Despite some unusual expenses, we stayed well below our monthly budget in November. What are some of these expenses, you say?
Trip to Mesa Verde
Veteran’s day weekend, November 11-12, were free national park days. We decided to take a jaunt down to Cortez, CO to visit Mesa Verde National Park. I hadn’t been there since I was a child and I wanted to take Little Miss TJL since we have previously visited Bandelier and Mogollon cave dwellings in New Mexico.
We have an anthropology professor friend who lives near Mesa Verde, so we were able to simultaneously spend time with a close friend and get the inside scoop on the park.
Three years ago, we started an action plan to retire in early 2021. Today we are nearly 60% to our goal. Over the next two years we aim to save an additional $175,000, invested in low-cost index funds (we use Vanguard). The final year of work (2020) we will continue to max out our tax-deferred accounts, will build a cash buffer and pay off the mortgage on our rental property. The cash flow from this property will supplement our early retirement.
There are only a few steps to achieve financial independence quickly:
- Decrease spending to less than 50% of your net income
- Invest the remainder in low cost index funds
- Project retirement spending and when your investment income reaches 25-33x the expected expenses, retire.
As part of our pre-FIRE preparation, we are attempting to find the base level for our annual spending. Ideally, this amount should be $36,000. To date we have not reached this goal. With a little financial planning, we should get close. Here is our financial plan for 2018.
Two years ago when metal prices tanked, my company cut all raises to 0%, and last year we received a meager 2% raise. As a result, incomes have fallen behind market value. I knew this but I am too lazy to find another job.
Because of this unintended
apathy loyalty, recently my corporation gave a 5% salary increase to all employees who have worked continuously for two years. All other employees receive a generous but lower increase.
Their message is that they value their employees and will share the wealth when times are good. Of course, this is really an attempt to be more competitive in the job market and hire talent, but I’ll take that 5% and gladly!
Even more encouraging, this raise is not in lieu of our regular merit increases in March. Unless something goes terribly wrong in the next six months (knock on wood), we should expect those too.
Holy shit! We just surpassed $800,000 in net worth! We are well past our year end projections of $784,000.
I wish I knew what hashtags were; this might be hashtag worthy.
As you can see, our investments have seen steady growth in 2017, primarily due to a strong market and a high savings rate. We will continue to invest over the next two months but I would also like to build my cash reserve a little.
In October, Mr. TJL broke a tooth and needed a crown; a major dental expense. How expensive, you ask? $1290! Luckily, our insurance covers 50%, but we are on the hook for $645.
As a result, we have exceeded our annual budget for out-of-pocket medical expenses, which I had originally set at $500.
The good news is that we will be reimbursed for $265 worth of blood work I had done earlier this year.
In short, I made many phone calls to my insurance company trying to persuade them that the blood work was preventative and should be covered 100%. Ultimately, they disagreed and I paid the bill. Oddly, this month they spontaneously decided to cover the expense. I literally, have no idea why except that maybe I was right in the first place. Why is this shit so hard to figure out and why the six-month lag time?
I expected Jeffrey Tambor’s memoir, “Are you anybody?” to be a funny read but instead it proved to be reflective and thought provoking.
He recalls teaching an acting class in which one talented student, a girl, was just killing it but would falter with the more intimate scenes. After class, he asked the question, “What’s holding you back? The answer was simply her story. As she was pursuing her Hollywood dreams, her father would call every night and ask, “Are you still my good girl”? This made acting out sexually explicit scenes, well, awkward.
The average time it takes to become a self-made millionaire is 32 years . By the time I retire in 2021 with a net worth of over 1 million dollars, I will have put in 16 years at my current job, half the time.
Since the beginning of the year, our investments have earned over $50,000 (earned not contributed)! That is a whole separate salary!
The earnings are due to a strong market but, I insist on taking the time to revel in it.
Pop open the champagne and celebrate for a second! Yell from the rooftops! Part-tay! Not all years are like this.
We also surpassed our year-end net worth projections of $784,000. We now sit at a healthy $788,200 with three months of contributions to go! If the market holds, we could reach $800,000 by year’s end.
September was a birthday month for Mr. TJL. He is a grand 43! To celebrate we went bowling with some close friends.
His driver’s license expired; he renewed online. We thought this would be relatively easy and way better than our local DMV (which has the typical horrendous woman and is never open except at the most inconvenient times). However, three weeks later, he still doesn’t have a new license.
Anyone else renewed their license online? How long should it take? I guess we will making a phone call soon.
Posted in The Ledger
Who doesn’t like a good waffle?
I tend to waffle back and forth on how much we actually require for FIRE. Save too much and I risk working too long. Save too little and I end up scrambling for work late in life for a lower-wage job.
By knowing our retirement income sources and expenses, I see what we need for our “enough”.