Because there was an entire playbook for investing, it was pretty straightforward to follow in the footsteps of many FI experts. Books like J.L. Collins' "The Simple Path to Wealth" helped me figure out how to invest and what to invest in. And blogs like The MadFientist helped me navigate the landscape of tax-advantaged accounts. They outlined what I previously thought was so complex into simple, actionable investment to-do’s. (PS I include more of my favorite resources at the end of this series!). I also had Joe by my side to help me research any super challenging questions.
The power of compound growth was so exciting to me that it made me much more eager to save. But figuring out how to spend in a way that was meaningful, without driving myself crazy and back into that scarcity mindset I felt as a child was frankly challenging. And I think this is one of the hardest parts of FIRE for many people. You don’t want to deprive yourself, BUT you do want to spend with intention. And for the first time in my life, I had to think very hard about how I wanted to use my money.
Spending Trials and Errors
As I mentioned in the previous post, I was lucky in that I had that big stuff figured out. My rent was less than 15% of my take home pay (compare this to typical finance articles that tell you to spend less than 30%). I had a paid-off 15 year old car I had been driving since I got my license. And I didn’t have any college debt, thanks to money left to me by my grandfather, a Holocaust survivor who built a thriving business from scratch. This is the triple package: low housing cost, low transportation costs, and minimal debt. Most people on the FIRE journey have to tackle these items first! But I was already onto the next step.
I began tracking all my expenses in Mint and took a cold hard look at what I was spending money on. And I tried to identify all the things that didn’t actually improve my quality of life. I found that most of those things were either (1) work-related, or (2) entangled in some sort of fear I had.
Work-related spending included:
Way too many fast casual meals because I didn’t have enough time to take care of myself
Clothes, shoes, and bags I wouldn’t wear outside of work but felt I needed to wear in front of high profile clients (keep in mind this was before COVID and before tech casual became a thing)
After-work dinner and drinks, because that’s “just what you do” to network in the industry
Almost daily afternoon coffees just to break away from the grind of work
And I paid an exorbitant amount of money to get hair straightening treatments 3 times a year because showing up with curly/messy hair in the office was simply “unprofessional”.
Money fears I had to unpack:
I was paying a financial planner $100 a month to invest my money, and that did not even include the fees that came with investing in the funds they selected. I never even actually spoke to this person but my mom had used them and so I felt I should too. This was literally pissing away money like it’s nobody’s business. I thought that this planner knew what they were doing and I wasn’t able to figure it out on my own. So the fear of understanding how to invest was getting in my way.
I was paying above average rates for insurance because I never actually looked into what coverage I needed - things like car insurance and renters insurance. My fear of unknown risk had me paying top dollar.
I often overspent on things because I didn’t want my friends to think I was “cheap”. I’d go to fancy brunches that felt out of line with my salary or I bought higher-end bottles of wine to a party so no one thought less of me.
One of the things that I found quite helpful was completing a challenge where I tried to save $100 in one week. This had me thinking about my spend quite a bit cause this wasn’t a small sum of money. I rode my bike a few more times that week instead of taking the train, cooked a few more meals at home, and ended up cutting some expenses that were actually recurring ones (like reducing my renters insurance to the essentials).
At this time in my life, I think the pendulum swung a little too much towards frugality. I was trying to find what was the appropriate level of spending for me, and the only way I knew how to do it was removing all extraneous spending and starting from scratch. Actually, this isn’t too different from an elimination diet where you completely remove foods and slowly add them back in to see what you are sensitive to. I was eliminating spending to then later add back in what made me happy. I don’t think this is the only way to go about reducing your expenses, but I will say it was highly effective for me.
A Frugal Life
I tried to think of ways to spend genuine and quality time with friends. Instead of drinks and dinners out, we’d go for walks along the Charles River or make dinner together. I crafted homemade birthday cards instead of purchasing them. I found free things to do on the weekends like art shows or fairs. Most of my friends were largely understanding of my journey, and many of them actually asked for help with their own finances! Some people were a little more tough. I distinctly remember one friend calling me “cheap” for wanting to ride my bike somewhere instead of taking an Uber with him. That kind of language upset me, but thanks to Boston traffic I got to our destination before him anyways.
I stopped doing my nails and let them grow healthy. I wore my hair curly (which by the way I love now). I started riding my bike to work every single day instead of taking the train. This actually ended up being one of my favorite parts of the journey because I actually got to work way faster and felt like I started the day refreshed, instead of being crammed into a subway cart staring at my phone for 30 minutes. And as a result of riding my bike more, I started wearing clothes that were bike appropriate, which helped me put less value on my fancy work items. I became “the underdressed woman” at work, and I was totally ok with that because I knew a secret my colleagues didn’t know…I wouldn’t have to work forever.
Wearing my hair curly for the first time in years
Autopilot Engaged
Over the course of the year, I had made some major life changes with Joe’s help. But once I put all the building blocks in place, I realized I had nothing else to do. I had reached what FI folks call “the boring middle”. After the excitement of discovering FIRE wore off and my financial practices were set on autopilot, it became a waiting game to reach FI. I expected I would need to work maybe another 5-8 years before I could retire. This all depends on where we ended up living (high cost or lower cost locations), what type of lifestyle we wanted to live, and how much of a cushion we might want above the 4% allowance. I figured I didn’t need an exact timeline since it was still so far off.
Big Income Changes
In pursuing FIRE, some unexpected mindset changes were forming under the radar.
While I wasn’t quite FI, I had what they call F*ck You Money, or enough money that I didn’t feel totally reliant on my job to survive. If my company were to let me go, it would be unfortunate, but not life threatening. I’d be fine to live off my savings for years if needed. This F*ck You Money emboldened my position at work. And honestly, it made me a better employee. I said no to requests I thought weren’t useful or high-impact. I aligned myself with people I liked and valued, and basically brushed off others who pushed tasks my way that wouldn’t help my career. I became more outspoken and confident, in a way I never believed I could be before.
One day a recruiter reached out to me for a company that I had previously done some work with. I had met the hiring manager, liked her vision for her team, and to top it all off I knew that the company paid well beyond what my current company was paying. At the time I was very focused on trying to get a promotion so I wasn’t looking elsewhere. But I decided to interview anyway (p.s. you should always interview!), and found I was excited about the new job and all the resources it would offer. I realized I had been living in a corporate world where I was being suffocated - underpaid, under-resourced, and a manager who wanted to keep me under her.
In this new role I felt like I could really contribute to something bigger. The people seemed to say “Yes!” way more than "No!" And the pay? Good. Like, stupid good. In fact the salary they offered me was $80k more than I made. And because of my newfound FIRE confidence, I asked for even more and they gave it to me. It would take me from a 60% savings rate to a 88% savings rate overnight. YES, you heard me correct. An 88% savings rate.
The only catch? This company faced some major challenges. It was the most highly valued startup in the US at the time, and to me, it seemed too big to be true. I knew there was a lot of risk in taking this role, in fact I questioned if the role would even be around two years from then. But, remember, I had F*ck You Money to give me confidence. Instead of dwelling on the risks, I focused on the opportunity. Even if I only ended up working there for a year, I could take a year off and still have made the same amount of money had I never left my job.
Taking this new role and negotiating such a high salary would have NEVER happened to me without pursuing FIRE. I simply never would have had the confidence to fight for myself in that way. It felt like my whole FIRE journey culminated in this moment. And the best part, my new job meant I was shaving off 3-4 years from my Early Retirement date.
These far-off decisions were not so far off anymore.
Pulling the FIRE Trigger
Well….my predictions were right. A week into my new job, the company’s IPO failed and layoffs began happening. I was stressed because I was so close to hitting my FI number and at first did not want to be let go within inches of reaching the finish line.
Around this time, Joe and I were beginning to explore where we would move to once we left our jobs. We had both wanted to move to the mountains and considered places to live like Bozeman MT, Bend OR, Ogden UT, Lake Tahoe CA, and some others. Some of these places were more expensive than others, and so our FI number hinged on location, largely due to the relative cost of housing and property taxes. If we chose a lower cost of living location like Ogden, we had technically reached FI (whoah!), but if we chose a place like Lake Tahoe, it would require 3 additional years of working.
My company was providing a generous 4-month severance package to those laid off. I wasn’t sure how long that package would last for. If I were laid off, and we did in fact choose Ogden as our final destination, then I would leave the workforce with the golden parachute all Early Retirees hope for…getting paid not to work. But I still felt uneasy. I still wanted to reach our Lake Tahoe FI number, just in case.
Amidst the chaos of layoffs, my friend and blogger Jess from The FIoneers introduced me to the concept of SlowFI, and helped me understand alternative options for FIRE, like semi-retirement. Jess and her FI Milestones template showed us that since we were so close to our FI number, instead of continuing to work a full time job, we could simply earn a little bit of active income throughout our retirement to offset withdrawing the full 4% from our portfolios. By exploring the semi-retirement math, we found we’d only needed to earn an additional $6,000 a year if we chose a more expensive city instead of a less expensive city (you can read the full story here on The FIoneer’s blog). $6,000 didn’t seem that hard to make each year, compared to working full time for another 3 years! I could babysit, work at a coffee shop, work as a ski instructor on the mountain, you name it! This was a whole new way of thinking about retirement, and ultimately helped me gain the confidence to ask to be included in the next round of layoffs.
Messing around with The FIoneers' FI Milestones template
to understand the cost implications of living in different cities.
9 months into the job another round of layoffs came and I asked to be included. A wildly unexpected ending to my career in commercial real estate. And ironically, in the end, we chose Ogden as our new city, meaning we could fully retire without earning extra income. It was all too perfect.
But Early Retirement isn’t all sunshine and rainbows...read my final post in this series if you want to learn more about my life as an Early Retiree.
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