Journal of MDFIRE2024

Where are you and where are you going?
MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Fri Jul 21, 2017 4:51 am

Allagash wrote:
Thu Jul 20, 2017 9:47 pm
Did you post a list of your income and expenses?
I have posted some details about it in other threads. Usually I focus on the bigger picture, therefore the diagramm with my main key performance indicators. I also don't do a detailled cost controlling anymore. I track my expenses in the following categories:
-Housing (25%) (living in my own apartement, rent-free)
-Transportation (16%) (carfree life, 80% by bike + 20% public transportation)
-Food etc. (16%) (almost always cooking for myself and bying wholesale)
-Travel/Leisure (25%) (travel hacking, inexpensive hobbies, e.g. walking, biking, ...)
-Others (18%) (recycling, repairing, DIY, minimalism, simple living)

Overall my expenses are between 7k€ - 10k€ p.a. (average of this and last two years) The numbers behind the categories are the relative share of my total expenses. And I wrote behind the numbers, how I tackle them. (my best practices)

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Fri Jul 21, 2017 5:12 am

Two out of three weeks of my FIRE-simulation are over. As I mentioned before I use this three week vacation to simulate an RE life. I want to experience how it feels to be retired. Usually I traveled in my vacation, but this vacation is different.
I started two weeks before. In the first week I thought about my work, but those thoughts have disappeared. Some things went different than expected. I had some problems with my neck, therefore I went to a doctor to have a look at it. I guees, this is also part of being retired. You always have to be prepared about unexpected events. Well, overall I really like it so far. Having all the free time. You could manage your own day as you like. Autonomy is something I strive for. Most of all I totally don't miss my alarm clock in the morning. I did some trips to nearby cities, lake, by bicycle, sailing, helping my parents doing woodwork, reading and writing as always. After two weeks I can say that I don't miss my work so much. Although I'm looking forward to talk to my colleagues and doing some IT stuff, like programming software and so on. I think I can replace structure and purpose very easily when retired. I guess I have bigger issues to replace community from work.
I hope that you (reader of my journal) don't get the expression, that I only focus on the technicalities of FI, e.g. with the numbers and monthly diagram. I also work on and try ERE skills, personal development and growth, personal life satisfaction, etc. FI is only one part of my life, although it is very easy to present it with numbers and diagrams. There are many other parts in my life, which are as important as FI. By reading posts, threads and other journals here in the ERE-Forum I learn a lot about the process. ERE, FIRE or how you call it is a journey not a destination for me. I have read all of My_Brain_Gets_Itchy's Journal and I learned a lot. However, pursuing FI by saving and investing gives me a secure and stable base in my life to try out other things. I admire independency, freedom, autonomy, mastery, purpose, structure, integrity, authenticity. Achieving FI is one way to live by my virtues.
I am an INTJ and I try to break down my missions in life, e.g. ERE and FIRE, therefore I have very specific and concrete goals, e.g. SR, WR, target FI money, FIRE year, ...
Sometimes I wish I could write in my native language, which is German. Then I could express my thoughts more precise.

fingeek
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Re: Journal of MDFIRE2024

Post by fingeek » Fri Jul 21, 2017 6:16 am

That's really great - Glad it's going well for you! Having a bad neck/back/head can be quite common on a vacation from a high-stress job (I often get these, unless I start wrapping up mid-week the week before I leave)... I wonder if it's that?

I really need to try a FIRE-simulation in the coming months now, as preparation and to check it's what I really want.

Are your test, are you still targeting 2024 for FIRE, or will you start earlier (higher WR)?

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Fri Jul 21, 2017 12:08 pm

fingeek wrote:
Fri Jul 21, 2017 6:16 am
Are your test, are you still targeting 2024 for FIRE, or will you start earlier (higher WR)?
I don't know exactly. It is my target and it is valid. But, these days I focus a lot more on the journey and not the destination. I try to connect and integrate my FIRE goals into my overall life concept. I have read a book called "Chop Wood, Carry Water". That does say something about my priorities right now. MDFIRE2024 is very motivational but I do know that not only the goal is important but also process how I achieve it. I hope that answers your question.
By the way: I am very grateful that I decided to to this FIRE-simulation test for three weeks. If you don't know if RE is your thing, I can strongly recommend you trying something like this. Although it is only for three weeks in my case, you get a rough impression/feeling for RE.

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SalutNounou
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Re: kpi

Post by SalutNounou » Fri Jul 21, 2017 12:44 pm

El Duderino wrote:
Fri Jun 30, 2017 7:09 pm
hey MD, nice stats.

can you explain, how do you calculate months to FI?
You can calculate it in the following way :
Let r be your average annual return, Co your initial capital, S your annual savings and C(n) your capital at year n.
You can write :
C(0) = Co
C(n) = (1+r)*C(n-1) + S
because each year you earn interest on capital of previous year, plus the amount of money you saved during the year.
You can prove by recurrence that C(n) can also be written :

C(n) = (1+r)^n * (Co + S/r ) - S/r
Which is much more practical.

Now let's say that you want to know at which year N you will reach a given target capital T, at which you reach FIRE
You will then have C(N) = T
So T = C(N) = (1+r)^N * (Co + S/r ) - S/r

Solving for N, you get

N = ln((T + S/r) / (Co + S/r)) / ln(1+r)

To illustrate, let's say that so far your initial capital is Co = 150 000 USD. Your FIRE target capital is T=700 000 USD.
You manage to save each year S=70k USD, and your investments return annually r=10%

Then you will reach your target FIRE capital in N = 5,24 years :)

If you want to go further, I encourage you to express T and S in function of your saving rate Sr:
T = annual spendings / safe withdrawal rate = Annual Revenue (1-Sr) / SWR
S = Annual Revenue * Sr

You will then find that with such a high saving rate (86%), even if you are starting from scratch,
(1) you should reach FIRE by 2021
(2) at this level of saving rate Sr, your annual investment return r does not matter too much (as long as you don't suffer huge losses...)

MDFIRE2024
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Re: kpi

Post by MDFIRE2024 » Fri Jul 21, 2017 1:02 pm

SalutNounou wrote:
Fri Jul 21, 2017 12:44 pm
El Duderino wrote:
Fri Jun 30, 2017 7:09 pm
hey MD, nice stats.

can you explain, how do you calculate months to FI?
You will then find that with such a high saving rate (86%), even if you are starting from scratch,
(1) you should reach FIRE by 2021
(2) at this level of saving rate Sr, your annual investment return r does not matter too much (as long as you don't suffer huge losses...)
Thank you for the mathematical explanation. It motivates me and makes me confident at the same time that FI is absolutely realistic within the next 5-7 years. I have to confess that I am a bit risk-averse.

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Sun Jul 23, 2017 12:10 am

Yesterday I thought more about ERE and I spent a good amount of time writing what ERE means for me.
Also I brainstormed ERE skills I want evaluate and in case build competence (+1 or +2 by Jacob's definition).

Here is a list of ERE skills I find useful:
personal finances, home economics, home repair, real estate maintenance, basic health and first aid knowledge, cooking, bycicle repair, efficient grocery shopping, investing, repair of goods and sewing of clothes, various ways of getting things besides buying, tackling the big 3 (housing, transportation, food), pc-/notebook-/home electronics repair, environmental and sustainable lifestyle, woodworking, DIY, learning techniques, gardening, prepping and survivalism, relexation techniques e.g. meditation, fitness and sport without expensive tools and without gym membership, health and immune system, emotional/mental health, efficient use of power/energy/water/heat, optimal use of all domestic appliances, minimizing waste and garbage,

Is there something important missing? What's your opinion/feedback?
Feel free to comment, as always :-)

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Mon Jul 24, 2017 10:18 am

While meditation yesterday an idea arose. It was about the combination of ERE, FI and satisfaction of life.
I have looked a long time for the right balance and now I think I have found it. If I balance those three areas in my life, I hope I'll stay happy. :-)
Money is important to me. Satisfaction and quality of life is important to me. And ERE (antifragility, resilience, independence, ...) is also important to me. Neither one of those three areas consists all topics and aspects which I have currently on my mind. Therefore I have to diversify my life and I think I have found the right holistic solution.
I already have established three individual goals and missions:
- MDFIRE2024
- My-ERE-Mission
- PLZ (Persönliche Lebenszufriedenheit, personal satisfaction with life), which is basically a self-assessment
Of course there are interconnections and synergies. Well, I'll see how I'll proceed with this.
On the right side you can see different methods I am using in order to progress and process topics out of these three areas.

Image

Do you also have various important topics in your life or do you cover all topics under ERE?
Last edited by MDFIRE2024 on Mon Jul 24, 2017 2:21 pm, edited 1 time in total.

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onewayfamily
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Re: Journal of MDFIRE2024

Post by onewayfamily » Mon Jul 24, 2017 12:31 pm

I can't seem to view that image mate - looks like it's not set to public or some other issue perhaps.

Tried in Chrome, Chrome Incognito and Microsoft Edge.

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Mon Jul 24, 2017 2:23 pm

Thank you for the hint. Now you should see it. It was indeed a missing parameter. Well, next time I will check double before I post. :-)

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Re: Journal of MDFIRE2024

Post by Jason » Mon Jul 24, 2017 4:03 pm

I read this blog (and other similar blogs) with its float charts and calculus equations and I feel like Wayne and Garth meeting Alice Cooper i.e. "I am not worthy."

Outside of "I need to stop buying stupid shit" and "Ronald McDonald can go fuck himself" I haven't really come up with any type of formula. I sometimes think its a European thing. People there seem more inclined to methodology and analytics but I'm pretty sure that its just me.

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Re: Journal of MDFIRE2024

Post by onewayfamily » Tue Jul 25, 2017 1:43 am

MDFIRE2024 wrote:
Mon Jul 24, 2017 10:18 am
Do you also have various important topics in your life or do you cover all topics under ERE?
I do have a similar 'web of goals' type flowchart/venn diagram which covers my main goals or areas of focus in life.
The 3 main categories (which I consider as applying to my wife and kids as well, not just myself) are Freedom, Happiness and Adventure, with several hangers-on from these like health + fitness, a capital-preserved FIRE stash, wisdom, longevity, contributing to human space flight and going to Mars one day, travel to every country on Earth (I'm at around 50 over the last 12 years), minimalism, simplicity, focus, self-reliance and some others.

We're busy packing now for a trip to south-east Europe but I will try to post the image at some point.

Cheers!

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Wed Jul 26, 2017 11:15 am

Jason wrote:
Mon Jul 24, 2017 4:03 pm
I read this blog (and other similar blogs) with its float charts and calculus equations and I feel like Wayne and Garth meeting Alice Cooper i.e. "I am not worthy."
Outside of "I need to stop buying stupid shit" and "Ronald McDonald can go fuck himself" I haven't really come up with any type of formula. I sometimes think its a European thing. People there seem more inclined to methodology and analytics but I'm pretty sure that its just me.
I also couldn't have made that calculus equation. However, I created those diagram (monthly progress), based on my Excel Sheets. Well, I like numbers, tracking, controlling. Visualization is then just the other part of my brain on top of numbers :-) In reality I also only think about it before buying: "Do I really need it or do I want it? Does it increase my satisfaction?" So..., don't worry. In the end, I guess FIRE depends on just a few success factors, e.g. SR, SWR, Tackling the big 3 (housing, transportation, food). The Big Picture is important, IMO. But also the details count.

MDFIRE2024
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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Wed Jul 26, 2017 11:19 am

onewayfamily wrote:
Tue Jul 25, 2017 1:43 am
MDFIRE2024 wrote:
Mon Jul 24, 2017 10:18 am
Do you also have various important topics in your life or do you cover all topics under ERE?
...Freedom, Happiness and Adventure
Great! On the same page here. I have already had a look to your blog. When I saw your travel pictures, I instantly got the feeling of packing and starting to travel by myself. Well done :-) I wish you a good start to your trip to South-East Europe! Take Care. Cheers.

meursault
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Re: Journal of MDFIRE2024

Post by meursault » Sun Jul 30, 2017 12:56 am

Hi MDFIRE2024,

Thanks for your reply at my thread earlier. Your saving rates are super high! Would be interested how you manage to do it.

Also, we are sort of in the same line of work. What are your thoughts about the side-income / part-time contracts work in the IT fields? There are reportedly ageism issue where employers prefer younger candidate regardless of experience / value. Setting up own business is one way out of that problem.

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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Sun Jul 30, 2017 2:40 am

meursault wrote:
Sun Jul 30, 2017 12:56 am
Your saving rates are super high! Would be interested how you manage to do it.
I posted some of my best-practices earlier in this post https://forum.earlyretirementextreme.co ... 56#p148255
Well, I started to live by Minimalism and Simple Living a decade ago. I have internalized all those principles and as a result I ended at ERE and a high SR. Living by Web-of-Goals is also some of my principles. Minimizing waste and inefficiency etc.
meursault wrote:
Sun Jul 30, 2017 12:56 am
What are your thoughts about the side-income / part-time contracts work in the IT fields? There are reportedly ageism issue where employers prefer younger candidate regardless of experience / value. Setting up own business is one way out of that problem.
I have thought about side-income, e.g. blog, but I decided not to do it. I don't know exactly, but you have to invest a lot of your time to generate some income.
Part-time work could be something for me in my transistion phase from full-time work to RE.
Setting up a business is nothing for me, because I enjoy working at my current job.
So, overall I don't feel any need to change something on my current set-up and Web-of-Goals. :-)

What do you think about side-income / part-time-work / business? Do you want to use it to increase your income?

meursault
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Re: Journal of MDFIRE2024

Post by meursault » Sun Jul 30, 2017 4:22 am

MDFIRE2024 wrote:
Sun Jul 30, 2017 2:40 am
Part-time work could be something for me in my transistion phase from full-time work to RE.
Setting up a business is nothing for me, because I enjoy working at my current job.
So, overall I don't feel any need to change something on my current set-up and Web-of-Goals. :-)

What do you think about side-income / part-time-work / business? Do you want to use it to increase your income?
I think having cashflows from multiple sources is more resilient. I would opt for multiple flows of small, uncorrelated income sources than one major source (stock dividends etc.). It probably also mean I have money-making skillset so that I don't have to accumulate such large financial asset before FIRE.

The only thing I don't like is being forced to work on more "popular/trendy" stuff of the day just to get money. I am still researching more about these options...

Actually I don't need the RE part of the FIRE, I just want to be FI. Our end goal might differ a bit here. :)

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Re: Journal of MDFIRE2024 - Progress in July

Post by MDFIRE2024 » Tue Aug 01, 2017 11:45 pm

Hi ERE-folks, it's time for the progress in July. :-) It was a great month overall. I had three weeks off work and got a feeling for Early Retirement, because I treated it as a "simulation". I stayed at home and didn't travel. There were many Lessons Learned. One I'd like to share with you.
For the last several months I had worked on a project and I started to work very early each day. Therefore I used an alarm clock, as usual when working, right. In my vacation I felt how good it is for my health and well-being to get up without an alarm clock. Therefore I thought about it how I could integrate that into my usual work days. Due to flexible working hours and due to the fact, that I get up usually at 6AM, I'm trying to avoid any alarm clock. It's a great feeling so far, getting up without an alarm clock also during the normal business week days. For example today: I got up at 5:45AM just by waking up without an alarm clock, made some green tea, checked the new ERE-posts and now I'm writing my journal.
The thought behind that is, that I want to build my favourite lifestyle right now. I don't want to wait till FIRE. And an alarm clock is a issues for many people. At least many RE people write that it is a great relief not having to get up by an alarm clock. Maybe you have made similiar experience? You are welcome to share your story about an alarm clock with me. :-)

Beside that I was able to save a big portion of my income. Last time I showed some chart, which shows my progress beginning in December 2015 till now. If you like to see it, here is the hyperlink: viewtopic.php?f=9&t=9051#p147562

This month I post just numbers of my KPI's, which are
  • Savings Rate --> 84% (12 month rolling average)
  • Withdrawal Rate --> 9,6% (12 month rolling average) with Margin of Safety included
  • %FI --> 39% = accumulated FI-money compared to FI-goal
  • Time to MDFIRE2024 = 89 months (just counting down months from today till end of year 2024

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onewayfamily
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Re: Journal of MDFIRE2024

Post by onewayfamily » Fri Aug 11, 2017 12:44 pm

Great work mate!
I love waking up without an alarm clock (it's been a year so I suppose I take it for granted now unfortunately). I wish I could wake up that early though - to get up before around 7am I would still need to use an alarm clock.

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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Sat Aug 12, 2017 1:20 am

onewayfamily wrote:
Fri Aug 11, 2017 12:44 pm
Great work mate!
Thank you. Really appreciate it.

I have read "Chop Wood and Carry Water", as I wrote before. One chapter was about the awareness of success and learning.
It is about being aware of small improvements and successes. The book suggests to start writing a daily journal about it.
Therefore I have started two weeks before a daily journal. Since then I write daily a DinA4 paper with success moments, continual improvement ideas, lessons learned and gratitude. I write it with my right hand although I am left-handed. I must say that I really do like this structured daily journal writing for myself. I have discovered also, that I do unconsciously the continual improvement ideas within the next days. That daily journaling is great. I do it in the evening so I can review my day. It has positive effects on my awareness. I can see, because I write about it, that I do make small improvements everyday. It is based on the principle "Chop Wood and Carry Water" each and every day. Great experience and I don't want to miss it anymore.

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Viktor K
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Re: Journal of MDFIRE2024

Post by Viktor K » Sat Aug 12, 2017 3:03 am

A daily journal is an interesting idea. I track my expenses in a little notepad each day, I might try to write a brief note or two at the bottom of the page each day. Lately, I have been writing my monthly updates in advance, adding to each part, changing, rewriting, and modifying what I say as the month goes along. I've found that keeps me more focused, optimistic, and personally aware of where I'm going and what positive changes I am making. I imagine a daily journal would have a similar if not greater effect.

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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Fri Aug 18, 2017 12:19 pm

In the last few weeks I have bought some eBooks from Amazon. They are very good priced (for €uropeians) right now. I bought:
- The Meditations of Marcus Aurelius
- How to Stop Worrying and Start Living by Dale Carnegie
- You Are a Badass: How to Stop Doubting Your Greatness and Start Living an Awesome Life by Jen Sincero
- Mastery by Robert Greene
- Into the Wild by Jon Krakauer
These eBooks will give me quite some material to read through. :-)
I have started with Mastery from Robert Greene, because Jacob said that book and Antifragile and his ERE-books builds the core of the ERE philosophy. Also I startet to read it because it is a perfect match for my last read book: "Chop Wood Carry Water". I am really into processoriented development these days. Doing something every day and train your habits has a high priority these day. For instance I have the following habits and I try to do it each day:
- drink only 4 green teas a day before 12 o clock (because of the cafeine)
- do fitness and/or weigh lifting everyday
- write more than 500 words each morning
- do a structured daily journal in the evening (successes, ideas, lessons learned, gratitude)
- follow the warrior's diet (skip breakfast, start with lunch and eat dinner)
- meditate in the evening before going to bed
- read something inspirational, e.g. a book (see above)
- don't watch/consume/browse news, headlines, ...
- and many more

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Re: Journal of MDFIRE2024

Post by TomBombadil » Sun Aug 27, 2017 4:04 pm

Concerning your list of books:
MDFIRE2024 wrote:
Fri Aug 18, 2017 12:19 pm
In the last few weeks I have bought some eBooks from Amazon. They are very good priced (for €uropeians) right now. I bought:
- The Meditations of Marcus Aurelius
- ...
The Meditations are also available as standard ebook for free (I don't know if you paid anything)
https://standardebooks.org/ebooks/?query=aurelius
if you don't mind reading English books. But concerning your writing capabilities and time you spent here on the forums language should not be an issue. I'm currently reading Walden from standard ebooks. The Meditations are already on my reader, though I did not start yet :)

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Re: Journal of MDFIRE2024

Post by MDFIRE2024 » Mon Aug 28, 2017 1:28 pm

TomBombadil wrote:
Sun Aug 27, 2017 4:04 pm
The Meditations are also available as standard ebook for free (I don't know if you paid anything)
https://standardebooks.org/ebooks/?query=aurelius
Thank you for the hint. Luckily I haven't paid anything. Amazon does also have free ebooks for the kindle. Anyway, it is always good to know a second source, which is much ERE like. :D

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September Update

Post by MDFIRE2024 » Thu Aug 31, 2017 9:40 am

I have looked for Financial Freedom [FF] definitions.
I have found three different possible formulas to calculate the FF budget.
  • FF = ( annual needs + annual wants x 2 ) / SWR
  • FF = 40 x annual expenditure
  • FF = annual expenditure x 1,3 / SWR
Additionally I add my own definition about FF to calculate the needed budget
  • FF = annual expenditure x 2 / SWR
According to theses definitions and assuming a SWR from 3% and regarding my last 12 monthly costs
I need an average FF budget of about 440k€.

Right now my networth is 140k€ (measured by Jacob's ERE standards)

So my progress towards FF is about 32%.
I do also measure my progress towards FI, which is about 40%.

Everything regarding MDFIRE2024 is fine at the moment, but I think about changing my goal name to MDFFRE2024 :)

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