the dude's diary

[steveo73]

Dude - you are doing great. You can't be far off FIRE assuming you choose to do it as soon as you get your WR down a little further.

[El Duderino]

Dude - you are doing great. You can't be far off FIRE assuming you choose to do it as soon as you get your WR down a little further.

Cheers buddy! I'm working on that WR in January, big time.

[El Duderino]

This year, last year
2016, which will be a year of tremendous change, is going to zoom by. I'm already two weeks in and I haven't even had a chance to set any resolutions let alone break them. I will travel a fair amount for work in Q1. That will help to speed the time by and the pace of things on the job should also guarantee that I'm really ready to leave when I push the button. No further word on the job offer, though it's still floating out there, somewhere. I did find out that someone I confided in at work about my considering taking an extended leave of absence, aka FIRE, mentioned it to my boss, so it's kind of awkward that she hasn't asked me about it yet. With the amount of gossip and deceit that courses through these corridors, I'm not that bothered about it.

Asset Fluctuations
All of the assets in the portfolio declined yet again this cycle, as the markets did a dip. What gets my knickers in a twist is that the pound to dollar exchange rate is 1.42 just today so I can't take advantage of the prices in securities, and furthermore, I'm 10K behind my savings goal for 2015 still. You can actually see this in my charts where current account balance, the most liquid of my assets, is fairly fat. The dude's got some dry powder, should the opportunity arise.

The Notorious Spreadsheet
I keep track of everything financial and a few other non-financial things in a spreadsheet that I've maintained since the early naughties, aka the dawning of my financial awareness. It's development has been a big part of my learning and it's increasingly sophisticated features, though still quite crude from what pro-users of Excel can do, is closely correlated to the complexity of my thinking about how I manage my money. Late last year I sort of broke the spreadsheet by doing something I still don't understand completely with groups. The size was increased by a hundred Mb or so which made it really clunky. This year I've ported over most of the data and am going to continue my kaizen approach to micromanaging the numbers, but the graphs will have a slightly different look, starting from now.

--Mid-Jan '16 Assets: $ 771,681
Breakdown:


--December Spending: $ 4,811
Breakdown:

[El Duderino]

It's been a wild ride this past month. For reasons of pure busy-ness, I skipped the update at the start of this month, despite being excited about completing my fiscal diet in January, which netted me my lowest SWR since I started tracking it. Kind of a Pyrrhic victory though because it just highlighted the fact that I spend way too much on housing versus other expenses and get rather grumpy when asked to limit spending, even when adhering to my own diet. Turns out, cinching the belt a bit makes me a very un-cool dude. Completely expected results from the permanent income hypothesis, but interesting to witness even so.

Work has picked up the pace quite a bit--to much to be honest. I'm slated to travel quite a lot over the next month; not something I really enjoying doing, but hey, if it gets me out of the office for a while, that's not all bad then. Still very much committed to kicking ass on the job this year as part of my swan song as I want to look back on this last year with no regrets.

--Mid-Feb '16 Assets: $ 761K; down another 10K over the past month
Breakdown:


--January Spending: $ 2,865, 4.1% of assets
Breakdown:

[El Duderino]

Another month, another skipped update. The past four weeks have gone by fast.

During my annual performance review a few weeks ago, I told my boss that I would leave at the end of this year. He and another boss have decided that rather than have me leave, they'll create a different, but similar job that I can do from a location yet to be decided, starting in July. This is nice because it will greatly facilitate my relocation back to the US. It does mean working for a bit longer, since I would want to be in that role for no less than a year, but I'm cool with the additional safety net it will provide. Seems like a good trade-off at this point and hey, the whole thing could fall apart tomorrow so why sweat it?

--Mid-March '16 Assets: $ 821K; up 60K (thanks Mr. Market )
Breakdown:


--February Spending: $ 3,765 or 5.8% of 01-Feb's invested assets
Breakdown:

[El Duderino]

A few weeks ago, I rescued an abused and abandoned mountain bike and quickly set about putting it back into service. It's been very educational as I know next to nothing (Jon Snow) about bicycles. So far, the replacement parts list includes a rear wheel, two tires and tubes, rear cassette, chainset, chain, saddle, grips, brake pads, cable inners and outers, and bottom bracket. I definitely need new front forks and may require derailleurs and hanger too. In the end, it may have been easier to purchase a new bike to start with, but where's the fun in that?

Finished reading A Random Walk Down Wall Street recently and started in on The Millionaire Next Door. Malkiel's Random Walk book was interesting in how he presented so many theories of playing the market in a basic, understandable way, but ultimately the takeaway was bland. Stanley's Millionaire Next Door was a real page-turner, filled with interesting stats and focus group findings that further reinforced that the primary difference between rich and poor is how they view money, but unfortunately there was a problem with my digital copy so I couldn't follow very far into the book and doubt I'll pick it up unless I get a copy at a bargain. I got about as far as comparisons in behaviour between what they call PAWs and UAWs (stands for prodigious and under- accumulators of wealth). I think this type of book would appeal to people who are interested in how 'the rich set lives' and the shocking truth is that they tend to live just like the rest of the planet, spending nearly all they earn regularly without a lot to show for it. The truly wealthy few are those who are frugal to the bone (probably not a good Thorogood cover song) and conserve their earnings. Both groups spend a lot of time thinking about how to spend their money, but the PAWs chose to spend it in ways that make that money an asset and the UAWs spend it accumulating liabilities.

Going ahead with the job/location change and still lacking a lot of details, but the date has been fixed for start of Q3. We'll see if that sticks since I still haven't received a terms sheet for my new job yet, although I am currently in the process of recruiting a replacement for my current role. It's really an exercise in managing my own anxiety around losing control of working methods that I've been carefully setting up over the past 8 years.

--March Spending: $4,227 or 6.2% (of 01-Mar's invested assets on an annualized basis)
Breakdown:


--Mid-April'16 Assets: $863K; up another 40K thanks to rising stock prices
Breakdown:


I've tweaked the assets chart this month. Bedrock real estate at the bottom and then two layers of tax-deferred sludge covered by an ocean of investment assets that rise and fall with the tide. At the top layer is a warm, blue topcoat of liquid (ha, get it?) cash reserves. SMH, I probably need to get out more.

Finally, I'm a little discouraged that the £/$ exchange rate has persisted in staying low for as long as it has. I'm really hopeful that it picks up after the Brexit vote in June and then I'll convert everything around then.

[singvestor]

Very creative way to layout the stacked graph! Like it!

[theanimal]

Now if you want a fun read that tears apart what you just read in A Random Walk.. Check out The Misbehavior of Markets

[El Duderino]

Very creative way to layout the stacked graph! Like it!

Thanks, I'm going to add some ocean creatures to fill out the landscape eventually and an octopus will certainly be in the midst. They're my favorite animal.

[El Duderino]

Now if you want a fun read that tears apart what you just read in A Random Walk.. Check out The Misbehavior of Markets

Cheers, I'll check it out!

[El Duderino]

Wheels
The bike repair is finally complete. Still some tuning to do as I learn how to adjust the tension and placement of things like derailleurs and brake pads but I successfully took it out for a ride on Monday to get some coconut bites and milk. The hardest part of that whole project was getting the chainset off the bottom bracket so I could replace it with a new one. The puller tool didn't do the job at all so I had to cut the damn thing off which gave me a taste of what it might be like to jailbreak by sawing through bars with a file.


I ended up putting splash guards on it, a new saddle and some other bits like flashers and a chime plus a helmet of course. Total cost was around £280 which is silly because I could've bought a passable bike for less than that, but again, it was mostly for the learning experience.



Nutrition
After hearing for months from various acquaintances about how great they feel after going on a high-protein, low carb diet, I decided to try it out for myself. It's only been about a week and a half so far, so my dietary superiority complex has a long way to go, though I've come up with two working ideas so far. The first is that being careful with what you eat has a lot of parallels with being cost conscious and managing your money well. Both require an overall strategy and take discipline to ensure that the day to day choices are consistent and in line with the goal. The other is that regardless of the outcome or how long I stay on this diet, paying closer attention to the food one eats can't be such a bad thing, right? I'm definitely eating 'cleaner' than I normally would do, and it's not as if I was awful to begin with. The hardest things to give up so far are pastries and beer and I haven't had any of the downsides I've heard of with this diet so far like headaches or fatigue or digestion issues.

US Relocation
Flights are purchased and arrangements made with movers so it's pretty much official. 5 weeks from today will be my leaving drinks with work colleagues. The next day my possessions will be packed up and put in sea freight and the following day I'll get on a plane at Heathrow and that'll be it for my near 10 year residence in the UK.

--April Spending: $1,892 or 2.8% (of 01-Apr's invested assets on an annualized basis)
Breakdown:


--Mid-May '16 Assets: $862K, virtually no change from last month
Breakdown:

[Shire_Living]

Very much enjoying your journal, el dude. Keep us updated.

A couple of nutrition sources worth looking into: Dr McDougall, author of the 'Starch Solution' and Michael Gregor, whom runs NutritionFacts.org. Both highly recommend a plant-based, high carb diet for long-term sustained health & longevity.

[El Duderino]

Food and Nutrition
Thanks to Shire and others, I've come to decision that maybe going ultra-low carb is not so great after all. Upon reading this article on PaleoLeap.com I’ve pretty much decided to put beans and rice back on the menu for good starches and maybe even potatoes too. Still going to cut out all processed foods, breads and stuff like refined sugars but I’ll relax a bit on trying to get to a ketogenic metabolic state because I’m not really convinced that it is all that healthy after all and this little self-experiment wasn’t really about fixing something that was broken, more about improving my usual ingredients a bit and trying something new.

Mea Culpa
Just today I realized my monthly spend has been under-reported since January of this year due to not applying an exchange rate adjustment to money spent in pounds versus dollars. It’s kind of amazing it’s taken me this long to discover as it was staring me in the face the whole time. The result is that my numbers have been a fair bit worse than I’ve been thinking. Nothing to get upset about of course. I’m a big believer that, although it’s great to have good numbers to report on the old ledger, the real value is in carefully measuring and recording the figures because of the magical improvement thing that happens when you pay attention to something very closely in a non-judgmental, helpful way.

--Last month’s spending: $6,686 or 9.2% (of 01-May's invested assets on an annualized basis)
NB: Rental property expense spike was from a bi-annual property tax payment of $2700


-- Assets: $883K

[El Duderino]

6 weeks on...
Holy shit folks, it's been over 6 weeks since I've updated my journal! Lots of stuff has been done -- an international move, a holiday vacation, and lots more is in progress, most notably, the purchase of a new primary residence. More on that later. In terms of my own personal Brexit, the leaving party from work was on the 23rd, the day of the vote and, man oh man, I should have converted my UK cash over then, because now I need to wait until it recovers and who knows how long that will take.

Health and Nutrition
Still on this paleo diet and finding it a lot easier in some ways since moving to the US. You can go into any grocery store here and while there is a lot more stuff to sift through, still 98% of stuff is inedible, the availability of good ingredients is definitely improved. About the same prices on stuff, all things considered which might be surprising to some that midwest food prices are about spot on with ye old London. Need to find a place to train BJJ around here but that might just wait until I do the next move in Sep. Did a couple of crossfit days with a friend and that was nice so I may pick that up a bit more.

Mi Casa
The week of the 4th, I went to Chicagoland to look at a home that seemed like a great opportunity. Ended up making an offer on it which was accepted. Closing date is 05-Sep and I'm bringing plenty of coffee, because COFFEE IS FOR CLOSERS! It's going to be a great situation. The place is a bit of a dump but it's got two huge draws for me. First, a massive 3-car garage plus workshop for The Dreadnought to live in along with all the life support systems needed to keep it running. The second thing, and I'm sure this is going to be of more interest to the ERE types, is that it's a big old house that's been divided into 4 units, 2 of which are currently rented out that I'll inherit. So basically, I'll have finally accomplished Jacob's day 1 activity after years of being on this board -- getting a place where my effective rent is a couple hundred a month. Sure, I'm carrying a mortgage, but that's just because I don't want to liquidate other assets and hey, with the mortgage rates currently being offered, it seems kinda silly not to take advantage of that bubble. I'm really looking forward to working on the house too -- even as a kid I loved This Old House. Going to be a great challenge to keep me occupied for years to come.

--Last month’s spending: $4,187 or 5.7% (of 01-Jun's invested assets on an annualized basis)


-- Assets: $920K

[jennypenny]

So basically, I'll have finally accomplished Jacob's day 1 activity after years of being on this board -- getting a place where my effective rent is a couple hundred a month.

I've always found it funny that moving is jacob's 'day 1' activity, but it's usually the last thing people do after they've done everything else.

Congrats on the move!

[El Duderino]

Congrats on the move!

Thanks Jennypenny! I don't want to get too excited as the property inspection report is only going to arrive tomorrow and closing is ~6 weeks away, but it seems like a solid play for where I am right now. Thinking back to where I was in 2005 when I bought my first house, I feel heaps better about this purchase.

[El Duderino]

The house
Getting seriously excited about closing on this place now that it's just over a month out. I will need to get cranking on this loan paperwork and documentation and keep saving for the down payment. Rates are ridiculously low so it seems silly to not finance it, even though there will be closing costs and hassle. I'm super eager to get started working on all the big and little fixes this place so badly needs. Can't get too ahead of myself though, a plan will be needed or the costs will certainly spiral quickly. The house inspection report came back and, as expected, there are literally dozens of marginal and defective things that need fixing. Mostly small stuff like power outlets, drainage but there is some big stuff like main fuse panels that I'm going to have to suck it up and hire a professional to address.

Work
Relocation to the US has also come with a change to working on a different team. The deal was supposed to be that I'd get to close out my current book of work, but of course that deal got broken at the very first opportunity and now I find myself thrust in the front line of two very high profile projects. The workload is actually pretty daunting with a lot more travel and I'm not really satisfied with how my compensation got mapped over now that I've seen a few paychecks roll through. Time to kick a little ass, make myself indispensable and then, next year, when it's bonus season and performance review, renegotiate terms to a considerably more favorable level or walk. You know, play it from a position of 'fuck you'.

--Last month’s spending: $4,366 or 5.9% (of 01-Jul's invested assets on an annualized basis)
I counted my earnest money on the house contract as rent, along with some other housing-ish type costs


-- Assets: $945K

[cmonkey]

Congrats on the new house. I hope it doesn't turn into as big of a time and money pit as mine has.

I also love how you have your graph laid out, very clever!

[singvestor]

Really pleased to see a majestic octopus inside the graph!

[El Duderino]

Really pleased to see a majestic octopus inside the graph!

Quite possibly my favorite creature. So creepy and cool at the same time. I'm sure it'll be TMI for some, but I got a tattoo of Hokusai's The Dream of the Fisherman's Wife done up in a cartoony style a few years ago and I fuckin love it.

Cmonkey, I really enjoy reading your journal of home improvements so in a way if it turns into something resembling that I won't be disappointed.