Phayen's Journal

[Phayen]

So I had my interview on Friday and it went pretty well. Apparently I'm far enough in the process where we discussed comp and signing bonuses etc.. If I switched I'd get about a 15K raise post taxes. Which is substantial. About a 30% raise in take home. This would bump my theoretical savings rate from 38% to 52%. This is a conservative estimate as well, bonuses are probably higher and I didn't include the one time signing bonus (paid over 3 years), the relocation bonus (would probably use on actually relocating) or the increase in 401(k) match. Some expenses would be higher, gas, car (would no longer get company vehicle), housing. But those increases would be marginal compared to the increase in pay.
Going forward the increases and bonuses would both more with the new opportunity. Both in pay and in promotions. There are some drawbacks though. I'd have to move. Have to make new friends. Have to find a new place to live. Would have to work more (currently do 40, but really work about 30. would go up to 50 or so). Financially, seems like a no brainer. Realistically, I think its still a no brainer. I guess change is just hard and its something we'll have to get over.
Thanks Dragline for the advice and Livinlite for letting me know its not just me
We'll see how the real offer comes out and I'll keep everyone up to date.

[secretwealth]

As someone who has moved a lot, let me suggest that you don't worry too much about making new friends, a new place to live, etc. Moving is a lot easier than most people assume IMO. Also, you should be able to move close enough to work that you can walk or cycle to work.
A 52% savings rate should help you get to FI really quickly, plus if you are moving to a cheap enough locale, your savings rate may go up even further.

[Phayen]

So interesting bit of news to report today. My company called a town hall meeting to give us some news. There will in fact be layoffs this coming year. On top of layoffs, there will be no bonuses for the next two years. But they will be offering voluntary incentive packages for people who choose to leave.
I guess this pretty much makes my decision for me. I did get some good news yesterday in that the HR rep from my future company let me know the interviews went well with good feedback and asked for references to contact. So we'll see where we go from here. If I do get an offer, I'll probably have to take it. Hopefully I can double dip into whatever offer my current employer has for voluntary leaving.
I don't think I could stay at my current position. Long term, I don't think we'll be around. And if we are, it'll be because someone purchased us and there would be more people eliminated.
So I actually feel much better about everything and looks like it'll be better than expected.
Secretwealth: Thanks for the encouragment on moving. It's been almost a decade since I moved to where I am now. Where I'd be going is slightly more expensive, but we could move into a smaller rental and save some money that way.
It's going to be an interesting March!

[Dragline]

The job meeting sounds like an "Office Space" experience.
Good luck with your next steps and keep us posted.

[Phayen]

Okay, first update. I received more information regarding the jobs status at my current employer (CE). CE is offering a buyout of almost $30K, but I'd have to work through 6/15-6/30 ish timeline. Prospective employer (PE) is offering a starting incentive of about $36K as well as a raise of about 20%. They want me to start around 4/16-4/30. My new goal is to get these timelines to meet somehow.
CE won't confirm if my buyout is accepted until 4/30, so ideally I'd be able to get both companies to meet in the middle around 5/15. Just not sure how flexible everyone can be. PE will want me to start ASAP and CE needs me to stay on to train replacements through 6/30. I talked with PE today and they said the latest they could possibly do is 4/30, so looks like I'd have to give up the buyout option.
Does anyone have any suggestions? Or ideas of what I should do? Is it worth saying "no" to PE? Is it worth passing up the buyout?

[Phayen]

Alright, done is done. I've accepted the new position! It'll be a good move for my family and a return to where I grew up. Also, my savings rate should notch up quite a bit. Lots to do in the interim though. Need to fix up my current condo so its ready for rental. Need to find a rental management company. Need to pack up. Need to get full usage and reimbursement from FSA and Wellness company funds. Excited to be moving on to something new and better!

[ExpatERE]

Congrats on taking the leap to the new job. Wish you the best as you start the new position and return home. Sounds exciting.

[Phayen]

So March was crazy. April's looking to be about the same.
I accepted new job. My current job was terrible and unfulfilling. They also announced layoffs. My new position is with a huge fortune 100 tech company. And I'll be doing more interesting work, but in the same field. I'm really excited to work with real professionals again. Pay is going to be better (10% better) and I'll get about $5K incentive up front and $10k/year for the next 3 years.
Timing could be better, could be worse too. Due to quitting, I took advantage of the FSA loophole and had LASIK done. Now I have a negative 1500 balance. I was in the middle of a refinance unfortunately. Not sure how that will affect it. It should be completed before my last day at the current employer, but hopefully it works out. Would lower our mortgage from 5.125 to 3.875 percent and save us $150/month.
With the new job though, I'm going to be relocating. Sad face. Especially since we put a lot of work into our condo. At least we'll be able to rent it out fairly easily and slightly profitably.
April is going to be weird. Need to do some small renovations to the condo to get it ready for renting out. Need to find a rental property management company to look out for it. Need to figure out if we're going to actually get a 2nd vehicle. Need to find a place to live. I should have a lot of extra income. Signing bonuses. Tax refunds. Vacation payout from current employer. Reimbursement from LASIK. But a lot of extra expesnes. Mortgage and Rent payments. Renovation costs.
I just want things to calm down.

[Phayen]

Why hello there forum. It's been a while. Huge month of changes. So here we go:
Basics. My expenses were way less than anticipated. We ended up not doing the renovations we planned on. Instead, I did a lot of it myself and opted not to do quite a few things. I was also able to use a lot of old gift cards so my out of pocket was minimal. Income was way more than normal. DW had $2k income from the 1st qtr. Tax refunds of $2.5K. Relocation bonus of $2k. I had my vacation payout from my previous employer. In a nutshell, my savings % was 78. An all time high. Prior year % was 32%. This year is trending to be 48%. The job change has a lot to do with it, but so does a lot of our personal choices during the change.

Some wins:

With the job 60 miles away from our condo, it makes the transition difficult. Part of my reloc package was temporary housing, but we still only had one car. Instead of buying a car, I opted to rent a car for 3 weeks (only $318). This gives me a lot more flexibility going forward. More time to research if I needed to buy a car or not as well as gave us time to find a proper home to live in that is close to work (3 miles so I don't have to get a car). This will save us countless dollars as well as give me some more exercise.

With our condo, we're opting to rent it out. Saving us $12k in selling costs. We're also opting to do a lot of the renovating ourselves, saving us another $7K as well as gaining a lot of skills. (although sleepless nights ).

To Dos:

Need to get a property management company in line to take control of our property (already in discussion)

Finish the move (new employer is paying for movers/packers, almost non-issue)

Continue on with our basic expenses as we've been doing. May have an increase in our utilities (rent doesn't cover any, promotion period on internet is over), auto might go up a little bit on average as we have a longer drive to see the in laws. Might start to get rental income starting 6/1, it will barely pay for all the costs. So probably a net zero cash flow wise, but if we count equity and tax loss it's still a net benefit. Plus the non-selling savings shown above.
May should be interesting too. Might not have as high as a savings % as normal. Have to pay 1st month's rent and security deposit, but I'll also get a little bit more pay than normal (signing bonus). We'll be settling into the new place and finishing getting our old place ready to rent.
I'll try to keep posting here monthly to keep myself on track and to keep all of you updated.

[LiquidSapphire]

Nice updates. Consider taking some photos prior to move in, or a home video, to preserve your security deposit. I know it's one extra thing to do but it just takes 5 minutes and it could save you a lot of headache later on.
Since you're moving anyway, maybe check out the other internet companies to see if they are running any promotions? Or have your wife sign up with the same internet company for the same promotion again?
Good luck with everything - sounds stressful but it will eventually calm down soon. Congratulations on the new job

[Phayen]

Thanks LS. Yeah, its stressful, but almost all of it results in positive changes. And on the internet, that's our exact plan having the DW sign up under her name this time. I'll do a walkthrough of the place. That's a great piece of advice.

[Phayen]

Alright, so May was just as hectic as anticipated. Savings % is still just shy of 40%. High expenses and high income in May. Income due to signing bonus and 3 paychecks. Expenses due to paying for our no longer empty rental.
I've biked to work most days in May. That's going well and preventing/delaying us from getting a second car. Its 3 miles, but those 3 miles home after working 12 hours is a pain in the butt. More and more thinking about buying a scooter for $3K and beoing done with it. The biking is making me also workout at the gym at work and then shower. So overall its probably good for me health wise just as much as financially. I plan to continue this as long as possible.
We just got our old condo rented out as of June 1 so that'll be a big relief financially for us. It cost us a bunch of money to get it ready to go, but seems like it paid off. Excluding equity we'll only have a positive cash flow of $50-100/month. We knew this going into it, but it beats selling it and paying seller fees 6%. With equity and the tax deduction we'll get its probably a solid net win. We'll see how it goes through the year. We're using a property managment company but they seem easy to work with and charge us 6%.
We spent $900 on food last month. Out of control. Double the normal. A lot of this is because we were in transition almost the whole month. So no making food at home. That costs us about $200 extra (lots of value in making food at home). We also joined a CSA. its a 2 month trial, but all $150 hit in May. This number will come down in June as I start to bring lunch to work and we eat at home more often.
Work is going well. Had a week of 12-15 hour days, but that deadline is over so back to normal. I still feel like it was a good change of pace for me career and life wise. I have my RSU's in an investment account I can see now, but the vest dates are so far away I try not to look at it. (I don't count it in my net worth). Should also be getting a raise and a fairly substantial bonus in November. (also so far away).
Getting to the point where our net worth number is increasing slowly again. Won't have a lot of room to cut costs going forward either. We'll be focusing more on the income side for the rest of the year. After that I guess its just waiting.
Just another 18 years to go.

[George the original one]

Reviewing your original post of a year ago to where you are today, it looks very promising going forward!

[Phayen]

Thanks George. I just went through my journal to get some perspective. I make about 14% more and my expenses have fallen about 18% from a year ago. Not too bad for some year over year analysis. However, that's mostly cause I wasn't trying at all back then. So its good to see that the low hanging fruit makes a big impact.
The biking to work is good and bad. Had a rought night with our 18 month old being unable to sleep. Already being super tired I didn't want to bike to work in the cold and wind. I did, and did my workout before work too. Don't feel good about it. Summer is still upcoming so the morning weather should be a bit better going forward, but hard to keept his going indefinitely.

[pooablo]

Hey Phayen,
Great post. I am glad to see you are making good progress. Wealth-building is all a matter of awareness and consciousness. It's amazing how things change once you start tracking things.
As for your real estate property, the cash flow will improve with time as your mortgage payments decrease. As long as it cash flows positively, you'll be fine. Imagine having 100 houses with $50 of positively cash flow each month. You could be retired by then!
It's good that you are using a property management firm too. That should save you time and energy to focus on your increasing your income at work and cutting your expenses at home.
Keep up the good work!

[Phayen]

Saved 32% in June. That's including the loss on the rental unit for June. Next month it should be squeak into a profit and every month after that should net about $150. Most of my gains this month were from the stock market though. I noticed my net worth has increased 20% this year already. 5% from RE, 5% from a cash position and 10% in retirement funds. So we're shaping up pretty good on a year to date basis.
I continue to bike to work. I did buy a nice bag for my bike rack. I needed something safe to bring my work laptop in and $60 is a small investment. It's also quicker to attach to the bike than using bungie cords. We're still eating out a lot. This is mostly due to our kitchen being covered in boxes still. We're whittling the boxes away and this weekend I'll be able to build some new open shelving for storage and work space. It'll be much more livable. Other than that, still on auto pilot for 18 more years. Sigh. Need start moving cash into taxable investments. Thinking of moving $1K over each month and buying the cheapest asset class of PP (which has been working fairly well for me 8 months in. Gold is down but everything else is up). Between credit cards and $10k operating cash, I see little reason to put $40K in an online bank earning .7%. Good plan?
A question for anyone still reading this.
1) I'm renting a SFR and pay all the utilities. What are my true obligations to keep the grass going? It doesn't rain here ever and I'm afraid to see the water bill. I only water the grass on the weekend, and do the front by hand and the back with a sprinkler. The grass is still dying though as it's not enough. I'm thinking about investing in making my own above ground sprinkler system (more for fun) to keep the grass green, but not sure if it's worth the cost (which it might be, as I'd be able to take it with me, and I'd learn some). Plus I'd get my time back. Should I keep watering?

[Phayen]

So July came and went pretty quickly. Savings rate was 16%, mostly due to buying $1K worth of tires for DW's car. Net worth is still going up faster than anticipated. Its funny to see it go up by my monthly income on a monthly basis. Ie, my NW has gone up $27K, but I've only "saved" $15K. Last year I saved $15K and my NW only went up $12K. Starting to appreciate having money working for you instead of working for your money. Also, pleased to note I've saved more in 7 months this year than I did all of last year. I guess that's one of the perks of keeping track of what's going on.
I did end up starting a taxable account. I did this instead of paying extra principal on our rental property's mortgage. I feel like this will give us a better asset allocation as I have more NW in Real Estate than I do in securities. Might not be the best approach, but it's more liquid and I like the flexibility of managing my own funds.
Still bike to work. Down right easy now to bike to/from work. Every month I bike, I figure I save approx $300 (Car/Gas/Insurance). At some point, it won't be worth it. It is for now though.
Long Term though it's still kind of a struggle. I know I"ll be working for a long time, and trying to cope with that. I don't mind the work, but wouldn't mind more time with my family/less stress. My goal is to retire at 45 (in 18 years), and I'm on pace for about 20 years till retirement. This is assuming no windfalls and no unexpected catastrophes. Also this is assuming no wage growth or expense growth. This is a conservative approach, as I know I'll be getting raises and bonuses even in poor economic times as my company still makes money. But I also know I'll be having more children and buy a house at some point where we are now (probably 4 years from now).
Sorry, this kind of just rambled on now. But I only really review this once a month and this is really the only forum I have to talk about it. DW doesn't mind the cutbacks, but she's not too concerned with the future. "Normal" people at work are cut throat and want to work forever. Its good to know ERE people exist, but it'd be better to find some in real life.

[Phayen]

Okay, so August is keeping pace for the year. 47% savings rate which is the best of the year bringing my average to 34%. 3% away from my goal of 37% for the year. (Last year was 28%, so already marked improvement). Food spending is still kind of high, but overall we're getting the hang of things in our new house/city. We're proud of ourselves to maintain s large increase in year over year savings percentages even with a lot of one time expenses hitting (LASIK/Car Tires/Rental Deposit/Fixing up Condo for rental/Moving). If we can reach our goal of 37%, next year is to reach 42%. Should be able to achieve this through normal cost cuts (less social eating at work, less trips to visit in-laws). And that 42% is with an international trip for our family and having another child (expenses baked in).
I find as I get more and more routine about saving large percentages of our income, its more about the future than the present. I focus a lot of my spare time now on my family and investing in preparation for becoming FI. I'm almost fully allocated to the PP in my self directed accounts. This seems to be working out okay. Not sure what else really to do from here going forward other than just keep working and try to spend less. I'm 27, married with 1 child and another on the way though, so I'm forecasting another 15-18 years of work. I figure our "number" at $1.4M. 1/7 of the way there.
I do get inspired by all the other journals out there. Mostly single people meeting their goals in 5 years or so. Makes me envious. Somewhat out of the goal reaching being so much earlier and somewhat that those people must see much more progress every month.
I've been on this ERE journey for 1 year and 5 months. NW has gone up from $150K to $195K. Funny to think that comes out to almost $3k/month in savings (which is huge relative to after tax income). The last 8 months has been closer to $4k/month which shows some progress. My timeframe above includes no market adjustments (or raises/windfalls, etc..), so my time to retirement is overstated. In fact, I started out with 135 years to retirement. At the end of last year I had only 75 to go. So knocked 60 years off in 9 months. In the last 8 months I've gone from 56 years to 18 years, so almost 40 years there too. Trending out the curve flattens as gains by cutting are harder to achieve (yet have the highest impact).

[GPMagnus]

@ Phayen Kudos on a great job! I think your time to ERE will shorten considerably given two facts: first, your income is likely to increase somewhat over time as you gain more experience; second, your wife may decide to find work or create income from home once your kids are in school.

[Phayen]

Thanks Magnus! I agree with your assessment. DW is planning on working after the kids go to school (approx 5-6 years). Not sure what she'll do, but will probably be more for her getting out of the house/socializing than for income. Income won't hurt though . And my income continues to increase. My base pay has gone up 10% over the last 17 months. That's inclusive of a job change, so that rate will probably slow down to 2-4% per year.