Rich On Work: Responsibility And Meaning, Human Capacity, Kindergarten Soccer, and Bathroom Breaks For Lawyers In NYC

Chinatown, NYC. Lots of workers out there.

Hey Penny,

I was going to write an eloquent post about the nature of work, it’s philosophical basis, the various ways of looking at it, and so on, followed by a blurb about my own current work situation. But alas, my own current work situation leaves me with little time to organize an eloquent post. So, I’m going to wing this at the real world level, like our old-fashioned emails (which is how this blog got started), and ramble, making philosophical comments as I go along.

PROFESSIONAL SELF-AWARENESS AT AGE 42

Work has taken an interesting turn, and I’m busier than ever. Where to start?

I’ll start by mentioning that I’m in a leadership program — a formal course, run internally at the company, stretching over several months and designed to prepare me for executive-level work. It’s a lot about being self aware and learning how to deal with yourself and others from a leadership position. I was observed in a “leadership lab” for several hours and the observers — mostly psychologists and leadership consultants — gave me specific feedback on how I was performing. Additionally I’m getting executive coaching, as well as participating in a group where I talk about leadership challenges with peers in the course.

The whole thing is quite involved.

At first I wasn’t sure how the leadership course would go. I was kind of lost on how to apply it, because I was in the process of looking for a new position within the company. I wasn’t sure of my place. Well, I found a new position — more on that later — but even before that I found the course to be extremely beneficial. I’ve learned a lot about myself and, just as importantly, I’ve learned how to view myself as a genuine leader, not just someone trying to lead, if that makes sense.

I’m 42 years old, and people my age are running large companies. I’ve always had self-confidence, but at the same time, it’s easy to look around and see others who are more influential and more professional. I’m not talking about jealousy or envy, I’m talking about self-regard and getting past the infamous “impostor syndrome.” The reality, I’ve learned, is that I’m just as professional as many of those I consider successful, and I have been for a while. I can embrace my own career reality.

This is not to say I can’t improve — I have LOADS of room to improve. But I don’t need to be full of doubt.

BECOMING COMFORTABLE WITH DISCOMFORT

Realizing this, internally, is a personal game changer, in a couple ways. First, I’m more comfortable in situations that might otherwise be intimidating. Second, I realize that however comfortable others look, they’ve had to overcome their own insecurities too. Have you ever been to a party or an event where you thought, why am I the most nervous one here? Do I belong here? Well, probably everyone is just as  nervous and uncertain. This is all human nature and a trick our brains play on us. Once we realize this, we can take some control over our own brains and overcome these hurdles.

As I said, I just started a new position in our company.  I interviewed and I was nervous. Quite nervous. I had interviewed for a different position and didn’t get that job, so I was nervous that I’d be rejected twice in succession.

After the interview, I took a long walk because I had no idea how it went. Interviews, for the most part, stink. The awkward introductions. The delicate dance of being confident but not overconfident, comfortable but not cocky, smart but not a know-it-all. Waiting for an answer. Interviews stink.

Surprisingly, I got the job! I’m not sure if it was my interview or my connections or the suit I was wearing … and I don’t care. I got it. It was probably the suit, the J. Crew Ludlow. [Note: People should never discount the value of looking professional at work. Dressing well has helped me advance since I was a waiter. I know a guy who was baffled at not getting a certain job, and yet he adamantly resisted dressing well. It’s like trying out for basketball with cowboy boots on — it just doesn’t work.]

Funny how career paths develop sometimes. I’m now very glad I didn’t get the first job I interviewed for, because the position I ended up with is much better. One can never predict these twist and turns, and I’m sure I would’ve adjusted to a different outcome. In some ways that’s the whole point of having decent self-awareness — to realize that no matter what you are doing, you are the same person with the same qualities.

Attaining a particular job or role does not change who you are, essentially.

RESPONSIBILITY, KINDERGARTEN SOCCER, AND HUMAN CAPACITY

So what’s the point of reaching for new or challenging roles, you might ask? You are who you are, right?

I’d say … not exactly. Being self-aware of who you are at any given time is not the end of the story. When you see who you are clearly, you want opportunities that match your abilities. And if you have drive or ambition, you want opportunities that exceed and stretch your abilities.

We are always changing, evolving, growing or regressing. Attaining a new role or taking on a new responsibility is an opportunity to first be who you are and then to become who you want to be, or who you could be, by using and growing and stretching your capacities. In other words, roles can help you change. Potentially, to become a better self.

I think you’re a Jordan Peterson fan, Penny, and he talks a lot about how people find meaning in life (here’s one snippet). One of his basic conclusions is that people gain meaning by taking on responsibilities. By taking on a responsibility, you then have an obligation to do something, and by doing that something, whatever it is, you find satisfaction and meaning.

Example: I am coaching Kindergarten Soccer. I signed up, initially, on a whim. The league was desperate for coaches. At first I questioned this move — I was adding something to an already busy schedule, it messes up my Friday evenings, and I didn’t know what I was doing. I still don’t know what I’m doing. But I can see that Peterson is right. Taking on the responsibility to these kids and their parents brings me satisfaction, another sliver of meaning, and a nudge to personal growth. Paradoxically, it gives me more energy rather than less. And it makes me a more interesting and well rounded person. It opens the door to a new community of people, which may or may not result in friendships but I’d never know if I hadn’t signed up.

Coaching soccer is a relatively small obligation. The point is, anything can be a meaningful obligation. The trick is to try things, find out what works, find that set of responsibilities that gives life meaning. According to Peterson, no one is as miserable as the person who has no responsibilities and nothing to do.

For a lot of people, the standard responsibilities that drive them are work and family. Rightfully so. Even though people often complain about these responsibilities day to day, there’s a lot of evidence that their absence would create personal nihilism. People become sled dogs without a sled to pull.

THE NATURE OF A CAREER: LAW AND ORDER WITH BATHROOM BREAKS

Anyway, back to my new position at work. It is close to a dream job at this stage in my career. Interesting work, more responsibility, professional recognition, and it could potentially lead to more cool opportunities down the road, if I do well. It’s also demanding, difficult, and my head is spinning because of the learning curve.

This is the nature of career advancement. Success is great, but success often leads to bigger challenges. A person needs to decide if bigger challenges are interesting to them. We all have our limits, and it’s part of the journey to figure out what our personal capacity is. What’s the right level of personal and professional balance so that one can experience flow (competent enjoyment of a challenging activity) and also experience health and sanity?

Sometimes I think about TV shows featuring high performing professionals. Generally they are cops or doctors or lawyers who are smart and savvy. It’s usually an intense, difficult profession that requires commitment and expertise. There are always exciting situations, because it’s TV. Being a District Attorney in NYC looks amazing on Law and Order. On TV, there’s dramatic music and deep, interesting conversations with mood lighting. Why are these shows interesting? One of the reasons, I think, is because characters on these shows are showing the limits of human capacity, the weight of responsibility that humans can take on. We root for them to do well even at personal cost.

Can I get some dramatic music to go with working late?

In real life, being a DA in NYC is a long career road (law school, starting out low on the totem pole, etc). And then the job itself, which is a big career achievement, is probably stressful and difficult much of the time. Even boring. In real life, there are bathroom breaks, days off to care for sick kids, dry cleaning, bad cafeteria food, and cramped offices.

Fiction is not reality, of course, but art can imitate life. An interesting exercise is to look at your life as if it were a story, with you as the main character. Would the story be interesting? Would you be rooting for the main character to fully reach his/her potential? Or would you want the character to spend 3 hours a day on Facebook and Netflix?

When I look at my story, I like the direction of the main character and the overall cast of characters, in broad strokes — leaving out the parts about bathroom breaks.

MY SCHEDULE, RIGHT NOW

Here’s a typical day for me now:

Continue reading “Rich On Work: Responsibility And Meaning, Human Capacity, Kindergarten Soccer, and Bathroom Breaks For Lawyers In NYC”

Rich Ruminates On The Benefits Of Being Uncomfortable. Can Imperfect Systems Help Build Resilience And Confidence?

I’d say he’s comfortable.

Hey Penny,

I appreciate your last post — it gave me a bunch of food for thought. This is exactly the sort of conversation we used to have over email, so I’m happy to reply on the blog. For those just catching up, here are the first 2 installments of this conversation:

If I could sum up the main emotional thrust of my initial post, it’d be something like: “My family is in the middle of a huge, tumultuous transition right now that involves money, work, life, school — is this really the good life??”

My answer to my own question, in that post, was The Good Life Is Not About Perfect Comfort.

Your answer, if I read your post correctly, is basically: Screw that! Get out of the rat race, ditch that prison school for a place your kids can thrive, and don’t knock Craigslist.

Again, this really made me think, so thank you. I’m going to try to unpack my original thought a bit more, with updated thinking based on the past week or so.

ON RETIRING EARLIER VS. FINDING FLOW AT WORK

As I said, I understand the desire to retire as early as possible. The transition back to work in the US from overseas hasn’t been all high fives and pizza parties. So why don’t I try to retire earlier?

I won’t spend much time on the practical aspect of this, but the practical side is quite complicated. I’d need to shuffle accounts, reset priorities, move again, etc, etc. It’s all possible I’m sure, if we were really committed. Maybe I could retire at 50 instead of 55. Maybe. For 5 years of … what again?

The more important aspect of this is philosophical. As I’ve spelled out in several posts, especially my Philosophy Of Money and the Meaning of Life, personal growth and meeting my potential and the value of work are all real priorities for me.

Even though work has been a bit of a grind lately, I recently had some days that were fully engaging. There’s nothing quite like the feeling that I’m doing good work on interesting topics with other professional people I like and respect. There’s nothing quite like that feeling of FLOW: “the mental state of operation in which a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity.” (Wikipedia)

What I’m getting at is that there’s a positive side to this, and sometimes the positive side only comes after a period of difficulty. I don’t want my career to be difficult all the time, but I also realize that very few things in life are achieved or enjoyed without effort. If we didn’t persevere through the difficulty, we wouldn’t enjoy the personal and professional gains on the other side. For me, the positive aspects of my career have far outweighed the negative.

Mrs. Rich and I want to meet our potential at work as much as possible. It stretches us, makes us grow, opens up new doors of opportunity. We have lived in different places around the country and around the world, and that scratches a special itch for us. We also live the lifestyle we want to live, and we feel lucky to be so lucky. Does that make sense?

ON SPENDING TIME WITH KIDS

One thing you mentioned that I don’t really understand: “And it seems to make more sense to me to Retire Earlier (if that’s what you’re planning on doing anyway) so you can watch your kids grow up ….”

Am I giving the impression that, as a busy professional, I don’t have much time with the kids to watch them grow up?

I can assure you, that’s not the case at all for me and Mrs. Rich. We chose to live close to school so we can walk them to and from every day, and we chose to live close to work so we can be with them rather than sitting in the car commuting. Mrs. R is a Kindergarten room parent, and I’m the soccer coach. There really aren’t many more hours in the day that we could spend with the kids even if we were retired right now.

Of course, we could be with them all day if we were homeschooling or something, which leads me to the education part of your note.

EDUCATION AND ADJUSTING TO UNCOMFORTABLE SITUATIONS

I don’t disagree with much of what you said about education. I’d probably prefer the Finnish way of doing things, or Montessori, or the little preschool we used to send our kids to.

That said, I’m not all doom and gloom about our local public school. It’s not much different from the schools I went to growing up. We were expected to sit down and we had homework and all that. I turned out ok, right?

Ha, don’t answer that.

I like your point about thriving: So, I don’t know, you say you’re boys are struggling in school, but, yeah, they’ll just have to adjust. Don’t you want something better than that? Don’t you want them to thrive?

I was open about the fact that my first, emotional, transitional reaction was to pull the kids right out of the new school and put them somewhere they’d be more comfortable. That’s a natural response for many parents. I also give a nod to the stages of development you highlighted in your post — I don’t feel as strongly as you do, but I see your points.

However, I also wonder, could there be some downside to pulling them out of uncomfortable situations? Conversely, is there some upside to giving them time to adjust to a different way of doing things?

Continue reading “Rich Ruminates On The Benefits Of Being Uncomfortable. Can Imperfect Systems Help Build Resilience And Confidence?”

Rich Examines Moving Expenses, Minimalism vs. Serial Killers, His Cat’s Shopping Habits, Modern Living, and The FIRE Desire

Dear Penny,

I thought it’d be interesting to compare our actual moving expenses with our estimated moving expenses. And I believe this will lead into a rant about modern living, early retirement, and education. We’ll see.

Let’s take a peak out the window of our new situation.

Is this home?

Before we moved, I estimated $30,000 in expenses. The big expense was our car, because now we need 2 cars as modern dual income working professionals. We also needed a bunch of furniture because all we owned was a couch, a bed, and an old dresser.

Well, the numbers are in — gaze upon them and be astounded:

Click on image to enlarge.

I’m not sure what’s astounding about this, I just wanted a dramatic transition.

Mrs. Rich told me my estimates were too low, and she was right. That said, I was expecting it to be worse. Every time we leave the house we spend a few hundred dollars on something. I’m not complaining at all — we knew we’d spend a lot getting a car and getting our apartment set up. $6,000 isn’t nothing, but I’m not going to lose sleep over it. I decided long ago I don’t want to lose sleep over money. 

Here are some observations about minimalism vs. frugality, modern professional living, and FIRE (financial independence / early retirement).

MINIMALISM VS. FRUGALITY

The personal finance blogosphere has already noted this apparent paradox, that minimalism (desiring fewer possessions) is often at odds with frugality (desiring inexpensive possessions). I think we’re a good example of this.

I was telling someone about the furniture we needed, and they commented, “You could find a lot of that on Craigslist.” I can’t remember what I said, but I was thinking, “Do people still buy second-hand merchandise from would be serial killers?”

But seriously, the Rich family doesn’t use Craigslist. Mrs. Rich and I agree that we don’t really want a cheap find; we want a quality piece of furniture that we enjoy and would like to keep. That’s minimalism vs. frugality. So when you look at the line items like Rug, Dressers, End Tables — that’s what you’re seeing.

Even the cat is getting into the act, showing an interest in Crate And Barrel!

Do not give this animal a credit card.

MODERN PROFESSIONAL LIVING

I would describe us as modern professionals. We’ve got the dual careers, the dual cars, the school activities, and the Vitamix. This is what we want. But in the midst of this tumultuous transition, I need to say something: I understand.

I understand the desire for simplicity — something you, Penny, have expressed over and over in one way or another. My life right now isn’t difficult, but it isn’t simple either. And this is mostly by choice, and the consequence of a life where one moves around.

We’re busy, juggling school related activities and work related activities. On top of it all, I volunteered to coach Kindergarten soccer. What was I thinking? Yet another activity.

Most of our stuff is still on a boat, so we’re eating take out on paper plates. At night we’re exhausted. It won’t last forever, but it’s been quite week. Or two.

I understand your mixed feelings about education in America. We went from a small cozy international preschool to a huge chaotic urban elementary school. Our boys, so far, don’t like it very much. All the rules, regulations, and impersonal interactions … I understand why you can’t stand it. Part of me wanted to pull them out after the second day, drop everything, and move to Finland.

THE FIRE DESIRE

I understand why people strive for FIRE — Financial Independence and Early Retirement.

Continue reading “Rich Examines Moving Expenses, Minimalism vs. Serial Killers, His Cat’s Shopping Habits, Modern Living, and The FIRE Desire”

Monthly Happiness Report: Rich Is Not Crabby, He’s Back In The USA At The Beach. And There’s A Beef Jerky Outlet. — August 2017

This guy is crabby. Unlike me.

Dear Penny,

We just got back to the US a few days ago and it was a loooonngg journey, but I’m not crabby. Happiness levels steady. Elevated, even. And here’s why.

We are currently in the Outer Banks (OBX) of North Carolina, one of our favorite places on the East Coast. We rented a house by the beach to make our transition back to the States as easy as possible. It’s a big change for our family. And what better way to recover from jet lag than a couple weeks at the beach?

And jet lag there was. We had an 11 hour flight followed by a 1 hour flight followed by a 3 hour drive followed by 7 hours of waiting for the beach house to be ready. 5 suitcases, 5 carry-ons, 2 car seats, and 2 little jet lagged kids.

Totally worth it. Check out this view.

Worth the journey.

Oh yeah, about that crab in the picture. At OBX, there are ghost crabs that come out of the sand at night, near the water. So we wait until it gets dark, take some flashlights, and search for them. More accurately, we chase them around and taunt them as only a family with twin boys can. Last night there were hundreds of crabs, including the unlucky fella at the top of this post.

EXPAT CULTURE SHOCK AND GRATITUDE

A few observations on setting foot in the US for the first time in 2 years, and then I’ll get to my happiness numbers.

The people are nice. Maybe it’s a matter of being down South, but US Americans have been nice and friendly, lots of smiles and waves.

The food is plentiful … and often unhealthy. Compared to where we were living, the US has billions of food choices, whether at the grocery store or restaurants. I’m all for the ability to make individual choices, but there’s no denying that the ability to choose wisely is impacted by availability. On the way to the salad aisle, there are hundreds of quicker, easier, tastier, unhealthier options. That said, I’m proud of my kids — 5 year old boys, mind you — for actually requesting salad for dinner tonight. (We kinda brainwashed them by telling them about Super Size Me. They’re extremely frightened of fast food.)

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The first store I shopped at. If this isn’t America at its most American, I don’t know what is. Beef Jerky has an outlet store??? Oh yes. C’mon, nobody pays retail for jerky anymore.

Consumerism is omnipresent. Along with food, I’ve noticed the sheer availability of consumer products, services, and activities. Again, not bad from the perspective of free choice, but with consequences. We were living overseas in a place that put a premium on public playgrounds. Here, the ratio of playgrounds to stores is much more sparse. Of course, the beach is a huge playground I guess.

The familiar feels new and exciting. We love to travel, and we will continue to explore new areas even back here in the US. This is our first time staying in the southern OBX, and we visited Ocracoke Island, accessible only via ferry boat or small airplane. We took the ferry. Fun trip, beautiful scenery. Very grateful for these opportunities and experiences.

HAPPINESS, BY THE NUMBERS

As is my custom, it’s time for the happiness numbers and some highlights from each category. For new readers, here’s my methodology, explained in more detail in the following posts:

Continue reading “Monthly Happiness Report: Rich Is Not Crabby, He’s Back In The USA At The Beach. And There’s A Beef Jerky Outlet. — August 2017”

MOVING DAY! Quick Thoughts About Living Overseas And Money And Happiness.

Dear Penny,

I have a lot I’d like to write but very little time, because tomorrow we head back to the US after living overseas for 2 years! More complicated topics will need to wait. But, I wanted to share some quick money and happiness lessons I’ve learned from our time here. In no particular order.

Perspective Is Valuable

Living in a foreign country has helped me appreciate the US, and it’s also given me some perspective on how to think about … anything and everything. What I mean is this: take any given question about life or money or happiness or whatever. And then imagine you grew up in a completely different socioeconomic culture.

Question: “What should I think about work and investing and retirement?”

Answer, from the perspective of …

… a personal finance blogger: “Invest only in Vanguard index funds. The market always goes up. Retire early.”

… a poor person in an urban slum: “I would give anything to have a good job.”

… a rice farmer in China: “Watch out for that water buffalo.”

… a French ski instructor: “Work to live, don’t live to work.”

… Penny: “Get off your computer and stop thinking about retirement so much.” 🙂

… a father of twin boys: “Hey — how’d you get on top of the house?”

It’s easy to get caught up in the particular circumstances of life. I like to remember that by sheer chance I was born into my culture and my family, and life would look a lot different otherwise. I try to make smart choices but I also know that for most decisions, there’s more than one right answer. If a certain answer sounds silly from several other perspectives, well then that certain answer might be silly. Or not as important as we think.

I Don’t Regret Any Spending On Travel Or Experiences. Life Is For Living.

We visited 7 or 8 countries while living overseas, ate a bunch of crazy food, saw some incredible sites, and enjoyed temper tantrums and ill-timed bathroom visits with kids in several European capitals.

(European in the bathroom. Get it?)

As you know, we’ve paid big money for these experiences. I wouldn’t want a dollar (or a Euro) back. Life is short. Life is mostly for living, isn’t it? I guess I’m like the French ski instructor sometimes.

Continue reading “MOVING DAY! Quick Thoughts About Living Overseas And Money And Happiness.”

How Rich’s LLC Turned $30,000 into $200,000 — A Story About Brothers, Bubbles, and Prairie Dogs.

Dear Penny (and Mr. Othalafehu and Mr. Retirement Manifesto),

After my Retirement Plan post, Mr. O, specifically, asked about my LLC holdings. Happy to oblige. Here’s the story of how a $30,000 investment in farmland turned into more than $200,000. There are bunch of graphics and some stories from my neck of the woods.

Note: This page has affiliate links to good products we endorse. Full disclaimer. 

BROTHERS LLC

I’m going to start this story at the end, and then talk about the beginning, and then return full circle to the very end, like one of those annoying historical fiction novels that jumps between the past and the present. I’ll try to do this without being annoying. Go read or watch Julie and Julia for a barometer of this approach. If you can stomach it.

Careful readers of my Retirement Plan, like Mr. Manifesto, noticed that around 30% of my Net Worth is currently tied up in what we will call Brothers LLC (Limited Liability Company). Here’s my net worth pie chart, updated:

Rich’s Net Worth Pie. Click on image to enlarge.

Brothers LLC is like an investment club I’m in with my 2 brothers. More accurately, it’s me and Mrs. Rich and my brothers and their spouses. We all own our shares through our respective family living trusts (which I highly recommend for estate planning — more on this in a future post).

My brothers and I each bring unique contributions to our company.

  1. Brother 1 is a former doc and a visionary. He can afford to be a visionary because he made huge money as a doc. He owns 55%. The LLC was his idea, and most of our holdings have come through his connections.
  2. Brother 2 is a banker, he’s our numbers guy. He also makes big money, but he’s fairly conservative, as bankers can be. If he doesn’t like a deal, we usually pass. He owns 20%.
  3. Brother 3 is me. I’m the youngest. I bring creativity and comic relief and the occasional flash of insight. I own 25%.

The foundation of Brothers LLC is farmland. None of us are farmers anymore, but we farmed growing up and we come from a long line of wheat farmers. My ancestors worked the land in France before immigrating to Canada and the northern Midwest, USA. It’s here that I must introduce a seedy character named Grandpa Jack. Get it? Seedy?

That’s not his real name, but people called him that. And now, we go back.

Related: Rich’s Financial Origin Story: From Farm Boy To Theology Student To High Income Professional

GRANDPA JACK, NORTHERN MINNESOTA HILLBILLY

Grandpa Jack was a farmer who didn’t graduate from the 8th grade because, as he told the story, he was afraid of my grandmother. I didn’t get it, but I nodded when he told the story.

His whole life, he worked on the farm. Even in his 70s he would be fiddling around, fixing up old trucks, cussing about broken parts. His favorite was “Damnitalltohell” — properly said as one extended compound word. Honestly, I was afraid of the guy. Later on in high school, I told him I was going to start traveling to help people in other countries. His only question was, “When will you be back to the farm to work?” My grandma slipped me a card with $50 inside, and she wrote: “For your trip. Don’t tell Grandpa.”

Grandpa Jack had a falling out with my Dad, for various reasons, including the fact that when he retired he didn’t give Dad the land as he had promised. He made my Dad buy it in sections, full price.

In 2005, Grandpa Jack died, and true to form, he did not leave any land to my Dad, even though Dad had worked it for 40 years. Grandpa left land to his daughters (my aunts) and to a grandson (Brother 1). Other grandchildren received silver bars that Grandpa Jack had hidden in a woodpile in his backyard. I’m not kidding.

This is real farmland.

AUNTIE JUNE, NORTHERN MINNESOTA HILLBILLY

In 2008, my Auntie June, a chip off Jack’s block who had inherited 80 acres of land, was looking to sell. I have no idea why. Auntie June is a total mystery to me and I can’t believe we are related.

I just finished reading the excellent book Hillbilly Elegy (that you recommended, Penny). Grandpa Jack and Auntie June remind me of characters from that book. I’m not sure we have a good name for these people in Minnesota, rural folk who drink terrible beer and tell dirty jokes, and also shovel the sidewalk and wave to everyone they see. Imagine crossing a hillbilly with a character in the movie Fargo and stick them in Little House On The Prairie, and there you go.

Could we call them Prairie Dogs? I mean that with all respect.

Auntie June smokes like a chimney and carries dice in her purse, just in case anyone wants to gamble for quarters. And if you see Auntie June, you’re going to gamble for quarters. I’m guessing this habit has something to do with why she wanted to sell the land.

BROTHERLY VISION AND A DECISION

Like I said, Brother 1 is a visionary. After he inherited the farmland (151.5 acres), he immediately began pestering us to form a company and use the land as the basis for more investments. He could’ve done this himself, but he wanted the land to be a family asset and he also wanted to decrease his own risk. We ignored him at first.

But then he heard Auntie June was selling. So Brother 1 proposed that we pool our money to buy Auntie June’s land, and he would add it to his own land and give us a discount in the process. We would then have 231.5 acres to work with in an LLC.

The total cost to me would be $30,000 for a 20% share of the total. $30,000 was a lot of money to me in 2008. I was newly married, we were paying of Mrs. Rich’s student loans (totaling $30,000) and we were thinking of saving for a house.

We had to decide: house or LLC?

It was philosophical. Conventional wisdom says own a home. But we liked the idea of growing our investments and renting our residence. And I liked the idea of starting a family business with my brothers. So we scrapped together the money and BROTHERS LLC was born — from the ashes of Grandpa Jack’s grave and Auntie June’s cigarettes.

Chart reflects Iowa prices, but this is an example of farmland mania. Click on image to enlarge.

THE GREAT RECESSION AND THE FARMLAND BUBBLE

With my brother’s discount, our $30,000 was immediately worth $50,000. And much to our surprise, we had bought farmland just before land prices skyrocketed. In 2008, our land was worth around $1,150 per acre and rental prices were around $65 per acre, per year. A decent ROI of 5% or so. Then the Great Recession caused the Fed to lower interest rates, causing wheat and land prices to go nuts. Land prices tripled and rent prices doubled.

In 2010 and 2011, I started seeing articles about farmland in the NYT, WSJ, and USA Today. Not normal. By 2012, I was pounding the table with my brothers, telling them that we may never see prices like this again. Even my Dad, who loves to say, “God ain’t making more farmland,” was convinced to sell a section of land. That said, we didn’t want to sell ALL of it — it’s our family heritage and a unique asset. So Brothers LLC decided to sell the 80 acres we bought from Auntie June. And that’s how my $30,000 investment jumped to $186,000 in a flash.

As you can see on this chart, the value of our land went up 220% in 4 years and my investment went up right with it. In rural Minnesota, you just don’t see moves like this. It’s not New York, it’s the Prairie!

Rich’s share of the LLC from 2008-2012. Click on image to enlarge.

There was a bidding war and we got a great price. I think my profit after taxes and fees from the land sale was around $39,500. Instead of pocketing all the cash, I used $30k to purchase an additional 5% in the LLC from Brother 1. So, now I own 25%

DIVERSIFICATION AND LEVERAGE

The story of BROTHERS LLC after that is mostly a story about diversification and leverage.

Continue reading “How Rich’s LLC Turned $30,000 into $200,000 — A Story About Brothers, Bubbles, and Prairie Dogs.”

Rich’s Retirement Plan: Playing BINGO Will Not Be A Source Of Income

A common image for retirement is a sunset. Is that depressing?

Penny,

I just realized I have no idea what you think about retirement. You probably aren’t thinking about it very much, considering the student loans you still need to pay off. But when you hear the word “retirement,” what do you think of?

Growing up, I thought of retirement as for only the very old. You got old, you couldn’t work anymore, so you had to stop working. It wasn’t a choice so much as a stage of life. And in the northern Midwest, you had 2 options:

  1. Become a snowbird. This was the usually preferred option for those who could afford it. Move someplace hot (like Arizona or Mexico) for the winter, and return to the Midwest in the summer (to a lake house).
  2. Stay in the Midwest year round. This was the option for those who didn’t want to change their way of life. During the cold winters, they’d watch TV and play BINGO.

As you might guess, I’m not into these options. No gray haired communities in a brown desert. No BINGO. I want travel, adventure, and good food. Mostly, I want the freedom and flexibility to decide later. I can’t be sure what 65 year old Rich will want (or, more importantly, what 60 year old Mrs. Rich will want), but I want enough dough to do whatever our future selves want to do.

So how will I get there?

Recently, some personal finance bloggers started a series called the Retirement Drawdown, so I thought it’d be interesting to analyze my own retirement plan and join the series. Please refer to the end of this post for more information and links to all the bloggers who have contributed.

RICH’S RETIREMENT PLAN — WHAT WE’RE STARTING WITH

As you’ll see in the chart below, most of my net worth is in retirement accounts — 401k and IRAs. 63.4% of my net worth, to be exact.

Click on image to enlarge.

Aside from retirement accounts, my biggest investment by far is in an LLC I own with my brothers. We started the business in 2010 and we invest in farmland, commercial real estate, and one small business. Every year it seems we find 1-2 new investment opportunities.

My share of the LLC is currently worth $198,370. I’ve contributed $69,000, so it has done well. We receive occasional distributions from the rental income and the sale of properties. I’ve pocketed $38,670 so far. In retirement, I’m hoping it will produce regular income — more on this later.

THE NEXT 15 YEARS — PREPARING FOR RETIREMENT

My working assumption is that Mrs. Rich and I will both be working 15 more years. She’s younger than me, so maybe she will work a few years longer. Our kids are 5 years old, so in 15 years they will be 20, and by then we’ll have a good idea if they are “launching” as they should. We’ll see.

There’s another reason 15 years is a good estimate for running our numbers. We are in the lucky position of having a company pension. In around 15 years, I’ll be able to receive the full pension benefit, more or less.

So, what’s the plan over the next 15 years? Get ready for an exciting, unprecedented, and innovative answer …

!!!

We’ll keep doing what we’re doing. Managing cash flow, investing opportunistically, and maxing out retirement accounts. It’s a low-risk ride.

FUTURE ASSETS

Here’s what I expect from my various net worth categories over the next 15 years, in 5 year blocks:

Click on image to enlarge.

Ok, so this will take some unpacking.

Cash: Easy, this is just a gradual build.

HSA: I’m going to start maxing out an HSA in 2018. Currently, one can contribute $6,750 per year. That number may go up over time, and there might be investment gains. Then again, I might spend some of it on health expenses. So, I’ll assume no increase in contributions and a 0% rate of return here. The calculation is just $6,750 x 15.

Investments:

Opportunity Fund– Opportunity Fund? Well, I don’t like the stock market very much right now, so I want a fund that will earn some interest and give me some dry powder for future investment opportunities. I’ll initially use my state’s Municipal Bonds for tax free 4% dividends. I plan investing $1,000 per month for 2018, and increasing this by $250 per month every year until I hit $3,000. At 4% compounding, it’ll add up fast. Finally, I’m assuming that I’ll use $200k of this on college for the kids, either by transferring it to a 529 or just withdrawing the money.

I should note that I’ll probably find other investments along the way, so this fund is a place holder.

Alternative Investments– I’m always looking for new and different investments. For example, I’ve earned a total of $30,000 investing over several years in marketplace lending via Prosper.com. I do this now primarily in a Roth IRA, for tax efficiency.  

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LLC– My assumption is that the LLC keeps growing at a decent pace. Even without appreciation, the land and properties are creating good cash flow. I assume $10k each year for the first 5 years, $12,500 each year for the next 5 years, and $15,000 each year for the final 5 years. These are actually fairly conservative numbers, around 5% return on investment.

There’s a bump in value to the LLC in the final year due to an expected farmland inheritance.

Retirement: These accounts are on autopilot, and my estimates are very conservative at 2-2.25% compounding, which is currently the rate on “risk free” treasuries.

Thus, at the end of 15 years, my pie chart will hopefully look something like this:

Click on image to enlarge.

All well and good. A $3MM nest egg! 

At first I thought my retirement plan was boring, but there’s nothing boring about a $3 Million nest egg. I try to remember this every month as I’m slowly but surely saving.

And now, my plan for income …

Continue reading “Rich’s Retirement Plan: Playing BINGO Will Not Be A Source Of Income”

Monthly Happiness Report: Rich Makes Sense Of Internet Commentary, His Cousin’s Controversy, And The Good Life –July 2017

Hey Penny,

Glad to see your technology hiatus is continuing to reward you with happiness. I’d like to hear more of your thoughts about the Amusing Ourselves To Death book, when you have time. 

I think modern technology is mostly AMAZING — after all, I just received a new iPhone from T-mobile that I can use to text for free internationally! But I also know technology can suck away your time and your life if you don’t follow the 4 Commandments.

MAKING SENSE OF INTERNET COMMENTARY

You wrote your happiness report before July 14th (also French independence day, as it were), and I’m wondering how that day impacted your happiness level. It was the day your guest post aired on the widely read Making Sense Of Cents blog. You detailed your journey, which you’ve done before on this blog: in your origin story as well as in your posts on giving to charity and receiving food support. The Making Sense article was an amalgamation.

Some of the comments were nice and some were … well … pas sympathique. Not nice.

Mon dieu. I enjoy interacting with comments most of the time, but I don’t think anyone would say that the internet comment sections are a shining example of technology benefiting humanity.

I was thinking about why some commenters were unhappy with your article. Here are the two main charges, simplified:

  1. They think it’s unfair that you receive government assistance, based on how you are spending your money.
  2. They don’t like the way that you think about it: Thoreau and the Art of Asking and all that. 

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MAKING SENSE OF MY DEFENSE OF MY COUSIN’S CONTROVERSIAL BLOG POST

We’re not hillbillies, but we are cousins! Click on image to view this awesome book on Amazon.

I find it funny that some commenters questioned me for defending you. Was I supposed to turn on my own cousin?? I felt like Mamaw in Hillbilly Elegy, ready to start kicking butt!

Here were my basic responses to their unhappiness.

Response to Charge #1: People get riled up about taxes. As you know, I pay LOADS of taxes. And the idea is that we want our tax money to go to exactly what we think are the highest priorities and best programs. When they see that you, Penny, receive government money, well then there’s anger. Unfair! You’re a regular ol’ blogger! You need to spend less and work harder!

Now I’m not an expert on taxes, but I can comfortably say that food assistance is not the big national tax scandal to be worried about. It’s peanuts (perhaps literally!) compared to the national debt and other such obligations that have little social benefit.

The fact is that you receive food support because you qualify for food support. We can argue about the system and how fair it is, but it makes no sense for you to turn down this support. It’s for food, and it’s completely separate from how you spend the rest of your money. It wouldn’t do an ounce of good to anyone for you to turn it down, which you’ve said you’re eager to do as your income grows.

People don’t normally consider the idea of rejecting government benefits when they do their own taxes. I’d venture that most people who receive the standard deduction are not refusing their refund checks for the good of the system, because they can afford to. I’d love to hear from someone who has done this.

As for how you spend your money …

This part is ironic for me to defend because, as you know, we don’t agree on how to spend money at all. You’re way TOO FRUGAL and TOO GENEROUS! One of your biggest line items every month is charity! Also, you are paying back your student loans at a ridiculously fast rate considering your income.

So, I wasn’t actually trying to defend every specific choice. Mostly I defended you because the attacks got personal, which leads me to the second complaint from commenters.

Response to Charge #2: People want you to think and feel differently about receiving food support.

You wrote that at first you felt embarrassed about receiving food support. And then you talked about how your outlook has changed, how you want people to understand this process, and how in the future you’d like to give more and take less.

This is just my observation, but I don’t think some people want you to come to terms with receiving support. They would like you to keep feeling embarrassed for as long as it takes to support yourself. They want you to feel a certain way.

This, I thought, was rather unfair. People’s feelings are complex, and as we’ve discussed a lot on this blog, there isn’t a straight line between money and feelings.

I’ve experienced this in reverse as a high income earner in an age of income inequality. A RICH GUY! HOARDING THE AMERICAN DREAM! Based on my income, some would say I should continually feel lucky, grateful, and humble, or else I’m just a greedy materialistic a-hole.

This is just not how people work. We don’t have static emotions based on our income levels. Some days I feel incredibly lucky — I love my job and I’m healthy. Some days I’m irritated about traffic or annoying errands. Other days I’m overjoyed because I’m going on vacation. And this week I’ve been anxious about my kids’ behavior at summer camp.

The fact is, I don’t walk around thinking, “Wow, I’m so grateful to be earning six figures, I guess I shouldn’t worry about my boys starting a fight with other kids at camp.” Life doesn’t work that way.

MAKING SENSE OF KIDS, HAPPINESS, AND THE GOOD LIFE

All of this made me consider my happiness level for the past month. Initially I thought I’d rate it low, like 3.5 smileys out of 5, which is not good for me. The main reason: It’s summer camp season.

My twin boys are high energy. That’s an understatement. They make other high energy kids seem mild mannered. As twins, they don’t take many breaks because they always have a willing partner to egg them on. They run around and talk and yell and laugh and fight and play from 6am to 8pm every single day. Their favorite game, besides Uno, is to be chased. That’s the game — we chase them. There’s my cardio regimen right there.

Continue reading “Monthly Happiness Report: Rich Makes Sense Of Internet Commentary, His Cousin’s Controversy, And The Good Life –July 2017”

Monthly Happiness Report: Penny Doesn’t Amuse Herself To Death in July 2017

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Dear Rich,

Hello, again! I’m back online for today, and I have to tell you, I haven’t missed being online one bit. Granted, it’s only been 8 days, but not engaging with technology for those 8 days (aside from some essential and semi-essential text messages) has opened up spaces in my mind I never knew existed. It feels so freeing.

Catching back up online for the day has been a bit of a pain. I had 60 emails to sort through. In what would have taken minutes spread out over several days, has taken a chunk of time today.

Throughout the week, I had been keeping a list of things that I would need to check online when I got back to it (Sleep Styler tips, driving directions to various places, GoodReads, etc) and that took some time too, but overall I liked doing that better than checking the internet and using the computer everyday.

It created computer use with intention, rather than just random usage.

However, this week of limited technology did end up costing me $1.80. See, I usually get updates about when my library books are coming due through email. Since I didn’t check email, I didn’t realize that I had a library book that was overdue. It accrued fines, 30 cents a day, for 6 days. Oh, well, I guess that was the price I had to pay for this.

Click image to view book on Amazon

During the week I read this book called Amusing Ourselves to Death by Neil Postman, which was basically about numbing ourselves through TV. It was written 30 years ago, but couldn’t be more relevant today. I loved it.

So, all of that being said, my happiness rating for this month is:

Continue reading “Monthly Happiness Report: Penny Doesn’t Amuse Herself To Death in July 2017”

The Best Of Penny And Rich So Far — 6 Months Of Conversations Across The Income Divide

Dear Cousin Penny,

We’ve been at this blog for around 6 months, so I thought it’d be a good time to go over some highlights. This article will contain numerous links to some of our best posts. Of course, a complete list can be found via the Posts tab.

For any new readers, I’ll quickly reiterate our premise. We’re cousins from a small Midwestern town. One summer, around age 10 or so, I think we played together every day for 80 straight days. Good times.

Our adult lives diverged but we kept in touch, often writing long emails to each other about life and happiness and money — which is essentially the genesis of this blog.

You got married young, you have 4 kids, and your husband went from teacher to chiropractor. Along the way you gathered a boat load of debt, but you have no regrets. Low income doesn’t seem to bug you.

As for me, I went from the farm to theology school to French language study in Paris. Much to my own surprise, I landed a high income career, married a woman with similar career goals, and had twin boys. High income agrees with me. Why wouldn’t it?

Our full origin stories can be found here:

RICH’S GOALS

Click on image to see the details of Rich’s plan.

What’s a personal finance blog without goals? My goal is to reach a $1 Million net worth sometime during my 45th year of life. And after that I want to build a generational family legacy (um, in 3 easy steps!).

I admit, since starting this blog, the goal has become less important than the journey, the process … life. As I’ve thought about my philosophy of life, it’s become clear that it’s really not about the money. It’s about relationships, growth, and freedom — these are the keys to happiness, incidentally.

I have also become keenly aware of how lucky I am. I don’t want to be a selfish materialistic hedonist; I want to be a generous squirrel. I never thought I’d write a parable about squirrels, but this is modern blogging. Animals can talk.

So, I hope I can meet my goal the right way. Since we started the blog, I’ve been able to keep pace.

Click on image to enlarge. My actual pace is the blue line, the pace I need is the red line.

So far so good!

But, again, I’m much more concerned about happiness than money.

PENNY’S GOALS

Click on image to see the details of Penny’s goal.

Now to your goals, Penny. You have enough student loan debt ($173,000 at the start of the blog) to make Dave Ramsey drop a dadgum mess in his britches. You’d love to pay it off, and you’re making good progress. I’m not sure how much you have left right now, but I think you’ve already lopped off $20k of debt in a few short months.

I’m continually amazed at how frugal you are when I read your monthly money checks.

But, like me, you know money is not the key to happiness. You spend very little because you just don’t value things that need to be bought. Even with low income, you feel the need to give more than the need to get out of debt faster. In addition to giving, you’ve learned the art of receiving.

THE IMPORTANCE OF HAVING CONVERSATIONS ACROSS THE DIVIDE OF INCOME INEQUALITY

Penny, sometimes I think we agree on a whole bunch of topics and sometimes I think we couldn’t be more different. But what I really appreciate is that no matter the topic, we can have an honest conversation, even if there are points of disagreement.

Continue reading “The Best Of Penny And Rich So Far — 6 Months Of Conversations Across The Income Divide”