Deep Finance Journey

Where are you and where are you going?
Post Reply
chickenstick
Posts: 14
Joined: Tue Jan 31, 2023 8:05 pm

Deep Finance Journey

Post by chickenstick »

Hey folks, as I think I mentioned in my introduction post, my wife and I are 30 and 31; we have a 7yo girl and 4yo boy. We homeschool. We are working to be financially independent within the next five years by both (a) earning as much as possible through my job and my wife's business, and (b) reducing our spending as much as possible through implementing ERE principles.

I have a journal I'm keeping on my blog, but thought I would share it here also.

Here's my first journal entry: https://deepfinancejourney.blogspot.com ... -2022.html

--------------------

The posts on the blog up to this point have varied in quality, but now that I've gotten a bit onboarded onto the ERE/FIRE system, I'd like to write in a bit more of a structured format. I'm not fully sure how to begin this more serious post, but here goes. I'll start with background leading up to the hardcore beginning of our FIRE/ERE journey in January 2023. I'm writing most of this while recovering from a week of fever, and I'm not a practiced writer, so bear with the clunky writing.

I first learned about FIRE in August 2021, traveling home from an out of state visit. I had started to deal with some burnout surrounding my job and while on my trip, on a whim, I decided to just throw my resume out there - what did I have to lose? Somewhere during this out of town trip, I also heard of this Mr. Money Mustache for the first time. I'm not sure what brought him to my attention (I think maybe I heard about him through Cal Newport?), but I was intrigued although I didn't have time right then to listen to anything or read any articles. It wasn't until the 10-plus hour drive home that I put on a podcast episode in which he laid out his method of retiring within just a few years.

Why did this idea of retiring early get my attention so quickly? Folks are interested in early retirement for all kinds of reasons. I enjoyed my work, to be sure. That specific job had become a grind, but I did actually enjoy the work that I was doing in software design. I wanted to retire because I had a very clear sense of what my calling was, and I knew I could not do my calling to its fullest extent while I had a full-time job taking 40+ hours per week; regardless of how much I enjoyed my job, I loved the snatches of time I got to do my calling more.

I define calling the way Gary North defines calling: "The most important thing you can do for the Kingdom of God in which you are the hardest to replace." Anybody can do software design, but I knew that I had a very unique calling in research. I'm not going to discuss my calling right now since that would identify me, but suffice it to say, the prospect of never having to work for money again and being free to devote the rest of my life to my calling was extremely persuasive. I knew I had an ethical responsibility to retire as soon as possible, now that I realized it was a thing.

Prior to the podcast with MMM, I had no idea I could retire early - it didn't even enter into my mind. But the podcast gave just enough construction materials to where I could put together a plan and it completely changed my outlook. I knew that if I was to have any kind of a shot at early retirement, I needed to get a job that paid quite a bit more than what I was earning - which wouldn't be hard since I was at the lower end for sure of my market.

As an important aside, my family had gone through a bit of a tumultuous last few years (coupled with a really tight paycheck) and we were all in the need for just a year of stability with no new things. I knew that plunging straight into FIRE was a bit beyond what my family could handle.

When I finished with that podcast in August 2021, I really didn't know too many details about how other people did FIRE, what it really looked like for them, or all the different strategies to get there.

My initial plan in August and September 2021 was to spend Year 1 in my new job, catching my breath and having some family stability with no new things. Years 2–5, I would begin the process of securing approximately 25 rental units, each returning an average of $200 per unit per month. This would cover our expenses, and I could retire by the end of Year 5.

This plan was good enough for me to move forward on what I knew was the next right step: getting a job that paid $80k-100k, which was what I knew I was worth. I secured a new job by the end of September 2021, that paid at the lower end of that range, but more importantly did not have any of the elements that had been causing burnout for me at my previous job. I then took 2022 to just rest and recover from the previous few years.

chickenstick
Posts: 14
Joined: Tue Jan 31, 2023 8:05 pm

Re: Deep Finance Journey

Post by chickenstick »

Here is journal entry two: https://deepfinancejourney.blogspot.com ... -2023.html

--------------------

Picking up from the last blog post, 2022 was a year of rest. It didn't actually end up that restful in terms of things done, but it was restful for me. No intentional wall-to-wall hustling or new projects that I didn't want to do.

The end of December rolled around, and I knew that 2023 was coming up - my year of focus on FIRE. So, knowing that I'd have a business trip in the first week of January and hence plenty of time to read, I picked up several books on FIRE from Amazon:

Financial Freedom: A Proven Path to All the Money You Will Ever Need, by Grant Sabatier
Playing with FIRE: How Far Would You Go for Financial Freedom?, by Scott Rieckens
The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life, by JL Collins
Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence, by Jacob Lund Fisker

I'd read Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin and Joe Dominguez in 2021, and acquired Set for Life: An All-Out Approach to Early Financial Freedom by Scott Trench in Summer 2022, so I had a nice stack of books lined up for my business trip.

All my books didn't arrive time, but within moments of arriving at the airport, I'd started in on Set for Life.

Over the course of the trip, I consumed content like a machine. When I wasn't working, I was either driving and listening to a podcast, or else reading. I finished reading through Playing with FIRE by Scott Rieckens as well as Financial Freedom by Grant Sabatier before I pulled into the driveway (in fact, my wife drove me home from the airport so I could continue to read).

The Simple Path to Wealth and Early Retirement Extreme hadn't arrived yet, but I was so through-and-through convinced of FIRE being the path forward, so much more than I was when I first arrived at the airport a few days prior, and I was on board with FIRE even then!

One of the evenings in January, I plotted out on a Google Doc the next iteration of our five-year plan. This time, building in information I'd been reading about having to do with index funds and so forth. With new eyes, I took a hard look at our finances - I remember sitting in a Walmart parking lot in my rental car going through each of our finances with my wife on the phone, talking through how much we could reduce our expenses if we cut this bill or got rid of that line item. I couldn't believe it - we could go from about $4100 of expenses down to about $3100 or so if we wanted. That was annual expenses of right at about $50,000 to about $37,000 per year. (Actually, less, because we send ten percent of our paycheck to Christian ministry work, so our actual living expenses went from more like $45,000 to a little over $33,000.)

My company offered a paycheck deferral program, where I have the option of deferring so much of my paycheck. That amount is paid, plus a premium, every quarter. I spent a lot of time over the next few days calculating and re-calculating things, looking at our budget, seeing how much I could hike my deferral amount - and thus my total annual paycheck.

Thanks to reducing our expenses about 25%, this meant that we were able to funnel this additional amount into my company's deferral program - meaning we'd have more money to pay off our debt faster, and more money after paying off debt to put into index funds.

Reduce spending, increase income, save the difference.

I told my wife that the evening I really crunched numbers for the first time was probably one of the top 2-3 most influential days of my life.

Within a day or two of arriving home, the books by JL Collins and Jacob Lund Fisker arrived. I worked my way through both of them within days. I want to do writeups (not necessarily full book reviews) of all these books at some point, but lest I never get around to it, I want to say that Jacob Lund Fisker's book is staggering. He does not limit his discussion of simply finances, but rather presents an astonishing picture, a manifesto really, of what it meand to steward resources - both economic and other - giving careful thought to how we impact the environment while also developing ourselves to fullest potential. Fisker is not a Christian, but his "Renaissance man" concept is so much in line with a Christian "Dominion man" that it's jaw-dropping. I need to read his book a couple more times.

Once I arrived home, I opened the discussion with my wife about some purchases that - shortsightedly - I'd shied away from before due to cost, but was now completely willing to consider due to my newfound ability to think long-term. In short order, we purchased a brand-new Singer sewing machine to cut down on the clothes budget for our two kids, always growing. We also researched and purchased some bento boxes (for the kids, for my wife and me) to cut down our eating out costs. (The bento boxes have paid for themselves many times over by the time of this writing, in March.)

Additionally, I re-negotiated the payment plan with the friend we'd bought our 2011 Honda Odyssey from, and he agreed to let me make payments on a quarterly basis instead of a monthly basis - which was great! Because the quarterly cadence matched my bonus/deferral payment cadence at the company, the re-negotiation meant I could take that $142 per month out of our monthly expenses, move that money into deferral and let it grow thanks to the premium my company pays on deferral funds, and I'd still be able to make car payments while that money was making me more money. (Side note, it also looked like a result of all this manglin' and wranglin' of finances that I'd be able to pay off the van entirely in the next quarter, anyway, thus saving money from additional months of interest.)

The end of January rolled around and I knew the first real month of our FIRE journey was coming. I made my elections for deferral, locking in a monthly paycheck of right at about $3000 (everything beyond this would be in deferral). I canceled services and made plans to cancel others. No turning back now!

Post Reply