jrdnRabbit's Journal

[jrdnRabbit]

Hello Everyone,

Thank you Jacob for building the lighthouse; a warm marker in the middle of the night.

I'll start off with a few details of my life at this point:

Age: 28 (m)
Situation: Married, 2 kids (2 years and 8 months).
Housing: Just purchased our first home ($50k....total escrow payment $550 per month).
Current Employment: Just started a new job a few months ago ($37k). Wife is stay at home.
Location: Syracuse, NY area.
Finances: Savings: Only about $1000 buffer in checking. Debt (estimated as we are still finishing up renovations on the house): CC's ~13k (0% through Oct), Student Loans: ~10.5k (6.8%). Only car paid off.

Monthly Expenses: ~$1,650 - $1,700. Not including CC payments.

The CC balances are a mix of: abandoned network marketing business, fitness programs (~$500), actuarial study materials / exams (~2k), covering periods of unemployment a couple years ago (~4k), house renovations (~3k), misc.

My overall goal is to buy my freedom as soon as I can. I enjoy spending time with my family and want the time freedom to more freely explore myself.

I have tracked my finances pretty diligently for the last 5 years or so. Despite my situation, I am pretty sure the problem is on the income end as opposed to the expenses end (I know that is the default thinking for those uninitiated to personal finance, however, I do think it represents the majority (~80%) of my plight). Perhaps I am looking for validation or ideas from other readers on what my best course of action should be. Some more pertinent information:

I graduated from high school after taking more AP courses than anyone else in my class (over 400 people in the class). I took a few years off after high school as I didn't know what I wanted to do and was paying for school myself. Bounced around various jobs (forklift, retail --> supervisor, bank teller). At this point I decided to go back to school for business and graduated from a State School (SUNY) in 2.5 years, 3.88 GPA, double major in Business Admin and Economics. Since college, worked a few jobs in various capacities (closely shadowed the president of a contracting company for over a year...then company closed, manager in logistics, financial advisor (trainee then quit), back end investment bank work, and now working in health care back office. It's worth noting I have never been fired, laid off...always quit. My current employer I tried applying for actuarial positions (I passed the first test about a year ago) but was only successful in getting a more accounting type position. My current goal is to pass another test over the fall / winter and try to transfer into an actuarial position in June (starting pay would be mid $50's).

Does anyone have any recommendations on next steps? Am I selling myself short somewhere? I feel as though I have the potential to be earning more than I am (my highest salary was ~38k). I try to be as honest with myself as I can and would appreciate any feedback from the readers of Jacob's site. Thank you for your time and I look forward to updating you all with my progress.

[Dragline]

Welcome. Now you get to hear things you might not want to hear, but probably already know.

First thing you need to tell yourself is that you can't afford to be quitting any more jobs until you are out of debt, unless you are trading up to a better position. You are in a hole and you have to dig out before you can do anything else.

Accept that work is not likely to be fulfilling for you, but that's not why you are there. You are there to earn your freedom. Not buy. Earn. It's going to take putting up with things you don't like. For a number of years. Get over it. Nobody ever said you have to like your job. And its normal to only like part of it and only part of the time.

And stop using credit cards -- actually all forms of credit. You've been trying to buy freedom and fulfillment with them instead of earning them. Start paying with cash for everything. Experience the "pain of paying" to rid yourself of the buying compulsion. See https://www.youtube.com/watch?v=PCujWv7Mc8o

[George the original one]

You're bright, but not focused. Maybe that is changing?

Yes, your expenses have been reined in nicely. Keep it that way. Get rid of the debt. Do you have the drive to take on a part-time job while you're also working towards a higher salary? After all, you need the money now, not in 6 months or a year. Have you been applying for other jobs, not just with the current employer?

[Chad]

All of the above, but I'm going to focus on your lack of focus.

As Dragline said:

"Accept that work is not likely to be fulfilling for you, but that's not why you are there. You are there to earn your freedom. Not buy. Earn. It's going to take putting up with things you don't like. For a number of years. Get over it. Nobody ever said you have to like your job. And its normal to only like part of it and only part of the time."

Is it possible to find work you love? Yes. Is it likely? No. If you don't know what you will love, then you have to find something you can put up with. If it's the actuarial position, great. But, you need to decide right now if it is the actuarial position. If it is, then make this a hard goal for yourself and don't screw around with it. Commit to passing the test as soon as possible, even if it means giving up family time, pleasure time, and the possibility of a second job. Your wife should help out by taking care of everything at home during this time period. Every day that goes by that you aren't in a $50k+ actuarial position is a day you lost money working the same number of hours.

[George the original one]

And it's probably worth noting that I just heard an ad recruiting truck drivers at $55k.

[jrdnRabbit]

@ George...That is certainly worth noting. In my area the CDL courses are in the 7-10k range. Moreover, in a previous job I managed a fleet of drivers (~40) and am pretty confident that I would not enjoy the lifestyle given my current marital and parental situation. I have also considered some type of trade contracting company but am nervous due to physical limitations. I can do pretty much anything for a few days, however, I tend to develop issues with my wrists, back, knees or ankles over time. That's not to say I couldn't really focus on body mechanics and get it to work but it seems like a high risk for me personally. In general, most of the highest income earners I know personally own their own trade contracting business and do very well. As far as part-time work is concerned, I do have the drive. Actually I have worked many part-time jobs in the past (overall I've had ~15 different employers), however, last time I left a side position a year ago (I was a night janitor at a daycare) I told myself to stop. I can't help but feel that financially I could do much better with those 20 hours or so a week doing something on my own / freelance. Although I haven't yet discovered what yet, I feel as though I am getting closer than I was a year ago. I had been applying for some actuarial positions for a little while but never got a call back (to be fair I probably could've applied more, however, having only passed 1 exam and being a career changer instead of fresh out of school does not make me very competitive either).

@ Chad...At this time I do believe the actuarial position could be something I can put up with for a longer period of time. The pay scale is decent, there are some challenges during the day solving the problems, and there are many tests to study for over the next 5-10 years. Originally I was concerned about these exams eating too much of my disposable time, but I've learned many employers offer a lot of paid study time for actuarial employees. As far as the tests are concerned, I am unable to transfer into the actuarial program until May at the earliest as we are required to spend a year in our current position / department before we can transfer. The company I am working for now has a nice actuarial program (salary, training) and has treated me respectfully in my current position so far so I am nervous about leaving and possibly going back to a "stagnant" company. I do agree that every day in a lower paying job is lost money.


@ ffj.....Thank you for your motivating comment. Once we get the house cleaned up we're looking into the possibility of taking in a kid or two as a sort of mini-daycare (my wife has experience and studied early childhood education). @ $100 per week per kid, with a 75% vacancy, that's a little under $4k per year per kid (before taxes / extra expenses). As far as expensive purchases and entertainment, these have pretty much been gone for a few years now. My wife and I have been decreasing our expenses for the last 5 years or so, each budget revision eliminating / greatly reducing things that were considered necessities a revision before. Big purchases have been tricky. We do not splurge on TV's, vacations, clothes, etc. Instead we "invest" in our futures. We spent like $500 on a bogus real estate seminar a few years back, I have $2k into actuarial studying, etc. We have definitely improved on this over the years but we could still probably do better. I am already hating debt and conspire ways to never be in debt (even mortgages) again...despite knowing that there can be good debt...this requires more meditation.

@ Dragline....I agree, in the past I used to quit and then search for a new job. I am currently in my longest period without not having a job (~1.5 years....2 employers). In the future I know not to just jump and hope for the best but to have the next job in hand first. What you said about buying freedom vs earning freedom hit a chord with me and I have not quite settled on what that truly means yet. My purchases have largely been attempts at investment in myself as opposed to entertainment, but perhaps that is what you meant. Originally, I thought you meant that instead of using money to transform myself into someone with options, I should stay where I was, buckle down and give a piece of myself to my employer(s) to weather the financial storm. This is a bit terrifying as I've learned pieces given are not often returned. Just now I think that perhaps it means neither buying personal investment or standing strong in the face of financial winds with my head down, nose to the grindstone. Perhaps it means (while staying gainfully employed) turning inward and developing from within. Instead of spending money and time courting the wizard, use my mind and creativity to rediscover what he discovered. I will meditate on this.

[5to9]

Is your current pay the upper bound for Accounting? I think that focusing on improving where you are is likely to be a better payoff that constantly moving horizontally and resetting yourself back to entry level. This doesn't mean you have to stay at the same company/job forever, but it means you need to become an expert at something, which requires time and focus.

I also see a pattern in your expenses of spending money for training/seminars/etc. as you try to seek better avenues. This is going to keep you treading water forever.

[Dragline]

Originally, I thought you meant that instead of using money to transform myself into someone with options, I should stay where I was, buckle down and give a piece of myself to my employer(s) to weather the financial storm. This is a bit terrifying as I've learned pieces given are not often returned. Just now I think that perhaps it means neither buying personal investment or standing strong in the face of financial winds with my head down, nose to the grindstone. Perhaps it means (while staying gainfully employed) turning inward and developing from within. Instead of spending money and time courting the wizard, use my mind and creativity to rediscover what he discovered. I will meditate on this.

I also see a pattern in your expenses of spending money for training/seminars/etc. as you try to seek better avenues. This is going to keep you treading water forever.

Yes, I think you have been equating spending money on self-improvement with actually achieving self-improvement. It just doesn't work that way -- its the effort, not the money that matters. For raw material and/or motivation you need only read books, and maybe watch some YouTube videos if you like that format.

I was in your shoes at about your age -- had a decent job, but also about one year's salary of school-related debt. Had just married someone with a lower paying job and my debt level. Had a mortgage on a house slightly underwater. No kids yet, but they would come soon enough.

We made it our mission to clear the debt. Yes, it meant sticking with our jobs even when we didn't like them and throwing every raise and other extra dollar towards the debt. But it wasn't a question of "giving a piece of ourselves to our employers". It was more of a giving a piece of ourselves to our collective future. And finding other ways to grow besides buying experiences and information. We got so good at it, we cleared most of the mortgage, too.

Time to end the last chapter of your book of life and write the next one where you and your wife worked together and got out of debt. It'll be good for your marriage -- trust me. And then you can write a whole new chapter after that. The one where you say good-bye to the treadmill and spend more of your time doing what you want.

[DebtSlaveNoMore]

@JrdnRabbit, welcome!

I was in a situation similar to you not so many years ago. Here is my $0.02:

1. Your core spending level for a household of 4 people is already pretty low. I see only marginal gains through further frugality measures here. The greatest gains that you can realize is on the income end.

2. You need to fully maximize your current day job's earning potential instead of job hopping. You are investing at least 40 hours every week in this job, so If you are underpaid(e.g do research on indeed, payscale...etc), you need to negotiate for a higher wage ASAP. If otoh, you are paid at fair market levels, then you need to increase your skill/experience at your current job without spending heaps of money on additional education/courses/certifications. This skill level increase can be achieved at minimal cost by fully applying yourself at your day job, absorbing as much real world experience as you can, understanding the office soft skills that will allow you to make friends/influence people, learning job related skills for free on the internet via Youtube/Khan Academy, and taking on as many responsibilities as you can at work. By doing this, you will increase your level of expertise and will be able to command a higher salary(whether it comes from your current employer in the form of a pay raise/promotion or as a job switch to another company).

2. Because you have excessive debt (CC, Mortgage, student loans), working the 9-5 will not cut it even with a pay increase. In order to attack your debt head-on, you need to put in another 20 hours a week on a side gig. I was in a similar situation years ago, and my side-gig was doing landscaping work for rich people. The thing to note here is that our country(USA) is extremely wealthy, but that wealth is very unevenly distributed. If you can get into a position of directly serving the rich, then the compensation for your time can be substantially higher than the fair market value for your services. Now what I have learned is that, doing work for rich people who actually earned their wealth is a losing proposition. These people intuitively know how to extract maximum work out of you for their money. Instead, you want your customers to be wealthy people who DID NOT earn their wealth through their own efforts. We're talking above the wives/girlfriends, children, and heirs of rich people. If you can effectively cater to the whims of these folks, you can command ridiculous prices for very basic services. In my case, I was getting paid up to $50/hr doing basic landscaping for rich housewives in the NYC metro area.

3. A better paying day job and a side gig would be enough to pay down that debt in normal conditions, however a layoff, or illness, or shift in market trends can still completely disrupt your debt pay down efforts. Thus, I highly recommend that you establish passive/residual sources of income. These are income streams that requires you to work hard initially to get it set up, but once it's set up, it will pay you a steady trickle of money every month. There are may ways to build residue income streams. Some people do microstock photography, others sell graphic designs on the internet. I created a software business that makes smartphone apps and niche internet sites. For me, after investing 20 hours a week for a year, I was able to build this passive income business up to a point where it was paying me over $1000 dollars a month with little to no effort on my part.


So with all of that said, what I'm basically suggesting is that you need to work much harder and smarter than what you are doing right now. Working efficiently at 80 hours a week is not for everyone, but it worked well for me, and it will likely get you out of your debt problems fast.

[C40]

Welcome to the forum! (I hope you're taking our tough love type advice as we intend it - friendly, not confrontational)


Draglines post about earning your freedom reminded me of this, from Marcus Aurelius:

“A man standing by a spring of clear, sweet water and cursing it. While the fresh water keeps on bubbling up.

He can shovel mud into it, or dung, and the stream will carry it away, wash itself clean, remain unstained.

To have that. Not a cistern but a perpetual spring.

How? By working to win your freedom. Hour by hour. Through patience, honesty, humility.”

(I've wondered why he connected the last line with the earlier ones. Both different sections resonate with me on their own. Together, they make me think. About ERE, about the future, about how to stay positive. Did Aurelius see "winning your freedom" as necessary before being a perpetual spring? It could just have to do with how the translator decided to write it in English. Likely, in this case, “winning your freedom” means putting in the effort and the practice it takes to be a good Stoic. But hey, we can interoperate it as we wish)

@ Dragline...... What you said about buying freedom vs earning freedom hit a chord with me and I have not quite settled on what that truly means yet.......

I'll second what others have said, and maybe put it more bluntly: that network marketing business, that real estate class you and your wife went to, other similar classes – you got tricked. Unless you’re getting some kind of truly relevant and recognized license that is REQUIRED for certain work, you’re probably wasting your money/time/effort. It’s clear from your good grades in school that you’re capable of learning quickly. You can continue learning without spending money. Thee seminars you went to, and all the job-hopping are signs of you having a certain mindset - of looking for tricks. Looking for easy ways out. You’re not going to get out of this and become FI with tricks. You’ll get it with consistency, with time, with focus and patience.

Yes, you should try to increase your earnings to speed up becoming debt-free and FI. You’re capable of making more money, so keep working at it. But set aside the tricks. Accept that you’ll have to do it the old-fashioned way.

One more thing to repeat – don’t quit your job without having another already. You have three other people (two of them helpless) depending on you. You don’t get to quit.

I have also considered some type of trade contracting company but am nervous due to physical limitations. I can do pretty much anything for a few days, however, I tend to develop issues with my wrists, back, knees or ankles over time. That's not to say I couldn't really focus on body mechanics and get it to work but it seems like a high risk for me personally.

I don’t want to be too assuming – is this a problem you were born with? If you are in poor shape and/or overweight, you need to take care of your health. Again – you have 3 people who will be depending on your for a long time. You need to stay healthy and fit so you can keep working, take care of them, etc.. You chose to marry her and to have these kids, so now you’re not allowed to let your body go to shit.

[jrdnRabbit]

Hello Everyone,

It's been a very busy, but fruitful month. I am now on week 8 of owning the house and I have finally been able to mostly move in. I have spent the majority of the last 7 weeks going straight from work to the house until ~9:00 or so then up at 5:00 the next morning. The good news is: most of the rooms have been painted, most of the rooms have new flooring, and the house is in relatively good shape. My wife and kids are still staying at her parents though, as we've misplaced the hardware to put together the crib and kids bed, which is preventing us from getting their room all set. There are still some small things to do but for the most part the house is live in ready (3BR, 1 BA; ~1000 sqft). Financially we had an unfortunate suprise...we discovered we had some structural work that had to be taken care of and cost us $2,250 in cash. I am happy with some of the skills I've picked up: ripping out carpet / flooring, laying 2 carpets, laying laminate flooring, refinishing - sanding, staining, polyurethaning - a hardwood floor, learned a bit about floor and stair framing. We still have a lot of work to do on the house but at least we can move out of the in-laws (been temporarily there for 2 months since our previous rental agreement ended).

Financially, here is the breakdown to our budget (USD):

Rent / Escrow - $600 (this is actually $550 but $600 knocks 8 years off...couldn't resist)
Food - $300
Student Loan - $200
Utilities - $150 (estimated)
Kids - $100
Household - $75
Car Insurance - $63
Gas - $50
Phone - $47
Car Maintenance - $40
Internet - $35
Bicycle - $15
Gift - $15
Netflix / Redbox - $10

Total - ~$1700.

Many of the categories are currently on the envelope system (food, household, kids, car maintenance, gift) so there is little worry about going over. Also, many of these numbers have been honed over the last 5 years or so, so when we settle in at the house they should be manageable. So far our debt is similar to my last post...we are currently at ~$11,250 in credit card debt but we still have some semi-large house repairs to make. $13k should be a conservative landing point.

The honeymoon period at my current employer has ended. This is the first job I've had where I've spent the majority of my time without work to do. I've read many ERE journals where people say they sit at their desk with nothing to do...I have become one. The work comes in spurts and I get it done quickly. Then I ask for more and a few weeks later I'll get another spurt. During the last month, I had a semi-annual review with my manager (mostly her just explaining how the annual review works since I'd only been there 2 months at that point). At this meeting, I was able to get a better handle on future salary expectations. I currently make $37k, according to HR the median wage for my position in the company is $44k. I asked my manager what it would take to get to this level...apparently there was a merger a few years ago and some of the "outsiders" had higher salaries dragging the median level up. The best I can hope for is a 2% raise, 3% if I really kill it. My job also has varying levels (I'm at level 1, there are 5 levels). A promotion would add about $8k...however, I think the next newest guy has been there like 4 years and there's a lot of people ahead of him...and they all are competent people. Needless to say, this can't be a permanent position for me.

I was talking earlier about actuarial work, however, after deeper introspection I have decided to pursue a different path. I didn't mention this previously, however, in the past I have (lightly) dabbled in programming. I took a C++ course in high school, a couple years ago I spent 18 hours in a weekend binge coursing some http and CSS. In 2014, from January to about March (when we started house hunting) I was taking courses on Wibit.net. From their intro course, through C, and about a third of the way into C++. This time around I have taken a better approach and studied which languages / courses I should study. I'm currently studying Python. I'm about 3/4 of the way through Codecademy, at work I've been reading a couple online books (Think Python - 3/4 finished; Invent Your Own Computer Games with Python - 1/3 finished). I also spend time at work reading the various programming subreddits to understand the culture / history of programming better. I have been customizing some of the example games from the texts and happily lose track of hours trying to improve them. My enjoyment, coupled with the location flexibility and salary potential seem to make this route a much better option than actuarial work.

Sidenote: I've finally been able to start bike commuting again. I started last year (end of July through early March). It was a little over 9 miles each way, and the winter was brutal (Syracuse). In early March I started developing painful knee problems...I assume from winter fatigue. I was only able to bike a couple more weeks in May at that job. I moved into our new house Tuesday night and so was able to bike to the new job for the last 3 days (about 10 miles each way). I have to wake up a few minutes earlier but it's a great way to start the day plus it's enjoyable to only spend an extra hour a day commuting but gain 2 hours of exercise!

[jrdnRabbit]

@C40: Health-wise, I don't think I'm letting myself go. For the last 6 years or so I've been between 160 and 175 (usually settling between 165 and 170) pounds (@ 5'8"). I was athletic in school, playing pretty much every sport except soccer. I think my current ailments are a result of improper technique / bad bio-mechanics. Like I said, I can do most things for a day or 2 but then I start getting pain / sprains and need to stop out of fear of permanent injury...self diagnosed. The one exception being my lower back. I just started going to a chiropractor about 6 months ago and it turns out I have some mild arthritis between my L4 and L5 (I'm 28 ). I have difficulty after about 3 or 4 minutes bathing my children (basically anything where I need to lean out forward from my legs / knees). The chiropractor has been a huge help. I remember standing there looking at my x-rays barely able to stand and then receiving my first ever adjustment. Instant relief. My back hadn't felt that good in 10 years. Now I go in once a month or so (about $23 bucks a pop).