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

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

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.

A Nice Period

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.

Grades

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

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

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

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

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

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?

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?

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

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

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

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

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

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

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.

1L Done

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

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

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

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

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

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

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

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

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

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

FIRE: Fuck It, Retire Early

Back To Class

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

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

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

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

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

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!

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

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

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.

Back In School!