This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
Last Thursday at about 11 a.m., I started trying to talk myself out of going to the gym. This is about a bi-weekly event and there are times that I actually just don’t bother going due to my persuasive arguments (It’s not fun; I’ll feel sore after; I already worked out twice this week, is a third time really going to do anything? And more). I ended up going and getting it done, but I was thinking that this kind of thinking could easily be applied to my personal finance plans.
It would be so easy to stop using around 75% of my paycheque to pay off my mortgage and ensure a healthy level of savings. It would be easy to have a more conventional financial plan where I would retire when I’m “supposed” to, which if you listen to the news is somewhere around age 70-75 these days (the experts are very worried people will outlive their investments) rather than carrying on with my current plan.
I see a couple of problems with this for me:
1) I would have to work an extra 20 or 30 years
I don’t want to work any longer than I have to, giving up more than one-third of my day to earn money for “stuff”. I was reading the book “Beatrice and Virgil” by Yann Martel a little while ago and the quote “Your days on this earth are counted, you might as well make the best of it” really hit home. For some people, making the best of their days includes working 40-60 hours a week at a job. For me, I have other things I would rather be doing, which do not include waking up 5 days a week to give up most of my waking hours.
2) I don’t know what I would spend the extra money on
I know a few people who make significantly more money than my wife and I and they seem to find a way to spend it, either on big houses, expensive hobbies, vacations or any number of things. For me, I don’t really get a lot of enjoyment out of spending most of my paycheque on items that don’t make more money (or at least the possibility of it) or reduce the money that I owe. I try to ensure that, for the most part, the money I make from work is spent as efficiently as possible, hopefully meaning I work as short a period as I can.
The bottom line is however, I’m sure I would find a way to spend the money (somehow) – I did it for a few years before I put together a financial plan and most people continue to essentially break even (or go into debt) month after month.
I think that once I realized that there is a better way to do things financially and that I could be doing exactly what I wanted all the time (retiring), rather than working at the office during the best hours of the day my goals changed significantly.
How do you keep yourself from “falling off the wagon”, or staying the course of your goals?