You’re fed up with your job and need out. I’ve had those moments. Most have. I took that moment and started on a new path. It’s made me better at my job, better for my family, and improved my health. I’ll share an eighteen month transition from being a typical frustrated American to being in control of my future.
Setting the Stage – Impending Burnout
I’m lucky. I like my job – mostly. I’m compensated reasonably well. It’s loaded with purpose. I see the impact I have on lives almost daily. I know I’m making a difference.
That very importance can cause problems in itself. The work is so important. Obsessive passion has been found to lead to burnout and less work satisfaction. Being fully committed to your work isn’t always healthy.
But, how can I not be? Education is important. And it is broken. It’s a critical need in our society, and fails far too many kids. That leads to significant public scrutiny and criticism. I get it, and I’m in the job so I can fix it. But, that doesn’t make it any easier to both fight the system and take punches from those fighting against it.
On top of that, I have two personal traits that make me struggle with work, no matter its importance.
I can’t do anything half-ass. When I decide to do something, I pour myself into it. I drive towards my goals. This has made me generally successful at everything I’ve done. It’s also the equivalent of sprinting the first three miles of a marathon. I’ve experienced burnout before. It’s not pretty.
I also struggle with being required to do anything. If I loved to play basketball (and I did) I’d gladly choose to shoot 100 free throws a day on my own. But the moment a coach told me I had to do it, I’d be grumbling for the last 50. I’d do them, but I’d want to stop as soon as he possible.
Small wonder then, that one day three years into a new position with significant change management, I found myself on the verge of burnout after two decades in the profession I loved. My health was suffering. I was frustrated and not my best self at home. I was ready to make a significant life change just for the sake of change.
Have you ever been there?
The Journey Begins
I’ve been an avid reader for my entire life. I have a habit, that has served me well, of always having one professional read, and one personal read going. My life was so significantly disrupted by near-burnout that I was barely making progress in my personal read (a science fiction book) and had almost a gap of a month between professional reads.
At work one day, after a particularly intense conversation with an angry community member, I decided to try and get myself back on track by grounding myself in a professional read. On my lunch break, I started browsing Amazon recommendations. (I typical read on Kindle because I can read anywhere, on multiple devices, without always carrying a book.)
I’m still not sure why, but a book called The Automatic Millionaire popped into my recommendations. I’m almost ashamed to admit I had paid almost no attention to my financial planning up to this point in my life. Now, in my early 40s, at a point when I was considering derailing my professional life, a book claimed to have the secret to becoming a millionaire.
I was in. And my journey started.
Starting to Plan
|Steps Taken in This Phase|
|1. Read The Automatic Millionaire|
|2. Update net worth calculation|
|3. Review investment balances|
|4. Begin to imagine financial independence|
We had a few investments and retirement accounts but paid almost no attention to them previously. I had a rough net worth calculation I’d done halfheartedly for about three years. I started paying more attention now.
Because of the purchase, the algorithm recommended a much less read book, How To Retire Early. This one outlines a professional couple, not too dissimilar from me and my wife, who laid out a straightforward plan to retire early. It includes the foundational concepts of reducing expenses, investing simply, the 4% rule, and retiring earlier than most of your peers.
It also had the slightly more advanced concepts of using taxable accounts to bridge the time until tax advantaged accounts could be accessed without penalty. Best of all, the authors laid out their actual numbers and even a framework for how they tracked their progress and results. Now, I had something concrete I could dig into.
(Note: I’m glad I did not stop reading here. The book was an important start, but I’ve since realized it is overly simplified and has some dangerously optimistic assumptions)
I asked my wife, Teacher FI (TFI), to read those same two books. She grudgingly agreed. This is important, because her participation changed everything. Read here for a full explanation of our evolving partnership.
Do you and your partner agree on financial goals?
|Steps Taken During This Phase|
|1. Analyzed our expenses|
|2. Estimated annual spending in retirement|
|3. Used 4% rule (25x) to set our “Number”|
|4. Maxed out both 403b contributions for 2018|
|5. Set an emergency fund target|
|6. Set goal for taxable investments|
We also set some goals for taxable account investments, a liquid amount of savings, and an emergency fund. Then, we started tracking.
Over a year later, that first conversation seems so basic and I cringe at the years we missed. But, we started.
We also went through a brief period where we wanted to tell all our friends. We couldn’t believe that this was all so very possible and no one was doing it. Like so many others I’ve since read, we quickly realized that talking about these things ends up being more awkward than revolutionary. That didn’t stop us from pursuing the path ourselves.
Have you been on either side of the FIRE conversation where one party is in, and the other knows nothing?
|Steps Taken During This Phase|
|1. Read A Random Walk Down Wall Street|
|2. Discover FIRE blogs (!!!!)|
|3. Max out 457 contributions|
|4. Meet emergency fund target|
|5. Start automatic deductions to taxable account|
I kept reading. The most significant reading during this time was A Random Walk Down Wall Street. I loved my greater understanding of the complexity of it all leading to such a simple approach. I also enjoyed reading How Much Money Do I Need to Retire? It helped me think more intentionally about what our true number was.
I tried some other books that were about financial planning, but none were as satisfying. I felt a bit stalled.
Then, one night I googled something like “How to Retire Early.” There were some mainstream articles, but a few entries for blogs leaked in. Now that I know about the “movement”, it seems to be everywhere. But I’m a living testimonial to the fact that it is still very much not common knowledge. I was actively reading about early retirement, and knew nothing!
I started reading everything I could. The MMM approach. JL Collins and his stock series. Big ERN and safe withdrawal rates. The various personalities were entertaining, and I could learn something new and integrate it into my plan. I found bloggers like Our Next Life and Tread Lightly.
The Millionaire Series of ESI Money spoke to me. Reading so many different people with so many different approaches to hitting numbers that previously seemed out of reach was helpful. I devoured them. Then, partway through, I saw one millionaire mention something called a “457.” It seemed like something I’d have access to. How did I, an executive level education leader who had worked in four different districts offering this benefit, know nothing about it?
TFI still laughs when she talks about how I was practically bouncing for days after discovering what I consider early retirement magic. We were only four months into our first year plan, and I proposed a significant adjustment. She grudgingly agreed. A rough plan was becoming more precise.
How have your financial plans and goals evolved in recent years?
Freedom Earlier than Expected!
|Steps Taken During This Phase|
|1. Reconsider early retirement as the goal|
|2. Increased agreement from TFI|
|3. Adjust FI Timelines|
|4. Use FI principles for fitness goals|
|5. Prepare to adjust/improve plan for 2019|
TFI and I had a long and important conversation about how much this suddenly mattered to me. She understood and became more deeply engaged. We made agreements on how we’d monitor our progress and review our goals. We were becoming more sophisticated in our understanding, and more committed to maximizing our savings and investments. That needed to be integrated into our plan.
Our timeline for possible retirement was getting shorter. I knew enough to adjust along the way, even if something disrupted our earnings. We would be alright. Better than alright.
I enjoyed going to work. I could step away from those moments of frustration and stress. Even better, if I faced political pressure to make a choice (something far too common in my current role) and I didn’t believe it was in the best interest of kids, I was able to fight back without fear of losing my job and letting my family down.
It also leaked into other areas of our life. Our goal setting and focus with our finances led us to be more intentional with our fitness. While exercise had always been part of our lives, we also tended to slip when work became tough. Now, we set fitness goals. We knew we’d be very active in our retirement and wanted to be healthy and prepared.
The path to financial independence paid off even before we were anywhere near our “number.”
What Comes Next?
Now, as we approach the first anniversary of our annual goal setting, we’re ready to take it up a notch. We’ve blown through our first set of goals. We see the path and are excited to consider new scenarios. We know that we’ll have goals related to giving time, energy, and money in our retirement.
We’ve set up a three month intentional plan to understand our spending better before we create our next set of goals. We are currently using Mint for the spending tracking, but considering Personal Capital and other tools. (Please share any recommendations/thoughts you have on this.) Our budgeting will get better. We’ll stretch our savings rate. The time horizon will shorten.
I can’t wait to see where it leads us, and know that it will continue to improve our lives in the moment.
I’m excited to share this all with you. This post has been somewhat self-indulgent as it let me relive the exciting progress of the past 18 months in a quick summary format.
I’m looking forward to writing in more detail about the stages of progress and learning. I hope to inform those who may not be as obsessive as I am, or are simply looking for a simpler way. I’m also excited that you may not have to dig for some of the “ah ha” moments I stumbled into. That excitement is why I decided to start Principal F.I.
The Journey Continues
Discovering the possibility of financial independence seems so accidental to me. How can that be? There is so much information out there! But, I’m still close enough to my discovery moment that I remember how unexpected, transformational, and powerful the concept is.
I look forward to reaching financial independence. I look forward to the moment when TFI and I decide to retire full time. But, most of all I’m thrilled at how much better my life is just for being on the path.