Joseph Bahan has made significant improvements this school year as exhibited in our year end test results. Joseph loves to read. He reads to the class and buddy reads with classmates. Joseph also loves science and trying experiments.
Congratulations Joseph!
– Fruitville Elementary, Mrs Voss

We are so proud of our Joseph, he is growing and learning so much. Keep up the great work.

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Several months ago Papa mentioned that he thought I would like a guru in the financial community named “Dave Ramsey”. Having heard the name in passing, though had never paid much attention, I started listening to his radio show via a podcast and reading some of his materials – even buying and reading his book Entreleadership. What I found was that from a financial perspective our experience and perspective was very similar to his teaching.
Then early this year Papa again called, this time to mention that the Ramsey was coming to Orlando and he thought we should go. So, this past Saturday that is what we did.
The event, “Total Money Makeover LIVE”, was a 5 hour long presentation at the UCF Arena which was packed with about 8000 people (according to their numbers). Dave was speaking in person and he went over his seven core “baby steps” to financial freedom.
Step 1: Get a $1000 financial buffer
Step 2: Pay of all debts (except the mortgage)
Step 3: Put together 3-6 month living expenses
Step 4: Start both Roth IRA and 401(k) retirements fund, at a high 15% of your wage
Step 5: Start putting away for your child’s education
Step 6: Pay down your mortgage early (says average for those in the program is about 7 years)
Step 7: Invest and give back
Though, steps 4-7 are continuous and concurrent – the step defines more the process of setting it up and letting it run its course. Step 6 is really the only one that that really has an end date outside of retirement.
Overall, the event was well done. Dave doesn’t like credit, so tickets and merchandise could only be paid for via debit or cash. However, we were disappointed that (either then or the facility) did not allow packed lunches or snacks – even for the kids. We could also have done without the sales pitches to end each segment, but he is selling books and such so it was not unexpected. I also have to say the prices were reasonable, and they separated the message from the sales pitch for the most part.
I also disagreed with some of his political message that seeped through. I, like everyone, don’t like paying taxes – though I disagree with cutting them or feeling slighted for being taxes on investments (no … sorry … you didn’t work for that money). And people don’t spend money “better” than the government, you just spend it better on yourself – very different.
This was the right-wing vibe that gets him on the same radio stations as Mr. Limbaugh, but if you keep an open mind he did have a lot of good things to say.
So what did we learn
Really we came out with more questions we will have to follow up on, the big thing was more learning how to move forward from where we are. We had stagnated and waffled on what to do next for some time, so it was nice to see things laid out a little better.
We had step 1 covered for the simple fact that it allowed us to save a $4 bank service fee, additionally we try to work primarily off debit rather than off a credit card. We have found, from experience, the snowball concept his describes to be highly effective – essentially target the smallest card and pay it off, then move to the next one, all the while paying ONLY minimums on the other debts.
It was also nice to learn that one should not just focus on a 401(k), as was our thoughts, but spread across that AND a Roth IRA (for those in Canada look to RSPs) – both these programs allow your money to grow tax free and thus are a great way to build up for retirement. It was also suggested to put as much as 15% of your pay in these accounts – which just seems like a lot but is far less than the mortgage.
The other key to the steps is that this retirement building doesn’t start until AFTER you have 3-6 months of expenses in the bank (liquid funds). So, essentially, build up a small self-insurance reserve for those “life bills” before you move to investing in the future. This allows the investments to continue and lows the chance you will need to pull from them earlier.
As for our children’s education, we are not entirely in line with his concepts – we instead might get a little more complicated here. For one, we are not looking to pay for our children’s education – they will be … at least a good portion of it. We feel the boys will learn more and appreciate more if they have to fend more for themselves. So, I think what we will do is start offering a saving match when the kids get to be of working age and then a graduated scale re-embirsement of tuition costs for those courses the boys take. Though we have another 16 years to work out the specifics.
One thing he did mention was there there was a government sponsored fund that worked much like the 401k or IRA that was specific for education – a RESP in Canada – which we will be looking more into shortly.
What I found interesting was that the home mortgage pay-back was so far down the list, though I guess due to the long term nature of that payment plan you don’t want to hold off your retirement-based investments. When you start out the process you cut everything to the core needs – and even sell what you can to pay off those early debts – this includes stopping any current investment plans.
Once the debts are paid off and you have your living buffers in place, it is time to restart those so in step 4 & 5 you setup your retirement and education investment plans, but continue living on a trimmed budge otherwise putting all savings towards the house. Only once you are completely debt free can you relax a little – though you want to maintain a strong savings and investment plan.
The biggest key to the whole process – stop borrowing money. Save to buy rather than buy and repay. Big items like a car and a house are more difficult here, but are NOT exempt. It is hard to think of paying for a house or a car in cash, that requires a long term plan – but it is possible. The “FICO score” only represents your credit – not your buying power or net worth. It is not required.
So we have once again focused around our budget and are forming our “written plan”, once again setting down our goals and milestones. We know the process works, so after relaxing for a while it is time to put our eye back on the ball.
We were honestly surprised as how much money we were losing through the cracks of life over the last couple months. Create a written plan and see what it does to your life.
Thanks Papa once again for passing on your knowledge once more…

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Darren Barefoot posted an update to his 100 Things to do before I die article.
This got me thinking, I don’t have a list like this and truth be told I don’t instantly have many realistic, but currently unplanned, desires that instantly come to mind. However, Darren provides a lot of inspiration. So I started my “bucket list” with a shorter list of 10, in no particular order:
1. Publish a book
2. Own and Operate a software company (with more than just 1 employee)
3. Live 6 months in Europe
4. Volunteer on an archaeological dig
5. Volunteer on a paleontology dig
6. Walk to Tundra
7. Walk the Great Wall of China
8. Orbit the earth
9. Be a presenter at a conference (sales demos don’t count)
10. Visit the Maritimes
I think this is a good start, and I think a good time to reflect on these desires as we look to New Years.

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“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” – Steve Jobs

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