This month I made a change to my 401(k) contribution and I'm still waiting to see the final contribution and balance numbers. However, I'm a bit anxious to report my report, so I'll post my expenses today and hopefully do a full report in the next few days.
Expenses: $2477
Rent $1,325
Groceries $263
Shared $247
ATM $200
Bars $154
Wedding $126
Utilities $106
Restaurants $44
Books $10
Pharmacy $2
My expenses were down 8% from $2679 last month, which I was pretty happy about. Groceries were quite low despite making a several hundred dollar bulk purchase (tuna, pasta, tomato sauce, chicken broth), going on a weekend vacation where we splurged a bit, and having to pay for a hotel for a wedding. I'm still spending way too much at bars. It's pretty absurd that I routinely spend more per month on alcohol than eating out. I'd like to flip those numbers around since I get much more pleasure and nutrition from a nice meal.
Bad news (financially speaking) for September is that I'm going on a two week international vacation, which I bought with airline miles, but I'll still have to pay for food and hotels. I also have to do another weekend trip abroad that is bound to cost me $300+. These are commitments that I can't get out of, so I'm just going to accept it and try to minimize the damage, have a good time and plan to make it up in October.
MDS' Journal
Update on the income side:
I started contributing much more to my 401(k) because
1) I want to lower my taxable income and
2) because Akratic convinced me to include retirement accounts in my plan
These are the month over month changes:
Net worth: +1.77%
SWR: 18.96% to 17.22%
Savings rate: 62% to 65%
I've also decided to include pretty SWR graphs in my posts:
After tracking my expenses for a few months, I think a reasonable amount for my target lifestyle right now is $2500/month. I know that seems like a lot for one person (it's $30K/year), but ~50% of that is rent. In other words, I'm making a conscious decision to consume that much a month.
Now that I've "fixed" my lifestyle, I want to focus on generating some side hustle income streams. I partnered with another blogger and we submitted two ad-supported Android apps that have grossed $1.22 so far. Big money! But seriously, I'm looking into ways to scale this so we're making at least $40/month. I think that's a modest, achievable goal.
I still have quite a bit sitting in cash, so I'm seriously looking into buying a rental property in the next couple months. So far I've read a couple real estate books and have talked to a loan officer, who told me that I qualify for a $500K house. There's no way I'm going that high and will most likely stick to the $200K-$300K range so I can get a higher cap rate.
I'll be partnering with a family member, so it's getting a bit complicated. I completely trust this person and vice versa, but I still want to write everything out so the agreement is crystal clear. Our tentative plan is to split the down payment and all expenses (closing costs, property taxes, insurance, maintenance), but have the mortgage only in my name.
This is how I see the pros and cons:
My pros: 1) My name will be on the title, so legally the house will be mine 2) I can deduct mortgage interest
My cons: The mortgage is in my name so if my partner walks, I'm on the hook for the mortgage
Partner pros: 1) No risk for the mortgage
Partner cons: 1) Name isn't on the title 2) can't deduct the mortgage interest
Does anyone see any major problems with this, legal or otherwise? Does this seem like a fair deal? It seems like the chance of my partner walking is pretty low if they've already put down money for a down payment and their name isn't on the title, so it may be unfair for them. Perhaps I could add their name to the title?
I started contributing much more to my 401(k) because
1) I want to lower my taxable income and
2) because Akratic convinced me to include retirement accounts in my plan
These are the month over month changes:
Net worth: +1.77%
SWR: 18.96% to 17.22%
Savings rate: 62% to 65%
I've also decided to include pretty SWR graphs in my posts:
After tracking my expenses for a few months, I think a reasonable amount for my target lifestyle right now is $2500/month. I know that seems like a lot for one person (it's $30K/year), but ~50% of that is rent. In other words, I'm making a conscious decision to consume that much a month.
Now that I've "fixed" my lifestyle, I want to focus on generating some side hustle income streams. I partnered with another blogger and we submitted two ad-supported Android apps that have grossed $1.22 so far. Big money! But seriously, I'm looking into ways to scale this so we're making at least $40/month. I think that's a modest, achievable goal.
I still have quite a bit sitting in cash, so I'm seriously looking into buying a rental property in the next couple months. So far I've read a couple real estate books and have talked to a loan officer, who told me that I qualify for a $500K house. There's no way I'm going that high and will most likely stick to the $200K-$300K range so I can get a higher cap rate.
I'll be partnering with a family member, so it's getting a bit complicated. I completely trust this person and vice versa, but I still want to write everything out so the agreement is crystal clear. Our tentative plan is to split the down payment and all expenses (closing costs, property taxes, insurance, maintenance), but have the mortgage only in my name.
This is how I see the pros and cons:
My pros: 1) My name will be on the title, so legally the house will be mine 2) I can deduct mortgage interest
My cons: The mortgage is in my name so if my partner walks, I'm on the hook for the mortgage
Partner pros: 1) No risk for the mortgage
Partner cons: 1) Name isn't on the title 2) can't deduct the mortgage interest
Does anyone see any major problems with this, legal or otherwise? Does this seem like a fair deal? It seems like the chance of my partner walking is pretty low if they've already put down money for a down payment and their name isn't on the title, so it may be unfair for them. Perhaps I could add their name to the title?
-
George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
I see, thanks George. I did a quick search and found this post that quotes the IRS:
http://www.mymoneyblog.com/mortgage-int ... perty.html
And here's a direct link to the IRS website for residential rental properties (non personal use of dwelling): http://www.irs.gov/publications/p527/index.html
It looks like I wouldn't be able to take an itemized deduction like you said, but I'd only pay taxes on rent minus expenses (which would include mortgage interest, insurance, property taxes, utilities, cleaning and maintenance, property management fees, repairs). I suppose I can think of it like a standalone business that has revenue and expenses and then pays out any remaining income to the partners.
Therefore, if the property were actually cash flow negative or close to it, it would be a non-issue. I'm expecting it to be cash flow positive, but there's probably a way to split the income like you said. I wonder if we could just set it up so I pay out interest income to him.
http://www.mymoneyblog.com/mortgage-int ... perty.html
And here's a direct link to the IRS website for residential rental properties (non personal use of dwelling): http://www.irs.gov/publications/p527/index.html
It looks like I wouldn't be able to take an itemized deduction like you said, but I'd only pay taxes on rent minus expenses (which would include mortgage interest, insurance, property taxes, utilities, cleaning and maintenance, property management fees, repairs). I suppose I can think of it like a standalone business that has revenue and expenses and then pays out any remaining income to the partners.
Therefore, if the property were actually cash flow negative or close to it, it would be a non-issue. I'm expecting it to be cash flow positive, but there's probably a way to split the income like you said. I wonder if we could just set it up so I pay out interest income to him.
September 2012 Summary
Income: $8,332
After tax salary: $4,936
401(k) contribution: $2,553
Dividends and interest: $844
Expenses: $3,972
Savings rate: 52%
Average trailing 12-month expenses: $2,822
SWR: 9.8%
I had previously thought that $2500 would be a reasonable budget for me, but it looks like it may be more like $2700. We'll see as time goes on.
I had one of my most expensive months with two international trips and several unusual expenses. I ate out probably about 20 days out of 30 and even had one meal that was $180 a head, which is definitely a splurge. However, I was happy to keep my savings rate above 50%, but this was mostly due to the fact that my Q3 dividends came in. If not, I probably would have dipped below 50. I really went balls to the wall with the spending. I didn’t give one thought to buying ridiculously lavish meals, so it’s nice to know that I can maintain a reasonable savings rate while giving no thought to saving. This is because I did much of the saving “upfront” by not having any recurring monthly bills. My only recurring expenses are rent, utilities and a $25 phone bill.
I also realized that I was inflating my safe withdrawal rate by a factor of two! How stupid was that? I feel much better seeing a 9-10% SWR. If I didn’t have this month of splurging, I’d be sitting around 8.5%, but now I’m at around 10%.
My real estate project has been put on hold since I was traveling so much, but I hope to ramp that back up this week. I get occasional inspiration from FI Fighter who purchased a place and prepared it for a tenant like it was nothing. The rent just showed up in his most recent monthly report. That makes the whole process seem a little less overwhelming.
Here's an updated graph of my SWR:
Income: $8,332
After tax salary: $4,936
401(k) contribution: $2,553
Dividends and interest: $844
Expenses: $3,972
Savings rate: 52%
Average trailing 12-month expenses: $2,822
SWR: 9.8%
I had previously thought that $2500 would be a reasonable budget for me, but it looks like it may be more like $2700. We'll see as time goes on.
I had one of my most expensive months with two international trips and several unusual expenses. I ate out probably about 20 days out of 30 and even had one meal that was $180 a head, which is definitely a splurge. However, I was happy to keep my savings rate above 50%, but this was mostly due to the fact that my Q3 dividends came in. If not, I probably would have dipped below 50. I really went balls to the wall with the spending. I didn’t give one thought to buying ridiculously lavish meals, so it’s nice to know that I can maintain a reasonable savings rate while giving no thought to saving. This is because I did much of the saving “upfront” by not having any recurring monthly bills. My only recurring expenses are rent, utilities and a $25 phone bill.
I also realized that I was inflating my safe withdrawal rate by a factor of two! How stupid was that? I feel much better seeing a 9-10% SWR. If I didn’t have this month of splurging, I’d be sitting around 8.5%, but now I’m at around 10%.
My real estate project has been put on hold since I was traveling so much, but I hope to ramp that back up this week. I get occasional inspiration from FI Fighter who purchased a place and prepared it for a tenant like it was nothing. The rent just showed up in his most recent monthly report. That makes the whole process seem a little less overwhelming.
Here's an updated graph of my SWR:
Last edited by mds on Thu Jul 17, 2014 12:04 pm, edited 1 time in total.
I had a significantly better savings rate this month, up from 52% to 70%.
Here's the breakdown:
Income: $7,777
After tax salary: $5,151
401(k) contribution: $2,521
Dividends and interest: $105
Expenses: $2,370
Rent $1,375
Utilities $59
Restaurants and Bars $317
Groceries $304
Toiletries $29
Cash $100
Health and Fitness $104
Gifts $53
Travel $15
Dry cleaning $15
Assets: $348K
Cash: $84K
CD: $20K
Investments: $129K
Retirement: $115K
Metrics
Savings rate: 70%
Average trailing 12-month expenses: $2,732
12-month SWR: 9.42%
Wahoo! I’m back to my normal spending behavior. In fact, I had my second best month of spending so far with a total of $2370, $210 higher than my record of $2160.
I figured this would be a good time to take a look at the categories of my spending to figure out where I can cut back. The one that still stands out is my Restaurants and Bars category, which I think I should be able to reduce this by $100 in November. I’m fairly happy with all my other categories since the atypical expenses were pretty much unavoidable. I’ll focus on the groceries category only after I get my restaurant spending under control since one is dependent on the other.
On the investment front, I moved $16,000 in cash into my non-retirement investments and will continue to do so until about February when I’ll have about $30K sitting in cash for half of a downpayment. I expect to have to pay a pretty hefty tax bill for 2012 since I had some significant short-term capital gains this year, so I’ll keep some more in the savings account until I get the exact figure.
My finances and investments are really on auto-pilot now, so now I can devote more energy to finding alternative sources of income. I have a meeting next week to take on a contracting job. I’m planning to charge $95/hour and will probably work for 10 hours this month, so could add about $1000 to my November income. I’m also going to continue to look out for real estate deals.
My goals for this month:
Spend no more than $200 on restaurants and bars (I’ve already spent about $50)
Secure contracting job for $95/hour
Find five real estate properties and do a cash flow analysis on each
Here's the breakdown:
Income: $7,777
After tax salary: $5,151
401(k) contribution: $2,521
Dividends and interest: $105
Expenses: $2,370
Rent $1,375
Utilities $59
Restaurants and Bars $317
Groceries $304
Toiletries $29
Cash $100
Health and Fitness $104
Gifts $53
Travel $15
Dry cleaning $15
Assets: $348K
Cash: $84K
CD: $20K
Investments: $129K
Retirement: $115K
Metrics
Savings rate: 70%
Average trailing 12-month expenses: $2,732
12-month SWR: 9.42%
Wahoo! I’m back to my normal spending behavior. In fact, I had my second best month of spending so far with a total of $2370, $210 higher than my record of $2160.
I figured this would be a good time to take a look at the categories of my spending to figure out where I can cut back. The one that still stands out is my Restaurants and Bars category, which I think I should be able to reduce this by $100 in November. I’m fairly happy with all my other categories since the atypical expenses were pretty much unavoidable. I’ll focus on the groceries category only after I get my restaurant spending under control since one is dependent on the other.
On the investment front, I moved $16,000 in cash into my non-retirement investments and will continue to do so until about February when I’ll have about $30K sitting in cash for half of a downpayment. I expect to have to pay a pretty hefty tax bill for 2012 since I had some significant short-term capital gains this year, so I’ll keep some more in the savings account until I get the exact figure.
My finances and investments are really on auto-pilot now, so now I can devote more energy to finding alternative sources of income. I have a meeting next week to take on a contracting job. I’m planning to charge $95/hour and will probably work for 10 hours this month, so could add about $1000 to my November income. I’m also going to continue to look out for real estate deals.
My goals for this month:
Spend no more than $200 on restaurants and bars (I’ve already spent about $50)
Secure contracting job for $95/hour
Find five real estate properties and do a cash flow analysis on each
November 2012 - Not my best month, but not so bad.
Income: $7,403
After tax salary: $5,541
401(k) contribution: $1,753
Dividends and interest: $110
Expenses: $2,853
Rent $1,375
Phone $25
Utilities $60
Bars + Restaurants $359
Groceries + Pharmacy $262
Transportation $85
Business related $183
Health $91
Gifts $413
ATM $0
Vacation $0
Home $0
Other $0
Metrics
Savings rate: 61%
Average trailing 12-month expenses: $2,780
12-month SWR: 9.89%
Assets: $352K
Cash: $71K
CD: $20K
Investments: $145K
Retirement: $116K
This month didn’t go as well as I had hoped. I failed to meet all three of my goals for November:
-Spend no more than $200 on restaurants and bars (I’ve already spent about $50)
-Secure contracting job for $95/hour
-Find five real estate properties and do a cash flow analysis on each
The only one that I came close to was securing a contracting job. I had a meeting with my first potential client and made a verbal agreement do about 10-20 hours of contracting at $100/hour. I’m hoping to actually start coding in December, but I won’t be devastated if it doesn’t work out. It’s more of a proof of concept that I can easily secure contracting work if I was to ever quit my day job. Speaking of which, I spent a few hours yesterday more concretely defining my 4-year life plan. Here’s the table I used to formulate my plan:
These were the inputs for the table:
I wanted to see how much non-investment income I’d need to break even with my current expenses and a fixed lifestyle of $48,000 a year (conservatively high). For example, if I had a net worth of $600,000, a 4% withdrawal rate would give me $24,000 of income per year. Since my current spending is about $34,000, I would need $12,000 of contracting work (after taxes) to completely cover my expenses. If my expenses rose to $48,000 a year, I would need another $24,000 of contracting work – not too overwhelming.
While striving for financial independence, it’s easy to get discouraged when you see 5+ year timelines. Doing this analysis made me realize that I can lop off a few years if I’m comfortable quitting my job before my passive investment income completely covers my expenses. I had become obsessed with the idea of sitting back and letting my investments do all the work, but when I actually try to imagine myself in that post-FI situation, I’m still writing code every day, learning new technologies and dabbling in small business ventures, hopefully creating some wealth as a by-product.
We’re very fortunate to live in a time that with a little hustle you can make money on the side without constraining yourself with full-time employment. My ideal situation would not to be contracting, but to be working on my own product business. The low income requirements broaden the space of potential apps or businesses that I could work on. Since my goal is to generate a measly $800/month, I could create apps that others wouldn’t take the time to create.
Additionally, I could always fall back to freelancing. Using the numbers from the table above, if I needed $9,500 a year to meet my expenses, I would only need to secure 126 hours of freelance work if I charged $75/hour. If I could find 20 hours of work per week, I could be done with my work for the entire year in 7 weeks. A $100/hour rate would only require 120 hours or five 20-hour weeks.
It’s worth it to note that my net worth projections above are all dependent on a 5% growth rate in the market over the next few years, something that may not actually pan out. We may have another -30% year as in 2008 and my plans will be delayed, but we may have a few more gangbuster years like 2009 and 2010 (26% and 15% respectively) and I could get there earlier, who knows.
To bolster my confidence a bit, I used FIRECalc to see how spending $24,000 off of a principal of $600,000 would have performed over 111 possible 30-year periods. Unfortunately, the simulation failed in some cases:
“Here is how your portfolio would have fared in each of the 111 cycles. The lowest and highest portfolio balance throughout your retirement was $-240,592 to $3,407,685, with an average of $1,058,935. For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 94.6%.”
The engineer in me wants a success rate of 100%, so I lowered spending down to $20,000, which resulted in ending with $144,114 to $3,769,915, with an average of $1,386,634.
So there you have it. My official goal is to reach $600,000 in net worth, quit my job, withdraw $20,000 per year from my investment account and start my own product or freelance business to cover the rest of my expenses. My current $33,000/year lifestyle would then require $13,000/year in non-passive income. If I inflated my lifestyle ~50% up to $48,000/year, I would require $28,000 in non-passive income. If the market returns 0% for the next few years, I’ll get there in four years. If it returns 5.5%, I can get there in three.
It feels great to have a clear and simple financial goal.
Income: $7,403
After tax salary: $5,541
401(k) contribution: $1,753
Dividends and interest: $110
Expenses: $2,853
Rent $1,375
Phone $25
Utilities $60
Bars + Restaurants $359
Groceries + Pharmacy $262
Transportation $85
Business related $183
Health $91
Gifts $413
ATM $0
Vacation $0
Home $0
Other $0
Metrics
Savings rate: 61%
Average trailing 12-month expenses: $2,780
12-month SWR: 9.89%
Assets: $352K
Cash: $71K
CD: $20K
Investments: $145K
Retirement: $116K
This month didn’t go as well as I had hoped. I failed to meet all three of my goals for November:
-Spend no more than $200 on restaurants and bars (I’ve already spent about $50)
-Secure contracting job for $95/hour
-Find five real estate properties and do a cash flow analysis on each
The only one that I came close to was securing a contracting job. I had a meeting with my first potential client and made a verbal agreement do about 10-20 hours of contracting at $100/hour. I’m hoping to actually start coding in December, but I won’t be devastated if it doesn’t work out. It’s more of a proof of concept that I can easily secure contracting work if I was to ever quit my day job. Speaking of which, I spent a few hours yesterday more concretely defining my 4-year life plan. Here’s the table I used to formulate my plan:
These were the inputs for the table:
I wanted to see how much non-investment income I’d need to break even with my current expenses and a fixed lifestyle of $48,000 a year (conservatively high). For example, if I had a net worth of $600,000, a 4% withdrawal rate would give me $24,000 of income per year. Since my current spending is about $34,000, I would need $12,000 of contracting work (after taxes) to completely cover my expenses. If my expenses rose to $48,000 a year, I would need another $24,000 of contracting work – not too overwhelming.
While striving for financial independence, it’s easy to get discouraged when you see 5+ year timelines. Doing this analysis made me realize that I can lop off a few years if I’m comfortable quitting my job before my passive investment income completely covers my expenses. I had become obsessed with the idea of sitting back and letting my investments do all the work, but when I actually try to imagine myself in that post-FI situation, I’m still writing code every day, learning new technologies and dabbling in small business ventures, hopefully creating some wealth as a by-product.
We’re very fortunate to live in a time that with a little hustle you can make money on the side without constraining yourself with full-time employment. My ideal situation would not to be contracting, but to be working on my own product business. The low income requirements broaden the space of potential apps or businesses that I could work on. Since my goal is to generate a measly $800/month, I could create apps that others wouldn’t take the time to create.
Additionally, I could always fall back to freelancing. Using the numbers from the table above, if I needed $9,500 a year to meet my expenses, I would only need to secure 126 hours of freelance work if I charged $75/hour. If I could find 20 hours of work per week, I could be done with my work for the entire year in 7 weeks. A $100/hour rate would only require 120 hours or five 20-hour weeks.
It’s worth it to note that my net worth projections above are all dependent on a 5% growth rate in the market over the next few years, something that may not actually pan out. We may have another -30% year as in 2008 and my plans will be delayed, but we may have a few more gangbuster years like 2009 and 2010 (26% and 15% respectively) and I could get there earlier, who knows.
To bolster my confidence a bit, I used FIRECalc to see how spending $24,000 off of a principal of $600,000 would have performed over 111 possible 30-year periods. Unfortunately, the simulation failed in some cases:
“Here is how your portfolio would have fared in each of the 111 cycles. The lowest and highest portfolio balance throughout your retirement was $-240,592 to $3,407,685, with an average of $1,058,935. For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 94.6%.”
The engineer in me wants a success rate of 100%, so I lowered spending down to $20,000, which resulted in ending with $144,114 to $3,769,915, with an average of $1,386,634.
So there you have it. My official goal is to reach $600,000 in net worth, quit my job, withdraw $20,000 per year from my investment account and start my own product or freelance business to cover the rest of my expenses. My current $33,000/year lifestyle would then require $13,000/year in non-passive income. If I inflated my lifestyle ~50% up to $48,000/year, I would require $28,000 in non-passive income. If the market returns 0% for the next few years, I’ll get there in four years. If it returns 5.5%, I can get there in three.
It feels great to have a clear and simple financial goal.
I’m incredibly happy about how things went this month. I had my 3rd lowest spending month combined with my highest income month. On the income side, a bonus and end of quarter/year dividend payments pushed me over $10K, which I think is a record for me. It makes me really wish I had started this investing thing much earlier. I didn’t lift a finger and bam, I have $2200 added to my account. It’s quite strange that I still marvel at that. On the spending side, I didn’t spend too much during the holidays since my family has really cut back on our gift-giving. It was a perfect storm that resulted in a savings rate of 82%, a huge record for me. That’s getting into Jacob territory, but I don’t expect it to happen too often.
I read two books this month that really got me excited about my post-FI life: The Art of Non-Conformity and The Education of Millionaires. The Art of Non-Conformity doesn’t have much actionable advice, but reminded me that you can design any kind of life you want within reason. The limiting factor is usually fear and insecurity rather than circumstances.
I highly recommend The Education of Millionaires for anyone planning to start a bootstrapped business or thinking about going to graduate school. It helped me realize that it’s time to stop focusing on the technical aspects of engineering and start learning some sales and marketing skills. We’ve all been sold the idea that if we just keep increasing our technicaly skills (e.g. graduate engineering school), we’ll become more successful. I now see that the greatest returns will come from expanding my professional network, finding a mentors and learning sales and marketing. All these things are out of my comfort zone, so it’ll be a hard road. I’d much rather hole up and learn a new web framework, but at least I now see that would be a waste of time and effort.
I’ll make this post short because I plan to do a 2012 re-cap and 2013 goals post in the next couple of days.
I hope everyone had a great holiday and here are the numbers:
Income: $14,072
After tax salary: $11,294
401(k) contribution: $1,105
Dividends and interest: $1,673
Expenses: $2,572
Rent 1,375
Phone 25
Utilities 64
Bars + Restaurants 305
Groceries + Pharmacy 310
Transportation 39
Business related 105
Health 69
Gifts 67
ATM 100
Vacation 0
Home 0
Other 113
Metrics
Savings rate: 82%
Average trailing 12-month expenses: $2,859
12-month SWR: 9.41%
Assets: $364K
Cash: $73K
CD: $20K
Investments: $153K
Retirement: $118K
I read two books this month that really got me excited about my post-FI life: The Art of Non-Conformity and The Education of Millionaires. The Art of Non-Conformity doesn’t have much actionable advice, but reminded me that you can design any kind of life you want within reason. The limiting factor is usually fear and insecurity rather than circumstances.
I highly recommend The Education of Millionaires for anyone planning to start a bootstrapped business or thinking about going to graduate school. It helped me realize that it’s time to stop focusing on the technical aspects of engineering and start learning some sales and marketing skills. We’ve all been sold the idea that if we just keep increasing our technicaly skills (e.g. graduate engineering school), we’ll become more successful. I now see that the greatest returns will come from expanding my professional network, finding a mentors and learning sales and marketing. All these things are out of my comfort zone, so it’ll be a hard road. I’d much rather hole up and learn a new web framework, but at least I now see that would be a waste of time and effort.
I’ll make this post short because I plan to do a 2012 re-cap and 2013 goals post in the next couple of days.
I hope everyone had a great holiday and here are the numbers:
Income: $14,072
After tax salary: $11,294
401(k) contribution: $1,105
Dividends and interest: $1,673
Expenses: $2,572
Rent 1,375
Phone 25
Utilities 64
Bars + Restaurants 305
Groceries + Pharmacy 310
Transportation 39
Business related 105
Health 69
Gifts 67
ATM 100
Vacation 0
Home 0
Other 113
Metrics
Savings rate: 82%
Average trailing 12-month expenses: $2,859
12-month SWR: 9.41%
Assets: $364K
Cash: $73K
CD: $20K
Investments: $153K
Retirement: $118K
@ MDS
check out this link ... you may find it interesting given your thoughts on sales
http://www.actonmba.org/2012/12/alumni- ... ing-acton/
check out this link ... you may find it interesting given your thoughts on sales
http://www.actonmba.org/2012/12/alumni- ... ing-acton/
Thanks for the link GPMagnus. I was on board until I saw the price tag
I was looking into this guy's book: http://personalmba.com/
I was looking into this guy's book: http://personalmba.com/
-
javengreen
- Posts: 10
- Joined: Sat Jul 14, 2012 3:32 am
I actually own that Personal MBA book and still haven't finished it. If you'd like, you can PM with your address I can mail it off to you and then you can mail it back when you are done.
It's pretty good but all the sections are short. I didn't get sucked in and finish it all in one sitting like I normally do. I still would like to read all the books on his larger reading list some day.
It's pretty good but all the sections are short. I didn't get sucked in and finish it all in one sitting like I normally do. I still would like to read all the books on his larger reading list some day.
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javengreen
- Posts: 10
- Joined: Sat Jul 14, 2012 3:32 am
javengreen - I think I'm going to buy the Kindle version. Thank you for the offer though, that's very kind of you.
I've gotten so spoiled by the Kindle that I can hardly read a physical book anymore. I think it's partly because my eyes are quite tired by the end of the day, so I like to be able to adjust the font size, brightness, etc. I know it's very non-ERE, but it's one of my vices.
I've gotten so spoiled by the Kindle that I can hardly read a physical book anymore. I think it's partly because my eyes are quite tired by the end of the day, so I like to be able to adjust the font size, brightness, etc. I know it's very non-ERE, but it's one of my vices.
January was an ok month with a medicore 61% savings rate. I spent a boat load on groceries this month with some bulk Amazon orders and I went out for some expensive dinners. I expect February to be better on the expense side. It was also my lowest income month to date, which I'm looking into, but I believe it's because of higher taxes. The market did quite well in January, so my net worth increased by 4.3%, a record for me.
My rental property search is gearing up again. There's not too much on the market right now, but I'm going to take a look at five or so properties in the next week. I've refined my criteria a bit. I'm going to go for 3+ bed and 2+ baths that are listed for less than $350,000. I find that properties that cost $400,000 don't fetch rents that justify the $50,000 higher price. It could be that they would appreciate faster, but I want my first property to be cash flow positive in the first year. I've also found that most condos in my area have ridiculous fees, which eat a huge amount of profits. Since I'm planning to hire a management company, I didn't think it would be worth it to pay a management fee and a condo fee, so I'm only looking at single family homes and townhouses with minimal HOA fees. No condos for me.
Real estate has proven to be an inexact science, which makes me quite uncomfortable, but I'm sticking with it and trying to be patient because I really believe it will accelerate my gains in the next few years. A reason to get this done now is that with a steady W-2 job, I can easily get approved for a mortgage. Another reason is that interest rates are at a all time low. I may not be able to lock down a 3.5% mortgage if I wait another year.
On my daily goals side, my green smoothie experiment has been going well. In the last 29 days, I've had 25 green smoothies, so I'm at 86%. I read a book called the Power of Habit this month, which really helped me try to deconstruct my own habit formation. So far it's worked with my green smoothie habit, so I'm going to slowly incoroporate some other daily goals. Some things that come to mind are meditation and a daily evening walk to decompress.
I'm very close to securing that contract programming job at $100/hr. I don't think it'll be very lucrative, but it may boost my income by a few hundred a month with very little work. I underestimated how slow clients move.
I read four books this month, all of which I highly recommend:
Wool Omnibus 1-5, by Hugh Howey
Freedom, by Daniel Suarez
Daemon, by Daniel Suarez
The Power of Habit, by Charles Duhigg
I'll do another post in a few days with numbers and graphs.
My rental property search is gearing up again. There's not too much on the market right now, but I'm going to take a look at five or so properties in the next week. I've refined my criteria a bit. I'm going to go for 3+ bed and 2+ baths that are listed for less than $350,000. I find that properties that cost $400,000 don't fetch rents that justify the $50,000 higher price. It could be that they would appreciate faster, but I want my first property to be cash flow positive in the first year. I've also found that most condos in my area have ridiculous fees, which eat a huge amount of profits. Since I'm planning to hire a management company, I didn't think it would be worth it to pay a management fee and a condo fee, so I'm only looking at single family homes and townhouses with minimal HOA fees. No condos for me.
Real estate has proven to be an inexact science, which makes me quite uncomfortable, but I'm sticking with it and trying to be patient because I really believe it will accelerate my gains in the next few years. A reason to get this done now is that with a steady W-2 job, I can easily get approved for a mortgage. Another reason is that interest rates are at a all time low. I may not be able to lock down a 3.5% mortgage if I wait another year.
On my daily goals side, my green smoothie experiment has been going well. In the last 29 days, I've had 25 green smoothies, so I'm at 86%. I read a book called the Power of Habit this month, which really helped me try to deconstruct my own habit formation. So far it's worked with my green smoothie habit, so I'm going to slowly incoroporate some other daily goals. Some things that come to mind are meditation and a daily evening walk to decompress.
I'm very close to securing that contract programming job at $100/hr. I don't think it'll be very lucrative, but it may boost my income by a few hundred a month with very little work. I underestimated how slow clients move.
I read four books this month, all of which I highly recommend:
Wool Omnibus 1-5, by Hugh Howey
Freedom, by Daniel Suarez
Daemon, by Daniel Suarez
The Power of Habit, by Charles Duhigg
I'll do another post in a few days with numbers and graphs.
Just the numbers in this post.
Income: $7,088
After tax salary: $5,337
401(k) contribution: $1,658
Dividends and interest: $94
Expenses: $2,750
Rent $1,375
Phone $0
Utilities $63
Bars + Restaurants $500
Groceries + Pharmacy $547
Transportation $50
Business related $51
Clothing $20
Entertainment $44
Health $0
Gifts $0
ATM $100
Vacation $0
Home $0
Other $0
Metrics
Savings rate: 61%
Average trailing 12-month expenses: $2,750
12-month SWR: 8.68%
Income: $7,088
After tax salary: $5,337
401(k) contribution: $1,658
Dividends and interest: $94
Expenses: $2,750
Rent $1,375
Phone $0
Utilities $63
Bars + Restaurants $500
Groceries + Pharmacy $547
Transportation $50
Business related $51
Clothing $20
Entertainment $44
Health $0
Gifts $0
ATM $100
Vacation $0
Home $0
Other $0
Metrics
Savings rate: 61%
Average trailing 12-month expenses: $2,750
12-month SWR: 8.68%
February was a pretty good month for me (those two or three days really make a difference apparently). I had my second best month of spending, missing my record by one measly dollar.
I'm still trying to get my rental property completed. This is much more time consuming than I ever thought. I've put out two offers so far. The first I was outbid and the second the owner flat out declined. For the second property, I feel good about my offer since the owner has reduced the price from $316K to $308K to $299K since I made my offer and it's still on the market. I offered $290K, but actually think it's worth more like $280K, so I was being pretty generous. I feel much more confident going through this whole process now that I've made two offers.
Looking at these numbers makes me a little depressed about my rent situation. It accounts for 64% of my expenses! Nothing I can really do about that without making some huge changes though.
The 8% SWR point is within my sights. I'm looking forward to being "50% FI".
Here are my February numbers:
Income: $7,029
Expenses: $2,161
Rent $1,375
Phone $25
Utilities $61
Bars + Restaurants $264
Groceries + Pharmacy $344
Transportation $64
Clothing $27
Metrics
Savings rate: 69%
Average trailing 12-month expenses: $2,687
12-month SWR: 8.35%
I'm still trying to get my rental property completed. This is much more time consuming than I ever thought. I've put out two offers so far. The first I was outbid and the second the owner flat out declined. For the second property, I feel good about my offer since the owner has reduced the price from $316K to $308K to $299K since I made my offer and it's still on the market. I offered $290K, but actually think it's worth more like $280K, so I was being pretty generous. I feel much more confident going through this whole process now that I've made two offers.
Looking at these numbers makes me a little depressed about my rent situation. It accounts for 64% of my expenses! Nothing I can really do about that without making some huge changes though.
The 8% SWR point is within my sights. I'm looking forward to being "50% FI".
Here are my February numbers:
Income: $7,029
Expenses: $2,161
Rent $1,375
Phone $25
Utilities $61
Bars + Restaurants $264
Groceries + Pharmacy $344
Transportation $64
Clothing $27
Metrics
Savings rate: 69%
Average trailing 12-month expenses: $2,687
12-month SWR: 8.35%
Average month because I went a bit crazy on the bars and restaurants side. My spending seems to follow a sine curve – big spending one month, then adjusting back to lentils and rice the next month. I’ve pretty much given up on my rental property project, which I’ll discuss in a future post. Therefore, I moved about $28K in to my Vanguard REIT to get my asset allocation back on track.
I also started reading YMOYL, but I'm pretty disappointed in it so far. I suppose it's because I've already learned most of the principles from other sources. It seems unnecessarily verbose at times.
I did my taxes for 2012 and I'm going to take a huge step backwards in April because of some short term gains I made. It's demoralizing to lose about 4 months of progress in one go, but I guess that's life.
Income: $8,032
After tax salary: $5,724
401(k) contribution: $1,303
Dividends and interest: $1,005
Expenses: $2,741
Rent $1,375
Phone $25
Utilities $66
Bars + Restaurants $709
Groceries + Pharmacy $326
Transportation $47
Clothing $0
Gifts $13
ATM $180
Metrics
Savings rate: 66%
Average trailing 12-month expenses: $2,687
12-month SWR: 8.35%
I also started reading YMOYL, but I'm pretty disappointed in it so far. I suppose it's because I've already learned most of the principles from other sources. It seems unnecessarily verbose at times.
I did my taxes for 2012 and I'm going to take a huge step backwards in April because of some short term gains I made. It's demoralizing to lose about 4 months of progress in one go, but I guess that's life.
Income: $8,032
After tax salary: $5,724
401(k) contribution: $1,303
Dividends and interest: $1,005
Expenses: $2,741
Rent $1,375
Phone $25
Utilities $66
Bars + Restaurants $709
Groceries + Pharmacy $326
Transportation $47
Clothing $0
Gifts $13
ATM $180
Metrics
Savings rate: 66%
Average trailing 12-month expenses: $2,687
12-month SWR: 8.35%
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
Bars & restaurants seem to vary from ~$9/day to $23/day. Even when you're cutting back, to me, that seems like you're making it a daily habit rather than a weekly treat.
Now... I know it would be a big change, but perhaps moving to a lower-priced residence could allow you have the higher tab for bars & restaurants without it becoming an internal fight.
Now... I know it would be a big change, but perhaps moving to a lower-priced residence could allow you have the higher tab for bars & restaurants without it becoming an internal fight.