Christmas Gift Hacking

A lot of folks in the FIRE community have talked about how they work hard to keep it a frugal holiday season – either cutting down amounts given, reducing gifts, or just eliminating them altogether. It’s a difficult task in this world of rampant consumerism, especially with kids.

 At the same time, many of us have hobbies that we greatly enjoy (otherwise we would go nuts now that we are financially independent retirees, or on the cusp). For those working on FIRE, hobbies are one of the things we seek out, knowing we will need to find ways to keep ourselves occupied once we retire – after we have spent the first 24 months doing all the travel and other activities we dreamed of doing.

 So one of the Christmas hacks you can do is to use your hobby to make gifts for folks. They don’t have to be extravagant (most people as they age don’t want a lot of extravagant gifts, because then they’ll feel they have to respond in kind). We have a friend who is an artist, so she does hand painted Christmas cards – which most of us end up framing and using in the house. My brother is an accomplished photographer (he did it for newspapers and for his business’ marketing efforts), and one of his gifts is to get photos together of the family over the past year and create a calendar for each of us with photos.

 Me, I’m an amateur woodworker. The woodworking websites and magazines are full, come around September, with easy gift ideas, and I’ve mined them for the last several years for ideas. Instead of spending $100s on family, I find that with $50 of materials I can create some nice stuff, and people appreciate the hand-made gifts more. This year, its oriental themed, desk frames for photographs. There are two-sided, so each frame shows two pictures. They are held in place with small dowels (the tops come off) so the photos can be replaced if necessary.

 

It’s a great chance to do something for those you love, which is personal, and I think more appreciated than something you just get off the shelf.

 What have you guys made for friends and family for Christmas?

 

Mr. 39 Months

 

Yay! I just did my first travel hack (sort of)…..

Well, I’ve been doing the research, reading the blogs, and listening to the podcasts on it. Figured it was time to start using some of that knowledge to help out.

I’ve spoken in the past to my students and the engineers under me about the need to join rewards programs for the travel they do for business (airline, rental car, hotel, etc.). Even if they go to a “one off” hotel (regularly go to a Hilton, but stay this time at a holiday inn) sign up for the program. The points add up, and you can use them for your own personal travel (most of the time – some companies keep them for their own use).

I also suggest to the students that they write “Willing to travel” on the bottom of their resumes. Businesses know that travel sucks, and often they are willing to pay folks extra for their willingness to travel.

Well, I’ve accumulated some significant mileage in the air, which I have used in the past on personal trips (Hawaii, Alaska, etc.) but I never really looked at the hotels. To my surprise, I found I had a significant number of points in both Hilton and Mariott from travel. I figured it was time to try this out.

Mrs. 39 Months wants to attend a Dulcimer Festival in the Poconos the 2nd weekend in January. So I went on both Hilton and Mariott’s sites, and found a nice one-night stay within less than an hour of the site, for only 20,000 points (the lowest point total you can have for Hilton rooms on the weekends). Score!

I know that I’m going to be visiting North Carolina in March to take a woodworking class, so I went to look for rooms there. It turns out its pretty dead at that time in NC, in that area, so I got a five night stay for only 40,000 points (10,000 pts a night, with 5th night free!). Score again!

Finally, I did my first credit card as part of the hack (see info on travel hacking in the links to the right). I applied for the Southwest Rapid Rewards Premier card. If I can charge $1,000 dollars in the first 3 months, I can get 40,000 Southwest points. I’ll try and get the Southwest Rapid Rewards Premier Business card next, in order to get 60,000 Southwest points if I charge $2,000 on it. Thus, I’ll be 103,000 points in towards the 110,000 necessary to get the infamous Southwest Airlines Companion Pass. I just have to charge the remaining $7,000 by the end of 3 months.

I actually am enjoying this a bit. I’ll let you know how I’m doing as we go forward.

 

Mr. 39 Months

Monthly update – Dec 2017

Keeping it rolling, only 31 months from Financial Independence!

Much better month in November (+1.32% gain) than October (+0.47%), especially at the end, where the market really jumped up. I started the month with $952K of invested assets, put in $4,108 into my various accounts (401K, Roth IRA, brokerage), and ended with $969K (almost to $1M, yay!). For the year, all total, I am still up around 9.6%, and that is with a 70% stock/REIT and 30% bond mix.

Bonds continue to not perform very well (up only about 0.1% for the month) but they are providing the stability that I want (in case of a market downturn). Surprisingly, the REITs were up (about 3.0% for the month) – maybe they are just returning to where they should have been after a pretty bad year. The International was OK for the month (up 0.8% for month), and the S&P 500 and small cap indexes really did well (around 3.1% for the month).

My dividend portfolio (from my dad’s inherited IRA) is up about 3.0%, primarily due to REITS, though the Chevron and
Verizon stocks did great (Chevron was up 9.2% in November). That at the same time that they are due to pump out some end-of-year dividends to help out (this may be the reason they are up – folks are buying them to get the dividend).

In the value portfolio

  • CSS Industries stock was down almost 10% for the month, and went into negative territory for the year. I’ll go through my 6-month stock analysis in a later post, as I try and determine whether to keep a stock
  • Gilead was down 0.2% for the month, but still up 10% for the year
  • Taho continues to underperform, down another  8.1%, and over 20% for the year. Legal troubles in Central America continue to be a drag
  • For December, I plan on continuing to put my investment money into my bond mutual fund. I want to get my allocation more in line there with a 33% REITS/ 33% bonds/33% stocks plan. This will call on me to probably buy bonds each month for the rest of the year
  • The big lesson for the value portfolio continues to be that I’m not a very good stock picker, or that I need to be patient (i.e. 3-5 years patient) in order for it to pay off.

I continue to make progress towards my FIRE goal. While I expect a market correction at some point, I think we will be able to weather it, provided the Zombie Apocalypse doesn’t come.

How did your November go? How are your plans for the year going?

 

Mr. 39 Months.

 

Putting up with Put-downs: Dealing with Trolls, haters and other miscreants while FIRE blogging

While recently reading through some of the FIRE blogs I regularly go through, I came across and article by ThinkSaveRetire, in which he was discussing the Facebook blowback he was getting after an interview for CNBC on retiring early. Apparently there are a lot of people out there that don’t like it when someone gets of the treadmill – and demonstrates that they could do it to, if they chose to.

The Stoic philosophers (Seneca, Marcus Aurelius, etc.) actually had a few things to say about the “haters” in their day and how to deal with them.  I guess the Roman empire had their share of trolls.

Remember that the ancient Stoics were very concerned about maintaining a sense of tranquility in their lives, and the anger that insults could bring up was unwanted. They wrote extensively about dealing with slights and insults, in order to maintain their “frame.” Some of their ideas:

  1. Pause when insulted, and see if there if the insult is true. If it is, there is little reason to be upset. As Seneca said “Why is it an insult to be told what is self-evident.”
  2. Pause to consider how well-informed the insulter is. He may be saying something bad about us because he sincerely believes what he is saying. Rather than get angry with the person, talk calmly with them to set them straight.
  3. Consider the source of the insult. If it is someone who you respect, then the critical marks shouldn’t upset you – it should make you reevaluate you ideas. If it is someone you don’t respect, then you should feel glad at the insult because “if they think I am wrong, then I must be doing something right.”

In terms of response to insults, rather than insulting back, the Stoics ideas included:

  • Use of humor to deflect an insult, to show that we don’t take the insulter or the insults seriously
  • Don’t respond at all – again to show you we don’t have the time to waste on them

In the end, whenever you “put yourself out there” you are going to get a certain percentage of people who enjoy trying to “get a rise out of you.” Don’t waste your time with them – just keep on your journey to FIRE. After all, living well is the best revenge.

Mr. 39 Months

 

Note: A lot of these ideas I found in the book A Guide to the Good Life (Stoic Joy) by William Irvine.

Travel Hack Plan

Well, after going through a large number of podcasts and bloggers comments and articles, I’ve chosen to enter the world of travel hacking, like so many others in the FIRE community.

I’ve already provided a link to the travel 101 blog, which I think is one of the best. Other ones to look at if you are interested in travel and seeing the world are Go Curry Cracker or RetireEarlyLifestyle (both with links to right). There also prominently featured on many of the FI podcasts that I listen to. In the end, after realizing how easy it was and the opportunities it provides, I couldn’t resist.

 

Travel 101 has an excellent course on travel hacking, and its free! For those interested, I suggest you consider taking it.

I first took a look at where I was, based on an American Airlines card and business travel. I also had some hotel stays, again based on business travel.

  • American Airlines: 234,436 miles (not bad). Good for a lot of trips, especially international
  • Marriott Hotels: 37,563 points  (good for about 3 nights, depending on where)
  • Hilton:237,817 points (good for about 8 nights, depending on where)

Not a bad start.

In looking at how to get started, I reviewed the cards that Travel 101 suggested and what I already had. One of the issues is that Chase bank has a “5/24” rule, which says you can only get 5 new credit cards within the last 24 months – and that is any credit cards, not just Chase. If you apply for one of theirs after you have gotten 5 others, they will turn you down.

Early in the year, as I started exploring FIRE and looked at Credit card benefits, I got a Citi card with 2% cash back, and an Amazon card for 3% back (because I did so much shopping on Amazon). Thus, I am limited to only applying for 3 other cards. Based on the information provided by the travel hackers, I am going to proceed as follows:

  1. Southwest Airlines Rapid Rewards Premier card: Apply in Dec, put $1,000 in 3 months on it and get 40,000 miles
  2. Southwest Airlines Rapid Rewards Premier Business: Apply in Dec, put $2,000 in 3 months on it and get 60,000 points, for a total of 103,000 miles
  3. Do additional charges on Southwest Cards to reach the 110,000 mile mark and get the travel pass (hopefully as soon as possible).This would enable Mrs. 39 Months to fly with me for free on Southwest.
  4. Get a Chase Sapphire Preferred Card (the mother of all travel cards): Apply in February, after I have done a lot of my Southwest Charges. Charge $4,000 in 3 months and get 50,000 points.

With that done, by the middle of 2018, I should be sitting on a lot of miles, hotels and points. Then its trying to figure out where to go?

Plans for 2018:

  • Visit Portland Oregon (Mrs. 39 Months wants to take a class there, and then we can visit some national parks)
  • Visit Asheville, NC (I want to take some woodworking courses there)
  • Visit Vermont, where my brother lives
  • Other trips?

I’ll let folks know how this is going as I try to work stuff out.

What travel hacks have you done/are planning to do?

 

Mr. 39 Months

 

 

Excellent post at Our Next Life about fears & excitement as they approach early retirement

Excellent post about the emotions running through a couple as they are just 4 weeks from early retirement.

She runs the spectrum on the uncertainty, sadness, and physical ailments that have popped up as they close in on their final date. An excellent read when people want to understand what it will be like as they approach the frontier.

 

Mr. 39 Months

So what are you thankful for?

It’s that wonderful time of year in the US, when we get in cars, drive for hours, sleep on inflatable beds or fold-out couches, and then stuff ourselves with turkey and stuffing, before falling asleep on the couch while watching football. In truth, it is supposed to be the time of year when you reflect back on a bountiful harvest and all the good things that happened to you and your loved ones throughout the year, and gives thanks for it. Often folks seem to have a difficult time throughout the year counting their benefits, and only at the end of the year do they spend any time reflecting back. This is a mistake.

This year, I have been filling out a 5-minute journal, which is a daily journal with specific things to fill out in the morning and in the evening. The idea being that this will help prepare you for the day (what are you grateful for, what thing would make the day successful, daily affirmation) and clear you mind at the end of the day (what went well, what would have made the day even better). It’s also full of motivational quotes and small tasks to do weekly.

The biggest benefit to it, in my mind, is its requirement to list out three things daily that you are grateful for. It can be silly things (grateful for a warm bed) or profound (grateful for the friends that I have around me), but it makes you remember to be grateful every day.

I’ve also started reading about Stoic philosophy. Yes, go ahead and get it out – I listen to Tim Ferris podcasts and sometimes take his advice on certain things. Sue me. One of the best books I’ve read is A Guide to the Good Life by William Irvine. He describes the ancient history of the Stoics, and then shows how to apply their teachings to modern life.

One of the key parts of Stoic philosophy is to imagine the bad things that can happen to you in life, and then think about how you can react and continue to live, even if these happen. The purpose is not just to steel yourself against the evils of the world, but to appreciate what you have. In discussions on death, they teach to think that this moment might be your last, or this might be the last time you see a friend. This is so you can truly value the time you have, the people you live with, the food you eat.

So don’t just value your friends, family and life once a year. Value them constantly and give thanks now.

 

Mr. 39 Months

Book review: Multiple Streams of Income

The classic book, by Robert Allen, written in 2000. Many consider it the book that is the father of the “side hustle.” Written in 2000, the book tries to distill all the lessons and ideas from Robert Allen’s 20 years of books and seminars. He attempts to show you how to earn multiple streams of lifetime income, using a variety of strategies – each of which he goes into a great deal of detail on.

The key parts of these strategies is that they can be used:

  • On a part-time basis
  • Working right from home
  • With little or none of your own money
  • With fewer no employees
  • Using simple systems that have a proven track record

 

Sounds like its right up the FIRE community’s alley, right?

 

Robert starts off with some basic explanation on the time-value of money, compound interest, and how to leverage that towards financial independence. He then covers some basic money skills you will need (valuing money, controlling it, saving it, using it to achieve financial independence). He finishes up by covering the three “great money mountains” that his streams of income are built on:

  1. The investment mountain (screening and filtering, timing in, timing out)
  2. The real estate mountain (finding, funding, farming)
  3. The marketing mountain (internet, network marketing, infopreneuring, licensing)

 

Streams of Income

  1. Stock Market Success: Here Allen goes through some basic lessons on investing (invest for the long haul, how index funds beat 4/5’s of money managers, and how you should start investing sooner, rather than later). His thought is to place at least 50% of your investment dollars in index funds, and just let them grow. He provides links to common index providers (vanguard, TRowePrice, etc.) as well as additional reading on the subject.
  2. Accelerated Stock Strategies: For 30% of your investment dollars. Here Allen goes into more aggressive stock strategies, He covers four basic systems to gain enhanced returns above & beyond index strategy, and goes into detail on each of them. They include:
    • Invest with Warren Buffet
    • Select Mutual Funds with the longest-term track record
    • Select Financial Advisors with the longest track records
    • Consider high-powered sector funds
  3. Options trading: For the final 20% of your investment dollars. This covers the highly leveraged strategy of covered calls, and call/put options. This particular chapter might be worth the cost of the book, as this particular type of investing can be very confusing. Allen takes the time to explain how to do it in detail, and provides links and methods to performing the trades. If you’ve ever wanted to find out about this type of investing, here is a short and simple 28-page chapter that can get you started.
  4. Real Estate: This chapter covers the basics of real estate investing, both for those who are looking to be landlords, and those trying to fix& flip. Excellent chapter to provide the basic tools and techniques for real estate. Allen divides the chapter into three areas:
    • Finding: How to do the research to find bargain properties in the right area
    • Funding: How to fund your real estate investing with minimum up front money
    • Farming: How to create cash from your real estate, primarily through buying & holding/renting
  5. Foreclosures and Flippers: Allen discusses short-term bargains here, primarily gained through foreclosures. He discusses some of the methods to acquire foreclosures (pre-foreclosure, Post-foreclosure, tax sales, etc.). He then discusses the benefits to be gained with quick flipping of properties. Much of this has been written of in much more detail on the internet and through TV shows, but he does cover a lot of the basics and pitfalls of the strategy.

In the next chapter, Allen goes into more refined real estate strategies, providing a good summary view of them (though you will want to do your own research on some of these complicated plans). They include:

    • Wholesale real estate (you identify and setup deals, then pass off to another)
    • Angel real estate investing (you provide capital)
    • Bird dogging (another investor provides capital)
    • Split for cash (splitting property up and selling portion)
    • Conversion (converting from one class of real estate to another)
  1. Paying other people’s taxes: In this way, Allen shows how you can purchase tax lien certificates on other people’s property for pennies on the dollar. You can then use the leverage of these liens to either get your full payment of tax funds, or repossess the property. Often this amounts to 16%, 20%, 25% or greater return. Depending on your state and local laws, the profits can be very good
  2. Network Marketing: Yes, network marketing can be another tool in your toolbox towards reaching a continuous stream of money. Allen goes through some of the problems in the past with network marketing, and some of the issues to be on the lookout for (need to buy inventory, etc.). He provides a list of questions to ask for potential markets you might get into, and strategies to select the right company, compensation plan and marketing system. Network marketing has proven itself to be lucrative for some in the past, so it should be something to consider.
  3. Infopreneuring: This is one that the FIRE community is very familiar with. It involves using your expertise/passion/hobby and turning it into a lifetime cash-flow stream. It could be a book, a how-to series of podcasts/videos or other mode of information. They key is to identify and research a market, produce a useful product, and market it. Allen provides some good questions to ask and methods to develop your opportunities. I think this is also a very useful chapter.
  4. Licensing: This is a step beyond Inforpreneuring and Network Marketing. The concept is to license your ideas to others, and let them do the hard work of brining them to market and generating income. You will simply take a cut of the hard work. You can also license others idea and do the work to profit from them, while paying them a portion of the income. Either way can work to generate another income stream for you.
  5. Internet marketing: Obviously, with the book written in 2000, this was a “new thing” and a new way to generate an income stream. Allen goes through a wide variety of ideas, most of which have become common place in our modern world. Still, its good to see Allen’s marketing mind go through all the potential uses of the internet.

 

Allen finishes his book with ideas on how to shield your income streams from others, including legal tax strategies, ways to protect your intellectual property, and methods to continue the streams past your lifetime, so your heirs can enjoy them as well.

 

All in all, and excellent book, and well worth a read.

 

So what have you read lately that you find interesting?

 

Mr. 39 Months

 

Uh – Oh. My Spouse is thinking……

The community typically has a situation where one spouse is “on fire” with getting to financial independence, but the other isn’t as easily convinced that this is the way to go, or how this might benefit/affect them. They will listen patiently to their spouse go on and on about effective tax strategies, paying off debt and high savings methods, but it doesn’t really sink in.

Maybe they pick up on the travel hacking early, because they see the benefit from that – and get a little excited. Still, even if you are sharing the rapidly accumulating savings, your prospective FIRE date, and count it down on a board, they just don’t get excited. They look at you with an amused smirk, pat you on the head and send you away.

Then something happens (bad day at work, a need to travel that they can’t meet do to a work commitment, etc.) and then they start asking questions. Are we really that close to retirement? How do you withdraw the money when we aren’t even 65 years old? How do we handle health care?

It is at this point that you know that it is starting to sink in – they are actually starting to envision a life where they don’t have to work, where they are financially free. It can be liberating, and it can be scary. If someone is just coming to the concept, they will be full of questions, and want justification for the answers (just like all of us FIRE true believers were at the beginning).

Well, the other night Mrs. 39 Months suddenly starting quizzing me on how you do a “ramp down” of your funds after you retire. I wasn’t sure if it was because of a bad day at work or if my comments had gotten through, but she was interested. After about 5 minutes of discussion, she seemed satisfied, though no exactly sure of the method. Still, I take it as a positive sign that she is coming to the realization that we are almost there.

So be patient with your significant other as you travel your road. It may take them a little longer, but they’ll catch up soon enough.

 

What have you and your partner discussed in your run up to financial independence?

Mr. 39 Months

Podcasts

 One of the best innovations in the last decade for those of us who travel a lot (especially by car) or who have long commutes is the podcast. A form of verbal recording, you can download them and listen to them at your leisure. No longer are you forced to listen to whatever is on the radio or to pack quantities of books on CD (or for those of us old enough, books on tape). While there are many who are saying podcasts are “overdone” and are on the way out, for those of us who are late-adapters to technology, this is a great innovation.

 The main benefit of podcasts is that you can choose the topics you want to listen to, so you can load up on cooking, woodworking, knitting – or Financial Independence! My personal preferences are for history, woodworking (odd, I know) and personal finance/FIRE.
 The hardest part is to find ones that you enjoy, and that provide you with the information and entertainment that you want. For that reason, I’ve listed on my blogroll to the right, some of the FIRE podcasts that I like to listen to. I will add to it as I find other ones that I enjoy, and feel that you folks would enjoy as well.
 After that, the only problem is finding the time to listen to them all!
 What podcasts do you like to listen to?
Mr . 39 Months