No shocker here, but In my mind, it’s easier to write about financial wisdom than it is to actually practice it. Those of us aspiring to retire early are sometimes characterized as “cheap”, “tightwads”, and even flat-out crazy. Today’s post will describe a bit about the “why, how, and when” behind Cubert’s maniacal plan to live cheap and crazy in order to ditch the 9 to 5, and 40+ hour work week.
What’s so bad about cubicle life, anyhow?
Let me start off by acknowledging that having a job in a cubicle is far from the worst experience one can have when trying to earn an income. I’m fortunate. The pay is good and the people I get to work with are pretty darn great. I’ve been laid off once before, right after 9/11. I can tell you, the security of a cubicle job is something you cling to after being let go in a free-falling economy.
That said, I’ve learned that I’d rather be doing about 3,000 different things besides plugging away in an office all day. Being outdoors, working on house projects (my own home or the four rental properties we keep), being with my family, all come to mind.
Family time is so much better when it’s not squeezed among the many obligations of a household. Saturday and Sunday go by far too quickly.
Cube life in Corporate America is stressful. Some folks can manage stress better than others. I hold my own, but I know enough at this stage of the game to recognize the physical and mental impact of high-tension, crazy hours, and uninformed managers. We take work home with us every night, and we sometimes can’t help but stew on things we shouldn’t stew about.
I think it wasn’t until I got to my late 30s before I stopped dreading Monday morning on a Sunday. Nothing like being a fitful bag of anxiety on one of two precious days off…
Need a good reason to retire early? Try regret-avoidance.
I’m that head-in-the-clouds person who’s analytical, always trying to visualize the future. I’ll often wonder, “what might I regret when I’m older?” With early retirement, I can opt out of any regrets over working too much and the consequences that brings.
We get one, short crack at this life. Financial Freedom and Early Retirement are synonymous. Yes, I intend to “work” after cubicle life is over, but it’ll be work that I enjoy, at the frequency of my choosing.
Early Retirement allows you to do this on a Monday
From average spender to frugal philosopher
For most of my life, I’ve been average as all get-out. When it comes to spending, saving, and making money, I’d say I fall into most statistical norms.
Having followed the Pied Piper I just hunkered down in the “slots” the rest of us lemmings are familiar with. Buy a house? Check. Go on fancy vacations? Check. Eat out a lot and happy hours? Check. New car every 5 to 10 years? Check. Cable TV and unnecessary (but oh so fun) blow-the-roof-off-your-house sound system? Check. and Check.
Eventually all that crap doesn’t matter anymore, especially when you get laid off. I read Tim Ferriss’s “The Four Hour Workweek” soon after it was published. That book definitely lit a spark. The idea that one could travel the world and take on many different challenges and skills, all while making gobs of cash from a business that ran itself… well, sign me up!
Trouble was, unlike Mr. Ferriss, I struggled with conceptualizing a business that would create a never-ending revenue stream. A lot of very smart and diligent, hard-working people HAVE figured out the formula. Maybe I was too focused on my budding golf game at the time. Yep, that’s it.
Born again into the Church of Early Retirement
Fast-forward to 2013 and baby twins enter the picture. All of the sudden, life gets seriously hectic, joyful, and tiring. In late 2014, I stumbled upon Mr. Money Mustache’s blog. He’s the Jesus of Early Retirement. You’ll find countless disciples churning out wonderful blog posts similar to mine these days. For good reason. His shit resonates like few others.
My plan, according to the Gospel of Peter
- Pay off debts! Student loans combined with a car loan. $100K. Ouch!
- Save at least 70% of our income year over year, and sock it away into the 401K and add a few more rental homes.
- Get RUTHLESS with our household expenses! Stop blowing money on delivery dry cleaning services. Axe cable. Killing the Keurig habit. And tame the dining-out non-sense. Track your dollars like a hawk. Fight the urge to budget for discretionary spending. Get familiar with Microsoft Excel and question every recurring expense.
- Be an awesome worker bee. And be an awesome landlord. You’ve got to work hard and work smart. Own your personal EQ and figure out how to delight the pants off your clients at work. At the same time, develop alternative streams of income outside of the cube, to accelerate your plan.
- Decide that Enough really is Enough. We have a small house and the kids share a bedroom. You know what? It WORKS. Had we plunged our credit into a larger house we’d be heading in the wrong direction.
- Get healthy and Stay healthy. It’s not impossible to achieve financial freedom as a couch-potato, but I don’t recommend it. Strong health into your later years translates into fewer medical bills. 90% of how we end up later is determined by how well we feed and exercise our bodies.
How I landed on 2020 as my departure from hell
A post on the Mustache Man’s blog lit the analytical fires. The math is really quite simple for escaping the rat race. Saving as much of your take home pay as possible, 50% or more, is the key.
My path is to achieve a savings rate of 70% and combine side gigs with rental income to keep us afloat until we can tap the 401K at age 60. That sort of clarity and confidence in a plan really helps you get through those occasional shitty days at the office. Nice… Another week closer to cubicle freedom!
What’s the catch?
It’s not all roses. That’s why I started this blog. Challenges abound, and I’m here to share some of mine and hopefully learn from yours too.
Starting out, you absolutely must get your partner, spouse, family to buy-in. You’ve got to be on the same page with spending and saving and goals. I struggled with this. Like a puppy with chew toy I just dove right in to this early retirement stuff. All of this new “stuff” did NOT go over so well with Mrs. Cubert. Thankfully, we’re aligned now, but I could’ve gone about the process in a more understanding way.
Let’s not forget about the cost of raising kids, healthcare, travel, and so on. Then there’s the unpredictable stock market. You’ve got to manage this stuff.
Just like you don’t go diving head-first into a two foot deep pond, you don’t dive into early retirement hoping for a good outcome. Do your homework. Prepare. Build in a margin of safety (thank, you Mr. Money Mustache, for that concept as well).
Future posts will explore much more about these potential “gotchas”, and tools I’ve adopted to avoid them. And I’ll certainly not be shy about sharing my own dumbness from time to time. Nobody’s perfect, and this is a journey with a lot of learning ahead.