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.
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.
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:
- 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.
- 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.
- 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.
- Personal loan. Home improvement, see #2.
- 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.
- 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 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:
- Identifying your bad habits, then defining the opposite and doing that instead.
- Set yearly, monthly, weekly and daily goals. Focus on them each day.
- Engage in self improvement by learning new skills and sharpening those you have in your industry
- Exercise daily. Mostly jogging. Eat healthier.
- Form lifelong relationships. Remembering names, birthdates, anniversaries, etc and reaching out regularly.
- Live each day in a state of moderation.
- Adopt a “Do it now” mentality and no procrastinate tasks that will help you reach your goals.
- Engage in “rich thinking’ by reading and listening to uplifting and positive things. Avoid negative news and web sites.
- Save 10% of your gross earnings and invest it.
- 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.
I read this classic again since I’m on the hunt for financial independence. This is one of my favorites since it lays out very simple rules for growing wealth slowly as the philosophy of hard work all in the form of parables and stories. It’s important to focus on our goals and read things that help us reach those goals. This book is short so you can finish it in a couple of hours.
Because I love it so much, and I want to give my kids the benefit of learning these rules early, I bought a copy for my oldest as she is about to start earning. For those unfamiliar with the book, have a look at the wikipedia page. There you’ll get all the details. If you want a copy of your own to mark up and re-read, I suggest Thriftbooks.com. The prices tend to be cheaper since it’s sort of like Amazon before it became bloated trying to be the Walmart of the online world.
I’d rather have the ability to live in the Caribbean than collect 9% per dollar. Books and a hammock sound way better than some of the alternatives.
The last few nights I have been having travel dreams. Not happy travel dreams, literal dreams about me trying to get from point A to B. In the dreams I am encountering lots of obstacles and running late, etc. I have also been thinking a lot about my personal life goals. Wanting to save more, get out of debt, create other streams of income, invest, etc. I think, and my beautiful wife confirmed, the dreams are likely my mind responding to the stress I am putting on myself. This makes sense because while I was finishing my masters, working full time and trying to raise a family, I would have dreams about being in a class and having a major test, but not having gone to that class in weeks. Or being back in band and needing to perform a technical piece I had not practiced. The mind trying to deal with that feeling of not being prepared.
Today I am making time to deal with some of that. I have to do some mundane stuff like mow the lawn and buy kitty litter, but I will also be getting some pictures made of things I can sell and get to posting. I was held back from posting because I hate eBay and their severe anti-seller policies. I also wanted to get everything in order and post all at once. Instead, I’m setting the goal of posting just one thing each day so I’m not overwhelmed and using sites like Bonanza