FIRE Progress Report through October 2019

fire

Let’s dive right into the numbers for October.

The Money Related Numbers

26.84% (previously 25.84%)

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.

105 months (previously 106)

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

96.44 months (previously 98.75)

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

8.42 times annual spending (previously 8.26)

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.

33.67% to minimum FIRE (previously 33.02%)

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

31.36 times annual spending at goal number (previously 31.94)

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.

How Much We Invested

31.03% of Gross Income Invested

This is the amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

37.99% of Net Income Invested

This is the amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

35.03% of Gross Income Invested with Employer

This is the amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

42.89% of Net Income Invested With Employee

This is the amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

What’s Happened and What’s Happening

We’re still ramping up towards getting a full picture of our yearly expenses. Only a couple months away and we’ll have a full year of adjusted expenses.

This month’s unexpected expenses include a new 12V battery for the Prius and paying for our AirBnB for our trip to Nashville. It wasn’t a crazy amount, but were still expenses we wouldn’t normally have.

Most of our numbers improved this month because the market had a nice little run towards the end of the month. Next month, the Employee Stock Purchase Program will doing it’s semi-annual stock purchase, which will allow me to reinvest those dollars with a guaranteed return on the money I put into the program.

FIRE Progress Report through September 2019

fire

Let’s dive right into the numbers for September.

The Money Related Numbers

25.84% (previously 25.40%)

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.

106 months (previously 107)

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

98.75 months (previously 101.41)

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

8.26 times annual spending (previously 8.34)

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.

33.02% to minimum FIRE (previously 33.35%)

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

31.94 times annual spending at goal number (previously 32.82)

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.

How Much We Invested

49.43% of Gross Income Invested

This is the amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

60.52% of Net Income Invested

This is the amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

53.42% of Gross Income Invested with Employer

This is the amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

65.40% of Net Income Invested With Employee

This is the amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

What’s Happened and What’s Happening

The How Much We Invested numbers look great this month. However, that’s because I got paid for some side work and I don’t include that in my income side of the calculations. If you have a skill that you enjoy using and someone is willing to pay you for, use it. This will accelerate you debt pay down, investing, or simply meeting other financial goals.

Our expenses continue to climb every month. I’m optimistic that by the end of this year, they’ll begin to level off. As of December, we’ll have been tracking our expenses more accurately for a full year.

Finally, this month, I’d like to mention some expenses that we don’t normally have every month. First, I got my wife a new phone. She had used her old one for almost two and a half years. The battery still held a great charge, but it just couldn’t keep up anymore. We found a great deal on a new Moto Z3 Play direct from Motorola. Granted it’s last years model, but at a significant discount and comes with a full warranty.

We also purchased some plants to finish our landscaping. We had ripped out some old plants that had outgrown their space, moved all of the stone, and laid new weed barrier. It took several weekends but looks much better and the plants won’t look overgrown anymore.

Last but not least, winter is on its way. That means it was time to get the furnace and A/C tuned up. We generally do this every couple of years. It’s always a good sign when the technician opens it up and says “this looks brand new”.

I hope your autumn is off to a good start. My wife has picked up a seasonal job to raise enough money that we can replaces our downstairs carpet. It’s long overdue and one of the last remaining projects the house needs to feel “complete”.

FIRE Progress Report through August 2019

bonfire

Don’t worry, you’re not experiencing déjà vu. This is a new post. Starting this month, I’m changing the naming so that it coincides with how I track things. When I keep track of the numbers to report here, I always keep track of them with the month they occurred. For example, if I put $100 away on August 10, it goes torwards the month of August. However, I’ve been putting these posts out using the month I’m telling you the numbers, not the month the numbers actually occurred. Obviously, that gets confusing for me, and might confuse you when I mention Christmas in the January report. Going forward, the title of the post and the numbers will match to when things actually happened.

The Money Related Numbers

25.40% (previously 25.65%)

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.

107 months (previously 108)

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

101.41 months (previously 102.62)

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

8.34 times annual spending (previously 8.66)

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.

33.35% to minimum FIRE (previously 34.63%)

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

32.82 times annual spending at goal number (previously 33.75)

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.

How Much We Invested

29.38% of Gross Income Invested

This is the amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

35.74% of Net Income Invested

This is the amount we invested in things like 401k, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

33.38% of Gross Income Invested with Employer

This is the amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment.

40.60% of Net Income Invested With Employee

This is the amount we invested in things like 401k including employer contributions, Roth IRA, taxable accounts, and Employee Stock Purchase Program divided by income from our main employment, but with taxes subtracted.

What’s Happened and What’s Happening

August was another 3 month paycheck, which means we automatically put away more this month. Our expenses continue to climb until they will eventually level off in December due to the the fact that I started counting them more accurately last December.

I’ve changed the How Much We Saved section to be How Much We Invested and I started tracking new numbers. I’ve saved off the numbers I was publishing in previous months and I’m now using those to track future progress based on how much we’ve invested on average over the last 6 months. In the past, I came up with an estimated number and used that for future projects. This should be more accurate over time.

You’ll notice that the How Much We Invested are now percentages. I thought that posting actual numbers may not be as encouraging when people are looking at them and might be thinking “I could never save that much”. However, when it’s all relative (such as a percentage of income), it potentially becomes more achievable. The other goal numbers that I’ve been posting have always been relative to either our target numbers or our expenses, so now I’m simply making that consistent across the board.

Saving Money On Medical Expenses

This entire post is born out of a recent frustrating experience we had with ProMedica, one of our local health systems. We had to go to a specialist and in the process he suggested we get 3 different tests done to eliminate possibilities. The tests were scheduled and we had a idea of the cost of them in our mind (and from doing some research). One of the tests was to be done at the office of a different specialist. While at the other specialists office, they did an additional test that we weren’t aware they would be doing. It’s their standard practice to perform the test on new patients.

When we received the bill later, there was a huge charge with a general description (it literally said “General” with the name of the department in the title). Turns out it was for this additional test they do for new patients. Before insurance, the test would have cost over $4600, and after insurance it still cost $2100.

We’ve went back and forth with them for a couple of months now, trying to explain the craziness of this situation, especially when the same procedure could have been done other places had we known we needed it, for a fraction of the cost. I’ve talked to multiple different people at ProMedica – some of them call you back, others you have to keep following up with and sometimes you still don’t receive a call back.

What I’ve Learned

Ask What Will Be Done

When scheduling the appointment, ask what they will be doing as part of the appointment. This will give you an idea of the procedures involved which will help with the next tip. If they can give you the procedure codes, it may make looking them up easier too.

If you’re talking to a scheduling person, they may not know the procedures that will be done. In which case, talk to someone in the office, perhaps even their billing person.

Ask About the Cost

I know, this may feel uncomfortable. You may say, “but the doctor said I need this, if I ask how much it costs, does that mean I don’t care about my or my loved one’s health?” No! Look at it this way. If you ask how much it’s because you’re budget conscious. If you need multiple procedures or tests, wouldn’t you rather spend less so you can get ALL of the ones you need done instead of only a few because you’ve spent too much on the first ones?

If the person you’re talking to can’t tell you the cost, then ask to talk to the person who can. I’d even suggest getting it in writing.

Shop Around

Insurance providers sometimes provide a cost tool that tells you all the providers in the area that can do the procedure or test and how much it costs to go to them. Find a lower cost provider, check their ratings on various sites, and then go there if it checks out.

If you can’t get pricing information from your insurance provider, then do a search online for other providers and call them to see what they charge.

Ask Again

When you arrive for the appointment, be sure to ask again what they will be doing and how much it will cost. I know this sounds crazy, but the best time to make sure you get the best price is before they charge you for it. You may even need to do what you would do when negotiating a large purchase, and walk away. I know that seems extreme, but it’s incredibly difficult to get them to do anything after the procedure is done. They have all the power at that point, and absolutely no reason to negotiate it afterwards.

Conclusion

An informed consumer, is a dangerous consumer – dangerous for those selling the goods and services. Healthcare is no longer competitive because we tend to believe that “if it’s for my health, how can I say no?” However, it’s that kind of thinking that causes us to overpay and not question it, which allows healthcare systems to build bigger hospitals, fancier office buildings, while neglecting customer service.

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.