During the final years of my journey to financial independence and in the years since quitting my full-time job, I’ve been in the process of designing the ideal lifestyle for myself. Five years in, the process is far from complete. What I thought I wanted in the beginning is different from where I’m headed now.

Pre-FI: Limited Options and Bountiful Safety

My career gave me guardrails – rigid structure that kept me on the road. Where did this road go? Since I chose my location (Colorado), my profession (software engineer) and employer, this road pointed generally where I wanted to go.

I was headed towards a semi-adventurous life very much in-line with what society wants from me:

• Buy a house,
• Get a dog and start a family,
• It’s okay to go climbing and hiking on the weekends and occasionally after work,
• Travel a few weeks per year,
• Make a boat-load of cash and spend most of it on an RV or a cabin near a ski resort
• Enjoy all these things occasionally until I’m old and can retire.

Not too bad. I mean who’s going to argue about the wonders of hiking a few times each week? A cabin up in the mountains sounds rad, right?

Going to an office daily gave me a way to spend my time and a place to meet people. On top of all that, I feel comfortable with structure. The routine of commute, office, commute, work out, sleep, repeat felt predictable, safe.

Transition to FI: Rip Out Those Guardrails!

I wanted more. But what did that “more” look like. Life without guardrails is scary. If I don’t have a commute, time in the office, happy hour with co-workers, etc. how do I spend my time?

TL;DR: I didn’t nail lifestyle design on this first iteration and that’s OK! In hindsight, choosing full-time #vanlife was an over-reaction to the rigidly structured life of an office worker.

Non-stop bopping around the American West climbing and hiking – though it may sound romantic – felt too open-ended for me after a while. My wife and I would climb for a day or two. Then we’d spend our off-days driving to the next place, re-provisioning food and water, and finding WI-FI. This wasn’t too bad for the first few weeks, but the unpredictability of it all quickly became unsustainable.

The first tweak to my post-FI lifestyle was small. Instead of spending 2-5 days in a place before moving on, Rose and I started to stay a week or more before moving on. This subtle change in our design enabled us to get to know a place a little bit. We learned where to get water, WI-Fi, and where to sleep. A little bit of predictability felt great!

The next pain point I found was that it’s hard to have community while on the road full time.

Van Life to Home Base: Craving Community

Even with slow van-based travel, it was hard to develop community. I missed my family that we got to see when living in the Denver area. I was also tired of spending all my time working in libraries and coffee shops. Wah Wah.

We enjoyed nine months of van life. Slowing down the location changes made a huge difference, but at 3/4 of a year on the road we were ready for a bit more normalcy.

Before the latest housing price boom, Rose and I came across a small and affordable-ish ranch-style home in the Boulder area.

Boulder, in case you don’t know, is home to some fantastic climbing. Road-side sport climbing, full-day alpine routes, and everything in between: Boulder has it. Add to that the fact that we have family living nearby and Boulder is full with other like-minded outdoor enthusiasts. We were sold.

We started seeing family regularly. Rose and I made friends with people at our climbing gym. We climbed. Our new place was spendy, so we took on some part-time work to fill the gap between what our FI number yielded and our new higher cost of living required. We enjoyed the work (and still do to this day) and still made time for climbing and training.

The balance of relationships and adventure tilted in favor of relationships. Then COVID struck. For a while at least, I was both confined to home and unable to see the people I cared about. As the restrictions lifted, I felt a burning desire to resume traveling.

Lifestyle Design: Constant Change

Three years after moving into our house, we packed all of our stuff in to two suitcases, listed our house on AirBnB, and flew to Croatia.

Which brings us to today.

Rose and I are currently on our second month living near Split, Croatia. We don’t know exactly what the next months or years will look like, though we have ideas.

For where we are in our lifestyle design journey, that’s okay. We think of Boulder as our home, but are also curious about making a life in Europe. We’re making friends here, but also miss our friends and family in the States.

That’s the beauty of post-FI lifestyle design: perfection can be a moving target. We don’t have to nail it the first time or ever. Every step along the way is an adventure and each experience adds to a life well-lived.

Let us know in the comments what you want your Post-FI lifestyle to look like! Have you achieved financial independence already? If so, what is your approach to lifestyle design?

The post Lifestyle Design: How to Live Your Best Life Post-Financial Independence appeared first on A Way to FI.

I benefit from the privilege of being introduced to many of the pillars of Financial Independence from my dad relatively early in life. Because what I learned aligns with some of my core interests, I’ve also earned a pretty good salary as a Software Engineer throughout my career.

2008 crash and first company

I’ve always been money-conscious. In high school, I ran a landscaping business that cut lawns, spread mulch, and built stone patios for people. I had five employees. Making money was a fun game – like SimCity but real life.

My dad set me up with a Fidelity account and showed me how to invest in low-expense index funds. I think it was VTI or IVV.

During the 2008 financial crisis, I watched my hard-earned income get halved. I was too into “being cool” in college while getting a degree in Information Technology to get too bent out of shape about it.

By the time I entered the job market in 2010, things had started to recover and my Fidelity balance was back up to about what it was before the crash. I had learned a valuable lesson:

Don’t sell in a panic! You’ll miss out on the gains when the market rebounds!

Entering the job market

In 2010 and fresh out of college, I started my first job as a Software Engineer in Richmond, Virginia. I was making good money, but nowhere near the six-figure mark that I heard developers were making in Washington D.C. and San Francisco.

Importantly, Richmond has an extremely low cost of living. I was able to get a room in a nice apartment on Monument Avenue in The Fan (highly desirable location) for $400 per month. I spent weekends backpacking on the nearby Appalachian Trail and going on bike rides. Additionally, I drove a $3k 1998 Honda Civic.

Though I had no vision for Financial Independence at the time, at age 22 I was on my way to FI due to having a reasonable salary and very low spend rate.

It took me five years to discover FI

Over the next few years, I:

• Got a new job in a new location (with a smaller salary),
• Bought a small town house and got two roommates to pay 90% of my mortgage, then kicked those roommates out when I
• Got married to an equally-money-conscious woman,
• Got a second new job with a higher salary.

This new job paid closer, but still shy of, the Silicone Valley ideal of the six-figure salary. Importantly, this company had a bonus program where they would contribute to employee 401k up to the IRS max.

My new wife and I took a position with her job in Germany. Here, the U.S. Government paid for our housing through Rose’s job. I qualified for the Foreign Earned Income Exclusion (FEIE) – a tax situation where a large portion of your active income is tax-exempt.

We were saving money at an astonishing rate, but didn’t know what to do with it.

I checked into my Fidelity account and found that I had 10s of thousands of dollars just sitting in cash. I figured I should do something with it, but had no idea what.

Some internet research led Rose and me to find Mr. Money Mustache’s blog and JL Collins’ Simple Path to Wealth. We promptly moved this money into a new Vanguard account and bought VTSAX – one of the best low-expense index funds.

Path to financial independence

In 2015 and in our mid-20s, we were on our path to Financial Independence! We had:

• A goal of reaching Financial Independence in the next five years,
• A townhouse in the States that was then rented out and producing a small amount of passive income,
• A solid combined income from our jobs, and
• A spectacular savings rate.

Rose and I had always been natural savers, but had figured out what to do with our savings and we had a goal!

For the next several years we continued traveling around Europe, finding bargain flights and accommodations. While our friends were buying Audis and staying in luxury hotels, we were a one-car family driving a cheap Volkswagen and staying in gasthauses in private rooms with bathrooms shared with other guests.

We put aside $2,000 to $4,000 for an emergency fund and to handle our cash flow. We invested everything else into low-expense index funds like IVV and VTSAX. Riding the insane rise the stock market took from 2015 to ~2022, our money made an approximate 60% return.

Declaring (lean) financial independence

Five and a half years later, in 2018 we quit our full time jobs and moved into a van.

We had reached FI. Well, sort of. Our spending rate MINUS about 75% of what we were spending on housing put us within the Safe Withdrawal Rate from our net worth. In other words, living off of 4% of our net worth, we could cover our spending and a portion of our housing. Given the high cost of living in the Front Range, hacking our housing situation would allow us to “retire”.

There certainly was some fat we could trim from our monthly budget (more on this in another article). The big change we decided to make was exchanging our $2,000/month rent in our single-family home for $50 per month for a tiny storage unit for our stuff and a van (paid for with cash – no loan payments) for us!.

We also wanted to be location independent and spend time climbing around the western US!

In short, we had enough money to retire in 2019, but not enough to live super comfortably. Certainly not enough to be able to afford rent or a mortgage in the very competitive housing market that is the Colorado Front Range.

We didn’t want to wait until we had enough to declare full Financial Independence/Retire Early (or fat – FIRE) to quit jobs that we weren’t crazy about and to start living the life we desired.

We leveraged our (already) substantial savings in combination with our willingness to be flexible in our housing situation to make drastic changes early!

(re)Focusing on FIRE

We spent just shy of a year in the van, bouncing around to different destinations in the American west.

Wanting to be a little less mobile, we eventually scored a great deal on a home in Boulder, CO. We also converted our side-hustles (that we LOVE) into extremely flexible full-time jobs to cover our new housing expenses. In short, we took smaller salaries than we could find elsewhere in exchange for a high degree of flexibility

We were still living the life we wanted but still depended on some amount of supplemental income to support our cushy lifestyle.

Enter: Meghan

Having a home base in Boulder made it easier to make friends! This is when Rose and I started spending time with Cal and Meghan. After a few months, Meghan asked us (Rose, I think) about FI and what we did to have the flexible schedule we then had.

The best way to learn is to teach. Getting materials together to share FI principles with friends forced Rose and I to dust off our FI knowledge and re-orient ourselves to the FI mindset. We had to get smart, again!

That brings me to today.

Full- and (eventually) fat- FIRE

I’m excited to be refocusing myself towards Financial Independence. Spending time as a lean-retiree has given me a taste of what is possible. I like my current job, but want to set Rose and myself up for true Financial Independence so that we would not have to change much if our jobs were to go away.

There is much more Rose and I can be doing to better achieve FI. We can trim lots of fat from our spending, use some simple tricks to reduce our tax burden, and put time into our side-hustles to increase passive income.

I’m excited to learn and grow with you during this next FI-focused chapter of my life!!

A Way to FI

I’m starting this blog to share with you specific tips and tricks I’ve used to achieve Financial Independence. Equally, I want to learn from the community your thoughts on Financial Independence. Specifically, I’m looking forward to learning your thoughts on:

• What do you do when you retire?
• Tax optimization,
• Travel hacking,
• Lifestyle design.

The post Jeff’s Path to Financial Independence appeared first on A Way to FI.

Early iterations of financial independence

I got my first job at 15; I worked in an ice cream store with my best friends. We set our own schedule. We consumed a lot of free ice cream.

I bought my first car at 16, set up car payments and used my part-time job to pay for it. 

This was my first taste of financial independence. 

I no longer had to ask my parents for money; I used my part-time job to buy concert tickets, new clothes, fuel, and lunches out with friends.

It was liberating to use my money however I wanted, void of parental judgment and with the pride of knowing I’d earned every cent on my own.

My “mini-retirements”

Fast-forward 10 years: I’m living in Seattle, finishing up my degree in journalism, and working three jobs to help pay for my impending travels overseas. 

At this phase in my life, I once again tasted a form of financial independence. I thought I’d cracked the code: I’d work my ass off for up to a year, often working two or three jobs and saving almost every cent. I’d then quit my jobs, buy a plane ticket for Thailand, Kenya, or wherever was next on the map, and disappear for months or years.

I called these voyages my “mini-retirements,” insisting to anyone who asked that I’d much rather have this kind of freedom in my 20s and early 30s than work a full-time job for 40 years only to retire in my 60s with zero energy to explore.

If this wasn’t financial independence, what was? I didn’t mind working hard so I could take months off, and I always knew I’d be able to get a new job when I needed one. 

This pattern repeated itself every few years for the majority of my early adulthood, until quite recently.

My financial reckoning: Learning about the FIRE (financial independence, retire early) movement

Before I started thinking seriously about my own path to financial independence, my only concept of retiring early was in reference to tech bros who raked in six figures for breakfast. 

I clearly remember the moment the concept of real financial independence finally sunk in. It came during a time of financial reckoning. 

I’d just moved to my new home in the Colorado Front Range after several years of moving back and forth between the U.S. and New Zealand and living in a van for six months with my husband, Callan. 

I felt settled for the first time in years. Maybe for the first time in my entire adult life.

I came across a podcast called HerMoney by Jean Chatzky. While I’d often felt that I was just financially literate enough to get by, this podcast showed me how much I’d been missing.

I instantly became a sponge for all things financial literacy.

The first episode I listened to was about Roth IRAs. Until that moment, I’d never heard of one. I was 36 at the time.

The podcast also introduced me to FIRE: Financial Independence, Retire Early. I learned about investing, about budgeting, and about frugality (something I was already pretty damn good at). 

Putting the lessons of financial independence into practice

Not long after my financial literacy deep-dive, my husband and I treated our close friends Rose and Jeff to dinner. We knew they were investing-savvy and wanted to pick their brains. 

(At this point I should point out that my husband, Callan, is from New Zealand. His knowledge of investing in American stocks was similar to mine, which is to say, little to no understanding of how it all worked.)

That night after dinner, we cracked open my laptop and they helped me set up my first investment account, a Roth IRA. 

This was a massive turning point for me. 

It was like being allowed into a gated community. A secret club. A pathway to actual wealth and financial freedom.

I poured every extra cent we had into our individual Roth accounts until we maxed them out for the year. I then fortunately landed a new job in which I could start investing in a 401(k).

My FI resources 

Throughout these first few months, I read a few books that were pivotal for me in my journey.

First, Rose lent me The Simple Path to Wealth by J.L. Collins. This was my foray into index funds. I was relieved to learn that the best investors are those who take the “boring” path of ignoring the daily ebb and flow of the market and instead investing in slow-and-steady, low-cost index funds. 

Another book I found helpful was Your Money or Your Life by Joseph R. Dominguez and Vicki Robin. This introduced me to the concept of the wall chart: I now track my income and expenses each month to help me understand my overall spending habits.

Other helpful reads include The Index Card by Helaine Olen and The Millionaire Next Door by Thomas J. Stanley. There are similar themes throughout these books, which I’m using as my journey-to-FI foundation.

(Check out our resources page for more inspiration!)

1. Frugality above all else

One common theme that I felt echoed throughout these resources is the power of frugality. And at the heart of frugality is the concept of minimalism. 

While it may seem intuitively easier to reach financial independence by earning a high income, lower-income individuals can reach FI by learning to live frugally and investing as much money as possible.

2. Invest as much as possible

What once felt like a confusing and elite club is now something relatable and achievable. Investing—once I figured out how to open an account—is far easier than I thought. I now invest between 50 and 60% of my income each month into my investment accounts.

3. Don’t be a hero

I absolutely love the advice of investing gurus: It’s not TIMING the market that matters, it’s TIME IN the market. Unless you’re a clairvoyant, don’t pick stocks. Index funds are boring and reliable, which is exactly what you want if you’re on the journey to FI.

My current path to financial independence

Now that I understand how it’s done, I’m eager to catch up. My husband and I are aiming to be financially independent in 10 years; by our mid- to late-40s. How will we achieve this?

1. Continue investing at least 50% of our income each year.

Our investments pan out as follows: We max out both our Roth IRAs each year, and I max out my 401(k) through my employer. I then split the rest between a SEP IRA (I’m also self-employed through a side-hustle) and I-Bonds (which currently have a 9.67% payout rate). 

2. Avoid debt 

I paid off my student loan the same month I started saving for retirement, and Callan doesn’t have any student debt. We have a leased car at the moment which goes through early 2023. I plan to buy a used car for $10k or less at the end of my car lease to avoid taking on car payments.

3. Live that frugal life

I’ve become a committed budgeter since embarking on this FI journey. While we make exceptions for travel and our outdoor pursuits (climbing and skiing), we hardly spend money other than for basics: rent, utility bills, fuel, and food. 

Hurry up and wait

I’m an impatient yet driven person, which makes this journey to FI a little painstaking at times. Our wealth-building is a slow but steady process, and one that’s both exciting and goal-oriented for my husband and me. 

I’m excited to see how A Way to FI helps unite folks who are here to learn and share knowledge. 

Join our Facebook group (A Way to FI) to ask questions, collect resources, and share wins. 

The post Meghan’s Path to FI appeared first on A Way to FI.