Big News and My Latest “Life Hack”

After all these years, I believe I have finally seen the district office in Chicago for the final time. And I’m thrilled to say that after everything that has happened, I’m walking away on MY terms. Note: there are many companies in the building so don’t worry, I’m still maintaining my anonymity…for now…

Happy Friday, Folks! I know I haven’t been very consistent with my posting lately. I’ve simply been insanely busy. I’ve been spending most of my time during the weeks working my current job and then traveling north to central Texas to spend the weekends working my new one.

Oh yeah. I found a new job. It involves working with great people I’ve built a great relationship with over the last year or so. They want me to help them take their company to the next level. And it gets better. They’re allowing me to continue to build my own company under the umbrella of theirs in the process. This is the best opportunity I’ve seen thus far in my young life and as well as things have gone for me over the last few years, I’m risking a lot of it to take this “from good to great” step up. I will most likely be resigning from the best job I have ever had within the next few weeks.

In order to juggle all of this, I’ve needed to find ways to budget my time much more effectively. And this morning it occurred to me that it’s finally time to grab a very low hanging piece of time saving fruit. I deactivated my Facebook account. Should I have done this a long time ago? Obviously. But better late than never. I hadn’t done it before because there are some groups here in Houston that only seem to post details about their events on Facebook. However, I rationalized that not only do I not have time for these activities right now, but any group that doesn’t offer a non-Facebook way of keeping up with it isn’t a group I’m interested in anyway.

I only deactivated my account for now so that I can go back to it if I want to. However, if some time goes by and I don’t miss it, I will complete the process and delete it completely. Won’t I miss out on people’s updates? I doubt it. Anyone who is truly significant to me is in touch with me regularly on the phone or in person. What I will miss out on is the annoyed feeling I always seem to come away with after scrolling for a while and seeing updates from the hordes of people I don’t truly know (because I never had a desire to) who have friended me over the years and constantly post on there. I believe the annoyance is usually mostly with myself for wasting time on something so pointless.

Here’s a hint. If you’re truly happy and successful in life, you are probably too busy being happy and successful to brag about it to the world on social media. That goes for Linkedin too, which has gotten more and more Facebook-y over recent years. I once literally watched someone destroy his career using primarily that site. And it just so happened to turn into a pretty amazing opportunity for me at the end of the day.

Anyway, I will post some updates soon and I intend to get back to my regular topics at some point when things calm down a little bit. Have a great weekend!

Don’t Be A Lifestyle Slave and You Will Be Much Happier

Being fully present while observing this beautiful sunset doesn’t cost a penny. Image courtesy of Jean-Marc Buytaert

The Matrix was an amazing movie. Yes, the entertainment value was excellent. But what really made it special was the way the concept got people thinking. It can apply to so, so many areas of life. The Red Pill community has literally based its name on the movie, and with good reason. The concept of unplugging oneself from an entire system of intentional, insidious deception, whether living in an entirely virtual world, as in The Matrix, or in a feminine dominated reality that is blindly accepted by almost everyone in our society, is powerful. Today I want to challenge you to do it with the supposed connection between consumption and happiness. And what better time than just before Christmas?

Look around you. Everywhere you go, someone is trying to convince you to spend your Christmas dollars with them. And everywhere you look, someone is rewarding that effort by doing just that. There are literally people taking out loans or loading up their credit cards because of the social pressure they feel to participate in this annual spending orgy. And these poor decisions aren’t just being made on an individual basis; to the contrary, this is a movement of self destruction that has a nearly religious fervor.

Don’t get me wrong. As a member of society with family, friends, etc, I participate in all of this to some degree. It is definitely possible to derive joy from the act of giving. But my giving is entirely grounded in my ability to do so. If I were living paycheck to paycheck, struggling to pay down a mountain of student loan debt, unemployed, or in any other form of financial difficulty, you can bet my efforts would be focused on putting out that fire. I happily give out gifts at this and other times of the year solely because I have excess available to dedicate to that purpose.

But save for a short, unfulfilling period of my early twenties, I have never completely subscribed to the “buying more crap will make me happy” mentality we see all around us. Bigger houses to fill with more and fancier furniture, more expensive vehicles, stuff galore, it doesn’t matter. The theme permeates everything. More is better. But there’s just one little problem. It isn’t. In fact, quite the opposite has been true for me. And I don’t believe I’m alone in that.  

I lived a relatively simple life before I moved from Wisconsin to Texas. My commercial quality home gym was by far my most prized set of possessions. But I still had to get rid of over a thousand square feet worth of stuff before I could move because I had decided to live in a nice, but small apartment while I got acclimated to my new home. Every item I had accumulated over the years was something I had just had to have when I originally bought it. And most of them had seemed too important to get rid of at any point before that. But when suddenly forced to get rid of all but a small, carefully chosen selection of my earthly possessions and move into a much smaller space, a funny thing happened. I felt better.

Today, I have almost no desire to buy or rent a larger home in spite of the fact that I could easily afford to do so. In fact, the mere thought of doing so stresses me out. If I bought a house and suddenly had more space, I would almost certainly fill it with similarly pointless possessions to the ones I had previously thought I wanted, but had felt liberated by getting rid of.

Now let’s look at the other side of this equation. By avoiding being one of the many people whose very life embodies an obsession with the word “more,” I’m able to save and invest over half my income. This has given me something intangible that no “stuff” could: peace. For example, my industry is currently in a deep, ugly recession that has destroyed jobs, businesses, and even lives. And at the moment, no end is in sight. But I have over a year’s worth of living expenses in cash alone and much, much more in other forms.

Is a man like me likely to be unemployed for an entire year? No. Unemployment is extremely low and I’m a high achiever. And besides, already growing very weary of the sucking dick for money that is most W2 employment, over the last year, I’ve already taken the initiative of starting three businesses. One was a fairly quick failure but another has been a modest success so far and will likely continue to be that at a minimum. And I believe the third, and latest one, has a strong possibility of not just paying my expenses, but replacing most, or even all, of my current income by the end of 2020. So in the midst of relentless job attrition in my industry, and even within the smaller world of my employer, I sleep great at night. In fact, if I were offered any sort of reasonable buyout today, or forced to take one, as is the more likely scenario, I would gladly take it. I’m confident that between my currently small, but rapidly growing business income, my investment income, my cash, and if all else fails, getting another job, I will be just fine. To me, that is worth more than almost any possession I could possibly have.

But this isn’t just because I’m good at making money. It’s also because I keep my expenses reasonable, thus setting myself a low bar to clear. With the combination of the two of them, I’ve set myself free from the shackles that keep most people trapped in enormously stressful lives that are so far from ones they would truly love. And you could do the exact same thing. But it would probably require challenging some assumptions you’ve been programmed to believe – like “more is better” or that any worthwhile people might love you less if you don’t give them the right gifts.

So this Christmas, why not enjoy some time with the people you love while also being thankful for free will? Why not use that free will to start questioning your expenses one after another – are they really making you happy in a way that you wouldn’t be without them? Are they really worth more than the step closer to freedom that money could be instead? It’s your life. You have every right to live it the best way you can find. What a tragedy it would be to spend the entire thing as a plugged in consuming machine without ever even trying anything else.

Watch Out for this 401k Trap Later in the Year

A very amateur picture of the mighty Jerry Dome, where the Cowboys would be crushing the hapless Giants tonight if not for it being an away game

Happy Monday, Folks! Today’s post is not going to apply to everyone. The problem I’m going to address falls into the category of “good problems to have.” However, if it does affect you, it will cost you money if you don’t address it. The post applies to folks who A) max out their 401k contributions, and B) have variable income – commissions, bonuses, etc. For those who don’t fall into both of those categories, don’t feel bad and don’t underestimate what can happen in your life either. This is only the third year this information has applied to me and the year before the first, I never would have seen it coming. This method may seem complex, but it is actually really simple once you understand the concept.

In most employer sponsored 401k plans, employers match some percentage of your contributions. The most common one I’ve seen is 3% if you contribute 6% of your salary, or simply 3% of your salary to keep things simple. Some are more generous than that, and many are less so. But let’s use that for the sake of our example. Let’s say you have a set $100k a year salary and want to max out your contributions for 2019. Since the limit is $19k this year, you would simply need to contribute 19% of your salary, which would both easily cover the 6% requirement to get the entire match and hit the contribution limit exactly by the end of the year. If you did that, you would contribute $19k, your employer would contribute an additional $3k, and your total would come to $22k. Bueno!

But what if your income varies depending on performance and other factors? Herein lies the problem. If you anticipate your income will end up being roughly $100k, you want to max out your contributions for the year, and you subsequently set them at 19% and forget it, one of two things is very likely to happen. Either you’re going to undershoot and leave tax shelter on the table (every dollar you contribute to a 401k reduces your tax liability) or you’re going to overshoot and lose out on some of your potential employer contribution money.

Here are some examples to illustrate the point. Let’s say you end up making $80k. At the end of the year, you will have contributed $15,200, missing out on $3800 of tax shelter. You can multiply your top marginal tax rate by that number to determine how much that will wind up costing you. But regardless, ouch! Now the opposite scenario. Instead of making $100k, you wind up making $120k. You would have contributed more than the maximum $19k at some point, except that whatever company administrates your plan is likely to simply cut off your contributions when you hit the limit. So instead, you would have finished making your $19k in contributions for the year at some point before the end of the year. It’s good to be early, right? Not in this case. Unless your employer “trues up” the match at the end of the year, which I doubt most do, you would have left $600 in employer match on the table. Why? Barring the “true up” exception, an employer matches check for check. In other words, you wouldn’t be getting any match for the $20k you had left to earn after you made the first $100k and had subsequently contributed 19k. Once again, ouch!

So how do I avoid either of these scenarios? I make adjustments throughout the year. At the beginning of the year, I set my contribution percentage as if I were only going to make my base salary. In other words, it is much higher than it will be by the end of the year, but if I don’t make a single dollar in bonus compensation throughout the year, I will still max out my 401k. Then, each time I get a bonus, I calculate how much I have left to contribute for the rest of the year, divide it by the amount of base salary I have left to make, and make the result my new contribution percentage. Admittedly, this is a conservative method. But that’s the way I prefer to operate.

You can modify this system to your liking, and you may have to if your base salary is a relatively small percentage of your total annual income. It just requires a little “guess and check.” For example, if your base salary is $40k and your total annual bonus is typically in the high five figures, you’re not going to start the year contributing 47.5% of your salary. Not only would that make for some very lean times until you got your first bonus, but it would also very likely cause you to eat up way too much of your $19k way too quickly, thus eventually defeating the purpose of the entire exercise once you couldn’t contribute a large enough percentage to get the full employer match without going over the annual limit. So in a situation like that, I would probably just estimate, start out contributing around 15-20%, and adjust as needed to stay on pace.

But one nice side advantage of doing things my way is that as the year goes on, the paychecks get bigger. In my case, the result is that I tend to do more of my after tax investing later in the year since I have more cash coming in the door. But regardless of how you do this, the important thing is that you not leave money on the table – either with your employer, or with the bad guys. I know this may seem like overkill to some of you to save what will likely amount to less than $1k a year, but this is a finance blog. And besides, no one knows what the future holds. When you’re at retirement age, you just might need that money and besides, it will almost certainly have grown considerably by then. Plus, although this took a lot of words to explain, it only takes me maybe fifteen minutes total of calculating and making adjustments throughout the year, so in my opinion, it is well worth doing. Have a wonderful week and go Cowboys!

How Much of Your Life Will You Spend Working for Free?

Someone paid an awful lot in taxes en route to buying this beauty!

The FIRE movement is everywhere these days and at times it seems like every possible related topic has been covered. But somehow, I haven’t seen a lot of discussion of the topic I want to cover today. As a finance guy, I’m all too familiar with how taxes work. When I was younger, that was one of the reasons I wasn’t too keen on getting a high paying, high commitment job – although I eventually found myself in one anyway. What my younger self saw, and what will ultimately lead to my much earlier than average exit from such a situation, is that there is a diminishing return effect. And that is especially true when you consider that in most cases, making more money requires working more hours. Those hours are literally the building blocks that make up our lives.

The more you make, the more of your money is taken away. It can seem fairly innocuous when you’re working forty hours a week and making an income somewhere in the average realm. In fact, all things considered, many people are breaking even or even getting more than they put in to begin with. But someone has to pay the bills, and if you’re working closer to eighty hours a week and making six figures (or more), that someone is you. For some folks, the reality is that when all taxes are considered, about half the money they earn is gone before they ever see it. So in another way of looking at the situation, they’re working twice as much, but only being paid for half the time.

Why would anyone take that deal? Sure, some people are workaholics. Some truly love what they’re doing to such an extent that they would be doing it even if it paid nothing. But for the vast majority of us, we do it because we want the money because we have expensive lifestyles to pay for. But what good is an expensive lifestyle if you’re spending well over half your waking hours working? What good is it if you don’t even get paid for a lot of those hours when all is said and done?

The cheaper your lifestyle, the less you have to work for free. Let’s say you only spend about $20k a year, as my ex-wife and I did when we were first out of school and clinging to the student lifestyle for a little longer so we could pay off our student loans quickly. If all you needed was $20k a year, you could work a job paying just a little more than that and live very nearly tax free (actually, you would almost certainly be getting back more than you paid in). In another way of speaking, your income efficiency would be at or around 100%. If you could tolerate that lifestyle, there would be an incredible upside in terms of having to invest very little in it. But now let’s say you spend $50k a year, which is actually still below average for United States households I believe. There’s no way you’re going to make that much without paying taxes. So your income efficiency goes down and your lifestyle costs you more of your life. And the trend continues until you’re well into the six figures and your income efficiency gets to be as low as roughly 50%. It can go even lower than that in places like California. And lifestyles tend to be a tad expensive there too, so it’s no surprise that those people are fleeing to Texas in droves.

It pays to keep your lifestyle expenses as under control as possible – quite literally. And remember, to the extent that more money correlates to more hours worked, you are literally paying for your lifestyle by working more hours (in other words, giving away part of your life) for free. This brings me back to the title of the post. How much of your life will you spend working for free? The foundation of the answer is in the cost of your lifestyle.

So next time you’re considering spending money on something, you may want to try framing the question this way. Would this purchase bring enough value into my life to compensate me for spending even more of it working for free than I am now? In some cases, the answer is going to be yes. Most of us have decided that being able to drive where we want, when we want, in a safe and reliable vehicle, is worth it. But you have to decide where to draw the line. Most of us aren’t driving Ferraris, for example. Today my suggestion is that you take the portion of your life you are literally giving away into account as you make these decisions. You only get so many hours before your time is up.

My Current Storm and the Adjustments I Need to Make

This is actually from Hurricane Ike, but last week’s tropical depression and subsequent flooding caused substantial devastation in Houston as well. Image courtesy of Jean-Marc Buytaert

I’ve reached a critical point. The stress of my situation has increased to such a degree that I need to address it in a very purposeful way in order to keep it from destroying me. It has literally begun to manifest itself in physical symptoms – terrible headaches that refuse to go away, shortness of breath at times, my heart rate speeding up for no apparent reason, etc. Obviously, I need to first acknowledge that I’m creating the symptoms by handling things the way I am on a psychological level. Then I need to figure out exactly what I’m doing, why I’m doing it, and what changes I need to make. I have the entire day (I’m writing this on Sunday) to dedicate to doing just that while I also work on the usual chores everyone has to do to keep life moving along smoothly. As part of that, I decided to write a post about the situation. I’m hoping that it will both help me to see things in a different way and inspire someone else to work through something of their own.

The heat is up about as hot as it can go. My employer’s firings have continued and while we’re being reassured that anyone left is safe, that, of course, means nothing beyond that the company has an interest in tamping down the panic among its remaining employees as much as possible. Already a couple they didn’t intend to lose, including our perennial number one rep, have escaped and the consequences to the bottom line will be severe. They’ve done it to themselves with their panicked reaction to the circumstances – and it goes way beyond simply firing a large percentage of the sales force. I’m very happy for him because it sounds like he is in a genuinely better situation with enormous potential. But guys like that will always have employers lining up to pay them basically whatever they want. For me and most of the other reps who have neither been fired, nor found the door on our own, better options aren’t necessarily available, especially at a time like this.

Every last one of us is looking, of course. But it’s not so simple. Over the last year or so, our broader industry has been absolutely devastated by a massive oversupply problem that has crushed revenue, putting hundreds of small, medium, and even large businesses under and thousands of people out of work. If one of us were to find a job at another company within the industry, we would very likely be jumping out of the frying pan and into the fire. You never know the reality of a job until you’re actually doing it and under the current circumstances, that reality is very unlikely to be a good one – no matter where you go and no matter how much a biased recruiter gushes about how great the opportunity is. Every company is dealing with its own version of the same problem right now.  

So how about getting a similar job in a different industry? No dice there either. First off, most of us are finding that there is very little interest in our services in other industries because even though our skillsets are extremely valuable in the right circumstances, we are not exempt from the fact that most employers these days want someone who is already doing exactly the same job they are applying for. While this is obviously a short-sighted attitude that has made hiring quality people more and more difficult and caused significant structural problems in our workforce, it’s still reality. Besides, even if I could get into a different industry, it probably wouldn’t solve my problem for long.

Why not? I’m in a barometer industry. When things get ugly, we tend to get hit first. When things improve, we also tend to see that first. So if I leave now after fighting a year of industry wide recession, I will probably find myself in rapidly worsening conditions as the recession spreads to my new industry. And to make matters worse, my current industry will likely be in recovery mode by then. But having just changed jobs, I would be taking a huge career risk at that point by doing so a second time in a short timeframe. It is best to be in that 3-5 year tenure range before you make a switch if at all possible. Anything less is likely to produce a suboptimal outcome in a variety of ways.

So what should I do? I believe my best option is to continue to stand and fight. I’ve made it this far and besides, bailing out doesn’t appear likely to be possible, or even profitable. Going back to the beginning of this post, since I can’t adjust the outside circumstances, I need to look inward to improve the situation. I’ve already made the disappointing decision to stop taking flying lessons. I was really enjoying them, but I simply can’t afford the time the overall process was taking up anymore and it’s not something that can be “half-assed.” I’ve also cut back on writing for this blog, although I did so a little more than intended, dropping from three posts a week to one. I intend to get that back up to two as I had planned.

The biggest thing I need to work on is to focus on optimizing everything I can control and not letting the things I can’t stress me out the way they have been. That means doing all those things that I know are crucial to my continued success to the best of my ability every day. It also means shutting out the noise. Or, as one of my more senior colleagues told me, in times like this, you just have to keep your head down and work. This is one of Stephen Covey’s seven laws and if you haven’t read his book, I strongly recommend that you do.

I have to be as mentally strong as I possibly can right now. The pendulum is going to swing back the other way for us. It always does. For all I know, it could happen as soon as a few months from now. Even if it doesn’t, it is almost certain that we’ve seen the worst of things. It would be a tragedy to fight so hard for so long and then fall apart so close to the finish line – the equivalent of being among the last soldiers killed in a battle that has already been materially won. I’m not going to let that happen to me. And on the other side of the finish line? A scenario where the market is improving again and anyone who survived the purge is well positioned to take advantage. Every hardship I’ve ever faced has made me a better man in some way. This one isn’t going to be any different.

By the way, it appears this is my 100th post on this blog. Thank you to everyone who has been along on this journey with me and I hope you all have a great day!

Why You Want to Make the Big Bucks

Plenty of money in Dallas. And such a great skyline too. Too bad I could only capture little pieces of it in any of my very amateur pictures.

Happy Friday! This is the follow up post to Wednesday’s. In that one, I talked about the downsides to having a high paying job. Today, I’m going to end the week on a positive note by talking about the opposite. It may seem a little ridiculous to write a post about reasons someone would want a high paying job. But I’m going to try to stay away from the obvious and go into the aspects someone who hasn’t had the experience might not think of. Let’s get this going.

  • You will face huge challenges that will force you to grow in ways you may never have otherwise.

I’m talking about great big, existential challenges here. As in how do I make something happen over an extended period of time that my employer claims to want (and bases my pay and continued employment on) but seems to do everything in its power to prevent from happening? This may sound like a negative, and on its face, it is. But nothing worth having comes easily. In this case, you’re stepping up to face some things that have the potential to break you, and often will come close to doing just that. However, if you’re up to the challenge, you will come away with something far better than money. In my mind, there is no greater reward than going into every subsequent life experience being able to look back at the incredible things you’ve been able to accomplish against the odds and knowing that there is very little on this planet that can stop you when you’re at your best.

  • You will learn how to deal with people more effectively than you ever would have thought possible.

We’ve all met those difficult people in life. You know, the ones that make you wish you never had to interact with them in any way. The ones who have you thinking “his poor wife!” The higher you rise in your career, the more difficult personalities you’re going to encounter. The upper echelons, at least in the business world, are mostly populated by people who were just too stubborn of assholes to allow anyone to stop them from getting there. The egos are enormous and manipulation, bullying, threatening, belittling, etc are all everyday tactics. These are people who don’t have to worry about HR since they often own their own companies or are the most powerful people in them if they don’t. Avoiding these people is not an option. And neither is failing to get results while dealing with them. For a while, you will hate it. Then, one day, you will wake up and realize that there is almost nothing left in this world that can intimidate you. The hotter the fire, the tougher the resulting metal that was forged in it.

  • You will make tons of powerful friends.

When I started out in my career, networking was always a dirty word in my mind. This was mostly because I knew very few people who could do anything for me, which made it feel like all I could do was beg for help. Not a fun feeling. But once you’re in the club of people who eat, sleep, and breathe work, most of your interactions are with people who control all kinds of different decisions – both within your company and in others. Just like in any other job, you naturally make friends, and enemies, in the process of your day to day activities. And suddenly, networking is easy.

  • You, yourself, will become powerful.

Most of us spent at least the first several years of our careers feeling trapped in dead end situations. In my case, no matter how hard I worked, it didn’t seem like it made any difference. But over time, if you’re highly capable and you work hard, it does. And one day, probably sooner than you would have expected, you find yourself in a position where almost everything you do makes a difference. And while that comes with a ton of risk and responsibility, it’s also a pretty nice feeling at times to look at a situation and realize that you made it happen through sheer force of will.

  • You will enjoy yourself at work – at least some of the time.

One of the reasons I ultimately decided not to go to law school is that law is an incredibly competitive industry where about half the people simply don’t make it and eighty hour work weeks are pretty much the norm. At the time, I couldn’t fathom working that much or that hard. But fast forward less than a decade and here I am working in the incredibly competitive finance industry, where a high percentage of people don’t make it and I’m basically working most of the time I’m awake. If you’re not already in it, that may sound like a nightmare. It certainly did to me. But somewhere along the line, I think I realized that I could either have a mediocre, unsatisfying career or I could put everything I had into a good one. Sometimes people manage to find that sweet spot in between the two, but those situations are pretty rare and typically don’t last. Our economy is just too competitive now and where there is inefficiency, it will usually be discovered and destroyed – one way or another. Going “all in” is the only option I found that allowed me to truly make an impact. And in that way, I feel I gained something rather than lost it. Instead of spending forty hours a week doing something that feels pointless and barely pays the bills, I’m spending significantly more hours than that, but I’m doing meaningful work and the bills are not a concern at all. Of course, that last part also has a lot to do with keeping lifestyle inflation in check. Don’t ever forget that you can outspend any income.

  • When you become valuable to a company, the way it spends money on and around you changes.

I still remember when I was booking my first flight in my current job. I was talking to my then new boss about a couple of possible options. One was cheaper than the other, but involved a layover. “Don’t forget the value of your time,” he told me. And it’s true. If you think about what the company pays me in a typical hour, it doesn’t make sense for me to spend a significant part of my day sitting at some airport in Detroit or some other God forsaken hellhole because the airfare was a hundred bucks cheaper. And it doesn’t stop there. Customers need to be entertained and the only rule I was ever given was to “use your judgment.” Lunches, dinners, football games, golf outings, etc are regular parts of my working life now. My recent college graduate self wouldn’t have believed the expense reports I routinely turn in today. Obviously, I do try to keep things within reason. After all, we’re running a business. But even with the company and the industry going through a very difficult time, no one has suggested cutting these kinds of expenses. They understand that if that needs to happen, we may as well just close the doors because if we don’t make our customers feel great about doing business with us, someone else will.

I think that in a lot of areas of life, you really do get what you put in. A high paying job is definitely not for everyone, because you will have no choice but to make it your top priority in everything you do. I went into that and several other drawbacks in Wednesday’s post because I think it is very important to understand the reality of what you’re getting into. But if you’re willing to pay the very high cost, a high paying job will at least give you a lot back in return. I don’t know how long I will dedicate my life to working this way. But the good news is that as time goes on, because of the work I’ve already done and the way I’ve managed my money, I should have an ever widening range of options available to me. Have a wonderful weekend!

Why You Don’t Want to Make the Big Bucks

Sure, these guys make a lot of money. But they have to take enormous risks and literally mortgage their health, both physical and mental, for the remainder of their lives to do it. And those are just some of the obvious costs.

I don’t want to send the wrong message. I’ve chosen the path I’m on, I take full responsibility for it, and knowing what I know now, there is a good chance I would still do it again. But if you’re frustrated with your income, I want to pull back the curtain and give you a taste of what it really costs to make six figures and up. I don’t want to trivialize your situation. I spent years of my life in circumstances of scarcity to the point where I still struggle with strange personality quirks that are probably rooted in those experiences. I don’t want to go back there. So in the interest of presenting both sides as fairly as I can, I’m going to write a second post to follow this one called “Why You Want to Make the Big Bucks.” But today, we’re looking at why you wouldn’t want to. Here are my reasons, in no particular order.

  • You will have very few friends at work.

Sure, people might act friendly to your face. But nothing happens in a vacuum these days. They may not know the exact amount you make, but they know it’s a lot more than they do. And jealousy can definitely make people treat you differently. You may even have people trying to take you out in an attempt to get what you have for themselves. Additionally, in order to survive in a very high income position, you have to do unpopular things. If you’re in management, you will have to fire people, you will have to tell people NO all the time, and you will have to choose between options that seem terrible to everyone below you while ignoring the options they prefer because they simply aren’t feasible. If you’re in sales, you will have to fight for your deals. Hard. You can do all you want to try to maintain a relationship with an office employee. But when he is standing between you and payday, you’re going to roll over him or go over his head. If you don’t, you not only won’t make money, but you’ll eventually be fired for lack of production. Having more power may appear to give you more options. But once you have it, you realize that those options are limited by factors people on the outside rarely see.

  • You will have a difficult time knowing if you have friends at all.

I have some wealthy friends who you would never think have more money than anyone else. If you were to meet one of them in a day to day situation, you’d see someone driving a normal car, wearing normal clothes, living in a normal house, etc. This isn’t just an effort to save money, or even to live modestly out of personal preference. It’s also an effort to hide. Lottery winners and sports heroes often don’t have that option and that is one reason so many of them wind up broke. They’re human beings just like anyone else, and they want to have normal relationships in their lives. But bad actors know that and they work their way in, taking advantage of any trust that is placed in them. Of course, there is a big difference between Adrian Peterson, who everyone knows has (or had) tens of millions to his name, and someone who has a mere one or two million in the bank. But the concept works similarly for both. Is that new girlfriend with you because she likes you and enjoys spending time with you, or is it because she can smell a payday if she can only get herself married, pregnant, etc? You want to trust her. But it is very difficult to know if you should. Often you won’t find out for sure until it’s too late.  

  • You will have a huge target on your back.

Like most companies in our industry, my employer has been under serious financial stress recently. Cost cutting has become necessary. And guess what? Firing highly compensated employees is a much quicker method of accomplishing that than firing low or average paid ones. I’m not saying people in the latter group will never lose their jobs. But if you make a lot of money and you’re not an elite level performer, you’re definitely the low hanging fruit. Even some of our most successful sales people are feeling the heat now.

  • You will be in high demand…until you’re not.

I wrote about how a lot fewer people than you think make big money just last week. That means that especially within a particular industry, most people near the top will at least be aware of each other. If you’re fired, word will get out quickly along with all sorts of rumors and theories about why it happened. If you want to move to a different company, you will probably wind up working with people you know from the past. This can be either a good thing or a bad thing. But in a world where even the nicest people have to do some pretty ugly things to get to the top, it is bad more often than it’s good. And if you lose your job as a result of your industry tanking, it’s going to be very difficult to find another one because the other companies that could best utilize your skillset probably aren’t hiring. There are plenty of those people in my life right now, whether they’ve been fired or are just at the point where they feel a switch is their best option.

  • You will be expected to give absolutely everything you have and it will never be enough.

There is no clocking out when you make six figures. You can’t really even go on vacation. You would basically just be working from home, except from a different place. If you have a family, friends, or other personal commitments, they will come second more often than not. The other option is to find another job. And remember, you’re a highly compensated employee. So when you succeed, well, of course you did. That’s what we pay you for and frankly, you still should have somehow done better. And when you don’t, you’re crucified – whether it was a result of factors under your control or not. Simply put, you’re paid to win, that’s expected, and anything less is a failure even if you did the best job you possibly could have.

  • You will make a lot less money than you think.

Political pandering aside, the reality is that unless you’re part of a small fraction of the top 1% of income earners, you don’t have access to most of the accounting tricks that allow the truly rich to avoid some of their tax liability. And even if you are, the numbers don’t lie. In 2016, the top 1% of income earners made just shy of 20% of income in the US, but paid nearly 40% of the taxes. For the top 10% of earners, those numbers were about 50% and 70%, respectively. Meanwhile, the bottom 50% made almost 12% of the income, but paid only 3% of the taxes. Keep in mind that these statistics are just for federal income taxes. Making a lot of money is very expensive just about anywhere the government is involved. Long story short, the more you make on paper, the less of your income is actually yours.

When people talk about money, they tend to focus on the benefits and ignore most of the costs. The grass is always greener on the other side of the fence, as they say, but things are never quite as easy or wonderful when you make the effort to put yourself in someone else’s shoes and view them objectively. Like I said at the beginning of the post, my personal verdict is that I’ll take the money – at least for now. But everything has its cost. Plenty of people would be capable of making very high incomes, but they choose not to make the sacrifices required. And that’s fine – perhaps even admirable. There are definitely more important things in life than money and the higher you go on the income ladder, the less of any of them you tend to have. The most effective decisions in life are made when all costs and benefits are factored in. If I’ve given you a window into the costs of something very few people actually get to personally experience, then I accomplished my goal with this post. And it isn’t all bad by any means. Stay tuned…

How I Saved $35 on a Recent Purchase and Some Other Odds and Ends

Now if that isn’t one of the stupidest things I’ve seen in a while – think about it… – Spotted in a hotel room I recently stayed in while hustling my ass off as described in this post

Happy Monday, ya’ll! I decided to take a break from my Annual Expenses series of posts as the concept was feeling a little stale. I’ll probably pick it back up next week. But for today, I want to tell you about a recent purchase, give you a general update, and do one other thing I had said I would but forgot about until now. Let’s get to it!

Over the last year or so, I’ve noticed a trend where “deals” pop up when I’m looking at my online accounts with different banks. Usually, it’s in the form of “spend x dollars at a particular store, get a y dollar reward.” I haven’t messed with them until now because I’ve been busy, the offers usually didn’t apply to anything I particularly wanted to buy, and the dollar amounts didn’t entice me to do things differently. But recently, I saw one with American Express that changed all that: spend $25 at an office supply store, get a $5 reward. Toner cartridges for my printer cost way more than that and I have to replace them every pretty routinely, so I went to the local Office Depot. The cartridge I needed seemed a little pricier than usual at $90, so I checked online. The first option I saw was $60 – and interestingly enough, it was at Officedepot.com! I asked one of the clerks if they would price match their website, it turned out they would, and just like that, I had saved $30. Tack on the $5 from the good people at American Express and the cartridge was $35 off.

The lessons here are pretty obvious, but bear repeating as a reminder. First, keep your eyes open for easy opportunities. It took me less than thirty seconds to read over the Amex offer, come up with a plan to take advantage of it, and click it. Second, a price is not set in stone. It was a little shocking in this case that Office Depot’s brick and mortar location was substantially more expensive than its website (and no, the online price did not say it was a “sale price”), but even when it’s someone else’s website, a lot of stores will price match now since if they don’t, they will probably fall victim to “showrooming.” Third, regardless of the situation, it never hurts to ask and you can’t get what you don’t ask for. ‘Nuff said.

My current career situation could be described as “frustrated and angry, but opportunistic.” In the throes of panic mode, my employer is making life incredibly difficult for those of us out in the field with a seemingly impossible double standard. Their words say “we want tons and tons of business.” Their actions say “we’re not going to let you do any business unless we absolutely have to.” And some other actions have already made it clear that “if you don’t do tons and tons of business, you’re fired.” It seems infuriatingly disingenuous, particularly when you consider that numerous firings have already happened and not one of the people left employed appears to be safe. But then you remember that these management guys are likely facing similarly impossible double standards that have been set by the guys above them and the whole thing just kind of becomes a shared nightmare for all.

The only thing that’s certain is that it’s time to put up or shut up. As a result, I’ve been busting ass like never before and thankfully, succeeding like never before in spite of terrible market conditions. In fact, not only have I become one of the higher performers in the entire country, but of the handful of people who have been hired in my division over the last five years or so, I’m literally the only one left standing. I’m damn proud of that, even as I feel for those who didn’t make it. There are two ways to look at this situation. Sure, it’s difficult and in many cases unfair. But life hasn’t been fair since the kid in preschool took the toy from you without asking, you pushed him, and the teacher only saw the second part. Or even before that when one kid was born into almost unimaginable wealth and opportunity in the US by world standards, while another was born into almost guaranteed poverty.

Bottom line, there is opportunity in everything, even when things look extremely bleak. I do my share of bitching, no doubt. I need to work on not letting things phase me as much. But at the end of the day, I’m the guy who’s out there in all out attack mode when many others are retreating. I may go down swinging anyway, but that’s virtually guaranteed if I don’t try. In the mean time, I’m making more money than ever and building on what had already been a pretty promising career. This terrible period could be the one that takes me from pretty successful to extremely successful. Someone has to come out on top, right? As many people who have gone on to give the best performances of their lives have said, why not me, why not now?

Like it or not, few entities have more data on us and our finances than the credit bureaus. We can either waste our time being angry about that, which will change nothing, or we can use the opportunity to indulge our inner data geeks and glean some valuable insights.  Recently, someone from Experian emailed me about a post on their blog. It is a comparison of mortgage debt held by different generations and since typing the word “millennial” is basically page view gold, it of course approaches the topic from that perspective. I think the data is presented in some pretty interesting ways. Of course, if you go to their blog, they’re hoping you will click on something else and buy something. But the post is free. And full disclosure, I’m not getting anything from linking to it other than to help a fellow blogger out. Check it out here.

That’s all for today, folks. Have a great Monday and an even better week!

Happy Friday! Sadly, this One is Rather Bittersweet.

Sometimes it rains. And sometimes, it POURS.

Howdy folks! This week, we saw something a little different. My employer’s latest round of firings caught just about everyone by surprise when it was done on – gasp – a Tuesday. Not even the last day of the month. Now I think they’re just toying with us. But in any case, nearly half of our division, by far the most productive in the country, is now gone – and that includes several people I truly love and care about. Yours truly survived again thanks to two very good months followed by a July so stellar it literally eclipsed any previous QUARTER I’ve had by itself. Can I keep it up? Only time will tell. The industry is in absolute shambles, with widespread attrition happening. That’s why I haven’t been able to simply leave. Very few viable companies are hiring and even if they were, I’d likely be jumping out of the frying pan and into the fire. But this latest round has opened up an opportunity for me that I believe will result in a lot of new business. So stand and fight, while diversifying by growing my side business as much as possible, seems to remain my best available course of action for now.

Do you like to play chess? I loved it as a young lad. And lately, I’ve found a fairly convenient way to get back into it a little bit. It wasn’t exactly difficult. I play on www.chess.com. You can play with a computer at various levels or with human players from around the world who you are matched with based on both of your ratings. It works pretty seamlessly. There are lots of different game settings, different types of tournaments you can participate in, analysis, lessons, different ways to practice, basically, it seems to have everything you could want. I’ve only been playing the free version and while it offers plenty of functionality for a casual player like me, there are also very reasonably priced paid versions for more serious players. I highly recommend the site if you enjoy playing chess. And if you give it a try, who knows? You may find yourself facing off with me – although you likely won’t know it.

That’s all for today. Have an awesome Friday and an even better weekend!