fuyu's journal

[fuyu]

Background:

I currently work at a small public accounting firm in NYC. I'm turning 24 next month. I’m starting to feel lost and aimless on what I’m supposed to do next. I miss the period of time when I only had to plan out what classes I was taking next semester.

I started reading the ERE blog and book last year. It took me awhile to finish reading the book and I had to reread some parts for me to absorb the information. While listening to the recent podcast this week, I realize I missed the point of ERE (or at least I think I did). I’ve been so focused on minimizing my expenses and looking forward to not wasting 2 hours commuting each day that I haven’t though about what I will do once I get to FI (currently estimated to be reached in 7 years).

I’m open to any suggestions to improve my budget (see below) and any other advice. Before, I though it was reasonable to spend 300-400 a month on food and I couldn’t fathom the idea that it was possible to spend less, seeing how much other people spent on groceries in the forum helped me a lot.

Some numbers…

[1taskaday]

I have nothing constructive to say to add to your numbers and charts.

Except that I'm very impressed (almost in awe) of your meticulous planning at such a young age.

You’re obviously in the correct occupation for you.

Feeling a bit "lost and aimless" in your early twenties after college is normal, but look at the amazing goal you have set yourself!

The trick is to let the "frugal" way of life just seep in to your own way of life, until the time comes that you do not even have to really think much about or track finances. They just carry on in the background.

I think Jacob spoke about this in his recent podcast.

It just happens this way over time. In the beginning there is "work" and effort over your decisions and quenching impulses but after a while everything just happens naturally.

Best of luck.

[stand@desk]

Excellent spreadsheet! Keep up the heavy lifting (saving and investing). It looks like you are making rapid progress and that has to be very encouraging.

[fuyu]

A few more numbers.






@1taskaday: Thank you =) I add stuff to my spreadsheets whenever I’m bored at work and have nothing to do, which is very very often during the summer.

Thank you for your kind words. I keep waffling between thinking I should stay at my current job and reach FI sooner or find a job I enjoy more that has a lower salary.

I hope I get to that point eventually. There are some small things I do frugally without thinking about, like stocking up on toiletry whenever it’s on sale. But there are so many more things where I slip if I don’t think about the end goal. My mom used to say frequently that I don’t understand the value of money.

@stand@desk: Thank you, the rest of the year will be much slower since I usually only earn overtime during busy season.

[ashe]

Hi, I really like your method of keeping track with your summary spreadsheet and reconciliation "unknown" line. That's the difference between a trained accountant and an engineer. Your rent vs. buy method is nicely thought out, depending on asset price appreciation/urban growth you will also get a quite different result over 15-30 years. Also your last chart is pretty cool, I have something similar to that, at the start I was also tracking meticulously like you but over time I reduced the categories to just 4. You're doing really well with expenses, especially for a young person in NYC! You're really gonna go places

[fuyu]

@Ashe: I wasted 3 hours going through my bank statements and sharebuilder transactions trying to figure out the unknown amount before giving up ^^;;. Thank you for pointing that out. I haven’t though much about buying a house other than a few simple assumptions to give myself an idea of how much longer I would need to work to have a house.

Most of my cousins bought their house in their mid 20’s and my friends from college have already started looking at houses, so this seems like something I should do as an adult. I would be happy to rent forever though and avoid all the extra work that comes with owning a house.

Opps, I only work in NYC. My rent and other expenses would be much higher if I wanted to live there. And I don’t want to pay NYC income tax.

[fuyu]

Journal Entry #002



Super happy that I finally spent under $1,000 this month. I changed my federal withholding allowance from 2 to 3 so August salary is a little higher than previous month. If I don’t change the federal withholding allowance back to 2 in September, I’ll have to pay $169 in taxes due for salary instead of getting back $119 in tax refund when I file my tax returns in 2015. Not sure which is better.

---



It feels a little bit surreal that my unrealized capital gain and dividend income ($4,227.74) was higher than take-home salary ($3,832.66). Hope Apple doesn’t plummet in September.

Reimbursable is mostly CPA costs incurred last year and reimbursed in January of this year.

Other is credit card sign up bonuses, 1.5% cash back, and swagbucks.

---



Apple is such a huge percentage because when I first started buying stocks, I wasn’t sure what to buy. I though it was better to do something and not leave the amount in my savings account for another 6 months, so I used almost all of my savings to buy AAPL stocks. I haven’t bought anymore and I sold all of the AAPL stock that was in my IRA accounts and left only the ones in the taxable accounts. The % by cost basis is slowly going down over time.

---

Below is a pie chart of my spending for restaurants as of August 31.



In the short-term, I think the easiest way to decrease my expenses is to stop getting takeout whenever I don’t feel like cooking. Its so illogical to pay for something I don’t even enjoy that much ><. And as a nonfinancial goal, I want to be able to cook 3-4 dishes and soup every dinner one day. Since May, I’ve started trying one new recipe each week, so hopefully I’ll reach this goal before or by the time I’m 30.

[fips]

Good to see a fellow auditor - and nice charts by the way.

I'm wondering - in 2012 you accounted for GMAT and CPA exam costs.

What did you need the GMAT for? The way I read your journal (maybe I have missed something) you are done studying and now full time employed with small public accounting firm.

And how does becoming a CPA in the US works? Like how much work experience do you need, what are the exams like and how much does it cost in total?

Keep up the good work!

[fuyu]

Each state has its own requirements for becoming a CPA. In general, most states require a total of 150 credits, a certain number of credits in accounting and business classes, passing the four part CPA exam, and 1 to 2 year of accounting experience under the supervision of a CPA.

I graduated with 120 credits in 2011, so I needed 30 more credits to get my CPA license. (Normally, accounting students who are planning on becoming a licensed CPA would choose to either graduate with 150 credits in 4 years or get a masters in accounting or taxation to meet the 150 credit requirement afterwards. I wanted to finish college as soon as possible, so I crammed 120 credits, which is the minimum credit requirement for graduating, into 3 years.) Then in 2012, I wasn’t sure if I wanted to get the remaining credits just taking random college classes or getting a Masters in Taxation, so I took the GMAT in order to apply to graduate schools.

Cost as in CPA exam fees or something else? Every state has different registration and application fees for the CPA exam. If you click on any state here (http://nasba.org/exams/cpaexam/), they show the exam fees for that state. The actual CPA exam fees for 2014 are:

Auditing and Attestation (AUD) $192.03
Business Environment and Concepts (BEC) $172.51
Financial Accounting and Reporting (FAR) $192.03
Regulation (REG) $172.51

Usually, public accounting firms will reimburse and/or give a bonus for passing the CPA exam.

Below are the total costs it took for me to get my license

2008-2011: Tuition and other costs related to bachelor degree in accounting (not including textbooks) = $93,812.00 (paid by grandparents)
2011 CPA exam fees and related fees = $1,044.50 (paid by parents and was reimbursed by firm after passing)
2011 governmental accounting class to meet CPA exam requirement = $389.00 (paid by parents)
2012 CPA exam fees and related fees including extra fees from rescheduling exams = $362.50 (paid by me and was reimbursed by firm after passing)
2013 random additional classes to meet 150 credit requirement, net of $500 reduction in tax liability for education deduction = $5,028.46 (paid by me)
2013 CPA license fee = $60.00 (paid by me and was reimbursed by firm later after becoming licensed)

Total = $100,333.96

Sorry if this was too long and/or disorganized. Is there anything I’m missing? Is the process different in Germany?

* Blue font is edited for clarity

[fips]

Wow, thanks for your detailed account on the CPA-related expenses.

In brief, this is how it works in Germany:

Work experience:
After your Bachelor's degree (in a related field: accounting, law etc.), you need at least three years of work experience to sign up for the exam.
After a Master's degree, it's two years of full time work experience under the supervision of a CPA/accounting firm.
These are the two most common ways, but there are others as well.

Costs:
After your Bachelor's/Master's (which costs however much you like them to cost ..), the usual costs include:
- 3 months of leave of absence or taking a 4/5 job for one year for preparation
- 1k to 5k for preparation courses
- 3,5k sign up fee for the exam

Hidden costs:
Only around 50% pass the exam their first time. So you can take the above 2x.
All this hassle leads to the fact that only 41 out of 14,591 CPAs are below the age of 31.
So it basically takes forever and costs a lot of money to become a CPA in Germany.

How were you able to rid yourself of the 100k costs of 2008-2011 so quickly?
In 2012 you were positive again at 26k - that's a 120k turnaround for someone who just started working!

[fuyu]

@scriptbunny: Thank you =). I eat mostly rice or noodles with vegetables, whatever fruit is in season and/or on sale, eggs, soy products, wood ear mushroom, and a small amount (less than 5%) of seafood, meat, and cheese. I buy one junk food every 2-3 month and 1-2 microwavable food each month.

I live in New Jersey, so 2/3rd of the groceries I buy are from Aldi’s or the farmer’s market because its more convenient. If I lived in NYC, I think the amount I spend on groceries would go down, especially for Asian vegetables?

@fips: Oh, wow that sounds much more intense than US requirements. What is a 4/5 job? If you were seriously studying for the US CPA exam and started studying right after graduating college, it would take about 5 weeks to finish studying and pass. Most of the CPA exam material is covered in undergraduate accounting classes. The cumulative pass rates for the US CPA exam in 2014 were 46.01 % (FAR) to 55.94% (BEC), but if you read blogs like another71.com, part of the reason for the low pass rates is because people are distracted by other things when they’re studying or because they didn’t start studying until years after they graduated.

It wasn't anything I did. The $93,812.00 was paid by grandparents. Before they passed away, they gave my mom money for their grandchildren’s college costs and told my mom’s brother to pay the rest if that amount wasn't enough. So, when I was applying to colleges, I didn't pay attention to the tuition and other costs. I really regret not planning it out better. If I had, it would have only cost about $20,000 to $36,000 (not including cost of textbooks).

The $1,044.50 and $389.00 in 2011 were paid by parents before I started working full time. I tried paying them back, but they wouldn't accept it.

[fips]

Fuyu, thanks again for your answer!

Sorry, I didn't mean to intrude into family matters. Having seen only the numbers I was just in awe how you managed to turn around so quickly ( .. as you know, detecting inconsistencies is part of our profession ).

4/5th job for me referrs to working (and getting paid) for only four days a week.
As the CPA exam around here is somewhat tough to pass, most people either take off right before the exam for 3-4 months or they try to prepare themselves long-term, like taking one day off every week for one year in advance.

However, I just found out that some colleagues negotiated 11/12th contracts (working and getting paid for 11 out of 12 months every year). They get off in August (when we don't have the typical busy season, of course) .. that's like one more month of free time plus your usual holidays (respectively 11/12th thereof) ... sounds like viable option for the future

[fuyu]

No problem, not intruding at all. Most of my friends’ parents or grandparents paid for their undergraduate tuition, so I didn’t include it before. Guessing that’s not typical?

That sounds like a great option! Once I reach FI, I’m planning on either doing part-time bookkeeping or seasonal tax preparation to slowly transition from working full time.

[fuyu]

Journal Entry #003

Time left until FI at the end of May assuming 3.5% withdrawal rate: 4 years, 2 months

Two months until I'm 25. I feel like I wasted most of the year doing the same things I did last year. For next remaining two months, tiny non financial goals are to be able to walk up to the 13th floor at work without losing breath, find an exercise class I like and go twice a week, and learn to make Chinese New Year cake. And figure out a better reason for why I want to stop working once I reach FI that would be acceptable by brother and friends.

Below is my year to date income and spending



- Accounting salary tax refund/(due): I always worry that I'll be let go after busy season, with chances of it occurring being highest on April 16th and slowly decreasing until end of September. So, I adjusted my withholding allowance so that if I was let go, I wouldn't have to wait until filing my tax return in 2016 to get the overwithheld tax amount back, assuming I don’t start a new job afterward.

- Seasonal part-time, net of tax: Before busy season started, I applied for an online scoring job for state standardized tests, just in case I didn't have a job after April 16th. Its expected to be about 8 weeks.

Best part: Very easy, mindless, online work that pays $12 per hour for scoring and $10.10 per hour for training. They require a bachelor degree to apply, but even an elementary student would be able to do this.

Worst parts: Extremely glitch website and kind of sad that the majority of students get 0 for most of the questions and seem to have no idea how to answer the questions

[fuyu]

I wish I had followed through with my plan to quit in the first week of December instead of thinking it would be worth it to stay one more busy season. I didn’t like my job with its myriad of annoyances then, but work was definitely tolerable when I wasn’t sleep deprived and only working 40 hours per week. I see my coworkers looking less and less healthy each week, and my salary (or any amount of money) doesn’t seem worth it.

I’m trying to convince myself that it’s only temporary and that based on previous years, once I go back to getting enough sleep and only working 40 hours, work will go back to being tolerable. But, then I see another firm-wide email about yet another change that will have to be applied to all of the audits. Usually the partners tell us the new changes that need to be made for the next year’s audits 1-2 months before busy season starts, but this year they’re sending an email every 2-3 days about changes that need to be made. On top of the changes that were mentioned in November and December. There are other things, but I feel disproportionately irritated every time I see those emails. I don't know why.

Maybe the problem is with me and not my job? I changed from thinking, yes there things I dislike about work, but it’s worth it to continue working here for my salary and other benefits, to it’s not worth it because I don’t need this job. I have 16 years of living expenses saved up and I could stretch it to 22 years if I continued my online, seasonal job. And there are thousands of other jobs out there that I could apply to, and some of them will better than this one. I usually have an irrational fear of my being fired, but right now that would be the best possible thing.

[Eureka]

I like your way of reasoning and think you should quit the job. If all the money you have already saved does not give you the freedom to walk out the door, I think it has very little value.

[fuyu]

@Eureka: Thanks, it felt nice to hear from someone that it’s okay to quit =).

Work doesn’t seem so bad today after I sort of had 10 hours of sleep. I don’t remember which year it started, but during busy season, I’ll wake up a few times each night to start to thinking about unresolved items from work or have dreams about a monstrous excel file that has an error that I can’t figure out and I become more and more stress, until I finally wake up. I’ve gotten better at going back to sleep this year by reminding myself that I can quit tomorrow morning if I wanted.

I talked with my brother yesterday, and he advised me to not make the decision to quit rashly I thought my misery toward work was because I know I can quit and be okay, so I have no motivation and those emails. But after talking to him, he helped me figure out things that I could try changing.

1) I’m at work for 12 hours a day, 6 days a week. But only 10 of those hours are actually productive. In previous years, I would leave once my brain turns to mush, but since I was promoted to manager last December, I thought I should stay as long as the other managers. I’m going to start leaving work after 10 hours or whenever my brain gives up. At worst, my manager will tell me I have to stay longer. But, I think he might not even notice as long as my work is completed timely.

2) My brother suggested that I ask my manager to let me work home once a week since my commute is so long. And that even though I know my manager doesn’t like the idea, it doesn’t hurt me to ask since I don’t want to be promoted further and I want to leave this job anyways.

3) And 80% away from finishing busy season at the end of today. Every busy season, I think about quitting. Once it’s April and I go back to working 40 hours a week and get Saturdays back, temporarily, life will feel wonderful until I get used to it (2 weeks).

[fuyu]

Tentative plan for next 6 months

3/1 – ask manager if I can work from home full time or work from Boston office after April. My manager already manages a group of people in Boston office, so I think he should say yes to the working from Boston office part at least

6/22 – ask to take a month of PTO in July. July is usually the slowest month for me.

7/1-7/31
• Go to aerial yoga classes or some sort of exercise every day
• Stop drinking coffee and eating so much junk food
• Volunteer at animal shelter
• Apply for a new jobs
• Read all the non-fiction books on my list
• Practice cooking new dishes
• Reach 4% withdrawal rate for mostly essential expenses by end of month, assuming market doesn’t crash and I continue 8 week, online job indefinitely.

8/1 – If fail to find new job, ask manager if I can be demoted back to senior accountant and work part-time 12-16 hours a week instead. Quit if he says no. Don’t get tempted to work another 12 months to reach 4% withdrawal rate without online job.

[Jason]

This is my advice: stop trying to identify yourself with your work and/or think a job is going to solve your problems. You have problems. Everyone does. Moving from your current random office filled with random people with problems to a different random office filled with a different group of random people with problems is not going to change a damn thing.

This is another reason why I hate Henry Ford. Everyone thinks getting in a car and moving away is freedom. Its not. Its slavery. You are just moving your own luggage to another place.

Focus on the fact that when you retire, you won't have to walk into a random room with random douchebags. You will then be able to walk into the room of your choice filled with the douchebags of your choice. That's freedom. It still sucks mind you, but at least you can set your own hours.

[fuyu]

@Jason: I don't think I identify myself with my work. Accounting is just something I do to pay for living expenses. My only serious problem is this job and once I leave it, I think my life will be stress free. Since this is my first full-time job, it doesn't seem fair to judge that all jobs will be like this one, so I want to try another job.