As I continue to add information about our Financial Independence project, I wanted to provide a little bit of context of how we arrived at the point we are currently at. After all we are “officially” starting this project with a Net Worth at a little over $600,000. I mentioned in my introduction about making a few smart money moves earlier in our life, even though we were not thinking in terms of FI. Many of those decisions are what allowed us to be in the position we currently are in and able to reach our goals in a relatively short amount of time. Of course while we did do a lot of smart things, we also made some decisions that put us behind where we could be right now, but you can’t change the past, only learn from it. Ultimately when comparing ourselves with the statistical averages in the United States, it is hard to complain about our current position, especially since nothing in our life has been handed to us or passed down from family.
I figure many of my posts in the future will contain elements of lessons learned and life events that shaped my current thinking, but in this post I wanted to focus on some of the major financial milestones that I have personally accomplished and experienced up to this point by looking at my job history.
The Early Years
Growing up I started like many kids do mowing lawns, raking leaves, and other types of jobs around my neighborhood to make money before I was legally old enough to work for someone else. This resulted in my first experience actually having money and trying to figure out what to do with it. I grew up in a rural area so the temptations to spend significant amounts of money on frivolous things was minimal. During this time I did not have a lot of experience, education, or role models when it came to financial concepts and issues. I did however grasp the idea of if you want something you have to work for it. Growing up both of my parents worked and I would say that we lived somewhere in that huge range of what would be considered a middle class family, probably at the lower end by most definitions, but we did benefit by living in an extremely low cost of living area. Most of the money I made from doing yard work for others I saved for one primary goal, and that was to eventually have a vehicle. For anyone growing up in a rural area, you can probably relate to the desire for transportation to be able to get away especially when any type of entertainment like a movie theater is a 45 miles away.
When I turned 15 I took my first “official” job during the summer at the Boys Club in a nearby city working for minimum wage which at the time was $3.33 an hour. My father would drop me off each day before he went to work and pick me up at the end of the day for our 45 mile drive home. This was actually a very enjoyable job where I spent most of my days playing sports and games with younger kids. When I turned 16 I worked at McDonald’s for a year and a half followed by Pizza Hut for another year making about $4.25 an hour. I am not sure I really learned a lot during this time about money and managing my finances, but I certainly learned a lot about the type of job I did not want to have in my future. What did make an impression on me during the time was developing a strong sense of work ethic. By this time in my life my parents had divorced and I was pretty much left to fend for myself especially if I wanted to buy anything. Most of the money I had saved and my current paychecks from these two jobs was used to buy a vehicle which was at the time was one of my primary reasons for working.
The College Years Part 1
When I finished high school I went to as good state university in Florida to pursue a double major in psychology and music. Eventually I switched my psychology major to a minor and fully pursued a music degree due to limited time resources. Obviously I was not thinking about ROI when I chose my major, but I was pursuing what I was passionate about at the time. I did not have any financial support from my parents for college nor was there any college savings accounts or anything similar to help me with my costs. I had several academic scholarships that covered a significant amount of my tuition and book costs, but I had to work the entire time during my undergraduate degree to support myself. I found a job working on campus in the College of Business that evolved into a network administrator position that actually was a good paying job, especially for a college student. I was originally hired to run ethernet cables throughout the college but quickly picked up on managing both Unix and Windows NT servers and took over the network admin position for one of the departments in the College of Business during my second year. At that point I was working about 35 hours a week at around $16 an hour. I also picked up a retail job in the mall selling clothing for a while when my schedule allowed. Ultimately I was able to complete my undergrad degree with zero debt and actually save money during the process.
When I finished my undergraduate degree I decided to stay and work on two master’s degrees, one in Music Education and one in Cognitive Psychology. I was motivated to stay because I still had a fairly decent paying job with the university and wanted to fill the gap on the psychology side that I missed during my undergrad. I only stayed for one year before I went out and took my first teaching job, returning the following summer to complete my degrees.
High School Teaching
After completing the majority of my graduate coursework in one year I decided that I wanted to go out and get a teaching job. A lot of this was motivated by passion rather than making more money, as evidenced by the fact that I took a fairly steep pay cut leaving my network admin job to teach. My first teaching salary was $26,401, but that only lasted for one year before I moved to another school district to increase my base salary to almost $36,000 a year. While my base salary was fairly low I was able to do a few things to increase that number. First, by taking on activities at the school I was able to get a salary supplement each year of about $4,000. I was also able to get $1,500 more by working two additional weeks during my normal summer break. Finally, through the school district’s adult education program I was able to teach two courses in the afterschool and evening programs which netted about $10,000 a year. I taught high school for six years and five of those years I was making between $51,000 – $55,000 a year with about two months off each year between the holidays and summer break.
During this time I not only went back to complete my two graduate degrees, but I completed a third master’s degree that ultimately would become my new career field.
While I was still teaching high school I decided to start a couple of side projects to make additional income. The first one was a summer camp program I created for middle and high school students that I organized and ran for four years. The camps did fairly well bringing in revenue but by the time I paid all the staff I needed to hire and other expenses I probably personally netted $12,000 total. It was not a significant amount of profit, but it did teach me a lot about running a side business.
Near the end of my teaching career I launched another business that primarily focused on online learning and training. One of the biggest parts of the business was a set of courses I created on leadership targeted to high school and college students. These courses were delivered completely online in a sequence where the students who started the first courses typically took a set of four courses over two years. It was a very niche market but quickly grew to a size that required hiring and paying many staff to teach the courses since they were not self-paced independent courses and required instructors. Between those courses and other areas of business (primarily consulting) this business did fairly well for about four years before I decided to sell it to a third party. I wish I could say that selling this business made me financially independent, but I financed the buyer’s purchase over a five year period and they went bankrupt after the first year (more on the lessons learned from this later).
College Years Part 2 (or three or four…)
In 2006 I decided to return to school to complete a Ph.D. with a primary research focus on learning, cognition, and systems thinking. Prior to starting the program, I was awarded a teaching and research assistantship that paid a large majority of my tuition (for a certain amount of hours) and a small stipend that equated to a salary of about $12,000 a year. During this time I took on student loans, primarily to increase the speed I was moving through the program, since my assistantship only covered 9 credit hours a semester. I completed my Ph.D. in two years and a couple of months (more on that later) which helped to control some costs associated with living expenses, but did increase my tuition and fees bill. I will also admit that it was hard to get back to spending like a college student after being out working for previous six years. Looking back this was one of the less than desirable financial decisions I made, and I spent four years paying of these student loans.
Immediately after completing my Ph.D. I was hired as a research faculty member to work on a grant I helped to secure and worked in that position for about a year and a half. The pay was actually quite low at about $45,000 a year.
After working as a research faculty member I found a tenure-track faculty position at a private R2 university with a student population of about 7,500 students. My starting salary at this job was only $56,000 which really was about the same as my salary my last year teaching high school. At the time I attracted to far more than the pay and benefits of this job. In fact probably would have accepted a lower salary if needed to secure the position. I did negotiate for a significant pay raise three years into the job putting me currently at a base salary of around $71,000. I have a fair amount to say about my current job in a future post, so I will just end my discussion about my past jobs here and leave the present to future posts.
Looking back on the jobs and career I have had up to this point provides some context and perspective on my current journey to financial independence. The one thing that I have consistently done throughout all the years was usually having some other money making activity in addition to my primary job. While I have never had a salary as high as some on the path to FI, I will admit I have done fairly well on the income side. Most of this is due to trading a significant amount of what would be free time for others into time that I could use to make money. Even working in my current job I have still found time to teach music lessons on the side in addition to now working with my wife in the business she just started. Thinking in terms of financial independence for our family, it is not the income side that needs the most work, but rather the spending side that we are going to focus on the most over the next few years.