Our Financial Situation as of July 1st (Or: Wow, These Muscle Relaxants Are Good Craic!)

A bit late this month, but yr pill-addled correspondent greets you from the lovely coastal village of Ballinspittle in southern Ireland.

Sadly, Ireland is suffering through its worst drought in fifty years. What you and I might think of as the island’s normal dismal weather has been blown clean to Iceland by a high pressure zone over the Azores, roasting this “emerald isle” to more of an agate-brown. Watering bans are actually in effect. I shite ye not.

We try to keep in mind that while this weather makes for excellent tourism, it also makes for TERRIBLE agriculture. Food prices are already forecast to soar. Frankly I’d welcome the return of the dreary weather because these people are great and I hate to see them suffer. If you know anything about Irish history, you know they’ve suffered enough.1

But I said I was “pill-addled.” Thirty-one hours ago I was out for my morning run along a sheep-strewn lane, intending to do a little trail-running in a pasture not far from our cottage, but I was suddenly ambushed by a pothole four inches in depth, and the ensuing misstep compressed my spine into essentially a stack of Pringles chips—or “crisps” as they call them here2—which forced me to gimp back to the cottage and eat…

To eat what? Well, for reasons that were never voiced aloud, several months ago my general practitioner wrote me a scrip for thirty military-grade muscle relaxers. When I finally got back to our rented cottage I washed a couple of the bad boys down with a Guinness and eased myself to the wonderfully flat & hard pine floor and elevated my legs until I was once again able to breathe without gasping.

And now I slump in golden-hazed agony on our cottage’s front porch—pic attached—figuring that since I’m forced to take a day off from our month-long tour I might as well get some work done. So here’s the monthly report on our finances.

You people are great too.


Our net worth has hovered between $2.4 million and $2.5 million for months now, which is understandable given that 1) we just paid $7K in cash for a 2009 Honda Odyssey minivan, 2) this spring we withdrew a couple of thousand bucks from our “vacation fund”—more on that in a second—to pay for this Ireland trip, and 3) we continue to roughly meet our $4,100 monthly budget.

The van. My wife drives our 2014 Prius and until recently I’ve driven our 1999 Ford Ranger. The Ranger’s been a great work truck, and while the body’s banged up it’s only got 138K on the engine. So I could in theory run it until 250K miles or more. But as a father/chauffeur and as a guy who likes to take multi-week road trips to the desert southwest, a mini-van’s a much more practical vehicle for us.

I could bore you with the sensible way we located and bought our new-to-us one, but I’d rather tell you this. A buddy of mine wisecracked that I oughtta turn in my man-card since driving a mini-van makes me Mr. Mom…but I gave him a stern ironical look and said, “Hey, I’ll tell you what: I’ll spend Monday driving back and forth in front of your office window and you can tell me whether you’d rather be driving a mini-van or a desk.”

Victory.

Now: I expect to get $2,500 to $3K for the Ranger once I get back to the US. So when you net it out…well, yeah, call it $5K for the van. Again, we feel like it’s an excellent deal.

But here’s a pro-tip about buying used cars: assume that unless the owner can produce the paperwork, the long-term maintenance hasn’t been done. Then do it.

At 130K our Odyssey was at the age for a timing belt replacement, so we shelled out for it…and during the pre-purchase mechanical inspection we discovered that the van needed new brakes. And after another round of negotiation with the owner, we took care of both. The two jobs cost us another $750-ish out-of-pocket, but the van’s now as solid as Bruce the Immortal Hamster and we expect to get at least 100K more miles out of it. A net of $5K for 100K miles’ use of a highly practical vehicle ain’t bad. And the insurance is cheap, too.

However, this has NOT been an expense we budgeted for, meaning here’s a benefit of withdrawing less than the theoretical 4% from your principal for living experiences. If you consider that we’re withdrawing in the neighborhood of $50K from our principal of $2,058,453, even a $75K withdrawal would still only be 3.6%. .4% is a nice buffer.

The vacation fund. We keep an imaginary pot of money earmarked for trips. Each month I deduct $200 from our monthly budget and set it aside for travel. While we’re now spending it and therefore taking it out of our principal, it doesn’t represent a violation of our withdrawal target. And when you consider that we’ve been able to finance a great deal of the trip by churning, it’s even better a method for travel saving.

And so: a lot of people don’t like the idea of keeping imaginary asset accounts, but I’ve gotta say that I’ve never understood why. It’s simple mental accounting; much like you’d throw your change in a jar and forget about it until you found yourself a little short at the end of the month. Maybe you have some insight for me? Leave it in the comments.

And…the monthly budget. We continue to meet it.

So that’s why the apparent stagnation of our net worth isn’t stagnation at all. What you have to remember is that when you’re living on savings, a flat slope to your asset growth curve doesn’t mean what it seems. You’re actually making money; it’s just that you’re spending it as fast as you make it. And while I guess most people would say that’s a bad thing, it’s not so bad in the context of early retirement.

So with all that said, I leave you with an ancient Irish blessing: “May the road rise to meet your face.” And rest assured that if I take any more of these sledgehammer-strong muscle relaxants, this keyboard is gonna rise up to meet miqpfo98iah’cnlak

Footnotes

  1. On the subject of suffering: did you see in the papers that a certain baboon’s arse just had to be reminded that Ireland isn’t part of the United Kingdom? Despite owning golf courses in both countries?
  2. You can search the length and breadth of Ireland for frozen french fries and never find a one. “Oven chips,” however, lurk in every grocery store freezer. Speaking of which, did you know that while beer is plentiful in Ireland, coolers and bags of ice are next to impossible to buy? Bunch of Celtic savages, if you ask me. But again, they’re great.

Author: ER Dude

Sick of your job? After a thirteen-year career, Early Retirement Dude fled corporate America for good. You can do it too! Visit http://EarlyRetirementDude.com or email EarlyRetirementDude@gmail.com.

7 thoughts

  1. Welcome to the minivan club, Dude! I love ours to the extent one can love a minivan. It handles better than an SUV but it’s no zippy Honda Civic. But wow boy howdy at all the crap I can haul. We all bought bikes recently and now I can toss his and hers bikes in the back of it and make a day trip with the Mrs. while the kids are in school. Or haul my daughters and 3-4 of their friends around as needed. Or a life size play castle. Or drive to Florida with the five of us plus my mom, and the interior space is basically business class if we were flying.

    Hope those pills make your back better. That’s why I walk everywhere instead of run. Though I did suffer 2 (!!) walking related injuries this spring! WTF is that all about – I’m not even 40 yet! 😉

  2. Coincidentally reading this while my earplugs are channeling music into my ears from my favorite Celtic punk playlist 🙂 Ireland is on my bucket list for a long time now. I have plans for a country road trip just have to wait a couple of more years before my daughters will be old enough to enjoy the experience as much as we would. This year our weather here in Europe is pretty chaotic. My area is dominated by agriculture also and was facing similar problems in recent years. This year there was heavy rains and storms at our ends, not any better.
    Enjoy your time in the “UK” and wishing betterment for your spine…
    “May you find what you’re seeking wherever you roam.”

  3. Good article. It looks like you are using personal capital to track your assets – I know how to create asset accounts, like your vacation fund account, and how to assign it a value, but how do you then virtually take the money out of your bank account so it doesn’t show up there (even though it’s still really in your bank account) since they are linked? I would like to do something like you have done but I can’t figure out how to do it without double counting the money in my bank account and in my vacation fund account. Thanks in advance!

    1. >how do you then virtually take the money out of your bank account so it doesn’t show up there

      That’s…wow. You’re SO right. I’ve been double-counting the $$$ in my net worth. That said, a couple of thousand bucks is “noise” in our daily mark-to-market (although let me clarify I absolutely agree $2,000 is a lot of money.) Also, I don’t pay that much attention to our net worth number. The vacation fund’s more about the monthly budget than the total net worth. Micro rather than macro.

      But our monthly budget exercise is based on a spreadsheet I concocted, about which I should probably make a post.

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