A little background on me:
- 28 year old male.
- Live in the midwest.
- Studied engineering at a university and work in manufacturing.
My goal right now is to hit FI around before 40, and to retire around 45.
I Graduated with about $20k student loans, making $50k per year. I'd planned to live below my means. Over time I sort of forgot about that, or became complacent because I was putting more into my 401k than most people. I didn't focus very hard on my finances, and I had spurts of spending a lot of money on things (bicycles, cameras, TV/computers, and a new car!)
Before I get started with the months I'll share some old values I just dug up. I have been emailing my brother monthly reports so far this year. I will paste in those reports to get started and share the progress I've made this year.
I apologize in advance for my writing. I'm often not as clear as I should be, and I have a tendency to be long-winded. I'll be trying to improve.
Looking back through my computer files, I think around January 2008 I noticed I had strayed too far from my plans to live below my means. I had a file starting at that point tracking my debts and progress paying them off.
JANUARY 2008 DEBTS:
Car loan - $8,700
College Loans - $14,600
Credit Card #1 - $2,800
Credit Card #2 - $3,500
Total - $29,600
I had bought a new car just 6 months out of college. I think I knew at the time that I shouldn't be doing it, but I did anyways. But I think what really made me uncomfortable was the high amount of credit cart debt. I wasn't just treading water with minimum payments or anything. I lived in a very cheap apartment and I could pay them off pretty quickly when I tried. But I'd end up buying some other expensive stuff with them later on.
For the next year I made some progress, but I also bought some major things:
- Vacation to California to visit friends ($ ? )
- A new and very nice bicycle ($4,200)
- A new TV and surround sound system ($1,700)
- A used PowerMac and a new monitor ($1,200?)
- I also moved for work and with the relocation package I came out ahead by a few thousand.
JANUARY 2009 DEBTS:
Car loan - $4,945
School loan - $12,473
Credit Card #1 - $1,900
Total - $19,300
I can't find records for 2010. I know I was keeping track of stuff closely that year but I've lost the file. In November 2010 I made a full budget/tracking file and started keeping track of things pretty well.
Debt owed: ($4,400)
Checking account: $3,000
1 - Save $10,000 for an Emergency Fund. In a savings account or something else I can access quickly. Finish by the end of July. (Currently - $0)
2 - Save $10,000 towards a house down payment. Finish by the end of the year. (Currently - $0)
3 - Reduce my monthly rent and transportation expenses by at least $350. I will most likely move to the small town where I work or somewhere nearby. My current rent and gas cost is $1,000 per month. So my goal here is to get it down to $650/mo. My stretch target is to get it down to $500.
4 - Home 5S / Simplify Possessions / Minimalism. Right now I am going through my stuff and cleaning out things that I don't need or don't ever use. I'm selling what I can and donating the rest. One reason to do this, and why I need to do it now, is so I have less stuff and can move into a smaller apartment.
I will keep my 401k contribution at or over 6%. This is what’s needed to get the full 4% company match.
This report includes data from November 2010 through January 2011
Income - $3,792 regular plus $2,121 from selling old bike
Expenses - $3,278 (included $1,900 for new bike)
Saved - $2,500
Savings % - 72% (not counting sales as income)
I’m hoping I can get these charts linked correctly. Each image will link to a larger, readable version
Monthly details - income, spending, saving, net worth, etc..
The lines are broken up into color coded groups:
Grey - income
Blue - spending
Green - savings / interest
Purple - Total
Red - Values for net worth
Grey (botom) - retirement progress / outlook
Since this is the first time I’m posting the spending amounts in the categories, here is the breakdown of what each category includes, along with the January values:
- Rent ($840) (I live by myself in a nice apartment)
- Electricity ($102)
- Other Home Expenses (cleaning supplies,etc..) ($12)
- Grocery and restaurant food ($201)
- Booze ($0)
- Internet service ($63)
- Cell phone. An iphone with data and texts ($75)
- Netflix streaming ($9)
- Other / Books ($13)
- Cycling equipment, race entry fees, etc.
(this does not include incremental transportation and food costs due to cycling, those just go into their normal categories) ($1,888)
- Gas ($109)
- Maintenance ($0)
- Insurance ($0). This is ~300 per year or a bit less
Anything that won’t fit in any other category ($0)
- Pie chart showing my total expenses by category for the last 3 months
- Pie chart showing normal income (after 401k and tax), and extra income from selling stuff
- Stacked time series chart showing monthly spending and saving
- Bar chart with monthly spending, estimated investment income, and FI ratio of invest income divided by expenses
- Pareto chart of average monthly expenses by category
- Bar chart showing progress vs yearly savings goals
Bicycling sales and cost
In January I sold a bike that I no longer used. My expectation is that this money will pay for a good portion of my bicycle racing expenses for this year. Bicycle racing is my main hobby. I race competitively at an amateur. I spend a lot of time training (riding), and I expect to race about 40 times this year. This can be a fairly expensive hobby. High-end equipment is expensive, and the race entry fees and transportation costs can add up. I do belong to a team that has sponsors, and the team pays for many of my race entry fees.
So I sold the old bike for $2,000, though I did spend nearly that much right off on cycling stuff:
- New frame - $1250. (+$21 for some labor to install the parts I couldn't)
- Supplements - $335 (Vitamins, sports drink, recovery, protein, etc.. they will last me the whole year or most of it)
- Deposit for team clothes - $220 (another 200 or so left to pay)
Most of the costs are one-time or once per year. I'm thinking about upgrading one or a few of the parts on the bike with the new frame, but I'm going to at least wait until I ride it some outside to see what it's like. The other main cycling costs for the year will be wear parts like tires, chains, and gear cassettes. I'm determined to spend less on cycling this year than I have the last few years. (I have receipts but not totals. I’m planning to add it up. it's a lot)
I have one other bike I'm thinking about selling, which would get around $1,500. Then I'd be down to 2 racing bikes and one bike for touring or just transportation.
Simplifying possessions / moving
I keep making progress here and there with cleaning crap out of my apartment. I've went through a lot of places and cleared stuff out and organized what's left. I've went through my clothes and took about 30 shirts and 10 pants that were too big to Goodwill. I also pared down what I keep in my closet and moved the extra clothes in a rubbermaid container that I cleared out recently. I have enough shirts to last me MANY years!
With stuff like dishes, I donated the older non-matching crappy stuff I had and cleared out some of the space in my cupboards. So I now just have enough in there to make up at least one full load of dishes. It's a lot nicer to have my cupboards simpler and have it easy to get things out. It's good not having to dig for certain pots, or to move stuff out of the way to get out the crock pot, or to have to shuffle stuff around when I put it back... Little things like that are nice.
I’m planning to move to the small town where I work. I have a 30+ mile commute each way right now. My lease is through June. I got my apartment management company to list my apartment on their website, and if they get someone new to rent it, they will let me out of my lease and I only have to pay $100. I've started looking a bit for an apartment in the town where I work. I'm pretty sure I can save at least $300 per month in rent, and up to $100 per month in gas. So I can save somewhere around $400/month or up to $550 if I find a really cheap place.
Plans for February:
- Keep sorting / selling stuff that I do not need / prep for moving
- Don’t spend a ton of money on parts for the new bike
- Start learning about investing
Income - $3,860
Expenses - $1,750
Saved - $2,497
Saved $2,000 after-tax, so I'm ahead of my savings plan YTD.
Added a chart of my net worth. I’ve been messing around with the format and changed the stacked time-series of savings/expenses to a bar chart.
I'm ordering some cycling stuff but I won't pay for it until March. It's all stuff that I've been thinking about for a while and holding off on buying. Here's what I'm getting:
- A lighter saddle for my new bike. Getting it through our team sponsorship so it's cheaper than normal. It's $125. I think I can sell the one I'm replacing for $100, so it will come out really cheap.
- A lighter seatpost for the new bike. This one I bought full price. $150. The type of seatpost will work a little better with the new saddle I'm getting, but mostly it's just because the seatpost on the bike now is heavy, and this one is quite a bit lighter.
- Some bar tape. (a consumable)
- A new stationary trainer. I ride a trainer (or a set of rollers that I have) in the winter and often warm up on it for races. The one I had was the cheapest model and it vibrates too much. With our team deal it will cost about $220, and I can sell the old one for $50 or so.
- New shoes. This one is expensive. $265, plus another $20 or so for some cleat hardware. For the last few years I've been using an older model of shoes. They are Nike's, and they stopped making cycling shoes in 2006 or so. The ones I had are just a bit too big, and they are silver, so they clash with the bikes I have now. Last year I found a black pair at a store in Milwaukee ($100 I think, which is very cheap for high-end shoes. they are $200-$500 for new ones). One part of the black pair was starting to come apart. I super glued it, and they'll last the rest of this year, but I need to find a newer model of shoes that work for me.... Cycling shoes must fit really well or they will cause a lot of pain in your feet when you ride for more than an hour or two, so it can take some work and trying different shoes and sizes to get just the right ones. These nikes work perfectly, and I've been checking ebay every once in a while for a long time, but I haven't seen the right pair, so I need to go with something else. These new ones I ordered from an online company that will let you return stuff easily, so if they don't feel right I will send them back. I could've bought last year's models of these for $200, but if I returned them, I would lose money.
So,.. my cycling expenses far:
Sold bike: + $2,000
New Frame: -$1,300
So $375 total expense so far this year.
Moving / Simplifying
I'm definitely going to move to the small town where I work. My apartment management company listed my apartment on their website, but I haven’t heard anything, and no one's come to look at it or anything, so I doubt they will find a new tenant before my lease runs out in June. I don't think I want to screw around with subletting, so if I have to wait until June, then oh well. I've been getting rid of some more crap lately but pretty slowly. I think some of the stuff like old books that I don't want I will just go ahead and donate them somewhere. I would barely make any money selling them so it's not worth the time. These are books that I’ve had on Paperbackswap for a while and no one wanted them so far.
When I move, I'll try to rent a studio/efficiency. This will be the cheapest.
INCOME (After tax) - $12,441
- Three paychecks: $5,658
- Yearly Bonus: $6,357
- Tax Refund: $168
- Sold Stuff: $258
SPENDING - $2,509
- Rent / Home expenses - $942
- Food - $282 (high from when I was in Texas)
- Entertainment - $177 (Cell phone, internet, Netflix)
- Cycling - $531
- Transportation - $127
- Travel - $450 (Airline bike fee, rental car for weekends in Texas)
PUT IN SAVINGS - $10,463
- Emergency Fund - $5,500
- House fund - $3,500
- 401k - $1,463
So it was very nice to get the big bonus and a 3rd paycheck - it was a ton of money coming in. I got my yearly raise, 2.5% this time. It took effect on my last check, so my regular income is up a bit.
I've still been getting rid of junk and making slow continuous progress.
- Living expenses vs potential investment income
- Pareto of average monthly expenses
- Savings vs yearly plan
I think my checking account went up by about $1,000, so I could've put more into savings. It will end up going there next month or later. Emergency fund is done at $10,000. I got more from my bonus than I budgeted for. My savings goal for the year was $20k, but I might be able to get 30.
I went to San Antonio for work for a week, and stayed at my Uncle’s in Houston on the weekends. I took a day of vacation on each side and had 3 day weekends. So that was a pretty cheap little vacation. Costs were just $100 to take the bike on the airplanes, and about $350 for a rental car.
I don’t remember what the cycling expenses were for this month. I think they were for things I described last month (Trainer, clothing, supplements) I have another $550 worth of cycling stuff to pay for in April. Then after that I think my cycling costs will mostly just be the cost of racing. (Which will be about $400 per month for the summer, some of which I’ll get back)
I was doing some future projections. This graph is the result, showing the best possible ER scenario for me.
Assumptions for this:
- Very low expenses
- Move this year and living expenses decrease
- Buy a very cheap house in a few years
- 10% interest on savings while growing
- 5-6% interest on savings in retirement
- 2-3% inflation
- Will get moderate raises
- Sell my touring bike that I never use
- Sell the aluminum frame that I replaced with a better once this year
I totaled up my bike spending over previous years. OUCH!
2005 - $3000 (probably more but don't have all receits)
2006 - ? Pretty low
2007 - ? pretty low
2008 - $8,600
2009 - $8,500
2010 - $9,900
2011 - $840 ($3800 if I don't count selling bike stuff)
I am at a point now where I have 3 bikes that will all last a long time, plenty of tools, quite a bit of clothes, etc... So I should only be incurring costs for maintenance and consumables for the most part.
A little off topic, but you mention racing bikes. And you mention team sponsorship. And you work too? And practice/travel with the team? Amazing. How do you find the time to put in more than the base?
Back on topic, do you feel you could race competitively with less expensive bikes? I realize that in road racing, grams count. But as someone who's lightest bike is over 20lbs, I wonder if they count that much. Or maybe the question should be if you're at the level where they count that much?
@SF - Yeah, I work full time and also do the racing. I race at an amateur level (Cat 3 road if you know what that means). For me to be able to win Cat 3 races I believe I have to spend quite a lot of time training - about 300+ hours per year of riding time, plus more for stretching, yoga/core strength, bike maintenance, tracking training, and travel to races. I don't know what the total hours per year come to but it's probably over 500. I don't have kids, a wife, or even a girlfriend. So for me it is easy to make the time if I have a desire to.
To be competitive in Cat 2, (to be able to win one or a few races/year) I would have to train more. Maybe 400 hours per year. Some people can do very well with less training though. Also you can build up fitness over the years. You don't start from zero each season.
On racing with less expensive bikes... sort of. The weight does make a difference, especially in the wheels (more specifically the rims and tires). Generally a 20 lb bike has heavy wheels. A 5 lb difference in bike weight makes a bigger difference than a 5lb bodyweight difference.
In road racing, the bike weight makes some amount of difference in any race that you are competitive in. In other words, I would probably still be able to hang on in the race and not get dropped by the fields. I would also still be able to have some impact on the race by attacking or helping team mates a bit. But any chance of winning myself would be significantly lower. Racing is at times an energy conservation game. If you're accelerating more bike mass, you're losing out gradually over the whole race.
If I consider the races I won when I was racing in cat 4, I think I would've only had a good chance at winning 1/3 of them on a 20# bike. The one race I've won as a Cat 3, I never would've won it on a 20lb bike.
All this said, you can certainly race with a 20lb bike. My first 2 races were on a bike over 20# and I did ok. In order to win, you just need more fitness than you would need to win on a lighter bike. So your fitness can certainly get good enough to overcome the bike weight in Categories 5, 4, and 3. If I'm going to race more in my current category or better, I wouldn't bother racing on a bike over 20lbs. There are other significant costs for racing as well as safety risks. If I'm going to spend that other money and take the safety risks, I might as well use a the proper tool for racing.
For the 2 racing bikes I currently have, I don't think it would make sense to sell them, buy a cheaper bike, and race on that. If I want to save money, I just won't race any more. (which I have all but decided on for now)
I think what he's really saying is that wheel weight makes a bigger difference than non-wheel weight (see http://en.wikipedia.org/wiki/Unsprung_mass). A heavier bike will generally have heavier wheels. The difference is likely in ride quality more than in acceleration ability.
From an aerodynamics perspective, I wonder if body weight is worse than bike weight. For example, heavier components might not be less aerodynamic, but heavier people could be (if they are wider).
Bigato - What dragoncar said. The reason that is true is mainly because a heavier bike tends to have heavier wheels. There was a guy back in the 40's or 50's that won the Tour de France a couple times. He believed that having weight off the bike worked better. When he started to go up a big climb, he would take his water bottle out of the bottle holder on his bike and put it in his jersey pocket. He knew this gave him an advantage compared to leaving it on the bike.
In reality, the only advantage this gave him is the confidence that what he was doing helped. There is no advantage to use a backpack instead of panniers. At least, it won't make you go any faster because the weight is on you instead of the bike. It might make you a little faster because it's more aerodynamic that way, but this is a very small difference. The comfort of using panniers is worth more than the very small aero improvement.
Dragon - yeah, the reason I said that is because of the rotating mass. You are correct that having a lower bodyweight for a given person translates into being more aerodynamic. You're also right about heavier bike components generally not being less aerodynamic - except for wheels. If we're talking cheap wheels like those that will be on a 20lb bike, they are probably also less aerodynamic than racing wheels which are very light.
Once you're comparing one type of racing wheels to another (say, 20mm deep wheels that weigh 1,200gm compared to 60mm deep wheels that weight 1,500gm), there are weight/aero tradeoffs. Each wheel set performs better in certain situations. (the lighter is better for climbing, or when you are always drafting and often accelerating/braking. The more aero wheel is better for flatter riding when you will not be drafting as much, and will not be changing speeds as much.
The difference between heavy and light wheels, though, is all in acceleration and resistance at speed. (not in ride quality - that depends on other things).
INCOME - Normal - $3,867 (after 401k and tax)
INCOME - Extra - $1,317
SPENDING - $2,877
SAVED - 401k - $765
SAVED - Post-tax - $2,500
(I'm not including my extra income in the savings rate denominator. This is because the money is from selling stuff that I bought before. I don't include those sales in my income number because in the long run, the money I'm getting back from the sales came from my income so counting it now would sort of be double counting)
So the main thing for me in April was I moved to the small town where I work. I was thinking it would take me a while to find a place that I liked well enough between rent price, how nice it is, and how close it is to work. The second place I looked at was good enough, so I went with it. I had originally been hoping to find a place I could bring my cats, but I think in a small town like this, that will significantly limit my options, so I didn't worry about that. The new apartment building is less than 1 mile from work, so I'm walking. It's awesome! My old commute was a bit over 30 miles. It was nearly all highway, so it was 35 minutes each way in good weather. Many days in the winter it took an hour each way. Now I have a 5 minute walk.
My old lease lasted through June, but I didn’t want to wait until then to move because I will be very busy with races. My lease starts in May but they let me move in now. So with 2 rent payments and a deposit, my rent/home costs are more this month, but they will be down substantially starting in July. Now I just need to find someone to adopt my cats. I think since these cats are purebread it will be easy to find people who want them with craigslist and/or facebook.
Here is a financial analysis of the move:
The my new internet service is actually $16 per month. Moving will cost me around $1,000 in total, most of it double rent. Compared to not moving, I’ll reduce my expenses by $3k this year, or $8k per year after that. The before and after savings #'s are just estimations for the example.
EXPENSES THAT WERE HIGH:
$840 rent at old apartment
$500 security deposit at new apartment (first month rent is free so don't have to pay May rent)
$20 for new apartment credit check fee. My score was 830
$111 to rent a cargo van for a day
$120 to pay a guy to help move
Gas - $216 (normally around 160) High from moving
Food - $364 (would normally be around $250 or $300 right now). Also high from moving. Somehow I convinced myself it was ok to eat stuff like McDonalds or Chipotle since I was busy moving
Touring bike - $1,000. I should have asked for more.
Extra frame - $300 (I replaced this with the new $1,200 one)
Old Saddle - $90 (I replaced this with the $126 one I got at team discount)
I still have a few other things to try to sell. A table and chairs I had on my old balcony, a few small cycling things, and maybe my big couch. I could probably also get some money for my cats and all the stuff I have to go with them.
I have a goal for the rest of this year to learn a lot about investing so I know what to do with my savings. Right now I'm not putting much money in the 401k because of the early withdrawal penalties and unfamiliarity with 72(t) rules (plus uncertainty that it will exist in 15 years)
@SF - I've noticed / thought about some things a little bit more (in relation to your question)
Since I've decided to stop racing, I do feel some weight lifted off my shoulders. The racing and preparation was taking a lot of my creative energy. I think I'll do better at work because I've noticed myself thinking about work while I am not there. Whereas before I spent a lot of time at work thinking about racing.
Paid rent only for the old apartment (first month free in new place). In June I’ll have rent for both, and then in July it will be just the new one.
Food was really high ($390). I think that was mostly from eating expensive food now to be in good shape for racing. It was also a bit high from buying food while traveling to 4 days of races in Iowa over Memorial Day weekend. Cycling costs were fairly high ($724). This was some racing costs and also I bought about a year's worth of supplements - vitamins and drinks and stuff.
I only saved $1,000 (after tax) this month. I think I could've saved another $700 or so. With two rents coming right at the start of the month I just put less into savings this month to make sure I didn't get low in my checking account.
Not too eventful of a month.
So for June I will have a lot of bike races, including a ten-day series. The entry fees for the series will be paid for by the team so my extra expenses will be gas for driving to the races.
Home Expenses - $1,395 - High from paying rent at both apartments. Last month of this and then it’s party time!
Food - $424 - Wow! I’ve been buying expensive food. I also ate out a few times during the big bike race series. I also stopped at gas stations on the way home from races to get snacks.
Cycling - $3 - I raced a lot this month, including a 10-day series. But for the series I didn’t have to pay entry fees. Though I’ll have to pay part of them in July once the team sorts stuff out. The total is low this month because I got back prize money from the first half of the season.
Transportation - $238 - High from driving to all the races.
Saved - 401K - $512
Saved - After tax - $2,500
Looking at this last chart, I'm not too happy with how high my expenses have been lately. But I guess there are ~good reasons for it...
I was thinking that the bike racing was a big reason they are so high, but my cycling category is $4,000 so far, and I made nearly that much from selling bikes. Though many of my other categories that are high like food and transportation are because of cycling also..
June has the double rent. So it would have otherwise been $840 less, or like $1,200 for the month. So I do expect my expenses to go down nicely starting in July. This will cause an instant increase in that FI ratio percentage.
On that same chart I also added a table in the bottom right corner with some Financial Independence numbers. The numbers are based off my average expenses since I started tracking them in November 2010.
I have been doing a bit of reading and learning about investing. I have a lot more to learn but I am considering making some substantial changes to my investment selections in my 401k. I currently have 100% of my money in a pretty aggressive mix of stock mutual funds. More to come on this in the next few months....
I also need to consider what I'm doing with the after-tax money I've been saving this year. I'll have $30k by the end of the year. I’m considering $10k of it an emergency fund, and the rest house savings. But I don't know how soon I would be buying a house. If this apartment works out well, I may just stay here the next time I move for work. But who knows, that could be a long while from now, so I should maybe be investing that money conservatively (maybe a little less conservative than the <1% money market its in now)
I'm thinking about racing cyclocross this year. It's quite a bit different than the road racing I currently do. It's kind of half way in-between road and mountain. I would have to buy a bike for it, and different shoes, and maybe a bit of clothes. If I do this, I'd want to do so as cheaply as possible, so I've started watching craigslist and asking people I know about where to buy a cheap bike.. we'll see how it goes.... Our team president is working on a deal with a bike manufacturer, so I might be able to get a cheap bike through that.
I'm not certain how much I would like it, so I'd want to make sure I don't blow significant money. At times this year I've been questioning if I really want to keep doing the racing. My concerns are the cost and the chance of injury from crashing. Cyclocross might be a little bit safer - it’s less likely that I’d crash due to other people, or also a crash is less likely to result in severe injury since it’s mostly on grass and dirt.
I don't think these can all be made in Google Docs.
I tried uploading the file, but it seems Google does not convert numbers files to their spreadsheet formats (it only works as file storage when you upload a numbers file). I saved the file as an excel file and tried uploading that, but for some reason there was always an error when I tried to upload it. I might play around with Google Docs some time to see which of the graphs can be made in there. I'm used to making a lot of different graphs, but it does get hard remembering how to do stuff in Numbers or Google when I use three different programs (the other being Excel, which I am the most familiar with from work)
I increased my 401k contribution this month. I'm gambling that 72(t) or some other way to get the money penalty-free will work out for me.
Savings rate: 79%
I had a pretty good month. For home expenses, this was the first month that I only had rent in the new place ($500). I also got $250 of my deposit back from the old apartment. I spent a ton on food, which includes a lot of fast food. I'm expecting to spend less in August. Up through July, I had been eating the same exact thing for about 7 months (plain chicken and vegetables) and I got tired of it. So I'm going to switch back to what I was eating a lot last winter (a mixture of beans, lentils, chicken or sausage, rice, some vegetables, salsa. It ends up kind of like Jambalaya when I use the sausage and salsa). So that is something different to eat, plus it’s pretty cheap.
Entertainment was a little higher than normal because I bought 4 books for my Kindle, a computer game (Civilization 5), and a PS3 game (Fallout New Vegas). For Cycling I had some costs of stuff that happened in June (race fee's, and some new clothes), plus a bit for regular maintenance parts.
So it was a pretty good month really. It's good to see the move paying off. You can see the impact on my monthly spending and FI ratio:
Also note in the Net Worth graph that I added in my work pension value. I never had this on before. I was looking at work retirement stuff and reviewed some Pension information. It seems like they changed how it works within the last couple years. Before, you would use a formula to calculate how much money you can get when you retire. You just do this math with how many years you work and your age and your highest salary, and it spits out a monthly figure. But now when I go look at it, they show a specific value, $19,300, that is supposedly mine. The pension is fully vested, and from the short explanations I've read, that means that they owe me the money, and my employment ends tomorrow, they have to give me that $19,300. So I added that to my net worth total. I was surprised how much they are putting in there - over $5,000 this year, which comes to 7% of my salary. I estimated how much the value would've been for all the months before July, so it shows up on the net worth graph like it was always in there.
So I kind if like seeing the bottom chart in the picture above that shows years to FI. The thing that stands out to me is how big the swings are when comparing months that I save different amounts. Getting my spending consistently low will make a big difference!
Next month I think I will show a before/after comparison of the move. I’ll have a Pareto that shows how the related expenses have changed.
So I've been learning about investing lately. I have a lot to learn. I’ve taken a liking to the Permanent Portfolio. I moved my 401k money into PRPFX. I was hoping to build a PP myself but the ETFs I initially wanted to use (VTI,TLT,SHY,IAU) are not available through my work’s mutual fund options. I think it’s just because they are ETFs and I can only use mutual funds. I do have to pay an extra fee of 0.34% to use the mutual fund window (this is on top of the fund’s 0.8x% expense ratio). So I’m paying a lot, but I’m much more comfortable with this than the 100% stock mutual fund portfolio I had before.
I do need to investigate my options more to try to build my own PP. I think I could have the E.R. down to about 0.2%, which would make the total around 0.5-0.6% instead of the 1.1% I have now. Also I think I prefer the straight 4x25 allocation over PRPFX’s.
If you're unfamiliar with the Permanent Portfolio, here is some info:
Podcasts by the guy who came up with it (Harry Browne):
Forum about it: http://www.crawlingroad.com/finance/harrybrowne/radio/
Mad Money machine blog/podcast: http://madmoneymachine.com/
One thing that Harry Browne’s book and podcast has helped me a lot is how clear he makes it that the future cannot be known. So much investment advice depends upon speculating what will happen in the future. It helps me a lot to accept that I nor anyone else can know what will happen.
- I won a race. Yay!
- Don't feel like racing a lot more this year
- Definitely not trying cyclo-cross this year
TOTAL PAY - $4,730
TOTAL SAVED - $3,644
SAVINGS - 77%
After tax pay: $3,086
401k Contribution: $1,644
Home Expenses - $664
Food - $170
Entertainment - $271
Cycling - $137
Transportation - $205
Other - $0
Saved, After tax - $2,000
Transportation included 6 months of car insurance, $162. Gas was down to $40 from a pre-move level of about $160.
Entertainment included 3 PS3 games ($38) and a used stereo receiver ($100).
I’m going to try to get my expenses below $1,000 for at least one or two months this year. With my current expenses, it’s possible, but it’ll take some focus.
Avg Expenses. Spending Vs Saving:
Net Worth. FI Chart.
Avg Expenses. Savings. Years left.
The chart below has a pareto of my expenses. They are not actual numbers but it was easier to use some averages to illustrate. They’re close. The full bars are my expenses before the move. The one’s that reduced have their new values shown in blue. They have an average total monthly expense of $2,220 reduced to $1,660. (a $560, or 25% reduction)
On the other big costs - the $500 per month cycling cost will go down substantially without racing. Maybe to an average of $100 per month or less. Food will probably go down a bit also. To maybe $200 per month. I could have it lower but I want to eat a lot of fruit and vegetables.
I know that It is possible for me to have months below $1,000 expenses (while keeping my current avoidable recurring costs). It would only happen in November this year thought. For September I have already made a trip to Nebraska to visit family (and friends). In October my friends will be coming here and I’ll be spending some for that. December I will probably travel to see family for X-mas. So that only leaves November for this year. The first few months of 2012 will be opportunities.
I think I’ve gotten my fill of bicycle racing and I’ve decided to stop. I may still race a few times next year depending on whether I feel like it and if I’m still in good enough shape. Maybe I’ll get serious about again in the future. For now I will definitely will not be dedicating such a huge amount of my time to training.
After making this decision, I’ve actually felt at times like I’ve removed a burden. I now have a lot more flexibility with my time and my mental ‘energy’. I think I will perform better at work - I now find myself thinking about work stuff outside of work. Previously it was the other way around - I would think about bike racing while at work.
Some of that physical and creative energy I was devoting to training/racing, I expect I will now devote to more productive things. And for some, I will try to take on other hobbies that are more economical.
I think I had been gradually coming to this decision over the course of the year. My 2 main concerns were safety and the cost. But maybe a turning point was during that 10-day series in June that I was performing poorly. Between some races I stayed with a teammate. He seems to put a lot of thought behind his actions and opinions, and I often listen closely to what he has to say. We were talking about bike racing and he mentioned what everyone knows but either doesn’t care to think about or just doesn’t bring up - that bicycle racing is a very unproductive hobby.
-- You can’t make any money doing it. It can be pretty expensive
-- You don’t really improve yourself much, or the world in any way by doing it (other than maybe helping to make other people happy.. but the impact is very low compared to effort)
-- It can be very dangerous. It you’re racing frequently, you’re likely to crash a couple times each season. Most of the time you’ll avoid any injury, but you could get a serious injury such as concussions, broken bones, etc. One of my team mates crashed over a year ago and has not completely recovered (and might never). When my brother visited and came to a race, he mentioned afterwords that every guy on my team had scars on the arms/legs from crashing.
The good side of bike racing is that it encourages/requires you to be very healthy and fit. It is also a lot of fun. Winning is great - better than sex, drugs, etc.
Basically, I don’t get enough enjoyment out of it anymore to make it worth all the work. So it’s on to other things now.
I started this thread to get some new ideas:
I went back "home" - to the state I grew up in mostly and spent about 11 years before moving to where I live now. This was the first time going back since moving up here. I'll discuss it more in another post, but in short, the trip made me realize that for the last few years my life here has been pretty out of balance. I haven't made friends or had any significant relationships here. As comfortable as I may have felt with this, I think I've been missing out on some very important parts of life. I need to make some significant changes on this.