A few years ago, if you asked me what I would do with a million dollars, I would generally respond with “buy a house, a nice car, and probably some nice tech gadgets”. The purchase of a house, a nice car, and some tech gadgets would drastically reduce the million dollars to a small amount and I would have very little left over.
However, after the discovery of Financial Independence (FI), my answer has changed and I would put all of it into the stock market.
What exactly changed in my thinking? Why and how was I influenced?
Well, this is the story.
The Spendy College Me
During the first few years of college, I spent a lot of money on food and gadgets and didn’t put much thought into saving. The main majority of my income was from my parents and through the excess financial aid provided from federal grants and scholarships.
The most I would typically spend a month would normally be upwards to $2,000 and about a quarter of it was spent on rent. A quarter of it was spent on food, and the rest of the half was spent on purchasing cool and fun gadgets that would “impress” people or “make my life easier”.
It kept going for my first three years of college until I stumbled upon Mr. Money Mustache’s famous article of The Shockingly Simple Math Behind Early Retirement. When I read it, I didn’t quite understand how it would have been possible to retire after just a few years of working. Heck, how could someone live with so little money?
I thought that everyone would typically want more money to upgrade their lifestyle and have nice things, just like I did with my tech gadgets.
However, as I read upon more and more articles on how this could potentially work through mathematical calculations of how compound interest works, index funds, and minimalism, I eventually figured out that it is possible.
There are many people out there that are less fortunate than I am and they can live off of less than I do.
I started to become interested in reducing my lifestyle and saving as much as I can because I figured out that I don’t need to impress other people. I don’t need to have the latest and trendiest things in life. I just needed something functional, useful, and durable.
Luckily, by this time, I was about to graduate and had a good foundation of what I should do once I got my first job in terms of my finances.
I had actually compiled most of this information into a small guide that I posted a while back, which I call the Simple What to Do With Your Money Guide.
The New Working and Saving Me
After I graduated from college and started my first job, I started to save as much as I could.
I put most of my paycheck into my 401k to try and reach the $18,000 limit. I lived at home to save money on rent. I skipped breakfast and packed lunches instead of eating out. I went to the gym after work.
I was in a pretty great place, I would say.
But things like this don’t last…
I wasn’t quite satisfied with how much I was making and decided to pursue another opportunity that would give me a 20% raise.
In the new position, I had to forgo some thing and move out.
I purchased a new car. I had to find a place to live instead of living at home. I ate out more frequently.
Despite all this, I was still able to save a decent amount. Check out my Net Worth Reports if you don’t believe me.
But I could have saved more…
And I’m still working on that. My last few Net Worth Reports shows that I’m trying to spend less and less. Heck, my goal for this year is to keep my spending below $20,000! And I will most likely by successful in doing it!
Anyways, currently I’m in a job (about 2x the salary of my first job!) that allows me to travel for free and put a bunch of my paycheck towards my tax-advantaged accounts. I even get nice fat per-diem checks that are supposed to compensate for what I spend on food and entertainment when I travel, but I decide to pocket those instead.
What’s even cooler is that our company has the option to do the mysterious and mythical Mega Backdoor ROTH.
The only downside I have with this job is that I tend to work a lot more than the normal 8 hour days or 40 hour weeks people usually do.
I typically find myself working at least 60 to 80 hours a week.
I’m not sure if it’s because I’m trying my hardest to chase money or if I just have no idea on what to do with my time, so I decide to work more, but I can definitely say that I’m striving to aim for FI as fast as I can… and maybe someday, I might just burn out before reaching the goal or I’ll be successful and reach FI before that happens.
Perhaps I just like the freedom to have the option of doing whatever I want once I reached FI… or maybe I just strive to work in an environment that consumes most of my time, so I don’t have to think about other things while all of my finances are automated and on auto-pilot.
Maybe I should slow down a bit and enjoy what I have.
Because after all, just like Phillip C. McGraw says, “Life is not a sprint, it’s a marathon”.
How Did You Discover FI?
So to you guys out there on the path to FI, why are you pursuing FI and how did you find out about it? For those who haven’t, what are your thoughts about FI?