akratic's ERE journal

akratic · Post by **akratic** » Wed Aug 01, 2012 1:50 am

@mds, yeah I can do that trick. It definitely helps a lot, but I still don't like peeling the onion or cleaning the cutting board. I would personally just leave the onions out of the dinner rather than do those things, but my girlfriend likes having onions in there.
July 2012

The stacked bar graph shows how tantalizingly close I'm getting with a 3% SWR. The expenses in that graph are based on the trailing 12 months.
Unusual Expenses:

- $280 for round trip flights to Boston to visit my family (grrr, why so expensive)

- $36 travel expenses from the Seattle trip last month

Good progress on the fitness and money fronts this month.
You can see the weight loss stuff in the context of all of 2012 here.
I also read a 500+ page book called Why the Best-Laid Investment Plans Usually Go Wrong by Harry Browne (1987) this month, but I wouldn't recommend it. His explanation of the PP concepts was clearer in Fail-Safe Investing, and almost all of the practical advice in the book is outdated and better addressed by the Crawling Road forums. It's cool how timeless the actual allocation is though (so far!).
I bought $2.5k of WAG this month for my VP, and made 10% within 24 hours, and ~20% by the end of the month, but it was pure luck!
I also wrote a little rant earlier this month. I'm not sure about posting it, but maybe it will help change the subject away from onions.

I've been thinking lately about my social life. This problem is so "first world problem" that I'm tempted not to even admit it, but instead I'll just try to keep it short.
In order to make close friends in Chicago, I made all these medium friends in the beginning. These medium friends keep inviting me to things like their birthday parties, which I do NOT want to go to, but I go anyway out of a sense of obligation. (I do routinely turn down things that I can easily get out of, but things like birthday parties I'm not good at turning down.)
Ideally I would attend around two total social events a week, or 100 per year. If I have to go to fifteen fucking birthday parties a year though, that's like 15% of my total energy for socializing that has been completely wasted. I'm just sick of being socially obligated to do stuff: having to choose between letting a friend down or suffering through a social event.
I do value my close friendships; I just wish friendships didn't come with baggage, and that people understood that inviting me to their party is NOT doing me a favor.
I do think their intentions are good. I just think the population at large does not understand introversion.
You can tell how little people understand about introversion by how often they use "introvert" as a synonym for "shy" or "socially awkward". Or how often they invite their introverted friends to parties as if this invitation were an opportunity for the friend, rather than a liability.

dragoncar · Post by **dragoncar** » Wed Aug 01, 2012 2:09 am

Woah, is your savings rate like 93%? That's what your graph looks like... saving over a year's worth of expenses every month.
How'd you pick your wight goal?
Have you met up w/ Jacob in Chicago?

JohnnyH · Post by **JohnnyH** » Wed Aug 01, 2012 9:45 pm

It is incredible watching your chart move. I just had my best quarter of my life and might have been briefly elevated to your savings level... It was amazing!
What specifically about b-day parties bothers you, the sheer number?... My biggest dread is weddings. Worst being IN them (the horror). I always drink a moderate amount at such things and usually end up enjoying myself (but seem to reach diminishing returns after 2 parties a month). Have you tried drinking at gatherings like these birthday parties?

mds · Post by **mds** » Thu Aug 02, 2012 2:16 am

I used to feel exactly the same way as you did - feeling kind of annoyed that I have to come up with an excuse to turn down invitations. However, I realized this was actually a weird form of self-centeredness. I was implicitly saying that their world revolves around me and that they would have a strong reaction to whether I came out or not. In fact, unless they're a really close friend, the person probably doesn't really care if you come to their wedding or not. The day is about them, not you. In the case of a birthday party, they want lots of people to come so they don't look like a loser, but they probably don't care specifically about you. Again, unless they're a really close friend. I just had to realize that the world really does keep moving without me. I think a lot of engineer types really have a hard time grasping this. It's a weird combination of empathy and self-centeredness.
I've since realized that if I really click with someone, this stuff will just sort itself out. If I really don't want to go hang out with someone and would rather stay in, I just say I need to work. I DON'T say "I just don't feel like going out" or "I'm an introvert! Don't you know this drains me?!" because extroverts won't really understand this, and you can't blame them (I realize it's kind of a white lie, but again, no one cares. I also had a hard time white lies until I realized the world would fall apart without them.)
It's amazing how much simpler this has made my social life. I think I was able to make this leap because I'm a pretty mild introvert (in fact my tests have shown ENTJ, but I can't see how that's possible)
By the way, congrats on your continued weight loss. 9 lbs in less than 3 months is nothing to sneeze at.

JohnnyH · Post by **JohnnyH** » Thu Aug 02, 2012 2:57 am

Fantastically insightful, mds... So true. Logically, I know people will be fine when I decline/cancel dates. But I still feel guilty about it for some ridiculous reason.
Also, I think we put to much faith in I or E. I've known huge Is that are now clear Es. I've tested at both... You really can be whatever you want.

akratic · Post by **akratic** » Tue Aug 07, 2012 9:49 pm

== savings rate ==
I'm confused by the savings rate. When I back-of-the-envelope it I get 85%. Based on tax returns 2010 was 89% and 2011 was 90%. I think savings rate is just kind of inherently misleading because it doesn't really capture future expense reductions. Here's a toy example:
year 1: $1000k income, $500k expenses, $500k in the bank, 50% savings rate

year 2: $100k income, $100k expenses, $500k in the bank, 0% savings rate

year 3: $15k income, $15k expenses, $500k in the bank, $0% savings rate
And you're officially FI after year 3, after savings rates of 50%, 0% and 0%. Of course no one's numbers look like this silly example, but dropping expenses acts like a lever on the assets you already have, and my expenses have been steadily dropping.
I prefer "net worth in years" because it captures the progress made in years two and three of the toy example above.
== weight goal ==
I, of course, over-analyzed my weight goal of 170lbs as well. Short term I'm shooting for 170lbs because my girlfriend says I look best at that weight. Long term I want to try a lean 170lbs at 8-9% body fat as my physical ideal.
Over the last 3.5 years I went from 160lbs unemployed beach bum traveler to 190lbs sucker with a desk job. While reviewing pictures from this period, my girlfriend pointed out that I looked better at 170lbs than I did at 160lbs. I couldn't believe it, especially after working so hard to get lean and cut at 160lbs (and only later adding a lazy 10lbs of fat to get to 170lbs). But she was right! At 160lbs I just looked scrawny, especially with clothes on.
I was shooting for one of those "Men's Health Magazine" cover bodies, like Brad Pitt in Fight Club. Everything I'd read online said the real trick was a sub 10% body fat, and that muscle mass wasn't that important for the look (although I was still lifting hard at the time, 3x a week doing bench, deadlifts, pullups, squats, etc). Anyway, I got down to 157lbs and every body fat test I could find had me at 8-9% body fat, but I didn't look that good. I want to try being super lean again, but this time with +10 lbs of muscle on my frame, and see if that helps. I'm only setting the goal at +10lbs of muscle because that's already difficult enough!
I used to believe in the body builder style plan where you alternate periods of cutting (losing fat) and bulking (gaining muscle). I've recently realized that this is really bad for my motivation level. While bulking I slack hardcore, and then it takes me so long to get back on track that I barely end up ahead.
This time the plan is to get to 170lbs first, where I will probably still be like 15% body fat. Then I'm going to stay at 170lbs, slowly converting fat to muscle, and dropping the body fat percent until it's down to 8-9%. We'll see if I can stay more focused doing it this way.
== meeting Jacob ==
Yeah, I've met Jacob. He came to the Chicago ERE meetup I hosted about a year ago. I actually met mikeBOS too, in Boston, which means I just need to meet MMM to have met the all star FI blogger trifecta.
== self-centeredness ==
I'm thinking hard about whether these social obligation problems stem from self-centeredness. It does suck how hard it is to see flaws in yourself. In fact, the best way I know to do this is to find someone with the same flaws you have, find yourself annoyed with those flaws, and then realize you have the same ones!
Anyway, back on track. Some of my acquaintances wouldn't care at all if I came to a social event or not, and typically I do decline those invitations, and it all goes fine. However unfortunately, there are a few people who I don't consider to be close friends, but who *do* care whether I come. Maybe you've managed to cut people like this completely out of your life? Or maybe being slightly more extroverted enables you to roll with these occasional events without big sacrifices?
(Every time I've taken the MBTI across 10+ years I get almost a perfect "I" score... 90%-100%. By the way, JohnnyH I strongly disagree that I vs E is a choice, but I'd rather not debate this particular topic.)
I will say this: the fact that I have a 272 post journal all about *MY* financial independence journey -- and long comments about my goals and past -- does not bode well for me in the self-centeredness department...

mds · Post by **mds** » Tue Aug 07, 2012 10:38 pm

Now I feel bad. I didn't mean to even begin suggest that you are generally self-centered. It's only that when I started looking at that specific thing (my guilt and agony over the outfall of turning down a social obligation) as being self-centered, did I get over the issue. I just wanted to share my shift in thinking.
It wasn't that I cut "people who I don't consider to be close friends, but who *do* care whether I come" out of my life. Instead, I began to separate out the serious pleas to socialize from the superficial "come on man, stay out, don't be a loser" pleas. The latter are pretty empty and can be ignored. In my experience, they're made to "keep the party going", not because anyone particularly wants me to stay. I've exited social occasions early after receiving some aggressive pleas, only to step outside, look back and see that person animatedly talking to someone else. I found that I was overestimating how much those people cared if I, specifically me as a person, stayed (i.e. they care about the party continuing, but not specifically about me staying). That's where my "self-centeredness" description comes in, but it may not be the best word.
It's much easier to lose the guilt than it is to lose your "I". I agree with you that I vs. E is not a choice, but in my experience guilt is a choice.
By the way, I think 272 posts is a sign of diligence, persistence and self-reflection, not self-centeredness.

secretwealth · Post by **secretwealth** » Wed Aug 08, 2012 12:27 am

Wow--what an inspiring journal. Two years of sustained savings and solid progress. Amazing!

akratic · Post by **akratic** » Fri Aug 10, 2012 11:11 pm

Ah, no worries mds. I appreciate your perspective and thoughts on this subject.
I like being hard on myself mostly because if something is my fault, it means I can fix it.

jb · Post by jb » Tue Aug 14, 2012 1:49 pm

Incredible stuff. I'm guessing Chicago rents are quite reasonable?

m741 · Post by **m741** » Wed Aug 15, 2012 12:46 pm

I believe Chicago is one of the most expensive places to live in the country, but also that there's a high variance in costs.

akratic · Post by **akratic** » Fri Aug 17, 2012 2:04 am

Chicago is quite cheap compared to Boston, New York, and San Francisco, etc. Salaries are still high here, though, so that makes this a good place to save money.
My personal theory on why this place is so cheap even with high salaries is that this city is an inferior to place live on factors like weather, mountains, oceans, intellectuals, diversity, etc.

akratic · Post by **akratic** » Sat Aug 18, 2012 12:06 am

I'm reading a book called Religion for Atheists by the guy who wrote Status Anxiety, and I came across a passage about my favorite word:
[Christian] theologians have known that our soul suffers from what ancient Greek philosophers termed akrasia, a perplexing tendency to know what we should do combined with a persistent reluctance to actually do it, whether through weakness of will or absent-mindedness. We all possess wisdom that we lack the strength properly to enact in our lives.

J_ · Post by J_ » Sat Aug 18, 2012 10:35 pm

I love the books of Alain de Boton. I have read this one too. He is a wise man to my opinion.
Good that you saw this flaw in yourself, but also that you are hard on yourself to withstand this flaw. (see your answer 5 post earlier). ; )
Another book of AdeB is :the consolation of philosophy, it really helps.

akratic · Post by **akratic** » Sun Sep 02, 2012 12:47 am

August 2012

Unusual expenses:

- $120 laundry fee at my gym, good for the next year

- $100 trip to Costco to stock up on food

- $100 in misc expenses related to my trip to Boston/Maine

I fell off the weight loss bandwagon for a bit this month, but I got back on.
===
The biggest news this month is that I figured out what I want to save up for after I'm done paying for my independence (3% SWR). I want to build a house in Maine.
I spent ten days in Maine this month on vacation. My family has a really unique setup in Maine. Within one mile, there are five houses belonging to various family members (dad, uncle, aunt, other aunt, cousin). During my week in Maine this month I saw over twenty relatives. The whole compound is on an island in the middle of nowhere (30 minute drive from the closest store). And it's on the ocean!
I spent summers in Maine growing up, and I loved it. The pace of life is really nice there. Spending hours on the porch watching the sun rise over the ocean is totally normal behavior in Maine. Or spending all day reading a book, with a break only for a boat ride and a family dinner. I spent a lot of time this trip teaching myself Flash for a little side project game I want to make. I got surprisingly far on it too!
Anyway, the amazing thing I learned this month is that my dad has an extra oceanfront property that I can build on, adjacent to his. I always knew that getting part of Maine would be the beginning (and probably end...) of my inheritence. But I had no idea there was an extra lot on the ocean that I can build on now!
This is a great opportunity, but unfortunately it has me a bit stressed out. I was really looking forward to having "enough" money once I hit a 3% SWR (and I'm getting oh so close). Building in Maine will be very expensive. At least six figures, I think. And it can't come out of the "rent" portion of my FI fund, because I'm guessing that Maine will only ever be a second home for me. If I were going to be a hermit, Maine would be a great place to do it. I could build a "four seasons" house there and just hole up in the winter, working on personal projects, and in the summer my family and extended family would come to me. But actually I'm pretty sure I want kids and a family eventually, and I wouldn't want to raise kids in this part of Maine. It's too far from civilization to raise well adjusted kids, in my opinion. (The one road onto the island was paved only around 10 years ago. It was a dirt road until then.)
I have a lot to learn about building houses, and a lot of decisions to make too. One decision is whether it's going to be just a summer house, or for all year. Maine is ridiculously nice in July and August, but fairly bleak in the winter, I've heard. I've never actually been to Maine in the winter, as my dad's house was built in 1805 (not a typo) and passed down the family line with few improvements, so it's barely weather proof at all.
One possibility is that I could split the cost of the new house and the ownership of it with my brother, who I'm close to, and who is another high income frugal saver. The house and land will be in the family forever, so there'll be no disputes where one party wants to sell and the other doesn't etc.
One challenge is that it is difficult to find good construction talent in such a remote place. My cousin is building a 1300 sqft hermit-style house there, and the construction has been on-going for over a year, is not close to being finished, and is costing a fortune. She was gracious enough to share the various costs of her house project with me, which has been very helpful for my planning. Here they are, approximately:

- $100k constructions costs (on-going, not to exceed $250k)

- $30k site planner

- $20k driveway

- $15k septic

- $10k ledge hammering

- $5k tree clearing

- $3k well

- $1k various permits
I think I can save on the following expenses: site planner, driveway, ledge hammering. But some expenses like the well, septic, and permits will be unavoidable. One idea that intrigues me is having someone build the major pieces of the house offsite, then simply transporting the house there and putting it together. "prefab" I guess.
If I were buying a house normally, I think I'd try to get a deal by buying a distressed house in a good location, and fixing it up a bit. I can't use that strategy here though, as my location is fixed. I wonder, what is the ERE way to take advantage of this property?
Tiny houses come to mind, but I'd like the house to be able to accomodate many guests in the summer, so it can't be small. It would be something of a disservice to how nice the view and location is not to build a nice, big house here that many people could enjoy.
I could also recoup some of my costs by renting the house by the week in the summer (I think it'd rent for quite a lot) but during the summer is exactly when *I'd* want to use the house.
Another thing that occurs to me is that if I spend July and August every year in Maine with my family, then I could live literally anywhere else in the world the rest of the year. I was thinking I needed to live in the US to be close to my family, but spending summers with them every year is enough. I see no reason why I couldn't live long term in Australia or South America or anywhere else if I come back to Maine every summer.
Interestingly, I'm pretty sure my cousin who is building the 1300sqft house is ERE minded. She stopped working by age 45, maybe sooner, is building her Maine house with cash, and was explaining to me how her secret is that she never wasted money. She kept hammering that point in, as if I might not fully get it or understand the implications of it, but I definitely do.
Anyway, I have at least five years before I'd want to do anything with the Maine property, so there's plenty of time to think about it and save. I just like planning ahead. Let me know if you have any good ideas!
PS: I need a normal expenses month and a 1% return on my portfolio in the next month to hit 3% SWR by the next update. I doubt that's going to happen, but it's possible! Otherwise, maybe the following month...

bluepearl · Post by **bluepearl** » Sun Sep 02, 2012 1:49 am

what will happen to your dad's house once your parents are gone?
It looks like you and your brother already have a place in maine, no?

mds · Post by **mds** » Sun Sep 02, 2012 2:08 am

Wow, so close to 3% SWR. Congrats.
I've also spent some time thinking about what my housing situation should be after I reach FI. I've dreamt about having a second home, but when I really think about it, it seems kind of wasteful. I suppose I could try to rent it out, but a beach/summer house is meant for renting when I'd want to use it (I re-read your post and you mentioned that too) and would require more time than a year round rental. So it would either sit empty for long periods of time or it would require a lot of time to find short term tenants. I came to the conclusion that it would be much better to rent for a few months out of the year and maintain location independence. However, I'm far from actually needing to make this decision, so I may change my mind.

secretwealth · Post by **secretwealth** » Sun Sep 02, 2012 3:22 am

akratic, I have to say--I think you're there. Congratulations, really.
Maine looks gorgeous from pictures--I'm hoping to get to the coast there soon. Any thoughts on building prefab? I've fantasized about a weehouse (http://weehouse.com/) for about 8 years now.

J_ · Post by J_ » Sun Sep 02, 2012 5:25 pm

Perhaps, akratic can be this a solution for suddenly having a place for a second home with atlantic ocean views:

1 Install a septic tank. 2 Make a deck, partly roofed and a back wall. So you have your porch with view, a guard against wind, a roof for solarpanels and catching rain for your water needs.

3 Then dig a hole about 36' long. 10' wide and 6' deep.

4 Buy a used motor or sailingboat without the rig. The cheapest are those with a rotten motor. But a sound hull, two or three cabins, heads, kitchen etc. Buying in Maine will be no problem eg a Bavaria 36' sailing boat I guess you can buy for $40000. 5 Get a deeploader, hire a hoist and place that boat in your hole, waterline is groundlevel. 6 Connect the solarpower to the batteries, the water to the tanks and the sewer to the heads. For about $ 60.000 you are done.

(If you think I will use this idea, I will not refuse an offer to have a vacation on it for a forthight or so

)

mikeBOS · Post by **mikeBOS** » Sun Sep 02, 2012 8:09 pm

My BF inherited 80 acres in Vermont. Similar to your spot in Maine, it would make a great place to live, stunning mountain views, a small pond and waterfall right on the property, and a small town just a mile and a half away.
We've thrown around the idea of building something up there in the next decade or so, and have figured a minimum of around $100k for a modern place with walls of windows to take advantage of the views. He already has a well on the property. I think your estimates are pretty good.
I'm alright with construction work so I've tried to account for the savings I can get by doing some parts myself. Basically I know I could do all of the interior work. So if we could contract out the foundation, framing/siding/windows/doors, I could roof it myself (with a little help) in a few days, then it's just a matter of putting in flooring, interior wall/ceiling work, running electric and plumbing, doing the kitchen cabinetry/appliances, etc.
I've always kind of had a hankering to design and build my own place. After rehabbing others and studying architecture and design in my spare time I feel like I could do so much better than the unthoughtful boxes most people slap together. So building one would be equal parts saving money and passionately creating a beautiful, intelligent home.
When reading about construction you might want to look up some books on being your own general contractor. So instead of being your own laborer at least you could be your own manager of the project, hiring out the parts that make sense and doing the other stuff yourself.
ps: It's these big one-off projects that make my retirement tougher to plan out. It's like "OK, I know have enough for the month to month stuff and maintenance, but what about when I want to spend $10k building an electric car?"