I am always hundreds of posts behind. I will never catch up.
Like you, I am always hearing, reading and learning interesting things and I cannot wait until I can share them and my own thoughts and reflections on them.
Of course, it is with the hope that my readers may learn something or at least stop and contemplate their own thoughts on things and perhaps even change the way they (you) look at things.
If you show different people the same set of circumstances or facts, one person may look at it as an insurmountable problem with no hope in sight. Another person may accept the circumstances as fate and the way things are. Like one of my favorite sayings goes, "it is what it is."
A third person may view the same set of challenges as an opportunity. It is that kind of thinking that I am trying to adopt and, let me tell you, changing the way that you look and think about things in your late forties is no easy task. Not so hard if you are a twenty-seven-year-old. Not so easy when you are forty-seven.
That being written, last month I did an amazing thing which was reconnecting with two of my oldest and closest friends. It was a combination of fate as well as me reaching out a bit, which is very unlike me. It is one thing to read or write a post about reaching out to an old friend who you have not seen in quite a while, it is a very different thing to actually do it.
One of my many New Year resolutions was to go to the beach three times.
I know. Even writing it feels kind of dumb.
I realize that there are many people out there who accomplish that by January 3rd, but those folks may live in warm climates or at least close to a beach if in a colder climate like the one where my family lives.
We live about an hour west of Lake Michigan, but sometimes it might as well be ten hours away. We have gone entire years without going to the beach and went perhaps only once per year the past two years.
This year, my daughter posed the question of whether I would take her on the Fourth of July. Not really wanting to, I did anyway and texted one of my oldest and closest buddies who is one of those people that I mentioned in the colder climate. He lives about four blocks west of Lake Michigan in a nice house that he only pays the property taxes on, even though those taxes are fairly steep, about a thousand per month. But his house is valued at around $600,000 and his mother gave it to him for, as my son would explain, "reasons."
My buddy is no famous or degreed economist. He has a computer science degree and has a great job working for the insurance behemoth in the IT department. He works from home a few days per week, gets a ton of time off and then a nice bonus around Christmastime.
If you happen across this post and are still in your formative years, if you want to have a job that is not highly engaging with others, but highly engaging with computers and where you can make a lot of money and always be in demand, major in computer science, my friend.
My buddy joined us at the beach, where I happened to be at the time with my daughter, my sister and her two daughters. I returned to the beach on Friday the Thirteenth, a day that I had the great honor of feeling abundance, but this is about our first trip of the summer. We are going again this Saturday, and we go to Lee Street Beach in Evanston if you want to try spotting us. My buddy's house is four blocks west of that beach.
Having not spoken for all of 2018 up to the Fourth of July, we had a fairly lively and detailed discussion. Besides being one of my truly close friends, and I only have two if you do not count my wife and siblings, I learn a lot from him and try to impart some of my Money Mensch wisdom to him, too, although I would never admit to blogging to him.
Three things that we discussed were particularly interesting to me and they may hold some interest to you, too.
The First Thing I Told Him
My buddy and his wife have one child, a son going into eighth grade.
Even though my buddy was a marginal student, at best, he is one of those fathers who thinks that his own child should be a straight-A student and should attend Northwestern, Harvard, Stanford or some top ten college. My friend's father attended the University of Chicago law school before becoming a wealthy asshole lawyer/banker/investor. My buddy started at DePaul and then transferred to the UW, where I went, by my urging. He returned to DePaul for comp sci after getting a useless BA in poli sci.
Having a son getting ready to start his third year in college, and having visited eight other colleges that he does not attend including Northwestern, UW-Madison, Indiana University Bloomington,, DePaul and having researched several others that we investigated but did not visit, I gained a pretty good understanding of what various colleges cost.
In the interest of full yet anonymous disclosure, the college where my son goes would cost us about $49,000 this coming year for room and board, but he has a Presidential scholarship which reduces the amount that we pay by $22,000. Thus, this mensch will be shelling out about $2,700 per month by the fifteenth of the next ten months.
When I told my buddy this, he asked how we pay it. A good and honest question if ever I heard one.
I told him that we transfer the amount from our bank account to the college through a payment portal for parents.
A simple enough answer. He rephrased the question, asking how much we pay and how much our son pays.
"I pay the whole thing," I replied.
He asked me how much of it I borrow.
"None."
I did not add that we still have sixty grand in his college accounts, which should leave some limited funds for graduate school once he completes his undergrad, although we anticipate several extra thousands of dollars in expenses this year for, as my son says, reasons.
He looked a bit flummoxed, so I reminded him that I automatically contributed to both of our children's college accounts on the first of every month for many years. That's why I drive a shit car, have a shit phone, and may be the last tube TV owner in my town.
After looking flummoxed, he looked forlorn.
Mind you, I first cracked the hundred grand salary mark four years ago and happened to mention it to my buddy when we were both three or four cold ones in at Buffalo Wild Wings, where we used to meet regularly to chow down on wings, watch games on TV and drink overpriced beers.
At the time, he said that he was just under that amount but that with a twenty thousand dollar bonus in December, he would be at about one-ten. I can only assume that his income has continued to rise, as mine has.
His wife also works full-time as a registered nurse and part-time as a licensed massage therapist. Both of us being huge Seinfeld fans, I always ask him if he folds out a massage table every time he is stressed out or sore.
I report on that to convey that they have a combined income approaching two hundred grand, only one kid, and live in a lovely home that they only pay a thousand dollars a month for, besides utilities and other regular upkeep, thus it seems to me as if they have far more to invest than Yours Truly does.
I had mentioned to him many times over the years that I invested in my kids' college accounts and each time he mumbled something about needing to do the same thing.
At the beach on the Fourth, I told him that I saved over a hundred grand for each of my kids' college accounts, which really blew him away. I did not mean to make him feel like an ass, but I did anyway.
So what I told him was this, and I will tell you the same thing if you have not saved enough or anything at all for your future college students.
I asked him what grade his son is going into this August, and he replied eighth grade.
There's some good news. He is not in high school yet. The bad news is that he should have started socking away money years ago, but he did not and, no matter how much you want to, I do not know anybody who could go back in time to do something differently. I have wished that I could many times, but I have not been able to.
I told him some simple math and even though he is one of my oldest friends, older than me, makes more money than I do and is far more tech-savvy than I could ever hope to be, I told him fairly emphatically.
I told him to send five hundred bucks per month to a Illinois Bright Start savings account, like I have, but it could be any 529 account. I told him to send five hundred per month, which equals six grand per year, for the next five years.
Really, he should send twice that amount, but you just don't tell a friend to start saving a grand every single month after he has never done it for forty-eight years.
I told him that six grand per year for the next five would come out to a cool thirty grand, which should be enough to cover at least the first year. If you just use a bit of it to make your payments, like $1,500 out of a total $3,000 payment, you can make it last for nearly two years.
I report here that, to me, saving thirty grand for your kid's college account is not a lot. If you only make fifty grand per year total and use all of it to cover expenses, that is a hell of a lot. But if you and your spouse make four times that amount and routinely spend ten grand on vacations, do all your shopping at Whole Foods, dine out at nice restaurants three or four times per week and constantly buy all the latest iPhones, smart TVs, etc., you really should save more.
After not talking to him all year, it was and remains not my place to chastise my friend or put him on a savings plan, but the first thing that I told him was to save thirty grand over the next five years for his son's college education. After all, when the FAFSA and whatever school he attends looks at their assets and income, it will be assumed that they can pay big money. And they will.
The Second Thing I Told Him
For quite a few years, perhaps ten, my buddy and I would meet at Buffalo Wild Wings in a town midway where he lives, Evanston, and the suburban wasteland where I live about once every other month or so. Not a lot, but six to eight times per year.
Besides just chatting about people we knew from high school, I ended up complaining about my job about half the time. If we met for two hours, I would spend an hour complaining about it. The idiot politicians, the annoying residents, my co-workers, the commissioners and whoever else I happened to be dealing with at the time. I have had a highly stressful job for a long time.
He is a good listener, definitely better than me, but I have a more engaging personality. I used to tell him that I would not be able to stand just sitting in front of a computer all day without interacting with others very much. Now I totally envy his job and tell him so. I would rather not talk to another soul all day if I could help it now, but I spend the majority of my days doing just that.
I did not even tell him that I have a bull-headed Millennial boss for the past year now, a guy who knows little to nothing about economic development, and was just brought on as an intern nine years ago, or eight short years before becoming my boss.
I did not tell him that I am taking some heat for a few development projects that have failed to get off the ground including a hotel deal that I spent months putting together.
I did not tell him that an apartment project for our community's downtown has fallen apart due to a soil report and rising steel and lumber prices. And not enough units and not a deep enough high-end rental market.
I did not tell him that a grocery store that had been pursuing an empty grocery store space in our downtown has passed on coming to town. And that both a bowling alley and movie theater recently took a pass.
And that I have many reports to produce to the Commission that I staff and the Village Board that makes the rules and simultaneously is doing their utmost to screw the employees on our health insurance.
Or that my boss cannot see the woods through the trees, choosing to focus on small restaurant deals while we lose big fish and big projects on undeveloped land sites.
No, I told him that I could complain about my job all day if he wants, but I would rather not and that I remain gainfully employed, my job remains stressful, and I will continue paying my family's bills.
I told him that, technically, I could pull the IMRF plug in about seven more years, and he replied that is something worth looking forward to.
I agree. However, I want to get as much enjoyment as I possibly can and not just continually look forward to my post-IMRF life.
Incidentally, I do not say that I am going to "retire" in seven years when I hit the double nickel age. I say post-IMRF meaning that I may no longer continue being an employee of a municipal government in Illinois. I may become a consultant, a full-time blogger/author/podcaster, a personal shopper, a tour guide, an Uber driver, an owner of self-driving cars, a professional house sitter or even my dream job, a male escort only for women, of course. I do not think that my wife would like that very much.
Almost anything sounds better than being an Illinois municipal government employee, but the pay is decent and the pension is even better*.
The Third Thing I Told Him
For quite a few years after moving into the home where I am writing this, I lamented moving way the f*ck out to suburbia and told my buddy of the closer-in communities that I had wanted to move to but could not afford.
I told him how I still wanted to move to this one particular town, but that the prices kept escalating faster than the prices in the town where we moved.
Houses that were priced at $220,000 in 2001 when we purchased ours were up to $250,000 then $275,000 and then over $300,000 in the community that I coveted. Of course, these were and remain the smaller and older homes. The larger and newer homes cost two or three times that much.
Throughout 2005, 2006 and 2007, my buddy continued insisting that there was a housing bubble. I kept saying perhaps there was, but meanwhile the houses that I wanted were close to $400,000 and I would never be able to move there, even if my own home value was around $260,000 or $270,000 at the time. Our home value increased by about sixty grand while the ones we were outbid on in the better town nearly doubled in five years.
He continued insisting there was a housing bubble.
Just like he insisted on the Fourth of July that there is a student debt bubble and a corporate debt bubble and that the President who both of us detest is stirring up trade wars that, together, will cause another Recession soon.
I told him that I had been reading article after article predicting a Recession about a year from now in fall of 2019, or perhaps in 2020.
I told him that the predictions of a Recession are moving beyond the typical fear mongers who make a living off of predicting one and have been predicting one every year for the past six or seven. I hear some really smart economists for the largest banks in the country on the radio predicting a Recession in the first quarter of 2020, as depicted in the above graphic from a study by Zillow.
Personally, I am thinking hard, but have not acted yet, about cashing out some stock-based funds that I have for myself and my family and parking them in interest-bearing accounts for a while. I have thought of doing so for years but, as you know, the market has continued growing at a healthy pace over the past several years.
Thus, I told my buddy that, should he begin investing as I urged him to, that he should just go for bond funds like what I have my kids' Bright Start accounts invested in.
It is the same thing that I would tell you if you were my friend and had a kid or multiple kids that you planned to send to college, whether it be in five years like my buddy or ten years if your kid is only eight years old or even in sixteen years if you have a two-year-old.
Come to think of it, I did kind of tell you those three things.
You're welcome.
Like you, I am always hearing, reading and learning interesting things and I cannot wait until I can share them and my own thoughts and reflections on them.
Of course, it is with the hope that my readers may learn something or at least stop and contemplate their own thoughts on things and perhaps even change the way they (you) look at things.
If you show different people the same set of circumstances or facts, one person may look at it as an insurmountable problem with no hope in sight. Another person may accept the circumstances as fate and the way things are. Like one of my favorite sayings goes, "it is what it is."
A third person may view the same set of challenges as an opportunity. It is that kind of thinking that I am trying to adopt and, let me tell you, changing the way that you look and think about things in your late forties is no easy task. Not so hard if you are a twenty-seven-year-old. Not so easy when you are forty-seven.
That being written, last month I did an amazing thing which was reconnecting with two of my oldest and closest friends. It was a combination of fate as well as me reaching out a bit, which is very unlike me. It is one thing to read or write a post about reaching out to an old friend who you have not seen in quite a while, it is a very different thing to actually do it.
One of my many New Year resolutions was to go to the beach three times.
I know. Even writing it feels kind of dumb.
I realize that there are many people out there who accomplish that by January 3rd, but those folks may live in warm climates or at least close to a beach if in a colder climate like the one where my family lives.
We live about an hour west of Lake Michigan, but sometimes it might as well be ten hours away. We have gone entire years without going to the beach and went perhaps only once per year the past two years.
This year, my daughter posed the question of whether I would take her on the Fourth of July. Not really wanting to, I did anyway and texted one of my oldest and closest buddies who is one of those people that I mentioned in the colder climate. He lives about four blocks west of Lake Michigan in a nice house that he only pays the property taxes on, even though those taxes are fairly steep, about a thousand per month. But his house is valued at around $600,000 and his mother gave it to him for, as my son would explain, "reasons."
My buddy is no famous or degreed economist. He has a computer science degree and has a great job working for the insurance behemoth in the IT department. He works from home a few days per week, gets a ton of time off and then a nice bonus around Christmastime.
If you happen across this post and are still in your formative years, if you want to have a job that is not highly engaging with others, but highly engaging with computers and where you can make a lot of money and always be in demand, major in computer science, my friend.
 |
| We're heading to the beach again this Saturday. |
Having not spoken for all of 2018 up to the Fourth of July, we had a fairly lively and detailed discussion. Besides being one of my truly close friends, and I only have two if you do not count my wife and siblings, I learn a lot from him and try to impart some of my Money Mensch wisdom to him, too, although I would never admit to blogging to him.
Three things that we discussed were particularly interesting to me and they may hold some interest to you, too.
The First Thing I Told Him
My buddy and his wife have one child, a son going into eighth grade.
Even though my buddy was a marginal student, at best, he is one of those fathers who thinks that his own child should be a straight-A student and should attend Northwestern, Harvard, Stanford or some top ten college. My friend's father attended the University of Chicago law school before becoming a wealthy asshole lawyer/banker/investor. My buddy started at DePaul and then transferred to the UW, where I went, by my urging. He returned to DePaul for comp sci after getting a useless BA in poli sci.
Having a son getting ready to start his third year in college, and having visited eight other colleges that he does not attend including Northwestern, UW-Madison, Indiana University Bloomington,, DePaul and having researched several others that we investigated but did not visit, I gained a pretty good understanding of what various colleges cost.
In the interest of full yet anonymous disclosure, the college where my son goes would cost us about $49,000 this coming year for room and board, but he has a Presidential scholarship which reduces the amount that we pay by $22,000. Thus, this mensch will be shelling out about $2,700 per month by the fifteenth of the next ten months.
 |
| I'll be shelling out $2,700 per month for the next ten months. |
I told him that we transfer the amount from our bank account to the college through a payment portal for parents.
A simple enough answer. He rephrased the question, asking how much we pay and how much our son pays.
"I pay the whole thing," I replied.
He asked me how much of it I borrow.
"None."
I did not add that we still have sixty grand in his college accounts, which should leave some limited funds for graduate school once he completes his undergrad, although we anticipate several extra thousands of dollars in expenses this year for, as my son says, reasons.
He looked a bit flummoxed, so I reminded him that I automatically contributed to both of our children's college accounts on the first of every month for many years. That's why I drive a shit car, have a shit phone, and may be the last tube TV owner in my town.
After looking flummoxed, he looked forlorn.
Mind you, I first cracked the hundred grand salary mark four years ago and happened to mention it to my buddy when we were both three or four cold ones in at Buffalo Wild Wings, where we used to meet regularly to chow down on wings, watch games on TV and drink overpriced beers.
At the time, he said that he was just under that amount but that with a twenty thousand dollar bonus in December, he would be at about one-ten. I can only assume that his income has continued to rise, as mine has.
 |
I report on that to convey that they have a combined income approaching two hundred grand, only one kid, and live in a lovely home that they only pay a thousand dollars a month for, besides utilities and other regular upkeep, thus it seems to me as if they have far more to invest than Yours Truly does.
I had mentioned to him many times over the years that I invested in my kids' college accounts and each time he mumbled something about needing to do the same thing.
At the beach on the Fourth, I told him that I saved over a hundred grand for each of my kids' college accounts, which really blew him away. I did not mean to make him feel like an ass, but I did anyway.
So what I told him was this, and I will tell you the same thing if you have not saved enough or anything at all for your future college students.
I asked him what grade his son is going into this August, and he replied eighth grade.
There's some good news. He is not in high school yet. The bad news is that he should have started socking away money years ago, but he did not and, no matter how much you want to, I do not know anybody who could go back in time to do something differently. I have wished that I could many times, but I have not been able to.
I told him some simple math and even though he is one of my oldest friends, older than me, makes more money than I do and is far more tech-savvy than I could ever hope to be, I told him fairly emphatically.
I told him to send five hundred bucks per month to a Illinois Bright Start savings account, like I have, but it could be any 529 account. I told him to send five hundred per month, which equals six grand per year, for the next five years.
Really, he should send twice that amount, but you just don't tell a friend to start saving a grand every single month after he has never done it for forty-eight years.
I told him that six grand per year for the next five would come out to a cool thirty grand, which should be enough to cover at least the first year. If you just use a bit of it to make your payments, like $1,500 out of a total $3,000 payment, you can make it last for nearly two years.
I report here that, to me, saving thirty grand for your kid's college account is not a lot. If you only make fifty grand per year total and use all of it to cover expenses, that is a hell of a lot. But if you and your spouse make four times that amount and routinely spend ten grand on vacations, do all your shopping at Whole Foods, dine out at nice restaurants three or four times per week and constantly buy all the latest iPhones, smart TVs, etc., you really should save more.
After not talking to him all year, it was and remains not my place to chastise my friend or put him on a savings plan, but the first thing that I told him was to save thirty grand over the next five years for his son's college education. After all, when the FAFSA and whatever school he attends looks at their assets and income, it will be assumed that they can pay big money. And they will.
The Second Thing I Told Him
For quite a few years, perhaps ten, my buddy and I would meet at Buffalo Wild Wings in a town midway where he lives, Evanston, and the suburban wasteland where I live about once every other month or so. Not a lot, but six to eight times per year.
Besides just chatting about people we knew from high school, I ended up complaining about my job about half the time. If we met for two hours, I would spend an hour complaining about it. The idiot politicians, the annoying residents, my co-workers, the commissioners and whoever else I happened to be dealing with at the time. I have had a highly stressful job for a long time.
He is a good listener, definitely better than me, but I have a more engaging personality. I used to tell him that I would not be able to stand just sitting in front of a computer all day without interacting with others very much. Now I totally envy his job and tell him so. I would rather not talk to another soul all day if I could help it now, but I spend the majority of my days doing just that.
I did not even tell him that I have a bull-headed Millennial boss for the past year now, a guy who knows little to nothing about economic development, and was just brought on as an intern nine years ago, or eight short years before becoming my boss.
I did not tell him that I am taking some heat for a few development projects that have failed to get off the ground including a hotel deal that I spent months putting together.
I did not tell him that an apartment project for our community's downtown has fallen apart due to a soil report and rising steel and lumber prices. And not enough units and not a deep enough high-end rental market.
I did not tell him that a grocery store that had been pursuing an empty grocery store space in our downtown has passed on coming to town. And that both a bowling alley and movie theater recently took a pass.
And that I have many reports to produce to the Commission that I staff and the Village Board that makes the rules and simultaneously is doing their utmost to screw the employees on our health insurance.
Or that my boss cannot see the woods through the trees, choosing to focus on small restaurant deals while we lose big fish and big projects on undeveloped land sites.
No, I told him that I could complain about my job all day if he wants, but I would rather not and that I remain gainfully employed, my job remains stressful, and I will continue paying my family's bills.
I told him that, technically, I could pull the IMRF plug in about seven more years, and he replied that is something worth looking forward to.
I agree. However, I want to get as much enjoyment as I possibly can and not just continually look forward to my post-IMRF life.
Incidentally, I do not say that I am going to "retire" in seven years when I hit the double nickel age. I say post-IMRF meaning that I may no longer continue being an employee of a municipal government in Illinois. I may become a consultant, a full-time blogger/author/podcaster, a personal shopper, a tour guide, an Uber driver, an owner of self-driving cars, a professional house sitter or even my dream job, a male escort only for women, of course. I do not think that my wife would like that very much.
Almost anything sounds better than being an Illinois municipal government employee, but the pay is decent and the pension is even better*.
The Third Thing I Told Him
For quite a few years after moving into the home where I am writing this, I lamented moving way the f*ck out to suburbia and told my buddy of the closer-in communities that I had wanted to move to but could not afford.
I told him how I still wanted to move to this one particular town, but that the prices kept escalating faster than the prices in the town where we moved.
Houses that were priced at $220,000 in 2001 when we purchased ours were up to $250,000 then $275,000 and then over $300,000 in the community that I coveted. Of course, these were and remain the smaller and older homes. The larger and newer homes cost two or three times that much.
Throughout 2005, 2006 and 2007, my buddy continued insisting that there was a housing bubble. I kept saying perhaps there was, but meanwhile the houses that I wanted were close to $400,000 and I would never be able to move there, even if my own home value was around $260,000 or $270,000 at the time. Our home value increased by about sixty grand while the ones we were outbid on in the better town nearly doubled in five years.
He continued insisting there was a housing bubble.
Just like he insisted on the Fourth of July that there is a student debt bubble and a corporate debt bubble and that the President who both of us detest is stirring up trade wars that, together, will cause another Recession soon.
I told him that I had been reading article after article predicting a Recession about a year from now in fall of 2019, or perhaps in 2020.
Personally, I am thinking hard, but have not acted yet, about cashing out some stock-based funds that I have for myself and my family and parking them in interest-bearing accounts for a while. I have thought of doing so for years but, as you know, the market has continued growing at a healthy pace over the past several years.
Thus, I told my buddy that, should he begin investing as I urged him to, that he should just go for bond funds like what I have my kids' Bright Start accounts invested in.
It is the same thing that I would tell you if you were my friend and had a kid or multiple kids that you planned to send to college, whether it be in five years like my buddy or ten years if your kid is only eight years old or even in sixteen years if you have a two-year-old.
Come to think of it, I did kind of tell you those three things.
You're welcome.
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