Financial Independence

Just A Small Update

Just wanted to let you people know I’m not dead; I’m just taking a hiatus.

Because I can only dedicate energy to so many things at once, I don’t think it’s fair to expect myself to keep up to date on this blog on a weekly basis.

I’ll be back, but while I’m taking a break from dumping money into my investment accounts and focusing more on the business side of things, I’d rather not bombard people with updates on things unrelated to finance and financial independence.

Until, at least, I’m back into that mode. When that happens, expect some comments and another barrage of posts.

For the time being, I’m also giving myself an out on the blog-related goals. On the other hand, I’m still focused on increasing savings, however slowly.

Thanks for stopping by and hope to catch up with you soon. For now, I’ll be focusing on the business, my family and reading a ton.

P.S. In case anyone is curious, I’ll be keeping my Net Worth (on the right sidebar) up to date. That is all.

Setting Goals for the Rest of the Year

Man, today has been a busy day for side hustles!

I must have spent a good six hours re-making an old site that was just sitting there gathering dust. Well, sort of. Yesterday, I was just casually checking my AdSense stats which have been at an average of about $0.02/day now (up from $0.01! Yay!), when I noticed a single $0.15 click. Upon further investigation, it turned out that it was a site I’d sort of set up and forgotten about. So of course I had to dig in a bit more and it turns out that it’s ranked well for a number of organic search terms.

Naturally, there was only one thing to do — give that puppy a make-over while preserving SEO. And that’s what I did. As soon as work was done, I got to work. Luckily, my wife took the kids out for the night so I’ve been in focus mode the entire time (early retirement light, I guess). She’ll soon return, which is why I feel a bit rushed in writing this but I wanted to get a post out tonight. I hate breaking that chain.

Boy have I digressed from the title.

So today, I read a post from my buddy Adam over at I Want to Retire Soon (IWTRS) where he went over his progress for the year so far. I feel like I’ve been doing a lot of that, but one thing I haven’t really done is set any kind of public goals for me to embarrass myself with (just kidding), so I wanted to take the opportunity to set a few in the same vein as IWTRS. So without further adieu…

Goal 1. Fill Emergency Fund to 100% (Status: Completed)

Okay, I’m kind of cheating on this one but to be fair, it was the only real goal I publicly stated (besides my FI date goal stated in my About page, that is). Also, I killed that goal, so I’m going to give myself that one.

Goal 2. Reach $20,000 in investments for the year (Status: On track)

So far, I have about $12,000 invested (as you know from my many postings on the subject). This goal poses some threat as I have an upcoming dip in salary coming, albeit temporary (side hustles and side businesses — time to step it up).

Goal 3. Write at least 25 posts here per month (Status: Behind)

Last month, I wrote 24 posts. I feel like none of my posts are really super long, nor are they super short, so I feel like that should be a good momentum to maintain. However, I’m going to reach a little higher on this one and call it ‘Behind’ because I’d like to generate more quality content on a constant basis.

Goal 4. Comment on at least 20 posts per week on similar blogs (Status: On track)

I’m totally ripping Adam off here on this one, but I think this is vital to keeping involved and keeping the right mindset. If I’m constantly thinking about financial independence, early retirement, dividend growth investing, index funds, I will be much less likely to fail. I’m calling this one ‘on track’ because I comment on at least 5 blogs every day just because I enjoy it. And Adam, if you find a way to track that metric, please let me know.

Goal 5. Get my feet wet with Dividend Growth Investing (Status: Behind)

I’ve been bothering a lot of people in my attempts at researching this one, and I don’t think that will stop anytime soon. Still, I haven’t achieved it yet and I want to sort of pressure myself into it because I think it will pay off well in the long-run. Hopefully this one is set to “on track” by the beginning of Q4!

Well, that’s it for now. I’ve got stuff to do around the house since I’ve been staring at this stupid screen all day!

Until next time.

Emergency Fund Update – 100%

I don't care if it's cheesy. I'm using it.
I don’t care if it’s cheesy. I’m using it.

I just checked my Emergency Fund and as of today, I have surpassed my goal!!!

You know, I’ve said it before, but I honestly didn’t know if I’d ever reach this goal. It’s the most I’ve ever saved for anything, ever that didn’t involve buying something tangible. In the beginning, it felt the same as trying out a new diet. Every time I’ve done that, there’s this sinking feeling I’ve gotten that I won’t hit my target weight and I imagine that’s the little devil on my shoulder who likes to mock me for past failures.

Today, however, that devil gets the cone of shame. In your face, little mocking demon.

I will personally celebrate this moment tonight, maybe with a nice glass of wine. And what else? Uh-oh. I feel a Warren Buffet quote coming on.

Someone is sitting in the shade today because someone planted a tree a long time ago.

— Warren Buffett

I know that one gets used a lot, but it’s a personal favorite. And so true.

And so ends my first major financial goal, hopefully the first of many. Next comes my incursion into actual investing. As you know, I’ve been deciding on what I should do, given the fact that I’m going to be heading into a lower-paying position for a while. I was planning on getting into taxable investing right up front, but I think the smarter thing to do is to maximize my SEP IRA investing while I can. So in addition to the huge chunk of change I sent over to my E-fund, as I mentioned in a recent post, I also bought up some additional shares of VTSAX during the latest market drop. I’ll probably do this a couple more times before I’m temporarily relegated to a lower paycheck.

On to further adventures!

My Financial Enlightenment

So, I’m not quite sure when it happened. The whole thing is still a little bit hazy, but I know there was a before time and then an after time. The exact point where the skies opened up and I saw the possibility of not working for the rest of my life is somewhere between, but remains a mystery.

The Dark Ages

I remember going to look at a used BMW one day back in 2013. I’d been working as a high-paid consultant for a couple of years without much to show for it in terms of status symbols. Sure, I’d just bought a house a few years before, but the glow had since vanished from that shiny thing, so it was on to the next! Plus, the car I was driving was starting to do some very funny things that the repair shop kept charging me not to fix.

The price on the car was lower than it should have been for a 5-series, so I felt like I should go for it. On the other hand, I had a very specific number in mind so I told the sales guy and he dismissed it saying he had other interested parties. Not wanting to get emotionally suckered by a car salesman, I gave the car salesman my details and walked off the lot.

The next day, I got a call from him and he begrudgingly said he’d agree to my terms. So I went in, paid around $45k in cash (after buying a warranty, final fees and all that good stuff), and drove off the lot in my new toy.

For the record, I still love that car, despite how much it has depreciated.

That was the way things went. Saving a bunch, only to spend it on something new. Sure, we had a small cushion in savings on the side, but it was nothing compared to what I have today. It was just meant to avoid over-drafts on months where our high income was met and nearly wiped out by our high expenses. Did over-drafts happen occasionally? Yes, once or twice a year.

And yes, we never missed payments on our debts and never let our credit card debt ride. But the only investments we had were my high-fee IRA that had no on paying attention to it for years and what was left over from my wife pulling money out of investments to come up with our down payment. In other words — not much.

Certainly not enough to carry us into our twilight years.

And there were times when I’d get into a kick on the topic of personal finance. I’ve mentioned this before, but I used to buy personal finance books. I’d basically read a few chapters, set it down and then forget about it for another year. Rinse, and repeat.

Yeah, not terribly effective. All it did was add another annual expense — the very book that was meant to help me get my finances in order. I’m not sure, but there’s irony in there somewhere I think.

So to sum up where I was during the dark ages, I had a high-paying job, my wife and I bought whatever we felt like buying, we saved a little, invested virtually nothing and were both 30-ish with not much to show for it.

The Turning Point

As I type it out now, that was probably the initial catalyst and driving factor in turning things around. Just thinking about having nothing to show for all the hard work and long hours I was putting in. I was sleeping in hotels four nights a week. I was spending part of my vacations on my computer glued to the phone.

I remember one vacation where I literally did not leave the hotel room the entire two days we were there. I didn’t swim with my kids in the pool. I didn’t eat dinner with my wife. I just ordered room service while staring at a screen. And being a consultant, that’s just part of the life. It’s going to happen to you once in a while and that’s perfectly fine. My family was understanding. At least, as understanding as they could be. But it’s when that kind of life became the norm that I saw things a different way.

That was when the seed was planted. It wasn’t until I started working at the next high paying consultant job where I got to work full time from home — the one I have now — that I actually started doing anything.

And maybe that’s it. Yeah. That’s the actual turning point. Though I probably did more actual work than I’d ever done since I lacked a commute, I was also able to focus on anything that needed focusing on. In retrospect, that’s kind of a no-brainer.

The Enlightenment

When I started working from home, I remember my wife and I sat down and decided we needed a financial planner, and she’d heard something about LearnVest, so we tried that for a while. In the short time leading up to actually establishing an account with them, I had started to participate in r/personalfinance on Reddit. From what I’d learned in the very short time I’d been active there, I basically needed to establish three things before I could start investing (my actual goal through all of this).

First, it was an emergency fund (E-fund), with three to six months of expenses in there; I chose six! Second, I needed to fill my Roth IRA to the maximum every year. Then, and only then, could I start taxable investing.

This isn’t something I came up with, of course. It’s the general advice for many people who frequent those forums, but it was the best advice I’d read in a long time. Better, in fact, than all the cumulative information I’d learned from all the books on personal finance I’d paid money for. And the advice preached in r/personalfinance is free — the best price there is.

So I started on that journey around a year ago. Actually a little more than a year ago according to the first e-mails I received from LearnVest. It was around March. So that puts a number on it. I’ve officially been “enlightened” for over a year now. I did actually pay for LearnVest though, which was sort of a sunk cost because they essentially set me up with the same plan I’d already established, only with more concrete goals (i.e. actually setting up an IRA account and destroying my old one). As it turns out, that was just the bit of fire I needed to get things going. And the fire I’m talking about was paying for LearnVest.

So I accomplished those goals, weened myself off of LearnVest and started focusing solely on Mint to track my financial life. Well, that and a whole bunch of spreadsheets.

Since then, I’ve come a long way. As of this month, I will have completed my six-month E-fund (watch out for an upcoming post!). I’ve significantly reduced my expenses and continue to find ways to do so. I’ve contributed a lot (compared to how much I’ve contributed in the past 30 years of my life, that is) to my IRA and will continue to do that as well.

I’ve also picked up a lot of advice along the way from the community I’ve come to be a part of. There are some amazing people in the circles of personal finance, including those from Reddit, Bogleheads Forums and the general awesome people who take the time to comment every day on my blog and answer my myriad stupid questions.

This blog has been alive for a month now, and it’s gone by so fast. I hope to keep writing like this for a long time coming. I’ve still got so much left to learn. My financial enlightenment, as I put it in this post, is clearly just the beginning.

It’s more of an awakening from years of mindlessly doing what society is comfortable with me doing into a life of mindfully investing my time and money for a better future.

Took Monday Off But Now I’m Back

So, there was no post yesterday, not because I’m lazy but because there was a lot going on. Not that I’m not lazy, but I just wasn’t yesterday. You understand.

As most of you know, I’m going through a rough patch in my life and having to sort of take a step back to examine where I’m headed. That means I had a big decision to make between two job offers, both of which were a cut in terms of pay but one allowed me to keep working from home. Unfortunately, that’s the job that came with the biggest cut.

That being said, I went with it.

Just the facts, ma'am.After comparing each point of both jobs in an Excel spreadsheet and weighing the pros and cons, trying to ignore the ease of just working from home as a factor and paying more attention to the pure facts, the answer became clear.

Clear, that is, assuming I work steadily to create a decent side business. As that’s been my intention for a long time coming anyway, it really made sense and is just the fire I need to get going with it. Even if that means starting small.

And actually, the offer isn’t as bad as it was previously. After some more back-and-forth, I was able to decrease the damage from around 38% down to about 35%. That means I’ll be able to take more advantage of my upcoming 401(k). It also means there’s less of a gap to bridge in terms of side income earnings. The amount isn’t laughable, but every bit I can shave off the distance helps.

Good Listening

In other news, Mad Fientist released his new podcast recently, which I listened to almost immediately. I’m listening to it again right now, in fact. So good. In this episode, he rapped about financial independence, early retirement and geographic arbitrage with Ed Mills from The Millionaire Educator. I don’t know if it was the fact that I was just out of Fientist podcasts for a while or if it was just a particularly interesting episode, but I found this episode the most inspiring by far. Ed Mills apparently started out 40k in the hole after going to grad school, then got to zero net worth at 35.

In other words, he started on his FI journey at 35. It took him a few years after that — I think when he was 37 or 38 — to hit the $100k mark, and then it just kept going up from there. The kicker, though, is that he and his wife did this as teachers.

Did you hear that? Teachers.

So many of us are ahead of the game in this respect. I know a couple of people in our community who are in their early 20s who have hit $100k net worth. To think that someone in their late 30s could hit that number, but then just consistently hit goal after goal is such a great example to the rest of us. One, that someone could do that in such a short time (I think he and his wife achieved FI within 15 years), and two, that he and his wife were on the same page for so long to the point where they achieved what we’re all after. And they did it all as teachers.

Just … wow.

The Library

Don't Touch My CakeAnother thing I’m excited about is learning about my local library’s collection of audio books. For a long while before I cut back on some unnecessary expenses in my life, I was paying $14.95/month or about $180/year for Audible. It’s a great service, but just unnecessary for me. So I put it on pause to make it easier to use up the credits that are just sitting there without accruing more in the meantime. Then I come to find out that my local library has a very similar service and it’s all free!

So now I can have my cake and eat it too.

Oh, and did you know that there’s this other service the library offers? It’s sort of like Netflix but offline. Apparently you can borrow actual books from this place, and as long as you don’t keep them too long, you don’t have to pay anything. I know, I know. I was blown away by it too.

Just keep that between me and you. We don’t want everyone to find out.