FIRE Progress Report – August 2019

fire

The Money Related Numbers

25.65% (previously 25.16%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

108 months (previously 109)

The number of months until my 45th birthday and our finish date.

102.62 months (previously 104.23)

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

The Expense Related Numbers

8.66 times annual spending (previously 8.45)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

34.63% to minimum FIRE (previously 33.81%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

33.75 times annual spending at goal number (previously 33.61)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $1882 total (employee and employer)

HSA – $430

Roth IRA – $1000

ESPP – $495

Taxable Investments – $235

What’s Happened and What’s Happening

Surprisingly, all of our numbers moved in a positive direction this month. That’s great news and most likely due to the markets hitting record highs.

Our expenses for last month were lower than they were the previous year. This is the first time that’s happened in a while. There were several factors that probably helped with that. We changed our homeowners and car insurance and paid it the previous month. We also cancelled a cruise we had planned for January and got our deposit back.

On the expense side, as is true every year this time, our property taxes were paid. Finally, we had some regular maintenance to do on our 2006 Toyota Prius. It crossed the 250,000 mile mark this month! I ran some numbers and realized that we’ve put over 20,000 miles a year on average on it since we bought it.

Next month is a 3 paycheck month. We’ve decided to take the extra paycheck and split it across three different things: saving to replace a car, house projects, and vacations or trips. We keep separate budget categories for each one. We used to throw it all into one savings account, but then we would question whether paying for maintenance on the car would jeopardize our ability to pay for an upcoming vacation. By separating it, that’s no longer a concern.

FIRE Progress Report – July 2019

Fireworks

The Money Related Numbers

25.16% (previously 23.26%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

109 months (previously 110)

The number of months until my 45th birthday and our finish date.

104.23 months (previously 108.50)

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

The Expense Related Numbers

8.45 times annual spending (previously 8.23)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

33.81% to minimum FIRE (previously 32.91%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

33.61 times annual spending at goal number (previously 35.37)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $1882 total (employee and employer)

HSA – $430

Roth IRA – $1000

ESPP – $495

Taxable Investments – $667

What’s Happened and What’s Happening

We’re continuing to see our money related numbers move in a positive direction, while our expense related numbers decline. We probably won’t see our expenses start to level off until about December and we get a full year of tracking our expenses more accurately under our belt. Overall, this will be positive change in calculating our retirement numbers, but it doesn’t look good in the meantime.

One of the larger expenses this month was our car and homeowner’s insurance. We can expect it to be this way each year in June for the foreseeable future. We also had a couple of short excursions that added to our expenses. It’s not worth living like a hermit just to reach financial goals. If it adds to our quality of life, we’ll spend money on it.

That being said, we’ve started to accumulate experiences more than things. “Stuff” gives you a temporary satisfaction, but you can talk about experiences and get excited about them for a long time before and after they happen.

The stock market continues to move in a positive direction, which will continue to bolster our numbers until a correction occurs. At that point, we’ll be buying at a discount and stick to the plan so we can take advantage of any recovery that occurs.

Ohio’s Ludicrous Tax on Hybrid Vehicles

Toyota Prius

I recently discovered that as part of Ohio’s new bill to raise money for roads and bridges, they also passed a new $100 registration fee on hybrids and a $200 registration fee on electric cars ( https://www.cleveland.com/open/2019/05/ohio-owners-of-electric-hybrid-cars-say-new-taxes-fees-are-punitive.html). The reason for these fees is supposedly because these vehicles use less gasoline, so they therefore do not pay as much in tax from gasoline purchases.

This argument for electric cars makes sense since they do not use any gasoline. However, the hybrid car tax appears to be excessive. Let’s do some comparisons to prove my point.

2006 Toyota Prius

This is the car I drive. It’s got over 249k miles on and it keeps on running. According to FuelEconomy.gov it gets an average 46 MPG. If I drive an average of 15,000 miles per year, I would consume a little under 327 gallons of gas. The new gas tax is .105 per gallon. That means I would pay an additional $34.24 a year in fuel tax at the pump. Not bad. However, we now need to add in the new $100 registration fee for my hybrid, which brings my grand total to $134.24 a year to fund the roads.

2006 Toyota Camry (or other similar 25 MPG sedan)

I don’t drive this car, but lets assume that there are quite a few cars out there like this and they average 25 MPG. If this car also travels 15,000 miles per year, it would consume 600 gallons of gas. With the new gas tax, the owner of this car would pay an additional $63 a year at the pump. However, they don’t have a $100 registration fee, so therefore, it stops right there.

The Interesting Part

If we take into account the full fuel tax of $.385, the total tax paid comes out to be $225.55 and $231 respectively. That sounds a bit more fair until you start looking at higher mileage vehicles that are not hybrids. For example, a 2006 Toyota Corolla can average 29 MPG, which means in the end, they only pay a total of $199.14 in fuel taxes per year, compared to the Prius $225.55.

We’ve been assuming 15,000 miles a year. Let’s look at some other mileages:

12,000 miles

Prius (46 MPG) – $200.44

Camry (25 MPG) – $184.80

Corolla (29 MPG) – $159.31

10,000 miles

Prius (46 MPG) – $183.70

Camry (25 MPG) – $154

Corolla (29 MPG) – $132.76

Conclusion

The only way to save more money driving a Prius, at least in regards to taxes is to drive more to get your money’s worth. Not an ideal situation. If you’re someone who drives less than 15,000 miles a year, you’re probably better off with a good old fossil fuel burner that gets reasonable mileage and you’ll likely come out ahead when it comes to the new taxes to fun Ohio’s roads.

Money Saving Win of the Week – Broken Washer

laundromat

Our 12 year old washer started throwing out an error code recently and wouldn’t complete a wash cycle. I ended up looking up the code online and it pointed to the washer pump not working correctly. I checked all the hoses and the trap for something blocking it, but couldn’t find anything. The pump did seen to be making a weird noise as well.

At this point, I could have called an appliance repair company and paid easily over $100 to have them come out, order a part or two and repair it. Instead I went on Amazon, found a replacement drain pump and bought it for less than $24. A quick search on YouTube uncovered a video on how to replace it. After it arrived, I had it replaced in about 10 minutes and it was working again.

Since then we’ve gotten a different error code at the end of the wash cycle from time to time. Everything still works, but the error code comes up. I contacted the seller and since we couldn’t quite figure out the cause, they refunded me the money for it and didn’t require me to return it. In the meantime, we’ll leave it in since it seems to be working most of the time and if we need another one, I know where to get one for about $25!

FIRE Progress Report – June 2019

fire

The Money Related Numbers

23.26% (previously 24.10%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

110 months (previously 111)

The number of months until my 45th birthday and our finish date.

108.50 months (previously 106.61)

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

The Expense Related Numbers

8.23 times annual spending (previously 8.71)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

32.91% to minimum FIRE (previously 34.88%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

35.37 times annual spending at goal number (previously 36.19)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $1882 total (employee and employer)

HSA – $430

Roth IRA – $1000

ESPP – $495

Taxable Investments – $2061

What’s Happened and What’s Happening

This last month saw a slump in the markets which made all of our numbers move in the opposite direction. On the bright side, all fund purchases while the markets are down are purchased on sale!

We also had a windfall in the Taxable Investments category due to the employee stock purchase program coming in this month. I calculated this number by doing some rough calculations to determine how much was gained over what was put in. This last 6 months was great, but the next 6 months might only be average. Since I’ve been putting in the ESPP numbers in the previous updates, it didn’t seem right to put it under Taxable Investments and double count it. Essentially all of the ESPP proceeds were moved into our taxable investments at Vanguard instead of leaving it in company stock, which could be volatile.

We reevaluated our auto and homeowner’s insurance this past month and were able to find a better deal. For years. our homeowner’s insurance has been increasing by quite a bit, but we haven’t been able to find a better deal because our auto insurance was incredibly competitive. This year we finally found a better deal and have combined them under one company again.

FIRE Progress Report – May 2019

ship with sails

It’s May and we’re finally moving full speed ahead!

The Money Related Numbers

24.10% (previously 23.45%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

111 months (previously 112)

The number of months until my 45th birthday and our finish date.

106.61 months (previously 108.07)

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

The Expense Related Numbers

8.71 times annual spending (previously 8.65)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

34.88% to minimum FIRE (previously 34.58%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

36.19 times annual spending at goal number (previously 36.87)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $1882 total (employee and employer)

HSA – $430

Roth IRA – $1000

ESPP – $495

Taxable Investments – This will start after we’ve built up an extra cushion in our savings account, which will be next month!

What’s Happened and What’s Happening

Our annual expenses continue to become more accurate, which means they are also increasing each month. That means our “expense related numbers” will improve at a much lower rate, or possibly go backwards for a while. Some of the larger unusual expenses this month include life insurance, car maintenance, and a deposit on a cruise next year.

The investment numbers for this month are not at the very end of April/beginning of May because we went through the process of transferring many of our investments to Vanguard. It took a couple of weeks to complete the process. I gathered the numbers as soon as the transfers completed. We’ll be moving some of money to different mutual funds over the next month or so.

FIRE Progress Report – April 2019

field of tulips

April showers, bring May flowers. Let’s hope so!

The Money Related Numbers

23.45% (previously 22.95%)

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

112 months (previously 113)

The number of months until my 45th birthday and our finish date.

108.07 months (previously 109.21)

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

The Expense Related Number

8.65 times annual spending (previously 9.63)

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

34.58% to minimum FIRE (previously 38.51%)

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

41.95 times annual spending at goal number (previously 36.87)

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $2805 total (employee and employer)

HSA – $645

Roth IRA – $1000

ESPP – $738

Taxable Investments – This will start after we’ve built up an extra cushion in our savings account, probably closer to the end of the year.

What’s Happened and What’s Happening

Tax season! That exclamation point doesn’t really express my feelings about having to pay as much as we did. You’ll notice that most of the expense related numbers have moved in a negative direction compared to the previous month. That’s due to a dramatic increase in spending this month from a spring break trip to Florida and paying our federal tax bill. For what it’s worth, our Florida trip cost less than the tax bill.

On the bright side, our money related numbers got better. There was an extra paycheck that helped cover some expenses and gave us an extra boost in what was invested this month. We should be very close to getting our savings account padded. We call this the emergency fund to the emergency fund. Once that’s done, we’ll be kicking up the taxable investments!

FIRE Progress Report – March 2019

Beware the ides of March, unless you’re saving for your future!

The Numbers

22.9546%

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

113 months

The number of months until my 45th birthday and our finish date.

109.21 months

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

9.63 times annual spending

This is how many multiples of our annual spending we have saved up towards our goal. For example, if this value was 9.1 and we spent $10,000 annually, we would have $91,000 saved up.

38.51% to minimum FIRE

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

41.95 times annual spending at goal number

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $1846 total (employee and employer)

HSA – $430

Roth IRA – $1000

ESPP – $486

Taxable Investments – This will start after we’ve built up an extra cushion in our savings account, probably closer to the end of the year.

What’s Happened and What’s Happening

This was a relatively steady month in terms of just putting money away. Fortunately or unfortunately, depending on your point of view, we got hit with a pretty big federal tax bill. That’s going to delay our savings plan by about a month. The plus side is that we made more this last year in side work and investments.

We are getting a small refund back for our state income taxes that only marginally offsets what we owe the federal government. Hopefully, with some side work and an extra paycheck in March, we’ll be almost back to having our savings account padded again and can finally start putting more money into taxable investments.

FIRE Progress Report – February 2019

Chugging through 2019 at full speed ahead!

The Numbers

22.2137%

This is our invested assets/target number. Our invested assets span across a variety of investment vehicles such as 401k, HSA, IRA, Roth IRA, ESPP (Employee Stock Purchase Program) and standard taxable mutual funds.

114 months

The number of months until my 45th birthday and our finish date.

110.93 months

The number of expected months until we reach our target number based on our current expected monthly contributions, assuming a 10% annual return.

9.37 times annual spending

This is how many multiples of our annual spending we have saved up towards our goal. For example, if we spent $10,000 annually, we would have $91,000 saved up.

37.48% to minimum FIRE

The minimum number to achieve FIRE is 25 times our annual spending. This number shows how close we are to the absolute minimum.

42.18 times annual spending at goal number

We have a goal amount that we’d like to reach. Given our current annual spending, this is how many times our annual spending we’ll have saved when we reach our goal number.

Where We Saved This Month

401k – $1846 total (employee and employer)

HSA – $430

Roth IRA – $1000

ESPP – $486

Taxable Investments – This will start after we’ve built up an extra cushion in our savings account, probably closer to the end of the year.

What’s Happened and What’s Happening

Overall, most numbers improved this past month. We essentially have two goals to reach for FIRE. The first is a money amount that we want to have invested before we can say we’ve reached FIRE. The second is a multiple of our annual expenses that we would like to have saved before reaching FIRE. Numbers related to our money goal improved greatly. Because I’ve been tracking our expenses more accurately in YNAB, our numbers related to expenses will probably look worse for about another 10-11 months. In the end though, we’ll actually have a much more accurate indicator of where we stand when looking at how many years of expenses we’ll have saved up.

We should be able to finally get our savings account padding built up this month and start putting money into taxable investments starting next month!