Man of The Year 2010

Control your Cash NOT our man of the year

Won't send us a pic? Then you get a police sketch.

Picking a Man of the Year before the year is over is senseless, but that doesn’t stop every media outlet from doing it. At Control Your Cash, we can buck convention while remaining literal. We don’t give an award for Man of The First 11 Months of 2010 and Maybe December of 2009 If Anyone Can Remember Back That Far. Nominations opened on January 1 and closed Friday.

Here’s our winner: Brandon of Indiana. He lives what appears to be an upper-middle class life on a barely middle-class income, and isn’t incurring debt in the process. We devoted 3 posts to him last year, which is even more than we devoted to the stupidity of receiving income tax refunds. Read his captivating and inspiring story, CYC’s first trilogy.

Awarding the prize was a tough decision. The incumbent, Bob from Las Vegas, did nothing to disgrace himself. Nor did runner-up Brandon Jennings, one of the most underpaid players in the NBA but a guy who knows the value of a buck. Brandon of Indiana didn’t accept our interview request, and we didn’t bother trying to reach Jennings, but since he’s a public figure we can at least assemble the workings of his profile.

Young Money tattoo

He's not kidding

Jennings was born in Compton, CA to unmarried parents and never went to college, making him the kind of person whom the media hopes develops a crack habit so they can make an example of and pity him. But Jennings doesn’t need your pity. He’s too busy enjoying self-determination.

In 2006, under pressure from major colleges, the NBA initiated a shortsighted rule that prohibits high school players from immediately jumping to the league. The colleges, after all, provide most of the raw material that the NBA turns into slick entertainment. This rule made sense, because the league was being overrun by underachieving, fundamentally unsound, lazy, immature, obscure players who’d never gone to college and would never win anything or craft any kind of legacy in the pros. You know, losers like Kobe Bryant (Lower Merion HS, Philadelphia, ’96), Kevin Garnett (Farragut Academy, Chicago, ’95), LeBron James (St. Vincent-St. Mary, Akron, ’03), Jermaine O’Neal (I’m getting tired of looking up their high school names), Tracy McGrady (ditto)…you get the idea. Carpenters and auto technicians don’t need to go to college, nor do baseball and hockey players, but it’s the End of the Republic if basketball players don’t. Because Division I college athletic programs are all about enriching students’ minds, and not about exploiting those students for as much revenue as possible while paying them the laughable pittance of room and board.

The NBA rule stipulates that incoming players be at least 19 and a year removed from high school. So Brandon Jennings, like every other high schooler who’d chosen basketball as a profession and spent his teenage years dedicating himself to that goal, was stuck in the position of not being able to find an apprenticeship that paid him as much as possible. Until he found a loophole.

While the rule says you have to be out of high school for a year, it doesn’t say what continent you have to live on. Jennings moved to Italy and played professionally there. He returned to the United States a year later, was drafted by the Milwaukee Bucks, and in a refreshing display of iconoclasm, became the first highly-drafted player in history to skip the nonsense of the draft ceremony itself. No video exists of him sitting in the audience, sweating, waiting for his name to get called, hugging his extended family, putting on a baseball cap and showing fake affection to the NBA commissioner. Instead, he strolled in several picks after the Bucks had drafted him.

The result? First-team all rookie, the youngest player in history to score 50 points in a game, and now, at 21, he’s driving a $26,000 car. It’s that combination of irreverence, excellence, self-determination and frugality that makes us proud to call Brandon Jennings our Control Your Cash Man of the Year runner-up.

**This post is featured in the Carnival of Wealth #20**

**Also feature in the Carnival of Personal Finance #292**

Meet your role model, Part II of III (UPDATED)

Still not the correct pic. One more chance to get it right.

Last week we introduced you to Brandon, the guy who lives a rich and fulfilling life on a $32,000 salary.

Notice we didn’t remark about how well he “stretches a dollar”. Brandon isn’t one of these twits who resharpens disposable razor blades and makes his guitar strings out of dead neighborhood cats. At least, we hope not. Instead, he’s made a few forthright, intelligent decisions about how to spend and invest his money, and is sitting about as prettily as someone in his situation can.

Brandon proves that you don’t have to be born rich to avoid being poor. He buys assets, he sells (or never incurs) liabilities, and he lives better than plenty of people who make 3 times as much.

We originally planned to break Brandon’s story over 2 posts, but his methods are so detailed and his rationales so logical that we’re going to need yet another post. Read this, and sit tight for Thursday:

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I don’t do Goodwill or anything like that, maybe one day. I don’t need pricey work clothes. I do the shoe deal thing when I need shoes. You can find some great deals on shoes if you have a 5-year horizon. (Ed. Note: The man has a 5-year horizon for shoes?) I do have a couple of nice Indochino* suits**.

Last year I maxed my Roth. This year I added the 10% payroll contribution to my public employee retirement account.  I have a long-term care policy that grows by 5% a year that I’m thinking of dropping. I have paid-for whole life insurance, enough to cover all loans, funeral, etc. My grandparents took it out when I was 2.***

The key is to not use credit, and keep an eye on purchases. Self-discipline is sometimes still challenging, until I remember the sinking feeling I used to have. I was determined to never feel that way again.  I suppose I could always get a slightly better paying job, or finish my degree, but I don’t feel like I need anything more and I’m concerned I wouldn’t like my job as much.  I’m content – I travel with family and friends, save lots of my income, have fun hobbies and side jobs that don’t feel like jobs, and even enjoy my main job.  I know when I get married or have kids I’ll be set financially. We might even be able to have one parent stay at home, or fully fund colleges with the second income.  I plan on retiring early, not sure how early though – aiming for 57 if I stay with my current employer, sooner if I can take my future extra income and invest it how I want.

My favorite financial tools are Mint, SmartyPig, and auto-deductions.  It helps to impose a bit of discipline with the auto-deductions, which only takes a nudge, while making it fun and/or easy to do.  I like watching things grow toward my goals at Mint and SmartyPig.  I avoid using my debit card because I have to manually assign categories in Mint (how amusing is that excuse?), so I use my credit card for the cash back. SmartyPig gives a good return on my envelope-style accounts for various funds (property taxes, condo insurance, vacation, house maintenance, cash reserve, etc). I keep $1k in my credit union savings account, $1k-2k in my checking account.  I try to keep my cash reserve around $15k, but it’s down now because I just spent $8400 on HVAC. It won’t be back up until I get rebates in, and my maintenance fund catches up to its virtual 3-year negative. I budget 1% of my home’s purchase price annually for maintenance.

I’m a few years ahead overall, due to a $20k inheritance from my grandfather. $3k went to the cash reserve, $3500 to the HVAC install and the rest to a modest non-retirement investment. Here are my monthly expenses:

Mortgage$481
-Insurance25
-Condo fee100
-Property tax56
Utilities192
Transportation85 (includes maintenance, plates etc. I bike the 4.4 miles to work semi-regularly. Both workplaces are close to each other.)
Car insurance55
Long-term health care insurance117 (Ed. Note: this is in the event you’ll need a nursing home)
Household, including food175
Entertainment, including food110
Medical/Pharmacy/Student Loan58
TOTAL1454

And my monthly savings:

Roth IRA417
PERF 10%267
Vacation208
House maintenance fund85
TOTAL977
GRAND TOTAL2431

(Ed. Note: We didn’t ask Brandon to separate the expenses half of his personal income statement into real expenses and savings. But that he did shows that he comprehends the enormous difference between the two. Again: buy assets, sell liabilities. That starts with putting them in different tables.)

Finally, my income:

Wages, after insurance, cafeteria plan etc.1850
Rent income318
2nd wage income320
TOTAL2488

All those numbers are after-tax. The wage income excludes abnormal overtime/holidays, which usually runs $3-4k pre-tax. My total was $33k last year, $32k the previous year. Nor does that include any tax refund, (Ed. Note: sigh) mortgage interest credit, or interest income.  That adds up to a fairly conservative $4k post-tax, for Christmas charity (we stopped doing gifts) (Ed. Note: yeah!), new stuff, more vacation, extra car/house fund, savings, other investments, dinners/anniversaries/weddings/etc.

I’m honestly wondering what I’m going to do with additional income from teen court or a raise. Paying off my mortgage isn’t a bad return, but it’s not great. My work’s other retirement plans (457s) are horrid for investing in given their expense ratios. I could go into taxable accounts.  I’ll probably donate some, put some towards more exotic trips, or fund my next car.  All else being equal, I might do a mix – it won’t take that much to pay my mortgage off in 10-15 years if I wanted to, and still do the above.

*What’s Indochino?
**What’s a suit?
***Life insurance for a 2-year old? We’d love to know the grandparents’ financial situation.

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Next installment, Brandon’s investments.

**This article is featured in the Carnival of Financial Planning-Edition #157**