My Personal F.I.R.E.

We are back on track. Now it’s just a matter of keeping it that way. This month was… expensive. But I also started bringing in my new income, so we can start running some new numbers and calculations. Similarly to the last update though, there will be a hole in some of the data given I was not recording expenses for the start of the month. Let’s dive in!

Noteworthy Thoughts

Bang for Buck

If there’s one thing I noticed this month, it’s that the value and enjoyment you get for your money varies dramatically based on what you use the money for. For myself personally, there was a VERY large amount of money spent on activities and hobbies, but the fun and joy I received from it felt like it was worth every single penny. On the other hand, our largest expense was for a rental deposit, and even we will get most or all of that back in a year or so, it definitely didn’t feel like it has brought a whole lot of joy to my life (though it seems the price tag was a necessary evil for having a place to live). I think the key to feeling happy and comfortable with our financial situation might mean keeping a close eye on purchases that don’t seem to provide much fulfillment or happiness. Further, I think it’ll help to try to optimize and get even better bang for buck for the expenses that do provide a lot of enjoyment to begin with.

Moving Is Expensive (In Both Time And Money)

Granted, we moved halfway around the world, but leaving our place in Thailand, organizing the move back, finding a new place to stay in, and finally moving everything is EXPENSIVE! Between the flights, the rental deposit, all the new furniture, appliances and other home shopping, the total bill for the move was quite high, and that only takes into account the financial cost. The emotional and physical toll it took on us was also quite heavy. There was so much time and effort invested into looking for a new apartment, organizing insurance for our car and new apartment, finding, buying and setting up all of the appliances and amenities you would expect in a home, actually moving everything over, and on and on and on… In the future, we need to be aware of the cost (financial and emotional/physical) that comes with a move. It is certainly not a trivial one.

Income

Well, I finally have a new means of employment. One that will be much more stable and lucrative. Also, this income is now employment income instead of untaxed contract revenue. Given my start date, and my employer’s pay cycle, I only received one payment this month, but things should be slightly more than double next month.

Patrick’s Employment Income (USD): $5,304.95

Total Income (USD): $5,304.95

Expenses

I managed to get our expense tracking app to reset the base currency to USD, but there still appear to be a few bugs. At least for now though, things are usable. I also managed to resolve the connectivity issues with my bank, so it seems like the automated records are coming in again (though it does seem like I need to reset that connection every so often).

This is unfortunately still not a full picture of our expenses and there are probably some expenses that were untracked at the beginning of the month. Surprisingly though, I actually think this covers 70% or more of our expenses because we don’t use cash that much, and our debit and credit card expenses are still recorded and handled by the bank, and thus tracked by our app. Here’s a breakdown of our larger expenses for August.

I decided that my threshold for inclusion in this would be USD$100.00, and that I would call out anything else in particular that was close, but out of the ordinary. Obviously, a large chunk of our expenses go towards 5 things – our rental deposit, my skydiving activities, rent, and food (groceries and eating out).

Luckily, we know that the deposit is a 1 time expense, and in fact, I plan on listing it as an asset because we’ll be getting most of it back (though it is sadly an asset that will not increase in value). Our rent expenses are going to increase to USD$1,990.00 per month, and the reason August was so low was because it was only a partial month.

While I fully expect there to be several hundred dollars in skydiving expenses on a regular basis going forward, these expenses were likely a little higher than what a normal month would include. In August, I kind of splurged and those skydiving expenses include:

• USD$506.00 for jump tickets (22) at Skydive Santa Barbara
• USD$125.00 for a ground school at Skydive Santa Barbara to get recurrent on my license
• USD$280.00 for jump tickets (10) at Skydive Perris in LA for training purposes
• USD$150.00 for a balloon jump near Skydive Perris
• USD$125.00 for a course to recertify my instructor rating in Skydive Elsinore
• USD$270.00 for other various small expenses associated with jumping

In reality, I can probably expect somewhere around $600.00 per month in Skydiving expenses going forward because I expect I will probably be at Skydive Perris once per month, spending about $280.00 on jump tickets, and I expect that I’ll go through about 13 or 14 tickets per month at Skydive Santa Barbara (valued around ~$300) because I can supplement those tickets with jumps as an instructor.

With regards to food and drinks, those expenses will probably increase because we spent a significant amount of August living with Fatima’s family, and that certainly reduced our out of pocket food expenses. Exactly how much that will go up, I’m not strictly certain, but it’s something I’ll be keeping an eye on.

Total Expenses (USD): $8,998.05

Assets

During this month, we managed to liquidate our remaining Thai Baht assets and convert them into USD, so we are now down to two different currencies – US Dollars and Canadian Dollars. Sadly though, I’m currently having some issues with changes of address and verification related stuff for my CAD personal bank account, so I won’t have an updated value for the account. That being said, it has a low value to begin with, and won’t have dramatically changed from the last known balance. Also of note here is that for the first time, I’ve included Fatima’s account balance here as a separate account

• Note that Credit Card Points Current USD Value is based on a redemption rate of 100PTS to USD$1.00

Total Assets (USD): $85,642.14

Debts

As usual, our debts are exclusively credit card debt and the business tax liabilities, though those are now much clearer as the company finances and taxes have been done by the accountant. The corporate taxes have a small portion that is an estimate because they need to do a second corporate year end financials as a result of my tax residency status due to my move back to California.

Also of relevant note is that there are still corporate expenses for the year financials that need to be paid to the accountant, and I will also have personal tax liabilities for the dividends I paid myself from the corporation in the past year, though neither of these have any distinct amounts known just yet.

Total Debts (USD): $13,613.20

Net Worth

This is definitely a slightly more representative understanding of our net worth at this point (at least in comparison to how there were some big holes in last months update).

Net Worth (USD): $72,028.94

Final Notes

Now that things have actually begun to settle, it’s time to kick this into high gear. I no longer have any excuses of any kind. My particular goal for this upcoming month is to open the corporate investment account, and begin investing as much as we can while still having a comfortable emergency fund available in the company. I definitely feel better now that I’ve sorted most of the problems with the expense app, and that I’m dealing with fewer currencies, and more traditional forms of income. Thanks again for reading this post, and I hope your financial goals are coming closer to being a reality in your life! As always, I appreciate you, and if you have any questions about the topics discussed above, or about my own personal finance situation, please post a comment or send me an email.

I need to start out by apologizing for such a late post. I’ve been procrastinating on writing this post for a few reasons. I like it when everything can be neatly wrapped up and tied into a bow, and that is most certainly NOT the case right now. The month of July was quite hectic with the move from Thailand to California, so we weren’t quite as diligent in tracking expenses towards the end of the month. I’ve also been trying to convert the base currency for our expense tracking app to US Dollars, but this has proved much more difficult than expected. Even the first two weeks in August has been a dramatic change from the norms over the past year and a half for us, so it has taken some time to get used to. Ultimately, I’ve been using the resulting chaos from these and more as an excuse not to write this post. For my lack of discipline, I am very sorry.

Noteworthy Thoughts

Every Month Will Be A ‘Hectic’ Month

Upon re-reading the July Update I realized that while I may have called out several things, I haven’t done much about the ones that would have had pretty clear action items to make things better. I’ve read that when budgeting, a common mistake is to assume that any spending that doesn’t fit monthly norms is a sign of ‘abnormalities’ and can otherwise be completely ignored when setting the budget. In general, most months will have some level of unexpected expenses or circumstances that would make it easy to discount them as abnormally hectic months. Another obstacle that people new to expense tracking face is that things go really well for the first month or two, and they get complacent or lazy or have a change in circumstances that causes them to falter on tracking expenses. I think this past month, I’ve fallen victim to both mistakes and used our move as a crutch. I need to remember that I need to be tracking all expenses all the time. It honestly doesn’t take that much effort, it’s just discipline and habit.

Friends And Family Are Superstars

An absolutely huge thank you goes out to our friends and family who have given us immense amounts of support with our move and ensuring this was a smooth and comfortable transition back to the US.

Fatima’s family has been graciously hosting us since we arrived back in California, and provided us with somewhere to quarantine, and stay until we can rent our own place. Being able to be around her family has been amazing, and we are extremely grateful to them.

Our Rattachai Muay Thai family also came to our house to help us move many of our things out and even stayed to help us clean up and repair parts of the house for our move out inspection. I am extremely grateful to have been able to train with them and get to know them.

Income

As with previous months, my work income earned in July 2021 was made entirely through contracts billed by my business. As always, it is important to note that this income is pre-tax revenue, and that taxes will need to be paid through the business for this income.

Patrick’s Contract Income (USD): $8,399.50

This month, Fatima had some contract income as well from part time online tutoring contracts. This income is also pre-tax, and as such we will need to pay taxes via income tax in 2022.

Fatima’s Contract Income (THB): ฿7,160.00

Fatima’s Contract Income (USD): $217.72

There were other sources of incoming funds though, as we had to sell many of our belongings prior to the move back to California. This included the return of our housing deposit, and the sale of both motorbikes, several expensive household items such as computer monitors, kitchen appliances, organization tools, and various other small knick knacks.

Income from Sale of Belongings (THB): ฿83,760.00

Income from Sale of Belongings (USD): $2,546.90

Total Income (USD): $11,163.72

Expenses

Unfortunately, due to some technical difficulties with our expense tracking app, I’ve been unable to get a clear picture of our expenses for the month of July. I’ve been having issues connecting (or reconnecting) my bank accounts and credit cards to the application for automatic syncing, so I’ve sent their support team a message in trying to resolve the issue. In the meantime, I only have data up until July 14th for the bank transactions. Because of the move, we stopped tracking daily expenses around the 18th or 19th of the month, so we have slightly more data for that, but still not enough to cover the whole month. One thing to note is that we saved over USD$1,200 by using my credit card points to pay for our flights from Phuket to California, so that was a nice little chunk of change saved. It might be worth tracking credit card points as an asset going forward. For now, here is the breakdown of our expenses.

As mentioned, the expenses for this month are only a partial picture. There were several cases where we received cash for selling our belongings, and subsequently used this cash for purchases. Once we stopped tracking things, everything kind of spun out of control. Also of note is that we paid rent for July on June 30th, so the housing expenses here were significantly lower than they would otherwise be. Here’s a breakdown of our larger expenses for the month (based on what has been tracked).

The largest expenses this month turned out to be my Credit Card Renewal Fee (USD$550), gifts for various important people in our lives, food for the month, and our COVID-19 tests prior to our flight. There was also one major expense that I’ve been unable to figure out for THB฿8,000.00. Once again though, it is important to point out there is a MASSIVE hole in this analysis that misses anywhere from 12 to 17 days of the month. Aside from trying to be more consistent with tracking expenses, I’m not going to read into this too heavily.

Total Expenses (THB): ฿99,378.22

Total Expenses (USD): $3,021.81

Assets

Once again, assets are split in 3 different currencies – US Dollars, Canadian Dollars, and Thai Baht. There are also various non-liquid assets.

• Note that Credit Card Points Current USD Value is based on a redemption rate of 100PTS to USD$1.00

Total Assets (USD): $67,713.59

Debts

Again, this month current debts are exclusively credit card balances the tax liability for my company (which will be paid in July) is unlisted, and currently unknown.

Total Debts (USD): $211.40

Net Worth

I’m not comfortable saying this is an accurate representation of where we are financially right now, primarily because of the lack of data and the notable change in life circumstances. That being said, per the numbers, the current net worth is:

Net Worth (USD): $67,502.19

Final Notes

It’s only after I’ve let the ‘abnormalities’ of this past month affect me that I wish I had the data to see how they impact my finances instead. Once I had let go of the discipline of recording the transactions, I let go of the discipline to sit down, analyze the results, and write a post. I am very sorry that this will have continued impact in the next post as well due to the lack of data available for early August. The lesson has been learned. Thank you very much for reading this post, and I hope to have more for you soon. As always, I appreciate you, and if you have any questions about the topics discussed above, or about my own personal finance situation, please post a comment or send me an email.

I keep having to remind myself this isn’t about showing that I’ve got everything figured out (spoiler, I don’t), and that it’s better to just do this now than to try to get all my ducks in a row and have potential issues following through on my commitment (which is an issue I’ve had trouble with before). I’m going to try to just post the numbers and updates, and see where this goes. Start the habit, and stick with it. I’ll try to create some formatting that will be useful for this post and future posts – something I can use whenever I make an Monthly Update post.

Noteworthy Thoughts

Coming up with the numbers is just a matter of going through the motions of checking all my accounts, and copy-pasting that information here. It’s important to me that this blog and this process yields more than just a record of my evolving financial situation, which is why I want to call out some thoughts or concepts that occurred to me throughout the month as a way to reflect.

Don’t Wait to Pay Bills

This one may seem a bit obvious, but I’ve noticed myself seeing a bill, and not immediately doing everything necessary to settle it. This needs to change. Not paying the bill immediately breeds anxiety about needing to pay the bill, and anxiety about whether I will lose track of the bill or even forget to pay it entirely, incurring unnecessary and otherwise pointless fees or interest for late payments. Subjecting myself to this anxiety serves no purpose, and just erodes the quality of my day to day living. Paying bills immediately is objectively a good financial habit to build and have.

Expense Tracking Tools Provide Significant Insight

Another one that may cause people to moan and groan. I’ve tried tracking my expenses on my own using a spreadsheet and Google Forms, and while that worked for a while, tracking every single expense this way grew tedious, and eventually boring. Tracking expenses is a boring activity though – I don’t think I’ve ever heard someone say that they actively enjoy inputting every last expense and categorizing it. That being said, using an automated tool (we’ve been using Wallet by BudgetBakers for this past month) means that unless I pay specifically with cash, everything is automatically tracked and categorized (although, sometimes poorly categorized). With repeated use, it should get to the point of recognizing common transaction types and improving the accuracy of categories for transactions. At the very least, this expense tracker has forced me to be more aware of things we are spending money on, and how much it actually is. I haven’t gotten to the point of intensive analysis yet (though I’m sure that will eventually happen), but having something that does the tracking (almost entirely) automatically is nice.

Inertia is a Force to be Reckoned With

This should have been the month I actually ensured all my documents had been properly submitted, and the business investment account opened. I’ve had the relevant pages that needed adjustments on my desk for nearly 2 months – and they are the ONLY documents on my desk. And yet I act as if they aren’t there. I have no doubt that implementing automated mechanisms that remove the need for manual effort usually involved in investing (think automated 401K contributions, recurring fund transfers, etc) will dramatically impact the degree to which I follow through with my investments. It’s time to get started on these.

Leveraged Investments are Worth Some Consideration

One thing I did do this month was some investigation regarding my planned investment strategies. I read through multiple different blog posts, a few papers with the results of studies and investment backtesting, and watched several videos on the subject of different ways to attempt to increase the return on investment, especially early in your investing life.

To be extremely clear with this, what follows should not be construed as Financial Advice in ANY WAY. Do your own research – especially on the following topic.

One avenue I came across for investment strategies is the concept of using Leverage as a means of increasing your exposure to a particular asset class (usually the Stock Market) above what you might otherwise be able to attain using only the value of your own cash/assets. The concept of leverage is a VERY nuanced and intricate one. It effectively involves borrowing money for the purpose of investing. The upside is that if things go well, you keep any increase in value of the asset that the borrowed money has earned, and still only owe the initial amount. For example, let’s assume you have $100 to invest, and you want to do so in the stock market. If you use leverage to gain twice the exposure to the stock market, you would borrow $100, and invest the total ($200). If the value of the stocks you’ve purchased goes up 10%, then your investment is now worth $220, but you still only owe $100, which means that you’ve just turned $100 of your own money, into $120, netting you a 20% return. The downside, and ultimately the VERY LARGE risk of an investment like this is that it works exactly the same way in reverse. If the value of the stocks you’ve purchased instead goes down by 10%, then your investment is now worth $180, but you still owe $100. Thus, your share of the investment is $80, and you’ve lost 20% of your money. Using leverage just causes the overall changes in the market to affect (in either direction) proportionally to the amount leverage used (which is 2X in this example).

There are a wide variety of resources online that you should spend a significant amount of time exploring before even considering putting money into a leveraged investment. I was planning on including some links to resources I read through about the concept of leverage, but finding the exact ones I went through is not as easy as I thought, so I’ve decided against doing so. The specific strategy that most intrigued me is one that has been dubbed Hedgefundie’s Excellent Adventure, and involves investing into leveraged ETFs as a way to improve returns during the early stages of investment for an individual. I’m not going to go into any detail about any of that here, but who knows, I might do a post on it later.

Whatever you do, please please please please PLEASE don’t blindly invest into leveraged ETFs or any other leveraged asset class. Do extensive research first. Find resources online that discuss these topics, and enthusiastically follow the inevitable rabbit holes that will likely consume one or more days of your time before even considering this kind of investment.

Income

Income for the month of June 2021 was made entirely through contracts billed by my business. It is important to note that this income is pre-tax revenue, and that taxes will need to be paid through the business for this income.

Income (USD): $4,559.50

Expenses

This is where the meat of today’s post in going to be focused. There were lots of good insights from the expense tracking app. Here is the breakdown of expenses by category from June 1 to June 30.

There were a few things in particular that raised the expense total this month. That being said, there were also some expenses that I was planning for that did not come to pass. Here’s a breakdown of the big ticket expenses for June 2021. I’ll include any individual expense, or subcategory over ฿3,000.00, which is approximately ~USD$100.00.

Given this is a blog about personal finance, I won’t go into any details beyond that I had some personal things to deal with this past month, and that required me to undergo some therapy. The expense for it was quite high (nearing ~USD$900) and this was in large part due to the fact that it wasn’t covered by insurance of any kind. Other things to note are that the vacation expenses for the month were about 50% of what I was initially expecting and planning for, so this was nice, though this is in part because we didn’t do as much as we were expecting either. Lastly, the food expenses ended up being lower than the previous post estimated, but it’s interesting to see that Eating Out accounted for ~40% of food expenses. Fatima and I haven’t been focusing on cooking quite as much, so I guess those expenses make a bit of sense, but I certainly think we could lower the overall number if more of our meals were home cooked. Clearly convenience and experiences come with a premium.

Overall, I had estimated expenses for this month around ~฿79,000.00, and so the discrepancy is about ~฿39,000.00 which is certainly not small. The difference in expenses can be attributed to the following:

• Therapy expenses were entirely unplanned, and resulted in ~฿28,000.00 worth of expenses
• Vastly underestimating the housing expenses (primarily Electricity) which had a net difference of about ~฿7,000.00
• Underestimating Massage Therapy expenses, with a net difference of about ~฿3,000.00
• The Life Event was also initially an unplanned expense, and was a difference of ~฿4,300.00

Total Expenses (THB): ฿117,769.15

Total Expenses (USD): $3,672.54

Cash Flow

Total cash flow for the month will be a bit skewed given that expenses and taxes associated with the income earned through the business haven’t been accounted for yet. Even still, it’s a bit lower than I would like, but that’s likely to change in the upcoming months after the move back to California.

Cashflow (USD): $886.96

Assets

Once again, assets are split in 3 different currencies – US Dollars, Canadian Dollars, and Thai Baht.

Total Assets (USD): $63,192.90

Debts

Again, this month current debts are exclusively credit card balances the tax liability for my company (which will be paid in July) is unlisted, and currently unknown.

Total Debts (USD): $138.56

Net Worth*

My net worth decreased this month, which is obviously not good. It appears I dropped about ~USD$2,400. I’m looking forward to seeing that go up again soon.

Net Worth (USD): $63,054.34*

Final Notes

I’m finding myself surprised at the amount of content I’ve been writing for this. It’s been very encouraging to get messages from everyone about the blog as well, so thank you very much for your interest and for reading through it. This upcoming month is going to be a bit of a wild ride – by the end of it, I’ll be back in the US – but I’m excited to see where it, and the rest of the year, will take me. As always, I appreciate you, and if you have any questions about the topics discussed above, or about my own personal finance situation, please post a comment or send me an email.