Tyler9000's Journal

Where are you and where are you going?
Tyler9000
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Joined: Fri Jun 01, 2012 11:45 pm

Re: Tyler9000's Journal

Post by Tyler9000 »

No worries! I know exactly where you're coming from. I have the same reaction when financial independence newbies ridicule the income obsession of others while obsessing about spending and investments themselves. Fundamentally money is still the center of their universe.

Admittedly work is still on my mind this week. But it fades a little more every day.

Tyler9000
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Joined: Fri Jun 01, 2012 11:45 pm

Re: Tyler9000's Journal

Post by Tyler9000 »

A Tale of Two Scales

So our bathroom scale stopped working recently, and my wife and I set out to find a replacement. This was just a few weeks ago, in the short time when I was still working but she was not.

Naturally, my first instinct was to fix it myself. After a general mechanical inspection one day after work, I figured that perhaps the battery had died. We found a replacement battery, but that was no use -- something was amiss with the electronics. An online search for the user manual yielded a series of calibration steps that I could try to fix the issue, but those didn't work either.

In the process of searching for a fix, I ran across a series of very negative product reviews online. Apparently the problem is quite common with this model. Many complained that they had to buy a new one within a year, recommended steering clear of this model, and suggested a few more expensive alternatives. The one that stopped working was admittedly pretty inexpensive, so I chalked this up as a small lesson in not doing enough research on the original purchase.

I suggested to my wife that perhaps it was time to get a new scale, and she basically said "Let me handle it". Rather than searching online or browsing a local store, however, she took a different path. She had the time, so she called the manufacturer, sat on hold, sent the appropriate documentation, and got a replacement scale absolutely free under warranty without even needing to produce a receipt.

While I would have run by the store after work one day to trade money for a convenient replacement, she traded just a little bit of time for the same end result. Our scale is now a nice reminder of the hard value of time, and now that I have an abundance of time myself I'm starting to appreciate its value even more.

As an aside, the new scale is also a nice reminder of the health value of not sitting at a desk all day surrounded by snacks. Despite remaining in a relatively leisurely decompression mode last week, I've already lost a few pounds away from the office. If I can find a sustainable exercise routine, I bet I can make real progress. It's nice to have time on my side for that as well.

spoonman
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Re: Tyler9000's Journal

Post by spoonman »

That's awesome! I would have taken your route as well, the warranty is probably the last thing I would have thought about. It's nice being able to overpower an issue like this with your newfound time.

I think if you adopt simple exercise routine (along with a diet you like) you'll see results quickly. It's all about establishing new habits and cutting down on unnecessary crap.

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

The Two Week Threshold

Friday marked two weeks since my last day at the office. Typically speaking, today (the following Monday) is the time when a long vacation ends and work starts back up again. But this time is different. No anxiety, no catching up on hundreds of emails, no fires to fight. I always found it irritating that without fail, all of my most urgent tasks that I felt the need to delegate before vacation started never got done before I returned, and somehow the world kept spinning until I was there to pick them up again. Today, that’s not the slightest concern. It’s just another sunny day.

It’s not the first time I’ve been away from work for more than two weeks – I’ve been laid off twice and quit another job cold-turkey, taking a short time to land another gig after each. However, not having a job search at the top of mind is a very different mindset. Looking back, the idea is sobering. It's amazing to think that I (and most people) haven't truly had more than two unstructured and worry-free weeks to myself in twenty years. This is a remarkable opportunity, and I feel blessed.

When I talk to DW now, she is clearly so much happier and more relaxed than she was just a few weeks ago and it shows on her face. I'm sure it does on mine as well. So far, the feeling of peace is stronger than I anticipated in my more anxious last few weeks and months before diving in, and I see no reason for that to end any time soon.

Looking forward, the future is bright. The realization that there are no more work commitments on the immediate horizon is finally starting to sink in. I had a dream last night where I longed for solving some kind of big problem, but when I stirred awake I smiled, quickly remembering I'll have plenty of chances to do interesting and challenging things because the future is wide open and I'm in the driver’s seat. I slept great and woke up rested and refreshed, and today started to think a little about a few administrative things I need to take care of this week and a few fun things I’d like to start after that.

As for the past two weeks, I think for the most part this sums it up quite nicely. ;)

http://youtu.be/_qhuIjEUMrg

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

Adrenaline Fatigue

The Las Vegas strip is a vibrant, exciting place. Even for a non-gambler the shows, lights, fantastic food, attractive people, and overall 24-hour energy is difficult to describe to someone who has never experienced it. I've been there many times for the annual Consumer Electronics Show, and have been lucky enough to enjoy connections that have shown me the best the Vegas has to offer – amazing meals, extravagant parties, and private clubs filled with celebrities atop hotels overlooking the strip.

The thing about Vegas is that the excitement has an extremely short lifespan. After about three days you simply feel hung over and exhausted, and can never seem to escape the feeling that your very essence reeks of smoke. The same ding ding ding of the slot machines at the airport that were such a thrill as you stepped off the plane are now knells of mental anguish. You vow never to return, but a few months later the thought creeps in - hey, let's go to Vegas!

Some days while still employed I wondered if work was the same way. I think I was onto something. The reward of an enjoyable career is a powerful opiate, but over time it wears you down in the same way that Vegas, with all its luxuries, gradually depletes your soul. Today, more than a month after leaving my job, I’m finally starting to really appreciate how rejuvenating the silence and fresh air really is. While I was still hung up on closure in week one after leaving, now I don’t think of work at all save for the ongoing joke with the DW about setting the alarm. I may eventually want to visit my old career again, but today is not that day.

I think one career lesson to learn from Vegas is that, when the interest calls, at some point you've been there, done that. Sure, it's where a lot of the action is, and you'll hear stories of friends striking it rich or living large on the casino dime. But dammit, you know it will wear you out quickly and there are other places in the world worth exploring! I don't want to be that guy who keeps going back to be bled dry by the same place just because they call and make you feel special.

I can go any direction I want, but as fun as it was at times the one directly behind me is by far the least attractive right now. Let’s see what else is out there beyond the horizon. Whatever the future holds, I’m looking forward to new adventures and uncharted territories.

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

Healthcare

Since healthcare is a common question mark for prospective early retirees, I thought I'd give a quick update on my own ACA adventure.

Short story -- signing up on Healthcare.gov and selecting a plan was painless with no issues. The site worked well, we got a plan with the same insurance company and doctors we had previously and were happy with, and we have yet to see any need to pick up the phone. We are optimizing our investment income in 2015 to maximize subsidies, and the premium/deductibles we qualified for after submitting our info are actually even cheaper than I expected. It took a few days for our initial premium payment (via the exchange) to show up on our account at the insurance provider, but it's there now and all indications are that we're good to go.

The one trick to the initial ACA application for an early retiree is that your projected salary is nowhere near the income they have on file from your last tax return. We have 90 days to submit evidence of our projected income to keep our subsidies. Letters from our employers saying we no longer work there are simple enough, but quantifying the projected investment income takes a little planning. To make it as simple as possible, we sold just enough stock to have the right dividends + capital gains this year to match our projected income next year with no jobs -- a process that we will use every year, so this is good practice. I still have to submit the info to the exchange, but doing it this way seems a lot more straightforward than the typical guesstimates I imagine they receive for future income. I recommend that anyone looking to retire start thinking about this a year early.

Of course, there's a distinct possibility that the ACA will change significantly next year and that the subsidies may go away. The current system definitely benefits us, but we're hedged for other outcomes as well. We can afford our full premium at a 3% withdrawal rate. The subsidies are really icing on the cake, pushing our WR sub-2.5%. If the subsidies do remain on the table, I'm inclined to start thinking about a charity portfolio with the difference.

Thinking back, it's interesting to remember how big of a worry health insurance was for me pre-ERE. You always think of the horror stories, and they inevitably scare you into a sense of complacency. I'll provide an update if anything changes, but today those fears feel more like excuses. The same can be said for many fears -- how will I spend my time, what will people say, etc. When finally faced, each one was significantly more tame than I imagined. I guess one good lesson here is not to let your anxiety be your own worst enemy.

spoonman
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Re: Tyler9000's Journal

Post by spoonman »

Thanks for sharing your experience, I've been going through something similar. My experience was less smooth than yours, but things are finally stabilized.

Are you planning on submitting brokerage statements for December as your proof of income? That's what I was thinking of doing. They don't really tell you what sort of documents they prefer. Additionally, the specific exchange that we signed up with does not recognize capital gains as income...don't ask me why.
Tyler9000 wrote:Healthcare
Thinking back, it's interesting to remember how big of a worry health insurance was for me pre-ERE. You always think of the horror stories, and they inevitably scare you into a sense of complacency. I'll provide an update if anything changes, but today those fears feel more like excuses. The same can be said for many fears -- how will I spend my time, what will people say, etc. When finally faced, each one was significantly more tame than I imagined. I guess one good lesson here is not to let your anxiety be your own worst enemy.
I couldn't agree more. That's the sort of thing that afflicts people with perpetual "one more year syndrome".

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

On the bright side, if capital gains don't count as income surely they won't mind if you don't pay taxes on them. ;) I'm sure it will all wash out come tax time.

Absent specific documentation requirements, my plan right now is to submit the minimum amount of information necessary to communicate our projected income. I want to make it as simple and painless as possible for the guy reviewing the file to click "approved" and move on to the next one, and a full financial statement is probably overkill and runs the risk of causing confusion (especially with assets far above the typical subsidy applicant). I have four pages in mind:

1) A cover letter explaining the reasoning for our projected income in one paragraph (basically, neither of us are working any more and we anticipate our investment income in 2015 to be very similar to 2014).
2) A letter from my employer with my exit date
3) A letter from DW's employer with her exit date
4) A screenshot from my Fidelity account that shows our YTD dividends and capital gains (but omits account balances, specific transactions, etc). These match our projected income for next year by +/- $1k.

I'm betting they'll be satisfied that I'm able to concisely state my case based on past precedent, but if they request more specific info after reviewing the first pass, that's fine. The worst case scenario is that they arbitrarily refuse to pre-pay our subsidies and will owe us a fat rebate when we file our 2015 taxes and show our initial projections to be correct. It's not exactly an end-of-the-world situation.

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

Focus Groups and Snow Angels

About a year ago, I powered through five hours of evening focus groups as part of my product design job. I sat behind a one way mirror along with about a dozen other people, watching a room full of eight random people completely dismantle millions of dollars of work.

One exec turned to me and showed me a text he just received from his wife. It was a picture of his daughter with a huge smile on her face. "It's pasta night. That's why she's so happy." I commented that it's too bad he wasn't there to enjoy it with her. He shrugged and went back to taking notes.

Later, two women from marketing spent an hour gawking at baby pictures on the laptop. A few engineers were put off by this, as it distracted from the very important task at hand of uncovering the product features most likely to maximize company revenue. They watched the users intently and cringed when the designs they had spent months on were immediately rejected because the original product requirements were shown to be grossly misguided. One stepped aside to call his wife before getting in line for the food.

The scene of people admiring real life through LCDs while evaluating their own self-worth based on passing comments of unknown people behind a pane of glass was eventually too much and I left the room. The chill outside was invigorating, and I considered for a moment what it would feel like to dive face first into the snow.

Less than a year later, I basically did just that. And jumping into life face first has been much less of a shock to the system than I predicted while dreaming of it in my own office down time.

When I told my coworkers I was leaving for an extended sabbatical, I generally deflected all of the questions about “what will you do” by simply saying that we planned to take the holidays off to relax and maybe start thinking about bigger things in the new year. Well the New Year has come, and frankly the DW and I have come to really enjoy just being “off”. No schedules, no life-changing goals, no pressure for the next-big-activity or contemplating the next big move. We’ve learned to appreciate just being present and happy in the moment. The only restlessness I feel is for the rain to pass so I can take my daily walk and enjoy the quiet outdoors. Life is good, and I can feel my former goal-oriented self finally easing up a bit.

Rather than jumping into a snow bank for the shock, I’ve found that stepping away from career has been more like making snow angels while admiring the clouds. It’s a life experience no smartphone or computer screen can truly capture ahead of time, and I’m just thankful I finally turned off the vicarious living devices, opened the door from the previous room that contained me, and walked outside.

spoonman
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Re: Tyler9000's Journal

Post by spoonman »

Your writing is a pleasure to read, it flows so well!

One of my superiors at work is a Kings fan, and after they won the Stanley cup last year they did a parade through his town. He was lamenting the fact that he was at work and couldn't attend the parade, I was like "what the hell are you doing here? screw work, just go to the parade!" But he didn't do it, even though it was a slow day.

Has the government given you any static about the documents you provided as proof of your estimated income for 2015? Did they object about reporting capital gains? I'll be doing the same thing soon, so I'm interested in hearing about how things turned out for you.

llorona
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Re: Tyler9000's Journal

Post by llorona »

Your last post was especially beautiful to read. Thank you.

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

Thanks, spoonman and llorona. I've found that one of the most enjoyable parts of the journal for me is recounting certain events of the past to document my journey to where I am today. I figure I should write them down while the memory is fresh. I don't really have a passion to regularly write, but when I do I put a lot of work into it. Thanks for reading along. :)

Regarding the income verification:

After submitting the first set of forms, they sent me what appeared to be an automated letter the very next day simply requesting more information. It didn't appear to me that anyone had reviewed anything, and a call to the exchange to ask what specifically they wanted to see was unhelpful as it was clear the person answering the phone had no access to that info.

I hypothesized that I played too far out of the desired automated system in one key way -- I had consolidated all of my forms into a single PDF and uploaded them under the "other" category along with a letter rather than categorizing them independently. This time I uploaded them separately in the website-appointed categories, and I also used the more detailed monthly investment account statement as I did see that one letter said all forms must have your name printed on them (my previous screenshot wouldn't pass that test).

That was late last week. I've received no immediate email notification like last time, but then again I think the website messaging system is broken. So I'll wait to see if any updates come in the mail, and call them in a week or two if i don't see anything. The delays are irritating but really shouldn't be surprising. I'd recommend not waiting until the last minute to start the process if you can help it.

spoonman
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Re: Tyler9000's Journal

Post by spoonman »

Tyler9000 wrote: ...as I did see that one letter said all forms must have your name printed on them (my previous screenshot wouldn't pass that test).
Thanks for the response, I'll keep that detail in mind when I send our documents.

cmonkey
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Re: Tyler9000's Journal

Post by cmonkey »

I spent the past hour or so reading through your journal and I must say it is a real pleasure and inspiration to read! You could consider a career in writing and would certainly make a little money. Congratulations and will be following your journey!

What exactly is the proof of income for?

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

Thanks cmonkey. I'm not even sure where to start making money with writing. I don't feel like I have enough to say to sustain a blog of my own for very long (I use all of my good material here ;) ), but perhaps one day I'll feel inspired to write a book of some sort. I'm always looking for a new creative outlet.

The proof of income is for healthcare signup purposes, as subsidies and cost sharing are distributed on a sliding scale based on income. However, since health insurance is forward-looking (you sign up and pay now to receive benefits in the future) and income is backward-looking (you total up how much you made last year at tax time), there's a timing issue for the law. They don't want ineligible people claiming maximum benefits up-front on the honor system when it's actually pretty hard for the government to get the money back later based on how the law is written.

When you sign up for the ACA, are eligible for subsidies, and elect to receive them as you go instead of waiting for a big tax refund 16 months later, the government double-checks your projected future income to make sure you're estimating what you're eligible for properly. They first look at your last tax return to see if the income you're projecting is equal or greater than what you made the year before. If it is, you're good to go. If it is not (let's say you retire and project only investment income, or you freelance and expect a client to go away) they require some kind of documentation justifying the discrepancy.

m741
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Re: Tyler9000's Journal

Post by m741 »

@Tyler - sorry to say, I hadn't been reading your journal recently. So, just wanted to offer a belated congratulations. It's great to be able to read about the experiences of at least three people who hit the ERE mark (akratic, Spoonman, and yourself) to get a feel for what things will be like in the near future. Cheers! :)

cmonkey
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Re: Tyler9000's Journal

Post by cmonkey »

Sounds like it can be a pain. I am several years away from ERE but am planning most of my income to come through Lending Club, but will probably get into dividend growth investing as well. Income from LC is taxed by OID (1099-OID) which is similar to interest on savings I believe. Definitely going to trial run for a year or so just to make sure it all pans out on the healthcare front.

So for the subsidies/tax credit, they don't care what source your income is from just so long as its at a certain level?

Tyler9000
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Re: Tyler9000's Journal

Post by Tyler9000 »

Thanks m741. For the record, your journal is definitely one of my inspirations!
cmonkey wrote:So for the subsidies/tax credit, they don't care what source your income is from just so long as its at a certain level?
They use MAGI for the income calculations. You can look up the rules for your own situation, but things like dividends, capital gains, and Roth IRA conversions all count.

BTW, I saw a doctor this week on the new insurance with no issues. He's within walking distance of my house, which is also nice. I also received a letter from the federal exchange today stating that they accepted my submitted income information, my subsidies will continue with no changes, and no further action is required. I'm glad I thought ahead to get my 2014 investment income at the advantageous level before filling out the application for 2015, as after going through the verification process I'm not sure I could have argued (with no solid evidence) for a large change there in the future. But things worked out quite well. One more item to check off the ERE checklist!

spoonman
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Re: Tyler9000's Journal

Post by spoonman »

I'm happy to hear the government has approved your documents. So far your experience has been far less hectic than ours! But I believe after all the dust clears things will be much easier for us going forward.

cmonkey
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Re: Tyler9000's Journal

Post by cmonkey »

Glad it worked out for you! Looking forward to hearing more about your journey.

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