What I Do That’s Mustachian?

Someone on one of the forums reached out to me asking what I do that’s Mustachian. My answer was pretty lame, I basically said I stop worrying about money along with a few other things. Coming from a position now of being able to fully articulate my thoughts.

1. 20% to Retirement – Even when the market is getting a beating I still contribute 20% of my gross wages in my 401k. 95% FSKAX and 5 % in bonds.
2. Take lunch to work – At least 3 times a week I bring lunch with me to work. Usually it’s a salad with some extra protein and toppings tossed in.
3. Get gas from Costco. Considering my round trip work commute is 35 miles a day x 5 or 175 miles a week that adds up. Car gets 24mpg so that’s usually 8 or 9 gallons a week at the bare minimum. Double that for everything else outside of that… So 18 gallons @ $2.40 for premium is $43, two other stations nearby are $3.00/gal which would be $54. So $11/wk savings or $572/yr
4. Cut the cord – I don’t pay for cable. My parents do and I log into their account for what I need. My boyfriend has Hulu and Amazon Prime so occasionally we will watch that.
5. Got rid of Amazon Prime – My subscription just came up for renewal. Prime is $119 per year. I rarely watch movies on there, dislike their music app and I don’t have a smart speaker. If I am patient with shipping and shop around I can often find product for cheaper.
6. Use points – With my Chase Freedom Unlimited card I’m getting 3% cashback on all purchases and 5% through my regular Freedom card in rotating categories.
7. Renting – I rent a 1br/1br apartment in a suburban neighborhood. It was built in the 1980s. It’s not the lap of luxury but I’m also not worried about getting shot at night as would be the case in Downtown Dallas… I pay about $915/mo. Not saying I will never be a homeowner again, but taxes alone for property I’d consider would run around $5k/yr. That’s 5 months of rent. Who knows what 2020 may bring. I do see folks coming down in price on their expensive homes though.
8. Use rewards points – When I do go out I try to use apps like grubhub or Ritual for takeout food. With Ritual I got $5 off my first order, frequently saw $5 off Deals and 20x points (every dollar equals a point and at 10k points you get a $10 off bonus coupon).
9. Intermittent Fasting – Ok so this one isn’t for money but I have some extra lbs I want to burn. Skipping breakfast makes that process a lot easier since my body uses its fat reserves. I do consume some tea however to help suppress my appetite.
10. Travel Hack – When I do travel, I will look up prices with a service like Google Flights or Expedia. I refuse to fly Spirit or any other airline where I will feel like a sardine stuffed in a can. I try to avoid travelling on major holidays because the prices can often be double. During my trip last month to Provincetown I did an AirBNB with 4 others and split the costs. The friends cooked a few meals at their home. Little things like that add up, $20 here, $50 there.
11. Buy Discounted Tech – I never pay full price for any of my products from an Apple Store. Sales Tax alone on a $2k mac is $180. Then the prices can be hundreds more than an authorized reseller. I got a Microcenter Apple certified refurb mid-tier MacBook Pro for about $1999 vs $2799 brand new. It looked brand new when I got it, screen is great, battery works fine, no issues with the keyboard.
12. Drink out less – Some years ago when I did go out to dinner I’d often get 2 or 3 drinks. Now I try to limit myself to one. I honestly don’t miss it, I can make myself a quick something or other at home.
13. Stop trying to keep up with the Joneses. I could lease a BMW, Mercedes, or Lexus I wanted to. Maybe one day I will, but for the time being I am perfectly fine with my 3 year old Nissan Maxima.
14. Keep insurance. Without insurance I likely would be borderline bankrupt. Or struggling to pay $50k worth of medical debt. I hate paying the premiums, but it has saved me from huge expenses over the years.
15. Max out my HSA – HSA is a great concept. I get a tax deduction and can use it for things like a blood pressure monitor, orthotics for plantar fasciitis, my braces, normal doctor visits. Since I have a high deductible savings plan this is a also great buffer from unexpected medical expenses. Once I hit a savings certain threshold I can turn it into an investment account.
16. Avoid high interest and maintain good credit. Even with my student loans, after consolidation my interest rate was 4.25%. That allowed me to get ahead much quicker than others with 8, 9% or higher. My car loan is 1.9%… some people with subprime loans pay upwardsof 29%. Not blaming them, but it’s really a night and day difference.
17. Don’t lease a car – It’s different if you own a business obviously. If you have a monthly car payment that never goes away, you have no assets after 3 years. Then if your mileage goes over the terms you’re paying extra. I’m 76% done paying it off my car right now. Then I will own it, not the bank, not Nissan Motor Acceptance Corp.
18. $1-2 movies – Haven’t been in a while but occasionally there will be something that catches my eye. Occasionally I’ll sneak a snack in. Is it ethical? Maybe? But…I usually don’t like what the theaters even have.
19. Pay for a 12 month Apple Music subscription with discounted Apple Gift Cards Per month Apple Music is $9.99 ($4.99 if you’re a college student) . That’s $120 vs $99 for the annual one I have. I got a 33% discount on mine through Best Buy Rewards points, 20% sale on Apple Gift Cards at Best Buy, combined with 3% cashback on my credit card.
20. Get someone to cook for you. Food always tastes better when someone else cooks for you. Especially when they know what they’re doing. We can eat at home, then grab a drink somewhere out if we choose to. If there’s a Happy Hour special running, even better.
21. Buy Clothes on Sale – I like discounts. Clearance, sales, almost every retailer in America offers some type of deal. Even name brand designers should be on sale.
22. I wash my own car. Usually pay about $5 a week at one of those self serve bays instead of $10-15 by going to one of those modern car washes that often scratches your car.
23. I switched to a low cost energy provider. I’m projected to spend $73 this month, but typically average out to around $50.

 

So there you have it. 😀

Is there a recession coming??

I’ve heard so many pundits talking about the inverted yield curve and how it’s a sign of a looming recession. Basically investors can earn more from US treasury bonds over the short term vs the long term. Historically that has been a key indicator that a recession is looming. This happened in 2005 but the US economy didn’t really start to suffer until 2007.

Is this time around different? I honestly don’t think so. Closures in retail left and right, a student loan crisis, unattainably high real estate prices, continual lowering of the Federal Funds rate, economic uncertainty with China and our stubborn president… Reductions in shipping and manufacturing, a glut of oversupply in the automotive market.

For the record I’m in the camp of people who thinks we are due for a market correction and some type of economic recession. Will it be as bad as the late 2000s? Who knows for sure. What I do know is that I’ve been down that path before. https://apple.news/Am2QtY5VxTC2qllXbXWOumw

I was a student during the last two major economic blows in this country. A student with no real money in the marketplace and still operating with a certain naivety from my Gen X and Baby Boomer educators who were indeed able to live the dream on a working person’s salary. My situation today is quite different.

I’m not quite debt free, but between my contribution and my employer, $1600+ goes into my 401k each month. That’s not including a neglected Roth IRA with Betterment that I am presently lacking ample cash flow to fully fund alongside my other short-term obligations. If anything it’s in my favor for the market to go down, that way I can buy more shares of the total stock market index. (FSKAX) at extremely low expense ratios and a higher probability of asset appreciation.

Within a year god willing I will free up some cash flow. $545/mo on a car gone, $129/mo on a car warranty gone, $55/mo for a cell phone gone. That’s $729/mo. for me to live on, use to travel, build up my emergency fund, potentially save towards the down payment on real estate should the right opportunity come along. As I get older and see where each of my dollars is really going, it’s a wake up call how much things depreciate.

I still am staying the course with investing. I get the tax benefit now, it’s great to use compounding to build up a nest egg, a declining market allows me to buy equities at a “discount”, there is an annual limit on how much I can put in a 401k annually, and I have no plans to retire in the next couple years. If anything it’s more like 14 to be retirement optional in 2035.

2008 me invested in penny stocks such as DPDW, which I bought right as it peaked and lost about 50% of my hard earned cash on. I also owned shares of companies like Apple but got too skittish with each and every company announcement, press release, etc. I doubt I will ever buy single stocks again unless I have a huge surplus of cash laying around.

A Tale of the $20 Printer and Thoughts On Clown Cars

December 2013 I purchased a Canon Pixma MX922 printer from Amazon.com for $70. It served me well for the basic scanning and printing functions I threw at it. Never any issues with Drivers or the hardware not working properly. Wireless printing, easy configurability. I’ve owned several Canon products over the years with very few problemns. Last week was a different story…

My Canon All-In-One would not power on suddenly after printing something just minutes earlier. I missed a gym session due to all the time / angst involved in getting the device to work. A few of the items I tried.

1. Tried unplugging and plugging it into multiple outlets. No dice. Power cables almost never go bad so I crossed that off the list pretty quickly.

2. Attempted to do the “hard reset” which involved holding down the on button and pushing the stop button multiple times.

3. Power supply – I did a little research on the cost for one, it was $30 and pretty much a gamble. In an ideal scenario that’s all it is, a task involving unscrewing the defective one and replacing with the working module. However many folks have done this step and the device still wouldn’t work. Then I’d have to deal with the hassle of returning a PSU  back to a vendor, potentially incurring a restocking fee and paying shipping on my own.

4. Looked in Amazon at prices for a newer printer. Canon still makes the MX922 new, available for more than I payed as part of the Black Friday special. However it was $70-90, money I was not interested in spending. The MX 492 runs between $50 and $100 with average reviews. Average is fine, it’s not like I will be using this a bunch.

After weighing my options I decided to check out Facebook Marketplace. There was a lady selling the printer in Grapevine (about a 45 minute drive from where I am) for only $20. She said it was two months old and lightly used. Perfect! I make arrangements, grab money from the ATM on my lunchbreak, and head over there. Dealt with horrible traffic jams but I made it. She was nice, we exchanged money and I went on my way.

The printer works like a charm and you’d never know it was $20. I know No More Harvard Debt and Aaron Clarey both like to shop at Goodwill. I wonder if their experience is pretty similar. Maybe I wouldn’t find top name designer stuff, but something that looks nice for a fraction of what it’d cost new in a store and would look the same after the first wash? Not bad?

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My $20 used wireless printer. How Mustachian…

 

My next purchase may be a Digital SLR again. Back in the 2008-2011, I owned a Canon Digital Rebel XT with the kit lens. It literally took the best quality pictures I’ve ever seen in my life. Even 6 years later the best iPhone simply can’t compare. My father was also into photography growing up. He had some expensive high-end 35mm cameras on borrowed money, but it was fun to just go places and take some shots.

One topic I’ve been thinking a ton about is the relationship between money & happiness. There is a funny video about contentment (https://www.youtube.com/watch?v=lpVqXrvyBYM) and it’s totally true. Many of the things we buy don’t create true happiness. You just end up getting a spike of satisfaction getting something you have been craving. Sure there mey be exceptions to the rule, for folks who know the nuisances of the items they buy and have a genuine need for associated features.

The auto industry is notorious for these practices. They market these $40k+ cars with videos showing no other traffic, on freshly paved mountain roads, as the perfect accessory to your expensive $750k house, or high paying job…  You on the other hand have a reliable car that gets you from point A to point B, with little or no fanfare. Then you see a shiny new RWD Chevy Camaro or Ford Mustang on the TV, or for me an Infiniti Q50 Red Sport or Audi S5. These cars have either power, massive luxuty, a fabulous 10+ speaker studio on wheels, 400+ HP. Your materialistic friends will be in amazement when they see you go down the road in that shiny new machine and view you as highly successful.

The reality of the situation however is a bit different. With that high powered or luxury new car, come a few challenges.

1. Spending a lot mof on gas. Most of these cars aren’t great on gas. The Infiniti gets 20city/26hwy, the 2017 Camaro SS 17/27, Audi S5 18/28. Numbers have gotten a lot better, but if you drive 15000 miles a way you’re looking at $1800+ in gas. Close to $10k in 5 years.

2. More expensive maintenance. I love electronics but things tend to break more frequently than the tried and true mechanical systems that have been perfected over several decades. Plus all these sensors and computers are more likely to go bad.

3. Depreciation. The more you pay for a car the quicker it will depreciate. If a car is worth 50% of its value in 3 years your $50k car becomes worth $25k. The $30k car is worth 15k. A used car cheaper for $15k will lose a lot less value. Even if it’s $7500, that’s still a bunch of money in savings that can be used for debt, or investing.

4. Stress – I’m guilty of this too, you constantly are looking around for where to park to avoid door dings and spend extra trying to keep the car in tip top shape. Then if the car payment, living expenses and other payments are a high proportion to income, a situation emerges where one single repair becames a huge event. Can’t pay for it cash and have to put in on credit cards.

5. Less investment income. Most younger folks who buy these are not maxing out their retirement savings or doing and type of passive investing and some live paycheck to paycheck. They’re missing out on the power of compounding.

6.Sitting in traffic. MMM has written a few times about that how people sit around in these expensive sofas on wheels are just polluting the environment and the bank owns the car not them. What good is 400+ hp if Mon-Friday you are sitting in stop and go traffic most of the time. The luxury part I can kind of understand, if you are spending an hour or more each day.

At the end of the day though if you love a sporty or expensive car and can truly afford it, who cares… I’m paying mine off by 2019, possibly sooner.  I really have learned a lot from my millenial peers who are kicking butt and taking names. Also a lot from the ones who can’t stop buying fancy items that they don’t really need. Higher salaries, high expenses and extreme credit cards don’t equal winning. Savings rates dictate more if you’re going to win in the long term.

Last but not least, I am constantly reminded of the need to go out and have fun. Recent events of late really affirmed that. Feeling alone is a horrible feeling, luckily I get to see my friends later today. I have to constantly work at making new friends and cutting ties with the ones who are always down or make less than a half-hearted attempt to socialize.

One final thought is you can’t take the money with you after this life is over. Push hard for financial independence / early retirement but also don’t have major regrets along the way. The paradox of life is you don’t really know what you regret until life has already gone by. For that I’d say learn from old people. There is wisdom that comes with age.

Mid June Update – Back From Mexico!

Mid-June 2017 update

Yesterday I returned from Puerto Vallarta where I got the joy to experience the unity of two friends in marriage (yes one of my ex and I initially wasn’t going to attend). The trip was a balance between having as much fun as possible I’ll also being practical. I had fun but didn’t go overboard.

Specific to credit card debt my balance as of today is $8,055. I will have an additional charge of approximately $90 which includes food and alcohol for 3 nights at the resort. I paid some friends $100 in cash to watch my dog, a cheaper rate than leaving her with a dog watcher (~$150). There were some other meals involved at the airport / miscellaneous purchases that were ~$100. I saved $200 by doing DFW -> AUS -> DFW on Wednesday then DVR ->PVR.

I started reading a book called Bachelor Pad Economics by Aaron Clarey (assholeconsulting.com fame). It’s one of those books that really makes you take a step back and assess whether the decisions being me today are having a positive impact on your future. A common theme is to focus on having fewer things and more experiences of people. The concept of not being the richest man in the graveyard is a common theme.

Between my company and insurance I’m being charged a $25 dollars fee per paycheck again because I have not completed proper coaching pertaining to being overweight. Have one session remaining and would gladly have began earlier, but I’m at the mercy of the coach’s schedule and my own with work. Not a huge sum of cash but the principle itself is what bothers me….

A little over halfway through 2017 a time I reflect on the things that worked, didn’t work and what I’m doing to help me get closer to my goals. What prolific thoughts do I have????

  1. Death by 1000 cuts – little shit adds up fast. Like that $10 membership, or $15 glass of alcohol. Or fancy entree that costs twice as much as everything else on the menu. I write a god damn blog on this and sometimes I don’t look at my expenses as closely as I should.
  2. You can’t be a penny pincher with everything. There is a time and place. You can’t take things with you when you’re dead. So live a little. If you’re like me get the v6 instead of the slow 4 cylinder. Or a moderately fast / light road bike over the heavy cheap one you will regret riding every time. Or for special events like weddings, family you haven’t seen in a year, it’s okay to splurge a little bit.
  3. Insurance – Get it. Self employed are at a disadvantage because it costs way more. Without it you’re looking at medical bills for years, or bankruptcy instead of a 6 month inconvenience.
  4. Work within reason. I got my Bing certification along with Google AdWords / Analytics. I work hard while at work but I really try not carry it with me. I may hit up a library or Starbucks after work, but it’s always things that will help drive me further long term. Closer to 6 figures/year. Today without any debt I’d be doing amazing, with I’m still doing really well compared to many other millennials.
  5. I love vacations. Hope to do more while I’m young enjoy to enjoy them and have no physical mobility issues.  I also have 3 more weeks left of vacation for the year…. Why the heck not?? 😛
  6. Lighten the fuck up – Joan Rivers was right. Life is short, you should enjoy it. Some folks just want to be a victim, complain all the time and do nothing to change the situation. I used to be like them. Life isn’t perfect but focusing on the solution works tons better.

Here are some pics from my trip. I could write a lot more about the trip, but I know my audience… Be well. Live with passion. ❤

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No More Medical Debt – My Immediate 2017 Challenge

Just when I thought I could sit down to smell the roses after paying off the student loan debts, appendicitis struck. Though my stress levels would be higher if I had the car loan, student loan, *and* medical bills.

There will be more bills next month when I get the appendectomy. A rundown of the bills so far are below. I was going to put it into a spreadsheet but didn’t have the inspiration at 1AM on New Year’s Eve. Not all of these are from the ER  directly. Some are followups after the fact and other include lab work.

So for the first phase I’ll be paying about $4,500 according to estimates. Aflac may reimburse me $1,000 based on 2 days spent in the ER. Getting an itemized bill from the hospital that I’ll submit next week. Worth the $125 that I paid for it. Trying to be as aggressive as possible in getting this debt gone. Unlike the car that is 1.9% fixed, the credit card will jump to ~13% Truthfully though my credit card is at 0% until January 2018. Go Chase Slate card.

I paid over $13k in student loans during 2016. The total for medical debt should be around half that. Thank god I have insurance though. Even with deductibles to hit, I’m still getting a pretty huge discount. Not how I wanted to start the new year, but it’s a short-term reality.

Thanks for reading my blog. Have a Happy and Safe 2017.

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Hospital Emergency Room Bills after Insurance

Month 53: Why 1984 won’t be like 1984

It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, initially welcoming IBM with open arms, now fear an IBM-dominated and controlled future. They are increasingly and desperately turning back to Apple as the only force that can ensure their future freedom.

Oh wait… Not that 1984, but $1,984. As in my student loan balance. That’s about what my computer, a MacBook Pro cost when I purchased it in early 2014. This is a moment to celebrate. Why? For the first time ever my student loan is below $2,000. Progress my friends, it’s all about progress.

What about Retirement? $18,223 in my 401k and $362 in my Betterment Roth IRA. So $18,585 total. Credit cards? Credit card balance is around $1400. Each paycheck I make a $700-800 payment toward that with plans to increase once student loans are gone.

Now what about the car???  Current payoff is $29,169.81 at 1.9%. That’s down from $1997.39 from $31,167.20. I have another payment coming up in a week which will drop it below $29k.

Not being content with where I am today, I started to do a little bit of job searching. Interviewed with a local employment agency for a contract gig. The position sounded interesting and I think would be a step forward in my career. However I don’t think they would be able to match my benefits aside from medical and dental. 160 hours of vacation, essentially unlimited sick time, paid holidays, 5% retirement matching… As a contractor, you need to plan for all of those things.

It’s important to look at the big picture when making big moves like working for another company. Can’t afford to leave money on the table. I’ve been following a little bit of Alex Becker‘s work, read his book 10 Pillars of Wealth where he talks a lot about working for yourself and the benefits of a cash flow business. I also am in the middle of Scott Alan Turner‘s 99 Minute Millionaire ebook along with The Procrastinator’s Handbook – Mastering the Art of Doing It Now by Rita Emmett.

My last point and this is a big one. Don’t stop. Live is a marathon, not a sprint. Just because you had a setback or 5 doesn’t mean you let that break you and give up. From 2009-2011 I went a year without a regular FT job, not qualifying for unemployment and over $42k in student loan debt. I was down, depressed and unsure my future. Today I am on more solid footing. Not balling by any means but I’m way better off than those dark days.

Applying my own advice to different areas of my life, learning from experts to save time, minimize frustration and see results.Hope to share more with you on that soon.

Month 52 – Navient $2,479, Retirement – $17,912

Sorry if these updates are getting boring. I’m making progress still. Down to $2,479 from $15,402 just one year ago and $2,970 one month ago.

month52updateMy retirement is steadily growing. 401k is finally vested after 3 years and up to $17,654. My Betterment account is up to $258.

Other than that I did get a raise even though it was less than I was hoping for. Still need to keep looking for more jobs but not trying to get crazy stressed about that. Kind of question whether to put so much effort into a search when it’s not mandatory.

Speaking to the big elephant in the room. This blog… is called Debt Free 32 – One Man’s Mission to get rid of $45159.35 of debt. The 32 part is because I planned do to this by age of 32. Today is my birthday… I’m 33 now, not 32. A couple months short of my goal, but still making great progress since the start of this blog. Over $45k in payments. Under $2,500 left on the student loan. Worst case this sucker will be gone by December. Best case – October. Then I can celebrate and reflect.