<< Back to all Blogs
Login or Create your own free blog
You are viewing: Main Page

A financial Independence day challenge

July 4th, 2019 at 10:16 am

I just did the following exercise for myself, and I challenge you to do the same. Let me know if you did!

1. Check the total balances in your retirement accounts (401ks, 403bs, 457s if you have them, IRAs in all their forms (traditional, Roth, SIMPLE, SEP), and IF you have more than 100,000 in taxable brokerage accounts and bank accounts include that too (leave aside 100k for cash liquidity/emergency).

2. Pull your December 2018 statements on these accounts and look in each statement to find the *interest and dividends* paid for the year Many statements have these, both in the monthly or quarterly statements AND as a Year-to-Date total. Some only give you a monthly or quarterly amount and you have to pull all the statement and add the income up. ALSO, not every bit of "income (interest and dividends) is labeled as such. I have TIAA accounts where the dividends are titled "credits" and you can tell they are dividends because there are a lot of them AND you have both a positive number and a negative number offsetting it on the statement--this means a dividend was received AND the negative means that it was reinvested into the account.

3. From this you can get a very rough ballpark of how much you might expect pre-tax if you were to retire today. TOtal return on investments is split between income (interest and dividends) and capital appreciation (increases in value of the underlying investments), and the split is roughly even. If you figure a 6% real return (above inflation) on investments, take the first figure and multiply it by 3% as an estimate of the capital appreciation you could expect for a year, and then take the second figure and add the numbers up to get the total income.

Also know that while the capital appreciation varies each year and generally will go down one in every five years (about 20% of the time) if you have a 60/40 balanced portfolio (and about one year in four if you were 100% in equities), you will definitely have INCOME (the second number) each year and that number will be more stable.

Hopefully the sum of these two numbers shows a satisfying balance. This is a very rough proxy for your financial independence.

So for me, I have about half a million in investable assets, so if I multiply that by 3%, that's 15k in capital appreciation. Then I figured out the income generated by my portfolio by pulling all the statemets. That was about 30k in income. So that's about 45k a year that my portfolio generates.

However, once you start drawing down the money, that total is eventually going to go down. If you take a look at retirement projections, you acually see balances in retirement accounts continuing to increase for several years because the growth in the portfolio (the amount that you just calculated) exceeds the amount drawn from it. Eventually, however, the draws exceed the net income and appreciation, and the balance begins to decrease. The key is to defer that point as long as possible.

The portfolio is your "goose who lays the golden eggs" and you don't want to kill the goose by taking outsized withdrawals too early!

Kitty is doing better and "vacation" begins

June 28th, 2019 at 05:13 pm

My cat ended up spending a week in the veterinary hospital, and then two more weeks at home with a esophageal feeding tube, which I did use to feed her a few times right after she came home, and then just to administer medications as the meds continued to work. She's not entirely better (and she may never be) but she is significantly improved, and I'm no longer feeling as though her passing is immediately imminent. Both my cats are 14 so I am well aware that I may lose one or both in the next couple of years.

I did add to my debt to get her through the medical crisis but with no regrets--she makes my house a home and makes me laugh and would be a reason to live even if life was otherwise bleak (which it is not).

Life is not bleak but I'm a bit stymied by the fact that I suddenly find myself on vacation with no plans in place. I actually was going to take off starting yesterday, and then all of next week, but I ended up changing to just take all of next week.

I scheduled the long period because I had my six-month follow-up thyroid ultrasound last week and thought that if the nodule had grown, this would allow me a period to take time for surgery. I originally had both an endocrinologist and a surgical oncologist appointment scheduled shortly after the ultrasound, and both doctors ended up moving my appointments into July, but I got the ultrasound results and I know from that the nodule has not grown and is very slightly smaller. The only reason I would have had the surgery is if it had grown or if I were feeling symptoms. Neither thing is true, so I will continue the "watch and wait" strategy. I had intended to also take much better care of my health in terms of improved diet and exercise, and that didn't pan out very well (and still it was smaller). So that is incentive to try again for the improved self-care.

Because I was thinking I might have surgery, I didn't bother making any vacation plans, and because my cat is still not entirely herself, I don't want to leave her overnight.

I DO want to (a) make some significant progress on my Investments course, as I am six weeks behind, and (b) do some more decluttering, and I'll try to find a couple of fun things just so "vacation" isn't all work and no play. I have a friend who is now a "snowbird" and I haven't seen her since last summer and I'll try to get together with her, and we have an LL Bean outlet locally that offers kayaking courses on a local lake, so I'll try to schedule those things plus go see a movie or something. If the cat was better I would go visit a friend who lives in Albany but I'm not ready to leave her overnight yet, so that visit will have to wait. I do have a friend coming to visit me the first weekend in August so I'll just continue decluttering and making my place look nicer for her--and for me, of course. Another friend usually comes out in August and invites me overnight to her riverside cabin, so hopefully in another month I'll feel that I can leave the kitty overnight. She has another panel of blood tests and another followup ultrasound in a month, and hopefully things will continue to improve.

It IS lovely to have her home.

Sick kitty and a blow to the budget

June 14th, 2019 at 03:56 pm

Ten days ago, I noticed that my normally very hungry kitty, Buffy, was just picking at her food. I kept an eye on her for a couple of days since sometimes she has an upset stomach that resolves on its own, but this time, it didn't. I called for an appointment last Thursday and was able to get her in on Friday (since she was picking at her food and didn't otherwise show signs of illness, it didn't seem an emergency). The vet briefly examined her, showed me evidence on the whites of her eyeballs and the inside of her ears that she was jaundiced (which was just a little bit yellowish, not severe enough that I would have picked it up on my own, even if I had known where to look), told me that she was a very sick cat, and recommended hospitalization at one of the local 24 hour veterinary hospitals. I was told that I had 3 choices: hospitalize her and proceed with diagnostic tests, just give her a drug and see if she improved, or euthanize her.

So last Friday, I brought her in, had some initial diagnostics done, had more imaging tests run on Monday which revealed "nothing terrible" (i.e., no cancer), got a diagnosis of "cholangiohepatitis," which is more a description of symptions than an explanation of cause, decided not to have her biopsied at this point but to proceed with steroid treatment, and I finally brought her home yesterday. The steroids helped but started making her diabetic again (she is a diabetic who has been in remission for 4 years), so now she is off the steroids and fingers crossed that the liver improvment continues and the increased blood glucose resolves. One way or another I'll have her blood glucose tested tomorrow (at home if I can manage it and at the vet if I can't), she'll have another blood panel run on Monday, and with any luck the feeding tube that they inserted will be removed. She's lost at least 20% of her body weight but I'm hopeful that her condition can be managed. I'll have a better sense after Monday. In the meantime, I spent about $8,000 on this (some of which I was able to pay with available funds and about 5k currently added to the debt, putting me back financially to about where I was in February.

She's my "heart kitty" and whatever happens it was worth it to me to try and keep her around for another couple of years as long as she can be reasonably healthy.

Not the decision I would make for every pet, but this is my "heart kitty," the one I have been closest to of the four I have owned.

Basement incident and finally a bit of (forced) decluttering

May 27th, 2019 at 11:19 am

I had a little basement snafu this week, which has at least gotten me started on my long-deferred decluttering project.

I forgot to turn off my outside spigot and open up the pipe this year. I didn't burst the pipe right away, but apparently expanded it a little. Then two weeks ago, I had my gardener put in some sod where the borders had gotten very weedy, and he told me to water it twice a day for two weeks, which led to my buying a soaker hose to save myself the time. The extra pressure on the pipes that built up from the soaker hose was enough to burst the pipe, and I didn't discover it right away. Fortunately, I also didn't discover it too late--it was at the point where about half of the basement had about 2" of water.

A neighbor brought over his Shop-Vac and helped me get rid of the standing water. Then I bought I dehumidifer to finish drying it out, plus I had to get rid of about a dozen boxes that had been sitting on the floor. Much of the contents were salvagable, some were not. I've been spending the weekend using this as an impetus to do some decluttering, since I need to call a Dr. Clutter tomorrow. So much extra stuff has built up over the past 2.5 years when I've been at this job and my health has been somewhat sub-optimal (thyroid & adrenal issues) that this round manages to merely get me back to about where I was before I started the job.

I have another vacation period coming up right before & after Independence Day when I hope to make further inroads. I don't expect to get rid of all the excess this year, but perhaps another year or two of spending Memorial Day and Independence Day working on the project will get me back to where I would have been if I'd been getting rid of the excess accumulation all along.

Prior to now in my adult life, I was moving every few years (staying between 1 & 7 years at each residence), but I've now been in my house for 14 years, during which I lost my mother, 3 pets, and changed careers twice and jobs 11 times), so clutter has accumulated like never before in my life. I don't think I'll get to doing Marie Kondo tidying or Swedish death cleaning just yet, but I do think I am at the point of maximum accumulation of "stuff" and I'd like to spend the next few years decluttering in preparation for being able to sell this house.

It's actually by American standards a rather small house (1166 square feet), but it's way too much space for ME, and things have expanded to fill the space. I actually do not use the two biggest rooms in the house (the living room and the master bedroom) very much at all. The living room only gets used when there is company and the master bedroom has become the master storage room. Financially, the home has been a good deal (I now pay about half in mortgage what I would be paying in rent if I were still a renter), but I plan to pay off the house at age 65 (2025) and move sometime between 65 and 70 (after I retire), so even though that is still some years off, I'm thinking more in terms of preparing to sell and move than anything else.

A visit with a fellow blogger

May 12th, 2019 at 04:57 pm

Yesterday, I had a chance to visit with Patient Saver, the fourth time, I believe, we have met in person. We've both been on the site since 2006, and met in person first back in 2011, when a trip to a family wedding took me near where she lives. Last year I drove to visit her. This year, we opted to meet in the middle for a day trip. We live about 3 hours apart, so each of us had a quite reasonable 1.5 hour drive each way.

We met in a small town near where PA, NJ, and NY converge. First we went for a hike to waterfalls that are part of the Delaware Water Gap National Recreation Area. Then we had brunch at an historic 1800s Hotel. We stopped at the visitor center and I bought a brochure for a walking tour of some architectural highlights of the town. Then we did the tour. There was a museum along the way that we had hoped to stop in at, but it was closed despite the sign on the door saying that it opened at 1 pm on Saturdays. We each got our 10,000 steps in! After a stop for ice cream, we parted ways and I got home around 5.

Definitely a nice change of pace after being all but chained to my desk the past month, and we lucked out on having gorgeous weather--it's gray and rainy today, but yesterday was perfect!

Last weekend and this one..and then two after this

April 27th, 2019 at 07:39 am

I did go to that squat workshop last weekend. Useful but my quads hurt for the next 3 days! Good hurt tho, DOMS (delayed onset muscle soreness). I need to work into some kind of routine of doing strength and mobility work, but that is something for after May 10th (which is when my schedule at work will calm down a bit).

I have been successful in walking most mornings of the week since tax season ended, so I'm getting 10k steps or more 4 days a week. That's my beginning fitness level for the year and I will build from there. 2018 was a bad year with only 21 days with 10k+ steps all year according to my Fitbit. I will have that many for the year to date after today, and we're not quite a third of the way through. If I get about 4 per week for the rest of the year, I'll have about 160 10K plus days by year's end. I'm going to target that as a goal.

My walks have been ending most mornings with a talk with a neighbor who lives half a block away. I've known her vaguely for the entire time I've lived in my house. Back when we first met, when I had Henry, her younger son was a toddler who would come out to greet Henry, and she was teaching sociology at the local community college. Now I'm the one who stops to pet *her* dog--a cute 4-month-old yellow Lab puppy named Daisy. The neighbor sits out with her most mornings at around 7, which is when I've been walking. I've learned through our discussions that the neighbor is now too disabled to work because of fibromyalgia. Her younger son, now 14, is living with her ex-husband 80 miles away, and, though she has a roommate to help with expenses, she's fearful about the possibility of losing her house while she waits for the disability claims to actually kick in. The puppy is what prevents her from becoming seriously depressed. She's a decade younger than me, and my talks with her make me very glad that I have a private disability policy as well as one through work.

Last weekend I had two seders I was invited to. I didn't go Friday night because it was rainy, half an hour's drive away, and I was cranky and feeling unsociable. That seder, I heard, lasted over 3 hours so I am glad I didn't go. Not what I needed on a Friday night after a tough week. I did go to a different friend's seder on Saturday, and the folks who hosted that seder were much quicker about going through it (probably because there were four grandkids ages 1-8 in attendance), and I left early in any case.

I finally got going on studying for my current CFP course, but I'm behind. Hoping to make some progress this morning after I finish this entry.

Then the local Food Co-Op is hosting a craft fair and I will go out there for a couple of hours and take a long walk somewhere other than my neighborhood, and go and do my weekly errands and then chores at home.

The servers at the office were bogged down Wednesday through Friday--Wednesday they were pretty much non-functional, and Thursday and Friday response times on any work that required using our online documents were slow as molasses. I have a super-busy week next week, 5 big client meetings and only 2/3 of one meeting prep is done, so I will be in the office most of Sunday, except for my daily walk and a spiritual writing group meeting with women from my congregation.

Next weekend will be another weekend of more of the same: errands, chores, CFP studying, walking, and work, but in two weekends, Patient Saver and I are planning a meet-up. We've met 3 times before--first back in 2011 when a trip to a family wedding took me past her town, then in 2015 when we met for a night at a bed & breakfast part-way in between, last year, when I spent a night at her house. This year, we're meeting part-way in between again, but won't stay overnight since we both have senior kitties to go home to tend to. We live about 3 hours apart so a 90-minute drive for each of us brings us to a quaint town on the PA-NY border, which we will spend the day exploring. That will be my first real adventure of the summer!

On financial matters: my retirement account hit an all-time high with the day's close yesterday; currently 8.8% up from year-end, and nearly 100k higher a balance compared with 12/31/16. My spending credit cards are currently up since I did a little bit of clothes shopping plus the usual, but by the time both the 4/30 and 5/15 paychecks have hit, my total debt should be down 1k from 3/31. Chipping away bit by bit.

Day off & A couple of financial moves

April 19th, 2019 at 05:00 pm

It's a holiday but I'm not feeling very celebratory. Not bad, just tired and burnt out. I was supposed to be at a Passover seder tonight but I didn't go--it's rainy and I'm just a wee bit grumpy and needing some time to myself. There's another seder tomorrow night (different group, though).

I spent the day puttering. It was a work holiday since the markets are closed. I went over this morning to the university campus (where I once taught), and found that the building that I used to teach in is being renovated and the whole thing is fenced and boarded off. I went to the library instead and spent some time reading, then went to my current office and puttered online.

I made a couple of financial moves online while I was puttering. In my last "Day off" post, I mentioned the new bank account I opened at a reputable local bank. The $50 bonus has been received, and I set up automatic $50 deposits from my current main bank to the new bank for purposes of growing an emergency fund. A lack of "liquid funds" has been a problem because I've either been saving or paying off debt with my discretionary funds (I'm now up to 15% per pay to my 401k).

I also have my eye on my two 0% balance transfer credit cards. Both of the 0% balance transfers are over in September. For the smaller one, I'm moving it over to another 0% balance transfer, and I applied to increase the credit line on that card--not because I have any intent of using the additional credit, but because one factor in your credit rating is keeping the balances on your credit cards at 30% of the credit limit. I want to transfer $4,500 from one card to the other, so I had to increase my credit limit on the card where I am moving it to from 10k to 15k (since 30% of 15k is $4,500).

Tomorrow I am going to a "squat workshop" at the Physical Therapy center where I have gone to for PT 3 times now (most recently in January & February for a shoulder issue). I'm working my way up to getting back into the gym--I've set a new goal for myself to get out of the house and take a walk within 30 minutes of waking up, and I managed that five mornings during the past week. Then I hope to get some studying done for the next CFP class--I've been having problems getting going studying again what with the busyness of the end of tax season.

Last night was a fundraiser for the public library. Since I'm on the finance committee, I felt that I should attend, so I did and paid for a friend to go along too, so I'd be sure to know someone there. It was a good chance to do some networking (which I did), but probably is why I'm in a bit of an anti-social mood today. This introvert can be out there only so much.

Day off

April 11th, 2019 at 03:24 pm

I have been pushing very hard non-stop for the past few weeks (other than taking last weekend off and spending much of it in bed because I felt like I was coming down with a cold; fortunately the extra rest has seemed to forestall that illness, knock on wood!). So today and tomorrow, with both of the major lead advisors that I report to out of town, I decided to take some personal time off.

I was working until 10 pm last night finishing a tax estimate that one advisor had promised to a client, and with that behind me, I was able to take off with a free conscience.

First on the docket was an annual doctor's exam. I hadn't known when I scheduled it a year ago that I would be taking the day off, but that worked out nicely.

Then I went out to breakfast and then over to the local mall to do a little bit of clothes shopping because I have been feeling the need for a bit of a wardrobe update. Picked up 3 pieces priced at over $300 for about $195 that will be good office wear.

Then I went to one of our local banks. I had received a postcard from them promising a bonus $50 for establishing a new checking account with at least $1,000 that stays in the account for at least a week. This particular local bank has an excellent reputation for service and a commitment to stay local, so I've been meaning to establish a relationship with them for a while. Checking is free for life with no monthly maintenance fees and their rates are competitive. At the moment, all of my other banking relationships are with Wells Fargo, whose reputation I have been dissatisfied with (although personally, things have been fine). What I would like to do once my schedule calms down is to transfer my main relationships over to this bank--set up direct deposit for the paycheck, establish a savings account as well, and then move the mortgage and HELOC (balance $0) and safety deposit box over as well. They have a long-running special that does a refinance with closing costs of $525. They promise not to sell your mortgage. My current mortgage is a 20-year (in year 9) at 4% and I could refinance to a 10-year (cuts one year off) at 3.625%. I will probably do that in another month or so. The only pain will be that they don't handle the escrowing of the tax and homeowner's insurance bills, which I'll have to handle myself anyways after to mortgage is paid off. (I'm still feeling good that it will be paid off by December 2025 at the 20-year mark.) I'll probably keep at least one small checking and savings account open at Wells Fargo as well, just because Wells Fargo has a branch just down the block from where I work and they also have lots of branches in Los Angeles, where I am from and where I still visit occasionally.

Those few things were the main accomplishments of the day. I also handled a couple of emails at work and listened to an online professional educational webinar for an hour.

Tomorrow I need to make a dentist appointment because I broke a small piece off a tooth last night--it's not painful but the sharp edges are annoying. Then I need to finish my own taxes--I drafted them back in February in order to figure out my IRA contribution, but now I need to dot all the i's and cross all the t's and submit.

Then I'll work on getting a bit more organized at home--there are too many piles of paper on the dining room table, on the desk, on the coffee table, and on the dog crate, and I need to toss some and file the rest. Being able to see the tabletops will make me feel more relaxed here at home and I'll buy some flowers to put in a vase on the dining room table when it is clear again (which it has not been since Thanksgiving).

I'll also be working on my next CFP class over the weekend and I'd like to take a drive out to a coffee shop I like that sits on the banks of the Delaware. I visited there at least monthly over the summer but haven't been back since September. This is just a weekend to catch my breath and recapture some sense of spaciousness or margin in my life than a weekend where I will really "do" anything. Just getting a chance to spend some more time reading will be a pleasure.

I'm supposed to be attending an orchestra rehearsal in an hour. I should go since I have slacked off during tax season but part of me wants no more commitments today. Whether or not I go, I'll end the day by watching one or two episodes of "Boston Legal." I was delighted to find that it is once again free to wach on Amazon Prime, after having been available only with a charge previously. This was one of my favorite series so I am enjoying re-watching it. I like James Spader and it is nice to see him in his prime. He seems to have aged a lot lately. He's about my age so seeing recent pictures of him makes me feel my own age more acutely. I'd like to think I am aging better than he is! But then, so much of our first impression of faces is about the hair and he has gone semi-bald recently. This is one reason I find it worthwhile to pay to have my hair colored! I grew up believing in substance over form and that image didn't matter so much, but while I still believe strongly in substance, the real world and my education taught me that appearances matter a lot, too!