Well, that’s progress…..

As some of your recall, I have been working back through some health issues in 2018, and only recently got back to the level of lifting that I was at prior to those issues (huzzah!).

Well, this week I was able to finally jump to the next level on my lifting, going up in all of my exercises and increasing my weight lifted overall by about 10%! I’m now lifting more than I was when I started tracking this over 5 years ago, which is a tremendous boost for me, certainly a cause for celebration.

Health has been on the minds of many bloggers over the years, as everyone sees the benefits of FI (reduced stress, time to do the things we need to in order to improve our fitness, etc.). I typically read 1-2 posts a week from FI people that has some sort of “health focus” in it.

For Mrs. 39 Months and I, we try to eat a lower-carb diet, get plenty of vegetables and some fruit, and eat a decent amount of protein. I work out almost every day (lifting, biking, swimming) in an attempt to stay as healthy as possible. Mrs. 39 Months has some hip/leg issues (she’s had them since she was a kid) which preclude her from running, and make long-distance bike riding an issue. Still, we try and get out an move around as we move through our 50s and head towards our 60s.

It’s a good life, especially as we approach FI and can take even more time to concentrate on our health and on being together. Hopefully, you are taking care of yourself as well.

Mr. 39 Months

Interesting article on if $1M is enough to retire on…

Gobankingrates had an interesting article on whether $1M was enough to retire on, based on the benefits/dangers of Geo-arbitrage in the US. The author has information on the estimated annual expenses that a retiree would pay, by state.

Obviously there are some issues with the analysis:

  • The author just takes the $1M figure and divides by the annual average to get the number of years it would last. Does not deal with investments, 4% rule, or any other way to leverage the $1M. It just assumes you stick the money in something that matches inflation.
  • A “state” average needs to be even further broken down. The difference in each state between its major cities, its towns, and its countryside are radically different. Think New York City vs. Upstate New York (where you can get a house in some places for $50K).
  • Other factors that might be of interest to a person (outdoor sports, theater & symphony, great restaurants, etc.) aren’t really factored as well.

Well, it’s a simplistic article, but it does show a major point. Folks can really alter their FI timeline if they consider geo-arbitrage (moving to a lower cost area) as one of their strategies. Mrs. 39 Months and I are constantly “battling” over where we want to eventually move to, and when.

Something for everyone to consider

Mr. 39 Months

Why do Financial Advisors discredit the FIRE Movement?

By now, many of you have heard about the Susie Orman interview by , where she denigrates the FIRE movement, and claims that you need $5M to $10M in order to even think of retiring.  While she has walked back some of those comments since the interview, she still appears to believe the FIRE movement is not ready for prime time.

She isn’t alone. Major finance sites like Barrons, Investment News and Market Watch have all published articles lately casting “shade” on t he FIRE movement. Heck, even Broke Millennial has issues with the movement. Yet all of their arguments appear to follow the same pattern – them emphasize the “RE” and not the “FI” portion of the argument. From my readings of the FIRE blogs, the “FI” portion is really what motivates folks and gets them moving.

Typically, the only folks I see in the movement working on the retirement portion of this are folks, like me, who are in our late 40s/50s and who have been able to check out a little early. Almost all the folks in the 20s, 30s and 40s of the FIRE movement are writing about what they are doing now that they’ve hit FI – and they aren’t standing still. Most have taken their side hustles and made them the focal point, and others have chosen other career paths that they enjoy. Some have taken foreign travel, and after a period of time, they’ve settled down to other work.

In reading through all the criticisms, it seems the key point these people make is that folks don’t know what the future holds, and so they shouldn’t just “check out” and assume everything will be OK. Health issues, the economy, global war, etc. – all these could impact the future over the next 40+ years.  FIRE folks should continue to work & save “just in case.”

These critics are missing the point. As Joseph Dominguez and Vicki Robin discussed in their epic book (and FIRE bible) Your Money or Your life,  it really is about how much life energy are you willing to expend to acquire something. FIRE folks have made conscious decisions about what matters, and what matters to them is Freedom. Since this is different for everyone, you don’t necessarily need $5M to achieve that Freedom, and you don’t have to stop working at age 35 when you hit FI.

So when you hear folks “Poo Pooing” the FIRE movement, just stop listening – because they just don’t understand (or are unwilling to understand). If folks go into this with full awareness, take control and make conscious decisions on what matters to them, then other folks opinions just don’t matter.

FIRE on folks!

Mr. 39 Months

The benefits of “Stay the Course”

Checked out the S&P 500 this morning. It’s a typical bellwether on how markets are doing, and many people have their investments tied to it, via an S&P500 Index fund. So it is a good judge of how I’m doing with my investments.

As you remember from numerous postings, I have not really let 2018’s market downturns affect my investing strategy. The idea was always to “stick  to the plan” and continue to invest via dollar cost averaging. This has been shown in numerous studies to be the most effective investment strategy.

Well, in checking the S&P 500, what did I find? In Feb 2018, the S&P 500 was as $2,619.55. One year later, the same index is at 2,728.40. Yup, up 4.15% over the last 12 months. Thus, the S&P500 finally dug itself out of the hole it dropped into early last year. By staying the course (and buying a lot of investments “on the cheap” back in 2018) I was able to recover. This also doesn’t take into account the dividends that my investments paid over this same time.

Other posts are dealing with market declines

Mr. 39 Months

OK, you really need to go see this movie…

Its called “They shall not grow old” and it was created by Peter Jackson (Lord of the Rings, The Hobbit, etc.) and the British War Museum to mark the end of World War I.

World War I really was the turning point of the modern world. What Peter Jackson did was take the footage from the British Museum (the old, grainy black & white, silent movies) and digitize it/clean it up so it can be viewed today. He then colorized it and added sound effects/voices so that it is just as good as movies made today.

All the voices are from actual WWI veterans, recordings the BBC had from years ago.

Its a monumental task, and it makes a gripping movie. At the end, Peter Jackson spends about 25 minutes going through all the technology that was used to make it happen – and a great & funny story about how the closing song for the credits was made.

All the reviews are 5 stars on Rotten Tomatoes, and I can’t recommend it enough. It had a short run (one weekend) back in December, but it is back in the US for another short run. Go see it!

W

Investment update for Jan 2019

Yeah, baby! Just 17 Months to go till FI! Markets are up, my investments are up, and my financial situation looks a lot better than it did at Christmas. I believed the economy was doing well, and the only thing holding the markets back was issues with the Fed (see my post from December).

Well, it appears the “fear of the Fed” has ebbed somewhat, and the good economic results (for many companies, record profits) have helped to push stock prices up. The market is up over 10% from Christmas, and continues to push upwards. If you panicked and fled the market at Christmas, you lost out big time! I’m hoping we have a good year in 2019.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

Remember that I rebalanced at the start of the year, selling off mostly bonds and some REITs, and pumping the money into the losers for 20118, which was small cap and International. For the month of January, I’m up about 7%. The big winners have been small caps, REITs and the S&P500, while International was only coming in around +5% overall, and bonds only up 1%. So my rebalancing paid off going into small caps, but not as much as going into International. For the most part though, I sold winners and bought losers, which turned into winners in January. Very pleasing!

  • S&P500: +8.1%
  • Small Cap: -+11.4%
  • International: +5.1%
  • Bonds: +1.0%
  • REITs: +11.7%

My 401K/Deferred account at work is up a similar amount

Dividend Income Account: Allocation:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

This is up about 7.7%, driven more by the REITs, though everyone was a winner. My bond funds were up around 6% (counting dividends), my stocks around 5.6%, and the REITs ranged from 9% to 18.5% (averaged around 13.4%).  Very good for dividend portfolio.

Value Investing Account: If you remember, I have to take money out every year from my Dividend income account (it’s a rollover IRA from my father) so I took the dividends for the last 3 months, and sold off about $3600 in bonds (my “winders” in 2018) to get to $5K. I then took that and folded it straight into my Value investing account. I used that to try and balance the two mutual funds to 50% each.

Allocation now:

  • 50.5% USAA Market Index (my brokerage is USAA)
  • 49.5% in Vanguard Value Index fund

Both of these were up in January, and if you add into the dividends paid out in Jan, they are up 10.5% for the month!

Starting off for the year, I’m up 7.09%. What is interesting is that, with the gains in price, my portfolio returned $69,198.98 for January. One month, and $69K of capital gains & dividends! Nice return. That is close to the FI number we are budgeting for our lifestyle ($72K/year). One more month of this sort of thing, and we’ll be close to the high of 2018. Let’s hope!

How did you do in January?

Mr. 39 Months

I’m back baby!

Well last week was a real cause for celebration for me. As a lot of you know, I went through some health issues with kidney stones (medicine, catheter, operation, etc.) in late summer/fall. While everything worked out OK (so far) it put a crimp in my fitness training. I wasn’t really able to do much of anything (lifting, biking, swimming, etc.) and the result was degradation in my fitness level.

Well, starting in Nov/Dec, I was able to get back to the gym/home fitness area, and got started building back up. I had fallen out of the “habit” of doing morning fitness, so it took me a while get back into the swing of things, but by late December I was “in the groove” and starting to work my way back up.

Well, last week I finally reached the lifting level of where I was before all the health issues hit, and I am getting ready this week to push beyond that. In addition, I’m continuing to swim, bike and walk (can’t run due to knee injury) and I’m planning to push that as well.

Like most folks, health is a big factor in our plans for FI and both Mrs. 39 Months and I want to do a lot even as we age. I urge all of you to keep fitness as one of the forefront items in your life. It’s a lot easier to maintain fitness than to try to get back to a level you used to be at.

Mr. 39 Months

Goals/Objectives for 2019

I’ve done the goal setting posts before and gone over my 2017 and 2018 goals in previous posts. For 2018 it was a mix, but overall I believe I made real progress on a number of financial and non-financial goals. I learned a lot last year, most especially that the non-financial goals were actually the ones that became the most important to me. I guess as the FIRE gets you, you end up with a lot of the finances on auto-pilot, and then you really start to concentrate on what really matters.

For 2019, I kept my finance and business goals fairly similar (just bumping up some of the numbers) and kept many similar personal goals (just added a few). Since I’m under 18 months till I hit my FI date, I need to keep the process moving and keep improving, so that I’ll be ready when I hit the magic number!

Finance:

  • Save $75K in tax-advantaged accounts (saved almost $81K in 2018). 401K, Roth IRA, etc. Dropped this down a bit, due to a need to plus up my savings/emergency fund. Key part of this is using my company’s deferred savings account to push money out till I hit FI. Since the deferred account money will have to be withdrawn (and taxed) when I leave, it actually is a pretty cool FIRE solution for saving.
  • Save $5K in regular accounts (compared to $9K in 2017). This will go into my brokerage account. I withdrew a hunk of this to do my ROTH rollover (part of the “power of zero” philosophy). But I still have some bucks here. I have to take about $5K from my father’s IRA every year, so I just move it from there to my brokerage account instead f spending it).
  • Increase dividend income from all accounts to $27K/year (compared to 26K in 2018).
  • Passive income covers 40% of base living expenses in retirement (it was38% in 2018). My long-term goal is to get my dividend/passive income up to where it covers over 100% of my expected retirement living expenses, so my investments can continue to grow.
  • Beat net worth growth rate of 6% (it was -1.9% in 2018). This is my historical growth rate for the last 10+ years, so I want to beat my average.

Business:

  • Continue attending regular meetings of my local real estate investors association. They hold a regular monthly meeting, a monthly meeting for new investors, and a monthly meeting for my specific county. All three could be interesting, and it’s free for a paid member. Last year I attended, but it was spotty.
  • Double the number of blog visitors in 2019. Last year it was a little over 6,000. I want to get at least 12,000 this year, so I need to put myself out there more (i.e. comment) and write interesting topics. My thanks to everyone who stopped by, and I try to return the favor, and comment as well.
  • Write/publish a book on finance.  I wrote one for new graduates in 2017, but I have identified an area of the community which hasn’t been served as well in the past. Hopefully I can assist with something here.  I’ve got the first five chapters outlined/partially done, but still have a ways togo.

Personal:

  • Increase weight lifted by 10% from 2018. Due to my illness, I didn’t make much progress beyond that, but I’m back to full strength now, and lifting what I was in September 2018.  I want to continue to improve my strength as I get older, instead of just wasting away
  • Average 2 hours of cardio per week (currently averaging about an hour). Again, want to improve my fitness. Based on my lifestyle, I don’t think I can push it past 2 hours per week
  • Take part in at least one long bike ride, like MS bike-a-thon (80 miles). Didn’t do this last year, but really want to try.
  • Backpack over 100 miles on AT (did around 80 miles in 2018). Other aspects of life interfered with my ability to get on the trail. Really want to push it this year.
  • Continue volunteering at Pennsbury Manor at their joiner’s shop (woodworking). Really enjoyed this.
  • Reduce weight by 20 lbs. from Jan 2019 (lost 2 lbs. in 2018). Again, I want to get in better shape as I get closer to financial independence
  • Read at least one book a month. I surpassed this goal in 2018, and re-learned the joy of reading.

Travel:

  • Visit a national park (visited two in 2018)
  • Visit family in Tennessee, Vermont and New York. Family is very important to me. One of the things I am looking forward to with financial independence is the opportunity to visit family more often. Need to get up to see my brother in Vermont.
  • Take a week at the shore and just relax. Too many of our vacations are spent running around. I want to see if I can go somewhere (in this case the beach) and just sit and relax.
  • Visit Ellis Island. Wanted to do this in 2018, but didn’t make it. As 50% Czech from immigrant great grandparents from the turn of the century, I believe they went through there, and I want to see it
  • Go on an international trip. Not sure which one (Canada, Caribbean, etc.) but I’d like to get out this year.
  • Visit the Asheville NC area. It’s one of the areas that we are considering retiring to (close to my old home in Tennessee, interesting crafts, shops & outdoor sports, etc.). Trying to learn more about the area (we’ve been there a couple of times).

So those are my somewhat ambitious goals for 2019. I am going to do my best to hit them, so wish me luck.

What are your goals for 2019?

Other Bloggers on their 2019 Goals

Mr. 39 Months

Its January, time to re-balance the portfolio! Yeah!

Boy, do I have a boring life. ….

African elephant female and her baby elephant balancing on a blue balls.

Actually, since I enjoy the financial side of life, and like doing math, I do get some happiness from this. For those unclear on the concept, rebalancing is where you look at your current investments and compare them to the asset allocation (the split of where you have invested your money) and see if they are significantly different. If they are, then you sell some assets and buy others in order to bring them back into alignment with your goals.  You will be “selling high and buying low” which is the goal when investing.

Typically, you do this annually, or semi-annually (like I do every Jan and July). If you did it more frequently, you’d drive yourself nuts, and not gain much in the process. I usually look at my allocation, and see if something is more than 2% off from it is supposed to be (i.e. if my allocation is 17.5%, and its 18.3%, I tend to leave it, but if its 20.%, I’d sell part of it and buy something else).  If you remember my previous posts on this from Jan 2018 and July 2018, there is a specific process I go through.

With this year, the regular stocks and international stocks have really suffered in comparison to the bonds (and somewhat to my REITS). My standard allocation is:

  • 30% Index Bond funds
  • 17.5% S&P 500 Index
  • 17.5% Small cap Index
  • 17.5% International stocks index
  • 17.5% REITs index

This month I’ve found myself selling bonds (and some REITS) and buying stocks, especially international stock funds (which got hammered in 2018). Fortunately, the companies that we use (Vanguard, TRowePrice, etc.) make it relatively easy to do this, so I was able to do my calculations, and then make the moves on the computer for everything within 30 minutes. Again, as a finance geek, I enjoyed the process.

Lately I’ve been considering changing my allocation somewhat, to 20% for S&P500 and small cap, and 15% for REITs and International. We’ll see in February if I act on this.

Hopefully you are considering rebalancing, so you can “buy low and sell high” yourselves.

Have a great 2019!

Mr. 30 Months