My Path to Attaining Financial Independence – Part 3
Some of you may have already read my first two articles describing my path toward attaining financial independence. The solid foundation I described in Part 1 helped mitigate a few challenges I explained in Part 2. Beyond personal finance, I’ve tried to look back at past mistakes, challenges, and successes and determine what I learned from each and how I could do better. Admittedly, I haven’t been perfect in this analysis, and at times, it’s been easier to just ignore such an exercise. As I tackle another life season and the financial independence implications below, I’ll continue to share what I did right and what I would do if I could start over.
Well after hitting my stride in the workplace, our first little one arrived. My wife had been working full-time for years at that point. Leading up to the birth, we had found a solid in-home child care option for our daughter. Our plan was that after taking a few months off, my wife would go back to work full-time. After she returned to work, we settled into the working parents routine pretty smoothly. A few months into it, though, my wife and I looked at each other and came to the conclusion that the situation was pretty silly.
A New Direction in Our Path
As I described in Part 2, my wife worked off and on earlier in our marriage, and we never needed her employment income for daily living. Also, we couldn’t ignore that we were paying $300 weekly for child care – which would work out to about $15k a year! Up to that timeframe, we saw it as a required expense which we weren’t okay scrimping on. Once back at work, my wife discovered she was more interested in being home with our daughter. Taking into account child care expenses, tax advantages, and most importantly, my wife’s primary interest in being home with our daughter, she decided to quit her job. We had crunched the numbers, and the decision was easy. So far in our lives, this was the most significant, intentional point where we had embraced an “enough” philosophy.
I already made enough money for us to be happy, and my wife being home with our daughter would increase that fulfillment moreso. More money wouldn’t bring us more happiness, but more freedom in how my wife spent her time would. We had embraced an “enough” philosophy several times before in our lives, some times unknowingly. Regardless, our previous comfort with those choices made this rather significant decision even easier. Another daughter came a few years later, further underscoring the lifestyle we had chosen.
What I Did Right: We came to the intentional realization that we had enough money to live happily. We didn’t need more money. We wanted more time.
If I Could Start Over: Do the math much earlier prior to kids.
Soon after my wife was staying at home, I got into cutting expenses even further, geeked out on tax stuff more (yikes), and read – a lot. Cutting costs wasn’t so much out of need, but more about realizing savings that I had been losing out on previously. And, for me, this was fun! As I’ve talked about cutting expenses previously here and there, I won’t go into a lot of detail again below, but here’s a quick list of expenses I decreased or totally cut:
- Got rid of our old AT&T wireless plans and iPhones. Moved to Tracfone, then Republic Wireless. Republic was much cheaper and provided much better service.
- Disconnected Directv and embraced a digital antenna. I still love the superior HD picture quality over the air!
- Changed to a cheaper garbage utility/service. Going from two pickups weekly to one made it even cheaper!
- Tweaked auto insurance. Moved one car to liability only and raised the deductible on the other car.
- Energy savings, which I describe next!
With the money made from the previous sale of my condo, we planned and arranged several home improvements to our single family home built in the 1950’s. All windows were original – we replaced the majority of those. We installed new exterior doors everywhere. We re-insulated the attic and crawl space. In addition to the energy savings from these improvements (lower electric and gas bills), we received tax credits and deductions. While most of the house was brick, we replaced the siding portions and got new gutters. We addressed our imperfect chimney, long a headache for us, with a closed, gas-insert fireplace. We were long overdue for new living room furniture – this was probably the biggest splurge. A new water heater came later, but only after the old one crapped out. I’ll explain how these improvements were key to our financial independence journey in a future article.
Oh, How I Read
Most importantly, I finally got around to reading Your Money or Your Life, by Joe Dominguez and Vicki Robin. This book evolved my views on money, choices, and life in many ways. I first learned the concept of financial independence by reading this book. From my perspective, anyone even potentially interested in pursuing financial independence should read this book first. This book has and continues to be a great foundation for me and many others.
After Your Money or Your Life, I read The Simple Path to Wealth, by JL Collins. While the former solidified the foundational principles of FI, the latter was my closest version of a roadmap to FI. I read The Simple Path in about a day and a half – it moves quickly and was probably the most enjoyable finance book I ever read. Lots of joy came from the realization that:
- I could reach FI.
- I could reach FI much faster than I had originally thought.
- The tweaks I needed to make were, indeed, simple.
I particularly recommend The Simple Path to Wealth to everyone, FI enthusiasts and otherwise. Collins writes that his book is not about retirement, it’s more about having “F-You Money.” I identified with that take – I wanted my money to enable more freedom, not more stuff.
Mr. Money Mustache
While reading the above books, I also discovered the great site Mr. Money Mustache. He underscored many of the same philosophies which I learned in these two books, and various articles encouraged my financial independence path further! Many FI sites out there provide great content; from my perspective, this one is at the top for good reason. For those interested in his site, he highly recommends you read this article first, as do I.
I read plenty more about personal finance and FI, some stuff better than others. I plan to share more thoughts on these and other books in a future article.
What I Did Right: Stepped on the gas further with cutting expenses. Deliberately conducted home improvements. Challenged myself with Your Money or Your Life, A Simple Path to Wealth, and Mr. Money Mustache writings. Continued to avoid lifestyle creep and became primarily focused on attaining financial independence.
If I Could Start Over: Learn about various financial philosophies much earlier. Avoid blind acceptance of social norms related to work, money, and retirement earlier in my career.
#8. I Quit
As a fairly analytical person, the “perfect” time to quit my job didn’t exist. While I had reached my financial independence goal (e.g. number), I continued to work and sock away more in savings. I experienced a moment of clarity where the decision was fairly easy. I reached a point of contentment with my professional accomplishments, similar to what I had previously reached in the financial realm. Also, my wife and I wanted to end this life season and start the new one while our daughters were still very young. I quit with clear eyes, a full heart, and excitement for the next adventure.
Attaining Financial Independence – Conclusion
There you go – that’s the path I took to attaining financial independence. I did a lot right, but I could have done so much more, and earlier. Indeed, others have reached FI more efficiently than I did. Looking back, I like to think that the mistakes just as much as the successes fueled my journey. I hope you join me in future articles where I will dive more deeply into specific aspects of my journey.