In awe

Tag: money

  • Day452 Retirement/Investment

    I went down this rabbit hole before. How much do I need to save now to retire some day? Which requires me to ask how much do I need in the future. This is probably my second blog post on this topic (retirement and minimal spending). What I suggested before was am extreme look but it is neither wise nor practical.

    Whatever, you read here, take it with a grain of salt because I’m not a financial advisor. They are just some thoughts I have.

    I spent some time (like over two weeks) calculating. My conclusions from the excercise are as follow:

    1. it takes a lot to save now for a small future amount. Like for me, saving a 20% income now will get me a 70% income at retirement. Plus ton of assumptions that might not be true 20-25 years from now. In a sense that is a good deal right, you have 3.5x the output? But it doesn’t feel that way. It feels you put in a lot now and get very little back. No one wants a 30% pay reduction. And saving 20% feels like a big cost.

    2. it is obvious the more being saved the better

    3. what is not obvious is we assume income just comes in, with very little work. It requires some financial knowledge like which stocks or mutual funds to invest in. That’s work.

    4. kind of follow from 3, retirement is not the end of work but is a new beginning or transition to a new form of work, generally this is investment. You got to learn how investment works to get the most from it

    5. I think a false conception I had before was saving for retirement is like putting money in a piggy bank and at the time of retirement, you spend from it. Money will run dry one day with this kind of thinking. There is no big enough piggy bank even of one saves 100% of present salary. The reason is we likely live longer than our working life could save. Also there is something calls inflation. Though most understand that they expect their money to make more money (e.g. to invest). One has to have to knowledge and actively manage it, otherwise, money will disappear.

    My point is it is okay not having a big enough balance, if one knows how to generate income from somewhere

    6. financial experts think we don’t save enough, which is true if only looking at just the saving side. The reason is people have various other source of assets other than a retirement saving account. Mainly it is their house. 49% millenials own a house or condo. They can down size when they retire. Also real estate is an investment because the price of property appreciates (and at recent times, greatly).

    7. Not sure how many do this, I think a lot do. When people retire they move to a state that has a lower cost of living. People move to Florida not just because of the warmer climate but because the state has no income tax. Wait, retire people has no earned income! or so we think. A lot of retirement incomes are still taxable!

    8. The more extreme type, like me, would consider moving to a different country. In my travel, I saw other countries generally have a lower cost of living. I have only been in Chile and Peru, (and Australia and Canada as well, but those places are not “cheap” to retire to). I felt I could live in the cheap places. There are popular destinations, like Taiwan, Thailand, and other asian countries or eastern european countries.

    9. Use the time now to prepare for retirement, means more than purely setting aside the money. It means learning a new skill and language to adapt to the life after retirement. Why skills? Mainly for me, financial/investment skills are what I need to be good at, for others it might be starting a second career like a business or be an artist or musician or a writer (or a blogger or streamer). I read writers don’t retire because they love what they do.

    10. I delved into life expectancy too and its calculation. I don’t think it matters but many retirement planning guides think it is important. My advice is whatever the life expectancy is, add a few more years.

    —-

    Long form for those who care to read.

    The deal with retirement is you never know exactly how much to save today. Generally, the more the better. The flip side of the question is how little is too little? I ran the numbers, to save 3% or less per year of my present salary is too little for me, though some (maybe many) of my coworkers are saving just that because that is the maximum our company used to match to our contribution (but they have stopped matching the last two years). 9% is the national average for my age of those who do have a retirement plan. I watched a video from the MoneyGuy, and they showed saving about 20-25% of ones income is preferred (with their math, not saying they are wrong, but whether it is realistic for everyone). The FIRE people (financial independence retiring early / young) aim to save 50% or more to retire as soon as possible. There are people who could do it. There is a range because everyone accept or see the risk differently.

    For a while, I was aiming for that the FIRE goal, though I never got up to the 50%. What is FIRE? There is a movement to save a whole lot so one can retire young. It stands for Financial Independence Retiring Early. This year got me into investing apart from my workplace retirement plan (and I opened a Roth IRA and a Robinhood account). I came away that investing and retirement is really the same.

    My personal advice (imho) is fund it up to the tax benefit limits the government sets (for 401K and IRA) and you are likely good. The reason is that will give the greatest tax benefits. However, not many normal people will or could do it. I myself have not “maxing” it either.

    Most retirement planning videos don’t look at the cost of saving. Imagine if you are making $50,000, it means saving $25,500 away (based on my age and tax limits), and that is more than 50% going toward retirement. Even if one is making $100,000, it is still a lot to save 25% for retirement.

    The biggest challenge for people and myself too is people don’t have that humongous amount of “left over” money for retirement. Obviously it is a tradeoff – how much money is needed today vs how much is needed in the future. So the question is how to balance that?

    For that I do not have answer what is the right amount. I think as a society, in the macro economic sense, people are making the most logical choice, and are at a perfect equilibrium of how much we should be saving.

    I used to base my saving off the social security taxes as a ballpark estimate of how much to save. My rationale, though flaw, is the government set 12.4% as a society of how much set aside for caring for the elderly, so I should copy and set aside that amount and I will be “minimally” set. The problem is social security was never a retirement plan, though we all think it is. By copying its number, I am building on that false assumption and it might not work. There is no underlining reason why 12.4% is the ideal amount. I was really into finding that “minimal” number to save.

    A way to balance the tradeoff is a need to understand the risks and benefits. How much I put away now will give me such and such benefit (and what implicit costs). As for me, like I only am getting 70% of my income in the future, that seems like a “lost” or disinsentive to save and it takes a lot now to get there. The risk is, at least one of them, will I live to enjoy it. I haven’t seen many videos or blogs talking about the risks or tradeoffs of oversaving/undersaving and how to measure that risk.

    A take away for me is we think of retirement as to work now, play later, especially for those who follow the FIRE movement! In a sense, it is a motivation to save. But if over doing it, you end up giving up or limitting what you can do while you are young. Some think I don’t spend it now, I will spend it later but there are certain things we can only do them now (say I put off that ice cream now and eat two in the future, but what if there is no ice cream). For me, it is running.

    Also, some (of my peers) can expect having an inheritance that help them in their retirement, which most likely will be houses/land, everyone biggest asset. It is a taboo to talk about our parents like we expect them to die so we can have their assets. It is not a definite retirement strategy but that is something that could help. Sure it has risk that the inheritance is split among sibblings and their parents might live for a long time well into your own retirement.

    In conclusion, there is no magic number to how much to save. We looked at it from a tax perspective. I threw out some numbers. There are guides available online. In the end, it is really a gut feeling. Many I know, don’t save (or have very little saving for retirement, at 3% or less per year) and this reflects our society, and I think they should be fine as our parents were (at least for now). As for my running friends – I think they are a poor lot, races drain their finances, yet they might be living the best of life and making the best choice. So don’t judge.

  • Day323 shirt or no shirt

    I am thinking of the next run. Should I wear shirt or not. I probably will but going to be in short sleeves.

    Nothing to write about. All so peaceful at home.

    Today is payday! I finally after 3 years maybe, have enough money to pay off my loan 🙂 Reach a Break even point. I used to have more money saved up (3-6 months of income). Then I started travelimg, running, and brought a car (3 cars actually), and also put more money in my retirement account, so about 5 years ago I started to get into debt and have been trying to dig myself out since then. Today there is a light at the end of the tunnel!

  • Day320 travel

    I am really out of topic to write…so going to go out on a limp to talk about money aspect of my last trip.

    It is a sensitive topic…even if it is not a time as now when many people don’t have a job. I really don’t know the number, but I have heard something worse than the Great Depression. Is it like 20% of the population are out of job?

    During my trip to Atlanta, I tried to not spend too much. Flying though, can’t be cheap…I used to fly American or United, but their services disappointed me – they are no frills, but it is their way – their corporate culture treating their lower paying customers, just rub me the wrong way. I got it no frill. I have been on cheaper airlines but they do well, but somehow I can’t stand American/United services.

    Then I discovered Jet Blue and that was Amazing (remember in January about my layover trip to Boston for a Wendys shake?). Same too for Delta. Their services are A+. Of course I later learned you pay a bit more for Delta, but I don’t mind (though I read with Corona, people are paying double to fly on Delta). Off topic, only recently I found out both Jet Blue and Delta were being partially owned by Warren Buffett; ya no wonder the two companies are so good; but now he sold his share, hopefully quality won’t decrease.

    There was no direct Jet Blue flight to Atlanta. This time I booked Delta. It was expensive, but I found out they are one of the few airlines that do social distancing seating. Everyone wearing masks is a given, but they leave the middle seat empty, that was a surprise. They lost ton of money by doing this. I have no regret. They also say their jets do not recycle air, but pump fresh air from outside.

    Today, I finally tallied my spending expense for the trip. Flight was about $400. Uber $200. Food $300. Hotel $250. I paid $60 for checked bags. Originally, I was going to do under the seat/carry-on, but I had to bring a lot of stuffs, I was too tired the night before the trip to be creative in my packing, and decided to get my bag checked.

    Things that surprised me was I spent a lot on Uber. When I went to San Diego, I rented a car, and I thought that was expensive, but looking back, on that trip I spent less on transportation than having Uber. Rental was something like $30 a day. For me Uber was $90 on one of the trips, and bled my heart. So my trip to San Diago was cheaper; $200 cheaper!

    A thing I learned from the trip was how to pay for things using my phone – contactless payment! I made many stops to gas stations and convenience stores during my 100 mile run. It was not easy to pull my credit card all the times from my running pack, so I started to use my cellphone for payment. I found out how easy it is. I had Google Pay set up long long time ago when I first got a Google phone, but I never use Google Pay in stores because at the time it was not popular (none of the store support it but I think one or two stores). But now it was ubiquitous but I didn’t know. I just went up to the register, unlock my phone, press and hold the power button (not sure if this step is needed), but by doing that my credit card shows up on the screen. Then I just hold the phone over the credit card payment unit, and it beeps (and does it stuff) and my phone shows the payment confirmation. That’s it. Easy. No more pulling out wallet and putting things back.

    I was learning as I go. Another wonderful thing I learned was using the airline app for boarding pass. I have been seeing other people doing it for a while now, but I was always reluctant to try new things. I like to have a piece of paper in my hand and walk up to the gate agent with my boarding pass – that is my ticket. But this time, I read holding paper is not safe, since so many people would touch it. So I switched to relying on the phone app. It was easy. I used the app to check in. It had my boarding pass. I used it to check my luggage, going through security, and finally boarding the plane. It was entirely contactless. On the way, I can check the gate number, check the status of my luggage, and check my seat assignment. They changed my seat because I was being seated next to someone, so they offered to move me to a seat with the middle being left empty. I was delighted. Instantly the seat assignment in the app was updated. So no need to print out a boarding pass any more.

  • Day295 fillers

    There will be probably a bunch of fillers from here on out to Day 300 because I just need to fill up the gap and there is not much going on.

    I guess those in the US all focusing on the civil unrest taking place. I have not much to comment on it other than I need to watch out for my own safety. I have been feeling safe in my neighborhood, as you readers know, I take long runs that sometimes last whole day 8-12 hours or longer. My usual daily run now typically last 3 hours, doing somewhere between 12-20 miles. I run from both sunrise to sunset and to late hours into the night.

    I have been feeling pretty safe. But now I have to watchout for myself. People don’t care if I am a runner. I might get caught in bad situation. Also law enforcement might not care if I am just a passerby, I might get identify as one of the rioters. I have seen even a CNN reporter was arrested on TV for doing nothing, but reporting the situation.

    I haven’t been out to DC at all. I have heard protest been going on for 5 days and police trying to clear the people out.

    Our president was trying to gather the troop as a show of force, but seems to fail spectacularly. Virginia has refused to send their national guards for the task. This is unheard of. I have never seen chain-of-command being failed to honor. The commander is chief is calling his troop and his soldiers refuse to obey. This is unheard of. I see a lot of politic going on. Virginia governor doesn’t see the protest in the capital a threat to the nation survival.

    But any way, I said my piece. I think we as a nation is comical to the world.

    Tonight run was one of my best run. I put in 18 miles. I was light. The first mile/first step always was hard for me. Before I went out I felt very sleepy and I laid on the sofa and slept until past 7 pm. Normally I go at 6. Maybe the nap help. I was an energizer bunny and was out on the road until 11 something. That is 4 hours!

    I feel very awake now. I could probably run another 3-4 more hours out there.

    During the run, my mind was mostly on the protest. I read many different things. Racial tension is not something new in this country. It relatively new for me. I remember growing up hearing about the Rodney King’s incident. Subsequently other similar stuff took place, and many more occurents in recent times. Charlottesville incident was something closer to home for me. All this was crazy to process.

    I thought back to my trip in Chile. There the protests were much more frequent (daily) and much worse. They had the popular support. Everyone would bring out their pot and pan and started banging.

    I don’t see we here will get to that level soon. This time there are a lot of popular support but it is not at anarchy state like Chile.

    I see America is changing. The constant theme of the rich get richer and the poor get poorer. This is so much more true today than when I grew up. I have seen reports supporting this. Real wages stagnant while expenses and cost of living go up. We have people now working two jobs and still could barely make end meet. At one point it reach a breaking point and society will unravel like in Chile.

    Today, I was talking with my manager at work. He was telling me how in China they don’t have credit card. People can only spend what they have. They now switch to digital currency similar to bitcoin. He said we can’t have something like that here because it would kill all credit cards. Our economy would collapse without credit in the system. But then it is matter of time – like inevitably we would switch to a digital currency. He said that is a scary thought.

    I don’t know what to think about that but he is right on one thing that we as a society rely heavily on the availability of credit.

    That’s it for now. I will think of something to write tomorrow.

  • Some math

    Day 202

    I struggled with this of not having a purpose at the end of every running season. The things I do: I work. I run. and I relax.

    Work is pretty much an auto-drive. I don’t write much about it. I go in, work, and I get paid. It generates revenue for me to do things. It is to me a necessary evil! I won’t describe it as real evil but I wish I don’t have to put 9 to 6 every day or any day, even if work is really good. It is a third of my life! But I do need the money. This is our world we in, and for most people is like this. There are only a handful of people in the world who don’t have to work – unless we are unemployed, retired, or can’t work. We work, so that we get paid. And we do stuff (spend) with it. People talk about investing, but that’s for another post.

    I think about it a lot! I kind of need the money. In truth though if to just survive with food only, I have made enough supposingly to last for a lifetime.

    How do you calculate? What is minimal calories need to sustain life? How much does that cost? Let guess $10-20 a day (first world problem I know; third world figure is $1-2 a day when I was back in school – the amount is probably still the same unfortunately). So you need about $3650 a year. I am at mid-life, and maybe will live for another 50 years, so times 50. I’d need about $187,500 to $365,000. Given it is still a big sum of money, and not many have it, but it is not unimaginably large. There are those who follow the FIRE movement (Financial Independent and Retire Early). I am not a high earner compare to my peers who are making twice or three times my salary — also a tricky comparison because there are those who made much less. For me though if I really want to, I can retire within 10 years, before my official retirement age. It is not out of reach. So it is kind of a false belief that we are tied to our work. I might have writen about this before.

    Many immediately can point out, what about shelter and clothing and other stuffs we want and need. True. Hence, the reason I am and everyone else are still working. I love to drive my big loud truck and go places. A bit excessive I know. However, they are choices we make. Even my own food expense is costing me more than my estimate. Sorry to those who lives on a year with less than $600, or even $6,000 income and here I am debating if $600 is enough for food for a month. I recently watched a video on world wealth distribution and know how much wealth I have and my country have compare to the rest of the people. I am not rich, but the video has a point, I am very favorable. I know as I was growing up, not too long ago, our family food budget was between $100-200. Inflation does not account such fast growth in cost now. I spent more is the bottom line (and I don’t cook for myself). Actually I don’t know how much I need to spend for food. I really need to budget and to cook. I could do better. My shelter costs me more than food. I should aim to buy a piece of land in the wilderness and live off it! That would be a dream.

    I am investing, with the hope that a day will come when I can’t work any more and when my income from investments, would be greater than my present earning salary. Yes, it is a hope, like many people. Who know if it is still true 20-30 years from now.

    What else do I do? I run. I spent time running, reading about running, watching movies or videos on running, planning for next run or race, and looking up for the next race and so forth.

    Then I veg’d. It may be a form of relaxation. I sometimes stop doing anything – like now. I don’t know why. I just finished a big race a week ago. I haven’t had much desire to run or do anything. So I have been laying low (literally too).

    I can’t imagine a few years ago, before I took up running, I really had nothing to do. I wasted my life fulltime back then! Now I only waste it a day here or there. Well to some, running is also a waste of time. We each find what we like to do outside of work, where to others might be a waste of time. Not me, unfortunately. I do like what I do for a living, but just it is not the same as running. I definitely like running more.

    I should think more on it too. Some might say I live only for myself. Is it not selfish? It probably is. I help other people incidentally but never purposefully like I am going devote my life for others. One of my friends is like that. She advocates on issues for the oppressed and of injustice in her free time. Most of us in the first world are blind or we put blinder on to ignore this (even me). Actually, that what God requires of his people, is to love mercy and render justice (Micah 6:8a).

    Maybe a little time-out for me at this point in time, helps me to refocus my priority of what I should be doing in life: To not live in excess, and pursue a nobler life.

  • Trip

    I rewrote this post a couple times because it doesn’t come out right due to some ethical dilemma. Since the weekend, I have been thinking about a bucket (more…)

  • God at war

    Couple days ago I put down in writing of the things I want to do in order to have what I think is a satisfying life. When I was younger, it wasn’t as

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  • Chance/cost

    What is the chance I will remain healthy for the next ten years that I can do 5 marathons every year?

    I was thinking how to able to do a marathon in

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