This is my last post for a while on money. I hope I haven’t worn you out, but have gotten you excited about what you can do with your money.
It is a movement! There are many websites, books, and devotees of this new way of living called, “Financial Independence, Retire Early” or “FIRE”. The idea is to grow your financial independence by saying no to debt and saving a large portion of your income in order to retire early.
People are sacrificing deeply in order to live this way–to have enough money to retire early– much younger than is believable. They are writing all about their experience on their blogs, like, Mr. Money Moustache–Pete Adeny who was thirty when he retired. Mad Fientist–Brandon Ganch was thirty-four, and Chief Mom Officer–Liz Gendreau is planning on retiring before she hits forty.
I have posted before about a young mother of 5 children, Jillian. On Youtube she talked about how even though she and her husband didn’t make high incomes– $60,000 combined a year–they saved $250,000 for the first ten years of their marriage. She said when they got married they didn’t know about the FIRE movement, they just wanted more control over their time. They lived in Montana and after they had their money saved, they found the ugliest house that had been flooded, so the owners took $20,000 off the purchase price and Jillian and her husband got it for $50,000. They paid cash, paying no interest, ever! They did the demolition work themselves from the flood, tearing ruined sheetrock off walls in the basement, in two days. She said, “Those were profitable days,” because they saved so much money doing the work themselves.
They had $200,000 left. Next they paid cash for a rental. That means no mortgage on it at all. Now their income stream was his army pension, of $1400 a month, their rental income of $1200 a month, and $900 dividends from stocks and bonds which they bought with some of their savings as well. With no mortgage or car payment, their bills total $700.00 a month–utilities, home insurance, cell phone, groceries, with $600.00 left at the end. I am guessing their medical isurance is paid for by the military, because he has a pension.
“We saved for ten years until we had $250,000.” Very few people talk about saving money in America these days. It’s boring, hard and doesn’t shout to everyone, “Wow, I have the best life!” It’s a supreme act of self-discipline, to save $25,000 out of a $60,000 income for 10 years.
To watch their video, to see them take ten weeks to travel with their children through America’s state parks, was amazing. They have taught themselves to do most of the repairs on their home and rental property,
They cook at home, and they continue to be careful with their budgeting and money choices. Their focus and intentionality has paid off with both parents at home living on income streams created from their $250,000.00 in savings. Neither Jillian or her husband have to work outside their home again ever, unless they want to. Jillian said making those hard choices earlier in their marriage gave them the amazing life they are living now. What a contrast to the double income that experts say we need for a family to survive financially in America. They saved early so they could both be free from showing up at a job each day.
If you are older you can still work toward this wonderful goal. It is very attainable when you decide you want more freedom in your life.
One of my favorite quotes from The Psychology of Money, by Morgan Housel, is:
“The highest form of wealth is the ability to wake up every morning and say, ‘I can do whatever I want today.’ “
As the blogger, Mr. Money Moustache says, “The journey away from materialism is a lifelong challenge…this weakness (of materialism) causes me to crave new things, and it is my job to work against materialism, and towards other forms of happiness.”
Can you see how much more peaceful it is to parent when you aren’t worried about your finances all the time? We can change generations while mastering this learning packet of Managing Our Money Well, and to steer our children from materialism and to other forms of happiness. This can take many forms, like serving the people we live with, experiencing nature, deep connecting relationships, and being fulfilled by meaningful living. There are life-changing books to read, movies that teach character, exposure to beautiful art, and other magnificent things of this world. Again, this commitment to inner principles is going against the grain in America, but when we feel this pledge to simple but meaningful living, it will be an easy thing to turn our back on debt and materialism that causes us to work long hours, away from our families, to afford what can’t satisfy us in the end.
When we can do this our marriage becomes a powerhouse of unity. House paid off? Check! Children’s college funded? Check! Retire early? Absolutely! We can do less mandatory work, have more time to ourselves, and be more of a giver than taker. We will have more margin to breathe in our lives while feeling purposeful and content. This is more inner work for us parents to do. When we are wise with our money it affects our marriages and families in a positive way–one of the causes of divorce is financial issues and not being on the same page. It is also an excellent example to our children on how to live. We then get to pass on this valuable tool to help our children to win with money. Financial security can bring a peace to our homes that is indescribable.
I have posted on financial principles for many weeks. My next series of posts focuses on what our greatest wealth can be.
How have you benefited from saving more and spending less?