Taking time to smell the roses (or get some of your non-financial goals accomplished)

One thing every FIRE person needs to guard against is getting so tied up in the financial side of FI, that they neglect other aspects of their life that are equally or even more important (can anyone say “family” here?).  One should never neglect their other goals in life just for financial gains – or you might end up at the end regretting a life of emptiness.

That is why your goal setting for the year should include a healthy set of non-financial goals, and you should strive mightily in order to meet them. For me, my non-financial goals are:

Personal:

  • Increase weight lifted by 10% from 2018 (increased by 12.7% in 2017). I want to continue to improve my strength as I get older, instead of just wasting away
  • Average 3 hours of cardio per week (currently averaging about an hour). Again, want to improve my fitness
  • Take part in at least one long bike ride, like MS bike-a-thon (80 miles)
  • Backpack over 100 miles on AT (did over 100 in 2017)
  • Begin volunteering at Pennsbury Manor at their joiner’s shop (woodworking)
  • Reduce weight by 20 lbs. from Jan 2018 (lost 9 lbs. in 2017). Again, I want to get in better shape as I get closer to financial independence
  • Read at least one book a month. Trying to learn new things and keep my mind shop. Started this in August 2017, and I’ve been doing fairly well with it.

Travel:

  • Visit a national park (visited Shenandoah NP in 2017)
  • 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
  • Visit Portland, OR and northern California. Mrs. 39 Months has a craft class she wants to take in Portland, so I’ll go as well, and run around in Portland, when it’s over, we want to visit the Park in Northern California with the Redwoods.
  • Visit Ellis Island. Wanted to do this in 2017, 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).

For the year, I have worked as diligently on these as on my financial goals (well…. Maybe not the weight loss as much). Still, I have knocked a lot of them off/made progress.

This week, I had the opportunity to visit two National Parks, which helped me check off a travel goal for 2018 – and gave Mrs. 39 Months and me a lot of pleasure.

We visited the Redwoods National Park in Northern California. Mrs. 39 Months has always wanted to see these big trees, and they didn’t disappoint. It was great hiking around and just taking in the grandeur of it all.

We also visited Glacier Lake National Park, in Southeast Oregon. It was formed when a volcano exploded about 7700 years ago, and then collapsed in on itself and the caldera. The result is a beautiful lake at 8800 ft. altitude, which is just fed by rainwater. Nothing drains out, nothing drains in, and so it has some of the most pure water in the world. You typically can see 140 – 180 ft. down into it, and it is also about 1900 ft. deep.

When we visited, there was still snow on the ground and blocking the road which goes around. We took pictures in freezing rain, and then headed out. Still a lot of fun.

What non-financial goals do you have this year, and what have you gotten done so far?

 

Mr. 39 Months

Status Update, May 2018

Well, another month, another period of not much progress. Again, I didn’t lose but didn’t gain much either. Looks like last years big “bump” is going to be offset by a flat year in 2018? We will see, still got 2/3 of the year to go. Thanks to putting all my bonus money into my investments, I’m back to being over $1M in assets, so that is a plus.

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

I ended up being about 0.3% up here, after my monthly inputs into the various accounts. My bond index funds dropped a bit, but my international and REITs were up, bringing me to a +0.3% for the month. For the year, I’m a little up, while the market in total is a little below Jan 1. Another reason for asset allocation. Note that these returns include reinvesting dividends.

My 401K/Deferred account at work was up only 1.1% for April – but this one doesn’t have a REIT option in its choices, so I didn’t get the benefit of the REITs for April (but didn’t suffer from this in this account for 2017).

Dividend Income Account: Allocation:

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

Up about 0.2% including dividend payments.  Bonds (50% of allocation) got hit, but my 25% REITs helped to lift me into the positive. Most of the dividend stocks (Chevron, Verizon) were up significantly, which helped.

Value Investing Account: Allocation (remember I refocused this at the beginning of February):

  • 40% in individual value stocks I picked myself (2 each, 20% for each) – SBS and GILD
  • 20% USAA Market Index (my brokerage is USAA)
  • 40% in Vanguard Value Index fund

Another bad performance for the stocks that I picked myself. Down 2.5% for the month of April. The big losers were my two stock picks. It is becoming very clear that I am not a good stock picker (as most folks in the FIRE community can attest to). If I don’t see a major turn around in fortunes by the end of the year, I’ll just sell my stock picks and go to index mutual fund investing (like so many other folks). Again, this is more of a “fun money” account where I experiment.

The allocations are not too much “out of whack” so I don’t intend to rebalance until July (unless something major happens).

 

How did you do in April?

 

Mr. 39 Months

Update to draw down plan – May 2018

Okay, as I get more information, I continually have to look at adjusting my draw down plan – even as I hit 26 months to go. If you remember from my previous draw down update, the desire of Mrs. 39 Months to continue working, combined with the $64K limit to income for maintaining health subsidies had put me in a bit of a quandary. How do I match my spending to the need for health care? Spend too much, and I end up needing an additional $12K a year.

Well, I got a bid of a surprise with one of my company retirement accounts a week ago, which meant that I would be paying a large lump sum when I left the company (instead of being able to draw it out over time). However, this meant that the remaining funds were “post tax” and thus could be used without endangering me going over the $64K limit. Sweet!

So, based on that, updates on my current investments and plans for deposits over next 26 months, here is what I am looking at:

  • Savings: $132K (can spend without having to pay taxes)
  • Deferred Income from work: $156K (after taxes withdrawn – don’t have to pay taxes on it)
  • Brokerage Account: $87K (can spend about $60K of it without paying taxes. The rest will be taxable.
  • Inherited IRA from my father: $137K (taxable when we take it out)
  • 401K/IRAs: $613K (taxable + penalty)
  • Roth IRAs: $298K (non-taxable)
  • Total: $1,445K liquid assets (350K with no tax)
  • House: $298K (not depending on it unless absolutely necessary, i.e. no reverse mortgage
  • Expected expenses $54K + Mrs. 39 Months spending (assuming equivalent of her take home pay). This assumes having a taxable income below $64K, and thus keeping the subsidies

 

As you can see, I’m actually in pretty good shape. Current plan:

  • For first 6 months, pay for medical with Cobra and take $18K from Deferred (tax free) and mandatory $9K from inherited IRA
  • For each year following, Take $12K from inherited IRA each year, and pay very little tax on it. Should last for 10+ years (till I hit 67)
  • Take $42K from Deferred/post –tax. Should last at least three years (till I’m 60)
  • Move to my investment account. Should last for at least two years with limited taxes (Gets me to 62 and Mrs. 39 Months to 64). At this point, I’m assuming Mrs. 39 Months wants to stop working, so we bump up expenses to $72K a year
  • Draw down 401K at $72K a year. This should last us for 16+ years.
  • At that point, switch to Roth IRA, which has been growing for 20+ years without getting tapped, so it should have over $800K. This should last us for the rest of our lives.
  • Never touch the savings account/emergency fund, or the home value (these are our backups).

Note: all growth, expense and investments assume a 3% inflation rate.

Overall, I’m more confident now that I was a couple of months ago (even with the market not going anywhere). I could conceivably take a few months off my count and go earlier, but I don’t want to do that just yet.

How have your plans changed?

Mr. 39 Months

Original Draw down plan

Updated Draw down plan Mar 2018