Hristo's FI Journal

[jennypenny]

- Essential oils (whatever that is; is that what our office manager is always going on about?)

Meh ... learn to like the scent of lemons.

[Hristo Botev]

Continued good news on the spending front (relative to past performance), or at least movement in the right direction. We had another month with a 65% savings rate, with just over $6,100 in spending for the 4 of us once you take out charitable contributions. So 2021 is off to a good start.

Also, this month we FINALLY dropped below a 10% [safe] withdrawal rate, at 9.13%; down from 73.35% when I started tracking this back in January 2016. So, working our way to 4% and then 3% as we increase our net worth and continue to cut spending, bit by tiny little bit.

ETA: I think the last time I was able to get "down" to this level of spending for a month it was only because I'd spent most of the month in the hospital due to the bike accident; which isn't really an apples-to-apples comparison.

[Hristo Botev]

Put this in the category of behavior that is both ERE and non-ERE.

Some of you may remember me lamenting my shock at a $30+ outing to one of our local ice cream shops last year, which served as part of the catalyst for some more DIY/ERE behavior (DD's candy bar business, my sourdough starter, DW's sandwich and sub bread, the family's no-churn ice cream, my home brewing, inter alia). Well, the no-churn ice cream is pretty good, but for several months now DW has had her eye out for a used Cuisanart 2qt ice cream maker, which she'd read is one of the better-rated appliances for automatic churned ice cream. Now, on the one hand it's very much not ERE to buy an appliance for a job that can be done just as well if not better without an appliance, e.g.:

Much like the powered screwdriver, the automatic egg boiler, and bread making machines, power saws are just yet another sign that the world has gone crazy. Sawing, like screwing (ahem!), boiling eggs, and baking bread can be done manually.

https://earlyretirementextreme.com/elim ... costs.html

But, it's going to be mostly DS who is making the ice cream, and at this point we need to keep things rather simple for him.

So, after playing hardball for several weeks with someone from a Facebook group selling a never-opened/used ice cream maker, DW scored this shiny new appliance for $40 (looks like they sell new for $100):



And with some very basic and cheap ingredients we had this in less than .5 hour:



Which left us with a nearly full 2 qt. Pyrex container of ice cream, even after the 4 of us had our share for the evening:



The kids will certainly turn this hobby into a profit center, as DD did last year with her highly successful candy bar hobby. And as long as they clean up after themselves and allow DW and I to have all the ice cream we want, we probably won't make them pay us back for the ice cream maker or the cream/milk/sugar.

But at a minimum, for roughly the cost of an expensive "cheap thrills" (ha!) outing to our local, boutique, craftsman, artisan, whatever ice cream parlor, the family got an appliance that will forever replace such outings in the future. And as DW said last night, between the sourdough bread, the home brew, DD's candy bars, DW's pimento cheese, and now the ice cream, we've got most of our family's external gift-giving taken care of, without needing to step foot in a store except to buy the ingredients.

ETA: As an aside, we used to have this breakfast diner in our town that was relatively inexpensive, for a HCOL area, and the wait staff had shirts on the back that said something like "don't be so uptight, it's only eggs," in a way that I at least think wasn't meant to be ironic (I can never tell). Anyway, that place ended up closing after a decade or so in business. Well, of course it got replaced by a very high-end, very expensive "diner" where you can expect to pay as much as $15+ for a breakfast plate or sandwich. Now, the food is REALLY good; but, nevertheless, it's just eggs. This is the kind of consumerism I'm finding it VERY easy to opt out of.

[Qazwer]

From an ERE perspective - you forgot resale value at some point in future

From a human perspective - yum

From an economic perspective - a lawyer spent how many hours negotiating for $10 discount on an appliance (at least advising family)? While also missing out on how many delicious treats?

Have fun with new toy

[Hristo Botev]

From an economic perspective - a lawyer spent how many hours negotiating for $10 discount on an appliance (at least advising family)? While also missing out on how many delicious treats?

Ha! Well, it wasn't the lawyer that was playing hardball; that was DW. And by "hardball" I mean she made an offer of $40 several weeks ago and, IIRC, the seller was taken aback by what she deemed to be a low-ball offer, given that it's 60% discount on a brand new appliance. DW shrugged and said, OK, let me know if you change your mind. And a couple days ago, the seller changed her mind. One of DW's many superpowers is that she gets a price in her mind that she's comfortable with, and she doesn't budge, not even a little; she's very much someone who can distinguish between needs and wants (something I almost completely lack the ability to do).

[Western Red Cedar]

That ice cream looks delicious!

I'm not sure if it will be worth the effort, but you might consider tracking the costs of the ingredients so your kids have a better understanding of "business" expenses. It reminds me a bit of Barbara Kingsolver's daughter who raised chicks and sold eggs. It was an eye-opening conversation when her mother showed her the costs of the chicks, grain, and other expenses that get hidden in the bank of mom and dad.

[Hristo Botev]

Funny, we started doing this with DD's candy bars last year, because she was getting a little too productive, and really DW and I were getting annoyed that a shelf of our fridge had become permanently taken over by trays of chocolate bars. Anyway, I totally agree that the kiddos need to learn that there's a COGS section of the P&L statement; it's not just about time put in and revenue generated.

[mooretrees]

It's so interesting that food/drink is where your family has made so many gains in skills. Shows how central food is to our lives, which just might be the most obvious thing ever said.

Growing up, we had every single sports team party at our house. They were always pizza parties. We made the dough, sauce and had the cheese, everyone else brought toppings. Some kids had never made pizza at home before. Now, your family can do that with ice cream! And like you noted, gifts are really easy now. I'm tempted to start making choc bars, do you have any good recommendations for recipes or blogs?

[Hristo Botev]

I like that about the sports team homemade pizza parties, a lot. I think I’m going to steal it. For chocolate bars, it’s weird to say this, but I’ll have to ask DD (she’s growing up so fast!) and get back to you. I know she bought the silicone molds from a hobby store, after having issues using the cheaper clear plastic molds. But I’d suspect you don’t necessarily nerds the purpose-specific molds; not very ERE. But I’ll ask about recipes; my guess it’s just Joy of Cooking—and then she always adds something extra like Oreos, or marshmallows, etc.

As for the food being central, DW became a dietitian because she finds food and how people eat do fascinating; and that definitely translates to our eating at home. She’s constantly trying new things, and we eat very, very well. I sometimes get annoyed with the very high food budget line item, but then I remember growing up on fish sticks and hamburger helper and I realize how much value we get for that high spending. And DW is definitely starting to embrace the build your recipe from what you’ve got instead of the inverse. But it’s a real challenge with a full time job and kids activities.

[Hristo Botev]

A spendy month, almost entirely due to payments for upcoming summer camps for the kids ($2,607.13 for a couple weeklong sleepaway camps and a couple weeklong day camps). It's certainly been wonderful not having to pay for aftercare since DW said "see ya!" to her job in management; but, we still have to figure out a place to stick the kids during the summer months. This should be our cheapest summer yet in that regard, as we've tried to be a bit more strategic with things like "grandparents' camp"; and there are some cheaper camps that model the school day more than the workday (ending around 2 or 3pm, as opposed to 5 or 6pm), which we couldn't take advantage of in the past but will be able to now with DW's new work schedule. We've talked with friends about doing some version of a "taking-turns" camp (not a very catchy name, I know), with 1 or 2 parents a day taking the day off of work to watch everyone else's kids, taking them hiking or camping or wherever, and then rotating that duty across all families; but we've not yet pulled the trigger on that. That said, it'd be a good use of social capital and could still conceivably happen for 1 or maybe 2 weeks this summer.

The good news, however, is that we've gotten to a point where even our "spendy" months still have us saving more than 50% of our income (53% this month), and we are still over 60% for the year, following January and February's 65% savings rates. Things will start to look a good bit different beginning in April, as we refinanced the house and will start paying property taxes and insurance directly, instead of escrowing it. And we'll also be paying the kids' school tuition all at once, instead of spreading it over a 10-month period (this will give us a discount of a few hundred dollars, which is nice, but I'm growing to prefer big annual payments for various head tax type expenses (taxes, insurance, tuition), as opposed to doing monthly installments). So this means we should have some individual months that are at 70% or even 80%, with a couple other months likely below 50%; but annualized things should hopefully settle out in the 65% to 70% range.

With increased spending this month the [not-safe] withdrawal rate popped back up above 10% again, to 12.08%, but I feel confident that we'll end up averaging out safely below 10% for the year, on our way to 4% and then 3%. Something that has become quite obvious to me is that although an increasing net worth is nice, it's reducing spending (slowly and incrementally, but steadily) that has the biggest impact on the withdrawal rate now that we're hovering around and just below 10%. And, frankly, I have so little faith in my stock market investments right now that I'm much more interested in "investing" in things (hard assets, skills) that will allow us to live well despite spending less and less cash. Right now I feel much more financial "security" knowing we could live well on less than I do looking at the balance of our ever-increasing (inflated?) index fund investments.

ETA: I've been checking in on the Wheaton Level discussion sporadically, and because I haven't kept up with it sufficiently to feel like I have the right to chime in on it there, I'll instead put my thoughts here. Those thoughts are that I'm starting to think of the whole "Wheaton Level" progression as it concerns ERE, and the discussion around it, as kind of obnoxious, and really a turn-off. Perhaps (or probably) that's because I'm somewhere in the middle of the WL table, and so that means whatever that means about what poor-little-Matrix-dweller me is expected to think of the Morpheus's and Neo's of this forum, who are higher up on the table. But what's turned me off of that whole discussion is the entire Plato's Cave analogy, with (now) WL10 seen as some sort of "end"; Nirvana or enlightenment or whatever (until someone decides to create a WL11? or WL12?). I know I'm being unfair, but that's why I'm putting this here and not there. But ERE for me simply is not (and is incapable of being) an end or a purpose. It's a tool; a means to achieving some end. But some of the discussion around the WL table thing puts ERE as something more than that. And, frankly, turning ERE (and WL10 or whatever) as an "end" is just another (better, yes) way to define yourself in consumer terms, though as an anti-consumer, I guess.

Perhaps this is just my deeply-ingrained kneejerk reaction to reject anything that is not actually transcendent being treated as somehow transcendent, whether that's whatever consumer (or anti-consumer, or minimalist, or FIRE, or ERE) "movement" people feel like obsessing about at any given time, or whether it's political tribalism, or careerism (or anti-careerism), or the cultural tribalism surrounding the two sides fighting about the wokism/CRT/SJW/whatever stuff, or whatever other important but not transcendent thing people choose to spend all of their time obsessing about as some sort of distraction, rather than simply focusing on the true, good, beautiful.

I mean, spend less and consume less "stuff"; that's it. It's not necessarily easy to do (certainly not for me, with lots of momentum built up over 3-4 decades going in the other direction), but figuring out how to do it certainly doesn't make you a Buddha.

That said, per my comment above about spending vs. increasing net worth, I'm still at whatever WL has me engaging regularly in "spreadsheet therapy," but I've noticed lately I spend more time analyzing the right side of the spreadsheet than the left, with the right side being the spending/savings rate/withdrawal rate side, and the left side being the net worth calculations. I'll leave it to the WL police to tell me what that means in terms of my progression toward ERE enlightenment.

[guitarplayer]

FYI I read your journal and like it. Cannot comment more now just now because DW pulls me out for a walk to look for wild food. I'll try later!

Coincidentally, I watched Matrix 3 a few days ago.

I think I read you wanted to learn Spanish and people suggesting full immersion. Really down to temperament. I spent about 6 months in full German immersion but independent work with the dictionary was a must for me to ever trying to grasp it (I had some success eventually). DW is a native Spanish speaker but I know Spanish mainly from DuoLinguo from when I was still trying to pick her up. Tried Spanish days a few times but we revert to English being the lingua franca.

[Fish]

But ERE for me simply is not (and is incapable of being) an end or a purpose. It's a tool; a means to achieving some end.

Thank you for putting this into words. You’re not alone in thinking this. As I see it, changing the table scope from personal finance to leaving “Plato’s cave” is precisely intended to repel those of us who have a more utilitarian view of ERE. Jacob has been adjusting his messaging over the years, to cultivate WL6+ thinking in these forums. This is the latest in a series of actions to purify the community, and a rather overt one.

As I’ve regressed in my focus to WL3-4 (to avoid friction with my wife), I’ve had to silently excuse myself from forum discussion that is increasingly irrelevant to me. That is to say I found myself “purified.”

The merits of WL5 frugal-FIRE and “alt-capital” WL6 are well-established, but there is no reason to go further presuming early retirement as the goal. The theory behind WL7+ is beautiful in the abstract, but impractical for my personal situation (too extreme). There definitely is a Wheaton effect at work here!

Despite my views, I don’t mean to disparage WL7+ or those who pursue it. Moving up requires focus which has an opportunity cost. It can be fantastic if it’s aligned with your life or web-of-goals. Otherwise it’s impractical. The new table provides a more compelling vision for pursuing the higher levels. Autonomy is much more interesting than creating systems for their own sake.

To make a bad analogy, in terms of utility: WL3 is like high school; WL5 a bachelor’s degree, WL6 a master’s degree, WL7 a Ph.D, WL8 a postdoc. Jumping through these hoops is needed to become a WL9 professor, but for a person with different life goal there is no harm in stopping earlier. In many cases it is even desirable.

Sorry if this is polluting your journal. I would also like to say that I find your example inspirational: an intelligent high income earner with a family, taking concrete steps to become WL5-6 instead of just talking about it. Like you, my financial goal shifted over time from FIRE to some form of generational wealth though it is more of an aspiration for now. Looking forward to reading more as your ERE journey progresses.

[Hristo Botev]

Interesting take Fish (and don't worry about polluting my journal; rest assured my own entries have already turned this journal into a Superfund site).

I just spent an hour writing a very long screed about all the various ways I think it's just really condescending to apply Plato's Cave to consumer behavior, and attributing ignorance and fear to the salaryman, working man, or business man that just goes to work every day to make a living to support his family and provide for their comfort and well-being, and their future, and to support the comfort and well-being of his community, his employees, etc.

But, for once in my life, I'm just going to zip it and censor myself, and say simply, further to your "bad analogy" (which I quite like), I have no interest in a postdoc, or a Ph.D, or perhaps even a master's degree. Honestly, to illustrate using a couple of my faves as examples, Wendell Berry and Paul Kingsnorth would probably only clock in at a WL7 or 8 on this new WL table; which leads me to think there's no real way to achieve WL 9+ without leeching off of society.

OK, I'll also say that, paraphrasing @Jacob from a recent podcast, ERE isn't about becoming useless to people, it's really about becoming more useful. I think that's great. But I don't think Plato's Cave has a damn thing to do with it.

[mooretrees]

I've watched the Wheaton thread with interest and some lack of understanding too. For some folks it seems like increasing their Wheaton level IS the goal. I know it's more than that, but I don't really get it. I don't really care what my level is, and I've never found too much in common with the chart; am I a five because I am buying used now? I have found it useful just as a way to understand why someone isn't interested in my obsession with growing my own food. But the actual levels never meant too much to me. I'm also not the deepest thinker on the forum .

My thoughts about the Wheaton level has become just stop thinking about it and LEARN some stuff. Do something and learn skills, who cares in the end if you're a certain level if you can do a bunch of cool, really useful stuff?

[Western Red Cedar]

@HB and Fish - I'll just chime in briefly to say that I think the dynamic of making lifestyle changes is quite different when you are in a committed relationship and/or raising kids. I've realized that more radical changes in my own life (housing, transportation, etc.) may negatively impact my marriage and it isn't worth it. I can however, engage in new ERE-related activities that strengthen my relationship with my wife like baking bread, fermentation, walks, yoga, local travel, as well as supporting her hobbies like sewing, fashion design, jewelry design, etc...

I'm also regularly surrounded by "salary people" who are working every day to address homelessness, climate change, loss of biodiversity and critical wildlife habitat, suburban sprawl, infrastructure maintenance, multi-modal transportation, the protection of agricultural and timber lands, and a host of other issues. Even though many of us are specialists, we are the actors behind the scenes working tirelessly trying to improve the built and natural environment. The salaryman vs. renaissance man isn't black and white in my perspective.

On the other hand, I really appreciate the ERE or WL focus on minimizing resource consumption. One issue with mainstream FIRE is a disconnect between certain lifestyles and the relationship to climate change.

[Hristo Botev]

I think I’m finally growing tired of the egocentric and self-centered focus of some of what I’m seeing on this forum. Do something to be useful to your sister and brother. What else is there? My job isn’t to sustain your leeching ass living off of dividends and capital gains from an investment portfolio that is dependent on me and folks like me showing up for work every day, day in and day out. If you “retire” in your 30/40s, my question is what the hell gives you the right? What did you do in your 30 years that entitles you to spend your next 50 having society support your leisure activities? Spend less and consume less; certainly. Don’t be so wasteful, absolutely. But “retire”? Who the hell do you think you are? What makes you so damn special? You really think it’s ok for someone else to work 52 weeks a year, for 40 years, picking up your trash and fixing your toilets, so you can have a life of leisure reading whatever the hell it is you’re reading and developing your hobby skills? I hear “Renaissance” man and I think of Thomas Jefferson; and, well, that guy’s leisure was dependent on slave labor. Same for Plato, while we’re talking the allegory of the cave. What’s any different about living off of the dividends of shit companies that profit off of the underpaid and overworked labor of your neighbors, thanks to the barriers to entry they created and politicians signed off on, selling shit you don’t need they dug out of one hole, shipped all around the globe for manufacture, until it will finally be stuck in some other hole? What’s WL10? It’s some guy positively contributing to his community by employing people, supporting families, providing goods or services his local community actually wants and needs, and doing it virtuously. Savings rate, withdrawal rates, “robustness” rates, those are all just metrics by which non-doers can measure themselves to feel good about their non-doing and their leechnessness. Congratulations, you figured out a way to “hack” the system, at the expense of good people who just want to go to work every day and provide for their families while feeling they’ve contributed something to society. Plato’s cave? You really think you’ve achieved some higher level of reality because you’ve figured out that if no one is dependent upon you, you don’t have to show up for work every day? You think I don’t know that I could abandon my family and my church and my colleagues and clients and go live in a F’ing van and never have to work again? That makes me some sort of Buddha? An “enlightened one”? What about duty, fidelity? What about virtue? What about being called for some higher purpose than just figuring out how to feed and shelter and entertain myself?

Figure out what skills and abilities God granted you, and figure out how you can use those skills and abilities to benefit your brothers and sisters, to be useful. There’s an “end” for you; an ultimate purpose. It sure as shit makes more sense than “chopping wood, carrying water.”

[Qazwer]

Baby and the bath water - throwing out the good and the bad -

First - spending less - good for environment and individual

Second - using multiple forms of capital for lifestyle design - can decrease waste and improve lifestyle regardless of income level

Third - network and systems theory applied to lifestyle design - can decrease waste and improve the environment

Fourth - return to 1950’s style of living - we as a society have increased the amount of goods which we can decide to use or not use that living the way our great grand parents did can still produce a good life and be good fir the environment and our selves

Fifth - skills development - relearning 1950’s skills and also learning to not be afraid of technology - we have more resources now to learn more things than any time in history

No model of living is perfect - you take what is good and learn from it - ignore the rest

I do not believe in the same religion as you do. But I have volunteered organizations that are very religious. They do good work and help people. I just step away while they pray. You can never find a group that has everything you want. You look forward ones that are close enough to your values.

[Mister Imperceptible]

I enjoyed the angry screed.

Something I have learned is that two people can have the same exact information and respond completely differently to that information if their values are different. Trying to change the values of others, if not absolutely impossible, requires a Herculean effort of world-historical religious genius. I realized this because when I learned of many of the ugly things in this world, I was absolutely stunned at the way most people respond to this information when it is presented to them. That their reaction was so different from mine indicated that their values were irreconcilably different. There was a rupture between me and those I called friends in real life over the past few years, and more recently, a rupture between myself and the forum which I had been substituting for the friendships I no longer had in real life. I have accepted this irreconcilable difference in values and with this acceptance there is now freedom to focus on that which matters to me. You know what matters to you, and when you accept that the values of others are different and irreconcilable, you no longer waste energy trying to bridge the divide. You become free.

[theanimal]

This has been the main objection to ERE and the FI sphere since the beginning.

Jacob and others have written on it here a few times. Some posts/threads worth reading.

https://earlyretirementextreme.com/rant ... tions.html

viewtopic.php?t=601

I don't have anything novel to say in addition. Others don't hold the same values though as MI said and do not feel the same obligation to work for society. I certainly don't. That doesn't mean I won't do anything that may provide of use in a societal level but that's not my objective, at least at the moment.

[white belt]

I agree with MI and theanimal that your objections likely come down to personality and value differences. I’m reminded of this blog post: https://earlyretirementextreme.com/pers ... tance.html

I think ERE likely draws many rational types and some artisan types, while it doesn’t appeal as much to guardian types. Jacob is definitely a rational type while I think forums members like 7WB5 and J+G skew more artisan. Your last post strikes me as coming from a mostly guardian perspective, although these classifications are just a framework and not set in stone. I can understand why you would think that a group of artisans and rationals seem self-centered.

In terms of this forum skewing towards WL6, as Fish has implied, I actually think that is one of the positive developments over the past few years. This is the only place on the internet I’ve found that has such discussions. If I want to learn more about optimizing spending/investing, I can hop on the MMM or Bogleheads forums.