Wednesday, December 3, 2014

Thanksgiving and Milestone

It is the start of the holiday season and on this very special day, we are very thankful for everything we have.

This year, we are thankful for:

- the roof over our head

It started snowing very early this year. I am very thankful we did not live in the area with 16 feet snow. Earlier this year, our house suffered damages due to hail and strong wind. Luckily, insurance paid for most of that and we now have a new roof and half of new sidings.

- family and friends

It is wonderful to have family and friends always by your side through good or rough times. We are thankful for family helping out when we need.

- wonderful trip in the wilderness

The trip to Alaska opened our eyes and firmed our goals of early retirement. It reminded us of all the greatness that is out there awaiting for us to see. It is not worth a lifetime to make money but to chained to a desk. It is important to live to experience.

- hiking 

It was the new found hobby of ours. It increased our activity level and helped us stay in better shape. It seems to be a nice thing to be closer to nature and appreciate what we have so close to us.

- reached another milestone

We officially reached 600k as of today. Exactly 600,000, 7 months after we reached the halfway mark of half a million. Market has been hype for the past month and we continue to save and invest. We are another step closer to FI.

It is Thanksgiving. We have food on the table and family around us. It is snowing outside. It has been a good year so far. There is nothing better than starting the holiday season with family.

We wish you a happy Thanksgiving. And Gobble! Gobble!

Sunday, September 28, 2014

Saturday, September 27, 2014

Water Cooler Stories - Brown Bag Lunch

Nowadays, we all sit in small spaces in modern office buildings. Row after row of cubicles like diligent worker bees. Because of the tight spaces, I tend to overhear many interesting stories. Today I would like to share with you a story about brown bag lunches.

One of the younger worker bees decided to increase some of his cash flow by making sandwiches, instead going out for lunch every day. One of his friends stopped by and said it was not worth the effort and the time. He stated that each lunch was probably less than $10 and it did not really add up that much for a year. 

I listened and smiled. Then I did some simple math (see below) the same night. The following calculation assumes that lunch is $7 and there are 20 work days per month. It also assumes that the average American works for 35 years. To be safe, I only used a 6% rate of return on investments.

At $7 per lunch at 20 lunches a month, it is really only $1,680 per year. On a salary of $55,000, that is roughly 3% of total income per year. It is not that much, you might think to yourself. However, given enough time, saving that little money a year - it can turn into almost $200,000 by the time it's time to retire. Again, this is because of the time value of money.  However, the calculation is fairly conservative.  The average return is probably around 8-10%, which would significantly increase the total savings amount.

Usually people who do not bring lunch to work, will also end up buying dinner as well. Enjoying good food is never a bad thing. However, it can be affect your overall health, in addition to creating holes in your cash flow. Restaurant food sure tastes great, but it also means high sodium and more oil/fat you're putting into your body.

Home cooked food can also be delicious and can save some money on the side. Home cooking might take some time, but can be a great experience trying new things on our own without breaking the bank.

Financial independence is our ultimate goal. Anything we can easily do to save that extra dollar without greatly affecting our life experience is good. With that in mind, we will continue to bring our own tasty home made lunches to work. 

Tuesday, September 2, 2014

August 2014 Net Worth Update

Wow, August was a crazy month.

August means property tax was due. We currently live in one of the states with the highest property taxes, so our property tax is pretty significant. Even after our large payment, our net worth still increased quite a bit. The market hit again new highs yet again. The following month requires us to pay estimated taxes too. Paying estimated taxes is better than owing a large amount next April due to underpayment penalties. 

Looking at our investment breakdown, you can see most of the increase is due to stocks/ETFs. Our stocks/ETFs increased about 11k - almost 6%. P2P lending experienced a slightly lower month at around $700, or less than 1% for the month. 

Our passive income is growing fairly well. We plan to increase P2P lending to 100k total and limit it there. We want to invest the rest into index funds or REITs. 

Tuesday, August 26, 2014

Goals in Life for A Dear Friend of Mine

Hello, Mrs Y here. I was busy working this afternoon in my office and all of a sudden, thought of a conversation I had with a friend during beginning of the year. As it was time for New Years Resolutions, I asked her what she wanted in her life. Her answer was a successful career, a happy marriage, and a condo in the city. I smiled.

Here's some background information about my friend. She is almost 30, works as a tax accountant in one of the large accounting firms. Half of the year, she is usually extremely busy, working 60-80 hours a week. During the other half, she works 9-5. She has a terrible commute like mine, about 3 hours a day.

Since she is too busy working most of the time, she is still single. She is always saying that she can never meet the right man at the right time. Well, think about it. If you work about 12 hours a day and spend another three on a train, there is really no time to meet people. Time is a real problem here.

Now about her career. There is always one common theme about those large companies - no loyalty. The time and effort employees put in usually do not equal to pay increases or promotions. There is really no such thing as a successful career when all you have is just a job to make money. Plus, what can you do with your success when you have no one to share the happiness with? The other thing to keep in mind is that everyone can be easily replaced. It is just a matter of time before the new college graduate catches on and performs your job just as good as you. Don't ever overestimate your value to your company. Profit is always the bottom line driving most companies. Don't get me wrong. There are plenty of good companies out there as well, but they are hard to find.

I am always too hesitant to share the whole financial independence dream and early retirement ideas with my friend. You see, you can never stop working and have enough money in the Asian community. If you stop working in your 30s, there must be something wrong with you or you are just so horrible at your job that you have to stay home instead.

So, back to my friend's final goal of having a nice condo, with a doorman in the city. It is really worth it? The city is always much more expensive to live in. It probably makes more sense if you are making significantly more money than you would in a nearby smaller town. The good thing with my friend is that she still lives with her parents. That is smart of her since it saves her tons of money. What she has been doing with her money is another story to tell for another time.

Everyone has different goals in life. I will not force my friend to agree with me on my early retirement approach. However, her goals strengthens my brief that work is just a method of accumulating wealth for a better and more independent life.

Tuesday, August 19, 2014


We recently went on a trip of lifetime, spending a week in Alaska. The wildness and the lack of internet made us want to retire more than ever. It allowed me to breath in the fresh air, to look at the blue sky, and not worry about what might have happened at work.

We also wondered what we would do with all our time once we do retired. My three months adventure as an unemployed/stay at home housewife ended with boredom and disappointment. Spending 24 hours inside the house during the winter months was not very fun. It felt like being trapped. Housewife duties ended pretty quickly, since there was so much cooking and cleaning to be done every day.

The journey into the wilderness made us realize that there is nature out there for us to explore, and many free resources around us that should be utilized. We were not very outdoorzy. It was always either too hot or too cold or the sun was too bright. During our trip, we discovered the enjoyment of hiking. Hiking is also a form of exercise that keeps us healthy. Now we finally understand why many FI bloggers enjoy it.

Our trip to Alaska also opened our eyes to the way we see travel. We always hated tour groups so we never went with one. However, this trip was different. We walked, hiked, ate, and learned with a small group of people. It did cost much more than our usual trips, but it was worth every penny.

Financial independence will allow us to do more of those trips, but we will also need to increase our retirement budget and income. Travel will be an important and big part of our retirement. Part of the reason of wanting to retire early is to be able to travel and be active before we are too old.

Life is about the experience, not about the things we have. We were very glad we discovered what we would enjoy during our retirement. Finally, we will now leave you with the song where we ended our wonderful trip - Anchorage.

Sunday, August 17, 2014

The Crazy Rat Race Part 1

The Daily Punishment

It was late March and I was finally at a point of being offered two jobs after about four months of a difficult job search. One of the recruiters repeatedly told me that having multiple offers was always a good problem to have. Of course it was, but it was a dilemma and involved making a huge decision. 

Job 1, large company, better pay, better benefits but a much longer commute. Job 2, private company, known for its work and life balance, short commute, much lower pay. As far as advancement went, it was not one of the things I cared too much about, as I was ready to retire within the next 5 years (or less). After a long and hard weekend, the we decided on taking the longer commute job, mostly because to its better benefits. So that started the daily commute of 90 miles / 3 hours, AKA the Daily Punishment.

Mr Y had been doing that long commute for more than 6 years already, since we always lived closer to my work. There were no plans to move closer to work, as purchasing a new house would require a significantly large amount of funding. We believed that the capital should be better used in investing and helping us achieve our goal in life faster. 

To be able to ride the train together made the commute slightly better and much more bearable. I saw many of same people on the train, day after day, and wondered how long they had been doing the commute and how long they would continue to do it. Seeing people in their late 50s and 60s and still wasting 3 hours of their lives every day going into work and making money seemed absurd. We are commuting for now, but it will be for the short term. I do not plan on doing the crazy commute for more than 5 years. I did a little math in my head:

Morning commute - 1.5 hours from house to office.

Work 8 hours
Evening commute - 1.5 hours from office to house.

Sleep 8 hours

That totals to about 19 hours of my day. I only have about 5 hours left to spend on eating, showering, and cooking, among other things. That is really not a lot of time left. 

In the short term it might be ok. Doing this forever will not make any sense, eventually when we have kids. The purpose of having a job is to make your life better so you can spend the time not working with the ones you love, not on a train.

Most of us do not think about our time on earth being limited, but it really is. Let's hope our plan for that long commute won't last too long and the Daily Punishment ends within our target date.