Why Should You Listen to Us Anyway?
I decided to start off our blog about early retirement with a post about NOT quitting my job. I then told you how little we knew about investing and how we have never had a tax planning strategy. You may be asking the question: “Why should we listen to you anyway?” or “Do you even have any idea what you’re talking about?” You also may be wondering why we would write a personal finance blog.
Those are all fair enough questions so let me address them. As my wife and I began to get serious about early retirement and the finances around this, we realized how little we knew about these topics. We found that using traditional financial planning services and following conventional wisdom had let us down. We felt that we had no plan, lost opportunities and paid hefty costs. Our original plan in starting the blog was to have a consumer advocate stance while writing about investing and financial planning. Tax planning and investing are important, have cost us tens of thousands of dollars to this point, and would have easily cost us hundreds of thousands of dollars more with compounding costs over the years if we didn’t figure that out.
Despite the financial mistakes we’ve made over the years, we are in a position to retire within the next few years. Now let’s answer another question you may be asking if you’ve been following along this far. How can two self described ordinary people plan to retire around the ripe old age of 40 with a young child after working for only about 15 years? After all, the average person works for 40+ years until the age of 65 or even later and still can not manage to retire with any confidence.
Actually that is not quite the right question either though. That is the question that you ask if you simply follow the crowd with “conventional wisdom.” You may ask that question if you watch endless stories on the news every night or listen to our politicians talk about how bad our economy is. They are quick to tell us all how hard it is to even make ends meet while living in America. The thought process that causes you to ask that question could come from following the advice of your financial advisor who needs you to keep handing your money over to him to maintain his own lifestyle.
If any of these apply to you, WAKE UP! We think the question you should be asking yourself is this. Why do the vast majority of people simply accept the same fate instead of looking for a better way of doing things?
We now realize that what has gotten us to this point was learning to master both the math and much more importantly the psychology behind learning to consistently live well below our means while enjoying our lives. Remember that the key to becoming wealthy is simple. Spend less than you earn, and then invest the rest wisely. Intelligent investing and tax planning can increase your earnings by a few percentage points here and there which can easily amount to hundreds of thousands of dollars over a lifetime. However, this is only true if you can earn a decent wage and use that to build assets. If you make minimum wage and have no assets, your tax burden is the least of your worries. If you save nothing to invest and can make a 50% return every year, you will still have nothing.
Therefore, over the next few posts we will share some of the the habits and the mindset that we’ve developed that are absolutely essential to get to this point. This is where you make the biggest changes in your finances and therefore your lives. Then we will get back to our plan of writing about investing, taxes and other aspects of planning our early retirement as we learn more and implement these strategies into our lives. Hopefully you’ll see that we do know a thing or two about personal finance and we’ll continue to learn and share as we go. Hopefully, you’ll learn a bit along the way too.
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