26 Feb 2021 Money, Beliefs, and What’s Behind the Korver Curtain?
In the last two briefs of January, Ryan and Geoff wrote about their personal finances, the way they invest, and how they got to Beacon, and I was going to follow suit until GameStop happened and we felt compelled to pause the regularly scheduled content to address that situation (which unfortunately decided to rear its ugly head again Wednesday…).
But I’m not going to write about GameStop again because my brain would explode. So, here’s a little bit about how the Korvers think about (and use) money.
At the outset, I will say that in finances—as with anything else—we can’t fully separate beliefs from actions without making one of the two null and void. So, in the 9+ years that Amy and I have been married, we’ve really tried to wrestle with that tension: How should our beliefs inform the ways we use money, and what do the ways we use money in turn reflect about our beliefs? Rarely (probably never) are the two in perfect harmony, but it’s in the wrestling that we grow.
All that to say, any discussion about what we do with our money is at least implicitly also about what we believe. Now, this is not a blog on what the Christian faith that has shaped our beliefs and actions says about money and economics (maybe I’ll write that book someday!), but suffice to say for now that the overriding principle Amy and I have attempted to believe and act out is essentially this: We’ve been given much, we depend on our neighbors and our neighbors depend on us, and therefore nothing we do with money is just about us.
That preamble out of the way (but also running through the rest of this blog), here’s the Korver financial situation. Please note that none of the following is prescriptive. We’re all different and have different reasons for our various financial choices. Please also note that sharing this makes me very uncomfortable! Especially this next part. But I think our culture’s preoccupied privacy about financial matters is ultimately to our detriment, so, at the risk of oversharing, my hope is that our transparency will encourage more transparency.
Giving. I have written a lot about giving on this blog before, so I won’t go too much into why we give here. The “how much” decision is basically this: Within a year of getting married we decided that in any given year we would give away at least 10% of our gross income. According to our 2019 tax return, our gross income was almost $112,000, and we gave about 12% of that to a combination of church, university/scholarships, and local charities doing work we care deeply about. We have tried (though we need to get much better at this) to sit down toward the beginning of each year and decide what the year ahead will look like from an amount and allocation standpoint, which helps when we get invited to give to new organizations or increase giving to existing ones.
The last thing on the giving front, which may segue into the next section, is that we decided several years ago that whenever we got a new (to us) car, we’d give away the one we were replacing to someone who needed it. This harkens back to when I was a kid and our family was the recipient of several free cars from dear friends, and is as much an attempt to “pay it forward” as it is to keep our lifestyle in check…
Current Lifestyle. We have done our best in the last couple of years to put a stake in the ground regarding our spending/lifestyle. This is mostly because I do not trust myself. I like nice things, and can and will absolutely spend money that hasn’t been spoken for already. So we’ve done all sorts of weird things to artificially keep our current lifestyle in check. In addition to the car thing I mentioned above, we also have kept our tax withholdings high in the past, because we have found it’s much easier to be intentional about one big refund than it is a few hundred extra dollars a month in reduced withholdings.
As our income has gone up, we have tried hard to focus on not nickel-and-diming it on things that we don’t care that much about and instead on giving it (see above), saving it (see below), and spending it on bigger experience-oriented items. Last year is a great example of the latter: We put a concrete pad and a really nice basketball goal in our back yard. It was unnecessary, but it’s been one of the best investments we’ve made for our family. We went to the beach for a week twice, once in May so I could work-from-home-from-the-beach, and once for an actual vacation at the end of July. All of these were possible only because we’re quite frugal in our “everyday” spending (and of course also because our income is in the top 20% of the US, and likely the top 1% of the world).
The elephant in the room of our current lifestyle is housing. We live in a 950 sq ft. house which we purchased in 2014. We love our neighborhood, our mortgage payment is tiny, and so is the house and the one bathroom it has. But Raleigh is an awful place to be looking to buy a home, so we’ve been dealing with that tension for a couple years now. How do we square a desire for a little more space with the desire to stay in our neighborhood and with the financial flexibility that our current home allows? I don’t have any idea. We may sell our home and rent a slightly bigger house for a while so we can save for what the Raleigh market requires, we’ve thought about moving out of Raleigh and commuting, we’ve thought about adding on, etc. It’s one of those questions that seems purely financial at first blush but very quickly balloons into something entirely more complex. We shall see!
Future Lifestyle. We have a financial plan, just like our clients! It’s a pretty simple plan, honestly. Maybe too simplistic. But we’ve just sort of decided to keep living our current lifestyle into the future.
To fund that future lifestyle, if and when we get to a point where we’re no longer paying for it with income from work, we save and invest. We have a 401(k) at Beacon but it doesn’t have a Roth option, so currently I don’t save anything into it because of the tax bracket we’re in. Instead, Amy and I each max out our Roth IRAs, putting in $500/month per account. Our portfolio is invested in Beacon’s 90% equity portfolio. When the market went down significantly in February/March of last year, I frontloaded some of the year’s savings into the market to take advantage of lower prices, but other than that I don’t touch it except to do periodic rebalancing. We just keep saving.
We also save $100/month into each of the boys’ 529 accounts, which won’t pay for all of college for them, but it’s something, and we started as soon as they were born so it’s pretty neat to see how that has grown.
Beacon. Being an owner of this business is also an investment of course, by far the largest financial investment we’ve made as a family. But for now, I don’t even take it into consideration when thinking about our future lifestyle. Partly because modeling the future of a single business entity is impossible, partly because owning a business is risky, and partly because we don’t need it to fund our modest goals.
For me, the most important piece of the Beacon investment is this: It ensures that I get to do work I love to do, am skilled at doing, and which at least provides me the opportunity to show up and be present wherever I am. I often fumble that opportunity, but I am eternally grateful for it.