Folks, today we have a very special guest post from ARB. He is taking the blogging microphone today as I am enjoying some R & R on the beaches of Florida with my friend Billy. I highly recommend you check out his site and subscribe to his new posts, discovering the challenges and life of a retail banker from his perspective. It is a blast to read his articles (especially the rants), I can really appreciate his sense of humor and writing style. ARB will be sharing his PF journey with us today. Enjoy!
Raargh!!! I am ARB, the Angry Retail Banker!
Over on my blog, I offer An Insider’s Take On Retail Banking. Translated into non-slogan, that means that I offer insights on how best to manage your bank account (and the money in them), as well as tell my experiences working in retail banking and dealing with the customers.
For example, I recently spoke about where the best place to order checks is. Sometime before that, I detailed my encounter a very nasty customer who is probably only alive today because I would never survive prison.
I speak a lot about the horrors of retail banking and the perils of customer service. As you can see, it makes me angry. But it’s not just my specific job that does it to me.
It’s the very concept of work.
I don’t live in Westoros, but winter is still coming. And the last thing that I want to do today, this month, or for the next 35+ years of my life is stand outside in the freezing cold waiting for a bus to shuttle me (and a bunch of other human cattle) off to deal with unruly customers and unpleasant meetings about new rules and sales quotas. Or to be a modern day slave like Boot, forced to wash his boss’s car and pick up his dry cleaning with a smile on his face, lest his almighty employer take away his one source of income and only means of providing for himself.
I don’t like the idea of spending my life in the figurative salt mines for peanuts, barely covering my expenses and keeping my head above water while employers and landlords reap the rewards of my labor.
So I’ve decided to leave this path that we all find ourselves on and take a different journey. A journey away from the darkness of wage slavery towards the light of financial freedom.
And I’m going to hijack Bryan’s blog as a platform to do so. What’s his, I’ve declared mine. Don’t tell him.
[Photo courtesy of angryretailbanker.com]
What Is Financial Freedom?
Is financial freedom something I have to define here? Probably not, but I’ll do it anyway in case a newcomer pops in and accuses me of not being inclusive (work in retail and you’ll hear nonsensical complaints about everything).
There are many interpretations of financial freedom and many more on when someone has achieved it or not. But it is generally described as having enough passive income that you can cover all your expenses without working for an employer.
Wikipedia describes it thusly:
Financial independence is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that is greater than their expenses. For example, a person’s quarterly expenses may total $4000. They receive dividends from stocks they have previously purchased totaling $5,000 quarterly, while also having more money in other assets. Under these circumstances, a person is financially independent.
Having money come in from your assets? We call that “passive income”.
Active Income Vs Passive Income
I’m sure all the personal finance veterans on here know the difference, but this is my guest post so I can talk about whatever I want. Nyah nyah.
Anyway, active income is defined as trading your time for dollars on a 1:1 ratio, in a sense. You get paid one time for the work that you do. You want to get paid again? You’ve got to work more.
Your day job is the ur-example of active income. You work forty hours and your employer cuts you a paycheck for that time. Then you do it again. And again. And again. You stop working? You stop getting paid.
Active income sucks. Only “entrepreneurial” masochists defend active income. Should they try to convince you that active income does not suck, report them to the nearest reputable personal finance blogger immediately. They are considered armed and dangerous.
Their weapon of choice is the Protestant Work Ethic
[Photo courtesy of Grant Wood and Wikipedia]
Passive income is defined as income that is worked for one time, after which the money continues to come in without your involvement.
Dividend income from stock investing is a perfect example. You purchase the stock, and it continues to pay you a dividend for as long as you own it. What do you have to do past that in order to receive the dividends? Nothing!
Blogs such as Angry Retail Banker and Just One More Year are also passive income in action. Is it hard work? Oh yeah. But once an article is written, it will be there on the Internet forever. As people click on ads and buy products through affiliate links, the blog owner makes money from the article. Once the article is written and posted, the blog owner technically doesn’t have to do anything going forward to receive a permanent stream of income from it.
Bryan talks about how important it is to create a passive income stream and I am not going to repeat it all here (tl;dr: “very”). But it is the secret to escaping the world of work and reclaiming your freedom.
And it is in the last couple of years that I have been traveling down this road.
My Journey To Financial Freedom
It’s only been a couple years since I started on my FIRE journey.
For most years, I was a teller. Customers were crazy. People would sooner see me unemployed and living on the street than to show ID at the bank for a withdrawal. Yes, you have to show ID when you withdraw money. What moron (and if you argue that it shouldn’t be the case, you are objectively a moron) would think that you wouldn’t?
For many years, I thought this was the only path. I accepted the story that we hear from mainstream society every day. You know the story. You don’t just hear it every day, you live it.
Get up early and go to work. You must work at least 40 hours a week if you want to make it a decent living. Make your customers happy, make your sales. Perform well and you could get a raise, maybe even a promotion. Live the brand at all times (remember, even outside of work, you are a representative of XYZ Corporation). Remember to buy fancy things. Go into debt for them. Never let the neighbors have a fancier house or nicer car than you do. Finally retire a few years shy of the age of 70.
My dad always used to make a joke when I would tell him about a horrible day I had at work, “Don’t worry, ARB. You’ve only got another forty years until you retire.”
I passively accepted that as the reality of our cruel world like everyone else, but something always struck me as off on that. Is that really the best we as a people can come up with? According to a 2013 Gallup survey, 70% of Americans don’t like their jobs. 70% of people show up to places that they’d kill a hobo with their bare hands if it meant avoiding the place, and the best we could all do as a people is shrug our shoulders and Oh Well the whole thing?
America, I am disappointed in you.
[Photo courtesy of publicdomainpictures.net]
I became disillusioned with the American way the more and more I worked. This went on for years. But I remember about two years ago when I had my “a-ha” moment.
The straw that broke the camel’s back
It was at my current bank and I was still relatively new to the platform at the time. Not so new that I didn’t know what I was doing, but new enough to still make some pretty big mistakes or allow tough customers to rattle me and take control of the conversation.
I had opened a business account for a man who operated a laundromat. Cool, I need business accounts if I want to make my ridiculous sales goals.
Two days later, I’m called into my assistant manager’s office. She can’t figure out for the life of her why I would open this account.
I thought I had taken all the business paperwork (I had the list of documents shown to me once or twice, but I never trained on how to quickly read them and pick out what needed to be picked out). It turns out I needed proof of address for the business as well, despite the fact that the address was on all the formation documents. This was new to me and was never an issue before, but somehow I was supposed to divine this requirement based on the situation.
Also, the business was out of state. Which means my manager or assistant manager would have to do a site visit to another state. Why couldn’t we just have another branch in that area do it for us? We do site visits for other branches all the time. No clue.
If you’re wondering, he opened the account in our branch because he lives in the neighborhood. The business was registered in the other state because it is located in the other state.
Also, she asked me if I had verified the business on Google Maps. No, I had not.
When we open up business accounts, we verify its location using Google Street View. God, I hate that. We’re supposed to do it when the customer is in front of us too. Now, what we do when what we see doesn’t mesh with what you’re telling us depends on the situation, but it’s a very unpleasant conversation when your manager tells you to tell a customer that we can’t open the account because he doesn’t have a visible sign on his business.
Well, there was a laundromat, but the sign was for a different business. Of course. Why the hell not?
And then—yeah, there’s more—she asked me why I didn’t ask a supervisor before opening an account for a laundromat.
Why does that even matter, you ask? Because they are a coin-intensive business, which can be very burdensome to a bank. I’ve seen vending machine operators with bags of hundreds of dollars of rolled coin that we would have to ship out. It’s quite a huge pain.
But I didn’t know that it required management approval. Nobody told me that. Again, I was supposed to divine it.
So I was tasked on getting this guy into the branch with proof of address for his business. After having a whole debate with me over the phone over why he needed to bring in proof of address and what counted as proof of address and how no other bank needed proof of address and all that other crap, he said he could produce the lease, which was recent and had the name of the business, the address, and the date it was signed and notarized.
He brought it in the next morning. That same afternoon, I had to call him back to tell him that the bank doesn’t accept leases as proof of address. Why? I have no idea.
I had off the next day. I had been told that if the assistant manager was unable to get the information from the customer, she’d have to bump it to the branch manager who would have to have a sit down with me when I got back.
The exact moment something inside me clicked was when, during that day off, I was walking to the gym. The Angry Retail Banker needed some stress relief, as this was very much on my mind. I was running through different scenarios in my head, preparing different answers to whatever questions were going to be thrown at me.
Then I stopped.
What the hell was I doing!?
I was making roughly $30,000/year in one of the most expensive cities in the country. It was my day off from work. And there I was, stressing out about the legitimacy of a laundromat in a town I’d never heard of in another friggin’ state!?
What in the holy goddamn H-E-double golf clubs is up with that!?
That was the moment I said to myself, “I’m not doing this for the rest of my life. I have better things to do.”
And since then?
That was over two years ago. I didn’t quite catch on to the concept of passive income until I started reading My Money Design and I wasn’t convinced of the power of dividend growth investing until I started reading Dividend Mantra. The former taught me what passive income was, the latter showed me the power of dividend growth investing and how it would make the perfect primary source of passive income.
A third website, Great Passive Income Ideas, was instrumental in convincing me to start a blog (that and My Money Design). This page was essentially the place where Angry Retail Banker was conceived, at least in my mind. It was after reading this guide that I decided to go ahead and do it.
I had decided that I didn’t want to do retail banking for that much longer, but the problem was that every job that paid well was a stress-filled nightmare. I looked at what the managers did and I looked at mortgage reps and licensed brokers and I didn’t want to deal with that. I wanted the money, but I didn’t want to work.
Call me a lazy, entitled Millennial, but that’s how I feel now. I want to make money, but I just don’t want to have to do any work.
From that mentality and the discovery of the power of passive income, a goal was formed. I wanted to achieve financial freedom by the age of 35.
And how’s that been working out for you?
Meh. Tough to say. I’m only a little less than two years into my financial journey. I set the bar really high; I just turned 30 this year. I’m pretty much looking to have a truckload of self-sustainable passive income streams delivered straight to my door.
[Photo courtesy of Bryan at justonemoreyear.com]
But I’m not letting myself get discouraged. I figure it’s about time I aimed high for something and saw it through to the end.
But how does one stay motivated throughout the journey to financial freedom? We live in the societal version of a casino, surrounded by flashing lights and little sound effects that entice us to throw our money away. We gamble rather than invest; 53% of Americans purchased a lottery ticket in the past year. We pride stuff over everything else. The opportunity for lifestyle inflation is the reason we get better jobs.
Staying motivated is actually easier than you’d think. At least for me.
Unlike others, I have no interest in owning a fancy car. Or a big house. Or the latest smartphone (I’ll upgrade when I need to). So I have no problem saving money.
What I want instead is to be free of having to deal with annoying, rude, hostile customers. To be free of arbitrary rules that force me into emotional labor, which is more responsible for the high levels of anxiety and depression my generation faces than smartphones and tablets could ever be (sorry, Baby Boomers and up, but technology isn’t isolating us).
So then how do I stay motivated to reach financial freedom at an early age and escape the need to go to work? Easy! By having crappy days at work!
Getting the lowest mystery shop grade in the history of your branch will definitely motivate you to develop those passive income streams, and I’ll definitely tell you that bank mystery shopping is going to make me scream until my voice gives out. That is, if saying my customer’s names over and over and over and over again in order to avoid that failing grade doesn’t drive me to murder. Speaking of things that warrant a 911 call, if you want motivation to leave the world of work, just have a situation where you have to call the police on a customer.
Having a stressful low paying job—and seeing nothing but stressful and/or low paying jobs out there—will certainly motivate you to replace your job income with passive income.
Advice for your journey
Advice!? Now I’m a self-help hotline? I hope everybody’s going to become regular readers of my blog and compete for the title of “ARB’s Biggest Fan” and do your parts to maximize my blogging income. What did I say before about me not being interested in doing any work?
Fine. How’s about this for advice?
All jokes aside, I cannot emphasize this enough. Start early.
Compounding is what makes everything work. Whether we are talking about dividend income and reinvesting them, your website’s exposure causing you to get more readers causing you to get more exposure causing you to get more readers, or using the proceeds of P2P lending to lend out more money to more people, compounding is what makes all your efforts to build passive income something that can replace your day job.
But compounding takes time. It can take a few years for those dividends to build up. It can take a few years to learn how to really market your blog. It can take a few years to learn how to manage properties.
Expect your transition from full reliance on active income to full reliance on passive income to take a decade if you’re lucky (why I’m trying to do it in half as much time is a mystery that still eludes me to this day).
You don’t want your “early retirement” to be when you’re 55. That’s not early retirement. That’s like being scheduled to work until 5:00, getting out at 4:53, and claiming you got out early. No you didn’t.
Bryan’s comment: For someone like myself in his early fifties, I consider retiring at 55 as being early. The new retirement age has become 67 based on the need for most to collect their full Social Security. If we do the quick math and say that, we start working at 22 out of college and work for 45 years, then a 55-year-old escaped 12 years early. Using the 9-5 work schedule that says if you retire at 55, you leave work at 2:31 PM, while Dianne will be leaving work shortly after lunch at 1:29 PM. This “early retirement” is better than the standard 5 PM quitting time to me.
You want to retire in your thirties. And it won’t happen unless you start early.
It doesn’t matter if you become a blogger, an investor, a landlord, or whatever else. Hell, just even doubling your 401k contributions can make a huge deal. Just start early.
If I could change one thing about my fight for financial freedom, it would be that. I would have started earlier than the age of 28. Much earlier.
So that, dear readers of Just One More Year, is the story of my journey towards financial freedom.
Pretty lengthy for one still in its infancy, I know.
I’m hoping that I’m not the only one here on a passive income journey. Most of us are personal finance bloggers and/or enthusiasts who are all realizing that the traditional method of retirement is a crock and that we must walk a different journey. We all got our starts in different ways. Me by stressing over a laundromat located in another state, Bryan by being sold an investment property by his father and finding himself making mortgage payments at the age of 16.
But our efforts—our journeys—all end at the same place.
Thanks, Bryan, for letting me guest post on your blog. And thanks to all his readers for reading this lengthy tome in full. Be sure to subscribe to my blog for an insider’s look at retail banking as well as to watch me go off the deep end for every single negative customer interaction I have. Be sure to follow me on Twitter as well.