When Your Career Ladder Looks Like a Jungle Gym

My resume was a great conversation starter at an MBA recruiting event I went to this weekend. My takeaways were that I can likely get into at least one of my top choice schools if I manage to get a really, really high score on the GMATs (as in, over 700.) Most schools seem to like that I'm not the typical MBA candidate, which is a good thing.

But this post isn't about my quest to get an MBA, or it isn't directly about this quest. Instead, it's about moving up, down, and diagonal on the career "ladder."

My current job is a huge leap up from any positions I had before in both responsibility, salary, and company respect. But it's a six month contract which is ending soon, and likely won't be renewed (more to do with the state the company is in than my work here, my boss wants to keep me on.) So I'm in a pickle. Where do I go from here?

The biggest problem is defining my career goals and understanding how my next steps will get me there. Incredibly, with the large-name company on my resume I'm getting calls back on my applications from other respectable companies. That's not to say I'll get past the first interview, but the phone is at least ringing.

It isn't clear where I'm supposed to step to go up in my career. Most of the jobs I really want require an MBA or a lot of luck. Then there are all these very good jobs that are all so very different and can lead me in very, very different directions. Do I want to do customer support? B2B or B2c? General marketing? Social media marketing? How do these answers change when each option has a specific company attached to it? How do they change when each company has a salary attached to it?

Honestly, I'd be happiest doing online customer support. Because I love helping people and solving problems. That role is at an excellent company, but I bet my pay would be cut in half. Or maybe I could negotiate a little more, but I can't imagine they'd pay a customer support person the same amount I'd make as a marketing manager or even marketing assistant. I'd be happier in the short-term, and there's a chance getting a foot in the door at this company can lead to bigger and better things, but is it really a step up in my career? Should I care?

When it comes down to it, I need to look at what I'm good at and what makes me happy. I know I get the most reward out of helping people, solving problems, etc. Those types of jobs don't pay as well as selling to people. Ideally I'd find a role where I can solve problems and help people while developing and marketing products. That may require an MBA. Right now I can possibly get hired as a social media manager, but that career path is limiting. It's also all marketing and not as much about improving a product. It can be, it just depends on the role, product and company.

Regardless, the pickle I'm in now will only continue to, well, pickle, before I can take a bite and discover the taste of my future.

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Graduate School... Costs a Fortune Before You Get In

Forget the cost of tuition, room and board, the cost of applying to graduate school is fiercely staring at my quivering piggy bank like an angry honey badger ready to pounce on an unsuspecting snake long before I've even scribbled a sentence of my application essay.

To get into a top masters program -- MBA or otherwise -- you need to stand out for more than just your GPA. When your GPA makes you stand out for the wrong reasons, you're far behind the curve. It isn't clear if it's possible to run really fast and hard to make it over that hump (ie pay expert consultants a lot of money to teach you the right speed to run and how your feet should hit the ground every step of the way) but the consultants surely will tell you that without them, you'll be sitting down where you started, exhausted, looking up at a giant insurmountable lump of your future.

The cost for a live or online GMAT study program is somewhere around $1000 - $1400. There are cheaper programs, of course, and plenty of ways to get some books and study on your own, but many advise to take one of the classes if you're the kind of person to underachieve on standardized tests. But for the candidates who really want to do well, you can pour hundreds or thousands of dollars more into private tutoring... just so you'll break 700 or 750.

Consulting by admissions experts for the top programs is even more painful. One program I was examining the other night cost $3500 for a full package of help and edits to apply to just one school. Plenty may argue that putting $5000 - $10,000 into preparing yourself to apply for a top ranked program is worth it because on the other side of the hill... long after the field trips and late nights getting intimate with statistics... there's a miraculous salary increase that will improve your overall lifetime earnings by, well, something around a lot of money, give or take a decimal point. But that's IF you get in. All the coaching and test-taking advice in the world may never be enough. It's a gamble either way. And if you can do it on your own (obviously there are plenty of people who have got into top MBA programs without draining their savings on outside help) then why seek out an expert?

Looking at my semi-healthy bank account, I can't fathom draining my cash or stocks for this kind of coaching. And maybe that's why I'll never be an MBA student or even masters student. I figure, if it's not meant to be, it's not meant to be. And, meanwhile, am somewhat jealous of the people in the world that can afford such coaching, and their Harvard / Stanford / Wharton / Kellogg / Haas / Ross pedigree.

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What Salary Buys Happiness in Your City? $75k or $160k?

Today, the Wall Street Journal attempted to figure out just how much money (yearly, salary-wise) you need to be happy in any given city in the US. The article is quite relevant to the money tiffs my boyfriend and I have been having over how much a person / family needs in the Bay Area to be happy.

The whole concept is based on a study that says once people earn $75k, any additional income does not improve their happiness. But we all know $75k goes a lot further in the middle of nowhere than in Times Square. The WSJ attempted to figure out what $75k means across the US based on the cost of living.

Of course, my city is the second most expensive in the country, requiring an income of $118.5k to be happy. Only New York, which would require an income of $163k for the same level of happiness, is more expensive (and much more expensive at that, though I feel quality of life in the Bay Area is much higher.)

The chart is an interesting comparision of just what equals a really good salary in different parts of the country. This is the first year I’m, in theory, earning $120k (though likely only earning a little more than half of that due to on-and-off contract work) and I can attest to the fact that this is the first year I feel happy with my salary and quality of life. I’m living cheaper than I have to in order to save money, but that’s more because I’m going to end up earning $80k this year and not $120k. I can see that extra $40k just pushing me up to the amount where I’d feel stable, would be able to spend a little on things like… a car that has functioning air conditioning, and still not break the bank.

Hmm, maybe I should move to Dothan, Alabama.

Then again… they need to factor in how happy people are in each city to figure out the true cost of happiness where people live. In the Bay Area, I think happiness is cheaper because there’s so much to do outside – for free – and weather is generally decent enough to spend a good chunk of the year outside. Whereas, in Chicago, you may need less money to hit this target salary of fiscal happiness, but then that happiness is much more expensive… to keep yourself entertained all year long, you have to pay a lot more.

What do you think? What salary would you need to make in your city to reach the ultimate “happiness” a salary can offer before the excess is just luxury, without affecting your emotional state?

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Clashing Long Term Fiscal Values in a Young Relationship

My boyfriend and I have been together four years. I quickly fell in love with his kindness and calm nature, which contrasted with my oft-anxious and somewhat self-centered relationship with the world. Mostly, though, I found that after dating a law student for two years I felt much more comfortable in a relationship with someone who had less motivation than I did than more. With the lawyer, who had an Ivy undergrad education and a JD from a top-10 school, I could never equal his level of success (or so I thought at the time) with my average schooling and internship salary.

Thus, dating a guy who wasn’t striving to become the next Joe Jamail was a refreshing relief. With the attorney, I always felt like he looked down on my choices and with that my depression over uncertainty, my 21-year-old lack of clarity. Enter my current boyfriend with his lack of concern over professional title or climbing up the corporate ladder, and I felt safe. With him, I felt comfortable moving up my own corporate ladder. It’s not that he is stupid or anything, he too has a degree from a top school with a high honors mark on his diploma to boot. So intelligence is not the factor here, more so, it’s the fundamentals of what motivates a person.

Four years later, my boyfriend and I still have little arguments about money. He doesn’t like discussing finances – which, fair enough, is not something two people dating oft discuss prior to marriage or at the very least engagement. After being unemployed for a year and not applying to jobs, he eventually landed a low-paid, part-time internship (one that I had completed earlier) and after that found an hourly editorial job at a non-profit that paid less than I made at my first non-profit job. It was obvious he hadn’t cared to negotiate for a better starting wage, but mostly I was proud of him for finally getting out of his funk and getting a job.

The years go by… and neither of us are by any means perfect. I manage to get fired from… a few jobs… because I lack motivation when I believe my contributions would be better contributed by a robot. As I learned to force myself to do my job no matter what, I got laid off because that job was no longer needed. To my credit, every time I lost my job I managed to practically double my salary in my next position. I moved across industries and tried out a lot of different things to figure out where I would be fulfilled. I realized that I am, to some extent, motivated by money – not by having nice, flashy things, but by watching my networth increase… my maxing out my 401k… by feeling that I may one day have enough to afford a house, even in the Bay Area.

My boyfriend, on the otherhand, spent those three years working at the non-profit. He did his job very well, followed orders, increased productivity in the company by making many of the processes more efficient. He never asked for a raise. His boss gave him a very small “raise” when he decided to work less hours and go 1099 contract instead of W2 hourly. He’s still making $20/hr, while I’m billing upwards of $80/hr on some of my projects.

This isn’t to say that I would judge anyone for working a job that makes $20/hr – there are plenty of jobs I respect out there that earn this. If you’re talking about $20/hr in Kansas, that’s also a very different income than $20/hr where the average small house costs over $1M. But this is where we always get into our little tiffs about money… I argue that before I have kids, I’d like to have an average yearly dual income of at least $150k. Long-term, I see no reason why that dual income can’t be $300k. And I would feel more comfortable in life, before deciding to have children, to know that we’d make that kind of income in our lifetimes.

My boyfriend thinks I’m crazy. Maybe I am. $150k for a family income is not unreasonable, but the majority of people in America live on much less than that – and many of them have healthy, happy families. I just look at my current spending – which could be more frugal, but is by no means extravagant – and wonder how I’d ever be able to save for retirement and pay for a house and potentially pay back graduate school loans, all while also affording children (I want two or three of them within the next 10 years.)

My boyfriend, who also wants to return for graduate school (either to become a teacher or psychology researcher) will never care about income above and beyond middle class. It’s not that he’d mind if his field paid more, he just will never be the type to push for raises or chose a job because it pays better. And as much as I admire that about him – as much as I feel safer in my own career journey knowing that my partner will accept me and love me if I make $30k a year or $200k a year, I still feel like sometime down the road this difference in fiscal values will start to hurt us a lot more than it does now.

There are times when I think of what it would be like to continue my search for my life partner, and I just can’t imagine being with anyone else. I love this guy to death, and again, I couldn’t be with someone who cared that much about money. If anything, I know that I’m most comfortable bringing home the bacon because then I feel I have more right to be in charge of the household finances. My mom is clueless when it comes to money and my entire life my parents have argued about how it should be spent. As my father was the one bringing home a single income (albeit over $200k by the time he retired) he never felt she had any right to be involved in financial decisions. If I was with a guy who understood finances more than I did… and made more money… then I might end up in that situation too. So I’d rather be the one in charge, making more money, and with a guy who maybe doesn’t care that much about his salary.

It just makes me nervous about limiting my choices later in life. What if I want to take a year off to spend time with my newborn child? What if I want to work part-time to be able to go to my child’s plays during the school day or drive them to soccer practice? On the whole other hand of this, I’m terrified of knowing I’m worth “$200/hr” or whatever my going rate would be at the time, and then deciding not work that hour because I want to spend it with my family. It would almost be easier to have less money, have a stable job, and never feel like my time is stamped with a dollar value. Or, at the least, have a partner who earns as much as I do, or around the same amount, so we could contribute to a goal income for the year… and enjoy the time we have off without the calculator in my head exploding over lost income opportunities.

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September Networth: $77,434

Will I or won't I hit my goal this year of a $100k networth? It's possible. I'm at around $77.4k right now.

I need to be extremely frugal over the next four months to hit my goal.

As far as income goes, I'm expecting:

Potential September Income

Project A: $10000 pre-tax this month

Project B: owed $1600 + potential income of $3200 (pre-tax)

Project C: owed $300 (pre-tax)

Total: $14000 pre-tax... ~$9000 after tax.

I'll prob spend $2000 this month on rent, food, insurance, gas, health, etc.

So if I can do +$7000 this month I'll be at $84k.

That leaves $16k that I need to make in 3 months between Oct & Dec, or $5.3k per month after tax.

It's possible for Project #C I will start a $5k-$10k per month contract for 1 month. That would help a lot! Project B will likely pay around $3200 pre-tax for part-time, though it's not guaranteed. Project A is likely ending this month.

I plan to donate 10% of any income above $100k that I earn and 15% of all income above $120k, if I happen to earn that much, 25% of all income over $150k. It's not much, but I like the idea of donating a portion of income I earn over $100k.

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I Will Teach -- Me -- to Be Rich

Earlier today on my lunch break I opened up the PDF first chapter of Ramit Sethi's "I Will Teach You To Be Rich" and read through it quickly.

One part that stuck out was early on when he poses the question "what do you define as rich?" He argues that you first must figure out what rich means to you in order to get there.

What does "rich" mean to me?

It means...

1. Having enough passive income to not have to work.
2. Having enough passive income to fund my own business.
3. Having enough passive income to fund my own business and fail. Maybe 3 times.
4. Being able to work when I want, for who I want.
5. Having enough money to donate large sums each year without feeling like it hurts my ability to achieve above goals.
6. Manage to do this while also having a family with 2-3 kids and supporting an upper middle class lifestyle and occasional splurges.
   

A few years ago, I would have said "making over $50k a year." Well, that was never rich in my mind, but it sure came close. I recently reviewed my social security statement for the past six years and realized that with the exception of last year, my largest yearly income to date was $25k. Last year I made about $63k. This year, I should hit $80k-$100k. And that still doesn't feel rich. I feel less rich now than I did when I was making $25k because instead of wealth being impossible, it instead is a hard, yet achievable road of long hours, late nights, working for 'the man', or finding the right startup to get lucky at.

If I never have kids, never buy a house, avoid graduate school, and maintain my current level of saving ($50k per year) with a 5% rate of return on average, I'll have over $1 million by the time I'm 40.

But is that rich? Not at all.

What does "being rich" mean to you?

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Graduate School -- Calculating a Reality Check

I've been doing a lot of daydreaming about graduate school as of late. If I can manage to get past the GMATs and possibly retake the GREs for a better score, there's still one more overwhelming knot I must tackle: reward vs. cost of a graduate degree.

Today, I started a spreadsheet to attempt understanding just how much money over time each of my top-choice programs would cost me. I tried my best to fairly estimate how much it would cost for a year including tuition, room, board and other necessary costs. My top-choice schools range from $30k a year to $80k a year. Most programs are 2 years, some are 3. Some are MBA programs, others are in design research. My top choice is in both, and happens to cost the most when lost salary is added in (it's a 3 year program.)

Based on my current income, I feel it is safe to say that I could make $100k average per year during the time I would be in graduate school. So to understand the total cost of school, I've added that yearly lost income. Granted, I could freelance and consult on the side during school or obtain scholarships and other work situations, but at this time I'm looking at the cost of graduate school w/ no work vs. working full time. And I can't handle the results of my calculations.

My top choice school, which would grant me an MBA and a Design masters degree, will cost approx $500k over 3 years. (WHAT? A HALF MILLION DOLLARS?) It's $160k total, give or take, without the income loss factored in. Quite frankly if I continue on the professional track I'm on now I can probably match any income bump I'd get from having an advanced degree.

Now, the thing is, I'm not going for my masters degree for a raise. I'm going because I want to give myself a fighting change to lead product management for an innovative company. That leads me to wondering, however, if I'd be better off investing that $500k in starting a company instead of going to grad school.

Even the in-state program that I'm interested in will cost me $260k over a period of 2 years including lost income. How can I justify this kind of spending?

This all comes at a time when my networth is eeking closer and closer to $100k. At the moment, that seems like A LOT of money. But when I look at the cost of these graduate degrees (and the cost of life in general), it seems like pocket change.

Looking ahead to the future I know I won't have the luxury to save as much as I do now. I'd like to start a family when I'm in my early 30s. My boyfriend is also planning on going to school so will have loans as well. Once I go to graduate school my value will be entirely in the amount of time I work in life. These days I feel like it's a waste of time to do anything other than work... all my freelance projects earn me additional income - why spend time outside at a park when I can be earning valuable cash to invest when the market is down and I'm still young?

Not that I'm complaining... life is going really well, esp given the current economic circumstances. I'm just trying to figure out how to justify graduate school to myself when on paper (eh, Google docs spreadsheet) it just doesn't make fiscal sense. Then there's this whole "having to get in" issue as well.

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Making Sense and Losing Cents of the Economy

Like everyone else who has a dime or more invested in equities, I’m concerned about the future of the stock market. Whenever the market looks so bleak, everyone is concerned. And that’s usually the best time to invest. Yet with my yearly investments becoming more sizable, this feels a lot like Las Vegas. Even with diversification, it doesn’t help when all (or most) stocks are on red.

After receiving my paycheck for the past months and reimbursed expenses, I realized that I’m sitting on $16k liquid in my checking account. Part of me hates writing about this because I know I’m so lucky to have the luxury to ask the question “where should I invest?” But this may also be a temporary income boost and I want to invest wisely.

Yesterday, I pulled out my social security statement and studied my yearly income since 2002. Other than last year, I made somewhere between $0 and $25,000 each year. Last year, I broke $60k for a full year’s worth of work. This year as of Sept 1, even with 2 months of unemployment (unpaid), I have earned around $70k this year. And with the way some contracts are shaping up, I expect to make an additional $10k to $30k by the end of the year. So now I face the unlikely problem in a time of economic crisis – what do I do with all this money?

The easy answer is: spend it. Not on wasteful purchases, but things that I need or will need soon. I could buy a new car, or a “new” used car. Or I could invest in property somewhere (though that requires stable long-term income, which I am not confident I’ll have, especially with my plans to go back to school in the next two years.) So where do I put the excess cash?

I’ve already maxed out my IRA and will, within this month, max out my 401k (no match, bummer.) I will likely put another $2000 in my HSA which is invested in very low-risk funds. My IRA is in Sharebuilder and I bought 5 funds – the gold ETF, the silver ETF, two high-dividend ETFs and a REIT ETF. My 401k is invested in a mix of equities and bonds, and I’m not clear what is in it exactly. With a large chunk of my savings this year going into my 401k, I’m concerned that in the next ten years we’ll have deflation, high taxes, and my 401k will turn to mush.

But I’m willing to take that risk with $16.5k because it could be a very good time to invest as well. I’m just not sure I can stomach taking that risk with more money. Not without understanding the real economic situation in this country and the world. History doesn’t always repeat itself, or even if it does it may take a longer time to turn around. I’m young now, I can handle that, but if the next 5-10 years will be lost decade #2, why should I play?

The whole media fueling the fire is disturbing as well. I can’t tell how much of the stocks slipping these days is all the fear stories about how bad the economy is doing. It’s a domino effect that goes in a circle downward. What if all the news resources lied and said the economy was turning around and there’s a ray of sunshine close ahead? If people would invest and spend money than… well, that seems to be the only way to dig ourselves out of this mess right now. I don’t know if I agree with that, but what else can we do? We need people spending again so companies will start hiring again. That’s how capitalism works, right?

But it will take a long time to trickle down to lower and middle classes. The media couldn’t lie for that long. News would get out that the future is not so sunny. And everything would crash again.

Or you can just – apparently – print money until the cows come home and thus make every dollar worth less and less and less. That can’t be a good thing.

Right now lots of big names in economics are saying that we may have a “double dip recession” or – worse? – a depression… because we never actually recovered from the first recession. I wish I understood economics jargon more so I could make sense of this, this, this and this ... and the thousands of other economic gloom and doom stories I'm reading.

Any feedback from those of you out there who are more economically savvy?

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3 NSF Fees from Bank for Same Transaction: The appropriate acronym is WTF

My bank (which will remain nameless) charges me a $35 fee when I don't have enough funds to cover a transaction. Normally I'd say -- ok, that's a bit steep, but it's my fault for sending out a check that I can't cover with funds in my account. But this summer things got a bit wonky.

For work I need to put all of my expenses on my card and then get them reimbursed. I ended up spending a lot more than I expected and although my American Express payment wasn't due, I wanted to make sure it was paid of asap. For some reason I thought I had enough money in my account to cover the $3500 payment. Well, I didn't. I found this out by seeing a $35 charge on my account activity page. Crap, I thought to myself, I can't believe I just wasted $35. So I was going to let it slide.

Then, two days later, I saw another $35 fee. I called up my bank to find out what's up. Apparently American Express is allowed to automatically try to get the payment through a bunch of times, and each time they try it hits my account with a $35 fee. I called up American Express and they told me that once I approved the payment, it's all done automatically, and I had to wait for it to be denied.

So I called up my bank account and after a few minutes of begging got them to remove one of the $35 fees. I hoped that American Express would be done with the requests for payment, but a few days later another one showed up on my account. I called my bank again and the conversation went something like this:

"Can you waive the $35 fee because I am already paying a $35 fee for that transaction. I now have the money in there to pay for the entire American Express payment and then some. I'm a good customer (yada yada) so can you help me out this one time?"

"No, sorry, it won't let me do that, we already removed one fee."

"But it's for the same transaction. It didn't even pay it, it was returned to American Express. I will probably have a fee from them as well."

"I'm sorry it's all automated there's nothing I can do... ... ... unless ... unless you have some sort of hardship, are unemployed or something...?"

(A pause. I wonder how much I should stretch the truth)

"Well, my job is ending soon" I started, adding "my job is ending next week."

"You should call us back next week," she starts.

"What? This is ridiculous." I brought out my inner actress here. "My job is ending... next week, and you can't put that I'm unemployed now? I will be unemployed next week. On..."

"Today is your last day?" she adds, as if trying to help me through my lie.

"Yes, I don't have work on Monday," I said, "today is my last day."

"Let me see if that will work," she said. A few seconds later I had my $35 refund.

So... does this make me a bad person? Truth is I AM losing my job next month unless my contract gets renewed. Not on Monday, but fairly soon after. Really, though, I figure I'm paying the one $35 fee for my stupidity and the bank does not deserve a cent more.

Since fairness has nothing to do with bank fees, I also take a little consolation in knowing I'm heavily investing in bank stocks. If they're going to get bailed out by the government and charge ridiculous fees, I'm going to get in on that action.

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Eat. Pay. Money can't buy you Love.

Life has been too busy, for better or worse, to update this blog as frequently as I have in the past. Mostly, though, I'm afraid of being found out -- I know far too many people who are experts in finding things online accidentally or otherwise, thus I'm concerned about writing details of my professional or fiscal life at this point to identify myself. Heck, one gal who read my livejournal for a few years guessed this was me just by my writing style and some other details. What, am I the only insecure yet semi successful gal who writes in run-on sentences in this world?

In any case, it's time for a real update. I'll take my chances and hope that I don't say anything too incriminating here to get me into trouble in the real world.

This summer I spent most of my time traveling for a business trip, and then a short vacation since I was already abroad and needed a breather. The best part about it -- other than seeing some cool new places and having great professional opportunities -- was how much money I made in a month. I ended up working extremely long hours and billed about two months worth of work in one month's time -- which is especially great since my contract will be expiring soon and it's not sure yet whether it will be renewed.

I'm not too concerned on that front, though. I've already made more money this year than I did last year, even with just seven months of work. I also have a few startup projects that I'm working on which are extra income streams -- though they're more to keep me sane (I can't just work on one thing at a time) than for the money. Then again, I've found consulting in my field can be quite lucrative. Sure, self employment tax sucks, but once you can call yourself an expert in something you can get away with charging enough to cover that and then some. What I really love about those jobs, though, is the ability to work from home. I'm so much less anxious at home so I get much more done and do better work. Ultimately, I'd like to find a full-time job or consulting work that I can do mostly at home.

That brings me to my current plan to actually apply to graduate school this year. It's definitely the right time for me to do this, if I'm going to ever go to grad school. I'm 26 and I'm not getting any younger. I want to have my graduate degree by the time I'm 30 and given that a few programs I'm looking at are 3 years long, it's now or never. And now is a great time... I don't have an extended full-time job (even if my contract does get renewed it will end in another six months) and my consulting projects could feasibly continue into grad school if my bosses feel I add enough value to the company, and ideally I could work a few hours a week to cover some of my basic expenses outside of loans.

Still, I wonder if grad school has a place in my life. This year (not counting my two months of unemployment) I would have made over $120k -- most graduate programs, even top-ranking ones, boast that their graduates that are on the high end of the salary scale score jobs that pay that must post graduation. Of course, the reason for me to go to grad school isn't exactly for salary alone... it's about having more flexibility in my career, more respect, and more knowledge. I just wonder how much that's worth... because I seem to be doing ok so far -- which I'm proud of and also somewhat guilty about, given the state of the economy. I certainly don't feel like I deserve the income... yet I know I'm most comfortable in the upper middle class, and I don't expect my boyfriend to ever get me there. It's all on me.

My goal this year was to end 2010 with a net worth of $100k. Even though I've been making a lot and saving a lot, the stock market (as we all know) is not doing well enough to boost my savings to that goal. Right now it looks like I might hit $80k... which means I would have saved $30k this year (not so bad.) I might be able to make it to $100k if some of these side projects work out, but that's all up in the air. It's tough because some weeks I love working the extra hours and other weeks I just wish I had time to have a life! For instance, I've been spending all day working... instead of hanging out with my boyfriend and enjoying the nice weather. Hopefully I'll have a few hours away from the computer tomorrow.

I have a hard time sticking to my goals because everything in life is so transient. Working for a big corporation has been a great learning experience, but I also struggle to find motivation in working for 'the bottom line' when even my direct superiors and their superiors don't have a lot of say in what we're doing. I definitely like working for smaller companies where you have a say. Then again, in a bigger company it's a bit easier to just hang on for the ride... do what you're told... which is nice sometimes. But not what I want to be doing for the rest of my life.

Well, I have to get back to work. I don't know if anyone still reads this blog since I never update, but if you do say hi as knowing folks still read will encourage me to write more. :)

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Overfunding my Retirement Contributions?

This year I've done much better than in previous years, so I decided to get a jump on my retirement savings. I'm maxing out my 401k and my IRA. I still don't know if I'll qualify for the Roth IRA or not (depends on whether I keep my job through Oct, Nov & Dec) so right now I have a regular IRA and I'll reclassify if needed at the end of the year.

What I'm most excited about is being able to max my 401k. My company doesn't match but the good news is that I'm funding the 401k in preparation of a Roth conversion. Being 26, I have plenty of time to let the tax laws work their magic. Sure, $13k is not a huge amount of money, but that's a good thing because I'll still have to pay taxes on it when I convert. I plan to wait to the year I go to grad school to do all the conversions because surely I'll be making very little money then, if any, and be in a low tax bracket.

Now if only my boyfriend would start saving for retirement, I'd worry a bit less about it.

I'm also a little concerned that I'll never be able to afford a house, but oh well, at least at this rate I should be able to retire. Hopefully I'll live that long.

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Contemplating a Serious Career Change

Maybe it's because I'm an INFP with ADHD, but I always feel the need for a career shift every couple of years. I get bored at jobs but that's not the only reason I look for a change. There is something missing at every job I've had so far and what that thing is becomes clearer as I get older. That thing is feeling like I'm helping people.

Of all the jobs I've had so far, the moments I've liked most were when I felt most connected to my "NF" side. Admin? Hated data entry. Liked answering questions when people needed help. Retail? Hated "selling." Loved helping people shop for something that fit what they wanted. PR? Hated "pitching." Liked helping journalists get the information they need. Journalism? Liked when I got to write articles to give a voice to people in the local newspaper who otherwise wouldn't be heard. Disliked when my whole job was getting stories first about corporate drama. Marketing? Well, it's hard to find a lot to like here in this sense. I do enjoy the strategy end of things, but I'm lacking motivation to promote something that doesn't benefit people in any way. Notice a trend?

This has me sitting here, wondering if I have gone the entirely wrong direction with my life. I'm "only" 26 but some jobs out there require years of training... a high GPA... and a whole lot of commitment. The worst thing is that now I am making really good money. That would be great if I loved my job, but it's hard to stop everything and go into debt for another x number of years of school to ultimately learn less money. My secret TJ side is screaming "that's stupid!"

One of the fields I'm tossing around is nursing. If I like helping people so much, and I like jobs that are fairly high paced, why not be a nurse? I always wanted to have a job where I could be special and different. Being a nurse is not about you at all. It's a job just like any other job. But where I'd never get recognized by the masses, I'd be recognized for helping people every single day. Would that be enough to make me happy? Maybe.

The only thing I know is that if i keep on the route I'm on now, well, I'm looking at doing what I do best... getting fired, or laid off, or quitting, and being depressed, but too scared to change my track, and then managing to find something else that is "better" in theory (better pay, more reasonability) but worse in getting me closer to career happiness. If that exists.

There are other things I'm interested in... especially psychology... and if I'm going to be a nurse why not just go for the PsyD? Or, heck, get a postbac in premed and go to school for 12 years to become a psychiatrist? It feels too late for all of that. And I don't want to kid myself. I'm definitely interested in psychology, but I'm also not a good test taker and I'm of average or only slightly above average intelligence and below average focus and motivation. I'm on a roll right now faking it in the field I'm in, why change? -- and, granted, I don't totally fake it - but I feel like a big phony. But... if I have one life... why give up a chance to feel like I'm helping people every day? Wouldn't that be worth more than any salary?

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IRA or 401k? Is it too late?

When I realized I would be earning too much this year to qualify for a Roth IRA, I cried a little bit. Ok, that's overly dramatic, but I have been so proud of myself for saving my pennies each year of my $20k to $50k / year income to max out my Roth IRA that I felt a little empty knowing my savings this year could not be invested in tax-free growth.

So I thought I'd do the second-best thing... open a traditional IRA and deduct the money now, pay taxes on it later. Not the best option in the world, but at least I'd get to deduct the money from my rather high single tax rate.

This morning I found out that I was completely wrong about that. I admit it's my fault for not doing my research appropriately, but now I'm totally bummed. Apparently the income you're allowed to have to get the benefits of a traditional IRA is LOWER than that of a Roth IRA. This makes absolutely no sense to me right now because why would anyone want to invest in a traditional IRA if you are in a low-ish tax bracket?

I guess if you do not have a retirement plan at work you are allowed to deduct up to $5k for your traditional IRA in each tax year. Funny how this is the first year of my life I will have access to a retirement plan... a 401k (no match or anything, of course, god forbid I work for a company that would match my contributions.) I signed up for it, and I am supposed to start making contributions in mid July. I wanted to max out my 401k and my IRA for the maximum deduction to reduce my AGI. But it looks like that's not happening.

The only reason I can see a traditional IRA having some benefit is that I think I can still put up to $5k in there each year and $16.5k into the 401k and later, when I'm not making a lot of money over the year, I can convert both of those accounts to a Roth IRA and pay taxes in a lower tax bracket. Given that I obviously don't understand tax law very well, I may be off on this logic as well. At least then I can see why a traditional IRA has some value. But as this conversion thing is fairly new - why would anyone want to open a traditional IRA? Is there ever a good reason for this?

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Mint's "Goals" Depress Me.

It's been a while since I've written on here because I've been so busy lately. Which is a good thing. I'm working a full-time job, spending some time on a side project, and not spending all that much money. All in all, I'm doing "good." Heck, I'm doing amazing right now in relation to how I've done at any point in my life before - financially, personally, etc.

Yet I feel so far away from reaching any of my goals. Mint's new Goals feature makes my future look terribly bleak. Especially given that my current salary -- of about $120k per year, give or take -- is temporary at best -- and even WITH that salary I can't save enough to reach my "goals." At least according to Mint.

I made four different goals for myself...

Emergency Fund -- I have my $8k in that, and it's the only goal I'll reach.

Save for Grad School -- I need to save $110k, I've saved $1.4k. Yikes. At this rate I'll go to to grad school by the time I'm 90.

Buy a Home? Yea, right. I need to save $207k for a downpayment. I haven't really saved anything for a downpayment yet, but I'm counting my various non retirement investment as savings for a downpayment (which, it is if I ever want to buy a house.) Ok, so how much do I have saved now? A whopping $13k. Mint so nicely reminds me that I'm "4 years and 10 months behind" my savings goal. Granted, I wrote that I want to buy a million dollar house - but that's not unreasonable where I live. That's a pretty small house where I live. And I'll never do it. Ok, so I'll rent forever. Or I need to more to Kansas (I guess I'm renting forever.)

Retirement? Well, I'm doing OK on that goal. It doesn't LOOK like I'm doing ok since according to Mint I need to save $6,362,665 by the time I'm 65 to hit my retirement goals. Yikes. Yea, so that's giving me $80k per year in retirement income and I doubt I'll need that much money when I retire, but I wouldn't mind having it. I have $22.8k saved so far, at 26. You may say I don't REALLY have $22.8k saved because that money will probably have to go to the down payment on my house one day when/if I want to buy one. Which SUCKS because I don't want my retirement savings to go back to zero.

I know it's good to be honest with yourself about your goals and how much you have to save, but really this is just terribly depressing. And as I contemplate seriously applying for graduate school next year, I am forced with knowing that grad school will make my goals even further from ever becoming a reality. It almost makes me want to give up. I'll never own a house and never have enough for retirement. I'll be lucky if I can buy myself another car when this one dies.

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Is Capitalism Evil?

I'm a little late to the table on this question, but is Capitalism evil? My boyfriend and I watched the Michael Moore film Capitalism a few days ago and have been arguing since. My boyfriend believes the whole capitalism is evil argument, while I'm torn. It is a system based on greed and greed ultimately equals corruption (because that's just the way people are), however it's the best system I know. That's not saying it's the right way to have an economy.

If my boyfriend had his way, he'd live in a real communist society. One where everyone really gets exactly the same. His happiness will never come from material goods. He could live in a cardboard box and be perfectly happy as long as he had the freedom to live as he chooses and more importantly that he knows everyone else is equally compensated.

I, on the other hand, live my life squeezing out pennies from my salary, negotiating for higher pay, working long hours at two jobs to earn as much income in as little time so I can put it into the stock market and other less risky savings vehicles and have compound interest hopefully work it's magic for the future. It's not that I need a lot of money to be happy... I more so need a lot of money to feel comfortable. Maybe that's the evils of capitalism telling their story.

My boyfriend likes to compare Hitler killing all the Jews to capitalism, because in a capitalist society you have the super rich and then everyone else is poor, and there's very little in between. As a Jew, I kind of take offense to this argument. I don't think it's the same thing at all. In Capitalism, everyone DOES have a chance to succeed. Not everyone will. Some people do have an unfair advantage. But no one is taking masses of people and killing them in gas chambers. The comparison is unexcusable.

But -- I'm not sure where I stand on the whole capitalism thing. If I knew that I could make less money but have stability over the years (a pension, enough to buy a house, live a decent life, take vacations every few years) then maybe I wouldn't be so set in supporting capitalism. The only way I can see living that life is through capitalism now. Even if I'm able to sock away $50k per year after tax for the rest of my life, it will take me 20 years to become a millionaire. I'll be 46. That's not so bad, but that also means that I will need to keep renting an apartment with roommates, will need to keep working two jobs with one of them being for a large corporation that can afford to pay a 6 figure contractor salary, and I'll have to sacrifice much of my life for work.

At least with the stock market there's the chance that those 20 years can be shorter, or that I can save less each year and through compound interest have my million or two million in retirement. I know I won't have a pension. I don't know how much social security will be around by the time I retire. I can't lead a comfortable life unless I know I can save money and have it grow.

Ok, so the biggest argument in the movie that I can say my boyfriend and I agree on is that politicians shouldn't be allowed to be funded by private corporations. That really is just asking for corruption. It doesn't even help the small businesses because the only companies who can afford to have major influence are the ones who are already super rich.

But I don't want to live in a communist society. I like making money. It seems that's the only thing I'm passionate about these days. I don't even like spending money anymore. The more I make, the less I want to spend, because I'm able to start saving thousands of dollars a year. My goal this year is for my networth to go from $50k to $100k. And what's amazing is that it's possible. I'm one of the lucky ones, sure, but I'm still working two jobs. I'm still finding out what my skills are and applying them to roles where I can make a decent wage. I still know that I can lose my job at any second, so I have a sizable emergency fund, and I don't have debts so if I need to cut back on my spending I could feasibly live off $1,000 a month. I wouldn't get to save any more, but I wouldn't be losing money. I wouldn't be evicted.

Maybe I can't understand yet because I don't have a family. I'm sure it's a lot harder with kids. I have so much freedom as a single person to say I can live on $1k a month. But that's why I believe in spending your 20s earning as much as possible and saving as much as possible. Living as cheaply as possible. Work hard now, play later. Hope the stock market doesn't completely crash. That's my motto. Does that make me a capitalist? Eh, I guess so. Will my boyfriend ever understand? I think not.

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The Value of Each Second

I've been making an insane amount of money so far this year. I still owe taxes on my freelance earnings, but I'd guestimate I've taken in about $30k so far.

But I still feel empty. I'm not saying a job is supposed to give me my ultimate fulfillment in life, but I'd like to feel proud of what I do. I work for a very cool company but ultimately I am not a huge fan of the product I'm paid to promote. I'm given very little power to impact the product, so all I can do is work with what exists. And that's not the easiest job. That's why they pay me so much.

Still, I don't know how long I can do this successfully. After less than two months in the role, I feel myself lost for what to do. My contract ends about half way through the year, so my goal is to make it that far. If I can do that, I'll have earned at least the amount I earned for an entire year of work in 2009. Sure, I won't make my $100k Net Worth goal by the end of the year, but I'd be doing ok.

I just want a job that I feel like I can DO a good job at. I like feeling like I've accomplished something, and it's a lot easier to do this with a product that is useful. Ultimately, I think the only way I could ever really be happy in a work environment is if I have a say in the product and get to help make it useful. Not just to market whatever it is.

Ok, so I'm not destined to be a marketer. I've done a good job marketing myself and getting this far. But my introverted and honest nature makes me struggle with any sort of promotion. It's even harder that my role requires me to be "honest" and seem like I'm not promoting a product. Instead, I have to actually like the product and talk about it like I use it all the time. That could be a lot of fun if it were true. The problem is that it's not, and I can't bring myself to flat out lie.

The good news is that I'm strongly leaning towards applying to graduate school for 2011. I see no reason to put it off any longer. I'm still terrified of the debt I'll rack up (my top choice program is $33k a year for two years, not including room & board, yikes! so long savings!) and even more terrified that I'll find out what I want to study isn't right for me either. And it's still hard to justify going to grad school when I could have $100k+ in the bank instead of -/~0.

But everyday I am anxious because I can't do my job well. Because whatever my boss asks me to do, I am unsure how to do it properly. Because I'm not really good at my job. And if I'm going to manage to survive my life, I need a job I can be good at. Really good at. I'm looking forward to the day I figure out what that is.

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Which Credit Card Should I Use for Business Expenses?

Over the years, I've accumulated my fair share of credit cards. I was lured in by cash back programs in the olden days when they were actually giving decent cash back rewards, so I have Chase Freedom and American Express Blue Cash cards. I also have a Chase Amazon card, a Bank of America card (my first credit card), a Macy's card, a Bloomingdales card, and an Express card, oh, and a shiny red Virgin America card that has a lot of miles on it I haven't used yet.

Lately, though, I've faced a new kind of credit card spending that I'm not sure how to approach. I work for a company that requires their employees to pay for all their expenses up front. While for small expenses this isn't a huge deal, I'm talking international trips here. Thousands of dollars. On my credit card bill.

Now, the good thing about this is I can rack up miles fairly quickly, and ultimately I'm not paying for the travel, I'm just paying up front. I am sure I will be reimbursed. It still concerns me that this is on a credit card under my name just in case there is a delay in that. But this is for a large, trustworthy company so I don't foresee this being an issue.

What I'd like to get your advice/opinions on is...

1) Should I put all my travel on one of my cash back cards (like the American Express Blue Cash) so I actually reach the 5% cash back after $6500 spent, even though now it's only for purchases like gas and stuff?

2) Should I open a mileage card on United or Continental, esp now that they're merged? I hate the annual fees for the mileage cards... they just seem so stupid. With the processing fees they charge to book flights now with frequent flier miles, is it even worth it?

3) Should I get a business credit card (like the American Express Gold Business Card?) These cards also have annual fees (even higher than the mileage cards) but they do, at least, keep my business expenses in a separate account. It's just, for the sake of the expenses spending, I don't really own a business. I'm a W2 consultant. Not a contractor. I do have a side business but have yet so spend any money on it, except car mileage. Maybe I would if I get a business credit card. But are the benefits/rewards really worth it? Also, I read that you have less protection on a business card. That scares me. What if it gets stolen when I'm traveling or something? I do like the peace of mind that I have with consumer credit cards while traveling. I'd have those too, but what if a business credit card was lost?

Any other ideas? I'm worried about having too many cards because it will do something to my credit history. I am not sure what, though.

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Should I Have Children?

During my therapy session today, it occurred to me that this question alone is one that, of all the questions and confusions on life I have, is the one that freaks me out the most. I'm not going to have kids tomorrow or the next day, but at 26 I have to face reality that if I am going to have children (I'd like at least 2, at most 3) I should have kids within approximately the next 10 years. That's a lot of time and not much time at all.

10 years ago, I was 16.5. I was a junior in high school, trying to figure out where to go to college, taking the PSATs, and really just starting on my journey of adulthood. It kind of feels like a long time ago. Will 30 or 35 feel that long from now? I hear time speeds up the older you get.

My therapist and I briefly discussed today whether or not I want kids. To be honest, I don't know. She said that people don't have to have children, and you have to really have a physical urge to have kids and a desire to appreciate the joy they'll bring (along with all the sacrifice and stress.) Do I have that urge? Will I ever?

Surely, my life without children might feel a bit meaningless. It already feels meaningless. But it's not good to put that much responsibility on my yet-to-be-conceived offspring -- "bring my life meaning or else." I can't really see myself being a mother. Then again, there are plenty of other people in this world who should not be mothers who are, so why should I be so hard on myself? (Ie -- see WhytheFuckDoYouHaveaKid.com) I'm not THAT bad, right?

I mean, I have my shit together. Sort of. I have $50k in savings/retirement, a job (that isn't stable, but I at least have a career that can lead to more jobs), I'm probably doing a lot better than many people my age who already have children. Why do I feel like I need a million dollars in the bank before I can procreate?

Some days, I think reading all these personal finance blogs and listening to Ray Lucia and tracking my Net Worth hurts me a bit. It just makes me freak out about money. It's important to be responsible with money, to save a certain percentage of your income, etc, etc, but I'm paralyzed by my fear of never having enough. This whole "should I have kids" question goes beyond just having the finances to afford them (heck, am I really the type of person who can be responsible for infants or deal when my teenagers talk back to me?) but the money is a big part of it.

The days I dream of grad school, I have to remind myself how much debt I'll be in at 30, versus the non grad school route where I can possibly reach a networth of $100k or more by 30. If I end up having kids and wanting to stay home with them, why even bother with grad school?

Meanwhile, my boyfriend has barely any savings, no Roth IRA, no retirement accounts, and is planning to go to grad school -- at least for his masters, probably for his PhD. So we'll likely have his debts to deal with. Why bother adding mine? We can't do that if we want to have children. I really need to have kids in my early 30s... I will have to go through in vitro and all that fun due to my PCOS, and having children will probably cost $20k+ a pop. I'm not just making these money concerns up.

What do you think? Do you have children? When did you have your kids? How much did you have in net worth when you had children? Do you think it's silly for me to be this concerned about money before having kids?

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Why "Vacation"

My family took yearly vacations when I was growing up. Usually they would be week-long trips to see family somewhere exciting, like in Los Angeles or Las Vegas. Occasionally we did a non-family-visit vacation like a week in the Bahamas or Disney World (we don't have relatives in Florida.)

When I went to college away from home, and then moved further away from my family home after graduating, most every "vacation" I've taken has been a stress-filled trip back east to visit my parents and relatives. These trips are totally worth it, but I don't consider them "vacations."

Since I've graduated college in 2005, I've taken a few actual vacations. All on the cheap. I did a "free" trip to Israel through Birthright Israel and spent an extra week traveling around staying with distant relatives who often fed me. Last summer I went to Disneyland with my friend for her birthday... we went for one weekend. I did another weekend trip to LA to see a few people. My boyfriend and I have taken the occasional mini road trip halfway down the California coast for... a weekend. We've done two trips to Tahoe... though we haven't skied or done anything vacation-y. His dad lives there so mostly we visited his dad and wandered. I haven't taken any "vacation," vacations, with the exception of the Israel trip. And that was one big timeshare sales pitch for moving to Israel anyway.

A few months ago, a friend of mine asked me if I wanted to go with her on a bootcamp fitness cruise for a week. It sounds awesome... relaxing AND healthy. But I couldn't imagine ever spending THAT MUCH on vacation. It doesn't help matters that now, as a contractor, I don't get paid time off. Right now I'm new at my job so I wouldn't consider taking a vacation any time soon. But even when the time came about when someone with my income should take a week to go somewhere, I can't fathom going.

My coworker loves to travel around the world. I think he does it pretty cheaply, but he's always traveling. He just goes on his own... I'm not independent enough to do that. I'd want my boyfriend to come with me... but given his income, either I'd have to pay for both of us to go on the vacation, or we'd be sticking to our mini weekend trips.

Camping is always an option, and one my boyfriend enjoys, though hasn't done in a while. I like camping, but I don't really see myself enjoying a week doing it. He wants to go to Yosemite for a week. I'd rather lounge by the beach if I had to do a week in nature... and have a shower nearby.

In any case, I wonder if I'll ever vacation again. I just don't really see myself enjoying vacation the way I used to... knowing how much it would cost. Maybe one day when I have kids I could justify the expense, but for me, I don't know how I could reasonably take a week off and go to some exotic resort for a week of pampering and relaxation. How can anyone relax with the price tag?

But then I wonder, do I really ever need to vacation? Sure, I have this deep-seeded longing for luxury. I dream of a day when I'm "rich" and can spend as I please without worrying. But... unless I win the lottery, that day will never come. So I guess I'll be sticking to my mini vacations, and try to enjoy my trips home... because that's all the vacation I'm going to get.

Do you go on vacations? Who do you go on vacation with?

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Follow Up to: Tips for Making More Money Long-Term for 20 Somethings

A few days ago, I wrote a post about how to make more money over your entire life. The trick? Believe you "need" more money than you do now and approach your life's choices based on that need... then save the difference in what you get vs. what you actually need. Always live below your means. Ok, this isn't revolutionary advice, but I got some interesting comments from my readers, and I wanted to respond.

Anonymous #1, from Kentucky, said "I like the idea behind this advice. I also agree to an extent. On the other hand, it's not just career choice that will determine the amount that you make, but geographic location as well. A $120,000 per year job to you is more like $60,000 per year here."

Meanwhile...

Anonymous #2 said "that was the most ridiculous thing I've ever read! ...No offense, but you are still a kid and have a lot to learn. Don’t get me wrong, you are way ahead of most other 20-somethings (not hard to do in this day & age, though!), but be careful about advice you are giving (or taking). Also – you could reach your $100K goal MUCH easier if you moved to a place with a lower cost of living."

While one commenter loved my advice and the other hated it, both had a similar comment on how my choice to live in California makes it more difficult for me to reach my financial goals. I disagree.

I've lived in many different parts of the country through my life, though perhaps never the places where the lifestyle is extremely cheap. But I'm not sure how much a move would save me, unless I moved back home and lived with my parents.

My rent right now is $630. With utilities that adds up to maybe $700 a month. Granted, in Detroit, according to Craigslist ads, I could get similar room in a 3br shared apartment for around $350 a month. I don't know Detroit so can't compare my nice neighborhood to the offerings on CL, but let's just say the rents for a room are half what I'm paying now.

Everyone seems to think living in California is impossibly expensive. It's not. It IS expensive if you want to buy a house here. Gas is a little higher than in the rest of the country. State tax is higher than some other states. Ok, it's not the cheapest place to live. But there are also a lot of opportunities for work here, especially in the areas where it costs more to live. So salaries do, to an extent, compensate for the difference. As my first commenter said, $60k in Tennessee is maybe equal to $120k in California. I'm not sure I agree with that math, but there's obviously some truth in it. I COULD move to a cheaper place, make less money, spend less on rent, and save the same amount. But I would have a very hard time finding a job in my industry outside of this area. If you're in an industry you can work in anywhere, then by all means, live somewhere more affordable. That doesn't change my argument that you should always think you need more money than you do, and that this thinking will help you earn more in the long run.

Now, commenter #2, who has worked as a hiring manager, made a good point. He/she said that once a candidate for a job refused to take the job unless given $5k more than the offer. Eventually, the company hired someone else. OK, I never said "be stupid." If you really want a job, are unemployed, and have no other options (if you "walk" will you be unemployed for another six months? Or are there other opportunities on the table) then take the job. My logic still works, though. If you think you need $x more per year, then you might get a side job, or seek out freelance income to meet your goals. You don't NEED to make the extra money through your day job. It doesn't hurt to push a little in negotiating but always be realistic. I took a big risk during my negotiations for my current job and it paid off. I was really nervous that it wouldn't, and I got lucky. I also knew that I was by far the top candidate for the role and my company really wanted to hire me. I also did not get what I asked for, but I quickly accepted a realistic offer that was still much higher than I was making at my previous job.

In comparison, I look at friends of mine in their 20s who are living at home or living in cheap apartments and thinking that they only need to make enough to cover life month to month. The fact is that your future salary is largely determined by what you make before it (not always, but having a strong salary history helps.) If you spend your 20s making a smaller income because you do not see a reason to strive for more earnings, then you will be at a disadvantage in your 30s. Again, I'm not saying this works for every field... some fields have set salaries. You can still make extra money. If you're fortunate enough to not be in debt in your 20s, take advantage of this and save as much as you can. The best way to save more is to make more. That's the math I believe in.

Commenter #2 also asked "Do you have a net worth goal you are aiming for by the time you are 30? Don't you think NET WORTH is a better goal than just "savings?" I keep track of mine yearly. I just looked back to what it was when I was 30. I did NOT have $100K in the bank then, but the net worth was $170K."

I am not sure what factors into Net Worth to be honest. Right now I'd say my "Net Worth" is my bank account... that is, the combination of my savings, Roth IRA, stocks, CDs, and other investment accounts. I don't own a home (again, that's one of the things that is too expensive for me, living in California) but I own a used car (it's worth maybe $2k, but I don't bother including that in my networth because I'll use it until it stops working) and a few other gadgets and things that I don't count.

So, commenter #2, what was that extra $70k including for your net worth at 30? Did that include a house? That makes complete sense, especially since you have a family. Since I'm single and could move to a job in another city at any moment, it doesn't make sense for me to own. So my whole Net Worth IS my bank accounts.

Thanks for all your thoughtful comments!

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Graduate School: Still an Option, But is it Worth It?

I'm not an academic. Since I was young, I couldn't focus in class, I rarely completed my homework, and while I supposedly had a lot of potential and was at once point dubbed "gifted" by the public school system, academia was never my forte.

So why, now that I've earned a college degree and made a career for myself, still long to return to the Ivy Tower? And what would I return for?

I'm still torn between options, including whether to apply at all. On a pure rational front, I'd be best off getting an MBA if I could manage to score high on the GMATs. At this point I think my experience has a shot at canceling out my less-than-exceptional undergraduate transcripts, but the GMAT would be a toughie.

But does an MBA even make sense for me? I've worked with many people who have MBAs, and many who don't. I've been managed by MBAs and I've been managed by engineers-turned-marketers and artists-turned-non-profit-owners-turned-business-women. I've been managed by people who get it and people who don't, people who succeed by pure luck and others by pure talent, and others who fail for all the wrong reasons. So why get an MBA?

Partially, I want to do it for myself to prove I can. It would look great on my resume (if I go to a top 10 school which, again, is not exactly an easy feat given my overall credentials.) I'd spend two years focused on learning about business -- and maybe I'd even learn something practical to apply in the real world. Mostly, I'd feel more confident in my experience as a marketer with an MBA under my belt. I don't need one, but to really move up the ladder I either need to start my own company or get an advanced degree. Or have friends in high places.

The other option, still, is to go to graduate school for interaction design. I'd enjoy this more, but I worry it's too focused in an area that has limited value if you don't know how to program well. I could learn a bit of programming on my own or in school, but I'll never be the programmer who moved into design. I'll also never be the programmer who moved into business management. It seems I'm already in trouble, not being a programmer and all.

I feel like I'm at a point in my life where I need to make a decision on this. I'm 26 now, and I'm not getting any younger. I've had a solid 5 years of work experience in non-profit, start-up, and large international corporate environments. I'm still not sure where I fit into the work world. I feel awkward in marketing, as I'm not super creative, nor am I brilliant with numbers, and I'm also shy in a field run by the outgoing. Most of all, I dislike "marketing" as a field where you must produce lies to sell a product that isn't as good as it could be, if the business was managed better and the consumers were actually listened to. Which leads me to thinking I really ought to run my own company. And I don't really need an MBA for that. I need an MBA if I want to be middle management. And I don't see myself as middle management. I know middle managers. They are great people, but a different breed of people. They are willing to do whatever it takes to reach their business targets. That's what capitalism is all about. A little lie, here and there. Make everyone want what you're selling, no matter how much it's "worth."

Is that where an MBA would lead me? I don't know if I have the stamina to lead, though I know in the long run I'll never have the heart to follow.

What do you think I should do?

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The Long Term Trick to Earning More Money in Your 20s and Beyond

Let me preface this by saying that I am very aware the amount of money you make is largely determined by the field you're in. If you have your heart set on saving the whales for a living, you may never make as much as someone working in marketing for a national firm. But that doesn't have to limit you to the paycheck-to-paycheck lifestyle.

In five years since graduating college, I've managed to go from a $35k/year job to a $120k/year job. Do I deserve this income more than anyone else making less than me? No. Will this income remain stable for the year's to come? I haven't the faintest.

But -- one thing I've learned is that, while it's easy to accept scraping by in your 20s, you should live like you need more money TODAY so you can save for later. When you interview for jobs, they can't ask if you have children... or an expensive mortgage... or debt that you need to repay. If you're in your 20s and single with little or no debt, you may tell yourself "I'm doing fine on $35k" and then you wonder why you are having trouble saving any money for retirement or anything else. Live like you need $20-$30k more a year to get by, and pursue your salary - not your lifestyle - based on this white lie. It will give you that extra motivation to negotiate for $5k more a year, or $10k more a year... which adds up over the long term.

The trick to earning more money long term is setting savings goals for yourself. You may not always hit them, but having a number (even one that seems impossible to reach) in one's mind shifts the way you go about living. When you're looking for a job, you're willing to negotiate for the extra pay because it's one of the only ways you may ever reach your goal.

I read that you should have as much in savings when you're 30 that you would like to have per year when you retire. My goal is to have $100k in savings by the time I am 30. At my last salary rate, this was looking quite unlikely. I have 3.5 years until 30, and I'm only at $55k in savings right now.

When I got laid off at my last job, I applied for a lot of different positions, all which had varying salary ranges. Some paid really crappy. I knew I needed something, and I knew I could get by on the crappy pay. But I wouldn't hit my goal of having $100k in the bank by the time I'm 30. So that fueled my job search in a different way.

The other day I was talking to my boyfriend. He thinks I'm "rich." He has an $18/hour part time job and hasn't tried to get anything better. He has no benefits. (Well, neither do I, but I can afford them on $120k and still save.) He told me about his friends who are trying desperately to find a $30k a year job. While I'm by no means arguing that you shouldn't take a $30k per year job if you find something that you'd love or it really is the only option, by realizing you are worth more (or at least telling yourself you can convince someone to pay you more... and that you are going to save the money) probably increases your long term earnings.

Let me put it this way... I could easily be still making $50k or less, and I'd probably be just as happy NOW. But, later, I wouldn't have much in savings, and I'd be really upset that I missed out on the opportunity in my 20s to put a lot of money into savings and let compound interest work its magic.

If you can't make more money at your current job or in your field, get a second job, but just live as if you "need" more money to survive BEFORE you actually do. I'm freelancing on the side of my full time job because I know now is the best time to earn income. Later when I have a family I won't want to sacrifice the extra hours of living to be at the computer... but now, there's lots of time to earn money and then save that money for the future.

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Returned $250 Worth of Clothes

A long time ago in a far off land I loved trips to the mall. While not everything looked great on my curves, for the most part outfits fit. And as a student I could get away with wearing funky looks, including low-cost versions of trends.

These days, I'm having trouble finding the right look for work. Over the past few weeks I've done a lot of shopping, and despite spending a lot, not much buying.

Old me would have kept items I bought hoping to be inspired to wear them one day, even though in the back of my mind I knew I never would. But from now on I'm not letting any money go to waste, especially on expensive clothes that I just don't love.

So I returned the $130 pair of patent leather shoes to Ann Taylor that were too big and had a high heel that I'd never wear. The other day I found a pair of low-heel shoes by Nine West that were $78 and have worn them every day since. The Ann Taylor shoes are back at the store and the money is back in my bank account.

I also returned a blue cotton Theory dress to Bloomingdales that cost me $140. I don't love the dress. My boyfriend says it makes me look bigger than I am, which was enough to inspire the return. So that's back to the store as well.

Even with returning those items, I've purchased a few things I am keeping:

2 pairs of machine washable work pants from Nordstrom petites, $78 each.
4 button down short-sleeve shirts from Express, about $20 each.
1 Calvin Klein black jacket, $99.
1 pair of black shoes from Nine West, $78.
1 black turtleneck by Theory, $80
1 gray sweater jacket by Theory, $140
1 pair of Ann Taylor black pants, $100
1 blue dress t-shirt for work at Ann Taylor, $40
1 skirt on sale at Express, $20

So I've spent a lot on work clothes, but I feel better now that I've returned the two items that I'll never wear. Right now I'm looking for a few items that I need, and then my work wardrobe will be complete..

- 1 brown or blue jacket (for brown pant days)
- pair of brown shoes (or shoes that match brown pants)
- 3 button down long sleeve shirts that are machine washable and actually fit me

I've been looking at all the stores but have had no luck with these items. Oh well, nothing wrong with waiting until next month to make more purchases. I haven't even gotten my first paycheck yet!

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Early Retirement, What it Means to Me

I've been thinking a lot lately about the concept of early retirement. From reading blogs like Early Retirement Extreme and Free at 45 I've begun thinking about the true meaning of life. Not from an existential standpoint, which I've already thought about long and hard, but from a view of what every waking moment of my day is worth from now until my death.

My parents and their friends are getting old now. By old, I mean they're in their late 50's and they are really starting to look old. My dad is dying of cancer so he looks even older. When I was a kid, I thought, well, I want to live forever. I never wanted to be young forever. I guess your late 20s is when that thought pops into your head. I don't really want to be "young" forever. I feel like one's 30s are the perfect mix of being young and old. And the 40s aren't bad either. But once you hit 50 your body does start to seriously age. You can definitely work hard at keeping up your body through physical exercise, eating right, etc, but the years take their toll on every body.

When I think about early retirement, I don't have a dream of retiring to some desolate island and relaxing on a beach. I dream of working hard but doing what I want, when I want. I want to get to a point where working freelance or part-time on my own hours won't kill my bank account, where my savings are large enough that the long-term stock market gains will provide a substantial portion of my income.

So over the next few weeks, I'm going to work on calculating exactly what all this means from a financial standpoint. What year could I "retire" from 9-5? How much do I need to earn now and in upcoming years to obtain this goal? How much do I need to save? And when exactly can I retire "early?"

My current plan is to try to save $6,000 per month while I'm fortunate enough to have a job that pays well and low living costs. I'm not sure if this is maintainable over the long term. I'll update in the near future with some further calculations to determine how much I will need to save each month to meet my early "retirement" goals.

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Car Damage Pictures

The Damage:

The evil pipe that caused the damage:

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Need Advice: Car "Collision," Deductibles, Insurance

My car luck is really not doing so great lately. It's a long story, which I'll tell below, but the main question I have is -- should I go through insurance to get the damages fixed, should I even both getting the damages fixed, and is it too late to decide not to go through insurance?

Here's the story.

My first day of work I left my car at the public transportation garage. Returned to my car, the back window was smashed (it's a small window that doesn't open because it's a 2 door) and the passenger seat door was busted.

Called insurance to file a claim about the break in. Nothing was stolen but would need to get window fixed and car seat fixed if possible. Have $0 deductible for comprehensive so figured it was worth it.

Fast forward a week. To today. I'm driving out of a parking lot making a right-hand turn. I don't see anything to my right so I start to turn very slowly. I hear some scraping noise so I immediate stop my car and back up slowly. My passenger side mirror looks fine, it's not hitting anything, so I figure I will back up and then examine the damage...

Instead -- "BOOM" -- my large passenger side window shatters. A louder scraping noise is heard. I stop the car, get out, and see that a pipe has cut a huge gash into the door and basically made the door a wall (the handle doesn't work / it won't open) and glass is everywhere.

I look at the window in shock, then drive back into the parking lot and promptly call my insurance. Which was maybe a really bad idea. I told them exactly what happened... then they told me that this would be a collision claim and I have a $1,000 collision deductible. I've never filed a collision claim and I know I pay a lot in comprehensive so that if damage happens to my car that isn't an accident I'm covered. I've had a few break-ins in the past and they've all been covered at 100%. Even hitting a deer and the damage from that was covered entirely. This, however, would have a $1000 deductible.

So I stopped and said, well, I think the front window had a crack in it from the break in. Ok, so it was a stretch. But I figured at that point it was worth trying to get this covered under my comprehensive policy. Even if they would just fix the windows for me under the comprehensive and I could leave the car door as is. The woman on the other line said that she'd add a note about this to the other claim. I am not clear if she opened a collision claim but it sounds like she maybe just tacked on the report to the comprehensive claim. I'm supposed to get an appraisal tomorrow from a place my insurance company referred me to.

Now the questions I have are...

1) Does it make sense to get my car fixed at all through insurance?

2) Should I just get the break-in damage repaired and not get anything repaired through insurance that was caused by this pipe?

3) Should I get everything appraised and wait to hear if they will cover it all under comprehensive (they won't... not with the giant gash in my car door) and then figure out what to do?

4) Should I just say f'it and buy a new (used) car? I bought my car in 2005 with 130k miles on it for $7k. It's the first car I ever owned so it has its share of new-driver dings on it, not counting today's giant gash. It now has 170k miles on it so I can't imagine it will last that much longer. It's a Toyota so maybe it will last to 200k, so I could see it lasting another 3-4 years if I'm lucky, or longer if I don't drive it that much. Blue book trade-in value for the car in "Fair" condition is something like $1500. I am not sure what condition the car is in right now... looks-wise I'd say it's in pretty "poor" condition but the insides are doing fine. It's definitely not driving quite as smoothly as it did when I first got it in 2005, but it is a nicer drive than some other cars I've been in. Would it make sense to donate my car to charity (or trade it in at a toyota dealership for the pennies they are willing to pay me) and move on with my life? Ignore all the claim filing and just start fresh?

5) Should I get rid of the car (charity or trade-in) and not have a car at all? In reality, this doesn't make sense right now because I live in the 'burbs on top of a giant hill and it's pretty impossible to get around without a car. I'm sure it's do-able, but it would be very difficult. And my commute to work with a car is already 1 hour.

6) But... should I get rid of my car and move to the city? I really like my current apartment... it's cheap ($700 a month with utilities about), in a really beautiful area, my roommates are mellow and we get along fairly well, my room, while small, faces greenery and all-in-all my place makes me happy. It feels like a home. Any place I get in the city will be more money, or smaller, or in a worse neighborhood, or all of the above. I could just move closer to a train stop so I could walk to the train... which provides a lot more options... but that still requires moving, and finding a place I like, and finding roommates I can get along with, or living alone, which I've decided I don't really like doing, and costs a lot on the utilities front. But if I move some place near public transit I could get rid of my car and just not have to deal with the hassle of owning one.

7) Or should I just go to a car shop and get everything fixed myself, even if it costs a lot, and just eat the costs of getting the fixes done without going through insurance? -- Is it too late to do that ... I already reported the claim... but I'm not sure they filed anything under collision yet, or at what point they will in this process. If I don't decide to get the car fixed, will they still file the claim as collision if it gets appraised and the repair shop reports that the damage was caused by a collision (probably) -- I can't exactly ask the insurance company how this will work.

What do you all think? I really need advice here. Thanks!

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Update on 2010 Goals

26 Aspirations and Goals for 2010 (from December)

1. Save 20% of my income for retirement

Update: I should be able to save more than 20% of my income this year if I can maintain my current job. At the beginning of this year I was making $60k per year. Then I was laid off. Now I'm making $100k per year. While I won't make the full $100k this year (I had a few months of unemployment already), I should do ok in 2010. I'm revising my goal to save 30% of my income for retirement which includes maxing out my non-matched 401k and traditional IRA or Roth if my income qualifies. $16,500 in the 401k and $5,000 in the IRA... $22,500 total into retirement savings. But $22.5k is 30% of $75k. Should I save the rest of the 30% elsewhere for "retirement?" Really, that would mean saving in a taxable account until next year roles around and then putting that money towards retirement, especially if my income level tappers off in the coming years. I think this year is going to be unusually good for me, and I may not match this level again for a long time, if ever.

2. Save 10% of my income for other upcoming expenses

Updated goal: I'd like to save 25% or more of my income for upcoming expenses. I'm not sure where I'm going to save this money yet.

3. Increase my net worth to $60,000

Updated goal: increase my net worth to $100k

4. Study (a lot) for graduate school tests

fail. It's so hard to think about grad school when I have a great job. But eventually I will want to seek out higher education. I don't want to wait that long because I do want to have a family in the next 10 years.

5. Take the GMAT (and poss retake the GRE)

Well, I haven't studied yet, so I haven't set up dates to take either of these tests yet. Not sure I will in 2010 to be honest.

6. Apply to grad school(s) in fall 2010

I kind of feel like I should apply for fall 2010 but a lot depends how my current job goes.

7. Stop drinking alcohol (except on my birthday)

Well... I haven't been drinking a lot of alcohol, but I have had a few drinks here and there. Working a high-paced job makes having a drink at the end of the day all the more rewarding and relaxing.

8. Go to the gym 3 times a week

Major fail on this one so far. I don't know when I could go to the gym. I'm so busy. I'd like to go in the morning, but I just can't motivate myself to get to the gym at 6am (with all the hardcore workout folks in the morning) so I could get in a workout before catching my train. At night, I just don't have the energy. It would be best if I could take an hour or two mid-day and go to the gym, but I'm not sure that would be possible. And it also extends my work-day by one to two hours. I'd rather leave earlier and come home and relax. But I do need to work out, I'm not getting any younger and my body feels it.

9. Earn $10k in freelance income ($833 / month)

It looks like I will reach this goal. In addition to my main job I'm working on a freelance project that pays $2800 / month. It may not last all year, but 3 months of the project is $8400, and that makes me a lot closer to reaching my (previously seemingly unreachable) goal.

10. Eat 1300 calories per day

I have no idea how many calories I'm eating but I'm sure it's more than 1300.

11. Drink 8 glasses of water per day

Unless you count the water in the beverages I get from the coffee machine at work, I'm not getting close to this goal.

12. Come up with sweet, non expensive things to do to make my boyfriend happy and do them

Hmm. I haven't really come up with anything specific that is non expensive. I told him I'd buy him a bike after I get a full month's paycheck at my new job. That's not cheap. But it's not that expensive given I didn't really get him anything for his birthday this year and we then can both go biking together on the weekends, so we won't have to pay for other things to entertain ourselves. And it will be healthy for us to go biking.

13. Go to 1 networking event per month and get up the courage to talk to people (which is going to be really hard since I'm giving up alcohol)

I haven't really done this but maybe in the summer I will start going to more networking events.

14. Keep my room organized (easier said than done, hello ADD)

Well... it's not that bad right now.

15. Write max 20 posts per month for blogging gig ($500 / month)

I hit the 20 posts last month. But now I'm cutting back on the blogging, I might quit the gig because of conflict of interest. Which is kind of a bummer, but it also is too tough to write blog posts in the morning now that I have to leave for work so early.

16. Start a saving fund for basic expenses for the second half of next year when I'll likely be out of a job.

Funny... I've been there, done that, and employed again. I didn't save enough to cover all my expenses really... I had to dip into my actual savings... but I was only unemployed for two months. Even without figuring out how to actually get paid unemployment, I managed ok.

17. Write hand written letters to the people in my life who I've lost contact with (sans Facebook status updates). I don't really like many people, but it saddens me that I've lost contact with the few people in this world who I really admire and consider friends.

Ok, I have not done this at all. I did hand write a parking ticket payment earlier today. Does that count?

18. Take an antidepressant for a year and see if it actually helps my mood swings over time.

I took lithium for about 2 months and it made me feel really weird. Got kicked out of the study where I was getting the meds for free. So today I'm not on any drugs. I don't feel like I need them right now, but maybe I do. I'm definitely feeling a bit more stable than I was a few months ago, but I'm just on a ramp up of novelty again.

19. Go to group therapy when possible and give what it takes to get the most out of it possible.

I went to a few months of group therapy and would like to go back. It was actually really helpful for understanding how to interact with people.

20. Make an effort to spend one day a month with each of my few friends.

I'm seeing people more often now that I work in the city. So I think I'm reaching this goal.

21. Invite my roommates to do something fun outside the house and try to build my relationship with them (I am really bad at socializing with my roommates, I like them but when I come home I usually just want to hide in my room. They are so close to each other it's sometimes awkward for me to be there.)

Have not done this yet, unless you count a trip to Costco.

22. Read at least 4 fiction books and 4 personal finance / economics books and 4 books on interaction design

Hmm... I read a few chapters of one book so far. With my commute, I really should read more. I wonder if I'd read more if I had a Kindle...

23. Start saving for a car replacement

Oh, right, that's where my additional savings should go this year. My car has 170k miles on it. I am not sure how much longer it will last.

24. Put my all into work, even though sometimes I don't know how to. Be positive at work and supportive of the chaotic environment that is life at a startup. Try to bring a smile to the table always.

Well, I'm no longer working at a startup. Still, I need to remind myself to do this in any job I do. Any job is somewhat chaotic (unless you're doing routine admin, and then it's just boring.) I just need to remember to embrace the chaos and thrive on it.

25. Work on being a better listener and communicator. Learn from career counselor how to do that.

While I still have a lot to learn on the listening and communicating fronts, I have improved a lot and matured since my early 20s. I'm being very careful in how I communicate to people at the office and attempting to stay on everyone's good side.

26. Try to take one day at a time and be happy for all I have and all the opportunities that are to come.

Minus the brief depression of being unemployed, I've done this pretty well. Right now I have to take everything one day at a time because there is a lot to do and I don't have the time to really think ahead to the future.

So... that's my quarterly update on my 2010 goals. For some, I'm doing really well. Others... like my health goals... are suffering a bit. There's still plenty left of 2010, maybe I can manage to meet my 26 goals before the halfway point of the year.

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