Q2 2016 Summary
Obligatory Lumbering Introspective Essay and Thoughts on the Real Side of Life
This quarter and especially the month of June has been a time of contrasts. I started June on my first solo venture off-grid at my cabin. It's difficult to describe the feeling--almost like the evergreen scent of the Northwoods air cancels out gravity. I felt light, buoyant, and energetic. As I strove to leverage that feeling some pesky facts about my physical conditioning were thrust to the forefront. I've logged a lot of miles over rocky, uneven trails over my life and have fallen a total of three times. All three were on the same hike. It was the second hike of my cabin stay (the first being on the same trail to scout out a potential fishing hole). I don't know what happened--I suppose I'd just overextended myself that day after an earlier solo canoe jaunt in the wind and the aforementioned scouting hike. Later in the trip I made longer, much more vigorous/difficult hikes without incident, and so saved face. The ordeal was mostly embarrassing, but it is a stark reminder that there are risks to seeking adventure in lonely places. At minimum in the future I should probably tell the guys at the resort down the lake where I'm headed. Being stranded for possibly days on a little-used trail with a broken ankle and no one but me knowing where I am would probably suck a little.
The Minnesota trip was bookended by visits with my family in Illinois. It was the first time I saw my mom post-chemo. Her frailty took a lot of wind out of my sails. 2 weeks ago she had a follow-up scan which showed a tiny spot in one of her lungs--too small to diagnose (biopsy). So they're going to look again in three months. If it is something bad at least it is slow growing. The same week my sister was diagnosed as in remission. It feels weird seeing what I consider the big chapter of my life just beginning while people around me are fighting just to stay alive.
And here I end the month back at my now-tedious career in the oppressive Southeastern heat.
I've been pushing back on myself about my decision to turn the crank and watch the sausage come out until May of '19. Based on some of the ongoing threads it's pretty clear that I am not a "good" multi-webbed whatever level ERE-er. I still want a fat pocket full of cash in my toolbox.
The strangest thing of all is that I have a date tonight. Like, with a girl and everything. And one who's quite far on the young and pretty side for me. I see it as a much bigger risk to my future than Brexit, Peak Oil, and climate change rolled together into one large bugeye hairy-legged man-eating spider. The problem is that I've never misled her about my lifestyle and goals, and she still wants to hang around with me, so my standard passive defense mechanism failed (just be myself). On the surface I'm just a safe old guy with deep pockets who kindly offered moral support to help her see her way through rough times (wake of a really ugly marriage dissolution/recent divorce). Maybe it will stay there. Definitely it was a case of my mouth getting out ahead of my brain. If she has other ideas, however, I will likely capitulate in a matter of milliseconds. I mentioned she is good-looking, and in some specific respects I'm a very shallow man.
In the coming quarter I foresee a leisurely focus sprucing up the house/property. First up is the fence in my yard, just going section-by-section and making spot repairs and prepping for paint. I'm brushing up on some rudimentary carpentry skills and improvised mechanical engineering. It violates some of my deepest principals, but I'll also be working to improve the front lawn and landscaping.
My youngest daughter is planning to get married soon, sans ceremony and all (she suffers from panic attacks and doesn't want anything remotely close to a traditional ceremony). My prospective son-in-law is a decent guy. They say they want me to take them underwing to help them get started on a financial journey. I've thought at times, and friends have suggested, that I should hang out a shingle and give financial advice for a second career. I usually dismiss it, but if working with the kids proves fruitful I might give it more consideration as a 'side hustle'.
Now on to the dry stuff ...
Invested Assets and Net Worth
In the quarter total invested assets increased by $40,300 after contributions.
Net worth is up $37,500 for the quarter, and $113,800 over the last 12 months. Both numbers are slightly disappointing but it's been rough sledding in the financial markets. In the bigger picture I'm about 98% of the way to earning my second comma when it comes to a standard net worth calculation. It's possible to cross that plateau during Q3 2016.
Savings and Spending
YTD savings as a % of gross income: 55.7%, down from 60.4% as of end of Apr (I was off-grid and did not compute May numbers).
YTD savings as a % of after-tax income: 75.1%, down from 80.0% as of end of Apr (I was off-grid and did not compute May numbers).
June spending was $3,491 (versus $3,427 in May) both well above the target average of $2,416/mo for the year.
Average monthly spending YTD is $2,485 which is also above the $2,416 target.
May and June were "bad" months for spending. I don't feel like beating myself up about it too much. I traveled for almost 3 weeks, had some preventative auto maintenance that needed doing, had some repair/replacement expenses up at the cabin, and started a couple projects around the house in the gradual push to get it ready for sale.
YTD spending (excl. inc tax) as % of gross income: 16.6%, up from 12.7% as of end of Apr.
YTD spending (excl. inc tax) as % of after-tax income: 22.4%, up from 16.8% as of end of Apr.
With 30 June as my first day of ER, I would expect to deplete 13.1% of my financial assets getting to my 70th birthday, compared to 19.5% at the end of April. If things proceeded exactly according to my nominal plan my average withdrawal rate from age 52 to age 70 would be 3.96%, and from 52 to 85 would be 2.33%.
June spending represents an equivalent withdrawal rate of 6.44%; YTD the equivalent rate is 4.78%.
Net of expected proceeds from downsizing my house I might anticipate around $1,858/mo of spending over several decades to be supported by my financial assets alone. Repeatedly I've mentioned it's about time to reexamine my personal austerity threshold (how low I think I could go before it hurts). However, I still have not done that.
Q2 2016 was an up-and down quarter. It provided reminders that "Just don't spend!" is not a slogan I am likely to live by in an ERE context.