Category Archives: Class & Wealth

The Purpose of Life at 29

I feel like all I write about lately here is my constant back-and-forth on what I want the next 10 years of my life to look like. My good friend who is also a good year younger than I am just gave birth to her first child this week, and I’ve taken a good look at my life and feel like I’m making enough progress in my professional life to deserve to be a “real adult.” Which doesn’t have to include the whole marriage and kids thing, but it does include living independently, without random roommates, and being in a situation where I could have kids, or at least a kid.

Surprisingly enough, I’m starting to feel ready for that. I survived a small layoff recently, and I know that while my job will never be a sure thing, I’m valued in my role because I provide significant value to my company. Hey, I’m actually good at what I do, and confident enough now to know that if I lost my job I could, knock on wood, find another one. That feels great. That makes me think it might be time to start a family of my own.

I love my boyfriend so much. I’ve written a bit about how he hasn’t been in a full time job yet in his life, but at least he’s trying now. He’s also doing a bit of freelancing. It still is uncomfortable thinking about him being ok with making $20k per year while I’m bringing in over $100k and actually saving for retirement. I still occasionally look around at other guys and think, man, wouldn’t my life be so much easier if I could just fall in love with someone who has a real job and motivation to move up the career ladder? But that’s also what I love about my s/o… he isn’t motivated by money. He isn’t the type to work his life away. And ultimately, all I really want is a man who will be there to cuddle, to go for walks with, to make dinner with. What more do I need?

So maybe I should just get on with it and marry the guy. If I’m not going to marry him ever that’s one thing, but I’m pretty sure that’s what I’m going to do. I haven’t really felt happy at all in life until him, and I’m sure I won’t feel happy without him. After seven years, if I feel that way, that has value, and truth to it. Money be damned.

Women = Breadwinners. Man = Breadmakers.

It looks like I’m not the only woman in the world gearing up for a life of winning some bread. Four in 10 American households with children under age 18 now include a mother who is either the sole or primary earner for her family, according to a Pew Research Center analysis of Census and polling data released Wednesday. This share, the highest on record, has quadrupled since 1960.

The public is still divided about whether it is a good thing for mothers to work. About half of Americans say that children are better off if their mother is at home and doesn’t have a job. Just 8 percent say the same about a father. Even so, most Americans acknowledge that the increasing number of working women makes it easier for families “to earn enough to live comfortably.”

The median household income for married women who earn more than their husbands — more often white, slightly older and college educated — is $80,000. When the wife is the primary breadwinner, the total family income is generally higher. That’s probably because if men work they’re doing it for the money, whereas there are woman working just because it fulfills their blessed hearts, if they happen to be married to someone wealthy. Continue reading

The Case for Marriage Equality: Everyone Has the Right to Be Equally Miserable and Taxed at a Higher Rate

The divorce rate of people post 50 years old has doubled between 1990 and 2010. In 1990, only 1 in 10 divorces were people 50 and older. Now it’s 1 in 4. Meanwhile, the overall divorce rate is trending downward. The stat that 50% of all marriages end in divorce is now incorrect, it’s more like 40%. Still, that’s quite a few break ups for something that requires you to take a vow of “till death to us part in sickness and in health.” My aunt, newly almost-divorced at 49, states that if half of marriages end in divorce, at least half the other half are unhappy. I think that’s probably true.

My parents are what you would call lifers. They are not happy together by any means, my dad is a wreck and both verbally and emotionally abusive, and he will both talk to me openly about how hot some woman is and whether he should ask her out while also how much of an idiot my mother is, meanwhile, my mother has never been able to actually grow up in the relationship, she’s like a 12 year old who can’t handle the stresses of everyday life and is treated like such shit, but the two of them would never get a divorce. I haven’t exactly grown up with the best example of a good marriage to inspire me to walk down the aisle. Yet I still fancy myself in a white dress, signing my life away to one person, I’m just not sure why.

Financially, marriage is sometimes a liability. According to The Tax Policy Center, “Marriage penalties and bonuses result from the combination of progressive tax rates and taxation of a married couple as a single tax unit. With progressive taxes (which impose higher rates on higher incomes), combining spouses’ incomes can result in some income being taxed at higher rates than if spouses’ incomes were taxed separately. That can occur only if joint tax brackets are less than twice as wide as individual brackets. (A couple does not have to file a joint tax return but their alternative-filing separately as a married couple-almost always results in greater tax liability.)” Continue reading

Fortunate Misfortune: Thoughts on Privilege

About a year ago I met a young woman on Craigslist with the goal of finding an ongoing exercise/running partner. Unlike other strictly platonic folks I’ve met in the past, never to see or hear from again, we totally hit it off. Her friendly, quirky and talkative personality was refreshing, and we always seemed to have something to talk about to take our minds off our increasingly pounding heart rates.

Even though I don’t mean to, I always judge people immediately regarding their socioeconomic status. I’m aware that I do this, and feel bad about it, but I do it nonetheless. I grew up upper middle class with friends all over the middle class spectrum (some on the lower end of it) but always found myself meshing best with others who came from the upper middle class side of town, so to speak. Anyone who was upper upper middle class, or lower upper class was usually too spoiled for me to handle, so there was a group of people who I felt naturally comfortable around somewhere in the middle of American socioeconomic rank.

I’ve always been aware of my privilege, as well as my lack of great wealth as some others have. I know a large reason I am where I am today is due to my luck of being born into a family that could afford to send me to college with no debts, and help see me on to my financial independence (from my parents, not from working) at age 21.

My new friend, who I have seen off and on again this last year, never came off as someone with a lot of money. I didn’t really think too much about her socioeconomic status, but she seemed to be middle class, making her own money through building her impressive career in design. Her fiancee, now husband, could have been middle class or lower middle class, but it was clear she was supporting him as he completes his education. I didn’t once think this girl is loaded.

Loaded is not the right word to use. Through a series of events, some terribly tragic, and others just random, she is virtually a multi-millionaire. Not a billionaire, but still, through chance, fate, and unfortunate fortune, she doesn’t need to worry about money, even though she doesn’t want to live like she doesn’t need to worry about it.

Adopted at a young age, she grew up in a household with entrepreneurial parents. They own a storage facility that they built from the ground up for less than $1M, and it’s now worth $2M to $3M. Besides its value, it also takes in about $40k per month currently even though it’s not fully occupied due to the economy. They own two houses and have saved well through their life. Until recently, my friend was destined to one day split this fortune with her brother. That is, until tragedy struck.

Her brother went into the army and was killed only a few weeks after his first tour in Iraq. Her family was absolutely devastated, and will never fully recover. But one strange financial twist to the situation was that apparently all army families, if their loved one is killed in combat, get $100k in memory. In addition to this, her brother decided to take out a large life insurance policy out on himself, which resulted in a random $400k check upon his death. This terrible tragedy left my friend with $500k in the bank (no small sum of change) that she doesn’t want to touch, and feels terrible about. Yet that sum of money will change her life, as will the one-day inheritance from her parents. It seems the worst of fortune in one’s family offers, at times, the best of financial gain. Even with typical family inheritance, in a morbid awful way, families with parents that die in early retirement leave behind great wealth, versus those who live into their hundreds.

This is not to say that anyone, sans the occasional sociopath, would ever wish death on a loved one in order to have financial cushion in their bank accounts. But the reality is that wealth — especially inherited wealth of families that can be passed on for generations and spew centuries of inequality — is often spurred by tragedy and other unfortunate circumstance. Wealth built in one lifetime is rarely as large as family wealth built over the years, and while wealth can be invested and grow on its own, it often is the result of these occurrences that no one would ever wish for, but many find themselves entangled in.

There is no moral of the story here, but just some thoughts on socioeconomic status and wealth that I wanted to capture after tonight’s conversation. I greatly enjoyed the open and honest talk about wealth and privilege, and it was refreshing to speak to someone who is — in sheer financial terms — doing better than I am and also dealing with mixed feelings of guilt, gratefulness, and psychological avoidance of financial truth.

I also thought about the friendships I have with those who grew up in lower or higher socioeconomic status and realized that there is definitely some barrier in our conversations and connection, this unspoken discomfort with being around someone who either does not have to work to get by, or who has a psychological block keeping them in their socioeconomic status (ie not finishing college even if they are very intelligent), and the shared comfort felt with someone in a similar socioeconomic status. This is not to say I can’t be friends with people richer or poorer, but there is definitely something about befriending people who are on the same financial page as you versus others who are playing entirely different financial games, and who started either 10 steps behind or 10 steps ahead.

 

 

 

Forget Marriage, She Wants a Baby… or Two… or Three

In 18 months, less than two years away, I’ll be turning 30. While 30 doesn’t feel old, it does send stabbing pangs into my head regarding my biological clock. With PCOS, it’s already ticking faster than most other women, and it may very well be too late to have my own children. Even though I don’t necessarily want to be a mom today, I don’t not want to be a mom ever.

Yes, there are plenty of ways, such as adoption, to have children if you cannot reproduce because you’re too old or infertile, but a tiny, fast-growing part of me wants my own kids. I guess ultimately I feel like the purpose of life — if you choose to believe in a purpose — is to reproduce. Not everyone can do it and it’s not good for everyone to do it because of overcrowding. If I really wanted to not be selfish (unless you ask my mother) I’d avoid childbearing and help reduce the taxing on the environment of yet another human being.

Forgetting logic, though, I really do want to be a mother. Still, I’m terrified for so many reasons…

  • Will I be a good mother?
  • Am I just attracted to the idea of children because I feel like life has no purpose?
  • Can someone like myself actually be a mom? I can barely mange myself!
  • Will I regret having children because I’m terrible at commitments and this is something that clearly you can’t go back on…???
  • What about money? How are you going to afford kids? Yes, you’ve managed to save up $180k in investments and savings, and have a stock package that has a small tiny chance of being worth enough to put you over the $1M networth mark by 40, but raising kids is extremely expensive, and with small houses costing $1.2M, can you really ever give your children the life you want to give them, instead of one that leads you to debt?
  • Wouldn’t you just be better off continuing to work throughout your life and saving money?

Then, I remind myself that there are plenty of people who make much less than I do, and heck, are probably less responsible than I am, who have a child, or a few of them. That’s not to say they should or that gives me a right to go off and reproduce, but it gives me courage that I’m probably not going to be the worst mother on earth. I already know that I have so much love to give and have been waiting my own life to have someone or someones to give that love to.

I’ve been reading a lot of posts online about mothers who regret having children. Most complain about having no time in their lives to do the things they enjoyed — travel, go to galleries, hang out with friends, read a book — and it so happens I don’t have the time for that now with my work schedule, so I can’t imagine I’d miss too much. I’m sure it would be extremely hard for the first few years of having children and I can’t even begin to imagine what it would be like, but at the very least I feel pretty confident that I’m tired of freedom in my life and want something to life for.

It doesn’t help matters that so many of my friends are posting photos of their adorable first or second children — just born — with big eyes staring out at the world, so innocent and pure. I feel so confused looking at these images — part jealously, part awe, part horrified of what that means. Life is going by so quickly — I return home to my family a few times a year and each time I’m there everyone looks like they’ve aged another decade. My father is ill with termial cancer, my mother is neurotic as always yet turning into an old woman, her skin finally wrinkling as she approaches 60. My cousins and aunts and uncles aren’t who I remember them to be anymore. My family has grown up without me — which is my fault, having made the choice to move away — but I’m ready for a family to grow up with me.

My boyfriend certainly wants children. Half the time all we talk about is our future together with our kids. Other than his inability to obtain a full time job for the entirety of his 20s, he’ll be an absolutely wonderful father. I know that he’s the one — sure he’s not perfect, but he’s loving, smart, and wise, as well as more idealistic than I’ll ever be. I could (somewhat) easily find someone who has a more settled life, but ultimately I’d be too scared to live up to that person’s expectations of a wife. With my bf, I know he loves me for who I am, with all my many imperfections. And I love him in return, and despite being freaked out by the financial story of our relationship, I will always be with him.

It could be worse. He could be in debt, or have terrible credit. The good news is that he’s very smart with money, with the exception of making it. He lives in a free-standing structure behind his grandparents house and doesn’t have to pay rent, just basic electricity and internet. He’s received help for his car and covers gas and food with a part-time job, for which he gets paid to little for his role and experience. But he isn’t in debt. His parents aren’t wealthy, but they’re extremely frugal, and when the time comes both of us theoretically will have an inheritance of some sort from both sides. Today, he doesn’t have savings or a retirement account, which is concerning. Then again, deep down I feel like I’m the one who has to be the breadwinner and I’ve put all my chips on this startup where I was an early employee and – though odds are I won’t get rich from it — where I may just be able to eek out some life security without being a slave to work throughout my children’s lives.

The trouble is — what if that fantasy doesn’t work out? What is my stock ends up being worthless? Yes, I’m still being wise with my saving to some extent (I could be saving more, I bought myself a nice TV last month for $500 and managed to spend another $500 on Amazon odds and ends) but until I hit $1M in the bank excluding housing I won’t feel like I can have children. That cushion would not ensure that I can stop working, but it would make me confident that I could have the life I’ve dreamed of, and to somewhat — as a spoiled middle class person — expected. My bf doesn’t require any of the finer things in life, he’d be happy living in a tent somewhere, but I’d like an average upper middle class life for my family, and one where I don’t need to work 60 hours a week to obtain it.

But how long do I wait until I feel like this life is a real possibility before having kids? I know it is going to be extremely hard for me to have children no matter when I do it, and with 1.5 years left until 30, I’m panicing a bit. I don’t need to have children the day I turn 30, but I can easily see 30 turning into 32 turning into 40. I know I have about two years left until all of my stock is vested, so I’m commited to my current life for at least that long, assuming the company keeps doing well and I keep liking my job. After that — if all is going well — I’m sure I’ll have great professional options where my salary could increase, but I’ll be confronted with the dilemma of deciding on leaving the professional world to have a child or staying and putting off children for another few years, and likely never having them.

Ideal world, 2015 rolls around, I’ve just turned 31, I’ve been married for a year, and I am ready to take a break from the professional world to have children. And at this time, I’ve also at least saved $300k – $400k, which isn’t enough to put me at ease, but is enough where I could maybe have a child and not feel so scared about commiting myself and my family to a life of living paycheck to paycheck, or worse.

Get Rich Quick…. Quicker… Quickest

On the eve of Facebook’s impending IPO, and all the buzz about the winners of the mega millions jackpot, the rest of us are left to attempt to build wealth out of our monthly savings. At the Personal Finance Conference a book on wealth generation was handed out to attendees, which stated clearly over and over again that the only way to really build wealth — other than to win the lotto — is to build something that other people want, and do it better than everyone else.

The good news is that I accidentally figured that out on my own. The bad news is that building anything is a huge risk, and has much more potential to fail than succeed. While I dream of getting rich overnight (who doesn’t) I personally feel that if I do not “earn” my wealth I would never feel comfortable spending it, even on reasonable purchases for a frugalista in the upper class.

PersonalCapital.com, my Mint.com replacement, is geared towards people who are actually saving and investing wealth (versus Mint’s focus on debt.) They recently added a really cool feature where you can put in your stock options in a private company and track vesting schedules. They even have a “what if” feature where you can put in the amount of the stock in the future and dream about how much you may have down the line, should your company be a huge success. Granted, I’ve already done this in Google Spreadsheets, but actually seeing the graph makes it feel that much more real. The difference between $3 a share and $5 are share becomes huge once all of the stock is vested.

Even so, I carefully plot my expenses and networth ignoring my company stock, not counting the amount I paid up front to exercise. If the company happens to fail, I’ll consider only the amount I paid to exercise a loss. But I’m not going to get my hopes up about the future too much. It’s definitely thrilling to think that I may have a shot at some sort of wealth at some point in my 30s. My boyfriend and future husband has not saved a dime — so it’s on me to build the life I want for myself and my one-day family. Deep down, I know I will be hugely disappointed if this doesn’t work out, at least somewhat. I don’t need $20M, but I’ve always felt that if I could have $1M by 35 I’d feel comfortable to not have to worry all the time about money, despite still having to work FT with kids, and $5M by 35 I’d be set to live the life I want.

So I guess my goal is $5M. That leaves $1.5M for a house (which is not extravagant in the bay area); $2M to invest and let grow, and $1.5M for life, kids, vacations. It’s quite possible that I’d never live in a $1.5M house, and instead move somewhere more affordable, buy a nice house for $800k, invest more, etc. I’d certainly want to start generously donating to charity, and would make sure to include that in my overall spending plan. $5M is certainly the dream.

It’s no April Fools joke that I have a much better chance of achieving that then ever winning the lottery. After my last startup that had no growth momentum, I went to work for a giant corporation, and decided that I never wanted to work for large corporate America again. Building companies is my passion, and it doesn’t hurt that if you get in early you have a shot at wealth.

The other day I read an article by a big businessman in Europe who said the trouble with today’s generation is that everyone wants to be Mark Zuckerberg and get rich quick. I don’t think that’s a problem, the only problem it creates is that company’s build what they can get out at the minimum versus having the time and funding to create something truly revolutionary. But for individuals, these products and companies can be very successful. Failing fast is probably the best advice I ever received in my life. After all, life is pretty short, whether you live to be 50 or 100. Even if you make it to 100, and you figure you will be working about 50 years between 20 and 70, that’s just 10 jobs if you stay at a company for 10 years. But if you stay at most 2 years, and only stay at the ones that have a solid chance for success longer, you can at least have a greater chance of success, especially in early-stage companies. Just make sure your company has a business plan and measurable objectives. If your business says it doesn’t need to worry about how to make money yet, unless you 100% believe in the idea and can imagine how it would eventually have revenues, get out, or don’t get in at all. When your company has a clear, measurable business model, you can tell very quickly if it’s going to succeed or fail, not just by the numbers, but by how management handles changes if they fail to hit those numbers.

But, really, who knows… it’s a crapshoot. I’ll continue to gaze like a starry-eyed dreamer at my PersonalCapital.com chart, showing how my $5M dream just may one day be a reality. In the meantime, I’m well on track to hit my target goal of $200k networth this year, which is all cash and investments. On that path, I may never have $5M, but I’m confident by the time I retire I can gather a million or two, as long as the world avoids any sort of apocalyptic nuclear holocausts… at which point, even $5M wouldn’t help anyway.

The Next 10 Years

I’ve been doing a lot of thinking about the next 2 years, up until turning 30, but I haven’t seriously thought out the next 10 years (other than I want to get married, buy a house, and have three kids.) I spent a few minutes thinking through what I really want over the next 10 years, and find it fascinating how I see myself, once having kids, significantly cutting back my work hours to spend time with my family. I still want to work, and possibly even work full time, but I cannot imagine working a job earning six-figures when I have kids. I think I’ll want to work 40 hrs/week max at that point, and ideally consult so I can work from home and spend time with my family.

What makes me nervous is that with this plan I only have $525k in networth by 38, and that’s if everything goes as planned where I can continue saving $50k per year until I have my first kid. This all freaks me out quite a bit, I wish there was a way to get to $500k before I get married and have kids!

 

Age 28. — 2012
$200k networth. Earn $100k+ for the year, save $50k.


Age 29. — 2013
$250k networth. Earn $110k+ for the year. Get married, move into 1br w/ bf.


Age 30. — 2014
$300k networth. Earn $120k+ for the year. Start trying to have my first kid.


Age 31. — 2015
$350k networth. Earn $130k+ for the year. Have my first kid.


Age 32. — 2016
$375k networth. Earn $50k for the year. Take time off to be with kid?


Age 33. — 2017
$400k networth. Earn $50k for the year. Consult.


Age 34. — 2018
$425k networth. Earn $50k for the year. Second kid.


Age 35. — 2019
$450k networth. Earn $50k for the year. Consult.


Age 36. — 2020
$475k networth. Earn $50k for the year. Third kid.


Age 37. — 2021
$500k networth. Earn $50k for the year. Buy a house?

Age 38. — 2022
$525k networth. Earn $50k for the year. Consult.

It’s not about what you know. It’s about WHO you know.

The older I get, the more I realize the old adage “It’s not what you know, it’s who you know” holds true. It’s a requirement to come to terms with how the world isn’t fair and on the spectrum of that unfairness is being born at a time and in a place where the people you know can not help you get ahead, vs being born the royal prince, and everything in between.

Most of us lie somewhere on that “everything in between.” If you have access to Internet and running water, I bet you do. Then there’s always some sort of opportunity in life, but the further you are over to the left, you have to work exponentially harder to get to the same spot those on the right take one step into. You have to make the first chunk of your life about developing those relationships that may are born with. That’s not impossible, but it sure takes a lot of time and effort out of otherwise being productive.

When I moved to Silicon Valley, I didn’t know anyone. At the time, it seemed like a good idea, and I don’t regret it to this day. But it’s certainly been much harder to make those connections. I could easily watch someone waltz into a role like the one I have, and if they had deep connections across the business world through their family, they could easily make a few phone calls and accomplish the work I do in a few months in one day. And for anyone who wants to start a business, having a wealthy family to support you with angel funding is priceless. Having a wealthy family to catch you in case things don’t work out also helps a lot. Continue reading

Happy Holidays from your Favorite Agnostic Jew!

It’s that time of the year again. Wasn’t it just Chanukah / Christmas 2010? I swear I was just writing my “2010 wrap-up” post yesterday. In any case, it’s somehow almost 2012. I’ve made it through another year. So has the world. Huzzah! 

The past year has been one of incredible growth professionally and personally, a few (ok… one) major mistakes, and new doors opening to great opportunities. I really feel like I’m getting older, not just in terms of how long my feet can handle mini stilettos, but also in how I’m relating to the world.

I went to my 10 year reunion in November — I can’t remember if I wrote about that here or not — and saw a bunch of old classmates who hadn’t changed. They were still living in the same town, for better or worse, and I had been away — for 10 years. It was just a little over 10 years ago when I left home and went to the midwest for college, and then packed my bags to move to San Francisco with a barely-paid internship and absolute terror over what the future might hold, and every possible morsel self doubt one could swallow.  Continue reading

I’m turning 28 and craving babies. Yes, I said craving.

Hello biological clock. I hear you loud and clear. Every time a family walks by with a little itty bitty one, you can’t help but smile and get that gooey feeling, like you really ought to be popping one of those out yourself any day now.

Lately, I can much picture myself as a mother much easier than I can envision myself a bride. Apparently, among Millennials, I’m not alone in this notion. We value parenthood more than marriage.

Today’s 18- to 29-year-olds value parenthood far more than marriage, according to a Pew Research Center analysis of attitudinal surveys. A 2010 Pew Research survey found that 52% of Millennials say being a good parent is “one of the most important things” in life. Just 30% say the same about having a successful marriage — meaning there is a 22-percentage-point gap in the way Millennials value parenthood over marriage.

What scares me is another report by Pew that finds the average age for U.S. mothers who had their first baby in 20062 was 25, a year older than the average first-time mother in 1990. Among all women who had a baby in 2006, the average age is 27, up from 26 in 1990. The prime child-bearing years remain 20-34 — three-quarters of mothers of newborns are in this age range.

I feel so far behind, even though I wasn’t ready to have kids until now, and really, a lot can be said about how I’m not ready now either. Now doesn’t mean this second anyway — it means in the next few years. Continue reading