Progress to Early Retirement: 53.0%
Progress to Financial Independence (3/4): 70.6%
Progress to Half Annual Spending: 106.0%
Percent Home Ownership: 60.1%
Net Worth / Annual spending tax adj: 13.2x of that Home: 2.5x Retire: 7.9x Non-Retire: 2.9x
This Month’s Story
This month had some bad news regarding our investments; the charts below showed that they went down in value. Even worse, our home dropped even more. I think this is due to home sales in the town next to ours, we live close to the border, but our schools are much better thus the homes here are more expensive. Still, it dropped over 6% since April. That is not small potatoes! The rest of our investments followed the market and the market was down month over month so our investments that tracked them did the same.
My 9 year old TV failed, and that was replaced this month. We had a power surge in a storm, and that was it. It would no longer turn on. Now I had a fair shot in figuring out what went wrong as I suspect it was in the transformer, but it’s just not worth the effort to me to try to repair it. I did that with an old Trinatron I got from a friend back in my USAF days, where it too had a bad power transformer, and a few hours plus a few dollars in parts got me a great 32″ TV back in 2000. I don’t have that kind of time nor patience now, and, well, I did want a new TV. The room we have it in is good for viewing a 55″ 2k or 1080p TV, as average ideal viewing ranges are 2x to 3x the diagonal. 4K the ideal viewing range is about 1.5 to 2 due to the higher pixel count. Thus, to make those pixels bigger, you need a bigger TV, and that is why we went from 55″ to 65″. The same TV to couch position “required” a larger TV. I have to say that I did not take the frugal route on this one, but I do love TVs. I don’t go out to the movies more than once a year or so, and I watch more of my content at home. Again, this was not frugal, but I do hope to get at least 9 years out of this one.
The funny thing is that I was talking to my wife the night before it happened. She was home the day when it happened and experienced the power outage. Anyway, I was saying that by the next Superbowl the TV will be a solid 10 years old, and I think I would like to replace it. The TV was my reward for paying off my school loans. It’s a quality product, but I wanted a better screen in our primary viewing location. Well, that did not happen, but I am glad that my wife was home when it happened. I would have been more annoyed if the thing just stopped working without a known reason.
On a more positive note, you will see many more changes this month, in this update, that I spoke about in other posts over the last few weeks. The account changes over time showing the individual accounts really helps show the ups and downs in the market over time, and whenever we make future moves, they will be easier to see.
I really like the pie chart above that helps me see where we are overall. We need to make the blue section, our non-retirement investments, grow in relation to the rest. It’s very hard for me to feel all that comfortable with our retirement accounts being so much of our net worth, let alone our home. I know I just dumped a ton of cash on the home, but that’s besides the point. What can I say, I want more. The fact is that the majority of our annual savings goes into our retirement accounts, so that will likely impact when we can retire.
The two new years to retire charts will also be a big help to me. The years to retire charts show when we think we can finish the race using our current spending with a 20% buffer for taxes. I went into detail when I wrote about how I picked my retirement number. That number might be a bit small, but I am trying to account for the l balance between my taxable and non-taxable funds. This is our actual spending but our annual income is greater than this by more than what we spend minus the funds we wont save in retirement. Certainly we don’t need to budget for our 401k contributions and the like There is money left over beyond that each year, and that money us usually split between home improvement, vacations, and extra savings. I should probably bump up the target a bit, but no doubt I will bump that up in the future regardless.
Another thing regarding retirement is that we plan on paying off the mortgage before we retire. That mortgage payment is budgeted, in retirement, to be paying for our healthcare. Why am I budgeting so high for that, well, I have no idea what to expect. Better safe than sorry is my thought process on this one.
This first table is the better scenario where we can keep putting as much away for retirement as we are now until retirement. Assuming we can keep this up, then we should be able to retire in 13 years if our investments do only 3% a year, and perhaps even in as little as 9 years if we do well over the next few years. I have no idea what to expect, but I do have hopes. Also, since I really plan on downshifting to a lower intensity position at that time, I expect that I will be able to retire in the 10 years or less time frame as I hope to earn enough to keep our lifestyle going without actually retiring. This is my whole downshift philosophy.
This next table accounts for when we can retire if we are not so lucky, and are not able to contribute to our retirement going forward. We should still be able to retire in that 5% scenario in a reasonable amount of time of 13 years. It’s good to know that if we stop saving that we have a good chance to retire, or retiring on less savings in a reasonable amount of time. I really don’t see myself fully retiring, but I do see myself working less hard. I think that is what I would prefer.
All of these charts and tables are generated by code. Even the HTML for the top table is as well. I wrote some python to read a google worksheet where I keep the numbers for the charts. That makes the whole process easier, and when I want to run scenarios, like with the taxes I talked about in a previous post, it’s really easy. I highly recommend code over using worksheets as you can do more, but I appreciate the fact that not everyone is up to that. It’s not as bad as it seems, but then I have been coding since I was 11. I actually figured out how to write basic programs on my Commodore 64. They were simple and did not do much, but you have to start somewhere.
Now it’s time for the pretty pictures. I think these charts speak volumes on their own.
What’s interesting to me is to see the fluctuation of the sum over time which basically tracks the market as our investments are designed to do.
The non retirement accounts other cash account had that big change when I moved some funds around, and it destroys the fidelity of the rest of the percent changes. I may modify the data, basically move that cash back for that month so that the image shows in better fidelity of what is going on.
Our home’s value have that big jump due to the one time large payment that will put us to paying off the mortgage before we retire, or downshift as I really should say. This is worth it to me even though many say it was a bad idea. None the less, you can also see the drop in our home’s value, and that stinks. Still, since we are a long way from selling, it’s hopefully going to be okay.
On a personal note, I am back to running every 2 to 3 days, and that feels great. It’s nice to have my latest injury under control. I am only doing 2 miles a day, and only running at about a 10:15 per mile pace, but I hope to speed up, and get back to speeds more in line with where I was at pre-broken foot. I have gotten up a few times at 530 and run, and I’ve given up a lunch to run to make sure I get my time in.