Father's Day Camping

I booked a trip to Galveston State Park at the beginning of the year for this past weekend.  It was Father's Day and I wanted to spend it camping with my daughters.  After driving through Houston during rush hour we were a bit rattled, so we got set up and kicked around the beach for a bit before dinner.  We went back that evening to see what all came out and there were dozens of sand crabs as well as some different crabs in the gulf.  The next day, we spent almost the entire day on the beach.  With plenty of sunscreen and a portable cover we were only minorly red.  Abby and I did a lot of exploring catching sea crabs, minnows in a freshwater shallow area near the dunes and coming upon a sea snake in the water.

That evening we decided to explore the city a bit.  We ate dinner then went for some ice cream.  I kept a careful eye on the weather and each forecast had about 60% chance of rain after 10.  All radars clear.  We went for a walk after the ice cream and noticed the horizon getting darker.  By the time we arrived at one of the jetties the clouds had gotten much closer and more menacing.  I decided we needed to head back, but the storm came in really quick.  I finally got us back to camp expecting to see our tent a little moved, maybe even the rainfly off and stuff wet.  To my horror it was completely flat.  When I finally inspected it, all the poles on one side were snapped in half and even one point poking through a seam in the rainfly.  Much of the stuff inside was soaked.  Our neighbor came over to inform me they had laid it flat since the believed the high winds would blow the ten away.  It wouldn't have of course, at most it would have been pushed into the large RV right next to us.  With the help of my oldest daughter, we were able to get everything packed except the now tangled mash of poles and made our way to a hotel for the night.

I've reached out to REI to see what I need to do to get new poles.  We love our tent and plan on making a sign that says "Just let me fly away" for it.  Despite everything, it wa a good trip.  Everything but the destroyed poles and driving through Houston.  We witnessed two accidents within a mile of each other with one happening right behind us.  I'd like to go back at some point.

The Boogie Man: Gun Control

I recently watched Under the Gun at the request of my beautiful wife.  I typically avoid watching things like this because it just upsets me so much.  My one and only fear is losing one of my daughters and films like this remind me just how terribly random violence, specifically with gun, can be.  Further, it makes me so angry to know it's preventable.  The only thing holding progress back is money.  Money from the NRA to buy politicians and short circuit the voice of the people. Knowing that if just ONE billionaire took an interest, they could sway a few politicians away from the terrible policies.  But they don't.  And politicians won't change either.  They will only listen to the highest bidder or, providence forbid, someone close to them is a victim.  I urge you to see the movie, reach out to your representatives and reach out to one of the groups trying to make a difference.


Gamification of finances

I am a big fan of gamification.  FitBit has done it with physical fitness.  Tripadvisor has done it with reviews.  I'm sure there are other examples, but these are the best known.  I have often thought it would be a great idea for personal finances.  Something like Mint.com but as you add goals you get badges for reaching those goals.  Since no one has made that happen yet, I am just making something up for myself.  Nothing fancy, just setting some goals and celebrate when certain targets are hit.  While not exactly what I had in mind, there is a site you can learn lessons, take quizzes and earn points and badges.  Better Money Habits is a partnership between Bank of America and Khan University.  Sign up for free, pick a topic and learn something.  Even if it is a repeat of what you already know, it's good to help keep you motivated.

Wealth Building Tools

To start getting our of debt, you need to know just how deep in the hole you are.  I use Mint.com to track my personal finances and keep a loose budget.  It also calculates your total assets, liabilities and net worth.  I wanted something more though.  If you know anything about getting out of debt, you're familiar with the "debt snowball" or paying down your debt using the snowball effect.  Every person that writes about getting out of debt will mention this at least once, because it's a powerful tool.

The general idea is you have to make the minimum payments on your debt.  If you order your debts smallest to largest then throw anything extra you can at that first debt and pay it off, you take that same amount and add it to the next.  When that is paid off, you move it to the next and so on.  The outcome is your debts get paid off quicker as time goes on since you always spend the same, just move it up the chain.

A couple of rules or it won't work:

  1. Don't add more debt.  If you add debt, you're defeating the purpose.  You'll need to live on less than what you make.  Free up any extra pennies to put towards the debt.  Find ways to trim your expenses.  You may even need...{gasp}...a budget.
  2. Earn enough to cover your living expenses with enough leftover to pay the minimum amounts.  If you can't, you'll need to get creative.  Get a second job, sell stuff, form a side hustle, whatever.
Assuming you can do those two things, you'll need a way to track and plan the attack.  I went looking for an Excel spreadsheet to do this.  I LOVE Excel spreadsheets. I could make one, but why reinvent the wheel when someone has clearly done this before?  I found one at The Wealth Formula.  It's not complicated, has a nice, easy to understand layout and plenty of room to add in the numerous creditors some of us have.  Leave off the mortgage, that's something to be dealt with later.  Do add car loans, credit cards, personal loans, 401k loans, student loans, etc.  Be as complete as possible.  Once done, figure out how much more than minimum you can do and the sheet will calculate how long it will take. Mine is currently just under 3 years.  To think that in 3 years, we'd only owe on the house if very exciting.  To think about all my wife and I could do with that amount freed up each month!  Travel, save and invest (obviously), buy real estate.  The possibilities are endless.

How did we get here?

One important aspect of getting out of a pickle in knowing how you got there in the first place.  Generally when people come into a lot of money (inheritance, lottery, bonus, etc) it leaves their wallet as fast as it got there.  Why?  The reason is they never learned to manage their money.  That's why they were in debt and why they'll get back there as quickly as they got out.  Much like losing weight too quickly is unhealthy, so too is trying to get rich quick.  There are a lot of fads making extreme promises but in the end they hurt more than they help.  Take a look at each debt, why it's there and what can you do to prevent it happening again.

A few of mine are easy:
  1. Student loan.  My largest and most persistent debt.  I had to take out loans to get both my bachelor's and master's degrees. They help get me in the career I have now, so it seems like money well spent, however, I was living above my means and so lived off part of that money.  If I'd been more careful back then, I likely would not have near as much left as I do now.
  2. 401k Loan. Next up is the 401k.  I took this out to combine two high interest credit card debts. I normally would not advise doing this since it's just rearranging the problem, and you miss out on potential growth of the funds that are not in your account. However, I was barely able to make the minimum payments so doing this has allowed me to actually start paying down principal. But how did those two credit cards get so out of hand?  One I used for an attorney to get an amended divorce decree.  I was spending an enormous amount of time on the road just to see my daughters.  Their mom was not working with me at all, so I needed to get it in writing. It was difficult and messy, but now I spend way less time getting them, bringing them, to my place and taking them back.  The other credit card was mostly due to renovating our house.  The house had smelly old carpet, no closet space and no bathroom space. My wife was moving in with me and we needed to get the changes done soon.  I could not get a home equity or other better financing so I used a personal loan and credit cards.
  3. Auto loan.  After 17 years, I needed a new vehicle.  I wanted something that could haul the entire family, go on road trips, go camping, etc.  I chose a used vehicle, but did get an extended warranty.  All financed on a four year note. 
  4. Personal loan. Home improvement, see #2.
  5. Personal loan. Taxes, after my divorce, I forgot to update my W-4 with my employer. As a result, I way underpaid my federal income tax.  I'd rather owe a bank than the IRS.
  6. Credit cards...more taxes from my wife doing what I did, a vacation that I bought impulsively, road trip with my girls for spring break, camping equipment, trying to get more points putting my expenses on a card and failing miserably to pay them off each month.  Clearly I need to reign in my spending.
Now that I know my weaknesses I am now able to ask myself if I really need a thing more than I want to see that damn debt gone.  It helps to have a visual to remind me what's important.

The M.O.N.E.Y. show interview with J.D. Roth

This was one of my favorite episodes of the MONEY Show.  JD Roth is the founder and former owner of Get Rich Slowly blog.  He now runs a blog called Money Bo$$ and travels the country with his girlfriend in an RV.  I like hearing stories about how people dig themselves out of a hole whether that's a financial, health related, relationship, whatever. Coming from behind and making something of yourself; not giving up even when things seem bleak. I find inspiration in these stories.  

What affected me most though was how similar his story is to mine. Family business, making bad decisions with credit cards, divorce after many years of marriage, love of nerd culture, etc.  While his track was one of entrepreneurship and no kids, mine was one of kids and career. He was able to come up with something that, while not unique, was innovative and captivating.  Today he lives off the fruits of that labor and inspires others to reach their goals.  He also had an interesting take on looking at our personal finances as we would a business.  

In business you generally want to make a profit.  You want your expenses to be below your income.  The gap between those two is your profit. You want your personal finances to be the same. Working to increase that gap and make sure you're saving for the future. 

The other thing was how he "gamified" getting out of debt.  Nowadays you can find all kinds of gamification for health (Fitbit), travel reviews (Travelocity), etc. where you get points badges for accomplishing small goals.  While there really is no site that does that for personal finance, you can still do something similar on your own.  Setting small challenges with yourself or friends, posting about it to be held accountable and celebrating when you hit a goal. Anyway, it inspired me to get my head wrapped around my debt situation and to start denying myself a few things to reach this goal.

Rich Habits by Tom Corley

The next book in my reading for improvement is Rich Habits by Tom Corley.  I heard an interview with Tom on The MONEY Show.  Host J Money was really into the whole thing, so I found a copy on Thriftbooks.com for a reasonable price so I thought I'd give it a go.  Overall it's a good book.  Much like The Richest Man in Babylon, the author makes the story a little more engaging by wrapping the information in a story.  Three case studies of people's lives who had poor habits and get turned around using the rich habits.  The habits are:

  1. Identifying your bad habits, then defining the opposite and doing that instead.
  2. Set yearly, monthly, weekly and daily goals.  Focus on them each day.
  3. Engage in self improvement by learning new skills and sharpening those you have in your industry
  4. Exercise daily.  Mostly jogging. Eat healthier.
  5. Form lifelong relationships.  Remembering names, birthdates, anniversaries, etc and reaching out regularly.
  6. Live each day in a state of moderation.
  7. Adopt a "Do it now" mentality and no procrastinate tasks that will help you reach your goals.
  8. Engage in "rich thinking' by reading and listening to uplifting and positive things. Avoid negative news and web sites.
  9. Save 10% of your gross earnings and invest it.
  10. Control your thoughts and emotions.
He goes into more detail about what each means and what it's effect would be.  The book is short and easy to get through.  I feel like there's a couple of things on the list I could do better with.  Nothing really new or revolutionary, just spending more time on the things that matter and less on those that don't.  

The only real complaint I have is the author centers the story on his main character JC Jobs which is an obvious allegory to himself.  The final chapter of "millions he helped and that adored him" is over the top and full of hubris.  It's not even necessary to read the final chapter as it ruins what came before.  Look past that, and you'll find some good info here.