Browse Tag: Retiring On My Terms

Retiring On My Terms

Dumb Financial Decisions: Selling My Potential Rental Property

Financial IndependenceAlmost twenty years ago, when I was single and in my mid-twenties, I purchased my first home after several years of renting.

It was not fancy.

It was a simple two bedroom townhouse, with a one car garage, and a postage stamp of a backyard.

I got a great deal on the place, as I was able to purchase it as a foreclosure for well under $50,000. I dumped my life savings (outside of my retirement accounts) into the purchase, so I did not have a mortgage, which was a huge benefit as I tried to rebuild my financial safety net.

After living in my townhouse for over four years, I decided to return to school full time to pursue a master’s degree in an effort to change careers.

And then I made a financial decision I thought was prudent at the time.

Continue Reading

The Financial Advantages of Blogging About Personal Finance

Early RetirementIf you’re reading this post expecting to learn how to make unimaginable riches on the Internet, my deepest apologies, but you are in the wrong place.

I have only been blogging for three months.

Retiring On My Terms has not generated one cent of income, while costing hundreds of hours of my time, in addition to expenses for web hosting.

And I still have no clue how to effectively use Pinterest, even though I have heard it can be an incredible social networking tool.

That said, the discipline required to think and write about our finances on a regular basis has already paid great dividends to the ROMT family. I’ll highlight a few of the ways our finances have improved as a result of the time I’ve spent blogging.

Continue Reading

Solar Energy Update: Another Bill Bites The Dust!

Solar PowerThe ROMT family is now over two months into our solar energy adventure, and the results continue to impress as we move down our path towards financial independence!

For the month of August, our electric bill dropped by 95% from last year! This followed a 91% reduction in our electric bill for July!

Part of the improvement in August was driven by the fact we used a lot less power this year compared to last year. It was much cooler in our area this August, so the central air had to work a lot less, and I’m hopeful our recent move to LED lightbulbs throughout the house is also paying early dividends.

All in, we used almost 30% fewer kilowatt hours of electricity this August relative to last August. Continue Reading

Dumb Financial Decisions: Not Taking Care of Myself

Early RetirementI have a confession to make to my readers:

I have horrible eating habits, don’t exercise nearly enough, and do a poor job managing stress.

The result is that right now I’m 20 pounds overweight, lack the energy I had a decade ago, and am likely headed towards significant health problems in the coming years if I don’t do a better job taking care of myself.

People on the path to financial independence and early retirement generally do a good job prioritizing future needs over present wants. Without a lot of planning and discipline around one’s finances, it’s hard to successfully make the journey to financial independence.

But this almost blind focus on the future – I just need to put my head down for the next five years, work hard, spend prudently, and invest well, and then life will be perfect! – can have a detrimental impact on the present.

It certainly has happened to me.

Continue Reading

Geographic Arbitrage: The Least Expensive States for Retirement

Geographic ArbitrageGeographic arbitrage is a popular concept in personal finance.

It involves working or living somewhere where you can earn more or spend less than if you worked or lived someplace else.

For example, someone who works remotely from home might decide to live someplace with a lower cost of living. Or a doctor might choose to work someplace where high demand for his or her specialty results in a larger salary. Or a retiree might move from a high cost of living area like New York City to a less expensive state or country, so the money they earned over their career has more buying power.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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!

Continue Reading

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.

Continue Reading

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.

Continue Reading