Category Archives: Milestones

Measuring Wealth: UAW, PAW, & AAW

How do you measure wealth?  There are many different approaches to measuring wealth.  Do you have $1,000,000 in the bank?  Some would say that makes you wealthy.  It might unless you have excessive spending habits and spend $1,000,000 or more per year.

Another way to measure wealth is based on years of annual living expenses that you have in savings.  I once read that if you have 10 years of living expenses in the bank, you can consider yourself rich.  If you have 25 years of living expenses in the bank, you are financially independent.  Any dollar amount beyond 25 years of living expenses would make you wealthy.  That scale is logical to me.

One of my favorite ways to measure wealth was created by the late Dr. Thomas J. Stanley.  In his book The Millionaire Next Door, he introduced three categories for people to measure how they stack up as creators of wealth.  Dr. Thomas J. Stanley refers to these three different groups as UAWs, PAWs, and AAWs.

Under Accumulator of Wealth (UAW)

An Under Accumulator of Wealth or UAW is a person who has a low net worth in relation to their income.  A person who is 45 years old, earns $200,000, and does not have a net worth of $900,000 would be considered a UAW.  That formula is based on (Age * Income * 10%).

Most Americans fall into this category based on their low savings rate.  Contrary to popular belief, however, many high-earners tend to fall into this category.  Based on Dr. Stanley’s research, many Physicians are not good at building wealth and are classified as Under Accumulators of Wealth.

You might be thinking, that is nonsense, Medical Doctors are rolling in dough.  How could they not be wealthy?  Yes, doctors earn a high salary.  General Practice Physicians earn around $200,000 per year and specialists earn over $400,000 per year.  How could they not be wealthy?

Doctors come out of school with large student loans.  On average, new Doctors come out of medical school with $167,000 in student loans.  I know of one who owes over $300,000 in student loans.  Doctors are faced with social pressures that members of other professions do not face.  They are pressured to look the part.  That requires living in a fancy housing development, driving luxury automobiles, sending their children to private schools, and joining exclusive country clubs.

I am not picking on this noble profession.  Not all Doctors fall victim to those social pressures.  There are many in the financial community who buck those trends including DocG who blogs at diversefi.com.

Average Accumulator of Wealth (AAW)

An Average Accumulator of wealth would be someone who has a net worth equal to the sum described above.  A person who is 55, has a salary of $150,000 plus $50,000 in investment income, would have to have a net worth of $1,100,000 to be considered an Average Accumulator of Wealth (AAW).  If they have a net worth less than that amount, they would fall into the UAW category.

Prodigious Accumulator of Wealth (PAW)

To be considered a Prodigious Accumulator of Wealth (PAW), you would follow the same formula, but multiply it by two.  From the example above, the formula would be (Age 55 * Total Income of $200,000 * 10% * 2).  In order to be considered a PAW, this person would have to have a net worth of $2,200,000.

Age is a Factor

This formula is better suited for people who are more mature in age.  I read The Millionaire Next door when I was age 26.  At that time, I was a student but had a full-time job.  My net worth at that time was $60,000.  Based on this formula, I was an Under Accumulator of Wealth.  In order to be classified as an Average Accumulator of Wealth, I would have had to have a net worth of $78,000.

This aspect of the formula has led it to be criticized.  In its defense, not many people who are in their 20s are focused on building wealth.  Most are in college racking up debt or trying to pay off debt after they enter the workforce.

In my opinion, a person should not focus on these calculations until they are at least 15 years into their career.  It takes time to build wealth as an investor or entrepreneur.  This calculation is more about where you finish the race as opposed to where you start out.

How to Become a (PAW)

There are plenty of steps that you can take to become a Prodigious Accumulator of Wealth (PAW).  Dr. Stanley has provided a complete outline in The Millionaire Next Door.  Below are some suggestions that will help you to reach these financial heights:

–        Spend less than you earn

–        Save 15-20% of your earnings

–        Invest in equities, bonds, real estate, private businesses

–        Don’t speculate on getting rich quick schemes

–        Invest in yourself by getting a good education and keeping your skills current

–        Avoid luxury items

–        Focus on building wealth for your children

Conclusion

I am a fan of the late Dr. Thomas J. Stanley.  I remember reading about him passing away as the result of an unfortunate car accident the day after it occurred.  His research has helped to spread a message that just about anybody can build wealth if they follow some basic principles and practices.

The UAW, PAW, and AAW classifications do receive some criticism.  It takes hard work to become an AAW and very hard work to become a PAW.  As many of my readers know, I am transparent about my income, net worth, and approach to investing.  With that, we are firmly planted in the Average Accumulators of Wealth (AAW) category.  We will not be in the (PAW) category for some time.  Being an Average Accumulator of Wealth (AAW) at this point in our life has allowed us to reach financial independence and one day retire early.

Are you a UAW, PAW, or AAW?  Use this calculator to find out.

What is your opinion of the formula that determines these classifications of wealth?

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My First Year as a Personal Finance Blogger

My blog just celebrated its first birthday.  The Financial Journeyman was launched on April 8, 2017. It is hard to believe that my first year as a personal finance blogger has come and gone.  Time sure does go by quickly when you are having fun and interacting with great people.

When I launched this blog, I had very low expectations.  My expectations were low because I never created a blog before.  After I decided to create this blog, I did some research on how other blogs performed during their first year.

Many of the general posts that I read about initial blog traffic stated that traffic will be slow in the beginning.  Some bloggers wrote that they received zero traffic for months.  For some, the only person who read their blog was their Mom.  That had me worried because I knew that I would be in trouble if I had to rely on my Mom to read this blog.  Joking aside, I knew that creating a blog was going to take a great amount of time, effort, and some money.

Before I created The Financial Journeyman I never interacted on blogs or forums.  They have always been useful sources of information.  My approach was just to visit, read, and move on.

That approach had to change.  I did not know anyone in the Financial Independence Community.  To meet people and make connections, I had to start interacting with people who were sharing about their personal financial situations on various online platforms.

In a sense, I felt like the personal financial blogger who came in from the cold.  This blog was not about tracking a transformation that followed a psyche change about money.  I was already saving and investing for 20 years, close to being financially independent, and planning on retiring in 2028.

The Financial Journeyman was created to share what I have learned along this journey.  It is written for those who want to achieve financial independence first and then plan for an early retirement.  The content is for both beginners as well as for those how are already taking the required actions to make their own financial goals a reality.

Social Media

Since my blog is anonymous, Twitter seemed to be the best option to start with.  I keep my blog anonymous because I talk openly about my financial situation.  There are some people like my boss and extended family who I do not want to know about the details of my financial situation.  The other reason is that I do not want to be robbed.  I read the book In Cold Blood by Truman Capote at a young age and I suggest it to anyone who has considered sharing about their wealth without protecting their identity.  Twitter has been a great tool for growing traffic and interacting with other bloggers.  In my first year, my list of followers has grown to over 2,700 people.

The Financial Independence Community

Rockstar Finance has been an invaluable resource.  I have had three posts featured in the past year:

How the Mob Influenced My Asset Allocation

Keep Your Hands Off My 401K

Funding Retirement with the Bucket Approach

J. Money was kind to me and greatly helped to get my blog some traction.  ESI who now owns Rockstar Finance is also a good guy and featured me as M25 in his interview series about millionaires. Being featured on those sites truly helped to get my blog some needed exposure among 1,500 other personal finance blogs.

Guest posting is also important for new blogs.  It is a way to get introduced to new readers.  My first guest post was on My Millennial Guide.  Over the past 12 months, I have written guest posts on several websites including Chief Mom Officer, Keep Thrifty, Abandoned Cubicle, and for Michael Dinich.  All those posts have helped introduce me to new followers.

It is fun to meet people and chat online.  For me, however, I like to meet people in person.  It is fun to hang out and talk with people who share the same passion for financial independence.

In the past year, I have started attending my local Bogleheads Chapter Meeting in Philadelphia, Pennsylvania (120 miles away).  At that group, I have had the opportunity to meet some nice people who welcomed me to the group.  At the most recent meeting, I had the opportunity to meet Erin Arvedlund from the Philadelphia Inquirer.  Erin Arvedlund might not be a familiar name, but she was the original journalist who broke the Bernie Madoff Ponzi Scheme story while working for Barron’s Magazine.  Yes, she is the real deal.

In November, there was a Rockstar Finance Meet-up in New York City.  This was a chance to meet some of the best personal finance bloggers who live on the East Coast.  At this event, I had the opportunity to meet Stefanie O’Connell, Josh Holt from Big Law Investor, The Luxe Strategist, and Liz from Chief Mom Officer.  At that event, I also met another Pennsylvania Guy named Church who blogs at My Mattress Money.  Like myself, Church is a big Philadelphia Eagles fan.  He and I frequently chat about the Eagles and message each other during the games.  It was fun to root for the eagles together on their way to a Super Bowl victory.

It seems like I am making new friends every week.  A short while ago I was able to meet a financial blogger who lives near me.  I had the opportunity to have dinner With Michael Dinich.  Michael is a financial professional as well as a blogger.  He is a generous guy.  He and I are currently working on a few collaborations together.

My most recent financial meet-up was the ChooseFI meet-up in Philadelphia.  There are many outstanding financial podcasts, but ChooseFI is one that I tune into almost every week.  It was fun to expand my circle of friends even more.  I had the pleasure of meeting Kait who blogs at Not Your Average Millennials. This was a very friendly and welcoming group of people who are working hard to reach financial independence.  I am looking forward to hanging out with this group again.

People might think I am crazy to dedicate a whole Saturday to drive to these big cities to talk money with strangers.  If I was not passionate about it, I would not do it.  If I want to make new friends and expanded my reach, I need to put forth the effort and go to them.  It is not different from any other personal or professional relationship.

Writing

This post is about a blog, so I guess I should touch on writing.  My advice is simple.  The first post is the hardest.  I thought about creating a blog for a very long time.  I decided that I did not want to one day reach old age and look back and wish that I had written.

It is a craft.  It takes practice.  It is difficult, but I am striving for progress.

Reading makes writing easier.  You might be a personal finance blogger, or you might blog about something entirely different.  Read other bloggers that are in your space.  Read books, journals, and forums too.

Just keep writing.  Dedicate some time to write every day.  The more you do it, the easier it becomes.

Blog posts are short.  Even longer 3,000-word blog posts are short compared to a book.  I have found that diction is super important in blog posts. It is crucial to be as clear as possible.  As a personal finance blogger, the logic is the easy part.  The difficult part is capturing the ethos and pathos.

Finding Balance

I post about 5 times per month.  This is a part-time blog.  On top of managing this blog, I have a full-time HR job where I manage the Recruiting for four different healthcare campuses in two different states.  That job eats up a good chunk of my time and energy.

Every morning, I try to dedicate about 45 minutes for reading before work.  Every evening, I dedicate at least one hour for writing and editing posts.  My time is limited, so I need to be efficient.

Blog Performance Metrics

So, how has this blog performed over the past year?  The Financial Journeyman was raked as the 15th fastest growing personal finance blogs over the past year.  That statistic truly humbled me.

This is the third post about performance metrics that I have written.  If you want to see some of the early stats, I wrote a six-month as well as a nine-month review.  Below are some of the metrics for the 1st quarter of 2018 as well as my total metrics for the past 12 months:

January 2018

  • Sessions – 1,050
  • Users – 724
  • Page views – 1,859
  • Pages/Sessions – 1.77
  • Average session Duration – 1:23
  • Bounce Rate – 71.14%
  • Number of Sessions per User – 1.32

February 2018

  • Sessions – 980
  • Users – 753
  • Page views – 1,699
  • Pages/Sessions – 1.73
  • Average session Duration – 1:38
  • Bounce Rate – 69.59%
  • Number of Sessions per User – 1.30

March 2018

  • Sessions – 3,956
  • Users – 3,289
  • Page views – 5,370
  • Pages/Sessions – 1:36
  • Average session Duration – 1:09
  • Bounce Rate – 84%
  • Number of Sessions per User – 1.20

April 2017 – March 2018

  • Sessions – 16, 537
  • Users – 12,300
  • Page views – 25,454
  • Pages/Sessions – 1.54
  • Average session Duration – 1:17
  • Bounce Rate – 76.74%
  • Number of Sessions per User – 1.36

Conclusion

There you have it.  That was what it is like to be a blogger for one year.  It is now easier than ever to create a blog.  If there is a subject that you are passionate about, you owe it to yourself to write.  You also owe it to others.  People want to read about what you have to offer.  It is a therapeutic process.  It is hard but rewarding.  It is your opportunity to share with the world. People want to read about an experience, direction, and what is possible for them to achieve.

It has been a pleasure to share this year with all my readers.  I am looking forward to an even more exciting second year of blogging.  When it comes to personal finance and especially investing, we do not know what is coming next.  That is why it is important to have a plan and find trusted resources that you can stick with.  My goal is to be one of those trusted resources for you.

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Blog Report: Fourth Quarter 2017

Hello and thank you for taking the time to read how The Financial Journeyman has performed during the fourth quarter of 2017 in this blog report.  It has been exciting creating and developing this blog.  This is the first time that I have ever created a blog.  There have been some ups and downs, but it has been mostly a positive learning experience.

My journey toward financial independence started a long time ago in 1997.  Over the course of this journey, I have had little interaction with others who share the same goals of being financially independent and ultimately retiring early.  My journey has primarily been reading and applying what I have learned to build our current nest egg.

In 2017, I have come out of isolation and joined the financial independence community.  It has been fun to interact with like-minded people.  I have had the opportunity to chat with great people online and I even had the opportunity to meet a few in person.  I am truly looking forward to growing my network, fine-tuning my own financial plan, and hopefully helping others along the way.

At the end of the fourth quarter, The Financial Journeyman turned 9 months old.  This is the second post about performance metrics.  There was not a post for the first quarter.  Both the first and second quarterly report was provided in the Six-Month Blog Review.  Below are the performance metrics for the fourth quarter of 2017 provided by Google Analytics:

October

  • Sessions – 935
  • Users – 716
  • Page views – 1,588
  • Pages/Session – 1.70
  • Avg. Session Duration – 1:37
  • Bounce Rate – 67.91%
  • % New Sessions – 69.09%

November

  • Sessions – 2,806
  • Users – 2,468
  • Page views – 3,668
  • Pages/Session – 1.31
  • Avg. Session Duration – 00:56
  • Bounce Rate 83.54%
  • % New Sessions – 77.83

December

  • Sessions – 945
  • Users – 745
  • Page views – 1,633
  • Pages/Session – 1.73
  • Avg. Session Duration -1:40
  • Bounce Rate – 70.58%
  • % New Sessions – 70.90%

Totals Q4

  • Sessions – 4,686
  • Users – 3,787
  • Page views – 6,889
  • Pages/Session – 1.47
  • Avg. Session Duration – 1: 13
  • Bounce Rate – 77.81%
  • % New Sessions – 74.69%

Totals Q4 vs Q3

  • Sessions – (83)
  • Users – 203
  • Pageviews – (363)
  • Pages/Session – (0.11)
  • Avg. Session Duration – 00:25
  • Bounce Rate – (1.95)
  • % New Sessions – (1.16) 

Earnings

The Financial Journeyman is a monetized website.  The sole reason is to cover expenses.  Without sharing my financial records, this blog has lost money in 2017.  In other words, there were more expenses than earnings.

My long-term financial goal for The Financial Journeyman is to break even at some point in the distant future.  When this blog does become profitable, those profits will be reinvested into improving the blog.

The advice that I have for anyone who wants to start a blog is to do it because you want to write and interact with other people in your space.  If your goal is to have a blog for a major revenue source, it will take time.  If you do not love blogging, it will be hard for it to be sustainable if you are only motivated by money.  That is at least my experience.

In the fourth quarter of 2017, I have only made a few minor changes to advertising.  I have started using Flexoffers.com and advertising for HostGator.  I have dropped the Pepperjam Network.  I am still using Google AdSense and Amazon Associates.  Below are the performance metrics for all three networks:

Amazon Associates – $0.40

Google AdSense – $8.57

FlexOffers – $100.00

HostGator – $75.00

Top Traffic Sources Q4

Rockstarfinance.com – 1,590

Direct – 1,327

Twitter – 354

Google – 631

Rockstar (Directory) – 207

Rockstar (Forums) – 179

Top Posts and Pages Q4

Keep Your Hands off my 401K (Rockstar Finance Featured Post)

Writing a Financial Plan

How we reached a $1,000,000 Net Worth

My Uncle Xavier: Veteran, Millionaire, Mentor

Warning: The Holiday Party Can Kill Your Career

Twitter Q4

Twitter is the only social media platform that I am active on.  I have read and researched many other platforms, but Twitter is a good fit for me.  It works well with my anonymous status.  There are also a large number of authors from the personal finance space on Twitter.

Following – 4,891

Followers – 2,413

Tweets – 2,854

Likes –  2,878

Modest Money

I have submitted my blog to the Modest Money list of bloggers in October.  I was initially ranked at #712 but quickly climbed to #365.  My blog fluctuates between #365 and #381.

Modest Money has given me new insight into how my blog ranks in terms of traffic score, social media, and SEO.  These are all helpful metrics to work on improving as my blog grows.  It is also helpful to see where my blog ranks in comparisons to other personal finance blogs.

Ranking for Top Finance Blogs – #381

Traffic Score – 37.67

Social Media Score – 47.98

SEO Score – 33.65

Total Score – 39.77

Email Marketing

One of my goals for 2018 is to focus on increasing the number of email subscribers.  Currently, there are only 29. If you like this blog, please subscribe to the email list.  I only publish once per week on average and will not overwhelm you with content.

Conclusion

Thank you again for taking the time to read about how The Financial Journeyman is progressing.  The next quarterly report will also be the one-year anniversary of this blog.  I hope that I can provide you with some strong performance metrics at that point.  Until then, my goal is to keep doing my best to write about my experiences on this amazing journey and to meet more people along the way.

Please share your thoughts in the comment section below.

 

2017: Year in Review

2017 is in the books.  2017 was a year to remember.  It was full of surprises.  You never know what is around the corner.  At the start of 2017, creating a blog was not on my list of things to do.  The Financial Journeyman blog is now almost 9 months old.  That is just the result of being present and taking advantage of what life has to offer.  I have even greater expectations for 2018.  Below are some of the major highlights from the past 12 months:

Career

2017 started off on a high note.  My boss called me the first week of January and told me that I was getting a promotion. With the promotion came an 11% raise and a $1,000 bonus for a project that I completed in the fall of 2016.  I was excited and did not know that this promotion was coming.

The only major change the occurred was that I now had one employee to manage.  I did not see it as a challenge.  My new employee Jill is a super smart and motivated Millennial who has overcome some major hurdles in her life.

Over the past 12-months, it has been a pleasure to help my assistant develop.  Jill is on the right path.  She is contributing to her 403B account, just completed a Graduate Leadership Training course at Binghamton University, and is consistently asking me to be a part of projects that I am working on.  It is my goal to help her transition into a management role in the future.

Meeting the Bogleheads

In February, I attended my first local chapter meeting of the Bogleheads in Philadelphia, Pa.  I have read the Boglehead’s two books and browsed the forum for many years.  To break-up the boredom of winter, I decided to attend a local chapter meeting.

It was great to meet and spend time with this group of people who are working to reach financial independence by following the teachings of Jack Bogle.  If you are interested in passive investing and using low-cost index funds, I suggest you visit Bogleheads.org and check out a local chapter meeting.  I am looking forward to attending the February meeting in Philadelphia.

The Financial Journeyman

On April 8th, The Financial Journeyman was created.  It has been quite an experience.  As a result of creating this blog, I have been able to interact with so many great people.  I am meeting new people every week.  The purpose of this blog was to share my journey toward financial independence with the world and to try to help others who are on a similar journey.  This blog has become so much more than I expected.  I look forward to what the new year has in store for this blog.

Reaching $1,000,000 Net Worth

I was not sure if I was going to share this milestone.  After much thought, I have decided to share it because my blog is anonymous.  The purpose of sharing this milestone was to inspire others what is possible if you live below your means, limit debt, save as much as you can, and invest your money wisely.  It felt great to reach a $1,000,000 net worth at age 40.  I am grateful to have this financial foundation as my wife and I continue to work on our ultimate goal of early retirement.

10th Wedding Anniversary

In August, my wife and I celebrated 10 years of marriage.  It is crazy that 10 years went by so fast.  It has been a productive decade.  It has been the best decade of my life.  I feel blessed to have Lori as my wife.  She is my best friend.  There will always be ups and downs in life.  While I have experienced more ups, it is great to share all of it with my wife.  I truly believe the best is yet to come.

London & Paris

To celebrate our 10th wedding anniversary, we traveled to Europe for a week-long vacation.  It was our first trip to Europe. We had an amazing time visiting both London and Paris.  We got lucky with the most favorable exchange rates between the Dollar to Pound in recent history.  If you like to explore new cities and enjoy history, take a trip to London.  You will not regret it.  Just be prepared to spend some money because it is expensive.

Rockstar Finance

I have been a fan of J. Money for a few years.  When I created my blog, I had the goal of writing a post that would be good enough to be featured on Rockstarfinance.com.  It took me about 10 weeks to write and edit How the Mob Influenced My Asset Allocation.  It felt great to see my post shared there.  I now feel like a legitimate personal finance blogger.  I am proud of the “As Featured on Rock Star Finance” tag on my blog.

If that was not exciting enough, I had a second post Keep Your Hands Off My 401K featured as well.  My audience has grown tremendously as a result of the exposure that I received from Rockstar Finance.  The personal finance bloggers who hang out on the Rockstar Finance Forum are a great group of people who work to help everybody in the personal finance space succeed.

ESI Money

ESIMoney.com is one of my favorite personal finance blogs.  Some people build wealth by way of entrepreneurship and others do it by working for someone else.  ESI Money is focused on building wealth by climbing the corporate ladder.  That has been the approach that I have followed up to this point in my career.  Along with providing comprehensive investment advice, ESI Money has a cool motivational series that features interviews with millionaires.  I was featured as M25 in this series.  The interview received a great response.  In case you have not heard, John from ESI Money now owns Rockstar Finance.

New York Personal Finance Meet Up

I was not able to attend FinCon 2017.  I did, however, attend the next best event for personal finance bloggers.  That event was the New York Personal Finance meet Up.  The New York Personal Finance Meet Up was an informal meeting of more than 20 personal finance bloggers and internet entrepreneurs.  It was great to meet and chat with some of the financial independence bloggers who I often read.  It was also an opportunity to meet new people who are working, saving, and investing with the goal of reaching financial independence.

Keep Thrifty

The last highlight of the year was to be interviewed on Keep Thrifty.  Keepthrifty.com was one of the first personal finance blogs that I started to read after I created The Financial Journeyman.  Chris and Jaime write excellent content about paying down debt, saving, taking a mini-retirement, and raising a family.  It was a pleasure to work with Jaime to write and edit this interview.  She did a good job of getting me to share more about myself than I have in any previous post.  Please check out the interview if you would like to learn more about the beginning of my journey to financial independence.

Conclusion

2017 was a great year.  There were many pleasant surprises.  While I had high hopes for a productive year, I did not expect it to be as good as it ended up.  Moving forward, I am simply planning on continuing to do what has worked in the past and keep my eyes open for new opportunities.  My goals for the upcoming year are:

  • Continue to save at least 50% of our total gross income
  • Become proficient in Travel Hacking (Travel to Ireland for free)
  • Publish 5 blog posts per month
  • Continue to grow blog traffic
  • Attend FinCon 2018

Please keep an eye out for the fourth quarter blog performance metrics from The Financial Journeyman in early January 2018.

How we reached a $1,000,000 Net Worth

What does it take to reach a $1,000,000 net worth?  In our case, it took a long time, hard work, saving a large percentage of our income, and putting our money to work for us by investing wisely.  Rob from Mustard Seed Money has a great post on how much you have to save each month to reach a $1,000,000 net worth.

I initially was going to title this post “reaching a $1,000,000 net worth by age 40”, but that would have been misleading.  Even though I was, in fact, age 40 when I reached this financial milestone, I did not do it alone.  Individually, I would not have reached this milestone.  My wife and I worked as a team and did it together, so I must give her the credit she deserves.

When we got married, I had over $100,000 saved up in my investment accounts.  As far as assets go, she brought our current house to the marriage. There was a mortgage on the house, but she had about $100,000 in home equity at that time.  By combining our assets, we started out with about $200,000 based on our investment accounts and home equity.

Career Growth

Over the past 10 years, we managed to double our household salary.  Considering that we both have college degrees, we never earned a large salary.  When we first got married, my salary was only $30,000 per year.  My wife was teaching for a few years and was earning about $50,000 per year.  In the past 10 years, our combined salaries have grown to over $150,000 per year.

Savings

When we first got married, our savings rate was 38% of our gross earnings.  We started by maxing out our Roth IRA accounts, I contributed 15% per year to my 401K, my wife contributed 10% to her 403B, and 8% to her defined contribution pension plan.  We also built up a large emergency fund and invested money in taxable accounts.

Every year, we have tried to increase our savings rate by 1% or more.  Our current savings rate is 50% of our gross earnings.  We still earn under the IRS threshold that allows us to max out our Roth IRA accounts.  I now work at a not-for-profit and max out my 403B.  My wife is close to maxing out her 403B and still contributes 8% to her pension.  We are happy with the size of our emergency fund and now just add to our taxable accounts.

Lifestyle Creep

We are always aware of how much we are spending each month.  While some lifestyle creep has occurred, we manage it well.  We travel, but do not fly first class or stay in 5-star hotels.  We buy reliable new or 1-year old certified used cars and drive them for over 12 years/200,000 miles.  We eat at home during the week and only go out to eat on the weekends.  We closely monitor the cost of monthly subscription expenses such as internet, electricity, Netflix, and other bills.  When we do spend money on needs or wants, we always shop around for the best value.

Investing

Our approach to investing has been very simple.  We have invested primarily in index funds.  Our asset allocation has been 25% in bonds and 75% in stocks for the past 10 years.  In the stock allocation, it was well diversified with large-cap, small-cap, and broad international index funds that included emerging markets. From 2007 until 2017, that asset allocation averaged a return of 10.5% per year.

Asset Breakdown

House (appraised in 2012): $220,000

PSERS Pension (Cash Value): $100,000

Taxable Accounts: $240,000

Combined IRA & 403B Accounts: $480,000

Other assets not included (cars, firearms, collectibles, jewelry, electronics, etc)

Debts

Mortgage Balance: $30,000

Monthly Expenses: $2,800

What’s Next

We have more work to do.  We have ambitious goals.  Our next goal is to reach $1,000,000 in investable assets.  We should be able to reach that in the next 3 years based on savings and historical returns for our asset allocation. We also want to pay off the balance on our small mortgage over the next five years.  Our goal is to have $2,500,000 saved by the end of 2028 (see the countdown to FIRE on the right margin).  To reach that goal, we have to keep up our savings rate and have our investments return an average of 6.5% per year.  That is well within reason with our current asset allocation of 65% invested in stocks and 35% invested in bonds.

Conclusion

The main purpose of this post was to share that it is possible to reach a $1,000,000 net worth by just being average.  My wife and I went to average universities, have average jobs, live an average lifestyle, and accept average market returns.  Yes, our savings rate is above average, but that too is possible for almost anyone to achieve if they create a solid financial plan.

If you want a more comprehensive list of steps to follow, check out The K.I.S.S. Approach to Financial Independence.  That is the foundation of our financial plan.  For more reading on reaching financial independence, please check out the Resources page.  It is full of a collection of great books, blogs, and forums that will provide you with unlimited wealth building information.

Where are you at on your journey toward financial independence?

Please share your financial milestones and what you did to achieve them in the comment section.

Six Month Blog Review

Thank you for taking the time to read about my first 6-months as a personal finance blogger.  I have read that reaching the 6-month point is a major milestone because it is when many bloggers call it quits.  The past 6-months have gone by in a flash.  Creating The Financial Journeyman has been an educational experience.  Other than being a learning experience, it was fun to try to be creative and to watch the blog develop.

What I have most enjoyed about creating this blog is the interaction with other bloggers in the personal finance space.  Everyone has been friendly.  Whenever I reached out to someone with a question, they have always been willing to assist if they were able to do so.  It is such a great experience to be part of a community that is working towards helping others to improve their financial situation.

Along the way, I have interacted with people from many different walks of life and who are in different financial situations.  There are moms who blog about their family finances, Asian finance bloggers, Millennials, Gen-Xers, Baby-Boomers, and Professionals.  There are blogs that focus on getting out of debt, budgets, dividends, index fund investing, financial independence, and early retirement.

Launching the Blog

I did not know what to expect with this blog.  I do not classify myself as being technically savvy, but more along the lines of technically functional.  My blog was created and launched on April 8th, 2017.  My good friend, Tim @timtekk volunteered a whole Saturday of his time to build the blog.  Without him, this blog would not exist.  He is also my go-to guy when my Word Press plugins are not working correctly.

My First Post

The first post that I published was about how my grandmother taught me about money when I was just a boy.  I did not know if anyone would ever read it.  The post was only about a day old and it received a comment.  The first comment that I received was from @My_Sons_Father.  He gave me encouragement and I appreciated that.  A few weeks later, J. Money commented on the post.  I was taken aback knowing that J. Money stumbled across my new blog that had only 3 posts at the time.  That motivated me to keep at it.

Performance Metrics

The first few months of traffic was slow.  Traffic did pick-up, however, after I became more involved in The Rockstar Finance Forum.  My big spike in traffic came when I joined the “chain gang” for the Drawdown Strategy.  By being active in Rockstar Finance, I have been able to interact with many great people.  September was my best month because I had a post featured on RockStarFinance.com.    Below are the traffic metrics for the past 6 months:

April

  • Pageviews – 415
  • Sessions – 228
  • Pageviews/Sessions – 1.82

May

  • Page views – 645
  • Sessions – 323
  • Pageviews/Sessions – 2

June

  • Page views – 1,325
  • Sessions – 711
  • Pageviews/Sessions – 1.86

July

  • Page views – 1,980
  • Sessions – 1,062
  • Pageviews/Sessions – 1.86

August

  • Page views – 1,450
  • Sessions – 821
  • Pageviews/Sessions – 1,76

September

  • Page views – 3,822
  • Sessions – 2,720
  • Pageviews/Sessions – 1.40

Earnings

In the first six months, I have joined Amazon Associates, Google AdSense, The Pepperjam Network, and CJ.  Below are the metrics for the past six months:

Amazon Associates – $13.35

Google AdSense – $19.30

Pepperjam – $0.00

CJ – $0.00

The earnings have not been great.  However, Jim @RouteToRetire explained that this is a process that takes time.  The monetization goals for this blog are primarily based on paying for expenses and sustainability.

Top Traffic Sources

Rockstarfinance.com – 1,770

Direct – 950

Twitter – 363

Google – 304

Forums.rockstarfinance.com – 114

Directory.rockstarfinance.com – 79

Top Posts and Pages

How the Mob Influenced My Asset Allocation – 2,055

Home Page – 272

Blog Page – 259

Early Retirement Portfolio & Plan – 135

The Aldi Experience – 91

About Me – 82

Twitter

Prior to launching The Financial Journeyman, I had a twitter account but only used it for following financial writers, a few financial bloggers, and mainly my favorite sports teams.  Twitter has been a source of my relative success.  I have used to communicate with many of the top financial bloggers.  My Twitter metrics are:

Following – 4,406

Followers – 2,005

Tweets – 1,713

Likes – 2,110

Conclusion

I waited six months to publish any type of metrics on my blog.  Moving forward, I am going to publish a quarterly blog performance report.  These types of posts are not my favorite to write because I feel like I am creating a report for my boss.  However, I do feel that publishing these reports are a great way to track progress, celebrate success, and motivate others.  There have been a few other big moments for The Financial Journeyman, but they were not metrics driven.  I will write more about them on my end of year review post in late December.

How do my metrics compare to your first six months of blogging?

Do you think my blog is heading in the right direction?

Blogger Recognition Award

I would like to start by thanking A Journey to FI for nominating me for the Blogger Recognition Award.  The Financial Journeyman is only six months old and this recognition is a big deal to me.  There are many personal finance blogs.  It is easy to get lost in the crowd.  It is an honor to be mentioned among some of the best bloggers in the personal finance space who were also nominated for this award.

The Blogger Recognition Award

The Blogger Recognition Award is an award for bloggers that is given by fellow bloggers.  It is like the (chain letters) from the past.  There are no superstitions, however, if you do not participate in the Blogger Recognition Award.  If you want to join in, nominate other blogs that you enjoy reading and pass it on.  The nice thing about this award is that it both shows recognition and helps other blogs to be discovered.  Fellow bloggers will also appreciate that you noticed their hard work.

Why I started blogging

I have always had the dream of being a personal finance writer.  I never thought that it was possible because I did not have a dual Journalism/Economics degree from an Ivy League University.  I am also not a financial advisor, so I did not feel like I had the industry credibility.

Reaching financial independence has been my goal since my first year of full-time employment.  I started studying about building wealth and investing in 1997.  That was also when I started saving and investing as much as possible while I was working on an assembly line in the day and attending college at night.

Over the years, some friends learned that I was passionate about investing.  Many of them asked for my help.  Some even asked if I would help their relatives.  Along the way, I have helped many people to create a financial plan and to set up their investment accounts.

My friend Tim suggested that I start a blog.  He is an IT guy and said that he would set up my WordPress account for me since I helped him with his investments.  I gave it a few weeks of thought and decided to take him up on the offer.  It just took off from there. There was not a well thought out strategic plan.  I just wrote down a few ideas and started working.

Advice for New Bloggers

Tip #1

Have fun with your blog.  Enjoying your blog is crucial because nobody will read it more than you do.   Be true to yourself.  Write what you are passionate about.  Read more than you write.  Spend as much time possible doing research on what you want to write about.  Don’t compare yourself to others.  There is an audience for every stage of the process.  People are searching for information from others who have experienced a similar situation. Provide them with the content that they are looking for.  Help them, entertain them, become a resource.  You never know, you might even make a friend or two along the way.

Tip #2

Get involved with the online communities that are related to your genre.  Prior to creating my blog, I have read forums and a few blogs.  I never commented or communicated with the authors.  The day that I launched my blog, I created a twitter account to go along with my blog.  I jumped right it.  I started commenting and sharing as much as possible.  It is much better to be part of a pack than to be on an island.  Most bloggers want to help other bloggers succeed.  Make use of what other bloggers can offer.  Before you know it, you will be helping people as well.

My Nominees (not in order)

Actuary on Fire

My Sons Father

Life Zemplified

Optimize Your Life

Route to Retire

Adventure Rich

Our Financial Path

Maximize Your Money

Cyinnovations

Wall Street Physician

Chronicles of a Father with Cents

Chief Mom Officer

My Strategic Dollar

Rules for paying it forward

  • Thank the blogger who nominated you and provide a link to their blog.
  • Write a post about being nominated for the Blogger Recognition Award.
  • Give a brief story of how/why you started blogging.
  • Give two pieces of advice to new bloggers
  • Select between 10 -15 bloggers you want to give this award to.
  • Let the people know that you nominated them for this award and provide them with a link to your post.

 

Saving $100,000 by age 30

Saving my first one hundred thousand dollars was the hardest.  When I started on the road to financial independence (FI), I was only 20 years old.  I wanted financial independence and reaching my first $100K was the first goal that I set.  I was aware that it was a lofty financial goal, but I embraced the challenge.  I wanted to reach this milestone by age 30.  On my way to reaching this goal, here is what I did:

Work

I had to land a job and start earning money.  When I looked for a job, my options were limited.  I did not have a college degree yet.  The economy where I lived was not great.  My options were a factory job, construction, or working in the food industry.  I selected working on an assembly line in a mattress factory.  There was nothing glamorous about the job.  It paid a decent hourly wage for unskilled labor.  It was a means to an end, so I was grateful to have it.

Learning to Save

To reach my goal of building a net worth of $100K by the age of 30, I had to save.  Saving came easily to me.  I was working hard for the paycheck and did not want to waste the money.  Every month, I would put at least $500 away towards my long-term goal.  I also put additional money away for vacations, car expenses, and costs associated with college.

Investing

I had to learn how to invest the money that I was saving.  It was the year 1997.  It seemed as if growth and technology stocks were soaring to new market highs daily.  There were often commercials on television advertising new day-trading platforms.  I was fortunate to have read a few books that taught me to stay away from such speculative approaches.  I learned to invest in mutual funds that tracked indexes such as the S&P 500.

I needed to earn 8% on my investments based on my savings and time horizon.  Historically, the stock market earned 10%.  I was confident in the information that I read.  I dollar cost averaged money into my investment account every month.  I ignored the market volatility and just kept moving forward.

Education

Getting a good college education was important to me.  I knew going to college would help me to learn skills that would put me in a better position to earn a larger salary.  College was, however, a financial challenge to manage on my path to reaching $100K by age 30.  I did not want to incur a large student loan balance.  To avoid that, I took 60 credits at the local community college.  I paid cash for those credits.  That allowed me to incur only $18K in student loans for the additional 60 credits I needed to complete my BS degree.

Conclusion

Yes, I did reach the first goal on my journey to financial independence.  By age 30, I saved almost $120K.  The only debt I had was my student loan of $18K, so that left me with a net worth of over $100K.

Looking back, I did put a great deal of pressure on myself to reach this goal because my salary never exceeded $30K per year during this period.  It was, however, worth it.  It set me up with a solid foundation to build upon towards my next goal of a $1M net worth.

Yes, my 20s were productive, but I also had a great time.  I went on nice vacations, went out with my friends, and dated the girl who later became my wife.  I would not go back and change it if I could.

Please remember to check with a financial professional before you ever buy an investment and to read my Disclaimer page.

10 Years Later

This week, my wife and I celebrated our 10th wedding anniversary.  It had a surreal feel to it.  It is hard to imagine that 10 years have gone by.  In all honesty, it has gone by in a flash.  This post is a brief review of the past 10 years.

Our Wedding day

My wife and I were married on August 10th, 2007.  It was the best day of my life.  Sorry, if I sound cliché, but it was the day I married my best friend and the greatest person who I have ever met.

Even though it was 10 years ago, I remember the day like it was last week.  Our wedding was on a Friday night and it rained the entire day.  My day started by going for breakfast with my dad and uncle who came in from out of town.  After breakfast, I had to take my grandmother to the hairdresser.  After that, I went home and relaxed.  That afternoon, I watched the first 2 episodes of Mad Men and just reflected on my life.

At 5 pm, it was time to get ready.  I put on my tux, jumped in my car, and headed to the hall.  On my way there, I popped in Exile On Main Street by the Rolling Stones and headed to the hall to get hitched.

Our Wedding

We were married in an unpretentious hall in Olyphant, Pa.  For wedding gifts, both my parents and my wife’s parents gave us each $5,000 to use towards the cost of the wedding.  We managed to keep the cost of the wedding close to $10,000.  My future sister-in-law paid to have the string section from Marywood University’s Music Department play for one hour while guests were arriving.

When we were planning our wedding, my dad gave us a solid tip.  He said that people will be coming after work on a Friday night, so be sure to have plenty of food and alcohol ready for them as they arrive.  We followed his advice and our guests were pleased.

Our wedding went off without any hiccups.  We said our vows, ate, danced, and had a great night.  It was the beginning of a new life.

Our House

After our wedding, I moved into the house my wife owned.  My wife had purchased this house from a relative a few years after she finished college.  The good news was that she almost had the house paid for.  The bad news was that it needed to be remodeled.  Over the past 10 years, here is what we accomplished:

Doors: $2,000

Garage door: $1,200

Shed: $1,400

Windows: $3,500

Bathroom remodeled: $6000

Kitchen remodeled: $8,000

Deck: $9,000

Roof: $8,000

Addition: $30,000

Lawn & landscaping: $5,000

Awning: $2000

Generator: $3000 (following Super Storm Sandy in 2012)

All the projects other than the addition was paid for in cash.  A home equity loan was taken to pay for the addition.

Salary & Savings

The first year we were married our combined income was just over $80K.  Since then, it has doubled.  Every year we have maxed out our Roth IRA accounts.  We also fund our 401K/403B accounts.  We started by contributing 10% of our salary to the 401K/403B accounts and have increased our contributions to the maximum amount allowed.  We also save money in a taxable account.  Our savings rate has increased from 40% to almost 55%.

Education

My wife is a public-school teacher in Pennsylvania.  To get to the top of the pay scale, she had to complete 60 credits beyond a Master’s Degree. When we were first married, my wife had her Master’s Degree.  For the first 4 years of our marriage, she took classes and finished the required 60 credits.  She did so without incurring any student loan debt.

When we were married for 5 years, I switched careers from Marketing to HR.  My new employer offered tuition reimbursement as a benefit.  It was my goal to go to graduate school.  I took advantage of that benefit and went back to school to earn a Master’s in Organizational Management.  The degree cost me about $2,000 and my employer paid for the rest.

Volunteering

Prior to getting married, my wife did a great deal of volunteering.  She did mission work in China where she volunteered to teach English to children in orphanages.  After we were married, she has shifted her efforts to volunteer more at her church.  She has inspired me to be more community focused.  I have become active in helping teach career and interview skills to young people who are developmentally delayed at The Arc of Luzerne County.  We also volunteer together and have taken on a commitment to pick up roadside litter as part of an Adopt-A-Highway project.

 

(Actual Photo of us wearing matching shirts)

Travel

It has not been all work since we have been married.  We have gone on many nice trips.  Here are some of the places we have visited:

San Francisco, Ca (honeymoon)

Tampa, FL

Las Vegas, NV

Miami, FL

Key West, FL

Puerto Vallarta, Mexico

Bermuda

Charleston, SC

Burlington, VT

Ocean City, MD

Washington D.C.

OBX, NC

Asheville, NC

Virginia Beach, VA

Quebec City, Canada

London, England

Paris, France

Our Relationship

My wife is my best friend.  She is also the kindest person who I have ever met.  Our relationship is based on trust, honesty, respect, and communication.  We are not perfect, but we try to be good to each other and to be considerate.  I am not going to lie, it has been easy.  I would not change one thing about her and would marry her again.

Conclusion

Looking back, it has been a great 10 years since we have gotten married.  Moving forward, we are planning on doing more of what has gotten us to this point.  Our goal is to retire in about 11 years, so we need to continue to work hard, save, and invest.  Life is short, so we are also going to continue to travel and enjoy every day we have together.