Blog - Lazy Man and Money

The Best Personal Finance/FIRE Book You’ve Never Heard Of

October 29, 2018 by Lazy Man 7 Comments

You probably know that I’m not a fan of clickbait titles. That’s why I didn’t use a clickbait title.

Let’s make a deal. If you’ve heard of this personal finance book, you stick around as a reader. If not, I’m okay if you click away angry and never come back.

Have you ever heard of If You Made a Million by David M. Schwartz? It’s illustrated by Steven Kellogg who happens to have written and illustrated one of my wife’s favorite books, The Mysterious Tadpole. My wife read it when she was a little girl. Our own kids are very familiar with Alphonse.

By now you may have realized that If You Made a Million is not about helping adults understand money. It’s about helping children. But please don’t click away just yet. If there’s one thing I’ve learned over the last 2 years, it’s that adults can learn quite a bit from children’s books.

Let’s dig into what makes If You Made a Million so special. (By the way, I was not paid to write this review. I simply saw it at the library. I will however make a small commission if you purchase the book from the above link.)

If You Made a Million

Before I get started with the review, let’s get a very important number out there: 1989. That’s when If You Made a Million was written. Yes, the book is as old as Taylor Swift. It is also three years older than Your Money or Your Life, which is often considered the first FIRE book. It was also written 6 years before Suze Orman wrote her first book.

Being old doesn’t make things good. (This blog is living proof of that.) Let’s get to the actual content.

Overall, the book takes a child on a journey of earning and spending money. It starts with feeding a fish a penny, which will allow you to buy one of a shyster’s pebbles. It continues to educate children about coins with increasingly more difficult jobs and ways to spend the money. These first few pages are fairly boring, but they go quickly since there’s only a sentence or two on each page. It’s an important to build that foundation.

Once you get into earning a dollar, the book tells the story of compound interest. Here’s the first one:

At ten dollars, the compound interest story gets a little more exciting:

At one thousand dollars, the idea of checks and how they work is introduced. It’s simply much easier than carrying around a wheelbarrow of coins or even a bunch of bills.

At fifty thousand dollars, we learn about how mortgages work:

There’s a little more to mortgages. Specifically it shows how you keep giving money to the bank year after year for 40 years. The illustrations show the old man still physically bringing his check to the bank for his castle payment. It also explains that, this time, you are the one paying interest to the bank.

Finally we get to the FIRE part of the book. It only takes six sentences. The first four are:

“If you have some very expensive plans, you may have to take on a tough job that pays well.
If you think ogre-taming would be an exciting challenge, you can have fun and make a great deal of money, too.
Of course, you may not enjoy taming obstreperous ogres or building bulky bridges or painting purple pots.
Enjoying your work is more important than money, so you should look for another job or make less expensive plans.”

Remember what I wrote before about adults learning from children’s books? That last sentence is “Exhibit A” of that.

I promised you six sentences. Here’s two more:

Did you catch the financial independence message there? Having that kind of passive income gives you the option to not work at all, but maybe you should choose the work that interests you because doing nothing could be boring.

There’s a quick concluding page after that to get children’s minds thinking about what they’d do if they made a million dollars.

Final Thoughts on If You Made a Million

I found it surprising how well the math from 1989 holds up today. Obviously the banks aren’t paying 5.25% interest like the examples. However, we often work with similar (or even larger) interest rates assuming more risk and different asset allocations.

Also, the one million number at the end might not seem like enough today. However, it is $2,034,157.94 in 2018 dollars. You’ll often see $2 million as the target number for FIRE, so the one million number from 1989 is solid.

After the story ends, there’s a significant section of “A Note from the Author.” Here you get about 1500 words on each of the themes in the book: why money?, how banks work, interest and compound interest, checks and checking accounts, loans, and income tax.

Finally there’s a huge explanation on how he calculated some of the amazing numbers used in the book. These are things like a million dollars in pennies will stack 95 miles high and a million dollars in quarters would way as much as a whale. If you love geeky math, this is fun, but you could choose to skip it and still get all the financial lessons.

Now that you have a good understanding of If You Made a Million, I have two questions:

1. Are you going to live up to the deal and stick around as a reader?
2. Did you think my title was clickbait or just spot-on analysis?

Let me know the answers in the comments.

Job Search Journey: Search for Stability

October 24, 2018 by Kosmo 4 Comments

This is a continuation of Kosmo’s Job Search Journey.

The Whole Job Search Series:
1. You’re Fired
2. Assessing the Situation
3. Networking
4. Learn
5. The Interview
6. Frustration
7. Success
8. Sink or Swim

When I last spoke to you, I had begun contract position with one of the leading employers in the area.

Although I had a bird in the hand, I was also pursuing a bird in the bush – a permanent position.

I have been actively pursuing other positions. In the last few months, I have advanced to the final round of interviews three times, with vastly difference experiences.

One employer contacted me five months after I had initially contacted them. I had the standard conversation with the recruiter, took a Wonderlic test, and showed up for my on-site interview on a Friday afternoon. Unfortunately, the hiring manager seemed very ill-prepared. She asked only a couple of questions – neither of them very probing. I asked questions about the specifics of the position in an effort to keep the interview alive, but it was obvious she had no interest in being there. I’m not sure if she just wanted to get out of the office and go home for the weekend, or what. Not surprisingly, the company ghosted me after the interview. Note: the Wonderlic questions were much more simple than I would have assumed. It’s more a test of how quick you can think, as opposed to testing the depth of your intellect.

Another company also contacted me months after I initially applied. In fact, they had already told me I wasn’t being considered for the position. It turns out that I was overqualified. They were looking for a junior level (cheaper) analyst and eventually came to the realization that they needed a more senior person. Once again, I took an assessment and was called in for an in-person interview. Unfortunately, the types of questions that were being asked made it clear that I wasn’t a good fit for the position. They were looking for someone who was primarily a training specialist with experience rolling out off-the-shelf software. My core strength is helping design new software from the ground up. Once again, I wasn’t terribly disappointed that I didn’t get the job. I don’t think I would have enjoyed it.

Another company contacted me less than a day after I applied. This company is a major player in the education space – a company you’ve almost certain heard of. Although they pay a bit less than some of the for-profit companies in the areas, they have a nice set of benefits, include 30 days of PTO for new hires. From the start of my search, this company was among the top two companies I was pursuing.

The HR rep contacted me and arranged a phone interview for the next week. When he called, I missed the call – because he called on the wrong day. I was able to touch base with him about ten minutes later, and he was apologetic when he realized his gaffe. He was willing to called back the next day, but I offered to go ahead and do the interview right then. What better opportunity to prove I could think on my feet and not be rattled by the unexpected? A few days later, I was notified that I made the cut for an on-site interview.

My on-site interview was nearly perfect. I was very comfortable and answered all of the questions well. There were a couple of questions where I didn’t give the exact answer they were looking for, but I could tell by their reactions that my answers made them think, and that they had a positive response to the answers. One of the interviewers had Googled my email address and tracked down my blog, and then found the sites where I did freelance work. She even read a few of my articles on this site! (Hey, Jen – hope things are going well for you and your team.)

I was very confident that I had landed the position. Unfortunately, a week later, I found out that someone else got the job. A friend of mine who works for the company told me that I was strongly considered, but in the end, they hired someone who had previously worked for the company. That’s understandable, because the group dynamic is very important, and there’s value in having some certainty regarding how someone will mesh with the team.

I’m optimistic that I’ll find a permanent position soon. If nothing else, these interviews have given me practice for future interviews. I’m much more confident in interviews than I have been in the past. Now as see them as an opportunity, instead of a necessary evil.

In the interim, my contract position continues to go very well. I am establishing myself as someone who is ready, willing, and able to handle any challenge and also willing to mentor others. It has probably been the most productive half-year stretching of my two decade career.

Are you a Middleton?

October 23, 2018 by Lazy Man Leave a Comment

I never blog about people starting a new website, because that happens all… the… time…

Today I’m going to break that (self-imposed) rule. There’s a new website that I think you might want to follow: Meet the Middletons

That’s not the only rule I’m breaking. There’s a couple more, but I’ll get to in a bit. For now, let’s move forward.

What is Money Middletons?

The short answer is that it’s a money website for the middle class. Of course I still believe that Middle Class Income Numbers are a Myth. Fortunately, I don’t think the Middleton police is going to come knocking looking for income verification to make sure you are qualified to the club :-).

Money Middletons is crowd-sourced, which means you can make it what you want it to be. It’s curated by volunteers, so you know that people are invested in it. It’s also covering the best articles in personal finance, so you know that I will never be featured ;-).

There might be a longer answer to what Money Middletons is about, but it’s so much easier to click and see it for yourself.

About Those “Rules”

I think Stephonee (who is launching the website) was looking to make a big media push on Monday. I was distracted by some other stuff, but I hope it worked out well.

You probably don’t know Stephonee. She’s not exactly a household name. However, she’s one of the very, very few bloggers who have been writing about personal finance for the last 12 years like me. I’ve been a fan of Poorer Than You for more than a decade.

As part of the launch there were images and writing guidelines/ideas. You don’t care about logos right? I’ve never been one for writing guidelines either. I feel that blogging is supposed to be about raw writing.

So that’s it, just go to Money Middletons and enjoy.

Junk Drawer Personal Finance #1

October 19, 2018 by Lazy Man 3 Comments

There’s a lot of things going on in the personal finance blogosphere. I know I can’t follow it all, so I’m guessing you (unless you are a blogger) probably can’t either.

For one, I’m not sure if there is much of a personal finance blogosphere anymore or if it is just the same as the FIRE (Financial Independent/Retire Early) blogosphere. I suppose you could say that FIRE is a subset of personal finance. However, there are blogs that I think consider them FIRE who deal with getting out debt, investing, taxes, insurance and just about personal finance topic you can think of. However, not all personal finance is about FIRE, but it certainly looks like that because who wouldn’t want to be financially independent and be able to choose the work they love?

It’s kind of like how all squares are rectangles, but not all rectangles are squares. Except in this case, all four sides are extremely close to equivalent in size.

That was an unexpected tangent.

That was also the point of this kind of article. This is a junk drawer article of personal finance thoughts. I used to do more of these, but with social media they’ve become somewhat less necessary.

Great List of Early Retirement Blogs

Building on that opening, Joe from Retire By 40 has a great list of early retirement blogs. I knew of most of the blogs, but there were a few new ones that I added to my list to follow. Now following it all got even more difficult.

Life’s Not Always Puppies and Rainbows

My favorite article over the last week or two has been Tawcan’s The End. He’s not ending the blog, but he’s working through some personal struggles. It seems like few people ever talk about this stuff personally, but in groups of surveyed data, it seems to be all over the place. I’ve felt some of the same struggles and wonder if it’s related to parenting a couple of very young kids.

Life always has its frustrations I guess, but there was some good thinking if you find yourself in the same place. Yes, it’s a little light on the personal finance aspect of the articles that I usually like to highlight. However, you should definitely watch the Happiness film there as it covers a lot of personal finance.

Bad Personal Finance Celebrity, Bad

A personal finance celebrity/self-described-expert went on a podcast with the awesome Paula Pant and had a bit of a rampage against the FIRE community. We’ll call her S.O. to avoid giving her publicity for what many people thought was a media stunt to launch her new book.

S.O. viewed personal finance and FIRE very differently, loving the first and hating the second. Her rant went on for awhile covering a lot of different unlikely scenarios that could lead to personal harm. They were things like a truck with pipes on the highway having an accident and being behind it. (That can happen despite how much money you have in the bank.) Another example was her own mother who I think she said she spent 3 million in care near the end of her life. I might be misquoting, but it was literally hundreds of millions of dollars.

There was another extreme example of when artificial intelligence takes over the world and there are no jobs left. In that scenario, the thinking was that taxes would go through the roof to support all the things like Medicare and Social Security.

The doomsday scenarios lead Mr. Tako to write a humor satire where Justin of Root of Good Falls to His Death Off a Boat. It was a great price of writing noting that “Life is a Risk” either way. The real risk is getting to age 65, 70, or 75 and missed out.

This continued on for awhile until finally S.O. realized that the “Retire Early” part of FIRE community doesn’t usually mean eating Bon-Bons at the beach at the time. It often means moving to another type of meaningful work. Somehow that alleviates all the problems of a pipes falling off trucks and artificial intelligence.

S.O. was actually correct that a lot of these could occur, and in aggregate might occur to some degree. However, it is the people who have thought about these things and actually planned for them who are most likely to be best prepared for them.

Closing the Drawer

There are a few things that I didn’t get to which I wanted to, so maybe I’ll have to do this again sometime soon. If you could drop a line and leave a comment on this very different style of writing from what I usually do (or see others do), I would appreciate it.

Alternative Income Update: September 2018

October 16, 2018 by Lazy Man Leave a Comment

It’s the middle of the month. That means that I have the final numbers on September 2018 and can finally put this out there.

September is always the “month of change” for us. The boys transition from summer camp to school, which dictates a whole new schedule. It’s also the busy season at my wife’s work. I think there was a span of two weeks where she was home for four consecutive waking hours only once.

Ouch.

While my wife was away, I took the kids to an extreme bouncy event on the military base. A dozen bouncy houses… and they bounced for hours. The kids also learned to swim! I’m not sure there’s a point in time that “swimming” happens, but the new swim school is amazing and it looks like swimming to me.

September was also the month our whole family went to FinCon in Orlando. Financially, it was a less-than-ideal plan. However, I wasn’t going to miss my son turning 6. It’s strange, but sometimes less-than-ideal plans work out far better than one could hope for. The kids got to spend a lot of time with mom, which was important after that busy stretch. They got to do the Crayola Experience and Legoland. We also put in nearly a full day at the hotel pool as a family.

Unfortunately we didn’t get to ride on that Patriots’ Jet.

There’s some truth to the rumors that I wore my bathing suit to a couple FinCon sessions. (It was dry.) One of the transformative things that happened when I turned 40 is that I stopped caring so much what other people thought. The FinCon sessions should have been in the pool anyway, right?

That’s a whole of TMI (on so many levels), so let’s get to the good stuff:

Alternative Income Update: September 2018

For those that don’t know the term, “alternative income”, I started using it around 12 years ago to be purposely vague. I needed something to cover the small amount of blogging income I was making, while I growing my peer-to-peer lending portfolio as an income stream. (The P2P worked for a bit, but I’ve soured on it over the last few years.) Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize the nature of the income. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts… blog posts that often don’t have cool “pinnable” images.

Last month I sprinkled in images from the past month for the first time. I’ve seen other bloggers do it and readers tend to love it. My only rule here is that I’ll show pictures of food if the presentation is amazing, such as an actual size Leaning Tower of Pisa made of grapes and toothpicks. (I will never understand why people take pictures of their food.)

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income where you aren’t directly trading your time for money. This report is about all my alternative income. To include my investments into that paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along… or you can see a more detailed explanation back in January, 2017.

The last month I reported, August 2018, my alternative income added up to $7,104.78. August was just a $25 drop off from July, which was a drop in the bucket.

In any case, August is ancient history now, so let’s move on to more recent history… September.

Lazy Man’s Alternative Income – September 2018

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

Sneaking a picture of the kids in here, just to make sure you are awake. Southwest made them a crown out of pretzel bags and dirty martini olive spikes (not sure there’s a name for them). In any case: LUV, right? (Not a sponsored post and I’m not a shareholder.)

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend many more hours doing things other than blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m doing much, much more now than I ever did at a full-time job. If you really cared to read much more this gives you even more on that. I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. That’s not really how it works. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

I’ve spent too many words on it, but if you want a very short list of what I’m doing check out my “Now” page.

I don’t publicly break out the difference between blogging income vs. dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit… and there isn’t some other great catastrophe going on.

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” Isn’t dog sitting and blogging TRADING time for money? That’s a solid point. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least with the number of dogs I typically have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s very different than being an Uber driver. The police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats. Also studies show that Uber drivers make far below minimum wage when accounting for their expenses.)

If you are interested in dog sitting, I wrote a very detailed article on the subject: Pros and Cons of Dog Sitting on Rover.

Blogging is usually much more time-intensive than sitting dogs. (The summer months are the exception). However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant money for it. The money I make from blogging now is a direct result of having built a reputation and a collection of nearly 2500 articles over 12 years of blogging.

September was a weak dog-sitting month. Labor Day was busy, but after that people didn’t seem to go on vacation much. I also lost out on some business with FinCon and another weekend I had to take off.

Blogging income was above average in September. August was poor, so maybe advertisers were just waiting for the summer to end?

While on the topic of blogging, I’d like to add that it isn’t all about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In August, these two categories combined for a year high of $3,888.78. But for September it was…

Total Blogging + Dog Sitting Income: $3,312.81

While that’s a step backwards, it’s very close to the average for the year. It’s amazing to me with the two types of income complement each other.

In addition to the dogs and blogs, September was the second month where I spent significant time on the two new ongoing freelance jobs. The income from them is similar to the blogging and dog sitting, but I don’t include them, because there’s really nothing alternative about them at all. I still feel the need to mention them, because it’s time that I’m not blogging.

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 a year (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently just to make the numbers look better. For example, if someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). However, for this report, the $10 per year would give you better numbers.

It’s an extreme example, but it shows how sometimes the short-term plan is the enemy of the long-term plan.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-to-value ratio. In short, this is the percentage of the property value that we own vs. the bank. Then I calculate the rents of all the properties as if they were owned free and clear. Thus we can say that we are “banking” (in a completely fudgey sense) a percentage of the rent that we would expect to have in the future (rents are typically in line with inflation in the simplest sense).

If you are confused (and you probably are), this article on calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for September. We have 51.21% of the equity in our properties with an estimated combined rent of $3,350. (This number is after insurance, property taxes, and condo fees.) We were able to raise the rents earlier this year a little bit as the rental market has been good and we turned over to new tenants.

Yay, we own more than 50% of our rental properties.

If you multiply $3,350 by 51.21% you get $1,703 in “fudged” monthly alternative income. At the beginning of 2017, we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 20 months, we’ve seen the number grow $529/mo. As the years march on, the ratio will grow to 100% of the $3,350 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,685. This number usually moves slowly, so we’ll take the $18 increase. This number only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. I don’t control the housing market, so I can’t change much here. Tenants are typically locked in for at least a year. The monthly paying down of the mortgages creates some equity each month. That’s where we saw the gains in September.

Slow and steady wins the real estate race. In previous reports, I hoped that by the end of this year, we’d be looking at having 50% of the equity with $3,325 in rent or $1662.50 a month in fudged alternative income. As the properties have appreciated we’ve passed that mark a little early. Maybe we can get to 53% for $1762.25 for fudged money by the end of the of 2018 and push for 62% by the end of 2019.

Total Rental Property Income: $1,703

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do for sake of this exercise. In reality we a vast majority in index funds, but I do some stock picking with a small percentage of our portfolio. Though the index funds do pay dividends, it’s not their core goal. I’m also fudging the numbers in another way. The money I’m referring to here is in our retirement accounts, so it isn’t something that we would tap as “income.”

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that. However, like the mortgages on the rental property, there’s real value here that I feel should be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

Just like the rental income, we can pretend what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn 2.50% in dividends. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here. We are only thinking about the cash that these investments could yield to pay for our living expenses.

September was a poor month for our portfolios. The stock market went down a little bit. These numbers are from October 6th, so it’s before the big crash that we’ve seen lately. (October isn’t looking good.) The end result is:

Total Dividend Income: $1,522

Last month, it was $1531, so we lost $8 of theoretical monthly money from theoretical dividends. Yes, this is boring, but that’s the nature of this beast. Like the rental property number, slow and steady wins this race.

Very Close to Passive Income

Most people consider rental property income fairly passive income. It’s not, because you have to deal with tenants. However, when things are going well, there might only be “work” every couple of months. For sake of argument, I think we can agree it is “more” passive than writing blog posts and sitting dogs. I spend a lot more time on the later than the former.

Of course dividend income is completely passive, so I don’t need to argue much there.

This “very close to passive income” category is a combination of “rental property income” with “dividend income.” (Yes, that’s a lot of quotes.)

It’s interesting to me that these two numbers are so close for us. It’s like the stocks vs. real estate debate, but for our personal finances. I think of it as putting them in an arena to fight out which is the strongest. The dividend income started out the year with a big, nearly $50, lead. In June the real property income is up over the dividends by $105.

The stock market goes up and down which makes the dividends fluctuate as well. The rental property income keeps going up, because the mortgages are always getting paid down every month. The stock market can move a lot faster than the housing market. In any case, I like having both of them working for us.

September’s Very Close to Passive Income: $3,225

Last month it was $3,216, so it’s up $9 in total. That’s grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these two sources to $38,700. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, looking forward to 9 years from now when the investment properties are paid off and how the stock market might grow (assuming a conservative 4%), this number could reach 80K a year. I estimate our long-term expenses to be around $35,000 a year (with the house paid off).

Yes we ignored some minor (but important) details. Details such as our investments being in retirement accounts and an unwillingness to sell some rental properties to pay off others. It’s possible that these two could cover our future expenses (without drawing down on principle).

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income”, this month we on the investment stuff had $6,537.81 in monthly “alternative” income. That would be $78,453.74 a year. I’m excited even if it is a little fudgey math. That number is down nearly $600 from last month. I couldn’t have gotten it so consistent if I had tried.

That largely hypothetical $78,453.74 a year on investments, writing on a blog, and taking care of dogs is fantastic. In the long term, we can get by on half of that income, and it doesn’t include any of my wife’s bread-winning pharmacist income, her potential military pension if she retires next year, or any of the freelance work I’ve been doing.

This is the part of the article where I mention that I’m still hoping to write a book to boost my alternative income. I had always planned it to be an eBook, but if any readers out there know a publisher, I’d appreciate the hook-up. Seriously… it seems everyone in personal finance is getting a book deal except for me. I think I can make a compelling argument for a book that you’d see in a bookstore… that is if bookstores still exist by the time I’m done writing it.

Net Worth Update

Since I don’t share real numbers of our net worth, this isn’t very exciting. That’s why it’s just a footnote.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful, I think? (Let me know in the comments.)

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try. For full disclosure, I might make a few dollars if you do.

In September, our net worth went DOWN 0.53%. Boo! This is the first time it’s gone down in awhile. Almost all of it can be attributed to Zillow changing its view of the value of our primary residence. In other words, nothing that really means anything for us for the foreseeable future.

For the year our net worth is up 9.76%. With the market going south right now, this will probably go down quite a bit when I look at how October went.

As a reminder, percentages can be weird… Imagine with someone with a net worth of $100 finds a $100 bill on the ground. Instantly it doubles his net worth. As our net worth grows larger, the percentage of growth will come down too.

How was your September? Let me know in the comments.