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Bonuses

Free money

If you get a bonus, see if you get the whole bonus pre-taxed if you have the ability to send it right to your tax deferred retirement account you have through your employer.  What I mean is, if you get a bonus, can you have it deposited into your retirement fund account through a payroll deduction?  If you can, can you put the whole amount in pre-taxed.  That’s what I did. 

Most folks use their bonuses to help pay off Christmas debt or go on the family vacation.  You lose so much of it in taxes, it’s outrageous.  I may have done it once in my career but then realized how much money I lost so I stopped. Take the whole amount and pretend like you don’t even get a bonus.  Put it all away in a tax deferred account through your place of employment if they allow you to do that.  If you can’t do that, then at least put it in to your Roth IRA. 

I would argue with my co-workers about this.  They would moan and groan about how much money they lose in the bonus when they take it.  When I ask what would happen if they took the bonuses away from us, they would say they were screwed.  Why?  Because they spent money they didn’t have.  They put things on a credit card and relied on the bonus to pay off the bill.  That is insanity to me.  That madness has got to stop.  Never ever rely on a bonus.  It’s a bonus, not a salary guarantee.  Stop pissing and moaning about money you were lucky to get.

No bonus but higher hourly rate

Since I had this topic planned months ago, things have changed. We no longer get a bonus anymore but what the employers did was roll the bonus into our salaries. This is now a guaranteed amount of money in our paychecks. So essentially, we got a raise which then increases my hourly rate which also increases my overtime rate. Win win. Some in the department still pissed and moaned about this. Unbelievable. Yes, I know, I don’t get $3500 dollars pre-taxed anymore as a deposit into my retirement, I just have more money in a paycheck now which still allows me to max out my ROTH contributions and my 457.

Competitive raises

I have another sweet bonus type news!  Our fiscal year begins on July 1st of each year.  We have gone through what is called a compression study and I guess that’s where they analyze our pay scales and compare them to the surrounding jurisdictions and decide whether we have been getting comparable pay or not.  Well, I guess we haven’t been getting paid so good so they decided to up everyone’s salaries to bring us up to speed.  No complaints here. 

Do what you love and the money will come

If you look back at my post on May 8th, 2019.  I posted my pay scales in the fire department.  Well the amounts I posted were what I grossed those years.  It was too much work for me to go back and see what my base rates were for those years.  Yes, I know that the numbers might be skewed a bit give or take a few grand but the numbers are still relevant. 

So, if my base pay for 2018 was $89,536.71 and add roughly $5600. for ALS (medic pay) plus time and a half for holidays and overtime, I grossed $109,604.  Not bad for showing up to work at a job I love doing.  Well, now tack on $22,383.06 to my base pay bringing it up to $111,919.78!  Add my ALS incentive of $5600 and 10 Holidays at 1 ½ time pay and any other overtime I might do.  Not bad. 

Closer I am to FI…..see what I did there? Indigo Girls fans? Anyone?

This will definitely get me to FI so much quicker.  With dedication, I should be able to max out my Roth and 457.  I will need to make sure my AGI does not go over the 135K which would prevent me from contributing to my ROTH because I make too much money.  I believe that is the cut off for that.  I’ll have to do some research.  

Anyway, I’ve always been a proponent of finding the job you love even if it doesn’t pay you well in the beginning.  The money will eventually come.  Some folks are going to look at me like I’m nuts for leaving a job that pays me 6 figures.  Alas, the quality of life is what its all about.  Young enough still to spend my time with my family while we all still have good health.  That’s the real deal.

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My Salary through the years! You can do it!

This is a rough look at how I get paid. Look through the years and see how the salary jumps up as I work for the fire department. The first number is the base salary followed by the gross annual income for that year.

2000- $27,935 What in the hell!  My pay checks were like $800 bucks or something every two weeks. However did I survive?

2001- $31,287

2002- $34,614

2003- $39,405 but grossed $49,733. I went to a shift work unit which consisted of a 24 on 48 off schedule so my salary increased to this number due to the shift differentials plus medic pay.

I think somewhere between 2003 and 2004 I must have gotten promoted and started receiving ALS pay.  That’s Advanced Life Support supplemental pay for being a medic. I received an extra $5000 added to my annual salary plus $3.00/hr extra for being assigned to a medic unit, plus the shift differential pay for holidays.  The salary amounts listed below with reflect both my base salary and what I grossed due to the shift, ALS stipend, overtime and holiday pay.

Being a Medic is well worth it!

2004- $46,336 but grossed $59,675

2005- $49,545 but grossed $66,776

2006- $53,370 but grossed $76,842

2007- $57,360 but grossed $82,168

2008- $60,840 but grossed $93,489. Remember this was the great market bubble crash.

2009- $62,862 but grossed $85,780

I decided to take the promotional process since we weren’t getting any raises due to the hard economic down turn. We were receiving the meager 3% cost of living raises only. I figured the half way point in my career was a good time to step up to the leadership position. I was promoted to the rank of Lieutenant in 2009.

2010- $69,231 but grossed $96,394

2011- $70,405 but grossed $93,986

2012- $71,782 but grossed $93,307

2013- $74,598 but grossed $92,914

The amount of overtime that I might have worked one year over the next resulted in varying pay scales year to year.

2014- $76,627 but grossed $104,893

2015- $79,303 but grossed $103,753

2016- $81,847 but grossed $108,018

I attended and graduated from the Fire Marshal Law Enforcement academy in 2016. I am currently still working in this capacity.

2017- $84,718 but grossed $104,248

2018- $87,963 but grossed $109,604

2019- $94,991 but I’m expected to make over $120,000.

Keeping up with the Joneses

Due to a compression study that was done in my department, it was realized that our salaries were not comparable to the salaries of the neighboring jurisdictions within our area. Hence a $20,000 dollar raise will take effect on July 1, 2019. Yay! Happy Birthday to me!

Our fiscal year is from July to June so on July 2019 my base salary will go up to $111,920. My anniversary year with the Department is in January 2020. This will give me another bump in base salary to $115,277. At that time, I will decide when my time to go will actually be. So far, it has been quite the ride.

A job with the fire department doesn’t look so bad does it?

https://www.indeed.com/salaries/Firefighter/Emt-Salaries,-Virginia

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Hustle, Hustle, Hustle

Last year I hustled real hard and put away 20,000 pre-taxed dollars into my tax deferred 457 retirement account.  I was able to stash away money for my 8 months emergency savings, and take a trip to Florida and Punta Cana Dominican Republic and enjoyed a few concerts as well. 

My assets

I was pretty aggressive with my portfolio throughout my career.  Investing heavily in stock mutual funds, and a bit in bonds. My cash savings was steadily increasing and that was about it. When I say stocks, I want you to know it was in stock funds not individual stocks.  I do not pick stocks and I do not try to beat the market with selected stocks.  ETF’s or exchange traded funds and Index funds are where I’m at. 

The equity in my house was another asset.  I bought my townhouse in 2002 about a year after one of my many break ups.  Once again, not wanting to rely on anyone else for anything, I bought a house I could afford all by myself.  You will see that in 2002 my gross annual income was $36,227.  I was receiving child support also but that stopped in 2007 and then I had to pay child support.  Yeah, don’t get me started with that shit. 

Making it automatic

I decided in the beginning that a percentage of my paycheck would go in to retirement, not a set dollar amount.  This way, if I cranked out some serious overtime or hit the triple holiday pay check, a larger portion would go into the accounts instead of a set dollar amount like 300 or 400 dollars. 

Bonus bonanza

I also put all 100% of my retention bonus into my retirement account.  This way the whole amount went in tax deferred.  Many of my colleagues took the cash bonus but they ended up getting nearly half of it eaten by taxes.  Screw that.  That was free money.  It was offered a few years into my career and continued until this year 2019.  After this year, the bonus amount was just rolled into our total salary for a salary increase. 

Some hyper consumer individuals liked the one-time bonus but I loved that it was rolled into my salary as now my hourly rate has increased for overtime.  It was never a promised thing so just be grateful that we got it at all.  I never ever banked on that bonus, ever!  You get yourself into trouble when you depend on bonuses to pay off Christmas and holiday debts.  I highly discourage this type of behavior. 

Learn as you go

Now even though I was selecting my own funds with the retirement accounts we had through work, I didn’t know what the hell I was doing.  I just made a nice mixture of small caps, and big caps and blends etc.  I would see what the funds returns were since inception and told myself that I think I was doing the right thing.  Well it paid off.  Yeah yeah, I could have had them manage it but then they would get a little bit more of my money. 

I wanted to hold on to my hard-earned money as much as I could.  Don’t even get me started on expense ratios.  I didn’t even learn about that until last year.  Holy shit the money I see going in to their pockets.  OMG get Personal Capital for this.  It’s free.  It’s just like Mint but I like it better.  I can see how much money I lose to them in expense ratios.  Argh!!!! 

Expense ratios are the work of the devil

Expense ratios on the down and dirty.  This is the fee they charge you for managing the fund.  Some of it is 1% or higher.  I have mine now in Vanguard funds.  Thank the bee gees that our new retirement account holders offer Vanguard funds.  Here is a clear-eyed example.  Picking a random expense ratio number, and let’s say you have $100,000 dollars in a fund, an expense ratio at .58 percent would be $580 dollars a year they take from you before they report your gains or losses.  If your expense ratio was .04%, they would take $40.00.  Which would you want them to take?  This is why you need to ask what the expense ratio is or look at it yourself.  All of that information should be visible to you.  Personal Capital reported that I was losing thousands of dollars annually to expense ratios. 

Brokerage firm Vanguard for the win

I have changed all of my funds over to Vanguard funds.  Fidelity is currently offering 0% expense ratio funds.  You better jump on these.  Get started with the Total Stock Market Index fund.  The symbol is Vanguards VTSAX if you have a cool 3 grand to start with or the ETF VTI with no minimum.  Both are Total Stock Market funds.  Fidelity offers FZROX.  Fidelity Zero Total Market Index Fund.  Do some research and see what you like best but look at the expenses for each one and get started.  I have a bit in short term bonds because I’m getting older and want a bit of security but I still have quite a bit in aggressive funds. The bonds are in VBTLS which is Vanguards Total Bond Market Index Fund. I also have a tiny bit in BSV which is Vanguards Short term bond ETF.   

Remember earlier when I said I was only putting in 4% when I first started?  Each year I increased it a bit, and each time I got a raise I increased it a bit, and eventually I was close to maxing out each year. Stay tuned for my salaries through the years.