2019 marks my 8th year of involvement in the Financial Independence community. I started out on this journey as a green, young professional looking for a place to belong in this big crazy world.
I was driving to work recently and listening to the ChooseFI podcast episode with Mr. Money Mustache and Mr. 1500. I am lucky to consider all 4 of them to be friends — listening to that episode made a long commute feel much shorter! In it, Pete was talking about how he’s learned to optimize his life for happiness and it occurred to me that’s what I am doing in my life. I think my life so far can be broken down into 4 distinct stages.
Stage one is everything before FIRE. I wasn’t a complete noob as I had a pretty solid grasp of the financial basics. I had gotten a full-ride academic scholarship to the local state university so I didn’t have any student loan debt. My parents had hammered a good foundation into me on personal finances, so I stayed within my means and didn’t go on crazy shopping sprees for nice clothes and the newest electronics. They had taught me to try to avoid loans as much as possible, so my first car was a complete beater that cost $4,000. After that car died an early death at the hand (hoof?) of a deer, I bought my second car outright with money from my signing bonus with the Air Force. I still have that car today, nearly 150,000 miles later.
It’s no stretch of the imagination to say that finding the Financial Independence community changed the course of my life drastically for the better. I learned how to take my finances to the next level and prepare for the future ahead. I have traveled to all sorts of places I never would have gone to, both domestically and abroad. Shoutout to my trip to Omaha for the Berkshire Hathaway Annual Meeting!
I have met many wonderful people in this community. Some have become the best of friends. Some have become roommates. Some have become mentors. Some have become family. I’ve even dated within the community! Some have taught me valuable life lessons about the world and how it works, for better and for worse.
Stage Two encompasses the first part of my journey to Financial Independence. During this stage, I optimized for wealth. Nearly everything I did was through the lens of “is this the most optimized financial decision I can make?”. I think that was the right move for me at that point in my life, but I don’t think it’s the right thing for me to do now. I am really grateful I found FIRE so early in my life because I avoided a lot of sub-optimal decisions like buying a new fancy car and buying more house than I needed. I made a lot of great decisions as well, like maxing out my 401(k) for many years and saving money in other tax-advantaged accounts. My net worth was definitely on a steady trajectory in the right direction.
This stage was motivated by a desperate desire to be free from the restraints of a full-time job. At the time, I was adjusting from the freedom of a college schedule to a full-time job. To make matters worse, I didn’t get to choose the first two positions with the company and they were.…… not the best fit for me. I hated the second one, in particular, and was doing everything I could to save money and get out of the working world. If that’s what a career was, I was out. I didn’t understand how people could work for 40 years!
But then I found a position I actually enjoyed doing, that was fulfilling to me. Everything changed. My outlook on working and careers got better.…… but I still wanted out.
Stage Three was where it all started to go a bit sideways. I had all these new friends doing amazing things (and making lots of money while also not being tied down to an office job). I thought to myself, if they can do it, so can I! And so I jumped right in. I bought a rental property to house hack. I said yes to starting a podcast. I became a financial coach. I tried to take on freelance writing projects.
I was miserable. My net worth might have been rocketing up but my happiness and quality of life was plummeting. I was stressed out and anxious. No amount of quickly stashing money is worth sacrificing my mental health. I am incredibly grateful I did try it though. Nothing worked out like I thought it would, but I have learned so much from my experiences.
It turns out I actually do enjoy working and having a job to go to — as long as it’s a job that’s a good fit for me and my skills and doesn’t have a work-life imbalance. I think going forward, an ideal setup would be a job that is less than 40 hours a week. Maybe 32 if I could manage it. That would give me time to get stuff done during the week and allow me to enjoy my weekends more. That is more of a long term goal, though.
I’ve learned I need to get better at telling people no. I have people coming to me on a fairly regular basis who want to collaborate with me on a project or want me to contribute to something they’re doing. I don’t spend nearly enough time thinking about how much time/effort it will take from me and my life before I say yes. I only have so much space in my brain and I’ve found it gets full fast! After I left the podcast, I likened it to defragging my brain. I have so much more brain power to put to things now that I’m not worried about the five million and one things podcasting requires. That is but one example. The same thing happened when I stopped the other side hustles.
I’ve also figured out that I am my best self when living in a place with room to sleep in, a room to do crafty things, some storage and an in-unit washer/dryer. I think my mental health and happiness levels really suffered when I moved in with friends or lived in a studio apartment. As happy as I was to live with other people, I never really felt truly at ease in someone else’s home. I need a home of my own (whether that be a condo or single family home).
Stage Four is where I’m at now. It’s about doing something different. It’s about optimizing for happiness, not money. Now that I have a healthy cushion, I don’t necessarily need to frantically hoard money like Smaug the dragon. Instead, I can do things that bring my happiness back up to its normal baseline. With that in mind, I’ve let my budget loosen a bit. I will be upping my food budget to a number more in line with what I’ve been spending in the past, instead of the aspirational food budget I have now. My housing budget is also going to change. I don’t know specifics yet, but I will be going from splitting a 2 bedroom apartment in DC proper to a bigger place somewhere in Fairfax County, Virginia. I will be getting more space with a higher price.
Yes, that’s right. I’m doubling my housing budget to see what that does to my quality of life. Crazy, innit!? That’s kind of what is fun about life though! We get to try these things and if it doesn’t work out, we can always try out new things.
“I never look back, darling. It distracts from the now.” — Edma Mode (Incredibles)
Thanks for reading! How has your FIRE journey changed over the years? Sound off in the comments below!
Nice post! I can definitely identify with the different phases of the FIRE journey that you describe. I think many of us have ‘overdone it’ at one point or another, whether it’s being too frugal or taking on too many side projects. I’m glad you have found the balance and are enjoying the ride.
Adam @ Brewing FIRE recently posted…Net Worth Update – May 2019
Thanks Adam! Hopefully your overdone phase didn’t last too long!
This is one of my favorite posts from you. I love that you broke it down into those stages, because I think that most people chasing FIRE at least make it through step three (sometimes skipping one). I’d argue that step four is the most important one, though it gets missed all too often.
Angela @ Tread Lightly Retire Early recently posted…Women’s Personal Finance Wednesdays: Week 38 Roundup
Aw shucks 🙂 Stage four is definitely important — what’s the use of pursuing FIRE if you don’t have anything to look forward to or you’re super unhappy?
We just moved from the Bay Area to Boulder and live without housemates. Have to say I feel more relaxed than before. Way to go with changing your mindset!
Anna @ Garlic Delight recently posted…Taste Test: Should you feel guilty about using fresh garlic substitutes?
Isn’t it amazing what a difference it makes? I enjoy being around people but I need some space!
Completely agree about solo living. Until I bought my flat a few months ago I was living in a shared house and was utterly miserable. And this was a case where I liked my housemates. They were friends I’d known for many years who I would (and still do) choose to socialise with.
But at home I need my peace and quiet and space. I used to find myself sitting in my room dreading having to speak to my housemates, whereas now my favourite place to be is probably at home alone.
I saved a crazy amount of money by living in shared housing but couldn’t have sustained it any longer than I did.
Fretful Finance recently posted…The Suffocating Dread of the Pension Crisis and Ageing Population
Yes! I get along really well with my roommate and the other people I’ve lived with in the past few years. I just struggle having to confine my stuff to one small area. I do much better when I have room to spread out!
I love the look at the four stages. I have benefitted so much from your blog and the stories you tell, because it’s so easy for us to all dive in head-first just because it seems like everyone else is doing it. Your experience with the house, the entrepreneurship, and saying ‘yes’ to a lot of things is a great learning-by-proxy example for me. Especially because I’m at the place in your stage 1–2 where stage 3 is looking pretty enticing. It’s good to realize it’s not all rainbows and butterflies when you are a landlord or when you quit your job. You have grown so much! Here-here to stage 4!
Are you trying to make me cry? Thank you for the kind words! I benefitted so much from other’s stories when I was just starting out that it’s the least I can do to share my story and the lessons learned from it. I definitely suffered from a serious case of ‘the grass is greener’ syndrome. It’s important to know yourself, know what you’re good at and what you enjoy when you consider your life and what you want to do with it.
Stage 4 is where it’s at. That’s where all the cool kids are.
Everyone journeys at their own pace!
Well said! There’s a lot of self-learning in stages 1–3. Stage 4 seems kind of like the top of Maslow’s Hierarchy of Needs (self-actualization), where you’ve finally arrived at understanding what’s really important to you as a person and brings the most value from a budgetary perspective.
And your Edna Mode quote choice is quite good — I forgot that was in the movie. Little did I know I could get mindfulness lessons from Pixar! 🙂
David @ Embracing Lagom recently posted…The “Fortune 500” Discount – Taking Advantage of Voluntary Benefits
Excellent point David! I’ve reached the point where day to day finances aren’t a huge source of stress for me (or saving for retirement) so I can focus on all the higher level stuff like happiness.
It’s so important that your FIRE be exactly that, yours. Not everyone is going to be a global nomad, living out of a knapsack and blogging from coffee shops. Some will want to put down roots with brick and mortar substance. Good for you.
I used to think I wanted that #nomad life and honestly, it sounds like a terrible fit for me. I like having stuff and having one place with my cute kitty cat to greet me at the door every day.
There is nothing wrong with that at all. To each his own in order to maximize happiness. Even for a nomad, or as I call it, being “home free,” it was a little strange getting rid of everything. Now every time I throw away one more charging wire I don’t need, extra pair of socks, etc., I no longer have to carry around in my backpack, the freer I feel. After a while it feels like anything nonessential is just an encumbrance. But that life is for very few and I would suggest that anyone considering it try it out thoroughly before taking it on. It could lead to extreme unhappiness.
Whereintheworldaremikeandjan recently posted…Day 485 of Traveling the World, Osaka, Japan. June 11, 2019.
I had a few unhappy jobs and situations along the way too. I also frittered away a lot of money going in wrong directions. Hang in there when it gets tough. It is worth it when you finally get to the point where you can do exactly what you want to do where you want to do it. The potential for financial independence, freedom, and world travel is out there. Keep up the good fight. Hope to see you somewhere in the world.
Whereintheworldaremikeandjan recently posted…Day 485 of Traveling the World, Osaka, Japan. June 11, 2019.
Thank you! I’m already starting to see the fruit of my labor pay off and it’s tasting pretty darn good.
Hey Gwen! It’s been a little while, thanks for bringing me up to speed!
Loved your comment about learning how to say “no” — that’s definitely a personal development journey for most of us. It’s totally OK if it’s not mastered overnight!
I can relate to your old Stage 3 right now. I’m trying to balance my full-time gig with a drive to go full-time with my side hustle. It’s a lot of work, but I’m still working that path. Your description of Stage 4 gives me a lot to think about, and I love how you’re willing to experiment with your lifestyle. All the best!
Mike recently posted…What is Leadership Coaching?
hey man! good to have you here! Good luck with all your hustles! I hope you find a good balance for your life!
That’s great that you have come to realize this about what your needs/ wants are and what makes you happy!
My ideal would be about 15–20 hours a week! I wouldn’t mind working but just not doing 40+ hours a week. It’s just very tough with young children.
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Ever since listening to the Mad Fientist’s interview with Cal Newport, I have been working on optimizing for happiness over frugality. This has actually led me to therapy – a significant weekly expense. But, it’s an investment in myself that I’m willing to make. Besides, if I learn to overcome some of my anxieties and find joy in work, then I will likely work longer and earn back that money spent. All while enjoying life more!
Therapy has some great ROI attached to it. I think I should go back to a therapist. The one session I did was incredibly valuable. Here’s to enjoying life!
I love how you broke this down! Thank you for sharing your self-reflection about this process, I’m sure a lot of people have been on similar paths.
I think I’d be at the very earliest part of Phase 2. I’ve only been aware of FIRE for a couple months, and like you, have been decently financially savvy (compared to my peers) until now. However, we have made some large and pretty crazy purchases (e.g., a new car, which we needed, but we didn’t need to go all out) in the past couple years. Granted we could ‘afford’ those purchases, but how far did it set us back? I’m enjoying this evaluation stage of early-Phase 2. Of course, Phase 4 is the ultimate goal… cheers!
Mel recently posted…food costs challenge – june 2019 check in
Agree 100% that FIRE comes in stages, and while the RE stands for Retire Early, many proponents still work. And if the work you love is office work, that’s great. I can totally relate, as my consulting, while mostly virtual, sometimes takes me onsite to a client, and those projects are fun — it’s nice to have a place to go to, camaraderie with colleagues, even just the water cooler banter!
Caroline at Costa Rica FIRE recently posted…Pittsburgh Road Trip – Driving 1,100 Miles To Buy A Shirt
It’s weird to think how much I like being in an office environment if the conditions are right. I need room to roam around, lots of people to talk to, and problems to solve for others to help them do their job. Once those conditions are met, I’m a happy Gwen. If I’m stuck in a cube with the same teammates for years on end doing what’s essentially busy work, I’m a very unhappy Gwen.
What’s interesting about your journey (and quite different from mine) is that you didn’t throw money at your problems when you were younger (you’re still young). For example, my ex husband and I were having issues so I decided we needed a bigger house and that would fix those issues. Needless to say it didn’t and I was lucky to get out before prices dropped precipitously. There are so many other examples of how we think money can buy happiness. It’s cool to see that you have gotten to know yourself better and know what you need (for now, because we change and it may be completely different in 3 years), to have a fulfilling life and that there is nothing wrong with putting things on cruise control for awhile and enjoying the ride. The cool part is you have saved enough for the compounding to really do its thing so I think you will be surprised to see where you are in 5 years despite not completely optimizing.
You know, you have a great point. I think that’s because I’ve been surrounded by people who aren’t shy about the mistakes they’ve made in the past. They’ve been completely open about where they went wrong and I guess I’ve taken a lot of that to heart. Long story short, I’m glad I know people like you who are a bit further in the journey than I am and can help me avoid some of the maybe sub-optimal decisions I could do. (ignoring my time in Minnesota lol!)
I love this post (and the graphics)!
Omaha is a great little city, really the entire midwest is awesome. The annual meeting must have been an awesome experience!
You have provided such a great recap of your journey here Gwen. This is such an excellent post for people beginning their journey or people who have been drilling it. I love these four-stages and can clearly see myself and some of my friends in these different phases. I’m with you about optimizing for happiness and experimenting along the way (whatever that looks like in relation to money). I once lived in 330 sq. feet and now I’ve gone to the other extreme with a laundry room about that big.…
Glad you’ve figured out what works for you, including your housing and food budget. I’m still trying to figure out my spending — tracking it last month and this month to get a feel for how much I’m spending in each category — but once I do, then I can decide where I want to trim and where I want to loosen up a bit.
I’m not on a FIRE journey — I’m getting a late start for saving for retirement, so I’m just trying to play catch-up as best I can — so I can’t say how it’s changed. But now that I’m divorced, I’m better able to focus on retirement in general because, not shockingly, I have a heck of a lot more money without my ex-husband around. So there’s that.
Hey, I’m curious about your health ministry experience. The price is right, buthttps://sciencebasedmedicine.org/report-health-care-sharing-ministries-pose-risks-to-consumers-and-insurance-markets/
Did you run into any issues?
I never actually used them for anything medical. The one time I had a need, I went to a Planned Parenthood as I didn’t want to fight them for coverage. I did have issues getting them to cancel my policy when I went back to work, though.
Hey girl! I like where you are at in life — optimizing for happiness =). I love that we get to try stuff out & then adjust/evolve to what is right for us.
I too struggle with saying no. The book essentialism is the bomb on that topic. A friend has taught me to pause and say, “let me think about that.” There’s something about time & space which gives me insight into if I should do said thing and/or the courage to say no.
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