Friday, March 4, 2011

A Call to Patriotism: Part IV

Part 1 : Part 2 : Part 3

I've been the recipient of lots of patriotism over the past few weeks.  Through my travels from the west coast to the east coast on active duty orders, I experienced all kind of emotions over patriotism and love of my country. One evening about a week ago, I stood and listened to a World War II veteran talk in vivid detail about his service with the 82nd Airborne. You could see him living it through his eyes, his voice, his hands...he still remembered well and was proud to show should've seen his leather bomber's jacket with a patch for the 82nd Airborne that was no smaller than an average dinner plate...I kid you not!  It was on his right chest, too.  Just beside him was a Korean War veteran...clearly a bit bitter as he talked about his country who by his perception, didn't even know it was going on.  As his voice shuttered as he was still upset about that, his wife sat there, staring at him, and with her wrinkly hand, squeezed his. Inside, I could tell he was hurt...and still hurting. My heart poured out to him inside and his wife, sitting there fully engaged and 100% behind him without saying a word.  For me, it was incredibly powerful and a moment in my life I will never forget.

I was also on 8 different airplanes in two weeks so as you can imagine, I saw a lot of soldiers in the airports.  The uniforms all make sense to me and I try to craft their story in my head as I pass them by.  By the way, only the Army and Air Force wear their uniforms on official travel.  The Navy (and maybe the Marines) are forbidden from doing so.  We are to blend in and not draw attention to ourselves. Even if I were to be deployed overseas, the same rule applies...thus the reason you will not see Navy personnel in uniform. The one exception is Navy recruits.  They will be wearing their "cracker jack" uniform and probably look 18 or 19 years old and one ribbon on their left chest.  They just graduated from boot-camp north of Chicago and are on their way home. Anyway, back to those soldiers: look on their upper left arm.  If you see a patch with some Arabic writing and the letters "ISAF" on it, they most likely are on their way home from Afghanistan...most likely, from over a year-long deployment.  (the exact patch I posted on my "Part 3" post)

In the past few days, a friend of mine who has a 5 year old wanted to say the Pledge of Allegiance to me.  She called and although he was very shy and needed some prodding, he recited it verbatim and with gusto! So very cool to hear that! I've also had my niece and nephew do the same thing awhile back. I am thankful that although a lot of things have been banned from our schools in the name of political correctness, the Pledge is still recited every morning.  In the elementary school, at least, a student leads it via microphone every morning (in my home town). I love it when it's my girls' turn to do it.  They'd better know it! :-)

On my Part 3 post, I talked about flying Old Glory and pleaded with many of you to fly her and take photos of ones you see flying and send them to me. Unfortunately, only 4 people have responded. 2 of those have sent me no less than 20 photos. Surely, you can do better! Start looking, start flying her, and talk with your family about what she stands for...not just on holidays, but every day. Freedom is not an entitlement.  It can be taken away but today, it is maintained by those standing the watch in our place. Fly Old Glory for them!

In closing today, I want to share a super short video from the Navy. It's a recruiting video but I especially love it because on the last frame as the camera pulls away from the flight deck of the aircraft carrier, look at the flight'll see "74".  That's the USS John C. Stennis...a nuclear powered aircraft carrier. Why do I care?  I am a "plankowner" of that ship.  Plankowners are either original crewmembers or the last crewmembers of a ship.  I was on that ship before she was placed in the water and sailed her maiden voyage.  I was there as we lowered nuclear fuel rods into her reactor. I operated that reactor! I also stood topside and watched our fighter jets launch from her flightdeck.  I sure do miss being out to sea and seeing her again just brings it all back!  Enjoy!

Tuesday, February 15, 2011

A Call to Patriotism: Part III

Old Glory.  I sure do love her and watching her wave.  The single best purchase at my home was digging that hole last Spring and installing a 20 foot flagpole where she flies 24/7 along with the Navy Jack.  The Navy Jack has the snake and the words "Don't Tread on Me" on it. It's a flag with a rich history in the Navy but also that flag that is on the left shoulder of every Navy sailor serving in Afghanistan this very moment (see actual photo of one at left). It's not the nice red, white, and yellow that you see on the right side of my blog, but Army green and black.  As I walk out of my house every day, I never pass that pole without looking up and thinking about my freedom, thanking God for it, and keeping those serving right now in my I can have the very home I just walked out of and the freedom to do so.  Never one day goes by where I do not think about the blood shed so that Old Glory can keep flying.  It wrecks my world when I see a beaten and tattered flag flying, too.  When Old Glory has passed her prime, she needs to be properly disposed of and replaced.

So here is my Call to Patriotism to YOU.  Fly her.  Fly her always.  Stick up for her when you know she is being mistreated.  She is NOT just a piece of cloth.  It is what she represents and what has gone before us and what is going on today that keeps her flying.  Over the last few days, a friend of mine (to remain nameless) has been sending me text pictures of flags she has been encountering which prompted today's post.  I want YOU to do the same and I am going to create an online album of as many as you can send me.  Tell me the location, too.  You can e-mail it to me, you can "post it on my wall" on Facebook, or you can text it to me if you have my phone number.  It doesn't have to be anything fantastic as far as location (while I won't complain if it is!!), but just start looking.  I bet you'll see more than you ever did before.  When you stop and snap the photo, think about what Old Glory means to you...and perhaps have a conversation within your family about it.

Before I share a few photos with you, here is an article posted by the U.S. Marines yesterday about the importance and significance of flying Old Glory.  From the perspective of a U.S. Marine, it may change how you view Old Glory and her significance.

Here are the photos she sent to me along with a few of mine...just so you get the idea.

Wednesday, February 2, 2011

A Call to Patriotism: Part II

Another day and my government office is closed.  Another day and my girls' school is closed.  Outside, icicles are dripping on the downspouts because it's 40F out but soon, it will be 15F.  The roads are covered in ice.  Inside, though, 3:30am is the same as it was yesterday and every day before.  Today, though, while the family slept, I stumbled upon a 1hr, 24min documentary titled "The Way We Get By" on Hulu.  Before we get to that, though, I will admit that I've read my own post on this topic multiple times and received a plethora of feedback...all good, actually.  Mostly thanks for raising awareness and also opening some doors for great discussion.  As I mentioned in the original Call to Patriotism post, I urged seeking out local ways to get involved. To that end, I did that in one small way.  The Wounded Warrior Project is an organization dedicated to those who return home wounded from war.  Their slogan is "The Greatest Casualty is Being Forgotten." They are a non-profit organization fully funded by donations.  Not being able to find a local chapter, I reached out via e-mail and immediately got a response guiding me to sign up on their volunteer form online so that I may be added to their database so when a need arises locally, they know how to get me.  Only a few hours later, I received an e-mail welcoming me to the family from a wounded Army soldier who is actively involved with the WWP.  This is just one step I've taken but will continue to seek out new ways to get involved.

Back to the documentary I watched this morning.  It is not what you might expect.  It is a story about 3 senior citizens who live in Bangor, Maine, near the airport where many of our troops last touch U.S. soil before heading over or where they first arrive back in the States.  They greet every soldier, shake every hand, both outbound and inbound.  It's a story both about strong, deep, unwavering, quiet patriotism that asks for nothing and wants nothing...from a generation that many have forgotten.  It's also a story about the stark reality of our troops constantly flooding in and out of Harm's Way while we go about our daily lives.  Watching them celebrate each 100,000th member is a visual reminder of the shear volume of service-members fighting the fight.  As the documentary closes, I was humbled as one of the older men, a Navy veteran of 32 years, pulled the protective plastic off of his dress blues uniform to attend a rainy Memorial Day parade.  That uniform was squared away, inspection ready!  A quote I pulled from this documentary was spoken by him about 2/3 of the way through (paraphrased): "I don't have anything else to live for.  My usefulness is gone.  But, as long as I can serve someone else, perhaps I can still be of some use."  Friends, that epitomizes a servant's heart and what true devotion is.

Tuesday, February 1, 2011

7 Baby Steps: the RTRSBM Version

13 months ago, Marjie and I pinky-swore to change everything we did money-related and commit to a new direction and way of life.  Today, that bond is stronger than ever and thriving.  This post is intended to give a basic understanding of the plan we are following, things we've done, things that we've altered, and the future that we are looking forward to.

A couple of foundation points:
The 7 Baby Steps are the logistical steps to follow with the ultimate goal to be 100% debt free with the ability to give and live "like no one else."  The most common phrase when hearing about Dave Ramsey is "Living like no one else today so that tomorrow, you can live like no one else."  Unfortunately, many tie that first part to living on nothing and suffering.  Today's post should prove at least one thing to you...that is extremely far from the truth.  Quite the opposite, actually.

This is the foundation.  You've got to have it in savings to prevent you from running to credit at the first sign of an emergency as you work through the plan.  If you hit it mid-plan, you simply pause and replenish it.  Have a large emergency fund already but also have debt outside of the mortgage, you bring it down to the $1000 level and put the rest straight on debt.  Tough, I know, but consider it more of a driving force to get out of debt faster.

As part of building this emergency fund, you must realize that the cornerstone of your financial life and most powerful tool is your income.  It is your weapon you take to battle to make it all work.  You need to maximize it and there are multiple ways to do so without actually getting a raise and you need to do these things as part of kicking off your plan:
  • Adjust your withholdings: how much of a tax return do you get each year?  Much more than a few hundred dollars?  If so, you need to stop loaning Uncle Sam your money interest free and put it in your pocket, your budget, and against your debt.  Let's say you get $5000 back, on average and get paid every other week, ie: 26 times per year.  That means that you are loaning Uncle Sam about $192 PER CHECK, interest free.  Wouldn't that be better in your hands so you decide what to do with it?  Forget the worksheet on your's based on an outdated system.  You need to start increasing your withholdings until you put this money in your pocket.  You'll probably have to make a few changes to your W-4 as you fine tune this adjustment as you cut off Uncle Sam.
  • Stop investing.  What?!?!  Yes...stop.  We stopped our 529 Plans (kids' college savings), idled Marjie's deferred comp at work, and initially stopped my 401K contribution.  Now, Dave Ramsey's plan calls for stopping the 401K even if given a match.  In all honesty and transparency, we did that, but re-started the matched amount only two months later.  Giving away free money for retirement was something I simply disagree with.  It's a minor, minor change, but one WE decided to do.  Everything else remains idled until later.  If we were contributing to an IRA, we would've idled that, too.
  • Can you sell anything?  Another common phrase in "Ramsey Land" is "Sell so much that your kids think they're next!"  Garage sales are awesome for this.  Don't look anything over in your house.  Open boxes, dig out the closets, clean out the garage...sell, sell, SELL!
  • Term Only: as a prior financial advisor, I used to believe in whole life insurance.  Whole (vs. Term) gains cash value over time and eventually pays for itself.  Typically, whole life is far more expensive than term because of that.  Term, on the other hand, gains no cash value but is worth much more.  Whole is a horrible "investment" and the better option would be to "self-insure" yourself later on to achieve the same ultimate goals of having that insurance.  So, we cashed in our whole life and kick-started our debt snowball.  On the flip side, we have maximized our term life coverage...typical goal is 10 times your annual income in term coverage...for each of you.  If you are a relative healthy, non-smoker, term is CHEAP!  You are being irresponsible if you are not protecting your family with term insurance.  Period.
Next, write out your debts, build your budget, and build your self-escrow plan: now you are going to face head on the numbers, the big "not talked about in public" numbers.  You can buy budgeting software, etc. but for me, I'm a big fan of Google Docs.  Word docs, Excel spreadsheets, etc. are all available for free and are accessible from anywhere.  No files to e-mail around and wonder which one is current, etc.  With my travel, I can access my budget and debt snowball from work, from my iPhone, or from the other side of the world, and Marjie can be viewing it with me in real time.  Awesome, simple, free tool.
  • First Tab on your Google Doc: Across the top, list your debts smallest to largest, including your mortgage.  One column per debt: ie: Kohl's card, Mastercard, school loan, car #1 loan, equity loan, mortgage.  On the left, list the months starting with the current month and list them month by month for the next two years.  Column A should all be months.  Now you have the framework built.  Next, log in to all your accounts and type in the current balance...remember, smallest to largest, left to right, ignoring any interest rates.  Don't skip anything.  List everything!!!  As you work through your plan, you will come back to this tab on the 1st of each month and type in the balance.  As you zero out a debt, you will close that account and stop recording the zeroes.  Can you picture the ladder forming on your spreadsheet?  That simple graphic will help keep you moving as you achieve your short-term goals.
  • Next tab: your budget.  For over 17 years of marriage, we had no budget.  We lived paycheck to paycheck.  It didn't matter what we made.  More, less, it didn't matter!  We just spent what we had and prayed nothing bounced.  It never did and we were proud of a great FICO score!  We could buy anything!!!   ON DEBT!!!  WOOT!!  That's so normal today but so wrong...but we as a nation have been brainwashed that it is normal...which it is.  Normal IS wrong.  Debt Free is right and weird.  Yes, your goal here is to be WEIRD!  Anyway, your budget: for us, we get paid weekly so our budget is built on a weekly basis.  Yours may be different.  The top is the take home income followed by the necessities.  Here are some pillars of our budget:
    • Groceries: cash amount each week withdrawn from ATM.  Cash only.
    • Allowance: we each get one weekly and if we want something, we save for it.
    • Gas: you should have an idea how much you need to make it to the next budget
    • Self-Escrow Account: see later in this post for this.
    • Mortgage (we break our mortgage into weekly amounts and sweep that into savings each week but make the payment once a month)
    • Monthly bills as they become due
    • Tithe for church
    • Entertainment Fund (what we use to do extras like restaurants)
    • Vacation Fund (weekly amount to save for vacation or Christmas)
  • Self Escrow Account: OK, this is my own creation but let me tell you, it is a "work of art"!  You know how you have those bills like the sewer, water, and trash bills that perhaps come everything 2 or 3 months?  For us, our taxes are not part of our mortgage and that monster bill comes every six months.  We also have our security monitoring, lawn care, timeshare maintenance fee (timeshare is owned free and clear and deeded for life), and a few other items.  These bills, depending on when they show up, can be the "perfect storm" and derail your forward momentum.  What we do is "self escrow" an amount every single week.  That amount is found this way: we convert all the bills into a yearly amount.  For example, let's say the trash bill is $45 and it comes every 3 months.  That's $15 a month and $180 a year.  Take $180 and divide that by 52 weeks.  That is the amount for that bill that needs "swept" into savings each week.  Using simple formulas on the Excel spreadsheet, you do this for every bill and determine the amount needed in total to sweep to savings.  When those bills show up, you simple write the check.  Zero emotion, zero worry.  The money is there and makes no impact on your debt snowball.  For us, this is a major and critical component to our budget.
You are ready!  Your plan at each payday is to go right down your spreadsheet and knock each thing out...immediately.  Give every cent a name and tell it where to go, not the other way around.  YOU take control of your most powerful resource, your income.  Your goal each payday is to zero out the bottom.  Always, the bottom line is "Debt Payment."  Whatever is next, from smallest to largest on your debt tab, gets that amount in full.  Nearly all people who build this budget start finding money they swore didn't exist nearly immediately.  When you budget and tell your money where to go, you find more of it.  Hard to believe until you see it happen before your eyes.  KEY POINT: you must zero that budget out quickly or you'll find yourself adding line items to your budget as supposed "must-haves" appear in your daily life, thus killing your debt payment.  If it's not budgeted, it doesn't happen!  Period!  Remember, you pinky-sweared to your spouse (if married) that you'd adhere to the budget and be fully accountable to each other, right?  Right.  As you attack and pay off each debt, you'll free up more cash and can put more towards the next debt, hence the reason for the term "snowball."

What about emergencies?  What if the the washing machine dies?  Remember that baby emergency fund? In the last 13 months, we have replaced our dishwasher, put new brakes on Marjie's 2006 Honda and put 4 new tires on it as well.  Those 3 items were far more than the $1000 but of course, didn't all happen together.  We simply took a pause in our debt payment and paid what needed to be paid.  If we had to touch the $1000, we did so but immediately at the next check, replenished it.  See how we didn't use credit or take a loan to pay for the "emergency?"  That fund keeps you honest and on track and AWAY from borrowing any more money.

What you've been reading above is the machine that makes the snowball roll.  You simply live to the budget, stay accountable to it, and watch it happen.  IT IS REALLY THAT SIMPLE.  Even though we've 'restricted' ourselves to a budget, we honestly feel that we have more money than ever before, tithe (give) more than ever before, and have ZERO stress over money.  Why?  Because we have a plan and there are no surprises.  I can't stress enough how truly easy it is once you "get sick and tired of being sick and tired" and sit down and do it.  Enriched marriage, complete stress removal, and a path to true financial freedom and the ability to give like never before.

As you pay off each debt, celebrate!  Cut up the credit card, take a picture of the payoff notice or you holding the title to your car...celebrate!  At the same time, swear to never return again to that place.  From now on, you will save and pay in cash.  Never be a slave to the lender again!  Don't forget to update your 1st of the month balances, either.  This is a great motivational tool to propel yourselves forward.

When you arrive here (we're not quite there yet), you will have NOTHING left but the mortgage.  That includes an equity loan if you have one...that's part of the debt snowball in Step #2.  Now, you build up 3 to 6 months of living expenses and store it in savings.  This should be easy at this point because you've been living on a budget and it's all written down in front of you.  You just need to add it up.  Plus, you have far less bills to pay, too. :-)  For us, we're going to go for 6 months but it's a case-by-case basis.  We plan to store it in a money market fund that doesn't earn a whole lot but is very accessible if necessary to access it.  Once done, move on to Step #4!

Time to max out Roth IRAs (Individual Retirement Accounts) and start up your pre-tax 401Ks or 403Bs at work.  Roth IRA's are funded using your take home income (money you've already paid tax on) and grow tax free and taxes on your earnings from the growth are tax free.  You should max these out and invest them in mature, diversified mutual funds.  I'll stop there with my financial guidance as I'm no longer in the business of giving financial advice.  As for  your 401K, at least contribute what they are matching.  All in all, you should be contributing 15% of your income into retirement savings.  That's the benchmark...15%.  Once you've reached the 15% level, you are done with Baby Step #4.  This should simply be a matter of getting it set up and turning the switch on.  Do not linger on this step!  Get moving!

Obviously, this can look very different for every single family.  529 college savings plans and Coverdell accounts are the most popular and work very similar to Roth IRAs in terms of tax advantages, as long as they are used for education.  The goal here is to not send your kids to college on debt.  Your lessons learned now should spill into your kids' lives.  Yea, they might join the military and get it all paid for or may be a tradesman and never go to college...who knows.  There is no benchmark for this baby step but lots of advice out there.  Start here.  Once you have it up and running regardless of your plan, move on!  No lingering, folks!

Oh yea, this is the exciting part.  "But Nick, it's to our advantage to have a mortgage and get the tax write off.  Right?"  What a HUGE misconception that I once had.  Let's break it down: If you have a $200,000 mortgage at 5%, you would have a $10,000 tax deduction. With your income, you’re in a 35% tax bracket. That means with your income you would pay about $3,500 in taxes. So the math you are working says you should send $10,000 to the bank to keep from sending $3,500 to the government.  Make sense?  The money saved by paying no mortgage but paying the taxes is FAR MORE than having a mortgage payment and getting the "deduction."  This has been a huge brainwashing in our country and one that just keeps getting spread by every mortgage lender out there.  Anyway, you now are free to attack your mortgage, guns blazing!  You are debt free but the house, borrow nothing, have 3 to 6 months of living expenses saved, fueling your retirement at 15%, funding college, and now can blast your mortgage.  For us, our goal is before our oldest graduates high school...about 8-9 years from now.  That would pay our mortgage off about 15 years early.   Do THAT math!

Debt Free!!  We can't wait for the day!  We already tried some extra giving on a very small scale a few weeks ago.  We were at Outback Steakhouse and received great service.  It was a very "weird" feeling but we decided to give it a go.  We tipped like 40% or something like that.  While I wanted to peek through the blinds outside and watch her surprise, I didn't.  It felt...well....awesome.  That was so simple and so minor, but it was just a taste of what it feels like to "give like no one else."  WE CANNOT WAIT FOR THIS STEP!  Yea, the wealth building will be nice, but we really want to give spontaneously and often.

Friends, that's the plan.  Our testimony is this: this complete switch that we "cold-turkey'd" 13 months ago has changed our life.  It has enriched our marriage.  It has put us on firm footing to do so much more.  Not the material things, mind you, but for others.  In the past year, we've given more than ever before yet we've paid down thousands and thousands of dollars in debt.  We are proof that it works.  I can't tell you how cool it is to go on vacation, paying for everything in cash, having some left over at the end, AND paying off a car while there!  I used to say that cash is the same as my check card with my bank...after all, it comes from the same place, right?  Yes...and no.  There is an emotional connectional when you hand over cold hard cash for a product vs. swiping your check card.  You order at a restaurant differently, you visit Starbucks less often (well, I actually increased my frequency but use my do so!), and it just changes your perspective on everything.  Trust's not the same.

To you, a swift kick where you need it to become "gazelle intense" and become debt free.  We are living it and hopefully, you can garner this intensity and become "gazelle-like" yourself.  Being weird..."living today like no one else so that later, you can live like no one else," is our new 'normal' and I gotta tell you, it's AWESOME! 

Saturday, January 29, 2011

A Call to Patriotism

I'm really not a fan of Oprah Winfrey but Marjie does DVR each show and watches some of them.  Today, she was working through the DVR, deleting some things, watching others, and then came across Oprah's show from a few days ago.  The show was about military families and the 2 wars going on right now, the longest running wars in our nation's history.  Tom Brokaw, famed journalist Bob Woodward, and the First Lady, Michelle Obama, were all guests.  Did you know that < 1% of our country's population is in the military, defending our freedom?  Amazing stat that I did not know.  Also true is that unless you know someone who is in, you probably don't give much thought to the military and the two wars.  No, this is not a blanket statement to ALL (so don't go get offended if you don't fit that mold), but it is typical.  It's most obvious in the press where not much attention is given at all and in the daily newspaper.  Usually, something war-related is in the paper but it's buried somewhere in the back unless it impacts a family locally.  As I watched the show, I was flooded with emotion.  I was angry at times.  I was on the brink of tears at other times.  Angry because so many people are ignorant to the fact that we have two wars going on (go ahead and believe Iraq is done...and you'd be wrong) and the impact this has on not only the soldier, sailor, airman, or Marine, but to the family who waits at home or the family who is left behind if the unthinkable happens.  America is sleeping to the fact of these two wars and people actually believe we're done with Afghanistan in'd be wrong.  Listen to me: whether you agree or disagree with the wars...well, I really couldn't care less.  The fact is that we're in them...period.  We, as a nation, as Americans, are in them!  We, as a nation, need to do a better job at recognizing that and stop thinking of those who serve and their families on the designated holidays only.  Patriotism is a 365 day job.  Period.

One story rocked me to the core.  I am so proud and thankful for this soldier.  I am so proud and thankful for his wife, too.  She's a hero, herself.  These stories are far more common than you think but we don't hear much.  In my opinion, this is due in large part to the military member's and family's "we can do it on our own" belief.  I know that belief.  I have it.  I feel the exact same way in our home.  So, when something happens, it is very rare that the impacted family is going to go looking for help and hold their hands out.  HIGHLY unlikely.  They're strong.  They're united.  They can handle it..or so they think.  The truth is that they need others to truly care to come alongside them and love them.  Watch this...please:
The thing is this: you can't make someone be patriotic...I mean truly patriotic to their core.  I don't know if it's upbringing, the immediate society that surrounds someone...I don't know.  Back during Vietnam, soldiers were NOT welcomed home with open arms.  Many were hateful to them.  We don't see that, today...thankfully, but we really don't much of anything.  We hear "economy, economy, economy" or why the Speaker of the House cries so much or how many jobs the government is going to create.  (oh yea, the government can't create jobs...we the people do that)  Why does something on such a large scale have to happen to get people to fly their flag and support those who stand as surrogates for them while they sleep safe and sound at home in the U.S. of A?  WHY?!?!?

Instead of posting a tribute video (which I almost did) or a Toby Keith video (I'll save that for another fist-raising kind of day), I thought I'd share a video that my girls came running to watch when they heard it.  It's a video about celebrating families, love, and bringing our brothers and sisters home.  The truth about awareness sung loud as they watched it: a friend was over who was also standing there...had no idea what she was watching...not a clue.  I didn't have to say a word, girls were all over that!  "Those are soldiers!  They just came home from war!"  Dangit, I love them!
At the end of Oprah's show, Michelle Obama came out and announced that in March, her and the Vice President's wife are teaming up in some kind of military family support initiative.  Lots of the details can be found at I took a look and there's some pretty great info on there.

If you felt a cattle prod while reading this...good!  We all can stand to do more, support more, and show that support to both our military and their families.