As a math geek, I like a surprisingly simple proof or a number that cuts through complexity…an elegant solution to a problem. The golden ratio, shown here in the Mona Lisa, gives elegant solutions in art, architecture, and throughout nature.
But day to day, I didn’t have an elegant solution to life. I had too little time, not enough connection in relationships, and not enough satisfaction. Yadda yadda yadda…like everyone else right? Oh, and I’m working a job because that’s what everyone does.
I have felt tied to work and somewhat controlled by work – especially when the recession hit in 2008/9. I was relatively over-spending & over-leveraged for my income. Luckily, we avoided catastrophe at work, and things got comfortable again. But I couldn’t shake the nagging feeling that I wasn’t living that elegant solution to life, and was instead plodding through life as an average player in someone else’s game.
After a bunch of thought, I separated the pieces of my life’s jumble of spending, work, (un)happiness, income, and finances into a few axioms. An elegant solution, if you will.
The Elegant Solution
The elegant solution is:
- My happiness isn’t tied to my spending.
- My spending shouldn’t be tied to my income.
- My income doesn’t have to be tied to my job.
Income can also come from assets – passive investments. Once my investments produce enough income to support my lifestyle, then I don’t need that job anymore.
I didn’t figure it out myself. Two years ago, I stumbled on several of the popular early retirement blogs (MMM, ERE, BNL, etc). I was hooked – at least reading another take on things. For the next few months, I read as much as I could about financial independence and early retirement. Others had done it; it was possible. My wife & I decided to give it a try.
As I read the various books and blogs on the subject, I found the successful ones focused on reducing expenses. I agree with them that separating spending from happiness is the key to starting a path to financial independence (FI). This first step allows your spending and income to become unrelated – and with at least a little frugality leads to savings.
In my mind though, while spending is most important, all the bolded words above deserve attention in mapping out a way to financial independence. So I will try to describe my views, methods, and personal numbers on:
- Cutting Expenses
- Increasing Income
- Growing & Cultivating Assets
- Pursuing Happiness*
I know blogging about money is a crowded space. I hope to offer more than reprimands about cutting cable and lattes (even though you should). I’ll open up my life (anonymously) so you can see how I’m making decisions. I struggle to figure out which expenses are ok, and which are frivolous. We live a frugal life compared with many of our friends, but a lavishly extravagant life compared to some PF bloggers. So hopefully this will be a (figurative) full frontal showing an approachable view to restrained spending. And honestly, I could use other people’s ideas on what to do better.
Mainly though, I think I offer insights based on my success in increasing income and creating assets. Since June 2013, I have grown my net worth from under $700k to right at $2M. Almost tripled in less than 2 years. Based on our spending, we are nearing FI. We’re still saving to have cushion…I will get into all the details in future posts. Cutting expenses played a role. Just as important though was stopping lifestyle inflation and heavily increasing income.
So please join me in figuring things out…
*A clarification I would like to make that doesn’t show up in a lot of blogs is that I believe happiness is separate even from financial independence itself. I don’t think reaching FI will make an unhappy person happy. I think happiness comes from within & from living closely aligned with your values.