anomie's journal

[anomie]

March 2013 Report
Expenses
Nothing unusual expense wise

example, Mint says we spent $456 on Groceries and Restaurants in March. For the 2 of us, that won't change much.
Income

Income remained same.

We do (DW manages it) Flexible Spending account for our medical / dental expenses. So we got our check from that plan that covered most of the January medical expenses. This is money that we pay in to plan over course of 12 months, so not really income, but is tax-protected.

http://en.wikipedia.org/wiki/Flexible_spending_account

I reduced my personal pretax retirement contribution to $0 to begin using that money for mortgage paydown and investing. My workplace continues to contribute $671.67/month to my 403(b). wow gonna really hate giving up this job..
Resilience

no great strides on personal physical resilience this month

continued to go to exercise class 2/ week.
multiple side projects are continuing to arise, which means multiple (all it/web/ technical) income streams possibilities aside from my FT job.
48 month Plan ™

Month 6 of 48.

Target: 14,500 Actual : 12,500

This will greatly accelerate in a few months when mortgage = none.
The Plan®
paid $2800 towards mortgage; $5935 now left on mortgage. Targeting pay off in next 90 days!
Misc

to many accounts to manage and review.

have started reorganizing spreadsheets to make it easier to track and plan.

I moved 5% of our 403(b) money to a money market , out of stock accounts, at the height of the 14,500-ish dow. Very empowering. I am buy and hold, not market timer, but we need to guarantee some of these gains. I can't stomach losing 20%- 30% again like back in 2008
Both DW and myself are working all the time right now, which is good for $, but not great interpersonally or personally.
Computer games are reasserting their hold on my life:

1. Steam for Linux is available now, which opens up PC gaming for this Linux idealist.

2. Nexus 7 = amazing tablet computer for $200 = more video games.

(yes, I am mid-forties and play video games)

[anomie]

May 2013

Paying off the mortgage - Part 1

So I was waiting to write a journal entry so that I could say "We paid off our mortgage this month!".
I was just getting ready to send the final payment to the bank from online bill-pay (~$2700), when I thought "I better call them to see if there are any special fees or other steps I need to take". Whoaaa Nellie!!
It turns out that paying off your mortgage is an entire process, which I will try to summarize below in hopes it may prepare/help someone else.
I am novice to finance and other nuanced human behavior. I find this all really archaic and a PIA.
We took our mortgage with a local credit union 7 years ago. They sold our mortgage to Suntrust, who went bankrupt I think; Bank of America then bought it from them. There may have been another bank in there somewhere. So I have been sending payments , and paying down extra, to Bank of America for several years, using our credit union's online bill pay.
(first draft; I am calling Bank of America again to talk to another representative to double-check the process.)
Pay Off Process

1. They are sending us a payoff letter stating the final amount to be paid.

2. The final payment must be paid by money order or cashier's check, and sent to a special address "Bank of America Payoff Unit".

3. Then later we have to call Bank of America to request a Letter of Satisfaction ( she mentioned a Letter of conveyance and lien release; that may be part of step 5 below). Then, they close the account and will send us our mortgage deed (?)

4. They will send us any money in the escrow account held for taxes and insurance.

5. Then it takes 90 days for them to notify the county that they are releasing the mortgage to us.

6. We have to call homeowner's insurance and let them know to send the bill to us.

-- End Process

Will write back when the deed is done.

[RealPerson]

This is roughly how the process went when we prepaid the balance of our mortgage some 15 years ago!! Nothing has changed it seems. Updating of the process seems in order.

[Standard Staples]

A major congratulations to you, anomie. Paying off the house is a very significant accomplishment not only for ERE, but in general. It's a guaranteed return on an invesment, and I'd consider it a pretty big accelerator toward the end goal.
With the mortgage payment funds freed up, I would definitely support aggressively DCA'ing like m471 mentioned. The market may be riding high right now, but there's still value out there, and socking money away every month will steadily grow your accounts. With your income and comparatively low expenses, you'll be able to comfortably ride the market up and down.
Looking forward to hearing more about your journey.

[anomie]

Greetings,
I have been reading and lurking on the forums recently, trying to keep up, but have not made the time to participate.

Love the new forum speed and features.

This journal entry is a bit scattered; my format is evolving over time; apologies in advance.


-----------------
Paying off the mortgage - Part 2 of 3
Called Bank of America 20130531 to check in on progress of paying off mortgage ...
They recieved our final payment May 28 Paid in Full; our account is closed/closing ...
June 11 refund check being sent -- current escrow account 2866.72 ( check recieved!!)

14 business days there will be an audit of account; may get more money back after that!
30-90 days will be .... clearing -- they notified the county that they are out of the deal..
Reconveyance into our name or they will ; the deed has to be put into our name ...
contact homeowner's insurance, make sure they send bill to us ......
Thank you Jan!
-----------------
Paid homeowner's insurance for the year -- 0.6% the cost of the house. This item non-negotiable by the DW.


The Plan ®
The Plan ® has been modified with contingent possibilities in the next 2-4 years. DW may have opportunity to do work overseas in Japan in 24 months. I will go with her, with or without my job.


$$$$ -- Stocks and Mutual Funds and ETF's, oh my! -- $$$$
The Stock Market remains my best friend for confidence and happiness.
We are scattered in a dozen funds and accounts, but the totals = much $$ happiness.
Recently found Vanguard 500 Index Fund (VOO) ETF, with a .05% expense ratio (beat that)
Father-in-law bought a $2500 stock screening/research tool from Zach's; that was interesting ... ; so I may start investing using a growth and income screen , trading every 3 months... ; the tools and research is sort of fun, but I do not like depending on father-in-law for data or stock picks ...


I pulled 5% of our retirement money out of funds and into money market at DOW 14,423 back in March. If it goes up 10% higher than that, I will pull another 5%. So, DOW at 15,865 is my new target to watch for ...



48 month Plan ™
Month 10
-House paid off. Check.
-We are now living on DW's take-home salary - 33% of our take-home - plus whatever other odd $ come in. My paycheck is now deposited into a brokerage account each month. done this for 2 months so far; need to keep it up!!! feels awesome.

The plan is to live off of her paycheck for the next x months, then we will live off of our investments until we hit 59.5.

Life is good.

[anomie]

Technology front update:

1. Playing Clash of Clans on my job-supplied iPad (yes, i don't understand why my job gave me an iPad either); I have tended to stay away from this iPad, lending it to DW for her work .. my Clan leader is in 8th Grade! LMAO! and I have paid $25 in this free- to play game. $25 for 3 months of play, so far... I do not plan to spend any more on the game, and I tend to play these city builder type games to level 50 or so before getting to bored. The game itself is like a virtual pet where you have to check in every few hours to tend to it.. Find it interesting that there is now a new generation of humans raised on the internet and video games, with opportunity to have leadership positions, and to 'interact' (we have in game chat, bigato!!!! likewe shoud in these forums.. in some capacity with some of us 1st generation gamers...

2. After seeing the utility dw got from hers for past 14 months, I bought a Nook Simple Touch for $45 on ebay - with a cover and an 8GB memory card. Now I have no excuse not to read books. I have been downsizing physical books, and this will expedite the process. Nook Simple Touch reads the open-format epub. So I can basically get any book I want for this thing...

3. Next week Google (24th!) is to announce the next generation of the Nexus 7, called Nexus 7 2! A bad ass tablet computer for $230 -- the Nexus 7 is already an awesome buy, but am looking forward to the shinier version just because.


#Technology update out.

[spoonman]

I'm always happy to see a fellow gamer on these boards. Ever since I saved one of the fake pricesses in Mario Bros I have been hooked on videogames. I remember playing Atari with my rich friend across the street, it was amazing.

These days it's difficult for me to sit down and play a game without thinking about all the more "productive" things I could be doing with my time. I'm hoping to change this in retirement.

[BlueNote]

I remember when I played the civilization (the first version) for the first time. I played it for more then 24 hours straight, all day and all night. My mom had to practically drag me kicking and screaming from the PC. I think it ran on one floppy disk at the time, it was awesome. I could see myself becoming a video game hermit so I pretty much avoid them as much as possible.

[anomie]

Hello,

Yes - Civilization was the first PC game I ran into in 1993. I played it on a 386 PC for a year. It blew my mind. From then on, for about 10 years, I would buy PC's around the spec's needed for the next video game (ie, I would buy gaming PC's). an expensive habit that I am glad I finally kicked about 3 years ago.

I am really glad that gaming has caught up with the low cost tablet platform, more or less. I hate the iPad, but it is sure a beautiful graphic and computing experience.

@spoonman - Yes, I agree. maybe if I played fewer games, I would have more time for sober, mature experiences. Like making my own soap. hmmm. not going to happen at this time.

One prominent gamer in these parts is MikeBOS, the author of http://lackingambition.com/ . I'm pretty sure he is open about his gaming interests; hope I am not transgressing by mentioning him here.

thanks for the responses!

[anomie]

***** Paying off the mortgage - Part 3 of 3
Bank of America: Oh, we didn't mail this to you? Oops. Will send a copy to you.
few days later we got a 'Letter of Satisfaction' that the mortgage has been paid. Filed with the County Recorder's office of official documents.

WARRANTY DEED

I was expecting some type of closure. I thought that the 'title' of ownership to our house had been signed over to the bank when we signed a mortgage.
Turns out the banks had just filed some documents with the county government that they had a lien on the house. I guess same legal effect. I was expecting something more literal I suppose.

The closest thing that exists to what I was expecting -- a title on the house free and clear - was the WARRANTY DEED that we signed when the previous home owner sold use the house. Which we already have a copy of.

The free and clear part is just the legal paper trail in the country recorder's office. Very nice website, all documentation available on-line, thank you jesus.

So for whatever property ownership is worth, as much as anyone 'owns' anything, we now 'own' our home.
(Until we do not pay taxes on it. Or it burns down. Or SHTF.)

(NOT) my house ....

[vivacious]

Hey Anomie. Good to hear from you. I wondered what you have been up to lately. Glad you paid off the house. Careful though I have heard of paid off houses getting "foreclosed" on because of very poor accounting etc and the all out fraud in the banks. I once saw a guy online foreclose a bank though! He went in with some cops and some lawyers and they started breaking the bank down piece by piece! They thought a little differently after that and I think he got some kind of settlement or something. Anyway smoke a joint, play some videogames or whatever you like to do, etc. You earned it.

[anomie]

Hi vivacious -

Yes>

Careful though I have heard of paid off houses getting "foreclosed" on because of very poor accounting etc and the all out fraud in the banks.

As you say there. My concern was -- what proof do I have that I have paid off a mortgage? What does that look like?

I tried to report that in my 3 part series on that topic.

The key seems to be the "Letter of Satisfaction" from the bank that they have their blood from you and are done with you.

regards,
anomie

[vivacious]

Ah ya. Definitely saw that. Thanks for the report and I'm glad you're being thorough.

[anomie]

48 month Plan ™
Month 12 --- 36 months to go ....
I am still saving my paycheck and investing it. 36 more checks to go!
I am currently splitting the paycheck between 2 different brokerages. The FIL did not come through with any productive/ proactive investment advice.
Fortunately, 95% of our money is in low cost managed 403(b) funds.
So the plan becomes how to invest for the near-term -- 10-15 years out .....
I recently learned how to do limit buy orders ---- " buy x if it goes down to y$ amount " ....

While loving the dividend-growth idea, I still have much to research / learn on that front.
We have so much $ in the market, it seems prudent to put money into cash positions right now just to wait out the hoo-ha, and to look for a dip ..... ; the mortgage payment was a conservative bet against the volatility that we otherwise face. We have friends who avoid paying their mortgage, and invest extra money in the market, betting they will get higher rates than their mortgage rate. different strokes, different folks.
Recently found Vanguard High Dividend Yield ETF ( PACIFIC STOCK EXCHANGE : VYM ) that starts to scratch my itch for a dividend bearing fund.

My stress levels have decreased dramatically now that I just invest my paycheck. Having to try to budget around DW's work expenses was a major stressor for me. Now I just say 'we're living on your paycheck now'. I can focus on the horizon.

Just wanted to get a journal entry in. I don't really feel like I am a great writer, but I do like reading the forums, and do want to update this journal periodically.

[anomie]

Greetings. Have not posted in 3 months! Want to post at least quarterly; my beans and rice are cooling, so here goes ...

Looking back I see that I was amazed when the DOW hit 14,000. 2013 was a wild ride seeing the DOW hit 16,500. The stock market has provided some exciting possibilities for our future....

We are looking at moving to Japan in about 18 months for DW's work. We'll see what that does to my work scene.

I have picked up a disgusting habit -- I hike with my DW to work in the mornings, and then help myself to the cigarette butts in the ash can that sits on the edge of her work. ! LOL. Have to keep the smoking under tight control, but it does help with the drinking ..
Keeping the alcohol budget to 80 - $110 / month...



48 month Plan ™
Month 16
Almost a year of saving my paycheck with no extra 403(b) withdrawals from it. Vanguard is my friend. Though we need to increase our cash position with this market, so basically just sitting on most of it.

We are now living off of the wife's check; have had to reduce her 403(b)'s to half to cover monthly expenses.

Note to others: you can have your employer direct to your retirement 401(k) or 403(b) like up to around $17,000 now, and it will not be taxed. This was news to some of our friends, so just sharing.

Doing that for past 10 years has really helped us out now...We have more than we need in the 403(b)'s now, given that we can let them grow for 14 more years before touching them...

Our target monthly expense is $2500 for 2 adults, no mortgage ($2400/year in taxes and homeowner's insurance, so $200/month towards that)...
We spend way to much on food ..
I do enjoy our weekly hikes to the local farmer's market, though there again we probably spend to much on things like potatoes just because they are not poisoned.
Need to pick up other skills outside of work other than housekeeping. Oh and now that Steam has come to Linux, there is much video gaming to be had this Mid-western winter. Yes I know I should be doing more productive activities than playing video games; maybe later ..
Speaking of video games, now am lvl 78 on Clash of Clans - (I play this on work provided Ipad). Me and a couple of friends finally left the children's clan where my clan leader was 12 years old, and am now in a '21-year-old+' clan. Like you have to be an adult to play COC! It has worked out well over the past 6 months, though I'm not a fan of their enforced age restrictions.

In other News -- we are a "Nielson Family" !! LOL. We are keeping a diary for a week of our TV habits. LOL! We had to call them and ask "What do you do if you don't watch any actual Television channels or subscribe to cable TV or satellite?" We watch TV shows but only via Internet. Boy, Nielson 's data collection diary needs some updating for the 21st century......

I also enjoy reading the ERE forums and learning from all the folks here.

Ok. Back to lurking mode. Have a nice day.

[jacob]

The 401k limit is currently 17.5k. You can tax defer an additional 5.5k in an IRA. If you're married with one income, you can still have a spousal IRA (you spouse can earn the money). This brings it up to 28.5k you wont have to pay taxes on. If you're high income (like 80k) one of the 5.5k IRAs will phase out. Conversely, if you're low income (like 40k), you will get the Saver's Credit (not just a deduction but actual money back) on your tax return due to your high savings rate. If you have an self-employment income, you can protect even more money with a SEP-IRA.

[spoonman]

"48 month Plan ™"

I love it! Thanks for the giggle.

[anomie]

@jacob - thanks for spelling that out for folks. I hope people read that very useful information.

--
For own my personal situation in this regard, as mentioned before, I am in the situation of planning how to survive from ages 49 - 59 on investment income &/or via my housekeeping skills &/or otherwise by sheer wit. I am sort of done with hiding money from mr. tax man in retirement accounts.

@spoonman - glad to know that someone appreciates a lil humor!

In that vein, I thought back how warm and satisfied I felt writing my current entry. Then I did the math (yeah I'm a little slow a lot of the time..) .. our TARGET monthly expense is $2,500. That is $30,000 A YEAR! Huh??? We OWN our house? WTF are spending money on?

So I went and looked at our Monthly spending by category in trends on Mint to see how we did for January:



and




The monthly damage is much lower than I feared. Though our food and dining budget is ridiculous (this also includes my favorite category - alcohol).

Oh, my! The Entertainment and the Shopping are mostly mine! Bought $80 worth of Civilization 5 on Steam this month, and some personal supplies from Amazon.com including a $20 headset for video gaming! But these categories total almost $130, and they are mine. At least those particulars won't happen again ....

Story of my PC gaming rig: I am very fortunate to have a friend who loves PC gaming. He gave me his old gaming PC because it had a few quirks he wasn't interested in fixing; it is now 3 years old and should be good for another couple of years... (I am taking away from my few free hours to narrate this to you my kind audience ...) Due to some recent projects at work, I also now have a copy of Windows 7 professional, so now I have a dual - boot PC gaming rig that can run Civilzation 5 ... So yeah I am privileged lucky bastard to have a PC gaming rig for free.

I am also privileged to be sharing my resources with someone, reducing many costs in half; but I also do not have unilateral control over many aspects of my life (Me: "Honey..., can we turn the thermostat down to 62 F to save money? A: Sure you can..., when I'm not in the house!. Now turn that heat up! " ) So the utilities are not going to change much ....

Again, have a nice day, and best regards.
-anomie

[anomie]

48 month Plan ™
Month 20

This journal entry concerns my primary approach for saving the 50k-150k I hope to save over next 2-3 years. This amount will be the basis for my survival between ages of 49-59.

Using a Growth and (Dividend) Income Stock Screen:

Current Price >= 5
20 Day Volume >= 100000
Zach's Rank <= 3
ROE (12 months %) >= S&PMed (10%)
PE (next quarter estimate) <= S&P Median
Debt / Equity <= 1
Beta (60 month) <= 1
Current Dividend yield % >= S&P Median
Current Dividend yield % Top 2 in Sector
Current Dividend yield % Top # 7

purchase , sell, and re-balance every 12 weeks

[anomie]

This update concerns what I am thinking of as "core expenses". Just the costs of shelter. Not even food.

What are our costs of living in the house as we have been? I collected some data from past couple of years.


********* Monthly Expense
Electricity 100 based on average of past 25 months expenses
Gas 64 based on average of past 25 months expenses
Sewar/ Water 54
Property Tax 146.9
Homeowner's Insurance 60

Total Monthly $424.90
Total Annual $5098.8

This is for 2 adults living in a modest 2-bedroom house in small town midwest america.

The electricity is high-ish mainly because I tend to run a lot of computers in my house, some as servers non-stop. In recent years , these are getting fewer, and I am learning to suspend or turn off when not in use, and computers are getting smaller. General down-sizing.

The Gas is used for heat and cooking.

no mortgage; we are paying 2.07% of the purchase of the house per year in taxes and insurance.

$5,000 per year.

Just to have a home.