Reading Cooking Up FIRE breaks my heart a little bit. I’ve been to Hawaii a couple of times and loved it. I want to go back really bad, but the flights are too damn expensive when the girls are out of school.
But Cathleen, I will find a way to make it work soon. Oh yes, I will…
There are approximately 476,492,292,928 personal finance blogs last time I checked. Why should we read yours?
Honestly, I have no idea. There are way smarter people out there than me. What I do is just common sense and a bit of research. Though I’ve been told I’m a fairly good cook- but most of my recipes aren’t complicated or expensive. They just taste that way. Most meals cost less than $3 per serving to make, and they are made with high-quality stuff, like beef (my husband can’t eat chicken, eggs, or farm-raised shrimp). The meals also take me less than 45 minutes to make. The rest is just common sense- at least to me. You don’t need a $1000 new phone, and for the love of dividends, just because you got a new phone, doesn’t mean your spouse deserves a new one, too! True story.
Why did you start your blog?
My cousin’s wife (who’s my friend) is always asking money questions from me. From budgeting, how to tell which is the best price at the grocery store, to investing…so I decided to write up a blog for her. Which she hasn’t read at all. Next is to do a small podcast- maybe she will listen to that? It evolved into advice for my (then) newborn son. But now, it’s fun! Plus, I get to write my true feelings in reaction to some of the questions on the FI and financial Facebook groups. We are supposed to be “polite” and “non-judgmental” about some peoples spending choices. But, really, $14000 for a Super Bowl ticket?!
Where do you live? Do you love it, hate it or just meh?
We live in Wahiawa, Hawaii, on the island of Oahu. It’s considered “country”- pretty local- lots of people know lots of people there. But that could be said about anyone in Hawaii. I mean, when I was living in DC, someone at the skating rink was from Hawaii. Turns out his cousin and my mom went to school together! Talk about a huge coincidence. Hawaii is a fantastic place to live. Not that I am biased. The scenery is beautiful, and you can pretty much talk to anyone (complete strangers!) and have a good conversation with them without them looking at you like you are insane. Food choices here are so varied and great, there’s plenty of places to eat that are on the cheap but high quality. It’s probably a budget buster, really- you could go out every day for every meal. There are so many outdoor things to do, plus we’re both from here- so we have a lot of friends and family to visit, and cultural activities to do. In the summer, I go to Bon dances- which are free community events put on mostly by Japanese Buddhist temples. Remember the Karate Kid Part II in Okinawa (which, coincidentally, was filmed mostly in Hawaii)? At the very end, they had a dance. That’s kind of Hollywood’s interpretation of the community event. Something like that. You want a better idea, look at my friend Luke’s filming of them- he’s also a drummer for one of the most popular Okinawan bon dance groups. The thing is, though, as with all real estate, location is everything. My house was built in the 60s, which is not uncommon, and is single-wall construction- and we have no AC. I actually have a split unit for my front bedroom and ran it in the summer once for 2 days maybe for 2 hours each. It shot my electricity bill up from $100 to $160! That’s super expensive just to be slightly more comfortable. But that being said, insulation is terrible in these old homes- so every single noise from outside comes inside. We hear pissed off weed whackers/mopeds, loud booming music, kids walking home from the high school. And we live about 2 blocks from the high school. So we get to hear every single game. Every. Single. One. This is not very relaxing! Even million-dollar homes are butted up right next to their neighbors! Seriously- you can hear your neighbor’s TV. 10 feet from the property line is the minimum distance a house has to be built. When you have both houses at that minimum, you are 20 feet from your neighbor. With all your windows open (remember—AC costs a bunch here!).Our house is fine (ish)- we have a bunch of fruit trees and a garden going. Do you ever have fresh lychee, tangerines, or Meyer’s lemons off the tree? It’s so damn good.
What do you do for a living?
I crush people’s dreams. Wish I could just leave it at that, but you requested actual details. I’m a patent examiner with the government. That means as an engineer, I have to evaluate patent applications and determine if the idea would work, and if someone else out there has already invented the same thing. There’s a bunch of details into getting a patent, so it’s hard to summarize it all in a little short conversation. Basically, I spend most of my day saying “no”. Of course, I have to have evidence on that, usually in the form of other patents or previously published patent applications by others. If you want more information, go ahead and go to the USPTO.gov website (there’s a section “for inventors” that might interest some). The job pays pretty well- it’s a quasi-judicial job that needs an engineering and science background since you have to understand what the applicants are saying. We also each specialize in particular technology, so it’s not a wild-west free-for-all. Mine is in oilfield technology- so most of the applicants are all large companies that spend a ton of money on research and development. They ain’t playing around in their garage. Patent examiners do a bunch of research (maybe 5-10 hours a day) and writing up their findings. We have required amounts of work to do in any pay period, which can get stressful. Add to that the fact that I work from home full time in Hawaii (I know, boo hoo me), which means up until literally today, I had to come back to the office in DC every month or so on my own dime and my own time to report in for 5 days…makes for a stressful job. The benefit was I was crashing with friends, so didn’t pay for hotel rooms, and got to see them! There are, of course, highlights. I had one case I examined that I eventually allowed to become a patent, who last year won a Patent’s for Humanities award for inventing something to help humanity. His invention,- you can look it up now, it’s publicly available for viewing- is for a low-cost way of digging deep water wells. He set up a foundation in his retirement to help pay for the building, transportation, and training to use these in places that desperately need clean water. This is the cool part of the job. With his patent, he’s able to get even more funding for his charity- and help even more people! I was a (very small) part of that!
How old are you and do you have a family?
I’m 35- husband is 40-something. We have an almost 3-year-old, and expecting another one this month. We are in for some big trouble. We moved back home to be closer to my family since we get a lot of help from my parents watching our kid. And randomly get stuff my dad drops off at our house. I have an 80’s accordion door in my laundry area. Not set up or anything. Just leaning against the wall. Because “it was expensive” when my dad bought it for his office. 30 years ago. We also have a band saw….also from my dad. Neither I nor my husband does woodwork. I guess you can count our dog as part of the family? But he’s more of the slob housemate that uses all the dishes, and eats your leftovers and yells out the window at passing by people. He really has it out for this gorgeous fluffy white malamute named Zeus. The entire town knows when Zeus walks by our yard- since Fred is a Bassett Hound. And not one that sleeps a bunch. So, really, nothing exciting or exotic about our family- just like many people, we wanted to be back home near family. Of course, in Hawaii, you have extended family, and “Hanai” family that you call Auntie or uncle or grandma or grandpa or tutu….that you aren’t even related to. Like my Hanai Aunty that’s in her 70s, who’s been FI for like 50 years!
How do you stay fit?
“Staying fit” in the sense that I do exercise, I’m guessing. I’m by no means fit- according to the BMI (bullshit mass index) I should be about 40 pounds lighter. Anyway, I walk to plenty of places. Before I got fed up with my 50 pound Basset Hound pulling me everywhere and having to poop every time another dog barked at him, I would walk him maybe 2-6 miles every couple of days. Now I just walk with my toddler down to the farmer’s market or other close-by places as time permits. We also bike (on an electric bike. The hills here are killer) with the toddler, who demands we go “Faster!”. Because that’s easy hauling him around plus a 70-pound bike up a steep hill. Before I got pregnant, I was doing kendo 1-2x a week (and before my husband moved back home, it was more like 5-6 times a week). It’s a Japanese martial art with bamboo swords. I in no way look attractive in the armor. But I get to yell at people and hit them over the head, so that’s pretty cool. I also used to figure skate 2x a week. Which you’re probably thinking “Ice skating?! In Hawai?!”. Yes- there is 1 rink in the entire State. I reduced the cost by volunteering to help teach group lessons. But, again, something about falling and hard ice or whatever has made me give it up since, apparently, it’s not safe for a preggo woman to fall. Also, the whole change of balance thing made it so that it’s probably safer to just not skate for now. In the summer I’ll start doing Bon dances. They are the Japanese community dances I already mentioned. It’s basically 3 hours of cardio. Some dances are fast, and some are slow, but you are always moving. Add in wearing a yukata (summer kimono) or full Kimono, and you are basically wearing a sweatsuit. Might not fit any of mine this year, so we will see on that front. I’m not sure if doing household chores counts here, but I do laundry and hang it up outside and let the solar-powered dryer do its magic. When you have a kid in cloth diapers, you end up doing a bunch of laundry. That’s weightlifting with all the wet clothes. Same for cleaning the house- vacuuming, cleaning up stuff, chasing a toddler that ran off with the vacuum. I’ve slowed down a bunch due to a naturally low blow pressure combined with extra blood pressure drops due to the pregnancy. After the new baby comes, it will also probably be pretty slow, too. And don’t forget grocery shopping. With or without bebe. If I know I don’t need much I just carry around a basket- bicep and tricep curls together, plus you can’t buy too much with just a basket! I am definitely one of those “I’m going to carry all the bags into the house if it kills me” kind of people. Hawaii has basically banned plastic bags and charges 15 cents for a paper bag. So I bring my own bags- made from my dad’s old Aloha shirts- that fit a ton of stuff. I can cram in $100 worth of groceries into a couple of those.
Is your goal financial independence?
If so, where are you on the journey? My goal is definitely FI. It’s my belief that retirement does not mean you stop working. It means you stop working where you hate. FI lets you work in meaningful ways- or at something that brings you happiness. My dad, for example, is a dentist. 2 years ago, he sold his practice and retired. Guess what he’s doing now? The same thing he was before, but for free. Instead of having to run a practice, he volunteers at the Palama Medical clinic that provides free medical services to underserved communities. He gets to do what he loves (the dentistry side) without all the headaches of paperwork, HIPPA, employees, rent. Eventually, when I reach FI, I want to just either work this current job part-time, work at the commissary, or work at a surf shop. Currently, I’m projected to be FI (not even counting my husband’s salary) in 9 more years. I’ve got 6 years to pay off the mortgage- though as you’ll see later, we may not pay that off quite yet- and then just stash all that $4000 per month into investments on top of what I am already saving. At the moment, we are saving about $1600/mo, and maxing out my TSP with full match, along with maxing out both our ROTH IRAs. Basically, it’s a pretty slow path to FI, compared with others. But we live in a very high cost of living. Far higher than Colorado, for example. We are also trying to have a high quality of life now, so retirement is not the be-all solution to happiness. My husband is also planning on starting a machine shop- we have pretty much all the equipment needed for it. He bought a small mill already (can you imagine the conversation we had with that one? “hey, honey, I want to buy a mill. It’s going to cost $800 to buy, and $1000 to ship it here to Hawaii”). And we have a lathe. That I found free being thrown out down the street the same week as Christmas last year (but, shhh….don’t tell anyone I got it from the bulky trash pile. Apparently in Hawaii it’s illegal to take stuff that’s being thrown out). Turns out that this lathe is the exact same lathe my husband learned how to machine on when he was in the Army, stationed in Korea. He looked up the serial number and saw the last entry for it was with his old Staff Sargent. It must have been decommissioned right after he PCS’d back to the US, and ended up in Hawaii, as the closest US depot, then sold at one of those Military surplus stores. He fixed it up, got a new motor for it (that was being thrown out at his work…shhh about that one, too), and found they were throwing out the exact paint that it was originally painted in. Obviously, this machine was meant for him. And he was lucky to have a wife that knows what a lathe (lying flat on its side, btw) looks like! Wait…what was the question? Oh, right. If I have the time, I’d be able to help out with machining, since my undergrad degree was in Industrial engineering, I had to learn how to machine. Or I could run the website and blog.I’ve also been working on a side project, helping small local businesses learn how to manage their own websites, do their own social media- for free. Actually, they have to pay it forward to someone else. This is all to get me more into managing social media and websites for businesses. So far, I’ve helped a local massage therapist, a ceramic artist, a surf school, and currently working with a personal chef/concierge and a wholesaler who pretty much made every mistake in the book and is starting all over again. All of these projects can continue on when I’m FI.
Evil genies aside, what is your investing strategy? Stocks? Index funds?? Real estate??? Crypto????
At the moment, it’s pretty much all index funds and stocks. I’m working on real estate, but in Hawaii, it’s very hard to cash flow anything. Currently, my strategy is to find a new place to live in a quieter neighborhood (hint: don’t move within 1 mile of a high school). We’ll probably keep the current house, and rent it out. Market rent is about $2000, and current mortgage is $2100. Obviously, it’s not cash flowing, yet. BUT! We (and by we, I mean “I”) just asked for our mortgage bank to re-amortize the loan. We’ve been paying down the mortgage pretty aggressively, as we’ve done for pretty much every single loan we have ever had. For the last 3-4 years, it’s been an extra $2000 towards the principal. That parlays into more than $120k of principal reduction in the first 5 years of our mortgage. So for those of you who don’t know, a mortgage re-amortization or recast is basically the bank taking what remaining balance there is and amortizing that over the rest of the mortgage period. The terms remain the same, and the interest is the same. In my case, the mortgage balance is $220k for 25 more years at 4.625%. Oppose this with the original amortization schedule of $348k for 30 years at the same rate. It boils down to now having mandatory monthly costs of $1500 PITI (principal, interest, taxes, and insurance). No, it’s not technically cheaper because I still paid all that money in, but in essence, it’s something flexible where if we are eve in a jam, our monthly mandatory expenses have been reduced by $500. The best part? $150 fee for all that instead of thousands for a refinance at a likely higher percentage. On top of that, if we rent this place out it will now cashflow. It’s almost like getting a tax-free return of 4.625% on that money. Given that we likely pay about half in taxes, we’re looking at needing to get a guaranteed return of 9.25%! Although in reality, it’s still money we spent on somewhere to live, so it’s really not like “gaining” at all. Just saving some money. Much like getting the steak on 50% off is not the same thing as having that same money put in your wallet. So back to real estate investing- we would now have some options:
1. Rent out the home and get a HELOC on 80% of equity at a very very low fixed rate for a few years to buy additional property.
2. Rent out the home and refinance (and pay a fee) to get cash out to buy more properties.
3. Sell the home, use some of the equity for a down payment on another house, and the rest to buy a few properties outright, or get mortgages on those.
4. Same as any of the above, but buy a place we can house hack. BiggerPockets has been very useful in learning about all these options. I highly recommend listening to their real estate podcast, and the money show, which I believe Mrs. 1500 co-hosts (really, I’m not saying this to kiss your butt. I’ve been listening to them before I realized the two of you were related).
What is your favorite money management tool? (Yes, you can include your affiliate link.)
I’m going old-school here. Excel. I have spreadsheets for all the things. Mortgage payoff, property evaluation (including very conservative 40% expense holdbacks for CAPEX, repairs, etc.), yearly budgets, position size calculators for individual stocks. Hell, I even use Exel for calculating how much leave I can use on a particular vacation or maternity leave. Excel isn’t super hard to learn- especially just for financial calculations. In undergrad, we had to use them to graph different testing scenarios, and to fit-tests. So using addition, subtraction, percentages, multiplication, division, and averaging is pretty easy. I am probably the worst blogger out there when it comes to monetizing- I need to get in on that train and recommend something like YNAB or whatnot that pays referral fees. But I honestly just use Excel or the calculator.
What is the best thing you ever bought? The worst?
The best thing I Have EVER bought was an automatic rocking bassinet. On sale, it was $180. The first night we had it (after having a 2 week old) my husband asked me “how much was this?”. I said “$180”. “Worth every. Single. Penny”. I did not realize how very important sleep is until I wasn’t getting it. The worst thing I’ve bought? Hand’s down was a very cool tricycle on Indiegogo. Not to slam them (but really, they don’t have better protections for “backers”?), but I paid almost $2000 plus shipping for this tricycle that was supposed to have a bucket for the kids and a canopy for them, along with an electric motor….only to have the company mid-full-scale-production go out of business. Absolutely no money back at all. Maybe it’s not even something I’ve bought- since I never received it! I’ve had to learn to let it go- it’s a sunk cost that I will never recover.
Do you track your spending? If so, how?
Yeah, I do mental calculations. And I put almost all purchases on my credit card, which I check at least weekly. No-spend months/weeks and (strangely enough) the Kon Mari method- which I don’t apply to my actual home- has really helped. I kon mari all my purchases that are not food. “Do I really need this? Does this spark joy?”. Most of the time, even if its dirt cheap, it doesn’t.
What is your worst money mistake?
Not learning about investing. Fortunately, I took the less risky path of “since I don’t know what I am doing, I’m putting everything into bonds”, rather than “I’ll just dump everything into stocks, and hope it comes out”. Started my first TSP/401k contributions when I started working for The Man, mid-2007. You can probably tell how freaked out I was about doing any investing in stocks by 2008. Luckily for me, since most of my TSP contributions were in bonds, I didn’t actually lose any money. However, since I was still afraid of the stock market, and did not educate myself about it, I remained in bonds for far longer than I should have. Now I have a different balance in my TSP.
What is your splurge?
Biggest splurge is buying cars brand new. Yes, I am aware of the “loses half its value once you drive off the lot” concept. But since I’m not the one fixing them, my husband is….sometimes you do it just to keep the peace. That being said, I’ve paid for pretty much all of our cars with cash. The only one I did not was our Jetta when I was first working for the patent office-was just out of grad school, and my current car had a cracked engine block. Not pretty. We paid it off in about 2 years. Also, if your husband (who swore he would own his blue Dodge Ram truck until he died) trades in his beloved blue Dodge Ram so you can afford a new car…he’s a keeper. And we got a loan, paid off in 4 months, for the used Nissan Leaf, so we could get the extra incentive $. The other two cars were paid in full at time of purchase. How did we do this? By always having a car payment. Sure, the $450 wasn’t going to the lender, but it was going to us in a savings account. • Your best friend tells you that he just got a raise at work and is going to buy a new car to celebrate. His current car is in perfect working order. How do you react? I would probably slap him. But it’s over the phone, and that’s apparently “illegal” because it’s “assault” or whatever. So I would sternly tell him/her “no- unless you have the cash to buy it right now”. That being said, I have never had a friend that has done this to me. I’ve had one that bought a new Honda Civic- because her SUV was too big, and she negotiated the crap out of it, and then sold her SUV privately for not too much less than the Civic cost. But it was a very long thought out process. I guess I don’t have any financially impulsive friends. Except for my cousin (see above). She’s one of those who is a shopaholic. She works part-time right now, but for the last few years was a stay at home mom. While we were both on maternity leave, we went out and did stuff- I found free things to do, to keep her out of the mall. And in Hawaii, there are a ton of free things to do.
What did your parents do to raise you to be financially smart?
My mom took us to the grocery store- she always did her grocery planning in front of us. So we knew about what was a good price, how to do cost per unit comparison, when to stock up on good buys, and how to plan meals around it. We also had to learn how to do basic things for ourselves- like clean the house (though you can’t tell by looking at my house. I just don’t have the talent), sewing, cooking, doing taxes, paying bills. She also had us doing homework during school breaks on our own. Things like reading Smithsonian or National Geographic articles, finding words we didn’t know, and writing stories based on those words. One year, I was a smart ass, and had to get 10 words and write a story using those words. I wrote “In English class today, we learned about these 10 words:______”. End of story. Boy, did I get it. I think the major thing my mom did to help us (or at least me, I don’t know about my sister and brother) is to talk about the family budget around us. We also each had a sit-down talk when we were I think sophomores about college financing- how much she set aside and could afford per year, how we were expected to get X amount in scholarship to make up for the cost, if we wanted to get into somewhere more expensive. At no point were “college loans” mentioned. I really had no idea that was even an option when applying for schools. When I started applying, I only went for places that had programs I was interested in and that I had the highest likelihood of getting in with scholarships of some sort. Clearly, MIT was out- my crappy 3.8 GPA wasn’t going to cut it to get a scholarship with them. She “encouraged” me to get a job between high school and college, and to work during college. My first full-time job was at an FBO (fixed base of operation) that handled private jets that come into Hawaii- providing concierge services, landing logistics, fuel, and A&P mechanics. That was a super swanky job, though I originally was hired to build their customer database, I was so efficient, I ended up helping out in the concierge side, the accounting department, and even with sales calls. If you ever have a chance to fly a corporate or private jet on someone else’s dime, do it.
If your 18-year-old child told you this: “Parents, I want to go to a $250,000 school and study doorknob design,” what would you tell him or her?
You better have a scholarship.
Do you pay your kids an allowance? Why or why not?
I do not. He’s almost 3. He can only count to 3 (recent development as of last week), and just identifies round things as coins. He does get a coin for cleaning up his toys when I need to vacuum. Recently he’s been negotiating with me about that. “You get a coin if you pick up all your toys and put them in the basket”….”how about….2 coins?”. He’s once tried to trade a half-eaten Dorito chip for a full slice of chocolate cake, when he was about a year and a half old….so he’s probably going to be a pretty damn good negotiator when he’s older. We also look for coins when we take walks. Last week he found 16 cents!I’ll probably take on the same approach my mom did. We got an allowance to cover everything except food, school supplies, and clothing. This covered bus fare, lunches, and school activities. That means if there was an event I wanted to go to, I had to walk home and pack lunches. Let me tell you, at $1 for a bus ride, and $1.50 for lunch, it took a lot of walking home and home-brought lunches to pay for a $20 tournament entry. You want a new CD player (yes…I’m THAT old)? You better be a take-lunch- to- school and walking-home-every- day fool.
What is the most beautiful place you’ve ever seen?
Hand’s down- Hawaii. The most beautiful spot in Hawaii is Ho’omaluhia botanical gardens- at the very end/top of it (which you can drive or walk to), is a bench that sits over a ledge that overlooks the mountains and the rest of the park. Watching the clouds roll over the tops of the Ko’olau mountains, sitting with the birds, under the shade of a tree. We took wedding photos there. My grandparents used to take us up there when we were kids. It’s a timeless view. This is just our secret, though. Hawaii is full of secret spots, that get ruined for locals since the secret gets out and it gets overrun with tourist. I just go there with a home packed picnic and sit there for the afternoon and relax.
What is one thing you firmly believed 5 years ago that you no longer believe?
That real estate is a terrible investment. This is coming after the biggest real estate crash in history. After educating my self some, it’s not that all real estate investment is bad, it’s the not doing research that is bad. (Again, Bigger Pockets has really helped me change my mind).
What is something you read that changed your life?
This is going to be so cheesy, but it’s “Rich Dad, Poor Dad”. For some reason, I just never read it until a few years ago. In the back of my mind, I’ve heard negative things about it, so have resisted. It’s available in the library- and really, the only reason I read it was that Robert Kiyosaki is from a small town in Hawaii, so I was curious. His perspective, whether genuinely gained or not, is very eye-opening. Your house is not an asset- only things that put money in your pocket are assets. Business owners have many tax advantages. Life-long learning is important. There are always two sides to the coin- try to look at both first before making a decision. And, most importantly: don’t have a poor person’s mentality- saying “its too expensive. We can’t afford that”, think in a rich person’s mentality “how can I afford it?”. These ideas are hugely different from what I was raised with. Though he does not emphasize it, being frugal is a foundation of all the investing and education he’s supporting. If you don’t have money to start, and the discipline from being frugal, then how can you get anything else to be successful? • Elon Musk: Crazy megalomaniac or a brilliant guy who is changing the world?Pretty sure Elon Musk is a bit of both. Some of the things he’s publicly said….whew! Doozies. But have you seen the patent’s that they are putting out?! A whole bunch of revolutionary things. It’s one thing to say “we are going to do ____”. It’s another to forge ahead with specific goals and action plans.
Who is your favorite leader in business today?
It’s got to be Gary Vaynerchuk. He strongly advocates hustle. He built a small family-run liquor store into a multi-million dollar business- by putting them on the internet, then doing Youtube videos reviewing wine. He’s always keeping up with the latest social media available for business owners to use. Most of them are free- just take a bunch of hustle and passion. The reason for doing this 10-questions with Mr. 1500 is one of Gary Vee’s hustle ideas- to reach out to other platforms and contribute something to them. Aside from the fact that I greatly enjoy your blog. Honestly, I could have just 1 person read my blog (even my mother doesn’t read my blog), and would be happy. I haven’t in any way monetized (with 2 exceptions, and they were just for shits and giggles).
Thank you Cathleen for your answers today!
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