money. In fact, it’s the joy that comes from writing that convinced me not to become a journalist. I decided at a young age that writing should never be my full time job. I fear that writing to make a living would suck the passion out of the very thing that I enjoy.
But as I write this I also realize that none of us grow up with dreams of working in a cubicle. We all want to be something else. A race car driver, a writer, a photographer, a ski instructor… I know so many people who say I’d rather be doing ‘x’, I’d rather be doing ‘y’, yet every day they drive to work and sit in the cubicles next to me.
My husband has become a recent inspiration for me. With a knack for capturing the moment and a love of photography he has been hired for part-time pursuits by a number of newspapers and websites in our area. I think of all the people who dream of a larger life and I am inspired by my husband who works his full-time job, then travels hours away to pursue his passions.
My Experience with a Tiny Notepad
In January I decided to keep track of my expenses by carrying a tiny notepad around wherever I travel. Although I rarely go to the ATM I don’t like the idea of cash flowing in and out of my wallet. My husband keeps track of all of our credit card transactions in a handy-dandy spreadsheet, but of course, he can’t keep track of cash expenditures unless I tell him what I’m buying. So I thought I’d carry along a little notepad to write down all my expenditures.
What did I learn from this experiment? If you’re hoping to learn that I gained some unusual knowledge about my spending habits, I’m afraid you’ll be mistaken. What I learned is that I have very little self-discipline. My husband has been keeping a journal for years now, detailing the events of his day, his goals, his eating habits, his weight, you name it. Somehow I couldn’t manage to keep track of my expenses for more than a few weeks.
At first I blamed this on the fact that I rarely use cash. I use it to pay for lunch in the cafeteria, which doesn’t take credit cards. I use it whenever I have items that are less than a few dollars or when there is a long line of customers behind me who seem to be in a hurry. Other than that I don’t use cash very often. But I find it funny that after a few weeks of tracking my spending habits I wholeheartedly gave up on the approach. In fact, I have started and stopped this tracking technique since January, but I can’t seem to get past the two week mark. Maybe it’s because I know that the majority of our spending habits are being accounted for, or maybe I learned everything I needed to know in a matter of weeks.
In the past I have written about the patience and planning it takes to live a frugal lifestyle, but in this particular case I just couldn’t muster up the discipline.
The Easiest Way to Save Money When Shopping
There are a lot of tips and tricks for saving money in the grocery store. You can clip coupons and research the circulars, but an easy way to stop yourself from buying too much is simple… don’t use a shopping cart. When my husband and I shop together we always get a shopping cart. Time and time again I find myself buying more groceries than when I shop alone. The primary reason, when I shop alone I almost always use a hand basket instead of a shopping cart. Shopping without a cart forces me to think more thoroughly about each and every purchase. With only two hands and one basket there simply isn’t enough room for unplanned purchases.
I use this same technique when shopping in Target, Walmart and Marshalls. While other shoppers are filling their carts with an assortment of items, I usually manage to walk out with only one or two items. In fact, I’m always amazed by the random items shoppers pull out their shopping carts. At the checkout you’ll inevitably find a woman purchasing cookies and crackers, a baby outfit, a desk clock, a yoga mat…. The most random and unrelated items come out of those shopping carts. I highly doubt the shopper planned to purchase all of these items.
If you tend to fill your shopping cart with unneeded and unnecessary items that clutter your home, I urge you to try this technique. Of course, there are times when you’ll need to purchase a cart full of items. For example, on your weekly trip to the grocery store. But on shorter trips, when you only plan to purchase a few items, try this technique, if you have the willpower it will save you money.
