A Journey of Mindfulness--the Remaking of Life in Midstream.

[henrik]

It was a nice time but will not pose a threat to my bachelorhood.

You should consider a hobby career as a diplomat in your retirement:)

A large violent storm rolled through my corner of the Northwoods and a tall balsam fir fell on my cabin;

How much was it damaged?

[IlliniDave]

Saying, "So long," to Mr. Spock

For a while now I've sensed a convergence in my life. It started with a shedding of my preconceived ideas about retirement which, when turned around and examined from every perspective I could manage, led to a shedding of a number of other long-held assumptions and intentions. Mostly they are obvious: the magnitude, role, and importance of wealth in my future; the equation of complexity and sophistication; what my role in the social strata could and should be; enforcement of a non-native value construction; and other related things I've talked about here.

'Shedding' is an apt analogy because those things fell away with little effort as I hit successive way points of awareness. Other trappings have proven much more difficult to disentangle from and lay aside.

One example that is inextricably linked to the idea of retirement is maintaining some degree of future security. I'm maybe preaching to the choir, but it's one that for many again-and-again creates a stumbling block. I'm one of those. Finding the right balance is still something I put a lot of effort into refining.

Another one I've recognized (and it's not totally unrelated) is a deep-seated tendency to allow logic/reason to dictate my response to life. That's often advantageous, of course, but looking ahead into this third phase of life, it is increasingly, I dunno, empty, or maybe artificial. When I was young using those bits of intelligence that put me a ways out on one of the distribution tails to solve a problem or learn a new thing was a source of exhilaration. Increasingly it's tiresome and spending too much time there makes me feel shallow. Being Mr. Spock is not the height of my aspiration.

I'm certain that my interest in Zen practice over the last few years, while preparing the field in which to sow ER, has contributed a lot to that; or maybe is co-symptomatic--I doubt the distinction is all that important. I do know that giving the Logic Monster too much leash allows it to get a good head of steam and I end up being dragged all over the place.

So I'm faced with trying to subjugate a big part of my traditional self identity. I don't want to throw it away. I just want to put the tools back in the toolbox when I'm done using them, and close the lid until I need them again. My sense is that this is, for me, an extremely important precursor in bridging to a retirement that is characterized by contentedness and fulfillment.

I'm learning that participation in forums such as these often begins to have a detrimental side. They tend to feed the monster. That's not a criticism or judgement of the venue or the participants; rather, it's an acknowledgment of my own frailty during a time of transition. Much of life is about maintaining balance. Hopefully by recognizing the imbalance I'll be able to correct it.

[Dave]

Saying, "So long," to Mr. SpockI'm learning that participation in forums such as these often begins to have a detrimental side. They tend to feed the monster. That's not a criticism or judgement of the venue or the participants; rather, it's an acknowledgment of my own frailty during a time of transition. Much of life is about maintaining balance. Hopefully by recognizing the imbalance I'll be able to correct it.

I can relate to this. Like you, I am making an attempt to achieve balance in this space. I enjoy ERE as a bastion of intellectualism, but for me such endless intellectualism detracts from "mindfulness" and does not lead towards peaceful and contented states of mind.

Admittedly, I'd rather be dumb and peaceful than genius and restless. Thankfully, we don't have to choose one or the other, as your toolbox metaphor illustrates.

[IlliniDave]

A Sensitivity Analysis

In my endless quest to determine where I'm "at" I've taken to attempting to manipulate some quantitative data in order to come up with qualitative assessments. It's common to talk about NxE where E is anticipated annual expenses extracted from a stash and Nx is some multiple with 25x for example corresponding to the well-known "Four Percent Rule".

My situation does not neatly fit into that technique because my level of reliance on the old nest egg varies over time in response to varying levels in "outside" income I anticipate. To reflect that I decided to look over two time spans: from retirement to age 70, and from retirement to age 80, and see what Nx looked like under some different conditions.To do that I used my best guess at my initial pool of invested assets after adding what I expect to net after downsizing from my home in the Southeast to a small winter home in Illinois. I also took an average of anticipated withdrawals over the time periods in question. The general trend is that my withdrawals are heavier earlier and fall off to essentially nil after age 70. So if I were to compute multiples out past 80 they would only get larger.

What I call my baseling is a set of fairly conservative assumptions: 3.5% real investment return, 3% inflation, a spending level that's ~$1000/mo above my recent actuals, and some conservative assumptions about a non-cola SPIA I'll start at 55. The results were:

Edit: Sorry it's hard to read: couldn't get the format to work out like I wanted

Scen/ when_ret /Nx_to_70 /Nx_to_80

baseline/ ret_now/ 28.7x/ 43.9x
baseline/ ret_55/ 61.2x/ 99.4x

When I change the spending assumption to match current spending

cur_spnd/ ret_now/ 32.1x /49.0x
cur_spnd /ret_55/ 75.9x/ 123.3x

When I do a middle-of-the-road assumption (2% inflation, spending level between current actuals and baseling assumption, and less conservative SPIA assumptions)

mid_road/ ret_now/ 38.9x/ 59.4x
mid_road/ ret_55/ 131.9x/ 214.3x

Then if I dial down spending to what I estimate the threshold between austere and painful to be while resetting everything else back to the baseline

austere/ ret_now/ 70.7x/ 107.8x
austere/ ret_55/ 865.7x/ 1,406.7x

Some of those numbers get pretty gaudy. From one perspective I'm arguably wasting the next 33 months sticking around for the golden carrot my employer holds out. From another, the difference in my estimated terminal wealth is, to someone of my roots/upbringing, almost staggering if I stick it out until 55 and keep a lid on my spending afterwards. In my head I turn that around and say, "If I go now, it's going to cost my kids and grandkids a ton of money." And I feel guilty about that. Cross-generational wealth is easy to see as a demon when you don't receive any, but it is wonderful to contemplate initiating.

A new viewpoint from which to contemplate things, and I'm really no closer to having answers.

[GandK]

Some of those numbers get pretty gaudy. From one perspective I'm arguably wasting the next 33 months sticking around for the golden carrot my employer holds out. From another, the difference in my estimated terminal wealth is, to someone of my roots/upbringing, almost staggering if I stick it out until 55 and keep a lid on my spending afterwards. In my head I turn that around and say, "If I go now, it's going to cost my kids and grandkids a ton of money." And I feel guilty about that. Cross-generational wealth is easy to see as a demon when you don't receive any, but it is wonderful to contemplate initiating.

A new viewpoint from which to contemplate things, and I'm really no closer to having answers.

Question: if you were to cut out now, then how much more time would you spend with your kids and grandkids over the next 33 months?

I was very close to one of of my grandmothers. My sons don't have that closeness with any of their grandparents on either side, and even though they don't feel the loss, I feel it for them. I know how much they're missing out. Coming from the kid's perspective: I would rather have had three more years of my grandmother's time on a regular basis than money or possessions after she died. Can you give them that?

[IlliniDave]

GandK, I don't think it's going to be a huge change either way over that span of time, unless I change my plans and forget the cabin-at-the-edge-of-the-wilderness thing. My oldest daughter and her two kids already live 10+ hours away in Ohio, and it will be about the same distance once I settle in Illinois. I'll be moving away from my youngest daughter (no children), so will probably see her considerably less once retired.

In the short run I tend to prioritize spending time "back home" with my travel because of my mother's health. Pulling the plug now and adhering to my plan would definitely allow me to spend more time with the folks back home (one of the original motivations for ER), and would give me some flexibility to travel over the winter. So I might get to see a little more of the grandchildren.

[IlliniDave]

Happy Distractions

Two weeks from this morning I'll be on the final leg of the journey to the edge of the northern wilderness. I'm hoping to catch the early hints of Autumn up there, which will be a welcome relief from the late summer doldrums of the southeast US. Of course this is wreaking havoc on my spending. I took advantage of some deep discounts at my local Cabelas and bought a pair of Muck Fieldblazer boots, and a pair of Danner hunting boots. I don't hunt, but the latter is similar to "pursuit"-style boots meaning they are a good balance between durable and light weight, waterproof, and intended to cover ground. I'm hoping they'll fit the bill for my general off-trail trekking needs while doubling as work boots around the cabin for the frequent wet and muddy conditions. The Muck boots are basically what the name implies, for slogging through the plentiful low ground. They are an improved version of the old-school green rubber boots, being lighter and better fitting (so more suitable for covering distance). They are intended for warm season use and I have some concerns about their durability in terms of puncture/abrasion resistance, but I judged them worth an audition. Now the only footwear need I'll have is a pair of legitimate cold weather outdoor boots. My feet are something I am pretty free about spending money on. Of course I could have waited to make either or both of those purchases, they aren't critical for this trip, though the Mucks will probably come in handy.

I also picked up a pair of ECWCS Polartech Powerdry baselayer pants ("heavy" weight, in terms of insulation, their actual weight is negligible). In mid-September the temps up there can range at the extreme from up to about 80 down to the low 20s, and on the low end buzzing around on the water in a motorboat can be an amazingly effective misery multiplier. With my penchant for wearing very lightweight pants, these might come in handy. I also a have pair of mid-weights. Again, something I probably could have waited on, but I was caught up in the fervor. Also found a good pair of lightweight trail pants on the close out rack, grabbed a 4-pak of Smartwool knockoff hiking socks, a heavy canvas belt, and a machete. The latter will make sense later.

So ~$350 flew out the door at Cabela's and another ~$70 at Walmart for cleaning supplies, a couple storage bins (keep the winter mice out of the spare towels, bed linens, blankets, and dry foodstuffs), and a few drawer organizers and such to bring some order to the kitchen. I was also planning to get a ~16" chainsaw, another 50"-100" of hose, and another 50" of extension cord. The chainsaw might be unnecessary.

I didn't sit down to write about boots and shopping.

My primary chore for the trip is clearing up brush and the remnants of the downed trees on my lot courtesy of the 7/21 storm. I found out one of my extremely considerate neighbors, out of kindness/consideration, has already cut up and hauled off the trees for me. I'd wanted to keep the wood to burn in the outdoor campfire pit I'm designing, but I'm not going to gripe. I bought the machete for clearing off all the little branches on the upper section of the trees (they are firs). Now I probably won't need it, but it looks pretty badass to carry around. I think all that's left for me is getting the partially ripped up stumps out of the ground, if possible by hand, and clean up all the small debris, which is mostly raking I think.

I'm also going to be viewing some undeveloped tracts of land. There's one I looked at in June I'll be revisiting. It has a 15 or so acre swale/marsh that divides two areas of wooded high ground. So the Mucks are suited for getting across the wetland to the back side of the property and the high ground there.

I may also do some casual day hiking if the weather is suitable. There's nothing better than hiking in the woods on a pleasant fall day and the area is littered with trails.

And of course I'll probably do some fishing, although this won't be a fishing trip per se.

Even though I've been intending this trip since before my last trip in June, it's really given me something to look forward too. If nothing else, it'll put me up in the Northwoods proper at a time of year I've not been before. I'll also get to spend 5-7 days with the Illinois family which is always uplifting as well.

[IlliniDave]

August2016 Summary

IRL

Partially Relieved of Duties. My youngest daughter got married at the beginning of the month. I knew it was coming but they did it stealthily to sort of work around her panic attack/anxiety disorder struggles. So except for a stupid dog I don't particularly like that was abandoned to me, I am no longer the most important man in anyone's life. That is a bittersweet transition.

Resilience Creeps Up. In the past I've declared myself FI but with the caveat that it was a "brittle" FI. As I play around with the numbers, which generally improve day-by-day, I'm starting to feel a little more resilience in my position. Still not bullet-proof, but I can weather a wider array of unfortunate events. I'm starting to give a little more air time to thoughts of transitioning ahead of plan. I still can't shake the feeling of guilt that checking out early is a bit selfish and will ultimately cost my kids/grandkids a ton of money. Overall I feel pretty good though.

Splurging. On Purpose. A week from today I depart for the first leg of a journey that will ultimately take me to my hideout at the end of the road. I decided to drop $300 on a guided fishing trip while I'm up there. This is something that I'd been trying to plan while my dad and brother were up with me (so the cost per person would have been lower), but I decided I'd go by myself. The guy who's guiding me is also the guy who mows my property, so I could spin it as some sort of "investment"--throwing him a bone to keep him favorably inclined towards me since I rely on him. But in truth it's more just me wanting to take a shortcut in getting to know a large unfamiliar lake that's reachable from my place by water, but a long way off, at a point in the season I've never fished up there before. I guess some of my middle class salaryman habits stubbornly linger.

Behaviors versus Achievements. I've had good results out-psyching myself by a deliberate policy of wrenching my focus away from the finish line and more towards concentrating on performing the incremental behaviors that will get me there. It's sort of aggravating that such "tricks" have efficacy.

Miscellaneous. Things at work these days are so awful it has become funny. I think that is a helpful thing because it provides consistent reinforcement that I'm reaching the end of the line as far as my professional life goes. It's been a decent ride overall, so I'm in no way bitter. And it's good for a guy to ingest a dose of humility every now and again.


Invested Assets and Net Worth

During August total invested assets increased by $13,400 after contributions. Net worth is up $9,200 for the month.

Savings and Spending

YTD savings as a % of gross income: 57.2%, down from 57.7% as of end of July.
YTD savings as a % of after-tax income: 77.9%, down from 78.3% as of end of July.

August total spending was $2,631 (versus $2,516 in July) which is again above the target average of $2,416/mo for the year.

Average monthly spending YTD is $2,507 which is also above the $2,416 target.

August was a pretty typical spending month unfortunately, a couple of gotchas in the area of a daughter's medical bills and splurging on outdoor clothing ahead of a trip up to the cabin (at a time of year I'm unfamiliar with there) threw the numbers over target at the end of the month.

YTD spending (excl. inc tax) as % of gross income: 17.4%, up from 17.0% as of end of July
YTD spending (excl. inc tax) as % of after-tax income: 23.7%, up from 23.1% as of end of July.

ER Status

With 01 September as my first day of ER, I would expect to deplete 6.7% of my financial assets getting to my 70th birthday, compared to 8.5% at the end of June. If things proceeded exactly according to my nominal plan my average withdrawal rate from age 52 to age 70 would be 3.85%, and from 52 to 85 would be 2.23% (compared to 3.86% and 2.26%, respectively at the end of July).

July spending represents an equivalent withdrawal rate of 4.58%; YTD the equivalent rate is 4.81%.

Net of expected proceeds from downsizing my house I might anticipate around $1,956/mo of spending over several decades to be supported by my financial assets alone.

Takeaway

My financial position improved slightly in August, but otherwise it feels like treading water.

[jennypenny]

Are you definitely waiting until 70 for SSI? When I do my estimates, I run both numbers (62 & 70) because I wonder if people our age will end up applying early just to get our foot in a closing door.

It really stinks that SSI is supposed to run dry right as we reach full retirement age. It makes it so hard to plan. People* say to just plan for no SSI, which I understand, but it's potentially a lot of money so it's hard to ignore.

*People younger than us say that. People older than us assume it will get fixed somehow so of course we'll get it.

[IlliniDave]

jennypenny,

No, nothing is definite. That's just my going in position. The most likely thing that would cause me to claim earlier would be some indication that I'm unlikely to meet the lifespan of the mortality tables. The other possibility is if things go extremely badly and it's looking like I'm going to run out of money before then (age 70). I don't remember the numbers exactly, but nearly half of the population takes SS at 62, and less than 5% wait until 70. There's been a slow shift in that (fewer people claiming early and more later).

Today my understanding is that 20ish years from now when the trust fund is projected to run dry, ongoing revenues will still fund 77% of the liability. I'm in between the old and the young. I'm not counting on it getting completely fixed (which isn't that hard, and I think is extremely likely), but I'm not going to assume it vanishes either. The problem is that there are a lot of votes to buy over the next 20 years, so it won't be addressed until the 11th hour by the political dirtbags. Notionally I use full SS, but I've looked at things with 75% and there was no real qualitative difference.

I've run the numbers with various claiming ages. When I look at my projected assets over time assuming I quit working on the day I'm playing with the numbers, the median outcome today is roughly "V"-shaped, with the vertex at the age I claim SS. Earlier claiming means less depth to the V and a shallower slope coming out of the minimum. Assuming I croak at 80 or above, waiting until 70 maximizes terminal wealth, so that's what I picked for now. If I assume 1 or more years additional accumulation, the median path becomes monatomically increasing, so it begins to approach a don't-care condition from the perspective of my survival, and I don't spend a lot of mental effort wrestling with SS eventualities. At that point I'm simply holding on to the money to reimburse my descendants for some of the money that was taken from them to pay into the system to support the boomers and us early Xers.

[GandK]

Notionally I use full SS, but I've looked at things with 75% and there was no real qualitative difference.

That is what we use in our calculations as well. 75%.

This calculator popped up in my RSS feed recently:
See How Old You Will Be When Social Security's Funds Run Out

[IlliniDave]

What Crosses My Mind on the Road

I'm on the road for a time. Illinois must hold the record for the ratio of miles of interstate highway disrupted to miles (yards really) of road actually being improved.

Later this morning I'm going with my dad to his vineyard to pick grapes for a while. This is the first time in 33-34 years I've been around this neck of the woods during harvest time, so it should be interesting. He also has hazel nuts, pears, and apples he's been picking.

The theme of this trip is: I got tired of waiting for autumn so I went looking for it. Sunday I'll be back on the road headed for Minnesota. Based on a couple of webcams, some of the foliage there is starting to turn, though not too much. The temps are about 25-30 degrees cooler than the Southeast, which is probably good enough to count as fall.

Down in the Southeast some of my friends/acquaintances who know I own property near the Canadian border have been joking about using my place as a launching point to flee the prospect of Clinton as POTUS. Here everyone has the same desire except the trigger is Trump as POTUS.

I'm might have to ban myself from TV once I ER. Seems all my older relatives sit around with their TVs tuned in to CNN. So every conversation in laced with the sophomoric jabs at Trump (and Johnson) that the MSM seems to have on a tape loop. Which is of course the converse of the Southeast where the talking points are lifted from Fox and talk radio. But in the Southeast I have the freedom to be selective about who I associate with and so the occasional political dialogue is much more intelligent and thoughtful. You are stuck with what you are dealt as far as relatives go. I had to kindly tell one that nothing on earth could possibly convince me to support Clinton and that I didn't want to waste my vacation time talking about Trump. I might spend more time up at the cabin than originally planned.

I've been thinking about the other thread with the wheaton level discussion. One of the things I intend to do once I'm up in the solitude is to flesh out some of the space I operate in, which doesn't really line up well with any of the labeled paradigms (ERE, MMM, YMOYL, Boglehead, etc.). It will have no value to the world at large, but my intuition tells me it would be useful to me to understand the variables in the conscious part of my mind.

It feels good to be away, and will feel better once I get to the end of the road.

[IlliniDave]

I'm at the midway point of my return trip to the so-called real world. Melancholy is the theme of the day.

Up at the cabin things were pretty good. I got the residual storm damage cleaned up without too much trouble. A total of 6 trees came down. One of them I'd marked to take down anyway, a scrubby poplar that was leaning into a smaller, more desirable white pine. I have a much nicer, more open view of the lake now. The remaining trees give me a perfect spot for a waterside hammock and another perfect spot for a clothesline. I also have an area cleared for a fire pit (and now probably 5 years worth of firewood). The only rub is there are roots from one of the stumps below the spot I want to build the pit, so I've either got to dig them out (real pain because of extremely rocky ground) or maybe import a few inches of gravel or something. The last thing I want is to have a smoldering underground root system in an area where forest fires are a real concern at times. But all-in-all I'm quite pleased with nature's modification of my lakefront.

While up there I hiked to four new remote lakes, fished two of them, and happily managed to catch rainbow trout in one of them. The Minnesota DNR has a neat program where they've taken a bunch of small, otherwise unproductive lakes, and "converted" them to "designated trout lakes" that they stock with stream trout. I hadn't caught a rainbow trout in more than 40 years. I also took a fishing trip into the wilderness area and in a single day got my personal best walleye, then my personal best smallmouth bass, got a bigger one later, then got one bigger still. I may never have another day on the water like that again.

Back in Illinois things are a little somber. My mom is looking at another round of chemo. The tiny spot she had has grown a little. It's still small, and there still only seems to be the one. Most importantly her lymph nodes look clear, but she'll be having a follow-up PET scan next week to get a more detailed look. That kind of stuff weighs on me.

I'm starting to sense that this journal has sort of run its course. I've noticed that mostly I'm just babbling about random stuff and reporting dry financial numbers--not much focus on ERE-related things. I suppose it is because I'm to the point where I'm just on autopilot, spinning on the merry-go-round waiting for brass ring (aka the golden carrot) to cycle within reach, which feels like a decidedly un-EREish thing to be doing. Since I tend to like a certain amount of neat and tidy I'll probably continue the monthly updates until the end of the year then decide what to do.

[FBeyer]

I have no idea why so many are so worried about posting financial updates in their journals. Money is something very easy turn into a summary statistic, so it's easy to turn into a subject, but if you asked me ERE is about the good life, not about how to grow your net worth. I want to know what you're doing, not what you're worth in case we need to 'liquidate you' [1]

Reading about your fishing trip, in spite of being one small paragraph, is one of the best things I've read on here for a long time.
I smiled; and I don't fish!

[1] in the business sense, not in the Mafioso sense. I don't think we need to liquidate anyone based on their journal contents just yet.

[IlliniDave]

I have no idea why so many are so worried about posting financial updates in their journals. Money is something very easy turn into a summary statistic, so it's easy to turn into a subject, but if you asked me ERE is about the good life, not about how to grow your net worth. I want to know what you're doing, not what you're worth in case we need to 'liquidate you' [1]

I think it's just that--it's part of the FI dynamic for the vast majority, and a fairly straightforward way to track "progress". It's hard to get around the the ratio of assets to expenses as being a critical threshold/prerequisite. I agree that one person's financial progress/status isn't necessarily exciting or meaningful to the next person, which is among the reasons I find myself questioning where I'm going with this.

[FBeyer]

Why don't you post what's on your mind instead? It's supposed to be a Journey of Mindfulness after all.
Post about your cabin and the fishing. Make it absolutely evident that Your Good Life revolves around being on the water/being in the woods rather than posting spreadsheets.

Take a look at C40's journal. All that 'Colorado' (yeah yeah he's in Seattle now, that's besides the point) looks f***** awesome. I'd rather stare at Cmonkey's chickens, GtOO's potatoes, Bluenote's tomatoes and/or your fish than some dude/dudettes net worth.

ERE on auto pilot is a good thing to document for posterity if you ask me. There are bound to be psychological effects in the beginning, middle, end, and right before FIREing and getting them out there for people to see is good if you ask me.

If nothing else ignoring net worth should be a good psychological primer to get your mind used to thinking about what means something to you, and less about thinking about money. You probably know the gratitude exercise: every evening before going to bed, think of 10 things to be grateful for. That evening ritual eventually trickles down into your everyday life, such that you are actively looking for things to be grateful for.
If you always try to keep an eye out for non-financial things that define what makes your life great, you'll always have something to post about, and always have something at the back of your mind when you go about your daily business.

I might not really get why you think your journal has run its course.

[GandK]

I'd rather stare at Cmonkey's chickens, GtOO's potatoes, Bluenote's tomatoes and/or your fish than some dude/dudettes net worth.

Me too.

[jennypenny]

I'm glad you guys said that. I was thinking I hope he posts pictures of his clothes line set up.

[IlliniDave]

I'd rather stare at Cmonkey's chickens, GtOO's potatoes, Bluenote's tomatoes and/or your fish than some dude/dudettes net worth.

Me too.

Well, I'm always good with showing off my fish pics. I'm going to spend a few hours with my mom, then I'll see if I can't remember how to make photobucket cooperate later this afternoon.

[IlliniDave]

I'm glad you guys said that. I was thinking I hope he posts pictures of his clothes line set up.

Hmm, well, I didn't actually put the clothesline up, but I'll dig around--I took several pictures of the lakefront post-cleanup and might be one shows the pair of trees. It's a good place because it's an open area with good air movement, but somewhat screened from the lake so the wolves on the other side won't have to see my camo boxer briefs flapping in the wind. My poor neighbors though ...

Speaking of wolves, I got out at 300 AM one morning because there was a possiblity of seeing northern lights (they actually have a forecast for that on the radio up there). No aurora borealis, but I did hear a canis lupus yowling across the lake.