As the Wealthy Canadian pointed out in his comment to yesterday’s post: planning is only the first step to financial independence. The harder part is doing an analysis of your own spending.
In order to do this well I typically suggest people track every penny of their spending for a month. Only when you have detailed list of spending can you realize where you are bleeding cash, for example I know several people who buy a lunch every day. I just can’t imagine wasting that kind of money. After all my leftovers often smell and look better than what they are eating.
Yet in the end spending is about personal choices and determining what makes you really happy. The problem I find with most people around doing this is they often settle on a mediocre happiness rather than insisting that each dollar brings you the maximum happiness possible at that time. People watch hours of TV thinking it brings happiness. No, it brings a brief escape at best. So often cable is a waste of money. This is not to say in some cases it does bring happiness to some people, just not that many.
Another example is leaving lights on or having a dripping faucet. Both don’t bring any happiness and are just wasting money. Money is suppose to cover the essentials in your life: food, water, shelter and then from there provide for some select luxuries to increase your happiness. The issue with most people is we live such lives of excess we can’t strip things back to the basics and determine which luxuries actually make us happy. I would suggest that most people could benefit from a month of living poor by choice to determine what they really would miss. Cut your spending in half and see what happens, you might surprise yourself.
So here are some luxury items that bring me lots of happiness:
- High speed internet
- Good coffee beans
- 400+ thread count sheets and a firm pillow
- Widescreen LCD TV with surround sound – for movies
- Buying select books
The point of the above list is it works for me. It may not work for anyone else in the entire world. That doesn’t matter, what matters is finding your own list. Don’t assume anything is required until you know it is and best of luck with your own spending analysis.
This year my wife and I planted a small garden in the backyard. Harvest time has started and I just pulled out our first little row of carrots and I’m impressed. I had actually forgotten how good garden fresh carrots are compared to those you buy in the store. They are much sweeter and have a less woody texture. I swear I could eat carrots like this for a week or two straight and not get sick of them (Good thing too because I have so many I’m going to have to give some away).
I’m rather enjoying all this nearly free food, especially free food from other peoples gardens. So far I’m managed one large bag of crab apples which I turned into apple sauce and then I just got another bag of tomatoes which I’m planning on turning into bruschetta and tomato sauce. I’m still hoping to get a bit more apples before the start of the fall, but that depends on how nice one of my neighbours wants to be to me.
Planting a garden I’ve found is one of those things where yes you can save a bit of money by doing it without a lot of work. Frankly all we did was plant some seeds water once every couple of days when it doesn’t rain and weed the garden twice. I’m one of those lazy garden people where I basically plant it and eat what ever happens to grow.
Yet for me I found I got much more enjoyment of the food we get from the garden since I know exactly where it came from and you literally can’t beat the freshness. Not to mention there is the appreciation of the food itself. I find that seeing my labour turn into something that I get to enjoy creates an extra ‘taste’ to the food that can’t be matched: satisfaction really does taste sweet.
So if you have never tried a garden, I would suggest giving a few of your favorite herbs a try to start in a pot or two. This is how I got into it and now my basil plants gave me so many leaves I had to make some fresh pesto to use them all.
You shouldn’t read this post if you can answer yes to the following question. If your work stopped paying you tomorrow would you still go into work? Now be honest. If answered, no, then you are a likely candidate for early retirement. As far as I’m concerned that is all I need to know.
There could be other reasons, such as wanting more time with your family, starting a business or even an artistic career, but really what every is looking for is freedom. The ability do want you want when you want without having to worry about getting a pay cheque. To me this is the true meaning of early retirement or financial independence.
I dislike the common wisdom that we need to work until we are 65. Why would I want to waste even a single extra second on something as meaningless to my personal happiness as work? 55 sounds a bit better, but let’s face it. We really want to stop working as soon as possible. So this is what led me to dream about stopping work at 45.
Will it be hard to retire early? Yes, it will take some planning and effort to pull it off, but let’s face it spending an extra 20 years at a job you dislike could be a hell of a lot worse for your physical and not to mention mental health. In that sense, your family and not to mention the health care system will love you if you retire early. You will likely experience some interesting symptoms once you achieve your goal of early retirement. Common symptoms include increased laughter, more energy, increased thoughtfulness and exponential increases to your overall happiness.
Thanks to everyone for coming along on this journey. I value each comment and criticism. Your stories bring more depth to each post and teach me things I didn’t even know anything about some days.