Friday, September 28, 2012

Nuts and Bolts

Saying you want to be financially independent by forty is one thing.  Having a plan is another.

So, here is our plan:

  1. Pay off our home by January 1, 2014.  This is really where our family is different from the others on the block, and from some the other early-retirement/financial households.  The math almost always says to put your money into the market rather than to pay down low-interest, sometimes-but-not-always-deductible home debt.  It does in our case, too: we have a fixed 15 year mortgage at 4.25% and an index mutual fund will beat that most years.  But here is one area where our psyche wins over the spreadsheet.  I want the psychological freedom of having absolutely no debt.  To that end, we're making an extra payment to principle every month.  My gut says that once the home is paid off, my work performance may improve as I'd be willing to take more risks and to advocate interesting ideas, possibly making the psychological benefits financial ones, too.

Sunday, September 2, 2012

The Goal...

My goal is to reach financial independence by the time I am forty. I am thirty two years old today, leaving me eight years to accomplish what most people fail to do over a lifetime.  Or, I suppose, almost nine if I allow myself to get out of the rat race while I'm still forty.

Why am I doing this?

Because while money is really crumby at buying love or happiness, it's really good at buying time. When working for money is strictly optional, fifty to sixty hours of your week clear up immediately. With a home, basic utilities that turn on when I flip the switch, two cars and a moped, and enough cash to feed the family, I feel like I have enough money. I definitely don't have enough time. My life is a marathon sprint from one pressing need to another: to work, to the family, to church, to personal development, to recreation and back to go again. I want enough time that this series of sprints turns into a lazy, meandering walk.

 How am I doing this?