How things turn, from the lows in March to new heights, and the recent corrections. We can make guesses as to why these happen but if you ignored the noise and kept chipping in, you’d still be on the up.
That’s been our story since we pursued FI in 2016. We buy the market with a portion of every paycheck, irrespective of where it is. We place our faith in the US economy, and grind on.
We are firm on the few things we can control.
We don’t keep a budget, but track our expenses. Housing and daycare aside, our other expenses at ~$23K YTD would suggest we’re frugal. We are not. We do not deny ourselves for the sake of saving. But there aren’t many things one really needs once the basics are covered.
Though there are some things I think make no sense.
Like owing two cars IF/when one could do. My wife drives to work. I biked to the light rail station, then took the train to work (before covid). It’s environmentally friendly, and supports public transportation (which by the way we should all do).
We’ve owned a Honda fit since 2011. 90k miles and almost ten years on, she can easily drive us for ten more. The Fit is a practical car – pocket friendly, minimal, and has a surprisingly large cargo space. Almost everyone we know have two or more cars – usually a sedan and an SUV. That’s two times the payment, insurance and maintenance.
That said, I must confess that I’ve always wanted an SUV. And now that we have a daughter, I can also justify one. I can imagine driving my daughter to school and to all her activities in one. I can imagine family trips and cross country drives (starting with one to Canada). But I’m not sure I can part with $40K at the moment. Call it delayed gratification, but someday I will enjoy a higher vantage point.
The same goes for housing. I’ve always believed in living close to work, but don’t see why we have to anymore. With the option to work from home and with job security being less of a concern the closer one gets to FI, a move to a bit more openness for our daughter to run and play in is in our 3 year realm. We want a single family home in the suburbs when our daughter starts school. She’ll need her space, and we will as well.
One of my dreams is to have a small backyard office/space/retreat where I could read, watch games, write poor poetry, and contemplate.
The plan, once we’re FI, is keep our FI dollars at work, and take more fulfilling jobs to cover our expenses. The focus will shift to family and personal development.
Finally, after all that diversion, this is what did in quarter 3.
We refinanced, to 2.74% from 4.25%, to 20 years from 30 and our payment is a $100 less. We have decided not to make extra payments. Given the low rate, it makes more sense for our dollars to work elsewhere.
We maxed our 401Ks this quarter, and our Roth IRA last quarter. We’ll funnel our savings into our taxable non-retirement account for the rest of the year, splitting between VTSAX, VBTLX and cash.
Our allocation remains aggressive at about 84% stocks, invested in S&P 500 tracking index funds, primarily VTSAX. We hold small positions in VYM, VGT and VBTLX.
We have a healthy six month emergency fund parked in VMMXX. The yield is abysmal, and we could do better with a little research.
YTD, we trail the S&P 500 because our allocation includes our other positions – mainly our emergency fund. Take those out, and we’d be in line with the index.
On the non-financial side, we’ve hardly had any personal time since our daughter was born.
Between my wife and I, one of us is either working or taking care of our daughter at any given time. I look after her when my wife works – nights and weekends. My wife sees to her when she’s not working (and I am). We still need to send her to daycare for 2-3 days a week.
I miss the hours I used to have, when I read blogs, watched YouTube to learn and enhance my skills. I became a smarter and a better worker. My progress has plateaued this year given how little time I’m able to give to this aspect of my personal growth. It has been a source of some bother and I’ve decided to be ‘selfish’ to rectify this.
I’ve always given more than 40 hours to my work and set unreasonable expectations. I get paid for only the 40, and the extra hours have not resulted in more pay, just more work. As such, I’ve decided to give the extra hours I used to give my work to myself.
That said, I am grateful and happy to have a job I enjoy. I could be making more, but between my wife and I, we make enough to make FI possible in 5 to 10 years. And when that comes, I want to move on to more meaningful works.