10 Questions With Best Interest

Today’s edition of 10 Questions features Jesse from Best Interest. Jesse is a pretty interesting person. He lives on Hoth (almost) and has a pretty cool job. Regarding the latter, he’s a space engineer and I’m extremely biased in favor of all things related to starts, rockets, telescopes, etc. Take it away Jesse!

Hello! I’m Jesse Cramer from the Best Interest.

A huge thanks to Mr. 1500 for this cool interview. Your great questions have coaxed answers that cover Ben Franklin, space telescopes, index funds, and the Adirondack Mountains–pretty diverse, right?! Let’s dig right in

There are approximately 476,492,292,928 personal finance blogs last time I checked. Why should we read yours?

The Best Interest is all about education. Plus it’s funny. The blog itself was founded by Ben Franklin when he opined, “An investment in knowledge pays the best interest.” 

I talk about investment interest, I want to invest in your knowledge, and I have your best interests in mind. I think that’s a triple entendre?! BOOM!

I cover money basics, investing & retirement, and sprinkle in some personal philosophy (like my interest in death… just hear me out!!)

Both my parents were teachers, and I think I inherited a strong ability to communicate, educate, and write. I pride myself on that level of clarity. 

The personal finance industry is sometimes intentionally murky, such that scheming characters can take advantage of others’ ignorance for their own gain. Every Friday, my goal is to de-murk the murky.    

What is part of your blog that you wish you could do better?

Writing with the goal of education is awesome. I love it. That part is fun, rewarding, and—other than the sheer time commitment—easy. 

I pawed through the darkness when learning about WordPress and some of the “back end” tasks that come with running a website. That was challenging, but manageable.

But the part that I wish I could do better is getting my writing in front of more eyeballs. I’m sure 99.9% of the blogosphere is giving me the “no sh**, Sherlock” eye-roll right now. We all want to get our writing in front of more eyeballs.

That said, my loyal readership is awesome. I routinely write posts specific to a single interaction or question that I had with a reader. When someone sees that you’ve spent 2000 words to answer their question, you’ve just earned a loyal fan. That, in turn, motivates other readers to chime in and let me know what they’re thinking. It’s a virtuous cycle.

Where do you live? Do you love it, hate it or just meh.

I live Rochester, NY– home of Susan B. Anthony and Frederick Douglass. 

Many people would say that Rochester is past its prime. Kodak, Xerox, Bausch & Lomb—our once “blue chip” manufacturing core is gone or greatly diminished. But like many cyclical systems, there are peaks and valleys. 

After some tough years in the 2000’s, we’re now a city on the upswing. We have world-class universities, new and cool technology companies (especially in the field of optics), and our ace in the sleeve—Wegmans. It’s a grocery store that the rest of the country is convinced is a cult.

It’s one of the most beautiful cities in the US. But for the other 10 months of the year, it’s a cloudy and snowy hellscape. Similar to Hoth.

I love living in Rochester. There’s always something fun to do—we have annual world-class festivals dedicated to lilacs, jazz, the Erie Canal, arts and crafts, different cultures, grapes, and “being weird”–I’m not kidding. There’s prime access to outdoor spaces, including the “Emerald Necklace” parks system designed by Frederick Law Olmstead. As long as you can deal with some cold and snow, there’s nothing to dislike.

Do you rent or own? What are your thoughts on home ownership?

I bought a little Cape Cod style house in the spring of 2018. I’m still paying off the mortgage, which I hope to have completed in ~10 years. It’s all we need for two people and some foster dogs!

From an upkeep and maintenance point of view, the effort is about what I expected. Knock on wood, I haven’t had any major issues yet.

From a financial point-of-view, it made sense for me. The Rochester housing market has a low gross rent multiplier. For those unfamiliar, the GRM is a simple fraction: Value of Property / Annual Gross Rent. A low GRM tends to signal that buying is better than renting.

The age old “Rent vs. Buy” question has been answered a million times online. I point people to the NerdWallet calculator (it’s what I used), and suggest they think honestly about how many years they plan on staying in that location.

What do you do for a living?

I’m a mechanical engineer. My co-workers and I design, assemble, and test satellite telescope systems—think NASA. Specifically, I do thermal analysis. What’s that mean? I’m doing to diverge from finance for a sec…if you want to learn about telescopes from a space engineer, read on in this section.

First, space is a weird place, especially from a thermal point of view. There’s no atmosphere to moderate your temperature. If sunlight is hitting you, you got really hot, really fast. But if the sun isn’t hitting you—perhaps because you’re in the Earth’s shadow—then you get really cold. The Hubble Telescope, for example, goes through 15 of these hot/cold cycles per day.

And going through these thermal cycles, here we have the telescope. A telescope is basically a set of mirrors and lenses that focus light in an extremely precise way. Well, we all know what happens as materials get hot and cold—they expand and contract. So if the mirrors and lenses are constantly expanding, contracting, moving towards or away from one another…well, we’re going to be going in and out of focus all the time. The telescope is no longer going to be focusing light in that extremely precise way. And just like your iPhone camera, a lack of focus leads to a bad image.

Temperature change –> mirrors/lenses move –> lose focus –> bad picture

There are many ways we address this issue, but I concentrate on keeping temperatures as stable as possible. One method: we use insulation and heaters. So I’m basically working in HVAC. 

Is your goal financial independence? If so, where are you on the journey?

I don’t have any specific FI or FIRE goals. I don’t have a retirement date in mind. I’m not trying to reach a certain threshold of money saved. I don’t know how much I’ll spend in retirement.

That said, I’m saving at a pretty decent FIRE rate. I’m focused on flexibility. As we’ve all heard, our young years are prime time for investing, saving, etc. It simply allows compounding more time to work its wonder.

So I ask myself: would I rather spend $100 now, or see how that $100 grows over the next 20-50 years? Based on some fairly average market returns, a 20-year investment might grow by a factor of 4, and a 50-year investment by a factor of 30. That’s impressive. If I don’t need the $100 now, I’d rather invest in my flexibility down the road.

Evil genies aside, what is your investing strategy? Stocks? Index funds?? Real estate??? Crypto????

I’m a big fan of the work of Burton Malkiel and Jack Bogle. These two were among the earliest advocates for index investing.

But not all indexes are created equal, and owning indexes within a few different asset classes provides the diversification that any long-term, low-risk investor is looking for. So I spread my investing funds across four different index funds: a large-cap US fund, a small/mid-cap US fund, an international fund, and a bond fund. The Bogleheads–essentially Jack Bogle’s fan club–call this a “Lazy Portfolio.” 

There are different flavors of Lazy Portfolios, and some people would suggest that my choice of investing in bonds and international stocks is incorrect. They’d prefer that I invest fully in US stocks instead. But, for my risk stance, I think a small ownership in bonds and international stocks is prudent. To each their own. 

What is your favorite money management tool? (Yes, you can include your affiliate link.)  Do you track your spending? If so, how?

The answer to both these questions in YNAB. 

I’ve used YNAB since 2016, but I used it incorrectly for a couple years. I would only track about 90% of my expenses, and I’d routinely make impulse purchases without first ensuring I had earmarked money for those purchases. Not good…

But in November 2018, I got serious about it. I started with a clean slate and began to budget and track every single expense. I went all of 2019 with complete financial knowledge. I’d budget at the beginning of the month, save for long term expenses, track all my purchases, and regularly reconcile my accounts to make sure everything was in check. I tracked everything.

Talk about a breath of fresh air. I now feel like I’m completely in control. I know where my money is going, and I know how to plan. I know my month behind, my month ahead, my net worth over time. It’s great.  

Are you familiar with Peter Drucker’s most famous quote? You cannot manage what you do not measure. I feel like I’m 100% measured, and now my personal finance is 100% manageable. 

What is the worst thing you ever bought? 

Here’s another story that influenced me to write, and eventually became a blog post in itself. 

When I first bought my house, I looked into buying a hot tub. Living through Rochester’s winters, a hot tub is a pretty nice luxury to have. But going into my meeting with a salesman, I hadn’t done my homework. I hadn’t thought about a plan, a price limit…any of the important questions. I just wanted to explore my options.

An hour and a hard sell later, I signed my name on the dotted line. D’oh!

Now, the hot tub is great. But when I think about it from a cost-per-use perspective…I certainly don’t feel the same desire now that I felt before I bought it. If I could do it differently—like buy a smaller tub—I would. 

Ideal vacation: road trip, beach, mountains, forest or city?

A good portion of my “luxury expense” money goes to camping and hiking gear. I love the outdoors, the woods, the mountains. The Adirondack Park in upstate New York is probably my favorite place to travel to. There are hundreds of beautiful mountains and cool camping sites. With a good pair of boots and sturdy tent (okay, and a few more items), one can go just about anywhere. Go explore. Get “lost” somewhere. 

Elon Musk: Crazy megalomaniac or a brilliant guy who is changing the world?

I think Elon is a brilliant guy. I’ve heard him speak on a few different topics, and he clearly has a strong depth of knowledge across a few different areas of science and technology.  I envy his vision and his ability to “just go for it.” Entrepreneurship is a huge risk. Sure, it helps to have a safety net–large personal wealth. But spotlighting your potential failures into the public sphere is a hard thing to do. Kudos, Elon.

The fact that SpaceX is landing their rockets is mind-boggling. Once in a while I just pull up those landing videos as a reminder of some of the amazing things that people in my industry are doing. 

Is he an ideal business executive? Ha! No, he’s not. I’m sure Wall Street and his investors wish he was more even-keeled in the public eye and less cavalier with his Twitter. That doesn’t make him crazy? I don’t think so.

I think the same traits that lead to a cavalier Twitter lead to groundbreaking technology. It’s the same set of traits that are changing the world. If his ego is too big and he runs his mouth too much–fair enough, that’s not great. But I wouldn’t throw the baby out with the bathwater.

Thanks for your great answers Jesse! Find more of him:

• Blog: Best Interest
• Twitter: https://twitter.com/BestInterest_JC