Happy Friday everyone! I’m so excited to introduce Kara today on the blog. She writes over at From Frugal to Free. She has a track record of kicking debt fast and now she’s just about to venture out on her own! She’s here today to report on taking the Roth IRA Challenge which tracks $5500 of money (how it was earned, where it went, and lessons learned). Take it away, Kara….
Last week, Mr. T turned on the outside hose for the first time this spring. The water trickled out. After some sleuthing, we realized the pipe had burst and as soon as Mr. T turned on the hose, the water started going in the (newly insulated and beautiful) crawlspace! Upon seeing the water all over, my first reaction was “SAVE THE STUFF!” I mean, that insulation was not cheap. And the boxes sitting in the water weren’t going to save themselves! Mr. T looked at me and said: “First we have to stop the leak.” He’s so sensible. That’s why I married him. Obviously. He made an excellent point. The order matters!
Two weeks ago, we did some recalculations and came up with three potential plans. The two plans that would allow us both money AND freedom would take significantly longer than four years. The really lofty goal date on our blog is 2022, which is 6 years away. So what’s the big deal with 4 years? As the school year wraps up, the temporary state of Penny’s childhood is weighing heavy on my mind. In 4 years, Penny will be done with elementary school. Based strictly on our calculations, by the end of May 2020, we expect to find ourselves with a paid-off house and $321,000 in investments. Those numbers won’t get us close to financial independence. And freedom in that plan would mean continuing on our current path for the next four years and then just quitting to be irresponsible for a bit! But looking back on our historical 4-year accomplishments, in all likelihood, stagnation isn’t an option.
“Buying stuff and buying time are in direct competition for you hard-earned money, and the choices you make in this regard have a direct bearing on your future.”
-Robert & Robin Charlton in How to Retire Early
Enjoy some Friday inspiration from a seriously awesome book that uses real numbers to show how they actually earned early retirement! Happy weekend, friends.
Love, Maggie
You’ve probably already seen the news about this study, but as a behavioral economics researcher by day and a personal finance blogger by night, I can’t ignore it here. Published on Monday in the Journal of the American Medical Association was the paper titled The Association Between Income and Life Expectancy in the United States, 2001-2014. First off, let me address the large scale of this study. It’s amazing. I mean, how does one go about getting “tax records for every individual [with a social security number] for every year from 1999 through 2014”?! That’s crazy! The sample size: 1, 408, 287, 218 person-year observations – no that’s not a typo! They also looked at specific geographic areas and if someone moved after 63, they counted their area as the place they were living at age 61 while working (they’ve seemingly thought of everything!). So let’s get to the findings:
A few months before we dove into purging our stuff, Mr. T got new socks. I was reading The Lifechanging Magic of Tidying Up to prepare for the big event. I was just reading the socks section when Mr. T was unpacking his new socks. “This book says you should roll your socks to let them rest.” Probably more to get to me to stop talking about the book, Mr. T dutifully rolled all of his socks. For two months, those perfectly sushi-rolled socks taunted me. They actually seemed happy. Socks. Happy. Crazy? Right? I wanted our whole house to feel that way. Every time I saw his socks, I wanted more! I wanted to dive right in and make it all better.
On Monday, we discussed how people are sometimes dumb with money and love, but it’s not all bad news. Today, we highlight research that shows love can positively influence our finances. The first study, published in December 2015, followed 693 University of Arizona students. The (mostly white, female) students were extensively surveyed toward the beginning of college (ages 18-21) and then again toward the end (ages 21-24). The 693 study participants were all included because they reported being in a serious, committed relationship at the second survey. The study was trying to figure out the impact parents and romantic partners have on the financial behaviors and attitudes of college students.
I read a lot about healthcare for my job and one thing that keeps coming up is that we’re terrible at making rational decisions about our loved ones. It’s easy to have a discussion about end-of-life care and how trying everything, no matter how expensive, is ridiculous for someone in her eighties. I don’t want to live or die like that. But when it’s your own mother, the story changes. If you’re the one that has to make the choice about pulling the plug on the breathing tube, everything changes. Understandably!
We did it! We just came into $1.4 million dollars and we’re done! See ya world! April Fools! (Sorry. Couldn’t help myself. Ahem… moving on…)
March! A thrilling month in the Banks house. I took a business trip to my office in the Midwest and met some interesting people on the plane. Also, we got new carpet in our whole house which we’ve been working up to for awhile. We wanted to get all of the energy updates done as well as everything decluttered before adding new, fluffy clean carpet to the home. The carpet we had was over ten years old, stained all over, very hard, and had all sorts of pet hair and dander from previous owners (which were not good for Mr. T’s dust allergies). Now, we feel like we’re walking on clouds! And I know all of the hidden pet hair has been vacuumed up!* I’m sitting on the floor as I type this because it’s just so wonderful…
Here on the blog, we celebrated a week of numbers! We looked at how much we spend, the percentages to know for retirement calculations, and then formulated a few new potential plans! If you haven’t weighed in on those, please do! We love to hear the feedback! We had some awesome guest bloggers continue the Roth IRA Challenge Series: Creating my Kaleidoscope and She Picks Up Pennies both took the challenge. I love seeing the many different ways people get an extra $5500! We would love to see more people take the challenge! A few more people shared their Fill-the-Bucket Lists on their blogs this month: FI Big Sky, Tawcan and Dream Beyond Debt – All of them are epic. I’ve also added all the current Fill-the-Bucket List Participants to the original Fill-the-Bucket List post. Go read all of them if you missed any!
I travel several times a year with my family, but very rarely do I travel on an airplane alone. When I go with the family, I usually spend the majority of the time paranoid about making sure my kids are the best-behaved on the plane so we don’t get dirty looks.* I traveled by myself for work last week. As I was packing my bag, I tried to decide which book to throw in. This was a big decision. The book you pick is the equivalent of a Choose Your Own Airplane Adventure. The book starts the path. I thought about the choices and my response to the question I would inevitably get: “What are you reading? Anything good?”