Some of the core tenets of the FIRE movement: Save money, live below your means, choose modest housing, buy used when you can, DIY whenever possible, ride your bike as much as you’re able, travel hack, and be frugal with food spending. If you want to supercharge your FIRE journey, maybe invest in real estate, and pick up a side hustle or two. All do-able, right?
I found the FIRE movement when I was 21. That was roughly 8 years ago. By following the paths of those on the FIRE journey before me, I avoided many financial pitfalls that commonly trap young professionals and instead dug into the list of tenets above: I had roommates. I drove the same car for 9 years. I hustled like crazy with various projects on the internet. I made my lunch as often as I could. I maxed out my retirement accounts. I travel hacked several amazing trips. I kept spreadsheets of every penny I spent. I bought a multi-family property and turned a profit. I bought as much second-hand as I could (& utilized groups like the Buy Nothing Project).
Did it work? ABSOLUTELY.
I’m 29 years old and I’m a quarter-millionaire! The median net worth for someone under 35 is $11,000. The median net worth for someone 65–74 is only $224K. And because statistics are fun (but can be misleading), the average net worth of someone <35, and someone aged 65–74, is $76K and $1.1m respectively. I’m doing better than the median and average millennial and doing better than the median older age bracket in America. I’m not bragging — merely citing statistics to show I’ve saved a LOT of money in a relatively short time. [stats from this article]
When I started my FIRE journey, I wanted to retire at age 35. I strongly disliked most things about the professional lifestyle — I wanted to regain the freedom I had in college. The freedom to take naps and work on whatever struck my fancy that day. I wanted to save as much as I could to buy that freedom as quickly as I possibly could. BUT, the more I worked/saved and hustled, the more I felt trapped. I started out on the LeanFI path, where I could spend $23,500 a year. I no longer see that as realistic for me. It turns out I just wanted to work for an organization that respects me as a human being! Who knew? Turns out I can make money and have freedom too!
Since I was a teen, my Mom has accused me of having champagne tastes on a beer budget (no I was not drinking back then!). That was definitely true. Fast forward to today and I’d say my tastes are more sparkling-wine-not-produced-in-France on a seltzer budget. I don’t pursue extravagance; I see no reason to buy fancy brands, have the latest and greatest electronics, lease the nicest car, or impress people with my ZIP code. I also don’t see the necessity of cramming myself into a tiny studio, or being a landlord, or driving a $500 jalopy, or subsisting on rice and beans.
I’m working on finding balance in my life.
Am I great at finding balance? Not yet — it’s a practice, just like yoga or Buddhism. It’s the reason I rented a fancy $1,800 apartment near DC last year. The pendulum swung too far to one side on that one. I learned from that experience and now have a nice, reasonably-priced apartment in St. Louis. I could’ve spent a lot less on rent than I do now, but I love my neighborhood and my apartment. I have enough room to eat, sleep, bathe, play, and work in my space, which is vital to my wellbeing (particularly now that I work from home).
As I wrote in my Great Car Debate post, I’ve been struggling against the pull of a new car purchase for the last 5 years. Matters accelerated quickly (well, the opposite) when my car nearly overheated in a drive-thru. I discovered the car has a coolant leak that is most likely due to a failing head gasket. The car has had plenty of work over the past nine years but I don’t have the tools or the space to continue doing the work. Frankly, I don’t enjoy it either. It’s stressful and I’m terrified something will go wrong…leaving me stranded (or worse). With 194k miles on him, Levi needs more and more work and I’m done dealing with it. If you are handy, enjoy working on cars, and have the time to do so, I encourage you to look for cars like Levi to drive (or come to St. Louis and pick him up — special price for my readers!). Once someone fixes the head gasket, figures out what’s going on with the AC, changes the oil, replaces the serpentine belt, repairs the suspension, and puts 4 new tires on him, he’ll be a great car again. But that someone will not be me.
While I limped around in Levi, I did my research and kept an eye on the market. Initially, I was looking at a Honda Fit or a Toyota Corolla hatchback. But then I did some more research and found I really liked the Subaru Crosstrek and the Mazda3. Unfortunately, there were no fairly-priced Crosstreks (even if the car has a dope song about it). There were no Corolla hatchbacks at all, so that was out. There were a lot of Honda Fits and a few Mazda3’s. I created a spreadsheet to keep track of and compare the various options. As if I’d pass up the option to create another spreadsheet!
I went to test drive the Honda Fit and the Mazda3. The Fit in the spreadsheet was sold by the time I got to it, so I drove another one from the same model year and didn’t like it very much. I drove the Mazda3 and it just felt right. The S Grand Touring is the highest trim option available, so the car was loaded with options. It felt like a luxury car to someone coming from a barebones basic Pontiac Vibe… and the price was decidedly not that of a luxury car.
Everyone, please meet Carmen Sandiego, my 2015 Mazda 3! She’s got a mere 48,000 miles on her and looks like a much newer car. She is also a blast to drive, which is not something I’ve ever said about Levi (the closest I got was “BLAST IT” when the starter died and left me stranded). My out-the-door price from the dealership was $14,817.50. They took care of all the paperwork and I now have a car legally allowed to be on the road (Levi’s plates are from Minnesota and the registration expired last year… I’m working on getting the title so I can sell him). It was incredibly nice not to do things the hard way for once. No Craigslist strangers and having to figure out all the paperwork on my own. Did I leave money on the table by buying from a “stealership” (as my friend Bill calls them)? Probably. Am I ok with that? Yes, because it was easier. I still got a good deal and have some equity in the car already.
I know I’ve done well when some of my FI friends AND my real-life friends had strong reactions to me buying a new car. Reactions ranged from “WHAT? YOU WENT TO A DEALERSHIP? HAVE YOU LEARNED NOTHING?!” to “Damn finally pulled some of that money out the mattress”. I learned what I needed to know to not get ripped off when buying a car from a dealership, and am very grateful for all the guidance and lessons learned in the past.
The loan from my local credit union is for 36 months @ 2.94%. My payment is $410 a month, but I intend to have it paid off in about 18 months between my tax refund, my year-end bonus, and accelerated payments. I would’ve preferred to buy with cash, but that wasn’t in the cards this time. I’ll buy the next one with a wad of Benjamins for sure though 🙂
Just because I have a newer used car doesn’t mean I’ve given up on all the FIRE principles. I’m still going to buy used as much as I can because I enjoy the thrill of the hunt. I’m still putting money into my retirement accounts each month. I’m still eating most of my meals at home. I’m still keeping my electronics as long as I can but I am no longer optimizing every little thing. Since I’ll be working until 55 now, that’s an extra $1.5 million in my pocket in pay alone.… and that assumes I’ll never earn more than I do now. Add in two pensions, and I think I can afford to let my foot off the proverbial gas (and put it back down on a 2015 Mazda pedal! Zoom Zoom!) and live a little bit less lean for now.
As always, thanks for reading! Did you decide to upgrade something in your life? What was it? Sound off in the comments below!
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I still buy slightly used cars and I’m a multimillionaire. No matter how much money you’ve got it seems a little crazy to pay full price for a new car when I can get a three year old car that sold for $50K new for $22K now and still only have 25,000 miles on it. I know I can do that because I just did it four weeks ago on one of the internet used car companies. I used Vroom but I think Carvana and Shift are also great places to get bargains with very little time or hassle, and no bargaining. I have also found great deals at dealer lots though, and while I have always paid cash your plan to pay that car off early is solid. And that is a beautiful sweet ride you got and you also got a great deal in my opinion. As a retired irrelevant Boomer it is fun to see someone your age already winning with money. I liked my job too and worked longer than I needed to financially. I honestly think people that don’t hate their work end up having better early retirements, because they are just used to being content in life, which is a learned process. Great post!
Thanks Steve! I worked with executives and it was fascinating to see the range of cars they had from a nice truck to a basic BMW to a Mercedes AMG that cost more than my yearly salary. I thought about using the online car companies but they didn’t have any particularly great deals for the cars I was looking at. Thanks for reading!
I pulled the trigger on a “new” used vehicle last December. I was into year 4 without a car and it was getting inconvenient. I bought my 2016 LEAF from Carvana and it was shipped to my door. It’s amazing the new ways you can buy a car now! I put a 50% down payment to keep my monthly payment low ($140 @ 3.99% over 48 months). I too will be paying it off in about 2 years. Final cost should be about $12.6k. Congrats on Carmen S!
Sounds like you got a pretty good deal! I wish I had been able to do electric or hybrid. Thanks for reading!
Nice post. FIRE is definitely a spectrum. I’ve found myself having to learn to be ok with my own decisions and what works for me. My FIRE goals have changed over the years. I went part-time and since I’m remote working I see no reason not to keep doing it.
Also bought a used campervan to explore the country when I can.
I think there should be a FIRE/YOLO movement. 🙂
Take care.
‑clay
I think it can really help reduce that boring middle part of FIRE, to realize one has more options in between “spend ALL the money” and “save ALL the money”.
That is a very reasonably priced car that will save you money on gas, will not depreciate quickly, will be easy to maintain, and will last you a decade if you want it to.
Assuming you own it for 6 years and put 10k miles per year on it, I just check the kbb value of a 2009 Mazda 3 with 100k miles and it’s worth about $6k private sale. If your car depreciates similarly, that implies a monthly depreciation cost of only $125/month, which is very affordable for your income even in the scope of FIRE, and doesn’t even capture the savings in repairs that you will have relative to your old car.
Buying a car is a minefield of financial mistakes, so although some people think “newer” cars are a mistake for FIRE, there’s a canyon sized difference between buying an affordable $15k mazda and paying it off in 18 months, VS taking a subprime $20k loan out at 14% interest to buy a german (maintenance will wreck you) car worth $15k (by not comparison shopping and adding on useless extended warranties) and financing it over 7 years. Being strategic with money and purchases makes buying nicer things cheaper overall.
Hi Gwen,
It will be good to pay the amount in full rather than instalments. The thought of having the debt is not comfortable and does not give one the peace of mind as per my perspective.
WTK
WTK recently posted…Meaning Of Peace Of Mind
It is great that you are finding that balance. I also had that FIRE revelation and I think it is normal to start with LEAN FIRE, because it is a numbers game – and getting to that number is the easiest part of the journey.
We haven’t upgraded anything yet, but we’ve been looking for a van. We have 2 kids now so it’s time for that van. I’m still debating if I want a van or SUV. In terms of car purchase, I for one bought a new VW Jetta, back in 2010. I still have that car and only have 50K miles on it. I learned my lessons on buying a new car, but I will still buy a “semi new” car ie low mileage. I don’t like to deal with repairs. With 2 kids in tow, I don’t ever want to be stranded.
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Gwen,
“The freedom to take naps” — haha, not the major value proposition for FIRE I was expecting, but still an enjoyable one!
Glad you sorted our the vehicle purchase and found something safe and reliable. I don’t think it’s really that big of a deal to make such a purchase on occasion, but it’s good to recognize you are trading off some amount of working time (or some other luxury you’d have to minimize) in order to make life a little easier.
Trying to DIY a head gasket yourself, especially if it’d be your first time, is not an easy car maintenance task. Probably best to avoid that, though it certainly can be done. I can recall standing inside the engine bay of my 300ZX when I was 17 doing a head gasket replacement.
Balance is certainly the goal in your FI journey, as you need it to be a sustainable process. It’s a marathon after all.
Chris @ TicTocLife recently posted…Be a Disciplined Investor: Avoid the Behavior Gap
Congrats on the new car! Sounds like a good deal in my book. I definitely think pursuing FIRE is a balancing act. There’s no reason to be miserable to save 10 cents but I also sometimes think some people’s “normal” expenses are outrageously high.
Hi,
I like reading your article. it’s really nice. congrats on a new car. I enjoyed your article. keep it up.
I’m a new reader to your blog but I think it’s important that you find balance and I applaud you for the pursuing the moderate path. There’s no reason to be miserable and stressed over an unreliable car. Also, if you’re like most people you are using that car a lot so it’s a daily reminder of how “nice” you have it. Look forward to more posts!