Congratulations! You’re Pre-Approved!


Dear Current Resident Reader,

Congratulations! After careful consideration you have been pre-approved for investing for your retirement! With a long-term interest rate of 7%* and low monthly payments of just $499**  you can buy a secure retirement!

We know how hard you’ve been working, so we are especially excited to extend this exclusive offer to you.  Like all of the finer things in life, you deserve it! Usually we reserve this pre-approval for our top customers, so make sure to respond quickly to take full advantage of this limited time offer.

Imagine the looks from your friends and neighbors when you cruise into your later years with the knowledge that you will always have enough money to live comfortably.

And because a stranger is telling you that you can afford it, you obviously must be able to!  What’s one more monthly payment? Just think of the leisure and relaxation that can be had knowing your finances are well in hand.

That financially-secure-forever smell can be yours for just $499** a month so make sure you take advantage of this offer starting today!

Remember, this offer wont be around forever, so act soon!  And another hearty congratulations on your pre-approval!

*Actual interest rates may vary.

**Actual monthly payments depend on your age and expected retirement date.

The Hoard: September 2015

The Dragon's Hoard

Every good dragon has a hoard.  You know.  The collection of gold, jewels, and other valuables that the dragon guards in his or her cave.  For me, The Hoard is what I call my assets.  The collection of stocks, bonds, and other income producing assets that Mrs. Dragon and I have collected thus far.

Mythological fire breathers have to protect their hoard from knights seeking glory, wizards wanting power, etc.  Real-world FIRE breathers have more mundane, but very real dangers to their own hoards: the tax man, the cable company, lifestyle inflation, high-fee brokers, and many more.

This is one post in a series that documents my progress towards financial independence.

You might recall that I don’t include our primary residence in the assets (it doesn’t produce income) and I don’t include our primary mortgage against the assets.  If we had a rental house, I would include it in both parts of the equation, but I’ll address the primary residence in a separate category.

I do not differentiate between tax-advantaged accounts and taxable ones in the number for The Hoard.  Assets are assets.

We use the excellent (and free!) service Personal Capital to keep track of how The Hoard is coming along.  It lets you view all your accounts on a single homepage for a convenient snapshot of your financial life.  It is a top-notch service.  Highly recommended.

Mrs. Dragon and I want $600,000 in liquid assets and a paid-off house to consider ourselves financially independent.

How are we currently doing?

The current market value of the hoard is $95,372 (vs last month’s $92,608).  This is about 15.9% of our $600,000 goal.

Primary residence: The mortgage is $96,708  (vs last month’s $96,968), which means it’s about 1.32% paid off.

After the past few months of supercharged gains, the progress this month is a little underwhelming.  However, it’s a game of inches and we did at least move a few inches in the right direction this month.

Also, the S&P 500 is down about 8% since the last time I wrote an update on The Hoard.  The only reason our number is up is because we added more than the market dropped.

We are still firmly in the accumulation phase of our lives (meaning we are still investing regularly), so I actually wouldn’t mind it if the market trended a little further downward as the year ends. Gotta love a good sale!

Despite what the media would have you believe, buying stocks for less money isn’t bad for you.  When the price of stocks goes down, your monthly contributions buy more shares. More shares for the same amount of money?  Yes and please!

It turns out that since Mrs. Dragon and I have been at our jobs for a year now, we vested in our retirement accounts at work in August, which was great timing since the ~$8000 between the two accounts switched from a money market fund to stocks in August.

We continue to invest heavily instead of aggressively paying down the mortgage and I expect that will continue for at least another six months.

The only reason we would change that strategy right now is if something with our tax situation changes.  Right now we are just saving too much money not to put the cash in retirement accounts.  Gotta keep Uncle Sam’s mitts off our dough!

How was August for you? Did you pick up shares on the dip, or sell it all and buy gold?



A Game of Inches

FootballI recently read this post over at Dream Beyond Debt and it really resonated with something I’ve been thinking a lot about recently.  So, since it’s the opening weekend of NFL football, I thought I’d write a post about it.

Personal finance, like football, is a game of inches.

Small achievements can really make a big difference.  You never know when making a small adjustment will lead to progress, which in turn leads to more progress.  Going with the football analogy, have you ever seen a running back pick up a few inches which gives their team a first down, and then the next play is a 50 yard touchdown pass?  That touchdown never would have happened without the few inches picked up on the previous play.

As an anecdote, this idea is exactly how I quit smoking cigarettes nine years ago.  I started cutting back to a pack a day (yes, I was smoking too much), then it was 15 cigarettes a day (there are 20 in a pack), then 10, then 5, then only after meals.   After about three months I was only smoking when I was drinking.  And believe me when I tell you that it was damn hard to stop that.

What ended up getting me to quit was exercise.  I started working out.  After working so hard in the gym, I didn’t want to “undo” all my good work by smoking.

The point of this little story is you never know what small positive change is going to permanently affect your life for the better.  I didn’t start exercising because I thought it would help me quit smoking.  That was just a happy side effect.  And when I got lazy about six months later and stopped working out, I didn’t start smoking again.

A game of inchesIn personal finance, maybe you decide to shop around for new car insurance, which saves you $30 a month.  After a couple months, feeling good about that step, you decide to downgrade your internet/cable package which saves you another $80 a month.  At the end of the year, maybe you’ve saved $1000.

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Expenses: August 2015

ExpensesExpense report!  Since I’m a total voyeur for finance, these types of details are exactly the kind that I love to read on other people’s blogs.

Don’t get me wrong though, these numbers are primarily written for me and Mrs. Dragon.  Every good FIRE breather knows that to be successful, you have to track your expenses. You have to track them like Roland tracks the Dark Tower*.

How else will you know when your Hoard is big enough?

Without further ado, here are the numbers for August (rounded to the nearest dollar):

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Financial Details of Our Belize Trip

Ball court Lamanai

The last post gave the activity details of our vacation to Belize.  This post will give the financial details of the trip.

Obviously, a 24 day vacation costs money, but I think we did a pretty good job of scoring some frugal wins on this trip. I should also say that we didn’t plan this trip as a super frugal vacation.  We just wanted to have an international adventure together and tried to save some cash in ways that wouldn’t lessen our experience.

We decided that our budget for the trip was $3,000 all-inclusive, no questions asked.  So, without burying the lead too much, here are the numbers for all 25 days of travel (24 of which were in Belize):

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