When striving for Financial Independence, it is important to set goals that allow you to evaluate the path you are on. Outlining your values related to these goals will help to focus your energy and resources to make those goals happen. Below I share an excerpt of ours:
I began toiling with the idea of a blog launch in 2015 as a way to track our journey as a small family. I would like to think we have lived an eventful few years and it seemed like it would be an excellent way to document some of those changes. It kept getting put off as a task for “tomorrow” until I experienced a medical scare that put things into perspective. The time was now…both to start the blog and to really start flexing our financial independence / retire early (FIRE) muscles.
We have always been pretty good savers except for that one time we thought spending $36,000/yr for a 450 sq ft studio apartment in Midtown Manhattan was a good idea. That was an expensive year but we learned quite a bit because of it. Since living in that space, we have since maintained a 40%+ savings rate and we are continually looking to increase it. So here we are sharing our journey towards financial independence.
We hope to inspire others along the way and hopefully show other growing families that children are not a hindrance or anchor to your financial success, but a catalyst that makes saving for financial independence an even more virtuous goal.
Reconfigure Millennial Habits
My wife and I are smack dab right in the middle of the millennial generation. In many cases we have the stereotypical routes of many in our generation:
Liberal arts degrees? Check; Graduating post-recession? Check; Moving from the Midwest to urban, economic hubs? Check; Hopped jobs at least once in a 12 month span? Check; Used the word literally incorrectly? Check; Used Uber as our bar ferry? Check; Spent a year where most meals came from Delivery.com or Seamless? Check; Participated in Bottomless Mimosa Brunches? Check; Paid an overdraft fee? No thanks; Graduated with student debt? Nope; Carry a balance on a credit card? Heck no.
Okay, so we don’t hit all the stereotypes but we do understand how easy it is to fall into the financial traps. Luckily, we were each able to avoid them at all costs.
I worked two or more jobs at a time while in university – Line cook, food vendor at stadiums, parcel handler, pharmacy technician, law clerk, and congressional intern. I was all about the hustle and wanted to prove I could make my own income. I did this while going to school full-time and being very active in 5+ extracurricular/social organizations.
My wife was part of a really incredible co-op program at her university. She would go to school for a semester, then work a full-time paid internship the next semester. With the money she made through her paid internships, she was able to afford the full cost of her tuition. An impressive feat!
Now, I understand not everyone has the same financial foundation as we do, but I’m hoping that by offering day-to-day insight into our push for financial independence and early retirement readers will be encouraged to feel the FIRE under their bums! Millennials are the first generation to truly have investing fully at their fingertips. Countless low or no costs tools are available (think Betterment or Fundrise) that level the playing field for investing in various assets. Yet I am shocked about how little some of my millennial friends and acquaintances are saving for the future. I even know people who aren’t even reaching the full match on their 401(k) and giving away the opportunity of free money and the related compound interest. This has to change!
It is truly unfortunate that rudimentary financial advice including budgeting and investing are completely devoid in today’s classrooms but that is an article for a different day. To be honest, with the hustle mentality my wife and I both share, we likely would be 3-5 years ahead of where we are now had we fully grasped the concept of FIRE earlier in life.
As pensions die out and the Social Security ponzi scheme runs dry, our generation and those coming after us will have nothing to rely on but what they have saved for themselves. We hope to empower others to implement a few steps to their financial lives that will put them on a track to a better life.
Passing Down The Gift Of Financial Independence
The most long-term goal we have is passing down the gift financial independence on to our children. Do not think of this as simply passing down whatever monies we have left over in our old age in the form of inheritance. While it would be a great honor to bequest the full fruits of my labor to my family at my passing, what I will be focusing on is much more valuable – the transfer of knowledge.
Through this blog, you will experience first hand how I will be teaching our little LiveFree(s) the value of a dollar. Money and wealth were completely foreign concepts to me before I turned twelve. Once I had my first job, I looked at money only as something to spend. We will be teaching our children about three general buckets to money: spend, contribute, invest from a very early age.
Escape Paycheck Dependence
Let me first start by saying that my family is incredibly lucky. I work for a multinational firm in New York City full of incredible growth and learning opportunities. My colleagues are second-to-none and I am very happy with the career trajectory I am on.
BUT… There’s always a but, isn’t there?
I want to have the flexibility to do what is best for my family when we want to do it. To be clear, that does not mean I quit my job the minute we hit our FI number. What it means is I strive to have the option to press the eject button when we determine the time is right. Be it for health, family, travel, or something in-between, that overall flexibility already feels so liberating, and we haven’t even reached it yet.
You will see more about this topic in later posts as the freedom of mobility is what lit our personal FIRE journey. Having enough flexibility in our daily lives that we could buy an RV and traverse North America became one of our top goals. We are not quite there yet, but this is definitely on our list. We aren’t sure if it’ll be for a year or permanent, but we look forward to sharing that part of the journey once we get here.
Although they all operate a little bit differently and are not necessarily financially independent, I would like to give a shout-out to the families that inspired us to pursue our financial independence. It was through watching these families travel that made us initially think, “how do we do that?”
Financial Independence & Early Retirement
The biggest goal of them all. Full financial independence. Continuing on our current trajectory, my estimated retirement age is 51. A few important factors here to understand is that we currently live in one of the most expensive MSAs in the United States. Shockingly, we do not plan to retire here. Moving to a city with a more reasonable COL (cost of living) would drastically improve this figure. I use a few different sources to follow our progress towards this goal. The top two are Personal Capital and the Mad Fientist’s Laboratory.
We have not always lived frugal lives and at some points I even still wonder if we do now. We often feel like we live in excess but then I see report after report on the average savings rate or debt held by a traditional American family and I realize we are not “normal.” In fact, our aggressive cost savings techniques often look fringe to those around us.
A great example I had recently was when I rode my electric scooter to an organization meeting. It was less than 3 miles from my house and took less than 15 minutes to get there by scooter. When I rolled up, condescending comments about my choice of transit were plentiful. While they passed judgement, I couldn’t help but think how I spent no money on gas, no money on auto insurance, no borrowed money to finance a car, no licensing fees, and nothing on routine maintenance. Why am I concerned with what they think?
I say this with the intent to inspire. When planning for Financial Independence & Early Retirement, you will find that:
- You are weird for not borrowing your future income to pay for today’s expenses.
- You are fringe for shopping at discount grocers and secondhand.
- You are ill-informed for not buying a 3500 sq ft home as an ‘investment’ for your family of three.
- You are naive to think that you can retire in your 30’s or 40’s.
In reality… You are the exception to the rule. EMBRACE IT. You will be travelling, volunteering your time, and building memories with your family rather than punching the clock for the next 30 years.
The numbers do not match our feelings and I believe this may be related to our somewhat nomadic nature over the course of the last decade. I have lived in 10 different residences in the last 7 years. Meanwhile LiveFree Mom has lived in two countries, 5 cities, and countless more apartments. As pseudo-nomads, we don’t acquire belongings because we know we are just going to have to move it in a few months. I am quite certain this constant churn of travel has cut down on accumulation of items and in turn benefited our frugal mindset.
Importance Of Family
It is pretty simple. The less we spend now, the more we have for later. The more we have for later, the more time we spend as a family long-term.
I used to be a big spender. More suits than days to the week, numerous pairs of Allen Edmunds shoes and accessories. Name brand sunglasses, watches, the list goes on. I used to be a big spender. That changed very quickly when we had our first child.
No, it is not because children are expensive. They are actually quite cheap early on if the mother breastfeeds (free food!).
No, it is not because we went from two incomes to one when my wife quit her job to stay-at-home.
It is actually because I kept my job. As the breadwinner, I spend over 2 hours a day commuting to work. Electric scooter, train, run to different train, electric scooter – repeat in reverse later in the day. I then spend far more than 40 hours a week under fluorescent lighting staring at three massive monitors for hours upon hours at a time. Like most working parents, I spend the majority of my waking hours away from my family – and I don’t like it. I don’t like that I am not nearly as present as I could potentially be for my children. Thus financial independence is a necessity. I like what I do for a living but I do not like knowing what I am missing out on while I am doing it!