top of page
  • Writer's pictureNick Heil

Pay Day Friday 7/17/2020

It's payday for me and I'm excited, as always. It's a Friday, I'm getting paid, and it gives me a chance to nerd out and update my spreadsheets and review my financial situation.

As usual, I try to keep everyone updated with what I'm doing paycheck to paycheck. I'm a firm believer in the concept of paying yourself first, so every single paycheck I'm making some sort of investment contribution and purchasing assets to help secure a better future for myself and my family.

Please note that this blog series of updating you what I'm doing from paycheck to paycheck is meant to be really quick informative blogs and are not thought out and written over a period of days and weeks. I'm writing this in a few minutes on pay-day. So, I may make mistakes or stupid comments from time to time - don't sue me bro. I also may accidentally leave some information out from time to time for simplicity's sake. For example, every payday I'm not going to explain to you my entire portfolio strategy and composition, as that would simply take too long and defeat the purpose of these quick posts that are meant to develop a story over time. You can review the rest of my blog posts and website to see what I'm doing on a broader and more detailed level.

I share this information for several reasons. First and foremost, it is not to brag or to appear smarter than anyone, because that is certainly not the case. I share this information to document and build upon my progress, I share to be transparent, I share in an effort to help people, I share to build my financial career, and I share to help change the conversations and narrative about money.

Why do money conversations need to be so taboo to so many in this country?

I think a big part of the problem contributing to the wealth gap and poverty in this country is because we don't talk about money and healthy personal finance topics enough!

This blog is my effort to play a small role in changing that.

So, without further a due here is what I'm doing this paycheck.

My gross paycheck this week (I'm paid bi-weekly) is $2,419.00. After taxes and deductions my net take-home pay was $1,766.73. Of that $1,766.73 take home pay I am paying myself in the following fashion:

$230 contribution to my Roth IRA through Vanguard

With my bi-weekly contributions to my Roth I have been purchasing the Vanguard Real Estate ETF (VNQ) until I reached a balance of $3,000. With this contribution I reached that balance and sold the entire position so I could transfer that money into the Vanguard Real Estate Mutual Fund, which is the equivalent mutual fund of the ETF. I'm doing this because the expense ratio's on the two products are the same and by being invested in the mutual fund it makes dollar cost averaging easier over the long-term. Yes I realize I could do the same thing in the ETF by reallocating every now and then, but I don't want to have to think about it, I just want it to be automatic. Currently, you cannot make automatic purchases of ETF's, only with mutual funds and the Vanguard Real Estate Mutual Fund had a minimum starting balance of $3,000 so I just kept buying the ETF until I was ready to go into the mutual fund.

Now that I am into the mutual fund, I will repeat this process a few more times in other Vanguard ETF's and their corresponding mutual funds until I own all the funds that I want to long-term. In the meantime, I will allocate a small portion of the bi-weekly contributions into the real estate mutual fund and use the rest to build ETF positions in other Vanguard products until I can afford the minimum in their equivalent mutual fund products.

$200 purchase of Bitcoin through

This is definitely not a normal purchase for me. I will be the first to admit to you that if you ask me any technical aspects about bitcoin I cannot provide you with a good answer. Let me clear, this is purely a speculative purchase, but let me explain a little further.

I have spent a lot of time listening to podcasts and the opinions of some investors I really respect. Preston Pysh of The Investors Podcast is one of them, to be clear. He and many other investors are very bullish on bitcoin and the opportunity it presents in the future and they are really opening my eyes to the idea of bitcoin as a true investible asset class.

Right now, I think if there is ever a time that bitcoin can be and should be successful it is right now moving into the future. The Federal Reserve and central banks all over the world are printing money at alarming rates never seen before and there is no end in sight. I believe inflation is already here, but our economic systems are not measuring the right things. If you look at the cost of things like education, health care, housing costs, vehicles, and the price of assets then you would argue that inflation is here in a big way already.

Considering this economic environment, this is the exact sort of environment that bitcoin was designed to thrive in. Therefore, I'm taking a bit of a speculative position here to hopefully participate in some of that eventual appreciation if I am right.

Please note that my entire bitcoin position represents a very tiny portion of my portfolio. Less than half a percent of my portfolio, actually. So, I'm not taking a huge risk here. I believe that if bitcoin is going to be successful in the future, then owning small portions of it could potentially be an excellent portfolio diversifier just like golf is to a normal portfolio.

$340 contribution to my Vanguard brokerage accounts.

My normal contribution to my brokerage accounts is $570 every paycheck, however I bought some bitcoin this paycheck, which is not something I normally do so I reduced my brokerage contribution this week. I also increased my normal Roth IRA contribution from $200 to $230 per pay period. The current IRS contribution limit is $6,000 annually, so to max that contribution out I need to contribute $230 from every paycheck to make this happen. 26 paychecks in a year translates to $230 per paycheck to get to $6,000 annually (approximately).

Right now I am just building cash with these contributions. I have been dollar cost averaging into investments all year long to this point, but considering the markets rapid recovery from coronavirus losses I'm in no rush to deploy these contributions into specific investments at the moment. Also, I'm considering a few real estate deals at the moment that I may use some of this cash for as a down payment. So, for right now I'm okay with building my cash position in my brokerage accounts until I'm ready to move forward with something more concrete.

$145.14 contribution to my pension account. This is the same every paycheck for me and honestly I don't have a choice in the matter. Our local ordinance requires that pension contributions be made as long as you are employed, but I still like to keep track of this overtime. If I stay with my current employer 20 years then I would be entitled to a pension of 50% of my highest years of pay. However, if I leave too early then I get all my contributions back interest free, which means I'll need to think about where to invest this money in the future if I do leave prior to being fully vested in my pension.

Also of note, this contribution is made as a deduction to my paycheck, so this is not subtracted out of my net pay of $1,766.73, as it has already been deducted out of my gross pay.


So if you add all that up, this paycheck I contributed $770 to my various investment accounts. That is before my $145.14 pension contribution, so if you count that my total investment contributions would be $915.14.

This translates to a savings rate of $770/$1,766.73 = 43.58% before my pension contribution and a savings rate of 51.79% after my pension contribution.

Of course, when you look at these savings rates this only factors in what I'm doing with my paychecks. I also save/invest money through my self storage business, Boxit-N-Lockit, and my rental property business, MyShack Properties.

Paying yourself feels good. Purchasing assets every single paycheck builds my net worth overtime and gets me one more step closer to a life of total financial freedom. There is power and confidence in that feeling.

What are you doing or buying this week to build financial freedom for yourself? Tell me in the comments below!

You can connect with me further anywhere below:

*Disclaimer - I am not a financial advisor or professional tax advisor. My opinions are my own and none of this should be construed as investment advice. If you invest your money in any type of asset you can lose money.



bottom of page