As you probably already know, our financial goal for this year is to keep our living expense at 50% or less of our income so that the remaining 50% can be redirected to savings, student loan debt, and experiences/travel. Cutting expenses to achieve the 50% level has been our focus and midway through the year we were finally asked the big question: “So what’s the point of this exercise anyway?”
“Um…to live on less and save money,” I hesitantly answered, half sounding like I was asking a question myself rather than making a statement.
“Yes, but what are you trying to accomplish? What’s the bigger picture?” our friend continued to probe.
I just wasn’t sure what to say. I get it…most folks save for something – a down payment on a home, a new car, a dream vacation, etc. – and well, our goal presently has no endgame. We’re not planning another great escape (yet) and what travel plans we do have for the year are pretty cheap anyway. We don’t want to buy a house (though tiny houses do bob around in my head from time to time). We definitely don’t want a new car.
Her questions prompted me to do a little soul (and internet) searching and I started coming across a whole lot of people on FIRE. FIRE stands for Financial Independence and Retiring Early. Like us, these folks are striving to live on 50% or less of their income. The difference though is they have a goal – attain financial independence and leave the workforce for other pursuits.
Years ago, around the same time I discovered minimalism, I stumbled upon Early Retirement Extreme, a wordy but interesting blog about Jacob Fisker’s path to early retirement at the age of 30. Soon after, I found Mr. Money Moustache, another 30-something retiree. I’d love to say that I was hooked and immediately started on my own path to early retirement but that just wasn’t the case. I was fascinated by all the early retirement stories that I read but they all seemed to be on the same Dave-Ramsey-esque path. I love Dave too but the save aggressively, invest, buy rental properties, and set up passive income streams plan to retirement just didn’t appeal to me back then. I was well past 30 and in a job I hated. I wanted a more immediate escape plan.
Enter minimalism. I know I’m preaching to the choir but getting rid of the unnecessary in my life had an instant positive impact. Aside from clearing the clutter in my home and mind, it helped reframe the way I looked at work. I didn’t need to spend my days in a soul-sucking job, climbing a corporate ladder to nowhere, just to keep up with the Joneses (whom I never really liked anyway). Minimalism allowed me to see that I could live on less. A person on the early retirement track might have used that knowledge to downsize their priorities and shift income from their current job to savings and investments. I used it to get a different job. In fact, my first job after leaving my 6-year position as a Corporate Training Manager had a salary of only $12 an hour. But the benefits were phenomenal! Less stress, more free time, and happiness by the bucket-full!
That job gave me time to volunteer at a non-profit, the same non-profit that I work for today; and this month I celebrate my 5th anniversary with them. Though there are days that I want to toss my laptop out the window, I enjoy my work as a grant writer. Most importantly, I enjoy how I get to do it – at home and on my own time. And isn’t that the goal of early retirement anyway? To own your time and do with it what you please? Even if what pleases you is to work at something you enjoy?
This week I read a blog post by Our Next Life called The Road Less Traveled Challenge. They poke a bit of fun at the Early Retirement Commandments (the same rules that I also groan about above) and then leave you with something really interesting to think about.
“If early retirement is this subversive act that rejects the notion that we have to work until 65 just because most people do, then in truth, we shouldn’t feel like we have to follow any of these rules, including the Early Retirement Commandments…we’re free to define our own path in life, and to make our own rules.”
With that in mind, I started rethinking (or playing with) FIRE. According to one of the many early retirement calculators out there, if we saved the entire 50% of our income that we don’t use for living expenses, forgoing travel and other experiences, I could retire in 12 years. Not bad. I’d only be 55. But then I thought about something I read in The Art of Non-Conformity:
“What if you save for 40 years, putting off all kinds of opportunities, then get hit by a bus the day before retirement? Better to plan for the future while also living in the present.” ― Chris Guillebeau
The folks over at Eat the Financial Elephant (who are also on FIRE), call this the “dirtbag millionaire” plan. Dirtbags (or ski bums, vagabonds, and modern-day nomads) are folks who work odd or seasonal jobs to fund their passions. Millionaires, in this case, are working professionals aiming for the American Dream and traditional retirement. “Dirtbag millionaires” then are people who work a regular job but live below their means in order to spend as much time as possible on the things that matter most to them, while simultaneously saving enough to maintain their modest lifestyle in the future. Sound familiar? Minimalists might just be the original “dirtbag millionaires”. I love it!!
A wise person once said, “Retirement shouldn’t be about how you spend your money, but rather, how you spend your day…think of retirement as a state of mind, a place of peaceful living, where one can arrive at any age”. That wise person was me, in a post from three years ago.
Reading my own words and the unicorn stories in The Road Less Traveled Challenge leaves me feeling a lot better about our own financial goal. We don’t have to have an endgame right now. I think it is perfectly acceptable to pursue a quest simply for the sake of the quest itself. Along the way, we can entertain ideas like FIRE or a grown-up Gap Year or something else altogether. One day it will come to us and instead of struggling to explain what we’re trying to achieve by living on 50% of our income, we’ll just be glad we did.
In case you haven’t had enough quotes yet, I’ll leave you with this one: