My Dad is incredibly punctual. I don’t travel with him often as I am not interested in waiting in the airport 4 hours before my flight. But, as should be expected, the apple doesn’t fall too far from the tree. Usually.
However, I am also a firm believer in the notion of ‘better late than never’. Mostly because it is really convenient, when you are late. As I am here.
So what’s my excuse? Well, this.
Finally, after a couple of years living in Baja California Sur I made a trip up to the world famous San Juanico (a.k.a. Scorpion Bay) for a hurricane swell that rolled past. And it was magical, as is evident in the photo above.
Something Good – Independence from work remains as enticing as ever
Since I work on a rotation of 3 weeks on (84 hours per week) followed by 3 weeks off (for an average of 42 hours per week), the time I have here at home in Mexico is quite obligation-free, and has the potential to be spent in the same way as my early ‘retirement’ will be when I am here ‘full-time’. It’s like retirement practice, which is actually pretty important as I have observed that what holds many people back regarding leaving their job is that their not really sure what they will do with all of their free time.
And, given the way last week went in San Juanico, I can’t bloody wait for this! At no point in the last few weeks did I feel bored or at a loss for things to do. In fact, during June I signed up for a 35km race near home in the Sierras of South Baja that runs in November. Much like the small Sprint Triathlons I completed in 2016, I kind of signed up on a whim, knowing that the act of doing so and sharing with some friends will keep me socially accountable for my decision, and will motivate me to prepare for and (fingers crossed) complete the race. It was really a matter of finally finding a challenge whose dates work well with my work schedule, something that won’t be a problem when I leave work. So for those who are afraid of not knowing what to do with themselves when they retire, I would suggest that this is only because you have never yet been retired and figured out how to fill your time with fun, enjoyable, meaningful, healthy and productive activities rather than filling it with work until you are too tired and uninspired to do much else with the rest of your hours in the day, if there even are any. Mr. Crazy Kicks did a great article recently about his take on the first two years of early retirement, in case you want to hear from someone who is already living it.
Something Bad – Despite adjustments, still overspent slightly
In any case, let’s look at June 2018, as there have been some pretty significant developments. First of all, if you look closely here, you will see that my monthly budget has changed. Yes, I have once again adjusted the rules of The Resolution. Where I started the year aiming to spend only $1,000 CAD per month, and soon adjusted to make it $1,250, I am now increasing the budget (for the final time I promise!) to $1,500. I am trying to find the balance between the opposing notions of “don’t set yourself up for failure” and “do what you say you are going to do”. In any case, as we reached the half way point of 2018 I decided that it was more important to use the data collected to date as feedback to be used to adjust The Resolution to a goal much more attainable, as it was clear I was not going to be able to keep to spending just $15,000 CAD this year. I still have in mind that I may be able to reduce this for 2019, but on the other hand the real goal to tracking my spending so closely is to find a real number, informed by real data, that I can use to inform my financial decisions of the future. I am trying to learn what I spend year-in year-out so I know how much I need to earn from my investments in order to be financially independent. So, ultimately it is best that I be realistic with myself about my spending rather than try to delude myself. That said, I will still strive to find new ways to further reduce my spending in the future. Any future surplus in my budget can always be invested or used mindfully for travel and experiences.
So, with my new monthly spending budget in mind, you will see that I still didn’t quite meet my goal for the month, but only exceeded it by $15.72. My new annual deficit for the year is just $234.02, a number I still have the potential to make up on the ‘back 9’ of 2018. I am currently projected to finish the year with a deficit of $128.46, having spent $18,128.46 CAD total for the year. It was becoming clear that I just wasn’t going to make up my growing deficit of about $2,500 that I had with my previous spending goal of $15,000 annually, and I decided that to set myself up for success rather than failure would be best for the purpose of spending as little as possible in order to save and invest as much as possible.
However, looking back over the first six months of the year, I have managed to stay within $1,500 for the month 3 times. This makes it even more evident that this is a better number for me to currently focus on, until I can find significant ways to further reduce my spending on a consistent basis.
Something Learned – Dave Ramsay isn’t totally crazy.
I paid off a good amount of debt in June. I had described in December how I had chosen to invest in equities instead of paying off all of my debt as quickly as possible at the time. And I still think that this can be an acceptable strategy, depending on the details and a person’s specific circumstances. However, with my investments being relatively small and returns rather stagnant so far in 2018, I decided to sell about half of what I owned and apply that towards debt. As much as I would never rely on predicting the direction of the markets, I am currently of the mind that I will get as good of or better value on stocks in the future than I will now, and have used that to help justify the sell.
Now, Dave Ramsay fans listen up: I eliminated the last of a small personal loan to my parents, of which I was paying no interest. I also eliminated two other lines of credit of a total of about $7000 CAD, with an average interest rate of about 9%. I now have my remaining debt on a line of credit with a different bank and a not-so-great interest rate of 11%, but the emotional boost that finally seeing zeroes in front of my other three loans makes the additional interest I will pay in the coming months worth it. It really feels like some real progress was made, and that will help to continue to power me to strive to reach my original goals. Therefore, I can see the benefit of Dave Ramsay’s ‘pay the smallest loans first’ approach, although from a strictly logical perspective it doesn’t necessarily make sense. However, as most economists should understand by now, humans are not strictly rational beings.
My OCD also enjoys the idea of having fewer active accounts, especially since ultimately I plan to close all but one line of credit for emergency use only in retirement.