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Thursday, November 27, 2014

How I Relax

Posted by Dave on November 25, 2014

When this is posted, I will be on a flight to the Dominican Republic to spend a week in the heat and sun. I have around 10 books that I’d like to read in the 7 days that I’m away, and will probably eat and drink too much – providing some incentive to hit the gym fairly hard on my return.

This year, I had 26 vacation days at the start of the year. I used a day in February on Super-Bowl Monday, in order to be able to fully enjoy the game without having to worry about getting up early the next day for work. Most of the other days I used in the summer were to golf or do things with my wife. This week’s vacation will be my only week-long time away from work. I prefer to break my work into shorter weeks in the summer than have huge chunks of time off at once and then have to work full-time.

I enjoy the type of all-inclusive vacation my wife and I are taking because everything is pre-paid. This type of vacation allows me to stop comparison shopping, stop reviewing opportunity costs or alternatives to the current purchase and just enjoy myself for a week with my wife in nice climates and get a huge chunk of my “to read” list cleared off. We are not tourists and don’t really leave the resort to learn anything about the land that we are visiting. We take full advantage of the items we have already paid for, rather than spending additional money on side trips that don’t really interest us.

This trip cost us around $2,000. We are both aware that this money could be spent on things that would allow us to retire earlier than 45, or something healthier. For anyone who lives through Canadian winters though, there comes a point where you need some relief from the cold grey snowy mornings, warming up your car, chipping ice and shoveling snow, or you go a little nutty. This annual window of heat in early December can usually get us through the entire winter – to give us a break during our normal hibernation period, and get out into the world.

I’m hoping that when we retire, we can find a reasonable rental someplace warm in the south to get away from the cold – getting away from winter for an extended period of time is one of the things that gives us incentive to maintain our savings plan and continue working towards our goal of early retirement.

Do you go away for the winter? Are you expecting to go to warmer places more (or are you going away more) after you retire?

Not Something to Procrastinate Over

Posted by Dave on November 18, 2014

I will freely admit I am a procrastinator. When I was taking accounting courses, it took me more than a few nights of little sleep and some dopey days at work before I finally talked myself into getting things done at least two days before the deadline, giving me time to revise and change answers, while giving time to not falling behind on the heavy amount of reading and studying required in the increasingly complex information.

After the school experience, I’ve tried to get better at doing things before they’re supposed to be done. The anxiety caused by rushing close to deadlines whether it’s work or home stuff just isn’t worth it to me. So I greatly disappointed myself by not following through on my “fall project” of losing a few pounds so that I would be more comfortable in exhibiting my pasty torso while on my upcoming trip to the Dominican Republic with my wife. I realized about a week ago that this wasn’t going to happen – mainly due to a lack of discipline on my part around not going to the gym enough and overindulging during weekends – so now I have a new winter project and will hopefully be in peak condition for the spring golf season next April and May.
One thing that I am really trying not to put aside for later is investing for retirement. After paying off our house in May of this year, my wife and I had to spend a few months “replenishing” our savings accounts which we almost wiped out in order to make our final mortgage payment (we didn’t want the hassle of shopping around, and had enough money sitting around that could be directed in the short-term towards the mortgage).

It would have been easy to do what I do with most things – get interested in something else and sidetrack our goal to a future date – going on more trips, buying more fun stuff, paying for “adult things” around the house that we have held off on doing over the past 5 years we’ve lived here. Thus far, we have avoided the temptation of home improvements, along with more than usual fun purchases, and are now redirecting our savings to investment accounts.

Once we started, it has been a lot easier to maintain. I set up automatic payments from my bank account to my Questrade account, which takes a lot of the decision making out of my hands. I can foresee a time where the constant savings will turn into a grind that we’ll think about not doing – much like my 60 –day “get in shape plan” that I ignored in lieu of eating more pizza and playing video games instead.

We’re interested in seeing how the next decade goes, as our paltry savings will hopefully turn into a significant source of income to our lives, which will (in the absence of economic disaster) allow us to be able to exit the workplace.

What to “Sacrifice”?

Posted by Dave on November 11, 2014

The basic premise of any retirement plan, whether it’s at 70 years or 35 years is to abstain from spending today, so there is money left at some future date. The difference between early and a more “advanced” retirement is the level of savings over the accumulation stage of life. My wife and I have chosen 45 as our goal, as our savings rate when we started this plan seemed to allow this to work out.

As people who have read this blog know, I have a few non-frugal hobbies that I enjoy, and my wife loves to travel, also not a really cheap thing to do. These are things that we want to do, knowing that they would be a significant hindrance to our early retirement plans. In order to balance off these relatively expensive activities, we have to give up other “grown up” things.

One of the major things we’ve given up is a “nice” house. We have lived in our house for almost 6 years now and have really done nothing to it. There’s a pretty long laundry list of things we’d like to do to our house that would update our current living situation from “student chic” (builder grade everything from the late 90’s) to something much nicer.

We like the small changes we have made – some new flooring to go over the plywood that was here when we moved in, and some paint that we applied shortly after that. Our next “major” purchase (which should be exciting) will be some matching blinds that will allow us the option of privacy in the kitchen in the evenings (the old blinds fell off and we never replaced them). We would like to take out a load-bearing wall to open up our closed-off first floor, but that would mean giving up a year’s vacation, and right now, that doesn’t seem worth it, for now – especially with winter coming.

When I write posts like this, I realize that these are particularly first-world problems – what “cool” stuff are we trading off in order to not have to minimize the number of years I have to work? These are really small issues to have, but still is a topic of conversation in our house. We are fortunate to have good paying jobs that even afford us the option of weighing these kind of choices.

Realistically, if we cut out doing everything that cost us any money, we could retire in a very small number of years, especially if our retirement plans continued with a really frugal way of life. Our issue, and the reason why our retirement plan is taking us 15 years instead of 5 is that we like the “extra” stuff.

What have you given up to achieve early retirement? How did you decide what expenses to keep?