My Single Income Household Budget

So here we are! Our baby is now a little over seven months old and our household is in the groove of operating on a single income as my wife goes off to work and I am daddy day care. And I have to admit I don’t miss the extra disposable income one bit. As a quick recap my wife and I are debt free (myself since 2009, my wife since 2012) and we have amassed to this point a portfolio worth a little south of half a million dollars. So we’ve decided to take our foot off the gas pedal income and savings wise to have one of us home with our child for a few years. We came to the conclusion that I would stay home chiefly because of my wife’s super awesome health insurance offered through her employer. Currently she carries a family policy with a low deductible and pays no monthly premiums, it’s all covered by her employer.

So for us it was a no brainer that  I would stay home with our little one. But just how exactly do we make it work on one income, in a major metropolis in the US? To start I have to tip my hat to our debt free journey. I doubt we could have pulled the single income household off if we still had monthly debt payments. At its peak our student loan debt totaled $80,000 and between the two of us our monthly payments were right around $1,200 a month. With that kind of debt and monthly payment hanging over our heads there was no way I could envision us having a child AND going to a single income.

So with our household debt having been cleared collectively four years ago, having spent the time since our debt elimination pouring extra income to building a six month emergency fund and funneling as much as we could to retirement and non-retirement investment accounts, we felt confident at this time to drop to a single income and ultimately lose our excess disposable income for this period of our lives.

At the onset I will say that my wife continues to max out her Roth 401k match with her employer, so in that sense we are still contributing to our retirement accounts in at least some form. And to spare you the agonizing details of our full blown budget I have only included the major categories and percentages that comprise our monthly budget so the total does not equal out to 100%, as this is merely an overview snapshot. So here it is, a quick look at the major nuts and bolts of our budget.

• 31% Rent
• 26% Entertainment and groceries
• 10% Give
• 9% Travel
• 8% ESA and diaper service
• 8% Brokerage

For starters we put together before the start of every month a zero based budget that starts with our expected take home pay and ends with that number being dwindled down to zero. Again, these are some of our major categories and the percentages allotted do not equal to 100. At first glance obviously monthly living expenses in the form of rent, going out and groceries take up more than half of our monthly budget. We also are continuing to tithe, save specifically for ongoing travel as well as into our taxable brokerage account. It is also a priority for us to use a sinking fund to both max out annual Education Savings Account contributions (annual max of $2,000 as of this year) and to pay for cloth diaper delivery and cleaning service for our little one. For posterity purposes I will say that the missing percentages are scattered amongst non medical insurance premiums, saving for clothing, utilities and blow money. So what I have listed are the heavy hitters of our budget.

Overall I am happy with our planning and implementation. In the months leading up to us formally shifting to a single income household we did practice living on this type of budget before my paychecks stopped coming. We were surprised to find that aside from cutting the amounts that we saved and invested, that we were kind of already were living off of one income when we had two. Although the details of who paid what expense were split between my wife and I, numerically speaking we had been for years living off one income and saving and investing the other. So thankfully this shift has been a seamless one for us. And even pulling back to look at it now, knowing what we used to bring, I really don’t miss the extra income at all. Having this time with my son is something that does not have a price tag on it in my book and I am forever grateful and thankful to my wife for helping get to this scenario where I could stay home with our little guy. It still amazes me that this was not the plan, but here we are and I could not be any happier than I am now.

My New Year: 2016

I honestly can’t remember the last time I was a little sad to see a year come and go. 2015 turned out to be an amazing year for my wife and I. The biggest reason for that was the birth of our son, and that he was able to witness (albeit from the perspective of a baby that couldn‘t hold his head up) our beloved Chicago Blackhawks win a Stanley Cup on home ice! During the course of 2015 I changed from a married husband, to an expectant father to a father who knew very little about what he was doing in the realm of trying to take care of a baby, to a competent stay at home dad. And it’s amazing for me to look back on all this and wish it to never change.

I love taking care of my son. I love holding him, feeding him, changing him and doing all of the things that you do with babies. And with a new year comes more growth and development in my little one. As he already has been in a lot of ways already, he will eventually make the full transition from baby to toddler and in a lot of regards will not be as dependent on me later this year as he is today. And that fact is a very bittersweet pill to swallow. I have loved every second of being his dad. Even when I get frustrated, tired and flat out exhausted, the best thing I have done with my life is to help bring this little guy into the world.

2015 for me was a moment in time that I wish I could freeze forever. And I’m sure that 2016 is going to bring its own victories, changes and developments. But for the first time that I can remember, I was actually sad to see a year end. So here I am, a SAHD (we seriously need to find a new acronym for that, it is hardly sad) with a whole new year in front of me.

Obviously our net worth is marching closer than it has ever been to the half million mark. I do expect to see significant growth in the overall market due to 2016 being an Olympic and US Presidential election year, and that a lot of sectors in 2015 were flat and even in the red for some. It will be interesting to see if this time next year whether we’ll get the less than 40k  in growth and contributions needed to hit the half million mark in our portfolio.

We have our plan in place and are more than ready to tackle the new year with our single income household budget. Being home I have enjoyed meal planning and having dinner ready by the time my wife hits the door, and of course there’s that fringe benefit of spending the entire day with my son, which I must say is second to none. I’m looking forward on the home front to add some new recipes and meals to my weekly repertoire and see my son continue to grow and develop.

So while I’m a bit saddened at the anticipation of my baby no longer being my baby, I’m happy and excited to see what this new year will bring. Especially now that I’m settled into the role of a SAHD and can throw my focus into my family and not whether I will attempt a balancing act between work and family. So I want to wish all of you a Happy New Year and all of the best in 2016!

My Self Enforced Gag Order

Streaky, non-existent and absent. These are just a few of the words that can be used to describe this blog over the last few years. And now I am finally ready (and not under a watchful eye) to pick this little blog back up with regular postings.

But what happened?

This piece of the story goes back a few years and needs some background. I work in finance, specifically in operations for large, and when I say large I really mean behemoth, global financial institutions. After several years of service at a US based firm, I left for a certain Swiss one that may or may not have three keys ;) Now based on the type of work that I do and certain industry intel that I am privy too, it is perfectly understandable that in this line of work certain restrictions and monitoring of employees needs to be in effect to prevent insider trading. To be in line with regulations and internal standards, my then new employer required me to report any non-retirement investment accounts to their firm, allow them access to monitor my account for activity and sign off on quarterly affirmations that state I was not engaging in insider trading.

But with so employees across the US, let alone the world, my employer at my time of hire, required me to also move my non-retirement investment account to one of a select list of approved firms. Thankfully my account in question was already at a firm on their approved list, so when the job offer came through I happily signed away.

Fast forward a year into my employment and the rules changed. Now I was required to report all investment accounts within my household, including those of my wife, to my employer and transition these accounts to a single approved firm: theirs.

Surely, I thought, there would be a discount offered to employees. There was no discount. The decree would mean that I would move our brokerage account, my traditional IRA (rollover of 401k from previous employer), my ROTH IRA, my wife’s ROTH IRA, my son’s ESA and a few ESAs that we have setup for nephews and nieces, from a provider that charged 0 fees to one that would begin charging monthly fees for the pleasure of doing forced business with them.

Needless to say I was not happy about the situation. I appealed to HR stating my investment portfolio consisted of open-ended mutual funds, I do not own and have never owned single stocks, and I have only bought, never sold any funds. Surely they would grant me an exception based on my plain Jane investments. They did not, and between you and I, they could not have cared any less about my personal scenario.

So I began interviewing at other firms and quickly learned that this policy my employer implemented, of forcing employees to (financially) buy from the company store was not the norm. I received several offers from other potential employers, along with sign off from their compliance departments, that I could work for their firms without needing to consolidate my portfolio (based solely on my holdings and transaction activity) to their firm.

I was ready to jump ship at the drop of a hat but my wife really helped me see the light. At that time we were trying for what would become our first born. And my better half reminded me that, depending on the timeline, if I left, even to a large company that was legally obligated to provide FMLA, there was a chance that my tenure would not qualify me for taking leave.

So I was faced with a question: what’s more important, spending time with my baby or paying fees on my investment accounts? Needless to say I sought out the third alternative because I absolutely hate the thought of paying unnecessary fees, especially on my investments. In the end of this delightful dilemma I did not move any accounts to my employer and my wife and I (may or may not have done some account title) maneuvering (while not incurring any tax implications or penalties) and stayed in compliance with their revised policy. But I had one loose end, this blog.

What if my employer came across this blog while I was employed for them and read about investment accounts that I may or may not have trading authority/access to, that are not on file and held at their firm? So instead of rocking the boat I stopped complaining about the policy change to my managers and HR, I may have or may not have changed some wording on our account titles, I stopped writing new entries on this blog, I kept my head down and I shut up.

But thankfully this has only been for a short period of time as now I can bring my head back up and continue my musings on this blog, oh, and maybe or maybe not rename some account titles :)

My Epic New Chapter

After what has felt like an eternity I feel like I can finally breathe! And believe me I mean that in every sense of the word. My son is six months old, my wife’s maternity leave has came and went and my leave offered through my employer (16 unpaid weeks) has now expired. And after pouring through the details, crunching the numbers, praying, having discussions and envisioning scenarios, we have decided that I will leave the work force to stay at home with our baby.

This was a decision that I certainly did not even remotely consider when we were in the labor and delivery room the night he was born nor when my paternity leave started. I thought the little guy would wear me out, break me down and have me looking forward to the day I could leave him with a nanny or drop him off at day care and retire back to my cubicle of solitude for some peace and quiet. But a funny thing happened. The feelings of despair that I expected to hit during the marathon that is taking care of a baby, the feelings of when can I get back to my work life, the feelings of when can we get back to the automated savings machine that was our double income household, NEVER…ONCE…HIT….ME

I absolutely love taking care of my son 24 hours a day. This is the kind of work day that I am glad doesn’t end. Yes it’s tiring, yes my back hurts a lot more than even when I used to get to the gym four days a week, yes I take naps with him because I can get just as tired as a six month old, but I love it and I wouldn’t trade this experience for anything in the world. And that includes getting back to the five day 50+ hour a week work week and double income household.

Getting here was not easy though and it took a ton of blood, sweat, tears, overtime and side jobs to get to this point for both myself and my wife several years ago. Together we had paid off $80,000 in student loans, have our emergency fund intact and saved and built a portfolio of nearly half a million dollars as we are sitting in our (very) early 30’s. So the question we ultimately came back to after our son was born was why? Why did we go through all of that sacrifice, follow Dave Ramsey’s advice to a perfect T and live and save like no one else? Did we do it to enjoy an early retirement well before we’re eligible for social (in)security? Did we do it to pass on a legacy of debt free living to our children and our children’s children? Is it too soon to be reaping what we’ve sowed? Is this the right time to take our foot off the gas pedal or are we doing long term harm to our financial well being by going to a single income even for a short period of time?

For a lot of these questions, truthfully we don’t have the perfect answers yet. But what we do know is that we love having our son home and one of us here with him, and after expenses (plus a fancy new tax bracket and withholding changes), on a single income, we would still have some disposable income left over! Sure, it’s not the multi-thousand that we used to have, but it would work. It would work in that we could meet our financial obligations, my wife would still max out her 401k for the match, give our tithe, max out savings for our little one’s ESA and still have disposable income left over to give, save and spend.

I think for me, the clincher was thinking about myself at 80, and looking back on this new chapter of my life called parenthood, and wondering what that 80 year old me would have looked back on and thought. Would that old guy have wanted a few more years in his early 30’s to accumulate wealth or time with his newborn son? And when I put it into that context, after looking at the hard numbers of whether we could make the new numbers work on our monthly budget, the choice was pretty easy, of course I want to stay home with my son.

Though cliché, I think the advice that I heard time and time again while my wife was pregnant rings true, that having a baby changes everything. At this point in my life wealth accumulation has taken a back seat for time. It’s a trade off that three months ago I did not think I would make until I was at least 60 years old. And yes I’m happy to have the freedom to continue writing this blog and sharing my experiences, and I will certainly get into more detail on that statement very soon!

My Book Review: "Manhood" by Terry Crews

Funny, poignant, heartfelt and touching. These are not the adjectives I expected to walk away with before I began reading Terry Crews’ “Manhood.” Seemingly on a whim my wife picked up this book for me about a month or so ago and I let it sit on the shelf for some time. I knew of Terry Crews as an actor and beyond that not much else. Crews’ book is an amazing read and admittedly once I started I couldn’t put it down.

Crews walks us through his life, from being born in Flint, Michigan, to growing up with an alcoholic and abusive father, to his path walking on at a college football program to being a journeyman in the NFL, to his humble beginnings in Hollywood and beyond. Crews walks the reader through all of the ups and downs of his life and he had me engaged and wanting to read more and more with each page.

I especially wish a book like this had been written (and that I would have had the foresight to read) when I was a teenager. This is because Crews goes beyond making this book an informative biography. He gives an in depth and poignant looks at some of the most incredible issues that plague so many of our lives. From cyclical generational abuse to the pains, struggles and complications of addiction, Terry Crews was unbelievably profound and as I said before, I could not put this book down.

I’ll come back to my point in the last paragraph that I wish I had read a book like this when I was a teenager. This is because Crews is, on the surface, what most men point to as an alpha male. From his physicality to his presence walking into a room, through every step of his life it seemed as if determination and gusto carried him to success. And beneath it all addiction was the slowly boiling pot of water that nearly destroyed his life every step of the way.

Previous versions of myself would hang onto the fact that I wish I had read something like this earlier in life, so that I could see a voice, an advocate, a symbol, of someone in Crews’ position standing up to challenge the cultural expectations of masculinity, and that I wish I had a role model like that when I was growing up. But at this stage in my life I am grateful that his voice talking about these issues exists at all. Mainly because it goes beyond an alpha male standing up saying “I have feelings too.” This book was about a man of God admitting that successful paths in life are not even close to being well manicured and carved trails. Crews explored on a personal level the devastating impacts that generational abuse can capture and destroy the lives they are apart of, but that they don’t have to continue on to the next generation, and that abuse can stop and end with the person in the mirror.

He talks about forgiveness, faith, love, pain and everything in between. Words written in this raving review pale in comparison to the messages Terry Crews explored and provided insight into for, “Manhood.” And I for one, believe that every male that can, should read this book for the awesome perspective Crews gives about what it means to be a male in our society. I for one am thankful that Crews wrote this book and I hope he has many more planned in the pipeline.

My Quarter End: Q1 2015

Now this feels pretty good, being back in the groove and writing about another thrilling quarter end. So let’s go through a few of the technical numbers and then dive into the details. As of March 31st, 2015 my household net worth stands at $441,437.20 and my mutual funds have been earning an average annualized return of 17%.

Having not reported my net worth since the end of 2013, and to see the first quarter of 2015 start off with an increase of almost one hundred and ten thousand dollars absolutely humbles me and collectively blows my mind. You see, since finding out we were pregnant last fall we re-prioritized a lot of our financial goals and tactics. The biggest of which was increasing our cash positions through our emergency fund and creating a baby account.

Our baby account was made to provide a little cushion for our upcoming bundle of joy. We wanted to be able to make any baby related purchases such as clothes, bedding, cloth diaper service and allthingsyouapparentlyneedforababythatihadnoclueievenneeded without skipping a beat. Thankfully our years of living on a budget and working together through our finances prepped us to seamlessly put a target number on our goal, squeeze a few current month budgets by coming under in categories like groceries and entertainment, and before we knew it our baby account was fully funded.

So we've spent the better part of this current year funneling our disposable income into our taxable brokerage account. All the while we have continued to max out our employers’ matches through our 401ks. To me all of this, especially since 2013, has been slow and steady and to be perfectly honest since I had gone on an extended hiatus from writing this blog, I didn't really compare or even look at the quarterly numbers during 2014.

So I’m left wondering what made us leap over $100k in just a handful of quarters? In truth, half came from an increased of appraised value from the piece of real estate I own in name in California, and the other half from increased contributions and growth from our mutual fund investments.

To me the last year was pretty much clockwork. We continued to live debt free, regularly invested in our assortment of mutual funds, beefed up our cash savings accounts and watched every dollar through our monthly budgets so that not even a penny would slip by us.

I actually feel kind of crazy writing this. There were no magic tricks, no salary increases that bumped us a tax bracket, no wild and crazy bonuses and no secrets of investing that only a financial analyst has top secret access to. We've simply been slow and steady telling each and every penny where to go each and every paycheck….THAT’S…..IT!!

For this quarterly review I will hold off on making any market predictions or a financial summary of the state of the US. Primarily because I want to have time to gather up some awesome Yellen jokes, but mainly because, and I know this may be sacrilegious for a finance blogger to write, but simply put, I just haven’t been paying attention.

I know, I know, how can a guy who works in finance, and who (is getting back into) writing a personal financial blog not pay attention to the overall health of the global economy and the US market? To be frank, I just haven’t. Day and in day out I do my very best at work, and lately, especially over the last few months, I have been living, breathing and LOVING the idea of becoming a dad. My wife and I have completed a month of birthing classes and are ramping up our home exercises in preparation for the due date. Everything, financially speaking, is on cruise control. We have our monthly budgets for the rest of 2015 filled out, and while we expect variables to hit us and our best laid plans to always be fluid given the volatility of having a new family member (and that I will take 4 months of unpaid leave from work, more on that later), I feel like we have our financial ducks in a row and can concentrate fully and solely on this new chapter called parenthood that our lives will be turning to in just a few months. So it’s great to be back writing and I can’t wait to share more as 2015 unfolds.  

My Return

461 days….

That’s how long it has taken me to realize how much of an asshole I have been for not continuing to write in this blog. It’s definitely not been for lack of thoughts or a shortage of topics. The truth is I let a few miniscule circumstances and technicalities open the door for my laziness to step up to the forefront and take over the joy I received day in and day out from this blog.

Well that is no more…

It blows my mind that it has been almost a year and a half since my last entry. So much life has happened, there have been so many changes and yet so much remains the same. I am still working in the financial industry and loving Chicago. My wife and I are still living the debt free life as we celebrated our fifth wedding anniversary late last month. And our mutual fund investments are continuing to outpace my expectations.

As for the changes, well, there’s been quite a few after nearly a year and a half, but there really is only one change that takes the cake and stands out above all the rest. In less than two months, I will become more than just a (sporadic) blogger and (self proclaimed) personal financial wizard. (Hopefully) By the end of May, I will become a father as my wife and I will welcome our first baby to our little family. Here’s a picture of our little one that will hopefully make you go AWWWWW!

Now we are holding back the gender of our baby from family and friends. Clothing wise we want tons of vibrant and bright colors that are gender neutral from our loved ones, so that if baby number two ends up being a different gender, then the hand me downs would be just fine to pass from one child to the next. (You see me working there?!)

Needless to say I am excited and unbelievably stoked for this next phase of life. I’ll dive more into this and many other topics in later posts, but for now I wanted to share that I missed you all, I’m sorry for being an asshole, and I hope you still find the musings of this semi-astute North Sider, at the very least interesting. Oh, and to a very awesome reader of my peculiar musings out in Charlotte, thank you for giving me just what I needed at just the right time :)

My Quarter End: Q4 2013

What an absolutely incredible and breathtaking year. Sitting here writing at the end of 2013 my household net worth stands at $331,838.63 And a milestone has been surpassed during this past quarter. For this first time since I began recording my financial statistics, our cash and investments have now exceeded my partial piece of California real estate in value. This past quarter alone on my balance sheet really tells the tale of how the market has behaved over the last 5 years. During the last three months my partial piece of real estate declined by roughly $10,000, while our mutual funds sky rocketed by a little more than that same amount, accounting for the increase in our overall net worth from the 3^rd quarter of 2013.

What is most impressive to me in the equities market is that there was an abundance of negative news that hit the news headlines over the last few months. Bernanke and the Fed set the tapering wheels in motion, the launch of Obamacare has been botched and left an even greater level of uncertainty in the health care industry than ever before and the budget deal that the Congress and Senate are ramming down our throats behind closed doors is an absolute abomination. And in the face of all this, the market has continued to rise like a magnificent sunrise over Lake Michigan.

I do not believe that we will see a freefall crash in 2014. In fact if we look historically in years past there has been a significant jump in equities between Q4 and Q1 and I don’t see a reason why Q1 company reporting in 2014 will be anything less than neutral. I do forecast though that Q2 and Q3 in 2014 will be more in line, possibly even negative, to balance out the last five years of this market surge to reflect more historical market averages.

Make no mistake about it, since the freefall in 2008 the overall stock market has been on a powerful surge that we have not seen since the tech boom that was the 1990s. I also am finding that it was no coincidence that roughly five years ago to this date I first picked up Dave Ramsey’s “The Total Money Makeover,” and started my journey to becoming debt free and steadily investing with confidence and a game plan. I had absolutely no idea five years ago that getting on a budget and living on less than I make, becoming debt free and regularly investing for retirement and through a taxable brokerage account, that I would be sitting here today with the types of numbers that our balance sheet is reflecting. I mean our average annualized return percentage across our investments are in the 20s, our investments (yes excluding cash, art and jewelry!) are worth more than the piece of California real estate owned and we are essentially on cruise control as we move toward the pinnacle point.

But I’m finding my peace and happiness in more than just numbers and percentage returns. I am also grateful to have had the opportunity over this last calendar year to give more than I ever have before in my life. We’ve tithed our *net income across sponsoring 3 children overseas and giving to our church. Plus we have provided offerings above and beyond our tithe to help contribute to various causes that God has presented before us during the course of this past year.

*Note: we tithe our net income because I feel that it takes the hand of God through a miracle to lower our t axes, so the way I see it is if God wants more, He knows exactly what to do!    

While I know the direction we are heading with our household finances, it’s our consistent and prioritized giving that I think is laying the foundation for my contentment and happiness currently in life. In Dave Ramsey’s class Financial Peace University, he talked about the paradox that as you give more that you will have more. When I first heard and reflected on that message I understood and expected that as we gave more that we would receive from God the love and fulfillment from helping grow His kingdom here on Earth and that would be the extent of it. Today I’m of the belief that while this previous statement is true there is another piece that I crucially missed. And that piece is this: At the start of my financial journey God entrusted me with a little and through following His word on how to handle His resources that reach my bank accounts, He has only provided more and more for me to handle. I honestly can’t seem to out give God. Since becoming debt free we sought out and found a church and programs that we send our tithe to, and during THESE last 5 years when the news headlines scream about a disparity between the rich and the poor, He has provided my wife and myself with pay increases, bonus after bonus, company matches and mutual funds with returns that have beat my expectations.

So needless to say I am very much looking forward to 2014. As the market continues to rise and as it comes back to more normalized historical patterns we will continue to invest steadily and readily into our small army of mutual funds. We will also push forward on doing a little more spending, a little more giving and of course a little more investing ! So from my family to yours I genuinely wish you a Happy New Year and all of the best for 2014. 

My Book Review: "The Blessed Life" by Robert Morris

“The Blessed Life” by Robert Morris is quite a gem of a book and I would highly recommend this fine piece of reading to anyone within earshot. Aside from the central message of the book, which speaks about following good stewardship with our dollars and cents, I felt Morris did an excellent job with the flow of the book. The first part of the book eloquently conveys the biblical principle and importance of first fruits giving, and then transitions smoothly into what that example looks like for a modern day household, and finishes with what a lifetime of biblically based financial stewardship looks like over the long term.

I especially liked Morris’ message that highlighted and gave an overview with bullet points about those with the gift of giving. He goes into why accumulators of wealth that prioritize giving do a complete evaluation and thorough inspection of the projects and missions that they give to. Morris also addressed and challenged the viewpoint of seeing wealth as evil, and challenges the reader to see wealth instead as a tool that can be used to further the kingdom of God on Earth.

On a personal level I have been debt free for 5 years and within the last year have just begun to spread my wings financially speaking by doing a little more investing, spending and giving than in years past. And though I take a rough and tumble type of attitude when it comes to Christians/the secular world that calls for poverty and views wealth as evil, I found Morris’ book to be an unbelievable breath of fresh air. In my point of view, “The Blessed Life,” is a great foundation and the type of book that I am going to seek out to read more and more in 2014 and beyond. I really feel that it provides the spiritual guidance and angel in the ear type of advice that I need reinforced as my wife and I help build God’s resources during our time on this Earth.

His countless stories in the book about being in tune to where God wants to direct His resources were remarkable to me and have given me confidence to continue on in our financial journey. In all honesty, at least in concept, the early stages of Dave Ramsey’s baby steps were easy. At least for me they were simple: Buckle down, live on less than you make, work like a madman, budget, trim the financial fat and get the hell out of debt. On the other side of that though is where I’ve found myself at and snowballing into more and more year after year. And that’s the steady investing, increased lifestyle and increase in prioritized and spontaneous giving. It’s in these latter places where I have felt a bit insecure. How much is enough? How nice is too nice? Am I really capable of being the good steward that God needs when we have several million dollars in our accounts decades down the line?

It’s definitely going to take a ton of prayer, working together with my better half to be in tune with where God wants His resources to go, but books like this are definitely a great starting ground as my wife and I move towards baby step 7, building wealth and giving a bunch of it away.

My Coming of Age

As 2013 comes to a close and 2014 is appearing on the horizon, one inevitable change in my life is coming and there’s nothing I can do to stop it; And that inevitable change is the closing of my 20’s and the start of my 30’s. Before our calendars turn to 2014 I will be celebrating what will be the last year of my 20’s and that in itself has caused me to reflect a lot on the last decade that was.

My 20’s can be best summed up in three phases. The first of which was my early 20’s, during this time of my life I had youth and independence on my side, and none of the knowledge and wisdom to go along with it. By this point in my I had been living outside of my parents’ house (and entire state for that matter) for a few years already, but I was only just beginning to learn what it meant to be an adult. I made a lot of stupid mistakes, mistakes that ran the spectrum from dating, to my use of time in college, to part time work choices and not spending any time or effort addressing my hurts and hang ups that had followed me from my youth. But somehow through God’s grace I had managed to meet the woman of my dreams that would eventually become my wife. And from that starting point I had no idea the growth and connection that we would eventually find within ourselves and each other.

My mid 20’s were a period of revelation, healing and getting my life together. I had come clean not only to my best friend but most notably to myself about the addictions that were plaguing my life. And probably more importantly, I began to address where those demons had come from and started to put the work into dealing with the pain and hurt that I had experienced but hid away from myself so long ago. Coincidentally this was also the same period of time that I was introduced to the world of Dave Ramsey. And Dave’s financial baby steps I think laid the groundwork for me to move forward and began my journey of emotional healing and learning to love and forgive myself as well as others.

By my late 20’s I hit full stride in each of the areas that I had spent my time and energy working on. I feel that our marriage is thriving thanks to the work we put in with individual and couples counseling, we are on track with our household finances having become debt free and having a plan for all of our disposable income, my career is on a great track with an excellent company, and overall I feel like I have my head on straight and am taking the right approach and attitude with a lot more aspects of my life than when I did when my 20’s began.

So this is it! The last year of my 20’s. I don’t exactly know what my 30’s will bring but I’m pretty sure it is going to be a blast getting there and seeing what life has in store for this next decade of my life. But for now I am going to do my best to relish and enjoy these last 365 or so days that I can call myself a 20-something. 

My Season of Giving

This Christmas season has been a very joyous and heat-felt one for us thus far. It has been close to a year and a half that my wife paid off her student loans and we officially became a debt free household, and this Christmas season has kind of been the first in which we are coming to realize just what that means.

In addition to our Christmas budget we also have been saving even more than in previous years to do spontaneous giving. It has been absolutely incredible, fulfilling and humbling to help out various causes and needs within our families and the city we live in. Our home church participates in an excellent program, partnering with a local organization that provides year round education and care to single-moms and their children here in Chicago. For the Christmas season our church placed a Christmas “Wish List” for the organizations participants. Lists included the bare essentials for children, socks, underwear, gloves, coats, shirts and jackets, and shopping for these items was an unbelievably humbling experience for me.

Usually when out shopping, especially for clothes, I do my best to get in and get out of the store as quickly as possible, finding only what I need at the lowest price. It wasn’t until I was in the store with my chosen child’s list in hand, that I slowed down, sought out quality and honestly would have been perfectly okay blowing my entire giving budget to help meet this child’s needs. I remember being the age of my chosen child and having a selfish list of toys and various other items that I didn’t need. Instead this child was in need of clothing essentials and basics, and in the climate I’ve grown accustomed to here in Chicago, can honestly make the difference between life and death when the Lake effect weather takes grip on the city.

So I paused a lot and did my best to stretch my budget as far as it would go while buying items that were of the best quality. I stopped often and had tears fill my eyes in the store, because I really did want to fill my cart to the brim with everything and then some for the child I had chosen. I couldn’t remember the last time I wanted to spend so much while shopping. It was quite an interesting place to be at given my frugality over the years, but I suppose that was the point now wasn’t it? I whipped my budget into shape, got out of debt, am steadily investing for the future and freed up my monthly income to be able to give where there is need. And while I didn’t buy out the entire store, I genuinely hope that my child’s Christmas season is a happy and loving one, and I hope that somehow my gifts will help in some way to add to that.

In addition my wife and I chose this year to open up an Educational Savings Account with a considerable initial contribution for one of our nephews. This was something that we had been talking about doing for a few years and we finally decided to pull the trigger on it this year. Admittedly a part of my motivation to finally do it came from my own extended family.

I received news just a month ago that one my nephews, a current Senior in high school, will be enlisting in the US armed services at the conclusion of his Senior year. I asked him why he would chose this, and a part of his reason was to be able to fund his way to college.

And that piece of his reasoning gave me a pretty solid punch to the gut. Up to this point my wife and I have done an excellent job of taking care of our own household first to be able to give, and I think God wanted to show me that the time to step up our giving is now. While we are on a trajectory through our investing, budget planning and plentiful household income, there are opportunities to give that we don’t have to wait to reach the pinnacle point to hit.

While I am proud that my nephew is willing to serve his country and not take on debt to finance his college education, a huge piece of me wonders, “what if?” What if I had opened an ESA for him, say when he was 10 years old and our extended family helped fund it until now? If the money was readily available, would he consider the military as an option for his future? The truth is that I don’t know. This is the current reality that we live in and I can’t go back in time to change it. Instead I told him that I love him and I genuinely hope that God leads him to where he is supposed to be in life. And while is in service, to be the best Christian example that he can be and to let his light of faith shine bright each and every day to those around him. And I also saw it as a reality check to not wait for some giving opportunities to come to me and instead go out and make them happen.

So as the sun is beginning to set on 2013 I feel like we are getting a good running start on spending, saving and giving our disposable income in ways that bring happiness and enrich our lives while paying attention to the needs that God calls us to wake up to.

My Career Choice

I wanted to spend today’s post sharing about my career track. For just about six years now I have spent my career working in back and middle office operations for a couple of large and internationally known financial firms. Before my recent transition to my current employer, which took place a month ago, I weighed my options of embracing my passion for personal finance and considered a track to becoming a financial advisor.

I feel that I spent the better part of six months doing informational and formal interviews, networking and reading articles, all in order to get a proper gauge on what a career as a professional financial advisor would entail. Through this part of the process I met with some great people at Morgan Stanley, Merrill Lynch, Fifth Third Bank and ING Financial.

And in taking the time to learn about the career path, I learned that it was not an avenue that I wanted to pursue with the backing of medium to large sized institution. Now please don’t get me wrong. There are a lot of great people and advisors at the aforementioned firms that take care of their clients and approach with the heart of a teacher rather than the heart of a salesman.

But when I dug into the details I found that this career path with a larger sized firm was not for me. Without fingers pointing or names named, all I will say is that the “formal” system around breeding financial advisors focuses on generating sales rather than taking a holistic approach with helping clients. The general idea that I walked away with was that the advisor’s focus at larger sized firms is to generate new clients and grow the assets under management through volume rather than working with clients to improve their personal financial situations.

For me personal financial advising should have a holistic approach. As an advisor I would want my focus to be on helping clients see the importance of having an emergency fund, paying off all of their debt to open up monthly cash flow, consistently saving for retirement through 401ks and IRAs and having the right kinds of insurances in place, rather than moving from client to client just to beef up my reported assets under management and let a cookie cutter and “conventional” investing approach speak on my behalf.

In truth I do see working as a financial advisor in the near future. I do however I see myself opening up my own boutique firm once our household investments reach the pinnacle point in which said investments earn more annually than we make annually, which in truth is a long term goal for us that will be a decade or so in the making. This way I can run the show the way I want under my terms with a focus on improving the financial households of clients rather than building a client rolodex. 

For now I thoroughly enjoy what I do completing middle office support for traders and portfolio managers for my current employer. From my point of view I am a part of a larger team that is handling God’s money. After all the Earth is the Lord’s and the fullness thereof. The money being managed by my employer, which in name is legally owned by large institutions namely for pensions, from my perspective, belongs to God. We are collectively preserving and growing God’s money so that when it is funneled to retirees, that money is used to help seniors meet their financial needs in retirement, make donations for charitable organizations, pay for college for future generations and even more things beyond what I have mentioned here! And each and every morning as I hop off my bus and make my way to my office in the loop, I pray that God guides my heart, spirit and mind to make sound decisions as I handle His money and resources to the best of my abilities.

It’s kind of an interesting place to be. I enjoy my team and the work that I am currently doing every day and I am also excited for the future to see what life will look like after we reach the pinnacle point. It is an incredible blessing to be at this point in life and my career and with Thanksgiving being this past week, that is something I am certainly thankful for this year.

My Return

Greetings my friends! I would certainly agree with you that it has been far too long since my last post but be rest assured that much has taken place and I’ve been one busy little bee! So let’s get caught up.

The Move

My wife and I decided to move from the Lincoln Park neighborhood, which has been home to us for the last 5 years and move a few neighborhoods north to Edgewater. Previously in Lincoln Park we were living in a cozy 1 bedroom that was priced several hundred dollars below market in the area, mainly because it was on the first floor of the apartment building. Which apparently has some kind of stigma with it, but I loved it because were in a sizeable unit in a nice neighborhood for well under $1,000 a month and never had security issues.

But now we’ve reached a point in our lives where we wanted a bit more adventure, a little more elbow room and of course a nice lake view. The search was long, strenuous and frustrating at times. But when we finally came back from Europe we came across the unit that we are in now, and I must say that I instantly fell in love with it. There’s killer views of Lake Michigan from our living and bed rooms, parking in building (even though we still don’t have a car, the option still is nice to have!), there’s a party patio on the roof deck, a doorman 24/7 and we are quite literally steps away from the beach. And it was literally only $200 more in rent from our Lincoln Park digs.

And the apartment unit itself, man, all I can say is that our landlord (an individual condo owner) did a great job renovating and knew exactly what he was doing. So we have a little bit more elbow room, a newly renovated place and are in a more family friendly neighborhood where I am no longer one of the oldest guys on the block. Which I have come to appreciate as 30 is creeping up on the horizon.

Even better is the fact that our landlord ran a full “credit check” which included reviewing our credit reports and employment history. So I, having lived without credit for 4 years am able to rent a great apartment in Chicago, so take that credit myth monsters! No headaches, no hiccups, no defending of my debt free lifestyle was even needed during the process. So now we are settling into the new apartment and learning a whole new part of the city, which leads me to.

The Job Change

I had spent 5 years with my previous employer in what honestly was my first “real job” out of college. And although I did not see myself being a part of the changes that my particular division was going through, I appreciated my time spent there and certainly have a flood of great memories and met some amazing people there and for that I am forever grateful. But most of all, I used those paychecks to become debt free, plant a solid financial foundation and of course cash flow my wedding.

So when an opportunity presented itself to continue doing the same line of work for a new employer, I weighed my options and had a few months worth of interviews to go through in which I met with the entire team that I would eventually be joining. And yes I will brag that I am completely debt free and having a 0 credit score had absolutely no impact as I applied for and currently work for a global financial services company. So please, please oh please don’t let anyone EVER tell you that you need a credit score to find employment. It’s just not true and you can point to me as an example, I’ll gladly take the heat for you! And if an employer does weigh your credit worthiness as a factor on whether they will bring you onto their team, trust me, you wouldn’t want to work for someone that stupid (Although bankruptcy and being behind on payments is an entirely different story, I’m speaking entirely on an employer basing their decision on hiring you on your credit score). And after prayerful consideration and weighing several competing offers, I happily agreed to join my employer and have now been a happy team member for almost a month now.

Although we are still in the honeymoon phase, I genuinely feel happy to go to work each and every day. Now please don’t get me wrong. Every place has its own ups and downs and I have been working in finance long enough to not be naïve enough to believe that everything will be peaches and cream each and every day forever. But I am taking a different approach with this role. Each and every morning before stepping one foot into the office building, I pray to God that he brings clarity to my mind, guides and helps me build knowledge and helps me perform at the best of my abilities as I handle His money every day.

And I think the approach that I am handling God’s money has made monumental difference in how I approach work. I feel more eager to take on extra tasks outside of my daily responsibilities, I am not as easily frustrated when work volumes tick up and I have found myself not groaning when our team is faced with being shorthanded during the work week. The best example I can give is on Fridays. The typical verbiage (and I have found this to be “typical” in most work environments) at the end of the work week is to hear colleagues say out loud, “Thank God it’s Friday,” or something along those lines. But for me this role has re-energized me and I am actually pretty happy to come to work and even stay late. I am enjoying what I am doing day in and day out and have found myself the last few Fridays telling my wife, “Man, I seriously can do that for another 5 days in a row.’

Which certainly has made things very interesting for me the last month or so. I love waking up and coming home to our sweet new apartment and I love going to work every week day. I’ve seriously taken a few step backs almost every few days and have been amazed at how much change has taken place and how happy I am in life.

My wife and I are firing on all cylinders, our monthly disposable income has been more than anticipated and we have seamlessly been on the same page regarding how to allocate that money (I’ll give you a hint, we’re saving some of it, spending some of it and investing some of it!), work is great, the home life is great and I honestly don’t know what we want to set as goals next. We are in cruise control to pay cash for our first home within 5 years and have a few travel trips planned, and I’m becoming inspired to find new ways to creatively give. But I think 2014 will be a time for me to re-examine my goals, hopes and dreams. And I’ll be happy to share these with you and so much more in future posts.

So for now thanks for reading and I’m looking forward to sharing my journey with each and every one of you.

My Amazingly Awesome Trip to the South of France

 

 

It is without hesitations or reservations, partnered with the fondest of memories that I share with you that the French leg of our European holiday was my favorite part of our vacation. We set out for the south of France from Frankfurt. But we opted for an 8 hour train ride as opposed to a flight. Two factors weighted into this, the first was that the price difference was substantial, but the other piece was that our train ride would take us along the gorgeous and picturesque German and French country sides. And with an itinerary that made our train trek during daylight hours, we simply could not pass it up. Here’s a few pictures of us at the train station and during our embarking journey to the south of France.

 

 

The only downside to European rail travel that I could find was the meal offerings. I had genuinely expected full meals to be available for longer routes such as ours and while our train did have a cable car, I was underwhelmed by the sandwich offerings. Had we known this ahead of time we would have packed ourselves a lunch with a bottle of wine during our journey, as several of the seasoned European travelers had done that sat around us. But nevertheless the views were breathtaking and, although scary at times, the speed of the rail was impressive and I found it very cool and rather manly to be traveling at such high speeds.

 

Our “home base” in France was a beautiful and romantic town called Aix-en-Provence. Many years ago, thanks to a wonderful site called couchsurfing.org, my wife and I met and hosted a French couple that we have since become very good friends with. Of course they had visited and stayed with us in Chicago, we had met up in Nashville, Tennessee earlier this year, and felt it was appropriate to meet up with them during our European holiday. And they were the most incredible hosts that we have probably ever stayed with. From the moment we stepped off the train and met up with them we felt at home, welcomed and loved. I feel immensely blessed to have friends like this in my life.

 

And man were we spoiled. Our breakfasts consisted of delicious French pastries and what felt like an endless supply of nutella. And I must say that our French friends know their way around a kitchen pretty well and we enjoyed probably the best meals of our journey in their home for lunch and dinner. It was everything I could dream of, a picturesque setting in the south of France with great friends, wining, dining, laughing and catching up on life. I mean it when I say that I would seriously consider moving to the south of France.

 

Our friends lived within a reasonable driving distance of the city center in Aix, and the city center, just like the country side, took my breath away. There were endless streets in the marketplace with incredible architecture and I felt like every 5 seconds I was stopping to take pictures. And having our friends to help us navigate around town saved us so much time and hassle. I felt like we made a great use of time seeing the best sights and did not get lost one time, which definitely would have happened if my wife and I were left on our own. Admittedly, I have fallen in love with Aix-en-Provence. The city center goes beyond what I expected a bustling vintage European city to be like, and the rolling hills and lush green mountain sides, well, words on paper (or a web site) just do not do it justice!

 

 

 

From Aix our friends took us on a weekend trip to Avignon which, surprise surprise, left me speechless. The city center in Avignon felt a hair “more modern” than Aix, but the sunsets from this city were without question some of the best I have ever seen in my life. As if the sights were not enough, our friends also took us through a wine festival (a common occurrence I’m assuming that happens in France, which by the way needs to happen a lot more in Chicago), out to dinner for brick oven pizza that (and hopefully I don’t lose my Chicago card for this) puts deep dish pizza  to shame! And the highlight event during our visit to Avignon was a 3-d light show in the Palace of the Popes. Although the narration was in French and our friends did their best to translate for us, the views and images on the inside of the castle walls left my mouth agape for the entire show. It was without question the best visual eye candy I have ever seen and if you are anywhere near Avignon I highly recommend seeing the show.

 

 

And of course any trip to the south of France would not be complete without a stop in Marseille. Our friends pointed out that Marseille has an interesting reputation among French cities. Based on its location, Marseille is an immigration hub for the Middle East and North Africa for immigrants making their way into Europe. With that as a background, this city has seen its problems with trafficking, drugs and gang activity skyrocket within the last few years. So when our friends shared with their colleagues that they would be taking their American friends to Marseille, our friends were cautioned, “You must be careful, it is like Chicago down there.” To which our friends replied, “No, it’s ok, our friends are from Chicago!” To which our friends’ colleagues looked on horrified, wondering why they would make friends with American mobsters J!

 

All puns aside Marseille is a very interesting city. I think gritty is the best term to describe the city center. The center moves at a pace similar to New York with the external feel of Harlem. On any given block there are Islamic women dressed traditionally pushing  baby carriages, seedy looking characters walking from flat to flat and businessmen on scooters honking and speeding through like bats out of hell. Yet at the same time the architecture was stunning on every block. The Mediterranean influence was so much more present than I expected and really added to the flavor of the area. And once we were out of the city center and close to the Mediterranean Sea it felt as if the entire world had opened up. The streets were just a bit larger and the city center grittiness felt like it was replaced with a beach front metropolis, almost a healthy mix between San Diego and downtown Chicago. There we were greeted with even more stunning views that I’m more than positive made me look like a tourist every step of the way.

 

 

By the end of our French travels it was very hard for me to move onto the next and final portion of our vacation. I would like to point out that even beyond the food, the rich history and the picturesque settings, I really enjoyed France because of the company that we were with. I feel like friends that my wife and I both click with, let alone a “couple” set of friends, are very rare to come by no matter the continent. So I truly cherished every second we got to spend with our French friends. From the late night conversations, to the impromptu picnic to walking the street markets in Avignon, to seeing their hometown to the delectable breakfasts and dinners that our hosts prepared for us I genuinely enjoyed every second of it. Words alone cannot describe how humble and happy I am to have friends like these in our lives. And even though we live continents apart, I am positive that we will stay close and will see each other again soon.

 

My Two Week Reset

The brilliant words of Bob Dylan have never been truer than ever before at this point in my life. “The times they are a changin’.”

I have a ton to update you on and I offer my sincerest apologies for starting out this quarter’s blog flat. The first bit of news which I want to unpack with you today, that has caused me to be giddy with delight, is that I have officially made a vocational change. It was tough for me to keep this bit of news quiet as I was awaiting final confirmation, but now that it’s here I am very happy to share this with all of you.

Later this month I will be transitioning to the next chapter of my professional career and am trading in a U.S. anchor for a certain Swiss investment bank. After months of searching, interviewing, hunting and praying, I feel like I have finally found a great place to start the next phase of my (optimistically) young finance career. The I’ve taken on is essentially providing operational support for the firm’s traders based in Chicago.

During the interview process which spanned just about 2 months in length, I met with the entire team I will be working with including lower and upper level management within the division and I was pretty impressed. Now I won’t be naïve and think that everything will be peachy and not have a care in the world. I’m realistic enough to know that every role at every firm has it’s ups and downs and successes and challenges. But what captivated me with  this particular role was that everyone, from newbies to the division’s head honcho, are on the same page concerning best practices, how to provide the best service to internal traders and the elevated responsibility levels expected from every team member regardless of title. Plus the head honcho was a fan of Jim Collins’ excellent book “Good to Great,” so there was that too J And when an offer letter came through it really was a no brainer.

But I still had to say goodbye. Given that my wife and I are blessed to be in the financial position that we are, I opted to finish out the week I was working and take 2 weeks off to start anew having taken a breather. On the technical side for the month of October, my wife’s paycheck will cover our living expenses and any residual income that I bring in will head to our taxable brokerage account.

But on the personal side I found that it was tough to say goodbye. For the last 5, almost 6, years I went nearly everyday to the firm’s South Loop office. I started there broke, without work experience, single and heavily in debt. I emerged and left having put myself on the road to financial peace with the help of their paychecks, married, an experienced finance professional and debt free. But it was more than just the paychecks.

I spent my last few hours there as an employee making the rounds to old divisions that I had worked in and bid adieu to an All-Star list of my favorite colleagues. It left me feeling like the last 5 years had gone by very fast. And also that I really enjoyed and was grateful for having had the pleasure to work with some pretty incredible people.

Many had a wealth of experience and took time out of their days to teach and help a young kid who couldn’t spell finance when he got out of college. Among those I worked with, I would say we were a rather eclectic bunch. There were semi-pro football players, ex aerobic instructors, art history majors, a few enlisted in our armed services, aspiring nutritionists, freelance DJs and finance professionals whose previous employers had shut their doors.

And believe me, our South Loop office was anything BUT glamorous. But for 5 years in this little building that looks like a prison, in a building full of seemingly the most random people, there gathered together a group of people that did the best job they could with excellent client service. We laughed, shared our stories, shared heart break and celebrated life together. Sometimes with food, sometimes with drinks.

I shared with my wife that the entire building was kind of like a business professional version of the “Bad News Bears.” We weren’t flashy and there aren’t spiffy white collar executives pacing the halls. Instead there was a ragtag bunch brought together to steady the anchor, and they did a damn good job of doing it. And as I headed towards the elevator and the eventual exit I had Simple Minds’ classic 80s hit “Don’t you Forget About Me,” blasting on my ipod, and tears began to well up in my eyes.

I was/am incredibly happy to have had the experiences that I’ve had for the last 5 years. The people I met, the challenges faced, the goals met, the frustrations felt, I wouldn’t trade it for anything in the world. It helped shape me into the person I am today, and for that I will always owe a debt of gratitude to my first employer.

So with that said, I’m 3 days into a 2 week “reset” as I refer to it. I have time to write and share my life with you, as well as get myself rested and ready for this next chapter in life.

Gone will be 6am start days, replaced with trading hours that will go roughly from 8am to 6pm. I will be working in the Loop for the first time in a fancy pants building. And on top of that our household will need to stay sharper than ever when it comes to our personal finances. Previously our household earned an income that had us right in the middle of the 25% tax bracket. With this new role we will be (in my opinion) dangerously close to crossing into the 28% bracket. And with a bonus structure and overtime available in addition to my salary, that very well could be a possibility. So we will do a thorough check up to ensure we are maximizing all pre-tax savings vehicles available to us to lower our taxable income and you can bet I will pass along the advice to you!

For now I’m going to kick back on my fold out chair and take in this stunning view of the city on this beautiful day. Because very soon, the Lake view near where we currently live will be traded out for one on the Edge of the water J But more on that later.