I recently saw a question come up asking “What are the Pros and Cons of continuing to work after reaching Financial Independence?. Many of us get into the One More Year scenario and then respond in different ways. Some people can reduce their schedule to part time, others can really enjoy that final year, taking in the nostalgia of each event. I am heading into my last year after reaching FI in early 2017 and wanted to share some experiences:
The good stuff!
Prioritization: We went through an issue that dragged on for a lot of 2017 that made working difficult. We were exposed to other people going through this who also had financial stress and job worries. We just didn’t have that stress, money was never a question. It allowed focus on what’s important and break some of my workaholic tendencies. I did what I could for work, but had a good team that I had helped build and trusted them to do their jobs. Continue reading “Working Post FI: The Good and the Bad”
I used to swear I would never be drawn into one more year. Its been interesting to read how many people suffer from it. It made no sense to me why people continued to work once they hit their number! Well folks, now I’m there. This isn’t written out to justify whatever decision we make, but outline all of the thoughts that go through your head as you approach that retirement date.
Lets outline the pretty obvious reasons to retire early!
Achievement of a life-long goal: I knew at an early age I wanted to “never worry about money”. I watched both my mom and dad struggle through money problems growing up, I realized money doesn’t buy happiness, but not having money creates unhappiness. I scribbled “millionaire by 40” in early finance classes and calculated how long it would take on an old TI Financial Calculator. I remember when an insecure boss threatened my job early in my career for speaking up and I said “I will never tolerate this again”. Declaring early retirement is an accumulation of those goals. Continue reading “Early Retirement Decisions: One More Year”
This month was a big month for listening to Podcasts. In addition to “normal” listening, there were many podcasts consumed during thirty-six hours in the car plus excessive time at the gym thanks to spending the last two weeks of the year off of work (Yes, I am looking forward to doing this full time).
With that, let’s give some shirts outs!
Fire Drill Podcast #32: Savings Sherpa. This month must have been Military Month, because the Fire Drill Podcast highlighted two personal finance writers, Saving-Sherpa and Military Dollar. Justin’s story over at Savings Sherpa was awesome, he discussed the power of the military housing allowance, the advantages of high cost of living areas, and how to charitably make a difference while still saving for FI. I think he had the hosts and many listeners in tears for his work with Ciudad de Angeles.
Masters of Money: Bonus Episode with Doug Nordman. Doug is one of the original personal finance bloggers and I’ve interacted with him for years on various forums. Doug has done a number of interviews, but this was the first one where I heard him give career advice about the military that really applies to any person in life: Look one or two jobs above you and ask “Are they having fun”? This hit home for me because it properly describes where I’m at with my career, I don’t think anyone above me is “having fun”. You trade time for money in your career, never forget that. If you can’t enjoy what you’re doing, then figure out how to do something else.
Tonja @ Our Next Life made a number of appearances and launched her own podcast with Kara @ BravelyGo. She makes the list twice this month with two specific podcasts I wanted to highlight:
Do you even Blog? This was a different interview with Tonja, instead of the backstory or more common questions regarding personal finance, it was a discussion specifically about the Our Next Life blog. Why someone should decide to blog? Do it to build friends, do it to build relationships, then do it to provide good content. What should people do more of? Tell more stories about failure for authenticity. Go deeper in writing, don’t just do it to justify your own decisions. This was a great interview and highly recommended for anyone who follows her work.
Fairer Cents: The Urge to Compare. This is an impressive podcast that goes very deep into one of my favorite quotes, “Comparison is the Thief of Joy”. This is going to get its own post from me, but I enjoyed this discussion. I know I’m personally way further down the libertarian side of liberal thought than Tonja, but the amount of common ground I found was surprising. Interestingly after this podcast, there was also a post by ZeroDayFinance about “poor shaming” that got a ton of traction recently, it would be interesting to explore the evolving beliefs of personal finance writers. My anecdotal view is the writers in their 20s tend to get more fired up on either side than those over 35. Maybe that’s reality, or maybe that’s the lack of desire to argue with people over the internet.
Quote of the Month:
– Paula Pant was asked by a caller about “Firing a Financial Adviser who was a ‘friend’ ” on her Afford Anything podcast. Her first response was incredible, “If they’re not willing to show up and help you move, then they’re not a friend”. That’s one way to figure out if your financial adviser is really a “friend”. On a side note, if you need an adviser, pay them a flat fee for planning. If they’re your friend, great, but they still deserve to be paid for their work. Never pay a sales commission or a percentage of asset fee for investment advice.
It is my favorite time of the year to update spreadsheets, I started keeping a snapshot of each year end as a reminder of the process we’re making. I wish I had done this from the beginning, but here is our Net Worth progression since 2011, all of these figures are at year-end:
The acceleration from both progression in the career higher income and compound interest really shows through.
The abundance of free information through Podcasts is incredible. In this inaugural series, we will recognize the top podcasts each month for Financial Independence, Side Hustles, and Early Retirement.
I was not a reader of Freedom is Groovy before listening to this podcast, but I loved it. The best takeaway is Financial Independence isn’t just for 20 something engineers, finance, and technology workers. Here’s a middle of the road income couple near 40 that decides that working until 67 isn’t for them and and uses the freedom we have in this country to move wherever you want to, whenever you want to. They could have used all the excuses possible to “why” financial independence isn’t possible, but instead chose freedom, because Freedom is Groovy! Congratulations to both Jonathan and Brad for their upcoming one year anniversary of Choose FI and helping bring this movement to the masses.
You are in the business of you! You are responsible for both total revenue and total expenses. What are you doing to increase your income today? What are you doing to increase your income potential tomorrow? Where are the best paying jobs in your field? What is the incremental value of education? The path to financial independence begins with increasing your income and finishes once you’ve optimized your expenses
Here are five high-paying professional sales jobs for people to consider if they’re just starting their job search out of college or are looking to change careers:
1) Commercial Insurance Agent: Almost all companies purchase insurance (and are required to purchase certain types of insurance). Commercial insurance is generally sold through independent brokers that underwrites and presents risk to various insurance companies, then helps negotiate the best coverage/price. This business is highly competitive for new agents, but agents are paid annually for both new business and retained customers and the only cap on earnings is the agent’s time. Typically new employers require a college degree and some type of sales experience.
Every finance forum has discussion after discussion related to asset allocation. The Vanguard Total Stock Market Fund is generally accepted as a solid be-all, end-all option for people pursuing early retirement. I unfortunately did not start with the “basics”. My degree is in finance and I studied for a CFA, so that combined with a naturally high opinion of myself set me off on a mission to pick stocks. Hundreds of hours were spent analyzing companies, listening to investment podcasts, and trying to find that company that’ll beat the market.
The results are a whopping 1.24% higher return on the S&P 500 over a five year period, but I am humbly trailing the market YTD. We are slowly transitioning our holdings into index funds and in hindsight, it would have been much better to focus on a side hustle or just devote more time to sales in the regular job than all the work and effort put in for a marginal improvement over the index. Continue reading “Asset Allocation Disclosed”
There are two types of financial decisions: Good financial decisions and educational decisions. We’ve purchased four homes and did well with one, did okay with one, lost our rear end in one, and our current one we’re cautiously optimistic on. The biggest lesson we’ve learned in home ownership is the power of scarcity.
The first component of a house is land. A homeowner/developer must have enough land to build a house. The problem with land? They’re not making more of it. Now if you’re driving through parts of the US, (ahem – New Mexico, Texas, Nevada), you’re thinking that land isn’t scarce. If you live in an urban area, open land for purchase is either really expensive or just doesn’t exist. Even worse, sometimes you have to buy a house on land just to tear it down! Now that sounds costly.
I’ve always been a fan of the Health Savings Account. Pre tax? Check. Pre-FICA? Even better!
As soon as my employer started offering these, I put away the maximum contribution allowed. I did the math, saw a $10,000 out of pocket maximum, then said as long as we don’t have a ton of medical expenses in the first two years, this risk will pay off! At the time, I worked in a state with an income tax and Mrs. Shirts was also working. This meant we was earning below the social security contribution limit, but in a 25% marginal tax rate as a dual income home. On top of federal income tax, we were also paying 6% to the state of Georgia and 6.2% for Social Security. The HSA immediately allowed us to reduce our tax liability while putting away money tax free.
We were fortunate over the next eight years, putting away the maximum each year while not incurring much in healthcare expenses. We also enjoyed one of the best stock market runs in history between 2009 and 2016. Our account quickly grew and before we knew it, we had amassed over $60,000 in the HSA account. Then we ran across the Mad Fientist’s article referring to the HSA as the Ultimate Retirement Account. Continue reading “Why I Stopped Saving HSA Receipts”