Several months ago, my buddies over at Our Next Life issued the Road Less Traveled Challenge. Go read their post on this subject first and then come back to this post before you go down the rabbit hole of binge reading their entire blog, because it’s probably one of the best blogs out there in the early retirement space on the internet. ONL always writes about topics that make you think and challenge yourself, whether it’s a money topic or a life topic. If I can reach 10% of the people that they reach, I would consider that to be a great success for this blog.
I’ve said before that I don’t particularly identify with the terms of early retirement or financial independence when observing my own circumstances. I entirely expect to head back to traditional employment at some point in my life. I crave structure. I crave routine. But, for now, I can start living the life that I might be living if I did keep saving for an early retirement. I’m just rearranging the timelines. You could almost say that I’m cheating.
I’ll soon be driving around the country, exploring new places, visiting national parks, catching up with old friends and extended family, and meeting some of my favorite bloggers in person. I will be living the dream. Well, I’ll at least be living my dream. For now. These are all things that a traditional job would never allow me to do, or at least would not allow to occur in some sort of epic consecutive format. These are things I probably wouldn’t have enjoyed as much if I retired for real in my 50’s or beyond. My physical health might not be as strong. Hell, my mental health might not be as strong.
While not early retired, I definitely do consider myself to be part of the greater FIRE community, and have considered myself to be a part of it long before I hit publish on the first post of the blog. I started reading personal financial blogs way back in 2009 at the age of 24. MyMoneyBlog, FreeMoneyFinance, and TheFinanceBuff were some of my frequent reads. FMF called it quit a few years back (and then quietly returned!)
WASTE MONEY NOW OR WASTE MONEY LATER?
I’m a big fan of Harry Sit over at The Finance Buff, who is a lot further along in his career than I am. Harry recently wrote an excellent post, entitled “Waste Money Now or Waste Money Later” which I think was the kick in the butt I needed to really accept that this whole gap year idea isn’t a completely stupid life decision. I’m not sure that I will ever really have the mindset where I think it’s okay to “waste money”, but Harry inspired me enough that I don’t feel like I need to wait until optimal financial circumstances to embark on a (temporary?) major lifestyle change….as plenty of others are also taking risks in less financially secure scenarios. Some before they even pay off their debt. Which is amazing. Also, I do have those 30,000 miles of warranty left on my automobile. So when you really think about it, since I made the financially unsavvy decision to buy extended warranty on my car in the first place, it would be completely illogical not to take maximum advantage of all that coverage. I still hope that nothing breaks. I’ve had a surprising amount of original warranty covered auto repairs for a Honda.
The most lucrative side hustle I’ve had by far is chasing bank, brokerage and credit card bonuses. Rewards checking accounts have also been useful in earlier years.
This month alone, I received $400 from Citibank for leaving $10k in a checking account for 3 months. I didn’t even need to do a direct deposit to trigger that bonus. I keep thinkign that I’ll invest in bonds as an extra backup to my emergency fund for my travels, but I keep seeing offers like this. $400 for leaving $10,000 for 90 days? Isn’t that like a 16% APY annualized? Can’t find that in any bond fund or rewards checking account. Most of these accounts let me close them online, but sometimes I have to call someone and that whole process usually takes less than 10 minutes. I keep telling myself that I’m going to simplify my deposit accounts, but then I keep finding financial institutions that want to pay me for a temporary relationship. I’ve rinsed and repeated the Chase new checking account bonus probably the last six consecutive years. Sometimes it’s $150 or $200…this year it was $300. Who knows why.
I recently saw that there is a TIAA direct opportunity, direct deposit $2500 in 90 days and receive $150. I’ve never used TIAA Direct before, so why not? I’ll re-route part of the direct deposit from my paycheck for the necessary pay periods until I hit the $2500, and then I’ll go back to having my entire paycheck go to my primary checking account. These days I spend way less time searching for these opportunities, because the folks over at DoctorOfCredit post them right away. A great resource if you can easily have your payroll changed temporarily to access the lucrative free cash.
There were many years where I took advantage of the BBVA Build My Compass Matching program. I also did the Santander extra20 program which was $10 per month for a certain amount of direct deposit and $10 per month for using their system for a couple of bill pays. Way back when, I bought dollar coins from the US Mint with a credit card and deposited the coins at the local bank to pay the credit card bill. Those were the golden days.
I love getting paid for things that I was going to do anyway or getting paid for things that requires minimal effort. Is it a little more complicated to transfer the funds around with multiple accounts? Sure, but I automated it with scheduled transfers. This is the main reason I have been 100% equities in recent years, because there were so many risk free high yield cash opportunities, that bonds just never made sense. There’s definitely less of these opportunities now. though.
Now that I know I want to buy a particular bond fond because I’ve probably milked most of these sorts of offers, I saw that Scottrade was giving away $100 to deposit $25k with them. They charge $17 to buy the mutual fund, so that’s a free $83 of interest for making an investment that I was probably going to make anyway at another brokerage. Paying attention to these things has easily added up to at least an extra $5,000 over the past 7 years
Savings accounts and checking accounts have paid next to nothing for as long as I can remember, but my Line 8A (taxable interest) on my 1040 the past several years looks a little something like this:
2016 will be even higher than 2015 was, but I suspect that 2017 and beyond will be next to nothing as I don’t plan to spend my free time chasing bank bonuses while I’m on the road, I won’t have a direct deposit to re-route, and I really don’t need that side hustle to continue. I’m not sure that I have ever really needed it, but why turn away free money that pays more than my hourly wage when considering the time commitment involved?
FIRE COMMANDMENTS – 0 FOR 5
In regards to the early retirement commandments that ONL came up with: well let’s just say that the Bogleheads and the Mustachians might not be fans because I’m not really following any of them.
Live by the 4% rule? Not even close. I think I’m about 10 years away from having my assets grow to a level where the 4% rule can sustain me, but that assumes that I don’t pursue (or am forced to take) some lesser-paying second career. I don’t believe I’m on the planet for the purpose of maximizing my money.
Index Funds or Individual dividend stocks? Neither. Well, I do have roughly 10% of my assets in the Vanguard REIT index but that’s actually the only index fund I currently own. I’ll get into my investment strategies at some point, but I don’t think it’s all that relevant. I don’t feel comfortable telling other people what to invest in. I only know what works for me. Find a strategy you can stick with for the long haul and not lose sleep over is the best investing advice that I can offer. I recall a Fidelity Investments article that reported the people with the best long term performance were the people who forgot that they had an account in the first place!
Maxed out 401(k)? There is no maxed out 401(k) or sizeable backdoor Roth opportunities to be had here. I was never allowed to put a whole lot into my 401(k) due to safe harbor rules. I have, however, maxed out my Roth IRA every year since I started my salaried career in 2010, including the 2009 contribution. I kick myself for not utilizing the Roth IRA during my lower earned income years in high school and college when I was likely in the 0% tax bracket. I also will make sure that I work long enough in 2017 to have my 2017 IRA contribution taken care of before I bail on the job. 🙂
Frugal ? Not at a Mustachian level. I feel like I’m frugal compared to the average SoCal Joe, but compared to the people who post on MrMoneyMustache? I mean, I’ve never tried to manufacture my own soap or make my own bread or ride a bike to work. I’m definitely a spendypants compared to those people. I’ve always bought whatever I wanted and saved the rest. I just happen to not want a lot. (Though I did drop $500 on financial conference/retreats in the past week! But I expect those will give me a lot of personal growth and hopefully build on some of these fun internet friendships).
I’m fortunate to not really enjoy the taste of alcohol, so socializing has never been a particularly expensive experience. On the flip side, most of my meals over the years as an independent adult have not been cooked by me. I have no shame in admitting that I enjoy my fair share of “screen entertainment”, particularly while on the upcoming nomadic adventure where in a lot of places I just won’t know anybody and I will probably have to entertain myself, at least part of the time. I love watching NHL and I love my superhero shows (The Flash, Arrow, Supergirl, Legends of Tomorrow) and though it’s frugal enough to watch these shows for free on Hulu on free wifi with headphones at a Starbucks, one of the reasons I want to stay in AirBNBs for this adventure is the low-cost availability of an actual mattress and electricity. I will definitely utilize the TV if one is available. It’s fun to compare the local news broadcasts in different parts of the country, too. Sometimes I feel like the Los Angeles media market is in it’s own little world.
And finally, with all my first world craziness, I certainly do not feel at a disadvantage because I’ve yet to be successful in seeking a like-minded life partner, or because I don’t have a lucrative slam dunk career path. Certainly wouldn’t turn down the life opportunity for the former though!
Readers, how are you taking the road less traveled on your financial journey?