Today we continue the ESI Scale Interview series where people answer questions about their success at working the ESI Scale.
In short, the series focuses on what the interviewee is doing in the areas of earning, saving, and investing. They also get an opportunity to ask ESI Money readers for suggestions if they choose to do so.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
Today’s interview is with Chris who writes at Duke of Dollars.
With that said, let’s get started.
My questions are in bold italics and his responses follow in black.
OVERVIEW
Please tell us a bit about yourself.
I’m still a young Duke in the early stages of building my financial kingdom, living in the suburb of a large city within the US.
Even with the urban environment, I regularly take trips to surrounding rural areas to enjoy the beautiful overlooks, parks, hiking trails, and other outdoor activities that keep me thriving throughout the summer. Nature has really been one of the best ways for me to transition from the consumer lifestyle thrust upon us in the US, and enjoy the frugal lifestyle of free experiences. Many of which lead to mesmerizing picture for the fam.
My passion for personal finance came from a very simple conversation with Jack (our Sr. Personal Finance Guru) that introduced me to Sharon’s Muffin Calculator. Making a long story a bit shorter, he informed me of the reason he kept a sports bottle of water in his car to drink on the way home. Stopping and buying a bottle of water every day (after work for example) would contribute a total of $10 per week or $7,200 in 15 years of expenses; contrarily, you could invest that same $10 a week for 15 years at a 5% return to accrue $11,000 towards your net worth instead!
This silly Muffin Calculator was the main contributor to one of my life’s epiphany moments: small daily or weekly habits lead to large results in all areas of life.
Well luckily for me, thanks to this conversation with Jack, I changed my mindset towards money.
Although the Muffin calculator convinced me of frugality, it isn’t the only reason my life goals had changed. My family’s bankruptcy and other financial hardships (like not being able to pay for room & board while in school or enjoying rice & barbeque sauce for dinner) ushered me towards a very simple, yet important future. A future I was in control of, one that I wouldn’t have to worry about money or rely on an employer for my livelihood.
In not so many words, Financial Independence (or a very strong and decorated financial kingdom)!
What is your current net worth?
My current net worth has been flirting with the ~$50K mark. That has all happened in less than a year, because on June 29th, 2017, I finally made it to GREEN on the balance sheet. It was my first time having a positive net worth!
Typing that out for an interview has me ECSTATIC! [Jack: so proud of my bro!] For someone with student loans and an auto loan (because my first paid off car was unfortunately totaled in a wreck), the sacrifices made to max out my retirement accounts straight out of college has been a wonderful process. Eventually, those suckers (loans) will be paid off!
Since I’m still in the early stages of going full adult mode, the breakdown of my net worth is quite simple:
Liabilities:
- Student Loans: ~30K
- Auto Loan: ~8K
Assets:
- Investments: ~75K
- Cash: ~13K
Net Worth = Assets – Liabilities
~50K = (13K + 75K) – (~30K + ~8K)
Each month, if all goes well, I’m increasing both cash & investments, while making a small additional payment to my student loans. Jack and I call this the alternative student loan pool approach.
How did you accumulate your net worth?
There are really three main factors that have allowed me to increase my net worth each month: living frugally, having a salary around 2X the average for my age range, and knowing my “whys”.
Frugality:
Tip #1: Drying Racks
I’ve lived in an apartment since graduating from high school, and after receiving my degree – I have never paid to dry my clothes. Drying racks are worth the investment!
Tip #2: Rice Maker
One pound of rice makes a ton of meal servings at a very low cost. I tried making it without a rice cooker just once…since that catastrophe ended, it has been worth every penny!
Tip #3: Grocery Shop Based on Sales
I was laughed at by my best friend for this one, but one time the Chicken Tenders and Chicken Breasts were on sale at the grocery store; they were not half, but 66% off regular price! I bought so many that two packs had to be cooked that weekend because they didn’t fit in the freezer!
I understand the importance of budgets and sticking to them – more importantly taking advantage of a sale might make you miss a budget for the month, but oh my did the budget appreciate it in the months after :).
Salary:
Not much to say on this one, I had an awesome opportunity straight from college and studied for months to tackle the interview. Ever since then, I’ve followed the make sure you stick out, network, and manage your career mindset. You are the executive of your life!
“Whys”:
My goals revolve the high priorities in life: First, the people I love (family & friends). Second, the future generations who need our advice to grow. Third, self – the criticality for me to grow and live by the scorecard I rate myself on.
Goals, habits, and execution help me wake up on the days I didn’t sleep much, my nose is running, or those nights’ deadlines are creeping upon me. They drive the sacrifices and motivation to reach FIRE, letting my money do the talking through actions in the future.
EARN
Tell us a bit about your career.
My annual income has been on average, ~75K over the last few years. For someone in their early twenties, this was definitely not my plan.
It all started in college working in on-campus jobs and/or internships while taking a full roster of college classes. There were barely weekends that didn’t have me on the schedule, and these experiences working with fabulous people lead to the development of marketable skills early on.
From there, I transitioned to work in for a mid-sized company, where hard work and networking paid off!
Do you have a side hustle?
Last year I made ~2,500 in side hustle jobs from freelancing in my field.
This year, we plan on turning Duke of Dollars into a side hustle. An entrepreneurial effort that will last a long time!
Why? Our passion and we feel that taking it more serious will help more people in the world!
If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?
7
There are times I watch too much Netflix, read random fantasy books, or other activities that don’t really add to my earning column. Consuming vs. Producing – a battle we all face some days.
What are your future plans regarding growing your income?
Short and sweet: Duke of Dollars and promotions!
I’ve read ESI’s career series, researched on how to manage my career, and started to ask for coaching from mentors.
We’ve begun investing into Duke of Dollars to take it to the next level; the personal finance community has been very helpful so far in the process!
SAVE
What percent of your gross income do you save?
~45% per year
How did you get to this level?
Budgeting:
This fundamental step of tracking income and taking control of where it goes each month transformed my savings rate. I encourage you to start today!!
Sacrificing:
- I haven’t bought new clothes (for the most part) in 1.2 years.
- My apartment furnishing was given to me in college…I haven’t upgraded.
- Air conditioning in the Spring? Thing of the past. Open windows at night + closed during the day = LOW electricity bills.
- Reading books from the library, walking on free nature trails listening to free podcasts, writing blogs on money? These are my staple frugal hobbies.
The list goes on!
Living for experiences instead of materials:
Traveling, especially for free from points earned with credit card bonuses, has made me considerably happier and cultured in the last few years. If there is one thing that I could save more on, but never regret, taking a trip to immerse myself into new experiences.
It is really important that you save, invest, but also celebrate! These celebrations or trips with unforgettable experiences keep your spirits elevated through your kingdom roadmap adventures!
If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?
8.
Saving 45% percent has been a tremendous personal achievement for me. I’m thankful to have the personal finance community with me on this, they help me remember that it’s OK to sometimes be save crazy lol!
What are your future plans regarding saving your money?
Once the Debt armies have been demolished, I’ll be taking that extra money to use for making money. I want to diversify my income streams with investments in a non-retirement portfolio, small business investments, REITs, and other side hustles that lead to passive income.
Calculated risks will be taken and used wisely so while I sleep, my money is working hard for me!
INVEST
What are your main investments?
- Traditional IRA: 10K – Vanguard Growth Dividend Index Fund
- Roth IRA: 15K – Individual Stock Holdings (Companies like Microsoft, JNJ, TGT)
- Traditional 401(k): 50K – Index Funds with low expense ratios (US Stocks, Foreign Stocks)
- This year introduced a new HSA account to the mix, which will be invested in as well this year.
I’ve performed at ~24% returns since my first investment (according to Personal Capital). The bull market has been good to all of us!
If you were rating these results on a scale of 1 to 10 (with 10 being best), what rating would you give yourself and why?
8 – Focusing on maxing out these has really helped me grow my net worth in the bull market.
What are your future plans regarding investing?
I’ll become better at analyzing individual companies within the S&P 500 and Dividend Aristocrat groups for non-index fund money, but my portfolio will always consist of mostly index funds. REITs will be added for some diversity in the future.
The plan is really to continue investing in retirement accounts, grow my income to by paying off debt, hustle more, and get promoted! The extra money will continue to add new assets to the Kingdom’s balance sheet, leading to higher net worth in the long run!
WRAP-UP
What money mistakes have you made that others can learn from?
College Student:
The biggest lesson I can give to those still in college or are starting college – don’t waste your summers by working hard and spending all the money! Use it to reduce the loans you have to take out, helping you invest earlier – time is your biggest asset!
Secondly, I recommend to those same college students to take advantage of online scholarships. There was an article after college that popped up on the news feed, a young lady made it through college debt free by applying to EVERY single scholarship she was eligible for.
She won many because no one else even applied. This use of time would have helped more than all the Call of Duty hours I racked up during my college years.
Everyone:
Change your mindset.
We all have situations in the lives we live; it is true that it sometimes those situations are not our fault. My lesson learned is taking responsibility for them. Once you understand that where you are is a result of the decisions made in the past, you will begin to make better decisions (utilizing rational thinking and mental-models https://mentalmodeldictionary.com/) for your future starting now.
Bankruptcy changed my life – I felt alone. I felt lost. I felt like a victim!
Now? We are Dukes – taking control to build the financial kingdoms we all want in our lives!!
Are there any questions you have for ESI Money readers regarding any parts of your finances?
What side hustles have you had the most success with and are there any you recommend that are worth the hours spent on them?
What are favorite frugal activities you’ve found since joining the FIRE race?
Lily | The Frugal Gene says
Awww this is such a cute interview! You’re so passionate about personal finance and it reads like it. A 45% savings rate on $75k is truly impressive! You should be at $100k by the end of 2019 if the market hums along. And they (like ESI) says the first $100k is the hardest and it’s soooo very true.
My favorite frugal activity hanging out on Twitter with bloggers because it’s free and takes up all of my time. (Jokinggg…kinda.)
Chris @ Duke of Dollars says
Thank you Lily!!! 100K by the end of 2019 would be lovely – plus between you, me, and ESI readers – if all goes well I will be able to pay off one of my student loans by the end of August!
You’re Tweets crack me up 🙂
The Physician Philosopher says
Sounds like you are doing great! Your net worth is heading in the right direction. I can’t wait to be on the positive side of that equation. Medical school loans are no joke. Maybe then I’ll give ESI a shout for one of these interviews.
I appreciate your insight in wanting to look back and help those coming behind you. I have the same goal, but for the medical community.
My favorite side hustle is my website, though it’s not profitable yet (hope to be by end of first year). My most interesting side hustle is creating an invention in my field. Really interesting process. My most profitable side hustle is expert witness work. I imagine that this exists for most fields, but not sure how attractive it is outside of medicine.
I hope to add real estate to my side hustles at some point, but am waiting for my student loans to be gone before I venture into that business!
Keep up the good work,
TPP
Chris @ Duke of Dollars says
What does expert witness work mean to you? As in, what do you do for it?
I’d love to hear more about your invention – you are definitely hustling! It shows that you will definitely be in the positive net worth side soon!
Thanks for reading and sharing some of your side hustles!!
The Physician Philosopher says
It’s legal work where I work as an expert witness as a physician. Really interesting work.
Once the invention is purchased maybe I can share 🙂 flying to the mid West soon to speak directly to a possible buyer.
Chris @ Duke of Dollars says
May the force be with you!
RE@55 says
Cooking at home is our best frugal activity. Since you like rice cookers, I suggest getting a electric pressure cooker or slow cooker. You throw meat in and pour in a jar of salsa and push the on button and you get great meal to go with your bowl of rice. It is healthy and a great way experiment. There are a ton of slow cooking/electric pressure cooker recipes on the internet.
Chris @ Duke of Dollars says
Thanks for the tips!
I have the slow cooker but should utilize it more, good reminder.
What do you like about your pressure cooker?
RE@55 says
I can cook pork shoulder in 25 minutes on the pressure cooker. I cut them up into 2 inch cubes and throw in jar of salsa or bbq sauce. Slow cooker takes 4-6 hours. There is a debate on flavor online. We have tried both and like both. Depends on your time. If it is close to dinner time, use pressure cooker. If you want to drool for 4-6 hours in anticipation for a delicious dinner, use slow cooker. Ha ha.
What’s nice about this, on a weekend you can cook it up and have food for the week.
Chris @ Duke of Dollars says
Lol! That’s awesome thank you for sharing this. I’ll have to look into it – I’ve been putting off a lot of appliance purchases as I’m in a small apartment for now, but looks like this one might be worth the space 🙂
Mr. Rational Buck says
Great interview! I can definitely relate – I’m a recent college graduate myself and just entered into the personal finance blog community.
Such good advice for college students. Like you said, as I look back on the hours I spent doing frivolous things, I think about how I could’ve made my current situation a lot better instead.
Thanks for your interview!
Chris @ Duke of Dollars says
How is it going so far?
I did as well. So many hours on call of duty lol!
Thank you for reading !!
Mr. Rational Buck says
It is going very well! I simply love sharing my story and learning from others. I have a lot to learn, but the community is very helpful.
And yes, Call of Duty has been the ruin of many college student’s GPA (including my own, haha!).
I’ll definitely be bookmarking your site – can’t wait to read more of it!
Chris @ Duke of Dollars says
The community is so awesome in the personal finance world – we have learned so much from them too.
Really glad to hear it is going well and same here lol! I just subscribed to yours and look forward to reading your articles.
Mr. Rational Buck says
Thank you very much! It’ll be great to hear your perspective on the posts!
Mark Dias says
45% savings rate. — That’s pretty good. I think my max was about 40%. You will be up in the million dollar range in no time.
Chris @ Duke of Dollars says
That’s great you did so well. I certainly hope so, life can happen though eh? I’ve been working to think ahead on what in the world could happen and how to reduce those risks, we shall see 😀
MI 60 says
I saw your comment on my interview this week so I thought I’d return the favor. From your interview I gather that you are in your early 20s, have an income of about $75K, and a net worth of about $50K. At my age I have to mentally take a trip in the “wayback” machine to get a feel for this.
Looking at the $75K salary – by using a calculator for individual income percentile in the US, that puts you close to the top 20% of wage-earners. We’re not just talking about your age group. but for everyone. That’s quite impressive. Wait until you reach your peak earning years.
Looking at your net worth of $50K – by using a calculator for net worth by age in the US, that puts you in the top 12% for your age group – another very impressive number especially considering you are still in the process of paying off your student loan.
Congratulations and keep up the excellent work!
Chris @ Duke of Dollars says
That’s really humbling to know that you took the time to look into this, those numbers are really crazy for me to see. I’ve looked up the median age and income percentiles before, but every time it just reminds me how fortunate it has been so far. The global rich list always helps to give perspective as well.
Thank you for the compliments and it is all the little habits adding up day in and day out that really make the difference over time.
Jason@WinningPersonalFinance says
Keep up the good work. You sound like you’re crushing it right now.
My favorite frugal activity right now is to bike ride with my son in the child seat on the back. I get quality time with my son, exercise and fresh air all at once.
Chris @ Duke of Dollars says
Thank you Jason!!
That sounds like a wonderful activity – thanks for reading !!
Sean @ Frugal Money Man says
Awesome interview, and great work!
Our net-worth seems to have grown similar to yours, where we were a little over the green a year ago but are now getting close to 100k!
And it is a direct result of the advice you gave at the very end…
“Change your mindset.”
That is really what it comes down to, it’s that simple. Keep crushing it, and I look forward to hearing how your story grows!
Michael CPO, From the Far Side of the Planet says
I wish I had started investing earlier or at least knew how … these blogs are great for young folks … save and invest now … so you can live like kings later is okay advice … Michael CPO