FI in 10 years

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Chad
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Re: FI in 10 years

Post by Chad » Fri Jun 12, 2015 6:19 am

I don't know how people live on the edge like that 55 year old guy you talked too. It has to be depressing to be that age and still not be financially established.

steveo73
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Re: FI in 10 years

Post by steveo73 » Fri Jun 12, 2015 6:51 am

Chad wrote:I don't know how people live on the edge like that 55 year old guy you talked too. It has to be depressing to be that age and still not be financially established.
They don't even seem depressed. That is what kills me. I think my house is probably worth a lot more than his house and I owe 50 grand. That 50 grand kills me. When he said he owed that much I didn't say anything.

I saw all these people lose their jobs. It could have been me. I want to be at the stage where if that happens I say hell yeah.

Chad
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Re: FI in 10 years

Post by Chad » Fri Jun 12, 2015 6:55 am

Yep, I definitely want to be able to say "hell yeah." Even right now, most of us could at least say, "oh, well", if we lost our job. For me it would just be an opportunity to do something else.

steveo73
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Re: FI in 10 years

Post by steveo73 » Fri Jun 12, 2015 1:59 pm

Chad wrote:Yep, I definitely want to be able to say "hell yeah." Even right now, most of us could at least say, "oh, well", if we lost our job. For me it would just be an opportunity to do something else.
I like a number of things about my job - I live so close to my work and I get to work from home typically one day per week. If there is some reason to work from home more than that I can. The pay is good and the work is good.

I can see though those benefits changing. I have more responsibility and I can see myself having to turn up every day. I also think my work will be relocated.

In a few years time I would welcome losing my job in this scenario. At this point I would have to get another one and it wouldn't be that bad however I can't really be bothered right now.

Still I don't get how people spend so much money.

steveo73
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Re: FI in 10 years

Post by steveo73 » Sun Aug 09, 2015 4:07 pm

I haven't posted on this for a while so I thought I'd provide an update.

A couple of points:-

1. We've had some additional car expenses recently which led us to withdraw $2 grand from our mortgage.
2. I am thinking of getting rid of the 2nd family car. I really only need it once per week to drive my son to my parents to take care of him. That though won't be required next year as he goes to school.
3. I am so sick of work. Its going to be a grind getting through the next 5 years.
4. My wife got sick of saving and wanted to spend some more money recently. We went out to a restaurant and a movie but the movie tickets were free as she won them from work. I don't have a problem with this but I think it shows how we need to have enough saved up so we aren't on a budget that is too tight for us when we retire.
5. I think despite everything listed above we are still on track towards saving about 70% of our income this year.

I'll expand on the work sucking point a bit. I am just working too hard and there is too much pressure. This leads to less exercise and more junk food and alcohol being eaten/drunk. Its just not the the lifestyle that I want to lead. The job itself is not really bad. I work with some really good people that I like and the work itself is interesting. Its just the pressure and the time spent doing stuff that I would rather not do.

steveo73
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Re: FI in 10 years

Post by steveo73 » Tue Aug 18, 2015 3:34 am

Interesting day today. My job at the moment is freaken tough. I have a tonne of pressure on me. I manage projects (1 at the moment) and a team that delivers work (about 5 projects and 10-20 staff).

I've been working too hard but I am working on managing it so that life is a little better. So last week and this week I've had long lunch breaks twice per week to go to the gym and do jiu-jitsu at lunch time. That is fantastic and getting close to how I would like to live my life when I retire.

Today at work though a number of the guys in my team got taken off one of the projects they are working on because they (some moron in management) believe that another team can do it quicker. Its not my decision and I think its shit but at the same time I think it reiterates why becoming FI is so important.

steveo73
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Re: FI in 10 years

Post by steveo73 » Sun Aug 23, 2015 4:28 pm

Another update but not a good one from my perspective.

The TV broke on the weekend and we replace it with an $1800 dollar 60 inch TV. So this year we have had a massive amount of increased expenses:-

1. Laptop (admittedly this was last year but it was really this year ad we bought it right at the end of last year) - $1000
2. Car Expenses - $2000
3. New TV $1800
4. Braces - $2500

That is a lot of extra expenses and it is killing our FI target asset level and therefore our WR.

I honestly can only see the car expense being somewhat reduced next year if I sell the 2nd family car. We don't need a TV like the one we bought and the laptop shouldn't be an ongoing expense however expenses similar to this will continue especially while the kids are in school. The braces expense may drop however that is just for child no 1. I have 2 more kids that may need braces. The youngest child is 4 turning 5 soon so his braces will be a while off however we have to budget for that expense.

Its a tough situation because although we can minimize the expenses there will be stuff that we have to buy.

I think we will still save about 70% of our income and I expect the mortgage to be gone by the end of this year or extremely close to it.

I'm really thinking about any ongoing expenses that we can drop but the only thing that I can really see is the 2nd car. We don't have cable of Netflix. We have Internet. Maybe I could get rid of one of the mobile phones and see if work could pay for my phone.

DutchGirl
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Re: FI in 10 years

Post by DutchGirl » Sun Sep 13, 2015 1:43 am

Hey Steveo,

Just reading this right now. Have you ever calculated how much the second car costs? I'm betting it costs at least 100 dollars per month (depreciation, taxes, insurance, gas, repairs). If so, then from next year onward, you would save 1200/year just by not having that second car.

The new TV was pretty expensive, I think. Hopefully this tv will provide for all of your family's TV needs for the next 15 years or so. Maybe the next tv you buy can be a $400 one instead of a $1500 one.

I think your expenses will drop in the future when the kids start leaving the house. No more braces, for example, but also less groceries to buy, etc. The mortgage will be gone, too, and perhaps you could move to a smaller house (or have a renter or two to bring in extra income).

So in short, don't be too pessimistic :-) . No matter the expenses, your savings rate is still impressive, too.

How many weeks of holiday do you have? And are you actually using them? Being sick of work could be a sign that you need some time off. I hope you're taking that time off now and then, as I believe it's good for your mental health. It might help you care a bit less about work, and thus it might help you let it affect you (your health, your mood) less.

steveo73
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Re: FI in 10 years

Post by steveo73 » Sun Sep 13, 2015 4:57 am

Hi Dutch Girl.

I think getting rid of the car even if I only drive it once per week will save about $100/month as well. It is an easy thing to cut. I'm not really pessimistic regarding where we are at but it really sucks when we are basically frugal but this year we haven't done as well as last year. If we keep the TV for a long time though as you state it will probably be fine. I'm more concerned about on-going costs like the car.

I'd add that I am a big fan of cutting expenses. I think it has the biggest impact of getting to FI. As we have spend too much this year out FI number at 4% will be over 1 million dollars. I honestly think that this is crazy and I don't want to worry about hitting that number.

I have 4 weeks of holiday per year and this is my last week at work and then 2 weeks off. The problem is that I am on the project from hell and I will have to work some of the time over that period. I honestly have a decent job but the pressure is full on. I will FIRE as soon as I can with some degree of buffer. That might though be at a 5% WR with some additional years of part time work or working in a crappy job or saved up holidays. I am close to having 6 months long service leave accumulated now. By the time I retire this should easily occur. 6 months full time leave will be 12 months 1/2 pay. 1/2 pay for myself will still mean that we can save money.

So the areas to improve next year will be interesting. I can see a couple of areas:-

1. Sell the second car.
2. Save more into our emergency or cash fund. I am not really a big fan of this but I think having a buffer is just smart as things break and expenses come up. Having spare money enables these hiccups not too bother us. I don't consider this money as part of my savings. I view it as expenses but at least its a buffer with regards to costs that come up when you don't expect them.
3. Next year we should be investing money. This should be the start of additional money coming to us in the form of dividends. So less expenses due to no mortgage plus income from a source outside of our jobs.

DutchGirl
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Re: FI in 10 years

Post by DutchGirl » Sun Sep 13, 2015 1:11 pm

Well, yes, those extra expenses are going to happen now and then, right? This laptop will need to be replaced, well, five years from now or so. The family car will also need to be repaired, and replaced, at some point in time. Same is true for the fridge, and the water heater, and the furniture. I'm not completely sure how to handle those expenses (save a certain amount every year? Just "suck it up" when they happen?), but yes, things run out, bluescreen, break, get lost, malfunction, etc...

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Sep 14, 2015 5:27 am

Its hard to know what to do with regards to that cash fund. Psychologically I don't like taking money from my important accounts such as the mortgage and going forward my FIRE assets. I think its better to have a cash fund just to cater for these expenses just because spending from the cash account feels to me like spending that we have saved for.

I just checked my wife and mine company (where we work) share accounts. The balance is 45k. I'm expecting about a 5% return on that money over the course of the year in dividends. Its nice to get that just from working there for a while.

Work was enjoyable today but geez I still can't wait until I am FI.

Last week I was told that my job was on the line because of the project that I am working on. The funny thing is that I don't know if I would actually prefer to get sacked and get a pay out. I suppose I don't really want that to happen because I figure I can become FI relatively soon staying at my job. It'd be great to get retrenched within a couple of years time though. It'd be like a pay out prior to FI.

Still 4 more days and then I get 10 days of relative freedom.

GandK
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Re: FI in 10 years

Post by GandK » Mon Sep 14, 2015 6:38 am

steveo73 wrote:Still 4 more days and then I get 10 days of relative freedom.
What are you going to do with your time off? Do you guys have anything fun planned?

El Duderino
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FI

Post by El Duderino » Mon Sep 14, 2015 9:38 am

Hey Steveo, what's your estimated date for paying off your mortgage?

I know what you mean about not understanding how others spend so much or don't have as much saved. I recall how I lived before I really became aware that FI was possible and the steps necessary to get there. It wasn't heaps of time, but from about 23-26, spending considerably more than I saved was normal. It was expected to have a newer car with low miles and covet more/better stuff than I currently possessed. It's been a slow process and is certainly not complete for all types of stuff (most notably anything to do with my car or clothing), but my thinking around what kind of things I'd rather own is completely changed, much more focussed on assets and quality, durable items while viewing anything that doesn't have a return and in fact often depreciates as a liability. For example, your new TV and computer, while offering entertainment and use have now become a bit of a liability because when they fail, and planned obsolescence means that will happen in a predictable way, you'll need to replace them with something comparable, and what is comparable in 2020 or 2025 if they last that long will likely cost a lot more than $1800.

Keep up with the BJJ!!! Without knowing your level, I'd say that 1-2 times a week is on the low side if you're looking to improve at all.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Sep 14, 2015 4:48 pm

GandK wrote:
steveo73 wrote:Still 4 more days and then I get 10 days of relative freedom.
What are you going to do with your time off? Do you guys have anything fun planned?
We will be predominantly staying at home. We have things planned and we will spend some money but there is not going to be anything extravagant. A hike, some bike rides, a couple of trips to some restaurants and a couple of trips to the local parks for a BBQ.

steveo73
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Re: FI

Post by steveo73 » Mon Sep 14, 2015 4:54 pm

El Duderino wrote:Hey Steveo, what's your estimated date for paying off your mortgage?
Hopefully the end of this year. I'm hopeful it will be a new years eve present.
El Duderino wrote:For example, your new TV and computer, while offering entertainment and use have now become a bit of a liability because when they fail, and planned obsolescence means that will happen in a predictable way, you'll need to replace them with something comparable, and what is comparable in 2020 or 2025 if they last that long will likely cost a lot more than $1800.
I'm not worried about the computer because that is for my daughter. These costs will stop. We are not going to support the kids with those types of expenses forever. She is 14 now. I think worst case we will buy her one more PC. I make my own PC's and use Linux. They work great, last for longer than any brand name PC that I have had and cost less to keep going. Plus it is always up to date.

My wife doesn't want to get a TV that size again however I have no issues with it assuming that we stay living in the same house. If I wanted to really travel I would like to have a lot less stuff. Its a big expense but if it lasts say 10 years then I think its fine.
El Duderino wrote:Keep up with the BJJ!!! Without knowing your level, I'd say that 1-2 times a week is on the low side if you're looking to improve at all.
I've been training 3 times per week for the last month. I would love to up that to 5 times a week. The real problem is that work is so busy I don't go at night any more. In stating that I do go twice during my lunch breaks so work isn't all bad.

Its a little out of my control however if I stay working in the same location that I am now and I somehow get my projects to be more manageable I will try to up my time training to 5 times per week. That will kill my body though. BJJ is a tough sport.

steveo73
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Re: FI in 10 years

Post by steveo73 » Tue Sep 15, 2015 7:05 am

Just got my bonus for this year - $8000 after tax. My wife got $2500. Sounds great expect that last year I got $14,600 for myself. This is a hard hit to handle and is another reminder of why I want to FIRE. Its not like last year was so much better than this year. I suppose that is the way it goes though.

Our savings rate will still be 70% - technically its 69.159%. The mortgage pay out date is now 06/01/2016. Basically I feel that we are slipping a bit and truthfully it sucks. We will also save less than $100k this year - close to it at $96k.

There isn't really that much I can do other than to sell the second car. I think that will only make a small difference however I think its worth it. I honestly can't see many areas to cut the budget any further. I ride my bike basically everywhere. I never buy my lunch. The kids aren't relatively spoiled. My wife cuts her own hair. Of course I do as well.

Lastly this is based on no more expenses this year. If something comes up then it will be worse than what it is.

steveo73
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Re: FI in 10 years

Post by steveo73 » Tue Sep 15, 2015 7:11 am

steveo73 wrote:I posted these monetary goals on the MMM forum but I'll put them here because this forum suits me better. Its easier to read everything.

End of 2015
1. No debt which consists solely of the mortgage (we might not make this but we will be close)
2. Super - $200k. This is assets that we can't use until we are about 65. We already have this amount but I couldn't be bothered to create a target here.
End of 2016
1. $100k in non-super assets. This will be really tough.
End of 2017
1. $200k in non-super assets. Again tough.
End of 2018
1. $300k in non-super assets. Again tough.
End of 2019
1. $400k in non-super assets. Again tough.
2. Super say $300k.

It'll be interesting how this goes. My wife wants to quit work when we get to $500k in non-super assets. I figure at that point we will definitely be FI. I'm also tracking to get to $1 million in assets excluding our house. That to me would be really good.

The problem is that I have 2 goals that don't work together - the goal to retire as quickly as possible and the goal to get to about 3% WR (I think about $1mill).
I'm just revisiting these goals. Super is currently at $246k and the mortgage will still be here at the end of the year however it should be paid off by 6th January 2016 which is pretty close.

I might change the non-super assets to a higher target for next year but I suppose it doesn't really matter. The only reason I state this is that I figured out that we have $46k of company shares at the moment so we should easily make the 2016 goal.

Going on these figures it looks more likely to retire at the end of 2020 and I can't see that meaning that we have $1 million outside our house. It still feels like a long way off.

After writing this I should add that our house must be worth over $1mill. I love where I live and its required at the moment but geez that is a lot to put into your house. If doesn't feel to me like having the same amount of money outside of your house.

steveo73
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Re: FI in 10 years

Post by steveo73 » Sat Sep 26, 2015 3:40 pm

I'm on holidays now and it feels great. I've still had to log on a couple of times for work and its made me realize how much it sucks however at the same time I'm now thinking of moving towards FI slower but with more time available now.

My work basically allows me to have 8 weeks leave per year which entails a lower salary however I am thinking of doing that for 3 years and then moving to part time work for another couple of years (maybe 5). This would give me more time off now rather than getting burnt out. I am burnt out now and the time off is making me realise that.

The only issue is that my wife is talking about working less as well. Our youngest starts school next year and my wife is going to try and get more flexible work arrangements to see him off to school and maybe getting home from school.

So I will see what happens over the next couple of months and then make a call on what to do. I like this approach though as it would give me more time out now.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Oct 26, 2015 4:50 am

A couple of non ERE related points:-

1. Today my youngest son turned 5. He starts school next year. Time passes so quickly in this regards.
2. I was sure I was getting the sack at work. The project that I have been on has been horrendously bad. I think that I won't get the sack now however I can see my work changing locations. At the moment its a 5 minute bike ride and I am going to the gym at lunch time twice per week. I've also cut down on how long I've been working and I think I'm back to a 20 hour work week despite being paid for a 40 hour work week. I reckon they owe that too me after the past year of hell. I think the new work location will be a 45 minutes to 1 hour commute both ways and it is going to suck.

Anyway next year will be interesting. My wife wants to see my youngest son more and possibly work less. I want to keep working full time for another 5 years and then assess where we are at.

El Duderino
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Post by El Duderino » Mon Oct 26, 2015 12:01 pm

That is a real bummer about having to go from biking 5 minutes to a longer drive. Substantially greater costs (on several levels) with that arrangement. Any alternatives?

If your son is starting school next year, would your wife be able to pick up a job in education or something where she is able to work similar hours to those he would be away?

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