Thursday, December 7, 2017

investments

A few years ago I first discovered the concepts of aggressive saving, frugality, and early retirement. Since then I've read about many different investment approaches on some of the different early retirement blogs.

They seem to vary widely. Some push doing all your own research and sticking money into big economy-anchoring companies with solid histories of growth, value, and dividends. Others are proponents of seemingly endless angles of diversification, to include minerals and precious metals. When we first started exploring the world of investing a few years ago, DH and I started testing the waters with things like mutual funds, index funds, ETFs, C/Ds, even peer-to-peer lending and REITs.

I've learned that many of my rookie choices weren't well thought out. So, once or twice a year I get the motivation to cut losses and clear out some of the more obvious drags on my portfolio. Over the years I've slowly but surely baby-stepped toward elegant and productive simplicity with my investments.

It took a few years of experimenting and reading and re-reading those early retirement blogs for me to finally reach the point of opening a Vanguard account. Now I feel silly for procrastinating on it so long. One thing I've learned about myself and about life in general is that simpler usually works out better. I'm now a fan of sticking almost entirely to mass indexing as it has a winning track record and it fits perfectly with my lazy ethos as I have little patience for deep in-the-weeds research on endless individual companies and mixed fund choices. (Although I will occasionally throw a small amount at an individual company on a whim based on the news and a skim of their stock profile... over the years I've slowly gotten better at intuiting individual stock picks 😊)

While I still have some holdings in things a REIT, an ETF, and stocks of a few individual companies, my current weekly auto-transfers now go only to my Vanguard account, straight into just two funds: VTSAX and VBIAX.

I just love the minimalism of it. No clutter, no fuss, reliable growth.

Friday, November 3, 2017

reminscing and daydreaming

One day at work I was suddenly in the mood to listen to my old time and all time favorite rock band, Led Zeppelin.

When at my desk at work I use my headphones (set over just one ear to maintain some situational awareness in the office), and like any other day I usually search for things I want to listen to on YouTube, where I'm able to find just about any song I have an itch to listen to. I hadn't listened to Zep in a quite some time and so naturally it generate some pleasant nostalgia.

Images of my teenhood experience from the reaches of my memory flashed by. My friends and I driving around northern Virginia all summer in my trusty cherry red Honda Civic. Endless cups of cheap coffee at the landmark vintage diner in the neighborhood where we probably spent more money on the juke box than anything offered on the menu. The antique apartment buildings in downtown Richmond, Virginia where my sister, myself, and my cousin all spent time living while attending art school. Group camping along the Rappahanock River. Partying like hippies in my cousins' backyard.

Then somehow my thoughts manage to turn to those of purchasing and consuming. I started to daydream about the future and being early retired, lounging and decompressing around my early retirement home, waxing nostalgic to those classic rock songs as they 'should' be listened to - from original (or original-style-print) vinyl records on a solid quality sound system. Thoughts of the fancypants turntable seen in the show Suits popped into my head, along the original-style vinyl pressings of Zeppelin albums (among other classics) manufactured in Germany that you can currently buy at Barnes and Noble.

But, then I remembered that those ideas go against what it takes to achieve early retirement. All of that would entail purchasing things I don't really need or even want. Then I pulled myself back to earth and gave myself a mental slap in the face, remembering that I am not one of those discerning music afficionados adept at detecting the differences between CDs and vinyl (and these days I just stick to playing songs streaming through the internet). Buying a fancypants turntable system and building a space-consuming collection of vinyl records would be a lousy use of money for someone like me.

It all still falls under the category of collecting a pile of things I don't need for any reason, really. And in striving for a more frugal mentality, I've learned that one thing I no longer desire in life is to pile up collections of things I don't need.


Monday, October 16, 2017

education

Questioning the conventional wisdom of a 4-year degree seems to be gaining momentum as a recent trend. Or that could just be my perception due to reading early retirement blogs a lot.

I've personally always questioned the necessity of bachelor's degree as fast as possible for everything and everyone. I dared to suggest to my parents at least either taking a break from school or starting out part-time at community college. But that didn't sound impressive enough for my mother and I shipped off to the best state university that would accept me. I wasn't happy there, and after one year I transferred to a less bragworthy school, picked the even less bragworthy major in fine arts, after which I ended up in the unglamorous field of office admin. My parents could've saved themselves a small fortune if they'd agreed to either of my suggestions.

My father did suggest the military or ROTC, but at the time I was a childish starry-eyed daydreaming hippie and quite averse to either of those ideas until later in life.

When it comes to the 'necessity' of going straight to the most prestigious college that will accept you and achieving a four-year degree in doesn't-matter-what ASAP, I have a few anecdotal stories that I just love and plan to tell my kiddo when the time comes for her to start worrying about her independence and livelihood...

A cousin of mine took her sweet time after high school (as I had wanted to do), starting out part-time at the community college, which gave her a little more time to enjoy teenhood and grow up a bit. She later got her head in the game and graduated from a nearby state university with honors (without having ever taken the SATs).

A friend of mine from high school was a very bright student - always acing a full load of AP classes and achieved very high scores on the SATs. He graduated from one of the most prestigious private colleges in the state. However, in hindsight he wishes he'd done his first two years at community college instead, to save himself and his parents a large pile of money.

A friend of DH's was also a good student in high school, but precociously decided to skip the fuss and high-priced-debt-baggage of college, opting instead for a 2-year vocational certificate to become a medical technician. She now earns 50k a year in rural Indiana managing breathing machines (partly from taking a job in a neighboring high-crime area where they offered twice the pay of other local hospitals).

Another guy I grew up with also had the clarity to know college wasn't the best direction for him. He started mowing lawns after high school and is now the owner a multi-million-dollar landscaping company.

Then there's my story - I did eventually join the military when I was still a failure-to-launcher at 25 and realized I had to force myself out of the nest. It was there that I got the skills training and experience to end up with the high paying career I have now. The same line of work as DH who has yet to finish his Associates degree. While the Bachelors listed on my resume helped me snag a higher starting salary than he did, he now makes more than I do (due to a bit of company-jumping over the years). This underscores the lesson that while a degree (at least in our field) is a nice thing to have, it clearly wasn't necessary with specialized occupational training and job experience (via the military, in our case).

And that's my personal anecdotal evidence that an expensive college degree isn't the end-all-be-all for success in this country. I do think an Associate's degree or similar 1-2 year career studies certificate is a good goal after high school, but anything beyond that should be a highly personalized decision and not one driven by peer pressure and societal expectations.

Saturday, September 16, 2017

going down to one car

In the military, especially when stationed in any area sprawling out over wide rolling hillscape, and given the bustling nature of work in tactical units, it's almost inevitable that just about every service member will need his or her own car. So being in different units with different offices, DH and I got used to each keeping of us keeping our own car.

But you need not have been a service member assigned to a sprawling middle America duty station to fall into having this "need". In any metropolitan sprawl you'll come across countless households who rely on one or more cars per adult in the household (and sometimes one or more cars per person including the babies!), without giving it much thought.

Sometimes their established lifestyles make it necessary; each have to commute in opposite directions, or shifting jobs or companies every 3-5 years for some reason or other. But many keep up this avenue for needless spending simply due to convention and social norms.

But in my quest to become more frugal I've read a lot about reducing the number of cars you own or going carless altogether. This suggestion is among many that encourage readers to consider deviating from the norm with the goal of improved financial health (such as a small condo close to work instead of a McMansion out across 30 miles of rolling suburban sprawl, or maximizing your retirement allotment over maximizing other avenues of lifestyle inflation).

Both of our cars were having recurring and expensive issues, so after a few years of carpooling together to the same building, we finally decided to try going down to one car.

So I sold my car and DH traded his in for a slightly bigger automatic sedan for the family. It's been about a year-and-a-half now and things have been working out quite well! There have been maybe a few occasions you could count on one hand for which we needed extra transportation such as a special appointment far away - DH once used a rental car for the day, and then started using Uber. That car rental was over a hundred dollars, but still a small fraction of the combined annual maintenance, insurance, taxes, and gas of keeping the second car. So even with those occasional expenses for transportation, the edge still goes to keeping one car instead of two.

Which ultimately leads to automatic extra savings in bank, and slightly bigger steps toward financial independence.

Friday, August 4, 2017

clearing clutter

A few times each year DH and I get a bug to clear out unused stuff from the house. We got pretty agressive about it last year, clearing out a lot things like unneeded furniture (such as extra bedside tables taking up space in the spare room).

Throughout spring and summer of last year donation bags and consignment bags and trash bags and goodie bags for Freecyclers and Craigslisters streamed steadily out the door. By fall we had reached a stopping point, feeling pretty good about the amount of stuff in the house we'd managed to unload.

In my case I've found that it helps to take breaks from endeavors like this. Once you've cleared out stuff to a certain point, the risk of regret in going further it seems to rise.

While it's great to get a jump on a healthy activity like this when you're feeling motivated or especially ready to part with certain items in the house, sometimes it's also good to take a pause from it. This helps balance out some of the emotional stress that can come with aggressive clutter clearing. Most often the breather gives DH and I the time and space to realize that no, we won't feel much sting from the loss of many of the remaining things over which we were hesitating, and spurs us to clear out more. It sometimes also gives us time to rethink things, like when we decided the luxury lounge chair we had up on Craigslist for a few weeks could stay after all.

But, even when I feel like I've reached the point of taking a pause on clutter clearing, my mind is always alert to the question of "what am I ready to part with next?" and it typically doesn't take long for either DH or I to pick a few more things to let go of.

A few years ago it was easy to fill up several bags for donations pickups or the trash pile. It feels encouraging to have reached a point where the amount of clutter taking up space around the house has decreased so much that choosing more things has become more challenging. At the same time it's also become easier, as I've found that the act of clearing out things seems to free up more willpower to keep going on to part with even more things which I had been emotionally clinging to before.

Tuesday, July 11, 2017

frugality from grandparents

My grandmother grew up in a poor, rural family in northern Philippines. Although she wound up marrying money (my grandfather was high society), the super frugal habits she was raised on persisted in her new life after moving here to America and allowed her to accomplish things people all over the world (including here in the US) can't even dare to imagine.

Once here she took up work as a secretary, a position she was quite content with and retained until her retirement around 40 years later. She started out here alone in a one bedroom apartment in Washington, D.C. Her adult children followed shortly after, and they all bunked up together in that tiny apartment for the first few years.

My grandmother always took the subway to work, and never went out 'for fun' to things like restaurants or movie theaters. She was a homebody and cooking was her idea of a good time. It was through her uber-frugal lifestyle that after just a few years she realized she had enough money for a downpayment on a house in the suburbs. She got one within walking distance of the subway and continued to use mass transit for commuting to work throughout her career.

She was so frugal that by late mid-life with a secretary's salary she was able to cover the downpayment on a second house where her son took up residence, loan my parents the money for the downpayment on their house, pay large chunks of the bills for four of her grandkids' college tuitions and vehicles.

My mother started out with admirably frugal habits early on in life, saving enough working in the Philippines to pay for six months of backpacking through Europe with a college buddy. However as she settled into the conventional 9-5 career with mortgage and two kids she slowly became entrenched in the mindless-shopging-for-fun consumerism typical of middle-class America, and lost a lot of her frugal edge over the years. My was dad even less so, relying on my mom to alert him to when it was time to tighten the purse strings. I wasn't the worst with money but was far from great, and had terrible latte-factor habits that kept me stressing over being unable to afford pricier goals in life (like world travel or a high quality instrument).

Growing up here in America, surrounded with advertising messaging, pop culture, and conventional thinking feeding each other in a vicious cycle, it's very easy to get suckered into festering credit card debt from 'treating yourself' (usually far too often) and lose sight of much more important things like emergency money, fiscal freedom, and things you dream about most in life (like adventure travel or simply less stress and more spare time).

It took me stumbling upon the early retirement blogging community to wake up and start working on thinking about money more like my grandmother would, realizing that things in life that I'm more interested than a nonstop job that pays the bills are still possible, without needing to adopt the dreaded monk-like lifestyle.

Monday, May 1, 2017

lazy habits can support frugality

Every year both laziness and improvements in my frugal mindset lead to gradual habit adjustments. Last year grocery shopping was one the few remaining places through which DH and I achieved our shopping 'high'. Being part hippie and foodie, we'd not only visit the neighborhood Giant but make the trek out to the area Whole Foods, Trader Joe's, and Wegmans at least once a week, each. It was also an easy way to get out of the house with our night-owl toddler after the sun had set, especially when the weather was bad.

After keeping that up for a while it eventually started to get really tiresome. Fortunately our neighborhood Giant has expanded their hippie/foodie offerings in recent years, allowing us to downsize those very unfrugal driving habits.

Another example is that DH used to like making the drive out to a specific Farmers Market in the region because it's the only place our favorite local beef producer sells his product. But as it is a  far drive, there's only a window of a few hours on Saturday morning to do it, and lately he's been feeling as lazy as I have about driving, we've simply gone without beef for over a year now.

A while back we started hauling kiddo to the library every week to get outta the house. While a worthwhile time killer, it did start to feel terribly far after keeping that up for several weeks. Nowadays a trip to the libary is also down to just a once a month or two.

Travel farther afield has also fallen into our widening category of so-not-worth it. We attempted a few overnight trips last year, concluding all of them feeling worn out and ready to take a break from big travel for most of this year.

While we strive to keep our very active pre-schooler engaged in the world around her, we've also reached the point of insisting on relaxing and making do at home and the neighborhood within walking distance more often.

This I think is where laziness can compliment frugal living goals.

Wednesday, February 1, 2017

a few steps back

While DH and I get progressively better with our spending habits each year, we do still go through phases of backsliding on occasion. The last few months of 2016 was a good example, as we had definitely let ourselves go quite a bit.

At times we'll get discouraged with our quest, thinking if we've got at minimum several more years to go, we may as well get comfortable and loosen the purse strings a bit. Factoring into this issue is that as desires for expensive things, habits, and hobbies fade out of our system we sometimes feel at a loss for ways to spend our spare time, and so spending on consumables like alcohol and fancy chocolate will have a tendency to tick up. Adding to this equation is the need to take our toddler into consideration when coming up with ideas to occupy down time (since it's tougher to pull off with frugal loner hobbies like reading with any length or regularity).

But as our kid gets older, things have started to get a little easier and more parent-friendly with routines, sleep, and play.

Like most people at least when each New Years comes around we feel a bit more motivated to get back on track. At least between progress and regress, I can say that we accomplish a net gain of increased savings and frugal values each year, progressively feeling less desire to buy new stuff or get into pricey diversions.


Friday, January 13, 2017

clothes

Ah one of the vices in my former life. I was on the path toward stereotypical spendy female with closets stuffed full of clothes, shoe, and bag collections that I don't use. I hadn't gotten so bad as Emelda Marcos or Carrie Bradshaw, though still quite wasteful so still I've been working to increasingly reign in the habit for years now. One of my worst habits was buying clothes online, which nine times out of ten I would regret because it wouldn't come out looking quite the way it seemed to in the picture or I wouldn't like the shape or way it fit. I'm also always reluctant to bother with returns because I'm very lazy and the shipping sevice shop in my area that stays open past 5:30 is four miles away. Lose-lose.

It's taken years for that expensive lesson to sink into my skull but I believe it finally has. Partly because DH and I now have an annual tradition of making a trip to the local outlet mall's IMAX theater for our one and only movie excursion a year and we take the opportunity to do some shopping afterward.

This way I can do the proper thing and actually try on the clothes before I buy them, with the added benefit of heavy discounts on higher-end clothes. I've realized that if I rely on this one annual trip for new clothes, then I will spend money on clothes that I'm far less likely to consign to the Purple Heart donation bag in short order. Thereby continually reducing my need for new clothes each following year.

In the name of minimalism I've also spent the past few years whittling my wardrobe down to my half of the master bedroom closet and half of the dresser, consisting of everything I wear regularly. (With a few seasonal things like thermals, swimsuits, and very heavy hoodies tucked away in their own location when not in use.)

The hangers up in my half of the closet are still pleasantly spaced out, too, so I'm even a bit further than just my half of the closet as it's not stuffed or even close to. But, I still feel like I have more than enough clothes to wear.

So this year so far I'm feeling pretty pleased with myself and optimistic about my habits in regards to clothes. Resolution: no new clothes until the next movie trip in next holiday season (a goal I definitely did not attempt or accomplish last year)...