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I learned some interesting things about financing retirement yesterday.

I’ve been reading a financial book a friend recommended to me preaching the common methods on “how to get rich the safe way” through managing your 401(k) and IRA’s and such.  It’s somewhat helpful in recommending what banks to use and laying out all of the details of each of the methods of saving and recommending a path.

At the beginning of the book there’s this table similar to many others I’ve seen.  It looks like this:

Smart Sally Dumb Dan
When beginning to invest the person is 25 years old 35 years old
Each person invests $100 for… 10 years 30 years
At 8% interest at 65 they have $200,061 $149,036

The basic gist is, starting young is incredibly beneficial. If the goal was to get to 200k Smart Sally could just stop saving for retirement at the age of 35 where Dumb Dan, at the same rate spent 30 years trying to make it and never did.

When can I be done?

Which got me thinking: what would I have to do to one day just be done saving for retirement? I wrote a script to determine just that. It ignores a few minor details which are probably negligible anyway when compared to the error margins in the assumption of inflation and assumed investment return, but gives good ballpark results.

I assume I’d like to retire on an income of today’s equivalent of 50k after tax which is completely generated by the interest earned on my retirement savings. I assume I can maintain an 8% average earnings and account for a 3% inflation rate.

Without Further delays, here are the results.

Welcome to the Reverse Financial Calculator!

$50,000.00/year is $158,351.35/year when you are 65 assuming 3% inflation
To make that much money from an 8.00% interest you need $1,979,391.86 

You can stop saving up if you reach a total savings of one of the
values in the STOP AT at the corresponding AGE.  If you want to hit
that goal starting from 0 you need to START PAYING the listed value per year.

AGE     STOP AT       START PAYING
26       $98,402.32  $98,402.32/year
27      $106,274.50  $51,093.51/year
28      $114,776.46  $35,355.00/year
29      $123,958.58  $27,508.99/year
30      $133,875.26  $22,819.90/year
31      $144,585.28  $19,709.20/year
32      $156,152.11  $17,500.34/year
33      $168,644.28  $15,855.05/year
34      $182,135.82  $14,585.38/year
35      $196,706.68  $13,578.56/year
36      $212,443.22  $12,762.81/year
37      $229,438.68  $12,090.27/year
38      $247,793.77  $11,527.81/year
39      $267,617.27  $11,051.75/year
40      $289,026.65  $10,644.72/year
41      $312,148.79  $10,293.69/year
42      $337,120.69  $9,988.69/year
43      $364,090.34  $9,721.98/year
44      $393,217.57  $9,487.41/year
45      $424,674.98  $9,280.09/year
46      $458,648.97  $9,096.04/year
47      $495,340.89  $8,932.02/year
48      $534,968.16  $8,785.34/year
49      $577,765.62  $8,653.75/year
50      $623,986.87  $8,535.38/year
51      $673,905.82  $8,428.63/year
52      $727,818.28  $8,332.13/year
53      $786,043.74  $8,244.74/year
54      $848,927.24  $8,165.44/year
55      $916,841.42  $8,093.36/year
56      $990,188.74  $8,027.74/year
57     $1,069,403.83  $7,967.93/year
58     $1,154,956.14  $7,913.33/year
59     $1,247,352.63  $7,863.45/year
60     $1,347,140.84  $7,817.81/year
61     $1,454,912.11  $7,776.03/year
62     $1,571,305.08  $7,737.74/year
63     $1,697,009.49  $7,702.62/year
64     $1,832,770.24  $7,670.38/year
65     $1,979,391.86  $7,640.77/year

Pretty cool right? The results say that if I pay about 20k a year I can stop putting money away for retirement in just 6 years, making my last payment when I’m 31.

When to Start

I also was interested in seeing what it would take to do that same 6 year goal if I put off starting the plan. You can see from the following results that putting it off does have significant cost to it.

START      STOP    PAYMENTS
26           31    $19,709.20/year
27           32    $20,665.96/year
28           33    $21,669.16/year
29           34    $22,721.06/year
30           36    $23,824.02/year

So the plan would cost about 1k more per year for every year I put it off.  That’s a lot, but it doesn’t necessarily mean you should put everything aside and go out and start saving ASAP.  As long as whatever you’re doing, that’s not allowing you to put significant money away is increasing your probable future income by atleast 3k (post tax) per year you should be in good shape.

People who work towards a PhD or an for example MD are not able to save much but will be able to handle that extra 4k/year easily once they’ve got a much higher paying job (schooling aside).

Anyone interested in trying it out themselves or modifying the results slightly can grab the source here.

Fun Fact:

If your parents had gone cheap with your baby clothes, crib and stroller and instead put 10k a year away from the day you were born, you’d be set for retiring at 65 on just your 2nd birthday!

AGE    STOP AT
0       $28,691.65  $28,691.65/year
1       $30,986.98  $14,897.59/year
2       $33,465.94  $10,308.63/year

Recently I bought a junky Road bike to hold me over for a while in Minnesota while I build my return to my beautiful road bike in California. I’m leaving it there for now for several reasons. It costs a lot to ship, I’m never sure how much longer I’ll be in Minnesota, and I think its happier being periodically peddled around the Stanford Campus in beautiful Palo Alto than sitting in a garage most of the time here, even if its being peddled by legs that are not my own.

But anyway, this new bike reminds me of why until last year I never really enjoyed biking.  I used to think it was because I didn’t have good places to bike to, and that with the exception of a few extremists bicycling is a highly seasonal activity in Minnesota.

old-rusty-bike1But I was wrong.  Sure those things contribute but the main factor was the bike.  I always had cheap generic bikes from Target, Walmart, or some such place.  These bikes change gears horribly, are overweight, slow, and just ruin the overall biking experience.

A road bike is lightweight, designed for going fast, and gears change with ease.  All of the gears are helpful, not just the highest and lowest.  There’s no struggling painfully up heavy inclines or excessive pedaling due to gears not shifting. 

On a road bike I’ve never hopped off to walked up a hill because it was just a lot easier.  On my new crappy mountain bike I feel like doing that all the time.

For these reasons I feel angry at Target and other similar stores.  Why do they make and sell such poorly designed bikes?  Why do you only sell mountain bikes and a few ‘hybrids’?  Shouldn’t the large tires cost more?  How many people actually bike dirttrains anymore?  Is it that tough to get the whole shifting gears thing down?  Can I have those years of not enjoying biking back?

At the same time I feel upset with the bike shops.  Why do road bikes have to be so expensive?  Why are they exclusive to your niche stores?  Can’t you keep it under $300?

I will probably never get an answer to those questions…

I never would have bought a road bike had it not been my only means of transportation for a year and had I not run into such an amazing deal on a used one.  It angers me that I so closely missed out because bicycling is now one of my favorite hobbies and my preferred method of transportation assuming painful weather conditions and a reasonable distance.

I wish there were reasonably priced ($200) road bikes for casual biking.  Around here I see garages full of bikes all the time and they’re always big framed mountain bikes with fat tires.  I don’t get it.  I think there’s a missing market there.

It may not surprise some of you to know that JaredSIM is not my first company, but my fourth. The first I started with my sister in elementary school. We received a children’s loom for christmas and started making custom fabric coasters for people at my mom’s work. We called them “Mug Rugs” (@copyright 1992) and profited a whopping 3 bucks a piece until we tried to scale and ran into some child labor issues.

My second I started in middle school with my father. I was a trapper and fur foot trader. We trapped a lot of gophers in the fields around where I lived. I spent a good 4 hours a week setting and collecting traps. Our county paid a pretty good price per gopher and I estimate I collected about $300 worth of gophers one summer.

My last business adventure was in the summer of 2004. My friend Ryan was working a typical cubicled internship and was suffering from a mild case of cubical claustrophobia (sometimes referred to as “Am I really going to do this for the rest of my life” syndrome) and had to go on frequent walks to stay sane. I was doing research in the cold dark basement of an optics lab and was really getting down about the lack of variety in the spectrum of light that I experienced throughout my day. It was also a time in my life where I was experimenting with several different vocations trying to find where I belonged.

Most people in technology have had to at one point decide whether to give up their love of the outdoors, or their love of technology. Ryan and I rarely follow the path of those most people and decided we’d get around that decision by making a rare company that does technology outdoors. Our business plan: a Computers and Lemonade stand!

Computers and Lemonade Sign

We set up shop on my street and started fixing computers and selling lemonade. We were open for a good 8 hours before it got dark. Unfortunately my street is more like a county road and we only saw about 6 cars go by. None of them apparently had their computers with them, or at least the ones they did have weren’t broken.

We did fix 3 computers. Two were for friends we called during our telemarketing campaign. They had much better bargaining techniques than us (they were female) as they got our quality service for the price of two tacos and a chocolate frosty. I’m pretty sure it was all from the dollar menu. The other we fixed for my parents in exchange for a pitcher of lemonade, an investment that didn’t pay out as we never actually sold any lemonade.

Setting up the stand

One of the 6 cars stopped, backed up and said “Do you guys really fix computers?” We answered yes and then she asked “How much?” We hadn’t planned that far ahead and looked at each-other and I blurted out “20 dollars.” She said she’d be back with her computer and we waited nervously hoping it wasn’t an expensive hardware related problem.

 

Waiting for customers

She never came back and by the time it got dark we knew we had some serious flaws in our business plan. We decided to add a sound system to our outdoor computer setup and see if we could make it as an outdoor movie theater. A few people showed up but they all just brought chips and soda instead of money. We had problems legally monetizing that venture.

After that day we discussed the flaws in the plan and decided that we had stupidly violated all three rules of business, which are each titled “Location”. We decided to try it again someday in a better spot but were soon back to being wrapped up in our busy technology lives and that day has yet to come. I hope to one day find another business plan that allows me to do computer work outdoors. I think people need to be close to nature, and computer don’t have to change that.

Dave

All the women I meet lately ask me what it is that I do. When I tell them I’m doing a startup they look at me with their big doll eyes like a scared Lana Wood with the mysterious Sean Connery and say, “Isn’t that dangerous?” I usually respond with a simple “Sometimes (dramatic pause) but a man’s gotta do…” And with that she becomes putty in my hands and I’ve pretty much acquired a VIP pass to her pants.

The life of a founder is a dangerous but highly lucrative one. It’s a very fast and most often short path but the opportunities attract a certain type to the profession every year. Women, to their inevitable downfall, are helplessly attracted to this type of person. They picture me on the battle grounds of the startup front, typing as fast as my masculine hands will take me and reading as fast as my eagle eyes can pass over a page. Knocking down book after book like a mad gunner in a prairie bunker, I absorb knowledge with an evil vengeance all to carve my own space among the tech giants of the corporate world.

They see the amazing speed at which I develop Web 2.0 applications, all to gain the advantage of first on the hill so that I may become king and destroy those who climb alongside me. They gawk at the amazing amount of Pepsi’s and carbohydrates I need to fuel me for the day and marvel at the boyish figure I’m still able to maintain. They fear the current of novel ideas pulsing through my powerful mind and wonder all the while how it is that I deal with so much danger on a daily basis and still survive.

The secret is something I discovered many years ago. It’s an awakening discovery and I’m about to spill it so prepare yourselves:

Danger Never Takes a Vacation.

Bam! There it is. Now that you’ve heard it you know it’s true and you probably see life completely differently. It doesn’t. It never vacates. While you put yourself to bed in your comfy home in the suburbs after your long day at your cushy corporate job that you got because of your fancy college degree and all of your sappy community service, you might think you’ve got it all figured out and danger has left you for the allure of fresh tropical drinks on the beaches of Brazil, but you would be wrong. Dead wrong, and maybe even dead. It hasn’t left, it’s still there, it never, ever, in a billion years, vacates.

After this realization two things may happen to you. Your awareness to the surrounding danger cripples you with fear and you helplessly cling to men such as myself who are seemingly immune to it. This is the path taken by the women I’ve discussed. In the other path, you will realize that the danger has been there all along and you’ve been surviving just fine. In this case you will be inspired to grab your metaphorical hatchet, tear off your suffocating clothing and run into the untamed forest looking for something to kill. In either case your awareness of the danger will dramatically heighten your appreciation for life.

Some readers might find what I’ve written to be a little grandiose, but I assure you everything I’ve said is completely true, or rather it probably would be if the life of a startup founder ever crossed paths with women…

Dave

I had the privilege of spending last week at the google campus hacking at the doccom Plone sprint.  It was an awesome experience both to work inside the area that justly has the reputation as one of the most awesome places to work, and to take part in Plone’s excellent open source community.  Here’s a cool picture, you can find more here.

Plone Sprint

Unfortunately I had class on the day we got the full google tour of the cafeteria and the campus center but my experience walking around the site and in our google building on the edge of campus was still awesome.  The buildings, landscaping, and streets aren’t really anything too spectacular so the first impression is the same as any other office campus.  Soon though you notice all the not so little things that google does to make it such an awesome work environment.

First, there are a ton of bikes going around.  The campus is fairly spread out so google provides a bunch of bikes.  There are also some scooters and its rumored to be a few segways and some sort of 6 person circular meeting bike.  Also there are a whole lot of limousine busses that google leases driving around helping the commuting google employees.  I never got to see inside of one but they have leather seats and you can bring food and even dogs onboard. I’m jealous of people who can bring a dog to work.

Ofcourse, as everyone talks about, the food and beverages there are free and amazing.  I think I drank about 100 smart waters over the course of the week but unfortunately noted no increase in brain activity.  Lastly, but most important, the toilets were unbelievable.  They had heated seats where you could choose your preferred temperature.  It would also wash you and other crazy stuff if you were bold enough.  The thing had 20 different settings and can take a while to set up just right.  I want to invent a mechanism for it somehow recognize your butt and change to your preferred settings.

The Plone sprint was equally cool.  For those of you who don’t know what Plone or a sprint is, Plone is an incredible open source content management system and a sprint is an event where a bunch of the people involved in the Plone open source community get together and work on a specific project.  This sprint had two projects.  There were about 30 people there, half were working on organizing the documentation for the upcoming Plone 3.0 release, and the other half were making Plone GetPaid, an e-commerce product for Plone.

The first half of the sprint I worked on doctests and the getpaid workflow and the second half I developed a python wrapper for the UPS online tools to make a shipment information utility.  I’m 90% done with it, I just need to formalize it and write up some docs.  I should have a post on it soon, its been a crazy week.  Because I’m new to Plone and was gone for the majority of 2 days for class I probably wasn’t very helpful, but everyone was very nice and a lot of fun.

The public transport commute to google takes 2 hours and $10 from my apt so I ended up just crashing at the hotels the sprint sponsors funded.   I got to meet and hang out with many of the awesome people of the incredibly active Plone community including the infamous Joel Burton and one of the founders, Alexander Limi.  The week reminded me of the good life at IBM Rochester; hack all day, drink all night. Except all the food and beverages during the day were free!

Thanks to google and the Plone community for making it all happen.  It was my first sprint and first contribution (though small) to an open source project!  Hopefully there will be many more to come.

Dave

Facebook has evolved as one of the most powerful way of social networking, sharing photographs, video, blogs as well as communicating with friends and networks. Fred Stutzman is a Ph.D. student at the University of North Carolina at Chapel Hill’s who studied facebook and it’s usage at his university. As he goes to describe his plan of the longitudinal study over a period of one semester, some of his assumptions are totally reestablished through the statistics. He basically studies the social behavior of freshman at University of North Carolina, Chapel Hill. Alarmingly, 85% of college freshman were already on the facebook as they joined as freshmen, and not only that, they also were already connected to on an avg 45 other freshmen coming in week one of the study itself. The increase in new users over the course of the semester came out to be up to 94% with student to student connections increased to about an avg of 100. Well … this should definitely have been the initial assumption anyway. College does mitigate the social networking abilities of students :p These statistics however lead to the speculation of spreading of facebook through orientation sessions for the school. This is supported by the initial links and connections between the students coming in being about 144,000 friend network connection (week1) and increasing to 370,000 (at the end of sem) just for the freshman class of UNC.

 

 

Facebook is an amazing way of interacting with acquaintances, friends, and learning about each other. Fred studies the personal information sharing tendencies of students along with privacy considerations. The users on facebook get to decide how much information to share and what type of information to share. Facebook provides a very flexible approach to networks and their situational relevance which allows users to change their network relevance and relations with change of demographics at the same time being connected with the old friends from another network. Not only that, it provides a great way of managing social connections without too much time investment. At the same time, the study finds out that a lot of time ends up being wasted online on facebook. The fact that users stay connected with others easily all the time, also tends to become addictive thus degrading productivity. If the whole communication between users could be made more informative and useful, rather than just a description, the wasteful addiction could be transformed into an even more useful. It could change the way people look at information via other users themselves and gain knowledge out of their own social networks or expand their networks based on knowledge and information.

Priyesh

 

 

I get asked all the time about why I call all of my projects Jared.[project_name], what thingsilearned is about, and why we chose to call our company JaredSIM. The only way to explain it is to explain Jared, and the whole story, or adventure as I like to call it of JaredSIM. I thought I’d write about it here to reduce some of the repetition, though I never mind telling it as its a great story.

Lets start from the beginning with the childhood of a one Mr. Jared Lee.

[The setting: a small private lake in northern Wisconsin. Camera zooms in from helicopter view on a young curious boy floating in an old tire tube reading an article on nimbostratus clouds in the N volume of the Encyclopedia Britanica. Que Narator]

Narator: In a world of common people, going about their common tasks in their common everyday ordinary regular ways, a young boy was born and raised away from its influences…

[kill narator]

Ok, I went a little overboard, back to regular story telling style. Jared was home schooled the majority of his childhood. His older brothers were moved away to college and he spent all of his time with his parents enjoying the frills of life that typical 50 year olds enjoy. Jared loved reading non-fiction, politics, religion, nature, radio, talking about the weather, photography, watching sports and other mature activities. It was during this time that, with the learning power of youth combined with the interests and intelligence of someone well beyond his years, Jared acquired almost all practical knowledge. Note: you might have to back over that last sentence, it was a big one.

After graduating high school Jared decided to go to Gustavus Adolphus College and obtain a degree in physics, one of the few subjects he hadn’t already learned. It was there in the dark rooms of Olin Hall that Jared and I, along with the other physics majors, would study all hours of the night. As would be expected with long periods of study tons of questions, both physics and non-physics related, were posed to the group: “Who was the 8th president of the United States?” “How much does a pizza cost at the caf?” “What’s the name of that girl that Cory made out with last week?” “Where are the beer specials today?” “What day is it?” “Is Jolene Right?” “When is our next frisbee game?” etc.

Some of those are easier to answer than others (Cory’s dating habits have never been tough to follow and if it’s not physics related, Jolene doesn’t even get rhetorical questions right.), but miraculously, no matter the difficulty, Jared could answer all non-physics questions.

It was a feat that remained unappreciated and even unnoticed until the semester Jared studied abroad in Australia. Suddenly when posing similar questions “What will the weather be like in by the time i go outside?” “Who shot JFK?”, the group wouldn’t know. We were lost, and decided that we’d have to start going downstairs to the computers and using a rising technology called the Internet and a search engine (Google) we had heard about others using to solve similar queries. After several unanswered searches (“Is Jolene Right?”), it was obvious that no technology existed that could adequately replace Jared. We had temporary hope that soon Jared would return but also realized the loss we would experience upon graduation.

It was then put on me, the sole member of the group with computer programming skills, to simulate Jared so that we all, and the rest of the world, could have the advantages of those in his presence. The project/life task was called JaredSIM and is being carried out in several different sub projects. So far the following have been kicked off with varying successes: Jared.trader, Jared.survivor, Jared.hockey, and now Jared.learn. So you see the goal of JaredSIM is the mass production and distribution of the resources of Jared Lee and the goal of ThingsILearned.com is to acquire all of the things that Jared has learned in digital form.

So you see there was a very simple explanation. I hope it got you excited to help teach!

Dave