cmonkey's journal

Where are you and where are you going?
cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

Seppia wrote:
Sat Mar 02, 2019 3:25 am
My god that baby is adorable :)
Congrats on the progress and on the move to Minnesota.
It was probably the state with the nicest people in the USA by my recollection
Thanks Seppia. Minnesota does indeed have nice people. :)


We bought a house!


We've spent the past week negotiating an offer on this house and as of today the offer letter has been signed by both parties. Closing is at the end of the month. We talked them down by nearly 6%.

Effective immediately our expenses are going down by a lot. Property taxes are dropping to ~800 annually, down from 2250 previously. Insurance is dropping to ~375 annually, down from 765 annually. Chicken expense is going away (although we might keep a couple of them, hehe). So going forward our plan is using an adjusted TTM Expense metric.


Once we sell our current house, depending on the equity we unlock, we will cross 3% in the range of July-September. If we don't sell it this year, we'll now cross 3% in November.

As a part of this move we are also looking into care options for bmonkey going forward and are looking into the Mayo Clinc system. They have a campus in Mankato, MN and we might be able to go there.

Balance Sheet Update

I've been playing around with investing in brokered CDs through my brokerage for the past 6 months or so and its been going well. There's a variety of CDs available at any one point ranging from 3 months to 10 years with interest payments ranging from monthly to at maturity. The monthly interest payments get put into my brokerage account and I can use them immediately. They can be auto-rolled into another equivalent CD once they mature. Also, ZERO fees.

Rates right now are 2.3% for a 3 month up to 3.2% for a 10 year CD. I've been investing in 3 and 6 month CDs.

The best part is that there are dozens of institutions to invest in, so you spread out the risk.

I've had a 23K CD with a local institution for the past 7 years or so earning 2.3%. I've started feeling uneasy about it because the money is just sitting there earning interest and giving me a tax liability, but doing nothing else. I cannot use the interest with the CD in it's current form.

So once it matures in a couple years, I'm moving it to my brokerage and investing in such a way that I can actually use the capital to live off of.

I'm now including it in my FI Funds/FAI values because it will be moving there in a few years anyway. There is the risk that rates might drop, but I've also been learning to invest in different bonds with my brokerage and these are an adequate alternative.

As of today, given the balance sheet update and reduction in expenses -

Adjusted Expenses* - $10,855
FAI - $10,646.15
FI Funds - 298K
SWR - 3.62%
Years - 27.59


This won't affect my end date at all considering I won't move it for a couple years, but due to other factors, Dec 31, 2019 is looking like my end date for this round of employment. I'll post an explanation and plan later this month I think.

* Adjusted Expenses are defined as Current TTM expenses - Old Property Costs + New Property Costs. I'm not including any other estimated savings we might have such as groceries and gas. Living in a small town I think we'll have some of this too.

classical_Liberal
Posts: 2283
Joined: Sun Mar 20, 2016 6:05 am

Re: cmonkey's journal

Post by classical_Liberal »

Congrats on the house!

Obviously Mayo is one of the best healthcare systems in the world, so BMonkey's heart will be in awesome hands, should the need for intervention arise.

What are you going to do with your work in the mean time? Stay in IL until quitting or are you going totally remote?

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

classical_Liberal wrote:
Sat Mar 09, 2019 12:14 pm
What are you going to do with your work in the mean time? Stay in IL until quitting or are you going totally remote?
Thanks!

I am 100% remote right now, so nothing will change actually. I've already talked to my employer and they are good with the move. :)

classical_Liberal
Posts: 2283
Joined: Sun Mar 20, 2016 6:05 am

Re: cmonkey's journal

Post by classical_Liberal »

Nice! I must have missed that in your journal... A ton of posts over the past four years! I kind-of speed read through all the dialog this morning. I remember reading the chicken and garden stuff before, it was so interesting and fun!

Anyway, if fate leads us to nearby geographic homes this year I'd love to meet up at some point.

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

classical_Liberal wrote:
Sat Mar 09, 2019 12:38 pm
Nice! I must have missed that in your journal... A ton of posts over the past four years! I kind-of speed read through all the dialog this morning. I remember reading the chicken and garden stuff before, it was so interesting and fun!
Yes, I have a lot of posts in this journal, not sure why, well over the 500 to FI rule. I wonder if I could get to 1K journal posts by the time I hit 3%... :D

We can certainly try a meet up!

vexed87
Posts: 1521
Joined: Fri Feb 20, 2015 8:02 am
Location: Yorkshire, UK

Re: cmonkey's journal

Post by vexed87 »

Congrats on the offer going through, and fingers crossed for a smooth transaction/exchange.

Regarding bmonkey, hope you guys are doing ok. It's really crummy to hear about the possible need for intervention. Luckily there hasn't been a better time to need it. We are worried our girl might have hydrocephalus, she awaiting scans to confirm/rule it out so we know exactly how you feel worrying about the what ifs. I think this is just what kids do to us, it seems with even good health, there's always something to worry about! :roll: :evil:

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

vexed87 wrote:
Tue Mar 12, 2019 9:42 am
I think this is just what kids do to us, it seems with even good health, there's always something to worry about! :roll: :evil:
It's true, there is ample opportunity to worry. I really hope your little girl is alright and it turns out good for you guys!

Locke
Posts: 6
Joined: Sat Jan 16, 2016 5:10 pm

Re: cmonkey's journal

Post by Locke »

Hi CMonkey,

Congratulations on your daughter and your progress toward your goals! Children are the greatest treasure. I think we are roughly the same age with similar goals, and I always come back to your journal every few months or so to see the updates (and to make the comparison in FI savings). I think you might already know this, but I'm sharing in case you don't - Vanguard Prime Money Market account yields 2.46% after fees. I have been putting my emergency savings there, and there are monthly interest payments.

Locke

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

Locke wrote:
Wed Mar 13, 2019 8:14 pm
Hi CMonkey,

Congratulations on your daughter and your progress toward your goals! Children are the greatest treasure. I think we are roughly the same age with similar goals, and I always come back to your journal every few months or so to see the updates (and to make the comparison in FI savings).
Thanks Locke! I checked your posts and see you posted back in Aug 2016 on my journal. Appreciate people following along! I always hope I can inspire at least one person with my ramblings. :oops: :? :D I'm always looking for ways to optimize our progress toward where we want to be. Bmonkey's condition has instilled in us a desire to do what we want now as opposed to later. Thus the move to MN among a lot of other stuff.

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

Preparations!

In preparation for pulling the plug in exactly 9.3 months, I moved my 401K balance and future contributions out of VFIAX and put them into VBTLX. Our provider has pretty limited offerings and the next best was VUSXX, but the fee is higher and returns a little lower. Now that the S&P 500 has climbed back into nosebleed territory it seems appropriate to protect my balance.

Looking forward to not being charged $20 per month on this.

Money Buckets

I've also started pooling some money into different buckets in our brokerage. My plan is to use any capital gains and extra income that we get to fund a couple of accounts I call my Fun Fund and my Capex Fund. The Fun Fund will be funded 100% by capital gains that I harvest and will be used for any wants that we have that would fall outside of normal cashflow from our FI Funds balance. The Capex Fund will be funded by capital gains and extra investment income above what we need for normal living expenses. This fund will be used for future capital expenses - namely when we need a new car, roof replacement on the house, college expenses, etc...

I've settled into a pretty comfortable investment method over the last few years and capital gains do play a part. Although they aren't guaranteed, they are pretty certain to show up from time to time.

I harvest them when a few things coalesce -

1. A position appreciates to what I would term a 'significant gain'. This depends entirely on just how I feel about the position.
2. The yield on the position drops significantly below its historical average.
3. This is the most important - I have something else in sights to invest in that would give me more yield than the old position. This way I can invest the cost basis to maintain income at near the same level, while putting the gain somewhere else.

Frugalchicos
Posts: 658
Joined: Wed Apr 19, 2017 9:23 pm
Contact:

Re: cmonkey's journal

Post by Frugalchicos »

Congrats on the baby and your FI achievements!

Interesting journal. :)

llorona
Posts: 444
Joined: Sun Sep 23, 2012 11:44 pm
Location: SF Bay Area

Re: cmonkey's journal

Post by llorona »

Bmonkey is adorable. Congratulations!!

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

@Frugal and @llorona, Thanks!

We officially closed on the house in Minnesota as of today. Utilities are switched over and it's fully insured at half the rate of our Illinois home and taxes are 680 bucks for this year, which is actually too high because the house is classified as a 4-plex currently. It used to be 4 apartments in one house (it's pretty big), so this will change next year. The assessed value of the house will eventually trickle up as well as we paid more for the house than previous owners, but I think it'll stay under 1,000 annually.

In the next couple weeks I'll start interviewing agents for selling our current house. We are actively packing, giving stuff away, selling stuff and throwing stuff away. The plan is to utilize U-Pack to move everything instead of driving 900 miles round trip to haul stuff. The plan is be living up there around Memorial Day weekend.


We also got bmonkey's genetic test back today. She does have some genetic mutations but nothing that fits their models for this particular condition. So it sounds like she doesn't have PCD (she has absolutely no symptoms) which is awesome.

A few weeks ago I got pinged by an old co-worker asking if I'd be interested in coming back for a position they have opening, as they have new management and it seems the old BS might have changed. I ignored it, but today I got pinged by another co-worker. They are thinking of me! I decided to bite just for the hell of it and told them my conditions - 1099 contract only at a slightly higher rate than currently, 100% remote work with 1 travel event per year to the QC (I could just fly down). He informed me it was a salaried position only to which I responded I'm not interest in salaried, only 1099.

He then asked if I'd be interested in full or part time work...not sure where this is going, but with the travel requirements for my current job I may consider an offer.

It's been a good day. :)

SavingWithBabies
Posts: 882
Joined: Mon Aug 31, 2015 2:50 pm
Location: Midwest, USA

Re: cmonkey's journal

Post by SavingWithBabies »

That is great news about bmonkey. And it's great to be wanted. Do you prefer 1099 for technical or ideological reasons?

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

SavingWithBabies wrote:
Fri Mar 29, 2019 7:49 pm
That is great news about bmonkey. And it's great to be wanted. Do you prefer 1099 for technical or ideological reasons?
I prefer 1099 because I'm not dragged down by the baggage of a corporate salaried position (i.e. performance reviews, etc...). Pay is generally higher as well, although you are responsible for all of FICA. But you can still stash away a lot in IRA, HSA, Solo 401K.

I have never worked on 1099 before, so it would be new to me. Taxes might be a pain. I might hire a tax pro as an insurance policy if I go that way.

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

March 2019 Update


March has been a month of pretty big changes for us. We closed on our house in MN as of March 29. This week I'm going to start interviewing agents for selling our current house.

Our annual expense metric is now an adjusted metric based on the assumption of selling our current house and those expenses going away. I also made the decision to move a large 23K CD that we have at another institution into our brokerage account so we can use it as FI Funds. These two changes resulted in a large convergence of our FAI and TTM Expenses. In fact they will possibly cross next month and will definitely cross in June.

I also included a new expense in our metric - one that hasn't been spent yet. Once we move we plan to get a membership to the local community center/gym. This is about $450 annually and so effectively nulls the savings from the house insurance being cheaper, but we will be healthier in the long run.

For March I substituted our new house insurance for the old, as this will be the amount we pay going forward. We also switched car insurance to get some more savings on the home policy.

FI Funds ended the month over 300K for the first time. We are at 310K.

I have 100% of the cash needed to bridge the Roth IRA Ladder gap. The plan is to invest it in a 4 year CD ladder this coming December.

Saying No at Work


I'm not sure why but this is difficult for me. My traditional response has been to seek work elsewhere, thus why I have my current job. I didn't want to do what they wanted me to do (PM work) and so I found another job. This time it's traveling every 10 weeks and originally it wasn't a huge deal because I had someone to travel with. Then I had a couple of freebies because the baby was born. I find travel very stressful even with a friend, and by myself it's much more stressful. I can do it, but it completely wipes me out and ultimately doesn't benefit myself nor my employer.

Instead of running from this I'm going to tell them that I'm not traveling. I think I have a good excuse anyway, given my daughter's heart problem. I am actually not comfortable leaving her and DW alone for a week.

Given our level of FI, I think I've earned the right to start saying no to things I don't want to do right?

Expenses/Savings


Total Spend - $1,156.29
Total Savings - $7,004.47; 86%

Years Saved - 27.13
SWR - 3.69%

TTM Expenses - $11,441.49 (- $1,870.29)
Total FAI - $10,820.58 (+ $728.67)


Image

Image

Image

Image

Image

classical_Liberal
Posts: 2283
Joined: Sun Mar 20, 2016 6:05 am

Re: cmonkey's journal

Post by classical_Liberal »

cmonkey wrote:
Mon Apr 01, 2019 12:03 pm
Given our level of FI, I think I've earned the right to start saying no to things I don't want to do right?
Yes!

Congrats on the house! It'll be nice to wrap all that stuff up. Y
Your 12 mo spend has dropped a ton. Two plus a baby, those are very aspirational numbers.

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

classical_Liberal wrote:
Tue Apr 02, 2019 12:13 am
Congrats on the house! It'll be nice to wrap all that stuff up. Y
Your 12 mo spend has dropped a ton. Two plus a baby, those are very aspirational numbers.
Thanks c_L. It will be great to get the house sold and hopefully unlock some equity to use elsewhere.

I'm expecting we can actually get our expenses down further, there are some other areas of opportunity for expense reduction once we move. Namely - the 'near expired grocery' haul we can make for $20 a month. This is about 2 laundry baskets full of food that comes from stores that are trying to get rid of excess food. It's a great way to reduce waste and the food is usually good. I'd say 5% of it isn't usable/something we don't want.

Also, we can start walking and biking everywhere. The library is 2 blocks from our house! Walmart (with groceries) is 1.5 miles away on small town style roads.

Frugalchicos
Posts: 658
Joined: Wed Apr 19, 2017 9:23 pm
Contact:

Re: cmonkey's journal

Post by Frugalchicos »

Hey Cmonkey, congrats on the house!

I am curious about your investment approach since we have similar NW and goals? I currently have 180K with 90% in stocks and 10% in bonds. And 125K in a savings account that is pretty much US bonds. We also have another 65K or so in a 401K. Just asking since I am curious about how other people with similar goals are doing it.

We also think in using some of that 125K to buy a couple of fixer uppers in Spain and rent them (once we move). Doing so, we could be totally diversified and have some passive income on a monthly basis.

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: cmonkey's journal

Post by cmonkey »

Frugalchicos wrote:
Tue Apr 02, 2019 10:15 am
Hey Cmonkey, congrats on the house!

I am curious about your investment approach since we have similar NW and goals?
Thanks Frugalchicos!

I am 95% stocks, 5% bonds/CDs currently, however, am shifting more toward something like 70% stocks 30% bonds. The bonds portion will be primarily in the GSE/Treasury category so that I can get some state tax breaks to bring my state tax down to zero. So bonds with Federal Home Loan bank and the Federal Farm Credit bank system among a few others.

My stock approach has been dividend focused, with more weight toward the higher yield stuff, but I've been burned a couple times and so have started drifting down in yield seeking. Focusing on companies that have strong cash flow, stable or falling long term debt and favorable long term prospects. I used to buy value-traps with higher yields, but don't do that anymore.

Post Reply