FIRE

Financial Independence & Retiring Early

You are going to have to sacrifice in life no matter what. Why make the thing you want your life to be, the thing you sacrifice?

In my mid twenties, I had super shitty credit and was tens of thousands of dollars in debt from a personal loan used for traveling and partying. I had no secondary education, no car, no house, no investments, nothing to show for it. As Dave Ramsey says, I had been trying to out earn my stupidity for years.

In 2009, someone left the book Rich Dad, Poor Dad on one of my airplanes (I was a 27-year-old flight attendant at the time, for a small regional airline, making about $1,300 a month). I read it in less than a day.

  • Here’s what you need to know from Rich Dad, Poor Dad;
  1. Poor people spend their money and save what’s left; rich people save their money and spend what’s left.
  2. An asset is anything that puts money in your pocket and a liability is anything that takes money out of it.
  3. Buy assets.
  4. Don’t buy liabilities.

After reading that book, I immediately stopped bleeding money on drinking every weekend and I stopped traveling for a while. I started picking up shifts, doing odd jobs, and became obsessed with paying off my debt. I loved it. It was a high better than anything I could buy, smoke, snort, eat, or drink. It still is.

Ten months after reading Rich Dad, Poor Dad, I was broke but I didn’t owe anyone anything and my credit was better.

A month after that, I borrowed about 10% from my 401K and bought a house.

  • Some people will tell you not to borrow from your 401K, and there are good arguments to this. I say (especially if you’re young) beg, borrow, and steal the money you need to get as many investments as you can.

At the time I bought my first house, I knew only what that book told me; so here are some tips it didn’t have that would have been helpful:

  • Download the app Mint, by Intuit, on your phone. Plug in every financial account you have and look at it every single day. Get annoyingly intimate with your finances. See where your money is going, see where it’s coming from, discover your patterns and triggers.
  • Subscribe to Mr. Money Mustache’s blog and read every word, front to back. He explains it all much better than I, and he’s funny so he’s easy to read.
  • Start having a daily conversation about money. Whether it be with a partner, a parent, a dog, or with yourself, start talking about and thinking about the tool, money.
  • Stop buying stuff and throw away all the stuff you currently have. Trust me.

Sticking an air mattress in the tiny half bedroom in the back for me, I filled the two bigger bedrooms in my first house (a single family home) with bunks to rent to others. I figured even if it only helped me pay the mortgage, it would be worth it.

I had eight beds and, within a month, I had a waiting list ten deep. I raised my prices. Suddenly I was making three times as much as the mortgage payment and was living with cool people who were paying it for me. With that one purchase, I more than doubled my income after the mortgage was paid.

  • You can rent bunks to doctors, airline personnel, family members, college kids, people who work but don’t live in the area, etc. The point is to think outside the box. The more beds you get in a place, the more money you will make.

A year later, my then boyfriend now husband, bought a foreclosed duplex and we fixed it up.

  • This is not necessary and we will never do it again! You can buy investment properties that are currently rented, literally putting money in your pocket every month and gaining equity, for a signature on a page and a down payment.

-However, do your homework on this. Make sure it is the right house, the right price, the right time, and the right rental area.

We rented out the top of the duplex for what the mortgage cost us and we moved into the bottom. We rented out our guest room for even more cash flow, and stuck another bunk (making it ten beds in total) in the room we had vacated at the first property.

  • Around this time, we got married at the courthouse. We went to our favorite sushi place and Dairy Queen, just the two of us. We kept it a secret for a year. For the first year of our lives together, it was ours, it was secret, it was personal, it was sacred, and that made it magical. If a big wedding means a lot to you, then you should do it. But don’t let anyone force you to spend thousands of dollars on a party, right at the beginning of your life, when you need it most.

 

Then we discovered the game changer, “No Spend Months.” My husband and I are pretty intrinsically frugal and still, this changed everything. We spent two months not spending a dime on anything that wasn’t an automatically deducted bill. Most people buy food during “No Spend Months;” we did not. I had just bought a 50-pound bag of flour, and it is amazing what is actually in one’s pantry once you start eating your stores down. We may have eaten yeast-less homemade bread with mustard on it three times that last day, but we laughed about it, we teased each other about it, and we grumbled about it. Together. Because we did it together, it was a blast. We were so invested that we would have gone dumpster diving before we spent a dime. After that, we ripped out our lawn and turned it into a massive garden. Our neighbors were inspired to grow their own food as well, so we each grew certain veggies and swapped.

  • Of course we should all be eating nothing but organic vegetables, but because of what I learned during those months, I am now retired with plenty of money to pay, out of pocket, for not just organic, locally-grown fruits and vegetables, but also for any health problems that might arise. I am living proof that you will not die or get sick if you abstain for a short while to reset your finances. Human bodies are very adaptable. I got far more from this incredible lesson in what we as humans truly need, than I would have from two months more of organic whole foods.

When the gas ran out, we biked. When the bikes broke, we fixed them. Once or twice I hitchhiked. We got exceedingly creative. We learned what we were made of and we learned what was truly important. It was a hell of a challenge and an exciting one. Sometimes it hurt, like it was supposed to. Sometimes it was damn frustrating but our true power doesn’t usually shine through until we face some sort of adversity. It was supposed to change us. And holy shit, did it ever. More than anything else.

  • Remember, there are two ways to have more money: make more or spend less.

We started realizing how wonderful it was not buying stuff. Then we realized how wonderful it was not owning stuff. We started massively purging everything we had. The less stuff we had, the simpler things got and the more happy and content we were.

  • The Minimalists are a good resource to help you purge, should that be something that interests you.
  • Picking a great partner that has the same mentality about money is very powerful and helpful. There are seven billion people in the world. I highly suggest finding one you don’t have to work until your dead for.

After a year of living a simpler life, and hugely paying down our mortgages, we borrowed the down payment from a Home Equity Line on our second house (as everything goes to debt reduction we are always cash poor) and bought another duplex. We put my mom in the bottom, for half of what we could get in rent, in exchange for taking care of all the properties. We paid for a few small remodeling projects upstairs and stuck five sets of bunks up there to make another professional house. That house also makes over three times its mortgage.

 

At that point, we were making enough money to support our lifestyle very comfortably. I quit working. A lot of people will tell you that you need a certain amount of net worth to retire, but to me, that is an antiquated way of looking at the world. In fact, in my experience, you can pretty much throw out the window everything you have ever been told about money. You don’t need a chunk of money saved (I had about $3K in my bank account when I stopped working), you simply need enough sustainable, passive income coming in every month to be comfortable, whatever that means for you.

Next, we opened up our house and had a “Name Your Own Price” sale for what was left of our things.

After that, we bought a 34-foot, 2-bedroom sailboat and moved into a marina in the area (Saint Paul, Minnesota) for a mere fraction of what living in a house cost. We had the best summer of our lives on the water.

  • Even in Minnesota you can live aboard a boat year round.

  • Check out this option if you live by the sea, a lake, or a river. It can be cheaper than living in a house and SO MUCH MORE FUN.

We rented out our side of the duplex, making even more money.

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My husband still works. He likes what he does. He’ll retire whenever he wants to. Until that time, all his money goes towards the mortgages. One is paid off, the other two are well on their way, and we just invested in an incredible new marketplace at the Schmidt Brewery Complex in Saint Paul (all of our properties and investments are within six blocks of one another to keep them easy to manage). We live off the income from the one house we have that is paid off. Everything from the other two properties also goes towards paying down debt.

  • This is very important. Retirement doesn’t necessarily mean you quit working. The Mustache has a great post about this. My husband enjoys his job a hell of a lot more now that he doesn’t have to do it. Which is great in any number of ways, but mostly that he’s happy and is making us more and more comfortable as he keeps working.
  • I also didn’t stop “working”. As we sail around the world, I am writing about it. As we had never touched a boat before we bought ours, sometimes it can be extremely interesting. I was just published in Germany. Once I was free of the need to make money, I was able to figure out what set me on fire. What would make me excited to get up in the morning.

-This is a gift I wish for every one of you.

Living off of what society views as “so little” (about $2K a month for fun, food, boat stuff, etc.) has not blunted our happiness one bit. This is $2K that we don’t work for. It is a fraction of the money that comes in steadily and sustainably every month, and will as long as we want it to.

  • We also give ourselves “fun months.” Every time we pay off $100K in debt, we give ourselves all the income we make for one month to play with.
  • Soon, the houses will be paid off and we will then loosen the reigns a lot on spending.

When fall came, we took our sailboat down the Mississippi River from Minnesota to New Orleans for the adventure of a lifetime. For the price of gas.

We sailed it through the Gulf of Mexico, spent a year anchored in Key West, and are now living exceedingly carefree lives sailing around the Bahamas with everything we own. Which is almost nothing.

We live at anchor. Which is free. We have solar panels for electricity, a water maker for water, and we eat out of the sea often. When things on the boat break we have such a surplus of money from these things that it doesn’t matter.

Our lives are lacking in no way. In fact, our lives are more fun and full than they have ever been before.

  • Know what you want to do when you’re done working. Don’t just “want to stop working.” That is not a goal that you will actively work for, and once you are done working, you can feel sort of stagnant. Be more specific. What were your dreams as a child? The big ones everyone told you you couldn’t have. Write them down! Tape them up! Plan them out and TALK ABOUT THEM EVERY DAY.

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Four things happened down my road that have expedited my retiring five years after learning how:

  1. Our first two houses were bought right after the bubble burst and were great deals. As Warren Buffet says, “be fearful when others are greedy, and greedy when others are fearful.”
  2. I married a man who has never said the words, “we can’t because…!” Instead he says, “OK, how can we…?”
  3. We got very lucky in that neither of us ever wanted to create babies.
  4. We really like being uncomfortable.

What are the things in your life that help you? Perhaps you aren’t a big drinker (seriously, the amount of money the average American spends on alcohol could buy them a down payment on a house every year). Perhaps you love your job. Maybe you have a benevolent person in your life that could help you get started. Maybe you like numbers or you like the game. Maybe you’re a handy person or a quick learner. Or just maybe you are inspired as hell right now and that will be all it takes. It really can be that simple.

  • I met a woman in early 2017. She was broke and living far beyond her means in L.A. By early 2018 she had three rental properties in Oklahoma City and will soon have enough passive income to retire. It took her a little over one year. This is what happens when you have problems and ideas, instead of excuses.

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My best advice, my very number one even before “make more money”, is this:

MITIGATE YOUR OUTPUT.

This is my favorite sentence.

MITIGATE YOUR OUTPUT.

Take your current biggest output, for most this would be mortgage or rent, and do whatever outside-the-box thing you can think of to get that money back in your pocket. Rent your extra rooms to friends or family (bunk beds are your friend here), move in with your parents or another family member for a while, just until you save enough to buy a duplex. Live in one side and rent out the other side for more than the mortgage (my favorite). Buy a tiny house, build another tiny house next to it, and rent it out. Build a tiny house in your yard and Airbnb out your main house. You are limited only by your imagination.

Ok, so now all that money is back in your pocket every month. Take your next biggest output, car for most, and get creative.

  • If you buy your duplex extremely close to work, both your big expenses are banged out in one go.
  • If you currently own your home and buy a duplex, then rent out the first house as well as the other side of the duplex, not only are you banging out the two biggest outputs in one go, you are also gaining equity and income, if you do it right.

There are so many inspiring new ways to travel that don’t rely on fossil fuels. We have Onewheels now because they fit on the boat. When I am rolling down the street every day, there is a huge smile on my face.

  • If you go this route, be prepared to stop every couple of blocks so someone can tell you how amazing it is.

-If you hate this get big headphones.

Originally, we bought these great old mopeds that we LOVED riding and sold our car. We filled up every 100 miles for two bucks. We rode them all year long in Minnesota. Because we had problems and ideas, not excuses.

If we absolutely needed to travel in the states, we got an Uber.  The money we spent would never come close to the expense of gas/car payment/repairs.

So all that money for gas and car payments is back in your pocket every month. Now what’s your biggest output? Food? COSTCO is your friend. And gardens, not lawns. What next? A beloved hobby? I can’t help you there but you see where I’m going with this.

Mister Money Mustache says, if you have credit card debt you should feel like your hair is on fire. I extend this to any debt at all. Debt is not something you chip away at. It’s a huge fucking emergency.

  • Remember, your debt is someone else’s wealth.

All the money you save can now go towards debt reduction. Once your debt is gone? Well, eventually you’ll be like Johnny Depp in that movie Blow, when he’s got that box of money but all the rooms are already filled with boxes of money.

  • Except hopefully, you will be using yours to buy more investments.

Note: I used to have exact numbers on here for everything I have discussed, but I found that people would use them as an excuse for inaction. “I couldn’t make that much in rent in my area” or “I need more than that.” How big the leap you take doesn’t matter and I am in no way, shape, or form telling you to do what I did. But, if you want a life you have never had, you need to do things you have never done.

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Who the hell am I to be giving advice to anyone else?

I don’t regret any of what I’m about to tell you. It was expansive and I am grateful for every experience I have ever had, even if it only taught me what I didn’t want my life to be.

I grew up on the East side of Saint Paul. It’s no Harlem, but it’s no North Oaks either. I was smoking cigarettes at 11, weed at 12, and meth at 16. I got kicked out of my first high school. I made money by dealing drugs or stealing Sudafed from the drug stores in town for the local cookers. One person, from my chosen friend group in my teens, is in prison for walking up to a car and shooting three kids. Over drugs. One of the kids died — he was a nineteen-year-old, chocolate-haired boy named Mathew, who just wanted to feel too much. My inseparable best friend in my early twenties has been in and out of rehab for heroin for the last 15 years. I recently heard that one of my oldest friends helped a guy rob and kill her boyfriend a couple years back. Also over drugs. I don’t know that this is true. I don’t even want to step back into that world long enough to find out. Where I grew up, the only way to have any kind of power was to out-ghetto the person next to you, and loyalty was shown by doing incredibly and increasingly nonsensical shit.

If you had met me in the last ten years, this would shock you. I’m smart, healthy, and happy. I’m married to the most painfully intelligent, incredible, mild-mannered, trusting, loving, thoughtful, accepting person I have ever met. A man who is nothing like the paragraph above, who knew what he wanted to be at 10, and who never strayed from that course. I live life on vacation, have more money than I know what to do with, and never have to work again. I’m surrounded by truly remarkable people who love me very much, trust me completely, and whom I would die for (though I probably won’t have to because they make mostly really good life choices).

Through empirical evidence, I can say with certainty that your life is absolutely and only the sum of your choices.

Society didn’t tell me I could believe in myself and have an amazing life. In fact, from the moment we’re born, it’s beaten into us to be “humble.” To be less than. To not talk about what we are proud of about ourselves. To not step outside the comfort zones of those around us. Only when I finally said ‘fuck that shit,’ did I live happily ever after. It took five years for me to go from morbidly broke, to comfortably retired. So, I am giving you yet another leg up that I didn’t have.

  • You absolutely can believe in yourself. If I, as completely and utterly lazy as I am, can do what I needed to do to live a life I actually wanted, I assure you, you can do it too.
  • Don’t stay in the gutter. You are not a victim of anything but your thoughts and those are easy to change.
    Also,
  • Fall in love with failure. Failure means your pushing against your constraints. Keep pushing! Churchill said, “Success consists of going from failure to failure without loss of enthusiasm.”

I have absolutely fallen in love with failure. I like to see what I’ll do. We failed a lot during those five years. We made some excellent financial decisions and we made some poor ones. To name a few: we started and closed a business; we spent far more money and time fixing up our second house than it was worth; and at times, we rented our places for less than we could get because we liked the people in them. We failed. Sometimes, as with the business, we failed hard. But, we learned more from those experiences than anything else we did and we are exceedingly grateful for those lessons.

Once I shrugged off society’s way of doing things, I realized that having money had zero to do with who I was or where I came from and everything to do with how I thought about money. I realized I could have my life be anything I wanted it to be. I didn’t just realize this, I believed it, even though I was poor as hell. It’s all that “write yourself a check for a million dollars, dated ten years from now” kind of stuff. That shit should not be real, but it is.

So, today you don’t live in the gutter anymore!  Stop building a case for why you CAN’T do/have/accomplish the things you think you want. I can spot these people from the first comment to me about this article. It always starts with, “that all sounds great but even though I want those things, it wouldn’t work for me because…” If that is what you are thinking right now, know that it is YOU holding yourself back and STOP DOING IT.

To change all of this is going to require a level of honesty that you probably can’t imagine right now. It was not easy to intrinsically understand that it was my  lack of discipline that was holding me back, that, as with just about everything, I needed to do the internal work. But the good news is that once the brainwashing went away, it got easier and easier to build the neural pathways to better habits that got me to where I wanted to be. You will find evidence of your beliefs no matter what they are. Especially about yourself. So change them.

One of the differences I have noticed in the two types of people (the I-can’ts and the boy-I-wonder-if-I-coulds) who react to this information is this; one is trying to win life. This is the mindset that keeps most people in the gutter. They do nothing, because they don’t think they can win. Good news; you are not in competition with anyone else! You actually can get better everyday. You can not get better than anyone else. We are all changing all the time. At no moment will you be done. At no moment will you have won life and then be happy forever. There is no place to get to. I have not won anything and I will never be done. Why would you want to be?? I can’t think of anything more boring. Amy Poehler wrote something in her memoir that has always stuck with me; you need to surf your life, not plant your feet.

Some people stay firmly in the suck-hole because if they deign to think they are above it, the people around them would swiftly remind them of “who they are.” Some people will always have a problem with others who drag themselves out of the mud. Those people have fought long and hard to convince themselves they can’t have anything better and, well, misery loves company. Truly believing in yourself is a great compass for finding out who your friends are and weeding out the weak in your herd.

 

In the cruising community, I get asked daily how we are sailing around paradise without working at such a young age. This is why this little novella exists. I hate the sadness in their eyes. I hate watching them feel all the years they worked for someone else crushing them. I hate that they had to wait until their bodies hurt to do the things they really wanted to do. I hate every god damn text book, every teacher, and every school that actively and purposefully doesn’t teach children about financial independence; mental, physical, political, and romantic health; or anything else of any substantial importance. I’m here writing this to try and mitigate that sadness in the world. David Viscoff said, “The meaning of life is to find your gift. The purpose of life is to give it away.”

At some point during my journey people started asking me if I could help them. And then after we started talking, they started helping themselves. Watching them gave me a joyful peace inside myself that was so exquisite and edifying to my life that I knew I had found what I wanted to do. I wanted to make as many people successful as I possibly could. Success in the way of Tony Robbin’s ideology. I want you to do what you want, where you want, when you want, with whom you want, for as long as you want. The very best part? I don’t have to make money doing it! I am not selling anything and I make no money from this blog. The hyperlinks are only in here to get you to tools that work, faster. I don’t have any courses or workshops to help you (please don’t message me that I should, the point is to not monetize this thing) I have only this article and myself as a place to bounce ideas off of. I am here for you because it makes me feel good to help you.

We are not meant to spend the vast majority of the good part of our lives working towards someone else’s goals. It really is all very simple. If you meet someone who is where you want to be, ask them questions and listen to their answers. And NEVER, UNDER ANY CIRCUMSTANCES, say anything along the lines of “that all sounds great, but I can’t because…”

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Feel free to share this with anyone you think it could help, and to message or follow me: — InstagramFacebook.

I’m happy to think outside the box for you when you can’t.

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