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.