How a Sales Engineer With an Adorable Dog Does Money

There’s a cute dog photo in this one.

Nigile (not his real name) is a 34-year-old sales engineer in Providence, Rhode Island.

So, Nigile, how much money are you making?

With a sales job I have a base salary and incentive compensation. My current base salary is $130,000, with incentive to reach 180,000 if I reach 100 percent quota. Anything above would be considered accelerator payouts.

How hard is it to reach 100 percent quota?

A bit of a challenge! I know the first year I took on this role, the quota given was attainable—but as you reach incentive goals, the company I work for stretches the carrot further and further. It is NOT impossible year in year out; my first year I was 200 percent quota, but the following I was 101 percent, and last year I was about 92 percent.

Well I hope you reach it this year!

It’s been pretty good for the first half this year but still a stretch… as our competitors I hate to say are catching up and our technology is a bit on the high end/pricier side. As the market matures in SaaS (software as a service) most customers are more cost-conscious for the value being provided.

But I love to compete, so I stay the course.

How does your income compare to your expenses? Do you have money left over at the end of every month?

I make a game of it to keep my expenses extremely low, which is the main reason I decided to live in Rhode Island as opposed to Boston/Cambridge. My major goal each month is to keep track of my margins. Currently and over the past year I have achieved saving about 60 percent income each month.

So I’ll describe my expenses each month:

My biggest expense is my mortgage payment (my half is $600 out of $1,200) — I own a house just outside of Chicago with my brother that we got a great deal on back in 2011 when the entire world was just climbing out of recession.

My rent here in RI is $280/month (I have a roommate, so total rent is $560) — it is almost insane. I have elected to stay in a ok-not-so-great neighborhood, but the apartment is so close to I-95 and the commuter train station that it’s more of the location that keeps me here.

Utilities average $80–100 a month split between two people in the apartment.

I have no credit card debt — it has been about a 10-year journey to pay that down. I still use credit cards though.

My student loan is at about $8,700 and I elect to pay the minimum ($93.65). When I graduated from college in 2005, I consolidated all my loads to lock in the (at the time) historical low interest rate of 2.1 percent.

Gas runs about $150 a month and I feel so guilty about driving everywhere. To make up for it, on weekends I ride my bike or walk.

I have been working and re-working on my savings strategy — for the longest time I had a savings account that I would auto-transfer direct deposits to from my paycheck, but about two years ago, I realized the savings account wasn’t really growing. I decided to leverage my online checking account for savings because it has a better interest rate and it comes with a brokerage account, which got me started on dipping my toes with investing.

I contribute to my company’s 401(k) but because of my monthly surpluses, I also started to contribute to a traditional index fund account at $100 a month.

My parents got me and my siblings started on a Roth IRA when I turned 18, and just this year increased contributions to this account at $120 a month.

Oh, and I forgot to mention: my apartment in RI, the landlady lives upstairs, so I help her with computer/IT help. In exchange she provides the Wi-Fi password, so I don’t have any cable/internet bills.

Lastly, I used to drive a used car but it blew up back in late 2014, so last year I bought a used car which is about $150 a month but because I want to get rid of the car note, I pay $300 a month on the car note.

My total monthly net income, after taxes, medical, dental, 401(k) (6 percent to meet company match), employee stock purchase (4 percent), and life insurance is about ~$11,200 before my expenses as described above.

The difference remains in the checking account. Dangerous, I know, but like I said, the online checking/brokerage account provides better interest rate, however small it is, versus a savings account. I make all daily purchases on a credit card and take out about $100 each pay period for petty cash in my pocket for situations that demand cash only.

My company stock pays a dividend each quarter so I take that and rather than plow it back into company stock, I contribute that to the index fund.

So I have a really, really healthy nest egg (liquid) outside of retirement accounts and investments and I’m now starting to think about how best to maximize earnings of this nest egg, maybe take more risk in stocks so my money makes more money (though I don’t think I’ll ever start day trading) but I just don’t know.

I guess I just like the feeling of a fortified, rock-solid safety net and I can help my family in a pinch, I live halfway across the country from them so it’s important for me to know I can take of myself in an emergency or buy a plane ticket last minute for an emergency.

My net income also allows freedom for me to spend on experiences without really budgeting (which pains me to acknowledge), like Red Sox/Patriots/Bruins/Celtics/Bears/Cubs/Blackhawks games, last minute trips, or music festivals (I attend anywhere from 3–4 a summer and they are not cheap).

I don’t like to spend money on clothes like fast fashion disposable stuff. I have adopted a uniform where I have three basic color blocks that I can interchange to form whole outfits any given week or during longer work trips. I tend to skew towards low-key, high-end men’s clothes that I wear until threadbare, so on average a $150 dress shirt should last me at least three years. It sounds high, but I think about total cost of ownership rather than initial price. I have bought only five shirts (three in the same light blue, one gray, and one dark navy) in the past five years.

Okay, WOW. This is great. This answers about ten of my questions at once! Of course, it prompts a few more questions. First: so you’re a landlord then? For the house in Chicago?

For the first two years — it was great passive income!

But….

My parents got into a situation with their bank, my brother and I wanted to help out and pay it forward you know, so they live there now. Of course my parents help out with utilities and home insurance, but we take care of the mortgage.

I forgot another line item on my monthly expenses, I got a puppy last summer, so total dog expenses run about $150 a month (between food, treats, regular treatments, and doggie day care).

Awwww a puppy! Do you have a picture you’d love to share with The Billfold? 😀

His name is Noodles! (Because I love ramen noodles, pasta, spaghetti… etc.)

I also think it’s great that you’re helping out your parents. I think a lot of us would love to be able to give our folks a place to live.

Certainly so! They have given us everything and it’s only right, we didn’t want them to stress out over shady bank practices and decided the best way forward at the time was to go into a short sale and give up the house without going into foreclosure.

I am sure one of our commenters will ask what kind of shady bank practice was going on with your folks. Do you feel comfortable sharing that?

I don’t mind sharing.

So, back in 2009, President Obama (I love the president but this one thing and his drone policy is something I cannot align with) announced the Loan Modification Program.

[Nigile followed up to clarify he meant the Home Affordable Modification Program.]

My parents maaaay have bought a bit too much house back in 2005 but they were not in trouble at all… fast forward to 2008 and as Rome was burning and financial markets throwing up all over the place, my parents took an interest at the national dialogue at the time… so when the Loan Modification Program was announced they felt they were within that category and signed up for the program.

Once they in the program, their bank—rhymes with Fells Margo—guided them through the process. The process was to NOT pay their mortgage for 90 days, after which the bank would fast track them to a six-month trial loan modification. They were approved, and for six months they paid a reduced mortgage. After six months, a different division within Fells Margo sent a letter saying they have been more than 180 days late on their mortgage payment. Basically, at Fells Margo, the right hand didn’t know what the left hand was doing and thus sent notice of foreclosure to my folks in 2011. The government’s Loan Modification Program ceded control of the program to the big banks, and as I have done some research, I came to the realization that the Loan Modification Program as not for consumers but rather a modification program for the Banks, essentially to “foam the runway” for the banks.

Got it. Wow. That’s a great explanation.

Smarter people than me are still trying to understand that program. 😉

I want to ask another question about your family. How much of your “earning and saving” drive comes from your childhood and from observing your parents? They taught you about the Roth IRA, after all.

Oh, you know, growing up my parents did not make much. They came here from Hong Kong in the ‘70s, worked very hard to start a business and many long hours but we were never without.

Growing up we always had cool things, maybe not top-of-the-line stuff, but I can’t recall ever not having things we asked for.

My parents also had a good way of teaching us how to ask for things. For example, growing up, me and my brother always wanted the latest sneakers but rather than saying no, my mom would always ask us to write a report as to why this item was needed and how we could contribute to make the purchase happen… though this would not always result in a “yes, they would buy us the item,” it was a way to help us articulate a want versus a need.

I also have a sister and because she is the youngest she learned all the lessons from me and my brother’s worst financial ways…

Do you still think about your purchases that way as an adult? Do you write “mental reports” before you buy something?

Oh yeah! Sometimes to my detriment, where I would perform too much mental gymnastics to justify that I need new running shoes and the next week I would tweak my ankle and have to visit the doctor and have to pay a co-pay and possible treatment all because I didn’t just buy the new running shoe.

So for me, it’s always like, “okay, you make an adult salary, no need to go overthink saving money on a running shoe.”

With that in mind, two more questions. First, what do you think you do really well financially and what do you wish you could do better?

For me, what I do really well is making a budget and using it as a guideline rather than a strict regime. I say this because I used to follow my budget to a T and go over. This discouraged me for whatever reason and it just wasn’t fun. I really started to notice why I overspent: it was because of a strict adherence to the budget. I would treat myself to various things and then wouldn’t keep track of those expenses because they weren’t in the budget.

What I don’t do well is manage the cash I have on hand — I have been trying out different methods described in many personal finance blogs since 2009, from the envelope method to cash only and many others, and to this day I still don’t have a good grasp on cash in my pocket. It’s like, “oh I have $60 in my pocket, I’ll buy a few rounds, whatever, oh that $10 taco at the food truck (cash only) what a deal!” My biggest weakness is always food trucks.

I love that nearly everyone I interview says that their big weakness is spending money on food. THE THING WE NEED TO STAY ALIVE.

I know, right! I can’t help it! I was just at a music festival and we all bought supplies to cook with but the food vendors had soooo many good options from $15 chicken and waffles to $20 paella dishes… we almost did not even cook any food. I feel we collectively wasted $200 on the food we bought, and spent almost that much individually (possibly being overdramatic here) over the course of the festival.

Slate just did a story about that! They say that when people buy groceries, they see that food as “an option,” not as something that should be eaten before it goes bad.

Congress Might Fix Our Expiration Date Problem. Too Bad It Can’t Fix Our Laziness Problem.

I was notorious for overspending on groceries so I decided against weekly trips and planned three weekly meals. I tend to not cook meat when I make dinner or myself so I have eliminated meat from my groceries. My typical meal is generally vegetable stir fry with fried egg on top and any leftovers I just make into homemade fried rice.

Dinner with friends is probably where I will order a steak or a chicken dish but I’m a sucker for sushi!

Okay, last question: What advice do you have for Billfold readers?

My advice to readers is that you have to try out a lot of different systems to align with your financial personality and see what works. I know I have started and stopped and stumbled and still on the journey to find that healthy middle ground and continue to evolve. What was working for me even two years ago doesn’t work for me today as I have changed from a personal and professional standpoint so it’s good to listen to your inner voice and be mindful of your financial personality as it also evolves.

As I mentioned, using the envelope method five years ago aligned with where I was in life at that time but today I would burn through all that cash before the end of the month. Three years ago as I was furiously paying down my credit card debt, I could not imagine using my credit card for daily expenses only to pay it off each pay period, but today this is what works for me because I’m in a stage where I do have enough pay bi-monthly and use the credit card to take advantage of the benefits of rewards points (I have a Chase Sapphire rewards card).

And lastly, your readers are already on the right path by being part of The Billfold, so I feel they/us/we have already acknowledge the financial challenges they/us/we have and being part of this community will give them ideas and tools to divide and conquer whatever it is that is ahead of them by taking the best ideas from regular readers and contributors.

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