High Income Parents https://www.highincomeparents.com Helping High Income Earners Raise Awesome Kids Fri, 01 Sep 2017 01:25:41 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.4 https://i2.wp.com/www.highincomeparents.com/wp-content/uploads/2017/04/cropped-HIPlogoNoSite.jpg?fit=32%2C32&ssl=1 High Income Parents https://www.highincomeparents.com 32 32 125073986 Three Tips for Negotiating Job Flexibility https://www.highincomeparents.com/negotiating-job-flexibility/ https://www.highincomeparents.com/negotiating-job-flexibility/#comments Tue, 15 Aug 2017 09:00:48 +0000 http://www.highincomeparents.com/?p=2079

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[Tom: I’d like to welcome TheBossMD today. He writes for physicians, but I think this post applies to most high income earners that want to negotiate more job flexibility for a variety of reasons. Take it away BossMD!]

 

So you’ve landed your dream job, huh? Congratulations! It’s now time to talk specifics about what this job will look like. If you’re like most people, then your paycheck is the most important thing you will discuss during your negotiation.

 

If you are a reader of High Income Parents, however, then you’re going to want some job flexibility. Money is important but family is really what makes life worth living. Am I right?

 

To do this, you are going to have to sit across the table from somebody like me and convince me to make a deal. This does not have to be as intimidating as it sounds. If you want to be successful, then you need to get inside my head and figure out what I’m thinking.

 

What runs through my mind when you ask to telework on Tuesdays and Thursdays? What is negotiable and what is not? Let me pull back the curtain and give you three tips for negotiating your family life into your job.


Equality Matters

 

If your boss is a good one, then they try to treat everyone fairly. You need to remember this when negotiating job flexibility. It may seem simple to say that I will just take a huge pay cut to work a lot fewer hours. However, the organization’s business model may not allow for everyone to do that.

 

If I can’t allow for everyone to do something, then I’m going to avoid letting anyone do it unless I have a really good reason. Avoiding questions of inequity will definitely make my life easier as a supervisor.

 

This means that you need to communicate why it is worth it for me to create special circumstances for you and provide a potential explanation I can give to others that may ask me about it. Solve my problems for me so I have no choice but to grant your requests.

 

Preferably, this should be something beyond “I’m awesome so I want to come in late on Thursdays,” though you’ll see in my next tip that being awesome does help. Let me give an example.

 

Let’s say you’re a physician who just got hired by a local clinic. You want to work from home on Tuesdays and Thursdays. Your kids have karate on those days, and as a current black belt yourself, you want to be there for that. The clinic wants you seeing patients five days per week.

 

I would propose doing telemedicine on Tuesdays and Thursdays. There are a myriad of companies hiring doctors to do phone or video visits, and if that isn’t enough, then you could also start doing chart reviews for additional revenue. Ballpark some numbers to see how much revenue you could bring in this way and present it to your new boss.

 

If you can show that you are going to bring in just as much revenue as someone physically in the clinic and diversify the clinic’s revenue sources by adding additional revenue streams, then you’re well on your way to helping your kids earn their black belt. The clinic will be better off by letting you work from home two days per week, and your boss has great ammunition to use when other employees start complaining about your “special” work schedule.

 

Be The Best

I’m going to keep this tip short and sweet. Let me be real with you. If you’re marginally qualified or a marginal worker, then I’m not going to be very forthcoming with work life concessions. If you’re one of the best I’ve got, though, then I am ready, willing, and able to keep you happy in your job.

 

Good help is hard to find as the truism goes, and I doubt that will ever change. I will do whatever I can to retain star employees, including granting them flexible hours or additional vacation.

 

I have no problem doing this because I know I can count on them. A star employee will get the job done whether they are sipping coffee at their own breakfast table or physically in the office. As long as the job is done with excellence, then I don’t care where they are.

 

Ironically enough, a good sign that you’re one of these star employees is if you can propose and execute a plan similar to the telemedicine plan I outlined above. Employees don’t get perks by creating little value and asking for the world. Employees get perks by creating so much value that I want to give them the world.


Be Flexible with Your Flexibility

I know, I know. That heading is a little confusing, but let me explain. As a manager, one of my concerns is making sure I get a consistent productivity for the resources I devote. If I devote full-time money and benefits to a position, then I expect to get full time work.

 

Most bosses have the same attitude, and you can get a lot more from your boss if you are willing to work with them. Let’s return to our physician trying to work from home that we discussed early.

 

As your new boss, your telemedicine is intriguing. It would definitely add a new revenue stream and could be a great new venture. However, the clinic already has too many patients that need to be seen. Teleworking on Tuesdays and Thursdays doesn’t help that problem.

 

To help with this, I may counter this way.

 

I’d say,”Sure, I can do the telemedicine proposal for Tuesdays and Thursdays, but why don’t you also agree to work the after hours clinic on Wednesdays so you can help us see all the patients that need to be seen?”

 

This is negotiation 101. You have a problem, and I have a problem. Let’s come up with a solution that solves both our problems. As someone asking for concessions, you must be ready for this and be ready to give something yourself to make the deal work.

 

If you are really committed to finding a good solution, then think about this in advance so you can be ready. If you know your business well, then you can probably anticipate what the organization’s needs are. Determine what you’re willing to compromise so you can make decisions on the spot about what you will or will not agree to. Once that’s done, you’re just a handshake away from sealing the deal.

 

There you go, High Income Parents readers. I hope this post is helpful for you as you continue to build great families and great careers. Personally, I work for an organization that allows for healthy work life balance, and it’s been a blessing. Good luck, and I look forward to answering any questions you may have in the comments. The boss is out!

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HIP Exam with ESI Money https://www.highincomeparents.com/hip-exam-esi-money/ https://www.highincomeparents.com/hip-exam-esi-money/#comments Tue, 08 Aug 2017 09:00:46 +0000 http://www.highincomeparents.com/?p=2047

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Welcome back to the H.I.P. Examination. This is where one parent (me) asks another parent (ESI Money) about his approach to his kids in handling education, investing, and money in general. Parenting can be hard. Money can be hard. Put both together and we are probably approaching something the consistency of Wurtzite boron nitride. (Yeah, I looked that up. It’s the hardest substance known to man, not diamond!)

Today’s HIP Exam features another blogger who has talked the talk and walked the walk when it comes to raising kids to be financially savvy. He’s recently retired but like most high earners he hasn’t stopped working. He just puts his efforts toward passions instead of punching the time clock.

One of the areas in which he really excels is his ability to help you increase your earnings. He’s assembled and wrote some of the best articles I’ve ever seen about the value of increasing your earning potential and making the most of your career.

Also if you’ve ever wanted to get a behind the scenes look at how other millionaires have come to that position in their lives, he currently has fourteen interviews with fellow millionaires on his blog with plenty more in the pipeline.

My hope is that these questions reveal some ideas you never thought of and give all of us some tips for making our financial lives better for ourselves and our kids. Without further ado, here is ESI Money.


HIP Exam

Two Truths and a Lie. Tell us two things that are true and one that isn’t about you. Make them something not too many people would know. We’ll come back to this later.

I’ve run only two marathons but finished seventh in the second one.

My grandmother was mayor of the small town I grew up in.

I had the lead role in two different high school plays.

 

What do you do/did you do for a living? How long have you been doing it/did you do it? What was/is your favorite part?

Right now, I’m retired.

Before that, I was a marketing executive for 28 years. I eventually worked my way up to being president of a $100 million company.

For the most part, I enjoyed my career. I wouldn’t say I “loved” it but I certainly “liked” it. It was challenging, interesting, and fulfilling. It also provided nicely for our family.

How did you learn about personal finance? Did you have any big role models that mentored you financially?

I had no financial role models. My parents didn’t know a lot about money nor did anyone else in my life.

My financial education began when my wife and I volunteered to teach basic finances at our church (we were just married and wanted to serve together). We had to go through some significant training where we learned how to manage money. As you might guess, the teaching covered the basics: spend less than you earn, avoid debt, live on a budget, etc.

Once we learned, we began to coach others, mostly on how to develop and manage a budget. We learned so much what NOT to do from the various financial disasters we saw in our sessions.

I also started reading books like The Millionaire Next Door, The Richest Man in Babylon, etc. which taught me even more. I began to apply these principles and our finances blossomed.

How many children do you have? How old are they?

Two kids. My son is 21 and my daughter is 19.

 

How did you help them manage money while they were young? Did you have an allowance system?

Yes, they had an allowance.

There were certain chores that they did not get paid for — they were simply expected tasks as a result of being part of the family.

But once they did those, they could do other chores and earn money for them.

It didn’t add up to much but we taught them how to manage the money by putting it into save-give-spend buckets.

[Tom: I’m a big proponent of the allowance system not only for teaching the kids to manage money but I think it benefits the parents too. One of the hardest things for us was to be consistent with each child about how we approached buying things for them. One child might have very expensive “hobbies” and another not as much. It was difficult to encourage the one child without making the others feel like we were treating them unfairly. Since we set the ground rules like you that there were expected task that just contribute to the family and they have the opportunity to earn above that with added effort, the kids feel like they all have the same opportunities. ]

 

How do you plan to help them manage money as they get older?

As they got older and began to make more money, we built upon what we had already taught them.

We also set up some financial incentives to help them make the right decisions.

For example, we gave them the chance to earn a car as well as take home a portion of their college savings.

These have met with mixed results. My daughter took both the deals and will leave college with $30K and a new car.

My son is still deciding if he wants to take us up on either offer. His preference is that we simply give him the money with no effort or performance on his end. 🙂

[Tom: It’s always amazing how kids with the same parents can turn out so different. We are going through the same thing. At the end of the day all we can do is teach them and try to help them succeed the best we can, they have to make the ultimate decisions. I love the creativity you described in both those articles.]

 

How do/did you finance their education? Do/Did they go to public school? Private School? Home School? What is the reason for your decision?

They were homeschooled because we felt we could give them a better education than the school system. Of course, this took a lot of time, effort, and expense on our part, but I think we were all the better for it.

We were fortunate to live in an area where homeschooling was popular and hence we had a broad selection of supplemental classes and extracurricular activities for the kids to choose from.

[Home schooling has come a long way since I was a kid. I went through the public school system but my brothers were home schooled. Our city has a great homeschooling community and the curriculums available today are top notch. I like taking some off peak vacations with the kids from time to time too.]

Do they plan to go to college? If so, how did you plan to pay for college? Is the child responsible? Are you fully responsible? Is it a bit of both? How did you decide this?

See the link above for the college incentive system we set up.

My daughter is going to college (she enters as a junior having taken many college courses while in high school) and will graduate in two years. She should leave with a diploma, no debt, and roughly $30,000 in cash.

My son is in a ministry training program which we are helping him pay for. He will leave with no debt as well.

What is the most important financial lesson you could teach your children?

There are many others less fortunate than you are. Help them out however you can. Sometimes that means giving, sometimes volunteering your time. Consider yourself blessed and work to bless others.

 

Okay, fess up. What was the lie? Tell us about the truths.

Wait, what? Wouldn’t you prefer I left you hanging????

Ok, if I must.

The first one is a lie. I hate running. I have completed several centuries (100-mile bike rides) and even led a marathon (I was on a bike leading the runners on the course) but never actually ran a marathon.

My grandmother was mayor of our small, Iowa town for twenty years. It was kind of awkward when I was in high school but other than that I thought it was cool.

I tried out for the school play as a sophomore and got the lead. When I refused to kiss my co-star as part of the play (it was not in the script but the director wanted to add it — I said “no” because the girl already had a crush on me and I didn’t want to encourage her), he passed me up for a role the next year. Or at least that’s what I tell myself. Maybe it was because I was bad. But my senior year we got a new director who cast me as the lead again. I think somewhere around 50 people watched that play. Not bad for about a million hours of rehearsal!

[I used to hate running too but for some reason, I stuck with it. I guess it was because I signed up for a half marathon and didn’t want to crash and burn because I didn’t train. Something kinda magical happened after training for about six months. I started to like running. The simplicity of strapping on some shoes and just putting one foot in front of the other is therapeutic and it’s my number one way to listen to podcasts.

I might be sorry in twenty years though if I’m getting knee replacements.]

 

What is the number one money/finance/investing tip you have for high income parents?

Save and invest as much as you can as early as you can.

This tip plus time will make you wealthy.

[So true! It’s hard to see that it will make a difference when we are saving relatively smaller amounts when we are young. I wish someone had pounded that truth into my head when I was younger.  I’m doing my best to make sure my own kids understand this.]

 


If you need help tracking all your accounts, there is a great application that is completely free. It’s called Personal Capital. With Personal Capital you can track all your checking, saving, mortgage, investment and retirement account all in one place. I used Personal Capital and find it to be the best way to keep all my financial accounts straight. Try it our free today.


 

Thank you ESI Money for being part of the HIP Exam. Here’s a little insight into someone who has walked the walk and talked the talk when it comes to earning, saving, investing and instilling those values in his children. He’s also the author of a free ebook titled Three Steps to Financial Independence.

What questions do you have for ESI Money? Sound off below.

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Melissa Read Memorial Scholarship Essay #5 https://www.highincomeparents.com/melissa-read-memorial-scholarship-essay-5/ https://www.highincomeparents.com/melissa-read-memorial-scholarship-essay-5/#respond Sun, 06 Aug 2017 09:00:06 +0000 http://www.highincomeparents.com/?p=2140

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Worst Financial Decision

 

Applicant Breanna Moore

                  It’s very easy to make mistakes when it comes to finances. The countless impulse buys I’ve been guilty of throughout my high school career certainly impacted where I stand financially today. Although it’s fun to go out with friends, on a shopping spree, and to be in the crowd of my favorite band at their concert, spending the entirety of my money has left me with next to nothing today. Four years ago, at the age of fourteen, my uncle offered me a deal I shouldn’t have refused. He told me that as long as I never withdrew any money until I turned eighteen he would match every dollar I deposited into a bank account. At fourteen-years-old, I was uninterested and declined his gracious offer. If only I understood the long-term consequences back then as I do now at the age of eighteen. Seeing how much I miss out on today because I didn’t make wiser decisions with my money has taught me a few things: I should have begun saving much earlier on, I need to consider the opportunity cost of my purchases, and I would have saved myself so much hassle if I took my uncle up on his deal.

            The entirety of my savings for the past four years has been reserved for short-term goals. I’m not much of an impulse buyer considering I know how to set money aside and resist the urge to spend it when I’m waiting to make a larger purchase. Had I included saving a portion of the money I made for long-term goals, my financial standing would be in a much better position. As a high school graduate starting my college journey in the fall, I wish I had money on hand to put towards my schooling. The dread from the thousands of dollars I’ll be accepting in the form of student loans is already taking its toll. In addition to the cost, I will pay towards my education the interest piled onto the total amount will bury me further into debt. The increasing rate of college dropouts attributed to student loan debt is alarming; I hope to receive the help I need financially so I don’t become just another statistic. If I had begun my savings much earlier in life the financial worries I’m having now wouldn’t be as much of a burden.

            One of the most stressed topics outlined by businessman Dave Ramsey during my personal finance class was “opportunity cost.” Opportunity cost is self-explanatory; consider what other opportunities you would be giving up by making a decision. It seems like an easy concept to grasp, except now that I’m reflecting upon the purchases I made over the years I’m not sure it was one I understood. The choice to attend concerts each year and avoid setting aside a portion of that money for savings has left me with nothing. Although the concerts were enjoyable, I could have secured a better financial position for myself in the future by saving the hundreds of dollars put towards them. An important purchase that I disregarded was a car; if I had factored that significant expense within my opportunity cost I would be driving my own right now. It’s something I regret, but I hope to change my financial stance in the future by beginning to save and closely considering my opportunity cost.

            Above all, my decision to decline my uncle’s deal drastically affected my financial status. I’ve been employed by a family member since I was fourteen, around the same time that my uncle proposed his offer to me. I work every two weeks and make thirty dollars each time; therefore, I’ve made sixty dollars per month over the past four years. It doesn’t seem like much, but when taking the numbers into account the total amount I’ve earned the past four years is $2,880. Unfortunately, I didn’t save that money and it was spent on frivolous purchases over the years. Matching that total with another $2,880 would have brought me close to six thousand dollars by the time I was eighteen. The ways in which I could utilize this amount today are endless; I could buy a reliable car and avoid taking out student loans. When I look at the amount of earnings as a whole, I now realize just how much was frivolously spent, versus put into savings. Therefore, I strongly believe the declination of my uncle’s deal was the worst financial decision I’ve ever made.

            Not everyone is perfect when it comes to finances; many mistakes are made along the way and it’s an individual’s responsibility to learn from them. My greatest financial regret was not beginning to save given the capability to match the money I was making. Although this is very discouraging, I’ve realized firsthand how impactful saving ahead can really be. This lesson has begun to impact my spending habits. For the time being, I did enjoy the purchases I was making, but I could have taken the future into account and cut back on my spending. My hope for the future is that I will make wiser purchases and be able to put money away in savings. As I proceed on my journey following my college career, the ultimate goal is to leave debt free granting me with limitless opportunities.

           

[Tom: I thought this lesson was one of the greatest. A lot of adults make the same mistake when it comes to the company match with a 401k. I wonder if her uncle was getting at than when he proposed the matching program to her savings. 

I don’t think she’ll make that mistake again when it comes time to invest in her 401K if that is an option in future employment.]

           

 

 

           

 

 

                                                                                                                                                                                                       

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Melissa Read Memorial Scholarship #4 https://www.highincomeparents.com/melissa-read-memorial-scholarship-4/ https://www.highincomeparents.com/melissa-read-memorial-scholarship-4/#comments Sat, 05 Aug 2017 09:00:24 +0000 http://www.highincomeparents.com/?p=2134

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Applicant: Emily  Risinger  

What is the worst financial decision you have made and what did you learn from it?

 

The worst financial decision I have ever made up to this point in my life was not so much an action that I took, but an inaction. As I entered my senior year of high school, I knew that it would be important to apply for as many scholarships as possible. Like many of my peers, I researched application requirements and spent many hours finding scholarships that matched my resume. So many scholarships, and so many criteria!

For high school seniors, the success of applying can mean the difference between attending college immediately or having to wait until funds are secured through a job or a loan. The idea of loans and graduating with large amounts of debt is something all college hopefuls try to avoid. I applied for what seemed like an abundance of scholarships…to my church, my bank, my school, and others. I was certain that I had exhausted the pool of scholarships, and patted myself on the back for what felt like a thorough amount of work.

My efforts were rewarded! I was very fortunate and received several wonderful scholarships. At the time, the scholarships I received were amazing, and I was (and continue to be) very grateful. It seemed, to my 12th-grade mind, as though I had it made. I was sure that I had done well and knew I had enough to go off to college, and I made plans to apply for more scholarships later. This was my critical financial mistake: not seeing that I stopped too soon in seeking scholarships.

My first year was covered, and as my freshman year ended, I looked forward to once again filling out applications for scholarships for the second year. It was with shock and dismay I found that, by and large, most scholarships are restricted to graduating high school seniors entering college. The number of scholarships available to students who are already IN college is much, much smaller than I anticipated or expected. I learned too late that I should have tripled my efforts in applying as a high school student for scholarships.

In hindsight, I know now that I should have concentrated much more on researching what would be available for the entire four years, not just the first year. I was dismayed by this mistake, but I know that I have learned some valuable lessons. My experience will be beneficial in two ways. First, I have learned that “planning ahead” means much more than just planning for the near future. It also means to look at long range possibilities- five to ten years from now.

For instance, when I buy a car one day, I need to look at the costs of the car not just for the immediate time (costs of gas and insurance) but also what the car’s cost is down the road. What are its repair costs and expected reliability? When I buy a house or rent an apartment, I need to not only consider the mortgage or rent costs, but also future costs such as taxes or property values. My lesson learned is never to stop looking ahead.

My second realization is that in addition to learning about planning ahead, I am also able to help my younger siblings know about this. I have a sister that will apply for colleges this next year, and she will learn from my experience to apply for even more scholarships than I did. It makes me happy to know that I will at least be able to pass this information on to my siblings.

All high school students are told about the value of scholarships, and we know how much their generosity can help us. However, I don’t think it’s made clear to the students that, for the most part, the scholarship process is basically a “one time shot.” A few scholarships, such as this one, are available to continuing students, and it is a thrill to be able to look at the requirements and see that I am eligible. I thank you very much for including the continuing students in your consideration!

 

[Tom: I’ve heard that there are scholarships that are only for upper classmen. I guess it depends on the school but you definitely have to keep applying if you are running out of money. My son and I were talking to the 4H sponsors near our home and they said that a lot of 4H scholarships go unclaimed that are only for upperclassmen. Maybe that is another area that students could look to for more help with college costs. 

I the book review College Secrets, the author said to approach scholarship application like a job and I think that makes a lot of sense. You are earning the money after all. Make it a business so to speak.]

 

 

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Melissa Read Memorial Scholarship Essay #3 https://www.highincomeparents.com/melissa-read-memorial-scholarship-essay-3/ https://www.highincomeparents.com/melissa-read-memorial-scholarship-essay-3/#comments Fri, 04 Aug 2017 09:00:07 +0000 http://www.highincomeparents.com/?p=2128

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Applicant Tyler Whitney

What I Learned from the Worst Financial Decision I Have Made

 

Walt Disney said, “I think it’s important to have a good hard failure when you’re young.” I cherish my failures more than my accomplishments because they help me to avoid the danger of complacency inherent in success. For better or for worse, I have an abnormally large reservoir of failure to draw from. In response to the essay prompt, the worst financial calculations I have ever made were not active decisions, but sins of omission. The most obscenely ill-advised financial decision I have ever made was neglecting my education and finances throughout high school.

You can lead a horse to water, but you can’t force it to drink; the old saying applies to few as well as it applies to me. It’s not as if the water wasn’t all around me; the model of the American dream is conspicuously present in the story of every winner. “I didn’t have any handouts. No one ever did anything for me. I worked hard. I didn’t quit. I didn’t doubt myself. I committed, I shed sweat, blood, and tears to get here, and now here I am.” I heard it so often when I was young that I tuned it out. If only I had heeded it just a little. As it is, I took the much easier and much more dangerous path.

While living in China, my dad’s company paid for us kids, (four in all), to attend a prestigious private school for foreigners called the International School of Beijing. A tremendous opportunity! State of the art facilities, outstanding teachers, and more opportunities than any student could take full advantage of. The school’s entire system was geared to helping you succeed. For the two years I attended there, I was surrounded by pure ambition, intelligence, drive, and diversity. One thing was absolutely clear to everyone there but myself: these years matter. To this day, I sometimes wonder what a fool I must have seemed to my peers and the faculty. Ninety-eight percent of my classmates earned an IB diploma. My classmates were all accepted into the most prestigious universities and programs in the west. I know of two classmates that now make six figure salaries. Many people who were given the exact same opportunities as me are now living the dream of financial security and freedom. However, I remained oblivious to the future. I spent my time with frivolous entertainments, pursuing unwise and harmful habits, feeding fantasies and day dreams that swirled around me in a violent, self-absorbed psychosis.

Fast forward past a lazy semester at a school in Idaho, an ill-advised gap semester and an apathy-driven two-year mission for a church I’m not sure I believe in. Now I attend Utah State University. One day in class, I had a very late and very needed revelation. It came to me all at once; I have no driver’s license. I have only worked one job for the two months before this semester started. I was only just now starting my second semester of college at a school I had never wanted to attend, and aside from a small knack for the Mandarin language, I had no special skills. Worst of all, I had no one to blame but myself. For twenty years, I had been my own worst enemy, sabotaged by my own lack of self-control, wisdom, or ambition. My life was a cocktail for impressive attainment. Opportunity and materials for success were handed to me everywhere I went, and the only missing ingredient was me.

The most impactful lessons are often the harshest. I am so fortunate that I was able to learn a lesson at all. Life couldn’t teach me through poverty, it didn’t reach me through disaster or through physical pain. I learned this lesson the only way I could – through education. I had to go through the pain of first-time humility before I could get back on track. These days, not an hour goes by that I don’t kick myself in the pants for those years well wasted. Three lessons in particular stick out to me.

The first lesson is that there is no alternative to hard work. Before this semester, I was delusional, thinking that one day I would be discovered, or that I would get lucky like those “other successful people”. Now I know the pleasure of work well-done, of sweating over the details and caring about the things I do. I’ve presented at two conferences this semester and was actually praised for my work. I have maintained straight A’s, which is unheard of for me. I went to a debate tournament and actually did well. I spend any free time on self-improvement and achievement instead of the internet and video games. I used to daydream about accolades and recognition while doing nothing to pursue them. Now my new status symbol is my grades, my savings account, and my CV.

The second lesson is that pain is gain. I used to be sedentary, and I would quit trying the moment things became hard. Now I exercise and am encouraged by discomfort. I enjoy sacrificing time and fun in favor of studying and applying to jobs. Long hours of focus are my new hobby. Pain is the currency that life extracts in exchange for quality and character. You might even say we purchase our future with blood. But we needn’t slit our hands open – the payment we must give up comes in the form of our habits, our ignorance, and most of all our effort.

The last and perhaps most important take away from these last few months has been this; you can either daydream or you can have your dream. I am not ignorant of the fact that many people do not achieve their dreams, despite their best efforts. What I hope to convey is that happiness can be had now. It comes at the expense of knowing I’ve done all I can, that I’ve earned the success I now enjoy, and that I am living in accordance with my principles. It comes from living in the moment while being mindful of the future.

My financial future looks perilous and uncertain, and yet opportunity still abounds. Even today, this semester has been paid for by the GI Bill benefits my dad earned through military service. I live in the United States of America, where although it may sound cheesy, anything really is possible for those who know how to pay the price. I have parents who are loving and supportive to a fault, and siblings who encourage one another and go to great efforts to see each other fulfilled. Everything is working to my advantage, whereas thousands have succeeded when everything was working against them. I have always had no excuse not to succeed. The only difference is that now, I understand this.

[Tom: This essay really touched my heart. Most high Income parents try to give their kids a great start with the advantages we have. Some kids have a very entitled attitude because all they have ever known is the advantages of a high income. It can be a real financial mistake to always take that privilege for granted. I’m glad to see Tyler is making the most of the opportunities he has now.]

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Melissa Read Memorial Scholarship Essay #2 https://www.highincomeparents.com/melissa-read-memorial-scholarship-essay-2/ https://www.highincomeparents.com/melissa-read-memorial-scholarship-essay-2/#comments Thu, 03 Aug 2017 09:00:17 +0000 http://www.highincomeparents.com/?p=2124

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Savings and the Importance of Where to Place your Money

Applicant: Jill Moore

The worst financial decision that I have made so far was to put most of the money I received into a savings account. This may not seem like the biggest mistake a person can make, but in my case, it has negatively impacted me in several ways.                   

     There are a couple things you should know about my money views and habits.  First, I am becoming aware of how much I have to learn about money.  I was brought up being encouraged to save money and was told I shouldn’t withdraw money from my bank account – ever. So, I didn’t – ever.  

I was told I should save money for a “rainy day” or for when I finish college and want to start my life. I don’t think I felt that the money I was saving was actually mine. Friends eventually started talking about using a debit card to access their accounts, but I didn’t have one and, for all I knew, maybe my bank didn’t even offer debit cards. My lack of knowledge just kept me in the dark. Also, the bank was located pretty far from our home, so it was never convenient to get there and I always needed someone to drive me in order to go. 

Melissa Read Memorial Scholarship #2

     So, I started out just trying to save as much as I could, even challenging myself to put more into the bank and keep less for myself. I can see now that one of the problems with saving was that my money sat in an account and barely made any interest. The interest rates are so low that the account made pocket change for interest. It was beneficial for the bank, but not necessarily for me. The bank and my money were literally and figuratively, pretty far removed from me. 

   Another thing I found was that as I started my first job, my employer strongly encouraged that paychecks be direct deposited, so I signed up for direct deposit.  I worked varying hours each week and even picked up extra hours when a co-worker needed help, but the paychecks went directly into the account, so I never saw them.

The account that I really didn’t have access to was growing, but I didn’t see it. I continued to feel like I didn’t have money when I needed it. And quite frankly, when my job asked me to work more hours, I didn’t see a good reason to work more because what was the point? I wasn’t seeing any benefit to it. I continued to have to ask my parents for money when I wanted to do things, and more often than not, was told “no” to my requests.

   The final point really hit home this year. As I was applying to colleges, my parents filled out a FAFSA form to see if I could get financial assistance from the schools. I received my acceptance letters and then the financial award letters. It was pretty shocking to find out that the money I had saved all those years was used against me. We were told our “expected family contribution”, but then we were also told that the money I had saved was automatically added to what we were expected to pay toward the tuition. I was willing to contribute toward my education all along but was surprised when I was told that my money was added to what the family already had to pay. I felt defeated and misled.

 I admit I have a lot to learn. I am determined to be smarter with my money choices as I go forward. I am preparing to start my freshman year at Northwestern University in September. I will be studying in the school of Journalism, but just as importantly, I will also be learning from the school of life. I look forward to challenging my misinformation about money, taking ownership of my decisions and becoming a better money manager. But, I also hope to avoid taking out student loans as much as possible. 

 

[Tom: This essay is chock full of lessons. Knowing where to place your money is just as important as saving it.

Two big lessons were learned here. 

  1. Put your money to work for you. It’s great to save but if you don’t have goals for your funds, that is a wasted opportunity. 
  2. Know the rules of financing college. A student with a big chunk of cash can hurt financial aid chances with colleges. Know the rules and then place your money in a place that makes the most financial sense. ]

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Melissa Read Scholarship Essay #1 https://www.highincomeparents.com/melissa-read-scholarship-essay-1/ https://www.highincomeparents.com/melissa-read-scholarship-essay-1/#comments Wed, 02 Aug 2017 09:00:21 +0000 http://www.highincomeparents.com/?p=2120

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[Tom: This applicant did a great job of illustrating the financial troubles a car can cause. Even when we are young and have relatively little money, buying the wrong car repeatedly can reduce your ability to save and invest for retirement. Let’s see what Bader learned from his mistake.]

Remember that the theme for this year’s scholarship was:

What is the worst financial decision you have made and what did you learn from it?

Applicant: Bader Al-Ahmad

The worst financial decision I have ever made was when I purchased my first car. As I was about to become a senior in high school, I worked full-time during the Summer and part-time 2 years before and accumulated $7000. It was time for my hard work to finally pay off and drive up to school in a car that would turn heads. I went around shopping and stumbled upon my calling…the Ultimate Driving Machine. My impulses kicked and I called my Dad about the 2008 BMW 328i. I just couldn’t resist, the glossy, shiny, black finish and leather interior

My impulses kicked in and I called my Dad about the 2008 BMW 328i. I just couldn’t resist, the glossy, shiny, black finish and leather interior. My Dad gave the bad news, “Bader, these are luxury cars and very expensive to maintain. You know oil changes are charged at a rate premium as well as gas, brakes and regular servicing? But, your money, your choice.” All I needed to hear was “your choice.”

My Dad came over and signed the sheets, it was the best drive home. I was so happy until I realized I just bought a used car and knew nothing about the service history, so I took it to a European Servicing shop and got it checked out, bumper to bumper. The mechanic called me up… I was devastated afterward. “This car wasn’t a bad buy but it needs some typical used car work. You’ll need new brake rotors, brakes pads, an oil change with a filter and a differential fluid change.”

 

I went home, did some research on all the parts and fluids, a grand total of…. $1000, not even including service hours which would’ve amount to a total of $2000. Looks like I needed a small loan of $2000 but then again I’m 17 so that’s out of the question. I realized what an idiot I was and told my Dad I was sorry and that I’m prepared to sell it.

“Son, I warned you. It was your decision so it’s your mess to get out of.”

I was devastated, it was the first day of school, so I just decided to enjoy it for a week or two then just sell it. On my way to school, this happens:

 

Great, the other driver (100% @ fault) was texting and driving and turned into my lane not yielding. My dream car was gone for good but I’m still here, that matters above all and should never be taken for granted since I lost an uncle in a terrible car accident 6 years ago.

I took a lesson out of this. Just as Dave Ramsey says, live below your means! Even though I was able to technically afford a luxury car, I should’ve taken into account other factors such as the fact I’m going to college next year and need every dollar I can get; the cost of maintenance is also a big part, no car is perfect. It was very stupid of me to buy a luxury car, especially a used one where repairs cost 2/7ths what I purchased it for. Finally learning my lesson, I decided to purchase my next car with the check that Travelers Insurance sent me 3 weeks after my collision.

Receiving a very generous check of $8000, I bought a Toyota Corolla for $6000 and haven’t run into any major maintenance issues. Not spending the whole check made me very proud, my brain and not my gut did the decision making. That extra $2000 is now sitting in my college fund and I have only been adding to it from working. This accident taught me a very valuable lesson and was thankful to have learned from it. There is nothing more valuable than preparing for the future and expecting the unexpected.

 

 

                                                                                 

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Welcome to Melissa Read Memorial Scholarship Week! https://www.highincomeparents.com/welcome-melissa-read-memorial-scholarship-week/ https://www.highincomeparents.com/welcome-melissa-read-memorial-scholarship-week/#comments Tue, 01 Aug 2017 09:00:31 +0000 http://www.highincomeparents.com/?p=2113

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Welcome to Scholarship Week!

For the first year of the Melissa Read Memorial Scholarship, it’s been a great success. We reached the maximum number of applicants well ahead of the deadline. We’ve also received some excellent essays. It’s been a pleasure to read the product of each applicant’s hard work and efforts.

Over the past weeks, I’ve personally read each and every essay and selected the five finalists. I then passed those finalist essays on to my judging committee. They will read each of the essays and ranked them on a scale of one to five, one being their top choice. Then the rankings of each essay are averaged and a winner is determined.

melissa read memorial scholarship

It’s Your Turn

Now, this is where you the readers come in. We will post one essay per day this week over the next five days. One essay for Monday, Tuesday and so on. They are in no particular order.

The clock starts ticking once we post the essay. I want the readers to judge the essays by sharing the one you really think should win. You can do this with the sharing buttons on the side and along the bottom of each article.  I can track these things of course.

If you like an essay and the message it shares or the lesson it teaches then share it with as many people as you can. Use social media like Facebook, Twitter or Pinterest. Tell your friends and family.

We will count the views and social shares over the first seven days the essay is on the website. This is to make it fair for each applicant to get equal time since the essays are posted in the morning and only one per day. Each essay will get seven days but of course, you can share and comment after the first week is up.

These site based rankings are then added to the overall judges’ scores. We will announce a winner later this month. I hope you enjoy this week and learn something from our scholarship applicants because I certainly did.

I won’t be sending out any more emails this week so that I don’t fill up your inbox. Check back daily to read each applicant’s essay.

There is still time to donate if you wish. Just click the donate button below.



Thanks again to Melissa’s Parents, Bill and Melina Wilson for matching our initial scholarship offering. They are a blessing to my family and it is an honor to know them both.

Happy reading!

 

Tom @ HIP

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HIP Monthly Round Up {July 2017} https://www.highincomeparents.com/hip-monthly-round/ https://www.highincomeparents.com/hip-monthly-round/#comments Sat, 29 Jul 2017 09:00:25 +0000 http://www.highincomeparents.com/?p=2090

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There are so many awesome bloggers and people sharing their lives and ideas around the world. I try to curate the articles and posts others write that would pertain to the target reader here.

Parents, high income earners and those that fall in both category will benefit from the articles listed in the HIP Monthly Round Up. I try to find content that is relevant to raising our kids, helping our kids with finance and helping their parents make responsible financial decisions.

Without further ado, let’s get to it.

 

The Round UpHIP Monthly Round Up {July 2017}

As most of you know by now I like thinking about how we (human beings) think. I try to understand why we do the things we do so that I can avoid mistakes and capitalize on the advantages. FullTimeFinance reminds us about the Sunk Cost Fallacy in What is the Sunk Cost Fallacy?

It’s something we should understand, especially when it comes to investing and why we should avoid becoming victim to it.


I’ve dabbled in real estate investing. It’s mostly gone well but I’ve had my fair share of troubles. Anytime I want to feel better about my minor problems I just cue up FinancialSamurai’s post called The Worst Landlord Horror Story: You’ll Never Want To Own Property Again. This one will make you feel good about only needing to clean some carpets after a tenant moves out.


Taking care of our kids is not free.

We want the best for them, but it can also get out of hand if you don’t take care to watch expenditures. I thought it would be an interesting experiment to try some of the ideas BudgetonaStick shares in Frugal with Kids. I’m anxious to see if my kids give me some crazy looks or like me copying some outside the box thinking. One on the list is going to the Library and we already do that a ton. It’s awesome. I don’t know why everyone doesn’t get a huge amount of their entertainment there.


 


ApathyEnds does a great job of breaking down the eternal debate of Should you focus on Increasing Income or Cutting Costs?

Around these parts, most of us have already done a great job of increasing income. If we aren’t able to meet our financial goals, then maybe cutting costs is the next step.


Peter over at BibleMoneyMatters host a guest writer named Melissa. She writes on a topic that many parents will consider. I think most of us plan for our kids to go to college. Most of us went to college and it seems like a natural progression. There are always two sides to every coin. I think it’s good to consider the 4 Reasons Why You Shouldn’t Be Afraid To Let Your Child Take A Year Off College. It might be the right choice.


Financial Panther is reminding us to Be Comfortable With Being Uncomfortable.  Although that seems impossible, it’s something I preach to my kids and remind myself to embrace. I think it’s a real key to growth and success.


 

Inspiration

Meet Laura Dekker. Laura Dekker circumnavigated the globe in a sailboat solo. She made the announcement in 2009 and started her journey from the Netherlands in 2010. 15 months later she set foot back at her home after traveling in her 38-foot ketch completely alone. No chase boat and no camera crew accompanied her.

Meet Jordan Romero. Jordan scaled the tallest mountain in the world in May of 2010. He’s also climbed the highest mountains on every other continent. This includes Kilimanjaro at 19,340 feet of elevation and Denali in Alaska at 20,320 feet. Don’t forget Vinson Massif in Antarctica. He conquered that one too.

Meet Thomas Gregory. In 1988 he swam the English channel. It took him 11 hours and 45 minutes but he left France and arrived at Shakespeare Beach in England a little under 12 hours later.

Meet Louis Braille. You’ve probably heard of him, but he is responsible for creating the system of writing for the blind. He became blind at the age of three after an accident with leather working tools. Reports state he took two to three years to develop the language that is wide spread today.

Meet Willie Johnson. Willie was given the Medal of Honor, the military’s highest distinction by President Abraham Lincoln after heroism in battle during the civil war.

 

What’s the Big Deal?

At this point, I’m sure you are impressed but also asking what’s the big deal? The thread that all these exceptional individuals have in common is every one of them was under the age of 16 when he or she accomplished these amazing feats of courage, bravery, physical and mental triumphs.

I remind you of these amazing “kids” because it helps me realize what our own kids can accomplish when they put their minds to a task. Most of these kids had parents behind them backing them and encouraging them all along the way. Laura Dekker’s dad had to go to court for almost a year to allow her to take the sailing circumnavigation attempt. They risked her being taken from his custody.

I’m not saying every parent should push their kids to do something they don’t really want and make our kids live our own dreams. I’m saying if our kids come to us but we are scared or worried about helping them accomplish their dreams, maybe we should put our worries aside and see how we can help them make those dreams happen. It might take a lot of planning. It might take helping them work hard to earn money or knowledge to have the ability to accomplish their dreams.

Jordan Romero got the idea to summit all the continents highest mountains from a poster he saw in the hall of school one day. Sometimes that is all it take and greatness erupts from those little nudges.

We don’t have to turn our kids into world record holders, but encouraging them to dream and use the position, income, and networks we have as parents, we can help them achieve their dreams and goals and experience that unbelievable joy with them.

 

Thanks for a great month,

Tom @ HIP

 

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Guest Post on BudgetsAreSexy.com https://www.highincomeparents.com/guest-post-budgetsaresexy-com/ https://www.highincomeparents.com/guest-post-budgetsaresexy-com/#comments Thu, 27 Jul 2017 09:00:06 +0000 http://www.highincomeparents.com/?p=2085

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From time to time other bloggers have been gracious enough to feature my writing on their own site. I love collaborating with other and introducing my readers to other writing styles. Seeking other genres of the financial blogosphere can give all of us new insights.

An awesome guy named J. Money runs BudgetsAreSexy.com and he let me write a post called,

Is It Possible to Invest (Socially) Responsibly? 

I had a great time interacting with his readers and I wanted to make sure all my readers got a chance to think about the topic and see the article.

Here is an excerpt from the post:

 

I want to invest in a way that promotes my ideas, but the more I look into this, the more difficult it becomes to achieve.

When I sat down to develop my investor policy statement, I wanted to find investments that meet my values. I started to look into socially responsible investing.

What is socially responsible investing?

Socially responsibility investing (SRI) is a strategy where an investor preferentially only buys stocks or other investments that support a more socially conscientious idea. This could consist of companies that promote women or other underrepresented groups in leadership roles. This could be mutual funds that buy companies with a commitment to improving environmental factors. Ethical Corporate Governance in business practices is another value frequently cited.

You could exclude companies considered evil, whatever evil is to you. You could only invest in companies that promote good, whatever good is to you.

Guest Post on BudgetsAreSexy.com

We should all have a reason for choosing the investments we do. If you haven’t thought about your own investing and what you are trying to accomplish with your asset allocation, I hope the ideas portrayed in the post give you some reasons to identify your asset allocation and stick with it.

Head on over to J$’s site and let me know what you think in the comments below.

 

Tom @ HIP

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