Once upon a time…

Once upon a time there was a man who thought having to work for a living sounded too limiting for his dreams.  So he decided to continue to live a frugal life and work towards early retirement.  That way his work would be only for fun and extra cash rather than paying bills.  So he began to save a lot of his income and pay down his mortgage aggressively.  He had many challenges like the great children who consume all cookies in their path or the seductive call of the electronics stores but he kept to his path (yet still got off once in a while to smell the roses) and hoped that things would work out to get to freedom 45.

That story is a little over a 10o words.  Simple, short and neat.  So why tell it?  Just to point out perhaps that things don’t need to be complicated even if it is your life story.

In our desire to get to early retirement some people get sucked into all sorts of odd things like borrowing money to invest, researching investment strategies and questioning their own plan at least four times a week if not more.  We often in a desire to get to our goal will try anything to either save money, make money or invest more money.  Which in the beginning is fine as you often have areas where you can find some significant savings fairly easily (eg: increase your insurance deductible, find lower fee investments, and control your reoccurring spending).

The ironic thing is this: after you have all the big things done the rest will have a minor impact on your plans.  It really doesn’t matter all the much to take out a zero interest credit card balance and invest it in a high interest account for six months.  It’s just extra noise and complication that doesn’t need to exist. I would suggest that the extra complication is actually a hindrance to your life since your spending your time looking for dimes when you should be on the look out for dollars.

Controlling your early retirement passion is critical to actually getting to early retirement otherwise you might find yourself adrift in a sea of options because you won’t focus on what really matters the most to your plan.  If you spend too much time on investing you might end up with too much risk, or if you spend too much time on thinking about the future you will forget to live for today and be unhappy.

Perhaps more than anything, it’s finding a way to use that passion we have for early retirement into other ventures.  Passion is a strange thing the drives us to do odd things, but if you control its focus you can accomplish some fairly amazing items like starting a small business or getting very good at your hobby.  It won’t be easy, but you might just make more dollars than you would have ever saved in dimes.

Find a balance to your life and keeping things simple will help to keep you sane as you work to your goal.  After all we all want to get to they lived happily ever after in our story.

So did you find yourself getting distracted on your way? How do you keep things simple?

2 thoughts on “Once upon a time…”

  1. As the pieces were falling into place leading up to my early retirement in 2008, the two biggest ones I had to get nailed down in 2007-2008 were (1) finding an affordable individual health insurance policy (which by 2011 will have seen its premium rise by 50% since I first bought into it in 2009), (2) finding a bond fund I could invest the large proceeds of the company stock I would sell back to the company after I would leave the company, and (3) developing an early retirement budget to make sure I could adequately cover my expenses with investment income, at least until I turned 60 and could tap into my IRA, the first of several “reinforcements” available to me in my 60s.

    I had to do some research on line to find the HI policy but there are websites which do most of that work. I also checked out the insurance company I have my auto and homeowners policy but they don’t currently sell HI in my state (beyond a hospital indemnity quote).

    I did find a bond fund which offered a high rate of return and was not a junk bond fund although it did include bonds which were slightly below investment grade. I tracked this fund for about 2 years and obtained relevant data for my research since its inception in late 2005.

    The time I spent researching and analyzing this fund was crucial, as was planning out an early retirement budget. I don’t sweat the small, everyday stuff, but I do pay close attention to the big items such as HI and the dividends which come from that big bond fund.

    One more item I now have to pay closer attention to is paying estimated income taxes, making sure I can be in a “safe harbor” to avoid penalties, and to make sure I can take advantage of any tax deduction related to the types of expenses and income which dominate my budget.

  2. Well that is basically my story in a nutshell.
    Keeping things simple was easy for me because
    I’m not that smart of a guy.
    It probably kept me from shooting myself in the
    foot too often.
    With me it is very much a lifestyle thing,I focus
    on what I doing instead of trying to reach some goal.
    The results are just the product of how I do things.

    I agree that life needs to be lived.
    You don’t want look back after 10 year of struggling
    to get to ER and say that that was my decade of discontent….there needs to be balance

    Good Post Tim.

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