Let's Talk Money

I am fortunate, in that I have a career with a pension. Currently, when I retire, at 65, I will be taking home approximately 70% of my highest base pay. Couple that, with my retirement investment plan (public account, whatever its called-503? I dont recall), which I can start drawing on. Plus, a small stipend from SS. Add to that, I take 10% of every pay check and put it into my savings, plus all my VA goes into my savings. That alone nets about 12k/year. I have 14 years until retirement. At which point, I will sell the condo, move to a state that doesnt tax my pension, and spend the remaining days living a nomadic lifestyle.
I carry very little CC debt. I use 2 of them regularly-one strictly for gas, one for all other expenses. For the most part, they dont carry a balance month to month, with few exceptions. I stopped fretting what I had in my checking account a few years ago-because, that account exists solely to pay bills. Yes, I have money in it all the time-but I dont care about the balance, so long as it isnt overdrawn (which is never even close).
I had pretty substantial CC debt several years ago. What I did was consolidate it all, then opened up a new card with 0% interest, and paid down what I could, until it came time to pay the remaining interest balance. At which time, I opened a new card. These cards were never used for ANYTHING other than paying down the balances. I got out of CC debt in a few years.
Now, as I said, I have 2 CCs. One is my JetBlue, which gives me points, which I then use to fly to wherever. The other, my HD card, which rewards me with gift certificates, which I then use to upgrade my bike.
Live within your means. Best thing you could do.

 

$20k in the bad part of town… ballin

 

Probably keep on grinding! I just heard $75k is were you don't need to worried how much you're making. If you're not a big spender

 

There was only 13 bullet holes.

 

A house with history will hold value!

 

I’ve found stability and good life decisions a solid investment. Stability has come primarily through 45 years of steady employment. I’ve found that pretty easy, as all it seems to take is drive and the ability to take some crap once in a while. Life decisions have been Christian based, even though I’ve had plenty of blunders. I think conscious effort keeps a guy above 500.

 

I will say, i just started consistently making 75k a year from my main source of income and yea, it seems i finally have some breathing room. However, it’s all in your spending habits and living within your means.

i spend a lot on truck parts but i always make sure my bills paid for first.

that’s a solid goal man! But when you get there, don’t stop there! Keep going!

 

Financial maturity has been a journey for me. Money used to burn a hole in my wallet and I have expensive hobbies. The bills were always paid and I never paid interest to a CC, but was not trying to get ahead. Any savings I had was just working towards the next big purchase. A few years ago while driving between VA and TN with my wife on a camping trip, I made her listen to Dave Ramsey, who I had just discovered but had not yet put into practice.

I knew I could do better with the immense gift I had been given with the pay from my new job. We got home and I cut a check for the balance of my truck loan. We saved up the emergency fund, which was tough for me because all that accessible money was sitting there and we were paying a ton in vet bills that kept coming up. That helped me realize how important the emergency fund is, and also how important health is.

These events led to other conversations, and I came to realize the level of casual materialism I had become comfortable with. My wife said one day that the goal should be to acquire experiences, not things. It took me a while for that to sink in. Once it did, I jettisoned the things that weren't helping me make memories, including my motorcycle and majority of my gun collection. I wasn't sure I was doing the right thing at the time because I was so used to such meaningless excess (meaningless, for me-other people may get more value and memories from motorcycles and gun hoarding than I did). Today, I look back at those moments and realize that is precisely when some big weights came off my back.

Anyway, my wife wanted to quit her dead end, soul sucking customer service job and become a nurse. We saved up and are now putting her through nursing school without any loans, on my single income. We are maxing out my Roth 401k and Roth IRA now, and will max out hers once she starts working, when we will also open backdoor IRA's to further feed the Roth's and attack the mortgage at the same time. The goal is for me to retire at 50 (14 years to go) with a paid for house and $2M in retirement assets. I'd like to start an NPO that rescues dogs from disaster areas at that time.

My maturity came around as I really stepped into my prime earning situation. I am extremely fortunate that things and people came into my life at that time and taught me what was important before I started getting a lot more stupid with a lot more money.

 

Sounds very similar to my story! As Dave likes to say... "when the student is ready the teacher appears"! Timing is everything... thanks for sharing.

 

I personally think Dave is a jerk. Although I agree with *most* of his ideas with financials; conversely the guy as a person, I think has lost some of his Christian morals.

He has built a golden tower and thinks he’s a financial god. The way he belittles people is rough to listen to. A lot of the people do need an awakening to get turned around but jeez!

 

I wouldn't consider myself wealthy (my friends are much more wealthy than I), but I am comfortable as a divorced dad. I have a decent amount in savings (even after a divorce) and am on my way to paying off my debt early (just a mortgage... which I just closed on a refinance yesterday to reduce the years with a nominal increase in monthly payments... which I rounded up anyway).

I found these two items to be the strongest reason I'm doing ok:
- Get some kind of financial tracking software and put every expenditure in it, no matter how small. I have been using Quicken for 20 years and can't stress enough that you have to track where your money is going to figure out potential solutions if you think you need help. data is good.
- Set up automatic transfers into a "high" yield savings account. High is in quotes because interest rates have steadily decreased since I started doing this. I use Citizens Access, but have used Emigrant direct before. The goal there is that I want my checking account (where my paycheck gets deposited) to be as little as possible, say around $100. If I need money to pay off my monthly credit card bill or other things.. I just move it back from savings. 9 times out of 10, if I move money back from savings, it's never more than the amount I automatically transfer, so my net savings is positive.

The beauty of Quicken is that if I put in reminders for all my bills that are unlikely to change (heating oil, cable, electric, etc), and reminders about all my transfers to savings, then quicken will tell me the lowest balance a certain number of days out (I think I have mine set up to tell me the lowest balance in the next 30 days). So I know pretty much that I'm not going to go below zero in that account and get dinged with a bounce, but can have the majority of my money in savings. If paying off my CC bill results in that projection going below zero... then I transfer just enough to get it above zero with about a $100 cushion. the goal is to have most of my cash in savings accounts with interest.

A few other things that helped me be comfortable with my finances:
- I pay everything with my CC which has rewards and pay the bill off monthly. I'll take their free money. it's probably not the best rewards card (bank of america), but I'm kind of lazy about researching better cards
- 3 to 4 months worth of expenses should be set aside in case of emergency. Again, quicken is great at estimating what that is after using it for a while.
- I do my own escrow for home insurance and property taxes. I hated how the escrow company needed a minimum balance that was way more than it needed to be... and as a result my mortgage payment+escrow would fluctuate year to year. Now I do an automatic transfer after one of my two monthly paychecks into a savings account for taxes/insurance, just to set aside from my normal savings and checking accounts.
- I am committed to paying off my mortgage early. My last mortgage payment (P&I) was about $910, and I'd round up to $1000 every month. THat was a 25 year loan. I refinanced to a 20 year loan this week, my payments only went up to $945, but I still pay the $1000 a month. I also got a little back from closing this week to pay for some fun stuff (i.e. unexpected repair of my boat trailer). If you have a mortgage and haven't refinanced in a while, take a look right now. rates are better than they were a year and a half ago (when I refinanced to get my ex-wife off the mortgage).
- I do a couple of somewhat silly things to save and invest money for long term fun (i.e. an all expenses paid trip to Argentina for flyfishing.... in maybe 8 or so years). I use Acorns, which is an investment app that tracks my usual CC spending, rounds it up to the nearest dollar, takes that change, and invests it. it's pretty hands off and a nice way to have some spare change get invested and grow. I also do academic surveys through Prolific.com while bored at work and then transfer that tiny bit of money to Acorns.
- get a Roth and auto transfer some money every month. this plus my work's 401k have me projected to be quite comfortable when I retire. I rolled a couple 401ks from previous job into an Edward Jones account. My guess is their fees might be relatively high compared to other places (like Fidelity), but I meet with the EJ person once a year and we go over all my retirement accounts and projections to see if I"m on track. Again, I would rather pay a little bit for someone to help me evaluate this, than try to do it myself and miss something.

By moving money into venues that at least make a little bit passively trained me to save and control spending.

 

I think the key takeaway here is that you've been super intentional with your money.
That's the game changer that so many people lack!

 

We followed Dave's plan, well, Dave-ish anyway, and became debt free in 2018. It was a struggle but it was worth it. It's amazing what you can accomplish without debt hanging over your head. I don't believe all of his principals (especially investing advice) and I agree he can be a little rough on people. But for becoming debt free he still has fairly solid advice for most people.

 

$163k in 24 months?? That's awesome man...
What investing principles do you prefer?

 

Big hole, but big shovel as Dave says.

To answer your question, I'm not really qualified to be handing out investment strategy advice on the internet.

 

That's awesome, congrats! I'm not following Ramsey's plan, but I keep track of damn near everything we spend money on. Only debt we have is the mortgage. $176k, but I'm sending an extra $200/mo to beat it up. We've got our first (and likely only) child on the way, but the extra money on the principal every month is budgeted in. I can't wait to be debt free. We're working off only my income, so for now, I'll just keep chipping away at it.

 

Keep at it brother, and congrats on the kiddo! Just had our first (and likely only) kid last month. It's a blast!

 

I was fortunate enough to have a Dad that taught me if you don't have the cash for it then you can't afford it. I have lived by that my entire life (40 years) besides a home mortgage unlike my coworkers that live paycheck to paycheck. When we get a raise they get a new truck, I put the extra towards my mortgage since my retirement acc is already maxed out. When we hire a new guy in his 20s I try really hard to get them to sign up for our optional retirement account right away unless of course they are saving every penny for their first house.

 

Generally speaking, my wife and I live below our means. We save diligently, we don’t finance things other than our home, don’t buy unnecessary things, and don’t buy convenience services.

We started our life together with a financial independence mindset. We wanted her to be able to stay home with the kids until they started school, we wanted to pay off the house as soon as we could, wanted to put our kids through school, and wanted to retire at a reasonably early age so we could enjoy that part of life.

I pushed ahead at work so I could make enough to live on one income while each child was little. My wife managed our money as that is what she does professionally. She buys things like groceries, and household consumables in quantity, when they are on sale or she has coupons, so she can get the best price. She learned this from her mom who did it because her dad worked construction and there were times he didn’t have any work. When covid arrived, we had plenty of food, TP, and cleaning supplies.

We only buy with money we have, not money that is coming in, or with credit. We do use credit cards, but only for things like plane tickets, car rentals and internet purchases. As soon as it’s charged, my wife transfers the amount to the card. We never risk our own money on a remote transaction and we never run a balance on our cards. We buy our cars outright and keep them for a long period. At first, they were good quality used cars, and today they are new cars. We keep them for 10 to 15 years.

We do all maintenance, repair, and renovation ourselves with few exceptions. Our home was once a rental and a little worn. We have completely renovated the house ourselves including the land scaping. The few things I hired a contractor for (roof and HVAC), we worked out a discount for cash. People love cash. If you are buying from a small business, ask them for a cash discount after they give you a bid. I have always been able to get 5-10%. My wife also knows a lot of local business people and we get some professional courtesy discounts or other considerations. Last winter I got a free cord and half of mixed, seasoned, hardwood because the tree trimmer wants my wife to continues to hire him for the properties she is in charge of. My wife is the financial officer for a dental practice, but she also has a side gig managing the side gigs of several doctors. I learned as a kid, it pays to know people and have mutually beneficial relationships with them.

We don’t hire a gardener, we don’t have food delivered, we don’t have people shop for us, we don’t subscribe to services that take little tasks off our plate. Those things nickel and dime your income. By contrast, my neighbor who moved in recently pays for others to do everything. Not something I would do, but it seems to be a value to him. They have all their food delivered, lawns cut, pool cleaned, etc. They even had a guy come out to reset a breaker, and another to wash out their trash cans. Seems wasteful. Not everyone can do everything, but everyone can do something. To encourage my kids to do it themselves, I offer Dad Points where they can earn a fun activity like a trip to Amoeba Records in LA or to the shooting range. Both kids think being able to do it yourself is a “flex” as they say. My daughter had one friend comment, “You can do that? That’s bad-ass”. We taught them early on where money comes from and how to keep it.

By forming a long-term vision of where we wanted to be and by being very intentional about saving, spending, mitigating costs, and prioritizing expenditures, we have been able to get ourselves in a good place for retirement and have been able to give our kids a fair start in life. We bough both kids their first car and taught each how to care for and maintenance it. Both went to K-12 private school and college. My youngest just turned 22. She finished her BA in 3 ½ years with honors, and will have finished her MA this December. No student debt. She also has about 20K in savings by working, controlling her overhead, and not wasting money. She still crushes cans and recycles. My older son started out as an outside sales rep making a lot of money. He turned that gig into his own business. He bought his first house at 21. He is doing well and still wants those Dad Points. Mission accomplished with the kids.

We paid off the house before the youngest was out of high school. Financed to a lower rate twice and shortened the term. Made extra payments toward the principal. We also decided to keep this house instead of moving to a better home. We are in a nice neighborhood, and our property taxes and utilities are low. By contrast, my sister and BIL bought a very nice home in an exclusive neighborhood. They bought when the market was high and were upside down for some time. At 4000 SF, it is expensive to heat and cool. Their property taxes, Mello-Roos, and HOA fees, are over 10K/year. We have no Mello-Roos, HOA, and our property taxes are about 2K. Our home has only gone up and it is worth 4-5 times what we paid for it. They still have a mortgage, we don’t. Different priorities and strategies.

We have an investment portfolio, liquid assets over 100K, my public employee retirement, and no debts. The only recurring costs are utilities, food, fuel, etc. We take a nice vacation every year and do things we enjoy. I have a lot of tools, a few firearms, we give to our church, and some charities that support people or animals. I think we did okay, and achieved a balance between having and saving. I do believe a lot of what was saved was through sweat equity. Besides the savings, I am proud of the work I have done with things I built. I take my time, buy good products and materials and do it right. I really like when someone asks “who did your…”?

When we retire in a few more years, we are likely to sell our house and move to another state with a lower cost of living and with some of the tings we like to do. You can do a lot here in So Cal, but I would like less population density, a little more freedom in some of my areas of interest, and just something a little different. We have been researching visiting other states for the past several years. We can afford to stay here, as that was always our plan, but we have visited a few places we really like. This October we are flying to Tennessee to check it out. We’ll see how it feels. I’m really interested in the Appalachian Trail. I’ve done lots of the PCT and the Continental Divide trail, but haven’t set foot on the Appalachian.

The 2025-2026 school year will be my last. I have over a year’s wort of sick leave now. I will likely take the last year off to facilitate our move to wherever. If we don’t move, I’ll just cash it out. I have to hit 60 to max my retirement. It’s a little longer than I wanted to work, but, it’s all good. I like what I do and work is relatively low stress. That being said, I’ll be happy to cut the cord here and won’t look back after I go. On to things I like doing but don’t get paid to do.

 

That's what it is all about right there! At the end of it all this is what matters.