Jiimmy's Journal

[Jiimmy]

Hello, and welcome to my journal!

This may evolve over time, but for now I will be regularly sharing some of my favorite bits and pieces of my personal finance spreadsheet.


Exhibit A: Spending



I've been tracking my spending for several years and it has seemed to stabalize around $17k. In recent years, more than half of my spending has gone towards rent. If I could eliminate that category, or significantly reduce it, then FI would be right around the corner. Who knows, maybe I'll give van/rv life a try, or purchase/build a simple dwelling in a low cost area. Time will tell.


Exhibit B: Saving



I've only been tracking this for a few years. I count my pension contributions because they are refundable when I quit. This particular pension is wonderful if you spend 30+ years contributing to it, otherwise it's pretty awful. Once I quit, I plan to cash this out and invest it on my own.


Exhibit C: Net Worth



Significant progress in the last few years!


Exhibit D: FI Progress



Closing the distance!


Exhibit E: Investments



This is extremely boring, I know. Very Boglehead-ish. Gotta say, I love the 457(b) and refundable pension! I can withdrawal the 457(b) penalty free at any age, as soon as I leave my job. If you haven't guessed yet, I'm a government employee. The refundable pension is also great, and since I'm covered by a pension, I'm not subject to Social Security withholdings. Yes, this will reduce my SS benefit in old age, so it's a trade off, but I'm starting to think government work is really compatible with ERE/FIRE.


Exhibit F: Lifetime Earnings



I like seeing the ratio creep upwards. I wonder if my net worth will ever exceed my lifetime gross earned income. Maybe!

[Cheepnis]

Welcome Jimmy! Those are some nice looking charts. They're almost giving me enough motivation to whip a few up myself since I've always been too lazy to.

I like the NW/Lifetime Earnings ratio, that's a fun little number to track that I haven't seen used much, if at all. Would you care to elaborate on the gambling column? Looks like on the whole you did pretty well for yourself there, well enough to quite your old job even?

[Jiimmy]

Would you care to elaborate on the gambling column? Looks like on the whole you did pretty well for yourself there, well enough to quite your old job even?

Hi Cheepnis! Sure!

The gambling earnings were almost entirely from poker (there are some random things mixed into those figures too, like a little sports betting, yahtzee, and gin-rummy, but those were more or less break-even endeavors).

Roughly ~90k of the profits came from online poker with ~25k coming from casino or home games. 2014 and 2015 were the years I put in the most effort. I logged a few million hands online at the low and mid stakes and did alright. I lost interest soon after (and the games got tougher!) so I returned to a normal 9-5. I tend to get bored after a few years of doing the same thing, so I may trade in the 9-5 soon for the next adventure.

[Jiimmy]

Small bit of good news this week:

My internet provider raised their rates again, which seems to happen every year. I called and politely asked if they could give me a better price. Surprisingly they did! My bill went from $79.99/mo to $59.99/mo for the next 12 months.

Although I may ditch the internet service all together soon. A family member of mine has been using Visible for a while now and is happy with it. Unlimited data on Verizon's network and no restrictions on broadcasting a hotspot. It includes unlimited text and talk for $40/mo. I'm struggling to see the downside, there must be a catch somewhere.

[C40]

That's a great looking FI Progress chart. Nice work

[plantingtheseed]

Looks great. Have you looked into your pension and SS a little?

[Jiimmy]

@plantingtheseed

Good questions!

I did pay into SS previously (10-ish years, low/moderate income) so there will be a small lifetime benefit from that in the future even if I never pay into it again.

Regarding the pension, it works like this:

(a) Start with your average monthly income for your highest 36 consecutive months of salary. To even qualify for the pension, I'd have to stay another 2 years. Let's say I leave my job right at that point (I'm not sure I'll make it that long to be honest). In 2 years my average monthly income for this calculation will probably be around $5,000.

(b) Next, multiply your total service years by 2.25. So, for this example, 5 years x 2.25 = 11.25. This is the percentage of your average monthly income that you'll receive for life, beginning at retirement age.

(c) So, $5,000 x 11.25% = $562.50/mo = $6,750/yr

I would be eligible for that benefit when I turn 65, in 2053. The most important piece here might be the fact that the benefit is not adjusted with a COLA until AFTER you start receiving benefits, so the $6,750 figure represents 2053 dollars. Over a 31 year period (quitting at age 34, waiting until 65 to collect), inflation will eat a large chunk of that benefit. IIRC, I believe the average cumulative inflation rate for a 30 year period is roughly 100%. So, maybe the $6,750 benefit in 2053 would really only be worth ~$3,500 in today's dollars.

One other important tidbit: If I cash out my contributions I only get the exact number of dollars that I put in. Unlike other pensions, my contributions do not grow, not even with inflation, and I have no claim to any of the employer's matching contributions.

Ok, so let's check out the alternative, cashing out the pension and investing it on my own.

In 2 years the cash balance that I can withdrawal will be around $45,000. Assuming a conservative 4% real return, after 31 years it will grow to $151,791 (in today's dollars). The same $3,500 benefit as above would only equate to a 2.3% withdrawal rate. I could self-administer my pension, have access to the entire principal, and most likely have an ever growing pile of money.

It seems pretty clear which is the better option. Of course the cash-out method assumes I'm a responsible person that won't buy a new car with it the moment it hits my bank account. I think I'm up to the challenge!

[Jiimmy]

I've been doing some decluttering during the last week. I really enjoy doing this. I like it so much that I wish I had more stuff to declutter, but I've been pretty minimal for a few years so there's not much of a mess to clean up.

Here are the things I got rid of:

1) Golf Ball Collection. The office building I worked at (pre-covid) was next to a golf course and a hiking trail. Every day on my lunch break I would hike and collect golf balls. I would throw most of them back over the fence onto the golf course, but I would bring home the good/expensive ones. I had a unique piece of furniture/shelving in my dining room where I would display them all. It looked sort of cool. I would make patterns with the colorful golf balls, and it was kind of fun. Visitors would always make nice comments about it. Anyway, I decided to get rid of them all. I don't really golf anymore, and it's difficult to sell used golf balls, so I gave them away. I separated out the best ones (~200 Titleist ProV1s) and gave them to the local high school. The athletic director said boys and girls golf is definitely still happening during COVID, given it's outdoors and distanced, and they would make good use of the golf balls. The rest of the golf balls I gave away on Craigslist. I also gave away the display case.

2) Clothing. My closet is far from overflowing, but I did give away about 10% of my wardrobe that I didn't use. These went to the local thrift store.

3) Kitchen stuff. Extra ice cube tray, coffee mugs, utensils. Dropped off at thrift store. Now I pretty much have two of everything. I even had an extra set of everything specifically for camping (basically this: https://www.amazon.com/Stansport-Enamel ... ast_sto_dp). I merged this set with my other stuff and now I have just enough for me and a friend. If there's a bigger party some day I'll figure it out. Maybe a bring-your-own-plate-and-fork-and-cup party.

4) Bike stuff, dropped off at thrift store. Extra seat (upgraded to a Brooks!) and extra lock.

Here are the things I still need to decide on:

1) Golf Clubs. Like I said, I don't really golf anymore. It's been two years. And all the equipment is thrifted, I only have ~$50 into it. For some reason I'm having trouble getting rid of it. I'm not sure why. I could always re-thrift a set at any time if I felt like golfing for a season.

2) Bed. I built a custom bed frame for a twin extra long mattress. I love the look of it, but I've been sleeping on my camping cot for several weeks now and I prefer the cot to the bed. Again, I'm having trouble parting with this for some reason. Why am I attached to a bed? It doesn't make sense.

3) Computers. I was into single board computers for a while (Raspberry Pi, for example). I had like 30 of them at one point. They were all running 24/7 contributing to volunteer computing projects, like World Community Grid, for example. I'm now down to a single stack of 8 Raspberry Pis plus a HP Z620 workstation (plus a laptop and a phone for personal use). I go back and forth on getting rid of these, and can't make up my mind. I'm less interested in them than ever before.

I love going through my things, processing my feelings, and letting them go. It's therapeutic in some way.

[Jiimmy]

Well, 2021 is off to a pretty typical start, money-wise.

After Tax Income: $4.8k (includes a $600 government stimulus check!)
Spending $1.3k

Here's a look at spending:



My investments wound up losing just a little bit this month, so the NW increased by $3.2k, from $165.5k to $168.7k.

Income will fall to around $4k for the foreseeable future as our one day per month furloughs kick in at work.

Just for fun, here's a deeper dive into my (pre-tax) poker income over the years:



I can't believe I've been tracking this since 2003! Lately (2020 forward) I've been attempting to build up a bankroll for free, by playing online freerolls. If you do well you can win a few cents or maybe a dollar if you're lucky, then from there you can start playing the lowest stakes on the site. Hence the $0.03 profit over 62 hours in 2020. This makes no sense from an hourly wage perspective, but it's an enjoyable challenge.

I did end up getting rid of those dusty golf clubs. Still holding on to the computers and the bed for now.

[tdurtsch]

Those spreadsheet dashboards are so slick! I particularly like the graph of rolling spending vs. various SWR. I think I'll try and implement that myself.

Do you also store all your raw data points in the same spreadsheet? I've been having trouble figuring out how to manage all this data in an organized way that I could use for graphs & pivot tables. Currently I do a bunch of manual entry and hand-jamming at the end of every month. Got any tips?

[Jiimmy]

@tdurtsch

Thank you! The rolling spending vs withdrawal rates is my favorite by far. It shows your progress over time in a simple manner and it also helps to underscore how powerful reductions in spending can be to your FI progress.

All my data is in a single file. There are around 20 sheets/tabs within the one file, and many of them are linked together. I have a few places where I dump in data manually, and then most of the charts and tables populate automatically. It's sort of become a minor hobby of mine. I usually spend an hour on Saturday mornings, over tea and toast, playing with the data in different ways to see what kinds of cool things I can come up with. I mess with the formulas, try to automate more of it, etc.. Of course, none of this is actually necessary to achieve FI, but for me it's fun.

There's nothing too advanced going on, but I do like using the IF function. For example:

[1] Many times I want a cell to appear blank until another cell is populated. For example, I have a running total formula in the sheet where I keep track of the ins and outs of my checking account. The running total formula in Col D looks like this:



It's saying "if col C is blank, make col D blank, otherwise report the running total".

[2] I also use this formula to keep a cell blank until a certain date. For example, my end of year "NW Needed for FI" formula looks like this:



The trick here is that spreadsheets read dates as if they're just a number (IIRC Jan 1st, 1900 is day number one, Jan 2nd, 1900 is day number two, and so on). You can enter a date into the sheet and then convert the date to a number format to find the number that relates to that specific date. In the example above, day number 44196 is December 31st 2020.

[Zanka]

Nice charts!
What would you say was the best and worst with being a professional pokerplayer?

[Jiimmy]

@Zanka

Thanks!

Some of these may not apply to you, but for me personally:

Pros:
- Flexibility to set your own hours
- Work from home (if you play online)
- Mentally stimulating
- Relationships (I've made a lot of good friends through poker)
- No boss, no customers, no stakeholders to satisfy
- Possibility of windfall-level wins if you play the larger tournaments.

Cons:
- Self employment taxes (paying both sides of FICA), more complicated tax returns, expense/write-off tracking
- No health insurance, paid time off, retirement match, pension
- Wage ceiling (at least for me)
- Zero sum game. There's a winner and a loser. It's not a mutually beneficial activity. I felt like what I was doing was pointless at times. You are not producing a good or service. A common opinion that I agree with: "if you can make a living playing poker then you're smart enough to be doing something more important that will probably pay better".
- The inherent randomness and resulting downswings can be tough to deal with. I had several break-even stretches lasting 70k+ hands.
- Unhealthy environment if you play in a casino (smoke, angry people, etc). I've been threatened a few times.
- Unsupportive family. They think you're a degenerate gambler.

[Western Red Cedar]

@Jiimmy - Very interesting hearing your thought on the pension, ERE, and working in the public sector. I'm in a similar position (457b, well-funded pension), but I'm currently contributing to social security. I don't often find others in a similar situation, but have seen a few blog posts or podcasts from teachers.

I looked at my W2 this morning and it looks like I'm contributing over 42% of my gross income to those vehicles. I'm pretty happy doing so because of the flexibility that the 457b offers. The expense ratios are also really low in my plan (5 basis points for a large cap index, 13 points for small cap index).

I'm not personally planning on cashing out my pension as I like it as a backstop, along with SS, for other investments. It also makes me much less concerned about the 4% rule. My calculation is based on 5 highest years (or 60 monthly service credits), which means that every extra month I'm working replaces a salary that is 30-40% lower. I ran some simulations a few months ago and I realized that the pension calculations really begin jumping up the longer you stay in your career. Another clever facet of the golden handcuffs.

Anyway - keep up the good work. Your chart game is impressive.

[Jiimmy]

@Western Red Cedar

Thanks for the comment!

I'm proud of my data, but at times I feel like I'm being a little obsessive with all of this tracking.

It's been a sloooww day at work today, so one of the things I was able to do was to read through all seven pages of your journal. It was very enjoyable. We have a lot of similar interests (backpacking, cooking, slow travel, Spanish).

I especially like your idea about quitting the 9-5 prior to hitting 4%. My plan doesn't consist of hitting my number and never earning money again. Instead, my version of FIRE might look more like Financial Independence Recreational Employment. I have 10+ years of expenses saved and a level of spending that could be covered pretty easily with part time/seasonal/random/fun employment. Why spend another day at an uninspiring job? To be fair, I've had it pretty good since COVID came along -- I work from home and have decent coworkers. Maybe when they force me back to the cube farm I'll just turn in my laptop at that point.

[Western Red Cedar]

@Jiimmy

Glad you enjoyed the journal. I always love finding new journals here and binge reading them when I have some spare time. ERE is unique in that people are pursuing all kinds of different lifestyles and strategies here. Much more interesting than the work, save, retire paradigm that is common elsewhere.

One of the nice things about setting up some spread sheets early in your FI journey is that they can tell a really meaningful story after multiple years of tracking. My spreadsheet game is pretty weak, and sometimes I wished I developed a better tracking system when I started pursuing FI about 5-6 years ago. @C40's journal is a good example of this.

I like your "Financial Independence Recreational Employment" alteration. It's got a much nicer ring than Lean FIRE or Barista Fire. There are lots of great discussions about Semi ERE around the forum. I think that approach can really build on the web of goals and potentially lead to a bit more balanced life.

[Douglas]

dude you should be proud of your spreadsheets and graphs. Nice data sets going back years. Looking at the long term time trends make it a casebook study for fast financial independence.

[ItsALongStory]

I pop onto ERE every once in a while because while I could not make it on the frugal budgets most obtain here, I find that mentally we're on very much the same wave length. I too am a bit of an excel/data nerd but I lack the structure to keep track of it all. My wife isn't interested in it either which makes it less motivating.

My past also included some poker but I didn't make anywhere near as much from it as you did. I did combine it with full time employment at the time so I guess the situation isn't 100% comparable. I genuinely feel that learning about the probabilities and dealing with a significant luck factor has helped me deal with market corrections in a more objective way vs getting emotional about it.

My wife and I just (September 2020) left Nevada to slow travel throughout Europe and while we are stuck in lockdown we have absolutely no regrets. I'm not FIRE in the traditional sense but am approaching it also as 'open to recreational employment'.

Keep figuring out what you want and take the plunge, it's definitely worth it.

[Jiimmy]

@Douglas

Thanks for the support! I agree it's really cool to have access to this many years of my personal finance data. Only ~5% of the time do I feel like I'm taking myself too seriously and over-complicating things.

I've noticed a side benefit of tracking my spending so closely: it helps me to remember what I was doing and what my priorities were in previous years. I think I would forget these details of my past if I didn't have this data.

For example:

I see my low spending in 2016 and I think "Oh yeah, that was the year I lived with my brother and helped him remodel a house".

And then I see the higher spending in 2013/14/15 and I think "Oh yeah, the Transit category was high because I did a lot of international traveling, and my Consumables/Entertainment/Misc category was high due to my borderline-problem-drinking phase, going out several times a week, etc."

[Jiimmy]

I genuinely feel that learning about the probabilities and dealing with a significant luck factor has helped me deal with market corrections in a more objective way vs getting emotional about it.

I completely agree. Poker gives you a crash course in understanding and dealing with probability/randomness/variance. As a beginner every pot was an emotional rollercoaster, but soon I felt like a Zen master, e.g. "single sessions don't matter, single months don't matter, single years don't matter, my entire life is one session and I'm way up".

My wife and I just (September 2020) left Nevada to slow travel throughout Europe and while we are stuck in lockdown we have absolutely no regrets. I'm not FIRE in the traditional sense but am approaching it also as 'open to recreational employment'.

Keep figuring out what you want and take the plunge, it's definitely worth it.

Wow, that's awesome! It sounds like we do have a lot in common. I'm itching for a change, and have several ideas about what's next. One thing I've been telling myself is "just sit tight until COVID goes away, then figure out the next move". But I don't think that's a good way to look at it. COVID shouldn't be part of the equation. Regardless of what I'm doing or where I'm living COVID will be there, like it is now. I hadn't realized it before typing this, but I've let the pandemic add a lot of anxiety and fear into my life.