Just wanted to let the individuals whom read the site know that I’m alive and will hopefully be writing again in the not too distant future. Got fairly sick and have been out of action for the past month or so but things are looking better now. Fortunately it’s given me a chance to read quite a few new books and has ‘refreshed’ my mind a bit in regards to writing.
It’s a principle that I’ve always held close in my personal and business relationships, though even the best laid plans can often come to ruin.
Uncertainty about your financial future can drive one’s sanity to the brink of destruction, whether that uncertainty is artificial or not. That same uncertainty can cause you to work hundred hour weeks, start ventures which have always been looming in the back of your mind in an attempt to offset a potential loss of income, and cut back your spending to the bare essentials; basically it can turn you into a money obsessed Zombie, but at the same time it can also lead to new opportunities and financial freedom as a result.
What am I getting at? I’m still trying to figure it out really, but I do know that I’ve been there before and I’m at that point again in my life. Two of my larger personal contracts which account for the majority of my income are in an industry in a region of the country right now that is, for the lack of a better word, lacking. Seeing employee numbers cut from fifty to under ten in any one company in an effort to ’stay afloat’ over less than a six month period can be a stressful experience for a contractor on the other side of the US to go through.
Last time I had this feeling was approximately seven years ago when I was getting out of the military after spending two years in various hospitals recovering from a parachuting accident that left me with some life altering injuries. I knew that in a few months from that point, the paychecks would stop coming and be replaced with a pension check that could only be described as supplementary income that wouldn’t cover the bills. I had to find a new profession. After brooding and stressing for a couple weeks, I decided to do something about it and within a couple days, I had a nice corporate job lined up where I made plenty of money, my stress was relieved. It isn’t as simple this time though, as the checks haven’t stopped coming (and I don’t know for sure if they will or not to be honest) but I do now have a mortgage to pay and a financial future to continue working towards. I guess it was a lot easier with a relatively blank slate.
It’s not adversity in your financial situation that will cause you such anxiety, it’s the uncertainty of whether or not that adversity will be coming around the corner in the near future and the inability to fully plan for it. So while I can continue to try and create contingency plans, work on new ventures and cut back my spending as much as possible, all I can really do in addition at this point is to let go of the anxiety for the time being and hope for the best. History has taught me that it is the most important ingredient in getting through these situations.
If only it were as easy to actually do as it is to tell yourself to do. Ok, enough brooding, back to work for me.
While I have a couple posts in the pipeline (regarding retirement without social security and a couple other topics), I’d like to hear, given what you’ve seen me write about thus far, what you’d like me to write about in the future. While I’m no real ‘expert’, whether it’s a question concerning a situation that you’d like my advice on in a Q&A format or just a topic you’d like to see me research and write about, send it on in. Anything I use will be properly credited to the source, and don’t be ashamed to share your own web site or blog and I’ll be happy to plug it for providing the ideas or questions to answer.
You can reach me at cinder@socialmarginal.com. Thanks in advance.
Just got back from a nice little vacation in Showshoe, West Virginia for the last weekend of the season. While up there, we found a nice studio condo right in the resort that we might be buying in the not too distant future as our first real ‘vacation home’, sort of exciting. You can see an ever elusive photograph of yours truly below. Catching up on my day job at the moment, but expect some new articles up in the near future.
Investing in a friend’s small business while it is either just getting started, needs additional capital to expand further, or just investing your time in helping them grow the business with your experience can be a very stressful and trying test on a friendship. The hardest part for both parties in such a situation is to really remember that ‘business and business’ and to have the discipline to keep it that way, which includes keeping your emotions in check. However, if you feel that it would be beneficial to both parties and you can make it work, it can be a very financially invigorating experience.
I’ve personally done this with a friend’s business by investing both a good deal of my time and a nominal amount of money (to provide services) to help him expand and move it to that ‘next level’. We’ve been through a lot of disagreements and trials on the business side, but in the end, as of now at least, the business continues to grow and move in the path we wanted, we still respect each other’s expertise in our respective areas and understand that they balance each other out, and most importantly, we’re still friends (he’s actually going to be best man at my wedding).
Here are a couple things which we did that worked and carried us through an expansion experience with me coming into an existing company to assist:
Generally a time will come when you’ll be presented with a choice about whether to stay on as a partner or to ’sell out’ and leave your friend’s business in a better situation (hopefully) than you came into it in. I came to this point and after some discussion, we decided that, given how well we worked together, I would stay on as a partner and continue to help indefinitely and draw a salary for work as ‘Operations Manager’. It’s not my day job, but it helps augment my other income and as a partner I have additional motivation that I’m not only helping to grow my own share of value in the company with the hard work and dedication that I put into it, but also my friend’s.
In the end, we found that it actually helped both of us have more respect for each other on a personal level and it actually enhanced our friendship. It was because we handled it right for what we were doing and planned it out so that our differences would end up augmenting each other rather than clashing. This, of course, won’t be true for everyone and I urge anyone considering going into an existing friend’s business to carefully consider it and find a path that is right for both of you so that you can retain that friendship in the end.
Business is Business. Friendship is Friendship. It’s as simple as that, and if you keep it that simple, then you’ll have a much greater chance at success in both areas.
When your full-time workplace is your home, you can still “leave your work at work” at the end of the day and come home for some relaxation, you just need to adopt the right mentality to be able to do it effectively.
Since moving across the country to support my fiancee in a new job position and now working full time self-employed, my workplace is my home. To be specific, my workplace is a ‘granny loft’ upstairs in my home, and I do my best to make sure it stays there. I’m fortunate to have a ‘granny loft’ to make into a nice sized office that has a door at the bottom of the stairs leading to it in our home, but if you don’t, any room can act as your office if you make sure that’s all it is, at the very least for a specific time period during the day. Set up this room as a true office and make a point not to clutter it with anything else that may distract you. The point is to make you feel like you’re truly ‘at work’ when you’re there. Doing this also has tax advantages, consult a CPA or research yourself for further information on that.
The most important part is to set a schedule. If possible set a schedule of hours every day where you will be working in that office and only working, shut the door to your personal life. If you have children, this means looking into daycare for during those hours so that you can shut the door and work undistracted. In my case, I work from 7-5pm every day, however, due to the nature of my contracts, there are times when I have to work outside of those hours due to emergencies and such, but I make a point to not allow that to effect me being back in my ‘office’ at 7am the next morning.
Finally, if you are self-employed and dictate your own work hours, give yourself vacation time and actually take it. If you are serious about it and stick to a strict work schedule, you’ll need it, as will your family. Be reasonable but generous, it will allow your work environment to truly become one and make it easier to become accepted as one by your family.
I’m by no means an expert at this, I’m still relatively new to it, but that’s what has worked for me and hopefully it can work for you as well. You can be very successful in a home office if you treat it properly and you stick to a strict work schedule. If you have ideas of your own, please comment on this post and let everyone know what they are.
I’ll start off by saying that I am far from a ‘rich’ man, I am certainly of average means, I do work hard though, and the amount that I make directly is proportionate to how much time and effort I put into it (and a little luck). I reached a milestone of sorts today, that, aside from retirement, tax (I’m self employed), and emergency savings, I’ve finally reached $20,000 in my discretionary savings account. The best part about it, to me, is that I only started it in September of last year with nothing.
It’s funny, I use to be a gadgetholic and spend my extra income on various things such as new laptops and televisions, etc. Ever since I started that account, not by reading any article, but by my own internal guidance, I’ve started to see how frivilous such spending behavior is and it has innately made me into a better consumer. Now my enjoyment comes from watching my savings account grow, knowing if there ever is that cool new toy or whatever, I can buy it, guilt-free; of if I’m surprised with a child, it will relieve some of the financial stress from it and allow me to enjoy the excitement as I should. And now when I think about buying those cool toys it causes me to pause and consider if I truly do want them and whether or not I’ll really get a lot of use out of them, and if I don’t, I toss some money into ‘my’ account and I’m just as satisfied. Don’t be mistaken, I don’t deprive myself of anything but guilt and a lot of waste, I still buy plenty of ‘gadgets’.
I urge everyone to open a discretionary savings account at a financial institution that offers High (relatively these days) Yield Savings and give it a couple months, if you can only afford to transfer $5-10 in it here or there, you’d be amazed at how fast it grows and how quickly you become addicted to it, and it’s a good addiction to have in my opinion. I use ING Direct, because, well, at the time they had some of the best rates (they still do have good rates) and they have excellent customer service and make it easy to transfer money between accounts when needed, regardless of your needs. Watching that little “Interest Earned this Month” total at the top of the Savings account page is certainly satisfying.
Ok, that’s all, I’m done bragging; certainly not about the amount of money saved for ‘no reason’, as it’s miniscule compared to most I’m sure, but about having the self-discipline to make my plan happen and to reach this, what I feel is an important milestone in my financial growth. Hopefully when people see this that are knee high in debt and have no savings, they will realize that it is possible to turn it around and start living without (relative) financial stress.
As I posted yesterday, I’m in the process of paying off all my credit cards, especially the ones that Rate Jacked me for no reason at all. Well Bank of America seems to have Rate Jacked over a million people with perfect payment histories for no reason at all. I’m proud to say that the balance is now zero and they are now forever sock drawered. I also have an emergency checking account that I keep with them that I will be closing thanks to their rate jacking decision.
In other news, I’m working on an article about not spending more than you can afford (duh, huh?) but trying not to make it cliche and giving some good example and alternatives. Look for it in the next couple days. I also removed the AdSense ads as they’re pointless right now and they take away credibility as to why I’m writing at the moment. (Not saying that ad money or referals are bad, you can shop via the Amazon link in the Blog Roll and earn me money to support the blog with your regular Amazon purchases, heh heh)
Update 03-01-08: I feel like a sell-out, but I wanted to keep the card open to decrease my total credit utilization. I called Customer Support today and asked for a rate reduction since they rate jacked me without any real reason, other than a high utilization, and that they were just trying to profit from customers who actually had good payment records. Last time I did this, when I had a balance, they just apologized and told me it was policy and they couldn’t lower my APR from what would soon be 27.99% (Millions of people got jacked to these sort of rates effective in May). This time however, explaining the situation and telling her that I wasn’t all too happy with BoA, and with a Zero balance on my card, the courteous Customer Service agent transfered me to Retention. So I got there, told them “I don’t authorize any hard pulls” (also note that my credit report does not reflect any of the zero balance paydowns yet, they still show the high utilization across the board for the most part), and explained the whole story and asked for a lower APR. He said “Let me see what I can offer you”, came back a couple minutes later, and told me that they could permanently decrease my APR to 12.99% ‘Fixed’ (which at least is an acceptable rate, but not one I would carry a balance on). I immediately asked that if I ran up 90% utilization on the card and held it at that for a year or two, providing I always made payments, even minimums (worst case situation), if it would stay at that 12.99%. He responded “Certainly”. I’m almost tempted to try it, just to see if they were lying, but I don’t want to spend the money on interest doing so.
So, the moral of the story is that if you got Rate Jacked by BoA, whether or not you can pay to Zero balance (tell them that they’ll lose you, and your ongoing profit if you can’t, or that you’ll balance transfer, or something else), ask to get sent to Retentions and ask for a lower APR. I’m guessing you might have a good chance at getting the Rate Jack that should have never happened reversed. If you’re in this situation and able to try this, please do so and post a comment here with your results, I’d be very interested to hear them.
As I posted before, I have an addiction to credit (worst of all one that I can afford and that I can pay off and quit utilizing if I just buckled down and did it) and I’m finally putting an end to it.
Below is my account statement as of this morning with my Chase Credit Card. After they purchased First USA, they rate jacked me to 24.99% for no reason other than high utilization (I had a high income, a perfect payment record, and always paid just a little over the minimum), I was basically their perfect customer, the one that made them the most money. Too bad for them that I won’t be anymore.
Fortunately this is just one of many such posts in the near future. That same day I sent off a check (decided to do it the old fashioned way instead of online like I always do) to Bank of America for a little over $6,000 for a card which they recently rate jacked me and over one and a half million other customers on. Again, I had high utilization with a perfect credit and payment history on it, but they raised my rate to an outstanding 27.99% out of nowhere. Hell, I even have an ‘emergency’ checking account with BoA (which I will be cashing out and closing soon) that has earned no interest for quite some time. Of course, I also have a thirty year fixed mortage with Chase with a perfect payment history and that didn’t seem to effect their decision when it came to lowering my rate with them either.
After each of these rate jackings, I called the companies and asked about them, staying extremely calm and professional in my inquiries all the way through, and they both said that it was just part of a ’standard review’ and ‘due to my credit record (I check it almost daily using AMEX’s Credit Secure, it’s perfect, so it has to be the utilization) and that there was nothing they could do, have a nice day. Well, fortunately, there is something I can do, and I’ve finally gotten around to doing to it, I’m paying them all to Zero.
Earlier this year I was accepted into Duke University’s Fuqua School of Business to participate in their MBA program. This was a great accomplishment for me (as I have not been a student for some time) and something which I always wanted to do. With that, I also knew that I would have to make some compromises concerning the current job positions I hold and that I would have to figure out ways to work around them to allow myself to continue bringing in an income while going to school, as one of my primary concerns was that I did not want to incur student loan debt to go back to school as I saw it fairly counter-productive (this is arguable and different for everyone and every situation, that’s not what this is about).
To switch topics briefly (don’t worry, they’ll merge momentarily), my Fiancee, ever since I first met her, has expressed her life long goal of attending Vet School and becoming a Large Animal Veterinarian though she also had a desire to finish her current path in school and move into the corporate world and felt that doing Vet School ‘on her own’ just wouldn’t be feasible. Not to brag, but she’s a brilliant woman, she graduated with a degree in Medicinal Chemistry and landed a job at one of the world’s largest Pharmaceutical Companies that pays a nice starting salary and provides and excellent benefits package (the reason for our recent relocation across the country, as noted in previous stories). There is no doubt whatsoever in my mind, or anyone else that knows her, that should she apply herself, she could easily be accepted into one of the top ten Vet Schools in the United States.
So here’s where our stories merge. I was planning on starting Duke in Fall and scaling back on my contracting work and relying on her job to off-set the income, a plan of which she was completely supportive of and always encouraged me to do. As the planning went on, between what she expressed and what I observed, though she had been excelling in her position and constantly impressing her colleagues, I knew that she would not be happy in the Pharmaceutical profession in the long term. So there came the dilemma, do I go to Duke to get my MBA, a degree that, while it would satisfy me, would not immediately advance my own career (I own my own company), or instead do I continue to work and encourage my Fiancee to finish her dream of becoming a Large Animal Veterinarian. Well, I think the answer is pretty obvious to anyone with a heart whom loves their spouse.
I thanked Duke for their interest and consideration in me, notified them that I would not be attending, and informed my Fiancee of my decision. At first, she was very reluctant to believe that I would give up the opportunity and even felt angry to a degree that I would throw it away ‘for her’, not wanting the guilt associated with it. But with it came a new responsibility for her, and something I think she needed, and some of those in her family felt she needed as well, that by me doing so she would be motivated to finally move forwards towards Vet School with fervency and dedication and make her Dream a reality.
With this arrangement, I will continue to be able to work and bring in money to pay for her Vet School and she’ll be able to leave her job (after an appropriate amount of time, we don’t want her burning any bridges by leaving relatively shortly after coming on board by choice) and dedicate herself completely to Vet School. It’s pretty much a perfect situation when everything is considered and weighed for what it truly is. Also, as a business decision, in the end her degree in Vet Medicine will also be much more profitable than what I’d be using my MBA for (an executive resume for our corporation) and give us the freedom and flexibility to relocate where we’d like at a later point in life.
So I guess the moral of the story is, when faced with such a situation, don’t just look at it at face value and from your own selfish point of view, consider the ultimate outcome and what it really means to both parties and take your own feelings out of the equation. You’ll end up making a rational decision that you should not regret and one that should end up being beneficial to both parties.
So I sit and ponder in my massage chair this morning (it’s where I ‘wake up’ and write from) why my Fiancee and I never fight about money or finances. For many couples it’s a staple of their relationship and has been the downfall of many more, but I can safely say that it won’t be of ours. Why? Because we share everything, hide nothing, and we trust eachother completely when it comes to the finances.
It started when we moved across the US together, we didn’t have a lot of financial accounts and such in both of our names, but now that we are here, we are both on all of each others bank accounts, credit cards, etc. You see, when we moved back here, we needed a home and a responsible loan to go with it. I could qualify for a mortgage easily, and her, not having an established job (she was moving back here to start one), could not. So I ended up getting the mortgage for the house we found in my name and I chose to trust her enough to put both of our names on the actual deed with survivorship rights. This was a big step, and it opened the door to complete financial trust. From that point on she made sure that I was named on every bank account and financial related product she had, and vice versa. We had opened the doors to not only a new house and a new chapter in our lives, but also to complete financial trust.
In day to day activities, I handle one hundred percent of financial activities for both of us, whether it be keeping track of the checking accounts, contributing to both of our IRAs, or just watching the savings and the stock portfolio. My fiancee is fine with that, she trusts me with it even though a large part of it is her money, she would even if I chose to tell her nothing about what I did. But I do tell her what I do with our money every day when I get a chance (I try to summarize it as to not make it so boring), I let her know what stocks were purchased and what money was moved to high yield savings accounts or to this or that so that she feels that she is active in the managing of our finances, and I always ask her if there is anything that she’d like me to do with the money that I haven’t already. This method works very well for us and I suspect will last indefinitely, we’re lucky that way, we’ve already jumped the financial hurdle in our relationship.
Another thing I did, and something which I recommend all partners that are financially adept in a relationship with a less financially adept individual, is to educate them on finances. Discuss it with them, buy them some books, magazines, whatever they’ll read. Constantly show them articles about stocks in magazines pertaining to companies that interest them already, it’ll open them into reading and learning about that company’s business side, understanding market terms, and then wanting to expand and know about others. No matter how stubburn the partner is (trust me, mine was stubborn to start with) about not wanting to educate themselves on the matter, with persistance, it does work. And most of all, after they start doing so, start asking them what they’d like to do with your money (and actually do it!), make them feel as though their new knowledge is not wasted and that they’re making a difference in your finances.
So to sum it up; trust each other, share everything, be completely open about finances and discuss them often, educate your partner in business and economics if they aren’t already, and most of all include them in investment decisions. Sounds pretty much like common sense, huh?
There are a lot of areas of our relationship where I’d say that we aren’t the best role models, but this is one where I can safely say that we are. I hope you apply what you’ve read to your relationship and make finances an open, exciting topic in your relationship rather than a taboo that is to be avoided.
So I’m taking the plunge and finally asking my girlfriend, whom I live with, own a house with, share every bank account with, our dogs with, and much more to marry me. Yeah, a bit backwards, eh? Regardless of why we’re not already married, our relationship just always worked and we always trusted each that we’ve gotten to the stage where we act and treat each other like we’re married, better yet, like we’re in a good marriage (without the constant fighting, but we still bicker a bit of course).
So we’re both environmental whackos and anti-violence whackos (especially when it comes to being against violence for the gain of others, like Conflict Diamonds), and before you start making any assumptions, I served my time in the military, I jumped out of planes and such, I actually saw some of these African countries first hand and the internal warfare, I got hurt pretty badly; I think I’ve earned the right to my bleeding heart opinion. So the engagement ring has always been a sore point for me, I knew it had to be something special, not necessarily expensive, just something that exuded our shared ethics and would be a symbol of our commitment to each other and everything around us that she would be proud to wear. And then I found Brilliant Earth jewelry, what a great company. All of their diamonds/gemstones are certified conflict free and ethically mined and even their precious metal is ethically mined / recycled (many companies will recycle to cut costs, these guys do it, aside from being able to cut costs, because they actually care about the amount of pollution and waste the mining process puts out, or at least they say they do, which is good enough for me until I learn otherwise). I started browsing through the diamonds and settings and I decided that I’d finally found something that was ‘right’ for an engagement ring and took the plunge and put one together and ordered it for my girlfriend, it should be here on two weeks. So that means I’ll be proposing in a a couple weekends officially, so please send positive vibes my way that I can make it something special for her.
As we always talk about marriage, kids, etc as though they’ll just happen one day, and giving our living and financial situation, it’s sort of cheating in that I’m pretty definite as to what her answer will be, but that’s beside the point, I wanted something she can be proud to wear and can tell a story about that when people asked which could support her ethical viewpoint and open into meaningful dialog on the subject if she chose to allow it to do so, and this ring is definitely that. Fortunately, with our planned wedding bands, we’ve already decided to have them tattoo’d on at the reception ceremony (I know, we’re not even officially engaged yet and we’ve been deciding such things as definites, we sort of do things backwards).
So if you’re out looking for an engagement ring or just a special piece of jewelry for a loved one, I highly recommend taking a look at Brilliant Earth, researching the company and their goals, and if they meet yours, seeing if you can find something that meets your need, or having them make it for you (I noticed that they do indeed make custom jewelry). I know should I ever purchase diamonds for my girlfriend in the future (or perhaps any jewelry for that matter), it will be from a company like this, and I won’t have that whole ‘conflict diamonds’ excuse or the resulting guilt that would come from it to get out of it.
Ah, and I paid ‘cash’, heh. And no, not a whole lot.
Update 2-29-2008: Got the ring in today, looks amazing, the picture just doesn’t do it justice. Highly recommend these guys at Brilliant Earth. Also great customer service all along the way and they were even able to finish and ship it early to ease my anxiety of having it in time for proposal.