Wad's Journal

Where are you and where are you going?
Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Wad's Journal

Post by Wads »

After being inspired by C40's journal, I've finally decided to start one for myself. My goal for this journal is to keep me accountable and track my monthly finances, something I have yet to do consistently. I will be shooting for 33x my yearly expenses as I wish to never work again.

Most people interested in FI seem to be highly educated with degrees to fall back on, I don't have that luxury. I hit the workforce immediately after HS and was fortunate to land a high-paying blue collar job. I have no regrets with that decision but I'll need to be strategic on the moves going forward to ensure a life of freedom and adventure.

I look forward to sharing this journey with you all!

Sex: Male
Age:30
Personality type: INTJ
Marital status: Single
Children: None
Location: PNW, USA
Education: HS Diploma
Employment: Aerospace Mechanic
Salary: ~$84,000 USD/year
Housing: Rent
Debt: None
Savings: ~$52,671
401K:~ $153,159
IRA: ~ $45,833
NW: ~ $267,067

Hobbies:
Reading, trail walking, personal finance, side hustles, sports

FI Strengths:
Not interested in marriage or children, not materialistic, relatively young

FI Weaknesses:
Eating out, gadgets

Why FI?
Freedom

FI Start:
In 2011, my mother passed away unexpectedly at the age of 50. Shortly after, I started researching alternative ways to leave my 9-5 behind. That's when I came across ERE and MMM. I've never had issues saving money, but I never had a plan for the money I had saved. ERE gave me the blueprint I was looking for.

My 2017 goals:

• Record my progress monthly
• Reduce expenses (<20,000)
• Increase net worth by $50,000
• Create side hustle #3
• Weight Loss (Current: 205 Goal:180)
• FI in 6-8 years or less

Jason

Re: Wad's Journal

Post by Jason »

Sorry about your moms.

User avatar
C40
Posts: 2748
Joined: Thu Feb 17, 2011 4:30 am

Re: Wad's Journal

Post by C40 »

As far as earning money goes, while you might not have a lot of options/flexibility, you're in a position of highly optimized income vs. time/education. When I was 30, I earned about the same, But I went to 4.5 years of University to get an engineering degree.

Another good thing about a career like yours is that the results of your work are probably a lot more obvious than mine were. I worked for a big company doing fairly specialized work, a lot of which included guiding/developing/advising leadership teams and groups of people doing improvement projects or just improving how they do the more strategic parts of their job. It was nice because this allowed me to work in a way that likely optimized the amount of results my efforts could make vs. working for a small company or running some small business myself. But it also made it difficult to see/understand/quantify them. When I look back on that career asking what I results I accomplished, it's vague. I can sort of estimate how much money I saved directly and indirectly. I can make even more vague estimations of how much I helped people and teams improve. But nothing anywhere near as direct as "I did XYZ with my own hands today and now that plane can fly (better/safer)"

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

Jason wrote:Sorry about your moms.
Thank you
C40 wrote:As far as earning money goes, while you might not have a lot of options/flexibility, you're in a position of highly optimized income vs. time/education. When I was 30, I earned about the same, But I went to 4.5 years of University to get an engineering degree.
I agree. This was just something I wanted to point out as my situation is slightly different from most in the FI/ERE community which appears tilted more towards the white collar engineering crowd. Knowing my options/flexibility are limited gives me even more reasons to find creative side hustles, which happens to be a hobby of mine. I'll be going over my side hustle in the next update.

BTW, thanks for such an inspirational journal and website!

thrifty++
Posts: 1171
Joined: Sat May 23, 2015 3:46 pm

Re: Wad's Journal

Post by thrifty++ »

Wads wrote:Knowing my options/flexibility are limited gives me even more reasons to find creative side hustles, which happens to be a hobby of mine. I'll be going over my side hustle in the next update.
Looking forward to hearing about your side hustles.
Wads wrote:401K:~ $153,159
IRA: ~ $45,833
I see lots of references from Americans on this forum to 401K and IRA. Are those funds that you are able to access or only once you turn 65?

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

Wads wrote:I see lots of references from Americans on this forum to 401K and IRA. Are those funds that you are able to access or only once you turn 65?
These are retirement funds with various limits/restrictions. You can access these funds penalty free after 59.5, but with some creativity, you can access them without penalty at any age using tax loopholes. Check the link below for details.

http://www.madfientist.com/how-to-acces ... nds-early/

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Wad's Journal

Post by wolf »

Hope to read more about your way to reach FI.

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

>>February Financial Update<<

Expenses
$890 - Rent
$317 - Food
$106 - Gas
$17 - Kitchen/Toiletries
$63 - Car Maintenance
$72 - Personal
$707 - Taxman
$182 - Restaurants
$54 - Entertainment
$134 - Clothes
$7 - Books
$16 - Coffee/Tea

Total Expenses = $2,570

There isn't much I can do about the taxman, but everything else needs a little tightening up. I look forward to working on my careless spending habits going forward. Next month's focus will be on food as it's currently my biggest weakness.


Income
$3823 - After Tax Salary
$4295 - 401K + Match
$966 - Bonus
($345) - Amazon FBA
$139 - Kindle Book

Total Income = $8878

My salary was higher than normal from some overtime. My 401K received a boost from our annual bonus. Unlike 99.9% of my co-workers, I decided to defer the bonus into my 401K for the tax benefits.

Now let me explain how my primary side income operated at a net loss this month.

First, I hired a contractor/project manager who lives in China. This addition to my business should make my communications with my supplier and freight forwarders much smoother.

I'm also in the middle of switching suppliers to ultimately have a better quality product. Having boots on the ground will help during this transition period. This project manager set me back $1,177.

Second, I was out of inventory for the entire month of January. This hurt my page ranking for my product, so when my shipment finally arrived at Amazon's warehouse, I sold my product well below retail value to get Amazon's algorithms spiking again.

As I write this update, my product is selling at its normal price and close to its normal ranking. I expect my profits to be around $2,000 for March and beyond.

***For those interested, my next post will go into more detail about this income stream***


Net Worth = $281,972
Saving Rate = 71%

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

>>>Amazon FBA<<<

Below I will explain how I turned Amazon into a passive income stream. I've been selling my product since May of 2016. In my first 7 months, I had over $50,000 in revenue operating at roughly 30% profit with less than 2 hours of work....PER MONTH!!!

1) Find products on Amazon with high sales volume and low competition. You can do this by looking at the best seller rank (Located under the review rating) on each listing.
2) Search for the product on Alibaba, create a list of all possible suppliers selling the product.
3) Contact all the suppliers and ask for pricing details and lead times. This can be done by Skype, phone or email.
4) Get samples from 3-5 manufacturers sent to you. Samples are pricey, expect to pay around $100 each.
5) Based on the quality of the samples, choose your supplier.
6) Order 500-1,000 units to start. This is to make sure the product actually sells.
7) Ship directly from China to Amazon's warehouse using FBA(Fulfillment by Amazon)
8) Use third-party review service to get reviews, this will rank you for keywords and move your product closer to page one.
9) All you need to do now is manage your inventory and answer any questions a customer may have. Expect about 1-2 per month.
10) Receive a paycheck from Amazon every two weeks.

Most people are not aware that the majority of stuff sold on Amazon is from a regular "Joe" just like you and I. By using Amazon's fulfillment services, they handle everything for you including 2-day shipping to customers and returns. All you need to do is get a product into their warehouse and nearly everything else is handled by AMZ.

I must admit, sending money to a random person in China is not for everyone but it has worked out well for myself. It should also be noted that the competition for this is rough. You can still find some golden nuggets, but as each month passes, it's getting tougher. If anyone has questions, let me know.

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: Wad's Journal

Post by Dragline »

Sounds like you are killing it in several ways. Good for you!

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

>>March Financial Update<<

Expenses
$890 - Rent
$370 - Food
$153 - Gas
$9 - Home Maintenance
$56 - Medical/Dental
$76 - Kitchen/Toiletries
$63 - Car Maintenance
$68 - Personal
$215 - Restaurants
$456 - Entertainment
$19 - Books
$56 - Coffee/Tea

Total Expenses = $2,507

I have two major addictions that need immediate attention.

The first is with food. I seem to have a hard time telling myself "NO" when it comes to eating out. I find myself being lazy on the way home from work and during weekends and purchase fast-food instead of making something healthy at home. This is a struggle I've been having for some time, I guess I just need to be more mentally tough but that seems much easier said than done.

The second addiction is one that I do not wish to post on a public forum(Not drug or alcohol related). I've been putting this expense in the "Entertainment" category. Sorry to leave you hanging but I just wanted to have it documented so when I look back on this journal I can see my progress.


9-5 Income
$4669 - After Tax Salary
$3385 - 401K + Match
$941 - Bonus

Side Hustle Income
$2967 - Amazon FBA
$179 - Ebook/Paperback/Audiobook

Total Income = $12,171

This was a three-paycheck month so my 9-5 income was somewhat higher than normal. After operating at a net loss last month, my Amazon FBA product numbers are back to what I expect. On the downside, I'm starting to see some negative trends with my Ebook so I expect my future earnings to drop for this income stream.

In the middle of the month, I did have one situation that put my FBA product on hold. Amazon suspended my selling account due to a customer complaint about my product. After writing an email to Amazon and explaining the situation, they activated my account roughly 12 hours later.

This is the one downside with selling on Amazon. Amazon is notorious for suspending seller accounts for ridiculous claims. This is why I consider this a side hustle or hobby rather than a "Business". At anytime this passive income stream can go away. When it's all said and done I know what I signed up for so I must take the good with the bad.

March Summary
Total Income = $12,171
Total Expenses = $2507
Saving Rate = 79%
Net Worth = $294,003

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Wad's Journal

Post by Eureka »

Nice journal!

But what are you eating at home? My costs for food is 1/4 of yours (~90$) and as I never eat out it is for my total food intake - and should need be, I could easily cut this in half and still live happily and healthy.

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

Eureka wrote:
Mon Apr 03, 2017 1:26 am
Nice journal!

But what are you eating at home? My costs for food is 1/4 of yours (~90$) and as I never eat out it is for my total food intake - and should need be, I could easily cut this in half and still live happily and healthy.
Thanks Eureka!

If I'm cooking at home its a healthy plant based diet bought from my local market that sells only organic, which is obviously more expensive. I also drink a green smoothie each day and that tends to add up.

My goal is to get my food expense to $250. After reviewing my first couple of journal updates, I realize how much this is costing me in terms of working years for FI. It might take some time but I will get control over this.

If you don't mind, please let me know what your eating that only cost $90 per month.

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Wad's Journal

Post by Eureka »

Sure! I only eat organic too, but I buy whatever is the cheapest whenever I happen to shop (mainly in discount supermarkets that just cheaply resell whatever they could get cheap in bulk from their wholesale - and often there is really good stuff among it, and then I buy a lot of that same thing and store it at home). And then (together with a spice collection) I improvise food from whatever I have (steaming, stir frying, baking, raw, soups, mixing or separate ...). So currently it is a lot of carrots, beet roots, cabbages, Jerusalem artichokes, kale ... (and rice, barley, millet, quinoa, seeds, beans and the like).

I basically make all from scratch, like baking bread, making sprouts, growing herbs in pots, soaking and cooking beans (never canned food), grinding peanut butter, making jam from foraged fruits aso. It does not even take long when it is organized a bit as sprouts grow and bread bake while I do other stuff. I guess it is mainly a matter of habit, a wish to stay healthy, and a wish to spend my money elsewhere.

Also, I never drink green smoothies, but mainly water or tea, as I find it is way more filling and fun to eat food items than to blend and drink them.

You are free to use this for inspiration, as it is an easy way to cut costs, but of course it also depends on how much or how little you like to work.

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

Quick Update - 2017 Review

I made the decision in 2017 to start tracking all my expenses for the first time so I can get an idea of how much money I really needed to live off. With the year coming to an end, I realize that I'm not nearly as frugal as I once thought.

At first glance, one would think I'm a savvy saver and great investor as my net worth increased by $122,000 this year. The truth is the majority of this growth came from the sale of my Amazon side business and my automated pre-tax deductions(30%) to my company 401K. Outside of that, I don't save much and have a number of bad consumer habits.

As a single male without kids, pets, or debt, I managed to spend $2,900 per month. Horrible!!! There is no excuse for this, especially when I have everything I need to live well. I expect this number to come down significantly in 2018, somewhere in the ballpark of $1750.

Wanting a fresh start to the new year, I decided to take the last two weeks off from work to clear my mind and refocus. I spent a considerable amount of this time thinking about my life and the things that I truly value. To keep this short, my free time and independence are what I value most, and therefore will be my priority going forward.

Looking forward to sharing my progress with you in 2018!

My 2017 goals:

• Record my progress monthly - Failed
• Reduce expenses (<20,000) - Failed
• Increase net worth by $50,000 - Pass
• Create side hustle #3 - Pass
• Weight Loss (Current: 205 Goal:180) - Failed (190)
• FI in 6-8 years or less - In-work

Image
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Last edited by Wads on Sat Jan 06, 2018 1:42 pm, edited 1 time in total.

taemoo
Posts: 43
Joined: Wed Oct 13, 2010 3:59 am
Location: Madison, WI

Re: Wad's Journal

Post by taemoo »

Awesome progress, looks like you will meet your FI goals much earlier than 6-8 years.

I had similar wins with net worth increase but also fails in reducing expenses and losing weight. Good luck to you in the new year! Where did the spreadsheet go?

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

@taemoo Thanks for the heads up in regards to the spreadsheet image. I think I have finally figured it out. My personal computer was showing the image but when I looked on my company computer it was not. Strange...please let me know if it's still not visible to you.

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

Necessary Expenses
$890 - Rent
$57 - Cell Phone
$249 - Food
$110 - Gas
$32 - Medical
$116 - Kitchen/Toiletries
$14 - Toll
$9 - Supplements
$18 Personal
$29 Laundry
$1,524

Discretionary Expenses
$207 - Restraunts
$11 - Entertainment
$43 - Books
$127 - Coffee
$388

Total Expenses = $1,912

Kitchen/Toiletries - I purchased a Keurig Coffee machine this month. This will reduce my cost from $6 per cup to $0.44. I could reduce this more but I like the convenience of K-cups.

Restaurants - I need to stop eating on the go. This category has killed my expenses for years now. Eating these types of foods makes me unhealthy, low-energy, and less wealthy.


January Income
$3,047 - After-Tax Salary
$2,231 - 401K+ Match
$621 - Bonus
$5 - AMZ Book
$5,904

Total Income = $5,904



Investable Assets
January - $380,000
February -$391,368

My assets increased by over $10,000 this month. A large part of my financial growth was due to the surge of my investments in gold. Roughly 20% of my portfolio is in Gold stock with the remaining in cash or equivalent.



January Breakdown
Total Income = $5,904
Total Expenses = $1912
Investable Assets = $391,368
Savings Rate = 68%
SWR = 5.8%
Last edited by Wads on Sun Jul 22, 2018 1:50 pm, edited 1 time in total.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Wad's Journal

Post by wolf »

Nice progress. Keep on saving and investing!
What's your Asset Allocation? Are gold stocks the riskiest position in your portfolio or do you have other "high risk / high return" positions, such as bitcoins, etc. ?

Wads
Posts: 47
Joined: Mon Feb 06, 2017 7:50 pm

Re: Wad's Journal

Post by Wads »

January Portfolio
$190,000 (401K) - Fixed Income Securities
$88,000 - Cash
$60,000 - Gold
$54,000 - Money market

Most of my growth the past year has come from saving and selling my side hustle. I'm taking this time to learn value investing principles. Hopefully, over the next couple of years, I'll be able to take advantage of opportunities as they come. I don't own bitcoin or have any high-risk positions.

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