When I first wanted to start talking about the idea of financial independence with my wife I was hesitant because I thought she would think the idea was a little bit crazy or unattainable. I worried that if I took the wrong approach she would be turned off to the idea especially if she perceived it as simply involving not spending money on anything and living as cheaply as possible. So I decided to give her a book, Your Money or Your Life, and asked her to read it and then see what she thought of the idea from that perspective. It turns out that the approach the book takes resonated with her especially when it comes to thinking about the value of what you choose to spend money on versus how much of your life you spend to acquire or do something that costs money. In fact I think the book was one of the reasons she started to think about all the costs associated with working at her former job and this helped her to pull the plug on that and start working for herself. One of the key points presented in the book is not to deprive yourself of everything by spending as little as possible, but only spending money on what you truly value. We like that approach because everyone has different things they value and that means that everyone’s plan is a little bit different; you simply cut out spending that does not really give you value. When we started to consider what we value we found it was not items, but rather experiences.
[Read more…] about Spending on what you ValueThe Family Meeting
When my wife and I first got married we fell into the trap of “what’s for dinner tonight?” and “do we have enough money for this item?”, or “what are we doing this weekend/today/tonight?”. We would have these conversations everyday, at random times, or worse never make time for them at all. We were finding that operating as a family with a newly combined budget, calendar, and goals was more complex than when we were just two individuals. To address this, we started having weekly family meetings. We designed these meetings to be an opportunity to discuss our family business in a more structured and efficient way.
Why I Plan to Leave Academia
I have been looking forward to writing this post ever since I decided to start a blog. When I tell people that I am planning to leave my faculty position in higher education by the age of 45 it elicits some puzzled looks. Why would I give up on a career that essentially guarantees me a job for life (under most circumstances), a flexible schedule, and three months off per year? The reason is quite simple, regardless of all the perceived benefits, it is still a job. Originally, like many people, I put too much emphasis on what I did as a career being directly related to who I am as a person. The idea of pursuing an intellectual passion and sharing that with others through research and teaching, however, is not the same thing as having a job or career as a university professor. In fact I find that in my research area, working at a university can sometimes get in the way of my true intellectual pursuits. So my plan is to leave academia by the age of 45. Below I have listed some pros and cons of working in higher education that influenced my decision to ultimately leave this career behind. Realize that not all academic institutions share every one of these attributes, but I do think there are some strong generalizations that can be made. This list is based on my experience working for both a large public research university, and a medium sized private teaching university.
The Path so Far (updated 2019)
As I continue to add content to our Financial Independence project, I wanted to provide a little bit of context of how we arrived at the point we are currently at and where we are starting from (in terms of a formal plan). After we discovered and started thinking about financial independence in 2016 our Net Worth was a little over $600,000, and as we start blogging about this in 2019 we are currently just shy of $900,000. We were fortunate that we made a few smart money moves earlier in our life, even though we were not thinking in terms of FI. Many of those decisions are what allowed us to be in the position we currently are in and hopefully able to reach our goals in a relatively short amount of time. Of course while we did do a lot of smart things, we also made some decisions that put us behind where we could be right now, but you can’t change the past, only learn from it. We also had some setbacks due to health care costs and caring for a family member we lost almost two years ago. Even given these setbacks and a few poor decisions, when we compare ourselves with the statistical averages in the United States, we have no room to complain about our current position, especially since nothing in our life has been handed to us or passed down from family.
I figure many of my posts in the future will contain elements of lessons learned and life events that shaped our current thinking, but in this post I wanted to focus on some of the major financial milestones that I (Julia) have personally accomplished and experienced up to this point by looking at my job history, and will probably add a second post by my spouse in the near future.
Project Reboot Net Worth ($896,948)
To be honest when we decided to reboot our Financial Independence project we were not sure if we wanted to continue the practice of posting our net worth and savings updates. We have actually had a lot of debates about the idea of maintaining privacy versus being open about our finances, and for now we decided to continue to be open about where we are financially and post our numbers. Ultimately it comes down to trying to break down the taboo of talking about finances and numbers openingly versus having what many others call stealth wealth. For me personally I think the secrecy about personal finances and numbers are what cause many of the inequities and problems in personal finance today. People are scared to talk about their personal finances, or they use material status symbols to try and portray a picture of wealth that may not actually represent the underlying financial picture. Either way for now we are going to continue to be open with our numbers both for philosophical reasons, and the fact that personally writing everything out promotes more awareness and accountability as we pursue our FI goals.
So as of May 31st, 2019 (the official start of our FI Project Reboot) this is our current financial position:
[Read more…] about Project Reboot Net Worth ($896,948)