Sunday, July 28, 2013

The Nonexistent Part-Time Position

At the office the other day there was an exhibition of sorts which was meant to highlight some of the groups and resources available for professional growth and advancement within the company.  I attended and poked around the various booths for about an hour.  One of the booths had the label "Staffing".  They talked to us about the tools available for managers to hire new employees, and for employees to look for career advancement opportunities.  I am not particularly interested in changing jobs at this point, so I started to tune out for a few moments, but at the end of the presentation I decided to take the opportunity to ask a question I have been wondering about for a while.  I asked why it was that I had never seen any part-time positions offered within the firm.

The Staffing folks told me that they don't offer any part-time positions, period.  They did admit that some people do end up moving from full-time to part-time due to personal circumstances, although rarely, "on a case-by-case basis".  But they said that most people are interested in working full time, so they (Staffing) don't bother creating part-time opportunities.

I followed up by asking if people nearing the end of their careers ever asked to scale back their hours.  The Staffers exchanged blank looks with each other and said they couldn't remember any examples of this.  They said the part-time work arrangements usually come from people who have extenuating family circumstances which limit the amount of time they can dedicate to work.

As I was returning to my desk afterward, I chatted with a co-worker who had been with me at the Staffing booth when I asked the part-time question.  He told me that I'm an unusual case:  no debt, no mortgage, no dependents, no need for benefits (our health insurance comes from my wife's employer) -- 100% of my earnings goes into saving.  So even though it seems strange to me that there isn't more demand for professional part-time positions, I am certainly the exception and not the rule.  He thought that most people at our company feel they need the benefits and the pay that comes from a full-time job in order to support their lifestyles.

Meanwhile, I've been reading a number of news articles lately about low-wage workers (mainly in retail and fast food) who want the opportunity to work more hours but must deal with employers who purposefully keep hours below a certain threshold to avoid providing certain benefits, etc.  It makes me feel somewhat out of touch to find myself wanting fewer work hours when so many others want more.  Of course, one big difference is that I am working for a company where even a part-time salary would handily exceed full-time pay in retail or fast food.  I'm not interested in taking one of those very low-paying jobs just for the sake of reducing the time spent at work.  I still value my own time more than that.  Another big difference is that we are not struggling financially.  My wife and I had opportunities to increase our incomes based on our professional experience and performance at work, and we took them, while at the same time taking aggressive steps to reduce our expenses and debt -- in essence maximizing the utility of our income.  I bet we spend far less on discretionary expenses like cell phone service, restaurants, and television than the average retail or fast food employee does (for example, in the case of TV we pay nothing since our antenna picks up broadcast channels for free).  So if those who are struggling financially want the opportunity to work more hours to earn more money to make ends meet, doesn't it logically make sense that those who are not struggling should want the opportunity to work less?  That's how I see it.  But I seem to be in the minority.  The prevailing attitude is:  if money is good, than any opportunity to earn more money must be taken.

Although the Staffing contacts didn't give me much to go on, I was intrigued by the possibility that part-time work may be available to me if I ask for it.  As Staffing said, it's offered "on a case-by-case basis".  I suppose I can present the best case possible for myself and see how my management reacts.  I think I'd want to pick the right moment for this, though.  I'd want to do it at a time when I was prepared to face the possibility of not working at all for this company anymore.  Perhaps if my request was denied I'd have to deal with some backlash, a stigma that I wasn't interested in pulling my weight and would prefer to have an easy job while everyone else picks up the slack for me.  I might be put on the short list for the next round of layoffs -- who knows?  Honestly I don't know what to expect.  Still, if my request was granted, I'd be a much happier person.  A three-day workweek would be pretty nice.  I think the earliest I'd want to take a stab at this would be at the end of this calendar year, when we have reviews scheduled.  I'll mull it over and seek the opinion of my wife (who obviously would be impacted by a change like this).

Monday, July 8, 2013

Freedom from Fear (at work)

When I first started working for my current employer, I was a cash-poor young twentysomething who didn't know exactly what I wanted to do for work, but knew I needed an income of some sort.  Fortunately, it didn't take me long to find a job with what I thought were a lot of positives:  a decent starting salary, a respectable company on solid footing, and room for professional growth. The one negative:  I chose to take on a 40-minute drive to and from the office each workday, which could be longer in bad traffic or bad weather.

After a couple of years of this, I decided I was tired of wasting so much of my life behind the wheel of the car, so I moved to within 5 miles of the office.  This cut my commute down to under 10 minutes.  After I met my wife and we got married, we bought a house in the same area.  I can now drive to work in around 15 minutes, or preferably, spend a little extra time and enjoy a wonderful ride on my bicycle that lasts just over half an hour.

Unfortunately, my employer has multiple offices in the region.  There is another office about 45 miles from my house which I occasionally must go to for project meetings.  I try to minimize this as much as possible, because traffic during rush hour can make the 45-mile trip last up to two hours each way.

This morning I was summoned to the other office to help with a presentation.  I got up early and caught a bus which crawled through traffic and deposited me near the office around 1 hour 40 minutes later.  I walked a few blocks to the office and got set up and ready for the meeting.  Fifteen minutes before the scheduled start time, I received an email stating "Sorry for the late notice, but today's meeting is canceled."  Irritated, I caught a bus back home and worked the remainder of the day from my local office.

My manager had also made the trip this morning.  He decided to drive and had left his house before 6 AM to avoid rush hour, getting to the other office around 7 AM.   Another presenter in the meeting had flown in from another state.  All of us had wasted our time and effort to get to this particular office from our remote locations.  It seemed to us like the organizers of the meeting couldn't be bothered to cancel the meeting any earlier than 15 minutes before the scheduled start time.

This is not the first time this sort of thing has happened.  This is probably the worst example, but other meetings with this group in the same office have been previously canceled with less than 12 hours notice.  Since the meeting organizers are higher-ups in the organization, I can't decide whether they simply don't respect our time, or are ignorant of the effort we put in to travel to other office locations for meetings.

Later in the day I received an invitation to the rescheduled meeting in a couple of days.  Years ago I would have sucked it up and planned for another early morning on the bus.  But given our current financial situation at home, I no longer feel any fear of sticking up for myself in situations like these.  I told my manager I wouldn't be making another trip this week, and would attend the meeting remotely (conference call).  After paying off the mortgage and developing a healthy cushion of savings and investments, I find it's much easier to say no to certain work requests which would make things harder on myself.  Of course, it's wise to choose battles carefully, but since my goal is not to cling to a career any longer than I have to, I feel no obligation to suck up to the higher ups or avoid ruffling feathers.  If nobody else is going to respect my time, my own self-respect is going to win out.

One somewhat surprising revelation is that by feeling free to speak my mind (instead of toeing the company line), I've actually gotten positive feedback for saying things that everyone else is thinking but hesitant to put in words.  It's liberating in a way.

Thursday, June 27, 2013

Covering Expenses from Passive Income

With the run-up in stock prices since the beginning of 2013, I've been much more selective when making additional investments over the past six months.  This means we have a lot of cash ready to deploy but not much more invested than we had at the end of 2012.  I've been somewhat frustrated because most of the names on my watch list are trading far above the price I'm willing to pay for them.  I guess I need to remain patient.

One thing I did notice, however, is that the amount already invested is making a subtle difference in our cash flow.  We try to put as many purchases as possible on our credit cards, so we can take advantage of the 2-5% cash back.  However several of our utility bills can't be paid by credit card (without tacking on enormous "service fees" which wipe out the cash back and then some).  Therefore I pay all of these using the bill payment service in our brokerage account.  These bills include electricity, water, sewer, and natural gas.

Our brokerage account is also where dividends accumulate from our investments.  I noticed that the amount of dividends received year-to-date exceeds the amount we've paid out to the utility companies from the brokerage account.  So you could say that our passive investing has allowed us to cover our basic utility expenses on an ongoing basis.  Not a huge milestone, but certainly not a bad thing either.

If/when the prices of some stocks fall back to more reasonable levels, we'll be willing buyers.  I'm looking forward to the opportunity to deploy more of our cash and boost our future cash flow.

Sunday, June 2, 2013

Less Pay for Less Stress?

My wife and I have what most people would call "good" jobs.  We are "professionals", with salaries that put us closer to the higher end of the income spectrum.  The jobs feature benefits like paid time off, employer-matching retirement contributions, and company-sponsored insurance plans.  My guess is that many people who are currently looking for work would be happy to be hired into either of our jobs for these reasons.

By working at these jobs for a number of years, we have given ourselves the means to pay off our mortgage and accumulate substantial savings and investments.

Our jobs do something else for both of us:  they add stress to our lives.   The associated project deadlines and other responsibilities keep us thinking about our jobs often, even during traditional non-working times.  Both of us stay connected to our employers remotely and will work as needed during evenings, weekends, and holidays -- my wife especially (she's not as completely jaded as I am yet).

As I've mentioned before, we're frustrated because our careful planning has put us in a situation where we don't need to work like this.  We could meet our current spending needs with only a portion of one of our salaries.  But there doesn't seem to be a better option.  There is no part-time option at my employer (I've checked).  My wife may eventually have the option to move to a part-time position, but she feels that once she asks for a part-time role, it would be unlikely that she'd be given a chance to go back to full-time employment (so she wants to ensure the time is right before making such a move).  And even if she did move to part-time, the nature of her work means that she would still have deadlines and responsibilities hanging over her head.  Knowing my wife, I anticipate she'd still end up working during her "free" time to ensure that she kept up with her "part-time" assignments.

Since we paid off our mortgage two years ago, we've been operating under the assumption that we'd keep our full-time jobs (and all associated stress, etc) until the time we felt our savings and investments reached a point that we could completely quit.  Lately, however, we find ourselves discussing alternate possibilities more and more often.

My wife suggested we just draw a big X on the calendar, and commit to quitting when we get to that date, regardless of our financial situation.  At that point we can take a "sabbatical" of sorts, hopefully in the form of a long-distance hike on the Appalachian Trail, or something similar.  Afterward we could take stock of our lives and decide what course of action to take next.

I've suggested the possibility that both of us look for part-time jobs working as a team for the same employer, doing lower-stress work.  For example, there is a business here in town that we think would hire us (based on conversations I've had with the owner).  They are always looking for people to work on weekends, because that's when they do most of their sales.  If my wife and I could get into a rhythm working a three-day schedule, say Friday - Sunday or maybe Saturday - Monday, we could have four days off each week to do whatever we wanted.  This is the type of job where the instant we walked out the door, we'd be completely off the clock -- no deadlines to meet, no projects looming, nothing to worry about until we arrived at work the next day.  The caveat is that we'd lose a lot of the benefits our current jobs offer -- no paid time off, no matching retirement contributions, lower pay.  But I wonder if we wouldn't feel richer overall if we didn't have the stress of our current jobs:  working at any hour of the day, 5+ days per week.

Reflecting back on my own employment history, I remember fondly the jobs I had which could be easily mastered, and which didn't follow me out the door at the end of the day.  In high school I worked at a sandwich shop.  I got really good at making delicious sandwiches (something I liked), and was expert at taking responsibility for the entire customer experience:  from the greeting when they walked through the door, through the order and payment, the sandwich assembly, the delivery, and the clean-up and exit.  There was very little stress because it was within my power to correct almost any error or customer disappointment, and each transaction was discrete, lasting no longer than 30 minutes or so.  I didn't have to come home at night and think about the 6-month sandwich project I was working on, because that didn't exist.   The job was part-time, so it didn't dominate my waking hours.  And while the job itself was not the most stimulating, the lack of stress meant that I could fully enjoy my time off the clock, and find stimulation elsewhere.  That job didn't define me -- it just allowed me the resources (cash) to follow other pursuits which made me feel whole as a person.  Because of this, it may have been the best job I ever had.

I had several other jobs like that as a young adult.  I didn't get rich working at any of them, but I felt more happy and healthy overall when I was employed in those types of roles.

If my wife and I did decide to make a move to lower-stress, part-time jobs, we would almost certainly have to reassess some of our other goals, like moving to our eventual "dream property" or reaching true financial independence.  Although we wouldn't be preventing ourselves from reaching them, we would most likely have to push the desired achievement dates to the more distant future.

Balancing the short-term damage of stressful employment against the long-term benefit of financial independence is proving to be a challenge.  My wife and I haven't made any decisions to make a change yet, but we are working to find a course that will help give us the most life enjoyment overall.

Sunday, April 21, 2013

The Snowball Effect

This past week, we had some work done in our master bathroom by outside people, as the work was well past The Executioner's and my skills (which doesn't say too much in the way of home improvement!).  Now, we are left with a few more basic tasks that we are willing to tackle - painting the ceiling and walls, putting in some flooring (which the contractor assured us is "SIMPLE" to do...) and then dealing with baseboards - measuring, cutting, staining, attaching.  I am excited about this project - I have said since the day we moved into this house that this is the one room I would really like to redo.  And now, thanks to the second leak in the shower, I got it!  What I didn't want to do was spend a whole bunch of money on the house right before we moved out of it - in preparation for it to sell.  So, this is a win-win for me and, er, well maybe it is just a win for me and not so much for TE - I'll let him weigh in on the situation.  But, we are not planning to move out of our house right now, so I will get to enjoy the bathroom. 

The snowball effect is this... I walk out of the bathroom and look at the hallway, which we never repainted when we moved in.  It is a disgusting color that looks like someone ate purple grapes and chocolate milk and then threw up, or something along those lines - grayish/tanish/purplish ugliness is what it boils down to.  So, said hallway could REALLY use a new coat of paint.  And then there are our floors.  The upstairs carpet is old, and should probably be taken out sooner rather than later.  In addition to that, the whole house squeaks.  My parents live in a house that was built in the 1800s and I am pretty sure our house has more squeaks than theirs does... that seems wrong to me.  And then I move into... well, you get the picture. 

The battle that rages within me is this: some of these small-ticket modifications (painting the hallway) could handily be done by TE and myself.  A coat of paint wouldn't cost THAT much.  It would be quite a bit of life energy though:
  • empty these rooms/cover everything/move stuff away from the walls
  • I would probably want to take off the baseboards of any room we paint in a) to make it look better and b) because the last family that lived here let their kids play floor hockey regularly (no proof to this statement, but a more fun way to say that the baseboards are really beat up) 
  • taping 
  • painting
  • doing all the new baseboardy stuff
  • cleaning up 
  • blah blah blah.  
So now, we have the expense of the paint and the baseboards, and the expense of life energy to do said projects.  Is it worth the sacrifice of our money and energy to do these repairs?  Will it make the experience of this house (which I like, but also consider a place holder, not a forever home for me by any means) that much better?  On the other hand, if we do some cheaper repairs here, that could provide us with increasing our skills and confidence in tackling bigger projects - we could use this place almost as a practice house for when we move into our forever home and want to have really good-quality workmanship throughout.  That, my friends, is the battle that rages within me. 
I now walk into every room (mind you, we haven't gotten that far in the bathroom we are presently working on, which could change the way I look at rooms if the project completely blows) and think of the small renovations we could do.  For example, the cheapest renovation to our kitchen wouldn't entail too much - we could pull some of the 2.8 billion curtain rod support brackets out of the wall and patch those wholes (same with the window frames), paint all of the walls a lovely new color, put down the same 'SIMPLE' flooring, call it a day.  There is a lot of power in some putty for the walls, a can of paint, and new baseboards - it would help elevate the appeal of the house and hopefully help in resale, but is my life energy worth it?  That would mean fewer long runs, board-game nights, weekend hiking days.  There are also some MAJOR repairs that are well beyond our ability that I would love to have done - carpeted stairs turned into hardwood staircases, a barely-finished basement turned into a functioning finished basement, and did I mention all of the floors squeak?  :)  For those, in my ideal world, we'd somehow have the time to learn from someone doing those renovations - we'd be an apprentice of sorts.  But, we would definitely need someone who has the skills to pay the bills to teach us. 

I guess at this point, I will let the battle within rage and will take it one project at a time.  Maybe I figure out that I enjoy painting rooms, in which case I know what I am willing to do.  Maybe I learn that cutting baseboards makes me want to crawl over broken glass.  There is a lot to learn from this bathroom project, and I am excited for it.  Since we're still in the early phase, it is looking like it will be reasonable and enjoyable... I'll keep you posted on whether this Pollyanna attitude still exists in a couple of weeks or not!  Calm down - I know you just saw the word weeks and are going - wth Spicy Princess, why are you going to drag it out so long?  Work travel... can't make The Executioner do all the renovations on his own.  ;)

If you have guidance - feel free to dole it out.  :)

Sunday, April 14, 2013

Not What I'm Here For

Last night, The Executioner and I had a productive night of running errands.  We are both non-shoppers, for the record.  We hit 7 different stores over 3 hours - we both were tired and in need of rehydration by the time we got back home. And we'll be good without stepping foot in a store for many months now.

The line that I said again and again (in at least 4 of the stores) was, "Not what I'm here for..." - consumerism is so easy to get sucked into!  At an outdoors/camping store I could have easily spent about 5 times the amount of money we did if I had given into all of the pretty/flashy/new/cool things I saw. Luckily, I was able to remind myself that all of those items were not what I was truly there for.  I figured, if I remembered any of the items today and still felt that I really want them, I could always put them down on a wishlist.  And in the light of the morning, I can remember one of them and it may go on my birthday/Christmas list... but I am not sure that it will.  The reminder last night served for me: you need to be strong to battle consumerism.  Put blinders on before going into a store so you don't get sidetracked by all of the shiny things.

There is one other thought I'd like to share from our adventure last night about the importance of mindset.  On Friday, I received a decent raise at work.  This raise puts my salary at a point that, when leaving college, I never thought I would reach (based on the fact that I was an elementary education major).  The power of the mindset is that instead of looking at this raise and thinking 'sweet, we can buy X, we don't have to carefully plan out how much money we spend on Y, I can get knick-knack Z' The Executioner and I have been thinking 'sweet, we can save X% more each week, that means we'll be saving $XYZ.00 more per month, that means we're that much closer to FI.'  So, to tie it back to last night... there were a few shiny things on the shelf that The Executioner and I thought could be a nice addition to our lives and were tempted to by.  However, with the iron-clad mindset in place, I was able to talk to the fact that none of those things were items we needed right now.  Additionally, they would be excellent items for our family members to give us as gifts, which would also make us really happy.  Win-win situation - my mom is reeled in and not buying us crazy stuff we immediately wonder how we can get rid of, and we get something new and shiny and useful!

 And finally, for the record - the best deal of the night (in my opinion) were my new hiking boots!  I desperately needed them and got them 40% off because I had a coupon, a store credit from a return, and there was a promotion of 10 off of $100 or more.  Now, if they can keep my feet happy during hiking, they will really be the best buy. 

I think the commercials on TV about shopping being a sport and how much effort, work, and energy it takes are accurate - but I think their focus is wrong.  Instead of trying to get the highest amount of non-essential items for the lowest price, we should be focusing on the energy, effort, work it takes to ONLY get the essential items and to do so at the lowest price.  

Tuesday, April 9, 2013

Life Lists

A few weekends ago, The Executioner (referred to from here-on-out as TE in this post [except in one place where I feel the full name is needed]) and I were up visiting my family.  I saw something, and it disturbed me - so, naturally I decided to share it with anyone reading this.  I couldn't sleep and was walking around the house, reliving memories of days of my youth.  I heard something that sounded like muffled screaming coming from my parents' bedroom so opened... just kidding - let's not go there.

Seriously now - my father owns a small slice of heaven in my eyes - he has this cabin that is in the middle of a bunch of woods, no neighbors to see in any direction.  The place has running water from a spring when the land isn't frozen, and an outhouse completes the glorious experience.  TE and I were invited up to spend part of each day there while we visited.  We talked, enjoyed the beautiful outdoors, and just relaxed.  That for my father in and of itself is quite impressive - the man is always in motion, thinking, and more so - DOING.  But, when the weather is right and he's at this place, he relaxes and it is so nice to be a part of.

As we were up there, I noticed (one of) my father's always-on-hand To-Do list.  The thing deserves a Wiki entry all to itself, it is that impressive.  I can't remember a time in my life when I would climb into his car and there wasn't a To-Do list on the passenger seat or on the console.  He has the 'current To-Do' list, that one lives in the car most of the time; the 'Work To-Do' list; the 'Cabin To-Do' list, and I am sure he has more.  He puts EVERYTHING on his lists too - I haven't looked recently, but wouldn't be overly surprised if I saw 'wake up' on his list... just so he could cross it off.  As I looked at the list, many things seemed appropriate.  There were things like 'fix spring line' and 'move wood from cradle 3 to cradle 4' and things like that.  Additionally (this must have been 'Current To-Do'), there were things like 'balance checkbook'.  All tasks I deem appropriate for a To-Do list.  However, a few items have left me reeling.  One was 'Visit The Executioner and Spicy Princess' and one was 'Watch Duke & Louisiana'.  SERIOUSLY?!?!  You have to put 'hang out with your child who you haven't seen in over 2 months' on a list to make sure that it will get done?  Or, is it that you put it on there so you can cross it off and say 'phew - lived through that, glad its done!'?  I have a hard time wrapping my head around a college basketball game being something that he feels he MUST endure.  Either way - I have been left thinking about To-Do lists.

I have been known to make a list.  Mine are electronic, of course, and I do find power in collecting my many tasks into one common document when life is getting a little crazy.  I realized after that visit, that I don't want to feel it necessary to write down tasks I enjoy onto a to-do list to make sure they are accomplished.  I wonder - if my dad hadn't written these items down, would he have not done it?  Would he have forgotten?  Would he have deemed something more important - such as balancing his checkbook?  Would he have felt compelled to do one of the tasks on his list, simply because it was there and 'hang out with family' wasn't?

In that moment of seeing this list - I realized how different I am from him.  He is defined by work, defined by what he gets done on a daily basis.  I am not.  I see myself as many things, and if pressed to list them in order, my occupation would not be in the top 5.  Seeing that was like the saying "stop and smell the roses" - for me it was a reminder to embrace each day.  I don't want to be defined by a list - whether it is a list of what I got done or what I failed to get done.  I want to be able to enjoy life and wake up each day, be grateful for the day, my health, and my loved ones, and take it from there.  I have thought about this frequently since our visit and today I returned to the thoughts on To-Do lists - today was a gorgeous spring day and I would have loved to take my dogs for a long walk, join TE and friends in playing a game of Ultimate Frisbee, or even just sat outside and read my book.  But, my To Do list said I had to jump on a plane and travel for work.

I look forward to when my To-Do list has items on it that are key to helping us live, and are enjoyable tasks.  I also look forward to when there are very few items on my To-Do list, meaning that living life is really at its fullest. 

Saturday, March 16, 2013

Counting Chickens

I'm sure the recent steady rise of stock prices has a lot of people feeling richer -- myself included.  Although I've been reluctant to make many new additions to our FI Portfolio recently, the reality of our finances is that most of our investments are held in long-term retirement accounts which have benefited greatly from the return of markets to record highs.

In a classic case of counting chickens before they hatch, I projected the future performance of our retirement savings over 25 years (the length of time between the average age of my wife and me [34] and 59.5 years old [when current US laws would allow us to start to withdraw money from these accounts without penalty]).  I used the sum of the most recent market values of our retirement accounts (as of last Friday's close) and assumed several different average rates of return to see a possible range of outcomes.

As you can see in the image below, assuming a conservative 3% annual return, we would have a million dollars in our retirement accounts in 25 years.  Each 1% increase in the average rate of return above 3% would significantly add to our nest egg when we reach the government-approved retirement age.  At a 5% annual return, we'd have $1.6 million.  If we can somehow manage to see 8% returns on average, our retirement assets would swell to $3.3 million.

Of course, our investments are not guaranteed to go up.  As an extreme example, we could see a 30% drop in value next week, meaning the starting amount in year 0 of the table would be significantly less, and the numbers in year 25 wouldn't be as impressive.  However, even in that more pessimistic scenario, after 25 years the end result should allow us a modest lifestyle in our golden years.

One thing my table doesn't show is any new contributions we will make to our retirement accounts.  We both get matches from our employers on contributions to our workplace savings plans.  We also expect to continue adding the max amount to our Roth IRAs every year we are earning a paycheck.  So it's possible that the year 25 row values are on the conservative side.

The point of this exercise for me was to confirm my suspicion that we have oversaved for our retirement up to this point in our lives, and undersaved for the 25 -year span between the present and when we are 59.5 years old.  When you also consider that we should get something in the form of Social Security benefits in our 60s, the possibility that we've oversaved for retirement becomes even more likely.

The reality of our current situation is that we have 25 years to bridge, but I don't see us getting our FI portfolio to a point where it would produce enough income to allow us to quit full-time work any earlier than 10 years from now -- given our current savings rate and lifestyle.  By that point we'd only need to cover 15 years until we could tap our retirement savings.  And by then we could probably afford to spend some of the principal of our FI portfolio (along with the income) in order to get ourselves to age 59.5.

I've been trying to come up with creative ways to access our retirement savings early so that we can make a smoother transition to part-time work or early retirement.  Unfortunately the current US tax laws don't have many loopholes to aid people in our situation.

If we happened to see a new bull market in the near future and had several years of significant gains (similar to what happened in the 1995-1999 timeframe), I wouldn't necessarily be opposed to pulling some money out of the retirement accounts early and paying the 10% penalty.  I think this would be an extremely fortunate and unlikely scenario though.

We can withdraw our Roth IRA contributions at any time without penalty.  I think this would be helpful making a final push to get our FI portfolio where we wanted to be.  For example, if in the future we had $500K in our FI account and our goal was to have $600K in income-producing assets, we could take $100K of contributions out of our Roth IRAs and move it over to the FI account to reach our goal.  This won't make a huge difference in the near term, however.  This would likely be a shortcut we could use several years down the road.

We could always stop contributing to our retirement accounts.  This would allow us to divert more income to our FI portfolio.  But since we get matching contributions from our employers, it seems like we would be neglecting an opportunity for free money by making that choice.  Even if we decided later to withdraw from the accounts early and pay the penalty, our employers are matching at a rate higher than the 10% penalty -- so we would still come out ahead in the end.  And as I said before, any contributions we make to the Roth IRAs can be withdrawn penalty-free later, so it makes more sense to me to contribute to the Roths now to allow an opportunity for some income/appreciation to occur in the tax-sheltered account until we are ready to pull the contributions back out.  So stopping retirement contributions seems like a bad choice to me.

My wife has also talked about making lifestyle changes that would help us reach our goal sooner.  For example we could sell our current house and downsize to a very inexpensive location (a trailer in the middle of nowhere) and pinch our pennies while waiting for our investments to compound over time.  This sounds sort of romantic, but it would be a major change and would require us to give up a lot of things we currently enjoy.  I think there is probably a middle ground to be found here, but it would require a lot of planning and discussion so we can agree on what we want from life over the next 25 years.

We could also try harder to change from full-time to part-time work.  However as I've mentioned before, it doesn't seem like there are many opportunities for us to work part-time in our current fields -- employers seem to want to hire professionals for full-time positions only these days.  (As an example, my employer has all but eliminated part-time positions across the firm.  Current part-time employees are "grandfathered" in but no new part-time positions are being offered.)  In order to shift to part-time, we'd need to find new types of employment, and the most common part-time work is found in very low-wage jobs.  It might be possible for us to create our own higher-paying part-time jobs, but it seems to me that getting to a point where one can work in a part-time consulting or entrepreneurial role requires a large amount of up-front effort (in hours, stress, money, education/licensing, etc).  I really don't want to take on a huge commitment for something meant to last only 5-10 years.  I'm not looking to embark on a new 25-year career.  I'm looking for the path of least resistance.

I keep hoping I'll stumble across something new that I haven't considered (or didn't know about) which would help us in our situation.  Until then we'll continue to work our jobs and save as much as we can.

Monday, March 4, 2013

The Cost of Recreation

My boss at work just returned from a vacation with his family.  They flew to Florida, spent several days at the Disney parks, then went on a five-night cruise around the Carribean.  He described to me how buying twelve-month passes to the parks saved his family money, since the cost for a family of four to go to Disney is something like $354 per day (tickets and parking -- not counting food, lodging, or souvenirs).  This is a typical vacation for them -- one they've taken once or twice per year going back almost a decade now.

I have another friend at work who likes to spend time with his (adult) son working on and then driving/piloting various motorized conveyances -- motorcycles, ATVs, snowmobiles, Jet Skis, etc.  He's always saving up to buy a new engine or some other upgrade for one of the machines.

I have a few other work friends who own "ski cabins" up in the mountains that they use as a base of operations for their frequent ski trips.  I have yet another acquaintance at work who is a serious computer gamer -- always telling me about the latest game or equipment he's bought and is spending time on.

The reason I mention all of this is not to commend or criticize any of these behaviors.  I am definitely an advocate for taking time to enjoy life -- "working to live" rather than the other way around.  The reason I mentioned these folks is because it occurs to me that the sorts of things I am naturally drawn to, and which I try to partake in whenever I have an opportunity for some recreation time, are things which don't cost nearly as much as any of the things that a lot of the people I work with do.  The activities I enjoy usually require a bit of upfront cost, but very little in they way of ongoing/maintenance costs.  For example:

Hiking and Backpacking.  I love getting outside and seeing the scenery.  Hiking up to a high point in the mountains in this part of the country is a rewarding experience.  My wife and I have spent many a day together on the trails, either for short day trips or for longer overnight/backpacking hikes.  But hiking costs very little.  All you really need is a good pair of boots or trail shoes and a backpack.  Nothing has to be fancy.  Most of the trails around here are free or have very nominal parking fees, which can be alleviated through the purchase of a yearly pass for around $25 (just over $2 per month).  For the winter months, a good pair of snowshoes comes in handy.

Ultimate (frisbee).  What a great game.  I discovered it in college and have been playing informal/pickup games ever since.  It's often possible to find space to play on a free field in a park.  Discs cost around $10 each.  Cleats are the only special equipment that I use, and not everyone uses them (some even play barefoot).

Board games.  Countless hours of fun can be had for a very small up-front cost.  This offers an excuse to get together and socialize with others on a regular basis -- we've been playing with our group about once a week.  If everyone brings their own food and beverages, game nights can be a very inexpensive way to have fun.  My personal favorite these days is Settlers of Catan (of course including the Seafarers and Cities and Knights expansions).

Other favorite pastimes include reading (usually library books or free eBooks from sites like Project Gutenberg), blog writing and reading, and bicycling (primarily a commuting exercise for me).

I guess I should consider myself lucky that I'm naturally satisfied by experiences that don't come at a high price.  I prefer using my muscles over using motors or engines.  I'm not drawn to activities that require a lot of high-priced equipment or regular usage fees (like hockey or golf or skiing).  I also hit the jackpot when I found a woman who appreciates the same sort of low-cost entertainment as I do.  We've had some great vacations backpacking in some of the national parks for very little cost -- transportation to the parks being the main expense.

For this reason, I expect that once we are able to break away from our full-time jobs and have more hours to fill with recreation, we won't have any trouble filling our days with fun and enjoyment without significantly increasing our expenses.

Sunday, March 3, 2013

Getting A New Dog

It's Spicy Princess here, reporting for the first time.  You'll quickly be able to identify my writing in the future from the ! and :) that will be dropped in.  And, probably most obvious, when you read the title and go "how the heck does that relate to The Executioner's plan?" - bear with me, there is always a connection.

We're not really getting a new dog, but I have named my Rollover IRA Spot, because I am funny that way.  At first I was only thinking about the name Spot with the fact that Rollover is in the name, however after thinking about the paperwork that went into getting Spot into my possession (and by possession I mean loaded with my hard earned money) and all the research I am doing on what I should do with said Spot, it is feeling a lot like a new dog.  I remember when I got my first dog, at the age of 21... I read every book and looked at all kinds of websites to prepare for it and questioned every decision I made.  I am feeling a bit like that again now - at age 21.5 (joking).  Luckily for me, a huge difference in this process is that I have an experienced partner and coach.  The Executioner did some amazing explaining on the what's and why's and showed his patience in explaining some things again and again and again.

So now that I have Spot, I am deciding what type of tricks I want him to do.  I am using the websites, books, and lists The Executioner (TE) has suggested and am hoping to have come to a (somewhat) final decision/plan to talk through with TE within the next week or two.  Work keeps getting in the way of my concentration and learning about Spot though.  I'll be back soon to tell you all about Spot's new tricks. 

Saturday, March 2, 2013

Sitting on Cash

On a daily basis I read as many personal finance and investing blogs and articles as I have time for.  One that I read in the recent past (which sadly I did not bookmark) listed a number of key characteristics that make a successful investor.  One from the list was the ability to remain patient and hold cash for long periods while waiting for opportunities to arise.

I'm not sure that I would call myself a successful investor yet, having dabbled in individual securities for less than a year, but I was grateful for the reassurance.  Since the change of the calendar to 2013 I feel like I've struggled to find many values.  In fact in February I sold two of our holdings (CLF and PBI).  After reflection I felt like I had not bought them at a compelling entry price and decided to get out at a small gain while I had the chance to do so.  I may look to purchase these again in the future if the price is right.  However those were two of the higher yielders in our portfolio and as such our average dividend yield has dropped considerably.

I've made only one new purchase in calendar year 2013.  I have been maintaining a watch list of 20+ companies I'd love to own, but all of which are trading at valuations that make me hesitant to invest.

It's hard to be disappointed in a steadily climbing market, since the bulk of our investments are held in long-term retirement accounts which have increased in value along with the major indices.  Meanwhile, our FI portfolio is stagnating a bit as we have not been putting cash into action in recent months.  I'll continue to research potential investments and be ready for any opportunities that arise.  Should prices drop in the future, it's nice to know we are prepared with cash on hand.

Friday, March 1, 2013

Rollover Complete

My wife's rollover from her former employer's retirement plan showed up her IRA a couple of weeks ago.  In an age of instantaneous communication and same-day asset transfers, it seems strange that a process like this can still take six weeks from start to finish.  It sounds like the administrators of her former plan had to do some research to ensure that the right amount had been withheld from her paychecks over the years.  My wife also had to send paperwork to three different entities to initiate the process, so the coordination between multiple parties also inherently delays things.

Although there were a couple of follow-up questions regarding the submitted paperwork, my wife was able to get everything sorted out so there weren't any major issues.  Kudos to her for making everything happen.  This isn't a role she normally assumes in our relationship, so I know she was a little out of her comfort zone.

She's been talking with me about some ideas for investing the cash, but so far hasn't committed to anything yet.  Still, the extra cash makes a nice addition to our overall net worth (I hadn't been including this in our Retirement assets until the rollover completed).

Tuesday, February 26, 2013

Settling Up

Every year that my wife and I have filed US income taxes jointly, we've either owed money at the end of the year or else we've received a tiny/insignificant refund.  This  year is no exception.  Some people might be disappointed about this, preferring to get a nice refund each spring.  I'd actually like to go to the other extreme and have no taxes withheld at all during the year, and have a huge bill each spring.  That way I'd have complete control over the money until it came due.

Back when we had a mortgage, I asked our lender to stop holding property taxes in escrow for the same reason.  Since then, we've paid the property tax bill out of our own pocket whenever it was owed.  This was good practice for post-mortgage living because there's no option for escrow when the mortgage is gone.

In our case, the property tax bill is quite a bit smaller than the income tax bill, but the same level of discipline is required to plan and save for each tax expense.  Unfortunately most people don't seem to have the necessary skills to withhold taxes on their own, because the US government (and most state governments) requires everyone to have a portion of each paycheck set aside for the end-of year reckoning.  I suppose this makes perfect sense from the government's point of view.  By withholding more than is needed and requiring people to file a return to get back any excess, the government has a much better chance of collecting the taxes it is owed.

Still, it would be nice to have the option to petition the government to stop year-round withholding (on a case-by-case basis) and settle up in a single transaction every April.  I'd certainly apply for this if it was offered.

In the current low-interest-rate scenario, there isn't too much lost by sending prepayments on taxes to the government, but if rates were to rise to the levels we saw 15-25 years ago, it would be plausible to lose an opportunity to earn some decent interest from self-escrowed taxes.

Tuesday, February 19, 2013

Post-Vacation Melancholy

My wife and I resumed work today after a mini-vacation.  We took off Thursday and Friday of last week and used the US Monday quasi-holiday (Washington's birthday, aka "Presidents Day") to make a nice long five-day weekend.  We used the opportunity to go out into the mountains and be away from other people as much as possible.  It was great.

Fortunately both of our employers offer paid vacation.  Although I can't find it at the moment, I believe their stated motivation for doing so is to allow employees an opportunity for refreshment and renewal, so that we can come back to work ready to dive back into the job with sharpened focus and an enthusiasm to produce at optimum efficiency.

There's a catch, though.  Vacations have the opposite effect on me.  Every time I go on vacation, the last thing I feel like doing is going back to work.  Ever.  And the longer my vacation lasts, the less my enthusiasm is for getting back on the job.

I don't think this is a reflection on my job in particular, or my employer in general.  I think it's more of an attribute of my personality.  I've felt this way as long as I can remember.

The worst time of the week is late Sunday afternoon and evening.  Even though it's still technically the weekend, in the back of  your mind you know that Responsibilities lurk just around the corner.  That makes it hard to enjoy what should be glorious free time.

The worst day of vacation is always the last one, for the same reason.

The worst time of the year as a kid was the last few days before school (even worse than the first few days back at school).

Of course, not everyone feels the same way.  I remember during my own school-age years that some of my friends would actually claim they were looking forward to the start of school.  Because summer was getting boring, they said.  There wasn't enough to do, they said.  I always looked at these friends with a combination of astonishment and scorn.  How dare you have the audacity to take your freedom for granted.  You must be batshit insane.

I have relatives who have told me straight-faced that they have no plans to retire, ever.  What would they do with all of that free time?  It would be too boring, they say.

Some company (I forget which one) even went so far as to make TV commercials a few years back with the slogan "Thank God it's Monday".  Are there people who actually feel this way?

I have to admit, I am jealous of people who find passion and purpose in their jobs -- people who actually call their jobs "careers".  For me, I can't imagine finding anything I enjoy enough that I'd happily work on it 40 hours per week for years on end and not resent the lost opportunity to dabble in life's other pursuits.

At all times, I can easily come up with approximately eight billion things I would rather be doing instead of paid work.  Throughout my life I've always had to overcome this urge to do Other Interesting Things and instead focus on whatever my overseers dictated that I do -- homework, projects, assignments, and the like.  So far I've been able to produce just enough output to keep my superiors happy.  I hope I can keep this up for a few more years until the savings and investments allow me to transition to a permanent vacation.

Sunday, February 10, 2013

The Grind

My wife and I are both feeling sick of the full-time employment lifestyle.

My wife recently applied for, and subsequently was hired for, a different position within her company.  The new role includes a modest salary increase, but the biggest perk is that it should require about half of the travel that her current role does.

My wife was thrilled to get the new job, and was all smiles after hearing the news.  But after further reflection she told me that what she really wants to do is move into a lifestyle where she can work part-time, discretionary assignments.  I told her I feel the same way, and have felt that way for a number of years.

Our plan since paying off the mortgage in 2011 has been to maximize our saving and investing for the next few years so that we can stop working at some point in the not-too-distant future.  But as logical as this plan looks on paper and sounds in conversation, the implementation of the plan in real life is pretty dull.  By comparison, paying off the mortgage was exciting.  Really.  Paying off the mortgage was like planning and executing an attack on the Death Star.  Saving and investing is like rebuilding the Death Star.

At a glance we are doing very well financially.  We have no debts, and own our house free and clear.  We have over $500K in savings and investments, of which $100K is at our full and immediate disposal (that is, not tied up in retirement accounts).  We also have no children or other dependents to worry about supporting -- and no plans to add any in the future.

However, to get where we really want to be will require us to continue working full-time for another five to ten years.  This sounds like drudgery to me.  My wife tells me that at any point during her workday she can always think of a million other things she would rather be doing, and I completely agree.

We've attempted to come up with a different way to achieve the same end goal, but so far we haven't managed any better ideas.  We could of course change our goals by downsizing quite a bit (selling our house and living very differently than we would ultimately like), but that doesn't seem like the right long-term choice.  That would be sacrificing our ultimate dream in exchange for some temporary relief from the day-to-day grind.  We could also move to part-time work now, but that would require spending more years in the workforce, and the nature of part-time work is more ephemeral as well -- employers seem to look to cut part-time workers first, so it might be tough to count on that for a decade or more.

For now we continue to wage internal battles with ourselves, wherein our logical sides (which tell us to stay the course) face off against our more emotional/impulsive sides (which want us to abruptly leave work and embark on a six-month journey by foot).  So far the logical side is winning out -- but with each passing day, the temptation to leave it all behind grows.

Tuesday, January 22, 2013

An Offer

Though I've never explicitly stated it on either of my blogs, my wife and I hope to eventually move away from our current house and town to a quieter location out in the woods somewhere.  We'd like to have a large chunk of undeveloped land (preferably forested) to go along with a modest house, tucked away into a quiet corner of the state, away from neighbors, crowds, and traffic.

Though we haven't mapped out a specific plan to achieve this dream, my own preference would be to live mortgage-free in our current house for several more years as we continue working, saving, and investing.  Once we have enough income-producing investments, I'd like for us to scale back our work commitments and look for a way to transition to our future house in the woods.  I'd be open to either selling our current house or renting it out depending on the market conditions at the time, though at this point I think selling would be my first choice.  The sale proceeds could then be used to purchase the new property, using other saved money if needed to avoid taking on a mortgage.

Recently we noticed a property for sale in a location near some relatives.  The house and accompanying woods matched our dream well enough that we decided to explore it as an opportunity to get a head start on our next stage of life.  Unfortunately the seller was asking what in our opinion was an unreasonably high price -- even higher than what it last sold for in 2006 at the height of the real estate market in this part of the country.  Furthermore, the house had not seen any improvements recently, and was in need of maintenance in a few key areas like the roof and the furnace.  After discussing these concerns with our real estate agent, we decided to submit a low offer to see if the seller would be willing to come down in price.

Unfortunately the seller was not willing to even submit a counteroffer, but encouraged us to submit a higher offer of our own.  We decided against doing that.  While the property was nice, it is only a matter of time before the next owner has to spend some serious cash on upkeep.  Because we hadn't been actively seeking to take the next step in our life at this point, we decided not to stretch ourselves thin.  Potential sale proceeds of our current house wouldn't cover even the lower price we'd be willing to pay for the new property, so we would have to take out a mortgage for the difference.

We told the seller that the ball remains in his court.  If he ever decides to resume negotiations, we'll be willing to continue discussion at that time.  Until then we'll keep saving and investing our money.  If someone else comes along and decides to overpay for that property, so be it.  We'll find another one when the time is right.

Even though we came away empty-handed, I'm glad my wife and I had the opportunity to discuss our goals in more concrete terms.  When the next opportunity comes along, we'll be more prepared to act.

Thursday, January 3, 2013


My wife has held several different jobs since we've been married.  Five years ago she left a job with a workplace savings plan similar to a pension.  We received statements from it for the first two years after she left that employer, but they didn't send us statements for the next two years.  I surprisingly had forgotten about its existence (very out of character for me) until we received another statement last week with a letter explaining the reason that statements had not been sent out for the previous two years (something about changes to the plan that made them not want to send any correspondence until it was finalized).

After getting this reminder, I dug into the details a bit more and learned that after two years of leaving her former job, the plan ceased to pay her any more interest (one of the changes they made recently).

What this means is we've had retirement assets sitting in an account for my wife earning absolutely nothing for the past three years.  I'm a little irritated at myself for not following up on this sooner.  The total value of the account was not such that we missed out on a huge chunk of earnings, but it's certainly a non-trivial amount that we could have put to better use in another type of investment.  Regardless, my wife is taking steps to roll this account over to an IRA in her name so those assets can start working for us again in the near future.

Continuing the recent trend of my wife's increased participation in the details of our personal finances, I asked her if she wanted to take responsibility for deciding how the rollover cash is invested once the transfer is complete.  She told  me she'd be up for the challenge as long as I am willing to talk to her about her ideas (which of course I am).  I'll be interested in following her decision process and seeing her take a more active role managing part of our long-term savings.