On November, Part 2.

One couldn’t ask for a better segue into this month. The days are sunny and temps hover in the 50’s; we’ve only started to nip on the heels of the overnight frosts, and there’s less than a week to go before we can cross off half the month. Soon enough this’ll all feel downright tropical…better make hay while the sun shines.

And make hay, we did. Since this year was one of a maintenance-mode (no major construction), it’s meant I’ve gotten a little soft in crossing off the to-do items. Oh, I still update the spreadsheet daily, and try to at least chip away at the projects that are due, but there’s been no hard and fast schedule to dig a trench by a certain date, nor play beat the clock with the weatherman over getting a roof on the place. Since I rely on setting goals and crossing them off the list so I can sleep well at night, lately this has posed a problem. If I were one of those types that took serious satisfaction in my corporate office job, this wouldn’t be an issue, but I have a hard time equating 8 hrs in front of a computer with the same mental planning and physical effort of framing a wall. That’s not to say one is inherently more virtuous than the other, it’s just that lunch tastes better when you’ve worked up a sweat.

So this was a welcome weekend where I was able to cross all the to-do’s off without exception. Saturday morning I decided to defrost the Deepfreeze..first time it’s needed doing since I brought it home and since it wasn’t 200F inside I figured I had half a chance of knocking it out without the ice cream turning to mush. A little heat gun action and a bucket to haul off the ice chunks and we were back in biz. Love that pre-war Deepfreeze…. I also got it into my head to vacuum the upstairs, grab the shopvac to get all the Asian beetles and boxelders swarming the clerestories, then go after the bugs that so love the 18’ garage door windows. Plus a good downstairs sweeping. What a difference! And let’s not talk about the flies…

Sat PM I could start on the work, and this involved cutting, edge priming, drilling and installing more siding on the west side of the Annex. I’m really beginning to rue siding work, especially with all the gyrations of fetching planks, crawling up ladders, using the picker bucket, painting ends, etc. I managed to wrap it up by 5PM, leaving a couple courses of siding left that will have to be cut to follow the slope of the roof. This gave me time to clean up before Ben stopped by at 5:30 for a trip to the OP in Waverly. Note: Good food, extremely busy, too damn bright. But it was a nice night and despite each of us only eating half our orders, I think we still required rolling to the car.

It seems I have a tough time on weekends these days. I wake up far too early, still tired, but not wanting to go back to sleep. The sun is up so I screw around on my phone for a while, say enough is enough, then get up and get dressed. Sunday was no different. So after a quick breakfast, I proceeded to juggle the chargers on the picker batteries, got the compressor and charged it, then blew out the yard hydrant lines. Next was man-handling the old 16’ gate, and the 18’+ long 6x6 timbers once used for the drive-in screen. The pickup handled them with ease, along with the post hole digger and shovels. After a few trips to the tractor shed for pea gravel, I was set. Cara came down to lend a hand and we installed the cut down 6x6’s on each side of the driveway on the east side of the tracks. A third 6x6 went in to form the slat reinforcement for the hinge side of the gate. Prior to digging, I decided a smaller gate would better suit us, even if we had to go buy one. The 16’ would be unwieldly in the snow and force the posts too far apart…then there was the matter of weight. We ended up getting everything placed and backfilled before 12:30, though I still need to pick up a 12’ gate to hang.

Next was the unenviable chore of sealing the front cement deck on the lodge. This is a yearly chore to help keep ice from damaging the cement. Last weekend I replaced all the butyl rubber in the expansion joints as part of this two-pronged attack. The trick is to roll out the sealer without allowing any of it to run or drip off the cement edges, yet all top surfaces have to be coated. It went fairly well this year.

Finally, a vintage light fixture was installed at the pole building up at the road. This is in preparation for a 100w solar photovoltaic system I’m planning on putting in this month. Just a simple, single panel arrangement with charge controller and deep cycle batt. Depending how the install goes, I might expand the system with a modified overhead door opener so Cara can get in and out with her car this winter without the “fun” of a manual door in sub-zero temps.

However the big news will be next weekend…the current plan is to rent a trencher and put it to work. 500’ feet will need to be trenched for some Cat-5e cable to run to a telephone down at the gate (as well as future connection for a camera, low-v lighting, etc). Then underground 12-3 cable from CS3 to the Annex. Then a trench from CS3 over to the Pump House to finally get CS3 on the grid. Dropped into the same trench in ¾” poly pipe will be network and coax cables tying CS3 to the Lodge. Cable and other items have been ordered and are enroute but the biggest obstacle is the planning. There are already enough underground cables and pipes that we’ll have to tread carefully in some areas, which means lots of hand digging.

Enter November

Did you hear the one about the insurance adjuster that walked into the bar….? No? Oh, sorry, looks like your eyes glazed over.

Yes, I spent far too many hours at my local insurance agency renegotiating my homeowners coverage and adding protection for the other buildings on the property. In order to get the discounts that mattered, I had to move at least one vehicle from a competing firm, and to get multi-car, we moved a second. There was also lots of 'recalculating' going on as the previous lodge coverage was far out of date. While I trust the competing firm more, it’s nice to have a local rep for all the other insurance and I’ve been with both of them for at least 10 years. Not wanting to leave a stone unturned, it made financial sense to sign up for their credit card (no fees, etc) which essentially adds another discount on top of the quote when used to pay for “insurance products”.

I also found a nice card that returns 3% on gas and 2% on groceries and offers a nice bonus if you spend so much in the first 90 days. Again, no fees or ‘gotchas’. Just pay it off each month and it’s essentially free money on things we would buy anyway. For now I’ll continue to use cash/debit for everything else which makes tracking easier.

And then there’s the big one. On an impulse I sold the roadster. Let’s just say I received an offer I couldn’t refuse…man that was a fun car, but no more monthly payments, and no more silly triple-digit registration fees for plates. I sent her off to the new owners yesterday…hope they’re happy with her.

Meanwhile, I’m just keeping my head down, working my way through the fall and into winter. Trying to finish siding and paint work on the Annex, winterizing the cars, trying to get the wheels in motion for the ag CRP arrangement and doing my best to stay sane at the day job.

Putting my money where my mouth is.

This post was meant to pop up approximately one month, to give a quick update, since I decided I was all-in on the Moustacian train (http://www.mrmoneymustache.com). But what can I say? I’ve been busy. So how are things looking a month and a half later? Did I commit or fall flat on my face?

As I eluded to recently, the first order of business was figuring out expense ratios on my employer’s 401k plan and making those adjustments after figuring out just what the heck those were (see last post). Done and done.

Next, I opened an online brokerage account after doing some googling to determine who was offering the best deals at the time. Nerdwallet gives a good general breakdown, but YMMV. (http://www.nerdwallet.com/blog/investing/best-online-brokers/stock-trading-accounts/) Next I started watching darling Apple to see when might be a good time to buy. The latest phones hadn’t come out yet, nor had the iPad Pro and other goodies, but if history was any indication, the stock would rise, then plummet after announcement, then slowly climb again. Now, ask any advisor what stocks you should invest in, and if they’re not on your payroll, they should be telling you to avoid any single stock pick and instead invest in index funds. If you are paying an advisor, then they’ll tell you the opposite after consulting their crystal ball (they don’t care if you make money or lose money, their commission is on buys and sells). However, Apple is one of the few stocks solid enough that it’s tough to go bust on if you like to gamble. Incidentally, I ended up buying both ‘pre’ and ‘post’ product announcements and then again yesterday. Nobody that ever invested in the stock market has lost money if they buy for the long term. Not even through the last recession nor the crash of ’29. Additionally, if you sell without holding for at least 12 months, you’ll get taxed up the ying-yang, so why not let it ride?

Then the market dropped out. No joke, about a week after going all-in, the market fell apart. But guess what? No better time to buy then when stocks are “on sale”.

Now, after crunching the numbers, having adjusted my 401k diversification and seeing the S&P plummet, I went all-in on my 401k contributions and will continue to do so through the end of the year in an attempt to hit the IRS max contribution limit. This will be a bit of a game as if I cap out early, I won’t get the employer match…or maybe I will (and a question to HR on front-loading and percent-distribution was met with boilerplate that didn’t answer my question). Yes, my take home checks are pretty small, but the net gain is larger in the long run as the majority was deducted tax-free.

Unlike a 401k that limits contributions for the year at Dec 31^st, an IRA can be contributed to through April 15^th of the following year. Though both traditional and ROTH IRAs have a combined cap of $5500. Since my 401k plan doesn’t offer Vanguard index funds (seriously, look these guys up), it made sense to open a free account with Vanguard themselves. Anyone can do it, and since they manage the funds directly, you’re not paying a second party a hefty expense ratio to do so. This is where you want to invest. I opened a ROTH and invested in a stock heavy mix. Then when the markets dipped yesterday I made another buy. The goal is to max this out by the 2015 tax deadline, then do it again in 2016. Yes, this is considered taxed income, but withdrawals on the deposits can be made at anytime without penalty. If you don’t have a 401k plan through your employer, you should seriously consider a traditional IRA which is pre-tax and see if you meet the guidelines.

So, the goals so far have been pretty simple: Max out any tax-advantaged vehicles. Put any “savings” into index funds (whether taxed or not). Optimize any company matching. Cut frivolous spending (I cut my coffee/lunch bill for the last month down to $1.18 for the ENTIRE month). Invest in stocks when they’re on sale. Oh, and go read Mr. Money Moustache.

The Wheel of Interest

As Cara and I were talking the other night, and I was rambling on and on about 401ks and inflation, she threatened to create a ‘wheel of interest’. Only this time there’d be a new category. Financial freedom. You see, ever since I discovered this website back in July, I’ve been on a planning, investing and savings kick.

We’re all told it’s important to save for our future, invest in company retirement plans, especially if there’s an employer match, and to work hard so you’ll (maybe one day) be able to retire. And that’s really about it. Then we’re thrust into the workplace and find ourselves as “adults”. Car payments, mortgage payments on McMansions, and crazy spending seems to be the norm these days. The problem is, the time to get serious about retirement is really years before you plan to retire, when you're just getting a handle on 'life' in general.

I figured I was ahead of the game in many ways- in college I worked as a lab tech making a few bucks on the side to cover my projects. I spent summers and part time my senior year at a company I then joined upon graduating, all the while investing in their 401k program to get the match. Used cars were the order of the day. No credit card spending or debt. And in the meantime, I was saving money up to buy a parcel of farm land that would provide a place to indulge in my eccentric construction projects but also provide farm rent to cover things like property taxes and insurance. This ended up being 50 acres just north of town despite my original intent being only 10.

Sounds good, right? Well, here are some things to ponder….

In today’s market, money sitting in a savings account will lose its value faster than inflation. Hmm, this is where I've always kept my cash.

The average inflation rate is around 3%/yr. That means you are better off locking in a loan on a (slightly used*) car, or mortgaging a house at a rate of 4% or less than you would be paying cash or renting. In fact, you will actually be money ahead in the mortgage at the end of the term even if property values did worse than inflation. Plus the interest paid is deductible. Meanwhile, invest the cash you were going to use and put it in an index fund. Just don’t let it sit in savings.

For several years I ‘trusted’ the default settings on my 401k, and although I occasionally logged in to see if I could create a better mix, I was really shooting in the dark. The fact is, few people take the time to really investigate the investment mixes. As it turns out, these providers are not offering their services out of the kindness of their hearts. You’ll find the option mixes you’re assigned typically have very high expense ratios by default and lots of other little hidden fees. Of course you don’t notice, because over the course of years you don’t notice what’s happening behind the scenes. This is death by a 1000 paper cuts. Do some research, and reallocate your investments so it benefits YOU. If the investment options your provider offers are especially bad, consider contributing only the minimum to get the company match and put the rest in an IRA. Remember, this is compounding money. The more you have, the more it generates, so a few bucks sapped off in fees now potentially equals a lofty sum lost 20 years from now.

And you know what happens with you put a dollar into your 401k or traditional IRA? 1. It’s all pre-tax money so $1 invested really does have $1 earning power. 2. If you contribute enough (and this could involve multiple accts or maxing accts), you can lower your tax bracket which means you put several grand in your pocket in reduced taxes at the end of the year without giving anything away. And 3, as if that wasn’t enough, when it comes time to withdraw that money, it’s taxed at your retirement rate, which could be 15%...down to 0%. It’s a triple win. None of these things are secrets, but it took having them spread out in front of me like so many playing cards to see the obvious. “I’ve been leaving money on the table without realizing it, and spending summer afternoons in a beige cubicle just trying to make up for it.”

Okay, that sounds well and good. Now, about that financial freedom thing. At age 33, how could I even begin to think about retirement? Well, for one, retirement doesn’t mean doing nothing for the rest of your life, it means doing what you want to do before you’re too old to enjoy it. If you want to work on your own terms, fine. If you want to travel, so be it. Bottom line? It means freedom. But here’s the deal… I’m already behind the 8-ball and didn’t know it. So, I’m throwing down the gauntlet; time to put a long term plan into action. I’ll post a follow-up in a few months to see what’s working and what’s not. Time to get serious.

*let someone else take the depreciation hit while still enjoying a competitive APR from the local bank/credit union on an “almost new” vehicle; rates increase with age.

A Mid-Summer's Check-In – Part 1

I may have mentioned last year that 2015 was going to be a catch-up/maintenance year out at the compound, and so far, things are shaping up according to plan. 

Last fall, as you might remember, the pole building went up before the snow started flying. Between Ben and I we got the cars stashed and tarps up over the doorways and this held all-winter. Fast-forward to this summer and all the doors are in, the cement floor is poured, the aprons are finished and three dump trucks full of gravel were brought in and spread over 2500 sq ft of geotextile fabric to help with drainage, minimize gravel loss and block weeds. The gutters and downspouts are now on, front and rear. And this week I foam-sealed the corrugations along the bottom blocking dirt and bugs from entering. I think I can officially say that building is finished.

The Garage Pre-Cement

As soon as spring broke I could be found in the cherry picker staining the east side of the lodge. Thankfully I had enough drive from spring fever to do the job because I doubt I'd have the initiative to paint the entire side of the lodge by myself when the days are 90F. Since the other three sides and trim were done in the fall, that should hold things for a few years.

CS3 work on those last-winter days

Another interesting maintenance project was pulling up the dining room floor and packing in more sand around the drain swale. This involved removing each floor plank, piece by piece, and then trying to pack in sand that was "level enough" but not over-proud, then trying to reassemble the entire affair. (Update: As of 24 hrs ago the water softener flooded the dining rm while we were at work and swelled all the plank seams. Great.)

Spring in Iowa immobilizes the 2WD Scottsdale

A real bear, but something that had to be done, was to fix the fascia situation on the lodge. You see, when I finished the roof those years ago, the fascia trim was custom bent locally out of aluminum, so each section had a max length of 8 feet. These created a see-saw effect with lots of overlaps and they were just a touch short width wise. The bigger problem was that airflow could get up under those fascias and blow into the lodge. On extremely windy days, the crepe paper light fixture over the stairs would move around and you could hear the airflow screaming past. 99% of the time it wasn’t a problem, but the 1% let you know you had air coming in. The front fascias were also starting to darken from water running off the front roof and _under_! the fascia trim. Not good, as how much of it was running behind the fascia boards and soaking the soffits? So, all the trim (120'+) came off and was scrapped. The fascia boards were scrubbed and painted (all nice and solid) and bituthene tape was used to seal the top of the boards to the roof deck, which meant getting up underneath the shingles all the way around. Invariably, nails had to be pulled, the surface cleaned so the tape would stick and holes sealed. A grand time. In advance, I took roof profiles and had Menards custom trim service make up lengths of fascia trim (up to 12' for fewer seams) with just a little more projection to protect the tops of the boards. I'm just glad that job is done.

Painted Fascias with New Trim

At roughly the same time, I had some brown trim made up for The Annex and this was slipped underneath the metal roof on the rear of the structure, although I had to pop each roof panel off and back out screws to get it into place. While it was the rainy season, at least it could be done in a day.

Of course the Pumphouse was starting to show it's age, or at least the paint was, so a Saturday was spent scrubbing the siding and repainting the works in oil solid stain. And shortly before that, it was discovered the rubber roof had pulled away from the metal edges and had allowed water to start to rot out the rear fascia board. Luckily it was caught in time and the roof deck was just fine (this is why plywood is nice for smaller projects). Another day spent peeling back the rubber, scrubbing, and gluing the works down with a paint roller seems to have fixed matters. I also used window sealing tape along the rear edge to divert water over the trim should the rubber come loose in the future.

But it hasn't been all work, there's also been lots of travel. In February, when it was still cold and snowy in Iowa, we broke away to Disney World in Orlando and even dropped in on the parents for a day. The sun and warmth did us some good, though 24 months between visits might be a little too frequent for Disney. A month later Ben and I found ourselves pointing the Suburban for Boston to rescue a one-of, well, one, 1963 Radarange. While there are other ‘Marks’ out there, I can't imagine many turquoise paneled ones were built, let alone, survived. The fact that there’s no data plate and no serial number makes me wonder if this was pre-production.

Cruising out East

The trip was a blast, staying with a friend out there for a mini-wash-in of sorts. Then just a couple weeks later, with Suburban now empty, I headed for Dayton, Ohio to give the Hamvention flea market a spin. While I came up mostly empty handed, I did score a couple of goodies that paid for a teletype collection I picked up in Toledo the following day. And I was able to visit world-famous Mendelson’s. If you need it, they’ve got it. Staying in vintage roadside motels actually made the trip a worthwhile experience.

Mendelson's of Dayton