Author Topic: Mustachian Puberty - From Face Waxing to A Pencil Thin Mustache  (Read 3036 times)

artimus

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Hello mustachians.  I recently started reading this blog about two months ago and, like many others here, decided to take control of my finances which I thought were already under control.  I have a different story than many of you from what I've read, but suffered from the same pitfalls and have found myself in a similar situation. 

Short [read: long] history starts here. (skip to the end if you just want the financial breakdown/question):

Job:  Self-employed professional poker player since 2006. 
Wife's Job: College Graduate, soon-to-be schoolteacher
Age: 25 and 24, and 2 year old daughter
Story:
I began my career in 2005 at 18 with a $400 initial deposit onto an online poker site while going to college in Virginia.  By summer of 2006 that $400 had turned into 40,000 or so.  Like any smart person with a full FREE ride to college, I decided to drop out of school and pursue online poker full-time.  It went well.  My wife and I married in 2007, and in 2008 we decided to move to, where else, Las Vegas.  Not only was there bigger stakes for my job, but no state income tax was a big draw as well. 

About 3 years ago this time I had around $300,000 in cash with 25k in an IRA and had just signed with my wife on a new home with an FHA loan @ 5.5%.  That means virtually nothing down on our $280k home; 275k loan paying 2,000 per month including taxes and insurance.  We had a brand new 2009 Nissan GT-R MSRP 85k, about 40k financed (lol) and another 25k financed Lexus is350.  All this while my wife was going to school with student loans when we could have just been paying for it instead of making purchases.  Yes I was one of those Antimustachian fancypants I keep reading about who had just enough money and young person ego to make some dumb decisions.  Yearly expenses at this point: about 9k per month.

Like any business-owner, my income stream is unpredictable from month to month.  For 2010 I had a marginal year, not making enough to pay all of our expenses.  We wised up and sold the GT-R and got a cheaper SUV when we had a baby and have recently (a week ago) become a one-car family as my schedule is flexible.  Then in 2011 disaster struck.  On April 15th, 2011, known in the industry as Black Friday (link here for those interested http://fivethirtyeight.blogs.nytimes.com/2011/04/20/after-black-friday-american-poker-faces-cloudy-future/#), the US government decided to baby the US population and tell them how to spend their money and shut down Online Poker.  And although I live in Las Vegas, where poker is plentiful, the majority of my income still came from working online, so last year was a tough adjustment as a huge chunk of my income was cut off; but I believe I am back on track now for 2012 with a new schedule, and my wife will be graduating with her Master's degree soon and a teaching job paying ~35k.

Current financial picture
Assets:
35k cash
40k Roth IRA/SEP IRA
Liabilities:
14k loan balance on 2008 Hyundai Santa Fe @ 5%
265k left on mortgage on a semi-upside down house @ 5.5%

Estimated Yearly salary: 125k this year, then more like 150 next year with my wife's teaching job starting in September.
Expenses so far in 2012 after doing some Mustachian things in my life: ~6k /month

Expense Breakdown

Home    2,000
Auto & Transport   1,000 (435 min car payment pay 600 though to pay off more, 90 insurance, ~300 gas)
Health & Fitness   1,150 (400 health insurance, 700 in hospital bills @ 0% will be paid off in a few months, 34 gym membership that I can't get out of)
Food & Dining   600 (trying to get this down to 400-500, that last grocery article should help, Thanks MMM!)
Bills & Utilities   485 (last month's number, it gets pretty high in the summer out here for A/C bills. last month was mild. this number also includes cell phone bill and "GASP!" Cable TV...I know I know, planning to cancel but getting a great deal right now)
Shopping      300 (this was just last month, typically it is lower)
Personal Care    103.00 (membership to Massage Envy, is scheduled to be canceled in May at the end of the lease period)
Education 47.00  (random books and stuff my wife needed for school)
Business Services   35.00
Entertainment 50-100 (usually one dinner out per month and one other thing like golf for me or something similar)
total: 5,770

Question:  I want to get my expenses down to around 4500 per month, and I think I'm taking the right steps to do it and wanted some feedback and any tips on what I could cut out/do differently would be much appreciated.  For instance, I want to convince the wife to downsize the SUV, but she's still not convinced we can live with just one car, (we sold the other one a few weeks ago).  I don't think I want to pay the car loan off or pay cash for another vehicle though.  Given that I need cash on hand for my profession, that vehicle loan is leveraged, since I believe I can get much greater than 5% on that 14k. 

Anyways, I thought I'd share a scary story on how to turn 300k into 50k over 3 years via reverse mustachianism.  We'll call it Face Waxing to enhance the pain imagery. 

Also, I don't know if this is Kosher or not but I'll plug my blog if you want to read more about me over @ http://www.thewh00sel.liquidpoker.net.  Feel free to take that link off if it's frowned upon, just thought I'd share. 

Enjoying all the articles MMM, keep up the good work, and just know that you are turning people like me into useful humans working on reversing the stupidity and retiring early. 

-Art
« Last Edit: April 10, 2012, 11:00:52 AM by artimus »

nolajo

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Re: Mustachian Puberty - From Face Waxing to A Pencil Thin Mustache
« Reply #1 on: April 10, 2012, 05:40:18 PM »
If you've been reading a lot of PF blogs and MMM a lot recently, I'm sure some of these are things you know deep down you need to do. Given the housing market in Vegas, I imagine you may not have a whole lot of flexibility there. By semi-upside down do you mean that you can't refinance? If your wife really is dead set against a different car, then it's probably worth it to keep paying it down quickly. At least short-term I would hesitate to guarantee better than a 5% return on anything. Good for you for going to one car - that's a big change right there.

How do you have your health insurance? Is it though your wife's position as a student or are you on the open market? Given that $700/month charge it seems like you may have high deductible insurance already, but just in case you don't, you should probably go to that as 0% interest on a bill if you actually need that much medical attention is better than paying a lot every month.

For utilities - how's your insulation? A lot of houses that were constructed in the housing boom (any boom for that matter), particularly in warmer regions have woefully inadequate insulation. Putting extra insulation in your attic alone can help make your home easier to cool in the summer. Also, as someone who's working from home (which it sounds like you are) look into doing your work at the library or another public space. They're already cooling it, and if no one's at your home during the day, you can set your AC to the minimum to keep the food in your pantry from baking on the shelf. You already know the cable thing is typically verboten in ERE/MMM circles, and I would encourage you to get rid of it. If you have to keep it though, to keep both you and the wife on board, step down to basic if you're in a higher plan, etc.

Much as a good massage is nice, the membership has to go though I imagine it's cheaper at this point to wait than to incur any penalties. Make sure to get your money's worth in massages in the mean time! Can you really not get out of that gym membership? I know they can be ornery, but I can't imagine the contract is that tight. If it really is, plan to do the same when it comes to its end and nix it.

Without the details on food and other spending, it's hard to see what could be cut there. Frankly, since your housing expenses are so unlikely to be flexible, you're going to have to chip away at your monthly expenses rather than axing them in one fell swoop. I suppose you're a little closer than you think, since without the extra payments on the car you're actually only $600 off, but summer bills could make that gap a lot wider. Good luck!

arebelspy

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Re: Mustachian Puberty - From Face Waxing to A Pencil Thin Mustache
« Reply #2 on: April 10, 2012, 05:59:59 PM »
Hey, a 3rd Vegas forum member!  And a (semi?) pro poker player at that!  Awesome.

The wife and I are teachers here in Vegas.  Know which school your wife is going to teach at?

I'll definitely be checking out your blog, but just wanted to say welcome!
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

gooki

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Re: Mustachian Puberty - From Face Waxing to A Pencil Thin Mustache
« Reply #3 on: April 10, 2012, 08:30:47 PM »
Thanks for sharing your story.

The good news is your young and you have time on your side.

Just do the basics right and you'll be set - keep those expenses low, pay down your debts with any spare cash and don't look back.

artimus

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Re: Mustachian Puberty - From Face Waxing to A Pencil Thin Mustache
« Reply #4 on: April 11, 2012, 10:38:10 AM »
If you've been reading a lot of PF blogs and MMM a lot recently, I'm sure some of these are things you know deep down you need to do. Given the housing market in Vegas, I imagine you may not have a whole lot of flexibility there. By semi-upside down do you mean that you can't refinance?
The refinance situation is difficult because I had a loss carryover on my taxes so the banks I've talked to say that since I don't show any income on my taxes from 2010 it won't be possible.  I've filed for 2011 though now, so I will be trying to refinance again shortly and see if it takes.

Quote
If your wife really is dead set against a different car, then it's probably worth it to keep paying it down quickly. At least short-term I would hesitate to guarantee better than a 5% return on anything. Good for you for going to one car - that's a big change right there.
Thanks.  I think she will get a different car, as she's been coming around, but a manual seems to be out of the question for now, as she doesn't want to dedicate the time to learning it.  I tried pointing her to MMM's article about motoring with a manual, but she said it was too much all at once.  I'm thinking about just throwing in the towel on it and agreeing to buy some mid-range 10-12k used Kia Soul, or scion xB.  But if I can find a nice Prius in that price range it might be the best compromise.  Fuel efficiency and no manual option.
Quote
How do you have your health insurance? Is it though your wife's position as a student or are you on the open market? Given that $700/month charge it seems like you may have high deductible insurance already, but just in case you don't, you should probably go to that as 0% interest on a bill if you actually need that much medical attention is better than paying a lot every month.
I pay the health insurance privately through Humana One, when my wife gets her full-time job we will likely be getting it through that.  Monthly cost is currently $418.  We have outstanding medical bills from last year when we had to go to the Emergency Room for something, but those bills will be paid off within a few months and our only health bills will be the insurance.

Quote
For utilities - how's your insulation? A lot of houses that were constructed in the housing boom (any boom for that matter), particularly in warmer regions have woefully inadequate insulation. Putting extra insulation in your attic alone can help make your home easier to cool in the summer.
Good idea on the insulation, I'll have to insulate before the heat rolls in next month.  Any suggestions for insulation around windows and doors?  I've noticed some draftiness in the winter time, but didn't just want to jam calking in there or something, and then the weather turned nice so I haven't bothered. 

Quote
Also, as someone who's working from home (which it sounds like you are) look into doing your work at the library or another public space. They're already cooling it, and if no one's at your home during the day, you can set your AC to the minimum to keep the food in your pantry from baking on the shelf.
That's a neat idea, but it's rare that anyone isn't home and  I no longer work from home, I have to commute to the casino to work when my wife gets home from working.  Also when I was working at home I needed my computer setup with multiple monitors.  Difficult to pick up and bring to the library daily.

Quote
You already know the cable thing is typically verboten in ERE/MMM circles, and I would encourage you to get rid of it. If you have to keep it though, to keep both you and the wife on board, step down to basic if you're in a higher plan, etc.
I do intend on canceling and getting apple tv or roku or a similar product, but for now I am getting all the bells and whistles plus high speed internet and phone service for $90 a month (regularly was paying $185).  When I called to tell them I was thinking about canceling they gave me a break on my rate for the next 6 months so I took advantage of it.  Internet alone would be $45 so another $45 for what we were already using doesn't seem too bad.

Quote
Much as a good massage is nice, the membership has to go though I imagine it's cheaper at this point to wait than to incur any penalties. Make sure to get your money's worth in massages in the mean time! Can you really not get out of that gym membership? I know they can be ornery, but I can't imagine the contract is that tight. If it really is, plan to do the same when it comes to its end and nix it.
Yep, the leases on those memberships are kind of annoying.  There is only one month left on the massages, and then they're done.  The gym membership I'm not sure about.  My wife is the one who called them and unfortunately the salesman who signed her up promised her that she could get out at any time for a small cancellation fee.  The rep on the phone told her that was BS, but she signed and agreed to what was on the paper so we are stuck.  I'm going to try and get hold of the person who signed her up and see if he was just blowing smoke or if he had a way to get it canceled as a last resort.  We'll see I guess.

Quote
Without the details on food and other spending, it's hard to see what could be cut there. Frankly, since your housing expenses are so unlikely to be flexible, you're going to have to chip away at your monthly expenses rather than axing them in one fell swoop. I suppose you're a little closer than you think, since without the extra payments on the car you're actually only $600 off, but summer bills could make that gap a lot wider. Good luck!
Thanks a lot, I really appreciate the detailed reply.

Hey, a 3rd Vegas forum member!  And a (semi?) pro poker player at that!  Awesome.

The wife and I are teachers here in Vegas.  Know which school your wife is going to teach at?

I'll definitely be checking out your blog, but just wanted to say welcome!
She is teaching at Edwards Elementary right now as a long term sub.  Still trying to get her contract job closer to home.  There's an elementary school she applied to that is less than a mile from our house that has a lot of openings.  If she can get in there it would effectively raise her pay by a few hundred dollars a month in gas.  So fingers crossed there. 

Thanks for the warm welcome, looking forward to posting more in the future.