Author: kdrevik

Purging your Blogroll III – Aug 2020

Well, its August, and as I did in 2018 or 2019, its time to do a “blogroll purge.” As I noted then, one of the things which has always brought me a lot of pleasure is reading other FIRE blogs and seeing the different facets of the subject. It seems each blogger has a topic which motivates them, and they concentrate a great deal of energy on that topic. The result is some excellent reading and the opportunity to learn in-depth of a wide variety of topics.

It’s a sad thing that as people seem to hit FI, they take off and the level of blogging activity seems to drop. I’ve heard it said that many bloggers (and podcasters) don’t make it past six months. They say what they need to say, and then run out of ideas. When this happens, we often lose an interesting voice and set of thoughts. One of the reasons I enjoy the Post-FI blogs (near the top of the blogroll) is to see what life is like once folks hit the magic number/date.

What is nice is that there are always new people joining our community, and I want to make sure that I can include those in my blogroll (at right) so others can link to and see what they are saying. So I typically every 6-12 months do a blogroll “purge” where I clear out those blogs who haven’t updated stuff over the last 3+ months, and this frees up space for newer bloggers. So today, I’ll be doing my blogroll “purge” and trying to identify new and interesting folks for you to see.

Enjoy, and I hope you enjoy my writing and the writing of those I point out. Enjoy the rest of summer!

Read more

Mr. 39 Months

Saturday Linkage

8/8/2020

Sorry I missed last week – got buried with landscaping work at home (dug up a lot of beds by hand, put down 5 cubic yards of mulch, planted perennials, etc.).

  1. Thoughts on passive investing “bubble (Early Retirement Now):
  2. Want to turn your finances around? (Simple Dollar);  8 things to remember at the beginning of financial changes.
  3. How to use Apps and websites to sell your stuff locally for free (tic toc life); Need to consider this for my side hustle
  4. Should I max out my 401K at the beginning of the year (Pete the Planner): What is the pluses and minuses of this strategy?
  5. Is our retirement in Panama Unexpectedly over? (Route to Retire); Some of the perils of retiring overseas.
  6. Why would anyone own bonds right now (a wealth of common sense); mirrors my own thoughts.
  7. The nine money and life lessons most people learn too late in life (CNBC);
  8. The Permanent Portfolio (the irrelevant investor); Interesting take on  a different type of portfolio to handle potential risks involving S&P500, one-month t-bills, long-term government bonds and gold.
  9. Celebrating Financial Independence wins along the way (Costa Rica Fire); Taking time out to celebrate the wins will keep the motivation high
  10. Action Creates Motivation (Get Rich Slowly); If you want to make changes in life, you can’t just plan, you must act as well.
  11. Seven Phases of retirement (Retire by 40); Good review of the progress from start to finish as you journey towards full retirement.
  12. Money Lessons they don’t teach in school (Four Pillar Freedom); Good list, including “owning assets leads to wealth” and Compound interest

Investment Update Aug 2020 – Getting back there

With the Fed flooding the US with dollars while also keeping interest rates low, is it any surprise that the markets keep shooting up? Bonds have nowhere to go but down, and banks won’t pay anything for CDs or savings. Folks have nowhere to go but stocks – or precious metals & commodities (see gold/silver). So like most folks, my investments have continued to go up, even as reports of US second quarter GDP being in the tank.

Again, I’m not surprised, but I’m also not jumping for joy with the recovery. We really won’t know the effects of all this for a couple of years – right when we are looking to retire early.

If there was ever a time which showed that the stock market is not the economy. The economy is going to be hurt for 2020, but it appears the market may rebound.

As you know, I switched my allocation at the beginning of July, lean more heavily on stocks and REITs and to pull back from bonds (see above).

Retirement Accounts: Remember, my allocation for these is:

  • 20% Bond Index Fund
  • 20.0% S&P500 Index Fund
  • 20.0% International Index Fund
  • 20.0% Small Cap Index Fund
  • 20.0% REIT Index Fund

My 401K doesn’t have REIT option, so its just 25% for each.

As you would expect, everything was up, though in different amounts.

  • S&P500: 5%
  • Small Cap: 5%
  • International: 6%
  • REITs: 4%
  • Bonds: 1.6%

My dividend account new allocation (as of Jan 2020) was:

  • 50% Dividend Stocks
  • 50% REITs

The dividend paying stocks varied (some up, some down) but overall the account gained 1.2% for the month. My dividend yield for the 2nd quarter was 4.7%, and the stocks were recovering (but still down about $20K from their January high).

My value account with Vanguard was up 4.9%, so it was in line with most of the stock gains.

Overall, for July, I was up 4.3%, a nice bump. For the year, I’m still at -2.3%, but at least my Net Worth has recovered back to where it was at the start of the year (counting on all my investments I put in for the year).

Hope everyone is healthy and your May turns our well!

Read more

Mr. 39 Months

Family Trip

They live in the northern part of Vermont, roughly 10 miles from the US/Canada border, in a small town called Montgomery Center. Really a nice town in the shadow of Jay Peak – a big skiing site in the Eastern US. Its also about 1 hour from Stowe (another big skiing site where the Von Trapp family from Sound of Music settled).

There wasn’t much open in the area (some shops) which you had to wear masks into. Mrs. 39 Months wanted to visit the Ben & Jerry’s Ice Cream plant & take the tour, but they weren’t having them – we had to settle for ice cream.

So we ended up spending a lot of time with my brother and his wife – which is really why we went up there. Took the opportunity to sleep in and relax and just enjoy the company. It was just – nice.

The Covid has affected a lot of people and their plans, but never forget that family always comes first, and sometimes its good to be reminded of that.

Stay healthy!

Read more

Mr. 39 Months

Saturday Linkage

7/25/2020

  1. What is the 30-day rule? (Millennial Money); what method to control impulse spending.
  2. Debt Freedom doesn’t equal wealth (Budgetnista); It’s a first step along the path, but just because you are debt-free doesn’t mean the story has ended.
  3. Asset Allocation: The security bucket (Physician on fire); Good description of your emergency fund and spending money for the next 1-3 years, and where you can place those investments.
  4. Twenty-Five Ways you could be saving money now (Simple Dollar); Nice list
  5. How to include charity in your budget (budgets are sexy); we set aside a percentage of our budget each month for this.
  6. Historical Returns of small cap and value stocks (mindfully investing); shows historical returns, which is where I had issues with our financial advisor’s numbers. Note that numbers are not adjusted for inflation.
  7. Solving the Housing Affordability Crisis (Financial Samurai); Can’t say I’m a fan of providing subsidized housing I think there are better ways to do this.
  8. How to enjoy early retirement (city frugal); Interesting list of some of the problems with our current retirement lifestyle, an dhow you can overcome them yourself.
  9. Fifteen Months into early retirement Q&A (Stop ironing shirts); Nice to get info from folks who have just started on the RE path.
  10. Retirement isn’t static (Cracking retirement); Be flexible with your plans. You don’t know what will come up, and you need to be prepared to take advantage of opportunities.
  11. Treehouse writing Studio (Retirement Manifesto); Someone’s always dreamed of a treehouse since he was a kid. How he made it work for him
  12. How much does it cost to repair your credit (Thinksaveretire); Costs for do-it-yourself to hiring someone to assist.

Dividend Account results – 2nd qtr 2020

As noted back in April, I altered my Dividend/Income account to reduce the bond allocation to 0, and increased the dividend stocks and REITS to a 50/50 split. The idea was to increase my dividend yield, as bonds had been performing poorly for the 3+ years that I had been using them.

The first quarter was somewhat successful (an 18.7% increase in dividend $) but a real bust as far as value (I dropped almost 30% in value) due to the market volatility. If I had kept the bonds, I wouldn’t have dropped as much. As usual, my short-term timing is poor.

For the second quarter, I had to shift my account from my bank (USAA) to Vanguard, because USAA was spinning off their investments to Schwab, and I didn’t want to have my investments in multiple companies (I currently use Vanguard, and Mrs. 39 Months uses TRowePrice). I may have missed a few dividend payments on this, so the numbers are a little suspect. For the 2nd qtr 2020:

stockDetailsInvestment valueYieldDividend
CATCaterpillar$6,325.003.26%$51.50
CVXChevron$4,461.505.78%$64.50
CSCOCisco Systems$6,996.003.09%$54.00
DOWDow$4,076.006.87%$70.00
XOMExxon Mobil$4,472.007.78%$87.00
HRHealthcare Realty$14,645.004.10%$150.00
IBMInternational Business Machines$6,038.505.40%$81.50
PFFiShares$11,431.205.91%$168.97
PFEPfizer$4,905.004.65%$57.00
ORealty Income Corp (REIT)$11,900.004.70%$139.80
SVCServices PPTYS TR$4,254.000.56%$6.00
MMM3M Company$6,239.602.83%$44.10
UMHUMH Properties$14,223.005.57%$198.00
VZVerizon$5,513.004.46%$61.50
WBAWalgreens$4,239.004.32%$45.75
 Bonds   
$109,718.804.67%$1,279.62

For 2nd qtr 2019, I received 1,280.21 in dividends on $131,994 of investments – so 2nd quarter appears to be a “wash.” I’ve managed to gain back about 12% of the value back from the 30% that I lost, but still have a ways to go to build it back up.

Again, if I was using the account to live off the dividends, I could “let it ride” and let the investments build back up, while spending the dividends. I believe the “jury is still out” on whether the shift to stocks & REITS was a good decision or not. With the current US Fed and its interest rates, I don’t think Bonds will be a good return any time soon – unless you are willing to go into some very risky bonds.

Let’s see how 3rd and 4th quarter goes.

Read more

Mr. 39 Months

Saturday Links

July 18, 2020

  1. What I learned about myself after taking an investment loss (Costa Rica fire); thirty-three lesson about what they did wrong, and what they did to fix it.
  2. Perceived Safety of Bonds (Retirement Field Guide); Good explanation of how bonds aren’t really that safe, especially as inflation rears its ugly head.
  3. Retirement needs Stimulation (Cracking Retirement); The Chinese Covid virus has exposed the need to have friends, hobbies and stimulation once you retire.
  4. Summer vacation in the pandemic Area (retire by 40); Some ideas, primarily focused on road travel vs. air.
  5. Roth IRA conversion calculator (dqydj); Nice tool to show if you should convert, and how to do it.
  6. NVR BORD (The Retirement Manifesto); Very cute.
  7. Its OK to spend your savings (she picks up pennies); Another article that supports the idea that life is for living – don’t spend all your time being frugal – enjoy the journey along the way. https://shepicksuppennies.com/its-ok-to-spend-your-savings/
  8. My four goals (the humble dollar); good article on someone approaching retirement, and the goals they have for their money as they “ease into” retirement.
  9. How Rich people go broke (A Wealth of common sense); How do folks like Robert DeNiro lose all their money? What are the mistakes rich people make that cause them to lose it?
  10. The Most Vulnerable Cities (The Irrelevant Investor); The difference between having businesses that need employees on site vs. work that can be done remotely. Also, the variety of businesses vs. “one trick pony” cities.

TKD Woodworking is “Open for Business”

Going on Etsy for TKD Woodworking      

Well, I’ve gone through a lot of steps to prepare for selling my product as part of a side hustle

As per my planned timeline, its time to put my product online and begin selling. I started with Etsy, going online with my store on July 9th . I’ve got four (4) items in the store (two cutting boards, two picture frames) and I’m working on a fifth (tea box). So far, no sales (its been a week, and competition on Etsy is pretty fierce), but we’ll see.

Getting setup on Etsy isn’t hard and the costs are fairly moderate to market online. Unfortunately, the Chinese Corona Virus has put a “crimp” on any craft shows I might have been able to attend. We will see how this goes.

Overall, a positive step, in my opinion.

Hope things are going well with your plans for the second half of 2020.

Read more

Mr. 39 Months

Have you changed your asset allocation?

I tend to re-balance every six months (In July and January). Re-balancing – make it regular and timely. Its helped save me some money (I didn’t suffer as much in Feb/Mar as others, as I took a share of my stock increases for 2019 and purchased bonds with them). So now its July and time to re-balance again.

Now, 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

I have found in the first six months of 2020 that my bonds were up to around 33% of my investments, while my REITS were down around 15%, and the stocks were lower as well. Usually, I’d just rebalance everything to the numbers above, and be “on my way.”

However, the Chinese Covid virus and the market volatility had me thinking. The “Fed” (US Federal Reserve Board) in an attempt to keep the market afloat, has dramatically dropped interest rates, and begun buying debt again. The result is that, as before, savers got punished and folks looking to increase their debt could find easy money. It thus made bonds less attractive, as any new debt issued is going to be at lower interest rates for the foreseeable future.

What is someone to do as they close in on retirement? Typically you pull money away from the volatile market and embrace safer investment alternatives – but you can’t do that with rates this low. I’ve tried experimenting with an income account for years, and I just can’t make it work with dividends. So I am stuck, like so many others, in shifting my allocation to more stocks.

In early July, I returned to the allocation that we had for most of the last 20 years:

  • 20% Index bond funds
  • 20% S&P 500 Index
  • 20% Small Cap Index
  • 20% International stocks index
  • 20% REITS index

Based on my previous horrible timing, I’m assuming we’ll have a stock collapse in the next 3 months, so be ready.

Have you made any changes to your investment allocations recently, based on current events?

Read more

Mr. 39 Months

Saturday Linkage

7/11/2020

  1. Joining a Cult: The Financial Independence Counterculture (the physician Philosopher); One of us, one of us…
  2. Slow down … FIRE is not a race (Budgets are Sexy); Goes over the concept of “Coast FIRE” where you reach a point that you don’t have to continue to contribute to your retirement accounts, and eventually you will ge there. So do work you enjoy that just pays the current bills.
  3. My Thoughts on the “Passive Investing Bubble” (Early Retirement Now); Could all the folks investing in the S&P500 be creating a bubble?
  4. The Complete Guide to Withdrawing Funds Early From Your 401(k), IRA and Roth IRA  (MinaFI): Good discussion on ways for folks to access their retirement accounts prior to 59-1/2.
  5. Debt Freedom Doesn’t equal wealth (Budgetnistablog); It’s a step along the path
  6. States Without Income Tax: Is There a Benefit to Moving?  (you be three); States have to make their money somehow – so depending on your stage in life, the different states tax codes can help or hinder you.
  7. The Paradox of Thrift While Choosing Financial Independence  (medimentary); People save for a future purchase, an experience, or to maintain a certain lifestyle in the future.
  8. 15 Deep Insights about Death to Understand the Meaning of Life & Live Fully Alive  (slow.co) Some interesting observations, brought on by the death of a beloved pet.
  9. The Bear Market in Happiness  (a wealth of common sense); Common sense thoughts on finding happiness, especially in the age of Chinese Covid-19
  10. Five Milestones You Must Reach Before You Retire  (Retirement Manifesto); Some key things you must know/have done before you can be ready to retire.