February 2011
A step in the wrong direction this month.
A decent amount of my expenses this months were investments for the future: stockpiled food and outfitted my 1BR for the long haul. I expect next month to be very good, but we'll see.
I didn't read any books at all. I've been extremely busy at work, although I've been enjoying it.
And I still haven't hit go on my investments! Ugh!
akratic's ERE journal
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jasoninmississippi
- Posts: 101
- Joined: Mon Sep 20, 2010 3:17 am
@djc, thanks for the nice comment.
@jason, in the short term (~6 months) I'm going to buy the IAU ETF. I considered GLD too, but IAU has lower fees.
In the long term (after ~6 months), I'm going to sell IAU and take physical possession. I think physical possession is better, but I can't deal with it right now.
@jason, in the short term (~6 months) I'm going to buy the IAU ETF. I considered GLD too, but IAU has lower fees.
In the long term (after ~6 months), I'm going to sell IAU and take physical possession. I think physical possession is better, but I can't deal with it right now.
I've thought about owning gold too but I don't know all that much about the process. Isn't the difference between the spot price, purchase price and selling price quite a bit? I think you have to buy it at a premium and sell it at a discount. If that's the case then owning the ETF would be a lot easier.
Either way, keep up the good work! Your journal is an inspiration.
Either way, keep up the good work! Your journal is an inspiration.
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Robert Muir
- Posts: 280
- Joined: Thu Jul 22, 2010 10:15 pm
Yes, if you're buying gold for investment purposes (i.e. for PP), then the ETF is the way to go. If it's for when TSHTF then you'll want physical possession.
The problem with acquiring physical gold is the very high differential between the purchase price and selling price. But if the purpose is TSHTF, then that doesn't matter.
The problem with acquiring physical gold is the very high differential between the purchase price and selling price. But if the purpose is TSHTF, then that doesn't matter.
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jasoninmississippi
- Posts: 101
- Joined: Mon Sep 20, 2010 3:17 am
Well...physical bullion has a relatively large bid/ask spread but you only pay that once when you buy and once when you sell. An ETF has a much smaller expense ratio that's paid every year. So ETFs are cheaper for shorter holding periods and bullion is cheaper for longer periods.
Right now IAU has an ER of .25% and ajpm.com has a spread of about 5%. With those figures, bullion gets cheaper when held 20+ years.
IMO the optimal strategy w.r.t. expenses is to hold about 1/2 bullion as a "core holding" you expect to never sell, and the remainder in an ETF for rebalancing purposes. That way you have a token TSHTF hedge too. However FWIW I haven't bothered with bullion so far.
Right now IAU has an ER of .25% and ajpm.com has a spread of about 5%. With those figures, bullion gets cheaper when held 20+ years.
IMO the optimal strategy w.r.t. expenses is to hold about 1/2 bullion as a "core holding" you expect to never sell, and the remainder in an ETF for rebalancing purposes. That way you have a token TSHTF hedge too. However FWIW I haven't bothered with bullion so far.
March 2011
April 2011
Oops, things got really busy there for a bit, and I missed last month's journal post, so this will have to be a double.
I've finally started to hit my stride here in Chicago.
My girlfriend did indeed move here, and it's great to be living with her. We've lived together for two months now, although she's gone for the month of May, biking from Vancouver to San Francisco. I'm jealous! But I know I will have my own opportunities for adventure in the future.
Work has been pretty good actually. It's challenging and full of interesting problems! But one of my coworkers is a terrible person, and sometimes I'm forced to work on projects I don't believe in. But even still, the work has been so engaging recently that I haven't even been killing time browsing the ERE forums. It's possible I'll hit my FI numbers before even getting sick of this job.
The most important thing to develop recently though is that my social life in Chicago is finally in really good shape. My set of friends here has reached critical mass, such that it's possible to get friends over for cards, board games, movies, or pickup sports a few times every week. After I left MIT I was worried that I'd never again be able to find such a concentration of smart, motivated, interesting people without the university doing the filtering for me... but somehow I pulled it off here in Chicago, and I'm very grateful.
In terms of ERE goals and revelations, not much has changed. At this point I think I've made all the high impact expense saving reductions. Now it's mostly just a waiting game as my net worth continues to climb. My splurges these days are all things I really enjoy: $1 movies from red box, occasional $5 burritos, or $10 on chips and killer salsa for everyone coming over for game night.
Would you believe that I still haven't actually invested my savings?
Also I'm getting fat. That needs to change. I've joined a frisbee team, but diet changes are going to be necessary, too.
PS: Did you know that popcorn on the stove is way cheaper, and tastes *way* better than microwave popcorn? You just need to do it right: olive oil + sea salt + garlic salt + cayenne pepper. Feeds 6+ for ~$1. spices/salts from Aldi, popcorn and oil from Costco.
April 2011
Oops, things got really busy there for a bit, and I missed last month's journal post, so this will have to be a double.
I've finally started to hit my stride here in Chicago.
My girlfriend did indeed move here, and it's great to be living with her. We've lived together for two months now, although she's gone for the month of May, biking from Vancouver to San Francisco. I'm jealous! But I know I will have my own opportunities for adventure in the future.
Work has been pretty good actually. It's challenging and full of interesting problems! But one of my coworkers is a terrible person, and sometimes I'm forced to work on projects I don't believe in. But even still, the work has been so engaging recently that I haven't even been killing time browsing the ERE forums. It's possible I'll hit my FI numbers before even getting sick of this job.
The most important thing to develop recently though is that my social life in Chicago is finally in really good shape. My set of friends here has reached critical mass, such that it's possible to get friends over for cards, board games, movies, or pickup sports a few times every week. After I left MIT I was worried that I'd never again be able to find such a concentration of smart, motivated, interesting people without the university doing the filtering for me... but somehow I pulled it off here in Chicago, and I'm very grateful.
In terms of ERE goals and revelations, not much has changed. At this point I think I've made all the high impact expense saving reductions. Now it's mostly just a waiting game as my net worth continues to climb. My splurges these days are all things I really enjoy: $1 movies from red box, occasional $5 burritos, or $10 on chips and killer salsa for everyone coming over for game night.
Would you believe that I still haven't actually invested my savings?
Also I'm getting fat. That needs to change. I've joined a frisbee team, but diet changes are going to be necessary, too.
PS: Did you know that popcorn on the stove is way cheaper, and tastes *way* better than microwave popcorn? You just need to do it right: olive oil + sea salt + garlic salt + cayenne pepper. Feeds 6+ for ~$1. spices/salts from Aldi, popcorn and oil from Costco.
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Robert Muir
- Posts: 280
- Joined: Thu Jul 22, 2010 10:15 pm
Looks like you're on track akratic. Good job!
I agree, popcorn on the stove is the best! Personally, I use coconut oil. The aroma and flavor is to die for! I buy it from a local health food store in largish plastic containers and transfer about a pint at a time to a glass jar for easy microwaving. Coconut oil is solid at normal room temperature, but a quick microwave gets it liquified for measuring.
My recipe is old fashioned. 2-tbsp oil, 1/2-cup kernels. Heat oil on medium in thick bottomed 3-qt pan until two kernels pop, then pour rest of corn in pan. Continue heating until popping slows to almost nothing (no need to shake if bottom of pan is thick enough). Salt & butter to taste.
I agree, popcorn on the stove is the best! Personally, I use coconut oil. The aroma and flavor is to die for! I buy it from a local health food store in largish plastic containers and transfer about a pint at a time to a glass jar for easy microwaving. Coconut oil is solid at normal room temperature, but a quick microwave gets it liquified for measuring.
My recipe is old fashioned. 2-tbsp oil, 1/2-cup kernels. Heat oil on medium in thick bottomed 3-qt pan until two kernels pop, then pour rest of corn in pan. Continue heating until popping slows to almost nothing (no need to shake if bottom of pan is thick enough). Salt & butter to taste.
First of the year I created a PP subportfolio, using IAU as a proxy for gold. It is up only 4.12% for the year, mostly because of the stock allocation (VTI).
I also created a modified Dogs of the Dow subportfolio, with a double ration of T instead of VZ, a double ration of MRK instead of PFE, and PG as a proxy for DD (just because I had the one and didn't want to buy the other). This quasi-DoD portfolio is up 7.5% for the year. The actual DoD is up 8.2%
So don't feel too bad about not pulling the PP trigger. It looks like the commodity bubble is deflating and gold might be a better buy in 2012. [I know, I know. The whole point of PP is that you can't time the market. But gold at $1500/oz. just seems a bit pricey to me.]
I also created a modified Dogs of the Dow subportfolio, with a double ration of T instead of VZ, a double ration of MRK instead of PFE, and PG as a proxy for DD (just because I had the one and didn't want to buy the other). This quasi-DoD portfolio is up 7.5% for the year. The actual DoD is up 8.2%
So don't feel too bad about not pulling the PP trigger. It looks like the commodity bubble is deflating and gold might be a better buy in 2012. [I know, I know. The whole point of PP is that you can't time the market. But gold at $1500/oz. just seems a bit pricey to me.]
Gold AND the 30Y Bonds. I like the simplicity and hedged-ness and track record of the PP, but the actual implementation scares me.
If I could make 4.12% every six months, I'd be financially independent. (Actually 2.9% every six months would do it with current numbers.)
I deliberate for hours about $100 worth of expenses, yet by failing to invest, I'm giving up $1000s worth of investment income.
If I could make 4.12% every six months, I'd be financially independent. (Actually 2.9% every six months would do it with current numbers.)
I deliberate for hours about $100 worth of expenses, yet by failing to invest, I'm giving up $1000s worth of investment income.
I think that, when it comes to investment, you need to take a really detached view. Otherwise the swings will drive you crazy. With my expenses, something like spending $7-8 on expensive food is something I don't really want to do. At the same time, I have about $60k invested and on a good or bad day I'll see my portfolio go up or down $500. But the numbers don't really feel real there.
In part I've insulated myself from the psychological effect of the swings, because I mostly look at my investments as 'dividends earned', and those are partly insulated from stock price movements.
In part I've insulated myself from the psychological effect of the swings, because I mostly look at my investments as 'dividends earned', and those are partly insulated from stock price movements.
May 2011
Lots of expenses this month.
Housing costs doubled because my girlfriend went on a month long bike trip and wasn't there to split rent and utilities with.
And a death in the family prompted the purchase of an expensive trip home for memorial day. The trip had me homesick for Boston. I don't like Chicago outside of my job and friends.
I'm starting a diet. I think I'll track my progress in this journal. Day zero: waist at widest point is 37.75 inches. By 1/1/2012 it will be 33 inches at the widest point, or less. I'm planning to lose about 25 lbs of fat at about 1.0 lbs/week. Expect graphs.
I'm tempted to buy a $90k condo down the street from where I live. It could be cash-flow positive on day one. But initially I would live there and lower my housing costs.
I still need to invest. I think I'm getting closer.
Lots of expenses this month.
Housing costs doubled because my girlfriend went on a month long bike trip and wasn't there to split rent and utilities with.
And a death in the family prompted the purchase of an expensive trip home for memorial day. The trip had me homesick for Boston. I don't like Chicago outside of my job and friends.
I'm starting a diet. I think I'll track my progress in this journal. Day zero: waist at widest point is 37.75 inches. By 1/1/2012 it will be 33 inches at the widest point, or less. I'm planning to lose about 25 lbs of fat at about 1.0 lbs/week. Expect graphs.
I'm tempted to buy a $90k condo down the street from where I live. It could be cash-flow positive on day one. But initially I would live there and lower my housing costs.
I still need to invest. I think I'm getting closer.
June 2011
Unusual expenses this month include $50 on an AC and $190 on a trip to Maine.
I got into a little tiff with my boss as well this month, and I thought a bit about quitting the job, but I'm not ready yet. I don't like to be told what to do, especially when I end up being right, and the task forced down my throat ends up being a bad idea after all.
That $90k condo is now down to $75k, but I can't tie myself down to Chicago that much, even though I do think it's a good deal. (It would rent for $900/mo+. Costs: $75/mo condo fees, $200/mo property taxes, plus some maintenance and closing costs. That's an 8.7% return, and a somewhat locked in housing cost while I live there.) If I knew I'd still be in Chicago in a few years I'd buy the place, but I don't. In fact, if I'd actually quit my job last month I'd probably be moving right now.
I lost an inch from my waist this month, going from 37.75" to 36.75". Four or five more months of that and I'll be in good shape again! The diet is going well.
I still haven't invested most of my money. My main reservation is that the 4.375% yield on 30Y bonds in the Permanent Portfolio makes me sick to my stomach. But I haven't seen a better plan than the PP. I thought I'd stripped myself of any and all speculative habits, but I just can't swallow the idea that deflation is as likely in the future as inflation is.
I'm thinking more and more seriously about thru-hiking the Appalachian Trail after I'm financially independent, and so I've begun lurking whiteblaze.net.
My projections have been showing January 2013 as the FI point for a long time now. That's 1.5 years away. If the projection is accurate, I'll be financially independent one month before my 30th birthday.
Unusual expenses this month include $50 on an AC and $190 on a trip to Maine.
I got into a little tiff with my boss as well this month, and I thought a bit about quitting the job, but I'm not ready yet. I don't like to be told what to do, especially when I end up being right, and the task forced down my throat ends up being a bad idea after all.
That $90k condo is now down to $75k, but I can't tie myself down to Chicago that much, even though I do think it's a good deal. (It would rent for $900/mo+. Costs: $75/mo condo fees, $200/mo property taxes, plus some maintenance and closing costs. That's an 8.7% return, and a somewhat locked in housing cost while I live there.) If I knew I'd still be in Chicago in a few years I'd buy the place, but I don't. In fact, if I'd actually quit my job last month I'd probably be moving right now.
I lost an inch from my waist this month, going from 37.75" to 36.75". Four or five more months of that and I'll be in good shape again! The diet is going well.
I still haven't invested most of my money. My main reservation is that the 4.375% yield on 30Y bonds in the Permanent Portfolio makes me sick to my stomach. But I haven't seen a better plan than the PP. I thought I'd stripped myself of any and all speculative habits, but I just can't swallow the idea that deflation is as likely in the future as inflation is.
I'm thinking more and more seriously about thru-hiking the Appalachian Trail after I'm financially independent, and so I've begun lurking whiteblaze.net.
My projections have been showing January 2013 as the FI point for a long time now. That's 1.5 years away. If the projection is accurate, I'll be financially independent one month before my 30th birthday.