LackingAmbition-2015-09-02-20:46:36.html

Back In School!

By mikeBOS | Published: August 24, 2009

Orientation’s over, the homework is prepared, and classes start tonight. I’ve enjoyed the people I’ve met so far and the assignments have been interesting.

I have decided I need to simply set aside any lingering doubts about my decision and charge ahead with enthusiasm. The finish line feels far away, and I’m eager to get there. But with interesting assignments, opportunities to start working next summer and, atleast compared to my peers, a promising financial situation; hopefully the time will cruise by enjoyably and at a brisk pace.

Then I can get into work that I enjoy and start moving towards financial independence once again and hopefully, in a few years, be in a position to sail off into the sun.


Full Scholarship

By mikeBOS | Published: September 6, 2009

I have secured spring funding for school. So this means my entire first year of law school will only cost me the few hundred dollars I spent on my books. That’s $40k down, $80k to go for the next two years. School is going well. Classes are enjoyable and not really as difficult as people would have you believe. I would say it is about equal to the difficulty of my undergraduate work. And actually, because the curriculum is so concentrated, unlike undergraduate work where I took electives in whatever I pleased, I might even say that it’s a bit easier since all the classes closely relate to one another. Concepts learned in one class apply to another. Also, the subject matter is interesting and it’s empowering to know that I am gaining a commanding knowledge of the system that governs me.

Funding the remaining two years remains up in the air though. I ought to be laid off from work any day now. I’m looking forward to the free time. Unemployment insurance ought to cover my day to day expenses. I won’t be able to save much, but at least I will be making gains academically and having a nice break to just focus on school without a simultaneous 40 hr work week to distract me.

The question is, what do I do about funding the final two years of school without my scholarship through work?

I need to mull over some scenarios.


Layoff

By mikeBOS | Published: October 12, 2009

So it is finally official. Last Friday they pulled over 200 of us aside across the state and gave us our walking papers. I wound up working at that company for 2 years, 6 months, and 3 weeks. During which I took a 30 day leave of absence, 30 days I called in sick, and 10 weeks I spent on paid vacation. By my calculations that means I actually physically showed up and worked about 512 days or 4,096 hrs. In compensation, including my tuition money, I received about $165,000. Which comes out to: $40/hr. Not too shabby. Especially considering that about half of those 4,096 hrs were spent surfing the internet and rolling cigarettes.

If you throw in the fact that I will be able to collect unemployment for the next 80ish weeks, that bumps my total take from this job up to $215,000, which would give me $52.50/hr.

The timing of the layoff could not have been much better. I just finished my undergraduate work last May. And I have already secured funding for the entire first year of law school. The unemployment income should take me a significant portion of the way through law school, meaning I won’t have to take out student loans just to pay the rent. I am looking forward to the 40 extra hours I am going to have each week. This mostly means I will no longer be sleep-deprived, no longer have an excuse not to workout, and have some time to cook myself some food rather than grabbing fast food burgers for dinner on the way home from work on my rush to class. Things will be pretty laid back for the next couple of months. But, in anticipation of the layoff, I did sign up for a heavy course load in the spring. Which ought to have me feeling sufficiently productive.

So goodbye manual labor. Goodbye shitty management. Goodbye working 40ft in the air, hanging by only a thick piece of leather, while I try to use my fingers on a 10 degree winter morning. Goodbye constant risk of death by electrocution. Goodbye commute and goodbye creosote splinters.

Cold Pole

A Nice Period

By mikeBOS | Published: October 20, 2009

It seems as though I am experiencing yet another “retirement preview” thanks to my unemployment. I’ve entertained thoughts of, after retiring, going back to school to pick up what I missed on the first go-round. Without having to work, spending my mornings studying mathematics, chemistry, biology and physics would be a delight. With absolutely no pressure over GPA’s or mounting debt, the experience would be entirely new. A well-paced study schedule, coupled with satisfying comprehension and ample contemplation might be near to heaven.

I am almost there now. Without work my schedule is clear to focus on class. It’s not quite perfect, there is worry about financing the final two years, and I am forced to take some classes in subjects that I would prefer only to have a casual acquaintance with, but otherwise I am practically already experiencing the life I hope to live in another 8 years or so down the road when all my financial goals are realized.

It is as if I am already rich.

Chalk Board


Grades

By mikeBOS | Published: November 16, 2009

I have started to receive the first feedback of my law school performance on some graded quizzes. I have scored above average on everything so far. It is nice to feel confident in my studies. Classes still remain enjoyable and the topics are only getting more interesting. The tedium of study is fading away. In fact, my recent studies have been more enjoyable than any studies I have ever undergone. I have yet to dread attending one class or gouged out any eyeballs trying to get through an assignment.

It’s possible that this might change next semester when I take on an additional law course plus simultaneously attempt to become a certified EMT. I may feel a bit more under-the-gun with the quantity of my assignments. But for right now, things are moving along with ease.


Change In Plans

By mikeBOS | Published: November 22, 2009

The layoff from work has forced me to take a second look at my financial and education plans. Since my employer was prepared to pay for 100% of my educational undertakings I was prepared to take on as many educational pursuits as I could handle stopping just shy of giving myself a complete mental breakdown.  Now that I have to personally pay for any classes, I need to actually weigh their value. I will need to take out loans to finish my legal education.

Luckily, my new chosen career path actually rewards people with higher student loan debts. My track is considered public service and so there are generous federal and state programs that will pay off my loans for me. If I graduated with zero debt I would not see any of those government bonuses. I expect that these programs will pay off my debt 100% over the course of 5-7 years so I needn’t budget any money from my main income to go towards debt.

I expect after graduating that I will have to work for 5-7 years to have my ~$400k I’ll need to be financially independent. That puts me at 33-35 years old.

After I reach financial independence I am not at all sure what I will do. Right now there are a few possibilities, I’m not entirely sure which ones will stay or what order they will be performed in, and I leave room for additions at any time:

1. Live aboard a sail boat and do some traveling.

2. Continue my education in engineering, theology, philosophy, physics, robotics or mathematics.

3. Bike cross country (Tried this once and made it about 1/4 of the way).

4. Some long-distance hikes.

5. Some long-distance kayak/canoeing.

6. Do a ~3-6 month RV tour of North America.

7. Get some remote property and build myself a cabin.

8. Just keep working because I love it so much.

9. Take a break from work, do some of these things, then take up a new career.

10. _________________________________

Before I quit my work there are a few things I’d like under my belt besides financial independence:

1. Helicopter/Airplane Pilot’s License.

2. Captain’s License / Some overnight sailing experience.

3. Complete basic home electrical, plumbing, welding and automotive courses.

4. __________________________________

So there we go, some pretty great plans for after the work life is over. I don’t mean to look too obsessed about life after work, I am looking forward to my career after school, probably more than most people. It isn’t that it’s all bad and I can’t wait to get past it, it’s just that, as an employee, you lack a certain amount of control and so you are somewhat robbed of the enjoyment of planning. It’s just not quite so fun to day dream about those years of compromising, following orders and attending meetings.

I should probably write down what exactly I mean by financial independence sometime.


Year End Finances

By mikeBOS | Published: December 28, 2009

I spent $23,723 in 2009.

In 2008 I spent $24,251. Last January I predicted that this year I would spend $28,200. Let’s see how I spent all this money.

The breakdown:

$8,502 Rent

$2,422 Restaurants

$2,320 Groceries

$2,170 Car Insurance/Parking/Gas/Maintenance/Tolls

$1,963 Travel / Vacations

$1,440 Video Games / Electronics / Hobby Stuff

$1,130 Utilities

$1,100 Education (Books)

$694 Public Transportation

$279  Clothing

$1703 Misc.

Here’s how it compares to last year by category

2008        2009    Category        Difference

$6,260     $8,502     Rent +2,242

$1,721     $2,422     Restaurants +701

$2,331     $2,320     Groceries -11

$1,628     $2,170     Car Stuff +542

$362        $1,963     Travel +1,601

$1,872     $1,440     Hobby Stuff -432

$741        $1,130     Utilities +389

$2,408     $1,100     Education -1,308

$422        $694        Public Transportation +272

$148        $279        Clothing +124

$1,762     $420       ATM Cash -1,342

$4,596      $1,283      Misc. -3,313

$24,251  $23,723   Total -528

So I crept up in most categories but some big savings in Education, cuts in ATM withdrawals and far fewer uncategorized, miscellaneous purchases saved me and I came out ahead this year by $500 over last year. More importantly I beat my expectations of spending over $28k this year.

How The Predictions Played Out

Last January I made predictions about how I would spend my money this year. Here’s how things lined up:

Rent Prediction: $9,000 Actual: $8,502

Education Prediction: $2,000 Actual: $1,100

I expected law school to be pricier than it is. Most of 2008′s education costs were from the law school application process.

Groceries Prediction: $2,400 Actual: $2,320

Eating Out Prediction: $1,700 Actual: $2,422

I really need to improve the eating out numbers. Especially since this year I will have time on my hands to cook at home.

ATM Cash Prediction : $1,200 Actual : $420

I actually did much better on this than I had hoped.

Gas Prediction $1,000 Actual $1,126

Public Transit Prediction $450 Actual $694

Auto Insurance Prediction $450 Actual $358

Auto Maintenance Prediction $500 Actual $120

Clothing Prediction $600 Actual $279

I had actually planned to spend a lot more money here with the hopes of forcing myself to become a bit hipper. – Didn’t work.

Travel Prediction $1,650 Actual $1,963

Hobby Prediction $800 Actual $1,440

An unplanned new video card and PS3 are responsible for this.


Last Year’s Goals

I had 5 goals last year. I met 3 of them.

1. Re-establish 6 month’s of living expenses – Done

2. Max out IRA contribution – Didn’t do it

3. Pay off student loans by May – Done

4. Open a new brokerage account and deposit $16k – Didn’t do it

5. Get 401k over $15k – Done

_

_

2010 Predictions/Goals

1. Set aside $1,000 for future EMT training

2. Set aside $3,000 for transition period from unemployment ending to part time work starting

3. Grow IRA to over $30k

4. Lower school tuition costs with scholarships to below $30k for 2L year

_

2010 Budget:

$9,000 Rent

$1,000 Education

$2,600 Groceries

$1,200 Eating Out

$400 Gas

$350 Insurance

$400 Utilities

$100 Auto Maintenance

$600 Summer Parking

$700 Public Transit

$600 Clothing

$1,800 Travel

$600 New TV

$600 New Bike

$250 New Bread Machine

$1,000 Hobbies

$1,500 Misc.

$1,080 Health Insurance

$23,780 Total

So this is an encouraging number. Almost exactly at 2009 levels plus a new tv, bike, bread machine and plenty of money ear-marked for travel, hobbies and miscellaneous. I am also hoping to set aside $1,000 for an EMT course in the spring of 2011, and 3,000 extra dollars to cover living expenses in the summer of 2011 when the unemployment runs out, just in case I have trouble getting a p/t job while I finish off my last year of law school. Unfortunately that means to reach all my goals I would need $27,780, which is about $1,200 more than what my net income will be next year. My taxes for next year are a complete mystery as well due to confusion about how my tuition money is going to be taxed. I could owe a couple grand or get several grand back, I don’t know what to expect there.

Transportation costs ought to be much lower since I won’t need my car regularly. I need to hold onto it though because I may get an internship next summer that requires it, which will require expensive summer parking fees. Perhaps I would forgo the bicycle in that case until 2011. I will know by February if I have landed an internship that does not require a car , which means I could forget about the gas, insurance, maintenance and parking fees all together plus net a little money by selling the car off. Though I would need to then spend a little money on car rental fees from time to time, but it would still be a net gain. It also might be fun to build a solid bike from parts by picking up used parts at yard sales here and there, instead of having something built for me, in which case the costs would probably be <$200.

This is the first time in my life that I’ve had to pay for health insurance.

Long-Term Projection

This is the part where I recalculate when I will be financially independent.

Last year I predicted that I would be financially independent sometime in 2013 and retired around 2016. Things have changed a lot since I was laid off two months ago and won’t be contributing to my savings for the next two years.

It is difficult to make predictions at this point since things will depend on how long it will take to get a job after graduation, its pay rate, and how long I stay in that job. Also, my tuition costs and unpredictable financial aid package will be factors. So I have to make some assumptions. #1. I will land a job within six months of graduating that will pay $40k/year. #2. I will also have a 2nd p/t job starting in my 3rd year of law school and will continue to work weekends in that job until nearing retirement. I will be able to live off the income from the weekend job and dedicate my entire main salary to savings.

Here is my predicted liquid assets at the end of each year:

2010: > $40k

2011: > $54k

2012: > $75k   Graduate from Law School / Start Working

2013: > $115k

2014: > $160k

2015: > $216k

2016: > $277k   Financial Independence

2017:>  $344k

2018:> $418k

2019:> $500k    Retired at 35


$500k – $600k Retired. This is about the number I need to hit for a comfortable ‘retirement’. Which basically will be a time in my life when I do whatever I want, not necessarily a time when I stop earning an income all together. I would likely continue to work, since I plan to enjoy what I do. This would be a good point to quit the 2nd job if I were so inclined. It might be a good time to quit all together for a period to go on some sailing/long-distance hiking/biking/camping adventures for a couple of years only to come back and start a new phase of my career. Or I could just drop out all together, it’s a long way off.

$250k – $300k Financial Independence. This is about the number where I could build a little cabin in the woods and, if I were content with reading books all day, going for local hikes and scrounging things together when I wanted to build a new project, I could get by quite comfortably without ever working again. There are people who do so with much less, but this is the number I would be comfortable with. If I absolutely despise my work and can’t stand the thought of another 3 years of it, I may well allow myself to quit one or both of my jobs when I reach this milestone. But I don’t see that happening.


The Close of Winter Break

By mikeBOS | Published: January 10, 2010

I have had a short, but wonderful winter break. My last exam was on the 22nd of December and I go back to class tomorrow. That’s 19 days off by my count. Three were spent traveling, one was spent moving and another was filled with family (however delightful) obligations, leaving me with 14 days to myself. I have had a great time mostly catching up on magazines, TV shows, blogs and video games, you know, relaxing. I think what makes me different from most people, and hence amenable to an early retirement lifestyle, is that I never understand people when they say, “Oh, I’m glad to be back at work. I was going stir-crazy sitting around the house.” Are they kidding? There are so many more subjects I would read about if I had the time, shows I would follow, and the video games, oh the video games I could play. And when you get bored of perusing content that itch to start creating comes: What if I wrote a few articles? Or a screen-play? Or a game? Wouldn’t that be fun?

And many of these people have more resources than I do. They have yards to garden in and garages to tinker in with cars to tinker on. Oh the things I could do!

But alas! Tomorrow I begin my quest anew. I am fortunate in that I am actually quite enjoying school and am looking forward to my new classes. It is not as if I have to grab my lunch pale and head back down to the factory assembly line after my short vacation. My work is stimulating and ultimately working towards a greater good. But ironically, the best thing about going back is that I know I am getting closer to my goal of not having to go back.


Taxes and Savings

By mikeBOS | Published: January 28, 2010

I’ve been doing my taxes lately (somewhat frantically as I am eager to find out what kind of financial aid package I can expect from school for next fall) and happily found that I will be getting a hefty refund due to all my educational expenses over the past year. Enough that it puts me past my savings goals I was not expecting to reach until the end of this year. Because of this I think I will increase my savings goal just a tad so that I can get myself a nice round number in a particular account (wow, all those zeros!) and because I was prepared to save the money anyway.

An interesting thing has happened as a result of this extra savings. I have spent a day or two thinking about what I could do with all this extra income I was not expecting. Maybe finally building that dream multimedia PC I have been designing for years in the back of my head while riding trains and during the duller moments of some undergrad classes. Most of the work though is configuration and getting the software just right, so the actual out-of-pocket costs would probably not exceed $500 or $600. I’d like something silent, energy efficient with a sleek form-factor, that could act as a DVR, torrent downloader, automated dvd ripper, music/photo/video server, hulu/fancast/etc capable, misc file storage, scheduled fm recorder (to catch those talk shows I used to listen to at work), podcast downloader, MAME so I can play classic games, all with a nice front end navigable with a remote and a wireless mouse+keyboard combo for other things. And a place to dock and auto-sync an mp3 player for grabbing the fm recordings and podcasts would be nice. Of course, then I’ll need an mp3 player, so there’s another $150-$300. I have taken to walking home from school so it would be nice to have things to listen to, it may ultimately get me to walk more as well.

Of course I also want a new bike and maybe a bread machine this year. But those were already budgeted for.

I suppose I could use some more clothes, I’d have to work hard to spend more than $1,500 on those. It’s such a chore for me.

I could take a vacation or a trip. But my bf is a little cash-strapped and couldn’t afford to come along, plus I am not really interested in travel, so that essentially excludes that.

Point of all this being, there isn’t much that I wish to do with my money beyond save it. Which is probably what will happen to this windfall.


Interning

By mikeBOS | Published: February 23, 2010

After a couple of interviews I have secured a summer internship at a local prosecutor’s office. It will be 40 hrs/week for about 2 1/2 months during the summer. It should be an enjoyable time putting bad guys in jail, learning to navigate the courts and coming to the rescue of the victimized. It’s a good position to have secured because firstly, it will be fun, tremendously educational, and provide me with a great opportunity to see if I am actually going to enjoy the day to day life of the job I am working towards after graduation. And secondly, because it will look great on the resume and allow me to have a better shot at getting the position I want next summer, which is typically followed by a job offer pending graduation.

I am particularly pleased that I have an offer at my place of choice so early on in the process since it means I can relax for the rest of the semester and I don’t have to put up with doing any more interviews.

Meanwhile the doldrums of winter roll on. Spring break is in two weeks and after that it’s just 7 weeks until the end of the first year of law school. I have submitted my request for financial aid and can expect an answer in April sometime. I’m anxious to see the numbers since they will have a significant effect on how many years I am going to have to work before I reach financial independence and then early retirement.


Why Law School?

By mikeBOS | Published: February 28, 2010

Given that my main goal in life is to retire early and spend my days in quiet leisure tinkering, reading, enjoying art, socializing, blah blah blah, why am I bothering to attend law school when I could just get a job and get on with the task of saving money?

The answer is basically that I have an opportunity before me that is somewhat unique. My first year of school was free and a severance from my employer ensures that I will have a living stipend through my 2nd year of school as well (it’s a union thing).  That money goes away though, if I get a job.  So my choice is basically, 1. sit home and do nothing and collect the money. 2. Get a job, work 40 hrs/week and make the same amount of money I’d make if I did nothing. Or 3. collect the money and use the opportunity to work towards my law degree (4. I suppose I could also collect the money and simultaneously work on developing some under-the-table side business). But this income makes for a great excuse to continue on to year 2 of law school rather than quitting and getting a job.

Financing the tuition is an issue, which is why I’m anxious to the see the financial aid numbers.

But basically, due to my unique situation, law school for me represents only 1 year of opportunity cost (money I could have made working full-time) which will happen during my 3rd and final year of school. For the typical person, law school represents 3 years of lost income, a much steeper price. In addition, the average person pays for all 3 years of school themselves. I will only have to pay for 2 years and hopefully I will have a few grants and scholarships to defray my obligation further.

Now, while my goal is to retire early, I still will need to work for about 5-7 more years to retire comfortably (by my standards), and I would prefer those years of work to be something enjoyable and meaningful, rather than something arduous and draining. By spending a little money on school and giving up that one year of lost income, I help to make those 5-7 years a time of accomplishment and enrichment rather than one long countdown to my freedom from work.

Besides, I’m actually having a good time in school, things are coming easily to me, the schedule’s terrific and I’m surrounded by good friends every day. Who wouldn’t want to keep that going a little longer?


Should You Go To Law School?

By mikeBOS | Published: March 4, 2010

From search records I’ve noticed a lot of people reading this stuff get here by googling “should you go to law school”? So why don’t I just answer it for all you people who seem to be on the fence. Keep in mind this is the perspective of a guy who plans on retiring at 35 and can’t even fathom the mindset of a person who goes into debt to buy a car or whose dream is a McMansion. That said, here we go:

If you know you absolutely want to be a lawyer and can’t imagine doing anything else, then go, whatever the cost. Can’t live your whole life wondering ‘what if’. If it’s not for you then drop out after the first semester and think of the tuition bill as the price tag of living a life free of regrets.

There are ways to become a lawyer without going $100k into debt. I’d recommend first off working a little bit and paying off any lurking undergrad loans before you consider piling more on by taking on law school debt as well. Consider being a part-time, evening student. That makes it so you can work full-time while going to school at night. It’s not the easiest thing, but if you love the law, it won’t be that hard. That way you can cover your cost of living and pay a chunk of the tuition so you graduate with just a tiny debt load.

Also, be price conscious when it comes to law school (I know, this from a guy who’s going to a $40k/year school, but I had a unique scholarship situation). If I were paying for all my schooling I’d consider a state school in a more rural state. It could be worth moving and delaying school for one year to establish in-state status. There are many reputable schools under $14k/year in state, which, after financial aid and contributing money from working, could make for a debt-free graduation. Though they say, unless you’re going to a top 10 school, you ought to consider going to school in the area where you intend to practice just so you will be clued into the social/professional network in the area and run into a lot of alums during job interviews. I don’t know how crucial that is. If it’s a choice between $50k of debt and having the interviewer say, “Oh, I went there too!” or $0 debt and having to tell the interviewer, “It’s in North Carolina. ” Followed by the inane, “Yes, the winters are mild there.” I think I’d take my chances with the zero debt.

If you want to go to law school so you can be a big firm/corporate lawyer raking in six figures and playing lots of golf, think again. There are plenty of people in my class who fit this mold and I can tell you a few things about them: 1. They’re miserable, they hate class, writing, reading cases, they can’t wait for class to end, they count-down to the end of each semester, it’s just sad. 2. Most of them think they are going to be raking it in later and so live it up, maxing out their loans and spending the money going out drinking after class with all their miserable cohorts, and so are over $100k in debt and a few have over $200k of debt. That’s a deep hole to dig yourself out of. 3. Those cushy corporate/big firm jobs are few and far between and tough to get simply because they pay so well. 4. They make you earn your pay, it’s high-pressure, long hours, and it will be a decade before you’re spending weekday afternoons on the golf course.

When I was deciding to go to law school I only considered it because I thought I might like to do some criminal work, or maybe help advocate for civil rights. I went back and forth on the idea of attending for years. Mostly what deterred me was the $100k+ price tag and the warnings of the ‘glut of lawyers’ in the market looking for jobs. Then, opportunity knocked, a 100% scholarship, so I couldn’t pass that up. Within a month I knew it was for me. Classes fly by, they’re engaging, I fly through the reading because it’s so interesting and there’s a general feel of camaraderie on campus that makes it easy to make friends. I know getting a job won’t be easy but since I’m single and willing to move anywhere, don’t expect a high salary, probably won’t have any debt, and am already having great success with internships and pro bono work,  I figure I’ll find something.

There are a lot of books and people who will tell you not to go to law school unless you get into a top 10, 15 or 20 school. And I’d say to that, if you’re life goal is to make a killing, then yeah, don’t bother with law school if you aren’t in the most exclusive 15 or so. And also don’t go if you’re not confident that within that elite group you will be in the top 10% of the class come graduation. There are easier, less risky ways to make money. Especially if you’re willing to go $200k into debt. Think of it this way, if you go $200k into debt to go into business and fail, well, worst case you probably had a pretty thrilling time and you go bankrupt and start from scratch. If you go $200k into debt to go to school and fail, well, most likely you were miserable the whole 7 years and to top it off, if you fail, you’re stuck. Student loans can’t be canceled in a bankruptcy and you will have to force yourself into a job that (a) you aren’t good at and (b) you hate, just to try to dig yourself out of the hole you dug, which will probably take you your entire life. Bottom line, don’t go to law school for the money, some will get lucky, but it’s too big a risk. It seems to me most accounts I read from people who regret going to law school went, not because they had an interest in the law, but rather because they thought it meant a guaranteed cushy, high-paying job. Or, they had a genuine interest in the law, but simply took on too big a debt load.

On the other hand, if you 1. want to advocate for people or have an idea of some legal field that interests you 2. will be happy to earn a typical middle-class salary and 3. can figure out a way to graduate from law school without a soul-crushing student loan debt, then you’d probably do well to go to any reputable law school.

Anyway, that’s this atypical 1L’s advice. I’ll check back after graduation, when I’m looking for a job, to see if I still agree with myself.


Spring Cigar

By mikeBOS | Published: March 10, 2010

The weather has finally been warming up in Boston. With the temperature getting into the 50′s regularly it’s time to start smoking again. I think you know you are an addict when you’re standing outside in 10 degree weather in order to suck down half a cigarette as fast as you can. I’ve never done that and can’t fathom a smoke being good enough to make enduring such cold worth it.

But on a sunny afternoon, when I’m walking to school or just needing to get away from the books or computer for a bit, a nice sit down on a bench with a slow-burning cigar hits the spot. – The aroma of the aged leaf, the sound of the strike of a match, the way the smoke lilts into the air off your fingertips. Every bit of it is a joy. It makes me feel calm, peaceful and rich. One thing I miss, since moving to the city, is having a smoke while going for a drive. I only drive rental cars now from time to time and of course, they all ban smoking.

And the winter can be so long that I forget that I am indeed a smoker. And on a spring day when I light up again for the first time, I remember why.


A Retirement In Pictures

By mikeBOS | Published: March 12, 2010

Rather than just write about what I would like to do with my retirement I thought it would be fun to shamelessly steal photos from around the internet in order to put together a visual way of representing what I’d like to do:

First, enjoy a brief career as a jurist helping to tip the scales of justice to the fairest outcomes while padding the retirement fund some more.


Hang up my hat when I’ve had enough, buy a small sailing yacht, and explore the eastern seaboard for a while. If I find the sailing life’s for me, then perhaps explorations in other seas would be in order.



When I’ve had my fill I’ll sell the boat, reconnect with family for a while. Then take off on a U.S. bike tour. I did this my summer before college and had a good time but only went about 800 miles. I’d like to at LEAST go coast to coast, perhaps a bit more.



After a short respite I think I’d also enjoy doing some long-distance hikes. Perhaps the Appalachian, perhaps Alaska in the summer, or the Continental Divide.



I know that, even after all that, there will still be some sights I have missed out on. So I think a few months of canoe-camping combined with some RV-roving would do nicely.




I think all that ought to serve to get the wanderlust out of me. If not, I could certainly also allow myself to try a typical 10 day vacation somewhere like most working people. Or also sign a 6 month apartment lease in some exotic city before I finally decide to really settle down.



When I am finally ready to take off the traveling shoes I think I’d ultimately settle in a rural northern area. Somewhere with relatively cheap land, lots of space, but still only a few hours drive from some museums and theaters for when I need a taste of that.


I’d like to park the RV on the land and live in it while I build myself a rural, river-side, one-bedroom cabin that can be wood-heated and powered primarily by a hydro-electric generator. With lots of glass to make spending time indoors during the winters less stifling.



With a totally off-grid electrical system using hydro, wind and solar power.



An attached green house for year-round gardening.



A garage space for building cool things.



The first project coming out of the garage will undoubtedly be a fully-automated photo-bioreactor for harvesting vegetable oil from algae for use in diesel automobiles converted to run off straight vegetable oil. It also may be able to produce a sizable amount of ethanol from the leftover biomass once the oil is extracted.



I like old cars. I’d love to take a cheap, old car off someone’s hands, throw in a diesel engine so it can run off my homemade fuel, maybe even make it a hybrid-electric, and polish it off so it shines.



An outdoor hot tub that looks like the river just cut it naturally out of the rock. Makes winter star gazing much better.



A heated driveway so I don’t have to shovel. Extravagant? Yes. Do I care? Clearly not.


A motorcycle. Something that could be used both on and off road would be ideal.



A trailerable motorboat for the occasional week-long trip to Nova Scotia or New York or Bermuda when I get that longing for the sea. I think maybe I’d like to try to build one from scratch. Or at least refurbish an old one. And it would run off the algae fuel of course.


I could never retire without knowing that I would be able to nurse my video game addiction. Some arcade space carved out of a basement or attic would be nice.


All followed by a quiet life of leisure spent in comfort and peace filled with tinkering, programming and lawyering.


RV photograph courtesy Philip Greenspun


$10,000 Richer

By mikeBOS | Published: April 6, 2010

Well, my employer has sent the final payment to school to cover my tuition for this year. It was just over $10,000. They are overdue in paying by about 60 days and I was beginning to wonder if they were going to pay at all. The school has been bugging me for the money for the past four weeks, sending me form letters threatening to call collection agencies.

So it’s a load-off to know it’s taken care of. I was afraid they were going to make me fork over the $10k before they’d allow me to sign up for summer courses. But it’s all set now. So my first year of law school didn’t cost me a dime. Not bad. The next two years will be a different story. By the end of the month I ought to receive my financial aid award and I’ll know just how much debt I’ll have to incur in order to finish school. My one big hope is that my net-worth will still be positive when I graduate. – Even if only by a few hundred bucks.

Meanwhile, school couldn’t be going better. One prof., a former State Supreme Court Justice, tells me I ought to consider becoming a law professor. I’d love it, it’s a sweet gig. You can’t beat the money and the schedule and I enjoy those esoteric conversations on jurisprudence and inane hypotheticals. But it’s a tough position to get.

And I believe I’m in the running for a prize for an oral argument I gave. After an appellate argument in front of a moot-court judge I nearly blushed from the compliments on my performance. I’ll know in a few weeks.

Generally, things couldn’t be going better with my studies. I don’t know who these people are who think law school is difficult. I’d be completely happy if I could make a career of being a permanent law student.

Registration for next fall’s classes happens on Thursday and I’m already looking forward to it. I am setup for a schedule that only requires me to be on campus 2 days out of the week. There will only be one exam in December. And all but one of the professors comes highly recommend (I couldn’t avoid taking one guy’s class who everybody seems to hate). Anyway, I’m happy how this is going so far.


Wrong Occupation

By mikeBOS | Published: April 14, 2010

I am surrounded by people who are forcing their round bodies through square holes. Every week I talk to people who feel they shouldn’t be in grad school, they regret their debt loads, they’re tortured by their classes and their readings. My silent reaction is that they shouldn’t be here. But I can’t say that, it would only push them further into despair. So they will push themselves on to graduate and then, consequently, on into careers they likely will find equally uninteresting. Such is the tragic song of so many men, it seems. It’s so despairing in fact, that they cannot even admit to themselves that it is tragic at all. Instead they throw up their hands and say things like, “Such is life,” and, “What are you gonna do?” And they toil and toil and toil, thoroughly believing that it is the only acceptable way to live one’s life. After all, all their neighbors are living these lives too, everyone can’t be crazy, right? “It must be a matter of necessity,” they have to believe, or else they would have to make the devastating admission to themselves that they have made a series of irreversible mistakes that has needlessly committed them to lives of misery for years, and likely decades.

There is no solution for their tragedy and the only thing I can gain from seeing it is relief that I don’t stand in their shoes.


4-Day Weekends

By mikeBOS | Published: May 6, 2010

My schedule for next fall has me only taking classes on Tuesdays & Thursdays. So I’ll have 4-day weekends to do with what I wish. Of course a bit of studying will need to happen on the off days, but not much. I expect I ought to be able to squeeze most everything into Wednesday so that my 4-day weekends will be completely free.

Now I just need to figure out what to do with myself. If I were out of school and had my house this wouldn’t be a problem as there would be plenty of things to learn about and plenty of projects to take on. But as it stands I am just renting a small room and my mind is completely occupied with school so trying to learn interesting other things that require much focus is almost impossible. I tried this a few years ago where I was teaching myself computer science while simultaneously taking classes in classical studies. It eventually lead to me dropping out and becoming a freelance programmer. I can’t have that happening again. If I weren’t in school I’d be teaching myself about robotics. But when I get into things I’m passionate about like that, my main studies suffer because they always seem less interesting. So I’m going to save the self-taught robotics courses for the weekends and evenings when I’m working after graduation.

One thing I’d like to do a lot of is camping. It’s cheap, I have most the equipment already, and there are plenty of great places to go see within just a few hours’ drive of my place. I’d also like to get back into scaling mountains up north. Those two things could go hand in hand. A small, trailerable sail-boat might be a fun way to pass the time, but I worry about the costs. Bicycling 100+ miles in a day followed by a recovery day of magazines and video games could make for a nice weekend and I’ve already got a bike for that. Just need to tune it up. I could take up hunting again, I haven’t done it since I was a kid but I abandoned it just because I found it to be a bit boring.

Perhaps I ought to try to get myself to finally learn to ski for those cold winter months. There are several ski mountains from where I’ll be staying within an hour’s drive. There’s one where a season pass is less than $250. I could be skiing 4 days a week on the cheap.

I have friends who seem to go on trips at least one weekend a month. I could tag along with them on the cheap.

Or I could use the time to develop a part-time business or work on a software project to make some side money.


Sailing

By mikeBOS | Published: May 20, 2010

I joined a sailing club in town. So far I’ve been out on the water just a handful of times. I’d say, at this point, I’m a competent sailor, but I’m looking forward to taking some advanced classes in the next couple of weeks. Should be a nice way to spend a Saturday with a friend. -Just small <20′ boats so far. Though the club does have some 23 footers I’m looking forward to trying out before the summer’s through.

As a solitary activity it’s somewhat akin to smoking a cigar. It’s slow. It makes you pause. It’s something that can’t be interrupted. It causes you to sit back and take in the sights between puffs. And there are those comforting things that come along with it. -The flick of a match, the echoes of the hull as you climb aboard, the smell of the unlit tobacco just before you light up, the rustle of a filling sail, the lilting of the smoke.

I think it suits me.

Boats


1L Done

By mikeBOS | Published: May 23, 2010

My first year of law school is complete. I had a great time with it, as predicted. On Monday I begin my summer internship at a criminal law office. It’s going to be rough waking up at 7, wearing suits and having to shave daily. But the hope is that the job will be fun enough that I look forward to going and don’t mind too much the minor inconveniences that come along with working. And if not, well, it’s only 12 weeks.

They say your first year of law school is the hardest. The rest is fluffier. The curve goes away so, theoretically, everyone in the class could get an ‘A’ if they deserved it. The curriculum is mostly electives so I can take classes that particularly interest me. And I’ve sort of learned the ropes of the law school exam process.

While I predicted I’d enjoy the first year of school, I also predicted that the 2nd year would be difficult, psychologically. And I still think that’s true. The excitement of starting something new is gone. And the excitement of being nearly finished isn’t quite there yet. I’m combating this potential malaise with a school schedule that will afford me 4-day weekends, which I have already arranged for the fall and may be able to pull off again next spring. So if school has me down I can just coast through my two class days during the week and focus on fun weekend things like sailing, hiking, camping and skiing.

Anyway, one year down, two to go. I judge this venture a success so far.


Property

By mikeBOS | Published: May 30, 2010

I’m thinking again of buying some rental property. I considered doing this about a year and a half ago while I was still working but I opted not to since I was so busy doing full-time school along with a full-time job. But now here I am, school only keeps me minimally busy, no job on the horizon, some cash burning a hole in my pocket and foreclosed properties abound.

I think I am going to empty my coffers and pay cash for a somewhat-distressed multi-family property with 3-4 apartments, fix it up right quick, and start renting out the units as soon as I can next spring. I need to wait until the next tax year to do it for various reasons.

Land lording is something I’ve read a lot about, and talked to a lot of landlords about. It’s something I’ve thought I’ve wanted to try for several years now. So I think it’s about time to dive in.

If it works out and I find land lording suits me I think I’ll likely make a career of it. I could likely afford a second property before I finish grad school. I estimate 4 or 5, 3-4 unit apartment buildings would be akin to the full-time salary I’d get if I just went and got a full-time job after school. I think I’d much rather fix a leaky faucet, clear some snow, or replace a broken window now and then than get up at 6am everyday, dawn the suit, and deal with office politics and low-lifes for the same $.


Summer Job

By mikeBOS | Published: June 2, 2010

So I started working last week in a criminal law office. It’s strictly a temporary summer job that expires in August. This is the first time I’ve worked since I got layed off last October. For that matter, it’s the first time I’ve had to wake up at a regular time since then. I never was one for waking up early or pushing myself to go to bed before I feel ready in order to be prepared for the next day.

If left to my own devices I tend to stay up until 2am and sleep until 10ish. It’s very healthy, I get plenty of sleep, feel tired when I go to bed and feel great when I wake up. Waking up at 6am to an alarm clock, on the other hand, I’m pretty much a zombie for two hours while I shave, shower, get dressed and ride the train.

No, I don’t think a job is for me. I could see maybe working one or two years once school is done in order to draw a regular salary, do some good, and gain some experience that I could later use in a private practice. But certainly no more than 2. I could also see my land lording working out well, stumbling my way through establishing a very-part-time private practice while I build up my real estate holdings, and spending most of my time sleeping in, hanging out at the library, developing some software and tinkering on my old, beat-up car.

So I’m going to make the most of this summer job, and I’ll try to get another good one next summer. That way I’ll feel confident about going out and practicing without first having to hold a job for a couple of years to get experience. And waking up at 6 will just be a two-summer thing, not a two-year thing.


Networking Events

By mikeBOS | Published: June 20, 2010

Being in law school I am surrounded by people acutely-concerned about their careers. Not so that they can get into a position of power so that they can help alleviate injustice, or so that they can get the job of their dreams, but so that they can make a shit-ton of money, pay off their student loans, and lease an imported luxury vehicle. I am bombarded by emails and invitations to “networking events” and opportunities to build my resumé. It is as if people’s entire lives are supposed to be about making themselves into a marketable product and a star employee rather than an educated citizen and a gentleman.

I am happy to go to interesting events covering issues in the law and public policy. And I am thrilled to make friends who have similar interests and motivations. But by labeling something as a “networking event” I am robbed of that opportunity. I am no longer a human, pondering the issues of our time and making connections with people who have similar passions. But rather, the entire interaction becomes one of opportunity and ulterior motives. I have to question if the person talking to me is doing so because they are interested in the topic or because they see a chance at being able to take advantage of our relationship sometime down the road by getting a job or favor out of me.

Explicitly calling something a networking event takes the formerly detestable practices of sycophants and psychopaths and holds them up on a pedestal as something successful people have to do to get an edge. It preaches to people that the purpose of a relationship with your colleague is to use him for what he might be able to do for you. It makes a mockery of sincerity and genuine friendship.

The worst of it is that career counselors are preaching that this lack of morals is a skill one must adopt in order to thrive in the new economy. I don’t deny that a lot of job offers come out of personal connections, but here’s a thought: If you are genuinely interested in what you are doing, you won’t be able to help but to have engaging conversations with people about it when you are at talks, seminars or conferences about related issues. Inevitably some friendships will form among those contacts and inevitably career opportunities will come out of those friendships. If you aren’t going to these events because you are genuinely interested in the topic, maybe you are in the wrong field. If your only motivation for going is to try to form some shallow friendships that you can one day take advantage of, you might want to have a second thought about it, rather than just accept the admonition from career-advisers that it is something everybody does and has to do.


The Contentious Uncle

By mikeBOS | Published: June 27, 2010

I tend to keep my plans secret. Which is probably why I enjoy keeping this pseudo-anonymous blog in order to articulate my ideas to myself and vent a little bit. – As well as to reach out to the like-minded among me.

I keep my plans secret because, since they are at odds with the normal course of how people go about things, I tend to get a lot backlash from people who prefer to be in the mainstream. If I encounter someone like-minded or if I am really pushed for my plans for the future, I’ll tell. But I do so reluctantly and cautiously, because I know many people don’t like to hear about others who choose to do things differently than they do. It forces them to think about their own decisions and that can be disquieting for someone who has never tried it.

When they hear of your plans rather than join in your excitement, or ask about the details, they offer criticism and doubt. I have an uncle, he is about fifteen years my senior and he and I could not be more different when it comes to ideas about money, ethics and how to live day to day. He is a home-builder who constructs the McMansions that dot our landscapes. He puts no thought towards passive solar design, artistry or sustainability. Consequently the monstrosities he builds require massive active air conditioning and heating. The homes are huge, even by McMansion standards. The amount of time building extra-space takes away from the time that could have been put towards constructing a long-lasting, well-designed, beautiful structure.

His customers too, buy into the entire operation. Their biggest concern is square footage (the more the better) and the color of the vinyl siding. It isn’t until they have lived in the thing for a number of years, the novelty has worn off, and the heating and cooling bills keep coming in that they realize what a giant pile of junk they have moved themselves into. They realize they can’t step out onto their massive deck because the morons built it on the south side of the house with zero shade and it’s 115 degrees out there all summer long. They have to squint through any movies they watch because no thought was put into the position of the windows and where the sun would be in the early evening when they actually want to sit down to watch something. And they have to descend two or three flights of stairs hauling laundry back and forth because nobody thought to put the laundry room anywhere near where they store their clothes.

They took the maximum mortgage any bank would sign off on so now, because of their massive monthly obligation, they can’t afford original art work, beautifully crafted furniture, or time to enjoy it. But who needs that when you have three rooms you haven’t even stepped into in over a month, all filled with mass-produced plastic furniture from China?

“I know it’s too big, but it’s about the resale value!” They will protest to me. Of course, it only holds any resale value because some other moron is going to come along who thinks his life is valued based upon how much square footage of this earth he can close off from the elements.

My uncle thinks I’m an out-of-touch idealist and I’ll come around to see the “real world” at some point. Apparently that’s when I’ll become enlightened and see the importance of 9,000 sq ft homes, 4 car garages and taking out loans to buy everything. If only he could see that he is the one who is so buried under piles of worthless possessions, so burdened by property and debt, and so hypnotically enthralled by some kind of empty-status he hopes to someday achieve. – He’d realize that if either of us is living in a fantasy-land, surely it’s him.


A Car Again

By mikeBOS | Published: July 3, 2010

I pulled a load of cash out of the bank yesterday. I always feel like a criminal, or international spy or morally-questionable-corporate-titan when I’m carrying a lot of cash.

I bought a car yesterday. Paid for with the cash. It’s a ten year old sedan that I hope will last me a few years while I finish school, establish a landlording business, and get a little solo law practice going. Cars usually last me a while. I never go very far. I take the commuter train a lot, and don’t object when other people offer to drive. And I am a pro when it comes to getting the absolute most out of a drive combining work/school/errands/social visits/joy rides all into one big outing every few days.

The car was cheap, I had a mechanic look it over with a fine-tooth comb, and it gets great gas mileage, so I’m quite happy with things.

The next big financial move is to buy a small apartment building. Which I have a feeling might be a little more complicated.


The Number

By mikeBOS | Published: July 12, 2010

Trying to figure out how much money one needs in order to simply live off the dividends of their wealth and never work again is a favorite past time of those of us who hope to retire early. The first task in trying to figure out how much money you need to save is to figure out how much money you need each year to spend. A popular approach is to make 2 budgets. First, a bare-bones budget that will provide you with food, shelter, medical care, and maybe some gas/bus money. Basically bare survival, without any traveling, fancy dining-out, or expensive concerts or theater. The second is the budget you would prefer to have that would include travel, entertainment, charitable giving, fancy car, or whatever-else-you-want type of stuff. These budgets can range from $10k/year to $100k+/year. It’s amusing that some people cannot imagine how they’d spend $40k/year whereas others can’t imagine how to spend less than $80k/year.

Once you’ve got those numbers pegged, and you have figured out your safe-withdrawal-rate (generally between 3 and 4% to make your principal last a lifetime), from there you can figure out, down to the dollar, how much you need put away in order to retire.

For me, my bare-bones budget would require about $250k in invested assets plus a home with no mortgage. That would supply me with about $10k annually, which I think I could get by on. Especially considering I will probably work odd jobs here and there, since occasional paying-jobs are bound to strike me as interesting, and friends and family are bound to ask for my legal assistance and insist on paying something. There’s always going to be some injustice that outrages me that I feel compelled to take on. And there’s no telling what other types of income my various hobbies may accidentally produce.

At the other end of the spectrum, the posh budget with ample wiggle room for replacing, rather than duct-taping things, taking frequent weekend trips to the city to catch a show and have a dinner, eating lots of organic meat and fresh seafood, giving a little away each month to select charitable causes, etc., the number is closer to $575k, plus a house with no mortgage.

I think, as long as work isn’t completely insufferable, I’ll likely breeze right past $250k and keep on trucking it to $600k or beyond. But it really depends on my means of income. If it’s semi-passive, part-time land-lording on a few small apartment buildings, it should be fairly easy to keep that up a few extra years to make my goal. If it’s a high-stress, high-hours, private law firm where I count down the days, it will be a lot more tempting to just pull the plug once I hit the bare-bones that I’ll need.

I’ll probably be better off and end up with a wealthier life, in the long run, if I pick the route that, though it provides a smaller income, is a lot easier to stick with for a few extra years while my equity piles up.


Moving

By mikeBOS | Published: July 24, 2010

Today I’m moving all my junk. I’m leaving the metropolis and heading back to rural New England for a few months for a short sojourn from the city while I bring my summer to an end and start taking a serious look at purchasing some real estate. It should be a nice break from the stoic, cold, crowded commuters I have been trapped with for the past couple of months, on my daily treks to my summer job. I am borrowing a truck to move all my large stuff, just leaving some clothes and a toothbrush behind to get me through the last week.

It is times like these I am quite pleased I’m a minimalist. There isn’t one thing I can’t carry single-handed. As I have in the past, I have thrown just as many things into the dumpster as I have into the suitcase. When you have a place to put things, things tend to get put into it. Over time they pile up. It takes real discipline to keep it from happening. I don’t have that discipline. Fortunately though, I have the wherewithal to throw it all out come spring-cleaning or moving time. I admit it feels a little wasteful to throw perfectly useful things out. But the real waste, you have to remind yourself, is in the energy you expend hauling all that junk around with you wherever you move.


Cashing In

By mikeBOS | Published: August 5, 2010

Well two big long-term investments were cashed in today. First, my strawberry wine I made and bottled just about 2 years ago was finally opened. Secondly, I sold off all my stock holdings so that I will have cash to make a real estate investment in the coming weeks.

I have been making wine for several years now. I tend to make it in batches of about 100 bottles at a time. I only make it every year or two. The hundred bottles, even though I feel as though I give one away every week to a friend, seem to last forever.

The strawberry wine is a success. Though not a wild success. When it first hits your lips it tastes strongly of strawberry juice. It finishes dry but leaves a strong taste in the mouth. Not an inherently unpleasant taste but something I do wish was a bit more subtle. It’s almost as if the long-dead strawberries are latching onto your tongue and stubbornly refuse to be relegated to the stomach. Still, it’s on par with a decent $10 bottle I would pickup at the grocery store. So I now have a cellar with approximately $1,000 worth of wine in it which probably cost me somewhere around $40 to produce.

If only my stocks had done so well. Not to say they did poorly. In fact, I had about the return that I expected to have when I was laid-off almost a year ago. Fortunately this week the market has been up so I thought it would be a good time to sell. I won’t need the cash for at least two weeks, but I don’t want to risk a major downturn in the next couple weeks that could potentially keep me from being able to make my real estate move.

I want to try buying a bank-owned run-down place, rehabbing it on my long 4-day weekends while I’m in school this fall, and putting it back on the market, hopefully, by the end of the winter for a smart profit.

There’s no secret to these “house flipping” projects. I resent that term because it makes things sound a bit too easy. It’s more like home-rehabbing. The houses I am looking at are in complete disrepair, all the finishing work inside needs to be done, some need a bit of plumbing and electrical repair. One needs a little work on the foundation. But with all that risk and work comes a good profit potential on the other end of it.

I am looking at a property this weekend that has a lot of potential as an investment. I’m looking forward to tracking all the time spent and expenses accrued in the rehab process and seeing what my final result is in $/hr spent on the project. I’ll be sure to keep copious notes on the entire process.


F.I.R.E. War-Plan

By mikeBOS | Published: August 21, 2010

Trying to project cash-flow from building up land-lording properties is easy. You just count up the monthly projected rental-income as the properties are acquired over time. Now that I have shifted my focus to rehabbing properties rather than renting them out, projecting cash-flow became difficult. You can’t be certain how long it will take a house to sell and the purchase, repair and selling prices will vary with each property and the economy that month.

Since I am an incessant planner I instead grouped the planned progress by groups of rehab projects, rather than by date, to make visualizing the process easier. Just for fun I added the war paint and innuendo. As you can see, the plan is that the rehab and sale of one house will fund the purchase and rehab of the next two houses, plus cover living expenses for me while I work on the projects.

While plans often go awry and one must remain flexible, it’s still fun to see the potential. As you can see, to exceed my financial goals I would need to rehab 19 houses similar to the project I am starting right now. To do so in 5 years would, no doubt, be more than a full-time job. But still doable.

Click for full-size:


Or there’s option two, which involves settling for a much smaller passive annual income, but puts me living the life I want to live much more quickly:



FIRE: Financially Independent, Retired Early

or

FIRE: Fuck It, Retire Early


Back To Class

By mikeBOS | Published: August 22, 2010

I’ve come to fear the bulging of my email inbox that always happens this time of year as professors send off mass emails to all the incoming students. I’m afraid to open emails. They always hold assignments, or criticisms, or requests for forms to be filled out. I have yet to enjoy man’s fundamental right to be left alone.

Class starts on Tuesday. At the end of this semester I will be halfway through law school. That’s encouraging. I just need to eek by through my classes and focus on building my budding real estate empire as much as possible.

I realized that I only have one September left to fear. After that I can think of the fall as a time of harvest, canning, independent study and lining up my winter video game and movie queues. Instead of a time of dealing with inane requests, piles of paperwork, long commutes and mountainous tuition bills.

Here we go.


Train

By mikeBOS | Published: August 31, 2010

I just finished reading John Adams’ biography. I feel a kinship with the man, being that we grew up in a similar way, went to the same school, have similar scholastic interests. Adams’ pontificating on the beauty of his farm that he would ride around on horseback in his old age is particularly comforting.

My ride to class is so pleasant. I pass by farms, grazing cattle, old New England towns, Walden Pond, world class universities and forests upon forests. I catch these scenes whenever I take a break from whatever legal treatise I happen to be reading to look out the window.

I think a lot of the discomfort I feel about school is actually discomfort about the uncertainty of my financial future and the potential lost income I am missing out on by being in class instead of getting to work. Those feelings go away when I focus on the property rental income I will soon be able to collect and the idea that I will be simultaneously going to school and working towards financial independence at the same time. – Rather than simply digging myself into debt and pushing financial independence farther off into the future by waiting until graduation to start making money.

Sometimes I think, once this advanced degree is done, that will be it. I will be so happy to be done with formal education. But once in a while I get this romantic notion that I will go to divinity school, or study art history, or get an MA in physics. Riding the train in the morning and tending to my investments on the weekend like a New England scholar-gentleman of old.

Adams, as a boy, told his father that he would prefer to work rather than go to school. His father, thinking to teach him a lesson about working for a living, let the boy take the day off of school. He woke him at the crack of dawn, worked him to the bone, sweating all day tending the field and the livestock and at the end of the day asked Adams how much he liked the idea of working for a living now. Adams replied, “I like it very much.”

The next day his father made him go back to school. And so off to class I go.


If You Want My Advice

By mikeBOS | Published: September 7, 2010

No man gives so freely as the man who’s giving advice. So many people like to advise on the impossibility of something, or the surety of another, or the soundness of any type of thing of which they have heard good things but of which they have no particular knowledge themselves. And so I found myself, the other day, peering through the windows of yet another possible investment property.

It had the markings of a real find. – Large single-family home next to a large state university. I could rent out single rooms to students quite easily and at a good price. It would only be a short walk for me to the train to get to my own classes and obligations in Boston. There was a small yard. The building was in fine condition.

It was bank-owned and they wanted to get rid of it quickly so the price was low. Plus, there was a one bedroom apartment in the walk-out basement that could also fetch some additional rental income. A real find by all standards.

“Are you thinking of buying this place?” Came a voice from behind as I peered through one of the basement windows.

“Why, yes,” I was confused as to who he might be, since the place was bank-owned.

He proceeded to tell me about how he was absurdly upside-down on his debt for the property and so three months ago he telephoned the bank and told them they could have it, he wasn’t making any more payments. He had started renting a studio apartment next door. He was very informative about the history and condition of the building.

He said, “You should buy this, it’s a good price. You can’t go wrong with real estate.” Now, he has no financial interest in the property being sold. So I judged his only motive to be one of doling out a good piece of advice to a young man. He was maybe 15 years my senior. I agreed with him about the price but the irony of his words, given his predicament, was apparently completely lost on him.

Then he told me of his misfortune. “I’m a carpenter, I was doing well until last fall when I got laid off.”

“Oh! I got laid off last fall too,” I volunteered and instantly regretted it. I saw a momentary look of confusion on his face, apparently wondering how, after a year of unemployment, I could be in a position to purchase a cash-only foreclosure property. But he didn’t pry.

Then, as we talked about the structure and the misery of the current economy, we came about the front of the house and I had a striking, stereotypical vision of our opposite state of affairs. There in the driveway our cars were parked side by side. His shiny, late-model, 10mpg truck, which he was surely still making payments on, was parked right next to my slightly dented but well-maintained, 30+ mpg, 10 year-old sedan for which I’d paid cash.

We were both single. Likely made similar incomes and were laid off at the same time. Given his age he’s had 15 more years than I have to amass savings. Yet here I was about to pay cash for a house he couldn’t even make the monthly payment on.

Now, I don’t begrudge people the opportunity to make mistakes. – Or to push their luck financially. I understand some people have a harder time seeing the value in preparing for the unexpected. But for goodness sake, if anyone in that scenario ought to be giving out advice, it certainly wasn’t him. I feel like shaking some people and saying, “Look at us. Look at you. Look at me. I know what I’m doing. You don’t. Try shutting your mouth and opening your ears for once. Just once! Please, if not for your sake, then for mine.”

But I don’t. People would hate me. So instead I just took his advice as I take most advice, with a smile, a knowing-grin, and an unspoken thought of rebuttal.


House Hunting Day 60ish

By mikeBOS | Published: October 5, 2010

I have been shopping around for an investment property for over a month now. I have contacted a couple of real estate agents but all they seem to want to do is show me buildings out of my price range that are either unrentable or not in any need of rehab and that I am not even remotely interested in. If I tell you I am interested in paying cash for a distressed property and rehabbing it, why on earth would you try to drag me out to look at a newly finished, overpriced, 5 bedroom house in the country??? Hoping that I’ll “fall in love with it”? I’m a childless, unmarried 26 year old male, get a clue.

So I have been going things alone, tracking properties on the internet, contacting the selling broker to arrange showings, and making offers on the spot. So far I have been prepared to submit three offers but when calling to do so was informed the property was already in negotiations and I have also submitted two written offers, only to be outbid. I suppose such is the way when you’re dealing with bottom-of-the-barrel foreclosures.

All the properties I have seen are bank-owned, cash only affairs that have been sitting empty for several months and, before that, were lived in by owners who couldn’t care less about maintenance since they knew they were being kicked out. Or owners who were even taking out their anger, at their situation or the bank, on the property through outright vandalism.

I am hoping to nab one of these properties soon so I fan fix it up and either put it back on the market or get it rented out, which one I do will depend on the property I get.

Anyway, here’s hoping this won’t take another 60+ days.


Early Retirement Extreme

By mikeBOS | Published: October 13, 2010

I just finished reading Jacob’s book from over at EarlyRetirementExtreme.com. Frankly, I wasn’t prepared for its length. When I first held the 200+ page book in my hands, it felt about right. But then I opened and saw the tiny, tiny print stretching to the edge of each page. Jacob mentioned he did this to keep the price down and, since my eyes are still young, I don’t really mind. [[UPDATE:: Jacob has informed me that the font and layout is the normal size and that he never mentioned keeping the pages down out of concern for printing prices. Not sure how that notion got into my head.]] But it does make for a LOT of material, all of it worthy of your time.

Jacob’s academic background definitely comes through in the writing. It is almost as if he has tried to create a cite-able, first work to establish a new discipline and set a foundation for future conversations on consumerism, economic specialization and accruing assets to live off of. While people clearly have been rejecting consumerism, embracing frugality and striving for and attaining financial independence throughout history, the books we have so far are really just one off, autobiographies with a little bit of advice thrown in. I think Jacob is trying to change that with this book, trying to put down some first principles on which we ERE types can agree and build our conversation out of. Or perhaps he was being less ambitious, either way, it is nice to have things laid out in front of you in an organized, logical fashion. Even as someone who is immersed in the early retirement community we have strung together here on various blogs and message boards, it is nice to read through the methodical, logical argument of the things that I already somehow know intuitively just from thinking on the topic for years.

I found one of Jacob’s remarks on loans and interest particularly salient. He brings out that the entire idea of loaning out money at a given interest rate came about so that people could buy items which would create a profit for them greater than the interest rate they borrowed at (Such as borrowing money to buy a milk cow or a factory, etc.). And so, the entrepreneurial in the society could then pay back the loan and still have a profit. But at some point, quite recently, people in the US began taking out loans, not to buy something that they hoped would make them a profit, but rather to simply buy disposable consumer goods. Just about every retail item can be financed today. But now financing isn’t done to entrepreneurs hoping to make a profit, but rather to consumers who are simply spending money they don’t have but hope to make in the future.

While the practice of financing consumer goods is all around us, by Jacob putting it in its historical context it really brings out how crazy the idea of taking out a loan to buy a television really is. It’s not simply unwise, imprudent or something to be written off as the foolishness of the impatient, it actually represents a fundamental shift in what the economic system is willing to finance. And it creates an opportunity for people who are willing to save to make their living by simply loaning impatient people money to buy televisions.

Anyway, I have been following Jacob on his blog for quite some time now and have been looking forward to the book. I congratulate him on it. It is a remarkable accomplishment and I think the book will be a resource for people like us for quite some time.

I gave the book 4-stars on amazon and include my review below. Jacob admits in his first footnote that he is prone to over-complicating things and I do think that happened with some parts of the book. Some pages can be a bit of a slog. For people familiar with personal finance and early retirement concepts it is easy enough to follow along, but for someone unfamiliar or just coming to the topic I could see them getting frustrated trying to get through some sections. Never the less, the book is logical, clarifying, informative, interesting and Jacob’s humor comes through successfully throughout its pages. It is a needed and welcomed addition to the library of available early retirement books.




My amazon.com review of the book:

This book is an analysis of the modern consumer mindset, our culture of debtors, an economy of specialists all dependent upon one another for their expertise, and it presents an alternative option for the lucky few who have the drive, mindset and courage to go about life a little differently. The author presents an alternative to devoting your life to a career, financing an appropriately luxurious vehicle depending upon your income, mortgaging an over-sized house, filling it with ‘stuff’ and then working 40 years to pay it all off.

The book analyzes where the consumer culture came from and picks apart the details of what it means to live in a consumer culture. The book has great moments. The author compares a working man, who makes his living by selling his time, to a farmer. And he compares a man who lives off managing his assets to a hunter. A farmer always has something that can be done, and so hard work and busy-ness are his virtues. “The more he does, the greater his reward.” But a hunter must wait quietly for his opportunity to strike; patience is his virtue. And so it can be hard for a farmer, who has accumulated enough wealth to live off his assets, to suddenly become, or to even understand, the patient inaction of the hunter. A life sitting around patiently collecting interest on investments might look like no life at all to the habitually “busy”.

The author makes a compelling argument around savings rates and compounding interest to show the tremendous worth of quickly saving up your assets rather than putting away 10% for 40 years. I also appreciate that the book is written without particular investing or career advice. As the author notes, any investment advice he could offer would be quickly outdated, and how one invests one’s assets isn’t nearly as important as developing the mindset that one ought to be an asset holder at all.

So many people live unexamined lives that lead to risky financial decisions, the wasting of thousands of dollars of resources, and ultimately pointless toil. For the few who have the curiosity to even read a book like this, they will be empowered with the knowledge that there are viable alternatives.

The book includes a detailed table of contents, index and extensive recommended reading list. It is all well laid-out and put together.

I will say this book could turn off people who are new to the idea of early financial independence simply to due to its depth and complexity. If you’re looking for an overview of what the early retirement life is about or are just beginning to flirt with the idea yourself, well, this ought to be the 2nd or 3rd book you read on the topic. If it’s the first I’m afraid you might get intimidated, even though it is all spot-on, by the hyper-logical and analytical narrative style.


Simple

By mikeBOS | Published: October 18, 2010

The simple solution, though it may appear to take longer than those labor-saving devices, is often actually faster.

The tire on my sensibly-purchased reliable sedan was looking a bit low so I thought I ought to top it off with some air. I’d left a well-made floor, hand pump designed for bicycle tires in my parent’s garage last spring after I sold my previous car. So I went looking for the pump. It is all metal with a large, accurate pressure gauge at the bottom that makes it easy to quickly and precisely fill a tire. It takes about 100 or 200 strokes to get a low car tire at 20 psi up to the required 32 psi. Not too much work, takes only a few minutes.

Well, I went looking for the pump high and low and could not find it. My father is a great, moral man who has accomplished a lot but only in spite of his organizational skills, not because of them. If you need a screwdriver to fix something in his house you need to set aside a good 25 minutes to get it done; 5 minutes to fix the problem and 20 to find the screwdriver. First you check the junk drawer in the kitchen, then the various hutches in the hallways filled with miscellaneous items, then the garage and its various cabinets, then the basement where the toolbox is located (it’s almost never in the tool box though), and finally out to the shed in the backyard. If you’re lucky, it will be in one of those spots.

Well I could not find my pump anywhere. Perhaps someone has borrowed it or some such. Anyway, my mother helpfully asked, “Why don’t you just use our electric pump? It will be faster than doing it by hand.” I told her because it’s noisy, slow, and requires me to idle my car in order to use the cigarette lighter to power the thing. Though, since I couldn’t find my manual pump, I had to resort to the electric anyway.

So instead of simply attaching a hand pump to the tire and pumping it up with a few minutes of brisk strokes I had to find the keys to my brother’s car where the pump was located. That required rummaging through various drawers. Then when I had the pump in position it turns out the cigarette adapter in my car, which I’ve never used, doesn’t work. So then I tried to use my brother’s car to power the pump. He’s off at college and decided to leave his car at my parent’s house. Well, his car battery was dead. So then I had to get the keys to my mother’s shiny new car and pull it right up next to my car in order to power the pump to top off my tire. If I’d had the hand pump I would have checked the pressure in all the tires but with the electric pump that would have required moving my mother’s car at least twice in order to reach all the tires so I didn’t bother.

So much for the labor-saving electric pump designed to make life easier.


A House!

By mikeBOS | Published: October 24, 2010

After over two months of shopping around I have finally got myself a house. It was a bank-owned foreclosure that I got for a paltry sum of money. The transaction was all cash so I had no need to bother with loans, closing fees or concerns about my credit report. I, by the way, have no idea what my credit score is or looks like and I don’t particularly care as I have no plans to ever finance anything ever again.

It’s a small, two bedroom single-family home on a secluded lot about a mile from the center of a small, central Massachusetts town. It has a few issues that I intend to take care of over the next month or so on my long weekends between classes. Hopefully I can start looking for a tenant by January and then start shopping for the next property.

It’s a sound property structurally, but it does need a lot of cosmetic and finishing work, all of which I’ll be doing myself. It needs a new kitchen floor, could use some new carpets, there is some interior painting that needs to be done, appliances need to be put in the kitchen and a new furnace needs to be installed. But everything else is in terrific shape.

It’s a place I wouldn’t mind living in myself sometime if the need ever arose.

With this property under my belt I am closer to FI than ever. I’m very confident that, come graduation, I will be financially independent and looking for work will be more of a novelty than a necessity.


Homemade Cigars

By mikeBOS | Published: October 29, 2010

I took a weekend up in northern Vermont a few weeks ago to visit some friends. I stayed over at a friend of a friend’s house and, as it turns out, he’s an enthusiastic tobacconist much like myself. He grows several varieties of tobacco, cures and ferments them in his barn, and smokes them in a pipe throughout the year.

Happy to be with someone who shares a passion for smoking (hard to find since modernity has deemed it unfashionable) we talked about it at length. At the end of my stay he was happy to hand over a couple of dozen leaves to me so I could smoke them in cigarettes and try my hand at rolling a cigar. He only smokes pipes so he wasn’t quite sure about cigar-rolling techniques.

Of course, when I got home, the internet came to the rescue and I got together just enough information to think that I actually could roll a cigar. Below is a photograph of the result. It smoked much better than it looked.

Now, of course, I’m thrilled to try growing my own leaves starting next spring. With a cellar full of homemade wine and a humidor packed with homemade cigars I’m not sure I’d be able to feel much richer. Now I just need to set aside 12 years or so so I can try my hand at putting together my own well-aged scotch.


Idle Kings

By mikeBOS | Published: November 3, 2010

As I approach financial independence my mind is shifting from solving the problem of how to secure up my finances to what to do with my time. I think people who are into achieving financial independence at an early age are problem-solvers, planners and strategists. There is a joy in figuring out how to manipulate your finances just to squeeze out an extra few dollars here. – Or how to save a few extra dollars there. I could spend entire afternoons and evenings pacing and planning my finances 10 years out and be in complete bliss. – Perhaps approaching the Aristotelian eudaimonia of contemplation for the sake of itself.

So what to do once the money problem is solved? Some people are passionate about a cause, a hobby, or they want to be free to pursue long-term entrepreneurial endeavors. Some people are working towards early retirement because they have something else in mind that they want to be free to do.

But others, myself included, am not so much motivated by what I hope to do with financial independence, but rather, I’m simply motivated by my desire for security, independence and my distaste for regular work and all the alarm clocks, compromises and politics that come along with it. So now that I am very close to financial independence, I am looking anew for the next problem that needs to be solved, planned-for and strategized over.

I have written about how I look forward to afternoons of reading great American novels, attempting to grow a majority of my own food, doing some long distance hiking/biking and boat trips. And I do look forward to those things. But I just wonder if there’s some great problem out there I could be as passionate about as I have been with seeking FI.

Now if no great problem does catch my interest and all I have to look forward to is a life of idly doing whatever I wish, believe me, I’ll happily manage. I just wonder what the best way to go about things is. Perhaps a monastic existence focused on the life of the mind is in order. Or do I have a duty to charitably help lift up my fellow man? Should I devote myself to fighting injustice? Or should I just keep trying to multiply my wealth in order to be philanthropic with it in the future?

The typical responses to such an inquiry are, “Go make more money if it’s so easy and become super-rich,” or, “Travel!” or, “Volunteer!”

Of course this problem of ethics is as old as humanity. Kings and Patricians have dealt with it for centuries. But it is something that isn’t talked about much in modern America because most people don’t have much choice in the matter. They have to devote the majority of their lives to making a living. Or I should say, they thoughtlessly take actions that require them to devote the majority of their lives to making a living. Because of this we have magazines and newspaper columns every week devoted to how best to make a living for yourself, or manage those things that come along with making a living like careers, modes of commuting and mortgages. But the financially independent, on the other hand, aren’t constantly surrounded with periodicals on how to live the best life, authors opining on what the right amount of volunteer hours per week is, debates about how to get the most out of your entrepreneurial garage-tinkering that you think might turn a profit in a decade or so, or thoughts on the intrinsic value of working towards interesting academic degree programs for the sake of themselves. So we are left to fend for ourselves.

The problem of what to do with oneself is by no means exclusive to the financially independent. But having all day, everyday free to do with whatever you wish does make the issue more pronounced.


A Year Alone In The Desert

By mikeBOS | Published: November 17, 2010

Six years ago I dropped out of school in my junior year, bought some land in the middle of the New Mexican desert, and lived in a tent for a year. I borrowed an old truck from a new friend to bring some lumber and canvas out there so I could have a platform and a respectable 10′ x 8′ A-frame tent. I had solar panels to charge my laptop and some LED’s. I had cheap cellular internet. I had bottles and bottles of homemade wine, a (as you can see) cheap digital camera, a pile of books, my motorcycle, and a lot of sleep to catch up on.

I was somewhat of a hermit, but not really. I often chatted on the phone with friends and family back home in New England. I would ride my motorcycle, my machine, the eight miles or so into town and chat with people at the gym, the library, the grocery store and occasionally at a bar where I would stop in for a beer. Though, sometimes I could go a week without seeing anyone.


Flower


I read pretty much everything Hemingway has ever written, reread lots of Plato, some of the gospels, Thoreau, Descartes, Allan Bloom, as well as a lot of finance, investing and economic works. I went to the desert with a good-sized library of used books and made good use of the nearby small-town’s inter-library loan program.

I would fill up two collapsible five-gallon plastic jugs with water whenever I went into town and would ride them back to my tent slung over the rear seat of my bike. I would go to the gym whenever I wanted a hot shower. And who needs plumbing when you have a shovel?


Rebel


I hiked a lot. I was less than a mile from the Rockies’ Monzano Mountains.

My one regret about the whole thing is that I didn’t get to know my neighbors. There was a guy who lived in a trailer about two miles from me, living like me in the middle of the desert. And there was a Mennonite family-farm I passed on my 8 mile trek into town. I occasionally saw them hanging their laundry and tending their fields, but I figured they lived there because they wanted to be left alone.


Borrowed Truck


Supplies


On especially hot days (105+) I would usually go into town looking for some AC, go find a shady spot near the peak of a local mountain, or just sleep away the hottest part of the day. At night, in the winter, the temperatures dropped dramatically and I would usually stay bundled in my sleeping bag until the sun came up.


Moo


There were free range cattle that would occasionally pass by my place. – Some more curious than others. I would moo at them, and spend time trying to get close enough to pet them but they would always get skittish with my impending approach. I made judicious use of their dung as a source of heat though. Lots of people find the idea repulsive but, when you realize that a 2-week-old cow-patty that has been sitting in the desert is so dry that it is virtually indistinguishable from an old mud pie, it’s not so bad. And it burns without an odor.

Occasionally I would use the BB gun a friend had gifted me to get myself a rabbit. They were all over the place so it didn’t take me long to hone my sharp-shooting skills. I would butcher it, brown the meat in a skillet over a cow-patty fire, and then mix it up with some rice and vegetables I’d bought in town.


20 Gauge


There were uncomfortable days, especially at first, when I would go to bed with visions of tarantulas and rattles snakes plotting to eat me in my sleep. I was fortunate enough to see one tarantula in my time out there, as well as one baby rattle snake that hadn’t yet developed its rattle. Other than that, the closest I came to death was riding my motorcycle through the patches of loose sand on the way to my camp.

Sometimes I long for the desert. It was clean, quiet and spacious. It’s easy to breath there. The stars, especially on a moonless night, – just the memory of their beauty makes me happy. In solitude it was easy to focus on the self. It was always me and the sand; me and the fire; me and my prey; me and the sky; me and the mountains; me and my machine.


Desert


Tent


I only went out there to be left alone. – To escape. – Free of deadlines, commitments, projects, assignments. I didn’t expect to see a burning bush, or kill a wolf, or stare down rattle snakes. I wasn’t there to prove anything or test any limits.

I spent only a few thousand dollars throughout the entire year. I thought about making something more permanent, putting up an adobe or cob cabin and digging a well and never leaving. I think, really, the only reason I left was because I was running out of money. I could have gotten some part-time job in town I suppose, but at that point I had already decided that my goal was to make it so I never had to sell my time again. That meant a solid five years or so of working full-time and saving every dime. If I was going to work for five years, I figured I had better find something that I didn’t mind doing.

So, after a year of living in it, I fired up my motorbike and rode out of the desert one last time.


Me And My Horse


FI at 28 & ER at 31

By mikeBOS | Published: November 30, 2010

I recently updated my about page. It formerly said that I was a 26 year old looking to retire by 34. I’ve now updated my age to 27 and my retirement to 31.

Happily, the way my rental house, stock investments and school are going, I ought to be financially independent before I’m 28 (late next fall). That’s with living expenses hovering around $15k/year and counting land-lording income. I suppose I could just ‘retire’ at 28 and not work. But having spent eight years in school and having a bit of an itch to work in our court system, I still may have a go at a 2 year stint in either a clerkship or as a low-paid, public servant, criminal attorney after graduation. They are jobs that are fun for someone with the right interests and, fortunately, since they don’t tend to pay all that well, it means they aren’t overly difficult to find since so many law students are only even in school at all because they have dollar signs in their eyes.

I’d hate to be watching some crime drama in 20 years and thinking wistfully about how I passed up my chance to be in the thick of it for a while. – Protecting constitutional rights, doling out justice, policing the police, cracking inside jokes with the bailiffs. I spent last summer working at a prosecutor’s office and enjoyed the bulk of it.

When exactly to say I’ve ‘retired’ will be hard to nail down. It won’t be when I’ve reached financial independence because I might keep working full-time for a bit after that. And even after I am done a potential 2 year working stint, I still plan to act as a landlord for a while.

Whether or not part-time land-lording can be considered retirement, I don’t know and don’t much care. But I’ll be 31, my investments will be making money much faster than I can spend it, and my only work will be a few hours a week managing investments at my convenience, what do you call that?

I guess us young, financially independent types really need a new word. Since to be retired really kind of requires being retired from something. I don’t think you can exactly call seven years of school or two years playing Perry Mason in the local court house a grueling experience that needs retiring from. ‘Financially independent’ works somewhat, but it still doesn’t capture the non-working aspect of it. i.e. I could be financially independent but still be working forty hour weeks. Perhaps “Part-Time Capitalist” captures it. Since the work is definitely part-time and capitalist is certainly an accurate description of the role one is playing in the economy as an investor. It’s a bit of a mouthful though. Or perhaps ‘retired’ is the best we can do.

I’m afraid we’re such a rare breed that language simply doesn’t have the need to come up with a term for us. On the rare moments when we have to explain ourselves society will just have to expend a few extra brain cycles in order understand what we can only communicate to them in multiple words rather than a pithy title.


Half Way Done Law School

By mikeBOS | Published: December 21, 2010

Edging up against Christmas, I just finally have finished my last exam of the semester. Now it’s just the spring to go, and then one final academic year and I’ll be through with law school. It’s too bad really, I’m rather enjoying myself.

My peers all seem to be stressed out and over-worked. I don’t know if it’s because I’m so laid back about exam results, or because I’m some kind of genius, but I just don’t seem to end up working nearly as hard as my peers do. I hear stories of people spending 3 weeks in the library, six days a week, ten hours a day studying for the same exams that I prepare for by going over my notes for maybe 3 or 5 hours the day before the exam. I just took a three hour exam where we were allowed to compile an outline to bring into the test room with us for reference. Mine was eleven pages long. Everyone else had 75-100 pages of notes. How are you going to utilize 100 pages of notes during a three hour exam???

Now, granted, I’m only pulling a 3.5 GPA. But if a 0.5 difference in GPA requires twenty times more effort, why bother? Better to spend my time rehabbing a house and securing my financial future in other ways rather than trying to impress a potential future employer (especially when there may not even be one if I choose to retire or start a solo practice instead), and ruining my love for the subject by beating myself over the head with it.

I went into law school with a bit of reluctance. If my real dream is just to be some kind of gentleman farmer, why bother with all this? But a 100% scholarship + some free time on my hands sealed the deal. I can’t afford my self-built home and acres of land yet, so why not get that degree in the meantime while my savings accumulate? But now that I am in the midst of it, I’m an enthusiastic student. The law is a playground. There are boundaries and principles, indisputable logic and fuzzy definitions of ‘reasonableness’, where you strive to create a more just world, but if you get the wrong client, you settle for just having fun seeing how clever you can be.

So I am at the halfway mark. The last half is about half as difficult as the first half. So things should be even easier from here on out. Now it’s time to enjoy my winter break, polish the resume to see if I can’t land another interesting summer internship, and get back to work fixing up that jalopy of an investment house of mine. – Oh, and maybe some video games.


House Progress Report

By mikeBOS | Published: December 23, 2010

So I purchased a house in October. I realize I’ve been short on details on the transaction so let me fill a few things in. I paid 100% cash for the property, zero financing, which made things a lot easier and faster. It’s a little 100 year old 2 bedroom in a central Massachusetts town. I paid $23k for it. It was a bank owned foreclosure, had no heating system, burst pipes, a leaky roof, old carpets, broken appliances, a couple broken windows, minimal insulation, a tub that needs to be replaced and it was missing a few closet doors. Easy enough!

Despite being a computer nerd, a law student and a classical studies major, I’m pretty handy. I was in a building trades program in high school where I learned a lot and gained a lot of confidence in what I can build. Plus I’ve helped my father and brother rehab and put additions on their homes over the years. So to look at this house when I bought it, it would be easy to be overwhelmed. But I just saw a bunch a little things that had to be done and wouldn’t really be too difficult. The exterior’s in good shape with a solid deck and vinyl siding that’s nearly flawless.

Within the first two weeks I patched the roof, sealed up the foundation, fixed all the plumbing, installed a heating system, put in wired carbon monoxide and smoke detectors which the house never had before, fixed the broken windows, added over 150ft of rolled fiberglass insulation and pulled out the old tub. So I still have to finish putting up a ceiling in the kitchen, paint a couple of rooms, install the new tub, patch some drywall spots, reframe an exterior door that refuses to open, replace the carpets and put in the kitchen appliances.

I’m hoping to have all that all finished up by the end of January.

So far I have spent about $1,800 on materials. I paid $540 for a year’s worth of insurance in case the place burns down, and $860 to cover taxes through to 2012. I expect the remaining repairs and upgrades to cost me about $3,000 more. The previous owner paid $90k for the place, but then got foreclosed on. I think, in the current market, fixed up, conservatively, I could get about $65k for it. I plan on renting it out for about $750/month for a few years, then either living in it or selling it down the road when hopefully the market will turn around and I can get someone to pay $90k for it again. As a house I wouldn’t mind making it my retirement home except for one thing, it doesn’t come with much land. It’s private on a dead-end road, and only has one neighbor you can see, but still it only came with a postage-stamp sized lawn.

So anyway, that’s the project so far. When it’s complete I’ll upload some before and after photos. Then I’ll start looking for my next rehab project. Luckily this property was so cheap I won’t have much trouble finding another one I’ll be able to pay cash for.


$20,284

By mikeBOS | Published: December 30, 2010

in 2008 I spent $24,251. In 2009 it was $23,723. Last January I predicted that this year I would spend $23,780, actually this year, in 2010, I spent $20,284.

Below is a graph showing where most of it went:





Apparently, I’m actually a fairly average American as the majority of my money goes to food, housing and transportation.

I would like, and expect, these numbers to be lower in the future but this year a few things kept it up. First, I was sharing an apartment in Boston that was costing me $735/month. That ended in August, now I’m staying in a room in a small town in New Hampshire, saving me a lot of money, but it did mean I had to buy myself a car. I was helping a friend through a rough time for a few months which meant sharing a lot of my food and transportation costs for a little while. And the big thing making my life expensive is graduate school. Just another year and a half to go. It’s not the tuition, but the commuting 2x/week into Boston and all the transportation and food costs that come along with that. Plus the roughly $2,000/year in books and suits that gets me. I’m not including the money I spent buying and rehabbing my house in this budget. Since this analysis is to look at my personal expenses, not my investment/business expenses.

My food costs are a little out of control. Here’s a breakdown of the $5,392.18 for food:





I get a lot of enjoyment out of food. It’s about the only thing in my life that I approach with an eye towards maximizing immediate enjoyment rather than future gains. I like French cooking, I like complicated desserts and I like dairy. All expensive, labor intensive and generally bad for you. And not very well inline with a minimalist, low-impact lifestyle.

$1,944 for groceries is high. Though, as I said, I have shared a lot of food this year, so perhaps some of this would be more properly categorized as ‘charity’. Though, for food I personally ate, I’m sure the number is still up around $1,600-$1,700/year. Which is a little high. I’d feel more comfortable with it down around $100/month because I know I could do that by just being more careful without having to give up much of anything.

$1,515 on restaurants and $598 on fast food is because of school, mostly. It’s not that I am sitting at home and decide to go out to eat, but it tends to be that I get hungry when I am on the go. Especially spending 12hrs/day at school, having to carry in heavy books with me to campus, there isn’t much room in my bag to include a lunch as well. Plus, getting to go to lunch somewhere between classes gives me one more thing to look forward to in the morning. In addition, I’m there 12 hours, so it’s not just lunch. Often it’s a lunch after my first class, a snack between my evening classes, and then a fast food burger or something from wherever is open at 10pm when I’m walking over to the train station to head home. With effort, I’m sure I could lower this. But it makes school so much better not to have to starve myself all day, or eat cup o noodle 3 times a day. I’m just going to think of this as one of the costs of full-time school. When school is done, this can easily go to a quarter of what it is without any effort or sacrifice.

$812 on alcohol and bars, that includes bringing beer to a friend’s house or going out to a bar to have a beer with a friend. Again, this is 95% school-related social stuff that I think I would rather just bear spending for one more year until I graduate rather than make an effort to cut back and risk being socially outcast from my classmates and future colleagues.

Transportation
My car is a little 31mpg used Focus I paid $1,700 for in August when I left Boston. It ought to last me at least 3, maybe 5 years. I got a deal because it had a couple of problems, but I fixed them immediately thanks to my mechanic younger brother. It has 150k miles on it, but I only drive about 10k miles a year and tend to take good care of cars.

Gas cost me $731 and insurance was $198 for the minimum required coverage.

I spent $1,900 on public transit. That includes some zip car use, lots of subway rides, and commuter rail. I make maximum use of monthly/weekly passes and buying in bulk.

Some other highlights

I spent $1,174 on clothes. This is tough for me to do since I’m happy wearing an old t-shirt and jeans day after day. But I needed a couple new suits, shirts and ties for school. So that’s where most of it went.

$1,120 for education related expenses.

$1,317 on gifts and donations. My siblings and I don’t exchange gifts. But I do still get things for my parents, nieces and nephews and some close friends. Plus I gave a little money to a few causes here and there. Sometimes I jump at offers to give to a cause in exchange for the “free gift” you get, which are usually tickets to a museum, concert or play. Making me look like a better guy on paper since stuff that would normally go under ‘entertainment’ ends up under ‘charity’.

Only spent $283 all year on ‘entertainment’. That included a couple of concerts and movies.

Only $302 fell into the other/uncategorized category.

Only $240 spent on travel. I took a couple of week-long camping trips. And spent a few weekends at friends’ houses one out in Rochester, NY and some other friend’s up in Lakes Region of NH. Makes for close friends and cheap vacationing.




__________________________________________________
Next Year’s Budget $15,000





So the encouraging thing about this year was that it’s lower than last year. Next year, 2011, I expect it to be even lower.

Food $3,500

I will try this next year to keep my grocery bills under $1,200. I’m not going to cut back on my eating out while at school, but between fast food, restaurants and alcohol I paid out $2,922. I’d like to try to keep that below $1,800 next year. Which I think I can do just by not indulging so much in restaurant alcohol and choosing the slightly cheaper places for lunch.

It will be nice if I am able to settle into a place by the spring with access to a yard where I could plant a summer garden, off-setting some of my grocery costs a bit.

Transportation $3,000

I expect transportation costs to come down since last year included the purchase of a car. I expect to spend about $900 on public transit, $1,100 on gas, $500 on maintenance/parts (I’ll need new tires), $350 for insurance and some other miscellaneous stuff like parking and inspections.

Housing ?

Housing is tough to predict for next year since I just bought a house that I am rehabbing, and aim to buy at least one, if not two more next year. I will probably not have any rent to pay since I’ll be living in my investment homes while I fix them up and try to sell them or rent them out. But one thing is certain, I won’t be paying out huge rents to a landlord like I had to for the beginning of 2010.

Education $1,200
This ought to stay the same for books/fees, etc.

Clothes $1,200
I will probably have to buy a couple of more suits and ties in order to meet the bare requirements for that appropriately fashionable professionalism I’ll need to exude at school.

Gifts/Charity $500
Socially, I need to buy certain gifts. I really think I ought to hold back on the charitable giving though until I know I myself am all set for life.

Travel $1,000
Some friends and I have discussed taking several camping trips and perhaps one large 2 week road trip. I’d like to have the money prepared for me to go should they come through on their ambitions.

Misc.$1200
Year of phone service ($300), some video games, entertainment, used books, wine-making supplies, etc.

Stuff ?
I am trying to think if there is anything I will want or need next year in terms of material possessions I need to buy. This could change drastically depending upon my living situation. If I end up settling into an apartment in one of the buildings I purchase, or a house I rehab, and thinking that I am going to live there for the next few years, I may end up needing to acquire certain household goods like a couch. Of course, if this does happen I won’t be in any hurry to furnish the place, and won’t buy furniture for ornamental reasons just for it to go unused. And I’ll make good use of my large family’s social network to collect second hand furniture and cookware for free and only bother with things of high-quality that will last.

2011

So I am hoping to spend drastically less in 2011 than I did in either 2010, 2009 or 2008. My plans tend to pan out pretty well. 2011 will be a big year for me financially. I plan on buying two more buildings to rehab. Bringing my total to 3 properties. I also plan for the rent from my rental properties to exceed my expenses, thus making me financially independent before I have even finished grad school, which will take a lot of pressure off of the job hunt after graduation.

I am also hoping that, among these 3 buildings I purchase, there will be a somewhat permanent home for me. I have been a transient my entire adult life, never living in the same place for more than 18 months. It will be nice to have an apartment or house to call home, where I know I will stay for the next 3-4 years while I build up my retirement portfolio and search for some land on which to build my retirement cabin. This will mean finally being able to buy things that will last, since I don’t have to worry about the cost of moving it from place to place anymore. I’ve always been hesitant to buy stuff, knowing I’d just have to move it all over and over again. I don’t think this means you’ll be seeing me on the next episode of Hoarders, but it does mean I can finally get myself some nice iron cookware, a comfortable bed, and maybe a small workspace to tinker with electronics projects. – And Oh! – a garden of my own.


School Book Rip-Off

By mikeBOS | Published: January 6, 2011

We all know the game publishers play of putting out new text books every year or so and only adding a couple of things here or there so that, instead of buying used text-books off each other for nominal amounts of money, students have to put out $130-$250 for the latest edition of a book. Well, I just did all my book ordering for the spring semester. The “new” list price for the books totaled just over $400. Since the books are so new there really aren’t any used copies available yet. So I settled for slightly-used copies of the previous editions of the books. All together they set me back only $62, including shipping.

The catch is now the reading assignments doled out by the professor will be off in my book by a few pages. So I have to set aside about an hour every semester to go to the library with my used, last edition books, and a copy of the syllabus, and go through each reading to figure out how the new book’s pages correlate to the old book’s pages. It’s a bit of an annoying chore, but it really doesn’t take all that long. Sometimes it can be done just by looking at the table of contents if it’s detailed enough.

I look at it as saving about $300-$400/semester in exchange for about an hour of flipping through pages in the library, well worth it for me.

One nice thing about this is that hardly any students want to go through the trouble of this pagination chore, so the value of the used, previous edition books, plummets. While most my peers pay $150 for a new copy of a text book, I’m paying about $9, shipping included, for nearly the same thing. Yet another nice example of how a wasteful society makes it easy for the frugally-minded to reap the benefits of a massive consumer society without having to participate in the stressful, endless, rat-race required to churn it out.


Traps

By mikeBOS | Published: February 8, 2011

I take the commuter train to get into class twice a week. Which requires, on occasion, that I intimately elbow and bump with the 9-5 professional crowd who trek into the city everyday to work their office jobs. One month of riding with this crowd, on early morning trains, would be enough to make anyone start thinking about early retirement.

Today, I noticed a 2009 or 2010 Jaguar XJ was parked right next to my old sedan. I was appreciating the form of the vehicle when a thought occurred to me. I then looked around as I walked over to the station platform through the inch of snow that had fallen last night. I spotted a recent-model BMW 7-series, and I thought I spotted a newish Range Rover, but I couldn’t be bothered to get close enough to be sure.

Then I did some quick math. Those cars, new, sell for somewhere between $70k and $110k. Taking the commuter train into Boston five times per week costs about $4,160 per year, plus most people also need a short subway ride after the train, which would run another $676/year. Parking at the train station runs around $1,300/year, for 5 days per week for the cheap spaces, and $2,200/year for the garaged spaces. Insurance on cars like that must run somewhere between $2k and $4k per year. Fuel costs are tough to estimate. Most people who take the train live within about 15 miles of it, otherwise they would just drive into the city because the station is too far out of their way. Let’s just guess that they live 10 miles away, that’s 20 miles/day, 100 miles/week just getting to and from the train station which, at 18-25mpg with gas at, say $3.30/gallon, fuel costs must run them somewhere between $700 – $1,000/year. Maintenance on those cars isn’t cheap, though they’re new so there shouldn’t be too many needed repairs. Let’s just peg oil changes, tire wear, etc at a modest $400/year. Unless they paid cash for their cars (doubtful), there will be interest that needs to be paid, which ought to range somewhere between a promotional 3% APR to a more likely 6.5% APR which, after making a modest down-payment for the vehicle would put the cost of one year’s worth of interest somewhere around $2,100 – $6,500.

That puts these people’s commuting costs at $81k – $128k for the first year they own the car.

Which means, there are some people frugal enough and some people extravagant enough, that the frugal one could retire merely on what the extravagant one pays just to get to and from his job everyday for a year.

Now of course, people tend to trade in their cars every few years and so the annualized costs, over a couple of decades say, works out to less than $81k – $128k. But it still stuns me that, just in order to get to their job, some people purchase a machine that costs more than the capital required for a frugal retirement.


Free College Education

By mikeBOS | Published: February 15, 2011

Due to new legislation it does appear that someone looking to retire extremely early, who is willing to jump through a few hoops, can essentially get a college education for free. Income-Based Repayment (IBR) legislation passed in 2009 makes it possible, if your adjusted-gross income is less than 150% of the poverty line for your family ($16,245 for a single person, or $20,295 for a single person living in Alaska), then you don’t have to make any payments on your student loans. You have to provide your tax information to the lender every year to verify your income. And after 25 years, your debt is forgiven.

You can reduce your adjusted gross income in a variety of ways. You can contribute $5,000 of earned income each year to a traditional IRA. You can deduct any business expenses you incur. Contributions to a health savings account lower your adjusted gross income. So you could actually earn upward of $25k to $30k annually or much more if you have a business, and yet still have to pay nothing towards any student loan debt.

Obviously, these policies were written with the typical college student and life-long careerist in mind. Almost no one who is working for a living would seek to keep their income low. But the policy creates all sorts of moral hazards if you consider a person who decides, instead of going to college, to work multiple jobs after high school, saves heroically, and essentially retires at 25 years old with a few hundred thousand dollars to his name.

This person could then go blissfully through a complete undergraduate and graduate academic career. – Studying whatever he wishes and not worrying too much about having to make his resume look good or being overly concerned about what future employers will think of his GPA. He could be in school for anywhere from 4 years, for an undergraduate degree, or 7 or 10 years if he wanted one or multiple advanced degrees. He could, as just about every other typical college student does, live frugally off of federally-subsidized student loans and not touch any of his savings while he’s studying.

Just as an example, let’s take a hypothetical student to see how this might work. Let’s say he found something he liked to study, law, for example, and decided to do 4 years of undergrad in something interesting, then 3 years of law school, just for fun. Let’s say, when he started school at the age of 25, his savings, after years of diligent frugality, were at $300k. His $300k will now have 7 years to mature and compound on itself. If he was lucky and did this during a bull market he might average a 10% annual return over the 7 years, which would essentially mean a doubling of his money.

Our hypothetical student would then graduate at 32 years old with $600k in savings and, let’s say, an outrageous $150k in student loans. Continuing his frugal ways, he sets a withdrawal rate of 2.5% or $15,000 per year for living expenses. He could then take advantage of the Income Based Repayment policy, which only looks at income, not assets, and pay $0/year towards his student loans. After 25 years, his student loan is forgiven.

If at anytime during those 25 years he wants to withdraw more money for some kind of special expense, he would only have to make payments towards his student loans for one year following the increase in his adjusted gross income from the withdrawal, after the year is up, however, he would go back to making $0 in payments per year.

So essentially, our hypothetical student could find himself at 25 years old, with some money in the bank, and be able to accomplish two things by going to school: 1. By living off loans like a typical student his withdrawal rate would be 0% and so his investments would have years to compound on themselves and 2. he gets the enjoyment of stress-free studying of whatever subject he likes without having to consider future job prospects, along with all the advantages that come along with being part of a university’s community.

This would seem like a great option for someone who wants to retire early, but also wants to study something or experience the academic life.


The American Budget

By mikeBOS | Published: February 22, 2011

Doom-and-gloomers like to talk about the train wreck that America’s future financial situation will be. But I’m not as pessimistic. The financial details and problems, as I show below, aren’t so difficult to fix. The only hard part is mustering the political will to do it. Fortunately, necessity tends to make polls irrelevant so the changes will either come because we choose to do it, or because China decides to stop lending us money. Though, my hope is that the political will can be mustered before financial necessity makes cutting costs hasty, and thus costlier, than they really have to be.

The deficit is about $1.2T. As a percentage of GDP it is the highest its been since WWII.

It’s politically unpopular to talk about cutting defense spending. But it’s such a cow. We need to fight religious nut jobs smarter, not harder. And stop worrying about being prepared for world war 3, close most of our foreign bases, stop nation-building, stop paying our country’s most gifted and able young people to sit around in a desert on the other side of the world when they could be here at home designing and building dams and bridges, becoming doctors, engineers, farmers, teachers and entrepreneurs.

Instead of spending on our military as much as the next 20 countries combined, maybe we could just cut it down to, say, twice, what the next weakest country spends? That would move it from $663B to around $200B.

The good news about this budget crisis is that there’s plenty of room to increase the income tax. The marginal income tax rate for people making over $400k/year is 35%. During WWII, when the deficit was this high, the marginal tax rate for people making over $200k(1946 Dollars) was 91%. Just letting the “Bush Tax Cuts” expire for the top 2% of income earners, returning the tax rate on income over $375k/year to 39.1% (from 35% currently) in the US would net $100B/year. Imagine if we dared moving the income tax on income over $500k/year up into the 45% or 50% range, still nowhere near the 91% WWII rate. That is a lot of untapped tax-potential, should the country really need it.

There are estimates that legalizing marijuana could net the Federal Government somewhere between $30B – $100B/year, between excise and unreported income taxes, and savings on enforcement costs. Never mind the cost-saving, and life-saving alternatives to prohibition on other narcotics, which also reaches into the $100B-$200B/year range.

Raise the retirement age to 69 to keep SS solvent. Maybe offer 65 year-olds the option to take a lower benefit in order to retire at 65, or keep their regular benefit if they retire at 70.

Oh, and we spend $164B/year on interest on our national debt. I think we could stand to lower that payment a fair amount. Maybe a temporary high-tax on high-income earners for, say, 5 years, in order to pay off the national debt and lower the national annual interest payment permanently?

So, there are some fairly painless ways to at least cut the deficit in half from $1.2T to $600B. That’s without even touching Medicare or Medicaid, which I’m sure hold bounties of savings within their budgets. We spend three times more on health care per person, as a nation, than any other country.

The political problem though is the American people want to pay no taxes and they want zero spending cuts. You ask them if they want a smaller government, and they say yes. You ask them what they want to cut in order to accomplish that and they say NPR and foreign aid.

If you want a smaller government and lower taxes, you have to be serious about budget cuts. That means cutting defense, the cold war is over. Terrorists aren’t fought with hundred-billion-dollar aircraft carriers, or senseless wars against sovereign nations, they’re fought with small intelligence teams, special operatives and smarter foreign policy.

It means making social security viable. Imposing SS taxes on incomes over $100k, maybe raising the retirement age, and maybe disqualifying people with investment or pension income of over $100k or $200k/year from being able to collect SS, they don’t need it. SS is to prevent old people from being out in the streets begging for food, it’s not to give them extra money so they can go on cruises.

I don’t think balancing the budget is particularly hard, it’s just politically unpopular. Which is evident from the lack of current politicians who are willing to talk seriously about cutting costs. The Democratic President submits a budget to a Republican House that just nips at the edges, the Republican house scoffs at it, but instead of offering a serious alternative with real cuts and adjustments to defense and entitlement programs, they recommend cutting public television. It’s as if everyone wants to run for office, but nobody wants to govern.


Snow

By mikeBOS | Published: February 28, 2011

It seems everyone around me, this time of year, talks about how they want to flee the north for the warmth of a southern climate. On a bone-chilling morning, when a stiff breeze dries out my nostrils, and my eyebrows feel like a roof-ledge dripping with icicles, I can momentarily understand their desire for warmth.

But I think I would miss the blankets of snow. They make the outdoors look pristine. And the cool, dry air, that doesn’t permit any part of your body to sweat for even a moment, makes my skin feel freshly-showered all day long. Contrast that to stepping out of a lukewarm shower on a hot, muggy, July morning, where you spend the entire day feeling as though you’re covered in sweat. And all your clothes, no matter how freshly they have come out of the drier, feel damp the moment you put them on.

And there is a peaceful silence that comes with a winter night. The snow muffles any distance noises. The animals have all gone south, or gone to sleep, deep in their burrows. The humans are all inside by their fires. And so long as the air is still, you can stand outside, perk up your ears, and hear absolutely nothing. The nights are bright from the starlight bouncing off the snow. It is hard to beat the sense of peace that comes from a winter walk in the silent night.

The weekday mornings are another story. – Where cars idle in driveways in an attempt to warm up for the frazzled commuters. – Where traffic is confounded by formerly two-lane roads turned into, due to the piling snow banks, one and half-lane roads. Business parking lots are tighter since the piled-snow demands its own parking spaces, off in the corner of the lot. And a mere inch of precipitation can turn an already stressful commute into a deadly one.

So I suppose I can somewhat understand my neighbors who wish to disappear from this place. But for me, since I have no commute, and if it’s bad weather I can afford to just stay home from classes, I quite enjoy the indoor, winter months when I can indulge in reading, movie watching and video-game playing without thinking I’m wasting opportunities to be out in the sun.

I do think, in the future, I will use mid-January through February as an opportunity to road-trip and camp through the southern states. But I don’t think I could permanently go without experiencing the chilling depths of winter. Plus, it’s too much fun watching the ailing work-a-holics force themselves, against all good sense and without necessity, to drive through life-threatening road conditions while I watch out the window from the side of a warm stove.


Steal From The Young, Give To The Old

By mikeBOS | Published: March 8, 2011

Every few months you hear about politicians suggesting raising the retirement age for social security. But most of the time they don’t suggest raising it immediately, just for young people in the future.

Sure, screw anyone who’s less than 35 years old. Why not? That’s how modern America works, right?

Raise the retirement age for 20 somethings, but not everyone else. Prop up the price of houses so when 20 somethings go to buy their first house they have to give more than the fair market value of the house to the older person they’re buying it off of. Tax the income of productive 20 somethings in order to prop up dying old companies like GM, filled with white-haired executives and multi-decade union members who are “too old to fail”. Negotiate collective bargaining agreements so that “new hires” (young people) work under an entirely separate contract, with fewer benefits and an entirely new pay scale that pays them half as much money over their lifetime as “senior members” receive. Require 20 somethings, who will likely go 5 or 10 years without seeing a doctor, to purchase health insurance so that older people’s health-care premiums will go down. Get rid of apprentice and corporate training programs and just require young people to take out massive, life-debilitating loans in order to get the training required to work in 59% of American careers. Increase the loans we give to 20 somethings in order to get educated so that we can raise tuition rates in order to pay older professors higher salaries. Make up all kinds of licensing schemes for established professions, making entry into new fields more difficult for people who are starting out, never mind that the people already in the profession today never had to jump through such hoops and won’t ever have to because they design the system so that they get grandfathered in. Require bachelors degrees for professions that have never historically required them so that we can give some more old professors some easy, high-paying jobs. Get rid of pension benefits for new employees.

And let’s rack up the national debt, why not? It’s the 35 and under crowd who are going to have to pay it back, the 45+ plus people will be fine. Oh! And how DARE you suggest tweaking social security or medicare in order to make the national budget realistic, those old geezers EARNED those entitlements! So what if we need to place mountains of debt on their grandchildren in order to pay for them? Oh, and let’s make special tax credits for poor elderly people, but forget the poor 19 year old, he can fend for himself even though he hasn’t had a lifetime to prepare like the 65+ year old has.


Dream Job

By mikeBOS | Published: March 14, 2011

I was in the top 5% of my high school class. I probably could have been in the top 1% or even have had a shot to get close to spot number 1 if I were inclined to give it a try. But most of the time the difference between getting a 95 average in a class and a 99 average in a class was a matter of taking on silly extra projects, brown-nosing, and poring over every graded assignment and complaining until you were shrill about the unfairness of every point deduction until the teacher would just give in out of sheer exhaustion. I didn’t much care for any of that, I respected my time and my teachers too much. School, for me, has always been about learning and the content of the class. Grades, instead of inducing stress and anxiety, have always been a mere curiosity for me. I appreciate feedback that can be learned from, and for that, grades can have some marginal value. Sure, some students were just as lazy as me, but smarter, and so had higher grades. But it seemed to me the students around me with the highest of grades cared more about the letters and numbers on a report card than they did about the content of their classes.

Once in a while, throughout my schooling, there would be some discussion, paper or project about what career we wished to enter. My peers’ selections ran the gamut from Police Officer, Doctor, Astronaut, House Wife, Horse Trainer, Pilot, Programmer, Teacher, Construction Worker, Architect, Lawyer, President, Veterinarian, Mechanic, etc. But when I really stopped to think of it during those assignments, there was one thing that always popped up for me as my dream job; a drawbridge operator.

I would see those guys when we would drive past them, up in their booths, just waiting for a ship to come by, and it always seemed to me like the best job in the world. They sit in a spacious office, up high in the air so they must have terrific views to look out at. They’re all alone for 8+ hours without anyone to bother them. They have air conditioning and heat. And all they really have to do is listen for the radio for when a ship calls to them for the bridge to be raised. I can imagine eight hours, five days a week of nearly uninterrupted reading and writing, playing video games or watching movies on a laptop, working on independent software projects, maybe launching a website here or there when I get inspired, creating digital art and music. – All with a guaranteed regular income. It seemed like the perfect job.

My teachers were always dismayed. They told me to take the assignment seriously. I was too gifted. It would be a waste of my talent and mind to babysit a bridge all day. They warned me I would be bored and lonely. They pushed me towards more “challenging” careers. Their efforts were clearly in vain. They failed to see that the real waste would be for me to give up my varied interests and lose my love of having a free, wandering mind, for the sake of a stressful career full of office politics, bureaucracy, and mind-numbing specialization.

Having failed to be able to get my dream job, I have opted for the next best thing, part-time land-lording through my 20′s leading to a retirement in my early 30′s.

You can do more with the gift of talent and mind than merely leasing it to the highest bidder.


Urgency And Patience

By mikeBOS | Published: March 20, 2011

A 21 year-old man has a 28% chance of dying before reaching the age of 65.

I keep that in mind when reading articles like this that argue you ought to wait until 70 to retire.

I feel a sense of urgency in reaching financial independence because I don’t take living into my 70′s, 80′s or 90′s for granted, as a lot of people seem to do. Too many people, particularly men, drop dead in their 40′s from heart attacks, despite their otherwise good health, for me not to think that their fate could possibly be my own. So when people, upon hearing my intentions to retire around 30 years old, advise me to instead be more ‘cautious’ and work 20 or 30 years in order to secure bigger savings, a pension, insurance or some other defined benefit plan, and enjoy an early retirement when I’m 50, I cringe. “You’re still young then,” they tell me. Sure, if you’re one of the lucky 3 out of 4.

I feel like I’m the cautious one, enjoying myself now instead of gambling that I am going to live into my 80′s and thinking I can afford to spend 10 years working in exchange for expensive toys or packaged “experiences” or more security.

But the same sense of urgency that pushes me to want to retire early must be tamed when it comes to making the best financial decisions, which often require patience and timing, rather than action and haste. It takes time to hunt for a proper real estate investment, and then still more time to properly repair it, and finally more time to secure a good, long-term tenant, and then, at the end of the investment cycle, to wait for a good price to sell the place. Urgency in any of those endeavors can lead to waste, inefficiency, and ultimately failure of the entire endeavor. Later, when I get back to investing in securities again, patience is all the more important.

So in order to reach my extraordinary goals put in place by my extreme sense of urgency, I have to practice above-average patience in carrying out the steps to get there. I can see why few people try retiring in their 30′s. It requires the possession and taming of two diametrically opposed traits that rarely go together; people who have one, seldom seem to have control of the other.




“…a 21 year-old man in the 1990′s had a 72% chance of living to age 65.”(See http://books.google.com/books?id=qj8GS77QAgwC&pg=PA364&lpg=PA364&dq=chance+of+living+to+65+years+old&source=bl&ots=oqPbmK9p5m&sig=edkeiV0QWSHF9QVjguwnwnj7KdU&hl=en&ei=PRhtTduVDMSBlAeGobWXBQ&sa=X&oi=book_result&ct=result&resnum=8&ved=0CEQQ6AEwBzgU#v=onepage&q=chance%20of%20living%20to%2065%20years%20old&f=false)


House Photos

By mikeBOS | Published: March 30, 2011

The house is done. It took a couple of months longer than I expected, but I came in under budget. I purchased the place in October, a bank-owned foreclosure property, for $23,000. It’s a 2 bedroom single-family home with a small yard. Over the last few months I learned a lot about construction and remodeling. I dove into things I’ve never done, made a few mistakes I had to do over, banged my head a couple of times, but ultimately ended up with a building I can be proud of.

In total I spent $6,757.57 fixing the place up. Which is good, I was expecting to spend closer to $10k. So that put my total invested cost at $29,757.57. The vinyl siding was fine so most of the work was on the inside. I put in all new appliances, patched the roof, put new floors throughout, painted just about everywhere, installed a new shower, a sump pump, fixed a couple of broken windows, new blinds everywhere, a whole new ceiling in the kitchen plus lots of patches in the other rooms where there was water damage, insulated the heck out of the place, and put up a lot of new drywall and trim.

I have a tenant moving in in two days who has agreed to a 12-month rental period at $800/month. My overhead on the place is about $125/month for taxes, town water/sewer, and insurance. I expect I could turn around and sell the place for about $65k, maybe as much as $80k. But I want to try land lording for a bit, so I probably won’t sell it off for a few years yet. In the meantime I’ll collect rent and see if I can gain some appreciation on the place from the real estate market potentially moving back up at some point. Even if nothing appreciates, the value added from the work I did will still make for a nice profit come selling time.

I enjoyed most of the work. I woke up/went to bed when I wanted. No alarm clocks. – No metrics, no mission statements, no HR morale boosting ridiculousness. I was able to do things my way without consulting a supervisor or a committee. I have a top-notch work ethic so when I get going on a project I don’t stop. I put in several 15 hour days at the house. All together I’d say my invested time is somewhere around 200 working hours. I’m looking forward to finally getting paid for it now.

Below are some before and after photos.
























Irrationality and Risk

By mikeBOS | Published: April 8, 2011

One subject you can always count on to turn people into emotionally-driven lunatics, besides politics and religion, is the proposal of mandatory safety laws requiring individuals to take certain precautions to protect their own life and health. e.g. Safety belts, regulating food and drugs, mandatory gun locks, banning smoking, minimum drinking ages, mandatory safety devices in cars, and mandatory helmets.

The mandatory helmet issue always comes up with me because, sometimes when I bike, I like to go helmet-less, depending on the weather, where I’m going, and the route I’m taking. And, without fail, there is always someone there to admonish me for my reckless behavior.

But if ordinary cycling is not more dangerous than walking or driving, why do people become apoplectic when faced with the proposal of helmet-less cycling? And why are they not as adamant about mandatory helmet use for pedestrians and automobile passengers as they are for cyclists? The position that cyclists ought to be forced by law to wear helmets at all times is completely irrational, yet so many people subscribe to it.

The bottom line of the issue is that if you believe the risk of head injury in cycling is big enough to warrant wearing a helmet, then you ought to be wearing a helmet whenever you get into an automobile, or go for a walk, because the risk of head injury is far greater and the potential life-saving effects of a helmet are multiples of the effects when cycling.

I think the mandatory helmet idea hinges on an attitude that cycling is a recreational activity and not a serious method of transportation like cars, trains or walking. Wearing helmets while playing sports is standard practice and normal. If you view cycling as a sport, rather than a method of transportation, then it makes perfect sense that safety equipment ought to be worn while participating in that sport, since all sports come with their cadre of typically-worn safety equipment.

The problem is that this idea comes from a world-view that automobiles are serious tools with a real purpose, whereas bicycles are kids’ toys and exercise machines to be used for sport. It is completely irrational and based on hunches and personal bias rather than numbers. After all, supporters might say, “Why would you need a helmet in a car? You’re surrounded by airbags and a steel cage. You feel safe, that’s all that matters, isn’t it?” Well apparently so.

But people making risk assessments based on feelings rather than numbers leads to things like mandatory helmet laws that actually kill more lives than they save.

If people wish to live their lives making ridiculous risk assessments about their activities, and the appropriate amount of safety equipment that ought to go along with those activities, they ought to be left alone to make those mistakes that arise from ignoring statistics and physics, and embracing a decision-making system based on misguided gut instincts. It does irk me though, as someone living a lifestyle outside the majority, when people try to make the life decisions they make for themselves mandatory for everyone else.

Dave Moulton put it nicely, “Would you want to be forced to wear a helmet while walking around town? Many people feel exactly the same way when forced to do so while riding a bike.”

If you want to regulate how much risk I am allowed to take on in order to limit the costs to society for my care after a mishap, or to just protect me from myself, I can understand that and even go along with it in some instances. But you need to calculate that risk by the appropriate use of scientific studies, statistics and physics. When you “calculate” and regulate that risk based purely upon gut instincts, cultural mores, and marketing, all you’re doing is imposing your irrational risk assessment upon everyone else rather than actually making people safer.


Old

By mikeBOS | Published: April 14, 2011

Why can’t I call someone old without them cringing? Why is it an insult? And why does everyone pretend to agree when someone says, “70!? That’s not old!” And then proceeds to tell a story of some 94 year old they saw water-skiing on a juicing-machine infomercial?

People could embrace the greatness of having aged. – The intrigue of seeing multiple generations grow up. – The wonders of dramatic world events, shifting culture, changing technology and personal growth that have come about in their many decades on the earth. – The insight of having to live for the present rather than always working towards some distant future goal. – The wealth of a lifetime of stories, memories and friendship.

But instead, they deny they have those things. They put on face creams, dye their hair, or have wrinkles tucked away, out of sight, to hide their true selves. They refer to their similarly-aged friends as young. They steadfastly shy away from things that are only meant for “old” people. – Like reading glasses, canes, white hair, knitting, afternoon naps, and senior discounts.

Why such a negative connotation to the word?

When I think of “old” I think of classic books that have stood the test of time. – Houses and buildings built strong enough to last for centuries. – Wise old professors who adore their studies, students and colleagues. – Sweet ladies who offer you iced tea and cookies in exchange for a little conversation and helping them move something heavy. And of people who are at peace with themselves. They have survived. Still trudging along, often with a wake of contentment behind them.

I think, when old people who don’t want to be called old hear the word “old”, they think of an entirely different group. They think of unsuccessful old people. Old people who are bitter. – Who think the world isn’t what it used to be, that it’s falling apart, and that young people are to blame. People in poor health. People in need of help. People who are scared.

But being old doesn’t have to mean any of those things. In my mind, it doesn’t at all. “Old” is an empowering adjective. It alludes to a greatness and a peak, not a demise.

Our culture venerates youth and novelty so much, and almost entirely dismisses the worth of the last decades of life, that it’s now almost an insult to refer to the old as “old”. I brave the politically incorrect waters, however, and call a spade a spade and an old person old. I watch the recoil of horror as the syllable slips past my lips and the old person with whom I’m conversing begins to protest their status. But what always follows is a worthwhile discussion on phases of life, our cultural obsession with youth, and how, when we’re honest, it really is a whole different experience to be 70 than it is to be 50.

I’m disheartened that people have such a dismal view of the last decades of life that they don’t even want to acknowledge that they, or others, actually live through a distinct and worthwhile epoch in their final years. I, for one, look forward to embracing my final steps and enjoying that unique part of my life. You won’t find me pretending to be something I’m not.


The Trainyard Before Dawn

By mikeBOS | Published: April 19, 2011

I had to get up early this morning. In an effort to reduce my commuting costs for school, I often schedule lots of those extra things, you have to sometimes do, into a single day to prevent me from having to make a special trip just to take care of some chores. But that pretty much means scheduling things early in the morning, since all my regular classes are in the afternoon and early evening.

So that means, once in a while, I have to be to an appointment by 8 am, which requires waking up around 4:45 am just to give me time to shower, put on a suit, and ride the train in.

Waking up to a relentless buzzing alarm has to be the worst way to start your day. I can’t believe I use to do it five or six days a week, regularly, for years. And the idea that I could entertain the thought of keeping that schedule again in the future is madness.

Fortunately, now-a-days, I only get up at this hour about once a month or so. That’s just often enough to remind me how much I hate it and how grateful I am for the 29 or 30 other mornings each month when I can wake up to the sun on my face, rather than a buzzer in my ear. And I know that on those rare occasions when I have to wake up five hours after I’ve gone to bed, at least I have the rest of the month to catch up on my sleep. – Rather than chronically being sleep deprived like so many people force themselves to be.

There’s just one year of school left at this point. I’m predicting that after graduation the number of early mornings will go from one every 3 to 4 weeks to one every 3 to 4 months. Though, I’ll have to give up sleeping in for Lent or something, once in a while, to remind me how lucky I am to not have to endure it all the time.


The Auction

By mikeBOS | Published: April 21, 2011

I attended a real estate auction the other day where they were offering up about a half-dozen properties, four of them I was keen on bidding on.

Two were rural houses, on large 1-2 acre lots, with plenty of privacy which I would have been happy to call home.

The other was a condo I thought maybe I could resell for a profit.

And the 4th, the one I figured I was most likely to win, was a small house on postage-stamp lot in the middle of a drab New England mill town. – No yard, crammed in between a bunch of multi-family buildings. Houses similar to it in its neighborhood sell for about $60k-$70k in good condition. This house was in a state of disrepair and not in the best neighborhood. So I thought maybe I could pick it up for $25k, put $10k and a couple of months work into it, and rent it out for $850/month or resell it for $60k.

The first three properties I was outbid on, as I figured would happen, and they all went for just over $50k. Fair prices, if I’d gotten one for < $30k it would have been a steal. Those guys will make some good money because, once those houses are fixed up, they are the kind of places people will pay over $100k for.

Then this little house comes up that I figured I could win. And what happens? Two old guys, maybe in their 60's, get into a bidding war over the place. They were an auctioneer's dream. Looking at each other with contempt as each kept upping the other. It was a battle of egos to see who could be the bigger fool. I was disappointed when they got up over $30k, out of my price range. I was confused when they kept going up over $40k. And finally I was shaking my head in contempt as they got the thing up to a final bid of $58k. With closing costs and auction fees the purchase price would be around $62k.

$62k???? For a house that, if fixed up, MIGHT sell for $60k or $70k?

No wonder people keep telling me this is a hard business to make money in. It's full of these kinds of guys who figure they can make a quick buck with their retirement savings, end up losing their shirts, and then tell everyone they know about how you can't make any money in real estate.

I'm trying to purchase my 2nd property now that my first is doing so well. I've got a few more auctions to attend in the comings weeks, so hopefully I will get something. I need to get myself a summer rehab project before my exam period is over in Mid-May.


The Road to FIRE

By mikeBOS | Published: May 4, 2011

I’ve received my first rent check. It came in the mail. And it feels a little magical.

I’ve managed to rent the house I spent less than $30k on for $9.6k/year. There’s no mortgage. With taxes ($800), insurance ($400), and some money put away for maintenance ($1k) and vacancies, my annual net looks to be about $7.4k.

So the question I have now is, could I live on that?

For the past few years my expenses have hovered around $20k/annually. But that has included about $8k/year in rent, several thousand per year in work/school-related transportation costs, and several thousand dollars per year in food costs that could be minimized by having more time to cook at home and keep a garden. I think my lifestyle will change drastically once school is over with and I have a place for a garden of my own.

Right now I have over $50k in a high-interest savings account that I am looking to use to buy another house. So, what if I bought myself another house with that money, but to use as my own home rather than rent out? I’ve been looking for a house in the $25k price range for the past month or so, I have a feeling I will get lucky with something in the coming months. The question is, if I do get such a place, and move into it, could I live on the income from my rental property alone?

I threw together a budget to see what that might look like:




I’m pretty sure I could live a pretty good life on this budget. I would have to get rid of my car and trade it in for either a bicycle or, if I want to get fancy, a moped. I couldn’t afford a cell phone, but I probably could afford a wifi-phone either by carrying around my laptop or an old PDA. There wouldn’t be any need for TV. I do like to watch a show now and then but I could download/stream whatever I wanted.

I couldn’t go without the internet. It saves me too much money and provides far too much entertainment and education. Though, if I could arrange to share it with a neighbor, I might be able to save a little here too.

I’d have no problem not buying any alcohol or tobacco. Though I’d be making homemade wine and planting some tobacco plants each spring.

I might be able to afford private health insurance, given my age and good health. But at this income level I’d qualify for free coverage.

Gifts and charity are kind of like taxes. It’s the price I pay for being a member of society.

As far as travel goes, I’m sure I’d take some long bike-camping trips. The only costs are an increase in bike maintenance. I recall I rode my bike from New Hampshire to Niagra falls in high school and managed to find free places to pitch my tent, plenty of free fuel for my collapsible wood cook-stove, lakes and rivers to bath in, and food was no more expensive than my local grocery store, though I had to eat a lot more of it. I think my travel would be limited to this type of affair, not that I’m complaining.

Media, like video games, movies and books, I already don’t spend very much money on, despite my love of them. I buy them all second hand over the internet and I don’t like to hoard things. So after I’ve watched a movie a few times or played through a game, or read a book, I post it for sale and it’s typically gone within a few weeks. So really, the money in those categories is mostly just covering shipping and transaction costs. Plus the public library covers a lot of these needs.

Food would be the biggest adjustment for me. But one I’m eager to make. At $2/day it would be lots of rice and beans together with whatever I could get out of the garden. Meat would have to be reserved for things I can either catch or raise myself. But I could certainly raise plenty of chicken, maybe pork and lamb as well. I’m also eager to try aquaponics. And there’s no shortage of venison in the fall from going hunting with my family and friends. No doubt, securing my food would become a part-time job. But a pleasant one I’m looking forward to, rather than something I have to outsource.

I’ve only budgeted $465/month, $100 of which is to be saved. So the annual expenses would only be $4.4k, leaving me with a surplus of $3k/year to be reinvested or used for emergencies.

I think I could enjoy myself on this budget. Life would be simple and stress free. I don’t think I would quite be satisfied enough, though, to get me to stop working completely.

For that, I would require just a little step higher in expenses. What I really have a longing to do with all my free time is fiddle with robots, alternative energy and alternative transportation. But that requires a bit of capital for tools, materials, batteries, pv-panels, etc. Not much though, it could almost be self-funding. Whenever I build something I could build two or three, one for myself, and one or two to sell. But I would like to have $5k-$10k/year to put towards this kind of experimenting.

The other thing holding me back is food. I’d like to be able to spend closer to $150/month on food. Just so I can afford tropical fruit that I can’t grow, chocolate, coffee, dairy, some seafood, and the occasional piece of beef or buffalo.

So really, to have enough that I wouldn’t even consider going back to work, I would need to get my passive income closer to $15k/year instead of my current $7k. In addition, given I’m so young and who knows what the future holds, I’d like my net worth to climb every year rather than stagnate. I’d also like to be able to get out of the real estate business and deal exclusively in stock by the time I’m 40 years old or so. So maybe getting my passive income up to $20k-$25k/year would be more prudent.

In Conclusion

I won’t quite be ready to declare myself financially independent with the purchase of the next house.

However, I think I really only need one more income property + a property for myself to live in, in order to consider myself financially independent. I have one year of law school left, over $50k to work with, plus the $600/month I’m netting from my current property.

Hopefully I can make this work before I’m faced with graduation and the need to get a 9-5.


The Ideal Budget

By mikeBOS | Published: May 6, 2011

I wrote last post about possibly living on less than $500/month. I figured I could do it, but it wouldn’t be enough for hobbies and the food budget would be a little tight.

So, if spending less than $500/month is not enough for me to be happy with not working, what amount is? I think a passive income of about $1,500/month would do it.





The $1,500 would take away some of the limitations of the food budget and also provide $1,000/month to go towards my hobbies. Mostly that money would be spent refurbishing cars and motorcycles, building robots and computers, and automating all kinds of interesting tasks related to agriculture, aquaculture and the production of alternative fuels. – Stuff to keep me busy through the winters. I think, also, after a half decade or so of building these things I’ll start to get a little tired of it and that $1,000/month could be spread around into other expense categories such as travel, education and savings. There’s also the possibility that some of those projects could be sold to recoup some of the costs or make a profit.

I’m already at a passive monthly income of $600/month from my first rental property, so by adding just one more rental property, and getting a place for me to live at myself, I will be financially independent.


Above The Fray

By mikeBOS | Published: May 9, 2011

So much of my mind this past year has been working on thoughts of the day to day. – How to shore up my finances. – Where I will be living in the near future. – How I relate with others.

I have just finished my 2nd year of law school. The summer has begun not but 2 hours ago. And my mind is already elevated. Unencumbered by a schedule of exams, no longer plotting on how best to prepare for the next test of my skill, I find myself already ruminating in thoughts of virtue, poetry, kindness, art and beauty.

My mind is my own again. At least for the summer. This is freedom. This is why I long to be unencumbered.

To have my consciousness churning to keep track of schedules, dealing with personal politics or working on thoughts of increasing productivity or efficiency, is to keep myself from what makes me happiest.

My lack of ambition makes me free. No need to worry about how to land that first legal job. No concerns about how to build a growing practice of my own. Just contentment in my position. – Gratitude for my lack of want. I need so little. I have no concerns.

I don’t desire power. I don’t desire recognition. I don’t need to accomplish or build or contribute. I can go about things with complete sincerity.

Mind mind is at liberty to reflect, rather than toil.

I will never let this go.


Comments Open

By mikeBOS | Published: May 12, 2011

I initially started the blog without an audience. Not that I particularly wanted one. I was just writing to record my own thoughts. I was embarking on a multi-year financial plan and I wanted a record to see how my plans, motivations and thoughts would evolve through the process. And so the only occasional comment I received was spam.

But now, having stuck with my plan for a few years, some people actually started reading my stuff. And I’ve received requests over the past few months to open up the comments section so here we go. It’s just using the standard word-press comment feature so I’m not exactly sure how well it will all work. If you’re on the homepage, you have to click on the title of the post in order to see the comments.

I’ve also made the archives easier to read. If you click on a month and year to the right you’ll get all the posts for that month/year. Whereas before you would only see one post and have to keep clicking “next” to see if there were other posts that month.


Mountain Tops and Camp Fires

By mikeBOS | Published: May 24, 2011

The summer break has been in swing for about two weeks now and I’ve been reveling in it. My tenants for my first rental property are a dream. I haven’t heard a peep out of them and the checks just arrive in my mail box like magic.

Meanwhile, I’ve been having a good time. I have been binging on some video games. I’ve climbed a couple of mountains. I’ve attended a BBQ. I’ve been reading a fair amount. I’ve been catching up with friends around campfires and in hot tubs. I’ve been visiting with the older, mostly house-bound members of my extended family. And I’ve been looking for my second property.

I’ll probably be buying something in the next few months. I’m hoping to get a duplex this time. I plan to pay cash for it again and spend a couple months fixing it up. The units I’m looking at might fetch between $550 – $650/month per unit. Which would hopefully allow me to net around $900-$1,000/month after taxes/insurance and maintenance. Then, I think I’ll have just enough capital left over to purchase one more duplex just like it by next spring before I graduate, bringing my passive monthly net income up to about $2,600/month. Managing 5 units total shouldn’t be too taxing, especially if I get lucky with the tenants. I don’t think I’d want to deal with any more than that though. And the $2,600/month would allow me to save a substantial amount of money each month, allowing me to eventually get out of land-lording all-together. Not that I mind it, but in 5-10 years that will probably change.

Right now I’m thinking I might get a small RV next spring for me to live in full-time. I could park it at one of my properties if I get one with enough land. A friend of mine has also offered me free space in his large yard if I want to park it there for a year or so.

After buying two more rental properties and an RV I’ll be all tapped out of cash. But with the rent coming in I could then do what I’m good at again: saving. And a year or two after graduation start looking for one more house to pay cash for, but to live in, not to rent out.

In the meantime, I’m just enjoying all this time I’m swimming in.


Vacation

By mikeBOS | Published: May 30, 2011

It’s occurred to me that I’ve now had just over three weeks free from school. And the typical American worker only gets 2-6 weeks of vacation a year. And I’ve barely begun to unwind. I mean, I could spend three weeks scaling mountains every other day and feel like I’m just getting started. – Never mind all the other fun stuff.

When I was working I would take advantage of my company’s leave of absence policy which permitted 30 unpaid days off upon request. And, because of our collective bargaining agreement, as long as you gave 1 weeks notice, the request could not be denied. I also got about 4 weeks of paid vacation, one week of “personal days” (which are like vacation days but you don’t need to request the day off ahead of time) and 2 weeks of sick days. Which all got used up, believe me. Even with 11 weeks off per year, I still felt like I needed one more month.

I remember the sense of gratitude I felt during those weeks not to have to wake up early. And to be able to choose what I was going to do with the day. It was absolute elation.

That sense of gratitude isn’t as strong anymore, since I haven’t worked at a job in over a year and a half. I’m taking my freedom for granted. But school, though easier, does still count for something. And so with the summer here and, classes on hold until September, I’m feeling that bit of gratitude again. – That relief.

I think it’s important to not let that sense of elation slip away. – To remind myself how tough it was to suppress my spontaneity, to climb out of bed on a cold morning without enough sleep only to enter crowded streets of impatient commuters in order to get to a job where my bosses saw me as an adversary rather than a resource.

Reminding myself of how bad it was, keeps me mindful of how good I have it, which extends that sense of elation.


Work Ethic

By mikeBOS | Published: June 6, 2011

The American culture loves work. It seems like a good thing for a culture to revere. If money and success aren’t enough to motivate people to get to work, well, maybe throwing in some admiration from their family and friends for their strong work ethic will help.

But what does someone with such a reverence do when there’s no work left to be done?

They make work.

Stones must be moved from here to there for aesthetic reasons. Fashion must be followed. Postcards must be mailed from the most exotic places possible. Rockets must be sent around the universe. All haste must be made so men may live yet six more months at the end of their lives.

Well I don’t subscribe to that idea. I will take my earned savings that provide for what I have deemed my necessities, and even a few of my indulgences, and be done with it. But my neighbors, family and friends who choose to make work for themselves hold themselves up on pedestals because of their reverence for work. Having provided for their necessities long ago, and without even realizing it, they graduated to employing themselves digging holes only so someone else will be employed because there is a hole somewhere that needs filling in. Then they turn to me, seeing that I refuse to pick up a shovel, and tell me I ought to be ashamed for my laziness.

How am I to respond to such a charge? If holding a walking stick instead of a shovel makes me lazy, so be it. If watching the stars instead of a clock makes me selfish, then oh well. If thinking about poetry instead of production means I’m not contributing enough, then I don’t care to contribute at all.

My inaction makes me an enemy. If I refuse to take up their shovel, I am not doing my part. And if I try to explain why, I am undermining core premises from which they’ve built their moral system.

So I softly disguise my walking stick as a shovel. – My astronomy as a study of navigation. – Poetry as a study of communication. – Philosophy as a study of law.

And I go about trying not to let most people notice what it is that I’m really doing.


House #2 Search

By mikeBOS | Published: June 14, 2011

The search for my second investment property continues. I’m putting together a cash offer right now on a $24k single family home in central Mass. It’s actually almost exactly like my first house. It isn’t pretty. It’s small with a small yard. It doesn’t have any big problems, but it has about 1,000 little things that need to be done. A new sub-floor in one room that used to be a porch. Ripping up carpets. It has old wooden windows that might be ok for a few more years but really ought to be replaced. There’s some siding work that needs to be finished. The ceiling is some kind of cheap foam tiles that have seen better days. From the low-quality of construction I’m betting it’s barely insulated at all. The cabinetry might be salvageable. The pipes burst in a couple of spots but the house is so small there really isn’t much plumbing to really have to deal with. The bathroom’s generally ok. Furnace and water heater look new-ish. The roof’s solid. The wiring’s modern and fine. It has town services so I don’t have to worry about septic or well issues. Looks like there might be a foundation issue that makes it un-finance-able, but perfectly rent-able.

I expect I could get the whole thing into rent-able condition with about 2-3 months of work and less than $10k. It would rent for somewhere between $950 and $1200/month depending upon how good it ends up looking.

That would put my passive monthly net income at somewhere around $1,400 – $1,600/month, that’s after paying taxes/insurance and includes setting a couple hundred aside each month for future repairs.

Hopefully I’ll be able to get this one. Sometimes it seems like it would be easier to move a mountain than to get a bank to take my money in exchange for the rotting houses they don’t want, so I’m not holding my breath. But if I don’t get this one, another like it will come along within the next few months.

 


Nerves of Steel

By mikeBOS | Published: June 24, 2011

An offer I made on some real estate has been verbally accepted. The closing would be in about 15 days if everything is in order (which it never is).

I’m finding myself a little nervous about this one. I’m not sure why. My first house was a complete risk for me. I had no idea what I was doing. I’d never purchased a house before, I’d never painted a wall before, I’d never worked with drywall and plaster. Yet it all worked itself out pretty well and I came out of it with a great investment holding and a ton of new skills. So you think I’d be more confident about the 2nd house.

I think the issue is that I’m finally getting a little low on cash. I ought to have just enough to purchase this second house and get it fixed it up in a few months. Then still have just enough left over to buy one last investment property by next spring, before I’m pretty much wiped out and have to start saving rental income in order to put towards my next purchase.

There’s this little bit of “what if” in my mind that makes me worry if I’ll have to blow all my money on a new roof, or run into some legal issue with the town that costs me $10k, or never be able to find a good tenant who would want to live where it is…

Necessity demands that I take the risk though, in order to get the returns I need in order to be financially independent. It will only be temporary, as the rents start coming in I’ll only be living on about 1/3 of my income and saving the rest into a cash reserve, and then into securities. So I’ll only be “at risk” for maybe 6 months with all my holdings in some rental properties, little cash and minimal reserves elsewhere, until I can save enough to build up a comfortable cushion again.

The only other option is to get a job to pad the coffers. But that is also the worst case scenario if my investments fail, that I’ll have to get a job. So I may as well roll the dice and wait until I have to do it (leaving some cushion so I won’t be looking for work in a panic).

The house that I have a verbally-accepted offer on is a 3 bed, 1 bath single-family home. It’s in a much more urban area than my other place, a short walk to the commuter rail, grocery store and a state university. It’s on a postage-stamp sized lot. It has no driveway which will be an annoyance for my tenants during winter storms. It has a slate roof that looks ok, asbestos siding that’s in good shape, and generally pretty good bones. The wiring has been updated, but the electrical panel isn’t installed so I’ll have to get that in place first thing. The plumbing looks generally ok and even if it isn’t it’s a minimal consideration since it’s just one bathroom and one kitchen all on the first floor with a full basement (easy to work on/fix). It has cheap linoleum floors and dingy carpets that all need to be replaced. Maybe some plaster/dry-walling work to be done. It will probably need a new furnace, which will be the biggest expense for me. It has an old oil steam furnace. The nice thing is, there’s already a town gas line in the house that was used for the stove, so I could use that existing line to install a gas steam furnace. – Which would save the tenants some money on their heat bill. And me when the place is empty.

It’s a good investment at less than $25k. I’m hoping to have it restored for less than $15k and it ought to rent out for $800-$1,000/month. Depending on how good I’ve got it looking when I’m done.

At the crazy real estate peak in 2006 it sold for over $150k. Can you imagine? Rents weren’t any higher then. Buying a $150k property in the hopes of renting it for $1k/month???

Anyway, I’m excited to get the key in my hands and get to work. If I do have it in 15 days hopefully I have can have the place fixed up and rented out by, say, October 1st. Then it will be time to take a break, focus on fall-semester exams in December. Then start looking for the 3rd place next spring.


Achievement

By mikeBOS | Published: July 15, 2011

I played full-contact football when I was a kid. From age 10 or so up into high school I was in organized leagues every fall. I enjoyed the game. – The adrenaline of making a crushing hit. Rushing down the field, stiff arming defense men, high-stepping over safeties, and out-running eleven guys was so intense the memories of it feel surreal. When I was running with the ball I didn’t just think I was going to get tackled, I thought I was going to be crushed, break two bones and then get an infection that would lead to my ultimate demise at a tragically young age. Running down the field with hopeful tacklers in chase felt like running from a pack of wild dogs. And when I was the defense man, I didn’t just want to tackle the guy, I wanted to hit him so hard his helmet popped off, his toes curled up and he peed himself. I think my youth and my intensity as a player somehow allowed me to suspend all rational thought when I was on the field. I was a killer when I put that helmet on. – More machine than boy. If I’d found an errant loaded gun on the field, given the state of utter aggression I was in, I’d probably have used it.

The league put players into groups by some weird weight and height metric. I was a tall skinny kid and somehow I always fell right on the upper limit of my weight/height group so I was always one of the biggest guys on the field. We had to weigh in at the beginning of the season and my coach would have me on a water diet for about a week and then a starvation diet for about a day so that I could qualify to be in the group he coached.

I was a pretty good player mostly because of my size. I could tackle anyone and run through just about anyone else. As a team though, we were terrible. I played two full years without a win. Everyone seemed to be bummed out every time we lost, but I didn’t much care. I had fun making a few plays and goofing around with my teammates on the ride back home, so at the end of the day, what’s the difference what the score was?

After every loss we’d get some kind of pep talk from the coach and I’d have to stifle my laughter and pretend to be somber like all my teammates. “Oh woe is us. We’ll get ‘em next Sunday.”

It was the same routine, every week, for two years. Get the mournful pep talk on Sunday after the game. Get the admonitions on Monday’s practice for whatever sins we committed the day before and pay our penance of push-ups or laps around the field.

Then, when I was 13 or so, somehow, everything clicked for us one cool Sunday morning in October. We traveled up to the lakes region on the edge of the White Mountains in northern New Hampshire to play against Plymouth. I remember I scored two rushing touchdowns that day and some other guys scored a couple more. What’s more, we managed to shut out the other team. Like most games, I made some gratifying plays and generally had fun.

But instead of the somber, “We’ll get ‘em next time.” We got the more celebratory, “Way to go,” pep talk. I vaguely remember exchanging some high fives that were offered. But what I remember clearly is my complete indifference to the whole affair. I almost felt more like someone who had watched a team win a game, than a member of a team that had just won. Back in the car, after taking off my pads, toweling off and settling into my seat I recall my dad’s eyes in the rear view mirror as he asked me, “So how’s it feel to win?”

“The same,” I said with a shrug of the shoulders after thinking on it a moment.

“You don’t feel any different? Doesn’t it feel good?” He asked in bewilderment and with what I think was a hint of anger, or maybe frustration.

“ummm, not really.”

In retrospect, I probably should have faked some enthusiasm just so that he could have enjoyed the moment a bit more. But I wasn’t quite yet mature enough to be that considerate.

Now, I look back on that moment with an analytical eye, and an ounce of pride in that young man’s natural disposition.

When I think more on it. I’ve never cared at all for winning or losing things. I’ve never cared about my grades in school. I’ve never cared what my bosses thought of my work. I’ve forever seen attending ceremonies to receive an award as more of an inconvenient social obligation than anything to be proud of or to look forward to.

And still today, I don’t care about titles or my status in others’ eyes. When people talk about being afraid of leaving their job because of a loss of a sense of identity, I have to really dig deep to try to understand what they’re saying. When career-focused people tell me about their goals to attain a certain position in their field simply because of the difficulty in getting there and the admiration that follows, I’m bewildered. I feel like an alien from another world with a complete lack of understanding when people talk about needing to be challenged so that they have something to overcome. It’s like people need to achieve. Not for the sake of bettering themselves, or getting more money or making life easier. But simply achievement for the sake of itself.

I love to learn and engage in new ideas. I love mastering a subject. But who cares what my letter grade ends up being? I suppose it might have some limited use as a measure of how well I’ve learned something, but it’s pretty easy to measure that myself.

Playing a game is a good time, and it’s fun to out strategize your opponent, to out maneuver them with superior technique, or to get lucky at just the right moment. But after it’s over, what’s the difference who prevailed?

And then there’s achievements that are worthy of pride even without anyone donning any accolades upon you or offering you their praise. I’ve completed educational requirements at some of the greatest schools in the world. I’ve thrived for over a year in a desert environment in conditions where most people wouldn’t last a week. I’ve traveled to exotic places. I’ve taught children valuable skills. I’ve taken a house from shambles to a beautiful place my tenants are proud to call home. I’ve made a neighborhood just a little bit nicer. I’m glad I can get good returns on my investment. And I’m glad for the utility some of what I have done still provides for me today in skills, knowledge, and monetary returns. But I don’t feel fulfillment, pride, or a sense of achievement from any of it. And I don’t seek it.

I think maybe this is something that sets me apart and could be one of the reasons I look to simply retire while others around me seek to make their lives a string of recognized successes. I’m happy to work towards or build things that have real rewards and real returns. Studying and learning about the world makes me happy. Making things beautiful and well-crafted is fulfilling. Helping someone is gratifying. Building investments that provide real monetary returns is rewarding. But recognition from others, titles, awards, reaching goals or being admired, envied or respected doesn’t tempt me at all.

I was, and still am, completely unconcerned with the scoreboard.

 


Out of Touch

By mikeBOS | Published: July 20, 2011

 

Apparently I’m out of touch with most of my fellow countrymen. According to a recent study (pdf) most Americans think working 40 hours per week is “part-time”.

I consider anyone who puts about 30+ hours in per week to be full-time. Anything that involves more than three 8 hour shifts is definitely a large part of someone’s week, not small enough to be considered part-time in my mind. And it’s deserving of the benefits most full-time employees enjoy like paid sick leave, vacation time, and access to company retirement plans and healthcare options.

But I must be considered loopy by the typical American corporate employee. Because evidently now people who work five 8-hour shifts per week are considered slackers. I guess that means five 10 or 12-hour shifts is considered average. And to be a “hard worker” you must have to get up to six or seven 10-14 hour shifts in a week.

One thing this study brings out, which is consistent with my limited corporate experience, is that talk about work-life balance and programs by companies to help their employees in their personal lives serve about the same purpose as the landscaping around their corporate offices. They are highly-visible, managed by a disinterested out-sourced contractor, and are just there for show and not to actually be put to any use. From the study:

Why don’t professionals who want to reduce their hours use one of the many work-life programs that offer “flexibility” through reduced hours and flexible work arrangements? Researchers have documented that these “part-time” professionals may be seen as “time deviants” who face what has been called the “flexibility stigma.” Promotions vanish, as does superstar status. Lawyers who reduce their hours find themselves consigned to inside offices, given rote assignments, left out of key meetings. Explains one, “[Going part-time] has destroyed [my career] for all intents and purposes. It has completely, utterly, and irreversibly altered my future, my practice, my finances, my reputation, my relationships, and my friendships.”

Many women lawyers report feeling similarly undervalued, which makes sense, given that “part-time” lawyers often take an immediate wage cut of 20 percent per hour for a “part time” schedule of 40 hours a week.

 

I feel bad for people trapped in this who want to get out or slow down a bit or dedicate more time to their personal growth or spending time with family.

Reading the opinions expressed in the study is genuinely shocking to me. I understand there are work-a-holics here and there who truly love their work and getting things done. I applaud them and marvel at their happy productivity. But can we really demand that a majority of the work-force make earning money the center of their lives? It seems like a poisonous culture that could cause far, far more harm than good. Employees will suffer from stress and anguish. Children will suffer from not seeing their parents. Neighborhoods and communities will suffer from having nobody with any remaining energy to do anything but earn the money to pay their property taxes.

I wish professionals would stand up and say, “40 hours is enough.”

Another aspect of this problem, though, is that it’s not some greedy plantation owner driving his serfs to push and push and push. But rather, the pressure to put in more and more hours comes from the employees themselves as they push and compete with one another.

I try to talk sense into them whenever I’m able to temporarily befriend people with such beliefs. Occasionally I’ll bump into them on the train, or at a party, or at some school-related event I attended because of an interest of mine. Instead of giving admiration when I hear stories about themselves or their colleagues who have been putting in 60 hour weeks, I offer my condolences and wishes that they’ll be able to slow down soon to a more sensible schedule. They try to explain that that’s the norm and that anyone who wants to work at their firm had best be prepared to put in such hours and if they’re lucky, and make partner one day, they could possibly cut down to 40 hour weeks as they approach retirement. I just shrug my shoulders, “Well I couldn’t possibly live a balanced, healthy life putting in more than 40 hours a week for years on end. And that’s as a single guy. If I had kids I expect that number would drop to 30 or 35 at most.”

But they just think I’m eccentric and idealistic and that I’ll change my mind as soon as I “have a mortgage and family” (Never-mind that I already own a house and never had to bother with a mortgage).

I guess I just have to resign myself to standing back and watching the whole affair unravel. Perhaps soon some companies will go from having an unwritten rule that employees have to put in 60 hour weeks, to codifying it into the terms of employment. Instead of complaining about their 9-5er people will start grumbling about their 8-8er.

In the meantime I suppose I will just have to watch from the sidelines and try to enjoy the high rents and dividends put out by this great thirst to be heralded as “harder working” than the next guy.


Hectic July

By mikeBOS | Published: August 1, 2011

I’ve been a bit busy the past month or so.

I’ve moved into a new space. My share of the apartment is $325/month + about $30/month for electric and probably $50-$100/month for my share of the heat bill come winter time. Internet, cable tv and free laundry machines are included in the rent. It’s in a nice old building in a great neighborhood across from a park. I’m only about 1/2 mile to the train station for getting to my last year of law classes. There’s lots of interior space and two private decks to relax on. I’m quite happy with the place.

I also signed up for an intensive, 4-week EMT-Basic course which just ended today. I got a big discount on the course because they were trying to fill the last seat 2 days before the course was beginning. Working in public safety either on an ambulance, or as a firefighter or police officer has always been a bit of an interest of mine. I tried to get hired onto some police forces and fire crews before I got my job working as a utility lineman years ago. Now in law I’ve been leaning towards criminal law to get a taste of the criminal justice system. So when I saw the deal on the EMT class I figured I should jump at it.

The class was great. The instructor was amazing. I met some good personalities and I’m considering, once I get my state certification next month, of applying for some part-time work on an ambulance crew. I go back and forth on getting a job. But I figure I can afford to pay cash for about 2 more rental houses with my current savings. Working maybe 20-30 hours/week on an ambulance crew + collecting rents while I finish up law school would possibly get me enough cash to purchase a 4th place right around when I’ll be graduating next summer. The alternative would be to not work at all, just rehab 2 houses and focus on school. Graduate with 3 rental properties netting around $1,700/month from them, then try to scrape a little income together from a solo law practice once I get my bar card to get myself a couple more properties.

But I’d probably find the EMS work interesting, at least for a year or so. And I like the idea of being able to purchase a 4th rental property before I’ve even got my bar card next November in 2012. Four rentals would gross me around $3,200-$3,400/month and I’d be netting around $2,000-$2,500/month after paying property taxes/water bills and putting some money aside for repairs. Then I’d just need to save up and pay cash for a 5th property for myself to live in sometime in the winter spring of 2012/2013.

With a mortgage-free house and my frugal ways, $2k/month would be far more than I would need to be comfortable.

Now I just have 2 free weeks in August to lolly-gag around and explore my new neighborhood. I’ll be spending one week this month camping on Cape Cod with a couple of close friends. Then year three of law school begins. The summer has simply flown right by.


Big Spenders

By mikeBOS | Published: August 2, 2011

I’m surrounded by big spenders at family gatherings.

My siblings, their spouses/partners, my uncles and cousins all seem to spend at least every dime they make. The thing is, these aren’t poor people struggling to get by. The poorest among them brings in probably around $65k/year, and the others are well into the six figures. So they all have two or three refrigerators. – One for the kitchen, one for freezing meats and vegetables in the basement and one in the garage just full of beer and soda. They all have cars no more than 2 years old. They have houses with unused rooms filled with unused furniture.

When I’m with people one on one I’ll often bring up the topic of personal finance and investing. So I know that none of these people have any savings what-so-ever. They’re barely into their 30′s so they think they don’t need to plan for retirement yet.

I think they used to all just think I didn’t earn much income and was a struggling student or something. So they would rag on me and tell me where I can get a good deal on a much shinier car to replace my 10 year old sedan. “They’re offering 0% interest for the next six weeks, you should go! It would only be like $300/month, even you could swing that.”

Then, over the past six months or so, word has gotten out that I paid cash for a house. And that I’m fixing to do it again a few times over in the next year. Yet I still drive the old sedan around. They’re realizing their apparent financial superiority has been merely that; apparent.

Now, when I’m in ear shot, I’ll hear things like, “I play hard, but I work hard!” or, “What’s the point of earning it if you’re not going to spend it???” and “You only live once!” I think they are feeling a bit guilty about their behavior and my mere presence is bringing it out. They know that TV they bought over a year ago that they’re still making payments on has lost its novelty. They know they should be putting some money away, at least for a typical retirement when they’re 67. They know they ought to be saving something. The fact that no one else is doing it though makes it easier for them to slide as well. They’ll all be on that sinking ship together at least.

I think, if they were honest, their platitudes would sound more like: “I know I should save some money for a rainy day, but damn that car’s shiny!” Or, “I’ve already resigned myself to working for the next 40 years, I may as well buy some crap that at least makes me happy for a few weeks.” Or, “We’re actually in a contest to see who can spend the most on their daily transportation, I just got a little closer to the winner’s circle.”

I’ve said my piece many times over the years. When someone mentions they’re thinking about getting a new car, I explain the vast cost savings in getting something at least slightly used that gets good mileage. And if not, I explain the advantages of saving up and paying cash rather than paying all those finance charges. I’ve suggested to my brother when he was buying his house that, as a single guy, he didn’t really need 4 bedrooms and to consider the cost of heating all those empty rooms through a New England winter. I’ve recommended to everyone, without much success, that they at least make use of tax-advantaged retirement accounts. After a while of that I just started to get eye-rolls. – Or anticipatory glances when someone brought up some financial topic. Realizing I’m just blowing into the wind, now I just say, “You guys know what I’m going to say. You know it makes sense. But it’s your money; your future, do what you want with it.”

My parents are no better. They make a good income and they do a good job of spending it. They make 3 to 5 Caribbean trips every year. I don’t think they’ve ever not had a car payment. The two of them live in a 6 bedroom house. They order exotic meats through the mail. My dad gambles. They carry way too much insurance. Luckily, my father has a good public pension coming to him in a few years, so they actually can afford to be that indulgent and wasteful. But I’m afraid it has set a poor example for my siblings who won’t have the luxury of a guaranteed pension.

After they’ve spent the money I never offer regrets. I’m a good sport about it. I compliment the cars and houses. They show me how cool their new in-dash GPS is, I point out how I love having GPS in my car too (after I installed an in-dash system myself I bought second hand on ebay). “Yeah, but this one’s factory installed, look how sleek it is.” Well, not sure if it’s worth spending over a 1/2 year’s income on a car to get it, but it does look sleek, I’ll admit.

I’m afraid I can’t say I’m above looking forward to a year or two from now when I’m graduated, my rental business is solidified, and I’ve finally had some time to restore an old sports car to use as my primary vehicle, complete with a custom car computer. In other words, when I’ll have the time to make my home built stuff better for my purposes than anything you could buy anywhere. And my time won’t be for lease but for my own use, exclusively.

So much for their platitude of, “You only live once.” I agree, brother! But if you believe it too, why are you planning on spending 50hrs/week for 40 years of your one life working in a job you complain about? You buy things you don’t need and barely use, then you need to scrape together money after your 50 hour weeks to buy the next thing. You only live once. You get 70 to 90 years if you’re lucky. Do you really want to spend 40 of them like that? In a perpetual pursuit of novelty and one-upsmanship? You only live once! One quick burst of a handful of decades within a 14 billion year-old universe that will gobble up your extra rooms and shiny cars and turn them into nothing more than a black hole. You only live once and all you have are your senses, your experience, revelations of beauty and love. The sleek dashboards will barely be remembered. You get 90 years out of 14 billion. Each hour is precious. Any price you could sell them for would not be high enough.

I suppose I’d be naive to think they’d see my success and contentment as something to congratulate and emulate. After realizing I’ve succeeded in being able to not work I’m sure they’ll simply be egging me on to get back to it, “Why not get 5 more houses? Then you’ll REALLY be rich!”

Because, brother! I’m already rich.


Union Support

By mikeBOS | Published: August 8, 2011

My former coworkers are on strike. I wish them the best in their negotiations and I hope they get everything they’re asking for.

One thing that confuses me is the comments sections (the cesspool of online journalism) of some of the news stories covering the strike. It appears about 80% of people think the workers are greedy, should be happy they have a job at all, and are outright offering to scab for Verizon for about $50k/year with no benefits.

50% of the lowest income earning Americans make about the same today (adjusted for inflation), as they did in 1965. Meanwhile, people in the top 90th percentile make about double what they made in 1965. Further:

Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth.

I don’t think there’s anything inherently immoral about a small number of people being filthy rich and the vast majority of people barely getting by. I think, no matter what policies are instituted, there will always be prudent, lucky or ambitious people who pull away from the pack. Even Matthew knew that, “The poor you will always have with you” (26:11).

Practically though, as a policy, outrageous wealth gaps between people can be problematic. Take this well composed and foreboding excerpt from the wikipedia entry on the French Revolution:

Necker realized that the country’s extremely regressive tax system subjected the lower classes to a heavy burden, while numerous exemptions existed for the nobility and clergy. He argued that the country could not be taxed higher; that tax exemptions for the nobility and clergy must be reduced; and proposed that borrowing more money would solve the country’s fiscal shortages.

Income inequality leads to an imbalance of power that perpetuates itself. Through their immense riches the wealthy can manipulate the government and ensure policies that help protect and grow their wealth at the expense of the majority of people who have nothing. And even at the expense of the country itself. The rich can always repatriate elsewhere, or simply hunker down and enjoy what wealth they can protect through to the end of their lives, while their country crumbles around them.

I think what makes Americans hostile to the labor movement is what some call the American Dream, but what might more aptly be called the American Illusion. The idea is that success is earned through sweat, insufferable conditions, brilliance and perseverance. After years or decades of work one can rise to the top and finally be rewarded with a respectable life with time for leisure, family and personal growth. It’s an illusion though, because not everybody can be the CEO. For every top-level executive a company needs thousands of workers. For every one who achieves their dream, there’s 9,999 who fail and end up working below the winner. Yet these masses of people stand in support of policies that reward the winner, and punish the far far greater number who will never achieve their goals, no matter their ambitions or abilities, simply because their isn’t enough room at the top for everyone.

There’s also the issue that 50% of Americans have an IQ at or below 100. Not everyone is capable of being CEO. But many are capable of being solid, productive workers. If laboring isn’t something you can make a decent life out of, what are these people to do? – Be treated like animals of burden and kept complacent with threats of termination if they step out of line? Shouldn’t we treat them with dignity, respect, and a decent wage?

I think, when people see striking workers. They see people who are trying to skip ahead. They want the good pay and benefits, without putting in the decades of struggle to get into upper management. Americans see it as skipping the line and getting something for nothing.

I think the real travesty is the paradigm people have accepted. As the middle class has been eroded away in the past 50 years, people have developed a new outlook on the working world. It’s uncommon now to be able to get a well-paying job at 18 that offers solid pay and benefits and a 30 year retirement plan.

Instead, people have accepted their squalor. They work harder but get paid less than their parents did, and are expected to be grateful for it.

Private sector union workers have held out though, to the vestiges of the past. Of an economy that values all jobs and says someone can be a skilled craftsman for 30 years and be well-paid and respected without having to get a fluff degree and enter the abyss of middle management hoping he comes out the other side as an executive.

If people would shift their outlook from thinking they have to claw for the top spot, and instead used that energy to fight for better conditions in the job they already have, they would accomplish much more.

The IBEW and CWA are doing just that.

As a utility lineman I was able to go to school for free, was fully insured in case of short or long-term disability, and made over $100k/year with minimal overtime. The company still made net profits of over $8B/year and paid the CEO $30M/year. Customers paid the same rates as they pay to the non-union cable companies who pay their workers less than $40k/year and provide laughable benefits.

Life could be great for the American worker if he would just stand up and demand to be treated with dignity. Instead, like the commentators in the articles on the strike, he is told to work himself to exhaustion for table scraps and, if he’s clean cut and lives his entire work and personal life in a PC/corporate-culture friendly way, maybe he’ll be rewarded with a nice desk and a fat salary when he gets into his 50′s.

As someone who doesn’t plan on doing much more work in the future, I don’t have much skin in the game besides the well-being of some of my friends and neighbors. But I do wish people would be more willing to stand up for themselves, or at least to shut up and stay out of the way of people who do.


Turning Four

By mikeBOS | Published: August 15, 2011

The 9th was the 4th birthday of my blog.

I started writing just to keep track of my own plans and thoughts. So I could see how they evolved over time, from month to month and year to year.

Financial planning, like all long-term planning, requires constant tweaking and revision. And after many iterations over months and years, it can be easy to forget where you started; where you were off, and where you were right. And so I wanted a record, a log, to look back on so that my future self could compare notes with my past self.

The blog has been a great success in that arena.

When I started the blog I was just beginning to finish my Bachelor’s degree. I was making 6-figures a year as a utility lineman and spending less than $15k/year. My employer was paying for all my schooling. My plan was to work about 5 to 7 years, finish my degree, pick up an advanced degree, and then retire to a rural cabin with over $400k in investments, plus a place to live.

Then I got laid off in the middle of law school. And only about 1/4 of the way to my $400k goal. Until then I had planned on working another 3 or 4 years or so.

So things were tweaked and adjusted.

Now here I am, 4 years after I started writing, unemployed with $10k-$15k/year in passive income, a so-far-successful budding land-lording business, with some savings sitting around to buy more houses. And one year of law school to go.

I never tried to build up a reader base here. I’ve never asked anyone to link to my site. I didn’t even really realize I had an audience until last winter when a few people started emailing me. The writing was always just for me, and if someone chanced upon it, they were welcome to whatever they wanted to take from it. I opened up comments and took a look at some traffic logs earlier this year. When I saw almost 200 people were visiting my site everyday, I was flabbergasted. I thought maybe there were a half-dozen or so of you following my journey. I didn’t realize I had an audience.

I remember going to write my next couple of posts after I realized people were actually reading my stuff. There was this amusing moment of self-consciousness as I realized I was no longer just writing for myself, but that someone was actually going to read it. Dare I put in this fluffy, extra sentence? Is that joke clear enough? Is this even interesting?

That only lasted a moment though. Then I thought, “Screw them. I write for me. They’re just nosy rubberneckers coming to see what I’ve been up to.”

More than just a log of events, my writing has become a bit of an end in itself. I’ve always enjoyed composing letters and essays. – These posts have been no exception. I enjoy putting my thoughts to words and my words to screen. Putting aside some time for writing a post can be an immense pleasure for me. Sometimes I plan it out ahead of time. – A topic hits me while I’m on the train. I think it through forwards and backwards. A few catchy one-liners might come to mind and make it into my notebook for reference later, lest my wit be forgotten. Then I sit down in a quiet moment and write.

I’ve occasionally thought I might like to expand my writing to broader topics. I’m not sure in which direction though. Whether it be trying to get a column in a magazine, contributing to a group blog, or trying my hand at fiction. But I haven’t thought very seriously on it. In the meanwhile I’ll just keep up with the posting here. I’ll be too busy with school and property-hunting in the next year to dedicate many productive hours to much else anyway.

Thank you to those who have commented or emailed me in the past year. It’s nice to hear the otherwise silent voice from my audience from time to time. And it’s immensely gratifying to hear that my personal story has helped, at least in some way, to convince someone that they too can live as they wish, rather than as others wish they would.