Middle-Class Millionaires Finding Life Purpose

Community members share stories of finding life purpose through effective money management:

Wahchai’s Story of Finding Life Purpose (Post to Motley Fool Board)“The Workplace Is More Pleasant If You Are There Because You Want to Be There”

“I used to berate them for being cheap. Yet both lived essentially as well as I did. They bought their suits and shirts on sale, and drove less expensive cars which they held onto at least four years before trading….Now my friends live the good life….

Retire Early Stories

“Financial security is freedom. Freedom from worry, freedom to use your time as you see fit, freedom even to keep working if you so choose. The workplace is a great deal more pleasant if you are there because you want to be and not because you need to be.

“…I sold my expensive house (made a good profit), and bought a smaller one in the suburbs which I like just as much. Instead of a 740 BMW (great car), I drive an inexpensive SUV with good tires…. Already I feel a sense of security, a feeling of control over my destiny, that I never had before.”

Rob’s Comment: If you attend a marketing class, one of the first things you will learn is that people rarely are persuaded to do something that they didn’t already possess some desire to do. That’s why advertising relies on emotion rather than logic in its sales pitches. You want to persuade people to do what they are already leaning toward doing.

The Sacrifice Saving model of money management is not rooted in emotion. It tries to persuade people to do something they don’t want to do — practice self-denial. It doesn’t work.

People save when they want to save. You can make people want to save by showing them what a powerful value proposition it offers. Wahchai’s story is not a story of self-denial. It is the story of how he came to see that saving is often the money allocation choice offering greater life enhancement. That’s what works.

John’s Story of Finding Life Purpose (RetireEarlyHomePage.com),“I Almost Got My Education for Free”

John Greaney describes how he completed his engineering studies in three years and thereby was able to begin earning an engineering salary one year earlier than would have been the case had he taken the usual four years to complete his studies. His first-year salary covered the cost of three years of tuition and room and board, with the result that, in his words, “I almost got my education for free” in the sense that his earnings from his first year of employment as an engineer provided enough funds to cover his three years of schooling.

Rob’s Comment: People who are not seeking to win financial freedom early in life are often amazed when they hear stories of what our community members have accomplished for themselves. John’s story shows why we are able to accomplish the “impossible.” Would John have attempted to finish his course work in three years if his only saving goal was to be able to finance an age-65 retirement? It’s not likely. He would have looked at the pros and cons of finishing his course work in three years from a very difference perspective if he had been coming at things from the conventional perspective. It was his short-term saving perspective that provided him the motivation to finish his course work in three years. His words above demonstrate how great the financial payoff can be for pursuing a saving goal that can be achieved within a relatively short amount of time.

Marie’s Story of Finding Life Purpose (E-Mail to Rob), “You Can Never Tell What the Future Holds”

The Joy of Financial Freedom

“A great reason for following a financial freedom plan is that you can never tell what the future holds. You don’t know if you will be able to continue earning money at the same high rate. You may get sick, lose a high-paying job, lose a spouse, have a disabled family member.

“In my and my husband’s case, we loosely followed Your Money or Your Life. We agreed with it in principle, but didn’t follow all of the steps. But we did manage to save enough and reduce our spending enough to build up a cushion.

“I am incredibly grateful that we did. My husband was diagnosed almost a year ago with a brain disorder. This is on top of our having a special needs teenage son. My husband had to quit his good-paying job, we had to move to get rid of our mortgage, and we had to attend to medical issues. This would have been an incredible pressure cooker situation, one that could have taken its toll on our marriage, our sanity, and our health, if it had not been for our previous work in the financial freedom area.

“As it turns out, we are doing great — bonded together, doing what we need to do medically, moved to our dream area of the country, building a small mortgage-free house, continuing homeschooling our kids, trying to live a calm sane life. Since we had built up several years’ worth of cash reserves, we have time to figure things out. I have a web site and am about to publish a book about a topic that I love. Thankfully we don’t have to be in a big rush to get more money coming in. I can still stay at home to take care of family and we have time.

“In order to do this, we keep our spending to about $1500 per month, but I feel like the richest person on earth. I have my husband, my kids, and time.”

Rob’s Comment: Most of us think at times: “Oh, if only this problem would go away, my life would be great.” Sometimes, the problem we are worried about goes away, but some new and much larger one comes along to take its place. We need always to be seeking new life enhancements to make up for the good stuff that is taken away from us as life proceeds. Seeking to play it safe and just have things remain as they are does not work. Marie and her husband have experienced setbacks that would have crushed the spirits of a lot of us. Their spirits were not crushed. She today feels like one of the richest people on earth in part because she engaged in effective money management in the days before life dealt her some black cards.

Matt’s Story of Finding Life Purpose (E-Mail to Rob), “I Experienced a Freedom I Never Thought Possible”

Juicy Excerpt: “I want you to know that you are one of the reasons I started following the Retire Early board [the reference is to the Motley Fool’s Retire Early Home Page discussion board]. In the Spring of 2000, I started reading the board at the suggestion of my brother. He told me to do a search of the board for your posts, as well as those of a few others, in order to learn what the whole Retire Early thing was about.

“My brother lighted a fire inside me which you helped to nurture. You both made me see the world in a way I had never considered before….

Finding Life Purpose

“In December of 2001, I left my job. I decided to take some RE [early retirement] in the middle. I paid off most of my debt, invested the rest and set off into the wilderness. I spent several months hiking over a thousand miles through the Appalachian mountains. I experienced a freedom I never thought possible.

“I never would have thought it possible had the FIRE [the acronym stands for “financially independent/retired early”] not been started in my soul. You were a contributing factor in that, for which I am immensely grateful.

Rob’s Comment: A key tenet of the Passion Saving approach to money management is that saving to finance an old-age retirement doesn’t work. The conventional saving goal is too distant a dream to supply the ongoing motivation needed to inspire effective saving in the consumer wonderland we live in today. Saving can provide life enhancement in the here and now, just as spending can. Matt G’s story provides a great illustration of the point.

Matt G does need to save for his old age too, of course. My hope is that the taste of freedom that he has experienced will cause him to feel a craving for the much higher level of financial freedom needed for him to overcome paycheck dependence in a permanent way. His time away from the workplace cost him money. The important long-term question is — Will his enhanced appreciation of the rewards of financial freedom result in a big enough boost in his saving effort to permit him to leave the workplace for good earlier than would have been possible had he continued to follow the Sacrifice Saving approach?

Duggg’s Story of Finding Life Purpose (Post to Motley Fool Board)“I Am in the Best Shape of My Life”

“Retiring early allowed me to pursue mountain biking on a full-time basis. In the past year, I have ridden over 6000 miles and have lost 15 pounds. My percent body fat has dropped from 32% to 22%. I never did stretches before retiring, and doing so has immensely improved my riding performance. I am in the best shape of my life…. The typical indoor office work environment, coupled with co-workers passing germs to one another like candy, often gave me constant sniffles and occasional body aches and pains. Since retiring, they have all but gone away.”

Rob’s Comment: Duggg’s plan is too risky for my tastes. I like it that he reports on the health benefits of seeking financial freedom, as these benefits are important and too often are overlooked.

Jsever’s Story of Finding Life Purpose (Motley Fool Board), An Eye-Opening Conversation

“I got a call from a guy that I used to work with, who later became my boss for about 5 months. Nicest guy in the world–too nice to be someone’s boss, for reasons I won’t go into here.

“Anyway, he’s about 52-53 years old…. Anyway, he called me essentially looking for a job. He has 2 teenage kids at home and a wife who doesn’t work…. I believe his title at one time was ‘Vice President.’

The Crooked Path to Financial Freedom

“Today I am vowing: I do not want to be using my network at the age of 50+ to try to hook up with a job just so I can get some health insurance.”

Rob’s Comment: “Things” are great. I have nothing against the idea of spending money on “things.”

One of the “things” I spend money on is the freedom to be able to call the shots re my own future. The store that I go to when I want to buy some of the sexy and juicy and fun and frivolous freedom stuff is called The Freedom Store.

They accept payment there in all sorts of ways. I can put the money into TIPs, or stocks, or real estate, or whatever. So long as the money goes into some sort of account where it generates an income stream helping me overcome the need to work to pay my bills, the guys and gals at The Freedom Store are happy.

They are a great bunch of guys and gals, and they sell a wonderful product. But not too many people seem to know about them. They should advertise!

FoolMeOnce’s Story of Finding Life Purpose (Motley Fool Board), A Government Worker’s Path to Financial Freedom

“I plan on retiring in a few years at age 55…. When I retire I will receive about 70% of my high three salary and maintain full health plan benefits. The pension is inflation-adjusted using the full CPI. I can enjoy my current standard of living on about 2/3 of this amount.”

Rob’s Comment: One of the reasons why those seeking early retirement manage their money more effectively than those who are not is that those seeking early retirement start at the end of the process (determining what they need to be able to leave the workforce) and use what they learn to decide how to spend and save in the time leading up to that point. Following vague injunctions to “see if you can save 10 percent of your salary” will not get you to early retirement. You need to sit down and determine precise amounts of capital that you need to accumulate in precise amounts of time.

One thing you learn quickly is that it takes a lot of saving to generate each dollar of retirement spending. If you assume a 4 percent real return on your investments, it takes $25 of saving to generatee each $1 of retirement spending. An inflation-adjusted government pension offers an amazing opportunity for attaining financial freedom early in life.

Stephanie’s Story of Finding Life Purpose (E-Mail to Rob), Remembering to Mosey

“I am a single mom who up until four years ago made $12.75 per hour at a very physical outdoor job that I did love most of the time. I worked with horses and children. In the past four years, through paying off my mortgage, good money management, savings, and thriftiness, but most importantly through giving 10% of my earnings back to God, I now am almost debt-free and own 3 houses, one of which is paid for. I switched jobs and have doubled my income. I have a hefty IRA and sizable savings.

“I’ve had horses and raised my kids in a country environment for 35 years now. They are better people for it. They appreciate the value of a dollar and are not driven by making a lot of money.

“When I worked at the dude ranch, the people who came were very wealthy and seemed to always be in a rush. They were stressed and were uncomfortable at first with the slow pace. Within a day they had relaxed and could begin to enjoy themselves.

“A friend of mine (a doctor’s wife) was walking along the ranch pathway heading towards the dining room one day. She was traveling at a hurried pace as if she was going to be late. I asked her “Adrian, where’s the fire?” She stopped and stood still for a moment and said “I don’t know, I’m just so used to always having to go somewhere and do something I forgot for a minute where I was.” I reminded her that at the dude ranch we ‘mosey’. She laughed and smiled. They come here every year and I have watched her children grow and appreciate their time at the ranch and the peaceful time they have here riding horses and enjoying one another.

Achieve Financial Independence Early in Life

“People have lost something in this generation. Money can’t buy peace of mind and tranquility…. If you live from paycheck to paycheck ( I used to), you obviously have no plan for your life, your money, your time, your future, or your family.”

Rob’s Comment: Stephanie attributes the web site at Crown.org for turning her money life around. I had not known about the site until seeing her e-mail, so I cannot speak about it in detail. But it appears from a quick look that the people running the site are doing important work. I added to my “To Do” list the writing of an article on the site for the “Planet Internet” section of the site.

There are some who will scoff at the site because its money advice is rooted in Biblical principles. This is a mistake. I rarely discuss religion in a direct sense at my site. But I frequently find my attention pulled to the consideration of spiritual topics in my investigations of money problems and money solutions. All effective writing in this field has a spiritual dimension.

How could it be otherwise? When we talk about whether we are going to save or not, we are talking about whether we are going to gain control over our future lives or not. Is the quest to live a good life not a spiritual quest? Money questions are life questions. Money questions are spiritual questions.

There are of course numerous ways to address those spiritual questions. Ignoring them is not an option for those of us who want to go deep, however. Spiritual matters are the drivers of human behavior. Money advice that ignores the spiritual side of human life can never get beyond the surface and down to the roots, where the real action takes place.

I’ll be moseying along now….

Middle-Class Millionaires — Page Two

Middle-Class Millionaires — Page Three