errantember

So here I am, a year and one Burning Man after quitting my corporate job. In that time, I've traveled to four Burn events and Hawaii, gotten my first free and first for-pay App into the App Store, managed my money well, and I have reached my goal of coming back from Burning Man with 6 months of money in the bank.

My intention is to remain self-employed, travel more, continue reducing my expenses, and earn enough money from my own efforts to make real progress toward financial independence. One thing I learned from my mother is that it's a really good idea to have six months of money in the bank as an emergency fund. That means that I'm basically living on my emergency fund right now. I have a bunch of stuff to sell that will net me another month or two, and I also have some extraneous retirement income that I never integrated into my main 401k account that I could tap in an emergency.

The big question now is, do I continue working on only my own businesses and damn the torpedoes, or do I set a cut-off date for months-in-the-bank when I start looking for part-time work to keep me afloat longer? Having a Plan B seems like the Responsible Choice, but, as Seth Godin has observed, having Plan B often means taking Plan B instead of accomplishing one's primary goal. The worst-case scenario would be that I no longer have enough money to pay my mortgage, and am forced to sell my house. While I would like to keep my house, I'm already moving in a more nomadic direction, and I'm completely capable of being happy without it. The equity I would cash out would be more than enough to buy a small RV and still have enough money for another year without having to work.

I'm suffering from a small demoralization at the moment, because while I do finally have my first for-pay App in the App Store, I've made effectively nothing from it so far due to a combination of first-time-quality and non-existent marketing. Moving forward I'm going to get interested parties involved in the development process early, so I have a guaranteed number of minimum purchases when I publish. I will also be co-developing games with friends that already have established networks of followers for the same reason.

The main thing I'm getting out of Thinking Out Loud on the Internet is that what I really need to decide is at what point I need to put my house on the market. I need to still have enough money to do whatever repairs would be necessary to get the maximum amount, plus enough to pay the mortgage until the sale. It looks like it's time to start researching how long it takes to houses to sell in my neighborhood, and keep an eye on that number. It would also be good to start any longer-term repairs and upgrades. It's important to realize, though, that with my roommates covering most of the cost of my house at the moment, even moving into an RV will mean an *increase* in my monthly living expenses, not a decrease. However, it would greatly improve my ability to focus as I would no longer have the substantial work and stress of being a landlord hanging over my head. Another option instead of selling the house would be renting it out, which would allow me to continue to build equity and have a back-up place to stay in an emergency. I might even make it part of the rental plan that the RV remains at the house, while the new residents live inside.

I'm finally working on my 2011 budget, which is the linchpin of the rest of my plans for the year. How much money I need to make and when, how often I can go on vacation, at what point various important projects and events can or must occur, all come from my budget.

I used to hate budgeting, and it can still be somewhat of a chore, but the ability it gives me to shape my life, and the security of knowing what the future holds for me financially makes it all worthwhile. The way it allows me to plot a course for my life is pretty remarkable, especially for Americans who get so little education about practical money matters and are so driven by The System to spend without control.

I'm definitely not done yet, but the good news is that I still have more than 12 months of money in the bank. It's tracking closer to 15 months right now, but I know there are items I want to add that had been missing from my previous budget and ended up coming out of my Food and Entertainment allotment, which became kind of a catch-all for things not paid for elsewhere. I feel a bit guilty, as 2010 was a very good year for me financially. I worked a corporate job for 6 months to save up some cash, and made a fair killing in my retirement portfolio, which is up 50% from the beginning of the year.

Once this is done enough to start planning, I can set a launch date for my first iPhone app, start selling a bunch of stuff I want to get rid of on Ebay, and try to figure out when I'll be able to start and finish the renovation of the Master Suite, which will net me another $300/month. This year I'll also be tying into my longer-term plans, including how I'm going to increase my passive income to eventually pay all my bills, and how my goals now tie into my retirement plans.

I got the official title to the Metro today, so it's 100% legal and 100% mine!

I've made it through two technical phone interviews and have an in person interview later this week for a great job that will make me a legitimate contractor and allow me to travel more.

I fixed the ice cream machine. It was leaking because it had several metal parts that were exposed to the mostly-salt-water freezing gel. I coated all effected parts with a heavy polyseal for floors, re-filled the gel compartment, and re-assembled it.

The blueberry sherbet is finally en route. It's in Phase One cooling in the freezer right now.

The paperwork for my Grandma's will showed up, and once everyone signs and returns it, I'll be getting another two months of money in the mail.

I polished my money frogs and dragons, and added a new gold dollar coin to the one in the kitchen.

I made a *lot* of progress cleaning up the remodeling garbage in the living room, and the floor looks great!

I'm learning Ruby, but promise not to become an asshole.

No, it's not spam, it's my financial reality!

I just paid off the last of my student loans five minutes ago. The only remaining debt I have is a few hundred in credit cards that I pay every Sunday, and my home mortgage. On the advice of my mother, I'm currently reading The Total Money Makeover by Dave Ramsey. I've kept a food and entertainment budget now for over two years, and I try to keep my checking account at the same level, but generally don't have a comprehensive budget. Now I'm going to set one up, as well as stop borrowing money for things I want to buy. The house will be a little more complicated, as my intention is to sell it to the coop when I'm ready to start it as a legal entity. That will mean getting a loan from a place that will loan to coops, which have a very bad reputation for folding.

Think your house is an asset? Find out why you're wrong by reading this insightful and disturbing book about the differences between the financial knowledge and behavior of the rich vs. the middle class and the poor. Robert Kiyosaki compares the financial advise of his poor but well-educated biological father and that of his poorly educated but financially savvy best friend's dad. The book points out the real difference between assets (which make you money) and liabilities, and the deficiencies in financial education in the modern school system. This book is the first step toward becoming financially literate enough to understand when and how to invest in real-estate and businesses, and will change the way you look at money. Mr. Kiyosaki's dedication to the financial education of children has earned him a place on PBS.

Easy to read and well illustrated with simple diagrams and very few numbers, this book shows how the rich set up income streams and make money work for them rather than the other way around. It's main point is that (similar to relationships!) we learn virtually nothing about the way money really works in school, and that the only thing standing between the average person and a number of very accessible means of becoming financially independent is gaining a basic financial education. I'm currently reading the next book in the series as well as several books listed in the bibliography and taking the first steps toward getting into real assets that will produce money for me without my direct intervention, in the form of stocks and real-estate. I'm also working on getting a copy of Cashflow 101, a monopoly-like financial board game that claims to teach exactly the skills necessary to better interact with the financial world. Once I've got it I'll be interested in playing it with my friends to see what we can learn. I'm intrigued by the idea of using a game to learn subjects that might otherwise simply be too boring or involved to be worthwhile. I'm less intrigued by the game's $200 list price (no wonder he's rich!) but am working to get a cheaper copy through other channels.