A Journey of Mindfulness--the Remaking of Life in Midstream.

Where are you and where are you going?
George the original one
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by George the original one »

I think iDave did a pic & run incident!

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Q3 2019 Summary

I'm now almost 2 months behind in tallying up my expenses. Seems like I've lost interest even though it's a fairly relevant thing to have a handle on leading into the days where the main spigot is going to get turned off. I'm intending to bite the bullet this coming weekend and get caught up. If I let it go too much longer I'll probably wind up with a permanent gap in the data record.

Invested assets were up $39,200 for the quarter. Net worth was up something above $32,900 (estimated with a dull pencil) for the quarter and about $165K over the prior 12 months, which is about average.

Under baseline assumptions (low returns, sloppy spending, reduced annuity and SS) my short-term equivalent withdrawal rate is 1.44% and long term equivalent withdrawal rate is 0.85%.

Under nominal assumptions (low returns, historic spending, full annuity and SS) my short-term equivalent withdrawal rate is 0.26% and long term equivalent withdrawal rate is 0.16%.

I've talked in the past about using a Liability Matching Portfolio using 2X projected liability as the funded liability. Using EOY '20 as the start date, the implication is that under baseline assumptions I'd want 75% of financial assets to be growth assets (e.g., stocks) and 25% to be stable assets/cash. Call me a market timer, but I don't see being all that comfortable with that aggressive a distribution anytime in the next few years. If I had to decide today I'd stick with where I've been hovering most of the year 55/45-60/40.

It certainly appears money isn't the leading contender for potential constraints. I still see what I lump into the term "politics" as the most looming short-/medium-term risk. Such an appetite to pit people against each other doesn't extrapolate to a peaceful hobbit's life in The Shire. Fortunately 30ish years in my professional domain has taught me that extrapolation can be a wildly inaccurate when the underlying process is not well accounted for. I don't have much more than a token understanding of politics specifically, or people more generally. Still, no warm fuzzies out on the horizon.

I'm still experiencing a gradually increasing detachment at work. Business is surging and I'm surrounded by an ever larger horde of new faces. Sometimes I'll walk into a lab or meeting and initially think I'm in the wrong place! New faces seem more taxing on this old introvert than familiar faces even if the overall degree of collective bias towards extroversion I encounter stays constant. That might be part of the reason I've fallen off in my bookkeeping. I'm no longer able to use my ride home to decompress. Most evenings and even parts of weekends sometimes are lost catching my breath in solitude.

The last two weeks since I've returned from travel have easily been the hottest 2 weeks of the "summer". A cruel trick, that one, after wallowing in near perfect weather in Illinois and Minnesota. Fall is usually the time I'm most enthused to do local hiking, but I want nothing to do with going up and down (small) mountains when it's 95-98*F out there. Supposed to get two mild cold fronts this weekend which should make things much more pleasant.

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Bankai
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Bankai »

IlliniDave wrote:
Tue Oct 01, 2019 6:47 am
Under nominal assumptions (low returns, historic spending, full annuity and SS) my short-term equivalent withdrawal rate is 0.26% and long term equivalent withdrawal rate is 0.16%.
Probably as safe as money can ever make you. Marginal utility of additonal savings is very low at this point. Have you decided on the date to pull the plug?

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Bankai wrote:
Tue Oct 01, 2019 7:54 am
Probably as safe as money can ever make you. Marginal utility of additonal savings is very low at this point. Have you decided on the date to pull the plug?
Bankai, I've been holding out EOY 2020 as a notional time to make the transition. My employer has a corporate merger pending, so depending on what I'm able to glean about how the merger might affect retirees, I might jump out in front of it. However, my hope is that I'll be part of a sacrificial offering to The Street and I'll get kicked to the curb with an enhanced severance package reputed to have been approved.

Otherwise, I'm on the steepest slope we have for accruing retirement benes and not feeling a real sense of urgency.

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

I actually followed through and got caught up on all my bookkeeping over the weekend. The results were not good: spending of almost $4,500 in August and $3,800 in September. Gah! The whole year has been pretty high and I'm hovering right around the level that I set as 'sloppy' spending in my mega spreadsheet, around $4,000/mo. Even though my baseline expenses were higher than I'd like there were a number of unplanned expenditures that cropped up along with vacation travel. I am vulnerable to those "pop-ups" because I've built some complicating factors into my situation.

For some reason while thinking about this last night I was bothered by it. Something's gone a little awry over the last two years and I suppose I should take some time and have a closer look. There's likely something I can address.

Nuuka
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Nuuka »

IlliniDave wrote:
Tue Oct 01, 2019 6:47 am
Q3 2019 Summary

I'm still experiencing a gradually increasing detachment at work. Business is surging and I'm surrounded by an ever larger horde of new faces. Sometimes I'll walk into a lab or meeting and initially think I'm in the wrong place! New faces seem more taxing on this old introvert than familiar faces even if the overall degree of collective bias towards extroversion I encounter stays constant. That might be part of the reason I've fallen off in my bookkeeping. I'm no longer able to use my ride home to decompress. Most evenings and even parts of weekends sometimes are lost catching my breath in solitude.
Have you considered cutting working hours and going part-time? Feeling alien in your workplace and decompressing problems sounds like you might be ready to loosen a little.

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Nuuka wrote:
Mon Oct 07, 2019 7:11 am
Have you considered cutting working hours and going part-time? Feeling alien in your workplace and decompressing problems sounds like you might be ready to loosen a little.
Nuuka, I've halfway thought about it. I think it would exacerbate the feeling. The feeling isn't good or bad, just something I've noted. But the main drawback is that it would have adverse effects on my retirement benefits, and as long as I'm connected to the job in some way I'm in limbo as far as retirement goes (which will be starting off in a different geographic area).

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Since the old Wheaton Scale thread bubbled up I went back and looked at the the larger (second) table posed. For giggles I guaged my scores and decided to log them here for posterity.

Spending: I've declined to about 2 (more later)

Savings: 5 or 7 depending on whether the chart's intent was to include income tax as part of spending.

Focus: Somewhere around 4-5. Some of what I've been thinking about is 5ish, anyway: optimize resource utilization for life enjoyment.

Retirement Goal: ~7. More accurately Fat7. The main reason I'm lingering is to get my retirement annuity up to the point that dipping in the stash is completely optional.

Vacation and Experiences: Today, that category is really N/A. My goal is to be at level 8 once retired ("work" and "play" are replaced by "just living"), but given the route I took to get there I can't claim ERE-8. But that's where the bullseye has always been for me--I just approached it in the way that seemed most efficient and sensible given where I was when I started in earnest (2011/2012, never heard of ERE or MMM or YMOYL at the time, new to Bogleheads).

Paradigm: No idea. Motto is just make the next decision/action the best I can make/take as often as I can.

Those might be interesting to revisit again in 3-5 years.

I've been thinking about spending. I had 5 consecutive good years but the last two have been suboptimal. Some of what I think the contributors are:

1. Working a lot of O/T. I'm just starting my third week of working just straight 40 in the last 2+ years and already it's apparent that an extra 12-16 hours a week has a big impact outside of work. In the middle of it all it's easy to lose sight of. I give in to convenience more. And the extra income makes it easier to justify opening the wallet on occasion. It's the "I work hard so I deserve this toy." trap.

2. Having won the game defined by the rules I set forth for myself. Looking at the accumulation/financial side of it, when I say, "What real harm is there in spending this money?" it gets harder to come up with a compelling answer. I probably need to start re-framing things in less iDave-centric ways (To what better use could I put the money? What is the ecological impact? And such.)

3. I've never understood the logic of this, so I'm guessing it's behavioral. There's a thread of conventional advice that says you should take care of a lot of big expenses just prior to leaving work. Usually it's things like get a new roof, get remodeling done, get a new car, etc. The thought is to do that stuff while the spigot is still on. One could just as easily save the money coming out the spigot, earn some interest on it, and handle those items in due time after retiring. But I'm a little anxious to get as many boxes checked as possible during the "glut". That's probably worth thinking about some more.

4. Getting ready to move. Every month I'm earmarking and setting aside several hundred $ for last-minute spruce-ups of the house and moving expenses. I count the money as "spent" on an ongoing basis, so that portion is just a bookkeeping artifact. My impulsive purchase of a vehicle last year (and Ramsey-heretic decision to play the differential interest game and finance it) is a big part. Together those are ~30% of my present spending and account for most of the lifestyle inflation.

I don't know if I consider any of those problems that need addressing right away or not. Now that I'm aware of what they are (first impressions, anyway) I can let my subconscious gnaw on them. With the coming of autumn on top of cessation of O/T I can settle back into a more homey simple life orientation and see what unfolds. It seems the wider I let my attention roam, the more frequently I am dealt setbacks and disappointments. Good reminders of that recently.

Nuuka
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Nuuka »

Ok. I make some blunt questions just to try to understand what’s going on, please don’t be offended:
- Does lack of paradigm mean that you don’t know what you will do after your retirement?
- Are you afraid of retirement because you don’t know what you will do once you are retired?
- Do you take overtime, so you don’t have to think about the future?
- Does “moving” mean just changing physical location or does it include aspects of what you will do after retirement?
- Why moving is such a big thing? Are you using it as another scapegoat for not having to think about the future after retirement?

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Nuuka wrote:
Tue Oct 08, 2019 8:29 am
Ok. I make some blunt questions just to try to understand what’s going on, please don’t be offended:
No worries. What confuses people about me I think is that I don't dislike my present life. So jumping at the first opportunity to retire is not necessary. I'm trying to jump at the best opportunity. If I had started on this journey when I was much younger things might be different. It may have been more of a gradual evolution starting with working full time after graduation in a profession then proceeding through developmental stages to an integrated holistic independent lifestyle. As it is, I've sort of had the gas pedal pushed to the floor, then one day will stomp on the brakes, get out of the vehicle, and start over on a different trail.

- Does lack of paradigm mean that you don’t know what you will do after your retirement?

No. I have a good idea about that (much of it discussed earlier in this journal). It might be more clear if I list the paradigms. These come from "The ERE Wheaton Scale" thread.

In ascending order they are: (1) Scarcity, (2) Accumulate, (3) Exponential Growth, (4) Embracing Efficiency, (5) Optimization, (6) Yields and Flows, (7) Systems Theory, (8) Chop wood-carry water.

I enjoy Zen Philosophy so number 8 is a goal, though maybe not in the ERE sense. Regardless, I'm not there yet. I might be somewhere between 5 and 8, but I haven't fully gauged "yields and flows" or "systems theory" and their utility to me. Probably something I should study up on, but my present intellectual interests lie elsewhere. I may even be touching on those two without realizing it, but in my mind I seem to be moving from 5-ish directly to 8.

- Are you afraid of retirement because you don’t know what you will do once you are retired?

No--same as above.

- Do you take overtime, so you don’t have to think about the future?

Just the opposite actually. I took it because I was thinking about the future.

- Does “moving” mean just changing physical location or does it include aspects of what you will do after retirement?

Both, and both have been part of "the plan" since its inception.

- Why moving is such a big thing? Are you using it as another scapegoat for not having to think about the future after retirement?

I'm moving for two reasons. One is to be able to look after my dad, a situation that is gradually inching towards urgent after my mom passed away last year. The second is there's a spot on the map that's long been what you might call my happy place. So I'll be splitting time between my old home town near my dad and a little cabin up in the Northwoods. At least initially. As time goes on I'll let things evolve and change things up if I desire.

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

October 2019 Summary

Well, I guess I haven't been paying attention. Invested assets were up about $27,800 for the month. Seems down days get a lot more attention than up days. I don't have final spending numbers but the tally seems like it will come in around 3,300 or a bit below. A couple auto repair issues and and an uptick in my social life are what drove it over 3,000.

I had a nice surprise two weekends ago when my older daughter made a unexpected visit, so it was the first time I had both daughters and all the grandkids together all at once since the two youngest were born. I'm a little jealous of my own grandparents who for the most part had all their grandchildren living within walking distance of them.

Otherwise, just limping along. Things at work are mostly pleasant. Still have my bachelor card. I planted some chia this year, and got my first open blossoms Wednesday, and overnight we had our first frost. I didn't know this when I planted it, but chia is a winter bloomer (one of the hazards of trying to grow plants from Central America).

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Year End 2019 Check-In

Been a while since I updated here. I missed a couple months but will just skip to the EOY.

For 2019 net worth rose $314K ( :shock: ), invested assets increased by slightly less, $300K. Crazy, I tell ya. I thought this year might have a bit of a bump since 2018 ended on a significantly down note. Didn't expect this.

When I put together my first FI/ER plan in 2012 I projected numbers out until the end of 2019. Ended up about $285K ahead of projections.

2020 will will have an even bigger emphasis put on preservation than 2019 did. I meant to retreat back partway into my shell by the end of 2019, but it slipped my mind so I'll have to do it later this week.

Besides that things are pretty uneventful. Some health struggles in my family back home, but no crises at the moment.

I don't really have resolutions for 2020. Would like to get cash outflow back on track, I was a little spendy last year, knocking some items off a list I had planned to wait until after I move to address.

Best wishes to all who see this (and all who don't) for a happy and healthy 2020.

7Wannabe5
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by 7Wannabe5 »

My 80 year old friend who is worth around 100 million was only worth around 2.5 million 30 years ago.

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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by jacob »

@7wb5 - That's what 13% ROI will do over three decades.

Scott 2
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Scott 2 »

Where do you find the motivation to fix cash outflow, when net worth grows like that? It's an overwhelming amount of money.

7Wannabe5
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by 7Wannabe5 »

The motivation is internal but won’t necessarily translate to next generations. That is why trust funds and family wealth management and preservation become primary focus. My friend is currently reading a book on the topic by James Hughes which he highly recommends.

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

Scott 2 wrote:
Wed Jan 01, 2020 12:55 pm
Where do you find the motivation to fix cash outflow, when net worth grows like that? It's an overwhelming amount of money.
A couple reasons.

1) Next year it could go down by $300K.
2) My whole journey to FI was based on determining an optimum spending level and sticking with it and I would like to preserve that habit.

classical_Liberal
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by classical_Liberal »

The second reason makes a lot of sense to me, the first does not, given that you self report being that much ahead of the game from your expectations anyway.

Genuine curiosity here.... Now that you've become wealthy beyond measure for your personal needs, do you find yourself focusing less on financial thoughts (fears, strategies, ect), or more? I suppose a third option is the thoughts are equal in quantity, but have changed in quality (ie legacy and preservation vs accumulation).

IlliniDave
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by IlliniDave »

classical_Liberal wrote:
Wed Jan 01, 2020 6:04 pm
The second reason makes a lot of sense to me, the first does not, given that you self report being that much ahead of the game from your expectations anyway.

Genuine curiosity here.... Now that you've become wealthy beyond measure for your personal needs, do you find yourself focusing less on financial thoughts (fears, strategies, ect), or more? I suppose a third option is the thoughts are equal in quantity, but have changed in quality (ie legacy and preservation vs accumulation).
Overall I'd say I think about financial and related things less, an accelerating trend, and within such thoughts the focus has shifted pretty much in line with what you stated in your third option. I'm getting sporadic about keeping my numbers current, and I'm increasingly having misgivings about keeping up this journal thread.

I certainly don't feel wealthy beyond measure though.

Scott 2
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Re: A Journey of Mindfulness--the Remaking of Life in Midstream.

Post by Scott 2 »

I'm very interested to see how you manage the cash outflows.

I'm having a hard time with it, especially when numbers that I used to think of as "big" regularly appear in my accounts. It was far easier when $100 felt like a lot of money. You've got even stronger financial disincentive.

I don't think I'd feel wealthy, until there was enough money to thrive through a fully catastrophic medical incident, including ongoing long term care. It'd be a lot, well beyond any reasonable definition of FI.

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