My personal finance story

My Personal Finance Story

How did it all begin? I grew up in a home with conservative parents and six kids total in the house. They taught us the value of hard work, getting an education, and saving money. They’ve lived their advice and are currently “debt free” and my dad runs his own business and has done so for several years. We had to save up often for things that we wanted, all the way from video games on Saturday s to TI89 calculators and shoes and yearbooks.

I never really worked during school and mostly just stuck to side jobs during the summers. I remember sometimes we’d get an allowance for doing chores around the house. I also remember getting bribed sometimes by my oldest brother Kyle with ice cream or money to change my youngest sister’s diaper. Both may be embarrassed about this, but that is their problem not mine. Another memory I have is getting paid a penny a page for each book I would have read. I think that is a good thing to do with the kiddos. I can honestly say that I think my interest in reading wouldn’t be nearly as high if I hadn’t had that little program in my life.

Our dad somehow stumbled across the book Rich Dad Poor Dad and he even bought the game and taught it to all us kids and some of us kids are now pretty well versed in its workings and what it could mean. That and my parent’s examples of getting out of debt and using coupons for EVERYTHING were the basic foundation of money and all its activities or uses. I was embarrassed about the coupons but now know they have value as it has lead to my parents having means wherewith to get through job loss and down economies.

I did start working during school once I was in college to avoid graduating with a ton of debt and to have at least a little bit of spending money. I was fortunate enough to have a mom who knew how to figure out FAFSA and get me some fairly decent Pell Grants from the government to go back to school. Pell Grants are great short term, but again this is something the government doesn’t have to do, but that it does do in order to increase its tax revenue in the future. If they didn’t subsidize schooling this way then there would be fewer students in school and schools wouldn’t be allowed to charge what they do and they would then need to decrease the amount they charge for tuition, which would then do away with the extra spending of the government through Pell Grants, which leads to inflation, which leads to higher prices and and and…

I graduated from BYU Idaho with a bachelor of science in business with an emphasis in finance, but honestly I didn’t really understand personal finance and investing like I would’ve liked. I certainly learned about business finance and many of the different modeling techniques that one can and should use in business, but that was in the business world. I was taught how to be a good employee and less so a potentially good business owner/leader.

A few good books that I’ve felt have helped me develop are the eMyth, Rich Dad Poor Dad, and The Richest Man in Babylon. I used the last books advice for my first year after graduating from college. I put 20% of what I made towards my debt and 10% to myself only to be used for investing, which I didn’t exactly follow. I was completely “debt free” in November of 2010 and had less than 2 bucks to my name as I used my 10% set aside for investing to pay off my debts as I didn’t want that hanging over my head anymore and I was out of my 6 month grace period and was then incurring interest expenses and so paying off my debt was technically earning me 5-6% on my money since I wasn’t paying that in interest anymore.

From there I started saving up for a home, but couldn’t really find anything that interested me and so I ended up putting the money into a self-directed Roth IRA account as that would then allow me to eventually invest in real estate and business with all the earnings tax free, which is a big draw for me since I want to have passive income in retirement, but don’t want to pay taxes on those earnings. Luckily I was able to find a great girl and marry her and she and I pieced together what funds we had and bought rings, a honeymoon, and other wedding necessities. We sold and bought a cheaper car to get into a house that we found to avoid paying rent and to lower our insurance premium each month.

We’ve got rid of one of our cell phones and we don’t have cable, a home phone, or Internet as monthly bills. We watch DVD’s from red box and the library. We borrow Internet from the library as well. We’re working on building up our food storage supply and emergency savings in case either of us loses our jobs.

I’ve also been reading a lot of books and blogs on the economy and things aren’t looking good down the road. Recently people are finding a rallying market with Europe dealing with the Greece debt problems, but it isn’t enough pain to bring us back to equilibrium. To benefit off of this financially I’m finding more and more than investing in commodities in all their versions and in foreign equities. Or you could short domestic equities. Its funny to see so much ramped up about China as they are heavily invested in the dollar, which is still got time to implode and they have a massive real estate bubble that dwarves anything we saw in the US a few years back.

This is basically where I’m at now. Working, hoping to get back to school soon, and getting my preparations in place like the prophets and apostles of my church guide me to.

I still need to sit down and write out an action plan with my wife on our goals as we’re still a bit off with what are goals are and when we’re going to accomplish them. Once we have that in place I think we’ll be well on our way to getting them.