It’s Saturday, October 24th!

Spend $25,000 to Save $9,000? by J. MONEY, budgetsaresexy.com. I don’t make quite enough money to have these problems just yet, but it’s interesting to see how the tax code works sometimes, and how the government kind of wants you to save for retirement.

A 23-year-old Google employee lives in a truck by Kathleen Elkins, businessinsider.com. I would definitely do this if my company served breakfast, lunch, and dinner for free. And if they made me work 100% of my waking hours. Relevant Dilbert.

How much is your job really costing you? by Steve, thinksaveretire.com. Unless you live in a truck, probably a lot more than you think. And if you live in a truck because you work 16-hour days, it’s probably costing you more than money, too.

My Three Favorite Really Stupid Reasons Not To Save For Retirement, proceeduntilapprehended.net. I’ve fallen guilty to every single one of these. No more! On a related note, I just upped my 401k contribution, so that’s cool.

BONUS: What I’m listening to this week!

Good Charlotte is in my fall music playlist, and since I’m currently in Oklahoma City and it feels more like fall here than it does in Florida, I pulled out some music that I used to listen to in middle school for all the nostalgia.

Photo: This is why I’m in Oklahoma. My first time climbing a wind turbine, and what a view!

Best of Craigslist

One of the best tools of most minimalists is craigslist, a free online classifieds page where you can sell anything. Quite literally, anything. I’ve used it to sell countless things in order to declutter my life, and it continues to be a powerful tool for me personally. I occasionally even buy things from it! But usually it’s just surfboards, and only when I find a really great deal.

But to some people, craigslist can be daunting. It’s all up to the two parties to agree on a price and a meeting location, and sometimes it can get… weird. But I’m here to alleviate some of that anxiety by sharing my best (and worst) craigslist stories! I firmly believe that most people are pretty normal, and the odds of you entering into a dangerous situation via craigslist are less likely than meeting some crazy on the street.

First, let me quantify “anything”. You can put anything up for sale on craigslist. Provided the price is right, it’s almost guaranteed to sell. For example, when I bought my first house there was some leftover junk that the previous owners left behind. Namely some cheap plastic planters on the front porch and a bunch of cheap wire shelving in the garage. But rather than cart it to the curb, I listed both things on craigslist. The shelving sold for $10 and the pots sold for another $10, and I didn’t even have to take the time and energy to carry this junk to the curb. I also sold a bird bath from the front yard, which I promised the previous owner that I’d keep. However, bird baths are little more than mosquito breeding grounds here in South Florida, so I sold it for $15 to some middle-aged folks who were looking for an Easter present for their grandparents, rather than keep it and shell out money for bug spray.

Not everything is as simple as selling junk from your house, though. When I started my senior year of college I didn’t have a bed (long story) but 6’3″ me decided on a whim to see if there was a such thing as an “extra long” mattress. Turns out, there is! I was in a little bit of a time crunch, but the seller of this “extra long” full-sized mattress agreed to meet me that night… at 10:30. In Easley, South Carolina. (If you’re not familiar with that area then I would describe it as a place where Southern stereotypes are born.) Anyway, a buddy of mine and I piled into his truck and headed out, only to pick up this mattress and box spring out of some farmer’s shed in the middle of nowhere in the middle of the night. But it didn’t have bedbugs (luckily) or smell weird or have any weird stains, and I used it incident-free (sort of, but that’s not related to craigslist) until I sold it four years later for exactly the same price I bought it for. All made possible by craigslist!

I’ve bought two motorcycles, a truck, and my classic Volkswagen Beetle on craigslist too, so it’s not limited to used junk or low-priced items either. I’ve sold just as many vehicles on the site as well. But I recently had a small debacle over a very nice American Fender guitar, which was resolved once I realized the guy was just jerking me around. Just remember: the ball is in your court if you’re buying or selling. You are under no obligations, and you can back out anytime if you feel that something’s amiss.

And sadly, the one downside of craigslist is that most people tend to be flaky. I’m helping a buddy sell an old Kia right now, and maybe one out of ten people who ask about it actually show up.

I’ve had some weirdos buy things from me and then ask me for their money back, but never for a legitimate reason. I’m always very honest with the things I sell, so I’m extremely hesitant to meet anyone once I’ve made a sale. After all, I’m not running a business, I’m just clearing out clutter. Anyway, one guy bought a stereo amplifier from me, and even tested it in my house before buying it, only to text me about an hour later in a rage because it didn’t have a radio antenna. I told him he could buy one for $2 from RadioShack, but when he got more belligerent I just blocked his number.

Probably the worst craigslist interaction, however, had to do with a small motorized bicycle I built as a fun side project in my garage a few years ago. It was basically a beach cruiser with a weed wacker motor on it, and that’s also exactly what it sounded like when it drove past. Unfortunately in Florida these vehicles are not street legal without a moped tag, so I was restricted to off-highway use only. But I’m an engineer and I like to tinker. (That’s my excuse for a lot of things!) Anyway, I got tired of it and put it on craigslist just to see if there was any interest, and someone wanted to buy it within a week of me posting it. Unfortunately, despite asking me multiple times for a manual, they refused to read the manual, especially the part that detailed the oil to fuel ratio for the two-stroke engine. After one day, the engine seized on them and they demanded their money back. Since it was their fault they turned a great motorized bike into a piece of scrap metal, I did not oblige. I did make $40 though, after buying the bike, repainting it, and fitting the motor to it, so it wasn’t a total loss. At least, not for me! Read the manual, kids.

Oh, and I should mention that I use pseudonyms, a fake email address, and a Google Voice number on craigslist to protect myself, and I generally try to meet at a location that isn’t my place of residence unless it’s inconvenient (selling furniture, vehicles, or other large house-bound items). Just remember, ALWAYS meet in person, ALWAYS deal in cash only (no matter what), and TRY to take a friend with you, or at least tell someone where you’re going (but that rule is true of pretty much all parts of life). That last one I definitely made sure to follow when, a few weeks ago, I sold a motorcycle windshield to a bus driver… IN THE MIDDLE OF HIS ROUTE. But anyway, If you follow these rules, you’re pretty much guaranteed to have a pleasant, safe experience on craigslist, all while being well on your way to a more minimal lifestyle!

Photo: My motorized bike, on its first official test drive. By “official” I mean that it was the first test drive after I remembered to put the lock nuts on the engine mount (the first test drive the motor almost fell off) and also after the other test drive where the carburetor fell off while I was going down a hill. It takes a few tests to work out the kinks, but the rewards are worthwhile!

Windfall Profits From Selling My Truck

OK, so I didn’t exactly make money from my truck, but I did sell it. My plan was to take this sum of money from the sale and purchase an index fund (and also use some of it to pay off some extra principal on my mortgage). Index funds are great because they’re not actively managed. They don’t try to beat the market, they just try to match it. You save a lot on fees (versus mutual funds) and you still get the great return-on-investment that the stock market generally provides. At least as long as you don’t panic.

I’ve had luck with a particular index fund in the past. After I sold my first house, I put most of the money I made from that transaction into a fund. Otherwise, it would have just sat around in my savings/emergency account doing nothing. I got pretty lucky, purchasing the fund back in October at a low point in the market and then selling them off in January at a high point in order to put a down payment on the house I’m currently living in. I made 5% on this investment in just over three months. Pretty solid!

This time around, I invested in the same fund but seem to be having opposite luck. I bought it last Monday, right before the stock market took a huge plunge. It’s recovered some, but I lost almost 3% right off the bat. It’s recovered some since then, but if I know anything about these types of funds, it’s this:

DON’T PANIC.

Index funds are good long-term investments, so while they do go up-and-down with the market, they’ll generally make you money as long as you wait it out. The market has already recovered, but it’s still down. I actually took the stock market decline as a sign that I needed to buy more, so I consider this volatility more of an opportunity than a disaster.

My plans for this fund, though, are more medium-term. I still have about $18,000 in student loans (down from $40,000 originally) that I’m trying to eliminate. $16,500 has an interest rate of 3%, and $1,500 has an interest rate of 0.08%. The plan is to put money that I’d use to pay off the loan into the index fund (while making minimum payments on the loan) because the index fund will probably do better than 3% growth. Once it reaches a point where I could pay off the entire debt, I’ll sell the index fund to pay it off.

I’m hoping this strategy gives me the best of both worlds. I’ll get the better return-on-investment by investing in the index fund instead of simply paying off the loan. I’ll have extra capital (from capital gain on the index fund) to pay the loan off. And I’ll eliminate a debt, which is my #1 financial goal at this point. (Not to mention the fact that my cash flow situation will improve without this monthly payment.) To me, this seems win-win. I just have to hope that we’re not actually in a bubble that’s about to burst. If we are, though, I’ll just have to take my financial advice from the most successful book ever to come out of the great publishing corporations of Ursa Minor!

Photo: Who needs a truck when you can have a Volkswagen and an index fund? I used the Beetle last week to take two people and one dog on an adventure in the Intracoastal Waterway. We took my paddleboard and a kayak and tied them both down to the roof. It was actually easier than getting both of them in the bed of my truck! The Beetle did great, too!

Saying Goodbye to a Burden

I did it! I sold my truck. It was somewhat of a bittersweet moment; as it drove off I was reminded of all the great times I had hauling my windsurfing rig to the lake in college or taking it off road in the mountains of Tennessee. I didn’t shed a tear though because in the end, it’s just a thing, and (probably more importantly) my pockets were now stuffed with cash.

I didn’t know if I’d actually be able to sell it. The paint was falling off (I put bumper stickers all over it to mitigate this disaster) and it had 211,000 miles on it, and my asking price was pretty high. I would have taken much less than that if someone had tried to negotiate with me, and what ended up happening was a much better offer than I had hoped to get for it.

In the end, I spent about $12,000 on the truck including buying it, maintenance, and upgrading some things. I owned it for six years, and to make the math easier we’ll say I sold it for $3,000. This is $9,000 net cost, or $1,500 per year, or $125 per month.

However, that doesn’t count insurance and registration. Let’s assume I spent about $1000/year in insurance and $150/year in registration. That adds about $95/month which brings the net cost of the truck to $2,650 per year or $220/month.

BUT! That doesn’t count the fact that this truck NEVER got above 17 miles per gallon in fuel economy. This is where the numbers really get gnarly. I put almost 100,000 miles on it in six years and at these dismal rates, assuming $3/gallon, I spent $17,700 in fuel. Almost eighteen thousand dollars. If I had bought a vehicle that got 35 mpg back in 2009 instead of buying the truck, I would only have spent $8,600. That’s a savings of $9,100 dollars that I could have used to pay down a student loan (or put towards a vehicle back in 2009 that didn’t have paint falling off of it).

After accounting for fuel, at $1516 extra per year or $126 extra per month (using the fuel savings as the cost here, since presumably I would have done that driving anyway) brings the Grand Net Total to $28,000. That’s $4,700 per year or $400 per month, which brings me to a life lesson:

OWNING VEHICLES IS EXPENSIVE. 

Try and find the cheapest, most efficient ones you can. I would like to point out that this could be a lot worse if I had chosen to buy a new vehicle and make payments on it. My personal view, which seems to hold up, is that buying used and paying more for maintenance is cheaper than buying new and hoping you won’t have to, so I did save some there. But still…

I also know that maybe I shouldn’t count the registration cost in the grand total since I would have had to pay similar registration costs on an efficient car too, but if you’ve read my previous posts you know that I almost never owned this truck as my only vehicle. I was paying registration costs for other vehicles at the same time, sometimes as many as three at once (although that was in Tennessee and it only cost me $20 per year per vehicle so that’s not so bad, but it doesn’t help prove my point). I still have three other vehicles sitting in my garage (new motorcycle for commuting, my old motorcycle because it was free, and my Beetle). So, I think this cost should be included.

And I did get a lot of utility out of this truck. I used it move all of my other stuff via trailer at least 5 times (normally from a respected trailer rental place but once I borrowed a friend’s horse trailer to move my furniture, not recommended although it was cheaper), and one of those times was from Nashville to West Palm Beach, so it’s not an insignificant savings.

And… I had a lot of great times in the truck. I was sad to see it go but, like I’ve said before, it’s just a thing. Things don’t define us, they help us. They’re tools that improve our lives. Don’t get caught up wasting money on something just because you’ve previously wasted money on something.

Anyway! Let’s not get all misty-eyed over a vehicle. I had somewhere in the neighborhood of $3k burning a hole in my pocket, and wouldn’t you know it? That’s exactly the minimum amount needed to buy an index fund from Vanguard. So that’s exactly what I did. (More on that later!) And I paid off some extra principal on my house. And I took a cute girl out to lunch (and dinner). Because in the end, every guy imagines his truck taking the two of them out to a really nice place, and that’s exactly what mine ended up doing.

Photo: Off road with the truck in the Appalachian Mountains in South Carolina. It was fun to take it out on the trails in the mountains but Florida is pretty much just swamp which is not as exciting. Better surf though!

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Above: An undisclosed beach somewhere on the east coast where you can still drive on the sand. Air down the tires and make sure to hose it off when you get home. 


Last picture: Back at Lake Jocassee again, during a big drought in 2011 which lowered the lake about 40 feet. 

Saturday Links!

Things I’ve read over the past week that I’ve found that are above and beyond the usual Internet. Enjoy!

Getting Rich: from Zero to Hero in One Blog Post by Mr. Money Mustache. I just stubled across this blog recently, and find the author to be a great person to financially look up to. Already retired, making his money work for him, and generally enjoying life. Everything I want for my own life!

What Does Your Work Truck Say About You? by Mr. Money Mustache. One of my favorites on his blog so far, it inspired me to finally cut the chains tying me to my own truck. My truck isn’t as bad as some of the ones he writes about, but it’s not ideal by any stretch of the imagination.

A Life Worth Waking Up For by Joshua Becker, Becoming Minimalist. Productive people always make time to exercise, because your body is the tool that allows you to do everything else. If it’s not your priority, everything else will suffer as a result. This blog post heavily references another article.

How A Year Of Extreme Frugality Changed Us by Mrs. Frugalwoods, frugalwoods.com. One of my favorite blogs out there, the Frugalwoods continuously break the mold of today’s spend-spend-spend culture. Case-in-point: they assume that any expenditure will make them poorer, and work from that starting point. Certainly not typical!

Bonus: What I’m listening to today!

Photo: A picture from my recent trip to California, a beach where a bunch of seals were hanging out. If you look closely you can see them!

My Most Expensive Weakness

I have a problem. I’ve spent way too much money on cars. When I first started my adventure into living a more minimalist lifestyle I knew this would probably be a big hurdle for me. I’m an engineer, and I like getting my hands dirty working on cars on the side. I don’t want to give this up entirely, but I’ve taken some steps to make sure that I’m living the most efficient, simplest life I can without completely eliminating my cathartic hobby.

First, some background:

My first car was perfect. It was old when I got it, no AC, no power anything, a very basic car. Then I decided I’d buy a motorcycle. I had always wanted one, and I was 21 at the time, so I bought a 250cc sport bike that was cheap for a motorcycle. I crashed it (through no fault of my own) and used the insurance money to pay off some of my student loans (great idea!) and to buy myself a bright red sports car (horrible idea!). I was a college student with two cars. And a speeding ticket. How did this make any sense?

I crashed the sports car. That one WAS my fault. I was out about $2000 from that, and ended up getting a truck. Still had that old car, though, but I towed it to my first real job in Tennessee with the new (well, new to me) truck. My commute in Tennessee was 45 minutes, one way. Mistake. Then I decided I’d buy another sports car, and also keep both my truck and my old car. I got bored of the sports car and sold it, at a loss of about $2500. Later on I found a motorcycle on craigslist for $700 that I thought would be a fun project, but right after I bought it I moved to Florida and sold it and about broke even.

When I got to Florida I sold my old car for $500 to a mechanic. I was sad to see it go but I was realizing that it was time to let it go gracefully. The mechanic took great care of it and I like to imagine it’s still on the road. But then I got dumber and decided to buy ANOTHER sports car. I got bored of that one and sold it for a loss of about $3000. By that time I just had my truck, which after spending a bunch of money on upgrades over the years was boasting a respectable 16 mpg.

At about this time I started thinking about what the perfect vehicle would be. I used to work on old Volkswagens with some of my friends, and they are truly great cars (more later). So I found a ’72 Beetle on craigslist for pretty cheap and bought it, and it’s probably the best car I’ve ever owned.

But the Beetle isn’t the greatest daily driver for me (I drive about 50 miles a day to get to my office which is in the middle of nowhere), so I bought a motorcycle. This is also a great vehicle, it gets about 50 mpg and I got it used at a great price. If I can take care of some of the underlying issues with the Beetle (water leaks, etc) then it might be a pretty respectable daily driver, and I could sell my motorcycle.

But I still have that truck. It just doesn’t fit my life anymore. Not to mention the fact that when I bought my house, it came with an antique motorcycle, and now I have four vehicles. None of us is perfect, but this is clearly not minimalist!

I was justifying keeping the truck because of all the home repairs I had been doing lately, but justifications only last for so long before you realize that you’re just fooling yourself. My truck is now up on craigslist, and I plan on using the money I get from it to buy an index fund (more on that later). I’ve probably spent $12,000 on the truck, including oil changes and repairs (and adding a huge steel bumper and winch which I’ve never really used), and in the end I’ll probably only get about $3,000 for it. It used to be fun to take offroading in the mountains in South Carolina and Tennessee, but there aren’t mountainous trails like that around here in South Florida.

I’ve owned it for six years though, and $1500/year isn’t too bad for all the adventure I’ve had in it… until you consider that I’ve put about 100,000 miles on a vehicle that only gets 16 mpg. Then if you count the ~$8k I lost on other cars, I’d love to have all of that money back, but it’s sunk now. We can only move forward, so selling it is the right decision, even if I’m a little late to the game.

I’m trying to balance the enjoyment I get from working on cars and motorcycles with my minimalist lifestyle. I’m going to keep the Beetle; it’s quite possibly the most perfect car ever made. It’s a very simple car, and I was also inspired by another blog post about turning a small car into a big one, so I’m going to make it work for me.

I’m going to keep the motorcycle too, unless my job moves to a closer location. I’d like to live closer to work, but it’s physically impossible to live any closer than about 20 miles from this office. Since I drive about 250 miles a week, it makes sense to have a simple vehicle for commuiting that gets 50+ mpg. (Filling up costs me about $7. It’s awesome!)

And, about the antique motorcycle: It came with the house, so I didn’t spend any money on it. It has a surfboard rack, so I can get to the beach (which has notoriously difficult parking for cars) and park in subtle places very easily. In Florida, you don’t necessisarily have to have insurance on motorcycles, so the motorcycle is free for me to operate (except about $15/year for classic motorcycle registration). I’m guessing it gets a respectable 30 mpg too, but I can’t tell right now because the speedometer (and trip counter) don’t work. I can sell it for probably $1500, so why not? I like working on motorcycles too!

So that’s my plan. Selling the truck will save me over $1000 a year, and that’s money I can put into my house or to paying down my student loan. I have two other simple vehicles that I have fun working on, that work for the lifestyle I have, and that are crazy cheap to own and operate. I think I’m doing better! And I also have to remind myself not to fall for the sunk cost fallacy, and also that it’s not too late to stop wasting money on vehicles. I just hope no potential buyers are reading this blog.

Photo: My 1972 Volkswagen Super Beetle, using the surf rack to carry a ladder. My truck had been in the shop for four months, and this was taken during that time.