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2018-06-18T17:12:55.282Z
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“Hey,” Kim said one day last week as she was leaving for work. “There’s a package coming today from one of the doctors I work with. To thank all of his hygienists, he’s sending us a trial of HelloFresh.”

“What’s HelloFresh?” I asked.

“It’s a meal delivery service,” Kim said. “Anyhow, it’d be great if you could bring in the package and put the food in the fridge. And it’d be even greater if you made one of the meals for dinner!”

I kissed her good-bye, then promptly forgot what she had told me. (This is par for the course.)

How Does HelloFresh Work?

That afternoon when I returned from walking the dog, a package from HelloFresh was waiting on the porch. I took it inside to open it. The box contained three brown paper sacks, each with a different meal from HelloFresh.

“Oh yeah,” I thought. “I’m supposed to make dinner from one of these. I wonder what they are.”

I opened the bag labeled Pineapple Poblano Beef Tacos. Inside was an illustrated recipe card and a set of pre-measured ingredients. “Seems simple enough,” I said to the dog. Tahleuqah just looked at me as if I were supposed to feed her. That dog is always ready for food.

When Kim got home from work, I made the tacos. They were amazing. I’m not joking. They were delicious. (The dog agrees.) “You know, I should have taken photos along the way,” I told Kim....

Last week, I wrote about the problem with retirement spending: How much should you spend during retirement? If you spend too much, you run the risk of depleting your savings. But if you spend too little, you’re sacrificing the opportunity to make the most of your money, to “drink life to the lees”.

One of the guiding principles in retirement planning is that there’s a “safe withdrawal rate”, a pace at which you can access your investments so that your nest egg will last for thirty years (or longer).

For simplicity’s sake, a lot of folks talk about the “four-percent rule”: Generally speaking, it’s safe to withdraw 4% from your investment portfolio every year without risk of running out of money. (This “rule” manifests itself here at Get Rich Slowly when I say that you’ve reached Financial Independence once you’ve saved 25x your annual spending — 33x your annual spending if you want to be cautious.)

Today, I want to take a closer look at the four-percent rule for safe withdrawals — then explore why the theory behind it doesn’t always mesh well with the reality of our daily lives.

The Four-Percent Rule Defined

Last August, William Bengen (who first proposed the 4% rule in a 1994 article), participated in an “ask me anything” discussion at the financial independence subreddit.

Here’s the top question and answer from that thread (with additional formatting for...

Warning: This is a rare GRS post that contains salty language. If you don’t like salty language, don’t read this article.

Anthony Bourdain killed himself Friday morning.

“So what?” you might be thinking. “He’s just another fucking celebrity who didn’t know how good he had it.” Maybe you’re right. But his death has weighed heavy on me all weekend.

On Friday morning, as I wrote the weekly Get Rich Slowly email, I thought about Anthony Bourdain. On Friday afternoon, as Kim and I worked in the yard, I thought about Anthony Bourdain. On Friday evening, as we soaked in our new hot tub with a friend, I thought about Anthony Bourdain. Yesterday, I thought about Anthony Bourdain. Today, I thought about Anthony Bourdain.

Now I’m writing this article as an act of catharsis. Maybe it’ll help me to stop thinking about Anthony Bourdain.

The Depression Trap

I believe Anthony Bourdain’s death touched me deeply for a couple of reasons.

  • I was a huge fan. Since listening him read the audio version of Kitchen Confidential a decade ago, I’ve loved his work. Parts Unknown was probably my favorite travel show: raw and real — and filled with food. Bourdain connected with everyone he met. His joy for life was contagious and his mind was sharp.
  • Like Bourdain did, I struggle with depression. All my life, I’ve experienced periodic descents into darkness. The first time this happened, I missed five weeks of sixth grade. In the nearly forty years since then, I’ve developed a variety...

I spend a lot of time talking with people who have retired early or are otherwise financially independent. From a purely anecdotal point of view, I’d say most of these folks are well-adjusted. They work to maintain balance in life, and especially with their personal finances.

That said, I’ve noticed that a lot of retirees — early retired or otherwise — struggle to know how much they should spend. I believe this dilemma exists for a couple of reasons:

  • First is the life expectancy problem. You don’t know how long you’re going to live. If you did know the precise date of your death (or even the year of your death), retirement planning would be much easier. You’d be able to say, “Okay, I have ten years left and $300,000 in the bank. Based on that, I should be able to spend $30,000 per year.” But you don’t know when you’re going to die, so a lot of retirement planning becomes guesswork.
  • Second is the question of what your money is for? Do you want to leave a legacy for your children (or somebody else)? Do you want to maintain a chunk of change for possible end-of-life medical issues? Or do you want to use your wealth to live life to the fullest while you can? In my case, my ideal would be to die broke. If I could spend my very last penny on...

This guest post from Christine Hughey is part of the “money stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all stages of financial maturity.

I met Christine in January when I attended Camp FI in Florida. Christine is starting a new Nashville food tour company, so when I spent a week there in April, naturally I let her show me around. It was awesome! In this article, she shares how small acts of kindness have proven to be worth more than she ever imagined.

I’m about to share something that completely changed my life — yet it’s something that I didn’t know much about until a few years ago. It’s a concept called social capital, and I believe that it can change your life too (and make you wealthier in the process).

Now, if you’ve been reading Get Rich Slowly for a long time, you might have seen J.D. write about social capital in the past. He too is a big believer in its power. But many of you have probably never heard of the idea. What is social capital?

According to Wikipedia:

Social capital is a form of economic and cultural capital in which social networks are central; transactions are marked by reciprocity, trust,...

This guest post from Marla Taner is an example of the things money nerds do when they get together. I first met Marla five years ago. Since then, she’s become a good friend. Plus, she’s my “travel hacking” mentor. (Travel hacking, for the uninitiated, is the practice of using credit card points and various loyalty programs to get free or discounted flights and hotel stays.) Marla was in town earlier this week, so she took the opportunity to teach me about the Priority Pass.

I met J.D. in 2013 at the first-ever money chautauqua in Ecuador. We see each other just once or twice a year. When we do, we have a lot of fun.

Part of the fun for me is teasing J.D. about his seeming inability to master the basics of travel hacking. Let me give you an example. J.D. first learned about travel hacking in 2011 when some of his friends urged him to sign up for a Chase credit card in order to get 100,000 British Airways miles. (He even wrote about the experience for Get Rich Slowly!)

That was seven years ago and he still hasn’t used the 100,000 Avios he earned as his sign-up bonus. (British Airways calls their airmiles Avios.)

What started out as good-nature teasing has turned in this: public shaming. (Sorry, my friend.)

Note from J.D.: The funny thing to me is that one of the GRS...

“How much house can I afford?” Answering this question correctly is one of the keys to building a happy, wealthy life. Unfortunately, there’s a vast housing industry in the U.S. that’s geared toward providing the wrong answer.

You see, housing is by far the largest expense in most people’s budgets. According to the U.S. government’s 2016 Consumer Expenditure Survey, the average American family spends $1573.83 on housing and related expenses every month. That’s more than they spend on food, clothing, healthcare, and entertainment put together!

Too many folks struggling to make ends meet focus their attention on fine-tuning their budget. They try to save big bucks by clipping coupons, growing their own food, and/or making their own clothes. While there’s nothing wrong with frugal habits — I applaud everyday thriftiness! — all of these actions combined won’t (and can’t) have the same impact on your budget as keeping your housing payments affordable.

Part of the problem is what I call the Real-Estate Industrial Complex, each piece of which has a vested interest in convincing consumers that bigger, more expensive homes are better. Real-estate agents, mortgage brokers, home-shopping shows, and glossy magazines all encourage folks to buy at the top end of their budget. But buying at the top end of your housing budget is dangerous.

Buying a home is a huge decision, financially and otherwise. If you’re going to purchase a place, it’s important to know how much house you can truly afford.

Yesterday was an exciting day at the Rothwards household! After three weeks of demolition and construction, we installed our new hot tub.

It took six men an hour of maneuvering before we managed to set the spa into place…but we did it. And we didn’t break anything. Now it’s a matter of completing the decking and roofing, then Kim and I will be able to enjoy our remodeled outdoor oasis!

We’re eager for construction to be over. Since buying our “English cottage” last summer, we’ve poured tons of money and time into a variety of renovations. It’s been a non-stop construction zone.

You see, during the seventeen years the previous owners lived here, they performed very little maintenance and upkeep on the home and property. When we had the place inspected before purchase, the inspector raised a lot of concerns:

The inspection report was so dire that Kim and I almost passed on the purchase.

After we did decide to buy the place, I vowed that I’d be a proactive homeowner. Instead of allowing things to fall into a state of disrepair, I wanted to fix everything that was broken and then stay on top of home improvement in the years to come.

Today I want to share four specific actions I’ve taken to try to be a proactive homeowner.

Develop a Schedule for Regular Maintenance

A great place...

This is a guest post from Steve Adcock, who writes at Think Save Retire, a blog about early retirement and Financial Independence. Steve and his wife retired in their mid-thirties to travel full time in an Airstream trailer. For more info, check out their YouTube channel.

One of the most deeply-embedded pieces of the “American Dream” is the desire for a large, spacious home with lots of sitting rooms, corners, nooks, and crannies. Large dining rooms and other entertainment spaces! Wrap-around porches! Two- or three-stall garages and one heck of a master suite!

To many of us, a large home is a mark of success. A big house indicate status, and the more space we’re able to call our own, the more successful we look and feel.

But, what if I told you that most of us don’t use even a fraction of that space? That’s not just me talking. A research team affiliated with the University of California studied American families and where they hung out the most inside their homes, how (and where) clutter builds, and the general stress level associated with living big.

The findings were overwhelming: The majority of the space in our homes is wasted.

How We Use Our Homes

As J.D. shared on Saturday, researchers at UCLA conducted a detailed study of 32 dual-income families living in the Los Angeles area, one of the first studies to document so vividly how we interact with the things for which we’ve paid good money....

Long-time readers are familiar with my decade-long war on Stuff. I was raised in a cluttered home. From a young age, I was a collector. (Some might even say a hoarder!) After Kris and I got married, I began to acquire adult-level quantities of Stuff. When we moved to a larger house, I found ways to acquire even more Stuff. I owned thousands of books, thousands of comic books, hundreds of compact discs, and scads of other crap.

Eventually, I’d had enough. A decade ago, I began the s-l-o-w process of de-cluttering.

While I still bring new Stuff into the house — Kim would tell you I bring too much Stuff home — I’m not nearly so acquisitive as I used to be. In fact, for the past decade I’ve purged far more than I’ve acquired. And that process continues, week by week, month by month, year by year.

The Cluttered Lives of the American Middle Class

Turns out, I’m not the only one fighting this battle. Many Americans struggle with clutter. This is one reason for the popularity of the simplicity movement. When I visit my friends who live in tiny houses, they rejoice at the lack of Stuff in their lives. And it’s why books like Marie Kondo’s The Life-Changing Magic of Tidying Up become popular bestsellers. (That book is great, by the way. Here’s my review from my personal site.)

A while ago, I stumbled on a video that documents the work of a group of anthropologists...

Today’s article is from Chad Carson, who writes about real estate investing (and other money matters) at Coach Carson. I’ve always been intrigued by real estate investing but overwhelmed by how much info available. I asked Chad if he’d be willing to write an article that would help me (and other GRS readers) understand the basics of real estate investing. This is the result.

I got started in real estate investing right after college. Because a young adult can basically sleep in a car if he has to (my 1998 Toyota Camry with cloth seats was comfortable), I had little to lose by launching a business. Unfortunately, as a Biology major, I also knew very little about business or real estate. But I did know how to hustle and to learn. That helped.

Slowly, I learned to find good deals and to resell them for a small markup of profit (a.k.a. wholesaling). I also learned to buy, fix, and flip houses for a bigger profit (a.k.a. retailing). After a few years, my business partner and I began keeping some rental properties because we knew that was the path to generating regular, passive income.

While my early business might sound like an exciting HGTV house-flipping show, it’s not for everyone. I experienced radical ups and downs of cash flow, and there were many unpredictable outcomes. I learned a lot being a full-time investor, but there are actually easier ways to get started.

Most investors I know started with a full-time job....

Charles Schwab has released its 2018 Modern Wealth Index, a survey of the saving and investing habits of 1000 Americans. Here’s how the company describes its methodology:

The Modern Wealth Index…is based on Schwab’s Investing Principles and composed of over 50 financial behaviors and attitudes. Each behavior or attitude is assigned a varying amount of points depending on its importance, out of a total of 100 possible points…Quotas were set so that the sample is as demographically representative as possible.

This survey divides respondents into two categories: those with a written financial plan and those without a written financial plan. About 25% of people are “Planners”; the rest are “Non-Planners”.

Unsurprisingly, the survey found that Planners are more likely to be in control of their finances. For instance, 75% of Planners pay their bill and still manage to save each month. Only 33% of Non-Planners are able to do this. Almost two-thirds of Planners have an emergency fund; less than one-quarter of Non-Planners have set money aside for a rainy day.

And the higher a person’s score in Schwab’s Modern Wealth Index, the more likely they are to have a written plan!

If having a written financial plan is so strongly correlated with desirable monetary outcomes, then why don’t more people do it? For most folks, it’s because they don’t think they have enough money to warrant one.

Personally, I’ve never had a written financial plan, although I...

The older I get, the more I’m convinced that time is money (and money is time). We’re commonly taught that money is a “store of value”. But what does “store of value” actually mean? It’s a repository of past effort that can be applied to future purchases. Really, money is a store of time. (Well, a store of productive time, anyhow.)

Now, having made this argument, I’ll admit that time and money aren’t exactly the same thing. Money is a store of time, sure, but the two concepts have some differences too.

For instance, time is linear. After one minute or one day has passed, it’s irretrievable. You cannot reclaim it. If you waste an hour, it’s gone forever. If you waste (or lose) a dollar, however, it’s always possible to earn another dollar. Time marches forward but money has no “direction”.

More importantly, time is finite. Money is not. Theoretically, your income and wealth have no upper bound. On the other hand, each of us has about seventy (maybe eighty) years on this earth. If you’re lucky, you’ll live for 1000 months. Only a very few of us will live 5000 weeks. Most of us will live between 25,000 and 30,000 days.

I’ve always loved this representation of a “life in weeks” of a typical American from the blog Wait But Why:

If you allow yourself to conduct a thought experiment in which time and money are...

After twelve years of reading and writing about money, I’ve come to love financial rules of thumb.

Financial rules of thumb provide helpful shortcuts for making quick calculations and decisions. You don’t always have time (or want to take the time) to create elaborate spreadsheets when choosing a course of action. In these cases, it’s nice to have some rough guidelines you can rely on.

You’ve probably heard of the “rule of 72”, for example. This shortcut says that if you divide 72 by a particular rate of return, you’ll get the number of years it’ll take to double your money. If your savings account yields 4%, say, it will take about 18 years for your nest egg to increase by 100%. But if you were able to earn 12% on your investment, that money would double in six years.

Like all rules of thumb, the rule of 72 isn’t precise. It doesn’t give an exact answer but a ballpark figure. Financial rules of thumb don’t always hold true. But they’re true enough for us to make loose plans based on them.

I have some engineer friends who’d get tense at this sort of sloppy guesswork, but most of the rest of us are happy to trade a bit of precision for speed. That’s what rules of thumb are all about!

The trick, of course, is knowing which rules of thumb to use. Most are handy, but some common guidelines...

When Kim and I moved last summer from our riverfront condo to this country cottage on the outskirts of Portland, one of my primary aims was to slash our spending on both housing and food.

Although we owned our condo free and clear, living there still cost us roughly $1200 per month. Plus, there were the added costs that came from living so close to bars and restaurants. Sure, we didn’t have to eat out as often as we did — we understand that was a choice — but we enjoyed exploring what the neighborhood had to offer.

Well, I’ve now had time to gather enough data to determine whether we were able to achieve this goal, to cut our monthly costs. I’m pleased to say the answer is “yes”! But for a few years, this gain is going to be completely negated by our massive home remodeling project.

Let’s look at some numbers.

Saving on Housing

To start, here’s how my monthly housing costs have changed:

  • During the first four months of 2017, we paid an average of $1169.91 to live in our condo. Of that, $644.65 went to our HOA and utilities. The remaining $525.27 was spent on taxes and condo insurance.
  • During the first four months of 2018, we paid an average of $472.55 to live on our house. Of that, $187.91 went to utilities and $284.64 went to taxes and insurance.

Before we made the move, I estimated that it’d cost us about $500 per month for housing expenses. That was a good...

I’ve been a homeowner for 24 of the last 25 years. Based on this, you might think I’m an advocate of homeownership over renting. That’s not the case. The older I get, the more I appreciate there’s no correct answer in the perennial “is it better to rent or buy?” debate. Sometimes buying a home makes the most sense. Sometimes renting is the smarter choice.

In an editorial in the June 2007 issue of Kiplinger’s Personal Finance, Knight Kiplinger wrote, “It often costs less to rent. The annual cost of owning a property, be it a house or a condo, is usually greater than the cost of renting, after taxes.” I agree.

Today, let’s look at a handful of ways to evaluate the rent versus buy decision from a financial perspective.

The Price-to-Rent Ratio

One way to tell whether it’s better to rent or buy is by calculating the price-to-rent ratio (or P/R ratio). This number gives you a rough idea whether homes in your area are fairly priced. Figuring a P/R ratio is simple. All you need to do is:

  1. Find two similar houses (or condos or apartments), one for sale and one for rent.
  2. Divide the sale price of the one place by the annual rent for the other. The resulting number is the P/R ratio.

For example, say you find a $200,000 house for sale in a nice neighborhood. You find a similar house on the next block for rent for $1,000 per month (which works out to $12,000 per year). Dividing...

My mother turned seventy a couple of weeks ago. This means a couple of things:

  • First, she’s reached the age at which she can receive maximum retirement benefits from Social Security.
  • Second, it’s time for her to start taking Required Minimum Distributions from her retirement accounts.

If you’ve been reading Get Rich Slowly for a while, you know that these two routine tasks are less than routine for my family. My mother has fought a long-time battle with mental illness. After a crisis in 2011, my brothers and I realized that she could not live alone. We found a highly-regarded local assisted living facility that specializes in patients with memory issues. (Mom has some sort of cognitive disability that includes memory loss, but which the doctors have been unable to diagnose.)

For the past seven years, Mom has lived at Happy Acres in a comfortable apartment with her cat (Bonnie) and her television. When I see her, I often ask if there’s anything more she needs or wants. She assures me that this is all she needs to be happy.

At this point, Mom struggles with routine personal hygiene, so there’s no way she can take care of tasks like signing up for Social Security or taking withdrawals from her retirement accounts. As her sons, that’s now our job. (And we’re happy to do it.)

You might think that this process would be easy — but you’d be wrong. I suspect that...

Today, I’m pleased to present the first-ever video from the Get Rich Slowly channel on YouTube. If all goes according to plan, there will be many more such videos in the future, not all of which will be shared here on the blog. So, if you’re interested in catching all of the video material I produce, you should subscribe to the YouTube channel!

This first clip is a 27-minute recording of a talk I gave on April 15th at Camp FI in Spring Grove, Virginia.

For those unfamiliar, Camp FI is a series of weekend retreats that let a few dozen folks come together to chat about Financial Independence and early retirement. The events are largely unstructured, a chance for attendees to meet and mingle with like-minded folks. But they’re not entirely unstructured. Throughout the weekend, there are a handful of presentations on subjects like real-estate investing, safe withdrawal rates, and credit card hacking.

But when I speak, I like to talk about Big Picture topics, such as the importance of purpose and why you should create a personal mission statement.

In fact, that’s the subject of this presentation, which took place on the twelfth anniversary of Get Rich Slowly. “What’s your why?” I asked attendees. Why do you want financial independence? Why do you want to retire early? Why do you want to sacrifice today in favor of tomorrow?

Typically when I share videos from other people, I provide in-depth summaries. As...

This week, Kim and I hired a contractor for what we hope will be the last major project on the “country cottage” we bought last summer. We’re replacing our rotting back deck and installing a hot tub. It’s an expensive (and extensive) project.

The cost hurts all the more because we’ve already poured nearly $100,000 into performing needed repairs on this property. (In fact, as you may remember, we considered forgoing the deck replacement altogether.)

Budgeting for this job led me to reflect on the costs of owning a home. Like my colleague J.L. Collins (who believes a house is a terrible investment), I refuse to join to the cult of of homeownership. Yes, I own a home — and have for 24 out of the past 25 years — but I’m under no illusion that this is a smart financial move. Kim and I want to own an acre of land in the country, which is why we bought this place. We didn’t buy it because we think it’ll make us wealthy. (It seems to be having the opposite effect!)

Today, both for entertainment and catharsis, I want to spend some time talking about the high costs of homeownership. And lest you believe the stories below simply prove that I’m a fool with money, I want to point out that my experiences seem typical. Everyone I talk to about homeownership has similar tales to tell. I’ll bet you...

During the month of May at Get Rich Slowly, we’re going to turn our attention to home and garden topics. To start, I want to take a brief look at the history of the U.S. housing market. Some folks might find this dry. I think it’s fascinating.

Private land ownership is baked into the U.S. culture and Constitution. It’s part of the material plenty we expect from the American Dream. For most Americans, homeownership implies success and freedom and wealth.

But for a long time, homeownership was the exception rather than the rule. Only farmers were likely to own land and a house during the country’s early days. With the coming of the Industrial Revolution, homeownership became more common for urban dwellers. Still, less than half of all Americans owned their homes until the late 1940s.

Here’s how U.S. homeownership rates of changed over the past 128 years according to the U.S. Census Bureau and the Federal Reserve Bank of St. Louis:

The current U.S. homeownership rate as of January 2018 is 64.2%.

I’m sure you could write a doctoral thesis on the reasons for the growth of homeownership over time. I’m not going to do that. After several hours of research into the history of mortgages and the real-estate industry, I feel like we can summarize everything in a few paragraphs. This article — which is information-only — will serve as background for future Get...