Sixty Days to Six Figures: Day 20

The Hype Cycle

Plowing Through the Trough of Disillusionment

So we’re one-third of the way through our goal. I haven’t been filling out as many job applications that I should have, and my efforts to increase my consultancy are proving more challenging than I anticipated. I am, however, determined to keep increasing my output and leveraging what I can to keep moving forward and making small improvements.

LinkedIn and the Job Search

I still haven’t figured out what to do with LinkedIn. The job search is good enough, and the skill insights which rank me among the other applications is useful, I think. It’s helping me target a bit better, and figure out which skills I’ll need to focus on in the future. There’s still a incongruity between what’s on my profile, and the kind of jobs I’m looking for. I guess that reflects a similar disconnect between what I want and what I need.

My hope was to find just one good job a day, write a quick cover letter during the application process and wait for callbacks. To this point I’ve applied to about six, and nothing back yet. Obviously, this is going to be harder than simply attaching a bachelors’ degree to my name. One thing that was a bit of a surprise to me is that LI’s Fast Apply feature doesn’t allow you to do anything other than attach a resume, which is not ideal from an application standpoint. So it looks like I’ll have to go through the additional step of creating a new PDF for each application. Ideally, I’d be updating my resume for each type of job that I want anyways, one for CTO/management jobs, one for programming and development, and another for data scientist jobs. It seems overwhelming, but all I have to do is take baby steps. One percent in the right direction each day.

What I have not figured out yet, though, is how to use my wall to engage people. I still haven’t posted anything since my graduation announcement, as I’m not sure what direction to take. Choice paralysis, perhaps? I think I’m being overly cautious and worried about Boss taking some action, but that paranoia perhaps. I could share linkbait, posts from others, or I could try my hand at writing long-form content weekly. We shall see.

Day job: Zombie, LLC

Boss sent me a message yesterday. “I’ve got bad news, call me.” He didn’t pick up. I got another message about increasing our seats under management by x. I had some urgent help tickets to deal with, so I didn’t try calling or messaging him back, and he didn’t even try to respond back to me. I can’t wait for this morning’s lead off meeting.

I really should be frank with Boss, but I’m not sure what I should expect out of it. The company is too small for him to furlough anyone on the team, he’d be dead in the water. Our clients are dropping like flies, leads are sparse and competition in the area is dense. I’ve tried to start focusing on business process automation, but my ideas haven’t been received well.

I don’t even know if being able to continue my employment should be perceived as a good thing or a bad one. Obviously getting a salary for the amount of work that I actually do is great, but part of me thinks that having it is a crutch and is holding me back. Boss has told me that we’re in no danger of going under, but there’s an upside if we do: unemployment, for one, plus the possibility of going independent with our larger clients. There’s a lot to unpack for the latter case there and I’ll save that for when the time comes.

Consultancy

A call with a third customer didn’t go quite the way I had hoped. No commitment. They can’t pay me until they can scale, and they can’t scale until they have some improved automation. Instead of developing a Django app, it looks like we’ll be rolling out a hundred dollar WordPress plugin. Que sera.

I told another client about the old saying usually seen in mechanic’s garages: “you can have it done fast, cheap, or good. Pick two.” I told them that we are moving in the cheap and good area right now, and that if they wanted to move faster we’d have to bring in some help. It looks like we may be moving in that direction with one of our projects. I’ve got enough experience to manage several WordPress sites and help with some configuration stuff, but I don’t know anywhere near enough about SEO and theming a site that they’re going to need to move quickly. So I recommended that we engage a marketing firm to help with strategic vision and a laundry list of related to-do items that they came up with. I’m actually looking forward to it, since it will benefit the client and if the vendor is good we may be able to establish a good relationship moving forward.


So we’re one third of the way there, and it seems like no result yet. That’s fine, as I know that it may be a while before we see results. I’m still reading Atomic Habits, and I know that these steps I’m taking will be come habits, and the results will compound. Right now I’m focused on refining my environment to make success inevitable. The results will come.

Freakanomics and Atomic Habits

Mini-reviews of two good books

Yesterday was rough. I must have taken three naps throughout the day, the execution of which was confounded by the tea, coffee, and energy drink I consumed throughout. The last one was late in the day, I took a melatonin at ten and tried to sleep at eleven, but wound up getting up to read at midnight and again at one-thirty before finally going to sleep. I woke just after seven, in the midst of a vivid dream, and feel back to my normal, ready to conquer the day.

I finished reading Freakanomics. It’s a very interesting book, and deals with race in a very frank way. The last few chapters are about the role of parenting and schools in a person’s success in life. One of the main findings is that who you are as a parent matters more than what you do. It gave me pause for a moment, to reconsider how far I’m pushing the kids. They’ll be all right.

There’s a fascinating chapter about a particular crack gangs in Chicago and their leader, who I believe may have served as the inspiration for Stringer Bell in The Wire. We went to business school and ran it like a corporation. One of the lieutenants kept detailed notes on their day to day finances, and the story of how it got into the hands of an economist is fascinating backstory.

The book is from 2006, and while I have some concerns about it might be received today because of it’s racial themes, I still recommend it. It’s not very long, and written in an engaging style that made it a quick read.

After I finished Freakanomics, I picked up Atomic Habits, by James Clear, which the missus gave me as an early Fathers’ Day gift. I didn’t want to put it down. Clear opens with a story about how he had to recover from a life-threatening childhood injury, learning to walk again, up to how he reclaimed his identity as a baseball player and started writing a successful blog and now, a book. I’m only a couple chapters in, but I really like it. It begins with an insight about outside in versus inside out change.

Most people, myself included, focus on setting goals as a path to change. The goal drives the person’s actions, and then, hopefully, this causes a change in identity. There’s several problems with this. One is that actions that are incongruent with identity are eventually dropped. The other is that if the goal is the only thing driving the behaviors, then the new behaviors may revert once the goal is achieved. An example about a smoker stood out to me: if a smoker declines a cigarette, saying “I’m trying to quit,” then they’re focused on the goal, their identity hasn’t changed. If they say “no thanks, I don’t smoke”, they are much more likely to succeed at the goal, because their identity has already changed, to that of a former smoker.

This may sound hokey to some, but it’s congruent with my own experience quitting, and is core of some of the concepts I learned during through neurolinguistic programming. The goal here, ultimatley, is change from the inside-out, to figure out what type of person you want to be, first, and then the behaviors and goals will take care of themselves.

My approach to success has usually been goal driven. When I worked telemarketing sales some twenty years ago, my manager drilled into my head to set our goals higher than what we ultimately wanted to achieve. If we wanted to hit a 150% quota, for example, we would set a goal at 200%. This would set the pace for the sales period, and if we only hit 175% during the term, well we were probably better off than if we had just aimed for the 150% to begin with.

This type of aim for the clouds thinking has served me well the last two decades, but it usually gets a scoff from my wife when I speak them out loud. And I’ll admit, was firmly in mind when I set the Sixty Days to Six Figures and FIRE by 2024 goals. It may also seem like we’re veering into The Secret, or magic thinking, prosperity gospel. (Even now, I have an internal Ekart Tolle reading along as I type this. )

Clear recommends working backward from your goals, to reverse engineer the type of identity that would manifest those goals. As I said, I’m only a couple chapters in, but it’s already got my head spinning, and reexamining how I’m going to approach dealing with the kids. I may even have Elder read the intro out loud to me, to see if I can get her interested this.

Atomic Habits has already given me a strategy in framing our family identity. Our family is organized so we keep our house clean and free of clutter; we’re academics so we study hard and love learning; we’re athletic so we like physical activity; we’re entrepreneurs and leaders so we have strong work ethic and treat everyone with respect. I’m only a couple pages in and I think it’s going to be one of my favorites already, right up there with Dalio’s Principles.

Mortgage refinancing decision tree

mortgage Scrabble tiles

Increasing your monthly payment could save you more money

I’m feeling like some kind of dad genius this morning. Elder came in my bedroom earlier and told me she did her bathroom and bedroom chores. “Good,” I said, and rolled back over, not ready to get out of bed. She walked off and a minute later I heard her unloading the dishwasher. This kid really wants her extra screen time, man. I told her if she does all her daily chores I would give her an extra hour. And she’s currently two-thirds of the way to her DadPoints goal, so I guess we’re getting a cat next week.

I was really happy with yesterday’s post about my trading performance and figured that a more accurate assessment was needed. I hate to say it, but I think I need to do some more work in Excel, to figure out how to group transactions and join several sheets together. I don’t know if it’ll work or if I’ll need to get more complicated and throw it up in Python (or Google Collab) but at the minimum I want to see what things look like when I remove long term positions like Amazon and NVidia.


Today I want to talk about something that I wanted to mention yesterday, but took out cause of time constraints: refinancing our mortgage. Missus and I were discussing it as part of our FIRE plan, so I reached out to our mortgage agent to see if it was worth it. The short answer is no, and it’s likely that, for most people who are looking to pay off their mortgage and pay less interest, simply paying more on the collateral is a better play.

We’ve been in our house for five years, put ten percent down and have a twenty five year fixed rate mortgage on the house. Our payment includes escrow for taxes, as well as mortgage, flood and property insurance. After the first year, the escrow estimate went down, and we’ve been paying the difference into the principal each month. The city assessment on our home has gone up more than ten percent as well.

You can take a look at the this refinance calculator to see your own options, but our results weren’t very encouraging, only about $35 a month, or $420 a year. Considering that we would pay 1-2% on closing costs, we’d have to stay in the house for another seven years just to start recouping the money. And the total savings would only be about $8400 over the life of the loan. No sir. Instead, have a look at the savings we’ve gotten from throwing that extra $60 capital in each month. First, here’s a payoff calculator with a five year old mortgage with an original value of $200,000:

And here’s the result with an extra $60/month thrown on top of it.

Almost thirteen thousand in savings. That’s the value of compound interest, right there, folks.

Since we’re now under the 80% loan to value (LTV) on our home and are no longer required to carry mortgage insurance, I emailed our loan adviser and had him run the numbers for me, just to make sure I knew what I was talking about. They gave me several options, including a 20 year fixed with almost a whole percentage point lower rate. The savings? Sixty dollars a month. Now, while that does change the original estimate, we’re still talking about thousands in closing costs, which would take at least five years to recoup. And we can save three-quarters of what we would with a refi just by doing what we’re doing now.

So for now, we’ll just take the PMI payment and roll it back in to our principal every month, shaving over four years off of our original maturity date.

Before we bought this house, I had no idea how much I would hate the payment summary on my mortgage statement every month. The interest portion of the bill alone was enough more than I paid for my first apartment! It’s crazy. Thankfully Missus and I are on the same page, and focused on getting debt free and FIRE as quickly as we can.

Just another day in the life: Day 55

It is a beautiful day today. Perfect weather. The girls are playing together nicely in the living room, Missus is upstairs at work. I have half an hour before my scrum call, so I’m going to try to write quickly today.

I finished The Future Is Faster Than You Think. It took me a long time to read because of everything else going on, plus I wanted to let the ideas percolate in my head. A full review is upcoming as there are a lot of takeaways. They have CEO training — I wonder what they charge for that! — plus a venture fund that might lead to some possible opportunities. They have a digital version of their Abundance360 program that might be within my reach.

I downloaded GPT-2 here on this laptop, via their Dockerfile. It needed almost ten gigabyte of downloads for the model, and I still have no idea how to run it. That will need to wait for another day. I’m not quite sure what I want to do with it, but getting it up and running will be an interesting test. I’d like to see what it can do. I imagine prompting it with a subject and have it generate papers and blog posts. I’m sure there’s a business model in there some how. I know AI is used by a lot of financial news sites to generate articles based on firm reporting results, so the question is, how far can it be used.

Using Docker for development is going to be my new baseline, though. I really want to be come proficient with it. Ideally I’d like to have a setup where docker is running on my downstairs Linux server, and I can just connect to it using whichever machine I happen to be on. I currently have three workstations, though, one for “work”, my upstairs rig, and this laptop. It seems a bit much and like something I’ll need to pare down if we want to minimize or downsize. I should probably just get rid of the downstairs one completely, since I don’t really need a headless Linux server right now.

Today is the first day of the week, and I have a couple goals:

  • Provide at least two hours of value this week to my two clients, plus the pilot test I’m doing through Zombie, Inc. (six hours)
  • Sign a third client, at a higher rate than the other two. (two hours)
  • Register my LLC. I need liability protections to operate. (two hours)
  • Finish updating my resume and add it to the website.

Half the day is over, and most of the morning has been taken up with a trouble call and managing the kids and the kitchen.

Yesterday I spent several hours going through old mortgage statements and updating acccounts in GNUCash. I investigating refinancing and changing insurance companies, but both seemed a dead end. Even if we shaved an interest point off our mortgage, by the time you factored in three thousand dollars in fees, we’d save just over four hundred a year. It might make sense if we were going to take twenty five years to finish paying it off, but we don’t. If we roll rental income from Missus starter home into our mortgage, we could have our house paid off in ten years. Anyways, we’re at the point where we can drop our mortgage insurance. Applying that money to our principal will shave another two years off the maturity date.

The homeowners insurance quote I got from Lemonade wasn’t very good. The payments were higher than our current coverage from Nationwide, plus it didn’t seem that the coverage was better either. It was worth the fifteen minutes it took though.

I’ve still got a lot of catching up to do with our accounting, which will wait till next week. I’ve got nine months of utility bills to plug into GNUCash. Anyways, it’s one o’clock, and the girls are fighting.

Mother’s Day: Halvening Edition

Today is Mother’s day. Everyone is up and in a good mood — it seems. After I finish this I’m going to make mimosas and cook breakfast. We don’t have anything planned today, but I imagine it’s going to involve a lot of movies and sweets. I’m going to keep the kids productive, though, there are a couple rooms of the house that are in dire need of tidying.

It’s also been over six months since I did the house accounts. I use GNUCash, to keep tabs on the house expenses, mainly the mortgage and utilities, but it also let’s me stay on top of contributions between my wife and myself. She’s put up large lump sums in the past, for the roof and the HVAC, and I have to balance that against my monthly deposits until we’re more or less even. Things are even more complicated because she pays the health, car and home insurance and has also made the daycare payments. We split those payments and I credit her on the house account, but we’re not very disciplined about keeping up with adjustments.

We don’t track groceries or clothes for the kids or anything like that. We tried once using an app, but she just spent more than me, and it became too much of a conflict when it came to buying groceries, or eating out, or buying things for the kids. So we just try to take turns with the groceries and call it a day. We also make our own contributions to the girls. Missus prefers our state’s 529 plan, and I have bitcoin wallets for the two of them on my hardware wallet. Like driver’s licenses, I don’t think the kids will have a need for either by the time their old enough to use them.

I’ve managed the other bills through the joint account, but we’d never been able to keep much of a buffer in our savings. My individual account usually hovered just above water, maintaining tenous balances on my credit cards that I would struggle to pay off each month. She’s since started building it up through her side job, and with the addition of our stimulus payment and a hefty tax return, we’re sitting on close to six months expenses in that account.

I told Missus about my Sixty Days to Six Figures goal, and we wrote up all our debt on the board, which is about two hundred and seventy grand for the mortgage, my student loans, and my car. We wrote it up on the fridge. I also wrote up the current price of Bitcoin, and where we needed the price to be in order to pay all that off. Without disclosing how much I’m holding, I’ll just say it’s between a new all time high and six figures.

One of the responses above reminded me that mortgage interest on a $250,000 house is more than the house itself. It seems absurd now that we would have done such a thing, but given where we were coming from when we bought this place five years ago, I don’t think we could have fathomed any other alternatives. We know better now, so we’re going to do what we can to get out of this trap. And more importantly, teach our kids how not to get caught up in it either. There’s so much that could be written about this aspect of the American Dream, how the banks get rich off of servicing this loan debt, both mortgages and credit cards. The banking economy is driven by this extraction. It remains to be seen whether Bitcoin will fulfill the promise of P2P currency; it looks like it’s getting swallowed up by traditional finance. I am, however, more confident than ever of it’s worth, and am looking forward to the upcoming halving, now in about one day and eleven hours, early Tuesday morning.

The Simple Path To Wealth, by JL Collins

This book has been highly recommended by the FIRE community, and my wife wanted to read it, so I got it for her birthday. I picked it up Sunday morning and read through most of its hundred and fifty or so pages in under two hours, so here’s a bit of what I took away.

A good portion of the book reiterates the benefits of having financial independence, or F-you money, and relates Collins’s personal history getting there. This book, which originated as advice to his daughter, who didn’t want to have to time working about making her money work for her, basically boils down to a few simple pieces of advice: keep your spending low, keep your savings rate high, and throw everything into a low-fee, broad market index fund. The market has always gone up, and always will, he advises, and claims that his strategy is fool-proof over the long run.

And for people that can stick to the plan, it likely is. I’ll not argue against the merits of aiming for financial independence, nor the fact that aggressive savings with no debt will get one there fast.

I had a few quibbles reading the book, which likely stem from my own bias. I realize that my financial situation right now gives me no authority to argue with Collin’s assumptions, and I lack the personal data to prove things otherwise. If I had been more vigilant with record keeping over the years I could compute my own personal returns over the past twenty years. A quick look at my IRA’s total balance from January 2017 to today (up one hundred percent) versus the VTI during that period, up about fourteen, looks good to me, but there’s rollovers and contributions to factor in that make a direct comparison useless. Anyways, the book isn’t intended for someone like me, that likes spending time on financial investing and taking measured risks. It’s target for people that want the simple path.

Index funds, index funds, index funds: Collins says stock picking is a fools errand and recommends buying broad index funds, specifically Vangard’s total market index, the VTI. He spends a good deal of time on this, beating it into the reader over the course of the book. You’re not Warren Buffet, he says, and notes that the reason the Sage of Omaha and people like him are revered is because they’re so rare. He cites statistics on fund manager performance over the year, and shows that the only thing they’re good at doing is earning fees from their clients. He likewise disdains financial advisers, for similar reasons. Like stock picking, Collins thinks market timing is impossible. He notes that doing so successfully requires being right twice.

As noted, I’m heavily biased against following this advice. It may be that I need a good knock on the head, and I might be a bit arrogant from getting lucky with some tech plays when I was younger. It may be that Bitcoin has corrupted my brain. I’m totally willing to examine my cognitive biases and try to prove myself wrong. Granted, I’ve lost money on some foolish trades over the years as well, but I think that I’ve also tempered my panic response, and don’t sell when things go south. That’s what stop limits and trailing stops are for! I didn’t panic sell when the Corona pandemic hit the markets, I had cashed out some of my larger positions when the market fell off a year ago, and started buying when things crashed and started rebounding.

And I’ve been buying bitcoin almost every week for the entire bear market. And I have a plan on when to start selling that, also. But enough about that.

The market always goes up: Collins makes a great point about upside risk here. Since he recommends buying the entire market, it makes a lot of sense. Bankrupt companies stock can only go to zero, but the upside on those that survive is unlimited. It’s a great point that can be adapted to lots of other things as well. Just a few days ago I told my wife that if a take a new job with a traditional firm, my upside is only going to be whatever my salary will be, but if I do some entrepreneurial advising for equity stakes, my upside is unlimited. And Jason Calacanis, like other angel investors, likes to point out that venture investing only requires you to be right three times out of a hundred. Two of them to pay for the other ninety-seven, and the last one to be your unicorn.

Having the discipline to do something like that is an entirely different story, and is neither easy nor simple. And it’s easy to piss on the concept of perpetual growth when it seems like we’re living through the fall of the Roman empire.

Other advice: Collins gets into a lot of tax strategy, and goes over the various savings and retirement account available here in the United States. And the idea of a Roth conversion ladder fascinates me. There’s a lot that I skimmed over quickly, like the section on bonds, and retirement withdrawal suggestions, that just didn’t interest or apply to me.

Do I recommend this book to others? Absolutely, especially if they’re just getting started on the FIRE journey. Will I be practicing it myself? Probably not. I’m too fascinated by cryptocurrency, DeFi, LendingClub and venture/entrepreneurial opportunities to just park my money in an index and let it ride. I may start thinking differently in the future, and I do need to go back and look at the opportunity cost of the investments that I’ve made over the years to know for sure.

For me, my simple path to wealth is via Bitcoin. The next two years will show whether it’s the wrong one or not.

Choose FI: Financial Independence

My wife and I don’t usually read too many of the same books. Beside some sci-fi and fantasy novels, our non-fiction prefreadingerences don’t overlap too much. She likes trashy novels and I stick to political, business ,and technological based non-fiction. She recently discovered the FIRE movement, a group of people trying to build freedom from wage-slavery through financial independence. She picked up ChooseFI a few months ago, and has been listening to the related podcasts regularly. Since being able to redefine work has been of great interest to me, I decided to make a trade with her: I would read this book and she could read one of mine. I’m looking forward to her upcoming review of The Future Is Faster Than You Think — as soon as I finish it.

ChooseFI is an introduction to the financial independence movement. The last two letters of FIRE are for retire early, which the authors acknowledge is a bit of a misnomer, as many who have achieved FIRE continue to work. The general idea behind the system is to lower expenses and save up enough money to be able to fund your lifestyle via the interest earned on these savings. The first step is determining your magic number. By taking one’s annual expenses and multiplying it by twenty-five, you will have the amount needed to be able to maintain that lifestyle off of a four percent rate on those savings. These concepts are given as the rules of twenty five and four percent.

Determining this number and thinking about spending in terms of twenty five times (or three hundred if you’re talking about monthly expenses) can produce a dramatic shift in mindset. A simple example: spending three dollars a day on an energy drink or coffee each workday might cost you fifteen hundred dollars a year just to purchase, but maintaining that level of spending from savings income will require a whopping thirty seven thousand dollars in the bank. Another example: we’ve had a housekeeper come by our home twice a month, at $130 a visit. That’s over three grand a year, in direct expenses, over seventy eight grand to maintain during retirement. Putting these costs in this perspective creates a stark shift in priorities.

Of course the goal of living FIRE isn’t to live life as an an ascetic, it’s about prioritizing the things that one wants out of life. As a self-help book, Choose FI does a good job of laying the ground work toward setting priorities, developing a growth mindset, and mapping out the path to get there. There’s chapters on US tax savings, advice on college, career and networking, and investment tips that focus on real estate and house hacking, investing in index funds, and building a business.

As someone who’s taken a hands-on approach to managing my retirement and stock accounts much of my adult life, I found the chapter on index funds to be the weakest. I understand that for most people, picking a low-fee Vanguard index makes the most sense, but reading the following passage in the days following the worst daily drop in the S&P since the Great Depression struck me as ironic:

Buying an index fund means making a bet that the system continue to grow and prosper. Some will argue that this will not always be the case. After all, societies and economies have collapsed in the past. While this is true, I’m not basing my plan around a worst-case scenario that may never come.

Choose FI, pp. 229

Whoops.

To be fair, the authors have acknowledged the current pandemic and situation in the markets in their recent podcasts. From what I’ve heard, it sounds like they are exercising caution and urging listeners not to jump at the current fire sale prices. This is probably wise advice for most people.

The book is perhaps a bit longer than it needs to be, and I found myself skimming through the book the more I reached through the end. There are lot of personal stories from both the authors and many of the chapters showcase others that the authors have met or interviewed on their podcasts. I suppose it’s to be expected in an introductory book like this. The chapters on tax strategies and real estate investing were of the most interest to me, and the author’s point to other resources where readers can find more comprehensive resources.

That said, the authors deserve credit for the community building that they’ve built. I hesitate to use the term ‘media empire’, but I did experience a tinge of jealousy at some points during the some points, reading about how they quit their day jobs to focus on their Choose FI company, or others who were able to retire at thirty five based on their real estate holdings.

My wife and I may have seen the light a bit later in life, but we both understand that our parents path of working a nine-to-five for fifty years is not the way for us. We’ve got a long way to go until we’re in the position where we’ll have the freedom to work when and where we please. If anything ChooseFI has given us a similar perspective and opportunity to discuss and define what that life would look like.

World on FIRE

It seems almost impossible to think about long-term finances in the midst of a global pandemic, however, we have to assume that we’re not headed for complete and utter global collapse. My wife has been obsessed with the FIRE (financial independence, retire early) movement for some time, and while I’ve been with her in spirit, I haven’t been really focusing on it. For one, I’ve considered my finances very tight, and haven’t seen much room for cutting back in my budget. Two, I’m focused more on investments and entrepreneurial opportunity, and this FIRE movement is something a bit new for her. That said, I’ve been anticipating a recessionary event for over a year now, and have been trying to escape what some call “wage slavery” for even longer. So the ideas of the FIRE movement aren’t foreign to me to begin with.

Being home in self-isolation these past two weeks or so has led my wife and I to question everything about our current situation. Our biggest liability right now is our home. We’d already come to the conclusion that we’ve got too much house, and have long term plans to downsize as a way to save money. She still owns her starter home, which she rents through a property management company, and will have fully paid off this month. She’ll be completely debt free. Me, not so much. I’ve got less than ten grand left on a car loan, plus more than twenty in student loans that I’ve accumulated.

We’d been discussing getting rid of my car; her’s is fully paid off. And while I’m currently near break even with regard to the value of the car and the loan, something tells me it’s going to be very hard to unload my car right now. I’m assuming a private sale is going to be damn near impossible, and selling to a dealership will pretty much guarantee me a balance on my loan.

The FIRE community likes to talk about the rule of 25. It states that you need 25 times your annual expenses in order to maintain your current standard of living. It assumes a four percent growth rate of savings to use as income. When you break that down by month, that’s three hundred times. When you think about each dollar of recurring expenses, it really puts things in perspective. So we cut our Hulu and Netflix subscriptions, and cancelled our Amazon Prime subscriptions to cut down on impulse shopping.

We canceled our housekeeper (a sure sign we’ve got too much house!) last week because we were isolating. (We paid her anyways.)They normally come twice a month, at $135 a pop. That’s $6750 of savings we’d need to maintain. Since we were all home last week, we went on a cleaning rampage to straighten up the house. It might have just been cabin fever, but if we can keep it up through this week I may be able to convince my wife to cut that expense.

Besides our mortgage expense, our largest recurring expense is childcare. We’re currently spending over $300 a week on daycare for our two kids, somewhere around eighteen thousand a year. There’s a bit of tax savings from my wife’s TSP and childcare credits, but we’ll leave that aside for the moment. When our state closed the schools, we decided to pull the kids out of daycare for two weeks, anticipating that the pandemic would escalate and they would be forced to close the day cares. Last week was my wife was home with me on leave, but this week it’ll be just me with the girls all day long. It’s going to be tough, but if things work out this week we’ll likely cancel daycare altogether so we can save that money.

There are a lot of risks to this strategy, but I think it’s going to work out. I’ll have more time to spend with the kids, and have more of a direct impact on their studies and behavior. We’ll save lots of money, and it will force me into a complete work from home lifestyle. I just won’t be available for remote service calls, which will force my employer into making some changes to the way we operate, mainly by eliminating my commute times. On the flip side, it could backfire. Getting actual time for deep work like I’ve been accustomed to will prove hard to do with the kids in the house. Of course, if work fails and I’m forced to take a traditional corporate job with a lot of face time, we’ll have lost our holding spot in day care and have to go back on the wait list.

The financial upside is just too great not to try though. If I can manage to maintain my current hours for my day job, which is likely, my wife and I will not only be able to save a lot of money, but I should have more time overall to spend with my kids, and be able to stay home and focus on my side projects. It’s the equivalent of a large raise, and could work out very well if I can hold my day job.