My discovery of FIRE has led to our realizing savings, and an accumulation, of money. But for me, it’s the unquantifiable changes that have been the most valuable. Here’s a story (Story time! Whee!) illustrating what I mean.
I was extremely fortunate in that my parents paid for my undergrad education. Granted, I went to a state school in the early ‘90s, so the aggregate cost was pretty low (Like $25K low. And that covered tuition, fees, books, room and board. Yeah, good times. Good times.). But still, I owe a huge debt of gratitude.
After paying off the university graduating, I decided to go to law school. That was paid for on my dime. I kept my cost of living (COL) pretty low (tho, knowing what I know now, it could have been so, so much lower. D’oh!) and worked during school. So my COL was probably much less than that of most of my classmates. But I still racked up about $85,000 in debt by the time all was said and done.
The Loan Wangler
That debt was an albatross around my neck. The one good thing that came from the experience of having and paying it off is that I now have a visceral hatred for law schools most debt. While I secured a job with a meh salary several months after graduating, making my post-consolidation debt payments was tough. But make them I did. And eventually, I upped the sum I threw at the repayment significantly. The result: the loans were paid off in 13, instead of 30, years.
Paying off that debt as quickly (Dear Reader, you will be excused for thinking that under no circumstance can 13 years be described as “quickly”) as I did — mostly on a meh salary — is one of my bigger accomplishments. But it left me asking a wholly unfamiliar question: where should the money hitherto going toward making those monthly loan payments be diverted to?
I confess that notwithstanding having bribed my way to a earned a B.A. and J.D. from ostensibly reputable institutions (tho the fact that they admitted the likes of me gives me pause), I was relatively clueless. Luckily, The Missus and I were both pretty frugal and not entirely stupid. So we banked most of the savings. And by “banked” I mean we kept it in our almost-zero-interest checking account.
That did have the effect of beefing up our emergency fund, which, admittedly was a goal of ours. Eventually we reached our goal on the emergency fund front. But we still didn’t know to what to do with the money we were earning in excess of our expenses. And so it grew. Until I discovered FIRE.
The Gameplan Is Afoot
Ah ha! Among other things we increased the spread between income and expenses, began investing in passive index funds, and watched our savings grow (oh, and thanks, unprecedented bull market!). But more importantly, we have a sensible gameplan that we’re confident in.
That plan has changed a bit and will change over time. But having it is invaluable. It’s also led us to implement other changes we otherwise may never even have considered, much less made. These include, for example: (1) moving to another city without having jobs lined up; (2) enabling The Missus to be prepared to walk away from a crappy job without any new job lined up; (3) starting a new company; (4) exploring various side hustles that we’ll enjoy engaging in; and, most importantly, (5) being prepared to FIRE and to do so at a much earlier date.
It’s hard to explain the impact this all had on me (tho you probably wouldn’t know it, given that this blog post is going on and on and on . . . ). But suffice it to say that it’s been enormous.
Confidence is empowering. But be mindful of overconfidence.
