No Restaurant October: Results

Happy Halloween!  Was your October spending as scary as your costume, or as awesome as mine?  (I’m in a Deadpool onesie this year.)

Well, the challenge has completed, and I’ve gotta say:  though it was certainly difficult at times, this month has been great for our budget!  We both did more cooking, and we’ve recovered a chunk of the damage we did with all the eating out during the renovation.

We ate out a bunch on our Disney trip in the middle of the month, but I mentioned that I wasn’t counting that in the original No Restaurant October post.  Other than that, we haven’t eaten out at all.  There were a few grey-area situations, though:

  • I had to travel to the office for a few days this month, and they offered free Chipotle for lunch one day.  I declined, because this challenge wasn’t just about the money for me; I really wanted to see if we could do without restaurants.  I managed to make and bring enough food that I survived and thrived without a single restaurant or grocery trip while I was in town, which was pretty cool.
  • A friend stayed with us for a few days and offered to bring some Krispy Kreme donuts.  I figured that these were just a fresh version of the exact same thing that could be bought at Wegmans, so we accepted.  ..This could probably constitute cheating, I’ll admit.
  • There was a fall festival on Saturday at the local shopping center, and one of the restaurants was handing out chicken wings with samples of their famous sauces.  I passed – though boy did I want one.

In the post that inspired this challenge, Mrs. Frugalwoods mentioned that having frozen food at the ready is the key to being successful in a challenge like this, and boy was she right!  We loaded up on easy-to-make foods like freezer pizzas and just-add-water mashed potatoes, and they were a lifesaver.

So, how do we keep up the momentum from this challenge?  Well, we’ve decided to limit our restaurant outings to twice a month* from here out.  This seems like a comfortable place for us that allows us to enjoy going out while still limiting its influence.  It does mean that we’ll probably be planning our outings and using our two allowances most months, but that will still keep us from going overboard, which we have a tendency to do.

How was your No Restaurant October?  Having a great / spooky Halloween?  We’re gearing up for Thanksgiving, but we’ve already finished doing our stocking-stuffers shopping for Christmas.**  (Gotta love the Dollar Tree and Five Below!)

 

* We’re allowing an additional outing for each of us if it’s to catch up with a friend in a situation where there’s no easy way to do so otherwise.

** DW’s family picks names out of a hat to fill stockings for each other, kind of like a Secret Santa thing.  DW’s mother (DMIL) doesn’t ever put her name in the hat, though, so we end up making an extra every year so she’s not left out.  She’s surprised every year; it’s fun.

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ttf vs Rule One Investing

Today, I came across an advertisement on Facebook for a “financial knowledge” quiz, hosted on “Rule One Investing,” to determine “what type of investor” I am.  Figuring this would be crap, but still insatiably curious, I clicked the ad and took the quiz.  I had to put in fake information for email address and name to get the results (red flag one), and then I came across this gem in the grading:

retirement_needs

Let’s dissect this, shall we?  I’ll even ignore Social Security, to give Rule One Investing the benefit of the doubt.

How much does this average American actually spend?  Well, the average American between ages 55 and 64 makes $58,145 pa and saves very little of that.  To give Rule One Investing even more benefit for their calculations, let’s say that this average American pays no taxes and saves no money – they spend every penny of that $58,145 every year and plan to continue doing so into retirement.

The average retirement age in the United States is currently 63, and the average life expectancy in the United States is currently 78.8 years.  Let’s just round that to 79 for easier numbers.  That means that the average retirement last for 16 years, and your retirement funds need to cover you for that time.

Since we’re talking about a traditional retirement age, we should be conservative with our withdrawal estimates; this theoretical person won’t be easily able to go back to work to earn more.  Instead of the 4% withdrawal rate I’ve mentioned in the past, let’s say that a safe withdrawal rate for this retiree is 3%.  That means they would need close to $2 million in their retirement accounts to retire.

But wait!  That’s for a retirement lasting 30+ years – and likely coming out the other end with lots of extra money.  But we already know that our average retiree is only going to enjoy their retirement for 16 years.  For a conservative investor spending 15 years in retirement, Vanguard recommends a 6.2% initial withdrawal rate.  Let’s drop that down to 6% to cover that extra year.  At a 6% safe withdrawal rate, this retiree only needs $1 million to keep their spending levels up in retirement.

Now, several of the answers on this quiz were geared toward convincing me to sign up with this Rule One Investing site to learn to pick stocks and beat the market, so of course they’re going to try to make me think I need more money.  But, even giving them the best benefit of the doubt I can, I can’t come anywhere near that $3 million figure.  And, when you take a more realistic view of retirement – that the average retiree pays taxes and saves while working, and that expenses go down for them even while Social Security starts supplementing their income – you find that the $500,000 number is actually closer to the truth.

So don’t get too discouraged if you don’t have millions in savings.  Stay the course, keep saving as much as you can, and you’ll be just fine.

October Stats

Another quick stats update:

INTEREST RATE REMAINING BASE PAYMENT EXTRA PAYMENTS
Student Loans 3.80% $22,605.16 $183.34 $150.00
Mortgage 3.50% $303,741.46 $2,259.03 $0.00
Total $326,346.62 $2,442.37 $150.00

We received housewarming gifts from my grandmother and my aunt and uncle this month, so we immediately applied those to the student loans.  Other than that, breathing room is nonexistent, as always, here.

It’s getting colder, so heat’s been running some.  We bought some sealing solutions for the front door, and I’m hoping to install those this weekend so we can stop the enormous air leaks that make it more difficult to stay warm.  I also need to hit a store to get long johns and slippers.

We’re hoping to head to the local Regal on Friday to see The Nightmare Before Christmas in a theater.  It’s my favorite movie, and I’m very excited!  It’ll be nice to get out of the house a bit, too.

The Job Experience, by livingafi

This past week, I read and really enjoyed The Job Experience series of posts by livingafi, and I wanted to share it with all of you.  This series documents basically the entirety of his career, in short, digestible chunks.  The entire series is pretty lengthy, so I’ve linked to parts that I really liked below:

Other than being a thoroughly enjoyable read, I really took away a couple key pieces of encouragement.  First, you don’t have to be a natural saver to reach financial independence; you can even have a rocky start and really turn it around and get on track.  Second, even though I complain a lot, I have been really lucky in my career, when compared to some people’s hellish experiences.  I’ve had my doozies in terms of work environment and company culture, but I’ve never had to work 60 hours in one week, much less week after week.  I’ve been able to get away with ~40 hours most weeks in my career, and I’m pretty thankful for that.

This quote from the last post I linked above is particularly encouraging to me, who is still years away from FIRE:

I often see people on financial independence forums say things like:  I’m saving so that a future version of me will be happy.  As the current version of “future me,” let me say this:  I’m incredibly happy that past me has stayed the course.  And that’s a drastic understatement.  This needs to be over — and thanks to the choices I’ve made, it will be, soon.

10/25/16:  One more quote that I really wanted to share, this one from the effects of work link:

Everything has shifted now.  I don’t want to be great. At anything, really. Instead I want to be happy. And that requires a mental adjustment to wanting to be merely good at a few specific things — a good husband, a present and loving family member, a supportive friend, and a decent human being.  I want to pursue things that provide pleasure and satisfaction on a day-to-day basis.

This really rings true to me.  When I was younger, I wanted to do great things; now, I just want to enjoy life and be a good husband and friend.  Maybe father one day.  Like livingafi, I don’t know if this is all from work or all from getting older, but I imagine it’s a combination of those things; as I experience more of life, I find that I want to spend more time being happy and less time pursuing great accomplishments.

Of course, as DW rightly points out, my ambitions haven’t really died – they’ve just shifted to the journey toward financial independence and reclaiming my time for myself.

No Restaurant October: Update

Well, we just got back from our Disney trip, and boy has it been a long bit of travel home.  We were sorely tempted to stop at a restaurant to have an easy dinner, but it’s No Restaurant October, so that option was right out.  This is where having handy freezer foods available really saves your bacon:  I am preheating the oven for some Bagel Bites right now, and cider in the beer fridge will go great with those.

Other than today’s temptations, it’s actually been pretty easy to avoid restaurants.  We’ve both cooked a bit more at home, and we’ve had some variety.  One of the crucial steps we’ve found is to eat before going shopping, since that’s one of the easiest times to fall back to getting some easy food out.

How about the rest of you?  How is your challenge going?  CFO Mom, what’s the good word?

Fall is my favorite season, so I am enjoying the crisp air, when we have it.  The awesome Halloween party we did at Disney makes me think it’s time to start looking forward to Thanksgiving, but, of course, Halloween hasn’t even happened yet!  Time is weird, sometimes.

Coast number

I have a series of financial goals, and each one is a step on the way to the next.  Until recently, the steps were these:

  • Get out of debt:  I expect this will happen when we sell the house and use the proceeds to pay off my student loans.  This will drop the mortgage and finish off the student loans all at the same time.  You can follow this journey on my monthly stats posts.
  • Become financially independent:  Save enough in retirement and taxable accounts to have 25 times our annual spending.  At that point, we will be free of the need to actively earn money because we’ll have enough passive income to cover our spending.  I hope to start posting about this journey to our target number soon, but it pretty clearly leads to the final step:
  • Retire early:  This one should be pretty self explanatory; I want to have time to sleep and follow the rest of my passions.  That doesn’t mean I’ll never make money again, and it doesn’t mean I’ll be sitting on the couch watching TV all day, either.  I want control of my life so I can focus on the things that give it meaning – and working for a paycheck certainly doesn’t.

However, in a recent very (very very very) long car ride with DW, we talked through a lot of our financial plans and reworked these goals a little.  Now, they look more like this:

  • Get out of debt.  This step doesn’t change.
  • Reach our coast number:  Once we hit a certain amount in investments, we can stop investing and let them grow on their own and still be able to retire at 65.  This is called a “coast number,” because, once you hit it, you can just coast until retirement.  Of course, the more you invest after you hit that number, the closer you’ll bring retirement.  Selling the house and moving to Florida will help with this step:  first, not living in such an expensive house (with its requisite maintenance and taxes) lowers our target number; second, putting the rest of the house equity into investments will move us toward that target number; third, dropping state and local taxes (Florida has neither) will let us start maxing out my 401k every year; and fourth, the difference between our house payment and our target rent payment can go into our taxable account.
  • Retire early:  Since DW has just gotten an agent for her first manuscript (yay!), it looks like, by the time we start getting closer to FI, she’ll be actively and passively bringing in some income.  Seeing as how she plans to continue writing for the rest of her life, I can actually retire before we’re fully financially independent, as long as we can cover our spending while still letting our investments grow.
  • Become financially independent:  As long as we’re spending less than 4% of our investments each year, they should grow, eventually producing enough passive income to cover all of our spending.  At this point, we are free of needing to actively earn money!

So, this is probably a good time to talk a little about our spending!  Once we start renting, our target spending will be 40k pa.  I’ll break that down in a future post, as this one’s getting a bit long, but that 40k pa translates to $1 million in pre- and post-tax accounts.  (This doesn’t take into account any future income from social security or pension.)  For us to reach that number by 65, here are our coast numbers for each year:

Year Age Coast Number
2016 30 $253,415.47
2017 31 $263,552.09
2018 32 $274,094.17
2019 33 $285,057.94
2020 34 $296,460.26
2021 35 $308,318.67
2022 36 $320,651.41
2023 37 $333,477.47
2024 38 $346,816.57
2025 39 $360,689.23
2026 40 $375,116.80
2027 41 $390,121.47
2028 42 $405,726.33
2029 43 $421,955.39
2030 44 $438,833.60
2031 45 $456,386.95
2032 46 $474,642.42
2033 47 $493,628.12
2034 48 $513,373.25
2035 49 $533,908.18
2036 50 $555,264.50
2037 51 $577,475.08
2038 52 $600,574.09
2039 53 $624,597.05
2040 54 $649,580.93
2041 55 $675,564.17
2042 56 $702,586.74
2043 57 $730,690.21
2044 58 $759,917.81
2045 59 $790,314.53
2046 60 $821,927.11
2047 61 $854,804.19
2048 62 $888,996.36
2049 63 $924,556.21
2050 64 $961,538.46
2051 65 $1,000,000.00

This chart assumes 4% real returns pa, so these are all in today’s dollars.  If we hit our coast number of $253,415.47 this year and stopped investing, I would expect our investments to track basically like the chart until we had $1 million in today’s dollars in 2051.  Of course, we’re not going to hit that this year, so the actual numbers may be a bit different by the time we do.  However, it’s good to have a goal that’s closer than FIRE.

Once we move to Florida in 2018 and have more leeway with our cash flow, I’ll start to feel less stressed.  Once we hit our coast number, which I expect to happen some time in 2020, I’ll feel much more secure in our finances.  At that point, I may try to go to 80% time at work.  I’d prefer 60%, but I think that would push my retirement date out too far, and having three day weekends is still a sight better than what I’m doing now.

Asian Noodle Salad

Tonight, I made my Asian Noodle Salad, which is pretty straightforward and always a hit, so I thought I’d share the recipe.  When I create my own recipes, I tend to just throw things together, so this is almost stream of consciousness.  This technically makes about four servings, but, since we usually have it for dinner with nothing else, it really feeds two of us.

I also really like the Crispy Tofu in a flour tortilla with hummus, rice, and fried onions.  Great travel (or home) food!

Asian Noodle Salad

Ingredients

Two portions of angel hair pasta, uncooked
6oz of Crispy Tofu, recipe below
1-2 hearts of romaine, washed (DW prefers less lettuce so there’s more pasta)
1/2 container of grape or cherry tomatoes, washed
Toasted (or untoasted) sesame oil

Directions

While the tofu is frying (below), boil the pasta according to the directions on the box.  Drain and place into a large bowl.  Add the tofu.  Chop and add the lettuce.  Cut the tomatoes in half and add them.  Add a splash of sesame oil.  Mix and serve immediately.

Tip:  The reason that I try to boil the pasta while the tofu is frying is to keep the pasta from clumping together while it’s in the bowl.

Crispy Tofu

Ingredients

Oil (I use olive oil)
6-8 oz of extra firm tofu, pressed and cut into 1/3-inch cubes
Soy sauce
Ketchup
Chopped garlic
Honey
Toasted (or untoasted) sesame oil
Orange juice
Sriracha, optional
Jam or jelly, optional (I love mango jelly for this)

Directions

Take a small glass bowl and fill it almost halfway with soy sauce.  Add some ketchup, a teaspoon of chopped garlic, a squeeze of honey, a pour of sesame oil, a splash of orange juice, and a squeeze of sriracha if using.  Mix together.  If you have some jam or jelly around, add a heaping teaspoon, then crush it into the sauce so that it mixes well.

Pour enough olive oil into a large pan to cover the bottom.  Heat the oil over medium to medium-high heat; once the oil is hot, add the tofu.  (Make sure you pressed it really well before cutting it, or the liquid will cause burning oil to fly at your hands and arms.)  Spread out the tofu cubes so that they are in a single layer.  Stir them around every couple minutes until they are golden brown, about 10 minutes.  (If the tofu sticks to the bottom of the pan at first, scrape it up; those bits are delicious.)

When the tofu is done frying, take it off the heat for about a minute, then pour in the sauce and stir.  Return to heat and cook down, about five minutes.  The sauce should cook down to the point that there’s very little liquid left when you are done.