Walking through Antique Stores

             

One of the more interesting idea in the US is the idea of going “antiquing.” This is where you go visit certain parts of the country near you that have an abundance of antique shops, and see if there is something you might like to buy from someone else’s leftover “stuff.”

I had the opportunity to be a “roady” again for Mrs. 39 Months at a dulcimer festival near Asheville NC. Asheville and the surrounding area is a wonderful, mountainous region, plenty of outdoor activities, fall colors, and a general “funky” attitude (lots of coffee shops, music venues, art exhibits, etc.). It is one of the areas that we are considering retiring too, especially since a lot of my family is just over the mountains in TN (2-hour drive away).

Asheville also has a large amount of antique shops/stores – big warehouses of space with little 10’x10’ and 20’x20’ sections walled off, where dealers have put out large collections of old items, mostly bought at estate sales and moving sales. You would think that the advent of eBay and other on-line purchasing systems might have put a crunch into this, but it does not appear to have.

It is always fascinating to walk around in these and see items that you may have purchased in the past (especially toys) that now are listed as “antiques.” It is fun to remember playing with the toys as a kid, reading some of the books/magazines you had, or remembering some of the other items that were part of your life that you happen to come across there.

It also brings out a bit of sadness/awareness when you see a family’s prized possessions now laid out, and fetching pennies on the dollar for what they paid for. As I walked around, I saw lots of furniture, many collectables, and many items that you know someone spent a lifetime collecting and enjoying. Now it is sitting in an old tobacco warehouse waiting for someone to show interest. It made me realize again that the accumulation of “stuff” does not necessarily make you happy, and probably is going to go fill up a landfill or sit in a warehouse.

For me, I was looking for old woodworking tools to purchase cheap, fix up, and then re-use. I figured at least that would do honor to some long-lost woodworker who used the items. Trying to keep the old crafts alive.

Mr. 39 Months.

Excellent post from Go Curry Cracker on 2000 and 2008 retiree status

We’ve all seen the articles and data on ‘sequence of return risk’ where, depending on how the markets do in the first couple of years of retirement, you can be in great shape, or you can be in a world of hurt.

Go Curry Cracker has spent the time to do the numbers on how things are going for folks that retired right around the time of our two most recent “crashes.” An excellent read!

How are the 2000 and 2008 retirees doing?

I know there is a lot of talk about a pending recession in the US. All I can say is, its going to happen sometime, so don’t panic too much. Stick with your plan, and be flexible depending on the market.

Mr. 39 Months

Financial Advisor meeting #2

As you remember, I wrote how Mrs. 39 Months does not trust my numbers, and wanted us to meet with a professional financial advisor to bounce my numbers off of and to go through various scenarios. She is very conservative and concerned that we will run out of money. Longevity runs in her family (her aunt lived to 102, and the rest of the women on her side lived into their 80s and 90s). Therefore, I understand her concern – all my planning assumes she lives to 99 (and I live to 97).  

Some folks have asked about the fee we are paying for the advice. He is a fee-only planner, though he does manage some folk’s investments for a 1% per year fee. The fee he is charging us, for a New Jersey suburb of Philadelphia, is a flat $2,900. When we first engaged him, the financial advisor stated that it would be for four (4) meetings. The agenda appears to be something like:

  • Meeting 1: Share with advisor our info (typically in hard copy form, though I gave him ours electronically)
  • Meeting 2: Clarification of numbers, budget, situation, etc. Opportunity for the advisor to ask questions and get answers prior to doing the work, and to share some of his planning assumptions with us
  • Meeting 3: Sharing of the plan and some base scenarios that we have asked for him to run. After review, give him ideas for other scenarios to run
  • Meeting 4: Final meeting to run through any alternate scenarios, finalize the plan, determine next steps

He has also said we could come back “every so often” to update it, since it is already in his system. I am assuming there is a small fee for his work, but not sure.

I was hopeful that, since we gave him all our data electronically in advance, we might have jumped past meeting #2 and gone straight to #3. I wanted to get ahold of the three-ring binder with the big plan and analysis in it! I wanted to look at his planning and compare it to mine (and potentially share it with everyone here). No such luck.

Our planner had been dealing with some family issues (he’s the only child and his mother had to go to hospital for extended stay and many tests) so he was not able to really do the analysis. He still had a few questions and thoughts he wanted to share with us as well. So, no binder, not deep analysis. Still, some of the planning points that he shared/we worked out:

  • Inflation assumption: 3.25% – a little higher than the past 10+ years, but historically accurate in our lifetimes
  • Inflation for medical: 6% – very accurate historically, and something I didn’t consider in my initial planning
  • No inheritance planned – my mother is well off after a life of frugal living and excellent planning. However, we assume we won’t get anything (again, staying conservative with Mrs. 39 Months)
  • Changed the life assumptions from 90 years old to 99 and 97 (see above)
  • Discussed scenarios to look at, including immediate retirement, retire on my schedule of July 2020, and retire when I hit 60 and Mrs. 39 Months hits 62.

There were a few other clarifying questions and for the most part, we are making very conservative estimates and plans. While I am a little more willing to plan “to the edge” of retirement, I do not think we will go that route.

One of the biggest benefits to this is that it has gotten Mrs. 39 Months to open up with her thoughts about retirement, budgets, lifestyle and plans. Despite my prodding over the last several years, she really has not opened up too much about it – until we started to have these meetings. Now we have created a budget, discussed travel and lifestyle, and started working some of the details out. Mrs. 39 Months commented to me after the second meeting that it was a strange thought that, even in our conservative planning, retirement was just 4 years away.

The fact that this is enabling us to discuss it this way is worth the $2,900 fee alone, even if we did not get any analysis.

I will let folks know after we have our third meeting (late October) how that is going. In the meantime, I hope all your plans work out.

Mr. 39 Months.

Quarterly Update

Quarterly Update

October 2019

Well, it’s early October, and as fall hits, I wanted to look at my goals for 2019, and try and figure out where I needed to “sprint it in” in order to get some done. Only 3 months to go before the end of the year.

My Goals for 2019 (some financial, some not):

Finance:

  • Save $75K in tax-advantaged accounts (saved almost $81K in 2018). 401K, Roth IRA, etc. Dropped this down a bit, due to a need to plus up my savings/emergency fund. Key part of this is using my company’s deferred savings account to push money out till I hit FI. Since the deferred account money will have to be withdrawn (and taxed) when I leave, it actually is a pretty cool FIRE solution for saving. Grade A. Saved $68K so far this year, so I’m in good shape to hit this goal, provided I continue to save at my current rate.
  • Save $5K in regular accounts (compared to $9K in 2017). This will go into my brokerage account. I withdrew a hunk of this to do my ROTH rollover (part of the “power of zero” philosophy). But I still have some bucks here. I have to take about $5K from my father’s IRA every year, so I just move it from there to my brokerage account instead f spending it). Grade A. Made the deposit in January
  • Increase dividend income from all accounts to $27K/year (compared to 26K in 2018). Grade A: Dividends year-to-date at $19,667, so should easily be able to hit $27K.
  • Passive income covers 40% of base living expenses in retirement (it was38% in 2018). My long-term goal is to get my dividend/passive income up to where it covers over 100% of my expected retirement living expenses, so my investments can continue to grow.  Grade B: I’m at 36.4% for the year vs. expected $18K/quarter budget. I usually get a big bump in 4th qtr, so it will be close
  • Beat net worth growth rate of 6% (it was -1.9% in 2018). This is my historical growth rate for the last 10+ years, so I want to beat my average. Grade A: Should be in the double-digits for the year, unless the market dramatically tanks. I’m up 14% in my investments, and they are the lion’s share (75%) of our net worth.  

Business:

  • Continue attending regular meetings of my local real estate investors association. They hold a regular monthly meeting, a monthly meeting for new investors, and a monthly meeting for my specific county. All three could be interesting, and it’s free for a paid member. Last year I attended, but it was spotty. Grade F: Did a cost/benefit analysis and deep look on my intentions to do real estate in the near future. Decided to drop out of REIA.
  • Double the number of blog visitors in 2019. Last year it was a little over 6,000. I want to get at least 12,000 this year, so I need to put myself out there more (i.e. comment) and write interesting topics. My thanks to everyone who stopped by, and I try to return the favor, and comment as well. Grade D. Only have around 5,700 visitors in the first 3 quarters. On track to beat my 6K visitors in 2018, but not by much. Probably need to spend more time on other blogs, commenting, etc.
  • Write/publish a book on finance.  I wrote one for new graduates in 2017, but I have identified an area of the community which hasn’t been served as well in the past. Hopefully I can assist with something here.  I’ve got the first five chapters outlined/partially done, but still have a ways to go. Grade F. I’m about 2/3 of the way done with the outline, but it doesn’t look like it will be done this year.

Personal:

  • Increase weight lifted by 10% from 2018. Due to my illness, I didn’t make much progress beyond that, but I’m back to full strength now, and lifting what I was in September 2018.  I want to continue to improve my strength as I get older, instead of just wasting away. Grade A. Weight increase of 10% already, and looking like I’ll bump it up another 5% before the end of the year
  • Average 2 hours of cardio per week (currently averaging about an hour). Again, want to improve my fitness. Based on my lifestyle, I don’t think I can push it past 2 hours per week. Grade C. New company HQ is allowing me to take daily walks of 20 min/day, so it looks like I might hit this.
  • Take part in at least one long bike ride, like MS bike-a-thon (80 miles). Didn’t do this last year, but really want to try. Grade F: Chose not to do this in 2019
  • Backpack over 100 miles on AT (did around 80 miles in 2018). Other aspects of life interfered with my ability to get on the trail. Really want to push it this year. Grade C: Getting further away from home, so its hard to get in miles. Got 82 miles in.
  • Continue volunteering at Pennsbury Manor at their joiner’s shop (woodworking). Really enjoyed this. Grade A: Continuing to volunteer at least once a month. Just completed my last one for the year.
  • Reduce weight by 20 lbs. from Jan 2019 (lost 2 lbs. in 2018). Again, I want to get in better shape as I get closer to financial independence. Grade D: Have only been able to maintain weight, haven’t really reduced it. I like sweets too much
  • Read at least one book a month. I surpassed this goal in 2018, and re-learned the joy of reading. Grade A. I got another five books under my belt for 3rd qtr.

Travel:

  • Visit a national park (visited two in 2018) Incomplete. Planning on doing this in October
  • Visit family in Tennessee, Vermont and New York. Family is very important to me. One of the things I am looking forward to with financial independence is the opportunity to visit family more often. Need to get up to see my brother in Vermont. Grade A: Visited family in TN, VT, NY. Getting back to TN in October.
  • Take a week at the shore and just relax. Too many of our vacations are spent running around. I want to see if I can go somewhere (in this case the beach) and just sit and relax. Grade A. Did a nice weekend at the shore in July , though it was pretty hot.
  • Visit Ellis Island. Wanted to do this in 2018, but didn’t make it. As 50% Czech from immigrant great grandparents from the turn of the century, I believe they went through there, and I want to see it Grade F. Its only 90 min north of us, but we haven’t gone yet.
  • Go on an international trip. Not sure which one (Canada, Caribbean, etc.) but I’d like to get out this year. Grade F: Doesn’t look like I’ll do it this year.  
  • Visit the Asheville NC area. It’s one of the areas that we are considering retiring to (close to my old home in Tennessee, interesting crafts, shops & outdoor sports, etc.). Trying to learn more about the area (we’ve been there a couple of times). Incomplete. Still on track to go in October

Overall, I’d give myself a B. Got a lot done, but still have some left to do.  

How are you going on your goals for 2019?

Mr. 39 Months

Update on my income account

As many of you know, I’ve used my father’s inherited IRA to experiment with an income producing method of investing similar to the “old school” way that folks invested their money after retirement. This was laid out in Ben Stein’s book “Yes, you can become a successful income investor.” The idea was to create a method to generate enough income from the portfolio to live off of, without touching the principal (thereby letting it grow).

I detailed in a later post that, for the last 2-1/2 years, the stretch IRA was beating my vanguard allocation. I did note that this took into account the terrible 2018 year, which beat the Vanguard account down more than the income account. Over time, all my reading shows that the Vanguard account would do better – but be more volatile.

For the last three months, the account has not increase that much in value, but it has continued to throw off dividends. Investment value grew $2,194 for the six months (while the market was pretty stagnant), 1.7% (or 6.7% annual growth) while also throwing off $1,256.94 in dividends – the equivalent of 3.75% annual yield.

stock Details 1-Jul 1-Oct Yield Dividend
CVX Chevron $6,222.00 $5,614.50 4.24% $59.50
CSCO Cisco Systems $8,209.50 $6,984.00 3.01% $52.50
HR Healthcare Realty $7,830.00 $8,312.00 3.61% $75.00
PFF iShares $16,766.75 $16,912.35 5.24% $221.49
O Realty Income Corp (REIT) $6,897.00 $7,673.00 3.54% $67.95
SVC Hospitality Properties Trust $7,500.00 $7,498.50 8.64% $162.00
UMH UMH Properties $7,446.00 $8,622.00 5.01% $108.00
VZ Verizon $5,713.00 $5,891.00 4.09% $60.25
VBTLX Vanguard Total Bond Market Index $32,621.94 $33,248.71 2.69% $223.25
VBILX Vanguard Int-term Bond Index $32,787.96 $33,432.51 2.72% $227.00
$131,994.15 $134,188.57 3.75% $1,256.94

Not too shabby! Basically, its close to hitting the 4% withdrawal figure, while still growing sufficiently to keep up with inflation. What is interesting is that, while the stocks declined a lot (look at Chevron & Cisco) the other items (REITs,  bonds) helped to cushion the blow.

I’ll continue to monitor and see how this goes.

Mr. 39 Months

Investment Update Oct 2019

Only 9 months to go!

I’ll have my quarterly update on goals later, but thought I’d get my investment update out earlier. It was a fairly good month, and as my previous post on asset allocation noted, different investments are up this month vs. last month – but I am up overall, both for the month, and especially for the year!

The allocation for my retirement accounts (IRAs, 401K, etc) is pretty much index funds, spread out between the  S&P 500, small-cap, international, REITs and bonds.

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

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

Stocks were up (S&P +1.9%, International +3.1%, Small Cap +1.5%) and REITs did well (+1.9%). Bonds were down -0.7% (though they were up last month). International was a surprise, as its been lagging for several years now. Good things to come? Overall, my retirement accounts were up 1.4% for the month.

My dividend account allocation is:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

My individual stocks and REITs were up significantly (over 4%) while the bonds were only down a little. Overall, the income portfolio was up 3.8% for September, including dividends. I’m going to be interested in how it compares to my overall portfolio. Could the income portfolio beat out again in 2019?

The “fun money” account is primarily Value and extended market, and was up about 2.4%. I continue to invest in this one regularly each month, with leftover funds.

For September, I was up 1.17% overall, and I’m up 14.71% for the year. Continuing to plow along as I approach that magical FI moment.

Hope your September was good, and your October is even better!

Mr. 39 Months

Mrs. 39 Months Doesn’t Trust My Numbers…..

I have a wonderful marriage with a great wife who has supported me throughout 33 years of fun. I always talk about how brave she was for marrying me when I was 22, just graduating, and didn’t have much in the bank. A lot of potential, but pretty raw. We met in August, starting dating 5 months later in January, and then I proposed in May (5 months after we started dating). Six months after that, we were married and heading to Germany for a five-year tour with the US Army. Think about that – starts dating in January, and in December of that same year, she is married and leaving her family and country behind. That takes some guts (and a lot of trust).

As we have gotten closer to FI (ten months!) I have been talking it up a great deal, hitting our “number” and asking her what she wants to do once we get there. She has been patient, but not too forthcoming with her own ideas on what she wants to do once we hit it.

She finally expressed some doubts about how I had done the calculations, and if we actually would achieve FI. She is very conservative with her money (see some of my previous posts) and prefers to be 100% sure. We had gone to a retirement presentation about six months ago at our local library, and the financial analyst/counsellor who presented impressed us both. He seemed to concentrate more on the five years leading up to retirement and post-retirement, more than the “accumulation” phase that so many financial advisors do.

Some folks might have been put off (or grumpy) about having someone else go over your work and numbers, and potentially critique your information. I saw this as an opportunity to draw out Mrs. 39 Months into answering some questions, especially in terms of prospective spending/budget in retirement, travel and spending ideas for the first 3-5 years, and general thoughts on early retirement. This would be an excellent opportunity to get everything out on the table and share our views for the future years.

I went into the meeting fairly confident in my own numbers, but interested in seeing it from the analyst’s viewpoint. He had a laundry list of information that he needed, including:

No Description
1 2018 Income Tax Return
2 Payroll Statement: Mr. 39 Month
3 Payroll Statement: Mrs. 39 Month
4 Pension Info: Mrs. 39 Month
5 Mr. 39 Month’s 401K Statement
6 Mr. 39 Month’s Deferred Statement
7 Mrs. 39 Month’s IRA Statement
8 Mr. 39 Month’s IRA Statement
9 USAA brokerage account statements
10 Mrs. 39 Month’s Bank account statement
11 USAA Bank account statement
12 Mr. 39 Month’s Social Security Statement
13 Mrs. 39 Month’s Social Security Statement
14 Life Insurance (Mr. 39 Month’s)
15 Work Life Insurance (Mr. 39 Month)
16 Work Life Insurance (Mrs. 39 Month)
17 Health Insurance
18 Auto Insurance
19 Homeowner’s Insurance
20 Umbrella Insurance

As you can see, there is a laundry list of items, which shows the thoroughness of the analysis. Its going to cost us $2,900 for the analysis and four sessions (initial one, rollout of base analysis, two follow-up sessions where we deal with “what if” scenarios). The analyst also provides some annual updates for a small fee.

I’m excited to see what comes of this. Our next session is in 3 weeks, so I’ll let you know.

Mr. 39 Months

Frugal Fail – Not taking care of your stuff

Members of the FI community are always looking for ways to cut expenses and costs, without jeopardizing their lifestyle. For many, it’s a source of pride that they can be as frugal as possible, while still enjoying life. Here at Mr. 39 Months, I’ve worked hard to get our expenses in line, generate a surplus, and then use that surplus to move us towards our goal – financial independence.

As part of that, I do a lot of my own stuff around the house (home repairs & remodeling, gardening, shopping, and moving the lawn). Its in mowing the lawn where I had my “frugal fail.”

The yard needed mowing this week, so out came the mower, I gassed it up, and got ready to go. We only have about ¼ acre of ground, so its less than an hours worth of work. Still, it saves my $75/month during the season (the basic cost of a lawn service). So off I went…..

Unfortunately, I had not taken the time to check the oil – and in fact I hadn’t checked it the last several times that I mowed the lawn. Everything went well for about 15 minutes, and then the machine just died on me. It completely stopped. When I tried to restart, the whole thing was frozen up – even the pull cord was stuck. Nothing.

It was then that I realized I hadn’t properly oiled it. When I checked it, it was bone dry (or pretty close). I had just ruined the motor on the thing.

I’ve taken it to a repair shop, even though I am pretty sure its toast. I hate the idea of just “junking” something and just buying new (our “throwaway” culture), and I have actually had the thing repaired once already when its transmission went (its pretty old). They are looking at it, but the prognosis isn’t good.

To get a mower that is the equivalent is roughly $400. I’ve heard that many people in the US can’t handle an emergency of $400 or more. While we can, it just goes to show you – take care of your stuff! It will save you a lot of money as you go through life.

Good Luck

Mr. 39 Months

What Does Your “Year 2” Look Like?

For most folks in the FIRE community, part of what motivates us is the free time we hope to have once we hit our “number.” Time to pursue other goals, hobbies, time with family & friends, etc. We look at the future and imagine all sorts of things we would be doing once the need for money is taken care of. Often this involves extensive travel (both in the home country and throughout the world). It can be very exciting.

Most folks have a long list of what they intend to do in their first year – but what are your plans for year 2? Once you have checked off all the immediate ideas and needs, and you are starting towards the long, daily “grind” of being financially independent, what is your life going to look like. It is this part of planning that many FIRE folks fall a little short of – yet it is here where we will be spending the vast majority of our time. How do we plan for year 2?

What are you passionate about?

One way is to ask yourself what are you really passionate about? What gets you out of bed in the morning, gets your blood flowing when you get the chance to do it. It may be volunteer work, working on your house or garden, a specific hobby, or spending time with your family. Take  the time to sit down and ponder/meditate on what you are passionate about and use that as a basis to plan your year 2 activities.

Not a race, not one answer

One of the mistakes folks make when they think about this is to believe that it is a one-time decision, and once they start down the road towards activities for year 2+, they will be stuck in it. Nothing is further from the truth. Almost everyone will have changing interests/passions over the next 10, 20, 30 years – as their life experiences change them. Look at what you want to do now, but don’t beat yourself up that you might change your mind. In the engineering world, its called “paralysis by analysis” where you keep analyzing without actually acting. Feel free to make a decision with the full knowledge that it isn’t going to commit you for the rest of your life.

Learn to enjoy the present

Typically, year 1 of FIRE is a frantic time, running around and doing all the things you’ve always wanted to do. Year 2 and beyond is much more about relaxing and enjoying the present in a more unstructured manner. Make sure that while planning year 2, that you don’t “over-plan” year 2. Leave yourself plenty of time to relax and just “enjoy the present.”

In the end, the primary benefit of hitting FIRE is you are given the “Gift of Time.” You should make some serious considerations of how you intend to use that time, once the initial “bloom” of retiring early is done. While you don’t need to being too crazy about analyzing it, take the opportunity to look into it.

Mr. 39 months

Friends

Came home the other day from work, and Mrs. 39 Months met me with the news. “John is in the hospital.”

John is one of our close friends in the area, and someone I have known for almost 30 years. We are the same age, and have many of the same interests, though lately his crafts and interests have tended to mirror more of what Mrs. 39 Months enjoys making.

John has been married for 20+ years, and while it has its difficulties, you can tell he loves his wife. Unfortunately, her health has deteriorated over the last five years to the point that she can barely walk for any length of time. This precludes a lot of activities and forces John to do a lot more work around the house, just to take care of her. She is under a doctor’s care for her ailments, and she does work to get better, but it is a struggle. John is a “giver” and while he complains about it at time, I think he enjoys the role of “white knight.”

Recently John’s allergies kicked up and got rather bad. He ended up overextending himself, and in the end, had to go to the hospital because he had come down with a severe case of bronchitis. This left him so weak he could barely move, and at the same time, he was not around to take care of his wife (her daughter assisted a bit).

We took the opportunity to go visit him for a couple of hours last night. He was still weak, and was probably going to be in the hospital for at least 2-3 more days. He knew he needed to rest, but worried that when he went home, he would end up exhausting himself with taking care of his wife. All we could do was volunteer to help, and let him know we were there for him.

It is interesting, as you get older. You realize that friends and family are the most important thing in your life. With FI, you can try to find more time for them, especially if they need it.

Mr. 39 months