Life Update – FI Number

It’s July 2017.

In May 2017, I was promoted and moved to a new team. More money, more stress.

Remember how I said we were thinking about buying a house? Scratch that. The last couple months have made me realize I can’t keep doing this until I’m 65. And my husband has wanted to retire since forever ago. The whole climbing the corporate ladder is also not looking enticing at all.

In a moment of desperation, I sat down, opened an excel sheet, and started figuring out how much money we needed to get to FI.

Yes, after saying that I didn’t want to figure out a number because I have to worry about my parents, I still calculated it.

We spend about $40K a year. I want to add another $10K of buffer, just in case. If I multiply $50K x 33 = $1,650,000.

I would like to have additional buffer, so I’m aiming for us to hit $2,000,000 on the safe side. I estimated we can get to $2M in 15 years.

And that’s how I came up with a number to get to FI. 15 years seems like a long time…But I’m hoping the more money we start front loading, the more money will snowball (compound interest) and we will get there sooner, rather than later.

What Keeps Me Up At Night

I’m super busy. Work, gym, home, sleep. These days are all blurring together. Pardon any grammar mistakes, I wrote the following post very quickly. 

I don’t know what it is about this week, but it’s been quite challenging to focus on work. I just want to be doing something else completely different. My husband just started a new job and he feels the same way. He is a lot more vocal about it.

I tend to just grind it out and just power through it. But there are moments, many, many moments where I wonder how much longer? I really try not to think about it because personally I don’t think I’ll ever retire. Why?

Am I pessimist? Yes. But there is another reason that keeps me up at night. The reason? My parents.

While some people worry about health insurance and maintaining it in financial independence, I don’t particularly worry about it. I spent 20+ years until I got my first corporate job uninsured. My family was/is still uninsured. What worries me is how do I account for my parents.

I think most people my age and in my socio economic circle have well-off parents. They don’t worry about taking care of their parents financially in the near future. I even listened to a podcast talking about whether people had their parents in mind when calculating FI dates. Most said no. Maybe because most of the personal finance space is predominantly (nothing against it) Anglo –American. But when you come from a Hispanic family, it’s different. It’s hard to explain. Believe me I’ve tried with my husband (who is not Hispanic). We are taught at a very early age parents come first, and as kids, we must take care of them in old age. When you come from a poor family, well your parents don’t really have access to a 401K, and don’t even make enough money to put any money in retirement accounts.

So my parents will depend on my brother and I. It’s a situation that is constantly at the front of my mind. How to prepare? My parents are pretty frugal, so I know they don’t spend money nilly willy. They have a house in Mexico. It needs work. But with a $10K investment, it could turn into a real gem. However, I don’t think they want to live there full-time. They like the U.S. more. My parents have their little house in the US, but honestly, I want them to live in a better house. Not a bigger house…although it would be nice to have one more room…but mostly a nicer house.

Financially taking care of my parents full-time scares me a lot. So on top of having to worry about our retirement, I have to worry about my parents! Yikes! Super scary. Thus, my hesitation to even put a $ figure to what I consider financial independence. 

The takeaway? The situation causes a lot of anxiety. A lot.

Is anybody else tackling this scenario? What’s your take on taking care of parents? Are you anxious? 

The Benefits of No Commute

When we relocated for my job this summer, we had to find a new place to live pretty quickly.Having only been in the city for twenty four hours during my final interview, the search for a place was a bit overwhelming. Since we were packing up our house, saying our goodbyes, dealing with family, and work, we had no time to go and search for a new place. Most people would be scared. Most people would choose to rent a hotel, or find another temporary assignment. But I’m not most people. 

It took me about a week to find our apartment. I asked for recommendations from several people. These people included the company’s recruiter and hiring human resources manager. We, also, lucked out when a family member recommended we get in touch with their friend in the area. We received some tips as to what neighborhoods were safe.

Then, the search began in the targeted neighborhoods. I had a budget. Our budget for housing was no more than $1,000. Ideally, we would get a 2 bedroom apartment or house.

I ended up finding an 2 bed, 1.5 bath for $965 per month. Under budget and within five minutes to work. So now, unto the benefits of no commute.

1.       More time in your day. I took part of my day back. Granted I still work long hours, but at least I can squeeze in some gym time without getting home super late.

2.       Minimize gas expenses. I fill up my gas tank max once a month. I walk to work every day and use my car to run errands.

3.       Less Miles. Since I’m driving less, my car will last longer. I have a 2007 Honda Civic, 2 door with 93,000 miles. Since Hondas are highly dependable cars, my car should last for many more years. Hopefully, well into my 30s.

 On a final note, we really like living in our neighborhood. It’s very walkable. There are many restaurants, bars, and a farmer’s market on the weekend. We do live in the city, so have to go to the suburbs to get more affordable groceries. 

Planned 2017 Budget

Here is the planned budget (expenses) for 2017.

Screen Shot 2017-02-07 at 7.23.45 PM

A couple of key points:

          The T-Mobile bill is for 5 people. I pay for my parents’ and my brother’s cellphone bill. My brother reimburses me $32 every month to pay for his portion of the bill and his Iphone. I’m definitely giving him a great deal since he is in college. So really, the bill is $144 ($36 per person). I miss not paying for cellphones (we used to have work cellphones). While I’ve looked at other options, T-Mobile’s plan is the best because we all have Iphones. My parents find Iphones easy to use and we prefer Iphones. T-Mobile’s free international calling and roaming is a huge plus. My mom spends time in Mexico and she can now be reached whenever and she can also communicate freely. Plus she calls Mexico a lot when she is in the US.

           Food is budgeted for $515. We usually go over on this category. Actually, every single month. I should probably give up and raise it to $600. That’s a more realistic number to shoot for every month. Will review next month…

          I don’t have travel or health &medical budgeted for in the budget. It’s zero now. We have a savings account where we put travel money every month, so when we spend money for travel, the money comes out of that savings account. This fund came in useful when I had to fly for my grandmother’s funeral in early January. I had to book an international flight same day. It was very expensive, but I’m glad I went. Health & medical will usually include prescriptions, medical appointments. We usually average $700 with contacts, glasses, dentists, prescritions, etc. It’s hard to budget on a monthly basis though. Expenses come at different times of the year.

          Did you notice there is no gym membership? I use my work gym (win!). I’ve actually never paid for a gym membership. My husband hasn’t signed up for one. I’m hoping when he lands he has access to a gym for free. A girl can dream.

          Shopping is for any shopping that’s not related to groceries. Clothes, video games, etc.

          Auto Insurance – We own 2007 Honda Civic and a 2008 Mitsibushi Lancer. The cost is split up and sent to a separate savings account since the payment is semiannual. This is for full coverage. Need to review in 6 months whether it would save us more money to drop full coverage and switch to liability only. Our deductible is already at $1,000.

          I try to make sure out actual spending stays within our budget. Sometimes it works, sometimes it doesn’t.

Monthly budget is set at $2,426. Let’s say we come in usually around $2,500. I think that’s pretty good. We could cut food, but it’s really hard. We like food. I think an easy win would be to relook at our insurance premium when it renews in 6 months. 

Home Ownership Emotional Side

I have a weird emotional connection to home ownership.

Maybe it’s the immigrant attachment to owning hard valuables you can touch or fulfilling the American dream? The truth it is I keep running the numbers behind whether we buy a home in the new city or keep renting. I know renting provides flexibility to move wherever, whenever. But owning a home in Texas didn’t stop us from picking up and moving last year. We bought a house where the numbers made sense and we are now renting it. We have 3 years to figure out what to do with the home, although we are leaning towards keeping the house forever.

 This is all me and my random thoughts….

 So, now I want to buy another house. My husband looks at me goofily; he is not sure whether he wants to buy another property right now. He thinks the market is too high, but market timing is so iffy. So, I’ve been running the numbers and thinking about why buy a house. NY Times Rent vs Buy calculator is pretty useful. From my perspective, I feel like buying a house would keep me motivated. I need a carrot to keep running on the treadmill. Financial independence should be the carrot that keeps me on the treadmill? Yes and no. Yes, it keeps me motivated long term (in the decades horizon), but not necessarily in the near term (5 – 7 year horizon).

Our apartment is nice, no maintenance, and yet…I want to own 20% of my walls around me (the bank owns the rest until the house is paid off). In order, to run the numbers, I have been trying to get a gauge for the real estate and what we can get.

Criteria 1: Stay within walking distance to work. Save gas, miles on car, and time. Which means city living.

Criteria 2: 2 Bath, 2 Bed Min.

Criteria 4: Single family home.

 Criteria 5: No big updates to do, no carpet, energy efficiency windows, furnace/HVAC fairly new, good location, single lot (no townhome), place to park the cars. Gosh, our tastes sure have gone up.

So looking at $250K price tag for 1500 square feet, 2 bed,2 bath, carport. Whoppers. It’s going to be hard to pull off a 15 year mortgage. Actually it’s going to be more beneficial to get a 30 year mortgage. I never thought I would say that. By the way right now, our monthly rent is $965 for a two bedroom apartment, 890 square foot apartment.

So yeah, the only hesitation is the amount of debt we will have to take on. So glad we don’t live in California or Portland. But if it’s within walking distance, I could take 50% of what I have budgeted for gas and allocate to the home budget. Oh if we stay within walking distance to my work (which we are right now), my car will last longer, potentially delaying my car needing to be replaced until my 30s. Do you see me playing with numbers? Trying to figure out what I could reduce in the budget to make the numbers work.

Let me tell you we have kept our budget pretty consistent ever since we graduated from school. So, I’m trying to NOT increase the budget. This way we can still travel, have money for unexpected items, etc.

 Sometimes I want to be like YOLO…especially when you heart wants something and your brain is skeptical. 

 Open for comments, questions, telling me I should stop being emotional, continue look at numbers.

Focusing on my health in 2017

Every year I make a goal to focus on my health. Every year I have mixed results. Why mixed? Well, I’m healthy. Nothing majorly wrong with me. All my levels are in green status.  But I know I’m not at the top of my health performance. Why do I say this? I’m always complaining I’m tired. Actually this is the main challenge in my life – combating exhaustion.  I’m only 26.

Here is a breakdown of my day without the gym:

  • 6 am. 1st Alarm rings. I’m usually awake by now just don’t want to get up.
  • 6:30 am – Get up, shower, get ready
  • 7 am – Walking into office, start the work day
  • 11:30-12:30 – At some point eat lunch
  • 5:30-630 pm – Leave office
  • 7 -10 pm – Home time (dinner, spouse time, chores, relax etc.)
  • 10 pm – In bed, sleep time

Incorporating gym time – which I need. I used to workout 3-5 times a week after work. When I changed jobs this fell off the map. 2017, the new, old routine begins again. So the schedule looks like this

  • 6 am. 1st Alarm rings. I’m usually awake by now just don’t want to get up.
  • 6:30 am – Get up, shower, get ready
  • 7 am – Walking into office, start the work day
  • 11:30-12:30 – At some point eat lunch
  • 5:30-630 pm – Leave office. It’s rare when I leave before 530. On average I’m walking out at 6 pm. But if I want to fit in gym time, I need to leave at 530.
  • Head to gym
  • 7 -10 pm – Home time (dinner, spouse, chores, etc.)
  • 10 pm – In bed, sleep time

Notice I don’t have a commute in there because we live five minutes from my office. Going back to no commute is awesome. I don’t want to drive to work ever again if I can help it. As you can see I get my sleep in (approximately 6-7 hours of sleep). I can’t really change my work schedule at this point in my career. So I need to focus on my health. Health is very important because diabetes (Type 2) and heart attacks are very common in my familial history.  Also, I have dietary restrictions. Read next paragraph.

My kidneys don’t process things very well. I don’t drink caffeinated products. Actually the only liquid I drink is water, with the occasional hot chocolate. A few times a year, I splurge and drink juice. I don’t drink alcohol at all. A couple years ago I let my urologist know I felt extreme fatigue. Fatigue is another level from exhaustion. I would come home sometimes and just pass out. After talking about my health and fitness, we figured out it had to be due to diet. After changing up my diet, mostly refraining from red meat and eating less protein, I started to feel better. Still exhausted but not fatigued.  I can only eat 5-6 ounces of protein (animal + non-animal) and need to stay away from red meat. I also have restrictions on a long list of vegetables, other items that I need to eat in moderation due to certain nutrients that make my kidneys work harder. Chocolate is actually one of the items (sucks). I need to have a low fat, low sodium diet too.

So with all that being said. My big problem is I rely on a high amount of carbs for food. Which is bad (see I don’t want to get diabetes). I think it helps I don’t drink soda. I need to incorporate more vegetables and fruits to my diet. And start the 3-5 times a week exercise routine again. 

My goal over the next few months is to feel healthier and energized. I think it has to do a lot with what I put into my body and my level of activity. So here it goes 2017!

Goals Recap 2016

Another year bites the dust. 2016 was a year of change. Halfway through the year we packed up our belongings and moved cross country to the Midwest. I have been at my job for 6 months and my husband is in transition. My husband is taking more time off than expected (extended vacation), but spending has remained in check. It helps we are low spenders in general. Here is a recap of 2016’s goals.

1.       401K – Complete

2.       Hubby’s IRA – Complete.

3.       My IRA – Complete

4.       Invest in brokerage account – Not Complete

5.       Increase Liquid Cash – Working on it.

6.       Continue ESPP contribution – No longer relevant since I switched jobs.

In 2016 I decided to simplify my goal list and focus on financial goals. It’s probably a good thing because my exercise regime has fallen off the map due to the new job and my lack of motivation to start a good routine. I want 2017 to be different on the personal side. There are a few notable items on my personal side that are influencing my goals for next year.

A)      I have been so exhausted. I am more tired than usual. The exhaustion runs deep. I don’t even want to travel anymore. Staycation anyone? I even wrote about feeling the burn out at work. I don’t even know what to blame at this point. It’s a combination of many factors – corporate work/life balance (does that exist?), a decrease in fitness and healthy foods, not enough sun (I sit in a cubicle all day). Whatever it is I need to figure it out.

B)        I manage the financial household in our relationship. I enjoy messing around with spreadsheets, reading about personal finance, etc. It’s a fun activity for me. I soak up the knowledge. But this really needs to be a joint activity; at least in terms of review. There are times where I feel a huge burden on my shoulders, especially now since my sole income is supporting us. We moved due to my job, but there have been moments of frustration at my husband’s job search. This is what happens when you have a very goal driven person (me) and a very laid back person (him) join forces in marriage. I’m very independent and will dig through a mountain if needed. So, in part, my husband has no need to take care of me in the traditional financial sense. We are working through it. I need him to understand the numbers at a high level and how the numbers are connected to the short term goals which are connected to long term goals and then, ultimately to dreams.

Here are the goals for 2017…even more simplified.

1.       Automate Finances and Do Not Touch Automation

a.        Contribute to retirement accounts (401K, IRAs, HSA)

b.       Invest in brokerage account

2.       Health and Fitness

a.        Exercise 4-5 times a week

b.       Eat more vegetables and fruit, less carbs.

3.       Involve my husband in finances more

a.        Draft an Investment Policy Statement

No FI Number

No FI number. While I dream of financial independence, lately I realized I don’t want to define a number. I have a goal obsessive personality. When I set hard, measurable goals, I become hyper focused to deliver results.

Examples below:

          Graduate in 3 years from undergrad

          Finish master’s in 1 year following undergraduate studies

          Complete MBA following master’s.

          List goes on

 Overall, it’s helped my life. It’s a reason I have been able to pull myself out of poverty. There is a reason I succeed. BUT there is one downside. I miss out on smelling the roses and sometimes this leads to burnout. A goal obsessive personality, also comes with anxiety. My husband reminds me I need to slow down. There are times he frustrates me because I don’t know how to slow down in the grand scheme of things. But it really goes back to a theme.

I need to enjoy life. I say this every year. If I keep repeating and making it a goal, eventually I will get there, right?

I was just reviewing our budget for 2017. We really are not crazy spenders. It shows in our monthly budget. Yes, we eat out, more than we probably should, but it is an indulgent. I love food. My hubby likes it when I’m happy. Wink!

The truth is I’m trying to automate financial transactions so I become less obsessive over our financial operations. After spending so much time at work, my non-working time is limited. I want to focus more again on exercising and maintaining a healthy lifestyle. 

Corporate Lessons

Today’s post is about life in the corporate environment.

My previous company is an international company with more than 100,000 employees worldwide and operations in roughly 180 countries. I was one of many floating in the corporate bowl. Working there was not an easy experience. The company prides themselves in sink or swim training. Basically, you learn to survive on your own or you will soon be out. There were many moments of misery, frustration, joy, and excitement. I built a strong network and left many good friends when I decided to leave. When I announced my resignation, a couple of leaders approached me and expressed their surprise. Apparently, I was viewed as a rising star. Hah good to know!

What I learned from my first corporate job:

          Make friends, not enemies – The company was very political. 50% of the time I felt like I was managing political tension. I know I made a couple of enemies just because I didn’t know how to react. But I learned. Don’t lash out. Always be calm, and step away when you can if situations are getting out of hand. Hard work is important. But it’s also important to make friends. It’s important to be political. At least get people to know your name and like you.

          Help people and express gratitude – I received many a helping hand along the way during my corporate tenure.  I’ve learned to express gratitude and in turn help more people. When I resigned, I approached someone who I knew had been trying to into our department. She was smart, capable, and had the right experience. Plus, she would be a great fit in the great team. I’m happy to hear she will be joining the team in 2017.

          Learn to take constructive criticism – If it’s not constructive, view it as constructive. It’s hard to be criticized. Believe me.

          Don’t be afraid to reach out, ask for help – Don’t be shy. When you don’t know the answer, ask until you find the person that will direct you. If you don’t ask, you will just sit there not knowing, and be unable to come up with an answer.

          Work hard. I get in early and leave late.

 On to my next gig. I am working for an international company with again more than 100K+ employees and operations all over. I’m applying the principles above. I can definitely say the experience at my previous company is helping me tremendously. I’m glad I worked and learned for my previous company. It toughened me up. 

The past six months have been challenging. Learning something new every day. But I can say, I’m closing out the year with good results. 

Go Vote

When we were in Belize last year, our last day there was completely a day off for everyone. It was Belize’s voting day for prime minister. Stores, offices, buses were shut down. The entire country was focused on getting people from their homes to the polling places.

Do your civic duty and vote tomorrow. There are so many places where people don’t get to say. Don’t let people tell you America isn’t great. It is. Most people are very blessed in this country. We just forget to pay it forward. We have to remember to be humans and to treat others with respect.

I texted my brother this morning to remind him to vote. He had already early voted. I’m glad at 19, he is being a responsible citizen!

This will be an election I will remember for years.

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