The Money Diaries: The 20-something freelance writer who spends his summers relaxing at a resort

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Today is another post in the Money Diaries series, which is based off New York Magazine’s Sex Diaries. We’ve collected stories from real people about their spending habits over seven days, anonymized them, and posted them here.

This week’s post is by a 20-something freelance writer who spends his summers living at the resort where his wife works and enjoying all of his free time. Is he living the dream…or mooching off others’ hard work and generosity?

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Day 1

10:30 a.m.: I’m doing volunteer work at the county fair today, so I’m staying with friends. They feed me well (doughnuts!) so not only am I not spending anything, I’m not using my own food either. Meanwhile, back at the resort where my wife works, she’s getting $90 in tips from guests along with $700 cash (her weekly salary). She’s also collecting any good food guests left in their cabins after the week. We score cheese, a veggie tray, and some pie, but no six-pack of imported beer like she found a month ago.
5:00 p.m.: One of the other guys volunteering brings dinner. Still, an hour or so later, my friend and I split more fair food and lemonade. When in Rome…$6.

Day 2

8:45 a.m.: My wife and I leave for church. It’s an hour and a half away, and there are dozens of closer churches, but we think the time and gas money for the weekly round trip is worth it for the quality of the Bible teaching. We spend extravagantly on what matters to us, and this is one of those things.
11:45 a.m.: We have extra money in our grocery budget, so I decide to purchase nine bottles of unusual craft bemer from an online store for $60. Totally worth it.
12:00 p.m.: Date time. We go to a suspiciously low-priced Chinese buffet (crab legs and sushi for $10???), then hit the bookstore for some cheap books. After spending $15 for three books we find an even cheaper deal right outside-a used book sale. $5 gets us a paper bag full of 10 or 15 books, some of which I would have paid $5 each for.

Day 3

8:00 a.m.: I worry about the alleged “double dip” recession. I’ve got this idea I call “two-way dollar cost averaging”. They say you should buy stocks at a steady rate and not try to time the market. Well, if that’s really true, I can put nearly all savings into stocks as money comes in and when I need some I can withdraw it at a steady rate also. On balance, I should be making 8% a year instead of 0.0% or whatever savings accounts currently pay. I don’t care if I lose money some years, since on average, over a lifetime, I should gain more than I lose. Here’s how it would work to go both ways. We have $10,000 or so saved after the summer that we plan on spending throughout the year. So we’ll buy 10 stocks (I always buy stocks in $1,000 increments), which brings our total to about 40. When we need a few thousand here and there, we’ll just sell a hundred or so dollars worth of each stock. (I can get 20 trades a month at $1 each so I’m not worried about commissions). So every year we will end up with 10 more stocks (diversification!) and the value will gradually grow, even though we will be siphoning off money throughout the year. What if we lose money? You’re not supposed to time the market, right? I really hope my strategy isn’t stupid.
12:26 p.m.: Got a bill so my wife grabbed our checkbook. I’m not sure how much the bill is for, but it doesn’t matter because she will write it down and subtract it from our housing budget. We have at least 10 budget sub-accounts, but since we bank locally we just do the math on paper instead of via ING. Neither of us would ever spend it just because it’s there, so the numbers on our budget books are barriers enough to prevent us from overspending in a category.
5:00 p.m.: I work from home, and in summer I live at the resort where my wife works. (I’ve got several freelance projects in addition to my salaried job as an editor for 20k a year, with benefits). Today I’m actually way ahead on both counts so I spend the day reading Jane Austen. Dinner is pot pies my wife’s grandpa picked up for us. We cook for him sometimes, and besides, she’s his granddaughter, so we eat his food a lot. After dinner a resort guest gives us a couple of extra enchiladas-free dinner tomorrow.
8:40 p.m.: Reflecting on tomorrow’s plans. I will touch base about a couple of writing projects I’m doing for a client on the side. The gig is writing technical but rather puffy trade journal articles to loosely steer readers to this guy’s products without being too obvious about it. He’s paying me $400 for each of five articles (four are on the same topic, so not too much research!) and $600 to submit them to the magazines. Even adding in a couple of meetings, time it took me to write the proposal, etc, it’s looking like about $50 an hour. That’s pretty good for me, since most of my freelance writing averages out closer to $25 an hour.

Day 4

10:00 a.m.: I walked down the hill to the main lodge to eat and work. This commute is relatively inexpensive. Checked stocks…we’ve lost 20% on paper in the last year. I won’t lock it in by selling, though.
8:00 p.m.: Spent nothing all day. Not proud of that because I’m not against spending by any means, but that’s how it ended up happening. Going to work out. During the summer I work out alone with my kettlebell or go running. Free!
9:56 p.m.: My wife balanced our budget. We are in the black in every category: $433 medical, $76 clothes, $500 food, $122 miscellaneous, $214 charity, $747 housing, $304 auto, $286 fun. Some of that is intended for future problems (car breaks, etc). We also have a separate “long term” account for things that are guaranteed like property tax, car insurance, etc.

Day 5

9:14 a.m.: Tomorrow I have to drive back home for a meeting. I plan to add money to our long-term “account” (really just a balance sheet, all our money is really in stocks or our checking account) for taxes and insurance. We have $6,140.85 in there now, but only because we got a heavy tax refund for our house. We will use it for home stuff (repairs, etc).
11:11 a.m.: Just got a call from the only person I supervise – an unpaid intern at our magazine. She finished another round of difficult tasks and wanted to know if I had more work for her. I am consistently floored by her diligence. I am very close to hiring her as an assistant for my freelance work. I don’t know exactly what I would have her do, but she’s so reliable that I don’t want to lose her. Lead generation? Following up on my freelance queries for me? I don’t know yet, but once I figure it out, this has the potential to be a very good thing.
5:00 p.m.: Was going to buy pizza for a group event, but everyone cancels except my brother and my wife (via Skype) so we eat with my parents.

Day 6

11:15 a.m.: After my work meeting, I drop off a couple of checks at the bank – $256 for a freelance article I wrote and a $29 rebate when I cancelled our Internet for the summer. I’ll call and re-negotiate the price when we get back in the fall. Promos are usually $30 or $35 a month but regular rate is $50. I don’t want to pay regular rate. Buy gas for $35, ask for student discount (wife is a college student) and use loyalty program discount. Wow — 80 cents saved. Maybe I’ll splurge on a quarter of a gallon of gas. That gas discount feels completely worthless, but I just did the math and it gets me 9 miles (one extra short round trip per tank) so I guess it’s worth asking for.
5:00 p.m.: I wake up from a nap. I like working from home. Most of today I spend hanging around and reading for fun. One reason I’ve stuck with my low-paying job as long as I have is the unbelievable flexibility. I’ve tried negotiating a better salary two or three times in the last three years but I doubt I’ll be successful as our company really isn’t very profitable yet. There are only five of us and the owner is pretty open about sharing our monthly revenue and costs with us. I also don’t know how I could find a job that’s this flexible anywhere else.
1:00 a.m.: Entertaining and free evening. Worked out with a friend at my dad’s home gym (we were going to use free guest passes at a fitness center, but my friend couldn’t find them. So it would have been free either way.) Then played guitar. Ate stuff from the fridge.

Day 7

10:00 a.m.: Sore from doing weighted pull-ups at 122% bodyweight. Thought I’d throw that in there to see if someone leaves a comment below about how awesomely strong I am.
7:00 p.m.: Drive back to the resort. I get paid sometime next week, but I don’t keep track because we spend based on our budget, not our checks. It’s been a fairly average week. My only regret is not spending time on lead generation or pitch letters. Oh well, you don’t always have a great week. But, I’m on my sixth year of freelancing, and I’m not going to give up now.

In Sum

Spent: $150 (I didn’t buy the beer yet)
Made: $1,075

But that’s not really how I view money. Dollars in and out per week isn’t a good index. We save what my wife makes in the summer and spend it all year, and our expenses are usually higher-heating oil, food, utilities, etc. We really rely on our multiple category budget to tell us what we have, what we can spend, etc. It’s helpful to see the numbers going from red to black and it allows us to be conscious of what we’re spending. My only concern is that I focus too much on money. Automation might help, but I think it’s a mindset issue more than anything else.

* * *

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18 Comments

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  1. I know Ramit says it’s easy to criticize the spending habits of others. He’s right. It is easy!

    It seems this guy is dropping money on individual stocks, which probably means he’s got a poor allocation of his assets. He’s also apparently toying with the idea of going 100% in equities, to the point of abandoning his savings account. That’s probably not a great idea, even for a young guy.

    It also seems like he’s got it into his head that he should never shift around the individual stocks he’s bought.

    For a guy that seems to like a low-stress lifestyle he’s chosen the most stressful way to manage his long-term savings.

    Also, did he not tithe anything at that church he likes so much?

    • Your question on the tithe is a pretty valid point, Brandon. He doesn’t mention that, but I’d hope that he does, considering the credence he gives to its quality.

  2. For your investments, you should look at Target Funds (also known as Lifecycle Funds) or even just straight indexed funds (SPY is the classic one). You get diversity automatically, and you don’t pay at all for trades. You are NOT good enough to pick 10, 20, or even 30 stocks that will perform at 8% over the long term.

    Otherwise, it looks like you’ve got it pretty together. I also value flexibility extremely highly in my job :)

  3. I think it’s really good that he’s very aware of the money he’s earning and spending. That may come with the territory as a freelancer, though. I also don’t fault him for all the free stuff. I don’t necessarily consider it mooching, but that may be just me.

    As far as his investment strategy, I think he’s applying good principles to the wrong kinds of investments. The principles he quotes are more fitting for a more IWT-based approach to investing – index funds and life-cycle funds that you won’t jump in and out of. I don’t think buying individual stocks fits as well with that principle, unless you’re buying a lot of different stocks and achieving diversity on your own.

    The thing that sounded strange/not good to me is that his emergency fund seems to be an undefined portion of the “fun” money. That could be dangerous going forward.

    Also, to somewhat address the tithing question I kind of responded to earlier, he does earmark money for charity, which may include tithing.

  4. I agree with everyone’s investment advice for him, but the main thing that stuck out to me with his original investment plan were the tax implications. I know he’s assuming that he will be draining the money and refilling it on a consistant basis, but the market doesn’t always have great timing when it comes to life’s adversities such as buying a car, or emergency medical proceedures. I dont think investing is bad, but I would strongly suggest doing it in a more reasonable portion of his “Savings”….maybe only 20% or so. I think its important to designate between long-term, and reasonably short term savings goals, and save/invest accordingly. Any money he makes with his fully-invested-savings-plan, he will have to pay short-term-capital-gains tax on…which fine, but would significantly cut into his 8% that he thinks hes making on all this money…when he could alternatively hold the money in investments for over a year, and get a better tax rate when he brings it out.

  5. The general rule of thumb is keep an emergency fund equal to what helps you sleep comfortable at night. If that means he needs 1 month living expenses or 5 years, it is up to him. Personally I keep about 18 months in cash in a savings account.

    As for investing, as long as most of the money is invested for the long term I don’t see anything wrong with his stock purchase plan. If this is more “fun” money and not retirement savings then go for it. For a retirement plan I would use mutual funds.

    Sounds like he has a good grasp, and honestly he doesn’t seem to work much. If he buckled down and worked 40+ hours per week I’m sure his income could increase significantly over $20k.

  6. He says he values his day job (the one w/salary and benefits) because of its flexibility – presumably that means that he’s got plenty of time to develop his own stuff on the side, but he doesn’t seem to be doing that consistently. He seems to look at any windfall as an excuse not to work, not something that moves him toward any goals. Maybe his wife’s fine with this, but I’d be curious to know for sure. Right now we don’t have that information.

  7. I just can’t fault the guy for wanting to enjoy and reap the benefits of his work. Work doesn’t have to be a reward for working hard….one can always tailor the lifestyle that you want with it.

  8. Some good things, some bad things.

    The best part is that he does a good job of deciding on the life he wants and then back tracks to earn money in a way that allows him to achieve it in the simplest ways possible. He also doesn’t do anything risky or remarkable (I mean that in a good way), so it makes his story very easy to relate to.

    I have reservations about his investment strategy for the same reasons other people have brought up.

    One comment I take note of is the importance of mindset versus automation when it comes to money.

    I don’t necessarily disagree, but I don’t think the two are a dichotomy. Automation takes something away from your locus of attention, which by itself greatly affects how you do (or don’t think about it).

  9. I agree with Honey. I would encourage him to more effectively use the free time and coaching to earn more while he can. Hustle a bit more.

    I also agree his investment strategy seems a not off. I would suggest lending club over stocks for the short term investment. You have 3 or 6 year loans, bit you can sell your stake on the secondary market for cash. If you keep a bit liquid, this strategy should be fine.

  10. I bet his local bank/credit union can set up savings shares so they don’t have to track it on paper. ING has so many people convinced that they are the only place that does shares. I’ve had my savings divided into targeted shares since the late 80s, at a small regional credit union! Just ask them. it’s got to be easier than tracking manually.

    Also, I think he’s mooching. If you don’t ever buy groceries, you’re not supporting yourself. Period. At least acknowledge that you’re still not self sufficient rather than claiming that other people owe you food. It’s one thing to be invited to dinner, it’s another for grandparents to be buying your groceries.

  11. Wow…122%!?! That’s incredibly strong :)

  12. I’m with Jackie, I reckon this guy’s a bludger.

  13. I can’t blame the guy if he wants to reward hiself He is simply reaping the fruits of his hard work. I just did not agree with him when he put all their savings in stocks. All, as in all, is a Wrong investment strategy.

  14. Thank you, Ramit. Finally, a story that isn’t all doomsday and stressful to read.

    He needs to stop focusing on investing and focus on lead generation and finding new clients. He should be refining his work strategy to leverage the success he has already had for the past six years as a freelancer. And I think he should get that assistant to do some of this work for him because I bet she could seriously contribute even more value than she already is.

    He has great instincts, if he’d trust them.

    He’s not mooching, per se. I wonder how his wife feels about working all summer AND being a student? She sounds laid-back like he is. I’m sure there are discussions where they talk about what they are contributing.

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  16. I agree, the main idea that stuck out in my head from this is: 122% of body weight?? Wow! That’s ridiculous (in a good way)!

  17. I can’t really comment on “mooching” or not because it’s so hard to tell the context of the free stuff he’s getting in a few hundred words.

    He’s happy and living below his means, what’s not to like? I think it’s weird he puts money in the market that he’s going to need/want in a few months…that seems like a disaster waiting to happen. I think a general rule is “if you need the money within 5 years, don’t put it in the market”. I may have stolen that from Suze Orman.

    Overall, sounds like a couple I’d want to hang out with.