Mixing Maroons - Spend Less, Save More … Get Marooned!

Mrs. Maroon

January 5, 2015

Look Back at 2014 and Ahead to 2015

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I’ve really enjoyed reading all of the recaps and goals set by fellow PF bloggers. Each time I make mental notes of our past year and plans for the coming one. But those mental notes don’t mean a thing until I let them escape my brain – you can’t read my mind as much as Mr. Maroon can’t read it, despite all of my dreams that he will suddenly acquire this super-human power. So, without further ado, I present my fashionably late brain dump post…

 

We discovered the concept of financial independence / early retirement in mid December 2013. We were completely captivated (after just a little bit of convincing) by the idea and set out to reform our outlook in life to one of true happiness.

 

Finances in 2014

With our new outlook to life at the forefront of our minds, we actually prepped for our 2014 in December – we paid off the balance of Mr. Maroon’s student loans, to the tune of over $17,500!! Then we sat down to create a master plan for how to attack the year and make the dream of FIRE a reality – specifically accumulate $1.5M in cash and investments to retire in 2030, when Mr. Maroon will turn 50. Our primary goal at the time was to re-establish and build the emergency fund we had drained to pay off the student loans – a target of $30,000. Well, then we got smart…

 

After devouring as much information as we could from other PF bloggers, we quickly realized we were silly stupid idiotic for socking away that much money in a savings account. We needed to get those babies working, and working hard, for us.

  • First, we quickly consolidated and rolled all of our old IRA and 401(k) accounts to Vanguard – that is after we found all of them!
  • Then, we opened a Betterment account to start some taxable investments. We also created a second account for the kids.
  • After watching the retirement accounts perform well at Vanguard, while the taxable not so much and with higher fees, we switched everything over to Vanguard. We took a bit of a hit in selling out so quickly, but wanted to make a clean break and consolidate for simplicity.
  • We also abandoned the idea of a separate fund for the kids. We already have a 529 Plan set up for college. Everything else can just be absorbed into our general spending.
  • We send extra principal to the mortgage as a tax shelter for when we move again.
  • Although we have always (used very loosely here, since we’ve only been investing for a year) considered the best approach to use total market index funds as our investing vehicle, we decided to go out on a limb to buy into an energy-sector index fund. The lure of getting in at ultra low oil prices was enough for us to change our strategy a bit.
  • Since we knew we’d be accessing our money before the magic retirement age, we focused on the taxable account and only contributed the bare minimum to our 401(k) to get the maximum employer match.

 

After a great start to the year, we decided to shake things up… Mr. Maroon was approached by an associate from work to change jobs. The new job would come with greater responsibility and career growth and the opportunity to work in the agricultural engineering industry – his true desire. So, we packed up and moved 300 miles north to Oklahoma. We took the equity from our house in north Texas to pay off the mortgage on our 155-acre property in west Texas, what we affectionately call our beach – after all our retirement goal is to get marooned!

 Sunset on the beach...


Sunset on the beach…

 

Throughout all of this, we trimmed our spending to invest every spare cent that we could find. We continued to educate ourselves by reading all of the wonderful ideas from our fellow bloggers to optimize our investments and long-term strategy. After the dust settled on the year, we increased our endowment by over $52,000!

 

Our quest for knowledge also led us to revise our master plan. I’ll let Mr. Maroon give you all of the details very soon, but we basically trimmed our spending such that our new target endowment is closer to the $750,000 mark with a deadline of 2020. You might be thinking that it’s an incredibly aggressive change. I’d agree with you. But our constant evaluation of our current lifestyle has led us to accelerate the master plan in an attempt to start living the life we really want.

 

So What About 2015??

The targets for 2015 are pretty straightforward…

  • Max out the 401(k) contributions. We have learned more about how to convert these funds to be accessible prior to retirement age (thanks to Mad FIentist!) so we intend to take full advantage of the tax benefits.
  • Max out IRA contributions. We will be using Roth IRA accounts because our Adjusted Gross Income makes us ineligible to deduct the contributions.
  • Sell the semi-investment property we own in north Texas. Long story short… We bought a house for Mr. Maroon’s parents near us right before Mini Maroon #1 arrived. Life has changed a lot since then, and it’s time to shed that investment. Our (small) gains from the sale will go straight into our investments (I know that’s shocking to you!)
  • Monitor spending very closely to find areas for improvement and increase our savings rate even further.

After working through some budgeting, we plan to contribute $58,000 to the endowment in 2015 (plus the property proceeds mentioned above).

 

On a Personal Note

2014 was a big year for us on a personal level also. With new jobs and a new house, we also expanded our family by one. Since arriving just over three months ago, Mini Maroon #2 has taken hold of our hearts. And even more fun is to watch Mini #1 love on his sister baby. In fact, I have to compete with her for night-night kisses. He’s more eager to give the hug – kiss – noses routine to her than me. Melt. My. Heart.

 

We also delved into the adventure of blogging. I find it to be a wonderful outlet. I’ve never considered myself to be particularly creative. So I’m thrilled that this little project seems to have awakened a creative spirit in me. I’m not always the most consistent with it (as evidenced by writing my 2014 wrap-up on January 5th) but I intend to increase my efforts for 2015.

 

Looking Forward

Now that I feel a bit like my head is on a swivel, after looking forward and backward so many times, it’s time to focus on the road that lies in front of us. With the happiness to be gleaned from our FIRE goal planted firmly in our (near) future, we will keep marching steadily in that direction. Although the details of that original master plan have changed, Mr. Maroon had the foresight enough to add the caveat to remain flexible. Above all else, we will find the most success in making a plan for the future, while rolling with the punches dealt to us. I firmly believe that 2015 will be our best year yet!!

 

~ Mrs. Maroon

The Master Plan Revisited
A Christmas Brag
  1. Comment by Robin @ The Thrifty Peach — January 5, 2015 @ 1:58 PM

    I love your story! It’s very motivating. 🙂
    Robin @ The Thrifty Peach recently posted…My Latest Obsession: Tiny Houses!My Profile

    Mrs. Maroon Reply:

    Thank you! I really enjoy reading about your pursuits also. Still jealous of your chickens! And will be putting sourdough bread on my to do list.

  2. Comment by Mrs SSC — January 6, 2015 @ 6:32 AM

    What a great wrap up of your year! I totally agree with the concept of being flexible – I think that is the key to success in almost any situation. I am also impressed on how drastically you were able to cut your endowment goal in half! I would love to hear details of what changed in your thinking. I’ve only been able to trim $100,000 off of our initial plan… and I would love to trim more so that we can trim another year off!
    Mrs SSC recently posted…Early retirement failMy Profile

    Mrs. Maroon Reply:

    Flexibility is crucial. and something I’m terrible at – I like knowing exactly how something is going to happen or turn out. Having children has relaxed that though. Wow, they can be unpredictable! I promise that the new master plan will be coming soon. Mr. Maroon is the brainchild of the plan so I will let him explain.

  3. Comment by Cat@BudgetBlonde — January 6, 2015 @ 8:16 AM

    Yall have had such an amazing, inspirational year. I feel a little stuck myself and the only way to get unstuck is to increase income since hubby still isn’t working yet. All so challenging with the kiddos fo sho but you’ve given me a great boost. Happy for yall!

    Mrs. Maroon Reply:

    Extra work with little ones is really tough. I think the only obvious answer is to just raise your prices! You’re worth it after all!

  4. Comment by Sir Salty — January 6, 2015 @ 12:08 PM

    Great wrapup. Being on a similar learning (and spending-reducing) curve over the past 18 months, I’m interested to hear how your story progresses. I think the goal oriented but flexible approach is wise.
    Sir Salty recently posted…Wilderness (Re)discoveredMy Profile

    Mrs. Maroon Reply:

    Thanks! I’m eager to see how life changes throughout your adventure also.

  5. Comment by Sarah — January 6, 2015 @ 1:23 PM

    Sounds like you had a great year!! Your blog is super encouraging! 🙂 How old are your little ones? I agree, blogging is a great outlet. I never knew I would like it so much. I love the relationships I’ve formed and the fact that I learn so many new things each day from all my favorite bloggers!

    Good luck in 2015! Happy to be following along!
    Sarah recently posted…Thoughts on living in a big houseMy Profile

    Mrs. Maroon Reply:

    Thanks! Looking back at it on paper shows that it really was a great year. The great savings rate wasn’t obvious in our day-to-day lives. We didn’t miss the extra spending.

    Mini #1 will be 3 years old in February, and Mini #2 is almost 4 months old now. Glad you’ll be following along for 2015. And you need to share more pictures of the new house!

  6. Comment by Mr. Captain Cash — January 6, 2015 @ 2:23 PM

    Mrs. Maroon,

    Are you primarily invested in the Vanguard total market index funds with a little bit of energy exposure like you say? I am always interested in other PF bloggers allocations as I also am invested in Vanguard Index funds but have diversified my portfolio quite a bit.

    Thanks for sharing and best of luck throughout 2015!

    Mr. Captain Cash
    Mr. Captain Cash recently posted…Why Your Programmable Thermostat Isn’t Saving You A Dime!My Profile

    Mrs. Maroon Reply:

    The vast majority of our investments are in total market index funds through Vanguard. Based on the limitations of the firms administering our respective 401(k) accounts, we have also done mostly total market funds.

    Almost three weeks ago we took the plunge into the actively managed energy-specific index fund through Vanguard. The energy fund currently composes roughly 20% of our holdings. I’m torn as to whether this allocation will be a long-term strategy or an avenue for some short-term gains. We will see how the market treats us.

  7. Comment by Mrs. PoP — January 6, 2015 @ 7:14 PM

    Your attitude and flexibility is definitely going to make 2015 a wonderful year. Best of luck reaching every goal! =)
    Mrs. PoP recently posted…PoP 2014 Spending SummaryMy Profile

    Mrs. Maroon Reply:

    Thank you! And same to you in reaching your goals for 2015. It’s going to be a fun one!

  8. Comment by Brian @ Debtless in Texas — February 11, 2015 @ 9:17 AM

    Congrats, but its sad to see you leave the great state of Texas, especially for OK. We better hear the hook ’em from y’all up there during the red river showdown this year, the golden hat is coming back to Austin.
    Brian @ Debtless in Texas recently posted…Preparing for a Baby Without Breaking the BankMy Profile

    Mr. Maroon Reply:

    We’ll be back eventually, but we like Oklahoma alright for now.

    As for the other; it’s safe to say you’ll never hear that from us. My two favorite teams on Saturdays are the Texas Aggies and whoever plays t.u.!

    Mrs. Maroon Reply:

    We were a bit sad to leave having lived there our whole lives. But have found good things this side of the river too.

    And just in case we haven’t already made it perfectly clear, we are tried and true Aggies and as Maroon as can be down to our core. As avid college football fans, you will often hear us saying that our two favorite teams are the Aggies and WHOever is playing texas university. We can still be friends, I’m just not going to root for your team. (Though I do secretly hope Charlie Strong finds success – stand up guy)

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