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2015 REVIEW
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This is a pretty good summary of my financial progress:
(the 2015 numbers are the entire year)
OVERALL THOUGHTS
I’m happy with how the year worked out. I started the year expecting a pretty normal year. In terms of work and money I would just wait around while the money piles up. I previously decided that I shouldn’t live in a van while I was still working. The main was I thought I needed to be based out of Saint Louis. I realized/decided that this restriction isn’t really needed, and I got inspired by some traveling myself and by things on the internet like
the Without Bound documentary (especially Randy Vining)
So I bought a cargo van and got to work converting it into sort of a small and simple RV. I’m about 70% done with the conversion. I started the conversion with a huge head of steam and worked on it a lot. I’ve slowed down in the last 4-5 months. Some of the slowdown is because I was working on getting my house ready for sale.
As I’m approaching retirement, I’ve started thinking more and more about the actual financial details (investing income, shuffling money around between different account types, health insurance, and taxes.) I have these things figured out well enough for now. The details are too complex to include in this summary. I want to make a post about it soon – both to share with you and also to help clarify and confirm things for myself. I might wait until my van and house work slows down.
At work, my engagement and motivation shifts between “uggghhhh, I am so bored with this!” and “this isn’t so bad. It’s really easy for the money, I can keep going”. Those shifts mainly have to do with how much I am traveling (traveling is better because I’m doing more interesting work) and how much “extra” stuff I have to do. I’ve been good at not getting extra stuff but there is one big thing I have to do in Q1. I already delayed it from last year and I can’t really avoid it now. The people at work don’t bother me. The work itself doesn’t bother me. Basically, I just don’t like spending my time there. That’s really not so bad. If I hated the people and work I’d be thinking really hard about quitting when I get my bonus in the spring.
I’m excited this big life transition that I’m in the middle of. Day-to-day, I have a shit-load of stuff to do so it is just a lot of van and house work right now. I’ve done a pretty good job of telling myself “don’t worry about whatever else, just finish the van and then move on to the next thing”
I’ve also made good progress in relationships this year. I dated a lot at the start of the year. I was mainly looking for a FWB who lived fairly close, wanted to have sex enough, and would want to continue a significant amount of time (not just until they found someone to be their boyfriend). That didn’t work out very well. The women I found were typically either too busy, or lived too far away for my liking, or wanted a boyfriend, or I didn’t enjoy their company enough. After I bought the van, I basically stopped dating. I was dating a little bit, mainly for social interaction. I tried out advertising the attractive parts of my uniqueness and that ended up working well. The girlfriend I’ve had matches up great on many of the big things (kids, desire for adventure, open mind, not spendy, etc.). There are some smaller issues relating to her being an ENFP and me an INTJ - mainly the introversion-extroversion and that she relies on me to initiate most “going out”.
YEARLY GOALS
I changed direction in the middle of the year and updated my goals. These were my original 2015 goals, and the results are in the right column.
When I made these goals, I was planning to buy and build the van later – in 2,017. My plans changed about a third of the way into the year.
I wasn’t working out much at all while I was doing a lot of van work. I did finally have a good run of lifting in the last two months. I’ve been home for nearly two months straight which makes it way easier to lift consistently. I also switched to doing 5x5 with 20% less weight than I could actually do and lifting a more often. I’ve also been eating more protein. It’s working really well.
I did well on my financial goals. I didn’t achieve the original goals because I spent money on the van and a on prepping the house for sale. If I hadn’t done those things, I would’ve achieved the goals for saving and for net worth (barely).
I didn’t make ant progress at all on making new friends. I was social with dating and that went well. I still have the girlfriend that I met back in July and things are still going well with her.
I looked at my goals around September and updated them to match what I’ve been doing most of the year:
Some of my actual net worth increase (after I set the new target) is from adjusting the price of my house upwards. I did this because the estimate in Zillow went up, which I’m assuming is based on local market trends. Now I just check the Zillow estimate each month and reduce 6% for realtor fees. I may not get that much. We’ll see.
I’m getting pretty close to finishing the van. The main thing I have left is installing the electrical system. I have the design work almost complete, and I have most of the parts on hand now. After that, there are just a few small things to finish up.
For 2016, I think I’m going to make goals with shorter timelines, at least for the non-financial stuff. Probably 3-6 months. A year ended up being too long this time. My goals changed. And I forgot about some of them. This year I had a good way of checking my financial progress – with charts added to my tracking file (just below). But I didn’t have a good way to trigger progress checks for the other stuff. I think I’ll try to look at them each month or at least once a quarter to check progress and consider if the goals should change.
INCOME
- TOTAL INCOME: 97,325
* From work: $86,500
* Dividends and realized Capital Gains: $8,510
* Hobby Income: $852
(Had unrealized capital loss of $4,279 from stock price drops)
(This chart doesn’t show as much income because it uses my total capital gains/loss – both realized and unrealized. There were stock price decreases for things I haven’t sold)
SPENDING
This shows all my 2,015 spending except for the van stuff:
TOTAL: $26,169
- * Normal Spending: $13,750
* Van purchase and building: $11,017
* House sale preparation: $1,402
VAN SPENDING DETAILS:
- * Purchase: $3,200
* Tax, Title, Registration, Insurance: $482
* Repairs and Maintenance: $183
* Setup – Parts and Materials: $6,805
* Tools: $310
NORMAL SPENDING DETAILS:
- * Home: $6,319
* Food: $2,785 (2,424 groceries, 361 eating out)
* Hobby/Entertainment: $2,400 (This was 3,796 spending minus 1396 sales)
* Transportation: $1,467
* Clothes/Hygiene/Other: $732
* Travel: $48
HOBBY/ENTERTAINMENT SPENDING:
- * Dating/gifts/girlfriend: $714
* Writing – pens, ink, paper: $490
* Tea: $476
* Tattoo: $300
* SSD Hard Drive: $206
* Kindle and case: $191
* Internet Service: $135
* Bicycling helmet: $94
* Booze for me: $77
* Outdoor gear: $30
* Computer speaker amp: $27
* Misc. sales (-$46)
I’m happy with the pen spending. I got a lot for that. I actually spent 1,390 and got 890 from selling pens. The tea spending was too high. When I took a lot of things to store in a family member’s basement, I took too much tea, and then I ended up buying a bunch more when it was on sale after Thanksgiving. Once I quit my job, I’ll have additional costs for cell phone/internet. Outdoor gear spending will go up while I’m out living in a van and adventuring.
HOME SPENDING DETAILS
- * Mortgage interest: $2,006
* Utilities: $1,904
* Property Tax: $1,436
* Insurance: $650
* Household goods: $322
(+Home Improvements to prepare for sale: ~$1,402)
(I don’t count my mortgage principle as spending since I’m going to sell the house soon)
INVESTING
This information is for my post-tax investing.
- * Starting balance: $102k
* Contributions: $30k
* Dividends received: $4,800 (4.0%)
* Realized Capital gains: $3,714 (3.1%)
* Total income rate: 7.1%
* Unrealized capital loss: (-$4,279) (stock price fluctuations)
I guess these results look ok to me. I messed up by buying more KWI (described in my December monthly update). But otherwise I’m happy with the stocks I’ve bought so far. Taxes will eat away a chunk of the capital gains.
I’ll have a lot of investing activity in 2,016. I expect to get about $50k from selling my house. If I work all year, that will be ~$35k to invest in post-tax accounts. Once I quit, I’ll move my 401k and pension to an IRA and decide exactly how to invest that. I may just throw most of it into something like VTI or VHDYX for the time being.
I have this chart I’ve used to see my investing performance by year. I’m not totally sure the numbers are right, but they are probably close. This includes my 401k and post-tax investing. Generally my post-tax has done better than the 401k.
What the heck happened in 2,012 and 2,013? I was using the Permanent Portfolio then. I think 2,013 was messed up because I sold out of two components of the portfolio to liquidate money for buying my house. Yikes!
FI PROGRESS
Getting up to FI has been gradual for me and there won’t be a single moment where I change from “not FI” to “FI”. My extra spending this year on the van has made it cloudy. I’ve spent extra in 2015 on what will be my house in the future. For some of my charts and, I don’t count that van spending.
I’d like to have dividends supply all of my spending and not rely on capital gains. But a huge chunk of my net worth is in my 401k where there are limited options.
Right now, I think I want to get up over $500k before I quit. I could get around $20k per year of income from that, which would be on the high end of what I expect to be spending. I may be comfortable quitting before that. My “minimum target” for quitting is $450k with my house sold, which I should have as soon as I sell my house. I’m going to get my house sold and use up all my work vacation, and then I’ll see how I feel.
I will have to answer questions such as:
- Should I work more so I can have a wider range of places I could live
- Should I work more so I could support a wife? (or girlfriend to travel with me?)
- Should I work more to have a safer withdrawal rate?
- Should I work more to have more extra money for cool stuff?
I’m hoping that the possibility of income after quitting (hobbies, entrepreneurial stuff, who knows?) will be strong enough in my head to dismiss all of these.
Net worth:
It appears likely that I’ll pass over $500k this year. If stock prices go down I may still be at $450k at the end of the year, but might actually be better positioned in the long run as I’d have more stocks.
Long-term net worth growth:
My projections from back in 2,012 have been pretty accurate. I started my ERE focus in 2,010 and reduced my spending a lot in 2,011.
Net worth in years. Once I finish the van and sell my house, that red line should shoot back up.
WR Needed: (basically the inverse of the net worth in years chart)
My actual total spending compared to 4% of total net worth:
My “normal” spending compared to 4% of net worth. This is hopefully more telling for future spending projections:
The same thing, but with a rolling spending line instead:
This chart shows my spending compared to where it came from (sort of assuming I used all my investing growth/income as spending). The dotted bar with a green outline in 2014 was not actual spending – that year my investing performance was higher than my total spending, so it was extra money. You can see that over the last three years, my investing growth/income could’ve provided all my spending money. (in this case, it’s just the “normal” spending, van not included)
This chart is similar, but showing it with theoretical income from net worth (4%). The bars are 4% of actual net worth. The dotted line was a projection I made in 2,012. This is useful for forward projections since I expect to get about 4% dividend income and use only that to fund my spending. So, this shows that for the last two years, my spending could’ve been fully funded with 4% dividend income.
This is a closer look at monthly spending vs. actual and potential dividend income. This spending does not include the van.
And one more. The return on this one includes unrealized capital gains. The spending shown is everything.
I bet it wouldn't be as bad as we imagine.
When other people think I must be really busy, I let them go on thinking so. People often think that because they see me infrequently, I must really be working like crazy. I don’t tell them that I might just be at home some of those days they don’t see me. (I work both from my office and in factories so it doesn’t appear that I’m absent from working just because I’m not somewhere)
