Why the FI Movement Sounds like a Multi-Level Marketing Scheme

Who wants to live a monotonous life void of fun and adventure? Who wants to feel like they wasted their time on this earth working in a cavernous, thirty or forty year career? Um, I’m pretty sure no one.

We can all be sold on a better life and there are plenty of people touting supposedly proven methods to help get us there.

A few months back I read the following message from an acquaintance trying to drum up business for her latest MLM scheme:

If you have had even an inkling that this might be a way for you to create options in your life, I’m telling you, NOW IS THE TIME! This company is on FIRE.

Have you received similar solicitations?

Yes these are the words plastered by a so-called friend urging Facebook users to join her Rodan Fields sales team, but you know when I read that Facebook update I couldn’t shake the thought that those words sounded eerily familiar.

Take out the word company and you’ll find similar mantras on hundreds if not thousands of FI websites and blogs out there. Turn up the volume and listen to any FI or FIRE podcast and you’ll hear the same. The quote above even includes the word FIRE.

Multi-level marketing companies use phrases like these:

  • Live your best life.
  • Find your purpose.
  • Travel the world.
  • Quit the rat race once and for all

But so do FI writers and podcasters.

I listen to financial podcasts while working out on the elliptical machine at my local gym. I spend forty-five minutes pumping my arms and legs back and forth in a strange, running-type motion all the while listening to voices who promise me a better life. The life most, if not all, of us yearn for.

With earphones plugged into my ears I cannot hear anything going on in the real world around me, yet every once in awhile my own voice startles me. Out of nowhere I’ll hear myself say, “That’s so true,” “Oh yeah, ” or “Definitely.” Its hard not to agree with the thoughts and feelings of those marching toward financial independence beside me.

While those MLM phrases may sound the same as those used in the FI community I can assure you they are reached by very different means. To reach FI you don’t need to hawk products on unsuspecting acquaintances.

In fact, I would argue that you aren’t living your best life if you are asking your friends and family to spend money on products they don’t need or cannot afford. If you want to live your best life, find your purpose and quit the rat race you don’t need to be part of a multi-level marketing scheme that depends on putting other people into debt.

Yes the FI movement will help you dream big dreams, but they’ll do so by teaching you that money is not the end goal. You’ll hear bloggers say money should be used to free your time for purpose and passion.

While MLM asks you to promote consumerism FI will teach you to spend less and save more. MLM asks you to pray on desperate friends, while FI encourages you to find like-minded individuals searching for real relationships and camaraderie.

Naysayers will tell me the FI community is all about money. They’ll say you cannot turn a blind eye to the fact that proponents of FI also earn a lot of money by enticing others to read their blogs, listen to their podcasts or pay to see them speak live at conferences.

So one group is selling ideas and the other is selling cosmetics, right?

Well first I would argue that you aren’t required to pay for any FI services. You don’t need to click on any ads, download any special software, pay for podcasts or buy any books. All information related to FI is available entirely for free on the Internet. Feel free to be wary of websites asking you to pay for online courses or media. You don’t need it. Pick up that book from the library or simply read a synopsis from blogs written by those authors.

We all want options in life. We all want to find our purpose. We all desire something better. It’s human nature to reach for more.

The excitement that invites others to join multi-level marketing schemes is similar to the enthusiasm you feel when you learn about FI.

It’s like being asleep and waking from a dream. You envision the movie Groundhog Day. You picture waking up to the same series of events day after day and then someone says it doesn’t have to be that way. It can be different. And you cannot wait to join the movement.

But before you begin your journey think carefully about how you race to achieve your goals. Don’t burn bridges or risk friendships in an attempt to make money.

It may sound hard to believe but financial independence can be accomplished and you don’t have to buy or sell anything to get there. If fact the less you buy the quicker you’ll achieve your goal.

You may have to dig through the podcasts and blogs that are touting FI solely to make a buck, but when you do you’ll find a community ready to share their stories for free.

Financial Lessons for Kids: Selling Unwanted Toys on eBay

My oldest son has always been a builder. He’s the type of kid that wandered over to the giant wooden blocks in preschool and never walked away. While all of the other children eventually left to play dress up or craft colorful art projects my son stayed firmly planted on the rainbow carpet which muffled the sound of blocks crashing to the floor.

At home building has always been his favorite pastime. It began with colorful alphabet blocks, then moved on to elaborate wooden train configurations and continued with roads, bridges and ramps for his matchbox cars.

At the age of three my oldest was introduced to Legos for the first time. My husband bought him a tiny truck and matching dune buggy set. Although he’d never seen Lego instructions before he instinctively figured out how to search for pieces and follow the diagrams to put everything together. (I guess that’s why Legos have continued to wow children for generations. They are so easy and fun to build.)

For his sixth birthday my son requested a very special Lego. You may not believe what I am about to write, but I promise I am not making this up. He asked for the Lego Creator Expert Brick Bank.

That’s right, above all of the other Lego options, including fast cars, robots, construction vehicles and space shuttles my son wanted his very own Lego bank. We discuss money a lot in our house and this kid of mine wanted a Lego bank along with the little green Lego bricks that look like $100 bills.

There are smaller Lego banks available but he specifically requested the Creator Expert version recommended for kids 16 and up. In total it has 2,380 pieces and retails for over $150.

Now my in-laws love to spoil my children so my mother-in-law heard my son’s request and jumped to the ready. She asked him multiple times if that was the gift he most coveted and when it seems he couldn’t be swayed she ordered one off Amazon.

With a small amount of adult guidance, (there are a ridiculous number of pieces to sort through), he completed the bank construction in three days. As crazy as it sounds, not long after receiving the gift from his grandmother, another Lego Creator Expert bank was gifted to him.

My son was thrilled for the opportunity to build again, but alas after three days of consistent building he put a pause on Legos for a bit and that $150 box of Legos sat idly in his closet.

Over time he received other Legos, which he voraciously opened and built, but that Lego bank never made its way out of the box. One day while purging unwanted possessions I asked him about it.

I presented him with the following options:

  1. Build the Lego
  2. Keep the Lego in storage and build it at a future point in time
  3. Sell the Lego and put all proceeds from the sale into his bank account

Well my son is just like me, so rather than answering the question he replied with a series of questions.

  • Did I think the Lego would sell?
  • Where could we sell it?
  • How much could we sell it for?

And so we set off to investigate. The going price on eBay is right around $205. I explained that some sell for more and some sell for less, but $205 is the average. I explained that once you place the item up for auction you can never be certain what will happen, so you want to make certain you choose a listing price wisely.

We also talked about associated fees. We would have to pay to ship the item, eBay would take a 10% cut and PayPal would also charge us a fee.

If we sold the Legos for an even $200, which included the cost of shipping, he would net $164.99.

  • $200 (price + shipping) – $20 (eBay fee) – $6.10 (PayPal fee) = $164.99.

Now this kid knows that it can take him nearly two days to earn $80 from his summer lemonade stand. That includes baking cookies for hours the day before we set up the stand and sitting outside waiting for customers for six to eight hours on the day of the event. The idea of selling one box of Legos without any of that work nearly sent him into a tizzy.

He immediately asked if we had other toys to sell. I reminded him that most toys are worthless once they are played with and that this one was valuable because the Legos were still sealed inside the box.

After we went through every detail I could possibly think of he decided he wanted to try to sell his unwanted toy through eBay.

I could have boxed up the Legos and sold them myself. I could have left them in his closet forever, (heck they may have doubled in price in another ten years), or I can hand over the decisions to my seven year old son. I can teach him about money in a tangible way and hope that these lessons will stick well into adulthood.

What Is Bridge Financing? Could It Be For You?

If you need a bit of money immediately to tide you over until more financing can be found, then a bridging loan might be for you. In this article, we’re going to look at bridge financing along with how to apply for one.

What is bridge financing?

Bridge loans help those who may need to cover costs in between large financial transactions. For example, let’s say you need to buy a house before you sell your current one. You know that you will receive money once your house sells, but in the mean time you don’t have enough money to cover all of your costs. You don’t need to borrow money for the next thirty years to cover this gap, you just need a short influx of cash that can help you cover costs for a short period of time.

Bridge loans help you jump over that gap in time, by providing you with a short term loan. Once your house sells you will have the money to pay off this new found debt.

These bridge finance options are normally only for short term fund-raising situations. They are often utilized by large businesses and institutions but could also be for small businesses or even individuals.

Bridge financing often helps homeowners who want to renovate a home in preparation for selling or refinancing. Once the renovations are finished and the house is sold you’ll have plenty of cash available, but in the mean time you need just a little money to help finish your housing upgrades.

Sometimes businesses apply for bridge loans when they need money to cover the day-to-day costs of running a business. Business owners may know a contract is about to finalized, but they can’t wait for those big checks to arrive in the mail. Instead they use a bridge loan to fill the gap between when the work is completed and when they will be paid.

What are the drawbacks of bridging loans?

While bridge financing could be a great option for you or your business, they aren’t for everyone. There are actually a few negatives associated with taking out a bridging loan, so let’s have a look at them:

First, they can be expensive. You might be able to find better financing options elsewhere that don’t have lower interest rates. Many bridging loan companies will rely on people who are desperate and therefore willing to pay a higher rate. So if you can find finance elsewhere, it might be a better option to do that.

You will also increase your debt. While bridge loans can be a great short-term option, you need to be aware that your overall debt levels will increase. This could put more pressure on your finances and the situation as a whole. Make sure that you can afford to take on more debt and that it’s the right choice for you.

What are the advantages of bridge financing?

The biggest advantage of a bridging loan is that it gives you the money and time to complete important projects or get to a point where you can release additional financing. This gives you a competitive advantage over those in your industry who can’t do the same. They can also be a more convenient fund-raising option than many alternatives and could provide you with the money you need quickly and easily.

How to apply for bridge financing

It’s relatively easy to apply for a bridging loan, and there are a number of places that’ll help you get a quick quote online. Simply shop around for the best deal and make sure you’ve read all the small print comprehensively.

Teaching Children to Embrace Minimalism

A fellow personal finance blogger, who I deeply respect and admire, recently asked me how I help my children embrace the concept of owning less. She specifically asked how I talk to my children about “not needing everything that everyone else has just because you don’t have it.” 

I thought long and hard about this question and decided to send her a list of the steps I take to help my children embrace minimalism and reject consumerism.

I desperately want my children to think carefully about their buying decisions. I hope this will prevent them from turning into adults who mindlessly spend their money. I want them to understand that buying one thing today might mean not buying something tomorrow. I also want them to understand that when searching for joy in life you often don’t have to spend any money at all.

I spent much of my lifetime thinking about frugality in terms of lacking and deprivation where I should have thought about it more in terms of wise decision making. Rather than thinking I can’t afford something I now see it as I’m choosing not to buy it. I’m trying to teach my children to focus on the same.

So how do I teach my children to value what they have rather than constantly dreaming of wanting more?

First, I talk to my children a lot about the value of an item they want to buy. Rather than starting the conversation from a monetary perspective I begin by talking about joy. For example, do you feel joyful, or do you think you will feel joyful, when you play with this toy?

How exactly does this work? Well I start with toys my kids already own. My children and I review their toy stash every month. We look at all of the toys on the shelf and I ask; “Are you playing with this?” “When was the last time you played with it?” and “How did you play with it?”

The last question focuses on whether or not the toy can be played with in multiple ways. For example, blocks can be used to build a bank, an airport or a track for cars. Many multi-dimensional toys lead to greater creativity and greater joy.

I ask “Is this toy fun to play with?” and/or “Does your brother like to play this with you?” We may talk in detail about how the kids played with a certain toy and I make certain to point out how those train tracks were super fun to build in new and exciting ways, but that remote control car was boring after a few trips around the basement.

I hope that these conversations will help my children make better buying decisions in the future.

After the initial toy walk-through we weed out the toys my children don’t play with. My children sort the toys themselves, but we review each item before boxing them or taking them away. After loading the car, (I usually ask my oldest to help me with this task), my children drive to the donation center with me so they can see their toys being given away.

Sometimes I take unwanted toys to a consignment shop. I talk to my seven year old explicitly about how much we paid for each toy and what we could sell it for now. Most of the time his toys are worthless, but I want him to recognize that a grandparent, aunt or uncle may have paid $20 for a toy that we are now giving away. If it sells at the consignment store we talk about how much it sold for and he figures out the difference between what we paid and how much we recouped. He is aware that we never sell a toy for more than we bought it for.

Then we talk about better ways we could spend our money in the future to prevent wasting it or things we could do as a family that don’t cost any money at all.

We have similar conversations when we return home from a friends house. If we come home and my kids say “I really want ‘x'” then we talk about how often they would play with that toy and whether or not they have a similar toy that would work just as well. We also discuss imaginative play and try to figure out how we can invent our own version of that toy or play an imaginary game that would produce the same feeling of joy they felt at a friend’s house.

I often redirect conversations to free play. If you ask my children about their favorite games they’ll mention playing lava, which involves jumping on cushions and pillows to avoid touching the ground. Or they’ll talk about how much more fun it is to build a track out of bricks rather than using a prebuilt Thomas the Train track that only goes in one direction.

I want them to learn how to use their imaginations to prevent boredom rather than depending on a room full of toys.

Ultimately we play in ways that do not require much stuff. My children are happy to shoot baskets, play pirates or build new creations with the same set of blocks we’ve owned for years. I often point out the fun we had with very little supplies.

My children are by no means minimalists. Their toy shelves are overflowing with gifts from well meaning family members, but each time we open the conversation they begin to think a little more clearly about owning stuff that doesn’t bring them joy. Each time a toy is offloaded I want them to think about the clutter of that object as well as the price we paid to own it.

Over time I hope they learn that abundant joy is much more valuable than abundant stuff! In fact, I want them to understand that owning less is often the key to happiness.

Don’t Let Others Discount Your Success

In social circles I am often hesitant to discuss the fact that I own a beach house. I feel like the dynamic changes once people find out I own a vacation rental home, so I usually keep this information to myself. (This was certainly more true in my late twenties. It’s a little less so now that I have reached my fourth decade of life.)

When people find out about my property they typically respond in one of three ways.

  • A few folks seem genuinely happy about my accomplishment.
  • A few will invite themselves to stay in my house for free.
  • The remainder respond in cold tones with statements like “that must be nice” even though their body language implies they don’t think it’s nice at all.

I don’t want anyone to feel bad about their own financial situations. It certainly isn’t fun to listen to someone talk about their wealth, especially if you are struggling to pay for food or rent. I completely understand that fact and try to remain quiet, but sometimes friends and acquaintances dig for further details.

When I outline the finer points of our acquisition I am often met with scrutiny. Here are a few things I’ve heard over the years:

  • Oh you bought your primary house in 2001? Well that was long before the housing boom right? Try buying a house now.
  • Oh you worked as a software developer in the late 90s? Jobs were easier to come by back then. Anyone could find a job.
  • Oh your parents paid for college? If I graduated without debt I could buy a beach house too.

Here’s what I think about those comments:

  • I purchased a house when I was twenty-two years old. How many college grads, fresh out of school, have the fortitude to sign a thirty-year contract and the willingness to forgo fun in favor of adulthood? I bet painting walls, digging up rose bushes and raking leaves weren’t high on your list of activities when you were twenty.
  • Plenty of my friends struggled to find jobs after college. I personally spent hours in the career center combing through plastic binders full of jobs. (Yes, that’s how college students researched jobs in the mid-to-late 90s.) Monster.com and other online job boards weren’t packed with job listings back then so you had to, (brace for it), call employers to ask about open positions. In some ways looking for a hiring company was much harder then clicking a couple of links and sending out resumes.
  • Graduating without debt gave me a huge advantage in life, but there are plenty of grads that still go deep into debt after their parents pay for school. I lived in a shitty, 9-by-9 room and shared a bathroom with five other people in order to save money on rent after college. The day I graduated I was off on my own. So yes, I had a job, but $30,000 wasn’t a whole lot of money to live on.

I wholeheartedly believe that part of my financial success is due to hard work and perseverance. Another part is due to my birthplace, the U.S., and to parents who took care of my needs throughout my youth and provided me with lots of love and support. Choosing a financially savvy husband who earns a high wage has certainly played a role as has some old-fashioned good luck.

I try my best to look at the whole picture. I am grateful for the advantages I’ve been given, but I am equally proud of what I’ve accomplished. Given the same set of circumstances I know plenty of people who would not be in the same financial position.

I try to remember that discounting someone’s success is easy. It’s much harder to perform an introspective evaluation of your own life. You can be the type of person that knocks others down or the type that builds others back up.

I am grateful for the FI community who listens openly to stories of financial success and weighs in with insightful thoughts and comments. I wish I encountered more people like this in real life.

The Words of Wisdom I Wanted to Hear

I met K in the sixth grade. After transitioning from a very small elementary school I found myself navigating the waters of middle school for the very first time and doing my best to make new friends.

K was the new kid at school and after a hellish fifth grade experience with a mean girl I dreamed of forging new friendships with less drama. Funny enough, K turned out to be all about drama. In fact, she became one of the most popular mean girls in school, but in the beginning she was just a lonely girl in need of a friend.

Within a very short period of time we became inseparable and after a few months we started requesting sleepovers, so one afternoon my mom drove me to K’s house and dropped me off for the evening.

K lived in a brand new neighborhood about five minutes away from my house. After turning off a quiet street we drove up a long winding, grass covered hill with gargantuan houses. Each momentous brick home was surrounded by bright white fences that surrounded elaborate stone pathways and in ground swimming pools. The houses were built on acres of an old horse farm and each house looked like a mansion to me; complete with separate pool houses and outdoor kitchens.

K’s house had four bedrooms; one of which was used as a guest room that no one lived in. (I couldn’t imagine having so much space that a room could remain unoccupied for days, months or even years at a time.) K and her brother both slept in massive bedrooms with their own bathrooms attached.

Prior to this point in time the majority of my sleepovers had taken place in my own neighborhood. I lived on a quaint dead-end street filled with one story ranchers. My own home, which never felt small prior to seeing K’s house, suddenly felt immensely tiny.

My house had three small bedrooms and I shared a hall bathroom, complete with 1970s mirrored wall paper, with my older brother. Our basement was unfinished with cement floors and cinder block walls. We spent the majority of our time in the living room playing with toys as children. K had an entire play room filled with pool tables and air hockey games.

K wasn’t like the other kids I knew. She wore Guess jeans exclusively, which were all the rage in the 1980s, and shopped at The Limited. K was my first introduction to an upper-class family.

I didn’t remember what I said to my mom after I returned home from K’s house the following morning, but thirty years later it seems my mom has never forgotten. She recently told me I came home and announced “our house was the smallest in the world.”

It seems I unknowingly hurt my mom’s feelings with that statement, something I did often as an unwitting pre-teen and teenager, but this comment stuck with her more than the others from those angst filled years.

I don’t know what my mom said in response to my comment, but I wish she would have said “life is all about choices” or “that money isn’t everything.”

I wish she would have told me that we all make decisions in life. I wish she would have mentioned the importance of her decision to stay-at-home, which resulted in less money but ensured years of hugs and support. I wish my mom would have pointed out that having a big home isn’t important if it isn’t filled with love.

As an eleven year old I didn’t understand the pull of consumerism. Heck as a 40 year old I’m barely beginning to understand its influence. I wanted to wear Guess jeans and look like all of the popular girls who walked through our school halls. I wanted to live the big life and never feel like I was less than those that had the money to buy whatever they wanted.

Within the last decade or two of my life I have learned that more stuff does not equate with more of anything else. K became a real jerk as the years wore on. She wielded her wealth like a weapon and looked down on those who couldn’t keep up with her buying power.

Money is a powerful resource, but life is not just about having money and flaunting wealth. I wish my mom would have pointed out all of the non-financial things we had like a home filled with love and caring, supportive parents who loved us.

I wonder how my perception might have changed if I heard those words of wisdom. Would I have listened or simply ignored her as the desire to fit in and be cool overwhelmed all other desires and feelings?

Having reached financial independence I can say that money isn’t everything. I still covet those gorgeous, HGTV homes, but I realize a big house doesn’t hold the key to my happiness. Kindness and love carry a lot more weight for me.

In fact, to this day I have trouble with those who flaunt their wealth in front of others. You can achieve success without forcing others to feel inferior. In fact, I might argue that true compassion is hiding your wealth all together.

Vote for Me

Here is a little self-promotion for the day. My post is currently live in the Rockstar Rumble, which pits personal finance articles against one another in a March madness type bracket. Please visit this link. Then check the box for Empowerment and click the vote button. I’d love to make it to the next round!

Work is Not Always Fun: Stop Thinking It Should Be

I’m going to say something that might sound a bit radical, but here it goes… Work is not always fun and I think we could all find a little more joy in our current jobs and lives if we recognized this fact and moved on from it.

As a child I remember listening to my dad complain about his work. There were a laundry list of complaints. I don’t remember them all, but I do remember a few that came up time and time again.

The top two grievances: 1) My dad didn’t think his coworkers pulled their weight. 2) He didn’t think he earned as much as he deserved.

Despite these feelings my dad drove to work every week day that wasn’t a national holiday. He drove in rain, snow, sleet and hail and rarely called in sick. Above all he put in his best effort and every year, when his review rolled around, he sat down with his boss and discussed the options for raises, promotions and bonuses.

My dad never said, “I just want to find a job I love” or “I don’t want to work in a job that doesn’t thrill me.” He simply woke up, drove to work, performed his duties to the best of his abilities, brought his work home with him, and repeated this same series of steps every day for over thirty years.

My dad didn’t always complain about work. He also talked about the good parts of his position. Growing up I understood that work was not always fun, (sometimes it downright sucks), but if you put in a lot of hard work and effort you can succeed. I learned that coworkers were extremely important to the success or failure of a project and that the personalities of those around us can make an unsatisfying work environment much more enjoyable. In fact, sometimes an amazing team makes up for a completely awful project.

When I graduated from college I followed in my dad’s footsteps. I certainly didn’t love everything about my job but I worked hard to learn new technologies and put in many hours above and beyond what was expected of me. I too was rewarded with raises, bonuses and promotions.

I recently read a blog post encouraging parents not to complain about work in front of their kids. I’m afraid I don’t agree. I think it’s important to talk to your kids about the good and bad aspects of jobs and at times that means letting them overhear your conversations and complaints.

Of course you shouldn’t just complain about work. You should also talk to your kids about how to make unpleasant aspects of your work better, what you enjoy about your position as well as how to handle tasks you aren’t fond of.

I want my children to know that work is not a bed of roses and that they shouldn’t think they will go to work every day loving what they do. With the good comes the bad and it’s important to figure out how to make the bad parts better rather than believing that the ideal job doesn’t have any bad parts at all.

I don’t think we should propagate fairy tales about loving our jobs. For example, you can become an artist and create incredibly beautiful sculptures, but still not love selling your pieces or marketing your art shows. You can run your own company, but not love searching for employees, running payroll and investigating the best health insurance policies.

The Internet provides today’s work force with the ability to step out of a 9-to-5 job. I hear many people say I want to become a writer or blogger. It sounds dreamy, right? But search around the Internet and you’ll find those same folks writing 2000 words about the best toilets on the market or the best ways to remove lipstick from clothing. Is this really the dream job they’ve always wished for? Do these folks have a passion for toilets and lipstick removers?

I suppose I’m showing my age, (I’m in my fourth decade of life), but I don’t think we should all feel the need to run away from work or hide the fact that it might not be enjoyable for the entire eight hours that we sit at our desks or reside inside tiny cubicles.

While I agree that you shouldn’t toil away your entire existence in a job that makes you absolutely miserable I also think you shouldn’t keep putting in minimal efforts while pining for the perfect job that most likely doesn’t exist.

In fact, I sometimes wonder if saying “I’m not willing to sacrifice my time for a job I don’t love” is an excuse. It’s easy to say I don’t really have to work hard in this job because it’s not my passion or I’m not good at this job because my heart just isn’t in it.

It’s easy to say “I want to find meaningful work” and then find every excuse to hate your job and make little to no effort to improve your current position.

Look I’m not saying you can’t find meaningful work. Rather I’m saying now is the time to be the best at whatever it is that you do. If you have a traditional job that you don’t love you should still give it 110%. You should look at ways to make your work better and more enjoyable.

If that simply isn’t possible than start a serious search for work that you will enjoy. If you want to find meaningful work then do it. If you want to work for a non-profit that saves the world then learn to live on less money so you can pursue your passions.

Either grab life by the horns and take a stab at your dream job or make the most of the job you currently hold. But don’t allow yourself to be disgruntled and angry while you pine away for a dream job that might not exist.

I won’t provide my children with fairy tale stories about work, but I won’t tell them to run away from the traditional workforce either. There are many valuable lessons learned from toiling away at a job you don’t love and many well paying benefits too.

I want my children to know that work isn’t always fun, but they are in charge of their mental mindset. They can view their employment through a negative lens or learn to work through the bad parts of their jobs while still valuing their less-than-perfect positions.

A Sign of Financial Independence: We Stopped Looking for Our Next Paycheck

I can clearly remember sitting at a desk in graduate school crunching financial numbers. As the professor rattled on about data management I pulled out a lined piece of paper and began to scribble down various amounts. How much was my car payment that month? How much did I owe for rent and utilities? How much did I spend on groceries and dining out?

My grandmother taught me to pay off my credit card every month and despite making only $32,000 a year while living in Washington, DC I was determined to close out that account every month without owing a penny of late fees or interest.

So there I sat writing down numbers and trying to figure out if I could make the math work. Alongside the totals I wrote down various dates. When was my credit card bill due? What was the latest I could hand over my rent check? And perhaps, most importantly, when would my direct deposit show up in my bank account?

My good friend Henry looked over at the paper in front of me, but he never said a word about it. He didn’t ask what I was doing or why I wasn’t paying attention to the professor. Maybe he pieced it all together, maybe he didn’t care. I have no idea, but I remember furiously scribbling down those numbers and worrying that my income might not cover my expenses that month. I remember wondering if Henry ever had the same thought or anyone else that sat in class alongside me. Back then money was taboo, (I suppose it still is), and personal finance blogs didn’t exist.

Twenty-two years later I can tell you that I’ve never missed a rent or mortgage payment and I’ve never paid my credit card bill late. In fact, due to a frugal mindset, six years of college education, quality health insurance and ultimately a high paying job I’ve always managed to pay that credit card bill in full.

I don’t say this to brag, but just to tell my story. The only story I know. I recognize my blessings and I am forever grateful for them. I am so glad my grandmother instilled the importance of money management and that I was healthy and capable enough to listen and follow her example. I am, in fact, beyond grateful.

I review our finances often. I log in to my bank account at least once a day. I check to see if the market is up or down and watch the wild swings that come with a large portfolio. I do all of this despite the fact that I never change our investments or make any major changes to the way we handle our money. I suppose it simply feels good to see the amount in black and white in front of me.

These days I no longer need to furiously scribble my income and expenses on to a piece of paper, but not much else has changed since my husband and I reached financial independence. In fact, we go about our day to day lives just like we did before reaching that monetary threshold. My husband still works an ordinary job and when my boys get another year or two older I will return to the workforce.

One thing that has changed: we no longer look for our next paycheck. That’s crazy isn’t it? When you reach financial independence you can stop worrying about dates and reworking numbers to ensure your income covers your expenses. That money still arrives in our bank account every two weeks, but we no longer need that paycheck to pay our bills.

Does it sound like a dream to stop worrying about your income and expenses? It hasn’t been a sprint to the finish line, but the ability to completely disregard the timeliness of a paycheck still feels like a miracle to me.

With Intention Comes Wealth

I stopped reading the majority of personal finance blogs in my RSS reader a few years ago. After reading blogs day after day for years I simply couldn’t find any new ideas that I hadn’t read or thought of before. I stopped blogging myself for this very same reason. What could I possibly say that no one had heard before? Honestly, I couldn’t come up with much. So I stopped writing and filled this blog with paid posts, because well, I wasn’t sure what else to do.

After awhile even the websites of amazing personal finance bloggers begin to feel stale and old. Most of the rules for accumulating wealth are simple. Increase your income, decrease your expenses and figure out how to invest the money you’ve saved. The blog ESI Money, which stands for earn, save and invest pretty much covers it.

So if that’s all you have to do than why don’t more people follow these principles? That’s a tough nut to crack, but I think that the majority of money management comes down to intentionality.

Before I begin let me say that not everyone can become a millionaire. I know there are may factors involved in the accumulation of wealth and some of those factors are out of our control.

If you are disabled, ill, paying for family members expenses or dealing with a devastating accident than you may not be able to climb the financial ladder or at a minimum you may not be able to climb as quickly as those around you.

But if you are making a half-decent wage and not dealing with unfortunate life circumstances than the odds are pretty high that there is nothing holding you back from wealth other than you.

To find the path to wealth I believe you need to live with intention. If you have an aim, a plan, a purpose, an objective, a target, whatever you want to call it, you are more likely to reach your goal.

Many of us live our lives from moment to moment without any real plan in mind. I recently had a conversation with a forty-year old friend of mine. I asked him what he wanted to do with his life. He said, “I don’t know.” I asked him if he wanted to travel. He said, “I don’t know.” I asked him if he would consider moving to a new state. He said, “I don’t know.” I asked him if he had plans to switch jobs. He said, “I don’t know.”

The fact is that my friend wakes up every day and steps through the motions of life. He takes a shower, gets dressed, drives to work, parks his car, works for 9 hours, gets back into his car, drives home, eats dinner and goes to sleep. My friend is an amazing guy, but he does not have a plan. How many of us can say the same about ourselves?

In order to reach a goal you have to set one. If you want to attain wealth, retire early, travel the world, do whatever your heart desires, you have to set a course and follow it closely.

So what does living with intention mean when it comes to your finances? First, put your finances into auto-pilot. Begin contributing to a 401(k) through your employer. Let your money slide straight into your retirement account without ever realizing it’s missing. If you can do the same with automated savings accounts. Move money aside each month and see if you can live without it.

Second, avoid shopping whenever possible. If you avoid the temptation of brick and mortar and online stores you will keep more money in your pocket, period. If you want to buy something ask yourself “is this a need or a want?” If it’s a want, then think long and hard about your end goal and decide if the item you covet really needs to be purchased at this very moment.

If you find yourself wavering then tape a picture of your goal to your credit card. I kid you not, this works. If you want to retire early to a beachside retreat then tape a picture of yourself at the beach. If you want to travel the world, then print a picture of an airplane flying around the globe. If you want to stay-at-home with your children then add their beautiful little faces to the top of your credit card.

Now, every time you pick up that credit card to pay for something you will come face-to-face with your goal and that reminder may be all you need to place that credit card back in your pocket.

Third, avoid feelings of jealousy and envy. When you visit your friends luxurious home filled with beautiful furniture and tchotchkes remind yourself that your goal may be different from theirs. If you want to travel the world you don’t need a five bedroom house to live in. If you want to retire early you might hop into an RV and travel around the country. Again, remember to keep your goal in mind. Do your best not to be distracted by others.

Fourth, remember that people are more important than things. All of the things in the world don’t add up too much if you are alone. Focus your intentions on creating meaningful relationships with those around you. Fill your life with people who fill your soul and you will suddenly realize that you don’t need much to make you happy in this world.

Fifth, revisit your plan often. Track your expenses, search for ways to earn more income and try to remain optimistic about meeting your target. Every time you stop yourself from spending you will reach one step closer to the finish line.

Sixth, find those who will cheer for your success and pick you up when you fail. It can be difficult to talk about money with others, so search for an online community or blogger who can guide you. Over the years I’ve met many amazing bloggers who now feel like life long friends.

Lastly, once you apply the notion of intentionality to your finances you will find yourself applying similar principles to other aspects of your life. A lot of people talk about retiring early, but once they’ve met their financial goals they have absolutely no idea what they actually want to do with their lives.

Create a plan for your relationships, your career, your children, your passions and anything else you can think of. Set your goals and strive to reach them. I can only speak from personal experience here, but maintaining the goal to accumulate wealth played a huge role in my success with money.

I wish you the best in your future endeavors.