Standard Staples' Journal

Where are you and where are you going?
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Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Post by Standard Staples »

Long time lurker, first time poster. After seeing the motivation and value people are generating from these journals, I decided to start one to track my progress. I'm also hoping to gain useful advice in how to proceed with investing my available funds.
It seems like everyone has a slightly different way of presenting their income, assets, etc., but I'll do my best to present all the information.
Regarding ERE, I don't have a specific date nailed down, just yet. We are planning on having a second baby in the next 2-3 years, which will certainly shift expenses. Ideally, I'd like to have my primary home paid off and be ready to call it quits after the second child enters college, so my timeline is pretty wide. If I can reduce it, clearly that would be an excellent goal for this journey.
==============================================================

About me:

28, married, 3 month old baby at home. We live in the southeast part of the U.S. The only debts we currently have are mortgages on our primary residence and one rental property. We have close to $100K equity in our home, but we are roughly $40K upside down on the rental. We have two very reliable vehicles, both paid off.
===============================================================

Income:

~$10,000/month combined gross + ~$300/month net from one rental unit. I travel relatively often and can clear hundreds in per diem, but I don't rely on this.
===============================================================

Assets:

Vanguard Roth IRA: $43K

Vanguard Rollover IRA (from former 401k): $14K

Vanguard Mutual Fund: $1K

T Rowe Price IRA (Dividend Growth Fund): $6K

Former Employer's 401K: $10K

Current 401k: $9K

Wife's 401k: $6K

Cash: $39K
TOTAL: $128K
===============================================================

Debts:

Primary Residence Mortgage: $234,839 remaining @ 3.875% (29 years left on 30 year)

Rental Mortgage: $146,072 remaining @ 4.875% (29 years left on 30 year - all expenses covered by rental income)
===============================================================

Current Approach:

My 401k: 5% - Fully matched/vested

Wife's 401k: 8% - 50% matched/fully vested

My Roth: $5,500/yr (maxed out for 2013)

Wife's IRA: $5,500/yr (earmarked for baby's future education, if needed)
Paying an extra $144.83/month on the primary mortgage principal(rounding up to an even hundred number). Sometimes I funnel a little more toward this, but I'm shying away from this method with the interest rate being so low. It's fun to play with the amortization table, but I know I can do better with other investment paths.
Another $1,000+/month earmarked for investments.
===============================================================

Advice Needed:

I'm enjoying the passive income generated from the rental unit, but I have minimal interest in acquiring another property at this time, so I've become very interested in pursuing the Dividend Growth method of investment. In the past, I've leaned toward mostly mutual funds, both U.S. and international, but I did place my wife's IRA in a Dividend Growth fund. After doing some extensive reading, I'd like to place the extra $1,000/month in a brokerage account and begin building a true dividend portfolio.
I can pull back on the added mortgage principal and throw that money toward dividend stocks, as well, if recommended.
Any advice on these matters would be incredibly appreciated, as I've never truly ventured in to the game of individual stocks/active asset management.
===============================================================

I guess that's all for now. I'll start posting recent monthly numbers next, and I look forward to the help and motivation this site provides!


Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Post by Standard Staples »

March Stats:
Income: $7,925.37

401k: $1,185.34

Work Reimbursement Profit: $629.34

Rental Unit: -$1,496.41
Total: $8,243.64
Expenses: $4,988.44
Saved: $3,255.20 (39.49% Savings Rate)

===============================================================
Unusual month, in that I turned the rental property over to a new tenant. The carpet badly needed to be replaced, and there was standard cleaning/paint. The unexpected part was $1,400 in water damage when the refrigerator had a bad leak shortly after move-in. Since I have an insurance claim for a more significant water heater problem in December, I couldn't justify issuing a claim on this one. I'm still on track to turn a profit from the unit, even with this set back. Whether positive or negative, I treat the rental property as a completely separate income entity on all my spreadsheets.
===============================================================

Typical Expenses:
Interest/Escrow/HOA: $1,375.38 ($265.00 in quarterly HOA)

Daycare: $1,100.00

Utilities/Security System: $432.27

Groceries: $342.82

Gas: $238.43

Baby: $217.51

Life Insurance: $151.50 (Need to make some changes here)

Dining Out: $112.29

Mobile Phone: $88.54

Entertainment: $87.92

Miscellaneous: $78.10

Haircuts: $78.00

Gifts: $22.50

Pharmacy: $13.23
===============================================================

Unexpected/Irregular Expenses:

Car Repair from Accident: $500.00 insurance dedutcible

Dishwasher Repair Visit: $79.95

Semi-annual hair highlight (wife): $70.00
===============================================================

Not a bad month. At this point, I'm pretty comfortable with a savings rate in the high 30% range. February and January we got in to the 60's, but it was due to a new baby gift and a larger than expected tax refund. My annual forecast puts us in the mid-high 30's from here on out. I'll be searching for useful ways to up those numbers.


George the original one
Posts: 5404
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Post by George the original one »

I feel you can count the principal of your mortgage payments as savings, so that will boost your savings rate. The childcare expense is understandable and shocking at the same time... don't give up trying to reduce it.


Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Post by Standard Staples »

Thanks, George. I am currently counting principal as savings, so that factors in to the stated rate. I agree regarding the daycare, but the truly shocking part is that price is a bargain in this area. Unfortunately we're going in the opposite direction, as the $220.00/week is now increasing to $235.00/week, since we have already elected to change daycare based on problems with the first. It's a big pill to swallow, but losing either of our incomes would certainly be a bigger one.
I maxed out the allowable dependent care pre-tax paycheck deduction of $5,000 for the year, so some months with see reimbursement added to the monthly income numbers.


Swede
Posts: 26
Joined: Wed Jul 13, 2011 3:56 pm

Post by Swede »

Is it standard procedure in the US to put a 3 month old baby at daycare? Just curious, here in Sweden the mother usually stays at home for a year or so and then the father for maybe half a year.


Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Post by Standard Staples »

It depends a lot on the company you work for, but my wife's paid maternity leave was right around 12 weeks. Paternity leave for the father is rare, and usually non-existent. I was given two weeks (without having to use vacation time), and that would be considered very generous.
What complicated things a little bit more was her boss taking a new job with the company in a different state near the end of her leave, pushing her to get back even earlier.


Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Post by Standard Staples »

April Stats:
Post-Tax Work Income: $6,182.59

401k: $922.28

Work Reimbursement Profit: $120.00

Rental Unit: $306.07

Daycare Reimbursement: $1,320.00

Miscellaneous: $521.66
Total: $9,372.60
Expenses: $5,673.17
Saved: $3,699.43 (39.47% Savings Rate)
===============================================================

Typical Expenses:
Interest/Escrow: $1,156.60

Daycare: $1,145.00

Utilities/Security System: $410.45

Groceries: $295.11

Miscellaneous: $151.46

Gas: $206.43

Baby: $195.01

Gifts: $155.04

Life Insurance: $151.50 (Need to make some changes here)

Mobile Phone: $118.51

Dining Out: $87.62

Haircuts: $76.00

Dog: $32.09

Entertainment: $11.54
===============================================================

Unexpected/Irregular Expenses:

6-Month Car Insurance Bill: $696.00

Vacation Deposit: $300.00

Gym Rack Parts: $140.50
===============================================================

I opened a new brokerage account with $5,000.00 from my relatively large cash savings and initiated three dividend stock positions. These are my starting point for this area of investment, and they are currently poised to net $140.00/year in dividends. My goal is to start funneling $1,000.00/month to this account, building a portfolio of strong dividend paying companies.
I also ended up paying an additional $399.85 in principal on my primary mortgage. I typically only round up the payment due with an additional $144.83/month, and in the interest of building the brokerage portfolio, I plan to hold the monthly additional principal at this amount for the remainder of the year.
I work out in my basement, and I needed a safe way to do some additional work. Using some online plans, my friend and I built a solid power rack with lumber and plumbing pipe. The cost was $140.50, and I already consider it a very valuable investment in myself, both for health and safety reasons. To buy one of these would be $400.00+, so I'm very happy with the results.
Gifts were slightly high this month, with my Mom's and a close friend's birthdays. At this point, I'm still comfortable with a savings rate in the high 30% range. My annual forecast has us on track for mid-high 30's from here on out.


Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Post by Standard Staples »

May Stats:
Post-Tax Work Income: $7,552.64

401k: $1,120.36

Work Reimbursement Profit: $158.25

Rental Unit: $306.07

Daycare Reimbursement: $603.00

Miscellaneous: $742.41

Dividends: $51.76
Total: $10,534.49
Expenses: $4,593.82
Saved: $5,940.67 (56.39% Savings Rate)
===============================================================

Typical Expenses:
Interest/Escrow: $1,154.02

Daycare: $1,160.00

Utilities/Security System: $360.17

Groceries: $364.25

Baby: $261.52

Home: $216.01

Gas: $206.90

Miscellaneous: $178.96

Life Insurance: $151.50 (Changes coming in June)

Gifts: $78.31

Mobile Phone: $86.33

Dining Out: $135.97

Haircuts: $52.00

Dog: $49.69

Entertainment: $42.37

Doctor: $25.00
===============================================================

Unexpected/Irregular Expenses:

Vacation: $70.82
===============================================================

I rolled over an old IRA in to my existing brokerage account and opened a few new stock positions. Along with my existing Roth IRA, I am currently projecting a little over $1,400/year in dividends.
I broke from what I previously said, and I paid an additional $806.18 in principal on my primary mortgage. With the market racing upward, I'm keeping an eye on a correction. I decided to allocate some funds to the "safe" return. I shaved 2 months off my payoff date, and I'm now 23 months ahead of schedule. I did add $1,000.00 to my brokerage account, and I opened a new position with those funds.
I have finally done what I needed to do with the life insurance, and it will be cancelled in June. My wife and I both qualified for significantly more funds on a 30 year term policy, and combined we'll be paying roughly half of the current $151.50/month. The bonus is that my existing policy has developed a cash value of over $5,000.00, and if I receive the funds this month, they will dramatically boost June's savings rate.
Overall, my savings rate came in significantly higher than expected. I was able to delay the medical bills and new dishwasher until June, and a carpet settlement from our builder along with $250.00 in new account bonuses helped push our numbers way up.
I'm still projecting the second half of the year in the high-30's for savings rate, but I am now projecting a year end savings rate of 46.72%.


Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

June Stats:

Post-Tax Work Income: $6,182.54

401k: $922.28

Work Reimbursement Profit: $178.38

Rental Unit: $286.07

Miscellaneous: $5,017.83

Dividends: $510.20


Total: $13,097.30

Expenses: ($6,043.83)

Saved: $7,053.47 (53.85% Savings Rate)



===============================================================

Typical Expenses:

Interest/Escrow: $1,150.12

Daycare: $940.00

Utilities/Security System: $324.17

Groceries: $267.60

Baby: $257.68

Home: $97.20

Gas/Oil Change: $152.03

Miscellaneous: $273.27

Life Insurance: $228.13 (Changes finalized for July)

Gifts: $113.07

Mobile Phone: $91.34

Dining Out: $135.99

Haircuts: $52.00

Dog: $35.00

Entertainment: $16.54

Dentist/Pharmacy: $58.50


===============================================================

Unexpected/Irregular Expenses:

Dishwasher: $663.60

Baby Hospital Delivery Bills: $671.13

Car Dent Repair (Hit & Run Shopping Cart): $120.00


===============================================================

The biggest potential news coming out of this month is that I am expecting an offer for a new job sometime next week. We're anticipating a ~15% raise, plus a generous 15-30% bonus to be paid out every February. I am fairly certain I'll accept, and it should improve the landscape of our finances a little bit more each month. It's a work from home position plus travel, so my fuel costs should drop, but my energy costs will inevitably rise. I also anticipate my dining out costs to drop, as I have been prone to $5-8 lunches out with co-workers pretty regularly.

We finally sprung for the dishwasher, and I purchased a new whisper quiet unit with a 5-year warranty. It hurt to pay for, but there was a very good sale price, and it is already a vast improvement over the old one. I'm still trying to sell the old one craigslist for $100 to recoup some of the cost.

I had to pay the life insurance premium for June, as my new policies were not active before the due date, which is why life insurance is so high this month. From here on out, to cover both my wife and I for significantly more money, the monthly bill will be $76.63. By closing the former whole life insurance policy, I received a cash value check for $5,674.20. I decided to allocate $5,000 to June and the remainder to July's budget. This allowed me to place an additional $4,000 in my brokerage account, and combined with the completed rollover of a former 401k, my current dividend projections sit at $1,567.97 for 2013. 2014 is already estimated at ~$2,000.00 and growing.

I once again paid an additional $814.01 on my mortgage principal, shaving another 2 months off my payoff date.

Overall, my savings rate came in about where I expected, once I factored in the life insurance check. I'm still projecting the second half of the year in the high-30's for savings rate, but I am now projecting a year end savings rate of 47.34%.

sshawnn
Posts: 458
Joined: Tue Mar 08, 2011 8:17 pm

Re: Standard Staples' Journal

Post by sshawnn »

Hey there.
Seems like you are doing well being an above average saver. I think it is a brave action to post all your numbers.

You seem to be encountering some costs that you should be able to obliterate. Originally, the last E in ERE stood for extreme. (This is not a Forbes forum so be prepared to think outside the box a little.)

Just as you mentioned in your first post I intend to give you motivation and value. Start thinking a bit differently about your everyday activities.

Why did you replace or buy a dishwasher? Personally I found scraping and preparing dishes for the washer and loading and unloading as just washing the dishes in the first place. Instead of a dishwasher we have a commercial sink with a sprayer.

I have two kids and a working wife. I understand daycare. Geez thats a shit ton of money. Have you figured tax brackets, cost of working, dollar value of your time YMOL style, etc. etc. Without you or your wife working to care for the kids? When you crunch the numbers you may be surprised.

Have you considered just setting your house alarm every night and discontinuing the monitoring service? The monitoring is likely costing you a dollar a day. The police will get there quicker if you actually call them and the alarm horn will likely scare of petty thieves upon entry to your place.

The only other category that I can pick on is your haircut section. If you are costing the family budget haircut $, get over it and get some clippers and give yourself a buzz.

I question any type of investing before you are completely debt free including a home mortgage. This is a volatile argument but I think a great deal of peace comes from being completely debt free.

You are excelling in most areas with consideration to dual full time employment and kids!

Feel free to read and comment on my journal. It may give you a sense of where I am coming from.

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

Thanks for the reply. I sincerely appreciate the feedback and advice. I'll answer the suggestions one by one, but I think a broad answer to some of these is that while my wife is completely onboard with saving and being frugal, she isn't quite at the extreme mindset, yet. To that effect, I have learned to pick and choose my battles and allow certain "luxuries." To answer your questions:

1) I never really even thought of the commercial sink/sprayer combo, but that’s a pretty sharp idea. Whenever this one goes out (hopefully 10+ years from now), I will seriously investigate that option. Especially once the kid(s) are older, I think doing the dishes is a good chore to teach them responsibility around the house.

2) Regarding the daycare issue, I would say this goes a little bit deeper than simple numbers at this exact moment. Between the two of us, I make more, but our salaries are pretty even (58%/42%). Even with certain tax breaks, our ERE goals would be significantly slowed if she stopped working. From a longer term perspective, she's in a position that would be close to impossible to get back in to once the kid(s) are in school full time, and she does enjoy it. Daycare is expensive, but it is a fair price for the area, and we do see plenty of benefits. He's getting exposure to lots of things outside of the house, and he's able to interact with lots of other adults and children. To save $60-75/month (at best), we would have to drive another 15-20 miles north.

3) That's an incredibly interesting idea and one I had never thought of. My problem would be related to my current working schedule. I’m not worried about my stuff being stolen. That’s easily replaced. But I travel at least 1 week per month, and with my potential new job, it will increase to about 1.5-2 weeks per month. In case of an intrusion, my wife will naturally run and grab the baby, and God forbid she didn't have time to get to the phone before the worst could happen. I'm not sure saving $40/month is worth that (admittedly small) risk. I wouldn't be able to live with myself if either of them were harmed as a result of cutting the service.

4) Haircuts are a luxury. No doubt about it. It's one area that we spend far more than we should. My barber charges $20 + tip, but at this stage of my life, it is important to me. My wife gets cuts far less frequently, but she does get highlights every few months (including June) which add a good bit to the bottom line. The only defense I have is that we are both in front of customers on an almost daily basis, and while it extremely vain to say, appearance helps with confidence in presenting and selling. I do intend for this to drop significantly once we cut the cord on the workforce.

5) Regarding the house, I do have mixed feelings on this. I actually posted a topic in the Money section about paying down the house being a Dividend Champion, in that the “dividend” is immediate and grows by the mortgage rate each and every year. This seems to be a topic of significant contention amongst the internet as a whole. Some say it’s foolish to carry even $1 in debt, some say it’s foolish not to leverage these low rates and grab smart investments in the meantime. I guess I fall somewhere in the middle, and I try to do both.

I hate to be the guy that basically says “thanks, but I’m going to keep doing that,” but I hope my mindset on these things at least seems somewhat justified. I really do appreciate you taking the time to comment. I actually have already read through your journal, and while I haven’t commented, your life modifications have been unbelievable. Your commitment to ERE is truly inspiring!

George the original one
Posts: 5404
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: Standard Staples' Journal

Post by George the original one »

> I wouldn't be able to live with myself if either of them were harmed as a
> result of cutting the service.

Really? Like a service is going to prevent them from being harmed? Or do you live in such a bad neighborhood that home invasions are a common occurence?

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

George the original one wrote:> I wouldn't be able to live with myself if either of them were harmed as a
> result of cutting the service.

Really? Like a service is going to prevent them from being harmed? Or do you live in such a bad neighborhood that home invasions are a common occurence?
Absolutely not. We live in a safe neighborhood where invasions are quite uncommon, but it only takes one occurrence. I'm not asserting that the service would prevent anything from happening, but it's a useful fail safe for a marginal cost, and it genuinely helps my wife sleep easier at night. I understand that many would not agree with this decision, but I see value in every penny of it.

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

July Stats:

Post-Tax Work Income: $8,081.27

401k: $922.28

Work Reimbursement Profit: $98.72

Daycare Reimbursement: $786.58

Rental Unit: $306.07

Miscellaneous: $781.61

Dividends: $57.52


Total: $11,034.05

Expenses: ($5,674.99)

Saved: $5,364.65 (48.51% Savings Rate)


===============================================================

Typical Expenses:

Interest/Escrow: $1,147.50

HOA Dues: $265.00 (Quarterly)

Daycare: $1,175.00

Utilities/Security System: $411.69

Groceries: $320.68

Baby: $256.83

Home Improvement/Supplies: $247.79

Gas: $179.58

Miscellaneous: $55.51

Life Insurance: $76.63

Gifts: $81.12

Dining Out: $147.16

Haircuts: $74.00

Entertainment: $26.64

Dentist/Pharmacy: $44.07


===============================================================

Unexpected/Irregular Expenses:

Vacation: $577.57 (Balance of Upcoming Cruise)

Home Furnishings: $588.22


===============================================================

The good news is that I did receive and accept the new job offer this month, and I started on 7/22. I can already feel the drop in expenditures on food and gas, as my expenses on the road are covered, and I have not been tempted to run out for lunches while at home. The actual raise came in at 14.1% base, plus 15-30% bonus. I already received one partial paycheck, boosting my July income a bit. I'll be receiving my final paycheck plus vacation cash out from my old job in August, so those numbers should look pretty good. Also, as this company will be reimbursing my cell phone and internet costs, I'm now moving them in to the work category, rather than expenses.

The two big irregulars this month were the balance of a vacation we're taking in September and two minor house "upgrades." We spruced up the laundry room, which was just bland and difficult to use, with a very high shelf my wife had trouble reaching. I was able to paint, install three new floating shelves, a new light fixture plus useful accessories/storage for a very reasonable amount of money. I'd like to post a picture, but I don't have them hosted anywhere. Not sure how to do it on here without outside hosting. We also sprung for a dresser in our master, which we've needed for quite some time. My wife is thrilled with both, and so am I.

I once again paid an additional $819.30 on my mortgage principal, shaving another month off my payoff date.

Overall, my savings rate came in higher than expected with the new job. I am also now forecasting a savings rate over 40% for every month the rest of the year, and my new overall projected savings rate for the year is 50.72%.

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

Thanks, bigato! And good point on the employer expense. That's how I'm going to treat those in the future.

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

AUGUST STATS

===============================================================

Income:

Post-Tax Work: $9,249.80

401k: $998.14

Work Reimbursement Profit: -$97.07 (Bought an office chair and haven't had a month go by to expense out Cell Phone/Internet, yet)

Daycare Reimbursement: $554.60

Rental Unit: $306.07

Miscellaneous: $253.14

Dividends: $50.62


Total: $11,315.50

Expenses: ($5,613.60)

Saved: $5,701.70 (50.39% Savings Rate)



===============================================================

Typical Expenses:

Interest/Escrow: $1,144.85

Daycare: $940.00

Utilities/Security System: $519.87

Baby: $402.17

Groceries: $313.90

Home Improvement/Supplies: $129.80

Gas: $143.36

Miscellaneous: $75.48

Life Insurance: $76.63

Gifts: $142.86

Dining Out: $76.64

Haircuts: $26.00

Entertainment: $14.51

Dentist/Pharmacy: $25.00


===============================================================

Unexpected/Irregular Expenses:

Termite Control: $795.00

Vacation: $373.80

Medical: $350.00 (Lingering Baby charges from 12/2012)


===============================================================


Unfortunately, I noticed a termite start up in the garage earlier this month. After having it inspected (no damage, yet, beyond a small line of drywall), we decided to go with a highly recommended company/protection plan. The upfront cost was hard on the budget, but the annual renewal is very inexpensive and it includes any necessary repairs, so it should be worthwhile.

My wife convinced me to add in a long weekend getaway for my birthday later this month, so that's where the new vacation costs come from. There will be some more costs, but I'm glad to do it.

I ramped up some investments this month, socking away $6,500 in my brokerage account, and slowed the additional mortgage principal to $412.95. I'll have an $11,500 401k rollover to invest with in September.

Overall, my savings rate came in higher than expected. With the added vacation costs, I'm forecasting us back down to 49.44% for the year. Hoping to push this back up over 50.00% before year's end.

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

SEPTEMBER STATS

===============================================================

Income:

Post-Tax Work: $6,893.97

401k: $916.16

Work Reimbursement Profit: $150.15

Rental Unit: $306.03

Miscellaneous: $219.83

Dividends: $438.11


Total: $8,924.25

Expenses: ($5,015.98)

Saved: $3,908.27 (43.79% Savings Rate)


===============================================================

Typical Expenses:

Interest/Escrow: $1,142.19

Daycare: $835.00 (Decided to make this net cost from now on)

Utilities/Security System: $491.90

Baby: $278.18

Groceries: $215.73

Home Improvement/Supplies: $15.63

Gas: $66.96

Miscellaneous: $94.42

Life Insurance: $76.63

Gifts: $77.99

Dining Out: $84.41

Personal Care/Haircuts: $155.14

Entertainment: $33.09

Dentist/Pharmacy: $66.25

Pets: $35.00

===============================================================

Unexpected/Irregular Expenses:

Car Registration: $415.78

Vacation: $821.68

Annual Jewelry Insurance: $110.00


===============================================================


Had a pretty spendy month with the vacation, but we accomplished a lot with that money, including a 5-night cruise, a long weekend with my family and a long weekend at Disney World for my birthday. Sometimes it really does pay off intrinsic value when you spend money you *could* choose to save. I'm not going to spend $800+ on vacation every month, and I'm excited to continue down the road to ER, but I don't regret one penny of it, and we kept it low with the use of points, gift cards, etc.

I added more to the investments this month, socking away $1,500 in my brokerage account, and slowed the additional mortgage principal to $143.52. I also invested in some strong dividend stocks with the 11,500 401k rollover. As the yield and performance has been below expectations, I'm also rolling over another old IRA in to my brokerage account in October. That will give me $15,000+ to invest.

My savings rate is going to jump significantly through the rest of the year. I investigated our upcoming tax burden/refund, and I wasn't impressed with the results. By boosting my 401k to 60% for the rest of the year, we'll drop in to the 15% marginal rate, making our traditional IRA contributions deductible and eliminating most of my dividend taxes. I chose 60%, because it pretty much maxes me out at $17,500 for the year. I probably should have investigated this earlier, but I think we're in good shape.

Overall, even with the vacation costs, my savings rate came in higher than expected. With my 401k adjustment, our forecast for the year shot back up to 53.06%. I feel 100% confident this will not drop below 50%, which was my goal for the year.

Thanks for reading!

theanimal
Posts: 2627
Joined: Fri Jan 25, 2013 10:05 pm
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Re: Standard Staples' Journal

Post by theanimal »

Two things I've noticed that you can improve upon (besides the child care), if you choose to do so. You have spend over $75 in gifts every month. That seems like a lot of gifts in a 6 month period, no? You can try making some of the gifts yourself, usually that holds more sentimental value and meaning than something you purchased.

Also, eating out is another big one. Try making dinners ahead, on Sunday or whenever, in bulk so that you simply just have to re-heat or assemble them. Saves time, money and the food tastes a whole lot better IMHO. Hope that helps.

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

I haven't updated in many months, and maybe a monthly update isn't in the cards for me. But I did want to come in and give a full year-in-review. It's always nice to discuss financial matters with like minded people, and even when I'm not actively posting, I read lots of journals. They're very inspirational.

2013 TOTALS

Work Post-Tax Income: $77,694.95

401k: $22,753.39 (Maxed mine out the last few months of the year to minimize our tax burden)

Dividends: $2,680.19

Work Reimbursement Profit: $1,265.43

Rental Unit: $226.88

Miscellaneous: (Gift Money, Tax Refunds, Credit Card Rebates, etc.): $17,146.88

Total: $121,767.72

Expenses: (-$59,696.66)

Saved: $62,071.06 (50.97% Savings Rate)


===============================================================

I'm not going to break out each category, as that would take awhile, and I'm pretty comfortable where most of them landed. What I do think is of significant interest is the growth in categories such as Net Worth, Net Worth in Years, and SWR. We made tremendous progress this year, as noted below.

END OF 2012:

Net Worth: $135,209.26

Net Worth in Years: 2.37

SWR: 42.24%

END OF 2013:

Net Worth: $242,326.67 (+$107,117.41)

Net Worth in Years: 5.33 (+2.96)

SWR: 18.78% (-23.46%)


I'm extremely happy with these results! If the market plays along, I can easily match the Net Worth growth and NW in Years growth, but I do realize that I can't continue on at this steady of a clip with my SWR. With our son being so young and planning for another, we are tentatively looking at a 20 year time frame on this journey, before we can sell our current house and move further south to our desired retirement location. That being said, I am forecasting FI in 10-12 years (possibly less), and at that point, we can evaluate our lifestyle and see if it makes sense to call it quits.

===============================================================

LOOK AHEAD FOR 2014:

Along with a solid tax refund, a bonus in February, and my wife in line for a promotion with a $10K+ salary raise, 2014 is shaping up to be very strong. Through the first three months, we're averaging a 60% savings rate, with a forecasted year end savings rate of at least 54%. Most of our expenses are fairly fixed/steady, but the baby spending has definitely gone down now that he's off formula and we have maximized our efforts at Costco. My tenants opted to stay another year, and they've been phenomenal, so the rental will keep churning money. The miscellaneous income category will be much smaller, as I won't have a $5,000 life insurance cash out, nor a large birth gift from my parents.

Sorry it has been so long since I last updated, but thanks for reading!

Standard Staples
Posts: 37
Joined: Thu Apr 18, 2013 8:56 pm

Re: Standard Staples' Journal

Post by Standard Staples »

I thought I'd check back in for a mid-year update on my progress:

2014 First Half Totals

Work Post-Tax Income: $45,866.36

401k: $6,677.41

HSA: $1,866.55

Dividends: $2,410.12

Work Reimbursement Profit: $1,327.49

Rental Unit: $2,714.37

Miscellaneous: (Gift Money, Tax Refunds, Credit Card Rebates, eBay, etc.): $4,220.86

Total: $65,083.16

Expenses: (-$26,357.55)

Saved: $38,725.61 (59.50% Savings Rate)

Net Worth as of 6/30/14: $296,770.37 (+$54,443.70 since End 2013)


===============================================================

The Good:

1) Fairly strong savings rate
2) I almost surpassed all of 2013's dividend income in 6 months, and by the end of 2014, I will have generated more than double what I did in 2014.
3) Rental unit still has strong tenants, and with the water heater paid off, net profit each month is over $400.
4) Work travel profit has been steady and growing.
5) I paid off more of the principal on our primary home, and we are forecasting to have knocked 3 years off the mortgage by the end of the year.

The Bad:

1) Daycare continues to be a significant expense, one that will total over $11,500 for the year.
2) Our long time SUV was getting up in age and mileage, and although it could have lasted longer, I purchased a new vehicle in May. This adds a car payment to our monthly expenses. The financing is so cheap, it didn't make sense to pay it off in cash, but we probably could have gone by or gotten something less expensive. That being said, we both love it, and it's extremely safe and will last 10+ years with ease. No regrets.

The Ugly:

I feel fortunate to say there is really nothing truly ugly and insurmountable about our current financial situation.

===============================================================

Looking ahead to the 2nd Half of 2014:

As expected, our tax refund was several thousand dollars, I received a work bonus of several thousand dollars, and my wife received her promotion, adding $8K to her annual salary. We almost hit a 60% savings rate for the first half of the year, and we even managed to get over the 70% mark in the month of May. For the remainder of the year, with no bonuses or tax refunds on the horizon, and two vacations and holidays coming up, I am forecasting a final savings rate around 54%, as previously noted.

Thanks for reading!

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