Reaching FIRE through Company Business Trips

For some folks, our work requires us to travel, either by car or by plane, to other parts of the country, where we perform our job duties. This travel can be both a pain and an additional source of income. I wanted to discuss some of the financial advantages of corporate travel, and how someone seeking financial independence can benefit from it.

Extra Salary

For the corporate world, travel is seen as a burden, something which has to be done, but which causes a hardship on the employee. Many folks have spouses or significant others, children, pets, etc. These have to be taken care of while the worker is “on the road,” which causes stress and problems for the worker. Because of this, companies are willing to pay extra for workers who are “willing to travel” and this can be quite lucrative.

I knew two engineers who graduated the same year, same school, and same degree. One got a job as an engineer locally, and was offered $50K/year + benefits. The other got a job with a consulting firm that required 90% travel – so they offered her $70K/year + benefits, and she got to take advantage of all the “travel hacking” that you have seen in the FIRE community. A 40% bonus just because, at 22, she got to enjoy all sorts of travel throughout the US.

Extra Income

Often you get the opportunity to gain extra income while traveling. This primarily is done by being offered a stipend for travel. Companies use stipends because it is easier to budget for travel that way. An example would be a food stipend, where, instead of you submitting receipts from restaurants, the company just gives you an amount of money each day to pay for your food – for example, $45/day. If you stay at a hotel that serves breakfast and eat/drink reasonably, you can pocket the remaining money as extra income.

I’ve seen companies pay for just the airline travel, and put in a stipend for the hotel, food, car, etc. Since a lot of travel is done by corporate execs, these stipends can be rather large, because the execs don’t want to stay at a Motel 6. You can take full advantage of this and make some dough.

Another form of extra income is the auto mileage. Most companies have a standard rate per mile that they will pay you for business travel, to cover fuel and maintenance of your car. This is based on an average mid-size car, with average gas mileage and maintenance costs. If you have a more fuel-efficient car (like most FIRE folks who judge purchases on things like that) or a car with less maintenance costs (maybe you do some of it yourself to save $) you can book some significant extra income from a company’s mileage reimbursement

Reduced Expenses

This is the area where you can get real “bang” for your travels. By taking time to be somewhere else, somewhere that a company is paying you to be, you can significantly reduce your expenses – all money that goes tax free to your bottom line. Some examples:

  • Home: If you travel extensively and are single, then there is no reason to get a large place to live, or buy expensive items for it – You won’t be there most of the time! Get a smaller place, furnish it sufficiently to take care of your needs, and pocket that money for the next several years. Keep the heat/AC turned down as well.
  • Auto: Instead of having to pay for fuel, tolls and maintenance to commute to/from work, your car sits and doesn’t cost you this. Maybe you don’t even need a car at all, and can just get by with Uber/Lyft and a bike?
  • Food: For periods of time, the food is on the company, so you can save on your food bill.
  • Entertainment: Again, your company is paying for you to be at another place, so you aren’t spending money on a lot of entertainment options during the week

All of these are ways to drop money into your FIRE accounts and get there earlier than expected.

Negatives of business travel

The reason that companies pay more for folks who travel is because it does suck at times. Sitting in airports or driving long distances, being away from family, strange hotels, strange food, etc. This can all wear on a person over time and that is why many folks do it for short “spurts” of a few years, and then move to a job with less or no travel. This is especially prevalent when someone wants to start a family. I have a peer who consulted for 4 years, and did 95% travel. Woke up early Monday morning, kissed his wife, on the road Mon-Fri, and got back late Friday night. He joked that he was a “weekend husband.” He finally joined my company when they wanted to have kids, and now travels about 25% = 30%. They just had their second child and are much happier.

I always told my students when I was counselling them on a job search to put “willing to travel” on the bottom of their resume. If you are young and want to make some money fast, consider extensive travel. Even if it isn’t for you, take the opportunity to do some travel for your company and pocket some additional funds to help you on your way to financial independence.

 

Any good road stories out there?

 

Mr. 39 Months

Monthly update – Nov 2017

Keeping it rolling, only 32 months from Financial Independence!

While September was a good month (1.26% gain), my October was kind of “middle of the road”, with a 0.47% growth. I started the month with $946K of invested assets (not counting savings), put $4,108 into my various accounts (401K, Roth IRA, brokerage), and ended with $953K. For the year, all total, I am still up around 8.26% (September really helped push me up)

Bonds and REITs were down a little in October (-0.3%), while the equity markets were up (+2.3%). My dividend portfolio (from my dad’s inherited IRA) is down -1.4%, and my value portfolio is down -3.2%. So again, my ability to pick stocks individually does not come close to matching the index fund investing method.

In the value portfolio

  • CSS Industries stock was up 4.2% for the month, and about 7.7% since I bought them a couple of months ago
  • Gilead lost -7.5% in October, but is still up 10.3% for the year
  • Taho lost -8.9%, and is down 13.7% for the year
  • Overall result of value investing play ytd is 1.8% for the last 4 months, or 7.2% annualized. Still not competing with the index funds.

For November, 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

Hope your Halloween was scary and exciting!

 

Mr. 39 Months.

Christmas Presents?

Many of us have skills and talents that we take for granted, hobbies that we have that bring us joy, just for the sake of doing. Mrs. 39 Months likes to knit and play the dulcimer. My younger brother has a CCR (computer controlled router) that lets him carve all sorts of things he can design on his computer. My older brother is an accomplished photographer, with an incredible gift to get beautiful pictures with limited, inexpensive equipment.

At a certain point in our lives, we stop needing “things” from other people, and its more the “thought that counts” when we are getting gifts. Often the gifts just sit there, unused, but we do remember that someone thought of us at the time. In that case, why not use your talent or interest to create a gift, instead of contributing to the consumer treadmill? It will save you money, and show folks you were willing to spend more than 5 minutes on them.

For me, I am an amateur woodworker, and I found a nice design for something small, but useful. I also had some old wood that has been sitting in the shop for several years, in the form of logs (my friend had a tree cut down, sawed up, and when he moved, he gave them to me).

So now I get to joint & plane the wood, cut it to size, create the joinery and complete the design. I should be able to get 8-10 presents out of this, which should satisfy us for most of the crew this year. It should take me about 4 weeks of off-and-on work to complete, so I have gotten started.

What do you guys do for presents? Anybody doing something really interesting this year that you would like to share?

 

Mr. 39 Months

Gone Fishin……

Actually, Mrs. 39 Months and I have taken a week off to visit North Carolina.

She is attending a Dulcimer conference, and I am scouting out potential sites to move to after we hit our FI goals. Geoarbitrage, baby!

This is Chimney rock, NC – quite a hike to get up and out there.

This is Hendersonville NC, a nice town with a thriving downtown and lots of shops, coffee houses and restaurants. Potential new home?

Hope everyone is enjoying the fall weather.

Mr 39 Months

Your Greatest Financial Decision

There is always discussion in the FIRE community about the way to pick stocks, the way to travel hack, or the way to reduce your overall expenses to more easily obtain financial independence. This is the “meat and potatoes” of the FIRE community, and like most of you, I really enjoy people’s thoughts, opinions, struggles and successes here.

I wanted to take the time today, to talk about what I believe is the most important financial decision that you will ever make, especially if you are seeking financial independence. That decision is your choice of spouse/partner.

I can’t tell you how many times I have heard/read interviews of FIRE folks, and they answer back “my spouse is more frugal that I am.” It’s that level of frugality, working together towards a goal that enables most of us to hit out financial independence goals, especially those who hit it in the 30s and 40s. There is a common theme you often here about folks dating/marrying – that you end up with your opposite (you are outgoing and they are more laid back, you like to spend and they are frugal, etc.). If you run into this and don’t discuss it before you get too serious, it could lead to all sorts of problems in the long-term relationship. In terms of FI, it could derail your plans.

There have been stories of prospective spouses who have called off the wedding, due to finding out how much in debt their partner is in. Depending on where you live, you could be responsible for some of the debts, and at a minimum, excessive debt by one of the partners will impact their ability to contribute to the finances of the couple.

Like many of you, I was lucky enough to marry someone who is more frugal that I am. I was always the one who ran the checkbook down to the lowest amount possible – even as I was automatically saving money in my 401K and IRA. My wife likes cash, so she has a significant amount of money in a savings account (not even CDs!). Still, this keeps her stress down, and I just treat that as our emergency fund/cash reserve and put my money entirely into other investment vehicles.

It’s worked for us for 31 years (with some bumps), but we certainly wouldn’t be where we are now (33 months away from FI) if I had married a “spendy” woman. I have friends and coworkers with spouses that like to spend (both male & female) and it certainly causes stress and affects their relationship.

So make sure you talk about finances to your prospective spouse, and ensure you are both on the “same sheet of music” in terms of your financial goals.

One last thing – if you are already married, and you’ve got significant money invested saved, and you overhear your spouse say “It costs $40, but I am not sure I want to pay that much” – give them a big hug and tell them you love them. They are helping you on your way to Financial Independence.

Mr. 39 Months

So what is your savings rate?

And what is the trend of our savings?

I finally got the savings bug big-time around the age of 36, in the year 2000. Up till then, I had only invested money in the 401K to meet a company match (typically 3% – 4%). I was focused on increasing my income, in order to pay for the normal things of life, as I understood them (house, car, etc.). By 1999 I had finally reached the point where my salary was paying for everything, without incurring additional debt.

Then in 2000 I scored a major pay increase (about 20%) when moving to another company. At the same time, the market tanked, and the money I did have in a 401K/Roth IRA seemed to evaporate overnight. I knew then, that I had to really get serious.

At that time, the word was to save 10% of your income – but I knew that since I was starting late (age 36) I needed to add more. I started around 10%, but immediately pushed to max out my 401K. The goal was to get to 20%, and eventually higher.  Note that this is on the gross pay (i.e. before taxes are taken out) so it gets harder as you make more money.

Year Savings Rate 5-year Trend
2000 9.9%
2001 10.5%
2002 12.5%
2003 14.5%
2004 16.5% 12.8%
2005 18.4% 14.5%
2006 18.2% 16.1%
2007 16.3% 16.8%
2008 14.6% 16.8%
2009 21.7% 17.9%
2010 21.6% 18.5%
2011 31.1% 21.1%
2012 16.2% 21.1%
2013 19.9% 22.1%
2014 19.2% 21.6%
2015 25.4% 22.4%
2016 29.8% 22.1%
2017 30.1% 24.9%

After ten years, I had paid off almost all my debt (just house) and was saving around 30%. I took a slight dip in 2012, because I took a pay cut my company’s 401K didn’t allow me to put in very much. I chose to concentrate on paying down the mortgage and getting debt free.

Well, I’m finally back to 30%, and based on some monetary movement, I should be able to bump it up to 40% in 2018. I’m proud of my trend over the last 17+ years, and the fact that I’m set to be financially independent (without counting on Social Security) in 2020.

So how has your savings rate trend been?

 

Mr. 39 Months

 

Diminishing Friendships in Retirement?

I was listening to one of my financial podcasts, Stacking Benjamin’s, and on one of their recent shows, and their guest was talking about early retirement and issues that many folks don’t think about. One of the more interesting ones (and one that I have thought about a lot as I get closer) is the social aspect of work, and how that might leave a hole when a person retires.

For most folks it is the people at work who form their social circle (outside their immediate family). These are the folks they see every day, talk with at the coffee machine, and discuss last night’s TV show or game. You get to know their families, trials and tribulations, and life stories. These people are the “village” you have to live in for 8+ hours a day – and it is often the thought of leaving these folks (and moving to another “village”) that keeps people in the same job for years. I know that is one of the major things keeping my sister-in-law still working.

It has been noted that folks often have a hard time getting new friends (or keeping old ones) as they age. People drift apart, both geographically and in their interests. Men often have a particularly difficult time of this, and sometimes have no friends they can turn to in their later years.

I’ve joined several organizations (outdoors, woodworking, professional society) in order to try and get out. As I look to achieve financial independence, I know I am going to have to work hard to be more outgoing, and seek stronger friendships with folks in my interest groups. It won’t be easy – but it is a challenge worth the trouble.

How are you folks preparing or working on this?

 

Mr. 39 Months

Financial Update – Disaster File

 

If you remember back in July, I realized that I had to update our personal files, or our “Disaster Files.” This was the files showing investments, wills, titles, etc. Often folks do this once every so often (many times after a family member passes away) and then let it lie fallow till the next “emergency.” Yep, I was one of those folks, having not touched it since 2013. In my previous post I attached a couple of helpful documents that I hope folks find useful.

It’s been a bit of a “slog” as I have worked my way through, but here is where I am at the beginning of the 4th qtr.

No Description
1 Update Master List from 2013
2 Send Master list to Mrs. 39 Months
3 Price out updating wills
4 Redo filing cabinet with Master List & Disaster file #1
5 Household budget folder (budget goals, income statement, balance sheet, income/expense forecasts)
6 Housing Information (Title, insurance, receipts for work, property taxes)
7 Online passwords
8 Location of keys to safe deposit box – Mrs. 39 Months drawer
9 Credit records: Resolution of past debts (auto, home)
10 Home Insurance Policy
11 Net Worth’s 2009 to present
12 Annual updates for Jan 1, 2017 into investments
13 Investments (list of accounts, goal planning, annual balance sheet)
14 Taxes: Tax records for previous year, current year documents
15 Personal background info (Education, personal history, resume)
16 Credit: Resolution papers of past debts, credit card names, numbers & 1-800 number
17 Health insurance (Booklet from work, health history, medications, etc.)
18 Life Insurance (Insurance policies, etc.)
19 Safe Deposit: Title to Mrs. 39 Month’s auto, DD214, NY and KY marriage certificate, letter of last instructions, copy of will, personal property inventory, negatives of personal property, passports, old passports, Mrs. 39 Months’s birth certificate, Mr. 39 Months’s birth certificate, Mr. 39 Months’s SS card)
20 Letter of Last Instructions
21 latest credit report
22 Auto Info: Insurance coverage, policies, auto registration, repair/maintenance records
23 Instruction letter (where to find everything, computer passwords, etc.)
24 Setup dates for regular updates to the files (so I never have to do this again) – Jan 1 of each year

The hardest one to date what the letter of last instructions. It is here that you really start feeling your age and realize that it could end. You need to determine funeral arrangements, where to be buried, etc. It really does make you think. Still, it’s done and I have it in a fairly obvious place in the house, and have let key folks know where to find it.

So what do I have left?

1 Updated list of personal property
2 Pictures of personal property
3 Guarantees & warranties (appliances, cars, etc.)

The pictures of personal property actually might end up being a video (room by room) and description. Often these are better than just pictures. Guarantees & warranties may be something that I just start assembling as we purchase items, and stick in place.

I will probably start working on these in the New Year, as part of my “Jan 1” plan. I hope you folks are also doing some of the “slog” work that you need to do for FI.

Good luck!

 

Mr. 39 months.

 

 

 

 

 

Investment update – October 4, 2017

Okay, 33 months left till Financial Independence!

Overall, my investments were up $11,752 for September, a gain of 1.26%, which isn’t too shabby. Big gainers appeared to be Small Cap funds and the S&P500 funds. Internationals did OK as well. The bond funds and REITs continued to underperform, though not significantly enough to drive my results down. I remain happy with my current allocation in my 401Ks/IRAs:

  • 30% Bond intermediate Index Fund
  • 17.5% S&P 500 Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% International Index Fund
  • 17.5% REIT Index Fund

My father’s Inherited IRA, which I set up with an eye towards income, has returned 3.3% in dividends on an annual basis, and has gone up 0.9% for the quarter. While not as big a move as the S&P, Small Cap and International, I believe this portfolio is a lot more “stable” so I will continue to experiment with it for income.

 

My “fun money” account, which I use to try to value invest, has pretty much stayed even. The values have dropped somewhat, but this has been offset by dividends. I’m still excited about the potential for growth here, as some of my picks are dramatically undervalued. I just have to be patient.

 

Hope your October trick or treating goes well!

 

Mr. 39 Months.