Freedom through Frugality: Sabaka's Journal

[Sabaka]

Hi everyone, I'm new to the forums, and to the whole area of early retirement/financial independence in general. I thought, however, that it'd be good for me (and, hopefully, helpful to some of my friends here) to start a journal regarding my journey towards FI and the good life.

I suppose it would be most helpful to begin by telling you guys a little about me, my discovery of this entire community, and my reasons for wanting to pursue FI (although why would anyone not want to?). So, without further ado, let us begin.

My name is Sam, I'm nineteen years old and was born (and have lived my entire life) in a single town in Britain. My mum is a teaching assistant (low earning) and my Dad is a telephone engineer (relatively high-earning). To prevent rambling, I shall summarise my general family life up until this point: Stable and comfortable.

I finished college (or high school, for my American friends) last year. University does not currently appeal to me. The combination of debt, not knowing what I want to do, mediocre college results and a tiredness with formal academia are the causes of this. Currently, I am a warehouse assistant in my local Costco store, a job I absolutely despise, due to (from my own perspective) the meaningless nature of the work. I restock products that contribute to our materialist society, and I hate it.

I am also a Reservist, something that I enjoy a little more, and I have thought about entering the military full time. But yet I am not sure I want to do this, and so I delay. Perhaps one day I will join full time, or maybe I'll even leave the Reserves. At this moment in time, I couldn't really tell you.

I discovered the concept of FI through Mr Money Mustache's podcast with on The Art of Manliness. It was the definition of a lightbulb moment. Everything that MMM said on that podcast I found myself nodding my head to. I've always been confused with the society that exists around me. Why would my school peers laugh when I told them my trainers were three years old? The same laughter whilst I padlocked my bike as they climbed out of their parent-paid for cars. Sometimes this sort of societal pressure led to me relenting, splurging on wasteful and sometimes destructive habits. I'd lost £700 to gambling before I found the will power to stop. Luckily, that side of me co-existed along with the frugal, better me. So I learnt about finance, saved a good proportion of my paycheck and always looked for the cheapest deal.

Yet that lightbulb moment has pushed me to new levels. Many hours were spent researching this whole topic. I still have so much to learn. I have yet to read the ERE book, and I've only read a few the blog posts on both the ERE and the MMM websites. But my hopes for this journal are that it'll help my learning, and hopefully help others too.

I have no idea where I'm heading, and, until I discovered the concept of FI, no real goals. That's what has changed for me. The idea that by age 30 I can be retired and pursuing my idea of the good life (preferably in Italy, but more on that later ) has become my goal. Thanks for reading .

[Sabaka]

I was going to wait at least a day before my second post, but, alas, excitement has overtaken me. To help any readers better understand my current position, I'm going to post my guaranteed monthly expenditure, my averaged monthly income, and my current savings/investment portfolio. Before I do this though, I would like to insert a caveat. I am very fortunate. I currently live at home, meaning I pay very little in rent, food costs, or utility bills. I realize this is not a possibility for many others, and therefore apologize if I ever sound naive in any of my journal posts. However, here is the overall state of my finances.

Expenditure

Type (cost) Cost (£) (Per Month)

Gym 17.99
Rent 60
Phone contract 31.5 (High, but will be lowered substantially once current contract has finished)
Subscriptions 42 (£30 of this is a newspaper subscription, a splurge I regret, but will remain with me until Nov 2017)
Muay Thai 70
Food 50 (Food is estimated, I averaged it out over the months recorded and it came to this)

Income:

Type (income) Income (£)

Job 1085 (can be slightly lower or higher, my hours are not fixed).
Army Reserve 32 (Same, could be zero one month, or a bit higher the next).

Overall, my estimated surplus income is £845.51 pence. It generally stays close to this. If, however, it changes significantly, you'll be the first to know .

Savings

All surplus income is deposited in my savings account, which is comprised of a standards stocks and shares account, a stocks and shares ISA, and a lifetime stocks and shares ISA. The combined worth of the accounts is at this time is £3,607.97p. This is currently less than I have deposited into the accounts . However, most of these investments were made before my discovery of FI (and specifically, Index Funds ). A time where through buying stocks and shares I thought I was Martin Gecko . I have changed my ways, and now shall be only investing in Index Funds.

There you are, that's everything. If any of you kind readers can suggest improvements I'd be extremely grateful. Alternatively, if you have any suggestions on what I should upload to the journal next, again I am all years.

Thank you very much!

[Dragline]

Nice to meet you. Welcome!

You should read the ERE book if you have not yet. I think the basic recommendation for someone in your shoes would be to find ways to increase income, which may or may not involve some formal training or certification. Right now your income potential is your greatest asset (oh, to be young!)

[thrifty++]

Awesome that you have caught on with things so young!
The biggest financial mistake I went about in my life was incurring lots of debt and lost opportunity cost earnings from studying. I wish I had discovered ERE thinking before then like you to work out some ways to acquiring high paying skills without paying to earn such skills (or paying very little for them).

[Sabaka]

Hi there everyone! I promised myself I wouldn't post for at least a couple of days but I cannot help myself! Apologies in advance for the avalanche of posts I will most likely upload in the coming days and weeks, they will most likely peter out once I've run out of things to say .

Thank's for the suggestions Dragline and Thrifty! I've just about to buy the book on Kindle and will attempt to start it today. I'm really looking forward to it! I read the opening chapter just now on Amazon and it really struck a chord with me. I suppose I was a little worried that it may be too advanced' for me, however, based on the first chapter it seems very engaging.

Thrifty, if it's not too personal a question to ask, would you mind going into a little more detail as to why you regret paying a lot for your study? It's just I guess I feel similar to you, although I remain a little worried that If I don't go to a 'proper' university I may suffer in gaining a career which will help me to achieve my goal of FI

You've hit the nail on the head Dragline. In order to achieve FI (or at least be close to goal) by age thirty, especially given that in the future I shall have to factor in a whole myriad of other costs such as rent and other bills, I will need to improve my income. Me stating that is the easy part, the more difficult part is working out how to do that!

My current thought is based on 3 future (possible) paths.

1: Gain a degree. I'd look to do this through the Open University (basically a distance degree), to eliminate accommodation costs and lower tuition costs. It would also allow me more flexibility to pursue part-time work.

2. Join the military.

3. A vocational qualification. I've loved watches since I was a child, and I've recently been looking into gaining a qualification (and pursuing a career) in watchmaking. My trepidation with this is that I have never taken apart a watch in my life! I feel it would be quite a risk to put substantial money down towards gaining a qualification when I may, in fact, be rubbish!

The problem I have is that some days where I feel so inspired and focused towards one of these paths, and on the very next day it will be a different path . I'm concerned that I could invest half of my current savings (and many hours worked at Costco ) on one of these paths and end up out of pocket and nowhere closer to my goals.

Now, I best be off to start that book! Thanks again for the advice, and thank you for reading.

[Sabaka]

Hiya everyone! Given that we have just entered into a new month, I thought it would be good to post an entry detailing my 'ledger' for the previous month (April). This is simply a record of any payments that fall outside of my recurring costs. I find it helps me to keep track of those little purchases, which despite seeming small can actually add up to quite an amount over the course of a month! Anyways, here's the ledger:

Name Cost (£) Date

Muay Thai Gear - 297.65 - 1/4/17
Food - 3.45 - 6/4/17
Bounce bars - 4.99 - 6/4/17
Food - 23.65 - 10/4/17
Bag - 20 - 10/4/17
Food - 2.2 - 11/04/17
Food - 1.4 - 19/04/17
Food - 15.67 - 22/04/17
ERE: Book - 7.47 - 27/04/17
Water - 0.45 - 27/04/17
Boxing - 66 - 28/04/17

Total (£) 442.93

Overall, not too bad a month. The Muay Thai gear was expensive, however, it needed to be bought and there was simply no second-hand deals which worked out. With items such as these, I believe sometimes you do have to pay the price for the quality and durability, so therefore I am not too worried about the expenditure. My total food costs came in at £46.37, so below my monthly average!

The boxing was expensive, and that cost is comprised of only the cost of merchandise and food and drinks, not the tickets or travel . However, that is the subject of a later post, so I'll leave you in anticipation .

On a side not, a kind relative has stepped in and bought the remaining contract for the newspaper subscription off me, meaning I can update my recurring costs table, something that I'm very happy to do! The updated table follows:

Type (cost) Cost (£)

Gym - 17.99
Rent - 60
Phone contract - 31.5
Subscriptions - 12
Muay Thai - 70
Food - 50

Total (£) £241.49

Awesome, that's everything! Thanks for reading !

[Sabaka]

Hiya everyone! Just thought I'd post a quick update regarding my current situation. My main focus at the moment is learning more about early retirement/financial independence and formulating my own strategy to achieve these aims. I have therefore set my goal as to read everything I possibly can about the subject!

I have finished ERE, and all I can say is what a fantastic book. I believed I was fairly frugal myself, but after having read the book I have realised there is a lot more I can do. One specific suggestion I am looking to partly implement is the idea around buying ingredients that are on sale to create recipes, whereas I have been searching out recipes and buying ingredients for recipes.

Some ideas seem a little extreme for me. Mainly the idea of washing clothes using a barrel in the back of an automobile! .

My next target will be to finish reading a new book I have just purchased, 'How I Found Freedom in an Unfree World'. I bought it on the recommendation of this forum, so I'm hoping it will be good!

That's all really, I'll post another summary at the end of the month. Thanks for reading!

[thrifty++]

Thrifty, if it's not too personal a question to ask, would you mind going into a little more detail as to why you regret paying a lot for your study? It's just I guess I feel similar to you, although I remain a little worried that If I don't go to a 'proper' university I may suffer in gaining a career which will help me to achieve my goal of FI

Sure. After graduating from university I had $62.5k in debt which was a direct result of studying, all on fees and books and some related to basic living costs during periods where I was living away from home and I was not able to juggle working part time with studying due to study demands. None of this was reckless consumption debt. To that you must add the opportunity to cost of not earning money during that 6 year period from only working part time. Easily this is another 30k gross x 6 years. Maybe that is $25k net since tax is so low at that income. So thats $150k. So altogether around $212.5k was the whopping cost to me of going to university. Note that is assuming I had remained on a lowly paid job the entire time without making any career progress. Then you must also consider the lost investment income on savings over that period of time, of maybe 7% each year. With a lazy estimate, maybe something in the vicinity of $230k. I am sure I actually have the precise calculations somewhere but I cant find them at the moment, My story is a fairly common one for people who dont come from families with money, who dont pay for the fees or cost of living or provide free accommodation for the duration of university.

While I started on a measly grad salary fast forward a number of years and yes I do have a good income now. However I just dont think its enough to have eaten up that whopping $230k odd financial deficit that I started my working life out with, Its probably more cost effective for people going the traditional pathway and planning to work 30 years or so, in which that deficit will be eaten up. But if you are trying to shorten your working life it doesnt seem like the most efficient and it seems like playing catch up. Bigtime.

Alternatively I think maybe if I had the awareness at that age you now have might have focused on strategies to avoid that financial deficit. Eg maybe find a way to go study in Europe for free. Diligently hunt out scholarships to cover fees. Instead of focusing on the whole university thing discover a specific and useful skill that pays lots of money and attend a shorter course which provides that skill, Get a part time job at a university which allows free study for employees. Or just enter the workforce and be motivated and curious and seize any opportunity to develop new and specific well paid skills. Or pick up some sort of trade or skill while working so you get paid while you develop. Eg I have a 33 year friend who is a "driller". Dont understand what he does exactly but something about using big machines to test the soil for a number of things. He started our just as a labourer at 17 (earning $18 an hour full time) and then just gradually learned the skill of using the machines. His pay got bigger. Then ultimately he bought some machines and then engaged some employees and started to contract out. He was telling me about how much his charge out was per day. Cant remember the details but it was huge. He is much richer than I am. At the moment he is not even working for a while as he is taking a break. He is not at all ERE focused but just has lots of money now almost by accident. So while he might not have had jobs which are as status oriented as myself it is one of many examples of how much better off you can be by avoiding the whole university fiasco.

I guess for some people going to university might be the way to gain income. But I think finding a way to avoid paying any fees and ensure you dont rack up debt on basic living costs and keep the university study as short as possible might help reduce the deficit of it.

[Sabaka]

to that you must add the opportunity to cost of not earning money during that 6 year period from only working part time. Easily this is another 30k gross x 6 years. Maybe that is $25k net since tax is so low at that income. So thats $150k. So altogether around $212.5k was the whopping cost to me of going to university.

Thanks very much for replying Thrifty, that was a very interesting read! When I have previously thought about university I did not factor in the lost income from working. Having read your post I now realise that once this is factored in the financial deficit becomes much larger, and much more scary! I don't know how it is where you are based, but in the U.K the idea of degree = success is pumped in quite relentlessly, I remember in school that whole days were devoted to applying for university, whereas the idea of learning a trade or applying for apprenticeships was neglected. This combined with little teaching regarding financial efficiency leads to situations such as you have described.

I can't claim to be much different. If I had gotten the required grades to make university a more viable option, it's likely that I would have followed a similar path to yours. I suppose like many others I discovered the concept of ER/FI through accident, when I entered 'the real world' (I still think I'm in my own world! ) although I guess I am lucky to have found this path whilst young.

My issue currently is having discovered this concept, I now have to work out how to turn a dream into reality. However, I believe that if I can set FI as my goal, I can discover different paths leading towards it, it's just hard taking these first steps!

It sounds like you have taken these steps, congratulations for doing so! And thank you for your insight, as it will help me in taking my first steps also.

Thanks again!

[thrifty++]

I don't know how it is where you are based, but in the U.K the idea of degree = success is pumped in quite relentlessly, I remember in school that whole days were devoted to applying for university, whereas the idea of learning a trade or applying for apprenticeships was neglected. This combined with little teaching regarding financial efficiency leads to situations such as you have described.

I am in NZ. Things sound much the same here as in the UK.

I think getting a degree is one way to go about increasing income. But I think its also the safest most conventional pathway these days. To a "comfortable" lifetime of middle class slavery. Sometimes the safest route is not always really the best or easiest. Being more innovative can reap rewards. Moral of the story - I have met shitloads of people who earn lots of money and have lots of money who never paid for university off their own backs after leaving school. They are not homeless and living under a bridge as society would like to portray.

[Sabaka]

Hi everyone! Apologies, this is sort of a spammy post, however, I felt the inspiration to write it, so here we go.

I was sitting outside, in unusually hot/sunny weather for the U.K, reading "How I Found Freedom in an Unfree World". It dawned on me suddenly of how content I was. This is my day off, so if I had been working today I would have just about been finishing off an eight hour nights shift in a Costco warehouse. I dislike my job immensely. It involves restocking products I don't believe are healthy or necessary for other people to spend their money on. It also involves, like most jobs, an obsession with targets and standards. Targets and standards which don't add any real value to the world. What difference does it make to the world if a pallet of 2l Coke bottles is stacked one level lower? Given my lack of understanding regarding these targets and standards, and subsequently my lack of motivation for fulfilling them, I understand that I make a terrible employee. Evidence of this is being constantly told that I "need to hurry up" or "do this thing correctly".

I do try to work hard, I do not class myself as a slacker, but when you don't even know what the reason itself is for working hard, it is difficult.

Anyway, rambling over . So, as I was sitting in the sun reading my book, listening to the birdsong and thinking what I would like to do next on this day where I have no obligations to do anything. I then realized that this was my motivation for FIRE. I want to achieve FIRE so that in the future, every day will be like this. Not 'be like this' in the sense that all I will do every day in the future is read books in the sunshine, but that I will have the freedom to choose whatever I want to do.

This is how I understand financial independence. Freedom from obligation.

That's all really. Again, sorry for the spammy nature of this post, I hope you enjoyed reading it though!

[McTrex]

Couldn't agree more. Working hard or relaxing, doesn't matter as long as it's your choice.

[Viktor K]

No apologies needed for the ramblings. I enjoyed reading through your journal today at work. I often think how I would already likely be ERE'd if I had skipped college, saved all my earnings from my high school jobs, and started on a 40-hour work week from age 18 (26 now). Would I go back in time and do it differently? Meh, on a good day, I like to think it isn't worth sacrificing who I am now for who I could have been. At the same time, can I definitively suggest that you do or do not go to college? Nope, I can't. I had so much fun in college, learned a lot, and grew a lot. But that might have happened anyways, who knows!

[Sabaka]

Would I go back in time and do it differently? Meh, on a good day, I like to think it isn't worth sacrificing who I am now for who I could have been.

I think you've got the right attitude Viktor. It's easy to look back on past events with hindsight and say "well if I'd done x, I'd be y". Perhaps if you'd had taken a different path you may have never even discovered FIRE, or you might be now chilling on a beach in Thailand it's impossible to know. The best we can do is look to the future and decide how we'd like to act now to shape that future .

[Jason]

IMHO, gambling is the worse addiction. I'd rather be addicted to ass fucking Haitian monkeys than gambling. Its the addiction with no secondary causes. You might as well just hand over the keys to your car and house and the pin number to your ATM card. I knew people with gambling problems. After playing nickel and dime poker for 48 straight hours, they would go to Atlantic City and then call me for bus fare. Unfortunately for them, I had my own addictions to attend to, which as destructive as they were, did not involve casinos or monkeys.

Congrats on nipping that shit in the bud and make it your life goal to avoid a relapse.

[Sabaka]

Cheers man I've been thinking about it recently. I suppose gambling is always going to be an attractive prospect, especially to those on lower incomes. You can place a bet in 30 seconds which can win you more money than you earn in an eight-hour shift doing a job you do not like. Hell, I'm still tempted now, but luckily I haven't submitted to the temptation.

Anyways, end of the month, so time for another summary. I am going to try and present it as clearly as possible, so, here goes:


May 2017 Summary


Ledger:

Name - Cost (£) - Date

Bowling - 24.3 - 2/5/17
Food - 16.98 - 6/5/17
Food - 0.65 - 6/5/17
Book - 5.62 - 6/5/17
Food - 20.19 - 16/5/17
Food - 10.86 - 27/05/17
Food - 8.62 - 28/05/17

Total (£) - 87.22

Overall, a good month. Only real 'extra' purchases made were the bowling and book. I don't actually enjoy bowling, it was a date that eventually turned out to be unsuccessful anyway I've enjoyed the book more, although cost wise it is a little worrying that I could end up spending £10-£15 per month on books, so I'll need to get into using the library more. The total food cost for the month was 57.3, so a little higher than my £50 average, however, I experimented with some specialty (and ergo, more expensive) ingredients, so I expected this. Altogether, a good month in terms of expenses.


Savings

Overall, I contributed £1199.81 to my savings accounts in the month of May. This increased amount is due to me receiving a bounty of £444 from the Reserves, which I had completely forgotten that I was due to be receiving. Unfortunately, I will not be able to make deposits similar to this every month!

In other savings accounts news, I sold my shares in both Lloyds Bank (these went up 8% after the Government sold its remaining stake) and Tritax REIT, thereby reducing the number of companies I own shares of to 3. I will be looking to sell these remaining shares as soon as they return to a high enough price. All money was re-invested into my choice of 4 index funds:

- L&G UK Index
- L&G US Index
- Blackrock Emerging Markets
- Blackrock Japan

Overall, I have kept a good savings rate. The total value of my savings accounts, as of this time, is £5.796.03


Focuses for June

I want to finish my current book and move on to another. I hope to read a minimum of two books a month, so if anyone can recommend any to read next, it would be very kind. Does not have to be FIRE related, however, it would be a bonus! Also, I've been looking at possible side gigs to earn a little more money. If anyone could perhaps suggest something, I'd be very grateful )



Right, that's pretty much everything! Thanks for taking the time to read, onwards and upwards towards June!

[Jason]

Nothing sadder than a well put together old lady going into a convenient store to buy her scratch offs on SS day.

[stayhigh]

I hope to read a minimum of two books a month, so if anyone can recommend any to read next, it would be very kind.

Check out reading reccomendations at ERE wiki and blog posts. Also check out MMM reading list. And J L Collins. And Bogleheads. And stoics. And many others.

Being at your age I'd focus on making money and creating good habits just now. Read as much as possible. Be fit and healthly. Set some goals and always keep looking forward. You have plenty of time for all the rest.

[frihet]

Hi there Sabaka,

Nice to read your thoughts I can feel the endless possibilities in your career choice. Have a couple of ideas to share if you don't mind.

I would second not going to college. Unless you really have a burning passion for a well paid field. Otherwise 5 years seems like a waste of time.

Can you join the military and learn a trade there? I work at the oil rigs myself and quite a few of my colleagues became mechanics while in service. If you like being in the military I think you'll enjoy oil field work or similar industries. Maybe mining or shipping could be other alternatives. The oil business is in a big downturn right now, but who knows how it will be while you've completed service.

Another trade that will be needed in the future and me personally thought was fun when I did it as part of a former job. Is automation electrician . We're moving towards more and more robotics and automated industry. A lot of it at the rigs also.

Speaking of, robotics and 3D printing are two other fields worth looking into. Here in Sweden there are 1 year trade schools for 3D printing for example. Not sure what you guys have available.

Service Technichan of drones, robots and 3D printers will be needed for the forseable future. I guess eventually they'll fix themselves. But that is probobly many years ahead.

All these are trades but if your smart enough I would learn programming. Quite a few of those on the forums. But if you where inclined that way you would probobly already be programming

[Sabaka]

Cheers for the advice man . Funny you should mention the Stoics actually, my interest in Stoicism predates my discovering of FIRE by about two years. You're absolutely right in recommending it, it can be a great tool for anyone looking to achieve ER. I'm currently flicking through Seneca's letters, he is my favourite of the Stoic authors, very quotable .

Also, I just read your journal, sounds like you're going to have acheived FIRE in a few months, around age 30? Awesome man! You're at the end goal of where I'd like to be.

Thanks for stopping by and reading, and cheers for the advice Sweden sounds awesome! From the sounds of it, we don't have anything like the technical training capabilities that you have over there. In the U.K, high-end engineering roles such as the ones you mentioned nearly always require degrees. I think this is due generally to the lack of such industries in the U.K. Pretty much our entire economy is geared towards the service sector, good if you want to be a stock trader in London, not so much if you want to pursue the types of careers you describe.

In all honesty, as a career, I am not sure how suited I would be to the engineering sector. I've never been very mechanically minded, and if I had to try and understand one line of code my brain would most likely explode .

My current though at this moment of time is that the military appeals to me most. I really need to research more into the types of roles that may be available to me. I am going to sort out a meeting with my reserve unit to help this research. Although there is no particular hurry, I am keen to get the dice rolling.

Again, thanks for the advice!

P.S: Just read your latest journal post as well. You're killing it! Congratulations )