Minimalism and FI, part one

There’s a popular saying in FIRE culture that says, “Retire to something, not from something”.

Fuuuuck that.

Honestly, I have no idea what I want to be doing in a year. Heck, I don’t even have plans for this week. I may go paragliding this afternoon, but it’s already 10:45 am and I’m only just about to make my second cup of coffee. In my underwear. I’m in no rush.

 

Minimalism and Financial Independence

 

An important aspect of my life is Minimalism. No, it’s not about having very few things, but about having things that truly add value to everyday life. The Minimalists write about this in a very inspiring way.

Oversimplified example: I just competed in my first paragliding competition, the Rat Race. They were selling merchandise and I eyed a spiffy hat with the Rat Race logo on it. I bought it for twelve bucks. About a day later, I realized that I don’t wear flat brim hats! Instead of keeping this memento on a shelf, I sold it on Facebook to a club member and even gave him the Rat Race glow in the dark frisbee that I managed to take home. It really didn’t serve a purpose if I wasn’t going to wear it (or throw the frisbee), and now I don’t have either cluttering up my space.

Aside from the material aspect, minimalism allows you to focus on what’s important as you discard the things in your life that aren’t. One of those things was my job. Being financially independent affords me the time to start focusing on those key aspects in life I want to improve.

I’ll dive into the first, and probably most important area, in part two.

And it’s over.

Today was my last day.

 

It’s been nine years, two months, and now I’m done.

 

What. A. Ride.

 

I just got home about an hour ago, and it’s beginning to sink in. That giddy, fidgety feeling full of smirk. Hang on just a second, let me delete that 4:50 am alarm clock from my phone.

 

Okay, I’m back.

 

I can hardly believe that I’ve managed to save this much cash, and the amount of stoke is off the charts.

 

I need to get off the computer. There’s plenty to be said, but I’ll get to that later.

 

Here’s to a new direction.

Understanding my pension

I was lucky enough to get hired with my company just a few months before they nixed the pension plan. Although it was frozen just a year or two later, I accumulated about $30k.

Considering I’m about to (possibly) quit my job, it’s important to fully understand what’s gonna happen with this mysterious bucket. Here’s what I learned.

If I leave this year and commence the benefit, I get a single life annuity of $96.77 per month. If I wait until age 65, I get $811.11 per month.

I could also take a lump sum balance now and get $31,041. Or wait and take a lump sum at age 65 and get $129,857.

Time to run some numbers.

Interestingly, if I take the $96.77 per month and invest it until I’m 65, it turns into about $128,241. Essentially it becomes the lump sum amount at age 65.

If I take the lump sum now and let it compound until age 65, it turns into $225,079.

The best option is to take the lump sum and roll it into my IRA to avoid immediate taxation. Then, it can be used in the ROTH conversion ladder for future spending.

 

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Enough’s enough.

I lasted almost a year. The stateside position, a.k.a the Dream Job, has literally put me to sleep. It’s so boring. Intellectually under-stimulating. Dangerous even.

What kills me is that it’s literally a waste of my time. I leave the house at 5:10am and don’t get to the job site until 7:15am, after eighty-five miles of highway and mountain pass driving. Granted we carpool fifty miles of the trip, but that hardly makes up for anything.

After about ten minutes of equipment set up and checks, I’m back inside making a delicious cup of coffee from my AeroPress. Hurry up and wait.

By 9am, most often later, we’re taxiing for takeoff. Maybe I’ll get an hour of flight time.

Or, maybe not.

By 3pm we’re debriefing a training mission I had very little to do with. But I accomplished a lot that day. One day I spent the whole day researching airport transfers from Geneva to Chamonix. All day. I wrote up a nice compare / contrast document to share with my travel buddies for our upcoming trip. Other days I simply read library books off and on as the noise level allows. My colleagues were busy finding the end of YouTube, headphones optional.

Time to drive 85 miles back home. Rinse and repeat.

Meanwhile, there is a strong Meetup.com presence here in Salt Lake City. One of the groups I like does weeknight hikes that start around 6pm and end well after 8pm. Considering that, legally, I need eight hours of uninterrupted rest in order to fly the next day, I would miss out on these great group hikes. Most of them, anyway. That’s just one example of something I’m trading for money.

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The trailhead is less than three miles from my apartment.

 

So is a few hours of flight time per week worth the trouble?

No, no it’s not. Enough’s enough. Time for a leave of absence.

“I’m not inclined to grant this request…If vacation time off is not enough of a break there are few options that are viable” my manager said in reply to my unofficial inquiry.

Hmm. Okay then. Things are getting a little more serious now. He’s on vacation himself, so we won’t get to chat until after mid May.

Cue the FU Money! Let’s plan ahead for my voluntary termination. Clearly it’s time to move on, but there are things to get in order first. 

Set aside cash for living expenses.

For the first time ever, I sold shares to fund approximately one year of living expenses. About $30k worth.

Enroll in marketplace healthcare

My work benefits stop on my termination date, so I’ll need to enroll in marketplace healthcare. A quick look at healthcare.gov shows I can get a bronze health plan for less than $250 a month, and dental around $20 per month. These costs are very similar to COBRA, although admittedly my employer sponsored healthcare is far superior. Nonetheless, I’ll enroll in new coverage after I get the official termination date.

Roll over 401k to Vanguard

This will be super easy. And as a bonus, lower overall investment costs! I can’t wait to do it.

Review and revise the Super Plan

I’ll review and update the numbers, plan, and makes some overall adjustments.

So is this me starting early retirement, or simply me needing a change? What’s the plan?

It doesn’t seem like a good time to test the sequence of returns risk, but I’m also not stuck on not ever working again. I just don’t want to work in the same soul-sucking capacity of this last year. I just started a 1 year lease on a sweet apartment, so I’m going to stick around town until it is up around April 2018. During that time I’m going to continue living like my initial 3 months off. Paragliding, trail/road running, meeting new people, and focusing on my health. It’s similar to Option #2, but without a leave of absence.

Options

Well, I’m back in the US. Eight years of doing this job has left me well off financially, but it’s taken it’s toll. I’m ready for a break!

I’m taking a ton of PTO – March through mid May – to unwind, visit family, and attend a wedding. After that it would be back to the same old grind, only this time with a crap-tastic commute. Or not.

It’s March of 2016 and I’m turning 30 years old in a very good position: I’ve got a million invested, I’m at an ideal weight and in relatively good physical fitness, and I have choices. I don’t really want to have that insane commute, so let’s explore some options.

 

Option #1 – Initiate the SuperPlan

Quit the job and consider myself FIRE’d. This option is the most ballsy, yet has a statistically high success rate. In accordance with the SuperPlan, I’d work through the fall and resign in December. This sounds good, but I’m having a hard time not investing the $50k cash buffer for years 1-5. That same $50k, if invested, could pay me $1k per year, every year in dividends alone if the yield remains around 2%. Plus growth.

I could do a lot with $1,000. Plane tickets to see family. A season pass to go snowboarding. All kinds of things.

Also, I’m a little uncertain about kicking off early retirement in Salt Lake City. I dunno. Something about being so close to Former Employer.

 

Option #2 – The Gap Year

I could take a leave of absence for up to a year and test out early retirement. Basically have $15k in cash set aside, and turn on the dividend faucet to pay for the rest. This would do a few things:

  1. Further test my $2,500/month spend rate
  2. Get used to planning around the quarterly dividend & interest payments
  3. Allow me to jump back into work if SHTF, or I feel I miss the structured nature of a day job (yeah right).

 

Option #3 – Continue working the same job because I’m a big scaredy-cat.

Since the commute is outrageous, the only logical move forward in this career is to say f**k it and deploy once again. I’ve already calculated that another year gives me an additional $350 per month, forever, but it really isn’t the best option when I think back to how unhappy as I was most of the time during the last deployment. Besides, I think I have enough money, so going after more would be greedy.

There’s also a non-deployable position open here instructing the new hires. Maybe I’ll just do One More Year stateside and deal with the aforementioned commute.

Fear and greed. Such nasty things.

 

Option #4 – Coolworks.com

Coolworks.com is an awesome website that shows jobs postings for non-cubicle types. I often dream of being able to go snowboarding on a regular basis like I used to ten years ago, so I select “Ski Resort Jobs” and see what’s open at the moment.

For example, I could be a Gondola Operator at Telluride in Colorado. Operate a gondola for $14/hr for at least 20hrs per week and get a free season pass? That doesn’t sound too bad! I could even go full-time, four days a week and continue to pad that 401(k), get employer health insurance, and receive other benefits.

 

So what’s it gonna be? Time will tell. But for now, vacation!