Denali Northern Expenditure

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Q3 2021 Plan Update

This has been an eventful quarter. We went on our first trip since the beginning of the pandemic. We traveled to see our parents in the Pacific Northwest before school started. It was lovely to see them and siblings and cousins, but by the time we went, Delta was starting to take over and things were not very relaxing and traveling was stressful. So, when we returned home, it was time to send the unvaccinated kids back to school and scream into the void. We’ve so far only had one known exposure at school and no one has managed to get it yet (knock on wood) despite cases in Anchorage being astronomical and hospitals being on rationed care. I hate this. Can it please be over yet?!

Alaska is now the worst place in the world for per capita COVID cases for the entire pandemic! I’m sick of all this winning!

Work continues to lay people off at least monthly and everything is still so up in the air. I’m still on COVID research full time, but luckily that isn’t as time consuming as it was in 2020. I accidentally started freelance editing on the side because it’s enjoyable and not COVID related. (Turns out my standards for work are pretty low right now. Not about COVID? I’m in!)

I’m trying to handle the general pandemic stress by reading more. I recently read:

  • The Five Years Before You Retire (affiliate link). The book is about traditional retirement, but is a great resource for navigating that transition.
  • Working Twice as Hard (affiliate link) is written primarily for Black entrepreneurs, but I recommend it to white people too as it is helpful to be aware of racism in the workplace, help call out microaggressions, and be sure you’re not leaning too heavily on your Black colleagues to do your anti-racism work for you.
  • Laziness Does Not Exist (affiliate link) is revolutionary in that it’s thesis makes it really easy to call out unfairness. We’ve used “Laziness” to actually mean people who are disadvantaged in some way and are actually working way harder than the rest of us (ie: homeless, depressed, poor, etc.). It talks about how our culture has made us all so afraid that deep down we’re lazy, so we stop listening to our bodies and push through. I’ve been trying to slow down, nap when I feel tired, and really listen to my body. We’ve all been through a lot of stress and trauma this year and this book was a helpful excuse to give myself grace to rest.
  • Die With Zero (affiliate link). My main thoughts on this book were about how you can insure against money fears (and when an annuity makes sense). But this book also justified my desire to spend a bunch of money when this pandemic ends. I’ve got ten years with kids at home and I’ve got a lot to pack in! (Only 5 years left with Penny!)

I’m not sure what I’ll pick up next!

In other exciting news, the work on the home addition has begun. We have a foundation now! It’s been touch and go because there’s a contractor shortage (everyone wants to work on their houses after being stuck in them for so long). We’re still hoping they can finish the exterior so we can get roofing and gutters done before snow sticks around, but we really have no idea at this point.

The Numbers

This is the last quarter we’ll be paying such a high (3%) interest rate on our mortgage. I realize that sentence is crazy, but we were able to lock in a 2.125% and the bank paid us $500 toward property taxes to do it (this was in part because we bought the house so recently, they didn’t require an appraisal). The world is upside down right now. We just closed on it last week. I’m thinking with a sub-$300k mortgage at 2.125% for fifteen years, I may actually be able to have the self-restraint to not pay it off early. TBD, but if I can’t do it under those conditions, we know I’m not capable. The mortgage is currently at $288,000. With the fifteen year clock starting over and the lower interest rate, our monthly payment is also going down nearly $400! In the usual vibe of “my life is wonderful but it sucks right now for so many people,” my broker was talking about how the people who lost jobs in the pandemic, etc don’t have access to these low rates because they don’t have the income to qualify for a refinance, so they’re stuck with high interest rates on mortgages they can no longer afford because the bank says they can’t afford lower payments. Make it make sense.

Seeing our investments double in a year is also a bonkers situation. It feels unsustainable. I literally have no idea what happens next. But the pandemic has taught me that nothing can be predicted, so we just live our lives and do the best we can. With that being said, despite the market dips of September, our investments are now at $659,000.

2021 Goals

We made these goals before we knew we were selling the condo. That certainly helped fund most of what we have listed here. But the addition is still the big unknown. We’ll hold off on making any new goals or doing anything big with money until that is paid for.

  • Have the Addition Exterior Finished – So far, we have a foundation, which is good progress. Fingers crossed the framing happens this month. I’m hoping to report this is finished by the end of the year and Mr. T and I can start our work on the interior (we plan to do most of that ourselves).
  • Max Out My 401k ($15,138/$19,500) – My plan doesn’t let me go over, which is super nice, so I have it set up to max out on my last paycheck.
  • Max Out Mr. T’s 401k ($14,300/$19,500) – Mr. T’s retirement contribution “slider” may be the death of me. I can slide it to “$732,” “$798” or “$819″ per paycheck, but not $750.” We were under by $600 in 2020 because of the dumb slider. I’m hoping to get closer to maxing out this year, but I’m doubting we’ll actually be able to get the exact $19,500. My company doesn’t let you overcontribute, but I’m not sure about Mr. T’s. I’m afraid to try.
  • Max Out my Roth IRA for 2021 ($6000/$6000) – Done. Probably the earliest I’ve ever done so!
  • Max Out Mr. T’s Roth IRA for 2021 ($6000/$6000) – Done. Seriously nailing these goals (thanks to the unexpected condo sale!)
  • Max out a SEP-IRA – My current plan is to save all our self-employment income in our business account without using any of it. This will mean we can max out our SEP-IRA and then put the other funds into the new brokerage account, but we’ll wait until the addition is done… we may need to use the funds we get from our t-shirts/coloring books business for the addition.

I’m watching Pfizer closely hoping we get an approved vaccine for the kiddos by the end of the month and spending some of my free time researching Japanese toilets for my master bathroom. I would not have predicted I would be doing either of these things in Fall of 2021, but life is crazy sometimes. As we enter the holiday season, I hope you have time to slow down, rest, recover, and safely spend time with loved ones.

How to Insure Against Your Money Fears (And When an Annuity Makes Sense)

I just finished reading Die With Zero (affiliate link). The basic premise is that your money is worth more at different stages of your life (ie: when you’re younger you can do more things, so you shouldn’t wait until you’re old and retired to enjoy your money). The book is a good balance to all the “do nothing but work until you can retire early” literature available, but the most interesting idea to me was the fact that you can insure against all of your money fears.

People often save WAY too much money because they fear leaving their kids in the lurch, ending up in a retirement home, or outliving their money. Insurance can help you overcome these fears.

When You Need Life Insurance

Life insurance is a way to make sure your kids will be okay financially when you die. Term life insurance is the way to go because it’s cheaper and you likely don’t need life insurance for your entire life. I firmly believe everyone should have life insurance if you have young kids. Life insurance would allow your family the financial options of being able to pay for the funeral and end of life expenses, but also be able to take the time they need to adjust to just one parent. Even stay-at-home parents need life insurance. They are covering the bulk of the childcare and housework and those things are NOT free. Also, again, the loss of a parent/spouse would be a serious adjustment. Money can help the other spouse take a break from work to figure things out.

At the end of a 20 or 30 year life insurance term, you likely won’t need life insurance any longer. If your children are adults and you have enough savings to be able to continue to help them with college (if you’re still doing so) AND live your current life AND pay funeral expenses, you’re successfully self insured and no longer need life insurance. Indeed, your savings will no longer need to cover two of you (as one of you will no longer be around).

Long-Term Care Insurance

Long-term care insurance is complicated and expensive, but if your biggest fear is not being able to afford expensive long-term care toward the end of your life, you can help relieve that fear through insurance. Nursing homes can cost upwards of $100,000/year, so it’s a legitimate concern. However, in the worst case scenario, you run out of money, they don’t kick you to the curb. If your assets have been depleted, Medicaid kicks in.

I don’t think long-term care insurance is a good fit for everyone, but I do think it’s a great idea if your biggest concern is long-term care.

When an Annuity Makes Sense

An annuity is an insurance plan against outliving your money. This was maybe the most interesting idea Die With Zero introduced. Annuities are terrible investments and only exist because people think they will live longer than they actually do, so the annuity makes money because they don’t pay out as long as you think they will.

HOWEVER, if your biggest fear is outliving your money, an annuity is a great idea. Guaranteed income forever to help you overcome that fear!

Do I think everyone should go out and get annuities? Nope. They’re still terrible investments, but prior to this book, I didn’t see a reason anyone should get one.

Money is Emotional

Anything that pretends we can all make totally rational money decisions based entirely on math is crazy. We’re emotional. We have histories with money that color our decisions. We have actual fears about money that lead us to make other decisions. Using insurance products to help people have less fear is actually a great idea. If you won’t be comfortable knowing you may not be able to pay for long-term care or will never feel like you have “enough” because your biggest fear is outliving your money, there are ways to help you overcome those fears!

Spend More Money Now

I think Die with Zero is actually a great book to read in the middle of a pandemic, because if you’re anything like me, you feel like after the past year and a half of being stuck a home, you’re a bit concerned about how much you’re going to “let loose” financially when it’s safe to go and do things again. I’ve already prepped Mr. T that if cheap tickets to somewhere I want to go pop up, I’m not going to be as rational as I once was about my decisions and will probably be purchasing said tickets (work and school can work around TRAVEL for a change!). This book will make you pat yourself on the back and say: I’m in my golden years when I can go and do and have the health to do so, so it’s time to be SPENDYPANTS. (Also, this is your warning that if you’re following for frugality tips or semi-minimalism, that Maggie is no longer with us. The current Maggie goes to Goodwill weekly and plans to go hog wild the next few years financially. It’s gonna be a wild ride.)

Why We're On the Slow Route to Early Retirement

Why We’re On the Slow Route to Early Retirement

Our family is on the slow route to early retirement. Our story will never be shared on big news outlets because it just isn’t that interesting: “Couple saved money for 15 years to retire in their late 40s!” – 12 years? late 40s? But this is a conscience choice for us.

Why we’re heading to early retirement

The “Why” is always the most important question about a journey to early retirement. In our case, it’s not because we hate our lives now. It’s because we would rather take money out of the equation. Mr. T doesn’t love his job, but he also doesn’t hate it. He’s not the one stuck at work with tight deadlines, no sleep, panic attacks googling: “How do I retire early?”

Why the Numbers Don't Matter Right Now

Why the Numbers Don’t Matter Right Now

If you are early on your journey like we are, I want to make the case that maybe the numbers don’t really matter right now.

Projecting is Harder Long-term

Just like the 10-day weather forecast is never right, the 10-year projections won’t be right either. I can tell you firsthand that projecting can be frustrating when you have so little in savings. Conservative estimates make early retirement look impossible.

Healthcare Costs: The Wild Card

Healthcare Costs: The Wild Card

I know you’ve probably read a million posts on this topic lately since the future of healthcare in the United States is so uncertain, but healthcare is a big topic in the preparation for retirement, so let’s look at our situation:

Retirement Healthcare Cost Estimates

A recent Fidelity analysis estimates that healthcare will cost $275,000 per couple. This estimate only includes ages 65-88 at the latest. That averages out to $11,957 a year! Say you retire at 40 and live until 100 and spend the same amount of money annually, you’re looking at a whopping estimate of $717,420! Do I think this is reality? No idea. The answer is that we have LITERALLY NO IDEA what healthcare will look like in the United States until we die. That makes planning for it in calculations really, really hard.

Why Are We Afraid of Boring?

Why Are We Afraid of Boring?

Everyone lives their lives trying to not be boring. They don’t want to live like everyone else. They don’t want to seem average. People prove they’re not boring by buying nice houses, interesting cars, fashionable clothes. “I couldn’t possibly be boring. Just LOOK at me!” In this cycle of trying to prove we’re not boring, we also expect boring answers to be wrong.

The Boring Answers are the Best Ones

People want shortcuts. They want to hear the anecdotes and not the research. Everyone wants to be in shape and everyone wants to be rich. Why do you think the weight loss and financial industries are so large? We want a pill or a get-rich scheme. Do you know how to get in shape? You exercise. You actually work the muscles you want to be strong. Do you know how to get rich? You save money. You let money grow by not touching it.

How "Make More Money" is Like a Video Game

How “Make More Money” is Like a Video Game

Quick call to action: I’m running an awesome research project and need your help. I need as many responses as possible. Go take the survey. It won’t take long. Thanks so much! Do it for science!

Maybe you’re like me. You read all these amazing posts about how the solution to your problem is simple. Make more money. And then you think: “Yeah, wouldn’t that be great?!” The posts say: “Don’t worry. It’s easy. Start a blog. Make an extra $90,000/year” Or “just start an e-commerce business and watch the sales replace your day job income in no time!” Now, as a consistent blogger of nearly 2 years that has made a grand total of less than $400 on this blog (want to increase that? Sign up for Personal Capital with my affiliate link. The service is free. And awesome. I promise), and as someone that runs an Etsy shop with 2 total sales (I won’t pitch that to you as well. You’re welcome), let me tell you that I finally figured it out!

There are levels to the game Make More Money

Making the Most of Missed Opportunities

Roth IRA Challenge: Making the Most of Missed Opportunities

I can’t express how excited I am to have Ms. Our Next Life on the blog today. She blogs over at Our Next Life and has one of the best, most grounded, reassuring perspectives on the journey to early retirement out there! Seriously, if you’re not already a fan of Our Next Life, it’s time to figure out what all the buzz is about! Go! On top of that, though we’ve never actually met in person (yet!), she’s one of my real friends and I’m delighted to feature her and a bit of her journey here today…

Before we dive in, I just have to share with you guys that Maggie is one of our very favorite humans in PF blogland. She will never tell you herself how awesome she is, but it’s true. I’m especially grateful for her friendship and support since our blogs were both baby blogs – and, of course, all the Clueless GIFs. So needless to say, I’m thrilled to be here.

Practicing Escapism

Practicing Escapism

What day of the week would you guess searches for jokes are at their peak?

I would guess Monday. How else would you get through a “bad case of the Mondays”? Turns out, I’m wrong! Searches for jokes are at their LOWEST on Mondays! And highest on Fridays-Sundays (when I commonly search for lunchbox jokes for the kids for the week).

So what search terms are highest on Mondays?

Depression. Anxiety. Doctor. 

This is devastating. Joke searches also dive after traumatic news events like bombings. This information suggests two things:

Northern Expressions

Northern Expressions: The Purpose of Work is to Create

You guys, maybe you’ve seen this around, but if you haven’t stopped to watch it. DO IT. This is Mr. Money Mustache talking about how the purpose of work is to create and when money isn’t in the equation, we can truly be authentic in our creativity. 

I watched this and was audibly yelling “YES! YES!” multiple times (reminding myself to be quiet to not wake up the kids!). THIS IS WHY WE WANT THIS!

I won’t take up any more of your time. WATCH THIS:

Happy Friday, Friends!

Love, Maggie

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