Carbon Negativity for Fun and Profit (now with dividends!)

[zkseven]

Hi all, I'm a 30-something year old living by myself in a LCOL, non-walkable area of the Midwest. Discovering FIRE through Jacob and MMM saved my life: I went from being a Spendypants to eliminating (almost) all of my debt. Jacob also introduced me to Paul Wheaton, and furthered fostered my burgeoning love for all things permaculture. The end goal is to learn as many renaissance skills as possible, live off the land, and be not just carbon neutral, but carbon negative. The secret goal is to one day match my carbon footprint with Jacob himself (and maybe even go lower)!

The current stage is to get to PovertyFIRE (or something close to it) as soon as possible. I've actually really enjoyed min-maxing/optimizing my expenditure over the years, and I'm hoping that you fine folks can assist me even further. Since "given enough eyes, all [wastes of money] are shallow": what I might see as a mandatory expenditure, some more-experienced members might have a cheaper solution to, or workaround for.

Once I FIRE, the time I had spent racing rats will be spent on learning the aforementioned renaissance skills, which will actually be the same as reducing my carbon foot print: if you squint, monetary expenditure and carbon utilization are the same thing: to reduce one is to reduce the other, and the closer you get to chopping wood and carrying water, the closer you get to actually reversing the need for money and sequesting your own carbon.

Let's begin, shall we?

[zkseven]

Domicile (valued at ~108,000$)

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Mortgage:     800$
Property Tax: 140$
Maintenance:   90$  // Calculated at (Domicile value * 1% / 12 months).
Gas:           80$  // ~40$ base fee for just having an account.
Electric:      50$  // ~30$ base fee for just having an account.
Insurance:     48$
Water/Sewer:   32$  // 32$ mandatory minimum.

Total:         1240$

Notes: This section has a lot of fixed costs, and also makes up the majority of my expenditure. The house's final payment will be on January 2034 (NOT January 2024, that was a typo).

I've thought about going without home insurance, since insurance, in general, is "a tax on people who are bad at math", but perhaps a house is the one thing you should insure? More research is required in this area.

Also very soon, I'll be planning on taking out a HELOC to function as my emergency fund.

Car: Chevy Volt Gen 2 (valued at ~18,000$)

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Gas:           8$  // The cost of charging the ~50 mile electric battery.
Maintenance:   8$  // Calculated at (Ceiling(Car value * 1% / 12 months / 2)).
Insurance:    33$  // Currently through Geico.

Total:        49$

Notes: I drive once a week to run all of my errands + go to the gym. Sadly, since I'm in a non-walkable area, that ends up being about 100 miles for a round-trip (so about 5,200 miles a year). Thankfully, there's a charging station at my destination, so I only need to pay for that cost one-way, which ends up being just under 1$ per full recharge.

I own the car outright, but I did trade in my prior ICE vehicle for it. (And if you weren't aware, the Chevy Volt is a "Plug-In Hybrid Electric Vehicle" (PHEV) - a car with both an electric motor AND an indepedent gas tank). I did end up initially purchasing my ICE for more than I bought the Volt for, so on paper, I do go "negative" on this transaction. However, after the tax rebate, and after calculating the cost of gas vs cost of electric, I'm only down roughly ~2000$, which will break even in 6-7 years. That number was also calculated using a VERY low 3$/gallon number for gas. If the averages of gas end up higher than calculated, and/or if I make more trips than I had planned (that can be covered fully on electric miles) - it'll pay off even sooner. In the interim, I'll also be reducing my carbon emissions.

I have no idea what maintenence number for cars is sensible (especially not PHEVs), so I decided to just reuse the 1% rule-of-thumb for home maintenance. As for why I'm dividing it by two, it's because a car driven on mostly electric miles in conjunction with the way that I drive it should ostensibly be half as much maintenance as an ICE.

Next up, Insurance. I hold only the minimum legally-mandated coverages, because (1) I'm a safe driver, (2) I drive so rarely, and (3) I own the car free-and-clear. I'm extremely unlikely to get into an accident to begin with, but if I do, it'll probably be someone else's fault. Owning outright is the buffer against that, but in the rare case that *I* do cause an accident, my insurance should cover it (note to self: get dash cams to prove fault of accidents ASAP). My provider is Geico, and I'm getting roughly ~30$ off with their shareholders discount. If you didn't already know, in order to qualify for it, you have to hold some of their stock. But if you own VTSAX or similar, Geico is included in their holdings, and thus you're already qualified.

I've considered surety bonds as an alternative to paying what I consider to be an exorbitant 33 whole dollars a month, but I have no idea how they work. I thought they worked by you putting up the whole amount of the bond up-front, and they keep it (all the while it gains interest), but that doesn't seem to be the case. And even if it was, all of the surety bond options I've seen would still be lifetime more expensive than the usurious 33 dollars. More research is required in this area.

I've also read - with an absolutely minimal and haphazard amount of research - that if you own a fleet of cars/a rental car service, you can self-insure/not have to insure somehow. One crazy idea here is to gather a bunch of friends together (maybe even a bunch of ERExtremest/Mustachians??!) and either pool money, or just opt out of insurance altogether. I've read that the average American gets into ~4 car accidents in their lifetime, so if you rarely drive AND drive safely and do this together, maybe, just maybe the risk/rewards/savings of going without insurance could be worth it??

Services

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Cellular:  10$
Internet:   0$  // I have a free internet plan type thing
Email:      8$
Domains:   20$

Total:     38$

Notes: My cellular service was initially 30$/month, with unlimited data, text and calls, but in an excited, but brief moment of 9th level Wheaton clarity, I asked myself if I *really* (1) needed IMMEDIATE internet access in absolutely EVERY situation (and whether it was even good for my wellbeing), (2) traveled so often that my home internet wasn't sufficient 80% of the time, (3) would not have internet at any place I went to (all the important places certainly would: a friends house, the gym, etc.), (4) couldn't wait an mere hour or two to google it when I get home, and (5) couldn't just ask somebody nearby who most likely had a phone for whatever I wanted to search. This was a realization I just had recently, so I'm still in the process of finding a new plan. One of the ones I'm looking at costs about ~9$ (before taxes)/month for unlimited calls + texts + 1GB, which is even better than I had alloted, because I was initially willing to give forgo internet entirely. 1GB will certainly be useful in a pinch, and I can always buy more in an emergency.

I do listen to a lot of music on the road, but that can be solved by simply pre-downloading it all to the device before I go.

As for email, I'd prefer to pay for a product, rather than BE the product. And I own a couple of domain names that I sadly am not able to get rid of at this point. If I cared less about privacy (and would therefore use a free email service), and didn't have the domains, I'd be saving a delicious 28$ dollars a month. Sigh.

Miscellaneous

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Food:         80$
Incidentals: 100$

Total:       180$

Notes: Trying to cut my food costs down. Animal-based protein is an integratal part of my diet, so that may or may not be a limiting attribute with respect to price in the long-term (in the short term, I'm subsisting off of eggs from Walmart). There's a Costco and Aldi's nearby, and once I start doing some serious meal prepping, perhaps I can still keep under 100$/month for food including beef/fish/pork/etc.. I've heard that some food pantries are happy to give their excess to whomever, and so if I can find one (that gives meat in particular), I certainly will.

My incidentals are the unavoidable monthly expenses that always happen, and can't be avoided no matter what. This is a catch-all category that is intended for very minor emergencies and a re-stock of the perishables such as soap and shampoo.

Summary
My total monthly expenditure is 1507$, totaling 18,084$. What do the good people of ERE think?

[zkseven]

Active Income

Notes: Currently no formal employment.

Passive Income

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Rent Roll: ~1300$/month

Notes: I own a private apartment complex that nets 1300$/month (after expenses et al.).

Investments

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Traditional IRA: ~80,000$ total

Debts

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College Loans: ~17,000$ total

Notes: Sadly a holdover from before I discovered FIRE, a thorn in my side, the blight on my otherwise perfect record. Deferred until who-knows-when (and deferred several times already), with 0% interest rates. I'm hoping that by living close to the Federal-Line-that-shall-not-be-named with no formal employment, these can be forgiven entirely, or paid off minimally veeeerrrryy slowly. (Political clarification: I'm not necessarily taking a position for, or against whether or not student loans should be forgiven, but as an incentive-based human, if the powers that be decide that they can be forgiven, I will take advantage of that.)

I ignore this number in all of my calculations because they've been deferred for years now. If and when they become relevant, things may change.

Net Worth Totals
My monthly income is currently ~1300$/month, and my total net worth (not including home equities) is ~80,000$ (or ~63,000$ if you don't ignore my college loans). My monthly expenditure is ~1500$, so minus the income of 1300$, that leaves 200$ dollars in expenses remaining.

[zkseven]

My strategy at this point is a little unconventional, even for FIRE standards (but I'd be very curious to see what ERExtremists think of it). Ever since the massive layoffs in the tech sector, it's been hard finding employment. Before, when the market was hot, I would have considered adding to my nest egg for at least six more months to get at least 20,000 more dollars. But seeing as I've sent out at about 400 resumes to only two interviews, it's making me reconsider.

After balancing the checkbooks, I realized that it was actually feasible for me to withdraw the remainder of my expenses (200$ monthly * 12 = 2400$ per year) from my IRA (year by year, not lump sum), and just simply pay the additional 10% tax each time (N.B.: it's not actually a penalty, it's a tax (and therefore can't ever be abated)), still ending up ahead in the long run (assuming 4% SWR). Very importantly, my mortgage is paid off in eleven years, so the actual FULL amount I'd need to float me until then is only ~26,400$. After that, I would be cash-flow positive.

In the risk of something catastrophic, I can use insurance, medicaid, or HELOC dollars to fund said emergency. As it's often said, if an emergency happens that was SO catastrophic it'd wipe me entirely out while FIRE'd, I presume it would likely wipe me out if I was working, too. I have the opposite of the "one more year syndrome": why go through all of the hassle to find a job, then interview, then suffer for more months (or YEARS??!) as a wage slave? I've tasted freedom in this currently period of non-conventional employment, and I'd like not to go back to slavery, even if I have to incur more risk. As MMM says, "first retire, then get rich". With me buying all my time back, I can now spend it devising new revenue streams that could take me to cash-flow positivity even more quickly. In my mind, this course of action is very worth it.

Finally, one more word regarding taxes in this setup: I project that my AGI will be around $18,000 per annum, making my tax rate 10% (after applying the standard deduction). And I know nothing about rental depreciation, but after I do some learning, I might be able to reduce that income even further (any help here would be fantastic). If it would be possible for me to even hit 0$ in income, then the only taxes I would pay would be that IRA "additional" 10% tax! I believe all of my math checks out. Please let me know if I'm wrong.

[zkseven]

[Reserved for Pt V - Wheaton Levels; Carbon Negativity & Zero Waste Strategy]

[zkseven]

[Reserved for Pt VI - Miscellaneous]

That should be all of the reserved sections. Thanks all for reading, and looking forward to feedback!

[mathiverse]

Nice work! Welcome to the forum! Note that the window for editing posts is not unlimited, so make sure you fill in the rest of the details sooner than later if you want to use the "reserved" spots.

Once you pay off your mortgage, you'll be at $1507 - $800 = $707. That's $707 * 12 = $8484 in January 2024.

What are your incidentals in detail? Can't be reduced? Maybe, maybe not! Even in the soap case, in the long term maybe you can make a yearly batch of soap yourself? Or maybe you can get soap from someone or maybe you can use less soap for this or that reason?

Also your gas payments look like they don't match your estimated fuel usage? ($8/month * 12 months * 50 miles per charge = 4800 miles in a year) Are you underestimating how much you pay per month or overestimating how much you drive?

What are your current skills? What kind of projects do you do in your spare time?

Are you still working?

[basuragomi]

Under $100/month is no problem for a diet with animal products. If you don't do so already you could try growing microgreens or sprouting beans, it's both disaster-resilient and cheap. LCOL might mean that you can come out ahead financially by hunting/fishing for meat as well.

[jacob]

I would have picked a different term than "poverty". The middle class confuses the strategy with actual poverty and those who are actually poor consider it a kind of [poverty] tourism. I've never had any positive reactions to comparing any highly efficient and skilled usage of money with poverty. In fact, it's effectively the opposite.

See https://earlyretirementextreme.com/angr ... -poor.html

That aside ... have you ever read: https://www.amazon.com/Radical-Simplici ... 865714738/ ... this seems like the exact solution you're looking for? Also look for the other Radical Simplicity book by Dan Price.

[DutchGirl]

Yes, welcome!

So sometimes it can help to move to a LCOL area that IS walkable. That could mean being able to get by on foot, on bike and with a car rental twice a year or so for exceptionally long or complicated trips. It's of course a big change, but would there be any chance of moving to an area that has (even more of) the things you need to live a very pleasant but less environment-damaging life?

Another option to reduce your footprint a lot could be to start living with other people. It could also reduce your costs of living a lot. You could find one or more renters for rooms in your house. Or you could sell your house and rent a room somewhere. Like the previous option, it's a big change, but maybe there is a suitable option for you somewhere?

As for insurance: as long as you keep the car I would definitely keep the car insurance that covers you for the costs that someone else incurs when you are deemed to be at fault and they for example break their leg or whatever. Accidents happen, even to the best drivers. You may not even feel that you're at fault (and I may even agree with you), but legally you could still be. If you continue to be a house owner, I would think that home insurance should not be too expensive? Personally we have a 5k deductible, meaning that we only will use it if something really catastrophic happens to our house. Because of that high deductible, the premium is also reasonable. Maybe there is a policy like that available to you as well.

[sky]

Milkweed pods are ripe for picking now, pick a few gallons, boil them 10 minutes and freeze them. You will have free* green vegetables for a few months.

*Free in the sense of dollars spent, but requiring time and effort to harvest, process and store.

[zkseven]

Thank you all for the warm welcome!

<snipped>

Thanks for letting me know about the editing window. Would be quite funny to have those end up being "Reserved forever" because I wasn't aware of that. I'll try to edit and fill in their information later today.

My current "master list" of perishables are (might put this in the expenses post, actually. I don't necessarily see a lot of people fully accounting for little incidentals):

Soap (Body/Hand)
Soap (Dishes)
Toilet Paper
Paper Towels
Kleenex
Candles
Q-tips
Deodorant
Shampoo
Toothbrush Heads
Laundry Detergent
Hand Sanitizer
Lotion(s)
HVAC Filters

I can buy at least one or two from the list per month, and usually need to (and each item's price is amortized over a month-scale: for example, I don't replace my toothbrush heads every month, but if I replace the (rather expensive) electric toothbrush head 3 times a year at 20$ a pop, that's 5$/mo). I do let myself live a little and buy candles every now and again. And on that note - if I still have that 100$ left at the end of the month, I'm okay spending it as a discretionary expense fund. It's not ALL about saving every penny. Maybe just 99 out of 100 pennies. Young and foolish of me, perhaps? As for soap specifically, I did buy 200 bars of soap about 2-3 years ago, and still have about 50 of them left!

As for gas, I did overestimate my driving, my mistake. I rounded up slightly, but didn't account for those pennies in the calculation. I think that over-estimate can be safely rounded away.

I'm currently a programmer, and I don't have many of the renaissance "take care of" skills at this moment, sadly. I am working for about one more year. I do have a passive income source in the form of an apartment I own, and I'll add all of that to the income post (before it freezes!)

[mathiverse]

I think I overstated the lack of long term editing. You have at least two weeks (based on a quick look at some posts I made two weeks ago) and it looks like even more than that. No need to do it all today!

[zkseven]

I learned how to use multi-post quote! Thanks all again for contributing. I'm also reading along in the journals of others.

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Good, I'm glad! I started to wonder if I was going insane, or if people had really, really high grocery budgets (in the 200ish) even for a single person. Thanks for reassuring me. Will definitely look into fishing for food, and microgreens. I've always assumed that the cost-benefit would not work out favorably for at least a couple of years.

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<snipped>

(Mr.) Jacob! Thank you for changing my life with ERE (both the book and the blog), both of of excellent quality.

I understand that one could see the term "PovertyFIRE" as a sort of LARPing, pretending to be poor. I went with the term because my long-term goal is to live very near to, or below the "Poverty Line", which has a specific meaning (and also, inspired by the reddit sub of the same name). Any ideas for an alternative name? "LineFIRE", perhaps?

I have not yet read Radical Simplicity, and it's fitting because my ERE Wheaton Level (in both mindset and money) is 6 - so as you mention, it'll be perfectly apt for my current state. Good to at least have someone else gauge that my current level is about where I expect it is (rather than have a mismatching between the reality/perception of my level, and thus make all the wrong choices).

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Hello! I would love to move, but the cost of a down-payment would really weigh me down at the moment. I will likely do this in the future, once I figure out exactly where to move to, and calculate logistics on managing selling my current place and doing a move at the same time.

I suppose that I did say "as soon as possible, at *any* cost", but perhaps there is maybe ONE thing I wouldn't do to be FIRED... and that's living with others. At least at this point in my life. I've lived with people all of my life, and I enjoy my freedom to much to give it back. In that way, the freedom from conventional employment, and the freedom from "the tyranny of others" is certainly what I value above the alternatives.

Thanks for the insurance information, as well. I do carry the absolute highest deductibles possible.

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<snipped>

Definitely going to look into this. My gardening skills are very weak, but they're the highest on my list of Renaissance skills to learn.

[mathiverse]

Soap (Body/Hand)
Soap (Dishes)
Toilet Paper
Paper Towels
Kleenex
Candles
Q-tips
Deodorant
Shampoo
Toothbrush Heads
Laundry Detergent
Hand Sanitizer
Lotion(s)
HVAC Filters

I don't do this, but I know if I had the inclination I could make body/hand soap and laundry detergent for a cheaper per unit of use than it's available from the store based on what I've read. Since you're really looking to minimize your expenses as much as possible, maybe those types of things would work for you? I also wonder at the homemade alternatives for deodorant, lotion, and shampoo. Also maybe going shampoo free would work for your hair? Maybe growing aloe or something would help with gardening and lotion. Though I don't garden, so I don't know how realistic it is to grow aloe. I killed the free one I got from freecycle fairly quickly.

Candles: We do have at least one candlemaker on the board, @mooretrees. Maybe she could speak to whether candle making can be worth learning to save money? I have no idea whether candles are cost effective to make on your own. Although I do see candles offered on freecycle and Buy Nothing every so often, so maybe the win here would be to check those regularly and pick up candles opportunistically. Actually that reminds me that some of the above products can also be had on such platforms. Definitely be careful to make sure you're not spending more time and money picking up these items than you'd save. That is another thing where walkability or bikeability helps, but I know you're committed to your current location for now.

For paper towels and Kleenex: Have you considered implementing a system using washable cloths and/or handkerchiefs instead of disposable paper products? I have different colored cloths per area (white - kitchen, blue - floors, etc) and I use the kitchen cloths or old torn up t-shirts as handkerchiefs also since my nose doesn't mind. My partner has specific handkerchief type cloths like the ones he used as a kid.

Toilet paper: Some people are okay with washable cloths for this. A more commonly palatable solution is probably a bidet.

I'd note that many people don't fully account for incidentals because they have bigger fish to fry (as in, it's a small budget category compared to the rest of their categories) and also because they aren't motivated to get to Jacob's level of spending (an uncommon goal even here on the forum(*)). In your case, you're already doing pretty well with many things and because you are targeting Jacob's level of spending, it's worth looking into them. Incidentals is your third largest category after the mortgage and property taxes!

* There was a discussion about the rarity of living on 1 JAFI or less that was interesting and maybe puts things in perspective: viewtopic.php?p=253762#p253762 (If you want to continue this discussion please post in the JAFI thread instead of in that journal!)

[jacob]

I understand that one could see the term "PovertyFIRE" as a sort of LARPing, pretending to be poor. I went with the term because my long-term goal is to live very near to, or below the "Poverty Line", which has a specific meaning (and also, inspired by the reddit sub of the same name). Any ideas for an alternative name? "LineFIRE", perhaps?

Well, that's what I was thinking with the poverty term too when I tried pushing that angle. How could anyone possible not want to know or appreciate how it's possible to live quite well spending less than the poverty line?! This is also how I know how it backfires. Turns out there are many people, both high and low spenders, who don't appreciate the suggestion that they're wasting money. "Poverty" is unfortunately an extremely loaded word.

What could possibly be a better term? Given how there are now dozens of FIRE subspecies, why not add another one. I'd probably go with ecoFIRE. On the pro side, "eco" sets the parameters while still being quite generational. I also thought of footprintFIRE, but I don't think "footprint" is universally understood. Of course as with any term, it can also get misunderstood and anything "eco" has plenty of detractors too. Maybe resilientFIRE.

You should definitely read the Merkel book.

[unemployable]

There's a lot to read here, but I'll respond to the issue of car insurance.

What you're really paying for when you buy car insurance is the insurance company's lawyers. They get every attempt to defraud them several times a day and know all the tricks. In an accident I got into many years ago someone tried this on me even. When you get into an accident they know how to deal with those ambulance-chasing lawyers that advertise on TV claiming they'll send Ben Bernanke's helicopter to your front lawn to drop $100 bills. Have fun dealing with that on your own.

Car accidents for most of us are low-frequency, high-severity, which is where insurance works best. US health insurance is basically the opposite.

I pay something like $220 for six months of liability several multiples of the state minimum, about what you pay. Just a cost of doing business. Could be worse. Usually the way an individual legally self-insures is to deposit the state minimum in government bonds to some sort of state regulatory agency. I can imagine getting this money back is neither the easiest, quickest nor most guaranteed transaction.

[mathiverse]

Any ideas for an alternative name? "LineFIRE", perhaps?

I wonder if stating your goal in terms of the "Jacob" or "Jacob adjusted for inflation" would work? Or in terms of the globally equitable yearly budget? This would be clear in the context of this forum since most people who lurk or post long enough encounter both ideas and learn them.

[unemployable]

Phone expense.

You've already done the biggest thing to potentially get your phone expense down, which is choose behaviors that do not require the use of much mobile data. Generally you want to use your phone as a tool and not a toy; specifically, avoid streaming and use wifi wherever it is available. Nowadays, most big-box stores and chain restaurants have free wifi, and when you're on the road you can also count on places such as tourist information and public rec centers; sometimes entire downtowns have public wifi. You want to shoot for 100mb or less of data a month and get in the habit of leaving data off and keeping it off like it's your stovetop.

Also consider Google Voice, at least to have for longer phone calls, which will take some demand off you cellular minutes. When I'm talking to Mom or preparing for a longer call such as with customer service, I'd rather be sitting down and on a headset anyway.

Prepaid is the way to go here. My phone expense works out to $3-4/month including the cost of the phone. The best sources of information are probably the nocontract subreddit and Howard Forums, and then the individual subreddits for each brand. I use Tracfone and it is easy to find phones for $60 or less that include a year of service. Then you can sell your extra phone back for a few more bucks. Verizon owns Tracfone now and has started some belt-tightening but it will probably still be the value leader for some time. Its infrastructure and customer service is clunky but if you're low-touch you can count on getting the occasional issue resolved in your favor.

If you want several gigs of data and virtually unlimited talk and text, the cheapest plans go for about $10/month.

[jacob]

If you want several gigs of data and virtually unlimited talk and text, the cheapest plans go for about $10/month.

If you need less at $2.50/month, this is what I'm on:
https://www.ebay.com/itm/2-50-Mo-Red-Po ... 3196831828