On the path to financial independence: August 2017

financial independence progress aug 2017

2017 has started to accelerate at a pace that is leaving me breathless. It feels like just yesterday I was standing before you, giving you the lowdown on July. Between now and the end of the year we have a holiday in Europe, a trip to Napa Valley with friends, two aunts and an uncle coming to visit from India, a conference in Florida, Fincon in Texas, another trip to Europe, and my parents visiting us from Botswana. Add to this birthdays, Halloween, Thanksgiving and Christmas, and it promises to be quite the ride.

 

Mr. BITA’s parents and my 5 year old nephew visited us August. I mentioned in a previous monthly update that the shower in our bathroom upstairs had sprung a nasty leak. The leak was inside the wall, and we noticed it when water started to puddle on the shelves in the pantry downstairs. In years gone by we would have immediately summoned a plumber. This time around we decamped to the other bathroom, cursed a lot, and considered our options while we licked our wounds. Then, despite being handicapped with eighteen thumbs apiece, we attempted a bit of DIY. It was not a spectacular success, but we did manage to pinpoint the shower as the cause of the leak. We then made a list of 4 plumbers (based on recommendations) and Mr. BITA called them all to get quotes. The cheapest one of all charged $160/hour, and they all had a minimum charge of one hour to come out and look at the problem. We cursed some more and recommenced our procrastination with a vengeance.
Then the Grandparents BITA announced that they had finalized the dates of their impending visit and we started to panic about our non-functioning bathroom. Mr. BITA picked out a day that he could stay home from work, and we resigned ourselves to a plumber and his ungodly hourly rate. At this juncture, ever so casually, like it was no big deal at all, Grandfather BITA texted to ask if the leak was fixed yet, and if it was not that he was planning to come out 3 days earlier, and fix our shower problem for us. Mr. BITA had mentioned the problem to him once back when we were trying to DIY it. My in-laws are just awesome pants. Grandfather BITA got here and set to work with a vengeance. He is a wizard with his hands, and our shower didn’t stand a chance. He found not one, but two leaks. He replaced several pieces whose names I won’t even begin to pretend to know.

One of the culprit leaky bits

And lo and behold, we had a working shower again. He wouldn’t even accept payment for the stuff that he procured from Home Depot. There was no permanent damage to the drywall, so yay!

 

Their visit was so much fun. Toddler BITA enjoyed every moment with her grandparents and cousin. We made good use of the pool in our backyard, grilled burgers and made s’mores, visited a park that offers a train ride, went to the beach and watched Sing at the outdoor (free) movie night at our community center. The icing on the cake was that the grandparents offered to watched the kids for a night while Mr. BITA and I drove to San Francisco for dinner and some dancing with a group of our friends. Oh, and for the duration of the visit I borrowed a booster seat for my nephew from my fantastic Buy Nothing group.

This month was also the first time we had Toddler BITA’s hair cut. She is over three years old, so this is probably bordering on negligent. We took her to the hairdresser who cuts both my hair and Mr. BITA’s. I am pleased to report that we made it through the shampoo, cut and blow dry with zero crying, and Toddler BITA was rewarded with a lollipop for being such a grown-up.

 

We ticked off a long-overdue todo item this month. We visited a lawyer and had our estate plan drawn up – including our revocable living trust. #Adulting. Yay! I’ll be writing a separate post on the details of our estate planning soon. I had signed up for the Hyatt Legal Plan this year, a benefit offered by my company. They deduct $9 per paycheck, and then bear most of the costs if you do actually have to visit a lawyer. So our estate plan cost us $234 in payroll deductions and $220 out of pocket for certain things that were not covered by the Legal Plan. Our lawyer said that they normally charge $1,800 to draw up an estate plan, so that was a win.

 

The other major event this month was our annual neighborhood ‘festival’. It is held on the grounds of our community center. There is a surplus of free stuff for the kids – bouncy houses, a variety of slides, including a water slide, face painting and booths to make crafts with foam and glue. Neighbourhood businesses set up stalls, there is a band and some food trucks. Our Buy Nothing group put up a stall to popularize the concept. I contributed baked brownies to the stall. We spent a very happy day there, and ate altogether too much ice-cream.

Oh, and speaking of free stuff, a Little Free Library has opened shop on our street.

Toddler BITA accessing the little free library

The Little Free Library is a non-profit organization dedicated to fostering community and a love of reading. They encourage folks to open these ‘mini’ libraries on their front lawns. You can find a map of all these mini libraries on their site.

Enough about free, let’s talk about the dollars now.

 

Adding Cash to the Financial Independence Stash

This month we added $19,175.54 to our Stash.

  • The pre-tax portion of Mr. BITA’s 401k was maxed out in January, and I hit my contribution limit last month. Mr. BITA’s company gave him his full company match in January, and with this month’s contribution, I have now also received my full company match.
  • As is usual, we shoveled more cash through Mr. BITA’s mega backdoor Roth. We should hit the $54,000 limit ($18,000 pre-tax + $9,000 company match + $27,000 after-tax) next month.
  • I received the next installment of my patent payments this month, so that gave us some extra to pour into our taxable account.

Financial independence progress aug 2017

While our new investments are pleasing, our existing investments did not have a particularly good month. We are down $2,804.99 for the month.

financial independence progress aug 2017

Overall, combining savings and growth (or the lack thereof), Aug 2017 has been our worst performing month this year.

 

The Financial Independence Plan vs. Reality

YTD we have saved and invested: $224,673.86.
YTD market growth: $119,099.85

Another way of looking at our savings rate is that YTD we have saved at the rate of 64.2 cents per minute.

As usual, I’ll end this monthly update with the Stairway to Heaven.

financial independence progress aug 2017

1218 days to go!

Financial independence status: Ahead of the plan.

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11 thoughts on “On the path to financial independence: August 2017”

  1. What’s the final number you’re looking to accomplish at the end? How’d you come up with it. That’s certainly one of my struggles.

  2. That is awesome your father-in-law can fix the shower!

    Question for you. Even if it took five hours to fix, that’s $800 compared to the over $300,000 if you guys have saved and made this year alone. How much will it take for you guys to make to not feel bad paying the plumber his rate?

    I would frankly if you’re fantastic to pay the plumber to fix such a worry some problem if I made that much. If feels good because the problem is getting fixed and someone else is earning an income to help himself or his family.

    Perhaps a good upcoming post topic!

    Sam

    1. Good question Sam. Here is how I look at it. The question is not whether we can afford 5 hours of a plumbers time now, making the money we do right now. The answer to that is a trivial and resounding YES.

      The problem is that any recurring expense we have to add to the budget bloats our final target number and thus pushes our date out. If e.g. we wanted to budget $3,000 a year for stuff that we choose not to DIY, that means we need another $3000 * 33 (assuming a 3% SWR) = $99,000 in our nest egg.

      With this in mind we’re trying to look at expenses through the lens of “Is this a recurring expense we want through the rest of our lives? Is it work working x months/years extra to be able to bolster our stash?” If the answer is a maybe, or a no, we try to find ways to circumvent the expense even if it is something we could afford right now. In other words, we’re trying to change our default from “throw money at the problem” to “try and solve the problem ourselves, and if we can’t, then be grateful that we can afford to throw money at the problem”.

      And you’re right, this would probably make for a good post topic.

      1. This is a really great way to look at expenses that recur in general, and maybe that is why I have such a natural dislike of monthly payments for services. It seems so permanent!

        However, in this specific instance, it doesn’t seem to apply quite as well. You actually weren’t able to DIY it, the very awesome Grandfather BITA was able to help out for free. Plus, my willingness to DIY is different than it would be if I didn’t have to fit in a full time career. This is coming from 1/2 of a couple who have been going without the use of one of our bathrooms for months as we figure out what to do (and we’ll likely DIY a lot of it). So, I’m not a “just hire it out!” person. Doing what you can yourself makes sense, and thinking carefully about whether to DIY or hire it out also is a good move.

        I commend you for saving the $800 in any case! I love the blog!

  3. Glad that you got the estate plan and living trust taken care of. We’d procrastinated on that for ages (partially because of the cost), but were happy when we finally got it done.

    I’ve also learned – the hard way – that some stuff I can’t DIY (as in I procrastinate) and it’s better to hire someone sooner than later before it comes a bigger problem. Plumbing is one of them 🙂

  4. Yay for getting your estate plan done! I’m glad that ours is done now but that quote makes me blush that we overpaid so much for our own. :/
    What a fun month! And wow your upcoming end of the year plans are indeed breathtaking. You are very lucky in having such loving and hands on families, on both sides, that’s something I always wished for.
    We are attempting to wind down the rest of the year once our housing is settled, I don’t know that either of us have the stomach to pay for travel after this Very Expensive Summer, so FinCon is now up in the air for me, alas.

  5. As I sit here without electricity for the third day in a row in Atlanta, GA, my fancy Florida vacation up in hurricane force of winds/rain/flooding and having to kiss the $1500 reimbursement my company offered for the vacation (if I had attended a few short medical conferences while there), I am a little irked. But I am looking forward to seeing the electric bill 🙂 Are the silver linings to this unexpected curve ball that I can realize a break on the utilities budget and revel in the respite from work? This week at home certainly was unexpected, but even without electricity, oh so much better than showing up to a job that I’m completely burnt out on. I 1000% resonate with your “frugaling” and procrastination in spending big bucks. Unless I’d had the bad fortune of a tree falling on my house like my unlucky neighbors down the street, I would have procrastinated in fixing just about anything not absolutely necessary at this point. A year and a half ago, I had a similar situation to yours in one of the 3 bathrooms in my home and remember the “ouch” of that check amount (just under $1K for 3 hours work). I hadn’t caught on “FIRE” yet and wonder what my decision would be today.

    We have a 700 SF condo that if Lowe’s will ever get their act together on the renovation, we’ll be moving into after a significant downsize. One reason I cannot wait to get there is the shrinking expenses – everything from the owning of the stuff to fill it and maintenance expenses of the too big house – ahhh…freedom just seems to be slightly out of reach but just round the corner. Owning a house is just too darn expensive and I’m ready to be rid of it.

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