What is an ESPP and what can I do with it?

     I have been working for Megacorp Hospital Chain for several years now, and I have failed myself in taking advantage of one of their biggest perks. Not just drinking all the coffee, eating all of the doughnuts and peanut butter and jelly sandwiches, but rather, the Employee Stock Purchasing Program.  

     I guess I didn't try to learn about it sooner because I couldn't figure out why anyone would want to own stocks of the company, as if that was some kind of company gimmick to make employees more invested and work harder. While I still believe that to be true, what I didn't know at the time was that you buy the shares of your company at a 10% discounted rate. Or at least, that is what Megacorp Hospital does. There are no requirements for how long you have to hold onto the stock, and the shares are bought by payroll deduction. You have to use their broker though, which is unfortunate.

     The coolest thing about Megacorp Hospital shares is that they are dividend bearing, not that I plan to make a fortune on it. 

     At the beginning of November I enrolled in the ESPP for a total of 2% of my wages. That may be too much, but I can always sell the stocks and get that extra 10% bonus and reinvest in something else. Which I will no doubt have to do, because one does not want to be too invested in one particular kind of stock, like healthcare.

     Some people would say that the best time to sell your shares of company is on the day you receive them, because one cannot predict volatility in the market. That might be a wise move unless you think your company is only going to increase in value.

What is a SEPP distribution and what can I do with it?

     I think that the idea of SEPP distributions is just life changing. SEPP stands for substantially equal periodic payments, and it is a way of accessing your 401k or IRA monies before the age of fifty nine and a half. More importantly, it will not incur any penalties to do so, though the distributions are taxed as income.

     What is this? How come I have never heard of it before? Maybe because it has a lot of rules, most of which are mant to keep you from doing this. For example, once you start using the distributions you can't turn them off until 5 years have passed or you reach the age of fifty nine and a half, whichever is longer.  So if you start using the distributions at 58 you have to continue to use them until 63, no matter what. 

     Why would anyone want to do this? Well, I can see two possibilities reasons. One, the person becomes disabled and wants to boost their income by using the 401k money sooner rather than waiting. Two, the person is trying to retire early and this is one method of accessing the 401k money.

     So let's say I become disabled tomorrow. Don't scoff, I drive a lot for my job and anything can happen.  After I get home and discover I can no longer work I decide to use my 401k to cover my expenses, forever. This decision can't be taken lightly, because you basically can't turn it off, and it will slowly drain away your 401k until there is nothing left. If I put my information into the calculator here I get

-- $98K, the average amount of money americans have in their retirement accounts

-- Interest rate 0, for the minimum distributions.

-- Life expectancy, I am 42 now and plan on living until 78, the average life expectancy for a woman. That would be 36 years.

     And calculated using the IRS guidelines, the amount comes out to be... $2,722.22. Underwhelming to say the least. 

But two thousand dollars is more than enough money to pay the property taxes, and the remainder would be a good amount to save every year to cover costs of home repair. It's not nothing. It could prevent someone from being homeless. And as a survivalist, I feel like this is pretty cool information to have.

     One kind of excellent lifehack for this idea would be to have several 401ks or IRAs and use the SEPP on just one of them. That would let you have your most basic expenses covered by the 401k that the SEPP is attached to, and the other 401k is the one you will use for discretionary spending say at the age of fifty nine and a half. You could even roll your 401k over into two or three tradional IRAs, with one of them paying out the SEPP to cover your housing and utilities and food forever,  allowing you to retire early, or at least fee confident that you could if you wanted to do so.

     What are your annual expenses, and what would you have to have in savings to achieve them? This is a great question, and it's individual for everyone. Assuming I have no car and bike or bus everywhere I need to go, also assuming I'm not paying for all the children's costs, mine would be, let's see, $1300 for property tax, $600 for phone, $900 for electric, $600 for water and sewer, $4800 for health insurance, guessing $2400 for food. That comes out to $10,600 with no car. Much less than most people I am assuming. 

Putting that into the calculator you would get

$384,000.00 needed for early retirement.

     Kind of sobering numbers. Something to think about.

Real Estate Investment Trusts

     I would really like to start learning more about Real Estate Investment Trusts. They are not like traditional real estate investment, where a person owns a house and rents it out in some way like traditional lease or air bnb. The traditional way seems extremely messy and time consuming, plus frustrating when you have to clean up after tenants who leave a lot of broken furniture and garbage. The houses in my neighborhood are like this, it seems whenever I see someone moving out from my neighborhood there is a yard full of broken furniture and trash bags sitting in the easement.

     Real estate investment trusts are an investing tool. They are companies that own and usually manage income producing properties. And to avoid income taxes, they distribute 90% of their earnings to their investors. 

     There are private and public REITs. For simplicity sake, I am only going to focus on the publicly traded Trusts.

     The NAREIT website has a complete list of REITs, and you can sort it by public and private. 

     So my plan is to invest in senior living REITs, particularly any that involve those big 55+ apartment complex and independent living facilities. I know that people are saying there are going to be fewer and fewer retirees utilizing those resources, but from my perspective I just see more and more people moving there. I see a lot of family disconjugation and seniors unable to take care of their homes, and these senior living complexes are a perfect solution. 

     I can also see the benefit in investing in hospital and medical office real estate. They seem like pretty reliable tenants. 

     I'm conflicted about commercial real estate. Seems like there's plenty of vacant spots all over town.

     It would be interesting to invest also in residential, as there is definitely a current demand for housing. That's why three adults and a toddler live in the two bedroom house next to mine. 

     The best website that has an active index of REITs is the NAREIT, where you can sort all of the known REITs by public versus private and what class of real estate they specialize in.

     

Recipe: Chargrilled Coconut Mouse

     I was trying to convince someone I know that eating mice/rats might be the way to go for long term protein stability. It's good enough for cats, right? Besides they reproduce like rabbits.

     Then I discovered that in Vietnamese cooking, eating rats is already a thing. Makes sense, because their climate is not all that different from the eastern seaboard. And if you arent eating fish then you arent getting a lot of protein both here and there.

     This website is Australian but the recipe is Vietnamese.

     I haven't actually tried the recipe myself, but I want to!

     Chargrilled Coconut Mouse

Living off grid in an RV, it is possible!

     Not long ago I was out and about, andI happened to see this amazing example of off grid living. The owners of this RV had hooked up several minimally sized solar panels, presumably to provide for or supplement their electricity needs. 

     Alas, I did not have time to as them how their setup works. I did find out that the RV park where I found this is one of the most reasonable around here, supposedly about $3,500 per year. That price includes water and sewer, use of the amenities which include a pool. Barrington Hills.

How to save money by brewing your own wine

     I was pretty excited to find grape juice available at the big box store near my house again. It has been sold out for months, but obviously November is a month where surplus abounds in the world of frozen concentrate.

     "Frozen concentrate grape juice?" you gasp in shock.

     Yes frozen concentrate grape juice. I had previously read that you couldn't use it to make wine, but I have since disproved that to be a myth. It certainly does ferment and well. 

Each frozen concentrate grape juice container makes approximately 48 ounces or one quart of juice once rehydrated. Cost per quart $1.86. Cost per gallon $7.44. 

      You will also need one packet of winemakers yeast, though I have heard that you can use breadmaking yeast. I should do a post about that experiment sometime. Amazon has champagne yeast $7.99 for 10 packs, cost per pack is $0.79.

      You will also need a fermenting bucket or carboy and an airlock. These are not different from the beer brewing supplies and so are cheaper to buy them that way. They are one time purchases and pay for themselves after a few batches.

     Place the room temperature grape juice in the brew bucket. Add yeast. One packet of yeast will brew about 5 gallons of wine. No need to stir. Put the airlock on. Wait 2+ weeks.

     Total cost for one gallon of wine equals an astounding $8.24! Beat that, box wine. Plus, since you didn't add any sulfates or problems the homemade wine is a lot more natural than the storebought bottled wines.

Save money by making popcorn from scratch at home!

     When I was a kid, my family was given a hot air popcorn machine, and I was fascinated by it. It was loud, and hot, and hot pocorn shot out of the side into your waiting bowl. After we had played with it a few dozen times, I finally figured out that the machine was basically a hair dryer shooting hot air over the kernels until they popped. Cool engineering, but not very energy efficient. Heck, nowadays I don't own a hair dryer and I don't own a popcorn machine. 

     Later they invented microwaved bagged popcorn, and I have to admit that I used to love to eat this. As an adult, I never eat this! They are loaded with polyunsaturated fat and salt, which none of us should be eating. So I went on a quest to make the perfect home popcorn with no additives.

     I tried to cook popcorn on the stove. Several messes later I decided maybe microwaving would be better. I set no less than two hand towels on fire in the microwave until I discovered this technique.

     Find your favorite covered glass dish, whether new from the store or used from the thrift store. Cover the bottom of the dish with one layer of kernels. Add a dash of your favorite oil and spices if desired. Cover dish with its lid (not a towel) and put in the microwave on high for 4 to 5 minutes. Each dish and microwave varies, so you will want to work with your setup until you find the exact sweet time to pop about ninety percent of the kernels without burning the rest. In my 1.5 quart dish from Walmart it is exactly 5 minutes. Use towels to protect hands when removing from microwaving, take off lid and let cool, and then done! My kids like salt added, spices, honey, and other things. I like plain.

These prices are from the Walmart website.

PopSecret family pack 12 packages for $6.18, cost per serving $0.52.

Popcorn from scratch, cost of additives negligible, Great Value Yellow Popping Corn 32 ounces, serving per container approximately 13 of the 4 tablespoon size, $2.28, cost per serving $0.18.

     After mathing this up, it is clearly better to make popcorn from scratch and have no added chemicals. As a bonus, the kernels last for years whereas the popcorn bags go bad in less than one. The first time I tried to cook up old gross popsecret was probably the last time I cooked up bags of popcorn.

     I bought this dish many years ago from Walmart. Im surprised I haven't broken it, considering how often it I used and how my house is the place glassware goes to die. Thy have a similarly sized glass dishes with lids for about $30. Or better yet shop your thrift stores.

     By the way, you can't pop dent corn sold as animal feed. It's unpopable. Read all about that here.

Roth IRA Conversion Ladders

      I definitely need to learn more about this idea. I really like the concept that you can withdraw at any time to help pay for health insurance costs.

https://www.investopedia.com/how-roth-conversion-ladder-works-5214808

     Over the years, I have been religiously placing the maximum amount of after tax money into Roth IRAs, which I had thought was the smartest thing to do. As long as it sits in an account somewhere for I believe 5 years, you may withdraw the bulk of it to use as you please. In the past I have only ever withdrawn the money once, and that was to pay down on my mortgage. Some would say that was a bad move, but ultimately it set me up a lot closer to my financial goals than you would think. And if you figure out what your future costs of living are going to be, then you can set yourself up to withdraw that amount every year. Or most of the amount.

     Recently I learned about the Roth IRA conversion, which is a way to move money out of a 401k (pretax money) and into a Roth IRA (post tax money). Why would you want to do this, as you are going to be taxed on the distribution as if it were income? The truth is that you wouldn't want to do this move if you were working and earning income, as it would raise your taxes. You would want to do this if you are retiring early and have no income, but you want to use your 401k money to live off of. You would withdraw just the money you need to live from for each year, then it must be held in the Roth IRA account for 5 years to avoid penalties. During the first 5 years you would have to live off some of your other invested money before your 401k turned Roth IRA money becomes available. And each year you would rollover another future year of living expenses to be held for 5 years and then used. Doing this conversion does incur income tax burden, meaning, you will have to pay income tax on it as if it is income.

     Sometimes it can help to see some numbers associated with something like this. Here is a graphic I found on the web, this assumes your annual expenses are about $50k. I have already worked out my potential future annual expenses assuming I don't move and don't have a car Mr. Moneymoustasche style, is about $10k, with the bulk of that being the cost of health insurance and food.

     I find this trick to be ingenious, as you are not normally allowed to take any distributions from your 401k until age 55, as long as that is your current job you are retiring from, or 59 1/2 otherwise. 

     I tried calling my 401k company and rolling out some of my money into a self directed IRA or conversion, but they wouldn't let me! They said I was too young. But they also said if I was a former employee I could do whatever with the money. Way to go, hospital organization, why don't we just encourage healthcare workers to leave by holding their 401k money hostage and not allowing them diversified investments? Whoops was that out loud?

Do Ducks Eat Shrimp Tails?

 

     They absolutely do love to eat raw shrimp tails and shrimp peels.

Utilizing Food Waste on the Homestead

      The kids have been driving me crazy lately with what they will eat and what they won't eat. Literally worsened by the idea that their other family just gives them whatever they want, even going so far as to leave the house to drive to get takeout for them. Obviously I am not a fan of this kind of thing, nor am I a fan of encouraging picky eating. So I decided in my frustration to just start cooking whatever I want for myself, and if they don't like it then they can make themselves sandwiches. Mmm... sandwiches.

     The high prices of foods have also changed my life. I used to shop at the good grocery store that had everything, now I shop at two stores to save money, Walmart and Sav a Lot. I particularly enjoy how Sav a Lot has a huge Latin section with dried peppers, tortillas, and many other staples being really inexpensive. One day at Sav a Lot the freezer section had a big bag of frozen whole tilapia, very cheap. Of course, I knew that I wasn't going to get much usable meat from those little fishes, but it was kind of an experiment too, as I wanted to see if the cats would dig in. 

     I got the fish home and defrosted them, the my oldest saw them in the fridge. She, of course, hates me and everything about my life as she is a teeny ager right now. She looked at me like I was absolutely crazy when she found the fish. But then she offered to do the gutting and skinning which she wasn't too bad at. It turns out you have to have a really good knife for skinning, which I have since picked up from Walmart for a few dollars. 

     So the skin and heads and tails and fins all went into a bowl for the cats. Another thing I learned from this experiment is that my male cat who loves ham, sliced turkey, and cat treats will not eat fresh fish; my female cat who loves ham and bits of chicken, will eat fresh fish. She will only eat three small bites before she is full though. I should retry this picky eating with two hungry cats who have had an empty food dish for a few hours.  🤔

     I put the rest of the fish pieces outside for the ducks to eat, which they quite enjoyed. And I learned that the ducks love fish but they prefer it to be cut into bite sized pieces. The heads, which I had not cut up, stayed in the dish for a while before they disappeared into the compost. I don't think they ever did get eaten. But the fins and tail and spine all got eaten.

      So now I deliberately buy foods that have waste so I can feed it to the ducks or rabbits. For example, did you know ducks like to eat shrimp peels and tails? Who knew. And the rabbits absolutely love banana peels, orange rinds, and apple cores. These guys turn waste foods into compost.