Personal Finance

035 – My 2017 Savings Rate – How to Calculate Your Savings Rate

As we move further into 2018 I thought I’d take some time to look back at my progress from 2017 and calculate my personal savings rate. In the FI (Financial Independence) community one of the crucial elements to reaching FI is to have LOW EXPENSES and a HIGH SAVINGS RATE. A combination of the two is the best way to accelerate your FI path.

So today I thought I’d share an infographic with you of how I calculate my personal savings rate. Without showing actual dollar figures I used percentages of Gross and Net pay to illustrate how it breaks down. I prefer to use the SAVINGS RATE as a percentage of NET INCOME (how much you actually ‘take home’ rather than GROSS, because there’s no way you can “SAVE” money that’s already earmarked to go to the government as taxes.

So for 2017 I was able to get to a 68% savings rate*, bumping up 4% from my 2016 rate of 64%! When you focus on optimizing your expenses and investing as the primary financial goal it’s easy to quickly raise your own savings rate.

* This 68% may change slightly depending on tax filing. For example if I end up owing additional money, I would adjust the savings rate down to account for the lower net income due to increased taxes.

How To Calculate Your Savings Rate

Do you use a different method to calculate your rate? Please share in the comments.

 

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Experimental Personal Finance

034 – Experiment – A Year Without Buying Clothes or Shoes

No Shirt, No Shoes, No Problem

On this blog I often enjoy conducting year long experiments with the goal of optimizing my financial life, my health or satisfying a curiosity . I’ve walked 10,000 steps a day for a year. I’ve spend A Year Picking Up Pennies. And most recently I’ve spent a year without buying any clothing or shoes.

Play Better Defense

Why?
As I’ve mentioned many times on this blog the ability to lower your living expenses (Playing Defense) is directly related to the speed at which you can reach FI (Financial Independence). The less money you need to live, the faster you reach a life without required work. And clothing/shoes seemed like an easy budget category to take the knife to. Plus as a society we’re already drowning like hoarders in a excess of apparel, with the waves of ‘fast fashion’, automation and a globalized labor force all flooding the market. According the Bureau of Labor Statistics the average family US family spends $1700 a year on clothing alone. And remember this is the ‘average’, meaning there’s a lot of people who spend waaaaaaaaay more. As designers who’s salaries are generally above the national average, there’s a lot of disposable income potentially being wasted on clothing.

August 2016 - August 2017

The Process
Since this experiment was focused on NOT buying stuff, the process was pretty simple. DON’T BUY CLOTHES or SHOES. From August 2016 to August 2017 I didn’t buy anything, no clothes, no shoes, no hats, no belts, no nothin’. I simply kept on wearing my same old clothes I already had, many of which are already many years old. When your forced to reevaluate what supplies you have it’s very easy to be resourceful, making thing last, and extending their lifespan.

Challenges: Wear and Tear

Challenges
It wasn’t all easy. After many months you do start to notice the excess wear on certain items, in my case it was sneakers. Since this experiment coincided with my experiment to walk 10,000 steps a day I was putting some serious wear and tear on my sneakers, wearing multiple pairs down flat. And when I finally broke my shopping fast, that was the first item I actually “needed” to replace.

How Much Did I save?

How Much Did I Save?
It’s a little difficult to say since I’m already someone who spent very little on clothing/shoes. I estimate I spend a total of less than $400 per year on clothing/shoes/outerwear/accessories/everything. But if you’re a more ‘typical’ US shopper you have much more cash to claw back for your FI goals. Get those hundreds or possibly thousands of dollars per year working for you buy INVESTING them into LOW COST INDEX FUNDS.

 

Strategies

No Thanks.

Don’t ‘Dress to Impress’
Choose a cheaper, and more “timeless” look and stick to it.  Don’t follow fashion trends, as this will require you to buy more stuff, more often just to keep up. For instance those overalls and 90’s throwback sunglasses aren’t going to be quite as useful 5 years from now. As a designer I’m lucky that I don’t have a job that requires me to dress up. And after all I didn’t go to art school to wear a suit and tie. So my uniform is generally jeans and a t-shirt. My goal is to maintain the lowest level of fashion acceptable for work. You may be forced to meet a certain level of “professionalism” in your appearance, but try find ways to spend as little as possible to meet that threshold. Also choosing versatile items that work in combination with many outfits will save time and money. 

Hack Black Friday
One way to cut expenses is to buy all your clothes for the year around the Black Friday/Holiday sale season. That is what I’ve done for the last few years. I abstain from buying anything for the entire year, and then buy everything I need for 50% off. I managed to get my whole wardrobe for 2018 for around $250. And for the record I HATE the whole idea of Black Friday. And I don’t think you should participate in the disgusting display of consumption. BUT…If you can cut your expenses in half (only on the essentials), while sitting home on your computer, without throwing your body into the greedy hoards, it’s a good strategy.

Just DON'T Buy it. It's Easy.

Take Up the Challenge!
I encourage you to give this a try. Of all the experiments I did this year, this was by far the easiest to accomplish. So cut those expenses and get those savings rates cranked up in 2018. Just DON’T buy stuff! It’s easy.

Have you done this before? Please share your stories in the comments.

 

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Design Personal Finance

033 – The Power and Poison of Branding: Don’t Drink Your Own Cool-Aid

The Power and Poison of Branding: Don't Drink Your Own Kool-Aid

One of the main reasons I started this blog, besides spreading the word on FI (Financial Independence) to creatives, was to try to take some responsibility for the role I play as a Graphic Designer in fueling the destructive force of consumerism. It’s a bit of an apology really. As someone who helps craft the visual side of brands, commercials, and television promos, in a way, I’m “part of the problem”. And through this try to I hope to offer some new perspective on how to neutralize the power of advertising and branding, and its control over your spending. After all once you realize that branding and advertising are simply cleverly engineered tools to get you to part with your cash, you’ll be able to reframe your thinking and put a ton more money towards saving for your FI goals instead.

 

As designers/visual people we appreciate the ‘art’ of design, and naturally gravitate to objects, products, and brands that are aesthetically beautiful or well designed. And don’t get me wrong, there’s nothing bad with appreciating good craftsmanship and design. What I want to focus on is the POWER of BRANDING to manipulate you. Companies spend mountains of money crafting their brand image all with the goal of getting you to feel a special ‘connection’ to them, a sense of ‘loyalty’ like you’re part of their ‘tribe’. The goal here is to get you to buy more stuff, and buy it from THEM.

Trading Your Money for Lifestyle

And it’s not simply a visual attack (logo, color palette, typography, photography treatment, shape language, signature animation style, etc), it’s a fully built out CHARACTER. The brand has a ‘voice’, meaning how the advertising will talk to you both in language and actual spoken word, including the ‘values’ and tone the corporation is trying to cloak itself in. For instance it could be a COACH, pumping you up with motivational language, a FRIEND talking in a casual tone, or a JOKESTER who’s over the top but good natured. There’s many possibilities of brand voice, but the overall goal is to create to connect with the consumer (you) and make a relationship.

Product does not equal lifetstyle

And as humans we have a natural inclination to want to belong, which makes us extra susceptible to branding. Our brains see this carefully created messaging, offering up a picture perfect life and happiness, and all we have to do is buy this car, this phone, these jeans, etc, and we want in. We want to be an ‘Apple Person’, a ‘Lexus Person’.  Because of the power of branding, there’s a whole narrative created that the kind of person who owns a certain phone or brand of bike or whatever is (fill in the blank), more attractive, more wealthy, more athletic. If we can just buy a Lincoln, we’ll be a rich guy like Matthew McConaughey spending our nights at parties in the Hollywood hills. This is the part of Branding that is DANGEROUS. When people look beyond the actual product and think they’re buying into some kind of lifestyle, they’re more willing to part with their money.

Luxury Brands - Branding's Biggest Lie
This is especially true for anything that tries to label itself a ‘LUXURY’ brand. As a designer I can easily design something that looks ‘luxury’ (think mainly darks and neutrals with pops of metallic or gold accents, thin serif typefaces and some subtle lighting or texturing). Bam! Instant luxury. With branding design Graphic design is essentially WEAPONIZED ART, a message wrapped in a beautiful package. But don’t confuse a color palette and you actually becoming wealthy. Remember this brand image is 100% MADE UP, TOTALLY FABRICATED FROM NOTHING, devised by an army of Strategists, Copywriters, Coordinators, Marketers, Focus Groups, Creative Directors, Designers and many other throughout the agency. The bottom line is, spend your money ONLY on things you need, NOT to make yourself ‘feel’ like you’re part of some fictional ‘tribe’.

Reach FI through Saving not spending

I want to be clear that I’m not against branding, advertising or capitalism in general. It’s an unavoidable part of existence and if we’re going to have it, it might as well be well designed and beautiful. Why be forced to stare at ugly typography and unintelligible information design? EVERYTHING in life should be well designed. However I feel like as designers even though we know that branding is simply a dreamt up narrative employed by a corporation, but we still fall for it. It’s like we mix up the Cool-Aid ourselves and still drink it. My goal with all of this is to convince designers and creatives to train their brains to fight the pull of branding. This way we can focus on spending less, saving more and investing the difference. When designers realize that once we optimize our lives it’s easy to imagine reaching FI (Financial Independence) quickly, possibly in 10 years or less. And once you reach FI you’re free to use your powers for GOOD, allowing you to focus design away from commerce/marketing and more towards ART.

 

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Investing Personal Finance

031 – Chasing FI with Project FI by Google – How to Cut Your Phone Bill in Half

Chasing FI with Project Fi

If you’ve been following this blog you know that to accelerate your way to FI (Financial Independence) involves both PLAYING BETTER OFFENSE (Making more income) or PLAYING BETTER DEFENSE (Living below your means and CUTTING YOUR EXPENSES so you can save more). In this post we’ll be covering the latter, and focusing on cutting expenses by lowering our cell phone bill with Google’s Project FI. Hey I mean it’s even got “FI” right there in the name! 🙂

Like it or not cell phones are becoming more and more ubiquitous in our lives and not having one isn’t really an option. And although they can add a lot of value into your life, they can also cost you a ton of money and take a large chunk of your monthly budget. Over the past two years I’ve been systematically going through every expense in my life and trying to find a way to optimize it, either cutting it out completely (like cable) or trying to reduce the cost by being a little smarter or finding cheaper alternatives. Up until recently I’d been in the iPhone camp, having bought 3 of them going back to the iPhone 3G in 2008. They have been excellent phones. However, with these phones you were generally tied to one of the more expensive carriers and subject to pricey data plans.

Project FI Carriers

Introducing Project FI by Google.
Project FI is Google’s wireless service. Think of them like any other carrier (Verizon, ATT, Sprint, etc), except they don’t own any of the towers. They actually share the towers of existing carriers, specifically Sprint, T-Mobile and US Cellular. Through clever software, Project FI actually is able to switch between carriers towers to find the strongest signal (even in the middle of a call or data transfer), all without interrupting usage. Because they don’t bear the cost of having to build and maintain a network of transmission towers, they’re able to offer comparable wireless service at a fraction of the cost of the big guys like Verizon.

Project Fi Compatible Phones
What’s the Catch?
The biggest catch with Project FI is you have to use of the approved phones that work with the FI technology. So that means no more iPhone. Luckily I owe no loyalty to Apple and Project FI does offer a couple great options. At the moment the only phones supported are the Pixel, Pixel 2, and Android One Moto X4. I opted to go for the Pixel 2, which was a little on the expensive side at $649, but still cheaper than an iPhone. I mainly chose the Pixel 2 for the camera, and if you don’t need the best camera you can save even more by going with the Moto X4 for only $324.

Switching from iPhone to Android

Switching from iPhone to Android for Project FI
I love the Pixel 2 so far. Admittedly it did take a few days of to acclimate to the Android OS after using iOS for almost a decade. But it’s basically the same thing. You just have to learn the small nuances of where different settings or buttons may be. And there’s a Google equivalent for every Apple app. There’s something liberating about not being tied to the Apple ecosystem. And especially love that I don’t get constant warnings anymore about my iCloud storage being almost full.

The Best Parts of Project FI
• Data management and payment plans are beautifully SIMPLE
• $20/month Unlimited Calls + Texts
• Can add additional people for $15/month each
• $10/GB for Data

 

Google Project FI Pricing
So for example a plan for 1 line with 2GB of data would be $40 ($20 Unlimited Calls/Texts + $20 data at $10 per GB) + of course taxes and fees which will vary depending on what state you’re in.

And the way they do the data is great. You simply pay for how much you use. This is perfect for someone like me who rarely uses more than 1GB per month. And if you use less than the amount you paid for you actually get a credit refunded to you at the end of the billing period. This is the opposite of the infuriating way Verizon handles data where if you go over your data limit, even by 1kb, they charge you for the whole extra $15 Gigabyte.

International Travel with Project FI and Pixel 2
Project FI Loves International Travel
Another great feature of Project FI is the ability to travel internationally with your phone and IT JUST WORKS. Data costs the same $10/GB. No need to purchase a special international plan or get a special sim card. Foreign calls will be extra depending on the country, but prices are reasonable. I remember having to buy an international data plan from Verizon a few years back for some ridiculous price and constantly worrying about using too much data. Never again!

Verizon vs Project FI
How Much Did I Save by Switching?
Our previous family plan with Verizon was 2 iPhones sharing 3GB of data, and it came out after taxes and fees to around $156 every month. I know 🙁 However, now that we’ve made the leap to Project FI, we have 2 Pixel 2s, with 3GB shared data for around $72. That’s MORE THAN HALF OFF what we were paying at Verizon. And since we rarely use any data (instead mainly use WIFI) we’ll probably get a big chunk credited back to us each month bringing the cost down to $55 or $60. I’d estimate switching to Project FI could easily save us $1100 a year. That’s $1100 I can put to work for me in a LOW COST BROAD BASED INDEX FUND, pushing me closer and closer to FI (Financial Independence)

Cut Your Cell Phone Plan in Half with Google Project FI

So far the Project FI experience has been great. If you’re looking to cut your phone bill in HALF and still have a great phone and mobile experience, I’d recommend giving Project FI a try. To get you started you can get a $20 credit by signing up using my referral link . If you do I’ll get a $20 credit to my Project FI account as well. Win win!! Plus you can’t put a price on the satisfaction you feel by telling Verizon to get lost! 🙂

Get started with Project FI!

 

Please share any Project FI experiences, recommendations or data saving tricks in the comments below.

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Investing

030 – Let’s Get International! Diversifying Your Portfolio with International Stocks VGTSX VTIAX

Let's Get International!

In the previous post we explored adding diversity by including the asset class of BONDS. Today we’ll push for further diversity by adding International Stocks to the equity side of our portfolio. For any new people just joining us please go back and read INTRO TO INDEX INVESTING to familiarize yourself with the concept of INDEX FUNDS before moving forward.

Every Publicly Traded Company Outside of the United States

What are International Stocks?
Any publicly traded company that’s based outside of the United States would be considered an International Stock. As investors in the United States we often are heavily weighted towards our own domestic company stocks. I myself have a very large percentage of my portfolio in the Vanguard Total Stock Market Index Fund (VTSAX/ VTSMX) which is 100% US corporations. This is partially due to HOME BIAS, which is the tendency for people to invest a higher amount in their home country (domestic stocks), rather than take full advantage of world diversity. This is true around the globe, not just in the US.

Valuation of all the stocks in the world

Why invest in international Stocks?
As I mentioned  earlier the US stock markets makes up a huge chunk of my portfolio, and with good reason. The United States stocks actually make up HALF the value of the all the stocks in the world. The rest of the countries combined make up the other half. Despite being a powerfully large chunk of the economy at 50%, if you’re not invested internationally you’re potentially missing out on HALF of the world’s economy. And there’s some huge companies out there you’re not getting to invest in. For example… Samsung, Toyota, HSBC, Shell, Tencent (huge Chinese tech company) and thousands more. Also the United States domestic stocks don’t always outperform the international stocks. By OWNING A PIECE OF THE WHOLE WORLD’S ECONOMY you give yourself more diversity and further spread out risk.

Vanguard Total International Stock Index Fund

VTIAX – The easiest way to invest in International Stocks.
If you’ve been reading this site you know my love of LOW COST, BROAD BASED INDEX FUNDS. Lucky for us there’s the Vanguard Total International Stock Index Fund (VTIAX Admiral Shares or VGTSX Investor Shares). It’s just like the Total Stock Market Index (VTSAX/ VTSMX), in that it goal is to track the total market, only in this case it’s the markets outside of the United States. It contains over 5700 companies from around the globe, containing a mix of Large, Mid and Small Cap corporations. Think of the diversification you’ll get when you add that to the 3000+ companies you’re already exposed to with VTSAX.

VTIAX Plus VTSAX

What are the downsides of international investing?
So now we’ve covered the PROS OF INTERNATIONAL INVESTING (Greater Diversity, Potentially Higher Returns, Spreading out Risk), we’ll also cover some of the possible CONS. One potential downside to international investing is greater risk in regards to exposure to foreign governments and currencies. Not all countries/foreign markets have the same economic conditions as the US with a relatively stable currency, with established reliable regulatory and accounting practices. The absence of these can lead to more unpredictability and unexpected volatility.

Expense Ratios VTIAX vs VTSAX

There’s also the issue of higher expenses. It costs slightly more to invest internationally. For example the Total International Stock Index Fund has an expense ratio of .11% compared to .04% for the domestic Total Stock Market Index Fund. This is still a Vanguard fund, so the ER (expense ratio) is still considered very low in the grand scheme of things. As a refresher, the expense ratio is the fee that the fund administrator (in this case Vanguard) charges you yearly to hold the fund. For example if you had $10,000 invested in VTIAX Vanguard charges you .11% (or $11) per year.

John Bogle

Surprisingly Vanguard’s founder John Bogle actually isn’t a fan of international stocks calling them “not essential, nor even necessary, to a well-diversified portfolio”. His belief is that US investors already receive an adequate international exposure due to the globalized nature of the economy, where many US companies do a majority of their business in other countries. Therefore the exposure to foreign companies and currencies is already baked in to the Total US Stock Market Index. This is true to some degree. HOWEVER… if you want to get maximum diversity in your stock holdings, it’s best to try to OWN THE WHOLE WORLD.

Own the Whole World

How much should you allocate to International Stocks?
This is of course a very personal decision that you should make based on your unique investing goals and how much risk you prefer, so please don’t take this as an official recommendation. I’ve heard recommendations of anywhere between 20% and 50% should be allocated for International (Non US) Stocks. I personally only have a very low percentage (<5%) in international at the moment, although my goal is to eventually push this to around 20%.

There’s much more to learn about International Stock Index Funds, but hopefully from this you were able to grasp the basics and learn why they might be a good fit in your portfolio.

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Investing Personal Finance

029 – Investing 101: The Broad Strokes of Bonds

Investing 101: The Broad Strokes of Bonds

In this post we’re going to cover the basics of another investing asset class, BONDS. If you’re new to this site , or new to investing, please first go back and read the post where we cover the basics of STOCKS and INDEX FUNDS.

Much like stocks, the asset class of BONDS is a huge and wide-ranging topic but my goal here is just to give you a basic introduction so you have a grasp of the mechanics. As we learned earlier when you buy stocks you’re buying an OWNERSHIP STAKE in a company, or many companies as with the case of an INDEX FUND. When you invest in BONDS you’re LOANING an amount of money (the original amount of money lent is known as the PRINCIPAL), with the goal of receiving a defined YIELD payment. Think of the yield like you would the interest on a savings account, a defined amount you’ll receive periodically.

Type of Bond Issuers

Who issues BONDS? You may be wondering who you’ll be lending this money to through bond issues. Bonds are issued by many sources including the Federal Government (Treasury – T Notes, T Bills, T Bonds, TIPs), Government agencies (Ginnie Mae and Fannie Mae issue bonds backed by bundles of mortgages [Mortgage Backed Securities]), Local and State Governments (Municipal or ‘Muni’ Bonds), and Businesses (Corporate Bonds). In this post we’re just covering the broad strokes so won’t get into the gritty details of each of these different bond types, but just wanted you to have a general understanding of what types of institutions are borrowing your money.

How Bonds Work

As with STOCKS, BONDS can both be bought individually and as packaged MUTUAL FUNDS or BOND INDEX FUNDS. In this post I’ll focus mainly on BOND INDEX FUNDS, as that’s what I personally use and believe is the easiest way to get bonds into your portfolio. I invest in the Vanguard Total Bond Market Index Fund. It’s kind of like the bond equivalent to the Total Stock Market Index Fund (VTSAX), as it’s mirroring the total bond market with a mix of short, intermediate and long term bonds.

Bond Index Funds

How long bonds are held? All bonds have a MATURITY DATE, which is the date the bonds stop paying you interest and repay your original principal. The duration until maturity date can vary widely, from bonds that mature in less than a year to those that go 30 years or more. For instance a bond fund like the Vanguard Total Bond Market Index Fund contains bonds of all different durations, averaging between 5-10 years. Individual bonds can be sold before the maturity date, which isn’t the case with bond funds. Because bond funds hold many individual bonds they are constantly replacing bonds that reach maturity with new issues.

Interest Rates vs Bond Values

You may be wondering why you’d care about how long the duration of a bond or bond fund is. That brings us to a key aspect to consider when investing in bonds, INTEREST RATES. Interest rates are the biggest factor that affects the bond market and the value of your bonds or bond mutual funds. There’s an inverse relationship between bond values and interest rates, meaning that if interest rates go up the value of your bond goes down, and if interest rates go down your bond values go up. Take an example where you have a bond with a 3% yield, where the issuer is willing to pay 3% to borrow money from you based on current interest rates. If however interest rates go up and now borrowers are willing to pay more, say 5%, you think you’ll be able to sell your 3% bond to lend again at the higher rate? People who buy bonds wouldn’t want your lower paying 3% bond, when they can get a nice shiny new 5% bond. So in order to sell your bond you have to sell it for less than its original value to compensate for the lower yields. The opposite is true if interest rates go down, you’d be able to sell you higher yielding bond for more than its original value. I personally prefer to invest with bond funds that just hold all the funds to maturity and don’t have to worry about selling early.

Bonds Can Be Risky Too
It should also be mentioned that, just because bonds are seen as more stable and less risky than stocks, there is still risk involved. The issuer of the bonds could default on the loan and there is risk of losing your principal (your original loan amount). Bond issuers are rated to reflect the risk of default, with greater risk (lower credit ratings/greater chance of default) usually coming with higher reward (higher yield). You’ve probably heard the term “junk bonds” or “high yield bonds” which are issuers who have low credit ratings. Owning a bond fund, like the Vanguard Total Bond Market Index Fund is a way to mitigate this risk of default. By owning a slice of many highly rated (“investment grade”) bonds you’re less likely to be adversely affected by a single bond going into default.

How much of your portfolio should be in Bonds?
Why would you want bonds in your portfolio? That’s a good question. Bonds generally have a much lower rate of return than stocks, especially in our current low interest rate environment. Bonds are said to help “smooth the ride” of market volatility. There is often (although not always) an inverse correlation to the movement bond market against the stock market. By this I mean when stocks are on the roller coaster ride of volatility, soaring and crashing, bonds are more predictable steady return. And often times, as stocks go down, bonds go up (though not always). For instance during the crash and great recession of 2008, while the stock market lost around half its value, bonds actual went up by 5%. Generally the younger you are the more stocks, and less bonds you’d want in your portfolio, as you’ll be better able to handle the volatility over your long investing horizon. In a later post we’ll get into specifics on just how much of your portfolio you should allocate to bonds.

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Freelancing

028 – A Decade of Freelancing Visualized – Average Number of Days Worked Per Year.

10 YEARS OF FREELANCING

I just reached a milestone. It’s officially been 10 YEARS OF FREELANCING for me! Since 2008 I’ve been keeping meticulous records of how many days of work I book each year, and how many I choose to take off. Looking back at the data of a decade’s worth of working shed some light on some interesting stats. Do you know how many days you worked last year? How about how many days you work a year on average? All this information might seem useless at first, but it can be very helpful in estimating income or projecting future rates and raises.

262 Business Days Per Year - 180 School Days per year

Depending on the year there are between 260-262 ‘business days’ in each year. This can also be represented as an average of 2087 hours per year. As I’ve written about in the past the FREEDOM to work as much or as little as you want is one of the biggest PROS OF BEING A FREELANCE GRAPHIC DESIGNER. I’m a big advocate of maintaining a healthy WORK/LIFE BALANCE. I purposely plan my life to avoid getting anywhere near this 262 business days per year. And instead I try to work in ample periods of time off to recharge and visit family. I try to think of it more like when you’re in school and you get a couple months off a year for Summer vacation. For a little perspective, there are 180 school days in a school year. Why can’t ‘adult’ life work the same way?

1996 TOTAL DAYS WORKED 2008-2017

After crunching all my numbers I’ve calculated that I’ve worked a total of 1996.5 days over that last 10 years. I’m now set to cross the big 2000 days mark in early 2018.

199.65 Average Days Worked Per Year as Freelance Graphic Designer

This works out to an average of 199.5 days per year, substantially lower than the 262 business days. Think about that. It’s like working two to three fewer months EVERY YEAR. Of course being a FREELANCER, these are UNPAID ‘VACATIONS’ so you have to make sure you have a plan to cover all your expenses during the downtime. Although if you’re here reading about pursuing FI (Financial Independence) , you’re probably already killing it with a super high savings rate, and a comfortable cash cushion.

Graph of Average Number of Freelance Working Days in a Year

Here’s a graph of how it breaks down over the decade. There’s been quite a variation, with a maximum number of days worked per year of 221.5, all the way down to the minimum of 179.

FLEXIBILITY
Personally the most important takeaway from this data is the power of FLEXIBILITY. It shows how FREELANCING gives you the power to dial up or down the number of days you work. Need to generate a little extra this year to hit a savings goal? Crank it up! Feeling like you’re starting to crack under the pressure of design deadlines? Turn it down, take some time off.

So how many days a year are you working? If you don’t know, START TRACKING TODAY. I just use a simple Google Doc. Once you know know how much you work, and how much you actually ‘need’ to work to meet you savings goals you can start to dial in the perfect balance of LIVING and WORKING.

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Design Freelancing

027 – The Imposter Designer – Chasing FI with a Chip on Your Shoulder

The Imposter Designer - Pursuing FI with a Chip on Your Shoulder

Our perception of ourselves and our identities are often formed very early on in our careers or in our lives. When you’re first starting out you may be told things like “you’re not the kind of person that does _______” or “you should do ________, your skill set or personality is more _________”. These limiting thoughts can be immensely detrimental, especially during your formative years and can hold you back from reaching your true potential. Luckily, you can also use these negative thoughts as fuel to motivate you, by succeeding against predictions and proving them wrong. I myself have had this “chip on my shoulder”, and I feel that it has actually HELPED me do better in life.

2 PATHS

I still remember the specific conversation that set me on this path. I was in college and working part time at an advertising agency in their interactive department. My friend was already working there and helped get me in the door. The job itself was great for a college job. I got to work side by side with my best friend and get some decent experience before I finished school. It was in my employee review where I first gained my “chip on my shoulder” and there it’s been perched ever since. There were only two of us in the department. My friend had been there longer and was generally seen as more of the designer, and I’d say he was definitely better at it. In the review, my boss told me he thought I was really more of a production or programming kind of guy and should focus on that in future, while my friend should focus on being the design guy. As someone who’s goal was to be a Graphic Designer, and hadn’t even really had a real crack at being a designer, this was devastating.

What If He's Right?

But instead of taking his advice and pursuing a field I had no interest in, I used his criticism to light a fire under myself. But I think it’s important that I didn’t just dismiss his comments as false.  Even if I disagree I like to look at the scenario from the other side. I thought “What if he’s right? What I do to improve to change the situation?”. I vowed to work harder, practice more, become a better designer, and prove him wrong.

Double Edged Sword

Even to this day, after over a decade of consistently working as a Freelance Graphic Designer, I still have that voicein the back of my head telling me that I’m not really the designer type, and feel like an imposter. Despite pretty decent success in both New York and LA, I still can’t shake it. It’s a double edged sword, the motivation that helped propel me to this point, also remains the nagging doubt in my mind that never lets me feel truly comfortable in my skin as a Designer. But despite this, overall I still see it as a net positive, keeping me from become complacent, always proving that I belong in the room. People who are always moving and learning don’t have to work about being left behind.

Starting Blocks

And these restricting assumptions are not just limited to your career prospects. You may have narrow thinking about your finances, your health or even your own personality. “I’m not the kind of person that…can save half their income…..can walk 4 miles everyday…can give the presentation at work”. Believe me I’ve struggled with many of these. My wife and I have been pursuing FI (Financial Independence) with a $120,000.00+ student loan chip on our shoulders. It’s even more fire and motivation than if we’d had our way through college paid for us. Don’t be comfortable. The important takeaway is to reframe your thinking on these constricting beliefs. Don’t use them as a crutch to avoid trying in life. Instead use them as a starting block, wield them like a weapon and push yourself forward.

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.

 

Design Freelancing

026 – The Art of the Mood Board – Becoming a  Digital Hoarder

Art of the Mood Board
As a freelance graphic designer the first step of almost every project is gathering reference (aka tearsheets) and creating a mood board. The ability to quickly create mood boards, during the concepting and ideation stage can help you get a head start against other designers and increase the chances of your idea getting picked.

 

What is a mood board?
A moodboard is a collection of existing designs, typography, color palettes, motion theory, and photography styles, that illustrate the “mood” or general look and feel of the design you want to create. This board along with a written treatment can help sell the client on a visual direction before any actual designs have been created.

3500+ per year

Be in the Know
Part of being a designer is knowing the latest and greatest work out there, and being able to reference current styles and trends. For instance, if the Creative Director is looking for examples of Tilt Shift Photography and Miniatures, you should be able to quickly pull multiple examples of this technique from memory. Knowing what’s already out there will also ensure you’re not copying somethings that’s already been done.

Becoming a Digital Hoarder

Embrace Your Inner Hoarder
In most areas of my life I’m always trying to become more minimalist, simplifying the number of things in my space. However, the digital realm is one arena where I embrace the idea of hoarding. Because digital media doesn’t take up much space and hard drives are cheap I save as much reference material as I can. Everyday I’m scanning blogs and artist websites collecting any images I think might be good reference for a future project. In my online scavenging, I usually collect around 3500 images/movies per year.

 

Where to Look for reference

Behance

Behance: A great place to start is Behance. It’s a portfolio service run by Adobe where you can follow as many artists as you want, while also posting your own work. There’s a feed that displays the latest designs uploaded or “appreciated” by other artists.

Feedly
Feedly: Another tool I use is Feedly, which is a free RSS reader that you can use to follow many blogs all on a single site. You simply enter the URL of the design blog or artist portfolio site and it aggregates all the new posts.  This way you don’t have to manually check every site for new content. It also suggests other sites you might want to follow based on your tastes.

Vimeo

Vimeo: Vimeo is a great place to find video reference for motion theory. Much like Behance you can follow studios and artists and get feeds of their latest work.

 

Assembling the mood board
After your Creative Director or client has briefed you, and it’s time to start looking for reference, you don’t need to start scouring the web. Thanks to your new digital hoarding ways you’re already way ahead since you’ve been collecting all along. Now all you have to do is scan through your mountain of a collection to see what images or movies will work in your proposed visual direction. Being one step ahead will help you make more robust, fully developed mood boards, and allow you to crank out more potential directions, giving you a better shot of being the one that gets picked by the client.

 

Are there any other sites or feeds where you find great reference material? Please share in the comments.

 

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DISCLAIMER: The information on this site is for entertainment and informational purposes only. I’m a graphic designer. I’m NOT a financial advisor. There are not official sounding initials after my name. I’m just interested in investing and hope to get you interested as well. Know that THERE IS RISK IN ALL INVESTING. Please fully inform yourself, and consult with your accountant or other financial professionals before you make any financial decisions.