ESI Money - Bro

One of my favorite blogs is called ESI Money. ESI’s (the author's pen name) main point is that there are really 3 main factors in getting wealthy; Earning, Saving, and Investing. As part of this he has a scale to judge how well a person is doing in each category. As a tip of the hat to ESI I figured I would examine each area of my finances and see how well I am doing. As with all things there are areas to improve as well.

Earnings: Excellent
I am very blessed in this area. I found something I really like to do. I have worked very hard at it and have learned a lot. Due to this I have become valuable to the company I work for and they compensate me for it. I am easily in the top 10% of all earners in the US in spite of my fairly young age.

My income has risen very fast but I don’t see it going up a ton more. In addition my income is not very predictable. So far it has been fairly stable but the industry I work in is very much boom  or  bust. I don’t see any major side hustling in my future so the main way to improve my earnings is to work hard and focus on “making my boss look good”.

Savings: Excellent
When ESI made this scale he said saving anything over saving 40% is excellent (I agree). My savings rate is just a smidge over 40%. Using the shockingly simple math behind early retirement this puts financial independence at 22 years (if I were starting at a 0 net worth). That being said I would say that I am just barely excellent.

Overall 40% is nothing to sneeze at but compared to the leaders in the FI space this is nothing special. In this case I am happy to be nothing special. I enjoy traveling and have been know to live it up a bit. My main goal is to maintain where we are despite some new expenses in our life (my new car and our cabin). Of the three areas I would say that this one has the most room for improvement. It is just a matter of if I want to improve this area.

Investing: Good
I am a firm believer in index investing. I do not try to pick stock or time the market. The idea of being a landlord gives me the cold sweats and I am not much of an entrepreneur at the moment (though I am open to this idea).  

I am not really sure how to improve this one. I agree with ESI that it is almost impossible to be anything besides good. I don’t believe in picking individual stocks (I am not so conceited as to think I can beat the people who do it for a living). I am not too keen on being a landlord and the more hands off realestate does not really return anything close to the stock market. In the end I am perfectly happy to be “good”.

Thanks to ESI for the great blog. I find his writing good and his thoughts unique compared to the many finance blogs out there.

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