One-Man Bureaucracy

Over the course of my life, a large number of people have (somewhat oddly) informed me that they wonder what the world looks like from my point of view. This is almost always driven by the belief that everything must be a constant struggle to tread water, on the grounds that I keep everything so amazingly complicated, espouse atypical philosophies galore, and only seem to start things that seem hard.

Ok, I can see how that might appear to be the case.

From my point of view though, things look a little different. I usually wonder why everyone else spends so much time stressing out about how complicated their lives are just because they didn’t bother to set things up properly in the first place. My life feels pretty effortless. I spend a lot of time as if on auto-pilot.

Let me tell a little story that highlights just how odd and easy my little systems can be. I’m hoping it will be funny, on the grounds that the only reason I’m thinking about this is that I messed one up.

The stage of this little drama is how I handle my finances. I’m going to try to keep most real numbers out of it for a number of reasons, politeness being high on the list. Basically, my finances take care of themselves. The general cycle looks like this:

1) Payday arrives once every two weeks, and direct deposits money into my checking account. My checking account earns interest. I keep enough money in there to never worry about overdraft fees.
2) My company automatically subtracts enough money out of my paycheck to max out my 401(k) over the course of the year. The funds go into a side account that I set up at the start of my employment.
3) All of my recurring bills come due monthly. They charge themselves to my credit cards automatically.
4) My credit card bills email themselves to me once per month. When I get such an email, I pay I pay it in full, minus the considerable cash back that’s racked up from paying all my bills.
5) A brokerage account automatically pulls frequent withdrawals from my checking account and deposits into a variety of funds I set up years ago, including a Roth IRA, my nephew’s college savings fund (which I manage), and some index funds I chose ages ago and rarely think about.
6) An online savings account automatically deposits money into my checking account to offset my nephew’s college investments, and will continue to do so until it’s empty.
7) Repeat.

In summary, every time I actively pay my credit card bills, I also passively:
--Pay all my other bills too
--Max out my 401(k)
--Max out a Roth Ira
--Manage my nephew’s college savings
--Buy stock
--Earn cash back and interest

My checkbook also balances itself, so once a month I just go make sure that all the numbers match what the various organizations sent me notice of. This requires about as much thought as falling asleep.

Thought went into making the initial choices of what does what, but these days, my money dances a constant, carefree dance that I rarely bother to critique.

However, this hit a slight snag when I went to pay my last tuition bill. That’s an exercise in ridiculousness itself, because my company pays for my classes. But I enroll, pay the bill, give a copy of this bill to my company, who then reimburse me for the expense. I went to write the check to cover this, since NU refuses to allow me to bill college to my credit card. (Bastards!) I looked at the “buffer” cash in my checking account, which should have been more than enough to loan myself the tuition bill until reimbursement came. Oddly, it wasn’t.

Suddenly, I faced the question of, “Why is there less money here than I was expecting?” I was a good $3000 short of what it should have been.

I quickly scanned my self-balancing checkbook. Oddly, my cash buffer had been slowly dropping for almost a year. There was clearly no one event that accounted for the missing cash. And all the events were accounted for and approved.

I concluded I was overspending. It wasn’t a major problem. I just wondered why I hadn’t noticed it before.

Then my eye caught on one of the payments made from my account. $134.62. An odd number. Odd because it was being pulled into one of my stock accounts. I buy raw stock in nice round numbers. So what was this?

A little further down, there it was again. And again.

I turned to my notes page that explains what my money is doing and why. Sure enough, there was my answer. My jaw dropped slightly in disbelief.

I have to break here to give you some back-story. About eight months ago, I traded cars with my sister. I used to drive a ’98 Hyundai Accent. It was a good solid car, but I knew I’d have to replace it eventually. So I saved up enough money to do just that. And I kept most of that money earning 5% interest in my checking account buffer, since at one point I thought I might be getting a new car fast. Instead, the Hyundai turned out to be working fine. Shortly after, I agreed to swap cars with my sister to help her out with a difficulty, and got the new Prius. In exchange, I have been sending her regular checks for the bluebook value of the car.

That’s the story I remembered until just recently. It omits one key event. Before the exchange, when I realized that it would likely be years before I needed a new car, I set up an automatic stock investment schedule for all that saved money. Once a week for two years, $134.62 worth of my “new car fund” would get moved into stock. The reasoning was, that way, the amount of money I had on hand for a new car would be directly proportional to the eventually-revealed reliability of my car. Plus, I’d be dollar-cost averaging a nice bit of cash. It was a win-win.

That was exactly fifty-three weeks ago. Just slightly before I bought my sister’s car.

I forgot that I was investing that money. So once a month, I’d send my sister about 10% of the car’s value, and four times per week I’d invest another 1% in stock. So at this point, I have “bought” 90% of my car, and invested 55% of the money required to buy it again. Whoops.

What’s funny is that I thought that $3,000 had gone missing from my checking account. Actually, $7134.86 went missing, but it only looks like $3,000 because I’ve been well under budget most months ever since.

Everything was going so according to plan that I managed to invest $134.62 a week for over a year before I noticed I wasn’t supposed to be doing that.

That brings us back to the people who insist that I make my life too complicated. When people tell me that my life must be a never-ending fight against my own overly-complicated schemes, I generally laugh and say, “Not really!” I’m a one-man bureaucracy, but that that also means I’m the one who made up all the forms.