Hello, I’m “Numbers and Sense.” I hope you don’t mind that I prefer to remain anonymous for now, for reasons I’ll get into in a minute. What do you put in the “About Me” section of an anonymous blog? In a nutshell, I am an analytical Christian thinker who has decided to think about money for a while. I’m no financial expert, but I would consider myself financially literate. I enjoy learning about personal finance and always have.
I like to challenge assumptions, especially from a philosophical level. This challenge is why I want to remain anonymous. The most clear assumption in Christian circles, it seems, is that we are to be free from debt. Maybe this is true, maybe its not. The challenge of this assumption, and others, can cause people to become emotional and even angry. Money is an emotional topic – it tugs at our concerns of safety, adequacy, and purpose. I want to shield my brothers and sisters from division until I know more fully where this will take me. Money causes division enough as it is.
I was fortunate enough to grow up on a farm, where you learn to work hard, to do things for yourself the right way, and never take shortcuts. The farming community has a much different outlook on personal finance – where everyone else is so concerned with retirement or even early retirement, there’s no such thing for the farmer. My grandpa farmed until he passed away, and that’s normal, even expected.
After graduating from college, I got my first job in the suburbs and didn’t really have much but a couple of hundred bucks in my checking account. Working in a chemistry lab, I soon was making more money than I ever had in my life, even though a good chunk was going to my 401(k). My expenses were low, as I was living with several other friends from college in a “bachelor pad,” and we did everything very cheap, so I had all this money I didn’t know what to do with (hundreds that is, not thousands).
I had roughly $20,000 in student loan debt, so I thought by paying that off quickly, it would be like getting a 6% (as that was the interest rate) return on my money. I sent all my extra money to knocking out student loans. I started following podcasts and radio shows about money to get a better idea of what to do with my new income. I hated the idea of throwing money out the window every month in rent, so I started looking into buying a house to begin building equity.
This is when I realized that my pay-off-my-student-loans-early plan wasn’t as helpful as I thought. First, I was “earning” a straight 6%, but was not earning interest on the interest, like I would in an investment. Second, 6% isn’t as good as what you can typically get in the stock market (8-10%). Third, and most importantly, I had no liquidity, meaning I had sent all my cash to the bank and couldn’t get it back if I wanted to use it for a down payment on a house. I had less debt, but no flexibility. When my plans changed to wanting to buy a house, I had to start over from scratch with saving up for it.
I ended up buying a distressed, foreclosed property at age 23 and went to work fixing it up while living there. There was a lot of work to do as the walls had mold so thick you could wipe it off with your finger. Since then, I’ve done countless hours of work on the house, got married, went to graduate school to make a career change, living on one income, and am starting a second career. And so my journey continues. I’ve learned a lot from my experiences, but I realize there is so much more to learn. This blog is my journey of continuing to learn more about the best way to handle money.
I invite you to join me. We learn better when we learn together. Follow me here and on Twitter. Please share your advice, comments, challenges, and resources. You can email me at firstname.lastname@example.org.