Financial independence always seemed like a long journey, but when you continuously cut budget and stash away the rest, things will start to snowball. We had been big savers for years but in 2010, we set a firm goal. By 2020 we would become financially independent and retire early. In the beginning of our marriage, we each had engineering jobs paying decent salaries. But in 6 years of working, we had only saved $200k. Giving ourselves 10 years to save $1-2 million more was an aggressive goal. However, we like a challenge and were counting on that compounding interest to kick in at some point and help speed us up.
Live well, while spending less
The game of financial independence is much like sailing. Trimming your sails for optimal speed does not take much effort, but it makes a big difference in the time it takes you to arrive at your destination. By having a goal, it was amazing how many more ways we started to see that our sails were not being put to their best use. We continue to optimize on things like being more tax efficient, reducing vehicle expenses, traveling for less money, reducing home renovation costs, using less utilities, and eating healthier for cheaper.
The best part is, as we trimmed our sails, we didn’t feel deprived. In fact, we have been living richer and more carefree lives than ever while cruising faster through our journey to financial independence.
Slash expenses, retire early
By continuously optimizing our expenses, we were helping ourselves further along in two ways. We had good salaries but in the financial independence game, it’s not about what you make, it’s what you keep. We’d been living on one of our salaries or less. But by optimizing our spending, we ended up putting away 70% of our income. Our yearly budget shrank from ~$80,000 to ~$40,000 a year, significantly reducing the financial baggage we need to carry in our retirement. This also meant that assuming 4% as a estimate of our investment returns, we could become financially independent with $1 million rather than $2 million.
As we progressed through our journey, I started to feel the dependence on our jobs fading away. Then one day Mr. Crazy Kicks was born – I stopped stressing as much at work and changed positions so I could work only on projects that I found exciting and enjoyable. I no longer cared about trying to climb any ladders and decided I was only going to wear sneakers and jeans to work. Not just black sneakers you can find in geriatric magazines that look like crappy dress shoes, but whatever Crazy Kicks I wanted. I was able to arrange to work from home one day a week. I even started to enjoy my job more because I was doing what I wanted and not stressing the bullshit. When your way of life is not dependent on a job, your entire outlook changes.
Financial independence means freedom
My wife, however, was working a job that was becoming invasive. It was a high visibility and high stress position, but it also paid very well. She loves school and it was always her dream retirement job to teach at a community college. Then one day, she found a position at a local community college. The salary was about 1/3 of what she was making at that time, but it would still be plenty to cover our yearly budget. It also came with good benefits. It may seem crazy to take a six figure pay cut, but neither of us thought twice about it. The change in our lives was remarkable.
All of the aggravations and blackberry interruptions to our dinners and vacations disappeared. Mrs. Crazy Kicks was a changed person. We both loved what we were doing and still were able to keep stashing away my whole salary. I started contemplating my own early retirement.
Deciding to retire early
While I didn’t despise my job, having to give it 40 hours of my time every week was still getting old. The future is pretty clear when you are doing the same thing over and over and I needed a change. We decided that I would leave my job as soon as we saved enough to be financially independent. Meaning, we could live indefinitely even with both of us not having jobs at all. Well, after years of saving, we hit that mark. Time flies when you are having fun and it came much faster than we could have imagined. So in May 2016, 4 years ahead of schedule, I cut loose the golden anchor and quit my job.
On our journey to financial independence, we have learned a lot and have emerged happier and healthier than we have ever been. I don’t know what my future holds or what I’ll be doing, but I plan to enjoy every minute of making my own path from here on out.