CS's Journal

Where are you and where are you going?
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Joined: Sat Dec 29, 2012 10:24 pm

Post by CS » Wed Jan 02, 2013 10:01 pm

Hi everyone! It is exciting to be posting here and starting on the path to FI. As many have said, I wish I had learned this information years ago as I could have been done with these jobs I dislike for at least a decade.
A little about me:

Married, early 40's, no kids, DH mid 20's. We are committed to doing this together so it would be ERE for him, and just ER for me. The goal is 10 years at the most (if we go the semi-er route,) or as few years as possible if I must work the full time route (2-4?).

I've just read most of the blog and Jacob's book. I'm also working on getting through the new (2012) book on the permanent portfolio. I think that is the route we will take.
We are recovering from a period of non-ere friendly expenses: supporting two households while working out of state, paying for a huge wedding and paying off some large (large!) medical bills. The medical bills should be ending in 2013, and we are down to one house. We also just paid off DH's student loans.
The income situation is a little tricky. Currently I work as a traveling consultant and make a lot of money, but this work is not guaranteed. I could easily not work for a year. But if I can get one three-month assignment a year, it would be enough to pay all living expenses and save 50% (if we get our bills down as planned). Would that be semi-er retirement? The appeal there is that we could live close to our families most of the year. We'd also have 9 months a year to work on alternate skills.
If the assignments don't come through, the backup plan is to find a permanent job in a different location (there are none in our city of choice) and save, save, save for a few years.
There is also the complication that we had plans of going to back to school before I discovered ERE. Not sure how that will fit here. I guess we'll see what is offered and go from there. (The school would be in a different field for me that I really do want to work in, and graduate school for DH.)
I'll post a little more details on the financials later. We just started using EEBA for tracking our budget and discovering all sorts of expenses popping up that we did not allocate a category for... fun, fun. January is our first full on month of using it.
I welcome any feedback, comments and suggestions.

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Post by CS » Wed Jan 02, 2013 10:42 pm

Net worth

- Without retirement accounts included, about -17,000k, mostly in taxes for 2012.

~190k in retirement accounts. We had pulled some out to pay excess medical bills. Not too happy to have all that cash locked away.

Total $3797.90 (two people)

Food & vitamins 780.00

House Mort & Insurance 1,066.83

Utilities 370.00

Phones 164.00

Fuel 130.00

Entertainment 110.00

Medical Ins. & expenses 897.07

Cat Care (21 year old cat with kidney disease) 200.00

Household goods (target, etc) 30.00

Car maintenance 50.00
This does not include things like clothes, major purchases and property tax. Right now we have those as irregular expenses and want to save up money for those categories before spending.
There are also some expenses that come with the job, such as plane tickets every weekend to come home (we decided this was a necessary expense. DH could not quit his job to come with on this assignment and that many months apart is not fun). That runs about $1600 per month, but is fully deductible as a business expense.
Savings Rate:

~65% after taxes. That would be great if it was a permanent thing, but it is not.
To do:

Get expenses down as soon as possible. The medical cannot be helped for 2013.

- sell one car

- sell the house and move into a well located, cheap 1 bedroom

- get rid of the home phone (to google voice) and get the cell phones on a prepaid plan

- reduce the fuel bill by the move

Also, the food and cat bills might not have much room. For health reasons, my diet is extremely limited. I do know there are some things we can do there too, such as making our own pickled foods.

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Post by frugaladventurer » Wed Jan 02, 2013 10:55 pm

Hi CS -

That's nice that you are both committed to this idea.
Are you both committed to the idea of not having children? Just curious, as I have a friend who was married to a much younger man. Things went well for about 15 years, but then when she was in her 50's, he left her for a younger woman who could have his child (that he suddenly now wanted). I am NOT suggesting this will happen in your case - I've dated some younger men myself, and could see that it sometimes can work - but I would just caution you, as you make your future plans, to make sure you are protected financially if things change in your relationship down the road. (I, for instance, put my career on the "mommy track" while my same-age husband became a star in his field. All our retirement savings were in his pension and 401k at work. Luckily, I live in a community property state, so when he had his midlife crisis and left, I got half the 401k. But my share of the pension only works out to about 30%, even though it was all earned during our marriage. And my current income is much less than it would have been if my career had been given the same priority as his.)
I make these suggestions not because of your age differences, but because I think we women in general tend to think nothing will happen to our relationships, and leave ourselves financially vulnerable.
That being said - it's GREAT that you both are on board with this plan, and I only wish I had a partner like that now! :)

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Post by CS » Wed Jan 02, 2013 11:46 pm

Hi Frugaladventurer,
Thanks for the thoughts. I have had that concern as well. We have tried for the kids, no go (but lots of bills). We might adopt, or try some other option later if he decides it is really important to him.
Right now my earning potential is good enough that I feel I could take care of myself. We also have a prenup, which would help protect some of the assets I brought in.
But in the end, life is short and I want to be happy so I am taking a chance. Nothing is ever guaranteed anyhow. I could marry someone my own age and have him drop dead from a heart attack or get pushed into a subway train.
Glad to hear that you got at least half of the 401k. I wish our country would be more supportive of having children. It hurts the women most of all, when you cannot take take off to be with your kids without losing your job. Three months off is a joke.

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Post by CS » Thu Jan 03, 2013 5:29 pm

Been thinking about the alternate skills portion of this (inspired by reading another thread on the forum). I've spent much of my professional career working part-time, and using the time to finish my Ph.D. in quantum computing and learn skills in photography. I use the Ph.D. in my work now, so that paid off. For the photography, I did achieve a high enough skill level to earn awards and start a business. But it is a rough business to get into in that it requires a large capital investment in equipment. And since much of the equipment is digital, and constantly being outdated, it is hard to get your money back in selling. I think you could get a decent return if you sell annually, i.e. don't wait too long.
Also, the business is being squeezed by a lot of newbies who are willing to work for free just for a chance. I think if your product is good enough, you can charge a decent price, but you have to be vigilant and keep your customers the non-pain in the butt kind.
So the photography is still percolating in the back of my mind as an alternate business but I am not running out to spend money on it right now. I do have some decent equipment, except perhaps my old computer.
Another thought is what I have been working on for about five years: writing. That is a relatively cheap business and can be done anywhere. It is also possible to avoid a lot of agism if the product is good enough.
Having the time to work on these things now makes the working part year option the top choice at the moment. I think waiting 10 years to put significant time into these pursuits really diminishes the odds of them paying off for alternate income streams.

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Post by CS » Tue Jan 08, 2013 6:11 pm

I have to say (and it's be said here before), I really like how much I have learned from others on this forum. This column: http://michaelochurch.wordpress.com/cat ... nsparency/ made my morning, and I found it from Marlene's journal. Thanks for that.
"How I found freedom in an unfree world" is waiting for me back at home. Greatly looking forward to starting it this weekend.
All the discussion here about the bikes has made me realize how lucky I was to grow up with my dad. Need to learn more from him though. He is an avid biker all his life and used to race as a young man. He has tons of bikes, but works on them all himself, right down to having numbers on how long all the parts last. We always had well taken care of bikes, with custom gear arrangements he set up for us, with little charts on our handle bars to know where they were. All this for very little money. In fact, he found his current commuting bike in someone's trash. The frame is great, even though it look terrible, with most of the paint gone and it rides well because of all the work he has put into it. So it never occured to me how much money people could put into bikes, just to get something only slightly better than what he could produce for us. Thanks Dad.
(He had a lot of other ere tendencies as well, which is why he could retire at 57 or so, and spent plenty of time doing other skills even when working.)
On a different note, is there an economical way to buy free range chickens and wild caught salmon? For health reason, we will probably keep the grocery budget high for purchasing these types of items but it would be nice to get the cost down. We rarely, if ever, eat out, so reducing the food bill comes down to eating the veggies in season and finding ways to buy economically. Some blogs I follow buy half a cow, or share a cow with others but we don't have a freezer, nor do I really want to eat beef (the DH would be just fine with it).

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Post by CS » Thu Feb 07, 2013 4:34 pm

January was an instructive month for the budget. Some categories went over, some under. I'll post numbers when I have a chance. I've decided to calculate the NW including retirement savings and home equity, especially since we plan on selling it and living in a cheap apartment. That leaves us at 269k. It should go up to 284 by April.
It seems to have been a good time to consolidate the retirement accounts. One of my accounts that was down to about 35k during the crash will be 62k when the assets are sold so cash can be sent to the Vanguard account. That is pretty exciting.
Steps made towards FI this past month:

1. Fidelity account balanced into PP, with the exception of purchasing short term t-bills. Don't want to do that while traveling (concerns about secure internet) so it might have to wait a bit. The rest was ordered over weekends and purchased during the week. Feels good.
2. Opened a Vanguard account to setup another permanent portfolio and started getting two retirement accounts transfered there. Lots o' paperwork.
3. Paid back a 60 day rollover 'loan' from one of the retirement accounts.
Playing with a spreadsheet to see how long it would take to get to FI is both fun and frustrating. It would take as little as three years if I took a permanent job and just worked. That blows my mind. The frustrating part is that both my husband and I have applied to schools to work on stuff we like. We agree to go places that would pay us stipends for work (and our tuition) , so this plan would not drain our resources, but at the same time we'll have to face working afterwards. Maybe that is not so bad. Actually, if we just paid our bills for the next 15 years without putting in another dime, we'd be FI.
So school and adventure, or work and safety? What makes it even harder is that I really like the temp job I am working now and could see working there for three years. They want to hire someone soon and we won't know our school application results until April or so. The timing is just not good.

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Post by CS » Thu Feb 07, 2013 4:51 pm

Oh yeah, cannot remember if this was done in January or December but we paid off DH student loans (24.5K). They were at 6.55% so it was a no brainer. With the 3% origination fee on top of that, it has to be the most expensive money I've ever had to deal with. I get a little ill thinking of the $1600 in interest we paid last year on them. That could have been a new computer for me (mine is near it's end of life).
No more student loans. Ever.

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Post by CS » Thu Feb 07, 2013 5:04 pm

Good reading this month:
The Millionaire next door. Almost done with it. Hugely eye opening. Need DH to read too.
The Magic of thinking Big. Really liked this one. Thinking I need to integrate this into my life one step at a time. Thinking too small, and acting that way, has hurt me more than any other obstacle I'd say. Reading this book alone made a huge difference in the enthusiasm and quality of the last few school application essays. Yay for no excus-itis!
And of course the favorite blogs and forums MMM, here, some Crawling Road and just discovered Brave New Life. Getting a bit bored with The Minimalists and Colin Wright. The latter is starting to feel like getting a commercial sent to me.

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Post by secretwealth » Thu Feb 07, 2013 5:42 pm

TMND should be required reading in every high school in the country. That book would have changed my life, if I hadn't found Jacob's blog first!

George the original one
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Post by George the original one » Thu Feb 07, 2013 6:34 pm

> On a different note, is there an economical way to

> buy free range chickens and wild caught salmon?
Apart from DIY? Probably the only way is to live near the source. Or find the wholesaler. Buy generic and avoid "branded" (e.g. Copper River salmon is "branded").
In Oregon and Washington, areas around the Indian reservations and seaside tourist destinations often have stands selling salmon at a value. Alaska is swimming in salmon. It's also helpful to know the salmon fishing seasons as you're not going to find fresh salmon while the fishery is closed down.

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Post by CS » Mon Feb 11, 2013 6:18 pm

@secretwealth I would have to agree. That book is amazing. DH is reading it now. This forum has generated fantastic finds for the reading list. It takes some effort to keep up with the books as they come in from the library.
@George I have noticed the seafood is cheaper on the east coast than the midwest when shopping for groceries during the week. Makes sense, but sinks in much more when it is coming right out of your wallet. Maybe food costs will be a factor in choosing a place to live later when FI.

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Post by CS » Mon Feb 11, 2013 6:42 pm

Been working on the first numbers post and how to format things so they are understandable. I'm posting my income as gross since to do otherwise would require doing my taxes now and working backwards to figure out the post tax income. Just dealing with raw numbers is enough work for now. Maybe the post tax figures will come later.
Also I noticed that the expenses exceeded the income. Was puzzled about that one and then realized we actually had some money in savings at the beginning of the month that has since been used. Additionally, some of the expenses were put on credit cards and will be paid next month, although for logging purposes I am putting them down in the month we made the purchase. We pay off the credits cards in full each month.
Gross Income

Total Expenses

Unusual Expenses

Heloc Payment 3425.67

Federal Estimated Tax 8000.00 for Q4 2012

State Estimated Tax 3000.00 for Q4 2012

Plane Tickets 2479.00 (business expense, will be paid with pre-tax dollars)

Rental Car 959.40 (reimbursed as part of income)

School application expenses 485.90

Misc. work expenses 59.37

Repaid SEP 60 day rollover 9650.00
Budget Expenses


Health Insurance 797.07

Misc. Medical Expenses 100.90

Med. Supplements 225.03

Groceries 1102.75
House payment 959.83 (does not include property tax and insurance)

Utilities 290.09

Household goods, misc expenses 225.53

Phones 162.98

Fuel 211.00

Car maintenance 56.56

Cat care 265.82
Movies/Netflix 23.00

Coffee out, bars 31.60

Dining out 81.00
Some notes on the expenses:

Yes, the medical is killing us. We know. The insurance costs will go down next year as the Cobra will be dropped for a more conservative plan. Not sure how to bring the supplements down. Most of them should not be long term so hopefully it will take care of itself.
The Grocery bill was a shocker. That is for two people!! We have set a hard line of $770 for this month, which is exorbitant for most people here I know, but will be a 30% reduction for us. We'll start there and get better at it I am sure.
House costs do not include tax and insurance. The insurance will start coming out monthly next month (previously had been paying annually) and our property tax is due in May ($1400 for six months). I will probably just list it as a lump sum expense that month.
The Unusual expenses are out of this world. The taxes were planned for, but we did not have savings for them, except for a few thousand, because we had been putting every dime towards paying off the heloc and student loans. The heloc balance will be done in February and then it is just savings for taxes and sep contributions to reduce our tax costs for 2013.
I don't really know what to put down for a savings rate. The heloc payment basically absorbed our savings (and reduced our interest costs) but the $9650 to repay the retirement account will make a difference in our bottom line. So roughly 30%?
Our end goal for the household budget is to get it to $2500 for two people. We can make a dent with the phones and food now but won't get close until we sell the house and deal with the medical at the start of 2014. After reading all the journals here I am sure we can do it, it is just going to take some time.

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Post by anomie » Tue Feb 12, 2013 12:52 am


+1 for The Millionaire Next Door
Found a little spreadsheet of wealth accumulation based on TMND. I converted it to a Google sheet:

https://docs.google.com/spreadsheet/ccc ... sp=sharing
Can see how yer doing acc. to TMND! :)

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Post by secretwealth » Tue Feb 12, 2013 3:29 am

Great spreadsheet--thanks!
Sadly, I'm an AAW--spending my 20s earning $20k/yr. as a postgrad really set me back. Shameful.

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Post by CS » Tue Feb 12, 2013 5:28 pm

That spread sheet is great! Thank you. I, too, spent way too much time in school but a lot of it was for fun, so at least it was not a complete waste experience wise. Helps zero with the retirement goals though. Definitely an UAW, even going by my old salary.
Better to learn this lesson late than never. Don't want to be like those old doctors, asking if I can ever retire.
On a different note, been reading Escape from Camp 14. Gives some great perspective on what sacrifice is and what it really means to live without. Giving up a cell phone plan with data is not a hardship.

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Post by CS » Sun Mar 10, 2013 12:34 am

Have the numbers for another month. We did great on reducing the regular budgeted expenses. Things were calmer on the unusual expenses as well. We also had great news in the job has been extended until summer AND I got accepted in a school with full funding for tuition and fees and a bit left over for living expenses. That is a huge plus for ER semi-retirement plans. Plus, the school is in sharpening writing skills for a whole different career, which is excellent since the current work is about as sharp a spike as you can get for specialized work skills. Talk about feeling vulnerable.
February 2013
Income total 26698.93
Unusual Expenses

Heloc payments (PAID OFF!) 9664.72

Federal Estimated Tax

State Estimated Tax

Plane Tickets 1419.4

Rental Car (will be reimbursed) 937.46

School application expenses 101.25

Misc. work expenses 229.18
Unusual Expenses total 12352.01
Household Budget Expenses


Health Insurance 797.07

Misc. Medical Expenses 100

Med. Supplements 33.93

Groceries 738.91
House payment 959.83

Utilities 357.39

Household goods, misc expenses 331.59

Phones 162.98

Fuel 150.15

Car maintenance 0

Cat care 74.09
Movies/Netflix 7.99

Coffee out, bars 18.16

Dining out 111.5

Clothes 54

Household budget total 3897.59
All expenses 16249.60
Savings 10449.33
Savings Rate 39.14%
That savings rate is deceptive since it does not include any of the taxes that we incurred this month for the income. Assuming 30%, that wipes out most of the savings, but I will include the heloc payoff as counting towards the bottom line.
We brought the groceries down about $400, which feels like a real win. The phones are still ridiculous. Going to have to fix that.

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Post by m741 » Sun Mar 10, 2013 2:20 am

Congrats on paying off the HELOC! That appears to be roughly 1/3 of your expenses right there (if it can be considered an expense). I'd say you've got a good trend going on. I'm guessing there's still some fat to trim in the area of phones, utilities, groceries. Also, out of curiosity, why include things you'll be reimbursed for as expenses?

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Post by CS » Sun Mar 10, 2013 5:48 pm

m741, Thanks! I've included the reimbursement out of pure laziness. I've included the reimbursement repayment amount from last month as income for the same reason. I'm trying to keep this journaling up and if I make it too complicated it will be tempting to quit. Plus, this job, and the reimbursement issue will go away by summer.
tldk: I'm lazy. ;)

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Post by CS » Mon Apr 22, 2013 6:09 pm

Wow, has it only been a month since posting? It feels like so much longer.
A lot is happening right now, so running the actual numbers is not high priority. The good news is that we made our budget for nearly all categories and ended up under budget for the month. So we are looking at tightening those numbers again.
A big positive is that my husband got into a grad school with full funding/TA ship. Another plus for reducing fragility. The only problem is that it is in a neighboring state from my school. So now, the compromise is for me to travel back and forth for some weeks, since I only have obligations for three days a week. Not very ER to have such a commute, but I must admit some excitement at the challenge. The biggest of course is how to do it while keeping our overall costs low.
For instance, it would make the most sense if I rented a room or took the smallest place possible to save money and had only a bike. I can use public transport for nearly everything and walk/ride to school on those days. The state is always moderate so I have no anxiety about having several three mile walks a week or more. Fits right into the goals of getting into better shape.
I have also gotten very good at plane commuting and already have an excellent backpack that we used in Europe for taking everything I need for four or five days. Actually, there is not much difference between four or five days and month, is there? (As long as you are willing to wash your stuff, that is...)
And the thought of functioning well without a car, in a state that that idolizes them does appeal to the ego.
Side note, I am amazed how many times I have to re-edit to fix typos. Anyone else?

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