Financial Independence, Without Bikes or Beans


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I bring up Dave Ramsey a lot on this blog. While I agree with a lot of his principles, there are an equal amount, if not more, with which I disagree.

If you’ve ever listened to his show, I find it funny that with each and every subsequent caller, Dave becomes more and more appalled at the fact that people aren’t willing to live off beans and rice. Yes, these people may be in financial turmoil, but they still want to have some creature comforts.

He often mentions, “I want you to sell everything. Sell it on eBay, sell it on Amazon. Have a garage sale. I want you selling so much, the kids think that they’re next.” He’ll continue, “I don’t want you even setting foot in a restaurant for the next 18-24 months, unless you work there. I want you eating rice and beans, beans and rice.”

You know what? I don’t like beans.

At least, not a meal full of them. I can’t fault people for not wanting to follow Dave’s advice.

There’s a movement in the financial industry right now called FIRE (Financial Independence, Retire Early). It’s all about cutting down on your expenses to as minimal as possible, and living well below your means, to be able to retire sooner than the typical age of 65.

Life is too short to live like a pauper. I’m a firm believer in not living beyond your means, but it’s still very possible to reach financial independence without giving up all luxuries from your lifestyle.

The Mustachian Mindset

There are a group of followers on the internet that call themselves “Mustachians”, loyal followers of the Mr. Money Mustache blog.

Peter Adeney (Mr. Money Mustache) wrote an article about the shockingly simple math behind early retirement.

Here’s a small excerpt:

If you are spending 100% (or more) of your income, you will never be prepared to retire, unless someone else is doing the saving for you (wealthy parents, social security, pension fund, etc.). So your work career will be Infinite.

If you are spending 0% of your income (you live for free somehow), and can maintain this after retirement, you can retire right now. So your working career can be Zero.

I would venture to guess that all of us fall somewhere between that 0% and 100% savings rate.

The more we save, the sooner we retire. Simple, right? Of course it is. So why aren’t we all plugging away as much as possible for retirement?

I watched an interview by PBS that shows a day in the life of Mr. Money Mustache. It shows him running various errands, and using his bike everywhere he goes. He does this to save on car insurance, maintenance, and fuel costs.

But you know what? Summer gets hot. And winter gets cold. And while I might be able to retire a year or two earlier by ditching my car, that’s one creature comfort I’m not about to give up just yet.

Finding the Balance

I used to have a co-worker, Steve, who within the next 4 years will be turning age 65 and ready to retire.

“Ready” in the sense that he’s been working for 45 years and is sick and tired of the rat race. From a financial perspective however, he’s far from ready.

In fact, he’s terrified. As he’s been getting older, his medical expenses have begun to creep up steadily, chewing through more and more of his take-home pay.

I once spoke with him about his retirement plans, and he shared concerns that his retirement savings might not be enough to sustain him throughout the rest of his life. His retirement savings total $450,000, which doesn’t sound too bad at first glance. Divided over the next 20 years (assuming he lives to 85) however, that comes out to a meager $22,500 per year. His average salary over the course of his working life has been $80,000+.

Living off beans and rice sounds like a pretty bleak retirement to me.

I then asked him, “Why didn’t you save more during your working life?”

Here I was, an all-knowing 20-something, judging my supposedly “wiser” colleague. At least until he shared this tidbit of information with me:

“My wife passed away at the age of 41. We spent a lot of our income taking trips and going on vacations. Losing her so early was the hardest thing I’ve ever had to go through. But I’m glad I have those memories of her, and that’s more valuable to me than anything.”

Like a slap to the face, I instantly felt guilty for judging him. See, Steve was nervous about the future, but he didn’t at all regret the past. Sure, he probably should’ve saved more, but he is so grateful that he didn’t put off some of the finer things in life until it was too late.

Financial Independence should be freeing

For me, financial independence falls somewhere in between these two extremes. On one hand, Peter Adeney was able to retire in his 30’s through uber-strict saving techniques. My co-worker Steve, doesn’t have enough, but enjoyed plenty of fun trips and vacations.

So where’s the happy medium?

I think for every person, it’s different. Financial Independence is about living life on YOUR terms, and no longer having to work a 9-to-5 if you don’t want. Of course, even after reaching financial freedom, it’s entirely up to you. Some people actually enjoy their jobs, and can’t imagine not working.

But there’s a massive difference between working because you have to, and working because you want to.

I have a goal to retire by 40. Am I on track? Absolutely. So much so that I may be able to retire well before then, at 35 or sooner. However, I very much want the freedom to travel with my wife, drive a nice vehicle, and splurge on an expensive restaurant occasionally if I see fit.

How can I achieve financial independence, without being hyper-conservative?

Ultimately, I think financial independence is a battle won step-by-step, a little bit at a time, by knowing the major mistakes that most people make, and ensuring not to do those. Let me list a few.

Avoid new cars

You should all know exactly how I feel about purchasing and driving a brand new vehicle, fresh off the lot. This is hands-down, one of the worst ways to keep people from reaching financial independence.

Within 4 years of purchasing a brand new car, it’s lost nearly 40% of it’s value in depreciation.

Say what you want, but I absolutely 100% believe that 1-day-old car and a 4-year-old car are equally reliable. I make sure that when it comes time to swap out vehicles that I never purchase anything newer than 4 years old. If possible, go lower, such as 6 or 8 years.

I have a 15-year-old vehicle parked in my garage right now. It’s my wife’s daily driver. It’s pushing nearly 180,000 miles. Is it perfect? Not even close. But it runs, is reliable enough for us to take on all of our roadtrips, and if something happens to it, we’re not even remotely worried about it. We could maybe sell it at this moment for $3,000.

Pack your lunch

This one, I’m still guilty of.

You see, I’m lazy.

The thought of waking up in the morning and having to make a lunch just sounds like too much work. But it’s something I’ve forced myself to do in order to save money. Packing a lunch from home can save on average $50/week from restaurants. That adds up quickly, especially compounding over time.

This has been such a difficult one, because I love going out to eat.

And so I make sure that I allow myself to go out a few times a week, so as to not deprive myself. If I know some co-workers are going to grab a bite on a specific day, I’ll plan for that. Otherwise, it’s time to bring a lunch.

Unhealthy Habits

Smoking and drinking too much alcohol not only are bad for you, but they’re incredibly expensive.

There were some weekends, I (vaguely) remember coming home from the bar and feeling my wallet become $150-200 lighter, especially if you’re purchasing drinks for other people. I quickly realized I needed to either have a fun night in at home, or give it up altogether.

And so I decided to quit drinking. Not only am I not blowing a few benjamins each weekend, I feel lighter, and that I have additional clarity in my life.


TLDR; Plain and simple, it comes down to this — Budget your money, save as aggressively as you can, push yourself far enough so that you stretch, but don’t deprive yourself of things you truly love. It’s okay to budget and plan for a fun vacation with your family, or eat out a few nights a week.

But please don’t be one of the average Americans with a 3% savings rate. You’ll thank me come retirement time.

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