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.
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”.
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.
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.