Author Topic: I wish to be a badass mustachian. Off to a start, where do I improve?  (Read 8140 times)

RyanHesson

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Now, I'm not expecting to be one of the ones who retires at 30. But I want to retire as young as possible. I think 40 is possible with a "stretch" goal of 38.

Where I am:

Demographics: 23 years old, bachelors degree, male; No wife or kids, probably won't end up with either
Current Assets: $50,000 (just barely crossed that threshold when my paycheck was deposited 2 days ago), should be around 60K by my 24th birthday.
Current Debt: None
Paycheck: ~$4850 (varies a little every month), which is after deductions for taxes, health insurance, lunch at work, and 401K
Monthly Spending: Rent $500, Utilities $120ish, Gas $60ish, Food+Alcohol $850ish, General $200ish
Big Purchases: None on the horizon, may take a vacation costing ~$800-$1000 sometime within a year, but recently had to buy some furniture
Savings: $3000 a month from pay check, $450 a month from 401K. 401K is pre-tax. Employer matches 50% but only adds it at the end of the year and is on a terrible vesting schedule, so I don't expect a huge benefit from that.

What I'm currently doing to try to improve:

1. Trying to reduce food costs. I'm hoping to get that Food+Alcohol down to $600, with monthly total spending down to about $1500.
2. Cash back on Credit Cards. Until a couple weeks ago I only had 1 credit card. I now have 5 and have a list compiled to help me get maximum cash back. I just got Chase Freedom, FIA Amex, Discover It, and Amex BCP (which I will drop once I can get Sallie Mae Mastercard). My goal is to get 2 US Bank Cash+ cards, 2 Sallie Mae Mastercards, Barclaycard Arrival, Citi Dividend, ChoicePrivileges, Club Carlson Premier Rewards (annual fee but great rewards), and as many BoA Better Balance Rewards cards as possible. In total I'm hoping that within a few years I can be looking at $1000 or so a year back from $1500 monthly + $6000 annual big purchase spending.
3. Researching on better ways to utilize my current assets. I'm currently looking at forex signals, which I'm going to assign $15,000 to. Unfortunately many of the best signals won't work for US clients (thanks Dodd, Frank, and Obama) but I think I can still get something good. If not I will look into moving money overseas (specifically there's a place in Finland that looks decent) to somewhere outside of US jurisdiction, but that's risky in itself.

What I've considered but decided against:

1. Get rid of the car. Where I live biking is only possible about 4 months out of the year, and there is no public transit in the area.
2. Move to reduce rent. There's nothing cheaper near my work. I used to commute 30-40 minutes each way to save $120 on rent, but I ate up most of that in gas, and the time is just not worth it.
3. Buying a house. I'm not confident I'll be here for long enough for it to make sense for me to own a house. 

What I'm worried about:

1. I have no idea what kind of returns I will be looking at in the future? What if in 2030 returns on equities is only 2% a year? What is there's massive inflation? Or what is the structures are all the same but there's another crash? How can I avoid a crash?
2. Because of how my company structures 401K, there's a good chance I get nothing, or very little of the match. Should I even bother with 401K?
3. How much do I need to be safe? How much should I be saving? If I saved $42000 a year would that help me much more than saving $38000?
4. What should my money be in?
5. If I decide to live here long term, should I be trying to buy a bigger place (maybe 3 bed 2/3 bath) and rent out the other bedrooms? Or what? Condo or house?

What else should I be doing to improve my chances at retiring young?  Any suggestions?

bikebum

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Nice job man, seems you are off to a great start! I'm only going to comment on things I think I can provide something that may be useful.

$600 still seems like a lot for food and booze; maybe going out is important to you? Got to start somewhere though.

$500 seems like pretty cheap rent to me. You got your own place? Roommates could help bring that down. About buying a house, search for rent vs. buy calculators on-line. They can tell you how long you need to live in the house to break even compared to renting.

Is biking really only do-able 4 months? Maybe you're right, or maybe you just need some better wet/cold weather gear. People bike in all kinds of crazy weather.

Market returns may drop, but what else would you do with your money? The whole economy is dependent on the market, so if there's a huge long crash it will probably suck no matter what you did with your money.

I like the Bogleheads Wiki (google it) for investing advice. A lot of people here like real estate/land lording; I don't know anything about that. Bogleheads recommends Vanguard index funds like Total Stock, Total International Stock, Total Bond.

I also have a spending goal of $1,500 a month. For FI, you'll need $450,000 to $600,000 for 3% to 4% safe withdrawal rate, assuming you plan to spend the same then. Here is a savings calculator you can play with to look at different savings and how long it takes to get your FI number: http://apps.finra.org/Calcs/1/Savings

Have fun!

RyanHesson

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Hi Bikebum,

I'm not really sure how I could get much below $600 for food+alcohol. Just basic food for 1 day is minimum $9, more realistically $11 or $12. Maybe  $5 for alcohol. I'm not big on bars but I'm a hearty drinker. Add in that sometimes I want to eat out and I thought $600 was really stretching it.

$500 really is the cheapest I could find anywhere near work. I have one roommate who pays $620 (he has the master bedroom and garage). My work is in the middle of nowhere, and everyone (pretty much, my apartment complex is about 75% employees of my company) who lives nearby works for that company, which pays pretty high wages. I tried living farther away but the commute just made it not worthwhile, and I wasn't saving much.

Where I am really is cold. I'm in one of those places that went 30-below this winter. Not unusual to have frost in early June and mid September.

I was actually on Bogleheads, they told me to come here. I hadn't heard of this place before.

My spending goal of $1500 isn't including big purchases though. So something like a vacation, a new computer or furniture, a new car, etc. My annual spending goal might be more like $21000. But additionally, I wasn't including health insurance in that (it's deducted from my pay check), which when I'm retired might be $250 or $300 a month. So that would push that $21000 up to $24-25000. And I don't know how my major spend categories, like housing and food, might change in the future relative to general inflation. Additionally, if I retire it would be hard for me to realize I can't continue and need to go back to work 20 years later, so I need to have enough to really be safe.

The other thing I could do with my money that's not dependant on the market would be putting it on following forex signals. In fact that would benefit from strong market fluctuations and trending (IE, if the crash is focused in just North America, just Europe, or just Asia), so if I could predict it in any meaningful way I would take it out of equities and put it in that. Assuming it works out, I'll be experimenting with it soon.

 

boarder42

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Dude cook food. Your minimums have to be based on restraint food. I can eat for 2-3 bucks a day cooking. 5 bucks for alcohol would be 5 beers at home a day give or take.

TomTX

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"Forex Signals" seems an awful lot like gambling, or at the very least market timing. Neither of which is really conducive to long-term investing.

warfreak2

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Yeah, forex is a zero-sum game; you only gain what other people lose, it's not an investment any more than poker is. I mean, you can make money playing poker, but most don't, and for those that do, it's a job.

In the stock market, everyone can make money, because the companies pay dividends and do buybacks, so money can come into the system without being lost by somebody else.


I'm not really sure how I could get much below $600 for food+alcohol. Just basic food for 1 day is minimum $9, more realistically $11 or $12. Maybe  $5 for alcohol. I'm not big on bars but I'm a hearty drinker. Add in that sometimes I want to eat out and I thought $600 was really stretching it.
Do you work on an oil rig, or an antarctic research station? I just can't imagine anywhere that is connected to society, where food really costs $9/day at a minimum - plus whatever you're deducting from your paycheck for lunches at work!

The alcohol is also a big warning sign, to me - mostly because you describe drinking as part of your identity; please, don't define yourself by how much you drink. It's hard to say how much booze you're getting for $5 when you aren't paying bar prices, but as boarder42 says, it could be five beers a day, or a bottle of wine, no way is that healthy for your body; even if it's just one glass of particularly expensive Scotch, it's still totally unhealthy for your finances.

The vast majority of people make choices without realising the effects of those choices, or even that they are choices at all. A big part of the MMM philosophy is identifying those choices and really thinking objectively about whether that spending is really the best way you could use your money - the alternative is not having to work to earn it, and for most people that's a pretty high bar to overcome.

Chances are, if you're drinking every day simply because that is who you are, then you aren't really even enjoying it that much - to say nothing of the real possibility that you have an addiction. If you start doing something like drinking every day, you can enjoy it at first, but over time you adapt to it, and after a couple of months that's the new normal, and you are still doing it but you returned to your baseline happiness, so you aren't getting the same enjoyment from it.

Sorry if this sounds harsh, I do want to help you if I can, but by giving my honest opinions. Maybe I'm totally wrong, it's hard to tell from a couple of internet posts, so don't read it as me trying to judge you. Also, welcome to the forum.

EK

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Overall you're doing awesome, but I have to agree that the food budget is really nuts for a single dude. Maybe for a family of 6 it's reasonable.

My husband and I eat awesome food, including few bottles or wine, or 24 case of beer every month. (You might be drinking too much :/ ) Our food budget, which we often come in well below, is $250/ month. You have to skip the packaged foods and actually eat real stuff like fruits and veggies. We usually eat for like $5 a day for both of us. Lots of organic stuff.

Paul der Krake

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But for realz, $600 should feed two people and still leave you with enough bourbon to knock you out week in and week out.

Either you live on the moon and have no control over space prices, or your roommate is stealing your food and secretely running a soup kitchen in the garage.

Mrs. Frugalwoods

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I'll chime in on the food & alcohol budget too--to give you an example, which may not work for you, but just to illustrate how cheaply it can be done (and in fact others do it MORE cheaply): my husband and I spent $163.94 on food and alcohol for the two of us in the month of June.

We don't eat out and we cook all of our food from scratch. We eat very little meat or dairy and our diet is primarily vegetables, fruits, oats, lentils, garbanzo beans (think homemade hummus!), rice, quinoa, and cheap frozen salmon from Costco. We also enjoy the occasional drink and so we buy boxed wine and small quantities of very nice beer. Everyone has a different approach to how they eat and this may not be for you, but I just wanted to share that one can eat well for very little--certainly less than $600/person.

Frankies Girl

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Other than the food/alcohol, you're doing pretty well (dude, no debt and a healthy chunk invested - awesome!) but that food/drink line is crazy high for one person. Learn to cook some simple tasty meals and consider having friends over for food (potluck where everyone brings something) and your food budget should drop by a huge amount. You could still go out occasionally, but maybe if you currently average 3 times a week, drop that to 1-2 times a week and have friends over one time a week and you'll see a huge difference in your food/drink costs and shouldn't feel deprived. Check out the site budgetbytes.com for easy and cheap eats. You could even pack your lunch and save the money you're spending for that. I would think a good goal to shoot for would be $400. Still pretty darn high by Mustacian standards, but eating out and socializing is something I personally value myself, (but I would suggest you do some reflection on the amount of alcohol you're consuming - don't know how much you drink, but if it's a significant portion of your budget, that might be a sign that you want to really think about it)

As no one has mentioned it yet, yes, you probably should continue with your 401K even if you're getting a crummy or even no match. This is tax deferred savings and it also reduces your taxable income - a two-way winner. Sure, it's awesome when you have good choices and get a good match, but even if both are bad, you still should be thinking about the fact that the money is coming out of your paycheck before taxes, so you're having more money to invest. And yes, you can absolutely tap retirement accounts before the actual traditional retirement age (Roth pipeline/SEPP are two methods). You are young, and time is your biggest asset right now - even if you plan on ER, compounding and time are going to make a huge difference in what you are going to end up with. Investing early makes SUCH a difference instead of playing catch up when it's less than 10 years from your ER date...

Your spending rate is just as important as your savings rate. The typical thought is that you want 25 times what your yearly spend is to be considered FI (financially independent). If you could get your spending to around 1500/month, then that leaves you with ~3,300 to invest/save. I'd say put the 3K into investment (you should increase your 401k contributions, Roth IRA maxed each year, then go to taxable account) and use whatever is over the 3K (around 2-300/month) could fund your savings for things like vacations, a future house or other big purchases. 

It sounds like you haven't gotten a good handle of how easy and efficient index investing is, and still are trying to work the angles and worrying over the "what ifs" that could happen. Most people tend to worry and freak out about inflation/crashes/returns when they don't understand how the whole thing works. I'd suggest reading Jim Collins' stock series (http://jlcollinsnh.com/stock-series/) and definitely hang out around these parts and read and ask questions - it is eye opening how easy it actually can be to get a good return and minimize expenses - and at the same time stop worrying, trying to time the market or trying to pick stocks (must read:  http://jlcollinsnh.com/2011/06/02/why-i-cant-pick-winning-stocks-and-you-cant-either/ ).

« Last Edit: July 05, 2014, 07:47:38 AM by Frankies Girl »

nereo

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #10 on: July 05, 2014, 08:44:53 AM »
RyanHessan:  Your posting certainly has my attention.  On one hand I'd like to commend you for realizing that ER is a possibility at age 23.  On the other hand, several things in your post really have me worried.

Let's start with food + alcohol, which you put at $850ish/month.  Economically, this is a huge expense, and is about 2.5x what my fiancée and I spend per month for two people - and we are notoriously spendy with groceries.  For a single person, $300 is more than enough to cook luxuriously and still have enough craft beers in the fridge to have one (or two!) every single day.  Then there's the matter of your health - I'm worried about anyone who has more than 5-7 drinks/week.  From what you've said I suspect you might be much higher.  It's not good for your immediate health and can lead to things that are much worse. Even if you only go with the economical argument, considering your timeline (~17 years to retirement), going down to $300/mo for food and investing the difference could yield you $200k (!) with the historical average, adjusted for inflation.

There's also your chasing of reward-card bonuses.  There's nothing wrong with this strategy per-say, but you seem to be putting a lot of work chasing down the 'easy-money', when doing things like cutting your food/alcohol budget (see above) and improving your tax situation (see below) will do you far more good.  Plus, with every card your risk of forgetting to pay one goes up, or they change their terms (it happens, often), and your rewards are suddenly not worth it.

On to your savings.  The great news here is that you are saving a ton of money for someone so early in your career.  But it sounds like you are kind of shooting yourself in the foot with how you are savings.  For starters, you seem luke-warm on your 401(k).  Your company's options aside, putting enough in to get the match is the easiest returns you will ever get.  Many companies only put their contributions in at the end of the year - tha'ts an employee retension strategy - but to you it should make no difference.  Also, you make no mention of having an IRA or a HSA.  Contributing to these will lower your tax bill and shorten the time til retirement.

now, to address a few of your specific questions:
Quote
1. I have no idea what kind of returns I will be looking at in the future? What if in 2030 returns on equities is only 2% a year? What is there's massive inflation? Or what is the structures are all the same but there's another crash? How can I avoid a crash?
2. Because of how my company structures 401K, there's a good chance I get nothing, or very little of the match. Should I even bother with 401K?
3. How much do I need to be safe? How much should I be saving? If I saved $42000 a year would that help me much more than saving $38000?
4. What should my money be in?
5. If I decide to live here long term, should I be trying to buy a bigger place (maybe 3 bed 2/3 bath) and rent out the other bedrooms? Or what? Condo or house?
1) no one has any idea what the return on equities will be for any given year.  Certainly not 16 years in the future.  But the great thing is that, if you are looking at decades-long time scales, it doesn't matter.  First, it doesn't matter because you can't change what happens, so it isn't worth worrying about (see "circle of influence" on MMM), and second your solution to below-average returns is always this:  save more.  If you want some comfort, look through historical periods going back the last 60 (or even 100+) years.  In the last 60 years alone we've had periods of hyper-inflation, 9 recessions, the 'great recession', and about a dozen military conflicts.  Even after all of that the average returns, adjusted for inflation have been about 6.8%
2) yes.  take advantage of your 401(k).  You will get the tax benefit regardless.  If you are *certain* you won't get any company match, then max out your IRA and HSA first, then go back to the 401(k).
3).  Easy answer to harder question:  you need 25x your expected expenses invested in the market to retires.  So, if you want to live on 30,000/yr, you need a portfolio of $750,000.  If you invested $42k/year you would reach that goal in ~ 10.5 years with market averages (given your existing $50k).  If you reduced that to $38k then it would take almost a year longer.  if you wanted to "shoot high" and go for $1.5M the estimated time frame would be 16.5 and 18 years, respectively.
4) I'd recommend a low cost index fund.  Historically the best rate of return.
5) depends on your market. 

hope that helps
N

BZB

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #11 on: July 05, 2014, 09:10:01 AM »
Previous posters have made most of the comments I would make. I just wanted to chime in that it's great you have no debt at your age, especially student loan debt.
You might want to post your house buying question on the real estate/landlording section of the forum to get more detailed answers from people with experience. You mention you don't plan to get married/have kids, but it sounds like you are open to having house mates. Obviously your personality will determine your options here. I personally wouldn't want to purchase a larger house than I need for the following reasons: having housemates makes me uncomfortable because I'm introverted and I have a kid so unless I knew the person really well i wouldn't trust them alone around my kid, trying to find housemates who are mustachian enough to live with (willing to turn the AC off when leaving the house, minimal utility usage), and if instead I lived alone in a house too big for me I would have an excuse to not keep my belongings to a minimum and I would have to aircondition/heat too much house.
If you can tell us the area where you live, that would help. You don't have to say what city if you don't want to - just saying big city, lots of public transportation vs. rural small town vs. college town would give us more info on ways to maximize your mustache. Do you live in area where it would be easy to sell your house if you got a job offer that made more money and you wanted to move quickly?

bikebum

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #12 on: July 05, 2014, 11:06:34 AM »
About drinking, I have 1 or 2 drinks most days. Every so often I go a week or so without drinking at all, not intentionally I just don't feel like it. Studies have not found any negative health effects from moderate drinking, which is defined as 1 or 2 a day for men and 1 a day for women. Moderate drinkers are usually healthier than both heavy drinkers and non-drinkers. I'm not saying it's good for you, but it's probably not bad either. Yeah, it's unnecessary spending but I've decided it's worth the cost for me. $5 a day does seem like a lot though.

Just abstain once in a while and see if you get any cravings. You can also check if you've adapted to it and aren't getting anything positive from it like warfreak2 mentioned. Then you can decide if you want to bring it back into your life, I always choose to.

Negative 30 degrees! Small arctic town? I've heard food can be very expensive in places like that, so maybe your food spending goals do make sense.

Can you ski to work? Kinda joking but kinda serious too.

I'll second jlcollins, great stuff! Did you read the Bogleheads Wiki or post questions on the forum? They put a lot of good work into the wiki and I wouldn't be surprised if they don't want to answer questions on the forum that can be found by reading the wiki.

Catbert

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #13 on: July 05, 2014, 11:23:29 AM »
 Question about a small detail...

You are getting a Sallie Mae CC which I assume gives you rewards that somehow apply to SLs.  Yet you don't show any SLs.   Maybe I don't understand Sallie Mae or how that CC works.  Or do you have SLs lurking somewhere that aren't reflected in your post?

I agree with the other.  Expensive food/alcohol but good otherwise.

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #14 on: July 05, 2014, 01:45:18 PM »
On food, what are you guys eating? For one day I might eat 1 chicken which costs $8, 1 packet of potatoes which costs $3.50, and 1 bundle of broccoli which costs $2 for total of $13.50. Or I might eat tacos, which is 1 1/3lb of ground beef at $4.50/lb for $6 (yes, that's literally what it costs here), 1 packet of shells and seasoning at $3, the top part of the head of lettuce (I usually only buy the leafy part) at $.60, some cheese (a small amount out of a big packet,  maybe another $.60, I'm not sure), and half jar of salsa at $3.50 a jar (so $1.75 for the half jar) for $11.95. Or I might just be lazy and make frozen food, I like those bertolli frozen meals because they're pretty big and taste pretty good, and price is not too bad. 2 of them for $6-$7 each (the price is slightly different every time I go to the store) for a total $12-$14. And in these prices I'm not even including stuff like salt or oil.

So I'm wondering, what is it that you guys eat that's $3 or $4 a day?

I don't have time at the moment to go through all the responses, so I'll come back later. Just wanted to respond on food since so many mentioned it.

Edit: Also, I should add there's only one grocery store in town. I can go maybe 15 miles away to a bigger town where there's a few so prices may be more competitive, but I'm not really sure.
« Last Edit: July 05, 2014, 01:48:19 PM by RyanHesson »

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #15 on: July 05, 2014, 02:28:53 PM »
For alcohol, in a month that might be 1 handle of Buffalo Trace at $50, 1 handle of Kraken at $35, and 6 4-packs of whatever beer at $10-$12. I usually drink with some friends after work and on weekends. That's basically what there is here to do. I'm not stingy on it so I probably share more of my booze than gets shared with me, but not much more. I think I drink on average maybe the equivalent of 3 shots and a beer, which would be more like 2 and a beer on weekdays and 4-5 and a beer on weekends.

Edit: Probably less than that actually, because sometimes from work I'm just tired so I just to go sleep.

MBot

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #16 on: July 05, 2014, 02:54:30 PM »
For the short version of "what do you eat that's $3-4 a day" go to budgetbytes.com . Awesome ideas!

In reality, I drink protein shakes with a crapton of spinach/frozen fruit for breakfast.  With protein powder from Costco. Or 2 eggs scrambled. Usually leftovers for lunch and meat/pasta or meat/beans or meat/veggies/bread for dinner. 

In general, it looks like you're doing really well. Really well. So I'm impressed and congratulate you.

The reason people comment mostly on this is that your financial "report card" is As and Bs, with one D- in food.

So make it your mission to "improve your grade". And make it hard enough so it saves you a chunk of change and requires real work.

I'd set a challenge: eat/drink for $350 this month. That gives a nice $500 extra in your pocket if you "win" at this challenge.

And it pays well! If you invest 10 hours into planning/getting skills/ learning to cook/ saving that $500. Your rate is $50/hour.

And next month if it only takes 8 hours to save $500, your rate is $63 an hour. It just gets better.

One thing that's obvious in your meal descriptions is that you're spending a ton on meat and expensive carbs.

So your challenge could be 3-fold
- Source and portion the cheapest 3 proteins possible
- Find 3 cheap carbs you enjoy, so you eat more filling meals.
- Add fiber and veggies to every dinner to make it more filling.

For example, even if you eat a pound of meat at dinner

- get chicken breasts for $1.99/lb. or $2.99/lb and freeze 1-pound portions in ziploc bags.

- It's about the same price for boneless pork chops. Do the same.

- buy ground beef for $4.50/lb, but mix it half and half with TVP (texturized veggie protein, maybe 0.50 a pound and spices. Your cost for 1 pound for taco meat is $2.50. Cook up ten pounds and freeze 1-pound portions in ziplocs for tacos.

If that sounds weird, just wait until ground beef goes on sale and make a trip to stock up for $2.40/lb or whatever. Make taco meat and freeze.

Carbs
-you're eating an entire thing of taco shells for one meal? What about Spanish rice on the side?
 If you cook some white rice (20 cents), stir in some chicken bouillon powder, onion or onion powder, and a spoon of that salsa.... You have Spanish rice. You can eat only half the package of taco shells and still be as full. Or mix  the ground taco beef with the rice instead.

If you can bake some potatoes and buy a box of pasta /jar of sauce, you've now got 3 cheap carb sides.

Mrs. Frugalwoods

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #17 on: July 05, 2014, 04:05:39 PM »
On food, what are you guys eating? For one day I might eat 1 chicken which costs $8, 1 packet of potatoes which costs $3.50, and 1 bundle of broccoli which costs $2 for total of $13.50. Or I might eat tacos, which is 1 1/3lb of ground beef at $4.50/lb for $6 (yes, that's literally what it costs here), 1 packet of shells and seasoning at $3, the top part of the head of lettuce (I usually only buy the leafy part) at $.60, some cheese (a small amount out of a big packet,  maybe another $.60, I'm not sure), and half jar of salsa at $3.50 a jar (so $1.75 for the half jar) for $11.95. Or I might just be lazy and make frozen food, I like those bertolli frozen meals because they're pretty big and taste pretty good, and price is not too bad. 2 of them for $6-$7 each (the price is slightly different every time I go to the store) for a total $12-$14. And in these prices I'm not even including stuff like salt or oil.

So I'm wondering, what is it that you guys eat that's $3 or $4 a day?

I don't have time at the moment to go through all the responses, so I'll come back later. Just wanted to respond on food since so many mentioned it.

Edit: Also, I should add there's only one grocery store in town. I can go maybe 15 miles away to a bigger town where there's a few so prices may be more competitive, but I'm not really sure.
To answer your question, here's what my husband and I eat on a daily basis, with some variation. I've written more about our groceries here if you're interested, but this is our basic meal plan, which costs approx $140-160/month for the two of us:

Breakfast: whole grain oats (raw, not pre-packaged) with fruit
Lunch: salad greens and homemade soup (bean, lentil, or vegetable) or quinoa with veggies
Snacks: bananas, apples, oranges (depending on the season)
Dinner: salad greens/veggies with a protein (tofu, garbanzo beans/hummus, lentils, quinoa, avocados, or cheap frozen salmon)
Dessert: dried fruit and/or dark chocolate (bought in bulk at Costco)
Drinks: coffee (made at home), seltzer (made at home with our SodaStream), boxed wine

That's too bad you only have one grocery store--we're certainly able to save a lot by shopping at Costco. Do you have any type of warehouse/bulk food option?

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #18 on: July 05, 2014, 05:46:16 PM »
There's a Sam's Club about 20 miles away back in the town I was living in before. I still go there sometimes anyway because if you ever need to buy any clothes or electronics or anything like that you have to go there. Usually we'll go with like 4 of us all at once to save a little on gas. Can a Sam's Club membership be split between the 4 of us? It's always just the same 4 of us that always go out there. The closest Costco is a little over 100 miles away, so that's a no-go.

As for potluck, my few friends here can never agree on food. My roommate and one of my friends only eat really bland food. My other friend can cook well but he doesn't like anything I make, he thinks anything I make is too salty. My roommate usually just eats at one of the local bars anyway. If he ever cooks anything it's just a frozen meal he puts in the microwave. But for the friend who cooks well, he's not doing any cheaper than me. He usually makes some fish or something.

The veggie protein sounds weird. I don't think they'll even have that at the local grocery store, but I can try Sams Club or something. I'm still skeptical about using that even but I can try once. I don't know how to cook raw chicken, I usually buy the cooked ones from the store, but I can try. One thing I cook sometimes is a rice with veggies and meat and fried egg thing (if you're familiar with Korean food, BiBimBop) but I haven't made it here because they don't really have a lot of the ingredients at the store here (specifically bean sprouts, cabbage, yellow radish, or the right kind of sauce). It's a bit cheaper of a meal though, so I can try to see if they have the ingredients at Sams Club or something.

For forex, yes, it's a zero-sum game. But the idea behind the signals is that you're just copying trades from an expert trader who does do it for a living, and it's set up to do it automatically. Still very risky, but I'm going to just give it a test with just $15,000, and if I lose $5000 I'll take it out and go back to more traditional investments. Making 7% a year on an index fund and having to worry about a crash is less exciting of a proposition. Plus if I see that we're in the middle of a downward spiral, I'd like to take my money out and put it in something not economy dependent for a while until things look to have improved.

My 401K is pre-tax, so I will pay taxes when I take the money out. I fully contributed to my IRA for 2013 and 2014 when I got my signing bonus, but this was the post-tax one so I don't have to pay taxes when I take the money out. Should I change up when I'm paying taxes on these or what? I'll probably fund 2015 and 2016 in January 2016 I guess.

My actual investments are:

~$2600 Fidelity Select Industrials Portfolio in my IRA post-tax
~$2700 Fidelity Select Chemicals in my IRA post-tax
~$6200 Spartan Small Cap Index Investor Cl in my IRA post-tax
~$1300 FID FRDM INDX 2055 W (Fidelity's target retirement 2055 thing) in my 401K pre-tax
~$1700 in a variety of different small investments in my 401K pre-tax
~$12,800 in Vanguard Life Strategy Growth
~$15,000 I'm putting towards a Forex Signal (this is an ultra risky thing but with a high upside - basically an experiment, if I lose $5000 I'll cut my losses and move it back to something more traditional)
~$8100 sitting in my checking accounts and wallet (I'm going to try to use $5000 for something soon - Maybe that lending club thing listed on this site)

For the Sallie Mae card, you can just get Cash back. The having it go towards student loans is an option, not a requirement. I paid off all my student loans.

For housing, I have the AC argument with my roommate all the time. Still, even if we left the AC on all day every day during the summer months, it's still cheaper for me to let that go on than to live alone. But we've come to an agreement, that when it's above 75 outside, we run the AC. When it's at or below, we turn it off and open the windows. It's only 75+ maybe 50 days a year or so, and it's usually less than that at night, so under the agreement we shouldn't have it running much. I'll ask about the buying a house thing on the other forum, but I'm still not sure I'll be here long enough to make it worthwhile yet even.

For where I live, I live in a small "rural" (as rural as any actual town can be) town. There's a bigger town/small city about 15-20 miles away where there's a hospital and the normal stores like Walmart and Target and such. The one thing I'm worried about with buying a house here is that almost everyone here works for the same company and if they don't they're related to someone who does. If the company cuts jobs, the housing market is dead and I won't be able to sell the house for half what the market rate is now. The market may be similarly bad if the company cuts jobs in the bigger town nearby, because a lot of people there also work for the same company and just commute over.

lpep

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #19 on: July 05, 2014, 08:14:18 PM »
Here's an idea: if you're looking for something a little more "fun" to watch than an index fund (I will argue that it's still fun to watch that...), why not try peer-to-peer lending instead? Prosper or Lending Club can give you a 15% return, MMM has written about it. Day by day, you can check how your loans are doing.

You're not going to find any support on here for Forex trading. The idea that you are willing to lose $5000 on a gamble when you could put the same money into VTSAX and turn it into $5500 or $6000 in the same timeframe is very strange to me - this isn't a game. Read Jim Collins's stock series. Also realize that while you're really into this now, you won't be forever.

I'm going to take the other road and say you're doing fine on food at $600. It seems like you don't spend much in other budget categories, you have a roommate, you're a young dude, and living completely bare bones is exactly zero fun. If the one thing you spend money on is eating out and drinking some, fine. If you want to save a little more, learning to cook well (and homebrew - it's SO much fun!) is a life skill that will pay you back time and again.

Welcome to the club.

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #20 on: July 05, 2014, 08:26:49 PM »
I considered home brewing once, but never really followed up on it. The one reason is that I love the very malty beers but don't really like hops much. I grew up on Malta and Ovaltine, and have always loved the taste of malt. How much does it really save? It seems like there's a substantial investment required as well, I don't want that to be useless if I find that I'm just not liking anything I brew.

I was thinking of taking 5K from my checking and putting it in the lending club. I hadn't heard of it until yesterday when I saw it on this site. If my forex experiment fails but this is succeeding I'll probably move my money from forex to this as well.

The "willing to lose $5000" is because I believe it is likely to be very profitable. That $5000 is my global stop loss. If that $15,000 is reduced to $10,000, I'll kill all positions, take the money out, and put it in something more traditional. But I don't believe that's what's going to happen, that a worst case scenario, I won't lose more than that.


lpep

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #21 on: July 05, 2014, 09:02:06 PM »
I considered home brewing once, but never really followed up on it. The one reason is that I love the very malty beers but don't really like hops much. I grew up on Malta and Ovaltine, and have always loved the taste of malt. How much does it really save? It seems like there's a substantial investment required as well, I don't want that to be useless if I find that I'm just not liking anything I brew.

I was thinking of taking 5K from my checking and putting it in the lending club. I hadn't heard of it until yesterday when I saw it on this site. If my forex experiment fails but this is succeeding I'll probably move my money from forex to this as well.

The "willing to lose $5000" is because I believe it is likely to be very profitable. That $5000 is my global stop loss. If that $15,000 is reduced to $10,000, I'll kill all positions, take the money out, and put it in something more traditional. But I don't believe that's what's going to happen, that a worst case scenario, I won't lose more than that.

Well, you're in luck not liking hops much, because hops are the most expensive part of homebrewing. Homebrewing can be as expensive or as cheap as you want it to be, really. If you're happy drinking Bud Light, don't homebrew. If you love craft beer, it can save you a bunch of money! Equipment to get started costs about $60-$75 (two 5 gallon plastic food-grade buckets, a couple siphon tubes, big pot, sanitizer, bottle caps, big metal spoon, air lock, hydrometer, bottle capper, bottle filler hose attachment thingy) plus max $40 for a five gallon batch of malty goodness. Five gallons fills about 50 bottles, so that's 80 cents per beer. It's a labor-intensive process, so a labor of love... don't start homebrewing to save money. The beauty is you can tweak recipes to your tastes, so make a super malty brew you can't buy. Yum. And be glad you live in a colder climate - most ale yeasts need temperatures around 60-65 to work their best!

Brewing can get much, much more expensive when you add in kegging equipment, brewing with all grain (this is just for malt extract brewing, which is what you'll want to start with anyway), or adding in fancy ingredients - which is fun to do for sure! But you can keep the cost down by being smart. If you have a local homebrew supply store, talk to them!

I also recommend keeping an eye on Craigslist for homebrewing supplies. Lots of people try it and either don't like it or love it and upgrade their kit. Either way - lots of beginners kits out there. Don't buy a Mr. Beer, you'll outgrow it quickly.


Forex: I don't know enough about it, really, I just know that for me an index fund is all the risk I need. Keep in mind that most people lose money in the stock market because they buy high and sell low, and selling low is essentially what you would be doing if your Forex trading fails. We're investing for a long time, and going in 100% stocks in VTSAX is aggressive enough for me. Also watch any fees you might be paying - those add up. To me, watching my 17k in VTSAX turn into 18k in less than two months has been riveting enough!

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #22 on: July 05, 2014, 09:55:16 PM »
No luck on a local supply store, unless CVS will do (it showed up as one when I typed Homebrew supply store into google maps). If not, about 110 miles away for the closest one, and I don't have much reason to go there otherwise. I'm going to drive down home for Thanksgiving, and either I can check out if there's something there. And if not I drive through a few big cities there and back, so there'll be something on the way.

I'll check out craigslist also. Thanks.

I could probably do cheaper with something like that blahblah, but the costs of things you list are just more expensive here. Eggs are 2.89 for the cheapest ones, but I usually get the ones that are 3.09 because they're a bit bigger eggs. The turkey meat (I usually eat turkey) is $6/lb for the off-brand stuff. I usually get the Hillshire farms stuff which I think was $6.89 because it's just slightly more and it does really taste better. Usually for a sandwich I also put tomato, lettuce, and lemon, which adds like $1 to each sandwich. I do the sandwich route sometimes, but it works out to something like $6 for a sandwich for lunch (which is about what company lunch costs anyway). I haven't bought Mac and Cheese or Hot Dogs so I'm not really sure what they cost. I tend to avoid dairy other than eggs and a little cheese, but I get Almond Milk which is like $4.29 for the half-gallon. I try not to buy it much because it is expensive.

The one thing I can save on is coffee and orange juice, because the coffee and orange juice is free at work. So I don't buy any.

I'll try and do more research into cheaper meal recipes though. Was planning on doing so anyway to get it down to $600 a month anyway.

lpep

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #23 on: July 05, 2014, 10:02:31 PM »
http://www.northernbrewer.com/

They ship! This is probably your best bet, they're widely known and have regular sales. Good luck!

Goldielocks

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #24 on: July 05, 2014, 11:00:53 PM »
Great start!


I think you are on the right idea about a house and have you room mate costs down.  You may be able to share rides in winter or pay gas for someone else to drive you?

Keep your plans flexible, you may change you mind about what you want in life in if a SO is in the picture.  Watch out for expensive locked in things like big debt, house, some investments,etc.  Many are good ideas but life can change.

FYI. Your food prices are close to those in my area.   Part of your cost is that you likely have a physical job or hobby and eat a lot.  That means that a bowl of oatmeal or two eggs and apple may not work for you.

Look for the foods that are cheap, stores well, easy things to make to spread out your more expensive items.  Stores well is important so you can buy at costco or Walmart, and won't spoil if you forget them for a couple of days.



E.g.

Rice. Onions in 3 lb bag.
Diced tomatoes in a can.   ( for pasta rice or make simple salsa).   Frozen veggy in bags. (Cheaper than fresh here and don't spoil, simple to prepare).
Potatoes in 20lb bags are cheap.   Like $5 to $10.  For 20 1 lb servings. Share your mashed potatoes for some of what your room mate made?  Potatoes ( uncooked) Will last 4 to 6 weeks in cool dark place if you don't mind tossing a couple bad ones.
Oatmeal
Green head of cabbage may keep for 2 months in fridge.   Shred some fot tacos or put in rice, or ? Bimbo?
Buy bread loaves at Costco and freeze.

Lastly. ...  Lentils take 20 minutes and are so cheap, easy and filling.  My kids actually ask for them and I only started making it because my son is starting to eat a lot. I thpught they would be bland.  If you learn to cook one thing, this is it...

Handful of carrot (buy frozen, so easy !), chop 1 onion, put in pot with 2 cups of water and 1 cup lentils.
Add garlic  and any other spices, salt and pepper.  Bring a o boil, boil gently for 20 min, until soft.   Eat.  Save some for tomorrow.  Adjust water for thick or thin versions.  Use celery or other add ins.  Check internet for ideas.

Eat with half a chicken, save half chicken for tomorrow's meal...  Etc.

Also, try boiling chicken bones in a small pot of water, for 1 hr, and freeze in containet.Use this instead of water for rice, lentils, etc.

Try the home brew, or not. My suggestion is to go on a cash beer budget, so you make whatever amount you like last all month.  It will naturally adjust your choices, which is hard to do when tired after work.

Good luck ! 

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #25 on: July 05, 2014, 11:42:23 PM »
I'll probably get the Sam's Club membership (looks like $45/year) and see if anyone wants to share with me. Probably just go on Saturdays and get everything for the week since I don't want to be driving out there all the time, $7 in gas each trip evaporates a lot of the savings. It will probably take a bit of practice to get costs down a lot but I'll be working on it. First thing I've probably got to see what they have there and what it costs before I can do anything smart with that membership.


warfreak2

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #26 on: July 06, 2014, 05:10:49 AM »
For forex, yes, it's a zero-sum game. But the idea behind the signals is that you're just copying trades from an expert trader who does do it for a living, and it's set up to do it automatically.
This sounds very profitable... for the "expert trader". If you can predict the future, you can reliably make money. Your expert trader, with thousands of people copying him on a time lag, can predict the future - he knows what thousands of people are about to do!

Say he buys Icelandic Króna. All the people copying his trades will buy Icelandic Króna too... all of that demand for Icelandic Króna will push the price up, at which point he sells for a nice profit. Copying a winner doesn't mean you will win - in fact, the opposite: with enough people copying you, you can win against them.

Quote
Still very risky, but I'm going to just give it a test with just $15,000, and if I lose $5000 I'll take it out and go back to more traditional investments. Making 7% a year on an index fund and having to worry about a crash is less exciting of a proposition.
So let me get this straight, you're ok with losing 33% of your principal, but you don't want to invest in a broad-market stock index fund because of the chance of a crash? 33% is about the worst-case scenario for a stock market crash, and the market has recovered from that kind of crash every single time. Also, the long-term (i.e. over 30 year periods) return of the S&P500 is pretty reliably 10-11%, not 7%:



7%/year is historically about the worst it's ever done over a 20-year period:


Thegoblinchief

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #27 on: July 06, 2014, 09:56:21 AM »
Learn to cook! Higher food prices makes it more challenging, but does the local store do any sales or specials? Shopping based on what's cheap, not on what you necessarily normally eat, can help you learn creativity and save money.

I've found myself staring at the fridge and googling for ideas based on the ingredients I'd bought (or bought too much of).

But outside of that line item, you're doing okay.

senecando

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #28 on: July 06, 2014, 10:04:34 AM »
Employer matches 50% but only adds it at the end of the year and is on a terrible vesting schedule, so I don't expect a huge benefit from that.

...

1. Get rid of the car. Where I live biking is only possible about 4 months out of the year, and there is no public transit in the area.

We might work for the same company. :P

RyanHesson

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Re: I wish to be a badass mustachian. Off to a start, where do I improve?
« Reply #29 on: July 06, 2014, 11:48:05 AM »
I don't think my company has anything in Wisconsin. Or you commute by airplane.