Happy Friday! An Update on My Situation

A view from the cockpit of the venerable Cessna 172 – a plane countless pilots have gotten their start in

Happy Friday, folks! As most of you probably know, employers often do their firing on Fridays. Recently, mine followed that same philosophy, firing over twenty percent of our sales force and some office employees as well. We all knew it was coming; or at least we should have. There were ample signals from management in both words and actions. And even if there hadn’t been, it’s common knowledge that revenue in most of our industry collapsed late last year and has not improved ever since and our “numbers” have reflected that. Simply put, it wasn’t if, but when. But here comes the plot twist. In spite of almost certainly having been “on the list” at one time, yours truly not only survived, but wasn’t the slightest bit concerned about whether he would. There are two reasons for this.

First, since being personally warned that attrition was coming, I’ve been able to produce literally the best numbers of my young career in spite of the state of the market. I’ve gone from somewhere in the lower middle of our division to one of the company’s top performers in the entire world. How did I do it? Sure, I started pushing myself a little harder. But mostly, I kept doing exactly the same thing. I had always been working diligently to develop my new territory – even when the results weren’t reflecting it. It takes about two years to do that successfully and my employer is well aware of that. Had management pulled the plug early, they would have been making an extraordinarily expensive mistake. But economic stress often forces companies to make decisions from a very short term perspective. Luckily for all involved, my territory has absolutely exploded with production over the last couple of months to the point where the mere notion of me being fired would be absurd. At this point, it’s all I can do to keep up with the business I have. If the market recovers even a little bit, look out.

But there is another, more important reason for my lack of trepidation over my job – I don’t need it anymore. The minute my boss broke the news to me, the wheels in my head were already turning. He did me a solid by giving me a warning. But nonetheless, before the conversation was even over, I had mapped out my plan. A key part of it was to replace employment income altogether in my life. I have always harbored a healthy hatred of authority; and alliteration aside, I don’t take that word choice lightly. After spending my life watching reliance on employers result in devastating consequences for so many people and finally having it threaten me as well, it was time to act. My real estate business was only in its early stages at the time. But no matter. I decided it would be paying all of my expenses by the end of the year and began ramping it up aggressively. And today, it appears that goal is going to be accomplished ahead of schedule. Admittedly, the fact that I keep my expenses low means that wasn’t as high a bar to clear as it may sound like. But still, success is sweet.

Make no mistake, I still want my employment income. I want to see my real estate business cover the bills and then some for at least a year or two before I take the plunge. So the plan is to kick ass in both areas for the time being and see where it takes me. However, to commemorate the occasion, I must admit I’ve adopted a rather expensive new hobby – flying. This is the first thing in my life I can think of that I’ve done without any plan or goal in mind, but instead, simply because I enjoy it. I am taking lessons and hope to have my private pilot’s license by around the end of this year. From there, we’ll see what happens. As long as I’m enjoying myself, I’m happy. But if I can’t keep an awful lot of money flowing in, I won’t be able to afford to fly as much. So that should keep me hungry for a while.

The moral of the story? Believe in yourself. If someone doubts you, be thankful. It’s just more fuel for your fire. If you know you have a good hand and someone bets against you, be happy. The size of your payday just increased. And if times get tough in your life, get excited. This rough patch may be exactly what you needed to convince you to take things to the next level. Happy Friday, folks! Have a wonderful weekend!

Living Intentionally: A Much Better Alternative to Both Financial Ruin AND Frugality

These are shrimp boats, but any boat would be more effective than a car in Houston right now! – Image courtesy of Jean-Marc Buytaert

I wasn’t always where I am now with money. As a newly minted adult with a full time income that seemed substantial at the time, I thought the world was my oyster. I had zero respect for the value of the dollars in my possession. If I saw something I wanted, even a little bit, I bought first and asked questions later. If my friends and I were bored, dinner and/or drinks would solve the problem – maybe with a movie or a round of golf thrown in for good measure. And if I had a bad day, setting some money on fire for any reason, or even no reason at all, seemed to ease the pain. I probably wasted tens of thousands of dollars on almost literally nothing productive in just a year or two. Had I continued along that path, my financial life would be an unmitigated disaster today and I would have been part of the multitude of people who are woefully unprepared to retire in spite of living in the richest country in the history of the world.

Of course, this wasn’t healthy behavior and after I realized I had been working for a few years and had virtually nothing to show for it aside from some stuff that was mostly worth pennies on the dollar I had paid for it, I wised up pretty quickly. But as a relatively wealthy, still young adult, I’ve noticed that most people seem to have either missed that lesson or skipped it intentionally. Maybe they weren’t blessed (seriously) with the harsh reality of financial scarcity when they were kids like I was. Maybe they simply can’t bear to admit the truth about what they’re doing to themselves. Or maybe they simply prefer the bird in the hand of doing what is easy today to a much more prosperous future that isn’t 100% guaranteed, even if it is extremely likely. I really like the way my new Houston real estate mogul friend explained the concept in this post.

Whatever the reason, I see people driving their financial cars with the e-brake on almost everywhere I look. I’ve long since learned not to be “that guy” so I neither give unsolicited advice, nor ask any questions that might lead anyone to the unpleasant experience of looking in the figurative mirror. In my experience, if people want help, they ask for it and if they don’t ask for it, they don’t want it. But I often have to stifle a strong urge to try to help people anyway when I see them destroying their financial futures because I know how much pain it will cause them in the long run.

Don’t get me wrong; I don’t consider myself even remotely frugal and I hate everything about the term. There are very few aspects of my life where I’ve chosen to spend the absolute minimum possible, or even close. I live in a luxury apartment that costs more than double what a bare bones living arrangement would. My car has leather seats, almost 300 horsepower, more electronics than the spacecraft that took the first astronauts to the moon, flashy 18 inch rims, and so much more; and I’m probably going to make a huge upgrade from that in the next year or two. I eat and drink what I want, when I want, where I want. If I wanted to take a vacation, there would be no practical limits to where I could go or what I could do and given how difficult it is to find the time, I wouldn’t be likely to waste the opportunity by going cheap. I could go on and on but the point is that I’m in no way deprived of anything I could imagine wanting in life.

So how am I different than my young adult self in the way I handle my money then? Aside from having tons more at my disposal, everything I do is intentional. Spending money is a means of accomplishing some specific purpose – not a pastime or a figurative drug I use to tamp down unpleasant emotions. If I get the notion to spend money, I think about it first. Is it necessary? If not, it’s a want, not a need. If it’s a want, is it something that will truly contribute to my life in a positive and meaningful way? If so, what, exactly, is my goal in spending this money? What is the best way to accomplish it? What is the most cost effective way? Where does it make sense to be on that spectrum in this particular context (between maximum utility and maximum cost efficiency)? Sometimes, I buy the best. Other times, I go with the cheapest option that accomplishes everything I want it to. On very, very rare occasions, I go with the absolute cheapest option. The important thing is that if I’m spending money, I know why I’m doing it and why I’m making the specific choices I am about it. And the good news is that while it may have seemed tedious when I was starting out, over time, this thought process has become almost automatic for me.

This may sound pretty obvious and to some of you, it probably is. But there are tons of people out there who seem to have no clue why they’re making the financial decisions they are. And there are tons of people who are totally broke. And both groups are large enough that there is almost definitely substantial overlap between the two. For anyone who resides in both, you need to make some dramatic changes if you want to improve the situation. Being intentional with your financial decisions, both large and small, will almost definitely help. Not only will your finances improve, but you will probably find yourself feeling calmer and happier. Have a wonderful weekend, everyone! And if you’re in Houston, hopefully you either have a boat or know someone who does – because that’s what it’s going to take to get very far down the road pretty soon if this rain doesn’t let up.

The Most Important Blog Post I’ve Ever Read

Proximity to this beautiful lake is just one of many things I love about my new home – and no, I was not there on the frigid Sunday I describe below.

This weekend I opted to get everything that required leaving home done on Saturday since Sunday was going to be unacceptably cold (a high of fifty fucking eight degrees). That is literally below Houston’s average January high and it was March 31. Since moving here, my tolerance for temperatures below eighty has gone from very low to nonexistent. The lifers bitch about summer constantly while I wish it lasted all year and wonder how much further south I would have to eventually migrate to make that a reality. So anyway, to register my outrage with the universe, I did not leave the comfort of my apartment on Sunday and yes, the heat was on. Utilities are incredibly cheap here and that means temperature is not a required area of compromise. So how did I spend my Sunday? I did the kind of office work I hate doing when the weather is good and I also spent some time being purposefully lazy. I think it’s important to experience that novelty every now and again.

As part of this process, I read some now vintage Mr Money Mustache posts. If you’re reading this and you aren’t familiar with Mr Money Mustache, please stop reading this, drop whatever you were planning on doing for the next three months, and go learn from the absolute best. As a guy blogging about finance in 2019, I’m benefitting from “standing on the shoulders of giants” and triple M is undisputedly the biggest and best there has ever been. If finance bloggers were musicians, he would be the first guy who started hitting sticks together in rhythm because something about the sound intrigued him, proceeded to design and build tons of instruments, and somehow also became both Mozart and Beethoven. The man is a living legend in finance blogging because he both created and perfected it. He doesn’t post as much as he used to but his past posts amount to more than enough to take anyone from zero to hero with their finances.

As I worked my way through these now classic posts, I happened upon this one. MMM has a way of cutting through the bullshit details that will trip some people up and distilling a concept down to the absolute essence necessary to get the ball rolling. And in this post, he pretty much does that with all of personal finance. As I read through it again, I thought about my own financial history. I’ve worked hard, made mostly good decisions, fought through some significant setbacks, and benefited from many examples of good fortune along the way to reaching a roughly 70% savings rate using MMM’s methodology. Barring a collapse of almost biblical proportions, I will a financially independent millionaire by 40 and consider myself incredibly blessed. But still, I couldn’t help but marvel at how much better I could have done. My biggest failure was waiting until my late twenties before I started doing things the right way. Had I reached the 70% savings rate in my early twenties, I could have already been financially independent for a while now instead of half a decade away. Had I read this epic post when I was younger, my life may have actually transpired that way.

That’s when I realized something; if you could only read one financial blog post, this one should be the one you choose. No, it doesn’t go into detail on how to achieve a high savings rate. But that simply requires re-evaluating your expenses one by one, making small but key changes, and continually working on increasing your income in the background. It’s one of those monumental tasks that forces you to focus on one small, easy step at a time until you suddenly look up and realize you’ve climbed a figurative mountain. However, this post does something far more important than to show you the steps; it lights the fire of motivation that will get you in the game, keep you there, and keep you aware of how you’re progressing. In one very simple metric, it sums up your entire financial life and then visualizes it on both a graph and a chart.

So if you want to do one thing today that will have an enormous impact on your finances, read the post I linked to above and then spend some time thinking about it. Start working on calculating your expense numbers. It probably won’t be as easy as in MMM’s case since just like his posts, simplicity seems to be a high priority in his financial life. But once you’ve done it, it will be much easier to do again. And more importantly, I can almost guarantee you will have at least one insight in the process that will cause you to dramatically alter what you are doing and save tons of money in the long run. So if the weather spits in your face some day as it did on Sunday in Houston, I recommend turning it into a huge win by checking out the best financial blog post of all time.  

My FIRE Problem and Why It Doesn’t Matter – At Least Not Right Now

Something is definitely on fire in the distance; picture taken at the battle site of Sabine Pass

More and more folks have likely heard of the FIRE movement. Lately it seems to be a popular target for potshots from mainstream media personal finance hacks who want the average person to keep reading their recycled bullshit advice and fueling their viewer/reader numbers without ever being able to graduate to something better. And FIRE advocates have “fired” right back. Sorry, it had to be done. FIRE stands for Financial Independence Retire Early. You might be surprised to learn that I am not 100% on board. I had been at one time. But my perspective has evolved a little over the last few years.

I love the FI in FIRE. In the richest society in the history of the world, we can all aspire to be financially independent if it is a high enough priority. Sadly, it will never happen for most people because shiny objects, slick sales pitches, lifestyles they feel obligated to live or provide, neighbors that have to be kept up with, etc, always seem to be more important. But for anyone who ever wishes he could say no at work with zero fear of potential consequences, financial independence would make it possible. For anyone who wants to go on vacation without planning it months in advance or having money be a limiting factor, same thing. I could keep going but I think you get the idea. There is nothing you can buy on this planet that is quite as satisfying as knowing you will never again have to make a decision based on such a crass factor as money. Or put another way, if you can think about money for long enough, you can reach the point where you never need to again. The FIRE movement is mostly about reaching that day as soon as possible so you can enjoy the rest of them more.

I think most people can agree that financial independence is a worthwhile goal. But many seem to object to the RE part. There is even a lot of disagreement about the exact definition of the term. Some FIRE detractors say it’s cheating if you work in any way, shape, or form after retiring early. Others say it’s not worth “living like you’re poor” your whole life just so you can retire at a young age. My take is that the term can be useful to anyone regardless of exactly how you choose to define it. If it makes sense, you can think of it as “retiring” from money being the most important factor in what you do – or a factor at all, for that matter. I would also say that your living standard is your choice and no one else’s. If you are happy and you aren’t hurting anyone, tell them to go pound sand. The FIRE community welcomes people all along the spectrum, from one extremely disciplined, analytical blogger who lives on about $7k a year all the way to another rather neurotic one (I mean that with love, Sam – and yes, it takes one to know one!) who seems to fear that even the $200k+ his investments earn annually, combined with his incredible intellect, might somehow not be quite enough.

Bottom line, FIRE can be whatever you want it to be. Unlike with religion, where it could be considered a little hypocritical to be on the ala carte plan, this is a very open and welcoming school of thought. Take what you like and use it to make your life better; ignore what you don’t. I enjoy hanging out with a local FIRE group and some of them take frugal to a level I would never want to approach. Others seem to live higher on the hog than a man of my humble origins is likely to ever want to – although I reserve the right to change my mind on that point. It doesn’t matter. Everyone brings something to the table and everyone benefits from both building relationships with similar minded people and from being exposed to a wide range of ideas and insights.

What is my personal FIRE struggle? At some point in your life, a guidance counselor probably asked you what you would do if money didn’t matter at all. That’s it for me, right there. Unless I veer pretty far from my current path, I’ll reach financial independence in the next five to ten years but I have absolutely no fucking clue what to do with my life when I get there. My job has its tough moments but it is also incredibly rewarding on many levels. Should I keep doing it and simply start finding ways to spend more money? I suppose a mansion or two, a garage full of high end vehicles, or any number of possible luxuries might grow on me. Or if I didn’t want to spend the unstoppable excess on myself, I could give it to causes I care about. Altruistic or not, that could be a great way to maximize the financial value of my life and put that value into whatever I want to impact most. After all, the argument could be made that if you can make a lot of money and benefit humanity in some way in the process, you should. Or maybe I should tell the boss I’m retiring when I’m roughly twenty years his junior and still younger than the vast majority of people who do my job in any territory, or at any company for that matter. I don’t hate the man by a long shot but something inside me wants to correct him and say “no, I’m not resigning; I’m retiring” and demand a gold watch, or at least a cake. And of course, there are a few choice people within the company who I would absolutely love to see turn some shade of green at my party.

But what would I do then? Sure, this is a good problem to have and I am immensely grateful for it. But that doesn’t make it any easier. Sometimes it feels like a personal failing that I have a difficult time deciding on a way to spend roughly half of my life without money being a factor. Sure, I could go lay on a beach and drink beer somewhere or I could travel the world and see all kinds of amazing things. But I have a feeling I would get bored pretty quickly. And I’m not alone. Studies regularly show that this can be a problem for lots of people – even at more traditional retirement ages. One’s sense of purpose tends to get a little wrapped up in something if you spend half your waking hours doing it year after year. And I think that’s to be expected. If I had to guess, I’d say that there are probably a lot more mes out there than there are Elon Musks. And a sense of purpose is an enormous part of what makes life worth living, no matter who you are.

So I wrestle with that problem all the time and until I get it figured out, I’d be lying if I said I don’t use it as an excuse to justify the occasional large expense. After all, there’s no sense rushing to get to a destination if you don’t know if you will like what you find when you get there. This was a lot easier when I was in love with someone and genuinely wanted to spend the rest of my life with her, no matter what we were doing. Even if I meet someone who means just as much to me somewhere down the line, I don’t think I can ever put that much stock in another human being again – and that’s a good thing. But it’s only one more thing I’ve realized does not answer what will probably ultimately be the most important question of my existence.

But all that said, my general financial philosophy is currently that as long as I stay on the path to be financially independent by 40 at the latest, I doubt it will lead anywhere bad. I consider staying open minded, especially about trying new things, to be a crucial investment in my future. My advice to anyone else is really about the same. I’ll end this post with an excellent quote from Martin Luther King, Jr: “You don’t have to see the whole staircase, just take the first step.”