I recently read a blog post from Jenny Bryant that inspi(RED) me to touch on the subject of personal finances. This is something that has at times been a bit of an obsession for me, so I've probably neglected it more than I should here lately to ensure that it doesn't take me over again!
I was born in Germany in 1978 while my parents were working with the U.S. military during the height of the Cold War, we didn't have television until we moved to the States in 1989. My time was spent collecting and organizing various things and daydreaming about all the cool stuff I could do. We never had much money and were probably lower middle class most of my childhood, we didn't live in a home we owned until I was 13. What my parents couldn't give me in material goods they more than made up for in encouragement and positive reinforcement, I can not remember EVER telling my mom and dad any ideas that they didn't greet with enthusiasm, I believed I could do anything and they never told me otherwise.
Since I was a kid I've always had an affinity for making money and budgeting, I took over the family finances when I was fourteen and never looked back. I graduated from college and bought my first house when I was 21, and had a dozen properties before I turned 25. I say all that not to brag, but to give a little context. A lot of people meet me and think that I must have had some unfair advantage or inheritance to be in the financial position I'm in today, I think it's more that I discovered the magic formula I'll reveal below.
A funny thing happened about three years ago...My income from rental properties, investments, and my job were growing well into six figures, my wife had just given birth to an awesome baby boy, I was driving a Jaguar, and we bought a house that was nearly three times the size of our previous one, Life was GOOD...not exactly.
The more "successful" I became, the more I realized how empty all the stuff left me. So as we continued to spend and make more money, the discomfort was growing as well. The pursuit of money and possessions is a dead end road. I can't say that the feeling is gone, I still feel like I spend WAY too much. But I have made a LOT of adjustments to our budget and income. It's provided some great growth opportunities and best practices for budgeting. Here are a few...
Give First- It's easy to focus on bills and the stuff we "need", but if we really understand that it's all a gift, giving back FIRST becomes easier. Some recommend a flat 10%, I think the simple act of placing this as priority one is the most important step, as I've shared earlier, my goal is to give half of my total income (long way to go!).
Save Second- It's important to have a rainy day fund, no matter how much or little you make. Once you've built that up, start saving for major purchases and longer term savings.
Spend the rest--it's really pretty simple, if you must rob from giving or saving to afford a purchase, you should probably wait. Only spend what you have and even then, don't spend all of it.
If you don't have enough to do the things you'd like to do, first, evaluate how badly you need the item (you probably don't need it at all), then get creative--there are many more options than just adding a part-time job (but that's a valid idea). This is probably where I differ most from many others, rather than simply robbing from giving or saving to pay for stuff, I've always looked at opportunities to create additional income to fund the stuff I've wanted and it also gives a chance to look at expenses and decide what should be a priority. That doesn't mean it always works out, I've had several businesses that tanked, but in the long run it's allowed me to save and give and spend...more.
My hope for my family and for those I come in contact with is that I can help them realize that STUFF can never make you happy, and in fact, can actually get in the way of true happiness. That's why I've been trying to do more with less, so while my priority order of give, save, spend, hasn't changed, I'm constantly working to front load the percentages and lower my total overhead while also simplifying my assets (i.e. selling stuff). So if you want to buy some rental property or start a business let me know. MONEY isn't bad, but as and end in itself it's a fruitless pursuit. I'm slowly opening back up to the idea of making money, but now instead of imagining the next car or TV or trip, I'm picturing changed lives and a better world...Give, Save, Spend, in that ORDER.
I was born in Germany in 1978 while my parents were working with the U.S. military during the height of the Cold War, we didn't have television until we moved to the States in 1989. My time was spent collecting and organizing various things and daydreaming about all the cool stuff I could do. We never had much money and were probably lower middle class most of my childhood, we didn't live in a home we owned until I was 13. What my parents couldn't give me in material goods they more than made up for in encouragement and positive reinforcement, I can not remember EVER telling my mom and dad any ideas that they didn't greet with enthusiasm, I believed I could do anything and they never told me otherwise.
Since I was a kid I've always had an affinity for making money and budgeting, I took over the family finances when I was fourteen and never looked back. I graduated from college and bought my first house when I was 21, and had a dozen properties before I turned 25. I say all that not to brag, but to give a little context. A lot of people meet me and think that I must have had some unfair advantage or inheritance to be in the financial position I'm in today, I think it's more that I discovered the magic formula I'll reveal below.
A funny thing happened about three years ago...My income from rental properties, investments, and my job were growing well into six figures, my wife had just given birth to an awesome baby boy, I was driving a Jaguar, and we bought a house that was nearly three times the size of our previous one, Life was GOOD...not exactly.
The more "successful" I became, the more I realized how empty all the stuff left me. So as we continued to spend and make more money, the discomfort was growing as well. The pursuit of money and possessions is a dead end road. I can't say that the feeling is gone, I still feel like I spend WAY too much. But I have made a LOT of adjustments to our budget and income. It's provided some great growth opportunities and best practices for budgeting. Here are a few...
Give First- It's easy to focus on bills and the stuff we "need", but if we really understand that it's all a gift, giving back FIRST becomes easier. Some recommend a flat 10%, I think the simple act of placing this as priority one is the most important step, as I've shared earlier, my goal is to give half of my total income (long way to go!).
Save Second- It's important to have a rainy day fund, no matter how much or little you make. Once you've built that up, start saving for major purchases and longer term savings.
Spend the rest--it's really pretty simple, if you must rob from giving or saving to afford a purchase, you should probably wait. Only spend what you have and even then, don't spend all of it.
If you don't have enough to do the things you'd like to do, first, evaluate how badly you need the item (you probably don't need it at all), then get creative--there are many more options than just adding a part-time job (but that's a valid idea). This is probably where I differ most from many others, rather than simply robbing from giving or saving to pay for stuff, I've always looked at opportunities to create additional income to fund the stuff I've wanted and it also gives a chance to look at expenses and decide what should be a priority. That doesn't mean it always works out, I've had several businesses that tanked, but in the long run it's allowed me to save and give and spend...more.
My hope for my family and for those I come in contact with is that I can help them realize that STUFF can never make you happy, and in fact, can actually get in the way of true happiness. That's why I've been trying to do more with less, so while my priority order of give, save, spend, hasn't changed, I'm constantly working to front load the percentages and lower my total overhead while also simplifying my assets (i.e. selling stuff). So if you want to buy some rental property or start a business let me know. MONEY isn't bad, but as and end in itself it's a fruitless pursuit. I'm slowly opening back up to the idea of making money, but now instead of imagining the next car or TV or trip, I'm picturing changed lives and a better world...Give, Save, Spend, in that ORDER.
3 comments:
I enjoyed reading this. It's encouraging and challenging. :)
i had no idea you were a blogger. i'm on to you now.
we should totally get together for lunch one day.
Jenny, hopefully that baby comes out SOON, we missed you guys tonight! Mike, I'm ready for lunch when you are, and you should write a blog post on your visit to Lifepoint church at Premier Theater! See you both soon!
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