CDR's Journal

Where are you and where are you going?
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CDR
Posts: 21
Joined: Sun Sep 06, 2020 9:45 pm
Location: Canada

CDR's Journal

Post by CDR »

You can read a bit more about me here:
viewtopic.php?f=1&t=11612&p=225996#p225996

Much like everyone else, I plan for this journal to document my journey in ERE. Although there are some limitations, as my wife isn't exactly interested in the "extreme" part.

While I have been fortunate to be frugal and financially savvy in comparison to the average, my environment has also been conducive. My parents did not kick me out of the house when I turned 18, I was fortunate to have a full-time job during my summers off University, and many more factors.

This means while it has taken me a long time to get to the full-time job market (I started working full-time last year), at least I am debt-free on arrival. I am however not at ERE levels of discipline and have some improving to do in the finances.

I'm hoping this journal will motivate me to get/stay organized in regards to my budget and goals. While we live with my parents, I have decided to focus in on skills that are advantageous to learn given the tools and other things my parents have access to and could help feed into a system whereby I use the combined tools of us and my parents to create things to sell and then reinvest in more tools or things to sell. Part of this involves using seed money from things I own and will sell.

Skills I would like to focus on until July 2021:
  • Sewing
  • Budgeting
  • Programming (Python & PHP/WordPress)
  • Woodworking
  • Computer/Smartphone/Electronic Repair
  • Networking
  • System Administration
For example, I have lots of experience fixing computers and some experience fixing smartphones. My dad has the screwdrivers, soldering iron, and some other misc tools. I also have an Xbox 360 to sell. I was going to take the money from the Xbox sale and try to purchase some broken electronics to fix and resell, rinse and repeat until I have enough money for more broken things + new tools (like a solder sucker). It would be great to find some free broken electronics and do some something from nothing type acts in a combo tribute to @Ego, @Sclass, and my wallet :lol: .

I think Jacob has advocated this style, or something close to the spirit of this. If anyone else has done this, have you included "money I saved by fixing it myself" in this system? I feel like this might quickly break my system if I do it this way, but am looking for advice.

September Skills:
  • Networking (For my transition to IT)
  • Sewing (with a Machine)
  • Budgeting
Given that we live with my parents, and I lived with my parents before that, my budgeting habit is weak. Generally speaking, I have never had enough money for this to matter, and I've never run out of money. When I was in University I worked full time during the summer and saved 95% of my money for the coming year's tuition. The other 5% I kept squirrelled away to spend on things, but I was not a big spender. However, now with a full-time job, etc, I need to keep better track of my money.

August Financials:

Savings Rate: 72%

I spent $684.19 in August. As I suspected, while my savings rate is okay, it should be much higher than this given we are living at my parent's home.

$191.89 on things I should not have "purchased" including parking tickets, snacks/desserts/food outside the house (including lunch for when I forgot to put my lunch in the fridge at work, so it expired before I could eat it...)

$377.99 on things like a gift for my wife for our anniversary, a gift for my mom for her birthday, but that is coming up this month, our once-monthly trip to sushi, new headphones, make up and under the bed storage for my wife. Also, a year sub for a domain + hosting so I can create an IT portfolio

$87.84 Adobe Sub and Grammarly Sub (Both Cancelled)

$20 - "Loan" to a friend

$14.95 Audible subscription

$2.79 payment to someone I subscribe to on Patreon

My goal is to increase my savings rate in September and get to 90% by October.

For September I will:
I've already cancelled my Adobe Creative Cloud plan, as learning these tools are no longer a focus in my life at the moment.
Cut out all outside snack and food purchases, this is sometimes due to poor planning, if I know I am going to be out of the house for some time, I should bring food (going forward)
Purchase nothing from Amazon or Value Village (going forward)
Ensure I put my parking pass on my car, as I spent $40 in unneeded fines last month.

At the moment, I've spent 47% of my 10%. This is partly because I started paying for parking at work (and parking would have been 8% of my monthly budget), but my organization decided to pay for all employee parking going forward, so that's nice.

As of September 2020, my net worth is around $23k. Given my working patterns, this might be the highest my net worth has ever been.

I thought it might be interesting for people to see the math behind my opportunity cost calculation on returning to University, vs other options in regards to switching careers.

Computer Science Degree:

Tuition per year after financial aid: $8,000
Cost per year not working my current job: $30,000~

Total cost for 3 years = $114,000

Pre-apprenticeship Training: Electrician or Millwright:

Four months of no wage to attend pre-apprenticeship training: $5000~
Tuition for the training: $0 (Paid for by the government :D )

Total Cost: $5,000
After this point, I would not only be making money but more money than at my previous job, even as a first-year apprentice.

IT Support (studying after work and on weekends, previous experience in the field)

Cost for Certificates, Training Material that I was unable to find for free or in the library, and a used server: $1000

Total Cost: $1000

The cost-benefit analysis scared me off from going back to University. COVID-19 cancelled all the pre-apprenticeship training programs, so in March I started studying for some IT certs. COVID has thrown a rachet in my plans, but I hope to be celebrating the new year in a new job. However unlikely that may seem. I also haven't purchased the used server yet, as I would like to sell my comic books first so I have room for the server. I also don't think I will need it before I finish learning networking.

ertyu
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Re: CDR's Journal

Post by ertyu »

Even at "not extreme" mode your savings rate is nothing to scoff at. Keep up the good work!

Western Red Cedar
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Re: CDR's Journal

Post by Western Red Cedar »

Your savings rate is really impressive.

What kind of sewing machine do you have and what are you trying to make? I'm not trying to develop this skill because DW is a great seamstress. She has a husqvarna, which I had always associated with chainsaws. It's got an amazing motor and kicks ass!

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fiby41
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Re: CDR's Journal

Post by fiby41 »

CDR wrote:
Mon Sep 07, 2020 10:08 pm
Python & PHP/WordPress
Why both or all three? If you learn the first you could build on it with django/flask to replace what the second does. Assuming you want to eventually make a website with these skills, the second was the popular language until few years ago. You could eliminate both if you go the third route and just want a blog. Nothing wrong with learning how to use all three but I'm just trying to look at it with web of goals eyes or from a redundancy perspective.

CDR
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Location: Canada

Re: CDR's Journal

Post by CDR »

@Ertyu and @Western Red Cedar thank you for the kind words about my savings rate. I will keep it up!

I also have a Husqvarna, it's a Combina II.

@Fiby41

Thanks for inquiring. On why both: I have a long history with Python going back to high school. I use it at work and home to automate repetitive tasks around spreadsheet manipulation and other things to this effect. Most of my interest is around Python's use in networking automation and general tooling.

But, I also have PowerShell on my list for Windows System Admin. So, I should take some time to think about what would be best to learn/improve on first for my resume, and see if I can learn the other on a future company's time.

At work we use WordPress, and I convinced my boss to allow me time to learn PHP and WordPress Theme Development for the sake of the organization. I was considering trying to do some freelance development with it. I'm not sure how well that will stack, given I am going into IT and not website development. I might have to split my time too much?

I'm open to your thoughts on these issues!

As you mentioned about "just starting a blog" I am also hosting a personal WordPress site. But, I am not coding or doing much custom work. Focused on pragmatic use for a portfolio.

CDR
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Location: Canada

Re: CDR's Journal

Post by CDR »

Feeling blue today, I'm not doing a good job at work, I'm not studying enough at home, and I procrastinate going to bed so I end up waking up the next day too tired to get out of the loop.

There is a particular part of my current field I don't like, and so I've been avoiding doing it at work. However, it's extremely obvious I'm not doing this work and it's an important part of the job in my employers view.

Sometimes I feel pulled in so many directions that I don't want to do anything, not just at work, but at home too. I can either spend all my time doing one thing, or all my time being scatter brained across many different things that nothing of use gets learned or done. I much prefer to do something all at once, in bulk. Maybe I need to accept that that is the way I am and plan accordingly, instead of trying to shove the square into a triangle shaped hole.

ertyu
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Re: CDR's Journal

Post by ertyu »

CDR wrote:
Wed Sep 09, 2020 10:38 pm
I procrastinate going to bed so I end up waking up the next day too tired to get out of the loop.
If I ever catch myself here, it's a sure sign that I dislike my life and I want to carve time away from it at the end of the day. Idk why my lizard brain thinks that not going to bed carves out a pocket in space-time and postpones tomorrow morning, but then I've given up seeing sense in lizard brain, so :). In the end, I could not manage and sustain the pressure I had put myself under. If you know you work better focusing on one thing, then do. There's this quote, it takes much less energy going from good to great than going from bad to mediocre (Peter Drucker?).

What's holding you back from accepting this about yourself and designing your life accordingly?

CDR
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Location: Canada

Re: CDR's Journal

Post by CDR »

I read what you said this morning before work @ertyu and after taking some time to think about it, I think it has been a combination of myself, and feedback I've gotten from supervisors who have told me the way I 'ought' to work that has been holding me back to accepting this and planning accordingly. I also have the feeling that this way is wrong as I feel that society encourages splitting your time between different things.

I much prefer to complete something in a single sitting, no matter how long it takes. I tried it today at work, I dedicated the day to just one part of my job and did as much in this area as I could, while still handling emergencies if required. Overall I feel much better about today's work, as I got through a chunk of tasks that were hanging over my shoulder and causing stress. I am going to repeat this method for the next week and see how it works for me. Thank you!

CDR
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Location: Canada

Re: CDR's Journal

Post by CDR »

I've been trying out this technique and it isn't a cure-all, but it's better than what I was doing before.

In the name of single thought-ness, I've moved electronic repair up on my list. I kicked my practice off by unsoldering parts off of an alarm clock.

I followed that up with a repair of DWs old laptop that she no longer uses. I started the repair yesterday when I should have been going to bed. I was fixing it for practice, you can read more about it here: viewtopic.php?f=6&t=9739&p=226703#p226703

While I made a mistake and ruined it for myself I want to mention something. I did this repair with a radioshack 15v/30v soldering iron, electrical tape, wire stripper, and an old pocket knife/multi-tool. While being frugal with existing tools is nice, it would have been a lot easier (and faster) to have:
  • A thinner gauge of solder
  • Separate flux
  • A cheap third hand
  • A stand for the soldering iron
  • Some brass shavings or sponge to clean the iron
Altogether though, I managed to get it done with my limited toolset.

I would like to DIY a fume exhaust because I am using lead solder and such. I was going to wait until after I sold some old stuff, but I'm considering ordering the parts and getting it done, no need to be so frugal that I damage my health.

In other news, I've decided to start a remote support side hustle. With a second wave coming, I'm thinking people would rather have their computer viruses removed at home. I plan to reinvest the profits back into the side hustle. I'm thinking this will have a compounding effect of

1) Getting experience that I can add to my resume for my transition back to IT
2) Create a separate stream of income to invest in new skills, tools, or the side hustle itself
3) An interesting project to bring some spark into my life (mental health boost!)

At the moment, my current calculation is that the monthly cost of running the side hustle would be much less than what I would charge one customer. That assumes I don't get errors and omissions insurance, or any type of insurance at all, which I realize is risky.
Not sure what to do about insurance, I'm open to others' opinions and experiences on the matter. If I goof a remote support session, I could be in big trouble without the insurance.

Ignoring insurance, after three customers I would have enough money to:
  • Register a business name in my province
  • Register a domain for a year, with 2 email accounts at the domain
I would then use this domain with Mailchimp, whose free tier lets you host a website and manage 2000 contacts for marketing purposes.

Over a year, these things together cost $3/month with tax. As long as I can get 1 client a month, then these costs are worth it.

After that, the next thing to save up for would be a used computer to host an Asterisk or FreePBX server on and buy a SIP Trunk to have a business number. I think the phone number is important, as without a phone number I eliminate a lot of potential customers. If their computer is not working well, or they are technically challenged, then the phone would be their preferred avenue. Self-hosting a PBX also means I can control mailbox options and create some custom menus. Not sure how deep I will fall down the rabbit hole on that one.

The computer itself would probably cost two customer repairs, the phone number would require an increase to 3 clients per month to be worth the cost.

Depending on how cheap I go on the used computer, I will also self-host open source ticketing software to keep track of customers and problems. I could even throw some appointment booking software, and a Facebook chatbot on there to help answer Facebook messages. I suppose after writing all this out, I realize investing in the computer would be worth it for this other software alone, regardless of whether a phone number is a good idea.

The great news is if I do take the time to set up and self-host all this software, especially the PBX, this would all be great experience for my resume.

After all that, I would start investing in tools for basic micro soldering and SMD board repairs, and start using profits to purchase broken things to fix and resell for practice, before getting a P.O. Box and start doing specific mail-in repairs of client electronics (starting with handheld consoles).

That's beyond where I am now. I need to start by doing some unbranded work to get the starting capital. Then I'll be able to walk the talk.

CDR
Posts: 21
Joined: Sun Sep 06, 2020 9:45 pm
Location: Canada

Re: CDR's Journal

Post by CDR »

September Finance Update:

While it's not the end of the month, running out of tape in my label maker motivated me to calculate my expenses now.

I've not yet received my second paycheck for the month. Without this second paycheck, I have a savings rate of 75%.

This is missing some expenses, my bank didn't include some expenses from this weekend in the export.

DW and I go for all you can eat (vegan) sushi once a month. Outside of this, I try to spend $0 eating outside the house. The last few months have been problematic for me. I've been purchasing things from a vegan restaurant near my office, and other locations.

I've suppressed these habits so far this month. My biggest expense since my last financial post was almost $18 at an electronics store for solder wick and heat shrink tubing. This was a bit of a mistake on the heat shrink tubing, as when I got home, I realized my Dad already had some I could have used. Oh well.

So far the biggest expense this month was cash to a friend who got married. We skipped out on the wedding due to the global pandemic currently happening...

Remote Support Side Hustle:

I finally stopped messing around and posted my first Kijiji ad today. It's not very good, but I figured I should get something up and iterate on it, instead of trying to create the perfect post the first time around.

CDR
Posts: 21
Joined: Sun Sep 06, 2020 9:45 pm
Location: Canada

Re: CDR's Journal

Post by CDR »

Another note on the finances. I watched a LinkedIn Learning course (free access from my college!) on the reasons why small businesses fail: My notes for my journal

1. Lack of Startup Capital
Many small businesses fail to get off the ground because the operators do not have enough capital to make the initial purchases required, and to stay in businesses even as things "warm-up" in the beginning

2. No Understanding of Cash Flow
Many small businesses do not keep a cash forecast, i.e. try to predict their cash flow for 3-4 months into the future. This is important as there can be a gap between when a business needs to spend money, and when it gets money owed from clients or other businesses.

3. Improper Record Keeping
Many small businesses do not track what goes in and out each month, and who they owe money to, and who owes them. This means the business has no data to crunch numbers on profitability, break-even point, pricing, who their biggest clients are, if they need bridge credit, etc.

4. Proper Pricing
Many small businesses struggle to price things with the full cost in mind. Not just rent, but taxes, founder wages and etc. Novice consultants often miss the idea that someone is not just paying for a 1-day presentation, but the prep and travel time as well.

5. Controlling Growth
Growth is an apparently risky business. The teachers of the course note that if an organization is having a profitability problem, they should never expect growth to solve the problem. The profitability problem should be resolved before growth happens. They mentioned a Harvard Case Study of Home Depot.

Clearly, 2 and 3 are relevant to personal finance as well. It seems that a cash forecast is a budget. For some reason, this change in terminology motivated me to create a "cash forecast" last night for October. However, at the end of the day today at work, I started to realize the power of forecasting costs 4-5 months in advance.

This is not something I've thought about much, because until recently the vast majority of my cash went towards paying tuition or saving for individual goals (travelling to visit my then-girlfriend, now DW, etc). Additionally, as someone who intends to spend low, it has usually worked out that way even though I did not keep a budget.

But, I can now see how forecasting can help me keep my savings rate high on a month-to-month basis, and help me organize for upcoming expenses. I also think it will help prevent life-style inflation as, hopefully, my wage increases with age and experience.

-----------------------------------

A tangentially related point: I've started doing the work of putting together a book list of all the books I would like to read (at the moment). I will organize them by books I have, books I can get as audiobooks, ebooks, or books from my local library, library in the region, university library in the next city over, second hand, and finally availability on audible and amazon.

If I want the most bang for my buck on audible, I need to ensure I am only getting audiobooks not available at the library. Currently, due to the pandemic, everyone in the city seems to be using e-library features. Many of the audiobooks I would like to check out have waiting lists 5-6 people deep. Organizing everything I would like to consume will help me better maximize my potential at getting the audiobooks I want to listen to for free.

The additional benefits here are:
  • figuring out which books I want to read and have an audiobook available and therefore should not be read
  • This organization + making some room in my evenings will motivate me to start reading more books (vs listening only)
  • This organization + finding some decent software to take notes in will mean I actually take notes of what I just listened to or read.

basuragomi
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Re: CDR's Journal

Post by basuragomi »

Obligatory plug for Tiddlywiki - it's organized in a wiki style format so it is incredibly easy to crosslink notes to link shared concepts, alternative interpretations, hierarchies of concepts, sources, reference quotes, etc.

One reason you may have missed for small business failure is overly demanding success criteria - the benefit of ERE/extremely low expenses is that you can have a successful business (in that it is profitable and you can continue indefinitely as a going concern) that only pulls in 4 figures of annual net profit. Someone with a high-expense lifestyle would fail with that net income even if the profit/labour hour ratio was incredibly high. The niches available for success are more abundant as a result. E.g. maybe you could focus on a specific vintage electronic mod/repair.

CDR
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Location: Canada

Re: CDR's Journal

Post by CDR »

@basuragomi thanks for plugging Tiddlywiki. I actually used this when I worked as a computer technican, I started trying to document all the issues and knowledge I had built up after working there for so many summers. I ended up taking my work with me since no one was interested. But now that I have been reminded, I think I will start using it!

Thanks for bringing in ERE to reasons why small businesses fail, I think that is really common. Good idea on focusing on a specific niche in this frugal subsection. There are a few of these repair niches I have been thinking about, but I can really only work them out cost wise if I can pick-up, or customers can drop off their stuff. Over postal mail it becomes too expensive.

CDR
Posts: 21
Joined: Sun Sep 06, 2020 9:45 pm
Location: Canada

Re: CDR's Journal

Post by CDR »

Sept 2020 Finance Update

Savings Rate: 83.03%
For September I will:
Cut out all outside snack and food purchases, this is sometimes due to poor planning, if I know I am going to be out of the house for some time, I should bring food (going forward)
After September 8, I removed all outside food purchases due to poor planning, leaving just once purchase that qualified as a date with DW
Buy nothing from Amazon or Value Village (going forward)
Broke this rule when I purchased a star wars bedsheet I am planning on sewing into PJ Pants. But, the time scale is all wrong, I should have waited
Ensure I put my parking pass on my car, as I spent $40 in unneeded fines last month
No fines this month.
I spent around $18 on supplies for my failed laptop fix documented above and in the repair/fix it log. They are all useable again for other repairs.

I originally stated that my goal was to have a 90% savings rate by October. Yet, after some thought, I didn't think this would be helpful to me if it meant reducing the investments I could make in myself and my skills. Given that I currently have almost 0 paid obligations, I figured now would be a good time to commit some minor spending (10% of my monthly paycheck) to improve myself.

So for October 2020, my current savings rate is around 60%. It will increase when I get my second paycheck.

The majority of the expenses fall into two categories:
  • 1. Tools and Materials to invest in my skill development
  • 2. Things to practice my skills on
For category one I bought sewing tools and materials (thread, pins, etc). I also got some electronic related things: flux, desoldering pump and tweezers. I tried to keep the tools as minimal as possible, as I would prefer to be reinvesting money I earned from these hobbies back into acquiring things. Everything is coming from China, so it is going to take a while, but it was very inexpensive.

For category two I purchased the cheapest per unit lot sale of broken Playstation 1 systems and PS1/PS2 controllers I could find. I plan to fix them and resell them on eBay and at least break even, if not profit. I have been working on the controllers and it seems all of them will need some soldering to repair. This is the practice I wanted, and why I will be happy to break even. But, if I can fix everything I bought (unlikely) I would be able to pay myself back + have double the original investment to put back into this idea. So fingers crossed.

Since I won't sell everything all at once, It would be best to split the profit on each sale into 3 pots:
  • Pay Back
  • Equipment/Supplies
  • Things to Fix.
For now, I will worry about fixing what I have, as it is going to take a while to get parts in from China. I'm planning on ordering extra to save some time in the future.

The other thing in category 2 is a used server and network switch, which I plan to use to practice my networking and system admin skills.

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