Saturday Linkage:


  1. Acadia National Park – The Adventure Continues (Reflections around the Campfire); Time to get outdoors!
  2. 20 Ways to Save on Health Care (Kiplingers); Some good ideas & I need to concentrate on these once I retire early
  3. The Essex County cupboard project: recessed front stiles (Peter Follansbee); I really love hand tool woodworking
  4. Experiential Learning (Paul Sellers); Excellent article on how wood is milled into boards, and how the different methods yield different strengths of wood
  5. How to Pack a Backpack for Backpacking (Art of Manliness); One of my many hobbies
  6. Revenge Spend: The Urge to Splurge (Budget Life List); We are all feeling this right now!
  7. Series I savings bonds: A safe investment with a high return (Get rich slowly); Inflation adjusted, earning better interest than savings.
  8. You Can Do Anything You Put Your Mind To (Retirement Manifesto); Simple Life lesson, but hard to apply
  9. When you have your dream job, you don’t spend a lot of time dreaming (Retire by 40);
  10. Award Travel Series: Two Player Mode (Go Curry Cracker); Once you’ve exhausted your opportunities with Chase 5/24 and American Express – use your spouse or significant other to get more!
  11. Six Important Reasons Not to Retire Early (Clipping Chains)

Are the 2020’s the decade of Value Stocks?

With all the craziness of the speculative stocks right now (AMC, Telsa, etc.) you would think that Growth stocks in the US were going to continue the dominance they’ve shown for the last 10+ years. The 10-year S&P return for the last 10 years was 13.6% annually vs. 10.32% for the Russel 1000 value index (VRVIX).

However, there is “growing” (ha ha) evidence that value stocks are getting ready to make a comeback (similar to what they were after the bust). You’ve seen me write about value trading in the past, and Kiplinger’s just came out with an article arguing that 2021 might be the year of value stocks.

One of the key arguments of the Kiplinger’s article is that low interest rates have a negative effect on value stocks in comparison to growth stocks (who can use the low interest rates to borrow cheaply and grow faster).

My value stock index fund (VVIAX) has grown an average of 13.54% annually over the last 5 years vs. my S&P Index has growth an average of 17.13% annually over the last 5 years. However, for year-to-datte, it has reversed: Value 18.18% vs S&P 13.84% – even as certain speculative stocks have skyrocketed.

I’d like to think that undervalued stocks (energy, utilities, etc.) are going to do better in the next decade. I’ll continue to put them as part of my portfolio, and I hope you’ll consider them as well.

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Mr. 39 Months

Sunday Linkage:


Sorry its a day late

  1. Finding Happiness Once You Leave the Rat Race (Route to Retire); Nice article on how to transition once you retire.
  2. Early Retirement Invisibility: The Getting Over Yourself Transition (Leisure Freak); A lot of hard charging, Type A FIRE folks have this issue when they first start out.
  3. Redefining Rich: How Minimalism Leads to a More Meaningful Life (Nosidebar); “Building a life full ow what makes you come alive”
  4. Speculation: A Game You Can’t Win (More to That); BitCoin and other speculations.
  5. The Modern Trap of Turning Hobbies Into Hustles (Repeller); Something I’ve done with TKD Woodworking – I hope I don’t regret it.
  6. My Uncle Died Without a Will – And It Was a Nightmare (Young and Thrifty); One of your first steps along your FIRE journey should be to get this sort of documentation done.
  7. Should Investors be worried about US Government Debt? (Evidence Investor); The article says no, but I say Yes!
  8. Beating inflation versus hedging against inflation (Monevator); Evaluation of various items vs. inflation.
  9. When to sell a stock: 7 tips for getting out at the right time (Think Save Retire); Good to know when to “punch out”
  10. Diversifying with Online Real Estate Investments (Retire by 40); Another way to invest in the real estate boom
  11. Prepping Tasks Around the House (Othalafeu); Get ready for the Zombie Apocalypse

Investment Update June 2021

Well the market and our investments continue to move up overall, with the typical ups & downs by investment class. We continue to be on track with what we are looking to add in 2021, and our allocation plan has not really changed. Like a lot of folks in the FIRE community, once you get everything set up, automated and regular, it gets a little boring. Kinda “Steady as she goes.”

Our allocation remains pretty much the same as when I set it back at the beginning of the year, and back in 2020:

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

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

Overall, our investment classes performed as follows:

  • Bonds were up about 0.7%
  • S&P was up 0.7%%
  • International was ups 3.2%%
  • Small Cap up 0.1%
  • REIT Index up 0.8%

I also have a Vanguard value fund (VVIAX) where I put in my after-tax investment money. That was up 2.9% for the month. I’ve been seeing a lot of articles of Value funds and ETFs doing better than the S&P500 – I guess we’ll see. I may do some additional research and write about this in the future.

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

  • 50% Dividend Stocks
  • 50% REITs

The dividend paying stocks were up an average of 1.8%, and the REITS were down an average of -1.6%, so we’re roughly even for the month of May.

One of the things I did this month was shift my automatic investment amount from my Vanguard Value fund to savings. Its my intention to do a Roth conversion of some funds from my regular IRA to my Roth by the end of the year – because I believe taxes are going up in 2022. I want to try to shift as much as possible into the ROTH, and I’ll be using the money I normally put into investments to pay the taxes on the conversion.

Hope everyone is healthy and your market returns for the rest of the year go up!

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Mr. 39 Months

Saturday Linkage:


  1. Where Would You Rather Be A Digital Nomad? Tuscany, Italy Or Jacksonville, Florida (Costa Rica FIRE); Geo-arbitrage can take you a long way towards FIRE.  
  2. Best EVER Offer on Chase Sapphire Preferred: Our Top Recommended Card (Travel Miles 101); For those who like to play the credit card awards game.
  3. Roth IRA Basics: 11 Things You Must Know (Kiplingers)
  4. Retiring early on $500,000 (Early Retirement Extreme); Originally posted in 2009, he goes through his investments and cash flow strategy once retired.
  5. The 15 Best Real Estate Investing Strategies (Coach Carson); For those interested in it. I’d like to get into it, haven’t had the chance yet.
  6. Styling Life (Paul Sellers); Musings from a woodworker with over 40+ years of hand tool and teaching experience.
  7. 11 Best Monthly Dividend Stocks and Funds to Buy (Kiplingers); Some significant yields, as much as 8% – mostly from REITS. 21
  8. The top 5 ways I was able to reach a mid-6 Figure Net worth (Life Outside the Maze); Some fairly basic, some not so much – good read.
  9. The Power of Pocket Pads (Art of Manliness); I’ve almost always got my binder to take notes.
  10. Financial Hygiene: Clean the Green (Budget Life List); The things she does on a regular basis to “clean” her financial life and keep on track
  11. Collins on Crypto (JL Collins); I’m not a fan – it really is just speculating, not investing.

Some success in my quest to improve friendships…..

I wrote recently about reading the book “We should hang out” and the issue with middle-aged men losing their friendships and having enhanced feelings of loneliness. Since then, I’ve made it a point to reach out to past friends and talk with them on the phone, and to seek out friends from 30+ years ago (High School, College, first job, etc.). Its been an interesting experience.

I can say, however, that I had a major success story this week. One of my best friends for the last 25 years (we shared several similar hobbies and our wives became friends as well) had moved away to Chicago about 10 years ago for work, and while we’ve kept somewhat in touch, it has only been along the lines of 1 call a year. I visited about 7 years ago during a work trip, but not since then.

Well, I’ve been reaching out roughly every 3-4 weeks now by phone, and we’ve had some good conversations and gotten back in touch over the last 3 months. During the memorial day weekend, he was visiting his parents (they just retired in their mid-70s) and he drove up 120 miles to visit his daughter. He took the opportunity to cross the river and see us, talk on our back deck, and then have dinner with us. I honestly think that if we hadn’t been talking somewhat over the last several months, he might have just spent that extra time with his daughter, or tried to drive back home to Chicago.

It was great seeing him again, and both Mrs. 39 Months and I had a good time.

So don’t be afraid to reach out to folks – you might get surprised.

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Mr. 39 Months

Saturday Linkage:


  1. Will There Be a Buyer’s Housing Market in 2021? (The Simple Dollar); In my opinion – No.
  2. The Emergency Fund: It’s Still Useless! (Early Retirement Now); I disagree wholeheartedly – for many people, the emergency fund is a critical first step towards FI.
  3. 10 Steps to Make Sure You Have Enough Money to Retire (Retirement Manifesto); Step-by-step to confirm you’ll have enough.
  4. The Many Different Paths To Financial Independence (banker on fire); short summary of some common FI strategies.
  5. Is Now the Time To Cash Out Some Home Equity? (A wealth of common sense); Sure, go ahead and pull it out and spend it on vacations, jet skis, etc. Its not like your house can suddenly lose 50% of its value….
  6. What’s really important in life? How trade-offs help us decide (No More Weekdays); Interesting method ofr setting priorities.
  7. How to separate your self worth from your professional life (Tis but a moment); For my generation, this is a major danger.
  8. The Ideal Length Of Time To Own A Car Is Not Forever (Financial Samurai); I kinda disagree with this. I’ve owned four cars in my life, and drove two of them till they fell apart on the side of the road. I prefer to buy new, and then maintain them to last forever. Current pair of our cars are 14 and 11 years old.
  9. Has There Ever Been a Worse Time to Be a Homebuyer? (A wealth of Common Sense): I think the mid-1980s was pretty bad. The 1970s inflation had driven up the price of homes well past what folks could afford, and in order to tame inflation, the Fed jacked up interest rates to unbelievable numbers. We had a friend with an 18% loan rate!
  10. Simple Living is a Ton Better Than Complex Living (Filled with Money); All things in moderation – including simplicity.
  11. If Retiring at 30 is Scary, then Retiring at 60 is Terrifying (A Trip of a lifestyle); This assumes that, if things go bad, you can always get a new job at age 40 vs. trying to find a job at 70.

How Big is Your Emergency Fund?

Early Retirement Now had a post out about the continued uselessness of an emergency fund. He discussed how they kept all their funds in an equity index fund portfolio, with only $1K – $2K in a checking account. They assumed they’d use credit cards and/or Home Equity Line of Credit (HELOC) “if any larger expenses came up that exceeded my monthly cash flow, e.g., car and home repairs, medical bills, etc.”

The general comment back in 2016 was “my point here, I most definitely advocate stashing a large pile of money. I simply advocate for moving all that money into an investment with high expected returns, ideally equities, instead of letting the money languish in a money market account at 0.03% interest.”

The plan, if something went wrong, is:

  • Use credit cards, with a long “float” of interest free loan
  • Use the HELOC to pay for the credit card if the issue continues for longer
  • Only sell investments if they have to – but they’ll have had years of  positive growth to offset selling at a loss

I think this argument falls into the “sleep at night” problem. The issue here is there are so many people now investing and in the FIRE movement that weren’t very aware during the 2000 and 2008 recessions, or remember the 1970 “stagflation” period (where the market went nowhere for 10+ years).

Let’s look at some holes in the plan.

  1. Assumption that credit extended will continue to be extended: Just because you have credit cards now, doesn’t mean they will issue you new ones, or not close down your existing ones (or at least reduce what you can borrow). A HELOC can be pulled back as well. Suddenly, you’ve got no credit – and you’ve got to sell investments
  2. For this sort of credit crunch, think the 2008 recession. How was the market doing at this time? 50% drop in value, erasing everything gained back to 2000, and even before that. In 1968-1970 the market dropped 35.9%, and never regained its numbers till 1982.

I also think the creation of an emergency fund is the first step in working towards FI. It could be $500 or $1000 (the number in ERN’s checking) but by building on that, you reach the point where you can shrug off medium level issues.

In ERNs defense, he does end his article stating that folks should not leave their emergency fund in the market if they are retired, or within 2-5 years of retirement.

Earlier in the year, I pulled money out of bonds and put it in the dividend stocks – only to turn around within 30 days because I just couldn’t sleep at night. It’s a personal choice, and you need to do what makes sense for you.

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Mr. 39 Months

Saturday Linkage:


  1. To be more tech-savvy, borrow these strategies from the Amish (psyche); Excellent article about making conscious decisions on what Tech to use, and what not to.
  2. How Much House Can I Afford? (Simple Dollar); I still go by “The Millionaire Next Door” philosophy – don’t take out a home loan (i.e. house price – your down payment) for more that 2X your salary if you want to become wealthy.
  3. How to Help Loved Ones Financially (Morningstar); I always treat is as a gift, and assume I won’t get it back. Better that way.
  4. How to Sell Your House Yourself Without a Realtor (Well kept wallet); Not sure if I would do this – a good realtor does a lot of work for you.
  5. The home sales boom means you might end up renting (Recode); I always suggest you rent for at least a year when you move somewhere, so you can be sure of where you want to buy a home.
  6. Ten Tips for a Minimalist Wardrobe (Noisebar); While I am not a minimalist, I probably could stand to reduce my wardrobe some. I’ve got a lot of clothes I never wear.
  7. My $100 a month, 3000 calories a day food budget breakdown (Reddit); As you retire, you will find food becoming a major expense.
  8. How Do You Get Rich? Slowly, and Then Suddenly (Benlefort): Yep, that’s how it was with us.
  9. Why Coast FIRE should be the goal: an example (Financial Chain Breakers); Reach the point where you don’t have to save any more, just keep it where it is till retirement age.
  10. The real cost of owning a car (But Wait, there’s less); We still plan on owning, but then again, we have a 14 year old and an 11 year old car – with no signs of trading them in.
  11. Did HGTV Ruin the Housing Market For Millennials? (A Wealth of Common Sense); I used to be addicted to HGTV.

Performance vs. Retirement Budget for 2020

I’ve posted in the past how we went to a financial analyst near the end of 2019 to review our financial status and determine if/when we could retire early. Mrs. 39 Months didn’t completely trust my numbers and assumptions, and wanted a second opinion. While I didn’t agree with many of the assumptions of the analysis (investment returns, etc.) I still think the analysis was valuable overall, and it helped me adjust my plans. Part of the analysis was detailed income and expense information for each year, from 2020 – 2028.

Fast forward a year later, and I’ve taken the opportunity to compare our planned spend vs. our actual spending of the retirement budget. I’d encourage everyone to try their retirement budget out 1-2 years before actual retirement. So what did I find out:

Major overspending vs. budget

  • Home Maintenance was 176% higher. Some of this was due to purchases (lawnmower, pressure washer) and some of it was services that I could conceivable do if retired (vs. hiring a landscaper). Still. Something to consider
  • Electricity/Gas: 93% higher. Could have been us staying home for Covid, but we dramatcically underpriced this.
  • Groceries: 23% higher – probably because of eating more at home (see my allowance below)
  • Floor Insurance: 509% higher. Though only $430, it still is a large % change.
  • Charity: Our retirement budget is only $240, and if we have extra at end, we’d give. We gave away $6,000 last year. Felt good, especially when folks needed help for Covid

Major underspending vs budget

  • Auto Fuel: 56% lower. No commuting during Covid, but we also won’t be doing this when we retire
  • Mr. 39 Months allowance: 41% lower. A lot of this is used for food at work, so we’ll see
  • Dining Out: 54% lower – due to Covid
  • Hobbies: 49% lower – may be able to save some money here

Final result was that we spent about $11K less in 2020 than expected. In the end, I think the Covid close-down was an excellent chance for us to look at our retirement budget and do some deep analysis on it. We’ll be making changes on it going forward.

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Mr. 39 Months