ScriptBunny Journal II

[Gilberto de Piento]

It sounds like you are in a negative, stressed place right now. A couple of bad months aren't the end of the world and are probably inevitable.

Some of the people that you are comparing yourself to really are living in the bliss of ignorance and, if they're very lucky, may continue to do so. Depending on charity and living paycheck to paycheck doesn't sound very good to me though.

I don't think that getting to FI is ever going to be fun. Achieving FI is definitely a trade off. If you don't have faith that you are going to get to a place you want to be and stay there it's going to be tough to stay motivated. How much are you sacrificing? Maybe you are pushing too hard.

What happened to your old journal?

[sky]

The paradox of financial security is that if you don't want to worry about financial problems, you have to pay attention to the details of accounting.

Is there some type of personal development that you could begin that you could focus your energy on? Something that intrigues you such as reading and researching something, fitness or social engagement?

Focusing on "not spending money" is tiresome. But there are many creative and interesting things that you can do without spending money.

[Chris]

Being on the path to FI does not equal worrying about FI. I find it is less about expending a lot of concern about hitting a goal and more about developing a way of life that will eventually bring you to FI. Once you've changed your attitude, pared down recurring spending, and come up with an investment plan, working toward FI is almost passive. Then you can give yourself the gift of not worrying about money.

[Barlotti]

ScriptBunny, keep your chin up! You're doing great!

Have you read "Your Money or Your Life"? It's given me perspective on what really makes me happy. I feel like YMOYL could buoy your spirits.

By the way, what kind of job do you have?!? I would love to make the amount of money you do, even if for a couple years.

[Chris]

I've considered applying for other positions at other companies, but have felt constrained by this feeling of golden handcuffs. Right now I'm making around 120k per year + benefits but if I switch jobs, there's no way I could command that kind of income. Especially since despite being a CS person, I'm not particularly interested in sys admin or software development. My skill set leans more toward coordinating people, general project management, and data analysis than toward non-stop coding (though I could do that too in a pinch). And for data science stuff, companies tend to favor MS/PhD candidates.

Surely it isn't all that bleak. If you understand CS and live in a big city, you are valuable. Companies need people who "get it" (since many people on the business side don't). I have technical, non-developer friends who took project management gigs at some of the big evil banks in NYC. Those salaries are in your rage. At minimum, your company probably has competitors that need people with similar skills, right?

It's true that there is a preference for grad degrees for data scientists, but that won't exclude you from the field. The job market for tech is tight, which is to your advantage.

If you aren't already, you should consider doing some interviewing. It's good to interview a couple times per year, even if a job change is not imminent, just to see how things are "out there". You may find that things are better than you think. Or that adding one small skill could have a big payoff.

[Tyler9000]

Hi scriptbunny. I enjoy honest journals where you can feel the struggle at times and track the emotional improvement. You're doing great!

You mentioned technology addiction earlier. Man, I've been there. Step one is to delete the work email account from your phone. If you need to check email remotely, force yourself to login to a computer. Next, if there are any apps that are a total time waste reflex (Facebook, angry birds, whatever) delete those as well. The internet is the hardest, but for that it helps to put your phone in another room so you're not using it so reflexively. A work, consider turning off the data connection. Eventually, the phone will start to feel like a Swiss Army knife again and not an extension of your hand.

[Chris]

I've tried crunching the numbers and I've found with 20% down/3.7% interest rate/30 year mortgage plus insurance, taxes, and HOA fees, I'll be coming in just under 2K/month for a 450K condo in our area. Which at first seems bad but of this, around 550/month would be going to equity and around 300/month I could get back at the end of the year as mortgage interest deduction.

Be careful with that math; the mortgage interest tax deduction evaporates over time (as the annual interest paid shrinks). You might not keep the condo until the end of the mortgage term, but if you are, it's something to consider.

[Barlotti]

RE buying a condo
I don't think it's crazy to think about buying a condo. There are some rules-of-thumb that you can follow if you're worried about overextending yourself:
1. The mortgage amount should not be more than twice your gross annual income. This one's from "The millionaire next door".
2. Limit your monthly payment to 25% of your take home pay. This one comes from Dave Ramsey.
3. Spend no more than 25% to 50% of your monthly take home pay on all housing expenses. This one comes via word of mouth.
4. And here's one I devised for myself. My total monthly housing expenses should not be more than the monthly rent I could collect from a tenant.

I think it's important to consider what's really important to you. For me, not being tied down to the Boston metro area was really important, so I found something I could sell or rent quickly. Also, it was really important to me that I not end up being house rich and cash poor. It was also important to me that I could handle my entire housing cost by myself (without relying on roommates or family members).

At some point, my dad pitched this shady deal to me. He felt strongly that I should buy bigger and more by co-investing with him, because he'd never seen such low interest rates in his life. I am so, SO glad I refused the offer. I could have ended up in a real financial pickle, after years of stressful interactions with my father who is untrustworthy and volatile.

[George the original one]

Having watched the market for some time now, I'm becoming increasingly convinced that I'll be damn lucky if I can find anything less than $500K. Hell $550K even. I've resolved to stick to my budget ($450K) but, god damn, housing prices here are ridiculous.

In that high of a price range, most localities have significant property taxes. Do your homework and learn how much you can expect to be paying for property tax in 5 years and 10 years so you can properly budget for it.

For instance... in the Portland (Oregon) area, that price tag is going to bring an annual tax bill of $6000-7000. It will likely go up by 3% per year, more if new taxes are proposed for special projects.

[Chris]

In 2015 I hope to:

• travel alone -- probably to NYC

...

I kind of want a Scary Big Thing to motivate me, but I don't know what it is yet.

Could your traveling alone be a Scary Big Thing (or maybe a Scary Small Thing?). If the alone part doesn't scare you, maybe change the location to some place unfamiliar or (seemingly) unwelcoming. Shreveport, LA or example. Or drop yourself in the wilderness and escape, Survivorman-style. Do something scary, but not life-threatening. You know better than I what kind of traveler you are.

But if you do end up in NYC, post to the Meetups section. There's a collection of us around.

[George the original one]

Stripping out wallpaper is probably more difficult to do right than the painting is. If you're paying the painters to do their work, make sure they're responsible for final prep.

[Chris]

I'll also be planning a trip to Croatia with a friend this summer ... should be relatively inexpensive with exception to the cost of flights (not sure how to deal with that since we'll be going in peak season).

I fly over to the Balkans a couple of times per year. Yes, peak season will be higher. If you're flexible and willing to put up with some hassle, you can save some money. Here are some things I looks at when flight planning:

• Always search using the "flexible days" option. Some carriers don't fly every day, and the difference between a Thursday and a Friday can be hundreds of dollars.
• Use points or miles. The nice thing about award tickets is that the redemption amounts stay constant throughout the year (though availability may be limited). You should be able to cover most of your ticket using points/miles gained with a credit card sign-on bonus. For example, this CSP promo would net you 54k points convertible 1:1 to miles or $675 travel cash. If you're looking at an airline credit card, search their current award availability first to see if it will work for you. For example AA doesn't offer award flights to Belgrade, so I don't carry their card.
• Fly a low-cost carrier such as Norwegian or WOW Air. They might fly at odd times on odd days, but you can find cheap flights. Unlike the major carriers, they don't penalize you for one-way fares. So one option is to fly one direction on a low-cost carrier and then book a one-way with miles for the other.
• One extra trick for Norwegian: if you have a credit card (CSP, Capital One) that doesn't charge a foreign currency transaction fee, you can save maybe 10% booking through norwegian.no instead of norwegian.com.
• Find a cheap flight to Europe, then fly short-haul to Croatia on a low-cost carrier. Since you won't be taking a direct flight anyway, it might work out that you save money taking a different carrier for your intra-European flight. Try matching that with a cheaper transatlantic flight. Hit the Wikipedia page for the airport of your final destination, then work backward. So for Dubrovnik, you might try finding deals from the US to AMS, FCO, or MXP. Use Kayak's Explore function to get a sense of which big airports are cheaper for you.

Hope some of this unsolicited advice helps!

[IlliniDave]

Net Worth 322,748.18

Still waiting on contractor bids from my neighbor for exterior work but that will mean a net worth hit Aug or Sept.

Depending on the nature of the work this might not truly be a net worth "hit". If it were something you would need to do to sell the house for the amount you have been valuing it at then it's addressing an inaccuracy in prior NW calculations. Otherwise, if it is something that improves/adds value to the house then at minimum a chunk of it will be offset by the increase in value.

Bond yields are indeed low. If you anticipate "anemic" stock returns (which would come with the full risk of owning stocks), even a low mortgage interest rate can look relatively large. I admit I'm debt averse by nature and so biased, but I'd consider at least using some of the now free income to start chipping away at that a little faster. For the reasons you point out, the expected opportunity cost of prepaying is at as much of an all-time low as the mortgage rates. Investing the money and paying the loan on schedule isn't a by any means a *bad* approach either.

[jennypenny]

Your trip sounds great. A family member saw Dubrovnik last year and raved about it.

[jacob]

We have a retrofit---I figured it would be worth it to have it installed when we replaced the ancient furnace (which was actually a retrofit on a coal-fired convention furnace: we had an octopus in the basement).

The AC retrofit kinda works but it's certainly not as efficient. (This is okay, because we don't use it very much.) The [old] vents are near the floor which means that the cold A/C air comes up near the floor and then run over the floor into the return duct which are in the floor. It would be more effective if the AC vents were near the ceiling. Our top floor has no return ducts at all unless you count the stairway as one giant return duct. In that case, on the top floor, cold air comes out near the floor from where it runs straight down the stairs and into the living room. Consequentially, the second floor is about 5F warmer than the 1st floor.

[jacob]

Most of our AC use is actually from a mobile unit (or like a window sized AC on wheels you can roll around... it vents with a hose to the window) in our bedroom that runs in dehumidifier mode when we sleep. The central AC just serves to cap the worst for maybe 30 days per year. Not sure, it makes sense to compare temps only. I find humidity to be a far bigger issue for my comfort levels (yet another reason why I'll never move to Florida). Bad is 90F and 40% humidity, or 85F and 50%, like today, for example. The A/C hasn't run yet, but if it gets much worse than this, it'll trigger. In CA, I would often wear jeans in 95F w/o problems, but the humidity was 3%. Wet bulb temperature is very important.

May and Sep (+/- 1 month) sees our lowest energy usage (no AC, no furnace). That's about 100kWh/month (so that must be all our electronics). We pay about $10/100kWh and about $15 in fixed taxes and hookup fees. During the worst months, we go from 100kWh to 300kWh, so our summer (and winter: the fan that drives the forced air heating) electric bill is about $40-45 ... whereas spring and fall it's about $25.

We do a lot of obvious things to minimize usage. We run fans in the rooms we're in. We have double-hung windows and open them at night---unfortunately, the air is kinda squirrelly here, so we can't use them like intended. If it's colder outside, I've rigged a wood platform to put a box fan on to draw cold air inside.

[anomie]

Hello:

I am affected by SAD every year when ...

When we moved northward to the northish midwest, where there is less sunlight than the southern us I was accustomed to, I experienced SAD for several years in the winter. We were finally diagnosed with Vitamin D deficiency (they now have a test for that...). The SAD cleared right up.. Vitamin D rocks for me!

best wishes..

[Chris]

On an unrelated note I have gotten into churning again. Unfortunately I don't qualify for the CSR

Too bad; looks like a good deal (for your situation). Got hit with Chase's 5/24 rule?

With the CSP usually having a 50k sign-up bonus, I don't think the 100k bonus on the CSR will be a rarity. You should be able to snag it eventually.

[Barlotti]

Hey Scriptbunny, good for you for your GOTV efforts! I volunteered in the Cambridge Hillary field office on election day. Maybe we crossed paths! By the way, what does "2/1 condo" mean?

[Barlotti]

Impressive Scriptbunny!
I'm getting some good ideas from your journal.