Income vs. Goals in a Relationships ---- Food For Thought

Warning: This is a financial post, the appetizer (aka background) is just fluffy and coincidentally falls on Valentine’s Day.

So my mom is the type of mom who no guy is ever really good enough for her baby and for some reason is always on the look-out for someone “better” so they’ll take care of her baby in the lifestyle that my mom feels is normal (affluent). Apparently she doesn’t think her baby girl can take care of herself --- but that’s for a different post. Beyond always being on the look-out for someone else, my mom’s never really liked any guy I’ve ever dated, and a few of them were actually guys my mom set me up with – go figure! This is an ongoing issue so I do not take it to mean anything against the guy I’m currently dating and have been dating for the last year.

(Financial stuff coming soon…I promise)

So the current guy I’m dating, we’ll call him “Mr. Be-Mine” in nod to the holiday, is probably the most compatible guy I’ve ever dated, but still different enough to make life interesting. My friends even agree. One of the many ways we’re compatible is financially. We have very similar outlooks towards saving and spending. Long term I think this is probably one of the best things for a couple - love aside because that’s pretty important and can overcome most everything but finances are also very important, especially with all the studies conducted about money arguments being one of the top reasons for divorce. One article even claims that 57% of couples divorcing site money issues as the main cause.

Well even this doesn’t keep my mom from her usual “tricks” of constantly trying to find someone better for me. One of my mom’s co-workers has a son and my mom wants me to meet him. Of course I’m not going to but she still carries on and on about whoever it is she wants to fix me up with, so she’s feed me full of info about this new guy, we’ll call him “New Kid” on the Block. According to my mom “New Kid” is an investment banker and he’s in my mom’s words “bringing home the big bucks”, drives a new BMW, and recently bought his mom and dad a new plasma TV. She also has listed several other characteristics that are in line with mine including a big involvement in community service, but I won’t get into that since this is supposed to resemble a financial blog post and not some self-help girly blog post. My mom sees “New Kid” as security, but I can’t help but wonder what his net worth is like, is this guy saving or is he so deep in debt he’ll never escape. But since I don’t know and it really doesn’t matter since I’d never go out with “New Kid” I can only conjecture so let’s assume he’s at least breaking even with no consumer debt but isn’t aggressively savings for long term goals.

So here’s the financial question that I’m wanted to bring to you all to ponder:

Would it be better to be in a long term committed relationship (like marriage) with someone who is on the same page with you regarding your views on money and your financial goals but who’s income will never peak much beyond what it currently is or someone who doesn’t necessarily share the same goals and views on money but apparently has a large income and who’s income potential is enormous?

All things including finances aside, I already know what I’m doing between “Mr. Be-Mine”, my mom and “New Kid”. But the question is definitely good food for thought.

What’s your thought on my financial question?

Question on How I started Saving

Thought I’d share a recent question I received about how I started saving.

As mentioned before I really love Weasabe, its really helped me be able to track my monthly expense. Plus I love the group discussion portion of it as well since members can all post questions and get everyone’s insight.

(To clarify Weasabe is not a sponsor of my blog, in fact they probably don’t even know I’m alive – I’m just a very satisfied client and wanted to offer the idea to everyone else just like if I found the most amazing restaurant in town I would be bragging about it to my friends forever until they tried it and agreed with me that it was amazing).

Anyway recently a member posted a question called “Stock’s for Newby’s”. I think you should be able to view the whole discussion even if you are not a member yet.

Below are my highlights:

Original Question:
Hey guys,
I'm 18 and working 2 part-time jobs, I have no real expenses and save pretty much whatever I make (I think I've spent a total of 12 dollars in the last 6 months). I am interested in the stock market, so I was wondering if you guys could send me on the right track.
Ps: I know nothing of stocks and have no idea where to start :S
Thanks

My response:
I'm in the same boat as you, I'm clueless about picking specific stocks that's why I stick to mutual funds and target date funds which take all of the guess work out of the equation. I use vanguard and they have target date retirement accounts so its as simple as finding the 2045 fund (which is around the year I plan to retire)and selecting it.

My one word of advise those it before selecting do a little homework and discover the fees and the asset allocation first to ensure they are consistent with your goals. Other than that enjoy.

A different member chimed in with this in response to my post:
I went to your blog spot... wowowow your doing a very nice job on the blog and on your savings........How did you get started in the saving track? Someone must have helped you along the way? Vanguard is a good stop to save on Mutual Funds. I also like TRowe Price and Fidelity.

Happy Savings

I then responded: Thank you very much for checking out my blog. I hope you'll keep reading.

To answer your questions:
- I got started on the savings track when I was in high school because I knew that I would be 100% responsible for all of my expenses including tuition so it was up to me to figure out a way to go to college, and then from that it progressed. In college I was fixated on savings because it would mean I could work less so I could go to school longer and finish up and now my focus is on retirement. I talk a little about this in some of my older posts on my blog.
- As for as someone helping me I wish I could say that I had someone help me along the way. It really boiled down to seeing the example that several of my family members made of being deeply in debt and struggling to find a way to retire that made me so debt adverse and want to save heavily for retirement. Beyond that it was getting involved with finances from reading EVERYTHING I could get my hands on. Plus Wesabe has definitely helped me a lot in tracking my expenses.

Hope I answered your questions. Thanks for checking out my blog, I’m glad you enjoyed it


Just wanted to share some insight with everyone else about how I started saving. I’ve been planning for some time to write a post about how I came to have saved over $90k and only be in my early twenties (okay maybe I’m a little north of early twenties but close enough). So keep checking back because the questions in the discussion gave me extra motivation to hurry up and write that post about how I started saving.

Mid-Year Performance Review Update

Well no real news to report on the Mid Year Review front. I met with the Boss man, according to him my work is doing awesome and that I'm already performing at the next level so there's no tasks or project I need to master before I can get promoted. Okay I'm thinking if that's they case why am I not promoted yet? So I polity try to ask this question but just get blown off. So now what do I do???? On top of this come April I'm getting transfered to a different department with different job descriptions but the one good thing is my soon to be new boss man, "Mr. VP", recognizes me as a high achiever. RRRRGGGG that was no help - so it looks like I'm going to bide my time for now.

Progress on Goals for 2008

Alright all, its officially been over one month since the start of the new year so thought I should check up on my action plan for achieving my goals especially since some of them had January and February due dates so here goes:

1. Have Net Worth of $105,000 – My net worth is increasing (yeah!) and a very quick calculation of my net worth is over $90k. I have not been as good about saving the $100 a month outside of my retirement accounts, so I need to establish some set plan to prove that I’m saving the $100, be it via a phony withdraw listed in my accounts etc so that I don’t touch this money. I plan to have this plan established before the end of February.

2. Fully Fund my 401k and Roth IRA – I’ve confirmed that my 401k automatic deduction is still set at 27% which will allow me to save the max. When I get my annual cost of living increase I will have to decrease so that I don’t reach the max too soon and loose out on the company matching but the cost of living increase won’t happen until September, so no action is required until then. I have investigated the most economical way and easiest way for me to contribute to my Roth IRA and that is with a once a month automatic transfer from my bank account to Vanguard. Because I’ve signed up for electronic statements there is no cost to do this. So every month on the 22^nd $417 is withdrawn from my bank and invested.

3. Diversify Roth IRA – I’ve made no progress on this one other than to check into other mutual funds. This one will require some more investigation on my part as far as the way to do this economically via Vanguard. I know the minimum transaction required to start a different fund in vanguard is $3,000. So I will need what the best method to procure the other fund (i.e. sell some of my S&P 500 fund and invest in the other or lump sum contribution). I plan to have this work complete by February 29th. Does anyone have any advice on how you did it?

4. Get Promotion – I’m working hard towards this one no only am I 1. Continuing to do an "amazing" job on every task but I also have my mid-year review coming up on Tuesday where I plan to work with my boss to 2. List my responsibilities and compare to established tables for positions 3. Talk to my boss about the discrepancy I find in responsibilities and position and request to know the steps I need to take to make it to the next level (additional tasks to take on, people to talk to etc). 4. Continue to Ace my Performance Review and take the opportunities that are offered to me

5. Get Ready to Buy a House - I’ve pretty much deleted this goal from my list. (read my Rent, Don't Buy Post to better explain my reasoning). I’ve decided to rent for one more year, continue to save for a down payment (above and beyond 20%), and wait out a raise and hopefully promotion to have more monthly cash flow.

Well what do you think, am I on my way to achieving my goals for this year?

Monday's Money Funny - Who Needs a 401k? I'd Rather Have A Castle

I've started a feature on my blog called "Monday's Money Funny" which are humorous (or at least humorous to me) articles/jokes/just about anything (real or satire) that I've discovered over the weekend when I catch up on all my on line reading that spark a need for knowledge. For example last week's a satire on the government's plans to spark the struggling economy. This week's is a book review on "House Lust: America’s Obsession With Our Homes” by Daniel McGinn.

I hope you enjoy the fifth of the series from NY Times

Below is a preview of the article, click on the link above to see the article in its entirety:

Putting a modern-day finish on this propensity is “House Lust: America’s Obsession With Our Homes” by Daniel McGinn (Currency, $24.95), which chronicles an epic of satirical, if not quite biblical, proportions.

“How did home renovations come to routinely turn families’ lives upside down?” he asks. “Why do thousands of us now watch reality shows about home flipping or house hunting? Why did so many people decide to start investing in real estate, or quit good jobs to seek a fortune selling houses?”

[...]

“Our homes may no longer be making us rich,” he writes, “but living through an era when we thought they might has resulted in a permanent shift in thinking — one that will leave many of us happily obsessed with houses for years to come.”

The millions of Americans currently facing home mortgage foreclosures will probably regard such unbounded optimism as the eighth deadly sin.

I don't know about you, but after seeing this book review, I've already consolted my library to be added to the waiting list to read this book. It raising interesting questions of oneself (especially for me since I'm planning to buy a home some time in the near future) about how much of a home is really needed and what's the best strategy for purchasing one. I'm personally a huge fan of Money.MSN and found an article by Liz Pulliam Weston about how big should you really go.

Stay tuned for next week's Monday's Money Funny. Also if you run across any Monday Funnies please email them to me at future.millionaire.blog@gmail.com and if I use them I will give you credit and link to your blog.

Alright you Blog Stalkers Now's Your Chance to Comment and Win

I'm a huge blog stalker, I'll visit several blogs but rarely comment and I think/hope that's what's happening on this blog since I check my sitemeter reading and see lots of visits but very few comments.

One of my big motivations for starting this blog was that I wanted feedback from readers, otherwise I can think my thoughts on my own with out posting them, so in an effort encourage more comments I'm borrowing an idea from some of the blogs I read and offering a contest to readers who respond. For the next two weeks anyone who comments on any post will be entered into a drawing for a chance to win one of my favorite financial books The Millionaire Next Door. The more comments the more chances to win.

Happy commenting!

My Mid-Year Performance Review is Tuesday

One of my financial goals for 2008 is to obtain a promotion. To me a promotion equates to this equation promotion = more money = more savings = closer to financial freedom

My career goal was two years after my college graduation to obtain a promotion and by the end of this year it will have been two years. (And I will have worked for the company for over 6 years! – wow saying that makes me feel old even thought I’m not). To date I’ve only received one promotion and the event that prompted this promotion was graduating college since I had been verbally given a promotion a year before then contingent upon graduating college. Because of the company bureaucracy, I understood that I could not be “officially” promoted due to a lack of degree even thought I was very deserving of promotion based upon my contributions to the company. (I think there could have been a way around this but I was willing to follow the rules for the time being, since bucking the system would have meant possibility not having as much flexibility in my job like telecommuting two days a week so I could attend some classes only offered at specific times.)

In my company, promotions are typically given out in September following our end of fiscal year evaluations. Our mid-year evaluations are now in full swing, mine happens to be schedule for this coming Tuesday. The company norm for length between promotions for those of us lower on the corporate ladder occur between 2-3 years for each position, of course dependent upon an individual’s performance. People mid-ladder pole 4-5 years, and then upper ladder it really depends some are 1-2 years, while others peak out and it takes 10 years to move up. I’m still currently on the lower end so a promotion by the end of the year would be with in the norm.

Okay, enough background of my status and the company, I think I’ve sufficiently proven that a promotion is realistic with in the parameters of the corporate bureaucracy and I won’t get into all the money and client contacts above the norm I’ve made on deals for the company or the outstanding job I’ve been doing because I’ll save all that for my review on Tuesday (plus this post is already getting really long). The real meat/intent of my post is that I’ve long sense done my homework for researching how to achieve a promotion since my last one I didn’t have to strategize to obtain (and maybe this one I don’t really need to either but I’d rather be proactive). I stumbled across an article about the key steps to achieving a promotion - I wish for the life of me I knew where I got it as I’d like to give them credit and also revisit this article for my use (if you know the article I’m referring to please let me know where its from). The only remnants I have of this article are my notes on a post-it stuck to my bulletin board above my computer.

Here’s what my notes say:

1. Determine Expectations --- research HR for specific tasks/abilities, talk to Debbie about this
2. Perform a Gap Analysis between current duties and next level --- per HR’s def – ask G if there’s specific form already created, also ask about at Mid-year and request to come up with a list together to achieve the difference
3. Schedule meeting with list of skills and responsibilities, goal is next level, find project etc that will help achieve promotion --- also do together at Mid-year PPM
4. Prioritize and document assignments --- also success and stats from completed projects especially the pharmacy and $$$ made
5. Cash in chips – show documentation that achieved --- start list today of accomplishments with stats

I’ve done a real good job of following this advice over the last couple of months. I have figured out the expectations according to the corporate info established and will find out my boss’s expectations on Tuesday, I preformed my gap analysis and have already put the bug in my boss’s ear about wanting to do this as well as create a list of skills and responsibilities during the review, and I’ve clearly documented success of projects and tasks completed. So I’m hoping all goes well.

My question is what else should I do to a) prep for my mid-year, in past years I’ve already been ready with a jot list of success and my goals, but I’ve never been actively seeking promotions and b) beyond what I’m doing what should I do to position myself to be promoted in September?

Alright you seasoned professionals with several promotions under your belt…any other good tips for me?

New Favortie Blog - Fabulous Financials by Single Ma

I've just found an amazing new to me financial blog that I am adding to my favorite blogs its Fabulous Financials by Single Ma. According to her About profile she's a 30-something single mom who's long term financial goals include having a net worth of $1M+. Her blog is about her journey to financial freedom. Even though I'm not a Ma, I think we share some similar goals.

Single Ma is witty, well in formed, down to earth, on top of her financial future, and she's a blast to read with her colloquial talk about her friends and family.

I hope you'll enjoy her blog as much as I did.

(Graphic from Single Ma's Profile)

Judging The Jones’ Money Moves

I dropped off my car today to get detailed for the very first time ever. (I have owned the car since 2004). I am most excited about this and have been looking forward to it for months. In fact I’ve been wanting to do it for quite a while but always felt it was too expense, so in November I decided what the heck its worth it because in a way its also a form of car maintenance and started saving for it. Since then I’ve saved more than enough to have my car detailed.

When my car was picked up at the jobsite today to get detailed one of the guys I work with made the joked that apparently I’m getting paid too much to be able to afford these luxuries. He went on and on about how broke he is and how much he would like to be able to afford the same luxuries.

So this guy, we’ll call “Big Spender”, continues to rant on and on about how its not fair that I can get my car detailed. Well I know “Big Spender” makes more money than I do because I do the GC’s and cost analysis every month so I know roughly what his costs ( salary and benefits) to the project are per month. But despite making what in my opinion is a pretty nice salary, he always talks about how broken and in debt he is. And I can’t help but feel sorry for him, especially when he talks about how he “can’t” save for retirement because his bills are so high and that retirement is a luxury for people with money. I don’t feel sorry for him that he “can’t” save, what I feel sorry about is that he doesn’t get it, he refuses to change his spending habits. And in my humble opinion retirement isn’t a luxury for people with money, it’s a comfort for people who allocate their resources effectively and prioritize their future over their present over-spending. And while “Big Spender” doesn’t spring for “luxuries” like getting his car detailed once in 4 years and savings for retirement like I do, he does blow money like crazy on random knick-knacks, high dollar electronics, DVD’s, and credit card interest. For super bowl weekend he sprung for a brand new High-Def LDC TV, and I know that bad boy had to have been at least 40, that’s right four-zero, times more expensive than detailing a car. If you ask me he’s making a choice and that choice is that he doesn’t value the same “luxuries” that I do.

Choices --- that’s what life and personal finance come down --- priorities and choosing what’s important to you.

Well I’m off to enjoy my newly cleaned car.

Monday's Money Funny - The Current Economy

I've started a feature on my blog called "Monday's Money Funny" which are humorous (or at least humorous to me) articles/jokes/just about anything (real or satire) that I've discovered over the weekend when I catch up on all my on line reading that spark a need for knowledge. For example last week's a "satire" (at least I sincerely hope its a satire) about why not to invest in a 401k which promoted a search for information regarding reasons to invest in a 401k or other retirement savings account. This week's is a satire on the government's plans to spark the struggling economy.

I hope you enjoy the fourth of the series from The Onion.

Below is the article:

Congress To Raise Alpacas To Aid Struggling Economy

January 30, 2008

WASHINGTON—Members of Congress assured Americans that they have a definitive plan for reviving the slumping economy when they unveiled on Monday a bold new fiscal stimulus package that calls for the purchase of a pair of alpacas

Senate Minority Leader Mitch McConnell (R-KY) said the proposal, which is expected to solve the sub-prime mortgage crisis, boost consumer confidence, and pump much-needed liquid capital into the market, will be put into motion as soon as the first issue of Alpaca World magazine arrives and Congress has a chance to go through the catalog and select the perfect mating pair.

Proponents of the new economic stimulus package show off the comfort and versatility of alpaca fleece.

"We're confident that breeding alpacas will jump-start the economy and lift this nation out of debt once we get the start-up money," said McConnell, who insists the exotic livestock require very little maintenance and are of a gentler temperament than their cousin the llama. "All you need is a fertile male and a female in heat, and nature takes it course. Before you know it, the money is rolling in and there's alpacas everywhere."

After weeks of debate, a bipartisan commission finally chose the alpaca initiative over a number of other proposals, including handcrafting turquoise jewelry, an extensive job-training program in the nation's most impoverished regions, and opening a U.S. Congress seller's account on Ebay. McConnell said the group was swayed toward the idea of mating alpacas and also shearing them for their valuable fleece because it required the fewest resources and was a "super-easy" way to rake in cash.

"It is time to stop bickering and take real steps to revive the U.S. dollar—which is why we're sending a fact-finding delegation out to the alpaca farm in Hagerstown [MD] next weekend," House Speaker Nancy Pelosi (D-CA) said. "Senator Chuck Hagel's brother-in-law said we could borrow his truck to pick up the alpacas from the National Zoological Society on Saturday."

An alpaca

"I can't believe we ever wasted our time with tariffs, raising interest rates, and tax hikes," Pelosi added. "This is such a no-brainer."

Under the new proposal, a Senate subcommittee will be formed to attend to the day-to-day care of the alpacas, providing food and water, cleaning up their communal dung pile, and securing the animals in their pen inside the Senate chamber at night. In addition, Congressman Robert Andrews (D-NJ) made his office available for storing buckets and shovels, saying the space is usually empty anyway since he prefers to work from home.

A Senate majority has already voted to name the alpacas Jefferson and Bongo.

Advocates also claimed that using the alpacas' fleece for knitted and woven items would energize the textile industry and eliminate the nation's dependence on foreign- produced ponchos.

"If we are truly committed and learn to spin our own fibers, we can cut out the middleman and sell socks, hats, and gloves directly to the American public," Sen. Orrin Hatch (R-UT) said. "People don't realize how much softer alpaca wool is because they've never had a chance to try it. Once they do, though—let's just say this war could be paid for in no time."

While initial reaction has been positive, critics of the plan have pointed out that Congress has still not paid back the money it borrowed from the American public to start that silk-screen T-shirt business it was so excited about in 2004, and many were concerned that this will just be a repeat of the Bedazzling the Economy Act of 2000.

The bill's sponsors, however, claimed that they had thought it all through, and that this economic stimulus package "can't miss."

A special committee was sent to a nearby alpaca farm to scout mating pairs and pet some alpacas.

"If for some reason it doesn't work out—which it will—we can always allocate some additional spending for a goat and convert the venture into an executive petting zoo," Sen. Pat Roberts (R-KS) said. "Those other projects required too much overhead. With alpacas, it's just grass, and we already have the whole National Mall right across the street."

Sen. Mel Martinez (R-FL), a well-known fiscal conservative, remained one of the sole voices against the proposal.

"This harebrained scheme is shortsighted, ill conceived, and an absolute waste of time and effort," Martinez said. "Which is why from the beginning I said, let's raise emus. Not only do you have meat and eggs, but you can probably get some money for those feathers too."

Federal Reserve Chairman Ben Bernanke on Monday called the new plan "intriguing," but stressed that the nation's economic policy should continue to center around Sen. Robert Byrd's (R-WV) practice of selling soda and candy bars out of his office, which accounted for almost 30 percent of last year's gross domestic product.

This crazy idea to me seems about as successful as the stimulus package's $300, $600, and $1200 tax rebates. One author at CNN's Money even thinks the tax rebates would head straight to China rather than have an impact on the US's economy.

Stay tuned for next week's Monday's Money Funny. Also if you run across any Monday Funnies please email them to me at future.millionaire.blog@gmail.com and if I use them I will give you credit and link to your blog.