Running to a pile of money

I read something the other day that really resonated with me. Partly because it's Christmas, partly because we've just stepped out of Thanksgiving and all the American's are talking about what they're thankful for and what rocks about their lives. Partly, but mostly, because someone asked me to sit down and write out my 6month, 1 year, 3 year and 5year goals and all I had was 'big pile of money, stop going to work'.

I had a target thing that I wanted, but I didn't have a reason why.

I came across a blog post by 1500 Days to Freedom that captured my existential dread in a nice short, snappy sentence "I was running away from a bad situation, but what was I running to? "

Mr 1500 quotes the 4 phases of Financial Independence as:
1. Normal life. Get a job, start a family, work till 65, retire, play golf.
2. Run to a big pile of money. Realise that plan A sucks. Attempt to acquire large amounts of assets so that work is no longer a requirement.
3. What am I running to? Realise that a big pile of money is great, but if you're just going to sit at home watching re-runs of Scrubs and scrolling Facebook, what is the point of a quitting work?
4. Figuring the rest out. Once you quit you job, how will you live your life in such a way that you’re happier, more content and fulfilled?

What am I running from?

Let's start with the easy part of this discussion, I'm running away from...

• Working 9-5, 5 days a week, for 50years
•  Answering to a boss for 8hours a day
• Wasting another 1.5 hours commuting each day

I'm not sold on this idea of trading time for money, 10 hours of each day of my life. Something like 40% of my time is sold to my employer for the foreseeable future.

In other words, keeping with the end-of-year theme, someone invited you to a New Years Eve party, but then said you need to spend the first half working behind the bar, no drinking, no flirting with the 'real' guests. By the time you're welcome to leave and join the party, everyone else is pretty wasted, and you're tired and crabby and just want to lay down. What a way to party!

Life is that New Years Eve party. If I'm spending the first forty or so years of my life working day in and day out, I'm not enjoying the party.

In this case, it's obvious that we're running from 'working the bar' to 'busting moves on the dance floor'! But life in general isn't that clear cut. At least I don't find it to be.

What makes us happy?

John Lennon is attributed with saying when he grew up he wanted to be happy. No careers, or big bold plans or labels, just 'happy'. That's great and all, but what defines happy? How do we become happy? What makes us happy? Lennon might be right in saying the point of life is to find happiness, but he was glossing over the point of the question. When they ask in school what you want to be, they don't mean "What label do you want applied?" they mean "What do you want to strive to become that will make you happy?". The happiness is implied in the question.

When I first saw the John Lennon quote, I felt pretty smug because I had always said I wanted to be happy. I never answered that question with 'Doctor' or 'Lawyer', I generally went with 'happy', or for a brief period when I was obsessed with dolphins I said 'Marine Biologist'. Looking back, I feel like saying I want to be 'happy' is like saying I want a million dollars, eternal joy, and never to get out of bed. It's vague, nonsensical and immeasurable. It's also lazy. I want happiness, I don't have a plan on how to get it, but if you could package it up and deliver to my door in 3-5 working days, that would be great.

What can I run to?

So my current existential dread is caused because I don't know what I'm running to. When I was younger I loved playing video games, I was really into dolphins and would print off pictures and make little books. I laid in the grass, loved reading books and I never remember a moment of boredom. Unless I was being polite and grown-up at family events *yawn*. As an adult I think I'm bored all of the time. In an attempt to get away from it I started saving and investing heavily so I wouldn't always have to go to work, so I would be free to do whatever I wanted.

The problem is, I have no idea what I want to do. Left alone with a pile of free time, I become lethargic. Everything seems like too much trouble. I have a few different projects half baked, half started and half finished, but after a four day weekend, I haven't touched any of them.

I was hoping to end this with a big positive revelation, but instead we have this rather troubling truth - I find myself running towards a big pile of money, with no idea what to do when I get there. I guess that puts me firmly in stage 3. I'm past running to the big pile of money expecting it to solve my problems (don't get me wrong, I still want the big pile of money) but I don't know what will solve my problems. Travel? Hobbies? Would I build the homestead I've always dreamed of?

I can play more games, and go out on more dates with Mr. FIRE, but I also thrive on being productive and achieving things. Could I retire to different work that I enjoy and would do for free? Go back to university and study things that don't relate to a career, but are just interesting? Or do something else entirely?

If your life wasn't limited and defined by the work that you do to put food on the table, and a roof over your head - what would you do with your time?

Lazy Christmas Update 2016

Time for the goals update, but it's also the day before the Christmas holidays kick off, so I'm feeling pretty lazy about writing things out.




Since 7 December
Spending
Home: $219.13 (My share of quarterly gas and electricity, plus new 2 LED light globes)
Mortgages: $1498.06 (Interest only)
Bills: $200 (Health insurance change over and phone bill)
Groceries: $187.87
Travel: $458.95 (Finally balanced out what Mr. FIRE and I spent on our Tassie trip)
Other: $30 on a friends b/day pressie, $108 on the dentist
Total: $2594.01, or  $1095.95w/out mortgages - Eep!!
Note: most of these expensive are sitting on a credit card, so are not deducted from the savings account until the 28th of the month.

Income
Salary: $2200 (bonus end of year payment)
Rent: $300
IP1 Rent: $69.50 (finished paying off the renovations)
Total: $2569.50

Offset Balance: $4800.78

Savings Balance: $4983.31

Total: $9784.09 (up $6,002.84)

Remaining: $10,215.91 - 190days

So those numbers all look a little weird, income of $2.5k but my savings are up $6k. There's no big mystery here. I bought some investment bonds a few years back, and the company has chosen to redeem them. Bonds (in this form anyway) are basically a loan to the company, and they make quarterly payments to you for the life of the bond/loan. They chose to redeem their bonds, which gave me back $5k plus the last quarterly interest payment. Over 3-4 years it's worked out to a 6.5%p/a return (I think, should double check those numbers!), so pretty chuffed with that.

That explains the money up, the expenses. I'm not thrilled. Actually I'm pretty shocked to put out that I've spent $1k in 2 weeks. Breaking it down for myself, of that 1k, 18% is quarterly bills, 20% is monthly bills, 26% is travel (my first holiday in years!) plus 10% of the dentist. So it probably looks more like this:

Bills
Gas and Electricity $180p/quarter = $30p/fortnight
Phone $60p/month = $30p/fornight
Health $85p/month ongoing = $42.50p/week
Dentist
Annual check-up, clean and xrays = $4.15p/fortnight

So break those big ones down to fornightly amounts, the average spend is probably not so unpleasant, more like $700 in a fortnight. $450 of that is travel, so we're looking at $250 in a fortnight.

Except I know it doesn't work that way, and I'm just trying to justify an expensive fortnight.

With all my current figures I'm expecting to beat my goal by $400 - but that's not including any day-to-day spending. That's calculating known costs of bills, but not groceries, drinks with friends, etc. So in reality the current projection is that we're not going to make it. I could cut my monthly investments ($500) but I'm not willing to do that. Which means finding some more income. Somewhere...

Progress Report - the first

First update! I've landed on fortnightly for updates, because then it matches nicely with payday.

It's worth noting that I pay everything on a credit card where I can. Because I travel a lot for sports, so rather than paying for flights I can just use rewards points. And because I work for a Big4 bank I'm not paying the fees on the credit card. Winner winner, free flights! That said I've only been using credit cards since February-ish, and while my spending habits haven't changed, watching that number tick up for what I owe on the card is nerve-wracking.

The starting point (December 2016)

Okay, so I'm going to take a bit of a dive into transparency. I'm a little uncomfortable with telling the world about the numbers, but I also want to set myself some accountability.

Fire by Thirty Five means what now..?

Financially Independent and Retire Early by Thirty-Five. Sounds impossible or really simple, depending on your approach.<br />

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Here's the plan:&nbsp;<b>$50,000 passive income by 10 February 2026 drawn from a combination of Shares, Peer-To-Peer Lending and Investment Property.</b><br />

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In a slightly more detailed way:<br />

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<ul>

<li>Vanguard shares consisting of Aus Shares, Aus Bonds, International Shares and Aus Property</li>

<li>'Playground' shares, money put into trying to pick stocks. Less than 10% of total Vanguard portfolio</li>

<li>Peer-to-Peer (p2p) Lending. I love <a href="https://www.ratesetter.com.au/">Ratesetter</a>&nbsp;for a high return, set and forget investment. In the interest of not putting too many eggs in a basket, I want to cap this at 20% of the Vanguard portfolio (it's currently more like 30%)</li>

<li>Investment Property! Oh goody goody, so exciting, here's the strategy</li>

<ul>

<li>Rentals: I want some for cashflow</li>

<li>Sub-division: For a (not so) quick way to make (a big headache of project management) capital growth.</li>

<li>Rent-vesting: I'm strongly considering moving out of the nice little home I bought 3 years ago, renting another one of similar price and quality so I can claim my little home as a Tax Deduction.</li>

</ul>

</ul>

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So where are we starting from? $1,800p/a safe withdrawal from shares and P2P lending, $15000 p/a from rental income (completely ignoring expenses)</div>

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Current Passive Income before expenses: $16,800</div>

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Current investment expenses: $15,000 p/a</div>

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Net passive income: $1,800</div>

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<b>Left to goal: $48,200 p/a</b></div>

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Wish me luck yo! Hopefully I'll update this blog once every week or two for my own accountability.</div>

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