Funky Freedom's Journal

[FunkyFreedom]

Post # 001, 12/14/24

I read ERE a year or so ago and started tracking my monthly savings rate, expenses as percentage of my salary, and NW to Annual Expenses ratio like I see others do in their journals. I'm a 46 year old male with no kids, living with my long-term female partner in a HCOL area in the US. I have no car, earn about 2.5% of my salary from a hobby (playing music!), and get a 25% employer match to my 401K. My goal is to save enough money to be able to work part time and have more time to be free to do whatever I want. I think that would be a nice way to live! I might want to explore starting my own business or get into different work that is more fun or meaningful. And of course would want to do more music! It's the "FI" part and not the "RE" part that appeals most to me.

My savings rate as a percentage of my salary is about 48%, but that includes hobby income and 401k match in the numerator but not in the denominator. My NW = 4.7x Annual expenses, but I don't think I need to get to 25X Annual expenses to switch to part time work, due to the continued income from work and the fact that the amount of expenses to be covered by savings would go down when I start collecting Social Security. It doesn't seem like a challenge to reach a high savings rate because I mostly don't want things that cost money, beyond essentials. I enjoy walking and socializing, and music brings in money.

I'll plan to follow up with a post with my November monthly data. I'll try to go out and post comment to other folks journals and invite others to do the same here. It would be really nice to interact with folks here who are on a similar journey.

[philipreal]

Welcome to the forum! Good to increase the size of ERE music gang, I just got home from a concert about 30 minutes ago. If you're comfortable, what instrument(s)/genres of music do you play? Hope to see your continued posts.

[FunkyFreedom]

Hi Philip,

I play sax, and will sing backing and sometimes lead vocals. I’m typically able to sit in without rehearsal with any style of music (except jazz) at the amateur level. Typically I’m performing with blues, R&B and maybe pop cover bands. It’s about having fun on my own terms without regularly getting home at 2am. I can BS jazz, and read sheet music, but getting good at jazz really takes a level of work that I’ve been too lazy to put in. Maybe I'll spend more time on it when I have more time to spend!

What is your instrument and preferred style of music?

[FunkyFreedom]

Post # 002, 12/15/24

Here's my first monthly post of my savings and expense data. I'm planning to just use percentages and ratios.

November 2024

Expenses as % of salary
24.9% Taxes & Health Insurance
2.4% Health
0.0% Shopping
2.2% Eating Out
7.2% Groceries
2.7% Utilities
1.1% Transit
0.4% Charity
15.1% Rent
1.4% Entertainment
1.7% Gifts
2.5% Household
2.6% Student Loans
64.2% Overall Expenses (as a % of two biweekly pre-tax pre-deduction salary deposits)

37.1% Savings Rate (as a % of two biweekly pre-tax pre-deduction salary deposits)

4.7x = NW/Annual Expenses

November included the first check from an annual pay raise (that kept up with inflation) plus some retro pay for that raise.

[philipreal]

I play violin and piano! I mostly end up playing classical music with my violin, but I also play some jazz piano and am the pianist for a local church. Skill-wise, I basically only have experience within my local area, which isn't very big, but is big enough to host a symphony orchestra that pays its members and has like 6 big concerts a year, with a few smaller ones. There, I'm one of the best violinists, especially since the person who was far-and-away our best violinist moved away about a year ago, although she still comes to play in the larger symphony concerts. Piano-wise I wouldn't say I'm all that special, I'm good enough to show up and do jazz and can improvise a fair amount but it's nothing too notable in my opinion. One thing I want to work on going forward is how to get my own gigs/market myself some. I auditioned for the symphony a few years back and since then have barely lifted a finger to actually find stuff to play in, I just get asked to do stuff, which works fine when music is a fairly small side thing but is lacking if I want to make it anything more.

I will also say that people generally don't include their taxes in their expense data. There's nothing stopping you from including it if you want, but if you're comparing your data with others (or vice versa), it'll be good to know that/make it clear. This distinction may be important when considering your NW/Annual Expenses, since your tax expenses would assumably be much lower when no longer working.

[loutfard]

I will also say that people generally don't include their taxes in their expense data. There's nothing stopping you from including it if you want, but if you're comparing your data with others (or vice versa), it'll be good to know that/make it clear. This distinction may be important when considering your NW/Annual Expenses, since your tax expenses would assumably be much lower when no longer working.

I would rather not include personal income tax and social security contributions in my expenses. Nothing I can change about that.

I don't include my government pension on the assets side either. Government retroactively revises it for the worse every few years anyway.

[FunkyFreedom]

Thanks Loutfard & Philip!

Removing taxes will help me get my NW/Annual Expenses number up! I don’t include Social Security in my assets but may plan to do a bridge strategy that accounts for the expectation of receiving maybe 80% of my currently projected SS payment. Though I may have to project that downward depending on what kinds of policies are put in place over the next administration. Accounting for that in my planning allows me to get to where I want to be faster.

Philip, it sounds like you are having fun with music. That’s fantastic! To me, music is about people and connection! Kind of like that movie with the coal mining town marching band and the grumpy old dad saying “I thought it was music that matters. But that’s bollocks. It’s people that matter!”

I will have to figure out or maybe estimate my taxes (don’t want to have to go into my ADP account every month!) and recalculate my NW/Annual Expenses.

Any suggestions on other peoples journals that I should check out? Either musicians or folks who track their data monthly?

[FunkyFreedom]

Rough re-estimate of November NW/Annual Expenses (not including taxes in expenses) is 6.4.

So from 4.7 to 6.4 with just a recalculation. Sweet!

[AxelHeyst]

Any suggestions on other peoples journals that I should check out? Either musicians or folks who track their data monthly?

For monthly tracking and graphing, C40's journal is worth checking out (start from the beginning). viewtopic.php?t=1344

[frugaldoc]

I would rather not include personal income tax and social security contributions in my expenses. Nothing I can change about that.

Is this entirely true though? I feel like there is a lot we can do as individuals to affect how much we pay in taxes. Now whether we choose to implement those changes is another story. Ignoring the expense of taxes is exactly what I would want a person to do if I were a taxing authority. If people paid attention they might discover their wage income is some of the most highly taxed income one could have.

This is why I calculate numbers with taxes taken into account and without so I can make an accurate comparison depending upon the circumstance.

[urgud]

frugaldoc: that might be true for Americans, but for some of us Europeans, there are remarkably few places to optimize, if any.

[frugaldoc]

frugaldoc: that might be true for Americans, but for some of us Europeans, there are remarkably few places to optimize, if any.

Ah, yes. Not something I had considered. But for we Americans, our tax system, while convoluted, does offer opportunities to optimize. Now, I am not advocating letting the tax tail wag the dog. I certainly wouldn't invest in real estate or oil exploration just for the tax benefits.

[FunkyFreedom]

Ah, yes. Not something I had considered. But for we Americans, our tax system, while convoluted, does offer opportunities to optimize. Now, I am not advocating letting the tax tail wag the dog. I certainly wouldn't invest in real estate or oil exploration just for the tax benefits.

I’m glad I’m providing a little controversy to prompt some conversation! I think maybe I’ll continue to post NW/AE as calculated without taxes (because it’s bigger and that’ll make me feel better!). But as I get closer to FI I’ll learn more about taxes and take into account how much I should be budgeting for taxes.

[FunkyFreedom]

Question to folks (who live in the US) - when during your journey (i.e. how close to early retirement or financial independence) did you start learning about and planning for tax strategies in retirement? If I were looking to do a draft budget annual budget for your first years after retiring (of for me, say semi-retiring) and wanted to include the tax expense piece, any suggestions on how to go about doing that? And how would you consider possible Roth conversions as part of that draft budgeting process?

Bonus question/topic - what are people’s takes on whether or how likely that the tax rate in the US will go up long term (due to national debt), and for those who think it will does that prompt Roth conversions?

[loutfard]

Ah, yes. Not something I had considered. But for we Americans, our tax system, while convoluted, does offer opportunities to optimize.

My wife and I do keep a very accurate overview of taxes and possible optimisation. We know our current situation just offers close to zero little wiggle room. We do use the very few optimisations there are.

I might not be able to push down taxes on earned income, but I still very much need to make fiscally informed choices, especially on how to earn small side income. Example. A dishwashing side job at the restaurant gets preferential tax treatment and yields 15€/h net. Given zero expenses, I need to charge a client at least ~50€/h including VAT to beat that.

[FunkyFreedom]

Post # 003, 12/24/24

End of year review:

Here’s an end of year review of the progression of my retirement savings:

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Tl;dr (added on 1/3/25)
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FINANCIAL

-SR 50%, NW/AE increased 50% to 6.1

-Next year NW/AE could reach 7.5

MAJOR PROJECTS

-Tracking all food & water intake; working with great dietician; feeling better by hitting all my micronutrient targets; looks optimistic to minimize or eliminate S.A.D. this winter.

-Walking more (3.9 miles/day 2024 vs 2.9 in 2923)

-Getting all the bands back together

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Detailed post below
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My NW/AE (number of years annual expenses of net worth I have; taxes not included in expenses) increased by 50% from 4.1 to 6.1.
-2/3 of that came from contributions
-1/3 of that came from market returns

My savings rate was about 50% of my salary, but I moved 64% of my salary into retirement/brokerage accounts. I don’t count my checking balance in my net worth for convenience, and I ended up moving a lot of my balance from checking to a new brokerage account. My partner quit her job and then got hired into the first job she applied to! It felt like a big risk she had to take and it has paid off big (for the both of us). I was keeping cash in my checking account in case her search was extended and I needed to cover for her for a bit. I’ve moved to a policy of keeping a fairly low checking account balance.

Next year, using my salary, my savings rate, and a return for my portfolio of 8%, my NW/AE would go up by 23% from 6.1 to 7.5. I’ll turn 47 next year. That doesn’t include any gains from either increasing my savings rate by increasing music income or creating new sources of income outside of my salary, or reducing my annual expenses.

If I subtract out my music income (which would continue if not increase after semi-retirement) from AE, then NW/(AE - music income) would be 6.5 for 2024, increasing to 8.2 for 2025 (if I also find a way to cut some costs to keep my expenses even with 2024).

My two major projects this year are going well!
1) Diet and exercise. My mood in northern latitudes is affected by the winter and it has been a huge drag on my life. I made it a project to address this through diet and exercise. I found an amazing dietician and started using an awesome food tracking app in October. I’m tracking all of my food and water intake through the app. The app provides a feedback loop where I can see if I’m low on a particular nutrient, find a food or supplement that has a lot of that nutrient, and go get it! Through the end of December, I’m hitting my targets (on a monthly basis) for all nutrients except for two. I have a plan to hit those nutrients in January. I’m being very disciplined about this but the app makes it feel like a fun game! By this time of the year I’d be starting to feel the winter. Instead I’m feeling better through the winter so far. I’ve also found a very close by gym (maybe 150 steps from my home) so I can go there to walk if needed on very cold days. I have my daily average miles walked up to 4.0 for December (compared to 2.9 for last December). I’m also using full body red light therapy at my gym about three times a week (evidently the red photons go deeper into your body than other colors of visible light, hit your mitochondria and cause them to create energy/ATP; I feel very relaxed and warm after doing the therapy), and making sure I wear hats and sweatshirts and crocs at home to stay warm. I’m also using a heated back pad every once in a while to feel warm, and I’m doing yoga one a week at the gym (which is only $30/month). I started taking a 5mg melatonin gummy which helps ensure I sleep well at night.

2) Getting the bands back together! As a musician I have performed in multiple bands or recurring jam/get togethers. I have been instigating getting a bunch of these groups back together mainly to have fun and socialize. Some of the groups haven’t played together since the pandemic or even longer than that. It’s helping me feel connected, and feeling connected is a big social determinant of health! I’m understanding how I can provide value to my community/network of friends by being kind of an event coordinator and just staying on top of proposing get togethers and occasionally bothering people, which is something that doesn’t get done if nobody does it (and then folks just don’t get together) but it’s an easy and rewarding lift for me. As I do this event coordination I’m getting feedback that I’m very organized, which is interesting to hear since I often get feedback that I’m kind of chaotic (aka very comfortable with things being spacially messy).

I’m starting to read the ERE book again on my Christmas Eve day off. Hoping to learn from folks here and elsewhere and hopefully find interesting and unexpected ways to improve and learn next year!

Comments and feedback welcome!

[delay]

Thanks for your journal update! I'm always interested in dieting. After 20 years of failing diets I came to the conclusion that having my mind tell my body what to eat can only work for a limited time. My mind doesn't really know what's good to eat, so during a diet my body becomes less and less content, until my body eventually overrules my mind and I quit the diet. This happens after 1 to 9 months of dieting.

In 2022 I started "intermittent fasting". Most days I eat between 14:00 and 20:00. I eat what I like and drink alcohol. This works great, 2024 saw my BMI above 25 for only a few weeks. I wish I'd found this before I wasted so much willpower on diets.

Looking forward to read how your weight journey progresses. Congratulations on the NW/AE progress and your partner's new job, and I offer my wishes for a happy 2025!

[FunkyFreedom]

Hi @delay,

Intermittent fasting sounds interesting. I’m glad you’ve found something that works for you! If I ever get around to trying that maybe I’ll ask for your suggestions.

I can provide more info about my diet. It’s not a weight-loss diet per se. Its focus is more on hitting all my nutrients, and then if I lose weight that’s a great side effect. The immediate desired result is wintering better! This would be amazing and life changing! And more long term the desire is to be overall more healthy and to help me avoid lifestyle related causes of mortality we see in the West. (This guy does good videos; I’ve also found some good medical articles via Google Scholar https://youtu.be/z4MFnrMpzBA?si=KT2IGqNte-sTkvQC). The video is about the K+/Na+ ratio. I’m getting that up above 3, but previous to that it was probably below 2 or closer to 1. From what I can gather this ratio is way off for most Westerners and when it’s off in the wrong direction for too long it elevates risk of cardiovascular disease, stroke, and cancers. I’m at the point where my sense of taste is heightened and I am tasting overtones that I wouldn’t taste before. A long time ago I lost 30 pounds on the “Eat To Live” diet (focusing on nutrient dense plant based foods) and my sense of taste also opened up at that time. Reacting to food and/or probably not getting enough of particular nutrients has been a struggle for a while for me, but it feels like this App is helping me ensure I hit all the nutrients! The app acts as a third party so the app is telling me what to eat (referencing you saying it only lasts so long if your mind tells your body what to eat). Previous to the app I had basically created my own “app” in Excel. Whenever I used that spreadsheet I would feel really good! But it would be too much work and wasn’t sustainable. And also it was just a worse tool than the app I’m using now. Plus I’m working monthly with a dietician who is super smart and knowledgeable! It feels like I’m process engineering myself to good health (engineering is my background but I don’t work as an engineer currently).

For weight loss this year, I’m down 17 pounds since March! Since starting this “diet” or using this app, I’ve lost 4 of those pounds. I’m 4.5 pounds away from my high school weight now (although my muscle mass is lower now; a project for another time). My weight seems to go up and down as job (or lack of job) stress goes up and down. I think a big part of that is I only have so much working memory and if there’s another major priority it takes my focus from diet and exercise and weight goes up. Then things stabilize and I can refocus. I’m hoping the app will help me be able to maintain focus on diet through stressful times with less of a pull on my working memory.

[FunkyFreedom]

Post # 004, 12/28/2024

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Tl:dr (added 1/3/24)
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-Reread ERE this weekend

NEW PROJECTS

-Interval training (push-ups)

-Reduce monthly expenses by $300 or so by end of 2025?

-Think about RE or semi-RE gigs I might want to do

-Think up new skills I’d like to develop

FINANCIAL MATH

-Figuring I could semi-RE in 5 years (would be 10 years from Social Security eligibility then)

FUTURE TOPICS

-Listed out future topics for this journal taken from sections in ERE

WEIGHT LOSS

-Lost 18 pounds since March; within 3.5 pounds of high school weight!

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Detailed post below
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I reread the ERE book this weekend. I outlined a series of future posts I'd like to make based on sections and topics in the book. I also went back and dated and numbered my posts, which I think will make it easier for any folks who want to follow along.

I'm going to start with new projects/ideas I'm working on and then move onto the list of future posts:

1. New project 1) - interval training. Just started today, with pushups. Trying to follow the instructions in the book and get up to 100 in a day. Doing as many as I can at a time and returning back multiple times in the day to try to get up to 100. Only got to 41 today, but I trust that if I stick with it I'll get up to 100 and then can start doing the interval piece of it. # of reps for each set today: 7, 6, 6, 6, 6, 4, 3, 3. Probably not very strong to start but let's see if I can keep with it.

• New project 2) I'm thinking I could reduce expenses by $300 per month by the end of 2025: 1) Walk a little bit further to the super market that has 10 to 20% or so lower prices and save maybe $100/month, 2) look into moving from Verizon to Visible (which is owned by Verizon and sounds like it's the same service just no live customer service) for my cell phone plan; will want to confirm that the security is still the same, 3) stop a monthly group I've been paying to attend that has been helpful but I got the use I needed out of it, 4) maybe some electricity or heating savings

• New project 3) Start thinking now about gigs I might want to pursue when I reach (lean) financial independence but want to keep busy and continue to make some money (just probably not work more than 20 hours per week): 1) Stay at my current employer but part time?, 2) Look into part time construction project management + finance/accounting (for residential renovations/additions)?, 3) more music!, 4) host recurring events?, 5) GMAT tutoring?

• New project 4) Think up new skills I'd like to develop and come up with a plan.

I also took a fresh look at what my number / expected time to FI or semi-retirement might be, since I'm 46 now and by the time I hit FI I will be close enough to my social security age for that to affect my number. Here's what I came up with roughly: NW/AE now = 6.4 (age 46.5); could go FI (semi-retirement while pursuing other forms of income per above) at NW/AE = 15 or so in 5+ years at age 52. I'd be interested in getting input from or being pointed in the direction of folks who are approaching FI when SS eligibility is not too far away.

Here are my ideas for future posts:

1. Section 1.1 "Is this for me?"
   -Will plan to answer the questions and write a somewhat thoughtful post about my answers.

• Section 1.2 "Economic Classifications" (Salary Man, Working Man, Business Man, Renaissance Man)
  -Will plan to write about what classification I fall under now, or what mix of classifications. And what I would like to move towards.

• Section 4.1 "Renaissance Man Skills" (Physiological, Intellectual, Economic, Emotional, Social, Technical, Ecological)
  -Will plan to write about which skills under each category I think I already have, and which I would like to develop next (and why).

• Chapter 5. Write about cost savings activities I do now, and write about cost savings possibilities for 2025
  -I think I could save $300 per month in 2025, which would amount to needing $100K or so less in retirement savings.
  -Include increasing music income, or more like keeping up with last year since my monthly recurring gig was cancelled.

• Chapter 5. Reverse fishbone & Web of Activities (this may come later, or perhaps I make a first draft and improve/revisit later)

• Chapter 6 Intro: How to avoid getting things, how to get rid of thimgs

• Section 6.2 - Shelter - analyze my current apartment, whether and how it meets my wants/needs. Talk about how efficient/convenient it is. Include writing about lighting/electrical & heating.

• Section 6.4 - Health - Moving & Eating. Talk about these items. Include new projects of interval training (just starting today!), improving nutrition, and saving money on groceries.

• Section 6.5 - Transportation. Write about this; not having a car, distance to work & supermarkets, use of bike rentals, what is available through biking & walking, etc.

• Index fund investing. Jacob talks about how everyone is doing index fund investing (including me!). So I may do a post to think and write about that.

Oh - diet update - lost another pound despite some family gatherings during Christmas/Holiday time. Down 18 pounds now since March 2024, and am now only 3.5 pounds away from my high school weight! I haven't been trying to lose weight per se; just trying to eat well. Not going to bed hungry!

[FunkyFreedom]

Post # 005, 12/30/24

Following up on my post from yesterday, I'll post on the first three topics I said I'd post about.

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Tl;dr (added 1/3/24)
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-ERE section 1.1. Answered “Is this for me?” questions
-Result = YES, this is for me.

-ERE section 3.1. Economic Classifications - summary
-I’m 97% “salary man” but don’t consume like one
-I’m in the process of “evolving” towards being
more of a Renaissance Man.

-ERE Section 4.1 Renaissance Skills summary
-I’ve got some skills already!
-Thinking opportunity for improvement in 2025 is in:
. -Physiological
. -Emotional
. -Social

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Detailed post below
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Also, to add to my 2025 projects, I'd like to connect with local community / mutual aid organizations and see how I can help and get connected. At least show up to an in person meeting and see what it's all about and go from there.

- Section 1.1 from ERE book; "Is This For Me?"
-A) Are you completely happy with your life? NO
-B) Do you want to live on a solid foundation? YES
-C) Do you want to start a business? MAYBE
-D) Do you dream of doing instead of having things? YES
-E) Do you believe life is an adventure? YES
-F) Do you want to make a difference? YES
-For (A) I think having more of items (B) through (F) {though maybe not (C)} would help move the needle towards "happy" or lets say "more meaningful" or "more fulfilled"
-For item (C) it would be fun to have the freedom and time to try to start new endeavors, possibly including a business!
-For items (D) through (F) I think I already have a little bit of these items in my life but having more freedom and security and time would help me do more.

- Section 3.1 Economic Classifications: Salary Man, Working Man, Businessman, Renaissance Man

• "Salary Man" 97% of my income comes from a salary; 3% or so from hobby income (music), so I'd say I currently fall 97% under the classification "salary man".
  • However, I don't have or watch TV and haven't for over a decade (ERE, pg. 48) and I often eat other items at breakfast (like sweet potatoes!).
    And expenses do not equal income, and I pay off my credit card every month.
  • By saving 50% or so of my salary, I'm starting to decouple the tightness of my dependency on my job, though my best bet is to keep working and saving to continue to decouple that dependency.

• "Renaissance Man" - looking forward to learning more about this classification and developing more skills. I think I already have a good mix of skills as a foundation.

-Section 4.1 "Renaissance Man Skills"

• Inventory of skills/human assets I think I have or have been working on:
  • Physiological (knowledge of food, good eating habits)
  • Intellectual (Learn independently/Research, sufficient generalized knowledge, critical analysis abilities)
  • Economic (understand difference between price and value, consider future consequences, understand assets/liabilities, budgeting)
  • Emotional (sound decision making, non-wastefulness, not subject to emotional manipulation, strong character(
  • Social (how to network!)
  • Technical (I can readily understand technical material)
  • Ecological (systems thinking, understanding of multiple bottom lines)

• Skills/human assets I think I should work on for now/continue to work on:
  • Physiological (maintain optimal levels of physical & mental health, work towards greater physical strength/endurance)
  • Intelletual (not sure)
  • Economic (not sure)
  • Emotional (appreciate arts more and exist more than in 'is a human resource" mode [would help to have more time to do so!], make more social connections)
  • Social (get to know more various types of people, join co-op / mutual aid org, sell/barter/swap/give away things)
  • Technical (learn a common trade could be fun!)
  • Ecological (know five grasses / trees / birds, etc. local to my area and be able to recognize them - sounds fun!)

I'm taking the day off from pushups but made a grocery list and plan to take the mile or so walk to the 10 to 20% lower cost supermarket, as an early step towards saving $100 or so per month.