One of my favorite things about blogging is the connections we’ve made with our readers – whether in person as we travel (over a dozen meet-ups last year!) or over the internet.
This e-mail from a reader caught my attention last week:
I hope you and Daniel are doing well and enjoying semi-retirement! I’m hoping you could share some advice that you’d give to your 23 year old self.
I got my bachelors last year in Marketing and have worked for a cool, highly successful company in a southern U.S. city since, salary about $40k pretax. But here’s the thing, Matt, you’ve ruined me.
Since I discovered semi-retirement was possible at a young age, I’ve become obsessed with the concept. I’m a rock climber, mountain biker, etc., so the thought of being able to pursue those hobbies full time while my body is at peak health is incredibly enticing.
I’m not sick of working, as a concept, though I am so sick of marketing. I am more like you than the rest of the FI community in that I have no problem working again someday; in fact I know I want to. If I could find a way to semi-retire for a few years, I could use that time to pursue my age-restricted hobbies and develop skills for re-entering the workforce.
So, what would you tell yourself at 23 to make early retirement planning less painful, more productive/efficient, or what have you? And any advice for my specific situation?
My response quickly turned into a multi-page letter, and I decided to post it here.
Here are five pieces of financial advice I’d share with myself at age 23.
Three hundred sixty-five days ago, Daniel and I did one final check of our possessions, started up the engine of our van, and pulled out onto the road. We’ve been gone eleven of the twelve months since.
I liked the poetry of starting our travels on the spring equinox. The end of winter and the beginning of a season of life and light felt like an apt metaphor for this new season in our own lives. We’ve watched sunrises and sunsets in forests and deserts, slept under the stars, hiked among ancient cultural wonders, and trekked through towns and countries I couldn’t have pinned on a map.
By no means has every day been perfect. Approximately three seconds after we first pulled out of the driveway, I looked in the rear view mirror and watched our newly purchased five-gallon water carrier go flying off our storage platform, bouncing off the bed before settling against the driver’s side sliding door. There were still a few kinks to work out. But in spite of a few little mishaps, it’s been the longest year of my life in the best way possible.
I’ve been feeling inspired lately. A couple weeks ago, two of my favorite personal finance bloggers wrote remarkably similar posts discussing the need for big ambitions and new projects in early retirement. Mrs. Our Next Life described them as “your next BIG GOAL,” while Mr. 1500 Days framed things slightly differently as “passion reignited,” writing that “work is the key to happiness.”
My takeaway from the two pieces was the same: most people pursuing a big goal like financial independence aren’t going to be satisfied living without another big goal in the future.
So much for my plan to sit on the beach and drink margaritas for the next sixty years.
It’s been just over a year since we began this lifestyle experiment of semi-retirement and full-time travel. When we quit our jobs at the end of January 2016, I had about one year’s worth of spending money held in cash. The rest of my savings remained invested in stocks and bonds.
My rough financial plan was to spend down most of our cash first (offset by any side hustle and rental income), then begin drawing from investments. We’d use the 4% rule as a guide for long-term sustainability, but we wouldn’t treat it like gospel. We plan to earn more income in the future in some form.
By my estimates, we’d need to start selling shares sometime around January 2017. That turned out to be just about right. As of last month, we were getting low on cash, and I was starting to plan our first stock sale.
Then this happened:
One of the better e-mails I’ve received this year
Well, that changes things a bit.
Greetings, readers! Just over a year after launching this blog, I’ve finally roped Daniel into writing a post! I hope you’ll enjoy some more background on his financial story and how he, too, was able to build enough financial security to be comfortable dropping everything to travel the world. – Matt
Back in the early 2000s, at the well-informed and responsible age of seventeen, I took a few tours of college campuses, was impressed by the lovely buildings and manicured lawns, and made the decision to go $23,000 into debt.
Four years later, I graduated with a bachelor’s degree in the highly practical field of European history. As a wide-eyed college student with visions of making the world a more just and equitable place, I went into social service, working primarily with marginalized communities. The work was meaningful and challenging, but as you’d probably expect, it wasn’t exactly the most lucrative.
Over the last six years of full-time work, I earned an average of just $25,000 annually.
For many people, that combination of low salary and high student debt would have been a sentence to decades of financial challenges. But with the right habits, I enjoyed some of the best years of my life, saved a bunch of money, and paid off the entirety of my student loan debt. Here’s how I did it.