Don’t Sweat Petty Stuff, and Don’t Pet Sweaty Stuff

In my journey toward FI, if I’ve learned one thing, it’s that the big stuff will kill you. This is true across many aspects of life – objects falling from the sky, bears & moose, and “if-you-can-finish-this-4lb-cheeseburger-you get-it-free” offers. When it comes to expenses, what’s the big stuff? For me, the big-stuff boiled down to how much I paid every month for a roof over my head and wheels.  

I came out of college with no student loans (hoo-rah for state school!), and I have no children. Of course your results  may vary. Now before you protest I realize many folks have other “big stuff” expenses that include ongoing medical costs or caring for an ill family member. I understand that, but for the purpose of this post I’d like to discuss the two things that virtually every American ‘needs’ – the roof and the wheels (wheels being very arguable if you live in an urban area with great mass transit or can bike around, but roll with me here….)

 

Drink Up

Many assume a frugal lifestyle lacks joy. No morning cappuccino? No dinners out on the town? No thanks….  I’d like to offer that my path to FI had PLENTY of those things, and many more (ahem… beer… cough… bourbon). So the FI community is now asking “how did you become FI while violating those core rules?!!”… or “I knew it – trust-fund kid!!”  Nope, no trust fund here. I did it by focusing in the roof and the wheels.

I saw in my early 20’s, through a quick evaluation of simple maths, that the roof and the wheels were taking up most of my budget. My underdeveloped brain told me that if I could save the maximum amount on those two things, I’d be in the winning column. It’s that simple. Sure, saving $60 a month by quitting the cappuccino habit is great – that’s $720 a year. But, not having a $450 car payment every month in perpetuity saves $5400 per year. Edumacation taught me that $5400 is greater than $720, by a lot – big boo-yah to-ya! That made my cappuccino’s taste even better! And as time went on the BMW’s and Audi’s of the world kept looking uglier and uglier to me. Why? Because they took the virtual joy of the cappuccino’s out of my brain, and for that I would not stand.

 
It’s about choices. I made mine based on the size of the mathy-ness involved (yes, I read my share of Feynman in my impressionable years). Let’s talk about the house. Sure I had some luck. I bought in an upward market, but here’s the key – I stayed in it as my career progressed and I kept making more money. I didn’t lifestyle-inflate. I didn’t try to keep up with the Joneses, cuz I hate the friggin’ Joneses. I refinanced 3 times to minimize my costs, and I was content.

I love my home, it’s my little sanctuary.  At 1400 sq. feet I realize it’s smaller than the walk-in closets of many new suburban McMansions, but that’s fine by me. Call me a stoic, call me a minimalist, whatever. I call me happy and content, and I buy boutique bourbon. And I also call me financially independent, largely because of this one choice.

My monthly mortgage is way less than it was 16 years ago, while at the same time I make WAY more money. I’ve been saving the difference of course and putting those employees (my money) to work for me. Turns out those little buggers breed when you put them in the right fund! If I bought a new house in my area now – any new house – my mortgage would be well over twice what it is now. Why would I do that when I’m content with my house now?
 

 
A Place To Live Is Personal

If you’d like to get into the own vs. rent debate, I won’t take you up on that. Much has been written about that, I recommend
this post, but the bottom line is that some things can’t be measured quantitatively, like a sense of home or community. I see both sides of the debate and can totally see myself renting in the future when the time and circumstances are right. For me, 16 years ago, buying was the right thing to do and I’m thankful I followed my hunch.  Simple rough math tells me that I’ve saved over 180k of my own money in the past 16 years by not upgrading to a bigger, more lifeless, less-cozy, and totally unnecessary house. That’s a conservative estimate. And since that money has been invested the whole time, diligently working away like army-ants, a decent estimate is that this one choice in life has banked over 400k into my net worth. Drop-mic, walk off…..   (I’ve always wanted to do a drop-mic walk-off, but alas, a bloggy one will have to suffice)
 

As for cars, don’t get me started. That’s the next post…

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