Lazy Man and Money

My Biggest Money Mistake

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My Biggest Money Mistake

For whatever reason, people love to ask me about my biggest money mistake. Other bloggers will ask it when they are compiling a top ten article. For a few years, I had gave some answers, but I didn’t have any strong conviction behind them. There was a brief period of day trading after college. I also bought a convertible after college. Basically, the “after college” time wouldn’t make many of my financial highlight reels.

However, in hindsight, I don’t think either were big money mistakes. I didn’t lose too much day trading and I learned a lot. I still have the Mustang convertible today (20 years later) and have paid roughly about $1400 a year (or a little more than $115/mo.) for it. Things could have been a lot worse.

I think it’s difficult for many people to talk about their biggest money mistakes. In about 99.9% of the cases, it is because they are embarrassed that they made the mistake in the first place. I’m finding it difficult to write about my financial mistake, but for a completely different reason. My biggest money mistake comes from a situation when it’s considered a “good problem to have” such as having two great starting quarterbacks or being at a great buffet and realizing that you only have one stomach. (Does anyone remember buffets?) Because most people would love to have this kind of problem, it may sound tone-deaf. If so, I’m sorry in advance.

I Saved Too Much for Retirement

For years, I made it my mission to max out my retirement accounts the best I could. As a software engineer, I was pretty successful. As a blogger, less so. My wife, as a pharmacist was able to max out her retirement accounts as well. It turns out that if you max out your retirement you can have a million dollars in 20 years. Neither of us are there, but, as you can imagine with our retirement accounts are not small. Given the stock market run of the last decade, maybe a lot of people find themselves in this situation.

In general, putting more money into retirement accounts is a smart move. You get to delay paying taxes during what is, for most people, their peak earning years. Then you can pull out the money and pay taxes on the smaller amount because you don’t have your main income. The downside to most retirement accounts is that you can’t easily access the money until you are older, typically around age 59.5.

Having too much money in the future isn’t the problem. The big money mistake is that the money we have access now is 7% of that retirement nest egg. That’s not a lot of liquid cash.

I should have planned it so that we set aside 35-45% of the money to use now and 55-65% that we can use later in retirement accounts. It’s a lopsided situation, where it feels like we are just getting by now, but are set up to have a lot more money in the future.

That’s why we stopped retirement contributions, with the exception of Roth IRAs. We continue to contribute to Roth IRAs because we can pull those contributions out at any time without a penalty. In fact, the ability to do this may turn out to be very important in the future, but we’ll put that aside for the follow-up article.

There was another reason why we put so much money for the future. Simply put, we could. We didn’t have kids for a long time, so the dual-income, no kids gave us a lot of financial flexibility. More importantly, we have my wife’s military pension and rental properties to help supply income before retirement. Unfortunately, we still have to wait five years for the mortgages on those rental properties to be paid off. They won’t produce income until then.

There’s one other “problem” with this lopsided situation. When you combine a pension, rental income, and a big IRAs it has the potential to lead to a high tax bill. The IRA disbursements are taxed as regular income which may be 37%, or (much likely) even higher in the future. I’ve forgotten a lot of math over the years, but if memory serves, the commutative property of multiplication means that it doesn’t really matter when you pay the taxes, you just want to pay the lower amount. If we had invested money in a regular taxable account, it could be subject to long-term capital gains rate which maxes out at 20%. The money could also be invested in a way that paid qualified dividends that would realistically max out at 15% for us. (You need over $500,000 in qualified dividends a year for a married couple to get to the 20% range.)

If we could pay taxes of between 15-20% it would be a lot better than paying taxes of 40%.

Fixing My Biggest Money Mistake

Sometimes there are problems you can’t fix. As the saying goes, you can’t put the toothpaste back in the tube.

Fortunately, in this case, there are some things we can do. OThe solutions that I initially found were less than ideal. However, with a little more time and focus, I think I’ve found some ways that it won’t be so terrible…

… but that will be an article for another day. Update: Read Fixing My Biggest Money Mistake.

Where Do We Go From Here?

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Where Do We Go From Here

One of the best hours of television ever created was the Buffy the Vampire Slayer musical. The big plot was a demon came and made all the characters sing their deepest secrets. By this time in the show’s arc, every character is in some kind of turmoil. They defeat the demon, as they always do, but all is not well. With all the characters singing their secrets all the dirty laundry is revealed for all to see.

You can feel the depression in the last song, Where Do We Go From Here?



If you don’t want to watch, here are the relevant lyrics.

Where do we go from here
Where do we go from here
The battle’s done,
And we kinda won.
So we sound our victory cheer.
Where do we go from here.
Why is the path unclear,
When we know home is near.

I know what you are thinking, “Cool story, Bro! But… what’s the point?”

I’ve had this song in my head for a few months now… because I feel like we’re living the lyrics.

The Million Dollar Email

A few months ago, I wrote that we were waiting for the million dollar email . If you missed it, here’s a quick summary:

My wife is military and has been up for promotion for about 10 years now. It’s been a big rat race as they keep moving the goal posts. One year it was get a certificate (that’s been compared to passing the bar). After that, it was, “Yeah, we know you have a Pharm. D, but we want you get an MBA.” That lead to essentially doing two jobs for a few years. After that they wanted her to lead some committees, so she became an officer at the top pharmacy organization. Then they said it wasn’t related to her military work, so she had to climb the ladder to become president of the 6,000 officer corp. Which of course, she did, and we get to meet VPOTUS Kamala Harris in a couple of months.

You get the picture. We figured that this would be the year that she’d get promoted. Enough is enough. This was the last shot. If she didn’t get it, it was time to retire and maybe run the social media for Lazy Man Media.

It was a little stretch to say that a million dollars was on the line, but if she got the promotion she wouldn’t have to do all the extra work (she could “coast” just doing her base job). She would stay on for three more years to maximize her pension at the new rank (they use the highest salary of 36 months to figure out the pension). That’s a lot more money now, and a higher pension is tens of thousands of dollars for decades (hopefully). In addition, we could continue to get some big active duty discounts that we enjoy. It does probably fall short of a million dollars, but not by too much.

I bet you are smart enough to put two and two together…

… the promotion didn’t happen once again. This time, they had to admit to systemic problems in their structure. They have too many officers that rank too high, so they need some to retire first. However, they prevented anyone from retiring last year because it was all hands on deck for COVID-19. For years, they haven’t been recruiting people, so they told the officers that if they want to be promoted they should recruit others to make the bell curve look better. A lot of people got a laugh when I pointed out that they are on a slippery slope of becoming a MLM scam. It’s a tough situation all around for a lot of people – even for the people making the big decisions at the top.

Where DO we go from here?

That’s been the common question, I’ve been asked. Some people have congratulated me on the retired wife. (That felt awkward, but I guess that’s a positive way to look at it.)

It turns out that my wife can’t even retire this year. Well, she can, but it would be weird. The presidency that I mentioned above doesn’t end until next July, and it makes since for her to be working while she’s helping with the worker conditions. So it’s one more year. Except that maybe when the promotions come out at the end of July she’ll get promoted then and we’ll change course.

One good thing about the “one more year” thing is that it gives us time to plan. We’re looking to have a year’s worth of expenses saved in cash and we’re only halfway there now. There are also strategic times to retire such as when you complete a year of service because the pension is based on years worked as well. The discount that our kids receive from school comes about once a year. We would want to time it after that to get one more year of reduced rates.

There are a lot of moving pieces and right now we are a little too busy to figure it all out. The good news is that we have another 7 or 8 months figure it out. Look for another article at the end next June that gives more detail on what our plans are.

How to Teach Your Teen Investing

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They say that best writers steal ideas from others and make them their own. I’m not sure about stealing, but I have to admit that my ideas come from the input of others. That can be from books, newspapers, blog articles, television, essentially any media. Usually, making them my own involves adding some of my own thoughts, opinions, and commentary. (On very rare occasions it involves adding comedy.) Occasionally, the idea is so good, I don’t have anything else to add – I’m simply pointing to it to make you aware of it. This is one of those cases.

Today I’m stealing borrowing from Jonathan of My Money Blog. I’ve been reading his blog for more than 15 years as it inspired me to create Lazy Man and Money. He flies under the radar in the personal finance space. However, his research and content is always top-notch. The latest example is a gem from NPR’s Planet Money. They’ve had a “summer school” where they taught investing at a basic level.

If you are new to investing, this will be a great listen. However, I agree with Jonathan that it would be a great course for my kids when they are teenagers. A small sliver of why I’m writing this today is to document it and hopefully see it a few years in the future to revisit with them.

How to Teach Your Teen Investing

Jonathan’s article, Weekend Listening: NPR Planet Money Summer School Investing Edition, lays out the course’s syllabus:

  • Episode 1: The Stock Market
  • Episode 2: Index Funds & The Bet
  • Episode 3: Smooth Spending & The 401K
  • Episode 4: Bonds & Becky With The Good Yield
  • Episode 5: Bubbles, Bikes, & Biases
  • Episode 6: Crypto & Commencement

I have to admit that I haven’t listened to the whole course. It’s not designed for the personal finance blogger who has been investing for thirty years. If you feel like you know the basics of investing, you may want to skip this course. That’s why I’m targetted it towards teens for the readers here. (That’s also an idea that I stole from Jonathan.)

You can get the whole podcast at Planet Money Summer School. I’m not a podcast person, but I’m guessing you can get it through the mobile app of your choice by searching for “Planet Money Summer School.” Each episode is a little more than a half hour long.

When you are done, there is a the final exam. I took the exam before listening to the episodes and only got 5 of 8 correct. The ones I got wrong were historical or based on nomenclature, where I knew the concept, but not the precise term for it. Give it a try and see how you do.

Is this the perfect way to teach investing? Nope. My kids are 7 and 8, so I have a few years before the teenage years. I don’t imagine they’ll want to listen to this podcast without some kind of carrot stick. However, I do believe it can be one of the tools in your toolbox if you want to teach your kids about money.

Looking for something else? This investing course is actually season 2 of the Planet Money’s Summer School. Season 1 covers Microeconomics concepts.

Passive Income Update: August 2021

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Passive Income Pyramid
My Passive Income Pyramid

September is here and the kids are in school. That means I should have fewer kids and dogs to care for, which will mean more writing here. Much like the July numbers, the August numbers were amazing because I boarded every dog in the world. We’ll get to that in a bit though. There’s a reason why it’s “personal” before “finance.” Let’s get to the personal part with a life update.

Life updates in this space are almost always positive. To write this section, I go through my phone’s pictures over the last month and I take pictures of the good times. Usually, when bad things are happening, I don’t stop to take pictures of them. So keep in mind that you are seeing a highlight reel and it’s not like everything is great all the time.

This August was so busy with dog sitting my wife ended up taking the kids to some of the events. They went to a local water slide that wasn’t great, so they went to a much better water park a little later in the month. My wife was helping run an event at a golf tournament and brought my 8-year-old. Of course, he won a big basket of chocolate in a raffle. Chocolate is his favorite thing in the world. She also brought the kids on their first fishing trip with her father and they both caught fish. I was a little sad to miss these events, but sometimes it was nice to be have some time to myself have some time with a million strange dogs. My wife works a lot, so it was good that she got this time with them.

The kids continued their specialty camps. My older boy (8-year-old) did another cooking class. My younger boy (7-year-old) did art. The 8-year-old wanted to switch camps at the last minute, so we canceled one and tried another. However, that camp canceled on us (not enough enrollment). With my wife and I were both working, we turned to some of what I call “fun home school“. He did a few worksheets, some Tynker.com programming, and MoneyTime Kids, with some breaks in between for TV or recess. The TV breaks were Science Max on YouTube. (The MoneyTime Kids was also a push for myself to develop Kid Wealth to be ready for official launch.


My favorite art of my 7-year-old. It always makes me laugh. A dragon coming out of another dragon’s eye, but he’s upset because his watch is broken.

We went to the beach a few times – sometimes in the evening for a concert or event, sometimes during the day. We got to the military base’s Officer’s Club a few times. It’s a restaurant with a fantastic view and very, very cheap prices. They had food trucks and fireworks to say goodbye to summer. My wife got us invited to a somewhat exclusive beach club for a pharmacy convention. My 7-year-old got invited to the most exclusive beach club, famous for the Vanderbilts and Astors memberships. It was so exclusive that we couldn’t go with him. He said it was boring as it didn’t have a water slide.

That’s enough of the personal stuff… let’s start the Passive Income report. I used to call this the Alternative Income Report, but everyone loves passive income better. While I transition to the new terminology, there may be some “alternative income” mentions including the FAQ. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions.

The way I calculate these numbers requires that long explanation – it isn’t intuitive at all. The reason why I do things a little differently is that this catalogs a journey. For example, we don’t have passive income from our rental properties while we are paying down their mortgages. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month you see that the bank owns less and we own more. When we get to owning 100% there will be no mortgages and all that rental income can be used for living expenses.

Lazy Man’s Passive Income – June 2021

I categorize our passive income into 3 main sources that are largely represented in my passive income pyramid. For this report, I ignore the bottom section, “career/job” – that’s not passive at all. (I do have some income in that area, but that’s not the focus of this report.) I combine dog sitting and blogging into one section of “somewhat active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

I continue to see growth in the dog sitting business. That’s what happens when everyone gets vaccines and goes on vacation after getting a pandemic dog. Here’s the growth by month:

April: 447% (March was almost non-existent because of few vaccines and travel
May: 27% (Most I had made in a month in 5 years)
June: 65% – Destroying the May record
July: 49% – Destroying the June record (more than all of 2020)
August: 17% – almost half of all of 2019 (pre-COVID numbers)


Eight-year-old enjoyed cooking camp and knows his way around a kitchen very well now

We’ve consistently had dogs which has been a game-changer. In the past, I’ve averaged one dog a day. We’re up to 3.5 dogs a day on average now and I charge more (mostly to limit the number of requests). My wife encouraged me to print business cards a few months ago. However, during the summer months, I essentially have all the business I can handle and I’m turning dogs away. I’m not the only one though. Sometimes another sitter will text me if I have availability because they are too full as well.

In the past, I have written that dog sitting is passive-ish income, which is why it is on this report. When it is one dog a day on average, it is passive. At this new level, it’s active, active, work! Coordinating schedules with other dog owners and Meet and Greets takes a lot of time.

Dog sitting is starting to go back to being passive in September. It’s looking like we’ll get fewer dogs with kids go back to school and families traveling less. Beach town tourism disappears in the wintertime. We had a busy Labor Day weekend, but we’ll see what happens after that. I think I’m more popular than I was before this summer, so maybe I’ll continue to be busy.

That’s a lot of dog-sitting writing, but what about blogging? Blogging income is just going okay. It’s a little above average, but I need to put more time into it. Fortunately, if the dog sitting drops off, I’ll have more time.

In July, “dogs and blogs” combined for a total of $7,148.45. In August, it was:

Total Blogging + Dog Sitting Income: $7,138.91

I missed a new record by less than $10! Ouch. I actually had a some website advertising that was done in August pay me in early September, but I’m keeping it in September. This is still a great number.

My kids help with the dog sitting. My 8-year old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. He even got a $20 tip from a client! My 7-year-old is good too, but it’s more of a work in progress. This help means that I can pay them a legitimately earned income (a percentage of the overall dog-sitting income). Because the income is earned they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. I want to get them more involved in blogging, taking pictures, and things like that, but it’s going slow. During school, they have too much to keep them busy. I thought we might make progress this summer, but their camps and our vacations kept them busy.

(Note: The blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

2. Rental Property Income

Zillow’s estimates on the property values seems to have settled down after the big run-up of a few months ago. In fact, they even fell a tiny bit. I get nervous about bubbles when prices rise so much and so suddenly. I am happy to have a little pause. Of course, while this pause is going on, we continue to pay down the mortgages. We generally pay down $3000 a month in the real properties. Some months, like this month, that’s our only gain.


The kids built a hermit crab habitat. My 7-year-old was in charge of building. My 8-year-old fetched the hermit crabs from the ocean. At one point they had around 20 in this hole.

This month we went from 70.59% to 70.66% ownership of the equity in our properties. Yikes, that’s a small sliver. We are only a few years away from getting real profits from the rental properties.

If we owned the rental properties with no mortgages (100% of the equity), I calculate that, after insurance, property taxes, condo fees, and estimated condo maintenance we’d make about $3,400 a month. That number represents our net gain.

If you multiply our expected net rent by $3,400 by the amount of equity we have (i.e. where we are on our journey to 100% equity ownership), 70.66%, you get $2,402 in estimated monthly passive income. I feel like the paperboy in Better Off Dead – “I want my two dollars!”


A friend had a foam platform for lakes and oceans. This was a big hit, so we might get one. However, they are fairly expensive at $300 or $400.

When I started tracking this (January, 2017), we only owned 36.4% of the properties and the properties had lower rents. The math worked out to $1,174 back then. So in a little more than 4 years, we’ve seen that number double. That’s the power of 15-year mortgages.

In about 5 years from now, the ratio will grow to 100% of that $3,400 rent. Since rent is inflation-resistant (we can raise rents as costs of living go up), we don’t have to factor in inflation like other investments. So we can think of it as around $40,000/yr. of income in today’s dollars buying the same value in the future. That should be enough money for us to live on with our own home paid off (plus our solar panels, frugal shopping habits, and military healthcare.)

In the previous report, the rental property income was $2,400.

Total Rental Property Income: $2402

3. Dividend Income

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. There are some income investing ideas here. We can also look at making passive income with Dividend Kings. If we wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get closer to a 4% average dividend yield. (That link to the newsletter has a special discount rate and in full disclosure, I make a few dollars if you sign up for it.)


Hurricane Henri hit us and we lost a tree branch. That’s not too bad. A week later, we got hit by Ida and the same tree lost a bigger branch. Strange, it’s a completely healthy tree.

The markets reached new highs yet again. I feel it can’t continue, but it does, so I guess I better enjoy it now. There will be a time when the markets go down. I’m preparing myself for that by focusing on all these gains now. I’m also trying to diversify money across industries and increase the amount in bonds in hopes that they’ll be more stable if a crash does happen.

We continue to get a profit-sharing check since I bought (a lot of) a company. The business was almost ideally positioned in this pandameic due to its virtual nature. The investment income from this is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend-ish Income: $3,880

Last month, it was $3,821. This dividend-estimated number hasn’t historically moved that much from month to month, so this is a good return back to those times. When I started tracking this number in 2017 we were at $1,180/mo. Our money is really working hard to multiply, especially because we aren’t investing much, but instead focusing on saving money for my wife to retire.


The kids climbed a sizable rock formation at the beach. I probably won’t win Father of the Year since I was this far away taking the picture. I put a stop to it when they came racing down holding hands.

Annualized, this monthly $3,880 is $46,564. If our mortgage was paid off, we might be able to live on this by itself. However, because most of our investments are in retirement accounts, we can’t use much of this potential income for now. (We can use the profit-sharing check as it goes straight to our checking account.) We’ll probably let this investment continue to compound for another 14 years until we are age 59.5. Then we’ll have to see if we want to tap it or let it continue until we are required to take some of it at age 72. I still need to see an estate planning lawyer and possibly some other tax and financial professionals soon.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, I’d include that as well. I’m too tone-deaf to have a rockstar music career, but I may write a book someday. This is important to separate from the dogs and blogs income at the beginning that definitely takes some more work.


I would have probably got this MoneyTime Kids question wrong.

The big growth this month came from the stock market. Real estate was mostly flat. I love having both types of income working together for us. I think everyone interested in FIRE should have stocks and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most FIRE folks in the case of an unfortunate economic event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for a while. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

The Delta variant cases are starting to slow their meteoric rise. I guess that’s the good news. The bad news is that cases are still very high. My kids are starting school and I’m more nervous this year than I was last year. Their school did exceptionally well to stay in-person all last year without any cases of students (to the best of my knowledge). When they sent people home, it was always precautionary because a close contact of a student had tested positive. I think we are about 4-5 months away from vaccines for the 5-11 year-old group that includes my kids. If they get vaccinated and we get boosters, I think we’ll all be in sync for feeling as prepared as possible.

If you haven’t gotten vaccinated yet and you are eligible, please don’t put it off. Getting vaccinated can help kids and other people who aren’t eligible. There was thinking that kids were mostly immune to COVID, but Delta spreads a lot faster so getting a lot more kids means more hospitalizations. There’s some debate on whether should be mandated to wear masks in the classroom. Until they are vaccinated, the best way to get our kids unmasked in school is for the eligible people to choose to get vaccinated. As my kids are fond of saying about a number of things now, “you can’t have it both ways.”

Finally, I think it is quite patriotic to help America’s hospitals and health care by doing everything you can to avoid adding to the problem. Vaccinations are on the rise, so maybe people are starting to see that there’s been at least a billion worldwide doses administered and there’s no problem. I’ll get off my soapbox now.

Very Close to Passive Income: $6,283

Last month it was $6,220. The $6,283 is another all-time high. It seems like I can just leave that sentence in my template for when I write this article.

This would be more than $75,000 a year of almost completely passive income. What’s better is that there would be no need to touch the investments themselves. We wouldn’t have to sell stocks for the dividends are assuming or get a reverse mortgage. Property maintenance and property taxes for rental properties are already factored in. We would still have all the underlying assets (property, stocks, etc.) and be able to pass these on to the kids for them to build on – unless we choose to draw them down for more fun, charity, or other spending.


The Newport Officer’s Club event to send everyone off on a great summer. I know the picture is blurry, but that’s the best I had.

This “very close to passive income” has grown from $2,354/mo. in January 2017. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for the profit-sharing check), because the money isn’t liquid. We don’t feel “rich” by any stretch of the word, even though we are relative to many people’s circumstances. We have gained almost $4,000/mo. in passive-ish income in a little more than 4 years. I used to wonder if we can get to $8,000/mo. in passive income by the start of 2025. A year ago, it was a stretch goal… now it feels like a certainty unless we have that major crash.

Final Passive Income

When you add up “dogs and blogs” to the “very close to passive income” you get:

Passive Income: $13,420.91

Last month it was $13,369.45. That’s squeaking into another all-time. I started the year thinking that I was just going to lower and lower because the “dogs and blogs” weren’t working. Even though this is less passive with all the dog sitting, it’s great to have real earning power. When “dogs and blogs” isn’t going well, the passive-ish income can still keep me from getting too low.

I had set a goal at the start of the year for this to average $8,000 for the year, but I honestly didn’t think it was poassible. Dogs and blogs were not performing at the start of the year. However, it’s over $9,500 on average now, so I just have to keep things going through the leaner winter months.


This picture of the Newport Officer’s Club is better.

This ~$13,000+/mo income is more than $160,000 a year. That (hypothetical) annual income for writing on a blog, taking care of dogs, and investing is very nice. However, this amount of dog care isn’t something that I want to continue over the longer term. If we could manage 100K from all these sources we’d be doing quite well – given our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but it’s a large percentage of it.

As the last year and a half has proven, you never know what bad news is lurking around the corner. This preparation gives us the financial flexibility to fight it.

None of the numbers here include my wife’s day job of bread-winning pharmacist income, her vested military pension (more passive income when she retires), or the freelance work I’ve been doing over the last few years (which isn’t passive at all). That’s the fuel that drives the passive income engine – it allows us to live well and invest. My income doesn’t match my wife’s, but the flexibility gives me the time to stretching almost every dollar in almost all our spending. It also gives me the flexibility to bring the kids to a bunch of events.

I love two things about the graph below. First, there’s a solid trend of the numbers staying high for several months now. Second, it doesn’t dip down too far. It’s been above $6,000 for a while now. It seems safe to say that $7,000 or $7,500 should be considered the new floor.

(Once again, the blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

Net Worth Update

My net worth updates aren’t very exciting as I don’t share the exact numbers. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful.


One restaraunt near us had lunch boxes filled with action figures for the kids to play with while we waited for food. This is such a wonderful idea and I don’t know why no one else does it!

August was another good month for our net worth. We saw it jump 1.49%. For the year overall, our net worth is up 26.12%. That’s usually the best we do in any year and there’s still time for it to grow.

For something new this month, I decided to share our liquid cash. I’ve been tracking it for some time, but this is the first time that I thought I’d share it. Many other bloggers break down their income and expenses in great detail. I’m too Lazy for all that, even if my credit cards can do a lot of it. This is a way to roughly gauge the bottom line. In the past, we haven’t focused much on this because we’ve been investing it. However, our focus now is to build enough cash so my wife feels comfortable retiring. We grew our liquid cash by $8,206.95 this month. For the year, we’ve grown it $27,026.51, so the average is about $3,000/mo. The dog sitting income has really made a difference.

It’s important to realize that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 15 years. FIRE wasn’t a “thing” back then, but it’s in the news a lot now. We naturally are further along in that journey than some younger readers who may be just starting out – especially ones saddled with huge student loans. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 11 of blogging (year 13 of early retirement planning). Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 15 years.

There’s a big wild card in calculating our net worth. Now that my wife’s military pension is vested, it’s reasonable to ask whether we should include it in our net worth. I decided that it does make sense to include it. She could have earned more in immediate salary if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

How was your August? Let me know in the comments.

Are All Personal Finance Experts Liars?

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I stumbled upon an article today by Larry Ludwig, the creator of the very popular Investor Junkie website. I’m happy to say that I’ve met him a few times at financial conventions and he brings a unique perspective to almost any conversation. And I mean that as a great compliment, even though “unique perspective” can be a phrase that could be used in a negative connotation.

In this article he states, All Personal Finance Experts Are Liars. That’s a strong, bold take and it’s one of the reasons why I like Larry. It’s a great article. You should read it. Seriously. I’ll wait.

Done? Good.

Just in case you didn’t read the whole article, I’ll be reviewing and probably quoting a few parts.

To start things off, I wrote that you should ignore your personal finance guru back in 2010. Much like Larry did, I went through and named some personal finance experts and why they are bad. At least he didn’t mention Robert Kiyosaki or Dave Ramsey’s support of pyramid schemes.

Summing Up All Personal Finance Advice

Larry presents a decent summary of Generally Acceptable Personal Finance Advice (GAPFA). (I just made up this term now.) I could quibble with some of it (such as buying a house is your best investment). However, the point he makes is important:

“You’ll do slightly better than average if you follow this advice, but in personal finance, average really sucks.”

He then goes into all the statistics on why the “average person’s” personal finance situation is terrible. It’s here that start to see some problems. For example, the average person doesn’t have enough savings, but “31% have less than $500 saved.” There’s also information about how the average person has “has over $5,700 in credit card debt with a 17.89% interest rate.”

By the very definition of following GAPFA, you would be FAR AHEAD of the average. You would have “Eliminated all debt” and “have 6 months in emergency savings.” So by only picking out those two things, we’ve dramatically improved the finances of the average person by at least $25,000 – $20,000 in emergency savings and that $5,700 in high-interest credit card debt.

Another item has the average person “Spend[ing] 56% on their food budget.” I caught up with Larry on Twitter, because that seems like a lot, and he said it was $61/day. That comes out to be more than $22,000 a year. That’s not quite 56% of the average $49,000 income, but I can see it after taxes.

If you barely scraping by and are spending $22,000 a year on your food, you definitely can benefit greatly from some personal finance advice. We can probably add another $16,000 to our bottom line by following the GAPFA item of, “Minimize your expenses.”

Ludwig gives himself a little wiggle room, “Even if you were to improve these stats by 30%, does that sound like you would be rich?”

It doesn’t sound like it would. However, we know about compound interest since we read up on the summary of personal finance advice. Each piece of advice helps a little, but it all adds up. For example, the most questionable of the GAPFA is “buy a house.” The house we bought in 2011 was $400,000. It’s worth $700,000 now. Does that $300,000 in home equity (that we can’t spend) make us rich? It doesn’t, but renting the same house today would be very expensive and it looks great in our net worth tracking.

The Personal Finance Expert’s Lies

Ludwig transitions to the following conclusion:

To put it simply, all bul#sh!t.

It’s like trying to gain muscle by dieting. It’s never going to happen.

How do I know this? Ask yourself this one question: How do you think these personal finance experts got wealthy? Did they follow their own advice?

NOPE!

All of the personal finance experts got wealthy from the businesses they owned.

It’s true that Orman, Bach, Ramsey, and Kiyosaki (for good measure) all got rich selling their books. However, Stephen King got rich selling books too. It’s not a crime. Being a successful writer doesn’t mean that what you are writing about is fundamentally flawed. In fact, it probably indicates the opposite.

There are also numerous personal finance experts that aren’t included is these four famous names. To stick to these names is basically confirmation bias or cherry-picking. For all these people who built their brand on these books/courses, there are thousands of personal finance “experts” who aren’t getting rich off the media. You just don’t read about them, because… well… they aren’t telling their story.

For example, you can take my wife, a military pharmacist. She makes a good very good income and I’ve been documenting how we’ve followed the generally acceptable personal finance advice (GAPFA). The military benefits allow us to save money in a few areas. She also has a very strong pension, good and cheap healthcare for life, and a GI Bill to cover a big chunk of our kids’ college expenses. I’ll get into my side of things a little later on, but this isn’t close to the “average person.”

The main point I want to make is that there are a lot more people who are your doctors, lawyers, pharmacists, software engineers, fill-in-your-high-income-career, than Suze Orman or Dave Ramsey.

Another missing piece here is that there’s no agreed definition of rich. When I read it, I say that a million dollars is rich, but a million dollars doesn’t go as far nowadays. Everything with money is relative, so to the “average person” above a million dollars is enormous. If you have a net worth of $10 million dollars, someone with “only” a million dollars may seem “not too rich.” Perspective is everything.

How Personal Finance Experts Get Rich

Larry correctly points out how those experts got rich:

In reality, they used these techniques to get rich:

– Generate income not based on hours worked
– Minimize taxes
– Leverage time and debt

This is true, but I think something is missing here unless you argue it is baked into the first point. They are brands that have a strong audience scale. Tom Brady’s income is based on hours worked whether you count in the training room or on the field. The scale of the NFL allows for a few great quarterbacks usually about five at any given time. You can pick a movie star of your choice, but it is similar. They scale their brand.

Scaling a brand is not for everyone. If anyone gives you personal finance advice that you should practice throwing a football until you become the next Tom Brady or go to Hollywood and become the next Scarlett Johansson, well… that’s simply bad advice. It would be a terrible book. Would you pay to read a Dave Ramsey book that’s a few pages long starting with, “Step one: Sell a lot of books” or “Step one: Become the greatest quarterback of all time”?

The Average American as a Tax Slave

There are a few other parts of the article that I want to cover, but I’ll start with this:

To be clear, I do agree that a lot of the tips and techniques they recommend will make you better off than the average American. But the average American gets paid for hours worked and is a tax slave.

This is why, when seeing reports that Donald Trump paid little in taxes, the average American is outraged. The average person does not understand basic business concepts, taxes, and finance. They don’t understand as a business owner you have much more control over your income and the taxes you pay. Business owners have the capability to delay taxes (in some cases indefinitely).

Applying this to my wife, she is a “tax slave.” (I’m not sure she’ll be thrilled with that categorization.)

Donald Trump is an extreme example of someone who inherited a ton of wealth and used it to build a brand. It was noted that in 2015, Trump would have had more money if he simply invested in index funds such as using GAPFA. In fact, if we use that article’s assumption of Trump’s own wealth estimate of $500 million in 1982 he’d have $20 billion today. It’s more likely that he now has closer to $2.5 billion. One could reasonably say that Trump is rich with $2.5 billion dollars. One could also reasonably say that he would have $17.5 billion more dollars using GAPFA. He could at least be a lot closer to Warren Buffett’s $100 billion dollar net worth, right?

Above I glossed over my own income when mentioning my wife. I had been a software engineer making six figures in a Boston suburb and in Silicon Valley. I started learning about GAPFA and got interested enough in it to make this blog. I got burnt out as a software engineer and took a big pay cut to try to run my blog as a business. Financially, I would have been so much better off as a tax slave. Yes, I can minimize taxes using my blog as a business…

… However, sometimes my income is less than 1/3rd of hers. It’s very difficult to build a brand to scale in the attention economy. Personal finance is a very crowded space probably because many people can understand GAPFA. In addition, I run a successful dog sitting service, but the income is limited to the number of dogs I can sit at one time (it gets tough after 5-6) and how much people will pay per dog. It’s not exactly being an hourly tax slave, but it doesn’t have the ability to scale like a big brand. It’s a side hustle and I’m comfortable with that. Lastly, I do some freelance work, but other than the home office tax deduction, there aren’t great tax savings there.

My wife and I have rental properties as well, but so far we’re just building equity. We won’t see actual money until the mortgages are paid off or we sell the condos. So we’ve got a lot of moving pieces, but in 2015, I estimated it could be $200,000 a year in income. I need to update that article because it’s looking like it will be more now.

The biggest advantage to my mix of various jobs is that I can control the time I work to some degree. That’s important because it allows me the flexibility to deal with a lot of the kid issues while my wife works.

Why Personal Finance Experts Don’t Push Starting a Business

Ludwig mentions that few personal finance experts recommend starting a business:

An employee gets paid for the hours worked, so by its very nature your income is not scaleable and your wealth creation ability is limited.

Yet you almost never hear the financial experts recommending that you start a business.

Nor do these guys tend to mention the importance of understanding how taxes work.

Why do you think this is?

The average person wants the easy way out. They want the miracle pill that will make them thin or buff. They want something that requires little effort.

But in reality, there is no such thing.

He’s not wrong. The “miracle pill” stuff sells. You’ve been able to see in the tabloid headlines at the supermarket for decades now.

However, that’s not the complete answer. I think Larry gets a little closer to the answer in my opinion when he writes, “Creating a business takes lots of effort with no clear path to success.”

The problem is that once we acknowledge that creating a business is hard with no clear path to success, we realize that it’s impossible to write useful, actionable information about it. The best anyone can do is write broad generalizations. Perhaps these could be motivating for some people, but many, many others would criticize such a book as being fluff. Whatever business you may start is going to be very personal to your skillset and the tools that you have available. No general personal finance book is ever going to be able to address that. You need a full feedback loop such as a business coach.

I’ve recommended starting a business numerous times on this blog over the years. However, that’s about as far as I can go with it. I can (and have) talked about taxed benefits and things like that, but that is just a rationale for why to start a business, not how to start a successful one.

Are People too Lazy to Start Businesses?

Perhaps… but it’s much more than just that.

As Larry points out:

“Only 10% of consumers complete a book or course they’ve purchased. I suspect fewer even implement what they’ve just read. So most can’t even follow the basic advice the experts recommend. It is similar to the stationary bicycle that eventually turns into a clothes hanger.”

This is not surprising. If you look at the “average person” above, they’re drowning in credit debt and have a very small emergency fund. I imagine that they are so busy and tired at their job that it’s easier to just order take-out or go to a restaurant which is the only logical explanation of why they would spend 56% of their budget on food.

I know that I finish less than 10% of the books I try to read. (Fortunately, they go back to the library and I try another one.) I used to be able to, but now that I’m juggling three separate side hustles, rental properties, kids, and household duties (dishes, laundry, shopping, etc). How can I take a week off of everything to read a book? (I’m a slow reader.)

The implementation of the book better be damn easy. Don’t give me anything difficult. I have it better than the “average person” because I’ve managed my finances well enough to be able to outsource landscaping and afford a cleaning service.

This is the very reason why GAPFA is so powerful. You don’t need to read a book to learn GAPFA. Larry had a decent summary of it just a tiny blog post. In fact, most of it can be consolidated to a single index card. (Admittedly, it feels very backward to read about a book about information that can be consolidated to an index card.) Most people can follow an entertaining blogger and get it.

Most people I know don’t want to spend their lives learning about money or starting businesses. They have 10% of their life energy to focus on it, so GAPFA gives a path to maximize that. They are likely to get 80% of the benefit from that 5-10% of the time. We’ve already seen how much better off the average person can be when they follow GAPFA.

People can see progress with GAPFA almost right away. They can see money saved with frugality and the emergency fund grow. They can see the investment account getting $50 a week, end the year with almost $3000 in it due to growth. For that “average person”, this is tremendous progress with very little effort. If you are that “average person”, which of these is better:

1. GAPFA – Easy and steady progress that you can measure.
2. “Creating a business – takes lots of effort with no clear path to success.” (I added the dash to the quote above for formatting.)

It’s not surprising that one is more popular than the other. Is it?

Should You Start a Business?

I’ve written that you should many times in the past. Larry agrees:

“I know this is going to sound like blasphemy but ignore mainstream personal finance advice.

Follow what the personal finance experts do, not what they say — start a business.

Create at least a side hustle. You’ll learn much more about finance, taxes, entrepreneurship, and marketing than in any classroom or what the media thinks it knows about owning a business.

I think there’s room for both. Since GAPFA can be implemented fairly easily, it can serve as a safety net in case the business fails.

As for starting a side hustle, it can be a good idea, but it isn’t always one. I could easily argue that the side hustle of starting a blog took my attention away from software engineering. With a time machine, the best financial move for me would have been to follow GAPFA, never write about it, and focus more on my six-figure salary. Those checks look a whole lot better than dog sitting. I think the best case for a side hustle is as a pivot away from a job you don’t like or to supplement an early retirement lifestyle.

Can You Get Rich with GAPFA?

I wrote earlier that I wasn’t going to quote the whole article, but I’m this far along, so why not continue it? Larry starts to the end article with this:

“I’m not suggesting the advice the gurus are giving is outright wrong. Their recommendations will make you modestly successful. You’ll more than likely live an OK life and have an above-average net worth.

But you won’t be rich.”

It seems like a very definitive answer that you won’t be rich. I found a “net worth calculator by age” and my wife and I (combined) are in the 95% for our age. It would be in the 98% if we counted the value of her pension. By most people’s measure that would be rich.

However, if you probably couldn’t tell unless you looked at our bank accounts. Most of the money is locked in retirement accounts or investment property equity. It looks a lot closer to “an OK life.” We might have taken GAPFA too far with investing in retirement accounts instead of money we can more access now. We also have the option of retiring 20 years before most people with a lot more (mostly passive) income than most people, which should qualify as some amount of “rich.”

The biggest difference on whether you can get rich with GAPFA is income. A very good income and time is a great combination. If your income is just enough to scrape by with GAPFA, it’s unlikely you’ll be rich. However, that “OK life with an above-average net worth” will certainly look better than the mess of the “average person” that isn’t using GAPFA.

Can You Get Rich Working for Someone Else?

“You’ll NEVER get rich by working for someone else. That’s something you’ll never hear from any personal finance expert. But being a business owner is how they got rich themselves.

This makes all personal finance experts liars.”

I guess we could never say that Warren Buffett is rich since he works for a lot of people (commonly referred to as “shareholders”)

We could never say that any CEO is rich for essentially the same reason.

We could never say that Tom Brady is rich because he works for Robert Kraft Bryan Glazer, the owner of the Tampa Bay Buccaneers and takes orders from Bruce Arians every workday. However, even Bryan Glazer is “working tirelessly to support the Buccaneers franchise and brand” according to the team bio. I guess Glazer isn’t working for someone else, but I couldn’t help but note the “working tirelessly” description.

You could argue that Tom Brady now has several of his own businesses. However, he wouldn’t have had any of them if he hadn’t been successful working for someone else. It’s not like his TB12 Sports business would have gone anywhere.

These are just a couple of famous examples. However, there are plenty of other high-income people who are able to get rich working for someone else.

The reason why you’ll never hear any personal finance expert say “you’ll NEVER get rich by working for someone else” is probably because it simply isn’t true.

Final Thoughts

One of the reasons why I chose the name Lazy Man is because I wanted to give people the easy “miracle pill” to money. If your situation allows you to follow the advice it will make you rich. It’s mathematically proven what compound has done time and time again. However, we may have to define rich as 1 to 3 million dollars and the timeline as “eventually” depending on your income and how much GAPFA you implement.

Way back at the beginning of this article, I mentioned that I wrote about “ignoring your personal finance guru” back in 2010? That article has a bunch of typos and a reference to Jack Bauer of the show 24, which puts some perspective on the timing of it. The idea behind the article is good, but the execution is terrible except for one tiny section that stands out:

“No personal finance guru is perfect. There are enough gray areas in math, psychology, and other factors that make all information open to some interpretation. They are great for learning the concepts of personal finance, but you should probably adapt them to your own situation.“

The best book if you are interested in this stuff is actually mentioned in Larry’s article, The Millionaire Fastlane. It is a great book, often one that I recommend the most. It uses a street metaphor for different paths to wealth:

The slowest lane is gambling and lottery, stuff that never really works.

The middle lane is “A dogmatic financial plan based on the fatal presumption that 40 to 50 years of gainful employment circumscribed by frugal living, tortuous saving, and regimented stock market investing, will somehow make you a millionaire.”

The fast lane is “An enterprising financial plan based on leveraged entrepreneurship that creates extraordinary incomes…”

I think he’s overselling the dream of the millions with the fast lane. However, the only that sells better than a “miracle pill” is “the dream.” I think he undersells the middle lane which misses the whole FIRE movement that condenses the path to financial independence to around 15 or 20 years, not 40-50 years. I think it’s also more likely to be a couple of million dollars, not “somehow make you a millionaire.”

There’s one more thing that I want to leave you with MJ DeMarco. It seems he made his money buying Limos.com around 1999 and selling it in 2000. He bought it back at a discount and sold it again in 2007 for $4.5 million. He seemed to have invented affiliate marketing and did well in-between.

What did he do after that? He did the same thing that personal finance experts do, building a brand by selling books. He’d probably claim that he’s more genuine because he experienced what he’s selling. However, maybe he should consider smaller writers (like me) following GAPFA who are doing quite well with it… with a lot higher success rate.

This is over 3500 words and there are three more things that I didn’t have the space to address:

1. Do personal finance experts like Certified Personal Finance lie as well? I suppose they may lie sometimes by pushing products that they earn commissions on. However, I think it would be a stretch to say they lie in general.

2. If we consider the personal finance expert book authors people who research a topic in-depth, shouldn’t we expect them to get paid for it? If someone researched the topic of car repair and wrote a popular book about it, would we say that they are lying? Can we hire psychiatrists and psychologists who study mental conditions or must they have personally experienced them as well?

3. Where do we say about personal finance experts like Clark Howard who actually do live by what he says. Despite having money from his big brand, he still buys a cheap car and lives frugally? On any given day, he can probably spout off the top 5 cheapest cell phone plans for almost every type of user. He knows fine details of things that change all the time and I don’t think can be confused as selling a miracle pill to anyone.

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