Heather Lucier Stanley

Flint Hills, headed back to Austin on Monday December 28

Alan and I used to fly to Missouri: mainly because I had three weeks of vacation and we did not want to use my vacation days driving. Now that I am retired, driving is easier and saves money.

Pros To Driving

Cost Savings: Our car is not in airport parking; we are not renting a car in Missouri; and we spend less money eating out during the road trip. Starbucks seems to be our biggest expense: we drank at least 4 Starbucks coffees each on the way to Missouri for the Christmas holiday. I did not keep track on the way home!

Quality Time together: We discover something new about each other each trip. I discovered this trip how much of a caffeine hound Alan is while driving. He typically drinks 1-2 caffeinated cups of coffee a day and this trip he has had 4 caffeinated beverages. I drink decaf most of the time because caffeine makes me jittery and stimulates my digestive system (TMI – I know, but some people like caffeine for that reason, I do not!) I also discovered that he likes to look at his iPhone while he driving. That is when I say, “Is there something I could look up for you?” He is addicted to that thing. Alan gets concerned when I press on the breaks too hard when I see traffic stopping or slowing down. I do react quickly to people who apply their breaks directly in front of me!

Teamwork: I drive from Austin to Oklahoma City – 6 hours driving time. Alan drives from Oklahoma City to Kearney, Missouri – 5 ½ hours of driving time. On the way home, Alan drives more than I do because he likes to drive us out of Kansas City. I do not like to drive in the dark, so that limits me on the way home if he starts out driving.

Can bring more of the things we want to bring: Liquids, food, toiletries. No having to pack liquids, like bottles of wine, in our suitcases. Toiletries did not need to be a certain size or packed in the suitcase.

Saddest Moment: The day of the trip, the garage door leading from the house into the garage was open. The car door was also open. Joey jumped in the car. Alan approached the car from front passenger side. I approached the car from the rear driver’s side and when Alan would open the door on his side Joey would go into the back and when I opened the door in the back Joey would go in the front. He did not want to get out of the car. He wanted to come with us.

Funniest Moment: The funniest moment on the Christmas trip headed to Missouri was when I was driving just south of Ft. Worth and I turned the radio onto a song by Billy Cunnington with the lyrics, “God is great, beer is good and people are crazy. “ That made both of us laugh!

Sweetest Moment: Looking at the Teddy Bears together at Starbucks in Emporia. I collect teddy bears and I want the Starbucks Christmas teddy bear. On the way home Alan remembered and bought me the bear on sale at the Starbucks in Ft. Worth! We know Starbucks well.

Nicest Starbucks this trip: In Edmond, Oklahoma at 15th and Bryant. Edmond appears to be a nice suburb of Oklahoma City. The Starbucks was 2 miles off of the highway in an upscale shopping center. It seemed to be the preferred hangout for high school boys and their girlfriends or amongst girlfriends, drinking coffee. Lots of cuteness!

Neutral:

Weather on the trip from Austin to Kearney: Temperature from 73 degrees in Fossil Creek, Texas (approximately 12pm) to 42 degrees in Kearney, Missouri (approximately 9:30PM). Daytime sunny in Texas and Oklahoma. Night and light rain in Kansas and Missouri. On the return trip, the temperature stayed around 35 degrees most of the trip. Snow in Kansas, Oklahoma and North Texas! But, fortunately, it was not snowing on the way home!

Cons:

The duration of the trip! It takes about 5-7 additional hours to drive than to fly. Definitely a better activity for people who have flexible schedules and vacation days to spare!

More dangerous. I saw a statistic years ago that driving is more dangerous than flying.

our house 9 years ago

On December 18, 2000, we bought this house pictured to the right. In February 2008, within seven years and two months, we paid it off.

How we paid off our house quickly: Live Below Your Means – House Hunting.

Why we will not buy another property: Property Tax.

How to increase your retirement income without selling your dwelling at retirement: Retirement Savings.

This book changed my thinking: The Millionaire Next Door.

our first photo together, 10 years ago, time flies!

Save! Save! Save!

If you work for a company that has a 401K, max it out every year. In 2009 and 2010, the limit is $16,500. For people over 50, you can contribute an additional $5500 catch up contribution! If you have company matching, you’ll even have more money saved.

I am not as familiar with the rules for 403(b) plans, railroad retirement, teachers retirement, military retirement, or retirement options for individual business owners. You’ll need to educate yourself on the rules for your individual situation!

Every year for 13 years I contributed as much as I could in my 401K. Early in my career, I probably averaged $5,000 – $6,000 in savings each year. Later in my career, I saved at least half of my salary most years; some pre-tax, some post-tax! My employer did not restrict contributions; some employers restrict contributions to a percentage of your salary. You must learn about your employer’s rules!

I’m earning money not working. My money is earning money.

For retirement, you want to get to a point where your money is earning money.

Alan nicknamed me Spreadsheet. I enjoy spreadsheets and calculate projected investment growth on Excel spreadsheets – it excites me more than shopping, really. Shopping returns pleasure and no money. Investing returns pleasure and money.

I am conservative in my calculations: 3% for inflation; 5-6% average return in the stock market per year, accounting for peaks and valleys! Compound that over 25-30 years and we will not need to sell our house for Alan to retire! Houses are not investments; they are places to live!

My calculations do not include what Alan has saved for retirement or what he is saving now. I like to think that one of our retirement nest eggs will be “gravy” – extra unaccounted for money. Surprise Money! It is another conservative ploy on my part. Why have to rely on both of our retirement accounts? What if I miscalculated somewhere? I am all about financial risk mitigation!

If I decided to work again for the thrill of investing in the stock market, I’d be performing the best risk mitigation of all. I could take some larger risks in the stock market and possibly make even more money. But I am enjoying my time off. So I’m not going to consider working right now.

If, however, I did work again to support my stock market gambling, this blog would evolve into Heather’s “Play Money” Investing Strategy. You could follow me as I picked stocks and gained or lost in the market. The new tag line for retirefly would be: gambler in the stock market. Might be a fun gig for half a year until I ran out of vacation days! Quality of life for me is spending as much time with family as I can while we are all in good health!

Invest Young! Have Your Money Work For You!

Phoebe and Joey

If you have dogs or cats, what do you do when you go on vacation?

The cost of kennel boarding adds up fast! I just checked the new rates at one of the Austin locations where we have boarded our dogs: for 7 nights for 2 dogs, it is currently $364! OUCH! Think of what else you could buy with that money or how you could save it!

So what are alternatives to boarding dogs or cats at a kennel?

Trade Pet Sitting. We have many friends who ask us to watch their dogs and we ask them to watch our dogs. This has saved a lot of money!

Trade Babysitting for Pet Sitting. I babysit for dog sitting services! I enjoy babysitting and it allows me to return a favor to our friends who have dogs who may not travel as much as we do!

Hire a Professional Pet Sitter. Alan and I go on vacation a lot! In 2010, we have at least 9 trips planned already and another 3 trips that may or may not occur. That is a lot of travel! Because we travel frequently, it is sometimes wise that we hire a professional pet sitter. We do not want to take advantage of our friends! For 7 nights for both dogs, the professional pet sitter charges $126! A bargain compared to the kennel!

Happy Pet Sitting!!!

One of the benefits of having a blog about retirement is that I have thought more about day-to-day savings. I have always saved for retirement, but what about day-to-day savings?

It is easy for a group of girlfriends to get together to talk about shopping: what they bought, what they intend on buying, and what they are wearing: “Where did you get your top?” “Great sale at GAP!” “Check out my new jeans!”

Spending is sexy. Corporations have made spending sexy. Marketing lures us in. And we buy, and buy and buy!

Saving is freedom! Why don’t we talk more about saving? As women. As men. As a culture!

My girlfriends and I have started talking more about saving: “I bought this crib off of Craig’s List.” Why pay full price? “I cut down on my use of paper towels!” That got me thinking about how many paper towels I use! “I freeze bananas before they go bad!” Great idea!

Open up dialogue with your friends about saving. You’ll learn from them; they’ll learn from you. And you’ll all be richer!

Before seeing a movie in the theater, ask yourself, is it worth the money to see it in the theater?

Until recently, I did not ask myself that question! I was impulsive! “Let’s go see a movie!”

We spent many Friday nights at the movie theater. At one point, over the summer, we had seen every movie at the theaters that we had wanted to see and had to wait for the “Next Release Date” before we could return to the theaters again. Movie Theater Addiction! That is when going out to the movies evolved into Friday night, Saturday night and Sunday afternoon entertainment!

Movie theater costs can add up quickly. For food and tickets at a national theater, it can easily be $30 for 2 people to go to the movies! In Austin, we have a theater called Alamo Drafthouse. This theater serves beer, wine and full meals: hamburgers, pasta, pizza, entree salads, etc. We easily spent $50-$70 an evening on movie tickets, food, alcohol, tax and tip, if we went to the Alamo Drafthouse! I always justified it, “It’s cheaper than an expensive dinner!” Yeah, but it isn’t cheaper than not going to the movies!

Alan and I discussed this topic of going to the movies in the car ride to Kansas City. He feels that if it is a movie he really wants to see, we’ll see it in the theater. He said if he doesn’t see the movie in the theater, it is highly likely he’ll never see the movie!

My approach is slightly different. I’m going to ask myself: Do I really want to see this movie in the theater or can I wait for it to be released for TV? I do watch movies at home! Retirement Entertainment!

If I have a girls’ “movie night” social outing, I am going to the theater with my girlfriends to see whatever movie it is we’re going to see! In the interest of saving money, I am not going to deny myself girl bonding moments! That is where frugality goes to far.

Richard's pork ribs

If you have a destination that you visit which is within a day’s driving distance, I advocate driving.

We drove from Austin to Kearney, Missouri for the Thanksgiving holiday. It took us approximately 13.5 hours with frequent stops. We left at 6AM and got to Alan’s parents’ house at 7:30PM.

What was our cost savings driving round trip versus flying round trip? Approximately $450.

Could we have flown? You betcha! Money is not tight.

Why didn’t you fly? Because financial freedom is To Live Below Your Means!

How many times will we travel to Kansas City in 2010? At least 6 -7 times! We have a lot of family in Missouri and several events: a baby shower, Easter, a wedding reception, a 60th wedding anniversary, at least one football game, and Thanksgiving and Christmas!

What is the total cost savings over 6-7 trips? Approximately $2700 – $3150!

Health Insurance is an important consideration before retiring.

I have heard of people in their 50s who have thought about retiring and could retire, if it were not for having to pay a lot of money for individual health insurance! I am not going to lie: our health insurance coverage has changed from the health insurance that I had in Corporate America.

The employer-provided health insurance coverage where I worked was better than the health insurance coverage we have now. However, our current health insurance is adequate and any out-of-pocket medical costs that we have had to pay have been minimal.

If one of us started experiencing health concerns which may require better health insurance coverage, I would (1) reassess our current health insurance coverage, and (2) consider a second career in Corporate America!

Conserving savings is important. If you do not need to use savings for health care costs, why would you? For individuals and families who have health issues and have adequate employer-provided health insurance, I advocate working for health insurance even if you can retire!

If you are considering early retirement and need to look for independent health insurance because your health insurance is no longer employer-provided, do some research on independent health insurance and ensure that you will be approved for it before you quit your job! I did not ensure that we would be approved for independent health insurance, but now that I have been through the process, I know that I should have!

Employer-provided health insurance did not require (1) long questionnaires and (2) having medical records pulled. Yet, when we signed up for independent health insurance, we had to disclose everything to the insurance company; in addition, the insurance company pulled our medical records and quizzed us on prior doctors’ visits that we had forgotten about. So, you went to see a chiropractor, etc. If either of us had any major medical issues, we may not have been covered. That is scary!

pink rose in my garden

Did you think about property tax before buying your house? We did not!

Do I wish we thought about property tax before we bought our house? Yes!

In Texas, without state income tax, a lot of revenue is generated from property tax. In Texas, it is better to be Income Rich and Property Poor.

On a $258,100 house, our property tax is approximately $5200 each year. That is a lot of money to be giving to the government each year.

House values are not a big secret in Travis County. See for yourself: Travis Central Appraisal District.

After paying off our house, did we consider buying another property? Yes! In Kansas City, Missouri; the property tax is lower in Missouri.

Will we buy another property? No. I do not like the expense associated with another property. Our money yields a better return in the stock market! And in the stock market, it does not require me to have a career to support it!

People do not think about property tax as much as they should because an escrow account is typically established by the mortgage lender to hold onto the property tax and insurance money. We never had an escrow account. We always paid for the property tax and insurance separately. I saw the tax bill and insurance bill each year. OUCH!

How To Keep Your Property Tax Lower:

1) Live Below Your Means – House Hunting
2) Invest in the Stock Market instead of a larger or second property
3) For Texas homeowners, apply for the Homestead Exemption; for all others, research your state’s laws!
4) Protest your taxes!

burgundy dahlia in my garden

When we bought our house in December 2000, Alan had a plan: To pay off the house early. Neither of us likes debt and house debt is the largest debt that most people have!

Is a mortgage loan good debt? Yes, compared to credit card debt and car debt. You betcha!

Is any debt really “good debt”? No, because you are paying somebody to carry your debt.

When studying tax accounting I got interested in the term: social engineering. I define social engineering as the way an individual or organization convinces people to behave in a certain way. The government wanted (and still wants!) people to buy houses (economic boost!), so it created laws to allow people to write off mortgage interest and property taxes on their Schedule A.

Have you done the math on How Much You Pay The Bank To Carry Your Mortgage Amount Each Year versus How Much Additional Money You Would Pay The Government Each Year if you did not complete a Schedule A?

I did! The difference was huge! The bank comes out ahead!

When I calculated our individual situation, I thought: Do I want to pay the bank $5000 in interest each year or the government an additional $800 in income tax each year? Easy solution: I wanted the additional $4200 in my pocket each year.

In February 2008, Alan and I paid off our house! In April 2007, after my Shop Til I Drop phase ended, I started putting my entire salary – after retirement savings! – to paying off the house! With some additional savings – some emergency fund money – we paid off the house!

How do I feel almost 2 years later? Fabulous! We do not have house debt. Because we do not have house debt, Alan felt comfortable with me quitting my job in Corporate America. It took a lot of financial burden off of both of us!

How Do You Pay Your House Off Early?

1) Live Below Your Means – House Hunting
2) Do the Math! Bank Interest versus a little Extra Income Tax To the Government
3) Make paying off your house early a financial goal. Yet still save for retirement first!