Taking a quick break from my debt story I wanted to turn to a quick investment update.
I am an amateur investor to say the least. I made my first serious investment almost three months ago to the day. In that time it's been a pretty wild ride. I received my first dividend payments and I got a chance to really see my money take some action as the stock market was on fire for this first party of 2012. I saw how my money went from one value to a much higher value. This is a very lucky experience as if I hadn't experienced the high first I would be even more distraught now that my portfolio is at an all time low.
As of this morning I have now lost $16. That means that after all the dividends I received and all of the money I have poured into the market these last few months it is worth $16 less.
That is very difficult for me to accept and I'm not sure I've even seen the bottom of it yet. It's very unfortunate as I had just purchased some shares of AAPL (a great company who I think we will see many more great products from in the future) just before the stock decided to correct itself (or the market correct the stock rather).
However I'm not going to give up. When the chips are down I know that this is the time to try and pick up some shares at a discount. I have to learn to see things long term and that if the market is down things are on sale. If the market is up so are my stocks.
How did you handle your first loss?
Wednesday, April 25, 2012
Tuesday, April 24, 2012
My Debt Story Part 2 - The Debt Strikes Back
Continuing my debt drama we come to my next big battle with debt. The Student Loans.
I mentioned in the previous blog post that I was working a job when I received my first credit card. What I didn't mention was how much I hated this job. It was brain draining, unsatisfying, and basically killing me inside. When you are in high school people are always asking you "What do you want to do?!" They do this so that they can try to sweep you into this "path" or that "track" so that you can get the most out of your education. Also many times this is supposed to help you get ready to go to a college or secondary school that might help you achieve your goal of becoming a banker, an electrician, a plumber, a doctor, etc.
My answer to this was always "I have no idea!" In fact if you ask me even to this day I'm not sure that I could answer you with a definitive response. Although I'm a teacher now and enjoy teaching I don't think I would answer that question with "I want to be a teacher!" When you do that I feel that it locks you into one choice and that is all she wrote. Or at least when I was in high school that is what I thought. So I decided not to choose anything and was never really encouraged to go to college or seek secondary education. Part of this was also that I didn't want to spend thousands and thousands of dollars taking classes that were preparing me to become something which I had no idea what is was.
Instead, I got a job.
In my small little town near the Canadian border there wasn't really very much for those with no college education. In fact there wasn't much even for those with a college education. Unless you worked at the university, the hospital, or an aluminum plant near by your choices were pretty limited. Many college graduates got jobs at the local Costco as they paid well and had good benefits.
It was around this time that one of the major cellphone carriers rolled up into my town and built a call center. It seemed like interesting work and I wanted a discount on a cell phone (Seriously! This was a major reason I applied). I got the job and they started me off at an unthinkable (at the time) $8.25/hr. This was huge to me! I also got paid for two weeks of training and there were possible bonuses. Man I thought I was living the life.
The job quickly lost it's luster. I was at the bottom of a corporate ladder and it seemed like I was reminded every day where I was. Customers were usually very rude or sometimes even downright cruel. Many of my co-workers would eventually leave due to the harassment they received from customers. Perhaps worse than all of this was just how empty I felt. Every time I swiped my badge to unlock the call center doors it was like I was giving away a piece of myself I could never get back. And this wasn't that far from the truth. I was 19 and I will never ever get back those years of my youth. After spending almost four years I finally wised up and decided to go back to school.
I still wasn't exactly sure what I wanted to become but the experience I had had at my job taught me that I wanted more doors open to me than what was available and I also looked forward to enjoying the experiences and lifestyle of a college student. So at 21 I applied and got into the university in my home town. This also means that I had to file for financial aid.
As I said my family is not rich by any means and it would have been impossible for them to help me pay for my education. Plus I had a "I want to do this on my own" attitude which kept me from asking for any monetary help. I was left to deal with financial aid which wasn't looking too good. I didn't get any grants or scholarships (I didn't really apply either) but the government was all ready to offer me up gobs and gobs of student loans. At the time I remember thinking that I didn't really understand what I was doing but I wanted to go to school so I signed on the dotted line.
At the end of my college career (took me 6 years with one of those years being abroad at a school in Japan) I was close to $26,000 in debt. I know that many people have lots more than that, and some people less. No matter what this is a substantial amount of money. Add on a 6% interest and it's a VERY substantial chunk of money.
Another thing happened to me at the same time. I was very lucky to land a job teaching in Japan right out of college but the cost of moving all of my things to Japan was on me. Looking back I should have done the mustachinan thing and just packed some clothes, a few pairs of shoes, and a book but I wanted to take my Xbox, Playstation, guitar, snowboard, etc. The cost of all of these was put onto my credit card. I had managed to run up a $3,500 credit card debt before I even stepped foot off the plane to start my new job.
To be continued...
I mentioned in the previous blog post that I was working a job when I received my first credit card. What I didn't mention was how much I hated this job. It was brain draining, unsatisfying, and basically killing me inside. When you are in high school people are always asking you "What do you want to do?!" They do this so that they can try to sweep you into this "path" or that "track" so that you can get the most out of your education. Also many times this is supposed to help you get ready to go to a college or secondary school that might help you achieve your goal of becoming a banker, an electrician, a plumber, a doctor, etc.
My answer to this was always "I have no idea!" In fact if you ask me even to this day I'm not sure that I could answer you with a definitive response. Although I'm a teacher now and enjoy teaching I don't think I would answer that question with "I want to be a teacher!" When you do that I feel that it locks you into one choice and that is all she wrote. Or at least when I was in high school that is what I thought. So I decided not to choose anything and was never really encouraged to go to college or seek secondary education. Part of this was also that I didn't want to spend thousands and thousands of dollars taking classes that were preparing me to become something which I had no idea what is was.
Instead, I got a job.
In my small little town near the Canadian border there wasn't really very much for those with no college education. In fact there wasn't much even for those with a college education. Unless you worked at the university, the hospital, or an aluminum plant near by your choices were pretty limited. Many college graduates got jobs at the local Costco as they paid well and had good benefits.
It was around this time that one of the major cellphone carriers rolled up into my town and built a call center. It seemed like interesting work and I wanted a discount on a cell phone (Seriously! This was a major reason I applied). I got the job and they started me off at an unthinkable (at the time) $8.25/hr. This was huge to me! I also got paid for two weeks of training and there were possible bonuses. Man I thought I was living the life.
The job quickly lost it's luster. I was at the bottom of a corporate ladder and it seemed like I was reminded every day where I was. Customers were usually very rude or sometimes even downright cruel. Many of my co-workers would eventually leave due to the harassment they received from customers. Perhaps worse than all of this was just how empty I felt. Every time I swiped my badge to unlock the call center doors it was like I was giving away a piece of myself I could never get back. And this wasn't that far from the truth. I was 19 and I will never ever get back those years of my youth. After spending almost four years I finally wised up and decided to go back to school.
I still wasn't exactly sure what I wanted to become but the experience I had had at my job taught me that I wanted more doors open to me than what was available and I also looked forward to enjoying the experiences and lifestyle of a college student. So at 21 I applied and got into the university in my home town. This also means that I had to file for financial aid.
As I said my family is not rich by any means and it would have been impossible for them to help me pay for my education. Plus I had a "I want to do this on my own" attitude which kept me from asking for any monetary help. I was left to deal with financial aid which wasn't looking too good. I didn't get any grants or scholarships (I didn't really apply either) but the government was all ready to offer me up gobs and gobs of student loans. At the time I remember thinking that I didn't really understand what I was doing but I wanted to go to school so I signed on the dotted line.
At the end of my college career (took me 6 years with one of those years being abroad at a school in Japan) I was close to $26,000 in debt. I know that many people have lots more than that, and some people less. No matter what this is a substantial amount of money. Add on a 6% interest and it's a VERY substantial chunk of money.
Another thing happened to me at the same time. I was very lucky to land a job teaching in Japan right out of college but the cost of moving all of my things to Japan was on me. Looking back I should have done the mustachinan thing and just packed some clothes, a few pairs of shoes, and a book but I wanted to take my Xbox, Playstation, guitar, snowboard, etc. The cost of all of these was put onto my credit card. I had managed to run up a $3,500 credit card debt before I even stepped foot off the plane to start my new job.
To be continued...
Thursday, April 19, 2012
My Debt Story Part 1
A recent posting over on MMM really hit a chord with me and I want to share my debt story. It's not very exciting really but I felt it was very in line with MMM's message in that post.
I grew up in the upper class of the low income spectrum. At least that's what I was always told. My parents divorced when I was very young and I was raised by my mother and my aunt. I think they did a bang up job and produced one hell of a good dude but things were usually pretty tight. However I think we were in the upper spectrum in that my dad and grandmother always came through for us on christmas and our birthdays. We were never usually more than a year behind on video games (which back then meant you were doing pretty good). On the other hand I remember numerous occasions when the cupboards were pretty bare and I would wonder when the next trip to the grocery store was going to happen.
One thing that I remember very specifically however was that neither my mother nor my aunt put things on credit cards. That is why our presents normally came from dad or g-ma, because my immediate family wasn't buying us stuff with money we didn't have. In this way I was never introduced to the consumer machine of credit through perhaps the most persuasive role models available, those that raised you. There was a time when my mom tried to start her own business and she would complain she didn't know how she was going to pay the rent the next month. I never asked many questions because I knew I wasn't going to like the answer. But even during those times neither my mother nor my aunt turned to credit cards.
What I learned from this was to fear money. Not the best lesson to teach your children but neither is "Spend! Spend! Spend!" When I finally graduated from high school and started making "real money" I was always afraid of not being able to pay my bills or pay my rent so I was always very strict on myself to make sure I had money set aside for those things. I understood that no matter how much I was getting paid I had to pay for the roof over my head, the water coming out of my faucet, and the heat coming out of the floor boards. I wasn't into cooking back then and went out for most of my meals. This really killed any chance at savings but I never went into debt.
Around when I turned 20 I thought it would be a good idea to build some credit. Again I didn't think about getting a card to take a vacation on, just that I was 20 now and didn't have any credit to speak of. This was my first run in with over spending. I remember specifically the item that did me in too. My credit card came very quickly and I purchased a Microsoft Intellimouse. These things were so cool with five button functionality and optical tracking. But it cost me about $80, and that was enough to put me over. I remember looking at the thing and, just like MMM talked about, a giant red emergency alarm came on over my head. Images of my mom telling me how we might not be able to afford rent quickly appeared in clouds above my head and I took the mouse back (I drove as I wasn't so mustachian yet).
I think that was when I realized I should be okay. Debt was something that I feared so I tried to stay away from it. Some of my friends tried to tell me it was okay. "Just make the monthly payments and you'll be fine" they said. But I didn't like that interest was just free money for the credit card company. In fact that was simply unacceptable to me.
I had won my first real fight with debt, but it wouldn't be my last. And it wouldn't always be so pretty.
End of Part 1
I grew up in the upper class of the low income spectrum. At least that's what I was always told. My parents divorced when I was very young and I was raised by my mother and my aunt. I think they did a bang up job and produced one hell of a good dude but things were usually pretty tight. However I think we were in the upper spectrum in that my dad and grandmother always came through for us on christmas and our birthdays. We were never usually more than a year behind on video games (which back then meant you were doing pretty good). On the other hand I remember numerous occasions when the cupboards were pretty bare and I would wonder when the next trip to the grocery store was going to happen.
One thing that I remember very specifically however was that neither my mother nor my aunt put things on credit cards. That is why our presents normally came from dad or g-ma, because my immediate family wasn't buying us stuff with money we didn't have. In this way I was never introduced to the consumer machine of credit through perhaps the most persuasive role models available, those that raised you. There was a time when my mom tried to start her own business and she would complain she didn't know how she was going to pay the rent the next month. I never asked many questions because I knew I wasn't going to like the answer. But even during those times neither my mother nor my aunt turned to credit cards.
What I learned from this was to fear money. Not the best lesson to teach your children but neither is "Spend! Spend! Spend!" When I finally graduated from high school and started making "real money" I was always afraid of not being able to pay my bills or pay my rent so I was always very strict on myself to make sure I had money set aside for those things. I understood that no matter how much I was getting paid I had to pay for the roof over my head, the water coming out of my faucet, and the heat coming out of the floor boards. I wasn't into cooking back then and went out for most of my meals. This really killed any chance at savings but I never went into debt.
Around when I turned 20 I thought it would be a good idea to build some credit. Again I didn't think about getting a card to take a vacation on, just that I was 20 now and didn't have any credit to speak of. This was my first run in with over spending. I remember specifically the item that did me in too. My credit card came very quickly and I purchased a Microsoft Intellimouse. These things were so cool with five button functionality and optical tracking. But it cost me about $80, and that was enough to put me over. I remember looking at the thing and, just like MMM talked about, a giant red emergency alarm came on over my head. Images of my mom telling me how we might not be able to afford rent quickly appeared in clouds above my head and I took the mouse back (I drove as I wasn't so mustachian yet).
I think that was when I realized I should be okay. Debt was something that I feared so I tried to stay away from it. Some of my friends tried to tell me it was okay. "Just make the monthly payments and you'll be fine" they said. But I didn't like that interest was just free money for the credit card company. In fact that was simply unacceptable to me.
I had won my first real fight with debt, but it wouldn't be my last. And it wouldn't always be so pretty.
End of Part 1
Monday, April 16, 2012
March to April Spending Breakdown
I'm manually tracking my spending every month so that I can always be on top of where my money is going. Let's take a look at how I did for the March to April time period.
Income:
JPY 338,254
My income fell this month due to there not being an English test and the amount of work at my part time job fell as well. I actually didn't really mind the free time that I had.
Expenses:
Rent: JPY 50,100
Eating Out: JPY 51,869
Groceries: JPY 16,168
Transportation: JPY 15,668
Bills: 7,868
Entertainment: JPY 4,200
Misc.: JPY 395
Alcohol: JPY 2,044
Mail: JPY 510
A trip to western Japan bumped up my transportation expenses for a bus and a few taxis. Dining out was through the roof due to a wedding and several school drinking parties. The rest of the bills were pretty much in line with where I would want them.
For those more visually inclinded:
And my spending breakdown by day:
I hit a few more days this month of no spending. I assume these were the days when I was on vacation and stayed in and played some video games.
How are your expenses?
Income:
JPY 338,254
My income fell this month due to there not being an English test and the amount of work at my part time job fell as well. I actually didn't really mind the free time that I had.
Expenses:
Rent: JPY 50,100
Eating Out: JPY 51,869
Groceries: JPY 16,168
Transportation: JPY 15,668
Bills: 7,868
Entertainment: JPY 4,200
Misc.: JPY 395
Alcohol: JPY 2,044
Mail: JPY 510
A trip to western Japan bumped up my transportation expenses for a bus and a few taxis. Dining out was through the roof due to a wedding and several school drinking parties. The rest of the bills were pretty much in line with where I would want them.
For those more visually inclinded:
I hit a few more days this month of no spending. I assume these were the days when I was on vacation and stayed in and played some video games.
How are your expenses?
Wednesday, April 4, 2012
Early Retirement With Training Wheels and Diapers
To me "early retirement" isn't really about retirement at all. It's just a label that we in the community use for freedom. I can work if I want to but I'm not financial obligated to. I think there is a big difference between someone who has stated "I am done working and I am exiting the job market from now until they plant me in the ground" and someone who says "My money is making me enough money but I will continue to work on my own conditions." The latter person continues to learn and increase their skill. Not that the former formally retired person doesn't continue to learn, just that in the traditional sense they are no longer using those skills in the job market.
I work in the education market here in good old Japan. I am in a very lucky industry in that my customers have several very long vacations that I also get to take part in. Full disclosure: I have not taught a single lesson since March 2nd. I continued going into work until March 16th from which time, until tomorrow April 5th, I did NOT HAVE to go into work. I COULD go into work if I so choose. There is obviously a new school year starting soon so I have some lesson planning to do, a few meetings going on, etc. But I didn't have to go and I still received my paycheck.
I saw this as an experiment I called "financial independence with training wheels, and diapers." I was in no way trying to fool myself that I was now FI and free. But in a very real way I was free, just for a limited time. That might sound like a contradiction, but when you have three to three and a half weeks off paid (and these are NOT vacation days) it will seem very real to you too.
So what did I do with my time? I'll try to grade myself on a few different levels.
USE OF MY TIME: C- (Below Average)
I spent many of the first few days sleeping in and just plain lounging. I did my fair share of internet surfing, watching Japanese TV (which I love), household chores, cooking (made a new recipe), and near the end a lot of video games. I got out of the house long enough to take a 23km bike ride, take some pictures, and hang out with a few friends. I noticed this was very difficult as most of them were either working or recovering from work.
What really brought my grade down in this area was studying or improving my skills in some way. I really wanted to get back into studying some Japanese. This never happened (outside of watching TV). We had a few rainy days, and one of Japans worst typhoons in the last 50 years, but I really failed to get out and enjoy a lot of the sunny days that we had. A big problem I have is I don't have many Japanese friends. My foreign friends usually just want to drink. I should have looked for a bike riding, running, conversation exchange club, etc. to fill more of my time.
GOING INTO WORK: B+
I only went into work once and that was because we were moving desks for the new year. I felt it was unfair to make other teachers clean up my desk and move it so I went in for a few hours. This was great as I had a really good idea for a new lesson that I think the students will really enjoy.
Not that going into work is bad, but I think it can be important in the world of FI. If you really feel like you need to be in the office working that's fine. To each his own. I was just delighted to find out that I am not that kind of person. I was able to enjoy my time with me.
GETTING THINGS DONE: C
I managed to get done pretty much what I had set out to do. I wrote some letters to people, tried my hand at a bit more photography, checked out some books from the library, finished Halo Reach on Legendary difficulty, got in a few pull ups, and the apartment isn't a disaster area, and all of my investments are in order. The big deal is that I could have done this even if I wasn't on vacation. These were all things I could have done even with the 11 hours I put in everyday at work (I count from the instant my alarm goes off to the second I put my foot back in the door as work. You should too).
WILLINGNESS TO WORK: A
This is where I don't think I dropped the ball. I have a second part time job and really opened up my schedule. The big problem is there were just no classes for me to teach. It's a slow time of the season and not a crumb was to be found. At the end of the day I wasn't sad about that. As I said before I found I'm not the kind of person that MUST work. But I was looking at this second job as a catalyst to getting me out of the apartment more. Seeing how this failed I will have to focus on other activities to get me out and about.
I'll leave my short evaluation at that. It was a fun ride and probably around this time next year I might be able to look back and see what I can do to improve my short stint in FI in preparation for the big times.
What about you? Have you had the opportunity to test the "early retirement you?"
I work in the education market here in good old Japan. I am in a very lucky industry in that my customers have several very long vacations that I also get to take part in. Full disclosure: I have not taught a single lesson since March 2nd. I continued going into work until March 16th from which time, until tomorrow April 5th, I did NOT HAVE to go into work. I COULD go into work if I so choose. There is obviously a new school year starting soon so I have some lesson planning to do, a few meetings going on, etc. But I didn't have to go and I still received my paycheck.
I saw this as an experiment I called "financial independence with training wheels, and diapers." I was in no way trying to fool myself that I was now FI and free. But in a very real way I was free, just for a limited time. That might sound like a contradiction, but when you have three to three and a half weeks off paid (and these are NOT vacation days) it will seem very real to you too.
So what did I do with my time? I'll try to grade myself on a few different levels.
USE OF MY TIME: C- (Below Average)
I spent many of the first few days sleeping in and just plain lounging. I did my fair share of internet surfing, watching Japanese TV (which I love), household chores, cooking (made a new recipe), and near the end a lot of video games. I got out of the house long enough to take a 23km bike ride, take some pictures, and hang out with a few friends. I noticed this was very difficult as most of them were either working or recovering from work.
What really brought my grade down in this area was studying or improving my skills in some way. I really wanted to get back into studying some Japanese. This never happened (outside of watching TV). We had a few rainy days, and one of Japans worst typhoons in the last 50 years, but I really failed to get out and enjoy a lot of the sunny days that we had. A big problem I have is I don't have many Japanese friends. My foreign friends usually just want to drink. I should have looked for a bike riding, running, conversation exchange club, etc. to fill more of my time.
GOING INTO WORK: B+
I only went into work once and that was because we were moving desks for the new year. I felt it was unfair to make other teachers clean up my desk and move it so I went in for a few hours. This was great as I had a really good idea for a new lesson that I think the students will really enjoy.
Not that going into work is bad, but I think it can be important in the world of FI. If you really feel like you need to be in the office working that's fine. To each his own. I was just delighted to find out that I am not that kind of person. I was able to enjoy my time with me.
GETTING THINGS DONE: C
I managed to get done pretty much what I had set out to do. I wrote some letters to people, tried my hand at a bit more photography, checked out some books from the library, finished Halo Reach on Legendary difficulty, got in a few pull ups, and the apartment isn't a disaster area, and all of my investments are in order. The big deal is that I could have done this even if I wasn't on vacation. These were all things I could have done even with the 11 hours I put in everyday at work (I count from the instant my alarm goes off to the second I put my foot back in the door as work. You should too).
WILLINGNESS TO WORK: A
This is where I don't think I dropped the ball. I have a second part time job and really opened up my schedule. The big problem is there were just no classes for me to teach. It's a slow time of the season and not a crumb was to be found. At the end of the day I wasn't sad about that. As I said before I found I'm not the kind of person that MUST work. But I was looking at this second job as a catalyst to getting me out of the apartment more. Seeing how this failed I will have to focus on other activities to get me out and about.
I'll leave my short evaluation at that. It was a fun ride and probably around this time next year I might be able to look back and see what I can do to improve my short stint in FI in preparation for the big times.
What about you? Have you had the opportunity to test the "early retirement you?"
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