đ Starting The Dad felt like retirement
An introduction to F.I.R.E. (Financial Independence Retire Early)
âI feel like I might snap and quit my job. We should probably save money just in case,â I told Laura after a particularly disgruntling day at work. We had to laugh. âMy god, Iâm so neurotic even my nervous breakdowns are planned in advance.â
Someone told Laura recently that they think itâs brave that I am taking such a huge risk starting Channel 3. Or even before that, leaving a safe comfy corporate job to work on a new dad brand with zero followers.
It honestly doesnât feel that way to me.
Mostly because Laura is a bad ass with a great job that sheâs freakin amazing at and she is the familyâs breadwinner by a long shot. She deserves all the credit. My advice to anyone out there wanting to live a good life: marry Laura Willis. Wait, what?!
But also because making a move like this is something I have daydreamed about obsessively for over ten years.
None of it would be possible if I didnât stumble upon an internet sub-culture called F.I.R.E. (Financial Independence Retire Early) 10+ years ago.
It changed my life. Iâd like to tell you about it in case it changes yours.
âCheck-my-privilegeâ Disclaimer
Having the means to sit here and write⊠ANYTHING⊠on high speed internet on my fancy gaming PC in my home office on a Monday morning while my kids are off at a great school and my wife is at work means that I am privileged beyond measure. I do not take that for granted. I realize that with this privilege comes great responsibility, to create opportunities for others, especially those with less privilege, give back, volunteer, and so forth.
This post will reek of privilege. Some of the personal financial nature in it is intended for middle class corporate employees, perhaps in tech or middle management.
But regardless, the spirit (âspend less, save, invest smartly, and focus on what is truly important to youâ) is universal.
Letâs say youâre making good money.
You live in a decent house, decent neighborhood. You donât worry about paying the bills on time. Youâre one of the lucky ones.
And you get a promotion and big raise! Immediately you think, âOHHH! I deserve a car upgrade. Or kitchen renovation with different color cabinets or whatever.â
Thereâs another option people donât talk much about: do nothing.
Let your income go up as you get older, but keep your living expenses the same. WHAT. Shocking, right? đ€Ż
If you do this in your 20s, and keep your living expenses stable, while you move up the corporate ladder, eventually your savings rate will be quite high. Invest the savings and youâll be shocked how quickly it grows.
âBut why do I work, if not to reward myself with nice things?â
Do nice things really mean the most to you in life?
Thatâs not rhetorical. Really think about it. Maybe having nice stuff does make life worthwhile to you.
I like nice things, but the joy of it fades fast and Iâm left feeling unfulfilled again.
What means the most to me is family, independence, and the joy of creating things that wouldnât exist otherwise.
Working in a corporate job took its toll on me because it was not aligned with my values of independent creativity.
Maybe you relate. Maybe youâre working a job you donât like. Every Sunday you feel sick with dread because you have to go in on Monday. If so, Iâd say taking care of that situation takes priority over those new cabinets.
Would you rather have nicer cabinets, or 2 years of your life, free to pursue whatever you want? The answer is easy for me.
So when I stumbled upon folks like Jacob Lund Fisker describing his extreme lifestyle that enabled him to retire at 30, a lightbulb went off for me.
F.I.R.E. math
Keep expenses low, save, invest, and when the interest/gains on your investments are greater than your living expenses, you are retired.
Because the return on investments are enough to pay your cost of living. Get it?
(Source: Your Money Or Your Life)
Letâs say you can count on 5% return on investments. That means if your living expenses are $50k per year, you need $1M in investments, and BAM! Youâre retired. You can live on the interest on that investment account, without ever touching the $1M principle.
âOh sure, no problem. Iâll just get A MILLION DOLLARS. Easy peasy.â đ
I know I know. But wait, if your living expenses are $20k per year, you only need $400k, and BAM! Youâre retired.
Regardless of your situation and reaction to these numbers, you can see that the biggest factor in how much you need to be financial independent is NOT your income, it is your COST OF LIVING.
Conventionally, if you ask a financial advisor or whatever, âHow much do I need to retire?â Theyâll ask for your income, which should have nothing to do with the answer! Unless you are spending nearly everything you earn and increasing your spending as your income increases. (Donât do that.)
If you spend a lot of money, youâll always be chained to your cubicle (or open office arrangement). If you live within your means, and if youâre lucky enough to have a well paying job, it is possible to retire extremely early.
Itâs not all or nothing.
I donât have a lot of money. By these definitions, I am not âfinancially independentâ and I am not âretired.â But like most things in life, it is NOT all or nothing.
Most of us are somewhere between spending-every-penny-you-earn-and-drowning-in-debt and living-off-the-land-with-a-1-million-dollar-investment-account.
Keeping your cost of living low and investing smartly gives you what some people call âF Youâ money. (Not me tho, I donât curse.)
This means if youâre put in a position that is compromising to your values, ethics, or the things that bring you joy in life, you have the freedom to say âF Youâ and walk away without financial ruin.
Or in my polite case âThank you very much for the opportunity. It means so much to me. But itâs time for me to move on and pursue other interests. I really hope we cross paths again some day. Thanks again!â money.
âTYVMFTOIMSMTMBITFMTMOAPOIBIRHWCPASDTA Moneyâ doesnât sound very cool.
When I discovered the concept of F.I.R.E. it immediately resonated. It made so much sense to me.
It was just before Laura and I had kids, right after we moved into our house.
I did so much reading on the topic. Blogs, websites, and tons and tons of books.
I started with Early Retirement Extreme, which is, by definition, pretty extreme.
This led me to the infinitely more accessible, Mr Money Mustache. His name is Pete. I traded emails with him in the early 2010s and I even designed an early version of his website banner! He is prominently featured on a new Netflix documentary called Get Smart With Money! Check it out.
I also read an older book on the topic called Your Money Or Your Life. I highly recommend this. There is some financial advice in there that is outdated that you can ignore, such as investing extensively in T-Bonds, but the spirit of this book is essential. Paraphrasing: âDonât think of a dollar as currency to buy things, think of it as the amount of your life you spent earning that dollar.â Time is money, money is time⊠Your money or your life.
The investment marketplace in inherently confusing because it makes it easier for investment products to gobble up your money. Keep your investments simple, donât expect to get rich fast, be patient, and let the market do its thing. The best book on investing I found is The Four Pillars of Investing by William Bernstein.
But basically, spend an hour learning about Lazy Portfolios. Broad, passively-managed, low cost index funds. Thatâs all you need.
I feel so lucky to have stumbled upon this financial philosophy in my 20s, when I was still basically living like a college kid. Iâve kept that frugal mentality going as long as I possibly could, keeping cost of living down.
Iâm not talking about clipping coupons. Iâm talking about focusing on the biggest expenses: house (and mortgage rates), getting rid of expensive debt (student loans) first, transportation, childcare, education costs, food, furniture. In that order.
Making smart decisions in these areas is worth literal CENTURIES of coupon clipping.
Practical examples: I do almost all car/home maintenance/improvements myself, Iâve never bought a new car (or a car newer than 3 years), I busted my butt to get my MBA done while GE would pay for it, and my kids go to public school. EtcâŠ
(I changed the brake pads and rotors in my 15 year old Saturn Aura yesterday. âIt belongs in a museum!â)
Your mileage may vary. (Pun intended as always.) You donât have to be as extreme as me to get value from this philosophy. But I have tracked every penny weâve earned, spent, or invested since 2007. Itâs that important to me.
Not because of the money and not because Iâm cheap. But because of the independence it allows.
Back to The Dad StoryâŠ
On September 5, 2017, the moment I had worked so hard for finally happened. I got a job offer for Editor in Chief for The Dad.
I took a pay cut from my previous job. Because of the decade plus of obsessive financial tracking, I was totally comfortable with this move. It maybe looked risky to my GE and 84.51 colleagues, but to me, it was a no brainer and it felt meant to be.
I became an employee of Some Spider Studios. (Iâve been asked about this before. I was not a startup founder like I am now. I had salary and benefits. It was a great situation to be an employee. Less risk. But on the other hand, less ownership of course.)
It will be a long time before I am âretiredâ from a conventional definition.
But honestly, leaving my corporate job to work on The Dad felt exactly like retirement.
To me retirement is not being-free-from-work, but rather being free to work on the things I want to work on.
So I guess, ummmm sure, I kinda sorta âretiredâ in 2017 at 34.
Since then, with The Dad and especially with Channel 3, Iâve never worked harder and more hours in my entire life. But it feels amazing.
Retired life is the best. Not as much bird watching and puttering to the mailbox in a bathrobe as I expected, but itâs been good.
K back to work.
This was Chapter 20! Here is the chronological đ The Dad Story Table of Contents.