Money
Today at work I had a rather slow day. My job doesn't include any hard manual labor and requires a lot of sitting at a desk and looking at a computer screen. This means that on days like today I have ample time to research and read about whatever my heart desires. Now, I’m preparing to leave for the NAVY on February 18th of next year so I should spend my free time studying up on what I need to know for boot camp. Let’s be honest though a lot of that stuff is really boring and I’ve got a good grasp on most of it so it’s pretty easy for me to rationalize doing other things. Most the time I read stuff on The Art of Manliness because I freaking love that website and the information they put out and I think that website has done so much for my development into not just an adult but a man! Today I did quite a bit of reading on that site (I read the series on resiliency and started the series on honor in case you’re interested) but eventually my brain wandered on to the subject of money.
You see, I've always had somewhat of a draw to money. I was frugal even at the ripe age of 10 and I actually would read financial books such as Rich Dad Poor Dad before my father and let my mom know if they were any good and if they were something my dad might be interested in. Due that exposure at such a young age I became fascinated with money and what one could accomplish with enough of it. I’m not talking about the work your fingers to the bone and sacrifice personal relationships with family and friends sort of fascination either. It was more like you can start a Nonprofit organization with enough money or stop suffering at a job you hate to do things you really like. Really all of the possibilities are absolutely aimless. Now while I had read… and read, and read about finances I didn't actually do anything with the information due to my age but recently that has changed.
After signing my contract with the NAVY and turning 20 I realized holy crap I’m not a kid anymore! Don’t get me wrong I’m still a kid in most respects, probably about 99% but I make enough money now to do things like invest. This sudden realization made me want to start really getting serious about my finances. Like I said I’ve always been frugal and saved the majority of my money but I wanted to move beyond just saving money. Due to my sudden desire to get serious I read Dave Ramsey’s Financial Peace Revisited book. This book is more targeted towards people who have debt and want to get out of it and start saving for their future. Luckily for me I’ve got great parents(and frugality) so I’ve never had debt for anything including emergencies. I still started at the beginning of the book and read through every single chapter including how to handle money with your kids even though I don’t have any. Overall I personally thought the book was amazing and full of sound advice if you follow the advice in it you’ll probably be ahead of 90% of individuals financially. What I realized after reading the book was that I could skip all of the paying off your debt stuff and go straight into saving and investing. The first step is making an emergency fund. I already had an emergency fund of 3000 dollars but I thought that I should grow it a little bit. A general rule of thumb that is that you should have 3-6 months of living expenses saved up in your emergency fund. I still live at home with my loving parents so I have almost month to month necessary spending which made this step a little tricky for me. What I decided to do was save up enough to replace my most expensive belonging should I need too. If you haven’t guess that belonging is my car which is actually only worth about 1500 dollars but I saved up 5000 dollars because I wouldn't just want to replace it I would want a better one.
After you do that first baby step according to Dave you’re supposed to start saving up for purchases and paying cash. Like I said I don’t have a whole lot of purchases so I’I've always done this and could sort of skip this step. Then and only then should you start saving for retirement! That’s Dave’s philosophy at least and I agree, it doesn't make sense to save for tomorrow if you can’t even afford today! Realizing I should start saving for retirement and realizing I had no idea where begin I trusted the almighty Dave and his judgement. His recommendation is putting money into mutual funds through a Roth IRA and putting money into a 401K if your employer offers a matching option. I’ll be honest I didn't check with my employer because I’ll be leaving the company soon for the NAVY and would rather just set up a TSP with them once I get there. Armed with this knowledge I politely asked someone at my bank(Umpqua for those of you wondering) if they provided any sort of investment opportunities through the bank. Now, I’ve always been impressed with Umpqua’s customer service but this gal went above and beyond! She asked how much I had to invest and I honestly told her not much but I wanted to get started young. She told me that they use to have someone on staff at the bank that dealt with questions like this but now they use the company Umpqua Investments. I balked a little when she told me that she thought they had a 20,000 dollar minimum for initial investments but she was completely undeterred. She said that she would give my number to the folks at Umpqua Investments and that they should call me soon, but to let her know if they didn't reach me. I received a call later that night from Umpqua Investments and had a very long heartfelt conversation about my goals and where I was coming from. The man on the other end who is now my financial listened attentively and recommended exactly what my man Dave did that I invest in a mutual fund through a Roth IRA for long term growth.
After this telephone I took about a month to save up my substantially lower initial investment of 1000 dollars throughout that period I was sent links to several funds that my financial adviser thought were good matches for my goals, and I had all of my questions answered in extreme detail. I had my first meeting with my financial adviser approximately 3 weeks ago to fill out all the paperwork to get the fund started and just had my initial investment deposited this last week. Now I used a financial adviser even though I have read enough and have a wide enough knowledge base to have started doing this on my own for several reasons. 1) The fee seemed incredibly reasonable to me it’s 40 dollars a year plus 1% of whatever money I make from the investments that I make with his advice. To some people that may seem like way too much money but I don’t paying someone off of how much money they make for me, and 40 dollars is well worth the money to have a sounding board with numerous years of experience in the financial industry. 2) I’m not going to say I don’t have time to read numerous prospectuses but I definitely don’t have the want to spend all my free time reading tons of boring prospectuses and comparing my findings. Prospectuses are boring! So, it’s nice to have someone do that research for me and I still get the final say in where the money goes. 3) I’m just getting started with all of this stuff and even with a wide knowledge base a lot of financial stuff can still go over my head and quickly become a confused mess. It’s nice to have someone be able to explain the concepts to me that I just don’t quite get. 4) With me leaving for the NAVY with a high probability of me going overseas for extended periods of time I wanted to have someone who knows what’s happening financially in America and can change where my money goes accordingly without any sort of hassle. 5) Just plain old fashioned trust. Since the first time I talked to this guy on the phone there was an immediate connection that’s pretty difficult to put into words but I've never felt cheated or like he was telling me where I had to put my money or anything of that sort.
All of this recent “serious” financial activity has caused me to ponder my finances a lot more and thus how I began googling money related topics this fine evening. A phrase that I've heard and read frequently is “make your money work for you,” pretty much use your money to make even more money instead of slaving away for money and then not knowing where it disappears to. This quote is great and it’s partially the reason I began investing but what I realized tonight was I want my money to work even harder for me. A Roth IRA is great but I don’t want to wait till I’m 60 years old to reap the seeds I sow today. I've realized that I've sort of “maxed out” financially. I’m not in debt, I’m not saving for any huge purchases, I pay cash for everything, and I've started a retirement account. There is other stuff I could do like try and get a high yield checking account but Umpqua has been great to me and right now I’d rather just stay with them. I also can’t get a pay raise due to the fact that I’ll be leaving the company in 2 months. I also have a job with what I like to call is a ceiling where you reach a certain point that you really can’t push past so there’s not even a lot of opportunity to grow at my job even in ways other than financially. Noticing all of this is why I began searching for ways to “make my money work harder” on google tonight. Then I realized that some things simply take time. I mean I've reached a point where I don’t have to worry about my car breaking down, how I’m going to retire, or how I’m going to pay to take my girlfriend out on a nice date. That in itself is a huge stepping stone that plenty of people never even reach. Some people struggle just to put food in their stomachs and here I am happy as a clam with very little effort and still unsatisfied. I think the next logical step is to give money to just causes that I think can really help someone. I've done that in the past and always feel like it actually helps me emotionally and even spiritually more so than it helps the person in need because money is just that, money. It is often overvalued and undervalued but few people give it the value it deserves. It can accomplish great things and devastate people. It is a tool and a resource and should be treated as such, nothing more and nothing less. With all of that being said I will continue being frugal and saving slowly but surely for my first house, and my wedding, and my wants, but mainly for those people in the world who are unable to save for themselves for the need it far more than I do.
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