m741's ERE Journal

[m741]

December 2013 Update

I'll do my monthly update a few days early this month. I've calculated out most of the monthly summary data already. Over the next few days I'm planning a "year in review" and also a "2014 plans" update.

First, hard data. This was hands-down my worst month of expenses over the past few years (excluding travel months). I'm not concerned about it, but there it is. I spent roughly $2500. An enormous amount of that was 'social spending.' Either going out with friends, dating, or buying gifts. Here are some of the unusual expenses:

* $250 (!) to go to a concert with a friend. I wasn't all that interested in the concert, but ended up having a good time. This is my oldest friend, someone I grew up with, he's having a kid, and he's always wanted to see this performer. So it was sort of a Christmas gift to go with him.
* $100 for Christmas gifts.
* $300 for dating (concert, dinners, etc).

Besides, that, expenses were actually pretty minimal. I spent $160 on food, $60 on entertainment, $40 on hobby stuff, $90 on subway tickets, $60 on utilities, $1225 on housing, and other small miscellaneous expenses.

As for income, this was my biggest dividend month yet: $836. A lot of that is simply companies timing their dividends to fall on this month. Also I've been investing most in Vanguard funds that pay out in December. But I also saw my average expected monthly dividend income rise $14/month from re-investment and adding more money to investments. I really need to be more aggressive with purchases, but it's a start.

My net worth went up $15k this month. Mostly because I shifted 80% of my income into my 401k to max out company match! I like having that flexibility. January I'll have more sane numbers.

As I mentioned, I got a bit more serious with the dating. I've met someone who I really like, though it's still too early to say much. This led to an increase in expenses, but I don't mind. I think that will settle down a little, as I can focus on more creative and personal dates. Perhaps that's foolish of me to expect .

Charity

Charity was pretty much steady this month. I signed up to volunteer at an event in February, and I've continued my regularly scheduled donations. $100/month to Kiva (as well as redonations). $30/month to a few impoverished child charities. And using the One Today app on my phone to pick out a charity to donate $1 to each day (usually environmental charities). In a few months I'll really focus on volunteering more, but I'm happy with this for now.

Guitar

I'm really happy with this. I've been steadily practicng 1/hour per day. Sure, I miss a few days but I've seen good progress. It may be, at just a month in, that I've worked harder at this than any other personal project in my life! Which is pretty sad, but most of my accomplishments have been "institutional:" sign up for a club, and always show up. Or start working, and keep going. This is something that's just me.

I'm still very bad, but I've seen enormous improvements. Every 10 hours of practice I buy a few small treats for myself: some songs in Rocksmith, new guitar picks, or recently I bought a slide, which is fun to play with. At 100 hours of total practice I've selected an electric guitar as a reward/goal. That's about 2 months of work away.

Fitness

I really slipped on this. I lifted a few times and then I really had some bad pain in my ankle, of all places. I think I got too aggressive, too soon after the marathon. I eased off and stopped workout out entirely, which was probably a smart move, but it was also disappointing. I'm hoping to ease back into this, starting today. January I really want to be back on track and lifting again.

Job

I think the first phase of a new job is complete, I'm working on a larger project now. I'm getting familiar with Java, and now it's time to start digging into Javascript. I'm getting a bit bored, or suffering with some of my old motivation problems. Focusing is a bit tricky. But I think I'll be able to adjust and really dig in. There's a lot of interesting work to be done. And of course, the food is great and I'm enjoying playing ping-pong.

I've been reading a lot about skill acquisition and talent, and I'm hoping to apply some of that to programming. I have some ideas which I'd like to try out to facilitate learning new programming skills, which could also yield some productive side-projects.


---

Overall, December was a good month. I'm most proud of my work with guitar. Everything else is mostly steady progress, which is fine as far as I'm concerned. One month isn't a very long time so incremental improvement is key. Stay tuned, if you care, for a review of 2013 and my goals for 2014.

[DutchGirl]

Glad you had some good times dating. You're a nice guy. You deserve it

You're out of the honeymoon phase at work, apparently, but luckily there are still a lot of interesting things on the horizon.

I must say my boyfriend (who's 41) has some motivational problems as well with his programming work. I would say that you're too young to be in the exact same phase as he is, so I hope you'll become newly motivated or captivated by something soon. There's still so much more to learn and master!

I was planning to work on my 2013 overview as well... Maybe later today.

PS With all the spending you did, you're still only spending less than half of your regular income (I bet), and this particular month you only spent about 1/7th of all the money that came in... You're doing pretty well!

[m741]

2013 In Review

I'm not going to do an item by item review of 2013, but last year I found the year-in-review post useful to me personally, as it's a good time to recollect and reflect on progress over the past year, much of which is easy to forget.

2013 is of course a difficult year for me to review. I there's no escaping the fact that it was the year when everything changed for me, both good and bad.

The year started off with tragedy, as my mother passed away in January. I spent the first few months of the year wrapped up in the practicalities of sorting through paperwork, a lifetime of memories, selling a house, and a whole lot more.

This was a time of tremendous stress for me, but also a time for tremendous growth. It was a complete shock that upset the life I'd constructed for myself - a life that didn't make me very happy. I'd like to think that this was a final gift from my mother.

2013 was the year where I finally left my first 'real' job after 5 years, something that I recognize I'd postponed for far too long. It was a relief to get out of an environment that had steadily degraded into a toxic, stagnant mess. And talking to my former colleagues, I discovered I'd left at the perfect time, as there were subsequent changes at that company which would have driven me insane.

Leaving the job, I was able to achieve one of my first 'bucket list' level goals, traveling the country extensively for 3 months. I hiked almost daily, got healthier, and learned a lot about myself in the process.

Returning home, I started a new job, in a new industry - one with a lot more opportunities for growth. With stability, I was able to establish a regular practice routine for guitar and stick with it for over a month heading into the new year. I resumed tracking my finances, ran a marathon, picked up the ping-pong paddle again, met someone interesting while dating, and got a gym membership at a very convenient local gym (though nagging injuries prevented me from exercising regularly). Along the way I learned a lot of small things, from baking bread to brewing kombucha.

Looking back, I know that as far as day-to-day life is concerned, I'm much happier and healthier now than I was a year ago. For that, at least, I'm grateful.

2014 Goals

I established all my goals in detail, in a blog post. In short, they are: guitar, fitness, charity, finance & blogging. Missing from that list is programming, which I will naturally continue to do at work.

One surprising thing worth mentioning: I finally calculated how much I'd need to invest each month to actually achieve my 'true financial independence' goal, where actual dividends exceed actual expenses. I discovered that my deadline of December, 2014 was not feasible, as I'd have to invest about $30k per month. I relaxed that goal to an 18 month window, which of course drops monthly investment to $20k. That's still about 400% of what I'd been investing, which is a clear indication that I need to invest more aggressively, something I'd intuitively felt but deferred for too long. So, I'll be more aggressive in the new year.

[GandK]

I'm glad you ended 2013 in a better place than where you started it.

It's frustrating to do those annual recalculations and realize that your goalposts are moving. Awareness is the only kick in the pants you need though, it sounds like. And most people never have that awareness, since they don't calculate at all.

[spoonman]

Looks like you had a tremendous year, I'm happy that you were able to overcome many challenges. I look forward to reading more about your journey to FI.

[mds]

Great review. Do you have a plan to increase your investments by 400%? Or do you think you'll simply extend the timeline?

[m741]

@mds - My investment schedule had been as follows:

* $500 per week, automatically, into mutual funds, from savings account (I'd been doing this for all of last year)
* $1000 per week into mutual funds, from money market account (for about a month and a half)

I've adjusted it to:

* $1000 per week, automatically, into mutual funds, from savings (doubled)
* $2000 per week into mutual funds, from money market (doubled)
* Roughly $4000 per week into stock, or sector ETF selected over the weekend. This is a new investment.

I'll keep this up for a few months and then re-evaluate.

[pemulis]

@mds - My investment schedule had been as follows:

* $500 per week, automatically, into mutual funds, from savings account (I'd been doing this for all of last year)
* $1000 per week into mutual funds, from money market account (for about a month and a half)

I've adjusted it to:

* $1000 per week, automatically, into mutual funds, from savings (doubled)
* $2000 per week into mutual funds, from money market (doubled)
* Roughly $4000 per week into stock, or sector ETF selected over the weekend. This is a new investment.

I'll keep this up for a few months and then re-evaluate.

So you are just trying to slowly dollar-cost-average it all into the market from your cash accounts? If you don't mind posting the stocks you end up buying I would be very interested to read about them!

[m741]

@pemulis: Sure, here's what I invest in. I'm far from a sophisticated investor. My regular investments in mutual funds are in a dividend growth fund (VDAIX - vanguard upgraded that to an 'admiral' fund, with lower expense ratio: VDADX), and an all-world index fund (VTWSX). I do these on an even split with a slight edge to dividend growth.

My recent stock purchases have been: increasing a position in Verizon (VZ), entering General Mills (GIS) and also entering Target (TGT). I'm eyeing some Vanguard bond mutual funds as a discretionary purchase right now (EDV), and may also increase my gold position via GLD.

I put most of the money in from money market as I was horrified to discover that vanguard's money market fund seems to charge more management fees than it yields, and I had been keeping a rather large position there.

[m741]

January 2014 Update

Strange that it's already a month into 2014. So it goes.

I'll start with the numbers. My expenses were 2200 this month, higher than I'd hoped, but at least more reasonable than December. As far as unexpected expenses, I had about $100 in health-related expenses (more on that later); I also had one of my seasonal Amazon deliveries (Subscribe & Save, 15% cheaper than the normal amazon price) - this was about $90; I ordered some expensive food delivery, which was about $50, and spent about $300 dating. Yikes!

On the income side, I had a huge month with a bit over $11k from work. That's an unusual month with three paychecks and a bonus for the 2 months I worked last year. My last job always only had two paychecks each month, so this was a nice surprise. Dividend income was $429, down from monster December, but higher than a typical month in 2013.

Net worth rose slightly due to such high income, but I did lose a fair amount in the market. Net worth is only going to get more volatile as I invest more. I'd like to see the market drop for a month or two so I can buy more, and then recover.

I also maintained a very aggressive investing pace. I don't know exactly how much I invested, but I saw a big jump in theoretical dividend income. Expected monthly income rose by $7 this month due to dividend increases, and rose an additional $88 due to investments for a total of $95. Currently, this sits at $659/month. Here's my chart tracking expenses and income:



This chart goes back to 2011. Blue is expenses; yellow is actual dividend income, green is expected dividend income; red is dividend income if I invested 100% of savings at my SWR. There's some wonky dots a few months back (I didn't know income during my trip since I switched investment accounts during that time). You can see that expected dividend income just received a comparatively nice bump.

Job

I finally had the opportunity to do some actual more-than-bite-size coding this month. I'm also working with two knowledgeable people, and learning quite a bit. I'm pretty happy right now with my progress about 3 months in, and I think I'll do even better over the next month or two as I get more familiar with everything.

I recently changed seats; I'd been pretty isolated from the team, and now I'm sitting with everyone else. It's a big change (only two days in I definitely feel a difference). I also recommended a few of my former colleagues and they're interviewing, so I'm crossing my fingers that I'll be able to work with them (plus of course there's a referral bonus). Anyway, I'm pretty satisfied at work.

Other Stuff

I continued to donate to charity (about $200 this month). I signed up to volunteer in mid-february, but otherwise not much news on that front. Blog-wise, I've been posting at roughly my scheduled rate.

I hurt my back mid-month while lifting and had to take a break there. I was in quite a bit of pain but I'm at about 80-90% of good health now. I'm going to stop lifiting - previous sports injuries seem to make even a slight deviation from perfect form dangerous. I'll be focusing on bodyweight routines, starting next Wednesday. I also got a bit sidetracked from guitar mid-month, but hope to get back on schedule there as well.

I'm also continuing to date (as you can tell from expenses...), and it's going pretty well, 3 months in. I don't know how long the 'honeymoon' period for dating lasts, to be honest. But I'm satisfied with where things are right now, and the direction they're going.

[GandK]

I don't know how long the 'honeymoon' period for dating lasts, to be honest.

My experience is 6 months to a year.

[DutchGirl]

Nice to read this update. Funny how now your most expensive month is cheaper than your regular months back in 2011. Even while dating . I don't like the volatility of the market either, but they say it's what you need to expose yourself to, anyway. And so I did, and so you do, and so net worth will go up and down with the market (sigh). Good to see that you are getting used to your new job, and that you like it. It was a bit scary to change jobs, but I believe, looking back, you're glad you did? Good luck in February!

[m741]

@Dutchgirl - thanks! Yeah, I'm definitely glad I changed jobs. Especially, glad that I left the previous job (though the new one is quite nice). I hadn't realized just how toxic the environment was until I took some time away, and then especially saw a contrast with a different industry.

[akratic]

Glad to hear that you're still kicking ass and that you finally changed jobs! I hate to say I told you so (not really...) but I think my first post in your journal was that you could and should switch jobs!

[m741]

@akratic - you did indeed say I could and should change jobs!

Looking back I can't really find fault with my actions at each point in time, given what I knew, but it's clear to me now that it would have been healthier for me to leave about a year before I finally did. Oh well - I'm at a much better place now so it all worked out.

[DutchGirl]

You live and you learn. Maybe next time you will recognize the warning signals earlier.

But all turned out okay anyway.

[m741]

February 2014 Update

Another month down... I've been pretty busy these past few months, so I'll try to keep this relatively brief. February wasn't a great month for me. I ended up having very little free time. One weekend I was visiting family, and other weekends I was spending time with the girl I'm seeing, which only left some time after work to do stuff on my own.

I lost track of my expenses in February. I think they were basically in line with January, but I can't do more than estimate. If I don't keep track of things during the weekend, I can really fall behind and subsequently can't reconstruct them afterwards. I'm thinking of ways to track this - I'm leaning towards using a simple Google Doc or maybe even trying to enter them directly into my Google spreadsheet on the phone.

I ended the month with my net worth up 24k. A lot of that is simply market recovery, but I forgot to track 2k that was in a separate bank account in February, and also this month my net worth was calculated pre-rent. So up 20k is probably more reasonable. That's still a hell of a lot - I'll have to get used to this kind of volatility.

I continued investing regularly. I picked up some WMT & PEP, and increased positions in BLV (Vanguard bond ETF) and my Vanguard mutual funds. I've added rough target buy quotes for most of my holdings, so I have an idea when I might want to increase positions. Total in February, I increased my expected monthly passive income by $60, of which $8 came from dividend increases. I'm building up a fairly comprehensive position/dividend tracking spreadsheet, which I'll share in a few months once the kinks are worked out. I'm also picking up some more P2P loans with LendingClub using cash I already had there; I'm not putting more money in that account.

I've continued to donate as before, about $200/month, mostly to Kiva. In February I also spent a full Sunday volunteering. I'd like to make that regular, one day/month, probably in April.

I've been getting more comfortable at work, although I still miss some former colleagues, and especially the sort of trust I'd acquired from people during my tenure. At times I feel kinda stupid in the new job, and it can be tough for me to disambiguate between stupidity and lack of experience with new systems/technologies - in all honesty I'm suffering from both... There's also a lot of procedure that's slowing me down (painfully slow compile/test/setup times that lead me to context switch). I need to take a step back and see how I can speed that up, because I can be at least 3x more productive if I do so.

As far as minor things go, I've been taking vitamins regularly. I'm beginning to develop a taste for tea (instead of energy drinks or diet soda). I'm doing a little meditation. I'm trying to set up a routine for reviewing the previous day and planning ahead right when I arrive at work. I'm keeping my apartment tidier and have been able to do some spring cleaning. I'm exploring how I can use phone apps more effectively (I just discovered Timely & have been keeping to-do lists), have been reading a bit more than usual, signed up and started using codewars.com, and have been trying to manage energy better (installed f.lux on my desktop, use Timely for a more gentle wakeup, drink tea, eat less sugar).

I guess you can tell I'm sorta ambivalent about my progress. Doing a lot of little things isn't the same as continuing with the big ones, but at least they're something. I've had guitar on hold, unfortunately. I've eaten a bit healthier the past few weeks, but haven't really exercised. I'm really trying to figure out a good system for these things, but the relationship takes up considerably more time than I anticipated (usually one weeknight and the weekend per week; I'll meet friends an additional weeknight on average, leaving 3-4 nights to myself). Not that I'm complaining or trying to make excuses . I still have plenty of time, I just need to use it better.

[Gilberto de Piento]

A little off topic but thanks for the link to codewars.com. I'll give it a try when they add Python.

[m741]

@Gilberto - no problem. It's a pretty decent code kata site. There's more of a focus on syntax and so on than, say, Project Euler. And there's some redundant or unclear user-submitted problems, but it's a reasonable way to learn.

[m741]

One thing I forgot to mention in my previous update - I'm investing the money I already have in Lending Club aggressively. I had about $2500 just sitting around and not loaned out, when LC has reliably generated 11% returns for me. So, it makes sense to pick up some new loans.