Addicted to Workahol

This Post was originally published on June 2nd, 2014

“Why do you work so much?” That is invariably the question that I get whenever I explain my schedule to family or friends for the first time. As with any broad question the answer depends on what whomever is asking wants to hear. I can name any number of factors as to why I work three jobs, mainly money, professional growth, or simply compulsion. I tend to work long stretches of days, today was my 8th day in a row and I was scheduled for 61 hours, but in reality wound up putting in around 70 plus an extra 5 hours of travel. Some people would quit even thinking about that, but I got out of work, jogged 2.5 miles, wrote a 1600 word blog post, and am going to get up tomorrow and work 5 more days in a row. This is my life, this is my compulsion, and I am not sure why I do what I do, or how I am able to get it done.

My parents often joke that they have now clue how old hippies could have raised such a perfect little capitalist. When I was 8 I organized several kids in the neighborhood into a lawn care/snow removal business where even though they were mostly older I was able to convince them to work hard to make cash. By the time I was 12 I started carrying boxes and organizing the stock room at the independent pharmacy down the street, and the week after my 15th birthday I got my working papers and would ride my bike or bum rides to wash dishes at a restaurant. When I was 17 and could drive to work I started at a gas station that sold propane and propane accessories where I would work 13 hour shifts every other weekend in clear violation of child labor laws. I didn’t care, these jobs were a way for me to earn money that I would put toward the things that I enjoyed, and I relished the independence that those purchases symbolized. I was always the one who could afford concert tickets or whatever new CD came out that week, and I even funded my two trips to Europe through hard work. Even then I was laying the groundwork for the work hard to fund lifestyle that you want to live mentality that I still have today.

In college work was a little bit harder to come by because I was supposed to spend more time focusing on my studies. At the same time I discovered that beer was an important reason to work and have cash on hand. I spent 2 years doing the work study building guard job and grabbing shifts from whoever didn’t want to work their own. Instead of the 5 hours a week that I was supposed to get I routinely averaged over 20. I worked that first summer at the SPAC box office doing the best job that at I have ever had. My second summer was harder since I was taking Organic Chem over because I loved it so much the first time. I somehow managed to work full time at SPAC, full time as a pharmacy tech at a hospital while still doing well in my class. I would routinely leave the house at 5am and return at 11pm, but I made it work and apparently a monster was born. The rest of college was spent bouncing between retail pharmacy chains working 10-30 hours a week, picking up shifts whenever other interns had tests or plans. When I was on rotations I kept up the pace and at one point worked 63 consecutive days between rotation and my real job. When people ask me if I am afraid of burning out now I say no, because once you have been through what seems like the worst situation its all downhill from there.

Once I graduated I was thrown right into the fire and worked overtime during my first week as a pharmacist. From there I picked up a overtime shifts like a maniac. For the first time in my life I was making good money and was caught up in a whirlwind of greed. During the first few months I paid off my credit cards and my car while putting money away and starting in on my student loans. At that point it was pure greed that kept me motivated, over time it became a habit instead. During the first three years I worked more than 1000 hours of overtime, plus worked a per diem job on the side. That may not sound like much on paper, but that is roughly an extra 6 months of work during a 36 month period.

Now that I have reviewed my history it is time to review the potential reasons why. As I said I am often motivated by greed, either in the short term or in the long term. I work extra to support a lifestyle that allows me to enjoy myself whenever I have time off. I find that whenever I have days off I spend a lot of money. By working extra I not only make money, but am able to save whatever I would have spent. I took a pretty big pay cut when I left retail, plus I gave up all the overtime that I wanted, and my per diem job. When I switched jobs I wasn’t able to adjust my finances and kept trying to save and pay off debt at the same rate. Obviously this wasn’t possible, but I started picking up per diem shifts at Rite Aid to make up some of the difference. I was also offered a position working one or two days a month at the independent in town. I felt that this would be a good option to branch out and decided to give it a shot. These extra jobs allow me to bring in almost as much as when I was working retail full time. While I admit to greed I don’t feel that this is the whole story, there have to be other reasons.

Every work week I have more professional variety than most pharmacist have in their entire career career. Some days I work split shifts covering both the long term care and the inpatient pharmacy. I also work retail on two different pharmacy systems, often in two different states, and deal with approaches to the practice from both large chain and independent pharmacy perspectives. I like working for Rite Aid because I am comfortable with the system and since they were very good to me after I left Walgreens. If I hadn’t have taken the job working LTC then I would probably still be managing the same store I was last summer. Whenever I have to work a shift it feels comfortable, like putting on your favorite pair of boots that you haven’t worn in a while. Working at Marble Works is completely different, it is a whole new setup and a new computer system, and frankly a whole different ball game. Independents have to play differently, and with 3 stores, a DME store, and a mail order facility I am able to see a lot of different aspects of the profession. When I first became interested in pharmacy my goal was to become a pillar of the community, and working just half a mile from my apartment finally puts me in the position to help people within my own small town. Since everything is new and different I feel that I am able to step outside of my comfort zone and grow more on top of satisfying my need to diversify. I don’t know if I will be able to keep up this variety for much longer, routinely making the changes on computer systems and styles takes a lot of energy, but for now I am going to take that ride and see where it goes.

Maybe all it boils down to is compulsion. I grew up watching my dad get up every morning and drive an hour each way to do a job that he didn’t like. He kept up an attitude that at least it was better than what he did before and he tried to make the best of it. What I am doing isn’t perfect, but it sure beats working in the salt mines. Maybe that plays a role in it too, what I do is mentally taxing and high stress, but it pales in comparison to the manual labor that millions of Americans do every day. Working so much is a cure for idle hands and keeps me motivated and pushing forward instead of sitting around and letting my worries get to me. I like my life better when I am busy and accomplished, when I have downtime I tend to fall apart. I am an example of inertia, I am the energizer bunny personified, as long as I am moving forward nothing can stop me.

From mowing lawns to managing pharmacies my path to absolution has always been through work. People may call me a workaholic, but I wear that badge with pride. I still find time for the things that matter in life and feel that I have more to me than just my job. By diversifying and trying new things I am able to grow as a person and as a professional, plus the money doesn’t hurt either. I may be exhausted, but I am not burnt out. Even if I was then I know from experience that the cure for burnout is a three day weekend and a few drinks with friends and I will be ready to do it all over again. This is my life, and as crazy as it can be I wouldn’t have it any other way.

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The Systemic Approach

This Post was originally published on May 12th, 2014

Last week I posted a breakdown of where my money goes, this week I decided to look at how it gets there.  I have come a long way and learned a lot about personal finance.  While I will never teach a class or write a book I think it is important for people to see how easy it can be to get your finances into shape.  Having a budget is great, but having or sticking to a budget isn’t the goal. Building savings, paying off debt, or buying something that you want is the goal, the budget is just the tool to get you there.  When you have a system in place it is easy to forget about it an work its magic. Every once in a while you need to step back and evaluate your goals and the methods that you use to reach them. In this post I am going to detail some of the systems that I have and the tools that I use to make them work.

Systems

  • The Magic of Automation- Automation is one of the biggest things in the personal finance world. The internet has given us a chance to do everything quick and easy. Every one of us has access to direct deposit, in fact I have worked at jobs where you got paid by direct deposit up to a full day before you got a paper check.  Using these kinds of tools to handle our income and expenditures we can ensure that everything can get taken care of.  We all forget something sometime, using automated systems you can help reduce your stress and assure that things are getting done. I automate most of my bills, simply because I have more important things to worry about than questioning if I paid my internet bill last week or by what day do I have to pay my heat or rent. Most companies have a way to automatically remove the payment from your account on a set day of the month, if they don’t then your bank does. In some cases, specifically student loans, having an automatic payment can even help reduce your interest rate. Twice a month money is taken out of my bank accounts and sent to my post tax retirement accounts and my house fund so that I make sure that I save for the important things rather than just spending the money on day to day stuff. While there may not be butler robots yet we certainly can harness the power of technology to lift the burden of worry and free ourselves up to accomplish other things.
  • If You Don’t See It You Can’t Spend It- On payday four things happen before my alarm goes off, I get paid, I pay myself back, I pay what I owe, and I save for what I want.  I get my check through direct deposit, a chunk of my pre tax income gets put into my 403b to save for retirement, I automatically make payments on my car and my rent is sent to my landlord, and a few dollars are put aside for my travel fund.  By not ever seeing this money then there is no way that I can convince myself that I have better uses for it.  Budgeting is like buying a large pizza by yourself, you start off with a plan to eat some now and save the rest for later, but sometimes the slices that you have planned to save for tomorrow never make it to the fridge.  You have an immediate need, whether it is eating that slice of pizza because you are hungry, or buying something that you saw and wanted.  We all slip up sometimes, and it is easy to see a full bank account and trick yourself into over spending, the best way is to have a system in place to take care of it for you without even knowing that it happened.
  • Emergency Fund: I spoke briefly about an emergency fund in my previous post. I am a firm believer that shit happens and it is better to be prepared and buy yourself some time than to need to react immediately. Having an emergency fund gives you a little leeway, but you also need to dictate what an actual emergency is. Christmas is not an emergency, neither is having your car insurance come due, that really cool pair of boots that you need need NEED and it is ok because you need new boots because your other ones wore out and you might as well get these really cool ones is not an emergency. These are expenses that you should have seen coming, and as my good friend always says “poor planning on your part does not constitute an emergency on mine.” You should budget for these things, tapping your emergency fund for stuff that you about knew 6 months or a year beforehand is going to leave you high and dry if you do have an actual emergency.  If you have an actual emergency, your car dies, you lose your job, you need to fly out for a family emergency then don’t feel guilty about your emergency fund, just build it back up ASAP, Murphy’s Law is a bitch.  In order to help prevent tapping into my emergency cash I have even set it up in a separate online savings account, where I actually earn a much higher interest rate than I could have gotten from my local bank.  I cannot stress this enough, you need an emergency fund, start saving for one now.

If you are interested in systems I recommend simply doing a google search for personal finance systems. There are plenty of personal finance gurus out there who will gladly preach to you what you should and shouldnt do. I have found that the best way to set up my own system is to take in a whole lot of information and see what sticks. A lot of things are just fads or they push you to try and live a lifestyle that you don’t choose. I don’t recommend taking everything word for word, or taking exact investing advice (except buy silver) but if you find out what works for you then you can make an amalgamation of different systems and make something unique. If you would like information about the sites or books that helped me the most please reach out.

Tools

  • Retirement Calculator- Google retirement calculator, put in your age and how much you are thinking about saving then do your age plus 10 years. The numbers will probably shock you. You can never save enough for retirement, and the earlier you start saving, even $20 per month, the better off you are. People who wait until they are 30 to start contributing to retirement plans have to work so much harder to catch up to someone who started with just minimal contributions during college or shortly after. Our generation doesn’t generally have a chance to work 30 years at the same company to collect a pension, and social security is on pace to run out long before we retire, so we need to invest in our own future, and sooner is better.
  • Mint.com Account- Mint is an online account manager. You allow it access to your bank accounts, loans, investments, credit cards and it puts them all in once place. You are able to track your spending, and watch your net worth steadily advance. They also have an easy budget planner that automatically shifts your spending into the budget categories. I also like the goals feature where I can associate certain savings/investment accounts with my saving goals or debts with my payoff goals. Mint also has a pretty good smartphone app, I like being able to check my net worth on the go.
  • Personal Finance Books and Blogs- There are plenty of them out there, find what works for you.  If you want recommendations let me know.
  • Credit Cards- Credit cards can be a double edged sword.  I love mine and earn all sorts of points and rewards, but I also pay off my balance each month.  If I carried a balance on just one card I would basically negate all the reward points that I earn from my 4 other cards.  Also missing just one payment can drop your credit score like a rock so pay it often and pay it entirely.
  • The Interweb- There are a lot of big time finance buzz words that get tossed around. Like any specialization this jargon sounds strange and foreign to any outsiders. Don’t be fooled or discouraged because you don’t understand it, just look it up and pretty soon you will be talking like an expert.
  • Pen and Paper- All personal finance is basic math. The most complicated thing that you might have to work with is interest percentage. I enjoy sitting down and running the numbers just to make sure that I know how much I spend and where it goes.Having this hands on experience every few months helps to keep me attached to my money instead of just having it be a bunch of 1s and 0s on a computer screen.
  • Youth- Being young has a lot of great advantages.  The most important one when it comes to personal finance is that you have time to fix any mistakes you make, and time to build wealth with slowly over a long period.  I have screwed up a lot, and I still plan on screwing up a lot, but losing a percentage of my savings when I am 28 is better than losing that same percentage when I am 58.  Learn from your mistakes and get better, there is plenty of time.  *this doesn’t mean that you should procrastinate saving until later, start early and you will save more

Personal finance is a journey, one that we have taken since we got our first allowance and that we will take until we are 6 feet under. Less than 5 years ago I didn’t know anything about personal finance. I remember telling someone that I was going to put my money under a mattress and when I got too much I would buy a bigger mattress. I was able to change that by reading a few books and browsing some blog posts. Honestly I don’t even bother checking them anymore because I have heard enough to set up my own system that works and don’t feel the need to waste time reading more things that I am not going to try. By being an active participant in the journey I am able to understand my money and send it to places that fit my needs and my plan. I am also able to understand economics better and though that see how the world works and what makes people tick. I am not perfect, and I make a lot of money mistakes but I try to learn from those mistakes and grow as a person. One of these days my net worth will be positive, and some day I will be able to retire, but until then I am going to grow my cashflow, optimize my savings, minimize my debt and all those other buzzwords. But most of all I am going to enjoy my money and try to better my life because after all you can’t take it with you.

Where Did All My Money Go?

This Post was originally posted on May 8th, 2014

People make assumptions. Well at least that is my assumption. We tend to assume that because someone has X job or makes Z salary they are flush with cash. Sometimes it just doesn’t work that way. In this post I am going to break down where my money goes each month. Talking about money in our society is pretty taboo, in fact most people are more open about their sex life (or lack there of) than they are talking about their bank balance. As my previous posts on religion and race have shown I find that sometimes the most important things to talk about are the most uncomfortable. This is meant to be an educational piece that explains some of the choices that I make while pointing out to new grads that the number on the offer sheet is nowhere near the money in the bank.

A little background for those of you who don’t know me well. I am a trained professional with a six figure salary, no dependents, and a boat load of student loans. I have very moderate tastes, but tend to splurge on vacations and beer. I buy most everything on credit cards, but pay them off religiously and never carry a balance. Over the past 4 years I have managed to pay down a lot of debt while saving money, but still have a net worth that is negative by almost six figures. 7 months ago I took a job that cut my income significantly while taking away my most steady stream of side income. In an attempt to make up a portion of that income I currently work a full time job where I am salaried at 36 hours per week while picking up per diem shifts at 2 other jobs on the weekend. I acknowledge that I often do not make the best choices, but after doing a lot of research on budgets and personal finance I have found that this works pretty well for me.

So here it is, an explanation of where it all goes. All information was based on a paycheck from my primary job, all other side income is earmarked for other uses. Also when looking at state and federal taxes I do not have them dialed in correctly yet and in fact owed $1,000 to state and federal taxes during 2013. I used percentages in order to have some privacy. If you would like the actual numbers I will gladly provide them if you reach out to me in private.

Total Starting Pre Tax Income: 100%

  • 403B contribution: 7% of pre tax income. This is a pre tax retirement contribution, I had previously been putting away 5% but decided to apply my full 2% raise toward my retirement.
  • Health/Dental Insurance and Flex Spending: 2.3% of pre tax income. This relatively small amount helps a lot, as we all know healthcare is very expensive. I only contribute a small amount to the flex spending plan because I am relatively healthy, but because it is pre tax I get around a 30% return on this investment
  • Federal Income Tax, Social Security, Medicare: 25.2% of pre tax income. My income puts me in the 28% income tax bracket, but because taxation is gradual you are taxed at lower rates as you work your way up. A rough example is that if the $0-$20k bracket is taxed at 8% and the $21k-$40k bracket is taxed at 10% then you would be taxed at 8% until you hit 20k then at 10% until you hit 40k.
  • State Income Tax: 4.7% of pre tax income. Another gradual rate thanks to the great liberal state of Vermont.

Total amount removed from my check before it hits my bank account: 39.2%

The remaining 60.8% of my Pre Tax income will be converted to 100% post tax income to calculate monthly expenses.

The Basics: If I lost my job tomorrow (hopefully won’t happen) I would still need to find a way to make these payments

  • Rent: 16.8% of post tax income. I have a nice 2 bedroom townhouse apartment that is not very lavish. While it is very nice and suits my needs perfectly the rent is on the cheaper end of average for this area. It is actually several hundred dollars cheaper than my previous apartment in Burlington which was much nicer and subject to much higher property values.
  • Utilities: 4.8% of post tax income. This is a rough average of phone, electric, heat, and internet. Obviously I pay more during the winter but it tends ot average out.
  • Student Loans: 30.9% of post tax income. This is the big one, what is worse is that this number represents my payments spread over a 25 year period rather than the standard 10 years. I do chip in a small amount more than the minimum with my automatic payment in an attempt to pay them off faster. I had also been making an extra monthly payment that would equal 9.6% of my post tax income, because of the pay cut I took coming to this job I have not made this extra payment in several months and it is not reflected in any cumulative data.
  • Car Loan: 9.1% of post tax income. I took out a loan that is being paid back over a 2 year period when I changed cars last summer. I have been paying extra and it should be paid off in another 6-8 months. But instead of just pocketing that 9.1% of my income I am going to instead put it into savings for my next car so that hopefully between savings and trade in value I will not have to take out any type of loan.
  • Car Costs: 3.8% of post tax income. This is and approximation, but between gas, maintenance, registration, and misc expenses it adds up. I also work 2.3 miles from home and drive a pretty gas efficient vehicle so it could be a lot worse.
  • Misc Expenses: 2.7% of post tax income. This includes car insurance, renters insurance (less than $200 per year, its a must for everybody), professional liability insurance, professional licensing fees, professional organization dues. Some of these are not “necessary” but they are generally one time fees that keep me covered over the course of a year

The Savings: I am a saver. I set lofty goals and am trying to reach them so that I can avoid as much debt as I possibly can.

  • Extra Retirement Savings: 4.8% of post tax income. In addition to my pre tax retirement contributions I also put away a portion of my post tax salary. I don’t believe that Social Security is going to last (goodbye 6.1% of my income that I contribute as part of the Federal Tax) so I would rather be prepared by having enough money in the bank. Between the two I put almost 10% of my pre tax income, my goal is to reach 15% within the next few ears.
  • House Savings: 14.4% of post tax income. I am saving so that when the time is right I will be able to buy a house. I have a rough estimate of what I want in a house and have a savings goal in mind that will be 25% of the expected cost (20% down payment and enough extra to cover closing costs). By saving at this rate I should hit my savings goal in another 19 months. I doubt that I will be ready to buy a house in 19 months, but having the money in the bank doesn’t hurt.
  • Emergency Fund: I don’t actively contribute to this account on a monthly basis, but it is an important one to establish. I currently have 3 months worth of expenses readily available just in case something were to happen. Some people recommend 6 months or even a year, but because of the stability of my job and my earning potential I am comfortable with just 3 months at this time.

All of this adds up to 87.3% of my post tax income. Notice that this does not include food, beer, clothes, entertainment, more beer, charitable donations or any other discretionary purchases that I make. These costs can vary wildly depending on how often I go to restaurants or tear out of my clothes like the hulk so while I have maximum budgets in place I don’t have everything down to exact numbers. The remaining 12.7% of my post tax income is put to good use each month, and if I have anything left over I tend to toss it into savings or towards my student loans. I also use the income from my side work to help fund a lot of these purchases. Those check go into a separate account that I use to buy beer, or fund a dinner out, or to cover any travel expenses. I work those jobs to make extra money so that I can live the lifestyle that I want to live. Without that income I would have to cut back on a lot of expenses and savings that help fund my present fun and my future needs.

Personal finance isn’t some type of wizardry, it is basic math, spend less than you make. It helps to keep your expenses low no matter what your salary is, but you don’t have to live like a monk all the time (side note Trappist monks brew some of the best beers in the world, so maybe living like a monk isn’t so bad after all). There is no right or wrong way to spend your money or your time, but you need to find a balance that works for you. I don’t profess to be a financial professional, and except for a healthcare economics course 10 years ago I have no training in the subject. You might look at my budgets and say that I have everything wrong and that I should be following X or Y advice, but what I do works for me. I wish that I could pay off more of my student loans or save more for retirement, but those things will come in time. Specifically 22.5 more years of student loan payments and 36.2 years to retirement, not that I am counting or anything.

Maybe now people will understand that just having a high salary doesn’t equal living the high life.  I am not preaching that I am a pauper and these expenses are the result of my choices, but despite having a six figure salary I still have a lot of the same issues getting by.  Most of my friends are similarly educated and compensated professionals and I know that a lot of them have the same issues as I do.  I hope that this has helped at least one person, please reach out if you have any questions.