My Expenses For June
I spent nothing on decorating the condo this month, the $167 is my monthly HOA dues. I am not including my property taxes but that’s another $140/mo which I pay once a year.
Dining out ($295) again is a category that I am hoping to cut back on, that’s money I’d rather spend on someone in need rather than myself. I will be writing a lot more about that soon, gotta figure out the details still.
I mentioned in the past that I am getting rid of the entrepreneurship category. I am renting an office space that is $500/mo and now that I am traveling back and forth to see my girlfriend in NorCal I won’t have much time to spend there.
Commuting ($30) is for the Trimet tickets I buy when I travel longer distances. I need to get my ass out there on my bike more but damn it’s so nice to escape the heat sitting inside a chill train.
Traveling to see my woman ($334) is a new category for me. It’s great seeing her so it’s a bittersweet category. I expect that some months it will be higher and some months lower until we can close the gap on our distance. I considered accumulating points on a rewards card but the math didn’t make sense so fuck it.
I had work related expenses ($168) which I won’t be reimbursed for. I do want to mention that when it comes to buying airline tickets to travel I often have to choose dates around my work schedule which means higher costs generally. Not to mention commuting expenses etc. Our jobs cost us much more than we think.
So, if I wanted to spend $2,200/mo without having to work for it ever again I would need $1,372,000 stashed in a savings account and just take $2,200 off the top every month.
CD rates are slowly creeping back up, at 1.85% I could invest about $1,427,000 and just collect the interest without touching the principal, not bad especially if you want to leave your money to someone.
I could invest $1,320,000 in mutual funds and spend only the passive dividends which are deposited in my accounts every quarter.
Or, I could invest $660,000 and do a combination of selling appreciated funds as well as using the dividend income. This method involves selling off some funds as they grow in value and then using the proceeds as income. It’s tougher to do some months/years as the market is down and much easier other months when the market is going strong. How do you overcome this? Spending flexibility.
3 rental properties making about $730/mo each after all expenses could also cover my monthly overhead. Though I don’t think real estate is as hands-off as mutual funds it is easier than a retail business and certainly easier than working in an urgent care. I like to think of the rent as the dividends and the value of the real estate as the assets I hold in the mutual fund. In my neighborhood each property would cost around $250k if not a little higher. I would only need about $400,000 invested since the rest I could likely get from the bank.
And finally, I could work about 2.5 shifts a month to make that $2,200/mo after taxes and let my investments grow and mature. By mature I mean that my tax-deferred accounts (IRA, 401k) would finally be accessible without a penalty starting at age 60. My current mutual fund portfolio of $340,000 would grow to $900,000. Dividends from such an account would be nearly $20k/yr. I would likely have social security income by age 65 as well as possibly a pension.
Why calculate things so tightly?
Because money is in an endless supply no matter what you hear on TV. It is printed whenever our government wants more of it. Luxury cars and fancy dinners are plentiful and will be available up until the end of this world. Time however isn’t, it’s something that I find very precious. The time I want to get back is time that isn’t controlled by anyone, a peaceful and mindful time which I can spend doing whatever it is I want to do.
People almost always say they value their family, friends and their health the most and yet spend the majority of their awake time at work, running errands or sitting in traffic. I’m gonna be that dissenter. Some are busy buying experiences and more possessions, I’m busy saving and investing in order to buy back my freedom.