26 November 2019

Look at Lit: Cashing in on the American Dream


Appearing in this world around the same time that I did, Cashing in on the American Dream by Paul Terhorst was possibly the first book published here in these United States about FIRE. An accountant by education, Terhorst got a good job out of school and quickly rose up the ranks. By his early 30s, he had all the important things that one thinks an accountant should have: House, wife, secretaries, flights around the world at a moment's notice. Then one day in an airport, he saw a group of younger gentlemen who were traveling for something besides business and he realized he wanted to do that. From then on, his tune slowly changed from one of rise rise rise to one of let me get out ahead.

Despite its age, the book is chuck full of stuff that is still relevant to this day. One of his main points was what he called the $50-a-Day rule: Make sure your expenses don't exceed that amount. Now since the book was published in 1988, inflation has been at work eroding our savings. As a result, $50/day then translates into a bit over $100/day today. However, there are still plenty of people living on $18,000 a year (or way less!) and doing so comfortably.

Perhaps the biggest takeaway from the book is that early retirement CAN work over the long term! There is no shortage of doubt and worry concerning retirement for people who are approaching normal retirement age (i.e. 67) and there continue to be stories in the news about how seniors are unable to afford to retire. Yet, Paul and his wife Vicki have been retired for 35 years and I don't think either has any plans of going back to work anytime soon. (However, he apparently does still earn some money from occasionally writing content online.)

Nor should they need to. His assets have grown since he retired in the early 1980s, having approximately doubled within the more than 30 years of retirement. That in itself is a testament as that means they survived market crash of 1987, "no new taxes," the fall of the Soviet Union, the tech boom of the 90s then subsequent bust and recession of early 2000s, 9/11, the mid-decade housing boom, and most recently the Great Recession.

That also brings the "four percent rule" that is otren touted in financial planning circles into focus. The gist of it is that one needs to save about 25 times their intended annual salary in retirement to be able to retire, then that amount would be drawn down in retirement at the rate of approximately four percent of the total sum per year. However, I see two flaws with that. First, it is based on the assumption that the principal would be distributed over that time period and as we have seen from not just Paul, but many others as well, they do not really have to touch the principal at all.

But it also assumes that retirement is going to be 25+ years (taking inflation and other things into account, the money should actually last 33 years). Based on modern life expectancy averages, someone waiting until full retirement age is already too old to be able to live out a full 25 years in retirement. Thus it is possible that some people who are working hard because they are currently say 61 and "only" have 21 times their desired salary saved up could conceivably at least cut back a bit. No point in overworking to "have enough" in retirement only to then cut that time short due to health concerns related to overwork.

In summary, Mr. Terhorst has pioneered FIRE for an entire generation and has now lived at least half of his life in retirement. Though many people perhaps do not have the opportunity to live internationally like he and his wife have and the investment direction provided in the book is definitely out-of-date in modern times, he nevertheless provides a vision and a blueprint for a way of life that would be immensely beneficial to follow, even for those who want to keep working! Living off of investments benefits not just those who are retired, but everyone who is able. The more people who get exposed to that truth, which is the true American dream (as opposed to the white picket fence vision), the better society as a whole would be.

Disclaimer: I am not a financial planner, please make sure you seek one out before making any financial decisions.



28 November 2017

Leaf Life

As promised in my last post, we've had the Leaf for over seven months now which I believe should be long enough to provide a decently reliable review of the experience of owning it and an EV in general. So without further ado, here goes.

Topping up on electrons.
Although the industry is rapidly advancing and this post may very well be outdated within a year, the current state of EV ownership likely will require some changes for most people to provide time to accommodate reshuffling the electrons around in the battery. That time can vary greatly depending on the source of power and the options available on the vehicle itself.  While this isn't intending to be a post completely about charging or physics, I'll go over the basics along with links to further resources.

In general, there are three recognized "levels" of charging for EVs: Level 1, Level 2, and DC fast, which is sometimes referred to as Level 3. The latter is known as Supercharging for Teslas and there is an emerging ultra-fast charging option as well, though no vehicle yet available can actually use it. Back to the levels, Level 1 is standard wall outlet and basically every EV sold comes with an adapter (technically called electric vehicle service equipment or EVSE) that will plug into the wall and direct power into the battery. However, most wall outlets provide a maximum of 12 amps which means a charging rate that realistically caps at a hair
Destinations with chargers are great!
over one kilowatt (kW). While that might be fine for operating a blow dryer, the battery on the Leaf is around 24kWh*. As a result, filling its battery requires nearly 22 hours when completely empty on a Level 1 charger. As such, Level 1 really isn't a suitable charging solution for those who drive enough to require more than 10 or so hours per day of charging and/or don't have access to an outlet where they park their car.

In contrast, Level 2 charging can go much faster. The early Leafs only were able to utilize 3.3kW L2, but newer ones improved that to 6.6kW and other options such as the Chevy Bolt and VW e-Golf have the ability to utilize up to 7.2kW. My 2013 Leaf can accept up to 6.6kW which means that it is able to be basically fully recharged from empty in about three hours.

DC fast charging (DCFC), uses a direct connection to the battery to pump power into it at a much higher rate. (L1 and L2 supply AC power which must first go through the inverter to be converted to DC before it can be stored in the battery.) On the Leaf, that's stated as a maximum of 50kW, but it's faster in other vehicles such as the Ioniq Electric and of course, Teslas. However, it was also an option and unfortunately, the original owners of my car did not choose it. As such, I've been unable to use DCFC thus far and never will on this Leaf because it's not worth the trouble to retrofit.

And that lack of DCFC ability has been the single biggest point of frustration that we've had with our Leaf. While more range wouldn't be unwelcome, the fact that it takes several hours to regain any meaningful amount of charge after going somewhere has been a bigger drawback than the range itself. Instead of taking hours to charge, we would be able to recharge it most of the way in 20-30 minutes. That change would've been welcome on quite a number of trips that we've made since getting the Leaf.

That is particularly true for trips that we might make into the LA or OC areas, which are located at a lower elevation than where we live in the Inland Empire. The journey out is downhill, so we generally don't have a problem getting there. On the other hand, the car notices enough uphill on the return to make it next to impossible for us to get back home from LA on one charge, thus necessitating a stop somewhere along the way for at least the better part of an hour. With DCFC, a stop of less than 10 minutes would provide enough juice to get all the way home with some to spare.

Otherwise, aside from the annoyance at not having the ability to use DCFC for quick recharges, EV ownership has been uneventful and exhilarating. We've gone from spending over $200/month on gas to around $20/month on charging. Many of our charges are completely free, though the money we end up spending on food while it's charging perhaps evens it out. However, we've started eating at home more, which will finally provide more of the promised savings.

*Except for BMW, companies state the battery capacities (for better or worse) in kilowatt-hours (kWh). As the name implies, a kWh is a measure of how much power, measured in kilowatts (kW), was used in an hour. (One kilowatt is equal to ten 100W light bulbs and leaving them on for an hour would consume one kilowatt-hour of energy.) Instead of kWh, BMW uses amp-hours (Ah) to measure the size of the battery in their vehicles. In the same vein as kWh, Ah measures how many amps are drawn for an hour instead of how many kilowatts. Amps is a measure of current, (kilo)watts measure power. The relationship between the two is determined by the voltage, with amps x voltage = (kilo)watts. If any of the two are known, then the third can be derived from multiplication or division. For reference, modern EV systems run at 400V.

16 April 2015

Top 5 Ways to Hide Your (Money-Related) Depression

Those of you who are un(der)employed know the story well: the bills keep mounting with no end in sight because you don't have enough money coming in to cover them. To make matters worse, all attempts at finding employment are complete failures as well and then something catastrophic happens that wipes out all your reserves. While sure, you could take advantage of the mental health portion of Obamacare, that screams of desperation. Although the struggle is real, you're not actually desperate and you might even become an hero if left alone. Never fear, these five steps will help you to keep anyone else from knowing about your problems.

Smile so that no one knows.
PC: stockimages.
1. Act Happy

It shouldn't be a shocker, but if you start acting stressed and worried, people will ask all sorts of probing questions about if you're alright and what's wrong. To avoid this invasion of privacy, always make sure that you fake a smile when you're with people, especially family and friends.

2. Hang Out

Drastic changes in routine can sabotage the best attempts to keep the fa├žade together. Avoid suspicion and "serious talks" by continuing to do the same things that you always have. If you can't afford to participate in quite the same way, keep up appearances with cheaper-but-still-adequate alternatives.

Starting a drug habit will lead people to think you have
a problem. Don't do drugs. PC: marin.

3. Stay Away from the Four Horsemen

The four horsemen of personal finance can quickly burn a hole in your wallet, possibly even other parts of your body. Suddenly taking up a new vice looks suspicious and screams "help me". And it might be expensive. You don't want that kind of attention, so just make things easy and stay away.

4. Change the Subject

Inevitably, some people might think that something is really wrong and will try to pry into your privacy to get you to admit it. To keep that from happening, take extra steps to keep conversation from going that direction. If necessary, change the subject and follow step number one.

A change of scenery never hurt anybody.
PC: moggara12.

5. Leave

Cut off all contact and go somewhere where no one knows you and start a new life. Preferably to somewhere off the grid, as it will be hard to establish life in a modern society with lots of lodestones around your neck. There, you can participate in a sharing/barter economy that will value you based on your contributions.

09 April 2015

4 Careers that Automation will Render Obsolete

The integration of technology, robotics, and the Internet of things into everyday society provides some exciting opportunities for the betterment of all. At the same time, several industries that currently employ many thousands will no longer do so as those jobs become doable by a machine. While hardly the first time that has happened, it will probably result in the biggest shift since the Industrial Revolution. The list spans all levels of society. The loss of jobs in an industry certainly isn't great for those affected, but they can prepare for the inevitable by updating their skills as the industry changes, transition to a new industry, or plan to "retire early". But another big part of preparation is realizing that you're in the cross hairs to begin with. Below are four professions that should start planning sooner than the rest of us.

1. Taxi driver
This scene will become rare soon. PC: stockimages.

The rise of "ride sharing" services such as Lyft and Uber has already gotten traditional taxi services shaking in their driver seats. Just wait until Goober hits the streets. Some enterprising individuals will certainly buy a self-driving car, sign up as a driver on the service, then let the car loose on the streets. As the technology moves beyond just being autonomous to full artificial intelligence, the cars will also take themselves for service too. All without a human behind the wheel.

2. Cashier

While some merchants will undoubtedly always have a person behind the counter, many will increase the number of automated checking machines in their stores in the future. This one has been a long time coming, but interest may increase in the coming years now that minimum wage increases are in vogue again. Despite the fact that several high-profile notorious low-wage employers recently announced voluntary hikes in their minimum wages, they are almost certainly also looking at ways to increase productivity in tandem and get more work out of the current employees, including by hiring fewer of them in the future.

There will be fewer opportunities to
to scale ladders in the future.
PC: potowizard.

3. Firefighter

Firefighting forces of the future will feature fewer people jumping down the poles when the bell rings. The Navy has been working on robotic firefighters for years now. Additionally, advances in building codes as well as the Internet of things will make large conflagrations less likely in the future. But that ignores the fact that at present, most fire departments decidedly do NOT deal with fires on a regular basis at all. The vast majority of calls are instead for medical emergencies. While some fire departments do have actual ambulance companies (not just a paramedic on a pumper truck), a lot of emergency transport of many people is ultimately done by a private ambulance company.

There will also be fewer collisions for them to respond to on the roads of the future. Autonomous cars are part of a push to create safer streets and drastically reduce the death toll on the roads. Less collisions is a welcome part of that, but firefighters will find themselves twiddling their thumbs more often. However, as municipalities continue to search for ways to control costs, the necessity for firefighters in the current shape and form will continue to come under fire.

4. Transit Operator

Sorry folks, if you currently drive a bus or especially a train, your days are numbered. High-profile cases in recent years that resulted in many deaths have galvanized America to the "danger" of transit. But almost all of those were attributed to human error. Much like in driving, the controversial removal of humans will likely result in much safer operations. Many automated rail transit systems are already in use worldwide, including some that have human operators only as legacy positions. With more automated systems coming online and automation coming to even the freight railroads, it will become much harder to demonstrate a need for their to also be a human in the cab.

Conclusion

Eventually, the robots are coming for us all. Just as icemen and others have all found a reduced demand for their services (though milkman is making a comeback), many more of us will also find ourselves in the same situation. The great part about financial independence/retiring early is that it future-proofs against the loss of income such as when a position gets cut for good. It is imperative that one prepares for that eventuality by working toward developing an income stream that will fund their lifestyle. When that day of the pink slip comes, it will certainly be very emotional as people hang up their hat or close doors for the last time that are never to be done again. Nevertheless, it will be much easier to accept knowing that the end of an era is the beginning of a new and relaxed way to live, possibly even the beginning of a new adventure.

07 January 2015

Hump Day Haiku: Help

Congratulations and welcome to the new year! We made it and 2015 is already a week old. Still within the time frame where everyone slips up and writes "2014" on paperwork, so hopefully you get that figured out soon too!

Help
Help is on the way!
A guide to get through this mess,
Look in the mirror.