Monday, June 17, 2019

I'm a Goddamn House Cat

I'm a Goddamn House Cat
Thanks to some changes at work, I've been slacking on all things internet: writing for this blog, reading and commenting on others', and keeping up with the latest nonsense on Twitter.

We just went through a re-org, the first I've had to go through in seven years at this company. That means I have a new role, a new team, a new boss, and a new and exciting level of work and stress that I need to get acquainted with. 

As long time readers of the blog know, I work in procurement and have ever since I was getting my undergrad. I worked in my university's procurement office during the day, negotiating prices and contract language, running RFPs, managing our supply chains and cutting POs, and then went to classes at night to earn my BA and then, later, my teaching credential.

Monday, June 3, 2019

Middle Class? How about Middle Quintile? (2019 update)

It’s been four years since I wrote a post on household incomequintiles, in a vain attempt to reframe the way we think about the middle class. I’ve never liked the way that the term ‘middle class’ was simultaneously poorly defined and yet somehow still critical to the way we talked about finances, the economy, and politics.

Nearly everyone considers themselves middle class.  A household earning $30k can define themselves as middle class, even though a family of three at that income level would qualify for some federal subsidies, being within 150% of the poverty line. But most millionaires also consider themselves middle class as well, absurd as that is.

Either the middle class has a definition that is so broad that it includes both the wealthy and those skirting the poverty line, or it’s a term so poorly defined that anyone can claim membership just based on how they feel.

Tuesday, May 28, 2019

Battling Internet Addiction with a Time Lock Safe

Battling Internet Addiction with a Time Lock Safe
I’ve never thought this blog was meant to help people. For one, I’ve never been particularly good at helping. I have no insights into helping with someone’s nutrition, or the kind of exercise that will finally stick, or how you can get to sleep at a reasonable hour.

Even the thing you’d probably expect me to have good advice on, money, is oddly something I’m not all that good at advising on. The tactics that worked for me may not work for you. We’re outliers in a lot of ways. And just because we’re be able to work towards an early retirement doesn’t mean I have some secret on how to do so; some plan that you can follow, too. 

(If there is any secret, it’s this: we were able to retire early because we earned about double the median household income for the entire time we were working towards FI, and we did so in fairly low cost Arizona after moving here from ridiculously expensive San Diego. That’s kind of it. We might seem more frugal than people who earn as much as we did; but we’re not far more frugal than the median family…who just happens to be stuck earning the median income, too.)

Monday, May 13, 2019

Tariffs are Just Regressive Taxes

Last week I put up a poll on Twitter, asking all three of you readers to decide what I should write about.

Would you rather read a post on tariffs being regressive taxes or, what I assumed would be more popular, our latest life hack that involves a time delay safe?

Apparently a slight majority of you would like me to be an amateur tax policy blogger, so this week I will try to write again about the dumbest part of our revenue system: regressive taxes.

Monday, April 29, 2019

Our Truly Regressive Tax: Social Security

Our Truly Regressive Tax: Social Security
A reader asked me a good question last week, after reading my jumbled rant on systemic problems, and the individual tactics that aren't going to solve them. What, short of running for public office, can we citizens do to encourage systemic solutions?

I have to admit that stumped me a bit. Thinking about changes to the system is nice. Actually coming up with plans to do so is harder.

Executing them? Who even knows how to do that?

So let's give that a try today. Let's talk about the system we use to fund most Americans' retirement: Social Security, one of the few truly regressive taxes out there.

Monday, April 22, 2019

Systemic Problems, Individual Solutions

I've always been a bit of an asshole. While I try my best to be nice, to get along, sooner or later people realize that I'm actually kind of mean.

One of the biggest issues I deal with is being fairly intolerant of others' ideas.

Specifically, I'm really bad at accepting when other people have a different solution to a problem than I think is best. Because, you know, I like my idea.

So let's talk about that a bit today. Let's dig into systemic problems, and talk about the jagoffs who think individual tactics are the right approach to solving them.

Monday, April 15, 2019

Thinking in Bets about FIRE

Annie Duke was always one of my favorite poker players. Like everyone else who watched Rounders in the late nineties, I was immediately hooked on Texas Hold'em and the new ESPN shows devoted to the game. 

Unlike many of the personalities being promoted in WSOP tournaments, Duke wasn't brash or petty or argumentative. Her game was calmly, ruthlessly aggressive: no need to ham it up for the cameras. Duke finished in tenth place (out of 512 players) at the 2000 World Series Championship, while nine months pregnant. 

In the first year of the World Series of Poker Tournament of Champions, an invitation only event where ten of the world's top players competed for $2M, she faced the best, including her brother, Howard Lederer, and beat them all. Take a look at the final segment of the tournament, where she schools Phil Helmuth heads up. After she beats him, he spends the rest of his time on camera complaining what a long shot she was to even be in the tournament. He can't believe he lost to a woman.

Monday, March 25, 2019

The New and Improved Bond Mortgage Swoop

The New and Improved Bond Mortgage Swoop
Last week, we dreamed up the idea of our mortgage swoop, where we'd pay off our mortgage all at once as soon as our financial independence fund got to $1M plus our mortgage balance. The feedback from readers was a little...mixed. With few in outright support of the swoop, I think the general consensus was that even if the plan isn't optimal by the numbers, it is at least simple, straightforward, and good in the sense that being without a mortgage in early retirement can be a pretty good thing on its own.

Then I tweeted out to Big ERN as well as Joe & OG from Stacking Benjamins, just to get the take from some people who know more about analyzing financial options than I do. Instead of just giving his opinion on the swoop, Big ERN threw out an entirely different idea, too.

Monday, March 18, 2019

Our Mortgage Swoop

Our Mortgage Swoop
Ever since we purchased our first home, Mrs. Done by Forty and I have had no idea what to do with our mortgage. When we first got in to personal finance we were against debt of any sort, so we threw every dime we could at our first mortgage, paying it off in just over three years.

Seeing how we did this from 2010-2013, this plan had opportunity costs that are so large that it hurts my heart to even think about it. Still, it felt good at the time.

After paying off the house and enjoying debt-free bliss for a year, we up and bought a couple adorable rental properties, complete with tiny mortgages.

After a while, we realized that opportunity costs are just as real as any other cost. So we took out another mortgage on our primary residence in 2016, just three years after paying it off. I always wished I'd called in to Dave Ramsey's show to tell him that.

Now, nine years after buying our first home, both of the rentals and our first primary residence are long gone, as are our dreams of lording over a real estate empire. It turns out we hate being landlords.

Do we hate mortgages, too? Let's find out, because we're about to pivot on our mortgage once again.

Monday, March 11, 2019

Who Wants a Fight With No Referee?

Since we need to have a fresh injustice each day, the Trump administration is rolling back protections on the payday loan industry, because of course they are.

I don't know why I am still and continually surprised by this administration, but I am.

Why wouldn't they take a look at a situation that has the low-earning, underbanked on one side, and a well-financed predatory lending industry on the other and decide, "You know what? I think we need to take the kid gloves off these lenders. Let's see what the unfettered free market does when they don't have to consider whether borrowers can actually repay loans at 400% interest. The financial crisis was ages ago, anyway."

The good people at MSNBC have a video that explains the situation in an excellent segment titled "Money, Power, Politics".

For a deeper dive, check out this NYT piece that outlines how the one federal agency tasked with protecting consumers has instead put the interests of payday lenders first.

Monday, February 25, 2019

Hitting a Moving Target

Hitting a Moving Target
It is weird to think that this blog is over six years old now. Back when I was starting out in 2012, I was only 32, had only recently started getting interested in financial independence and early retirement, and with the fervor of the newly converted, thought I should be able to knock out that goal in eight years.

Mrs. Done by Forty and I were newly married and still didn't know whether we wanted kids in the near future, or at all. We were living in our first house, a true fixer that was originally a two bedroom, one bath with odd additions for the third bedroom and second bath. We were renting out a room to help pay the tiny, $104,000 mortgage. Looking back at our old budgets, we were frugal. Our annual spending barely tipped over $30k, after we had the mortgage paid off.

I figured retiring by forty would be pretty achievable.

But a lot's changed over the past six years. 

Tuesday, February 12, 2019

Work Optional: Rebranding FIRE

Inspiring, thoughtful, and detailed to the point of wondering if a book can be too well researched, Tanja Hester's Work Optional examines financial independence and early retirement with a scope that sets the book apart. This easy read can surely introduce "FIRE" to a newcomer, while forcing long-time enthusiasts to question how well they've really thought their early retirement plans through.

Engaging and thought-provoking throughout (no small feat considering most people will get up and walk out of a room to avoid a discussion about money), Work Optional deserves a spot beside A Simple Path to Wealth: the two books you should share with a friend or coworker asking what this whole financial independence thing is about.

Hester manages to balance the small-but-necessary details (for example, have you, thirty-something early retirement enthusiast, budgeted for the fact that Medicare will only cover 60% of your medical expenses thirty years from now?) with the motivating, why-are-we-doing-this big picture items. (What kind of life do you want to live? What does your ideal day actually look like?)

Monday, February 4, 2019

The Wage Gap, & Sharing Salary with Women

The Wage Gap & Sharing Salary with Women Coworkers
Source
"We are labor. They are management," Ang, my coworker friend from the other side of our cubicle wall, reminded me.

"I know. But I'm new."

Without me realizing it, as a 21 year old employee who knew nothing about anything, Ang was mentoring me, as well as advocating for me to be reclassified. I was technically doing the work of a buyer, while being paid as an administrative assistant. 

If she was right, I'd be reclassified into a new role with a higher salary. But submitting formally for a reclassification was tricky: we had to involve the union, human resources, my own boss. And it might not work, which could be a career limiting move. Would my boss view it as a slap in the face?

Monday, January 14, 2019

College Plan? Undeclared.

Two days after Christmas, we closed on the sale of our second, and final, rental property. We got a full price offer, too. (Minus having to give the buyers a $2k credit towards closing).

It is hard to describe how good this feels.

Though I was a bit nervous right up until the day the check cleared. A previous buyer on this property backed out at the last second, even after we agreed to fix the major items in his inspection list. So I wasn't going to declare we were officially-and-forever out of the rental business until the papers were signed.