2015 was quite a money ride. A lot of the plans made and outlined in this post "Can I make it on $3k per month?" got tossed overboard.
Avoid my mistakes.
I can recover because I have a lot of savings, thanks to my proactive frugal living and personal finance software addiction and fascination with minimalism and aggressive downsizing.
But my pride and confidence hit the surf and it felt like I slammed into concrete. Worse, it may have derailed complete financial freedom by a year or more. And some of it was my fault.
Surfing toward FREEDOM
Usually I love the whole inspirational journey of having a juicy, rich, fabulous life, by spending less. Sounds counter intuitive. But I believe it's true and others have taken the road to prove it. Ever read about the Tiny House Movement?
Using less resources means:
- Taking up less of my mental bandwidth with stuff to remember, to maintain, to repair, to store, to insure.
- Freedom from working 50 hours a week at a job that is completely unfulfilling at best, abusive at worst.
- Freedom from the anxiety of whether or not the rent will get paid, or there will be enough to repair/insure the car.
Which ultimately gives me and all of us the greatest gift of Time.
My husband died young, so I am acutely aware of how precious and limited our healthy life can be. Financial freedom to me = time to be with my friends and family NOW. Time to achieve a happy and meaningful life NOW. Before it's too late.
Sounds great, right? Just takes courage, planning, smarts. And listening to the sages who have gone before.
Surfing Lessons and the Sages
Lo and behold I wasn’t ready psychologically or emotionally. Therapy helped.
As the retirement sages on www.earlyretirement.org said might happen, I experienced a sudden depression.
Indeed, much to my surprise, a great deal of my selfperception was tied to my corporate title. It took about a year but I've come out with a much better sense of self. There is hope and I can detail some tools for you in another post in this series.
Sound financial planning is not an exact science. That must be why it requires building in a big margin of error.
I asked all the wise ones in the money advice forums "can I please quit this job and retire now?" But I wasn't liking the answer.
All the wise ones kept responding "Just wait! Yes, you are in a hellish situation. But can you hold on another year? You need more of a safety cushion. Nobody gets all the planning and figuring just right. Give yourself another 5-10% of a cushion.”
I hated the idea of holding on another year. There was $350K in 401Ks plus $65K in cash, two guaranteed pensions starting in two years that would provide $24K per year. That was before social security. Monthly spending was down to $3500 (plus or minus 5%). The corporate situation was brutal.
I took the leap anyway.
Looking back? It was the right thing to do. I learned a lot and can share it with you in these blog posts.
But the sages were right too. I needed a 20% cushion and only had 5% planned.
Killer Wave (Lesson) #1 401K withdrawals and taxes.
Killer Wave (Lesson) #2 My rent was cheaper than owning a home, right? It was. Then it wasn't.
Killer Wave #3 Getting a mortgage means you gotta' have a job.
- My US Congressman's office.
- My state’s attorney general’s office consumer affairs department.
- Repeated calls to the hospital's billing department.