How I got here (money path-part 2)

The first post of this series detailed my net worth, and specified what it was made up of. This one will go into the income that got me here. 

As I mentioned in the previous part, my cop salary is not subject to social security taxes, because I pay into a public pension. While this greatly reduces my projected social security income (if it’s even there?), it also makes tracking my historical income a little more difficult since it wasn’t readily available on the social security administration’s earned income page. 

Luckily I was able to pull my payroll data from old W2s, and where that was missing, I filled the gaps from the income tracking spreadsheet my wife built years ago. All of the stuff you’ll see below is total earned income, before any deductions or taxes, and included income from all sources. 

Speaking of income sources, let’s sum that up right quick. 

Before Army: I joined the Army National Guard soon after 9/11. All of my income before then came from a variety of odd jobs. Mowing lawns, teaching snowboarding, washing dishes, painting houses, fast food, selling stuff door to door, teaching swimming, lifeguarding, and refereeing soccer. Think that covers it.

Army: Despite what you may have heard, the National Guard requires a lot more than one weekend a month, two weeks a year. Especially when you’re in a high tempo specialized unit and the country is at war. The nice thing is they pay you for all of that. Not much, but enough for a college kid to live comfortably. I spent ten years in the Army National Guard, and just under half of that was on active duty for various reasons. I  became a cop while in the National Guard, just after college. Frequently I would go on Army active duty orders for a few months while employed as a cop. Usually the police would stop paying me during these periods, and I’d make less money while working for Uncle Sam.

Cop years:

I started the police academy in late 2007, which ended up being very similar to all of the movies of the same title, except funnier. As I said above, I was still in the Army for the first few years as a cop. I gots moneys from things outside the police department during this time: I worked a little executive protection for a professional sports team, provided some tactical training to rich people, and I got GI bill stipend money while in grad school. All of those extra sources of money didn’t add much; less than $5K total, but it’s baked into my income history below.

Income History:

Total income so far: $1,203,071

Current Net Worth: $997,090.41

Thoughts:

First off, one could deduce from the above total income and current net worth, that I’ve only spent just over $200k since 1990. Shits no. I’ve only been tracking my expenses, investments, and net worth since the middle of 2014. I had been deep in the FI stuff for a couple of years by then, and the free apps weren’t cutting it. My then girlfriend/now wife went full YNAB and also built a detailed wall chart spreadsheet a la Your Money or Your Life. This is a better picture of the money situation since she started that mid-2014:

I’m pretty sure that I spent more than $50k between 1990 and mid 2014. You can also see here that investment gains made up for over a third of my net worth. According to a random calculator on the internet, my ROI since 2014 is something like 9.5%, which is largely because the market has been nuts. As I’ve said before, I don’t expect that to continue forever, and know my net worth is eventually going to take a hit. But it’ll probably eventually go back up or whatever.

You might point out that I made $1.2 million over these past 30 years. Then you might notice I only invested just under $600K, spent about $150k since mid 2014 and then ask where the fuck did that other $450k go? Hell if I know. Hookers and blow? Nah, mostly living expenses, some fun experiences, motorcycles and trucks. I really have no idea. I’ve also been hit in the head a bunch, so there you go. 

Some other interesting thoughts came to mind as I looked at my income history after pulling this all together. I spent over 2 years on active duty with the Army between 2001-2005, a year of which was in Afghanistan. This was some of the most fun I’ve ever had (though often miserable and occasionally terrifying), and I remember coming back stateside with what seemed like a large amount of cash in my savings account. There wasn’t much to spend on in Afghanistan, so I had over $30K sitting there. For a young college kid, this was great! While it felt like a ridiculous amount of money at the time, looking back at what we actually got paid to do, this seems like jack shit for compensation. Please don’t think I’m bitching about lack of pay; if I had to do it all over again, I sure as fuck would. Amazing experience that helped define me as a person. Definitely some very low lows, but more than made up for by the positive stuff. Still, to think we pay our soldiers this amount for a year’s work in a combat zone is kinda nuts. 

I have similar thoughts about my rookie years as a cop. With steady income coming in, I felt like I was rich. But that first year(and many years after) I got shot at, people tried to stab me, and I worked crazy hours. Amazing I did that for such little pay in the beginning, at least relative to what I made further down the line.

I’m stoked that I crossed over the six figure line right at the end of my current working career. It’s weird, as I never picked a job based on pay. I became a cop because I needed a job, and it sounded like more fun than working at starbucks. I joined the Army because it looked like an adventure and 9/11 really pissed me off. I never expected to make as much as I did. I’m grateful to you, taxpayer, for paying me so much to do stuff that was fun at least half of the time. Sure, there was an even measure of misery and pain, but so it goes. 

There you have it. How I ended up with almost a million dollars after working 14 years as a cop, and a decade as a part time soldier. I mostly saved way more than spent, at least after I got serious about it once I found this whole FI thing. Other than that, it was pay off my mortgage and VTSAX and chill. I’m not super intelligent, and wasn’t given any great financial advantages other than being born in the US of A. I definitely made mistakes along the way, but compensated by steadily grinding it out and trusting the math.

Hopefully this series shows other cops and enlisted soldiers that you don’t have to settle for living paycheck to paycheck; financial freedom is possible with some discipline and basic investment knowledge. If I can you do it, you sure as fuck can. 🙂