I was your typical corporate drone on the mundane path of working into my late 60s, and then hoping my meager retirement lasted until I died. It was the winter of 2015, I was in my early 40s. It was a dark and stormy night. I had made the kids their school lunches for the next day, cleaned the kitchen, folded the laundry. looked at my meeting schedule for the next day at the office, and a bunch of other boring monotonous crap that I did every night. Yay me! I begrudgingly headed out the door for my typical glamorous late night dog walk. It was nasty outside…the sideways freezing rain, windy as f#@$, kind of nasty that is fairly typical in the Pacific Northwest when the sun heads to southern latitudes for 16 hours a day.
None of this was out of the ordinary, in fact is was absolutely typical. What happened next however, was certainly not ordinary. As I walked up the hill, I received a text message. It was from my brother from another mother that his (not my) Aunt had died, and he and our youngest brother were inheriting another $500,000 each. Keep in mind, this is on top of the large trust funds that were waiting for them (not me) in a few years, which had been left by their (not my) grandmother. Now we’re not talking about generational wealth or tens of millions here, but we are talking enough millions that they didn’t ever really need to earn a living for themselves.
What was I getting out the whole situation you might ask? I was getting freezing fingers and a wet ass phone as I stood under a street light gazing at the message in disbelief. Time seemed to stand still for those next few moments. I remember thinking I should be mad, or sad, or hopeless, or bitter. After all, whenever I had previously thought about their financial situation and compared it to mine, negativity always ensued and was usually followed by hopelessness and apathy. At that moment however, I was numb. I was overcome with a sense of calm, or disconnectedness as the rain pelted me in the face. You could call it Zen maybe. So I left everything behind and ran off to become a monk, the end. LOL, not so much.
That moment, that pivotal moment in my life, was when I finally realized that I was playing the role of a money victim. I didn’t get a trust fund! I didn’t get the lucky breaks that some of my old bosses and coworkers did that came with overblown salaries, huge severance packages and subsequent huge signing bonuses! I graduated from my second round of college right as the .com crash happened which meant the tech world was over saturated with talent just as little old unqualified me was trying to start an actual legitimate career! I didn’t get a job at a start up that was sold for hundreds of millions like my FB friends! I wasn’t to blame, it was inevitable because of the hand that I’d been dealt! I had felt this way for almost 20 years. It was 100% total bullshit, all of it! I had fabricated a world of excuses in order to skirt the blame for my own situation.
Now to provide some context, I had been listening to The Millionaire Next Door on Audible right before I got the text message. It was a recommended book from the recently discovered financial independence blogosphere. I had slowly started to realize that I could potentially take control of my money and build a bright financial future, maybe even reach FI/RE. But it sounded hard, I would have to dig into my habits, make changes, make sacrifices, and GHASP…take responsibility for the last 20 years of wallowing in self pity. That unlikely moment was when I realized that I needed to stop feeling sorry for myself and get to work. I wish that it had clicked sooner, but it didn’t, so there I was. Time to stop playing the victim. Time to understand that I would only succeed if I immediately took full responsibility for my financial reality. It didn’t matter how much debt I had amassed, what career path I “could” have taken, what past $$ mistakes I had made (and there were plenty). The only thing that mattered at that pivotal moment was to leave the victim mindset behind and instead embrace the awesome power that I had at (my really cold) fingertips. Once I made this mindset shift, it was time to take stock of my situation and put a plan together. Onward and upward! Home, dry, and warm were my immediate goals, then on with the hard financial independence stuff.
While the path to financial independence is a simple mathematical equation, it’s not necessarily easy. I was in my 40s, with 3 kids under 8 (2 already in private school and another one hot on their heels), 2 large hungry dogs and $430,000 of mortgage debt. I was living in Seattle, a pretty expensive city, and had a relatively high standard of living. Our house’s location in relation to my work and the kids’ school means that we couldn’t legitimately function without 2 cars. We were spending over $120,000 a year. I can hear the early retirement extremists cursing and moaning from here.
However, on the bright side. I have always been somewhat frugal compared to most regular Americans in my situation. Both cars were over 15 years old and fully paid off, and we hadn’t paid a single cent in credit card interest in over 15 years because we pay off our balances in full every month. I had a 6 figure salary at a stable tech company, roughly $500,000 in investments, and two pieces of vacant land (semi liquid investments that we pay taxed on…boo!). While I was a decent clip behind the ideal state for my income and age, things could have been a whole lot worse. Fast forward 2 years and things are a hell of a lot better now than they were then!
In the past 2 years, I have made some significant changes besides just my mindset. I’ve reduced my recurring payments by hundreds dollars a month, with hardly any impact to my quality of life. I’ve sheltered 10s of thousands of dollars from taxes by maxing out my 401K contributions, opening and maxing out IRA and HSA accounts. I bring my lunch to work (most days), I menu plan, I buy in bulk when things are on sale (despite the snarky comments and disgusted looks), I play the travel miles game.
If I can do this, you probably can too. If you only remember one thing you ever read on this site, it should be this. You will need to spend (a lot) less than you earn and invest what is left over if you want to be in a position of financial strength. This is called “the gap”. Embrace the gap! Love the gap! Feed the gap until it hurts, so that the gap grows to be massive! Do this, and it will only be a matter of time before you are financially independent. The bigger the gap, the faster you will achieve the dream.