Loving Nine Months Of Early Retirement
After another month of early retirement, I have to say I’m a big fan. I fill my days with things I want to do, not things that I have to do to earn a paycheck.
I have heard other early retirees say “I’m so busy now that I’m retired, I don’t know how I ever had time to work!”. That’s a sentiment that’s very familiar to me these days. In a good way.
On a recent afternoon after enjoying a leisurely lunch with an old friend, I saw a stark reminder of the busy busy rush rush lifestyle some people experience. A lady in a nice shiny new Mercedes was driving aggressively and trying to pass me while we were both in the turn lane near a traffic signal. I wasn’t in a particular hurry, but I know I was at least doing the speed limit. Eventually she overtook me and managed to arrive at the red light a few seconds before me. I imagine she was pretty pissed that she had to wait along side us ordinary people.
She hurriedly whipped out her lipstick and impatiently applied another thick coat of veneer to her lips. Then the finger tapping began. Eventually she turned to checking herself out in the mirror. Then more finger tapping and some email-checking on her phone. By this time, the light had turned green, and I was watching her grow smaller through my rear view mirror. She was so busy on her phone that she forgot she was inside of her car driving somewhere! Eventually a friendly horn beep from behind her brought her attention back to the road. She must lead a very hectic life! It’s little encounters like this that make me appreciate the laid back lifestyle I have created for myself. On the rush versus relax continuum, she’s doing a great job representing the “rush” side, and I hope to maintain my role as the poster child for the “relax” side.
Early Retirement, Nine Months In
Here’s what I’ve been up to in the months since my last update:
I think I’ll be a student of some sort forever. I like learning, and I think it’s a good habit to expand your knowledge throughout life. Whether I’m reading a book, watching a documentary, attending a lecture, or working on an online course, I keep my mind active by absorbing new information all the time.
In April, I finished up the Coursera course on Financial Markets with Robert Shiller. I spent a few hours each week watching the online lectures, reading supplemental materials, and answering the quizzes. Some of the material is a review of what I already know, while other parts of the course cover areas of finance in much more depth and breadth. In the closing weeks of the course, I enjoyed lectures on options, banking, and real estate.
We were asked to write an essay on behavioral finance and the 2007 housing bubble. Our essays were then peer reviewed by other students. Surprisingly, all of the other essays I read were written very well (probably better than my own essay for which I received a grade of 8.5 out of 10). I was really curious if all the students in the course were taking the class seriously, and that is my answer. The five essays I read demonstrated that the students were reading supplemental materials, analyzing, interpreting and applying what they read and heard in the lectures, and understanding the concepts enough to craft a well-organized essay on a complex financial topic.
The most interesting part of the course was the guest lectures. Famed investor Carl Icahn spoke on the collective incompetence of the Fortune 500 corporate management. Andy Redleaf, founder of Whitebox hedge funds, spoke on his view of market efficiency (or lack thereof) and risk and risk management. Perhaps I’m an information elitist, but I always appreciate learning from actual experts who have accomplished big things.
Since finishing the Coursera Finance course, I have returned to studying French at Duolingo.com. It’s slow going right now, but it should come in handy this summer since we’ll be in French-speaking Canada for almost a month on our big summer trip. I can say things like “I like to eat butter” (j’aime manger du beurre), “he dies alone” (il meurt seul), and “which girls eat the chocolate?” (quelles filles mangent le chocolat?). You can probably tell I still have some learning to do.
I also reached the limits of photo editing and manipulation using MS Paint, so I downloaded a free copy of GIMP (GNU Image Manipulation Program). It’s like Photoshop, but free (which is within my price range). I have never used Photoshop or any similar type of program, so I’m what they call a complete novice. I found a good series of instructional videos and spent a few days learning the basics of using GIMP to edit images, shrink them, and combine two images together (among other useful tricks). My “one month of groceries” article would have crashed my server if I didn’t shrink and compress the photos first!
Learning how to use a photo editing package is one of those things I’ve always wanted to do, but never had the time to pursue while working. It’s pretty awesome to block off a few days of my schedule to devote to learning a new skill like that.
I can’t be a brainiac all day. I like to have fun, too. Right now that often means enjoying the fleeting time of Mr. RoG’s rapidly expiring toddlerhood or setting up fun social engagements for the older kids. Play dates should be fun for parents, too.
We hosted a combination birthday party and sleepover for our oldest daughter in March. We are about to repeat the party with an end of school slumber party for a few of our kids’ friends and their parents. The parents won’t stay for the sleepover part – just dinner. We tend to keep these events low key. Adults can sip some wine and grab a bite of pizza while kids will hopefully stick with pizza.
For less than the price of a modest meal out with the family, we can entertain about six adults and the same number of kids. And we get to enjoy the company all evening. The weather is looking pretty nice, so I expect the kids will play outside while the adults lounge on the lakefront patio. We paid a lot of money for a house with a yard ($110,000 is a lot, right?), so we might as well get some value out of it.
Having the time and energy to throw your kids a random end of school sleepover is just one of the advantages of early retirement when you have kids.
Spring time here in North Carolina means some really nice weather outside. That also means I can avoid the indoors and computers. Notice there were only three April posts and five May posts here at Root of Good?
Lately I’ve established a morning routine of laying outside in my hammock for an hour or two and reading something light. Now that he’s two, Mr. RoG Jr. handles playing independently pretty well.
Finding people to hang out with hasn’t been a problem. Many professionals don’t work a strict 9 to 5 schedule and have Fridays off or work shift schedules (in industries that operate 24/7). Or they have a long lunch break and drop by for an hour or three since we live near downtown. People seem to look for a reason to take a long lunch.
One fear of early retirees is that they will become socially isolated. I have found the opposite to be true. I see a lot more of my friends and family now than I did when I was working full time. When you are working, you see your coworkers (who you don’t get to choose) more than your real friends (that you do choose).
At this point, the biggest thing on my to do list is to finish planning our trip to Canada this summer. Mrs. Root of Good worked out an extra five weeks of paid time off and we will be hitting the road in late June and returning to Raleigh in early August.
We have the basic schedule worked out. All hotel rooms and apartment rentals have been booked now. We booked a nice two bedroom apartment in a quiet neighborhood for eight nights each in Montreal and Quebec City. In Ottawa, we booked a one bedroom apartment just across the river from downtown Ottawa in Gatineau, Quebec. The one bedroom rental was slightly cheaper than the two bedroom apartments. On average, we are paying $55 per night, which compares very favorably to the $100+ we would expect to pay at hotels that could accommodate a family of five. Not only are the apartment rentals cheaper, we will also have a full kitchen and living room so we can spread out and relax.
I used AirBnB.com for all the apartment bookings. They seem to have the widest selection of properties available and they have a map-based search tool that makes it easy to find inexpensive (but nice) rentals in good locations around every city I have looked at so far. If you want to check them out for your next trip, you can use my airbnb referral link to get $25 off your first reservation.
Using that discount, I saved $25 on my rental in Quebec City, and I’ll end up getting the entire stay for free using the $400 bonus offer for the Barclay Arrival Plus card.
I just helped some good friends extract themselves from the tentacles of Ameriprise. I couldn’t figure out exactly what the fees were on their accounts, but let’s just say they were high. Maybe 2% or maybe more. I consider myself a moderately skilled forensic accountant, and I still couldn’t nail down all the fees they were paying (there were so many!). Load funds, high expense ratio mutual funds with 12b-1 fees, wrap fees, and annual fees to name a few. While the overall asset allocation was reasonable (a high percentage of US and international equity investments with a small bond/cash allocation), the fees were completely unreasonable.
Financial advisers at Ameriprise and other similar full service brokerage firms have no fiduciary duty to their clients. They just have to recommend “suitable” investments. It’s okay if they recommend very expensive investments that greatly compensate the broker. As long as the recommendations fit the legal definition of “suitable”.
My friends switched to Vanguard (one of my recommended brokerage firms). I haven’t circled back to find out their exact portfolio allocation, but I think it was going to be somewhere well under 0.20% (compared to the 2% or so they would pay at Ameriprise). On a $100,000 portfolio, this would save an investor $1,800 per year. On a $500,000 portfolio, they would save $9,000 per year. Every year. Just for picking a better investment company and set of mutual funds.
I also helped my mother figure out the travel hacking game. She’s an avid train rider and wants to accumulate as many Amtrak Guest Rewards points as possible. I pointed her in the direction of the Chase Sapphire Preferred card, the Chase Ink Bold card, and the Starwood Preferred Guest card (check out those cards and more). Those three cards offer a combined 125,000 points as a sign up bonus that can then be transferred into Amtrak Guest Rewards. Roughly 70,000 points buys you a round-trip ticket across the entire United States in a bedroom sleeper car (a $2,000+ trip). You can take quite a long train ride (or perhaps two long train rides!) just by signing up for a few credit cards. You could also take the 125,000 points and redeem for two or three international plane tickets to anywhere in the Americas or Europe if train travel isn’t your style.
The school year is winding down for my kids. I started my journey in early retirement on their first day of school, and it’s hard to believe an entire school year has almost slipped by. This summer we have a fairly busy schedule for the kids. They will have about ten days with no programmed activities, and then a week of summer camp. After that, we depart for Canada at the end of June. Once we return in August, the kids have two more weeks of summer camp and a week of free time before returning to school once again.
My plan is to provide travel updates while we are on the road this summer in the northeast US and in Canada. It’s going to be a busy summer so we will see how that goes!
What was the most fun thing you did last month?