spoonman's Journal

[Pronoid]

So has the dip in the market got you second guessing pulling the plug when you did?

[spoonman]

@IwantLess: Absolutely not because mine is an income based strategy. The dividend income is very solid, so these market gyrations are irrelevant.

If I had to rely on selling shares to fund my lifestyle, then yes I would be nervous, but thankfully that's not the case.

[spoonman]

#084 10/16/2014 -- Update Before Radio Silence

Just wanted to give a quick update before we take a little break from the forums. Without any furniture (and soon no internet connection) it will be hard to work on the computer.

We've made great progress selling our stuff. We've sold all of the big pieces of furniture and expect to finish up everything else in the next couple of days. We've also started to pack things into boxes we got for free from people on Craigslist. The free boxes came with packing paper as well, so all in all we saved around $75.

We've been going back and forth about sending our boxes to the PNW via US mail or Amtrak Express. The reason we flopped back and forth before settling on Amtrak Express again is because our car can only handle so many boxes at a time. We determined that we can drop all 10 boxes at the Amtrak station with two separate car trips. USPS would have delivered our stuff to our door, but it would have been over twice as expensive as Amtrak Express. The added hassle of picking up and dropping off our stuff and Amtrak stations will be worth it. (We also looked into the $19.95 U-Haul special, but soon realized that the true cost of that rental is $60-$80 a day.)

We'll be back on the forums in about a week and report on our moving experience.

[George the original one]

Excellent!

Keep a weather eye on the Siskiyou summit, though it's probably early enough that you won't be snowbound. If Siskiyou is challenging, then you've got about 3-4 more summits that might present similar challenges.

[Tyler9000]

Happy moving! And enjoy unplugging for a little while.

[Legthorn Brownboat]

Thank you for your journal; I’ve read the whole thing in the last week and really feel like I have a greater understanding of your journey, and FI in general. You journal has been so personal, and I’ve enjoyed hearing your story. Thank you so much for sharing! I apologize for the below bombardment of questions, but I’m very interested in in hearing your take. You seemed like a “normal” guy with extra-ordinary goals (and thus relatable), whereas I feel like some of the ERE community are full of super-human renaissance men (who are inspirational of course, but feel difficult to relate to). Take your time in answering the questions that you want to

8k, 12k, 16k - How did you arrive at these figures, i.e. what was your estimation process? I assume that’s for the both of you, meaning that PNW breaks down to 8k/yr/person. I know that Jacob can hit 5k/yr/person, but for us mere mortals even 8k seems so low. By all means please keep chronicling your journey, so others like myself can see if it can be done by non-Ubermensch. Your budget breakdown shows more like 20k (supplemented with IRA withdrawals), but are you accounting for lump expenses? You have a discretionary category, but have mentioned international travel, do you think you’ll be able to fit all of these things (as well as 1-off costs like furniture, moves, etc) into an amortized $400/mo? You also are going with high-deductible HSA, but does your accounting cover hitting the deductible every decade or so?

How did your spoongirl first feel? Was she like “hells yeah!” or did this slowly evolve over time?

I notice a common theme among your writings and others in the FI/ERE community on Stoicism. I’m been reading a little myself on it, but I’m interested in your personal take. Has it helped you out at all? In what way?

How did you manage to increase your nest egg so much in 18 months? Were you heavily increasing monthly from your income or were you primarily just re-investing the dividends? I’ve been interested in dividend growth investing, but everything I can find tends to show it inferior to index-based strategies; what makes you go for it? Is it just the monthly income aspect of it?

Finally, when will you complete your self-interview?

[spoonman]

#085 10/25/2014 -- All Settled in the PNW

@Legthorn Brownboat: I'll answer your questions in another post, hang tight!

Ahhhh, -now- it feels like we’re FI! After weeks of preparation, we have successfully made our way to the Pacific Northwest. The last few weeks have provided us with the great stoic challenge of voluntary discomfort. Our world has consisted of living with little or no furniture and contorting our bodies in all sorts of painful ways. But now we are settled in and ready to enjoy this new chapter in our lives.

As you all may recall, we decided to sell all of our furniture because the cost of actually hiring movers was way higher than the cost of the furniture itself. Thanks to Spoongirl’s amazing skills with Craigslist, we managed to sell 95% of our stuff and made about $1700. We also took the opportunity to get rid of other superfluous personal possessions, including stuff I had been holding onto for years. I could write many pages on the fractal nature of personal possessions and how they weigh you down, but suffice it to say that we spent many hours going through a loooot of shit, mostly to digitize and shred paperwork. When we moved out of our condo a year ago, we got rid of over 60% of our things, and this time we got rid of 60% of what we had left. Our goal was to reduce our personal possessions to things that can fit in our car (mostly composed of sensitive things, like computers and electronics) and an additional 10 boxes reserved for clothes, linens, and other semi-necessary items.

We decided to ship the 10 boxes to the PNW via Amtrak’s Express Shipping. The image below shows 5 of our boxes loaded onto a pallet. We shipped two pallets weighing a total of 340 pounds and only paid $208. The amount we paid is far lower than USPS, which would have been at least $200 more. The catch with Amtrak Express is that you have to drop off the boxes at the station and then pick them up at the destination station. Given the limited space in my 4-door sedan, we had to make two trips on both ends. Our first drop-off trip to LA Union Station was a bitch because we had to fight through traffic and meander through the station looking for the shipping area (people on the phone told me it was “around the back”, it was a lot more difficult to find than that). The second drop off trip was not bad at all because we knew what to expect.



Our shipment actually arrived in the PNW before we did. Picking up our boxes at the PNW station was a piece of cake because the place was not as hectic as LA’s.

Our drive up here was long but very enjoyable. This was my first time seeing Mount Shasta (image below) since I was 13. I love the stratovolcanoes of the PNW, they’re all majestic and beautiful. The other image below was taken from our hotel room (we broke up the drive into two days and spent the night in Ashland, Oregon).



By moving to the PNW we are taking advantage of the miracle of geographic arbitrage. Our one-bedroom apartment is less than 1/3 of the cost of our previous one-bedroom apartment in LA. Additionally, the new apartment was recently renovated and is far nicer. It also includes a washer and dryer in the unit! In other words, we have given ourselves an apartment upgrade by embracing a different part of the country.

The catch with the PNW, of course, is that it rains a lot, and rain it did when we got here. The day we arrived the region received more rain than LA has gotten in an entire season. It was challenging unloading our car in this wet weather, but we powered through anyway.

It took us two days to acquire and set up furniture for the apartment. We only spent around $1300 getting a cheap set of furniture, less than the $1700 we made selling our stuff in LA. Our sore bodies are very grateful to finally have a comfortable bed and a computer desk!

All in all, this move has been a huge DIY exercise. We have learned many lessons, but the most important of all is that possessions are the enemy of mobility. When we eventually go abroad, we will trim down our stuff to the bare essentials.

[1taskaday]

Loving the journal!

[spoonman]

@1taskaday: Glad you're enjoying the journal, I think the best is yet to come =).

[BPA]

Thanks for the update! Of all EREers and Mustachians who have FIREd, your story is the one that resonates most with me.

My plans include FIRE-ing close to home first and then moving to a less expensive part of my country. I had considered selling all of my furniture and starting fresh in the new place and now I'm more convinced than ever that it's a good idea.

I have 418 days to go if all goes reasonably well. I can't wait.

Thanks again for the inspiration.

[spoonman]

@BPA: I hope this journal continues to inspire you, just as I got lots of inspiration from other journals.

The cleansing effect that comes from selling most of your stuff is great.

[spoonman]

@Legthorn Brownboat: Thanks for hanging in there, below are the answers to your questions:

8k, 12k, 16k - How did you arrive at these figures, i.e. what was your estimation process? Those figures were mostly notional. The 8K mark represents a guesstimate of our potential annual expenditures if we lived in a cheap country like Thailand. The guesstimate comes from other folks that have retired abroad on the cheap. The 12K comes from a similar estimate of annual expenses associated with living in a cheap (most likely midwestern) city, such as Oklahoma City or thereabouts. Likewise, the 16K is based on my estimates of living in a cheap area of the PNW. Again, these are all just notional thresholds that largely depend on our ability to adhere to a budget.

I assume that’s for the both of you, meaning that PNW breaks down to 8k/yr/person. I know that Jacob can hit 5k/yr/person, but for us mere mortals even 8k seems so low. On the surface, 8k/yr/person does seem low, but what you have to understand is that huge synergies can be achieved when two people live together, such as halving the cost of rent. In addition, when you don’t work a job you can spend more time learning how to cook at home and totally slash your food expenditures. Initially it will be difficult to adhere to our budget, but after a few months we don’t expect it to be that hard.

Your budget breakdown shows more like 20k (supplemented with IRA withdrawals), but are you accounting for lump expenses? Initially, our “Escape Fund” will help us deal with lump expenses, such as travel from one country to another. Eventually, dividend growth and greater skill with our budget will allow us to handle one or two lump expenses per year.

You also are going with high-deductible HSA, but does your accounting cover hitting the deductible every decade or so? The healthcare landscape has changed since I first mentioned using a high-deductible plan. Our HSA currently has enough money to meet the annual deductible of our current health plan several times over. As we get older, we’ll have to be diligent about keeping our HSA well funded. Since we are still young and very healthy, we have time to keep making contributions.

How did your spoongirl first feel? Was she like “hells yeah!” or did this slowly evolve over time? At first she was thrilled about any plan for early retirement, like “hells yeah!”, but still cautiously skeptical, especially after I initially proposed the process could take 10 years. It took a few conversations to explain exactly how dividend income worked in a way that allows us to fulfill our dreams of travelling while living frugally. But once that was understood, she was fully on board. Fortunately we each had led frugal lives already so having a plan like this just gave us a goal to work towards in a way of rewarding our lifestyle.

I notice a common theme among your writings and others in the FI/ERE community on Stoicism. I’m been reading a little myself on it, but I’m interested in your personal take. Has it helped you out at all? In what way? Absolutely it has helped me. I learned not to get aggravated whenever the bus was late, or when I was asked to fill out a TPS report. The modicum of Stoicism that I have cultivated has helped me in our recent move to the PNW. Instead of plainly viewing our move as a “bitch” I tried to view it as an exercise in voluntary discomfort, which has given me a much greater appreciation for the comforts of daily modern life that so many of us take for granted. The truth is that we live in a tremendously rich nation with countless comforts, so there is hardly a need to complain about much. Stoicism and early retirement go hand in hand because you learn to understand the difference between needs and wants.

How did you manage to increase your nest egg so much in 18 months? The key was having very high dual incomes and a persistent savings rate of over 60%. I also reinvested dividends, which had a significant impact once our dividend income passed the $1000/mo threshold.

I’ve been interested in dividend growth investing, but everything I can find tends to show it inferior to index-based strategies; what makes you go for it? Is it just the monthly income aspect of it? The short answer is yes, it’s the very reliable income aspect of it. The goal of my DGI portfolio is to generate an ever increasing stream of income that outpaces inflation. Index investing is great, and I recommend that strategy to most people, but it is simply not as good at providing a reliable monthly income that outpaces inflation. Since index investing is generally not as realiable income-wise, you'll end up having to sell shares for income. Ask yourself the following question: If the market takes a 50% dive, will you want to continue selling shares to fund your lifestyle? I continually ask myself that question, and the answer I give myself is no fucking way. From my point of view, it’s much easier to check the health of my dividend paying companies than it is to respond to the whims of the market. For instance, the market has recently made violent gyrations that have tested the patience of most investors, but I haven’t batted an eyelash because the dividends keep rolling in like clockwork.

Finally, when will you complete your self-interview? In about two months from the day we moved to the PNW, so around December.

I will add that I very much look forward to our days here in the PNW. I will have time to think and strategize our future adventures.

[Legthorn Brownboat]

Wow, thank you for your very detailed reply! I look forwards to hearing about your journey, and perhaps a tiny bit of vicarious living.

[spoonman]

#086 10/30/2014 -- Playing House and Other Things

Yesterday marked our one-week anniversary since we moved to the PNW. It has been an interesting week full of apartment related tasks and some minor paperwork. We are basically done playing house: we've put away all the boxes and have made ourselves comfortable in our new apartment. We are cooking at home a lot, have taken our time with administrative tasks, and spent some time exploring the local area a bit.

Speaking of administrative tasks, we're going through the chore of getting new driver's licenses and plates for the car. The process has been relatively easy but a bit annoying, I hope to be done with that by early next week. It'll be interesting getting a new driver's license because I'm starting to realize how much an everyday item is part of my identity. I think that after getting that stuff done we'll really feel like true "citizens" of the PNW.

[spoonman]

#087 11/02/2014 -- Daylight What???

In most of the US states we go through a painful exercise twice a year called "Daylight Savings Time". In the Spring we offset our clocks forward by an hour. In essence, you lose an hour and it makes it harder to get up in the morning. In the Fall, we're supposed to gain that hour back by offsetting our clocks back an hour. Normally, I would be happy to gain that hour back but this time I am happy that I just have to humor the system by allowing my electronic devices to adjust automatically. Next Spring I'll be even happier because losing an hour won't be a big deal at all.

I'm wallowing in the luxury of not having to care about the clock all that much. It's one of the greatest freedoms FI gives us.

[spoonman]

#088 11/05/2014 -- Preparing Meals at Home

One of the keys to calling it quits early in life is to have control over your food expenses. Of all the measures that we’ve taken in the past year to lower our expenses, the food category is the last one that we’ve had the chance to address seriously. While working full time jobs we hardly had the energy and motivation to spend less on food. But now that we’re fully settled in the PNW and face our first month under a serious budget (more on that in a future post), we have to put our game faces on and try to stay within our notional budget of $400/month for the both of us. To that end, we’ve started to make home cooking the cornerstone of our eating activities.



We’ve been preparing meals at home for about four weeks now. We’ve adopted a semi-primal diet (i.e. low on grains, legumes, and carbs in general) that has worked out great for us so far. In the first two weeks after adopting the diet I lost 9 annoying pounds concentrated around my gut. In any case, my morning snack consists of a protein shake that I drink after a short-but-intense workout. I make the protein shake using a (100% Whey) protein powder that costs about $1/shake when mixed in with a banana.

Lunch consists of a big salad containing lettuce, spinach, cucumber, tomatoes, avocados, and a bit of canned salmon. I dress the salad with one teaspoon of extra virgin olive oil and one teaspoon of balsamic vinegar. Over the next few weeks we’ll be developing several variations of this salad, but so far I’m loving all these veggies.

A mid-afternoon snack consists of a handful of almonds. I try to limit the number of almonds to about 12-15, which is enough to carry me to dinner. Every so often we cheat a little bit by treating ourselves to small portions of some other snack, Spoongirl favors salty starches.

Dinner typically consists of steak and tomatoes. My favorite type of steak is beef skirt steak, which tends to be a bit pricey so we change it up with other cheaper cuts. At the end of the day we spend about $4.50 to $5.90/pound on meat. I try to bring the cost average down by having chicken drumsticks every so often, which run about $1.20/pound. I’ve been cooking the steaks with a nice grilling pan that I recently got from IKEA. For the tomatoes, we simply season with a bit of sea salt and black pepper.

I should note that minimizing grocery costs would be very easy if we embraced grains and legumes, which are ridiculously cheap, i.e. rice and beans. In fact, a grain based diet had been my plan for the longest time, but after experiencing the benefits of a low carb diet I don’t think I’ll ever go back to a diet dominated by grains and legumes. It’s an option that we’ll keep in the back of our pockets, but in the coming months we’ll continue to explore cost effective, low-carb recipes.

[George the original one]

How are you coping with this year's PNW mild fall weather? Normally we have a few frosts before Halloween, but this fall is unusually warm due to the pineapple express not being jarred loose. Plus the pineapple express is uncharacteristically dry this year; usually we get deluges when it is in place.

[spoonman]

@GTOO: We're enjoying the mild weather quite a bit, but we know the best is yet to come. The weather seems easy and doable now, but we will be tested for real in the months to come.

I'll have to google "pineapple express", I thought it was the name of a movie =).

[spoonman]

#089 11/12/2014 -- Getting Acclimated

It's been a while since I've checked in. We've been busy enjoying our new lives in the PNW as well as tying up some loose ends.

As I'm sure everyone in the US is aware, the northern part of the country is getting hit by a brutal cold snap, and the PNW is feeling it a bit. We're finally getting the cold weather that we've been mentally preparing for. The winter gear that we brought from California should still do us good here, but I always have to remember to wear a scarf before going out.

Before coming to the PNW we canceled our health coverage through the California health exchange. Since they are going through some sort of system upgrade our cancellation request has not gone through, so the insurer has been sending us bills for coverage that we did not ask for. I had to call the insurer to straighten things out and thankfully they are willing to give us a break because many of their customers are going through the same issue.

Other than the above, we are just taking it easy right now. I prefer to wake up early each morning, but if I had a rough night I just sleep in until 8:30am. We also take the time to exercise and cook.

As far as starting big post-FI projects, I'm biding my time right now. Eventually I will come up with a nice project that will keep my mind sharp without worrying about making money.

[Tyler9000]

If moving to a new city doesn't count as a big post-FI project, I can't wait to see when you find one. You've more than earned some time to just relax and enjoy life. Congrats on the new digs!