Another 2020 Update

 I have been so checked out on blogging and hadn't even seen the comments on my last post until just now. It is good to hear updates from longtime readers-- some sad news, unfortunately, but also some positive news. Deaths and births and life ongoing, as everyone adjusts to the pandemic.

I lost a dear friend this past week, to old age and unrelated to COVID, but it made me think about how much I value spending time with loved ones, which has been difficult these past months. I saw this friend a few times this year, always a bit worried about the risk to her of any outing, even a tiny, socially distant, mostly outdoor, or at least well-ventilated gathering. She had lived a very long life, and wanted to keep living it fully as best she could. We went to a museum together a few months ago, and she came to my house for Thanksgiving. She was hoping to visit Paris again when travel resumed. She was 94 years old.

On a more positive note, the pandemic has had a silver lining for me. I got a job! I used to sometimes hear from friends in my industry who thought I might be interested in certain openings, but when I said I didn't want to commute into NYC at all, things fell apart. But now that everyone is working remotely for the near future, that all changed! The perfect job kind of fell into my lap-- a more junior, less stressful position than I've had in a while, with a flexible schedule and decent benefits. I can work from home permanently. I wasn't sure I wanted a "real" job again, but I feel like this is something where I can be useful. It doesn't pay much in comparison to my past jobs, but it's more than enough to cover the costs of my current lifestyle and put me back into the mode of saving money instead of depleting my resources. And I figured with everything pretty much shut down because of the pandemic, I had nothing better to do anyway! Sweetie is a little bored while I'm working away upstairs, but when the time comes that we want to travel again and do other things, I'll see what I can work out in terms of reduced hours. So far I am happy enough that I think I'd like to continue part-time work for the longer term, but if that isn't possible, I can always just retire again, and be in a better financial position than the last time I tried to retire. One thing I've realized is that I am very good at working, but not very good at managing my own time in a productive and creative way. I need some kind of project to organize-- for a while it was moving, and home renovations, but once those things were past, I was getting bored again and COVID left me feeling even more aimless. So even if it's not quite the post-retirement plan I'd envisioned, I'm in a good place.

I have lots more money stuff to talk about-- how much I invested in home office ergonomics, Sweetie's new car, my mom, my investments, and a recap of my 2020 budget and net worth. I'll try to get to it before summer! Happy New Year everyone! Wishing you all a joyous and healthy 2021.

Remote Work

Several commenters have asked if I could move out of NYC and work remotely at my current job. I have definitely thought about this option. Unfortunately, in my current position, it would be a non-starter. There is certainly plenty of work I can do from home, but there are lots of meetings and face-time is required (the old-fashioned kind, not the Apple program!). Someone who works for me actually asked to work remotely and though I sympathized and wanted to say yes, my boss wanted to hold the line and say no. It’s seen as a productivity issue, and a fairness issue, I guess. There are some jobs where it may make sense, and some where it would be hard to measure productivity, so although there are some people who work remotely, they often say no, as they’re worried that the more they say yes, the more they’ll have to say yes to everyone just to be fair, and then the office would be a ghost town.

A lot of companies seem to want their employees to work remotely, so as to save on expensive office real estate. But then there is the question of office culture, team spirit, etc. I would certainly be interested in trying to work from home, but it would probably have to be a different job, with a different company. Or I could do some freelance consulting. I would love to have a flexible schedule, where I could bum around in jeans all day instead of having to get dressed up and commute to an office. But I do also worry a bit about whether my temperament is suited to it. When I have a day off, I can laze around for hours, getting distracted by solitaire and Facebook and reading the newspaper. I might not be disciplined enough to work from home. I think I’d also miss the social aspects of going to an office. Some of the suburban/rural areas we’ve considered moving to are actually within what many people consider commuting range— I work with people who travel up to 1.5-2 hours each way, so that’s a pretty wide radius around the city. But that kind of commute would just spoil any quality of life gains we’d get by moving, and those Metro North train passes are pricey.

So that leaves me thinking about what I could do for work from home, or locally wherever we end up living. I’m not feeling pressured to make a ton of money, so theoretically I could have a lot of options, but A) I’d have to figure out what those options are, and B) I might face some age discrimination. I’m not afraid to do menial work, and I did plenty of it when I was younger, but now that I’m pushing 50, I wonder if I’d be taken seriously as an applicant. I’m tempted to just apply for a bunch of random jobs to see if I could get one— kind of as an experiment in what today’s job market really is like. But I would also feel bad if I got a job that I didn’t really want for the longer term, but someone else might have really needed. So at least in the immediate future, I think I will try to focus on doing some networking in my industry to find out more about remote and freelance job opportunities and also try to talk to friends in other industries about what other kinds of professional jobs my skills would lend themselves to. But whether or not I find some other job, I’m becoming more and more certain that I’m going to quit and some kind of big change is coming!

More Thinking About Early Retirement

On the last post, bethh commented:

"I'm curious how you decided to set whatever goal it is that you have for retirement - is it salary times x, or spending times 30 years, or what? I feel pretty sure that if I were in your shoes I'd be retired already!" 

This kind of got me thinking about whether I could indeed be retired already. With about $1.2 million in assets and no debt, I already have a lot more money than many people do when they retire. But I'm still under 50, so I have a long window of time that money has to cover. At some point years ago, I had a somewhat arbitrary number of $2 million as my retirement savings goal, which I guess I had calculated would cover what I thought would be my desired retirement lifestyle. I can't remember exactly what math I did at the time-- maybe I should search my own blog archives to help my memory!
Some people use the rule of having at least 25x what your annual spending will be, on the theory that you can safely withdraw about 4% of your savings each year without eating into it too much, since it would hopefully have investment gains of more than 4% each year.
You also have to think about what "retirement" really means-- does it mean you don't work at all? Are you going to want to fill all that spare time with expensive hobbies and travel? Or are you willing to downshift to some other sort of work that will bring in some income, even if it's not much?
I've played around with lots of scenarios in a retirement calculator-- retiring now, retiring later, having a low income now and retiring in a few years, etc. I always felt like I was more or less on track but retiring early never seemed comfortably within reach based on my current lifestyle.
But here's something that I never added to the scenario: Sweetie.
One night when I was noodling around with all this, Sweetie said "does it let you input another person? You know, we're in this together..."
It's not that I didn't think we were in it together, but actually running the numbers this way made a huge difference. Sweetie owns real estate, and has savings, and a small mortgage. After being unemployed for a couple of years, Sweetie got a job that pays a low salary that covers some of our expenses. More importantly, at age 65, Sweetie will get a good old-fashioned defined benefit pension. And someday, Sweetie will most likely inherit a few hundred thousand dollars unless the family circumstances drastically change.
Plug all that in, and boom, we can both retire now.
Of course, this does not make me totally comfortable. We've talked about getting married at some point, but we aren't yet. Our finances are totally separate except for a token joint checking account with $2000 in it. And I just have this independence thing ingrained in me somehow-- the idea of being supported by someone else is just bizarre! But given how miserable I've been at my job, this is now making me think A LOT about quitting.  That may not be "retirement" just yet, but it's pretty amazing to realize that I may have the freedom to just walk away and not worry too much about what my next source of income is. I could try a new career, try doing consulting work, or just step back into a lower level job with way less responsibility. I haven't had more than a 2 week vacation since I was 22, and the idea of just having some time off is very appealing. Once you get this kind of thing in your head, it's hard to stop thinking about it...
So much in the world is uncertain right now-- would it be insane to just walk away from a secure six-figure job??

Bonus Time

So my last post was about how tax time is usually a happy time of year... this goes hand in hand with bonus time, which is also usually a happy time of year. This year was a bit of an exception.
I have mostly had jobs that involve measurable performance in some aspects, so a bonus has often been a significant part of my compensation, sometimes more than I even expected! I always remember my first job in NYC, where my salary started at $25,000. I knew that some sort of bonus would accompany that, but I don't know how much I asked about how big it could be. I was coming from a job where a bonus meant maybe $1500-2000, so I didn't think of it as a make-or-break thing. So it was a fantastic surprise when I ended up making about $15,000 in bonus that first year, and all of it went straight into the bank. I've always tried to make ends meet on my base salary and put bonuses towards saving, it just seems easier to be disciplined that way.
Nowadays, my bonus tends to be about 15-20% of my total compensation, so it's still a good chunk of savings that I rely on to meet my overall goals. And this year, because I had done some things that went above and beyond in terms of my job performance, I was counting on a bigger than usual bonus. In fact, I had sort of been told, or it had been implied, that when I got only a so-so raise this year, it was because that was not the way my work was going to be recognized, but that I would see the payoff in my bonus.
My personal performance isn't the only thing that determines my bonus, so when I have this conversation with my boss, she usually hands me a piece of paper that shows the whole calculation. My eyes usually jump to the total, I smile, I thank my boss profusely, and that's pretty much it. But this time, my eyes went to the total, then dodged around a bit, then back to the total, then back and forth over all the math. While this happened, I was sort of zoning out on what my boss was saying and my face must have slowly dropped from a smile into a blank look into a frown. My total bonus was less than the prior year, and specifically the part that was about my individual performance was less than the prior year. I knew one part of the bonus might be down due to certain sales numbers that it would be based on, but I just could not comprehend how my personal number was less. I managed to gather my thoughts enough to say, I think gracefully, what was already written on my face-- that I was surprised and disappointed, because I had accomplished X, Y and Z, etc., that were a significant jump over what I'd done last year.
This all happened on a Friday and I spent the whole weekend in a funk. It wasn't so much the money itself-- it was that I felt insulted. I also felt demoralized. I had worked harder than I ever had in my life, and been amply praised for it, but if it wasn't going to be recognized with either a raise or an increased bonus, what was the point? Why was I working so hard? And though I am certainly not irreplaceable, why would my company send me this message at a point when it would be quite difficult for them if I were to leave? What were they thinking?
In the end, fortunately, it worked out. They reconsidered the bonus and gave me a couple thousand dollars more, so that in the end, my bonus was slightly larger than last year's. They said lots of nice things and I was able to feel more valued again. But the whole thing did leave a bit of a bad taste in my mouth. I probably haven't been a squeaky enough wheel about asking for bigger raises the last few years, so maybe I'm being taken for granted.
That said, I am always thankful that I have a job with a decent income, where I've gotten promoted and have interesting work to do-- life could be far worse! I was talking to a couple of people from another company recently-- one complained that she had found out that she was being paid a lot less than her male counterpart who did the exact same job, despite some pretty significant accomplishments on her part that the male co-worker didn't have. The other, a younger and more junior employee, had asked to be promoted when a spot above her opened up, and was disappointed to be told that no, they weren't going to hire someone for that spot, and no, she could not have a better title, and no, she could not have any more money either!
Ultimately, no matter how much you like your job, it's never all that great to work for someone other than yourself... and being self-employed is no piece of cake either! Retirement is starting to loom large in my imagination... but I still have at least 20 years or so before that will be an option... ugh!

Happy New Year!

I can't believe it's 2015, and 3 months have gone by since I last posted. Resolution #1 is to get back in the habit of writing more! I fixed some problems with the site template that had been bothering me for a while, so maybe that will encourage me to stop by more often. So what's new? Here's a few broad strokes. My mom has her house on the market. After a few months, she hasn't had any bites. She missed the best time of year last spring when families would have had a chance to close the deal in time to get their kids in the local school by the start of the fall. Also, the house is probably overpriced. It's a strange market with not too many good comps in her price range, but I think what it comes down to is that it's a small, crummy house even if it's been nicely decorated and has a big yard. It's not the kind of house families want nowadays. So I am trying not to say "I told you so" about all my mom's renovations that she swore would increase the value of the house. She probably would have been better off selling it as a tear-down. But she has at least gotten a few years of enjoyment out of the work she's had done. And from what I could tell from snooping around on my last visit, she isn't running up any credit card debt yet, though I worry that will start to happen soon since I think most of the savings are gone. I continue to save my own pennies and did pretty well this year. I first hit the million dollar net worth milestone back in June and despite fluctuations in the stock market, have managed to keep my net worth at or above that level every month since except for one, when it dipped to $999,827 in September. As of the end of 2014, my net worth was $1,027,750. One interesting thing I noticed was that I made more from dividends and capital gains distributions from investments this year than I was making in salary about 15 years ago-- around $50,000! And my net savings for the year were over $90,000. I spent more in some areas than the previous year (food), but cut back in others (travel). But it's hard to gauge my spending accurately against previous years because Sweetie and I keep adjusting how we share expenses. I'm paying for Sweetie's health insurance now too. Sweetie hasn't worked in over a year and is just living off savings. It's fine for now, and it's been more of a voluntary sabbatical than actually trying and failing to find a job, but that will most likely change in the coming year-- by which I mean I hope it changes to employment, rather than a desperate and unsuccessful search for employment! I've been happy to support my Sweetie in this endeavor and we are extremely fortunate in not having to have made too many lifestyle adjustments, at least not yet, but I must confess I kind of preferred how it was before when we felt even more secure and relaxed about the occasional luxury! It will be interesting to see how things go once Sweetie gets serious about looking for a new job... There's so much more to write about-- thoughts about my own job history, the economy, friends and family, books I've read, catching up on long-past things like selling my condo! I will try to tackle them soon. But in the meantime, I am grateful to everyone who continues to check in here, and I feel incredibly fortunate that my own financial story continues to be a happy one despite so much difficulty in the world around me.

Spring Update

What a busy few months it has been... for the first time in years, my job has been stressful enough that I started to question whether it was worth the money I make. Sweetie has been feeling the same way, and we often fantasize about ways we could escape the office grind and make a living in some other way... like winning the lottery! We are definitely prisoners of our lifestyle-- we enjoy having certain luxuries, but they have to be paid for, and it's not that easy to find jobs that would make us enough money to continue as we are. We know we could cut out some of those luxuries and still be happy, but they are things we enjoy. When we fantasize about quitting our jobs, it's so we'd have more time to do things like traveling and reading books-- but travel and books cost money. (Books might be obtainable for free at the library, but there is no travel library where you can borrow a plane ticket, unfortunately!) We're both grateful to have jobs in this economy, but when you go from being challenged and entertained by work to feeling like you're stuck in a Dilbert cartoon or just deluged with thankless tasks, it's hard not to question whether there's something better you could be doing.

This is all made more complicated by the fact that retirement seems to get closer and closer. Sweetie is older than me, and will have a nice pension, plus income from a 401k and other savings. I will have to rely on just a 401k and savings. Sweetie's retirement income will actually be pretty good unless the stock market totally tanks, but that would all change if there was less income in the in-between years. I'm still worried about whether my savings will be enough to live on by the time I retire, so the thought of early retirement doesn't seem very feasible. But we need to sit down and do some in-depth analysis and planning, which will be made easier by the fact that I finally got Sweetie set up with Quicken to track expenses.

In other news, one of the little luxuries we've currently been enjoying is a food delivery service. It's a weekly delivery in which you get all the ingredients for 3 meals, plus recipes. All you have to provide is your own pots and pans, salt, pepper, and olive oil. The cost works out to $10 per person per meal (including shipping), and you can pick a meat/fish plan or a vegetarian plan. We've been doing the vegetarian plan, and I love all the new ideas we've been getting for how to eat a well-balanced meal without meat. The portion control is helpful too. Sweetie is someone who can cook creatively and inventively, but I am not, so I love having someone else make all the decisions and just tell me what to do!

As for the cost, I've been thinking it would be interesting to do an analysis on whether this service is "expensive." A lot depends on the specific ingredients included each week, but even without getting too in depth, it's possible to draw some comparisons. Compared to a restaurant meal, $10 per person is definitely cheap. Compared to ordering takeout food, it could be about the same price per meal, depending on what sort of takeout-- it probably works out to be cheaper than most takeout in our area. Is it cheaper than buying our own groceries? Probably not, except in the cases where the recipe requires an unusual ingredient. If I had to buy a whole jar of a spice, it could easily cost $5 or more, so it's nice to get just the exact amount needed and not have to worry about waste. And occasionally the recipe and ingredients make enough food that we have enough leftover for a lunch the next day. When you factor in the convenience factor and the enjoyability of the meals, I would say it's a good value and certainly reasonable in relation to our current financial circumstances. But if we did lose our jobs and have to budget more carefully, I'd probably discontinue it and make more effort to cook at home with cheaper ingredients bought in bulk. (The service is called Blue Apron, if you're interested, and I have not been asked or paid to write about them.)

What else is new? Well, I think my mom is going broke, as predicted. She has had her cable TV service turned off to save money and occasionally says things about money being tight, but I haven't asked for details. It is just too upsetting to get into it with her. It really makes me ill that she couldn't listen to reason a few years ago-- she should have sold the house instead of pouring money into renovating it, and moved into an inexpensive condo. I think she still has a little money left in CDs that haven't matured yet, but I'm sure she'll cash them in soon if she hasn't already, and then she'll be stuck living on just Social Security and the continuing payments she gets from my dad's pension plan, which she'll find impossible to do without running up debt, so she'll end up having to sell the house anyway, and then she'll blow through that cash too. There is no satisfaction for me in being able to say "I told you so."

How about you? What are your financial plans and dreams and worries these days?

The Employee/Employer Relationship

I've been thinking a lot about this issue lately, for a number of reasons.

I'll start off with a story about a friend of mine who I'll call Karen. She has someone who comes in and cleans her apartment every week. Let's call the cleaning lady Tracy. Karen first hired Tracy about 15 years ago. At the time, she only had Tracy come every other week. As is typical for this kind of situation in New York, Karen paid Tracy in cash. Over the years, Karen raised Tracy's pay a few times, and when Tracy lost some of her other clients, Karen started having her come in every week so she'd have more work. Tracy has rarely missed a week due to being sick, but when she has, Karen pays her anyway. Karen also gives her a Christmas bonus every year. Tracy takes a couple of weeks off every year, which Karen doesn't pay her for, but if Karen is going to be away and doesn't need Tracy to come, she still pays her for the weeks she's canceled.

So is this a mutually beneficial, fair relationship? Tracy offered to do the work on her own terms, and I don't think anyone would describe Karen's treatment of her as in any way exploitative or mean. Of course there's a tax evasion issue-- as you might be assuming, Tracy wanted to be paid cash because she wasn't a citizen-- at first. But now she is a US citizen and could presumably get another job where she and her employer would have to pay taxes. She's already past the age when most people want to retire, and Karen is wondering what to do about it if Tracy does want to stop working-- she's never paid any Social Security taxes for Tracy, so it's unclear what, if anything, Tracy would be able to collect. Tracy's children might or might not be able to help look after her. Karen is thinking about whether she should give Tracy some sort of pension, out of a sense of what's right and also just because she and Tracy have an affectionate relationship and she genuinely cares about what happens to her. That's more than can be said for a lot of people you read about who feel they have to economize by cutting the hours for the hired help just because their mutual funds are down.

Do you think most people feel this sense of responsibility towards those whom they employ? Is this kind of arrangement between two individuals a fair way to decide terms of employment, or should the government always be involved in setting the rules and collecting taxes and providing benefits? Should there always be an obligation to take care of an long-serving employee after the employment has ended?

The other thing that's had me pondering these issues is the TV series Downton Abbey, which everyone seems to be talking about lately. Thanks to streaming Season 1 from Netflix, I can count myself among the fans! It's set at a point when the sun is starting to set on the British empire and the old ways of life for the aristocracy are starting to change. But amongst the servants on this big estate, you have a variety of attitudes towards their situation and the people who employ them. There's a rigid class system, but there's also a sense that master and servant consider each other family, at least in some ways. Of course, sometimes this turns into the masters telling the servants what's best for them, which usually involves their continuing to be servants-- it's a paternalistic relationship where the servants have no real dignity or autonomy or choice.

And then there's what's going on in the US in current times. Some politicians are trying to make laws against collective bargaining, more and more people have to work as "independent contractors" rather than as actual employees of corporations, pensions are underfunded, and some benefit packages have been so aggressively negotiated as to be unsustainable. People are yelling "get a job!" at Occupy Wall Street protesters one minute, and saying Obama doesn't deserve re-election because of astronomical unemployment numbers the next.

If there's anything I take away from all this, it's that ideally, we'd all work for ourselves... but that just isn't possible. How can we best maintain our dignity as equals when some of us have to work for the rest of us? How can people without much power be protected from those who do have power? Would most employers actually treat people fairly if they weren't forced to? What are the best ways for government to be involved? We live in a complicated world, and wishful thinking won't make it any simpler.

And to come back to Karen and Tracy, what would you do? Would you refuse to pay someone cash under the table, employ only legal workers and pay all the taxes so they could collect Social Security? Or would you pay someone cash and just figure they knew benefits were never going to be part of the deal? Or would you feel obligated to help take care of someone who'd worked for you after they'd retired?