Ask the Readers: Are you going anywhere fun this summer?

Bridalveil Fall at Yosemite

Yosemite. Is there a more beautiful place on earth?

Hi there, Mrs. 1500 here.

We have been planning a big trip for early summer, and I wanted to know if you are going anywhere fun?

But first, let’s go back to last week’s question, where I asked you What does living below your means really mean?

If you recall, I had recently had a conversation with a neighbor, who is quite the spendy person. She has a new car, new clothes all the time, drinks expensive wine, works out at the tony health club in the tony city down the road, has hired out the yard work, housework, and even has a personal chef 5 nights a week because she is too busy being a stay at home mom to handle the cooking while driving the kids to their 500 after-school activities. Yet she claims she lives below her means.

So I started thinking about what that actually means. I guess technically, she is living below her means if the household income is $100,000 and they only spend $98,000.

Reader Scooze started us off with the sage comment, “Clearly it’s subjective. I save 25% of my salary and wish i could save 30-40%. But I’m too set in my ways, I guess. Haha. I’m sure there are others who would wish for my numbers.” I’m sure there are people who wish for those numbers. Thanks for reading, Scooze!

Jason over at Islands of Investing agreed with me that it is “one of those things that seems obvious until you really think about it!

For me, if you’re living the lifestyle you really want (i.e. doing work you care about), and spending less than you earn, then you’re living below your means. If you hate your work and are only doing it for the money to pay for the huge mortgage or car loans, and are only just getting by, then you probably have a long way to go before you’re truly living below your means.” Continue reading

Posted in Ask the readers, Mrs1500 | Tagged , , | 50 Comments

The Mr. 1500 definition of living below your means

Life is good.

Life is good.

When Mrs. 1500 posed the question yesterday about living below your means (I’m going to refer to it as LBYM from now on), I admit that I hadn’t thought much about it either. I pondered the question for a bit and came up with two criteria you must meet if you want to define yourself this way:

  • No debt
  • Living on less than you earn

I admit that my view is very binary, but I don’t think that you can consider yourself to be LBYM if you have debt. On top of that, you must be bringing in more than you spend.

What about me? Continue reading

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Ask the Readers: What does living below your means really mean?

BackNColo suggested that I buy a Tesla X with the hover option...

BackNColo suggested that I buy a Tesla X with the hover option…

Hi there, Mrs. 1500 finally back at the helm, after a couple of weeks off.

I had an interesting conversation with a neighbor, who thinks she lives below her means. What does that really mean?

But first, let’s go back to last week’s question, where Mr. 1500 asked how you would invest $275,000.

Chris from Flipping a DollarFervent Finance, Reader Danny, BackNColo, The Roamer, Mr. FSF, Reader Jenni and Reader G-dog all said VTSAX, and then leave it alone to grow.

BackNColo also suggested a Tesla Model X with hover mode. Thanks, but we already have a Model X, which is what the Honda Element was code-named before it came out as the Element. Continue reading

Posted in Ask the readers, Mrs1500 | Tagged , | 59 Comments

10 Questions with The Goblin Chief

Today is the 6th edition of our new periodic guest post series called 10 Questions. We have a list of 17 NEW questions we pose to fellow financial bloggers, and they are free to pick and choose 10 or answer all of them. Let us know if you would like to be featured in a future edition of 10 Questions. (If you have already answered the first set of 10 questions, please feel free to answer these new ones.)

Today, we feature the Goblin Chief and his responses are a worthy read. His answer to the question, ‘Do you enjoy writing?’ particularly resonates with me. The Chief and I seem to write for the exact same reasons and perhaps we’re kindred spirits. Well, that and the love of biking, hiking and board games.

Screen Shot 2015-04-18 at 9.38.22 AM

Tell me about your blog and why it’s great.
The Goblin Chief is more than just a personal finance blog. Sure, it covers my family’s journey to FI, but I share a lot about our homeschooling, gardening, recipes, and even a little bit of serial fiction. Overall, I try to focus a lot less on advice or tips (there’s a lot of PF blogs out there to cover that) and publish thought-provoking articles about eating differently, living more sustainably, all while living frugally.

Tell me how you’re going to change the world with your blog (dream big or don’t dream at all!).
Honestly, I write for an audience of one, but I do seem to influence a few readers. If I could influence a whole bunch, I’d love to see society take a step back from rampant consumerism based on extracting as much money or resources, and return to a life-serving economy where we try to leave our individual parts of the world a better place than we found it.

What post are you most proud of and why?
I think an older post called It All Comes from the Sun best captures my mission of leaving the world a better place. I recently re-posted it because my readership has grown quite a bit since I first wrote it. I try to be thought-provoking without being preachy, because if you meet me in person I’m a very laid-back person despite my passion. Continue reading

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Thursday Rant: Why my neighbor would never marry me

Ask any well adjusted person what they want to do with their last days on Earth and they will all say the same thing; spend it with loved ones. This is so obvious when our time is short, but not so obvious when we are young and our lives seem endless and infinite. However, that doesn’t make it any less important or relevant.

My neighbor doesn’t like our lifestyle much

Life is beautiful and wonderful. Appreciate every second of it.

Life is beautiful and wonderful. Appreciate every second of it.

We love our little neighborhood. One of the things we enjoy most are little get-togethers with neighbors on our street. Almost every week, we’ll have a planned or spontaneous gathering were we’ll sit around and chat for a while. The kids ride bikes or draw pictures with chalk on the driveway. In the summer, we watch movies in a backyard with a projector and a bed sheet.

A couple weeks ago, some of the ladies in the neighborhood got together. Mrs. 1500 couldn’t make it due to a previous obligation. At some point in the gathering, the ladies started talking about each others’ husbands. It eventually got back to us that one of the ladies said this:

I would never want to be married to Mr. 1500. He doesn’t let Mrs. 1500 buy anything. She shops at thrift stores! Also, they seem very cheap because they do all the work on their home themselves. We pay others for that stuff.

This irritated me for about 3 seconds and then I let it go. Below are my thoughts.

I don’t make Mrs. 1500 shop at thrift stores

First of all, I hate the word shopping. We go buy something when we need it, we don’t shop.

Second, Mrs. 1500 is free to buy stuff from wherever she wants. If I had to tell her where I wanted her to purchase things, I wouldn’t have married her in the first place. She enjoys thrift stores, garage sales and even the trash. Fine by me. If she brought home $500 purses, our marriage wouldn’t have lasted long.

We’re not cheap

Continue reading

Posted in Rants | 69 Comments

How I’m investing $275,000: CORRECTION

This picture has nothing to do with anything in this post.

This picture has nothing to do with anything in this post.

In yesterday’s post, it appears that I was a little too hard on the Contrafund. Dividend Growth Investor pointed out that the chart I used from Yahoo Finance didn’t account for dividend reinvestments. Check out this chart instead. This article from the Wall Street Journal supports what he is saying. The only fair thing to do is to include the Contrafund in my experiment. Since I had my 401(k) money in the Contrafund for years, it only seems fair to use it as a benchmark as well.

Jason from Dividend Mantra also suggested that Schwab US Dividend Equity ETF (SCHD) is a better fund for a dividend growth strategy, so I replaced VIG with it.

So, my portfolio now includes $30,000 in each of these 7 funds:

Ummm, welcome back Contrafund. Sorry about all of those mean things I said about you. Here is your chance to prove yourself.

Ummm, welcome back Contrafund. Sorry about all of those mean things I said about you. Here is your chance to prove yourself.

I like the changes:

  • Dividend Mantra Jason is a smart guy and a dividend fanatic, so I’d rather go with his suggestion of SCHD over VIG.
  • It will be fun to see how the actively managed Contrafund does against the passive gang of 6.

Tune in for the first update on May 12.

Oh, and if you did the math, you know that I have $65,000* left over. I’m not sure how or when I’ll deploy that yet. You’ll be the first to know when I do though.

 

*$65,000 is about what an entry level Tesla costs. Tempting, but I’m not that crazy.

Posted in Saving and Investing Money | Tagged , , | 17 Comments

What I did with my $275,000 401(k) rollover

ilovetechnologySo, after 10+ years, I kept my job, but had to leave my employer. That doesn’t make sense, does it? It is a long story that is explained here. I was OK with it. I didn’t like them much and they didn’t like me. See ya’ old company and thanks for all the fish 401(k) match!

One of the great benefits of moving on was that I was able to finally move away from the former employer’s crappy 401(k). It was filled with funds that had ridiculous fees. 2%/year? Come on now. The best choice was the Fidelity Contrafund. This fund isn’t as terrible as some, but it isn’t great either. The chart below shows that the Contrafund has been thoroughly torched by the S&P 500. Good-bye Contrafund. Better luck to you.

UPDATE: Dividend Growth Investor pointed out in the comments that I may have unfairly dissed the Contrafund. Apparently, the chart I used from Yahoo Finance doesn’t account for dividend reinvestments. Check out this chart instead. This article from the Wall Street Journal supports what he is saying. The only fair thing to do is to include the Contrafund in my experiment. Update tomorrow.

Screen Shot 2015-04-07 at 5.23.24 PM

Vanguard

Continue reading

Posted in Saving and Investing Money | Tagged , , , , | 52 Comments

Ask the Readers: Lord of the FIs

Please join me on FIsland

Please join me on FIsland

Mr. 1500 here again for at least one more Monday…

Last week, I complained about my life. I’m busy as all hell and am not enjoying the way things are going right now, so asked what I should do.

Your comments were pretty great. From them, I deduced two things:

  • You’re all a lot like me: I have an idea though to help us all out. Come join me on FI Island (FIsland?)
  • I need to calm down.

Continue reading

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Thursday Rant: Wearing a dress and singing opera

On Monday, I complained a bit about my life. This post is a continuation of that. I’ve been doing a lot of thinking this week. Time for a change in direction.

My job can be extremely stressful. Like lose 10 pounds in a week because I can’t eat stressful. Nausea inducing, stay awake all night stressful. I’m a programmer, but that isn’t the stressful part. I write code for a medical device that could kill someone if I screw up. I wrote some of the most critical code for the system. When I wake up in the middle of the night sweating, this is what I’m thinking about.

While all of this sounds quite awful, an extremely stressful period a couple years ago set this blog in motion. I was having an incredibly bad week and I googled something like, “how can I retire early.” I found the Mustache Guy and the rest is history.

Work >> Life?!?!?

Some people go out to eat on dates. We go to Home Depot.

Some people go out to eat on dates. We go to Home Depot.

Anyway, this past Monday, I had a very peculiar feeling that I’ve never had before. As I sat down in front of the computer to begin my work day, a sense of relief and calm washed over me. While my job isn’t always super stressful, I’ve never actually felt relaxed when I fire up the computer to log in to work. The feeling was a symptom of my life.

The weekend had been completely filled with activity. Mrs. 1500 and I had a date where we went to Home Depot. We worked on various projects. We… I can’t even remember what else we did now.

My problem is that I can’t stop. (Mrs. 1500 note: Those are my words. I tell him all the time that his problem is that he just can’t stop. He can’t relax. I want him to relax. I beg him to relax. He puts all this pressure on himself. If any of you have any advice for me on how to get him to just stop, I would happily take it.) I wake up at 5am and instantly, everything I have to do starts cycling through my brain. There is no going back to sleep. I must work. No other choice.

What the hell is wrong with me?

Continue reading

Posted in Rants | Tagged , , | 67 Comments

Performance Update 27/50: March badness and saving like a Wookie!

My main goal is to build a portfolio of $1,000,000 in 1500 days with no debt*, starting from 1/1/2013. Every month, I provide an update on my status. My goal for 2015 was to get my portfolio up to $874,353. Because we saw exceptional returns in 2013 and 2014, I have already accomplished this. Let’s take a look at March.

Woweee!!

Woweee!!

A scene from the upcoming Star Wars 7.

A scene from the upcoming Star Wars 7.

March was a transition month (Translation: transition = crap). I finally started my exit from the Apple Cart. At the same time, I made my first contribution to my new Solo 401(k). Let’s talk numbers before I get into all of that.

I started the month at $1,029,877 and ended at $1,006,450 for a decrease of $22,427. $20,000 of this loss was due to debt I paid off (more below). Even without the debt payoff, it was still a losing month. They can’t (and shouldn’t) all be winners, so I don’t lose sleep over stock market farts. The long term trajectory is upward, but not always so in the short term.

Here are the numbers as of 3/31/2015: Continue reading

Posted in Performance | Tagged , , | 38 Comments