the dude's diary

Where are you and where are you going?
El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

November '16 Update

Post by El Duderino »

The house
Finally got my housing sorted to a level of ERE-ness. Purchase went through without a hitch and I'm now moved in to a massive, old house (1896 construction) with all the problems of a massive, old house that hasn't been particularly well maintained for the past 50 years. The frugal part of this arrangement is that since the house is considerably run down, I got it for what I think was a good price -- and -- it's divided into sections so there are two rental units so it's not just a spacious residence for myself, it's also producing income that further offsets the purchase price. The only bad news is that I've got projects, fixes and repairs coming out the yin-yang and also a shiny, new 10 year mortgage.

Cars
One of the best parts of moving back to the US has been infinitely more opportunity to tinker with cars. Over the past couple months I picked up a new project car, pretty much completed my other 'main' car to a state of finish that I'm fairly happy with, and just purchased a beater van to haul dirty and big stuff in for the houses. I'm particularly excited to get working on the project car which will be a 70 Opel GT converted to electric, but I've got lots of garage prep to do before that can begin.

Work
Work continues to be a series of urgent daily demands with a dense fog sitting behind it. I've been thinking about my work and career quite a lot. Last year I got my mind blown by the ribbon farm article about the Gervais principal and this year it's been reading the book Jacob recommended on the homepage, The Gamesman. I think there's quite a bit of overlap and it's just really given me some insights into decisions I've made in the past regarding my career and where it may go. I'm clearly a craftsman and my managers are gamesmen and jungle fighters. That explains quite a lot for me.

--Last month’s spending was a record, coming in at just 2.6% SWR. Because of the home purchase, I didn't have a house payment due which made a big difference. Otherwise, I think it would've been 4.6%, which is still great.

George the original one
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Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: the dude's diary

Post by George the original one »

OK, one of the criteria for successful electric car conversions has always been battery storage space... where the heck are you gonna find space for the batteries in an Opel GT without compromising the range?!?

El Duderino
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Joined: Mon Oct 27, 2014 12:24 pm

Re: the dude's diary

Post by El Duderino »

George the original one wrote:OK, one of the criteria for successful electric car conversions has always been battery storage space... where the heck are you gonna find space for the batteries in an Opel GT without compromising the range?!?
Hey George, do you know a lot about Opels? I haven't really found a lot of people who even know what it is, so that's cool if you do!

The obvious place to put the batteries are where the gas tank used to be over the rear differential and if needed, extending into the parcel shelf and space where rear seats would be on a full-size coupe. The reason I'm thinking this is going to be a good candidate for conversion is because it's so small and light (even lighter without the iron engine) that it won't take a huge powercell to get the 100 miles of range I'll be shooting for if I use a pack of lithium cells instead of the lead-acid type.

I'll create a build thread about this project here if people are interested.

halfmoon
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Joined: Mon Nov 07, 2016 10:19 pm

Re: the dude's diary

Post by halfmoon »

El Duderino wrote:I'll create a build thread about this project here if people are interested.
Count me interested. Per Google, there seem to be a number of people out there doing this conversion or thinking about it. Are you going to buy a kit or do it from scratch? Looks like these people http://opelev.com/ did a lovely conversion for $15,000. :shock: Surely there must be a cheaper route?

George the original one
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Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: the dude's diary

Post by George the original one »

El Duderino wrote:Hey George, do you know a lot about Opels?
Not enough to be of help. I can probably dig up an article or two about them as project cars, though. Lithium batteries will definitely resolve the space issue; I was afraid you were looking at lead acid! If it helps, I know John Wayland and Marko Mongillo: http://www.plasmaboyracing.com/index.php and http://www.nedra.com/wayland.html
I'll create a build thread about this project here if people are interested.
Definitely create a thread!

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

Jan '17 Update

Post by El Duderino »

Last few months
Have been a wild ride. I do enjoy keeping this journal up to date, but it just hasn't been feasible given the activity recently. I took the second half of November and went to Asia for a few weeks on holiday. Great trip and some much needed down time from the house work and job.

House
Getting moved into the place was a chore, mostly because of the additional cleaning I've had to do. The previous owners didn't really take great care of the home so I'm getting familiar with the surroundings gradually. Part of that is plotting out the house into Sketchup so that I can create a 3d model and use it for design, fab, materials estimation, visualization, you name it. I'd work on this place 24/7 if it weren't for the day job. A tenant moved out this week from one of the units so I can fix a few issues, clean the place up a bit and hopefully get a good tenant in there quickly.

Work
I got a mediocre rating for the year on my performance review. What I can't figure out is if that's because I'm overestimating my contribution and work effort or if I'm being underappreciated because I make it look too easy. When it comes down to it, it's probably a good thing if I don't get a raise or even a bonus this year because it'll just be further encouragement to cut the cord and do my own thing sooner than later.

Numbers
Charts are looking pretty good. My spend for the past few months from September has been less than 7% with two months under 5%. I inched over a million in net worth at the end of December, so that made the prosecco taste all the better at the NYE party. I'm still concerned it's not yet enough to comfortably retire on, though I did see a new interview recently with MMM where he said that when he retired, he 'only' had $600K invested and a paid for house.

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User avatar
C40
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Re: the dude's diary

Post by C40 »

Yeah, that's a nice way to end the year - as a millionaire. You're so loaded! You might need to change your name to a different character from The Big Lebowski. Will it be "Big Lebowski", or maybe "Jackie Treehorn"?

Dragline
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Joined: Wed Aug 24, 2011 1:50 am

Re: the dude's diary

Post by Dragline »

C40 wrote:Yeah, that's a nice way to end the year - as a millionaire. You're so loaded! You might need to change your name to a different character from The Big Lebowski. Will it be "Big Lebowski", or maybe "Jackie Treehorn"?
Or maybe: https://www.youtube.com/watch?v=l91ISfcuzDw :lol:

mxlr650
Posts: 165
Joined: Tue Apr 05, 2011 9:33 pm

Re: the dude's diary

Post by mxlr650 »

C40 wrote:Yeah, that's a nice way to end the year - as a millionaire. You're so loaded! You might need to change your name to a different character from The Big Lebowski. Will it be "Big Lebowski", or maybe "Jackie Treehorn"?
Karl Hungus?

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

Feb '17 Update

Post by El Duderino »

Simplicity
In a continual drive to make life easier, I decided to finally shutter some accounts and attempt to converge on a simpler banking process. I was using 6 different institutions for checking and savings, 4 different credit cards and 5 debits cards and it was all a mixture of pounds and dollars. The spreadsheet was daunting (and still is). Over the next few months I hope to pare this down a bit more and rationalize things as much as possible. I actually think it was hurting my credit score a bit because when I applied for a car loan in Jan the score came back surprisingly low. Didn't prevent me from getting a decent rate and it'll be paid off today, but it was an eye opener.

House
This new place just keeps on getting better and better. The latest doings have included ripping down the rest of the kitchen ceiling and cleaning out the other half of the garage to make way for more self-awarded trophies with wheels. The demolition in one of the upstairs bathrooms will commence shortly. One real constraint is that I can only throw away a certain amount of waste materials each week as part of normal trash collection so taking out all the drop ceilings at once, for example, just isn't feasible, though it'd do me a great deal of good. I hate the Eagles' music and drop ceilings.

It seems it's going to take a bit longer to get one of these other units fixed up and into a rent-able state; an income stream that won't likely happen until April or May. Not wanting to half-ass it too much, instead I'll putter around and become susceptible to lots of indecision and planning. This is where the fallacy of overvaluing cost of repairs and undervaluing the foregone income comes to play. The upside is that the final product will be absolutely to spec.

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Investable Assets
The markets have been on an absolute rip, which would normally lead me to be fairly distrustful, but then I readthis article summing up 2016 and, despite the overwhelming pessimism, he's got some great points. The stuff about ZIRP and NIRP and how we may be moving to a cashless system in the name of fighting a new 'war on...' seems to be the trend. Maybe we're already so entrenched in using digits instead of hard currency and things like the derivatives markets are so large that it's already too late. I don't understand how holding gold is a great AA or even a hedge. Unless you've got a safe and the means to protect it of course but if it came to that (aka, WTSHTF) wouldn't things like non-perishable food and water be more valuable?

The other side of the numbers is that I had a decently low-spend January, coming in at 4.5% SWR. Re-classifying the principal on the mortgage as an 'investment' rather than putting it down to my 'rent' category definitely made a big difference, though it would have still been in the 4% realm.

There seems to be a lack of consensus as to how SWR is figured in this community, so permit me to explain how I do mine. Obviously, I sum up expenses over the month and multiply by 12 to give a yearly spend figure. The question is what to use as the denominator. Now, I just look at my invested assets (IA) rather than total assets or net worth. The major difference for me is that IA doesn't include the values of property owned, even if it's a rental property and not just a primary residence (even though my primary residence is rent earning). As a percent of net worth, which is really just IA + property value + cash on hand, my SWR is 2.7%.

Retiring
If I were reading this journal, I'd probably be thinking -- 'Wtf, Dude, why are you still working?' I read other people's journals and I see how they're counting down to the point when they can cut loose with admirable enthusiasm. Lots of fire in bellies.

Truth is, I'm shit-scared that something will happen and I'd have to admit I was wrong to leave work so early and I'd have to go back to a job and earn money. Going back after leaving is a lot harder because I'd no longer have the cushy job I've carefully engineered. So, I've decided to bear with it for a bit and determining the exit point is proving to be harder and harder as time goes on. There's just no burning platform. Yes, I'd definitely like to have a lot more free time to pursue romance, leisurely reading, train BJJ, play guitar and most likely spend loads of energy working on this old house and my cars (particularly the electric Opel project I've barely started). However, whenever I get serious about planning those things out, I realize just how much money that will take (mostly on the house and car side of things) and it gets scary. Also, I like to travel and I haven't worked out a budget that would allow me to travel as I do currently and still be _safely_ retired. Basically, I don't know if I trust myself enough to operate on a budget and when you add in the volatility of markets and uncertainty of returns or catastrophe, I get worried. As a very risk averse person, I'm certainly being overcautious here. My hard stop is that I will not be 40 and still working so that gives me 2.5 years more of asset accumulation. By that point I hope to have a moving average SWR of <3% with a mountain of dry powder on reserve.

Gilberto de Piento
Posts: 1942
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Re: the dude's diary

Post by Gilberto de Piento »

However you calculate the SWR you are doing great. I don't blame you for staying at it a little longer. Things feel unstable right now.

As a side note, does everyone here do BJJ? There's a place down the street from me, maybe I should try it. I already have too many athletic hobbies though.

Jason

Re: the dude's diary

Post by Jason »

Great job.

Very inspiring.

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

Re: the dude's diary

Post by El Duderino »

Gilberto de Piento wrote:
Wed Feb 15, 2017 10:32 pm
There's a place down the street from me, maybe I should try it.
Do it! Really good bang for the buck fitness. I didn't realize it's possible to have too many athletic hobbies, you must be doing well!
Jason wrote: Great job.
Thanks man!

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

May '17 Update

Post by El Duderino »

It's been a while since my last update, so this one may be a biggie. Strap it on and brace yourself or run for cover.

The Dude's Deal
I've found a new favorite game and I'm calling it 'the deal'. The whole thing is based on some fuzzy math that I did a few years back.

For every dollar you have invested, you can spend a hundredth of one cent per day. $100 = $.01; $10,000 invested = $1 per day. It roughly correlates to a continually compounded 3.5% SWR. The reason it's interesting to see this on a daily basis is because that's where spend control starts, day by day, just like counting calories.

The game starts with figuring up invested assets at the beginning of a month and divide by 10,000. That gives an indication of how many dollars (euros/RMB/bhat) a day one gets to spend. Let's call that the allocation. Then, track everything spent each day, subtracting each amount from the running total. Every day, the allocation is earned and goes as a positive to the running total. If too much is spent, then you go into negative numbers until caught up. Simple, right?

Okay, maybe I'm the only one who likes figuring numbers in their head like this, but on this board, I think probably not.

Right now I'm +18.11 and if I don't spend any money this evening, I'll be at +118.11 tomorrow morning. I was down to -500 at one point because I had to fork out some money for insurance and a wedding gift. It took a while to recover from that, but those are very infrequent occurrences after all.

So far, it's proving helpful to curb my spendiness because I know with great certainty if I'm running ahead or behind. I've only been using it since April 15th, so I'm not going to be posting stellar numbers for last month, but they would've been much worse without this system in place so I'm excited for next month to come around. Plus, it encourages saving up a surplus for an item so that there isn't any guilt or buyer's remorse for money spent on worthwhile things.

The really nice thing about this is that while still in the wealth accumulation phase, one is not actually drawing down from the investment account, rather using it as a gauge for what a realistic level of spending could be. If you can adjust to that level of spend, it should prove out your readiness to quit the day job. And, after one has left, it provide an automatic way to moderate spending down or up according to how your portfolio is doing.

The Numbers
Looking pretty decent. Last month's SWR would've been 4.9% of net worth or 7.1% of invested assets.
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Wheaton Level
Jacob posted this somewhere and it really got me thinking. I've highlighted where I think I fit, though I do acknowledge it's meant to be a level thing, not a pickem list.
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Electric Opel GT Project
Haven't even really started this. More to come, but here's what it looks like not, just sitting in the garage taking up valuable space that could be used for a meth lab.
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Fish
Posts: 570
Joined: Sun Jun 12, 2016 9:09 am

Re: May '17 Update

Post by Fish »

El Duderino wrote:
Thu May 04, 2017 6:15 pm
For every dollar you have invested, you can spend a hundredth of one cent per day. $100 = $.01; $10,000 invested = $1 per day. It roughly correlates to a continually compounded 3.5% SWR. The reason it's interesting to see this on a daily basis is because that's where spend control starts, day by day, just like counting calories.
Thanks for sharing this. I really like this concept as it makes daily expenses more meaningful even with high NW. I've played a variation of this game where I first subtract off fixed expenses (property taxes, insurance, utilities) and the remainder becomes the daily budget for variable expenses (food, entertainment). You can also encourage paid work by allowing earned income to increase the budget after subtracting off a portion to meet a target savings rate. And the budget doesn't even need to be based on actual NW, it could be target FIRE spending or some similar goal.

Then I saw what you did with the Wheaton table... :shock: :? It's just a matter of time before it's printed on t-shirts, posters and toilet paper.

SustainableHappiness
Posts: 266
Joined: Tue Jun 28, 2016 6:39 pm

Re: the dude's diary

Post by SustainableHappiness »

Cool graphs, car and charts. I drank many white Russians this weekend. Ended up running out of Kahlua and drinking vodka and chocolate milk...so classy, so dude.

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

Re: May '17 Update

Post by El Duderino »

Fish wrote:
Sat May 06, 2017 1:00 am
I really like this concept as it makes daily expenses more meaningful even with high NW. I've played a variation of this game where I first subtract off fixed expenses (property taxes, insurance, utilities) and the remainder becomes the daily budget for variable expenses (food, entertainment). You can also encourage paid work by allowing earned income to increase the budget after subtracting off a portion to meet a target savings rate. And the budget doesn't even need to be based on actual NW, it could be target FIRE spending or some similar goal.
Good point! I'm now basing mine off just the investment portfolio, less the fixed expense overhead. Will be interesting to see what May's spend comes in at.

@ SustainableHappiness: Doesn't sound half bad to me, when you're in a pinch, that is. Certainly no worse than Yoohoo with rum.

SustainableHappiness
Posts: 266
Joined: Tue Jun 28, 2016 6:39 pm

Re: the dude's diary

Post by SustainableHappiness »

Hmmm... Yoohoo has yet to make it up to the Great North Canadia. I will have to look for it the next time I am in the states! Keep on rockin'.

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

June '17 Update

Post by El Duderino »

Per Diem
https://www.youtube.com/watch?v=fXcIZFeYivQ

The Dude's Deal is trucking along quite nicely! My spending was a record low last month and instead of being absolute deprivation like it could've been (hello, January), it was actually kinda fun counting my dollars each day. I ended the month up by over $180 but I did cheat and create a separate category for house improvement expenses (more on that later). My effective SWR ended up being just 4.71% with the house expenses thrown in and a superb 3.1% if those are left out. Really happy with how this is turning out so far and the best part is that it'll scale and could be applicable to pretty much anyone at this stage in their FI life.

The Numbers
As above, looking pretty cherry. Last month's SWR would've been 3.3% of net worth or 2.1% of nw if the house expenses are excluded.
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Madison
Stuff fixed up around the rental property #2 this month includes the following:
  • removed ridiculously gaudy paneling and painted a few walls in the entryway and living room
  • installed fluorescent lighting in the garage
  • removed a bunch of junk from flat 3, which is vacant currently, awaiting repairs to the kitchen and bathroom
  • dug most of a 40 foot trench that will help out with the garage and house water seepage issues
  • additional areas of the lawn seeded
  • 2/3 of the way through tree trimming (probably the biggest job of all, next to the trench)
  • remainder of the garage is cleanswept
My big dilemma right now is whether to be patient and work through the exterior fixes like the gutters and grading around the garage and house, then hit the kitchen/bathroom renovations - or - bring in a contractor to do some of the renovation work straight away. The income from the unit renting would more than justify the cost of the repairs, but if I wait, then I get the experience and save heaps of $$$ at the expense of losing a few months of rent. Right now, I'm getting quotes from contractors and deciding the extent of the work to be performed and materials needed. The dude is a lazy man, so paying somebody to do it is appealing, but he's also a frugal sumbitch so it hurts to pay another person to do a simple enough job.

Electric Opel GT Project
No progress, unless you count dropping a hammer on the rear quarter panel while hanging lights in the garage, which is, technically, negative progress.

El Duderino
Posts: 177
Joined: Mon Oct 27, 2014 12:24 pm

July '17 Update

Post by El Duderino »

Hey folks! Been a while since my last update, though there haven't been any huge changes to my methods. Just some gradual improvements and clearer thinking, mostly.


Dude's Deal

Still using a per diem to keep expenses under control. I've decided to change how I calculate things, which will ease up a bit. I think it was stressing me out, which is very un-dude-like, I know. My thinking on the matter had become all jumbled and when I was consistently carrying a negative balance for weeks on end, well, it's demoralizing to feel impoverished all the time.

1. Still going to take 1/10,000th of invested assets (i.e. total portfolio of stocks/bonds) per day as a gimme
2. Added to that, I'll take 1/30th of the cleared rent profit* I earned that month

Currently, this gives me $82 + $26.66 or ~ $108 per day to use for all personal expenses. That means everything from toothpaste and toilet paper to entertainment, insurance, rent and utilities. After being on this scheme at a lesser amount for about 3 months already, I suspect this amount is going to feel downright luxurious.

*Rental profit is a conservative figure I've reached after deducting standard expenses (capex, tax, insurance, etc) from monthly rental income

Metrics
PhotoBucket finally kicked the bucket. It seems they couldn't figure out how to make money so they started clamping down on use of their hosting site for bulletin boards. Bummer, man. That means all my old image links are broken and though I was able to save many of them before shuttering my account, and could certainly recreate them from my spreadsheet, that might just be too much fun even for me to indulge, so I'm gonna have to pass on that like a kidney stone.

This does offer the chance to change things up, so rather than get into the details about current portfolio holdings or a breakdown of my discretionary spending, I'll take a page out of M741's book and put this out there:
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Looking at this, it really reinforces the #1 and 2 things I need to be focused on right now: expense control and income generation. The dude's deal covers the first point, and #2 can be helped as well.

Madison
I've been putzing around with more little jobs here and there on this place over the past month. Here's what I've accomplished:
  • Put a de-humidifier in the basement for 100% improvement in the conditions down there. Should've done this the day I moved in, duh!
  • More tree trimming to get rid of unwanted branches that are preventing the lawn from growing. This is about 2/3 done.
  • Finished digging the perimeter of the trench around the garage to prevent erosion and rotting of the base of the walls. Still lots of work to finish the digging, grade the area, put up a retaining wall and lay the drainage pipe with protective barrier and gravel.


What I haven't done yet is to fix up the spare apartments and get those rented. These could significantly (700 pcm +) boost my rental income and should be top priority. Unfortunately, I'm hesitant to dive into this because it's messing with the sewer, water and electrics of the house -- all things that I'm somewhat knowledgeable on, but not yet confident enough to jump into straight away. My family is visiting this coming weekend, so I hope to have my father take a close look at it with me to advise the best way to proceed.

Other stuff
Debating whether or not to go to my employer and express that a 22% raise would be necessary to retain me. If accepted, I'd be willing to stay on another year, to July of 2018. The extra money taken in would pad out my investment portfolio, emergency and year one funds, and pay down the Madison mortgage even more aggressively. If declined, I'd probably quit at the end of October at the latest. I've already proven to myself that I can live to my 3.5% budget, so I'm ready to press eject now, but the extra pay would be just the temporary incentive I need to push through one more year of working as I get the rental properties fixed up and starting to generate some real money.

Second, I located a BJJ gym near where I live! Training gives a great outlet for work stress, keeps me fit and in shape, and I like the camaraderie that comes with it too. Coming back to it after over a year off is a bit of a jolt to the system. I need to slow my roll and take things gradually.

Finally, the electric Opel remains unstarted for the most part. Time is an issue as there's lot of house stuff that should get addressed first. Then, pricing out the components has revealed it's probably going to take north of 18K for all the gear to do this thing as I'd like. That means that even if I sold the car that I'm currently using for what I'd use the Opel for, I'd only just cover the cost of conversion plus the original cost of the chassis. And I'd really only want to sell that other car once the Opel is fully operational. So, for the time being, I think I'm just going to continue to research and learn more about it and just do things that don't cost anything and aren't irreversible. Basically, that limits me to fixing up the interior and measuring mocked up version of the various components to determine placement and possibly even fabricating mounts for things like the motor, once I learn which specific unit I intend to use. Good news is that just in the past year there seems to be a real shift in the market back to 3 phase AC motors which is more costly, but has other advantages. Also, I'm pretty sure that at least for the version 1 of the car I'll only be looking to spec a requirement of 40 miles on a charge. That's plenty to get me to the gym and run whatever other errands I need to do locally, holding other vehicles in reserve for longer trips.

I did make some mock ups of the motor and the controller using rapid prototype CAD (cardboard aided design). The cylinder is the motor and the box is the motor controller. Combined, they're nearly $5000, so will probably be one of the final purchases made, along with the battery pack.
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