Author: Norm (page 1 of 14)

Retirement News: Republicans Want To Tax Your 401(k) Contributions

I know Mr. Money Mustache preaches the Low Information Diet. He thinks of the news as a huge timesuck that distracts from the things that really matter in life! And like Morrissey sings, “the news contrives to frighten you.” I like this in theory, but I’ve never been a good adherent of it. I’m pretty much a news junkie. I even have a digital subscription to the New York Times!

MMM says, “you too should be paying absolutely no attention the news.” But I’m here to tell you today that if early retirement is your goal, there is a news story that deserves your attention!

Bringing new meaning to the term “White House”

The New York Times reports that Republicans are considering a sharp cut in 401(k) contribution limits.  And a sharp cut it is. Right now, you can contribute a maximum of $18,000 per year to your 401(k). Under the new plan, the limit could be as low as $2,400. Yes, that is just over two thousand dollars! Anything over that will be taxed. And the converse is true. Instead of all of that money being taxed later in life upon withdrawl, when you are hopefully in a lower tax bracket, they will be taxed today at your higher rate.

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Cost Per Serving: Improved 5 Ingredient Granola Bars

Usually I do the grocery shopping by myself. I have a routine and go every Sunday. But recently Marge decided to come along. And as I often do, I bought a box of granola bars. I always like to have a box of these in my desk at work for a snack. I know it’s not the healthiest, but I’m not big into other, healthier shelf stable snacks like plain nuts, and boxes of granola bars are so easy.

But Marge said, “Those can’t be good. You should try making them yourself.” And suddenly I had a revelation. I should try to make them myself! Why hadn’t I thought of that? I’ve probably eaten hundreds of granola bars of spurious nutrition over the years. It was such a routine buying them that I had never thought of it.

So I googled for homemade granola bars and went with literally the first result: The 5 Ingredient Granola Bar from Minimalist Baker. I made it once, and they were good, but I came up with some changes to make them much cheaper, and (almost) just as healthy.

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Ridinkulous Quarterly Expenses: Q3 2017

Hey, Ridinkuloids! We hope everyone had a nice, frugal summer! Here is our expense report for the past three months. Spending-wise, it looks like we had a pretty average quarter. Which is good, because we had a lot of fun! We traveled to Toronto, Newport RI, Boston (twice), the Thousand Islands, and the family farm in western New York.

Just as a reminder, these expense entries do not include any income or expenses related to our rental apartment. That gets its own separate entry!

Total Expenses: $10,510.95
Avg Per Month: $3,503.65

Without Debt Payments
Total Expenses: $8,227.21
Avg Per Month: $2,742.40

Summary

Quarterly Total Monthly Average
Serious Stuff  $4,504.90  $1,501.63
Food  $1,938.65 $646.22
Transportation  $763.61 $254.54
Utilities  $521.67 $173.89
Fun Stuff  $1,098.52 $366.17
Pets  $620.58 $206.86
Miscellaneous  $1,063.02 $354.34

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First Time Landlords: Second Year Income Statement

Can you believe it? It’s been two years now since we bought our rental property! In 2015, we had been maxing out our retirement accounts and looking for a new type of investment. Going by all the early retirement blogs I was reading, it seemed like the next step was adding rental property to our portfolio. The jerry-rigged returns you can conjure by buying a rental property with little cash down are pretty incredible. So I bought some books and read up on what to expect.

We bought a two-family house that hardly needed any work. We had more money than time, and were strictly interested in having a positive cash flow as soon as possible. We didn’t want to be stuck paying for renovations and waiting to rent it out.

Here’s a summary of what’s gone on for the past two years:

July 2015 – We buy the house for $134,000. It’s vacant and in good shape, so we get to work cleaning it up and doing some maintenance. The chimney needed re-lining, and we needed hookups for a washer and dryer on the second floor apartment. We had a lot of discussion about what prospective renters would be looking for in an apartment, and a washer and dryer seemed right at the top.

September 2015 – We find out first renters after listing the apartment on a Saturday, giving them a tour on Sunday, and getting the lease signed that week. This was extremely lucky. They move in in mid-October.

December 2015 – The first 1st floor apartment is still vacant after doing numerous showings and getting some unattractive applicants.  We eventually get a couple and they move in in just after New Years, after we purchase a washer and dryer for that unit. (We had been leaving this one unit without a washer and dryer in order to attract those tenants that have their own. That didn’t work out, as you can see)

Winter, Spring, Summer 2016 – This was the golden time. “They were serene days and quite undemonstrative.” Rent was always paid on time, we hardly heard a peep from the tenants, and everyone was getting along. We didn’t have any major repairs, although the 30 year old washer in the 2nd unit broke, so we bought a new one.

October 2016 – Our first tenants let us know that they won’t be renewing and are moving to be closer to work. We become dizzy with greed and get anxious to fill the unit as soon as possible! We accept new tenants and they move in just after Thanksgiving. The less said about them, the better. Pretty soon, we realize…

February 2017 – After a few nightmare months, we buy out our tenants’ lease by giving them a free month’s rent, and then vow to better vet potential tenants in the future, even if it means the unit stays vacant for longer. We soon get a referral from the 1st unit tenants. Their friends visit, love the place, say they are looking for a place to stay long-term, and sign a lease. We let out a huge sigh of relief.

June 2017 – We replace the ancient fridge and stove in the 2nd unit. (My parents laughed when they saw these appliances) One of the 1st unit tenants start mowing the lawn and raising a garden in the backyard. We let out another huge sigh of relief and for the moment, we’re back on easy street.

So far, it’s been some work, but with huge variations from month to month. This summer, we’ve only been to the apartment a few times for minor things (replace six window blinds, replace kitchen sink sprayer, re-paint backdoor stairs). Compare that to seemingly endless showings you have to do sometimes to get a renter. I wish I could estimate how much work it is on average per month. Five hours possibly? I have no idea.

Here’s our income statement for the past two years:

 Income Statement 2016 2017
Total Income $18,317 $20,467
Mortgage Payments ($9,099) ($9,099)
Home Equity Loan Payments ($1,364) ($1,572)
Property Taxes ($4,813) ($5,024)
Insurance ($3,961) ($1,000)
Maintenance ($6,044) ($1,575)
Utilities ($1,987) ($2,363)
Miscellaneous ($35) ($80)
Profit ($8,986) ($246)
Mortgage & Loan Principal $5,845 $5,913
Profit Plus Principal ($3,141) $5,667

So after two years, we have finally turned profitable to the tune of… $2,526. Not huge, but everyone has to start somewhere, right? And if my 5 hours of work per month is correct, that is $21 per hour.

On the plus side, our profitability has seen a huge swing from Year 1 into Year 2. We basically ended our second year with $9,000 more in income than we made in the first year. The big swing is due to a few things:

  1. Spending $4,500 less on maintenance. We repaired the chimney, had electrical and plumbing work done, and replaced several appliances in the first year. Much less this year.
  2. Taking in $2,000 more in rent.
  3. Spending almost $3,000 less on insurance… although that’s due to a timing difference. Whoops! Looks like we paid part of Year 2’s insurance in Year 1.

What is our Return On Investment?

That may be a silly question after just turning profitable, but let’s do the math anyway.

Out of pocket, our down payment and closing costs were $12,456 in cash, so let’s call that our initial investment. $25,000 of our 20% down payment came from that home equity loan.

ROI = ($2,526 profit/$12,456 investment)/2 years = 10.1% annualized

OK, that’s actually not so bad. Ten percent is good for passive investment income, but income from a rental property isn’t truly passive income, no matter what the personal finance commentators might suggest. I’ve never had Coca-Cola ask me for a lawn mower or ask to have the heat turned up. They just pay me dividends! So maybe the better measure of rental property income is the hourly wage I attempted to calculate above.

Do you have an investment property? What is your return and how do you measure it?

How To Camp Successfully: Your Tips and Supplies Guide

Hey everyone! We hope you all had a great Labor Day weekend and unofficial end of summer. We spent our week at one of our favorite places, a campsite in the Thousand Islands region of New York. We go here every year, sleep in a tent by the water, cook over a fire, read, swim, watch wildlife, and generally “get away from it all.” (Then I come back and get depressed over the complicated nature of real life in the real world with all its responsibilities and noise)

I enjoyed it so much, in fact, that I decided to write another post about how to have what I think is the perfect camping trip. I noticed that our set-up was much more “minimalist” than all of the other campsites. I want this entry to focus on our camping style which contains none of the fuss that makes camping more work than fun. So if you’ve never gone tent camping or called it quits after a bad experience,

WARNING! For the first time, I am experimenting with affiliate links, and a few of them are in here. We’ve never made a red cent from this blog, and that’s maybe as it should be. But if you buy any of the supplies linked, we will get a cut, but you can be sure, we will not not steer you wrong!

Childless Couple Pro-Tip: The post-Labor Day week is your golden hour!

Chips, soda, music, water, Thousand Island Sun

We’ve spent years returning to this same campsite every summer, and I don’t know why it took us so long to realize that timing makes all the difference. The major benefit/problem with our campsite is how beautiful the location is. Every day we get lookee-loos stumbling on it and saying “Oh this is a nice site. We should try booking this.” Well, you have to get up pretty early in the morning (literally) to book this site before I do. But needless to say, our site and the ones around it are always popular and are booked throughout the summer. That means we have neighbors. Sometimes lots of neighbors. And if you’re looking to having a quiet commune with nature, this is the problem.

But while the campground is fully booked during Labor Day weekend, it is virtually empty by Tuesday! Those kids have to go back to school! That is our car all by its lonesome above. After Labor Day, the only people left are retirees and childless couples… like us! We had a huge swath of riverfront all to ourselves to explore. And since it’s technically still summer, the weather is nice and the water is still as warm as it’s going to get. The first week of September is definitely the time to go camping.

Who needs an RV?

Unlike most of our neighbors at the campground, we use a tent. I see so many people driving in with big campers attached to a truck, or driving a dedicated RV. Then I watch them spend hours setting up and fussing with things, running loud generators, messing with weird pumps and faucets. There always seems to be something that they need to tend to with the RV. Then I imagine the cost of driving the thing. All of our gear fits neatly in a Honda Civic which gets 30 MPG. The typical RV gets 5-10 MPG. It takes us ten gallons to get from home to our campsite.  That means it would take an RV thirty to sixty gallons! Yikes. (Although I was a bit jealous of our neighbors with Airstream and Shasta trailers)

So you’ll need a tent. What makes a good tent? Size is part of it, but smaller is actually better! We don’t recommend overbuying when it comes to tent size. You might want to buy the biggest tent you can afford, but you will be sacrificing quality. Previous to our current tent, we had a $70 Eddie Bauer tent (see left) from Target that leaked like a sieve in any substantial rainfall. Even with the fly on, the rain wouldn’t stay out unless we also put a tarp on top of it all.

Our current tent, under its fly

Our current tent is a 2-3 person tent from Mountain Hard Wear called the Hammerhead 3. The Hammerhead is smaller and much more expensive than our old Eddie Bauer, but is a much better buy. It takes a serious downpour before a drip of water will seep into the sleeping area, which I can only remember happening once or twice. And for nice, dry nights, there is an enormous panel on the front that opens up so you can sleep under the stars, but with a screen to keep the buggies out.

It also has a well-designed fly that extends far away from the tent, so rain doesn’t drip near it. It also creates a vestibule for each sleeper’s door so you can place your shoes outside the tent and they won’t get wet.

Let our neighbors be a cautionary tale to you. Their tent’s fly laid on the tent walls and didn’t even extend to the ground. After their first night, they had to lay all of their clothes and their sleeping bag on the picnic tables to dry out. Everything got wet their first night. A good time was not had by all.

We were worried at first that the Hammerhead might be too small, but there’s enough room for all of our stuff, and since it’s so functional otherwise, we would forgive it a lack of space. You don’t need to enough room for everything you own. You’re supposed to be spending time outside anyway! We keep our luggage in the car. We change clothes in the campground bathroom anyway, so it doesn’t make sense to keep all of our clothes in the tent. We got the Hammerhead as a wedding gift nine years ago and it still performs perfectly. Unfortunately, Mountain Hard Wear doesn’t make this tent anymore, so you’re going to have to do your own research for your tent!

Weather Prepardness

Having a successful camping trip means being prepared for the weather. Keep yourself and your things dry should be your #1 concern, because as soon as your stuff gets wet, your trip can be ruined!

But if you can’t fit your stuff in your tent, where does it go? For years, we tried bringing all of our food and supplies in various plastic containers we had. Inevitably, they weren’t very waterproof and we’d have wet bread, damp matches, etc. A few years ago we invested in two Rubbermaid ActionPacker Storage  boxes. We have a 24 gallon and an 8 gallon box.

This is yet another wise investment for campers. During the off-season, we keep our tent and air mattress in the large box, and all the various things like paper plates, plastic bags, flashlights, aluminum foil, tongs, batteries, etc. in the small box. When it comes time to head to camp, all we do is make sure nothing needs to be replenished in the boxes, and throw the boxes in the car. Then at camp, the big box holds all of our food. Pretty much everything stays in these boxes. We don’t leave anything out. So if it ever rains, we don’t have to worry about it.

Also, TARP IS GOOD. Tarp is must. We usually have a pile of firewood and collected branches. Heaven help you if your firewood gets wet. Having a tarp is a must to throw over the wood pile if there’s a storm coming. All you need is a simple 8×10 foot tarp like this one.

First sign of rain, cover that wood!

Also, don’t be afraid to throw things in the car! Chances are, it won’t be far from your campsite. If the sky suddenly darkens and fat raindrops start falling, we’ve been known to throw things in the trunk. Our chairs especially can’t get wet. There’s foam in the seats and backs, which is great for comfort, but if they get wet, they can take a whole day to dry out. We find these chairs more comfortable than the typical camping chairs which are thin fabric held up by a bunch of poles. I wish I could tell you what these are called, but we bought them twelve years ago and there’s no labels on them!

For a table, we use that simple APAK Goods folding table. There is already a picnic table for doing any serious food prep. The folding table is mostly holding our food and drinks in place

Lighting

I think you only need two good lights: A interior tent light and a flashlight. Lanterns are good too, but not as useful as a flashlight. Besides, a campfire serves some of the same purpose as a lantern. At this point, for any camping light you should only be looking at LED lights.

We recently did away with our original Coleman tent light. It’s very solidly constructed, but provides only a dim light and really seems to burn through batteries. Now we bought these two E-Trends LED bulbs that simply hang from any hook and provide much more bright light. They’re much lighter than the brick of a Coleman light. Marge said the new lights make our tent look like an art installation.

Eating

Key tip: Don’t bring food with you. We made this mistake a bunch of times, bringing not only boxed food from our pantry, but a whole cooler full of ice and meat. It’s all just more to pack. Since the packing process occurs four times (packing up at home, unpacking at camp, packing up at camp, and unpacking at home) you want to make that as painless as possible. More work hinders fun!

Buy all the food you need after you get there. Unless you’re serious backpackers, you won’t be far from civilization. We just make a trip to the local grocery store after we set up camp and buy whatever we want. One of our camping supplies that’s remaining unchanged over 12 years is our Coleman Xtreme Cooler. This was a good buy. I think we picked it up for $25 back in the day. It seems well insulated, and we keep it out of the sun on hot days.

Key tip: Buy block ice, not ice cubes. We put two big ice blocks in this cooler and we are set for at least five days. Ice cubes melt much more quickly because of the amount of surface area, and you’ll be buying a bag or two every other day. Also, instead of draining the ice water from the cooler, leave it in there and keep your food in plastic bags to keep it from getting wet. The water will slow the melting of the remaining ice blocks.

We also keep cooking extremely simple. We only have this very basic Texsport steel camp grill. We cook steaks or hot dogs or toasted sandwiches, veggies wrapped up in foil with seasoning, and have many ingenious s’mores recipes, but those would requite their own entry. Having a propane stove might add convenience, but that also adds more stuff, including propane tanks that need to be re-filled. We try to buy just enough food that we’re able to finish it all by the time we leave. That leads to some creative re-uses, like the pizza weenie (hot dog wrapped in provolone and pepperoni) seen above.

You’ll also probably want to keep a supply of water on hand. We’ve found that this 5 gallon collapsible water tank from Coghlan more than fits our needs for when we want a drink of water or need to wash our hands off.

Sleeping

As described in our earlier camping entry, we have a system for making a comfortable bed. We have the cheapest air mattress sold by Coleman which has held up for years. We inflate this, lay a basic Coleman sleeping bag out on top of the mattress, put a fitted sheet over the whole thing, then sleep under another sheet and a quilt. This feels better than crawling into a sleeping bag because it feels more like a real bed and you have more freedom of movement. We had one cold night this time (40 degrees) and we wished we had brought another blanket, but usually this set-up is sufficient, at least down to 50 degrees. 

The Coleman mattress is nothing special. We had a couple leak early on, but this one has managed to last six or seven years so far. I don’t recommend spending extra money on an air mattress. Our neighbors with the wet clothes had a huge air mattress they had to inflate at the bathrooms and carry back because, I guess, they didn’t have a battery-powered pump. I can’t imagine how much space it took up in the tent.

Fun Stuff

You’re here to have fun, right? What fun stuff are you going to bring? Since everything is going to be exposed to the elements, I recommend buying your stuff used. You don’t want anything expensive to get ruined, right?

We bring kayaks with us. Kayaks are not cheap water toys. You can easily drop several hundred dollars on a small, basic kayak. Years ago, I was having a hell of a time getting used kayaks for cheap on Craigslist. But when that happens, we don’t give up. We put up an ad asking for what we want! Yes, I put up an ad asking for two 12′ long kayaks, looking to pay $250 each. And it worked! (This is also how I found my beloved Schwinn Suburban commuter bicycle for just $140) The people we bought them from were leaving the area and needed to get rid of them.

We also brought our used Kindles with us, loaded with library e-books. The two Kindles cost a total of $30. Sure they are older models, but does that matter? Bringing a Kindle is not only lighter weight-wise compared to paper books, but I’d argue maybe even better for the wet weather. Paper books get damp easily, while you can get a cover for your Kindle which will actually keep the rain out of it.

Bathrooms

We are always disgusted by the people eating and shitting in their motor homes, letting the excrement collect either inside their little house or in little gray tanks underneath. Yuck. No thanks. We use the campground bathrooms like civilized people. We each have a little grocery bag with travel size versions of all our toiletries that we take from the car to the bathroom, with a little clamshell container for the soap. That’s it.

Our showers and bathroom breaks are also typically the only time we can charge up our cell phones or iPods. Camping is the time to get away from such nuisances, but we still need to be minimally connected to the world. Using showertime as the only time to add another 10% charge to your phone is also a good way to artificially limit your cell phone use as well.

Ten Years of Our Finances: Then Vs. Now

Your net worth over time, ideally

A funny thing happened while I was updating our net worth for the month. I realized that it’s been ten years since the first entry on the spreadsheet!

I don’t know what prompted me to start tracking my net worth in 2007. I did start tracking my expenses in college in 2003, and it might’ve been that I just wasn’t satisfied with the way that Quicken displayed things like Assets and Liabilities. The capability was there, so I figured those must be important things to track, but I didn’t like the interface, so I started my own simple spreadsheet.

A lot of things have changed over the last ten years. But more importantly for the accumulation of our financial assets, a lot of things haven’t changed. It doesn’t seem like we’ve upgraded our standard of living all that much. We still have a lot of the same furniture. We still shop at the same grocery stores. We drive one of the two original cars. If we wanted to spend all the money we made, we could be driving new cars every three years, live in a much more expensive neighborhood, and eat out at fancy restaurants. Instead, we prefer to keep that money for ourselves, keep our savings rate above 50%, and inch up that retirement date sooner and sooner.

Is there lifestyle inflation I’m overlooking?  Today I’ll be comparing our financial life ten years ago to what it looks like today. Continue reading

Who Needs a DRIP Fund?

The first stock I ever bought was after my junior year of college. I was 20 years old and had a job as a bookkeeper for an old lady who had a tiny tax return and apartment rental business. I say “tiny” because she had about two tax clients and one apartment. Basically, she had been a big shot in the business world in the 60’s, had her own thriving business for a while, scaled that down to almost nothing, but still liked to have a bookkeeper around. (I think because she didn’t know how to use the computer) Mostly I was tracking her own personal expenses.

It was an odd job. I worked only a few hours a week, and a lot of that was spent listening to her tell stories about her life, past and present. She had a great mind for finance, and I picked up some useful advice that I probably changed my life. For one, I learned how to use Quicken, and I saw the benefits of tracking your expenses. I started tracking my own expenses right after that, and I’m still using the same copy of Quicken today.

The biggest takeaway might’ve been when she said, “Do you know what compound interest is? It’s the greatest thing in the world!” She owned some shares of IBM stock, and had seemingly owned them since the beginning of time. Over the years, she said she would buy sometimes, or sell some other times. But always, always the dividends were re-invested in more IBM stock. She told me about DRIP (Dividend Re-Investment Plan) funds, which we never learned about in school, as a good way for someone young like me to get involved buying stocks.

So I did. I opened a DRIP at the beginning of my senior year with Coca-Cola. Only the oldest, reliably dividend-paying companies seemed to offer DRIP funds, and Coca-Cola seemed like a more fun company to invest in than IBM or Exxon-Mobil or what have you. Plus, I figured that no matter what fads or technologies come along, people will always need something to drink, and whatever you want to drink, Coke will sell it to you.

Computershare is their DRIP fund administrator. So I bought the minimum required (probably $25 worth) through them and started automatically investing $10 a month, every month on the 15th. Fifteen years later, I’m still investing in a monthly basis. The only thing that’s changed is that I’m investing $75 a month instead of $10.

It’s worth about $8,500 now, which doesn’t sound like much considering I’ve been at this for fifteen years. Those financial tips you hear like “by just saving $10 a month, you can start a retirement fund!” are fibs. You need to do more than that. Luckily, the Coca-Cola holding is just a small percentage of our investments.

Who needs a DRIP fund?

Well, I’m thinking of officially ending our DRIP fund, in a way. Computershare charges fees for re-investing dividends and investing monthly. They charge $2 per automatic investment, plus 3 cents per share, and 5% for each dividend re-invested. Their website sucks, and it’s a minor annoyance that the Coca-Cola holdings are separate from everything else we have. (See Is Vanguard Getting Too Big?)

Aside from that, Comptuershare is a bastard if you try to sell shares. I don’t think they’re alone among DRIP fund administrators in this respect. They punish you for leaving. It costs $15 or $25 to sell shares, plus 12 cents per share. So it would probably cost us about $50 just to completely sell our position. And that cost will only increase as our position increases. So better to move out sooner rather than later, right?

If I move everything to Vanguard, re-investing dividends would be free, but new investments would cost $7 every time. That’s more than what Computershare charges. So I’m thinking of continuing to invest in Coca-Cola only once per quarter, instead of once a month, purchasing $225 every time (three months worth of $75 investments).

I’m not sure how much the exchange will cost (I’ve read conflicting reports), but it would be cost less and be less risky than selling and attempting to re-buy it at the same price.

Anyone else have, or used to have, a DRIP fund?

 

Ridinkulous Quarterly Expenses: Q2 2017

Hi, Ridinkuloids! I hope you had a great quarter full of wise financial decision-making. We did better this quarter than last quarter in terms of spending, mostly because we had no property tax or home insurance bills come due. That said, our expenses were not as low as I would’ve hoped. Like I mentioned last quarter, we had to put down one of our rabbits, Cornelius. The credit cards for all of his exams and treatment came due this quarter. It took many visits to figure out what was wrong with him, and just to keep him going.

Our pet medical expenses also included a dental cleaning for Maeby! This requires her to be knocked out cold because, although she’s a chill dog, she won’t allow anyone near her mouth. So in order for her to keep her notoriously bad greyhound teeth in tact, she periodically has to go in for that procedure.

In good pet news, though, we adopted a new bunny. Her name is Freya and here’s a picture of her relaxing in the gym.

 

Total Expenses: $10,424.14
Avg Per Month: $3,474.71

Excluding Debt Payments
Total Expenses: $8,340.40
Avg Per Month: $2,780.13

Savings Rate: 55.3%

Summary

Quarterly Total Monthly Average
Serious Stuff  $2,167.66 $722.55
Food $2,405.33 $801.78
Transportation $1,015.44 $338.48
Utilities $590.75 $196.92
Fun Stuff $1,243.59 $414.53
Pets $2,396.32 $798.88
Miscellaneous $605.05 $201.68

 

DIY lounge chair

Details

Serious Stuff :

Quarterly Total Monthly Average
Mortgage $2,083.74 $694.58
Home Insurance $0.00 $0.00
Property Taxes $0.00 $0.00
Medical $0.00 $0.00
Home Maintenance – DIY $83.92 $27.97

Just the normal mortgage payments this month, although I’m planning on making extra payments again starting next month! The DIY expenses were mostly for building a lounge chair in the backyard, which we’ve been enjoying on the weekends. (Plans here)

Sometimes we eat out

Food:

Quarterly Total Monthly Average
Groceries $1,441.86 $480.62
Wine & Beer $73.05 $24.35
Dining Out $715.82 $238.61
Takeout Food $174.60 $58.20
Total Food $2,405.33 $801.78

Massive food expense this month! We way overspent dining out. With Marge going on a trip to Vegas, several trips out with friends, and visiting the grand opening of a new branch of our favorite restaurant (now dangerously close to home) we will definitely end up far ahead of 2016’s total dining expense. Grocery expense was also $500 more than last quarter, and I’m not even sure how! I am proud of making those DIY bagels, though.

 

Transportation:

Quarterly Total Month Average
Auto Maintenance/Other  $149.25 $49.75
Gas $165.19 $55.06
Car Insurance $601.00 $200.33
Parking $0.00 $0.00
Bus Tickets $100.00 $33.33
Total Transportation $1,015.44 $338.48

Well if it wasn’t for that damn insurance, transportation cost would be almost nothing! Just AAA membership, new wiper blades, tolls, registration, and some gas. Plus my usual bus tickets since I usually take the bus to work.

 

Utilities:

Quarterly Total Monthly Average
Cable $119.97 $39.99
Electric $145.94 $48.65
Gas $197.72 $65.91
Telephone $29.96 $9.99
Water  & Sewer $97.16 $32.39
Total Utilities $590.75 $196.92

Cooler months mean less spent on gas heat. And once we fixed the toilet, the water bill went back down under a hundred dollars a quarter. We just received our new internet bill, and the price is going from $39.99 to $44.99 since Spectrum just bought our company Time Warner Cable. Hey, I thought corporate consolidations were supposed to save us money! Ha ha ha ha ha!!

Green Animals Topiary Garden

Fun Stuff:

Quarterly Total Monthly Average
Entertainment $203.73 $67.91
Recreation $155.68 $51.89
Travel $884.18 $294.73
Total Fun Stuff $1,243.59 $414.53

Entertainment includes Netflix, Hulu, New York Times online, a few albums, and a month subscription to Tunnelbear (shhh!) so we could watch the Eurovision Song Contest live. For Travel, we paid for our hotels in St. Kitts and Nevis later this year, and bought our Megabus tickets to Toronto for the CNE!

Maeby enjoying the beach in Eastham, Cape Cod

Pets:

Quarterly Total Monthly Average
Boarding $89.90 $29.97
Food $192.42 $64.14
Medical $1,953.04 $651.01
Other $160.96 $64.14
Total Pet $2,396.32 $798.77

Like I said, those pet medical bills are a killer.

 

Miscellaneous:

Quarterly Total Monthly Average
Cash $80.00 $26.67
Charity $164.00 $54.67
Clothing $82.72 $27.57
Gifts Given $57.41 $19.14
Home $135.14 $45.05
Personal Care $79.27 $26.42
Postage $6.51 $2.17
Total Miscellaneous $605.05 $201.68

Very good so far this year on clothing expense. We’ve hardy bought anything. No need to institute a clothes shopping ban! Just replace things when they need to be replaced. I assimilated into the borg joined the club and got a FitBit, which is included in home expense. No need to buy a new one at an exorbitant price, though. I got mine for $20 on eBay.

Goal Progress

Total 2017 Spending of $30,000 (excluding debt payments): 

  • Spent so far: $19,661.52
  • On track to spend: $39,323.04

Not doing so well here. Those unexpected expenses always get in the way. We can only spend just over $10,000 for the rest of the year and still come in under $30,000.

 

Savings Rate of 65%: 

  • Savings Rate this quarter: 55%
  • Savings Rate so far this year: 46.1%

Falling short again! It always sucks to miss this goal, but then I remember that the average personal savings rate in the U.S. is about 5%. Our method for calculating our savings rate is shown here.

 

Max Out 457 Plan and Roth IRAs

  • Goals: $18,000 in 457 Plan / $5,500 in each Roth IRA
  • Saved so far: $8,888.92 in 457 Plan / $2,000 in each Roth IRA

We’re on track to max all of these out. We’ve even started to contribute to Marge’s terrible 401(k). The mutual fund choices may be awful, but we desperately need to reduce our tax bill. We simply make too much money! So even though the fees on the 401(k) are bad, the effects of the tax hit now would be marginally worse, so we are contributing to the 401(k), but not maxing out. Those vultures are not going to get all of our money!

 

Read 24 Books

  • Read so far: 10

Behind schedule! I read Your Money Or Your Life, the sort of ur-text for the modern early retirement movement. I should really write a review of it, since I have thoughts on it. But then I also read Grimm’s Household Stories, and I probably have MORE thoughts on that! I mean, I’m all about improving your financial know-how, but Grimm’s fairy tales are just so unbelievably bizarre, I think it would be good for everyone to get lost in its weirdness, so I have to recommend that.

 

Years of Savings:

This magical calculation demonstrates how far we could get if we kept living every month like this quarter.  We take our investable assets and divide them by our monthly expenses above. The number to shoot for is 25, because at that level of savings, you could afford to live forever on your stash. According to our monthly average expenses (excluding debt payments) and our investable assets, we have…

9.45 years of savings

Retirement Location Possibility!

If we take that number of years of savings above, and divide by 25, we can figure out where in the world we could afford to retire right now by dividing another country’s cost of living  price index by our own cost of living. I used Rochester, NY, for our own cost of living since it is the closest city to us on Expatistan’s index and is very comparable price-wise.

Our International Retirement Cost of Living Number is….

65

According to Expatistan’s index, that means we can retire… Chisinau, Moldova! I don’t know anything about this place, but a Google search’s second result is Is It Worth It To Visit Chisinau, Moldova where the author calls Moldova the most boring country in Europe. Work on your SEO game, Moldova!

How Much Money Can You Make With StepBet? (Part 2)

So a few weeks ago I let you in on an app Marge started using called StepBet. This is a fitness challenge app that syncs with your FitBit and encourages you to make your walking goals by taking your money if you fail! You pay $40 into the pot, and at the end, everyone who hasn’t failed out splits the remaining money from all the losers. In other words, their loss is your gain.

Naturally, I was wondering what kind of return you would get on your $40 investment, and what kind of cut exactly StepBet takes. Well, now that the six week game is over, I can tell you how much she made.

What do you get?

On an initial investment of $40, she got back $46.55.


On one hand, that’s $6.55 for six weeks worth of work, if keeping on top of your walking every day counts as “work” for you. Not a ton of money, but what can you expect? Anyway, six dollars is six dollars.

On the other hand, if you’re walking a lot anyway, that’s an annualized return of 142%! Sounds so much better that way, right? I mean, it almost meets the definition of passive income, if you walk a lot. But if something fails, or you miss two days in a week, you would have a 100% loss on your hands.

What does StepBet get?

The game started out with 1,192 players, and almost 300 failed before the six weeks were up.  If you were to divide that total pot of $47,720 over the remaining 897 players, they would each get $53.20 back. But that’s not what we got… StepBet has some convoluted rules about the payout amount, but by giving each of the 897 remaining players back $46.55, we know that the total paid back was $41,755.

That means StepBet took nearly $6,000 as their “cut” from this one game. Keep in mind, groups of people are starting up new games constantly, and big games like this, I think, start weekly. Not a bad gig. Maybe instead of walking so much, we should all be inventing apps!

It is intriguing. I may even try it myself sometime. See, I also just bought myself a Fitbit. And in keeping with our frugal philosophy (Marge got hers as a gift), I bought mine used. I have a whole entry coming up on the insane discount you get when you buy electronics secondhand.

Have you ever done a fitness challenge where money was involved?

 

Is Vanguard Getting Too Big?

I hope everyone had a great weekend. Here at Ridinkulous HQ, it was Eurovision weekend, of course. We had some friends over so we could introduce the Eurovision madness to others. Maybe you’ve heard, but the Muppety man with the huge suit from Portugal won the contest. He was very good, but this year we were a Moldova house. After all, it featured the return of the Epic Sax Guy. They came in third place!

Then when the sun was shining (and Eurovision wasn’t on) I worked outside on a DIY lounge chair. During the warmer months, all I want to do is sit outside and read. Right now all we have is some patio table chairs. But I want to stretch my legs out, so I figured a lounge chair would increase my leisure comfort about 50%. But lounge chairs are expensive! So I found plans online and made that my new project. I had a lot of the wood on hand already, so it should be pretty cheap, and hopefully very comfy.

Now for the actual financial part of our post…

If you read any personal finance blogs, including this one, you know Vanguard pretty well. They are the dominant name when it comes to broadly-diversified low-cost investing.

They provide cheap, easy access to the stock market as a whole. It’s a no-brainer to use them, since we know that the average active investment mutual fund will underperform a passive investment fund, especially after accounting for the fees.

I had been hearing recently about how passive investing has really taken off. That even your average, middle class investor understands that this is the way to go. But it wasn’t until reading an article in the New York Times that I realized just how dominant Vanguard has become. (We shell out $7.50 a month for a Times online subscription, but it’s worth using one of your precious ten free articles a month on this)

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