Giskard's Journal - slingin code to reach FI

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giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Giskard's Journal - slingin code to reach FI

Post by giskard »

I started a journal here about 2 years ago under another username but due to my net worth having grown significantly and the risk of that username being associated me IRL, I decided to create a new account and a new journal! It probably goes without saying that it would not be advantageous for family, friends, or business contacts to become informed in detail of my financial situation.

Current stats:
  • Years pursuing FI to date: 3
  • Current Net worth: 177k
  • Current Debt: 0k
  • Current Salary: 100k
  • Starting salary after college: 33k
  • Side income (average): between 5 and 10k annually
  • Years left until FI: 3-4 years?
Current monthly expected spending:
  • ~$500 on rent + utilities
  • ~$300 on food
  • ~$200 on misc (entertainment, books, hobbies)
  • ~$40 on gas
  • ~$60 on car insurance
  • ~$50 avg car maintenance and upkeep
  • ~$25 on cell service
  • ~$25 on clothing
Total average monthly base spending: $1200
Average monthly income after taxes and deductions: $5400
Potential to save each month: $4200

Current nebulous goals:
  • Curtail my involvement in freelance development work.
  • Publish one e-book this year (non-fiction, software related).
  • Teach one class as an adjunct at the local college.
  • Start to re-orient my side-business to training and teaching
  • Read about two books per week (so far I am reading more like 1.2 per week)
  • Become a better writer (both non-fiction and fiction)
  • Spend more time exercising
My reasons for pursuing FI are numerous, but ultimately I want to have the comfort of being able to advance my business, academic, and creative pursuits without having to focus on the monetary aspect because especially in the later of the two monetary compensation is not typically commensurate in respect to time invested. I think that the highest and best use of my own time (if you believe that scientific progress is good, which I do) is writing and teaching and ultimately writing one more piece of software does not add much benefit. I think even being an adjunct teacher in just about any subject at any school will do more net good for the world than my job does.

Anyway, this is a long road! I'm going to try to update this at the end of every month with my struggles to keep on track.
Last edited by giskard on Sun Dec 17, 2017 11:48 am, edited 2 times in total.

George the original one
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Location: Wettest corner of Orygun

Re: Giskard's Journal

Post by George the original one »

Good to have you back, looking forward to updates.

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

George the original one wrote:Good to have you back, looking forward to updates.
Thanks, I'm going to try to put some nice graphs and numbers up.

Net Worth

I started tracking my finances in on 8/26/2013. Coming up on three years. I think I found ERE a few months after that and got more serious, but anyway, here is a nice graph showing the trend:

Image

Okay, now check that out in terms of SWR:

Image

All told, my net worth is just about 180k (not quite actually) although I have less than 100k in post-tax assets (most is in 401ks and IRAs), so it still doesn't feel like too much. At this point, my spending has started to increase, but I also make a six-figure salary now (software engineer) so I expect progress to increase even though I will now be living alone and commuting to work a bit. Up until recently I was riding my bike to work and living with roommates, but I enjoy quiet and clean surroundings just a little too much to continue to tolerate roommates on an indefinite timescale.

I also have about half of my portfolio in common stocks, with the rest in vanguard funds. I like to invest in stocks that I feel are economically stable or alternatively, offer some sort of merger-related upside that is currently locked away (I enjoy betting on merger-arb speculation). So I want to show my current taxable portfolio as well. Things are skewing a little bit toward healthcare and finance in my portfolio.

Image

Also here is my IRA Portfolio:
Image


Please feel free to criticise, recommend, or whatever else. I am interested in thoughts on the portfolio. For what it is worth, I don't intend to continue to invest in common stocks, I will probably move more towards vanguard funds and have maybe only 30% allocated to common stocks. Though, I don't intend to really ever sell any of these any time soon.

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

3 year anniversary of pursuing FI

So, I've been doing this for three years now, and a lot of good things have come out of this. My net worth has increased from about 30k to 200k. My annual salary has increased from about 50k to 100k. I took up road biking as a hobby and generally eat much healthier than I used to. I no longer drink alcohol, which has helped me to have more time to read and spend less money going out. I actually feel pretty much at peace these days, I meditate daily, I don't really want for anything, and my life is generally pretty easy and laid back. I can't remember my life ever being so simple except for when I was living back at home.

Unfortunately, I feel that there have been some downsides as well. I am now 27 years old and I have done little since college except to work and save, at the cost of vacations and other things I see my school friends doing. I feel like my social circles are much smaller than they were in college and high school, but perhaps this is just a normal part of getting older.

Moreover, I still live in the city I grew up in and want to leave very much, but the combination of low cost of living and high pay + friends and family are keeping me here. I haven't really done much dating, primarily because the risk of getting trapped here, secondarily due the expense. I want to change this, but I'm afraid I might end up tied down here more permanently. As stupid as at it may seem, I am pretty wary about accidentally having a kid, and I had a close call a couple of years ago.

250k is the new goal

Barring a market meltdown or some personal crisis, I should hit 250k next year about this time. My lease will be up and I will be ready to hit the road. The question is, will I? I recently had this opportunity, and once again, I decided to stay and continue to work and save. Well, I think 250k is the number. I'll take a Tim Ferris style mini-vacation and do some freelance work to cover to expenses. I may come back to a job after a year or so, but not where I am living now.

For the record, I am publicly calling my future-self out on this: when I hit 250k, and my lease is up in may 2017 I am going to hit the road. It is the right way forward when it comes to future regret minimization (an idea I stole from a Jeff Bezos biography).

Continuing to be a programmer ?

I have been programming professionally for almost five years now. I'm starting to get pretty tired of doing implementation work. Programming can actually be fairly boring depending on what you are doing and how good you are at it. I like the design aspects, I like whiteboarding out architecture and thinking about the high-level art of writing performant and efficient systems, but actually writing the code is usually trivial for the systems I have been working on lately.

To give you an example, I'm working on a system that will process millions of transactions each day and the only interesting aspect is the scale. The system has to be big, fast and fault tolerant, but other than that it is not doing anything complex or interesting. I have had even more fun doing freelance work recently, but even then the most fun part was researching how I would solve the problems my client had, not actually solving them.

I think some time off will let me experiment and reflect. I need some more intellectually stimulating work to do, and I'm not sure if this would entail business or academia. I'm a little concerned that the only interesting or challenging parts of business will be in getting things going, and I'm equally concerned that academia would be unfulfilling and a waste of time.

The opportunity cost of picking the wrong advisor or field of study would be immense (for a PhD), the opportunity cost of starting a failing business that burns through all of my savings would perhaps be even higher.

So, of course I am afraid of failing. Right now I feel like I’m sailing on calm water, picking up speed and there are no obvious obstacles on the horizon to true FI. I know if I change course it may be hard to navigate back to where I was, but I also feel like if I continue on this placid journey the interesting parts of my life will continue to wither and dessicate.


Numbers

Net worth: 201k
Average monthly expenses: $1200
Average monthly net income: $6000


Monthly expenses estimated:
Rent + Utilities: $660
Food: $200
Car + renters Insurance: $70
Going out to eat: ~$100
Misc / hobby spending: ~$200

I’m pretty OK with these numbers so long as they don’t get inflated from where they are at right now. I’ll have some car repairs coming up soon but they should be offset by credit card miles bonuses.
Last edited by giskard on Sun Aug 07, 2016 8:12 pm, edited 1 time in total.

TopHatFox
Posts: 2094
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Location: FL; 25

Re: Giskard's Journal

Post by TopHatFox »

giskard wrote:3 year anniversary of pursuing FIUnfortunately, I feel that there have been some downsides as well. I am now 27 years old and I have done little since college except to work and save, at the cost of vacations and other things I see my school friends doing.
Have you seen the "average networth" post on this site? I highly recommend it. The average people our age (younger millennials) are absolutely fucked financially: high COL, high student loans, low major or college ROI, poor employment prospects, poor promotion prospects, oblivious of ideas like investing or saving, cc debt, etc.

Your position is incredibly strong right now. Travelling--even long-term adventure travel--is so much nicer with a few hundred thousand deploying thousands to spend each year. Jacob's old post on sacrifice during out 20's is useful. Certainly don't be absolutely miserable in saving and investing these next few years, but dude, you're 27 and have around 200k already combined with a 6 figure salary. By 30 you can have more than 500k and be home free to do as you wish for the foreseeable future -- who gives a shit about a two week vacation. ;)

That said, a mini-retirement/road trip might be excellent to get fresh perspective on what you're wanting and how you'd like to save, not to mention what the average 27 year old is doing atm (paying their student loans). Have you considered asking for 6 months to a year-off from work?

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

Olaz wrote: Have you seen the "average networth" post on this site? I highly recommend it. The average people our age (younger millennials) are absolutely fucked financially: high COL, high student loans, low major or college ROI, poor employment prospects, poor promotion prospects, oblivious of ideas like investing or saving, cc debt, etc.
Thanks Olaz for that much-needed perspective.
Olaz wrote: That said, a mini-retirement/road trip might be excellent to get fresh perspective on what you're wanting and how you'd like to save, not to mention what the average 27 year old is doing atm (paying their student loans). Have you considered asking for 6 months to a year-off from work?
Honestly yes, I think this is what my mini-retirement will end up being. 6 months off or so and then come back, because otherwise I really do like and respect my employer and the job is not bad. And ultimately, yeah closer to 500k is my real number for FI.

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

December 10, 2016 update.

The last two months have been a whirlwind: the election is finally over, the stock market is getting bubbly, interest rates are going up, work is getting interesting, and my net worth is starting to feel large. My original goal for an FI stash was predicated on $1000 / month of expenses, which means I would need 300k to get there at 4% SWR. Well, my net worth hit 239k yesterday. So that means I'm almost done, right?

Well, maybe. In the past year or so my spending has increased to anywhere between $1200 and $1500 / month. So let's just err on the safe side and assume that I need $1400 a month in expenses to support myself. Okay, great. So what is my new net worth goal? Well for $1400 it is 420k. I think I can do that, especially because the job market is so hot and I seem to be making more and more money. I'm more than halfway there as it is, so I'm OK with this (56% of the way).

The proposed timeline (2.5 more years):

Age 28 - 270k (+30k from now to july).
Age 29 - 335k (+65k).
Age 30 - 400k (+65k). (probably will just call it here, I can bring in the excess with some part time teaching or something).

Things that will help with this:

I'm probably making close to 110k a year now with everything factored in (dividends, side jobs, other benefits). I'm trying to switch jobs early next year and my stretch goal is to get a raise to 140k in a state that does not have income taxes. If that happens I can truly pull in lots new income.

Possible setbacks

Obviously, anything could happen. I could need a new car, I could have health issues, the market could plummet (I feel like this is likely after the massive rally we just had). I could also quit a bit early and work on some software business ideas, since that is what I plan to do after FI anyway.


Stock market performance

I think you guys know I don't just buy VT or SPY and call it a day (just scroll up, I posted part of my portfolio). I do some research and try to invest in some undervalued sectors. Well, that really paid off over the past couple of months. I had a lot of financial sector stocks I picked up at what I thought were low valuations that up are up 40%, 50%, and in one case 70% (a sleepy regional bank), over the past year or less. In January of 2016, my net worth was 151k, and now it is 88k higher. I don't expect to be able to do that again anytime soon! Although, I hope my ideas about the healthcare sector will pan out.

Realistically though, a lot of my money was still in ETFs. So when the whole market goes up up 10% and you have 200k in the market, that means you now have 220k in the market and you just increased your net worth by 20k. The compounding effect here is amazing to see in action. It is easy enough to understand theoretically, but to see it actually happen is amazing. If I hadn't gotten so into ERE about 3 years ago, I may have missed out on this.

So now I'm trying to figure out what to do with my money in the stock market, almost everything except for some oil companies and out-of-favor drug companies seems over-valued. I suppose the rest of the world looks a bit cheaper, but then again it has for the last couple of years...

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

Jan 29, 2017


Net worth up to 243k now. I still kind-of don't believe these numbers but they make me feel, in a word, secure.

Once I got to over 200k about 6 months ago, I felt this great pressure relieve itself from some undefined space in my psyche. I no longer cared that much, and it felt amazing. I had been carrying around vague and unrelenting sense of urgency around accumulating money, and for some reason it was the second 100k that put it to rest.

Maybe it is because the end is in sight, and I could perhaps take a break now. If I wanted to, I could chuck it all for a year, work on some nebulous business idea and when that is over, simply come back and pick up where I left off with only a minor setback to the trajectory.

I want to (very badly in fact) take a couple of software projects to venture capital groups for seed money and do the startup thing, and with this much accumulated in my own personal assets, It makes me feel like I will be negotiating from a position of security rather than weakness. I at least won't have to worry about feeding myself and paying the rent using the money of my investors.

I guess I'm feeling that finally, I am starting to see the last four/five years of sacrifices have been pretty worth it. And now I'm like a lean and mean machine and I don't give a shit about all of the creature comforts a lot of my peers do. Even that is an edge. Anyway, I'm just trying to allude to the old Julius Ceasar quote about thin and hungry men being the most dangerous.


Image

giskard
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Update 2/19/2017 - 256k

Post by giskard »

Update 2/19/2017

Just noticed I hit 256k NW when I checked on Friday. I just wanted to post, because having 2^8 dollars, (an exact power of 2) is oddly fulfilling. I have 25% of my taxable accounts in cash now, the market has just run up ridiculously high. Also planning on taking a break when my lease is up so having cash is important.

I know I promised myself to stop working and do a big road-trip for a bit when I hit 250k... and I'm going to do that... but I still have this pesky lease until May. I'm also teaching a class at the community college so I can't exactly split until I finish out the semester. Either way though this is a big milestone and I feel like I am due a reprieve, a break, or at least a very long vacation.

I'm enjoying everyone's journals! I started this in 2013 (under a different name) and reading your journals has helped me keep going.

Image

Jason

Re: Giskard's Journal

Post by Jason »

Great job.

Forget about your friends, they're most likely idiots doing idiot types of things. You're the one to be emulated. You will be in a position to do whatever you want in a short amount of time. They won't be.

And you are absolutely correct about accidentally knocking up some chick. I would say not to have kids but I hate kids and I understand some people like kids or at least to pretend to like them. So apply the same forensics as to what you do with your moneymaker as you do with your money;

EdithKeeler
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Re: Giskard's Journal

Post by EdithKeeler »

Great job. I wish I had been in your position at your age.

TopHatFox
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Location: FL; 25

Re: Giskard's Journal

Post by TopHatFox »

What's that - you have almost 300K while many (most) of your peers are just starting to pay off their loans? Yeah man, what you're doing is extraordinary to say the least. You'll have tons of more permanent freedom very soon, with the choice to increase the buffer or defer it without pressure.

I'm relating a lot to your current social and work challenges since you're only a few years older than me; you're in many ways a near-future self. I'm looking forward to following along in your successful footsteps in 2 months time!

Dragline
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Re: Giskard's Journal

Post by Dragline »

Nice graphs and nice progress.

On the portfolio, I just wonder if you own too many things. After a while, such a portfolio will either just emulate the market or whatever sectors it is overweight in, which might be covered more efficiently by investing in sector funds/etfs (e.g., XLF for financials, XLE for energy etc.). Having a lot of small positions also can result in higher transaction costs, depending on how it is managed. You might want to run some comparisons as to how each group of stocks in particular sectors performed in relation to the corresponding sector fund and see what the differences have been.

OTOH, what you are doing seems to be working just fine and if it ain't broke, you probably don't need to fix it. You will need to be prepared to "ride out" stock market downturns, but you are young and have low expenses, so its probably not much of an issue so long as you don't try to jump horses midstream.

giskard
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Re: Giskard's Journal

Post by giskard »

@Jason I'm glad you agree and I'm not just being paranoid about accidentally having a kid!

@Olaz well they say that comparison is the death of joy... but yeah you are right I know I'm doing OK and gotta keep going. And don't worry man, just stick to your plan and you will also be successful.

@Dragline yeah, I know you are right. I actually have not posted my portfolio in a while, and I own more stocks now! So a lot of the stocks I only buy in decent size chunks, and for the past year I have used Robinhood exclusively to buy individual stocks so I am being cognizant of transaction fees. The thing that I really like about common stocks is that is I can sell them selectively for tax loss harvesting, and I have many defensive stocks that I will be able sell in a downturn at a very small loss which I can move into riskier things that fell much further. If I just had a bunch indexes I couldn't do maneuvers like that.

giskard
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Re: Giskard's Journal

Post by giskard »

Reflecting on a trip to Los Angeles

I recently took a trip to LA to visit some friends. What I was really interested in though was to get a good a feel for southern California and what the economy was like there. And I mean that in terms of housing, jobs, transportation, the works really.

I live in the midwest and in my state both the people and the government seem to be fairly socially and fiscally conservative (I could do without the socially conservative part though). Taxes are a bit higher here than I would like but there doesn't seem to be a lot of profligate spending in any overt and obviously visible places. Many people drive older cars. I think most of my co-workers make six-figures and some drive nice cars, but many others drive old Toyotas (myself included). I'm fairly certain none of them are leasing cars though. Most of my co-workers are not renting, and if they have nice houses (which is about 200k-300k around here) it is easily manageable I'm sure on tech salaries.

In LA, it is normal to Lease. I met a person working at a restaurant driving a nice leased Mercedes. I have been told this sort of thing is normal and expected in LA though. Almost everyone rents. If you are not renting you inherited your house or you are very wealthy because even a small single story 2 bedroom house in a decent neighborhood that is falling apart can be close to a million dollars. If you live in the suburbs you may actually commute hours to work.

Observing all of this, Southern California just feels so unnatural and unsustainable. Also, in my tax bracket, the income tax is 9.3% while sales tax is 7.5% at a minimum. I was thinking about moving there, but honestly, it will take me in the opposite direction of FI unless I can find some job that pays much much more (to cover the tax + increased housing costs). A Bankrate calculator says I need to make 54% more in California and that sounds about right.

lightfruit55
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Re: Update 2/19/2017 - 256k

Post by lightfruit55 »

giskard wrote:Update 2/19/2017

Just noticed I hit 256k NW when I checked on Friday. I just wanted to post, because having 2^8 dollars, (an exact power of 2) is oddly fulfilling. I have 25% of my taxable accounts in cash now, the market has just run up ridiculously high. Also planning on taking a break when my lease is up so having cash is important.

I know I promised myself to stop working and do a big road-trip for a bit when I hit 250k... and I'm going to do that... but I still have this pesky lease until May. I'm also teaching a class at the community college so I can't exactly split until I finish out the semester. Either way though this is a big milestone and I feel like I am due a reprieve, a break, or at least a very long vacation.

I'm enjoying everyone's journals! I started this in 2013 (under a different name) and reading your journals has helped me keep going.

Image
Hi Giskard, been following your journey with great interest. As far as I can tell, we are around the same age, NW, and have pursued FI for around the same number of years. Like you, I feel that "I have done little since college except to work and save". I also have plans to stop work and take a sabbatical when I hit a certain NW.

Rooting for you and very interested to know when you will pull the plug for the big road trip / sabbatical you have planned!!

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

@lightfruit55 nice, it sounds like we are in pretty much the same place. We just have to keep going! I have been following C40 with increasing interest lately, and I'm thinking of doing something along those lines with a conversion van if I can figure out a way to work on the road to keep some freelance stuff going. What are you thinking of doing for yours? A little world traveling maybe? I'll keep an eye on your journal.

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

April 2017 Summary

This last month I spent a lot of time wrapping things up and getting ready for some changes. I started the process of interviewing out of state at a couple of different companies, I wrapped up teaching my one class for the semester, and I gave my landlord notice at the end of the month that July I would move out. Yeah, I decided to back myself into a wall: I have two months to find a new job out of state or else I will be homeless!

I opted for the whole "burn the ships behind you" kind of thing here! Ideally, I will find some work out of state and they will pay relocation. If they don't that is OK, I don't have many valuable physical possessions that will not fit in my car. Speaking of which I really better get a new (well, used) car if I am going to do this! My little 2-door Toyota will not fit much and it is getting a bit geriatric for a road trip! Worst case scenario I load up my car and travel around a bit until I find a job I want somewhere I like.

New Net Worth: 275k

Image

A couple of years ago 275k was my low FI number. It feels really cool to actually hit that number, but I know the real number now is something more like 500k in the United States, in the places I would prefer to live.

Speaking of which I'm looking at the following cities, preferably a state with no or low income tax (e.g. WA, or TX) so I can get to FI a bit faster during the next 2 or 3 years:
  • Denver
  • Seattle
  • Atlanta
  • Chicago
  • Minneapolis
  • Austin
I'm also thinking that it would be very fun to go back to school for an MS or a PhD at a computer science department and study machine learning. I'm not totally certain I would go back to work after doing that, I might just teach instead. But I think I like the academic world I little bit too much to cease involvement with it. I suppose that is good because being FI will let me have amazing flexibility.

Jason

Re: Giskard's Journal

Post by Jason »

From the cities you mentioned, Austin jumps out. I have a broke-ass Pastor friend who moved down there and he loves it. Supports his four member family on a Church salary. Plus great music if your into that type of thing and its a Texas city not tethered to the price of oil. I don't see Chicago proper as an ERE type of place, plus my brother lives there and he is an uncompromising asshole of the first order. Minneapolis is too cold and now that Mary Tyler Moore is dead, I don't have the heart for it. Denver ain't my kind of town and Seattle is like suicide central. Atlanta just seems too combustible but I've never been there.

giskard
Posts: 242
Joined: Sat Apr 30, 2016 12:07 pm

Re: Giskard's Journal

Post by giskard »

Jason wrote:
Fri May 05, 2017 12:48 pm
From the cities you mentioned, Austin jumps out. I have a broke-ass Pastor friend who moved down there and he loves it. Supports his four member family on a Church salary. Plus great music if your into that type of thing and its a Texas city not tethered to the price of oil. I don't see Chicago proper as an ERE type of place, plus my brother lives there and he is an uncompromising asshole of the first order. Minneapolis is too cold and now that Mary Tyler Moore is dead, I don't have the heart for it. Denver ain't my kind of town and Seattle is like suicide central. Atlanta just seems too combustible but I've never been there.
So Austin I actually have not ever been to but I have always heard great things. And I did hear cost of living is great so that agrees with what you mentioned about your Pastor friend. However, it seems that software jobs are very competitive in Austin, more so than Dallas, for example. Also, did you know Austin has banned AirBnB, Uber, and Lyft? That makes traveling there a huge pain now.

Anyway, I suppose it is all a moot point now because I just took a job offer in Minneapolis. I know it is cold but the city is such a great ERE city. Bike lanes everywhere and awesome public transport! So many great outdoor things to do in the summer, and I'll go ahead and just be an optimist and say I will do cross country skiing in the winter.

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