Well…Money people constantly talk about “the number.”  It’s your retirement number, the target you’re shooting for, the goal, the goal-to-end-all-goals.  I have some thoughts about this super magical number—or more specifically—your goal(s).

When I was 25 I thought about an early retirement around age 55.  I thought how reaching a million dollars would surely enable an early retirement.  Oh, how I could live off the income generated from that magical million dollars.  Well, I’ve read and learned that it turns out “one million” dollars wouldn’t actually be what it was 30 years earlier.  Oops!  Time to rethink think magic number.  You would think business school would have made that more clear—and more importantly taught us three simple words “total market index.”

So if the target is no longer (for many people) the magical million dollars, what is the target?  What is your savings goal?  It seems to me that looking at the issue in reverse may yield the best answer.  Your financial well being is based on what you spend, not what you earn in most cases.  Therefore, understanding how much you spend is critical to your financial well being before and during retirement.

I’ve tracked my monthly spending for 20+ years.  Each month I look at bank statements to log each transaction to get a really good idea of spending, usually to about 98% accuracy or so.  [we’ve learned it really doesn’t change too much over the years if you keep the same house, cars, spouse, etc]

Once you know what your spending pattern is while you’re working, you can then project how that spending may change in retirement (more opportunities to spend?).

Saving 25x (30x?) your yearly spending amount allows for the standard Safe Withdrawal Rate over a lengthy retirement based on many studies of historical models.  Yet based on unbelievably low current and recent fixed income rates the 4% SWR rule places retirees, and especially early retirees in a conundrum.  The first question, can you withdrawal 4% of your portfolio balance on year one—and adjust for inflation in subsequent years?  There is no way to answer this until you are 15, 20, 30 years into retirement.  Well, what about the logic that you spend more early in your retirement, in your “Go-Go” years?  As you, and your body, decide to do less adventurous/active/expensive activities as the years progress you may very well spend less money.  Will medical costs in those later life years increase, most probably.  Will those medical costs be more than your 4% inflation-adjusted spend rate?  Nobody knows your specific case.

The option I am working with is, what if I can use a withdrawal rate of 3%, or 2.5%, even 3.5%.  Some calculations I’ve performed show one half of one percent compounded over 20,30,40 years is DRAMATIC.  I also consider the possibility that my investment portfolio may perform better, or much better, than a worse case withdrawal rate.  Many financial advisors consider this the Flexible Withdrawal Strategy.  Where you withdrawal a little more following a good return year—pull a little more of the high profits— and less following a subpar year—live more basic.  The flexible withdrawal rate strategy seems to come back to controlling your fixed spending requirements for poor return years so you can maximize your Go-Go following the good years.  They say the overall stock market goes up approx 70% of the years.  Seven good years and three basic years every decade seems like a great idea to me.  Maybe you will want to rest and recover those three years from all your Go-Go activities.

My current working plan—being only 3+ years into FIRE— is to stick pretty close to my pre-FIRE spending rate, which was the target for my FIRE spending.  This plan luckily falls well below the 4% SWR.  My wife and I also seem to have stumbled into some flexible part-time working opportunities that we enjoy enough to do it.  We may spend a day or two per week, every few weeks working and gain some nice “playchecks” to buy “extra stuff” or put towards the basic bills.

So, “the number” is really just a checkpoint to allow you to route along the lifestyle you’ve planned to live.  The goal of “retirement” seems to be to have a plan for living life.  Your net worth should be tied directly to living.

So many people write about being in FIRE/FIREd.  Many others document their journey leading up to FI/FIRE.  I read so many of these blogs because there is so much amazing information, and even more to learn from each perspective.  Even to those already in FIRE, we have so much to learn.

BUT, and this is very important if you’re thinking about FIRE—technically a person can be in FIRE while still having a partner/spouse who works, but that is not a fully FIREd household.  Yes, it’s true that a smart household will continue to maintain an income, but I don’t believe that is the true idea of FIRE.

I’m not diminishing the FI portion of those blogger’s lives.  I just feel that having only one “RE” spouse is quite similar to a stay-at-home spouse…even if that couple is FI and the working income is not required.  It may also depend on how you personally feel about trading time for money (“work”).

I’m quite sure one “FIREd” person + with one working person is very different from a fully FIRED household.

The reason I feel this way is from firsthand experience.  When the direct deposits from your employer stop as you RE, your life finances have an entirely different foundation.  Monthly cash flow is the real deal.  Companies want your money when you pay your bills.  It is crucial that you have an income/inflow plan.  It doesn’t matter if it’s the bucket strategy, dividend/interest, pensions/annuities, gifts, or from a side hustle—planning before your cash flows outbound is critical.  It feels very strange at the start of FIRE to pay bills when there are no paychecks.

Most of us living below our means, and pushing towards FIRE, know the pleasure of saving and watching our accounts/net worth grow from our hard work and planning.  It is probably a very similar feeling to someone living paycheck to paycheck who buys something new and shows it off (like a fancy car, home remodel, clothes/shoes, a new gadget to replace the not-even-old-yet gadget).  Seriously, to each/their own—save or spend.  No judgment here—well a little judgment of course.

I understand a couple could be fully FIREd, and one or both people could have multiple streams of income—both passive and active.  Maintaining an income or multiple streams of income may be the true target for FIRE.  It may be you FIREd from a career that wasn’t in your heart and now you are pursuing a passion that may give you some income.  I can definitely understand following a passion or even just a strong interest.  This is a major part of the “freedom” of FI.  It seems obvious to me that many people who FIRE are high achievers who aren’t going to just shut down their skillset because they have FU money.  They are going to use their FU money to allow them to live their lives in the manner they choose.

So when I think about one person blogging on their FIRE while someone else in the home is working, especially when that work income is counted in the budget/plan, I think that is still a step from a fully FIREd household.

To be very clear, my wife “retired early” but I loved my job so I kept working for 3 years (over working) because I had one of the best jobs in the world.  I had planned to FIRE with her, but I didn’t feel the need to quit my career just yet.  So “we” weren’t FIREd, but we were FI, with FU money to spare for years—which made working even easier.

Also, as I mentioned before, we lived off our retirement budget for most of those three years that I over worked like the Mock Retirement idea.  Nearly every penny of that income went off to investments without being touched.  Yes, our “retirement” budget was a little higher (trip to Paris for free using that ‘over working’ income) but our tracking showed we were smart in our yearly spend estimates.

When you read about people in FIRE, just consider the varying levels of FIRE.

1. Fully FIREd household: Both partners not working traditional careers.
2. Partially FIREd: One partner not working traditional career, the other working, hopefully in something they really enjoy
3. FI household: both partners doing whatever they choose to do each day because the inflow of income is not required to live their lifetime.  Working at what they enjoy is the nature of the FI over-achievers.
4. FU household: working in careers to push up the net worth number. However, you are in control because of your savings/planning.  It’s like FI jr.  This is HUGE.

I think everyone who really works towards bettering their financial situation, especially consistently over the longer term, is so amazing.  Planning far ahead, delaying gratification (a little), balancing life now and in the future is so very hard.  But there’s a comic that has some logic:

“Whoever has the gold, makes the rules.”  Keep stocking up so you can make your own rules!!!

I’ve heard over and over than many people spend more time planning their vacation than their financial life. I actually thought this could be true since I feel in the best cases people just think “my work just moved some money into my 401k, I’m good” or “I saved $50 this paycheck.”

Those of us—I know you’re one of the rarest of us—who plan and think about how to structure your savings and future goals are few and far between.

So why am I writing this post? Last week I had an unplanned opportunity to head to LA for a week. I had five days or so to plan what I wanted to do. I spent an hour mapping out a plan for a few days at the beach, then a couple days in Hollywood, then back to the beach for a few more days.

I then began researching hotels, motels, then AirBnBs. After 3 hours or so, I had my AirBnB’s booked and secured. I quite was amazed that the whole afternoon had flown by as I picked great locations to sleep. I then saw some news about “the stock market’s gains for the day” and realized, I probably just spent more time booking my 7 hotel nights than most people spend figuring out their financial plan for a year.

I then preceded—over the next few days—to map out activities to undertake while I was in LA. I made a list of all my favorite things. I then made a list of things I thought would be different (see space shuttle), and some of which I always wanted to do (hike to the Hollywood sign, eat at the Rainbow Bar & Grill). I organized all of this planning into my schetchle and then I did even more planning.

All of a sudden, my 7 day LA adventure, had taken the better part of 4 days of planning. I’d hate to guess at how many people spend part of four days PER YEAR planning their finances. Even though their financial plan can affect over 50 years of life!

I have to say, my LA adventure was AMAZING. I’ve been to LA dozens of times but this trip was a magical combination of old favorite activities and new adventures. My days of planning, thinking and estimating helped make this one of my best vacations ever. “I love it when a plan comes together.”

By correlation, there is no doubt planning for your financial life will help make your life better. Fact: I know that my past financial planning efforts, driving us into FIRE, is what allowed me to take the time to both plan and enjoy this LA adventure.

It’s time to step up and plan. Take time to think about what you want in the future. Sketch out some goals, dreams, and plans. The experts say to write these down, share them with others, etc. Of course, we don’t reach every single milestone or dream, but you will reach many and get close to others. Being close to a dream is far better than being in a nightmare.

With SO much FIRE information online it got me thinking, what am I doing? Why do I add words to the interweb? Why?

There are already so many amazing blogs. Many are from smart people in FIRE and more from people leading up to FIRE. Not to mention those planning way in advance for FIRE.

There are so many perspectives: people with/without pensions, people with/without kids, people who spend very little, people who spend more than a little. There are those who are in “FIRE” even though their spouse still works—I thought that was called “stay at home someone…” There are so many different perspectives.

I have realized that:

1) sometimes I can find people who are close to my situation. This is great.

2) sometimes people who have different situations who also have the same mindset—some don’t.

3) sometimes people who are far from FIRE, yet have great perspective and refresh my ideas—some of which I had a decade ago—this rejuvenates my thoughts.

4) I sure like the snide people. It’s obvious they are proud of being different (those thinking/living FI are very different from the masses). They don’t mind pointing “things” out—things other people do that seems strange or even negative.

5) FI bloggers (and podcasters) are very special people. There is so much to learn from everyone.

6) I’ve realized that I’m not a social media promoter anything. I don’t get active and promote myself trying to jack up my passive income (I should self-promote my bad ass self, but I’m sure that’s only in *my* head). Maybe someday I’ll yell, “I’ve got this!”

So, why am I here? I just enjoy getting my thoughts and perspectives out of my head and onto the screen. I like to keep my thoughts pretty short since I don’t pay myself by the word. No need to ramble on in too much detail. I don’t know who reads these thoughts, but I know these thoughts are successful—they have been for me for decades so far.

So I’m just sharing thoughts a few times a month. Hopefully, some of my thoughts will spark something great for you too. I love my life.

Sameness Stability can lead you to a stronger foundation in many aspects of life, not just financially. Having a strong, stable, consistent foundation is required for long-term anchoring for most items.

Houses have concrete foundations, rather than sand or dirt. Multistory buildings have pillars buried deep into the ground for stabilization. Professionals often have years or training to base their current work activities on.

Swapping to new homes, cars or spouses may cause to you rebuild or adjust your life foundations. Obviously, there may be reasons for changes at times in your life, but I want to encourage and embrace the importance “sameness.”

I truly believe cost controls based around your income—spend less than you earn—steer you towards financial success. I do agree there are many ways to increase your income—hopefully to help increase your saving/investing rate—but controlling costs are the first structural building opportunities.

Spouse: I’m super lucky in finding a wife that shares my values. She has been supportive of my somewhat structured spending for over two decades. We still buy things we want, but we seem to use a delayed gratification window to research and make sure we want these items and possibly see if we can get a better price. This delaying/researching methodology seems to work out great.

Kids: Our personal lifestyle does not include children. It could be that we’re missing out on special life moments, but we also seem to be missing out on some random expenses that the two of us do not generate. I said “some” because we have MANY nieces and nephews that seem to constantly have some gifting event. It’s nice to enjoy the children—and then go back to our quiet stable life. That’s just the way things turned out.  And according to the USDA  children are quite expensive to raise, so planning wisely becomes even more critical.

House: We’ve purposely stayed in our same home for well over two decades. Yes, it’s a 1026 sq ft “starter” home with three little bedrooms, but we love the location—three houses away from a huge park/preserve where we run, bike, hike and just look at the mountains or climb a little and look at the city. Having a small home tends to force you to have less stuff. For instance, we have a small amount of furniture. Over the years I’ve watched ALL of my close colleagues upgrade their homes as their careers grew (hedonic adaptation) or family size grew. So we still live in 30+ year-old architecture. Note: yes we do have a vacation trailer that we visit multiple times per year, but these additional costs are controlled by our years of living in a “below our means” home.

Cars: As mentioned above, we’ve watched many of our colleagues acquire new cars. Many new vehicles turned up in the parking lot after a round of bonuses or salary adjustments. It was totally obvious. That’s fine if people love their new cars. We’ve heard “buy used and drive 5+ years or buy new and drive 10 years” to optimize the depreciation hit. We chose to maximize both ideas and buy our main vehicle 3 years old and drive it 10 years. I’ve always had a quite-used card and we’re only on the 2^nd round of the “used + 10” strategy—as it takes a decade per round. As for the other vehicle (mine), it’s always been an older Toyota truck. Currently, I’ve had my 2000 Toyota Tacoma since 2004. I hope that no matter how many “Do you want to sell your truck” notes left under the windshield wipers, that I keep the truck a LONG time. I’d estimate we’ve avoided hundreds of thousands of lost dollars of costs with our buy used +10 plan. Note: some of those savings have gone into a classic mustang. Interestingly it has been a value increasing asset (not investment). Life can be a balance of happiness, lifestyle and net worth.

Our plan doesn’t have to work for everyone—or anyone else—but it has worked for us. We love our life. We try to balance the typical large family costs (home, cars, children, marriage), and just make it a point to enjoy every day. If you can’t enjoy every—or most—days, then it’s time to regroup! Right?

With all respect to Hal, I have a slightly different perspective of The Morning Miracle.

I agree with Hal’s book. I love the thoughts. I just found my application strangely different—which I know Hal wants from all his readers—for my Miracle Morning.

I differ on the awakening time. Yes, each day we all must wake up (it’s MUCH better than the alternative) and take on the day. No dreaded BEEP, BEEP, BEEP or for me it’s the opening of songs on my phone alarm (like an upbeat song or sometimes Metallica -For Whom The Bell Tolls, if you’re heard the beginning, this is funny/ironic) these alarms are not too welcoming when I’m comfy in bed.

Hal’s goal is to drive the start of the day in an awesome way—again perfect. Hal explains most of us have a hectic morning: damn alarm clock, shower, dress, food, kids, traffic, WHAM work $h!t stuff.

Oh, but the magic of FIRE (or even FI) giving you the power (and perspective) to know you’re in control. I’m super lucky. I do not have to wake up at a specific time to “be at work.” Therefore, I don’t have to set my alarm earlier to set up my positive passion for the day. In FIRE, I get to start my own day. THAT IS THE MIRACLE. Well, it’s a miracle if you choose it to be.

So, my step one—of waking time—is already my own miracle. When I wake up, I feel positive, how can I not? I actually don’t sleep in much at all, because I’m so happy to get up and have my day.

It’s interesting that I’ve followed many of Hal’s ideas for years, somehow instinctively. I have silence and reflection time when I’m sitting in my spa every morning. The spa used to be my “commute” time—between my bed and my home office when working. In addition to the silence/thinking/reflection in the spa, I also will read to learn, grow, motivate myself while I’m in the spa.

I ALWAYS drink a large glass of water first thing so I’m hydrated and my blood is full and fueling my brain with oxygen… or whatever it all does.

I know what exercise I’m going to do for the day. I know what my main/priority tasks are for the day. In FIRE, I can even push those tasks to a future date because I don’t have to cram everything into the weekend. [side note: FIRE is so worth the planning and effort it takes] I often perform some of my tasks first, then head off to exercise somewhere between 8-11a. My body doesn’t want to run, bike, swim or gym at 5 or 6a, but that’s OK. I can still get my body engaged and activated in the “morning,” just later morning.

Going to sleep is AMAZING in FIRE. Every single night when I lay down, I think about the day and how it was great, how my life is great, and how tomorrow is all mine. That is GREAT. It makes falling asleep very easy.  See my 2 am secret on middle of the night activities.  All of this thoughts makes waking up positive and motivated natural.

I love my miracle life. I mentioned that in posts. I have a t-shirt stating “I love my life” and wear it often (around the house).

YOLO—Enjoy your life, your days, your mornings!

I can’t seem to get enough knowledge about personal finance. I constantly read—and calculate—personal finance. The personal finance topic seems to have transitioned from one of my interests, to a hobby, to a passion, to my current “job.” It is by far the most important job I’ve ever had. It’s actually more like a ‘career,’ probably a lifelong career.

To put my personal finance education into a structured progression, I broke it up into the familiar US education structure.

• Preschool – This is the “I want…” mentality. The pure desire to get stuff. Shopping to acquire items with no understanding or regard on how to pay for it. Charge it!? No understanding of incoming bills (or income) and no consideration for any form of saving. There is no correlation between stuff and money.
• Elementary school K-6 – Building some logic. The understanding of how money comes in through job earnings and is spent on life expenses. There is some correlation here, but no calculations.
• Jr High – A more clear understanding of needs/wants. You understand you need to build up some money to make the purchases. Deep down you still feel the ‘wants’ are very important in your enjoyment of life, more important that pulling the money together for the purchase.
• High School graduate– Threshold of being able to manage your income in relation with all expenses to the point of knowing you should have money left over income to put towards savings. Wide range of knowledge at this level:
  • Some high school students leave school with a higher level of knowledge than others. The equivalent of this higher level may be an adult family that puts some money away, at least for emergencies. These people have a financial cushion.
  • Functioning a little lower: It may be just as some people who squeak by in high school, similarly, some do the same in personal finance. They pay their bills on time—most of the time— but sometimes they’re late or miss payments (just like homework assignments).
  • Those over achieving type students may put a chunk of money away each pay period into a retirement account—along with their savings and in their emergency fund.
• College graduate/Trade certification – A full giant step above the masses (millionaire). These are the people who put in a major amount of extra effort to learn. They try and place themselves above others who didn’t—or weren’t able to—grow to a higher level of accomplishment. So many “experts” seem to feel this is the level of major differentiation. It’s not a guarantee of a great life (job or net worth), but it may move you far ahead of the masses/the average. Keep in mind that this level (college degree/millionaire) becomes less valuable as more and more people reach this same level over time.
• Master Degree – Advancing knowledge in a specialized area (multi-millionaire). This must be where you have your foundation (high school) and you’ve built a solid first floor (college) and now you are building a second story or third story to your financial home. At this level, you may have the best opportunity to keep yourself differentiated from the growing number of people one-step below/behind you.
• D Degree – Rarified knowledge and skills (deca-millions). Some people just far exceed those at the high school/monthly bill level. They extremely knowledgeable and experienced in areas that most people have no knowledge. They’ve become experts who operate within organizations (finances) at very high levels.

Specialist– Some people (families) have so much education/skills, knowledge, experience, global influence that their education is only foundational to their achievements (COE’s, political leaders). This may be the equivalent of hundreds of millions or billion+ in net worth. This massive level of responsibility is almost unattainable to mere mortals.

As in real life, many people have accomplishments that do not require a “college” education. These are often entrepreneurs who start a business, develop the skills and knowledge to deliver products which are in demand—high demand—to the marketplace. These smart people may not have extended formal (classroom) education, but the have MASSIVE amounts of life and people education, far exceed many of us college educated people. There are many paths to success, and far more to happiness.

What do you feel your personal finance education level is? Is it similar to the long grind of college or starting your own business and working so hard year after year after year? Are you trying to improve your high school level of foundational skills, or learning more and more to be an over achiever type?

I’m sure no matter what level it is, be proud of the knowledge you’ve gained. Of course, you know you could learn more—we can all learn more. I’m sure you realize that the foundational material changes over time (i.e. fewer company pensions, future social security concerns, today’s incomprehensible interest rates, possible inflation changes, future medical costs, tax optimization—doesn’t this all sound exciting to keep learning more about?