Let’s get the physical part of this blog in gear. I’ve got a lot of developments on that front to better enable me to work out the way I want to at home, especially in this time of coronavirus.

It had been surprisingly difficult to purchase the gear I wanted because of shut downs, but back in November one website finally had some of what I wanted, so with some encouragement from my lovely wife, I went for it. I got:

• $761: A bar and rubber weights from Vulcan Strength to allow me to do olympic lifts (note the bar is important for this – the axle of the bar rotates separately than the ends where the weights go).
• ~$442: A power cage/squat rack plus a bench from Amazon and a few related accessories like this and this.
• ~$790: this super fancy direct drive bike trainer plus a cassette and a couple related small items.
• ~$200 of construction supplies to make my homemade weightlifting platform (2 layers of 4’x8’ OSB + 1 sheet of ¾” 4’x8’x plywood in the middle, a ton of screws, and then some ¾’ foam matts on the side).

Rough total for this home gym: $2,193. Whoa! That is not chump change, at all. On one hand I could probably do body weight workouts and add a kettlebell, and certainly I could have waited it out on craigslist… but hey, I can definitely afford it and the good news is that by having exactly what I want it has really encouraged me to get on a regular workout schedule, and made it easy to just get started.

I’ve worked out every day I’ve intended to and basically alternate weights and the bike with a rest day thrown in after a very hard workout.

If I was in another financial spot I wouldn’t have done this and can’t recommend it. But for me, in a high intensity, high paying job, I needed something to make it inviting and easy to get started working out. This is a luxury, but it’s also an investment: in my health. I basically went from zero to working out everyday, so for me, this $2.2k is peanuts compared to the incremental benefit I’m getting from it. It’s also created a dynamic where I want to make my investment worth it. When I’m not feeling like working out I can remind myself that I purchased this high end gear to make it easy, and it’s just sitting there. That’s usually enough for me to get started, and when I get started I end up completing a full workout.

The impact on my mood is huge. Working out, especially with heavy weights, calms me down, makes me satisfied with a feeling of tranquility. And right now, that feeling is worth more than any $ sign. This isn’t an endorsement of all spending with no consequence, but it was short sighted of me to wrestle with the decision for so long as it makes almost no impact on my financial situation, and has motivated me to focus on my fitness.

And the thing about many people in the FIRE community is we are so focused on just the financials, but really if your investments are  “only” at 10,15, or 20x your annual spending you do not have money problems. At all. So it only makes sense that this is not the area to fret about once you have your money game under control, and that we should take a broader look at our lives and focus on the areas we’d like to improve – not as something to do AFTER we reach FI, but right now as part of living a full and rich life. 

After that last long and rambling post catching my future readers up to date (hahah) , I’m ready to get onto a more frequent schedule. I got to thinking about the financial situation we’re in right now, which is honestly insane to me despite our spending being higher than planned, and despite the stress and related stress spending: we are way ahead of where I thought we’d be by now, but why?

First, what is our financial situation? We’re Millionaires. It’s a bit wild to write it out like that but it’s true. And with our spending under control, we are essentially financially independent. What’s crazy is just two years ago in my first financial blog post we had a net worth of $472,602. In two years we went from $472k to a cool $1M. How?

While that $472k included home equity the investment portion was ~$373k. With that let’s try an over-simplified exercise. Using VTSAX as a proxy for market performance, we can see that at 12/31/18 we were hovering around $62/share, and now we are around $93. That is a 50% increase over that time! Don’t forget dividends!

That means that before adding in the home equity then converted to shares, more bonuses, 401k’s, etc. that money we made and saved long ago fueled $187k of incremental net worth ($373 x 50%)!! 

That is wild to me. In the past two years I didn’t need to actually do anything to earn that money. I didn’t even have to save more: we had already saved that money and dumped it into VTSAX. We did our part many years ago and simply left it alone.

I found this to be really powerful, and also highlights how bad we humans are at understanding the present value of money. That $50 we didn’t spend going out to dinner one night is worth a helluva lot more than $50 today. If we string many of those $5, $10, $50, and $100 decisions together it adds up really fast. Spending less is really an unstoppable wealth building machine.

I’m thankful for me and my wife from 6 years ago doing a house renovation and investing it instead of buying a luxury car, and for 22 year old me investing in my first 401k at 8% of my salary. And that’s the lesson: Current spending is more expensive than you (and I) think it is and current savings is even more powerful, because the opportunity cost or benefit is massive.

Another take on this is an article from the BBC explaining the Exponential Growth Bias. So if you’re working hard, facing challenges like how to control spending, just remember you suck at understanding exponential growth, and the benefit you are reaping is way more than it looks like!

You know, this probably applies to things besides just personal finances, which is why I’m going to shut down this computer and go lift some weights. After all I did name this blog PHYSICAL and Fiscals.

If you spend any time around the Financial Independence movement you quickly come across the 4% rule, which basically says you can withdraw from your investments 4% inflation adjusted forever without running out of money. The inverse of this is take your annual spending x25 and this equals the investments you need to cover those expenses.

There is some debate around the edges, but enough other people have written about this we’ll use this. More reading here and here plus a great podcast episode here among many others sources you can find with a quick google search.

It’s really powerful to understand this but to the uninitiated it can feel overwhelming: if a professional couple making $60k take home incomes with zero savings is spending essentially all of their money this means they need $1.5M to be financially independent, which if you have a savings rate of zero is unattainable and overwhelming.

At first glance it is hard to understand how making coffee at home vs Starbucks, cooking at home, or even a $300 a month car payment can even put a dent in this. But, it’s shocking once you understand this: for middle-class America the path to Financial Independence is most easily attained by spending less.

Let’s take that $300 car payment for an example. Even beyond factoring all the other costs of driving, avoiding a car payment alone means you need $90k less in assets ($300/mo x 12/year x 25) to support that cash outflow, forever. That is crazy. So is this table:

If you spend $3,500/month you need over $1,050,000 to be Financial Independent. But if you can spend $2,000/month you only need $600,000. This means you need $450,000 less money to support your lifestyle, forever.

It is just insane. And if you can live on $1,500 a month which is far more than anyone needs for a happy life, you only need $450,000 forever. Alternatively if you spend $2,500 but have $1,000 from renting part of your house or a part time job, you still only need $450,000 forever. 

And $450,000 just isn’t that much money if you are middle class in the US and you learn basic frugality skills and invest it. I’m sure the average person wouldn’t agree with me here, but check out this chart assuming 7% annual return: 

In the first part of this article I noted that if you dropped your spending from $3,500 to $2,000/month you need $450,000 less investments to be Financially Independent. But that’s only half the story: if you take that $1,500 a month and invest in, in 15 years you have $475,443 in investments. That’s a combined $925K net positive to your financial life!!!!  All from cutting $1,500 a month in spending and still being at a super comfortable level of living expenses.

If you don’t like my numbers for starting and ending spending, you can pick any that you want, but the math will be the same: $1,500 less in spending a month = $925k of incremental-needs-adjusted wealth. Boom.

And if you are someone making a middle-class income spending 100% or more of all your money, spending $1,500 less in a month isn’t that hard. But, it’s also not all or nothing. If you spend even $500 less in a month the math still works out to be $150k less investments needed + $158k of future invested value = $308k of incremental-needs-adjusted wealth. Your financial picture gets brighter for each step you take.

It is clear: Spending Less is an Unstoppable Wealth Building Machine.

What a shit show.

The stock market has been on a wild ride lately, resulting in plenty of predictably irrational behavior. But for all that is holy – toilet paper hoarding?

The restaurant / bar down the road has done an impressive conversion to a take out / delivery joint with items on take out menu including take away drink kits with pre-measured booze and mixer, and rolls of toilet paper for 3 bucks each.

The internet has even more examples of this nonsense: here and here as just a couple of the many examples of hysteria.

I’m definitely not a medical professional and I certainly don’t have expertise in the coronavirus, but I know enough (and my wife IS a medical professional) to know that if you get the coronavirus, goddamn toilet paper isn’t a cure and won’t fix your breathing problems, so all of this is nonsensical. Also, if you are shitting that badly already see a doctor and invest in a bidet.

Another hoarding is example is this dumb-ass getting upset because a store is limiting the amount of Mountain Dew he can buy at once, and not letting him buy 552 CANS at once. First of all, no, you know what – I don’t need to explain it, it is absurd on so many levels. You are hoarding literal poison.

Why all of this hoarding behaviour? It is simply fear and the worst of group thinking. “People are buying toilet paper, I need to stock up too before it is out!” The mass hysterial is driving obnoxious behavrious. It’s kind of like the stock market!

The substantial value of the underlying companies in the beloved VTSAX index fund have not materially changed in the big picture, but everyone is scared that everyone else is going to sell, so they sell too, driving volitility and the price of the stock market down.

Meanwhile, people like us (long term investors) are putting more money into the stock market – we actually put in ~$48k in the past couple of weeks and bought stocks at a massive discount to the price just a month ago!

On a final note of this random and rambling blog post, it was a beautiful day here and I enjoyed 2 walks, 2 bike rides (one solo and one with the whole family), a delicious home cooked meal, and the security to know that no matter what happens I’ll always have enough.

Right?

After helping get the baby ready for bed tonight I went down to our apartment’s fitness center to work out. I haven’t worked out in a long time. I’ve had a narrative in my head that I don’t have time to work out because work is so demanding / work is so demanding so I’m too stressed out to exercise.

By default many nights I was dulling the stress and anxiety of work with a beer or two (or three or…). It was so hard to get started. After working in a high stress environment all day, commuting home (currently have a commute while we live in TX for the year… wtf was I thinking?), playing with my son, dinner, and getting him ready for bed, I was exhausted. And I still hadn’t decompressed from the stress of the day.

Getting calls from my boss at 8pm for “urgent” issues really doesn’t help that feeling, but that is a subject for a different blog post.

But I’m trying to make some changes and be more intentional, with recent efforts to:

• Learning how to play guitar;
• Undertaking a dry January;
• Starting to exercise;

This post is about exercise, so let’s get to it. I went to the fitness center and there was only one other person there, on a treadmill, which was great so I had the entire weight lifting area to my self.

I started with some squats, first a set of 10 with the barbell only to warm up, then another with 50 lbs added on which I repeated 2 sets of 10 reps, and finally I did a final set with 70 lbs.

As a side note I used to be a competitive olympic-style weightlifter. Competed in junior nationals among other things, but I’ve let that part of my identity fade away over the years. When I first got under the bar and lowered down I could feel my legs shake a bit, a creak from my knees, but then the familiar motion kicked in and I felt good. I love squats with heavy weights.

By the 3rd set my legs were getting sore, and I now they are going to hurt tomorrow. because I swear I could feel the micro tears in my leg muscle… AND IT FEELS FUCKING GREAT!!!

I feel great because I started and I know this is the beginning of building a habit, because when I lift I’m in the moment and not anywhere else: my anxiety goes away. I feel great, because I know this is what I need to be doing to make my life better and to build long-term happiness.

And I’m just (finally) getting started.

Last year we did a 12/31/18 financial update and found that we had a respectable $472k of net worth. While this is certainly a lot of money, it’s still a work in progress on our goal of FInancial Independence.

Now it’s time to look at how we did in 2019, here are the numbers:

Holy shit. That is a big jump, but how did it happen? Savings plus a great stock market performance:

The remarkable thing here is that our investment returns were more than we saved! The other remarkable thing is that we didn’t save as much as we had planned to. I’ll be honest, when I reviewed our expenses in 2019 it was a bit shocking how much we spent – we spent more than in 2018 even though we had planned on getting our spending down. We found that it’s been harder to be frugal now that we live in the city as we don’t have our community and instead of beers in the backyard, it’s us going to the local cafe/patio bar. In other words – 2019 could have been even more spectacular financially, if we had our shit together on spending to the level we are hoping to have.

It’s still amazing though, basically even though we screwed up on spending goals, because we don’t have new cars, we don’t shop as a hobby, and ultimately we are frugal relative to other people in similar career situations, we still saved a shit ton of money and are marching towards millionaire status.

It’s a good feeling. Looking towards 2020 we plan to sell our house we are currently renting out to the current tenants, buy our “someday house” and focus on frugality and living the good life. Financial independence here we come.

This is a post I wrote over a year ago but never posted. A recent event which entailed late night work texts, emails, and calls while on vacation and holiday reminded me that I had written this and resurfaced those deep feelings of a loss of personal sovereignty by being an employee. I don’t like this feeling.

I was informed at work this last week that I, a person who is a direct report of mine, and the broader team to work over, and then meet, this weekend, Sunday afternoon, with one of the executives about a proposal that is due to the customer 8 days later.

Early in the project I had warned that we’d need all of Monday to ensure the project was ready for internal executive review. Instead, this was chucked out the window, the explanation being that “we need to meet on the weekend in case Mr. Exec doesn’t like something, so we have time to fix it before the internal review – at 4pm Monday afternoon.”  What the actual FUCK?!?!?

Fuck this. I work too hard during the week, worry too much, and do everything I can during the week to have the threat of a weekend review with an Exec hanging over my head.

For a company that talks about Wellness as a core value, perhaps they should take a lesson in treating your employees like people, not expendable resources, vs requiring us to work until almost 7pm on the Friday before asking the team to work all weekend. Fuck this.

I’m sure the reactions to this can range from similar outrage that I’m experiencing, to oh come on, it’s just one weekend. To that I’d say, yes, but it’s one weekend I’ll never get back with my almost 1 year old son. And I didn’t even work all weekend, but the weight of this has been dragging in my mind the whole time. I didn’t sleep well, and I’ve been finding myself checking my work email. The question comes down to a philosophical question of who owns my time? Apparently, my employer thinks they own it on the weekends.

I had a few options on how to respond. I essentially caved, and grumbled to myself, and then later quite loud with my wife. Why? It’s a matter of confidence. I made the decision it wasn’t worth rocking the boat, getting a bad review (conveniently scheduled 1 week from this request).

If anything this has steadied my resolve to become Financially Independent. Nothing is worth this. But, the other consideration is do I need to wait then? No, of course not. I have options even if sometimes it feels like I don’t. Next time I can politely decline, but agree to do whatever they need during normal working hours and live with the consequences of that – most likely a lecture, etc, possibly a lower bonus or raise. Alternatively I can quit – we have the resources to make ends meet for quite a while, although it would seriously slow down our FI aspirations. 

But overall this is an example of the tyranny of having a full time job in today’s corporate world. The needs of the company are put first, and the fear of job loss or other painful but smaller consequences require obedience and the deterioration of individual sovereignty. There has to be a better way, and I think that way is FIRE.

Small actions and decisions, added up over time become your results. It’s easy to think of small actions as one-off’s and inconsequential. But they aren’t inconsequential, because they form our reality.

What you eat is a form of voting and you have to be able to control the force of your vote.

Voting for healthy and nutritious food is not only fine but useful and necessary, but voting over and over with force on food beyond your needs is voting for extra pounds and wasted resources.

You can be voting for freedom or voting for a beer belly and money you’ll never recover. Voting for widening your moat from worry, fear, financial hardships,  and risk upon job loss or voting for a never ending financial treadmill.

You can change how you vote at any time, every day. And it matters immediately.

At the end of month when you sweep your excess money to Vanguard, that is a vote towards freedom. If at the end of the month you spent a thousand dollars on shit you don’t need, you actively voted against financial freedom.

You can rewind your vote by selling shit you don’t need and escaping obligations like a car payment.

How you spend your time is voting for the you want to. If you spend your Saturday afternoon walking in the forest, listening to music and podcasts, or reading, you are voting for a renewed you. If you spend it binge watching Game of Thrones, you are voting to not improve your life, and to exit your thoughts. You are pushing a pause button, but worse.

The hard part is that when you vote for freedom it seems that you don’t actually get that freedom for a while, but this isn’t true. Every time you vote for Financial freedom you are building up a castle, and widening the mote from worry, fear, demanding bosses and coworkers, office disagreements, and most other forms of bullshit

When you vote for a salad over a food-like substance for lunch you don’t see immediate results when you look in the mirror. But every vote you (ahem, me) make for healthy salad immediately starts building your health.

Believe in the reality you want. And keep voting for it with each and every choice.

Your stuff is limiting your freedom. Don’t let it.

Every purchase should be thought of us a an anchor on a chain that wraps over your shoulders and the back of the neck that you have to carry around as long as you own the object. And when you give people gifts try and realize you are gently draping a tiny anchor on a chain over their neck albeit presented with fine wrapping paper and maybe even a bow.

Every time you purchase an item, picture everything you own, tied to a chain, wrapped around your neck and shoulders, and visualize adding yet another item.

Why? Objects take up space in your home, they use up resources of the earth, they eventually will take up space in landfills, and they represent opportunity costs that you could have invested instead. Purchasing stuff is a vote against freedom. Clutter is mentally draining, and diffuses your focus on what’s important. And the wild thing is, most of us are not conscious of how much shit we really have.

Right now, clear 10 minutes, and close your eyes. Start just mentally thinking of each room, closet, storage trunk, your attic, garage, patio or deck, or a [shudder] rented storage unit. Go deeper – within each area, think of all the objects there, squirreled away in darkness and individually consider each individual item. Hold them in your mind. The sheer volume of items is hard to comprehend. I then suggest you take a walk to each area and visually inspect it. Be in awe of the volume of your stuff. It just may make you rethink this madness.

It’s even worse if you are someone my age and still have stuff from your childhood or college at your parents’ home. You have taken many little anchors and strewn them around your parents’ necks, and it is pulling them down while the physical objects start caving in on them. It’s a bleak situation.

For certain things, the anchor is worth it of course.

Our ultra-deluxe-fancy-delicious-making-espresso machine is decidedly worth it in our house, as is our le creuset cookware. These are items that we use multiple times per week, we get actual joy when using – for example the heavy le creuset pots are by far the most enjoyable things we have to cook with, with even heat, a tight fighting lid, and colorized sides and bottom from hundreds of meals cooked in it.  It’s also important to point out that these are luxuries. The vast majority of human civilization today, and also looking back over the entire timeline of the species has not been afforded such remarkable luxuries. But we’ve chosen to indulge them and they are used often and feel “real” not made of cheap plastic. But even these hallowed possessions have a deep secret we don’t often stop to think about:

They exist, even when we aren’t using them. They are part of earth’s resources that are now taking up space on my counter and cabinet. And they are only used a small amount of time of their existence. The rest of that time they just sit there, useless and in the dark, but taking up space. This is ok for items that get regular use. For the rest? What are we doing? We could be using the capital tied up in these objects to buy our freedom instead.

I’m not perfect at this either, but one of the areas of success that has helped propel us towards financial freedom, is that we don’t shop for the sake of shopping. We don’t want clutter or more things. It is the simplest thing of all: just stop buying things.

Buy second hand. Give things away to people who will actually use them. Only give meaningful gifts that people will truly benefit from (but don’t ever feel obligated to give gifts – a future article). Clear your stuff out of your parents’ home and remove the anchors around them.

Feel your life get lighter when the chains of consumption are no longer hanging from your neck.

Reset

Welp, that didn’t work out very well: After some serious plans and goals I set way back in January, 2019, along with the best intentions of blogging my journey, I’m sorry to report progress hasn’t been made.

But a lot has happened: I got a promotion with more pay, we moved to another state far away from home, and life with an almost two-year-old keeps moving forward.

But I need to make some changes. Toxic stress, lack of exercise, and being overweight is taking a toll.

We took a stay-cation last week back in coastal New England and I finally had time to take a break, play and rest on the beach, and think clearly without all of the chaos. And I recognized that I haven’t been living the life I want to live. I have been succumbing to stress and poor habits, and I’m no further to my health goals than 8 months ago.

But this is it, that’s the end of it. I want to be here for a long-time with my wife and son, set a healthy example, and just feel good!

To start this I’ve decided to make a few simple changes:

• Daily exercise – even if it is 5 minutes of walking after getting ready and putting on my shoes – just start;
• No processed foods, grains, or sugar (with a very broad definition of sugar);
• No beer, at least for now. I may experiment with some drinks socially but I need momentum with healthy habits before messing around here;

Today was a good day. Upon waking up, I took our dog for a brisk morning walk wile my family slept soundly,  I worked in the morning through early afternoon, and then we went on a family bike ride (and discovered one of my bikes was stolen! – the subject of a future post), went for a walk to play in the park, and came home for a healthy meal.

It’s a start. Today was a success: no beer, no processed foods, multiple times exercising, and family play and connection. But it’s just the beginning – see you in the next post!