Saturday Linkage:


  1. Do The Weird Things Now Because One Day You Won’t Be Able To (Financial Panther); Its always a balance between spending now vs. saving for the future.
  2. Why Buying the Dip is a Terrible Investment Strategy (Dollars and Data); Hard to figure out whre the “dip” is and time getting back in.
  3. Buying NEW Cars with Financing (Miranda Marquit); We’ve always financed, but paid it off in advance. We finally have enough resources to pay them off with cash now.
  4. 10 ways to increase your income (Alan Donegan) Standard advice to increase your income as a way to help achieve FI.
  5. Why everybody’s hiring but nobody’s getting hired (Vox);
  6. The Case for Renting (PWL Capital); With the tax reform of 2017, it does make more sense to rent at times – – provided you invest the extra money you get out of it!
  7. Income for Sale (Humble Dollar) The case for delaying your social security date to the age of 70. 
  8. Dear Wife, Here’s How to FIRE If I Die Early (budgets are sexy) Need to shoot this to Mrs. 39 Months
  9. Should I Take A Mini-Retirement or Stick It Out? (Financial Mechanic); I’m dealing with this right now
  10. How long can I (should I) keep this job if they’ll keep me? (Her every cent counts); Similar to #9 above
  11. Making the transition to early retirement: Our 5 year plan (Rich Frugal Life)

When do you “time the market?”

So I am not a big fan of market timing – where you try to predict where the market is going to go, and make investment decisions based on that. I am more of a “buy and hold” kinda guy, who determines his allocation of investments, and then sticks with hit, rebalancing as needed. This held me “in good stead” during the 2008 and 2020 “crashes” where I just left the money in place, and waited (in some cases over a year) for it to build back up.

In March 2020, the market dropped down, and from that low of March 17th, it has doubled since then. I didn’t lose any money, because I never sold. I’ve also talked to you about my concern of the market, especially the S&P 500, being overpriced when compared to historical P/E ratios and other metrics. I recently adjusted my allocation, due to these concerns. Still, the majority of my investment career, since the crash, has been focused on long term investing.

But what happens when you have events in your life that demand a short term view on your investments? Due to Covid, my company has instituted a vaccine mandate (before the government even mandated it) – everyone has to be vaccinated by Oct 1st. While I am not an anti-vaxer (I got the Shingles vaccine this year in March, and just got my tetanus booster) I do have concerns with the Pfizer, Moderna and J&J vaccines, based on my analysis.

I’m looking at taking the Novavax vaccine once it becomes available in the US (4th Qtr?). However, that doesn’t look like it will be done in time for my company mandate, so it appears that I may be let go in early 4th Qtr 2021. Since I am FI, it doesn’t really get me too anxious.

However, I do have a significant portion of investments in a company 401K and Deferred account. The 401K I can let sit (or just transfer over to my IRAs) and that would still match my “buy and hold’ methodology. Even if it dropped right before I left, by transferring it to my IRA and letting it sit there for a couple of years, it would move back up.

However, the Deferred money would be paid out immediately upon termination of employment. The assets would be sold, and it would be a taxable event. Since I am looking at using this money for the first couple of years of retirement, I am concerned about it dropping suddenly, right as I planned to use it.

Several issues have me concerned right now:

  • We are heading into October, and October is typically not a good month for the market (see crashes in 1929, 1987, etc.)
  • There is a lot of negative news coming out of China right now (Evergrande, bank issues, etc.) that might cause the market to hiccup
  • Supply chain issues continue to affect companies and their Black Friday sales
  • Covid continues to be a net drain on the world, with its impact still to be figured out

So in this case, I have chosen to “time the market” with this deferred account. My typical allocation was 25% S&P500, 25% International, 25% Bonds, 25% Small Cap. I’ve now gone to 100% cash with it, and I’ll probably stick with that till November, or until I get let go by my company.

We will see how that works out!

Mr. 39 Months

Saturday Linkage:


  1. 9 Things to Think About When You’re Waiting (Art of Manliness) I really like this article and its ideas. Need to use them when I’m impatient.
  2. Weekly Points: Southwest Calendar Extended, Should You Tip Housekeeping, Three Cards To Never Close and More! (Travel miles 101); Weekly tips, now that we are all starting to get out.
  3. 3 Credit Cards We’ll Never Close (Mile Value); Three different writes give their opinions
  4. Turning 50, Part 2: Rethinking The Years Ahead (Costa Rica FIRE) Another blogger who is pretty close to my situation, so I enjoy reading their work /
  5. The Great Resignation Is Here, and It’s Real (; I’ve been hearing a lot about this lately.
  6. Ten Keys to Making a Sucky Job Less Sucky (Freedom is Groovy); Ways to improve your job, instead of joining the Great Resignation
  7. Retirees Likely to Receive Significant Bump in Social Security Benefits in 2022 (Kiplingers) I am always suspicious about an organization (US Govt) that both determines the inflation rate, and the increase in social security. I think Inflation has been higher than the increases for years now, especially when you consider health care costs.
  8. Why I’m Living on Leftovers (Budget Life List); I love leftovers.
  9. The Crashes That Nobody’s Talking About (Irrelevant Investor) The top 25 Stocks of the S&P are responsible for 55% of the gains, and a lot of S&P stocks are getting hammered in 2021.
  10. The negligence that led me to DIY investing (JL Collins) I ended up going DIY about 10 years ago, after tracking my own performance vs my advisor – and beating him every year for a decade by 1% -2% each year.
  11. Little Free Libraries (Reflections around the Campfire); A cute idea

Let’s be Careful Out there….

I’ve spoken before about my “side hustle” of TKD woodworking in the past (look through link on the right). I really love woodworking, and its given me an outlet where I can fund my interest, improve my skills, and practice the administrative tasks of running a company (financial documents, website, etc.)

One of the issues with any sort of hand labor (carpentry, automotive, etc.) is there is a danger from the tools you use. You need to always be on guard, especially with powered equipment (like Table saws, miter saws, etc.). Whenever I’m working with powered equipment, I make sure the guards are on, and I use a healthy respect for these tools. It is one of the reasons I got a Sawstop table saw – it has a braking system in it that cuts out the saw if it detects it is cutting flesh. I can honestly say that I have not had a power-tool injury in the 30+ years I have been doing this work.

Unfortunately, I now can’t say the same about hand tools. Yes, those tools that are powered by Human muscle. Its very embarrassing.

I have a few old-time wooden hand planes that I don’t use very frequently. I’ve got them stored above a cabinet, since I only pull them out once every 2 years or so. Well, I was pulling something out of the cabinet, and one of the hand planes fell. For wooden hand planes, the blade is held in with a wooden wedge, and in this case, the wedge came loose, and the blade fell down. Did I step back and away? Of course not, I reflectively tried to catch the plane & blade, and the result was a somewhat severe cut to my ring finger on my left hand. Ouch!

Visit to minute clinic and then hand doctor yielded a bandaged hand, and then an operation to reattach one of the nerves in the hand. Luckily there was no damage to the ligaments, so I still have full range of motion. But for the next 2 weeks, I’ve got no shop time – have to keep in clean.

Lesson’s learned – never store sharp tools above where they could fall. This has been fixed in my shop now. As my wife says, it could have been worse.

Mr. 39 Months

Saturday Linkage:


  1. Stop saving for retirement. Start saving for financial independence (Dividend Strategy); This should be the anthem of the FI community
  2. What Would Happen If We Slowed Down? (Cal Newport); How much would it hurt you professionally if your worked 20% less that you had time, instead of the typical 20% more?  
  3. The Everything Bubble (Blog FTX); Everything seems to be up!
  4. What Has the Stock Market Taught Us Since 2010?(A Wealth of Common Sense)
  5. If The Fed Steps Back, Do Yields Step Up? (Brinker Capital); That which can’t go on – won’t.
  6. Replacing “have to” with “get to” (5AM Joel); Simple switch of perspective and mindset
  7. Compounding – The Eighth Wonder of the World (FiResearch)
  8. Turning 50: Rethinking My Perfect Day (Costarica fire); Interestingyou’re your priorities change as you get older
  9. The Great Resignation: Millions Are Quitting, Should You? (Money Under 30); Interesting as this is happening at the same time as vaccine “mandates.” This is going to squeeze companies very hard.
  10. Ask People What They Do, They Might Surprise You (Financial Samurai)
  11. 4 Bad Habits That Lead to Late Nights (Budget Life List); Watch your health!

Millionaires Don’t Buy New Cars?

Go Curry Cracker had a good article on his purchasing decisions for his new car. It starts with some of the basic advice of the book, Millionaire Next Door. He then walks through his decision making process on what to buy, used vs. new, electric vehicles, cost of ownership, and financing vs. cash purchase. Overall its an excellent article for anyone thinking of getting a new/used vehicle in the near future.

My history (and Mrs. 39 Months) is interesting, in comparison to the Millionaire next door. The book discusses the pluses and minuses of purchasing new and used, when to trade in, when to lease (almost never). For us, we tend to purchase new, and then drive the vehicles forever. I have owned four vehicles in my life, and two of them I have left on the side of the road after 100,000+ miles/multiple years. Literally driving them till they died.

My third vehicle I put 280,000 miles on over 10 years, and finally traded it in when the creaking on it (whenever I braked) go too bad. I’m now driving my fourth car, a 4-door sedan, with 180,000+ miles on it over 11 years. I hope to keep driving this one till I decide to retire – and then it’s a truck!

Mrs. 39 Months has only owned two cars. The first she drove for 16 years before trading it in, and the current one, which she has driven for 14. While she doesn’t put as many miles on it as I do (due to work) she also doesn’t see a need to purchase a new one every 3 years.

Well, Mrs. 39 Month’s car has started to have some electrical problems (bad symptom) so she has started looking for something new. She has a good idea of what she wants, but due to the current issues with the automotive supply chain, we haven’t been able to find what she is looking for available. So we’re nursing her car along right now until maybe 2022. Hopefully…..

The benefit of being FI and in good financial shape is that we’ll be ready to pay with cash on this (and my future purchase). Hopefully we can get a good deal here and she’ll have another car she can drive for 15+ years. Wish us luck.

What is your car buying story?

Mr. 39 Months

Saturday Linkage:


  1.  Who is the Wealthiest Generation? (Economist Writing Every Day) If you measure it per Capita/per person, the answer is going to surprise you!
  2. I hustled like mad in my 20s. Here’s what it cost me. (Woke Salary Man); Cute comic strip display of first principles.
  3. Play the Hand You’re Dealt To Live the Life You Dream (route to Retire); Life isn’t fair, but we can all do the best we can with the cards we are dealt.
  4. 2 Years of FIRE: Life After an Early Exit From Medicine (Physician on Fire); Interesting tales from someone who took the first step out
  5. On Time, Money and Health (Today Purpose); You can’t just save for the future – you have to take the opportunity now to live. Don’t wait till you have “retired”
  6. Tracking Spending: A Foundational Skill of Personal Finance (Managing FI)
  7. Everything is going up? (Irrelevant Investor); Not everything is going up in this market – some surprises!
  8. Not Wanting Something Is as Good as Having It (Four Pillar Finance); A truism
  9. The Returns of Rental Real Estate vs. Stocks (Mindfully Investing) When you add in capital appreciation and rent increases, rental real estate is close since 1928
  10. Fifteen good money habits to adopt today (I Heart Frugal)
  11. The Myth Of Diversification – And Why It Means It’s Okay To Take Chances (Financial Panther) I think I’m a little more conservative than him, but I am 57 years old now /

Change to Allocation

I continue to be stunned and surprised at the increase value of the market as the year continues. From its March 2020 low point of 2,237.4, the S&P500 has now hit $4,524.09, basically doubling in value in 17 months. It seems like the market will just keep going up & up!

We all know this isn’t possible, but folks have been betting against the market (including me) for months now, and we continue to get it wrong. That’s why its always important to stay in the market, no matter what. Don’t pull your money out, because by the time you figure out the market has turned back up, you’ve already missed a significant amount of gains.

That being said, I have had two major concerns at this moment:

  1. The presence of high inflation may continue and force the fed to raise interest rates. If so, that will do some damage to the returns of my bond funds (which haven’t performed very well comparatively for the last several years).
  2. The S&P 500 continues to be way overvalued, with P/E ratios more than 2X historical values.

So I made the decision to make some changes to my investment allocation.

  • Change Bond allocation from 20% to 10%, reducing my exposure to the Fed raising interest rates
  • Change S&P500 allocation from 20% to 15%, reducing my exposure to the “overvalued” S&P
  • Add 15% allocation to dividend stocks – typically those steady stocks that continue to throw off income, even when the market sinks somewhat

While you could say that this might reduce my returns by reducing my exposure to the S&P 500, I actually have increased my stock allocation from 60% to 70%. I’ve just changed some of the stock investments to dividend stocks, which may not grow as fast, but should grow and throw income off better than bonds in the current environment.

So, my new allocation for my IRAs is:

  • 10% bonds
  • 15% dividend Stocks
  • 15% S&P 500
  • 20% Small Cap stocks
  • 20% International stocks
  • 20% REITS

We will have to see how that goes in the near future.

Read more

Mr. 39 Months

Saturday Linkage:


  1. 3 Free Happiness Hacks (Budget Life List) Simple but great ideas
  2. We Don’t Need More Money… But I Want It! (Route to Retire) The fear of most folks that retire early – we always want a bigger safety cushion.
  3. Private Lending v. Rentals – What Is The Better Real Estate Investment? (Costa Rica Fire): I know I’m using REITS right now, though still looking at direct investing at some point.
  4. The danger of outgrowing your lifestyle (Early Retirement Extreme); Discussion on lifestyle progression as you age.
  5. New Commission! Custom Table top (TKD Woodworking): More work at the shop.
  6. Benefits of Meal Prepping and How to Start (Women who Money) One of the best ways to reduce your food budget and eat healthier!
  7. 9 Questions to Ask Aging Parents About Their Finances (Kiplingers); For those of us in the “Sandwich Generation”
  8. Use Technology Like the Amish (Art of Manliness); Interesting article for those of us who want to reduce our dependency on new Tech
  9. Estate Planning 101 — The Simple Path to an Estate Plan (JL Collins)
  10. Too Much Time After Retirement? (Retire by 40); One of my biggest fears – retire with nothing to do
  11. Lake Time! (Reflections around the campfire); People are getting out and camping/RVing!

What are your assumptions when planning for FI and retirement?

A key part of planning for Financial Independence is to determine the assumptions you make for the future. This is always a “moving target” as we are trying to predict the future. We can go back to past periods of time and try and use that (this is what the 4% rule was based on) but we are trying to predict an ever-changing future. This is fraught with risk.

A person’s personality (and their spouse’s personality) now “comes to the fore” here.  If they are optimistic, then the prediction is on high investment returns, low inflation, and good health. If they are pessimistic, then its low investment returns, high inflation and potential higher costs for health care. Most folks are somewhere in between – but this is a key part of the “angsts” of people trying to hit their retirement goals – and has been for many decades. The fact that folks are living longer (and thus the big problem if they guess wrong) has further caused people’s stomachs to churn.

Many people in the FI community have never lived in a high inflation era. Inflation got smacked down in the 80s, so for the last three decades, we’ve been living with 2% – 4% inflation. For those of us older (late 50s, 60s) we remember the 70s and early 80s, where inflation hit double-digits and caused a massive crunch in people’s plans for retirement. That’s why boomers typically overestimate inflation, and non-bloomers underestimate.

The same goes for investment returns. From 1968 – 1982, the stock market returned a net 0% – fourteen years! So again, boomers tend to be a little more conservative in their return predictions. Non-boomers have known some pretty sweet times for the market (and some crashes) so their predictions might be more aggressive. I’ve written before about how I think the market is way overvalued, so we may be in for a significant correction/crash in the near term.

So what are my FI assumptions?

  • Inflation -3% per year
  • Social Security increases – 2% per year (i.e. doesn’t keep pace with actual inflation)
  • Stock returns – 7.8% per year (down from historical 10%)
  • Bond returns – 3.1% per year (down from historical 4.6%)
  • Return for 60% stock/40% bond portfolio – 5.92%
  • Return after inflation – 2.92%
  • Life timeline: Live to 97 (me) and 99 (Mrs. 39 Months)

I used to be more aggressive with my investment returns, but after my meetings with our investment advisor in 2019, I dialed them back somewhat.

Based on this, our current portfolio, and taking Social Security at age 67, we could retire now and still end up with the equivalent, in 2021 dollars, of $291K at time of death. So we’re FI!

Still, the assumptions could be not pessimistic enough – and we could be hurting in our old age. We will see…..

So what are your assumptions for your calculations?

Mr. 39 Months