Ohhh Monday’s. A dreary Monday where the rain is pitter pattering on the outside window and the birds are darting in and out of the raindrops. It makes this the perfect day to talk about something that I have become a little obsessed with: Personal Finance.
One of the biggest focuses I had when I was getting out of the military was my personal finances and getting everything in order to be unemployed for an extended period of time. This was a bit nerve racking for me because I have been employed since I was pretty much 12 years old.
First as a babysitter, then when I was a sophomore in high school as a worker at the local library, as a junior I worked at a doctor’s office filing papers in the summers in addition to the job at the library, and when I left for college that was just the beginning of the odd jobs I would have.
In college, there was the job at Wendy’s that my best friend Megan got me, then there was a slew of odd jobs that occurred over the next 3 years I was in college including a personal assistant for one of the organic chemistry professors, a lab tech for the crime scene class in our forensics major, proctoring for the LSAT’s, donating my plasma for money up to 2 times a week and receiving really old dated $20 bills. The old bills made it seem a little bit illegitimate, haha. And really everything and anything in between. I pretty much worked any job that could get me money to keep on keeping on. The plasma thing was a pretty lucrative business in which I would get $80 a week for about 2 hours worth of time. I was able to buy an xbox 360 with that money and a preordered copy of halo 3, and I even was able to buy ski’s for all of our Wisp trips we would take in the winter as it was only a 40 minute drive from West Virginia University. As I like to say, I bought all of this with blood money… literally.
The most I ever worked was the summer of my junior year in college, where I had a 40 hour a week unpaid internship with the Coroner’s office in my county, (ohh and by the way I had to pay over $3,000 for that as it was also worth 6 credits toward my Forensic Science major). I worked there 4 days a week for 10 hours a day, and in addition to the unpaid internship on Wednesday’s I worked at a local community college book store shelving books for 10 hours, and from Friday through Sunday I worked at a catering company where I catered events all weekend just to make money to get through the summer. It was a busy and extremely eventful summer. From working at crime scenes and conducting autopsies, to shelving books, to pouring wine at bridal showers I was on the go for upwards of 70 hours a week. I believe in the hustle and know that there are times where you just need to put your head down and grind, especially if you want to make big moves.
So… when I found myself at Officer Candidate School at the end of the summer after I graduated college, I did not even know what to think about all the money I was receiving each month, it was so much more than I had ever seen. After I moved in with the four guys I lived with in Norfolk, one of them mentioned going to see a financial advisor and I was onboard with it. I wanted to know what I should be doing as far as saving money. We made it a family outing if you will, where we all went to talk to this guy together. I was the only one who decided to start investing money through this firm and to this day I am a bit torn over it.
I did not have much education on investing money back then and I was trying to learn, but a bit out of my depth so I decided to take the advise of the firm to help me invest my money. I have been with them for the past decade. Fast forward to the present, 2 months ago when I was transitioning out of the military I started listening to a bunch of books, including: The Year of Less by Cait Flanders, The Money Class & Women & Money by Suze Orman, Unshakeable by Tony Robbins, The New Frugality by Chris Farrell. I started doing copious amounts of research and it was Tony Robbins’s book Unshakeable that really got me into a tizzy.
The gist of what he says in the book is that if you are paying higher than 1% on investment fees then you need to take a hard look and figure out what you need to do to stop paying the extra money because it could mean years off of your retirement when you think about it in a compound interest way. I did take a hard look and within less than a week I had all of my investments withdrawn into checks and immediately moved transferred to Vanguard, to take my finances into my own hands and become my own investor. With the likes of Vanguard and Fidelity, plus a slew of apps with robots-investing, it is a lot more at the ordinary person’s fingertips to invest their own money and cut out the middle men.
I guess life is about figuring it all out and to be honest I am not sure where I would have started with investing before I have gathered all this information over the years. I’m glad I started so early, I am just a bit miffed that I didn’t know any better to start on my own and with the right investors. Currently, I am very happy to be 32 years old and with enough information to stop paying front load fees to a company that “prides” itself to be working towards providing military members and their families with the proper investments fit to their needs. Also something Tony Robbins exploits as he explains how Certified Financial Planners (CFPs) can also be registered as brokers and take even more money in fees from an unsuspecting customer. I really recommend reading his book if you have the time as it is eyeopening!
As far as my current unemployment situation, in Suze Orman’s the Money Class she recommends that you have up to 19 months of funding to be unemployed for a year and a half. WOW. Although this seems very crazy and even unattainable, I think she is right. When the future is uncertain you have to be prepared for the longer term without a steady income, even if it is rather hard. Luckily, while unemployed, my cost of living as decreased to 1/4 of what it was previously. While I was still living in Hawaii, I took one of my friends out to lunch and he helped build me a budget tracker and customize to my exact liking where I can legitimately track every item spent in a day, week, month, etc., based on the category in which it is bought, to the dollar. I do this because online programs and budget trackers have not worked for me in the past. I have to keep a strict tally of this on my own for it to be the most effective. I started this the day I became unemployed (April 1st) because I want to see where my money is going and how realistic it is to budget to spend less that $1,000 a month while unemployed.
From this group of books and many other recommendations stemming from them, I have plenty more options to tide me over for the next year. In addition, I found the Listen Money Matters podcast and have over 400 episodes to catch up on as I immediately liked the content they were putting out after listening to the first episode. (As an update, they stopped making episodes as of June 2020 so that’s a bummer). From all of these different books I’ve read, I’ve come up with one main theme that I want to discuss: People in the middle working class that have money to invest should not be bamboozled and schemed out of money that could shave off years of their retirement funding. If you are paying more than 1% in annual investment fees then GET OUT. Seriously. With advances in medicine and research in Geriatrics, the male and female life span is averaging to be longer and longer. The world economic forum has a U.S. citizens healthy life expectancy set at age 79 from the 2018 report, meaning we need to prepare for a monthly income over the age of 80.
I hate to admit it but I was paying a 5.25% front load fee on every dollar I was investing over the past decade. It took me 2 days to pull all of my money out of those investments after I fully realized the implications of continuing on this path over time. All of the extra hidden fees are complete bullshit, of that I am certain.
I feel so much better because now I know exactly where every dollar I am investing in is being spent, I can focus on projects that are near and dear to my heart, and I have taken full control of my future and finance. That is the biggest win of all! You can start your investments through Vanguard or a slew of other companies such as fidelity that stick to the 1% annual management fee. This post is intended to bring awareness to other people who want to take charge of their finances and hopefully can see the importance and make money moves like I did.
I never want to be in the dark about my personal finance again and I want to start this conversation so maybe others will focus on getting educated too, and choose the right path to find their own form of financial freedom.
This article appeared first of The Cassey Excursion.
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