https://www.theretirementmanifesto.com/a-94-year-old-couple-share-the-secrets-of-a-great-retirement/
“Blame Storming”
One of the things I am not going to miss about the corporate culture is the need to CYA (cover your “butt”) whenever a mistake is made somewhere. It seems in today’s US corporations, they’ve got almost all the “fat” out of the company, resulting is most folks doing 2X to 3X the amount of work done previously, while not receiving any extra pay. With the unemployment rate as low as it is, its very difficult to fill the holes in your department. So you end up having to do even more additional work while the HR department and upper management look for the magical unicorn that has all the skills you want, and will only be looking for low enough wages to fit into a wage “band” that was made 5 years ago and only been raised to match inflation.
At the same time, the company expects 100% perfect work, and any mistake is jumped on and used as an excuse to not provide as big a pay raise or bonus to the workers . Or to place you on some sort of disciplinary status, so you are walking around in fear, and willing to work extra hard so you don’t potentially get canned.
Just recently, I had a situation at my work where a rack project had a major problem in it. It was determined that the piece of lift equipment used to fill the top level did not reach high enough. I designed it for a new piece of equipment, the standard one that we have been buying for several years, which would work. It turns out, in order to save money, the decision was made to use older pieces of equipment that were available, instead of buying new. The result – we have to take the rack partially apart and reset it.
Let the “Blame Storming” (instead of Brainstorming) begin!
The question now is to find out when this decision was made, was it communicated (it wasn’t to me) and who is ultimately responsible for the mess.
Luckily, I’m pretty well defended – I designed it to the standard, and one of the reasons we have standards is to avoid this kind of thing. The emails between the other involved parties have been flowing fast & furious, though! It irritates me that folks will now spend countless hours going back through old emails and trying to fashion a defense so they can shift the blame for this.
It’s a miss. We can try to put in a fix for it to prevent it from happening, but mistakes are going to be made, especially at the pace that the company has been going through (we’ve had twice as many of these projects in 4th quarter this year vs. the average). One of the reasons, I guess, that I (and so many others) are pursuing FI.
So, have you had to shift blame lately in your day time job?
Mr. 39 Months
Investment Update Dec 2019
Only 7 months to go!
US Markets continue to drive forward at an epic pace, making 2019 once of the best years on record for stocks. For those market timers who jumped out of the market at the end of December’s larger drop, they’ve probably missed out on some strong returns. It once again goes to show that the buy and hold strategy of “steady as she goes” will probably win out in the end. When the next downturn happens – and it will – make sure you keep your money in the market, keep your allocation, and keep investing!
As you know, 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.
S&P was up about +3.6%, Small cap +4.5%, and International +1.1%. Real Estate and Bonds were down about-0.3%, so they didn’t hurt much, but also didn’t help. Still, a very strong environment, and my retirement accounts were up about 1.8% all total, for the month.
My dividend account allocation is:
- 25% Dividend Stocks
- 25% REITs
- 50% Bond Index Funds
This account got smacked hard, as it is heavily invested in Bonds and REITs, the two categories that got hurt last month. Several of my dividend stocks did poorly as well (Cisco was down -4.6%). Its almost time for year-end dividends to come out as well (some are already paying out) so that may further drive down the stock and REITs.
The “fun money” account did very well, up a little over 4%, after a very strong rally for my PAWZ ETF. Its been suffering for almost six months, but picked November to rally back and almost get to even. Both the Value and Extended Market had strong gains as well.
For November, I’m up 1.62% (after 1.5% in October). For the year, even though I’m 30% Bonds for the most part, I’m up 18.56%. Time to make a few “end of year” moves before time runs out. See my previous link in reference to end of year moves.
Hope your November was good, and everyone was Thankful!
Mr. 39 Months
Good post at Go Curry Cracker on Year end financial “to dos”
Gratitude
Well, it is the Thanksgiving season in the US, and one of the key holidays of the year has come and gone. I have noticed that Thanksgiving, a holiday dedicated to gratitude for the year, seems to be a primarily American holiday, not in keeping with a lot of other countries. Yes, just about every culture has a “harvest festival” where you celebrate a good harvest and the opportunity of plenty. However, Thanksgiving in the US is more than that – its focus is around “counting your blessings,” being with family, and acknowledging how well we actually do have it in this life.
I know one of the key parts of my daily ritual is the Five Minute Journal, which asks you at the start of your day to write out three (3) things that you are grateful for, and at the end of the day, to list three (3) amazing things that happened to you that day. The idea is to make you realize how good you actually have it, both right as you start the day, and right before you head to bed. The result should be an increased sense of happiness and well-being, and I have to say it has helped me a lot (in addition to my readings in stoicism).
So what are you grateful for in your life?
For me, I am grateful for:
- My loving wife of 33+ years, Mrs. 39 Months
- My family (Mother, brothers, sisters, nieces & nephews)
- My health (had a few health scares, and know folks who are in bad shape, so very grateful for this)
- My chance to earn a good living, and to enjoy the fruits of my labor
- My country (in my opinion, best country to live in the world)
Everyone can look at their lives and find things they are grateful for, and I urge all of you in this holiday season to look at your life and constantly give thanks for the blessings you have.
Mr. 39 Months
Financial Advisor meeting #4 – Sad Trombone….
I’ve included several posts about our recent meetings with a financial advisor
As I noted previously, Mrs. 39 Months doesn’t trust my numbers, and wants to get a second opinion. By involving a third party, I’ve been able to get Mrs. 39 Months to provide more information on how she sees our FI journey going, her spending expectations, etc. Its been well worth it in that respect. We finished our 4th meeting with the financial advisor late last week, and the results, to say the least, were very disappointing to me.
The “basic” plan we asked him to work up for us had me working for an additional 4 years (instead of “retiring” at 56, assume we continue to work till I’m 60 and Mrs. 39 Months was 62). He came back with the analysis, and it showed us running out of our liquid assets around age 95/97. We’d still have the fully paid off house to use as a reverse mortgage, but his analysis showed us just barely scraping by. Sad Trombone (wah, wha!)
Well, I didn’t really take this sitting down, as I knew the assumptions put into the analysis drove a lot of this. I’d tried to get advance copies of his analysis (at least the base one) in advance, but I wasn’t able to. So I started picking it apart there in the middle of the meeting. Some of his assumptions:
- Spending of $90K in the first year – even though we gave him a budget of $72K (plus taxes), he had some assumptions in there that pushed the first year’s spending to $90K
- Inflation of 3.25%. Seems a little high compared to the last ten years, but I won’t argue
- Medical inflation of 6.5%. I think this actually is good, based on the past
Yet the big assumption that pushed this out was the return on investment of various investment classes. They got their data from Morningstar, which is reporting the following returns, by class, to be used for planning purposes. Note that these are total returns, including inflation:
- Large Cap Growth Equity (top 1,000 of Russel for growth): +5.02%
- Large Cap Value Equity (top 1,000 of Russel for value): +6.08%
- Mid Cap Equity (smallest 800 of Russel 1,000): +6.06%
- Small Cap Equity (Russel 2,000): 7.24%
- US REITs: 7,59%
- International Equity: 7.59%
- Emerging Markets Equity: 7.26%
- Long-Term Bonds: 3.4%
- Intermediate Term Bonds: 3.69%
- Short-Term Bonds: 3.48%
- High Yield Bonds: 6.07%
- International Bonds: 2.73%
- Cash: 2.68%
Holy cow! The S&P500 has returned roughly 10% for the last century, but I’m supposed to base my retirement on it only returning half that for the next 40 years? International Equity is going to be US equity, even though its been getting its but kicked for years now? Cash at 2.68%, even though its been trading at crap levels for over a decade? I just don’t see the sense in these numbers. Apparently the thought is that we’re about to head into a period of serious investment non-performance, like the decade long period after 1929, 1965 and 2000. I’m just not sure this is correct.
I’ve asked them to re-run the analysis based on the $72K a year in expenses. I think we are going to go round & around on the returns assumptions in the analysis. Not sure how I’ll handle this.
We are going to have some further discussions. I’ll let everyone know how that goes.
Did you ever wonder…..
Life if full of mysteries and part of the joy of life is exploring them and trying to find out the answers. Some of crazy complicated, and you can never figure them out (ex. The human heart and its emotions). Some it just takes some real world experience to identify why things are.
I have always contributed to my retirement savings on a regular basis, through payroll deductions either to my 401K, or through monthly payments to my IRA. I think I have been doing since my first post-military job. Even when I was a young lieutenant making $25,657/year, we were putting away almost $1,000/month in savings (Note that this was because we were on military base housing, so rent & utilities were paid for).
I always wondered why you could contribute to your IRA all the way into April of the following year – i.e. I could be putting money into my IRA for 2018 as late as April 2019. Could even deduct it on my taxes, as if I had already done it (though you would get into a lot of trouble if you said you would to the IRS, but did not). Yet, I asked why people would wait until the following year, and miss the benefits of a year of growth, and the potential upside of dollar cost averaging. Did not make sense to me.
Well, as of this year, I finally figured out why. I stumbled on it when we did our Roth conversion last year, and I discovered that we had overdone it, and because our income was now too high, we could do our regular monthly ROTH investments. I had to pull that money back and place it in our normal IRAs. Ouch! Major paperwork issue – though it has been sorted out.
Therefore, I stopped contributing monthly to our Roth IRAs, and instead put the money into our normal, post-tax investments. Fast forward to November, and we are considering doing a smaller ($40k) Roth rollover. Why so small? Because if we do more, it may dump us over the threshold of being able to contribute. Therefore, we are going to keep it at $40K, and then, when we do our taxes in early 2020, we will see if we can contribute to our Roth for 2019.
Thus, in March of 2020, I will be contributing funds to my 2019 Roth IRA. Now I know why.
Mr. 39 Months
Year of Saying “Yes”
A very good article from Leftover Dollars on their “Year of Saying Yes.” Basically, they had a loved one who passed away after an illness of 2-1/2 years. That person had lead a rough life, without a lot of funds, and at the end, even when they had the opportunity, they chose not to spend money or time trying to experience or enjoy parts of their life that they had expressed an interest in. They maintained their “I don’t have enough money” attitude all the way up to the end.
Leftover Dollar noted that the experience of watching this “played a huge role in my FIRE journey.” Because of LD’s childhood, she was a natural saver and very frugal, so even as things went well and money became available, purchases and lifestyle inflation was put off, due to a fear of being broke “and scared of the chaos that ensues when the money runs out at the wrong time.”
I’m not sure how many folks in the FIRE community pursue it due to deep emotions on poverty and not having enough money (probably a significant portion). In this case, LD used her loved one’s final situation as motivation to start “saying yes” to all the things she wanted to do, but had been holding out on. She sought out a new job because she didn’t enjoy her current one. She traveled, visited old friend, and embraced life. “Basically, whenever an opportunity arose that I really felt would enrich my life or satiate some longstanding curiosity, is said yes. I acknowledged that I could afford it and made it fit into my budget.”
Its an excellent read, and I suggest you take a look if you have the time.
How many of us are holding back while pursuing FI, trying to put in that last dollar into our retirement funds? How many things have you passed up, even though you wanted to? While I definitely don’t embrace the “YOLO” lifestyle (you only live once), Mrs. 39 Months and I have done our share of traveling, spending and generally enjoying life. I came late to the FIRE movement – I only got to saving 40%+ of my income in the last couple of years. Before that, it was more like 20%.
Still, I find as we get closer, I’ve had the urge to say “yes” to a lot more. Once we hit our FI goal (8 more months?) I plan on saying “yes” a lot more often.
How about you?
Mr. 39 Months
Burnout – how to deal with it
Full Time Finance and Chief Mom Officer have interesting articles out on Burnout, the idea that at certain times of your life, the issues of work, family, finances, etc. combine to push you towards the edge (and sometimes over it) – and your body and mind naturally seek ways to relieve the pressure and keep you from exploding (or dying). It is a big problem is our world, though folks have been dealing with stress and burnout for millennia. It just seems to be something new due to the fast pace of life and due to the fact that it is happening to you!
Burnout is one of the major reasons folks get on the FIRE wagon, as they seek to escape from the stress and move towards a better life. It is only through later reading that newcomers to our community learn that the secret to success in early retirement is to be retiring “to” something, not “from” something.
Chief Mom Officer laid out her four stages of burnout:
- Exhaustion
- Shame and Doubt
- Cynicism or Callousness
- Crisis
Anyone that has been following the blog knows that I was reaching the point of burnout at the end of last year. I was well past #1 and #2, and pushing #3. My writing took a darker turn, and the issues I had with my work and my boss definitely affected my home life, my writing, and my happiness. I was seriously considering resigning from a lucrative position, in which I enjoyed the work (just not the boss).
I was fortunate to have a supportive spouse (one of the reasons why you should always have friends and family to talk to, and who see you regularly – so they can tell you if you are acting differently). Luckily, I was able to renegotiate the position, and my company put someone above me between the problem boss and me. So far, it has worked well, and I have continued to do well in the role.
Full Time Finance notes some of the causes for burnout (primarily work related causes) are:
- Overwork
- Poor treatment and neglect
- Insufficient challenge (an odd one, but one he explains well)
I am sure there are others involved that folks could name.
The key is to be on the lookout, identify when you are suffering burnout, determine the cause and try to create the change needed to deal with it. It is not easy, especially in our dog-eat-dog world, but your emotional and physical health may depend on it.
Good luck out there!
Mr. 39 Months
Frugal Tip – Another instance of doing some of your own home repairs
In light of my recent failure to take care of my home items, I thought I would take the chance to show that, yes I can do stuff around the house that helps keep our costs down. Doing your own home repair work and home maintenance is an excellent way to reduce your costs, live frugally, and learn some skills that you could, conceivably, turn into a side hustle as you move towards FI.
In this case, one of our toilets has been slowly leaking over time, leading to small amounts of water on the floor. This has caused some issues with the trim, and if not dealt with, could cause issues with the subfloor/flooring as we move forward. Better to jump on this now when the issue is minor.
My brother in law was a handyman/carpenter for most of his adult life, and I had the chance to work with him for a couple of months when I have first gotten out of the military. One of the things he told me was that replacing a toilet was easy, and once you had replaced three, you knew everything you needed to know and could do it with ease. “The problem is that most folks never replace three toilets in their lifetime” he said. He also commented that this was true with most home repairs/fixes – installing flooring, cabinetry, etc.
There is a great wealth of information through books and on the internet in reference to home repairs, so I’d urge everyone to consider it before they pay someone a lot of money to do some of the basic stuff.
In my case, I went and bought a $150 toilet at the local home repair store, about $40 of additional items needed, and read a bit on how to do it (I’ve replaced one before, but wanted to catch back up). Then it was on to the process.
- Turn off supply & drain the tank
- Remove nuts, lift off tank and toilet bowl
- Put wax seal on new toilet and install on floor with washer & nuts
- Attach tank and hardware (don’t tighten too much)
- Re-attach supply, fill tank & test for leaks
- Attach the toilet seat
Overall, the process was done in about an hour, and so far no issues. Saved probably $250 in the cost for a plumber to do it – it wasn’t very complicated. You just had to be willing to get a little dirty (not with crap, but with the wax seal, water, etc.)
Any experiences on your part doing home handyman work?
Mr. 39 Months