I read a lot of financial independence and early retirement blogs (a.k.a. FIRE = Financial Independence, Retired Early), books, articles. I love them! They inspire me! But most of the information I consume comes from people that have followed a path to financial independence that looks nothing like my own. For the most part, these people:
- Started saving in their early 20’s. Saved a huge percentage of their income. Were single for much of that time. Are now married. Might have one kid. Are now financially independent and living the good life!
Compare that to my own journey:
- Got married and started having kids in my early 20s. Saved little to nothing. Single income household. Now late 30s/early 40s and on the path to financial independence, but not there yet.
I don’t think it’s a stretch to say that most people are like me. I wanted to tell you a little bit about myself because I think you and I can relate.
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Present day …. January 2016 2017
A few weeks ago I turned 39 40 years old and a just a few weeks before that I celebrated my 17th 18th wedding anniversary with my high school sweetheart. We have four kids ranging in age from 15 to 5 16 to 6 (boy, girl, boy, boy). My wife stays home to take care of our kiddos. I’m the only source of income for our family. We live in the Seattle area, which has a higher than average cost of living, mainly because of housing costs. Today I’m earning a higher salary than I’ve ever earned before and things are going well.
But it hasn’t always been this way. Only recently, at the ripe old age of 37, did I finally get serious about finances and retirement, oddly enough because of a link I found while browsing a college football message board. That day two guys were having an argument about whether or not Costco was worth the cost of a membership. Must have been the off season for football?
Someone posted a link to a blog post where a guy that called himself Mr. Money Mustache had done a Costco vs. Safeway comparison. I read through his Costco post. Then read another one. Then I stumbled a post that literally changed the course of my financial life titled The Shockingly Simple Math Behind Early Retirement.
Right there before me, laid out in shockingly simple math, was a path to financial independence. For a guy that was pretty much just going along with the ebbs and flows of life, this was like a lighthouse calling me in. Who knows how or why these things happen, but that blog post resonated with me. I couldn’t stop thinking about it. I was curious about my own situation and what it would take to retire early and without even knowing that it had happened, I was officially all-in on the financial independence train.
Prior to that point in my life I was like a lot of people that know they should be saving, hell maybe they even do save a little bit, but they don’t know what to do with that savings. Or how much to save, or what else they could and should be doing. So we end up just plodding along through life knocking out one day at a time and before you know it you’re approaching retirement age and hope like hell you’ve got enough saved and that Social Security covers the rest. So that’s me today. This is how I got here:
In the beginning …. 1998
My wife I and got married in 1998 when we were both very young. I was 21, she was 20. We were hopelessly in love and completely infatuated with each other. Unfortunately for us, love didn’t pay the bills. Money was tight (or non-existent) and just getting by was the goal. Saving wasn’t a thought and certainly not a priority, although somewhere in the back of my mind I knew that we should be socking money away. I just didn’t think it was possible to do so on our very limited income. Besides, I was staring down the barrel of a 40 year working career and had all the time in the world to figure it out later.
All I knew at that time was that I wanted a better life, one that included more money and freedom. All my life I’d been told that the path to a better job was through college. I distinctly remember one day in 2001 when I was sitting in my cubical at work, feeling very frustrated with things when I thought to myself:
This sucks and unless something changes, it’s always going to suck. Four years from now I can either be doing the same damn thing or I could be a college graduate with more options.
School of Hard Knocks …. 2005-2008
Four years later I was a college graduate with more options. Shortly after I’d had that epiphany of sorts, my wife and I took the steps to get me enrolled in college. She worked one and two jobs at a time to cover the majority of our bills, and I overloaded my class schedule and enrolled in summer semesters to get through the program ASAP. I also took on a few part time jobs and picked up some side hustles here and there, got student loans, and even received a scholarship to help get by. Between 2001 and 2005 we had babies #1 and #2, so we were also sleep deprived the whole time.
It took three years to get my degree, but we got it and in the end were rewarded with my first “real” job that paid a respectable wage. I think my salary was $36,000 per year and it felt like we’d hit the lottery after squeaking by financially for so many years. This newfound wealth was also our first experience with lifestyle creep. More money equals better apartment & newer car. No savings though.
Movin’ on up …. 2008-2010
I consider myself to be a reasonably bright guy and a hard worker. My boss must have thought so too because over the next 3+ years my starting salary grew from $36,000 in 2005 to just over $60,000 in mid-2008. We were also further in debt than we’d ever been and still didn’t have a penny saved. We had two new cars though. And a brand new house (at the peak of the housing market). And a few grand in credit card debt.
In late-2008 I took a new job with a new company and got a small raise and a lot of job stability. I was up to about $75,000 per year. Baby number three was born in 2009.
In 2010 I was recruited away by another company that was offering a 15% raise. I was now at $84,700 with a 10% bonus and great benefits. Baby number 4 joined our family this year as well.
In just a few short years my salary had climbed from a then eye-popping $36,000 per year with no benefits all the way up to $85,000 plus bonuses, stocks, 401k, health, vision, etc. etc. etc.
I was 34 years old. I’d been married to my high school sweetheart for about 11 years. We had four amazing kids. Life felt good. It was good! But the future wasn’t looking so hot. I had exactly $0.00 saved and a total net worth of negative $305,000. Change was needed. Quickly.
Ch-ch-changes …. Late 2010
About this time we, and by ‘we’ I really mean ‘me’, because my wife really didn’t want much to do with this. About this time is when “we” developed our “Get Out of Debt Plan”. I knew something needed to change financially and one day while driving home from work I stumbled on the Dave Ramsey radio show. On this particular show Dave was, rather harshly I think, telling some poor sap to sell their freaking cars and swap them for something they could actually afford. The idea resonated. In one fell swoop I could not only eliminate many tens of thousands of dollars in car debt, but we could also free up money each month that could be used for paying off other debts.
I approached my ever-supportive wife with a plan to eliminate all debt, with the exception of our house, ASAP. Reluctantly she was on board and within about two weeks I’d sold both of our new cars and was left with about $6,000 from the transactions. My wife’s new SUV was replaced with a low-ish mileage, 9 year old mini-van (now you know why she wasn’t initially thrilled with “our” plan 🙂 ). I think we paid about $5,000 cash for the van and with the remaining $1,000 I bought a then 20 year old car with unknown miles for $700 (it was a 1989 Dodge Ares K car). The van, while still a minivan, at least looked nice. My K car however was butt ugly! I didn’t care though because both cars were paid for and it felt great! And just like that we’d eliminated a huge amount of debt.
About a month later I was unexpectedly let go from my job and didn’t find another one for 14 looooong months. We refer this this time as our Dark Year. Life got hard.
The Dark Year …. 2011
The minuscule amount of money we’d managed to start saving was gone almost instantly. Unemployment benefits were just enough to keep food on the table and lights on in the house, but not much else. Had we not sold our cars when we did, they almost certainly would have been repossessed by the banks. We were in serious danger of losing our home, which we’d bought in late 2008 at the peak of the housing market. We were so far underwater on the home that we couldn’t even sell it unless the bank was willing to agree to a short sale.
In an attempt to get our hands on whatever cash we could, we sold almost everything we owned that had any value at all. My wife and I took a janitorial job cleaning an office building one night per week. An old high school friend let me work for his demolition company for a few months. Another friend threw a freelance project my way. My parents and in-laws put tires on our car and bought groceries more than once.
As a husband and a provider it was a soul-crushing, humiliating, confidence destroying time which mercifully came to an end when I got a job offer in December 2011. The new job was in another state over 1,000 miles away from home, away from our family, friends, and all that was familiar to us. Our final slice of humble pie came when I had to ask my dad and brother for money to help pay for a moving truck. Tough times indeed – I’m glad they’re in the rear view mirror.
Back to the future …. 2016
I started my new job the second week of January 2012 and have been with the same employer ever since. It’s been just over four five years, but our Dark Year still has a profound influence on my life. I’m terrified of debt and in less than a month my wife and I will be totally debt free.
Those old cars that we bought in our initial Get Out Of Debt Plan served me and my family well for a good five years. They weren’t much to look at. They weren’t fancy. It wasn’t always easy on the ego to park my 1989 Dodge Ares at work in between a 2015 Mercedes S-Class and a new Porsche Cayenne, but I was more interested in buying a better future than buying a newer car.
The van finally gave up the ghost a few months ago. My old K Car kicked the bucket about a year earlier. So now we’re a one car family and I’m taking the bus to work. We’ve learned a lot of lessons over the years, but nothing more important than this:
The best thing you can buy with money is freedom.
Today life not only feels good – it is good! We’re not there yet, but we’ve got a plan to Get Rich Quick’ish. We’ve made a conscious effort to reduce our expenses wherever possible (step one). We’re investing our surplus money (step 2). And we’re avoiding debt (step 3). Rather than buying stuff (i.e. garbage) with our money … we’re setting it aside so that we can buy our financial freedom tomorrow.
So that’s who I am. Maybe you can relate to my story. I hope you’ll check back from time to time as I do my best to share my story as we blaze our path to financial independence! If everything goes according to plan, we’ll be there in 10 years or less – and to me, that’s what I call getting rich quick (ish).