The 7 Ways We Paid Ourselves $56.30 Per Day
How much will you pay yourself this year?
Before I launch into the seven ways how I should issue two disclaimers:
First, it can all be boiled down to one way, which is to just do it. However you pay yourself or “yourselves,” or as I like to refer to it, “ourselves” since it also includes my wife, you simply need to do like the Nike ad says — Just Do It.
My second disclaimer is that I actually exceeded the amount that I had set out to pay ourselves one year ago when I Paid Ourselves $44 per day. For several years, I had wanted to pay ourselves a Grant Per Day like the blogger Grant Sabatier strived for prior to hitting it big and investing up to twenty times or more that amount per day.
Although I cannot possibly claim to have achieved all of my personal and financial goals for the year, I did Pay Ourselves First an amount that I am fairly content with considering our family’s middle-class income and continued expenses including one month that cost us over twenty grand and several others that were not too far behind.
The following are the seven ways that I achieved what amounted to paying ourselves $56.30 per day this year.
1. I Paid Myself $14,500
I started the year, as I will the coming year, by fully funding my Roth IRA the easy way. That is, after years of initiating payments every other Friday on payday before tending to my family’s mountain of bills, I finally automated my IRA investment.
On the fifth and twentieth of the first seven months of the year, whatever day of the week it fell upon and wherever it was within our bill-paying cycle, five hundred bucks flew out of our checking account and into my retirement account.
By the time July 20th rolled around, I received the congratulatory message from T. Rowe Price, which does serve as positive reinforcement for me, that I fully funded my IRA for the year.
After that, I was able to turn my attention to my new Fundrise account, which I seeded with some lazy money earlier this year, sent a few hundred here and a few hundred there while automatically contributing to my IRA in the first half of the year. After that, I began investing $1,000 per month for a total of $7,000 in “new money” invested into it this year on top of the initial $5,000.
Feeling very odd about not paying myself at all over a few paydays once I began sending $1,000 per month to Fundrise, I contributed an additional $500 into my Dividend Growth account in December.
2. I Paid My Wife $6,050
As what some would refer to as the Family CFO, I opened my wife’s one and only investment account and have funded every dollar of it.
Although she would gladly grant me some additional control over it as a custodian, neither of us has taken any measures to do so beyond having called Vanguard, who mailed us the form to do it, and then a few follow-up reminders.
Thus, because it is in her name and I opened the account several years ago, I still mail paper checks in the amount of $500 every month through snail mail. I sent a few extra bucks after we received a stimulus check.
Grand total six thousand plus an extra fifty.
3. I Invest When Markets Are Up
As the markets continue escalating, even as millions are unemployed, I continue investing. I am thankful for having remained gainfully employed through thick and thin, ups and downs, boom times, and recessions over the past twenty-eight years.
So long as I remain gainfully employed, I will continue investing until that time comes when my wife and I can get by on my pension and other streams of income.
If you invested in equities this year, you likely invested at an all-time high.
That includes investing when the Dow hits an all-time high, as it will again.
It also includes investing when times are not so great, such as…
4. I Invest When Markets Are Down
I saw the value of the investments that I have made on my family’s behalf tank by well over $50,000 in March of 2020.
When it came to my daughter’s primary college account, it made me feel sick to my stomach, and I wanted to stick my head in the sand and not think about it. She is currently attending community college with her eye on some seriously pricey universities, so we will be putting those dollars to work in short order.
When it came to my own investments and my wife’s, I thought, “Great, we can purchase more shares at a thirty percent discount,” much like we purchase our clothes at Kohl’s with a thirty percent off coupon.
This will happen again, my friends and, when it does, it’s time to buy.
Even now that we are both fifty-one, I do not mind it so much when the market corrects a bit, and we can purchase additional shares at a lower price.
That is not only something that I write about but have acted upon on multiple occasions throughout the past years. If anything, I ramp up investing during those down months.
5. I Invest in Blue Chips
When it comes to what I invest in on my wife’s behalf, I kind of turn off my brain, and hers too, I suppose, and put some faith in the plus-or-minus five hundred largest stocks in the U.S. market as compiled by Standard & Poor’s.
I know that there are around 8,000 mutual funds available in the U.S. alone, and people smarter than I can recommend and argue why you should buy this one or that.
I could not think of something cooler to invest in on my wife’s behalf way back in the day, even though I did open another more exciting (and more lucrative) account for her around the same time, so I plunked a thousand bucks or so into the Vanguard S&P 500 Index fund.
As the founder of Vanguard, the late John Bogle, would have advised, I put her investment into the first index fund available to the general public, the Vanguard 500 Index (VFINX). To this day, the fund is one of the best S&P 500 Index funds, and Vanguard investments are among the best and favorite of mutual funds for the do-it-yourself crowd.
Since the amount has grown considerably over the past few years, my wife’s shares have been moved up into the Admiral category rather than Investor shares.
Speaking of blue chips, what could be more so than the Blue Chip Growth Fund, which I have half of my own personal IRA invested in through T. Rowe Price. That particular fund has performed quite well, but I concede that, as they say, past performance is not a guarantee of future results.
It is just that if you think I have any brains at all, some of which helped our middle-class family’s dividends and capital gains exceed $16,000 this past December alone, I am sharing some of the exact investments in which I put my own money where my mouth is.
6. David Bach Made Me Do It
We all have our favorite personal finance gurus.
I have read them all, or at least most of the ones that you have heard of, from Suze Orman to Dave Ramsey to Robert Kiyosaki to Tony Robbins to Grant Cardone and dozens of more obscure ones that you may or may not have heard of.
It was Bach’s book, Start Late, Finish Rich, that really kicked me in the nuts and made me realize that I had allowed myself to fall way behind when it comes to paying myself first.
I would urge any of you who have reached your forties, or perhaps even your late thirties or older and have not yet seriously dedicated yourself to building wealth, to read that book.
It must be six or seven years now that I have Paid Ourselves First come hell or high water, whether we are down to our last few thousand in the bank or feeling a sense of abundance. Whether Obama is President or the Tangerine Troll or Biden or whoever will follow that old codger.
I Paid Ourselves $16,200 last year, $17,000 in 2019, and $16,900 in 2018, so I did exceed those amounts this year in comparison. Finding the amounts for years prior to 2018 would require me to dig through some records, which I will not do, but the amounts were fairly similar.
Of course, were I to follow Bach’s advice to a tee, I would have to more than double the amount that I pay myself first. For those of us who started a bit later, he advises paying yourself for the first two hours of your workday every day.
Now that I earn just over $57 per hour at my day job, that advice translates into over $114 per weekday and $1,100 per paycheck. Suffice it to say that as much as I would love to invest that much and probably should, I fear that other things important to my wife and me would have to go unpaid.
As the primary breadwinner in my middle-class suburban family, it would be very hard to pay for everything, including boring stuff like property taxes and insurance, if I invested that heavily in myself.
7. I Have Not (Fully) Automated Quite Yet
Another inspirational Bach book is The Automatic Millionaire, although he is hardly the only proponent of this.
Many a personal finance guru has advised that the easiest way to invest is automatically. The funds are gone before you see them, and, before long, you adjust and learn to make do with what’s in the bank.
I have not yet fully automated my own investing, although I did build up well over $200,000 combined in my children’s college accounts via this method.
Because I sometimes invest odd amounts, like times when I cash out vacation days or, something particular to these times, receive a stimulus check.
I do not want to simply divide the odd number of $7,000 into equal increments throughout the year. I would like to have my Roth IRA fully funded by the summer of 2022 like I did this year.
I did set up automatic investments of $500 twice per month in my IRA for the first seven months of the year, so barring unforeseen circumstances, I should have fully funded my IRA again by late July.
Automating not only your investments but paying your bills automatically is another thing that those of us who aspire to something higher when it comes to personal finance should embrace.
More on that for a future story.
For now, even though, as my daughter would say, “It’s totally random,” the amount that I have paid ourselves came out to an average of fifty-six dollars and thirty cents per day throughout the three hundred and sixty-five days of this most difficult year.
I plan for that number to remain a minimum of a Grant Per Day when I self-report it once again a year from now, but as they say, “God only knows” what the amount will be.
How much will you pay yourself in 2022?
About the author
I'm a middle-aged, middle-class family man and long-time economic development professional residing in the northwest suburbs of Chicago. Aspiring writer and NFT artist with interest in personal finance, self-improvement, and digital art.