Semi-ERE Experiment - Month 6 - Downsizing From 400 sqft to 50L Backpack

Where are you and where are you going?
2Birds1Stone
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Re: 178 Days Till FI!

Post by 2Birds1Stone » Thu Jan 10, 2019 10:21 pm

Almost forgot, I purchased $6,000 of Vanguard Total World Stock Fund in my Roth IRA. I also exchanged $74k of Vanguard SP500 fund for Vanguard Total World Stock Fund.

This brought my AA to 50/50.

2Birds1Stone
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Re: 178 Days Till FI!

Post by 2Birds1Stone » Sat Jan 12, 2019 9:36 am

@c_L

Your own journal/projections as well as THF's thread on babyboomers and the ensuing discussion around SS has prompted me to download the SS benefit calculator and plug in my own data, with $0 projected earnings past 2019.

The results were not very exciting. My current PIA (assuming I worth till July 30th, 2019) is $1159 at FRA, and I suppose that would mean $811/month at age 62 (under current law, which will very likely change).

I see in your planning you use 50% of SS amount, and I'm assuming it's the age 62 one? So I will use $405/month in my financial models, this replaces the need to save ~$120k in today's dollars.

Fidelity received my HSA transfer and I dumped that $19k into Vanguard Total World Stock Index.

Asset Allocation is now,

US Stock 36.14%
Int Stock 18.91%
Bond 10.24%
Pre tax Cash 1.79%
Post tax Cash 27.80%
PM 5.12%

Cheepnis
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Re: 178 Days Till FI!

Post by Cheepnis » Sat Jan 12, 2019 10:38 am

The light is getting brighter! You're so close. Keep it up!

classical_Liberal
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Re: 178 Days Till FI!

Post by classical_Liberal » Sat Jan 12, 2019 7:37 pm

2Birds1Stone wrote:
Sat Jan 12, 2019 9:36 am
I see in your planning you use 50% of SS amount, and I'm assuming it's the age 62 one? So I will use $405/month in my financial models, this replaces the need to save ~$120k in today's dollars.
I use 50% of my age 67 (full benefit) and never include it until that age. This is why I use my own spreadsheet vs SS calculators, I can't get them do to what I want, retire early and wait until full benefit age. For me that's the equivalent of 220K future value in 2043 @4%WR, or about 100K today assuming 3% real returns, without any additional income.

The other thing wrt SS is the huge (8% annual) gain in benefit amount after 67. Assuming the fundamentals of investing don't change in the next 25 years, my plan is to look at asset valuations from age 62 on and determine when to start taking benefits. Decreasing WR may be worth it if a prolonged bear is in effect, so I'd consider taking it early. If the situation is similar today with overvalued financial assets, I'd wait until the oldest possible age and take the 8%, as I can't imagine beating that performance over the next several years. In any macoeconcomic situation, if I end up with way more money than I'll need, I'll wait as well, nice to have the pension-like security.

Jin+Guice
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Re: 175 Days Till FI!

Post by Jin+Guice » Sun Jan 13, 2019 11:12 pm

Guys you are ruining the blog post I planned for SS for ERE. JK I am still going write it.

The SS age differential thing, as it stands now, is very helpful if you view it from the "enough" standpoint rather than the "max it out" standpoint. The government is cashing in on the well known fallacy that most people over-estimate how long they will live. I look at SS as a buffer for ERE. If something unexpected happens and you are running out of $$, or there is an unexpected spending increase due to old age, SS is there to save you. SS offers 3 levels of $$ so you can either a) take the early benefit if you are still in runaway mode/ everything is going as planned b) take the full amount or c) take the elevated amount if unexpected expenses creep up. This is a much better position than needing the benefit to survive because you've saved nothing or just trying to max it out. Even in old age/ traditional retirement the concept of "enough" pays off.

You know I can't resist mentioning part-time ERE. 1) I think when the law changes the government will smile more fondly upon those who've kept working, even at a low level than those who've stopped. The U.S. government REALLY wants you to keep working, and almost all laws are set up to favor those who do. 2) It'll be much easier to understand how SS affects your future if you work until you receive it. If you're going the part-time ERE route, then having enough for regular retirement (when you are aged out of high salaries and/ or can no longer physically work) is still a concern... Imagine only having to bank 3/4 as much money because SS is covering the rest. I'll feel a lot more confident making this call when I'm 62 than 31.

2Birds1Stone
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Re: 173 Days Till FI!

Post by 2Birds1Stone » Wed Jan 16, 2019 6:24 am

@cheepnis, it definitely has. Heck, stock markets could propel me to <4% WR as soon as this spring.

@c_L, thank you for clarifying. In that regard I can add in ~$7,000 for age 67 in my model. That's worth ~$175k saved at present value! Even more if you assume you would need a <4% WR in the future. That should totally count toward NW, like a pension ;) I mean we do pay in 7.2% + employer another 7.2% on our behalf.

I did you cFIREsim calculation, "Investigate max WR" with my current AA, portfolio values, the $7k/yr in SS, and it spit out $13,500/yr as having 0% chance of historical failure. $1,125 in perpetuity with today's spending power. Definitely Barista FIRE

2Birds1Stone
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Re: 173 Days Till FI!

Post by 2Birds1Stone » Wed Jan 16, 2019 6:27 am

@J+G, I'm with ya! c_L or yourself made a comment in another thread about a PT job being one of the best protections against inflation, period. I agree. In times of need or want, someone working a BS PT job can actually play the career game for even 6-12 months and likely attain a FT position earning way more than someone in ERE spending mode could ever use.

I'm personally hoping to earn here and there throughout my lifetime, but first and foremost I need to decompress and decouple my life from corporate America.

classical_Liberal
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Re: 173 Days Till FI!

Post by classical_Liberal » Thu Jan 17, 2019 2:10 am

2Birds1Stone wrote:
Wed Jan 16, 2019 6:24 am
In that regard I can add in ~$7,000 for age 67 in my model. That's worth ~$175k saved at present value! Even more if you assume you would need a <4% WR in the future. That should totally count toward NW, like a pension ;) I mean we do pay in 7.2% + employer another 7.2% on our behalf.
Right! Imagine what would happen if they actually fix the system and we get full bene's. SS would cover all of my basic spending needs, in that case net worth would just be icing on the cake. When I run scenarios like that I end up waaay too rich. So I think its foolish to disregard it completely. I like 50% because it's super conservative, but at least acknowledges it's existence.

2Birds1Stone
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Re: 170 Days Till FI!

Post by 2Birds1Stone » Fri Jan 18, 2019 6:08 pm

I like round numbers, so 170 sounds like a good one to comment on.

I've been thinking about this summer, and how I wish it was time for the sabbatical vs. just a short LoA. Personally I could just move things forward one year, but I don't think it would be good to encourage SO to pull away from work as she's just finished management training and next in line for a promotion at her job. I could always extend my LoA if I find the idea of going back to work unbearable.

The recent market gains have put me back in a pretty good place from a financial model standpoint. If the market were to finish January flat from today's close, I will officially crack the 4% WR > TTM Expenses barrier for the first time ever. Barebones FIRE.....something about it so anticlimactic, maybe because the market doesn't seem like it should be moving up so quickly after the last correction.....

Spending continues to be very low for 2019. The goal being to purge as many possessions/junk from our storage spaces this winter.

The great part about 2019 is that I really can just play things by ear. 2018 proved that I can get core expenses down to <2x JAFI's without any discomfort. It's all a game at this point, how much I hate trading time for $$$ vs. helping SO and I get to FI as a household.

Cheepnis
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Re: 170 Days Till FI!

Post by Cheepnis » Sat Jan 19, 2019 12:37 pm

You are killin' it! I've followed your journey on and off over on MMM and you're continuing to do so well. It's so close you can see it on a calendar!

2Birds1Stone
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Re: 225 Days Till FI!

Post by 2Birds1Stone » Wed Jan 23, 2019 5:00 pm

Viktor K wrote:
Fri Dec 21, 2018 9:35 am
Your journal is starting to sound a lot like C40’s did when I was reading it back in 2016. Everything except for his inner dialogue was saying it was time to quit.
My inner dialogue is screaming to quit over the past week or so.

Work has been getting much more stressful. The nature of my job (high profile sales) is stressful enough without a boss who is emailing me on Saturdays and Sundays demanding that work be altered or status updates on projects that could wait till Monday....

I've also had the pleasure of going through work travel hell this week. Getting stuck halfway across the country overnight, thanks to cancelled flights. I hate flying and airports to begin with.

We are also in the process of reorganizing our company, largely due to rapid growth. And I now report directly to one of the most notoriously difficult people to work for/with in the entire company.

Not sure what I'll do yet, but I don't think I'll be working there through the end of the year.

I am rereading ERE book for the 3rd time. Fucking gold. I think it gets better every damn time I read it.

MidsizeLebowski
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Re: 173 Days Till FI!

Post by MidsizeLebowski » Wed Jan 23, 2019 8:50 pm

2Birds1Stone wrote:
Wed Jan 16, 2019 6:27 am
@J+G, I'm with ya!

I'm personally hoping to earn here and there throughout my lifetime, but first and foremost I need to decompress and decouple my life from corporate America.
It seems as if you've worked yourself into a position that would allow for a decompression break and more if there's any likelihood of future earning, SS, etc. How much have you considered this?

How are you managing your stress from work? Have you found a parasympatheic outlet to mitigate the more irreversible negative health effects of work?

What's caught your eye on the most recent read-through?

2Birds1Stone
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Re: 165 Days Till FI!

Post by 2Birds1Stone » Thu Jan 24, 2019 7:13 am

Hey there Mr. Lebowski. If I understand your first question correctly, a lot. I've been exploring a sabbatical/semi-ERE lifestyle for the past several years, and being so close to the light at the end of the tunnel has been adding to my feelings of misery with work.

I'm managing the stress poorly right now. Typically during the warmer months here in NY I will use exercise as my outlet. Mountain biking, hiking, open water swimming, cycling, etc. With the shit weather I don't get out as much, limited daylight also doesn't help, and the new job is much more time intensive than my last gig, where I basically pulled off an in-place semi sabbatical for 6 months. So I've mostly been self medicating, which makes matters worse in the long term.

I'm not sure I understand what you mean by parasympathetic outlet, but I can sense that health has taken a hit since August when I started working here.

Regarding the ERE book. I feel like the first time I read through, I was expecting more of a "how to" guide with steps. Jacob clearly states from the beginning that this was not the intention of the book......but it took time to mature and realize it for what it was. When I re-read it last winter, what really resonated with me was the psychological shift from consumer to producer, diversifying my skills, and focusing more on a web of goals that support each other.

This time around, I guess I've paid much more attention to the middle portion of the book, particularly "The Renaissance Ideal" and "Strategy, Tactics, & Guiding Principals" chapters. I've realized that a lot of the lowest hanging fruit tactically has already been optimized in a big way, and that the capital is there there to pursue a more balanced life that I need to decouple from a high stress career. What I realized even more in this read through, is that I desperately need to diversify my plan. Too much of my comfort/discomfort around quitting this job hinges on stock market performance and purely capital assets.

Another thing I've come to realize is how important having a community/tribe is. Much of what Jacob preaches in the book can be achieved with social capital. Many here on the forums are doing this quite successfully. I'm looking to diversify my network and meet people outside of work. I've grown apart from many of my former social circles because they were focused on partying, watching television, and talking about pop culture and complaining about work. My last job provided me a fairly social environment where I made some good friends, and since late summer, I've been lone wolf 90% of the time. So feelings of loneliness rear their head more and more often.

Sorry for the brain dump. I haven't had any coffee yet.

*edited for spelling
Last edited by 2Birds1Stone on Thu Jan 24, 2019 12:11 pm, edited 1 time in total.

CS
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Re: 164 Days Till FI!

Post by CS » Thu Jan 24, 2019 11:23 am

Loneliness is a hard one to tackle. You are at an especially tough moment - most of your coworkers (when you aren't traveling) don't relate to where you are now in terms of life point of view - and you have little time to make new friends. At least that is what I found towards the end of working...

It gets better once you have more time (i.e are not working this stressful job).

MidsizeLebowski
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Re: 165 Days Till FI!

Post by MidsizeLebowski » Sun Jan 27, 2019 10:25 am

By parasympathetic I just meant a rest/recover method, from reading your journal your physical activity of choice was weights/running which are also stress on the body so was wondering if you've considered a more restorative "active rest" type balance to your workouts like meditation,yoga,walking in nature, etc. Could help to balance out the mental/emotional stress from work so that you can cruise to your ERE date without taking too much of a beating on the health side of things.

With the social side of things having more free time to actively pursue hobbies/jobs that aren't 100% income-driven will probably find you in a number of situations where the social interaction involves people you have shared interest/priorities with.

Interesting to hear where your attention is with the ERE book now that you're coming to the end of your accumulation, you've inspired me to go through for a 3rd read!

2Birds1Stone
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Re: 154 Days Till FI! - Backpacking, Thru-Hiking, Van-Living & Shenanigans!

Post by 2Birds1Stone » Sun Jan 27, 2019 1:01 pm

@CS, I can definitely see that. Just last year when I had a lot of free time on weekdays, I would do a lot of group runs/rides with my triathlon team, this would lead to social interactions outside of training sessions. Over the summer, I played beach VB in a 4's league. It was awesome. 12 weeks of getting together on Thursday nights and breaking up the week even more. This summer I would not have time to commit to anything of the sort.

@Midsize, that makes sense. I do walk (in nature whenever possible), quite a bit. I make it a point to go for a 1 hour walk any day that it's nice out. I will also opt to walk over subways when working around NYC. I also enjoy leisurely rides around the neighborhood on my fatbike. This year I need to get it down to the beach for the first time ever, once the weather warms up a bit.

Random Musings

Exercise goals are being largely met. This month I've lifted 12 times, ran 30 miles, and dropped about 3.5 lbs so far. I'm at 210.0 both this morning and as a rolling 7 day average. Additionally, I've walked ~40 miles.

Financially this will be a good month, baring any crazy plummet of the markets (watch, jinxed it). Yesterday I invested another chunk of cash I had which was used to chase an Ally bank reward ($450). Purchased $10,000 in I Series Savings Bonds, and a $25,000 CD, 2.85% w/ 14 month term.

Reading C40's journal from the beginning got me thinking about many things as I figure out my exit plan, primarily how I will model my portfolio for a defensive draw down. C40, if you're reading this I want to thank you for documenting your thoughts and plans so well. It's been an invaluable resource as I'm just a few short years behind you, with very similar plans.

I'm going to be relying partly on Interest and taxable dividends, and using cash from a high yield savings account to meet my monthly spending requirements. I'm trying to figure out the most optimal way to invest the rest. Dividend stock investing scares me. I've read so much on bogleheads and mmm investing threads where most evidence points to total market returns > picking dividend stocks.......but damn if I could say it with certainty.

Like Jacob writes about, it's not so much that I need to win at this point, I just need to not lose. I'm considering the following allocation for the next few years, and basically re-balancing annually. (or within certain bands in the case of large market shifts). Open to any suggestions.

40% US Stock Index Funds
20% INT Stock Index Funds
25% CD Ladder/MM Funds (used to chase bank bonuses on top of 2.2% APY)
10% Bonds
5% PM's

Currently I'm underweight US/INT stock, and overweight cash/bonds.
My 401k/Roth/Brokerage/HSA accounts = 90% Stock/10% Bond

The rest of my assets are in non retirement instruments.

I also pulled my ejection date forward. Peak airline prices kick in during/after 4th of July weekend, so we are targeting late June/July 1. SO signed up for the Barclay Arrival Plus card. I'll easily be able to hit the min spend using work travel. That will be an $800 airline credit for our trip.

I decided to sell my car in May/early June. I won't need it while in Europe, and when I return I'm going to buy a van. It won't be a sprinter or high top van like we had planned for our year of traveling the US. But I want an adventure mobile for weekend trips, and something I can toss my bikes into without a rack. My only driving for work these days is train station, airport. A van/minivan will be fine for that.

I predict I'll get $8-10k for my current car, when I get back from Europe my goal will be to find a solid older vehicle for 50% of what I get or less.

This is all starting to feel very real.

2Birds1Stone
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Re: 153 Days To ERE - Backpacking, Thru-Hiking, Van-Living & Shenanigans!

Post by 2Birds1Stone » Mon Jan 28, 2019 12:44 pm

I ended up going on a 4 mile walk around the mountain biking trails near us yesterday afternoon. Nice landscape, saw many colorful birds and deer.

Woke up 209.6 with a 209.6 moving weekly average. Heading in the right direction again. I feel best ~198 lbs, so that's the mid term goal.

This morning I initiated a rollover of my former employers 401k into an IRA. This will allow broader investment options as well as the ability to do Roth conversions during upcoming low income years.

Addressing yesterdays asset allocation issue, I took the ~$11k in money market funds within current employers 401k, and dumped it into a mix of 50% SP500 Index, 25% Equity Income Index, and 25% Small Cap Index, and made future contributions for the same ratios. This will bring me to my desired AA by end of March.

I have one more CD to purchase in order to finish the ladder.

2Birds1Stone
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Re: 178 Days Till FI!

Post by 2Birds1Stone » Mon Jan 28, 2019 12:46 pm

2Birds1Stone wrote:
Sat Jan 12, 2019 9:36 am
US Stock 36.14%
Int Stock 18.91%
Bond 10.24%
Pre tax Cash 1.79%
Post tax Cash 27.80%
PM 5.12%
vs. Today

US Stock 38.31%
Int Stock 18.71%
Bond 12.42%
Pre tax Cash 0.00%
Post tax Cash 25.45%
PM 5.11%

CS
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Re: 153 Days To ERE - Backpacking, Thru-Hiking, Van-Living & Shenanigans!

Post by CS » Tue Jan 29, 2019 6:57 am

Wow, this really is the home stretch! Congrats. Summer is the perfect time to start your new adventure.

2Birds1Stone
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Re: 153 Days To ERE - Backpacking, Thru-Hiking, Van-Living & Shenanigans!

Post by 2Birds1Stone » Tue Jan 29, 2019 11:54 am

Thanks, CS. It's definitely the beginning of a new chapter!

I'm working from home again today, and it gave me some time to research the best investment options (for me), within the Fidelity Rollover IRA. The funds already settled in cash this morning, and not wanting to market time I decided to research some low cost options. Went with a mix of 60% Total Stock Index, 30% Total International, and 10% Total Bond. In order to reach the desired total AA across my portfolio some rebalancing in the Roth IRA was required.

I've finally gotten my AA in line with my personal IPS.

40% Domestic Stock
25% CD Ladder
20% International Stock
10% Bond
5% Precious Metals

Current Portfolio value is ~$425k, so a little ways to go before I can truly call myself FI :)

It feels good to get all of those accounts (HSA, 401K) transferred to Fidelity from my more expensive and limited ex-employers plans.

60% equities feels a bit on the high side for the folks on this board, and conservative by most standards for someone my age......so I feel maybe a happy medium?

Regarding any rebalancing moving forward, I plan to use new funds to rebalance and maintain the above AA. If a category shifts more than 5% out of line that will also trigger a rebalance.

I've got just about all of my assets tied up in investments, with very few producing practical income. Thus, between now and end of June, I'll be looking to put a little buffer in my checking account, just enough to pay for this summers shenanigans

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