Financial Freedom Blog Post #9

Dear Reader,

In this post, we will go over Grant's 11 questions that should be applied to every purchase.

Did you think I was going to list a different book? Sorry to disappoint you: Financial Freedom: A Proven Path to All the Money You Will Ever Need.

Here I've made a very handy chart for you:

			Vacation	Snack	Fast Food	Meal Out	Gift
1	How happy will this purchase make me?		10	8	10	10	10
2	How much money do I have to make to afford this?		$3,000.00	$10.00	$15.00	$100.00	$10.00
3	How many hours of my life am I trading to afford this?		145.42 hours	0.48 hours	0.73 hours	4.85 hours	0.48 hours
4	Can I afford it?		Yes, if I save.	Sort of.	In short, no.	Occassionally.	Yes.
5	How do prices compare in terms of percentages?		$3,750.00	$12.50	$18.75	$125.00	$12.50
6	Can I get it for less or trade for it?		Depends.	Sometimes.	Yes.	Possibly.	Sometimes.
7	How much am I spending on convenience?		Not a lot.	90%	90%	75%	25%
8a	How much will this cost me each year?		$6,000	$100	$100	$500	$500
8b	How much would this cost me for the rest of my life?		$420,000	$7,000	$7,000	$35,000	$35,000
9	What is the per-use cost of this item?		N/A	N/A	N/A	N/A	N/A
10	How much will this money be worth in the future?		$12,000	$200	$200	$1,000	$1,000
11	How much time (freedom) is this buying me in the future?		1 year and 60.3 days	7.2 days	7.2 days	36.1 days	36.1 days

Let's break it down.

Question 1: I rated on a scale of 1-10 how happy these purchases make me. I tend not to spend money on things that won't make me happy.

Snacks are a lower score (8) because sometimes I buy snacks that end up tasting bad. You live and learn!

Question 2: these are rough estimates.

Question 3 builds on the previous action item from Financial Freedom. You need to know your effective after-tax rate. As a reminder, mine is $20.63 . Since I spend about 46.5 hours per week on work items, a $3,000 vacation costs me about 3.13 weeks of work.

Question 4: Vacations should be saved for unless you are wealthy. Snacks seem low-cost, but there is a danger to your health. Fast food is incredibly bad for your health. This isn't something I recommend anybody partake in. Meals out are expensive, but worth it. I can usually afford something like that. Gifts are almost always worth it.

Question 5: This is the price after tax. It is alarming that vacation gets almost a third of the price added to it!

Question 6: I imagine you could barter sometimes for a vacation, but bartering, say, a flight to Japan is probably very difficult. Snacks could probably be bartered. Fast food you can definitely get for less (right now, anyway) with all the fast food apps they are releasing. Similar to snacks, you could probably barter meals out. Gifts can sometimes be bartered depending on where you get them from.

Question 7: Making your own vacation is very difficult. I can't pilot a plane to Japan (nor anywhere else). I could make a staycation in NYC, but I don't think that answers the question. The other percentages are rough estimates. Snacks I could prepare at home and bring around. Fast food - I could make a burger at home. I think it'd be more money (though it'd probably be healthier). You can't beat the convenience though. Meals out - sometimes I could attempt to copy this at home (badly), and sometimes I can't. Gifts - I'm limited to making only certain gifts.

Question 8a and 8b: These are rough estimates.

I just want to take a quick interlude to say I've got this song on repeat: Boy & Bear. It's by Pogo, who is this amazing artist.

Okay, back to the questions.

Question 9: So, you could argue vacations, meals out and gifts are multi-use in terms of 'memories,' (I mean theoretically we could do this with anything, like snacks and fast food too, right?) but I don't think it's legitimate so I just said "Not Applicable" to all of them.

Question 10: At a ROI of 6% and inflation calculated at 2.5%, numbers will roughly double in 12 years (how fast I could probably retire). All in all, I'm pretty happy with these numbers! Though if we go back to 8b, man, that is a killer! Almost half a million going forward? But you know what? I would say it's worth it. I really feel like I've lived, you know? :) I mean, I've seen the pyramids in Egypt, ridden in a hot air balloon over the Valley of the Kings, I've seen Abu Simbel, I've seen the Great Wall of China, gone to Machu Picchu, hugged a llama (okay if you want to split hairs it was technically an alpaca). I've eaten snail soup in Beijing, stayed out all night in Tokyo, eaten early morning sushi in Tsukiji, scuba dived in Thailand and Okinawa, eaten soup curry in Hokkaido, thrown Bizen pottery in Okayama, loved and lost, loved and gained, eaten KBBQ and cold noodles in South Korea, eaten special medicinal chicken in South Korea, made mosaic art in Heyri Art Village, thrown pottery in Korea, made glass marbles in Corning, cut flip flops in Okinawa, blown glass in Okinawa, gambled in Niagara Falls (that was actually incredible - 10/10 would do again), gambled in Las Vegas, seen the Golden Gate Bridge, seen the Grand Canyon, seen the Eiffel Tower, the Notre Dame (pre-fire, it's terrible what happened to it) and the Louvre in Paris, eaten cheese in Paris, eaten crepes in France, eaten gelato in Florence, Italy, been to Venice, Milan, Turin, eaten a danish in Denmark (it's delicious - also, they don't call them danishes lol), seen the Northern Lights in Iceland, spent Christmas in Norway, gone above the Arctic Circle in Tromso, eaten mangoes and dumplings for breakfast in Taiwan, eaten Din Tai Fung in Singapore, been credited in a movie, made gelato, made chocolate in Peru, made dumplings in China, seen BTS live in concert, seen Phoenix, Skrillex, Björk, Electric Six, Feist, Marina and the Diamonds, the Weakerthans, Tycho, Run River North, so many musical artists live, God, just so, so, so much stuff. I think it's all worth it. Keep living. Keep experiencing.

Question 11: Seriously? No regrets. See above.

Phew. I'm exhausted!

Thanks for making it this far.

What are some things you've done that have made you feel alive?

Was it worth the money you spent on it?

What's one thing you regretted spending money on?

Leave your thoughts in the comments below!

Good night.

Until next time, I remain:

Your faithful,
Into the FIRE

Financial Freedom Blog Post #8

Dear Reader,

In this post, we will tackle my actual hourly rate.

It's not a surprise (or it shouldn't be) but if it is: Financial Freedom: A Proven Path to All the Money You Will Ever Need.

First, let's calculate the costs and benefits of my work.

Costs of Work	Number of Hours	Per Week	Per Year
	Working	35	1715
	Getting Ready	1	49
	Commuting	7.5	367.5
	Traveling (for work)	0.5	24.5
	Shopping	0.5	24.5
	Relaxing/Detoxing	2	98
	Total Hours		2278.5
Benefits from Work	Estimated Benefit	Per Month	Per Year
	403(b) Match	$540.49	$6,485.88
	Free Entertainment	$100	$1,200
	Free Food	$50	$600
	Vacation	$234.39	$2,812.71
	Sick Time	$234.39	$2,812.71
	Total Additional Benefits		$13,911.30

So, if you've read Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Fully Revised and Updated for 2018 or Financial Freedom, then you know they both state your hourly rate is much less than it actually is.

They say because you spend time preparing for work, detoxing from work, buying work clothes, etc, you actually spend a lot more hours than just 35 (or 40, or 50) hours per week at work.

However, I think there can be a lot of benefits from your work too. Life a 403(b) or a 401(k) match - that is income that isn't counted. Or, from my work I receive tickets to free plays, musicals, and movies. Free food is another one.

What about being paid to go on vacation? Or being paid to be sick? I believe those are important benefits that should be counted as well.

Next, let's calculate my effective hourly rate pre-tax:

Salary			$62,665.35
Effective Hourly Rate: Salary/Total Hours per Year (pretax)			$27.50

Next, I calculated my effective hourly rate post-tax:

Annual Tax Rate (Federal and State)			25%
Effective Hourly Rate: Salary/Total Hours per Year (after-tax)			$20.63

Why did I calculate post-tax? There is a way if you retire early that you can minimize or eliminate your taxes altogether. So I felt that pretax versus post-tax was valid.

A lot of FIRE community members continue to "work" in their retirement. I imagine they still pay some form of taxes, but they can probably control the amount they pay. Furthermore, their income isn't necessary, so even if it is being taxed, it's probably an additional bonus that they don't need.

Next post: I'll break down Grant's 11 questions he says you should apply to every purchase and apply them to two different purchases to give you an idea of how I would work through his questions.

Have a wonderful night,
Into the FIRE

Financial Freedom Blog Post #7

My Dear Reader,

It doesn't look like I can recover my FFBP#3. I know. You must be crushed. Alas, we must move on.

We are finishing up the action items from Chapter 4.

You know it, why do I say it, but it's here: Financial Freedom: A Proven Path to All the Money You Will Ever Need.

This action item totals up our/my liabilities. I didn't include Mr. Into the FIRE's liabilities. Besides our shared mortgage, he doesn't really have any as he pays off his credit card in full every month. Actually, I pay off my credit card in full every month too, but I decided to include it here.

Description	Amount Owed	Interest Rate
Credit Card 1	$1,565.80	N/A
Mortgage	$289,274.93	3.25%
Total	$290,840.73

Now I shall move onto action items from Chapter 5.

The first step is figuring out your savings rate.

Please note these numbers are rough estimates.

Total Saved Per Year	$25,540.49
Income	$48,754.05
Savings Rate	52.39%

Next post: Calculating my "real" hourly wage!

Have a good night,
Into the FIRE

Financial Freedom Blog Post #6

Hi :)

We are doing an action item from Chapter 4.

Do you remember the book by now? Ha, if you don't, it's: Financial Freedom: A Proven Path to All the Money You Will Ever Need.

This action item totals up our/my assets. I didn't use Mr. Into the FIRE's assets, except for the co-op, which we jointly own.

The next post will deal with our liabilities.

	Bank Accounts		Investments		Real Estate		Valuables
	Description	Value	Description	Value	Description	Rough Value	Description	Rough Value
	Credit Union 1	$1,050.00	Roth IRA	$62,319.06	Co-op	$580,000.00	Jewelry	$4,359.00
	Credit Union 2	$5.59	403(b)	$88,173.48
	Checking 1	$1,493.85
	Checking 2	$75.18
	Checking 3	$362.52
	Savings 1	$747.43
	Savings 2	$511.00
Totals		$4,245.57		$150,492.54		$580,000.00		$4,359.00
Total Assets	$739,097.11

Also - I noticed my FFBP #3 has disappeared!! :( I will do my utmost to get it back up! Stay tuned!

Thank you for reading!

Sincerely yours,
Into the FIRE

Financial Freedom Blog Post #5

You just can't get rid of me!

I'm back again...

It's out of the kitchen and Into the FIRE.

Let's do it:

4) What is your annual, monthly, weekly and daily savings goal?

Again, we will be using the book Financial Freedom: A Proven Path to All the Money You Will Ever Need.
So, one of the great things about reading Grant Sabatier's book is he provides these great extras for you to use to answer some (if not all) of his action items!

I've used his calculator here to answer question 4) from Chapter 3.

Year	Annual	Monthly	Weekly	Daily
1	$737,186	$59,805	$13,728	$1,960
2	$353,080	$28,644	$6,575	$939
3	$225,189	$18,269	$4,194	$599
4	$161,353	$13,090	$3,005	$429
5	$123,137	$9,990	$2,293	$327
6	$97,732	$7,929	$1,820	$260
7	$79,646	$6,461	$1,483	$212
8	$66,136	$5,365	$1,232	$176
9	$55,675	$4,517	$1,037	$148
10	$47,349	$3,841	$882	$126
11	$40,575	$3,292	$756	$108
12	$34,964	$2,837	$651	$93
13	$30,249	$2,454	$563	$80
14	$26,236	$2,128	$489	$70
15	$22,786	$1,849	$424	$61
16	$19,792	$1,606	$369	$53
17	$17,174	$1,393	$320	$46
18	$14,869	$1,206	$277	$40
19	$12,827	$1,041	$239	$34
20	$11,008	$893	$205	$29
21	$9,381	$761	$175	$25
22	$7,919	$642	$147	$21
23	$6,599	$535	$123	$18
24	$5,406	$439	$101	$14
25	$4,321	$351	$80	$11
26	$3,334	$270	$62	$9
27	$2,433	$197	$45	$6
28	$1,609	$131	$30	$4
29	$852	$69	$16	$2
30	$158	$13	$3	$0

Now, this chart really astounded me. I have a way to make $4.08 a day. If I just put that into my savings, it can really help me. 

It takes a whole two years off the amount I can retire! Now, granted, I would have to invest that money, which with fees, seems unlikely. But it's very cool to think about.

Another thing to think about is that $4 a day comes out to $1460 a year (I know it says $1609 up there. Maybe that's the magic of compounding or the average rate from the stock market, I don't know).

$1460 a year is substantial! I really should work harder on my side hustles. 

Anyway, I just wanted to share since I thought this was so cool.

Have a good night.

I remain, your faithful,

Into the FIRE