Every month I share a quick recap of what happened over the last 31 days. In these posts, I share a bunch of details – what’s going on in my life, progress towards goals I’m working on, a breakdown of our spending over the last month and a look at our investments.
I absolutely love reading this kind of insight for others. It was one of the things that started to make it clear how people go about retiring early, what they focus their time on and how investing changing over time. My hope is that others will get equal value from my takeaways.
- What’s new with me?
- Goals and progress update
- Spending, income, and expenses
- Current investments
- What’s next?
I learn a lot about myself through journaling. Taking time to put into words how things are going and reflecting on them helps to focus my thoughts and make sure I’m working towards what matters most. If you write something similar each month, feel free to share it in the comments – I love reading them.
Here’s a look at some previous updates:
- April 2019 Update
- March 2019 Update
- 2018 Q4 Winter Investment Report
- 2018 Q3 Fall Investment Report
- 2018 Q2 Summer Investment Report
- 2018 Q1 Spring Investment Report
- 2017 Q4 Winter Investment Report
- 2017 Q3 Fall Investment Report
Since leaving my job at the end of 2018, I took 2 months off, then started writing these monthly. Here’s a look at what I’ve been up to!
1. What’s New With Me?
May was a crazy fun month. I spent more time outdoors this month than any since I was a little kid playing in the street – and loved it! This included:
- A 4-night trip to Yellowstone National Park
- An overnight backpacking trip camping with friends
- 16 runs around Salt Lake – including a few with some serious elevation
- 11 hikes, with 6 all over 5 miles each.
Being outside was absolutely the theme for the month. It snowed on May 1st, but after that, it’s been cool, and perfect for outside time. The snowpack around at Salt Lake City is at 466% of its usual amount – meaning it was an AMAZING snow season.
The downside of great ski season is a shorter than usual hiking season – with some trails not opening until July. The mountain trails specifically may not even open until August! Even though some trails aren’t open yet, there is no shortage of places to explore!
We scheduled a trip to Yellowstone for my birthday 1 year ago – right after we got back from our first trip to Zion. If you are going to Yellowstone, you’ll want to plan waaaay ahead of time if you want to stay in the park. We stayed at the Old Faithful Inn, a log cabin built in 1903 that is still standing.
We drove the 7 hours there, going through Grand Teton National Park on the way up. I was absolutely in awe of how beautiful Teton was – it’s worth the detour if you’re in the area. While Yellowstone is great for animals, hiking and geothermal features (hot liquids), Grand Teton is more awe-inspiring.
If you do decide to stay in the park, there are three things to keep in mind:
- Book early. You’ll want to reserve your spot 12 months ahead of time.
- Become a Yellowstone Member. If you become a Yellowstone Forever Member for $35/yr, you can save 20% on your hotel stay. Since hotels typically run $300+ a night, that can save you $250 on a weekend stay!
- No cell service. There’s no cellular service or wifi in most of the park. Plan to be offline! If you want cell service, you’ll want to stay outside the park.
- It takes a while to get anywhere. If you stay at the Old Faithful Inn or other places in the park, you’ll be closer to nature, but you’ll still need to drive a long way to see anything (potentially hours in your car).
- Go early to avoid crowds, or mid-summer to see the most animals. Pick your battles here. We went the week before Memorial Day weekend, which had low crowds, open roads, and little traffic. A number of trails weren’t open yet due to snow or bear activity.
Overall Yellowstone was great to see, and unique experience. It feels like going back in time and exploring America’s first National Park.
One of the highlights from our trip was waking up at 3:30 AM and driving up to Lamar Valley on the north side of the park. Lamar Valley is nicknamed “America’s Serengeti” – and for good reason! On our drive up we saw Bison using the roads to navigate during the night, herds of elk having their breakfast at dawn and a bear chowing down while a coyote waited for leftovers. The main highlight though: wolves hunting.
Since wolves were reintroduced to the park in 1990, they’ve helped the park return to a more natural equilibrium. There are even wolf tours that take people out to see them (something we lucked into – saving $660!).
We drove by a group of cars stopped and got out to see what was up. Keep in mind this is at 7 AM and it was still dark and slightly rainy out. What we found was a wide valley where we could see for miles in every direction up and down a savannah.
In the distance, we spotted a group of 5 wolves chasing down a herd of elk. The elk herd was changing direction in unison and outrunning the small group of wolves. The wolves changed their target and started sneaking up a herd of a few dozen bison – trying to scare them into splitting up away from their young.
We continued watching them try to antagonize the group, only to be scared off, then try again. Our hearts were in our throats watching, knowing this was nature, but not wanting to watch a baby bison die in front of us. The groups seemed at a stalemate, and we left without seeing that (which were OK with).
Hiking and Camping
Now that the snow has started melting, I’ve challenged myself with going on at least one hike every week. I love setting out on a 5-7 mile hike, putting in my AirPods and listening to an audiobook (usually downloaded for free from Libby). I went on more hikes than these (below), but here are some of my favorites. Pictures can’t do them justice (but I’ll try).
Black Mountain (9 miles) – This is a mostly uncovered trail that I was fortunate to do on an overcast day. I ended up turning around less than 100m from the summit. The last part involved some bouldering, with cliffs on both sides – which was too dangerous to do alone in the snow.
Thayne Canyon Trail (5.6 miles) – A beautiful trail with some serious elevation gain (4,000 ft for the full trail). It was a little too early in the season for this trail, and I ended up needing snowshoes to get any farther up. I did spot a number of mountain lion and bear tracks which gave me even more reason to turn around. I’ll give this one another shot once the snow melts.
Fifth Water Hot Springs Trail (5 miles) – Mrs. Minafi and a friend of ours headed to this famous Utah trail. It’s a heavily trafficked trail that leads to a hot spring you can hang out in! We came prepared and enjoyed a good hot soak before the relatively flat walk back.
Adam’s Canyon Trail (5 miles) – Aaron from Personal Finance for Beginners tackled this trail together. It’s actually the first ever hike I did in Utah and still one of my favorites. The trail follows a creek, but due to the snowmelt, it was a raging river now. We waded through cold water to make it view the falls.
Grove Creek and Battle Creek Loop Trail (10.5 miles over 2 days) – This was my first ever overnight backtracking trip where we camped! Me and two friends went on this trip and found one of the most beautiful locations to camp I’ve ever seen. We camped in a meadow, between two creeks with a view of the city and lake on one side and the mountains on the other side. Add to that a great fire pit and cell service!
To prepare for this trip I recently started reading and watching everything I could about backpacking. Our household YouTube account now thinks I’m quite the outdoorsman. The Ultralight Subreddit was a huge help, as were some knowledgeable friends.
Ultralight backpacking feels like backpacking for minimalists – bringing exactly what you need and nothing more. Add to that optimized, lightweight gear that makes carrying it easier on long stretches. It’s can be an EXPENSIVE upgrade to buy the light version of the same gear. I’m still working through this, but aiming to buy gear I can hike with our car camp with whenever possible – even if it’s not the lightest version out there.
In the end, my pack ended up weighing 31 lbs – which included 2.25 L of water and a liter of wine (of course). The biggest parts of my setup included:
- Osprey Atmos AG 50 Pack – M – Men’s – This is the perfect bag for me. If you’re new and shopping for a bag, I’d recommend getting your pack last and making sure it’ll fit all your stuff. Also, go to REI (or your local store) and get a fitting! That helped get just the right fit for my height and body size. You can even bring all your stuff with you and make sure it all fits in the bag before buying it.
- Kelty Teton 2 Two-Person Tent – We bought this tent years ago for both of us. It works well as a large 1-person tent too! At 4 lbs it’s relatively heavy for a single person, but for a few days of hiking, it’s well worth it.
- Sleeping Bag – I used an old sleeping bag we bought without any research and that was a huge mistake! It was a warm weather sleeping bag that didn’t keep me warm at all. I’ll almost surely upgrade this to a down sleeping bag rated for colder weather before our next trip.
- Therm-a-Rest NeoAir XTherm Ultralight Backpacking Air Mattress – When I was a kid camping, we never used air mattresses. We just put our sleeping bags on the floor of the tent. There’s actually a much better way! Get a sleeping pad for a better nights rest and helping to keep you warn.
- Sea to Summit Aeros Ultralight Pillow – A tiny blow-up pillow with a fabric texture to it. It packs up to about the size of a D battery!
- MSR WindBurner Stove System – This portable stove system makes boiling water easy and quick. It’s not as lightweight as some other options, but we plan to use this same setup when car camping.
It was a great learning experience too. There were a few, errr, mistakes I made that didn’t help. I pitched my tent on an incline (leading me to roll all night). I let a friend borrow my stove and we ended up setting it up wrong – burning the plastic cup in the process. I didn’t pack warm enough, which led to the coldest night of my life. All things to improve on for next time.
I’m looking forward to going out again next month where I’ll be much more prepared!
2. Goals and Progress Update
I’ve tried moving my goals into a spreadsheet recently to help better understand and track them. I’m always changing up how I do this. Staying with the same system always has diminishing returns for me, so I imagine it’ll only be a matter of time before I adjust this again.
There’s way more on here than I’ll go over in this post. There are a few areas that are taking up the most time:
1. Run a Marathon
I’ve said it before but I’ll say it again: I’ve never considered myself a runner. I’m short, a little bulky with more of a lifters build. Before this year, the longest distance I ever ran was 5 kilometers as part of race.
Since I left my job almost 6 months ago, I’ve been trying to figure out what kind of fitness program to follow. I used to go to CrossFit 3-4 times a week and do yoga at work weekly. Since leaving, I’ve tried working out in our apartment gym, doing bodyweight workouts (pushups, squats and pull ups).
What I realized what that I needed a bigger goal to motivate me, so I decided to train for a marathon. Growing my endurance from 3 miles to 26 miles isn’t going to happen overnight. So far I’ve been running 4x a week in distances between 3 miles and 8 miles at alternating paces.
What’s been surprisingly helpful is running up hills. There’s an amazing trail close to our apartment that goes straight up a pedestrian road into the mountain. It’s a beautiful run, with partial shade, a creek alongside and the occasional water fountain.
I’ve gone about 14km on this trail and back, and there’s at least enough space to do a half marathon here. The only downside is that the first 7 miles would be uphill with 1,200 ft of elevation gain.
Running up hills has made running on the flat ground seem easy in comparison. I ran a 10km flat run this week at a 6 min/km pace and felt like I could keep going another hour!
I’m not going to be setting any running records, but I’ve loved seeing improvement on something.
2. Learn Japanese
Earlier this month I wrote about the last gift my mom ever gave me – cash for a trip to Japan. We’ve been there twice already, and would love to go back for an extended stay sometime. Learning a little Japanese should make that trip more fun!
I’m still continuing Duolingo, taking a session every day. If (or when) we have a trip planned I’ll likely dial up the lessons, but for now it’s been the right amount. I’ve recently started adding Memrise to the mix too, which has been surprisingly fun! Jim from Route to Retire is also using Memrise to help learn Spanish for his move to Panama (thanks for the tip!).
My approach has been simple: do a lesson every day. If I’m unsure of what something means, write it down in my learning journal. That act of concentrating on a word for those additional few seconds helps me to drive in a topic.
3. Continue Work on Minafi
Minafi continues to be a fun side project – even though it costs quite a bit to run. I’ve been thinking a lot about the role I want Minafi to play in my life going forward. For blogs and sites like this, it usually falls into some combination of a few reasons:
- To make money
- As a creative outlet
- To influence, teach or help
- To prove to myself I can reproduce success
That last one is especially common for people who achieve something. Athletes that win a championship want to reproduce the results, business owners start a new business immediately after selling their last one, tennis coaches that lead teams to do well want to repeat – you get the idea.
To my surprise, my “need to reproduce success” has already started to decline since leaving my job 6 months ago. When I left, the drive to prove this wasn’t a fluke (mostly to myself) was strong.
Now though, the “creative outlet” and “influence/teach” parts have grown to be the most important reasons to work. That’s a major help in focusing on what I work on.
One of the things that helped the most was spending that long weekend in Yellowstone without internet access. That time to think gave more time to think the bigger picture on what I want to do here. It comes down to two things:
- Share my personal journey to FI and after.
- Enliven the experience of learning about investing and personal finance.
Anything else I do is noise getting in the way. Having that focus helps me understand what I should focus on for any given day.
3. Spending, Income and Expenses
Our spending for May was the highest yet for the year at $8,418. Whenever I read spending reports by Root of Good spending $1,500 a month, or so many others spending less I get a little self-conscience about our high spending for 2 people. Here’s a breakdown of where all that money is going:
The biggest reasons for our high spending come down to a few specific things:
$2,116.69 for Home: Rent, parking, storage space, insurance, media package, insurance, utilities – Everything needed to live in our apartment. We prefer to live in an apartment, even though this would be significantly cheaper if we owned a house.
$2,299.37 in Travel: We went all out on our trip to Yellowstone staying at The Old Faithful Inn. This place is AMAZING and if you ever get a chance you should try staying here for a night or two. We spent nights sitting around the open great room, listening to live music and reading close to the fire. Without internet available, our options were limited – but in good ways. We also picked up tickets for Sleep No More for our New York next month that we’re excited (and slightly scared) to go to.
$889 in Sporting Goods: Backpacking is expensive! I picked up a bunch of gear (mentioned earlier in this post) and now I’m mostly set for backpacking. I’ll likely replace my sleeping bag before the next trip, but other than that I’m in a good spot gear-wise. The next step will be getting some backpacking gear for Mrs. Minafi. After that, we should be able to go on a small group backpacking trip!
$1,032.58 in Food: This includes restaurants and groceries while not traveling or camping (I consider food while traveling a travel expense unless it’s what we’d make at home). That’s about $18/day in food while not traveling for the two of us – which sounds much more respectable. Still no $2/day, but not too shabby.
$516 in Pets: Between boarding Lily for our Yellowstone trip, grooming, food and an emergency vet visit (she’s OK now!) it was an expensive month. We’re just glad she’s doing well now. At 10 years old, she’s getting up there in age, so we’re not taking any chances.
The total sum between housing, travel, camping food and pets was $6,674 for the month right there.
There’s room for improvement in the rest of our budget for sure, but I think it’s most important to look at the big things first. Our big thing here is the combined $3,000 for travel & camping gear. While this is a big expense, it will enable to spend a LOT less in the future on trips around the west.
We’re aiming to visit more National Parks – Arches, Canyonlands, Bryce Canyon, Grand Canyon, Yosemite – all within a days drive. For all of these sites, we’ll be able to camp and pay quite a bit less than we did on our Yellowstone trip.
Our spending for this month, if you include Mrs. Minafi’s income would have us on track for a 2.50% withdrawal rate. Without Mrs. Minafi’s income, it’d be a 4.69% WR – waaay too high for sustainability.
This does raise a flag for two things: when she stops working we’ll need to have a bit more money saved or spend less. This is looking at one month rather than the year a whole. Our spending has averaged about $7,300/mo, or on pace for $87,000. A bit high for our $2,152,730.19 saved, which would enable about $86,109.20 @ 4% or $75,345.55 @ 3.5%.
I’d feel much more confident if our spending was in line to hit $70,000 + another $5k or so for health insurance.
4. Current Investments
In May I made the security-driven decision to unlink my Personal Capital account from my Vanguard account. This wasn’t because of an issue on Personal Capital’s side, but instead a limitation of Vanguards security. I’d highly recommend you perform your own security audit and see if you can secure our investment accounts to their fullest.
Personal Capital allows you to add all of your investments manually too – providing the stock ticker, market sector and the number of shares you have. It’ll continue to chart your net worth even without needing access to your accounts. It’s a slick system!
I’m still a ways off from my ideal asset allocations. With about 34% of my investments in bonds and cash, this is highly conservative for us right now.
Ideally, I’d like for this to be even more conservative, but that would require taking a pretty serious tax-hit since we’ve already sold over $400,000 in investments in 2019. After selling a lot of that stock, I ended up putting a LOT back into the market ASAP after the December drop – it seemed like a good buying time. That worked out but at the cost of my ideal allocation.
As far as individual funds go, I try to keep as simple as I can:
- US Stocks – $VTSAX – Vanguard Total US Stock Market
- International – $VTIAX – Vanguard International Markets
- Bonds – $VBTLX – Vanguard Total Bond Fund
If I could I’d be completely in just these three funds, but it doesn’t quite work out that way. My 401k doesn’t have $VTSAX and I have existing funds I bought years ago in brokerage accounts that would have tax implications to sell.
I’m quite a way under on the international funds target due to their poor performance lately, but other than that things are looking good.
Others more into the actuarial tables could likely do better at asset allocation, but here’s a look at what ours is aiming to be over time:
As you see, this gets much more conservative right around retirement, then goes more aggressive. This bond tent idea isn’t new. Figuring out what percent to be in stocks vs bonds going forward is still something I’m trying to figure out.
I’m defining bonds as bonds + cash here, where I want to keep 3 years of cash expenses at year 0. After that, the plan is to be flexible with cash. Sell as much as we can every year to take advantage of a lower tax rate, and buy back in when we can.
This also doesn’t take into account the Cape Shiller Index. The Cape Shiller Index is a measurement of the stock affordability based on the price and earnings of companies.
It is defined as price divided by the average of ten years of earnings, adjusted for inflation.Cyclically adjusted price-to-earnings ratio on Wikipedia
In other words, it’s a measure of earnings companies make relative to the price of a stock. If this ratio is high, it means that stocks are overvalued – people are paying more for fewer earnings. That’s a sign that maybe something is wrong.
If this is low, it can mean that stocks are “cheap” and it’s a good opportunity to buy.
This is no perfect science, but one of the many measurements to watch. A high CAPE doesn’t mean stocks will fall. For me though it does give pause and is one more reason to make sure my portfolio is property diversified into bonds and cash.
So what does the CAPE look like today?
The three most memorable recessions: 1929, 2000 and 2008 are indicated here by their massive drops immediately after. Those were times when the value of stocks dropped, which meant that the earnings to price ratio went down.
In late last year, the CAPE was higher than during the 1929 Great Depression. It’s since gone down slightly but still is higher than any other time than the Dot Com boom and 1929.
What does this mean? Hell if I know. In the 1920s there were stories about people being concerned because the people shining their shoes were giving stock advice. The same could be said for anyone watching a news show in the late 1990s and anyone writing a blog today (personally guilty).
The important part is to invest within your risk tolerance. One of the core principles of stoicism is the idea of negative visualizations. If in the next week there was another great recession, would you be in a good place? Or would you need to sell and adjust assets? By creating a portfolio in your risk tolerance, you can set yourself up to sleep better at night.
Use the high CAPE as a reminder that things could go epically wrong, and that you’re investing for the next 50 years – not for the next 3 months.
5. What’s Next?
June should be a mostly quiet month here at home. We have a few things lined up: a trip to New York, a camping trip with friends and at least one backpacking trip.
Add to that more running with the goal of completing a half-marathon in June! I’d like to run it under 2 hours, but we’ll see how it goes. Just completing a 13-mile run would be the longest in my life, which is exciting by itself.
I took most of May off from working on much here on Minafi (other than writing a little). In June I’m aiming to continue writing an article a week and starting work on my next bigger project – An Interactive Guide to Investing! This is an idea I’ve been wanting to do for a while. Now that Minafi V2 is out, I have a good base for building it! I’m not setting a timeline for when I’d like to complete it, but I would like to work on it this month.
So that’s about it: spending time outside, working on a new interactive project and a little travel!
How was your May? Did you get outside, or explore? What do you have planned for June?
2 CommentsWhy not add to the conversation below? Your voice is welcome!
June 7, 2019
I dont see from your description you are in a FI (financially independent) situation. It sounds more like a single-income household where you are spending the majority of the current income stream rather than investing it.
The decision to RE (retire-early) may have increased financial risk since your household no longer has redundant income streams. It will be increasingly difficult if not impossible for you to restart your career due to ageism and/or a gap in your resume.
Your time-horizons are a bit “messed-up”. You are looking at a 40+ year dual-lifetime retirement. Foregoing 40+ years of compound market returns by having a substantial part of your portfolio in bonds sounds like a bad decision. Also seq-of-returns risk is not particularly relevant unless you need to liquidate your portfolio. You shouldn’t need to do that unless: you burn through your cash reserves and/or you lose your wife’s income stream. Rather than using the 4% rule (which is based on not running out of money (meaning zero $s) during a 20yr timeframe) you might want to use some form of dynamic budgeting based on the size of your cash reserves and your prior year investment results.
Buying a house is a dubious decision financially. There are all sorts of costs beyond the mortgage and closing costs such as insurance including flood/earthquake, taxes, evil-HOA fees, maitenance (lawns, repairs, utilities, landscaping) and buying multiple roomfulls of furniture. You’ll also need to raid your cash reserves and/or liquidate part of your portfolio. Neither alternative is palitable in your current situation. The appreciation you may (or may not) get after multiple years in the home is tiedup until you sell the home. At that point what would be next, move back to a rental?
It sounds like you are in a phase of lifestyle inflation which is a bit of an anathema to FIRE. It will be difficult for your household to get the financial genie to go back in the bottle so to speak.
Apologies for the tough-love here. Maybe you and the Mrs. should sit down with a CFP to get an independent assesment of your finances.
June 7, 2019
Hey Joe! Thanks for the feedback. Always appreciate an honest take. Sometimes because it’s well deserved and sometimes because it helps understand what areas I’m not writing enough about for people to get enough facts.
If by this you mean “with your current expenses, plus expected future expenses there’s a less than 90% chance your current investments will outlast your life expectancy”, then I think you’re right! One thing about this year is to understand how our spending changes with one of us not working. Does it go up? Does it go down? That’ll impact how much we need to save.
This is definitely true. I doubt I could get a job at the income level I had before ($200k+ w/bonuses, ESPP, stock options, etc). I also wouldn’t want to work that hard again either. This is something I’m not at all worried about though, mostly because of my professional area (web programming, teaching). It’s something I can do remotely, or locally too, which is nice. I’m staying up to date with my field by continuing to do things here on Minafi too. That’s more for fun and because I want to build things, but it has the advantage of reducing a resume gap in the event of a major market downturn.
That’s a good point on the seq-of-return risks for when you don’t need to liquidate. The main reasons to liquidate right now are if taxes are more than we thought, or if Mrs. Minafi decides to retire. In that case though, we still have cash 2x even after taxes. For a situation like I’m in (with one person working) how much would you have in cash/bonds?
100% agree on this one. There are soooo many hidden costs to buying a house that I wasn’t expecting. I’d love to never own one again. Honestly if I did own one I wouldn’t be opposed to paying a property management company to manage the house I was in, and coordinate all fixes on it, but that’s not financially sound compared to just renting.
This is one of my biggest concerns for sure. Putting the spending genie back in the bottle may be harder than I expect. Part of this year with me not working is to understand how that impacts household spending. If it goes up then that’s a big red flag. If it goes down, then great! Hopefully that’ll mean it goes down more when Mrs. Minafi retires.
Definitely open to this. We’ve talked with a number of advisors in the past, and it has n’t proven too useful though. Maybe we’ve just been unlucky in who we talk to.