1. What’s Your Story?
About 12 years ago, my Dad retired from a 35-year teaching career. He was 56-years-old. He hasn’t worked a day since. At the time, I told him it was my goal to retire one year earlier than him, at age 55. To me, there’s no better way to quantify whether I’ve lived better off than my parents than retiring earlier. Sure, I could aim to be wealthier or live in a fancier house, but if I’m still working full-time into my 60’s, I’ll consider that a failure of planning on my part.
My site is primarily an investing blog that tracks my path to financial independence through dividend investing, peer to peer lending and real estate investing. But I also write about personal finance and travel. I’ll be 40 later this year.
I declared this goal in my 20’s, but back then, I was more interested in traveling the world. I spent 14 months in Asia and Latin America, visiting 18 countries on a budget of just $10,000. The related post about the trip remains one of the most popular on my blog. It was a strong character building era in my life, but the traveling set my career back a few years and depleted nearly all of my savings. At age 27 I was broke, unemployed and living with my parents. Nonetheless, pausing my career to travel was one of the best decisions I’ve ever made and travel remains the primary motivation to retire.
Once I found a job and started building wealth again, my focus turned to finding the perfect wife, which took about five years. Now we’re in the family building period of our lives and really starting to envision the retirement end goal. The kids are fun to have along for the ride, and certainly add another angle of expenses, but I don’t think kids are as expensive as they are made out to be, aside from the cost of college. We spend much less money socially now, diverting those funds to diapers and preschool instead.
2. What’s your point of view as a personal finance blogger?
I’ve been free of consumer debt for about a decade. We own our cars outright and have mortgages on our house and rental property. I aim to pay off the mortgage loans by retirement, but today I’m more concerned with building wealth through investing and creating multiple streams of income.
As a Dad with young kids, other elements of the financial planning process have become important in the past few years such as life insurance, estate planning, and dealing with the future cost of college.
Even though my retirement goal is 15 years out, it’s important for everyone to have a goal. It’s also important to have a plan once you do retire. Believe it or not, I work with some folks that retired, but returned to work because they were bored and didn’t have enough interests at home. They felt the work knowledge they built up over many years shouldn’t go to waste, so they’re back in the office.
I’m not looking for a second career of any kind. Once I’m completely retired, my priority will be to maintain a flexible schedule so we can travel for months at a time.
My current career in information technology is the path of least resistance to early retirement. I’m not as extreme as other bloggers, and I try not make suggestions that you should do this or that. It’s more of a here’s what I’m doing, maybe your situation is similar to my kind of blog.
Mrs. RBD and I have committed to pay for four years of in-state college education for our two kids (and a third on the way). The decision to pay for their education is the greatest risk to reaching my retirement goal because my oldest is scheduled to start college in the same year I plan to retire.
3. In one sentence, what’s one piece of sage advice from your personal finance background that you’d like to share with our readers?
Debt is the least of your financial problems. This might seem unconventional, but I explain my in detail in this post.
Debt gets a lot of attention in personal finance because the desire to own stuff is so high and financial ignorance is so rampant. There’s nothing easier in personal finance, from an execution point of view, than paying off debt. You simply pay it off instead of spending the money. Any specific technique or tip is a minor detail. The real challenge is quelling the desire for things and services that add little value to your life.
I argue that compared to debt, there are much bigger financial fish to fry including:
• Time is working against you and cannot be reversed (unlike debt and bad spending habits)
• Education/skills that are attained at too high a cost, are not always sufficient to increase income in some geographic areas
• Paying off debt is easy; investing and growing wealth is much more difficult
• Buying the wrong home at the wrong time can be an enormous financial mistake
• The inability to change a consumerism mindset can lead to more debt and lackluster savings
Off course, once you’re out of debt, live below your means and save and invest aggressively. But if you’re young and want to travel, I’d definitely recommend putting a career and family on hold to take an epic trip around the world. Take off for at least a year so you can travel at a leisurely pace.