Saturday Linkage:

11/27/2021

  1. Weekly Points: Highest Rakuten Bonus Ever, What Are Your Points Worth, Black Friday Sale To Hawaii and More! (Travel 101) Time to get out there!
  2. Four Ways To Use The ‘Great Resignation’ To Jumpstart Your FIRE Goals (Costa Rica Fire) Some good ideas on how to help move towards FIRE in these times
  3. Lack of intrinsic motivation will destroy your early retirement (Early Retirement Extreme) Excellent advice from one of the “old dogs” of FIRE
  4. Using Scraps (Paul Sellers) One of the curses of woodworking is we generate a lot of “offcuts” of wood that we don’t want to waste – but they build up!
  5. Nine ways to become more Courageous (Art of Manliness) Sound advice for everyone
  6. Life is a Positive Sum Game (the Escape Artist) Positive article about spreading the good news of FI
  7. Lessons Learned from 3 years Outside the Maze (Life Outside the Maze) It would be interesting to see a comparison of folks who did FIRE 2-3 years before Covid and the ones who did FIRE right as Covid hit.
  8. Dealing with Uncertainty in Retirement Calculations (Can I retire yet?) One of the issues all FI folks deal with in their journey
  9. So you wanna be a Stock Picker (The Irrelevant Investor) History has shown that I suck at picking stocks
  10. Are Bonds Done? (JL Collins) In the current environment, I think they are.
  11. A Prayer of Thanksgiving (Get Rich Slowly)

Happy Thanksgiving! What are you thankful for?

In the United States today, its Thanksgiving, a day based, supposedly, on the Pilgrims celebrating their harvest. Typically it is celebrated with family and friends, and folks come from out of town to be with parents/kids and remind themselves how good life can be. In these uncertain times, I think we all need this, and need to celebrate with our families. This year, we are getting together with my side of the family in Tennessee, after not really seeing each other for 3 years (we had to cancel last year).

So what are you thankful for?

For me, it’s a variety of things:

  1. I’m thankful for my good health, and the good health of everyone in my family. We’ve had friends who have lost loved ones this year (non-Covid) but luckily our families have been ok.
  2. I’m thankful for the fact that we are both still gainfully employed, earning money that helps further enhance our FI position. While we are “financially independent” we’ve chosen to continue to work at this time.
  3. I’m thankful for the friends we have, and the hobbies/crafts that we enjoy with them. As we transition to retirement, these are the areas that are going to keep us involved and active.
  4. I’m thankful for the fact that I live in the US. While it has a lot of problems, there are a tremendous number of reasons to rejoice in the opportunities the country provides, and the people that inhabit it. We really are blessed in this regard.

I hope everyone has a great Thanksgiving!

Mr. 39 Months

Saturday Linkage:

11/20/2021

  1. What’s your Why? (Tic Toc Life); Why pursue financial independence?
  2. Where Americans find meaning in life has changed over the past four years (Pew Research) Various ways that people seek meaning in life
  3. Ten 5-Minute Money Actions to Help Your Finances (Becoming Minimalist) Some basic, some inventive
  4. The Most Important Decision in Life (Of Dollars and Data) Your relationships will force so many of your financial decisions, so choose wisely
  5. No Such Thing as Enough Money (Incognito Money) One of the keys to happiness is to be satisfied with what you have. Envy really is one of the deadly sins.
  6. Happiness is pretty simple (5am Joel); Very simple
  7. Early Retirement Paycheck Ruminations (Freddy Smidlap); A discussion of some of the variety of ways and needs for a retirement paycheck 
  8. How much money do you really need to live off dividends? (Mr Free at 33); I just haven’t seen a way to do this.
  9. Does inflation matter if you’re frugal? (Government Worker FI); Yes, yes it does!
  10. Fire Movement: The Uncomfortable Truth (Geny Money)
  11. Should We Eat the Rich? Wealth Taxes and Inequality (Bravely Go). Wealth taxes are a horrible idea, and have caused the downfall of so many civilizations over time.

Hobbies – the path to an enriching retirement

I’ve written numerous times on the benefits of having hobbies both during your FI journey and after your retirement

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This last weekend, I took 3 days to travel to central Virginia, just south of Shenandoah National Park, to backpack about 17 miles on the Appalachian Trail. As I’ve written before, I enjoy the trips and the comradery of hiking with a group of friends. In this case, we had a rough time – not so much with the terrain but with the weather. It was supposed to be highs in the mid-40s and a low around freezing. It turned into a high of 40 and a low of 21, and we has 20 mph wind gusts the last night. We all struggled, but in the end we all (seven of us) got our safely and had some good stories (and a good campfire the last night)

As I hiked, I often thought about how long I could continue this hobby in retirement. While I have met 80 year olds on the trail, I know that this is rare. I think the best I can hope for (with my numerous minor leg issues) is to go to 70.

It has long been said that someone should retire “to” something, instead of “from” something, if you want to have an enjoyable retirement. So what are you looking to retire to? Most folks talk about travel once they retire, but that will only occupy so much time, for a certain number of years. Then what?

For me, I’ve been working on the following hobbies:

  • Backpacking
  • Woodworking (including building a side business)
  • Handyman/Home Remodel/Habitat for Humanity (an interest I’ve had for 30+ years)
  • Travel (primarily in the US, but some European sites)
  • Military History

I’d also like to start working on some things that will keep my mind nimble

  • Crosswords
  • Learning another language
  • Learning a musical instrument

I can see myself being very busy in the years after I retire, and I work through these. Hopefully I won’t be bored. I know in reading a lot of FIRE blogs that people have ended up busier in retirement than when they were working. That’s my goal.

So what are you planning to do once you retire? What are you doing now in preparation for it?

Mr. 39 Months

Continual Learning throughout your Life

Sorry I’m a day late – I got tied up with work, which took up some time.

Speaking of work, I’ve got some mandated training on a new database package that my company is using to download and analyze data for our prospective customers. As is typical in our day and age, we’ve been asked to become trained and certified by the end of the year. So I’m a little busy.

As you may be aware, I’m involved with third party logistics, which involves doing the trucking and warehousing of other customers product. Often the customers don’t have good data, or its “messy” and needs to  be massaged to be able to make good decisions on for equipment, personnel, etc. I was pleasantly surprised at this new package, and I’ve enjoyed learning it. Its going to save time and offer a lot more options.

That brought to mind the need to continually learn throughout life – not just when young, but throughout your lifetime. You need to work on keeping your mind flexible and keep interested I new things as you age. Many retirees use travel for this, but I also think people benefit from classroom learning, learning new languages, and just gaining new experiences throughout their life.

I’ve planned to take some home repair and basic plumbing classes in early 2022 at my local technical institute. I’m still taking some classes for my professional work and I’m interested in both learning a new language and a musical instrument. The whole idea is to keep learning into my 60s, 70s and 80s.

How are you working to keep learning throughout your life

Kevin

Saturday Linkage:

Sorry I wasn’t able to do the Saturday linkage last week. Got tied up and ran out of time.

11/6/2021

  1. Workers: Expect Higher Salaries and More Perks in 2022: (Kiplingers) The Great Resignation and Inflation are having an effect
  2. A Place for Everything (Including Certain Kinds of Work) (Art of Manliness)
  3. The Only 3 Expenses that Matter for Saving Serious Cash (Mr. Money Wizard) Housing, Transportation & Food. Still the bigger one is taxes!
  4. Lessons learned from 3 years outside the Maze (Life outside the maze) Good stories
  5. 60 Life List Ideas: An Adventurous Listicle (Budget Life List) Some ideas I might have to take up
  6. Even Zillow Can’t Trust Its Zestimates: How To Profit From Its Mistake (Financial Samurai) I want to invest in real estate, but the market is just too crazy
  7. How Much Time I Spend Managing Our Money (the Retirement Manifesto); Try to automate as much as possible
  8. 7 Ways to Reduce Money-Related Stress (Steve Adcock) As you approach FI, the stress will drop off.
  9. Aren’t You Bored in Retirement? (Route to Retire); Don’t retire away from something, retire to something
  10. The New Retirementality, Working in Retirement (ESI Money); My intention is to work to keep occupied and interested
  11. How to Protect Your Retirement from a Market Downturn (Kiplingers) Focus on your risk, have some “buffer” money in savings, and don’t make decisions based on emotions  

You Are Welcome…

Well, I wrote about the potential for me to be let go due to vaccination status, and my need to potentially “time the market” with my deferred income account. At the beginning of October, I noted that October was typically a bad time for stocks, and with the potential of the account being paid out in cash if I was let go meant that I might or might not get the stocks liquidated at an opportune time. Because of that, I chose to, at the beginning of October, to move it all out of mutual funds (S&P500, International, Small Cap, Bonds) and into pure cash.

As everyone knows, my previous attempts to “time the market” have been dismal failures. Well, October 2021 was no exception. I had left my IRAs and 401Ks invested for October, and instead of going down they went up +4.7% in one month. So my decision ended up meaning I missed out on an estimated $11K of gains if I had just left everything in place.

I’m sure everyone else pretty much left their investments in place, and gained the benefit of this increase. All I can say to that is – You are Welcome.

Hopefully I’ve learned my “time the market” lesson again, and this time it might stick. As of Nov 1, I put my deferred money back into the market.

Anyway, congratulations, and I hope you all have a profitable final two months of the year.

Mr. 39 Months

“One More Year” Syndrome

Well the Chinese Covid virus has caused a lot of issues in people’s work lives, mine included. My company was holding to a “everyone has to be vaccinated by Nov 18th” mandate, and stated that anyone not vaccinated might be subject to termination. I’m not an anit-vaxxer (I got my shingles vaccine earlier this year) but I do have some concerns with the RNA based vaccines coming out, primarily based on my military history with government vaccines and “Gulf War Syndrome” with some of my comrades.  We are hoping to get the Nova-vax when it comes out, hopefully in 4th Qtr 2021 or 1st Qtr 2022.

So what does this have to do with “One More Year” Syndrome? This is something folks in the FIRE community have talked about before. Physician On Fire notes that “To be afflicted with OMY syndrome is to continue working for “one more year” even though you’ve reached your financial goals, and no longer need the paycheck to make ends meet.” Many of us fall into this after we’ve reached our FI goals.

My company reached out to me with a proposal that I shift positions to a project engineer role, where I could work from home full time. It would not be a cut in pay, but it would decrease my bonus from 15% to 10%. I was a little surprised, because I didn’t think I was contributing that much, and wasn’t valued. As I’ve noted before, we have already hit our FI goal, so I wasn’t really sweating the Nov 18th date. Now with their offer, I have the potential of working “one more year” and further setting us up for our independence. So what do I do?

Benefits:

  • An extra 18+ months of salary & Investments (if I retire on my new date of July 2023)
  • Don’t have to begin drawing down our investments to live on
  • Continue to work at a job I find interesting (for the most part)
  • Continue to maintain medical benefits, as opposed to having to go on Cobra or the ACA marketplace
  • Can continue to develop my post-retirement interests, plans and bucket list

Minuses:

  • Still only have 3 weeks of vacation, so my free time is still severely restricted. No thru hike of the Appalachian trail in 2022!
  • Starting to develop my “side hustle” of TKD woodworking. Looking at other potential work (handyman, etc) that would have to be put on the backburner if I go in that direction
  • My mother is in her mid-80s and if she has medical issues, I’d have to request leave, as opposed to just having time to go visit whenever she needed it

Its an interesting question, and its one of the key benefits of FI, that you can actually compare and make a decision. I would hate to be in my late 50’s and still have to depend on work to make ends meet. All the hard work and saving for the past 20 years has put us in a great position.

I hope all of you either have or will be able to get this level of flexibility as you continue on your FI journey.

Mr. 39 Months

Saturday Linkage:

10/23/2021

  1. 25 Free Things To Do This Weekend (My Money Chronicles) Nice list
  2. The Art of Not Taking Things Personally (medium.dave) This is one of my major failings
  3. Americans Are Overworked And Over Work (Buzz Feed) The great resignation hits home
  4. What makes a job meaningful? (Brookings) Along the same line as above – I think a lot of folks are asking this question
  5. Time Heals Wounds (Humble Dollar); Investing over the long haul can help reduce the effects of a drop. Just give it time!
  6. Downsizing In Retirement: Any Regrets? (Can I retire yet?) I don’t know how much we’ll do this – Mrs. 39 Months is a bit of a pack rat
  7. The 60/40 portfolio: what the warning signs are telling us (Monevator) It may be underpowered for the long haul.
  8. When Do You Finally Feel Rich? It’s Not Always About The Money (Financial Samurai) Some deep and not-so-deep thoughts on the subject
  9. Only Focus on What You Can Control (Second Gen Finance) The true idea behind Stoicism
  10. A One Car Family (The Moneyaires) It can be done
  11. Worth vs. Worth It: Homeownership (Grumpus Maximus) “Owning brings certain loss. Renting guarantees it.”

Dividend Account results – 3rd Qtr 2021

Well, October is halfway done, and we are ¾ of the way through the y ear. If you’ve been reading my story, you know that this is an inherited IRA from my father, that I set up as a sort of “experiment” for an old-time dividend paying account, which would generate regular income – something a person could use once they retire.

I’ve had some ups & downs with it, and it has generated roughly 4% in dividends annually – but it hasn’t grown very much. Thus, in this era of growth fund investing and low interest rates, it hasn’t been able to generate the sort of returns necessary for someone to live off of in a long-term retirement. Still, its an interesting experiment, and good to know.

I started it back in 2016, and the fund was setup with 50% bonds, 25% dividend stocks and 25% REITs. After 2-1/2 years, I decided to divest from bonds, because with the low interest rates, they were only paying about 2% in dividends and dragging down the performance of the whole fund. Since then, its been a roughly 50/50 split.

In 2020, I started a “dog of the dow” investment strategy, where you purchase the 10 stocks with the highest yield on the Dow (i.e. their price vs. the dividend they are paying is lower). Its an old time strategy, and I’m not sure how its going to pay off long term. 2020 was a bad year for dividend stocks, but they’ve bounced back.

Now for the 3rd quarter, we generated roughly similar dividends to what was generated in 2nd quarter. The value of the fund on July 1 was $138K, and for October 1 it was $134.5K, so the account didn’t really grow (actually shrunk about 2.5%) while generating an annual 3.7% dividend rate. As I’ve stated before, this doesn’t appear to be a valid way to generate retirement income for the long haul. Whether this is due to low interest rates, poor performance from income stocks, or just generic poor performance from the “Dogs of the Dow” strategy, it still results in subpar performance vs. the needs for retirement.

Vanguard Stretch IRA
stockDetailsInvestment valueYieldDividend
AMGNAmgen$10,632.503.31%$88.00
CSCOCisco$8,164.502.72%$55.50
CVXChevron Corp$5,072.505.28%$67.00
DOWDow$5,756.004.86%$70.00
HRHealthcare Realty Trust$14,890.004.06%$151.25
IBMIBM$6,946.504.72%$82.00
KOCoca Cola Company$5,247.003.20%$42.00
MMM3M Company$8,771.003.37%$74.00
MRKMerck & Company$3,755.503.46%$32.50
ORealty Income Corp$12,972.004.35%$141.20
PFFIshares Preferred$10,245.174.54%$116.33
SVCService Properties TR$6,726.000.36%$6.00
UMHUMH Properties Inc$25,190.003.32%$209.00
VZVerizon$5,401.004.65%$62.75
WBAWalgreens$4,705.004.06%$47.75
$134,474.673.70%$1,245.28

The majority of our retirement money is tied into a normal mutual fund allocation, so this experiment hasn’t really set me back in my quest for financial independence. I’m thinking of winding this down at the end of 2021 or 2022 as I close in on my

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Mr. 39 Months