I was always just a guy sharing with you what I was learning about money. But now I get emails from people I’ve never met telling me I’m the first person they thought of when they crossed seven figures, or that they read some article I wrote two years ago and decided to change their whole life.
These are my favorite emails to get because it’s why I do what I do.
Dan recently wrote to me, and I quickly discovered we’d wrestled with the same decision: Walking away from one life to start another. He and his wife have a great perspective about money and life, so I asked him to share their story with you.
Dan, what’s your background?
I am a husband and father of three boys (ages 8, 5, 2) in my mid-30s from the Midwest. After graduating from college I returned home, bought a small home, got married, and started a career in consulting. With the addition of each kid to our home we were warned we’d need to move from our 1,200 sq. ft. home to something bigger. We were told it so often we started believing it — what did we know — we’d never done this before.
We started looking at new houses and each time we looked we’d always walk away feeling like “Why are we doing this? We’re happy where we’re at.” This wasn’t part of some master plan. We were just happy, so we stayed. My wife worked in marketing, and my consulting career paid well so we found ourselves saving at a very good rate. I never thought of ourselves as frugal, just simple.
As I progressed in my career, our savings continued to grow, and we started asking ourselves questions like, “What are we doing this for? What are we saving for? What are we working for? What is our plan?” We looked at our numbers and realized if we didn’t change anything we’d have enough to be financially independent by our mid-50’s.
If we wanted, we could just find work that covered our annual expenses, work a lot less, and slow down to be more present in life. This occurred at a time my career was becoming increasingly stressful. I was spending less time creatively solving problems for my clients (what I liked), and more time working through politics (shockingly, firm politics did little to solve my clients problems).
Complicating matters, I was on the cusp of a career-defining promotion. I just kept thinking about things in terms of stories, “I know the story if I stay here — long hours, more stress, less independence. That story has already been written!” We ultimately decided to write our own story.
How did you navigate quitting your job?
I’d love to say it happened in an instant, that I stormed into a meeting and said, “I’m quitting!” but it was far from that. I mean, these were my friends, and I had a great career. Over the course of a few years I tried leaving on several occasions, but always backed out.
After many long discussions with my wife about what type of life we wanted, and after working through the numbers, I finally found the courage to leave the only place I’d ever worked. And the crazy part, I did it without a plan of what to do next.
I took the summer off, lost my identity, thought I found it, lost it again, and just worked through that cycle for a while. At the consulting firm I felt needed, and I was Type A so thrived in that environment — now, I was irrelevant. (Which I highly recommend becoming for a while, because it teaches you to find relevance in something beyond your professional identity — something you’ll eventually need to do anyway.)
After three months of brainstorming what I should do next, I started getting calls from former clients and before I knew it had stumbled into an independent consulting career. I was intentionally working a lot less (2-3 days a week), making well above what was needed for our expenses, and setting my own schedule — I accidentally created my dream job!
My wife and I are both self-employed now. We are firm believers in intentional decisions, simple living, and being able to answer why we are doing what we are doing. I credit our early decision to keep living in our small house, despite the pressure from others, with spurring our movement towards financial independence.
Whether I am able to sustain an independent consulting business or not I am confident things will work out, and extremely proud we are creating our own story.
What’s been your experience with money?
I must have learned by observation because I don’t remember any particular conversations with my parents. They were practical, lived below their means, and I observed this.
I read The Millionaire Next Door during college and that put me on an accelerated path — I started teaching myself.
I’ve always enjoyed going out with friends, going to games, taking trips, and still do — I just naturally prioritized that over material things.
How much does your family spend and save?
We spend roughly $95,000 a year, so definitely not on the low-end with our spending habits, although I do take inspiration from those who spend far less. We understand the math and realize we could require zero income if we cut our spending in half but we’ve made intentional decisions we’re comfortable with.
For example, we send our boys to private school. We’re happy with the decision and understand the tradeoff. We also have significant costs for healthcare now, give to charity which has always been a priority, take trips with our boys, go out with friends, and we’re big sports fans so we go to games every once in a while.
We regularly challenge our spending to make sure we’re aligning it to our priorities — spending on “stuff” is very low. Our view on spending is you need to be intentional. You need to be honest with yourself about whether something will truly make you happier.
If my wife and I are going to spend $300 on new headphones (which I was considering) we’d go through this exercise: For $300 would you rather go out to eat 10X, have 3-4 awesome nights out with friends, or have headphones that you may or may not use? Sometimes the answer is the headphones, but going through this thought process puts the spend in perspective.
With self-employment our cash flow has been less predictable but we will save in the neighborhood of 30% of our income vs. 50% when I was working full-time.
How are you planning to generate passive income?
We invest in Vanguard index funds and receive dividends, which we currently re-invest. When we stop producing income we will utilize those payments for our living expenses.
Any tools you use?
We are dedicated Quicken users. I’ve got nothing but love for all the modern tools like Personal Capital, Mint, YNAB, etc., but I started using Quicken out of college, have my whole history there, and it just works.
What challenges have you experienced?
There’s been a number, but I’d say the top ones include:
- The decision to walk away from a career I worked hard to build (especially where I was at in my career).
- Working through the loss of identity and relevance when I left my job.
- Defining our purpose and why we are doing what we are doing.
- Knowing you could make much more money but getting comfortable not pursuing that.
- Comparing ourselves to the FI/RE “Joneses” — there are so many great financial independence/retire early sites out there now with people doing amazing things — take it all in but be confident in your own decisions, even if they are different.
Each of these challenges has involved plenty of conversations with my wife, thinking, writing, thinking we have it figured out, and then working through something new. We have learned a ton through this process, and have found treating everything as one big experiment allows us to not get overwhelmed.
What mistakes have you made?
From a financial perspective, I recall one of my college era investments in a high growth technology company that absolutely went bust during the dot-com years. In hindsight it was a small price to pay to discover index funds early in my life.
What money advice would you give your 22-year-old self, and if you can place us when you were that age.
I had just graduated college and was starting my career. If I could give myself money advice it would be to be confident in who you are and your relationship with money. There will be a lot of people around you who will think differently than you, but you might be the one that’s right.
And for fun, what item, for $100 or less, had the biggest impact on your quality of life?
My library card which is $0. I continue to be amazed at what the library offers for free, and continue to be amazed at how many people buy e-books rather than get them for free through the library’s digital offerings.
1. Figure out why you’re doing what you’re doing. I say this a lot, but the worst thing is a deathbed regret that you never lived the life you wanted. This isn’t about money, it’s about designing your life rather than just going with the flow. Do that first, then figure out the money part.
2. Become valuable and options will follow. When you build a specialized skillset you become more valuable and when you’re more valuable you gain more control over your life. I like that Dan wasn’t even looking for work but work found him because of this fact.
3. Learn to quit good things. We know we should quit things that are bad for us, but sometimes it’s important to quit things that seem good (like jobs, cities, even relationships). Why? Because when you quit good things you free yourself to change and grow in new ways.