I am long overdue for a journal update.
I don’t think about early retirement as much as I used to. I used to read ERE and MMM religiously, and check Personal Capital daily and calculate exactly how close I was to retiring, to 2 decimal places. Since my last post, my grandmother had a stroke, my workplace had layoffs (twice), I got in a car accident, dealt with a depressive episode, and just last week, a close family friend suffered a hemorrhagic stroke and is now on life support. So it’s been a rough year, and I’ve been preoccupied.
Luckily, my 86 year old grandmother just passed her 1 year mark post-stroke (like a badass), and I’m still employed and in good health. But I can’t help feeling this sinking regret, this urgency; it feels like everyone is dying, and time just keeps running out.
Regret: a sentimental detour
One of my main motivations for FI is to spend some more time with my grandparents, who raised me for years while my parents were in the US making a stable enough life for me to join them. My dad was in the US while I was born, and my mom left shortly after, so my grandparents were the people who changed my diapers, helped me take my first steps, bought my first toy. In the last 21 years, I’ve spent less than two months with them in total. Every time I go back they’re a little older and frailer. My grandmother used to love to cook and eat, and she was never a thin woman. When I went to see my grandmother after she had her stroke, she was tiny, and barely ate at all. I was terrified that I was going to come back to the US and she would die before I ever saw her again. I’m still scared. It’s one of the reasons why I want to reach semi-retirement/self-employment as soon as possible, instead of saving up for full FIRE. I would love to be able to spend a month or two in China, visit her nursing home everyday and bring her foods from all her favorite restaurants, keep her morale up, do her physical therapy with her, and give my grandfather a break from caregiving. It’s selfish too – I ‘d want to be able to express to her,through my actions, everything I never could through language.
When she got all tiny and stooped, my dad and I would try to help her out in the kitchen. But the kitchen was her domain; she would shoo us out, brandishing her wooden spatula. I used to dream about one day going home and learning all her recipes. It is too late for all that now.
Floating towards FIRE, and a progress report
Even though I haven’t been thinking about retirement specifically, I have been maintaining the systems I set up: frugal living, value optimization, automated investing. Simply by “going with the flow,” so to speak, I’ve reached a ~10% WR. Barring a major market dip, I am roughly two years from reaching my “semi-FIRE” number, where I have enough saved up to quit my job and work for myself. At that point, I’ll only need to cover my low expenses, and my savings can grow until I actually decide to retire.
I’m going to review the goals I first set about a year ago.
Save enough to be semi-retired, around 200k.
I should get there in about 2 years. My plan is the same as before, namely:
Get to 200-250k (~20-25 years of expenses)
Increase (net) side income to at least 2x expenses
Quit day job and keep maxing out the Roth. Grow the side business, learn new skills, and work on projects for for fun, profit, and/or social good.
Increase income.
I worked really hard at my job and increased my salary ~10% in the past year, which is pretty good for R&D, and am approved for a promotion and another raise this year. I made ~1k in miscellaneous side income in 2016 (sort of accidentally). I'm going to actually make an effort this year and aim for 6k.
I have realized that my current career will not reward me for the time and effort I put in, primarily because I am in a dead-end role in a lower paying field (R&D in a basic science, without a PhD). After this promotion, there is nowhere else for me to go. Overall, I guess I’ve been more and more disillusioned with my job. The fun/learning stage has passed, and I’m well into “slog” stage. I spend a lot of time troubleshooting and writing reports to justify current practices, and do little to no new product development. I'm not learning a lot or building new skills. No one wants to make any changes or process improvements due to regulatory barriers, so most of the time my recommendations don’t get implemented anyway. I used to be so idealistic.
I still am deep down, but not so much about my job anymore.
The main issue is not income, but that I don’t see a future for me in my current field. The clincher is that even if I
weren't planning on ERE, I wouldn’t want to get a PhD in my field. So I am having a bit of a career crisis. Advice or suggestions are welcome!
Write books.
I finished my novel, put it on Amazon, and didn’t check it for several months. As of today, it has made about $300, mostly in Kindle Unlimited borrows. It was my “practice book” and I spent no money on covers, editing, or promotion, so that’s not too bad, even though my hourly wage was probably around 50 cents an hour. I started another book during Nanowrimo this year, but haven’t made much progress since then.
Program and make things.
I haven’t done as much of this as I would like, although I did learn a bit of python and start FreeCodeCamp. I have plenty of ideas, but am frequently too drained after work to do technical work in the evenings. I plan to focus more on this this year.
Reduce expenses.
I have reduced my expenses to comfortably below the federal poverty level, though not nearly to Jacob levels. A 3% WR from my current portfolio can now cover all expenses except for housing and health insurance (and who needs those?) This year, I want to raise my savings rate to 82%. Here are the distribution of my expenses from last year:
http://imgur.com/R5EKY6X
I should clarify that I pay rent to my parents and take care of a townhouse they own, and in return I’m covered under the family health insurance. I could cut my housing expenses by 30-50% by living somewhere else, but this would upset my family. This is why my “home” expenses are relatively high and my health expenses are minimal.
Get better at investing.
I automated my investments, and decided on an asset allocation I’m comfortable with. (I have a simple 90% equity Boglehead 3 fund portfolio.) I used Brexit as an opportunity to get more international exposure, which worked out well, and maxed out my ESPP. However, I don’t see the advantage in pursuing this further right now; at this point in my life, I’ll probably get better return by focusing on my career and building side income. I just don’t have enough capital to make it worthwhile. I will continue to take advantage of market dips and discounts, but won’t put effort into stock picking.
One thing that makes me happy is that all of these goals are goals that I still hold and am making some sort of progress toward. It’s good that I still want the same things I wanted last year.
State of the Stash:
9.5x expenses
Savings rate: 80%
Years left until FIRE at this rate: ~6
Years left until semi-FIRE: 2-2.5 years
Keeping my house cold
I mentioned that I keep my house cold (at 45-48 degrees F, or ~8-10 C.) I first did this in 2015, when I realized that I had to pay my own heating bill for the first time in my life. At the time, I planned it as a one-time experiment, but it was such a success that I’m doing it again this year.
Here was my gas bill for last year.
http://i.imgur.com/mKp2smg.jpg
The total was <$180 for 7 months of “winter.” (Welcome to the northern Midwest!) I did have friends and family stay over a few times, so there are a few 68F days in there. For reference, I live in the upper Midwest, where it routinely gets below 0 F. I don’t have a space heater or electric blanket, since I consider that “cheating.”
As promised, here are my highest leverage tips for staying warm. Keep in mind that these are what work for me; you may be different.
- Try to always keep moving. When sitting, tap your toes or wiggle your legs. This promotes circulation and generates heat through muscle contraction. Alternatively, tense large muscle groups like your thighs and butt. This is especially helpful if you have low blood pressure like me; I can get cold even at 75 degrees if I’m not moving enough. Periodically do a plank and run up and down the stairs a few times.
- Tuck everything in to avoid heat loss by convection. Inner shirts should be tucked into pants, and pants should be tucked into socks. Clothes should be close-fitting but not constricting. I love fuzzy microfiber clothes; it’s like being dressed in little clouds. I probably also look ridiculous (like a poofy human-sized cygnet,) so I keep it for home wear only.
- To prevent cold feet, before bed I do jumping jacks, squats, and most critically, a 1 minute plank. A 30 s to 1 min plank is also a surefire cure for cold or stiff hands and feet. I think the muscle contraction really helps.
Avoid drafts altogether if possible. My drafty bedroom is ~3-5 degrees colder than the rest of the house. Last year, I tried all sorts of strategies to warm myself up before going into bed, and I still froze every morning. This year, I moved my bed to the office area, right next to a vent. It’s downright cozy now.
- Showering is the most painful thing about keeping the house cold. Oh God, the showers. I have long hair, too, which just prolongs the misery. I shower at the pool every chance I get. When I do shower at home, it is immediately post-workout, when my circulation is up and I’m still feeling warm. I turn up the temperature from 45 to 48 degrees and let the water warm up until it gets steamy. Last year I was stubborn, and would just suck it up and shiver through my shower. Now that I know that I’m capable of it, I am never willingly subjecting myself to that again.
- Food is important. I’ve found that the best foods to keep me warm are warm meat and hot ginger tea. I’ve tried grains, beans, eggs, nuts and all manner of vegetables and spices, but meat and ginger keep me consistently toasty.
- When really, really, really cold, breathe deeply, get those “I’M SO COLD” thoughts out of your head, and focus on something else. I saw a study on PubMed about how Buddhist monks increased their body temperature by meditating and imagining a fire in their spine. I can only aspire to be so spiritual, so I borrow a page from Meg Murry in A Wrinkle in Time, who recites the periodic table and irrational roots to prevent the villain of the story from taking over her mind. I prefer integrals and the organic reaction mechanisms.
Effects and observations from my cold house experiment:
- I don’t eat keto or even low carb, but when I’m cold, I have little to no interest in sugary or starchy foods. Instead I just want animal protein all the time. I am normally comfortable eating <1 lb of meat a week, so these meat cravings only happen during the experiment.
- I lost around 5 lbs over the winter months, despite eating loads of meat, yogurt, beans, and baked goods. Around half of that weight loss was permanent.
- This year is way easier than last year was. I don’t know if this is a result of better systems to keep warm, or if my body is more used to cold adaptation.
- I need to drink >3L of water a day to feel well-hydrated.
- I used to catch one cold every year from my coworkers. The year I did the cold experiment, I didn’t get sick even once. Not even a cough! This year, 5 people at work have been sick and I’m still fine. The sample size is too low to make any conclusions, of course, but at least I can say that the “cold” exposure is not significantly weakening my immune system.
FI Music: Indie Edition
Since I started my journal with a song, I’ll end every post with a song that reminds me of FI or ERE. Today is the Replacements’ “Here Comes A Regular,” which brings to mind that guy at work who wants to retire so badly you can tell just by looking at him, but needs to drag himself back day after day to pay off the 500k house. We all know that guy.
Kneeling alongside old Sad Eyes
He says opportunity knocks once then the door slams shut
All I know is I'm sick of everything that my money can buy
The fool who wastes his life, God rest his guts
https://www.youtube.com/watch?v=sdbXGi2WX0Q
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