I decided to up my EARNING ceiling

I think an extra 500 billion will do. I just felt a little too limited before.

Thinking into a New Income Bracket

Remember that scared feeling I had a couple of days ago because I had the opportunity to do a new kind of work? Well, it was an interpreting job and I was so excited I was frightened to death about it. See, this came like a DAY after I decided that I needed to re-evaluate my fees and try branching out in new directions. Poof, like magic this job came up!

Interpreting-- Wow! Getting paid for something I do nearly every day for free. You wouldn't believe how often I have to turn from one person to the other and explain what the other person just said, but it's always informal, and so automatic that it never seems like work enough to be paid for. So when Marina brought up this possibility it seemed so Hard. Because when you attach money to something you do anyway, you start to think about what the expectations are for the people paying (must be perfect, no mistakes, must know every word ever uttered in both languages).

So my real fear was not the work itself, but the guilt associated with putting a price on something that I do as normally as breathing air and feeling that if I ask for money for it, I probably won't be up to the clients' expectations. If you don't charge and they don't like it, well tough patooties!

But I decided I needed to change all that, I needed to be worth it, and come up with a price that communicated I was indeed a professional (the fact that I switch between Italian and English all the time should actually communicate fluency and experience, but I don't give myself credit for that.). I did this by consulting my business owner girlfriends-- Marina and Klementina. The funny thing is, when it comes to putting a fair price on things, none of us felt 100% confident.. Isn't that nuts? But we were able to kind of psych ourselves up and convince each other... Is it because we're perfectionists? We have a self-esteem problem?

Well, by the end of the second day I was feeling so good about that job and had rehearsed my non-chalant answer to the question "are you available for the job" with a very high  fair hourly rate.

But that call never came. The client cancelled. They said to send a bill anyway, but well, while I can get my head around upping my price to something respectable, getting paid for nothing, I'm not quite there.

I am not disappointed, though. I have totally changed my perspective and am thinking higher than I used to. I also realized that when it comes to these matters, it's important to talk about it and create a community. I can't wait until our girl financial group has its first meeting in September.

Reading the Financial Papers Can be Enlightening!

So I was just scanning the Sole 24 Ore when I found this article. It talks about reducing taxes up to 96% and my type of tax number is included. We'll see if it will apply to me. Hope hope hope!!!

Finding that article made me feel pretty smart. We'll see how long that keeps up as I try to read and understand it.

That whole upward mobility thing is overrated

Thought I had this morning on the way to the shower...

When did it become a NORMAL EXPECTATION to have a bigger house than our parents? My grandparents, for example, had a much SMALLER house than THEIR parents. They built it from scratch and paid for it as they went along.

Maybe I'm clinging to the idea because MY house (condo) is MUCH SMALLER than my parents' small house? I don't know. We bought what we could afford at the time- and good thing, too, because life threw us a few work lemons in the meantime but we never had a problem paying our mortgage.

I'm just sayin.

I Forgot to Tell You

A Piece of Advice for Saving Money from the hugely successful, high-earning student that I told you about:

"To pay your tax bill for next year, I suggest you do like they used to do in the old days: two nights a week-- no dinner. Only caffè latte."

Made in the stove top moka coffee maker, of course.

IF I KNOW A HIGH EARNER CAN I BECOME ONE??

LESSONS FROM A HIGH EARNER: INTERVIEW ONE

One of my private students has a very high position at one of the companies I teach at. We have a good relationship and I decided to pick his brain about what it takes to become rich. Here is the advice he gave me.

First, “You are not the money-making type”.

Thanks. This is not a great start. Then, “if you want to become rich, choose a profession where you can work under the table, or get a real job. We are in Italy, the taxes are too high to be an independent professional. But if you want to work independently, at least write off everything you can.”

Q:Trust fund or real estate for your kids?

A:In Italy young people are helped by their parents, there are no trust funds, and if you want one you need to get it in Switzerland. We don’t use them here in Italy.

Q:Do you invest?

A:No. I don’t spend money. I don’t go on expensive vacations, I live simply. I bought my apartment. When I had more money, I bought the apartment below mine. When I had more money I bought my son a 250 m2 apartment downtown. He is a very lucky 28 year old.

Q:Did you take out a loan?

A:No. I only pay for things in cash. I don’t like to have debts.

Q:How do you pass the value of money on to your children?

A:It is normal for our children to live a privileged life when they are young. They do not appreciate the sacrifices made by their parents to give them a better future. My hope is that when my sons are older, they will understand the value of money. My older son is already starting to understand. He is working and knows first-hand what it is like to work a lot for very little. My sons have seen my wife and my way of life. We are not extravagant people. 

They could never understand where I come from. I was one of five brothers in a very poor family. My mother did not work and I still marvel at how she managed to feed all of us.

Q:Where are you the most extravagant?

A: I grew up in a situation where it was not possible to take a hot shower every day. Hot water was rationed and my mother was very careful about how long we were allowed to be in there in order to make sure there was water for everyone. Now I take LONG HOT showers, I waste water, it is my one extravagance. Long and hot showers.

Q:Regrets?

A: I have many regrets in my life. Most of all, I feel that I have lived too little. But I have taken care of my family, and as a man from the south, that is important to me.

Q: Does money buy happiness?

A: No, but it buys you the things that buy you happiness. That’s not a very nice thing to say, I realize that.

PLEASE DON'T MAKE ME GO BACK TO HIGH SCHOOL!

Going back to the self-esteem test, I checked this as true.

"I HAVE NO CONTROL OVER MY TIME"

Since I am an independent worker and don’t have an office (well, it’s in the living room since my “office” is now a baby bedroom), it is very easy to mistake just about EVERYTHING IN THE WORLD as being more important than my work. Plus, I have a baby and have never put her in daycare or with a sitter when I was not working billable hours (which usually means I am teaching outside the house, as even translations can be done when the baby is sleeping, which, by the way, is never during the day).

Even if I want to get something done, how can I NOT put everything aside and PLAY WITH HER if she is looking up at me with her big brown eyes and smiling with those two new teeth?? 

I do not give myself the time that I need to get my work done at home, which makes me feel lousy and frustrated. Not to mention how difficult it is to make money if you’re not doing your work. Huh duh!  But it is a convenient excuse. If I don’t have time, I can’t get my work done, if I can’t get my work done, I can’t make money. And that’s bad.

As I write this I realize that it’s not the WORST thing that could happen, though. It would be MUCH WORSE to DO THE WORK and NOT GET PAID, than NOT do the WORK and NOT GET PAID.

This is like the B student who doesn’t have to work to get Bs. With just a little effort, she could be an A student, but she is full of fear. What if she does the work and fails anyway? Then people will know she is a loser and make fun of her. In that case, she does not fail, she IS a failure and then everyone will know the truth.   

Hey, that B student was me pretty much all through school. I am my own worst hater.

WANT FRIES WITH THAT SELF ESTEEM?

After my tax bomb the other day I decided it was time to shake it off and move on. As these things sometimes happen, Marina had coincidentally left me the original copy of Overcoming Undearning in the classroom of the company we both teach at and I read between classes. Anybody who isn’t rich should know, by the way, that the money thing is an emotional subject and that in order to get more, you have to come face to face with some dark, ugly stuff—repressed feelings, childhood, your relationship with money, and your self-worth. First step to changing my financial situation: the self-esteem test.

Check if the following items are true.

I blame someone else for my situation.

(Husband, kid, Italy, dog, hmm. yeah. CHECK, and I feel terribly guilty for admitting it!)

I constantly blame myself even if it’s not my fault.

I’m sorry! I’m sorry! My fault! Excuse me. CHECK.

I do what others want even if I don’t want to.

Um, ok, we can do that but, um, I thought that it would, um be nice, if, um, oh forget it, let’s just do what you want to. CHECK.

I hold myself back, or easily give in to avoid upsetting, hurting, angering, or offending someone.

Alright, you win, you’re right. Okay okay. Sorry. CHECK.

I let others demean or put me down.

I know I should be less superficial about money matters, I’m not the money type, I’m messy and disorganized, yeah, ok. CHECK.

I hold grudges or I’m easily angered.

Try not to. It’s me, not you. CHECK.

I’m reluctant to set lofty goals for fear I won’t attain them.

If your expectations are low you can’t get disappointed, right? CHECK.

I’m filled with big dreams but don’t follow through.

Hmmm. CHECK.

I’m unwilling to ask for what I want, often because I don’t even know.

This one. I don’t know. Hmm. Wait. CHECK.

I give up at the first sign of failure or hint of rejection

How about we start with this one for a change. CHECK, but not for long (SUCKITUP, STECK!).

I have no control over my time

This one, too. CHECK and change.

Looks like you need a shot of self-esteem, Sister!

Ouch. Double ouch. Triple ouch.  And, oddly, COMPLETELY surprising.

Doing the Right thing is Expensive

There is this great scene in the Secret Diaries of a London Callgirl where the main character is shagging her accountant and after, he says "remember to put away 40% of that..."

I got a second opinion. The calculations were correct. But what annoys me is that my accountant didn't explain to me how things work (I asked, too). Well. For the healthcare system and retirement (not that I will ever be able to at this rate) you have to pay 40% ahead in July, another 40% in November, and the other 20% in July (along with another 40% for the year after). Great. Can't wait til november! (Sigh of desperation!!)

The good news is that at least the taxes are paid because my invoice includes a 20% tax that clients pay (ritenuta d'acconto). I should get a slight refund (ha) for what I overpaid that way, which will go towards (hopefully) reducing what I have to pay in November.

Realization number 1: Here it comes.

Doing the right thing when it comes to taxes in Italy is not advantageous for the pockabook (as they say back in Wisconsin), but it must be done...

I am reading a great book

It's called Overcoming Underearning by Barbara Stanny. She wrote one of my favorite personal finance books for women called Prince Charming isn't Coming: How women get smart about money. Well this book came from a workshop aimed at helping women earn more money and is filled with some good advice about getting over your psychological blocks to bringing in more money. I love this stuff, I confess.

I am an underearner. I give away a lot more of my time than I get paid for, I pay myself way less than I pay others for doing the same job, I often put off doing my bills, signing contracts, and doing other things that would bring me money faster (as I write this I am stressing about an email I need to write making an appointment to sign a contract with a new client for some academic translations-- what the HELL is my problem??). I blame my underearning on external factors (If I had a more expensive phone, I could be more available, I could pounce on jobs faster because I could see my email anywhere!!...),  yet... 


I think I would be a great rich person... given the chance!


So I decided to take one of the first tests in the book about what my earning ceiling is. It has you visualize and write about how you would feel if you made 5,000 bucks a year, 10,000, then 25,000, then 75,000 then 250,000 and finally a million.

Now I have made nowhere near 75 or 100 g's, but I sure didn't have a problem visualizing them. They almost seemed like too little (I'm worth so much more!!)- Then I got to 250,000 and realized I was completely insecure... The panic took over and I realized that at that much money, people would figure me out, that they would somehow find out that I am a fraud and have no business making that kind of money.

Isn't that interesting? That being said, 75,000 would put me in a new tax bracket and swipe away my poor person VAT number safety net of only having to pay taxes once a year in Italy, and that also scares the bejeezus out of me.

But I track all of my earnings, and immediately count them as 40% less than what I get (yeah, I honestly pay 39% tax-- I think the highest you can pay in America is 35%, but who really does??!), so having to pay quarterly or having to pay ahead of expected income shouldn't freak me out, but it does.

Which is all the more reason to learn more about money. Taxes are never going to be MORE than you earn, right? So earning should be a POSITIVE thing, not NEGATIVE. Right? Right?

Be Frugal, Live Better

Here are some examples. I follow almost all of these. Even number 37.

Stop trying to look cool

At a company in Trieste I used to work for, all of the top managers had really fancy status cars. The other cars in the fleet were the cheapest cars you could find. They didn't even have radios, so that employees would just wear their ipods when they drove to worksites far away. The sense of hierarchy was so strong that these super intelligent people were made to feel like unimportant losers.

This feeling, that some people are important, others aren't, was communicated in other ways too, especially through equipment and cell phones. I was a marketing person, therefore  my hours weren't billable, which made me less valuable to the company. This was communicated to me through my work tools, which were hand-me downs from my colleagues. ("Ahhh. That phone was mine for a while, before that, it was Francesco's and before that, who knows. Gosh, it looks so BIG now, compared to this one..."). I remember the day I plugged in my laptop dinosaur and it caught on fire! The people with the highest status, communicated through fancy phones, cool computers, and cars, were the sales people (I know. Gag).

I still lust for a fancy phone, by the way, but I use a 20 euro Nokia (which I bought with my own money when I opened my business), partly because, when I decided I wanted to create wealth, rather than just get by,  I started to track my spending. I mean every penny. I still do. It forced me to really look at where my money was going (beer and entertainment). Did you ever read the Millionaire Next Door? That's what made me decide I would rather be a rich girl with a crappy car (mine, all mine) than a fancy person with no bank in the bank.

While still at that job, I decided to try to live (with my husband) on just one salary and sock the other away into savings. That meant no eating out, walks with friends instead of dinner, and shoe polish and black magic marker instead of new shoes. 

It turned out to be easier than I thought, we became great cooks, and more outdoorsy, and pretty much no one noticed...until I told a colleague that we were living on one salary. He got angry and accused me of making more money than him. Which made his fancy phone seem like just a way to keep him quiet while I was making the big bucks...