What’s Up

So… radio silence for two weeks ain’t good. I succumbed to a series of excuses last week… my back was very sore sitting down, and not in a good way, but in a “if I put pressure on this, who knows what’ll happen?” kind of way. This was the excuse I needed to stop lifting for a few days, and then I just stopped. I’ll get a fresh start after my vacation, when I hope I can get in a rhythm through autumn and winter.

I’ve been extremely busy at work. The past week… I’ve worked 13+ hour days. Yesterday I was working straight through from 8am through 7pm – busy enough doing support work that I didn’t even have time to eat. And then another few hours just doing some lighter stuff. Today I worked from 8am through 11pm, eating only because some people nearby ordered food. It’s insane, but that’s how busy I am – because I’m working on a lot of things, because I had to do support (there’s a rota for our team), and finally because I was preparing to hand off some stuff for my vacation.

Which is the final thing that’s going on. I’ll be away for two weeks, hitting first Iceland, then Amsterdam, Köln, Mainz, München. It only sank in that I really was traveling a few days ago, when some maps I ordered arrived. And then tonight, doing some packing – I’ll mostly be winging it; I have some travel guides on my kindle, a few maps, a few highlights – but mostly I’ll just wander around and see what’s going on. I leave tomorrow afternoon, which gives me some time to prepare and get things in order after the busy week.

One of the cool things about travel is the gadgets, and living out of a bag. Lightweight travel is my favorite – just a medium-sized backpack, a change of clothes, a few electronic devices, a book, toiletries, and I’m good to go. The feeling of self-sufficiency is great.

Climbing a Ladder or Hamster on a Wheel?

Some nights, I lean back in my leather chair, swirl a glass of aged whiskey and smoke a fine cigar, and I ponder what it means to be a human being.

Ok, not really. I don’t have a leather chair, and I don’t like whiskey, and I rarely smoke cigars (and when I do, they’re never good cigars). But I do sometimes think about my maturation as a human being (or my lack thereof). Not to put too fine a point on it, but it can leave me doubting whether I’m really making any progress at all. Is my life: the skills and perspective I’m acquiring, a ladder that I’m climbing? Or am I just a hamster stuck on a wheel, stuck in place no matter how fast I run?

This question can be reduced further: Can people change, or are do they remain fundamentally the same? Yikes! And here you thought this wouldn’t be an introspective, philosophical post.

Problem is, I can see evidence both of progress and stagnation in my life.

In day-to-day existence, I feel like every moment I am superior to who I was the moment before (to borrow from Office Space, each day you see me, that’s on the most mature day of my life). Sure, there are times when my spirit is low, or I’m sick or exhausted, or under stress, but basically my default stance is that each day I become more capable. A prejudice? Sure! But I have evidence.

When I look at the code I wrote a year ago, I can clearly see ways it could be improved. I see clumsy statements that I could recompose effortlessly and elegantly today. When I look at my actions six months or a year ago, they are hopelessly naive. I wonder “Why did I take this so seriously?” or “Did I really get angry about something so stupid?” Or I think “Wow, I certainly wasn’t reading the signals right there. I misinterpreted everything!” When I re-read an email I sent two months ago, I’m embarrassed by how silly I was.

You get the picture.

But: I suspect I’m not seeing progress, just the clarity granted by distance. When I re-read something I wrote a few days ago, it usually looks foolish. But how much could I change in a couple of days?

Last year I was sorting through old scrapbooks and artifacts. I have journals I was forced to write in kindergarten (you know the kind, crayoned construction paper cover clumsily stapled over paper, inch-high child-handwriting inside). I perused ‘diaries’ that I haltingly kept when I was eight or nine.

Fundamentally, for all intents and purposes, my conception of the world was the same then as it is now. If I (shudder) re-read what I wrote when I was a young teenager, it sounds histrionic and sometimes hilariously bleak. But the questions I struggled to answer then, I still struggle with today.

With some skills, a progression is readily apparent. If I’m playing chess or starcraft, then I can see my win-loss record, or the rating of my opponent. If I’m solving a Rubik’s Cube, I can time myself. If I’m coding, it’s obvious whether my program is correct, if it’s fast, if it’s intuitive, if it has a good test suite. If I’m playing an instrument, I can become more comfortable and play fewer jarring notes. But not all skills may be judged so objectively. Writing is one example. Thinking is another.

I don’t have any answers here. I don’t know whether it’s possible to really change the most important things in your life. I suspect it is. But I also think the default assumption of progress should be examined more closely.

Laziness is the Key to Success

Yes, I know what you’re thinking: “Whoa! That’s a provocative title,” but it’s true. Being lazy can be an awesome character trait.

I would hazard a guess and say that laziness has helped keep my budget sane, and also has helped keep me relatively healthy even with a stressful, time-consuming job. Although venerating laziness is definitely contrarian, there’s actually a whole magazine devoted to being lazy.

There’s a great exchange in Office Space which illustrates the power of doing nothing:

Peter: What would you do if you had a million dollars?
Lawrence: I’ll tell you what I’d do, man: two chicks at the same time, man.
Peter: That’s it? If you had a million dollars, you’d do two chicks at the same time?
Lawrence: Damn straight. I always wanted to do that, man. And I think if I were a millionaire I could hook that up, too; ’cause chicks dig dudes with money.
Peter: Well, not all chicks.
Lawrence: Well, the type of chicks that’d double up on a dude like me do.
Peter: Good point.
Lawrence: Well, what about you now? What would you do?
Peter: Besides two chicks at the same time?
Lawrence: Well, yeah.
Peter: Nothing.
Lawrence: Nothing, huh?
Peter: I would relax… I would sit on my ass all day… I would do nothing.
Lawrence: Well, you don’t need a million dollars to do nothing, man. Take a look at my cousin: he’s broke, don’t do shit.

When it comes to personal finance, I’m just too lazy to want to spend money. It’s funny, but it’s true. When I have to visit a mall, I just want to go to sleep. The same goes for a big department store. It’s just exhausting for me to go out and spend money. I’d rather relax at home or do something that interests me.

If your lifestyle doesn’t revolve around going to the movie theater, shopping in the mall, and buying expensive experiences, it’s a lot easier to be on firm financial footing. If you don’t have friends who are profligate spenders and prefer something a little quieter, you will save money compared to having friends that just want to drink, play cards, or go to expensive concerts.

The same goes for food. I do everything I can to abstain from buying junk food when I’m shopping. Many weekends I’ll only eat a little bit because I’m too lazy to want to do dishes and prepare food! These are the times that I’m thankful I’m so lazy.

You might be surprised to find out that there’s even a diet based on laziness! It’s call the Warrior Diet, and the idea is that you just eat a single meal each day. Supposedly this is scientifically determined to be good for you. I don’t really trust any nutritional science at this point. But I don’t think there’s anything wrong with just eating once a day.

When I eat at work, I’ll usually just prepare oatmeal. I can pick up a canister at the supermarket on the way to work, and it will last me about 2 weeks. Preparing breakfast and lunch is as easy as going to the coffee machine and pressing the hot water button. That might sound extreme, but the past few weeks, I’ve gotten even lazier than that – and sometimes I won’t even eat lunch at work. It’s great: I get to be lazy, don’t need to prepare as much, and I actually have *more* energy than when I have a big lunch.

Isn’t laziness wonderful?

Concrete Goals

The ultimate goal that unites the authors of this blog is early retirement. In order achieve this goal, it is first necessary to define smaller, concrete goals that encompass everything you want from your early escape. You can’t just say “I want to retire early” and expect it to happen if you don’t have certain thresholds to chart progress.

I have difficulty defining such goals, as I am especially prone to changing my mind and trying to keep my options open (I’m an INTP :)). I have thought long and hard about what I want/need in retirement and these are the loose goals I have come up with:

– A tiny house and a place to park it permanently. I want this to be located in an area where I can ride my bike or walk everywhere I need to go. (I am in love with these salvaged material Tiny Texas Houses: http://tinytexashouses.com/) I like the idea of not having monthly rent and having very low utility bills. However, it seems difficult to find a place to install your tiny house. The land I’ve looked at in surrounding areas is often more than the cost of the tiny house itself. Does anyone have suggestions for parking a tiny house? My only idea so far is to work out a deal with a family member that has a house with surrounding land. I am hesitant to rent land because that would defeat the point of buying the house (to eliminate a rent payment).

* I need to research this more and determine the amount of money I will need for the house, land, and installation – then I will have a more clear picture of how much I will save in addition to my retirement budget for my tiny house.

– Around $200,000 in investments. Hoping to pull in around $6,000/year from dividend generating portion. The amount I need may be lower if I do indeed purchase a tiny house.

* I need to estimate the cost of health insurance, food, utilities, clothing, tiny house maintenance, etc, so that I can decide on a more defined goal amount.

These are the things I previously thought I wanted:

– A smart car. I still love smart cars, but I cannot justify spending $11-14k on a new one or even $10k on a used one when that is such a large portion of my retirement goal amount. Also, the costs associated with owning a car are a turn off. I recently purchased a vintage Schwinn Collegiate and I would love for it to be my main source of transportation.

– A normal sized house (ha). I value minimalism and owning anything over 1,000 square feet would probably lead to acquiring more possessions needlessly. Also, I don’t want to have a mortgage or spend my entire retirement budget on a house.

While I continue to research the costs associated with my goals, I will keep saving money every month and split it between cash and stocks/funds.

Readers, does anyone else have trouble making concrete early retirement goals? It seems like it would be easier to just save up for retirement through investments, but my desire for a tiny house won’t go away 🙂

The first step in my early retirement journey.

<This is a popular post on the blog… just note that it’s by a contributor, not the main author of SkillsFIRE>

I decided I wanted to retire early back in January 2011. Most retirement books and blogs focus on when to take social security or how to save up a million dollars over many years. Personal finance books told me to save 10% (or even 15% if you’re feeling wild). I wasn’t seeing any results from the traditional advice.

The first step:
I was a typical young professional when I started: cell phone with data plan ($100/month), brand new car with huge car loan ($400/month), high rent, a long commute…you get the picture. I calculated how much discretionary income I had every month after paying my bills and it was a measly sum. I was making good money, but I still couldn’t manage to save more than a couple 100 dollars every month. I was frustrated – I knew that I couldn’t achieve my goals at the rate I was going.

I decided to lower or eliminate my expenses everywhere I could. It was a very tough process. I was always tired after work and had no interest in looking for a cheaper apartment or selling my car, but it was a vital first step to getting on the right track for early retirement.

Since I was lacking in motivation, I started with the small expenses:

– Cell phone: I was stuck in a two year contract with a big name cell phone provider. I logged on to their website and read my phone agreement. It turned out that the early termination fee was pro-rated, so it was much cheaper than I expected to get out of the contract. I then calculated how much I would be saving every year by purchasing a prepaid phone. I saved hundreds of dollars over the term of the contract by paying the ETF and buying a prepaid phone. My main priority when reviewing expenses was to eliminate as many recurring expenses as possible. By canceling my cell phone plan and switching to tracfone, I no longer had a monthly payment. I now have a separate savings account at my bank where I keep windfalls (credit card rewards, refunds, etc) to purchase more minutes when I run out. This feels much better to me than paying $100/month.

This is the phone I have: http://www.amazon.com/LG-LG500G-Tracfone-Double-Minutes/dp/B004ZL9IZI
It is widely available (I picked mine up at Target), only $17, and is technically a smart phone. I can access the internet at 5 cents/minute if I really need to check my email. It also has a camera and mp3 player. I don’t feel deprived at all without my apps or whatever else makes smart phones so exciting.

– Food/Drink. This was a huge area of savings for me. I started bringing lunch to work with me. When coworkers asked if I wanted to go out, I told them I was trying to save money. I would play a “game” with myself and try to eat every single thing I had in the pantry and fridge before going shopping again. This is a good way to get rid of stuff that’s still good, but you haven’t used in the months since you bought it.

Once I had lowered the small expenses as much as I could, I began to see savings and feel the reward of my efforts. This was a good time for me to think about the big expenses and re-think necessities.

– Commute. I moved from the city I went to college in (which was 1 and 1/2 hrs away in traffic) to a city much closer to my work. This cut my commute down to ten minutes, which meant less spending on gas, insurance, and maintenance.

– Car. I sold my new car and bought an old Toyota Corolla with a large down payment. Sure, I didn’t look nearly as cool driving around in it, but this meant that hundreds of dollars were freed up every month to save.

– Student Loans. I graduated with relatively little student loan debt, but it was always a looming black cloud in my financial world. I began aggressively paying off the balance.

I eventually made a pretty extreme move in order to save money. I was living in an expensive part of California (Silicon Valley) and the cost of living seemed atrocious. I was making plenty of money, but I couldn’t keep nearly as much as I wanted to every month. My solution? I moved to Austin, TX. The cost of living was a whopping 41% cheaper here. Granted, I make less money now, but I am actually able to save much more than when I was making over $10k more every year. I am able to live in half of a 2bd apartment for $400/month, take public transit to work (this has eliminated need for a car and all the expenses associated with owning one), and buy cheaper groceries. Also, there is a lot of free entertainment (it’s the live music capital of the world) and they have great community resources, like an epic library and numerous well kept parks and trails.

I’m not suggesting everyone should move across the country to save money. Just take a hard look at expenses. Can you live without a car? Can you move closer to work and bike? Can you rent a room in a house instead of having your own apartment?

Again, this is a difficult process. I basically turned my life upside down when I decided I wanted out of the rat race, but I feel much better about life now. I don’t worry about being able to meet commitments if I were to lose my job and I am able to sock away more than I spend every month. It was worth it.

Accountability

Ok! You’re all set to change your habits or learn something new, but it requires consistent practice. You need dedication and pure raw willpower, right? Yeah, but even better is accountability.

There are a lot of ways to make yourself accountable that you’ll usually read about right around New Years, when people make resolutions and break them a week later. These include telling your friends or family, giving them money and only getting it back when you’ve accomplished something, or starting up a blog (ok – a little bit meta, but it is a good idea).

These are suggestions predicated on the assumption that you have friends or family you’d feel comfortable sharing your goals with, or that you want to publicly share your progress (even if no one ever reads it, which is highly likely).

But what if you’re introverted? Then, you want to keep yourself accountable… to yourself. After all, as an introvert I’ve found that I’m my own best confidante. If you’re introverted, or just circumspect about publicly sharing your self-improvement goals, you may want to check out a site called 750 words. The idea is simple: write 750 words per day, every day. You receive a little badge on the site for various achievements: 3 days consecutively, 10 days, 50 days, etc. The interface itself is very clean: just an empty white input form that tracks how many words you’ve written, and your history so far for the month. It saves your words and does some cute analytics at the end to see if you were ‘happy’ or ‘sad,’ if your update was ‘PG,’ ‘PG-13’ or ‘R’, etc.

Of course, you don’t need a website, you could also track this in word and keep a calendar that shows your consecutive days with updates. But it’s a useful interface.

I’ve found I’m dramatically more likely to keep my resolutions, keep practicing, etc, when I also write the journal. Because you find it’s difficult to write 750 words every single day. Inevitably you gravitate to what’s on your mind, what you did or should have done during the day, and so forth.

It drains you to write “I spent over my budget today” or “I didn’t practice guitar today, like I should have” – you *dread* getting to that point and admitting defeat. So you get your stuff done before you update.

Daily words are a useful tool that can help ‘lock in’ other behavioral changes. Experiment: maybe a daily journal with a few lines is enough for you, or 500 words, or maybe you’re ambitious and want to write 1000.