NW Update – March 2021

Another month it brings the most comprehensive NW update I have done in a couple years.

Assets
Real EstateValueMonthly Income
IA Rental 3818$130,000$1,050
CO Duplex 1060$580,000$1,000
Real Estate Total$710,000$2,050
Tax Advantaged AccountsValue
457$69,600
401k$58,000
IRA$74,000
ROTH IRA$56,000
Spousal IRA$35,700
529$16,000
Tax Advantage Total$309,300
InvestmentsValue
Brokerage Vanguard$126,000
Brokerage WeBull$12,300
Crypto$42,000
Retail Business$415,000
Total Investments$595,300
Cash/SavingsValue
Checking$70,000(multiple closings soon)
Real Estate Checking$7,500
Sold business note$17,000
Total Cash/Savings$94,500
Total Assets$2,018,400
LiabilitesTypeAmount
Mortgage CO DuplexMortgage$399,000
Business buyout loanBusiness$97,500
Total Liabilities$496,500
Total NW March 2021$1,212,600

March 2021 Goals

  • Set ourselves up to max the 529 each year for the next five years. (already done for 2021)
  • $2,000,000 NW by April 2024 – Current FI goal date.
  • Continue moving after tax investments from apps and into real estate; purchase 3 rentals by June 2022.
  • Invest $50,000 additional into CO Duplex in improvements to create a better income property by April 2023.
  • Continue to max 457 and 401k until April 2024

Book Report: Die With Zero by Bill Perkins

Within the last year I reached the first FIRE goal we ever set for ourselves which was a big $1,000,000 in assets. While I haven’t kept a blog for an especially long time I have kept lots of personal writing about my FIRE goals along the way, my reasoning at the time and some justification so that when I reviewed these goals in the future there was some context to them.

That said the first FIRE goal I ever set was a million dollars. My goal was actually a little more detailed than that.


$600,000 in liquid assets
$200,000 in real estate
$200,000 in tax sheltered retirement accounts
Age goal: 40
Notes: This should produce $40,000 in reliable lifetime income adjusted for inflation. As of today I can live safely on $32,000 which should give enough of a buffer to be safe for the extended time of no work and be conservative in down markets.
– Written by the 25 year old version of FIREDad

Now that I’m above this number by about 10% I look back on this goal and think that the 25 year old me was an idiot. Of course he wasn’t married, didn’t have any children and lived in a super awesome condo without a car. Like so many of those that are reaching Financial Independence the goal posts moved and they moved hard. I’m not going to lie that this set off alarm bells in my head of the fear of becoming a 50, 55, 60, 65 year old who worked his life away. The only difference between us and a regular American would be that in old age we would have A LOT to show for our efforts.
Make no mistake, the $1.1 million in assets we have today does not feel like nearly enough; especially when every additional year of working creates such a huge future benefit, but when does that stop? When does enough become too much and instead you watch your life energy be depleted for numbers on a spreadsheet?

I found the answer to my problem on the r/FatFire subreddit. That place is a total shitshow and it can be hard to sort through the humble brags and bullshit to find real content, but when a great thread comes up it is worth the effort. The post is one of many but it was essentially my exact scenario except all the numbers were 5x larger. The OP was in a scenario where they had over $5 million in assets and it didn’t feel safe to them. In fact, each additional year of work OP was able to put in rather than drawing on assets would increase the portfolio by 25%! This post scared the shit out of me, because without serious focus and intentional choices I would be that person in 5, 10, 15 or 20 years. In that thread a very high NW poster recommended reading the book “Die With Zero” by Bill Perkins. Many other respected contributers also felt it was what the OP needed. I reserved the book at our library right away.

Die with Zero: Getting All You Can From Your Money and Your Life — Members  Choice Credit Union

The overarching theme of the book is crystal clear: You are wasting life energy on earning rather than living. Now if you are thinking “wait a minute, isn’t that the exact premise of ‘Your Money or Your Life”. Why dear reader, you are correct! I would suggest that Die With Zero is the high net worth version of YMYL.

There were significant points that Bill makes in this book that are logical and if you are remotely involved in the FIRE community you will agree with. There are others that I am sure are controversial. The compelling case the book makes is that you should, above all else, maximize your life experiences. Nearly all life experiences are unique based on your age meaning that experiencing The Grand Canyon for example is a totally different experience running rim-to-rim on your 20s as it is to taking your kids in your late 30s.

Bill highlights and places very high value on the “memory dividend” that compounds in the rest of your life as a result of these experiences. This is a fantastic way for those that are results driven to justify having fun with their money. I found the discussion on memory dividend to be the most useful content in the entire book.

There are a few fundamental flaws with some of Bill’s writing where I found myself disagreeing. The first is the black and white approach he has to his premise. It makes sense, the book is called DIE WITH ZERO so it makes sense that he drives home the point of that goal, but I felt too much was focused on that goal specifically. The real value in his message is a shift in thinking to realize that leaving behind millions is not always a good thing, unless it’s done with an intentional purpose that is wasted life energy. That shift in thinking is the true value in Bill’s message and it is one that a very specific group needs to hear.

If you are nearing the end of your FIRE journey, are buried in a career you hate, or are just working too many hours and watching life go by then I would highly recommend Die With Zero from Bill Perkins.

Here are the takeaways from Die With Zero that I have used in my own life:

  • Make a plan to maximize your life experiences. Use specific goals and use money intentionally to reach those goals
  • Give money to your children intentionally rather than on your death. I have started outlines of plans of when and how our children will receive any money we want them to have
  • We have created a multi year plan to maximize the life experiences, starting with an increase in experiences in 2021, with subtle increases in life experiences as our son reaches the age we most want to show him experiences.
  • Worked on adjusting my FI/RE numbers from a perspective of having significantly less at age 75+ than originally intended.

Die With Zero – Bill Perkins – 4.8/5

2004 Porsche 911 C4S – 1 Year Ownership Review

Well it’s been a little over a year since I took the plunge and wrote a $30,000 check to purchase a 2004 Porsche 911 C4S with a little over 40,000 miles, sight unseen and shipped it to my home.

The TL;DR – I could not be happier with the purchase despite some MAJOR costs this year.

Total Costs:
$30,000 purchase price – Listed at $32,000
$800 shipping expense
$2783.44 Tax and 1 year of license
$761.26 Insurance, full coverage for 1 year
$3,985 Wheels and snow tires
$7,978 IMS, Rear main seal, shocks, struts, clutch, coil packs and some other various deferred issues

TOTAL: $46,307.70

I imagine that most people would look at that number and be surprised that I spent so much more than the purchase price in the first year. I am extremely happy with all of those numbers above and would likely do it all over again.

See the list of items I wanted in my 911 were very specific and difficult to find:

  • Cabriolet with a factory hard top (rare)
  • manual transmission
  • All wheel drive
  • Infotainment system done and that be some of the only modifications

This came along and had everything above. I knew that the IMS had not been done which meant that there was very likely going to be other issues. I built that into my plan and sorted EVERYTHING. With all the work I’ve done on the car it drives like brand new.

The total cost of ownership is inflated by about 10% by an optional decision I made to purchase different wheels with snow tires. That was a pure luxury purchase and man oh man was it an awesome one.

With snow tires this car can go just about anywhere and do just about anything. She sure doesn’t like deep snow with the low stance but everything else is fair game.

$46,000 for a car that puts a giant smile on my face everytime I drive. I cannot wait to run errands down the mountain because every moment is thrilling and engaging. I suppose I could have bought a new car and had a bunch of technology but where’s the fun in that?

Resort Skiing is a Curse on Humanity

No one around. Peace and perfection

The Fire Family lives in Northern Colorado in the mountains and winter is the most important season of the year. Winter means that every day is an adventure in the backcountry and each time we are lucky enough to go explore and play is a gift to be cherished.

My goal each year has been to get 100 days each season and while I’ve never hit that number I get to at least half of that every year since moving here. In the 6 seasons I’ve had in this wonderful place I have ridden a chairlift exactly one day. It was a pretty fun day with friends, and we were lucky to have one person with us who had discounted lift ticket pricing. Our party was 3 guys and since we all work together in one of FireDad’s companies I footed the bill. The total cost for the day which included 1 free lift ticket, 2 tickets at $30 a piece plus lunch with a beer each was still $150. Had we paid full price for that day the cost would have been around $375 for one day of skiing and an overpriced lunch.

The mountains serve many purposes, but the one I like the most is adventure. I do not find much adventure in resort skiing. In fact, I am here to say that resort skiing is a plague on humanity and the mountains.

Resorts are not natural. They take these beautiful and natural locations then proceed to alter them in generational changing ways. They rip tens of thousands of trees out, make fake snow, install concrete and metal structures to haul our fat asses to the top, use explosives to flatten areas of the mountain to be “accessible”, build giant cafeterias into mountainsides, etc, etc.
Ski resorts do serve a purpose. They are great places to learn the sport, have a luxury vacation occasionally, but the amount of waste these monstrosities produce and inflict on our world does not outweigh their good.

Alternatives? Get your ass in the Backcountry

Yes the foreign concept of putting skins on your skis and hauling yourself up the mountain, finding your own lines in powder never seen or touched by a human. This is skiing as our ancestors did things and as I get older I’m quickly learning that modern is rarely the best.

Backcountry skiing is only for experts though right?
This myth needs to go away. Just like a resort nearly every place in America you could ski has been already assigned a difficulty and skill level using the same system. A beginner shouldn’t do a black diamond at a resort just the same a beginner shouldn’t do a black diamond in the backcountry. I’ve been skiing and snowboarding my entire life and I am smart enough to not do any black diamond or above when I’m solo. I won’t touch most double blacks in the wilderness unless I am very confident of my line beforehand. It’s basically the exact same rules you follow at the resort except the trail signs aren’t there.

Ski resorts in the United States and most of the world are gigantic, billion dollar companies and conglomerates. The activists that love skiing and protest the pillage and destruction of natural resources seem to have a blind eye to ski resorts and it’s baffling to me why. The only thing I can come up with is that they just love downhill winter sports so much they feel it’s the only way. It’s not, and the alternative is much better.

How to get started?

You don’t need some fancy setup with special bindings, expensive skins and inflatable avalanche packs to get into the backcountry. Here is all you need:

  • A friend to come with your first few times
  • Skis or snowboard
  • If your setup is for a resort then a cheap pair of snowshoes
  • a pack
  • bungie cords or rope
Look at that, they fit on your pack!

Scroll through this picture gallery that I’ve collected over the last 5 years. Highlights include: beautiful scenery, powder deeper than you’ve ever seen it, and not a single line to wait in. Why would you pay a giant corporation your hard earned money for a shittier experience?

The Boy Scouts Had It Right 100 Years ago

I am an Eagle Scout and I am pretty sure a large amount of my decision making process was heavily influenced from my years in the scouts. While they didn’t turn me into exactly what they wanted (pretty sure they didn’t plan on anyone coming out a card carrying atheist) the core values of scouting are a great road map to build a wonderful life.

For those unfamiliar the scouts have a few mottos they live by. The list of 12 laws are particularly wonderful with almost no exceptions.

There are 12 principles a Boy Scout lives by which is actually considered the Scout Law. “A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.”

The 12 words in the Scout Law are so well rounded it’s hard to think of anything to add or remove.

Trustworthy

We start strong with Trustworthy. Remain someone who’s trust is unquestionable in every circumstance. If you disagree then speak your mind, if you promise something you follow through and see it to the end. Being Trustworthy is one of the keys to financial success in our world and an excellent first word.


Helpful

The hits just keep on coming with word 2; Helpful. Being helpful to those around you is such a wonderful way to live your life. Your friends, family and co-workers know they can rely on you because you are always willing to lend a helping hand. Maybe you need to help someone meet a deadline, you help a co-worker for 2 hours on their project; maybe a neighbor needs help staining their fence. By remembering to always be helpful in turn you will have others always willing to help you.

Friendly

No one likes an asshole. This applies to all forms of negativity like gossip, hate speech, intolerance and sorts of other bullshit. Be known as the person who is laid back, cool, tolerant and Friendly.

Courteous

When I was younger and actively in Scouts this one was the one I forgot when reciting the list. It always felt like it could be rolled into friendly. I thought this way right up until I started experiencing the real world. People are fucking terrible and if you’ve ever worked in food service, cashier, etc you’ll know that a Courteous person can change the entire course of your day. Be understanding to those that serve you, be overly generous with gratuity, and not only will your path through life be more pleasant but so will everyone else’s you encounter. Think to the last time a fast food worker had to tell you to go park and wait. Did they act timid and a little afraid to tell you that info? Yeah, well it’s conditioning because way too many people are fucking awful human beings and being a little more Courteous makes the world a better place.

Kind

Kind is a synonym of Courteous! Yeah, that’s the point. Being a Kind person is so important they listed it twice so you won’t forget. Be kind to others; it’s really not that hard, but it is rewarding.

Obedient

A rare miss, but I always treated this one a little differently. There is a time and a place to question authority and there are times to be obedient. In extreme circumstances like an extreme wilderness adventure where being obedient to your Scout leaders is crucial to keep everyone alive. There are times to disobey. Trust and listen to experts, scientists, and people whom you respect. Question authority that claims they have authority for authority’s sake.

Cheerful

We took a detour but we are back with some serious chops with Cheerful. We all like to bitch about our problems, stupid people, politics, squirrels that steal your bird seed or whatever other issue you have with the world. There is a limit and nobody likes a Debbie Downer or a Pouting Pete. The world is awesome and there is an unlimited amount of cool shit you can spend your time on this planet doing. Don’t get bogged down in the stuff that sucks. Focus on the good in all things.

Thrifty

It’s not going to come as a surprise that this is my personal favorite. The entire world of personal finance consisting of college courses, degrees, full-time speakers, bloggers, Dave Ramsey, Suzi Orman, MSNBC, wallstreetbets, countless books, and the Boy Scouts managed to nail it down with one word: Thrifty. The ability to give a lifetime of financial lessons in a single word is a work of art. Let’s explore why thrifty is the perfect word to include and how it covers all manner of personal finance advice.

  • Implies to get a good deal, due your research and make informed decisions
  • Combined with other Scout Laws means to help others in their time of need. If you follow this one also then you’ll have the financial means to help others.
  • Here are the most common synonyms of Thrifty: Frugal, Economical, Sparing.
  • Approaching your personal finance with the idea that each purchase or decision is made with the idea to get the best value for your money is a great way to live your life. It’s how I live mine, learned from Scouts, and continue to follow this law to this day.

Brave

In adult speak this translates to “don’t be a bitch”. Stand up and face your problems and fears. Tell the truth even if it’s uncomfortable. Stand up for what is right in all circumstances even if there are negative consequences. Don’t be afraid to venture into the unknown as discomfort is the source of inspiration.

Clean

Typically the first piece of advice a therapist gives to someone working on depression is to clean up their environment. It feels good, instills a sense of purpose and places value on your existence to see progress on something. If you ever go down the deep web rabbit hole and read about incel support groups, you’ll see that one of the first pieces of advice is to CLEAN YOUR ROOM. It doesn’t need to be perfect but a reasonably clean living space that isn’t filled with trash, dust and filth with have an immediate and positive impact on your life.

Reverent

I have been an atheist who was raised Catholic for most of my life. The last memory I have of believing or at least following the Catholic God was around 3rd grade. I remember asking our religion teacher a question and getting yelled at for questioning something…..in school. From that point on I was on the “this is bullshit” train. Reverence to me has a different meaning. It means to respect the beliefs of others and let them live their lives in peace. Whatever views you may have is totally fine but you do not have the right to infringe on differing beliefs of others. Live and let live.

Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.” When you really dive in and think about each word and it’s deeper meaning on a life it’s hard to think the Scouts were wrong. I was in Scouts long before the scandals came out and I believe my life is better as a result. While not everyone has the privilege to be involved in such a program we can still all read and understand their laws and apply those lessons to our daily lives.



Work Worth Doing

I have always been intrigued by the concept of ‘retiring early’, but have felt like an outsider for the majority of my time reading other blogs, forums and sub-reddits. The closest I’ve found is Mr. Money Mustache and I think the biggest reason for that is that I subscribe to work that is enjoyable or makes the world a better place is work worth doing at every income level.

That’s really the purpose of our FIRE journey; we seek a life that is filled with work worth doing. This can mean an infinite amount of things to different people, but I define work worth doing as performing a task that is enjoyable and has a positive impact on a life or the world. In my world this means putting the energy into growing our own food, raising our own animals to reduce worldwide emissions and suffering, spending significant energy on raising our children to be stewards of the world, etc.

Work worth doing is much more easily defined by the list of what it’s not. That list is just about anything that you do for ‘just a paycheck’. I have been an accountant for many years and while I enjoy helping friends solve their business accounting issues I absolutely hate doing the daily tasks that are associated with this career. No one is passionate about processing payroll, invoices, payables, managing a team of accountants, and a thousand other mindlessly stupid tasks that suck up my daylight hours in the pursuit of money.

If you step back and think of the most fun you’ve had doing work then turn it into a list I would bet most everything on that list was from volunteering or doing something for your family. At the very least, I’ll be there is little on the list you got paid for. Here is mine in no particular order

Hiking trail in Niabi Zoo I built
  • Building a hiking trail in a zoo (volunteer)
  • Building a race course for our High School MTB team (volunteer)
  • Learning how to grow our own food (family)
  • Replacing spark plugs on my Porsche (money saving, rewarding as hell)
  • DIY kitchen renovation (family)

Basically anytime I spend energy and effort to solve a problem in our family’s life I feel rewarded far more than when I go to work and spend money to solve the problem. The truth is that I make a lot of money per hour to sit at a desk. It would be far more efficient for me to continue working as much as possible and simply spend money to solve every problem that comes up in life. I even tried this quite a few times and still there are problems that are not worth my energy and effort while I’m still employed (a full boiler replacement for one).

The American experiment is a facade and we are seeing it peeling away at a rapid rate. Doing mindless tasks for money to then use to solve your problems makes people feel dead inside and this process is reinforced by consuming. Get a higher paying job so you can buy more shit! Hire a housekeeper, pay someone to wash your car, grow your food, take your trash, exercise your dog, etc etc etc. If you aren’t happy maybe you just don’t have enough shit? The fallacy here is that cleaning your house or walking your dog are somehow tasks that are not to be enjoyed when the truth is that your 8+ hours a day in an office is what’s not to be enjoyed and if you didn’t have to work so fucking much you would actually be able to live your life.

Let’s all work together to end the consumer lifestyle. Stop outsourcing your happiness and live life. I’m working on it very hard and have been for almost 10 years. The end is in sight for us, but the process is not easy. You have to break free from society’s expectations of success. Just ask yourself if the consumerist cycle is working for you; I’d be willing to bet it’s not. It sure wasn’t for us.

“Stop buying coffee and avocado toast” are lazy articles

It sure seems like the older generations have figured out what is wrong with the young whippersnappers of today. They are spending too much of their money on fancy coffee and avocado toast. The argument alone is so stupid and simplistic, and worse yet is that the statement has no substance. Anyone who isn’t financially independent and spends money on ANY luxury can be the target of these types of shitty articles. The people who write and promote this garbage on social media agree simply because the attacks are against luxuries they don’t enjoy. The fancy coffee and avocado toast could be replaced with any number of the following: Going to the movies, buying craft beer, buying a nicer car than a late 90s Camry or Accord, buying organic produce, going to concerts or plays, buying nicer sports equipment, etc, etc. 

One of the many things I hate about these types of generational attacks is that they never tell you how to replace these things that skilled professionals are producing for you. The last three articles I read that said to KICK THE STARBUCKS HABIT suggested that coffee is cheap and you can easily reuse a keurig style machine with the pods, or use a french press or a Mr. Coffee or all these other super cheap options. It’s time to fix some of the fallacies with these bullshit articles.

  1. Starbucks fucking sucks. If you are treating yourself to a luxury at least do it at some place locally owned that’s good
  2. The assumption that everyone using these luxury coffee places wants to replace it with everyday drip coffee is really stupid. If I’m going to a local coffee shop it is because I want something orgasmicly good. Drip coffee isn’t even on the same planet as a perfectly made latte.

I’m here to tell you that luxury goods and experiences are a wonderful part of life but should be enjoyed sparingly. Engrossing ourselves in luxuries every single day will make a person weak and soft to the challenges of the world. It’s also proven that exposure to luxuries on a regular basis will trick our brains into thinking they are necessities. What is the dad to do when his family wants good lattes every morning while avoiding the high price of paying a barista? You do it yourself and you do it right.

The first step to making something high quality yourself is to use the tools of the pros. The barista making a flower on your latte isn’t using a Mr. Coffee and a bottle of creamer from the grocery store so neither should you.

After a lot of research including asking all my friends who have ever worked in a coffee shop for suggestions we settled on this Rancillo Silvia pair of grinder and espresso machine. The total cost was right around $1,000 including shipping. A large upfront cost to be sure, but it breaks down to 166 small lattes at our local shop. Let’s add in the cost of the raw materials and the breakeven point was 200 lattes. We purchased this machine almost 3 years ago and it has paid for itself roughly 3-5 times over. 

This is where I admit I wasn’t trying to solve my own barista made coffee problem but the problem of FireMom. I had tried everything from making her french press, to a manual espresso machine, to a plug in milk frother, but none of them replicated the quality of the coffee shop. She would try my idea for a few weeks but would eventually slip back into stopping on the way to work more and more. That all stopped when we got the right equipment. I needed to understand why my partner was spending money every day on the barista experience rather than doing it at home. The answer – was quality. Once we matched the quality she never looked back.

Here is how I make a latte every morning and then sometimes at lunch or whenever we want really.

$9.25 – Smart plug

Let me tell you about the smart plug. If you haven’t started researching the convenience of the smart home systems, now is the time. I have a few blog post ideas on these so I’ll spare the details.  For now let’s just say for less than $10 our espresso machine turns on every morning at 6am, stays hot until 9am then turns off, then turns back on at 11am until 12:30pm. If it’s outside of those hours I can turn it on with my phone from anywhere in the world. Get a smart plug.

$300 – Rancillo grinder  – “Your grinder is just as, if not more, important your espresso machine”  That’s the advice from a family friend that is so into coffee he built a shed in his backyard to roast his own beans. I listened and got a really good grinder. The best feature of this one is that we can fill the little espresso wand thingy directly. Super convenient.

Negatives:  We have to keep a towel right nearby as it tends to spread a fine layer of grounds in a 6 inch diameter. 


$735 (today’s price) Rancillo Silvia – We paid around $575 but that was three years ago and it was on sale. I’m sure there are dozens of decently priced options that would do the trick, but we liked this one based on price. Here at the Firedad house I like to make things as automated as possible. I briefly considered the models that you can plumb directly into your water line, but didn’t feel that justified the price doubling. (Full disclosure, if I ever have to replace this one I’ll be getting one that has a water line) Do some research and buy what works best for you. 

Negatives: We just have one hot line, this means that we first make the  espresso then have to flick a switch to let the water get hotter to steam the milk. If you then want to make another coffee you either need to wait 5-10 minutes or the water will be too hot and burn your coffee. We counter this by making all the espresso we need for all the adults, then steam all the milk at once. More expensive machines let you do both simultaneously. You decide.

$30 – MISC accessories – Get yourself some insulated espresso cups. The opening to dispense is pretty small and we like to transfer to insulated travel mugs. The small cups help with  the correct portion, easy clean up and are just worth it everytime.  

FREE – line cleaning container – When you first get your steam ready you’ll need to purge the line for a second or so. We use glass milk containers. Technically they cost $2 a piece because of the refundable deposit, but we rotate them out monthly-ish.  

Learn and perfect the craft. It is a very rewarding experience. I  have my own recipe to the point that most coffee shops aren’t nearly as good. I’ve been able to dial my measurements to exactly my preference. I like  2 shots of espresso (beans that my  neighbor roasts) and 3 ounces of  2% milk steamed extra long. Firemom likes 2 double shots of espresso (when she’s not knocked up) and she changes it up with whole and 2% milk. 

In order to kick the habit we needed to first identify what was drawing us to a barista and work backwards. Once we knew it was the quality and art of the final product we could reproduce that and get even better results for a fraction of the money. Sure it’s not as cheap as the reusable  Keurig, french press or Mr. Coffee, but those aren’t even in the same realm and trying to replace a luxury with the cheapest option was a shitty solution that we constantly failed at.

The cheapest option is often not the best. Identify your wants and needs then figure  out the most cost effective way to do it yourself. 

 Fuck lazy journalism that says there is a problem and then provides non-solutions as fact.