Frugal idea – use your hobby to provide presents for the holiday

I have talked before of one of my main hobbies, woodworking. As folks reach a certain age, they tend to prefer experiences and demonstrations of love/attention more than they want “stuff”.This is the perfect opportunity for the frugal FIRE enthusiast to both save money and demonstrate more attention to their loved ones than someone who just runs out and “buys something.”

One of the problems I have is to create something that would be useful to my friends & family, but not too large. I’ve done an arts & crafts bookshelf that went together with pegs (rather large) and a Japanese inspired two-sided picture frame. Both were big hits.

For this year, I chose to go with smaller items, but to expand the number of folks I gave gifts to. I chose two simple items that I could make from “scraps” of wood in the shop. For folks who don’t realize it, working in wood (or really any material)tends to leave you with lots of spare pieces of lumber/material that you don’t need, and end up taking up space. Finding ways to use this is a great idea, and another way to be frugal.

The first item is a small candle/tea light holder. It is made from a series of 1-7/8” squares of various lengths, set into a pyramid structure (see picture). A 1-1/2” whole is drilled in each of them to hold the tea lights, and then they are assembled and glued together. The build probably takes about an hour for each, but you have to break it up into small blocks of time, due to the time it takes the glue to dry.

The second item is a simple pen & pencil holder. Taking a large block of wood, cutting two deep holes in it (for the pens & pencils) and then shaping the ends into a gentle curve with a bandsaw and then sanding. These will be for the nieces and nephews.

Again, these aren’t significant projects, but they are demonstrations of love & affection,often prized more than if you went out and bought something.

What do you do for fun that you can leverage for a holiday gift?

Kevin

Investment update for December 2018

Well, despite some of the headlines we’ve seen about the market tanking again, November was an “up” month for me in comparison to how October left me. It just continues to show how the markets work (up one minute, down the next, but overall following an upward, though jerky, trend).

I believe a lot of folks don’t realize how much the Fed has an influence on the markets. For the 7-8 years after the “great recession” of 2008-2009, the Federal Reserve, or Fed, pumped a huge amount of money into the economy in order to keep deflation from happening. Due to that amazing amount of easy money, the markets responded by essentially tripling in value over that time. However, over the last year or two, the Fed has been increasing interest rates and pulling money out of the market. The result is that the markets are having a hard time, with the Fed putting the breaks on.

Many companies are enjoying strong profits, and the P/E ratio of the S&P 500 is 22.05 (est.) which is what it was back in 2015. Think about that, companies are more profitable than they were in 2016 (total return 11.96%) or 2017 (total return 21.83%) – but they can’t increase their price. There just isn’t much new money in the system, and it appears that the profits from 2016 and 2017, at least, were partially driven by easy Fed money.

So what to do? I plan on staying the course, like so many others of you. Over time, the market will increase. We will just have to weather the ups & downs.

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

So for the month, I’m up about 2%, with the big gainers kinda matching the big losers of earlier in the year.

  • S&P500: +2.8%%
  • Small Cap: +5.5%
  • International: +1.9%
  • Bonds: +0.8%
  • REITs: +3.9%

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 2.3%, with several of the REITs (especially HealthCare) going up strongly. Many of the dividend stocks (Chevron, Cisco, etc.) bounced back after big loses. Bonds went up, although my total bond market index greatly outpaced by intermediate bond index fund.

Value Investing Account: I sold off my value stocks in late November to pay for my Roth IRA rollover. I rolled over about $100K from regular IRA to Roth, and paid the taxes out of this “fun money” account. Due to the losses of the stocks, I was able to “harvest the tax loss” and reduce my taxes a little for 2018.

Allocation now:

  • 39% USAA Market Index (my brokerage is USAA)
  • 61% in Vanguard Value Index fund

Both of these were up in November. USAA’s extended market was up 1.8%, but Vanguard’s value index was up 5.1%. Again, these guys both got hit last month, so for the most part, it was gaining back ground.

For the year, I am down 1.99%, so I am hoping for a strong December to at least get me into positive territory for the year. So far, it hasn’t worked out that way. I guess we will see at the year end round up.

How did you do in November?

 

Mr. 39 Months

How to stand out and excel in life

One of the things that I was talking about with Mrs. 39 Months last night was the lack of drive or inquisitiveness of many people at work or in their life. It seems that both of us have a hard time understanding why people don’t question more, ask more, attempt more as they go through life. I don’t think either of us could work on one of the old fashion assembly lines where you do the same thing, over and over, for 8+ hours.

Yet there are many people who are perfectly happy & content with that kind of work life. They have a set structure, steps 1-7 that they do over and over, and they can do it in their sleep. They don’t stress out or have to keep their minds focused because it is routine. It is only once they leave their work that they truly start to “live.” Then they get to focus on their friends, parties, hobbies, and time away. Cue Drew Cary’s funny exploration of the song “Five O’Clock World”.

I can’t tell which type of person the FI community falls into. The typical FI person is very focused and able to work towards the goal, while exploring new options for enhancing that path. Yet, so many FI folks you read are trying to get away from the current job, similar to the second class of folks.

I do see a lot more FI articles from folks who have reached early retirement prodding people to look at what their life will be afterwards, and to plan for that. We need to be moving towards something and working on being our best as we strive towards FI.

I’ll leave you with something that has stared buzzing around the interwebs lately, the writing of Coach George Raveling (who Michael Jordan just calls “Coach”).  His article “23 life choices you are in control of” is a good read.

  1. Be YOU, not them.
  2. Do more, expect less.
  3. Be positive, not negative.
  4. Be the solution, not the problem.
  5. Be a starter, not a stopper.
  6. Question more, believe less.
  7. Be a somebody, never a nobody.
  8. Love more, hate less.
  9. Give more, take less.
  10. See more, look less.
  11. Save more, spend less.
  12. Listen more, talk less.
  13. Walk more, sit less.
  14. Read more, watch less.
  15. Build more, destroy less.
  16. Praise more, criticize less.
  17. Clean more, dirty less.
  18. Live more, do not just exist.
  19. Be the answer, not the question.
  20. Be a lover, not a hater.
  21. Be a painkiller, not a pain giver.
  22. Think more, react less.
  23. Be more uncommon, less common.