The Compound and Friends - The Benefits of a Regular Paycheck (Tadas with @FerventFinance)

Episode Date: August 20, 2019

“I have something to admit – I enjoy receiving a paycheck twice every month. Some people are willing to give up the sure thing to pursue a passion project, launch their own business, or take a year off to travel the world. While I’m envious of those with such conviction, I just can’t pull the trigger.” Kevin (@ferventfinance) blogs at Fervent Finance and is the co-host of the Reversion to the Mean podcast with Justin Castelli. Tadas got Kevin on the phone Skype to talk about a recent post of his entitled “It’s Okay to Like Your Paycheck.” While the media is focused on Instagram influencers, FIRE advocates and startup CEOs, there is a whole world of people out there doing the do. Kevin talks about how a “regular job” has a host of benefits that go beyond a regular paycheck. 1-click play or subscribe on your favorite podcast app   Subscribe to the mini podcast on iTunes or Spotify   Enable our Alexa skill here - "Alexa, play the Compound show!"   Talk to us about your portfolio or financial plan here: https://ritholtzwealth.com/   Obviously nothing on this channel should be considered as personalized financial advice just for you or a solicitation to buy or sell any securities. Please see this 3,000 word terms & conditions disclaimer: https://thereformedbroker.com/terms-and-conditions/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, Kevin, it's Tadis. Hi, Tadis. Hey, I'm on the line with Kevin, who blogs at Fervent Finances and is the co-host of the Reversion to the Mean podcast with my buddy, Justin Costelli. I asked Kevin on to talk about a recent post of his entitled, It's Okay to Like Your Paycheck. So much of what we see online is the celebration of the extraordinary or the unusual. Posts about people retiring from the workforce at the age of 30, people working remotely from faraway beaches, and maybe most commonly we get stories about entrepreneurs and startup

founders who have had success or have had an IPO. But so I thought Kevin's post was kind of a nice antidote to that, and that's certainly not the experience of most people. So, Kevin, what kind of prompted you to write this post? Yeah, I think being involved in the financial Twitter community can lead some people to develop a little bit of envy when we're talking with CEOs and founders of companies who have taken on risks and as a result have become very successful. And if you take a step back, I think you'll realize that a lot of that is survivorship bias. So you see the successes on Twitter, the people who are succeeding.

If you started a business and failed, it's a lot harder to come out and say, I took this route. It didn't work out for me. I have to go try something else now. So I think it just kind of was a realization for me that this doesn't always, you know, entrepreneurship doesn't always work out for everyone. And it's not all it's, you know, cracked up to be all the time. I know it can, you know, give people some financial freedom, some time freedom, and be able to dive into something they're passionate about. But it's not right for everyone. No, I think that's absolutely right. You said a couple things there that jumped out at me. One is risk and risk tolerance. And so, obviously,

people who have kind of, like you said, achieved a certain level of success have taken on a great deal of risk, implicit and explicit. And the other thing you said, which I thought was important was, you know, I think we've people kind of on Twitter talk about success porn, this idea of kind of the adulation for people who have succeeded. And like you said, you know, they are in a lot of cases, the minority of people who've gone down that path. And, you. And sometimes we can draw conclusions and lessons from their experience, which may not necessarily apply to most people. Yeah. And I actually listened to a podcast the other day from How I Built This, which is one

of my favorite podcasts. And they had on the founders of Boom Chicka Pop, which I think is kind of a kettle popcorn. And the way they were interviewing the founders, the founders of Boom Chicka Pop, which I think is a kind of a kettle popcorn. And the way they were interviewing the founders, the founders basically started the business using credit card debt. And any expansion they had throughout the first two or three years was done through applying for new credit cards and just racking up credit card debt. And from the personal finance side, I understand that they weren't exactly glorifying it, but that's not a way that I would suggest others go about starting a business. Now, they are successful and everything's worked out. And I think they sold the company for $250 million.

So it was extremely successful from a financial viewpoint, but kind of that success point where like, hey, we really scrapped and we took out credit card debt to get this thing, but we worked hard and it worked out. But, you know, there's probably 99 other cases out of 100 where that didn't work out. Yeah, no, that's exactly right. You know, every success story is kind of, you know, oftentimes has these sorts of kind of extraordinary moments where people have to overcome. And that's what makes those stories great. But like you said, those are those lessons aren't necessarily generalizable to the broader population. You know, and so one of, you know, your post isn't particularly long, but there is a lot of good stuff in there. And one of the things that you talk about, you know, you know, as, as we talked about, we've talked about how the success and the attention that people get for kind of achieving these sorts of this a regular job, there is a risk of complacency, like getting,

whether it be complacent with a particular employer or with your career. And I guess, what are some ways or what are some ways to think about trying to make sure that you aren't complacent with where you are at any point in time? Yeah, that's a great point. I think one way people can get complacent in their job is, you know, they have a maybe they have a long commute and they kind of get used to it. Or they're in a certain role that it's not really challenging them anymore. They're finding interesting and they kind of think of that as status quo and they're just going to kind of continue on. But to kind of spice things up with your career, you don't need to quit and go do something else. But to kind of spice things up with your career, you don't need to quit and go do something else. You can go to your manager or your boss and talk about taking on a different role or kind of transitioning some things to a newer staff and taking on something a little different.

Or, hey, can I work from home once a week? I'm able to do all these things from home, and I think it'll save me the commuting time. It'll be better for my personal life, and I won't be distracted at work with everyone stopping by my desk. And just spinning it in a way where it's going to make sense for your employer to allow you to kind of take advantage of some of the benefits that you might not be able to get unless you worked for yourself, but you actually can, in fact, if you negotiate and are in a position to do that, you can actually get that in a kind of more nine to five career, which will enable you to start kind of living that more, that life that you desire throughout your career without becoming complacent.

Yeah, you know, I hate the term side hustle, but it is descriptive of another opportunity for people to kind of expand their reach expand their experiences um and and that's you know doing something on the side whether it be it could be for money but it could also just be for uh the experience and i think that's another way that people can who are working a regular job which has as you mentioned in your post can have a great deal of you know a great deal of both psychological and financial benefits anywhere from a regular paycheck, healthcare, an opportunity to put money into a 401k and all those things. But side hustles in that regard can be another kind of creative outlet that

could potentially turn into something else down the road. For sure. And if you are working in more of a traditional career, you're not bogged down with some of the admin and back office things like trying to collect receivables or having vendors hound you for payment and trying to make sure that you have work next month and things like that. There are benefits to that when you are an entrepreneur and you can grow your business probably exponentially faster than you can in a typical career. But it also comes with some other things that you don't necessarily have to kind of put up with if you're in a traditional career. And like you said, you're going to get that regular paycheck. Most likely, if you're in a full-time role, you're going to have some sort of health insurance benefits or retirement plan, things like that.

role, you're going to have some sort of health insurance benefits or retirement plan, things like that. All these things that can give you peace of mind while you're working that you really don't have to kind of worry about because it's taken care of for you. Yeah. And another good point that you make in the post is that timing is kind of a big factor in all of this. And so, you know, it's not necessarily the case that if you are working a traditional sort of career that there aren't going to be opportunities in the future to do different types of things. And so just because you haven't started a company and had it gone public by 30 doesn't mean that that isn't available to you at some point down the road. That's exactly right. And being involved in the financial Twitter community, I get envious that, you know, that I want to go start my own business or firm or things like that. And I think my, I think, you know, Andrew Miller as well, and he kind of calls it

an encore career. There's no, there's no need to rush into it now. You know, wait until you're ready and, you know, and you're financially ready and emotionally ready and your family's ready for you to take on something else. And then that can be your encore career down the road. You don't have to always kind of be go, go, go. And I need to do it now. It's okay to wait a little while. No, I think that's a great note. And it's funny because over the last few weeks,

I've written some stuff on the spotlight effect, which is this idea that we think that people are paying a lot more attention to us than they actually are. And I think that has some relevance here in the sense that if for some reason somebody might feel that they are behind or feel envious of somebody online who has achieved something else, that really shouldn't be the case. If you're working hard and doing a good job at whatever it is your current position is that that's a great thing. And just because you're not getting the accolades of, you know, the online community doesn't mean you aren't doing something, you know, important for yourself and your family. I totally agree with that. Well, that's a great point. Maybe end our discussion on a point of agreement. So I want to thank Kevin for coming on. It was a great post and I'll link to it in the show notes so everybody can take a look at it.