The slavery ends now.

Many of my TMMO and other online friends know I've been piling up cash for storm clouds on the horizon...making sure my medical bills are paid, and the distressing budget cuts in our state giving me flashbacks to my last layoff due to budget cuts.

Well, I'm betting my last couple of months of treatment bills will be paid--Humana auto-denied them of course, but I will call and nag them into submission. This is our routine. All told, breast cancer surgery, chemo, radiation, and specialist visits retail-billed at over $523k (through the end of February, when treatment ended--have followup visits ahead). Of that, I paid $120. Oh yeah, and my outrageous medical insurance premium of $26 per month. (Drugs, headscarves, cancer cookbooks cost a little extra.) Yikes, I spend more on my part of the dental and vision bills! Anyway, Humana's auto-denial is no HMO referral on file...which is bogus because I called around about this in January (before treatment) to make sure there was a referral needed and on file, and my oncologist's office was supposed to do it, and they called me back saying Humana wouldn't accept a referral because none was needed. Arrrrgh. This is the crazy hall of mirrors one enters into when dealing with inHumana.

(UPDATE 3/17/08: before I had a chance to nag, Humana had paid these bills plus a few others that had come in. Total retail-billed value $528k+ of which I paid $130. My cancer bills are paid to date! Woo hoo!)

Last week, on KET's Comment on Kentucky, it sounds like there's some political brokering going on that confirms my suspicion about Guvnah Beshear (D) and his cutbacks--it was a political ploy to gin up support for casino gambling (which he wants to pass). He's playing hardball. The hardball is snowballing--water and sewer project monies is being denied to areas represented by state senators/representatives who oppose casino gambling. Ya gotta pay to play. Dance with the one who brung ya. Supporters of casino gambling are getting their requested project money--a veritable pig roast of pork. (Sort of accidentally disproving the claim that there's a state budget crisis.) So I don't think things are going to be as bad as initially feared. Ah well, I will survive. In fact, kicking cancer's ass was a much bigger project so worrying about anything else seems like sweating the small stuff.

That steaming hot pile o' cash is like Linus' blanket, a great comfort. Maybe I mentally needed it through much rougher moments...like having perfect control over my budget, spending, and savings gave my mind something to lock onto while something out-of-control and scary was happening to me.

But treatment is done and I am healing well. My skin is almost back to normal, not quite intact white, but most of the pink/red/hot/crispy is gone. My hair is growing back, and I can ditch the headscarves as soon as the weather is comfortably warm. I'm checking the forecasts for the end of snow/freezing temps to check when I can get my boat out of winter storage and start sculling again. I am raising a fist of defiance against cancer! You can sideline me for a little while but you cannot keep me down!

So, I have been mulling over in my mind, what about that steaming hot pile o' cash? Versus the last remaining debt, a $6k+ student loan?

Hmmm...the math nerd in me crunched spreadsheet numbers...liquidity of savings vs. a paid off student loan doesn't pay the bills if I'm laid off...3.5% interest rate is cheap money...for a while my savings account was earning more than that, but thanks Ben Bernanke for dropping the interest rates and penalizing us savers!!!

Student loans can be deferred in hardship (the layoff fear), disability (developing endstage cancer), and discharged with death. So was I going to be a math nerd and hope that I beat the system by disability or death? What an odd way to hope to Stick It To The Man!

Because this has been a year of defiant hope. I have invested my mind and spirit 100% into surviving and thriving. Live Strong! (Go Lance!)

Why would I chip away at my mental, emotional, and spiritual strength by keeping that student loan in the hopes of not having to pay it off because of disability or death?

Morbid.

I vote hope!!!

I was playing with my monthly cash flow plans (er, some call them budgets) to see what kind of beefy payments I could wiggle in there for the rest of the year. But then it just seemed so silly. Why not just pull the trigger?

I had already scheduled a $150 payment for Tuesday 3/18--because my loan is automatically in deferment against my will because of taking 6 hours of grad classes this semester. I thought, I'll make a payment anyway, in fact, more than the standard payment, because I can. Let's hit a lick at a snake.

But today, after celebrating the triumphal entry of King Jesus into Jerusalem (Palm Sunday), I was feeling that drama of victory and pain, hope and suffering, faith and fear...it all just came to a head for me.

I'm pulling the trigger. The slavery ends now.

So I JUST NOW logged back in to the student loan website and looked up my payoff amount, subtracted the $150 payment to happen 3/18, and scheduled another payment for the remainder on 3/19 (because it wouldn't allow me to schedule two payments on the same day). I logged into my bank website and transferred enough from savings to checking to cover it, and that transfer happens tomorrow so I know there will be no mix-up.

IIRC March 19 is usually the Feast of St. Joseph, the foster father of Our Lord. The strength, the responsibility, the provision, the righteousness, the obedience--it is a very fitting feast day for this to happen. St. Joseph has been very good to me--as St. Teresa of Avila said, "Go to Joseph!" (Quoting the OT and applying it to our devotion to the NT Joseph!)

This year March 19 is the Wednesday of Holy Week, so Joe's feast day was transferred to yesterday, Saturday, March 15--a grey rainy day here, and a quiet day for me, in remembrance of my mother, who passed away on that date in 1992, from metastasized breast cancer. May she rest in peace. She was a great lady and a strong woman herself, and thinking about her yesterday probably gave me the courage to pounce!

I was really happy Friday, because it was payday, and with Holy Week, there's lots of donation checks to write, and I was feeling extra generous for Easter, so made donations to other places too, including Habitat for Humanity and the Susan Komen Foundation and the Marians of the Immaculate Conception, who promote the beloved Divine Mercy devotions. I had mailed out my Easter and Divine Mercy cards, and everything felt right in the world.

So, today was the day. And I will monitor the accounts online and make sure everything goes through correctly. Then, in readiness to celebrate the Easter Triduum, I will be debt free, TOTALLY, for the first time in 20 years. Never again!

Twenty years of debt slavery is enough.

I am feeling great, a medical and financial resurrection to celebrate along with the Lord's Resurrection on Easter.

Free at last!
Free at last!
Thank God almighty!
I'm debt free at last!

The first mill is the hardest

Wasn't that a song done by Sheryl Crow and Kid Rock?

OK, the post title takes the negative side of the coin...the other side of this coin is that each subsequent mill gets easier and easier. Wheeeeeee!!!

I had seen all kinds of charts about accumulating investments demonstrating what Einstein called the eighth wonder of the world--compound interest. Yeah, capital accumulation in equities isn't the same as compound interest really, it's not like a straight-line savings account. So these charts don't really communicate the bumpy ride.

But man, get a load of this. Another blogpost quote follows:

Look at this data from a July 2007 article published by The Motley Fool entitled, Your First Million Is the Toughest, which illustrates how quickly you can obtain a million dollars:

Go From $0 to $1 Million Monthly Contribution	8% Return	9% Return	10% Return	11% Return
$100	52.9 years	48.3 years	44.5 years	41.4 years
$250	41.6	38.3	35.5	33.1
$500	33.4	30.9	28.8	27.
$1,000	25.5	23.9	22.4	21.2
$1,291.66	22.8	21.4	20.2	19.1

$1 Million to $2 Million Monthly Contribution	8% Return	9% Return	10% Return	11% Return
$100	8.6 years	7.7 years	6.9 years	6.3 years
$250	8.5	7.5	6.8	6.2
$500	8.2	7.4	6.7	6.1
$1,000	7.8	7.1	6.4	5.9
$1,291.66	7.6	6.9	6.3	5.7

$2 Million to $3 Million Monthly Contribution	8% Return	9% Return	10% Return	11% Return
$100	5.1 years	4.5 years	4.1 years	3.7 years
$250	5.0	4.5	4.0	3.7
$500	4.9	4.4	4.0	3.6
$1,000	4.8	4.3	3.9	3.5
$1,291.66	4.7	4.2	3.8	3.5

End blogpost quote.

I was wondering where the $1,291.66 figure came from, and it's the maximum 401k/403b contribution you can make--$15,500 per year currently.

But look at that chart--no matter what your contribution level, small or maxed out, no matter what your average annual rate of return on your investments, the second mill is a lot easier and faster than the first...and the third mill even moreso.

A lot of folks will look at their retirement statements at the humble balances, and think, what they hey, that's not much, might as well cash it out while I'm switching jobs...but NO!!! The future value of that humble balance is huge. The steep upward curve comes at the end. You have to leave it alone!!! The younger you are, the more important it is to leave it alone. Time is your greatest friend.

I found the original blogpost "Your First Million Dollars" at Ryan Taylor's Millionaire Money Habits (and he stole the chart from the Motley Fool)--referred by Free Money Finance's March Madness blogpost competition. The title is weird because it's really about the second and third million dollars. Still, his comments are emphasizing making the commitment and sacrifices now to maximize your contribution and investment return. (I'm not that hardcore...I like to have a little bit of lifestyle along the way, I'm not a radical-frugal eater of recycled grass clippings.)

OK, Undercover Millionaires (in the making)...let this information motivate you!

• Save some emergency funds so you never have to raid your investments in a crisis (Dave Ramsey says $1k to start then 3-6 months of expenses after consumer debt paid off; Crown Financial Ministries says 1 month of expenses while clearing credit card debt, 3 months while clearing other consumer debt; Suze Orman says 8 months of expenses, Ric Edelman says 12 months of expenses--so pick your target and go for it).
• Reduce/eliminate consumer debt. Hate debt. Swear it off. Attack it. Kill it.
  
• Maximize employer-based retirement plan contributions and Roth IRAs and go all equities...keep pushing yourself to increase your contributions if you aren't at the max yet, let your budget and lifestyle adjust, nudge yourself again. Automate everything so you don't have to think about it, you don't end up Paying Everyone Else First, and shortchanging yourself.
  
• Start young. EMILY: Early Money Is Like Yeast: It Makes the Dough Rise! Never stop, never cash out, never borrow against it. Every paycheck is a twig and you are the bird coming to pick it up to build your nest. Don't chip away at your growing nest. You gotta build the nest to end up with the Golden Egg.

Study the chart. Love the chart. Breathe it in. Incorporate it into your reality.

Now think to yourself, I am an Undercover (Multi) Millionaire (in the making), and smile. Yeah baby!!!

ETA: The chart didn't copy-paste nicely...click through to Ryan Taylor's Millionaire Money Habits to read his original post, which is worthwhile reading, and to see the chart intact.

Dave Ramsey Live Event

I attended the Dave Ramsey Total Money Makeover Live Event in Lexington, KY, last Friday night. I had attended one before, back in maybe 2001? in southern Indiana in the greater Louisville metro area. That was a life-changing event for me; getting ready for the event, I put together my debt numbers and woke up! I had compartmentalized my debts and none of them seemed too bad by themselves, and I was never late with a payment or in any sort of trouble with my creditors. A little credit card debt, a little student loan debt, a little car loan debt. But all together, SHOCK, it was over $27k!

The Live Event is very motivating. Dave is a great teacher, and uses props and humor and storytelling and Bible teaching...as well as information and stats and facts and figures. He puts it all together to sell you to adopt certain prosperity-building ideas, and put these ideas into your reality, deep into your bones:

Debt is bad! It is risky!
You NEED savings!
You can get your life under control to eliminate debt and start saving and investing and END UP WEALTHY.
Giving sets you free from a clutching, Scroogelike miserliness and misery...and it's good karma.

Back in 2001?, I bought the FPU kit (a binder with cassette tapes) and there was no class available in my area, so I worked through it myself. I already knew a lot of the information, but he was great at the motivational, educational aspects of it: how marketers and lenders suck us dry, how to resist them, how to negotiate for big bargains, and so many topics.

I didn't work through the debt elimination with "gazelle intensity"--my gazelle moseyed--but I worked hard to pay off my car early and took even more time to slog through the CC debt. I finally became CC debt free after 20 years of carrying a balance! 20 years of debt slavery is enough, don't you think?

During my gazelle-moseying time, I got back into rowing and it was very important for my health and strength--totally worth it. But it took a few thousand dollars of resources to buy a rowing machine, a boat with related accessories, etc. And then I became a rowing referee! That took some start-up expenses too. I saved up the money to do these things--no new debt! Yes, those resources could have been allocated to debt elimination instead, but as life has unfolded, I believe God got me back into rowing just in the perfect moment and timing to be strong and fit for some serious health challenges, and that includes mentally tough!

So I went to this Live Event as a "booster shot," to get the message deeper into my bones. It was just about like the first time, but worth doing again!

Since I had been laid up and bored for several months this last year, I rejoined the Dave Ramsey My Total Money Makeover discussion boards, a subscription site. The quality of that community and its participants is excellent if you're working the program. Accountability city! Great sounding board. Life's getting busy again so I discontinued the subscription until the slow months next winter. Fun place to hang out. Motivating!

What does Dave Ramsey do well? The basics of getting it together, with the education and motivation to give you the wisdom and burning desire. You see how everything fits together. A lot of other personal finance/investing gurus start at a lot higher level than most people are functioning. DR also helps distressed people really well.

Lots of his stuff is available free...use the website, free podcast/internet access to the radio show, etc. Give it a chance because he'll seem crazy at first--his message is so different than the Normal message. Let it sink in and see if it starts helping you. See if listening to the show educates you on some things and helps prevent you from making stupid mistakes.

Check your local library to see if you can check out any of his books/resources for free.

Then, if you are wanting to learn more...to really be set on fire...to shave your head and drink the KoolAid, check the Live Event schedule to see if you can make it to any of his events. Follow through and sign up for FPU (Financial Peace University) to get the more thorough education on all the personal finance subjects. (If a FPU class isn't available in your area, it's available online, or just buy the kit and work through it yourself, like I did.)

This stuff is life-changing and positive and a great thing for an Undercover Millionaire (in the making) to be involved in.

Stuff I bought at the Live Event--because there's serious discounts at the shopping tables, and no shipping costs:
A new FPU kit--the new edition just came out. I negotiated--already had a kit, was asking if it were possible just to buy the binder filler and new audio CDs. (They don't even use a binder any more!) So, they were saying call our office on Monday...then they said, we'll sell you the whole new kit for $50 (instead of the the event price of $99, retail $129).
A few replacement fillers for the cash envelope system wallet, $5 each.
The only other thing I didn't already have: High Performance Achievement CD, $10.
(I don't have the kiddie things, but I don't have kids so there's not a need for it.)

I had a great time--showed up early to get a good seat, talked with the other people around me, hooted and hollered and clapped...enjoyed the show very much.

I'd encourage you to attend a Live Event and do FPU and listen to the radio show...it's a good foundation of security for building prosperity...as Undercover Millionaires (in the making) are all doing!

Shopping strategy

Here's a creative strategy for shopping with some self-control. Yeah, everyone knows, make a list, never shop hungry, yada yada yada. But sometimes it's hard to exert self-control in the grocery store much less Wally World and Tar-jhay (that big French boutique with the bullseye on it).

Menu and stuff planning. What do I truly need within the next week or two?
List ready. Sale ads and coupons checked.

In the store: it's the iPod that is important. This is a race! Shop as fast as you can. Know this: the marketers know that the more time you spend in a store, the more money you spend in the store! So shop FAST (but be careful not to run into other people with your cart).

Know how the aisles are laid out in your regular local stores. Don't look at shelves when walking to the next thing--look at faces, signs, up, get your eyes away from the stuff!

You know that if you overspend in your routine shopping, you are chipping away at the resources available for saving and investing. Giving in to impulses is not the way to become an Undercover Millionaire.

So load up the iPod with podcasts of your favorite financial shows (Dave Ramsey Show, APM Marketplace Money, Clark Howard, Ric Edelman Show, etc., whatever you like) and connect your shopping habits to the ultimate prosperity coming to you.

Zippy music helps, being energetic and keeping up the race pace. Dance club music also puts into my mind ideas about my diet and being active...and avoiding snack/junk foods.

But I also thought about combining the two--prosperity music with zip. What songs remind me of wealthbuilding and prosperity? (Because there's no songs I can think of that celebrate frugality, LOL!)

Here's what I brainstormed:
1. Big Time / Peter Gabriel
2. Rich Girl / Gwen Stefani and Eve
3. Happy Days are Here Again (1930s)
4. We're In The Money (1930s)

On a side note: Actually, a colleague wants to borrow Happy Days Are Here Again for when her youngest daughter (currently a senior in high school) is backing the car out of the driveway to go off to college this August. She and her husband will pop the cork on the champagne bottle and play Happy Days Are Here Again on the boombox before her daughter has even shifted into drive! They are very eager for the empty nest.

I haven't tried shopping with my special "Getting Rich" playlist yet.

I'm interested in any other songs that are optimistic and prosperity minded, that you can think of, for this special playlist.

During the rowing season, if I shop after rowing, I am high on endorphins and feeling good, and am wearing skimpy exercise clothes, so I'm very body-conscious when shopping. That helps me stick to healthy, fresh foods (the outer ring of the grocery store) and to avoid snack/junk foods. It would be embarrassing to be that skimpily dressed and buying high-calorie junk food at the same time!

"Living Paycheck to Paycheck"

This expression puzzles me. People say it like it's a bad thing...living paycheck to paycheck. Yeah, I also live breath to breath, meal to meal, etc.

Our goal as Undercover Millionaires (in the making) is to accumulate capital so that one day a paycheck won't be necessary. The income generated from the pile of assets is equal to or greater than the paycheck, and covers at least the necessary expenses of life, and more if possible!

Hmmmm...accumulating capital...aaack, I'm a Capitalist Pig! Cool!

Actually, most working people in the first world are Capitalist Pigs. Because their retirement plan is invested! So no proud commie fists in the air. (Posers! Hypocrites!)

So, how does living paycheck to paycheck enable you to become a Capitalist Pig and Undercover Millionaire (in the making)?

First of all--by living below your means. Planning your spending and saving before you get the money in your hot little hands. (For some people, living within their means would be a great start...because they're spending way more than they make!)

Second of all--by saving and investing that amount that you didn't spend. In fact, prioritize this. Ah, the classic "Pay Yourself First" principle.

Corollaries:

Reduce and eliminate existing consumer debt. Interest payments are eating you alive. Rather feels like swimming upstream in mud, huh?

Swear off new debt...like an alcoholic swears off booze...One Day At A Time. "Today I will not debt." Keep your abstinence--maintain your sobriety! (Regarding debting! Although sobriety and chastity can keep you from experiencing very expensive problems...heh heh heh)

OK I could branch off into a million different directions here...so many concepts and practices actually hang together....

But the Prosperity Fairy hereby grants you permission to Live Paycheck to Paycheck, as long as you live on a budget and Pay Yourself First....so that one day in the future, you can Pay Yourself Forever and don't need anyone else to pay you.

Let's say it loud and proud with a big smile on our faces, all together now!

"I Live Paycheck to Paycheck, and I'm Proud!"

Welcome to the Undercover Millionaire!

Why this blog? One of my interests is personal finance...and I have been enjoying PF blogs and commenting elsewhere...I figured I would start a blog because my thought process runs longer than the combox. So I shall post occasional essays and reflections here.

What does "Undercover Millionaire" mean? Cue the spy music! (I have a specific theme in mind...not the Hawaii Five-O theme but similar...Mission Impossible perhaps?)

Does it mean I am a millionaire? Not yet. For now, mentally add (in the making) at the end of the name of this blog.

Undercover? This will become apparent to anyone who has read Thomas Stanley's The Millionaire Next Door. I am the frugal teacher type of millionaire (in the making) next door. Living humbly, eschewing ostentation, living below my means, and investing the difference...this plan is working a lot better for me than living beyond my means, buying too much on credit to have nice things to impress other people whom I don't really care about anyway.

Ordinary people can do well for themselves. In fact, it's becoming so common, that by the time I qualify to quit using the (in the making) extension, um, it will be a big yawn. No BFHD. Because a lot of people are boarding the prosperity train.

Well, that's awesome! The more the merrier.