The Dream

The Trampoline

No, this is not about living the dream.  This is about the dream that I had approximately one week after learning about the confusing death of a loved one.  While it may mean nothing to someone else, it opened up my eyes to many things, thus the need to document it here.

Many times when I dream it's like watching a short 3 minute movie, sometimes I just observe as if it's being played back later, other times it feels as though I'm living it.  This dream in particular is weird as I only remember snapshots and sort of thinking out loud moments.  In this dream, I was single and owned the home I grew up in as a kid.  The neighbors were not the neighbors from that home but of my Father's current home in a different city.  The home in the dream is in what I consider my hometown and the same place my recently deceased relative lived.  The story here involved a gigantic trampoline in the backyard.  This was no ordinary family sized trampoline, this thing was the size of a four stall garage.  According to the dream, it was the next door neighbor's and was installed on my property before I purchased the home.  For whatever reason I had never used the trampoline as it was theirs even though I had permission.  The day of this dream however, the trampoline and all signs of it were gone.  Nothing but beautiful green grass that had been freshly cut and it smelled wonderful.  I was having a conversation with someone but I don't know whom, I just know that I said  that I was going to have to ask the neighbor if the trampoline was coming back because it hadn't been there for sometime.  I told this person that I didn't want to do anything with the land until I knew for certain.  The person told me that the trampoline hadn't been there for years and they were certain that it was my yard to do anything I wished.  Sometime shortly after that, I woke up.

Now I'm sure that story doesn't mean much to anyone else but me.  However, for me it represents all sorts of things.  There are many parts of that story which line up with places and times of my past and trying to hold onto them.  What it basically means to me though is that for whatever reason, I have been not moving on for years, possibly since I moved away from that little town as a teenager.  I have always felt ties to that little town and the people in it even though I'm sure I have long since been forgotten.  All of my friends moved away shortly after I did and the school was demolished years ago.  What this dream makes clear to me is that it's okay to move on and enjoy what you have, that doesn't mean that you have to forget what was once there nor wait for it to come back.  The truth is that it never will.

What Can We Learn From Our Dreams?

Recently I've been dealing with the loss of a loved one and not understanding why she left things the way she did.  For whatever reason during her last few years on this earth she became bitter and unapproachable.  Following her death I learned that she had changed her will from passing everything onto the family to selling everything and giving the money away.  While there were many things of value, there were also priceless items such as photos that were all thrown away by those who received her personal property.  Upon talking to neighbors, I now know that these were indeed her dying wishes and not a result of coercion.  I've been calling upon everyone I know looking for answers but finally last night I had a dream that somehow made everything clear.  So just what are our dreams?

Subconscious working overtime?

Spiritual Guidance?

Repressed Memories?

Snapshots from our daily routine?

Perhaps the deceased form of communication?

Inheritance - What did you get from your relative?

Recently, my Grandmother passed away and as I would soon discover, she did not follow my Grandfather's wishes as they had been explained to me many times while he was living. The land that he had worked so hard to farm was left to some distant cousins of mine instead of me (the next descending heir). For a few days I felt left out, disappointed, heart-broken, etc. What followed was nothing short of an awakening. Dave Ramsey often quotes scripture that translates to "a good man leaves an inheritance for his children's children". So had my Grandmother in fact destroyed his legacy? Had she been persuaded to pass along riches to the "other side" of the family? The answer is quite simply, no. What she did was realize that I had gotten all the wealth I need from them to carry on the tradition. While I may not have been left her diamonds or his land, they both gave me knowledge that nobody can take away from me. That knowledge will allow me to leave my own legacy, while the material possessions can be sold by those they were given to allow them to do the same.

So just what did I learn? Too many things to list but some of them are as follows:

1) Make hay while the sun shines. What does this mean exactly? Work when you are able to do so. My grandfather worked every single hour of overtime offered to him during his 30+ year career. My Grandma did the same. In the 50s and 60s when it was nearly unheard of for a woman to work, she worked long shifts in a factory. She also walked to work nearly 3 miles because they never saw the need for two vehicles.

2) Whenever possible, be self sufficient. My grandparents also had a small farm, grew their own tomatoes, onions, corn, strawberries, pumpkins, etc while also raising their own pigs and chickens. What they couldn't provide, they traded for with other local farmers and sold the rest.

3) Pay cash for everything. My Grandpa never carried a credit card in his life. Even the house he paid for in cash. He saved up and worked for 12 years to build their home and even then he built it himself with friends. Once again he traded work on the things he knew for the things he didn't.

4) Spend some of your wealth on those you love. Now you would never know it to look at them but my Grandma had an impressive collection of diamonds. My Grandpa always spoiled my Grandma whenever he had the opportunity to do so. While diamonds are not a requirement to show you care, they are forever, as they say.

5) Teach your children about money. Whenever I wanted something, a true want not a need. Grandpa would offer to help. Helping meant that you would save up half and he would pay the other half. This taught us the meaning of working for things and that he wasn't going to just give you money. He had worked hard for what he had and he was teaching you to do the same.

6) You can't take it with you. My grandpa always lived by the philosophy of wanting to see his descendants prosper while he was alive. He always said that he wanted to see us happy while he could. Whenever possible, he would buy us all dinner or treat us to ice cream, etc.

7) Always help others but don't just give them things. My Grandpa worked on the railroad for most of his adult life. During that time he became known as the man who would help all the "hobos". They would always ask for money and he would always tell them no. He would gladly buy them a hot meal, help them find some local work or whatever was necessary but never just hand a stranger cash.

8) It always comes back tenfold. I saw firsthand as well as heard stories of my Grandpa helping others. He saved at least three lives during his career and one of them was even a man who had stolen from him. A lesser man wouldn't have been so kind. He always said though that whatever you give, you get back tenfold and he knew it to be true. He always gave to the local church as well as food to the needy.

9) Build it yourself. Anything my Grandpa built was so heavy that only he could lift it was a running joke in my family for years. He overbuilt everything and as a result never replaced it. When he made something it was solid oak or some other solid wood that was strong enough to park a car on it.

10) Learn from your mistakes as well as the mistakes of others. Most of these principles are not new and were not his own but he always had open eyes and quickly taught himself.

Debt Reduction - Ramsey Style

According to Dave Ramsey's The Total Money Makeover, the self professed money expert claims being in debt is normal and we all should be weird.  He has 7 basic concepts for becoming weird.  Don't let baby steps convince you that these are easy.  While the guy is some sort of religious nut who makes his money off of poor people, he did get me thinking.  Here's my Ramsey based theory:

Step One:
The first step to getting out of debt is to stop making more.  To begin you need to create cashflow so you can stop using your credit cards.  So this first step is really a three parter.  First sell off something or take on overtime, etc whatever it takes to establish a small fund of cash.  Depending on your income this needs to be somewhere around $1k.  This is not savings, it's cashflow.  You can put it in a money market, savings account, cash in your desk drawer etc.  I personally chose to just leave it in my checking account and change my balance to reflect the 1k missing.  So basically my checkbook had $1100 in it, I changed the register to say $100.  The second part of this step is vowing to not use credit cards anymore.  If you run into a true emergency such as a flat tire, etc then this 1k will cover it.  Last, you need to create a zero balance budget.  You will create sinking funds for everything.  A fraction of each paycheck should be allocated to birthdays, coffee, groceries, gas, electric, etc.  Everything that you can think of needs to be covered in some category.  When you get paid you will effectively cash you paycheck and divy it up into piles for each of these categories.  Whatever is leftover get's applied to step two.  This leftover amount will be reffered to as snow and so is all other money that you come up with.

Step Two:
Is commonly known as the debt snowball.  There are a few theories on paying off debt.  I fall somewhere between the two most common.  Ramsey advocates debt snowball while others and my calculator favors the avalanche method.  I could care less which you choose.  Just stick to it.  The snowball works as follows.  Lets assume you have 3 credit cards.  One with a 1k balance, one with a 2k balance and one with a 3k balance.  To keep things simple, let's assume that the minimum payments are $50/$100/$150 so every month you are paying a combined $300 and getting nowhere.  You are now going to continue paying the $300 but every extra penny you come up with will go on the lowest balance.  In this case it's the $1000 card.  As soon as it's paid off, you will now take the $50 you were paying on it and apply it to the $2000 card along with it's normal $100.  By the time you get to the $3000 card, you'll be paying $300 a month on that one.  This snowball process is all about behavior and momentum.  The avalanche method is done the same way but in order of the highest interest debt first.  While mathematically this approach saves more money in the long run, it's frustrating.  Let's suppose in this scenario that you have those three credit cards and a school loan of $40k with high interest.  Of course you need to get that paid but it will take years and during those years you'll still be paying the minimums on your credit cards.  Anyone would be discouraged with this strategy.  There is really no desire created to build up more snow ($).  Why work overtime on Saturday when it's a small drop on the $40k?  However that Saturday might just mean paying off CC#1 a whole month earlier.

Step Three: 
Finish the emergency fund.  Or in my opinion start one.  I really don't see the initial $1k as a true emergency fund.  It's there in case you need it but it's not for real emergencies.  A real emergency fund needs to cover a new furnace, well going dry, medical out of pocket, even job loss.  This one is kind of up to you.  Most experts recommend 3-6 months but I would error on the side of caution.  Once this is built, this is also a good time to save up towards your next car, a new roof, etc.

Step Four:
Invest 15% of your total household income in your retirement.  Ramsey recommends meeting your employee match, maxing out a Roth IRA and then putting the rest of the 15% in your 401k.  That's a little complicated but will work.  The key here is to avoid taxes and save to build future wealth.  Now at this point you should have zero debt other than your house and you should be able to afford more than 15% but dont.  That money is going to step 5.

Step Five:
 Payoff the mortgage.  Much like the debt snowball, take all leftover money and work on paying off the house.  Once it's paid for then move on.

Step Six:
Pay for your kid's college tuition in cash.  Not much to say here... this will take awhile on it's own.

Step Seven:
Build wealth and give.  Max out your 401k, buy investments, etc.  At this point reverse your thinking.  Stop the death grab on money and have some fun helping others.

Summary

1) $1000.00 in an emergency fund 
a) The 1k is not savings - Cashflow that is readily available for true emergencies
b) No new debt - no credit card charges, car payments, etc
c) Zero balance budget - give every dollar a job.  If done correctly, there are no more "emergencies" because there's an envelope with cash in it to cover whatever it is.

2) Use the debt snowball
a) Sort your credit cards balances in order of the least to most owed
b) Pay all extra snow onto the lowest balance until paid off
c) Once CC#1 is paid off, apply everything you have to CC#2 including the minimum from CC#1
d) Most importantly, generate more snow.  Sell something on Craigslist or eBay, pickup some overtime, get a second job, etc.

3) Finish the emergency fund.  Add to the 1k and build up 6 months worth of household income.  If you haven't at this point I would change from a checking account to something that pays decent interest.
a) Accumulate 6 months worth of savings
b) Save up to pay cash for a newer car (if needed)
c) Take a vacation paid for in cash (you've earned it)

4) Invest 15% of total house income in your 401k and/or start a Roth

5) Payoff the mortgage early or save up to buy a house

6) Kid's college funds

7) Build more wealth and give it away

What did I learn from the program?


1) Do you usually get a big tax refund?  Stop it immediately!  Change your deductions so that you will break even or even owe a small amount.  The government is collecting interest on your money while you are paying interest on debt.  That is WRONG!  I was able to increase my income by $300/mo with this method and help pay down debt with this additional monthly snow.

2) Are you currently contributing to your 401k while also paying on debt?  Stop.  Yes the interest compounds but so does not changing your way of thinking and paying interest on credit cards at 18% while earning 8% in your 401k.  Once you get to step 4 you will make up for it and by the time you get to 7, it won't matter at all that you suspended contributions for a year or three.  Ramsey advises entirely suspending contributions including your 401k match at work.  You'll have to do your own math here.  For me it made sense.  I get paid 35 cents on the dollar up to 6%.  Mathematically this is equal to 2.1% of my base pay.  Once these CC are paid off, I can easily contribute the additional 2.1% myself to make up for the period of lost time.

3) We spend way more than we actually have.  If I learned anything from this program it's that if you have to charge it - you can't afford it.  Stop giving your money away!

Mr Ramsey claims something like the average person who attends his seminar or reads his book will save $5k.  Well I borrowed the book from the library for free and am scheduled to save in excess of 20k in interest.  I'd say that's an incredible return on investment (ROI).  Religious nut or not, this guy is motivating to say the least.