A man who retired at 34 shares a spreadsheet that helped him get there

brandon mad fientist.JPGBrandon, also known as the Mad Fientist.Courtesy of Mad Fientist.

On August 1, 2016, Brandon officially retired.

The 34-year-old software developer and blogger behind the Mad Fientist — who doesn’t use his last name online for privacy reasons — had been planning and saving for years to retire early.

"For the first five to seven years of my career, I wasn’t saving for anything in particular," Brandon told Business Insider. "I was just saving because I wanted a portfolio. Then I learned about financial independence, and I was like, ‘This is perfect. This is what I’m saving for.’"

Brandon, who is married but keeps his finances largely separate from his wife, Jill, an optometrist who isn’t interested in retiring, was talking about the concept of financial independence as pursued and documented by an online community of bloggers and readers seeking to save enough that they can stop working and "retire."

Living frugally and working in rural Vermont, he managed to save and invest about 70% of his after-tax income, and saved enough to leave his job in spring 2014. However, when he approached his employer with the news he’d be moving to Scotland to be closer to his wife’s family, the employer offered to make his position remote.

That change eliminated all of the things that frustrated Brandon most about working life, like commuting, dealing with difficult coworkers, and navigating endless meetings. So he stayed on for a few years more than planned, intermittently traveling with Jill until they relocated full time to Scotland in May 2015. There, he continued working, blogging, and saving until he retired this summer.

"It’s always been about ‘financial independence’ for me and not really ‘early retirement,’" he told Business Insider. "I never wanted to stop working, but rather I wanted to have the time and freedom to work on things that are important to me.

"It’s a very powerful position to be in, to be able to do things without worrying about the monetary reward, so I imagine I’ll be more productive and make a far greater impact on the world now that I don’t have to trade my time for money and don’t have money driving my decision-making."

On Mad Fientist, Brandon offers a free, downloadable Excel spreadsheet to help others calculate when they can afford to retire. It’s not the exact one he uses — since he built this version in 2014, he’s made some tweaks to his own — but lays out the most important factors, accounts, and balances he’s been tracking for years.

Bear in mind that the numbers in the sheet are not his actual numbers, which he does not share. These numbers are for example purposes only.

The blue cells are the ones people can edit (on the interactive version from the website — below are screenshots that don’t accept data) to input their numbers.

He walked Business Insider through the spreadsheet:

Tab 1: Balances

Balances is the finances-at-a-glance tab.

Brandon uses the website Personal Capital to track his spending and saving, and inputs those numbers into his spreadsheet.

At the bottom, he’s broken out sums into liquid and illiquid totals, delineating how much of the above balances are easily accessible.

"Liquid and illiquid is for early retirees because if they have $200,000 tied up in their house, that won’t be counted as income in the future and could affect their withdrawal strategies," he said.

Subsequent tabs draw on the information from the balances tab to make further calculations.

Tab 2: Investments

The chief purpose of the investment tab is "just to make sure my allocations aren’t getting too far out of whack," Brandon said.

He includes cash balances at the top to make sure his portfolio isn’t too cash-heavy, a challenge he said he struggles with to this day.

"I tend to sit on cash," he said.

You’ll notice that the balance in the checking account cells (B4 and C4) aren’t the same as the ones noted on the balances tab — that’s because the credit card balances have been subtracted.

His personal spreadsheet has evolved to include a column of percentages, so he can immediately see which type of investment (real estate or total market, for instance) makes up how much of his total portfolio.

Brandon breaks out the accounts by tax treatment to see which money is easily accessible and which incurs fees or penalties to withdraw. For instance, a saver can withdraw contributions to a Roth IRA at any time without paying penalties or fees because the taxes have already been paid when the contributions were made. Earnings, on the other hand, incur taxes if withdrawn before age 50 1/2.

For the same reason, he distinguishes between before- and after-retirement accounts. "It’s sort of high level," Brandon said of this tab. "A lot of my net worth is actually only accessible after retirement age."

Tab 3: Net worth

The net worth tab, which Brandon said is simple enough that it could probably be merged into another, is meant to provide a "high-level snapshot of your liabilities." The net worth number is calculated by subtracting liabilities (B18 and C18) from assets (B13 and C13).

Tab 4: Averages

You’ll notice the averages tab has a lot of blue cells for data input. That’s because it’s the place to track your monthly spending — and more importantly to get a sense for how much you spend on average and therefore are likely to spend and need in retirement.

Ideally, he preferred to see that his portfolio covered his necessary expenses, which would mean that he could quit his day job at any time, cut out discretionary spending, and still be able to cover his necessary costs.

"Necessary coverage" shows what percentage of necessary costs your portfolio would cover. In this version, it’s 69%.

"Discretionary coverage" does the same for discretionary costs, covered by supplemental income.

"Total coverage" shows how much of your total expenses could be covered by your portfolio and supplemental income combined. Once that percentage exceeds 100%, you’re financially independent. If you don’t plan to have supplemental income, you’d need your portfolio to cover more than 100% of your total costs.

"My strategy was to focus," Brandon said. "As soon as I could cover my necessary spending with my portfolio, then that gives me flexibility. I could quit at that stage by cutting out all of my discretionary spending — it wouldn’t be fun, but I could do it."

The first step, he said, was having enough investments to cover necessary spending. Then, if his supplementary income from side projects could cover his discretionary spending, he’d be all set to leave his day job. He does highlight, however, that this balance was more important in the days before he hit his savings number.

"Feeling trapped versus not feeling trapped in your job does a lot for your happiness, so once I passed that threshold, I felt OK," he said.

The "required drawdown" cell "shows what percentage of your portfolio you’d need to withdraw every year to sustain your monthly spending (based on the current month’s spending)," Brandon writes in his spreadsheet tutorial. "Once this value is consistently lower than the drawdown percentage you’re comfortable with, you’re financially independent!"

Brandon and Jill are planning to do a significant amount of traveling now that he’s retired — her job is very flexible — so one way he uses this tab is to compare the cost of living at home in Vermont or Scotland with life on the road.

Tab 5: FI

The FI tab, which stands for financial independence, is probably the most important one on the spreadsheet. It draws from all of the tabs before it and annualizes monthly numbers.

Withdrawal and growth rates, in blue near the top, can be adjusted by the user.

This tab, Brandon wrote to Business Insider in an email, "is a bit complicated, but what it basically breaks down to is how many more years will you have to work in order to pay for this specific expense in perpetuity.

"It takes your average spending per category from the Averages tab, uses your current net worth value from your Net Worth tab, and your growth rate and withdrawal rate assumptions on the FI tab, and it calculates how each expense adds to the number of years you still have to work."

It’s powerful, he said, because "it highlights that you are actually trading years of your life for the things you buy so you can decide whether it’s worth it or not (e.g. — is cable TV worth another year working in a job you hate?)"

The categorized "Years Until FI" values are added to create the total value at the top, "which is the main number that people care about, because that’s the number of years they have to work until they can potentially retire."

For more information on how to use the spreadsheet, Brandon put together a tutorial available on Mad Fientist, where you can download the spreadsheet for free.

via Business Insider http://ift.tt/2bHwGwI

A behavioral economist explains why it’s okay that you’ll never find the perfect job

women working officeFlickr/DZ Roman

A classmate of mine once asked a professor how and when she knew that academia was the right choice for her.

"I still don’t!" she responded.

I remember being shocked — like an adult is questioning her career choices? Not possible.

Maybe, though, she wasn’t second-guessing her decisions so much as acknowledging that any relatively similar role could have made her happy, as long as she worked at it.

Business Insider recently spoke with Dan Ariely, a professor of psychology and behavioral economics at Duke University and the author of the new book "Payoff," and he talked about the myth of the ideal job.

"What people don’t understand is that we also have the capacity to bend the job to our will," he said.

"So if we see somebody being a good fit for their job, it’s not because this was them, this was the job, and there was a magical matching. It was probably a long process in which the person changed a little bit and the job changed a little bit."

Psychologists call this process "job crafting," or molding your job so that it becomes more meaningful to you. In one classic study on job crafting, some members of a cleaning crew at a university hospital regularly performed behaviors that weren’t listed in their job descriptions, like spending time with patients who seemed upset.

Research suggests that employees who engage in job crafting are happier and perform better than their coworkers who don’t go through this process.

In other words, it’s not that you find the ideal job; it’s that you create one. That might take time, in which you learn more about yourself and about what’s possible at your workplace.

Maybe you decide that what you’re really interested in is helping people develop, and so you move into a management role at your company. Or, maybe you realize that you love doing research, and so you have a conversation with your boss about making time for that task during the day.

Here’s Ariely:

"People have a view that they need to find their ideal job in the beginning, not realizing that we change over our lives. We learn new skills; we adapt; and also the job adapts as well."

He went on:

"It’s kind of a difficult observation because it says, ‘Don’t look for the perfect job.’ It means, ‘Look for a job that is in the general direction of your skills and passion and so on.’

"Don’t worry too much about the perfect fit because if you look for the perfect fit you’ll never find it."

NOW WATCH: A psychologist explains how the ‘IKEA effect’ can motivate people to work harder

See Also:

SEE ALSO: A Yale professor explains how to turn a boring job into a meaningful career

via Business Insider http://ift.tt/2gPFdzB

CSSReference.io is a gorgeous visual guide to CSS

CSSReference.io is a gorgeous visual guide to CSS

The best way to learn CSS is through trial-and-error. You’ve got to write code in order to learn to be a coder. That’s the simple truth of the matter. But it’s always nice to have a helping hand guide you through the often confusing and contradictory technology used to style and illustrate webpages, which is where CSSReference.io comes in.

This site is a comprehensive reference guide to the CSS properties you’re most likely to use. There are a lot of these, like the authoritative and (justifiably) respected Mozilla Developer Network. But what separates CSSReference.io from the pack is that it’s actually rather beautiful.

 

Each property is accompanied with an illustration that shows how it works, which I imagine will take away a lot of guesswork for beginners. There’s no bullshit either. Each one is explained in refreshingly straightforward terms.

cssspec

Some CSS properties are used to animate elements shown on the page. This is a relatively recent inclusion, and was introduced with CSS3. CSSReference.io actually shows these in action, rather than just telling you how they work.

cssanimation

It’s free, and you can check it out here. If you, like me, prefer to learn about things from a dead tree, I’d also highly recommend Jon Duckett’s HTML and CSS, which is a similarly delightful reference guide to the technology.