Been emailing with a new reader of this blog, and in the middle of it he shot me his entire financial/career life story which I thought you’d love to see too as voyeurs ;) Always something so raw and beautiful about this type of stuff – no one ever shares in the real word!
The clip’s below, along with some follow up questions I squeezed in while the iron was hot… Not sure how much you’ll learn from it, but there are some hidden lessons scattered about.
And again – REAL LIFE NUMBERS AND STORY!! Gimme all day long, please!
J. Money – I would say that from what I know of you from your pretty recent blog posts and the Money Show‘s first 15 podcast episodes, we have very similar money philosophies. I lean a bit more towards the Mustachian approach of reducing expenses than you, and I hate real estate a little less than you.
That said, you might get a kick out of our recent financial journey. If you don’t have time or interest to read it, no big deal. It was good to prepare as I am sharing my “life-story” this evening to a small group in our church.
TLDR Version = Life’s crazy, I would do a few things a bit differently if I had a do-over, but then again, I enjoy the lessons I’ve learned. I am definitely in the “rent” camp at the moment, as buying and selling 3 houses in less than 5 years is wack!
July 2008 — Start internship w/ Northwestern Mutual – primarily selling insurance while finishing my degree at University.
May 2009 — I graduate, move home w/my folks, obtain investment licenses and continue building my clientele with Northwestern Mutual.
June 2010 — After moving out I realize that I’m not really making a lot of money and we mutually decide, after I flake out for a few days to a week, that it wasn’t/isn’t the best timing for me to build this biz.
July 2010 — Move to a similar role with State Farm for a few months. Big difference was I was serving existing clients, and had a base salary. But my heart still wasn’t in it.
September 2010 — Spent a few weeks going door to door signing people up for a new garbage collection provider. Funniest thing here was that I got one sale on my first day, and never got another sale again!
Mid-September 2010 — Tried my hand playing online poker for a few weeks. I think I made money, but my hourly rate was ~$2.50 an hour. Clearly not worth it!
[Editor’s note: we once had a professional poker player stop by the blog to share what it’s like to live that lifestyle full-time! Pretty interesting if you ever want to check it out: Confessions of a poker player (pt 1), A day in the life of a poker player (pt 2)]
November 2010 — Offered a contract position with Wells Fargo call center, then 4 weeks later moved to Ameriprise because it was a permanent/full-time job (this was a good call to make since Wells shut down that call center about 5 months later)
December 2010 – December 2015 — Worked in two roles at the Ameriprise corporate headquarters starting at $42,000, ending at $75,000 – and earned the CFP® designation while I was there.
December 2011 — I met my beautiful wife Tory at a local townie bar in the small town we grew up in. We knew each other by name/face as we were in the same graduating class in high school, but never had as much as a single conversation before.
October 2012 — We got married and moved into an apartment. Rent was just under $800/mo for a 1 bedroom 700 sq. foot apartment. This was plenty of space, but we didn’t like hearing our neighbors.
September 2013 — We purchase our first home and the mortgage is roughly $1,500/mo PITI. Our combined income is roughly $80,000. Tory has hardly any assets at this point, and ~$65,000 of student loans.
December 2013 — We get our first roommate to have some extra cushion.
August 2014 — We now have 3 other roommates that are covering our mortgage! My wife does not like having roommates, and I don’t blame her, but I push us/her to save and pay down debt.
March 2015 — My wife leaves her job as it requires handling conflict which she doesn’t deal well with, or lend itself to growing a family (she had to work a fair amount of nights). She nannies until 1 month before our son is born and then becomes a full-time stay-at-home-mom.
August 2015 — We purchase a smaller house that is 6 blocks away from our first home, and turn our first home into a full-fledged rental. Our new mortgage payment is under $1,100/mo PITI.
September 2015 — Our son Xavier is born (accidentally in our home! This is a story for another time!)
December 2015 — I leave my corporate gig paying me $75K + great benefits for a role as an Associate Financial Advisor with one of the top 100 (out of ~8,000) Ameriprise practices. This pays me $80,000 with some benefits, but the total compensation + benefits is probably about $5,000 less than the corporate gig.
June 2016 — We sell our second home without the help of a realtor and it turns out that when all is said and done, it cost us ~$1,400/month to “rent” the place we owned for ~10 months. Two days later we purchased a home that is closer to my new office.
August 2016 — I find out that the “script” I was being asked to deliver to my/our clients at this practice on why we were increasing their investment advisory costs was a lie – and I resign. This is 6 weeks after we purchased our home!
September 2016 — I start working with another Ameriprise Franchise office, but this time, I’m building my clientele from scratch again, with no base salary.
September 2017 — We decide to move up our timeline for baby #2 a bit after learning that Tory’s mom has cancer.
January 2018 — We move in with my in-laws to dramatically improve our cash-flow, and be with Tory’s ailing mother.
February 2018 — Tory’s mom passes away. We knew our time with her was limited, but we thought that we at least had a few more months. We were so glad we got ~4 weeks living with her before she passed.
Late-February 2018 — We sell our primary residence (the one we purchased in June 2016)
March 2018 — 3 of our 4 tenants move out, and I’m currently negotiating with the 4th to offer them an incentive to move out. She, unlike you, does not have children or a spouse, and will be moving in with her folks, so other than convenience, there is no real reason to delay the inevitable. Also, I’m trying to complete as many things as possible prior to my wife giving birth again!
Our cash flow is super manageable, but the rest of 2018 will be about even, and then in 2019, we’ll be able to pay down some debts/start saving. We intend to move out, and I will push for renting in 2020 or 2021 :)
Fun to read, right?? :) I then asked what type of church meeting this is as that’s a looooot of info to be giving out, haha, and thinking maybe it was some sort of Dave Ramsey class relating to finances or something? But nope:
The church is only 2-3 years old and this is a group of 6 people participating in a 7 week group where week one, we all gave super brief introductions and established guidelines and expectations for the group. Then weeks 2 – 7 we each get our turn sharing our life story.
Although I don’t think you are a “church” person, this church is awesome! The pastor is a gay person of color, and technically speaking, the denomination doesn’t ordain gay people. OOOOHHHHH SCANDALOUS!
[Editor’s Note: I am a church person, but been neglecting our attendance ever since having kids :( So much harder to concentrate! Haha…. But I do very much want to get back to it again.]
While we were on a roll here, I then asked if he was cool sharing his current financial snapshot with us so we can get an even better idea of his money…. Even though we’re all strangers here! Haha… Although after this post, not so much ;) He delivers on that too:
My Net Worth Snapshot from Mint along with more details filled in.
- Credit Cards actually includes $33,000 on Lines of Credit at ~10.5% interest, $4,950 on a Card at 9.75% interest, and the remainder on 0% balance transfer cards.
- We have excess cash at the moment since we’ll need to cover the last month’s rent, return the security deposit to our tenants, put in carpet, professionally clean the rental, and a few other things + pay the mortgage until it sells. Fortunately our real estate market here is super hot!
- It cost me $12,500 to bring my clients over to my new practice.
- My annual biz expenses are ~$25,000.
- My net income growth rate over the last ~18 months (my time with this practice), has been ~$2,000/month. So, there’s hope!
- Also, my wife earned $5,000 as a part-time professional Organizer @ $50/hour w/pretty much $0 overhead. With baby two due in May, 2018 will be another lean year, but I think that her income will pick up a bit in 2019, and even more in 2020.
- Regardless, I’m doing our planning under the assumption that she will never need to work again.
My lifetime earnings per Social Security Statement:
It was at this point I asked if I could share this with everyone as I was just fascinated by it all :) And as you can see, he said yes! (Thanks man!)
Got me really good with that last snapshot too as I’m a sucker for lifetime earning stuff… Did you know you can grab your own at any time yourself too? Without having to wait for the yearly statement to come either?? –> https://www.ssa.gov/myaccount/
Just log in/sign up over at the social security website up there and you can access your data whenever you want. And then use it to calculate your Lifetime Wealth Ratio™ I made up to see how you’re doing overall! ;)
Since the Social Security Administration would have no idea how much you’re saving in comparison to this income, we’re left to come up with our own means of figuring how good we’re doing or not. So today I introduce to you the newly coined term – and future buzzword – the “Lifetime Wealth Ratio™”
Which is calculated like this: Net Worth ÷ Total Income Earned
…I would suggest rankings as so:
- 0%-10% – Meh
- 10%-25% – Now we’re cooking!
- 25-50% – You’re on fire, baby! Give me your number!
- 50-100% – Marry me.
- 100%-1,000% – How do I get into your will?
I remember being hocked up on A LOT of coffee writing that one ;) Looks like the last time I ran it here on the blog though I came in at 54% and my lifetime earnings up to that point looked as so:
At a coffee shop right now and don’t want to log on to the social security site while here, but guestimating real quick our present ratio is probably hovering around the 65% mark ($811,570.54 / $1,250,000).
So we’re getting better!
And of course there’s wayyy more that goes into your *true* lifetime earnings as the SS stuff only factors in *taxable* income and probably omits other variables as well, but the ratio still gives you a decent idea of how you’re doing in the overall grand scheme of things. And plus, it’s just fun to calculate ;)
So there you have it! Numbers and rawness everywhere today! Take from it what you will, and feel free to share your own journey with us either publicly below, or privately via email (j @ budgets are sexy (dot) com).
I promise not to share it with the masses unless you want me to ;)
Hope you enjoyed this today! And remember that there are no straight lines to our dreams! We have to go through all kinds of ups and downs and all arounds, but it’s all worth it in the end!! And you’re smack in the middle of the journey right this very second – take a second to appreciate that!
Names have been changed to protect the innocent.
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!