LackingAmbition-2016-05-26-02:40:51.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.


The Home Stretch

By mikeBOS | Published: September 4, 2011

I’m two weeks into the final year of law school. So far so good. Over the past several semesters I’ve made a practice of cramming all of my classes into just 2 days per week. This time it’s 4 classes on one day, and 5 on the other. It’s a long haul that usually involves zoning out at least a little during one of the lectures.

Unlike the past two years, I’ll have quite a bit of writing to do this semester as I take care of some requirements before graduation next spring. Nothing is due until December, but I’ll probably have it all about 95% done before October begins. I don’t like having things hanging over me. I never really quite understood why the majority of people tend to wait until the last minute to start working on a big paper you’ve known about for months.

When I was an undergrad we had a writing-period when papers were supposed to be worked on. The campus was always a ghost town during that week or two as everyone was hunkered down in their dorm rooms or at the solitary desks along the walls in the library, trying to hammer out their masterpiece. But we were all working on papers we had known about since the beginning of the semester. Mine was always finished and handed in well before the writing period began. It was kind of fun seeing everyone’s anguish with their work while I decided which novel to read or video game to play.

One of my classes is on the finer points of practicing criminal law in Massachusetts. – Real nitty gritty stuff. I had my head in the Massachusetts Sentencing Guidelines over the weekend while I was thinking about my 2nd cousin, my great aunt’s son. I’m fairly close to my grandmother and my great-aunts. My grandmother was the daughter of Irish immigrants. – Unimaginably poor. She likes to tell me about how hard her childhood was by recollecting to me the period of time she, her mom, and her sisters were forced to temporarily live in a tent. I always counter that I lived in a tent too, and liked it. Of course, I’m only kidding. I was there by my own accord, as a grown man, by myself. She was there out of necessity, as a child, with siblings and parent’s as well. They were two different things.

My great aunt is, or was, a wicked woman. Cruel, evil and full of hate. Like a one-dimensional protagonist in a children’s story.

She likes me though. She calls me her boyfriend. We’ve always gotten along. And it wasn’t until I was in my early twenties when I began to be exposed to her true nature. My grandmother related to me the time she and my aunt were warming by the fire when they were kids, before walking to school, when suddenly my aunt stealthily picked up the fire poker that had been resting in the hot coals, and with a callous laugh, branded my grandmother on the back of the neck. She was 6 or 7 at the time and my aunt 10 or 11.

My uncle told me of when he was a boy. He would go over to his aunt’s to play with his cousins. One of them had apparently miss-behaved in my great aunt’s eyes, though my uncle recalls they would be punished for the most minor of indiscretions. My uncle’s cousin was placed in the bath tub and she told my uncle to go get a switch from the woods. Scared, he went and got a stick for her. And then watched as she beat her son so badly, the blood pooled in the tub and dripped toward the drain. It was done in a way that you knew it was routine. My uncle, not seven years old at the time, walked home 4 miles after that, rather than wait for his mom to come pick him up. He didn’t want to be there for one more minute, and would wind up finishing his childhood without ever going back again by himself. As he told me about it, 50 years later, I could still see his anger. His demeanor was calm, but his face was red with rage. He still hates her. It makes my heart heavy.

Another family friend separately told me about the switches in the tub.

She also took care of a man with diminished mental capacity. He would give her the entirety of his social security checks of which he would get a small allowance, and the rest would go to her adult children, the majority of whom have drug problems.

I have no doubt the stories are true. Even today, when I’m visiting her for our monthly cup of coffee I can see the short fuse and disgust with others. It’s never, never directed at me. She’s been nothing but kind, gentle and generous to me my whole life. I try to love and forgive everyone. I make an effort of it. But when I look at her, I can’t help but to occasionally think of the monstrosity she was once capable of, and may still be.

She had thirteen kids, my second cousins, all with problems. Two have died from drug overdoses. Of the four I’ve met, all but one are drug addicts in various stages of recovery, even today as they get into their 50′s. One of her sons, as a teenager, decided to not yield to a police officer and instead initiated a high-speed chase through town, during which he ended up killing somebody recklessly with his car. He went to prison for four years. He was out for two years, had a good job with the public works department in his town, when he decided to take his lunch at the bar. He over drank and proceeded to drive a large commercial work truck into a car carrying a young teenage couple. They were both killed. Everyone was devastated. The anger of the world was directed at my cousin. The district attorney said there wasn’t a jail cell cold or dark enough to hold him.

He was sentenced to 18-21 years in prison. The Mass Sentencing Guidelines, given his past record and the nature of his crime, actually only called for a maximum of a 16 year sentence. In Massachusetts there is a special procedure by which one can appeal a sentence, and the sentence only, before a special appeals courts. The appeal doesn’t cover matters of law or procedure, but rather, simply looks at the original sentence and has an opportunity to adjust it based on the arguments of the defendant and the state. Of those appeals, in over 85% of cases, the sentence remains as it was originally given. In about 7-9% of cases the sentence is reduced. And in about 3% of cases the sentence is increased.

So it can be a bit of a risk to appeal your sentence. But since my cousin’s sentence was beyond the maximum recommended sentence, his lawyer thought it would be a good idea to test their luck. A good thought probably at the time. But at the review, the appellate judge found my cousin’s behavior so reprehensible, he opted to sentence him for the statutory maximum, 30 years in prison with no chance of parole.

My great aunt is distraught. She may be, or have been cruel. But she has now lived long enough to see two of her children die, four of them live through the misery of addiction, and one incarcerated for the majority of his life. She asks me if I’ll be able to help my incarcerated cousin. He’s been in prison for about 13 years now. I told her I’ll do whatever I can to help him reduce his sentence. And I will, by looking into every possible angle. But so far, it seems like there’s no way for him to serve anything less than the entire 30 years.

Perhaps it’s just. I don’t know. My initial reaction was that 18-21 was appropriate. But perhaps that’s just because his victims were strangers to me.

So I visit my great aunt about once a month or so, as I make my rounds with the elderly members of the family. Typically I light a cigar and drive from relative’s house to relative’s house, making a day of it, and getting so filled up with coffee, tea and sandwiches that I’m ready to burst by the end of it. So I’ll go visit my great aunt tomorrow. And drink her coffee. And offer her my company. And update her on my latest research about her son’s status. She’s in her mid-80′s now.

Sometimes I’m tempted to ask her about the blood baths and indiscretions. To see how she judges herself. Sometimes I think the pain she has gone through as a mother with the difficult adult lives of her children is her punishment. From good comes good, and from evil comes evil. She’s reaped the harvest from the rotten seeds she’s planted. But I try not to judge. Instead, I embrace the kindness she’s always shown towards me. And instead of criticism, I make an effort to move away from any anger I might have about her past. I forgive, and offer my love.

 


Generally Speaking

By mikeBOS | Published: September 7, 2011

 

“The idea that young people don’t want to work is a myth. The exception, i.e. he who is content to lay about the house, playing video games and soaking up cheap beer, is the idiotic exception. In a generation that is defined almost completely by consumerism, work is a necessity not only to attain one’s economic desires, but also to give outline to an otherwise vaporous form.” – D.A. Portoraro.

I don’t like when others speak for me. I often hear things like, “My generation… (insert generalization)” from my peers. Or people will write in the second-person, “You go to college, you get a job, you retire at 65.” Or worse, when they write in the second-person negative, “You know you can’t just not work, so you find something you like, even though it pays less.”

These people are trying to speak for me. They assume their experience is similar to everyone else’s experience. That their experience is universal. That their limitations, desires and values are universal to their generation, their peers, or their countrymen.

Well they’re not.

But maybe I’m in such a minority that I’m being unfair. Perhaps I’m being too demanding that they be more inclusive. If that’s the case, well I don’t mean to be a nag, and they can continue on with their gross generalizations. But often I get the impression that it isn’t that they are being unaccommodating, but rather, it’s that they are completely unaware that a valid, viable, healthy way of life different from their own is possible. And is a legitimate option for them and their peers.

Too often brazen careerism, hand in hand with its counterpart, consumerism, is seen as the sane, only choice. And anything else is for hippies, idealists, and immature people who need to grow up and be responsible.

The only thing such a simplistic attitude reveals is either a writer’s ignorance about the myriad ways to live a good life, or his cowardice in the face of venturing away from the herd.

My generation is ‘defined by consumerism’, Mr. Portoraro? Really?

I’m a ‘vaporous form’ without work and consumerism? I had no idea there was so little to a man.

Perhaps he comforts himself by projecting his lack of depth upon everyone else. Well sir, you are not everyone, and the circle of like-minded friends you surround yourself with are not everyone. We all don’t want the same thing. Some of us prefer to spend our time seeking truth, love, justice and beauty. – Reveling in friendship, an afternoon in the sun, and endless time to study and explore as we wish. – In an effort not to raise our paychecks, but our minds. Some of us study for our souls first, and our resumes second. There are people who don’t seek to define themselves by the title some company has bestowed upon them. There are as many ways to live as there are men.

If you disregard me in your generalizations because I’m in such a small minority, well that’s fine, I don’t mean to be a bother.

But if you do it because you think your generalizations are true, and that your way is the only right way, well then, perhaps you’re right after all. -That without a career and gadgets, as a man, you’re no more than a vaporous form.


All Quiet

By mikeBOS | Published: October 26, 2011

Law school up to this point has been about 90% classes where all I do is read and study and then I take one exam at the end of the semester to show off my knowledge and get a grade. Which I think is actually a pretty good way to learn (provided you’re motivated to learn) and evaluate how much someone has learned without having to bother people with petty assignments and busy work. But somehow, this session, I managed to sign up for several classes with multiple writing requirements, which ultimately means I’m putting together over 120 pages of dense legal writing this semester. Hence my lack of writing here lately.

I’m enjoying the process though.

In my undergrad days when I was doing full-time work plus full-time school I would churn out assignments like a little academic factory. Highly-tuned to each nit-picky requirement and professor-bias in order to put out papers that satisfied the course requirements at a tremendous pace. I could do that again.

But now that I find myself with an abundance of time to dedicate to my academic writing, it’s been nice to be able to actually put together something that includes some significant thinking and composition in it. And having the luxury to mull things over, set ideas aside, and revisit them later to really test the soundness of my reasoning.

I’m delving into legal philosophy, something I’ve long had an interest in, and I’m mulling over the foundational ideas about where law and government gets its authority, and how best to govern men. As a classics major as an undergrad I enjoyed being able to spend my research time looking at primary texts and wrestling with things like the Platonic dialogues directly, rather than spending weeks reading the all-too-often derivative drivel of modern academic journals about what other people think of the original writing. – Stuff that’s often written due to career-necessities rather than out of love for the subject or because a genuinely new idea is worthy of exploration. Aristotle didn’t write in order to gain tenure. So I’ve had the opportunity again to engage in some original writing, this time that of J.S.Mill and John Rawls and some other modern ethics and legal philosophers.

Whoever says law school isn’t academically enriching or interesting isn’t trying hard enough. I can see how one could easily skip through the three years without seriously contemplating why one thing ought to be prohibited and another allowed. But the opportunity for in-depth analysis of philosophical or political science issues is there, it just needs to be voluntarily taken on.

The problem is a good chunk of the law school student body has only a minimal interest in law, and a much greater interest in living what they imagine to be the appropriate lawyer-lifestyle, like loft-living and driving foreign cars. I shudder to think there are so many practitioners of the law out there who have no real interest in how we ought to govern ourselves.

It’s true that most lawyers just wind up in jobs that end up being 90% rote repetition, where they just fill out the same forms over and over again, conduct the same interviews, sit in at the same old hearings. And most only engage in their little 5% chunk of the law in which they wind up specializing and completely forget about the other 95% they were forced to know for the bar exam.

I have a friend in my class. He’s Chinese and has a job lined up for after graduation with a firm in Hong Kong helping people to emigrate to the U.S.. In all likely-hood he could probably learn to do all the tasks of the job with about 2-3 months of focused training. But he needs to be a member of the bar to do the job, so instead he has to go through 3 years of law school. For him, it’s just about getting passing grades on his way through, then passing the bar. There’s no real interest in the subject outside of the pending job offer.

I don’t begrudge him for his lack of interest. His situation seems perfectly rational to me. So when we hang out we talk about China, or Boston, or video games, or family and his soon-to-be-born son, or business. – But never law. He’s not interested.

Because of situations like his, a lot of people lately are calling for a change in legal education. – Suggestions range from making the law degree a bachelor’s degree, to cutting law school to just two years. After all, it doesn’t take three years of training to help people fill out a bankruptcy petition or a green card application.

I think the calls for reform stem from valid concerns. The price of tuition is out of control. All some people really want to do is practice in a tiny little area of law, like my friend, maybe there should be a way for them to do that without having to go through 3 years of graduate school. Perhaps some kind of “enhanced-paralegal” certification could be established to allow people to practice in a limited area of the law.

My concern though, is that not everyone in law school wants a bmw and a job filling out forms. Someone has to litigate complicated appeals. Our appellate judges need to be trained somewhere. Complex legislation needs to be drafted by someone. Intelligent, well-trained legal minds need to be available for counsel in negotiating international treaties. I think my point is, that a lawyer shouldn’t just be capable of filing a bankruptcy petition, but he ought to be capable of writing the bankruptcy law itself, and be able to intelligently analyze and discuss all its potential consequences.

Granted, most lawyers don’t care to get to that level of expertise and law school, as it is, often fails to train people to that level. But for the motivated, intelligent student, it is possible to attain that level, or at least be well-prepared to attain that level soon after graduation. Whereas, if the law degree were crammed into a 4-year bachelor’s degree program, I’m not sure it would be possible.

But anyway, my class is full of people who want a bmw and a job filling out forms. The problem is, those jobs aren’t as abundant as they used to be. And so the BMWs are out of reach. And the three years of their life in school weren’t even interesting or stimulating. So too many of them will find themselves debt-riddled, exhausted, and bitter. They went into school misinformed, poorly-prepared, and for the wrong reasons. My graduation is going to be like watching a waterfall of lemmings off a cliff.


College as Consumption

By mikeBOS | Published: November 21, 2011

I think of college and higher education less as a financial investment, and more as a luxury consumer good. It’s true that one’s earning potential with a highly-specialized degree in the hard sciences can be worth the cost of tuition. And for those people college can be both enriching, eye-opening and ultimately lucrative. But for most other areas of study, I’m not sure the ultimate financial payoff justifies the upfront costs. And certainly isn’t deserving of being called an ‘investment’. Well, maybe a bad investment.

But this all depends on how long you expect your career to be. If you intend to work for forty years, then perhaps the small bump in salary from a liberal arts degree will ultimately turnout to be a good financial investment as the decades of a slightly-higher salary add up. But if, like me, you expect to largely be done with working around or before age 30, it’s harder to call four years studying in the humanities an ‘investment’.

My first two and a half years of college were the most opulent living I’ve ever experienced. I had a nice room to myself. Someone would clean my bathroom for me twice a week. Three meals a day were cooked for me. I had a huge table of food to choose from everyday and often had two-hour dinners with my friends eating long, complicated meals ending reluctantly after a couple cups of coffee or tea. There was a well-equipped gym and library just a few minutes walk from my room. I’d often work out with a friend, playing tennis, or a game of racquetball. And I could always find a pickup soccer game to play in on the weekends.

It was definitely luxurious and indulgent. Though not in the stereotypical college experience way. I hardly played any video games, didn’t experiment with drugs, though I did drink, but only a few times a year and not to any great excess.

And I took my studies seriously, as did the peers I surrounded myself with. I learned a greater appreciation for geometry, classical music, linguistics, poetry, astronomy, mathematics, logic, ethics, physics, and literature. I enjoyed most of my time. It’s hard to say with a straight face that memorizing Greek conjugations was “fun”. But while the roots of education are hard, the fruits are sweet. And I sincerely did have fun during seminars when we discussed how best to translate a section of Platonic dialogue.

Those studies will pay dividends for the rest of my life, shaping how I view the world and how I view myself. But I don’t think they will ever contribute to helping me get a job in any direct way. Though they certainly helped to make it so I won’t ever really be in much need of a job.

There are ways to treat college as less consumptive and more investment-like. It’s hard to say that someone with a family taking night classes at a community college to get a degree in business isn’t thinking of the expense of time and money as an investment. That is one thing. But for the tens of thousands of college students spending four or more years studying history, poetry, art, theology or literature, I think it’s easy to see that the study is less of an investment, and more of an indulgence. – Especially for the ones who have no desire to research or teach.

I don’t think this is a bad thing. I think it’s a wonderful use of our wealth to allow our nation’s youth an unprecedented opportunity to spend so many years of their lives in one of the most joyful endeavors of life; the pure, unfettered pursuit of knowledge.

I didn’t finish my undergrad degree on the first try. After a break from school for a couple of years I started back up again. This time as a night student. I worked full time during the day as a utility lineman and then would take the afternoon train to my evening classes. The experience was certainly less indulgent in that it was closer to bare-bones education. No prepared meals thrice daily, no time for two hour dinners with friends, and less time generally for the extra-curricular intellectual pursuits. – Just class, library time, and homework time. And if a book wasn’t on the syllabus then it wasn’t on my reading list.

But I still stuck to the liberal education curriculum, focusing mostly on history, ethics, psychology, literature and mathematics to finish up my degree. It was still something I did for the sake of itself.

It’s an unfortunate reality that not everyone can afford to think of higher education as a luxury, and necessity dictates that they treat it strictly as an investment in order to increase their earning potential. Certainly someone who has a family to support and a necessity to earn a living would be selfish and irresponsible to risk spending his limited money and time studying art history. And someone with a limited social safety net from his family might be wise to study something that makes him most employable, rather than what he finds most enjoyable.

But those cases of necessity shouldn’t deter us from encouraging those with the resources, lack of responsibilities, and drive, to pursue an education for the sake of itself. I think, too often, college is evaluated purely on how much more employable it will make the graduate. While that type of analysis can be helpful for someone who is simply looking to increase his salary, I think it is ultimately a disservice to the role that higher education could have in someone’s life.

For hundreds of years, up until the past few decades, college was reserved for the relative few males fortunate enough to be born with some brains and into a family of some means. Education was a luxury that mostly got in the way of earning a living, rather than enhancing it. Somehow, slowly, over the past several decades in the United States, education has morphed almost completely into job training. And the idea of education as anything other than job training is slipping away.

But the poetry, english, liberal arts, and art history majors hold on to the old ways. The choice to do so definitely comes from being in a privileged position. But I do wish there was at least a little more encouragement, for those with the ability to do so, to indulge in their studies rather than make the whole affair boil down to a return-on-investment analysis.

 

Widener


Accepted Offer

By mikeBOS | Published: December 18, 2011

I don’t want to jinx it. But I have an accepted offer on a house. It’s another foreclosure, only about a mile from my first place. It’s in better condition than my first house was. It’s a 3 bed, 1 bath on a nice, fairly private lot. The best part is that it comes with just over an acre of level, cleared land with a year-round stream running along one side of the lot. It’s a kind of place where I wouldn’t mind living myself at some point in the future, with plenty of room for some fruit trees, berry bushes, a hen house and some large gardens.

It really only has two downsides. The first is that about half the house still has old, wooden windows that probably ought to be replaced at some point in the near future since they’re such poor insulators. That will be kind of a pain. Second, it has a septic tank instead of town sewer. That, by itself, isn’t a problem. But there’s a good chance the septic system has been neglected and will need service or even outright replacement which can get very expensive very quickly.

Other than that there’s just the usual rehab stuff: plumbing work, paint here and there, flooring in a couple of rooms, some broken window panes, a good scrub down inside and out, and probably a few dozen other little things I’ll find when I get started on it.

All fixed up it ought to be able to get somewhere between $850-$1,000/month in rent depending on a few things.

The really exciting thing is that 1.) I now own a house I’d be happy to live in if I had to. and 2.) After getting this one rented out my gross passive income will be almost $2k/month which means I can definitely call myself financially independent.

Anyway, back to studying. I have another exam on Monday.


Work

By mikeBOS | Published: December 22, 2011

Brace yourself. I got a job.

With my 2nd rental property about to come online I’m pretty much financially independent. The problem is, while I will be able to cover my personal expenses as they are now, I don’t want to have to live how I live now for the rest of my life. While my life is pretty good as it is, I have a nice apartment, a reliable car, a little pocket money for entertainment, and I eat well, I’d still like a little bit more. – Particularly a house of my own to live in with some land to cultivate. – And maybe an extra $500/month or so to put towards hobby projects like setting up alternative energy rigs at the house, and building an electric car, and silly stuff like that.

I’ve decided I’m going to try to buy two more rental properties in the next 18 months or so, and then focus on getting myself a comfortable place to call home for the foreseeable future.

That would leave me with 4 rental properties bringing in around $3,500/month in gross rents, plus a mortgage-free house of my own to live in. With that kind of income I’d be happy to declare myself off the job-market forever.

I don’t plan on using any loans to accomplish this. I still have yet to take out a mortgage.

I was just going to sit around until graduation and focus on getting some kind of legal job. But that would delay things, even if I pass the bar on the first try I still won’t have my bar card until the end of 2012. Plus, I’d only end up working the legal job for 12-18 months anyway, until I had enough money to buy a couple more properties. I just don’t think that would be fair to an employer who would be spending the first six months or so just getting me up to speed. In addition, while I love the law, I’m not too fond of office jobs. The neckties, daily shaves, and alarm clocks just aren’t for me.

I had a few friends over the house about a month ago and we got to talking about money. I said to one girl, “I wish there was a job where someone would pay me to just sit there and study, read, or play video games for 8 hours.”

And she said, “Well guess what!”

It turns out the non-profit she works for had an opening where I could do just that. The catch? It’s 3rd shift, 11pm to 7am. But I’ve done that before and it actually works ok with my class schedule since all of my classes are between 4pm and 9pm. So I applied, and about 10 days later I suddenly found myself employed, after over 2 years without drawing a paycheck.

So I’m working for a small, local non-profit that helps people with mental health issues. I’m basically a baby-sitter, available in case any emergencies happen in the middle of the night. The people who live there are 95% self-sufficient, they just need caregivers to remind them to take their medicine and keep an eye on them to help keep their symptoms in check. When I arrive on shift everyone’s asleep. Usually I cook myself a dinner in the kitchen, catch some Letterman in the living room while I eat, and then afterwards setup my laptop in the office and get to studying the law, with occasional web-surfing and movie-watching breaks. One guy gets up and makes himself some coffee around 6am and watches tv, but most of the residents don’t wake up until after I leave at 7. Then I get home and sleep from 7:30 a.m. to around 2 or 3 in the afternoon. My body doesn’t seem to have any trouble adjusting.

I’m only putting in 32 hours/week (4 x 8) but the organization still considers me full-time, so I get all the full-time benefits. So I have health insurance again. And I get an unbelievable 5 weeks of vacation per year. The other employees I’ve met are all dedicated and warm. The organization has a very laid-back feel to it. Among the employees there’s lots of facial hair in various stages of growth and comfortable, casual clothes.

I figure I’ll have to be studying 20-30 hours a week anyway in preparation for taking the bar exam this summer, so I may as well be sitting somewhere and getting paid for it. The ample vacation time will make it easy to accommodate my exam schedule as well.

The job ends up adding about $1,500/month to my income. Between that and my rents I’ll be doing pretty well. But I’m also considering looking for some more part-time work in addition, using my freshly minted EMT license. Working maybe 2 or 3, 12 hour shifts per week on an ambulance could bump my total monthly income to somewhere around $5k/month. With my personal expenses hovering around $1k/month, that’s a pretty good savings rate and puts me on the path to reaching my goal of buying a couple more properties in cash in the coming year.


$21,160

By mikeBOS | Published: December 31, 2011

Well it’s that time of year again. Last year I wrote about how I spent $20,284 in 2010.

This year I went up a bit, mostly due to a couple of outrageous dental bills, to $21,160.

Here’s where it went:



Food continues to be my biggest expense. Though some of it should probably be put under “entertainment” because I love flavor. Last year one of my goals was to keep my food budget down around $3,500 (just under $10/day).

Here’s how the food budget breaks down:





I eat out a lot. School is mostly to blame. I’m there for about 13-14 hours at a stretch when you count my train ride, which means eating at least two, sometimes three meals in Boston where it’s hard to find any kind of meal for under $10. So that ends up being about $30/day, 2x/week, for 28 weeks out of the year. It seems I could just pack some food. But between carrying my laptop, books and papers, my backpack’s already bursting, never-mind trying to squeeze three prepared meals into it as well. But I only have one semester left, and my time on campus will only be for about 6 hours at a stretch, so the eating out should come down by itself.

The $713 in fast food is scary looking. But the fast food places I go aren’t the big chains, they’re small places that make decent burritos or all beef burgers or that kind of stuff. A little pricier than typical mass-market fast food.

The other 5 days of the week I cook pretty much 95% of my meals, so the fact that the grocery budget is that low is actually kind of impressive to me. I eat lots of meat and dairy.

I could probably cut my food budget in half and still have a healthy diet. But I quite like steak, ribs, chicken and cheeses. Dinner’s an event in my apartment. I like having people over for it too. So I’m not going to fret too much over this part of the budget. Hopefully graduation will cause the eating out half of the chart to shrink a bit next year.

I think when I move into a house this part of the budget will shrink as well. I really look forward to the year when I can keep a large garden, a hen house, and maybe raise a couple of pigs and sheep. Some space to store items bought in bulk will help too.

 

Shopping $4,531 consists of ~$700/clothes, $1,000/a media PC I built last August, $900 for a new bed, about $450 for some high-quality second-hand furniture, and the rest consisted of lots of small trips to Target and other stores for toilet paper, cleaning supplies, apartment stuff (I moved in July) like dishes, glassware, bath towels.

 

Transportation $3,224 consists of about $2k in gasoline, $800 on subway and train fare, and the rest on insurance, maintenance, parking and tolls. Lots of gas has been spent riding around looking at houses, plus commuting to an EMT class I took over the summer that had a long daily commute.

 

Education $2,428 was a mix of fees, books and tuition expenses my grant doesn’t cover, plus the EMT class I took over the summer out of interest.

 

Home $1,949 is mostly just my share of the rent since July at $325/month.

 

Health & Fitness $1,919 I got caught without insurance with a couple of really bad tooth aches that required expensive x-rays and emergency extractions. Turns out, I have a condition called hyperdontia. I was born with 8 wisdom teeth, it’s extremely rare. I’m very special you know. And wouldn’t you know, when they do extractions, they charge per tooth! Fortunately I have insurance now and plan to get the remaining 6 wisdom teeth removed this year, and this fiasco can all be put behind me. I also started seeing a dentist regularly at a dental school and am in excellent oral health at this point.

 

Bills and Utilities $989 this includes $400/year for my cell phone, and the rest for electric and heat. I get free wireless internet at my apartment.

 

So I’ve been pretty consistent year after year. I had been steadily dropping until this year. I blame the dental bill for that. I did think my expenses would be a little lower this year. But moving into a new place seems to bring up all these annoying little costs that add up.

 

2012

So what’s going to happen next year?

 

Food $4,500. The big thing is I graduate in May. So my education, eating out, and commuting costs will drop drastically after that point. I’m not going to beat myself up over buying a lunch when I’m at class. Hopefully the fact that I will be on campus a little less this last semester will help to curb things a little without much effort. I’m ok with where my grocery bill is at and just trying to keep it in the same ball park.

 

Transportation $3,200. Cutting out commuter trains and subways after May will be a boon. But I will have to drive around quite a bit as I hope to pick up another couple of houses next year. And my brother’s helping me to put about $500 worth of parts into my car in two weeks, which ought to keep it running another 2 or 3 years without a major problem.

 

Education $1,700. I still need to order some books and probably pay some “graduation fees” or some baloney like that. Plus I need to take the bar which is going to run me about $1k. There are these post-graduation bar-prep courses that go for around $3k that are supposed to increase your chances of passing the bar. Just about everybody ponies up for them. I think I’m gonna skip it though and take my chances studying on my own. I can afford to take the risk of failing it since my future doesn’t hinge on a job offer. I can always just retest.

 

Home $5,500. I plan to stay in my apartment all next year. This will cover my rent, electric, heat and cell phone bill.

 

Health $1,500. I’m not sure yet how much the wisdom teeth removal is going to cost with insurance, but I’m planning on something pretty high and hoping I get pleasantly surprised with a bill lower than expected.

 

Shopping $1,500. This category will hopefully be much lower as the apartment is now all set with everything I need. I don’t plan on buying any new computers or furniture or anything next year. This ought to cover cleaning supplies, some clothes, maybe a few video games, a bit of tobacco, and all the miscellaneous householdy things I can’t predict.

 

Misc. $2000. Gifts, donations, replacing broken things, a trip with friends to a water park or something, maybe a camping fee.

 

So all that comes to just shy of $18,000, which would be a pretty good goal for 2012. It’s still high. I’m interested to see what I can get it down to once I no longer have to commute to school or drive around looking at houses. And once I have a house to live in myself where I’m not paying rent, and I have room to grow some of my own food. But I’ll leave my prospective post-retirement budget as a subject for another post.

 


Real Estate Mogul

By mikeBOS | Published: January 9, 2012

I’ve developed a bit of a rough, back of the envelope, 10 year, real estate investment plan. Basically, I’ve decided I want to own 5 houses. 4 to rent out, 1 for me to live in. I want to acquire them all by continuing to buy cheap foreclosures, with all cash, and rehabbing them myself into rent-able condition. Then manage the properties myself for the next decade or so, living well off ~50% of the net rents and reinvesting the other ~50% into securities. Then hopefully, before I’m 40, I can sell off my 4 rentals and put all the proceeds into securities, getting out of the land-lording business all together. So, how to get these first 5 houses…

Well, I already have one. Rented out to happy tenants who mail the check each month and since moving in, have never called me even once.

I’ll be closing on my second rental property before the end of the month. I’m hoping to have it all fixed up and rented out by the beginning of summer. It might take me a little while to get it rented because I have to deal with a septic system modification. Which means lots of bureaucracy, red tape, and licensed contractors. But I think the house will ultimately be worth the headache because it’s on a private, flat, level lot on a quiet street, about 1 mile from the center of a small town and only about 4 miles from several big box stores. It has a small creek running alongside one border of the lot. And it’s about 18 miles from my parent’s, my brother’s, and my sister’s houses (not too far, not too close ;-) ). It’s also smack in the middle of a large rail trail network meaning it’s in a great spot for cycling since you can ride a bike on about 50 miles of paved paths through the woods that take you to various towns in the area and one medium-sized city as well. And it’s about a 1hr 30m drive to Boston, or 20m drive to a train station that can take you into the city.

I plan on finding a tenant who wants to lease the place for about 12 months, starting this summer.

I’d like to move into the house myself, and I’m itching to get going on building a big permaculture garden, but I’m going to continue living in my apartment for another 12-24 months or so because it’s in a location I like living in, it makes it convenient to get to school and to my new job, plus it’s nice, and it’s cheap.

I have some reserves left over to buy a third property, but after buying and rehabing two houses with all cash, capital will be starting to dwindle a bit.

So I have a partner lined up who wants to buy a property with me. We’re going to go into it splitting the purchase price and rehab costs 50/50. The hope is to purchase another one of these $20k-$40k single family homes, rehab it ourselves with cash, make it a desirable, mortgagable house. And then relist it for somewhere between $100k-$150k depending on how everything turns out. At that price level it will be one of the cheapest ready-to-move-in houses on the market in the area and I’m hoping we will be able to sell it within about 6 months of completing the rehab work. I’m hoping to purchase this, my 3rd property, sometime this summer, after the rental house I’m buying right now is all squared away.

I ought to walk away from the sale of the 3rd house with about $50k in my pocket before the end of the year. Which is enough to buy two more foreclosures which gets me to owning 4 rentals, just one house shy of my ultimate goal.

Then it’s just a matter of saving the rents up and working at my easy-going job until I’ve got another $20k-$30k to buy the 5th and final house. Hopefully I can get all that done by the summer of 2013 or so. The entire process should be fairly enjoyable.

At that point I think I could quit doing paid work, move into one of my houses, and declare myself “retired”. I’ll have a mortgage-free house to live in. Plus I’ll have 4 rentals, with no mortgages, grossing around $3,600/month. Land-lording overhead costs should be quite low. -With taxes and insurance making up the bulk of it. Repairs won’t run me too much though since I have the skills to take care of the majority of things that will need to be repaired or renovated from time to time. I don’t expect too many vacancies either since part of my landlording strategy is to keep rents below the market rate, which lets me have my pick of tenants, plus it essentially ‘traps’ them because any other option they could take, including buying their own house with a mortgage, would wind up increasing their housing costs. I expect, after expenses, I’ll be netting around $2,600/month from rents. I also expect to keep my personal expenses, with a mortgage-free house and all the other cost savings that come with having some gardens, storage space and room for tools, to right around $1k/month. Which means I ought to be able to save an additional $1,500/month to reinvest into securities.

I’m trying to keep the number of rental houses to the minimum number I need to meet my financial goals. I don’t want to have to do any more work than I absolutely have to. Especially when I’m talking about being a landlord for ~10 years, the fewer properties to manage, the better. One thought I had was to sell all my properties in these small towns and use the proceeds to buy one high-value single family home or duplex in Boston or Cambridge. Essentially getting me the same rental income but with 1/4 or 1/2 of the tenants to manage. But we’ll see about that when the time comes.

If I find the buying, rehabbing, and selling project works out well, I may continue to rehab 3 or 4 more properties in the following years, just to pad my coffers and give my securities’ investing a jump start. Because I know these cheap foreclosures won’t be around forever.

The main reason I want to have an income above and beyond my necessities is so that as I age my stash will grow exponentially. So that 20-30 years from now when I’m in my 50′s and 60′s my net worth will be well up into seven figure territory.

I’m not completely averse to using financing to buy houses faster. But if I can do it this quickly without having to bother with loan origination fees, interest payments, and all the red tape that comes with buying property on credit, then why not? After my rental network is all setup I may look into tapping some of the equity in order to invest in securities, or to trade up my properties to higher value rentals, but I’ll analyze those options later.

 


Last Semester

By mikeBOS | Published: January 17, 2012

I don’t much care for facebook. But it seems not being on there is like not having a telephone (I don’t care much for those either come to think of it), so I have an account that I log in to a couple of times a week. I’m strictly a voyeur.

So it was during my last visit that I saw all my law school friends were in a hub bub because last semester’s grades just came out. I had kind of forgotten all about them.

I’ve never much cared about grades. In fact, I even went to a school for a brief stint that had a policy of not telling you your grades. They didn’t want you to worry about what your teacher thought of you, and instead wanted you to focus on your own engagement with the materials. In place of report cards you instead got a meeting with all your teachers simultaneously, once per semester, where you were invited to have a round-table discussion about your progress. – Perhaps a far more frightening thing to face for the grade-obsessed than a mere report card.

But I’m not in school to get grades, or to please teachers, or to impress a future employer. So it was with the slightest of curiosity that I checked my marks from last semester. I did fine.

And so now begins my last semester of my graduate education, which is mostly just mopping up some classes that I’m not particularly interested in, but that I really should take before I graduate (though sometimes those kinds of classes turn out to be more interesting than I anticipate). I have to confess, although I love most of the material I’ve worked with in school, I am looking forward to life without classes. Since I returned to finish my undergrad work and then went straight to law school, I’ve now been in school for five consecutive years. Much of it done will simultaneously working full-time, participating in internships, and learning to rehab a house.

The bar exam will be my last hurrah. – A sprint to the finish at the end of the marathon. After which I intend to collapse into an intellectual bowl of jelly for at least a month.

I’ll still have work to do acquiring rental properties. But that stuff isn’t too hard, it just takes time. And by the following summer that ought to be close to being, if not completely, finished up as well.

So just about overnight I’ll be going from full-time work & school for almost 5 years straight, to about as close to zero obligations as a modern man can get. I’m eager and unworried.

 


Travel

By mikeBOS | Published: January 26, 2012

I’ve traveled a little bit. Days after my high school graduation I loaded up my bike with a tent, sleeping bag, and water jugs, and headed westward from New England. I camped out along the way, where ever I could find a spot where I thought I’d be left alone. I made it to Niagra Falls after less than a week of plowing through New Hampshire and Vermont and then meandering along the Erie Canal. I slept on river banks, under railroad bridges, and in the wooded parts of public parks. I headed back home after getting to Buffalo because I wanted to get home and do a few more things before having to leave for college.

I rode my 250cc Honda Rebel motorcycle from Santa Fe to Knoxville, TN, down to Atlanta, and then back again during my spring break of freshman year. At the end of the semester I rode the bike from Santa Fe to New Hampshire. I wiped out over the summer, breaking my wrist, then rode the bike back to Santa Fe at the end of the summer with a cast still on my clutch hand.

I also once took the train from Santa Fe, to Philadelphia, to Boston. The most pleasant way to travel, I think.

I walked across Massachusetts a couple of summers ago.

I’ve done a few road trips to Quebec, DC and Florida with friends.

I’ve visited California several times.

I lived in China for 3 months over the summer after my sophomore year of college. I spent a couple nights in Hong Kong, Shenzhen, Shanghai and Beijing. But spent most of time in Fujian and Chenzhou, Hunan.

I’ve stepped foot in 36 of the 50 United States.

I once went to an epic, 36-hour party that began in the United States and ended in Mexico.

And as a boy, some family vacations took me to a few spots in the Caribbean.

I really don’t much care for travel. But every couple of years I forget that, go again, and rediscover my distaste for it. I’m not gone long before I start yearning for my desk, my bed, and my rather pleasant weekly routines, whatever they might be at the time. I don’t think travel is quite as eye-opening as some people make it out to be either. That might be because I don’t think what people rather coarsely refer to as ‘culture’ to be a very valuable thing to know about. So these people bake their bread differently than I do. Or raise their children this way, instead of that way. Or what is considered suitable fashion is different from the fashions of my homeland. So what? I know there are myriad ways to do and think about things. I take that into account when I try to decide how I am going to go about things myself. But I think really, a bit of communication and thought can deliver just as much insight as a ten-thousand-mile plane ride.

For example, it’s fashionable for people in the United States to want to visit the Great wall of China. I remember saying to my travel-mate the night before we were supposed to go that I was considering sleeping in instead because I was so tired. He insisted I go, that I couldn’t miss it. I said, “I’ve already been. I know EXACTLY what it’s going to be like. I’ve seen hundreds of photos of it, I’ve heard people talk about it, I’ve been to similar types of things before. I may as well have already been there. There’s going to be a little welcome area. We’ll walk up some steps. Maybe walk around the wall a little bit. – Look out at the surrounding area. – Talk about how awfully old it is. And that’ll be that.” He convinced me to go anyway.

Turns out I should have slept in. I now call it the not-so-great wall. It was exactly as I expected.

Some people may think my view comes from being too self-centered, believing my culture to be superior to another. That’s not the issue. Though the fact that the United States is made up of various cultures might be part of my apathy towards the whole thing. I could see how it could be eye-opening for a Chinese person to travel internationally since he is immersed in such a mono-culture where everyone is of the same race and heritage. But as an American I’ve been in classes with, worked with and been friends with people from Korea, Japan, China, Vietnam, Ghana, the Ivory Coast, Mexico, Canada, the United Kingdom, Russia, Germany, Egypt, Israel, New Zealand, South Africa, India, Pakistan, and probably dozens and dozens more. I get exposed on a regular basis to people who have come from places with different ways of thinking about how to live. After all that exposure, I think most of the silly stuff people focus on that varies between cultures just doesn’t matter that much.

You may have guessed I’ve never much cared for my anthropology classes either.

That all said, it has been a while since I’ve gone anywhere. I’d say I haven’t left the 100 mile radius around my home for about 2 and a half years now. Once my regularly scheduled obligations are over with in the coming months I do think I’d like to look into RV-ing for a bit. There are some things I’d like to see: polar bears on Hudson Bay, the Grand Canyon, the national parks, some cities and states I’ve missed, some of the massive cave systems in North America, those types of things. I’ve also long thought sailboat cruising on the East Coast and Caribbean would be fun and may give it a go in the coming years.

I’ve been reading about manipulating and juggling multiple credit cards in ways to get free or deeply discounted travel. I’m trying right now to use those offers to arrange a coast-to-coast train ride with a large, private room, about a week of hotel nights, and then a plane ride home, all for free. We’ll see how that all goes. I’m planning it for right after the bar exam as a way to wind down. If it works out I may continue that method in order to visit international locations through the years. Perhaps if I go for short spurts and travel in luxury I’ll be able to tolerate it better.

So in sum, I don’t think travel offers much insight into the world or other people. But I’m going to continue to dabble in it anyway as a way to better enjoy the natural wonders of the world and to break up the monotony that staying in one small area for years can bring on.


Minimalism

By mikeBOS | Published: February 3, 2012

I’m not a minimalist. Though I look like one. I think possessing superfluous objects can improve your life, even though I don’t own any yet.

I haven’t lived in the same place for more than 12 months since I was 16 years old. And when I move I sell off, give away, and throw most of my things out. I’ve never decorated a room. I own two pairs of shoes. I wear plain, solid t-shirts absent of pockets or logos. I have three pairs of pants, and a drawer full of one type of sock and underwear. I have a couple hoodies and sweaters, a full-length black cashmere coat, one winter hat, a couple of pairs of shorts, and that’s it. Oh, there are a few rarely-worn shirts, ties and suits in a closet at my parent’s house for special occasions.

I use these clothes to go to class, climb mountains, go to the beach, sit around the apartment, fix houses, and everything else I do.

If it were socially acceptable I’d just wear the monastic brown robe with a rope belt.

My father has asked me about my lack of variety, “Don’t you care about what people think about how you look?”

My response is, “Yes, I do. I want to be thought of as utilitarian, and confident enough to be unconcerned with the types of people who might think less of me based on my wardrobe.”

I like showing up for a group mountain hike where inevitably everyone’s wearing specialized wicking techno-clothing, boots that cost more than my monthly rent, carrying giant back packs, and usually someone even has carbon-fiber walking poles. Meanwhile I’m there in my sneakers, cotton t-shirt, with my lunch stuffed into the leg pockets of my cargo pants and a big bottle of water in my hand. Guess who’s usually the first to the summit?

My other possessions are few. Some kitchenware, some second-hand furniture I’d be happy to abandon if I was moving again, less than 30 books, some bathroom stuff, a 5 year old laptop, a top-of-the line gaming/media pc that I built, and a desktop humidor for my cigars. I have a small, well-maintained ten year old sedan and an “old-fashioned” cell phone. And a small toolbox for refurbishing houses.

But I don’t keep things simple because I think it’s virtuous or liberating. I just do it because I move so frequently, it’s not worth hauling everything around, and since my number one goal at this stage in my life is freeing myself from the necessity for paid work, I only buy something if it is fulfilling a specific need that I can’t otherwise fulfill without buying it. That winds up being very few things.

Which is why I find a few posts on Leo Babuata’s beautiful site where he writes about minimalism a bit surprising.

Consider what I wrote above, with all sincerity, and then consider Leo’s musing here:

There are people who claim never to want stuff anymore, who just don’t care about cool clothes and gadgets and bags and notebooks, who have moved past desiring things.

Those people are lying.

Unless you’re a certified Zen Master, you never move beyond wanting stuff (and even the Zen Masters have their temptations, I’m sure). We’re humans, and we have desires. When the new iPhone comes out, I lust over it just as most technophiles like me do.

Apparently I’m either a liar or a Zen Master. He writes in another post about his desire for consumer gizmos:

Christmas has come and gone, and in its consumerist wake thousands of people are left holding shiny new Kindles, iPads, iPhones and iPods. New toys that are fun, useful and beautiful all at once.

And while I see the attraction of these devices — I’ve been tempted myself many times — I also know that they are some of the best marketing devices ever.

I have absolutely zero desire for any of the stuff he’s mentioned. But if I did, I wouldn’t have some inner struggle to keep me from getting it, I’d just go buy it.

I once took a history class with a professor who was quite interested in museums, curation, and how people relate to objects. He wanted us to think deeply about why people go to museums and why we value all this stuff. When I go to the Museum of Fine Arts and look at King Henry VIII’s suit of armor, isn’t that kind of a silly thing? It’s just a bit of metal that someone fashioned and an historical figure wore on a few occasions. Yet we build multimillion dollar cathedrals to house all this stuff so that we can all just go look at it.

We admire the craftsmanship of the metal work, the beauty of a painting, and somehow the objects help the imagination and provoke thoughts that might not otherwise ever have occurred to us. There’s something pleasant about being next to something real that connects us to a past that often times can feel more like an imagined novel than an actual series of events that has lead up to our current state of affairs. King Henry’s helmet was removed form his head, placed in an armory, sat in a collection, crossed the ocean on a ship, sat in storage, and then was put on display where it was so close to me I could smell the metal it was forged from. It makes him more relatable, more like a human and less like a character.

I believe beautiful objects in a private home can serve similar noble purposes. Whether they be historical artifacts, pieces of art, or objects with an inspirational level of craftsmanship. – Whether it be a hand-carved humidor or the world’s best designed flatware. They can inspire us to the greatness of their craftsmen and constantly remind us of the beauty that humans are capable of.

When I do finally settle down with some sense of permanence, and when my investments have secured my retirement with some confidence, I would enjoy acquiring some well-made objects of antiquity and works of art. And I would like every object in my home, down to the most trivial of things, to be of the greatest quality available. Whether those be things I make or things I purchase. Though my objection to general clutter and the extra cleaning and maintenance duties that come along with more objects and more space will likely, naturally keep all my possessions to a minimum.

But I certainly don’t “lust” after these objects I’m not ready to acquire. – Never mind lusting after modern productions of consumerism that are marketed at me. That’s something I not only don’t feel, but I don’t even understand. How could anyone desire something that takes them further from their greater goals? – Especially something as silly as a telephone.

I suppose, in sum, my point is that the real value of minimalism might not so much be in the ease of living that comes with having few possessions. But rather, in the ease of living that comes with not even desiring those possessions.

I appreciate that minimalism is largely a backlash to consumerism. And I agree that chasing consumer fads will ultimately leave anyone unsatisfied and worse off. But not all objects and possessions are the result of living in a consumer-based society. And I do think the possession of some objects, even the superfluous ones, has the potential to improve life.


House 2

By mikeBOS | Published: February 9, 2012

I closed on house number two a few weeks ago and have been working at fixing it up. Before and after pictures to come upon completion.

Once this place is rented out my gross rental income will be right around $2k/month. Taxes, the water bills, and insurance eat up about $250/month (though I pay all these annually up front). Which means I’m netting about $1,750/month. I figure on shuffling about $500/month into a reserve account for future maintenance on the properties. Which leaves me with about $1,250/month net. With education related expenses coming to an end in a few months, that means the $1,250 ought to cover my personal expenses. Which means, I suppose, that I’ll officially be financially independent (FI).

FI is a funny thing to calculate and think about. In fact, the capital I used to purchase these properties has been in my possession since the summer of 2009. And I hadn’t worked from October 2009 all the way up until just about a month ago. So does that mean I’ve been FI since the summer of ’09? The money was in securities and the returns weren’t enough to completely cover my living expenses, but now that I’ve changed my investment into real estate, that same amount of capital is enough to cover my living expenses.

You might be inclined to say ‘no’, I wasn’t FI, because my returns weren’t covering my expenses. Which sounds reasonable. Except that someone could well be FI, living off of securities for years, but then have one or two years with low returns that aren’t enough to completely cover living expenses, then rebound back. Would you say that person is no longer FI during the 2-year bear market? Probably not, you would probably say they were FI the entire time. So maybe I have been FI since 2009.

Whatever, it really isn’t of any consequence other than bragging rights anyway. Not so much of being FI, but of how quickly I did it, in 2009 I was 25 years old.

So now the insured value of my properties is just over $400k (the replacement value, the minimum coverage the insurance company will issue a policy for for my houses). The combined assessed value for tax purposes is $270k. Realistically, if I wanted to sell the houses quickly, I could probably get around $160k for the pair. Which shows you just how nuts the real estate market is right now. I saw a listing the other day for an old farm house on 10 acres where the asking price was $130k. Six years ago it had an asking price of $1.5M.

So I’ve already got my eyes open for a third house. Which I could probably swing on my own, but things would start to get a little tight. Which is why I made an arrangement to go 50/50 with another investor for a short-term partnership where we will purchase a place with cash, fix it up, and put it back on the market, splitting all costs and proceeds. Which will leave me in a comfortable position to be able to purchase a few more rentals on my own.


Choosing Not To Work

By mikeBOS | Published: February 16, 2012

Ambition is a loaded word. Its Latin origin means an “eager or inordinate desire of honor or preferment”. The word’s historical use has been mostly negative. – Describing someone who seeks only honor, money, fame or power, but with no real plan on what to do with any of those things once they’re achieved. Or someone for whom any means justifies their end goals. It was not a flattering term. It indicated someone who was ripe for betrayal or bribery, had a lack of loyalty, and who was ever-unsatisfied with their lot in life.

But most modern Americans have turned to using it exclusively as a positive word. – Companies hope to hire ambitious people, teachers want ambitious students, young singles look for ambitious mates. People who veer from the path of the high school > college >  40-year career track are seen as unambitious loafers. – Criticized for their lack of contribution. – Told they have to grow up, or that they must have psychological problems, like low self-esteem or depression. How could one possibly not desire honor, money, fame and power? Of course, some people want those things more than others, but to not want them at all? Surely there must be something wrong!

Some people point to how I live and label me as ambitious. They point to my academic track record, my growing investments and my unconventional life. And they see someone with ambition. I understand how someone could be under that impression. But I think what ultimately makes me unambitious is my end goal. Which is basically to live modestly, draw on my secure passive income, and spend my days in leisure.

I’m already at the point, at 28 years old, where I could live off my passive income indefinitely. Now I’m just upping the investments a bit to increase my income up beyond my current needs. At this point, with a top notch education and law degree almost in hand, most people would be setting course on the beginnings of a career. Whereas I am ending mine.

I could try to become a billionaire. Or spend my life fighting for civil rights. Or start shaping a bid for public office. And while there are aspects of those things that are appealing, I’ve started far enough down each of those roads to know that they would ultimately be unfulfilling. People will try to tell me I just haven’t found the right job, or have a bad attitude, or that I’ll be unhappy and alone without a career. Who knew so many people derive their happiness from going to work on Monday? And here I am thinking leisure, friends, play, and the pursuit of knowledge make for a good life. I’m apparently in dire need of a career coach to set me straight.

What really makes me happy is waking, at whatever hour I choose, to the morning of a day without plans. A day that I can use to ride a double century on my bike, visit an older relative, perfect my garden, finish a book, brew a new beer, scale a mountain, sit on a beach, create art, admire art, entertain some friends, study, make music, build something, go sailing, catch a sunset, or just attend to the chores of life at a slow, methodic pace.

Is there anything ambitious about that? Maybe you think so, but I don’t.

 

 

 


An American Catholic

By mikeBOS | Published: February 23, 2012

Both of my parents are Catholic. When I was a boy I was sent through the motions of church life. – Baptism, communion, confession. I was sent to a Catholic elementary school. I hated it because I had to wear a tie, other than that it was ok though.

Catholics hold a ‘confirmation’ ceremony for its adherents, generally when they reach between 13 and 16 years old or so. The Bishop comes to town, there’s a big to-do, the Bishop makes a declaration, the adolescent says ‘Amen’ and they’re confirmed. It’s almost like a second baptism for when you’ve reached the age of reason.

I attended the ceremony for my sister who is a few years older than I am. And before you knew it, I got older, and my turn had arrived.

Now, I’ve always been a man of logic. When I was in 3rd grade I remember we had to keep a journal that our teacher would read and respond to. I asked her, with childish curiosity: If there were kings willing to offer him precious metals for his birthday, why was Jesus so poor? You would have thought I had written a bomb threat the way it was responded to. The principal got involved, my parents were called in, the local priest was asked his opinion. Nobody wanted to offend anybody else. Finally, they decided the teacher would tell me that the gifts the child Christ received at his birth were only in token amounts, and not of any great worth. Ahh, well that explains it…

- An unsatisfying answer, but even at that age I was wise enough to just let it be so that I could get back to playing kickball.

When I was young I believed everything I was told. I took a lot of things on faith, assuming the adults around me knew what they were talking about, and that eventually, as I grew, I would come to understand how it is that they knew what they knew. I believed the Biblical stories I was told were historical fact. That’s how they were presented to me. But at some point, probably around 9, 10 or 11 years old, I started to figure out that adults don’t know quite as much as I thought they did. That there are things that are unknown or unknowable. I remember a period of several months where I was fascinated with the concept of infinity and the idea that I exist along a continuum of space that continues on forever. And after talking about it with teachers and parents, I realized that their grasp of the idea was no better, if not inferior, to my own.

And then at some point people started to talk about ‘faith’. But there was no graceful transition from presenting the Bible stories as historical truth to me as a 6 year old, and then trying to explain faith, and belief to me as an 11 year old. You presented this stuff to me with no caveats, as known fact, why would I need to believe or have faith in anything? You told me you knew this stuff was true! It was a betrayal of my trust. What else didn’t they know?

And so it came time for me to be confirmed in my church. The church that held out my parents, and their parents as members, the church my sister adored, and the church that all my friends from Catholic school were being confirmed in. And I decided I wasn’t going to participate. I was willing to concede that the story of Christ was possibly true, but I had no belief or faith that it was so. And given that, I objected to publicly stating in a ceremony anything that would indicate something to the contrary.

I had made my decision. But I held off sharing it with anyone for as long as possible. I knew it wasn’t going to be taken well and it’s a lot to ask of a 15 year old to stand up to his parents, entire extended family, and go against what all his friends are doing all at the same time.

My parents were absolutely livid. I was yelled at. I was told I’d be punished. There were attempted bribes. I was threatened that I’d be shunned by my grandparents. – That it would be a mark on me for the rest of my life.

I never yelled back, or gave in. I explained my position a couple times and wasn’t being listened to. So I just resolutely crossed my arms, sat down, and refused to go.

After about a month of argument my parents gave up and it was never mentioned again.

Looking back on it, it looks like I was being a better Catholic than my parents. – Respecting the church and its teachings too much to lie to its face.

We have all come a long way since those days. Living forces us to grow. My entire extended family has become much less entwined with the severity of a dogmatic church, I think for a few reasons: Me being open about being gay at a young age; the scandals in the church; and a kind of calming gentleness that seems to have been slowly draped upon us through the years.

It was with that personal history in mind that I read the following criticism of the American Catholic Bishops:

They are prepared to go down screaming over contraception in health insurance plans handled between patient and insurer. Letters were read recently in every parish. They planned a campaign against any compromise for months.

But ask yourself: where were they on a much more fundamental cause for Catholics: universal healthcare? Were they anything like as vocal?

Where were they when the Bush administration was practizing and authorizing the torture and abuse and robbing of human dignity of terror suspects? The Pope never obliquely mentioned these categorical evils when visiting the US and cozying up to the war criminals in the Bush administration?

Where have they been on tackling climate change – a sacred obligation for Catholics according to the Pope they follow so fanatically?

Why so utterly fixated on sex, especially the sex lives of women and gay men? Why so utterly indifferent to the whole range of public policies which Catholic orthodoxy has strong views on?

They have become the Pharisees. And we need Jesus.

 

It’s easy to forget the most important things when so many trivial things are thrust upon us day after day. We need to be reminded often that we can choose to love, forgive and be unworried, and that it can lead to the happiest of lives. But instead we’re suffocated with rules. There is a road the Catholic church could take that would make me proud to call myself a Catholic. They’re just not taking it.


The Cost Of FI

By mikeBOS | Published: March 2, 2012

It’s a tremendous luxury to have the option not to work. Absolutely worth the past decade or so of forgoing the typical consumer trappings of new cars, boats, motorcycles, high-end apartments, $5 coffees, pricey monthly cable/phone packages and luxury travel that my co-workers always seemed to have and would try to coax/pressure me into buying. It’s not like I haven’t been able to enjoy most of those things either, I just had to be smart about it.

I was fortunate enough to be making a high income for a few of my working years. And I think, in almost any field where that’s the case, a frugal person finds themselves surrounded by people who have set their lifestyle based upon whatever their income happens to be, which means most of my co-workers were living pretty high on the hog whereas I was still living a lifestyle that, from the outside, looked more akin to that of a broke college student.

Instead of the new car, I’d buy a small sedan in need of repairs that had been neglected. Then spend a couple of weekends replacing gaskets, putting in a new starter, or exhaust, or brake line. Then I’d give it a good detailing inside and out, grind off and resin over a few rust spots, touch up the paint and put on a coat of wax. Sure, my car would be 10 years older than everyone else’s, but it would be reliable, in good shape and cost me $20k or $30k less than if I had to finance and insure something new. I’ve also gone several years with no car at all during times when I was able to live close enough to school or work to walk or take public transit.

Instead of buying a new high-end motorcycle for $10k-$20k and putting another few thousand dollars of chrome and add-ons into it, I had two bikes over the past decade or so that I picked up through craigslist and ebay. Small, efficient bikes that paid for themselves through their fuel savings and low-maintenance costs, since I would use them in lieu of a car as much as possible.

Housing is one area where I may have gone overboard. Instead of working and paying rent, I took one year off to loaf around while I lived in a tent. In order to get the best deals on apartments I have cumulatively spent a couple of months couch surfing while I waited on leases to start, or staying in my parents’ spare room for a month or two at a time while I transitioned to a new place. And I’ve lived in apartments with neighbors who aren’t exactly the most successful members of society.

I think I’ve been to a Starbucks maybe six times in my life. – Always dragged in by a friend. Instead I got some well-made thermoses when I first started working and I still use them a couple of times a week. It’s a little more difficult to have to remember to prepare a hot drink before starting the day, but the savings add up so fast, it’s worth it.

I’ve never had a cable tv subscription. Not that there isn’t some tv I like, I just download/stream it, or watch it OTA. I have been pretty wasteful with my cell phone plan. I spend about $30/month. I could get an old smartphone, use prepaid minutes, and make most my calls over wifi, but I haven’t, yet.

Most of my travel has been via bicycle and motorcycle camping. I did a lot of domestic flying when I was first in college. And I had a long trip to China, but that was actually income-producing since I taught English while I was abroad. But I’ve managed to avoid the one week resort stays in the Caribbean that many of my co-workers would make twice yearly.

I never found a way to cheaply own a boat. They can be had second-hand cheaply enough, but the dock/mooring fees or requirements of owning a vehicle large enough to tow it are what kept me out of it. The best I could do was to be a member of a sailing club for a couple of years that allowed me to use a boat whenever I liked. I also have a canoe I built when I was in high school that I still take out from time to time, I keep it out in the woods out behind my parents’ place. Now that I’ve purchased my FI though, I may loosen up the purse strings in the next few years and find myself an affordable vehicle with some towing capacity.

So I’d say, apart from housing, the quality of life I’ve experienced has been just about equal to the quality of life of most of the people I was surrounded by, but at a fraction of the price.

I mean, is riding a $20k Harley that much better than riding a $2k, second-hand cruiser? I suppose if the reason you’re riding around is to look cool and be loud (and indeed, that is precisely the goal of a lot of riders), then the Harley might be a better experience. But if you’re riding in order to save gas, hug some corners, and feel the wind in your face, well, you spend most of the time looking forward at the road, not down at the bike. And secondly, maybe it is better, but is it 10 times better?

Same thing with a car. The point of me owning a car is to get from point A to point B, not to use it as a hint to others about my level of income/credit-rating.

So I don’t think the cost of financial independence, for me, as far as forgoing purchases and comforts, was really all that great. There’s lots of talk in the early retirement world about delayed gratification, but I didn’t really delay all that much, I just went about things differently. It just required being willing to learn some skills and get my hands dirty.

The real sacrifice I made was working harder than I otherwise would have. If FIRE wasn’t my goal, there’s no way I would have worked as much overtime, or gone to school full-time while simultaneously working full-time. And rather than bouncing around cheap apartments so that I could keep my housing costs and commute to a minimum, I probably would have mortgaged a house so that I could have some land to work.

But the comfort and security of FI was well worth what, for me, was a small sacrifice.

 


A Low Point (part 1 of 2)

By mikeBOS | Published: March 12, 2012

From my self-selected posts over the years one might think I’ve lived a charmed life. And while there’s no doubt that I have been very fortunate, part of thinking of yourself as lucky is a matter of how you view things. Lest people begin to think I am the luckiest guy in the world, I thought I’d share one of the valleys I’ve had to traverse while hopping from peak to peak through the years.

About five years ago Josh and I met online, chatted for about an hour, and decided to meet up for a drink after one of my classes. We hung out, had a discussion debating the merits of searching for truth through science vs. through logic, and decided we liked each other. A bunch more meetings over the next few months and suddenly I was in a relationship.

Josh, an accomplished type-a personality, was somewhat of a contrast to my learning-is-fun-and-grades-don’t-matter attitude. When we met he was a college senior studying genetics and trying to figure out which top school to go to for his PhD. His high marks and early accomplishments meant he had his pick of the best schools in the country.

He could have stayed local, but after some soul-searching, decided that his future was in California. We’d been seeing each other for only about five months when he had to make his decision. While I was disappointed, I understood he couldn’t make a decision that was going to affect the rest of his career based on accommodating a five-month-old relationship.

So he had decided around March, and we would keep seeing each other until he had to go off to school in August. He moved out of his dorm room in May and into my apartment for the summer before he would have to leave. At the end of the summer we had a sad, movie-esque, airport good-bye and were agreed that we weren’t sure what the future held for us, if anything.

We kept in close touch and a couple of months later he decided to fly back for a week to visit. Then about six weeks after that I flew out to visit him for a week. And we kept going back and forth like that. He was trying to talk me into going to law school out there the following September, but that would mean giving up my free tuition, I couldn’t do that.

Finally, by the middle of the spring semester, he decided he had made a mistake. He had some complaints about the academic department he was in, and he missed me. So he was going to see about transferring back to a PhD program in Boston. Luckily, after only a few phone calls and some letter-writing, he was set to come back to Boston and start working on his degree during the summer semester.

By April we were living together again and all was well. We were happy and on our way to being a Doctor/Lawyer power couple.

But it turns out, Josh wasn’t just disappointed with the California school he had selected, I think he was questioning his PhD track all-together. Which created this incredible crisis within him, because that had been his goal since he was in middle school. He had put his soul into his work. He not only wanted to be a geneticist, he wanted to be one of the best geneticists in the country, and he was well on his way there. But having reached what was essentially his biggest lifetime goal, I think he was at a bit of a loss when he ultimately found it somehow unsatisfying.

During the summer he started to sleep a lot, and would skip class more often than was prudent. I was still working full-time and going to school full-time myself, so I wasn’t even aware of how troubled he was. It wasn’t unusual for him to go to his lab late at night and stay for hours at a time tending to his experiments, and I would get up early for work. So sometimes I’d go a day or two without even seeing him at all.

Well, one day in September I hadn’t seen him for several days in a row. And he wasn’t answering his phone or responding to text messages. Of course I was beside myself with worry.

He finally strolled in during the afternoon on day 3, all smiles. I gave him the third degree. I wasn’t mad, I don’t get mad. But I was serious. He told me he had been at a party with some friends, stayed late and fell asleep on their couch, then spent the next day at class and in the lab, then went back out with his friends again…  “You couldn’t call me?”

“My phone died. I didn’t realize it had been three days.”

- Apologies, forgiveness, don’t do it again -

I’m trusting, patient and forgiving, maybe to a fault.

Next weekend, he disappears again for a whole night.

This time when he got home I didn’t let him just tell me he fell asleep on a couch. I questioned and pushed him where things didn’t make sense. We had a long exchange. Finally, he breaks down.

This ivy-educated, budding world-class scientist, with all his good looks, charm, personality, and with a blindingly-bright future is standing in front of me. And he tells me, through tears, that he has been using crystal meth for the past six months.

Well, you may as well have run me over with a truck.


A Low Point (part 2 of 2)

By mikeBOS | Published: March 13, 2012

He told me he wanted to stop. And I told him he had my support.

He started meeting with a counselor at school. And our confrontational conversation was a big relief for him. For about six weeks he appeared to be doing much better. He was staying at home a lot more, keeping a regular schedule, seeing a therapist weekly, going to anonymous support group meetings and focusing on his work.

Then, in October, he started disappearing again. The first time it happened I was worried. The second time I was angry. By the third time I knew what he was doing and my predominant emotion at that point was just a deep, quiet, mournful sadness.

Towards the end of October I witnessed an episode where he was hysterical, an emotional wreck, suffering from paranoia. He thought cars might be following him when he walked down the street. I wasn’t sure if he was self-medicating due to the early signs of schizophrenia or the onset of some other mental illness, or if it was simply a symptom of too much drug use.

But I couldn’t take it anymore. I started to worry about my own safety.

During one of the days when he was gone, I packed up all my stuff and moved into a spare room at my parents’.

My own personal low point came a couple weeks later. On top of all this stuff, I had been laid off at the beginning of October. I was forced to live with my parents. I had to commute to school in Boston from New Hampshire. And I had no idea how things were going to work out. I was in my car, driving home from the train station at night, in the rain, when one of the tie-rods on my car suddenly failed. I lost the ability to steer. Thankfully I was only going about 30mph at the time and somehow managed to come to a controlled stop on the side of the road. Ever in good spirits, always counting my blessings, I was ready to meet this challenge too. I had a flashlight in the glove compartment that I had put in there, unopened, for just such an occasion. I pulled it out, opened it from the plastic, put in the brand new batteries and stepped out of the car, into the pouring rain, to figure out just what had happened. As I came around the front of the car, I turned on the flashlight to inspect the tire. It flickered, and went out. You’ve got to be kidding me. This thing was BRAND NEW! Well that was it.

That. Was. It.

What an absolute piece of shit flashlight. I hated it. I bashed it against the pavement with every tired muscle in my body. Over and over and over. – Rain pouring down. Then I hurled it a mile into the woods with a string of obscenities.

I lost the ability to steer??? Really!?!?! What is this some kind of metaphoric cosmic fucking joke??? I had never felt such rage. God damn that flashlight.

When I finally ran out of energy I just stood in the rain on the side of the dark, empty road. -Beat down, quiet, defeated.

I’d never felt that low.

But I was glad it was raining. It felt good on my face. It was nice to just focus on something that felt good. I looked up, and let the water run down my temples, like a baptism.


 

Josh somehow managed to keep up his status at school. It turns out grad school is a great place to be a drug addict. The schedule is erratic, you can skip classes with impunity, and he was able to do well on exams without studying too hard anyway. Plus he had a generous stipend so he never had financial trouble.

Him coming home to an empty apartment was a big wake-up call for him. I was hoping it would push him closer to rock bottom. We kept in touch and would have lunch a couple of times a week. I kept pushing him to get more help and offering to help him do it. By December he was seeing a psychiatrist who had prescribed him some medicine. The therapist thought Josh was depressed, which might be the reason he started using in the first place. So a few more months went by and, with the new drugs and therapy, Josh seemed to be doing much better. He was keeping up with school, and told me he hadn’t used meth since November.

In March, he asked me to move back in. Now, during this time I had become an expert myself on drug addiction. In fact, a good friend of mine is a recovering drug addict who finally sobered up, after a lifetime of addiction, in his early 50′s and, after over ten years of sobriety, is now a leader for several AA and other support groups trying to help other addicts. We spent a lot of time discussing Josh. I met lots of addicts and their family members and talked over my own situation with them. I read books and studies.

I knew the chances of Josh being successfully sober forever were slim to none. And a relapse was almost certain, if he wasn’t already lying to me about his use.

But after thinking on it. I decided I’d rather give him one last chance, than go a lifetime wondering if I should have.

So in March I moved back in. Things were good. But by the summer his old patterns of disappearing reemerged and it was clear he was using again. So one afternoon I finally told him I was moving out at the end of the month and that was the end of it. There wasn’t any anger or resentment, just utter sadness.

It’s incredibly hard losing someone to addiction. They stand there before you, a shadow of themselves. You don’t know if you’re seeing Jekyll or Hyde. He would go months being the most loving, supportive person in the world. Then betray me, coldly. Then beg my forgiveness and profess his love again. It’s like he was dying over and over. – Only to be cruelly resurrected. Always offering hope, and then crushing it.

I wouldn’t wish it on anyone.


Home

By mikeBOS | Published: March 22, 2012

Impressionable me has allowed myself to be talked into moving into the house I’m currently fixing up. When I was in the process of buying it just a few months ago the plan was to rent it out for a year, and then move into it, using the intermediate time to setup another couple of rentals while I stayed in my rather nice-for-the-price, $325/month apartment.

I’ve been tempted to move in since I first saw it. The large yard with room for gardens, privacy, cellar with ample room to age some homemade wine, the ability to use wood heat and install passive solar modifications to lower energy needs, garage space, proximity to beautiful hiking/biking are all draws. The distance to Boston is a bit too much for a regular commute, but with graduation coming in just a couple of months, that won’t matter anyway.

Family and friends have all colluded to try to talk me into just moving right in. One reason for waiting was that all my available funds for the next year or so are going to have to go towards purchasing and rehabbing other rental properties, so even if I did move into the house, I wouldn’t feel free to spend any time or money on the stuff that would make it really comfortable, like furniture, landscaping, energy retrofits, nice tile work, or tools to outfit a workshop. I’d prefer to build a fair amount of the furniture and do lots of custom work around the place, but I won’t have the tools or time for that for a while. So I’d have to live in a sparsely-furnished place with unfinished projects staring me in the face everyday.

But is that really so bad? I suppose it’s the status-quo for lots of people.

“You should just move in yourself,” has been the constant refrain of the people who have visited the place. Eventually, I decided they were right.

With the cost of having to pay rent on my own apartment factored in, my total net profit from renting the house was probably going to be somewhere around $5k-$6k for the year. Nothing to sneeze at, but I can afford to forgoe it. Other factors start to pile on too. One being, it might be hard to find someone who wants to rent a whole house for just a year knowing they are going to have to move after twelve months, even if they don’t want to. Another being that I am running the risk of having a nightmare tenant who needs to be formally evicted and damages the property in the process, if so, the whole year’s profits could be wiped out. By moving in myself I don’t run any of that risk since I would be my own tenant.

My next couple of properties will probably be in closer proximity to where the house is than where my apartment is. This is actually kind of a big deal since rehabbing requires physically being at the property several days per week and, if it’s a long drive, the time and costs of travel start to add up.

By living at the house I can start to do other things that save money, that I can’t do in the apartment, like buy in bulk, store large amounts of homemade wine/beer/liquor, and grow my own tobacco. Plus, with a garage space, it’ll be easier to do my own maintenance on my car, fix things, and build my own stuff in general, rather than buy it.

So if you throw in all those savings, my profit from renting the place starts to look closer to $3k-$4k for the year. That’s an amount I feel quite easy about passing up in exchange for moving in right away.

So now I’m shooting for a move in date of somewhere between mid May and mid July. I find it’s easier to keep a loose schedule than stressing out over trying to hit some target goal date.

Anyway, see how easy it is to rationalize just about anything?


Social Security

By mikeBOS | Published: March 29, 2012

So here’s a fun problem to have. In order to collect social security retirement benefits, you need 40 “credits”. You can earn up to 4 credits per year in any year where your earned income is at least $4,520. Which means you have to have 10 years of earned income to collect social security payments. So what about us poor schlups who have managed to retire on less than ten years of work?

I will only have 32 credits at the end of this year, and don’t plan on having any more wages in the future.

If I don’t pickup 8 more credits, all those social security taxes I’ve paid will have been wasted, and I’ll never see any benefit from them.

I’ve still got about 40 years until I’ll reach the qualifying age for drawing any SS retirement payments. So there remains a pretty good chance (though I have no plans for it) that I will fall into some kind of paid work at some point during the next four decades. Right now, I’ll just bank on that.

But if I get into my early 60′s and still haven’t managed it, I may have to do something silly, like create a company, and hire myself at a salary of $4,520 (or whatever the COLA has upped the numbers to 4 decades from now) just so I can pay some pay roll taxes and get my last 8 credits.

With the SS tax at something like 8%, and the minimum retirement benefit around $400/month. That would be a pretty good return. 8% of $4,520 = $361 x 2 years = $722 in additional SS taxes paid so that I can start drawing a monthly $400 check. Worth the hassle I think.

Of course, then there’s the issue that, well, who knows if I or the U.S. will even exist in 40 more years, nevermind SS.


Energy Independence

By mikeBOS | Published: April 5, 2012

I have this fantasy of being completely energy independent. I don’t like contributing to air pollution. Or sending my money indirectly to people that kill gays and treat women like animals. And I don’t like the idea of my core sources of comfort and convenience hinging on a distribution system that can be relatively easily disrupted by economics, war, and disaster. I’m by no means a doomer, but if there’s a gas shortage, or a mega quake in New England, I want to be comfortable. Then there’s the more mundane things like an ice storm in 2009 that cut power to some neighborhoods for over three weeks. Plus, this stuff is fun for me. If it wasn’t fun, and was just a way to save money or something, it wouldn’t be worth the trouble.

I’ve got a one acre lot to work with. I can fairly easily take care of household energy needs with thermal solar, photovoltaics, locally-sourced wood heat, and maybe even some home-made methane just for kicks.

But how do I replace transportation fuel? That’s tougher.

First thing’s first. My house is located in such a place that I can do almost everything just by walking where I need to go. If I’m willing to ride a bike about 8 miles roundtrip I can get absolutely everything I might need on a regular basis. So having a motorized vehicle will be 100% a luxury item for me. But I like luxury.

Now, I’ve explored just about every possible home-grown energy option. And here’s how the most viable solutions compare for my particular needs:


Alcohol – Jerusalem Artichokes


I could conceivably grow my own fuel. According to David Blume’s book, Alcohol Can Be A Gas, I could sustainably raise enough Jerusalem Artichokes on my one acre lot to produce about 1,100 gallons of ethanol per year. But in reality I need some land for food production, pretty flowers, and a small lawn. So let’s halve it and say I grew 1/2 acre of artichokes getting me about 550 gallons/year.

I could probably plant them all with one day of hard work. And then harvest them all in the fall with one or two days of hard work. They don’t require much care other than that. To produce the alcohol they would have to be sent through a wood chipper or something to shred them up in order to add them to water to make a mash. The mash would have to be kept warm for about 48 hours while it fermented, and then I would need a fair amount of energy to distill off the alcohol. David Blume seems to think, though, that if I used the spent mash to make methane in an anaerobic digester I would have more than enough methane to power all this alcohol production.

There’s also the initial investment of time and money into all the equipment to consider. If I built everything from scratch I’d probably be looking at over 100 hours of building a still, storage areas for all the harvested biomass, the anaerobic digester, and storage tanks for the finished alcohol.

All told we’re probably talking about an initial investment of somewhere around $3,000 – $7,000 for the still and large storage tanks. Plus lots of labor, but it would admittedly be, for me anyway, fun labor, at least initially. I think the equipment could potentially last me 30 years. Throw in annual costs of renting a chipper and it would all work out to probably around 75 cents/gallon to produce the fuel + hundreds of hours of uncompensated labor.

Alcohol – Automated Hydroponics

Alright, instead of working the land and getting my hands all dirty, what if I instead went a highly-technical route and tried growing a plant hydroponically in a year-round green house, using robotics to take care of most of the labor? Robotics and hydroponics go well together. You can design the system around the automation.

Jerusalem Artichoke really wouldn’t do well in an automated hydroponic setup since they grow to be 6-12 feet tall. But sugar beets might be a good substitute. You can expect about 400 gallons/year per acre from sugar beets.

It would be a fun, non-trivial challenge to build a system that only needed tending on a weekly or monthly basis. I could use aquaponics and a tank of Tilapia sized to provide just the right amount of nutrients to the plants. All with some kind of conveyer belt-type system to automatically move the most mature plants towards a hopper where they could fall into a chipper and be pushed on into a fermenter.

But the costs are even higher than just growing stuff by hand on land. And I think the initial labor input would be just astronomical. I’d have to really love the project for it to be worthwhile.

Vegetable Oil



Vegetable oil, either straight or processed into biodiesel, is another option. Unfortunately the per acre yields of plants that would grow in New England don’t get much higher than 130 gallons/acre.


Waste Vegetable Oil

I could try to source some waste vegetable oil. But that resource is rapidly going away as more and more people take advantage of it. Plus, it has one of the problems I’m trying to solve; my source of it could be easily disrupted.


Algae Oil

It is possible to squeeze vegetable oil out of algae that has been cultivated in a photo bio-reactor (a series of clear tubes filled with water, basically) or just a big pond or pool. And you could also get some alcohol out of the waste after the oil has been extracted. But the technology really isn’t mature enough yet. The yields for a system that wouldn’t take up my entire lot wouldn’t be too impressive. Extracting the oil from the algae is still a bit complicated: You can dry and then pulverize it; Use chemicals to break down the cells, releasing the oils; Use sonic vibrations to break up the cells; Or use osmotic shock, suddenly adding or removing lots of salt to the water.

Initial costs would be high, having to build tanks and oil extraction equipment. It seems like it would be capable of being 100% automated, but current hobbyists run into problems with algae clogging pipes and having to be scraped off of surfaces to stop it from blocking light and inhibiting growth to the rest of the colony. So it might be fun to experiment with, but I’m not sure it’s ready to be relied on.


Diesel Trees

Diesel trees are pretty amazing. The trees store their energy in a liquid form inside their trunks. They can produce close to 15 gallons of fuel per tree per year. The tree is then tapped, similar to tapping a sugar maple, and the fuel just runs right out and can go straight into a diesel engine with no modifications.

Problem is, they only grow in tropical climates and require either lots of rainfall or irrigation. So if I lived in South Florida, an acre or so of these would actually be a pretty perfect solution. But these trees won’t survive in New England.

Wood Gas

If you heat wood up in the absence of oxygen it gives off a gas that can be fed into a car engine built for regular petroleum gasoline. But I’m not gonna drive a wood stove down the highway and I don’t really have a giant wood lot to harvest from anyway.


Hydrogen

I could make hydrogen at home from water using electricity. Making and storing hydrogen isn’t too big of a deal technologically. It would take about 55kwh to make an amount of hydrogen equivalent to one gallon of gasoline [or GGE "gallon of gas equivalent"] (assuming a 60% efficient electrolyzer). To have enough fuel for me to feel rich enough to just waste it on a Sunday drive, plus have enough for some long-distance RV trips a couple times a year, I’d need to produce between 2-3 gallons/day 365 days/year. Which means I’d need 110 – 165 spare kwh’s every day. If I bought that power from the grid it would cost me around 10 cents/kwh which works out to $11 – $16/day added onto the electric bill. By itself that’s really not horrible, especially when the cost of a gallon of gas gets up above $6 or $7/gallon. But when you throw in the cost of the storage tanks, compressor pumps, and car conversions, things don’t look so good.

“No problem!” You say, “Just use solar panels!” So living in New England I’m in the solar zone 5, which means I get an average of 4.2 hours of usable sunlight per day. That’s averaged out over all the rainy/snowy days, short winter days, and long sunny summer days. So I would need about a 40kw system (40 * 4.2 = 168 spare kwh). Right now the cheapest wholesale panels can be had for under $2/watt. So that’s about $84k worth of panels (best case). And that’s a LOT of panels. Then there’s installation and mounting costs. Though, consider that if I cut use in half to say, 1 1/2 GGE/day my solar panel costs would only be about $42k.

Finally, while getting an internal combustion engine to run off of hydrogen looks to be a fairly simple task. The problem is finding a way to store a sufficient amount of hydrogen on board the vehicle to have a decent range. Advances in materials science over the past 10 years have allowed for high pressure tanks rated at 10,000 psi, which make for tanks with energy volumes equal to gasoline. Meaning a 1 gallon 10,000 psi tank filled with hydrogen holds about the same amount of energy as 1 gallon of gasoline. But these tanks aren’t exactly sold at the hardware store, and I can’t seem to find what they might cost. The best I could find was a government report from 5 years ago that predicted they would cost about $6,000. Though I read another claim that a 5,000 psi tank sized to hold the equivalent of 18 gallons of gasoline could be had for about $700. So I have no idea.

Now if I had access to a 50kw wind turbine, or hydro turbine, things would change. But right now, with the costs the way they are, plus my aversion to having a 10,000 psi tank anywhere near me, makes hydrogen kind of a tough sell for my needs.

Consider total costs somewhere between $50k – $100k for production equipment, storage, and car conversions, with, say, a 30 year life span on the equipment. That’s 1.5 GGE’s per day for 30 years, or 16,425 GGE’s or about $3 GGE. Cheaper than the price of gas today, which will only go up over the next 30 years. But that’s not counting my hundreds of hours of labor in doing a big custom setup.

If I could get a cheap tank and a good deal on some PV panels and a compressor, and lower my needs to say 1-2 GGE’s (gallons of gas equivalent) per day, it’s not out of the realm of possibility.

Hydrogen can also be produced biologically and by using power to create steam, rather than electricity for electrolysis, but so far, neither of those options are better than electrolysis.

Ammonia


Anhydrous ammonia, or NH3, similar to pure hydrogen, can be produced by electrolyzing water. Ammonia can be burned in a modified gasoline internal combustion engine.  It takes about 33kwh’s to produce 1 gallon of ammonia. So it would have the same high-electric demand problems as producing hydrogen.

The advantage of ammonia over hydrogen though, is that it remains a liquid at ambient temperatures at just 125psi. So there’s no dangerous or expensive high pressure tanks to deal with. It’s very energy dense, you only need about two gallons of ammonia to get the same amount of energy that is in one gallon of gasoline. So that just means doubling the size of the fuel tank in a vehicle to have the same range as a gas powered car, which isn’t really that big of a deal in many cars.

The hardest part is the production of the ammonia. The only inputs you need are air, water and energy. Easy enough. But to make ammonia requires temperatures up to 1,000 degrees Fahrenheit and operating pressures around 500 psi. And you can’t just buy your own small scale ammonia making machine sized for home use (is that opportunity knocking?). So I would have to design and build it from scratch.

Difficult, but given that once it’s setup and operating, all I would have to do is maintain the machine, it is an attractive option. – No farming requirements, no heavy lifting, no repetitive labor input. Though it would require about $50k of solar panels to produce a few gallons per day. With the price of PV’s coming down all the time though, and the price of gas going up all the time, this could turn out to be a pretty good deal not too far down the road. The costs workout similar to hydrogen.

In fact, you can think of the trade off this way; that hydrogen is relatively easy to produce, but difficult to store. Whereas ammonia is somewhat difficult to produce, but easy to store.

Butanol

Butanol looks really promising. Butanol has almost the same energy density as gasoline (unlike ethanol which only has about 2/3 the energy density). And, best of all, butanol can be made from cellulose, plant matter that we pretty much just consider to be waste, like corn stalks and grass clippings. It can also be run in any typical gasoline-powered car without any modifications.

While butanol used to be a fuel made by farmers in the early 20th century, it is now mostly manufactured by deriving it from oil. Consequently, the art of making it from biomass seems to have fallen by the wayside. Whereas I can find hundreds of examples of people making their own ethanol, biodiesel and electric vehicles, I can’t seem to find people who are making their own butanol at home. Which means, rather than standing on the shoulders of giants and just copying other people’s ideas (easy), I’d be trailblazing my way through figuring out an efficient, small scale production process (not so easy).

It basically involves exposing the biomass to a particular strain of bacteria within a two-stage process within controlled vats, similar to alcohol fermentation, but slightly trickier. Maybe worth experimenting with in the future, but not really a viable solution to my transportation problem right now.


Molasses – Or buying cheap sugars for conversion to alcohol

Molasses is a by-product of sugar production. I couldn’t make enough molasses myself. But it may be worth buying it by the ton in order to turn it into alcohol. One ton of molasses makes about 75 gallons of alcohol. Depending on world markets a ton of molasses would cost me anywhere from $75- $140. Then I would just make it into an alcohol like the jerusalem artichokes. Even at the high end of the price range it’s still less than $2/gallon, and when prices are low, I’m looking at about $1/gallon of ethanol. Plus the by-product could be used to produce methane that I could use at the house. And the final by-product, after methane production, would be a great fertilizer for the gardens.

Buying Ethanol

Another solution, rather than producing my own fuel, might be to buy it from a local producer in bulk, and just keep a large (150-300 gallon) storage tank of it at my house. That way I’m supporting local farmers, and am prepared for a disaster. And in the event of some kind of highly unlikely long-term collapse, I could grow my own crops in order to get a few hundred gallons of it a year.

Doing this with biodiesel or vegetable oil wouldn’t really work because they have a relatively short shelf life.

 


 

Building an Electric Vehicle

In order to minimize my need for energy dense transport fuel in the first place I really ought to just build an electric vehicle. Getting between 40 – 90 miles on batteries only is a realistic expectation for a homebuilt with a good budget. That kind of range ought to cover well over 90% of my typical automotive transport needs. A small generator that I can take along on my longer journeys, while I couldn’t carry something large enough to make enough electricity to run the motor in real time, it could be just what I need to extend the range to make 150+ mile day trips possible. A generator that is capable of trickle charging the batteries could be left on for the entire first leg of the trip. Then, at my destination, while I’m sunning myself at the beach, or climbing a mountain, or hanging out with my friends in their apartment, the generator could be left on to keep charging up the batteries while the car is parked, providing enough of a charge to get me back home.

And the generator could be powered by gas, alcohol, methane, or hydrogen (biodiesel and veggie oil would require a diesel generator which would be a bit too heavy for this application).

But with an EV I could go weeks driving around, running errands, visiting friends and not use any fuel (besides sunshine) at all. With the once-in-a-while 100+ mile trips only using a few gallons of fuel to charge the batteries just enough to get me home.

In the very rare event I want to go on a 200+ mile day trip I could either rent or borrow a friend’s car.

Battery replacement costs would be a consideration. Enough batteries for the type of range I would like would cost me somewhere between $1,000 – $2,500. And they would have to be replaced every 6-10 years or so. And the degraded batteries can be refurbished or used for lower-grade applications where energy density isn’t as critical, like home backup power for example.


Conclusion

So, given all these options, what do I think would be my ideal setup?

I think making a home-built electric vehicle is the way to go. It’s the simplest, proven solution that meets my needs, with plenty of people who have already done it to help show me the way.

Aiming for an all electric range near 60-80 miles or so should cover most of my transportation desires. Along with a removable range-extending generator running off of ethanol to trickle charge the vehicle while I’m at my destination (assuming there are no electrical outlets available). -Effectively giving the vehicle a usable round-trip range of about 150-200 miles for day trips.

The generator isn’t an ideal solution. But it’s something that would be seldom used, allowing me to use no ethanol at all for the great majority of my trips, but still saving me from having to keep a second car just for those longer trips every 1-2 weeks or so. If I start off with full batteries, the generator would probably use up somewhere between 3-6 gallons on a 200 mile trip.

So let’s just call that 6 gallons every 2 weeks, which works out to about 150 gallons/year. 1/8th of an acre of Jerusalem Artichoke, according to my numbers above, would produce about 137 gallons of ethanol/year. – Just about there. Making a batch of ethanol from our other miscellaneous yard and kitchen waste could probably make up the extra 13 gallons. 1/8th of an acre isn’t all that much land to work. And if I find I get bored of the farming life, I can just purchase in bulk and store all the ethanol I need, knowing that if I really had to, I could make it myself.

I’d need a still, and some storage tanks, but nothing too large. I kind of want a still anyway for making my own liquor for consumption, as well as for capturing oils from flowers for flavoring and scenting things (hey, a guy needs a hobby!), so it will serve several functions. And I could keep a couple hundred gallons of ethanol in a storage tank, if my home production comes up short I can always just go buy some to top off my stores. And if I come across a source of cheap, waste sugars, I can always take advantage of those to turn them into alcohol. Whether that be cheap molasses or a bunch of expired foods that would otherwise go to waste.

Plus, with a little extra work, the vehicle’s battery bank and generator could serve as a convenient backup in case we lose grid power at the house for an extended period of time.

Fueling an RV

I’d like to be able to do some RV-ing in the future. Perhaps doing a school-bus conversion project or something. At 10mpg, and with thousands of miles of highway to traverse, there is just no way I could produce enough fuel on my one acre to power it. An electric conversion for something that big is out of the question. It seems my best bet would be to get a diesel vehicle, put in an extra large fuel tank, and fill it up with American made biodiesel at filling stations along the way. If a crisis hits and even biodiesel ends up selling at $10+ per gallon, well, it’ll be time to switch to sailboat cruising I suppose.

 

Down the Road

Down the road, in 5-10 years or so as the price of solar panels drop another 10-30% and the price of gas continues to climb, it looks like anhydrous ammonia, or N3, will be a promising option for my particular situation. Having some solar panels producing an energy-dense near-liquid fuel in a 100% automated process requiring no outside inputs other than water and air is about as close to a perfect fuel as I can imagine.


Are Mortgages Really a No-Brainer?

By mikeBOS | Published: April 9, 2012

You hear it all the time. With mortgage rates so low, you best take out the largest mortgage you can, invest the proceeds into higher-yielding securities, and make minimum loan payments for 30 years in order to pocket some easy money.

Sensible enough if approached with an appreciation for the finances involved.

But then this advice somehow morphs into a common refrain of “never pay cash” when you can borrow.

Take this article from Dollar Disciple from a couple of months ago where he’s trying to convince us to never pay cash for real estate. Then consider his section on “hard money” lending (emphasis mine):

This brings me to my favorite method of financing: hard money. …These loans are usually targeted at real estate investors because it allows you purchase distressed property with a short closing period. …The biggest downside to hard money is the cost. The hard money companies in my area charge 14% interest-only and 3 points to fund the loan.

Now, hold on a second and ask yourself, in this example, are we borrowing money at low interest rates to arbitrage the money into high interest returns? Or are we just borrowing money because we don’t have enough money?

The former could be a smart way to take on a bit of risk in order to use your property to get some additional returns on your equity. The latter could still be smart, if you’re able to make money and still pay those high interest rates and fees, but let’s be candid, you would be better off not having to pay those high interest rates and fees if you had enough cash on hand to handle the repairs yourself. Unless your securities portfolio is averaging better than 14% plus points? In which case, I don’t know why you would be bothering with the headaches of real estate at all.

He goes on to show that, because of all this financing, his actual out of pocket expenses are miniscule compared to his ultimate gain. Conveniently ignoring the risk of default. Which I’m sure, in his mind, is a complete impossibility, but ought nevertheless be considered when making an investment. Might it be a low risk? Sure, but it’s there. Let’s not forget the many landlords defaulting on their financing who have given us this plethora of cheap real estate to pick through.

It’s kind of like pontificating on how amazing your securities returns could be if you just leveraged yourself a few times, completely forgetting to mention the possibility of a margin call.

Then again, maybe I bring my own bias into this since I’ve owned three pieces of real estate and have had a total of zero mortgages. It just makes things so much easier, particularly during the transaction, where I’m able to buy properties with title/property border issues, or in need of repairs, and I can be my own inspector. I can then do all the repairs as I see fit, without needing to use state-sanctioned contractors or having to get permission from the bank, or having to bother with complicated accounting schemes required to satisfy the giant headache that is a rehab loan. I can send out multiple offers at a time without worrying about getting permission from a lender if I happen to want to buy two places instead of one, or buy a multi-family instead of a single, or a commercial property instead of a residential. I can just go after the best, most readily available deal. I can get an insurance policy that makes sense for me, not one that primarily satisfies my lender. And I can get a new new credit card without worrying that it’s going to up the interest rate on my next property.

Another reason not to take out a mortgage might be because your real estate holdings work as part of the diversity of your asset allocation. If you already have 90% of your assets in securities and only 10% in real estate, you might be perfectly reasonable to just leave your money in your property rather than financing it and altering your allocation to 2% real estate 98% securities. It’s sort of a cash-equivalent for the portfolio that keeps up with inflation at the cost of liquidity. Much like holding some money in some CD’s or something.

I don’t know. Maybe I’m just basking in the luxury of being able to afford being less than 100% efficient. Though I do think the massive decrease in paperwork is worth at least a few thousand bucks a year.


Landlording

By mikeBOS | Published: April 12, 2012

Just as I was about to sit down and write a post about my first year of landlording in which my total time invested in the business was just from depositing the monthly check that arrived on time in the mail each month, I got a text message. There was a big damp spot on the wall of a bedroom closet.

The tenants have been a dream. Since they moved in just over a year ago I haven’t heard so much as a peep out of them. They mail their monthly rent early. And from the few times I’ve driven by the house, I can see they take care of the place. The yard is always mowed and the place looks tidy.

So a few weeks ago they texted me about the water problem. It was on an interior bedroom closet, away from any water pipes, so I knew it was a roof leak. I headed up there the next day, borrowed a ladder, found a spot where some shingles had been blown loose by the wind, and patched and replaced everything up, good as new. They told me quickly enough so that there really shouldn’t be any interior water damage once things dry out.

The whole repair, including driving around to get my tools and borrow a ladder, took maybe a  little over two hours and didn’t cost me a dime since I had some left over shingles laying around. Not exactly my favorite way to spend a Saturday afternoon. But a couple hours of work once a year? I can’t complain. Especially since it was such a nice day. The sun was peaking through the clouds and a nice breeze swept away any heat that tried to accumulate on the black asphalt roof.

So I’d say landlording’s still a pretty easy gig so far.

Here’s hoping for another relatively trouble-free year.

 


The Job

By mikeBOS | Published: April 15, 2012

So I’ve been working a job since the end of December. Four overnight shifts a week at a nonprofit residential home for people dealing with mental health issues where I hang out in case anything happens. With internet, tv and a full kitchen at my disposal, it’s pretty much like hanging out at home. It’s been about 4 months now and so far there were only two nights where I was actually asked to do anything. And that just consisted of going out and giving some people rides from the hospital to their apartment.

There are two overnight workers on each shift, but we work on separate floors, so it’s essentially 7 1/2 hours of quiet solitude with 15 minute bookends where I socialize a bit with the other employees during shift changes. A few times one of the residents has been up late and wanted to chat, but they’re usually only interested in a three minute conversation before they meander their way back to bed.

If I’d have known jobs like this existed I probably never would have bothered even going down the early retirement road. With work so easy, there wouldn’t be much incentive to. Of course the pay isn’t great, but it’s not bad. And the benefits are pretty spectacular. I really respect the way the organization is run too. – With lots of respect for the population they serve, and they treat their employees with a tremendous amount of dignity. Thanks to improved pharmaceuticals, treatment methods, and rearranged priorities, the residents are able to live pleasant, relatively independent lives, integrated into the local community as much as possible. Whereas fifty years ago these same people would have essentially just been imprisoned in a hospital and medicated into a stupor.

I’m not sure how much longer I’ll stay. I’ve got it in my head that I’d like to quit before my next birthday in November. But that’s just so I’ll be able to brag that I “retired” at 28. But it really depends on how quickly I get the next couple of rental properties setup. I could see staying on board into the following spring. Plus there’s a fighting chance that I may actually take on some paid work as an attorney at some point down the road, essentially making my claim to retirement at 28 too suspect to be worth bragging about.

I mean, it is a pretty great job, but even so, with my passive income streams I just won’t have much use for the money other than to just build the nest egg ever higher. And it would be nice to be on a normal sleep schedule so that I don’t have to leave parties early to go to work, or sleep through the typical daytime social events. For now though, it’s the perfect way to encourage myself to study for an extra 30 hours a week or so.

 


Labor and Leisure

By mikeBOS | Published: April 19, 2012

 

I must study politics and war, that our sons may have liberty to study mathematics and philosophy. Our sons ought to study mathematics and philosophy, geography, natural history and naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry and porcelain. ~John Adams

Sometimes I’ll encounter people who will argue that working is morally superior to not working. That by contributing labor to the economy, the price of goods and services are lowered, and that working thus contributes to bettering the lives of my neighbors and future generations. We are all tasked with driving progress forward.

I hear that argument and I’m sympathetic to it in some regards. I do think progress is good. – Not the raison d’être of human life, but a generally positive thing that improves lives and increases overall happiness. Expanding knowledge and understanding the universe seems to me a fundamental good that assists us in a task that brings me great happiness; searching for truth. Whether that be through studying pure logic, atomic theory, or something more ethereal.

But I wonder what the end is of all this labor I’m supposed to be helping with. Why should I make life easier for my neighbors and the next generation? So that they can then make life even easier for their neighbors and the following generation? How easy do things have to get before we can hang up our boots and actually move onto the next step? Why are we even bothering progressing if the purpose of life is just to labor with momentary breaks for rest? Is all this progress simply there so that we can labor ever more efficiently on into the infinite future?

Adams didn’t seem to think so. He worked at politics and war for the sake of his sons so that they might study the far more pleasant mathematics and philosophy. And they, in turn, developed the sciences and technology so that the next generation could study painting, poetry, music and porcelain. – Things done purely for the sake of themselves, for their own inherent beauty.

Adams saw a reason for the progress; so that people could eventually live in peace and comfort with enough resources to while away afternoons playing the piano.

Well here we are. I live in a rare moment in human history. Where the world’s wealth and technology has grown to the point where I am free, after a little cleverness of my own in securing my personal financial health, to spend my days studying the fine arts and arts of free men. Wouldn’t it be a great insult to the hard work of my forefathers to not hold dear their gift of progress?

There’s a shared advancement in our search for knowledge that we all partake in, and the more people who help, the further we get. With our progress, inch by inch, we move forward in our exploration of the universe, infinitely outward. We better understand the sub-atomic world, the outer reaches of space, and push the limits of mathematics. But there’s also a personal, ongoing progress that only the individual gets to enjoy in his search for understanding, infinitely inward. We explore it when we refine our talents, indulge in beauty, and master ourselves.

Human progress is good, but it is not an end in itself. And limiting everyone with the task of contributing to progress, while demanding they limit their own personal leisure to periods of recovery from work and temporary sabbaticals, is to value the progress itself over its ultimate purpose.

Labor is not without its rewards and nobility. But I do wish more people would see that neither is leisure.

 


Small Town Lawyer

By mikeBOS | Published: April 23, 2012

When I played football all through my youth one of my coaches was also the town attorney. He had a little office in the middle of town, and worked by himself, without so much as a secretary.

On my way to my brother’s house to borrow a sawsall I recently passed by his office and decided to stop in to say hello. He was in there, casually dressed, shuffling some papers. He was standing in front of a photo of the local iconic Mount Monadnock that he climbs just about every day, year round. We hadn’t seen each other in over ten years so he didn’t recognize me, but he definitely remembered me when I re-introduced myself. I could tell because he did that thing with his face that people do when they go from confusion and searching their memory to a knowing grin as everything comes back to them.

He had no idea what I’d been up to so I told him I was just about to graduate from law school.

His focus is mostly on criminal defense work, with a little dabbling in those routine things a small town lawyer ought to know like real estate, wills and small business issues. He asked about my plans after graduation. I told him about my real estate adventures and how I was up in the air on whether I wanted to practice on a limited, part-time basis, or not at all (I’m heavily leaning towards ‘not at all’). There are only about three key areas I’m really interested in practicing as a solo; criminal defense, police misconduct and asset protection.

There are a few attorneys in Boston making a living suing the police department, but it doesn’t really happen much out in the small towns of New England. Mostly, I think, because they can be hard cases to win and there isn’t much money to be made even if you do. But it does serve as an important check on the police. And with the greater ubiquity of recording devices there are more and more opportunities to get bad cops off the street and make room for cops who actually take their responsibilities seriously.

A family friend, a dentist who also owns a commercial building just up the street from my old coach’s office has offered to rent me an office space in his building, which also houses the town police department, for $100/month. I had previously figured if I did have a go at practicing law it would just be out of a home office. But for $100/month, even if I only actually used the space once a month, just the exposure of having a sign out on main street right outside the police department would be worthwhile.

I could refer stuff I’m not interested in out to other attorneys, and when something intriguing catches my eye, take on a client as I see fit.

So I told my old coach he may see my sign go up sometime in the next year or so. He said, “I hope so!” And offered his future assistance. Though, in all likely-hood, the option to not work at all will be too tempting to pass up.

 


Top 16 Reasons I’m Retiring Early

By mikeBOS | Published: April 26, 2012

I’ve never done a cheesy ‘list’ post, so this should be fun. It’s like I’m a hack, Yahoo, finance writer.

The top ten sixteen reasons I’m retiring before 30.

16. Studying

I’m immensely curious and I like mastering subjects. I’m over educated as it is, but there are still a number of areas where I have a lot to learn, in particular, higher-level mathematics, physics, chemistry, biology and psychology. Not having my intellectual energy drained each day from a job means I’ll have the will power to spend a little each morning working through some reading, listening to lectures, and problem sets. I’d like to get my competency in each subject to a level somewhere between that of someone who holds a subject-specific bachelor’s degree and a master’s. – Affording myself time for extended breaks in between milestones.

15. Sailing

Boy is sailing fun. I’m not so much into racing as I am bobbing up and down on the waves while I casually meander towards an island. Weekends-only for the short boating season in New England is not nearly enough time to really get out and enjoy yourself. And how am I supposed to sail down the East Coast and bum around the Caribbean all winter if I only have three weeks vacation time?

14. Life is Short

An 18 year old American has a 25% chance of dying before the age of 65. Too many people who look forward to life on their own terms in retirement, never make it. I don’t want to be one of those people.

13. Travel

I’m not a big traveler. But it is nice to know that I can take a trip of indefinite length whenever I like. Going and living in a place for 3-6 months is much more appealing to me than flying around the world, staying in hotels, and trying to squeeze in the experience of visiting an entire country in less than two weeks.

12. Work Doesn’t Pay

I can make way more money over the course of my lifetime by investing wisely and being able to take advantage of opportunities that present themselves, rather than being stuck to a job, dependent on one company for my financial survival, and only making money by constantly physically working. What if I became disabled or lost my professional license or was suddenly fired? Much scarier than having a couple of stocks take a dip.

11. Video Games

I know people like to bash video games as an adolescent waste of time. Much like novels, which we all know are simply time robbers that corrupt young women. I think games are great fun. They are comprised of art (music, graphics, writing). And I think some of them are worthy of being called art themselves. And there are so many of them, and they’re an incredible time sink. There’s no way you can be a satisfied gamer and work 40+ hr weeks and keep a typical weekend social calendar.

10. I Hate Careerism

I don’t want to have to stifle my opinions on things because they’re not corporate-friendly. I mean, what, you won’t hire me because there’s a picture of me on Facebook advocating for the decriminalization of drugs? Even though about a quarter of your in house legal department probably uses cocaine every other weekend anyway.

And I don’t want to spend half my life reading books about how to trick human resources interviewers into liking me. And I can’t stand the way people talk about ‘networking’, as if people are simply there to be used for whatever they can offer you, rather than encouraging people to make genuine connections with their colleagues.

And if I’ve read one article on what font or paper type to use for my resumé I’ve read too many.

9. Avoiding Politics

To grow my income as an investor, I study the markets, and make rational choices about where my money can best be used to get the greatest return for the risk. To grow my income as a high level employee I have to study the personalities of people, probably half of whom I can’t stand, in order to figure just how to correctly suck up to them in order to get them to think I’m more worthy of a raise than the sociopath I’m competing with who’s much better at manipulating people than I am because it’s his life’s work. No thanks.

8. Sleep

Most people can only get a sane amount of time in their day by cutting back on sleep. But I love sleep, and I like to get 9-10 hours of it a night. Doing that, plus devoting 9-10 hours a day to a job would leave me with about 4 hours per day to myself, take out about 90 minutes for meals, 30 minutes for a workout, and 30 minutes for hygiene, that would leave me with about 90 free minutes per day. That’s not living, that’s slavery.

And I can’t stand getting up to an alarm clock.

7. Hiking

I love climbing the mountains of New England. The thing is, it takes an entire day. If you’re only free to do it on the weekend that means you can only go when the trails are crowded with other hikers. And if the weather doesn’t cooperate for your two days of freedom, too bad. And good luck trying to plan a couple of thru-hikes each year when you’ve only got a few weeks of vacation time to work with.

6. Avoiding Crowds

It’s so nice to do things on off days. The beach on a Tuesday is so much easier than trying to go on a Saturday. Less than half the people, which means half the traffic, and typically discounted prices on all kinds of stuff like parking and food. This applies to all kinds of things, like amusement parks, museums, the movies, grocery stores and rush hour traffic.

5. Cooking

I like to cook, and I love to eat. But beautiful, elaborate meals take time. Sure, you can perfect the art of throwing together a dinner in 20 minutes or less. But if you give yourself an hour or more, and have time during the day to concoct just what it is you’re going to make, you can do so much better. And there’s no big rush to get it done as fast as possible so that you can get all your other chores in before bed time. So you can enjoy the process.

4. Moving Slowly

Is there anything worse than waking up to an alarm clock, hitting the shower like a zombie, then getting out sooner than you want to so you won’t be late, grabbing something to eat in the car, and stressing out when it takes you 5 minutes to find your keys, all so you can go battle rush hour traffic? It’s so much nicer to wake up naturally, stretch in bed a little bit, maybe even do a little reading before you get up. Then take your time putting together a proper breakfast, enjoying the shower for as long as you like, and making the bed before starting your day.

3. Health

With more time for getting outdoors, cooking proper meals, getting enough sleep and having time to be active, life gets a lot healthier than grabbing food on the go, dealing with work-related stress, and having to squeeze in some kind of short, intense workout.

2. Time to Build Stuff

I’ve always built stuff that’s better than what they sell in stores. The only problem is, it takes a lot of time to do. By retiring early, with the free time available to work on projects, the cost of things will be lower, and their quality will be higher. I can actually do things like build my own furniture, upgrade the house, modify my car, and rehab second hand stuff into better than like-new shape.

1. Paid Work Isn’t Fun

Most work, no matter how interesting it is at first, eventually gets repetitive and boring. Even if I could land a magical job that is always changing and never dull, there are still going to be days where I just feel like sitting around the house, but have to force myself to go in.


The Price of Gas

By mikeBOS | Published: May 3, 2012

It seems to me that just about nobody has the right to complain about the price of gasoline.

Particularly people who waste it. I mean, people will complain about the price of fuel while they sit for ten minutes idling in their car while they wait for someone. Or people who choose to drive around in a vehicle that weighs 3 1/2 tons in order to, 90% of the time, move a single person. And then there’s the people who drive barely reasonable vehicles that at least can get over 20mpg without too much trouble, but they drive it like a 16 year old; accelerating towards red lights and stop signs only to have to brake anyway, and taking off from traffic lights like they’re on their way to a fire. I mean, did these people not go to high school? Do they not understand the laws of physics or the conservation of energy? Or how about obese people who choose to drive to a destination, on a beautiful day, that’s less than 2 miles away? If you do any of those things, how could you possibly complain?

I mean, that’s like flushing your toilet with milk, and then complaining about the cost.

If you can afford to waste a resource as amazingly energy dense as gasoline like that, then the price is clearly entirely too LOW. Particularly since its price isn’t adequately reflecting its external costs.

Think of it this way. Take someone who drives around a 10 mpg behemoth versus someone who chooses a 50 mpg, efficiently-driven hatchback. The 10 mpg rich guy is paying 5x as much for fuel per mile of travel. That means, the price of gas could go up 5x, and he could continue to drive just as much as he always does for the same price, he would just have to switch to the 50 mpg car. Which means that some people are so amazingly inefficient in their use of fuel, that they could still afford to drive around if the price of gas was 5x its current price. With gas around $5/gallon right now, that means most people could easily afford $25/gallon gasoline without any changes to their lifestyle other than their choice of car.

Which is why it completely puzzles me when people talk about the dire possibility of $8 or $10/gallon gas. That’s NOTHIN’! Many people could do $25 without a problem. The only people who would really suffer are the ones already doing all they can to be efficient.

Now, if you were driving around in a two-seater ultra-light vehicle that got 100mpg, never idled, and rarely exceeded aerodynamically inefficient speeds, then ok, I’ll buy you a beer and you can complain to me about how hard it is to fill your tank. Until then, be grateful this amazing resource even exists, and stop treating it like it’s as abundant as salt water.

 


Experience-based Consumerism

By mikeBOS | Published: May 10, 2012

Minimalism, and the now-fading frugality movement that had swept the nation during the great recession, has brought about this idea, by now a cliché I think, that buying stuff won’t make you happy so instead you should spend your effort and money on “experiences”. The idea goes that having more “stuff”, after basic needs are met, doesn’t actually make people happy, but actually being free to spend time with friends, on hobbies, or just doing some simple activity that you like will make you happier. So you’re better off taking the time to “do something” rather than just working harder so you can buy yet another gadget or new car or whatever.

Somehow, this message has been co-opted into not just spending time on things, but actually spending money on them. So, instead of encouraging people to cut back on work hours and using the time to indulge in a hobby like cycling, hiking or reading; people seem to jump to the conclusion that they should reprioritize their spending from acquiring objects, to spending money on these activities that really don’t require much money to do at all.

It seems, from the studies they’re based on, we ought to be reading articles along the lines of, “Don’t buy an iPad to be happy, instead cut back at work and take up snorkeling!” But instead I see healines more akin to, “Don’t buy an iPad to be happy, instead go to Barbados!”

To me it sounds suspiciously like a bit of pop-psychology co-opted by the travel industry in order to get people to spend more money on airfare and less on gizmos.

Whether you’re falling prey to consumerism by buying gadgets, or you’re falling prey to consumerism by buying fancy dinners, or exotic trips, or pricey theater tickets, the end result is still the same; spending money according to how marketers want you to.

How come these fluff pieces never mention the type of happiness that can come from having significant savings? Or enough money to never work again? Or being free from ever having to worry about paying a bill again? How about comparing the happiness that comes from not even having monthly bills to pay as compared to the happiness from an expensive luxury vacation that cuts into your savings?

One caveat, I do think consumption and spending money carefully and thoughtfully on both material objects as well as “experiences” can be enjoyable and not at all a waste. I just object to the morphing of the message of ”people derive more happiness from experiences than from possessing property,” to the popular media message of, “spend money, just not on stuff!”

Do experiences make people happier than possessions? – Maybe. – Apparently.

But that doesn’t mean then that people ought to take all the money they’re blowing on stuff and turn around and blow it on services. You don’t have to pay other people in order to have an enriching experience, it turns out you can do it yourself for little and often no money.

Below is a photo I took from atop a plateau West of Albuquerque. I mountain biked my way several miles outside of the city at night, and scaled the plateau with the help of a flashlight, and was entranced by the scenery long enough to enjoy this sunrise.


The New Arms Race

By mikeBOS | Published: May 17, 2012

People often justify purchasing larger vehicles for safety reasons. The larger the mass, the more likely it is to just crush things in its way during a collision. The problem is that it creates an arms race where everyone just keeps buying ever-heavier vehicles in the endless quest for safety.

I certainly understand the desire for safety. Automobiles are the number one cause of death for Americans under the age of 45.

But the problem with buying heavier vehicles to increase safety is that it only increases your safety at the expense of the safety of others. Yet the driver of the heavier vehicle never has to pay or compensate other drivers for the increased risk they have created. Normally, if you engage in a risky behavior, you pay for it in increased insurance premiums, increased penalties when things go wrong, or stricter liability when other people get hurt. But, for some reason, we don’t do this with vehicles.

We allow people to make the roads more dangerous without asking them to compensate others for the danger they are creating. One consequence of this is that, since they don’t have to pay for the increased risk, there is no disincentive to take the risk. A heavier vehicle is all gain and zero negative for the individual, and all negative for everyone else.

Drivers of larger vehicles may pay out more damages in the event of an accident, but that’s because the actual damage they inflict is greater, and so the amount required to make an injured party whole is higher. But if we limit the risk taker to only having to compensate others for actual damages, the injured party still isn’t being compensated for the fact that, had the heavy-vehicle driver chosen a smaller vehicle, his injuries never would have happened in the first place, or would have been less severe. The heavy vehicle operator has then off-loaded his own safety risk to the rest of society without having to pay for it.

I think this is an area where the law ought to intervene in order to shift some of the cost of that risk back to the person creating it, rather than letting it fall on the backs of everyone else. Some states already tax vehicles based on their weight. And heavier vehicles pay more gas taxes. But those taxes only go to repair the damage on the roads that heavier vehicles make. They are not off-setting the increased safety risk.

Some people might cry “freedom.” That this uneven distribution of risk is just a consequence we all have to live with because people are free to drive whatever kind of vehicle they want. Let me see if I can get these people over to my side by use of a hyperbolic example. Say I had lots of money, and was very concerned about my safety, and being aware that automobiles are the number one cause of death for people my age, I decide that to reduce my chance of injury in the event of a vehicle to vehicle collision, I am going to purchase the heaviest vehicle I can find. So that instead of stopping in a collision, I’ll just plow right through the other vehicle like it isn’t even there. You might say, “Yeah, that’s your right.” Now let’s say, the vehicle I choose is the largest dump truck I can find. And let’s say, to make it even safer, I decide to move the driver’s seat towards the middle of the vehicle, install the largest snow plow I can find on the front of it, spend $10M modifying the chassis, adding wheels and axles, so it can carry enormous amounts of weight (the largest production dump truck in the world can carry 800,000 pounds), and then I proceed to fill it with the densest material I can find, maybe lead bricks. And of course I would include increased brakes and any other necessities so it had similar performance as any other stock vehicle on the road. And let’s say I’m sixteen and just got my license two days ago. You still think I shouldn’t face any additional penalties if I then choose to drive drunk? Or recklessly? After all, why wouldn’t I? I won’t be the one getting hurt.

You might say that’s different, because there were after market modifications. Ok,  let’s say this idea turned out to be so popular that millionaires the world over wanted this vehicle guaranteed to keep you safe. And demand was so strong that GM stepped up and started producing a line of them. You really think people who deliberately choose to make the roads more dangerous for everyone else shouldn’t face any increased burdens in order to offset that risk? And if you think the driver of an 800k pound vehicle who makes these choices ought to face additional responsibilities for the increased liabilities he’s created, then you shouldn’t have a problem doing it for the driver of an 8k pound vehicle either.

I propose we start discussing ways to shift the burden back to the individuals who decrease everyone else’s safety for the sake of their own.

One way would be allow the weight of the vehicle to factor in during tort claims. If there is an accident that results in damages to property, or injuries, or death, the court ought to be permitted to award punitive damages against the driver of the heavier vehicle, punishing them for the increased risk they have created on the road.

Another might be to make fines proportional to the weight of a vehicle. A moving violation in a Yaris might be $200. But in a Hummer, it could be closer to $1,000. We could simply take the vehicle’s gross weight and multiply it by some figure we can all agree on.

Sure, the heavy driver would still be safer at the expense of the smaller, but at least they would have to pay for it. Right now, they’re getting it for free. Which is why I know this would never be a very popular idea, regardless of whether or not it would be good policy.


Edwardian Me

By mikeBOS | Published: June 7, 2012

I’ve realized my attitude towards work more closely resembles that of the British upper class of the Edwardian era than it does that of a modern American.

The idea that someone should desire or need a career or profession is distasteful to me. -Something to be done only out of necessity. Education ought to be pursued so that it can help you obtain an understanding of the world, not a job. And work is something to be suffered to your detriment, and does nothing to build your character except to make you better able to suffer through yet more work in the future.

My attitude towards work varies though depending on the motivation for it.

Cooking my own dinner is work that I enjoy. And I would feel I was missing something if I knew I was never going to feel the sensation of kneading a dough ever again. Though if I had to work as a baker for money, I’m sure I’d be right sick of it after only a few months. Tending a small garden is enjoyable. Whereas toiling in a massive field hand-picking a harvest for an hourly wage would be misery. Retro-fitting a car would be fun, but working full-time in a body shop would get tiring. Making a legal argument can be stimulating, but rehashing the same subjects day in and out down into minutiae would just get kind of boring.

I suppose you could construe my attitude as an immature obsession with novelty. Maybe that’s fair. Though I am quite good at putting up with work and trying to focus on the best parts of it. But I never kid myself that I wouldn’t be better off not having to do it all.

I think there’s a bit of a fear among the young, financially independent, of being thought of as merely shiftless and lazy. “What’s the matter, you can’t handle work? Are you not up to it? You know it’s good for you, don’t you?” And so we insist that we will be volunteering, ‘working’ on our investments, or taking occasional jobs for fun even in our early retirements. As if to say, “See! We’re not lazy!”

If we had some Edwardian friends we wouldn’t have to face this. Our desire to go fly fishing all afternoon, visit with friends, or simply to take a stroll through the garden, not breaking a sweat all day, would just be seen as normal and appropriate. The idea that we ought to go work in some way because we would be the better for it would just be seen as silly.

I think there’s some fear too, that is struck in the hearts of men, when you question whether work really is good for the soul, or simply something to be endured. So many have convinced themselves that they are content because of a hard day’s work, rather than in spite of it. And the idea, that they actually would be happier if they could realize their occasional dreams of being on a permanent vacation, is poisonous to their contentment that relies on a belief that pulling themselves out of bed and into their work boots after ever-insufficient rest is actually contributing to their well-being.

Then there are the financially independent who do work by choice, in the same field for decades, who must surely look at me and wonder how I could possibly be happy spending days often doing no more than just puttering around the house, or the garden, or having coffee with old people. All we can do is gawk at each other from afar, across a chasm too far to bridge, and wonder in amusement at how the other could possibly be happy.

 


Progress

By mikeBOS | Published: June 14, 2012

I remember I came across Financial Samurai’s ridiculous post on the ‘evils of early retirement‘ months ago, and dismissed it as a fluff piece meant to get a few page views. And I never bothered to go back because he just didn’t come off as a serious writer. But a guest post by Mr. Money Mustache had me perusing his site again recently.

With about half of the stuff Sam writes I find myself nodding along in agreement. The other half, I’m wondering what planet this guy is from.

On the one hand, he seems to agree that financial independence and early retirement are great goals worthy of anyone’s ambition. But on the other hand he seems to think life is not worth living unless you notch plenty of impressive achievements into your belt through hard work and dedication. This translates into, “retiring at 45 is ok, but retiring at 30 is ridiculous.” In my own mind, there is a massive inconsistency here.

He seems to think that, for life to be well-lived, it has to include some kind of one-time business success, before you can then happily retire to a life of hanging out on cruise ships. If you embark on the life of leisure without the previous success, then you’re throwing away your potential and are ‘giving up’ when you should be striving to achieve.

But where does that idea come from? It seems utterly foreign to me.

And then I discovered, what I think is, the core difference in our worldviews on his about page. Where he writes prominently, “‘Progress’ is my one word definition of happiness.

Ahh! Well, on that count, we could not be further apart.

The desire to progress, to achieve, to change, in my mind, can only come from unhappiness. Discontent with your current position is what drives someone to take action to change their position. After all, if one was happy with his position and place, he wouldn’t have any need to try to alter it.

Progress is not a blanket good, but just a remedy for dissatisfaction.

Now, sure, I don’t sit still in a room all day contemplating the universe. In fact, I work at making progress in my own life. I make progress towards my financial status, my social status, and my understanding of the world. But I don’t do that because progress is an inherent good. I do it because security, community and knowledge are inherent goods. This relatively small amount of progress I work at is an indication of my dissatisfaction with my current state. The more progress someone feels they have to make, the greater their level of dissatisfaction.

When I think of “progress” I don’t think of happiness, quite the opposite. I think of dissatisfaction.

The end result of progress is valuable, but the progress itself is not. If I could snap my fingers and achieve my goals without having had to do any work, I would have more happiness, not less.

Happiness to me manifests itself in stillness, contemplation, fellowship and gratitude. A happy man doesn’t go in search of a challenge, or to satisfy his ego with accomplishments. He sits untroubled, unhurried, enjoying his pure existence and consciousness itself.

The ultimate achievement would be to progress to where you no longer feel any need to progress.

 


Home

By mikeBOS | Published: July 10, 2012

The house is done-ish and we (me and the BF) moved in about a week and a half ago. Basically I bought it with cash in January for $25k. It was falling apart. The furnace didn’t work. The plumbing had all been stolen by copper thieves. Several windows were missing and the ones that weren’t required circus-show-quality feats of strength to open. The siding was a mess. And in several places the siding and windows were installed improperly creating a bunch of wood rot from moisture pooling in a couple spots in the walls.

It’s in a small town, convenient walking/biking distance to grocery stores, about 15 places to eat (a diner, sub shops/pizza places, chinese food, a couple italian places and a few plain old American restaurants), the post office, a couple of pharmacies, a large rec center, some downtown shops (florist, small hardware store, etc.), about a 15 minute drive to many family members and about 90 minutes outside of Boston. It’s close to some small mountains for hiking/skiing, and there’s tons of lakes and ponds in the area for swimming/boating.

I remember about 3 or 4 years ago I was making good money, saving over 80% of my take-home pay, and wanting to buy a house. But every six months or so when I’d check the listings the prices just kept going up faster than I could save. I believed there was a crash coming. There had to be the way prices were moving relative to incomes. So I waited and waited and waited. And it paid off. But I never imagined it would work out this well. I thought prices might come down 15-25%. But this house was mortgaged for $140k just four years ago, and this year I was able to buy it for $25k. – Over an 80% drop in price.

So while I was finishing up the last semester of law school, holding down my part-time job at a non-profit, and studying for the bar, I fixed the place up in my spare time.

Below is a mix of some before and after photos! Click through for large versions.

 

 

There’s still some work to do. The garage needs new doors and a coat of paint, plus a good organization/clean out of all my tools and scrap materials. And I’d like to slowly replace the giant lawn with gardens and trees. And we need to get a wood stove for that nice big hearth in the sun room.

So I painted 90% of the walls, plastered, dry-walled and trimmed in several spots, re-trimmed several windows, replaced many lights, installed plumbing including a new hot water heater, fixed some small electrical issues, added insulation, got the oil furnace working, rehung the doors so they’d shut smoothly, re-framed parts of the house below some windows that had rotted, installed 8 replacement windows, put in new flooring throughout the house, added a bar and painted the kitchen counter tops, patched the roof, pressure washed the vinyl siding, and put in a mail box. And probably a bunch of other things I’m forgetting. Everything came to around $8k in material costs.

The house is just under 1500 square feet, with 3 bedrooms, 1 bath, a mud room, a laundry room, kitchen, living room, sun room, and the 2 car detached garage. It sits on 1 acre of level land that’s mostly lawn with trees/bushes on the borders. There’s a creek running along one of the lot borders. And it has a large paved driveway.

So far it’s been a nice home. I’m already looking forward to buying the next one.


The Bar

By mikeBOS | Published: August 3, 2012

I took the bar exam a couple of weeks ago. The run up to it was far more difficult than the actual exam. Keeping up a steady pace of reviewing notes and practice questions night after night, not knowing what lay ahead, was more taxing than just sitting down for 12 hours and answering a couple of hundred questions.

I wouldn’t call the test easy. But they do allow you to get quite a few answers wrong while still receiving a passing grade. I walked out of the test feeling pretty sure that I passed it. The results don’t come out for a few more months though so we’ll just have to wait and see.

One poor friend of mine, Nina, is a wreck. – Convinced she’s failed she can barely sleep. I keep telling her to just come over to my house for a drink so she can forget her cares, but I’ve yet to coax her out. I’m sure she did fine, she just worries far too much, she was the same way all through law school. I’m the polar opposite. I’m convinced I did well and even if I didn’t, big deal, I’ll just try again.

For the first few days after the exam I spent a lot of time just hanging out with friends. – Pouring drinks, smoking things, and enjoying the company of others.

I’m still holding down my 4 night a week do-nothing job at a non-profit. I took the job last winter because it basically gave me 8 straight of hours of nothing to do but sit still and study. Now that the bar exam is passed I’ve been spending my time doing some pleasure reading. Since the job is past its usefulness for me I’ve been considering when I’m going to quit.

I’m going to purchase another rental property or two, hopefully by the end of the year. I definitely have enough money for one, and might have enough left over to get a second if I can drive a couple of hard bargains. The rent from two more places would be enough to cover all my living expenses indefinitely, plus allow me to save a fair amount of money each month.

So I’ll probably hold onto the job until I’ve bought what would be my 4th property (since I have two currently).  Just so I have that little bit extra each month going into my savings while I wait and see how much these next two houses will actually cost me. As soon as I have the 4th house I’ll quit my job. So hopefully that will be by the end of the year or so. In the meantime I’ll be enjoying my quiet nights working through a stack of books that have been piling up while I was busy the past three years reading case law.

 


The Trailer

By mikeBOS | Published: August 10, 2012

After doing some research I decided to pickup a little utility trailer to help me with my rehab projects. With my first couple of houses I was borrowing/renting trucks when needed, or having to pay for the delivery of materials. While that method really wasn’t so bad, it was inconvenient and sometimes a little costly. I have a habit of filling up the fuel tank whenever I borrow someone’s vehicle. It just seems like a polite way to thank them. But when you have a 30 gallon fuel tank and almost $4/gallon gas, that can add up to an expensive courtesy for the pleasure of hauling some carpet scraps to the dump.

I looked into getting my own truck. I could either sell my 30mpg sedan for a small reliable truck. Or just keep the car and get a slightly less-reliable truck that would only be used when needed. The idea of having to burn all that extra fuel driving around an unloaded truck doesn’t seem right. Though the idea of having to insure, register and maintain two vehicles didn’t seem like much fun either. And at around a minimum of $5k for a usable used truck, well, that would cover an awful lot of rental fees and filled gas tanks.

But then I see all these great deals on surplus building materials, tools and appliances on craigslist and I can’t jump on them because it’ll take me two days to arrange a vehicle and by then the ‘motivated seller’ has found someone else to deal with. So what to do?

Well it turns out my little 30mpg sedan has a 2,000 lb towing capacity. Who knew? So I hit the internet in search of a hitch. I found this little guy for about $130.  It took me about 30-40 minutes to install the hitch in my driveway. It just amounted to attaching six large bolts to the frame of the car. A simple plug-in wire harness, that took another 20 minutes or so to install, provides power for the trailer’s lights.



Easy to Follow Instructions





 

Then I setup an RSS feed on craigslist for a utility trailer under $600 and waited like a hunter for his prey. A few days later an add popped up for a little 4×8 trailer that seemed to be in good shape and didn’t need any work. So I headed over and met this retired truck driver who rehabs trailers for a little side money. He does a little welding, painting, replaces any of the wood that needs to be replaced and rewires them with light and wiring kits he buys in bulk.

It was big enough to carry 4×8 sheets of plywood or drywall laid down flat (the biggest feature I was looking for, lots of trailers have wheel wells jutting up in the way). It felt sturdy, the guy was honest, and it looked pretty.

“You want $400?” I said, as I checked underneath for rust.

“Yeah, $400.”

I didn’t say anything. I was checking out the tires and thinking about how much easier this was going to be than renting trucks. But apparently my moment of silence was taken as a negotiating tactic.

“But I’d take $375.”

“That sounds very fair. Let’s do it.”

It rode home like a dream. It’s rated to carry 1,500 lbs. I’ll probably never get it up much past 600 at the worst and usually probably only a few hundred pounds.

 





 

With the hitch, trailer, insurance and registration I’m into the whole setup for right around $500. So I think it will quickly pay for itself in saved rental fees, gratuity fuel, and time-sensitive bargain items. Considering I paid $1,500 for the car over 2 years ago I’d say I’m doing pretty good. This is how you setup a property rental business with nice fat margins.

 


Escape

By mikeBOS | Published: August 28, 2012

I just returned from a two week trip where we flew to San Francisco and then rode a train across the country back to Boston.

Back in January I was reading some blogs like millionmilesecrets.com and spent a few weeks going back and forth between forums, articles and blogs that cover using rewards points for travel. It’s a little confusing at first, and reading the lengths some people will go to for a free plane ticket can turn you off of the whole thing. But I decided that using credit card sign up bonuses to cover some potential travel costs might be worth my time.

So I signed up for a new credit card and went about booking a trip last January. So two weeks ago me and the BF hopped a cheap plane ride to San Francisco for a quick two week vacation. We stayed in the bay area for a week, visiting a couple of old friends and seeing some sights. I had a great deal on a rental of a little econo-box for 4 days for about $60 bucks, and when the rental agent offered to give me a red Camaro for the weekend, if I’d just throw in another forty bucks, I figured why not?

Then we had a few deluxe sleeper rooms on some Amtrak trains to get us back home. Each room had a couch, a chair, two beds that folded out for sleeping, a private toilet and shower, and they came with three meals a day. The ticket would have cost us over $3k but it was free using the rewards points. We brought a case of California wine onto the train with us and eventually deboarded in Boston with one bottle left, and that one only survived because a friend requested that we bring a bottle home for her.

Sleeper cars on trains are my favorite way to travel long distance. I’ve done it a few times before. The rooms come with a huge picture window to sit by as you watch the changing scenery lumber by. It’s slow, relaxing and methodical. There’s lots of time for conversation and thought. And you’re pretty much surrounded by a bunch of wealthy, bored people who like to drink and mingle to pass the time. On the leg of our trip from Portland, OR to Chicago we were neighbors with an Australian couple in their early sixties who took a liking to us (how much of their affinity was due to the abundance of wine in our room, I’m not sure). I was pleasantly surprised when I asked Trevor how long he had been retired and he responded, “25 years now.” So he and his wife retired at 35! Well, well! So we had plenty to talk about as far as investing, our dislike of regular jobs, and frugality.

From what I could surmise he and his wife retired with a little under a million dollar net worth. Still plenty even today, I think, for a frugal couple who can plan well. And they told me they didn’t spend too much in their first decade of retirement. Opting to travel, but cheaply, and spend time on free and low-cost hobbies like hiking, cycling, gardening and home brewing, and continuing their frugal ways that got them into their retirement. And because of that, rather than simply maintaining their portfolio, it was compounding on itself and once they hit their 50′s they actually switched gears and decided to make a few changes, even though it was going to cost them a bit more. That’s when they got themselves a beach house, and a few years later a 40′ motor-yacht, and started loosening the purse strings a bit more when they traveled.

When I gave them the details of my situation there was a sort of instant friendship. I’ve noticed whenever I meet anyone who has retired at a young age it feels like I’m meeting a fellow member of a secret club only we know about.

I won’t write a tutorial on using rewards points because I’m really not qualified, nor interested enough in it, and if you go looking you’ll find that others have already done a fine job explaining everything. I will say that I’ve found that learning the ropes of the rewards programs and applying for credit cards and taking advantage of sign up bonuses is worthwhile for me because it can cut the cost of a trip down to a fraction of what it would normally be while allowing me to enjoy things I probably wouldn’t be willing to pay for if I had to use cash (like first class seats, deluxe sleeper cars, and 4 & 5 star hotels).

I’m not that big into travel, I don’t mind it, but it’s not a big thing for me. I enjoy being at home, puttering around the gardens and visiting friends. The BF, however, still has a bit of wander lust in him and has yet to explore a whole lot. So the rewards points make booking a trip a little more palatable for me. In the end we paid cash for the one-way plane tickets ($300 for the pair), 4 nights in a decent, clean hotel outside SF ($45/night), and 4 days with the sports car ($100). And we got two nights in a 4 star hotel in SF for free (Saving about $350), and the cross country train ride in a sleeper car from SF to Boston (Saving about $3,500). So we paid about $300 each for a trip that should have cost us almost $4,500 all together.

In the future we plan on doing some 1 month-or-so trips to some low-cost international destinations and I’m planning on using points to get us some free (or nearly free) plane tickets and hotel rooms.

While I’m a little skeptical of the value of going places and seeing things, I do enjoy the feeling of escape. It’s not so much going places that I look forward to, it’s the leaving that I like. It’s nice to abandon the everyday if only for long enough so I can remind myself why I’ve chosen to make it the everyday. It’s like getting immersed in a long-term project and then taking a moment to step back and look at what you’ve done and see the whole breadth of what you’ve been working on. It adds a freshness to things upon your return to them.

 

Click to enlarge the photo below that I took out of our window somewhere in Montana.


Paul

By mikeBOS | Published: August 29, 2012

When I was 15 I was at an amusement park with a friend. I was showing off to her by balancing a folding chair on my chin (do my talents ever cease?).

A manager was walking up to me, “Hey, I need that chair back. But you should apply for a job. We’ll hire you.”

I had planned on being a lifeguard that summer (my penchant for laid-back jobs started early). I had gotten all the required certifications and was just starting to apply for jobs. But show biz sounded so much better!

So I spent the summer at a charming, but dying, small amusement park. The crowds were so small that the three other entertainers and I spent most of the summer in the lounge entertaining each other instead.

Paul was my supervisor, he was hired as a consultant to work part-time overseeing the park’s entertainment. We got along and at the end of the summer he asked if I’d like to work part-time for him at his theater. It turns out Paul operated a marionette theater. He wrote the shows, recorded the soundtracks for them, with original musical scores, sculpted all the puppets and made all the props himself. He taught me a lot of what he knew over the next two years. His entire company consisted of just himself, one business partner, and me.

I became a pretty good puppeteer over those years and got comfortable working large crowds. I remember picking up the pamphlet for the Fine Arts Puppetry Program at UConn at one point and considering a future in the arts (Thank god I put it down).

My friendship with Paul was well solidified by the time I was heading off to college.

We would often work together in the basement of the theater sculpting, painting and building. We would have long conversations as we worked with some ambient radio in the background. It was just a few weeks after working with him at the theater that, when it became relevant during our conversation, Paul told me he was gay.

He looked up from his work at me, “I don’t know if that bothers you or anything…”

“Nope. I am too.”

And then we learned from each other, he got some insight into what it was like to be an openly gay 16 year old high school athlete in a small town. And I began my understanding of what life was like through the 70′s, 80′s and the AIDS crisis. Imagine watching over half of your friends and even acquaintances die, painfully, over a ten year period throughout your 20′s and you can begin to understand the horror most gay American men went through. – Simultaneously grieving for their friends and fearing for their own lives; wondering if they were next. It’s an understanding that has since been expanded on by my subsequent inter-generational friendships.

Paul was just turning 40 when I met him. And I was born old, so we got along. He was a very positive voice for me. I mean, the man made his living off of producing puppet shows; he believed anything was possible. My ideas and plans were always met with positive affirmation. – Rather than the doubt, uncertainty and discouragement so many people offer.

He almost became a catholic priest, but as a young man changed his mind just before he was about to enter the seminary and chose to pursue the fine arts instead. So he was always ready to discuss theology, ethics and philosophy, as well as poetry, painting and business.

We would chat and I would phone him now and then while I was off in New Mexico. And I’d always visit him whenever I was back in town. And since I moved back to New England about six years ago we’ve collaborated on more projects, had many dinners and barbecues in his garden, and gone on annual camping trips to Cape Cod.

Our relationship, now over twelve years old, is my longest running friendship with anyone.

I received a phone call last week during my train ride across the country. It was Paul’s friend and business partner calling to tell me that, after not feeling well last week, Paul had some images taken at the hospital and has been told he has a cancer that has metastasized to his brain, bones, and kidneys, and it is untreatable.

He is now at home, on hospice care, with a morphine drip and days to live. He’s 53 years old.

I’ve never really experienced death intimately in my life. I’ve had some older family members pop off, but no one I was really close to. I was at Paul’s bedside yesterday and will be again tomorrow. I’d be there every minute if he wanted, but he has a big family and a lot of people who want to pay him a visit while they have a chance, and he needs some time to rest so I’m trying not to be selfish with his time.

I’ve taken the news with a sort of calm mourning. I feel a loss, myself, for losing my friend. – And I feel a sort of empathetic loss for Paul’s missing out on what would have been a great few more decades.

But Paul is a resolute stoic, ready to die and at peace with his fate. And I’ve followed his lead. We’ve talked candidly about the entire thing, not missing any opportunities for dark humor. And the experience has made me yet more appreciative of the relationships I have and the people I love.

It’s difficult to come to some conclusion when discussing something so feared. I suppose the typical way to finish talking about death is to turn away from it, back towards life, and remind everyone that we are to seize the day and appreciate the time we have because, though we may forget it sometimes, it is not limitless. But you all know I don’t write clichéd drivel.

I’d rather leave it as the cold, hard, punch in the face that it is. My friend is dying and I’ll miss him terribly.

A picture of Paul’s formal garden I took almost ten years ago. It looks much the same today.


Heretic!

By mikeBOS | Published: September 4, 2012

Just a few months ago I wrote about how I thought my attitude towards work was more like that of a member of the upper class in the Edwardian era than that of a modern American.

Just this past week two similar articles peaked my interest and offered some insight. William Deresiewicz writes of the American obsession with work:

To every age its virtue. For the Greeks, courage; the Romans, duty; the Middle Ages, piety. Our virtue is industriousness, in the industrial age. (It is one that would have been incomprehensible to other times. The Greeks had a word for people who worked harder than anyone else: slaves.) It is the Protestant ethic, in other words, made general by the Victorians as the factories rose. That it is a virtue, not merely a value, is proved by the aura of righteousness that surrounds it. A virtue is not just a personal excellence, it is something that is felt to call down blessings upon the community, that wins the gods’ approval, that possesses not just practical but metaphysical worth.

It’s this belief that I was trying to get at, unique to the modern era, that work is good, without question, the harder the better. And the more you can endure, the better a person you are. It seems to just be repeated over and over, and rarely questioned.

Deresiewicz goes on, ” If you don’t work as hard as people think you should, you’re not just morally inferior, you’re committing a kind of spiritual treason. And if you deny the value of work as a matter of principle, you’re treated like a heretic.”

And Leah Libresco, riffing off an article about the hook-up culture among young professionals, laments that people are putting off meaningful relationships in their personal lives for the sake of their professional lives, “A life that has no room for serious romantic partners can’t have much space for deep friendships either. This should be the one culture war fight where we can all be on the same side: if careers preclude real relationships, something’s gone deeply wrong.”

Both authors are calling for systemic awareness and change. That would be nice if academic and corporate expectations allowed for a less hurried life. Even though a lot of the hopes to be promoted ever higher actually come from pressure among peers who constantly compare themselves to their friends (who post filtered, idealistic visions of their lives on social media) in an ever-amplifying feedback loop. But it’s powerful to know that systemic change isn’t needed for the individual to forgoe the temptation to endlessly compete and make her life look like a magazine ad for something showy and expensive. The choice is in everyone’s own hands. Are you going to let your work dictate what your life will be like, or do you decide to have your life dictate what your work will be like? I think all it takes is a little curiosity to figure out what other options are out there, and a little courage to step outside the system that’s coddled you since Kindergarten. You get to choose your values and figure out what is virtuous, you don’t just have to hang your head and go along with the popular refrains of the day.


I Quit

By mikeBOS | Published: September 10, 2012

I put in my two week notice at my job last week. I’ve been working quiet, part-time overnight shifts at a non-profit that cares for people with mental health issues.

I thought I was going to hold onto this job through the winter or so, until I had setup a couple of more rental properties at least. But things changed at work. After I moved into my house, in order to have the shortest commute possible, I transferred within the same organization to a different location. Things went well at first. But then my new supervisor, who I only see in the mornings, started leaving me notes with additional tasks she wanted me to do.

My primary purpose is just to be there in case of emergencies or if one of the residents needs some help coping with their conditions. And I was happy to do that stuff on the occasions when it would come up. But then, since I relocated, I’ve been getting notes from the day staff asking me to do more and more extra stuff. Like spend hours working through a backlog of paper work filing that they’re supposed to keep up with during the day, or to move furniture, or clean stuff.

I discussed with the note-writer that, while I was happy to do a little something from time to time if they were in a jam, I wasn’t there to regularly finish the overflow of work from the day staff that isn’t even technically my job. So after that the notes didn’t stop coming, they were just liberally sprinkled with underlined and capitalized “pleases” and “thank you’s.” While the politeness was appreciated, the message was clear; this new place expected a lot more out of me at night than the previous location I worked at.

So I mulled it over for a couple of days and decided that if I was going to be working that hard I may as well be working regular hours and doing something either more interesting or more profitable. With that I penned a tastefully-written two-week notice and decided to move on.

The job was great for while I was studying for the bar exam and finishing up law school. I was able to just sit still all night and get my studying done while making a little extra cash. But now I’m convinced I’m financially better off being free all day to do more entrepreneurial things or maybe fall into some higher paying work if an opportunity comes up.

And wouldn’t you know, two days after I put in my notice I got word that I have an accepted offer on another house. Perfect! So now I’ll be able to devote all my time to rehabbing my next rental project and getting it up and running. With this next property my rental income will more than cover my living expenses.

I would still like to get one or two more rental properties just so that I can always be adding to my savings, have extra money for those cool alternative energy projects I’ve always wanted to build, and to start diversifying my holdings by getting back into securities investing. After this next property is all said and done I may have enough savings left to buy yet one more property, but I’d be cutting it close. So I’m going to start thinking about ways to save up for the next couple of properties. While I can live pretty well on the rent from just the two places, I’ll have a paltry savings rate.

Fortunately, though, this means that I can save 100% (post-tax, obviously) of my income from future entrepreneurial endeavors and/or employment. I have a few ideas of stuff I’d like to try, maybe I’ll try to tap into some of this equity I’ve built up, plus my bar exam results come in next month opening new doors. But for the next few months I’m just going to focus on rehabbing the next property and enjoying a life simultaneously free of a job and school.

I must say, the feeling of being in a position to be able to afford to not work, at just 28 years old, was absolutely worth the effort.


College as an Investment

By mikeBOS | Published: September 13, 2012

I’ve written before that I think of college mainly as a luxury consumer good and not as an investment. So this article in the Washington Times about a paper from the Brookings Institute caught my attention.

The Brookings Institute wanted to answer the question, if an 18 year old had $102k in cash, would he be better off investing in the stock market, or spending it on going to college?

Brookings calculates the cost of a 4 year degree, right now, including the opportunity cost of lost earnings for four years, to be $102k. First of all, I disagree with their assumption that an 18 year old high school graduate is only capable of earning $11,600. I think that figure is something closer to $20k or $30k with a little effort. They take their number from “average earnings” meaning there are a whole lot of 18 years-olds earning zero dollars per year bringing the average down. But let’s take their super conservative assumption anyway.

Brookings then calculates that a 4 year degree is worth about $570k of increased lifetime earnings from a person who works from 22 until 65. And they conclude then that the return on investment is 15%, so it’s a good investment compared to the stock market that typically returns around 7% (their numbers).

Now hold on a second.

I can’t believe they would be this foolish, so I assume I’m making some kind of mistake here. But it appears they’re comparing apples to oranges by haphazardly ignoring compounding interest. When you spend the $102k on college, the money is gone four years later. When you buy $102k in stocks, four years later the money is still there, and then some. Plus, at any time you can decide to sell some stocks and go to school instead, try exchanging your degree for some stock certificates and let me know how that turns out.

$102k invested at 7%, compounded annually for 43 years comes to $1.8M or about a 1,700% gain, as opposed to the 460% gain for an investment in a college education over the same 43 year period.

So the stock investor beats the college student, who both start out life at 18 with $102k, by about $1.2M with his investment when he reaches 65.

Plus, with stocks you don’t even have to show up to work 40+ hours a week for 43 years in order to realize your gains.

And these numbers about the higher earnings of college graduates is always a little shaky. Of course someone with the aptitude, talent and drive to finish a four year degree is going to do ok, but what if that same person had skipped the degree and gone into business? You’re lumping the highly capable people into a group that includes all the people who couldn’t go to college even if they wanted to. – People with below average intelligence and drive. Of course that’s going to bring the average earnings of non-college graduates way down. Let’s see a comparison of earnings with people of the same IQ range who went to college against those in their same intelligence class who didn’t. Then we’ll have some numbers that may actually be useful.

Anyway, there goes another desperate attempt to justify the wasteful educational behemoth we’re seemingly stuck with, apparently made simply to scare off any 18 year old who dare question the norm.


Let There Be Light

By mikeBOS | Published: September 17, 2012

My basement was really dark when I bought the house. I’ve been fumbling around down there with a headlamp and flashlights to supplement the one light bulb that the previous owner had down there. So yesterday I decided it was time to do something about it.

I’ve never installed a complete electrical circuit before but I pretty much knew how to do it so I figured I’d give it a shot. After some reading on the internet to make sure I knew what I was doing, and a quick trip to the hardware store, I got to work. About two and a half hours later I had a slew of lights burning brightly in the basement, plus a new available outlet down there too, all on a brand new circuit.

 

Here’s what is was like before:




Getting to work



And here it is afterwards




What a mess, maybe I should have just kept it in the dark!

And there’s another notch in my belt for a new construction skill. Anybody can do this stuff. It seems like the hardest part for most people is just getting to the point where you believe that you can do it. If someone else can do it there’s no reason you can’t. Watch a couple of how-to videos, read a few articles, pickup a few books on the topic, then grab your screwdriver. There are some hurdles and dangers along the way. But your fear should make you safe and cautious, not paralyzed.

 

Here’s a little inspiration:


House #3

By mikeBOS | Published: September 26, 2012

About two weeks ago I walked out of my latest job and about five hours later walked into a real estate office to sign some papers and pickup the deed for my third house. It’s another bank-owned foreclosure in need of lots of rehab. It’s a 3 bedroom, 1 bath single family home built in the 1880′s in a fairly urban area but with a large (for a city-house) fenced in yard and a paved driveway. The neighborhood is so-so, with a mix of other single family homes and a few multi-unit dwellings. There’s city water, sewer and gas service in place.

I’ve ordered replacement windows for the entire house (~$2,500). It’s going to need new flooring throughout, paint, and the bathroom looks like it was designed in WWII. So I’ll be redoing the shower and installing a currently-missing bathroom sink. The good thing is that the roof and siding look to be in fairly good shape. Though there is a front porch that has me a bit worried and I still haven’t decided if I’m going to replace it or try to repair it.

This one should take me 3-4 months to fix up at a leisurely pace. Maybe less if I’m more diligent about it.

I ought to be able to rent it for $900-$1,050/month or so. I tend to keep the rents a bit on the low end so that I can have my pick of tenants and they’re less likely to move out because they found a better deal.

The negotiation for the house was a bit prolonged. When I first checked it out over six weeks ago the asking price was set at over $40k and I had better prospects I wanted to make offers on first. But those didn’t pan out, and about 4 weeks ago the asking price dropped to just over $30k. So I decided to make an offer of $17k.

My real estate agent does all the negotiating for me, which I’m grateful for, because I hate negotiating. I told her my ceiling was $19k. The negotiation went back and forth for four days. My agent would go up a hundred bucks, they would come down two thousand, over and over again until finally they agreed to $18k. I just went about my business not thinking about it until my agent called me 4 days after I made the offer to tell me she had made a deal. She doesn’t update me with every little thing along the way, which I’m grateful for because I really don’t care how she gets there, just tell me the final number.

I’m quite happy with the deal. To get something for less than $20k around here that isn’t a complete tear-down is a real coup. I can definitely keep the repairs under $10k and I’m hoping to keep them somewhere around $7k, counting my own labor as free.

Once this one’s rented out I’ll be bringing in about $1,700/month in gross rents, still with no mortgages to pay on.

Hopefully I can grab up a few more in the coming year while the market’s still low. But we’ll see. I have plenty on my plate for now.


Busyness

By mikeBOS | Published: October 20, 2012

Now that I’ve quit my job, have no classes to attend, and no tests to study for, you might think I’d be grasping for things to fill my days with. In fact, between rehabbing my new investment property and finishing up some other projects around my own house, I have a full plate. What’s interesting is that I’m realizing that when my schedule was so full and varied this past spring I was sort of forced to break down my projects into small chunks. I would have 5 hours to work on rehabbing a place before having to head to class, or to work, or to bed. And I’d have these sort of forced-rests during my commute to class on the train when I would do some light studying or just surf the internet on my laptop, or when there were chunks of time here and there that were too small to do anything with other than relax and watch a movie.

But now, with a completely open schedule, there’s no natural break to catch my breath so instead I just take a break whenever I feel like it. Which is turning out to be about two days per week, usually when friends and family tempt me with their company. Otherwise I’ve been waking up naturally around 8 or 9 am, spending a leisurely 45 minutes or so with breakfast, showering and preparing for the day, then heading to work on my latest investment property.

When actually at the house I work dilligently, but I’m careful not to break a sweat if I can help it, and I’m pretty much ready to quit for the day around 4 or 5 when I go home and have dinner and settle in for the night. I expect to keep this up for about the next four or five weeks or so when most of the house ought to be finished.

I do find I can’t really allow myself to spend a day hiking, or taking a long bike ride, or going to a festival or whatever. I just figure why not save that stuff for when I don’t have a house to work on? The nice thing is this schedule of regularly working on the house will be short lived. It only takes so long before the thing is ready to be rented out. So given that it’s so temporary, I have no problem putting off those other activities that, though fun and worthwhile, tend to eat up a whole day.

I’m interested to see what I’ll find myself doing once this house is done and I have no big project in front of me. It will probably be a mix of several smaller projects with a lot more days “wasted” hiking, biking, hanging out with friends and whatever else it is that we all do with ourselves.

Right now I’m hoping to have the place finished and available for rent by December 1st, but we’ll see, if I have to push it off a little longer, no big deal.


Self-Watering Container Garden

By mikeBOS | Published: October 24, 2012

I’ve wanted a self-watering container garden for establishing hedge and flower bushes for my house which, right now, is just one giant unfettered lawn with some natural forest on a couple of borders. I don’t particularly care for large lawns because when I look at them all I see is a bunch of work. I mean, I suppose I can see the appeal of a big, flat expanse of lawn, so long as I’m not the one charged with its care. I don’t mind a little yard work to make a place look nice. And, indeed, a little yard work can be enjoyable. Especially tending a productive garden. But when you’re faced with hours and hours of monotonous work every single week it can just become something you dread rather than look forward to.

So the goal with my piece of land is to make it attractive and productive, but low maintenance. I’ve always had an interest in permaculture and this winter I’ll finally have some time to really dive into some reading on it.

Anyway, my lot is mostly private except for one border with a neighbor to the side. So I’d like to establish an informal hedge along that border. The plan is to start some tiny (i.e. inexpensive/free) cuttings in the container garden where they can be nursed with good soil, light and watering conditions without being in danger of being mutilated by an errant lawn mower. Then they can be transplanted in the fall when, hopefully they’ll be at least 2 or 3 ft high. And for the next few years I can continue to do this with the container garden and expand the hedge, establish some flowering bushes and trees, and get some fruit trees and berry bushes off to a good start. And in a few years when we finally have all the bushes and trees we want I’ll just use it as a vegetable or flower garden to make the deck a little nicer.

As you can see these 5 gallon pails are all interconnected with piping. If you don’t know how a self-watering bucket works, check this out. Basically each container is two buckets, one nested in the other, and there’s holes drilled so that the soil is always wicking up water to the plant from the lower reservoir  I’ve set mine up so I can attach a garden hose to it and there’s a float valve that will always make sure there’s just enough water for the plants. So after planting them in the spring, they should be essentially maintenance free all summer.

I found the food-grade buckets in bulk on craigslist for 50 cents a piece, the piping was mostly leftovers from plumbing my house, though I did have to spend a little money on a bunch of t-connectors, and I found the float valve on amazon. The rubber valves were from uniseals and they’re pricey, but pretty amazing. I only had two very slow leaks that I fixed by just adjusting the position on the pipe a little bit. You just push the pipe through the tight rubber and it forms a leak-proof seal.

I also designed it so it can be drained fairly easily and all the materials ought to be able to withstand the winter so I’m not going to bother dismantling it each year, I’ll just let the snow cover it.


Vermicomposting

By mikeBOS | Published: October 29, 2012

I put together a little worm composter. I want to build up my garden in the next few years which means I’ve got to build up my soil.

The setup is beyond simple, it’s just some plastic tubs with a few holes drilled for drainage. Supposedly the compost tea that comes seeping out the bottom is a fantastic fertilizer, and the worm castings are great soil additives. Basically I just threw some shredded news paper and damp card board in there with some table scraps. I plan on putting it in the basement in the next few weeks once it gets a little colder. Apparently the worms can survive the winter, but they go dormant and don’t produce anything, so if I put them in the basement perhaps they’ll be a bit more active for me.

I purchased the starter worms online for $12 I think it was. I looked around a little for someone local to get them from but couldn’t find anyone. Apparently I can expect to wait a few months before the worms have multiplied and hopefully, before I know it, I’ll have more than I know what to do with. Which means I can basically just toss them into the garden.

I have an old canoe in the woods behind my parents house that I built in high school. It’s a wood and fiberglass thing I put together my senior year for fun. It’s still functional but it’s seen better days. I’m thinking I may take that, put it behind my garage, drill a drainage hole in the bottom, and use it as a much larger worm composter in the spring.

The soil on my lot could use all the help it can get.

Here’s a video of a guy with a big composter in his back yard. It looks like he used some kind of tub or trough for his bin.


Heat

By mikeBOS | Published: November 5, 2012

New England can be a cold place. My house came with a forced hot air oil furnace. I don’t know if you’ve heard but oil is kind of expensive and pretty nasty stuff.

Fortunately, the house also came with a beautiful brick and slate hearth. I kept going back and forth on whether I wanted a wood stove, or a wood pellet stove.

A wood stove just taking hunks of cord wood, being filled probably twice a day, requiring a wood shed, but allowing me to harvest all my heating fuel essentially for free. I have one friend who heats his house and apartments entirely with wood that he scavenges all year from people giving it away on craigslist, or from people in need of having a fallen tree removed from their yard. But he works pretty hard at collecting it, plus he spends a good deal of time tending the stoves in the winter time and can never stray too far from home when it’s below freezing.

You could also just pay to have cut and split wood delivered. Around here, if I bought green wood and seasoned it myself (by letting it sit in a wood shed with good ventilation, exposure to the sun and out of the rain for about a year or two) I could get it for apparently under $200 cord, and I’d probably only need just over two cords per year for my small house. Though there’s still the work of stacking the wood into the shed, and then hauling it to the house throughout the winter and tending the stove.

A pellet stove, on the other hand, takes small pellet sized pieces of wood that look a lot like rabbit food. They’re made from waste wood, saw dust, and timber specifically harvested for pellet production. They’re basically run through a machine that just pulverizes the wood and then compresses it into these small, manageable pellets. There’s still some work and stove-tending involved since a pellet stove needs to be loaded with pellets and cleaned of its ash regularly.

Neither is as easy as gas or oil, obviously. But using sustainably harvested local wood is pretty much carbon neutral, and pretty cheap. And it’s not subject to the rapid price changes that fossil fuels are.

I decided to go with a large pellet stove I found that can hold 120 lbs of pellets. Most stoves only hold about 40 lbs requiring you to refill it daily, if not more often. Whereas my stove can go for about 3 days of continuous burning on its lowest setting without any attention. I got it at a local shop and trailered it home. With the pipes and stove the total cost came to about $1,700. I ordered 3 tons of pellets for just under $800 delivered on a pallet set right outside the door next to the stove so they only need to be carried about 10 ft. I’m told I’ll probably only need about 2 tons, but I would rather have extra to save for next winter than run out and be scrambling in February for a last minute delivery.

I put the stove and piping in in only a couple of hours. And we have already had some cold days to test it out and it’s working great. There’s a glass door with a flickering flame that lights up the kitchen with a warm light, and it’s capable of pushing out an impressive amount of heat.

So right now I don’t have any plans to use any oil this winter.

Once downside of the pellet stove is that it requires electricity to run. Not a significant amount, it just uses electricity to self-light itself, and then to run a couple of fans and an auger that turns at set increments to distribute more pellets into the burn chamber to keep the fire going. However, in the event of a power outage, which, in a New England winter, is pretty much to be expected, it won’t be able to run without a generator. Which is now on my shopping list. In fact, I think I might buy 2. One for me, and one to sell at a scandalous markup during the next extended power outage when all the hardware stores have run out of generators and they sell on craigslist for 3 times their typical list price.

A wood stove might be nicer in some fantasy, extended disaster scenario when it might be hard to get pellets delivered. But I could stock up on pellets. Or, worst case, I could pull out the pellet stove and put a wood stove in its place with just a few hours work. I plan on putting a wood stove in the garage at some point so I’ll already have one on hand anyway. And nothing bad is going to happen anyway, so I don’t think about those scenarios too much ;-)


Just About There

By mikeBOS | Published: December 12, 2012

Rehabbing a house is a marathon. I wake up thinking about what I can get done today and the best way to do it. I spend all day going from task to task, adjusting the to-do list as I go if I find a project requires a special tool I don’t have on hand or some material I forgot to pick up. Then I finish the day writing down what I plan to do tomorrow and hitting the hardware stores on the way home while I look forward to collapsing on the couch after dinner. Sometimes I have the satisfaction of looking at a to-do list with everything checked off. Sometimes I get the exasperation of looking at a to-do list with only a quarter of the items crossed off because I ran into so many road blocks during the day.

Some days are just so physical that I wake up the next morning, after a good 9-10 hours of sleep, with all my muscles still tired from the day before.

The good thing is I think I naturally strike a nice balance between pushing myself to get the project done, and allowing myself a few days off here and there to recuperate and spend some time with my neglected friends. Too much time off and nothing seems to ever get done. Too much time working and I make myself sick (literally), drive away my friends, and make myself miserable.

I purchased my latest house a few months ago and have been working at it entirely by myself for about ten weeks. As of today I’m just awaiting an appointment next week with a plumber and town inspector to get the gas turned on. Then, after checking that all the plumbing and appliances work correctly I will be ready to rent it out.

I purchased the house for just under $20k and the material costs of the renovations have run me just under $4,500. I replaced all the windows, rebuilt half of a farmer’s porch (in one day ;-) ), patched the walls throughout, shaved all the doors so they open and close properly, installed flooring and trim throughout most of the house, sealed up the basement in multiple spots to prevent cold air from coming in, custom built some shelving in a couple of closets, installed a bathroom sink and vanity, installed several new light fixtures, refinished a wood floor and cleaned up the yard. The house is about 17 miles from where I live so I also spent a few hundred dollars in gas.

During the renovation the house next door was sold to another rehabber. The buyer, John came over to introduce himself and talk shop when he saw me working on the place. He doesn’t rent anything out, he buys cheap places, pays other people to fix them up, and then tries to sell them at a profit. He was an encouraging and positive personality. He’s been doing it for a couple of decades and looks to be in his 40′s. We swapped information and a few anecdotes and he told me to call him anytime if I ever wanted to talk about a project or need a lead on some cheap materials or labor. He bought the place next door for $40k and is hoping to sell it for $120k or so when it’s all done. It’s always nice to bump into a kindred spirit.

I’m going to try to rent mine out for about $900/month. Today was the first day in a couple of months where I didn’t wake up with a massive to-do list to work on. After breakfast, when I was trying to figure out what to do with myself, I had to triple-check in my head that, indeed, there is nothing left to do. So now I’m just going to wait for the plumber, think about getting a rental ad up so I can start looking for a tenant, and enjoy the holidays while I figure out what my next project is going to be.

Here are some before and afters:

 


Worry-Free Landlording

By mikeBOS | Published: January 5, 2013

There are aspects about land lording that a lot of people just aren’t cut out for. There’s the real estate knowledge you need, the home rehab/repair skills (or at least the knowledge to know when a tradesman is doing good work or just ripping you off), and then the management aspect of working with tenants. As far as the landlord/tenant relationship, there are a few things I do to try to make everything easy.

Firstly, I charge a rent that’s somewhere around 10% below market rates. This does a number of things for me. It gives me my pick of tenants when I have a vacancy. So far, whenever I put up a craigslist ad advertising my rentals, within 24 hours I have about a dozen appointments setup to show the places to prospective tenants. Of those people I arrange to meet, about 1/3 just plain don’t show up, another 1/3 have hard luck stories or unreliable income or decide the place isn’t for them, and then there’s another 1/3 of highly-qualified, eager tenants hoping I’ll decide to rent the place to them. Compare that to those “for rent” signs you see that have been up so long they’re becoming sun-faded.

The lower rate also keeps tenants in place longer. When people feel they are getting a good deal they are less likely to shop around for another place, even if there are little things about my property that aren’t absolutely ideal for them, they’ll stay because of the cost savings. And transitioning between tenants is always an opportunity to lose money. – Whether it’s some cleaning/repair fees/time to get the place back into showroom condition, or some lost rent from people moving in and out in a less than perfectly synchronized fashion.

I’ve seen advice along the lines of “if you never have vacancies then you aren’t charging enough.” I could raise my rents by 10% and still have tenants, but if that causes me to wind up having a vacancy for even one month per year, all that extra profit is a wash-out anyway.

Anyone who is prone to worry should not consider being a landlord. If you find yourself checking your stock prices three times a day, or always glancing up to see what the DOW is doing when they tease you with it on the news, then you’ll probably find the idea of handing the keys to an asset that constitutes a sizable chunk of your portfolio over to someone you’ve talked to for maybe 90 minutes less than comforting.

I don’t find it too difficult though. Worst case, the property is insured in case of an absolute catastrophe. And considering the condition these properties were in when I bought them, a tenant would be hard-pressed to do any damage that would intimidate me and my repair skills. And I just assume, from the get go, that in between tenants I am going to have to spend up to a month’s rent in repairs when they move out, because that’s just the nature of owning property. And if it’s actually left in rentable condition then I’m just ahead of the game. Nothing irks me more than when an unscrupulous, penny-pinching landlord tries to pass off normal wear and tear as damage attributable to the tenant and uses it as an excuse to hold onto a security deposit.

When I hand over the keys to a tenant, that’s it, the property is their’s, and it’s out of my mind. I might drive by every few months to take a cursory look from behind my windshield. But I mostly try to leave the tenant with their privacy.

I think a lot of landlords want to have things both ways. They want rental income from their property, but they also want to retain control over it in the most nitpicky of ways, not allowing anyone to change a paint color or trying to keep a security deposit because a tenant hung some photos on the walls and left a nail hole. – Or demanding regular “inspections” to snoop around the house. I think when you hand over keys in exchange for rent you have to just accept that some things are going to happen in the house that you don’t like, that’s why you’re getting paid.

I also write my leases in a way that incorporates state-mandated tenants rights right into the terms of our agreement. If a judge ever gets to see one of my leases he’s going to think I’m a saint. A lot of landlords, knowingly or not, will have leases in violation of state law but most tenants never realize it because most leases don’t end up getting challenged in court. Massachusetts is a very tenant-friendly state, and I’m glad for it. I don’t want single mothers or disabled people being thrown out into the street in the middle of February anymore than anyone else. While I don’t think I have any obligation to provide charity to my tenants who can’t pay their rent. I do accept that the realities of making money off of providing people with housing means that I carry a risk of not being able to evict certain classes of people under certain conditions for limited periods of time. That’s just part of the cost of doing business. It’s a societal problem that government has decided is best dealt with by passing the risk to landlords and I knew that full well when I got into land lording so I budget for it and won’t complain (too loudly) if/when my turn to bear the burden ever comes.

Most of my life has been worry-free. I think the key is imagining the worst possible scenario, planning for it, and accepting it as a possibility knowing that I’ll be able to deal with it. When it comes to other people I plan for the worst and hope for the best. This way, whenever things go well I see a budget surplus rather than having a budget shortfall when things go wrong.

Maybe my laid-back attitude is a result of the high profit margins I’m running. If you’re a landlord leveraged to the hilt and less than a year of rent payments short of defaulting on your loans I could see it being much harder to sleep at night. But that’s the price for entering a capital-intensive business when you have to borrow nearly all of the capital. But that’s not a problem unique to land lording, any business conducted that way would be stressful.

 

 


Relaxing

By mikeBOS | Published: January 10, 2013

When I was on my cross-country train ride last August I met a couple in their early 60′s from Australia who had been retired since their late 30′s. They joined us for some wine in our sleeper car for a few hours after dinner one night. Their retirement was a result of growing a business for about ten years that ended up being immensely profitable. Which I think is different in key ways to what I’m doing. My goal since my early 20′s has been to retire early and any money-making venture since then has been decided upon based on how it will further that goal. Whereas their goal was to start a successful business and when the opportunity to retire early happened to present itself they took it. We definitely have a lot in common and have compatible personalities. But I do think their are key differences between someone who has a long-term goal of early retirement and someone who sort of stumbles into early retirement after some great business success.

When I offered them some wine around 2 in the afternoon the next day they declined and told me they don’t drink before 5. Because about a year after they sold their business and decided they were “retired” they found themselves one day around eleven in the morning, in their pajamas, opening a bottle of wine while watching a children’s cartoon and realized they needed to make a change. One of which was a rule, no drinking before 5 pm, to keep them from laying around all day. It’s interesting that it took them a whole year to get to that point.

It’s been about 3 weeks since I finished work on my last rental house. And now here I am with no work or projects in front of me. The days have been flying by, visiting with friends and family mostly, over the holidays since people have been taking lots of time off work. My friends schedules all compliment each other too so I tend to do a lot of socializing. I have the friends who work M-F who like to hang out on holidays and weekends. Then there’s the couple who have Thursdays and Fridays off who often want to come over for a game night. Tuesdays and Wednesdays seem to be the only days of the week when I know I’ll be alone.

This period reminds me of the beginning of summer when I would come home from college. I would be so exhausted from finals and paper-writing and translating Greek that I would be perfectly happy sitting around the house for almost two weeks, sleeping 12 hours a night and hardly doing anything during the day. It was a recovery period.

Now here I am, I’ve spent the past 5 years or so simultaneously working, earning degrees, and building a real estate investment business with hardly a break. So I have no problem allowing myself some laziness for at least the first few months of no longer working. While I haven’t been popping open wine bottles at 10 am, I have been getting plenty of sleep, cooking complicated dinners and breakfasts, and giving my neglected gaming PC some attention.

I’m looking forward to starting a large garden once the spring comes. And getting in lots of hiking and cycling in 2013. In the meantime the winter is reserved for gaming, movies, friends and delicious meals.


Back Where I Started

By mikeBOS | Published: January 17, 2013

I stumbled onto my old post about my time living in a tent in the desert and I started to think about how my life has changed since. Back then I didn’t have to work because it cost me so little to live. And now, recently, I have finally achieved that status again. My land lording income covers my living expenses, which remain small compared to my neighbors, but enormous compared to my past self. – That guy who called a tent in the desert his home, and a foraging rabbit his dinner.

I rode out of that desert for the final time on my motorcycle, determined to work, save, and invest enough so that I could spend the rest of my life as peacefully as I spent that year in the desert. – Without deadlines, commitments, mandatory projects or assignments. And with time for reflection, friends, rest and solitude.

Here I am, it’s been eight years since I lived in a tent without needing a job. And now, after years of effort, I live in a house without needing a job.

All that work to get right back where I started! Except now I have a refrigerator, a car, computers, a tv, a varied and downright indulgent diet; I don’t have to light a cow patty ablaze to cook my supper. I have air conditioning, a washing machine and dishwasher. – As much running hot water as I could ever want. – A flushing toilet, virtually unlimited electricity, a warm hearth and even a paved driveway. If I could stand next to my old self it would be like seeing a king with a pauper.

Back then I was worth maybe a couple of thousand bucks. Now I’m up over a quarter-million and climbing.

It was a lot easier to be free then because my costs were so few. I had almost nothing but was able to go for over a year without a job. All I needed was a steady hand to catch my dinner. My more typical lifestyle I live now requires, as a minimum, my quarter-million bucks to maintain without income from a job. – Quite a difference in start up costs between the two ways of living.

For me, it was worth the effort, because it really didn’t take all that much. I was lucky enough to land a high-paying union job, diligent enough to save the vast majority of my earnings, and smart enough to make some clever investments along the way. But if those opportunities weren’t there I probably would have been better off just building a small adobe cabin where I was, rather than trying to toil away at some job for the rest of my life just so that I could have silly things like a refrigerator.

My modern house is comfortable, and I’m grateful for it. But it isn’t necessary for a happy life. I’m sure of that. And it definitely takes a lot of effort to accumulate enough assets to keep such a home without an earned income. Especially when you can go live in a tent for close to nothing.

Having that knowledge, and the ability to be comfortable living in a tent again if I had to, is empowering. It makes me fearless.


The Surplus

By mikeBOS | Published: February 25, 2013

As I’ve been settling into my new land lording lifestyle I’ve started taking a look at the new balance sheet. I’m currently taking in $900/month from house 1, and $1,000/month from house 2. After taxes, water bills, trash bills and insurance I’m netting about $1,400/month from the two houses. I also like to set aside an additional $300/month for future maintenance and vacancies, which leaves me with about $1,100/month left over.

My personal monthly budget includes; taxes on the house I live in, utilities, insurance, gas and groceries. After all those “bare necessities” are paid for I’m left with a monthly surplus of about $530/month.

Out of that has to come the discretionary and occasional expenses like vehicle replacement/maintenance, clothing, gifts, entertainment, hobbies, etc..

I definitely think it’s a sustainable budget as long as I remain diligent about keeping expenses in check.

But it leaves little room for some things I’d like to do in the future like putting up a PV array, building a solar thermal heating system, playing around with other alternative energy systems, flight lessons, buying a second-hand sailboat or RV, maybe building a green house on to the side of my home. After those projects are done with I’d also like to build up a securities portfolio so that my financial safety margin just gets bigger and bigger as I age.

I think what I’d really like, in order to make those types of projects feasible  is to be running a surplus closer to the $1,500/month range.

Which means, basically, I want one more rental property. But I’ve invested almost all of my savings into the 3 houses I own now, so I need to come up with about $20k-$30k in order to do it.

I see a few avenues for making this happen:

1. Borrow. I have no debt right now and about $250k of equity in my 3 homes, and a good track record with real estate so far. But I don’t have a job. When I had my part-time job last year I approached several banks to see if I could secure a home equity loan on one of my properties, but since my rental income was newly established, and my part-time job income wasn’t very much, no bank or credit union would loan me money.

I do have several friends who I could approach about some kind of secured loan/investment/partnership deal. I could take someone’s money, get a property purchased, rehabbed, and rented, and then just throw virtually all the rental income from that property back to the investor until the loan is paid off with an appropriate amount of interest added on to compensate them for their risk. The whole thing could probably be paid back in less than 5 years. I could also break it down so it’s not so daunting an amount by asking for, say $10k from a few friends rather than $30k from one.

I could also look into alternative financing like peer to peer lending.

2. Sell. I could sell one of my houses at its new, higher value because of the rehab work I’ve done. I could get $80k-$90k from one sale and use that money to buy two or maybe even three distressed properties to replace it. I’m a little averse to this plan because I purchased and fixed up the properties I did with an eye towards them being easy to rent out, not easy to resell. To get the maximum return on resale I would really have to put in a little more work on the places like re-siding and getting prettier appliances. And they’re small places, good for rentals, but not likely to be anybody’s “dream home” so I’m not sure how long it would take to sell. Plus, they’re good rentals providing a good income stream and I’d hate to sell at what, in my area, is pretty much the bottom of the market.

3. Work. I think with a small amount of effort and patience I could get a temp job in the $30/hr, 40 hr/week range. Large law firms, when they’re commencing a big law suit with hundreds of thousands or even millions of documents to sift through, will farm out work to lawyers to help sort through it all on a temporary basis, often on a 3 to 6 month contract basis. It’s a soulless, uninteresting, repetitive grind that most lawyers see as the mark of a failed, dead-end career. And indeed, if you had to do that for years when your life goal was be a crusader of justice or to make partner and eat fancy lunches, I could see why.

But for me, looking to scrounge together ~$25k, putting my nose to the grindstone for 6 months in a $30/hr temp job might be a pretty good arrangement.

4. Be Entrepreneurial. I think of this as a scatter shot approach to develop multiple avenues of income. Kind of like working a job, just without the mandatory regular schedule. I could do some legal work here and there. Handyman work here and there. I could buy, fix up, and sell things at a profit like furniture or vehicles. I could make a plan to try to make some money off of my garden or worm-farming. Play the credit card game of collecting $500 sign up bonuses. Brush up on my PHP and build some websites. Look for some avenues to get paid for my writing.

 

Right now I’m leaning towards option 3, mostly because it’s the simplest and likely fastest way of getting to my goal of having an extra rental payment coming in each month. But I’m not ready to commit to anything just yet. I jumped on an opportunity to do some travelling next month for only the cost of my plane ticket. There’s no hurry to take any action right now since I think real estate deals in my area are still going to be around for at least another year or two. So for right now I’m going to just enjoy myself, mull things over, and decide on my future financial course of action sometime this summer.

 


A Brief Sabbatical

By mikeBOS | Published: April 23, 2013

This past week I started floating my resume out, goose-stepping my way into some possible temp work. The past few months have been nice. Since I finished rehabbing my last rental property in January and got a new tenant in place I haven’t had much of a to-do list. I spent three weeks in West Africa in March upon an invitation from a friend of mine who’s originally from Ghana and was going home to visit family. I was treated like a part of his family, put up in nice homes and fed a lot of home-cooked meals. I came home with a deeper appreciation for those of you who plan to retire abroad, or have already done so. I see the attractiveness of it, I do. It’s adventurous, exciting, and a chance to make everything new, including yourself. But for now and in the foreseeable future, I’m happy with my home where it is.

I was also able to tag along on a road trip with a group of friends to Miami, Myrtle Beach and as well as a couple of nights in D.C.. We split all the costs four ways, took turns barbecuing the majority of our  meals on the beach, and shared hotel rooms, so the expense was minimal.

Since the weather’s improved over the past couple of weeks I’ve been able to take my bicycle out on some twenty to thirty mile rides. It turns out that over the last few years while I was adding digits to my bank account, and letters to the end of my name, I was also adding some inches to my waist. So it’s been nice to be able to reignite my more active hobbies. I’ll be outside in the next couple of weeks tearing up some grass to make room for a summer garden. My father offered to loan me his roto-tiller but I told him I’d rather take a stab at doing it by hand.

Financially everything is going fine. But I do want to increase my passive income some more. I’m comfortable where I am and it’s not a bad life at all. But I do feel a bit exposed just getting by. If I ever had a problem tenant things would be tight. And there are some projects I’d like to do that I couldn’t afford right now. Like building an alternative energy vehicle in my garage, getting solar panels, maybe heating my house with thermal solar vacuum tubes coupled with a massive underground heat storage system. – You know, fun stuff.

So right now I’m financially independent. But I’m not ready to call myself retired. This is more like a brief sabbatical. I do expect sometime in the next few years to be in a place where I’m 90% sure I’ll never take on a “regular job” again. Even then there will be a good chance I’ll do things like handle a few legal cases, rehab another property if I find a good deal, build stuff and wind up selling it at a profit, maybe start a part-time business or help a friend with a business of theirs.

The nice thing now is, when I do get some work, 100% of my earnings can go towards investments, since I can afford to live off of my rental income. I’m hoping to land a 6-12 month gig, or maybe a couple of 3-6 month assignments with a break in between. I’m definitely not done with real estate, since there are still good deals around and I think they will continue to be around for at least another year. I’m not sure if my next purchase will be another long-term rental, or something I try to rehab and put back on the market for resale. It’s going to depend on the work I find and what kind of real estate deal I fall into. I like to remain flexible so I can just take the best deal available rather than shoehorning my way through the steps of a meticulously laid out master plan. If I find a good deal on a property that would make a good rental, I’ll go for it. Or if I find a good deal on a property that would work better being rehabbed for resale, I’ll do that.

In the meantime I’m just going to keep my hook in the water. And while I’m waiting for a bite I’ll be taking the bike out, getting the garden ready, and building the calluses on my finger tips with my guitar fret.


The Spartan Student

By mikeBOS | Published: May 26, 2013

I’ve been following Ken Ilgunas for a while now ever since he started blogging about his life living in a van on the Duke campus in an effort to keep his costs down and afford school without taking on debt. I just finished reading Ken’s recently released book, “Walden on Wheels: On The Open Road From Debt to Freedom” in which he details the first few years of his adult life trying to find some adventure, purpose, education and freedom.

Ken reaches back and writes well on that feeling, post high school, I remember when I was offered up a path to an easy middle-class life; college, careerism, managing credit wisely, providing me with the comforts of a reliable car and a cable subscription while I vest into a pension or build up a 401k over the course of a 40 year career. Some people navigate that path well, and with enthusiasm. But for others it evoked a sense of dread and depression. Could that be all there is? Am I forever limited to exploring the world in 2 week chunks of guided tours, ever in a hurry to get back to my job? Will my greatest “adventures” be limited to preplanned rafting trips that have glossy brochures promising to satiate my need for an adrenaline rush, but only with noon-time breaks for catered lunches? Will mortgages and debts mean I have to forever sell the better part of my day in exchange for a paycheck?

The safety and comforts of modern life are nice, but at what cost do they come?

Ken manages to find some danger, discomfort, adventure and untouched natural beauty in the Alaskan wilderness. His accounts of being nearly lost on a mountain by himself while battling exhaustion and hordes of mosquitoes, of encountering a grizzly and realizing he’d left his shotgun behind, and of befriending some locals who live near subsistence lifestyles, goes to show that there is still adventure to be found in the modern world, even for a middle-class suburban kid, so long as he has the courage to go out and find it.

A large aspect of Ken’s story is his financial journey. He started out with massive loans from his undergrad degree and chose to take them on with extreme frugality and persistent hard work. And then he found a way to finance a graduate education without having to worry about any more loans.

Ken’s writing taps into a youthful, urgent sense for life and an intense appreciation of the natural world, but without ever becoming merely sentimental, not an easy feat. And something that can only be done when it comes from a sincere and passionate place. You can follow him as he grows through his journey, vacillating between rejecting the safe, tepid middle-class trajectory society offers him in favor of the rugged wilderness, but then later embracing the liberal arts and higher learning that only civilization can offer. I don’t think Ken sees the world as a dichotomy of either rejecting the modern world on the one hand, or embracing all out consumerism and careerism on the other. It’s more that his sense of balance between safety and comfort, and between natural and manmade beauty, and between freedom and responsibility, is maybe a little more examined and a little more extreme than it is for most of us.

Ken’s book was a bit of a realization for myself about how far I am from that guy I was when I lived in tents, carried all my possessions in saddle-bags, and would call two or three different places “home” within the course of a year. Now I’m settled into a 3 bedroom bungalow, have my investments to care for, and a beloved partner to keep me company. I don’t long for those previous days, I like where I am, building my garden, regularly visiting with friends and family I love, and having a comfortable space to call home. But it was nice to revisit that mindset for just the short while I spent reading Ken’s account of his own journey.

Ken’s book is worth a read if you want to rekindle, or just remember, that youthful spirit that often gets slowly snuffed out by complacency and mounting obligations, or just gets set aside completely at too young an age by so many others simply out of a fear of having to navigate the task of blazing a new trail. – A fear that Ken conquers with a refreshing, and all too rare, admirable bravery.

 

Check out Ken’s Blog here, and the book here.

Walden on Wheels


Mad Fientist Interview

By mikeBOS | Published: June 3, 2013

I was recently interviewed for the Mad Fientist podcast.

Go take a listen to it here.

We talked about how I got to where I am, my motivations, my writing, my education, and how I go about with my real estate investing.

In other news, I feel a bit like I’ve been neglecting my readers here. I’ve been too busy having fun going for bike rides, starting a big vegetable garden, and hanging out with my friends. I used to do a lot of my writing during downtime at work or while on the commuter train. Now that I no longer have that kind of downtime built into my schedule writing is always competing with a lot of tempting activities.

I have had some successful job interviews at various places in the past few weeks and am expecting to be working again within the next couple of months. I’m sure being back to work after almost a year of not working will give me plenty to write about and more downtime to write it in. I haven’t worked since I quit my part-time job last September. It’s easy for the non-working life to feel ‘normal’ and there’s nothing like a 9-5er to remind me how good I’ve got it. The good news is that with any of these jobs, plus my rental income, I ought to be able to save enough to pay cash for another couple of houses within the next 6-12 months. At which point I’ll be thinking about transitioning from calling myself FI to declaring myself “retired”.

And if I end up taking a “permanent” job instead of a contract job, or have a contract job that turns into a permanent job, then I’ll have to deal with when exactly to pull the plug since I’ll have to balance my desire to pad my savings ever higher against my desire to be free from a job, the so-called ‘golden handcuffs’ problem. But that’s going to depend on a lot of things that are unknown right now, like how much I enjoy the work and how well my rental investments are doing. I could see myself hanging on for an extra year or two beyond what it takes for me to get my additional rental properties, just to pad the coffers and be extra safe. Though I could also see myself quitting work just a couple of months after I’ve got my 4th rental setup. We’ll see.


The New Surplus

By mikeBOS | Published: July 2, 2013

Well my garden is in full swing. My composting worm population has tripled. I’ve explored a lot of my new hometown on my bicycle. I’ve been playing quite a bit on the guitar lately. And I’ve been seeing a lot of my friends and family. Plus my tenants are all doing well with no complaints to hear of.

The quiet life suits me. Though it is a bit dull and uninspiring when it comes to blogging material.

The good news for my readers though is that I’ve accepted a job offer, set to commence in just a couple of weeks. So I should have plenty to complain about very shortly. My job search only lasted about six weeks. And it consisted of a few different tactics including talking with my old school buddies to see about opportunities at the places they’ve been working at for about a year now since graduation. Also in taking advantage of both my law school and undergrad alumni job boards. – Checking out the typical job search sites. And mentioning to all my friends and family members whenever I would visit them that I was back on the job market just in case they may have heard of anything suitable. I was fairly selective about it and after sending in maybe 15 resumés I wound up attending four job interviews and receiving two offers, though one interview went very well just a few weeks ago and I was told I should “definitely expect a call within a couple of weeks,” but that was three weeks ago now so whatever.

I wound up accepting an offer for, what I think will be, a fairly low stress position at a local satellite office of a Boston-based non-profit organization. I picked it mostly because it’s a short commute, has a kind of quirky/casual office environment that I think I won’t mind too much, and there’s no expectations to ever put in more than 40 hrs/week.

Interestingly enough, my nearly twelve month break from both school and work wasn’t even brought up in one interview, and for the others, when I explained I was a real estate investor and spent some time rehabbing a place, plus took a month-long trip to Africa, suddenly we were talking about the real estate market and Ghana instead my resumé gap.

I’ve decided I’m going to keep working until at least the following goals have been reached, in order of priority:

1. I buy two more rental properties with cash (bringing my total to 4).

2. My BF, and likely future spouse, has 4 properties of his own. It won’t be any fun for me to quit my job if my partner is still limited to 4 weeks of vacation a year. He’s on the road to buying his first place this winter with all cash. I told him I’d contribute 50% towards his 2nd property to speed things along. And he has great credit and a long work history so the plan after that is for him to take out a home equity loan on one of his first two properties in order to purchase two more. So we would each have four rentals bringing in money. Which, incidentally, means that the day we marry will likely also be the day we enter the millionaires’ club given our potential combined net worth.

3. I rehab a house and offer to sell it to some close friends of mine, a married couple, at a discount, something over my costs but below market rate. They’re great people that have grown up in some difficult circumstances and have had limited help from their families and I want to help give them a leg up. But if they refuse the offer or it doesn’t work out I would just sell the place at market price to whoever.

4. I buy/build a bunch of stuff (or at least have the money set aside for it). On the list right now: An alternative energy vehicle, rebuild the 2-car garage at our house that wasn’t really built right the first time, a grid-connected solar pv array, a small in-ground pool, and a nice second-hand RV.

 

I could quit after reaching goal #1 and then just use passive income to finance the other 3 goals. But that would stretch things out over the better part of a decade whereas, if I worked, it could all be done in less than two years. Which, so long as I don’t absolutely hate my job, I’d prefer to do.

So, for the last several months I’ve been living off of passive income from rentals. And my income has exceeded my expenses by about $500/month. Now, with this job starting up, my income will exceed my expenses by about $5,000/month. So I should be able to save up for a couple of more $25k houses fairly quickly. And when I start collecting rent on those I’ll be looking at closer to a $7,000/month surplus. Which makes the prospect of reaching goals 2,3 and 4 seem fairly trivial.

That’s part of the power of being FI. All my expenses are already covered by my rental income so I can save 100% of my earnings from my labor.

I know just from reading my own archives that my plans often adapt as circumstances change, so who knows how closely I’ll stick to this particular path. But working my way down it can only lead to good things, so I’m not going to worry about that.