cmonkey's journal

Where are you and where are you going?
classical_Liberal
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Re: cmonkey's journal

Post by classical_Liberal »

Curious if you want to share the general area of MN you are looking at. The GF and I are considering St Cloud as a home when I quit later this year/beginning of next year. We like it thanks to the great public transit for a small city, all of the collegiate activities for culture. It also has all the benefits of rural, low cost housing, plus spitting distance to the Twin Cities metro.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

It's in southwest Minnesota, a town with about 5K people. PM me if you want to know the name.

There's no public transit, but it's fairly walkable. I've never been to St Cloud but DW likes the city. They have a pretty amazing garden near the university.

George the original one
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Re: cmonkey's journal

Post by George the original one »

Congrats, sounds like the pieces are falling into place! Don't be disappointed if the home purchase/sale doesn't go according to plan because you know something will come along in the end.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

February 2019 Update

Some big announcements/news this month!

Baby

Baby is 5 weeks old!

She had her 1 month follow up for her heart yesterday. It didn't go as well as we had hoped. The hole in her heart has completely healed and they say it likely won't appear again, along with the obstruction it had caused, however, she needs monitoring for something else now. I had mentioned it a while back in one of my updates and totally forgot, but she does have a mild elevation in pressure in the arch of her aorta. They can't see anything with the echocardiogram because they can't get a good image, so they are going to take a wait and see approach and do a CT scan when she is older.

So we are now on monthly scans for the next couple months and bi-monthly until 1 year old. After that every 3 months until she is 3 years old. When she turns 3 (or there about) she'll have the CT scan and if it shows any blockage or bend in the arch, they are recommending surgery to fix it even if she is not showing any issues.

We also talked to them about transferring to Minneapolis for this when we move, so we'll get a second (and third) opinion before anything happens. I'm not convinced she'll need surgery but we'll cross bridge that when we get there.

Ultimately this has been a major blow to the happiness we've been experiencing, but it's not the end of the world. I need to figure out how to make the most of this and have it be a positive contribution to my life.

She is a super healthy and REALLY BIG little girl, in the 85th percentile for weight and height and growing like crazy. She's gained 2.5 pounds in the last 5 weeks and is holding her head up already.

I've never been more exhausted in all my life. ;)

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Minnesota

We are putting in an offer on a house either today or early tomorrow. Our expenses will fall as I outlined previously if we get it. Next month I will likely adjust our expense metric accordingly. Looking forward to this!

Both DW and I feel now more than ever that moving is the right thing to do. With the heart condition baby has we need and want the support of family and friends and are looking forward to living in a small town again. We are super excited to move!

The plan is to move in late May or June once the weather turns nice.

Work

As outlined in my last update, my work situation has changed a lot now that my buddy is gone. I'm now going to be traveling solo 3 times this year and will need to fend for myself at work. He helped me out a lot while he was here and I'm super sad he has left, but he has some important reasons for doing it including being super over worked. In the end, I only have 13 months until I'm out the door anyway. ;)

There also could be some cuts in the coming months as my employer tightens its belt. There is a lot of bloat where I work and I am not too concerned about being let go, but it's good to know I'll be FI later this year and not next (once we move).


Finances

We had a great month financially, topping 280K in FI Funds as of today. SWR of 4.74% and 21.11 years puts us in a very good spot.

If we close on the house in March, our SWR will drop well under under 4% next month. I almost feel like this is cheating my way to FI. :lol: :oops:

Our FAI topped 10,000 this month! It jumped a lot this month (the most ever actually), a combination of dividend hikes and investing in some REITs in my IRA which I maxed this month. I've decided that my post-FI taxable portfolio has a place for REITS as I won't be taxed on the income anyway if I can keep my income under 24K (plus misc stuff) annually. The result will be income that exceeds our needs by a lot.

Expenses/Savings


Total Spend - $817.76
Total Savings - $7,299.54; 90%

Years Saved - 21.11
SWR - 4.73%

TTM Expenses - $13,311.68 (+ $71.54)
Total FAI - $10,137.54 (+ $728.27)

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7Wannabe5
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Re: cmonkey's journal

Post by 7Wannabe5 »

Darling!

prognastat
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Re: cmonkey's journal

Post by prognastat »

Where's her tail?

It's good at least that you are financially secure enough to be able to do these things.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

Alas this was my best trait and she got the mother's side.

We put the offer in last night. :)

prognastat
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Re: cmonkey's journal

Post by prognastat »

Good luck with the offer, hope it gets accepted. :D

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

Thanks!

I've been getting estimates for home insurance and our current provider is quoting slightly less than our current rate. I think I can call and get it even lower though.

But I got a quote through Farmers and they are quoting me less than half my current rate. Not sure how accurate it is but if it is correct, that will drop our expenses by another $450 annually.

Seppia
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Re: cmonkey's journal

Post by Seppia »

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

cmonkey
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.

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