Every Day Realities

As my dad put it, as of tomorrow, he’s going on 89. Today was his 88th birthday. I do like the way he looks ahead. And, I’m amazed at what he had to do to get here. Hard work has always been a reality for the majority of the population, unless you believe the anthropologist’s tales of pre-civilization subsistence living. (Really, only three hours a day?) For most people, hard work is a necessity, not a choice; because, when you’ve decreased expenses far enough the only way to go forward is to increase income. Time is money, so spend time making more money – even if it takes every day.

Take your monthly expenses, divide by 30, and get the amount of money you have to make every day. Remember, taxes are an expense too; even if they are only paid annually. $1,000 per month is about $33 per day, and is only half of the poverty level. $2,000 a month is about $66 per day, just about exactly the poverty level for a family of four, and works out to about $8 per hour – after taxes. It doesn’t take much of a mortgage to get to $3,000 per month which is roughly $100 per day – a rate that some folks make in an hour, including me when I get to charge full rate for consulting. Have anything go wrong with health, a house, or a car, and the annual, monthly, daily, and hourly expenses rise quickly.

The essence of personal finance is; “Spend less than you make. Invest the rest.” If you are able to do that, and are actually doing it, congratulate yourself. You are definitely headed in the right direction.

Considering that the median net worth in the US is less than $20,000 when housing prices are ignored (which is easy to do now because the market is so uncertain), there are a lot of people who haven’t had much to invest. As of 2012, one-sixth of Americans live in poverty and the majority of Americans will spend some time in poverty even if they aren’t there now.

It seems that it should be easy to stay above that poverty line, make more than enough every day, and eventually accumulate far more than one year’s expenses.

Of course, millions of people are making more than enough. Many are making just as much, and only need to change their spending habits to decrease expenses and increase investments – no job change required. Yet, there are millions that, despite low unemployment, can’t make enough or are close enough to the edge that they experience that perpetual anxiety of imminent loss.

The inescapable reality is math. Working every day is unsustainable. My Rule of 7 suggests I should work every day based on my net worth, but eventually I have to take a day off. Maybe next week. That should be my fifth day off this year, just about one every other month. Taking more time off makes a lot of sense. Productivity rises. Health improves. Stress is relieved. A sense of life returns. Yet, math remains. For anyone trying to make enough, working five days a week instead of seven means having to make 40% more on each of those five days. 7/5 = 140%. Have you asked for a 40% raise lately?

My situation is improving, as long as I work as hard as I have been. A few more consulting hours, sustained book and art sales, and a speaking event every month can relieve a lot of financial stress.

Others are working their way there, but as Bagpiper Don posted;
Feel like you’re working so hard you’ve become INSANE?
Give your “MY GHOD I’M FLIPPIN’ NUTZ!” battle-cry of a near-crazy person here.

He has one business (music), and is starting another one (biscotti – site under construction), and probably hasn’t had a day off in a long time. The easiest way to tell the days of the week is probably by the health inspector’s office hours. If they’re open, it must not be the weekend. Biscotti is coming soon. (Got a gluten-free version?)

Another friend has a business called Savvy Caddy Wallets (go to his site for details). Good products are not enough. Cash flow must be managed. Inventions must be pursued. Fellow inventors must be advised, especially if they recognize the value of his experience. Alan and his wallets can’t take a day off, unless the cash flow improves, venues open up, or the next invention comes to market ahead of schedule.

Both of these entrepreneurs could use some venture capital.

I’m amazed that my dad managed to maintain a similar pace for decades. My parents raised three sons, got us all through college with good degrees, and at least in my case sent me off into the world without a debt – except for the feeling of never being able to pay them back for the good things they did for me. Dad worked six days a week, and for years worked more than one job. Driving truck for a while, then managing a small oil depot, and even running a service station. I didn’t see much of him except on Sundays. Mom worked too, tending disabled kids and eventually establishing an ambulance service (volunteer, I believe.)

It wasn’t easy then. It isn’t easy now. But somehow we survive. And I suspect that part of the secret is every day meeting those every day realities; “Spend less than you make. Invest the rest.” And then, regardless of the math, take some time off and remember to live.

Happy Birthday, Dad – and thanks.

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Freelance Life

I freelance and I work with others. That’s sounds contradictory, and that’s okay. My business is ideally in consulting, which is very collaborative and fascinating; but circumstances and opportunities mean I am freelancing as much as I am consulting and as much as I am doing other things. What do I do? A little bit of a lot of things. Why do I do it? Because I must. Why do they do it? They’re in the same situation. Who are they? They are the workforce of the new economy, and a group of us work from the same office, a co-work space in downtown Langley. It wasn’t conventional, is becoming more common, and is redefining work and finances.

My business is nothing new. Several years ago, back when I was temporarily semi-retired, I started up Trimbath Creative Enterprises to manage the books I’ve written, the photosFeathered I sell, and the occasional consulting or teaching gig. I hoped to be fully retired, but I knew nothing is guaranteed and a bit of preparation made for a better backup plan. Besides, retired or not, making a few extra dollars is handy. Most of you know the story: Triple Whammy, fighting to keep my home, building my business, and recently arriving at a modified mortgageI think.

My passion is for people and ideas, so of course I enjoy consulting. Consulting though, is not ideal for steady income and quieting the concerns of mortgage companies. As it turns out, spreading the word about consulting has led to my role as project manager for a virtual museum, which oddly inspired the role as Information Manager for New Road Map, which is extra inspiration to help folks with the social media campaigns and self-publishing projects. It is a varied existence, and an example of the new way of work for many people.

Today I worked from home. That is much easier now that the threat of foreclosure has dramatically diminished. (Believe it or not, that story continues.) In sprints of an hour or two I’ve written supplemental material for a magazine, worked on the museum, disseminated frugality news, researched aerospace electronics, and wrote an article about real estate. I’m looking forward to hearing back from the three local businesses that are working on their plans, and two manuscripts I’ll get to proofread. The IRS has a pesky little box asking for the purpose of the business. One word does not suffice unless it is survival.

No, I didn’t work from my pajamas. But no, I also didn’t have to put on a suit and tie, and I didn’t have to commute more than twelve feet. It has been a gorgeous summer day. I’ve looked at it frequently, though my stiff neck suggests I stared at the computer far more. The only interruptions have been self-induced. I’ve only had a conversation with one person today, a neighbor whose house is unfortunately up for sale. Except for him (and a person asking for directions) every contact has been through email, Facebook, and Twitter. A wide array of verbal communication skills don’t get used.

I also work from my office. Well, it isn’t my office; it is a co-work space where there are five chairs, windows, a long counter around the edge of the room, and anywhere from none, to one, to the rare event of too many of us sharing a space. In general though, there are more chairs than people and a fair amount of silence. Co-work spaces are becoming more common because more people are working as I do: a variety of tasks, none of which require constant personal contact, many of which are remote, all of which benefit greatly from good Internet service and a lack of espresso machine noise. Most of the time we are heads down, bowing to our laptops, usually with earbuds in, making little noises as we unconsciously shift in our seats or sip from our cups.

There’s very little need for anything else in the room. We’re over a breakfast and lunch restaurant, The Braeburn, that tempts us with wafts of bacon in the morning. Half the windows face Useless Bay Coffee Company, which catches our attention with the aroma of coffee beans roasting onsite. Out the other windows is South Whidbey Commons, which is run by and for the local students, which also means it has a livelier vibe as school lets out.

Office view
Those of us using Langley Coworks don’t just sit there and ignore each other. Inevitably, people take breaks, commiserate, organize happy hours, and generally be social humans; something that is harder to do if working at home alone. There’s also the shared venting when someone loses a file, a client or customer does something bizarre, or a deal falls through. The good news is that deals also arise. Innovation and networking commence. That article about real estate that I mentioned above is the result of one of the folks needing some help as his workload increases. I now have a gig writing for Curbed Seattle. It’s conceivable that person A could be helping person B who is helping person C who is helping person A.

Coworks are for digital nomads, a population that is growing. It is also a population that no longer has to live where the cost of living is high. Places like Whidbey Island are a mix of expensive and affordable. It is easy to imagine a house with my view on the mainland costing at least a hundred thousand more. At the same time, small towns need new people. There’s even a kickstarter campaign to draw more digital nomads to Whidbey, Why Not Whidbey? The same idea can work for lots of places, freshening populations that are in the midst of generational shifts.

Our society will always have people in farming, medicine, the basic hands-on services required by civilized life. Increasingly though, the single careers that shaped our cities are shifting as multiple jobs and geographies become disconnected. Old rules don’t necessarily apply. At the co-works, we dress on the casual side of office casual; which is handy because all of us except one bicycle commute on occasion. The only person that doesn’t is the only person whose work is tied to the island, the co-manager Christina Moats. She’s proof that there will always be people tied to an area and for a good reason; she’s a real estate agent.

It has been a long day, as are most while I recover from my financial upset. As I typed this post though, I was reminded of why I also like working from home. The view from my house as the sun set. No commute. And a glass of wine, readily at hand after I hit Publish. That certainly is not the way my days ended when I worked from a cubicle. Welcome to slice of a newer and freer life. DSC_4923

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Mortgage Farce

Work with me people. We’ve got to find the funny in this. I know it’s there, but I’m looking at it from the inside. Did you think my mortgage modification was official? So did I. Evidently, it is somewhat up for debate. If we don’t find ways to laugh at trauma, the trauma wins. No. I won’t give it that much power, because persistence can succeed regardless. So, okay, a drink beside and partly inside me, let me tell you about yet another bizarre episode in my mortgage modification history; an episode that caught me by surprise.

Mel Brooks said it well, “Tragedy is when I cut my finger. Comedy is when you fall into an open sewer and die.” In my opinion, the wise man will know that cutting a finger could also be funny from the right perspective.

Today I received an “EXTREMELY URGENT – PRIORITY OVERNIGHT” package. Evidently, the folks on the mortgage side of my bills didn’t like the way the paperwork was filled out. The part they didn’t like was the part that they approved of when I talked to them prior to submitting it. Whether through a quirk of MS Word formatting or different standards in different states, according to a local Notary Public there was no way to legally notarize the documentDSCN5350 while also meeting the mortgage servicer’s specified instructions. I’ll spare you the details, but simply putting signatures and seals on paper has been more of a disruption than almost any other detail in this process.

That summary is the long answer compared to my reaction. WHAT?!?!?! I’ve already got the signed document from the mediator. The mortgage statements are coming in the mail the way they’re supposed to. My business is doing well enough to pay me well enough to pay the bills. I even fixed the fence. What do you mean when you say the agreement that was agreed upon is no longer agreed upon? If we agree to a new agreement, why should I think that agreement will mean anything?DSC_4910

The Trimbath Sanguinity slipped away for an hour or so. One of my closest friends can attest to that. I called him up to vent, he said one small innocuous phrase that hit a nerve, and I become downright boisterous in my response. It wouldn’t surprise me it feathers were ruffled on rudely awoken neighborhood owls.  In retrospect, I think I managed to unleash a heavy dose of anger without using a bit of profanity. Hey, I might have enough vocabulary to become a writer yet!

If you want to laugh at something, step back from it. I was livid. My friends were sympathetically angry. A few steps further back and there will only be shrugs. Take enough steps away (without running into or falling off something) and imagine what an alien would think. Okay, we can’t do that; but imagine trying to explain that the agreement involves pieces of paper stained with ink, and that even though all of the documents were signed and stamped, the precise location of the signatures and stamps makes a difference even when everyone said it was okay the way it was.

“So, you each make squiggles that represent yourself. Why not?
“But one person uses a stamp instead of a squiggle and that is more important. If you say so.
“And you all agreed that one of the squiggles could be shifted because the various instructions for the locations of the squiggles are mutually exclusive. Sounds reasonable.
“Which was good because it meant other squiggles could be made on other pieces of paper that meant that everyone agreed. Good.
“Until a month or so later someone else points out that one of the squiggles isn’t where they expected it to be, so start over. Really? Does the rest of your planet work this way? Good. You’ll be easy to take over.

Ah, what would Robin Williams do with such good material? His riff on golf is a great example on how a different perspective changes the entire view.

Robin has been on my mind. Mentioning him creates a sobering moment, and also inspires an insight. I’m known for being generally upbeat despite momentary upsets like today. I avoided writing about Robin’s death partly because so many were doing a better job, partly because I’d just written about another impressive  person’s death, and partly because I know too many people who find themselves in tortuous episodes because of finances or family. I’ll try to bring this back around to the funny by the end, but stay with me for a bit. Opening the letter kicked off an anxiety attack. They’ve been far too common over the last few years. Heart rate up. Breathing quickens. Sweat arrives. Muscles tighten, and may not loosen for days, or ever. Others I know have experienced worse. It is easy to imagine such a reaction becoming an overreaction. It isn’t polite to mention, and I won’t name names, but too many people I know understand Robin’s choice and struggle though the cause was different. The consequences of financial upheavals aren’t just houses and dollars. Up through 2012, more than 10,000 suicides can be attributed to the recession. That is more than the US casualties in Iraq and Afghanistan combined. (And I am amazed at the non-US deaths.) Another reason I didn’t write about Robin’s death is because, as someone else said, if we are going to focus on the celebrity we should focus on all such people equally. There are too many to write about.

Sad. And yet, I am that much more determined to find the sunshine.

Something else I noticed when I started watching the lists of Robin Williams’ videos was how little I’ve laughed lately. I laugh, and I mean it; but, I’ve also been so busy working to navigate my financial turmoil that I rarely have time to watch or read a comedy. I watched Robin and I laughed. I laughed with abandon. For those few moments, I felt better, much better. I felt my body chemistry change. I felt muscles shake then loosen. I found myself in the moment, not worrying about whether I was using this moment to its maximum financial benefit. The life of a billable consultant involves intense scrutiny of thoughts and actions throughout the day. Laughter broke past the details to the shock and surprise that touched my soul, and reminded me it was there.

Sanguinity can be based on keeping sight of hope, which is valuable and necessary; especially when dealing with bureacracy. Realizing how much of the world is just a cosmic farce may just be one key step towards wisdom – as long as you laugh along the way.

Photo on 2014-08-20 at 19.07 #2

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Recovering My Fence

It is August and summer. Time to fix fences broken in December and winter – in 2011. Personal economic recoveries only happen overnight with a different kind of windfall. I believe in such things, and hoped my friend’s news of inheriting $2,501,981.89 wasn’t a scam or a bit of spam. Alas. Recoveries happen, but rarely return to exactly where they started. The stock markets hit new highs. Unemployment has dropped. Interest rates remain low. I have a new fence that isn’t as nice as the one that fell, but it may be good enough to keep out the deer. I celebrated.

December 2011. The NASDAQ was just coming back up through 2,500 after bottoming below 1,500. The S&P 500 was rising past 1,200 after bottoming below 800. Unemployment was at 8.5%. Yay! We were three years past the drop, had a long way to go, and it was taking too long. I was searching for a job, selling off my savings, and scrambling for business. And then the winter wind caught a source of spring flowers and tore down my fence. The cute, rapacious deer walked through the new entrance and enjoyed feasting on my garden. The government couldn’t decide whether to spend money or not on its own programs, unless it was for “defense”. I knew I couldn’t fix the fence because I could barely afford – well – anything.

This series of posts are about my personal financial recovery, the messy phase of a person’s life that is usually avoided in stories because it isn’t the readily recognized events like finding a job or getting a new mortgage. And yet, the smaller, more subtle events sometimes invoke the strongest feelings and the biggest celebrations.

We’re in a messy part of our recovery. The NASDAQ is over 4,400. The S&P plays with 2,000. Unemployment is down to an almost reasonable 6.2%. Interest rates are so low that my modified mortgage is at 2% capped at just over 4%. The messy part is that the markets are up, but not for all stocks. If you’re one of the unemployed the unemployment rate is 100%; and many who are unemployed aren’t even counted because they’ve been out of a job for too long. Interest rates are low, but gas prices suggest an inflation rate of 4.5%, not 2.1%. I do seem to recall a time when corn cost $1/10 ears rather than $5/3 ears.

Fixing my fence was not the top priority for my house, except that it was the biggest project I could accomplish for the least money. The old fence was the standard of suburbia: 4×4 posts, 2×4 beams, a nearly solid wall of thin wooden slats. Very stout and opaque, when built right. For some reason, when the fence company built it for the previous owner, they didn’t actually nail in the beams. Probably a cost savings, or a profit improvement, or a mistake. Hey, mistakes happen. When I was unsure about keeping the house I was very unsure about fixing the fence. Now that I get to keep the house I have a much greater incentive to protect my garden, and especially my fruit trees from the cute, rapacious deer. A new full fence cost too much; but, 16 feet of wire deer fencing, some metal posts, and some cast-off wood lattice replaces very stout and opaque with hopefully stout enough and obscured enough to discourage four legged marauders. DSC_4910

Fixing the fence kicked off more of a celebration than getting the documentation for the mortgage modification. The paperwork is more important, but the fence is tangible and hopefully means I’ll get more apples and figs (and maybe raspberries from an offered transplant). This year I managed to harvest two apples and six figs. The deer got a lot more than that. And I didn’t hear them say thank you. Since the fence is up I even find myself visiting it late at night to prove that the plants are safe, except from the birds, bunnies, slugs, and snails.

Our economic recovery seems to be messy, too.
Budgets are still based on ideologies instead of practicalities. The banks are still too big to fail. Long term sustainable energy and food production continue to battle with short term extraction and manipulation.
Communities and local governments are ignoring archaic arguments and making necessary changes. People are borrowing from and lending to other people, rather than banks. Eating local is passing from fashion and fad into obvious and ubiquitous.

If we get a bit of good luck, we may find that we eventually evolve into the next phase past recovery, a sustainable future. It is the apocaloptimist in me. I suspect that, as we do, the things we celebrate will seem simple and secondary; yet, a long term sustainable recovery is built from such steps. Let’s celebrate those parts of the journey, rather than waiting for some phenomenal future event.

The plant I’d allowed to dry out, so it would be easier to move if I had to give up my house, responded with a few shoots as soon as I watered it. Now, a month and many waterings later, it grows towards the window in full growth regardless of the past, reaching for a future it is creating, fenced or not. DSC_4914

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My Money And My Life – Reminiscence

It is a big task, and no one else can do it for me. As I’ve mentioned before, now that I have a modified mortgage and a clearer quantification of my finances, I intend to step through the Nine Step Program that helped me retire the first time, back in 1998. It took time then. It will take time now. It was worth it then. It should be worth it now. But, oh, I avoid diving back into the task. Memories remind me that the costs preceded the benefits. Nothing new about that.

Most people spend more time deciding where to go on their honeymoon than they do on how to support themselves financially. Imagine how lives would change if the same effort put into planning weddings went into planning retirements. Both involve major commitments and responsibilities, yet the wedding is ephemeral (though hopefully the marriage isn’t.) Financial planning is unfashionable, seen as a chore, and avoided by most; yet its consequences last a lifetime, marriage or no.

There’s a good chance my first retirement would’ve happened without referring to a program. I’ve always lived frugally. When I made more than I spent, the excess went into diversified stock portfolios. As my net worth increased, my cost of living barely budged – though the ski trips got longer and nicer. The program, however, provided a structure and an authority that provided me with confidence that I was doing the right things and confirmed the timeline. Want details? (Go check out my book, Dream. Invest. Live.)

Most of you readers have noticed that I am no longer retired and am not financially independent. Plans, even financial plans based on mathematics, are also based on assumptions. Bad things happen to people and to assumptions. (Triple Whammies happen.)

Before I launch back into the Program developed by Joe Dominguez, I’ve decided to check my memory of the process by recounting a synopsis I can check against later. The first time through I followed Your Money or Your Life, which has Joe’s Program at its core, wrapped around by Vicki Robin’s impressive narrative. This time I’ll be working from the Guide that is the official repository of the Program, currently stewarded by the New Road Map Foundation, which Vicki also helped initiate.

Skip the Nine Steps. I haven’t memorized them. What I do recall is:

  • Add up every bit of income I ever earned.
  • Inventory everything I own. Touch each item. Itemize it. Record it. Give it a value of what it cost new, what it could sell for at a garage sale, and what it would take to replace it.
  • Calculate my net worth.
  • Compare the income and net worth to see what’s come into my life versus what is left.
  • Calculate my true hourly rate; not what I am paid, but what I am paid minus necessary expenses and divided by the total time it takes to earn my income. Work at improving that number because time is precious and the time spent earning money should be minimized so that money doesn’t interfere with life.
  • Start tracking my expenses, all of them; ideally, down to the penny; realistically to a loser standard as the engineer in me accepts another definition of “enough.”
  • Begin monthly assessments of my expenses measured against my implicit values. Did I receive value for the money and equivalent life hours expended? Emphasize the positive. Decrease the negative.
  • Start tracking my assets, liabilities, and net worth, aiming for the “crossover point” where reliable passive income exceeds expected expenses. (Here’s where I deviated from the Program, but that rationalization / explanation has taken and will take thousands of words. I even wrote a book about it. Nudge.)

Hey, that’s almost like nine steps. Maybe I remember more than I give myself credit for.

The main thing I remember, and the main reason I haven’t begun, is that the first steps are the hardest. Emotionally, it can be tough looking back on a life that has generated hundreds of thousands or more than a million dollars, and then comparing it to a net worth that is less than the price of a new car. The other major task is the inventory. I’m a minimalist, and even I will have to spend days to actually touch and catalog everything I own. One consequence is that a lot of decluttering happens naturally; especially, when boxes closed for years are finally opened again.

The majority of the steps are not as intimidating. One consequence of stepping through the Program is a dramatic diminishment of the emotional judgments that go with money. The net worth of my soul has little to do with the net worth of my wallet. Tracking income, expenses, assets, and liabilities comes naturally for me. Tracking my finances is the same as tracking a company’s finances; which also means the investing part comes more naturally for me than for others.

Having been through the Program once, and having invaluable life experiences since then, I am sure this next iteration will be different. The prime rate in 1998 was 7.75%. Now, it is 3.25% (though the Fed Funds rate is less than 1% as are many savings accounts.) The Internet Bubble had yet to arrive and pop. 9/11 was three years away. And adding the entire list of significant history would take too long and make me feel too old. And yes, I am about two decades older.

Financial planning is important as long as we live in a society that operates based on finances. We all feel it, yet few deal with it. You are welcome to follow along as I step through my plan again, this time less innocent, but also with fewer resources. My personal strategy and the Program’s strategy haven’t changed. Let’s see how much the world has changed.

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Doom And Bloom

The West is in drought, and is burning. The banks are too big to fail, again. The intersection of Asia, Europe, and Africa is in turmoil, as usual. Tonight’s attempt at chili became something else. Okay, that last one isn’t traumatic, but it does point to something a friend has labeled The Trimbath Sanguinity. Great title, and I had to look up sanguine’s definition to be sure. My sanguinity in the midst of my financial turmoil is akin to another new word I’m glad someone invented, Apocaloptimist. Go ahead and feel sorry for Spell Check. The basic concept is simple and counter-intuitive; the world is headed to at least one apocalypse, and everything will somehow turn out fine.

How many apocalypse scenarios do you want? Turn on the news. They’ll deliver a dozen. Climate change went from a warning, to a debate, to reality for coasties, to consequences now playing themselves out inland. And, it’s only just begun. Skip talking about glaciers melting. Now it entire continents and the polar ice cap. The banks just had their report cards marked Incomplete and sent back to do more homework. It turns out that they haven’t reformed themselves as the law requires, and the regulators saw a wide enough gap that they couldn’t look the other way. I’m not going to dive into the travesties of the wars in the birthplaces of civilization. None of them seem to be in good shape, or safe. Purely for brevity I’ll put aside overfishing, fracking, pandemics, and the rest of the list that my brain balks at recalling. Those bomb shelter bunkers from 1950 start to look appealing.

Two sayings come to mind:
There is chaos under heaven and the situation is excellent.
Relax. Nothing is under control.

Believing there will be solutions can be considered polyannic, or counter-productive. A few years ago I began developing a vehicle that would begin pulling plastics back out of the ocean. I was surprised to see how many people were against it. Their argument was that by reducing the problem we’d be reducing the urgency people felt about it. They didn’t want solutions. They wanted heightened urgency, even if the situation had to be worsened to increase the urgency. Their rebukes were public and what private support I had dramatically diminished. Someday, I’ll get around to updating the online version of the design, but work occupies my time for now.

I believe we are witnessing the early stages of scenarios that will impact billions of people. On an individual basis there will be suffering. Sorry, but that’s the case. I’ve already witnessed some, which is implicit in many of my posts. The apocalypse part of Apocaloptimist is probably unavoidable.

I am also an optimist. My optimism is based on that strange occupation called studying history. Every turmoil the human race has encountered resulted in innovation, shifted paradigms, and a more capable civilization. According to DNA regression, the human species almost died out about 195,000 years ago. Some estimates place the total planetary population at 2,000-3,000 people. Prior to that, humans didn’t move around much. After that, we began expanding across the planet.

Each challenge is an opportunity for an advance, and every advance has its benefits and detriments. We’re currently working through the first truly global detriments in almost 200,000 years, and it may be our fault. And we may be the solution.

We witness what’s going on around us, prudently extrapolate in a search for warning signs, and gradually shift the will of a populace to make the right changes. But, simply extrapolating is assuming that everything will continue as it has. The use of extrapolation is a measure of trying to understand, and therefore control the situation. I think we have more than enough evidence that we are not very good terrible at controlling the planet or the entire population or anything besides ourselves – and even personal control has problems in the vicinity of chocolate.

There is chaos under heaven and the situation is excellent.
Relax. Nothing is under control.

I keep apocalypses in mind because I do make some attempts at control in my life. I have such a wealth of Backup Plans because I’m aware of so many scenarios and contingencies. I have a lot less urgency than others expect, though; because, I also know that very little of it is in my control. I am optimistic about the future because so many people are quietly changing their way of life. Without any plan or celebration the other day, those of us at the Langley Coworks noticed that everyone except one rode their bicycles to work or to shop because it simply made sense. (Occupy Your Bike!) Personal finance plans are most useful when they are aware of apocalypse and optimism.

The wildfires in Washington State are incredible. Hundreds of thousands of acres in flame. Fires so large that entire metropolitan areas would fit inside. Six years ago I drove through that area, a year or so after another section had burned through. The hikes I took were through recovering forests. Charred trunks and fresh growth. The color contrasts were magnificent, and the young foliage was exuberant.
My business schedule now means that Sunday can be my busiest day; so, I decided to make lazy man chili. Lazy Man Chili: one big pot plus stock, leftovers, sausage, onions, tomatoes, beans (welcome to my finances), spices, herbs, garlic, and heat. Simmer forever while getting lots of work done. It was a chaotic mess. And it didn’t become a chili. But, what it did become is something I don’t have a name for that turned out to be very tasty with just the right amount of heat.
The day has hit 9pm. It has been a chaotic mix of building fences, helping repair a lawn mower, bicycling for my commute, cooking, working on a museum, a frugality organization, an aerospace blog, considering becoming a member of the community council, and after I post this blog, washing the dishes.

There is chaos under heaven and the situation is excellent.
Relax. Nothing is under control.

And, whether doom is headed this way or not, I suspect a bloom is on its way.
My friend who labeled the Trimbath Sanguinity suggested I give talks about it. If you’re interested, send me a note. Let’s relax and see what the situation becomes.

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My Money And My Life

Clear one hurdle and a new adventure embarks. From what I can tell, I’ve managed to keep my house, get an impressively modified mortgage, and built my business to the point that I can pay at least all my regular bills by working seven days a week. That is an immense improvement compared to last year. I look forward to the next improvement that will allow some ease. Frugality and investing helped me reach financial independence for a while, more than a decade ago. Now, to reclaim it, I plan to step back through that process again. I am confident I can regain financial independence the way I did the first time, but along the way I followed some other steps that systematized the process. A bit of structure is handy, and I will use it. I followed eight of the nine steps of Joe Dominguez’ Nine Step Program, Transforming Your Relationship With Money that was popularized through the book Vicki Robin wrote, Your Money or Your Life (aka YMOYL). Over the next several months I plan to step through those steps again. You are welcome to come along.

For those of you who aren’t aware of Joe Dominguez’s or Vicki Robin’s work, don’t be surprised. Yes, the Nine Step Program is impressive. Yes, Your Money or Your Life is a bestseller. And yet, most people do not want to study, research, or deal with personal finance. In America, despite our fascination with wealth, we have layers of taboos about money. Avoid understanding personal finance, and avoid the taboos. Ignorance is a socially acceptable position. To fully understand the Nine Step Program you have to read through and do the Nine Step Program. It is inherently simple, but that doesn’t mean it is easy. Allow me to poorly paraphrase within this paragraph: money is a thing and doesn’t carry any emotion so don’t give it any, we exchange our time for money so keep in mind that money is slices of a life and therefore precious, respect your value, live according to your values, spend less than you make, invest the rest. Either in the books or directly in the Guides, you can find the rest of the details.

An understanding of personal finance escapes most people. Even without the taboos, messages from financial institutions reinforce the notion that personal finance can best be handled by professionals. In some cases that is true. In many cases it is not. There is no magic formula for managing money, whether managed by professionals or individuals. Decreasing expenses and increasing income to the point that you have enough is not a formula, but it is a way of life. The odd thing is that, as a way of life, it is so uncommon. In some cases, hiring someone else to manage a person’s money is necessary because of lifestyle choices, learning difficulties, a lack of confidence, or a desire for optimization. In many cases, getting enough relies more on understanding personal values than it does on accumulating massive wealth. The person who is happy with living aboard a small sailboat needs less than someone who needs a 4,000 square foot formal mansion on a golf course in Hawaii.

Joe Dominguez was a revolutionary who used conventional investing to live a life based on his frugal values. For more of the story, go to New Road Map’s web site. From what I understand, Joe saw a way out of his job, retired very young, developed and taught the Nine Step Program as a series of workshops and seminars and tapes, which with Vicki Robin’s help became the first edition of Your Money or Your Life, which led to the second edition of Your Money or Your Life. Disclosure: the workshops and such funded a foundation called the New Road Map Foundation

New Road Map Foundation

New Road Map Foundation

where I’ve been board Secretary and am now the Information Manager, and while talking to Vicki Robin about the second edition I was encouraged to write my own story and perspective in another book called, Dream. Invest. Live.Dream. Invest. Live. which came out as the economy crashed and most of my investments subsequently imploded.

Back in 1998 I recognized that through frugal living and prudent investing early retirement was an option. A year or two later a friend suggested that I read YMOYL. It confirmed my assertion, and it also systematized how to quantify the situation. Within months of finishing the book and the program, I was able to reasonably confidently retire from my aerospace engineering career. Then the market boomed and busted. And for health reasons I asked for a divorce. And what had been enough for two to retire was less than enough for one. A bit of patience and optimism almost regained my financial independence, but then the Triple Whammy happened. Several months later my portfolio hadn’t recovered and my job applications were unanswered. Through a lot of hard work and timely advice I was able to build my business and save my house. Now that I know what I owe I have the data I need to step back into the Program.

Throughout all of this, while I may be discussing the Nine Step Program and personal finance, it is easy to overlook the importance of frugality and personal values. I know I couldn’t be in such a positive position without understanding my needs and values. Without those two items, the rest is moot.

The perfect blogger’s approach would be to establish a schedule, demonstrate regular and periodic progress; but the realist knows that it is more important to chronicle such a journey within the constraints of maintaining a job, a home, a place in community, and a social life. I don’t know how long this will take.

I’m not starting from a clean slate. I’ve already read the book. I read and suggested changes to the early versions of the second edition, and ended up in it as a case study. I worked through the entire program, with an unfortunately inauspicious difference of opinion about Step 9 – Investing. I’ve worked through my thoughts enough to write my book, which I continue to have confidence in, though maybe less in the investment environment. I’ve waited to restart until I arrayed some of the data points that I know will be key: my total debt, online banking accounts, and a level of income security that is shaky and about as certain as most people’s.

This time through I plan to use the Nine Step Program that is online, partly because I understand the narrative within the books and simply want to use the structure to support my effort.

Through serendipity I’ve somehow managed to be given my own copies of the tapes, the CDs, both copies of Your Money or Your Life, and of course my copy of Dream. Invest. Live. There’s a progression that I suspect will continue. The double digit interest rates of Joe’s era are temporarily gone. Prices change. The relative expense of food versus fuel versus housing shift. Income has a different character in 2014 than in 1994. The world is further along in the changes we haven’t forestalled. DSC_4850The photo shows one product leading to another, and I purposely left room for more; possibly even a second edition of my book that reflects what was revealed during the recent economic turmoil.

If you think personal finance is dull, I’m not surprised. If you think financial independence is unattainable, you have lots of company. If you want to watch as someone works to attain it – again – stay tuned. If you are willing to embark on your own journey, I applaud you.

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My Mortgage Modification Chronology

The short story: I get to keep my house, and here’s how it happened.

This post will be far less literary than most, but also far more literal and hopefully useful. It is inspired by a celebratory event that I have yet to emotionally celebrate. The title of the key document actually emphasizes the opposite of the outcome. I finally received the Foreclosure Mediation Report/Certification, which is one of the official documents that certifies that I have a modified mortgage. As most folks prefer to hear it, I get to keep my house. I’ve blogged about the process, laying out my emotions along the way in thousands of words. Anyone in a similar circumstance doesn’t have that much free time, nor have any need to live through my turmoils. They have their own. They may, however, benefit from seeing my steps, how long they took, and a few of the imperfections in the process. If you’re going through the threat of foreclosure, I’m sorry to hear it. I navigated my way through. While many outside the process see it as simple as: quit paying your mortgage and either a) get kicked out or b) stay in until they kick you out; the reality is that many people renegotiate their mortgage but it takes a long time and a lot of work. I am lucky enough that Washington State has non-profit services like Parkview Services that helped me immensely – for free. (Be wary of folks that charge a fee. Caveat Emptor.) Here’s my chronology with links to some of the posts. I won’t hand out advice unless it is requested. I suspect that if you read enough you’ll find your own. And to all who provided emotional, financial, and in some cases physical support, Thank you.

The long story:

  • August 2011 My finances are hit with a Triple Whammy. Start looking for a job.
  • May 2012 Hunt for a realtor. Put my house on the market.8199 Cultus Drive, Clinton WA 98236
  • October 2012 Sell my last shares of DNDN and a few others.
  • October 2012 Make a partial mortgage payment.
  • October 2012 Minimalist Garage Sale
  • November 2012 Begin collection calls from the mortgage servicer.
  • November 2012 Stop making mortgage payments.
  • December 2012 Sign up my first major client.
  • February 2013 “The mortgage company just informed me that the house “will go into foreclosure” or “be in foreclosure” or have “a foreclosure notice” as of March 17th”
  • May 2013 Sign up my second major client.
  • May 2013 Notice of Default or ForeclosureNotice of Default May 21, 2013
  • May 2013 Contact and attend Parkview Services‘ presentation. Thank them for the handiest graphic of the entire process.WA Foreclosure Timeline 2012
  • May 2013 Begin months of maintaining documentation of all bank accounts, scanning, and emailing them to appropriate parties.
  • May 2013 Meet with Fannie Mae, Parkview Services attending.
  • June 2013 Begin receiving HAMP style documents from my mortgage servicer
  • July 2013 File a claim (with the aid of Parkview Servicers) with the State’s Attorney General against the mortgage servicer because the Notice of Default was written incorrectly.
  • July 2013 Receive notification of the first Mediation meeting – originally for September, slid until October.
  • August 2013 Keep looking for a job but quit applying so energetically because my own business looks like a better possibility for income, and two years with only one full-time job interview is an impressive hint.
  • August 2013 Receive a Streamlined Mortgage Modification offer within 48 hours of the time when the mortgage servicer requires receipt of the completed documentation.
  • September 2013 My two biggest clients agree to double my hours. One asks for even more time and gives me a raise.
  • October 2013 Mediation meeting miscommunication. Reschedule.
  • October 2013 Mediation meeting miscommunication again. Reschedule again.
  • November 2013 Mediation meeting happens but without the mortgage servicer. Reschedule again. Counselors and mediator decide to pick March 2014 to allow for three consecutive months of business financial data.
  • January 2014 Receive phone call from mortgage servicer asking me about my response to their foreclosure. My response is that, as I understand it, there can be no foreclosure while we are in mediation. Their representative wasn’t aware that we were in mediation. I suggested they go talk to their lawyer.
  • March 2014 Prior to the mediation meeting get a phone call from Parkview Services telling me that a new mortgage modification is being offered at significantly lower terms. I should expect an official document soon. Postpone the mediation meeting until July 2014.
  • March 2014 Begin making trial payments.
  • April 2014 Took the house off the market because a sale at the reduced price would cost me more money than I have.
  • June 2014 Contacted mortgage servicer and Parkview Services because the mortgage modification documentation hadn’t arrived.
  • June 2014 Make mortgage payment as if it was a trial payment because the documents haven’t arrived and the end of the month is approaching. Hope the amount on the check is the same in the documentation.
  • June 2014 Received the mortgage modification documents. Negotiated the proper way to fill them out. Mail them Express to get them there by the end of the month.
  • July 2014 Learn that the mortgage servicer can’t find the documents, though the Post Office return receipt proves they were delivered.
  • July 2014 My half of the official documents are returned to me, signed and stamped.
  • July 2014 The Certificate from the mediator arrives verifying the details of the deal.
  • August 2014 Have yet to receive a proper mortgage statement, but have started fixing the house again anyway.
    My house, my home.

    My house, my home.

    I plan to make this into a presentation. Anyone that wants to hear the story, contact me and we’ll see what we can do. I might charge a fee; you see, I have this mortgage I have to pay off . . .

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News Here Movement There

Believe it or not, I do own stock that isn’t MVIS. MicroVision (MVIS) is a good story, but they don’t have much relevant financial data. GigOptix, that partly embodies a spinoff from MicroVision called Lumera, has better data, reported it, and surprised me with good news. The market decided to ignore all of that and move a completely different stock, AMSC, that had no news and no new data. Investing, logical in the long run, chaotic in the meantime.

Companies buy companies, and an event that gets labeled as a Merger or Acquisition, can really be a takeover or a cheap way to buy talent or patents.

Back about 2007, MicroVision needed some cash and didn’t want to go into debt. They had two main sets of product lines: image capture and projection based on a mirror on a chip, and an incredible suite of products based on a fancy organic material. MicroVision emphasized the Vision part of their name, kept the image based technology, and spun off the rest into Lumera. The short version is that Lumera never succeeded and eventually became part of GigOptix, a high tech electro-optical switching company. I think it was a merger, but more like a takeover. The longer version is in a previous post (UW MVIS LMRA GGOX GIG). MicroVision sold their LMRA shares. I kept mine, which are now GIG.

Tech takes time, and after all of these years, Lumera’s tech within GigOptix’s product line is finally making money. In recent years, GigOptix has grown to making about $30,000,000 in annual revenue, only some of which is from Lumera tech. GIG’s market cap isn’t much more than that. Price to Sales is about one. MicroVision is making about $6,000,000 and has a market cap about twice GigOptix’s. Just based on MVIS’s valuation, GIG’s valuation should be about ten times MVIS’s (5 times higher revenue and 2 times the P/S.)

One reason for MVIS’s higher valuation may be MicroVision’s potential, which I’ve described numerous times (Semi Annual Exercise Mid 2014, Abnormal And Extraordinary Surprises).

High tech companies like GigOptix are harder for analysts to understand. Who cares whether they make a better 60 GHz switch or are one of the few that can make a 70 GHz switch? Evidently enough tech folks care that the company made tens of millions of dollars. GigOptix’s story is similar to f5’s (FFIV). Few analysts understood the technical details, but the technicians appreciated the product and stock that traded at $3 now trades over $100 because eventually they made a lot of money. There’s that benefit of long term investing.

GigOptix’s revenues have been uneven. Analysts like steady growth. Any appearance of chaos is not appreciated. Here was the good news. GigOptix reported 18% revenue growth. Good. They also reported the growth in two other sectors. They were small sectors but the one roughly doubled and the other roughly tripled. I believe those sectors incorporate Lumera’s technology. Very nice.

With news like that, and some nice after hours market action, I expected GIG to rise nicely the next day. As I got up and did my regular check to see if MVIS’s surprise positive announcement happened, I saw that my portfolio was up nicely. It wasn’t because of MVIS. And it wasn’t because of GIG. My portfolio was up because of AMSC. Even the message boards were wondering about the move.

All three stocks have good reason to grow. GIG’s reasons were most current, but the data trend isn’t long enough and the company is small enough that the stock remains overlooked. MVIS’s reasons are based on speculation that good news is about to be announced – any day now – for the last few years. AMSC’s reasons are varied, with one dramatic catalyst being progress in an intellectual property dispute in the Chinese courts. But there wasn’t news there, or from sales; and yet the stock moved.

My investing philosophy has long been Long Term Buy and Hold, and that strategy has been tested in the last few years. The long term has been taking too long. And yet, the fundamental logic of the strategy remains valid, progress is being made (even though it may be overlooked), and my best tactic is to stand still and hold as long as I think the story hasn’t changed significantly. Standing still long enough for persistence to pay can take a lot of work.

Headaches happen when the brain tries to force one world view (the ideal of the long term) onto another world view (the reality of now). I’ve been investing long enough that the incongruity is familiar. I’ve also been investing long enough to know that as much as a stock can be unreasonably discounted for a long time, it can also be granted an unreasonable premium for a long time. The transition from one to the other is fascinating and fun to experience. It apparently didn’t happen for GIG or MVIS that day. Maybe it is beginning to happen for AMSC.

The news was here, for GIG. The movement was over there, at AMSC. I think and hope that the real movement will be then, sometime soon; after which, headaches may no longer be an issue.

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An Impressively Redefined Life – Paul Schell

Today Paul Schell died. Most people will have to do research to learn who he was. Most people will identify him by his job as Mayor of Seattle. On Whidbey he’s as well known for caring about a small town called Langley, a place he moved to and helped shape. Langley, WA July 2013Live and stay active long enough and be known for many things. We get chances every day to redefine ourselves. The people that impress me the most are the ones that take those opportunities and try to make those changes positive.

I’ve lived in or near Langley for nine years. I’ve actually known about and visited Langley since 1980, but it wasn’t until 2005 that I moved to Whidbey Island. Now I live near the southern tip. The county seat is thirty miles up the road. The biggest, and really only, city is about ten miles farther north. (It’s a big island.) World travelers know about the island from two tourist towns: Coupeville and Langley. They’re both good places. (A friend and I have produced videos of both: Langley, Coupeville.) For my first two official years I settled in Langley because, while as nice as Coupeville, Langley had the right mix of businesses that made it possible to live car-free. It was almost as if someone, or some group, had decided to design a place with a grocery, not a supermarket; a theater, not a multi-plex; more than enough bookstores; multiple real theaters for plays within a few blocks; and an awareness of the value of gardens, parks, and architecture.

I also moved out after two years on the advice of someone with many more years in the town. Move to Langley for two years. Get to know an amazing community of engaged people. Then, if you don’t like living in a fish bowl, get out of town. I’ve lived about ten miles out of Langley since then. Sweet as it looks, any small town is a opportunity for the authentic and enthusiastic inquiry into a person’s well-being even if there’s nothing to say and the only person to say it to is a stranger; e.g. gossip. As a single guy I heard too many stories about me, sometimes based on nothing more than someone picking my house to park their car in front of.

I don’t know the extent of Paul’s influence. Most of it was quiet, or at least not grabbing headlines. But as I became more familiar with the town, his name would come up about this initiative, or that contribution. Sadly, I was unexpectedly the one to deliver the news of his death to someone he mentored. Her reaction was immediate and heartfelt. No one I knew treated the news lightly. He obviously hadn’t just retired to Langley.

Transitions are more common because change is less unavoidable. Decades ago it was possible to move somewhere so remote that the news wouldn’t reach, but that doesn’t happen anymore.

Through layoffs, retirements, and friends passing I’m witnessing many people dealing with transitions. Transitions aren’t easy; especially, when identities are challenged. In America, identity and job title are synonymous. I had two major transitions: retiring from engineering in 1998, and getting divorced in 2005. Married engineer is a respectable label, and one that is easy to add into an introduction or into a conversation. Unmarried unengineer doesn’t work, not even for spellcheck; and it only defines the negatives. Eventually I stumbled into a variety of labels that I velcro to myself depending on the situation: consultant, writer, artist, dancer. Consultant is handy in any business setting because it is vague enough to be easily engaged with or passed over without judgment. Writer and artist are handy titles because people have so low expectations of them. If a writer is sober and ontime they are exceeding expectations. Dancer is handy is there’s music playing because, well, come on, it’s fun dancing with a partner.

Without knowing if anyone is writing Paul’s biography, I know that I am impressed with anyone who can move from being the mayor of a major city of near-enough to one million people to being an advocate and enthusiast for a town of near-enough to one thousand people without a publicly apparent problem with ego.

Paul’s passing affected me more than I expected because it was sudden and because I wonder what is going to happen to small towns like Langley as generations shift. Sustaining Small Town Charity comes to mind with renewed emphasis. Small towns are losing young people to big cities because of jobs and culture. Langley certainly has culture but the volume tends to be low and done by 10pm. Langley has jobs but they tend to pay minimum wage and rely on the seasonal tourist traffic. I cheer one response which is Fusion Spark Media’s Kickstarter campaign to bring people and non-tourism jobs to the entire island. Such initiatives are necessary, and are more likely to rely on local businesses and individuals than municipal institutions. A small tax base can result in small efforts which aren’t enough.

We are living longer. A life with a career ended after thirty years can fit in yet another career with time left over. The re- part of retirement is more re-definition, a chance to do something different now that you have decades of experience and hopefully wisdom. Oh, if I was starting out again . . . Well, most of us will. Look at what Paul did with his.

Hey, there’s an idea. Come to Langley and look at what Paul did with his. And not just Paul. Look at what a community can do. Langley isn’t pristine. Anyone who spends more than a week in any place can soon hear the intrigues, meet the range of characters, find the gold and the tarnish. Even so, impressive things happen.

And not just Langley, and not just small towns. As a wave of transitions wash across the country, millions will wonder what to do next whether by choice or necessity. There is plenty of work to do, and amazing people becoming available to do it – or at least to continue on the work of others. An amazing opportunity to respect those who came before, to define new roles in life, and to welcome others to join in. Oh yes, and there will be dancing.

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