three year update

**Performance**: Living expenses for the third year came to $42,812 (max budget $62,604). We generated $9,514 of income this year primarily from my wife’s previous fun job and the stimulus payment. Our investment withdrawal was $33,298 this year, thus our pro-rated, annually-adjusted withdrawal rate was 1.59% for the year. Without the additional income stream, our withdrawal rate would have been 2.05% for the year. Our net worth went from $1,333,772 (year zero) to $1,471,164 (year one) to $1,488,092 (year two) to $2,010,995 (year three, as of June 1, technically up another $40k since then). The large jump this year was primarily due to the de facto reverse mortgage purchase on my parents’ home/farm, as well as an approximate 10% increase in VTSAX over the past 12 months.

 

**Purchase**: I purchased my parents’ home/farm for $460k and gave them a guarantee of free rent for life. At the time of purchase, it was worth an estimated $750k (now estimated at $835k – Zillow has our zip code increasing 30% in value in 2019 alone – crazy out here). The difference in FMV for taxation purposes is covered by the equal exchange of rent for interest (complicated, not getting into it). So why did they sell? Basically they just wanted extra cash, a guarantee of housing for life, removing the house from their name in case they ever needed means-tested assistance, and to be able to pre-gift an inheritance to their children while still alive. $250k went to them; I bought my sister out for $210k; the difference in true value and sale price was my gift; everyone is happy.

 

**Reflections**: I’m not particularly interested in spinning comedy this time, but it’s been a crazy year for a whole lot of reasons. Did I panic when the market corrected 40%? No. Howling monkeys are always gonna howl. I rode it out and have gotten 70-75% of the losses back. I also had to liquidate a lot of post-tax stocks in order to buy my parents’ place before the crash, so that was fortunate timing. I was re-interviewed by the NYT in a follow-up for their piece on FI. I seem to recall being the only subject who had made reasonable gains. I therefore was only a minor footnote in the piece.

 

**Experiences**: I ran over 3000 miles, won a few more races, and saw my competitive running career come to a close (personal records set in each distance this year: 5:12 mile, 17:37 5k, 36:39 10k, 1:17:38 HM, 2:43:12 marathon). I’m proudest of having set the fastest time ever for a 40+ year old in my hometown HM race. I continued to write in my daily journal every single day since retirement without exception (focusing on weird dreams), went back to teaching as a volunteer ESL teacher for a semester before COVID-19 (teaching intermediate level classes in English), volunteered as a three hour marathon pacer for a few charity races, squandered 300 hours playing video games (Persona 4, Persona 3, FF7 Remake, Witcher 3, Horizon: Zero Dawn), collected some more vintage sports cards (pictures of men with moustaches), spent more time with friends, participated in a financial pharmacist podcast (early retirement, if I recall the topic correctly), visited Alaska/Washington/Victoria for two weeks with my wife, revisited Japan by myself for two weeks (averaged 40k steps per day), got back into some television (Hoarders, After Life, Space Ghost: Coast to Coast, COPS, Star Trek: Picard), spent way too much time on social media trying to correct misinformation on COVID-19, and took up cycling on a pretty serious basis two months ago (marathon training carried over, so my wattage [261w / 3.6 FTP] would put me around a good Cat 4 or bad Cat 3 racer if I ever were to compete).

 

**Upcoming**: What lies ahead in year four? I can’t say for sure. Definitely more cycling. Possibly learn to swim without a snorkel. Triathlon? Campaign volunteering for the rational party. Definitely not returning to monthly updates. I’m kind of stuck in a rut since I’ve done most everything I wanted to do. A lot of the stuff I didn’t tackle is what I’ve lost interest in. Oh…also whatever the fuck I want. I’m supposed to say that. But seriously, I let this pandemic be an excuse for a drop in productivity. That changes now.