Keeping Up with the Jones

As a young adult, I definitely fell victim to the phenomenon up trying to keep up with the Jones.  I have had all the cliched mental conversations where I would justify frivolous or ill-conceived purchases.  I remember when cell phones first became a thing that some people had.  A family member wanted one but did not have the credit to get approved.  They asked me to help them purchase a cell phone.  This was the sexiest little

flip phone.  I left work one day and went to the store to pick this item up for my family member.  On the drive home, I couldn’t resist the urge to open the box and check out this item that was so foreign to me.  I immediately became envious.  I was a 23-year-old, in my first real job.  I was in management for a video game company and I made the immediate leap to the “I deserve this” type of mental chat.  The very next day, I had my own phone and thought I was king of the world.  This euphoria lasted about 3 days.  I would like to say that the lesson was learned at that point and the rest of my adult years were led without succumbing to this type of thinking.  Of course, it did not.  While I was probably better with finances than most of my peers, I still traded cars, clothes and other toys based on what my friends and neighbors were doing.  This all wound up leading to the day I have written about in the past where I woke up and despite a strong salary and having invested in equities and real estate and being very money conscious, I was BROKE.  

Since that time, I have rebounded strongly and become much more deliberate with my spending.  However, I have noticed the next wave of keeping up with the Jones.  Now that I have children—one who is a teen and one a pre-teen—that pull to keep up with others is even stronger than it was for myself.  As a parent, the one strong goal has always been to give my children as good or better than I had growing up.  Now that they are at an age where their “toys” are no longer toys, but cell phones, bicycles, and (very) soon…. Cars.  I have had to strongly fight the urge to make sure my kids have the latest and greatest technology, clothes, equipment, etc.  I don’t want them to suffer the ridicule that we are hear about from those mean, nasty Jones kids.  The truth is though, that those kids do not exist; at least not in my children’s lives.  

My kids ask for things and may even pout if/when I say no but there is nobody ridiculing them if they don’t have what others have.  My kids are quite privileged, don’t get me wrong.  They each have a cell phone and iPad and my daughter has her own computer, but they seem genuinely appreciative of what they do have and requests for newer, shinier toys have presented strong opportunities for lessons about the power of saving.  My daughter babysits and accumulates good amounts of money for someone her age.  When this started, I would talk with her about putting that money in the bank, at least 50% each time she earned it.  She would resist this and want to keep the small horde of money in her room to have in case she wanted to purchase something.  I didn’t push her but did consistently remind her that I would recommend putting at least 50% away in the bank.  This led to conversations about banking and that the money was still hers and accessible, just not within arm’s reach so she would have to be more deliberate.  I am happy to report that almost every week, when she has money from a babysitting gig, she now immediately writes out her own deposit ticket and hands this off to us to put that money in the bank.  This is done with us prodding any longer and most times, I wasn’t even aware that she had money accumulated.

My son is a different story.  He is younger and not yet seeing many opportunities for earning.  Additionally, he and his friends tend to go all-in on their activities and those activities change about as quickly as the Midwest weather (which is often).  One week they are into skateboarding and the requests come flying in for a board and accessories and toys related to this hobby.  The next week, it is comic books and they want to start a collection and go to the comic bookstore almost every day.  Then he moved on to computer gaming.  This was a tough one.  Most of the other hobbies had costs that were not astronomical and could be dealt with by asking for certain items as gifts for birthdays or other holidays.  But once he got into gaming, he wanted to build his own gaming computer.  He mapped out everything he wanted, and it amounted to almost $1000.  To his credit, he never asked his parents to buy this for him, recognizing how expensive this was.  However, since that time, he has been on the hunt for money making opportunities.  He has asked about starting a pet sitting business.  He has asked about learning to mow lawns so that he can go door-to-door and ask neighbors if he could do that for them.  I have given him some other yardwork duties that he could do to earn money as well.  I am enjoying these conversations because it gives me the opportunity to flex my creative muscle in thinking of money-making ideas.  My son is the more impulsive of my children and has not done as well with saving as my daughter has but the fact that he is hoping to work and earn money and save for something he wants is a strong beginning.  

Ignore Your Critics

Today’s post is a little different than those of the past.  This is a story that has bothered me since it happened, and I think it is important to share.  Feel free to critique it in the comments.

When I do something, I tend to go all-in.  Real Estate investing was no different.  In the beginning, I searched and visited properties ad nauseum but never pulled the trigger.  I created so many excuses to NOT do a deal that I wound up in the familiar state of analysis paralysis.  Once I finally pulled the trigger and did my first deal, I realized that all my objections were nothing more than worst case scenario fears.  I closed my very first deal on December 31, 2007.  Once I realized that the prospect of real estate investing wasn’t as scary as expected, I quickly did several more deals in 2008 and beyond.  At this point, I fancied myself as a proper real estate investor.  I continued to read everything I could find on the subject and seek out as many mentors as I could find.  This led me to join the local Real Estate Investors Association.  These were monthly meetings of as many as 80 people who were interested in the business of real estate investing.  

These meetings usual began by passing the microphone around the room and having each attendee introduce themselves and give their quick elevator speech on what they are looking to do in the real estate space.  It was encouraged to mention how many deals you have done to date as part of your speech.  I attended several months of these meetings and was very surprised to see that approximately 75% of the attendees had never done a single deal.  They were mired in the same analysis paralysis that plagued me for all those years.  This fact surprised me but didn’t bother me at the time.  Everyone is entitled to their curiosity.

After about a year of these meetings, during the elevator speech portion one woman that I had never seen before stood up and gave her speech.  She very proudly announced to the group that that very day she had closed on her first deal ever.  She was prodded to give the details of the deal and she shared the neighborhood, specifications of the house and details of the deal.  It was clear that she paid very close to retail price for her deal.  As the microphone continued to get passed around the room, many of the other attendees referenced her deal and beat up on the details suggesting that she made a very bad deal.  This was a deal that fit her budget, was going to turn a small profit monthly and give her the important lessons that buying my first deal did for me.  The negative reinforcement continued throughout the remainder of the introductory period.  I could see that this woman was taking the criticism very seriously and was doubting herself for not only doing the deal but for joining this group as well.

When the group took a break about mid-way through the session, I sought out this person and congratulated her on her deal.  She quickly rolled her eyes and assumed I was being sarcastic.  At that point I asked her if she listened to the elevator speeches of the rest of the participants.  Not surprisingly, all she heard was the negativity that was levelled at her deal.  I reminded her that the huge majority of the attendees had never done a single deal.  By pulling the trigger on her first deal, she was already ahead of 75% of these so-called experts in the business.  We discussed the deal in a little more depth, and I reassured her that while experience may have led her to an even better deal, she pulled the trigger, acquired a profitable investment property and began her path in this business.

As the program was set for resume, I gave her my business card and told her to reach out if she ever had any questions or could help her in any way.  Over the next year, she and I spoke two or three times as she encountered things that she wasn’t familiar with and I was so happy that I had made the effort to speak with her that first day.  If that experience led her to continue in the real estate investment business, then I did what I would consider to be a great service.  If she realized that this was not the business for her, then I still consider myself as having done a great service.  The end result is for her experiences to lead to her decision and not allow the talking heads to judge her when most of them having ever put themselves out there themselves.  

This story has recurred to me more and more often lately as social media takes over our lives and I witness this type of behavior growing.  When I am faced with this type of situation, I try to shut out the noise and make my own decisions.  When I need advice, I try to seek out those who are actual experts in a certain space.  We live in a time with an unprecedented amount of opportunities for communication and crowdsourcing of knowledge, but these types of negative encounters have the opposite impact.

2019 Goals- Four Month Check-Up

Below is a look at the goals that I had setup for myself for 2019 and a snapshot of where I stand on progress for those goals.  

1. Keep Weight under 235 (see above for incremental goals):

FAIL.  I continue to struggle on this goal.  I am very disappointed in myself as I have allowed my discipline to waver.  Not only have I not achieved my secondary goal of getting and staying below 235, but I have actually gained weight.  I have succumbed to mindless snacking at work during the day and I have made very bad meal choices at home.  I am hopeful that the disgust I currently feel will motivate me to get back on track with this goal and I hope that by the end of 2019, I will have reached my goal and renewed my path to a healthier lifestyle.

2. Max my 401K contributions:

I continue to contribute 12% to my workplace 401K account.  Year-to-date I have contributed almost $7,500 but this included some variable compensation that I cannot count on going forward.  Based on my contribution level, I am still on track to reach the contribution maximum for 2019.  That limit is currently $19,000 and I should be on pace to reach that amount sometime in November or December.  Another option is to increase my withholding percentage.  I believe I have mentioned previously that the way I try to do this is in small increments.  As I write this, I think that is the route I will take.  This week, I will increase my withholding by 0.5% or 1% and then allowing my monthly finances to adjust to that new take-home amount.  I am certain that this will have little to no impact on my monthly budget and will help ensure that I reach this goal even earlier than currently expected.  I will report next month whether I followed through on this maneuver.  

3. Fully Fund Wife’s ROTH IRA (Stretch Goal:  Fully Fund my ROTH IRA as well):

Both of these accounts have been fully funded.  

4. Read at least 24 Books & Listen to at least 24 audio books:

My reading has slowed down a bit in the past month.  Work has picked up and that gives me less free time.  Additionally, my kids’ activity schedules have really gotten to the point where each and every evening we are on the run so once we actually get home, we are pressed for time to get all the other things done that need to get done.  All this combined has slowed down my reading.  However, even with this in mind, I remain ahead of the pace that I set for the year.  As of this writing I have read 15 books and listened to 13 Audiobooks.  That puts me on pace to read 45 books and listen to 39 audiobooks by the end of the year.  Since summer is fast approaching, I am hopeful that my pace will pick up and I will not only reach my goal but also give me hope that I can increase my goal for next year as well.

5. Re-read “The Millionaire Fastlane” by MJ DeMarco & “Set for Life” by Scott Trench:

I have still not begun a re-read of either of these titles.  Each time I finish a book, it seems like another reserve from the library becomes available and I put off re-reading these two titles.  I will definitely get to them soon. 

6. Get Vanguard Taxable Investment Account over $55k

I am fast approaching the achievement of this goal.  As of today, this account sits at $53,594.10.  Based on current automatic transfers to this account combined with moving any additional “found” monies, I hope to report by next month that I have reached this goal already. 

7. Pay Credit Cards in full each month:

Thus far, I have paid all credit cards in full each month of 2019.

8. Get HELOC Balance under $30K:

This goal has been reached.  The current balance on the HELOC is $27,455.11.  I will continue to pay this down in an aggressive manner.  Since I have already reached this goal through April, I will set a new stretch goal for myself of getting the balance under $20,000 before the end of the year.  That is a very aggressive goal, but I feel like I am playing with house money since I already hit the original goal.  

9. Continue to Blog weekly:

I have continued to blog once per week.  I have set myself a goal of publishing a new article each Wednesday.  While I have successfully hit the goal of blogging weekly, I have missed the Wednesday deadline once or twice thus far (including this article with I am writing and hope to publish today, a Thursday).  

10. Earn additional $100 per month in income through various side hustles:

For April I was able to exceed this goal once again.  For April, we were able to generate an additional $208.00.  The details of that extra money are below.

  • ¬  $50
  • ¬  $25
  • ¬ March Madness Pool:  $133

I have previously written a post asking the question of whether or not fantasy sports winnings can be considered a side-hustle or not.  While I think that including those winnings can be considered here, I struggle a bit with the above.  Along with a few friends, we bought various squares for the March Madness basketball tournament.  Above our initial investment, these produced winnings of $133 for each of us.  I include it here but not really sure that I should since this was really a game of chance and had no skill on my part whatsoever.  If you agree that this can be included, I have hit this goal for the month.  If you take out those winnings, then I came up short this month.  I have identified many books, CDs, and DVDs that I can sell either online or to a retail store such as Half-Priced Books, but I got lazy and did not actually sell any of these items in April.