All For Naught

I really thought I had something here, a random note in a spiral notebook from 15 years ago.

A capital ‘L’ lead that would translate into a solid post that was relevant to two different threads on my blog.

I personally do not blog posts like “Top 10 Most Common Currency Denominations“. I tend to write about things a little more off the beaten path, or at least try to relate the post to my own personal experiences.

The handwritten note in my old notebook was just the kind of article my young blog needed and so I retreated to the laboratory and began to toil.

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Alas, it turns out it was all for naught.

I decided to churn out a post anyway because I was so Damn impressed with the truth behind the fiction.

Let me elaborate;

train-wreck-1935In 1958 an article appeared in the Journal of Sociology. A certain Dr. James D. L. Stauton published his findings based on the math, but they implied something far less tangible.

His research was based on 200 documented train crashes in this country since 1900 and 50 plane crashes since 1925.

He crunched the numbers and found that the average occupancy rate of the planes and trains that crashed was 61%.

The occupancy rate for the trains and planes that arrived safely with no crash, 76%.

A statistical discrepancy of greater than 3% is notable, and one greater than 15% is SIGNIFICANT.

The Journal of Sociology is peer reviewed and certainly a legitimate source for scientific literature.

Call me officially intrigued.

What did this all mean? Well the data seemed to suggest that people unconsciously knew what would happen and therefore avoided the crashes. Here we have a non scientific principle backed up by hard data.

If we extrapolated upon this theory what would we find specifically of interest to the FIRE community?

Should you act upon a feeling about an impending stock market rally? Did something lurking in the back of our brain tell us we can’t rely on social security?

Are we collectively squirreling away assets because of some sort of general impending economic doom?

And even more to the point for me, is my irrational fear of zombies a absurdly disguised version of this phenomenon telling me I need a panic room?

sherlock-holmes-147255_640The post was practically writing itself, but relying on my old college notebook as a source was shaky at best, so I implemented what passes for intense research in this day and age, I googled it.

To my surprise yet continuing admiration, it would seem our Dr Stauton is a fiction created by non other than this guy;

BLACK AND WHITE FILE PHOTO OF HORROR WRITER STEPHEN KING.Turns out the whole concept of the study was a clever background fiction for his novel The Stand. Remember the black lady on porch in Nebraska, Abigail Freemantle, Stauton is the name of her doctor. Much to my dismay, neither the study from 1958, nor the good Doctor really exist.

So back to drawing board. I just wanted to share my discovery with you for 2 reasons;

First, this is why Stephen King is freaking National Treasure.

Secondly, I wanted you too see what goes into a post on this blog and give you some better insight into my thought process and what you can expect from this blog in the future.

Thanks for nothing Snopes.com.

My Wish List

Do you know what happens to the guy who spends his whole paycheck on state of the art body armor from his neck to his toes so that when the end of the world comes he is ready?

Yeah, that guy gets shot in the head on Day One.

scroogeFIRE is a lifestyle. I love it, dare I say, it’s fun and it serves a very tangible purpose. The end goal of having all the money you would ever need is a noble endeavor. That being said, I make a point to spend some moolah every now and again to keep my inner cheapskate in check. I am a husband and a father of 2 kids. My personal spendthrift choices may not reflect the desires of the rest of my family.

That is why I keep a ‘Wish List’

The Wish List is just that, a running list of things we do not need, but would like to have. In the early days when we were not as financially well off, I would shun spending on anything other than what we needed, but as we progress on the chart of ‘how you doing?’, I think it is important to loosen up the belt and enjoy life while we are here and healthy.

Here is our latest Wish List;

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What’s on Your Wish List?

This does not mean we will buy everything on this list, I will likely never get my 20 acres.

It is a Wish List, I put every reasonable idea down on paper and we slowly make them real. I think it serves 3 purposes;

1. It gives us something to look forward to, dreams are good and serve to make life more enjoyable.

2. It lets us keep track of our progress and appreciate just how far we have come.

3. Setting goals is half the reason you ever achieve any goals. It is a self-fulfilling process.

Lastly, I think that after some time has passed, you can look back on your Wish List and read in between the lines to see what is really important to you.

Doing this is what led to my epiphany that I am just as interested in Prepping as I am in FIRE.

Where Does Discipline Come From?

Discipline is the MOST IMPORTANT factor in the FIRE ideology.

It is not simply a matter of income or frugality. One without the other will not lead to the promise land. Plenty of times we have seen the high income earner go down in flames because they lack the ability to control their impulse spending or at least stick to a budget.

While all the best frugal tips still can’t make money appear, without improved income you are just good at being poor.

Discipline is the common thread that unites these halves and forges them into true wealth accumulation.

The discipline to sniff out the money in the first place, to earn it, and to constantly try to improve both the quantity and variety of its sources. The discipline to live below your means, invest wisely and constantly stay on top of the Merry-go-Round of income and expenditures.

But where does this discipline come from? Are we born with it?

My wife has never left her car keys in the same place twice EVER, this phenomenon is a approaching a mathematical paradox. My keys are in the ignition, or my right hand pocket, or on the kitchen island next to my wallet. That’s all, one of 3 places since time began. Why are we so different?

dis·ci·pline noun

training that corrects, molds, or perfects the mental faculties or moral character.

sargent-hartman

I have been to boot camp. I actually enjoyed it. I suspect I knew this even as a child. Are we drawn to discipline because it was lacking in our childhood? Do we rebel against discipline because our household was too strict? Can you change throughout your life?

I suspect the answer is clearly yes, it’s the mechanism that’s fuzzier.

Personally I have practiced little exercises my entire life that I believed help me to build up my own personal discipline. I would deny myself things for no real reason other than to fight to urge to gratify every little whim and desire (give my candy away). I would also play little games involving purposely repeating some task even when it was a waste of time and energy (walk the long way around the fence). The task must be completed just because that was the intent of the exercise.

I worry sometimes that this might be borderline OCD, but it was not constant and always consciously for the end result of practicing discipline.

It seems that two methods of developing discipline occur with or without your participation.

You did not really have any control over the environment you were raised in, that ship has sailed. You can be subjected to someone else’s punishment/reward system like school discipline, or the boss’s rules at work.

It is the last and 3rd method that seems to be the one with any sort of realistic choice component, putting yourself through the paces of your own devised system for developing discipline.

hot_gates_part1Whether or not you do this consciously is not the point.

Our brains crave structure.

Human nature wants to have the parameters of acceptable behavior to be clearly defined.

We seek out  methodology that gets us what we want. Almost everybody who reads a blog like this has or at least understands the need for a mental discipline that will allow you to whip your financial house into order.

Short of sending our young off to the military starting at age 7, if anybody has some input on how to improve your personal stockpile of willpower, let’s hear it.

So We Built a House

It’s 2005 and we have just moved to a new state, we have new jobs, a pile of money from the sale of our first house, and a baby due in 5 months.

Once we zeroed in on the area/school district where we wanted to live, we needed to find a house that would work for us. We looked at a lot of real estate. After a dozen houses or so we come across a new construction that we liked, only to find out it was already sold. We look, and tour, and drive around but nothing comes close to that one we liked, so we have this bright idea.

What if we find that builder and have him do that house again for us.

dscn0043Enter Tom, our builder. Tom is unusual in that he is a general contractor that does much of the work himself. He contracts out for some areas but it was him that was there everyday, mostly by himself, building our house. There is a lot of stress involved with building your own house. Even after you have chosen a layout, there are a hundred smaller decisions to make and everyone of them involves a decision to spend more to get more or go cheap and keep the budget under control.

The prebuild process involves a contract and a ton of ‘Allowances’.

Here is where doing some initial footwork pays off. The allowances are for various aspects of the construction like; flooring, cabinets, plumbing, lighting, paint, you get the picture. Well after you sign it is probably too late to up those limits, so everything you ‘add-on’ increases the final cost. It is better to negotiate these allowances before you sign. Some rough estimates found on the internet and even going to the stores and pricing out your idea will give you a better picture of where you need the allowances to be before you every start on the actual house.

There is a lot of advice out there on the internet, read it all first.

If I had spent more time on-line I would not have; installed a jet tub, used hollow internal doors, skipped on insulating inside walls, accepted a 10 SEER A/C unit (minimum is now 14 SEER). I did however, make some good calls like having the basement finished for $10,000. This would have costed 2 or 3 times that amount if I did not choose to do it at the same time as the rest of the house.

Other advice seemed OK to me but not necessary like waiting to install granite counter tops or outside landscaping until you have lived in the house a full 4 seasons to see how things change.

When in doubt I think it is safe to say you can change the quality of the space you have, but it more difficult to change the size of the space itself.

By the end, we were stressing out about the budget and left a few things undone that we would should have just sprung for. Procrastination has a life all its own and we are just now this year (12 years later) about to upgrade those counter tops. Our builder had moved on to the next job before we were fully done (this is common). We had to make a codicil to the contract of a per day penalty for Tom not finishing the ‘punch out’ list on time.

When we finally parted ways it was like breaking up with a girlfriend.

I am glad we built our house, given the market in 2005, we did it for a square foot price comparable to buying a house, this is not always possible. I probably would not build again, but I think our experience was rather typical. Mistakes were made, teeth were gnashed, but overall were are good with the end result.

I think these would be the big 4 take aways;

  1. Be mentally ready, “this will not be over quickly, you will not enjoy this” *, it is not cheap.
  2. Preplan for your allowances, you should pretty much know the cost of your desires before you see your numbers.
  3. You should probably go ahead and get that upgrade, you are only building once and while the cost is fixed at closing, your income is likely to go up over time.
  4. Ride your builder moderately, he will stray if you let him, but you want to stay on good terms.

* I apologize for there being nothing humorous in this whole post. It reads kind of dry, so I embedded a movie quote. Be the first to reply with the source and you will look cool for all of your imaginary internet friends.

P.S. One reader sent this tweet; great article! Would be curious to hear more in depth on how the payments/financing was structured (if any).

As to financing, we had a bit of an unusual circumstance.

Normally, to build a house, you would have to get a construction loan. Construction loans typically require interest-only payments during construction and become due upon completion (meaning that the house has received its certificate of occupancy). The balance due is then rolled over or ‘converted’ into a typical 30 year mortgage. They are very annoying because the bank releases certain chunks of the money required by the builder to complete a part of the house (i.e. foundation, framing…) after confirming the work has been done. This middleman slows up the process and adds to the overall headache.

We did not need the lender to give us a construction loan because our builder was in the initial stages of a ‘spec’ house. He put up all the money to build the house, we simply contracted to buy it upon completion. This worked well as we were able to have input on all aspects of our house before the actual build.

The Cottage Renovation

All told, we sunk $ 58,000 into the cottage once we got it solely into our possession.

Not only did we want to make some permanent changes and upgrades, but we knew if we were going to list it as a vacation rental it needed to be remodeled. Personally, I could watch HGTV all day long and I figured somebody out there would also like to check out the changes we made. If you want the back story on how we acquired the cottage in the first place, click here.

We started with the nature of the space itself. There was a small first floor bedroom that should have been eliminated to make a bigger living room.

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The extra bedroom off the living room, see the door

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The wall is now gone 🙂

And now the living room looks like this;

living

You can see the new support beam, it was a load bearing wall 😦

We also took the weird parlor room and built a wall with a door to turn it into a first floor bedroom. The original cottage was only 2 rooms, a later addition was built that doubled the space but not really with good room flow in mind. These two changes seemed organic. Total Cost: $ 4,800 (needed a support beam).

The upstairs of the cottage is a semi-private open loft style area that sleeps 8 (4 beds) and has a half bath, we changed out the carpet and painted the walls.

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Upstairs Before

This is what the upstairs looks like now; kids love the openness but its not exactly conducive to privacy.

We also laid down new hardwood floors throughout the main floor. I ended up getting the product for free because the company shipped two different tones of floor planks. It ended up looking nice enough that it feels like we opted for this on purpose. Score! New floors up and down plus painting, Total Cost: $ 7,600.

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We did a total tear out of the main bathroom, opting for a tiled shower. This upgrade cost so much it inspired me to do some later work in the kitchen by myself.

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Bathroom Before

Main Bathroom now; Total Cost: $ 11,500

We put in a microwave above the oven, painted the cabinets, changed the hardware, installed a  new sink and new counter tops, and added a back splash. I ended up doing most of the work in the kitchen myself, it worked out to getting a new kitchen for $3,000.

Great idea to tear out the cabinets above the sink, now doing the dishes isn’t so bad because you can look at the lake while you work.

From That, to This;

Outside, we replaced all the windows, patio furniture, and put up all new vinyl siding. Total cost $ 19,000.

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Outside back in the day

Outside now looks like this;

window

Kitchen Table view of the Lake

Lastly, we replaced all the beds, bedding, and most of the furniture, but now the cottage is on cruise control. It is being booked steadily, people love staying there and we have a few more upgrades up our sleeves.

The fireplace is getting fixed later this season, I can’t wait.

The Art of Criminal Defense

I used to get asked all the time, ‘How can you defend people that you know are guilty?‘ This is not the point, we all have a right to and deserve a vigorous defense. If all parts of the machine are doing their job correctly, the right thing will happen. That being said, boy was there never a dull moment in indigent defense work.

I love these, trust me people this is not fantasy, these are probably transcripts.

Just remember we should judge a justice system on how it treats not our best and brightest, but the least among us.

Numerius, the governor of Narbonensis, was on public trial in Rome for the crime of embezzlement.

Numerius contented himself with denying his guilt, as there was not sufficient proof against him.

His adversary, Delphidius, a passionate man, seeing that the failure of the accusation was inevitable, could not restrain himself, and exclaimed, “Oh, illustrious Caesar! If it is sufficient to deny, what hereafter will become of the guilty?” to which Julian replied, “If it suffices to accuse, what will become of the innocent?”

Thanks to BigLawInvestor for this one as well;

March Net Worth 2017

0303networth

0303assets

Total Assets: $1,966,581 up + $22,966 from last month

Accounts receivable, This is a business deal from 2014

Boat & Cars, Depreciating assets, but cars new in 2015

Real Estate Old House + 2nd home/vacation rental

Primary Residence

Retirement accounts; 2 people, 2 jobs each, 5 accounts total

Brokerage accounts; 2 taxable stock accounts

College Funds; Prepaid tuition and 529 accounts or 2 kids

Bonds; ‘I bonds’ bought through Treasury Direct

Cash & Metals; 6 accounts and a security deposit box

Health Savings Acct., Just started in 2015

I found an accounting error in my error in one of my 401ks (it had not been automatically updating) so it jumped over $5k!

0303liabilities

Total Liabilities;$533,740 down – $1,486 from last month

Mortgage on House; Bought in 2005 Interest 3.75%

Mortgage 2nd Home; Bought in 2012 Interest 3.5%

Student Loans; Law school sucks

HELOC; Current APR 3.49%


TOTAL NET WORTH     $1,432,841

You are Wrong About College

I wanted to write a piece to remind all of the people who disparage spending money on college education that they are dead wrong. And no, this is not another article about the cost of college compared to the salary you will make, or the one that compares the income of college graduates to high school graduates. This piece is about the intangible value of college that is worth its weight in gold.

Most of us grow up in our little fishbowls without ever really experiencing anything outside of our wheelhouse.

We are pretty much acclimated to our world as we know it by the time we are done with high school. This is not a bad thing, it is how we develop a sense of community with those people who share our values and our zip codes. It makes for decent folk and for nice places to raise a family, but our evolution as human beings and certainly our education should not stop there.

oldschool

College is there to challenge your notions of what is normal, moral, acceptable, sufficient, orthodox, and expected. It is for many people the first time they really encounter ‘the other’ whether that be in the form of race, class, ideology, or lifestyle.

College is meant to push buttons and boundaries.

It you are looking at college as simply a means to an end, i.e. trading money for a future job/career, then you really mean Voc-Tech. College is not only for expanding your knowledge, but also the freedom and breathe to explore your interests and to expose you to things to which you are not accustom.

Had you ever really met a Dominican before, or a communist, or a Satanist, or a gay person?

I am bothered by this modern movement regarding; trigger words, safe spaces, and micro aggressions. If you care about any of those things, YOU ARE MISSING THE POINT. If you want to feel safe and that everything you currently know to be correct is in fact correct, go home to the place you grew up in and be that way. This is why we send people off to college at age 18 or thereabouts, they have some life experience but they are terribly green about the big wide world around them.

College is meant to be a swirling mass of sometimes confusing, sometimes intimidating LIFE from which you can absorb what you will.

greek-philosophersJust think, everything I have mentioned so far is mostly just in relation to the other people who are also going to college at the same time you. We have not even touched on the fact that there is no other source of knowledge as in depth and thorough as a college campus. Even if you are smart and well read, some professor will come at you from a different point of view and rock your world. Wisdom will make its first appearance in your life if you realize maybe you don’t know everything or GASP, a belief you have long held was wrong.

College is a time and a place in your life.

I would never expose myself again to those same tired discussions nor subject myself to those people who desperately need to be punched in the face, but I loved it at age 20. So go on, bathe in it, bask in its chaos, lap up those 500 level courses and know you will become a slightly better citizen when it is all said and done.

evolutionNow if after college, we could just get you young people to go to boot camp and work as a server in a restaurant for 6 months, you would ready for life.

Cars I have loved, Part 1

My very first car was a 1978 red Plymouth Volare Station Wagon that I bought with my own money for $500.

I was about to be 16 and about to get my license, at least that was the plan. That car sat in the driveway while I went over every inch of her tightening bolts and cleaning floor mats. The problem was I kept failing my driver’s license test, 5 times in fact. Don’t get me wrong, I was good at driving, its just I was so feral I did not know there was a pamphlet you were supposed to study BEFORE you tried your written test.

Question 4. How soon before your turn are you to use your turn signal? (actual answer 250 ft).

My answer was “in enough time to let the cars around you know that you intend to turn.” Oh, and also “don’t use it yet if there are upcoming turns you don’t plan to make before your desired turn”

Just for your information, there is apparently no partial credit for answers which are technically incorrect even if they are in the spirit of the correct response.

punkI also got a failing mark for things like ‘taking on hand off of the steering wheel’ while performing my parallel parking. I get it, 10 and 2 was the safe way to do it, but I still maintain my harsh critiques had something to do with my misanthropic malcontent appearance. We will never know for sure.

I had this car tricked out with all the best stickers and homemade stereo equipment.

The windshield wipers did not work so when it was raining we literally had people in the back seat pulling a complicated series of pulley and levers to manually make the wipers go back and forth.

She could easily get 11 people to the party on time, no problem.

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What If this bench seat could talk……

I lost this sweet ride and it was my own fault.

Car maintenance is a harsh and pitiless Mistress.

Change your oil folks or it will take from you that which you love.

My second car was a 1977 all white Chevy Caprice Classic with the curved back windshield and all white interior. Everyone thought I was an undercover cop car and acted accordingly, I loved it. I bought it for $700 and was now more mature, so it was not covered in stickers. However I still had not learned my lesson about routine car maintenance and blew the head gasket after only 2 years.

So after 5 years, we have spent a total of $1,200 on cars and will not need a car for the next 5 years or so due to city living and/or extreme poverty.

Next we will flash forward to my life in late law school with my live in girlfriend who will shortly become my wife.

Continue to Part 2

Cars I have loved – Part 2

trapWe bought a new car. FLASHING SIGN, STUPID MOVE!

My wife was able to get a decent deal through GM’s A-1 plan for family members of GM workers, but we still paid over $19,000 for a 2001 Pontiac Grand Am. I proceeded to get into a one car accident with a post at a Popeye’s restaurant and learned another valuable lesson. Well two lessons actually, first I needed to stop trying to punish and/or teach lessons to inanimate objects, they never learn. Secondly, don’t make an insurance claim for any damage around the $1,000 mark. You would be better off paying to fix it yourself. The math does not work out once you factor in the increased insurance rate you will be paying for the next couple of years.

Even though this car would go 120 mph while still driving pretty smooth (thank you North Dakota), we sold it on Craigslist in 2009 for $3,200.

My smartest car move to date was the purchase of 2000 Ford Focus.

I bought her used with 30,000 miles on the odometer for $5,500. This is the sweet spot, a slightly used car with a good history, a few miles, and a deeply discounted price. I bought my Ford at a Kia dealer who was just looking to get rid of it. I drove the heck out of this car, putting 200,000 miles on it back and forth to work.

Even when my co workers would say ‘why do you drive that?’, my inner mustachian was laughing all the way to the bank. No car payment for 13 years. Every year squirreling that money away, who cares that the windows are manual, there is no cruise control, and half of the key is permanently broke off inside the ignition.

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My other efficient car move comes with no bragging rights, we inherited a 2008 Saturn Vue.

Our commutes are brutal with me at 60 miles a day and hers at 80 miles a day. We drove that Saturn until it hit 220,000 miles. Finally one day after doing a Monthly Net Worth and questioning whether or not we were living life as fully as we should, I caved to my wife’s suggestion that perhaps my car was too far beneath our means (and probably unsafe) so we decided to upgrade.

In 2016 we got not one, but two ‘new to us’ cars.

A 2015 Chrysler Town and Country, which is an AWESOME family car. And we bought a 2015 Chevy Malibu. Both cars were used in that they had about 30,000 miles on them, but were priced very well, the Chrysler because the were discontinuing the T&C model and the Malibu because it was an unusual shade of blue (possibly even a ‘please don’t stand so close to me’ shade of purple in certain light).

We paid cash, because I hate Debt. Now we don’t have to worry about our cars for years to come. SO, in summary, I learned;

  1. Change your oil, an ounce of prevention is worth your car not blowing up.
  2. Never buy new, it is a waste of money. The sweet spot is in a one or two year old car that still has low miles and a good CarFax history.
  3. Never use your insurance unless the damage to be covered is over a $1,500 threshold or you will loose money over the long haul.

P.S. Although we traded in the Saturn Vue for $1,500 credit. The Ford Focus had some interesting life left in her. I was on Craigslist when I stumbled upon an ad for a family who had just wrecked their own car and were in desperate need of a car. Now I was planning on donating my car to NPR and taking the charitable tax break, I was only on Craigslist to get an idea of what it was worth. I fell for their story and called the guy up offering to give him the car and he promised he would one day do something good for someone else. I met his girlfriend at their house and signed title over to her for the price of a menthol cigarette (I quit, but I still miss it).

P.S.S. The State Police call me a week or so later to inform me that my vehicle (they never registered it in their name) was involved in a hit and run accident and had a stolen license plate on it. The best intentions don’t guarantee anything I suppose. Let’s add one more thing to the list of things we learned;facepalm

4. Always take a picture of your signed-over title and make them fill out a receipt. (don’t worry, I did).