the dollar journal

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thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

the dollar journal

Post by thedollar » Tue Mar 14, 2017 9:15 am

Hello,

Finances
Annual expenses (2016): $16,363

Balance
Apartment (big part of the assets): $643,419
Liabilities (mortgage): $257,367

Savings rate (2016): 32%

Stuff I should work on
  • Reducing my "stupid" spending
  • Selling my condo and renting a place
  • An efficient way to invest the money
  • Getting a full time job within the next year or so
Last edited by thedollar on Fri Nov 30, 2018 12:36 pm, edited 2 times in total.

ether
Posts: 187
Joined: Sat Nov 17, 2012 1:50 am
Location: Charlotte, USA
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Re: the dollar journal

Post by ether » Tue Mar 14, 2017 9:26 am

Welcome!
You're essentially financially free!
What kind of job are you hoping to get?

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Tue Mar 14, 2017 9:32 am

Monthly budget

Mandatory expenses
Mortgage: $157
Property tax: $212
HO association: $243
Mandatory TV: $30
Water $17
Electricity: $74
Heating: $74
Total: $807

Other expenses
Food: $285

Total spending: $1,092
Annual spending: $13,104
Last edited by thedollar on Fri Nov 30, 2018 12:37 pm, edited 1 time in total.

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Eureka
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Re: the dollar journal

Post by Eureka » Tue Mar 14, 2017 9:35 am

Welcome to!

But if you have a swr <4% why on earth would you want to work full time?

Sell the condo, learn how to invest and support yourself with your part time job until you do not need that income any longer.

Well, strictly speaking, the value of the place where you live does not count towards your net worth before you have actually sold it. So as of now, you still have a long way to go.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Tue Mar 14, 2017 9:42 am

ether wrote:Welcome!
You're essentially financially free!
What kind of job are you hoping to get?
Thank you!

Looking for any job within economics.. Market analyst etc.

In a sense I might be financial independent, yes. Only if I sell my condo though as the money is not invested in something that I can easily sell or get a dividend from right now.

This is my struggle since my mind has adapted to having this home (great location, ok space). I'd possibly have to exchange it for something smaller at another location . It would also mean having my housing expenses probably 2x of what they are right now. So that is what I am contemplating right now. Why keep the apartment if it means I'll have to work another 30 years when I can just rent?
Last edited by thedollar on Tue Mar 14, 2017 9:55 am, edited 1 time in total.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Tue Mar 14, 2017 9:50 am

Eureka wrote:Welcome to!

But if you have a swr <4% why on earth would you want to work full time?

Sell the condo, learn how to invest and support yourself with your part time job until you do not need that income any longer.

Well, strictly speaking, the value of the place where you live does not count towards your net worth before you have actually sold it. So as of now, you still have a long way to go.
Thanks...

I do agree with you to some degree. In FI context the apartment probably shouldn't be counted as net worth. For all other purposes I think it should.

My goal right now is not ER but just FI. I think getting a full time job might bring some meaning and challenges to my life :D

Selling the condo and finding a new place to live will be the hardest part for me :)

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Eureka
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Re: the dollar journal

Post by Eureka » Tue Mar 14, 2017 9:59 am

Sounds like you just gave the answer: keep the condo, get a full time job that will bring your life meaning and keep on working happily ever after :D

ether
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Location: Charlotte, USA
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Re: the dollar journal

Post by ether » Tue Mar 14, 2017 10:16 am

Eureka wrote:Sounds like you just gave the answer: keep the condo, get a full time job that will bring your life meaning and keep on working happily ever after :D
+1
Either way you're in a GREAT spot! You're definitely gonna find an interesting job in finance! Have a good time at work, and know if it ever becomes overwhelming, you're financially set and can find something new anytime. This is what it's all about. We work because we want to, not because we have to! Therefore I declare you financially free!

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Tue Mar 14, 2017 10:23 am

Eureka wrote:Sounds like you just gave the answer: keep the condo, get a full time job that will bring your life meaning and keep on working happily ever after :D
Well... If only it was that simple!

My priorities are:

1) Financial independence
2) The condo

In that order. Which would mean selling the condo.

Like many of you on this site I have discovered that a job and/or excessive spending does not necessarily equal a good life or life meaning. I don't think a full time job is a permanent solution for me but it's something I'd like to do for a limited period of time.

My goals are not static so I'll try to set my life up in a way that makes me FI and possibly the means to have a higher spending level in the future if my life is to change (kids.., etc.). That's one of the factors when choosing to continue working for some years. There's also the social stigma from family and friends regarding having a job.. but this has of course been discussed a lot on this site already.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Tue Mar 14, 2017 10:44 am

Since housing is my biggest problem I have tried to estimate what would happen if I was to rent an apartment. I live in an expensive city so the rent is much higher.

Monthly budget if I rent an apartment

Mandatory expenses
Rent: $1,893
Water: $17
Electricity: $74
Heating: $74
Total: $2,058

Other expenses
Food: $285

Total spending: $2,343 (Theearthawaits.com estimate)
Annual spending: $28,116
Last edited by thedollar on Sat Oct 28, 2017 5:45 am, edited 1 time in total.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Sun Apr 02, 2017 6:23 am

At some point it dawned on that I have been calculating the post-ER tax too high.

If I was to withdraw 4% from my stocks right now it would be nearly tax free. In the future I will be calculating with taxes only on the mandatory dividend (around 2% for most stocks). That would most likely be 4% x 0.5 (half is 2%) x 37% (the tax rate could be around 27-43%) = 0,74%. That's 0,74% / 4% (SWR) = 18.5%. And that would even be pretty conservative when using 37% since that's based on $43,000 dividend.

This month I've sold a lot of things I just had laying around which helped increase my networth quite a bit.

Pretty happy with this month. It wasn't too hard on me and I made some progress. My spending is the only thing I'm unhappy with. Guess I'll keep it lower the coming months.

For April I might have a once in a lifetime opportunity to increase my numbers. My friend commissioned me with selling something for him and it seems like I will be able to close a deal this month leaving me with a huge commission. Also I've put a lot of stuff I had laying around for sale. I'm really starting to like trading and selling stuff. If you do it right everyone benefits from a trade. The buyer, the seller, me....
Last edited by thedollar on Sat Oct 28, 2017 5:42 am, edited 1 time in total.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Sun Apr 02, 2017 6:54 am

Image

Sadly this handsome fellow ain't me. It's Simon Spies - almost all Danes will know him - a crazy but brilliant entrepreneur.

One of his earliest principles is that you have to save half of your profits/pay/whatever and spend the other half. Sound familiar? He definitely did just that and was worth probably a billion kroner or close to it at the time of his death. He's also quoted for saying:

"You'll start by saving 100 millions and then take it from there"

Challenge accepted :D
Last edited by thedollar on Sun Apr 02, 2017 7:25 am, edited 1 time in total.

Jason
Posts: 1914
Joined: Mon Jan 30, 2017 8:37 am

Re: the dollar journal

Post by Jason » Sun Apr 02, 2017 7:18 am

I did some intense investigative research (wikipedia) on Simon Spies. Besides his incredible accomplishments, he was apparently a morning person.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Fri Apr 21, 2017 10:53 am

Jason wrote:
Sun Apr 02, 2017 7:18 am
I did some intense investigative research (wikipedia) on Simon Spies. Besides his incredible accomplishments, he was apparently a morning person.
Haha indeed. This guy was succesful in more than one way ;) truly admirable

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Fri Apr 28, 2017 12:18 am

Well, guess I'm ready for an April update. Almost no more expenses for this month besides a few dollars for the weekend.

Seems that it has been a great month. In only 30 days my networth has increased by almost 3 months of expenses! To achieve this I have been selling some stuff laying around and my stocks have helped as well. I still have a few items I plan on selling in May. Also, my "big sale" has not gone through yet so I have not received the commission. It's quite nerve-racking when we've been working on this for over six months.
Last edited by thedollar on Sat Oct 28, 2017 5:36 am, edited 1 time in total.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Sat Jul 01, 2017 10:09 am

Trying to achieve escape velocity since May 2017

Investment plan as of (May 2017)
  • 40% stocks
    • of which 36% is S&P 500
    • 18% is 1/4 DAX30
    • 18% is C25
    • 28% is stock-picking
  • 60% cash (earning around 0.9% return before taxes)
2017 and outlook as of (December 2017)
  • Reporting: Cleaned up all numbers and changed to a new improved format. $ volatility has been causing bad returns and problems with the numbers. I now use a set $ rate for each month. Wrote off / phased out some physical cash, so the accounting is now more conservative.
  • Small holdings of alternative investments not counted in assets as of now: three biggest crypto coins ($1.000) (mostly from gains), crowdlending ($1.000)
  • 2017 Finances
    • Net worth: 54.00x -> 54.03x (+ my expenses paid).
    • Actual expenses SWR 2017: 1.97%.
  • 2018 Financial goals
    • Net worth: 54.03x * 1.10 = 59.43.
    • Allocation: hit 60% stocks, reduce stock picking.
  • Non-financial goals: Get new job. Spend less time reading news / about finances / updating portfolio.
  • I have 'cracked the code' on taxes - meaning I have learned a bit - this year. This will significantly reduce my tax burden for years to come.


UPDATED AS OF 31 AUGUST 2018:

Goals
  • FI based on 25x expenses
  • FI based on 33x expenses
  • FI based on 50x expenses
  • FI based on 100x expenses
  • Spend less than $20,000 in 2017 (adjusted from $16,000 because of devalued $) (=$20,564 actual)
  • Spend less than $20,000 in 2018
  • Have dividends cover expenses in 2017 ($4497, 22%)
  • Have dividends cover expenses in 2018
  • Become sub 1% / reach escape velocity
  • Cover expenses through other source than investments
No. of yearly expenses invested based on actual expenses for the month
  • May 2017: 47.45x
  • June 2017: 60.51x
  • July 2017: 59.01x
  • August 2017: 22.29x // Bought new furniture.
  • September 2017: 56.16x
  • October 2017: 53.46x
  • November 2017: 64.29x
  • December 2017: 56.04x
  • January 2018: 78.73x
  • February 2018: 46.58x
  • March 2018: 73.64x
  • April 2018: 51.28x
  • May 2018: 27.55x
  • June 2018: 56.47x
  • July 2018: 57.38x
  • August 2018: 39.49x
No. of yearly expenses invested based on my spending goal
  • May 2017: 54.00x (+0.18%) (+1.2 mnths)
  • June 2017: 53.42x (-1.06%) (-6.9 mnths)
  • July 2017: 53.53x (+0.20%) (+1.3 mnths)
  • August 2017: 53.30x (-0.44%) (-2.8 mnths)
  • September 2017: 53.65x (+0.66%) (+4.2 mnths)
  • October 2017: 54.11x (+0.86%) (+5.54 mnths)
  • November 2017: 53.61x (-0.92%) (-5.97 mnths)
  • December 2017: 54.03x (+0.78%) (+5.04 mnths)
  • January 2018: 54.62x (+1.08%) (+7.01 mnths)
  • February 2018: 54.39x (-0.42%) (-2.76 mnths)
  • March 2018: 52.82x (-2.88%) (-18.79 mnths)
  • April 2018: 53.84x (+1.93%) (+12.20 mnths)
  • May 2018: 55.11x (+2.35%) (+15.19 mnths)
  • June 2018: 55.50x
  • July 2018: 55.98x
  • August 2018: 56.33x
Allocation
  • May 2017: Stocks 42.9%
  • June 2017: Stocks 42.9%
  • July 2017: Stocks 43.3%
  • August 2017: Stocks 44.7% // Decided to go 45% stocks, 5% bonds, 50% cash
  • September 2017: Stocks 49.9% // Opting for 50%
  • October 2017: Stocks 55.2% // 55% for now, stopped purchasing stocks
  • November 2017: Stocks 54.1% // Due to losses and small scale back towards 50%
  • December 2017: Stocks 54.5%
  • January 2018: 58.6%
  • February 2018: 59.0%
  • March 2018: 58.6%
  • April 2018: 59.0%
  • May 2018: 59.8%
  • June 2018: 60.5%
  • July 2018: 63.3%
  • August 2018: 64.4%
Dividends received
  • April 2017: N/A
  • May 2017: N/A
  • June 2017: $141.28 (8.83% of expenses of $1600)
  • July 2017: $309.55 (19.35% of expenses of $1600)
  • August 2017: $879.57 (54.97% of expenses of $1600)
  • September 2017: $348.56 (21.79% of expenses of $1600)
  • October 2017: $289.85 (18.12% of expenses of $1600)
  • November 2017: $602.92 (37.68% of expenses of $1600)
  • December 2017: $470.91 (29.43% of expenses of $1600)
  • January 2018: $208.63 (13.04% of expenses of $1600)
  • February 2018: $545 (34.06% of expenses of $1600)
  • March 2018: $4,563 (285.19% of expenses of $1600)
  • April 2018: $1,813 (113.31% of expenses of $1600)
  • May 2018: $2,098 (131.13% of expenses of $1600)
  • June 2018: $807 (50.44% of expenses of $1600)
  • July 2018: $572 (35.75% of expenses of $1600)
  • August 2018: $958 (59.88% of expenses of $1600)
Some kind of weird inconsistency currently bugging my numbers around June / July 2018. Over all the development seems right though and there should be no problems going forward.
Last edited by thedollar on Fri Aug 31, 2018 9:56 am, edited 18 times in total.

herp
Posts: 123
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp » Tue Jan 16, 2018 12:55 pm

Belated hello!

I find your reports quite interesting, so consider me a new subscriber.

A couple of questions arose as I read through your journal.
thedollar wrote:
Sat Jul 01, 2017 10:09 am
60% cash (earning around 0.9% return before taxes)

I have 'cracked the code' on taxes - meaning I have learned a bit - this year. This will significantly reduce my tax burden for years to come.
Low interest rates are a bummer in the EU right now, as you're basically losing purchasing power even with investment grade bonds, but what are we to do?

I'd like to hear your thoughts on having cracked taxes. What did you learn?

Congrats on hitting six figures! I assume that NW includes your home equity? Still, a great accomplishment.

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Fri Jan 26, 2018 2:42 am

Thanks!

"Cracking the code" might be overstated hence I consider myself a novice regarding tax laws. What I really mean is that I have learned a lot this past year and I am still processing it. However, for 2017 I was able to reduce my tax considerably and might get a big tax return. I might not be able to do this looking forward but I now know how to optimize.

Another area in which I am learning is investing. Can't believe it took me so long to gain an interest in this area. Regarding your question and observation that I am loosing purchasing power; I believe you are right!

I like to think about my portfolio as having a low-risk part (cash, bonds, T-bills (?)) and a high-risk part (equities). In this environment the prices are extremely high fundamentally for equities and thus an investor must accept more risk - since prices could crash and yields are lower. On the other hand for the low-risk part of the portfolio I must accept extremely low or negative returns to eliminate risk. In total investors are faced with higher risk or lower returns. Pretty bad environment for investors... Right? Anyway, that's my take on things. I could switch my cash with bonds but the only way I know of to purchase bonds is through a fund with high costs (0,5%) and pretty low returns (about 2%). If we have an interest rate chock scenario where inflation and interest rate goes considerably up bonds are somewhat screwed as well so bonds also carries risks compared to cash. That's my reasoning at the moment but I am increasing my equities part slowly atm since it is pretty low.

herp
Posts: 123
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp » Fri Jan 26, 2018 10:27 am

thedollar wrote:
Fri Jan 26, 2018 2:42 am
I like to think about my portfolio as having a low-risk part (cash, bonds, T-bills (?)) and a high-risk part (equities). In this environment the prices are extremely high fundamentally for equities and thus an investor must accept more risk - since prices could crash and yields are lower. On the other hand for the low-risk part of the portfolio I must accept extremely low or negative returns to eliminate risk. In total investors are faced with higher risk or lower returns. Pretty bad environment for investors... Right? Anyway, that's my take on things. I could switch my cash with bonds but the only way I know of to purchase bonds is through a fund with high costs (0,5%) and pretty low returns (about 2%). If we have an interest rate chock scenario where inflation and interest rate goes considerably up bonds are somewhat screwed as well so bonds also carries risks compared to cash. That's my reasoning at the moment but I am increasing my equities part slowly atm since it is pretty low.
I agree completely with just about everything you just summed up. Going forward, high equity valuations and rock-bottom interest rates will probably give us lower than historical returns for a number of years. Of course, this is just guesswork and my crystal ball could be wrong.

Cash earning 0.9% is more attractive than a credit risk free government bond of significantly longer duration earning less interest. For comparison, the 10 year danish treasury is currently yielding ~0.6%, but then you have significant interest rate risk. In that case, you're basically betting on the interest rates to drop further in the short run, which is the only case where you're going to win. If rates stay the same or go up, the cash holding is better.

At any rate, it's not worth fussing over. Set your allocation and ride it out is my philosophy :)

thedollar
Posts: 67
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar » Fri May 04, 2018 12:50 pm

Here's the volatility in my networth measured in monthly expenses. Losing above 1.5 years expenses in a month? wwwhh, that's "awesome".

Image

Does anyone know how to upload crisp images?

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