We Bought a House

House

Mrs. Dragon and I are officially home owners!  As I mentioned in previous posts, we were in the process of buying a house, and we closed earlier this month.   To be clear, I am not someone who thinks that everyone should own their own home.  In lots of cases, it may make more sense to rent.

However, we knew we were going to purchase a home in our new city (we moved here last summer for jobs).  It was only a matter of when.

Neither of us have ever owned a home before, so we’ve never taken out a mortgage before.  In case you haven’t heard, it’s a huge pain in the ass.  In theory it’s a relatively simple thing.  You want to buy a house, the bank gives you the money, and you use the property as collateral on the loan.

In practice, however, it is a well-oiled machine of cluster-fuckery.  There were all sorts of last minute snags that were totally avoidable.

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Lifestyle Inflation: A Two-Headed Monster

Two-headed monsterAh, lifestyle inflation.  This is a topic that’s been well-covered by financial bloggers everywhere, and for good reason.  Lifestyle inflation is probably the number one reason that people fail to save money.

People tell themselves, “I’ll earn more money later in my career, so I’ll just save then,” while simultaneously thinking “I make decent money now, so I can afford to upgrade my car/house/wardrobe/whatever-the-hell-kids-are-buying-these-days.”

In a nutshell, lifestyle inflation is what makes you stop eating ramen and start eating more steak.  It’s what makes you stop shopping at the thrift store, and start shopping at the mall, then your personal tailor.

There are all sorts of shitty excuses for this.  The most common is probably the fallacy of feeling like you “deserve” something.

I worked extra hard this week, so I deserve to eat out tonight.

I just got a lot of exercise, so I deserve to treat myself to this outfit.

I’ve been a good dragon all week, so I deserve to burninate those peasants.

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Expenses: February 2015

ExpensesHere’s the first post that lays our expenses bare!  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 a ranger tracks a hobbit.  How else will you know when your Hoard is big enough for you to retire?

We haven’t been great at keeping track of our exact expenses for the past year, but these posts will (hopefully) help keep us accountable.

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

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A Beginner’s Thoughts on Travel Hacking

Cabin

Mrs. Dragon and I are currently in the process of buying a house (woot!).  As such, I’m not going to be doing any credit card churning until the mortgage clears.  But after the dust settles on the mortgage, I’m thinking about trying my hand at travel hacking.  Specifically, credit-card churning.

I’m an adventurer at heart.  Mrs. Dragon is a little more reluctant sometimes, but we both love to travel.  So if I can figure out a way to make travel hacking work for us, that would be a HUGE win for a frugal pair like us.

For the uninitiated, I’m talking about signing up for a bunch of credit cards, getting the sign-up bonuses (airline miles mostly), and then cancelling the cards after the first year.  A few comments:

  • UNDER NO CIRCUMSTANCES SHOULD YOU EVEN CONSIDER THIS IF YOU HAVE CARRIED A BALANCE ON A CREDIT CARD AT ANY POINT IN THE PAST YEAR!
  • Maybe just read that first one again.
  • In general, you need excellent credit to make this work.

Sorry I had to yell at you, but the all caps above really cannot be overstated.  I know it’s tempting, but just don’t do it if you don’t already have a firmly established healthy relationship with credit cards.

Just to be clear, I have never “churned” any credit cards before.  I’ve thought off-and-on about trying it for a while, but I always end up deciding that since Mrs. Dragon and I are pretty frugal, there is no way we would be able to meet the minimum spend limits to get the bonuses.  Oh, didn’t I mention?  You have to spend a shit-ton of money (in most cases) on these newly opened cards in order to get the sign-up bonuses.

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The Hoard

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.  Before we get to the nitty-gritty, let me describe how I calculate the number you’ll see below.

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Why Do You Want It?

Hello world!  Lol.  This is a blog about financial independence and retiring early (FIRE).  If you are seeking FIRE it’s extremely important to ask yourself why you want it.  Of course, who wouldn’t want it?!!  For anyone who’s new to the scene, financial independence means that you have enough money to never work again.  Essentially, your assets generate enough money that your expenses will always be covered.  Forever.

I talk about my background in the About page for all the voyeurs out there (my people!), but also because it helps explain my motivation for seeking financial freedom: security.

Through some conversations with my wife (affectionately dubbed Mrs. Dragon), I’ve discovered that security is my primary motivation for seeking financial independence.  If you aren’t motivated, it’s really hard to stay the course.  You have to want it.  Really want it.  Because it takes a lot of sacrifice to amass a hoard of assets big enough to support you forever.

Of course, once you’re down the rabbit-hole, you realize that many of those “sacrifices” aren’t really sacrifices after all.

Whether you’ve been thinking about retiring early for years, or this post is the first you’ve ever read on the subject, answering the question “Why?” is really important.  Have a boss or job you hate?  Crave financial security?  Want the freedom to live/travel wherever without worrying about the money?  These are some of the questions you might consider asking yourself.

After you know you want it, and you know WHY you want it, you can get down to brass tacks about how to get there.

Why do you want it?  Tell us in the comments.