Hello, I've decided to bare my financial life while I try to determine where I am relative to FI. ER isn't in the plans right now but it is good to know your options when planning your life adventure(s).
***INCOME
After-tax salary after all deductions and retirement contributions = 3700/month
Retirement account contributions = 300/month (state defined contribution plan) + 200/month (457 plan) = 500/month
Roommate rents: 750+600 = 1350/month
Rental Property income: 600/month
Dividends: Unknown but probably less than 200/month (I'll need to do some homework to determine this but I am not going to count this as it is in my retirement accounts which will probably not be accessed for at least 20 years).
Interest: 600/month
Total Income= 6650/month
***EXPENSES (Variable expenses rounded up or estimated at 10-15% higher than trailing 18 month average)
Monthly Housing expenses: 780 PITI + 195 HOA + 200 Electric + 70 Water/Sewage/Trash + 80 Internet/Cable = 1325
Monthly Groceries/Eating Out/Pet Food = 300
Monthly Car = 200 Gas + 70 Insurance = 270
Miscellaneous Variable Expenses = 100 (Primary Residence) + 200 (Rental Home Tax/Insurance/Maintenance) + 150 (Other ... Car Maintenance, Vet, Charity, Gifts) = 450
Total Expenses: 2345/month
***LIQUID ASSETS
Taxable Accounts: 343k (CDs, Reward Checking, Bonus Interest accounts blended to about 3% yield) + 13k (brokerage accounts) = 356k
Retirement Accounts: 84k (State defined contribution plan) + 21k (401A plan) + 4k (457 plan) + 17k (tIRA) + 74k (roth IRA) = 200k
***REAL ASSETS (Market values estimated at lowest quartile of ranges)
Real Estate: 145k primary residence (owe 105k) + 50k rental (no mortgage) + (1/3) interest in 60k property (no mortgage) = 110k equity
***DEBT
Non-mortgage debt: None
Mortgage Debt: 105k (30 year conventional at 4.1% APR)
How far away is FI? I like my job and I hope to work there at least another 10 years but if I chose to retire or had to quit for some reason would I be able to live off of the assets I've accumulated? If not how long will that take at the current rate? That is the first thing I would like to know. To answer that question I need to consider where I would live and what I would do with my properties. Some possibilities:
I. Stay in current residence. Current primary residence is completely covered by roommates' rent. Well, except for irregular expenses like ac/heating, electrical, plumbing, roof. This SFH is only 5 years old and so should not need much in the way of maintenance for a while. It is located in a relatively high cost of living region of the state but I could probably get my non-housing expenses down to under 800/month including ACA health insurance.
II. I could move to the property that I have (1/3) interest in and live there. This family property would be rent free in a moderate cost of living region. I could then rent out or sell the primary residence. If rented my current residence could easily get 1500 to 1600 per month with the only costs being PITI + HOA which would add up to about 975 per month. If I lived in this currently unoccupied property then my utility, insurance, taxes and maintenance costs would probably be 400/month or less and I could probably get total living costs under 1000/month including ACA health insurance. If I did this I would likely get a roommate who would pay about 300 to 400 rent per month.
There are so many permutations (combinations?) on the housing/living/property possibilities that it is hard to sort out what would be optimal. I believe that at least in a few of these scenarios I would be pretty close to FI. I'd consider FI to be the state of needing less than 3% of assets for my NET average living expenses. By net I mean after applying rents of tenant and roommates and costs of maintaining non-primary properties. Yeah ... eventually as the CDs mature I'll need to get that cash into something expected to have a positive real yield for that to be true.
Last Digit Of Pi
-
George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
Re: Last Digit Of Pi
You have 19 years of expenses in your liquid accounts. If you didn't have the mortgage, you have 25 years of expenses, thus you could call yourself FI if the mortgage were paid. How long would it take you to pay off $105k?
Alternatively, if you could reduce your expenses by $6k/yr, you would be FI now.
Alternatively, if you could reduce your expenses by $6k/yr, you would be FI now.
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
Thanks George. I could probably pay off the mortgage in 3 years if I throw all of my current excess income at it. I've probably estimated a bit high on my variable expenses so I could be 1k or 2k lower per year than my calculation. I could probably without much effort take off another 1k as well.
I would prefer to be at 33 years expenses and thought maybe within a year or two could be there in some scenarios but I am not sure if my accounting is correct (for example costs net of real estate would go down in some scenarios to about 800/month to 1000/month which would put me pretty close to FI - but maybe there is something I am missing when I do that calculation).
I would prefer to be at 33 years expenses and thought maybe within a year or two could be there in some scenarios but I am not sure if my accounting is correct (for example costs net of real estate would go down in some scenarios to about 800/month to 1000/month which would put me pretty close to FI - but maybe there is something I am missing when I do that calculation).
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
August Income
Net Salary 2900 (Half month salary with small bonus)
Roommates Rents 1350
Rental Property 650
Interest 625
Financial "Games" 400
***Total 5925
August Retirement Account Funding
State Defined Contribution 1200
457 Plan 100
***Total 1300 (Not counted in income or savings rate)
August Expenses
PITI 775
HOA 195
Electric 215
Water-Sewage-Trash 65
Gas 150 (includes trip home to see parents)
Car Insurance 65
Internet and Cable 90
Eating Out 140 (includes mom's birthday and parent's anniversary dinners)
Groceries 150
Pet food and expenses 100
Charities 50
Gift 100 (mom's birthday)
***Total 2095
Savings Rate
Non-retirement savings: 3830 (65% savings rate)
Assets
Liquid Non-retirement net worth: 358k (0.5% increase - I've decided to exclude a couple of small accounts - this number would have been 360k with a 1% increase if I did not)
Retirement Accounts: 207k (3.5% increase)
RE Values: 206k - 105k mortgage = 101k (9k drop in value of primary according to zillow) (8% decrease)
August was financially nothing to write home about, actually pretty disappointing. I expect September will be slightly better.
So I believe that
A) With roommates I am almost marginally FI (4% wr) now and could be close to safe FI (3% wr) if I dropped expenses associated with work and reined in all other expenses a bit more (actually I don't think I am doing a bad job considering I am living in a relatively high COL area - but I am certainly not optimized on this front either).
B) In three to four years I could be close to safe FI (3% wr) at my present savings rate with roommates and could be around 2.75% if I made a concerted effort to control expenses.
C) It will be a long time (6 or 8 years) before I am safely FI without roommates but that is my long term goal (I like my roommates but would also like the freedom to not have them and still be FI if I chose).
I've noted that with my obscene percentage of cash (CD's, RCA's, promotional deposit accounts, etc.) I could buy myself a job of landlord but right now I do not want any more properties while in my full time position.
Speaking of that full time position, I think I am one of the very few here (there are exceptions I believe) that could be happy in my current work place for at least ten more years.* Of course things could change and I might be desperate to pull the plug 12 months from now but I don't see that happening at the moment. For the most part I think I have a good life balance between the work that I enjoy and the life that I want to (and do) live. On the other hand I could be let go with a 6 month notice which might shove me into unplanned ERE or new job search mode. I really do not see that happening though (less than 2% chance I would think).
Or maybe something will come along that I enjoy even more than my current work. I have been giving a lot of thought to a side job that I might enjoy although I do not see that taking off any time in the next few years. We will see.
September update next month may be more interesting.
*but why am I playing with FIRECalc and reading ERE and MMM so much then?
Net Salary 2900 (Half month salary with small bonus)
Roommates Rents 1350
Rental Property 650
Interest 625
Financial "Games" 400
***Total 5925
August Retirement Account Funding
State Defined Contribution 1200
457 Plan 100
***Total 1300 (Not counted in income or savings rate)
August Expenses
PITI 775
HOA 195
Electric 215
Water-Sewage-Trash 65
Gas 150 (includes trip home to see parents)
Car Insurance 65
Internet and Cable 90
Eating Out 140 (includes mom's birthday and parent's anniversary dinners)
Groceries 150
Pet food and expenses 100
Charities 50
Gift 100 (mom's birthday)
***Total 2095
Savings Rate
Non-retirement savings: 3830 (65% savings rate)
Assets
Liquid Non-retirement net worth: 358k (0.5% increase - I've decided to exclude a couple of small accounts - this number would have been 360k with a 1% increase if I did not)
Retirement Accounts: 207k (3.5% increase)
RE Values: 206k - 105k mortgage = 101k (9k drop in value of primary according to zillow) (8% decrease)
August was financially nothing to write home about, actually pretty disappointing. I expect September will be slightly better.
So I believe that
A) With roommates I am almost marginally FI (4% wr) now and could be close to safe FI (3% wr) if I dropped expenses associated with work and reined in all other expenses a bit more (actually I don't think I am doing a bad job considering I am living in a relatively high COL area - but I am certainly not optimized on this front either).
B) In three to four years I could be close to safe FI (3% wr) at my present savings rate with roommates and could be around 2.75% if I made a concerted effort to control expenses.
C) It will be a long time (6 or 8 years) before I am safely FI without roommates but that is my long term goal (I like my roommates but would also like the freedom to not have them and still be FI if I chose).
I've noted that with my obscene percentage of cash (CD's, RCA's, promotional deposit accounts, etc.) I could buy myself a job of landlord but right now I do not want any more properties while in my full time position.
Speaking of that full time position, I think I am one of the very few here (there are exceptions I believe) that could be happy in my current work place for at least ten more years.* Of course things could change and I might be desperate to pull the plug 12 months from now but I don't see that happening at the moment. For the most part I think I have a good life balance between the work that I enjoy and the life that I want to (and do) live. On the other hand I could be let go with a 6 month notice which might shove me into unplanned ERE or new job search mode. I really do not see that happening though (less than 2% chance I would think).
Or maybe something will come along that I enjoy even more than my current work. I have been giving a lot of thought to a side job that I might enjoy although I do not see that taking off any time in the next few years. We will see.
September update next month may be more interesting.
*but why am I playing with FIRECalc and reading ERE and MMM so much then?
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
When it rains it pours. October will turn out to be the worst month I've experienced financially in many years following on the heels of September, one of the most personally challenging months I've had in many years. More about that after the numbers.
September Income
Net Salary 3700
Roommate Rents 1350
Rental Property 700 (650 rent + 50 late fee)
Interest 600
Financial Games 750
Delayed Income from Summer Contract 100
***Total: 7100
September Retirement Account Funding
State Defined Contribution 270
457 Plan 200
***Total: 470 (Not included in income or savings rate)
September Expenses
PITI 775
HOA 195
Electric 205
Water-Sewage-Trash 55
Gas 120
Car Insurance 65
Car Repair 140 (Serpentine Belt)
Internet and Cable 100
Eating Out 100
Groceries 120
Pet food and expenses 30
Charities 50
***Total: 1955
Savings Rate
Non-retirement savings: 5145 (72%)
Assets
Liquid Non-retirement net worth: 362k (1% increase)
Retirement Accounts: 200k (3.4% decrease)
RE Values: 222k - 105k mortgage = 117k (12k increase in value of primary according to zillow, 8k increase in rental property that I have chosen to ignore because I think it is wrong) 11% increase)
So I was shocked to learn that my ex gave away my dog (due to what she claims was a misunderstanding) that I love more than some love their children. She did this in a distant city so I have tried to leverage all of my contacts in that city, social media, tracking technology and burned through all of my minutes contacting shelters, vets and rescues in the region trying to find the people who (unwittingly?) took my dog. In October I am budgeting 1.5k for search costs and 2k for potential rewards for information leading to her return. Many people will not understand how strongly one can feel about your pets and many think it is crazy to think of companion animals as your children or family but all I can say is that this is how I feel and that my friends and my family all understand. One of my favorite activities is volunteering at local animal shelters (they are no kill by public policy in my region) and the best experiences I have had is reuniting a beloved pet with his/her family.
I've also hit a little snag with my rental property tenant. She evidently has lost one of her income streams and had to decide between paying the electric bill or the rent. She paid the rent two weeks later with a $50 late fee. Also, one of my roommates seems to be having financial difficulties and I think October might be his last month here. He is a pretty nice guy and I think of his dogs as mine (and they apparently do too) and will offer to let him leave his dogs with me for as long as he needs to if it turns out he has to look for alternate housing. Ugh, finding new roommates is always a hassle and this is a far from ideal time to do that. I might need to temporarily lower my rent if I have to find a new roommate in November.
My other roommate has been at his girlfriends for over a month so who knows if I will need to find TWO new roommates soon. This motivates me to get FI w/o roommates ASAP. Six to eight years is too far out, I am going to have to kick up my income one way or another and get super serious about paring expenses down (in a high COL region) to cut that time in half.
Finally, I get to replace an AC system on a house that is only six years old. WTF!!! One of the selling points twas that everything was new and well maintained so this should not be happening for at least 10 more years. Lucky me. I am seriously thinking about buying a home warranty as much as people seem to be wary of them in general. Cost of new system: 4k!
SO October could be a financial disaster on top of loosing my dog:
1) 3.5k budgeted for recovering my furry kid
2) 4k for a new AC system + 300 for a refurbished portable AC unit to bridge the gap
3) 2k in living expenses
4) Loss of 750 rent
Income of about 5k (given number 4 above) leads to a negative savings rate of 4k to 5k.
I have enough frequent flyer miles and reward points on my credit cards to redeem for about 5k, I might do that to defray the shock of this financial bolt from the blue.
One slightly positive bit of news is that I have been offered a very easy permanent part-time job that could lead to something bigger and should bring in a net of 1k per month beginning in January.
Thanks for reading and please consider adopting from your local shelter or rescue if you want to know the unconditional love of a companion animal.
September Income
Net Salary 3700
Roommate Rents 1350
Rental Property 700 (650 rent + 50 late fee)
Interest 600
Financial Games 750
Delayed Income from Summer Contract 100
***Total: 7100
September Retirement Account Funding
State Defined Contribution 270
457 Plan 200
***Total: 470 (Not included in income or savings rate)
September Expenses
PITI 775
HOA 195
Electric 205
Water-Sewage-Trash 55
Gas 120
Car Insurance 65
Car Repair 140 (Serpentine Belt)
Internet and Cable 100
Eating Out 100
Groceries 120
Pet food and expenses 30
Charities 50
***Total: 1955
Savings Rate
Non-retirement savings: 5145 (72%)
Assets
Liquid Non-retirement net worth: 362k (1% increase)
Retirement Accounts: 200k (3.4% decrease)
RE Values: 222k - 105k mortgage = 117k (12k increase in value of primary according to zillow, 8k increase in rental property that I have chosen to ignore because I think it is wrong) 11% increase)
So I was shocked to learn that my ex gave away my dog (due to what she claims was a misunderstanding) that I love more than some love their children. She did this in a distant city so I have tried to leverage all of my contacts in that city, social media, tracking technology and burned through all of my minutes contacting shelters, vets and rescues in the region trying to find the people who (unwittingly?) took my dog. In October I am budgeting 1.5k for search costs and 2k for potential rewards for information leading to her return. Many people will not understand how strongly one can feel about your pets and many think it is crazy to think of companion animals as your children or family but all I can say is that this is how I feel and that my friends and my family all understand. One of my favorite activities is volunteering at local animal shelters (they are no kill by public policy in my region) and the best experiences I have had is reuniting a beloved pet with his/her family.
I've also hit a little snag with my rental property tenant. She evidently has lost one of her income streams and had to decide between paying the electric bill or the rent. She paid the rent two weeks later with a $50 late fee. Also, one of my roommates seems to be having financial difficulties and I think October might be his last month here. He is a pretty nice guy and I think of his dogs as mine (and they apparently do too) and will offer to let him leave his dogs with me for as long as he needs to if it turns out he has to look for alternate housing. Ugh, finding new roommates is always a hassle and this is a far from ideal time to do that. I might need to temporarily lower my rent if I have to find a new roommate in November.
My other roommate has been at his girlfriends for over a month so who knows if I will need to find TWO new roommates soon. This motivates me to get FI w/o roommates ASAP. Six to eight years is too far out, I am going to have to kick up my income one way or another and get super serious about paring expenses down (in a high COL region) to cut that time in half.
Finally, I get to replace an AC system on a house that is only six years old. WTF!!! One of the selling points twas that everything was new and well maintained so this should not be happening for at least 10 more years. Lucky me. I am seriously thinking about buying a home warranty as much as people seem to be wary of them in general. Cost of new system: 4k!
SO October could be a financial disaster on top of loosing my dog:
1) 3.5k budgeted for recovering my furry kid
2) 4k for a new AC system + 300 for a refurbished portable AC unit to bridge the gap
3) 2k in living expenses
4) Loss of 750 rent
Income of about 5k (given number 4 above) leads to a negative savings rate of 4k to 5k.
I have enough frequent flyer miles and reward points on my credit cards to redeem for about 5k, I might do that to defray the shock of this financial bolt from the blue.
One slightly positive bit of news is that I have been offered a very easy permanent part-time job that could lead to something bigger and should bring in a net of 1k per month beginning in January.
Thanks for reading and please consider adopting from your local shelter or rescue if you want to know the unconditional love of a companion animal.
Re: Last Digit Of Pi
So sorry to hear that your ex gave away your dog! That must be devastating. I have always considered my pets to be part of the family, so I know what it's like to have that kind of connection and attachment. My fingers are crossed that you'll be able to locate your dog.
Although October may feel ruinous, your financial situation is very stable. Looking at it from a macro-level, this will barely show up as a blip.
Although October may feel ruinous, your financial situation is very stable. Looking at it from a macro-level, this will barely show up as a blip.
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
Thanks for the kind words llorona, I am very happy to report that my dog has been located and has been receiving great care. It is hard to express how much of a relief this is to me. I can finally focus at work again.
You are right about the financial situation: as bad as October might have been it is not really any worse than a not so rare bad day in the market (once I get my liquid assets invested). My reaction may have been a bit overdone. Admittedly it was nerve wracking having so many simultaneous potential monetary setbacks while I was dealing with losing my dog. Things have settled a bit in the last 24 hours though: I will have both my current roommates stay through at least November and I have confirmation that I will have a pretty easy side job (2 to 4 hours a week) beginning January that should cover more than half of my standard living expenses.
You are right about the financial situation: as bad as October might have been it is not really any worse than a not so rare bad day in the market (once I get my liquid assets invested). My reaction may have been a bit overdone. Admittedly it was nerve wracking having so many simultaneous potential monetary setbacks while I was dealing with losing my dog. Things have settled a bit in the last 24 hours though: I will have both my current roommates stay through at least November and I have confirmation that I will have a pretty easy side job (2 to 4 hours a week) beginning January that should cover more than half of my standard living expenses.
-
George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
Re: Last Digit Of Pi
Temporary monetary setbacks are just that: temporary. Compared to the total you're saving, it is a drop in the bucket.
So sorry about your dog!
So sorry about your dog!
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
You're right George, even the worst case scenario I had painted for October would have been a one day fluctuation in my net worth if I were fully invested.
But the most important concern I had (by far!) at the start of this month has been happily resolved: I have found my dog and she is ok, in fact it seems like she has been treated like royalty.
But the most important concern I had (by far!) at the start of this month has been happily resolved: I have found my dog and she is ok, in fact it seems like she has been treated like royalty.
-
George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
Re: Last Digit Of Pi
Hurray!LastDigitOfPi wrote:But the most important concern I had (by far!) at the start of this month has been happily resolved: I have found my dog and she is ok, in fact it seems like she has been treated like royalty.
Re: Last Digit Of Pi
So happy for you that you have your dog back!
I get it. Totally worth the money.
I get it. Totally worth the money.
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
Thanks GTOO and BPA - nothing can get me down if I know my kid is doing well! 
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
October was a great month for me for one reason in particular - finding my dog in a wonderful loving home.
Financially things worked out much better than I imagined: I was able to have a positive 60% savings rate instead of a negative 80% savings rate thanks to getting a 4th opinion on the AC system. Three repairman said I would need to replace it at a net cost of about 4k. The last guy looked at the compressor and within seconds said he could repair it for less than 500. Of course I bought an extended maintenance and -factoring in the portable ac units I bought for my roommates and the service calls for naught- the total came to less than 1k. But -wouldn't you know it?- my rental unit requires a new set of heating strips for 750 (which will show up in my November numbers). You win some you lose some.
October Income
Net Salary 3700
Roommate Rents 1350
Rental Property 600
Interest 600
Financial Games 150
Side Income 200
Partial Loan Repayment 350
***Total: 6950
October Retirement Account Funding
State Defined Contribution 320
457 Plan 200
***Total: 520 (Not included in income or savings rate)
October Expenses
AC Repair & associated costs 920
PITI 775
HOA 195
Electric 150
Water-Sewage-Trash 50
Gas 90
Car Insurance 65
Internet and Cable 100
Eating Out 120
Groceries 85
Pet food and expenses 0
Charities 150
***Total: 2700
Savings Rate
Non-retirement savings: 4250 (61%)
Assets
Liquid Non-retirement net worth: 366k (1% increase)
Retirement Accounts: 205k (2.5% increase)
RE Values: 249k - 105k mortgage = 144k (18k increase in value of primary according to zillow, 3k increase in rental, 6k increase in interest in family property) (23% increase - though I am not sure that I believe these values)
A new and interesting opportunity might be taking shape in a form that represents an intersection of science, education and small screen entertainment. Apparently I made a good impression with a celebrity friend of a former colleague in the industry. May not pan out or could be a pivotal shift in life, we shall see. My other opportunity for part time supplemental employment is much more likely to happen and begins in January.
Financially things worked out much better than I imagined: I was able to have a positive 60% savings rate instead of a negative 80% savings rate thanks to getting a 4th opinion on the AC system. Three repairman said I would need to replace it at a net cost of about 4k. The last guy looked at the compressor and within seconds said he could repair it for less than 500. Of course I bought an extended maintenance and -factoring in the portable ac units I bought for my roommates and the service calls for naught- the total came to less than 1k. But -wouldn't you know it?- my rental unit requires a new set of heating strips for 750 (which will show up in my November numbers). You win some you lose some.
October Income
Net Salary 3700
Roommate Rents 1350
Rental Property 600
Interest 600
Financial Games 150
Side Income 200
Partial Loan Repayment 350
***Total: 6950
October Retirement Account Funding
State Defined Contribution 320
457 Plan 200
***Total: 520 (Not included in income or savings rate)
October Expenses
AC Repair & associated costs 920
PITI 775
HOA 195
Electric 150
Water-Sewage-Trash 50
Gas 90
Car Insurance 65
Internet and Cable 100
Eating Out 120
Groceries 85
Pet food and expenses 0
Charities 150
***Total: 2700
Savings Rate
Non-retirement savings: 4250 (61%)
Assets
Liquid Non-retirement net worth: 366k (1% increase)
Retirement Accounts: 205k (2.5% increase)
RE Values: 249k - 105k mortgage = 144k (18k increase in value of primary according to zillow, 3k increase in rental, 6k increase in interest in family property) (23% increase - though I am not sure that I believe these values)
A new and interesting opportunity might be taking shape in a form that represents an intersection of science, education and small screen entertainment. Apparently I made a good impression with a celebrity friend of a former colleague in the industry. May not pan out or could be a pivotal shift in life, we shall see. My other opportunity for part time supplemental employment is much more likely to happen and begins in January.
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
November saw: some unusual expenses; a great amount of travel for the job; discussions with Apollo and Shuttle astronauts as well as a 'Bad' astronomer and an 'Amazing' magician/promoter of critical thinking; one roommate leaving and a new roommate entering and a talk with the parents about turning the vacant family SFH into a rental.
November Income
Net Salary 3700
Roommate Rents 1350
Rental Property 600
Interest 600
Financial Games 25
Side Income 125
Partial Loan Repayment 350 (I count loans as expenses when made to friends or family and income when repaid)
***Total: 6750
November Retirement Account Funding
State Defined Contribution 320
457 Plan 200
***Total: 520 (Not included in income or savings rate)
November Expenses
Rental Home Heating System Repair 720
Rental Property Taxes 900
PITI 775
HOA 195
Electric 130
Water-Sewage-Trash 300 (Prepaid approximately 6 months)
Gas 75
Car Insurance 295 (Prepaid 6 months through May 2015)
Internet and Cable 100
Eating Out 110
Groceries 95
Pet food and expenses 20 (Healthy snacks for roommates' dogs)
Job Related 70
Charities 425
***Total: 3910
Savings Rate
Non-retirement savings: 2840 (41%) (Record low for the year)
Assets
Liquid Non-retirement net worth: 371k (1.4% increase)
Retirement Accounts: 207k (1.0% increase)
RE Values: 250k - 105k mortgage = 145k (0.7% increase)
So on the home-front the roommate that spent the last three months at his girlfriend's house has decided to move in with her. Within 1 day of posting the room on Craigslist I had 8 emails, 5 texts and 7 phone calls and the next day had it held with a deposit by the first person I showed it to which makes me think that I might be asking a bit under market rates. I'll have to do some research the next time I put a room up for rent to see if a rent increase is reasonable. He seems like a nice professional guy and he was happy to make a 6 month minimum commitment so hopefully I won't have to worry about roommate replacement any time soon.
As mentioned in my October entry the heating trips in my rental unit had to be replaced. In addition, I paid the 2015 taxes on that property so my rental expenses were over 1600 for the month. The taxes were not due until April but I get a discount for each month early that I pay so I took advantage of the maximum discount by paying in November. I also prepaid my auto insurance for the next 6 months for a similar discount. Ditto for my water-sewage-trash service from the city. The discounts were nice but the real reason that I made all of these prepayments was to hit the spend requirement on my newest credit card (63k AAdvantage miles expected in December, thanks Citi).
I made a number of larger than normal donations to charities this month as well (I sometimes daydream of the causes I would sponsor if I were a multi-billionaire hell bent on leaving the ultimate legacy for the good of humankind and the planet's biosphere). This all added up to the lowest savings rate for the year at 41%. OTOH, both the non-retirement and retirement account balances saw slightly above average increases.
November was an unusual month for travel as I was out of town quite a bit for the job. During one leg of the trip I was near my parents home and made a slight detour to see them. While visiting I suggested that they consider turning the vacant SFH we own into a rental property. I was surprised that they were receptive to the idea so maybe during the holidays I will go home and help them get the property up to muster.
A colleague from a past professional life contacted me and subsequently I had some interesting conversations with Apollo/Shuttle astronauts as well as some well known 'popularizers' of science and critical thinking. More to come on that front.
It was hinted to me that my responsibilities at my job may expand if I want them to next year. I will spend December mulling over the idea before it becomes a definite option. This would not be compatible with the easy side job I was supposed to start in January to cover over half my living expenses with a few extra hours of work each week. At least I have some time to think about that.
November Income
Net Salary 3700
Roommate Rents 1350
Rental Property 600
Interest 600
Financial Games 25
Side Income 125
Partial Loan Repayment 350 (I count loans as expenses when made to friends or family and income when repaid)
***Total: 6750
November Retirement Account Funding
State Defined Contribution 320
457 Plan 200
***Total: 520 (Not included in income or savings rate)
November Expenses
Rental Home Heating System Repair 720
Rental Property Taxes 900
PITI 775
HOA 195
Electric 130
Water-Sewage-Trash 300 (Prepaid approximately 6 months)
Gas 75
Car Insurance 295 (Prepaid 6 months through May 2015)
Internet and Cable 100
Eating Out 110
Groceries 95
Pet food and expenses 20 (Healthy snacks for roommates' dogs)
Job Related 70
Charities 425
***Total: 3910
Savings Rate
Non-retirement savings: 2840 (41%) (Record low for the year)
Assets
Liquid Non-retirement net worth: 371k (1.4% increase)
Retirement Accounts: 207k (1.0% increase)
RE Values: 250k - 105k mortgage = 145k (0.7% increase)
So on the home-front the roommate that spent the last three months at his girlfriend's house has decided to move in with her. Within 1 day of posting the room on Craigslist I had 8 emails, 5 texts and 7 phone calls and the next day had it held with a deposit by the first person I showed it to which makes me think that I might be asking a bit under market rates. I'll have to do some research the next time I put a room up for rent to see if a rent increase is reasonable. He seems like a nice professional guy and he was happy to make a 6 month minimum commitment so hopefully I won't have to worry about roommate replacement any time soon.
As mentioned in my October entry the heating trips in my rental unit had to be replaced. In addition, I paid the 2015 taxes on that property so my rental expenses were over 1600 for the month. The taxes were not due until April but I get a discount for each month early that I pay so I took advantage of the maximum discount by paying in November. I also prepaid my auto insurance for the next 6 months for a similar discount. Ditto for my water-sewage-trash service from the city. The discounts were nice but the real reason that I made all of these prepayments was to hit the spend requirement on my newest credit card (63k AAdvantage miles expected in December, thanks Citi).
I made a number of larger than normal donations to charities this month as well (I sometimes daydream of the causes I would sponsor if I were a multi-billionaire hell bent on leaving the ultimate legacy for the good of humankind and the planet's biosphere). This all added up to the lowest savings rate for the year at 41%. OTOH, both the non-retirement and retirement account balances saw slightly above average increases.
November was an unusual month for travel as I was out of town quite a bit for the job. During one leg of the trip I was near my parents home and made a slight detour to see them. While visiting I suggested that they consider turning the vacant SFH we own into a rental property. I was surprised that they were receptive to the idea so maybe during the holidays I will go home and help them get the property up to muster.
A colleague from a past professional life contacted me and subsequently I had some interesting conversations with Apollo/Shuttle astronauts as well as some well known 'popularizers' of science and critical thinking. More to come on that front.
It was hinted to me that my responsibilities at my job may expand if I want them to next year. I will spend December mulling over the idea before it becomes a definite option. This would not be compatible with the easy side job I was supposed to start in January to cover over half my living expenses with a few extra hours of work each week. At least I have some time to think about that.
Re: Last Digit Of Pi
Looking at your initial post it looks like your non-employment income (room mates, rental, etc) is higher than your average monthly expenses, so I'd say you're FI right now. Even if you assume a low 3% SWR from your liquid investments and retirement accounts that gives you a $15K/year cushion.
I've been ER'ed for 10 years on less than that.
Steve
I've been ER'ed for 10 years on less than that.
Steve
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
Hi Steve, yes, you are right, the non-employment income covers my average monthly expenses but I probably could have presented the information more clearly.
The room mate and tenant rents add up to 1950 (rather than use the 50% rule of thumb for rental income I include the expenses in my estimate of variable monthly costs). The monthly CD interest income of 625 which closes the gap requires 250k of my 375k liquid non-retirement accounts. So the buffer is a bit smaller. Also, I usually ignore my retirement accounts but if I do count them I usually multiply them by 60% for the liquidated value net of penalties and taxes. In that scenario my liquid net worth outside of the CD's would be about 250k which could give a safe buffer of 7500/year.
So you are pretty much correct and I like the way you broke it down. But longer term the CD interest will have to become dividend or other income. Next step is getting to the point where room mates will not be necessary for FI - that will be a few years down the road I think.
This reminds me that my CD's will mature next year, it will be scary dumping all that into equities at once. I am trying to decide between dividend growth or total return or some mix of the two. Maybe putting 100k back into a 3+% CD, 75k into dividend growth and 75k into total return would be more palatable.
The room mate and tenant rents add up to 1950 (rather than use the 50% rule of thumb for rental income I include the expenses in my estimate of variable monthly costs). The monthly CD interest income of 625 which closes the gap requires 250k of my 375k liquid non-retirement accounts. So the buffer is a bit smaller. Also, I usually ignore my retirement accounts but if I do count them I usually multiply them by 60% for the liquidated value net of penalties and taxes. In that scenario my liquid net worth outside of the CD's would be about 250k which could give a safe buffer of 7500/year.
So you are pretty much correct and I like the way you broke it down. But longer term the CD interest will have to become dividend or other income. Next step is getting to the point where room mates will not be necessary for FI - that will be a few years down the road I think.
This reminds me that my CD's will mature next year, it will be scary dumping all that into equities at once. I am trying to decide between dividend growth or total return or some mix of the two. Maybe putting 100k back into a 3+% CD, 75k into dividend growth and 75k into total return would be more palatable.
Re: Last Digit Of Pi
I think discounting your retirement accounts by 60% is unnecessarily pessimistic. You could access them starting now without penalty using 72(T) withdrawals, or convert them tax-free to a Roth once you're retired and in a low tax rate. Once they're in a Roth you can withdraw the principal penalty and tax free.
Have you considered selling your primary residence and replacing it with a 2-4 unit building? That way you can have the privacy of your own place without sacrificing the income you're currently getting from the roomates.
Have you considered selling your primary residence and replacing it with a 2-4 unit building? That way you can have the privacy of your own place without sacrificing the income you're currently getting from the roomates.
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
You've given me something to think about. I remember a while back looking into 72(T) and SEPPs and vaguely recall thinking that it would be hard to make work smoothly. Do I wait until my taxable accounts are drawn down to begin them? Do I begin when the (taxable account withdrawals) / (RMD) is equal to the (taxable account balance) / (retirement account balance)? Time to revisit that possibility.
Real estate prices have risen fast in my region since I purchased my current home almost 2 years ago and I would be hesitant to invest in any property in a good area at these levels. A 3 or 4 unit building is also hard to find around here but from what I see I would need to trade my 185k - 200k SFH for a 400k+ MF building. I could probably swing it but closing costs and extra down payment would easily eat up 100k to 150k of capital. Generally these buildings tend to be close to the beach too which builds in an even higher premium. The idea is a good one though and if I ever move to a different part of the state or country or if RE prices come back to a more reasonable level some day it is something I would certainly consider . For now I am happy living with room mates but I definitely see a point in the future where I would like more privacy (or at least have that option while remaining FI).
ETA: Yeah, the Roth idea is a great one as well, I hear there are tricks to move substantial amounts into r-IRAs which I need to look into.
Real estate prices have risen fast in my region since I purchased my current home almost 2 years ago and I would be hesitant to invest in any property in a good area at these levels. A 3 or 4 unit building is also hard to find around here but from what I see I would need to trade my 185k - 200k SFH for a 400k+ MF building. I could probably swing it but closing costs and extra down payment would easily eat up 100k to 150k of capital. Generally these buildings tend to be close to the beach too which builds in an even higher premium. The idea is a good one though and if I ever move to a different part of the state or country or if RE prices come back to a more reasonable level some day it is something I would certainly consider . For now I am happy living with room mates but I definitely see a point in the future where I would like more privacy (or at least have that option while remaining FI).
ETA: Yeah, the Roth idea is a great one as well, I hear there are tricks to move substantial amounts into r-IRAs which I need to look into.
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
Welcome to 2015! I hope this year is a very prosperous and enjoyable one for everybody here. December was a good month for me. Although I began my journal less than 6 months ago I will look back briefly and then give my resolutions for the newly minted year.
December Income
Net Salary 9250 (5 semi-monthly paycheck month)
Roommate Rents 1350
Rental Property 600
Interest 625
Financial Games 250 (+63k AAdvantage miles)
Side Income 125
***Total: 12200
December Retirement Account Funding
State Defined Contribution 320 (480 less than expected)
457 Plan 200 (300 less than expected)
***Total: 520 (Not included in income or savings rate) (780 less than expected)
December Expenses
PITI 775
HOA 195
Electric 95
Water-Sewage-Trash 0 (Prepaid through April or May in November)
Gas 75
Car Insurance 0 (Prepaid 6 months through May 2015 in November)
Internet and Cable 100
Eating Out 100
Groceries 120
Pet food and expenses 20
Gifts 550 (Christmas gifts for family and friends, SFH fixes)
Charities 1500
***Total: 3530
Savings Rate
Non-retirement savings: 8670 (71%)
Assets
Liquid Non-retirement net worth: 378k (2.0% increase)
Retirement Accounts: 208k (0.5% increase)
RE Values: 250k - 105k mortgage = 145k (0.0% increase)
In December we receive 5 semi-monthly paychecks rather than the normal 2. These are not bonuses and I am not sure why it is done this way but it always makes December a month to look forward to. So the income was very good. However 800 was deducted for my defined contribution plan but only 320 was credited to my retirement account. Also 500 was deducted for my 457 retirement plan but only 200 was credited. I need to figure out what happened to that 780 in retirement funds that appear to be in limbo.
Expenses for December hit a high for the year as well but this is primarily due to the gift and charity categories. Gifts include initial costs helping my parents fix some just discovered major issues with the unoccupied SFH we own. Unfortunately we won't be able to just clean up the place and start renting it. Some rehab work is going to be necessary. My mom was hesitant but I hope I can get her to see that this work has to be done at some point and the longer we wait the worse the problem will get and the more expensive it will be to eventually fix. It also means lost rental income. I think I convinced my parents we should go forward but they are still thinking about it (I have no idea what is preventing them except for the fact that it never feels good to have to spend a lot of money on 'unexpected' issues).
December was my peak month for charitable giving as well. Many organizations have double or triple matching but you have to be careful because in most cases this matching is only up to a certain amount and you cannot be sure if they have already hit the cap or will likely hit the cap (in which case your donation does not have any multiplier effect). It is nice though when you can donate 200 and the organization receives 600. I also look for charities that must hit a certain donation number to receive a lump sum matching amount (similar problem to the double or triple matching campaigns). Of course I do this after I filter everything through Charity Navigator and perform a bit more research on any new charities I am considering.
In 2015 I would like to expand my charitable giving by 10% or more to the 4k range. Generally I give to animal welfare, environmental and natural conservation, human rights, (humane) medical research and educational opportunity organizations.
During 2014 I haven't explicitly done net worth calculations but it is an important metric that I should probably keep track of in 2015. My problem is that I generally like to be very conservative when I make a calculation like this, preferring to err on the side of caution. If I had to liquidate everything today what would I be worth? After accounting for penalties and taxes for retirement accounts as well as taxes and transactional costs for real estate what number would that be?
Using the rough formula LNW = NRA + 0.6(RA + NREV) I would be at about 590k.
Just adding up the net assets I would have NW = NRA + RA + NREV = 731k.
In these formulas NRA = Non-Retirement Accounts; RA = Retirement Accounts; NREV = Net Real Estate Value estimated by assuming the first quartile value of Zillow ranges and subtracting my mortgage. The coefficient of 0.6 would reflect roughly 10% penalty and 30% taxes for RA. For RE assets I get the same coefficient by subtracting 10% for transactional costs and 30% for taxes. I think tracking both numbers would be helpful in monitoring my progress. Steve made a good point that I could access my retirement accounts with no penalty and minimal taxes once I am in a low income or retired status so my LNW formula is certainly a lower bound on my liquidated net worth
The easy part-time second income I was planing on starting in January 2015 has been delayed as the employer has pushed back the opening date until April or May. I am also leaning away from accepting more responsibilities and a slightly higher salary at my primary job as well. But I have not really made a decision yet on that option. Right now I cannot justify the additional time commitment and workload for the salary bump. On the other hand I am still in the process of determining if there is an opportunity to take a giant leap into a STEM media direction.
In 2015 I might step up the financial gaming a bit as it is easy and takes so little time and effort. Last year I made close to 4k in cash and 250k in airline miles with an average time of 2 hours per month devoted to the pursuit. Sign-up bonuses for credit cards (tax free spoils), bank accounts, brokerage accounts and gambling accounts (sometimes tax free) are the low hanging fruit. I do not think I will get into the manufactured spend game as it takes too much time and effort to make non-trivial amounts. There are some individuals making 6 figures off of this tactic but as CCs and banks become aware and shut down the easiest avenues it does not seem like something that will last very much longer. For me it would be hard to maintain my primary job and a life outside that job if were to try to go all-in like some heavy hitters.
Later this year I will also have to figure out what to do with the almost 250k in CDs that are maturing - this will take an enormous amount of psychological effort on my part to do the financially smart thing and diversify into equities for total return and maybe dividend growth. We'll see.
Fun skills I hope to acquire before the Summer of 2015 include basic scuba diving and sailing. I have signed up for classes (free perk from employer) and am excited about starting in a few months.
One thing I do not look forward to in 2015 is a likely scuffle with my HOA. A new group of non-owners have come in and told us that we have to start following some Draconian rules and regulations that were not in place before and would have made me move on from purchasing my home. It was all done very sloppily without informing owners of any pending changes and as far as I can tell the whole matter seems to have occurred illegally. My attorney seems to think I have an extremely good chance of prevailing should the matter go before a judge. But there is a non-zero probability it could all shake out in a way that is bad for me and the rest of the home owners as well. Still, I am willing to lead the charge because these new rules are completely unacceptable to me.
Looking back at 2014 there were some emotional highs and lows: the three biggest events involved my animal companions.
In May I lost the most incredible dog I've ever owned. He seemed to know only the happiness and to see only the beauty in the world around him. He had to be put down as Cushing's disease reduced his quality of life to a point where I felt it was unacceptable to keep him alive just for my inability to let go. Even as his health failed and he lost most of his vision and his mobility I will never forget the amazingly positive attitude he maintained. To the very end he remained a joyful spirit. His tail was wagging and he made every effort to get up and give us kisses during the last hour. If only I could have the outlook and attitude through my final days that he did.
In a story with a happier ending my ex gave away my dog to someone before she left the city in which we both used to live. After frantically searching for her I found that a wonderful family adopted her and I have become good friends with them, checking in on a regular basis. I realize that my dog has a home life that I cannot give her so I decided to let her live with her new family. I still miss her very much and look forward to visiting her a couple of times a year.
Finally, just a few weeks I ago I discovered my ex had given away the other of the two dogs we had together. This dog was 'her' dog. In October I could not believe that she broke them up and then in December I was again shocked to learn that she gave her dog away. Mine was given to a complete stranger and hers to someone she would likely not see again. The person my ex gave 'her' dog to lost it so she contacted me asking for help. Luckily I was able to locate her dog within 24 hours using the same channels that worked successfully for me in October.
My Dachshund is on the left and the ex's Beagle is on the right (although I consider both of them mine, and I think the feeling is mutual).
Resolutions/Goals for 2015
1) Increase liquid non-retirement net worth to 400k and total liquidated net worth to 625k.
2) Diversify majority of maturing CDs into a well balanced equity portfolio for total return and possibly dividend growth. Keep at most 100k in a 3%+ CD.
3) Increase charitable giving to 10% more than in 2014.
4) Increase financial gaming income beyond the 2014 values.
5) Learn basic scuba diving and sailing.
6) Fight my HOAs rules and regulations changes and make them follow the by-laws and legal requirements they seem to have ignored.
Here's to meeting all of our goals for 2015 and beyond (financial and otherwise)!
December Income
Net Salary 9250 (5 semi-monthly paycheck month)
Roommate Rents 1350
Rental Property 600
Interest 625
Financial Games 250 (+63k AAdvantage miles)
Side Income 125
***Total: 12200
December Retirement Account Funding
State Defined Contribution 320 (480 less than expected)
457 Plan 200 (300 less than expected)
***Total: 520 (Not included in income or savings rate) (780 less than expected)
December Expenses
PITI 775
HOA 195
Electric 95
Water-Sewage-Trash 0 (Prepaid through April or May in November)
Gas 75
Car Insurance 0 (Prepaid 6 months through May 2015 in November)
Internet and Cable 100
Eating Out 100
Groceries 120
Pet food and expenses 20
Gifts 550 (Christmas gifts for family and friends, SFH fixes)
Charities 1500
***Total: 3530
Savings Rate
Non-retirement savings: 8670 (71%)
Assets
Liquid Non-retirement net worth: 378k (2.0% increase)
Retirement Accounts: 208k (0.5% increase)
RE Values: 250k - 105k mortgage = 145k (0.0% increase)
In December we receive 5 semi-monthly paychecks rather than the normal 2. These are not bonuses and I am not sure why it is done this way but it always makes December a month to look forward to. So the income was very good. However 800 was deducted for my defined contribution plan but only 320 was credited to my retirement account. Also 500 was deducted for my 457 retirement plan but only 200 was credited. I need to figure out what happened to that 780 in retirement funds that appear to be in limbo.
Expenses for December hit a high for the year as well but this is primarily due to the gift and charity categories. Gifts include initial costs helping my parents fix some just discovered major issues with the unoccupied SFH we own. Unfortunately we won't be able to just clean up the place and start renting it. Some rehab work is going to be necessary. My mom was hesitant but I hope I can get her to see that this work has to be done at some point and the longer we wait the worse the problem will get and the more expensive it will be to eventually fix. It also means lost rental income. I think I convinced my parents we should go forward but they are still thinking about it (I have no idea what is preventing them except for the fact that it never feels good to have to spend a lot of money on 'unexpected' issues).
December was my peak month for charitable giving as well. Many organizations have double or triple matching but you have to be careful because in most cases this matching is only up to a certain amount and you cannot be sure if they have already hit the cap or will likely hit the cap (in which case your donation does not have any multiplier effect). It is nice though when you can donate 200 and the organization receives 600. I also look for charities that must hit a certain donation number to receive a lump sum matching amount (similar problem to the double or triple matching campaigns). Of course I do this after I filter everything through Charity Navigator and perform a bit more research on any new charities I am considering.
In 2015 I would like to expand my charitable giving by 10% or more to the 4k range. Generally I give to animal welfare, environmental and natural conservation, human rights, (humane) medical research and educational opportunity organizations.
During 2014 I haven't explicitly done net worth calculations but it is an important metric that I should probably keep track of in 2015. My problem is that I generally like to be very conservative when I make a calculation like this, preferring to err on the side of caution. If I had to liquidate everything today what would I be worth? After accounting for penalties and taxes for retirement accounts as well as taxes and transactional costs for real estate what number would that be?
Using the rough formula LNW = NRA + 0.6(RA + NREV) I would be at about 590k.
Just adding up the net assets I would have NW = NRA + RA + NREV = 731k.
In these formulas NRA = Non-Retirement Accounts; RA = Retirement Accounts; NREV = Net Real Estate Value estimated by assuming the first quartile value of Zillow ranges and subtracting my mortgage. The coefficient of 0.6 would reflect roughly 10% penalty and 30% taxes for RA. For RE assets I get the same coefficient by subtracting 10% for transactional costs and 30% for taxes. I think tracking both numbers would be helpful in monitoring my progress. Steve made a good point that I could access my retirement accounts with no penalty and minimal taxes once I am in a low income or retired status so my LNW formula is certainly a lower bound on my liquidated net worth
The easy part-time second income I was planing on starting in January 2015 has been delayed as the employer has pushed back the opening date until April or May. I am also leaning away from accepting more responsibilities and a slightly higher salary at my primary job as well. But I have not really made a decision yet on that option. Right now I cannot justify the additional time commitment and workload for the salary bump. On the other hand I am still in the process of determining if there is an opportunity to take a giant leap into a STEM media direction.
In 2015 I might step up the financial gaming a bit as it is easy and takes so little time and effort. Last year I made close to 4k in cash and 250k in airline miles with an average time of 2 hours per month devoted to the pursuit. Sign-up bonuses for credit cards (tax free spoils), bank accounts, brokerage accounts and gambling accounts (sometimes tax free) are the low hanging fruit. I do not think I will get into the manufactured spend game as it takes too much time and effort to make non-trivial amounts. There are some individuals making 6 figures off of this tactic but as CCs and banks become aware and shut down the easiest avenues it does not seem like something that will last very much longer. For me it would be hard to maintain my primary job and a life outside that job if were to try to go all-in like some heavy hitters.
Later this year I will also have to figure out what to do with the almost 250k in CDs that are maturing - this will take an enormous amount of psychological effort on my part to do the financially smart thing and diversify into equities for total return and maybe dividend growth. We'll see.
Fun skills I hope to acquire before the Summer of 2015 include basic scuba diving and sailing. I have signed up for classes (free perk from employer) and am excited about starting in a few months.
One thing I do not look forward to in 2015 is a likely scuffle with my HOA. A new group of non-owners have come in and told us that we have to start following some Draconian rules and regulations that were not in place before and would have made me move on from purchasing my home. It was all done very sloppily without informing owners of any pending changes and as far as I can tell the whole matter seems to have occurred illegally. My attorney seems to think I have an extremely good chance of prevailing should the matter go before a judge. But there is a non-zero probability it could all shake out in a way that is bad for me and the rest of the home owners as well. Still, I am willing to lead the charge because these new rules are completely unacceptable to me.
Looking back at 2014 there were some emotional highs and lows: the three biggest events involved my animal companions.
In May I lost the most incredible dog I've ever owned. He seemed to know only the happiness and to see only the beauty in the world around him. He had to be put down as Cushing's disease reduced his quality of life to a point where I felt it was unacceptable to keep him alive just for my inability to let go. Even as his health failed and he lost most of his vision and his mobility I will never forget the amazingly positive attitude he maintained. To the very end he remained a joyful spirit. His tail was wagging and he made every effort to get up and give us kisses during the last hour. If only I could have the outlook and attitude through my final days that he did.
In a story with a happier ending my ex gave away my dog to someone before she left the city in which we both used to live. After frantically searching for her I found that a wonderful family adopted her and I have become good friends with them, checking in on a regular basis. I realize that my dog has a home life that I cannot give her so I decided to let her live with her new family. I still miss her very much and look forward to visiting her a couple of times a year.
Finally, just a few weeks I ago I discovered my ex had given away the other of the two dogs we had together. This dog was 'her' dog. In October I could not believe that she broke them up and then in December I was again shocked to learn that she gave her dog away. Mine was given to a complete stranger and hers to someone she would likely not see again. The person my ex gave 'her' dog to lost it so she contacted me asking for help. Luckily I was able to locate her dog within 24 hours using the same channels that worked successfully for me in October.
My Dachshund is on the left and the ex's Beagle is on the right (although I consider both of them mine, and I think the feeling is mutual).
Resolutions/Goals for 2015
1) Increase liquid non-retirement net worth to 400k and total liquidated net worth to 625k.
2) Diversify majority of maturing CDs into a well balanced equity portfolio for total return and possibly dividend growth. Keep at most 100k in a 3%+ CD.
3) Increase charitable giving to 10% more than in 2014.
4) Increase financial gaming income beyond the 2014 values.
5) Learn basic scuba diving and sailing.
6) Fight my HOAs rules and regulations changes and make them follow the by-laws and legal requirements they seem to have ignored.
Here's to meeting all of our goals for 2015 and beyond (financial and otherwise)!
-
LastDigitOfPi
- Posts: 41
- Joined: Fri Jul 12, 2013 10:29 pm
Re: Last Digit Of Pi
From DEFCON 4 to DEFCON 1: It appears the cold war with the HOA outsiders has turned hot and they feel they can win in a nuclear exchange. This could be the financial theme of the year for me as there is huge downside and limited upside from here. Oh boy!
January Income
Net Salary 3500 (Mid month paycheck slightly below average)
Roommate Rents 1350
Rental Property 600
Interest 625
Financial Games -65 (net credit card annual fee for 50k USAirways Miles)
Side Income 250
***Total: 6260
January Retirement Account Funding
State Defined Contribution 800 (December's missing contributions appear)
457 Plan 500 (December's missing contributions appear)
***Total: 1300 (Not included in income or savings rate)
January Expenses
PITI 775
HOA 195
Electric 90
Water-Sewage-Trash 0 (Prepaid through April or May in November)
Gas 70
Car Insurance 0 (Prepaid 6 months through May 2015 in November)
Internet and Cable 100
Eating Out 80
Groceries 120
Pet food and expenses 40
Job Related 30
Charities 200
***Total: 1700
Savings Rate
Non-retirement savings: 4560 (73%)
Assets
Liquid Non-retirement net worth: 382k (1.0% increase)
Retirement Accounts: 204k (2.0% decrease)
RE Values: 255k - 105k mortgage = 150k (3.3% increase) (but is Zillow on crack?)
Networth Values
NW = NRA + RA + NREV = 736k (not sure how meaningful this number is)
LNW = NRA + 0.6*RA + 0.8*NREV = 624k (adjusted NREV coefficient, see below)
Salary was slightly below average in January due to a once a year adjustment in mid-month pay. But, the missing retirement fund contributions from December showed up in January. Yay!
The commodities segment of my retirement accounts has really been dragging it down. Now that I am thinking of reducing my exposure does that mean commodities are set to go on a tear?
A few weeks ago I realized that I was being a bit too conservative (even for me) in my liquidated net worth formula. The coefficient of 0.6 for net real estate liquidation assumed 10% transactional costs and 30% taxes on the sale price but taxes only apply to the gains. Taking that fact into consideration it seems that less than 10% of the current estimated sale price would be paid in taxes thus I am using a still conservative but more accurate coefficient of 0.8 for NREV in my adjusted formula. So I have essentially realized a part of my first new years resolution to achieve a LNW of 625k, mostly by just using a more realistic formula.
I've made incremental progress on most of my new year's resolutions, but wow, the last one is turning into a doozy!
Resolution Updates:
1) I covered 18% of the distance to the 400k NRA goal line. Also, I am just about at my goal of a LNW of 625k and most of this was simply by adjusting the liquidated value of my RE.
2) The second resolution will not apply until May. Let's hope I can deploy my maturing CD's intelligently.
3) Charitable giving is going well right out of the gate, on a pace to set a record this year.
4) I did not receive any financial rewards from my gaming this month (actually I paid a net fee of 65 for my new Barclay's USAirways card) but I did receive 50k Dividend miles.
5) Will learn basic sailing in March and begin scuba diving lessons in May.
6) Wow! Let's just say that so far my worst nightmares about the 'new' HOA fight are starting to become a reality. It began with me emailing them for information on the procedures by which the new (fascist) rules for our community were instituted. I maintain that this was done in violation of the rules that were in effect through mid to late 2014. In fact there must be a 70% agreement of all owners before new rules are established but it seems they were drafted without notice and 'approved' without a vote of any owners in some secret board room star chamber. Instead of receiving a reply I get a notice from their attorneys that a lien will be placed upon my house for a $25 cost I subtracted from my HOA dues last year for expenses incurred to my mailbox that the USPS said the HOA should normally cover. I wrote the (previous) HOA a letter about subtracting the repair bill I paid and never received a reply and so assumed it was ok. In the intervening 10 months I have not received a single notice of delinquent dues. They also provided notice that new special assessments will be assigned by the board for 'improvements to the community' which in reality almost certainly means improvements to their investment properties. It has become clear that they are trying to buy as many properties as possible in my neighborhood - probably a long term strategy of riding the money train to the top of the mountain as RE values seem to be headed right back to the pre-2008 levels. If they are successful this will be a HUUUUUGE setback to my plans to secure a safe FI status in the next few years. First step: try to save my credit by preventing a ridiculous lien from being placed upon my house.
January Income
Net Salary 3500 (Mid month paycheck slightly below average)
Roommate Rents 1350
Rental Property 600
Interest 625
Financial Games -65 (net credit card annual fee for 50k USAirways Miles)
Side Income 250
***Total: 6260
January Retirement Account Funding
State Defined Contribution 800 (December's missing contributions appear)
457 Plan 500 (December's missing contributions appear)
***Total: 1300 (Not included in income or savings rate)
January Expenses
PITI 775
HOA 195
Electric 90
Water-Sewage-Trash 0 (Prepaid through April or May in November)
Gas 70
Car Insurance 0 (Prepaid 6 months through May 2015 in November)
Internet and Cable 100
Eating Out 80
Groceries 120
Pet food and expenses 40
Job Related 30
Charities 200
***Total: 1700
Savings Rate
Non-retirement savings: 4560 (73%)
Assets
Liquid Non-retirement net worth: 382k (1.0% increase)
Retirement Accounts: 204k (2.0% decrease)
RE Values: 255k - 105k mortgage = 150k (3.3% increase) (but is Zillow on crack?)
Networth Values
NW = NRA + RA + NREV = 736k (not sure how meaningful this number is)
LNW = NRA + 0.6*RA + 0.8*NREV = 624k (adjusted NREV coefficient, see below)
Salary was slightly below average in January due to a once a year adjustment in mid-month pay. But, the missing retirement fund contributions from December showed up in January. Yay!
The commodities segment of my retirement accounts has really been dragging it down. Now that I am thinking of reducing my exposure does that mean commodities are set to go on a tear?
A few weeks ago I realized that I was being a bit too conservative (even for me) in my liquidated net worth formula. The coefficient of 0.6 for net real estate liquidation assumed 10% transactional costs and 30% taxes on the sale price but taxes only apply to the gains. Taking that fact into consideration it seems that less than 10% of the current estimated sale price would be paid in taxes thus I am using a still conservative but more accurate coefficient of 0.8 for NREV in my adjusted formula. So I have essentially realized a part of my first new years resolution to achieve a LNW of 625k, mostly by just using a more realistic formula.
I've made incremental progress on most of my new year's resolutions, but wow, the last one is turning into a doozy!
Resolution Updates:
1) I covered 18% of the distance to the 400k NRA goal line. Also, I am just about at my goal of a LNW of 625k and most of this was simply by adjusting the liquidated value of my RE.
2) The second resolution will not apply until May. Let's hope I can deploy my maturing CD's intelligently.
3) Charitable giving is going well right out of the gate, on a pace to set a record this year.
4) I did not receive any financial rewards from my gaming this month (actually I paid a net fee of 65 for my new Barclay's USAirways card) but I did receive 50k Dividend miles.
5) Will learn basic sailing in March and begin scuba diving lessons in May.
6) Wow! Let's just say that so far my worst nightmares about the 'new' HOA fight are starting to become a reality. It began with me emailing them for information on the procedures by which the new (fascist) rules for our community were instituted. I maintain that this was done in violation of the rules that were in effect through mid to late 2014. In fact there must be a 70% agreement of all owners before new rules are established but it seems they were drafted without notice and 'approved' without a vote of any owners in some secret board room star chamber. Instead of receiving a reply I get a notice from their attorneys that a lien will be placed upon my house for a $25 cost I subtracted from my HOA dues last year for expenses incurred to my mailbox that the USPS said the HOA should normally cover. I wrote the (previous) HOA a letter about subtracting the repair bill I paid and never received a reply and so assumed it was ok. In the intervening 10 months I have not received a single notice of delinquent dues. They also provided notice that new special assessments will be assigned by the board for 'improvements to the community' which in reality almost certainly means improvements to their investment properties. It has become clear that they are trying to buy as many properties as possible in my neighborhood - probably a long term strategy of riding the money train to the top of the mountain as RE values seem to be headed right back to the pre-2008 levels. If they are successful this will be a HUUUUUGE setback to my plans to secure a safe FI status in the next few years. First step: try to save my credit by preventing a ridiculous lien from being placed upon my house.