Category Archives: Financial Independence

2016 Year in Review & 2017 Goals

2016 is drawing to a close. It has been an extremely busy, yet great year. I moved to the Midwest to live with my girlfriend. I purchased a bicycle that I use all the time (until recently when the weather decided to snow everyday and not break 30 degrees). I traveled a little too much for work and weddings. And I kicked butt financially.

First let’s recap what my 2016 financial goals were when I set them last December:

  1. Max out pre-tax 401kPASS – I planned on doing this by September but actually got there in July.
  2. Max out Roth IRAPASS
  3. Max out my HSAPASS
  4. Pay off my student loansPASS – I’m debt free!
  5. Save 100% of my raise and bonusPASS – This has been going directly to my brokerage account.
  6. Contribute to my after-tax brokerage account as much as possible – PASS

As you can see I batted 1.000 financially in 2016. Moving out of Manhattan to the Midwest definitely helped me on the expense side, while busting my ass at work lead to a pretty decent increase in income. The US equity market has also been on a tear in 2016 which was icing on the cake.

The GF started cutting my hair as well and the $60 clippers I purchased paid for themselves in three haircuts. This will be a $300+ run-rate cost savings for me. Also if you want to test your relationship to see if it is cut out for the long haul, this is one way to test that REAL quick. Luckily we are still together.

Here were my 2016 non-financial goals:

  1. Get to the gym 4x per week and hit a 315# squat, 225# bench, and 405# deadliftFAIL – If I work a “normal” 40 hour week I definitely get to the gym four times in a week. But if we are traveling to visit family and friends, or going on vacation, or I’m traveling for work, this definitely doesn’t happen. Also I have been battling a little knee injury which I am just starting to get over, so my numbers aren’t near where I’d like them to be.
  2. Try and negotiate a remote work arrangement for at least six monthsPASS – I’m at seven months and going strong!
  3. Read more books in 2016Half-PASS – I have definitely read more in 2016 than any other year, but still nowhere near where I want to be. Need to prioritize this more.
  4. Travel – Half-PASS – We went on a cruise in February, but then the rest of my travel was mostly work or wedding related. While I definitely enjoy traveling to see friends and family, the weddings get in the way of the time we have to travel for pleasure. I have also realized too much personal travel is stressful for me, at least while working full-time. I think I need to tone down the travel ambition, at least while I’m working. Maybe this will change down the line once I pull the plug from working for a paycheck.

2017 financial goals:

My 2017 financial goals will remain the same as 2016, with the exception of paying off my student loans since they are gone, and include maxing out all tax advantaged accounts I have at my disposal and investing what is left into my after-tax brokerage account.

2017 non-financial goals:

  1. Get to the gym 4x per week and hit a 315# squat, 225# bench, and 405# deadlift – let’s try this again.
  2. Remain in my remote work arrangement – As long as I can keep up with my current stressful/demanding career, I know I want to do it remotely. I have no plans of moving back to metro NYC to trudging to the office everyday.
  3. Pass the Series 65 – I have been thinking about a second career a lot lately. I’ve been giving financial advice for years to family, friends, and coworkers for free and have enjoyed helping others tremendously. The Series 65 is an exam you need to pass before you can give investment advice for money.
  4. Read more – Self explanatory. I like non-fiction.
  5. Buy a mountain bike – I like my hybrid bike so much I’m going to get a mountain bike as well. There are some nice trails near me that I want shred.

Currently I’m looking forward to two weeks off of work coming up and our trip to Cancun (if anyone is going to be in Cancun the first week of January – let me know!). I hope you all had a great 2016 as well and were able to crush all your goals, financial and not. Thanks for reading in 2016 and happy holidays!

How was your 2016? What does 2017 have in store for you?

Living On One Income

Conventional wisdom says save 10% of your income and you are all set. We all know this is bogus. The only thing that will be set is your working career lasting 40 plus years. The two obvious ways to increase the amount of money you are saving is to increase your income and decrease your spending. There is an interesting life event many people go through where both of these scenarios can happen at once, and it is when a couple moves in together.

As I am in my late twenties and everyone around me is getting married or moving in with their spouse, so I have seen the common scenario. Spouse A pays $900 per month for rent and spouse B pays $900 per month, so when they move in together they get a nicer place in a better location for $1,800 per month. For most people housing is the budget category they spend the most on per month, and they miss an opportune time to decrease it. We all know what this is, it is lifestyle inflation. Couples see their income double when they move in together and start spending more right away.

I have another idea about what should happen when a couple moves in together. Try living on one income. You heard me. Pretend as if you only had one income and try to spend according to that one income. I know this can be a hard task, but hear me out as the benefits are tremendous.

Crush financial goals. In essence, living on one income is saving half of your income (if both spouses earn the same). The extra cash flow left over at the end of the month can pay down student loans, save up for a house down payment, speed up investment goals, etc. Saving half of your income means you can possibly retire in 17 years if you invest it. That is less than half the time of a conventional working career.

Remove money stress. If you’re living on one income and one person gets laid off, what happens? Your savings will go down but you will still be able to meet all of your financial obligations. You might not be paying off debt or investing in your brokerage account with the same vigor, but rent will be paid every month. You will be able to pay for groceries. No debt will be wracked up while the second spouse finds a new job. This also makes it much easier when making the decision if you want to start a family and have one spouse stay at home. Is one spouse really burnt out and needs to take a sabbatical? That’s okay since six months off won’t break the bank. Does one spouse have a passion that does not yield much of an income? It actually is now possible for one spouse to go down that path.

Take risk. If you are living on one income, you can go a period of time without the second income. Does one spouse have a great idea and the entrepreneurial itch? Instead of having to raise money from others to start your venture, maybe you can bootstrap it yourself since your spouse is able to pay all the bills. Starting that business no longer has extreme consequences if it does not work out. We know entrepreneurship is one great way to possibly earn an upper class income and it is much easier to take that risk to potentially earn that great reward if you can live on the other spouses income.

I know this isn’t possible for everyone, but I believe it is something to shoot for at a minimum. If you want to take it even one step further, try living off the income of the spouse who earns less. This will boost your savings rate above 50% and help you crush your financial goals in short order. Financial independence will now be a very achievable goal.

Could you and your spouse live on one income? If so, do you?

Upping the Emergency Fund

I have historically been against having a huge emergency fund for those who are employed and living below their means. Savings accounts earn about 1% interest nowadays and I would rather have that money invested and compounding.

Personally I have kept $10,000 in a savings account as my emergency fund. This would cover at least four months of expenses for me currently. I’ve always felt comfortable with that amount for multiple reasons. First, if I were to get laid off from my job I would get paid out severance most likely, along with accrued PTO, which would total over 12 weeks of gross pay. Second, I have no debt and don’t own a home, and therefore large unplanned cash outflows are not something I worry about. Third, I’m an accountant by trade and with my certifications and experience I would expect myself to find another job in short order (I’m an optimist) that would at a minimum cover my expenses.

Lately I’ve been feeling an itch to increase my emergency fund to $20,000 up from $10,000. Below are some reasons why I think I’ve felt that way.

Investment Opportunities – All of my net worth, with the exception of my emergency fund, is tied up in low cost index funds. At some point I’d like to diversify a little bit more. I currently have zero interest in being a landlord at this point, but maybe down the road that may change. I recently came across a real estate private investment opportunity. A friend’s in-laws had been investing through the real estate development firm for years and years and only had nice things to say. After looking at the numbers, reading the investment memorandum, and analyzing the related risk, I figured it would be something I would eventually want to look into further. Unfortunately at this point the investment carries a minimum investment of around $100,000 so I don’t think I’ll be partaking anytime soon. In the meantime I’d like to have some extra cash around for various investment opportunities, if they present themselves and I do my homework and decide they would be a good fit for my portfolio.

Starting a business – I’ve always thought I’d start a business at some point. Right now the golden handcuffs keep me concentrated on my day job, but I could see pulling the plug in the next 5 years or so and trying to make it on my own. Who knows what type of business I’d start. Maybe it would just be doing what I do now as a 1099 employee or maybe it would be something completely different. Having an extra cash buffer will help smooth the transition if I ever decide to go the self-employed route.

Home purchase – I don’t think a home purchase is in the cards anytime soon. I like the freedom of renting and with my current career it just wouldn’t make sense. But I do see a home base in my future. I’m constantly on Zillow when I have down time, so I could see myself potentially going after a great deal if it was a perfect fit for me.

Car purchase – I don’t own a car and things could change in my life that would require me to purchase one. I’d much rather have the cash on hand to do so, if I decide to purchase a vehicle. Cash gives you the upper hand when negotiating a car purchase. I’ve always wanted to try out Uber, and I can’t do that unless I have a car. But it obviously wouldn’t be a reason I would buy one.

Cash is king – Cash gives people a sense of security. I don’t think I’ll ever be kicking myself for having a little too much on hand.

Luckily with my cash flow it should only take me a few months to get my emergency fund up to $20,000. I wonder if I’ll feel satisfied when it’s at that level or I’ll want to push it to $25,000 or $30,000. Personal finance is as much about emotion as it is about numbers.

How much do you have in your emergency fund? What is your reason for having that amount (i.e. strictly numbers based, emotional reasons, etc.)?

Everyday I’m (Not) Hustlin’

It’s been a while since my last post. Summer has flown by as they all tend to do. I’ve settled into my Midwestern lifestyle quite well. The bike I purchased when I moved out here has been getting put to work at least five times per week. I’ve been trying to make it to the gym four times per week. I’ve been traveling all over the place for weddings, holidays, and family events. During travel I’ve been plowing through interesting podcasts. I’ve made a conscious effort to read a lot more. I just finished “How I Found Freedom in an Unfree World” by Harry Browne and I’m now onto the 700 plus page behemoth “Titan: The Life of John D. Rockefeller, Sr.” by Ron Chernow (I’ll report back on this one when I finish it in 2018).

My personal finances have pretty much been on auto pilot for some time now. Moving to the Midwest provided some excitement for a while as I didn’t know exactly where my expenses would fall out. But now that I’ve been here for a few months everything is kind of boring on the financial front again.

Researching personal finance, financial independence, investing, etc., has taken up a lot of my spare time in the past few years. Now I’m at a point where I am at a very comfortable spot with my financial plan. My systems are in place and everything is running like a well oiled machine. My 401k contribution is set to max early in the year, my HSA contribution is set to max, every two weeks I invest my surplus cash into Vanguard like clockwork, my debt is gone*, and I’m happy with my run-rate expenses (haven’t cut cable yet but that may be coming soon).

Even though everything looks great from 30,000 feet, I get a little stir crazy at times. I feel like I should be doing MORE. For the past couple years I have been optimizing everything related to my personal finances. Increasing income, trimming expenses, funding emergency fund, investing, paying down debt, etc., all of which took a lot of work, time, and planning. Now I read other personal finance blogs and everyone is talking about that side hustle life. Making extra money outside their normal day jobs to help them reach their financial goals faster. Honestly reading about all this hustling makes me feel a little guilty that I’m not doing more.

After months of figuring out what else I could be doing, I’ve finally come to terms with the fact that it is OKAY to not pursue a side hustle. By no means do I think it is a bad idea to have a side hustle, I actually think it’s a great idea. But for me right now, it just doesn’t make sense. My day job income has been increasing fairly rapidly as of late allowing me to reach my financial goals much faster than originally projected. Therefore the gap between my income and expenses continues to grow. I no longer have debt looming over my head. The more my day job income increases, the more significant the side hustle would have to be to make a dent in my financial goals. I’ve accepted that it’s okay to use my time outside of work to do things that don’t earn money and bring me joy instead.

Part of this FIRE journey is charting your own path without concern for what others are doing. I know I shouldn’t be comparing myself to others, but that doesn’t mean it’s an easy task. The journey itself needs to be enjoyable. I do not need to feel guilty when I’m going for a bike ride or watching Netflix with my girlfriend instead of starting a business on the side. Some may say it’s risky to have all of one’s income completely concentrated in one source. I would agree to a point, but the further your income moves away from your expenses, the less of a risk it actually is. At the end of the day hustlin’ for me would most likely have a slight positive impact on my financial picture, and a larger negative impact on my personal life. And for that reason – everyday I’m not hustlin’.

Do you ever feel guilty when you’re not leveraging your spare time to earn more income? How have you gone about dealing with it?

* – I paid off my last student loan a week ago. I am now DEBT FREE!

Mid-2016 Update

Man have I been busy, and not paying much attention to Fervent Finance. The month of May included packing up my old apartment, selling furniture, moving to the Midwest, traveling for work, traveling back to the Northeast for a wedding, finding a new gym, researching purchasing a bike, and many more things I’m probably forgetting. June, so far, has included traveling for work, buying a bike, and another wedding.

The move to the Midwest has been a great transition for me so far. I am enjoying being back in the burbs with lots of room to roam and with my significant other. I have a nice home office setup which has worked out great.

From my picture at the top of this post you can see I just bought a bike! I’m super excited about it. I have spent about $350 on the hybrid bike and accessories so far (accessories not mounted in the picture). There are bike paths and trails all around me that I’m pumped to explore. I’ve found I live in a pretty decent biking community. This is a pretty big expense for me, but it’s much cheaper than buying a car! I hadn’t biked since I was a kid and forgot how much fun it is. Definitely no regrets so far.

My finances have been way more boring than my actual life. My expenses have averaged $2,453 per month for the first five months of 2016. My goal for 2016 is to spend less than $30,000 (or $2,500 per month), so I’m on pace. I think I should definitely hit that goal since for a little over four months of this year I was living in Manhattan, and now I’m in the Midwest. My savings rate is hovering around 60%, but this should go up the remainder of the year due to the fact that my compensation is somewhat concentrated in the last four months of the year due annual raise and bonus time falling then.

I’ve recently ratcheted up my 401k deferral to 60% in an effort to max it out in July. It is a little tough to see my paychecks shrink, but will be nice to have my paychecks for the final five months of the year be without 401k deferrals. My brokerage account will definitely feel the love during that period.

The girlfriend and I have already devised a nice system for splitting expenses. It’s working great so far. Personally I believe since we discuss finances regularly, it puts us ahead of the game, and gives us one less thing to argue about.

I’m attempting to up my amateur travel hacking game and am currently in the process of booking a free trip to Cancun for the winter. Haven’t locked it down yet but I have the award nights and points in the bank to do it. I haven’t been to Cancun since spring break in college and think it will be a nice change of pace to go with my significant other, rather than during spring break with my college friends. Can anyone say cocktails, naps, and the beach?

The blog has definitely fallen to the wayside due to me spending more time with my significant other, getting into biking, continuing to work out, and traveling for work. But hey, priorities tend to change and I like to be outside during the summer months (at least when work lets me get away from my computer for a while).

How is the start to your summer going, personally and financially? Do you find yourself concentrating on different hobbies and projects as time goes on and seasons change?

Why I Haven’t Quit

Like many young professionals, I have a LinkedIn account. I am sure it is the same in other industries as well, but recruiters (or as I like to call them – head hunters) will reach out to me on a weekly basis at a minimum. Usually I blow these guys and gals off, but if the job actually sounds interesting I may ask for more information but the buck usually stops there. On top of the LinkedIn messages, some people who have left my company actually sell the company’s Outlook address book to recruiters, so you might even get phone calls as well!

What I have learned is if you are experienced and skilled in your trade or profession, there are plenty of opportunities to jump ship and go elsewhere (especially in a place like NYC), usually for more money. I have friends who are constantly in contact with recruiters trying to find the next best job. Maybe a little more pay, maybe a little better commute, maybe a little more pay, maybe a better boss, and finally MORE PAY! These people are unhappy in their current jobs usually because they are not fulfilled in their job and usually the feel they are not compensated at market value.

From these dealings with recruiters and other companies I know I could easily leave my job, and get a fairly substantial raise. I have considered it multiple times as I see the dollar signs scrolling across the front of my eyes. Of course more money equals higher savings rate and faster path to FI/RE! Luckily I let calmer heads prevail and usually do not go further than to ask for more information about these positions. At the end of the day I don’t hate my job. Do I love it and would do it for free? Hell no, but the reasons I don’t leave my current job have nothing to do with money.

The People – I’m currently in my third job of my career (but only second company) and I have met friends at each which I still keep close contact with to this day. Of course there is always that person in the office that you hope doesn’t stop you in the hallway to chit-chat, but for the most part I’ve made friends at work. Overall they have been great people who I share interests with and are just genuinely nice to be around.

Currently I have actually found myself in a lucky situation. I seem to get along with my coworkers AND my superiors. For the most part it seems like the two bosses I work for a majority of the time actually care (somewhat at least, better than don’t care at all) about my personal well being. They have been considerate with work load, allowing me to “sign-off” during PTO, invited me to their home, etc. Now I know others in my group at work aren’t as lucky and I’m therefore thankful. It took luck, but it also took me identifying who I really liked and pushing hard to work for them. At the end of the day, you do have more control over your work situation than you may think.

The Work – At the end of the day work is work. I know that leaving one job for another is not going to make me happier, because the grass is not always greener. I like numbers and being analytical but unfortunately I still have to report to management, charge my hours, fill out performance evaluations, etc., etc. Therefore I try to catch myself before getting overly excited over a perhaps “embellished” job description that might find its way into my inbox. Truth be told I currently don’t hate my work, and actually enjoy some parts of it. I’m not willing to take another job offer just because it pays more to learn that I like the work less than I currently do.

The Flexibility – My job is extremely flexible. I currently work in small teams and at times we are scattered all over the US. This makes working from home or another state very easy when I want to do some personal travel without taking PTO or just not change out of my sweat pants. For the most part, as long as I get my shit done, no one cares too much about where I’m doing it. Fridays good luck finding me in the office. The only time I come in on Fridays is when my boss dangles free lunch in front of my face and offers to take me out to a decent restaurant if I come in.

On the subject of PTO, I get a ton! I am in a profession where burnout is pretty regular and the company actually does a good job of allowing for a lot of PTO, which I definitely take advantage of. You’ll never see me losing PTO because “I’m too busy to take it.” I never felt bad for people who complained about being too busy to take PTO, because that just meant you are doing a very poor job of managing up and managing expectations. I really don’t know anyone else who gets as much PTO as me (maybe a teacher with summers off), so I’m sure if I left I would have to cut back on my away from work time which I don’t think I’d be too happy about.

I have come to the realization that if I left my job for another, it most likely wouldn’t increase my happiness. That raise wouldn’t make up for the hard work I’ve put in to build relationships and flexibility into my job. For that reason I have stayed put… so far.

What keeps you at your job? Have you jumped ship to another company recently? Could you leave for more money but choose not to?

2015 Year in Review & 2016 Goals

Boy did 2015 fly by! It was my first full year of living in Manhattan and my first full year of living the financial independence lifestyle, and I was busy as ever.

I did a lot of traveling and visited the following countries and states for work or personal trips: Bahamas, Grand Turk, Ohio, Michigan, Illinois, Colorado, Florida, Georgia, New Jersey, Connecticut, Rhode Island, Massachusetts, Louisiana, and Minnesota. I saw lots of friends and family, earned some mileage and hotel points, and ate at some really neat restaurants on work’s dime.

Now although I had a ton of fun in 2015, it did not effect my progress against my financial goals negatively. Back in July of 2015, I wrote a half year update to see how far I had progressed against my 2015 goals. Below were my seven goals for 2015 and some explanations for how I finished off the year.

  1. Max out pre-tax 401k – I was planning on maxing out my 401k by November, but I got antsy and decided to apply most of my bonus in September to my 401k to max it out. PASS
  2. Max out Roth IRA – I maxed out both my 2014 and 2015 Roth IRA in 2015, with my final contribution occurring in September during bonus month. PASS
  3. Max out my HSA – As of my mid-year update I wasn’t sure if I would hit this goal, and was planning on missing it by a couple hundred bucks. After I posted the mid-year update, I realized how silly it was to miss a goal by a couple hundred bucks, so I went in and changed my contribution amount, and this will max out in my final paycheck of 2015! PASS
  4. Pay off my student loans – I go back and forth with this on a monthly basis. I officially have one loan left at 3% and the math tells me to pay it slowly but my mind says get rid of the stupid thing. I paid off two other loans in 2015, way ahead of schedule, but I think I’ll pay off this last one off in 2016, so that I’m able to be completely debt free. FAIL, but on purpose.
  5. Never finance a car again – Well I’m still living in Manhattan, and still car-less so this one is a big, fat PASS.
  6. Save at least 75% of every raise and bonus – As noted above I used my bonus to max out my 401k and IRA for 2015, so I definitely saved 100% of that puppy. I’m also always looking at ways to decrease my spending, not increase, so I’ve definitely been socking away 100% of my raise as well (the portion that doesn’t go to Uncle Sam). PASS
  7. Once all tax advantaged accounts are maxed out for the year, begin funneling all savings into my after-tax brokerage account – Ever since September when I maxed out my 401k and IRA, I’ve been funneling all excess cash flow into my after-tax brokerage account like clockwork. PASS

In 2015, I hit 6 out of 7 of my finance related goals, did a ton of traveling for work and personal, and was able to find time to blog and workout. My other main interest besides travel and financial independence is lifting. I targeted getting to the gym 4x a week in 2015, but fell short and probably averaged 3x per week. I’ll discuss my progress and routine below when I get to my 2016 goals.

Here are my 2016 financial goals:

  1. Max out pre-tax 401k – I plan on doing this in September again.
  2. Max out Roth IRA – I don’t really have a time line for this but it will get done in 2015.
  3. Max out my HSA – the way my employer does my contributions, this will occur in December again.
  4. Pay off my student loans – I only have about $4k left at 3%, but I will pay this off in 2016.
  5. Save 100% of my raise and bonus – 75% was too lenient on myself, lets jack it up to 100%.
  6. Contribute to my after-tax brokerage account as much as possible – I plan on making more in 2016, while keeping my expenses at bay, and therefore these contributions will go up. Looking for a big increase year in the net worth department in 2016!

Here are my 2016 non-financial goals:

  1. Get to the gym 4x per week and hit a 315# squat, 225# bench, and 405# deadlift – I follow a powerlifting routine, and my progress is dependent on how regularly I get to the gym. 2015 was ehhhhh in this department. I tend to go on vacation for a week and not lift, or travel for work or work late for a week and not lift. These are excuses I plan on addressing and hope to get my average attendance closer to 4 times per week in 2016.
  2. Try and negotiate a remote work arrangement for at least six months – I think this is doable if I sell it well. I work for a big bureaucratic company, so usually this request would fall on deaf ears. But I work in a smaller division and we operate fairly autonomously, and my main boss seems to consider my well-being for the most part. I’ll start with a six month ask, which would span from spring to fall and then basically leave it open to working out of an office after that to sweeten the deal for them. I’m still figuring out when and how to request this, but I’ll write about my success or failure (cross your fingers for success) once I request it. My Manhattan lease isn’t up for a few months, so I have some time to plan. Can anyone say geographic arbitrage?
  3. Read more books in 2016 – I’ve definitely read more in 2015 than I have in the past. I just need to stop trying to convince myself to read fiction, as I’m a non-fiction guy. The fiction I like has to be on TV, so I’ll stick to non-fiction books related to finance and biographies as they peak my interest the most.
  4. Travel – I did a lot of this in 2015 but am planning just as much, if not more, in 2016. I have already booked a cruise for February where my girlfriend and I will visit a few places I haven’t been before such as Belize. I also have quite a few weddings, and depending on if this six month work arrangement ends up, who knows where I’ll travel to! I’m also debating if a trip to San Diego for FinCon is in the cards.

I was lucky to have a great 2015, and hope 2016 is just as great. Thanks for being part of my journey, and Happy Holidays and Happy New Year! I’m so pumped for what 2016 has in store!

How was your 2015? What do you have planned in 2016 that has you ready for the new year?

Financial Independence All Around Me

I’ve been on this financial independence journey for less than two years, but in those two years I’ve never really heard of anyone in the “real world” talking about financial independence. That’s partially the reason I started this blog so that I could share my journey and discuss financial independence with like-minded individuals, because it seems to be voodoo outside of this community.

Something happened the other week that took me by surprise. Financial independence and related topics reared their head THREE times in one week! I was happier than a kid in a candy shop. I remember texting my girlfriend right after one of the encounters because I was just so happy and had to tell someone. My first encounter was in a very public environment, which made it that much more surprising.

The Conference

About two weeks ago I was at a work conference in the Midwest. I was in a room full of around 400 accountants and people with financial jobs. At one point during the conference there was a panel of three people with some pretty fancy financial titles from some big companies giving a talk. When it got to the end of the panel discussion, they asked the attendees to ask questions. One woman asked if they could discuss any adversity they have encountered in their careers and how they overcame it.

One of the panelists told a story about how when he was about 30, he was asked by his boss to do some sketchy things at work (accounting things). He hated this and it stressed him out greatly. He told his boss he wouldn’t do what he was asked and called his wife to warn her he might get fired. He told himself that day that he would live a life of financial independence, and subsequently paid off his mortgage and all his debt so that he never had to rely on his biweekly paycheck to live again. Right here I was wondering what was going through everyone else’s head as they listened.

He didn’t want to have to do something his bosses said that he didn’t feel was right, just because he needed the paycheck. I don’t believe he was fired, and it seems like it was a happy ending.

Unfortunately I didn’t muster up the courage to walk up to him after and ask him about his financial independence journey, but he is probably in his mid 40’s now and I am definitely curious if he’s actually financially independent and working because he enjoys it, or for other reasons.

The Business Owner

A cool part of my job is I get to meet a lot of business owners and entrepreneurs. I had a meeting with a business owner down South. I never know what to expect when I go to these meetings as the personalities I’ve encountered are always something different. This time I was pleasantly surprised.

The business owner pulled up to the meeting in a Honda Accord, he wore a Timex watch that had to of cost less than $40, and his khakis which he was wearing were probably given to him for Christmas ten years ago. He was in his mid to late 50’s and had removed himself from the day-to-day operations of his business, which I don’t see very often with many of the type A business owners I run into who have trouble letting go and passing the reigns on to other qualified people.

He had left the room at one point and one of his managers he had in place to run his business couldn’t say enough nice things about the owner – “He is the type of person who knows when enough is enough, it’s a great quality, and you don’t find it in many people anymore.” If I didn’t know otherwise, I would of thought he was an 8th grade science teacher and not a business owner with an eight figure net worth.

Saving His Whole Salary

I was at a work dinner and my boss started talking about his career projection. Who doesn’t love learning the nitty-gritty about their bosses? He talked about how when his wife graduated from law school while they were in their mid-twenties and started working at a law firm, they saved 100% of his salary and about 15% of hers. This continued for eight whole years until his earning potential surpassed hers and she decided to stay home with their kids. I was so into the story as I thought it was awesome, until he started talking about his mansion which he now owns. Of course I Zillowed it and now know where all his net worth is. I’d rather have financial independence instead of a 6,000 square foot home, but to each his own.

I love seeing people practicing financial independence, or at least living within their means. It took two years for me to hear people discussing it in the real world, and somehow related topics came up three times within a one week period. Unfortunately I was brought back to reality on Sunday when my roommate was complaining about how he had to work on Sunday, and I told him to start saving his money so that he doesn’t have to work until 60 and his response was “that’s stupid.”

Has anyone in the “real world” discussed financial independence in your presence? If so, share your story below!

Why I Don’t Follow My Passion Full-Time

I wrote a post a while back about my Golden Handcuffs. I went into detail about how I’m not in love with my job but it offers some decent pay and flexibility, I don’t actually hate it, and it’s most likely my fastest way to financial independence, so I stick with it. I’ve been on a podcast listening spree lately and was listening to an interview with Kevin Kelly (I recommend checking this guy out – he is extremely interesting to say the least) and he mentioned following a path for something you are good at instead of going full bore into a passion which you may not be. He used the fact that he enjoys singing, but couldn’t carry a tune to save his life. Our ERE friend Jacob has said something similar as well in his book, “…pursue something you’re good at rather than something you’re passionate about.”

Now it may come as a surprise to some but my day job, which is accounting, is not my passion. Freshman accounting class came extremely easy to me. I aced it actually, with little effort, and couldn’t believe that others struggled with it. Debits have to equal credits, and assets have to equal liabilities plus equity – how hard is that?? It clicked after some research about the profession and discussions with a professor that it would most likely be a good fit for me. Numbers, decent pay, defined career progression, low cyclicality, etc., all seemed like a “smart” profession to get into.

Fast forward to now, and 27 year old me is still in the same profession. Has it evolved into a passion? Hell no! But I don’t hate it. It more than pays the bills, and is helping me reach my biggest goal of financial independence.

Personally, there are four main reasons why I don’t follow my passion full-time:

  1. Passions can change. When I was 16 years old my passion was girls and cars. At 18 it was girls, guitar, and poker. At 21 it was beer, partying, and money. Now it’s traveling, lifting, and financial independence. I think I’d be a pretty pissed off today if I had tried to make a living following around girls, while drinking beer. Maybe for others they have been passionate about the piano since age 5, and still til this day play at least an hour a day. But that’s just not me, and I’m okay with that. I like trying new things, and once I discover a new hobby I like, I dive into it head first and research it as much as possible (hello lifting and financial independence). Maybe once I become financially independent my new passion will be woodworking, or guitar again, or helping people get their financial lives in order. I don’t know, and that’s what makes the future exciting.
  2. Passion doesn’t always pay the bills. I’m pretty sure I couldn’t make a living drinking beer, or even playing guitar. Poker pays the bills for some, but seems like you have to be the best of the best to support yourself on that career path. Living in NYC I can only imagine how many struggling entertainers, artists, musicians, etc., there are that have tried to make their passions into a career, and are just coming up short. I’d rather go down the accounting path, something I’m really good at and build up a nice nest egg that can finance my passions in the future, and not at the expense of my retirement or a future family that may depend on me.
  3. Relying on your passion to make a living may lead to losing that passion. If you do anything full-time, it can get old after a while. Especially relying on a passion that might not pay well. You’re going to have to do whatever that passion is, A LOT, and it might not bear the fruits you have expected it to. Do I love ice cream? Hell yes. But would I still love it as much as I do if I ate a pint of Ben and Jerry’s every night? I don’t think so. Moderation is key. I believe we enjoy many things in life because we aren’t privy to them 24/7. Your brain becomes unphased by the constant interaction with that food or passion, and it might lose its luster. I love reading and blogging about financial independence, but if I had to consult with others for 40 or 50 hours a week on their financial lives, and then at night blog and research the topic, maybe I would run out of steam and get bored with financial independence – nah.. I don’t think I would either.
  4. You might not be good at it. Just because I loved playing the guitar when I was 18, does NOT mean I was good at it. Like I mentioned above, Kevin Kelly loves singing but doesn’t really think he would get paid to do it. Coming to terms with this early is important, before you quit it all to follow that passion, when in reality you stink at it and no one has told you yet (or you ignore them). I was not fooling myself at all with the guitar, I knew I’d never be the next Eddie Van Halen.
  5. I just don’t actual know what my passion is! In all honesty, if my passion changes – do I really know what my passion is? Or even have one? Maybe these are just things I enjoy. The dictionary definition of passion is “an intense desire or enthusiasm for something.” Maybe I just haven’t found my passion yet, or maybe I don’t have one. But I know the things I enjoy, and I’m more than happy to use my free time to explore those things.

Now I’m not saying this is the right path for everyone. I don’t doubt that some people have a deep fire burning inside them for something, and are willing to exert all their effort and give all their time for that one thing. But personally for me, I think I’ve made the right decision to apply my time to something I’m good at, and explore my “passions” in my free time.

Are you able to follow your passion full-time? Would you advise someone to follow their passion, or do something they’re good at which pays the bills and follow their passion in their free time?

Moved to Manhattan to Make More, Save More, and Speed Up FI

Everyone’s path to financial independence is different. One of the big differences is where people choose to live while on their journey. I have seen blog comments and articles about how it is impossible to save any money while living in Manhattan, or how much harder it is to reach financial independence in a big city with the associated high cost of living. So instead of just telling people that it has benefited me financially and sped up my path to financial independence, I figured I’d be more transparent about how it has helped me specifically. There are always pros and cons to any situation, but it seems that the pros have been making their presence known more than the cons since I made the move to Manhattan.

Below I’ll explain how it has directly affected my personal income statement:

Income: Now this one is very dependent on personal situations, industries, performance, economy, career trajectory, employer, etc. My employer gave me a 12% raise for the move along with a one-time bonus. The also paid for all moving costs. These benefits made the move very affordable, and in actuality instantly increased my income and net worth. The move and job switch has also given me other opportunities to increase my pay, which I would not of specifically had if I remained in my other role in a smaller city. Over the course of an 18 month period my income increased a total of approximately 50% from my previous income before the move.

Own downside is that NYC also charges you another ~3.5% on your income for the honor of living here, in addition to New York state income tax.

Housing: My rent has increased approximately 90% or $600. I previously rented a three bedroom house in New England, and now rent a somewhat small Manhattan apartment within walking distance to work, and share it with two roommates. My roommates are my friends, and although I’d like my own place from time to time, I enjoy living with them for the most part, and would rather lower my cost of living with roommates than rent my own place. (Increase of ~$600 or $7,200 per annum)

Utilities: Have gone from about $300 a month to $100 a month. It costs a lot of money to heat a three bedroom house. It costs a lot less money to heat an small apartment, especially when heat and hot water are included in rent. (Savings of ~$200 per month or $2,400 per annum)

Transportation: Has gone from $400 a month to $50. I owned a car before the move, which was fully paid off. Including insurance, property tax, maintenance, and gas, it easily cost me about $400 a month. Right now I walk to work and for most of my errands. I take the subway from time to time at $2.75 a ride. If I want to visit the family or friends I take the commuter rail or Amtrak to their vicinity, and then usually someone is nice enough to swing by the train station to get me. (Savings of ~$350 per month or $4,200 per annum)

I sold my car for $6,500 when I moved to Manhattan. My savings ignores the fact that I had this money tied up in a depreciating asset. I used these proceeds to pay down student loans.

Another saving I didn’t include above comes from the fact that I have three huge airports within my reach where I can shop for killer personal flight deals, and never really have to worry about layovers since I can fly direct almost anywhere. This is a big plus for me since I fly a decent amount for personal travel.

Groceries: Food in the city costs more, and if you shop at the local grocery store prices are probably 25 to 50% higher than what I was used to. But then I found a hidden gem when it comes to grocery shopping in Manhattan – Trader Joe’s. TJ’s has been a life saver. For those who know TJ’s know they eliminate the middle man, and go straight to the source (i.e. farmers, producers, etc.). Therefore their prices are much better than the local corner grocery store. (Increase of $100 per month or $1,200 per annum)

Eating out / Restaurants: This expense can literally eat you alive in the city. In my new role between fancy work dinners for the hell of it, travel work dinners, counseling lunches, late work nights, work drinks, etc., I get my fare share of fancy restaurant food in Manhattan and around the US. This definitely helps curb my appetite to go out and drop my own cash on a fancy dinner. Therefore there has been no incremental costs for me, so I’ll call it a wash (when in reality this has actually been a savings for me since I used to go out more than I’d like to admit to my wonderful readers).

Gym: My only requirement for a gym is decent hours and a squat rack. When I first got to NYC I found an independent gym, within walking distance to my apartment, which was actually cheaper than my gym previous to the move (due to my negotiations). They have become more popular so now the price is pretty similar to what I paid before the move. Avoid the fancy box gyms, which include laundry service and hotel amenities, and gym memberships are pretty reasonable in the city. (No increase or savings)

Clothes, toiletries, home goods, etc.: I buy all this stuff on Amazon, minus clothing. Therefore this is a wash for me and doesn’t really matter where I live since I purchase online.

For those keeping track, my expenses have conservatively increased by approximately $150 per month or $1,800 per year. My cost of living adjustment alone when I first moved here outweighed this cost increase, along with covering the added NYC income tax. Therefore every raise and bonus thereafter has been icing on the cake, and padding on the investment accounts.

Now as a reminder, this is my personal experience moving to Manhattan for work. Others may have lifestyle creep, a job that doesn’t give them a COL adjustment, a family of their own which would cost more for housing, etc.

Now living in Manhattan hasn’t been all peaches and cream, and of course there are some negatives for me. For me personally not having a car to be able to hop in and visit friends and family on a whim, not having a yard, and the increased cost of living have been a pain at one time or another.

Have you sped up your path to FI by making a physical move? Would you give NYC a shot if it sped up your path to FI? Feel free to ask any questions if you’re thinking about a move.