Early Retirement Extreme Forums

Thanks for all the replies!

@FIBY41 - Thank you! I get some kind of special enjoyment out of making my data visual

@GandK - I'm going to start out with just a bucket, water, towels, and soap for cleaning myself. If I desire it after a while, I may add something to provide overhead showers. I might also decide to add it at some point if it helps me convince a woman to come along with me

People are always asking vandwellers "how will you shower", as if the only way to clean your body is to spray water onto yourself from above. Humans have been around for 200,000 years and only a minority of people have decided over the last <100 years that showering is the way to clean yourself.

M471 - I think I'm not yet to that final decision point where hesitation or indecision is what delays me. Lately, I've just been using more detail in my planning. This is normal for me - to go through layers or phases of planning and updating the plan with better information as I go. I have been feeling quite consistent with my plan - with the goal being 500k capital. While I give some small consideration to getting extra, mainly I'm just wondering when I will hit the number. My desire to quit does surge at times. It's often just "ahh fuck this, I don't want to go to work" or "ahh fuck this, I don't want to be here". In the past when I thought that, I didn't really consider not actually going. Sometimes I do start to think "I wonder how it would go if I just quit today...." but that only lasts a couple seconds because I definitely don't want to quit before selling my house. I come right back to "just focus on what's next to get the house sold"

I am a little curious how I'll feel about the timing as I get really close or pass my capital goal. I hope I can think about it in a way that motivates me or makes me happy rather than stresses me.

@SimpleLife - As mentioned above, I don't think my thoughts on timing and plan adjustments are coming from fear. It's just the next phase of planning, with more details. I do ask "will the plan work?", but it's mainly about making sure I consider the big categories that I would feel like a fool later to not have planned for and to be impacted in unexpected ways.

About my job: well.. "easy" is relative. My job can be very mentally draining when I am "on". That's about 10 days per month, so it's not a ton. All the other days are basically traveling without doing any specific work, or doing stuff in the office that is extremely easy but that I'm rarely ever interested in. During those ten days that I am "on", I have to stay very focused - basically all day. I'm speaking with groups of people and the message and wording is critical. As an introvert, this wears me out. I have built up a lot of "socialization endurance" over the last 2 years of doing this, so it has gotten easier.

My job? Yep, I work in manufacturing. My role is basically a coach/consultant/assessor. There are management/improvement processes that my company is adopting. I make periodic visits to leadership teams to teach/coach/advise them on how to implement and utilize these things. I'm being vague intentionally for privacy, but also because it can be difficult to explain quickly.

My income is less than $150k. When I add up all my post-tax income, it comes to around $80k per year. (That includes post-tax paychecks, 401k contribution and match, pension contributions and growth, HSA contributions, and yearly bonus)

High earners and ERE - I agree with what Cmonkey said. I think many high earners have these in common:
- It's more possible because of their high income
- They are often optimizers
- They are learning a mindset that can nurture the idea. When you get roles with more money, likely you're getting more power, more need to think critically, more experience creating and implementing strategies, more time and need to think "big picture".

C40 wrote:My desire to quit does surge at times. It's often just "ahh fuck this, I don't want to go to work" or "ahh fuck this, I don't want to be here". In the past when I thought that, I didn't really consider not actually going. Sometimes I do start to think "I wonder how it would go if I just quit today...."

I think these sorts of thoughts are normal for someone in your position, or even earlier. I sometimes have them as well. I bet it wouldn't be as bad as we imagine.

Also, I don't think I'd be able to do what you do (the speaking and engaging people several times per week). I'm lucky to have just a few meetings per week but they can be torture. Your retirement will be well deserved! I am really excited for 2016, not only for my own journey but also watching another one walk out of this cave.

-----------------------------------
DECEMBER 2015
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TOTAL SPENDING: $1,144

• Normal spending: $668
• Van spending: $476

I had no hobby/entertainment spending this month so the total is pretty low. The van spending was mostly parts for the electrical system.

This year I stayed home for Christmas and basically skipped the holiday. My grandma still hasn’t stopped buying me presents and she sent me $50. My boss also sent me a card with $50, which was surprising and quite nice of him.



WORK – YEARLY PERFORMANCE REVIEW
(This got really long so I added a TL/DR summary at the bottom)

For much of this year I’ve been trying to spend the least amount of time working while still producing acceptable results. I’ve spent fewer hours working this year, buy far, than any of the previous 10. I did a quick estimation and it looks like I average about 30 hours per week in either a factory or my office, of which I’m only actually doing work about 23 hours per week. I also spend an average of 6 hours per week traveling (and I very rarely do specific work while traveling). This puts my effective hourly wage somewhere around $60/hour for the year. In my last position when I worked in a factory, my effective wage was $40 per hour or less.

Here’s how I reduced my working time:

• FOCUS ON THE PRIORITIES - The “priorities” are our main goals at work. We do a pretty good job of deciding and clarifying these. I do what I need to support those priorities, since that’s the main way we’re measuring our success. I don’t let the other stuff fall through the cracks, but I only spend enough time to accomplish just that – and I don’t work on anything extra or for good measure.
• PRIORITIZATION – Within my own job, I try to only do the stuff that is the most beneficial. And I just don’t do many things with smaller benefits that most others would do. There are a lot of things that I think “that would be good to do” or “I should do this some time”, but unless I really have to, I don’t ever do them. This hasn’t seemed to cause any problem. I’m getting away with some of this because I am well-suited for my role.
• BATCHED EMAIL RESPONDING - I scan most emails within a day or so of receiving them, but I write a great deal of my email replies during just one or two days of the month. For almost anything that will take longer than just a few quick sentences AND that is within the realm of reason to wait, I do wait. This waiting and batching accomplishes two things: #1 – it reduces task switching time so I’m more effective when replying, and #2 – It gives time for other people to respond and alleviate the need for me to do anything.
• SAYING NO - When there are things that I don’t want to do, but my boss or our team is looking for someone to do them, I’m straightforward and just say that I don’t want to do it. This has been surprisingly effective, and no one has ever challenged me.
• LET PEOPLE THINK I’M BUSY - This is a modified technique from the George Castanza career success program. When other people think I must be really busy, I let them go on thinking so. People often think that because they see me infrequently, I must really be working like crazy. I don’t tell them that I might just be at home some of those days they don’t see me. (I work both from my office and in factories so it doesn’t appear that I’m absent from working just because I’m not somewhere)
• SAYING NO TO SOCIAL REQUESTS - For people who travel, there is some established practice of going to dinner together with people from the factory you’re visiting. I turn down nearly all requests for group dinners or outings. I tell them that I’m too busy, sometimes explaining that “busy” is busy with personal projects, and, if they ask, sharing what I’m working on (telling them about the van)

I read “The Four Hour Workweek” a year or two ago, and one of the key points I took away from that book is to actually apply the Pareto principle with how you’re working – not just to get the most amount of work done within a set amount of time, but to reduce the time you spend working. I already knew all about applying the Pareto principle and prioritizing from my work experience, so now I’ve been applying it in a new way.

If I was going to keep working, I wouldn’t be working like this. I’d likely be working more and doing more. To get fired from my company, you have to perform really poorly, generally for multiple years. So I’ve been trying to do just “ok”. I’ve felt some guilt. I’ve worried that my boss and others will notice I’m not doing as much, and that he might talk to me about it.

Last week I had my yearly performance review with my boss. My personal results were a little harder to measure this year because I spent about half the year training two new members of our team, and I worked at so many different factories that you couldn’t look at the factory results as much as you normally would. When I had the meeting with my boss, he was very happy with my performance. He commended me for how much I got done, and how I’ve improved the way that I do it. My boss told me I’d get a good rating, and that he was thinking about giving me a very good one.

YAAAYYYYY!!!!!

(I did make a noticeable improvement in how I coach at the factories, but the rating he may rank me higher on is relating to how much I accomplished)

My slacker techniques are working quite well. It’s funny that I can “slack off” and only do the important stuff and it works out well for both my employer and myself. In this case it just took a reason and some courage.

I am pretty lucky to have a job without nearly as many meetings or “office time” as most have. My current job has gotten pretty easy over the last year or so. This creates a bit of pull to keep working. But it doesn’t matter how easy the work gets – it can’t compare to the freedom I want.


TL/DR: I’ve been working a lot fewer hours this year than I did before – sort of coasting in my last year or two of work. But I still got pretty good results, and my boss might give me my highest performance rating in years. WOO HOOOOO!


VAN WORK – FOCUS!
I’ve been doing research and design for the electrical system. This means using the computer a lot. Distractions are just a click away! I’ve only been working at something like a 50% focus rate and I’ve been trying to improve this. The problem isn’t really that I’m not getting enough done. I’ll get it done within a reasonable time. The problem is feeling disappointed in myself.

I started meditating a bit but I don’t really think that did much for me or I haven’t ever done it enough for it to do much for me**. I started writing daily goals instead of just working off a longer-term (1-2 week) list, and I think that has helped. I’ve also changed my weightlifting routine so that when I’m home, I lift weights nearly every day. I think that helps. Also, I think I’ve been able to lower my expectations and be happy with a “good” day instead of only “great” ones. I am definitely checking things on the Internet too repetitively (News, Reddit, Instagram, and this forum) and I need to get better about that.

**Except I did have some very good results with meditating while going to sleep back in college.


KMI DIVIDEND CUT
I bought some KMI back in May 2014. This summer, I was very busy with van work. I had money to invest but I didn’t want to do much stock research. So before investigating new companies, I looked at the companies I already owned and considered buying more. These are companies that I decided to buy within the last year, so they would be good candidates to buy more. I bought more CVX, PG, and KMI. I bought the additional KMI in June. Normally when I buy a stock there is a set of 17 numbers I check, and I read about the company. This time, I only checked 5 out of the 17 numbers before buying more KMI. I looked back at those and the PE, which I saw, should have caused me to investigate more. I probably thought it was just high because oil was cheap and it would be ok soon.

Then they had a bunch of trouble and made a big dividend cut in December. My purchase in June ended up being near the peak of their stock price. Tonight I looked back at the June data and checked all 17 numbers. With the full analysis, there were 3 or 4 numbers that would’ve given me pause. If I would’ve followed my own strategy, there’s a good chance I would not have purchased more KMI.

… Lesson learned, don’t shortcut my own investing strategy!


------------------------------------

I'll do a year-end post soon.

C40 wrote:He commended me for how much I got done, and how I’ve improved the way that I do it. My boss told me I’d get a good rating, and that he was thinking about giving me a very good one.

YAAAYYYYY!!!!!

Woohoo! Congrats!

I am definitely checking things on the Internet too repetitively (News, Reddit, Instagram, and this forum) and I need to get better about that.

The stayfocusd plugin for chrome has helped me to avoid this. It blocks websites you specify after an amount of time you specify. I think there are similar phone apps and plugins for other browsers. http://www.makeuseof.com/tag/stay-focus ... tractions/

Are you being affected by the flooding? Is it close to you?

Nope. I live in high ground.

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2015 REVIEW
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This is a pretty good summary of my financial progress:

(the 2015 numbers are the entire year)


OVERALL THOUGHTS

I’m happy with how the year worked out. I started the year expecting a pretty normal year. In terms of work and money I would just wait around while the money piles up. I previously decided that I shouldn’t live in a van while I was still working. The main was I thought I needed to be based out of Saint Louis. I realized/decided that this restriction isn’t really needed, and I got inspired by some traveling myself and by things on the internet like the Without Bound documentary (especially Randy Vining)

So I bought a cargo van and got to work converting it into sort of a small and simple RV. I’m about 70% done with the conversion. I started the conversion with a huge head of steam and worked on it a lot. I’ve slowed down in the last 4-5 months. Some of the slowdown is because I was working on getting my house ready for sale.

As I’m approaching retirement, I’ve started thinking more and more about the actual financial details (investing income, shuffling money around between different account types, health insurance, and taxes.) I have these things figured out well enough for now. The details are too complex to include in this summary. I want to make a post about it soon – both to share with you and also to help clarify and confirm things for myself. I might wait until my van and house work slows down.

At work, my engagement and motivation shifts between “uggghhhh, I am so bored with this!” and “this isn’t so bad. It’s really easy for the money, I can keep going”. Those shifts mainly have to do with how much I am traveling (traveling is better because I’m doing more interesting work) and how much “extra” stuff I have to do. I’ve been good at not getting extra stuff but there is one big thing I have to do in Q1. I already delayed it from last year and I can’t really avoid it now. The people at work don’t bother me. The work itself doesn’t bother me. Basically, I just don’t like spending my time there. That’s really not so bad. If I hated the people and work I’d be thinking really hard about quitting when I get my bonus in the spring.

I’m excited this big life transition that I’m in the middle of. Day-to-day, I have a shit-load of stuff to do so it is just a lot of van and house work right now. I’ve done a pretty good job of telling myself “don’t worry about whatever else, just finish the van and then move on to the next thing”

I’ve also made good progress in relationships this year. I dated a lot at the start of the year. I was mainly looking for a FWB who lived fairly close, wanted to have sex enough, and would want to continue a significant amount of time (not just until they found someone to be their boyfriend). That didn’t work out very well. The women I found were typically either too busy, or lived too far away for my liking, or wanted a boyfriend, or I didn’t enjoy their company enough. After I bought the van, I basically stopped dating. I was dating a little bit, mainly for social interaction. I tried out advertising the attractive parts of my uniqueness and that ended up working well. The girlfriend I’ve had matches up great on many of the big things (kids, desire for adventure, open mind, not spendy, etc.). There are some smaller issues relating to her being an ENFP and me an INTJ - mainly the introversion-extroversion and that she relies on me to initiate most “going out”.




YEARLY GOALS

I changed direction in the middle of the year and updated my goals. These were my original 2015 goals, and the results are in the right column.



When I made these goals, I was planning to buy and build the van later – in 2,017. My plans changed about a third of the way into the year.

I wasn’t working out much at all while I was doing a lot of van work. I did finally have a good run of lifting in the last two months. I’ve been home for nearly two months straight which makes it way easier to lift consistently. I also switched to doing 5x5 with 20% less weight than I could actually do and lifting a more often. I’ve also been eating more protein. It’s working really well.

I did well on my financial goals. I didn’t achieve the original goals because I spent money on the van and a on prepping the house for sale. If I hadn’t done those things, I would’ve achieved the goals for saving and for net worth (barely).



I didn’t make ant progress at all on making new friends. I was social with dating and that went well. I still have the girlfriend that I met back in July and things are still going well with her.

I looked at my goals around September and updated them to match what I’ve been doing most of the year:







Some of my actual net worth increase (after I set the new target) is from adjusting the price of my house upwards. I did this because the estimate in Zillow went up, which I’m assuming is based on local market trends. Now I just check the Zillow estimate each month and reduce 6% for realtor fees. I may not get that much. We’ll see.

I’m getting pretty close to finishing the van. The main thing I have left is installing the electrical system. I have the design work almost complete, and I have most of the parts on hand now. After that, there are just a few small things to finish up.


For 2016, I think I’m going to make goals with shorter timelines, at least for the non-financial stuff. Probably 3-6 months. A year ended up being too long this time. My goals changed. And I forgot about some of them. This year I had a good way of checking my financial progress – with charts added to my tracking file (just below). But I didn’t have a good way to trigger progress checks for the other stuff. I think I’ll try to look at them each month or at least once a quarter to check progress and consider if the goals should change.




INCOME

• TOTAL INCOME: 97,325
  * From work: $86,500
  * Dividends and realized Capital Gains: $8,510
  * Hobby Income: $852

(Had unrealized capital loss of $4,279 from stock price drops)


(This chart doesn’t show as much income because it uses my total capital gains/loss – both realized and unrealized. There were stock price decreases for things I haven’t sold)



SPENDING

This shows all my 2,015 spending except for the van stuff:


TOTAL: $26,169

• * Normal Spending: $13,750
  * Van purchase and building: $11,017
  * House sale preparation: $1,402

VAN SPENDING DETAILS:

• * Purchase: $3,200
  * Tax, Title, Registration, Insurance: $482
  * Repairs and Maintenance: $183
  * Setup – Parts and Materials: $6,805
  * Tools: $310

NORMAL SPENDING DETAILS:

• * Home: $6,319
  * Food: $2,785 (2,424 groceries, 361 eating out)
  * Hobby/Entertainment: $2,400 (This was 3,796 spending minus 1396 sales)
  * Transportation: $1,467
  * Clothes/Hygiene/Other: $732
  * Travel: $48

HOBBY/ENTERTAINMENT SPENDING:

• * Dating/gifts/girlfriend: $714
  * Writing – pens, ink, paper: $490
  * Tea: $476
  * Tattoo: $300
  * SSD Hard Drive: $206
  * Kindle and case: $191
  * Internet Service: $135
  * Bicycling helmet: $94
  * Booze for me: $77
  * Outdoor gear: $30
  * Computer speaker amp: $27
  * Misc. sales (-$46)

I’m happy with the pen spending. I got a lot for that. I actually spent 1,390 and got 890 from selling pens. The tea spending was too high. When I took a lot of things to store in a family member’s basement, I took too much tea, and then I ended up buying a bunch more when it was on sale after Thanksgiving. Once I quit my job, I’ll have additional costs for cell phone/internet. Outdoor gear spending will go up while I’m out living in a van and adventuring.

HOME SPENDING DETAILS

• * Mortgage interest: $2,006
  * Utilities: $1,904
  * Property Tax: $1,436
  * Insurance: $650
  * Household goods: $322

(+Home Improvements to prepare for sale: ~$1,402)

(I don’t count my mortgage principle as spending since I’m going to sell the house soon)







INVESTING

This information is for my post-tax investing.

• * Starting balance: $102k
  * Contributions: $30k
  * Dividends received: $4,800 (4.0%)
  * Realized Capital gains: $3,714 (3.1%)
  * Total income rate: 7.1%
  * Unrealized capital loss: (-$4,279) (stock price fluctuations)

I guess these results look ok to me. I messed up by buying more KWI (described in my December monthly update). But otherwise I’m happy with the stocks I’ve bought so far. Taxes will eat away a chunk of the capital gains.

I’ll have a lot of investing activity in 2,016. I expect to get about $50k from selling my house. If I work all year, that will be ~$35k to invest in post-tax accounts. Once I quit, I’ll move my 401k and pension to an IRA and decide exactly how to invest that. I may just throw most of it into something like VTI or VHDYX for the time being.

I have this chart I’ve used to see my investing performance by year. I’m not totally sure the numbers are right, but they are probably close. This includes my 401k and post-tax investing. Generally my post-tax has done better than the 401k.



What the heck happened in 2,012 and 2,013? I was using the Permanent Portfolio then. I think 2,013 was messed up because I sold out of two components of the portfolio to liquidate money for buying my house. Yikes!


FI PROGRESS

Getting up to FI has been gradual for me and there won’t be a single moment where I change from “not FI” to “FI”. My extra spending this year on the van has made it cloudy. I’ve spent extra in 2015 on what will be my house in the future. For some of my charts and, I don’t count that van spending.

I’d like to have dividends supply all of my spending and not rely on capital gains. But a huge chunk of my net worth is in my 401k where there are limited options.

Right now, I think I want to get up over $500k before I quit. I could get around $20k per year of income from that, which would be on the high end of what I expect to be spending. I may be comfortable quitting before that. My “minimum target” for quitting is $450k with my house sold, which I should have as soon as I sell my house. I’m going to get my house sold and use up all my work vacation, and then I’ll see how I feel.

I will have to answer questions such as:
- Should I work more so I can have a wider range of places I could live
- Should I work more so I could support a wife? (or girlfriend to travel with me?)
- Should I work more to have a safer withdrawal rate?
- Should I work more to have more extra money for cool stuff?

I’m hoping that the possibility of income after quitting (hobbies, entrepreneurial stuff, who knows?) will be strong enough in my head to dismiss all of these.


Net worth:


It appears likely that I’ll pass over $500k this year. If stock prices go down I may still be at $450k at the end of the year, but might actually be better positioned in the long run as I’d have more stocks.

Long-term net worth growth:


My projections from back in 2,012 have been pretty accurate. I started my ERE focus in 2,010 and reduced my spending a lot in 2,011.


Net worth in years. Once I finish the van and sell my house, that red line should shoot back up.



WR Needed: (basically the inverse of the net worth in years chart)


My actual total spending compared to 4% of total net worth:


My “normal” spending compared to 4% of net worth. This is hopefully more telling for future spending projections:


The same thing, but with a rolling spending line instead:



This chart shows my spending compared to where it came from (sort of assuming I used all my investing growth/income as spending). The dotted bar with a green outline in 2014 was not actual spending – that year my investing performance was higher than my total spending, so it was extra money. You can see that over the last three years, my investing growth/income could’ve provided all my spending money. (in this case, it’s just the “normal” spending, van not included)


This chart is similar, but showing it with theoretical income from net worth (4%). The bars are 4% of actual net worth. The dotted line was a projection I made in 2,012. This is useful for forward projections since I expect to get about 4% dividend income and use only that to fund my spending. So, this shows that for the last two years, my spending could’ve been fully funded with 4% dividend income.



This is a closer look at monthly spending vs. actual and potential dividend income. This spending does not include the van.


And one more. The return on this one includes unrealized capital gains. The spending shown is everything.

No pics of the new tat?

jennypenny wrote:No pics of the new tat?

Can't do it, privacy concerns. (I already get uncomfortable about how much I'm sharing here so I need to draw a line somewhere sometimes)

His majesty, the Chart King, has posted.

Looks like you had a great year. Have you decided on your 2016 goals? Also, do you have a target in mind yet for hitting the road? I know you said $500k, but G and I had a test period of a few months without using my income before I quit, and we have a test period planned for right before he quits, too. Are you doing the same thing at all? Like, "I'll give notice X months after hitting $500k" or "I'll quit after Y months of dividends above Z amount."

Enjoying the chart porn as usual

Out of curiosity, what are the 17 numbers you check for stock picks? I'm always looking for more/better techniques to comprehensively evaluate companies.

Holy shit, we need to give you an award for "best friggin charts". I tip my hat to you!

Thank you all for the chart compliments!

@GandK About half of my capital is tied up in my 401k/pension/HSA. I won't have enough post-tax dividend income to fully fund my spending when I quit. I have a plan of how I'll shuffle money around when I quit and I will be making a post on it some day. Here is a simple version:
- Get up over $500k capital. That should be enough for me to get $20,000 yearly income. I'll be getting around $9k per year of dividends in my post-tax account.
- Quit
- Convert 401k, pension, and HSA to a Traditional IRA.
- Start converting around $10k per year from Traditional IRA to Roth IRA (maybe more, optimizing for taxes, health insurance cost, and growth that gets stuck in the Traditional IRA)
- Sell enough stocks in my post-tax account to fund my spending. ( = Spending - $9k - hobby income)
- After 5 years, start pulling up to $10k per year from the Roth IRA for spending.

(I think I can actually start pulling money straight out of the Roth IRA earlier than the 5 years because of earlier contributions. But I don't think it will make much difference whether I sell stocks in there or in my normal post-tax account)

If I remember correctly, I'd pay zero income tax doing it this way.

@StandardStaples: It's nothing fancy. They are a list I made from reading The Single Best Investment

- Debt ratio
- Debt interest coverage
- Earnings growth % of years with good growth
- Earnings growth - last 5 years
- Earnings growth - last 10 years
- Earnings growth - last 20 years
- Sometimes I chart the earnings by year along with the dividends and payout ratio
- Payout ratio
- Credit rating
- Yield
- Dividend growth - 5 years, 10 years, 20 years
- Price / Sales
- Price / Earnings
- Price / Book value
- Cash flow
- Cash on hand
- % insider ownership
- Relative strength chart.

I enter these in a table and give each one a rating user a color scale to visualize good/bad things.

Awesome. Thanks for the reply. I'll put this to good use... now certainly seems like a decent time to do a little shopping.

sexy sexy sexy!

Here' what I'm thinking about for my 2016 goals. Many of them have a timeline of just the first half of the year. I think that may work better as my goals can and often should be changing more frequently than just once per year.

The "before quitting" goals are to get done before whenever it is that I quit. I'm hoping to do so by the end of 2016.

FINANCIAL

• Save $30k by end of June
• Make detailed financial plan (Before quitting)

LAUNCH

• Finish building van (April)
• Sell Car (May)
• Get house ready to sell (June)
• List house for sale (June)
• Set Up S.D. residency (June)

HEALTH & FITNESS

• Squats - 235# 5x5 (July)
• Fat caliper <15mm (July)
• Dentist and work (Before quitting)
• In-depth physical exam. (Before quitting)
• Vasectomy (Before quitting)

Why did you choose South Dakota?