Archive | September 2011

Paralyzed

This has been such a morass of a week.  I mean, not this week so far, but the past 7ish days.  To explain, there were some days when I didn’t leave the house, other days I didn’t shower, and most days I procrastinated past the point of reason.  It’s difficult to say exactly why I fell into this funk.  I can sort of attribute it to the weather, because it’s been unbearably hot here, particularly compared to the unseasonably nice days we had last month.  I haven’t wanted to get anything done because just walking outside drains me of moisture and motivation.

However, the largest culprit for my doldrums has got to be the enormity of the responsibility placed on my shoulders.  I am now the master of my own fate and financial success, without a familial safety net, and that scares the living daylights out of me sometimes.  I’ve been living with this knowledge for over 6 months now, and it has been sinking in gradually.  For an extended period of time, I was so caught up in paperwork and projects that I didn’t have time to think about the bigger picture.  However, now that life has settled down, I have a lot more time to think, and consequently a lot more time to psych myself out.

It’s not like it’s that difficult, right?  Eat, sleep, work, play, make money, save money, pay bills, manage employees, pay taxes, maintain my home, fulfill my commitments, plan for my future, don’t forget anything important or else my world will start caving in.  Piece of cake.

No, the difficult part is just adjusting to the new normal.  I’ve acknowledged the “new normal” time and again, but this adjustment has proven more difficult than I could have ever imagined.  I still don’t feel empowered to make important decisions without the fear of messing up my life.  So, my path has been that of inaction, which is a decision in and of itself.  If I stick to the status quo, nothing terrible happens.  And yet, I’m cheating myself out of new possibilities.

I don’t really know if there’s a moral to this story yet.  I guess I’m realizing that I’m prone to more down periods than I ever anticipated.  And I’m trying to actively build bridges over these crevasses in the landscape of my life.  Sometimes, though, it seems I just have to give in to them and ease myself out gradually.  It’s like when your leg “falls asleep;” it doesn’t just wake up at the snap of your fingers, it takes time.

Okay, changing topics.  Fun things!  Last Thursday I attended a local sorority alumnae chapter meetings, in which we packed bags for the collegiate chapter members and planned the next few months of activities.  Saturday evening the girls came over for Evelyn’s birthday game night party, which was a blast!  Sunday night I met up with some more recent alum friends at a bar near campus, and we caught up over dinner and a new type of cider that might replace my habit of always ordering Woodchuck.  It’s called Original Sin and it’s delicious.  Then Monday night, I was a sub at my neighbor’s bunco game!  It was my first time playing, but it didn’t take long to get the hang of the rules.  Then I stayed after to help her clean up, just because we hadn’t had a chance to talk.  Tonight, after dragging my butt to the gym, Lydia and I had dinner at Panera and I helped her catch up on some her her ever-growing “to do list” items.

So, there’s been a lot of fun sprinkled in with my existential crisis.  Okay, now I’m being overly dramatic.  I think the biggest problem I face in all of this is that on any given day, no one is telling me what to do.  I’m not accountable to anyone, except people working with me or for me (either as employees, or where I am their client, as in my CPA).  I have equals and subordinates, but no superiors in my life.  And honestly, that’s what stresses me out the most – the fact that I have to decide what projects to work on, how to spend my time, and how to accomplish my goals.  I have to decide what my goals are.

Right now, my main goal is to have a “big picture” understanding of all my financial obligations, both on a personal and business level.  Beyond that, everything else is a side project.  But I’ve been very good at distracting myself with those side projects.  It’s still progress, just not necessarily the right kind of progress.  Last week, there was no progress at all.  But it will get better with time.  I imagine that I will look back on 2011 with shock at everything I’ve been through and wonder how I even got dressed every morning.  I imagine that one day, balancing everything on my plate will be as easy as riding a bike.  One day.

Banking

With all of the uncertainty in life (and the stock market), it would be nice to have a place to put your hard-earned money that is safe.  Banks have traditionally been known as safe places to store and save money.  Storing your money in a bank is certainly better than hiding it in your mattress or in the back of your toilet tank.  However, beyond safety, banks these days don’t really have much to offer you.  I have recently become a financially independent 20-something, and so I’m looking at these age-old problems with fresh eyes.

I used to believe that it was sufficient to simply save money, put it away for later, and then retire by the date of 65.  Now that I am considering the full picture of life’s expenses, I realize that couldn’t be further from the truth.  When you’re 20-something and you are trying to figure out what to do with any money you are able to save, you commonly turn first to your bank.  You may already have a checking account, but now you also want to start a savings account.

This savings account may yield a 1% return – if you’re lucky.  I was recently offered a 0.65% rate as a special promotional offer, and the bank acted as though they were rolling out the red carpet for me.  To get an offer of even 2% guaranteed, you’ll have to invest in a CD, tying your money up for 2-5 years at a time – sometimes longer!  At a rate of return as low as 1-2%, the money you’ve saved so scrupulously is NOT beating inflation rates.  That means that by leaving your money in a bank, you are actually losing value over time.

Now, we need to keep some of our money at a bank, because we need to write checks, make deposits, and complete other financial transactions.  I am in no way denying the usefulness of banks.  However, the thought of saving large sums of money in a bank – particularly at today’s insanely low interest rates – makes my blood boil.

One argument for the benefit of lower interest rates is that people will be able to borrow money more readily.  However, this is at odds with financial success.  If this county is going to get healthier financially, we’re going to have to start investing and growing our wealth, not just borrowing and increasing our debt.  Sure, it’s great that home mortgages these days are as low as 4-6% in some places.  However, if you can only get a 2% return at your local bank, you’re still at a loss.  Back when mortgages and CDs both were closer to 10% (and the stock market was MUCH higher), we were all better off.

All this is to say that saving through banking, despite all the smiles and kind words at your local branch, cannot be your main path to financial success.  As 20-somethings, now is the perfect time to save as much as we can, but it is prudent to invest it in some more profitable avenues.  How you find them is up to you.  I’m not an expert at investing, and so I would not want to offer my methods up for criticism.  I’m only writing this to urge you to investigate alternatives to saving money at your bank.  Maybe once banks start seeing a lot of money flowing out, they’ll realize the need to be more competitive and we’ll all benefit from higher rates of return.  Until then, protect your assets from depreciation and grow your wealth for the future!

As always, please feel free to add your thoughts and contributions to my post.  I’d love to continue the conversation.

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” – Charles Dickens

Protected: Football, etc (Password = city of alma mater, no caps)

This content is password protected. To view it please enter your password below:

Milestones

There are certain milestones in life that most people expect to reach before they get old and die.  These include, but are not limited to, graduating from high school, getting your first job, getting married, having kids, and (in many cases) graduating from college or graduate school.  I think it’s pretty safe to say that when I was in high school, I had a pretty solid expectation that I would reach most, if not all, of those milestone by the time I turned 30.

These milestones represent different things to individual people.  There are undoubtedly reasons why individuals prioritize these milestones differently.  For instance, some people feel they’re born to raise kids, some feel incomplete without a life partner, and others refuse to stop going to school until they’ve earned the right to be called doctor.  The one thing these milestone have in common is that they’re all goals that are desirable to us as individuals.

However, it seems to me that their meaning to society at large is pretty similar.  The implication is that those individuals who fail to accomplish those goals are not full members in our society.  Over time, the rules seem to have relaxed a bit.  I would argue that the accepted pattern before 1960 was this: graduate from high school (and college?) > get married > get your first job > have kids, all before the age of 25.  Moving toward the present, the importance of college and graduate school became more prevalent, and the deadline for many of the other deadlines was pushed back.

It’s difficult to say what the most accepted pattern today is.  I would argue that for the middle class, the pattern is more like this: graduate from high school and college (and grad school?) > get your first job > get married > have kids, before the age of 30.  Of course now that the deadline for accomplishing these milestones has been pushed later in life, this gives individuals a lot more wiggle room to reach them in any number of different sequences.

I think the most challenging part of your 20s, that tumultuous period between high school graduation and becoming a full member of society (having met those all-important milestones) is that we are no longer on the same path as our friends.  While in K-12, we are all compelled to accomplish the same milestone by (roughly) the same age.  However the next 10-13 years can go so many different ways.  Some people go straight through to a terminal degree in their field, which can easily take them to their late 20s.  Others start a family before they even turn 20.  Regardless of which sequence you begin, the pressure is on to accomplish the rest of the milestones.

I have so many married friends who feel pressure to have kids.  I have single friends who feel pressure to get married.  I have over-educated friends who feel pressure to get a job.  I have friends who feel incomplete because they haven’t yet graduated from college or graduate school.  But through all of this pressure, do we ever stop to ask ourselves what purpose it serves?  Who made up these milestones, and why do we work so hard to achieve them according to society’s standards?

While I don’t intend to argue with the importance of education, working, and starting a family, I do think we place too much importance on the deadline of these goals, and argue that there are other things individuals can (and should) do that are equally important.  I would argue that increasing your understanding of culture, through traveling, reading, and networking, is a very important life goal.  I think we should all cultivate hobbies, find what makes us passionate about living, and spend time forming lifelong friendships.  Certainly, friendship and travel and your personal journey can be accomplished within the framework of these societal milestones, but it seems to me that too many people put them on the back burner.

Another problem I have with these milestones is that they turn life into one giant “To Do” list.  As soon as you finish school, get a great job, and start a family, what’s next for you to do?  I suppose the answer is obvious: advance your career, raise your family, and start working on these milestones for your kids.  After all, pressure on kids to be achievement-oriented is getting stronger every day.  If your kid isn’t captain of a sports team, president of a few clubs, on the honor roll, and a model citizen by the time he/she is 17, then you’ve obviously failed as a parent.

But what about your life?  What about just living?  Working is for others (for the money, on a personal level), education is ultimately for work, and marriage is for the production of offspring.  But where in that formula is there room for you to live for yourself?  I’m not talking about being selfish…  I’m just talking about taking actions that don’t accomplish a specific “societal checklist” purpose.  What’s so bad about moving through life on your own timeline, operating by your own set of standards, and finding your own purpose to be alive?

Now I have no right to give you advice any more than society has a right to pressure you to live within certain standards and timelines.  However, just as in my makeup and credit card posts, I have developed certain beliefs from personal experience, and it is just as much my right to compose these essays as it is yours not to read them.  I hope that if you have read all of this, you’ll add your thoughts in the comments, so I can hear about your perspective just as you’ve just heard mine.

Until next time,
From Apple to Zipper

“Happiness is making a bouquet from those flowers within reach.”