Hristo's FI Journal

Where are you and where are you going?
prognastat
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Re: Hristo's FI Journal

Post by prognastat »

I'll cross my fingers for you and hope it goes well and inspires your wife.

Hristo Botev
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Joined: Tue Jul 17, 2018 3:42 am

Re: Hristo's FI Journal

Post by Hristo Botev »

First of all, I should note how much I enjoy this forum. I haven't kept a journal consistently since my Peace Corps days, though I've tried. The cathartic angle of a journal that is both public and anonymous, with which I share my thoughts with strangers, seems to be the hook that keeps me coming back. Also, how wonderful that on nights where I wake up with my mind swimming with thoughts of FIRE I have an outlet with which I can download those thoughts so as to clear my mind and get back to sleep.

As an update, the strategy that DW ultimately agreed to was to automatically contribute $3K to the post-tax Vanguard account each month, with any left over "profit" up to $1,000 going to paying down the mortgage, and with anything over $1,000 being split between the mortgage principle and Vanguard. Hopefully in a few months we can revisit the $1K mortgage thing and discuss making that payment automatic. However, for now, the $3K automatic VG contribution is a big win for me as I certainly know from past experience with our budgeting/saving that if we don't make the contributions automatic--i.e., if we don't pay ourselves first--then the contributions just won't be made. DW prefers to wait until the end of the month to see how much (if any) is left over, and then decide where to invest that money. This is understandable because she is the bookkeeper for the family, charged with making sure that money coming in is enough to money going out. But psychologically we only reign in spending when we artificially reduce the amount of money coming in, adapting our spending accordingly.

So our FIRE strategy now looks like this:
  • DW max out 401k
  • Me to max out 401k once new employer sets one up (later this year)
  • $500/month transfer to savings account until account is at $20K (DW likes to have at least some money in a savings account "emergency fund," and $20K was a compromise--she wanted to do the whole 6 months expenses thing; this way we have plenty immediately available in savings in case of an emergency to give us time to move any needed money over from VG)
  • Max out HSA contributions
  • 529 contributions up to amount of state tax deduction
  • $3K automatically to post-tax VG
  • Any leftover profit up to $1K to mortgage principle
  • Anything over $1K in profit for a month split between VG and mortgage principle
I like this plan, especially because it is a good solid compromise of my saving/investing values and those of DW's. If we stick with this, and of course factoring in all sorts of assumptions, then the idea would be that the house is paid off and we are very comfortably FI by the time our youngest starts high school. At that point we could either sell the house or rent it out, and move to a smaller apartment closer to the kids' high school.

As for the budget going forward, the compromise DW and I agreed on for money going out of checking is $10,762, which consists of the following: mortgage ($1,926); HOA ($200); utilities ($140); cell phones ($90*); tuition ($1,520); aftercare ($340); dog ($50); food/restaurant/household consumables ($700); savings transfer ($500); 529 ($667); car/gas ($45); clothing ($45); ent/gifts/travel ($200); internet ($20); life insurance ($60); school stuff ($50); church ($100); DW boot camp gym ($109); Vanguard ($3,000); mortgage principle/budget buffer ($1,000).

$10,672 is our bare-bones monthly take-home income, though we usually have some additional income on top of that amount. So this would give us a buffer of at least $1,000 between money in and money out. If we can consistently stay below this budget, then hopefully I will be able to eventually convince DW to make the $1,000 mortgage principle payments automatic. You'll note that one of the compromises is that DW keeps the expensive boot camp gym thing, which is totally fine with me.

This budget would result in actual total expenses of $4,595 (under $5,000/month!), profit of $8,925, a savings rate of 66%, and a $1,378,665 target net worth number. With 2 kids in Catholic school, I'll take it. And with a current total net worth at about $485,000, I think that puts me at about 34% of my net worth target.

As for progress on the budget that DW and I had agreed to for August, so far (halfway through) we are doing surprisingly well. Our restaurant expenses for the month are at an astonishingly low $44; I can't tell you how many times this month DW and I felt the impulse to take the family out to dinner, but resisted it. And there have been a long list of really good choices, like deciding to buy kid1's birthday cake at Costco instead of at the fancy bakery where we would have automatically gone in the past. Also, I'm on week 2 of beans/rice in the Instant Pot, and the recipe is getting better. Shocking how cheaply you can eat in this country. If my compensation ends up being what I think it'll be for this month, then we should still be on track for a 70% savings rate month.

*I made some calls and did some research and I don't think I'll be able to switch cell carriers anytime soon, as I bought my phone through my former employer on a two-year contract, which I think means I'm stuck with the plan I'm on unless I figure out how much it would cost to get out of the contract (which I have to reach out to my former employer to figure out).

Hristo Botev
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Joined: Tue Jul 17, 2018 3:42 am

Re: Hristo's FI Journal

Post by Hristo Botev »

Started the kids on an allowance this week; DW and I have been trying to figure out for some time how we want to set it up. Here is what we decided:
  • $.50/year per week. So a 10 year old would get an allowance of $5/week, and a 7 year old would get $3.50/week
  • 50% must be saved. We've set up youth savings account with our bank for both kids, and we've set up their 50% to automatically transfer in eac week
  • They are responsible for paying for all discretionary spending out of their allowance. This includes things like buying popsicles at the pool, etc., playing video games, buying ice cream, and all the thousands of other things they are always asking for. It doesn't include things like their meals, clothing, etc.
  • They don't "earn" their allowance by doing chores; but if they fail to do their chores then they won't get an allowance that week. It's a small distinction, but what it comes down to is that they can't say, "you know what, I don't need my allowance this week so I'm not going to take the trash out."
  • They get an extra $.10 in discretionary money for every car ride round trip they avoid. So if they ride their bikes to school each day of the week, they'd get an extra $.50
  • They lose a nickel for every time we see that they've left their lights on in their room
  • Anything of ours or theirs that they damage or lose they will be responsible for paying to replace/fix
  • If they get any citations at school for bad behavior, they don't get their allowance for that week
One thing we are still trying to figure out is the church and/or charity contribution. For now we're thinking that if they want to donate some of their discretionary money, that's up to them, rather than mandating that they contribute 10% or something to church/charity. Though we might change that at some point.

suomalainen
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Re: Hristo's FI Journal

Post by suomalainen »

Liar. In MY journal, you claimed you spent more than me.
Hristo Botev wrote:
Tue Aug 14, 2018 3:16 am
actual total expenses of $4,595 (under $5,000/month!)
MY $5,000/month excludes mortgage, taxes and health care, while yours INCLUDES mortgage (and presumably taxes in escrow), private school tuition and childcare expenses! You're waaaayyyy ahead of me!

suomalainen
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Re: Hristo's FI Journal

Post by suomalainen »

Hristo Botev wrote:
Tue Aug 14, 2018 6:21 am
They lose a nickel for every time we see that they've left their lights on in their room
Hi Dad!

Edit: I actually installed motion-detector light switches in their rooms because no incentive or punishment worked.
Last edited by suomalainen on Tue Aug 14, 2018 12:05 pm, edited 1 time in total.

Hristo Botev
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Re: Hristo's FI Journal

Post by Hristo Botev »

@Suo: :lol: Bear in mind that in the roughly 2.5 years that we've been tracking this, we've never come anywhere close to the under $5k/mo. budget DW and I agreed to yesterday. In fact, I just ran the average for Jan. 2016 to Dec. 2017 and it's $14,259.83 (significantly higher than the $10,019.45 in expenses I had last month, which I (justifiably) got raked over the coals for in this forum; remember, I spent over $1,000 just on restaurants). So, big discrepancy between what we've planned to do and what our track record shows we actually have done.

suomalainen
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Re: Hristo's FI Journal

Post by suomalainen »

Hristo Botev wrote:
Tue Aug 14, 2018 11:55 am
remember, I spent over $1,000 just on restaurants).
Ok, you win on this one. We were (I was) only ~$400/mo on restaurants.
Hristo Botev wrote:
Tue Aug 14, 2018 11:55 am
So, big discrepancy between what we've planned to do and what our track record shows we actually have done.
Take it as a compliment that I'm already giving you credit for having accomplished your plans!

Hristo Botev
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Re: Hristo's FI Journal

Post by Hristo Botev »

suomalainen wrote:
Tue Aug 14, 2018 11:36 am
Edit: I actually installed motion-detector light switches in their rooms because no incentive or punishment worked.
I hadn't thought of that one; good idea.

Hristo Botev
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Joined: Tue Jul 17, 2018 3:42 am

Re: Hristo's FI Journal

Post by Hristo Botev »

As of this morning, we are officially cleaning lady-less. We've had a cleaning lady as long as we've had kids, and we've gone from once a week, to once every other week, to once a month, back to once a week, and so on; meanwhile, our trusted cleaning lady's rates kept going on (in part due to the fact that we kept upsizing homes). At the same time, her business has grown (good on her), in part due to our referrals. And so it's rare that she even does the cleaning at our house any longer (e.g., she spends her entire summers now back home in Brazil so her son can get to know his relatives down there; again, good on her, but it means our trusted cleaning lady has her employees--who we've never met--cleaning our house). Well, the straw that broke the camel's back for me came when we downsized our house earlier this year from a 5-br to a 3-br, and her rate INCREASED, because she said it's a townhouse with 3 levels and so more work going up and down. But alas, I'm not in charge of those decisions, and so we kept paying her. The straw that broke the camel's back for DW, however, came this morning when she realized that kid1's piggy bank has been cleaned out. There was a decent amount of money in that piggy bank, as kid1's Godparents had a habit of dropping some relatively large bills in there as a surprise when they would come and visit. Now we can't say for sure whether it was one of the cleaning lady's helpers who we've never met that cleaned out the money, as opposed to say kid2, who has been known to not fess up when he does something he's not supposed to (or perhaps a babysitter, or the money got lost in the move, etc.) But nevertheless, my wife realized she doesn't like having strangers in the house, and she doesn't like spending $130/month for someone to clean the house when we can't do it ourselves. Also, the move to the townhouse means my weekends are no longer filled with yardwork and (as much) home maintenance. Plus, the kids are getting old enough where they can help out with chores and clean up after themselves. So, progress. And $130 less a month in spending ($1,560/year). Except that we have a dog, and on the days the cleaning lady comes the dog goes to doggie daycare for $25. And our dog sheds, so in the past that meant I'd either have to get the car washed/vacuumed after taking her to-from daycare, or else I'd vacuum it out myself. So the decision to stop having someone else clean our house in reality probably will save us more in the ballpark of $2,000 a year, which if I understand it correctly is more than 25% of Jacob's total annual spending.

Hristo Botev
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Re: Hristo's FI Journal

Post by Hristo Botev »

And I think I'm going to give dog grooming a try; as keeping our dog's hair trimmed should help with the cleaning.

Gilberto de Piento
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Re: Hristo's FI Journal

Post by Gilberto de Piento »

Congratulations on getting rid of the cleaning service and good luck with the dog grooming. I've done it, watch youtube videos for methods.

Hristo Botev
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Joined: Tue Jul 17, 2018 3:42 am

Re: Hristo's FI Journal

Post by Hristo Botev »

I think I finally cracked the cell phone thing. I bought my current phone, an iphone 7, through my former employer on their 2-year contract. My former employer paid for my cell phone plan with AT&T (which is why I'm so ignorant on all this; I've never actually had to deal with price-shopping cell phone plans, ever). When I left my old job, I kept my phone and signed up for an AT&T unlimited plan, because I had to stick with AT&T because of the contract. Having now contacted my former employer and AT&T, I'm pretty sure that I am going to be able to get my iphone unlocked without having to pay an early termination fee. The problem is that, of course, my AT&T iPhone 7 won't work on Verizon or Sprint networks; only on the GSM networks (I say that like I have any idea what that means) of AT&T or T-Mobile. There are some discount carrier options on those networks, including AT&T's Cricket of course, as well as Red Pocket (thanks to Optimal_Solution for that recommendation) and Mint Mobile (forest_turtle), with which I could probably get a plan for about $20 or a little cheaper. But because we have our cheap ($20/mo.) home internet with Comcast (or Xfinity, or whatever they call themselves now), I could do Xfinity Mobile if I had a phone that worked on the network they use, which is Verizon's. As I understand it, if I turned off data on my phone so that I was only using data-stuff when on wifi, my phone bill would be $0, because their per gb plan is actually free up to 100mb of data (and unlimited calls/texting). It's then $12 per gb. So I think what I'm going to do is trade in my iphone 7 to apple and buy an unlocked iphone SE, which would result in total out of pocket of about $150 plus tax. And then with xfinity mobile I think that'd mean I'd pay nothing for my cell phone, at least until Xfinity Mobile decides that they don't want to offer mobile as a loss leader any more.

If anyone out there thinks that's a really stupid plan for some reason, please let me know. But $150 for a phone plus $0/month seems a lot better than my current situation, which is $73/mo. Also, having read through black_son_of_gray's Journal this morning I am very much inspired to detach myself as much as possible from my phone. I still need it for work email and for calls/texts; but I think switching to an iphone SE with its much smaller screen size, and turning off data except for in emergencies or for when I really do need to check work email, that would be the next best thing to heading back to the good-ole-days of dumb phones.

Hristo Botev
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Re: Hristo's FI Journal

Post by Hristo Botev »

Inspired by the ERE blogpost that populated this morning, I think the wardrobe/laundry thing is one ERE area I've actually figured out from an efficiency and optimization standpoint (for me; my family is a different story).

My work wardrobe consists of the following:
  • 3 pairs of wool slacks in varying shades of grey;
  • 8 dress shirts;
  • a blue blazer;
  • 2 suits, one charcoal grey and one oxford grey;
  • 1 pair of black cap toe dress shoes and matching belt;
  • 1 pair of brown cap toe dress shoes and matching belt;
  • 8 undershirts;
  • 8 pair of "travel," quick-dry underwear (the Ex Officio ones);
  • 8 ties;
  • 2 wool pullover sweaters;
  • 8 pairs of wool dress socks; and
  • 3 white pocket squares for the blazer and suit jackets, because I'm fancy.
I leave the slacks, blazer, shoes, and belts at work, as I change into my work clothes from my bike commuting clothes in my office in the morning. I bring in and take home every day a pair of clean socks and a clean undershirt. As for dress shirts, I typically leave these at the office as well until they've been worn 2-3 times, and then I'll take them home to wash. Suits I only wear when I have to go to court or to a deposition, which is usually about 2-3 times a month, and so I leave these at home along with my ties.

The slacks, blazer, sweaters, and suits get dry cleaned once or twice a year, as needed. The underwear gets washed and then hang dried after each wear. The dress shirts get washed and then hang dried and ironed after 2-3 wears. The undershirts and socks get washed and dried (in the dryer) after each wear. The shoes I should polish more frequently, but I usually do it about every 2-3 months.

I "completed" this wardrobe last year, and apart from refreshing underwear and undershirts, and refreshing dress shirts when they are so worn they can no longer be mended (though my dress shirts generally last 4-5 years or so, with mending), I don't foresee needing to make any more work wardrobe purchases, ever. This uniform (grey slacks, blazer, dress shirt, black or brown shoes) means that unless I'm going to court or to a deposition, I never have to think about what I need to wear for the day, as I'm dressed for any situation and, given the casual work environment I work in, I'm just about always the best dressed person in the room. I much prefer this to what my colleagues do, which is to wear jeans or something similarly casual on days that they are just going to be at the office, and having to remember to wear something more formal when they are seeing a client or going to a lunch, etc. That's too much work for me to remember what I need to wear every day.

The blazer, suits, slacks, and dress shirts were all bought from the same relatively high-end men's store, which sells its own private label line of clothes, designed by the owner of the store and usually made in Italy (the dress shirts are made in South America, I think). The clothes were expensive, but after a decent amount of research and trying out other places, I am convinced that the store sells clothes that are very high quality, and that will last a very long time if taken care of. Also, the clothes fit me well, and you can go in any time to get any needed alterations done, for free, for the life of the clothes. As for the shoes, the black pair are Aldens, which were insanely expensive ($500) but made in America and likely to last me my entire working career (I've had them for 8 years so far and they only have gotten better with time). The brown shoes are also high quality, but they were bought at a high-end consignment shop for $80. All in all, of my big pre-ERE/FIRE enlightenment purchases, the work wardrobe purchases are the ones that give me the least amount of heartburn.

Outside of work, not counting exercise clothes, my wardrobe consists of:
  • 3 pairs of Levi's shrink-to-fit jeans, in varying stages of wear (the two older pairs have had to have the crotch patched, adding years to their lifespan);
  • 2 pairs of Musa shorts from Rivendell Bikes;
  • 2 pairs of chino shorts;
  • a pair of chino pants;
  • a stack of t-shirts;
  • a few collared short sleeve shorts;
  • the previously mentioned dress shirts;
  • a casual linen sport jacket for summer and a gun check one for winter;
  • a pair of penny loafers;
  • a pair of leather camp moccasins;
  • a pair of leather Wallabees, for winter; and
  • flip flops.
Most weeks I'll only wear the MUSA shorts (which I use for commuting) and 3-5 t-shirts, and perhaps a pair of jeans. The MUSA shorts I wash and hang dry once a week. I probably wash (and hang dry) the jeans about twice a year; basically, whenever they get noticeably dirty or smelly, which is surprisingly infrequent if you brush off dirt, etc. and hang them up after wearing them (FWIW, the Levi's CEO says you are never supposed to wash the STF jeans). The t-shirts I wash and dry (in the dryer) usually after 2 wears.

So week in, week out, my own laundry is usually limited to 2 pairs of MUSA shorts (hang dried), 7 pair of underwear (hang dried), 2-3 dress shirts (hang dried), my exercise clothes (hang dried), 5 undershirts (tumble dried), 3-5 t-shirts (tumble dried), and 5 pairs of socks (tumble dried).

To Jacob's point from today's blogpost about handwashing clothes. I will say that I hand washed and hang dried all of my clothes when I was in the Peace Corps, and that is a surefire way to DRASTICALLY minimize the amount of clothes you wear in a week, because handwashing clothes (especially jeans) is a pain in the ass. If you've ever wondered why grandmas in developing countries have death grips for handshakes, it's from ringing out their grandkids' jeans.

Hristo Botev
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Pope Leo XIII

Post by Hristo Botev »

"Once the demands of necessity and propriety have been met, the rest that one owns belongs to the poor."

Hristo Botev
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Re: Hristo's FI Journal

Post by Hristo Botev »

So, I spent the past couple weeks in the hospital (including 2 days in the ER and 3 days in the ICU) recovering from a bad, nearly fatal bike accident I sustained on my regular commute home from work. I don't have any memory of the accident itself (the police report just notes that a bystander saw me go over my handlebars and collide with the sidewalk at a particularly dangerous intersection), but I had some pretty bad head injuries (thankfully no permanent damage) as well as 6 broken ribs, a broken collarbone and a broken clavicle, and some internal bleeding and fluid in my lungs. I've been back home from the hospital for about 4 days now and getting a little better every day (e.g., I was finally able to remove the last of my bandages this morning and take a proper shower, so today has been especially awesome). I've also been easing back into work, a couple hours a day this week, which has been a very welcome change. I'm still processing the accident and the ramifications it will have in my life going forward, but here's a short list of initial takeaways:
  • DW is the strongest, most amazing and capable person I've ever met
  • We have an amazing community of family, friends, neighbors, work colleagues, church people, etc., and the outpouring of love and support my wife and family received throughout this very scary ordeal is awe-inspiring and will forever serve as a reminder to me that people are fundamentally good
  • I work in a noble profession with highly honorable people and if I spend my life simply trying to act in a way consistent with that standard of nobility and honor, my life will not have been wasted
  • I really do need to read more, and watch less television (that realization thanks to 2 weeks of watching crappy hospital cable)
  • Although we are not FI, the mere fact that we are approaching FI means that we are well positioned to handle ordeals like this one, and not just because we have money put away in places like HSA accounts, but also because DW and I both have had the freedom (thanks to FU money) to pick jobs where we know that our colleagues will help us through these sorts of ordeals, as opposed to standing as obstacles
  • Sneezing and yawning with broken ribs is really painful
  • Cars suck
  • I'm looking forward to getting back on my bike, though in the future I will take the safer, more roundabout route I take with my kids even when I'm by myself--I'm fortunate (though of course we carefully planned it) to have a very short bike commute to work/kids' school, so it's simply not worth the added stress of taking the shorter but more traffic-congested and really poorly designed street just to save a .25 mile
  • While I wait for my bones to heal I've been taking the bus to work, and as convenient as the bus is for me $5/day for bus transportation seems insanely expensive as an every day commute option
  • It can be surprisingly difficult to actually get discharged from a hospital after a long stay, there is a long list of things that has to go exactly right and in the right order before those discharge papers are actually handed to you
  • First responders rock

EdithKeeler
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Re: Hristo's FI Journal

Post by EdithKeeler »

I'm really glad you're OK, and glad you apparently received good health care. Prayers for a continued swift recovery!

suomalainen
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Re: Hristo's FI Journal

Post by suomalainen »

Yowza. Yet another thing we have in common. I can relate to many of your sentiments. Best wishes for the recovery.

Clarice
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Re: Hristo's FI Journal

Post by Clarice »

Ouch! :o I am happy that you are OK - still good sentences and good spelling. ;) My husband had a very similar accident in 2014 - it was an ordeal. Best wishes and speedy recovery!

User avatar
jennypenny
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Re: Hristo's FI Journal

Post by jennypenny »

That's so awful. I'm glad you're ok.

No one wants to go through that stuff, but it is heartening when something does happen and you find out how supportive friends and family can be. I'm glad you have a good support network.

2Birds1Stone
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Re: Hristo's FI Journal

Post by 2Birds1Stone »

Wow, I am so glad you are alive and here to tell the story. Wishing you a speedy recovery and full health back.

I am cringing at your 3rd to last bullet, as I just started having to pay $38 for a round trip daily peak time train ticket (1h 20m each way)

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