What should I do with my Raise?

I’m sure the title of this post is a question that many people ask themselves whenever they are fortunate enough to get a pay raise. Depending on the size of the raise – I imagine for many the conversation focuses around some combination of the following:

  • Let’s go out to a fancy restaurant to celebrate!
  • Let’s go to the bar to celebrate!
  • Let’s use this new money to go out and buy a new car! Or a new phone, or a new TV, or a new game system, or whatever fun toy is out there!
  • Now that I make more money – let’s go buy a bigger house!

Others may not be as quickly caught up in such proclivities, but rather they keep going about their business – except now maybe they decide to go out a little more at lunch time, get that $5 latte at starbucks, or splurge on some nice new clothes. They let lifestyle inflation sneak in, and soon enough the additional money that is coming in every month – is going out the door just as quickly.

I’m certainly not immune to a little lifestyle inflation, but for me, I’m much more focused on financial freedom, and you can bet I’ll be taking some very deliberate steps to save my new increased salary. In fact – I’ve done this very same activity for at least the last 5 raises I’ve gotten, and probably even before that.

Today is the 15th of the month and with it – I received my first paycheck that reflects my new salary. I did a quick analysis comparing it to my last paycheck (with old salary) and saw that I am now getting $178 more every paycheck (net salary). Multiply this number by 2 paychecks per month and I get to $356 in additional after tax salary.

Now that I know how much extra I’m getting each month – the next step is to simply set up another automatic transfer from my checking account to my savings account (or increase the existing automatic transfer). I’ve decided to do this for $350 a month – leaving a whole $6 a month for lifestyle inflation! Woot woot! What will that get me?

For some, maybe this sounds like I’m denying myself – but I assure you, I’m more than happy with what I’ve got already, and stashing this money away into savings (or investments) will make me happier than any purchase I can think of. The reason? Because as a financial freedom fighter, I know that this regular, automatic savings will build up over time and put me in a better position to walk away from the grind of the 9 to 5. And that at the end is the thing that is most important to me right now. Way more important than buying a new car, or getting some new toys, or whatever else I might do with this money.

 

 

Monthly Net Worth Update – June 2016 – $1,145,594

I’ve gotta say – I was REALLY surprised when I pulled all the number’s together for this month’s net worth update. With all the Brexit turmoil – I really thought that things would be way down. Thanks to the rebound over the last few days of the month though, things are looking good! We had some good gains in our investments, our savings are up a bit, and we’re continuing to push down our debt.


My primary goal is to have the freedom to “retire”, or reach financial independence (FI) at age 40. As of this month, that is now just 22 21 months away!

I’m a big believer in completing monthly net worth updates as a way to stay on top of your financial situation and work towards your goals. Therefore – I share my monthly net worth updates here.


Here’s the latest net worth breakdown.

Total Net Worth this month came in at $1,145,594 – this is $23,362 more than last month. That’s five months in a row now with some pretty significant gains.

June 2016 –

2016.06 Net Worth


Net Worth Notes:

Assets:

Cash – Our cash position remains strong and based on some recent concerns about the market and the overall health of our economy, I intend to keep it that way.  Yes, we  might miss out on some gains, but I like the idea of having some extra cash on hand right now. If the market drops we’ll be looking to deploy some reserves quickly. This month I did move $4k from savings to an investment account, but for now it is just sitting there in cash – waiting…

Taxed Stock Account –  I recently reduced my monthly contribution here from $2k to $1.5K – believing that a little extra cash might be a good move right at this moment. It’s all set up as part of an automatic investment plan where the money is spread across 5 or 6 different index funds. Occasionally I change the mix based on performance of the various ETFs in the portfolio. Specifically, these are ETF Index funds with iShares and some Vanguard. I intend to continue funding this at this level (or more) for as long as possible. Also in this bucket is a small amount invested recently in a LendingClub account. (Read more about my experience with LendingClub so far here)

Retirement Accounts – This consists of my 401k, Trad IRA, Roth IRA, and HSA account, as well as Mrs. Freedom 40’s 403b, and two Roth IRAs. We maxed out the 401k/403b the last three years and will do so again this year. We make too much to directly contribute to a Roth.

Rental Property – This is a 2BD/1BA across the street. We used to live there and rent it out now. Currently, this creates nearly $0 cash flow, but the tenants do pay the mortgage every month so over time, it will presumably (hopefully?) pay off. It can be a headache from time to time, but for now, we keep it. Ref 1. Ref 2. Ref 3.

Home Value – Based on some recent sales of similar “comps” and some research on Trulia. This seems like a fair and possibly conservative estimate. We have no plans of moving in the near future. If we do, there is a strong possibility that this will become a rental property.

Other – This consists of two cars and some gold and silver coins.

Liabilities:

Home Mortgage – This just keeps going down a bit each month as we make our regular automatic payments. We are currently putting an extra $500/month towards principal reduction on this mortgage. We are finally taking some actual action on some refi opportunities here and it looks like our procrastination might have actually worked out this time. More on that soon…

Rental Mortgage –  Pretty much the same deal here as our home mortgage. Keeps going down a bit each month. While we’re not making much (if any) money on the rental now, here we can see we are getting a benefit from our tenants paying our mortgage. We’re also taking steps on this to refi soon.

Other Loans – This includes 2 Student loans Mrs. Freedom 40 has. Both are at 2.125%. It also includes Mrs. Freedom 40’s car loan at 0.9% and my car loan at a whopping 0.0%. We could pay all of these loans completely off  if we wanted too, but the rates are so low, I don’t think it makes any sense to do so. Instead, we’ll let our money do it’s work in the market and earn us more than what we’re paying for these.

Finally, here’s what our Net Worth looks like over the past 12 months. At the half way point of 2016 things are good, and frankly, better than I would have expected at the beginning of the year. I continue to think we’re due for a market downturn soon – but I’ve been thinking that for a couple years now, so clearly – I don’t know anything!

2016.06 - Net Worth Graph

Some other interesting notes about our net worth to share

YTD Gain/Loss = +$110,585

YTD Percentage Gain/Loss = +10.68%

12 Month Gain/Loss = +$152,807

12 Month Percentage Gain/Loss = +15.39%

Stock Diary – VZ

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I recently sold a bunch of shares of Verizon (VZ) stock that I had been holding onto for some time. I thought it might be fun to let people in on my thought process with this particular stock and show how the decision worked out for me.

After selling some other stock in my Roth IRA account, I was looking for a place to invest some money back in 2013.

I bought 200 shares of VZ in early May of 2013 primarily for one reason. It was paying a dividend yield of over 5% and I was looking for a solid long term investment that would pay out regular dividends at a nice rate. Owning an individual stock presents some additional risk for sure, but I figured VZ was a pretty safe bet based on the fact that the company is very large and there’s not much chance of people stopping use of their services any time soon. (As you can see – this was a really hardcore technical analysis!)

Over the course of the next month – the stock dropped by over $4 a share. But, instead of freaking out and selling this “loser” – I held on, and actually doubled down, buying another 200 shares.

From that point out, I just sat and waited. My 400 shares yielded a nice quarterly dividend and these proceeds were automatically used to purchase more shares of VZ through a DRIP program. By the time 3 years had passed by, I owned 452+ shares. Those 52 additional shares were all purchased with dividend payments and amounted to $2,824.64 in proceeds! 

The share value of VZ varied quite a bit over the three years I held it, and rarely got above my top buy price until recently. I happened to be checking in on things and saw that the stock was trading near a five year high.

I was a little torn about what to do, as I’d grown to really love seeing this investment produce such great dividends, but I ended up deciding to sell it, and here’s why.

I’m trying to get away from investing in single stocks and therefore reduce my risk a little. With nearly $25k invested in this one stock, I was putting a sizable portion of money at risk in a single company that could potentially fail or come across hard times and leave me with little or nothing. Diverting this money to an index investment like VTI seemed like the way to go. Also, at a five year high seemed like a really good time to sell this stock and look for opportunities to use the proceeds somewhere where I could potentially find some additional value.

So, that’s what I did. On 6/23/2016 – just over 3 years later – I sold all of my holdings in VZ at $54.32 a share. This netted me $1,841.40 in profit, on top of the $2,824.64 in dividend payments over that time period- for a total profit of $4,666.04.

VZ - History

Interestingly enough – the very next day Brexit happened and I was able to take advantage of some great low prices across a number of index funds with the proceeds from this sale.

Hopefully it all works out in the long run!

 

Brexit Stock Buys

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Wow. After struggling for a few weeks about what to write about, it seems like all of a sudden there are a plethora of topics. Where to begin!

On Thursday the markets were way up and I almost wrote a post about how my investment portfolio was up over $30,000 in one single day! Good thing I didn’t, because with the news of Brexit actually happening, the markets all freaked out on Friday and were waaaaaay down! With roughly a 3.5% pull back for the S&P 500, and losses even doubling that in many international and European weighted funds – pretty much anyone with money in the markets got clobbered. Nearly all my holdings were way down yesterday, but it was especially significant for the IXUS, IEFA, IEMG, and other similar ones. Right now, it looks like I lost over $40,000 in invested funds, and it was likely more.

Am I freaking out though? Absolutely not! Sure, in some ways it sucks, but in other ways it’s nothing more than a lot of noise in the system. It’s not like I’m planning on needing any of my invested money any time soon. I’m not selling my long term index investments for probably quite some time. So why panic?

In fact, I’ve had some cash sitting on the sidelines for some time now and on Thursday I sold a long term position in a  single stock, Verizon (VZ), that I had been holding for a few years. I was a little torn about selling it, but I’m trying to put more of my money to work in broader index funds, rather than individual stocks, so it seemed like it was the right move. This gave me even more cash on hand.

Now, trying to time the market is generally considered to be a bad move, and I’d mostly agree. But, when I see many index funds that I current hold drop by 6, 7, and 8% in a single trading day, it also looks like a great buying opportunity to me! I’m not planning to sell anything I purchased for a long long time, so in some ways this may just be feeding into my emotional desires to “get a good deal”. At any rate, for those financial voyeurs out there, here’s exactly what I bought yesterday afternoon about an hour before the closing bell.

110 VTI (down 3.65% on the day) – Vanguard Total Stock Market Index Fund – (also known as VTSAX) This is like buying the whole U.S. stock market and is a favorite of many financial bloggers out there like JL Collins (congrats on the new book!), the Mad Fientist, and many, many more!

75 VWO (down 5.66% on day) – Vanguard FTSE Emerging Markets – As the title suggests, a fund that consists of a collection of companies in emerging markets.

100 IEFA (down 8.62% on the day) – iShares Core MSCI EAFE ETF – A fund that consists of a collection of international stocks in developed markets in Europe, Australia, Asia, and the Far East.

100 IXUS (down 7.34% on day) – iShares Total International Stock ETF – A fund that tracks a broad range of companies outside the U.S. in both international and emerging markets.

 

So there it is. Some pretty significant buys all in one day. Who knows what will happen in the short term, but I think in the long run I’ll be happy with all of these – and they’ll all be good contributors to my overall investment portfolio.

What do you think – good buys? Stupid to even attempt to time the market in the manner? Does it really matter if I’m not selling these things for many years? How are you all dealing with this recent market volatility?

 

Feeling Closer to Pulling the FIRE Cord

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The last couple of weeks at work have been a bit difficult. I work for a consulting firm, and we recently learned that we lost a large piece of work during a re-compete process. This type of thing happens in my business, and fortunately I work for a large company that won’t be laying anyone off – rather we’ll look to redeploy people onto other projects elsewhere. Still – it’s never fun to lose.

This one is tough too because we had really built up a good team over the past few years and the work we were supporting was really interesting. On top of that, the client was good to work with, and the commute was reasonable. This convergence of so many positive factors rarely occurs!

Before we found out the outcome – I had mixed feelings about whether or not I really wanted to win or if I’d be OK if we lost. I think I rationalized that I’d be OK with either scenario, but I recognized a win would put me on a path of a lot more work. I thought that might be OK because it would hopefully be interesting and somehow reinvigorate me and my interest in what I do. If we lost on the other hand, I saw that it might be a good opportunity to plunge myself forward into something very new, potentially at my current work by taking on a different role, or potentially elsewhere by making a move to another line of work. A third and final option would be to pull the cord on FIRE.

Now that we have the news in hand, I’m a little surprised that I feel more disappointed about it than I thought I would. That said, I’m not as upset about it as many others I work with, and this is probably in large part due to the fact that I know I have the freedom to make some pretty big changes in my life and still be financially OK.

I’m not really looking to climb the corporate ladder any further, so this loss doesn’t affect me much there. Meanwhile for others that I work with, this will likely mean waiting years longer for that next promotion. I also feel that I’m in a position to go to my current leadership and ask for a completely new opportunity. Why not? What’s the worst that can happen? If they don’t support me in making a change within the company, I’ll leave. If I leave, I’m confident I can find a very good job in my field. This is a great luxury that I know many others don’t have. If it does end up taking more time than I think it will to find a new job, that’s OK too – it’s not like I’m living from paycheck to paycheck. I’ve got lots saved up in my “rainy day fund” to get me through several months if not years.

And that very knowledge there is what has me flirting with the idea of just taking the leap and trying this FI thing on for size right now! It’s quite a bit earlier than I had originally planned, but it’s not unreasonable to think I can’t do it right now. If I get bored, I can always go find a job. Heck – I’m pretty sure my current employer would have little problem hiring me back as long as I don’t burn any bridges on the way out the door. I’ve proven myself over many years and thus I’m a known quantity to them. Most other new hire candidates are big risks.

So, we’ll see how things play out. I have a number of reasons to stay for at least a few months (annual bonus and some other perks coming due), but once I get those goodies in my hand, I may really need to think long and hard about just quitting and seeing what else might be out there for me!

 

My frugality pains me sometimes!

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I’m sitting here making some vacation plans this evening and starring at flight costs for waaaaay to long!

The price just seems too high to me. $500 per person! That’s $1000 bucks for us both to fly out of here for a week! Yikes! Now I’m starting to think I’ll just drive instead. Of course, that would cost something in gas and tolls, and wear and tear on the car, and most importantly, it would cost me a lot of time. About 16 to 18 hours of my time to be specific!

How much is my time worth then? ~$30 an hour? Yes, I think it is definitely worth that. But still – I sit here and it absolutely pains me to pull the trigger on these tickets!

What the heck is wrong with me?!?! I am literally a millionaire. I am objectively among some of the most fortunate people in our country, and yet I feel like I shouldn’t be spending this money! Of course, I guess that’s a lot of what we learn in books like The Millionaire Next Door right? Those who think hard about purchases like these, and who don’t act frivolously, they are the ones who are the millionaires. Not the d-bags driving around in their M-class BMWs.

Well – after starring at the screen for a while, and a bit of yelling from my wife to “just do it already!!!” – I have finally pulled the trigger. Tickets are purchased and we’re ready to go. Next month – we’ll be flying to the bucolic bliss of the country and enjoying some time with family and friends and celebrating a wedding. Should be fun!

Does anyone else have this problem or is it just me?

 

How I make over $2k a Month doing almost nothing

I love the beginning of the month because it’s when I get paid!

To start with I get my paycheck from my “normal” job (I get another on the 15th too). This is nice, but not as satisfying as the other payments I get. The ones I get from doing practically nothing.

In addition to the paycheck from my employer, I also get a check in the mail at the beginning of each month for $1750. This one is somehow much more satisfying. Primarily because during most months I do almost nothing to earn this money. This of course is a rent check from my renters across the street. They pay regularly and rarely present me with any problems. Therefore – it feels like free money!

Now – it is not quite as glamorous as that – I do have to pay the mortgage and the condo fees, but most months I end up making a small amount that goes in my pocket. Not all months are like that. Sometimes there are problems that need to be addressed. Sometimes these problems are just irksome. Other times they are both irksome AND expensive! I’ve written about these problems in the past, and they’ve even led me to seriously think about giving up my rental – but I’m on a winning streak for the moment and I’ve had several months of paychecks coming in and zero requirements of me other than cashing those checks!

In addition to the $1750, I also see another paycheck for $210 come in every month like clockwork. This one is even better because it truly requires almost no work. A friend recently decided to rent his condo because he was moving out of town. He knew I had some experience doing this, so he asked me if I would help. I agreed and helped to write up a lease, put up an ad, screen some tenants, and then execute the lease. For all of this he agreed to pay me one month’s rent – or $210 a month. I might have put 5 or 6 hours of work into this over one weekend last fall. Since then, I’ve done literally nothing other than watch these checks roll in. Awesome.

Finally – every month I collect income from dividends. Some months are better than others since dividends often pay out on a quarterly basis, but I do have some investments in municipal bonds that pay regular monthly dividends. These are currently paying me a nice $65 a month in tax free income. Sweet!

So there it is. $1750 from the rental, plus $210 for the property management, plus $65 from the municipal bonds – and and I’m making over $2000 a month for doing almost nothing.

It feels good. Definitely a lot less work making this $2k than what it takes to earn $2k at work! And so, now I just need to keep working on more ways to get this number even higher!

 

Things to do in Retirement

There’s a ton of things I’d like to be doing on a regular basis that I don’t seem to have the time, energy, or devotion for right now. Granted, we all have the same number of hours to work with, so if I’m not getting something done now, it is ultimately by choice – but the reality is also that as long as I’m working 10+ hour days – there are going to be things that I’d like to do, that just don’t happen. If I were to quit tomorrow and retire (to live a financial independent lifestyle) – these are some things I think I’d look to do with my time.

  • Sleep more (7 to 8 hrs / night)
  • Workout and excercise – get back into some moderate weight lifting and maybe even try something like crossfit
  • Eat a hot, healthy breakfast daily
  • Read the paper every morning with my breakfast
  • Read more books
  • Blog more
  • Write more
  • Try out new and interesting projects online – try to get some online revenue going – or build a product to sell
  • Volunteer to teach personal finance to young students in the area
  • Take a photography class / go around town and experiment with photography
  • Learn to play the guitar
  • Play video games
  • Visit my parents more
  • Travel!
  • Cook more meals “from scratch” / try to build my cooking skills
  • Get more involved with my community in some way
  • Spend more time with friends
  • Get to know my neighbors better – especially the ones who are retired or stay at home during the day (friends to hang out with while my other friends are at work!)
  • Go to more happy hours
  • Have lunch (or breakfast or dinner) with friends or work colleagues
  • Go hiking!
  • Enjoy the outdoors!
  • Help my friend “Brew Guy”at his brewery and learn about beer brewing and the beer industry
  • Bike more
  • Get back into skiing in a serious way (would require move to the mountain)
  • Sit back and relax more
  • Yoga / Meditate
  • Pursue freelance work / part time work / or independent consulting work?

There are probably a lot more items I could add to this list, and as with most things, I’m sure the list would/will evolve and change over time.

One thing I quickly notice after putting all this down though – is that most of these items have a very small cost or even no cost at all. The most expensive things up there is the travel (potentially big cost – but not necessarily if done mindfully), a potential gym membership (if I decided to not workout at home), and lunches and happy hours out on the town. Everything else is more or less free.

It’s interesting to note this when thinking about early retirement and worrying about questions like “will I have enough  money?” If these are truly the things I would end up doing with my time, then  all I need to do is make sure my big fixed costs are covered (mortgage, taxes, electric, etc), add a little more on top of that, and I’m good!

Not only are these things low in cost, they are also high in value. I think some combination of these things would lead to more happiness, more fulfillment, and even a better understanding of the world around me.

What do you think? What would you do with your time?

 

Monthly Net Worth Update – May 2016 – $1,122,232

Our balanced attack of saving, investing, and destroying debt continues to pay off!

We saw some decent gains this month, with lackluster investment performance, but some continued saving and debt reduction helped things along. Thanks to the continued efforts of  “team debt destruction” we reduced our debt by over $2,000 this month, which is pretty solid, but nothing compared to the $10k we managed last month – but hey, that was an anomaly! Our assets are up over $9k this month, mostly driven by regular 401k contributions, and automatic savings contributions.

We had a couple of big expenses hit this month too. First was $1023 for a new tank-less hot water heater and supplies to install it. We actually did this back at the end of March, but it just caught up to us in the credit card bill. In addition, Mrs. Freedom 40 continues to work towards the prize of “best big sister ever”, by giving her brother a cool $1,000 in cash as a graduation gift!!! He just finished his undergrad a couple weeks ago and was pretty surprised when he saw how much we gave him. He’s a pretty squared away kid, and he worked hard, so we were happy to be able to give him something that will help with his future educational pursuits. Hopefully he’ll heed some of my advice for recent grads and he won’t just spend it on pizza and beer!


My primary goal is to have the freedom to “retire”, or reach financial independence (FI) at age 40. As of this month, that is now just 23 22 months away!

I’m a big believer in completing monthly net worth updates as a way to stay on top of your financial situation and work towards your goals. Therefore – I share my monthly net worth updates here.


Here’s the latest net worth breakdown.

Total Net Worth this month came in at $1,122,232 – this is $12,177 more than last month. That’s four months in a row now with some pretty significant gains.

May 2016 –

2016.05 Net Worth


Net Worth Notes:

Assets:

Cash – Our cash position remains strong and based on some recent concerns about the market and the overall health of our economy, I intend to keep it that way.  Yes, we  might miss out on some gains, but I like the idea of having some extra cash on hand right now. If the market drops we’ll be looking to deploy some reserves quickly.

Taxed Stock Account – Last month I reduced my monthly contribution here from $2k to $1.5K – believing that a little extra cash might be a good move right at this moment. It’s all set up as part of an automatic investment plan where the money is spread across 5 or 6 different index funds. Occasionally I change the mix based on performance of the various ETFs in the portfolio. Specifically, these are ETF Index funds with iShares and some Vanguard. I intend to continue funding this at this level (or more) for as long as possible. Also in this bucket is a small amount invested recently in a LendingClub account. (Read more about my experience with LendingClub so far here and some recent thought about their recent bad news here)

Retirement Accounts – This consists of my 401k, Trad IRA, Roth IRA, and HSA account, as well as Mrs. Freedom 40’s 403b, and two Roth IRAs. We maxed out the 401k/403b the last three years and will do so again this year. We make too much to directly contribute to a Roth.

Rental Property – This is a 2BD/1BA across the street. We used to live there and rent it out now. Currently, this creates nearly $0 cash flow, but the tenants do pay the mortgage every month so over time, it will presumably (hopefully?) pay off. It can be a headache from time to time, but for now, we keep it. Ref 1. Ref 2. Ref 3.

Home Value – Based on some recent sales of similar “comps” and some research on Trulia. This seems like a fair and possibly conservative estimate. We have no plans of moving in the near future. If we do, there is a strong possibility that this will become a rental property.

Other – This consists of two cars and some gold and silver coins.

Liabilities:

Home Mortgage – This just keeps going down a bit each month as we make our regular automatic payments. I used to put a fairly substantial amount of money towards additional principal payments, but I now believe it is better to invest this money as I should be able to get a better return than the 4.375% on the mortgage and I can have access to the money if needed. Based on Mrs. Freedom 40’s desire to pay down our debt more quickly, we are now putting an extra $500/month towards principal reduction on this mortgage. We are still considering and looking into some refi opportunities, but honestly, I keep procrastinating because I’m not looking forward to all the paperwork….

Rental Mortgage –  Pretty much the same deal here as our home mortgage. Keeps going down a bit each month. While we’re not making much (if any) money on the rental now, here we can see we are getting a benefit from our tenants paying our mortgage. This one is at 4.5%. Still considering and looking into some refi opportunities here too….

Other Loans – This includes 2 Student loans Mrs. Freedom 40 has. Both are at 1.875%. It also includes Mrs. Freedom 40’s car loan at 0.9% and my car loan at a whopping 0.0%.   We could pay all of these loans completely off  if we wanted too, but the rates are so low, I don’t think it makes any sense to do so. Instead, we’ll let our money do it’s work in the market and earn us more than what we’re paying for these.

Finally, here’s what our Net Worth looks like over the past 12 months. So far things have been very solid in 2016!

2016.05 - Net Worth Graph

Some other interesting notes about our net worth to share

YTD Gain/Loss = +$87,223

YTD Percentage Gain/Loss = +8.43%

12 Month Gain/Loss = +$117,917

12 Month Percentage Gain/Loss = +11.74%

24 Month Gain/Loss = +$288,685

24 Month Percentage Gain/Loss = +34.63%

Some Recommendations for New Grads

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We traveled to upstate New York this weekend to attend my brother-in-law’s graduation. He’s a great kid, and also 17 years younger than me! That means his whole world view is considerably different than mine – or perhaps I should say that my whole worldview is considerably different than his. I’m not saying that we butt heads or anything like that, quite the contrary, there’s just some big differences in years of experience and such…

The commencement ceremony was nice, but amazingly similar to any other graduation ceremony I’ve ever been to. Regardless of high school, or college, or whatever, these things suffer from any originality. I suppose to some degree tradition prevents this, but there is also the reality that writing a commencement address might be one of the more difficult pieces anyone ever puts together.

Writing a commencement address that doesn’t sound eerily like thousands of others is a real challenge. The ones I heard this last weekend talked about leaving good friends behind, striking off into the unknown, uncertainty of the future, having the courage to follow your passions, and giving back to those who are less fortune. These are all fine messages, but they are also little more than overused platitudes.

Could I do any better if I was asked to make some remarks? Well – in High School I did in fact provide one of the speeches to my fellow classmates. While I felt pretty strongly about it at the time, I assure you it suffered from the same commonplace clichés that malign many such speeches.

A while back, Steve over at thinksaveretire.com issued a challenge to fellow bloggers to write their own. I took a stab at this and have the following draft below to share. It could still use a little more polish – but as of now – here’s what mine might look like:


Graduating class of 2016, congratulations! After four years of hard work and diligent study, you have reached a significant milestone and will all soon have diplomas in hand. These pieces of paper indicate to the world that you have successfully completed a course of study that will help prepare you for success in this world. However, this piece of paper will certainly not guarantee success and there will be a lot more hard work in store for you if this is what you desire. Whether in terms of your work life, family life, or otherwise – success is not automatic.

Many commencement speakers will tell you to follow your dreams, pursue your passions, give one hundred and ten percent, and always remember those who helped you get where you are today. Those things are all good, and yes. I too would ask that you consider them as laudable endeavors.

However, I’d also like to give you a few tips and pointers that I’ve picked up along the way that I think you might find a bit more specific, and hopefully a bit more actionable. Let’s begin.

Always carry a notebook. Or at least something to take notes with. Most of you in the class of 2016 probably have smartphones. These things are great for taking notes. But so is pen and paper. In fact, they’ve been working out pretty well for humans for the past several hundred years. In a work environment – i’d encourage you to go “old school” with your note taking. That way, nobody will mistakenly think you’re actually just texting your friends.

Show up early. Those who are early show others that they are ready to go, that they are prepared, that they respect your time. Remember the saying “I’d rather be an hour early, than a minute late”.

Dress for the occasion. Wear something nice to weddings, funerals, graduations, and the like. Notice what your boss wears, and dress as nicely as they do. If you’re ever in doubt – go one step up. You’ll only get compliments if you look nicer than the rest of the crowd – conversely, you’ll only get looked down on if you go in the other direction.

Learn about money and how it works. Now that you’re graduating, you’re probably soon going to be out in the world, working a job, and earning some money. Unfortunately, most of you probably know very little about how money works on an individual, personal level. We do a horrendous job in this country teaching people the basics of personal finance. The good news however, is that for the most part, it’s not hard to learn. There are many books and blogs on the topic. Spend some time building your personal finance IQ now and you’ll thank me later. Guaranteed.

Start saving and investing for your retirement now. I know, I know – it’s forever away. But do it anyway. The power of compound interest over time might be one of man’s greatest inventions.

Set your own goals. Up to this point in your life, many of your goals have been set for you, and a road map has been provided. Take these classes, study hard, do well, graduate. Now you’re moving to a point in your life where the goals and road map may not be as clear. This trips up many people and they end up just wandering aimlessly through life. Set annual, monthly, weekly, and daily goals using a proven technique such as SMART goal setting (Google it if you don’t know what it is!).

Speaking of Google. Always remember that you can learn how to do just about anything by using this magical tool! You live in an age where the amount of information available to you is mind boggling. If you don’t know how to do something, Google it, experiment with it, and move forward with new knowledge. Most things are not nearly as hard as you may think – and chances are someone has done it before and posted the knowledge for the rest of the world!

Learn one new thing every day. I don’t care what it is. Maybe you want to know how to change a tire. Maybe you’re curious about George Washington. Maybe you want to  learn more about investing for your retirement in a 401k because some crazy graduation commencement speaker put the idea to do that into your head. Whatever it is – just keep learning. That Google machine is great for this too by the way.

Set up systems to help you succeed. Set up systems for managing your email, for achieving your goals, for eating right, for staying fit, and for every other part of your life! Being good in these things is not hard once you apply a simple system that works for you. Refine the system over time. Become an expert at setting up systems that work for you and you’ll see huge benefits over the 95% of people who approach the world haphazardly. 

Be the one to initiate things. Don’t wait around for others to ask you to join them or to plan fun things for you. If you want to do something do it. Be the instigator – the one who makes fun things happen and whom others follow.

Take your vacation. You will have earned it. Everyone thinks they are so important. Almost always – they are not. The business will keep going on without you. While on vacation, remain unplugged, rest, relax, and recharge. 

Keep your head up, and look for what’s next. Always be looking for the next opportunity to grow, to learn, and to experience something new. Don’t let yourself get into a rut. Recognize when you are and if you can’t get yourself out alone, ask someone to help give you a push.

Keep in touch with your family and friends. Make a point of calling your parents and friend regularly. Visit them too. Facebook is not a substitute for staying in touch with the people you really care about.

Don’t overuse social media. People are only posting the best moments of their lives – never the boring or bad. Spending too much time here will just make you feel bad. Just about everything in moderation is OK, but try to get down to no more than 10 minutes a day.

Limit the TV time. You should all know this – but TV doesn’t engage your mind in a terribly useful way. It is a good distraction and can be relaxing – but limit it to no more than 1 to 2 hours a day. To help, make a rule that you won’t turn it on unless you are going to watch a specific show, and once that show has ended, you’ll turn it off.

Read! Now that you have some extra time – use it to read about something new or immerse yourself in a different world. Nearly all of the really successful people in this world are voracious readers. Want to be successful? Reading a lot of books about a variety of topics certainly won’t hurt.

Travel. Explore new places in the world. Try new things and get outside your comfort zone. ideally – experience new cultures and ways of thinking. If you can – strongly consider living overseas for at least six months.

Learn how to cook one thing really well and that you will be known for. My Mom’s lasagna is well known by everyone in our family. So are my Dad’s baked beans. For me, it’s my chili and my holiday tenderloin. It’s not hard to learn how to make one thing really well and there’s nothing like the happiness you can bring to people by feeding them.

Enjoy good drinks, good food, and good sex. But don’t enjoy any of them too much. Otherwise you’ll be too jittery, too drunk, too fat, or just too tired to do anything else.

Limit your news and media intake. Most of the content in the mainstream news media is little more than crass entertainment. Much of it is based on promoting fear and facilitating a consumer culture focused on spending beyond reason. You can continue to be an informed citizen by reading a reputable newspaper or website a few times a week.

Know how to change a tire and unclog a toilet. In life, occasionally shit will go south for you or for others. Know how to fix it.

Know your neighbors. Make a point of meeting your neighbors and knowing something about them. Even if they are very different than you – having good relationships with your neighbors will make you happier, safer, and can be really helpful when you realize you don’t have a plunger.

Oblige old men by listening to them as they confer their wisdom. Like those who are younger, and maybe like you yourself, they often think they have it all figured out.

Finally – Don’t forget to carry that notebook. You never know when someone’s going to say one or two things you might want to write down.