Happy New Year! I’m writing this on January 27th, well into 2019, and have given my New Year Goals and intentions a lot of thought. Last year was a good one, full of trips, adventures, work ups and downs….reflection has happened though, so onto what I want for this year.
Much of what I want to cultivate this year has been inspired by my Money Minded Maven FI group. Huh? Let’s start by chatting about this whole FIRE movement I’ve recently got involved in….
What is FIRE? Financial Independence Retire Early. It sounds like a crazy concept, right? We’ve been taught that you go to college, get a job, maybe move up the corporate ladder in your committed field, upgrade your house, car, gadgets with each wrung of the ladder climbed, and retire when you’re 65. Maybe a bit younger if you aggressively save, contribute to your 401K, have a pension. This concept is outrageous when you stop and do the math. And I have always had a cash-register mind (as in the dollars and cents of living rattle around up there).
There are a sub-set of people out there who don’t buy into this model. And I have been one of them, without really knowing it. Instead of spending all you take home, why not save most of it, find inexpensive things to do with friends, be mindful of where your money goes (ie. spending it on experiences instead of designer clothes, new cars, more stuff), invest in tax deferred accounts, house hack (or whore out your house as Mike likes to say) and cook most meals in to keep eating costs down. Why do all of this? So you can retire from any traditional type of work and focus on work you love, your passions, travel, whatever you want.
There are a number of people in this movement who have crunched the numbers so hard they’re already there. And by there, I mean financially independent, not having to work the corporate gigs, unless they want, and putting their energy into what they love, living life on their terms, out of debt. And these people have become our teachers. Here are a few people & resources I’ve been soaking up knowledge from: Mad Fientist, Optimal Living Daily , Paula Pant, The Minimalists, Mr. Money Mustache, Radical Personal Finance & Gretchen Rubin to name just a few.
So how did I come to identify myself with the FIRE crew? Beyond my always being unbelievably frugal, I have some extremely intelligent girlfriends who are like-minded in the sense that we want to empower ourselves and each other to learn more about investing, maxing out our financial gains, diversification, and tips on how to live a more fulfilling life with less. So we started a financial group that dives in to a different topic, podcast episode, book each month, focusing on financial goals and habits you can institute into your own life. We meet virtually to share what’s worked, what we’ve learned, our thoughts on savings, and hare resources. It’s phenomenal and so motivating!
With that context, I’ve thought about my goals for 2019 in these areas: Financial, Personal Goals & Habits
- Get a handle on the money coming in & going out – essentially, how much does it really cost to live on a monthly/yearly basis? This took awhile to figure out, gathering tax information, digging into credit card bills, travel expenses, Airbnb income, mortgages, etc. If you’re trying to do the same, I’d recommend setting up a Personal Capital dashboard that lets you see where you’re spending, how your investments are pulling into your net worth and you can even link your homes’ value (which is awesome for Happy Homes!)
- Maximize my 401K, tax deferred investments, and savings – I’m all over this as well! I set up time to speak with a personal adviser at Vanguard to understand my investments, map out my retirement goals and work on a strategy to get me there. Having gone through the first exercise of what I actually need to pay my bills/live my life, I was able to see how much more I could be saving. This was by far the most intimidating, as investments have always scared me. Why? Because I didn’t understand them and didn’t take the time to find out. Until now! I have so much to learn here, but taking the first step was huge to get me on my way. And the Money Minded Maven group has fueled me! This stock series is on my list to dive into.
- Research things I don’t understand. It’s only confusing because it’s not familiar. With the resources available, there’s no excuse to not be up to speed on what’s happening with my finances.
- Get the grocery bills, alcohol, eating out bills under control. This isn’t as glamours, but having done an analysis of what I was spending at the grocery store, on alcohol and eating out, it really opened my eyes. I’m going to make an effort to meal-plan every week, cut back on the booze during the week, and eat out less.
- Sell Chase St. The past few months have been a journey in making the best out of a sticky situation (ie. pulling the listing, renting the house short-term to cover the costs & dealing with almost weekly renters). The goal is to sell it this spring – and if it doesn’t sell, we’ll get a long-term renter to ease the burden of flipping, cleaning, worrying if your sh*t head renters are going to trash the place.
Personal Goals & Habits
- Stop procrastinating. Be more consistent. This seems to be a common theme for me, often proclaimed at the beginning of the year. But, I’m a tactical person, often driven by outside forces and deadlines, so I’m trying to institute ways to stick to things.
- Re-instate the Happy Kitchen Dinner Series. This took flight last year, slowly sputtering out due to lack of commitment from good old’ me. I love cooking. I love spending time with my friends. I am constantly planning menus in my head. So why haven’t I done anything more with this!? See the first personal goal….
- Cut back on the alcohol. This could fit under all of the categories, as it will have an impact in each category. I like my craft beer and that comes with a price tag, so cutting back will help the wallet. Personally, I feel the best when I wake up without having had any booze the night before. And the kind of person I want to be happens when I’m alert and focused, not foggy and lazy. Don’t get me wrong. I enjoy my good beer & wine and will continue to do so when it means I’m socializing with friends or celebrating a special occasion. I’m just taking a mindful look at when I drink and prioritizing the goals around it.
- Spend more time on activities that move me forward, towards my goals. The Money Minded Maven’s are focusing on habits this month, so I’ve thought a lot about what I’m committing energy to because those are the things that become a priority. What’s helped me here is outlining my priorities, then making sure my habits and actions line up accordingly. It’s one thing to say you’d like to do yoga everyday…..it’s another if you turn the tv on a night, having not done any.
- Watch less tv. The average American spends 4 hours a day watching tv. Insane! I have a bad habit of turning the tv on at night when I’m cooking, to decompress after an over-stimulated work day. But then it will remain on through dinner, post dinner and right up until we go to bed. No bueno, especially with the list of things I could be doing that would benefit me in some way.
- Get up and move. I’m a morning person and feel amazing when I incorporate movement first thing in the morning, so vow to make a consistent effort to get up and get moving. Whether that means morning yoga, or a sunrise walk or slow jog, I’ve done this inconsistently over the years, and really do feel amazing if I keep it up.
- Network more. With friends, with like-minded people, with opportunities. I want to make a point to say yes to things that open my mind, that put me out of my comfort zone, that lend value. I have so many amazing people in my network and want to make the effort to connect with them more often.
These are my goals for 2019 – a bit different than past years, more financially focused I’d say, but also aimed at living a more meaningful and mindful life. Hope you’re having a wonderful start to the year and I’d love to hear any goals or habits that you’re working on!
5 thoughts on “2019 on FIRE”
I thought you might like a FIRE comment from an almost 70 year old who retired early after the 2001 terrorist attacks made me seriously question how I was living my life. In 2001, I was 51 years old and at least 15 years away from traditional retirement. My job, that I used to love, had become boring & political and I was growing to hate it. But by retiring early my pension would be reduced by 1/3rd. Between the both of us we made about 85k a year. Not rich by any measure but we were never extravagant and we had zero debt. I sat down to look at our budget and figured I could cut out a lot of unnecessary expenses and pay off our mortgage (12k) in 1 year if I really worked at it. In addition, I tried to estimate the amount of money I would need for a new roof (20k) & A/C & electrical heating system (6k) if I wanted to age in place. Luckily, my husband had just received a promotion and he was enjoying his job and was more than willing to keep working. We had no children to get through college so with my husband’s support, I started budgeting to his 1 salary and saved all of my salary to pay off the mortgage & save enough for the big repairs I knew we needed. I quit the following year and never looked back. It was the best decision I ever made and I had 10 extra years of healthy retirement. My thoughts about this process:
I thought I was good with money but obviously I wasn’t or how could I have saved 40k in 1 year? We all waste tons of money.
The terrorist attack made me face the fact that life (and good health) is uncertain, are you spending each day in a way that makes you happy? If not, make a new plan and change your life.
Deferred saving plans such as traditional IRAs and 407 retirement plans turned out to be a bad choice for us. I recommend a Roth IRA where your original purchase is after tax but dividends and interest can accumulate tax free. Between 2 social security checks and 2 pensions we ended up with practically the same gross income we made when we were working. Now, as we approach 70 1/2 and must start taking required minimum distributions (RMDs) this IRA money is added to our gross income pushing us into a higher tax bracket than we ever had to pay when we were working. Who knew??? Inflation & the federal deficit will make taxes higher in the future so pay your taxes as you go.
I hope the new tiny house idea catches on. Miami doesn’t allow zoning for them right now but they are a good idea for both starter & ending homes. At 70 years old I don’t want to clean a 3 bedroom house anymore but I have animals and a condo doesn’t work for us.
Hope this helps. I love the FIRE concept.
Loooove this information! I’m going to share it with my group. Such a good exercise for anyone – making sure what we spend our time/energy on is enriching our lives! And having a plan that makes sense (and cents) – being smart/pragmatic about your income/finances/lifestyle!
I like your comment on how things are only confusing if you don’t understand them. I’ve struggled with this in the past where I thought I could never learn something because it was too confusing. After reading a book or two or maybe some blog posts the fog settles and you realize it was simpler than you thought. It really makes you think about what else you could learn but you just haven’t read because you think it is too complicated
Right!? In this day and age we have so much info at our fingertips. Just need to take the initiative (which I was scared to do!) Getting better all the time…