About this time a year ago my wife and I talked about how good 2008 had been to our household.  It was a fun moment of connection, and reflection, and celebration, and optimism.  In a demonstration of faith we agreed that 2009 would be an even better year for us.  And so it has been.

Of course 2009, for our house, began with tremendous questions in the air.  Walking away from a long term employer in January amidst the prevailing economic climate and with no known landing spot will do that.

But the time between jobs was refreshing and motivating.  Within a month I launched this site and have been faithfully exploring and chronicling my thoughts and reactions for all of those patient enough to read along.  I believe this exercise is more for my benefit than yours and it has certainly opened doors of opportunity in my mind – more to come as we track my goals in 2010.

The time between jobs also helped me identify what I had enjoyed most about my previous employer.  I honestly thought I wanted my next job to take me in directions far from my previous experience.  That was the case until I really started walking through my resume and in preparing responses to mock interview questions.  It was then that I realized how I wanted to perfect my previous experience in my next career chapter.

Then – as if suddenly – the perfect opportunity presented itself.  The fit was instant and obvious like hand in glove with much less travel and in aggregate a more handsome benefit package.  I asked, God answered.  That’s not to say there are no challenges, that’s every day, but solution to challenge and growth through exposure is part of what I enjoyed and enjoy most.

And, that’s not to say one day my dreams and harnessed abilities won’t lead me to new pastures, but 2009 introduced me to a perfect career home for this season.

2009 brought us incrementally closer to financial security – debt repayment, Roth IRA Investments, and a dream realizing Real Estate Investment.  Perhaps not all were executed in absolute accordance to Ramsey’s plan but none were whimsical or ill-considered either.

2009 brought us upgrades to our previous car situations – his and hers.  New used cars that will serve us for years to come and with no monthly payments in tow.

2009 afforded another ride weekend with my father – moments in time, for me, that at once race forward and stand still as snap shots in my mind.

2009 marked the passage of time with my 20^th high school reunion. It was everything and nothing I would have expected and it was invaluable in the way it dusted off long ignored friendships.

2009 is a banner year for my college alma mater as our football program marched through a spectacular season and now stands on the threshold of greatness.

2009 yielded reconnections with family members and time well spent with dear friends crafting memories that will endure.

Yeah, 2009 certainly delivered on its promise and our household is better for it.

…A couple nights ago my wife and I talked about how good 2009 had been to our household.  It was a fun moment of connection, and reflection, and celebration, and optimism.  In a demonstration of faith we agreed that 2010 would be an even better year for us.  And so it shall be…

Photo By: Heidi & Matt

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This article was featured in the Personal Finance Carnival

I recently attended a benefits presentation hosted by my employer.  It seems that we are changing HR/payroll outsourcers and as part of the transition we were engaging the annual selections process earlier than is typical.  We are also using this transition as a convenient time to alter our overall benefits package.

In fairness, I still consider myself new, and I’m pleased with the package but I do notice changes having enrolled in June as a newbie and again in September as part of the transition.

One interesting change had to do with our 401k offering.  Our employer is auto-enrolling everyone into the program at a modest 2 or 3% contribution level.  Employees may alter their contribution levels or self select out of the program altogether, but starting in October, the default setting is participation.

I’ve heard of this idea before.  And my first reaction at that time may mimic yours – “you’re forcing someone’s behavior” and “personal choice is being removed from the process”.  But I quickly recognized this as lame, half baked thinking.  Personal choice remains.  One can elect to not participate in this model just as one had to elect to participate before.

The reality of choice remained, but the impact of not acting is really all that changed.

Give that a moment to settle.  The concept becomes more profound as your ponder it.

Under the old “opt-in” model, I must take action.  I must elect to participate in the 401k, decide my contribution level, and select my investment options.  That’s a lot of effort for someone who may intimated by the investment process.  And given the vastness of the options I have before me, and the countless other pulls on my time, I am likely to delay the actions that I may eventually take.  Assuming investing for one’s future is a good thing, my inaction leaves me with a negative outcome.

In the new “opt-out” model, I don’t have to take action.  My contributions, albeit smaller (or larger) than I might self select, are automatically pulled and deposited into an age defined portfolio that rebalances itself as I trend towards retirement.  For those intimidated by the investment process and subject to inaction; and still assuming investing is positive, inaction positions me well relative to my future.

The default setting is “Investment ON” which for the vast majority is clearly better than “Investment OFF”.

So about the time I come around to realizing the power of this approach, I can’t help but try to think of other ways I can leverage this principle in other aspects of my life.  How can I build a system or process that is designed to pull me in the way of growth and success?

Well, I can’t say that I have this one figure out just yet but it is something I think about and try to incorporate into my daily process.  Here are a couple examples:

Habits and routines are like default settings. 

• I wake up at a certain time
• I leave my keys and wallet on the same spot on the counter every day
• I follow and chart a particular exercise routine
• I adhere to a monthly budget
• I auto pay my monthly bills

Of course many of these require a degree of discipline to stay on track.  For example, schedule disruptions such as travel for work has knocked me off more than one good workout streak and once off, I need to reset my mind and expectations – restore the default setting of working out – to get back on track.

Goal setting and taking incremental steps towards larger objectives are other ways of baking success building into your daily process.

Some ideas are more obvious than others and some yield results more quickly but all deposits of success are significant because collectively they both chart and propel our course.

What patterns or practices have you automated into your daily live that helps you achieve success?  Enter a comment below or log onto the site and share your best practices.  I’d love to learn how others define their blueprints for success.

Photo By: DiggPirate

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“Business or toil is merely utilitarian. It is necessary, but does not enrich or ennoble a human life.”

-Aristotle

A friend recently sent me this quote and it sparked an interesting email exchange as we each set ideological camps on varying sides of the discussion.

My good friend Greg espouses the quote as motivation to seek balance and purpose outside of work.  In that way, he treats the quote as a liberating statement.  Work is work, as noble a pursuit as it may be, and nothing more.  Work is not your purpose so be free to seek your life’s fulfillment elsewhere.

I consider this a fair interpretation, especially if you approach the quote with a positive state of mind.  Frankly, Greg’s interpretation has grown on me as I’ve considered it, but my initial interpretation focused on a potential dark side of Aistotle’s maxim.

I see the quote as more of a limiting factor.  Granted work is not our sole purpose in life, but as we dedicate so much of our daily selves to it, we should expect to enrich ourselves by it…. “find a job you love and never work a day for the rest of your life” is kind of the vision to which I aspire.  Taking the quote at face value seems to remove even the potential for finding that perfect job…. it stifles the search even before it can begin.

And so with these competing and compelling mindsets, we decided to write a sort of point, counterpoint article.  Explore with us our interpretations and then feel free to share yours on the comment section below.

I’ll allow Greg the honor of leading off.

I think the way one approaches this piece of wisdom depends on where you personally are in the great big bell curve I would apply to the population of workers as a whole.  Are you somewhere in the crowded middle, trying to achieve a balance between work and other pursuits?  Or are you closer to one of the fringes?  Are you criminally unmotivated and without ambition or obsessively chained to your workplace leaving time for little else?

Personally, I believe my love of work, both for its material rewards and for its own sake to be somewhere in the vast middle.  I’m dependable, like to exceed expectations and never want to make a mistake without learning from it and never letting it repeat.  Yet, when I believe my obligations for the day are done, that I’ve reasonably fulfilled my side of the contract I have with my employer, there are many things I’d prefer to be doing other than being chained to a desk.  I work a 40 hour work week and don’t pursue overtime unless the company needs me for a time-sensitive deadline push.  However, my consistency, ability to perform and willingness to take on a challenge or promotion have taken me far.  I have no complaints and neither does my employer.

 So, given that, in the continuum of possible devotion to work, most people will fall somewhere in the middle, what do we say about those on the fringe, those outliers who defy expectations of the norm?

 Little time needs to be spent on the chronic loafers and hangers on in our society.  They are legion and are generally, and I think properly, derided by those who carry the load and support them.  I am of the opinion that too many look at our social safety net and see a free lunch, choosing to put all the effort they may have put into a productive pursuit instead into hijacking the system for their own gain.  I think we can all agree that this is deplorable behavior.

 More interesting to me and, I think, to Aristotle in the case of this quote, are those on the other side of the curve whose devotion to work goes far beyond the point of diminishing returns.  What drives someone to put in a sixty, seventy or even eighty hour work week… consistently?  To my way of thinking, there are too many out there who might say in response, “Well, why wouldn’t I?”

 Again, I think the way you see such a desire depends on the prism through which you look.  But, I can’t imagine what amount of personal gain could entice me to give this amount of toil to an employer.  I suppose, once one’s basic financial needs are met, each individual must determine their own comfort level with trading the additional times of their life to their employer.  Once more, this is highly personalized, but past a certain point, I believe one goes beyond the point of providing ever more income for themselves and their family and moves into the realm of missing out on the richness and meaning that life has to offer.

 This is the caution that Aristotle provides us here.  Understand that the company that employs you is a heartless entity.  It does not “love” you.  It will not take care of you when you are sick.  If it ever deems that it isn’t getting the full measure of what it expects from you, it will toss you aside like so much refuse.  If it determines that the shareholders will react well to your job being eliminated, you won’t be asked your opinion. 

 That is the way things work and also the way they should work.  Commerce is not about “fair.”  It is about the bottom line and survival of the fittest.  Through this system, wealth is produced that benefits us both as individuals and as a collective.  But, the rising and falling of financial empires seldom impact the far more important matters of the soul.

 So, once we understand this particular “law of the jungle,” it seems a good idea to sometimes step back and realize that commerce and pure and simple toil just for its own sake must be balanced with many far more enriching pursuits.  Whether it be listening to a child in their first recital, helping a friend in need, doing something creative that speaks to other people’s hearts or even the simple act of being present for your family, I think we all could use a dose of what I see as a philosopher’s timeless wisdom.

 Where you decide to set the balance is up to you.

My Take:

In general, I view life as a mosaic and balance a myth.  Our lives are made up of snapshots, sometimes random moments in time compiled as a reflection of our time and effort.  The more individual pictures of beauty, the more prolific the entire body of work.  By allowing any segment of our lives a pass, we jeopardize the true potential of our being.

Now that is a general construct, but it is my platform.  When I first read the quote at hand, this was my first emailed response:

Hmm, that is a vaguely familiar quote but I find it pretty sad… almost an “opiate for the masses” kind of quote… some Communisitic overtones there… you can have your bass boats and religion and silly games but your ass is mine during the work week and since life amounts to little more than work you have no choice but to be ok with this arrangement.  I think life and work have more to offer than that.  I’m not saying that I have it figured out yet, but I believe there’s more to it…

Unlike Greg finding a source of freedom, I found a tone of captivity.  An interesting contrast derived only from 18 words.  I think of employment in three ways. There are J-O-B’s, Careers, and Our Life’s Work.  As we grow and evolve we should aspire to move up in this pecking order, understanding all the while that each next step is increasingly elusive.  Some folks never believe they achieve their “Life’s Work”, and others not until they engage a post-retirement 2^nd career, while still others live and breathe it every day.

Not by a long shot do I believe I have it figured out, but I aspire to progress along this continuum and (most days) refuse to allow complete comfort with the status quo.  Consider this site as an example, surely my daily routine would be easier if I didn’t feed this twice weekly deadline, but if this endeavor taps a creativity or passion that one day provides for my household then I will have taken a mighty step up the line.  Clearly, there is no guarantee, but there is aspiration backed by action and in that there is virtue.

…And perhaps a few pretty pictures along the way for my collection.

Thanks to my dear friend Greg.  We (mostly) enjoy sparring via email and it was fun to do so in a more public and lasting forum.  I hope you’ll indulge us with your comments and contributions.

Photo By: petrus.agricola

According to an ancient Chinese Proverb, “The best time to plant a tree is 20 years ago.  The second best time is now.”

I find that to be a compelling message.  And one that lends itself to the world of personal finance.  One only need imagine the line “the best time to pay-off debt, or start saving for retirement…” to identify the fit.

Several months ago, I was watching an episode of the Dave Ramsey television show.  He was doing a special on the second half of his “live like no one else so later you can live like no one else” mantra.  He was dedicating the show to callers who were debt free and prospering financially.  I wanted to find it motivating as I tried to imagine myself as one of these callers one day, but I struggled in so literally comparing their circumstances with mine – the ages, debt loads, and wealth levels didn’t align.  I could never be one of those callers.

But then a funny thing happened, either by masterful production or divine intervention a clear trend emerged among 3 consecutive callers.

Each individual’s specific details varied to some degree but suffice it to say each shared 3 unique (and highly desirable) markers.

• 100% debt free – including mortgages
• $1 million net worth – at least
• Cash saved for ‘life events” – college, retirement, emergencies, vacations, etc

The first caller was roughly 35 years old and I have to admit a tinge of jealously in hearing of this type of success at such an early age.  Having already surpassed that age, I’ll never be “that guy”.  But in hearing his story – little debt out of college and 12 years of hard work and saving I realized how proud I’d be if he were my child… and I realized that may, one day, be possible.

The second caller was roughly 45 years old and I paused a moment longer trying to squeeze my foot into his shoe.  Hmm, a mental survey of my debt and age and income… it was at least plausible if not entirely practical – the window was simply too small.

The third caller was roughly 55 years old and either by the want of my ear or the sound of his voice, he seemed the happiest and most satisfied with his lot.  Ooooh, now we’re talking.  A quick thumb-in-the-air estimating exercise…. My age, income, debt, mortgage… hmm, I think I can be that guy one day.

Or course the next morning – in true budget nerd fashion – I started building a spreadsheet model.  My assumptions were loose but in no way reckless and the final calculations were brilliant.  With some luck and lots of discipline the freshly crunched numbers revealed a compelling story.  While we all vaguely dream of a $1 million net worth, I now had a path complete with milestones and action plans.  I can do it and now I know exactly how.

Sure, it’s easy to simply wish the tree had been planted many years ago so I could bask in its shade now but that’s simple-minded too.  Now I see the seed and shovel and can envision the shade.  So let’s get to digging.

Photo By: Taymaz Valley

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If current events have taught us anything over the recent weeks, it is that tomorrow is promised to no one.  No matter the vehicle – cancer, heart attack, old age, drugs, or acts of violence – we all exit stage left at some point.

Sure, it is sad and tragic and too soon but it is also inevitable and unavoidable.

For those reasons it is imperative that we take steps to prepare ourselves, and more importantly to prepare our loved ones for those most challenging first days they will have without us.

On a lark, I once wrote about True Love and how the making of smart financial decisions for and with our family’s long term future is a fantastic expression of our love.

If we make those decisions with the knowledge that we will also benefit from those positive outcomes, then how much more an expression of selfless love if we make decisions and take actions solely designed for those we will one day leave behind?

Here are 5 actions I encourage you to take, before it’s too late: 

1 – Make a Will - leave a clear direction as to how your assets and possessions should be distributed.  Don’t feed confusion or bickering over treasured possessions you leave behind.  Make a clear and articulated stand.  Making a Will is even more important if you have children.  Who should care for them and how will their needs be provided?

2 – Life Insurance - having life insurance will help address some of the open issues in item one.  Funds from a life insurance policy can help finance a secure future for your loved ones.  But be diligent in your purchase.  Select a sound and simple term policy over a cumbersome whole life or universal policy.  As a rule, if the policy has more moving parts then there are more places to hide fees and “gotcha’s”.

3 – Organize yourself - I recently linked to a fantastic tool created by Trent over at Simple Dollar to help guide you through the organization process.  I’ve made an attempt to create a similar inventory for myself but it is not nearly as robust as Trent’s offering.  Click over and get busy.

4 – Write a Love Letter - this is not a gooey mushy letter we’d write while in the throes of puppy love.  Rather, write a meaningful and direction providing note to your wife or husband assuring them of your love, as well as, their ability to make it through these tough times.  Offer ideas and suggestions to help them in their upcoming decision making process.  What to do with thousands coming from Life Insurance, and how to best take over the reigns of the household budget may be part of the message.  Write multiple notes if you have children so they will each have something unique to them from you as they navigate life’s way without you.  Speaking from experience, this is the hardest step on the list.  I know that I shed a tear thinking about what those days might resemble but I was pleased to know that I had invested in the effort.

5 – Wash, Rinse, Repeat - This is not a one time event.  As circumstances change and life continues to propel us forward, we’ll need to revisit our information.  Items as simple as payoff balances and contact numbers will change, and elements as complex as new or growing children and estates will continually evolve.  Let your loved ones know that such documentation exists and revisit with a scheduled regularity. 

This is one deal you want to take advantage of before it is too late. 

Photo By: bogenfreund

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Hmm, with a title like that, I imagine this article could go in a number of different directions.  Never fear, this is a family friendly site and, well, I’m happily married, thank you.

But the meeting did take place in a sauna and purely coincidently so.

For the sake of context, you may recall that my wife and I recently took a trip to Florida for a long weekend.  Specifically, we were in Ft. Lauderdale and as a result of my many years travelling with my last job, we were able to redeem Marriott Reward points for a weekend at one of their fine resort properties.

As a stroke of genius, the site also offered “memberships” to those in the local community.  I’ll reserve the business strategy discussion for another time but suffice it to say that the subject of my sauna encounter was a local retiree who was also a resort member.  I never learned his name, but we’ll call him Joe for the sake of this story.

Our polite hellos segued into conversation.  “Where are you from?”, “Enjoying your stay?” types of topics.  Joe shared that he was in his 70s, was a member of the resort, and that he came nearly every day to participate in various exercise classes and to relax in the sauna and pool.

He elaborated, sharing that he was originally from Connecticut – yes, I recognized the accent – and shared that he was an insurance salesman for a number of years.  Take your pick as to which company as they all have offices or headquarters in state.

He talked about his career, how he worked hard and had his way of doing things.  He shared that he was no role model with his schedule and travel but that like Sinatra, he did it his way and was pleased with the results.

We talked some about my career and more about his.  It was an easy and friendly conversation.  It was clear that he was not living in the past but rather that he enjoyed revisiting it when allowed the opportunity.

It was hot in the sauna and my soft self was cooking.  Joe on the other hand shared that he frequently would stay in the bake box for up to an hour.  I would be no match.

So as I reached for a conversational landing spot, I shared that Joe may have been more of a role model than he realizes or let’s on.  He pursued a mostly self directed career which allowed him greater and greater flexibility and freedom as he progressed.  He retired comfortably and on his terms in his early 60’s to a luxury community in south Florida where he enjoys daily jaunts to a resort club and spa and pool.

He tried to shake off my compliment but it somehow lacked the conviction of his earlier commentary.  I like to think that smiled inside saying to himself, “It’s good to be Joe”.

Meanwhile, as I escaped to cooler climates, I was saying to myself, “One day, I want to be Joe“.

Photo By: piltti

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Have you fully funded your 2008 Roth IRA contributions?  Yes, you read that correctly, 2008 contributions.

Tax law allows you until April 15, 2009 to complete your 2008 contributions – which for an individual is limited to $5,000 for those making under $101,000 and $10,000 for couples making under $159,000.

If you’re sitting on an Emergency Fund – and not planning to tap these funds in the immediate future – sliding some of these dollars into your 2008 Roth might allow to you maximize your long run.

Face it, this is not a chip you want to leave on the table considering that it may have implications stretching 20 or 30 years into your future.  This is not a coupon clip or 0% balance transfer… this could be some serious dough.

Here are 5 steps to make this tip fly – execute them with the assistance of your professional financial planner:

1. If you haven’t already, open a Roth IRA. You know about Roth’s right? Conventional IRAs are funded with pre-tax dollars and the growth is tax deferred.  Roth’s do the opposite – they are funded with after tax dollars and all growth is tax free.  Still not sure… imagine you’re 70 and you have $2 million in the account – would you prefer to pay taxes on that entire whopping sum or to have already paid taxes only on the dollars you contributed into the account years ago?  Yep, go Roth!
2. Transfer money from your Emergency Fund into the Roth but leave it as cash in the account.  Because this is after tax income you’ll have access to your contributions at any time – say in the case of an Emergency.  However, because it’s in a Roth, all the growth is tax free.
3. Restock your Emergency Fund.  I am not a proponent of multi-tasking your money over the long haul.  However, an extra 5 or 10 thousand growing tax free for the next 30 years is worth a single simple gyration today.
4. Once your Emergency Fund is restocked – and only after it is restocked – invest your Roth funds.  Investing before you’ve restocked puts your Emergency dollars at risk in the short term, but moving them into the Roth now and then investing them a couple months down the road will result in years of tax free growth.
5. Don’t find yourself in this position again!  Update your budget so you’ll be able to fund your Roth IRAs throughout the year. 

Photo By: scottwills

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