ROMT’s FIRE Prowess Score

FIRE Prowess ScoreLast month, The Green Swan introduced a new FIRE metric that has received a lot of attention, the Swan FIRE Prowess Gauge.

FIRE Prowess is easy to calculate. It’s simply the change in your net worth, divided by your gross income, for any time period.

FIRE Prowess = Change In Net Worth / Gross Income

Most of us will have FIRE Prowess scores between 0.0x and 1.0x. The higher your FIRE Prowess number is, the better you are doing at increasing your net worth.

Numbers above 1.0x mean your net worth is growing faster than your income, which is an incredible result, presumably driven by both a relatively frugal lifestyle in the context of your income, and strong investment results.

A negative number means your net worth is headed in the wrong direction, which could be caused by spending more than you earn, a job loss, borrowing money to purchase depreciating assets, poor investment performance, or many other factors.

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Investing 101: Bank Products

Bank ProductsLast month, I started a series of posts about investing, to help build a foundation of knowledge for readers who are newer to the topic.

As I noted in my initial post, bank products are probably the most familiar type of investment to many readers, and include products provided by your local bank or credit union, such as savings accounts, checking accounts, money market accounts, and certificates of deposit.

We’ll start with a list of things to consider before investing in any bank product, and then go into more specific details about the primary types of investments you can get at a bank.

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The Solar Payoff: Our Electric Bill Fell By 91%!

Solar EnergyWe recently received our first monthly power bill since we decided to install solar panels on our roof.

As I posted previously, we did not expect our electric bill to actually go to zero.

But our results were pretty much as good as we could have hoped!

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My Costly – and Depressing – Trip to the Dump

DumpThe ROMT family tries to live a reasonably frugal and environmentally-friendly lifestyle.

We have our own vegetable garden and berry plants to provide a small, but healthy, portion of our diet.

We try to encourage the ROMT children to be members of the clean plate club.

We’re certainly not conspicuous consumers, and try to purchase only things we need.

We donate what we can’t use anymore to family, friends, local charities, our church, or Goodwill.

We recently embraced solar energy.

And we recycle everything we can.

Even so, we still have a way of accumulating junk.

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Lessons on Financial Independence from My Visit to Sears

SearsLast week, I had the opportunity to visit a Sears store for the first time in about a year.

Since my previous visit, I’ve read many articles about the decline of traditional retailers, particularly Sears, but this represented an opportunity to see how things were going at Sears with my own eyes.

As someone in his mid-40s, I can remember when Sears was one of the premier companies in the United States.

Sears was founded in 1886 (I can’t remember that!) and Sears Roebuck & Company was a component of the Dow Jones Industrial Average from 1924 through 1999. Growing up, the Sears Wish Book was required reading for my siblings and I, as it provided an almost unimaginable list of options to hope for on Christmas Day. Sears was still the largest retailer in the country when I headed off to college, and at the time also owned Allstate Insurance Company, stock brokerage Dean Witter, the Discover card, and real estate company Coldwell Banker, in addition to many other businesses. The Sears Tower in Chicago was the tallest building in the world for most of my life. Even today, brands associated with Sears, such as Craftsman, DieHard, and Kenmore, are still well-known to many Americans.

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Smart Financial Decisions: Thinking About Percentages

PercentagesThose who have read Retiring On My Terms before know I tend to focus on the numbers while charting our course towards financial independence.

I’ve posted in the past about the large impact small decisions can have over time, and we have made several changes to our daily habits since we actively started down our path to FIRE.

As I read posts from others who are more focused on frugality and minimalism, I always learn something new. I can’t honestly say I’ve implemented everything I’ve read, but even ideas that seem outlandish still encourage me to review my own decision-making, and force me to think about things differently.

As my thinking has changed, one thing I’ve started doing is evaluating my consumption in terms of percentages.

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Smart Financial Decisions: The Best Purchase Of Our Frugal Vacation

Retiring on my terms

Last week, I wrote about our decision to spend less than half of what we spent last year on our family vacation this year.

A year ago, we stayed at a luxury oceanfront resort.

This year, we stayed at a nice inn, which was about half an hour away from the public beaches.

There were many perks at the luxury resort last year, one of which was that a staff member would help bring your chairs and other belongings down to the beach, and set up a large beach umbrella or portable tent for you.

While this was nice, it also made me a bit uncomfortable. I’m a grown man, in reasonably good shape, with a wife and two children. I don’t need someone to carry chairs or set up a tent for us.

I know some people are all about the service, but I am all about self-sufficiency.

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Investing 101: The Basics

As someone who has been investing for decades, I often assume every reader has a similar background to mine.

But in reality, that’s not the case.

This is a good thing, because if every potential reader had the same experiences, knowledge, and perspective as I, there would be no reason for anyone to read anything I write!

In the first couple months of Retiring On My Terms, we’ve discussed a wide variety of topics:

InvestingGarage Sales.

Solar Energy.

401(k)s.

The cost of long commutes.

And even old water heaters.

Today I’m beginning a series of posts that will hopefully help build a foundation of knowledge around personal finance and investing for those who are newer to these topics.

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Just Because I Can Afford It, It Doesn’t Mean I Should Buy It

Like most readers pursuing financial independence, I work hard.

Fifty to sixty hours in the office each week, in a demanding and oftentimes stressful career, plus additional time working from home at night and over the weekend.

More than five hours spent commuting to and from work every week.

In addition to the time I am now devoting to writing for and building Retiring On My Terms.

Life is very busy, and I make a good living.

So I should reward myself, right?

After all, I deserve it!

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The Hidden Costs Of Solar Energy

Solar EnergyLast month, I wrote a series of articles about our decision to purchase a home solar energy system, and my belief it will ultimately help us on our path towards financial independence and early retirement.

The first post outlined our decision-making process.

The second post discussed our solar installation.

And the third highlighted the initial performance of our solar panels.

Today, in an effort to share some additional information on the topic, I want to identify some of the potential hidden costs to going solar I found useful to consider, even though they didn’t show up in the quote from our local solar energy company or most of the research I did on my own.

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