Enjoy The Journey
Life is short, time is precious, and money is merely one tool (an important one) I can use to help lead the fullest life possible. My value system places a high priority on family, friends, faith, and personal freedom. I won’t profess to have 100% of money and life figured out (far from it!), but I’ve learned a few things and am getting to enjoy the benefits of a philosophy lived out over the better part of the last decade.
In this first post, I’m going to share some of my background and personal story with you. If you’re going to listen to me talk about something as important as money, then you ought to know who I am and where I’m coming from.
I grew up in the small-ish town of Denton, Texas and was fortunate to live in a neighborhood that had not yet been fully developed and offered many acres of opportunity for making trails, riding bikes and motorcycles, getting stuck in quick sand, paint-balling, and generally fostering a sense of adventure and exploration that is far too often missing these days. On family vacations, which were usually to southwest Colorado or Moab, UT, Dad would drop me and my older brother off at the top of mountain passes so we could ride our bikes down at high speeds – looking back it probably was not the safest thing, but it sure was fun and I have some great memories from it! We were privileged to have done all sorts of crazy and stupid things as kids that taught us to have a good time while knowing (or at least learning) our limits and respecting mother nature.
And while I grew up with a love for the outdoors, I also took a strong interest in personal finance and investing. My dad helped me open up an investment account in which he offered an ’employer match’ on my earnings from mowing jobs. Early on, I knew I wanted to have some sort of career in finance and I didn’t waste any time getting to it – graduating high school at 16 and college at 20 with near perfect grades. And while I did spend a lot of time studying, I still managed to get outside and even spent a summer in college working at a camp in Colorado as an outdoor guide taking folks backpacking, climbing, rappelling, and hiking. But under the surface there was a conflict brewing… as I progressed further in my Finance degree I started dreaming less of the outdoors and more of a glamorous career on Wall Street and all the material rewards I thought would come with it.
Dashed Dreams and Wrong Priorities
Fortunately for me, I graduated college in 2008 during the financial crisis and those Wall Street dreams were put on hold. My job during that time, while I was grateful to have one, was not exactly what I had envisioned and I found myself in a pretty dark place. Life after college was not at all what I thought it would be, and from an income standpoint I was earning less than half of what I had expected coming out of school. In hindsight, I learned my frustration was caused by a number of things, but primarily my own unmet expectations which I had placed on myself – mostly about money and how I defined success. And I had put way too much hope in my academic accomplishments resulting in a high income career. Turns out that helping people and networking are significantly more beneficial, which took me a while to learn.
But when I graduated college with a job making a fraction of what I thought I ‘deserved’ and was doing work that was less glamorous than what I had envisioned for myself, it was difficult for me to accept. I felt simultaneously sad, confused, and angry – angry at myself for not being able to achieve what I wanted to achieve, and angry at the world for deciding to enter a financial crisis just when I was about to move into the big leagues.
Ironically though, from a financial perspective – I was actually doing pretty well despite my modest income. I’d bought a house as soon as I graduated and rented the rooms out to friends. That little arrangement actually turned housing – normally one of our largest expenses – into a profit center and, looking back, it was one of the biggest contributors to my financial success. I was ‘house hacking’ before that was really even a term. But as the year after graduation rolled on, I came to realize my priorities had gone astray and it was foolish for me, who feels most alive when I’m riding something with two wheels in the mountains or having meaningful conversations with other people, to have allowed myself to fall into a mindset of vanity in my dreams of success, which ultimately led to one of the darkest periods of my life.
The things I was focusing on were really not even compatible with what I actually value. In talking it through with some close friends, I realized some of the internal sources of my frustration and decided head out for a solo road trip to clear my mind, have some fun, and remember why I love the outdoors. So, not quite a year after I graduated, I packed up my truck with my mountain bike, backpack, and climbing gear and started driving west.
Some Soul Searching
I’d be lying if I said that one trip changed everything right away for me – but it was definitely a turning point and a pivotal time in my life. I vividly remember one evening when I was sitting on the edge of a cliff near Moab, Utah with an incredible view during sunset. After spending a considerable amount of time alone and in self-reflection, I suddenly realized that I was actually really happy. Maybe that seems weird to you – but for anyone who’s ever come out of a dark time before, you understand.
I had no big paycheck, big house, or fancy job title. But I felt free – free to choose my own way, free to acknowledge and cast away my own silly self-expectations, free to go wherever I wanted. I was living out of a truck, sleeping in the middle of nowhere, bathing in rivers, and generally having the time of my life – it was an amazing experience. I remember thinking in that moment that maybe I didn’t need to work my way into a 7-figure income in order to have financial / career fulfillment – what really attracted me was the idea of freedom and the ability to design a life and career around what is truly important and interesting to me. I remember laughing at myself for thinking I would have been happy in a big city – I don’t like large crowds and I feel claustrophobic when I have to go to a major downtown area!
So onward my journey went through Texas, Colorado, Utah, Nevada, California, Oregon, Arizona, and New Mexico. There’s nothing like going into the wilderness on your own and completely away from technology to clear your mind and help you realize more of what is actually important in life – it was a really transformative time for me where I experienced a ton of personal growth. It was on that trip that I first started realizing how little you actually need to be happy and that happiness has a lot more to do with our degree of freedom than how much stuff we have. And that our pursuit of ‘stuff’ often results in a lack of freedom!
I knew I couldn’t be a nomad forever – at some point I’d want to get married, start a family, and I’d have a lot more responsibility than I did at that time. Someday I’d have a wife who would most certainly not want to live out of a truck! But I realized that it may actually be possible to do life a little differently, where money was just a tool to help me live a life with as much freedom as possible rather than wealth and material accumulation serving as the end goal itself. It was the last thing I expected to happen, but I also met my wife toward the end of that trip.
By the time I got back to Texas, I had a new goal in mind – financial independence – and a developing framework for how to achieve it. But that doesn’t mean I lived this out perfectly! My wife and I did a lot really well, and plenty not so well. Financial Independence (“FI”) is simultaneously really simple and very complex. On its surface, you may find definitions along these lines – “Financial Independence occurs when your investments and passive income sources allow you to sustain your lifestyle indefinitely.” For most people, this is fairly quickly boiled down to a single number that is somewhere in the realm of 25 to 35 times your annual expenditures (depending on how conservative you want to be). If you spend $40,000 per year, you would need roughly $1,000,000 to $1,400,000 to truly be FI under this definition. And the more you save, the faster you get there – some people are arriving there in their 30’s and 40’s! Of course, things like tax rates, account types (IRA, Roth IRA, taxable accounts, workplace retirement accounts, etc.), social security / pensions, etc., need to be factored in, but it is surprisingly simple to arrive at a rough estimate of ‘the number’.
The real challenge of Financial Independence is that it is soooo much more than a single number you are working toward. It’s a really more of a mindset – it’s a journey and a life philosophy of its own which we each have to figure out how to implement in our own life. The FI Mindset is not for the faint of heart because it requires self-evaluation – and if we’re honest, we don’t always like to look at who we really are and why. But those who embrace it will tell you that its absolutely worth doing. There are benefits to be reaped well before you reach ‘the number’ (which, consequently, I’m not sure is the best way to really gauge FI – but we’ll talk about that another time). Benefits like a sense of freedom, more flexibility in life and career choices, more negotiating power, a wider skill set and therefore increased self-reliance, and a sense of accomplishment in doing something that remarkably few others are.
Our FI Mindset has helped us make some pretty radical choices in life – choices that some people thought were crazy! Choices like having my wife quit her job (two years before we had a baby) and in the same year having me take a new job with a big pay cut because I’d be doing something I found to be more satisfying and entrepreneurial. Those two decisions dropped our income by 50 to 60%, which might seem insane. But the truth is these decisions were carefully crafted to increase our happiness, quality of life, and freedom.
I would rather earn less and be happy than earn a lot and feel like my soul is dying each day – not that the two are mutually exclusive!
I would rather earn less and be happy than earn a lot and feel like my soul is dying each day – not that the two are mutually exclusive! And actually that job I took ended up working out pretty well – it was a risk/reward sort of thing that we’d never have been able to take the chance on if we hadn’t been living by a different set of rules than most people when it comes to money. So many folks out there could be in the same position but instead become beholden to a certain debt-fueled lifestyle, job/income level, and/or spend themselves into a position where they must then maintain that certain job or income level whether they want to or not. And that can create a lot of pressure and dissatisfaction in life.
This blog is about the FI journey and the mindset it takes to do it well and enjoy the process. It’s about un-learning the things we’ve been taught about money and adopting strategies to do things a little differently. It’s about the things my wife and I have learned along the way and will continue to learn as we keep going through this crazy world. It’s about life and philosophy as much as specific financial strategies. I don’t have all the answers – heck, I don’t even know all the questions! But I hope you can learn from my successes and my mistakes – both financially and personally. We’ll cover everything from money topics like Roth IRAs, financial independence / early retirement strategies, real estate, investing, economics, behavioral finance, and budgeting to life topics like happiness, busyness, and how to live an adventurous life in the ordinary mundane we all experience in some form or fashion as we do this #adulting thing.
I also want point out that pursuing financial independence doesn’t have to mean living like a miser – I’ve never bought avocado toast (google ‘avocado toast controversy’ when you’re bored sometime!), but we don’t feel like we hold ourselves back from that much. Generally, when we really want something we just get it. But that also may be a function of having trained ourselves to think about money in terms of our bigger picture and what we really view as life-giving. That said, we’ve taken multiple trips to Hawaii, travel a fair amount (less than some, more than many), we can absolutely devour the sushi (see below for a real picture of our table a while back!), I take an annual ‘motomancation’, and I love mountain biking and adventure motorcycling (not the cheapest hobbies). My wife stays at home with our daughter and loves interior design. When we spend money, we make sure we enjoy it. We aim to be as generous as we can. I think if you hate spending or giving money, your view of money and your priorities are probably wrong.
If you’ve read this far, it should be clear that I’m much more concerned with using money as a tool to live a full life than with simply accumulating wealth – although saving and investing is absolutely necessary to reach financial independence. The mathematical part of FI is pretty simple – increase net income and invest it wisely. This can be done by saving more (i.e. spending less), earning more, or both. And though we’ll talk about both here, my focus is more on aligning spending with values – that way when I do spend money, I know it’s on something worthwhile and, therefore, enjoyable.
This is different than with rules-based systems (i.e. follow these 7 steps, keep a budget, save x %, etc.). Certainly, rules of thumb and budgets can be helpful – but I’ve found that rules-based systems rarely work when it comes to money. Change must come from within, otherwise no budget, system, or rule is going to hold and work long-term. The idea is to change the way we think and feel about money so that we enjoy the journey of FI and not just the destination. After all, what’s the point if we aren’t enjoying life!?!?
I think this blog will be a fun journey and I hope you’ll join me in it. Also, you should know I’ve made a commitment to not accept commissions from financial affiliates on this website. Many personal finance sites have become marketing arms for credit card companies, banks, brokerages, insurance companies, robo-advisors, crowd funding investment groups, and other financial groups. I don’t have a problem with them making money off of this (and a lot of them put out great content!), but on this blog you will not see me push or advertise a third party financial product for compensation. Check out the About page if you want to know on that subject (or me!).
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