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 we have an interview with fellow blogger Jason from Winning Personal Finance.
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 Jason. I’m 35 and married to my high school sweetheart who’s a year younger than I am.
We have two boys ages 4 and less than a year.
We live in New Jersey an hour by train from New York City where I’ve always worked.
With my limited free time, I love outdoor sports (skiing, biking, running, hiking), playing strategy games and writing about money at Winning Personal Finance.
By making careful and well-thought-out financial decisions starting in my youth, I’m now in a position to live the life I’ve always wanted.
What is your current net worth?
Based on my tracking spreadsheets and the ESI Scale Financial Calculator, I’m about 9 years from my goal of Financial Independence.
From another perspective, my family could cut a little and get by on one $15 an hour full-time job with the rest of our needs covered by investment returns. Some would consider this status barista FI or at least close to it.
How did you accumulate your net worth?
I’ve been really fortunate thus far. I was born in the land of opportunity and into a family that prepared me to succeed.
While my wife and I don’t have the exact same views on everything money related, we’ve aligned our priorities and combined energy to get where we are today. The decisions we make by finding balance between each of our preferences is often better than the choices either of us would make on our own.
Getting on the same page as your spouse is an absolute must to achieve financial success.
I’ve had the goal to become “wealthy enough to do whatever I want with my time” for a long as I could remember. Beyond privilege and luck, the single biggest factor toward my financial success is that I’ve focused on making decisions to build wealth from when I was as young as 18.
My wife and I both chose in-demand careers that paid well. We knew the power of compounding and kept our spending in check and our savings rate relatively high. We’ve invested the difference primarily in low cost index funds and have enjoyed the ride up with the bull market in the last decade.
We’ve also received two inheritances (a combination of cash and a car) worth about 15% of our net worth. We’ve driven that car (our only car) for the past decade. All of the cash we’ve inherited has been invested and none has been spent to date.
EARN
Tell us a bit about your career.
When it was time to apply to college, I applied to business programs since I felt that path would maximize my income and compliment my natural skill set. I majored in accounting because of the high demand for accountants at the time. These early decisions and the above average income that resulted was the baseline for growing my wealth.
I developed a passion for finance in school and had always been particularly interested in personal finance.
I looked into becoming a financial advisor before graduation but the jobs I’d interviewed for were all very sales focused and didn’t seem to have the analytical work I enjoyed. They also didn’t seem to focus on the client like I’d have wanted in that type of role.
Instead of going the financial advisor route, I accepted a prestigious job at a large accounting firm.
My starting salary at 22 was greater than the median US income at the time which is a great place to start. My career and earnings have progressed nicely since than with a few large steps up from promotions or job changes.
I still find it hard to be fully satisfied by my wages. My work requires me to pour a majority of my waking hours into it, and I don’t enjoy many non-financial rewards for this time. While I’m happy to earn a living in relative comfort, there are many other things I’d prefer to do with my time if I didn’t need the paycheck.
Do you have a side hustle?
I started Winning Personal Finance to be a side hustle. I’ve since realized that most of the typical ways to make money from a blog are not things I’m comfortable with right now. I’d only want to sell my readers products I strongly believe in. I’m not really compelled to push anything yet. For now, my site is all hustle and no side income.
I’ve never done much outside of my full-time job to make regular income. Since beginning full-time salaried work, I’ve been more interested in adding more free time to my life than selling my free time to earn a side income. I’d only want to work a side hustle if I was doing it for fun.
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?
I’d give myself an 8.
I’m able to comfortably support a family of four on my income in a high cost of living area. I’m happy with that.
I will say that I occasionally feel that I’m not paid well enough for the time, energy and occasional aggravation of my job. I’m paid well for what I do, I just value my time highly as well.
I’m still far from executive level compensation, which I’d consider necessary for a rating of 9 or 10.
What are your future plans regarding growing your income?
My wife left her job a few years ago to stay home with our children full time. We’re very aware of the potential income opportunity for her to go back to the workforce as our children enter school. When, and if, we take advantage of that opportunity is TBD.
Personally, I’m considering decreasing my income in the near future.
As my net worth has grown, I’ve started thinking more about maximizing my enjoyment of life than maximizing my income and net worth. My desire to become a financial advisor has not decreased during the 13 years I’ve been in the workforce. I’d like for my work to more directly help others than it does today.
It may be an idealistic vision, but I dream about sitting across the table (or video call) from a client and using my knowledge to help them achieve their financial goals. This was the vision I had of my ideal “early retirement” and I’ve realized that I don’t have to wait to be financially independent to do it.
I’m in the middle of taking the required educational courses to become a CFPⓇ and plan to sit for the exam as soon as possible.
After I pass, I plan to seek out a job in the field, even if it means taking a large pay cut.
Life is about more than maximizing net worth.
I keep saying and typing that sentence to hold myself to it when the time comes to make a change.
SAVE
What percent of your gross income do you save?
It will be around 35% this year.
How did you get to this level?
My savings rate has varied drastically during my lifetime.
It’s been as low as 20% when we became a one-income family and as high as around 80% when I was living with my parents during my first two years of full-time work.
By choosing an in-state college instead of a more expensive out of state or private one, my parents were able to foot the bill for my education and I graduated with $0 in debt.
Yes, I’m aware of how fortunate I am to have graduated debt free. It’s rare these days.
I lived with my parents for two years after college and saved ~80% of my take home pay at that time.
I used the non-retirement portion of that savings to buy a small condo that I could afford on my income alone.
My girlfriend (now wife) moved in with me and paid a portion of the mortgage so our house expenses were less than half of what we could “afford.”
We inherited an almost new Nissan Altima in 2007 and have shared it ever since. I’m 35 and have never made a car payment.
While we were fortunate (financially) to have inherited the car, the conscious decision not to upgrade it or add a second car all this time will save us millions by the time we’re at full retirement age.
We lived in the condo for five years. Our housing and transportation expenses stayed about the same during this whole time while our incomes grew quickly.
While some of our other expenses, specifically travel and restaurant dining, grew with our incomes, our savings rate remained strong by keeping housing and transportation costs low.
When we had our first son and started to pay for daycare, our savings rate took a hit. When my wife left her job, we cut our lifestyle and housing costs, but our savings rate still took another hit.
Since then, we’ve been saving a good portion of my raises which has built the savings rate back up. This strategy of saving half or more of salary increases is my simple hack to become a millionaire.
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?
I’ll go with an 8 here as well.
We very easily could have had a higher savings rate. Looking back on our lives so far, we’re both happy with a majority of the decisions we’ve made. Life is about balance and we feel we’ve received solid value from most of our spending. We fondly remember some of the splurges.
What are your future plans regarding saving your money?
I’d like to continue to find balance in my life.
If I stay the course and the economy does its part, I can expect to be FI in 9 years or so.
If I decrease my income to chase more rewarding work, it may take a little longer.
I’m going to continue to make future decisions to maximize my life’s overall enjoyment and let the savings rate fall where it may.
INVEST
What are your main investments?
I’m a huge fan of a set it and forget it index fund investing strategy.
We have 401(k) accounts, Roth IRA’s and taxable brokerage accounts. Our strategy has always been to max out our tax advantaged accounts and put anything extra in our brokerage accounts.
I did an analysis on choosing between contributing to a Roth or Traditional 401(k). Today, the Traditional option is best for our goals.
Our current asset allocation is as follows:
- 52% Large Cap US Stocks
- 12% Mid and Small Cap US Stocks
- 22% International Stocks
- 7% Bonds
- 5% REITS
- 2% Cash
All of the stocks and bonds are held in index funds at either Vanguard or Fidelity.
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?
I’m going to give myself a 9 on this one.
When most people think of successful investing, they think of one or two stock picks that have showed extraordinary returns. I don’t play with individual stocks so I don’t have a story like that.
The other thing I don’t have is a story about how I tried to pick stocks and lost my shirt. A key to being a good investor is to avoid making big mistakes.
I set a strategy I’m comfortable with. I keep every available dollar beyond my emergency fund invested in diversified low cost investments and I’ve pretty much done this my whole life. This strategy, along with the bull market we’ve all been enjoying, have led to steady growth.
I play the long game with my investments and feel great about the lifetime returns.
What are your future plans regarding investing?
I’m just planning to stay the course.
If I get to a point that I start to live on my investments, I’ll give some serious thought to a more conservative asset allocation.
WRAP-UP
What money mistakes have you made that others can learn from?
I’ve written about some of my money mistakes before. When I go back and read those posts, the biggest theme I can come up with is not taking more risks when I was younger.
I still question if I should have taken a shot at being a financial advisor to start my career. It was clearly the riskier choice but may have put me in a better place today…or maybe not.
Other items I could have taken a chance on include investing (both time and money) in further education and having a slightly more aggressive asset allocation when I was younger.
Are there any questions you have for ESI Money readers regarding any parts of your finances?
I have a few questions but they are more about my future career than my current finances. I hope that’s okay.
For those that have a financial advisor, I’d like to know what attributes the advisor has that they find most valuable. Basically, what should I strive to emulate?
For those that don’t have one, is there anything that would cause you to hire somebody to help you with your money? Are there any specific questions/problems you may have for an advisor?
Lily says
No life isn’t about maximizing net worth after a certain point 🙂 I like your idea of barista FI. If it was me without my husband’s input, I would go that route as well. I heard the CFP exam was a hard one to sit through, good luck on that!
Jason@WinningPersonalFinance says
Thanks Lily. The exam covers a huge amount of material. I’ve really enjoyed the process of studying for it. Hopefully the exam is not as hard as they say 🙂
Jason@WinningPersonalFinance says
ESI, thanks again for hosting my interview. It’s really exciting to see my story on a site I’ve been reading for years.
The Physician Philosopher says
Hey Jason, great meeting you at FinCon! Enjoyed our conversation and learning that you are going to become a CFP.
As someone who recommends financial planners/advisors only to people who need them, my biggest question would be how you plan to structure your fee model? Quite a lot has been written on how most financial independence bloggers can’t recommend a large majority of planners and advisors out there because of the conflicted way in which their fee structure is modeled. I’d be curious to know what your plans are there. Fee-only? Fee-based? AUM? Commissioned products sales? Flat-fee?
Strong work and good progress! 9 years isn’t too far away.
TPP
Jason@WinningPersonalFinance says
It was great meeting you as well TPP.
It’s funny that you bring this up fee structures. One of my many reasons for wanting to become an advisor was that I could not find an advisor I trusted with a flat fee structure to help a loved one. It seemed that all I could find out there were AUM models which were not appropriate for this individual.
I’m still a little while from starting my practice but I’d prefer to base my work on a flat retainer or hourly rate model. I have no interest in working on commission. AUM may be right for some clients but is not right for all of them. I anticipate much of the value I’ll bring to be in the advice rather than pure investment management and prefer to be paid in a way that matches the value I’d bring.
Cool Half Million says
This is one of the first Scale interview I’ve seen without a lot of $ numbers attached. What was your objection to sharing dollar values to complement the %s shared?
Jason@WinningPersonalFinance says
I understand the value of solid numbers in these interviews and am sorry to disappoint you with this one.
Using actual numbers is something I’ve wrestled with since I started blogging. On one hand, they bring significant value to the reader. On the other, I’d be giving up a bit of privacy that I’ll never be able to get back.
I’m a bit conservative by nature and decided, for now, to keep my exact numbers private.
While I’m anonymous to the world, my friends and family all know my blogging moniker.
I’ve you’ve ever read one of those “the lottery ruined my life” stories, you’ll see that there are some risks to the world knowing your exact financial position. I greatly respect those that blog with exact numbers but I just have not been able to take the leap myself yet.
Cool Half Million says
No problem! I wasn’t aware that your identity was known [since I didn’t see any information on your blog related to who you really are]. I understand how that would make a difference. Thanks for your contribution.
Phillip says
My apologies for sounding critical but numbers add tremendous value and I am personally very disappointing they are not included. As for myself, I am not volunteering to do an MI interview since I’m not interested in sharing my numbers and had a belief it was a “rule” that if you did these interviews, you’d share these valuable facts.
ESI says
It is a “rule” for Millionaire Interviews…
Arrgo says
I like your perspective. Its probably better for you to find that balance rather than obsess over every percentage point of savings, spending, and investment returns and staring at your spreadsheet every day. Sounds like a good idea for you to work towards your CFP. If thats your passion im sure you could be just as successful at it. The upside that sometimes is overlooked is that you will likely have more longevity doing it as it will seem less like real work than your current job. You could keep doing it and helping people into your 60’s and still be earning an income rather than being in a hurry to get out and retire from your current career. At your age, keep your investments on automatic and play the long game like you said and Im sure you will be doing really well in 10+ years.
Jason@WinningPersonalFinance says
I hope you’re right on the longevity angle. Staying my current path is lucrative but not very rewarding otherwise. There’s something to be said for following your passions. It’s certainly a bit scary contemplating going back to being entry-level and supplementing the lower income with savings to cover living expenses. I’m thankful that we focused so much on savings in our 20’s that gives me a solid safety net to take a risk and try this new career.
Whataboutbob says
This interview brings little value to me without income, housing or net worth information. Why cant it be shared what he does for a living? Even without salary information there would be value in understanding his work experience since graduating. Reads like a long advertisement for his blog.
Jason@WinningPersonalFinance says
I can understand that. Sorry to disappoint.
For what it’s worth, I started my career at a large accounting firm making ~$50K p.a. 13 years ago. I’ve spent the majority of my career in “middle management” within corporate finance departments.
I live in a modest single-family house in an expensive New Jersey suburb of NYC currently valued between $400K and $450K.
Hope this adds a little more color.
Jay says
These interviews lose a lot of substance when the interviewee cant disclose any numeric numbers.
A good salary can mean 80k or 300k depending on who you ask.
I was not understanding why this was posted until he said he had a blog. I get it, some bloggers are not comfortable disclosing that when they are still employed, even though they are anonymous.
It would still be good to know what Net Worth and Salary within a Range:
Ie Net worth +/- 250k
salary +/- 100k
Example
Net worth is between 500-750k
Salary is between 200k and 300k
J says
Hi, this is the worst interview I have seen on this site because you did not disclose any details. ESI, please do not waste our time with these responses in the future. What makes this site valuable is the data that was not disclosed. Jason could have disguised his identity and location.
Dr. GFG says
I agree with the view that these interviews are far less useful when numerical data is not disclosed. If there is a concern about anonymity, why not create a new profile or username. I plan on conducting a millionaire interview sometime in the future (assuming the author of this website is still interested). In my attempt to preserve anonymity, I will change some information (geographical, slight tweaks to facts, et cetera), so that I can divulge – maximally – numbers that make these interviews insightful and meaningful.
Sunny says
While having numerical data may add some value, let’s be adults and respect everyone’s right to privacy. There are 30 something ESI scale interviews with numbers to read if that’s what is most important to you.
What’s more important is reading and learning about the financial behavior of the interviwees that got them here.
Now on with my actual question. You’re 35, why allocate anything to bonds?
I am 33 and folks at Bogglehead suggested a bond allocation, I disagreed but am curious for your POV.
My investment risk tolerance can be described as responsible aggressiveness
Jason@WinningPersonalFinance says
I agree that adding the hard numbers would have given some additional perspective. I hope that what I was able to share added some value. I appreciate ESI allowing me to share my story without them.
Great question on the bonds. Having them in there is certainly not the optimal way to maximize wealth. I’d prefer to go 100% equities myself. The bonds are held in my wife’s 401(k) account. Each year when we do an investment review I suggest trading the bond in for cash. The truth is, not everybody is comfortable with a 100% equity allocation and this setup helps her sleep a little better at night.
Chuck Kohout says
I have noticed that the Bogleheads tend to promote the simplicity of indexing, but then get wrapped up in lengthy analysis of bond markets, which are hard to understand and have many hidden risks. I am 53, and the only bonds I have are some munis for a “cash equivalent”. Good interview even without the number details.
DaveS says
You can’t put a dollar value for having a mom or dad stay at home for the kids IMO. Good for you. It will have an impact on finances but I’m sure glad we did it. My wife went back to work when my kids went into college FWIW.
Keep it up.
Jason@WinningPersonalFinance says
We’ve felt truly privileged to have the opportunity for her to stay home. Before having kids, she was a very career driven person and neither of us were expecting her to be a stay at home parent. Life sometimes turns out differently than you expect.