Monday, April 07, 2008

The Check is in the Mail; or, What to Do With an Honorarium

Because of a lovely speaking gig in the Midwest last week, I find myself in possession of an honorarium this week. Furthermore, because I won a prize in March for my article on Miss Mary Hoover (it was the Audre Lorde prize, given by the Committee for Lesbian and Gay History, an AHA affiliate), I was in possession of another, smaller, check. But it was a check all the same, one that was not only unexpected, but really a bonus, since who ever expects to make any money on an academic article? Much less win a prize, so that now the "awards and fellowships" section of my vita actually has an award on it? Last, but not least, I expect George Bush to send me a very large check later this month, most of which will go to pay my bloated Shoreline property taxes in June, but there will still be some left over. What do you do in such a situation of excess, dear? I mean, after buying a flat screen TV so that our nephews no longer mock us because we are still happy with a twelve-inch Trinitron?

Well, I always start by saying: "Thank you." Thank you Goddess, for my good health, and the job that allows me to write rather than drive to six colleges every week to teach twelve courses a semester; and thanks to those of you who took the time to judge the Audre Lorde prize and give it to me. Thanks to the journalthat published Miss Thing after two journals rejected her. Thanks to the Director of Women's Studies at Little Midwestern College, one of the many unsung heroes of higher education who, this spring, spent a lot of time arranging my visit when she could have been doing her own writing. Thank you fate, not just for getting me a nice job, but one that pays well (my rants against tenure have revealed that many of you out there, of similar rank and accomplishment, make half to two-thirds what I do.) Thank you that I am not being foreclosed on, or paying for chemotherapy with my tax return. Thank you, George W. Bush for not spending every single dime I sent you on outsourcing the war at premium prices.

But now that the thanking is done, here's the question: what to do with the extra money? If I were a graduate student or an adjunct, I would probably buy food. But I have a salary that pretty much takes care of that, plus the utilities and the car insurance. So what to do with windfall profits?

I put them in my Vanguard Roth IRA.

You see, I had one of those old-fashioned fathers, who would not have understood the current world of credit and debt we live in: he had an American Express card, which he paid every month. He is the only person I have ever heard of who paid cash for a house (ok, Tony Soprano did, but my dad was a gastroenterologist.) The idea that you would take a loan on your home to consolidate your credit card bills would have appalled him. And he was the kind of father who said, when I graduated from college, "Just remember: when you get a paycheck, pay yourself first." What this meant was, no matter how little you can save, save it anyway. People like Suze Orman make zillions from giving this kind of advice now. My father wrote a book called A Better Life With Your Ulcer, which, despite the snazzy title, did not make zillions.

Of course, I completely ignored my father's advice for many years, and for the same reason many of you will ignore mine now: during years when I was scrounging under the sofa for pizza money, or even later when the mortgage for our first house in Zenith plus the rent in New York was more or less cleaning me out - like many of you -- I didn't have any money. Then when I did have money, I started amping up my TIAA-CREF (word to the wise: do not even open your TIAA-CREF statements for a few years. It's bad right now.) But a few years back, I found myself in possession of a chunk of cash for which there was no earthly use except perhaps to take a ski trip. Instead I bought a Roth IRA. And now, whenever I get a royalty check (always small), or a speaking fee (bigger, but not as large as Bill Clinton's), or any other unexpected windfall, I send it off to Vanguard, on the theory that $100 saved today will grow exponentially by the time a take it out at age 70. Why do I recommend this policy? Because even with the instability of the current market, I am over $7,000 ahead of my original investment after only five years of this personal savings plan. By my calculations, and adding a social security payment of a little more than two large after age 67, that is an extra three months of retirement at my current after tax budget.

And actually, Vanguard shares have only dropped four dollars over the past year, so it's really ok to open the envelope.



In other news, I am pleased to say that I have been invited -- and have accepted the invitation -- to join Cliopatra, a group history blog hosted by George Mason's History News Network. Don't read it yet? Well, if you snooze, you lose, that's all I can say. Stay tuned.

10 comments:

Historiann said...

I would have suggested donating it to the Berks! Congratulations on the article prize.

Historiann.com

Dolce Vita said...

Don't put all your checks in the Roth basket just yet. The "rebate" you're expecting is just linguistic cover for a "tax advance" - which we'll all get to pay this time next year. I prefer to think of it as a (painful) little going-away present from GW.

Susan said...

Well, with Historiann, I can think of great causes to contribute to. But I too believe in savings. I started a Roth and put money in every month. I call it my long term care insurance, on the grounds that if I were to take out long term care insurance, this is about what I'd pay for it. And if I don't need it, I have the cash.

vuboq said...

Whenever I get a few extra dollars, I like to put it in my Roth IRA as well! Some people might want to consider the socially responsible Pax World Funds. The returns may not be quite as high, but I like that they don't invest in certain types of companies.

dance said...

The one thing I regret is not setting up small monthly contributions to an IRA during grad school. Of course, I'm out now, and still haven't done it. Still regretting it, but I don't think that counts.

Inspired! Off to make my contribution for 2007!

John Poole said...

You really need a lot of new rowing clothes. I would have suggested that, but since you already invested the money, oh well.... ;-)

PiggyBankBlues said...

congrats on your prize, and that was a great post!

you did the right thing. and if you do feel the inclination to open those tiaa-cref statements, just take a peek at the number of shares you're quickly accumulating (because they're so damn cheap right now!), and ignore the dollar amount. it's easier on the eyes...

Tim Lacy said...

I hope your Cliopatria efforts won't subtract from the fun and thoughtful person that is TR? - TL

Anonymous said...

Start the Tenured Radical memorial scholarship: $100 scholarships for 1-2 students in need of "book money."

Pay it forward, you radical.

Macon D said...

Congrats on this, a more appropriate award, methinks, and for this very post!

http://strategicfailure.blogspot.com/2008/04/counter-revolutionary-friday.html