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An Elegant Solution

 

The Elegant Solution to Life: Happiness is not Spending is not IncomeAs 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.

My Blog

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:

  1. Cutting Expenses
  2. Increasing Income
  3. Growing & Cultivating Assets
  4. 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.