Browse Tag: Retiring On My Terms

Retiring On My Terms

How Tax Reform Impacted Our Pursuit of Financial Independence

Image by Steve Buissinne from Pixabay

As we get closer to April 15th, there has been a lot of discussion around the impact of 2017’s Tax Cuts and Jobs Act (TCJA) on U.S. taxpayers.

Not surprisingly, much of that discussion has been politicized.

Rather than jumping into politics, we’re going to look at the facts. Specifically, we’ll examine how the new tax law impacted our family’s pursuit of financial independence in 2018.

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ROMT’s “FIRE Prowess” Scores for 2001 to 2018

Image by David Mark from Pixabay

Two years ago, blogger The Green Swan introduced a metric called the FIRE Prowess Score.

“FIRE Prowess” went viral among those seeking financial independence and early retirement in 2017. Many financial bloggers, including yours truly, wrote about our FIRE Prowess Scores back then.

Since I’m finishing up my taxes, I’ve pulled together the information needed to determine my score for last year. I’ve been keeping thorough financial records for years, and enjoy tracking how my “FIRE Prowess” has changed over time.

I’m disappointed The Green Swan blog is no longer active, but their work lives on with this update!

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Dumb Financial Decisions: The Wrong Way to “Pay Yourself First”

Image by Goumbik on Pixabay

Many personal finance experts stress the importance of “paying yourself first.”

According to Investopedia, paying yourself first means automatically saving a portion of each paycheck. Money is routed from your paycheck directly into a savings or investment account. Before you begin paying monthly living expenses or making other purchases, you’ve already put some money into savings.

One of the simplest ways to pay yourself first is routing a portion of your paycheck into your employer’s 401(k) plan. I’ve done this ever since I started working. The savings I have built up in my 401(k) are a major reason we may have a chance to pursue early retirement! As an added benefit, many employers match a portion of your 401(k) contributions.

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Solar Energy Update: Do Your Job

Head Coach Bill Belichick of the New England Patriots has a simple mantra for his football team.

Do Your Job.

The mantra has worked well for Belichick and the Patriots. The team has won six Super Bowl Championships this century.

With less than a month of winter left, our rooftop solar panels appear to have done their job for the 2018-2019 season.

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Should PG&E Workers Receive Bonuses?

Embattled utility company Pacific Gas & Electric recently announced it will not award 2018 bonuses to 14,000 employees.

PG&E said it would file for bankruptcy last month. The company thinks it faces $30 billion in potential liabilities associated with California wildfires.

After victims of the wildfires protested bonus payments, PG&E canceled payouts for rank-and-file employees. The company previously announced it would not award executive bonuses this year.

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Are Business Trips Helpful in the Pursuit of FIRE?

Personal Finance

While I am not a frequent business traveler, I usually end up living out of a suitcase for work several times a year.

Last month, I traveled to Florida for an annual industry conference. Given that the temperature when I left my home for the airport was ten below zero, and it was going to be in the 70s when I landed in Florida, I was looking forward to a brief respite from the brutal winter in the north.

When I told colleagues, family, and friends I was headed south for a week, their initial reaction was generally one of envy – “hope you enjoy yourself on the beach while we’re all freezing, slipping on ice, and shoveling snow!”

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Solar Bank Pays Dividends as the Weather Gets Nasty

Financial Independence

The weather in our part of the country was particularly harsh during January.

We were hit by multiple major snowstorms during the month, and the temperature rarely got above freezing, and was often well below zero degrees (F).

One result of the wintry weather was a miniature glacier forming across our rooftop solar panels, which severely limited our energy production during January. Our home solar power system generated essentially no energy for a period more than two weeks during the middle of the month while the ROMT Glacier existed, and our monthly production barely topped 100 kWh – 40% worse than any other month since we went solar!

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ROMT’s 2019 Financial Resolutions

Financial Independence

Back on New Year’s Day, I reviewed our financial resolutions for 2018, and, more importantly, reported on how we did keeping them last year.

Overall, I think we earned a grade of a B on the nine financial resolutions we published a year ago, but the variation in our grades on each individual line item was pretty extreme. We earned three A+ grades (maxing out our 401(k) contribution, contributing enough to our children’s 529 plans to maximize state tax benefits, and choosing not to invest in Bitcoin last January), but I think I also earned a D on my goal to blog more consistently at Retiring On My Terms.

Hopefully a year from now our grades for these 2019 financial resolutions will be both higher, and more consistent, than what we achieved last year!

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Q4 2018 Financial Scorecard: Moving in the Wrong Direction

Early Retirement

The first six times we reported on our quarterly financial progress here at Retiring On My Terms, the news was always positive.

The three key metrics we’re tracking on our path towards early retirement and financial independence – net worth, 529 account funding, and passive income – all increased every single quarter.

Sometimes the growth was fast, and sometimes the growth was slow, but fairly consistent income, responsible spending, and a generally supportive stock market enabled us to make steady progress towards our goals ever since we started this blog.

Of course, that all changed during the fourth quarter of 2018, when the S&P 500 index plunged nearly 14%. As good as we try to be at saving and spending, a quarterly decline of that magnitude, the likes of which we hadn’t experienced in more than seven years, is bound to leave a mark on just about any investment portfolio.

And ours was no exception, even though, somewhat surprisingly, we still managed to make progress on one of our three key metrics despite the market rout over the past three months.

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Solar Energy Update: All Bad Things Must Come to an End

Solar Energy

Last month, I wrote about how our rooftop solar panel production had declined from prior year levels for four consecutive months, lamenting the fact we spent most of the late summer and fall using up solar energy credits we needed for this winter.

Fortunately, our streak of weaker year-over-year solar production finally ended in December, when we experienced some unseasonably warm and sunny weather.

Our solar energy production climbed by nearly 50% in December relative to the prior year period, and was up by almost 60% compared to our paltry production in November.

Not bad for the month featuring the shortest day of the year – especially since we were still able to enjoy a White Christmas!

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