Hristo's FI Journal

[wolf]

As a fellow biker, I am glad that you are ok, hristo!
Wow, it reminds me, that anytime something bad can happen.
I hope that you recover from this accident well.

[Hristo Botev]

Thank you all for the kind words. The recovery continues to progress nicely; I'm very fortunate.

On to the numbers, or at least the net worth numbers; hopefully I'll get to the savings rate and expense numbers this weekend.

August 2018 net worth numbers

Net worth w/o house: $300,649.77 (past the $300K milestone!)
Net worth w/ house: $476,641.10 (approaching being half-millionaires)
% of [adjusted] $1.8m target net worth: 27%
Net worth change from last month: $15,418.17
Monthly PPI from total net worth: $1,588.80
"True" PPI (excluding house, 529 from net worth): $940.50

[Hristo Botev]

Here are the family's savings rate numbers for August. Obviously, August was an odd month given my 10-day hospital stay. So not surprisingly my poor wife had a lot of hospital cafeteria and parking charges that wouldn't have been there otherwise. And on the flipside, we received a lot of free meals from generous friends/neighbors who were looking for ways to help out the family during our ordeal. Nevertheless, looking hard at the numbers we likely would have ended up in the same ballpark with respect to expenses had the accident not happened, as truthfully, DW and I did a pretty good job of sticking to the budget we'd set out for ourselves at the beginning of the month.

In the end, August was by far the best month we've EVER had for savings rate. Part of that is due to more than normal income for August, but without question the biggest difference was in getting our family expenses well below where they've been historically. For September, I think our expenses might be even a little lower, though I suspect the savings rate will be lower as well because our income will be back to baseline for September.

August 2018 savings rate numbers

Total after-tax income: $23,699.61
Total expenses: $6,544.04 (down from $10,019.45 in July)
Surplus/profit: $17,155.57 (up from $4,068.24 in July)
Savings rate: 72.39% (up from 28.88% in July; this is by far the best month we've had since January 2016)
NW needed to cover expenses: $1,963,212 (nice to actually get this number below our rough back-of-the-envelope target FI number of $2 million)
[S]WR based on total NW: 16.48% (down from 26.07% in July)
[S]WR based on total NW, excluding home and 529 accts: 20.89% (down from 44.85% in July)

[Hristo Botev]

August 2018 expenses

• mortgage, insurance, property taxes: $1,925.30

• less mortgage principle: ($331.68)

• health/dental/vision insurance (and wife's workplace gym membership, which she cancelled beginning in September!; BTW, feeling pretty good about our health insurance right now given that the bill for my accident that the insurance company will be paying is looking like it will be in the ballpark of $225K): $431.18

• HOA (water, trash, landscape, insurance, etc.): $200

• electric: $124 (need to work on consistently getting this below $100 during the summer)

• gas: $33.40

• my cell: $73.35 (have a plan to get this down to $0 with Xfinity Mobile)

• wife cell: $51.23

• kids' tuition: $1,517.60

• dog: $0

• grocery/home consumables: $495.14 (down from $1,572.66 in July; ha!; still have some room for improvement)

• restaurant: $167.35 (down from $1,106.14 in July; would have been even cheaper had my poor wife not had to eat at the hospital cafeteria for 10 days; this probably will be more expensive in September because we are now in the phase of my recovery where we are treating the people who helped us out so much during my time in the hospital, and who want to see me to make sure I'm recovering)

• car: $88 (mostly hospital parking; this number is usually closer to $30 or less, because I rarely drive and my wife drives a Leaf and doesn't normally have to pay for parking)

• clothing: $0 (down from $935.85 in July, which included the kids' school and soccer uniforms for the year)

• entertainment: $951.82 (up from $697.05; this number includes kid1's birthday party and various related activities, paying for next season's season tickets for our professional soccer team (we typically sell about half of our games at double or close to double face value, which almost covers our cost to be season ticket holders, so this is almost a wash), credit card annual fee, and some after school activity fees for the kids)

• gifts: $216.72 (kids' birthdays and nieces and nephews' birthdays, and funeral flowers for a friend's mom)

• cleaning lady: $130.00 (as I noted previously, this expense will be gone in September!)

• internet: $19.99

• term life insurance premium: $59.15

• ATM: $227.50 (no idea what this money was for, but likely tied to my accident in some way, and babysitters)

• travel: $25 (bus passes so I can get to/from work while I wait for my bones to heal and am able to get back on my bike)

• wife gym: $109

• me gym: $29.99 (would have cancelled it in August but it's one of those places that you have to set aside 30 minutes to go into the place and listen to them tell you 20 different reasons why you shouldn't cancel; and because of the accident I just haven't had time to endure that agony)

• Total: $6,544.04 (down from $10.019.45 in July)

[Hristo Botev]

Existing for pleasure alone is a vulgar state befitting animals. A man can achieve pure happiness only by reaching the height of his potential, and that means not just thinking virtuously but behaving virtuously too.

[Hristo Botev]

• Read good books (literature and quality non-fiction)

• Limit TV

• Limit cell phone time

• Limit web surfing; get news exclusively from NPR, because as compared to every other news outlet I've tried, NPR seems to be relatively balanced and focused on the truth, and because it covers local as well as national news

• Bike and walk for transport, run and lift weights for exercise (once I've healed from the accident)

• Use car for transportation as last resort

• Spend money as a last resort

• Tackle honey-do items around the house

• Eat healthy and don't overeat or eat out of boredom, limit alcohol intake

• Family dinner every night

• Limit restaurant trips; eating at home as a family is always more enjoyable

• Work when at work; focus on efficiency

• Schedule work tasks for the day at the beginning of the day

• Hike more with family

• Pray the Examen every evening

• Invest more time and energy in family and friendships

• Send handwritten correspondence

[Hristo Botev]

Thanks Augustus.

I realize that for the people on this forum this is probably old news, but I’m reading Charles Montgomery’s excellent book Happy City and it’s amazing how spot on he explains how we ended up with urban design in city centers like the one I live in that are dangerous for bikers and pedestrians and certain to result in accidents like the one I sustained. Definitely recommend the book if you haven’t already discovered it.

[Hristo Botev]

It's a little premature to celebrate yet, but 3 days in and I'm getting a lot of joy from checking my Xfinity Mobile app and seeing that the amount of money I currently owe for this month's cell phone bill is $0. It's also been a good exercise in detaching myself from overuse of my cell phone, as I've removed all games and other distraction apps from my cell phone, so that I really only am using my cell phone to make and receive calls, text, check work email, and to occasionally look things up on Google. I've also noticed that switching from the larger iphone 7 to the smaller iphone SE (i.e., iphone 5) has caused me to be less interested in pulling out and checking my cell phone. It's as dumb of a cell phone as I'm going to be able to do for the time being.

[Hristo Botev]

"Our Lord does not so much look at the greatness of our actions, or even at their difficulty, as at the love with which we do them."

[Hristo Botev]

"You move us to delight in praising You;
For you have formed us for yourself,
And our hearts are restless till they find rest in you."

"Everybody's got a hungry heart."

[Hristo Botev]

"He said to them in reply, 'Whoever has two tunics should share with the person who has none. And whoever has food should do likewise.'"

This one definitely eats at your conscience.

[EdithKeeler]

The one that gets me is this one:

“Whatever you did for one of the least of these brothers of mine, you did for me.”

I think of this one every time I see a homeless person. Would I give Jesus money? Of course. Would I give that guy/gal money? Hmm.

[Hristo Botev]

Regarding the bike I was riding when the accident happened, it's a Surly Cross-Check I bought about 5 years ago for about $1,200, to which I subsequently added fenders, a dynamo lighting system, probably too-expensive (but nevertheless awesome) Compass tires, and a rear rack. I picked it up from the police department a few weeks ago expecting it to be a mangled mess (I have no memory of the accident and so had no idea what sort of damage the bike had sustained). Fortunately, the only noticeable damage I saw was that my front wheel was almost bent over in half, from what must have been a straight on collision with the street curb (as I was trying to avoid a collision with a car?) that sent me over my handlebars and into the hospital trauma unit for 10 days. Of course, that's the wheel that has a dynamo hub, which means to replace it means having someone (perhaps in another life that someone would be me) build a new wheel around the hub.

I finally got around to taking the bike to the mechanic yesterday, who confirmed that there was no other damage to the bike (including the frame, well done Surly!--and consider this an endorsement for steel frames). Fortunately, the cost for building the wheel ($150; labor and parts) isn't going to be as bad as I thought it might be (~$300). And I'm looking forward to having my "go fast" bike back in working order, as my self-imposed (or, perhaps, wife-imposed) bike-riding timeout expires at the end of this month, and I've got a fall, weekend bikepacking trip planned with a friend, as well as a recreational ride planned with my old boss who, it turns out, had a rather bad bike accident the day after mine and is anxiously awaiting the opportunity to get back in the saddle.

More importantly, the past few weeks being forced to drive a car for my (1 mile) commute has been miserable (the days I've taken the bus or walked have been good, but those aren't options on days I have to drop off or pick up kids from school). We chose the location of our home, work, and kids' school in part based on relative proximity and the ability to be able to ride bikes or walk for pretty much every trip; and I can't wait to start bike commuting again, and the kids can't wait to start riding their bikes to school again. However, I won't be riding my "go fast" bike for that commute; instead, I'll be riding my old 80s Schwinn which I've converted into an upright "townie," because I think that bike (a) makes me more visible to cars in an urban riding environment, (b) is slower, and (c) is designed to make you want to take your time and enjoy the ride. So I'll save the Surly for longer, non-commute rides.

Also, it pains me to say it (because I hate that it's even necessary in a purportedly bike-friendly community like the one I live in), but I will be wearing a helmet for every bike ride, no matter how short. Perhaps I've seen too many videos of smiling Dutch cyclists riding around in their work clothes without a helmet. And I believe in the conspiracy theory that the whole bike helmet campaign in the U.S. was one thought up and paid for by the automotive industry in order to keep people in cars. Nevertheless, having now actually sustained a traumatic head injury when not wearing a helmet (though my neurologist said the injury may have been worse had I been wearing a helmet, because of how my head hit the sidewalk), you will never see me not wearing a helmet, even on the 1-mile trip to/from work. That said, you will also never see me shaming other cyclists for choosing not to wear a helmet, which in my opinion happens way too often. Truth be told, the real reason I will wear a helmet going forward has nothing to do with my safety, because I'm not convinced helmets really help (in fact, there's a study out there that says it's more dangerous to wear a helmet because cars treat cyclists not wearing helmets more cautiously than those wearing helmets). The real reason is because over the past month I've gotten really annoyed (though I know it comes from a good place) of people asking me (often before they even realized I had sustained a head injury) whether I'd been wearing a helmet. I.e., Them: OMG, what injuries did you sustain; Me: Well, 7 broken ribs, a collapsed lung, and they had to put my should back together; Them: Well, at least you were wearing a helmet, right?

[Hristo Botev]

The one that gets me is this one:

“Whatever you did for one of the least of these brothers of mine, you did for me.”

I think of this one every time I see a homeless person. Would I give Jesus money? Of course. Would I give that guy/gal money? Hmm.

So, so true. There are so many ways that I try and justify for myself why it's OK for me to not get that person money; and truthfully, those justifications are probably all wrong. If I'm remembering this correctly, in response to an objection that the homeless person would just go and spend the money on alcohol, Pope Francis said something like "So what; if that alcohol brings him some joy in what is otherwise a rather joyless existence for him, then isn't that a good thing?" I'm paraphrasing of course, and probably totally mis-remembering the interaction. But I liked that response.

[Hristo Botev]

Well, EdithKeeler, looks like I wasn't too far off. From the Catholic News Service from February of last year:

Of the several questions the pope was asked, one focused on whether he thought giving money to people begging on the street was the right thing to do.

One thing people may tell themselves to feel better about not giving anything, the pope said, is "I give money and then he spends it on drinking a glass of wine."

But, the pope said, if "a glass of wine is the only happiness he has in life, that's OK. Instead, ask yourself what do you do on the sly? What 'happiness' do you seek in secret?"

Or, another way to look at it, the pope said, is recognize how "you are luckier, with a house, a wife, children" and then ask why should the responsibility to help be pushed onto someone else.

[Jason]

Being that I'm more of a "Teach a man how to fish" type of guy, if I was Pope, I would take time out and teach that one-drink-at-time alcoholic beggar how to rob a liquor store.

[Hristo Botev]

Starting Oct. 1 my employer is rolling out a 401(k) plan. Because I work for a very small company the options for administration were rather limited, my employer went with John Hancock, and I was worried that the plan might be too expensive for me to participate in. Well, we had the info meeting with the JH rep today and it's not as bad as I thought it might be. While it is certainly not as great as the ridiculously low gross expense ratio my wife pays with her employer's Vanguard plan, it's not horrible. I can pick from several Vanguard funds, including the target retirement ones, as well as several other passive index funds (in addition to many actively managed funds, naturally). The administrator's fee is 1.2% on top of the Vanguard funds' expense ratio, which is pretty darn significant (that's $222 for the year for $18,500, just for the administration fee), but that 1.2% will drop down to more like .63% once the company's cumulative investment fund reaches a certain threshold not too far off in the future. So it's expensive, but it's not so expensive that it doesn't make sense for me to max it out for the tax savings. Also, a big plus is that my employer is matching up to 4%, which is great, as my former (much larger) employer didn't match attorneys at all (they did staff, which is good). So, I'm very much looking forward to contributing to a 401k again. I love any chance I can get to make saving automatic, and between my 401k max, DW's 401k max, the HSA contributions, the 529 contributions, the automatic post-tax index fund contributions, and the money we schedule to transfer over to our savings account every month, we're pretty much on auto pilot at this point. The only thing that is missing is I'd like to get our spending down enough so that we can make automatic mortgage principle contributions every month. Baby steps.

[Hristo Botev]

September 2018 net worth numbers

Net worth w/o house: $308,946.19
Net worth w/ house: $485,270.45
% of [adjusted] $1.8m target net worth: 27%
Net worth change from last month: $8,629.35
Monthly PPI from total net worth: $1,617.57
"True" PPI (excluding house, 529 from net worth): $965.82

[Hristo Botev]

Not a great month, for a number of reasons. We are resolved to be more focused and disciplined in October.

September 2018 savings rate numbers

Total after-tax income: $16,159.52
Total expenses: $9,761.59 (up from $6,544.04 in August)
Surplus/profit: $6,397.93 (down from $17,155.57 in August)
Savings rate: 39.59% (down from 72.39% in August)
NW needed to cover expenses: $2,928,477 (up from $1,963,212 in August)
[S]WR based on total NW: 24.14%
[S]WR based on total NW, excluding home and 529 accts: 40.34%

[Hristo Botev]

Another crappy month on all fronts; going in the wrong direction (the stock market obviously didn't help). November is not looking much better.

October 2018 net worth numbers

Net worth w/o house: $292,522.88
Net worth w/ house: $469,181.32
% of [adjusted] $1.8m target net worth: 26%
Net worth change from last month: ($15,389.13)
Monthly PPI from total net worth: $1,563.94
"True" PPI (excluding house, 529 from net worth): $912.54

October 2018 savings rate numbers

Total after-tax income: $15,242.28
Total expenses: $9,907.69
Surplus/profit: $5,334.59
Savings rate: 35%
NW needed to cover expenses: $2,972,307
[S]WR based on total NW: 25.34%
[S]WR based on total NW, excluding home and 529 accts: 43.43%

Looking at the bright side, for a bad month at $9,907.69 in spending, that is still well below what we had been averaging for 2016 and 2017, which means that even with the Catholic School tuition thing the downsizing of the home has made a sizable and consistent impact. Also on the bright side, my company's 401k plan kicked in in October, with a 4% match, which is very nice to have again.

But, I think it is realistic for our family to get the expenses amount down to $5,600, and that's an additional $4,300/month we could be (but aren't currently) contributing to paying down the mortgage, or whatever. Getting down to that spending amount, however, means we need to get a lot smarter and more strategic about things like summer camps and aftercare for the kids, vacations and other family travel (e.g., pick more getaways where we can take the dog, so we don't have to pay for boarding), and gifts, etc. that we get for our own kids and also family and friends. We also need to rethink things like season sports tickets (or at least plan on selling enough of our tickets to make our money back), and perhaps foregoing the wife's fancy boutique gym membership (she's seriously thinking about it, unprompted by me, thank you very much). Also, groceries, alcohol, and restaurants continue to be major line items for us where big cuts can and should be made. And it is highway robbery what they charge for kids to play academy-level soccer.

By the way, if you seriously want to save money with kids, have only one parent work and send the kids to public school or home school them. Once you add up aftercare costs and the costs of summer camps and the other camps you have to pay for when the kids get random days off during the school year (teacher work days, etc.), that amount gets pretty close to the amount of take-home pay the second working parent is bringing home. I'm not necessarily a fan of Elizabeth Warren's political career, but her book "The Two-Income Trap: Why Middle-Class Parents are Going Broke" is just spot on and a must read for parents who are trying to figure out where the hell there money is going each month (at least the original edition; I'm guessing the more recent edition is a good bit more political).

To end on some positives, I purchased some hair clippers for pretty cheap and am looking forward to trying my hand at pet grooming, which will have the double benefit of allowing us to forego paying for a house cleaner and paying for pet grooming.

Also, I'm two billing statements into my new cell phone plan with Xfinity Mobile, and I'm loving it. I've been right at about 1gb each month and so have paid $12 plus another $3 for taxes, etc. (this is in addition to the $19.99 we already pay Xfinity for Internet). My plan in November is to keep my cellular data turned off 90% of the time and stay under 100mb, which would mean I'd only pay for the $3 in taxes. Still working on convincing my wife to join as well and forego her ~$50 Verizon plan. But she had a bad experience when I convinced her to switch to Republic a couple years ago, and she is reluctant to pull the trigger.