Welcome to Money Talks! New approaches to money have exploded. Yet, money remains taboo. Less than half of you share personal finance information with your friends and family.
But that’s all changing. Now more and more of you are talking about money because it leads to better outcomes.
In an effort to provide personal finance insights through transparency (and have a bit of fun), I’ve created a series titled Money Talks that showcases how real people in Charlotte approach money.
It’s an anonymous way for you to share your money experiences and insights with our city. Answers are lightly edited for clarity and privacy (ex, exact age). Want to participate? Take the Money Talks survey.
Here’s a look at the personal finances of a 40 year old entrepreneur.
Living situation:
We own a house. We had a small mortgage, but paid it off in 2018. I know there are lots of opinions about mortgages but my thought was pretty simple — if a financial institution thinks that my mortgage is a great asset to own, then it’s an even better asset for me to buy back from them.
Theoretically, I could have borrowed at 4% and invested to earn 8%, but that’s never quite how it works out. I’d rather have the financial flexibility of not having a mortgage payment.
Children:
I’ve got young kids. The tricky thing about kids and money is finding the balance between teaching them about scarcity and providing abundantly for the family.
We just don’t want money – either in abundance or scarcity – to be an idol or a focus for our children or for us. There are way more important things in life.
Job and salary:
I founded and run a content and consulting business. I’ll make around I’ll make about $2 million this year.
I started my career in a $35K per year job like everyone else. But I launched my first business in my early 20s and made 10x my previous salary during the first full calendar year. It was part luck and part because I’d found a niche.
I did a stint as an executive at a large company making $450K-$650K, but decided to go back out on my own and I’ve made $1M-$1.5M each year since making that decision. This year will be more like $2M, next year probably more like $3M.
Other income:
I don’t have any other material sources of income. I don’t want the distraction. My businesses take up all of my attention. I don’t even watch my investment portfolio – my financial advisor handles it.
Work/life balance:
Great. I work hard from 9-5 on Monday through Friday, travel occasionally, and spend the rest of my time with friends and family.
Net worth:
Around $25M, including my businesses.
Of that, roughly $3 million is liquid.
The main point is diversification of both asset types and taxation. We have money in qualified plans, 529s, life insurance, a brokerage account, and pure cash. Each one of these things has distinct advantages and disadvantages when it comes to return characteristics and taxation.
Debt:
No debt. Debt is a liability for me, an asset for someone else. I’d rather have assets than liabilities.
Credit card:
I use the credit card for my bank, which is 100% lame but I get almost 3% cash back on everything because I meet the balance requirements at the bank. It’s such a good deal that no other credit card really makes sense — at least that’s my conclusion after talking to friends who are pros at the credit card game.
Budgeting:
We don’t. Our spending is maybe 20% of our income, so it doesn’t make sense for the time investment.
Recurring expenses:
We have lots of recurring expenses that bring me things I really value — Spotify, Audible, Bloomberg, WSJ, streaming services, wifi on American, my yard guy, etc. The most annoying recurring expenses are for things that I want to use but rarely have time, such as golf dues. One day I’ll make it up.
What do you consider “rich” in Charlotte and why?
“Rich” in Charlotte has changed a lot over the years. It used to be subtle and understated, now it’s flashy and showy. Something has changed in the culture and it’s now perfectly acceptable for people making $500K to drop $3M on a (small?) house in Eastover. That’s insanity. Those people are not rich — they’re scraping by.
The richest people in Charlotte are the ones who make enough money to buy the house in Foxcroft, send their kids to Country Day, join Charlotte Country Club — and choose not to do it.
What’s your #1 favorite thing to spend money on and why?
House. We bought a 1990s house that had great bones and we’ve gradually added to it, renovated it and refurbished it. The result is well worth the time and investment.
Charlotte money hack:
At the airport, park in Daily rather than Hourly. It’s an extra hundred yards of walking for half the price.
Charlotte restaurant:
Fin and Fino. Everything is great.
How much money to feel complete financial freedom?
Been there for a while. Financial freedom is about spending way less than you earn. Beyond $250K per year or so in income, financial freedom is about spending, not earning.
Savings goal:
We don’t have a savings goal, but we do have a giving goal. We give between 20% and 40% of pre-tax income to our Donor Advised Fund every year. DAFs are such an incredible tool that everyone should have, regardless of your level of giving. It’s a way to give once to your fund and then enjoy disbursing money throughout the year.
Retirement:
I don’t see any reason to retire in the traditional sense, although I could definitely see myself scaling my involvement back at some point.
To quote a friend who retired a few years ago, “When you work, play is play. When you’re retired, play is work.” No thanks. I love what I do — other than spending time with my family, nothing else brings me as much enjoyment.
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