the power of compounding — in our incomes
people in the pf world talk a lot about the power of compounding over time, and we want to talk about how this power has been made evident to us most of all: in our incomes.
when your finances don’t fit into the standard box // lies the financial industry tells us
once we started planning in earnest for early retirement, we quickly realized: financial calculators all take a one-size-fits all approach. but what if your finances don’t fit neatly into this one-size-fits-all box?
getting comfortable with risk
the whole idea of early retirement of course feels like a risky proposition. but here’s the thing, to misquote the princess bride: life is risk. anyone who says differently is selling something.
how blogging has changed our finances and our hearts
we started this blog because we crave that connection with other folks who are doing what we’re doing. what we didn’t expect is how much blogging would change our finances, and our hearts.
on not following a budget
for us, trying to follow a line-by-line budget feels both overly restrictive, and too much like a diet in which you’re tracking calories. it’s not sustainable. following a budget makes us constantly want to cheat, or wonder when the diet is over. but we’re doing just fine without a budget!
moving on from badass
the word “badass” gets thrown around a lot in personal finance/financial independence circles. that’s not the full story. all of us who are working toward or have achieved financial independence have one big thing in common. we’re lucky.
retiring in a high cost of living area
we frequently see articles about great places to retire based on cost of living, and we think to ourselves, “wow, if we sold our house and moved to one of those places, we could retire now.” but we decide again and again to stay put.
early retirement is a marathon, not a sprint
we like to remind ourselves that early retirement is a marathon, not a sprint, and the worst thing we could do is burn ourselves out early in the process by being too strict or restrictive. the key is knowing yourself, and what you need to be successful and stick with something.
what’s best on paper or what’s best for your soul?
in planning for our early retirement, we often think about the question of whether the best decision on paper is also the best decision for our souls, or whether the two might be different.
net worth progress
it’s pretty amazing how much motivation a goal can provide, and the chart is proof that having a goal — even if it was abstract back in 2011 — has worked mightily well for us.
will money become a source of tension?
in retirement, our income will go way down. we’ve budgeted and planned and made a slew of spreadsheets, and in theory we are okay with that. but will money become something that stresses us out, or — worse — that gets between us?
how we’ve saved our stash
some of the ways we’ve saved what is by any measure a lot of money. not enough to retire yet, even at the modest level we’re shooting for, but still objectively a lot.
impermanence and freedom
everything in our house that needs fixing or replacing means fewer dollars into our retirement savings and is, in other words, a direct assault on our escape plan, our freedom. but now, we’re trying to think of this as a lesson in impermanence.
why we don’t talk numbers
one of our favorite personal finance sites keeps a running tally of bloggers’ net worths. while we love seeing how others are doing, we don’t share our numbers, and we have a few good reasons why we don’t.
a two-part retirement
we’re going to live like cheapskates for the first 18 years of our retirement, and then if the markets cooperate, we’ll live a little larger in our later years, once we can tap our 401(k)s. for us, this plan is perfect. live cheaply when you’re young and resilient.
banking for the future
we advocate taking a fanatical approach to banking airline miles. most airlines require five coast-to-coast roundtrips to earn a free domestic ticket. if you take those trips on different airlines, they add up to essentially nothing. it’s only by concentrating your travel on one airline that you get the benefit.
quitting the side hustle
we realized that in order to earn that money, we had to restrict travel for work, which restricted how much we could commit to projects, which restricted our upward mobility and earning potential.
backup plans
at least one of us is not a gambler by nature, preferring things to be predictable, controllable and known (even if those concepts are themselves just illusions). but this is, for us, that rare thing in life that’s so worth doing that it’s also worth a pretty substantial risk.
the cost of time
we value time over money. we value people over money. we value experiences over things. we’re willing to live on a whole lot less than we currently earn.
