Two Cents: Q&A Series

Two Cents: Q&A with Stuart

Welcome back to Two Cents, a Q&A series that reveals how individuals of different ages, cities, and professions feel about their current financial situation.

Stuart is the blogger behind EpicQuiver, a personal finance blog focused on building wealth, through Stuart’s own experiences. I’m so excited to share his story with you all today!

stuart

Two Cents

Hi, my name is Stuart and I’m a surf bum currently hiding out in corporate America. I work on a variety of projects for the government and large businesses. Most of those projects contribute to the development of unmanned interplanetary robotic spacecraft technologies (try saying that three times fast). I’m not an engineer, though; I help manage the finances for the projects and do a lot of financial data analytics, budget projections, and other nerdy stuff. Outside of corporate life, I spend my free time chasing waves up and down the coast of California and working on my personal finance blog the EpicQuiver. A quiver is an archer’s portable case of arrows, and in surfing, it refers to the set of surfboards that you would take on a trip. Different boards are used for different surfing situations, and the purpose of the blog is to help readers build their own arsenal of knowledge to tackle different types of financial situations.  The blog posts focus on my saving and investment strategies that have worked for me over the past five years.

How would you describe your current financial situation?

Because of the type of work I do, I pay way too much attention to my finances. For example, I check my Personal Capital and Mint accounts every day and my credit score on CreditKarma at least once a week. I’ve even run big data analytics tools on all of my credit cards and can put together detailed charts of my spending behavior all the way back to 2012. My wife absolutely hates this, because I’m always going back and re-analyzing where we can cut costs.

My wife is the natural saver in the family. I was always good at side hustling and making extra money but I have to make a conscious effort to save, and doing the things I described above is part of my defense against my compulsive habits. Essentially, I am my own worst enemy when it comes to not saving extra money.

I have never been in “bad debt” and have always paid my loans and bills off early. I used credit cards for all of my purchases so I can track my spending patterns and also collect frequent flier points. I’ve scored at least one free international plane ticket a year for the last 11 years straight by using credit cards. I purposely pay my credit card bill every Friday rather than wait for the monthly statement, and I always round up my payments to the next hundred dollars.

Do you consider yourself to be money-savvy?

Yes and no.  It wasn’t until about 5 years ago that I really became savings savvy.  I had always contributed about $6k to my 401k for the $3k company match and paid all my bills/loans off early, but the extra cash I made each week I would splurge buying surfboards every 2-3 weeks, going to bars Wednesday through Sunday, etc.  From the beginning of my career, I was making more than I was splurging so I didn’t consciously recognize how much money I was wasting.  I also was cheap in many aspects, like sleeping on an air mattress for four years before getting a real bed. I cooked most of my meals at home except on the weekends, so things like this skewed my consciousness. One time, $13k piled up into my bank account unintentionally, so I thought, ‘Sweet! Let’s buy a used Audi!’ I then went on to waste another $6k in repairs over 8 months. That car literally broke down at least once a month on me, and because I had blown my savings on buying the car, I would have to put the repairs on my credit card and wait 2-4 weeks to be able to pay it off.  That might not sound like such a big deal to most, but like I said earlier, I hate debt and I pay my credit card weekly.  If Friday comes and I don’t have enough money in my checking account to pay my credit card, I get really anxious. It was about this time that I started realizing that I was wasting money and started making an effort to not spend as much and pay myself first.

Today I’m running like a lean, mean, high-savings and investing machine, but it’s sad to realize how much more my net worth would be right now if I hadn’t wasted so much on stupid purchases earlier on.

What financial advice would you have wished to hear when you started working?

I wish someone would have told me to max out my 401k and IRA every year and save 50% of your take home pay.  Everyone says to contribute just enough for the company match and no more.  I had never heard anyone say to max out your retirement accounts or save 50% of your take home pay until 8 months ago when I stumbled upon the Financial Samurai blog.  At first I thought this guy is full of crap; he was making like $250-$300k a year at his job, of course he can max out all of those accounts first and save so much money. Then, I stumbled across one of his posts that called me out on my BS excuse.  He started his career in New York City, one of the most expensive cities in the nation, making $45-$50k a year and from the beginning, he maxed out his retirement contributions and saved 50%. He lived in a crappy studio with a roommate for several years with a cheap foldable paper wall between them.  That’s when the lights finally clicked on for me and I realized I had no excuses.

The second thing I wish someone would have explained early on was the power of investing.  One of my best friend’s parents are well off.  They travel 80% of the year and rent three luxury apartments around the world.  For a few years, we kept trying to talk them into buying a house by the beach and stop wasting money on rent. Then one day they sat us down and explained that instead of buying a house in cash, they had invested the money and that the profits they made from that large sum of money paid for the rent on their apartments with no money out of their own pocket.  Ever since then I’ve tried to use the same mentality. For example, in 2015, I realized I would probably need a new car by 2017 because mine was falling apart. I started investing money into LendingClub and built up $26k in that account.  I bought a used 2014 Prius this past fall and the profits from LendingClub is paying for my car loan (my only debt).  I pretty much got a free car and didn’t have to give away my hard earned money.

What financial achievement are you most proud of?

When I graduated college I sold all of my belongings (textbooks, fancy road bike, and triathlon gear), bought 5 surfboards and a one-way plane ticket out of the country to Micronesia.  I left with 1 bag of clothes, 1 bag of books, the surfboards and $500 in cashier’s checks.  From there I got a job teaching English for $10k a year but only had to work 6 months out of the year. I figured out how to backpack around South East Asia, Australia, and the South Pacific on that income for just over two years. This was my first taste of financial independence.

What expense can you not live without?

I can’t live without a car. My weekends are spent chasing waves along the coast of California and Baja Mexico. I can easily burn through a tank of gas on a weekend when there are tasty waves to be found.

What expense could you potentially cut down on?

Last year, we tried out a meal subscription service and we loved it; we learned to cook with tons of new ingredients and how to utilize spices besides salt and pepper. However, when I reviewed the data for our food-related expenses (groceries, restaurants, etc) I realized our spending patterns had changed and we ended up spending double the amount of money in 2016 than we had ever spent in any previous year.

Therefore, my biggest expense challenge for 2017 is to cut our food expenses by half while continuing to enjoy gourmet meals. To do this, I canceled the subscription service and started downloading recipes off of their website.  Rather than $10 per person per meal, I realized we could buy the ingredients ourselves and average $2.67 per person per meal. I did a post on my blog about the change in our consumer behavior patterns that lead to us over spending on food last year, and I plan to follow up with updates every month with links to some of the recipes we cooked in a given week and actual costs from our grocery receipts to show others that it is possible to cook gourmet for less than $3 per meal.

What are your long-term financial goals?

I want to have enough passive income built up by 2027 to not have to work in the U.S. if I don’t want to.  I then want to move to Southeast Asia or the South Pacific for several years, where my cost of living is cheaper than the U.S.  I know that we can survive off of $10k per person per year in these countries, and if we are making $60-$80k a year off passive income the extra money can be re-invested and continue to grow on its own until we are ready to permanently settle down in the U.S. or another developed country (Japan? Australia? U.K. South Korea, etc.). Every $10k saved equals one year of non-stop traveling for one person; that’s how I view my money.

What are your short-term financial goals?

For 2017 I am looking to get very aggressive with my retirement accounts. I plan to max out my 401k to $18k and Traditional IRA to $5,500 by May/June (both achievable), and then I’ll try to put another $16k into after-tax accounts by December (stretch goal).

Closing thoughts?

The first step for anyone looking to become financially independent is to be debt free.  I’ve been very fortunate to have always been in control of whatever debt I had. Finishing college with no debt allowed me to travel care-free two years before I joined the workforce. I could have kept going longer, but I decided to come back on my own accord.  Whenever work is tough, I am always able to remind myself that I can quit right this second, sell all of my stuff and go travel for a few years. Unfortunately, most people are bound by the chains of debt and cannot experience that peace of mind.

Liked reading this? You can find more Two Cents here.

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