Still FIRE, Still Happy

After not posting for most of this year, I’ve gotten a few comments and emails asking if we’re still FIRE and what’s up in general.

June 2018 marked our three-year FIRE-nniversary. We love it more than we did in the beginning, which was still new in sometimes terrifying, transitional ways. The longer we’re free, the more unimaginable traditional employment becomes, not that it’s something we think about anymore.

Our spending for this year has held steady at $2,800/month for everything, including travel (airfare, gas, mileage), property taxes, groceries, wine, dining out, and so on. This puts us on track for $33,600 in annual, San Francisco Bay Area spending.

I published a book that is doing quite well, which is another reason I have not posted much here. Publication is a wild, agonizing, fun and, frankly, mind-blowing process for someone who never worked in either the publishing or media industries.  I won’t identify the book on this pseudonymous blog, but can definitely say having more time in FIRE made writing, editing, and publishing possible (though I started it before I quit my tech job 3.5 years ago). I’m curious to see what, if anything, the book adds to our annual income. It hasn’t been out long enough for me to have a good sense of that.

Despite the hysteria and anti-FIRE hate coming from Suze Orman, the FIRE waters are as wonderful as ever. In the 3.5 years since we made the leap, FIRE has only become more important and meaningful. We’ve been able to take care of sick and elderly family members, and some of our young friends with shitty, horrible, unfair diseases. The time we got to spend with our beloved people before they departed this mortal coil was the greatest possible gift.

The extreme weather effects of climate change become more severe with each passing year, whether you live with hurricanes, drought, floods, sea level rise and high tides, or (like us) wildfire. We don’t know what the future holds, but don’t think it will get much better during our lifetimes, and is probably likely to get worse. In retrospect, we are so unbelievably glad we did not spend too much more of that time working than was necessary. Suze, we have no regrets.

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How We Spend Our Days

Long ago, as a 19-year-old undergraduate, a friend gave me a copy of The Writing Life by Annie Dillard as a birthday gift. Recently, during the KonMari process of going through my books, I reread (and kept) this inscribed gift. I came across a passage that has become quite popular:

“How we spend our days is, of course, how we spend our lives. What we do with this hour, and that one, is what we are doing… There is no shortage of good days. It is good lives that are hard to come by. A life of good days lived in the senses is not enough. The life of sensation is the life of greed; it requires more and more. The life of the spirit requires less and less; time is ample and its passage sweet. Who would call a day spent reading a good day? But a life spent reading — that is a good life. A day that closely resembles every other day of the past ten or twenty years does not suggest itself as a good one. But who would not call Pasteur’s life a good one, or Thomas Mann’s?”

The Writing Life changed the course of my life. That quotation haunted me, especially when wasting time on social media or at miserable jobs: “What we do with this hour, and that one, is what we are doing,” I’d realize, painfully, as I closed another technical support ticket or walked toward the HR wing to report that my vile manager had rubbed my shoulders and smoothed my hair.

For more than 20 years now, that single sentence has been all the reminder I needed to be careful and judgmental about how I spend my time.

Almost equally striking was: “The life of the spirit requires less and less; time is ample and its passage sweet. Who would call a day spent reading a good day? But a life spent reading — that is a good life.” 

It is no coincidence that I adopted habits of frugal abundance at age 19, shortly after I finished my first read of this book. Dillard’s words sang out to me: Yes. That. I want a lot more time spent reading, and a lot less in cubicle farms.

Dillard’s call was stronger than the value mainstream, capitalist, industrial culture puts on reading vs. working, and the inner critic they create: “Reading is lazy. Being a worker, a productive member of society, is the very best thing you can be.” (Ignore, for the moment, the parties who have a stake in our enacting their particular, consumerist beliefs).

Dillard’s words were the very first that sounded like anything I actually wanted. I never wanted a big house, but a solidly made, cozy, affordable one. I never wanted a fancy car so much as a reliable one, with good gas mileage and without expensive parts.

During this 19-year-old time, I was absolutely content with a lifestyle other people referred to as “scraping by,” because I wasn’t. Yes, outwardly, I lived in a scarred and blighted Detroit neighborhood with abandoned, collapsed houses next door and across the street. Our “dangerous” neighbors were actually lovely, kind people who sold drugs for lack of other options (now totally acceptable behavior by white people who engage in the exact same behavior, but from a nice looking dispensary rather than the sidewalk).

I made $16k/year working full time. College cost me $9k/year out of pocket (plus $9k/year in loans for the difference). I had $7k to live on, so I learned, rather quickly, to make Mustachian choices to create a less stressful life. My share of rent in that spacious, 1920s, well maintained “ghetto” house was $160/month ($1,920/year) and I had a beautiful bedroom of my very own, as did each of my four roommates. Importantly, that $160/month included heat, in the form of those awesome-when-they-work steam heat radiators. Indeed, these worked so well that we often needed to crack a window because the house was too hot.

I could make that $160 in two to four nights of waiting tables or bartending. (Never mind that my being a bartender was illegal because I was not yet 21. Never you mind.) A lot of my food was free, dishes the cooks screwed up and saved for workers to take home at the end of the night. God love and keep those cooks: They always seemed to screw up more on slow nights, when our tips were lower.

Yes: I could have lived in a slightly nicer place, but lower rent meant more homework and sleeping time, and less working time. Time was already a calculus, even when each additional dollar was more precious than future dollars would be, because I had so few dollars at all.

I remembered all of this while doing the KonMari process (against the rules, because I was listening to a podcast). The Mad Fientist podcast introduced me to The Happy Philosopher, and his mind blowing post about the marginal utility of money. Don’t you just love people who put words to vague feelings and notions, and name them? Happy Philosopher’s post did just that. As with Dillard, I read “marginal utility of money” and thought: Yes. That. That is what I have been trying to say when I try to explain that, after a certain point, more money was not nearly as valuable to us as more time.

Without actually knowing or being all that conscious of it, Best Husband and I had completed Happy Philosopher’s steps (this is a direct quote from his post):

  1. Figure out how much money you need to fulfill your basic needs: food, shelter, transportation, etc.
  2. Think deeply about what in life brings you happiness (not pleasure, but happiness) and how much money above what is needed for basics you need to provide for this. This will take time and tinkering and will change over time, as what makes you happy will change as you evolve.
  3. Cut out all spending from your life that does not bring you joy. Examine everything you spend money on and ruthlessly eliminate or downgrade. Optimize everything that is left over.
  4. Use the saved money to buy your freedom.
  5. Use your freedom to do the work you love, or do less of the work you hate.
  6. If you are still working reassess and see if the trade makes sense, if not go back to step 1 and repeat until satisfied.
  7. If you don’t have enough money to get past step 1 you need to figure out how to make more money.

I think I’ve mentioned this before but, as soon as we paid off the house (and I mean within days), work became unbearable. We had bought our freedom. What had been, one week prior, “not always a terrible deal for the money” instantly became a “waste of a day,” time that kept us from spending time in other ways.

Now that we’re comfortably in step #5 (I’ve written in detail about our part-time self-employment, FIRE-for-us lifestyle), I wanted to return to Dillard’s big question, 20+ years on: How do we spend our days?

Every day, we wake up naturally, usually between 7:15 and 8 AM, though it occasionally ranges from 6:30 AM to 9 AM. I have not figured out why those swings happen for both of us when they do: Why, for one week, do both of us wake up naturally at 6:30 AM instead of 8 AM?

We do not set alarms unless we have a flight or something, and we rarely have a need to be on an early vs. later flight. I make coffee for us every day, and we have coffee in bed for an hour or so while we chat and read. I read the New Yorker and High Country News, he reads the Guardian and some other things from his phone.

This is the best part, by the way. This was all we wanted: more sleep and time together. You can probably stop reading right here, or I can probably stop writing. Our mornings are the highlight of my life. When, God forbid, death separates Best Husband and me, I will miss our mornings the most, but at least we will have had years of quiet, beautiful morning hours.

Then, we will either do some work (whether paid client work or volunteer, this is usually computer based work but may take the form of a call or meeting), or we will work out. We’ll walk to the gym to lift weights, or go to the climbing gym, something like that.

After 2-3 hours of either work or work-out time (or a combo), we’ll cook and eat lunch and head out to the garden to have a cup of tea, weed, plant, pick food, etc. We might also take a long walk or hike, or run errands (while everyone else is still at work – very important), or spend time on some of our hobbies – sewing, writing, brewing beer, woodworking, etc.

Sooner than we think, it’s time to cook a good dinner from scratch, which we do together while listening to podcasts. Evening time is, rarely, going out (to see a play or similar) but, more often, is time for more hobbies, maybe the occasional movie or PBS show. I usually knit or sew; Best Guy may play a video game or read a book.

We go to bed around 10 PM and read in bed until 11 PM or so, until lights out.

I would not trade a minute of it: “time is ample and its passage sweet. Who would call a day spent reading a good day? But a life spent reading — that is a good life.” 

I can say with certainty, 20+ years later, “There is no shortage of good days.”

 

 

 

Update, DIY, Savings Rate in FIRE, and Frivolity Vs. Generosity

This post contains a general update, a brief rumination on savings during FIRE, and acknowledgment of some anti-Mustachian behavior: paying professionals for home improvements and treating folks to too many dinners out because hey, we can. Is that so wrong? Where’s the line between frivolous and generous?

Life in FIRE Update

I apologize for scant posts, not that anyone is hanging on my every word. We’re just plain not online much these days. Once Best Husband and I bid eternal farewell to office environments, the appeal of online distraction plummeted.

We spend a good part of the day outside, gardening and hiking. We do a lot of what could be labeled pro bono business and volunteer work, with neighborhood groups and the like. When we’re inside, we’re cooking, sewing, beer brewing, knitting, and doing other offline stuff. There is a positive, direct correlation between the amount of time we spend outside and our happiness.

FIRE is better than I ever could have conceived. Coming up on three years now (June), we cannot remember what day-to-day office life really felt like. That feels like healing. We do not take for granted having our weekdays back, though. Recently, Best Husband and I headed up to the Nor Cal coast to see some friends midweek: no traffic, no tourists, low midweek room rates. While there, Best Husband said “Remember how little time you used to get off?” I shudder to think.

Insufficiently DIY Mustachians

We have spent an eye watering, yet quantitatively insignificant, amount of total savings on home improvement projects (outdoor landscaping, a deck, new windows to replace the ones from the late 70s). Life in FIRE means we’ve actually had time to deal with these.

I don’t know if it’s my mild autism, visceral dislike of shopping and consumerism, or both, but I found it impossible to deal with home improvement choices and contractors when Sweet Husband and I were traditionally employed. That additional mental overhead tipped my cognitive balance from “holding on, if barely” to “hell no, too much.” When you work a ton of hours, you do not want to spend precious Saturday hours in the noisy aisles of Lowe’s, trying to evaluate window samples over beeping cash registers and announcements, or dealing with a salesperson in your living room. I did not…could not.

Lest you think too highly of our FIRE ways, allow me to own the fact that we’re not as DIY as other Mustachian types, including Mr. Money Mustache himself. We have a lot of DIY hobbies, and we built and landscaped our entire garden ourselves, but I am happy to pay professionals to do things the right way, once.

We did not DIY our new roof, or our windows, or the earthquake safe, cement and rebar foundations for our garden shed and decking. And because we did not, they were done in a day, and done well, and all that chaos and noise was gone ASAP.

Could we have figured out how to do all of these things? Yes. Would we have saved money? Maybe. Upfront, yes, but over time? I don’t know. It did not make sense to invest a ton of our time learning how to do something we plan to only do once. If you’re a DIY Mustachian who plans to parlay your newfound window installation or roof laying skills into an FIRE side gig or hobby, great. That’s not us. The gardening? Yes. Laying rebar and pouring cement? No.

FIRE is different for everyone, and Mustachians the world over make different decisions on where to save money and where to spend it.

Our next project will be a gray water system. If we’re going to stay in California and have a garden, it’s the only responsible thing to do. Our water usage is low compared to most, but our shower water still creates a clean, high quantity of gray water.

We’d like to add a pipe to take shower gray water into the garden, solar pump it up various, terraced levels of our San Francisco hillside, and send it into a storage tank and irrigation system. The design part of this will be fun. Fortunately, it’s legal here and the City even subsidizes classes about it at Urban Farmer and such.

We may do another gray water line (the easier of the two) from the laundry to an industrial tub in the garage. I’m one of those people who likes to buy raw sheep fleeces, wash them, and spin or felt them. Most wool requires at least two or three wash cycles, so–given our drought–I’ve stopped washing wool at home altogether.

Fortunately, a very inspiring fiber neighbor of mine (there are quite a lot, interestingly) described how she uses her laundry gray water for this, and I want–for the very first time–to keep up with the Joneses. She lays a fleece in the wash tub, washes a hot load, and that’s also the first fleece wash; and so on until the wool is clean enough. The only clean water my neighbor uses is for the rinse.

Savings in FIRE

What should savings, if any, look like when you’re financially independent and retired early (FIRE), and why? I realized I had not thought about this at all, in the nearly three years since we left our jobs. Were we still saving money? Because we bring more than enough in, we do not use our dividends to cover costs of living; we reinvest them.

I took a look, and came to a simple, obvious conclusion. In FIRE, we still save 20%, in pre-tax, tax beneficial savings. That’s a good minimum, and I think a simple rule for us to follow: As long as we have income in FIRE, we should take advantage of tax beneficial savings vehicles that drive our income level and taxes down. Duh. Technically, we do not need to save anything else, because we have so much cash, but we can if we want to.

Here are the numbers: In 2016, we made just under $89k. In 2017, just under $95k (officially; there is a few thousand extra dollars of cash income in there). These are gross income figures, before expenses, deductions, etc.

We contribute to an HSA each year, which is $6,750/year for our household. We can still make SEP contributions as well, $11,708/year for our household in tax year 2016. Altogether, that’s $18,458/year, more than 20% of our 2016 income and just about 20% of our official 2017 income.

Frivolity Vs. Generosity

We do need to get back to our Mustachian principles a bit. In 2018, I’m going to focus on the grocery bill and eating out. Because we’re home a lot now, getting out for dinner has been a way to see friends and have a change of scenery. Most of them work all day, and dinner is a convenient way to spend an evening out.

This habit is reflected in our Mint tracking. Womp womp. Looking at the past three months of grocery, dinner, and booze spending in Mint, we see: $1,598 in December, $1,355 in January ($338.75/week), and–hold the phone–$1,255 in February ($313.75/week), and it’s only February 17!There are almost two full weeks left in this month.

Granted, about $200 of that was groceries for friends who have four kids and are going through a tough time, financially, after the wildfires a few months ago. And you know… Our net worth is just under $2 million, and there is no way I’m not buying groceries for friends because of some grocery bill targets we maintained before we even reached FIRE. Uh uh. I’m buying friends as many groceries as they need. This is just one of the many joys of being FIRE and able to give.

We can, however, be a bit more careful about our food spending. We can have more folks over for dinner and Costco bottles of wine in the garden, for example, rather than go to a restaurant.

Two-Year FIRE Check-In

Our second FIRE anniversary passed without so much as a post, four months ago. So, how are things? In a word: great. We’re hopeless. We cannot conceive of spending entire days in someone else’s building, doing work that benefits that someone else. Better yet, the memories of our former corporate lives fade by the month. Otherwise…

2017 Numbers: FIRE Transparency

Everyone does FIRE differently and “retired” means a lot of things. For us, Financially Independent and Retired Early means we do not need to work to survive, but still do paid work we enjoy. We do this without intention or any sort of plan. We take work (or don’t) as it comes, and set no financial targets for annual income.

This year, we have not worked many billable (i.e. official self employed) hours: 600 between the two of us from January 1, 2017 through today, about 66 hours per month (33 hours per person) per our bookkeeping software. This does not include hours spent on all paid work we do, like casual side gigs for cash or trade, but it’s reasonably accurate.

Income wise, we’ve earned $85,000 so far. This is about the same as 2016, which was $90,000. We’ve done different sorts of work for an entirely different set of folks than we did last year, and yet our income is the same.

Spending wise, we’ve used $22,000 of that $85,000 to live on. Being 75% of the way through the year, this seemed low. Before we entered FIRE (and in order to achieve it), we spent $32,000-$34,000/year. Since FIRE, we haven’t altered our spending. Then I remembered that our property tax bill hasn’t arrived yet! Property tax in full, plus basic expenses for the remainder of the year and some year-end charitable donations, will bring our 2017 spending total over $30,000 to what’s normal for us.

Related to this, FIRE life has a consistent, seasonal cadence. July and August have little to no work, because everyone else is on vacation. Things pick up a bit in the fall before slowing down before Thanksgiving. January through May/June are slammed.

Can’t Stop the Entrepreneurship

When we entered FIRE in June 2015, the six months that followed were a revelation in brain space, time, and creativity. Without corporate work occupying our valuable thinking time, we got all sorts of ideas for new businesses, or ways to help existing ones. We loaned money to one small business at 2%, got it back, and are now re-investing that full amount in another small business, in which yours truly might become a very part-time partner. I’m not sure. Even that still feels like too serious a commitment in my FIRE life.

I’ve written business plans for numerous small businesses, gratis, and may also continue a relationship with one of those, likely as a board member.

This work has been a LOT of fun.

Mental Overhead = Automatic Frugality

I love the phrase mental overhead, also known as cognitive load or emotional labor. It’s the mental cost of stuff, and of acquiring and managing the stuff. This mental cost prevents us from spending any actual money. 

New windows? We could use them. Ours date back to the 1970s and we have very few windows, so replacement costs are low. Ah, but there’s the mental overhead: Researching all the types of windows available. Learning what the city of San Francisco will and will not permit. Visits from people to measure the windows. Reviewing estimates from said people. The communication: phone calls, blah blah. People not showing up when they say they will.

I literally cannot bear the thought. Another year passes without new windows.  Likewise cabinet facings, a built-in shelf, and house painting, though the latter looks more pressing. Sorry, neighbors across the street. I can’t even.

In FIRE life, mental overhead decreases over time (unlike at work, with managing a new hire, for example), but feels higher at the outset. Fortunately, this non-monetary cost has the benefit of translating to money savings!

Eldercare Emergency

I saved the best part of FIRE for last. Earlier this year, we became primary caregivers for an elderly family member, following their emergency hospitalization. If we’d not already entered FIRE, this incident would have forced our decision. There is no way we could both have fulltime jobs and properly care for our family member.

I have a LOT more to say on this that I’ll save for later. The short version is:

Holy Mother of God, the U.S. has the most expensive, vile, ineffective, wasteful, and fraudulent “care” system on the planet. I mean, holy s**t! This is like the Communist “make work” system, with 15 people who all do one thing vs. one person who can do 7-15 things! We cannot age in the U.S., uh uh, no way in hell. We’ll have to do what so many retired Americans have done and look into overseas living at some point. Glad we have family in Europe… Will that help us?!

Caregiving is a full-time job, especially in the mental overhead department. As eye-wateringly expensive as the U.S. system is, those costs do not include the free labor, by millions of people like us (and with far fewer resources), whose unpaid work sustains this s**t system, managing appointments, prescriptions, supplies, visits, caregivers, bills, bank accounts, the insurance, literally everything. Something’s got to give.

Conversations With Tax Man

The 2016 tax year was the first full one we spent in our FIRE-and-limited-self-employment life, making 2016 our first FIRE tax return. Ah, milestones!

Our income was over $90k, for a net income of $63k after business and other write-offs. We used no savings. We still had to contribute to IRAs.

Now, we think a $63k net income between two adults with a paid-off house, bought-in-cash car, no debt, no kids, and no other dependents is–even in the San Francisco Bay Area–a princely sum, so much so that we gave a lot of that $63k away. Our donations to charities haven’t changed since we entered FIRE, and they were already high. We also took some family and friends on vacations that may seem simple, but it turns out that free airfare and a house by the ocean for a week still count for something to our nearest and dearest.

Yes, where we live, $63k is not much to get by on if you do have to pay for housing, a car payment, debt, kids, child care, and more. But as I said: That’s not us. And perhaps nobody knows that better than our tax accountant, with whom we’ve worked since 2007 (I later brought him into to our marriage, aww).

Let’s call him Tax Man Dan, since that rhymes.

Tax Man Dan was, understandably, surprised by our drastically reduced income (even though I think earning almost $100k before taxes is a great first year in business by any standard, even for people who are not FIRE). He asked, with sincere concern, if we thought our income would be the same for 2017. Based on what we’ve earned since January, we sighed and said “Yes.” And then he asked if both of us would remain self-employed for the entirety of this year, or if “at least one of us” planned to get a job.

We had to smile. Tax Man Dan, concerned father figure type that he is, thought things were pretty dire for us at $63k net, while we recalled a 2016 of living like kings, what with our organic coffee and wine from Costco, abundant beach frisbee time, and taking friends on vacation. We realized we hadn’t really given Tax Man Dan our FIRE context.

Me: “Tax Man Dan, you know how much money we’ve earned these past 10 years. You know we no longer deduct mortgage interest, all that.”

TMD: “Of course.”

Me: “Then… How much more money do we need?”

TMD: “Ah, well… All depends on what you want to do with it, I guess. Buy a second home, maybe? Get a Tesla, like so many other people seem to be doing?”

Me: “That’s the thing. We just can’t get motivated by stuff. The only thing that motivates us is staying out of offices and job interviews.”

TMD: “Really! Well… That is really something… I mean, I suppose… It’s just, not a lot of people do this.”

Me: “We know.”

TMD: “I mean, they really don’t. And they could. They absolutely could. I, well… You know some of my other clients. They referred you. Many of them have earned far, far money than the two of you. Some earn more in one year than you have in 10. And they keep working, keep buying houses… a house in Tahoe, a house in Hawaii. They keep getting divorced and remarried, too, now that I think about it! I guess I’ve just never seen people do this, certainly not at your ages. But, you’re right. If you don’t have a strong reason to keep working…” 

Me: “And we don’t…”

TMD: “And you don’t, then… Well, why not?”

And then Tax Man Dan got a lot more interesting.

TMD: “I mean, look at our family, even. You don’t know them but let me tell you, we have far, far more than we need. More than enough house. College was paid for ages ago. And I’m an accountant, we’re pretty frugal, but… When we bought our house in this area, that was the late 80s, prices were starting to rise, but it wasn’t as desirable as it is now… It cost us what… $70k? Maybe less? That was a lot compared to the rest of the country, but it was something you could pay off in a lifetime of work, and we did that some time ago. But I have never personally thought about retiring early. Just always assumed I’d work until full retirement age. Huh. It’s really something.”

Now we’re wondering if Tax Man Dan will still be working next year. Will our FIRE values end up depriving us of our beloved tax accountant?! Stay tuned for the next few hundred days until tax year 2018!

Businesses Someone Else Should Start

Somehow, almost two years have passed since Best Husband and I quit our tech jobs and achieved FIRE. Lately, we’ve been more self employed than FIRE, which is a problem we need to fix. In 2016, we accidentally earned $90k working incredibly part time, an average of 50 hours/month between the two of us.

Strangely, it doesn’t feel very part time, due to what I’ll call mental overhead. Even when we’re not actively working on and billing hours toward a thing for a client or a friend, we still know we owe a thing to a client or friend. Even when we’re off the clock, it’s difficult to prevent ourselves from mulling and noodling on a problem we’re trying to solve.

Since we still have more work than we want, then, I figured I would pass on some ideas for businesses that someone else should start. The below are either things we’re asked to do as paid work, or work that we know others need and do not want to do ourselves, and very much in the spirit of Mr. Money Mustache’s 50 Jobs Over $50,000 series.

  1. Intelligent, grammatically robust PR work – Now. I have never done PR work and have no connections in this field but, apparently, this matters not. I abhor business speak, write clearly, and can spell, and this is more than enough for many businesses. If this sounds like you, for the love of God, open a PR agency (or just start a side gig) and watch your business grow and grow and grow.

    Former colleagues, clients, and friends will send me something a PR agency wrote about their company, product, book, etc. with messages such as: “The one pager the PR people created is attached and will make you throw up in your mouth a little. PLEASE help!” and “The grammar on this is horrible, but I care so much less about the grammar than it just sounding like SOMEONE who understands computers POSSIBLY wrote it.”

    If you can write jargon-free marketing material that manages not to sound like every other terrible press release out there, go forth and be rich.

  2. Ghostwriting – This is a service in which people who either cannot, do not like to, or or do not have time to write something like a book, or even Medium posts, hire and pay someone else to do it for them. The writing is then published under that person’s name.

    Again, as an engineering director, this is not a skill I ever claimed to have or a service I ever claimed to provide, but just sort of happened because I write well enough. I was doing some technical writing for a client and, because I was already there, the client asked if I could ghostwrite a few blog posts. And then the client’s friends asked about “that amazing post on Medium” and the client gave that person my name, and it grew, and grew.

    Now, you could try to do Intelligent PR (feel free to name your business that, too) and ghostwriting, but I believe you will soon be too busy to do both. Best have a contractor lined up.

  3. Agricultural labor of various types: I did not grow up on a farm but my husband did and there are all sorts of outdoor agriculture jobs that need doing and pay a lot more than you might expect. Some of these may be specific to California, but I know for a fact that some of them are not. If you want a side gig to reach FIRE sooner, or are just sick to death of sitting in an office, you should consider some of these.

    A friend of ours also achieved FIRE about two years ago, and word of his hobby of fruit tree pruning and grafting has gotten around. He cannot keep up with demand. Apparently, all sorts of people need this, including people who are moving and want to take parts of the old house or farm with them. He says he could have another business devoted entirely to helping people identify what’s growing in their gardens, labeling it, and telling them how to take care of it. 

    Some friends-of-friends do what’s called contract grazing. They take their sheep to vineyards and orchards to graze weeds down (without more expensive use of mowers, fuel, and humans) and manage fire risk. They do not advertise, add 1,000 sheep/year, and turn down work. Everyone from wealthy folks with large acreage to park districts to farmers wants their services. There are infrastructure costs involved, like livestock trailers and animal shelter, but I believe you could easily start small, with just a few sheep. If you already have a big truck and like livestock, think about it.

    The same friends-of-friends tell us there is a serious shortage of people who shear sheep (they claim to know a woman who quit her day job to shear sheep, as she got 2-4 calls per day without advertising); even fewer people who shear alpacas and llamas; fewer people who trim the hooves of cattle and horses; and fewer people still who can shoe horses (farriers). These are all skilled trades, but achievable with limited, focused training and practice.

    4. Checking in on elders whose kids live out of town. This is a booming side gig and full-time job. There is a whole demographic of people who left home to attend college and grad school, and live elsewhere and make decent amounts of money. They live far away and cannot check in on their parents and/or grandparents as much as they’d like, but they are happy to pay someone else to do so.

    My dad knows a few retired men who do this, in their 60s. Some of them are Vietnam Vets. They, in particular, are very popular with elderly men (some of whom are also Vets). They chat and help out with whatever needs doing: errands, straightening up the house, etc.

    Also, there are terrible options for the delivery of nutritious, homemade food for seniors. If you can do this and do it well, at a reasonable price point, I think you could be very wealthy indeed. We tried to find decent options for my grandparents and none of them were very good at all.

    5. Maintaining grave sites. I could not make it up if I tried. I know a woman who became popular at doing this through a church community and, a few months later, was getting referrals from cemeteries themselves. Many people are elderly and cannot easily travel to or maintain the cemetery sites of loved ones themselves, and/or loved ones live far away and cannot do it themselves. You find out what dates are important to people and how much they want to spend on arrangements, make it happen, and send them photos to confirm. Even a lot of elderly folks have a way to get digital photos these days. 

 

 

ACA, Don’t Go Away: The ACA, FIRE, and Uncertainty

I sat down to write a post about how the ACA — affordable, if not cheap, health insurance — enabled us to retire early, and what its now uncertain future means for our lives and lifestyle. But Dr. Doom already did. Read his post first, then come back here, if desired. Our details are different, but most points of Dr. Doom’s post apply directly to us.

We’re worried about losing access to affordable health insurance, and thus our ability to have our own business and FIRE (in shifting proportions). This lifestyle has another name: freedom. The Republican party has consistently tried to weaken and repeal the ACA legislation since 2010. Those are the facts.

So are these.

Our Situation

  • In mid-2015, my husband and I retired early, at ages 38 and 39.
  • We enrolled in a Blue Cross Blue Shield (BCBS) plan purchased through the Covered California website, our state’s health insurance exchange.
    • Because we voluntarily quit our jobs and were not fired, the insurance company REQUIRED us to purchase our insurance through Covered California. I have never received a satisfactory explanation as to why. BCBS itself sells the exact same plan for the exact same price and, had we been fired, would have sold it to us directly without our needing to use the state exchange. If you think we don’t need the state exchanges the ACA created, because private companies will “just sell” you insurance because of course they’d want to, think again. Wishing doesn’t make it so.
  • We pay $657/month (without subsidy) for a BCBS Bronze PPO plan with an HSA. (An HSA is just a savings account into which pre-tax savings can be deposited. The annual maximum HSA contribution allowed by the IRS, for us, is just over $6,500. Many credit unions offer them.)
  • We have a high deductible plan with a $9,000 annual deductible that, in a normal, healthy, lucky year, we don’t nearly reach.
  • We do not carry dental or vision coverage. We pay out of pocket for annual cleanings and glasses, but we can use our HSA to do so.
  • Our 2015 income was not low enough to qualify us for a subsidy, but our 2016 income will be. We expect to realize some of the $657/month we’ve overpaid as a tax credit/refund for the 2016 tax year.
  • And remember, per the ACA, health insurance premiums for self-employed folks (us) and all dependents are fully deductible on our tax return. This another overlooked, underappreciated aspect of the ACA: It’s awesome for entrepreneurship and driving the growth of small business.
  • We would not have been able to stop working when we did (opening up our jobs for others to take, ahem) without the existence of the ACA. Period.
    • COBRA would have cost us $1,800/month.
    • Similar coverage from a private insurer prior to the enactment of the ACA (which we did look into a few years back, provided they would have actually sold it to us, which is not a given) would have cost almost the same, $1,600/month. Sure, we could work less and run through all of our savings pay for outrageously priced health care, but that’s not the sort of thinking that got us to FIRE, and it sure wouldn’t keep us here for as long as we’d like.
  • The cost of private insurance is only one aspect of this story. The other is about cost control, another woefully underappreciated aspect of the ACA. Insurance premiums go up, right? They rose every single year of our lives, long before the ACA, they rose a little bit this year, and they will rise next year. But! Thanks to the ACA, we are protected from these rises because subsidies rise to cover the difference. As Doom points out, “With private insurance, there is no such guarantee. You are at the mercy of the insurers. If we felt we had to save enough to indefinitely cover indefinitely rising health care costs, we might have been indefinitely working.” Yep.
    • This is just one reason why politicians’ servitude to corporations and their lobbyists is problematic. Corporations want us beholden to and dependent upon them for health insurance. Think about it. These days, health insurance is one of, if not the only, significant advantages they offer over working for yourself. Large corporations have broken the social contract in every other conceivable way: 1) At-will employment means you can be fired at any time for any reason (“or no reason,” as employment paperwork says), so long term employment stability isn’t a perk; 2) They offer no pensions, so you have no incentive to be loyal; 3) They dodge overtime pay laws, etc. etc. Health insurance is all they’ve got to offer, so it stands to reason that corporations would be pretty pissed off at the chinks the ACA made in this last-gasp armor. Their bought-and-paid for representatives have behaved according to plan.
  • In short, the ACA was a key enabler to us finally being able to realize our early retirement and self-employment plans. It’s not perfect, but it’s good, doable, and getting better every year, not worse. This year brought more doctor choices and such, things that made our plan easier to use and more beneficial. Any new product, whether it’s software or a Tesla, a new restaurant or health insurance, tends to improve after its initial release.

In order to continue to not work or, rather, to work less and about as much as we want (this year, that was about 50 hours/month between the two of us) and live frugally (on our usual $32-34,000/year in San Francisco), my husband and I need affordable health care.

President-Elect Trump has promised to “repeal and replace” the ACA, he will be able to do it, and it could really mess up the lives that we have worked very hard to, and been disciplined about, creating. Look. Living on 25-50% of what you make every year, forever, requires at least some discipline and lots of careful, daily choices, even when it’s a solid habit. Having a side job when you’re working 60+ hours week and in grad school part time, just to save a little extra,  doesn’t feel like a real sensible choice when you feel like you could gladly sleep for a year.

But my husband and I chose that. We chose not to buy a LOT of things. And then we chose this. And because this is the U.S., we have this basic, fundamental, possibly archaic and idealistic belief that we should have the basic freedom to live life as we choose. It’s that whole life, liberty, and pursuit of happiness thing. For us, freedom and corporate employment are at odds. Indeed, they are mutually exclusive conditions. We did it, and now we’re done. We hate working in offices. It’s not the President’s job to force us, even indirectly, to work for corporations like his own or those of his kids and friends.

Depending on what actually happens, we’ll probably try to at least stay self-employed, find some sort of coverage, and just work more (an exercise in futility when you don’t NEED to, and would really rather have the work go to other people who do need it, but since our politicians want to create nonsense land now…).

But I digress.

By virtue of living in San Francisco, California, we may have some other options.

California Dreaming

California has a few things going for it, ACA or not:

  • California has the largest economy in the U.S. and the sixth largest in the world. Yes, our state economy is larger than that of most countries. Given this, there is technically no reason we could not have something like Mass Health: Covered California, our state exchange, could provide the foundation for a state-wide health care plan.
    • Note: Starting on Nov. 9, I began to call and email both local and state representatives about this. They have assured me that it is not only possible, but already on their radar given Trump’s election win.
    • I’m not delusional. As it’s currently configured, California replacing federal subsidies would be a stretch, and a huge bite out of our state’s $122.5 billion general fund budget. It’s more likely that California would try to maintain access to coverage (the Covered California marketplace) and consumer protections (lifetime spending caps, fair prices for women, no discrimination based on pre-existing conditions).
    • But California has a strong incentive to have some sort of state-based plan, long term. Remember, people without health insurance are forced to seek care for free in emergency rooms, which are legally obligated to treat them. These hospitals pass the costs on to others, including insured patients, insurance companies and… the state itself.
  • We have Kaiser as a back stop. Kaiser is great for a lot of reasons, but I do not want it. Still, it beats having no health insurance at all. A monthly plan from Kaiser would cost exactly what we pay now, but offer much less. We would be bound to the Kaiser system, the out-of-state coverage sucks and is complicated (and I need out-of-state coverage, given the travel and type of work I do across state lines), and we would have to leave all our doctors and nurse practitioners of 10+ years, which we are loath to do (and do not feel we should be required to do, just because Republicans are feeling destructive).
  • Healthy San Francisco could make a comeback. The city of San Francisco offered universal health care to its residents in the form of Healthy San Francisco, for years before the ACA and Covered California. Since Covered California launched, people who were in Healthy San Francisco and eligible had to get coverage via Covered California instead. Healthy San Francisco still exists, though, for very poor people. Local representatives have assured me that Healthy San Francisco could, if necessary, be spun up to its former glory once again. For what it’s worth, Healthy San Francisco was very well regarded by those who were on it.

Aside: I Miss Old-School Republicans

It’s a pity that Mitt Romney does not take greater credit for all the lives he has saved via Mass Health, the state health plan in Massachusetts. If I were you, Mitt, I’d be singing those saved-life stories from the rooftops (and, to Republicans, would point out how many folks were still able to work and not dependent on taxpayer support because their health problems were treated and controlled).

If Romney had owned that success and the Republicans had taken it up as a mantle of their own, I think the GOP of today would be a completely different party, and one with much broader support and a lot less crazy.

Today’s Republican party, by contrast, no longer even pretends to represent the interests of fiscal sanity, small business owners, entrepreneurs, or folks who actually did what the GOP (used to) say to do. Many Mustachian types have struggled, worked intensely, lived very frugally, and saved our money. Now, however, the Republican party represents large corporations and only certain kinds of wealthy folks: They’ve disowned and shunned the millionaires next door in favor of Wall St. financiers and debt-dependent types like Trump and his ilk. With over $1 million to our names, a paid-off house, and self-employment income still coming in, we consider ourselves well off, but today’s GOP does not.

I miss that old school Republican party, I genuinely do. I’ve been a registered Independent most of my life, aside from a few party-specific registrations required in some states in order to vote in primaries. As a woman with more than a lick of sense, I have voted Democrat much of the time, but not always, especially 15 or so years ago.

In local and state elections at least, I loved that it was often difficult to decide who deserved my vote. Once upon a time, it wasn’t unusual for one or more parties to have one or more really solid, compelling candidates on the ballot, and sometimes I voted Republican. Prior to the great dissolution of actual small government values brought on by Bush II, 9/11, FISA, Homeland Security, and the TSA (I’m still WTF about all that), the Republicans were often strong on privacy and against surveillance; strong on education and unafraid to look and speak intelligently in public (something about a thousand points of light in here); as hunters and farmers, strong on the health of the Great Lakes, wilderness areas, and many aspects of the EPA (I worked on Superfund projects that had tremendous Republican support, for instance); and myriad other things.

It’s not for me to decide what the hell happened to Republicans. I am only sorry it has. They’ve cast their lot.