Tuesday, November 27, 2018

November 2018 Net Worth Update

In November, our net worth rose about 5.25% to $37,962. In euros, it rose 5.7% to €33.417.The big factors that affected this number are as follows.

Stock Market

The stock market continued its volatility, and a number of individual companies I own fell by quite a lot. That's not fun to watch, but I have to content myself that the prices have fallen, and all future purchases are now going to matter more due to the lower purchase price.

I'm sitting on a net unrealized loss. That's mentally taxing, to put it mildly, but in addition to the above-listed consolation, I also spend a lot of time looking at past market corrections and how they affected the names that I'm holding. It feels painful now, but in a few years this will have been a blip in the movement of the stock markets. Even if this lasts a year, it is unlikely to be horrible.

I remember watching the 2015/2016 correction happening, and although it was exciting at the time, it now feels like nothing. When people talk about the long bull market, they rarely mention 2015/16, even though it was incredibly painful for a wide variety of stocks and industries. If you were holding commodity stocks, especially oil, you just got hammered. But that gets lost in the narrative of "the longest bull market in history".

Saving and a Gift

We saved a good amount this month (33.5% of income). Despite the stock market pain and despite my wife working fewer hours last month, our savings rate helped us inch upwards. We did get the electricity bill refund, so that basically eliminated our electricity costs for the month.

The biggest lever when you're talking about modest sums of money isn't the returns from investments but the total amount saved.

For transparency's sake, at the end of last month I received a monetary gift of $1000 out of the blue. I'm still uncertain as to why (other than that person loving me), but that money went straight to savings.

Economic Outpatient Care

The The Millionaire Next Door, Dr. Stanley spent a lot of time discussing "economic out-patient care". His basic idea was this: young people who receive a lot of monetary support from their familial elders often remain dependent on that support and develop bad habits that limit their future financial resourcefulness. He called that "weakening the weak".

Since learning of the concept, I've tried to be much more careful with such gifts. When I was much younger, I did develop bad habits from the knowledge that I had monetary help should I need it, and I'm trying to make up for past sins, so to speak.

Looking Ahead

December is a bit of a wild card. We have estimated taxes to pay, and we will eventually be billed for an extra payment for last year's German taxes. We also have a small trip to enjoy, which will cost some money, but I doubt we'll be extravagant.

Of course, there's always Christmas gifts, but we're modest gift givers, and we encourage modest gifts for ourselves as well. Because we live abroad, nobody expects anything too expensive or complicated, which does reduce expectations.

Unless the market really falls off a cliff, I expect further slow but steady progress.

Monday, November 12, 2018

Electricity Tracking

Unlike the U.S., we report our electricity usage once per year here. We pay a monthly fee that makes up part of a yearly estimated fee based on what's known about us. If we're over that estimated usage, we have to pay yet one more fee, and if we're under, we get a refund.

I find this system absolutely crazy, but there's nothing I can do about it. If you make a mistake one month, you're likely to make it year-round, and you won't have any sense of it until you get your final bill. It's a big delay, and the results can be terrible: you can be hit with an enormous final bill if you aren't careful.

The power company estimates for us much less than what's normal in the U.S. For me and my wife, our 2018 estimate was 2821 kWh for the year. The average in the U.S is 10,399 kWh for a residence.

Despite the difference in usage, we are incentivized to use very little electricity. There's no way around it: electricity is expensive here. For us, we're looking at a price of 0.22€-0.27€ per kWh, while in the U.S. it's 12¢. That's a major difference, and the kind of stuff that I found clever in the U.S. to keep my electricity bill low must now be standard procedure to avoid paying enormous electricity costs.

The first two years, we had to make an extra payment of roughly an extra month of electricity at the end of the billing cycle. That was irritating. For this year, I've kept better track of our usage, and if I understand the system at all, we should be getting a refund (taxes and fees are always a wild-card). Fingers crossed and thumbs pressed.

For our 2018 year, the electricity company estimated we'd use 2821 kWh. We ended up using 2331 kWh instead. I tracked this weekly and monthly in a spreadsheet (spreadsheets are a superpower), and when a weekly number jumped, I tried to look for reasons why.

Adjusting Usage: The Big Levers to Pull

There are a few levers we can pull to change electricity usage. Of course, there are the obvious ones like turning off lights, but we use LEDs for every bulb in the house. Lights aren't what drive our usage.

The big one is warming up water.

Our heating is provided via radiators and a building-wide central heating system. That's a different set of costs, and I won't get into that here other than to say that general home heating isn't included in our electricity costs. Instead, we heat water to:

  • Bathe or otherwise wash ourselves.
  • To cook or heat water for hot beverages.
  • Wash clothes.
  • Wash dishes.

The appliances associated with those activities are:

  • The bathroom Durchlauferhitzer. A Durchlauferhitzer heats water on-demand as it passes by the heating elements. It's a nifty device, except that it chews through electricity. It's also a trap because you'll never run out of hot water in the shower.
  • The kitchen's under-sink hot water resevoir. I just installed this, and despite storing hot water, it's not as big an electricity hog as the Durchlauferhitzer. That said, it supplies much less hot water since it's a small reservoir.
  • The stove.
  • The clothes washer, which is a front facing washer.
  • The dishwasher.

The biggest and easiest lever here is the Durchlauferhitzer in the bathroom, which supplies the shower and the sink. Any period of time in which we deliberately shorten the amount of time the Durchlauferhitzer is heating water is a period where electricity usage will be noticeably lower.

After that, the easiest lever is the clothes washer. This machine allows us to set the temperature of the water very precisely, and if we set it to 0°, then the electricity usage is negligible.

Changing the stove usage is harder. By using the stove, we cut down on eating out, the cost of which easily can dwarf the electricity usage of the stove. However, there are strategic ways of using it to conserve electricity. By preparing a food in bulk (such as boiled potatoes or hard-boiled eggs or a big batch of TVP), you can eat the cooked foods over several days without resorting to the stove. We still use the stove for coffee and tea prep since we don't want to buy more expensive/more complicated preparation devices for those activities. But making food in bulk does have a noticeable effect on our usage numbers.

The dishwasher has a short cycle that does the job well enough if we prep the dishes well. Unfortunately, our sink is very small, so washing dishes by hand is perfectly possible, but it's a pain and often leads to a big countertop mess.

The Medium Levers

We also have a dryer, which we try to limit use of. It's a condenser-dryer rather than the standard American dryer with heating elements, and it's pretty efficient. Since our apartment has good cross breezes, we often use drying racks strategically placed where the air flows and where the sunlight falls. Now that it's getting to be winter, and therefore cold, dark, and damp, we'll probably use the dryer near-exclusively.

Our vacuum cleaner is surprisingly power hungry, and with our apartment's old electricity system, it often trips the fuse. It may be worth retiring this machine at some point, but we received it for free from friends when we first came here, so we'd need a super efficient machine to make the switch worth it.

Lastly, we have a fridge and freezer. The fridge was given to us, so again, we're not itching to get rid of it and buy something more efficient. We just try to keep the temperature down and keep some water in there. As for the freezer, we bought that a few years ago, and it doesn't consume too much power. We keep the freezer packed nearly 100% of the time since we rely on so much frozen food.

Misc. Power Sucks

We also have the following that we try to keep tabs on, but are much more minor electricity sucks:

  • Laptops
  • Cell phones
  • A NAS and some HDs for computer backups (the NAS is admittedly a decadent solution for this challenge)
  • Routers for internet access
  • LED light bulbs
  • Fans
  • Electric power drill
  • A+ rated range hood with LED light
  • A HEPA air filter for the bedroom
  • Blow dryer, clothes iron, sewing machine (used often enough to make them worth keeping, but not used often enough to cause a big spike in power usage)
  • Electric piano
  • Blender
  • Electric dental things
  • A rarely plugged in bluetooth speaker

These things will definitely suck power if we're not careful, but they're the least important in terms of the big picture of our power usage.

Electricity Eaters We Don't Have

We don't have an air conditioner. I've been tempted to buy one since heat waves in Germany are rough. But their electricity use would force us over our yearly estimate. For almost anyone, if you have and use an air conditioning unit, it's probably the biggest single lever you have to raise or reduce electricity use.

We don't have many small kitchen gadgets. I'll probably write more about our thinking here, but we don't have a microwave or a electric coffee maker or countertop water heater or any other variety of common small kitchen appliance. The exception is the blender.

We have no television nor any of the requisite co-gadgets that come with one. Any type of movie or TV show viewing happens on the laptops or phones. The computer speakers are mostly adequate for that. We wouldn't want to annoy our neighbors with a thumping sound system in any case.

And with that, there's a picture of our electricity usage. Here's hoping for that refund.