Lazy Man and Money

He Saves 90% of His Income

by 2 Comments

Chances are you’ve never heard of Joejuan Williams.

You might not follow the NFL. If you do, he isn’t on your fantasy team. He’s on a team that you probably hate. He’s probably the 35th best player on the 53-man roster.

Joejuan Williams plays defense for the New England Patriots. Growing up a Bostonian, I’ve been rooting for that team for almost 35 years.

By the end of this post, I think you’ll agree he’s something a lot more special than any of that sounds.

I gave away the goods in the title. He saves 90% of his income. That’s extraordinary in his profession. Professional athletes tend to blow all of their money faster than you might think. There’s a great ESPN documentary on it called Broke

Yes, Williams has a four-year, $6.6 million contract with 4.1 million dollars guaranteed. Living off of 10% of that kind of income might not sound too amazing for you and I. However, at his nearly $500,000 salary this year, he spends around $50,000. That’s not too crazy for a 22 year old.

What made Williams make this decision when so many of his peers go in the opposite direction and spend all their money? From this Boston Globe article it was simple a financial literacy class in high school:

“Joejuan Williams still remembers learning about mutual funds in a personal finance class he took as a junior at Father Ryan High School in Nashville.

‘I just raised my hand and was like, “So, you’re saying we can sit on money and watch it grow?”‘ Williams, now 21, recalled. ‘[My teacher] was like, “Basically, yes.” I was like, “Bet, sign me up.”‘
“

The whole Boston Globe article is worth reading. Williams had always been an extreme saver due to the difficult circumstances he grew up in. He had a need and desire to learn more about money and the opportunity presented itself in that personal finance class.

He keeps his expenses down (after paying off his mom’s student loans and car) and invests 90% of his money. He’s looking to pay for his mom’s home next. It sounds like he’s learned from the Broke documentary:

“I want to be set in the future when I’m not working. Grind now, sacrifice now, be happy later. I’d rather live like a prince for the rest of my life than live like a king for my NFL career and then go back to square zero.”

He knows that in the NFL, square zero can be just around the corner. One of the longest running jokes is that the NFL stands for “Not For Long.” Just this week, ESPN wrote about the 5-year anniversary of The Jonas Gray story.

Jonas Gray was another Patriots who came out of nowhere to have one of the best games in football history – only to disappear into obscurity the following week… and every week since. Reading the story of Gray, you realize how much luck plays an impact in your life. He caught just about every kind of bad break you can think of and at 29, he’s just trying to get another chance where he can prove he belongs in the NFL on his own skill.

When Williams isn’t grinding away on the football field, he hopes to create a formal financial literacy program to reach students and get them excited about learning about money. (Joejuan, if you are reading this, contact me).

For now, he’s got his work cut out for him on the Patriots. They’ve got a lot of depth at Williams’ position, which means that he doesn’t get much playing time.

I’m not worried about the football aspect of Williams’ career though. For all these words about his money habits, he’s just as invested (pun intended) in the game of football itself. Before news got out about his personal finance accomplishments, it was suggested he might be the NFL’s biggest football fan. He can often be found watching kids from kindergarten to high school play football. That’s simply not the kind of thing that NFL players do on their time off.

Final Thoughts

I love to share inspiring personal finance stories. Some may argue that because Williams’ income is so high, it’s not too inspiring. I don’t buy that. It’s very different than what almost every professional athlete does.

The other thing I want to focus on is the role that personal finance education played in Williams’ life. I’ve had some conversations on Twitter and they feel that kids aren’t interested in personal finance education and requiring them to take it in school isn’t going to change anything… they just won’t listen. I have always argued that if you pitch the class as a way to make money doing nothing, kids will generally be interested. I think it would certainly interest them a lot more than trigonometry, right?

Attempting to Fulfill Tyler Lockett’s Wishlist

by 3 Comments

I few weeks ago, a Tweet from a football player caught my attention. Actually, it caught the attention of nearly 100,000 people who liked it:


I couldn’t agree with Tyler Lockett more. Lockett lists 10 items on his wish list. Of those, 6 are personal finance topics. I’ll cover them in a minute, but first I’ll tackle the 4 that aren’t about money.

  • Cooking – My high school had “home ec” classes that included cooking, sewing, woodworking, and power mechanics (how combustion engines work for example). It wasn’t extensively covered, but it is covered in school. Today, my 6 year old has an optional cooking enrichment class at his school.
  • Life Decisions – This is a really broad topic, and I’m not sure how you teach it school. Maybe it’s teaching critical thinking? Maybe it’s making a pros and cons list?
  • Single to Married – I’m trying to think of what that curriculum would look like. It feels weird to teach how to make a marriage work in school.
  • How to be a Parent – This may be taught in school. There are any number of sitcoms where kids bring home an egg and take care of it like a child. This isn’t parenting of course, but it is something.

With those out of the way, let’s dig into the 6 personal finance topics:

  • Budgeting – My sister site, Be Better Now, has covered The Three Budget Systems. This would certainly be part of a personal finance curriculum.
  • Filing Taxes – I’m not sure if this should be taught in school. After all, the current administration said they’d make it as easy as sending in a postcard. More importantly, the government can do taxes for us.

    Put all that aside, most people can use very simple, free (or very cheap) software to do their taxes. Those people could also use tax preparation services that relatively cheap. If you have complex taxes, such as a football player who makes millions (in multiple states due to the football schedule), it’s unlikely that school is going to teach that special case.

  • Buying Homes – This should be part of a personal finance curriculum in school. It’s much more complicated than I thought it would be. Fortunately, there are real estate agents who guide you through the process. That’s a bandage and I’d like to see our schools do better.
  • Investing – Yet another topic that should be covered in a school’s personal finance class. The curriculum doesn’t need to be too extensive either. It could cover compound interest, low-expense index funds, and asset allocation/risk tolerance in probably a few hours. This is classic 80/20 rule… most people would get the basics with very little time.
  • Generation Wealth – I don’t think this should be taught in school. I feel that if you get to the point where you care about generational wealth, you can afford to have financial advisors who can guide you through your specific circumstance. Nonetheless, this could be touched upon when explaining how compound interest works.
  • Credit – Building good credit is important. This would be a core section in my hypothetical personal finance curriculum.

I find it interesting that most of the “why didn’t they teach us this in school” is related to money. And it seems like many people agree it is really important.

So why isn’t personal finance taught in school? I don’t know. If you have the answer, let me know in the comments.

The Journey vs. The Destination

by 4 Comments

Today’s post is going to be a little different. When I started this blog I thought I’d right about money 80% of the time, technology 15%, and sports 5%. No one likes to be one-dimensional and it can get boring quickly. This is going to be one of those articles that sports-related, but hopefully you’ll be able to extrapolate it to life, the universe, and everything.

Last night, my favorite team, the New England Patriots engaged in what many considered one of the best football games of the year. The only thing marring it was the referees’ call and non-call that generated huge amounts of controversy. The referee saw the Carolina player interfering with the Patriots’ player and threw a flag on the last play. This would give the Patriots one more chance from the 1 yard line to try to win it. However, after talking with the other referees it was judged that the Patriots player couldn’t have caught the ball and thus it wasn’t a penalty. The referees picked up the flag and explained that there was no penalty and ran off the field.

(I’m biased, but it seems every ex-referee who analyzes current referee calls determined that it was a textbook example of pass interference. After reading the rules myself, it says “the pass is clearly uncatchable by the involved players.” The fact that analysts are debating it today leads me to believe that it was anything but “clearly.” For example, if it’s possible that the Patriots’ player could have put his foot and knocked the ball into his hands for a legal catch, it should be deemed “catchable.”)

The game was a great journey with a bad destination. It got me thinking today, why not just enjoy that journey? Truth be told, as a Patriots fan over the last 9 years, it’s a concept that I’ve embraced. Many Patriots fans judge success by the number of championships won. No one is going to get upset with winning a championship, but I’m starting to see things in a different way. It’s become very clear to me that many, many football games end in a way that one inch in one play could completely change the outcome. Last night’s game was an example where any number of plays could have been the difference in the game. If you get that bad bounce in the Super Bowl and don’t win the championship, does that mean the team was any less great? Maybe one team was better on that day. Maybe they were the beneficiary of that inch. I don’t think that should be the difference between immortality and irrelevance. Thus I choose to measure success by the journey… am I happy with that particular Sunday’s destination (i.e. a win) more often than not? With the Patriots I am, regardless of whether the players get to wear rings at the end of the season.

The game last night has been analyzed about a thousand different ways. One thing that I often see coming is the theory that the controversial play didn’t cost the Patriots, they had lost the game on their own accord through a series of mistakes earlier in the game (a fumble, letting cray legs Cam Newton run around on them on 3rd down, etc.). The problem with this reasoning is that it works for both teams. Imagine if the Patriots player clearly committed offensive pass interference and caught the winning touchdown on that controversial play. The same analysts would be saying that the play didn’t lose the Panthers the game, but it was the fact that they allowed the Patriots to move the ball nearly 400 yards and get 28 first downs. Or perhaps they’d say that the Panthers deserved to lose because Cam Newton has to do better than pass for around 200 yards at home against a team missing 6 defensive starters.

In effect the analysts saying that the Patriots lost the game before the last play lose sight of the fact that the last play completely dictates the story they tell. A few weeks earlier the Patriots won in almost an identical comeback in the last minute and every media outlet was shout how great Tom Brady is from the rooftops. There was no story about how the Patriots had lost the game in the previous plays, because they didn’t lose the game.

It’s strange how sometimes journalists rewrite the journey to fit the destination… especially when that destination could have easily been flipped in the entirely opposite direction. I want to give them a Mike Ditka “Stop it!” I wish they’d just stick to the story that it was a very evenly matched pair of teams on this night. One had to win and one had to lose. Hundreds of different things along the way could have won or lost the game for each team. However, at the end of the game it came down to the referees’ judgment of what a player was capable of doing if he wasn’t being interfered with… and their inability to realize that it would be textbook holding at a minimum, which doesn’t rely on the ball being catchable.

To tie this back around to money, let’s look at lottery winners. These people essentially skip to the financial destination without the journey. For most of them, such a dramatic move makes their lives a mess and studies show that they aren’t any happier than the rest of us.

It makes me think that without the journey the destination is often meaningless. So put me down as being a “journey” kind of guy (and definitely not the band). However, if you are a “destination” person, you could have skipped all the paragraphs about sports in the middle and jumped here from the first paragraph. If you did, then you already know the secret is 42, right?

Personal Finance Startups, Eyeglasses, Football, and Links!

by 6 Comments

It’s time to empty out the recycle bin of trash in my mind again. It’s overflowing this week, so I’ll just dig in.

  • Personal Finance Startups – I’ve got a quick call with a personal finance startup that I think is interesting in a couple of hours this morning. If it pans out, I’ll be writing about them later this week. On Tuesday, I’ll be going to a mixer, SF Beta Financial Innovation, to hobnob with a bunch of personal finance companies and others from Silicon Valley. I’m extremely shy, so we’ll see if I actually “mix” or not.
  • New Eyeglasses – I finally got around to purchasing two new sets of eyeglasses from Zenni Optical thanks to many reader’s advice on my article, Save Money on Glasses and Contact Lenses. For under $60, I got two pairs, one for general use and one for use specifically when I’m at my computer. The Internet is a beautiful thing.
  • Football – Regular readers know that I’m a huge football fan. Did you see the games this past weekend? Three thrilling games that went down to the wire. With Seattle winning its game against New Orleans, I expect to read more analysts upset that the 11-5 New Orleans had to play a road game against 7-9 Seattle because the Seattle won their weak division. Many of them would like to see a reseeding of the playoffs based on wins for playoff teams, which would allow the division leader (even an under .500 one) to make the playoffs, but not host a playoff game. I don’t feel bad for New Orleans. In 2008, the Patriots were 11-5 and didn’t get a chance to play a playoff game, while the 8-8 Chargers got to play one at home. If the NFL is looking to adjust the rules to react to this “injustice” (I don’t believe it is one), I recommend it start by correcting the greater “injustices” first.

    Looking forward to next weeks games already with a bunch of other great match-ups including two divisional rivalries in the AFC.

Now let’s get to the personal finance links:

Money Writers:

Top PF Posts:

Personal Finance Links (Football is Back Edition)

by 12 Comments

It feels good to have the NFL back in gear. Of course my wife is of the opposite mind. If only I could get her to like football as much as she likes baseball.

I have been spending more time that I should reading about the Patriots. (For those who are new to this blog, I grew up in Boston and sat through many very, very bad seasons). I noticed a few articles about Bill Belichick, the coach the nation loves to hate. I think the nation would feel differently if they saw him practically cry at Tedy Bruschi’s retirement. Here are a few lessons that could be taken from stories that I read just this week:

  • Respect Your Elders – In this Yahoo Sports article, we find that Belichick extended a lot of understanding to a veteran player, Roman Phifer, who had some family problems to deal with. Phifer became a key player in the Patriots first Super Bowl run. However, what I liked best was the Quick Slant section after the first one where it was reported that Belichick snapped at a recent draft pick: “Brandon, what the [bleep] do you know about the NFL?” In other words, you have to earn your stripes
  • Belichick is the Beatles – This is more of a detailed schema of how Belichick has been successful. There’s a lot about preperation and being flexible… qualities that can you outside of football.
  • There’s hope for me in football yet – “To work for Belichick, you just have to be smart enough to excel outside football — and obsessed with applying that intelligence to the sport. You have to be self-motivated and not stuck in your ways. And above all, you must be grateful for the opportunity, despite the tiny salary.” Check, check, and check. Bill, I’m ready and waiting…
  • Belichick Knows His Personal Finance – The Patriots made a big move that surprised nearly everyone in the NFL. They traded one of their better players, Richard Seymour, for what looks to be one of the best draft picks in 2011. Seymour will be 30 this season though (getting a little old for the NFL) and his contract expires after this year (he can simply go to another team). Seymour has had some injuries the last few years. When asked about the trade, Belichick said it was in the best long-term interest of the team. Meanwhile Oakland seems to be happy to get better now. Unfortunately, one player is unlikely to take the team from 5 wins to 10 or 11 wins necessary to make the playoffs. It’s these kind of moves that the Patriots make that seem to provide great talent in the future. It’s like investing for the future.

With all that football stuff out of the way, let’s get to the personal finance links:

Money Writers:

Financial Posts of the Week