Tuesday, May 23, 2017

Successful Maine Trip

Well, the trip to Maine was a success.  We took a long weekend and opened the cabin for the summer.  Opening the cabin requires a bit of work, but it's pretty fun.  And we had plenty of time left over for relaxation.

First of all, we had to de-winterize everything.  The well pump started right up, which was great.  The pipes, toilets, dishwasher, and washing machine are all winterized using non-toxic RV antifreeze.  Getting it out of the pipes and toilets is simple - just add water.  The dishwasher and washing machine have to be run once with nothing in them to get all the antifreeze out.

Next, there was plenty of cleaning to do just to make things shine.

Afterward, we took care of the outside.  We put a new tarp on the carport.  It looks a lot better than the old one, which was getting ratty.  We also put the dock in the water.  That requires the most heavy lifting out of any of the jobs, but we managed with a little teamwork.  Finally, we put out all of the lawn furniture.

That was enough for one day, so we made our way over to Suds Pub for some drinks and a nice dinner.

Suds!  Our favorite place.

The next day we wrapped up the cleaning and a few little jobs, then got the kayaks out for some fun on the water.  It was a little windy and choppy, but still a blast.

Finally, we settled down with a couple of (very full) glasses of wine.

To a job well done!
Oh, and we also found that we have a new neighbor - a muskrat.  Given that the pond has had a lot more lily pads over the past few years, and muskrats eat water lilies and cattails, I'm happy to see the little guy (or gal).

Anyway, now that we're back from the trip, I'll be back on schedule and get some more posts flowing.  Until next time!

Friday, May 19, 2017

Favorite Spots - Gorham NH 4th of July

Since we're busy road-tripping to Maine, and I won't be doing any blogging while we're there, here's one I was planning to save for later...

Gorham, NH does their 4th of July celebration right!  They put on a fun parade with lots of old timey fire trucks and such, plus candy for the kids.  There's a carnival on the town common with rides, games, and all that.  The town is usually pretty sleepy, but it's completely hopping when this is going on.

At night they put on the best fireworks show I've ever seen.  The coolest part about it is that Gorham is surrounded completely by mountains, so a few seconds after the fireworks go off you get an echo of the boom.  It rumbles for what feels like forever.

Note: This is NOT a paid advertisement or anything like that.  We're just talking about a place we like.  
By the way, these pictures are from our 2016 visit.

Wednesday, May 17, 2017

Going to Maine!

We're headed north to open the cabin for the summer!  I will follow up with a post about the process.  I can't wait to hit the road.

Monday, May 15, 2017

Step 4 - Sell The House In Virginia

Step 4 of The Plan is selling my house in Virginia and using the proceeds to pay off the mortgage on the house in Maine.  This will allow me to begin retirement without a mortgage, making my monthly housing costs very low.  Here's how the rough, back-of-a-napkin math works out:

I bought my house in Virginia for about $180k back at the beginning of 2013.  I put down 20% in order to avoid PMI.  For a while I paid extra on the mortgage, but eventually I started paying the normal amount and investing the rest.  So as of the writing of this post, I owe about $132k at 3.5% interest.

I bought the house in Maine in 2015.  After a gift of equity to cover the downpayment, I ended up with a $100k loan at 3.875% interest.  As of this post, I owe a little under $96k.

My idea was to look for the point at which these numbers would intersect, making it so that selling the house in Virginia would pay off the one in Maine.  Of course, predicting this perfectly is impossible since without a crystal ball, it's impossible to know what the house will sell for years from now.  So the assumption I'm going with is that the value will remain flat, and I'll be able to sell it for exactly what I paid.  It's a stab in the dark, but I feel like it's not overly optimistic or pessimistic.  I'm also assuming no extra payments on either mortgage.

So, if I sold the house for $180k, I'd end up paying $10,800 in realtor commission (figuring on 6%).  That leaves me with $169,200.  If I sold it today, paying off the $132k I owe on the loan, I'd be left with $37,200, which obviously wouldn't pay off the $96k Maine mortgage.

Using the magic that is an amortization calculator, I can look into the future a bit and see the following:

DateVA MortgageCleared From SaleME MortgageLeftover $$$Comment
June 2017$132,000$37,200$96,000-$58,800Definitely not yet.
June 2020$119,400$49,800$89,700-$39,900Some people buy cars for that much.
June 2023$105,800$63,400$82,800-$19,400Ok, could pull that from savings.
June 2026$90,700$78,500$75,100$3,400Woohoo!

That puts me slightly in the positive right when my kiddo is set to graduate from high school.  That $3,400 would go a long way toward funding an Appalachian Trail thru-hike.  Now let's imagine that the value of the Virginia house is $200k, which is about what Zillow says it is today.

DateVA MortgageCleared From SaleME MortgageLeftover $$$Comment
June 2017$132,000$56,000$96,000-$40,000Still nope.
June 2020$119,400$68,600$89,700-$21,100I could probably do that, but why not wait a little?
June 2023$105,800$82,200$82,800-$600Close enough!
June 2026$90,700$97,300$75,100$22,200Yowza!

Ok, I like those numbers even better, but I'm not going to bank on them since they're assuming my house sells for $20k more than what I paid.  But essentially hitting the crossover point three years early looks pretty nice.  Now, what if things went sour and it sold for $20k less than I paid?

DateVA MortgageCleared From SaleME MortgageLeftover $$$Comment
June 2017$132,000$18,400$96,000-$77,600Heck no!
June 2020$119,400$31,000$89,700-$58,700Nope!
June 2023$105,800$44,600$82,800-$38,200We're in overpriced car territory again, at least.
June 2026$90,700$59,700$75,100-$15,400Well, darn.  But not horrible.

That definitely wouldn't be ideal but it wouldn't be insurmountable either.  I could pull that out of savings if I absolutely needed to.  Or at least make up a chunk of that by selling off all of the furniture, electronics, and such that I won't be bringing up to Maine with me.  Another alternative would be to start tossing an extra $125/month or so on one of the mortgages to make it even out, but being that it's just an estimate, and a pessimistic one at that, it's probably not worth it.

So anyway, as long as my neighborhood doesn't end up a smoking crater, I should be within striking distance of making the two mortgages cancel each other out.  And I will likely even have a little something leftover to put toward step 5 (which will be coming soon).

Until next time!

Friday, May 12, 2017

Favorite Spots - Suds Pub

Time for a little diversion.  Let's talk about one of our favorite spots...

One of our favorite places to go while we're in Maine is the Suds Pub.  It's this fantastic little pub in the basement of an old Victorian style inn.  They pour their drinks tall, the food is great, and our favorite bartender has a wicked sense of humor.  It's one of those interesting spots where tourists and locals collide.  We always feel very welcome there and really love the atmosphere.  The prices are great, aside from the lobster roll (but that's probably just there for tourists anyway).

"Hoot Night" is always an adventure.  That's their open mic night.  There are some talented folks around.  There are some other folks too.  Either way it's a good time.

They have a cocktail-style Ms. Pac-Man / Galaga machine there that gets my geek juices flowing.  One of my hobbies, other than hiking, is fixing old arcade and pinball machines.  My lovely girlfriend likes to gather up as many quarters as she can find in her purse and give them to whatever little kid is playing on the machine.

Note: This is NOT a paid advertisement or anything like that.  We're just talking about a place we like.

Thursday, May 11, 2017

Win A Free Hiking Pillow

I decided to try out doing an Amazon Giveaway for a chance to win one of those hiking pillows I like so much.  I'm hoping it will get some more people checking out this site, but I also wanted to share it with those of you who are already reading.

So here is the link for a chance to win a free Topnaca Ultralight Hiking Pillow -https://giveaway.amazon.com/p/5a410a93c2eec9f9

No purchase necessary.  You have to tweet a particular message for a chance to win.

Wednesday, May 10, 2017

Step 3 - Retire

Ah... retire.  The word has such a nice ring to it.  It is the end of a career and the beginning of freedom.  It's also step 3 of The Plan.

On the surface, this one might seem like the simplest of the steps, but there is a lot more to it than you might think.  How can you make sure you're ready, both financially and mentally?  What about the logistics - how exactly does one retire?  Don't you have to be old to retire?  What about all those articles out there saying that Gen-X and millennials will never be able to retire?

Slow down there, Sparky.  Let's tackle the questions one at a time.

How can you make sure you're ready, both financially and mentally?  

Now, I'm not a financial genius, nor would I ever claim to be.  But I read.  I read a lot.  And the best article I've found to set the stage on how to be sure you're ready financially for retirement is this classic Mr. Money Mustache article -

I'll wait right here while you read it.


Ok, back already?  Good.  So, let's summarize for the person in the back of the class who didn't actually go read it.  You need to have 25x your yearly expenses saved and invested in order to attain what is commonly known as the 4% safe withdrawal rate.  I'm slightly more conservative than that, so I'm hoping for a 3.5% withdrawal rate, which would be 28x my yearly expenses.  You'll have to decide for yourself what number makes you comfortable.

Once you hit your number, you're ready to retire, at least financially.  [Side note:  We'll talk more on this blog some other day about some of the things I'm doing to try to hit my number faster, but for now let's just say that there are two basic ways to speed up the process - save more money and/or reduce your expenses.]  Financial readiness isn't the only readiness you have to worry about though.  What about mentally?  Are you ready to give up the career, or are you one of those folks who think you will die if you stop working?

You need to be honest with yourself.  If your career defines you, maybe you should keep working.  For me, it doesn't.  I love what I do, but I love my hobbies and interests more.  If the choice is working or hiking, I'll choose hiking every time.

What about the logistics - how exactly does one retire?

I'm still figuring this part out.  Hey, if I had all the answers I'd be retired already, right?  😏

As far as I can tell, you need to make sure you have your ducks in a row financially, including figuring out how you're going to access the money you'll use to support yourself in retirement and what you'll do about healthcare.  Then you need to work out a date with your employer.

My expectation is that I will make sure I have the finances in order, then give my employer a few months notice.  Since I am planning on retiring early, I'm not sure I will call it "retirement" when talking to them, but I will let them know that I am moving to Maine after a certain date, and help them find and hire my replacement.  I will want to ensure that I am not leaving them in the lurch, and will want to treat them as fairly as they have treated me.

Don't you have to be old to retire?

No.  Many people retire early.  Look at all the financial independence blogs that exist.  Heck, even my parents both retired before traditional retirement age.

What about all those articles out there saying that Gen-X and millennials will never be able to retire?

I don't think there is anything preventing a particular generation from retiring.  I think it's about choices.  If you are determined to make it happen and make enough money to be able to save some of it, you can eventually retire.  If you want to spend every penny you earn (or more) to drive fancy cars, eat dinner out every night, go on expensive vacations every year, and live in a McMansion, you probably won't be able to retire.  If you want to major in underwater basket weaving and never make any money in the first place, you probably won't be able to retire either.

Thanks for reading.  Keep an eye out for step 4.

Monday, May 8, 2017

Step 2 - The Prep Work

I had a great hike this weekend (went to Jones Run/Doyles River) and am ready to continue on with the next step of The Plan.

Step 2 is the big one.  It reads:
Between now and the time my son graduates from high school (2027, assuming he holds up his end of the bargain), do the following:
  • Enjoy trips to the house in Maine
  • Hike a lot
  • Save enough money to retire
  • Prepare the house in Maine for full-time residence
That's a lot, so I'll have to break those steps down further later on.  But for now, let me give you the high level.

2a.  Enjoy trips to the house in Maine

This is a fun step.  We have this beautiful little cabin in Maine, so we need to enjoy it.  Living several hundred miles away means we can't do that as often as we'd like, so we need to pick our spots.

Currently, my parents spend their summers there.  The girlfriend and I try to take trips up at least once per season - a spring trip to open the winterized cabin before my parents arrive, a summer trip to enjoy the lake, a fall trip to help winterize (and get a peek at the foliage), and a winter trip to play in the snow.

Neither of us have four weeks of vacations (like most Americans, I'd wager), so we try to build our trips around holidays and long weekends whenever possible.  And since we're trying to save to retire early, we try to keep the budget for these trips manageable.

To keep the budget manageable, and because neither of us really like flying, we drive.  Since my car gets decent mileage, gas for the trip isn't too bad.  We pack snacks and drinks for the road and have a blast road tripping it.

While we're up there, it's tempting to eat every meal at all of the wonderful restaurants around, but we don't.  A quick trip to the grocery store is one of our first stops.  That said, it is a vacation so we don't want to spend all day in the kitchen.  We keep the time/effort low and do a lot of crockpot cooking in the winter and grilling out in the summer.  It works out well.  We do make sure to hit our favorite spots while we're there, though.  There's one pub in particular that gets a visit every trip.

2b.  Hike a lot

Whether we're up in Maine, or home in Virginia, we try to hike as much as we can.  It usually works out to a couple of hikes per month.

All of the hiking is really central to our plan for a few reasons.

First of all, it is healthy and fun.  If we're going to live long enough to enjoy retirement to its fullest, we need to stay healthy and have something to look forward to doing.

Second, it is low cost entertainment.  Once you have all of your primary gear purchased, the only expenses required for a day or even a weekend of hiking is some gas money and some food.

Finally, as I've mentioned before our plan is to hike the entire Appalachian Trail as our bridge to retirement.  We need to have our trail legs ready to go, our gear selections dialed in, and plenty of trail food recipes if we're going to successfully hike almost 2,200 miles.

2c.  Save enough money to retire

This sub-step is the one that's going to require a lot more discussion.  There are countless blogs devoted to just this topic.  Some of these folks managed to save $1 million by age 30, cut their expenses to $25k/year, and retired happily ever after.  We're not quite that hardcore.  I'm aiming to be done by age 49 with enough in the bank to support a $40k/year lifestyle.  If things get tight, I'm not opposed to picking up some seasonal work or odd jobs.

To save money, I'm feeding the piggy bank through 401k contributions, Roth IRA, and taxable accounts.  I have a son who will hopefully go to college someday, so I am balancing this with also funding a 529 plan for him.  None of this is new or unique, but as this blog progresses I'll pass along some lessons learned and tips I've come across for making those accounts grow.

The first tip I'll pass along is this - I automate these savings as much as possible.  When the paycheck hits my account every few weeks, a good portion of it is already allocated out to automated transfers to my various accounts.  In most cases, the money doesn't sit in my checking account for more than a few hours.  Since I don't have time to see that money before it magically disappears from the account, I never miss it.  Same with 401k contributions - I've never seen a check with less than 15% going to my 401k.

2d.  Prepare the house in Maine for full-time residence

Admittedly, there's not much to do with this.  The house is livable year-round as is.  But since I just recently purchased it from my parents, I need to find ways to make it feel like my house instead of their house.  But I need to do it respectfully and retain the charm of the home.  And since I will be living there year-round, and it's a small home, I need to improve the storage situation whenever possible.  Space is at a premium.

I also want to beef up the energy efficiency and comfort level for winter living.  Right now, the entire house is heated with a Rinnai propane heater.  It does the job admirably well considering it's just one wall unit for the entire house, but the bedrooms (the furthest rooms from the unit) get a little cool.  Also, the floor, being tile throughout the house, stays pretty chilly.  On the plus side, the walls and ceiling of the house are insulated very well, so what heat is there stays in.

Well, that's about it for now.  Please stay tuned for step 3.  And if you need to, go back and check out step 1.

Friday, May 5, 2017

Good Gear - Topnaca Ultralight Camping Pillow

It's almost the weekend and I'm hoping to get a hike in, so let's take a break from the story and talk hiking gear...

If it wasn't clear already, I like to hike and backpack.  With that hobby comes a certain amount of gear that you need to have.  I always keep an eye out for bargains, but since I'm pretty frugal, I am pretty choosy about what I purchase.

For that reason, I avoided purchasing a backpacking pillow for a long time.  Since all of the pillows I saw at REI were either bulky or expensive (or both) I figured I could just stick my extra clothes in a stuff sack and that would be good enough.  But I was never really comfortable and didn't get as good of sleep as I could have.  As a side-sleeper, I needed something more substantial.

So, I started looking around.  The nice Sea to Summit pillows at REI started at around $39, which was more than I wanted to pay.  I also saw where some people used those little inflatable pillows that you find in hospital beds.  They are dirt cheap, but the durability and comfort just didn't seem all that great to me.

Eventually, I stumbled across the Topnaca Ultralight Camping Pillow on Amazon.  It fit the bill at only 2.5 oz and about $10, so I decided to take a flyer on it.

Topnaca Ultralight Camping Pillow
Great backpacking pillow for not much $$

Much to my surprise, this thing is great!  It's comfortable and has a nice texture to it.  It's quick to inflate and deflate, packing down very small.  On the downside, the little case it comes with is pretty flimsy and useless, so it will get left behind on future trips.

In my opinion, while the case is flimsy, the build quality of the pillow itself looks and feels comparable to the significantly more expensive Sea to Summit pillows.  It's light, comfortable, and beats the pants off of a pile of clothes in a stuff sack.  At a mere $9.99, it is about a quarter of the cost of the competition, which puts it right in line with Mr. Money Mustache's recommendation that you should try to spend about 25% of what the average person would spend on the same thing.  So, if you need a backpacking pillow and don't want to spend a ton of cash, try this thing out.

Note:  This is NOT a paid advertisement.  It's just a piece of gear that I bought and like.  I included an Amazon affiliate link, so if you happen to buy it using the link above, I'll get a percentage of the sale at no cost to you.  If that bugs you, open a new browser window, browse to Amazon directly, and search for the product name.  I will get nothing, and that's perfectly fine.

Note 2:  If you do decide to try one out, let me know what you think of it in the comments below.

Wednesday, May 3, 2017

Step 1 - Buy A House In Maine

Ok, so I'll be the first to admit that this isn't the typical first step on the path to an early retirement.  And I wouldn't recommend it as a first step in most cases, but this is how the cards fell.  But step one of The Plan I am using to get to my early retirement in Maine was buying a place to land when I get there.  Here's how that came about...

After I divorced, I had a lot of time alone to reflect and really find myself (cheesy as that sounds).  I considered what was truly important to me and where I saw my life going.  I had no interest in keeping up with the Joneses, much less the Kardashians.  I enjoyed spending time with the kiddo, particularly our yearly trips to Maine.  And I really enjoyed hiking, especially in the Maine woods.  And I missed small-town living.  Can you guess where my ideal town was?

As I previously mentioned, my parents had a camp in Maine.  A couple of years after I got divorced, my parents decided that they wanted to sell the camp so that they could move closer to where my kiddo and I currently live.  They preferred to transition slowly from living up there during the summers if at all possible.  They also wanted to give me first crack at buying the camp since they really wanted to keep it in the family, and I was the only one who showed any interest in actually going there.  My siblings prefer warm weather like normal people, I guess, and aren't exactly the hiking type.

I was already in pretty good financial shape since I have always been a saver, and when I divorced I downsized rather than maintain the much-too-large marital house, so my mortgage obligations were pretty low.  My parents were kind enough to offer me a gift of equity to cover the downpayment, so upfront costs would be low.  After running the numbers many times, and thinking back to how my dad regretted not buying his father's camp when he had the chance, I went for it.

Closing on a house, even an all-family sale, isn't a simple process.  You still have to get inspections and appraisals done, line up insurance, and sign stacks of paperwork.  After a month-long process, I became the proud owner of my future retirement home - a 900-something square foot, 2 bedroom, 1.5 bath cottage on a pond in a town of less than 1000 people.

Of course, a second home is a lot of money no matter how you slice it.  My mortgage obligations suddenly increased by about 80%.  That said, it was manageable because when I downsized after the divorce, my mortgage dropped considerably, so I after adding the second place I was back where I started mortgage-wise.  Since I hadn't allowed my lifestyle to inflate to fill that gap, I didn't really feel the difference.

There is, of course, an opportunity cost at play here though.  I could be investing that extra money instead of paying a second mortgage.  Would I get to financial independence faster without the camp?  Absolutely.  But I would get there without a place to land, and wherever I landed would not come with a nice family discount (in the form of a gift of equity), the memories of all the time spent there already, and the ability to help my parents move closer to their youngest grandkid.  I consider that a fair trade - your mileage may vary.

On pure financial independence blogs, delaying for something as silly as a house on a pond is likely a cardinal sin.  I should be happy living in a van down by the river.  But there is another force at play here - the kiddo.

I've mentioned the kiddo a few times now.  His importance to me cannot be overstated.  And because of that, and the great co-parenting relationship I have with his mom, I am staying where I live in Virginia until he graduates, which happens to be ten years from this post.

So while I would love to be in Maine right now, even if I retired today I would be staying put for ten years anyway.  Since I actually like my job I'm okay with that.  This is fortunate because the stars and math seem to have aligned and decided on this ten year number for me.  Check this out:

  • In ten years, my kiddo will graduate from high school.
  • In ten years at my current savings rate, I will hit my target savings number for retirement.
  • In ten years, I will have been at my current employer for exactly twenty years, giving me a beautiful round number to end on.
  • In ten years, I will be 49, meaning that the first birthday I can celebrate as a Mainer will be my 50th.  Once again, a beautiful round number.
And my favorite...
  • In ten years, assuming my home in Virginia can be sold just for what I paid for it (not counting on any price increase), and I make no extra payments on either mortgage, the amount of money I will clear from the sale will pay off the remaining mortgage on the camp in Maine.  The figures will be so close that I will be left with almost exactly $5000, which also happens to be the average cost of an Appalachian Trail thru-hike.

Stay tuned for step 2.  That's where the fun really begins.

Note:  Yes, I know the cost of an AT thru-hike will likely increase in ten years, and the likelihood of the house selling for exactly what I paid for it is very slim.  But that's a pretty cool coincidence, right?

Monday, May 1, 2017

Why Maine?

Growing up in northern New Hampshire, I spent a lot of time exploring parts of New Hampshire, Maine, and Vermont.  From the time I bought my first car, I started visiting all of the local-ish hotspots - North Conway, St. Johnsbury, Mt. Washington, Clark's Trading Post, Old Orchard Beach.

Some of my fondest memories are of trips to Portland, ME, for concerts and shopping at the Maine Mall.  I also really enjoyed my trips to Bethel, ME.  Bethel was really not much bigger than my hometown, but it had a movie theater, and a good one at that - the Casablanca.  There was also Pat's Pizza, the Big Adventure Center (with laser tag!), and occasional concerts at Sunday River.

Being the punk kid that I was, what I didn't fully appreciate at the time was the natural beauty of the area.  Grafton Notch State Park is right down the road, and I completely ignored it.  The one bit of nature that I did appreciate was the water.  I used to go fishing in nearby Locke's Mills with my dad.  He told me all kinds of stories about growing up on North Pond, where his father had a camp.  He always regretted not buying that camp when he had the chance.

Shortly after I graduated from college, my parents bought a small camp on North Pond.  It's not the one my dad grew up in, but it's right down the road.  It required a lot of work, since it was a true one (maybe two) season fishing camp with no amenities.  My dad, in true dad fashion, gutted the place and made it into a home.  My parents ended up living there full-time for a year or two before becoming snow birds, splitting their time between Maine and down south near me.

Every summer since then, I have made it a point to go visit while they're in Maine.  I'd go kayaking, play in Bethel, visit friends in NH, etc.  Each time I went it was harder to leave.  I fell in love with the place.

So a couple of years ago, when my parents told me that they feel like they're getting too old to go up there for much longer, and offered to sell me the camp in order to "keep it in the family" I jumped at the opportunity.  At that point in my life I was a couple of years removed from a divorce and already had it in my head that I wanted to retire early to somewhere in the north country.  This made those plans that much more real.