The DFC Fund is now $8954.71.  I made a  contribution of $460.00 to my DFC Fund for December. Below, I have included some for-sale car options that are around $9000.  In addition, I have included a graph showing the performance of the SP500 as of December 29th.

The DFC Fund is now $8498.92.  I made a  contribution of $460.00 to my DFC Fund for November.  Below, I have included some for-sale car options that are around $8500.  In addition, I have included a graph showing the performance of the SP500 as of November 19th.

The DFC Fund is now $7,824.50.  I made a  contribution of $460.00 to my DFC Fund for October.  Below, I have included some for-sale car options that are around $7800-$8300.  In addition, I have included a graph showing the performance of the SP500 as of November 6th.

The DFC Fund is now $7,636.50.  I made a surprise contribution of $460.00 to my DFC Fund for September – I had thought I turned off automatic investments.  Below, I have included some for-sale car options that are around $7500-$8000.  In addition, I have included a graph showing the performance of the SP500 as of September 26th.

Free Workout – no membership costs, and no equipment costs

The ROI is infinite – no cost, the weight is free, no commuting, and always available.  “WHAT IS IT?” you ask.  It is bodyweight lifts.  We all know of at least a few of them, as our gym instructor in high school accessed our grades based on them.  For example, the number of pushups, pullups, dips, and sit-ups were used to gauge our fitness and grade.  I vaguely recall struggling with pushups and pullups and being depressed about my performance.  At the time, I thought that upper body strength was some innate ability – either you are born with it, or not.  Now I know it something that can be achieved through deliberate training. 

            To summarize, the cool thing about a bodyweight workout is that the weight is always with you, literally.  So there is no excuse not to work out.  These exercises will end the naysayers that make excuses like, e.g. “I don’t have a gym nearby”, “I can’t afford a membership or weights”, “I don’t have time”, or “I am always traveling.”  So let us outline some basis for us to begin the best ROI workout.

            First, should I aim for a lot of reps? Probably not. It is better to work on strength rather than endurance. We can use physics to adjust the weight to make the exercise more demanding on the muscle – e.g. pushup (normal), evaluated pushup, one-handed pushup, etc.  Second, do I need many exercises?  Probably not, just focus on the core movements for building strength. Third, should I workout every day?  Probably not.  It typically takes a day or more for your body to recover from a strength training routine – typically, most programs have a Monday, Wednesday, and Friday workout, with the others days for rest and recovery.  Okay, how many exercises are necessary? Maybe 3 -6 per workout, with 3 sets per exercise.  So what are the exercises?

1. Push-ups (builds up chest, triceps, and front delts); handstand pushups (shoulders) 

2. Chin-ups & pull-ups (upper back and biceps) 

3. Pistol Squats (lower body)

4. Crunches, Hanging Leg Raises, Front Lever Pulls (Abs)

5.  L-Sits, and Back Bridges (Back)

The DFC Fund is now $7,256.62.  I made a partial car payment of $460.00 to my DFC Fund for August. Below, I have included some for-sale car options that are around $7250-7500. In addition, I have included a graph showing the performance of the SP500 as of August 19th.


One additional note, I am planning to stop contributing to the DFC fund for several months.  I will continue to update its growth.

The DFC Fund is now $6,613.58.  I made a partial car payment of $460.00 to my DFC Fund for August. Below, I have included some for-sale car options found on eBay that are around $6800. In addition, I have included a graph showing the performance of the SP500 as of August 7th.

More comments on Health and Wealth!

Is it to late for me?

No, never!  Many have reaped the benefits from working out.  For example, Charles Eugster can attest to the benefits for bodybuilding at 93!  He feels great. What would happen if other joined in, all ages, we would have a significant reduction in chronic diseases, decreased medical expenditures, and more to invest.  Further, our brains would be sharper – for more info, check out the book “Spark.” Not to mention more time to enjoy those sweet investment returns with jet-skis, and family trips to the Caribbean or wherever!

Anyways, I drank the Kool-Aid, and I set up my first gym in the basement.  If I can prove to myself, and my wife, that I am all-in then I will upgrade the gym in the future from beginner to amateur. So far, I am three-weeks in and 7 days away from developing a habit – the current view is that a habit typically takes 30 days to form.  In these 21 days, I have dropped 15 pounds of weight and likely 2-4% BF. I plan to invest more time into learning new exercises and what to eat.  I feel that my ROI on this knowledge is nearly infinite in terms of maximizing the quality of life.  I would not want to be a billionaire who is sick and can’t get out of bed.  Therefore, my health should be the foremost thing in my life.  I want to be rich, but more importantly healthy in order to spend my life with family and friends.

GYM 1 (basement) - Beginner bench, weights, stepper, etc. (all less than $300)

Source:

·         Charles Eugster, “Why bodybuilding at age 93 is a great idea”,TEDxZurich, <<https://www.youtube.com/watch?v=rGgoCm1hofM>>

·         John Ratey, Spark: The Revolutionary New Science of Exercise and the Brain, <http://www.goodreads.com/book/show/721609.Spark>

The DFC Fund is now $6,104.40.  I made a partial car payment of $460.00 to my DFC Fund for July.
Below, I have included some for-sale car options found on eBay that are around $6250. In addition, I have included a graph showing the performance of the SP500 as of July 20th.

The Drive Free Car Fund – 1 Year Summary

On July 20, 2015, I began my experiment to invest the amount of a typical car payment into an investment account with the purpose of using the fund to pay for a reliable vehicle in the future based solely on its growth.  I began the fund with a deposit of $613.30, and I planned to invest ~$480 dollars per month over its lifetime.

As of July 18, 2016, I have made the following deposits:

Date	Deposits
7/8/2016	$460.00
6/22/2016	$460.00
6/8/2016	$240.00
5/23/2016	$240.00
5/9/2016	$240.00
4/22/2016	$240.00
4/8/2016	$240.00
3/8/2016	$240.00
2/8/2016	$240.00
1/22/2016	$240.00
1/8/2016	$240.00
1/8/2016	$300.00
12/22/2015	$240.00
12/8/2015	$240.00
11/23/2015	$240.00
11/9/2015	$240.00
10/22/2015	$240.00
10/8/2015	$240.00
9/22/2015	$240.00
9/8/2015	$240.00
8/24/2015	$240.00
8/10/2015	$240.00
7/20/2015	$613.30

And on June 25^th, I withdrew $1,2460.00 from the fund, making the total contributions at $5,147.30.  The current value of the fund is $5,736.32.  Therefore, theoretically I could withdraw $589.02 (the Interest) without hurting the principal that I have invested.  The return on the investment over this period (July 2015 to July 2016) has been 11%.

Below are some vehicle options based on the value of the Interest only. 

Saving Money by Being Healthy!

There is a substantial cost to being unhealthy – e.g. becoming obese based on a sedentary lifestyle can lead to substantial costs in medicine and medical treatments.  Currently, I am living a very sedentary lifestyle and packing on weight.  Shamefully, I ignore my apparent physical changes and, paint a different picture than then my own reflection in the mirror. 

Here comes the wakeup call, the Center for Disease Control and Prevention (CDC) states “[o]besity is a serious concern because it is associated with poorer mental health outcomes, reduced quality of life, and the leading causes of death in the U.S. and worldwide, including diabetes, heart disease, stroke, and some types of cancer.”  And the economic costs to society are high.  In the US, the cost for just medical care alone for obesity were estimated at $147 billion in 2008 – like over 2x Warren Buffet’s net-worth.  Now I know why health insurance is so expensive!  The American Diabetes Association reports that an individual diagnosed with diabetes will “incur average medical expenditures of about $13,700 per year, of which about $7,900 is attributed to diabetes.” That person would be much better off spending the money on healthy food and exercise equipment to extend his or her life.

So what can I do?  The CDC recommends a “healthy diet pattern and regular physical activity.” The diet should consist of “whole grains, fruits, vegetables, lean protein, low-fat and fat-free dairy products and drinking water.”  Although, other researches such as Dr. Atkins would argue a diet without whole grains and dairy are better – e.g. a low carb, high protein and fat diet.  I have never tolerated breads or milk extremely well, and I may opt for more veggies and proteins for the diet.  Further, in terms of a healthy diet pattern, I have implemented a intermediate fasting pattern for eating with a 4 – 6 hour window for feasting, and a 20-18 hour block for fasting. Why?

A Johns Hopkins University researcher, Dr. Mark Mattson, found that “that the normal … three meals a day plus snacks … isn’t the healthiest eating pattern.”  Rather, Dr. Mattson determined that “fasting twice a week could significantly lower the risk of developing both Parkinson’s and Alzheimer’s disease” because “[c]alorie restriction (CR) extends life span and retards age-related chronic diseases.”  There are many other studies and individuals who have demonstrated various benefits to an IF pattern that exceed any benefits to the 3 or 6 meal a day approach. 

In summary, I plan to blog about health in terms of saving money – also, extending my own life to enjoy compound interest!  Currently, using IF alone I have dropped around 8 lbs.  My goal is 188, and currently I am at 210.  I will follow up this blog with my exercise routine – which hasn’t been implemented yet.  I just ordered a bench and weight set for under $70 dollars.  I think this set up will be a great start on my journey to healthy lifestyle.

 References and Additional Reading

https://www.cdc.gov/obesity/adult/causes.html

http://www.diabetes.org/advocacy/news-events/cost-of-diabetes.html

http://www.collective-evolution.com/2015/12/11/neuroscientist-shows-what-fasting-does-to-your-brain-why-big-pharma-wont-study-it/

http://www.naturalnews.com/034277_fasting_longevity.html

https://www.hsph.harvard.edu/obesity-prevention-source/obesity-consequences/economic/

Project $160K

My daughter went on her first visit to a college campus this week - I had some papers to submit for my research position.  The school I am attending is a private intuition, and it charges, based on US News, $54,114 per year (full-time) for its graduate program.  I am fortunate to have a company that pays for a majority of the tuition – otherwise this would be near untenable with a mortgage without succumbing to massive student debt.  So, a parent that sends his or her child to this institution, which is great, would have to set aside nearly an additional $180k for a graduate degree.  Supposedly, “[a] College Degree is the New High School Diploma” based on Forbes, so we are hoping to amass something over the $160k to help our child pursue an advanced degree.  Our fingers are crossed, a medical degree.

We decided to move some additional money into her account this week.  So her 529 fund is now roughly $3,000. We are near our goal to have $3,600 invested in the 529 fund on or before January 1, 2017. 

References

Robert Farrington, “A College Degree Is The New High School Diploma”, Forbes, SEP 29, 2014 <http://www.forbes.com/sites/robertfarrington/2014/09/29/a-college-degree-is-the-new-high-school-diploma>

The DFC Fund is now $5,311.36.  I made a partial car payment of $460.00 to my DFC Fund for July.

Below, I have included some for-sale car options found on eBay that are around $5500.  In addition, I have included a graph showing the performance of the SP500 as of July 7.

Project $160K

There are several options for saving money for your child’s education.  For example, an educational saving accounts (ESA), a 529 plan, or just a vanilla investment account.  Obviously, there are associated requirements, benefits and drawbacks for any account. 

Both the ESA and 529 have tax-advantages over a vanilla investment account.  With an ESA the student will not have to pay taxes on earnings or contributions – however, if money is withdrawn for non-education expenses, there is a penalty of 10% + an income tax.  And the ESA limits the maximum investment to $2,000 per year and depending on an individual’s income, the actual investment may be lowered to only a partial contribution.  Further, in order to qualify a married couple must make less than $220K per year.  

A 529 plan is an education savings plan operated by a state or educational institution designed for setting aside funds for future college cost.  And everyone is eligible – no income limits.  Using a state plan might provide tax benefits, and the plan can be used for out of state colleges.  An individual can deposit up to $14,000 per year into the plan will qualify for an annual gift tax exclusion - $28,000 for married couples filing jointly.  The investment in the plan grows tax-free and is only taxed when withdrawn – much like a 401K plan.  And can be used for tuition, books, room & board, and required equipment. Like the ESA, if money is taken out for non-qualified uses then a 10% penalty is applied along with the income tax.  However, there are exceptions to the penalty – e.g. disability, attending a U.S. Military Academy, or student scholarships.

Finally, a vanilla investment fund doesn’t have the tax-advantages, but also doesn’t have the income limitations or penalties for withdrawals. 

We decided to use a 529 plan for our daughter because we qualify (e.g. like everyone), and we plan to use the fund to cover tuition and books only.  We invested $500 dollars to begin the account – with $100 in Real Estate Investment Fund, $200 in Stock Index Fund (e.g. SP500), and $200 in International Index Fund. 

Project $160K

            My daughter was born this year, and I would like to begin investing for her college.  I will make some assumptions about the cost of college in 2034 as noted below.  First, the cost is 160k for a 4-year degree – based on Landsman’s article “What College Tuition Will Look Like in 18 Years” found on CNBC: “In 18 years, the average sticker price for a private university could be as much as $130,428 a year. The situation isn’t much better if you go the public route. Sending your child to a state university could set you back at least $41,228 a year.”

            Second, the SP500 will have an average return on investment of 10% - this is based on a conservative estimate of the historical average return of 12%.  I defer to the expert, Dave Ramsey, on this assumption.  Dave states, “[t]he current average annual return from 1926, the year of the S&P’s inception, through 2011 is 11.69%.”

            Third, I will have 18 years to invest, and allow my investment to grow to 160k.  Alright, the project has been laid out and now it’s time to implement.  I will provide various snap shots along the way on this project to see if it is on track to hit $160k by 2034.  Also, I have created the following mile stones to provide feedback on the fund's progress.

Mile Stones:

2017  - $3,600	2026 - $57,300
2018 - $7,500	2027 - $66,700
2019 - $12,000	2028 - $77,000
2020 – $16,700	2029 - $88,200
2021 - $22,000	2030 - $100,700
2022 - $27,000	2031 - $114,380
2023 - $34,000	2032 - $129,400
2024 - $41,100	2033 - $146,000
2025 - $49,000	2034 - $160,000

Sources:

1.      Stephanie Landsman, “What College Tuition Will Look Like in 18 Years”, 2012, <<http://www.cnbc.com/id/47565202>>

2.      Dave Ramsey’s “The 12% Reality”, 2012,  <<https://www.daveramsey.com/blog/the-12-reality/>>

The DFC Fund is now $4,859.13.  I made a partial car payment of $460.00 to my DFC Fund for June.

Below, I have included some for-sale car options found on eBay that are around $5000.  In addition, I have included a graph showing the performance of the SP500.

Contribution adjustment

The Plan: I am thinking to increase my monthly contribution to $1000 in the DFC fund.  The amount still reflects a typical car payment - e.g. a car payment for a BMW X5, retail price of 55k, is $1k per month for 6 years at 3% interest.  If I adjust my car fund to a $1000 contribution level, I predict** that my fund will reach the following goals over the next 6 years:

·         06/2017 – $17.5k

·         06/2018 – $32k

·         06/2019 – $46k

·         06/2020  –  $63k

·         06/2021 – $81k

·         06/2022 – $100k (a 5-year old BMW X5 is worth about $20k)

The Result: A DFC fund at $100k, without further contributions, would provide enough in growth to purchase a $30k car every three years without hurting the principal and the fund's prior growth.

** - assumption that the market returns at least an average of 8% each year.

The DFC Fund is now $4412.32.  I made a partial car payment of $240 to my DFC Fund for June.

Below, I have included some sample car options in the $4500 range and a graph of the SP500.

The “Drive Free Cars” (DFC) Fund is now $4104.87.  I withdrew $1246.01, and then made a partial car payment of $240 to my DFC Fund for May.

I posted some car options in the $4200 range below.

Looks like we have a new peak.