7.17.2006

I quit!!!!

So I quit.

With enough savings to keep up with living costs and minimum payments until November I'm now unemployed. I couldn't stand it any longer. - Idiotic management, hard hours, low pay. I'm sure I won't regret this.

Now I have an interview in August for the job I'm trying to stick this November and if all goes well I ought to be debt-free before halfway through next year. I'll be spending the next few months working out and spending days at the library and dollar theater. I plan to get lots of reading and studying done. I'll learn a couple new programming languages, read some classic novels I've been meaning to get to, clean out my closet through eBay, go on a few hikes, bake a few cakes and relax.

My last day was Saturday night. I feel like a weight's been lifted. Freedom!

I'll sell my motorbike in October in order to finance the move should I get the job. It'll get me $2,500, enough to rent a truck and pay a security deposit on a small apartment for the move. Then I'll be making substantially more than I've ever made before and getting ready to retire in ten years.

6.05.2006

Big Plans

I'm going to quit my job.

I've applied at a police department in Colorado and am 90% sure of getting hired come next month. The police academy won't start until November though so I've got a few months to do with what I wish. I was thinking a sojourn to my homeland of the northeast U.S. would do me well. It will be the last time for about another decade that I'll be free to spend several months with my old friends and family.

My friend, Paul, has said he'd let me stay in a spare bedroom at his house. So I'm planning an early August escape from the southwest, staying with him for three months, then heading to Colorado in early November for the start of the academy. There are some $ logistics to be worked out though.

I'd like to quit my current job in mid-July. The timing has to be just so because I need to make one last trip Colorado for the final interview during which I'm going to use my fringe benefit of free hotel rooms (Worth around $500 for 3 nights). Ideally I'd like to make the trip back from Colorado, work one or two days to say goodbye to my friends and have those be my last days working there. That will give me about fifteen days to pack-up my belongings, get them into storage and have a little r&r.

So here's how the $ shapes up: Due to how I now budget my money I have July's expenses covered from June's income. Plus I will have a $1,000 emergency fund at the end of this month. I expect to collect one and a half paychecks during July plus two trust fund payments and some half.com money which will come to ~$1,400 that will be available for spending in August. I may also sell an old laptop on ebay but there's really no telling how much that'll fetch.

Cost of moving/living in August:

Early ISP Cancellation Fee: $360 [that'll teach me]
Webhosting: $24.95
Shipping Some Things to New England: $40
Plane Ticket: $250
Food For the Month: $200
Debt Payment: $250
3 Months Storage Space: $200
Total: $1,325

So I'm going to come in just under the wire with my income from July with $75 to spare.

Hopefully once I'm in New England I'll get some part-time work with my friend (he owns a business) or my father (so does he) for two or three days a week to cover expenses so that I can maybe rent a little scooter and take some train trips to Boston to peruse some museums and what not. Generally taking things easy, rent-free just making $350 monthly debt payments, buying food and occasionally paying for museum admissions.

I'd like to work a deal with my friend Paul where I work on weekends and maybe one or two days during the week and in return he gives me a $240 stipend, use of his spare bedroom and free reign in his kitchen pantry. We'd have fun hanging out and on my days off I'd have enough cash to tool around the town having a good time. I may also be able to finagle the trust fund money to still come in during that time which means I'd be able to live pretty much like I do now except at a job I enjoy with an old friend.

It'd probably look something like this for September and October per month:
Premium Food:$20
Eating out: $80
Alcohol: $15
Gas/Scooter Rental: $70
Train Tickets:$30
Museum Admissions: $25

Or with the trust fund money still coming in:
Premium Food: $20
Eating Out: $120
Alcohol: $15
Gas/Scooter Rental: $160 (gas for occasional borrowed cars for daytrips)
Train Tickets:$30
Museum Admissions: $25

And there'd be plenty left over for stashing. But the lifestyle I'm envisioning could be quite a bit pricier if we did different things or weren't quite as content with sitting around the house with every other day off.


I'll be putting my motorcycle up for sale in a few days which ought to fetch ~$1,600 which will cover the debt payments for September and October, the remainder I'll put in the emergency fund for the move in November. It's a good idea. The climate I'm moving to is colder so I won't be able to ride it as much, plus I'll avoid having to store it for three months and then figure out how to move it north 600 miles in the freezing weather just to store it again somewhere for the winter.

Then, finally, come November it's only a $160 plane ticket to Colorado. I'll tap my emergency fund (Which, with the motorcycle money ought to be $1,900) when I get there to get a cheap hotel for a couple days and then an apartment once I find one. Within a few days I'll be working full-time training at the police academy and making $20k during my six months there during which I'll eradicate ALL my debt. Then I'll move up to being a full officer making $50k+ and I think, based upon my experience with the job so far, having a rocking good time and beginning my aggressive plan to retire in under ten years.

6.01.2006

$127.44

Two of us made it to Denver and back (6 hr drive) on $127.44 plus some money for food.

It was $87.44 in gas and $40 for parking. We had a bit of food and a trip to a museum but the whole thing stayed under $200 for three days in Denver.

Plus I got a look at (hopefully) my future employer. I'll be going back in July for an interview at hopefully around the same price.

5.28.2006

One down, five to go

I'm paying off a credit card in full on Wednesday. For those of you who don't know I enlisted with a 'debt counseling' service that basically takes all the nasty collection calls on your behalf and tells the companies you don't have the money but you're working on it. With Credit Solutions I pack away $250/month of which, for the first year, Credit Solutions takes out $110 as their negotiation fee, the rest is savings for paying off debt.

So they called me to say they had an offer from one of my credit card companies. $1749.76 lump-sum payment to clear a debt that has, with interest and fees, come to: $3,499.52. And so the withdrawal will be made on Wednesday. Now I just have five credit cards left.

It feels good!

Of course, now my savings are depleted so it's time to start again.

5.18.2006

Aggressive Savings

Lately I've been thinking about what age I'll be able to retire. Here's how it breaks down. This November I hope to start a job as a police officer. The pay for year one starts at 48k and increases rapidly to 60k at the end of the 3rd year. Then there are slow increases after that of 1-3 thousand per year. I want to save every dime. Now, of course that's impossible. But I'd like to save ~50k/year on average until I can retire.

These are all back of the envelope, day-dreaming in the park numbers but it's a start and a vision, here we go:

Obviously I can't save 50k a year the first year if I only make 48k from my job. Unless, that is, I have another income. There are various income streams I've been speculating with. Particularly some software programs. I'm quite particularly interested in seeing if I can sell the budgeting program I'm currently using that I programmed for myself. With some mild improvements over the next six months it's something that might be able to easily make me 3k-12k/year. With that kind of money I just might be able to save 50k/year.

So ultimately what I'm doing is thinking about what kind of life I'll have to live over the next 5-8 years in order to be able to save 80% of my income. The goal in my mind right now is to be able to live comfortably off of $1,000/month and being able to save the rest.

I'll start by looking at my current monthly spending:
Rent: $375
Phone: $15
Internet: $60
Webhosting: $25
Netflix: $50
Food: $150
Transportation: $25
Total: $700


Here's how I would like it to look in one year:
Rent: $410 (utilities paid)
Phone: $9
Internet:$32
Webhosting:$3
Netflix:$30
Food: $175
Transportation: $25
Clothes: $40
Entertainment: $50
Electronics: $50
Charity: $50

Total: $874
Which leaves $126/month to be stowed away for unforeseen expenses.
The rest of my monthly income will be saved and invested.

The question is, will I be able to maintain that lifestyle for, if necessary, 8 years? Especially considering that a better lifestyle would simply be a matter of redirecting a few funds? I think I can. I think I want to be independently wealthy so badly that I would put up with almost anything so long as I knew it were temporary.

-Rent- A studio apartment has been just fine for the past six months and I don't feel cramped or bothered by it at all.

-Phone- I wouldn't even have a phone if it weren't for the looks I would get from my prospective employers when I told them I don't have one. I don't mind using free/cheap phone services over the Internet (skype.com) even though it's slightly less convenient than having a $45/month cell phone.

-Internet- I don't think I could do without broadband, it adds so much to my life, not to mention often-times a revenue stream and it allows me to use cheap internet phone service.

-Netflix- This is sort of my substitute for most people's 'cable bill'. Netflix/Video games I would argue actually make my life cheaper. On the weekends I have a good alternative for relaxing other than going to the bar and spending $20-40/night on drinks/food. If a long weekend or vacation comes up instead of spending $3,000 on a trip I can look forward to a marathon of video gaming, smoking, drinking a noshing with friends.

-Food- Food I could definitely get cheaper than $175 but I just don't want to. Sure I could probably live off about $12/month if I ate mostly grains but I just don't think it's worth the sacrifice in this instance. That would be something that would actually make me feel poor. Despite how little I make now or how little I will live off in the future I always feel rich when I drink fresh milk, eat fresh meat or fruits or open the freezer and see some high-quality ice cream.

-Transportation- Thankfully I'm quite a public transit enthusiast so I don't have to budget an absurd $300/month for a car payment, insurance, maintenance, repairs and gas. I simply pay $1 from time to time or just walk to the grocery or library. I have a 250cc motorcycle that I fill up about once a month with $8 of gas and I pay a once annual $120 for insurance. I do the maintenance myself.

-Clothes- I'm the opposite of a clothes horse. My arm practically has to be twisted to get me to buy clothing. Still, I realize I need new shoes, shirts and pants from time to time as they do, unfortunately, wear out.

-Entertainment- My entertainment costs usually consist of a show at the 2nd run movies for one or two dollars or a few drinks at a bar with a friend. Occasionally museum/zoo/park admission fees which are all reasonable.

-Electronics- I do have a weak spot for computers. I like to play with them, build them, rearrange them, live with them.

-Charity- Helping others help themselves. What goes around comes around. Giving empowers you. Blah blah blah.

-Emergency Fund- I'll always keep a $1,000 emergency fund handy in case I need to fly home quickly, make bail, buy a new laptop, etc. Any unbudgeted money I don't spend in a month up to my $1,000 limit will go to making sure this is replenished. Then, when the emergency fund is full, to a *fun* fund.


My end goal with this aggressive savings would be an early retirement before I'm 35. Again, these are only back-of-the-envelope day dreams still. But just doing the long-division in my head, I'm guessing I'll need somewhere between $650-850k, plus the price of my residence (preferably a $<200k high-rise condo/apartment). So saving 50k a year at an optumistic but realistic 12.5% ROI:

Year 1: $56,250
Year 2: $119,531
Year 3: $190,722
Year 4: $270,812
Year 5: $360,913
Year 6: $462,277
Year 7: $576,311
Year 8: $704,599
Year 9: $848924 *GOAL

Now if I could start making 10k-30k/year off some software and saved all that as well it cuts it down to 6 years. If I up it to 15%; 5 years. With 848k I could, at a more modest 8% interest, be making 67k/year. I'd take 48k for living costs and give the rest to reinvestment and taxes. 48k (with no rent/mortgage) after living off $1,000/month with a rent/mortgage will feel like heaven. It'll be a full $4,000/month without rent and no job/obligations. I could then devote myself to writing, studying, some occasional travel, managing my portfolio, staying healthy, wine-making, programming, reading, writing music and on and on and on.

I know some will scoff at living off less than $4k/month and to them I say have fun working 30 years of your adult life in order to retire. I just don't like 9-5 work enough to be willing to do that. I also expect that, over time in my 'retirement' my income will increase through book sales, software sales, (pie-in-the-sky) album sales but as long as I have to work 9-5 to make the money, I'm content with 4k/month. Especially considering it'll probably always be just one person who I'm supporting.

So what would a $4,000/month ideal budget look like for me?

Condo Building Fees: $400
Home Maintenance/Upgrades: $150
Electric: $75
Water: $40
Gas: $60 (live on the sunny side of the building)
Internet: $30
Phone: $50
Electronic Gadgets: $200
Transportation: $250 (Still no car, but maybe some taxis :-)
Entertainment: $260 (Concerts, Theater, maybe 1 or 2 shows a month)
Eating Out: $400 (3 $125 meals, etc., ought to do me)
Food: $325
Travel Fund: $785 (Plush 4 day weekend every four months-ish)
Golf: $175
Miscellaneous: $300
Health Insurance: $200
Political Contributions: $150
Charity: $150

Indulgence

I have an addiction. Thankfully it's not nearly as costly as a gambling or drug addiction, but it gave my wallet a bruise this week. I'm addicted to video games (as much as one can be addicted to anything). It's my indulgence. Some people have cars and drive to work while sitting on a climate-controlled sofa, others have satellite tv, still others it's large restaurant tabs. For me, it's a slow trickle of software with an occasional splurge in hardware.

I saw a sign that the Playstation 2 was on-sale, with mail-in rebate at the mall for $99 brand new. And it was the stylish new mini-edition. I mulled it over for a night and then decided to go back and buy it. It took some doing, but I squeezed almost $400 out of the budget for the system and all the accessories. With a hard drive, a game rental service similiar to Netflix and some questionable ethics I now have access to all the games I could ever want for the system. I've never owned one and it's been around for about 6 years so I've got lots of catching up to do on some great games.

Here's how it breaksdown:
Console: $138.76 (with tax, before rebate)
2nd Controller: $26 (paid too much)
One Game: $32.01
Component Cable: $15.41 (good deal)
USB External hard drive enclosure: $36.17 (paid a little more for quality and style, I already had an unused hard drive laying around I'll be able to use.)
Monthly Rentals (2 months): ~$50
32MB Memory card: $37.35
Black Funds: $37.98

I estimate on game renatals and some used game purchases I'll blow about $250 on it over the next six months bringing the total to around $650 for what I hope will be about 3 years of entertainment. I expect at which time I could probably sell the whole lot off for around $200 making the total cost of 3 years of entertainment $450 or $12.5/month all toll. Not too bad.