Quick RSU Update

December 9, 2015 cb3 Leave a comment

A little more at Vesting

The RSU vested on December 1st and came in a little higher than the $3300 that I calculated. I had based the number of shares to be held for taxes on the previous cycle. However, this time around the stock price was lower so they didn’t hold as many shares.

Total gain after the sale was around $3700.

Divvy it Up

I kept the allocation that I had build based on the previous estimate and used the extra for debt payoff:

$3000 went towards outstanding debt including the remaining $1550 balance from the Vet bill.
$500 went into my individual brokerage account at Personal Capital.
$200 will go towards a family outing for the holidays

Back on Track

This puts the current debt reduction projection for the year back up to 10.65%. Barring anything unexpected happening, I believe we will meet the 10% goal for the year.

Over the next couple of weeks, I will be setting up my spreadsheets for next years cash flow and debt reduction projections. I’ve already started jotting down a few new goals that I want to add for 2016.

Cheers!

-cb3

Lifestyle, Travel

Ireland

December 7, 2015 cb3 2 Comments

A Long Planned Trip (ish)

I’ve had a longing to visit Ireland since… I don’t know, forever. My brother and I had started planning a trip to celebrate my long overdue graduation from college in 2004. Well, life happened instead.

We were supposed to go in the summer of 2005 and in Feb of that year, I found out that the grant funding my position at the University was running out. I wasn’t fired or laid off per se. They just couldn’t pay me anymore. So, scratch that idea as I had to take a job in another city and front the cost of moving.

Fast-Forward to Present

Ten years later and I work for a global company and have architected a change to their wireless infrastructure. Lucky for me, the first site to deploy is in Cork, Ireland and I’ve been requested to be onsite for the roll-out.

It’s not quite the vacation I had imagined back in college, but it’ll have to do. I’m both giddy and full of dread at the thought of the trip. On the one hand, I’m going somewhere I’ve always wanted to go. On the other, I’m going to spend about 70-80 hours in a conference room that looks no different from those in the US.

The Day Arrives

I had an evening flight out of Atlanta with a four hour layover in Amsterdam. In my mind, I would sleep on the flight over and be ready for a light day mostly spent at the hotel. My boss had other plans and wanted me to get to the office as soon as I landed. I got maybe two hours of sleep on the first leg of the flight, had a pint of Murphy’s at Schipol before the second leg and slept the hour and a half over to Ireland.

Hitting the ground running when I got to the office was an interesting experience to say the least. My body had no idea what time it was and I was regretting eating the in-flight meal the evening before. It felt like I had a ton of bricks in my guts. Somehow I managed to work from 11am local to around 10:30pm that night.

The Local Cuisine

Being somewhat of a food nerd, I asked one of my co-workers where we could get some traditional Irish fare. His response… ‘What, you mean like cabbage?’. Luckily, I was talking to the wrong person and meals weren’t nearly so tragic.

Highlights from the trip were Sunday brunch at Sage in Middleton, dinner that night at Blair’s Inn near Blarney, and our last night’s dinner at Electric in Cork.

Sage has an excellent locally sourced menu and a surprising craft beer selection from Irish breweries (I think the craft beer scene is lagging behind the US since most bar served macro beer). All of the ingredients come from within 12 miles of the restaurant. I had house made black pudding to start and a main course of Hereford filet medallions.

Blair’s Inn was a wonderful experience in itself. It had the country pub atmosphere that I had hoped to find. We sat at a corner table by a coal fireplace which was quite toasty and welcoming. The beer selection here was also top notch and I had a really nice cask stout. Dinner was a braised lamb shank (literally melt in your mouth) and rosemary mash. I also splurged and got sticky toffee pudding for dessert. Movement back to the cab was difficult after a meal like that.

Finally, on my last night there we had dinner at Electric. This is a neat place right on the River Lee. We started by having a pint downstairs at the bar while we waited for our table. Our table was in the main dining room, but they also have a fish bar overlooking the river. I started with seafood chowder which was absolutely amazing. For main, I had fish and chips which I felt was more of a cultural obligation. It was good, but disappointing after the excellent chowder. For dessert, I had an Irish coffee (another cultural obligation).

Being Touristy

On Sunday, one of the local directors had arranged for a little excursion to Middleton. He picked us up and we had brunch at Sage before walking over to the Jameson distillery. I honestly had not had any Irish whiskey since college (and really, not served in the best way back then). However, good whiskey is a passion of mine and I was happy to explore.

Browsing through the old stone buildings was a remarkable experience. There’s a lot of history there that we just don’t see in the US (not that we don’t have a lot of great history!). I was also very impressed by the sheer size of the operation compared to the time it was built. The fact that people were able to build to this scale before the industrial revolution is awesome.

The actual production of the whiskey was mostly what I expected. The process doesn’t vary that much among distilleries or breweries. They do distinguish that they triple distill the spirit before barrel aging. For whiskies, the barrel selection and aging times are what give the final product it’s characteristics. Jameson is very smooth and has a lot of honey and vanilla aromas and flavors. I actually quite enjoyed it.

At the end of the day I added about $200 worth of whiskey to my luggage and had to stop at a Tesco to pick up an additional bag for dirty clothes. Mental note: In the future, pack an extra bag so that there’s room for souvenirs in the luggage.

The Return of the Geek

The last night in Cork was a little rough. We had a team dinner which lasted well into the evening and then a meeting with the home office in PST at around 10pm local. My flight was at 6am the next morning with a layover in Amsterdam again and then a direct to Atlanta.

By the time I made it to bed, I had about two hours to sleep before I had to get up and catch the taxi. Being from Atlanta, I’m super paranoid about getting to the airport early so I scheduled my cab for 3:45. Perhaps that was a bit aggressive as the TSA line didn’t even open until 4:30. No worries, I had time for coffee and a little more shopping in the duty free store.

All-in-all, the flight home was uneventful and I was able to get a little more sleep this time. Hartsfield-Jackson International terminal on the day before Thanksgiving wasn’t nearly as bad as I expected. The bad part was getting around to the domestic side to pick up my brother. Ouch. Traffic into the cell phone lot was backed up bumper to bumper, so I dipped into the hourly lot and forked over my $3.

Still on the List

Even though I finally made it, I still have Ireland on my priority list of destinations. Next time I want to do it on my own terms. Occasionally, we talk about going for a summer trip and renting a cottage for a couple of months. My job basically allows me to work from wherever I can get an internet connection. It would be even better is we could clean our place up and lease it out while we’re gone.

Anyway, thanks much Ireland! I had a great time despite the work requirements.

Cheers,

-cb3

Expenses, Goals

November 2015 Progress

December 1, 2015 cb3 2 Comments

Happy Holidays!

November was, to be honest, an ass kicker on the full-time job front. I had even started a slight rant post that I’m not sure I’ll finish. Regardless, it makes the sound of financial freedom even more appealing and I was exceptionally thankful for a few days of downtime over the Thanksgiving break.

The week leading up to the holiday I was traveling for work to Ireland. It was my first trip out of the country and while I didn’t have a whole lot of time for tourism, I did get to see the Jameson distillery in Middleton. Of course, that lead to a little extra personal expense as I purchased a few gifts for family. I’ll use some of these as Christmas gifts, so it won’t be a huge overage as I’d be spending the money anyway.

Other than the travel expense on gifts, there wasn’t anything unexpected this month. Groceries, restaurants, and entertainment/alcohol were back up this month due to holiday events. We still managed to keep it under control and none of the categories were the highest of the year.

Current Goal Status:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of November, overall debt reduction is 9.15%. We put extra towards the Vet bill to help recover. Year-end projection is currently 10.03% so it look like we’re back on track.
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts is now at 10.19% which is still below the 10.71% high in September. I’m still on track but may be able to bump this a little at year end.
Eliminate any monthly interest payments due to credit cards.
1. November broke the streak and I paid $38.03 in interest on the card holding the Vet balance. This brings total credit card interest to $386 for the year. I don’t anticipate any interest in December.
2. Of the $3200 balance increase from veterinary surgery, ~$2200 remains on the card. I have an RSU vesting today that will eliminate this balance.

Total expenses for November rose to $8031 which was still the second lowest of the year. Net cash flow was slightly positive at $423.

Looking forward to the gift-giving season, we’re working on setting a budget for gifts and making sure we have a checklist of each person before we start buying. We’re also looking at using the points on our Chase Sapphire card on Amazon to offset purchase costs. I don’t believe we’ll use them all and we don’t have any travel planned for first half of next year where we could use the points.

-cb3

Goals, Investing, Stocks, Strategy

What to do with RSU

November 10, 2015 cb3 Leave a comment

Have a Plan

With another segment of my Restricted Stock grant vesting on December 1st, I thought it would be a good topic to cover. Before we dive in, I want to emphasize the importance of having a plan for extra income before it arrives.

Too often do we get caught up in the excitement of a bonus or windfall and if we haven’t planned carefully, the money seems to vanish overnight. I’ve been guilty of this in the past. It’s very easy to lose track of where it goes.

Due to my current debt circumstances, I want most of the extra to be applied to that. I think it’s still important to get a little morale boost too, but we’ll be conservative with it. In this case, I will be applying 80% toward outstanding debt, 15% will go to our investment account, and the remaining 5% will be used for play.

By the Numbers

The expected net income at sale will be around $3300. This puts ~%2600 towards debt which will clear the outstanding Vet bill. That gives us around $500 to add to our investments. The remaining $165 will most likely go towards a nice dinner out with my wife. With this plan, I can feel good about spending a little on enjoyment knowing that I put most of it to work for me.

Tax Implications

With my current grant, a number of shares will be sold at vesting to cover taxes on the gain. I plan to sell the day it vest, so I don’t anticipate an additional tax burden. My ESPP behaves differently and I will cover that in a future post (probably in January when that is up next).

Portfolio Management

Some people hold onto their RSU shares as an investment. There are pros and cons to this approach. My portfolio is small enough that the shares would be a larger percentage of my holdings that I want in any one security. I like to keep each position to less than 1% of my overall holding (including all 401k, IRA, and Individual accounts). This reduces the risk that any position would have a large impact on my Net Worth.

Since I’m still in debt reduction mode, that’s all intellectual exercise at this point. It’s much more important to me to use the value to pay down liabilities than it is to hold on to the assets.

Cheers

-cb3

About, Lifestyle

Down Time

November 8, 2015 cb3 Leave a comment

Challenge Behind / Challenge Ahead

The past three weeks have been a bit more challenging and slightly stressful on the full-time job front. Accelerated schedules, scope creep, and incorrect assumptions about readiness of key systems are the highlights. Don’t get me wrong, I’m well compensated for what I do and this is part of the job, but I need some down time soon to re-balance and decompress.

The good news is that the holidays are coming and that will lead to some time off to spend with family and friends. Unfortunately, I’ve got several weeks of travel upcoming as well. I don’t mind the travel, but I don’t really get to enjoy the places I go since I’m working.

One of the tings I look forward to most about achieving financial freedom would be spending my time on pursuits of my choice instead of the pursuits of the company which employs me. That work is intellectually and financially rewarding, but it’s not always deeply satisfying on the canoe dock level.

Other Pursuits

There are several things I enjoy in life when I get the opportunity. You will probably see posts about some of these topics from time to time. I don’t want to be all business around here.

If you read the intro post to the blog (I should do an About Me page…), then you may have realized that I enjoy the outdoors. My family and I try to get out and go hiking often when the weather permits (and sometimes when it doesn’t). Finding new places to explore is always exciting. Some day we hope to complete the Appalachian Trail even if we have to do it in sections.

I also have a somewhat green thumb and try to do a garden every year. I think one of next year’s goals will be to increase the size of the garden and can as much produce as we can for the off season. Along with the garden, I have also been dabbling in cultivating bonsai trees. It’s a fascinating hobby that I’ve started to take a bit more seriously in the past couple of years. One of these days I hope to have a few specimen worthy of showing.

Finally, I am a hobby brewer and certified beer judge. Brewing quality beer at home and being able to explore the wide variety of styles available has gone from hobby to serious passion for me. My garage looks like a miniature production brewery. Friends and family don’t seem to mind the by-product either. Since our second child was born, I haven’t had as much time for this. There will be more time as he gets a little more self-sufficient.

Lazy Sunday

Today, however, has been a lay around the house day. The weather is dreary and drippy. We went to a friend’s wedding last night and some of us are moving a bit slow this morning. The children have watched entirely too much Netflix, but sometimes that’s just how it goes.

I’d love it if the sun would peek out and we could get out for a stroll.

Cheers!

-cb3

Expenses, Personal Finance, Tools

Drawing a Picture – Part 2

November 5, 2015 cb3 Leave a comment

The next part of the picture is just as important, if not more so, as the balance sheet. It wasn’t until early this year that the concept really clicked with me. Sure, I had used a budget for years but this put things in a new perspective.

Cash Flow

The cash flow statement is the simple picture of the amount of money moving in to your finances (income) versus the amount moving out (expenses).

First we list our income for the month with one type or source per line and add them up. That gives us Gross Income.

Then we take all of our expenses and list them with one category or source per line and add them.

Finally we subtract the expenses total from gross income and we arrive at our Net Income for the month. If this number is negative, it means we spent more money than we made. Warning! If the number is positive, then we’ve made money for the month. If we have positive cash flow we should look at how we’re going to put the surplus to work.

Always have a plan for allocating surplus cash. Otherwise, it can disappear. For example, right now my plan is to put any surplus cash to work paying down outstanding debt.

A Note on Credit Cards

It can be especially easy to spend more than you make with credit cards. They’re easily available and credit limits can creep up beyond what you can handle.

Before I looked at my cash flow, I didn’t realize that I was falling farther into the whole because I was always able to make more than my minimum payment each month. What I wasn’t seeing was the fact that I put more on the card that month than I paid. Floating along like this for five or six years with regular credit limit raises led to quite a deep hole. At the worst of it, I think we had around $28k on cards. All generating interest!

Looking at the Categories

Now that I look at all of my expenses each month by category, it’s much easier for me to see what I can do to improve my situation. I can now see if we’re spending too much and where we need to cut back. Of course, some expenses are fixed. I actually break my expense list down into two sections: fixed expenses (mortgage, loans) and variable expenses (groceries, restaurants, fuel).

The Canvas

I like to use spreadsheets for most of these tasks. Google Sheets is awesome because it lets me access my data from anywhere without having to install software. There are also some handy Sheet Templates for budgets and cash flow. You could also track your cash flow with online tools such as Personal Capital or Mint.

Good luck and keep an eye on those expenses!

Cheers!

-cb3

Expenses, Goals

October 2015 Progress

November 1, 2015 cb3

Relief!

October came and went without any major unplanned expenses. It felt good to see my weekly Personal Capital report showing a nice smooth expense chart and approximately $4900 lower spending than the last month (which is what I expected without the car and vet bills from last month).

We do have an outstanding balance remaining for the vet bill so the Goal for debt reduction is off track. I expect to pay it off with an RSU that is vesting on Dec.1. More than likely I will pay a little interest on this since the bill is due before the stock vests. Based on my calculations it will be around $50 which is less than it would cost to transfer the balance to my Chase Slate card.

Current Goal Status:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of October, overall debt reduction is 7.77%. This dropped from 8.69% last month due to the outstanding vet bill. Year-end projection is currently 8.87% if we don’t clear that bill.
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts dropped to 10.06% from 10.71% last month. I made a withdrawal of $900 from a taxable investment account to cover the truck bill.
2. Unless we need to withdraw more to cover an unexpected expense, this goal is still on track.
Eliminate any monthly interest payments due to credit cards.
1. We maintained $0 in credit card interest in Oct. for a seven month streak.
2. Of the $3200 balance increase from veterinary surgery, ~$2400 remains on the card. We will be able to reduce this a bit more before the bill is due on Nov. 19th. As I mentioned earlier, we may pay a bit of interest on this.

Total expenses for October fell to $6969 which was the lowest of the year. Net cash flow was positive at $2028!

Dining out and entertainment/alcohol expenses were both second to lowest for this month. I am continuing my commitment to cut back in those areas for the remainder of the year but may make an exception for the holiday season.

Getting closer. Cheers!

-cb3

Personal Finance

Drawing a Picture – Part 1

October 30, 2015 cb3

Last week I laid out what it takes to get a plan together. Let’s start breaking it down and getting a little more detailed about each piece. I don’t want to be overwhelming, so we’ll focus on one topic per post.

The Balance Sheet

Why in the world would a household need a balance sheet? That’s something for businesses. Well, need may not be the correct word. Want may be more appropriate in this case. I want to see what I have that’s working for me and what’s costing me money. Having a reference handy each month keeps me up to date.

Balance sheets are quite simple. It’s a method of tracking our assets and liabilities. Now, these two concepts were something I was never taught growing up. I had a vague idea that an asset was something you owned that had value, like a house. Liabilities were also foreign to me. I thought of that as simply debts owed.

I think about it a little differently now. It’s still pretty simple, but I have a clearer understanding.

Assets

These are the things we own that can be used to generate income. For example, I could list a piece of jewelry as an asset since it can be sold to generate income. However, that’s not the best type of asset to have. I want to generate regular income from assets so I look to investments such as stocks, bonds, rental properties, or a even business. These types of assets can be grown over time and potentially generate enough income to cover my cost of living.

Liabilities

Those debts or obligations we owe that cost money every month are liabilities. Loans and credit cards are probably the most common.

Adding it Up

So all we have to do now is take the total of our liabilities and subtract it from the total of our assets and bingo… Net Worth. Easy Peasy. There are some good templates for this in Google Sheets.

*The Home as an Asset

There’s a lot of talk about home ownership being a major investment. In my case, I consider it more of a liability since I still have a mortgage on it and it costs me money every month from maintenance costs. We bought late in 2009 and our estimated value has only come above what we paid in the last couple of months. If I calculate all of the interest paid on the loan (and ignore maintenance costs), I’m still about $40k in the red if I sold at today’s estimated value. That’s a terrible return on investment for the time held. Of course, it’s not a loss until you sell 🙂

Cheers!

-cb3

Personal Finance, Strategy, Tools

Architecting the Future

October 22, 2015 cb3

The other day I was thinking about this blog and it occurred to me that it’s all well and good for me to be posting monthly progress updates and tracking how I’m doing, but what does that do for you? On the surface, it helps to show you that it’s possible to come from behind and start making progress. I want to show you how I set myself up to succeed. Let’s get started.

State the Problem

In most engineering problem solving exercises, we start by defining the problem. If we don’t have a clear idea of what it is that we’re trying to solve, then we’ll never have a way to measure if we’re successful. We don’t have to start with a lot of detail at this point. Let’s just establish a good high level statement.

For me, it would look something like this: “I am a 40 year old engineer with a good salary, a wife, and two kids. We are a single income family. We have a mortgage, car loan, student loan, and some credit card debt. We contribute to 401k, but other than that don’t save much. It often feels like we are living paycheck to paycheck.”

That’s a nice concise statement about the current situation. Now we are centered in our situation and can move on to the next step.

Draw a Picture

Getting a visual representation of the situation can be very helpful. In the case of personal finance, we’re not really talking about literal pictures but we do need to gather as much data about our situation and lay it out in an easily viewable manner.

There are tools that businesses use to view their financial situation and I believe we can adopt the same for ourselves. A budget is nice, but it shouldn’t be our only tool. Let’s take a look at building a balance sheet and a cash flow sheet. Google Sheets has some nice templates for these and I will cover each in more detail in following posts.

For now, we’ll just establish what each one is and what it can do for you. The balance sheet is a list of your assets and liabilities or quite simply the things you own that have value (assets) and the things you own that cost money (liabilities)

The cash flow sheet will show your income and expense for a period of time. I track it on a monthly basis. Where budgets establish how much you should spend on each category for the month, cash flow will show you how much you did spend. It’s important to know both.

There are also online tools available that will help you aggregate all of this data and give you visual representations. I currently like to use Personal Capital for this. You can set up your account there and link it to all of your relevant financial accounts.

List the Requirements

The requirements document lists all of the goals for the project. I like to think of it as a checklist that I can go down and when everything is marked off, I’m done. Sometimes the requirements change mid-project and we need to adjust. That’s OK. In project management terms, I feel like we should take a more agile approach to this anyway.

I started my list with the longest term goal at the top. It looked something like this:

In ten years, when I’m 50, I’d like to be financially independent.
In five years, I’d like to be able to step down a notch to less stressful work
For 2015, I want to accomplish the following:
- Reduce overall debt by 10%
- Invest 10% of my earnings
- Reduce the amount of credit card interest paid to $0

It’s a simple start. I like that. Sometimes if we make things too complex or start with too may requirements, the project will feel overwhelming and we’ll never get started. Start small and build over time.

Design a Solution

Here is the not-so-tricky tricky part. We have a problem. We have a picture of our current conditions. We have some requirements for the solution. How do we solve the problem?

I think there are a lot of approaches that could be employed here. There are really only two options to consider: Make more money and have less expense. Of course, there are a lot of ways to go about those two things but it really is just that simple.

There are a ton of other blogs with great ideas for both sides of the equation, so I won’t get into that here but maybe I will in some later posts.

It’s All So Much

This may be the longest blog post I’ve ever written. The long and the short of it is this: Understand your situation, determine what you want to achieve, then formulate a plan for getting there.

Cheers!

-cb3

Expenses, Goals

September 2015 Progress

October 8, 2015 cb3

As discussed in my previous post, we had a significant extra expense this month in the form of a major vet bill. On the one had, I’m happy that my wife was able to give the gift of sight back to her beloved pet. On the other, I’m a bit embarrassed since this might be the single most 2%, privileged, or frivolous thing I’ve purchased. I would never be able to explain such a thing to my grandfather. He’d laugh and call me a knucklehead.

On top of that, we saw our highest outflow for food/household items in September at $1149. Dining out was also high at $600. There was also some repairs needed for my truck and that cost me an unexpected $900.

Goals are still mostly on track, but we may see a small interest charge in November. Here’s how we stand:

Reduce overall outstanding debt (including mortgage) by 10%.
1. At the end of September, overall debt reduction is 8.69%. Still on track.
Make contributions to investments (taxable and retirement) of 10% of salary.
1. Combined saving in investment accounts is 10.71% of income. This includes 401k, IRA, ESPP.
2. This may be impacted by the additional cost of major vet surgery. My wife agreed to use her savings for this procedure, so I may have to draw some out of investments to cover or face an interest charge.
Eliminate any monthly interest payments due to credit cards.
1. We maintained $0 in credit card interest in Sep. for a six month streak.
2. We added approx. $3200 to a card with a $0 balance to pay for the vet surgery. I have an RSU grant coming in Dec that will cover this, but we may be faced with a month of interest before that money is available. I’ll calculate the estimated charge and see if it’s worth pulling out of an existing investment before we get charged with interest.

Total expenses for September were $12,241 with the addition of the extra vet expense. With no additional income in September, this put us in the red by $3880.

I need to recommit to live a little more frugally for the rest of the year. I personally am cutting out alcohol until the holidays to help reduce expenses. I also need to help solve the grocery planning struggle so that we can consistently plan meals (Planned meals definitely helps combat dining out)

Here we go!

-cb3