Gilberto de Piento's Journal

Where are you and where are you going?
George the original one
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Re: Gilberto de Piento's Journal

Post by George the original one » Thu Oct 01, 2015 11:29 am

Interesting that your savings rate is gradually climbing despite the peaks & valleys.

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Sun Nov 01, 2015 10:48 am

George the original one wrote:Interesting that your savings rate is gradually climbing despite the peaks & valleys.
I think setting a goal for spending (no more than $1500) and adding it up on a piece of paper as I go has really helped. I write down all the fixed costs on the first day of the month so that they are accounted for right away. It does feel like it's trending down.

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Sun Nov 01, 2015 11:15 am

October 2015

This month is my two year anniversary posting here at ERE! It was a good month too with a 66% savings rate due to three paychecks and spending little despite having to pay car insurance.

In honor of it being my two year anniversary I went a little chart crazy. See below for lots of charts and discussion!

Expenses
Alcohol & Bars 14
Auto Insurance 317.33
Business Services 17.98
Cash & ATM 40 (Farmer's market)
Charity 20 (Feel the Bern! Ha!)
Gas & Fuel 32.03 (Lower than usual)
Groceries 142.41 (Lower than usual)
Internet 63.29 (Really 23.29 since two other people are each sharing for $20 per month. I should start tracking this properly.)
Laundry 20
Mobile Phone 12.16
Mortgage & Rent 960
Pharmacy 38.47 (Some supplements)
Restaurants 78.06 (Higher than I would like)
Shopping 18.98 (New trash can)
Trade Commissions 4
Total -FI $1778.71

Income
Paycheck 4951.16
Amazon 63.82
Google 138.47
CafePress 25.02
Checking 19.58
Total +FI $5198.05

Savings $3419.34
% Spent 34%
% Saved 66%
SWR 16%
Years Remaining 15.4
SWR with Internet Income 14%


There have been a lot of improvements over the last two years!

My savings rate has gone up by about 15%, from about 40% to about 55%:
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My net worth has doubled from about $65,000 to about $130,000 while the amount I need in retirement has dropped by about $75,000:
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The withdrawal rate that would cover my expenses has also fallen. Even though I don't really trust it I also calculated this with internet income:
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Here's what the internet income looks like over time:
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My expenses per month have decreased from about $2200 to about $1800:
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Projected years to FI has also decreased from about 25 to about 15:
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If I ever lose my job or want to take a break the number of months of expenses I have saved has more than doubled from about 30 to about 75:
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While financially I'm looking a lot better when I look back through my whole journal I'm disappointed:
* I wanted to move to another state, I haven't done that.
* I wanted to get a better job, I haven't done that.
* I wanted to buy a house, I haven't done that (though I do have 20% down on a reasonable house in my city now).
* I haven't improved my internet income.

Thanks to everyone on this website for all the help!

“Perhaps the secret of living well is not in having all the answers but in pursuing unanswerable questions in good company.”
Rachel Naomi Remen

jennypenny
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Re: Gilberto de Piento's Journal

Post by jennypenny » Sun Nov 01, 2015 11:57 am

Journals like yours give me some serious chart envy. :P

Related to the Remen quote -- did you ever see this thread? You are the average of the five people you spend the most time with

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cmonkey
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Re: Gilberto de Piento's Journal

Post by cmonkey » Sun Nov 01, 2015 6:52 pm

Those are some great charts, I think I need to start adding some more to my journal.

Congratulations on making so much ground and happy 2 year anniversary!

heyhey
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Re: Gilberto de Piento's Journal

Post by heyhey » Sun Nov 01, 2015 8:18 pm

Thank you for some inspiring charts! You have come a long way :)

llorona
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Re: Gilberto de Piento's Journal

Post by llorona » Mon Nov 02, 2015 2:49 am

Happy Anniversary! To echo others, your charts are amazing!

Ginger1
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Re: Gilberto de Piento's Journal

Post by Ginger1 » Mon Nov 02, 2015 3:09 am

Fantastic to see your progress since 2013. Looking forward to settling down with a nice cup of coffee and reading it from beginning to end. I'm sure there's a lot of relevant learning for me in here!

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Mon Nov 02, 2015 9:20 am

Related to the Remen quote -- did you ever see this thread? You are the average of the five people you spend the most time with
I did see that thread. It only takes one bad apple to cause a lot of stress so it's best to surround yourself with positive people.
Looking forward to settling down with a nice cup of coffee and reading it from beginning to end.
Happy reading! I hope you find it helpful. When I first joined here I read all of C40 and m741's journals. You may want to try those too.

Thanks to everyone for the compliments on the charts. It comes from an adaptation of Akratic's spreadsheet. I could share it or I could walk you through adding them to your own google sheets doc, just let me know.

IlliniDave
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Re: Gilberto de Piento's Journal

Post by IlliniDave » Mon Nov 02, 2015 1:55 pm

Seems like all your trends are good. The big change you should hopefully start to see is compounding of your savings (assuming you are getting some sort of return for it), which should start shaving years off. Keep up the good work!

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Mon Nov 02, 2015 9:19 pm

IlliniDave wrote:Seems like all your trends are good. The big change you should hopefully start to see is compounding of your savings (assuming you are getting some sort of return for it), which should start shaving years off.
Thanks! 80 is in a vanguard target date 2055 fund, 20 is in a vanguard us stock index, and 20 is in checking. I'm considering a house or I'd buy more stocks.

IlliniDave
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Re: Gilberto de Piento's Journal

Post by IlliniDave » Tue Nov 03, 2015 6:01 am

Gilberto de Piento wrote:
IlliniDave wrote:Seems like all your trends are good. The big change you should hopefully start to see is compounding of your savings (assuming you are getting some sort of return for it), which should start shaving years off.
Thanks! 80 is in a vanguard target date 2055 fund, 20 is in a vanguard us stock index, and 20 is in checking. I'm considering a house or I'd buy more stocks.
Sounds good to me. Though it could be a bumpy ride you should be positioned for pretty respectable growth in the long run if history is any indicator. I keep a similar amount in cash/cash equivalents just because I'm old fashioned and like having a traditional rainy day fund, despite the "drag".

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Wed Nov 25, 2015 11:17 am

For a while I've been curious what my projected date of financial independence would be if I included the compound interest from my investments in stocks. My existing projected years to FI is calculated by Akratic's spreadsheet. The existing projection works like this:
1. Calculate the savings required to support the current month's spending using a SWR of 4%.
2. Subtract actual savings from the required savings to arrive at the difference between actual and required.
3. Divide that difference by monthly savings * 12 to get projected years to FI.

My new projection includes the benefit of annual compound interest. I now have enough money saved that interest is starting to have an impact on my annual savings that rivals that of the money I'm earning and not spending. For example, I save about $20,000 per year out of my salary but the $130,000 I have saved multiplied by the rule of thumb 8% is $10,400 of additional earnings per year (in a historically average year).

Obviously assuming that the stock market will provide 8% from now until the time I retire is dangerous but I was still curious enough to run the numbers. The projected time to FI for the month of October 2015 was about 15 years when I calculated it with no compound interest. When I calculate it with interest compounded annually at 8% I get 8 years instead!

Here's a comparison between projected years to FI with and without compound interest:
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A better model would use a monte carlo method like firecalc but this seems like overkill.
Last edited by Gilberto de Piento on Wed Nov 25, 2015 2:40 pm, edited 1 time in total.

Ydobon
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Re: Gilberto de Piento's Journal

Post by Ydobon » Wed Nov 25, 2015 12:05 pm

Exciting stuff, but we should always be wary of counting our chickens before they hatch :)

I tried a spreadsheet experiment yesterday where I completed similar calculations, but using my natural/current yield as my SWR (my thinking was 'if my yield stands still, I could spend it all and not lose any capital').

It painted a similar picture (8.x years, as opposed to 15+).

On the gloomy side, my current yield is very high and will be hard to sustain. On the positive side, it's high because I'm working at keeping it high.

Let's be cautiously optimistic and see where we stand in another couple of years, eh?

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Wed Nov 25, 2015 10:29 pm

I'm always wary of chickens, both hatched and unhatched. Cautiously optimistic sounds like exactly the right way to play it. Best of luck to the both of us!

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Tue Dec 01, 2015 9:42 am

November 2015

Not a bad month. A good representation of the "new normal" since I set a goal of spending no more than $1800 and tracking each expense on paper. It would have been better but I realized I forgot to make donations to charity back at tax time.

Expenses
Alcohol & Bars 36.36
Business Services 17.98
Cash & ATM 20
Charity 159.94 (I realized I forgot to make annual donations back at tax time.)
Gas & Fuel 27.29
Groceries 273.08
Health & Fitness 24.11
Internet 23.29 (I'm including this differently now. It's $63.29 but I'm sharing it with two people who each pay $20.)
Mobile Phone 12.16
Mortgage & Rent 960
Pharmacy 30.09
Restaurants 34.82
Shopping 39.99
Sports 52.74
Trade Commissions 4
Total -FI 1715.85

Income
Paycheck 3282.27
Amazon 133.54
Google 130.22
Checking 22.23
Total +FI 3568.26

Savings $1852.41
% Spent 48%
% Saved 52%
SWR 16%
Years Remaining 14.2
Years Remaining with Interest 8


“It’s not enough to be busy; so are the ants. The question is: what are we busy about?”
Henry David Thoreau

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Fri Jan 01, 2016 2:01 pm

December 2015

December wasn't as good as other recent months. I spent more and earned less than I would have liked to. The costs were websites renewing for the year, a year worth of donations to charity, and Christmas gifts. Next year I'm going to shop early and on sale and make some things for Christmas. I'm also going to remember to make my charitable contributions at tax time as I usually do rather than forget.

The optimism has gone out of me lately. I think it's partially the gray winter weather but I'm also feeling trapped in the life I have. Recently I've been forced to accept the possibility that I'm getting old and inertia to stay on the easy path might be stronger than I am. I've never been good at making changes happen but there was a point there where I really thought I might do something different.

Income
Alcohol & Bars 15.8
Business Services 129.83 (websites renewed for the year)
Charity 195 (part of annual charity)
Gas & Fuel 35.96
Gift 253.72 (Christmas gifts)
Groceries 280.8 (Christmas)
Internet 23.29
Laundry 20
Mobile Phone 12.16
Mortgage & Rent 960
Restaurants 24.93
Shopping 52.19
Total -FI 1993.68

Income
Paycheck 1047.81
Amazon 130.56
Google 0 (For the first time in years I didn't meet the monthly $100 payout requirement. Google changed something and it hurt traffic to my best site.)
Checking 23.24
Gift 8.75
457b 3000 (to meet the contribution limit for the year)
Total +FI 3210.36

Savings $1216.68
% Spent 47%
% Saved 53%
SWR 18%
Years Remaining 20.3
SWR with IM Income 17%


"You might have to fight a battle more than once to win it."
Margaret Thatcher

Only one chart this month - the rest have gone haywire and I don't feel like fixing them right now.
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Last edited by Gilberto de Piento on Mon Feb 01, 2016 11:57 am, edited 1 time in total.

mxlr650
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Re: Gilberto de Piento's Journal

Post by mxlr650 » Mon Jan 04, 2016 1:02 am

GDP wrote:The optimism has gone out of me lately. I think it's partially the gray winter weather but I'm also feeling trapped in the life I have. Recently I've been forced to accept the possibility that I'm getting old and inertia to stay on the easy path might be stronger than I am. I've never been good at making changes happen but there was a point there where I really thought I might do something different.
the inertia is only bad if you like making changes because you set expectations on yourself from seeing others. If you have no issues waiting for 8 years to FI, it is no big deal really. In my case, i continued to work even though I was FI, and it's not like I feel like I am in a wonderland now that I am on a sabbatical. The gold standard for me is the level of engagement - be it work or outside.

i would rather be a older dude with life experience (AKA with strong pattern recognition skills) than a 20-something who is all theory (the types you come across in various forums)

Good luck!

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Mon Feb 01, 2016 12:27 pm

January 2016

I spent about $800 on an upcoming vacation. I haven't traveled much so it's worth it to me. Otherwise this would have been an excellent month with very low spending.

Income
Alcohol & Bars 39.01
Bills & Utilities 5
Business Services 40.06
Gas & Fuel 48.56
Gift 9.92
Groceries 167.7
Internet 63.29
Mobile Phone 12.23
Mortgage & Rent 960
Restaurants 50.06
Sports 20
Travel 780.81
Total -FI 2196.64

Income
Paycheck 2555.19
Amazon 41.91
Google 148.2
Checking 24.17
457b 1000
Total +FI 3769.47

Savings 1572.83
% Spent 58%
% Saved 42%
SWR 21%
SWR with IM Income 19%
Years Remaining 26.5
Years Remaining with Interest 11


“In any situation, the best thing you can do is the right thing; the next best thing you can do is the wrong thing; the worst thing you can do is nothing.”
Theodore Roosevelt

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Gilberto de Piento
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Re: Gilberto de Piento's Journal

Post by Gilberto de Piento » Wed Mar 16, 2016 4:57 pm

February 2016

I went on vacation and, despite the costs for it being spread over three months, it's really messing up my finances. It was good to travel and was probably a once in a lifetime type deal but it still doesn't help with FIRE. Expect more in March. :?

Alcohol & Bars 16.29 (vacation)
Business Services 17.98
Clothing 255.04 (mostly new rain pants for vacation and biking to work)
Gas & Fuel 38.99
Gift 12.4
Groceries 217.28
Hotel 400.93 (vacation)
Internet 63.29
Laundry 20
Mobile Phone 12.23
Mortgage & Rent 960
Pharmacy 40.57 (vacation)
Public Transportation 60 (vacation)
Restaurants 85.74 (vacation)
Shopping 59.38 (vacation)
Taxes 61.98 (H&R Block)
Travel 377.67 (food, transportation, attraction entrance fees, visa, etc. for vacation)
Total -FI 2699.77

Paycheck 1280.98 (mostly a refund from HR investing $1000 over the 457b limit in 2015)
Amazon 82.4
Checking 26.49
457b 4000
Tax Refund 175
Total +FI 5389.87

Savings 2690.1
% Spent 50%
% Saved 50%
SWR 26%
Years Remaining 52.5
SWR with IM Income 25%


No time so charts and no quote this month. I also feel kind of down lately so I just don't feel like putting in extra effort.

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