Budgets and Plans

I started this post back in March.  I need to update it again.
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Let's take a look at my financial freedom/semi-retire early plan again.  I admit it, I am a total scaredy-cat when it comes to quitting my stable, good-paying job.  I'm going to be updating my spreadsheets into my 60's if I don't get up some courage to just jump.  Or die at my desk.  That alone should make me want to quit.  What am I afraid of?  Running out of money and being too old or ill do make any more.  So, with that in mind.  Here is my current plan.

I have re-adjusted my minimum budget and removed health insurance.  My previous plan was to get insurance through Medicaid because that is what the ACA site told me I would qualified for.  Now, in Arizona, they have changed the requirements and any able-bodied person will need to work or volunteer 20 hours a week in order to qualify.  That is fine but if I am working part time, then I am just going to use that money to buy my own insurance.  When I looked up available plans, the cost was between $300 and $600/m.  I did not look up plans through the ACA exchange because the site won't let me see plans without putting in a lot of personal information and I don't need to do that now.  Maybe I will qualify for a subsidy but I am going to assume that I won't and just go with the highest price of $600 as my goal.  I can pay for that with a part time job, or selling on Ebay, or maybe some sort of small home business.

Back to the budget.  This is the minimum that I would need to survive. I know people will have comments.  Gas prices I can't control, only how much I drive.  I was spending a little over $400/m on food but I was buying a lot of junk food and eating a lot too.  I changed my diet, reduced my portions, and my bill has been closer to $50/week so I know it is attainable.  Maintenance is too low.  Car and home maintenance could be expensive.  Also, dog costs.  One vet bill will blow the whole budget.

So, what will I do about that?  Here is my income plan:

Rental 1- $1,050
Rental 2- $700

Subtract property management, taxes, insurance, maintenance.  Let's call my net profit $1,100 for both.  Since my rental income is not stable, as you know from previous posts, I am saving an additional amount, I call it the freedom fund.  I figured out how much I would need starting back in July of last year until I am 59 1/2 and can take money from my 401K.  That is 161 months or 13 years and 5 months.  I am adding $2K each month to my fund and subtracting $700 each month from the total needed since I'm getting older.  Where the two columns meet is where my freedom point is.  May 2020.  48 years old.  You might notice that my freedom fund did not start at $0.  I put $52,000 from the sale of my home into the fund to start, then I came up with this plan later.

Income:
Rentals: $1,100/m
Freedom Fund: $700/m
Total= $1,800/m

Budget: (-$700)
Health insurance: (-$600) part time job or business

Hooray for wiggle room and hopefully enough to get me through a rental income drought. 
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Now it is almost June.  12 more months until I've saved up enough for this plan.  A few expenses have gone up.  My cell phone plan went from $15 to $20.  I put my mother's car in my name.  The registration is $60 and the insurance is more although I plan to go back to liability coverage only once I move out to my property.  My portion of the inheritance will go to savings for rental house maintenance and making my tiny house and property livable.  But the house has to be sold first.

This week has not been as fun as I had hoped.  Working from home comes with its own set of challenges.  Mostly I don't like being isolated from my coworkers even though I only have one regular coworker in the office.  Maybe I just don't like that she is on vacation and everyone is asking me for answers that I don't know.  I would also need my computer and two large screens for my home office because working on a small laptop is frustrating.  Next week I will be back in the office.  The following week, my coworker will be traveling and I will be working from home again but she will still be working so I shouldn't get the questions that I can't answer.  The week after that, my sister will visit and we will sort through the contents of the house.  Then the week after that I'm traveling to our corporate office for a few days.  That pretty much takes care of June. I hope it is a productive month.

Hello, Again

I took mom to the lake this weekend.  Not much happening there.

I don't know about you but to me these weeks are just flying by.  Now that I don't have a mortgage, I need to get serious about saving for my early-semi-retirement, or job change, or long vacation, or whatever you want to call it.  The sale of my house gave me $50k to start off the fund and it is invested in a mutual fund.  I figured out that I can realistically save $2K a month.  My goal is to save enough to give me $1,000 per month until I am old enough to start withdrawing money from my 401k.  I should reach that goal in three years.  Ugh, three more years.  It seems too far away. 

My original plan was to just eliminate my debt and live off of my rental income but that income is unreliable at times and this $1,000 a month will give me a cushion when the rentals are vacant.  Also, health insurance is still an unknown.  There used to be a lot of low cost major medical plans and plans with health savings accounts but they seem to have disappeared.  Now, when I put in my expected income, the calculators say that Medicaid is my only option.  I don't know whether that is good or bad.

Since I just had a birthday, three years from now will put me at 49.  Maybe I should just go for 50. Or maybe I should stop putting it off and just jump ship now.  I don't want to regret leaving a good job too soon but I don't want to regret missing out on other parts of life.  Will I ever find a balance?

On to the update:

Rental house 1- Rented with a good tenant who pays on time.  After putting some of the rent aside for taxes, insurance, and maintenance, I have $600 to go in my early retirement account.

Rental house 2- Rented.  After expenses, I should have $500 for my early retirement account.

Mobile home - My nephew is living here and I only charge him $50/m plus whatever the electric bill is.  There is a water tank there with 2500 gallons of water.  If he uses it up he will have to get it filled at $150 per 3000 gallons.  He doesn't have a job yet.  I told him that if he lines up an interview then he can use my truck and then when he lands a job he can buy it from me for minimal cost.  So far, he hasn't taken me up on that offer. 

Tiny shed-house - I hated to do it but it is stuffed with my extra belongings right now.  I didn't have time to downsize like I wanted too.  I wanted to leave it empty so that I could get the wiring and plumbing, walls and floors done with ease.  That plan has been put on the back burner but it is still my goal to live there in when I semi-retire.

The house I live in now is owned by my mother.  I don't pay rent but I pay all of the utilities.  My side of the house is full of boxes that I need to sort through.  It is always on my to-do list but I rarely have time for it on the weekends.

Pets- I still have my three dogs.  I'm not fostering right now but hope to get back in to it when I live in my tiny house although it will be crowded.  Perhaps the mobile home can be my kennel. Who knows what things will be like in three years.  One of my sisters is moving to Texas, the other is moving to Ohio.  Maybe I'll decide to move.  I can't say I haven't thought about it.

The Ever-Changing Plan

So much has been going on, and yet, so little actual change.  Most of the changes are just in my future plans.  For instance, my mother and I were talking about her moving in to my house and I was going to enclose my carport so that she would have her own space on the opposite side of the house furthest from my dogs.  It seemed like the most cost-effective move.  But, the more we talked about it, we realized that my mother would be bored at my house, far away from her friends, church activities, and transportation.  She lives in a 55 and older town 45 minutes away from me and I didn't think that I would be allowed in.  After doing some research, I found that anyone over 18 can live in the town as long as one resident is 55 or older.  Also, if the 55 and older resident dies, the other resident can remain living there it they are 45 or older (although I probably would not want to). 

The next hurdle was finding an area that we both agree upon.  I took a half day off last week and we drove around looking at neighborhoods.  I liked the houses on one acre lots but Mom needs sidewalks to walk on and would prefer a house with a front porch to wave at people as they walk by.  I would also like a large backyard so that she and I can both have our areas to do with as we please.  We found a neighborhood close to where she lives now.  It has a homeowner's association and I was worried that they would limit the number of pets per household.  I looked up the rules online and was pleasantly surprise to find that they do not but I will still have to make sure that my dogs don't bark and annoy the neighbors.

Bark? Not me!

Ok, if we actually did this moving in together thing, Mom would need to sell her house and I would need to sell my house.  So, now I am back to the plan of downsizing and then fixing up the house to sell.  This is after my nephew graduates and goes to live with his grandfather in May.  This plan seems like it might actually work if we find the right house so that we can maintain our own privacy yet be there for each other when we need to be.

What will this plan do to my early retirement plan?  Probably delay it because my house money will be tied up in another house and I might even get another mortgage, but if that is what I need to do to keep Mom out of a nursing home then I should do it.  I'll just keep paying down the mortgage and saving more money and someday I will be in a very good position to retire, hopefully, still early.

8% Interest Plus 4% Inflation

We had our yearly retirement seminar from our 401k administrator today. The future looks bleak. He said we need 80% of our income in retirement. We must invest enough to achieve this with an 8% average return minus 4% for inflation. Good luck with social security, if there is any left. Oh, and we are probably going to live for 25 years in retirement. With his plan, I don't think I can ever retire. Good thing I have my own plan.

I did learn one thing, that my employer's contributions to my 401k are not completely vested until year 5. I am only at year 3 1/2. I don't think I am going to make it to 5. I don't think it is very much money. Maybe a few thousand. Certainly not enough incentive to stick around longer at this job. My 401k is merely my back-up retirement plan anyway. Heck, if my current plan turns out well enough I can give my 401k to charity. Wouldn't that be nice?

Brainstorming Again

I have been thinking about what I would do if I lost my job, or quit my job before my early retirement plan is complete (meaning that I didn't have enough reserve money to live on for a long period of time). Ideally, I would find a new job quickly but with the way things are right now I don't think I could count on that. If I lost my job then I could get unemployment benefits which would help a lot. But if I quit my job then I wouldn't have any money coming in.

Let's assume that I quit my job at the end of this month. I would also like to assume that my renter has caught up on the rent and is paying regularly (I hope that happens by the end of the month). If I sold my RV for $7,000 and sold my stocks for $3,000 and used my $3,000 emergency fund, I could put $13,000 towards my mortgage. I would still owe $3,000. It would take 5 more months to get rid of the mortgage by paying the minimum, which would be covered by the rent. That means I would have to find a way to support myself (and the dogs and cat).

Looking at my budget I would be able to cut propane out because I wouldn't need it without the RV. I would love to cut my phone bill but I am stuck in a contract until September. I noticed that Verizon cut out their cheap plans. My $50 plan (after taxes and fees) is the lowest that they offer besides the $20 for 100 minute basic phone plan that isn't even advertised. But after September I could cancel it and use Skype if I really needed to.

I don't think I could bear to part with the internet. It is my lifeline and entertainment and the library is very far away. I don't have a water or sewer bill. Well, I take that back, I buy drinking water but it only costs about $8 a month. I suppose I could make the dogs drink rainwater. That would save me around $6/m.

Food is my biggest downfall. I go over budget on food every month especially since I got the dogs. If I wasn't working I would have plenty of time to do what this guy did at Grocery Coupon Guide
He maximised his coupons and deals and lived on $1 a day for food.

So, my minimum budget (with a major medical health insurance plan in a health saving account) would be $530 per month. That's still a lot of money to make appear out of nowhere. I hope that I could sell $100 worth of stuff for a few months. That wouldn't last forever but it only needs to last for 5 months until the mortgage is paid off and I have rental money coming in that I can use for myself. I should be able to use $550 of the rent for myself and keep $200 for taxes and insurance.

(oops, I just realized that I forgot to subtract the RV insurance and registration. So I can subtract another $30 but I should probably add that in to my Christmas fund, or birthday fund.)

If I did get a home health aid job part time then I would bring in $663 per month after taxes. Problem solved. But if not I could offer to check on people's pets in their home. Hopefully I could make $200 a month at that. With selling $100 of my stuff, I'm only up to $300 a month. I think I would have to offer to clean houses too. That might bring in another $200 for a total of $500. I am still $30 short. I have always wanted to try those websites like cafe press where you can sell you shirt/mug/hat designs. I've never had the time but if I was jobless or partially employed then I would have the time to investigate. Maybe I could even earn $30 per month at it.

The best choice, obviously, is to not quit my job until my mortgage is paid off. And if I can make it that long, keep working until I have enough financial reserves so that I don't have to take another job that I might grow to hate (like cleaning houses, not that there is anything wrong with it...except for the bending, crouching, kneeling part).

I'll take one day at a time and hopefully I will make it. Another weekend is only one day away.

How Much Longer?

This work stuff is really a drag this week. I just don't know how to get any cooperation from my annoying co-worker. I ask him about a project and he tells me to ask someone else. Then he gets mad when I ask the other person. The next time I tell him ahead of time and ask him if he wants to be copied on my email. He says yes, then gets mad when I send out the email and tells me that I have nothing to do with the problem I am asking about. My boss is on the other side telling me he needs an update NOW so he can tell the customer when their stuff will get done. I don't understand why coworkers aren't more helpful. We all work for the same company, we are supposed to be a team.

When my mortgage gets paid off it will be extremely tempting to quit on days like today. If I don't need the money I can't see staying here and putting up with the attitude. Life is too short for that. It's not like we do humanitarian work or anything.

For now though I will play nice even though I know the problem will come up again because I still don't know the correct way to deal with him. I have a feeling that there is no correct way. He rants at everyone except the big boss. I feel a little sorry for the person who will get my job. But maybe they will know how to handle things better than I do. Very soon I will be able to give someone else that chance.

Treading Water

Ahh, Thursdays, my favorite night. One more day until the weekend, I get to watch The Office and Bones, and I get to wear jeans tomorrow. Actually it's the Olympics today and that is interesting too, or at least it would be if that channel would quit saying "No Signal". Ah, digital TV. It's supposed to be so much better. At least with analog I could still watch a show through the static.

Work was ok today. I actually got a few things accomplished and I can see some of my desk again. The only problem is that for every one thing that I get done, I have to ignore 10 other things. I have had a few jobs where I have been so overwhelmed that I did everything badly. My first job was at a pet store. It sounded fun but it most certainly was not. All I did was feed and clean and chase the puppies, then get yelled at because things were not clean enough. That job only lasted a month before I quit. Then there was the nurse's aide job. That time I was supposed to clean and feed and chase 12 elderly residents. I think that lasted 2 months. I was never happier to quit a job than that job.

At least with my current job no lives are in danger...well, not directly. We make parts that go in washing machine timers as well as many other things. If anyone has been harmed by their washing machine timer...IT WASN'T MY FAULT! I do the best that I can with the information I have. Of course I could be more organized. Everyday I hope to get organised. Instead I settle for cleaning off the space in front of my keyboard. If that area is clear then I am doing well. It's kind of like treading water. I hope I can keep treading until I have earned enough money to keep myself afloat without all of the struggling. That is the goal in the end. Only a few more years of treading water and I'm sure I'll get to that point.

Retirement Fund Rebound

I got this link in my inbox today from my Vanguard retirement account.
Why So Many Americans Are Broke. I didn't think it was a great article. I especially thought point #3 was crazy. First of all the research was from 1981. Couldn't they find anything more relevant, I mean gas is $3 a gallon now. They expect me to drive 20 minutes to save $5? Besides the gas, my time is worth more than that. Maybe if I had other errands in the same area, but I don't want to make a special trip.

I kind of have the same dilemma right now. I want a $19 RV sink that is located 45 minutes away. I could make do with a single bowl sink for $25 and buy it close by but I really want a double bowl sink so I am waiting until I can combine the trip with another errand on that side of town. I have to wait until Sunday but I don't have an immediate need for the sink (other than I just WANT IT NOW). If it was just the $5 savings ($6 in this case), I wouldn't drive all that way. But because it is a hard to find size plus a good price, I am willing to drive across town.

Besides the amusing article from my retirement fund, I also checked my balance and was pleased to see that it was only $500 away from it's peak back in 2007. Hopefully it will keep gaining and make up for the last 2 pitiful years.

Shooting For The Moon

I was talking to someone today who is putting a large amount of money in to peer to peer lending. He is very excited and sure that he will double his money in 5 years with a 12-14% interest rate. He is so sure about this plan that he is using most of his retirement money in the hopes that he can re-coup the recent losses and put his 10 year retirement plan back on track. I sure do hope it works out for him. That is more risk than I am willing to take although he doesn't admit there is much risk at all.

My retirement plans are much shorter. I would like to have the option to retire in 2 years with any additional work time padding my bank account. I'm not willing to try any risky investments for such a short period of time. Perhaps after I have reached my retirement goal, I will have extra money to use for creative investing. But even then, it will be small sums that won't derail my life if I lose them.

401k Or Mortgage?

Finally, my 401k has enough money in it again so that I could, if I wanted to, pay off my mortgage. That's after 21% tax and the 10% penalty. I'm not exactly sure how much tax would be taken, I'm just estimating. A few months ago, I could pay off the mortgage if I used the 401k and all of my savings. Now I could keep my savings. That is fun to think about. Of course I won't do it.

My 401k still isn't up to it's highest point (where it was in 2007) yet but it has been steadily climbing. I plan to keep it as my second retirement fund. With inflation I'll definitely need more money in 20 years. Plus, if I intend to continue hobbies like this dog rescue hobby I had better have a back up plan. Something tells me these dogs aren't going to support me in my old age.

What I Will Do When I'm Semi-Retired

Sometimes people ask me what I plan to do after my mortgage is paid off. Initially, back in 2007, I thought I would quit my job right after it was paid off, get a part time fun job or start my own business, do some traveling, volunteering and basically whatever I felt like doing. Now, with the job market the way it is, it seems more prudent to keep my job a bit longer.

So, here are some of my options:

Option 1: Keep working but take 2 extra weeks of vacation without pay. That would give me the opportunity to visit my family in Washington 3 times a year and then I would still have a week to split up and use one day here and there to make some long weekends to visit other people. Maybe take an extra week off to visit a friend and his family in Europe (You know who you are. I believe I signed a fairy god-mother contract requiring a visit). I am leaning towards this plan for maybe 2-3 years after I pay off my mortgage. I could save $15-20k per year ($1200 that was budgeted for the mortgage + $600 rent per month) for whatever dwelling I decide to purchase or build or for refurbishing the mobile home I have or just keep it as a big emergency fund. The problem here is the temptation for lifestyle inflation but I will try to keep it in check.

Option 2: Quit working and move to Washington. Move in to my sister’s basement and be her nanny. Although this might be fun for a week, I don’t see this as a long term option. Plus, I don’t want to live there in the winter.

Option 3: Quit working the full time job and become a snow bird. Spend the 6 months of summer in Washington and the 6 months of winter in Arizona. Get involved in volunteering. I could try to find seasonal work or try my hand at some artistic endeavor. This plan would be a little financially shaky. Although I would still have $600/month coming in from rent (assuming I continue to have good renters) and my very basic expenses, including a budgeted category for a health saving account, are only $600, any emergency would stress my finances. If I could find reliable seasonal employment then I would be fine since that income would be saved for large expenses such as major vehicle repair, skin cancer and dental care. Those are expenses that I know will come up every 2 years or so. If I did this option I would also like to buy a small travel trailer (vintage 50’s-60’s if possible) or one of those cabover campers for my truck so that I can have my own little home when I travel and I can bring my cat.

Option 4: Keep working and buy a manufactured home for $40-50k to replace the old mobile home on my property. Drill a well for $30-40k (ouch). Foster kids, horses, dogs…whatever wants to live with me. Try not to become that crazy lady with all of the animals.

Option 5: Keep working for a while and buy a manufactured home so that my parents can be Arizona snow birds and escape from the snow. I would also need to drill a well. Fix up my shed and turn it in to a cabin so that I can have separate living quarters. Sell my big RV. Maybe buy a little trailer.

Option 6: Work until I can buy a manufactured home to replace the mobile home, then quit. Sell RV. Fix up shed. Rent out manufactured home for added income. Buy a little trailer and go wherever I want. Come home to the shed-house when I feel like it.

Option 7: Quit today! Liquidate my 401k, pay off house, sell big RV, buy little trailer or cabover camper and run away! Visit people, volunteer. Some days I feel like doing that. I need to stop looking at campers on craig’s list. It only adds fuel to the fire. But it's fun. :)

Option 8: Keep working. Get a construction loan and build a traditional site-built 3-4 bedroom, 2 bath home for $200k. Join on-line dating and find a husband. Start a family. Hopefully quit my job when the kids arrive and let my husband pay the mortgage. Or keep working, adopt school-age kids and pay off the house in 10 years.

I could keep going forever. I suspect I will do a mix of all of them. I think option 1 for a year or two depending on how long I can stand living in my RV. I really want to get off wheels. It just depends on the circumstances down the road and that’s part of the adventure, right? I'm going to link this post with my Things So Far Post in the About Me section so that people know what I am doing...or at least what I'm contemplating.

Liquidate The 401k

Today's news was filled with sensational headlines about the swine flu so I decided to make my own sensational headline. 3 months ago, when I got a pay cut, I took one of my mortgage spreadsheets and figured out how soon I could pay off the mortgage if I cashed in my 401k. I have many mortgage scenarios. For a while one of them tracked my mortgage payoff date if I sold one acre of land out of the 4 that I have. I crossed that point in January. I estimated that I could get $50k for my one acre (if someone would actually buy it) and my mortgage amount was $50k. My mortgage is at $47k now so I deleted that spreadsheet.

My next spreadsheet tracked my mortgage payoff date if I cashed in my 401k. I mis-calculated a few months ago and thought that I would have to work until August to reach that goal. I checked my 401k today, subtracted taxes and the 10% penalty and found that I have already reached that goal. It did help that my 401k balance went up a little in the last few months.

401K= $31k
Savings= $12k
RV= $8k
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total= $51k
mortgage= -$47k

Yea! Another goal met. My next goal is to not have to sell the RV. I will reach that goal in July. Then after that it will be to not have to cash in the 401k.

I like to do this because it makes me feel more secure when people around me get laid off. If I got laid off right now I could pay off my mortgage and I would have $600 a month coming in from my rental house. $600 a month would cover all of my basic bills and would give me the luxury of finding a job I loved. That is my goal, to not have to get another dreary job just to pay the mortgage. Of course it would totally screw up my long-term retirement plans but as each month goes by and I make my extra mortgage payments I won't have to choose between my 401k and being mortgage free. I can have both.

Retirement Plan B and C and D...

I read two articles on MSN Money within days of each other. The first, Rescue Your Retirement
offered the suggestion that people who are ready to retire and who lost a large amount of their retirement nest egg in the market could simply sell their big expensive house, move somewhere less expensive and use the extra cash to replace what they lost in their retirement account. Gee, so simple.

The second article, Seniors Crushed By Housing Crisis talked about people who are ready to retire who were counting on using the equity from their home to fund their retirement. Either they planned to move but can't sell because of a slow market or their home has lost so much value that they can't afford to move to the place of their dreams.

So, if you didn't plan on using all of your financial resources, such as your house, for your retirement, then you are still in good shape. If you did plan to use all of your resources then you are out of luck because you can't afford to retire now without doing something drastic like moving in with your kids or living in a trailer park...unless, of course, that was your original plan and then you might not even be able to afford that!

A better plan, it seems, should have lots of alternative retirement plans. I am not counting on social security or the sale of my property in my retirement plans. I am counting on my 401k and income from my rental house. If my 401k crashes (like it did last year) and my rental house goes vacant (I hope not!) I can still sell my property and move in to a trailer park. It's better than nothing I guess.

Forced Vacation Is No Fun

We got an email at work today that said the company will be closed for Christmas Eve and New Year's Eve in addition to the usual holidays. More days off would usually be appreciated but this time we have to use our own vacation days. If I was planning to use vacation days for that time I wouldn't mind but I wasn't. Actually, I have been carefully saving my vacation days and even managed to keep 2 days extra from this year. Guess I have to use them now. It would be nice if my time off was spread out a little more. Last year I took 3 days during Christmas, then 4 days in May and 3 days for Thanksgiving. I had to wait 6 months between vacations! Now I just came back from vacation and already I need to plan 2 five day weekends at the end of the month (the other days are company holidays). It is too soon to go back to Washington and airfare is over $500 anyway. Maybe I'll try to go to Texas or California one weekend. And maybe if I am motivated I can actually get something done around here like painting a shed!

I'm not really annoyed. There are much worse things than forced vacation. I am very glad that I still have a job to complain about. One of my mortgage spreadsheets calculates how long it will take before I wouldn't HAVE TO get a new job if I am laid off. In this scenario I would need to work for 9 more months and sell most of my stuff including my RV. My house wouldn't be paid off but it would only take one more year of regular payments, paid by my renters, before the mortgage would be gone. I figure I could hang out with family and get a part time job for a year or volunteer somewhere. After a year I would have some income from my rental house. I wouldn't have a lot of money but it is comforting to know that in only 9 months I won't have to worry if I lose my job. It isn't the ideal plan but I know if I can make it 9 more months, then I can make it a few more months after that and a few more after that as I save my money and my plan gets a little more secure with every step.

I Know, I Probably Shouldn't Be Looking

But I just can't help it. It's sort of a morbid curiosity. With all of the bad news about the economy, it really doesn't mean anything unless it affects me personally. So, I looked at my 401k...again. Last time it wasn't so bad. With my contributions included, it only went down $5,000. This time it is down $14,000 since last year. 20%...Ouch. Ok, that is personal.

I feel bad for the people that are retired or were planning on retiring very soon. They probably have to keep working for a while longer, although here's an article from MSN Money that explains why working a few more years might not solve the problem. How To Rescue Your Retirement If they were smart they might have moved their assets to more stable investments. If they could find any.

I also noticed that one of my stocks made the news. General Motors is down to $4.76. I remember back in 1999 when I bought my first share for $80. Ah, the good old days. Luckily, I'm not depending on GM for my retirement. I'm counting on a nice mix of stocks, rental income, real estate and working forever :) I'm just kidding.

Mortgage Progress for October

I've reached $55k!!! Ok, the balance is $55,507.57 but $55k is shorter. I paid an extra $1,400 towards my mortgage for October. I was going to add $200 more from the money I saved by buying grocery gift cards with my stimulus check and the $125 sign on bonus for opening a Chase checking account but since I haven't figured out what my next step will be, I decided to hold back a little.

Here are my current courses of action and the length of time until the mortgage is paid(I can only pick one):

1. Sell one acre for $50k, use $40k profit to pay off house. Length of time: 5 months
2. Move back in to my house after my short term renters leave in February. Put an extra $400 towards mortgage and move out one month a year to rent to short term renters. Length of time: 2 years 6 months
3. Move back in to house now. Move out one month a year for short term renters. Length of time: 3 years 3 months
4. Let current renters stay and tell short term renters to find somewhere else. Length of time: 2 years 6 months
5. Allow short term renters to stay one last time, then rent to long term renters. Length of time: 1 year 9 months
6. Use $10k from savings and mortgage pre-payment money to renovate mobile home and rent it out for $550. Length of time: 2 years (added bonus- an extra $300/m for my semi-retirement)

I have been trying to follow plan #5 but plan #6 has some long-term benefits. An extra $300 in rental income plus the $600 from my house once the mortgage is paid off will make my semi-retirement plan MUCH easier. Plan #6 needs more research. We'll see what the electricians say on Saturday.

The good thing is that it is MY plan, not the banks so I don't have to pay fees for refinancing or call them if I am short one month or my priorities change. I know I have been lucky. I found a job relatively quickly when I was laid off 2 years ago and I haven't had any major medical or repair bills. And that is exactly why I want to pay off my mortgage and move on to other chapters in my life while I am still able!

A Little Feel-Good Video From Vanguard

Human resources sent out an email to the whole company today telling us to go to the Vanguard website if we have concerns about our retirement plans. Here is a little Vanguard video to reassure us that everything is going to be ok.

Basically it says we should all do nothing. That is easy for us folks that have plenty of time before retirement. If I was one of the many people who were going to retire in the next 5 years, I think I would be worried. I am one of the youngest people in our company. There are many that have been there 40+ years. Not to be pessimistic or anything but it seems to me that if you work in to your 70's and all you've ever done is sit behind a desk you might not have the health and longevity to make it to your 100's. Still, that would be a good 30 more years of retirement to have to pay for. I would hate to work until I was 70 just to use all of my savings on a nursing home.

Anyway, I will do what Vanguard says and do nothing except continue my monthly investments. I think my money is diversified enough so that I don't have to worry...let's see...401k mutual funds-not doing well, individual stocks-not doing well, real estate-not doing well, undeveloped land-not doing well, collectibles-not doing well, coin collection-um, hey, I think my coin collection hasn't gone down in value. Oh wait, the dollar has weakened. Hmmm, maybe I should go buy some gold bars. I still have a job. Those are becoming pretty scarce. Right now my job is my most valuable investment. Funny thing is, it's also the thing I want to get rid of the most.

I Couldn't Resist...I Peeked At My 401k

I wasn't going to look at my retirement fund. I didn't want to be depressed. But I just couldn't help it. It was around the $70k level 2 years ago when I got laid off from my job. I logged in to the website and the total was...$67k!

Wow, I thought, that barely went down at all. But then I looked closer. My new job has a retirement plan with Vanguard, just like my old job did. I didn't ask them to, but they now combine my 2 accounts in to one statement. Soooo, while my balance is $67k, that includes $4,000 that I have contributed from my new job. Bummer. Looking closer at the statement, my account was at its highest point 2 years ago at $73k. Now that account, without my new contributions is only worth $63k. I've lost $10k on paper. But I am still contributing and possibly buying in to some great mutual funds right now. I am sure things will turn around and when they do my little funds will soar.

When The Economy Gets Shaky, Stick To The Plan

I try not to dwell too much on the news. I can't control much of what is going on. The best thing I can do is to stick to my plan...no extra spending, pay down the mortgage, keep my job, keep expenses low.

Another week of work is about to begin and I have a bad attitude. I have to keep reminding myself that it is my job that will enable me to pay off my rental house and retire early. That will only happen if I don't quit early.

Here's what I did this weekend to amuse/frustrate myself instead of spend money.

I attempted to complete my airbrushed flames project.


I wasn't completely happy with it so I watched the Flames video again and ended up painting over it and trying it again 3 more times. Now I am completely frustrated. I had to stop before I tested the motorcycle tank cover's aerodynamic abilities. Maybe I'll try again next weekend.

And now for my usual chores. I filled my RV water tank with filtered rainwater from my collection tanks.


I did my plumbing-less laundry by hauling buckets of water to my washing machine.


I used the wash water to water my baby trees.


I defrosted my freezer and threw out all of the ice blocks that were once edible food.

Before:

After:

Now I know exactly how much food I have. I thought I had a lot more but frozen shriveled hamburger buns and veggie burger ice blocks from last March really don't count as 'food'.

My RV fridge seemed to be cooling well at first. The freezer side freezes but the fridge side hasn't dropped below 50°F. I was just thinking how nice it would be to have all of my food in my RV instead of half of it next door in the mobile home. I could use the RV freezer and ignore the fact that the fridge side won't get cold or I could shut it off and go back to the way it was with my freezer food next door. What I am not going to do is pay the RV repairman $80 to show up and $70/h! If I have to buy a new RV fridge on the day before I sell this RV then that's what I will do (we are talking about over $2,000 for a new one). My mini fridge works just fine for now.

The Early Retirement Personality

When I start talking about my early retirement goals and what I am doing to reach them I often get the same reaction...You'll be bored, Won't you miss the challenge of working? Won't you miss the people you work with? Why would you want to make such huge standard of living sacrifices now? How can you live on so little? I could never live without-cable TV, a house, eating out, the latest electronic gadget, expensive vacations, expensive clothes, my toys, a new car/truck/boat...etc.

I was beginning to think I was just weird until I found other like minded people on-line, people willing to challenge the typical notions of 'fun' and 'living well'.

I took a personality test last year when I tried out an on-line dating site. This was a temperament test. There are 4 temperament categories: Sanguine, Choleric, Melancholy, and Phlegmatic. People are usually a combination of 2 temperaments. You can read the descriptions here: Four Temperaments I am 65% Melancholic, 35% Phlegmatic.

That started me thinking about the other people that can relate to my goals and those that are on the same path. I ran across this article at The Retire Early Home Page. It talks about the MyersBriggs personality types:

(E)xtroverted or (I)ntroverted
(S)ensing or I(N)tuition
(T)hinking or (F)eeling
(J)udging or (P)erceiving

There are many on-line tests to find out your personality type but most if not all charge a fee. The cheapest way to take the test is to get a book that has the test from the library.

The survey asked which types are more likely to want to retire early, who are happy being retired, and who stay retired. The most common types from their survey were ISTJ, INTJ, and INTP. The article did acknowledge that this was an internet survey so the respondents were also the type of people who used the internet which probably skewed the results.

I love these results because I am an ISTJ and I feel like I finally belong in this group. Being an introvert I need less social interaction than the majority of people. Extrovert are the majority of the population. I want to be my own boss, I can't stand performance evaluations, group projects or scheduled hours. Actually, I really just have the wrong job for my personality type which is why my goal is to become financially secure as fast as possible (before I do anything stupid like walk in one day and quit) so that I have the freedom to find the path that is right for me.