Barlotti in Boston II

Where are you and where are you going?
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Pension and sundry

Post by Barlotti » Wed Jan 14, 2015 6:50 pm

@GenX, I like that metaphor of leaving the campground cleaner than you found it.

I am waiting with baited breath for the end of January. For when the month ends, 70% of my pay will go to my 403b. For the next few months, I'll be living slim to get most of the way to the $18K permitted by the IRS. I try not to obsess about saving, but I do enjoy it so, and as I wrote a couple entries back, I'm dyeeeing to be a Prodigious Accumulator of Wealth.

This morning, I checked my pension doc, which only recently came available, and found that I have about $7K in my pension. Between the pension gain and the 403b, I should break $150K net worth in no time. I'd like to take this opportunity to remind my future self to CELEBRATE. I don't often celebrate and when I do, it's brief, but celebration is important. It will be April by my accounting and I see that The Central Square Theater will be performing a play called The Edge of Peace, the last in a trilogy inspired by oral traditions gathered by the Works Progress Administration. Maybe I'll go see that. Or maybe I'll take Patriots Day off and cheer on the marathoners. I ran the Boston marathon once and felt such melding with the crowd. When the Boston marathon was bombed, I cried at least once a day for about a week because I couldn't understand how anyone could do that to such open-heartedness, generosity and glee. I still cry when I think about the bombings, which you would know if you were here 'cause I'm a weepy mess all of a sudden.

I'm reading this fantastic book called "West with the Night" by Beryl Markham. You see, I generally don't like reading so when I like a book, it means something. To me. I have discovered through our dearly departed Ms. Markham that I enjoy lyrical writing. When the phrases are like music, with rhythm and shape, I enjoy reading!

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February net worth summary

Post by Barlotti » Tue Feb 03, 2015 1:17 pm

condo $188,000
403b $63,354
Roth $22,730
after tax $16,430
checking $753
pension $7,000 (conservative estimate)
ASSETS $298,267

mortgage $138,942
heloan $13,682
cc1 $303
cc2 $383
cc3 $6,799

NET WORTH $138,158

My net worth has increased about $6,700 from last month. It's not that great considering that I put $5K into my 403b and my discovery that my pension is worth about $7K. I'm feeling frustrated with my job.

There's this new man in my life and I really like him. What can I say, the hormones are talking loud and clear.

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Re: Barlotti in Boston II

Post by leeholsen » Tue Feb 03, 2015 1:39 pm

don't worry about that setback, almost everyone had it last month. at the rate youre increasing overall, months like January will not stop you.

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Re: Barlotti in Boston II

Post by pooablo » Tue Feb 03, 2015 6:19 pm

Ah, the love bug! It hits you when you least expect it. :) I've been happily dating a guy for the past 9 months. Good work on the savings too. :)

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Re: Barlotti in Boston II

Post by Barlotti » Wed Mar 04, 2015 11:33 pm

@leeholsen, thanks for the words of encouragement! I am so looking forward to FI.
@pooablo, congrats! I only hope my guy and I last that long. I'm very fond of him, but have some "anxiety around intimacy", to quote a friend.

condo $188K
403b $70K
Roth $23.7K
after tax $15.4K
checking $2K
pension $7K
ASSETS $306.7K

mortgage $138.6K
Heloan $13.6K
cc1 $0.4K
cc2 $0.6K
cc3 $6.6K

Net Worth $146.3K
My net worth increased about $8.1K in the last month. My investments, including my pension, are at about $116K. My goal for the year is to reach about $150K in investments, so I have about $34K to go. Fingers crossed.

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Re: Barlotti in Boston II

Post by jdc732 » Thu Mar 05, 2015 11:53 am

Wow, a $180,000 condo in the Boston area? Where do you live that is that cheap and still have access to the T? I thought I was doing well at $950/month for a two bedroom in Waltham. Good job!

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Dec, Jan, Feb expenditures

Post by Barlotti » Sat Mar 07, 2015 2:32 pm

@jdc732: I live in Quincy. Oddly, a London friend told me to check out Quincy. I couldn't believe how affordable it was, and I live a mile from the Ocean and a couple miles from Blue HIlls reservation. Move to Quincy! (Even though you're getting a fantastic deal in Waltham.)

I'm catching up on tracking expenditures.

December 2014
home repair 1083
mortgage 1081
condo fee 296
auto 296
work related 285
dining 268
gifts 239
groceries 203
entertainment 176
household 136
health and fitness 119
medical 115
utilities 85
cash 62
misc 55
vacation/travel 28
charity/donation 20
clothing 16
pets 8

January 2015
condo fee 296
dining 295
household 205
mortgage 200
vacation 166
auto 137
entertainment 136
groceries 106
health and fitness 91
misc 66
cash 62
medical 43
utilities 32
gifts 14

February 2015
mortgage 1003
vacation 692
dining 452
auto 212
cash 142
utilities 97
clothing 75
gifts 51
health and fitness 51
groceries 45
work related 41
pets 28
entertainment 25
household 8
medical 6

I feel OK about my spending. I spent about $1K on a new range in December. I spent about $1K in February on a trip to San Diego. I think my 6 month moving average has trended down. If I have some time, I'll go through my journal entries and make some graphs to see whether this is true. It's been a hard, record-breaking winter in Boston, and I'm glad I went to San Diego.

I worked on my taxes tonight and have about $2K coming back to me. I'll use the refund to top off my Roth IRA. I'm glad I reviewed my December expenditures as I picked up on a few charitable donations I should add to my itemized deductions.

I joined Planet Fitness yesterday and am going to try and walk 10K steps every day on the recommendation of my doc. Today, I walked over 4 miles and took only 9K steps!

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Savings fatigue, why?

Post by Barlotti » Mon Mar 09, 2015 11:00 pm

I am suffering from savings fatigue. I feel like I look at my numbers every month and although I'm pretty happy with my progress, tonight I feel exhausted.

I've been using my friends' savings as benchmarks. A year or two ago, a 40 year old friend told me that she had $110K in her 401K, and I set that as my goal. I am 39 now and have about $110K in investments (although not all of it is in tax-advantaged accounts). A few months ago, a 39 year old friend told me that she had about $200K in her 401K and about $200K in home equity. Based on that, I decided that I need $200K in investments ASAP. With diligence, I should get there by age 41. A couple months ago, another friend told me that she had $400K in her 401K. I recently found out she's 43, and I think I could have about $400K in investments by age 43.

I'm tired of feeling like I don't have enough money for all I want to do: save faster, pay off mortgage, increase my emergency fund, pay off credit card debt. Yes, I am whining.

I met the former general counsel of a major investment company while eating lunch with a friend one day. He was eavesdropping on our conversation and interjected with, "contribute regularly to your retirement accounts, investing in index funds, and forget about it. It's better to focus on growing your career, and cultivating passion for your work." Here's the thing, I don't feel passion for my work. How do I find passion for work so the path to FI doesn't feel like such a slog?

P.S. I walked over 10,000 steps today, or 4.6 miles, by taking a ramble through MIT, Central Square, and Harvard Square.

P.S.S. I know that I could cut my spending by about $1K per month and have $12K at the end of the year to put towards my mortgage or my kitchen reno. But I'm still feeling fatigued.
Last edited by Barlotti on Mon Mar 09, 2015 11:56 pm, edited 1 time in total.

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Re: Barlotti in Boston II

Post by theanimal » Mon Mar 09, 2015 11:33 pm

Sounds like keeping up with the Joneses net worth style. There will always be someone with more. But remember that there are also always those with less!

You can only be the best you. Don't focus on the numbers/things you can't control. Keep plugging away, you'll get where you want to be. :)

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Re: Barlotti in Boston II

Post by Barlotti » Tue Mar 10, 2015 8:33 pm

@theanimal. Hahaha. I am trying to keep up with the Joneses. Best to keep plugging away.

I read Liberate Minds Journal, and that made me feel better because she's very calm, deliberate and consistent. Also, I re-read my journal and felt better seeing the progress I've made in spite of some flip-flopping.

In re-reading my journal, I was reminded of a goal I set back in January -- to save $35K this year. I'm going to start a count towards that goal. I've contributed $10,150 to my 403b so far. Apparently, I've also put $2K net into Vanguard. That means I've got $22,850 more to save this year.

Also, I revisited the question of when I might be FI. If I just keep plugging away, I'll have about $385K when I'm newly 44. If I put $118K towards my mortgage for five years (from ages 44 to 49), while continuing to fund my 403b and Roth fully, I'll have about $720K in investments and no mortgage on my condo at age 49. I think that's good enough to call FI. In ten years.

On another note, I'm going to look into driving for Uber to make a little side cash to pay down my mortgage.

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Finding a partner

Post by Barlotti » Thu Mar 19, 2015 9:45 pm

I'm sad to report that my recent relationship has disintegrated.

I've worked very hard to escape the legacy of abuse in my family-of-origin, but I've still got a ways to go. To me, financial independence means freedom, not just from the daily grind, but from being financially dependent on an abusive person.

I am happy to report that Boston is filled with incredible men.
Last edited by Barlotti on Mon Mar 23, 2015 7:59 pm, edited 2 times in total.

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Re: Barlotti in Boston II

Post by Chris » Fri Mar 20, 2015 6:22 pm

It's nice to see that you were able to end a post starting with "I'm sad" with "I am happy".

Positioning yourself amongst a collection of good people (online and IRL) is a good thing, and it sounds like you've done that.

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Re: Barlotti in Boston II

Post by llorona » Sat Mar 21, 2015 4:35 pm

Sorry to hear about the demise of your relationship.

Everyone has scar tissue to some extent or another. When there's a lot of it, it can be difficult to accept how much we still carry around years or even decades later. Sometimes counseling can be useful. Other times, it's just a matter of finding the right person and a healing relationship.

In the meantime, it sounds like you've got a fascinating pool of people to get to know.

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Re: Barlotti in Boston II

Post by Barlotti » Sun Mar 22, 2015 3:31 am

Thanks to both of you. I'd just like to find someone reliable and trustworthy, who I like and get along with, without freaking out along the way. Fingers crossed.

OK well, turning back to saving, I got my tax refund, but most of it will go towards March expenses. I'm still expecting to break the $150K net worth mark in April, and I'm going to start driving for Uber once my car is out of the garage. I'm fixing my front bumper, which shattered during this gawd awful Boston winter. The repair will be about $750. In addition, my car was towed ($90) on account of an expired registration ($60) that I couldn't renew because of some 2013 EZ pass violations ($260). This brouhaha is going to cost me about $1200, which pains me. We'll see how much money I make driving Uber.

I put about $500 of my tax refund into my Roth IRA. Counting down my savings goal, I now have $22,350 left to save.

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April net worth

Post by Barlotti » Fri Apr 03, 2015 10:48 pm

Assets 309,172
condo 188,000
403b 74,032
Roth 24,174
after tax 15,108
pension 7,000
checking 858

Liabilities 160,208
mortgage 138,190
heloan 13,461
cc1 1,440
cc2 518
cc3 6,599

net worth 148,964

For my $35K savings goal for the year, as of last month I had $22,850 more to save. I saved $250 in my Roth and $3,625 in my 403b. That means I have $18,975 more to save this year.

Update April 13, 2015: I just learned that I now qualify for Social Security retirement benefits!!!! I've been anticipating this for a couple years. I'm 39 years old, and this is marvelous!

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A decision to save cash, the solo 401k, maximizing tax deductions, and CPA

Post by Barlotti » Wed Apr 22, 2015 10:00 am

William Cowie, on Get Rich Slowly, is warning of another recession as part of a cycle that has repeated itself every 7 to 10 years historically.

In the aftermath of the Great Recession, I felt frustrated because I didn't have any cash on hand to buy stocks, which I knew to be "on sale". So for the rest of 2015 and 2016, I'm depositing my 403b contributions to a money market account (that should amount to about $25K).

In anticipation of my Uber quest, I've been reading up on the individual 401K, which seems like a pretty good way to increase my tax-advantaged retirement savings. As the sole proprietor of a business (an Uber business), I can contribute 25% of my earnings (before FICA taxes) to a 401k. This is more tax-deductible saving than via a SEP IRA in which I can contribute 25% of earnings minus half the FICA taxes due on those earnings.

The lovely thing about a SOLO 401K is that you can put in up to $53K in 2015, including 25% earnings, all 401K/403b contributions up to the $18K limit, and after tax money (which will grow tax-deferred). Also, you can elect to contribute to a Roth 401K, which could eventually be rolled over into a Roth IRA. The SOLO 401K sounds like a good vehicle for investing after tax money in high dividend yield investments.

I've also been thinking about maximizing tax deductions. If I rented out my condo, I could deduct my condo fee and property depreciation, which would add up to about $11K in deductions. I could also continue to deduct property tax and mortgage interest. If I rented a room in the Boston area, I could deduct half of rent paid up to $3K for the 5.3% state tax (I think this would reduce my tax liability by only about $500, but hey! don't look a gift horse in the mouth).

Also, I've been thinking about maximizing tax deductions for the Uber quest. I can deduct the 20% that Uber takes. In different combinations, I can deduct $0.56 per mile, parking and tolls, gas, car cleaning, smartphone, bottled water, car depreciation, insurance, car maintenance, registration fees. If you take the standard mileage deduction, there are other deductions you can't take. I'm not sure what will be the better deal for me, but the best bet is to keep careful records of mileage. I'm thinking of dedicating one of my credit cards to Uber quest expenses.

I spent several hours tonight reading about the individual 401K, rental property tax deductions, and registering an LLC. It may be a good time to talk to a CPA. I'd like to talk to an expert who can help me optimize. Also, CPAs carry liability insurance.

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Re: Barlotti in Boston II

Post by Chris » Thu Apr 23, 2015 3:06 am

Good news: in 2015, the standard mileage rate has been bumped up to $0.575/mi.

You can deduct actual car expenses (gas, maintenance, insurance, fees) or take the standard mileage deduction. And taking a sec. 179 deduction for depreciation, the car must be used for business > 50% of the time. So if it's an older car with decent gas mileage, you're likely better taking the standard rate. If gas is $3/gal and your car gets 30 MPG, that's a gas expense of $0.10/mi. You'd need a heck of a lot of maintenance to get beyond the standard mileage rate.

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May net worth and April spending

Post by Barlotti » Tue Apr 28, 2015 8:39 pm

@Chris, the standard mileage deduction sounds better.

I wonder whether it would be better for me to not take any deductions at all in view of my plans to open an individual 401k?...

I think that whatever expenses I deduct won't count as earned income, which means that the 25% of earned income contributed income tax free to a solo 401K will be less but I think my tax liability will be reduced by exactly the same amount (if I stay in the 25% tax bracket, which I expect). It seems that the advantage of deducting is that I keep my money more liquid. The advantage of not deducting is that I can get my money into a tax-deferred account. Also, if I get my money into a 401K, I could do the rollover and Roth conversion at some point... Maybe that's good enough reason to get more money into the 401K.

condo 188,000
checking 2,131
403b 76,855
Roth 25,003
brokerage 15,561
pension 7,000
ASSETS 314,550
investments 124,419

mortgage 138,189
heloan 13,351
credit card 5,967
cc2 1,958

NET WORTH 155,085 My net worth has increased by 6,121 since last month.

As of last month, I had 18,975 more to save to reach my 35K goal for 2015. This month, I've saved 1,958 in my 403b and 250 in my Roth. I have $16,767 more to save!

Update May 5:
I put another $200 into my Roth, which means that I have $16,567 more to save.

Update May 11: April spending
mortgage 1003
auto 619
vacation/travel 551
dining 426
utilities 293
credit card 170
groceries 164
entertainment 99
household 85
tax payment 65
cash 60
misc exp 55
health & fitness 10

I spent 3605 in April. I spent a lot of money on parking that I'd like to cut out. I also spent 85 on Amazon-on-Demand. Whew. I spent 551 to travel to my brother's college graduation. I'll do better in May!

Update May 24: A few months ago, I told myself I'd celebrate when my net worth reached $150K. That happened at the beginning of the month, but I forgot to celebrate. Traveling to Idaho for my brother's graduation was nice. I'd like to give him $500 to kick off his savings. When I saw him, he was talking about saving, and I'd like to support that.

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May 2015 spending and net worth

Post by Barlotti » Sun May 31, 2015 2:39 am

As usual, since I received my pay check last week, I've been reflecting on my financial situation. One thing is clear, I'm spending way too much, and I don't like that I'm carrying credit card debt, even though it's interest free for the time being.

I revisited Dave Ramsey, who's all about giving every dollar a name and using cash. I also revisited this woman who saved effectively using an envelope budget system.

I've tried going "on" cash before and it didn't stick. Why? Because it was too difficult to track my expenditures. I tried writing down each expense in a notebook, but that never lasted. I tried envelopes, and got flustered. I would live on cash for a month here and there, but felt dazed and confused about where my money was going.

But I'm spending WAY too much, and this MUST stop. I think a cash budget is the answer. The key question is, how do I make a cash budget work for me?

I spent some time today looking for a certain kind of app. I wasn't sure what, but after clicking through over a dozen, I think I found the app for me. It's called "envelopes 2" ... 93979?mt=8 in the Apple app shop, and it features digital envelopes! At the start of your budget period, you add money to your various digital envelopes, and take it out as you spend it. Envelopes 2 has a pleasant, intuitive interface. I'm going to give it a go starting June.

Now, here's my spending for May, which prompted this cash budget initiative:
$1004 mortage
$632 condo fee
$586 travel
$489 dining
$283 auto
$275 groceries
$139 bank fee
$106 cash
$104 household
$103 entertainment
$35 medical
$34 utilities
$23 misc exp
$15 clothing
$14 financial services
$10 health and fitness

For a total of $3858 spent in May.

In the way of comment, I paid two months worth of condo fee in May. I ended up spending more on my trip to my brother's graduation than anticipated. Unexpectedly, I paid for a hotel room and also for a rental car. In addition, I footed the bill for a couple restaurant meals. My auto spending is too high. I think I drove into work 5 times, costing me about $155 in parking. Also, I spent about $80 in gas, but this included gas to drive from the airport to the idyllic rural University town where my brother lives.

Returning to the subject of the cash budget, I crunched the numbers, and apart from my fixed expenses, I should be able to live on $500 cash a month, apportioned between groceries, dining out, parking, gas, entertainment, coffee, my cat, and treats. I'll try this with "gazelle intensity" for as long as I can. I'll need to in order to reach my $35K savings goal, while paying down the credit card debt and also my mortgage (the rate's set to increase from 2.49% to at most 4.5% in August of 2017 and I want to make sure my monthly mortgage expenses don't increase).

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Re: Barlotti in Boston II

Post by Chris » Sun May 31, 2015 9:23 am

What's with the $139 bank fee?

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