Over All Checkup

[rayray]

Alright, I drive myself and I'm sure some people around me nuts too. When I get rolling a little OCD takes hold until the goals are accomplished.

I've been trying to cut costs and save more, trying to instill some restrictive covenant ideas with the wife, so that I may possibly leave my current job and do something else. Something that I want to do rather then something I have to do. I'm not going to lie, if I don't take the bull by the horns I will never ever be able to retire, my wife will not be able to retire and that's why I'm constantly monitoring our plan and look for ways to improve it. My wife trusts me 100% and I trust myself about 75%; although, I trust myself 100% over an outsider managing our investments. I've seen too many things go wrong with others, co-workers, friends, friends of friends and, unfortunately, even family members using "Financial Professionals." Unless it's a "Fee Only" CFP I will not be using one in life. What I'm saying is that sometime in life I will be meeting a Fee Only CFP, when the time is right. And yes, I have done some research on the ones available in my area but I have other things to get in order before I go that route.


The biggest long term cost cutting at the moment is going through a Refi on our mortgage, dropping to 3.37% from 4.62% will put about $250 a month in our pockets. This process is not complete, just started actually.

Going from Sprint to ProjectFi for cellular service (end of October 2016) will put about $50 a month in my pocket. Yea, my pocket, because the wife will not LEAVE Verizon! I joke with her that in another 5 years NOBODY will be able to get a hold of me, lol. I'm really excited about trying this service, it's a different take on wireless service. It uses a combination of three wireless carrier partners and WiFi. I'll miss loosing the Apple iPhone and going to a Nexus (Android) but $50 bucks a month is $50 bucks a month. Sorry Apple.

So, that's about $300 per month in savings. That's almost $3600 per year put to work. I say almost, because I don't know the actual numbers but it's close and that's what matters.

Two moves I made on the investment arena is cash and moving funds. I have 25% in cash while the rest is in the market. I'm not stopping investing or even waiting on the sidelines. We all know we are in one of the greatest Bull runs in history. And what does history tell us? All good things come to an end, it's inevitable, this Bull market will end. Who knows, maybe I'm early on this but that's why I will not just sit on the sidelines, but having the cash makes me feel more confident and secure in my decision making. I've gone through two big market down turns and both times I WISHED I had cash available, this time I will have the cash.

The other is moving all of my accounts to Fidelity (I'm doing this Monday). I love Vanguard and it's been a great 18 year run but Fidelity, as an individual investor focusing on DGI, has better tools. It will also be beneficial having my 401K, Traditional IRA (established by a recent non-taxable in-service transfer), ROTH IRA and the brokerage account under one umbrella.




That's about it for now...

Any of you guys cost cutting or making moves?

[Jimbo]

Good for you on the cost cutting, We have made several small changes.

As for now our priority is to get the mortgage paid off or very close to it so for the last 6 years we have been dumping almost all monies in the mortgage, we have 10.5 years left.
Even just paying your mortgage early or more often (when money is avail) is quite beneficial as I see it.

I would love to be dumping more money into my stock accounts, but I have maxxed out the 401K and do manage to put some cash into our joint account. Slowly watching the ROTH, IRA, and the 2 personal accounts grow.

As we move forward (and closer to retirement hopefully one day) we will start looking into more cost cutting measures but yet not cutting the quality of life.

Good luck to you.

Jimbo

[Rasec]

It's a good topic! I keep thinking about some of the things you've raised... 

I'm still relatively young (mid thirties) and I've never gone through the pain of a massive recession, crash or bear market. I was too young during the dotcom era but I was employed when 2008 hit and saw many friends lose their jobs or unable to find one, but I went through it without much harm myself. Maybe because I've never gone through one or maybe because of my age I'm not really afraid of a situation like this coming anytime soon. I keep putting money in the market because I believe time in the market trumps timing the market. I also believe it's a market of stocks and there are still opportunities out there even at this high of a SP500 P/E. (thanks for these learnings DGI Forum).

I keep my security money on the side (covering 9-12 months of expenses) and a Plan B in case the worst happens (includes moving back to my home country where the house is paid for and no debt while I can search for another job). I believe I'm prepared to what life may throw at me (eg. losing my job or a long period of illness) but you never know what can happen... But can you prepare for every eventuality? 

I could live a more wealthier style of life but I've decided not to and I prefer to invest the money my colleagues spend in new cars or almost weekly vacations (surf or snowboarding trips). I'm still a fairly big spender and some expenses almost make me dizzy when I think of them (for example, we pay ~$1000 a month for childcare when my son could go to another preschool where the wife works, for free, but my wife doesn't want him in the same school as her... makes me sick to think what I could do with $12k a year at 10%... I track all my expenses and we're averaging ~$7k a month in expenses, I know with some discipline we could easily live under $5k a month (this includes everything we've spent money on this year, from summer vacations to clothing). Example, do I really need Amazon Prime + Netflix + Youtube Red + Cable?   ( I know I don't but i keep making up excuses for all of them). 


In the meantime, let me praise Merrill Lynch, 100 free trades a month (if you keep a certain balance with them, includes money in BAC as well) is amazing. True it's not the best platform out there, but saving $6 or $7 per trade gives you the ability to buy smaller batches of stocks without having to worry, it's just amazing!

[rayray]

Well, you can always download "kodi" on the Amazon Fire Stick and get all that stuff for free. Sometimes it's a pain but it is an option. We still have cable; however, all that other stuff is gone, we'll probably go to basic cable once the wife learns and feels comfortable using the fire stick.

[DividendGarden]

(07-24-2016, 10:45 AM)rayray Wrote: Unless it's a "Fee Only" CFP I will not be using one in life. 

Amen to that.

[crimsonghost747]

This is a great topic. I'll throw in my two cents on my situation. While I guess this topic is more for us writing down own our thoughts, I wouldn't mind some of you guys chipping in with your opinions.

So I've been without any income for pretty much a year. I've still managed to reinvest most of my dividends, though some have been used for expenses. All this comes from having pretty much no expenses at all right now. Of course not having enough funds has put a serious dent into the amount of cash that I've been able to deposit, however surprisingly enough I'm still almost on track to meet my 2016 goals in terms of $$$ on my investment accounts. I don't think I'll hit the most important, dividends earned, goal but that's life. Ohh and I need to put a bit of cash into my reserve/house fund since I had to dig in there for a couple grand during the spring.

Now I've got a new job now, starting in September. Good money but quite frankly it's just a 4 month deal for now, though there is quite a large chance of me keeping that job at least 1 year. So things are looking good, and I'd say I'll be looking at quite a significant amount of "extra" money since my expenses are minimal. But that, along with the current high prices in the market, make me wonder how I should use that money?

Topping up the reserve account up to where course be first priority. But after that? Obviously I'll be investing some of that money into the market but a part of me feels like maybe putting part of it into the reserve account would be a good idea. To be fair, that reserve account serves 3 purposes. Being there as a backup in case the shit hits the fan, being used as a downpayment for the future house/apartment (within the next few years), being a cash reserve to be used for investments if the market takes a big dip. But money in the reserve account is of course not generating anything there and I'm already a bit behind my schedule in investment goals... so it kinda feels like I need to catch up now that I have the capability to do so, especially since this job is not permanent by any means.

So I've got a few decisions to make as to how I need to continue financially.

[Caversham]

I still continue to save 2/3 of my income every month and still enjoy a happy lifestyle.  Even with this saving rate, I've only made 2 purchases since March.

Part of not purchasing much is due to unforeseen expenses.  I tore some ligaments in my knee playing soccer in April and had surgery in May.  The surgery, MRI, doctors, physical therapy, etc cost $2k, so that put a dent in my savings/investing rate.  I'm glad I had good insurance through work, otherwise it would have been $12k.

Part of not purchasing much is due to current market valuations.  I haven't sold any positions, but it is really hard to find even fairly valued companies in today's market. My cash reserves are starting to pile up.

While I haven't done much buying, I'm still actively engaged in the markets.  I have primarily been improving my financial literacy by studying financial statements, etc.

[Roadmap2Retire]

(07-24-2016, 10:45 AM)rayray Wrote: Two moves I made on the investment arena is cash and moving funds. I have 25% in cash while the rest is in the market. I'm not stopping investing or even waiting on the sidelines. We all know we are in one of the greatest Bull runs in history. And what does history tell us? All good things come to an end, it's inevitable, this Bull market will end. Who knows, maybe I'm early on this but that's why I will not just sit on the sidelines, but having the cash makes me feel more confident and secure in my decision making. I've gone through two big market down turns and both times I WISHED I had cash available, this time I will have the cash.

Same here, rayray. I have decided to move part of my portfolio to cash over the last month or two. This market does not give me any confidence to stay invested and I broke the one rule that DGIs advise against -- sell to book profits. I am sitting on approx 35% cash myself...even if this market continues on its last legs for another year or two, I dont mind sitting it out.

[crimsonghost747]

(07-26-2016, 07:34 AM)Caversham Wrote: Part of not purchasing much is due to unforeseen expenses.  I tore some ligaments in my knee playing soccer in April and had surgery in May.  The surgery, MRI, doctors, physical therapy, etc cost $2k, so that put a dent in my savings/investing rate.  I'm glad I had good insurance through work, otherwise it would have been $12k.

Ouchie. I broke a lot of stuff from my ankle end of last year, I feel your pain. Took me almost 3 months to be able to walk normally again, and usually the knee is even worse. There are few things that are worse than losing the ability to move around. If I break an arm I can still do probably around 90% of my routines... but when you can't walk without crutches then you are doomed. I hope you're recovery is going well.

With regards to the costs, this is one of those reasons why I always tell people to have that backup account that has enough to cover the expenses for at least a couple of months. We simply never know what life has in store for us.