When I got my Black Friday packages this week, I had some buyer’s remorse. I had largely forgotten that I had a package coming which made me feel like I might not actually need the thing I had just spent $150 on. Of late, I am often pondering the relationship between time and money. Most of us who are wage earners trade time for money. Was that black bag worth a few hours of my life? I am not sure.
what is the fire movement?
This leads me to the FIRE (Financial Independence Retire Early) movement, a community of bloggers and young people trying to dramatically reduce their cost of living and generate passive income so that they can quit their jobs and stop trading their time for money. It’s hard to not read Mr. Money Mustache’s rant about “the exploding volcano of wastefulness that is middle class life” and not feel like I would rather cancel my cable than have to work 50+ hours per week until I’m 65.
I’m not 100% on board with FIRE. I like to work and believe what I do every day, helping 1.8M healthy school lunches get to hungry kids, matters. Second, FIRE bloggers often advocate for DRAMATIC decreases in spending. Sorry, but I’m not going to live in a trailer in the woods eating canned beans and living off $8,000 / year. I want to live in a more urban area, pay someone else to groom my dog, and buy the $15 / pound artisanal olives whenever I want.
However, you don’t have to live FIRE to have it help you have a better relationship with money.
what can you take away from the fire movement?
1. Figure out how to create passive income: Do you want to own dividend stocks? Buy a rental property? Write an e-book that you can work hard on once and then sell again and again? The more passive income you generate the LESS dependent you are on your job for income and the less you have to save in total for retirement. Here is an interesting piece on how you can create things (even stock photos) to generate passive income.
2. Decrease spending: Could you reduce your spending by 10% / year? 20%? More? What would it take? If you cancelled your cable, waited another year to get a new car, slashed one long weekend trip a year? I am going to make a date with myself to look at my spending for 2019. If there are things I spent money on that didn’t bring me real joy or that I did for someone else (e.g, not wanting to the schlubbiest one at the holiday party), I am going to see what I can do to cut these out. If you so feel inspired, put it on your calendar. Reward yourself with your bad TV or magazine of choice afterwards.
End of Decade Challenge: I challenge you to pick ONE of your recurring bills that you haven’t renegotiated in a while and to shop around before the end of 2019. I just did this with my car insurance (it took me 4 months after they raised my rate 40% to do anything but I did do it). When I finally did my research, I saved >$600. Renegotiating one bill isn’t going to get you to FIRE but from there, think about your big expenses. Could you extend the life of your car one year? Are you overspending on your housing costs? Where is 20-30% of your money going each month and could you dramatically reduce that line item?
Finally contribute to your nephew’s 529 plan. He doesn’t need another educational toy. Better yet, set one up for him.