How To: Write a "Case Study" Topic

[swick]

Want specific info related to your situation?

Please use the following guidelines/format as applicable to your situation to ensure we have ALL the information we need to help.

Topic Title: Reader Case Study - your question here

Life Situation: IRS filing status, number & ages of dependents, and anything else (state/country of residence, age, etc.) you are comfortable sharing.

Gross Salary/Wages: Before any deductions

Individual amounts of each Pre-tax deductions 401k, HSA, FSA, IRA, insurance, etc. - whatever you have

Other Ordinary Income: Provide sources and any relevant details, the more the better

Qualified Dividends & Long Term Capital Gains: If these are significant for you

Rental Income, Actual Expenses, and Depreciation: If these are significant for you

Adjusted Gross Income: This should equal the additions and subtractions above.

Taxes: Federal, state/local, and FICA.  These should be consistent with your AGI and Life Situation.  For non-U.S. posters, we’ll have to take your word for these.

Current expenses: Provide breakdown and relevant details.  Aim to have “Miscellaneous” somewhere ~2.5%.  Much lower and you may be providing too much detail, much higher and you have an obvious problem of not understanding your spending.

For mortgage payments, separate the P&I (which stop when the mortgage is paid) from the T&I (and anything else) which continue as long as you own the property.

Expected ER expenses: (optional, if relevant)

Assets: Amount & description - include current asset allocation plan if you have one
Definition of assets: Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property.

Liabilities: Description, original loan amount, rate, original length, and monthly payment (which should be consistent with a spreadsheet PMT calculation).  Add current balance and time remaining if close to final payment.

Specific Question(s): Providing a detailed breakdown is important, so is asking for specific information so we know what kind of help/advice you are looking for.

The Case Study Spreadsheet (see Case Study Spreadsheet updates for a link to the latest version) can be downloaded and used to help organize your case study posting.

It includes income, expense, and investment categories that will cover most situations.  For "not too complex" cases it will calculate IRS, SS, and Medicare taxes exactly, and state taxes approximately, helping one evaluate the after-tax effects of 401k, HSA, etc.  There is also a simplified section to evaluate "how long to FI?".

See this post and the spreadsheet itself for more details.


However you format your study, don't forget to subtotal each category and total up all major categories (income, expenses, assets, liabilities), rather than expecting the readers to add up your food + cable bill + etc. etc.

WARNING: If you have a "Your hair is on Fire!" debt emergency you will get face punches if your spending categories include line items such as a "new car loan" or spending that should only be part of your life if you are debt free such as a "gym memberships" or "manicures".

A few notes on a successful  "Reader Case Study" topic:

If you are asked for additional info or more detail, please use the edit button to add the information to your original post - this will help keep all your info easy to access for new contributors.

Please make all responses and additions to your original post in the same conversation rather than creating a new topic. It helps everyone if the history of the discussion is available in one place.

Posters put a great deal of time and thought into their replies. As the original poster, please respond in some way to keep the conversation going and let us know that you are benefiting from the discussion and appreciate contributions.

Any questions? Please use this topic to ask for clarification if you are not sure about how to create a new "Reader Case Study" topic.

[astridlee]

Thanks this is helpful! I have a case study running since yesterday titled 5 o'clock shadow. I will try to jazz it up using this template.  Our hair is on fire and punching has commenced. The input has been really helpful. I am hoping to carry the energy forward to taking action. This forum has given me confidence to believe my dream of become financially independent is possible.

[swick]

Thanks this is helpful! I have a case study running since yesterday titled 5 o'clock shadow. I will try to jazz it up using this template.  Our hair is on fire and punching has commenced. The input has been really helpful. I am hoping to carry the energy forward to taking action. This forum has given me confidence to believe my dream of become financially independent is possible.

Great to hear! Thank you for your feedback, I will take a look at your case study:)

[thesaffs]

Just modified mine, thanks for the tips! I wasn't sure what to include, but this was helpful.

[CarrieD]

Hi Swick. I just wanted to leave a quick note here to say thanks for these pointers, they're very helpful. :-)

[Astromarine]

what's the policy of carefully 'bumping' your topic if you don't get anything the first day or so? frowned upon?

[arebelspy]

what's the policy of carefully 'bumping' your topic if you don't get anything the first day or so? frowned upon?

No hard and fast rule.  Don't be annoying (i.e. spam).  Wait at least a day, then do a single one.  You may also want to consider editing at that time for either brevity, or clarity, or to add more info, depending on which your post needs.

[FireDAD]

Very helpful, I added some content to my case study from this.

Thanks!

[arebelspy]

I added a line about subtotaling/totaling up the categories, as I keep seeing case studies that have 100 line items and I have no idea how much the totals are and my brain goes cross-eyed.  :)

[swick]

good call, thanks arebelspy:)

[G-dog]

What does the "ER" in expected ER expenses refer to?

Thanks

[arebelspy]

What does the "ER" in expected ER expenses refer to?

Thanks

Early retirement.

[SweetLife]

OMG ... I have been trying to post a case study but there is no New topic button? Has it been closed :(

[swick]

OMG ... I have been trying to post a case study but there is no New topic button? Has it been closed :(

Are you signed in when you are looking to post? If you logged in as a "guest" the option doesn't show up. The option should show up at the top of the "category" page

[MDM]

Edit: superseded by spreadsheet linked below.

[arebelspy]

The problem with that, MDM, is people track different things.

I mean, holy shit, look how many categories you posted there.  66?!

I have less than 10 personally.  HerpD on these forums has TWO (Rent and Everything Else).

People will post their budget, with the things they track and spend money on, however they categorize it.  There's no need for us to tell them how to categorize and organize their spending/budget.

I'll leave your post and people can use that if they want.  Seems good enough.

[kaizen]

A big thank you for this, from a total noob. I just posted my case study, and I am now wincing in anticipation of many face punches. My most recent excuse for everything 'but I'm pregnant!' doesn't work well in the Interwebz.

[MDM]

The latest version of the spreadsheet linked here: Case Study Spreadsheet updates can be downloaded and used to help organize a case study posting.  It includes income, expense, and investment categories usually applicable to case studies.

Case study posts should specify gross income, then list amounts for each pre-tax deduction.

For "not too complex" cases the spreadsheet will calculate IRS, SS, and Medicare taxes closely, and state taxes approximately, helping one evaluate the after-tax effects of 401k, HSA, etc.  It includes various credit calculations, including EIC, Child, Foreign income exclusion, and Saver's. 

Note that these are the actual taxes you should use for your cash flow analysis, and may differ from the amounts you are withholding from each paycheck.

There is also a simplified section to evaluate "how long to FI?".

There are eleven tabs (aka sheets) in this workbook      
   Instructions - What you are reading now   
   Calculations - The main tab.  "Current cash flow" and "time to FI" calculations, including many common federal tax credits and limits.   
   Posting - Formatted for use in Simple Machines forum posts   
   Investment Order - Guidelines for which accounts should get your money in what order.   
   Tax Rates - Calculation and graph for marginal and overall tax rates   
   Form6251 - Alternative Minimum Tax calculation   
   401k vs Taxable - Comparison of returns between a 401k with high fees vs. a taxable account with low fees   
   SocialSecurity - Estimates an individual's social security benefits, given historical and projected earnings   
   HDHP Analysis - Compares out-of-pocket costs vs. gross medical expenses for two insurance options   
   Misc. calcs:   
      - Solve for any of the five (FV, n, PMT, rate, PV) main financial function variables.   
      - Investing vs. mortgage payoff calculation.   
      - Quick calculation of "Time to FI"   
      - One way to evaluate "pension now"  vs. "pension later"   
      - Comparison of immediate Lump Sum pension vs. immediate annual payments (including COLA option)   
      - Solve FV(i,n,P) * i = a * P for n   
      - Growth in a taxable account, with annual tax on dividends and LTCG tax on final withdrawal   
      - Breakeven rate for deciding Roth vs. Traditional.   
      - Fixed Rate vs. Adjustable Rate (AR) Loan: Savings (or Loss) from using AR, depending on initial AR value and later increases.   
   Chart of some basic investing terms.  Target audience: someone who asks "is that a Roth or a Vanguard?".  We were all there once….   

You may attach a copy to your study or not - that is up to you.  If you don't already have a similar tool, merely using it to help organize your information should be helpful. 

Although this has been used to good advantage for a wide variety of case studies, it is not a commercial product and does not cover all possible tax and life situations.  I highly recommend using real commercial software (i.e., not this tool) when it comes to making real changes to your own finances (e.g., YNAB, Mint, Quicken, etc.), taxes (e.g., TaxAct, TurboTax, etc.) and FI planning (e.g. http://www.esplanner.com/, etc.).

If there are any blatant errors, please PM me.  Or post them for all to see: won't be the first nor last spreadsheet error I'll ever make.  Improvement requests will also be seriously considered, and several have already been implemented.  Of course, "this is not a commercial product" means some things will forever be out of scope but if the improvement would help a wide audience....

Assuming you do find it useful for documenting a case study, there are (at least) three ways to present it back to the community for comments:
  1. Perhaps the simplest is to attach a copy using the "Attachments and other options" located below the post window
  2. You could save to a Google Drive location of your own and post the link.
  3. Copy from Excel & paste into the post.  If you go this route, use any of:
      a. Column G of the "Posting" tab.  This is based on the idea given in http://forum.mrmoneymustache.com/journals/dandarc's-journal/msg367990/#msg367990.  Nice idea from dandarc - any implementation errors are mine.
      b. http://forum.mrmoneymustache.com/forum-information-faqs/how-to-formatting-a-table or
      c. http://forum.mrmoneymustache.com/forum-information-faqs/how-to-simple-step-by-step-guide-for-posting-formatted-table
so your table will be both easy to read and easy to import back into a spreadsheet. 

[retired?]

In general, they need to be shorter.  Have a catchy title to get people to read (and hopefully respond).  But, when I see a post that takes more than a screen, I just don't have time to read it.

Keep Case Study requests short.

[rdouglasellis]

Just modified my recent post to better fit these guidelines. Thanks!

[kmb501]

I have something that I wanted as a case study, but I didn't title it that, and I've since added a few other threads with more information about my situation. Could you look over my threads and make a recommendation? Do I need to try to condense all of these threads into one?

[JetsettingWelfareMom]

Where are the reader case studies going? Stupid question but what category? Journals? Ask a Mustachian?

[MDM]

Where are the reader case studies going? Stupid question but what category? Journals? Ask a Mustachian?

Ask a Mustachian is the best place.  As the description for this board on the forum home page reads, "Do you need advice? Do you like helping others? Post your financial or life dilemma here and see if MMM or one of the other readers can help!"

[arebelspy]

Where are the reader case studies going? Stupid question but what category? Journals? Ask a Mustachian?

Depends on the purpose/topic.

A case study on sell vs. rent the house you're moving out of would go in real estate.  A long term improvement over time might go in journals.  A generic "help trim my budget" may go in Ask a Mustachian.

[laughing_paddler]

Hey, to whomever made that spreadsheet linked above- wow, wow, and THANKS!

It has proven SUPER useful for me and DW to really start to plan AHEAD of time (how novel!) to keep ourselves in a lower marginal tax bracket for 2015.

Anyway- you rock.

[grantmeaname]

Is it worth putting MDM's spreadsheet in a sticky in the new tax forum?

[ronmexico]

How should a bonus be included? As an increase averaged out over the whole year?

[MDM]

How should a bonus be included? As an increase averaged out over the whole year?

Yes, adding the monthly average to your normal monthly wages is easiest.

[ronmexico]

I am almost done with my budget just wanted a little clarity.

My credit card payments are high right now as I pay them down, but it is causing my post retirement taxable savings to be negative. I know when the credit cards can be paid off and when they go off of zero balance. So I can provide that for context, but not sure how to adjust for that negative taxable savings rate.

Also some of the stuff currently isn't sustainable, like I am living in a room in a condo for $450 a month with no utilities and only paying for cable. I know I can't do this forever, I want a house and wife and kids in the future. So I want to make sure I factor that into FIRE planning.

I am also planning on going back to school for an MBA, which will increase my salary. Is the overarching idea of this spreadsheet to show a snapshot of the current state or a projected future state or a mix of the two?

I appreciate this community you guys are great and I thank everyone for putting the spreadsheet together. Can't wait to finish and hear the recommendations!

Let me know if I should post what I currently have to answer any questions. Thanks

 

[MDM]

Is the overarching idea of this spreadsheet to show a snapshot of the current state or a projected future state or a mix of the two?

A mix, weighted more toward the current state.

Just explain things that don't "fit": folks will likely understand and all should be well.  The spreadsheet is a means, not an end.

[psyclotr0n]

Great spreadsheet. Question though, I'm planning to do some serious housing downsizing after reaching FI, enough to lower RE expenses by $20-25k/yr. When I put that into Change in spending after RE, the resulting "Stash needed for retirement @4% SWR" comes out negative. Is this because only Non-loan, non-work expenses are counted after retirement? I.e. is this spreadsheet assuming your mortgage will go away? I don't see how that can be the case...

[MDM]

Great spreadsheet. Question though, I'm planning to do some serious housing downsizing after reaching FI, enough to lower RE expenses by $20-25k/yr. When I put that into Change in spending after RE, the resulting "Stash needed for retirement @4% SWR" comes out negative. Is this because only Non-loan, non-work expenses are counted after retirement? I.e. is this spreadsheet assuming your mortgage will go away? I don't see how that can be the case...

The spreadsheet follows the "invest instead of paying off your mortgage" strategy by calculating the stash needed as ("Expenses in retirement" minus "Guaranteed income in retirement") divided by "Safe Withdrawal Rate" plus "Remaining loan principal".  The most recent version is 5.12 (cell Q1 on the Instructions tab).

[psyclotr0n]

Is there a discussion on the invest instead of mortgage payoff strategy for reference? All I'm trying to do is account for selling my place and downsize upon FIRE, hopefully rendering the issue moot, which is why I was trying to use a reduced RE expenses. Is there any way to do that with this spreadsheet?

[MDM]

Is there a discussion on the invest instead of mortgage payoff strategy for reference?

Many.  Start with http://forum.mrmoneymustache.com/forum-information-faqs/frequently-asked-questions/ and scroll down to "Investing".

All I'm trying to do is account for selling my place and downsize upon FIRE, hopefully rendering the issue moot, which is why I was trying to use a reduced RE expenses. Is there any way to do that with this spreadsheet?

Probably.  E.g., if you could sell for X, your current mortgage principal is P, and buy a new place with cash for Y, you could add (X - P - Y) to your Taxable Current Savings and put the expected time to do this in cell H49.  Other "if this then that" things are doable if that example doesn't fit.  At some point, if the complexity warrants, you could use www.cfiresim.com or other time-dependent planner. You could start a thread with your case study with more details if needed.

[Kaikou]

wow props on the spreadsheet so helpful

[slappy]

I'm having trouble accessing the spreadsheet.  It says Google Drive unavailable. Is it available anywhere else?

[MDM]

I'm having trouble accessing the spreadsheet.  It says Google Drive unavailable. Is it available anywhere else?

I just tried and it worked.  Could you try again?  If it doesn't work, what hardware and browser are you using?

[slappy]

I'm at work so that may be the issue.

[Poeirenta]

I've been mucking about with the very helpful spreadsheet and a couple of things aren't clear to me...can someone help out?

1. The extra income after RE...We both have public employee pensions, but we can't access them for another 20 years (@ age 65) and we are hoping to retire in 5-10. Do the calculations factor in this time lag, or assume that the "extra income" is available immediately? Or maybe it doesn't matter?

2. My employer contributes ~$400/mo to my pension. Do i put this in the employer match section of the income entries? I never actually see this money except in my pension account, so is this throwing off our "available to invest" numbers?

Thanks in advance!

[MDM]

1. The extra income after RE...We both have public employee pensions, but we can't access them for another 20 years (@ age 65) and we are hoping to retire in 5-10. Do the calculations factor in this time lag, or assume that the "extra income" is available immediately? Or maybe it doesn't matter?

The calculation assumes the extra income is available immediately and forever upon retirement.  For time-dependent cash flows, look at www.i-orp.com, www.cfiresim.com, or others mentioned in https://www.bogleheads.org/forum/viewtopic.php?t=115839#p1686175 and links therein.

2. My employer contributes ~$400/mo to my pension. Do i put this in the employer match section of the income entries? I never actually see this money except in my pension account, so is this throwing off our "available to invest" numbers?

The employer match entry feeds into your 401k balance.  There is no standard pension calculation so all the cash flow spreadsheet does is accept whatever "extra income after RE" you enter.

Any other questions - just ask.

[FiveSigmas]

MDM...I only just today found your terrific spreadsheet. This obviously took a substantial amount of skill and effort to put together. Thanks for sharing.

A question: I noticed that the SS tax cell ("B42") seems to be "commented out" (it has a *0 at the end of the formula). Is there a reason for this?

I am looking at version 7.05.

[MDM]

MDM...I only just today found your terrific spreadsheet. This obviously took a substantial amount of skill and effort to put together. Thanks for sharing.

A question: I noticed that the SS tax cell ("B42") seems to be "commented out" (it has a *0 at the end of the formula). Is there a reason for this?

I am looking at version 7.05.

Well, shoot, that's not right.  Must have been left over from looking at someone who didn't pay SS....  Version 7.06 now online.  Thanks for the beta testing!

[FiveSigmas]

MDM...I only just today found your terrific spreadsheet. This obviously took a substantial amount of skill and effort to put together. Thanks for sharing.

A question: I noticed that the SS tax cell ("B42") seems to be "commented out" (it has a *0 at the end of the formula). Is there a reason for this?

I am looking at version 7.05.

Well, shoot, that's not right.  Must have been left over from looking at someone who didn't pay SS....  Version 7.06 now online.  Thanks for the beta testing!

Whew. Glad I'm not going crazy! Thanks again MDM.

[kmb501]

I thought I would just throw in this question since it seems slightly on the topic. If I'm not planning to stay long-term with my current employer, should I invest in the company's 401K plan or not? My employer offered me the option of opening a 401K or stocks and bonds account with them when I signed on as a full-time employee, but I didn't sign up, because I had no idea what I was doing. Could someone explain this to me?

[MDM]

I thought I would just throw in this question since it seems slightly on the topic. If I'm not planning to stay long-term with my current employer, should I invest in the company's 401K plan or not? My employer offered me the option of opening a 401K or stocks and bonds account with them when I signed on as a full-time employee, but I didn't sign up, because I had no idea what I was doing. Could someone explain this to me?

Probably better to start your own case study thread or a thread in "Investor Alley" for this question.  Not trying to duck your question - just trying to keep this thread short.

[ptgearguy]

I just want to add one more face punch on the Jeep. I know you say you want to keep it for 20+ years but I will say that is also quite a horrible option because you have to fuel that bastard for all those years. My educated guess is that beast will take about twice as much gas as a fuel efficient car. It costs me about 1500 in gas a year for a 15km commute to work (I drive a 4cyl honda accord (not that fuel efficient). My guess is your cost in gas will be closer to 2500-3000. So lets say 1000 dollar difference. That is at least 20000 dollars lost just in gas base cost. If you invested that money each year you will have 35 grand at only 5% growth. That alone would pay for the car in full.

The warranty is absolute crap with a 500 deductible. Yes it is possible for some catastrophic failure of a computer or something but most computer fails are usually only a few hundred dollar fix for a sensor and such. Second, they will fight you tooth and nail if something nasty happens and blame you for maintenance or some other crap. Most warranties do not allow you to do your own oil changes and will not be covered. Warranties make the company money using your own irrational fear of failure. They win and you will lose.

Sorry for the solid face punch but that Jeep needs to kiss the curb.

[MDM]

I just want to add one more face punch on the Jeep.

Jeep? 

Wrong thread?

[seattlecyclone]

I've been playing around with the case study spreadsheet and have noticed that the income amount used for the saver's credit in the spreadsheet is the "Total Income" (cell G10). Shouldn't it be AGI (cell G17)? The official IRS form seems to use AGI directly.

[MDM]

I've been playing around with the case study spreadsheet and have noticed that the income amount used for the saver's credit in the spreadsheet is the "Total Income" (cell G10). Shouldn't it be AGI (cell G17)? The official IRS form seems to use AGI directly.

Good question.  I remember having a reason at some point, but can't recall what it was.  Whatever it was doesn't seem to apply anymore.  Changed to use "AGI + any foreign income exclusion amount."  Thanks - update online.

[jamesbond007]

Cannot access the spreadsheet. Can you re-post it? The link just takes me to my Google Drive.