June 2019 Update

May flew by, starting off the second week of June. Quick update:

401k: $51,300.56
Roth IRA: $4.012.38
HSA: $102.60
Total Retirement: $55,415.54

Current Liabilities:
Credit Card: Effectively $0 since I pay it off monthly
Car Loan: $8,585.91
Car Warranty: $1,292.50
iPhone X : $674.08
Total Debt: $10,552.49

Something a bit disturbing happened recently here in Dallas. We had some very powerful storms go through, lots of downed trees, one of my friends had no power for 24 hours. Friends with a restaurant had no power for 48 hours. I was fortunate though, had electricity the whole time, no property damage. Others not so fortunate though…

 

Crane Fell into an Apartment Building
Crane Fell into an Apartment Building

A crane fell on an apartment complex not very far from where my Boston friends used to live and is visible from the parking garage I use daily. One person died, a beautiful young lady of only 29 years of age. I considered moving to this complex back in 2017 but decided not to because it was out of my budget. From what I’ve heard lots of people had to evacuate the building within a matter of minutes and many weren’t allowed to return. It sounds like a small thing, but… 534 people are displaced from their homes, in many cases they will only be able to carry a handful of smaller items with them. TVs, furniture, beds, in some cases vehicles too. All left behind.

Coincidentally my lease is up for renewal. I strongly considered moving closer to work but it just wasn’t in the cards. I really don’t like the Downtown area, my bf lives close to my current place, and my rent is still pretty cheap. My new 12 month lease will be $880/mo plus ~$25 for water / sewage / trash. Even in some of the hotter days my electricity bill is under $60.

I am still thinking about the future though, possibly buying a 2 bedroom townhouse / condo is what I will do. Something big enough to be comfortable, with fairly low overhead, and sellable if that needs to happen. I have been talking about home ownership for a while but needed to get my foundation solid. Will I ever return to New York? Not with my current salary, the high rents, taxes, congestion. I’ll continue to visit though.

Recently I discovered one of my former coworkers was arrested for fraud and could be facing up to 20 years in prison. There was a previous incident but in my mind I gave him the benefit of the doubt. I held this individual in high esteem, he was a bit of a role model to me earlier in my career. Charismatic, a person of color like me, educated, drove a nice luxury SUV, had a 3 bedroom house, was able to put his kids through college. I think of the video with Tyra Banks – We Rooted For You. Honestly disappointed he didn’t make wiser choices in life.

Outside Feedback & Investment Order

They say a mark of greatness is to gather advice from those wiser, older, or more successful than himself. So that is exactly what I did. I laid all my cards out on the table, I let myself be vulnerable. Why? Because I needed it. Couple of conclusions.

1. Retirement – Stop paying the 1.9% automobile loan off early and max out retirement. Now. Stop. Do Not Pass Go. Do it now. Plus I need to lower my tax burden. I don’t consider myself super wealthy, but I shouldn’t be able to buy a new car each year with what I pay in taxes.
2. My commute is out of control and draining me of my life force. Getting to work early has made things a lot better. About 35 minutes in and 40 coming home. Previously it took me about 45 minutes and an hour. Best case 6 hours of commuting each week, worse case almost *9* hours a week. In an automobile stopping and going. 300-450 hours a year. When I think about it that way, it kinda makes me sick. The alternative however is paying roughly $400-$600 per month in rent, plus $500 ish in moving expenses, $500 in pet deposit, an extra $10-$15 monthly in pet fees.

I really looked at a bunch of different options. The safer neighborhoods generally cost a lot more. Areas close to work are in old buildings with some issues, such as leaks, poor sound deadening, crime, growing homeless situation, difficult to find parking. Rent is up for renewal now at $880/mo. Close to work would be around $1400/month. $16,800 a year to rent a 1br or studio apartment with 0 equity? No thanks. The newer complexes near me seem to have poor parking too and are a target for thieves.

 

3. Stop eating out as much. I said $400/mo dining out (including activities) and another $400/mo for groceries. I cut back quite a bit the last few weeks but it still wasn’t easy. Kinda felt down being cramped inside the apartment. I’m realizing getting out and going to nice places every once in a while is something I enjoy and will shift things around here and there in order to cover it. When I do go out now I’m more prone to go to $ or $$ restaurants, never $$$. Coupons or happy hours are a plus too. If someone else is going to drive or I will be there a while, pregaming is always an option.

I almost always bring my lunch with me to work now. Salad, some protein, some carbohydrates. When I do have lunch with coworkers, friends, etc. I have 0 guilt.

4. Car overhead  –  Overall it costs me an estimated $1000/mo to drive. That’s kind of insane, even with my decent salary. So I’m hacking that too. More Costco fill-ups, pay for gas with cash back cards. Skip tollways when it will save me less than 5 minutes on a commute. Just today I dropped $271 on a transmission fluid change, and an oil change. Car accelerates / decelerates much more smoothly. Hope the preventative maintenance works out in my favor. Still have a warranty for 5 more years.

The best thing for me to do now is save on the things that don’t matter, automate my investments, focus on traveling a bit more.

—-

On one of MMM Forums I came across the Investment Order, I thought it would be helpful too anyone reading this post.
“This ordering is appropriate for investors in the US.

In the lists below, thinking “first your governmental 457 (if you have one), then your 401k/403b/SIMPLE/etc.” wherever “401k” appears is likely correct –
unless your governmental 457 fund options are significantly worse than those in the 401k/403b –
due to penalty-free access to governmental 457 funds at retirement, even if younger than 59 1/2.
Non-governmental 457b plans have deficiencies, including the inability to roll the balance into an IRA.

“Max _____” means “contribute up to the maximum allowed for _____, subject to your ability to pay day-to-day expenses.”

Differences of a few tenths of a percent are not important when applicable for only a few years (in other words, these are guidelines not rules).

Current 10-year Treasury note yield is ~3%.  See
http://quotes.wsj.com/bond/BX/TMUBMUSD10Y

WHAT
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the current 10-year Treasury note yield.
3. Max Health Savings Account (HSA) if eligible.
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level
5. Max 401k (if
– 401k fees are lower than available in an IRA, or
– you need the 401k deduction to be eligible for (and desire) a tIRA deduction, or
– your earn too much for an IRA deduction and prefer traditional to Roth, then
swap #4 and #5)
6. Fund a mega backdoor Roth if applicable.
7. Pay off any debts with interest rates ~3% or more above the current 10-year Treasury note yield.
8. Invest in a taxable account and/or fund a 529 with any extra.

WHY
0. Give yourself at least enough buffer to avoid worries about bouncing checks
1. Company match rates are likely the highest percent return you can get on your money
2. When the guaranteed return is this high, take it.
3. HSA funds are totally tax free when used for medical expenses, making the HSA better than either traditional or Roth IRAs for that purpose.
At worst, the HSA behaves much the same as a tIRA after age 65.
4. Rule of thumb: traditional if current federal marginal rate is 22% or higher; Roth if 10% or lower, or if MAGI is too high to deduct a traditional IRA; flip a coin otherwise.
For those willing to expend a little more energy than it takes to flip a coin, consider comparing current marginal tax saving rate vs. predicted marginal withdrawal tax rate.
If current > predicted, use traditional.  Otherwise use Roth.
See Credits can make Traditional better than Roth for lower incomes and other posts in that thread about some exceptions to the rule.
See Traditional versus Roth – Bogleheads for even more details and exceptions.  State tax (or lack thereof) should also be considered.
The ‘Calculations’ tab in the Case Study Spreadsheet can show marginal rates for savings or withdrawals*.
5. See #4 for choice of traditional or Roth for 401k.  In a 401k there are no income-based limits for deductions or contributions.
6. Applicability depends on the rules for the specific 401k.  See Mega Backdoor Roth IRA.
7. Again, take the risk-free return if high enough.  Note that embedded in “high enough” is the assumption that your alternative is “all stocks” or a “fund of funds”
(e.g., target retirement date) that provides a blend of stock and bond returns.  If you wish to consider separate bond funds, compare the yield on a fund
with a duration similar to the time remaining on the loan, and put your money toward the one with the higher after-tax interest/yield.
8. Because taxable earnings will still help your FI journey.  If your own retirement is in good shape, and you choose to provide significant help for children’s college costs,
a 529 plan may be appropriate.  Similar to “put on your own oxygen mask before assisting others,” do consider funding your own retirement before funding 529 plans for children’s college costs.

Speaking of things to do first, see Getting started – Bogleheads if this is all new.  Working through that post and the links therein is also a good refresher, even if personal finance isn’t completely new to you.

The emergency fund is your “no risk” money.  You might consider one of these online banks:
http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001

It is up to you whether to consider “saving for a house down payment” as a “day to day expense”, vs. lumping the down payment savings in with “taxable investments” at the end.

If you are renting, you may not be throwing away as much on rent as you might think.  See
http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/
for some thoughts.

For those concerned about “locking up” money in retirement accounts until age 59.5, see How to withdraw funds from your IRA and 401k without penalty before age 59.5.

If your 401k options are poor (i.e., high fund fees) you can check
http://forum.mrmoneymustache.com/investor-alley/to-401k-or-not-to-401k-that-is-the-question-43459/
for some thoughts on “how high is too high?”

The MAGI calculation for Roth IRA purposes is https://www.irs.gov/publications/p590a#en_US_2018_publink1000230985
Then see Retirement Topics IRA Contribution Limits | Internal Revenue Service.
The MAGI calculation for traditional IRA purposes is https://www.irs.gov/publications/p590a#en_US_2018_publink1000230489.
Then see IRA Deduction Limits | Internal Revenue Service

If one can swing the cash flow, getting in and out of an ESPP is ~”free money”.  But if one has to make a choice between deferring income in a 401k vs. taking the income and using it for an ESPP, it isn’t the same.  The benefits of employee stock purchase plans (ESPPs) relative to other opportunities is highly dependent on tax rates, because ESPP benefits all occur in taxable accounts.
– For someone paying 12% tax on ordinary income, and 0% on dividends and capital gains, ESPPs can be very favorable, perhaps competing with high interest rate loans in step 2.
– For someone paying 22% tax on ordinary income, and 15% on dividends and capital gains, ESPPs are not as favorable, perhaps coming between steps 6 and 7.

Priorities above apply when income is primarily through W-2 earnings.  For those running their own businesses (e.g., rental property owner, small business owner, etc.),
putting money into that business might come somewhere before, in parallel with, or after step 5.

Why it is likely better to invest instead of paying a low interest rate mortgage early, if you have a long time until the mortgage is due:
https://www.thebalance.com/rolling-index-returns-1973-mid-2009-4061795
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

*Estimating withdrawal tax rates is not an exact science, but here is one approach:
1) Estimate any guaranteed income.  E.g., pension you can’t defer in return for higher payments when you do start, rentals, etc.
2) Take current traditional balance and predict value at retirement (e.g., with Excel’s FV function) using a conservative real return, maybe 3% or so.  Take 4% of that value as an annual withdrawal.
3) Take current taxable balance and predict value at retirement (e.g., with Excel’s FV function) using a conservative real return, maybe 3% or so.  Take 2% of that value as qualified dividends.
4a) Decide whether SS income should be considered, or whether you will be able to do enough traditional->Roth conversions before taking SS.
4b) Include SS income projections (using today’s dollars) if needed from step 4a.
5) Calculate marginal rate on withdrawals from traditional accounts using today’s tax law on the numbers from step 1-4.
6) Make your traditional vs. Roth decision for this year’s contribution
7) Repeat steps 1-6 every year until retirement

The steps above may look complicated at first, but you don’t need great precision.  The answer will either be “obvious” or “difficult to choose”.  If the latter, it likely won’t make much difference which you pick anyway.

Note the possibility of self-defeating predictions:
a) predict high taxable retirement income > contribute to Roth > get low taxable retirement income
b) predict low taxable retirement income > contribute to traditional > get high taxable retirement income

Also, if you pick traditional and that ends up being wrong it will be because you have “too much money” – not the worst problem.
If you pick Roth and that ends up being wrong it will be because you have “too little money” – that can be a real problem.
Thus using traditional is a “safer” choice.”

Retirement Update – $53k and growing

Major milestone for me:

401k – $49,674
Roth IRA – $4,019
Total Retirement: $53.6k

Credit Card: $0 (at least the day I paid it off last week)
I decided to make a large contribution to my Roth IRA for 2018. Depleted my emergency fund in the process. I can replenish it in less than 2 months. I’m living a life of no regrets and not contributing as much as I could to my Roth would’ve been one.

It’s fun to think about how much this will earn over the next 30 years even if I completely stop. $533k making me a half a millionaire.

FVoMexample1

Major milestone for me:

401k – $49k
Roth IRA – $4k
Total Retirement: $53k

Credit Card: $0(at least the day I paid it off last week)
I decided to make a large contribution to my Roth IRA for 2018. Depleted my emergency fund in the process. I can replenish it in less than 2 months. I’m living a life of no regrets and not contributing as much as I could to my Roth would’ve been one.

It’s fun to think about how much this will earn over the next 30 years even if I completely stop. $533k making me a half a millionaire. Even just maxing out the Roth for the next 30 years. Assuming everything holds true I’ll have over a million dollars saved.

FVoMexample2

If I can swing maxing both out, which for the record is my goal starting 2020 I’d have over $3MM.

FVoMexample3

Realistically though I plan to be retirement-optional by the time I turn 50. One of my online acquaintances retired at 50 and has also gone completely off the grid. Can’t say I blame him, it’s important to do what makes you happy in life. For some it means leaving the tech sector completely and doing not sitting in front of a computer.

I am still fascinated by the early retirement movement and hope to be one of the lucky ones who plays his cards right. Joe paid off his condo 3 years ago and has been maxing his 401k out for years before that. I’ve always been inspired.

I looked at condos and townhomes at $200k or under. What I saw is grossly overpriced. Even with renovations, a place I was looking at sold for $121k in 2010 is now selling for $200k…I find a 65% increase in value a bit hard to swallow. I don’t think my rent will exceed $900/mo come August. I still want something a little nicer, safe, ample parking, and closer to work. In the past what I’ve been looking for doesn’t exist…There is the option of moving in the building right next to my job. Between tolls and gas I’d save about $200/mo. The *cheapest* studio goes for $1,460 though, 72% more than I’m paying now.

In a few places downtown people have continually said they don’t feel safe. Cars have been broken into, there have been shooting incidents (including one with an off-duty police officer) issues with a growing homeless population. So many choices available.

Car Update – $10,353.32 and Rambling About Investments

Cars are a funny thing… A status symbol, a means of getting from point A to point B, and also one of the largest depreciating assets people purchase without thinking twice about. I’m 67% done with my car payments. I’m heavying up on my payments within the limits of my budget.

Much like before with my credit card debt I decided to make a spreadsheet to track my progress. If I can pay $1k a month now through the end of the year I will essentially have the car paid off by January 2020. In terms of $ amounts that’s $455/mo or $113.75/wk or $28.44 a day, not including the 1.9% interest.

03182019Carupdate

At the time of this posting, we are still in the middle of a bull market. The S&P 500 is at $2,822.48, very close to its all-time high of $2,929 in September 2018. I expect a correction to happen at some point in the near future. When that happens I will start ramping up my invesments. It’s kinda hard to do that though when you’re sinking a lot of cash into a car.

Urgency – Yes, I’m lighting a fire under my ass. Is it sustainable? I’m not quite sure. Life costs money. Fixing cars, buying clothes, going on the occasional vacation, social events, medical expenses, rent, all that stuff. I’m going to give it damn hard try though.

Let’s look at a couple of statistics on millennial debt from CNBC. Look at this January 9, 2019 posting:

1 in 5 millennials with debt expect to die without ever paying it off

“The average millennial (aged 18 to 34) had about $36,000 in personal debt, excluding home mortgages, last year, according toNorthwestern Mutual’s 2018 Planning & Progress Study. That debt can feel both crushing — and endless.” 

By that definition I am doing way better than the average millennial.

americansunsureaboutdebt

It’s fucking insane to think that 20% of people 18-37 are never paying off debt, and 42% don’t know if they can pay off debt. For Gen X, the folks who were working during the time of the greatest economic prosperity in the last 40 years are saying 28% are never paying it off and 35% are unsure. I can see if there were temporary hardships, but it seems like lots of piss poor planning to me.

Even if you invested $50k in the S&P 500 back in 1995 it would be worth 4.4x that with dividends reinvested or $220k in today’s dollars. If you started with the average price of a car ($12k) in 1989 dollars and kept in invested, that would be still be worth $91k 30 years later.

John Bogle founded the ‘First Index Investment Trust’ on December 31, 1975. He recently passed away but imagine you were fortunate enough to have been an early adopter, or if your parents were. The average price of a car back them was $5k, if they invested that amount, without ever investing again…. and just left it there… It would be worth $120k today.

My point is this, we are living in a time of the greatest economic opportunity for everyone. Index funds are extremely easy to acquire especially if you are an American.

s&p500 calculator
DQYDJ S&P 500 Return Calculator

Back to cars for a moment…there are a ton of overdue loans our there. Some folks think it’s a giant deck of cards waiting to come crumbling down. I can definitely see their point. According to a bankrate.com posting, auto loan delinquencies have recently surged past where they were during the Great Recession.

“Some 7 million Americans are 90 days or more behind on their auto loan payments, new data released by the Federal Reserve Bank of New York shows. The number of delinquent loans follows a trend of steady increases since 2011 and has risen to the highest level in the 19-year history of the bank’s loan origination data.”

If you do what other people are doing, you’re going to get the same damn results, myself included. People buy cars and homes they can’t afford to impress people they don’t like. You can have nice things, but be responsible about it. Get that loaded Toyota Camry instead of that Benz status symbol. Better yet, get a slightly used one someone else has taken the depreciation hit on. Unless you really can afford it.

Warren Buffet’s rules of investing“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”

My mom of all people shared two videos on YouTube with me, both of which I already saw before.
1. 3 Reasons Most Black People Don’t Become Wealthy | Valerie Love
I’ve been mostly Black my entire life and my have I seen the mistakes people make. Some people try to look all fancy, but overwhelmed with debt. One had to ask a relative for money to go buy diapers. Years ago he was riding around in a sports car, making music, along with a high paying job. Me personally if I wanted to rely on my credit cards I could go out there and rock designer clothes. I’d rather have the money in my bank account and be near debt free instead.

2.Roth IRA: How to be a TAX FREE MILLIONAIRE with $12 PER DAY – I love Graham Stephan’s work. He seems like a no bullshit, young successful guy. He’s like 10 years younger than me and made most of his money through real estate.

I’m 35 years old, when my father died, his net worth was ~-$50k. It’s kind of tragic in a way, my retirement now is basically as much as what he was in the red for when he passed at age 47. Even after Medicare / medicaid kicked in. I try to learn from his life experience, much of it was outside of his control really. I have the power to control my destiny so you better believe I will fight like hell.

I’ll end it with this, there are lots of people out there who don’t want you to succeed in life. Perhaps a bit of it is a crabs in a barrel mentality. They don’t know any better, what is considered safe and secure is really a recipe for adversity. Just because certain things worked for the baby boomers, doesn’t mean it will work for a Millennial or younger person coming up in an era where benefits are shrinking, wages are staying pretty stagnant, student loans and home prices are ridiculously high,  and we don’t have a cushy pension to rely on.

No matter how deep you are, you can take steps today to improve the situation. I’m living proof of that, along with millions of others. It might take time but there is a light at the end of the tunnel.  I posted a video on a new YT channel I put together. I keep saying I’ll post more content to it. Just want something a bit more scripted and to the point. My first video, essentially another I don’t know what the heck I’m trying to say without rambling post is here.

The Future is The Present

Getting over a bit of a funk post valentine’s day. 15, 16, 17, 18, and now 19 I haven’t been in a relationship. It really does suck and I try to be hopeful / optimistic only for things to fall apart. A friend joked with me the other morning, at least I saved $250. In terms of just cashflow out he is absolutely right..

Many many years ago I used to get an allowance from my parents. The amount steadily increased but toward the end, I was receiving $20/week to complete assorted chores around the house. When I didn’t do the tasks asked of me, I didn’t get paid. This at an early age was a way of teaching me a lesson. If I expected to get paid, I needed to do work.

Around 1997 I started tracking how much money I had saved in a spreadsheet. It initially was just what I had saved in an envelope through allowances and birthdays. My first paycheck from an employers was ~$80. I had almost no expenses and marvelled as I slowly gradually added more digits to my overall savings. Then life hit. Before I knew it, my financial obligations exceeded my income and to this day I have never fully been free. Some of it is unavoidable and comes with being an adult. Can’t live in your parents house forever.

Fast forward to 2019 I’m keenly aware of the fact that I’m getting older. I have a lot of friends and acquaintances as much as 12 years younger. I hear about some of their life aspirations, or things they are up to and just reflect. It’s like fuck I need to hurry along before life passes me by. Plus my energy levels aren’t what they used to be. I get home and a lot of the time I’m tired. Not like have to crawl into bed unable to function tired, but just an overall lack of the energy / drive. Not sure if it’s a commute totaling 70 minutes a day, related to weight, hormones, the lack of a strong social group, or something else. I wrote a couple paragraphs about social missteps over the years but decided not to post.

Fighting the aging process comes along with it, I workout regularly, struggle with my diet, and an experiencing a bit of pattern male baldness. If it was in the back which part of it is I wouldn’t care as much. It’s in the front though, annoying as fuuuuck. Seriously thinking about taking finasteride to help address combat it. I can always stop after a few months and the dosage would be low enough. The only thing that stops me is some of the side effects seen by a very small percentage of people. Monoxodil is another option. My dermatologist says it’s better to catch things early aka now versus when the balding has become more permanent.

I’m trying to control my expenses while still enjoying what I consider a good quality of life. Two of my high school friends lost their husbands within 7 days of each other. Once was due to cancer, the other I’m not really sure what happened. Last month someone I know lost a parent post complications from a massive stroke. Someone else on Facebook I follow lost a parent last week due to cancer. Lots of constant reminders of my mortality. Onto a financial update.

Current Debts:
Nissan Loan – $10,880
Nissan Extended 8yr/120mi Warranty – $1,809.50
iPhone X Loan – $898.72
Credit Card – $0
Total Debt – $13,588.22

Current Retirement:
401k: $45,285.83
Roth IRA: $1,623.44
Total Retirement: $46,909.27

Miscellaneous:
Personal loan funds owed back to me : $1,250 before April 1st
Emergency Fund: $1,501.35
Car Payment account buffer: $545 (next payment due 3/12)

About 11 years ago I got braces for the first time. They really helped give me more self confidence. I had to wear them for close to 2 years, that’s how bad my teeth were originally. Over the years though, I accidentally snapped my bottom retainer in half, my ex threw them out twice since they were in a napkin. I also didn’t see an orthodontist for followup visits. Something about having no job for 6 months, minimum dental benefits, and a massive amount of student loan debt. Simply put, it no longer became a priority in my life.

Fast forward to 2019. After watching all the videos on youtube I was sold on going with Invisalign. However the orthodontist I went to charges $2k more for them and only does it out of one office. Not particularly convenient. Also why should I pay more for the plastic that is going to take longer to treat my condition and require much greater effort in terms of daily upkeep.

Original fee:
Clear Braces: $4,990
Insurance Discount: $2,000
Actual Fee: $2,990 and optional 5% / $150 discount.
With a payment plan this works out to be $399 and 15 individual installments of $172.73. Almost all of the funding will occur through my HSA. So I essentially am getting a tax break and the much desired dental work I’m seeking.

I recently paid off a vet bill for my dog. Standard stuff, immunizations, adn a checkup. The bill was $300. If I wanted to get her teeth cleaned it would be an additonal $325. Call me cheap but I started trying to brush the dog’s teeth myself with mixed success…

This weekend I finished getting my car inspected, and renewed my registration. Not going through an itemized list of expenses. In terms of car ownership, nothing I’ve paid for is what I’d define as too out of the ordinary. However when I look back, there are a shit ton of expenses that just seem to add up over the years.

$650 for tires, $200 for an inspection for the warranty, $2k for the warranty, $480/yr in tolls, $1200/yr in gas, roughly $500/yr in routine maintenance, $1200/yr for insurance.. Relative to my salary none of these is really breaking me, but I do think about how the money could have been invested into assets that go up in value, not down.

OTOH, I could own a house and have worries related to basic maintenance, cleaning, heating / cooling, taxes, etc. It’s all a toss up. I am thinking about 5 steps ahead right now. There are things I really enjoy about the Dallas area, and others I wish were different. I could see myself moving to Austin or another city in the next 4-5 years. Maybe up North but I can’t stand the high taxes, cold weather, and super liberal politics up there. It’s like just because you’re gay and considered a minority, you’re expected to support every possible social welfare program regardless of how to fund it. Aside from my job and familiarity with the area, really not a ton of things keeping me here. I’m ready for some excitement in my life.

A little bit about money but more about health

It’s a new year 2018 is gone and 2019 has begun. A lot has happened financially since making my last posting. I may be a bit long-winded in this post, but just because there are a lot of things to cover.

In hopes of become more sociable and making new friends, I joined a local kickball league. It was a lot of fun going to a structured event every weekend and having human interaction in the process. Unfortunately for me, during the second to last game of the season I attempted to catch a fast moving ball and managed to fracture my finger in the process.

Had planned a 2nd date and bought a ticket to see the Michelle Wolf concert at Texas Theatre. The date went really well I thought. I got to meet his sister and her husband they were both super nice people. Long story short, he went silent during my trip to see family in New York and friends in Boston. I messaged him about seeing each other again. Then he said he had met someone else, but did say I was really sweet. I felt like the wind was knocked out of me. However being single for 4 years and having gone on numerous dates I’m kinda used to it.

Saturday night at midnight I made the decision to visit my local emergency room. This was after losing complete mobility in my finger and starting to see it turn black and blue. Typically in these types of situations I would try and wait until I could schedule an appointment with a normal doctor. However the pain just wasn’t going away and I was afraid of any potential long-term damage. Fast forward to earlier this week, I got the bill after insurance. $1,942! For what was essentailly some tape, a $10 splint, and 3 x-rays on a cd-rom. Their website says that they accept insurance at in-network rates.

Being the fiscally responsible individual I am, I began to look at my options. I asked a friend who works in the insurance claim business. He basically said most of these places are a scam, and to see if they will knock a few hundred dollars off the amount. So that’s exactly what I did. The originally knocked $500 off, then I told them $1,000 is what I have in my HSA. The lady on the phone said she had to clear it with her manager. After two rounds of this and me being direct but polite, they agreed to knock $942 off the bill! This helped me avoid having a mini meltdown about neverending bills.

Less recently, I had to put new brakes and rotors on my car. Driving a car I paid $30k for with squealing brakes is kind of embarassing. Not to mention I unsuccessfully tried to get it fixed under warranty twice. First time they said it was normal, even the service advisor’s brand new sports car does it. Second time, they cut all 4 rotors and the problem returned after just several weeks. Altogether I paid about $700. The car also needed an alignment, synthetic oil change, brake fluid change, battery service, to the tune of ~$250.

My auto insurance recently came up for renewal. After using Allstate since 2013 I began to grow tired of increasingly high prices. I have good credit, the car is nearing 3 years old, no speeding tickets or accidents on my record. Why on Earth should the rates continue to be going up? They basically said it was a statewide thing and they have no control over changing the rates.

On the topic of personal health and weight loss I recently found out that I have high blood pressure. During the previous doctor visit I was given a prescription to help me control my appetite (Belviq). It made me a little bit dizzy but overall I did end up dropping about 7 pounds. This was incredibly difficult, combining a vacation, multiple Thanksgiving outings in Dallas, along with some bad emotional eating habits.

I was also given a prescription to help lower my blood pressure. If I wasn’t able to lower it the natural way, I’d be open to taking it over the short term. However I did a fair bit of research, and a lot of people have had major side effects with it. I’m 35, not 65, but even then I don’t think people absolutely have to take these medications. Along with these visits came $150 worth of lab work to make sure my numbers are within normal ranges.

Since hitting my highest weight of my entire life of 256 pounds I decided to make a series of changes that helped me drop to 242 over the course of about 6 weeks. What have I done?
1. Started doing intermittent fasting. This is singlehandedly one of the biggest contributors to losing weight. I try not to eat too late the night before and skip breakfast.
2. Fasted cardio. Speeds up the process of burning fat.
3. Reduction of alcohol consumption. I usually will only have one drink when I go out. Before I was often having two or three. Then eating in excess on top of that.

I’m still very much a work in progress. I’m not a big believer in having new years resolutions. I instead prefer to have regular habits that contribute toward be getting closer to achieving my goal.

30 Months later I bought a warranty

Usually I’m against these things on principle. I did however decide to purchase a 96mo/120k mile warranty for my car. My thought process is below:

I purchased my 2016 Nissan Maxima in March 2016. My purchase price was approximately $31,380. Currently owe $14,840.54. Overall I still like the car, but….
I’m at 35k miles. Past 36k, I can no longer order an extended warranty for it and have it be considered a new car. The bumper to bumper warranty is 36mo/36k miles, powertrain warranty is 5 years/60k miles. Currently between work, social life, and random activities I drive about 15k miles per year. That puts me at around 5 1/2 years or March 2024.

Couple of quotes off a forum I’m on for the same model:
1. “Need help….. Any Nissan techs on here?? who can I call to escalate a warranty claim. Driver seat motor seized 45 k miles dealer wants $350 for new motor showed me a seat invoice for $3,400 claims Nissan will pay 90 percent. Also said cannot just replace motor in driver seat need to order entire seat etc. I feel like that’s bogus and they are just taking a shot at me.” Then after a few comments were posted: ” It’s a lease. They can have it back broken”

2. “At 24k Miles I had transmission failure which was very disappointed Nissan warranty covered it all but I feel like the car is compromise who else had trans problem” … a second person posted “mine failed at 2K. what was the issue that caused the replacement?”… a third said “Mine failed at 48k” … a 4th “Mine failed at 18k. And the wheel bearings. And the driver seat. And the windshield is next.”

3. “Navigation screen went dark on my 2016 Maxima for 1 minute then rebooted. Should I be concerned? Car is out of warranty”

4. “Has anybody had their USB 1 port go bad? Dealership said it needs to be replaced so no CarPlay for me at the moment. They quoted me $360 for the part and labor. And no, I’m not under warranty anymore. Wondering if I could take it on myself…”

5. “I’m getting my radio replaced!!! Woohoo!!!! The Bluetooth issues I asked y’all about was annoying. I couldn’t take anymore. Thank goodness I purchased the warranty!”

6. “Hey guys, I’m a little worried…
My son came over today with his Altima and we needed to go to the store, so I let him drive my Max. My son used the keyfob to do the auto start, and then got into the car. When he put it in reverse, my husband stopped us because he heard something in the engine that he described as sounding like a plastic spray paint can being breaking like it was being run over–no we did not run over anything in the garage.
I didn’t notice anything when my son was driving, but when I made a quick run to the grocery store, I noticed that between 35-40 the car was doing the kind of surge and let up that I have felt it do in cruise. It has never done this before today. Could this be the beginning of the CVT problem that people have been talking about? I’m concerned because at over 25k, I’m coming close to my warranty expiring.
Have you experienced something like this?”

7. “Has anyone experienced a clunking noise when going over bumps or corners.Just got done with the dealership and they said its the connecting rod and will be covered under warranty.”

Since this current model debuted only 3 years ago, maybe there are some design flaws that just haven’t manifested themselves yet. So let’s compare to the 7th gen Maximas…
1. 9/2015 : “Gotta love that warranty baby!!! Should have her back by Tuesday… Somehow the motor blew and thanks bro”… I bought a 100,000 miles 5 year warranty when i bought the car..block cracked so I couldnt keep anything every little piece has to go back to nissan and I have 68,000 miles on the car” See picture of a brand new engine below the post.

2. 12/2015: “Loving this warranty… Fixed seat track, blown shock, and realigned car… # winning” Then I see a picture of a bill for $1,971.10.

3. 4/2017: “So its confirmed I have the Main Bearing Issue 😒 right outside of the warranty. Should I panic or nah?” His car only had 67,900 miles. Another person commented “I had my long block replaced at 5700 on my 2014 under warranty…the cost on the invoice was $8,300 if I had to pay out of pocket”

4. 3/2017: “Well the extended warranty approved the work and getting a new transmission 🤷🏽‍♂️ let’s see how long this one last 😂 also wanna thanks my dude XX XX for helping out with this. If not they would of denied that XXXX”

5. 2/2017: “Glad i brought that extended warranty. $2000 parts and labor. All i had to pay was $100.. lower control arms. Front Wheel hubs. Slid him a few bucks and he changed my belt too..” …. “The rubber on the control arms basically dry rots and starts tearing. They noticed it awhile back and pointed it out to me. Told me i would need them replaced in the near future.”

6. 4/2018: “This car…. as soon as it’s out of warranty the factory head unit goes out. Then the A/C. Now it’s just reading whatever now. Car is almost paid off and I just started moddinh. Now I have electrical issues. Emissions are due at the end of the month and I cant even pass.”

7. 7/2014: “Just left the dealer. Maxi needs $2k in repairs and warranty just expired. Guess I know where my tax return money is going toward. Smmfh.”

8. 10/2015: “This is what I was quoted today by Nissan Service department. My warranty covers everything but the front Struts, 2 front tires, rear taillight, and the 60, 000 miles service tunes up. After doing the calculation that’s a whole lot of money.” Proceeds to show a bill for $5,246. THe biggest of which were the steering rack, motor mount and tail light unit.

9. 2/2017: “So my 2010 with 126 (6k outta warranty) cvt just flat out died no warning no signs no issues…only person happy about this was the dealer because they wanted me to trade up for a 17 SR a month ago…shoulda took the deal when I had the upper hand..#cvtboom”

10. 4/2016: “Yup! Just got the news it is indeed my AC compressor that died. Thank GOD I kept that extended warranty because I was seriously contemplating cashing it in as this car hasn’t given me not 1 issue in 2 years until now. But even then I will take that as opposed to anything pertaining to the engine or CVT. 😊”… “Didn’t cost 1 cent with my Platinum Extended Warranty😁. Just have to bring it back in the morning because the part isn’t in stock. But that’s like an $700-$1000 job….ughhhh”

I considered trading in for a different car in a less premium class. After factoring in present / future depreciation, a new set of tires I recently purchased,  how few other cars on the market have both the power / size at a comparable price point, sales tax, markup, miscellaneous fees… The decision was very clear. Keep it, pay it off, in 18 months it and the warranty will both be gone.

I’ve already had to make one warranty claim for moisture in my headlight. The part alone costs over $600. Then add-in labor associated with dropping the front bumper, removing the old unit, installing a new one, and reattaching the bumper…

How much did it cost? $2,585 total, 0%, $258 up front and 18 payments of  ~$130. This will cover me for 96 months from my vehicle in-service date, up to 120k miles. 8% of the original purchase price of the car. I did try shopping around at 2 local dealers. One only wanted to cover me to 72k miles for the same price. I politely declined, another only offers warranties through Fidelity Warranty Services, which has a ton of negative reviews… Another never called me back even though I emailed them, and spoke to a salesperson and receptionist…. I know, not the most exciting thing in the world… Short of getting a cheap used car and driving the wheels off it, I do think I’m setting myself up for long term financial success.