_bb_ Journal

Where are you and where are you going?
_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

_bb_ Journal

Post by _bb_ »

Hello, friends!

This is the start of my journey towards FI - I still have a lot of thinking (and acting) to do regarding optimizing expenses and figuring out the numbers required to reach my own personal FIRE situation.

Background & Current Expenses:

My wife (27) and I (26) currently live in a very populous city in North America. At this point only I have read Jacob's book but after many exciting discussions my wife is fully onboard with a new financial journey! At this time I am choosing to only represent my portion of expenses - they are currently listed in USD at some point in the near future I will change reporting to CAD (moving). My half of the expenses break down into the following:

Fixed Monthly Expenses:
Student Loans: $826.88
Rent: $644.73
Parking: $114
Gym: $68.33
Internet/Cable: $49.36
Electricity: $19

Total Monthly Fixed Expense: $1,722.30

For the month of November and moving forward I have begun recording all purchases in a spreadsheet. It was enlightening and horrific experience at the same time. I was disgusted with the 'discretionary' spending; on the bright side by writing it all down and having a clear picture I feel in control.

November Variable Expense: $1,809.15

Immediate Course Correction:

After closely examining the cash flow of my personal finance my wife and I quickly made the easy adjustments.
- We cancelled our cable & landline, kept the internet
- My wife is getting rid of her car, we've decided to share mine and split the parking expense
- The examination really gave us the kick in the pants to re-evaluate our living situation. We have begun our search for a new geographic location to call home. Additionally, we would like to be the landlords rather than the renters. Updates in future posts.

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

November Recap:

Fixed Monthly Expenses: $1,722.30
Variable Monthly Expenses: $1,809.15

Total November Expenditures: $ 3,531.45

Wage Income(*): $ 4,738.12
Investment Income: $ 0
Rental Property Income: $ 0

* I work a commissioned based job, so the monthly reported income will vary.

Cash Flow Analysis (at this point its only my Wage that is contributing to my Debt & Cost of Living):
Student Loans: 17.45 %
Cost of Living: 57.05 %
Savings Account: 25.50 %

Assessment & Analysis:

November is really my jumping off point, so the real changes will be reflected in the December Recap. That's not to say I am not very excited with the November recap. I have two major takeaways, first I am in control and can make conscious choices for the benefit of my strategy. And second, while I can (and will) minimize my expenses (consumption) I am not constrained by a salary - I can (and will) earn more to fund my strategy.

Mae
Posts: 73
Joined: Wed Dec 27, 2017 3:44 am
Location: Belgium (Western Europe)

Re: _bb_ Journal

Post by Mae »

Yay, monthly reports!

I recommend the book Your Money or Your Life (most recent version).

Good luck with your journey.

Jason
Posts: 2753
Joined: Mon Jan 30, 2017 8:37 am

Re: _bb_ Journal

Post by Jason »

_bb_ wrote:
Sat Dec 08, 2018 7:22 pm
- My wife is getting rid of her car, we've decided to share mine and split the parking expense
Huge savings move. I wish we could get back to that.

fell-like-rain
Posts: 54
Joined: Fri Jun 15, 2018 12:19 pm

Re: _bb_ Journal

Post by fell-like-rain »

Sounds like you're making some good, concrete changes. Good luck! Keep us posted with how things go in the months to come.

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

December Recap:

Fixed Monthly Expenses: $1,741.77
Variable Monthly Expenses: $840.61

Total December Expenditures: $ 2,582.38

Wage Income(*): $ 3,417.83
Investment Income: $ 0
Rental Property Income: $ 0

Cash Flow Analysis:
Student Loans: 24.19 %
Cost of Living: 51.36 %
Savings Account: 24.45 %

Assessment & Analysis:

I have a few points to note right away - I forgot my cellphone bill in the November recap resulting in a higher fixed expense value for December. Additionally, we haven't been able to drop the expense of the second car just yet because one month's notice was required for the parking spot. Same principle for the cable/internet bill. January should have all expenses updated.

December has been an exciting month because I've been fully conscious of all of my financial decisions, even when not making the optimal choices I was aware of my actions. The focus will be to develop the discipline to avoid a greater percentage of the "want" expenses, which for me revolve around eating out with friends. With this in mind my friends and I signed up for a city sports league - now I can still see my friends during the week with the added benefit of exercise!

I read through Jacob's book for a second time and one of the concepts from the philosophy 'section' that really struck home this time was maximizing value - I read it in terms of people, possessions, and time.

Last but not least, I have begun consuming economic, investment, and real estate books all from my favorite place - the local library! I'm still in the accumulation phase, so for now I have plenty of time to focus on learning and practicing investment analysis before it becomes worth while to dive in with a 'live' investment.

Stay safe out there tomorrow and have a happy new year!

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

January Recap:

Fixed Monthly Expenses: $ 1,741.77
Variable Monthly Expenses: $ 585.56

Total December Expenditures: $ 2,326.33

Wage Income(*): $ 4311.95
Investment Income: $ 0
Rental Property Income: $ 0

Savings Rate: 46.04%

Assessment & Analysis:
Still on track! Working on lowering the variable monthly expenses through optimizing grocery shopping. Getting rid of the car is still on the list of things to do. I'm going to try and get rid of the cell phone too - depending on the terms to get rid of the contract etc. - and switch to a pay-as-you-go plan.

My wife is excited with her own progress. We're going to make February a competition to see who can spend less.

I've been plowing through two investment textbooks. Still in the learning & accumulation phase.

User avatar
Bankai
Posts: 816
Joined: Fri Jul 25, 2014 5:28 am

Re: _bb_ Journal

Post by Bankai »

That's some impressive progress cutting your variable expenses by more than 2/3 in only 2 months! With the move you are planning, how much do you think you can cut your fixed ones?

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

@ Bankai - a move is definitely in the works, although I think we will slow down the timeline to make sure it's not something that's rushed out of excitement. What I would like to do is eliminate my student loans, which will take roughly 11 months - save a bit more so my wife and I have around 100K cash and then buy or build something small (like a tiny house) and own it outright (house and land). With those two expenses gone, the Fixed Expenses plummet allowing us to stock pile cash and begin investing for the long haul.

This is a "first draft" of our strategy and is subject to change - for us it seems like the right direction for the time being. One concept that I've found helpful is adjusting my time horizon, realizing that I'm going to be around for the next 50-60 (70 years?) has helped me understand the importance of building a solid foundation before "building up".

Anyway, the short answer to your question is - when I move I will eliminate the Rental expense and avoid a mortgage payment entirely.

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

February Recap:

Fixed Monthly Expenses: $ 798.50 (see Analysis)
Variable Monthly Expenses: $ 1384.45

Total December Expenditures: $ 2182.95

Wage Income: $ 6570.92
Investment Income: $ 0
Rental Property Income: $ 0

Savings Rate: 66.78%

Assessment & Analysis:

The drastic reduction in my Fixed Expenses has an explanation. I paid for something for both my wife (before we started the tracking) and in return she is covering the rent (and some other fees) for February and March. I will resume paying my half of the rent in April. The Variable Monthly expenses, while higher than expected, contain a few exciting one time capital expenditures. Around $350, comes from paying the cancellation penalty on my overpriced smartphone plan. I am now using a dumb phone with a pay as you go plan. Even with the penalty fee, I am saving $845. More importantly, I have been far more productive both at work and outside of work!

My Wage Income includes a Federal Tax return.

I've been having fun with the entire process, I've found myself far more aware of my choices. One of the consequences of the ERE / FIRE process is that I've found a greater enjoyment in my work - I have a clear vision of where I want to go and this is one vehicle that will help me get there.

For anyone looking for an interesting biography, Young Benjamin Franklin by Nick Bunker is well written.

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

March & April Recap:

March:
Fixed Expenses: $ 798.17
Variable Expenses: $ 1,440.92
Total Expenses: $ 2,239.09
Wage Income: $ 6,381.73
Investment Income: $ 0
Rental Property Income: $ 0

March Savings Rate: 64.91%


April:
Fixed Expenses: $ 1,588.57
Variable Expenses: $ 1,444.48
Total Expenses: $ 3,033.15
Wage Income: $ 7,771.62
Investment Income: $ 0
Rental Property Income: $ 0

April Savings Rate: 60.97%

Reflection & Analysis:

I can certainly do better in terms of variable expenses. The past two months were brutal - there were a few unexpected expenses, however there were still a lot of "snacks" or food related items due to lack of discipline and preparation. On the other hand, I have had a string of good months in terms of income.

Equipped with some liquidity, I am going to pay $18,204 towards my student loans. This will take my monthly payment to $451 from $730; the principal owed will be reduced to just over $33k from $51k. I will execute on this before the end of May, I am waiting for....the first paycheck from my new job! Once that hits the bank account and the sense of paranoia goes away I'll take action on the loans.

Things were going well enough, however I had been working remote for about 6 months and was slowly going insane (of course this is a joke, I would mostly get bored and lonely). I also realized I had no intention of trying to "move up" within that particular company. So I went out into the great wide world and found someone that I can work for and more importantly learn from (the company is also awesome, but I chose the person rather than the company). I start on Monday and as expected I am very excited to be back in the mix of office life (isn't this what we're trying to escape?!?!?). Two very cool perks of the new company: free catered lunch & part of the health benefits is they will pay for my gym membership.

My goal for May: to keep variable expenses under my January best of $ 585.

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

May Recap:

Fixed Expenses: $ 1,588.18
Variable Expenses: $ 571.28
Total Expenses: $ 2159.46
Wage Income: $ 6,812.66
Investment Income: $ 0
Rental Property Income: $ 0

May Savings Rate: 68%

Reflection & Analysis

I improved my variable spending when compared to the previous couple of months, however I feel June I can do even better. The most exciting part of the month for me was paying off one of my student loans in its entirety and taking out a good chunk of the others. My goal is to have them paid off by the end of the year.

Outside of the financial side of things, I have implemented a new daily routine which I have found works well. Its a simple list that I perform everyday and has had an immediate impact. I've broken it down to Before Work and After Work.

Before Work:
- Glass of Water
- Stretch & Oxygenate
- Journal for 20 minutes (daily goals)
- Read 30 minutes
- Cold Shower

After Work:
- Dinner
- Gym
- Read 1 hour
- Daily Reflection (Journal)

I have been doing each part of this routine for the past three weeks and have, subjectively, felt an amazing improvement both physically and mentally. The biggest improvement has come from the daily journal entries, it is a very easy way for me to stay on track and remind myself what needs to be done. Its also fun to look back and remind myself what I've accomplished. The Cold Showers have been surprisingly helpful as well, it is an immediate sense of accomplishment - forcing the body to do something it doesn't find enjoyable, showing which part of the mind is in control.

My goals for June:
- Finish reading Security Analysis
- Complete each part of the Daily Routine
- Journal about various topics; at least once per week.

Cheepnis
Posts: 233
Joined: Mon Dec 31, 2018 11:52 am

Re: _bb_ Journal

Post by Cheepnis »

RE your may 3rd update: catered lunch everyday sounds like a dream! I used to work at a state U and they let employees eat at any of the campus food courts for $2. The food was quite good and I have trouble keeping the lunch salads I make now under $2/d.

LiberateMind
Posts: 144
Joined: Fri Oct 26, 2012 8:18 pm

Re: _bb_ Journal

Post by LiberateMind »

Wow such an impressive turnaround on variable expenses during the short time. Do post your thought process as well as you make the changes..

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

I got lazy and stopped writing the monthly updates. So instead of writing out the data since June, I will stick with an average.

Average savings rate for 2019: 39.83%

Major Operational Changes that have gone into effect for 2020:

- Car Free! - No parking, No Insurance, No Gas, ect. We sold both cars one in August, the other in December. I even made money off of my car - was able to drive it for 4 years!
- Debt Free! (A lump sum payment eliminated my student loans; about 12% of my income was going to servicing that debt)
- One Primary source of Income: my wife has gone back to do her PhD. I will be paying for the our fixed expenses, she will be responsible for paying our variable expenses. Both work out to be about 40% of our respective incomes. (She does have a stipend from her research position).
- Reporting all figures in Canadian Dollars

This was the first full year of documenting all purchases and expenses, I am glad I now have this data as it will help me moving forward. The 2019 average savings rate is a decent starting point, but not where I want or need it to be. Towards the end of the year I personally got lazy, otherwise my I could have improved that savings rate, too many meals out. I'm hesitant to say exactly where we will end up but I would like it to be north of 55% for 2020.

Around the beginning of December I put my iPad in a desk drawer and only took it out yesterday to facetime with a friend abroad. In that time I've found myself to be happier, more focused, and I've accomplished so much more. So today, after the call, it went back into the drawer. I plan on getting rid of it entirely.

As far as electronics go, I plan on using only my desktop computer, meaning I've eliminated the possibility of laying in bed endlessly scrolling internet. Now I'll just have to make sure to police myself when at my desk :lol: . I've got an idea in mind, but more on that later.

Mae
Posts: 73
Joined: Wed Dec 27, 2017 3:44 am
Location: Belgium (Western Europe)

Re: _bb_ Journal

Post by Mae »

Congrats on getting rid of the cars! That's huge. Partner and I are also car-free and have been for 4-5 years. So do you go everywhere by public transport and bike or ... ? I'm curious.

Here's to 55% by 2021 :-)

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

Mae wrote:
Sun Jan 05, 2020 2:56 am
Congrats on getting rid of the cars! That's huge. Partner and I are also car-free and have been for 4-5 years. So do you go everywhere by public transport and bike or ... ? I'm curious.
Thanks, Mae! Public Transport in our city is pretty reliable, so we will use that. However, I would say we walk almost everywhere. Its about a 10 minute walk to our respective offices, which is a huge convenience. All groceries and the majority of other errands are all within easy walking distance. Same with the majority of friends - there are only two or three that live far enough to take the subway / streetcar. If we need to get out of the city we will typically take the train. So far, so good.

I will be trying to source a bicycle before the spring. I've got my eye out on freecycle and craigslist.

Mae
Posts: 73
Joined: Wed Dec 27, 2017 3:44 am
Location: Belgium (Western Europe)

Re: _bb_ Journal

Post by Mae »

Haha, soon you'll be wondering why you ever had two cars at all :lol:

Good luck finding a nice bike!

mooretrees
Posts: 238
Joined: Sun Jan 27, 2019 1:21 pm

Re: _bb_ Journal

Post by mooretrees »

Great progress on getting rid of debt and going car free! Looking forward to monthly updates and seeing if you end up going the tiny house route. You seem like you have the energy and motivation to make serious progress, keep posting.

_bb_
Posts: 33
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: _bb_ Journal

Post by _bb_ »

Monthly updates....yikes, I fell off. Here's an update on the latest.

Financially, we are still chugging along - I'll post numbers separately at the end of the month. I'm more excited to share what I've been up to in my personal life.

DW has been kicking ass in her PhD program, and even though she is constantly stressed she's having fun and enjoying it. A couple of the perks of being attached to a graduate student is the access to campus amenities - such as a new gym membership at a fraction of the price of the local market! Second, we are currently on a waiting list for the graduate student housing. It is a high rise apartment building, with an almost identical layout to our current apartment; and it happens to be just a block over from where we are now. The rent is...$1000 all-in (utilities, water, storage), the only bummer is the wait list is about 1 year, we can probably move by next February.*

I also previously wrote about limiting my screen time, mindlessly scrolling. My main goal was to unleash my curiosity and creativity. I've always been interested in solar power, so I went ahead and built a solar set up on my balcony.** Its 200 Watt system providing charge to a 105 amp hour battery. The battery is currently powering a desk lamp and a desktop computer that I assembled. For the desktop I did not use anything fancy, I was more concerned about low power consumption. Everything on the system runs off of 12V, there is no inverter - one, for efficiency and two, because I wanted to commit to 12V. So far I have not been able to draw down the battery to a level where it can't power the system. My next goal is to convert a computer monitor - I'm unsure I'll be able to use my current one, so I'll be looking to trade someone. Then everything on my desk will be run off the battery - kind of a neat project.***

In terms of transportation, we have not missed the cars one bit, which is very exciting. I wasn't sure I'd be able to overcome that mental hurdle initially. For the past few months I have been on the hunt for a used bicycle, but I've been fairly picky and nothing jumped out at me. Then I found the most amazing place - a volunteer-run DIY bike shop. The organization takes old bicycles and fixes them up for resale / donation. The best part is that you can go in and assemble your own bicycle from the used parts that they collect through donation. The only new parts on most of the bikes are a fresh set of cables. So I currently have a bike half-assembled on a work bench, unfortunately due to the current global health situation the shop temporarily closed last week.

I have a few upcoming projects in mind, now that we are getting closer to growing season. I would like to make some planters out of recycled wood - I found a place that will deliver palate wood for free! (I'm only slightly worried about the chemicals...I'll have to do some more research). Along the same lines I would like to make a bigger desk, a coffee table, and perhaps some additional shelves for the kitchen. I've always liked the idea of making furniture - we'll see maybe it will be a potential semi-ERE job when the time comes.

* We still plan on moving out of the city into something small and purchased with cash. The timetable has shifted slightly.
** I'll try and add some pictures later.
*** Luckily, I was able to do all of this with no out-of-pocket expenses. Between a "slush fund" and amazon gift cards both provided by my employer I was able to finance this little operation.

I'll end this post with a couple of books I've read in the past months that I think are worth a recommendation:
- Leonardo da Vinci, Walter Isaacson
- The Dialogues of Socrates, Plato
- Elastic, Leonard Mlodinow
- Sapiens, Yuval Noah Harari

Hope all and their loved ones stay safe!

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