Author Topic: What are your priorities when it comes to attaining FI?  (Read 7305 times)

windawake

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What are your priorities when it comes to attaining FI?
« on: May 25, 2012, 04:11:52 PM »
I'm definitely into being frugal and achieving more freedom with saving and mustachianism.  I'm just wondering, are all of you striving for early retirement/financial independence ASAP?

For me, making what I will likely make after grad school ($40,000-$60,000 starting) I would probably have to work 10-15 years (so to age 35 or 40) to make enough to completely retire.  However, I'm in grad school for public health which I really enjoy and this summer will be training as a doula (birth companion, you can make $500-1,000 per client depending on experience).  My ideal world would be to work 20 hours a week at a public health job and take on 1-3 clients a month as a doula (so roughly $25,000-$40,000 income/year depending).  This would give me some structure but also a lot of freedom.  Doing this though, I wouldn't be able to reach FI nearly as quickly, but I'd probably be a whole lot happier in the process.

What are your plans in this arena?
« Last Edit: May 27, 2012, 11:37:08 PM by windawake »

onehappypanda

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Re: Is FI as soon as possible really your goal?
« Reply #1 on: May 25, 2012, 04:33:09 PM »
I want the option of financial independence before I'm 45, but I don't know that I'm actually planning on exercising it. I'm in grad school, not because it'll lead to a huge paycheck but because I'm pursuing a career that I love. I chose this path over another one that would have probably been more lucrative with less educational investment (mostly time, since my grad school is paid for). In that sense I'm taking a different path from those here who want to work hard for 10-15 years and then retire. But I like what I do so much that I don't know if I'll even want to retire early, given the chance.

My ideal is to get my PhD, get a job I really like, and use all my grad-student frugality skillz to sock away a lot of my future income. That way if I get burnt out 10-15 years after starting, I'll still have the option of retiring if I want to. The PhD should ultimately only delay my plans by 5 or so years. I may continue working at that point, but only because I *want* to, not because I need to. And if I don't want to, I'll have the option of quitting.

gooki

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Re: Is FI as soon as possible really your goal?
« Reply #2 on: May 25, 2012, 05:07:59 PM »
Not ASAP for me. I'm prepared to delay FI for a few things - a nicer home, spending more time with my kids before they grow up.

James

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Re: Is FI as soon as possible really your goal?
« Reply #3 on: May 25, 2012, 05:43:26 PM »
FI is a continuum for me.  I plan on working at some level for the next 15 years or so at least.  I hope to reach a level of FI at some point around half way that would allow me to eek out a frugal existence if I were unable to or chose not to work in my profession any more.  But I plan to continue to work in my profession (for various reasons) possibly for another 20+ years.  How much I work moves FI around, and FI moves how much I work around.  A lot will simply depend on how things go over the years.

arebelspy

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Re: Is FI as soon as possible really your goal?
« Reply #4 on: May 25, 2012, 09:38:39 PM »
As with everyone, there are limits on my time to FI.

Here's mine:
1) I don't want a degradation of my life now.  I'm happy, I don't want to be unhappy to achieve it.  It would take me a lot to be unhappy, however.

2) Kids.  We're going to have kids, and that will push back FI.  If I wanted FI ASAP, we would push back kids to after FI (or not at all).
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skyrefuge

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Re: Is FI as soon as possible really your goal?
« Reply #5 on: May 26, 2012, 07:51:37 AM »
My initial response to the question was "Yes, FI ASAP".  But I realized that's really not true, and likely isn't true for anyone.  If it was, I would be renting out a room in my house, living without a smartphone, living without beer, not going to concerts, etc.  There's almost always "more" someone can do to bring FI closer, and that doesn't even mention the income side.  So I guess a more accurate way of saying it would be "Yes, FI ASAP, while maintaining my current lifestyle". 

Anyway, it sounds like the answer is closer to "ASAP" for me than it is for the lot of you FI poseurs who have posted so far, so I figured I'd pipe up.  :-)

It also probably helps that I'm 14 years into what will likely be a 19-20 year utterly conventional career, and didn't even know what "FI" was until I was 5 years into it.  So, relatively close to the finish line.  If I had learned about FI before even starting my career, it's likely that I would be thinking about things a lot more flexibly, both because I would know about other options, and because the longer timescale would greatly increase the chances of me facing unpredictable changes or intentionally altering course.

catalana

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Re: Is FI as soon as possible really your goal?
« Reply #6 on: May 26, 2012, 03:41:25 PM »
Yep, I'm another one who perhaps values flexibility and comfortable lifestyle over FI ASAP at all costs.

A lot will be determined in the next couple of years - mostly by whether we have children or not.  My savings will allow for time off when they are little, and I would take that in preference to early retirement.

Mirwen

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Re: Is FI as soon as possible really your goal?
« Reply #7 on: May 26, 2012, 05:44:30 PM »
FI is not really my goal.  I started out reading ERE because I needed help learning how to live on our low income.  I'm currently a SAHM and it's been difficult learning to live on less than half of what we had before (when I was working).  I found it helpful to see people who were just a little more extreme than I am to learn where my limits are, as well as people like MMM who are living a very similar lifestyle.  I don't know right now if I will return to work full time because life is sweet and we no longer need the money.  Even with a family income of less than $40k, we are socking away about 20% and headed toward an early retirement in our 50s.  To me it's more about living consciously,  reducing waste, and developing life skills than it is about retirement.  Having some FU money is important, though.  I can't tell you how many of our friends and colleagues have zero savings and have no idea how to cook a meal or do stuff around the house.  Those skills are worth thousands of dollars, and they are fun too!

astadt

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Re: Is FI as soon as possible really your goal?
« Reply #8 on: May 26, 2012, 07:55:10 PM »
For me, Im shooting for FI in 15 years. At that point I'll most likely have a full military pension, which for anyone who doesnt know, its years times 2.5% times your average basic salary for the past three years. We are planning a big family and I'd love to live on that and have my stache be available for college and travel for me and the family.

Devils Advocate

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Re: Is FI as soon as possible really your goal?
« Reply #9 on: May 26, 2012, 08:40:35 PM »
FI as soon as possible with my current lifestyle.  I have a decent shovel (nice income) and have "enough".  Now my goals are to max out both my wife's and my 401k, max our a backdoor Roth IRA, and am 3 1/2 years away from paying off mortgages (4.5 years out of a 15 yr mortgage).  Once the mortgage is paid off we should invest a nice amount into our taxable investments and in 10 yrs should be able to retire comfortably if we want. 

I have found that being able to delay gratification is essential in this whole process.

DA

darkelenchus

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Re: Is FI as soon as possible really your goal?
« Reply #10 on: May 26, 2012, 10:59:35 PM »
I would be renting out a room in my house, living without a smartphone, living without beer, not going to concerts, etc.

Holy shit! You just described me! :-)

As for the original question, the goal is most certainly FI ASAP. We're expecting a child soon, which will add some expenses. Of course, the time it takes to reach FI is contingent upon rate of savings. Even though our expenses will go up, we're looking to have a higher rate of savings by increasing household income.

arebelspy

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Re: Is FI as soon as possible really your goal?
« Reply #11 on: May 26, 2012, 11:22:34 PM »
the goal is most certainly FI ASAP. We're expecting a child soon

These two are contradictory.

See item two in my reply to this thread, about 8 posts up.

I think it's nearly impossible for one to have an FI ASAP goal.  One would have to be very driven.

But I certainly understand what you mean.  FI as soon as is reasonable, given a child.
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darkelenchus

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Re: Is FI as soon as possible really your goal?
« Reply #12 on: May 27, 2012, 09:29:17 AM »
the goal is most certainly FI ASAP. We're expecting a child soon

These two are contradictory.

...

I think it's nearly impossible for one to have an FI ASAP goal.  One would have to be very driven.


tl;dr response: It's basically impossible to attain the goal of FI ASAP, but the desire for it is extremely useful. :-)

Long, boring but exciting philosophy-centric response: Well, I was thinking a goal like FI ASAP is dependent on desire, and I certainly desire FI ASAP. It's virtually impossible - literally it's not within my or, really, anyone's power - to attain FI ASAP. As skyrefuge said, "there's almost always 'more' someone can do to bring FI closer." The only scenario where this wouldn't be true is where one has somehow achieved a 100% savings rate. I guess strictly speaking, then, taking on or maintaining any expense would be contradictory to FI ASAP.

One can nevertheless desire and approach FI ASAP, and it's quite useful to do so. I like to think of it as similar to the limit in calculus or what Immanuel Kant called a regulative ideal.

Quote
An ideal is regulative when it is unachievable but nonetheless can balance, guide and mediate our actions in practical matters. A regulative ideal is an ideal to aim for, and by which to measure our progress.

An Ideal Approach to Global Warming

This contrasts with, say, a desire for the inherently contradictory, e.g. wanting to own something that is simultaneously both red all over its surface and green all over its surface. Like a regulative ideal, the thing desired is impossible to attain (though the reasons for it's impossibility are logical, rather than virtual), but unlike a regulative ideal, the desire itself is utterly useless.

arebelspy

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Re: Is FI as soon as possible really your goal?
« Reply #13 on: May 27, 2012, 12:05:04 PM »
It's basically impossible to attain the goal of FI ASAP, but the desire for it is extremely useful. :-)

Sure, it's useful, but it's (more or less) not possible.

I certainly desire FI ASAP.

Clearly not.  You desire kids, and a plethora of other things.. and then FI.  It's high up on your list (more than, say, the desire to eat out for dinner every night), but it's not "as soon as possible," or it'd be #1 on your list, at the sacrifice of all else.

You think you desire FI ASAP, you may tell yourself that you do, but when the rubber meets the road - your actions - you don't desire FI ASAP.  Just "as soon as possible... after all this other stuff."

It's virtually impossible - literally it's not within my or, really, anyone's power - to attain FI ASAP.

Now this I agree with, and is essentially the point I was trying to make.  FI ASAP isn't really anyone's goal.

Perhaps the thread title/question should be reworded then to be something like "assuming FI is high on your list, what desires are before that" or something to that effect. That is, a question trying to get to the point about what "items" do you think are worth pushing back FI for.  Cause everyone in this thread has listed something.
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shedinator

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Re: Is FI as soon as possible really your goal?
« Reply #14 on: May 27, 2012, 01:30:57 PM »
definitely not going for FI ASAP. If I was, I wouldn't be spending my time on the mustache forums. Our FI pace is probably about half what it could be. But I want to enjoy the journey to FI.

darkelenchus

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Re: Is FI as soon as possible really your goal?
« Reply #15 on: May 27, 2012, 05:39:09 PM »
I certainly desire FI ASAP.

Clearly not.  You desire kids, and a plethora of other things.. and then FI.  It's high up on your list (more than, say, the desire to eat out for dinner every night), but it's not "as soon as possible," or it'd be #1 on your list, at the sacrifice of all else.

You think you desire FI ASAP, you may tell yourself that you do, but when the rubber meets the road - your actions - you don't desire FI ASAP.  Just "as soon as possible... after all this other stuff."

Okay, I think I was talking past you a bit, then. I was considering FI ASAP under it's formal aspect:  as reducing expenses to zero, and thus achieving 100% savings.  Logically, this is the fastest route to FI; it'd be instantaneous, in fact. But FI ASAP is virtually impossible due to constraints of nature. That doesn't mean it's meaningless or irrelevant to everyday life; it just functions as a regulative ideal, something that structures one's actions and that one can approach by reducing expenses and/or raising income even if one can never attain it (Similarly, the TOE functions as a regulative ideal in Physics).

When the concept is considered under it's material aspect, i.e. under the condition of the constraints of nature, I agree it's precisely as you state: practically no one would actually do what it takes to attain it, since it will almost certainly require adopting a quality of life (think 1250-1000 calorie diet) and/or moral compromises ("as soon as possible" implies "by any means necessary" when taken as the only priority that matters) that probably everyone would be uncomfortable taking.1

Even though I wasn't talking about desiring FI ASAP under it's material aspect, I'm not so sure that someone can't desire FI ASAP when taken this way, however. It's certainly possible to have a desire for something, have that desire be stronger than desire for other things, and still pursue the other things.

At any rate, reformulating the topic as "a question trying to get to the point about what 'items' you think are worth pushing back FI for'" is an excellent suggestion, since considering FI ASAP under its material aspect is something of a cul de sac... and continuing to discuss FI ASAP as a regulative ideal  will probably only have an audience of one. ;-)



1. It gets a bit murkier if one takes emotional stability, moral behavior, a certain quality of physical health, et alia, as constituting some aspect of the constraints of nature, or, alternatively, as conflicting with our attempts to live in accord with other regulative ideals. This is my own approach. I must balance my pursuit of FI ASAP with my pursuit of other regulative ideals. As a simple example, I'm constrained in my pursuit of FI ASAP by my pursuit of moral perfection when I refrain from stealing other people's property even though it could accelerate my attaining FI sooner. Similarly, I'm constrained in my pursuit of moral perfection by my pursuit of FI ASAP when I invest in an index fund that contains companies that engage in morally objectionable and/or questionable practices.

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Re: Is FI as soon as possible really your goal?
« Reply #16 on: May 27, 2012, 09:14:56 PM »
dark

That was deeeep.  Interesting, but deep thoughts.

windawake

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Re: Is FI as soon as possible really your goal?
« Reply #17 on: May 27, 2012, 11:35:23 PM »
Alright, so what I meant was really: what are your priorities when planning for FI?  In my head "FI ASAP" would entail working a full time job and sacking away as much money as possible during that time while still maintaining a MMM quality of life.  My thought for myself is that I DON'T really want to work full time for more than a few years, and that will set back FI by a considerable degree.  However, I really enjoy work and some sort of structure, so FI itself for me may still include a part-time job.

I'm really curious about how other people are aiming to use mustachian principles to allow them flexibility besides reaching FI: like having one spouse stop working when kids come, or taking a couple years off to travel, or only working part-time but for a longer period.  And then discussing how you justify that and what your plans are.  That sort of thing.

gooki

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Re: What are your priorities when it comes to attaining FI?
« Reply #18 on: May 28, 2012, 02:54:49 AM »
Okay, so my plan is to work full time and save 50% of my wage, while my wife is at home helping our kid(s) grow.

In 3 years time both kids will qualify for 20 hours free childcare per week. At which point my wife may choose to work part time, to accelerate our stash growth.

Once both children are in school. I'd like to be in the position exercise my fuck you money, and start a modest self employed career, that consumes 3 days a week, and allows for extended holidays, while earning 50%+ of my employed salary. I would continue being self employed as long as I enjoyed the work. I expect my wife would be working part or full time.

As far as lifestyle goes I expect to maintain a mustachian middle class lifestyle (which is why this blog appeals).

darkelenchus

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Re: Is FI as soon as possible really your goal?
« Reply #19 on: May 28, 2012, 09:34:38 AM »
dark

That was deeeep.  Interesting, but deep thoughts.

I'm not sure whether that's a compliment or complaint. :-)

What are your priorities when planning for FI?  In my head "FI ASAP" would entail working a full time job and sacking away as much money as possible during that time while still maintaining a MMM quality of life. 

While I attended graduate school, my wife worked full time and we saved approx 50% of our combined income. The original plan was for me to transition to a full-time position after finishing the grad program. With no outstanding debt and a sizeable savings, we'd be in a position to buy a house and have kid(s) while still maintaining a good savings rate. My wife would take care of the kid(s) full-time and run her own part-time wedding photography business. 

We changed course when I surveyed the job market for my field and saw that: a) the possibility of me landing a full-time position was incredibly low, especially with the area of specialization I work in, b) if I ended up landing a full-time job, it would very probably be in an area of the country that we didn't want to live in (due to possible reduction in quality of life, less opportunity for my wife to make money from her side business), c) my wife's earning potential was greater than mine and she likes her job.

All of this occurred prior to us consciously planning for FI, but the 50% savings rate and my wife's full time position gave us quite a bit of flexibility. First, we didn't have to wait to buy a house and have kid(s) if we didn't want to. Second, I would be able to pursue business ideas that had been brewing while I was in grad school but couldn't really act on at the time. Even if they flopped, we'd still be in the black and relentlessly saving.

Then we started planning for FI. Purchasing a home fit right in with our FI goals. We were able to reduce our monthly housing costs and start building equity. We also figured out a way to hyper-accelerate repayment of the mortgage. Paying off the mortgage probably wasn't optimal for FI (we very likely could have seen greater returns from investment than the savings from paying off the mortgage early), but we figured it'd help reduce risk while I worked to get my business ideas off the ground, since a stable income from me is even less of a requirement now than it was when we owed the mortgage.

To accelerate reaching FI, we also reduced expenses, my wife has received promotions, and we rented out rooms in our house. Our savings rate, sans a steady income from me, is approx 70%. This puts us in a good position to start having kid(s) without compromising FI too much. It has most certainly given us great flexibility w/ respect to raising kid(s). We don't have to send them to day care and we can home school (currently leaning towards this).

We've also considered moving back to our hometown in a few years, which might postpone our reaching FI a bit. But we've been loners since moving away and want to be with family and friends. And it's unlikely they'll be convinced by my exhortation that they should all move closer to us! :-)

As far as justifications go: Starting my own business can potentially be in line with reaching FI faster. If it ends up being a net drag on FI, at least I'll have learned something, gained experience that I otherwise wouldn't, and hopefully had some fun. Having kid(s) is time-sensitive and we don't want to miss that train. Relationship building and skill collecting is what really allows my wife and I to grow as complete people (as opposed to, say, experience and "stuff" collecting). We can build skills just about anywhere, but it's hard to do this, work toward FI, and build all new relationships from scratch in an unfamiliar environment.

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Re: What are your priorities when it comes to attaining FI?
« Reply #20 on: May 30, 2012, 09:43:01 AM »
We have one parent (wife) home with kids (or kid, one is full time in school, other goes every other day), and then she works evenings part time as a nurse.  I have a light workload, 35 hours a week, biking distance from home.   It's a good setup for our family, so we'll carry this on as long as we can get away with it.  Longer term (6 months to 2 years), wife will likely go full time days, and I will run my own small part time business from home, so I can drop off and pick up kids. 

Our major focus is paying off the mortgage, about 5 years left (we're 36 now, late to the mustachian game).  After that, we only need $40k a year to live well (see post in other thread showing my budget), which either wife or I could cover with working just one part time income, in our fields.  Income needs will be more like $32k-$34k after kids leave.

I think of FI as more of a stages thing, as in there are different degrees of FI.  Clearing the mortgage is a major one, of course.  I'm not as concerned about full FI (passive income covering expenses), as this would mean staying at our jobs as they are till 50 to achieve.  That's not acceptable to us, so we'd rather trade that for just being free to work casually doing things we want, as much as we want, till an older age. 

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Re: What are your priorities when it comes to attaining FI?
« Reply #21 on: May 30, 2012, 11:54:49 AM »
Like others I am not willing to give up everything in life (decent house/community, travel, healthcare, my kids activities) to achieve or actually be FI but I want it to be sooner rather than later.

There are three levels of FI for me (1) is having enough that the basic needs of my family (food, shelter, insurance) are met and will be forever, (2) FU level of money that allows me to do what I want but will still need to work on some level, (3) complete FI whereas I can live life the way I want no matter what (for some this will be rice & beans living in a shack, for others it will be global travel and country clubs).   I do believe that once (1) and (2) are achieved then (3) is real easy to get.

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Re: What are your priorities when it comes to attaining FI?
« Reply #22 on: May 30, 2012, 03:14:34 PM »
No, not ASAP.
I have kids and I want to save some money for their college education. I also want to have a nice sizable stash so we can live aboard in different countries for a few months each year. I am from a foreign culture and I'd like my kids to experience some "non-American" way of living and the best way to do it is to actually go and live in that country for a while. My husband did the same and he loved his time in Europe.

We love our jobs, it's not stressful and it's quite fun right now. Great benefits. Although I do hope for some more flexibility and more time off, but as of now, I am going to focus on raising kids while working and paying off all of the mortgages on our properties. In about 8-10 years, we should be able to walk away and do some other stuff..