We don’t talk about it often but the reason I’m investing is because I want to be financially independent [1] (FI). I’m a quarter of the way through which is a difficult place to be.
It feels like I’m rowing solo across the Atlantic. The planning [2] is done, the course is set and all I gotta do is row.
Behind me are hundreds of miles of flat, grey ocean. There’s nothing on the horizon. In front of me, are thousands of miles of flat, grey ocean. There’s nothing on the horizon.
It’s hard to tell I’m moving at all.
An ancient mariner would pass the time by juggling mortal danger and hallucinations. A modern mariner has the same options as well as their GPS tracker and calls from home.
All four are needed to keep the rowboat on an even keel.
[3]
Hallucinations
I keep fantasising that I’ve made it. These episodes may or may not be voluntary but they are definitely an attempt by present me to establish a psychic bridge to future me [4].
My cycle into work on a Monday morning. Full of grief for the weekend life I’ve left behind. How would this ride feel if it were my last day before FI?
How would it feel if, instead of the daily commute, this was my daily exercise jaunt? If in an hour I’ll turn the bike around and head home for breakfast and smiles? To know that feeling is something I’m willing to take some pain for.
The wave of bliss that washes over you on the eve of holiday. A whole week of being me again. Remembering the joy and zest and curiosity that spring from having hours to yourself. Life for life’s sake.
The serendipity of play reclaiming your living space from the ‘to do’ list. Like nature recolonising an ugly city. How sweet is that place?
Whatever it is I’m going through now, it’s worth it because it brings me closer to there.
Calls from home
I need a self-help group. A crowd to cheer me on. Someone waving the flag for my team.
Going for FI is a lonely pursuit. There aren’t many of us out there. I only know two people in my real life who understand what I’m trying to do: Mrs Accumulator and The Investor.
Others can’t wrap their heads around it. Or wonder what I’ll do with the time. Or imagine it’s a huge risk because, well, what if I have a heart attack in a few years?
What if I don’t?
What if I live to age 84 as per the average life expectancy for males who are already 20 years older than me?
So my self-help group has widened to people I’ve never met but who speak wisely about FI:
- Living a FI [5]
- Early Retirement Extreme [6]
- SexHealthMoneyDeath [7]
- Mr Money Mustache [8]
Among others.
That’s not to mention the Monevator readers who chime in with their progress reports.
They all help me visualise how my FI life will feel. Their happiness (mostly) confirms that this journey really is about the destination. Their full lives dispel any worries about filling the time.
If anyone really believes the hours will be empty, just have a chat with the retirees in your life.
They’re so hectic, you’d think they were trying to win the American Presidency – hurtling around the place on a frenzied roadshow – packing in friends, holidays, grandchildren, hobbies, life.
Y’know, life.
GPS tracker
One of the things that makes FI socially tough is that there are no outward signs of success. If anything it looks like you’re going backwards.
Especially when much-loved possessions look like the love might be killing them.
If you makeover your house, your friends will coo over your freshly gilded splendour.
Voila! Instant validation.
But inviting the neighbours to take a look at your net worth spreadsheet is no way to impress the Jones’s.
So you need to create your own journey planner that joins the dots from first step to FU.
When a task is huge, scary and covered in razor-sharp spikes then chopping it into manageable taskettes [9] is the only way to go.
For me, that means micro-goals, mid-level goals and BHAGs (Big, Hairy, Audacious goals).
Micro-goals mean taking things a step at a time. Focusing all my energies (negative and positive) on the very next task rather than the vast gulf I’ve yet to cover.
This way the internal monologue switches from: “This is impossible” to “If I can just get to the end of today, it’ll be OK.” Or, “If I can just make it to the end of the week, it’ll be OK.”
It’s a cheap trick but it buys off the brain with the promise of imminent reward. The reward might be real, such as switching off from Python-esque work pressures (both crushing and surreal) because you really can’t have given it any more today. Or the reward might be pretend…
I do the same thing when exercising with kettle bells.
Let’s say I want to do 100 clean and push-presses but I know that’s going to be agony. I tell you what, brain, if I do 50 then we’ll call it quits. Honour served.
- Get to 50. OK, maybe another 25. I can do that.
- Get to 75. OK, no way I’m stopping now, I can make it to 100.
- Get to 100. OK, now I’m having a mini heart attack. I’ll stop now.
Every time. This is the opposite of procrastination. Instead of pacifying a panicking brain with distraction, you quell the rebellion by making yourself believe it will all be over soon.
Mid-level goals are my navigable markers. For me, it’s a four-monthly review of net worth and savings to date. Each checkpoint is far enough apart so that I’m rewarded with significant signs of progress, while being close enough together to keep me on track.
The BHAG is a scary goal that keeps things interesting. In my world that amounts to an annual savings rate of 70% measured at the end of March. I made it this year. Fell short last year. Made it the year before that.
Plug your savings rate and a few other key numbers into Networthify’s calculator [10] and you can see how far you are from FI.
Savings Rate [11] = (annual savings / (expenses + annual savings)) x 100.
With a 70% savings rate, 4% expected investment return [12] and 3% anticipated withdrawal rate, I’m done in eight years. With a 4% withdrawal rate I’m done in five and a half.
If I can push the savings rate up to 75% then I can be done in six years with a 3% withdrawal rate. (I consider a 3% withdrawal rate to be much safer than 4%.)
Saving 75% is a big stretch from here, but not impossible.
Mortal danger
I’m not theatrical enough to believe I face much peril in my life but my limbic system acts like there’s sharks everywhere.
Drama is a great way to speed up time, as I discover whenever I hurtle towards a big deadline like it’s the event horizon of a black hole.
But we should draw more comfort than we do from our daily woes. Because, regardless of the adversity we face, we almost always come out the other side.
It’s worth cataloguing all the challenges we didn’t think we could handle but did. We may have been floored for a while, we may have been knocked back, but we got up and kept going.
We’re tougher than we think. We can do it. And that’s the truth.
Take it steady,
The Accumulator