Frugal is the new green

     It might come as quite a shock to you to learn that I am kind of a cheapskate. Having grown up in a working poor family, and made it myself to the working poor class, I finally had eventually come to the realization that money isn't all that matters. Actually beyond a certain minimum threshold,  money doesn't matter much at all.

     What is that minimum threshold? Having a safe and clean shelter to be protected from the elements, nutritious food, healthcare, and access to entertainment like books and culture. Beyond that I feel like it doesn't probably matter too much. That's why last year I decided to wear only clothing that cost less than $5 per piece if new or to buy used from stores like goodwill. Didn't do too badly at the challenge either, but I did end up having to buy two new scrub tops thanks to a change in jobs, unfortunately $25 each.

     So I spent the year wearing mostly recycled clothing, which was fine.

     I also spent the year handwriting my clothes and line drying them, to save money.  The washing part doest save all that much money over using the clothes washer but the line drying definitely saves a lot of money. 

     So I spent the year hanging clothes outside, which was fine.

     I harvested a lot of water hyacinth and ginger leaves from the garden to cook up and eat, and I grew a large portion of the duck and rabbit diets in the yard. 

     So I spent a lot of time eating organic growies in the garden, which was fine.

     I enjoyed listening to quite a few podcasts and articles for free online, and rented dozens of audio books from the library website for free. Which was fine.

     I bake bread from scratch and homebrew wine. This year I have mastered the art of making homebrewed wine from frozen concentrated grape juice, which I have to admit, is kind of amazing. Also apple juice. For the bread I like to use the breadmaker for easy clean up. I have learned two things about homemade bread this year - that if you add too much yeast that will result in a problem and that the knife for slicing really matters ot you will awful slices.

     Which was fine.

     I don't have a gym membership. I think that gyms cost a lot of money and they usually require driving to get to them, which I usually don't want to do. Besides then you are around other people, and it can make me self conscious to be all sweaty and wild hair when I work out. So I have a kettlebell and a rowing machine and a few other pieces of exercise equipment, which has more than paid for themselves. 

     So I worked out a lot for nearly free. In fact, this scale app says I'm doing pretty good for my age, don't be jealous. So that's fine.

Reddit Author Discloses Screenshot of his Roth IRA Dividend Investments, $637 per year

     He didn't exactly say what his total amount was in his investment account, but he kind of said about $14k, but we do know that he is a normal person with a normal job, not a doctor or lawyer.

     What I like about this post is that it reaffirms that I am not the only one going down this rabbit hole. Also it shows that it is possible to get some great returns with strategic planning. Sadly, he got a lot of nagging regarding the fact that it will take him his whole life of Roth IRA contributions to get to his goal of $6k of income a month, which is a high goal. People were overly critical and negative too, sadly. Probably jealous.

     *writes down all his top positions*

     *writes down all the commenter top suggestions including SCHD, PSTL, CSCo, VYM, VIG, NOBL, DGRO, MO, O, GAIN, JEPI, QYLD, ENB, BCE

      My goal is about $10k of income per year. That's what I need to retire. That might be too hard to do with dividend investing, but I can try.

     What's your savings goal?

     The original post is here

How I managed to have no tax burden for 2022, and you can replicate this too!

     Shockingly, I just finished up my taxes with a little bit of help from the H and R block website, and discovered that I owe no taxes and will be getting back all the money that I put in. I say put in, but really it was taken from me because of exemptions.

     How did I manage to lower my tax burden? A few ways. 

     For one, I was able to claim Head of Household. This is the first time ever that I have claimed Household, because I have always let my kids fathers claim them. But this year I claimed one of the three children, and was able to receive the now reduced $2k credit.

     Secondly, I contributed to the company's 401k plan. I also contributed to a Roth IRA. Between the two of them I was allowed to take the Savers Credit, which is for low income filers and couples who contributed to retirement savings. I would not have qualified for it if I had made another $5k in income or was not Head of Household. Tough criteria to meet. Interestingly, I had to stop using the H and R Block software halfway through my tax return because it wanted me to upgrade in order to help me with my Savers Credit, which I discovered was entirely stupid. It told me I would only get a $200 credit also, as it wasn't factoring in the Roth IRA. Thank goodness I went and printed out the form and discovered my credit was much much higher, about 10% of the amounts that I had contributed to both accounts.

     I chose the standard deduction. It's $19k for my income bracket, which since my property taxes were low wasn't that much of a big deal.

     I cat wait to get my tax return back. I am going to use the money to fuel this year's Roth IRA contribution.

Bread Machine Cinnamon Raisin Bread

• 1 cup water
• 2 tablespoons butter, melted
• 3 cups 🍞 flour
• 3 tablespoons sugar
• 1 1/2 teaspoons salt
• 1 teaspoon ground cinnamon
• 2 1/2 teaspoons bread machine yeast
• 3/4 cup raisins or craisins

     Put all the wet ingredients into the breadmaker. When adding the cinnamon, consider halving the amount and adding allspice and cardamom to make up the difference. Put the breadmaker settings to 1.5 pound loaf, light crust, sweet cycle. Add the raisins or craisins when the machine prompts you.

      Really good with peanut butter and jelly. Or peanut butter and honey.

Baby Rabbits 2 January 2023

     They are doing quite well, survived their first night of freezing temperatures and fit in the palm of the hand. Still haven't yet opened their eyes. I'm really looking forward to their help in the garden this spring.

Baby Rabbits, January of 2023

     These kits are fresh outta my backyard. Their mother is a Rex rabbit and their father is a New Zealand red. It looks like there are 7 kits with two of them looking awfully dark brown and the rest fairly red. In the next mo th, I will be weaning them and starting them on pellet and green growies from the yard, just like their parents eat.

     People as me what I do to care for baby rabbits,  and the answer is not It Depends. What I like to do is provide optimal nutrition for the mother at all times and let her take care of them. I have her cage wired with barrier hardware cloth around the bottom and the lower portions of the sides, as I have had kits fall out before. This batch of kits are in a plastic basket I bought, which got a little bit chewed on he top but so far so good.  The baskets were about 7 to 10 each, I had to try something being as how rabbit nest boxes are more 25 each and only good for one or two litters before the wood is soiled. I will let you know how durable these plastic baskets are and if they are a good deal. Isabella bunny figured it out right away and lined the basket with leaves and fur, and is keeping the kits covered with (grey?) fur.

     I hope to sell them, any not sold will be lawnmowers for my yard. I really can use the additional help with cutting and mowing. I was saddened after I sold the last batch and realized that I didn't have their help anymore in the tractor with cleaning and weeding the yard. I have even been toying with the idea of buying an expensive cordless lawnmower like this one because I can't keep up with the yard with my crazy work schedule and kids.

     I guess I will sell them on Craigslist? If anyone has a better idea please let me know.

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