Personal Finance and Personal Development, from one 30-something to another

The heart of philanthropy

Trent over at The Simple Dollar wrote a great piece yesterday that kind of dovetails with what I touched on briefly in my previous post on the 10% Myth. You can read his post here.

I’d like to quote his closing thought on this topic, then ramble a bit on my own:


“Different people have different talents and different ways to give of themselves. What matters is that you actually do give, whether it be working hard so that you can make a donation to help a cause or directly working for that cause. What matters is that you put your talents to work in the end for a cause that is important to you. To me, that’s what a spiritual life is all about.”

Now, I will disagree with him on his comment that living the spiritual life is concerned with DOING something.  But, not knowing Trent or his personal views on religion, I won’t quibble on semantics.  That’s not the point here.  I do think, however, that he captured a truly important concept in that paragraph that I feel too many “spiritual” people skip right over.

You not only owe it to yourself and your family, you owe it to the world at large and to God to be financially successful to the point where you can share some of your wealth with others.  Some of you might think that you don’t have “wealth” to share, but I assure you, you do.  Per capita income in developed countries is so far being the imagining and dreaming of residents of developing countries, it’s unbelieveable.  Dollars a month (“the price of a cup of coffee a day”, as the Christian Children’s Fund commercials tell us) can guarantee one child food, immunizations and an opportunity at education.  How in the world can we, as compassionate people, not find some change rolling around in the couch cushions for this?


22 June, 2007 Posted by | giving, priorities | Leave a comment

Why I am the way I am…

So, as I mentioned previously, I was raised by a financial advisor. My dad made me save 50% of everything I ever earned, and I didn’t get to decide what I was saving for. It was just gone. I didn’t get an allowance; I had to do work. Not household chores, mind you, but mowing lawns or paper routes. Nothing was given to me. I didn’t appreciate it at the time (boy, did I hate handing over 50 cents on every dollar), but, when I cashed out a mutual fund to pay for my first year of college, I discovered my dad was pretty smart after all.

Will I make JD Jr. save 50%? Probably not. I felt it was restrictive, and it really didn’t give me a lot of money to learn how to spend wisely. It took too long to save up for anything, so I just frittered it away on nothing. My money problems came when I started college. I got a credit card (heard this story before?) and ended up running up a pretty big bill that I didn’t have any way to pay for. Due to some other choices I made, not related to the credit card at all, I ended up having to drop out of college and get a job half way through my junior year. Not having a degree meant I wasn’t qualified for much except manual labor or factory work. I chose the latter, because I could work nights and earn shift differential.

Let me tell you, $9 an hour does not go very far when you have to pay for rent, food, student loan bills (those showed up after I had exhausted my savings mid-way through my sophomore year), a car payment for a crappy used car, and credit card debt. I distinctly remember depositing a $600 and some odd check at my two week pay day and still being overdrawn at my bank by over $100. Those were not fun days.

When I was 25, I joined the Army (it was just after 9/11, and I wanted to do my part). I met my soon-to-be wife in basic training, and we were married 9 months later. She had debt, too, but we resolved that we were going to get out of it as soon as we could. We got married five years ago next week, and combined, we had over $40,000 in consumer debt. Today, I am proud to say that it’s less than $10,000, and that is on one car payment. We carry no credit card debt and live very frugally in an attempt to pay that off as quickly as possible.

So, I believe it can be done. For us, it came down to understanding that we really were in control of our lives. Both of us want to travel, work in foreign countries where we’re considered the outsiders, and give back to the world. We realize that those types of jobs don’t typically pay very much, so we know that we have to develop a lifestyle that’s rather spartan in order to be able to subsist on substantially less than what we currently make. It all comes down to crystallizing in one’s mind what is truly important to that particular person. Not everyone has to have my dreams, but everyone needs some dream. Once you decide what’s so important to you that you can’t live without it, then you’ll start doing what you need to do to make it happen, no matter how (temporarily) painful the process.

22 June, 2007 Posted by | ambition, giving, priorities | Leave a comment

The 10% Savings Myth

The Motley Fool says you need to suck it up, and I agree. 10% is a bare minimum, and most of us need to be saving more. Especially in the past few years, the real estate run-up has caused many people to discount the need for savings and view capital gains as a means to ensuring your retirement income. The plateau (and in some places, precipitous decline) in real estate prices caused by a glut of inventory on the market, coupled with the slowdown in sales may have opened some eyes, but I still worry that some folks view it as a temporary speed bump on the highway of home appreciation.

So, what can we do to free up some cash flow for savings?  The usual: cancel your cable, don’t eat out as much, quit drinking lattes, blah blah blah.  All good advice, but it seems to me that, unless you’re actually redirecting that money into some type of investment vehicle (your emergency fund stashed in an ING Orange Savings account, some index funds, or the like), you’re not really improving your financial future.

My counsel to myself was to learn to live on 75% of my income.  Honest confession:  I’m not there yet.  I’m only at 80%, but I’m working my way to 75%.  I believe (especially if you didn’t do what you should have been doing in your 20’s and started with the 10% savings from your first post-school paycheck) that I probably want to put away 15% of my pay every pay check.  I don’t plan on spending my raises, either.  Those go right off the top (as do bonuses) into savings.  And, I give 10% to a charity I believe in.  Every pay check, without fail.  The tax deduction is great, but the intangible benefit I get by sharing a part of my income with those less fortunate than I goes far beyond the reduction in my Adjusted Gross Income.

Later on, I’ll be explaining how I got to where I am today financially, and where I’m going from here.

22 June, 2007 Posted by | giving, living below your means, savings | Leave a comment