My plan of attack at that point is a normal car of less luxury. I’d like to take an $8,500 surplus of cash and use it to invest in my future freedom and entrepreneurial endeavors. And if it doesn’t sell, I’ll continue to heat my butt in the winter, cool my head in the summer, accelerate ridiculously faster than necessary and carry myself from point A to point B in a luxury ride greater than my ancestors could have ever imagined.

I like to wash my car at a local car wash about a mile from my apartment. I go there because it’s hardly ever full, due to it being off the beaten path, and because there is an area out back where I can park, crank my tunes and clean my car out. I love the peacefulness of playing some music while I clean my car, especially on such a beautiful night as tonight. As I was on my way to the car wash tonight, I realized that all I had was twenties and remembered that the car wash machine didn’t give change. After being a little upset inside, I decided to stop at the gas station on the way and pick up a treat so I could get change.

The 15 Cent Banana

I walked in the overly busy gas station and found the candy aisle. “I’ll get myself some Mentos or something”, I thought. Then, as I looked at the price, which read $1.09, I reconsidered. A dollar and nine cents for what used to be 50 cents when I was younger, then went up to 85ish cents in my high school and college days was just too much to spend on something that would just rot my teeth. Suddenly, I remembered I had to use the bathroom. I figured, as long as I’m going to overpay for a treat, I’m going to at least use their bathroom.

After that, I walked by an aisle with bananas. “Now there’s an idea”, I thought. And right there was a single banana. “I’ll get a healthy treat and it will be much cheaper than candy”. I brought it up to the cashier, she weighed it and gave me a price that almost made me burst out laughing. Fifteen cents, the cashier said….. Oh, my…… I almost felt like I shoplifted, except the feeling was of great joy. I paid fifteen cents for something incredibly good for me and very tasty when the cheapest thing in their store other than that was over a dollar. Wow, I played those guys. Anyway, I got my change and walked out of there feeling on top of the world.

Thoughts on Regular People

Something else happened in that gas station tonight, which has happened to me quite often lately. As I walked into the bathroom, a young man, in his early twenties, was drying his hands. He had a name tag on and a polo shirt with a logo. He was an employee at the gas station. He had taken his short break in the bathroom to escape the nightly lameness of working at a gas station, but now it was over. It was back to work for him, making minimum wage, for the rest of the night.

I couldn’t help but feel bad for him. Why I felt bad, I’m not sure. I mean, maybe he’s also going to college, studying something he is absolutely passionate about, and is working there to help offset his savings to pay his way through. Or maybe he is a college graduate who’s got a full time day job where he makes good money but wants to make and save even more so he can invest it for the future. Or maybe he’s an entrepreneur who is building a business from the ground up, but needs to work part time to pay his bills as he lives cheaply, spending only on essentials. But the reality is, none of these are likely the case.

This past Sunday night, I stopped at the new Walmart down the road to pick up groceries for the week. As I checked out, I was greeted by a friendly woman in her mid forties who checked me out. She is one of the better cashiers at Walmart because she had a smile on her face, was very friendly and did her job well. Walmart is a lucky company to have an employee like her working for them. And here’s the saddest part of it all. She probably makes $9 per hour. And this woman is a pleasure to spend the two minutes it takes to check out at Walmart with.

My guess is that she works full time. She probably has a family back home, has a mortgage to pay and a vehicle or two. This is life for this woman, spending 40 hours a week or so at Walmart, checking people out. Do you know what’s freakishly familiar about both of these people I’m mentioning? I use to be both of them. When I was 16 years old, I worked at Walmart as a cashier doing exactly what she’s doing. It was the worst job of my life and to this day, I remember how miserable it was and how badly I didn’t want to do that for the rest of my life.

And then there is the gas station clerk. I’ve been there too. That job was better for me, but I got paid even less there than at Walmart. The thing about these two jobs is that the pay is crap for the time and effort you’re giving up. Gosh, if I, likely making over 3-4 times what these people do (and I guarantee that my job is 10-20 times more challenging and rewarding than theirs), have a hard time wanting to continue this for the rest of the prime of my life (through 60 years old), dammit I feel sorry for those two people.

These people work a shitty job, get paid even shittier, and most likely aren’t going to see their situations improve anytime soon. Yes, I know there are children starving in Africa, but dang, we’ve got people missing out on their potential and giving their lives up for a few bucks right here in this country. I feel sorry for these people, not because they are starving, but because they’re in a crappy situation that they most likely have no clue how to get out of.

So, What’s the Answer?

My answer to get out of it is to work smart, not hard. If you’re at a job where you get paid to physically do things like stock the shelves or sweep the floors, you’re in a bad spot. You want to be in a job where you get paid for using your brain, not your body, that’s number one.

Number two is, if you don’t see yourself loving every minute of having a job and working a 40 plus hours a week from now until you’re 60 years old, you’re like me. I won’t be working a job full time until I’m 60, even if I do get paid 3-4 times more than a Walmart or gas station employee and am 10-20 times more challenged and rewarded than them. To the majority of today’s highschoolers and college students, my situation likely looks ideal. I have a job and make good money. What else is there in life, right?

I believe that there’s more. I want my time back. I see retirees and think, “Yes, that’s the life I want, and soon.” I see businessmen in a suit and tie and think, “I don’t want that, at all”. Hey, I went to school for business and I love business. The business I want to be in is one that fits my life, one where I’m doing something that I absolutely love, and one where I call the shots. I’m just tired of being unhappy, even if I do have it better than these people above.

All in all, tonight, I’m going to say a prayer for these two people. Maybe someday, I’ll change the world enough that I’ll help just a few people out of situations like that and into ones more like where I’m at or at least hope to be at someday soon. I don’t thank God enough for how ridiculously blessed I am. I have a wonderful family, a great girlfriend and awesome friends. I also have over 4 years of living expenses socked away which gives me incredible peace of mind, motivation and options for my life. And… I’ve got a great job and income for the time being, and it’s a place where I love my co-workers and can get excited about things from time to time. If I was going to choose a situation to be in today as I continue to work towards my future goals, I couldn’t really think of a better one than the one I’m in.

Tonight’s a story about being thankful and a story of noticing others as real people. They are no different than me and they are quite intertwined with my life, yet I rarely think about them.

Should I Borrow Money?

For those looking for my answer to the question, “should I borrow money?”, the answer is no. My advice is that you do NOT borrow money, ever again. Obviously, there are people out there that will disagree with me that will likely leave their opinion in the comment section of this post, but that’s okay. My post on Reasons to Not Buy a House Even If You Can Afford It, will then stop being my most publicly mocked post thus far.

So, why not? What’s wrong with borrowing money? Well, let’s take a look at it from both sides:

Reasons to Borrow Money

Here are some reasons for borrowing money and my response, knocking each one down:

• It helps you build credit – Yes, borrowing money helps you be able to borrow more money. But if borrowing money is a bad idea in the first place, then why would you want to do more of it? It doesn’t make sense to me. The credit score is an I love debt score. That’s all it is. Sure, employers and insurance companies may check your credit score. Sometimes, that may cause them to deny you or charge you more. Perhaps you should take your services and business elsewhere. Look, I’m not saying go and trash your credit by missing payments and stiffing your creditors. I’m just saying, isn’t your financial health more important than your ability to go borrow money, especially when borrowing money hurts you in the first place?
• Interest rates are low – Yes, interest rates are at an all time low. That just means that now is a better time than usual for borrowing money. But again, if borrowing money is a bad idea to start with, then making it less bad doesn’t change the fact that it’s bad. Interest is something you pay for the privilege of borrowing money. Why pay interest when you don’t have to? Why not just save up and pay cash for whatever you are buying? The rich earn interest, not pay it. Do you want to be rich, or poor (the new middle class).
• You have to borrow money to buy a house – First of all, when did buying a house become something you have to do? Oh, you’re brainwashed into believing that buying a house is a good investment? Try Googling around on the average appreciation of personal residences and you’ll find that they just barely beat inflation over the long run. A rental house is an investment. A personal residence is an expense. It’s a roof over your head. It’s a liability because it requires work, maintenance and heating/air conditioning. Now that we know that buying a house is an expense just like rent is, we don’t have to get caught up in the hype. Saving for a house in cash is doable. People do it all the time. Thinking you can’t save for a house is not productive thinking. Yes, you can, but you likely will have to rent for a few more years. I bet it will be worth it too.
• I like to keep my savings account padded – Okay, just live below your means for a while and watch your bank account outgrow your ability to spend it. Borrowing money just to keep a pile of cash in the bank doesn’t make sense. It just means that you don’t have as much savings as you should and you shouldn’t be buying whatever you’re borrowing money for.
• I won’t be able to maintain my expensive lifestyle without borrowing money – You’re right, and that’s a good thing for you, long term. If you’re living above your means and spending more than you make through borrowing money and going into debt, do your future self a favor and stop. Can’t you hear your future self sweating bullets? He/she is begging you to stop doing this to your future. Once you cut your lifestyle and your spending, you’ll learn to stop noticing the difference at all. You’ll be just as happy living cheap as you are living high on the hog. Trust me, I’ve been through it personally.
• To go to college – This is doable without borrowing. I’ll likely get hate mail for this point alone, but please hear me out. There are cheap colleges out there if you don’t have the money or parents to help. Did you think about community colleges? No? Why not? No, they are not beneath you. They are college none the less and you’ll be more likely to be able to pay cash for it if you choose this route. So, unless you’ve considered a community college, don’t tell me that you need to borrow money for college. Another alternative is to not go to college. It’s not like it guarantees you a high paying job or anything. There are a ton of college grads in rough shape these days, with a ton of debt too yet because they NEEDED to go to college and to borrow money for it.

Reasons to NOT Borrow Money

Here’s where we get smart and start changing our mindset and future in gigantic ways. Here’s why you don’t want borrow money, ever again:

• Being in debt is stressful and it hurts you – Do some searching online and you’ll find hundreds, probably more like thousands, possibly tens of thousands of blogs that focus on getting out of debt. How many will you find on getting into debt? I’d guess very few. The common thread here is that being in debt sucks the life out of you. Why is that? Well, for starters, because, as it says in Proverbs 22:7, “The rich rule over the poor, and the borrower is slave to the lender.” Ever owed your friend money? It felt kind of weird, right? Ever loaned your friend money, in which before paying you back he spent money stupidly? As the lender in that situation, you feel some power over your friend since he/she owed you money. He or she felt it too. Being in debt is a crappy position to be in. You lose your rights, your freedom, your self worth. Being in debt hurts you.
• You don’t need the stuff you’re buying with borrowed money – What do people usually use debt for? Well, there are new cars, snowmobiles, big screen televisions, stereo systems, private colleges, houses and clothes. How many of those do you REALLY need? Likely, none. Sure you need a place to live, but do you need a 2,000 square foot house with 4 bedrooms and 3 bathrooms? I doubt it. Renting would do just fine. Do you need a brand new car? I doubt it. There are cars that run just fine that can carry you from point A to point B on Craigslist for $1,500. Clothes? You likely have a closet full of them and you’re borrowing to buy more? Not needed, obviously. You just don’t need this stuff, so why are you borrowing money for it?
• You can always find cheaper or free alternatives that you can afford – You can find a way to live without borrowing. It’s doable. Sure, I have an income and money saved so I’m far from being broke and homeless, but I believe that everyone can get by without borrowing. You just have to let go of your expensive taste. You have to hate debt enough that you’ll do anything and everything to stay out of it. If need be, move in temporarily with relatives or friends while you get ahead. You can do it without debt. You just need to open your mind to it.
• You’re on a path to a better life, not a worse one – The final and most important reason not to borrow money is because you’re on a mission to build a better life for yourself. We all are. You want to be happier tomorrow than you are today. You dream of a better year next year than you’re having this year. It’s part of our nature to always believe in future happiness and to have hope for the future. If you borrow, you’re doing the opposite. You’re setting yourself up to have a worse future than your present. Knowing that you are doing damage to the future you, how can you remain hopeful? Doesn’t it just make you sick to your stomach thinking that next year you’ll be more stressed out than you are now? Yuck, I’m not doing that to myself. From this point forward, I will make my future better than my present always. I always want to have hope and strongly believe that my hope is realistic.

All in all, I won’t say whether or not borrowing money is stupid, however I don’t believe in it and I would strongly encourage you to never do it again. If you disagree and want to borrow money, go ahead. It’s your life. But I’m living mine debt free, which means my future is going to be better than ever.

• Our culture wants me to be broke.
• No one else will look after my money but me.
• Friends and family will encourage me to spend my money and buy nice things.
• Life is packed full of unexpected, expensive things that I’ll have to pay for.
• If I have kids, their college will be expensive.
• My income is my biggest wealth building tool.
• I never want to borrow money again.
• Being broke brings me stress and anxiety.
• I won’t be at my job forever.

I had a PhD in Dave Ramsey back in 2010. I was ready to get myself out of debt, even though the hill looked steep. I wondered if I’d be able to keep my momentum once I got out of debt to continue saving and building wealth. Luckily, because of the points above and because I wanted to change my future so badly, I was able to keep the momentum. I now have reached a point where I could go 4-5 years without a dollar of income living the luxurious life I live today without charging anything to a credit card or borrowing any money. I have friends who are charging things on their credit cards this week because they can’t pay cash for their things. I’m 4-5 years away from that and I did it in three years.

Here’s what I did and what you can do too to start growing your wealth this week:

Action#1: Decide What Kind of Future You Want For Yourself

Give your closest friends or family members a call. Invite over that person in your life that you really look up to, who lives the life you want to live. Discuss your future and the direction that you want to take your life. What does your future look like if you continue down the path you’re currently on? Will you be able to have a family, spend time with your kids, travel, relax, enjoy your best years? What would it feel like to have a big hat and no cattle (a big house, two BMW’s in the garage, a lake home and all the latest tech gadgets) but no assets? What would it feel like to bring home 200k per year only to find yourself charging your gas on credit cards because your money is all tied up in loan payments? How stressed would you be knowing you were dead broke while looking so rich? What kind of future do you want for you and your family?

Take some time to decide, once and for all, what your future will look like. If the scene of being under financial stress isn’t appealing to you, you need to decide to run the other way. Do you want to be broke or do you want financial freedom? Choose. It’s a VERY important choice that you shouldn’t take lightly. I made the decision to build wealth to change my future for the better and I will NOT look back.

Action #2: Take a Good Hard Look at Your Financial Situation

From what I can tell, it’s normal to not know what’s going on with your finances. I only know of a few people in my life who really know their financial situation. When I say, “know your financial situation”, I mean:

• You know exactly how much debt you have and who you owe it to.
• You know all the cash, savings and investments you have and where it all is.
• You know all the assets you have and what they are worth.
• You know your net worth (assets minus liabilities).
• You know how your net worth has changed over the past several years.
• You know what your household income is.
• You know how much you earn and spend each month and what your net income is.

These are all things that someone who builds wealth knows. Warren Buffet knows these things. You don’t just get wealthy by accident. You decide to do it, you plan for it, you execute on your strategy and you stay at it. You need to know the things above. My best recommendation for you is to use Mint.com. If you don’t use it, go sign up immediately. It’s one of the biggest reasons for my progress these past few years.

The steps here are. Sign up for Mint.com, connect ALL of your financial accounts (savings account, checking account, brokerage account, retirement accounts, loans, credit cards, etc.). Then, categorize every transaction and continue to do so by logging in at least 3-4 times per week for the rest of your life. Done.

Action #3: Figure Out What You Want to Work Toward

What is it that you really want in your future? How important is financial security for your family? How important is lowering your stress and anxiety? Do you want to own a home someday or if you already have one, how important is paying off your mortgage? What about your children? Would you like to pay for their college so they don’t end up in trouble like many people today are? Maybe you’re like me and have a dream of starting a business someday and want to be able to do that.

No matter what you want your future to look like, now’s the time to write down everything that you want to make happen. What are you working toward? Why are you going to work everyday and earning income? Don’t tell me you’re doing it just to be able to eat out in the evenings and go to concerts or travel on your weekends. Life isn’t just about working to consume just so you can work some more and consume some more. What the heck are you doing all this for?

Action #4: Set Goals for Your Future with Specific Timelines

Now, take that list of things you want to do in your future and get serious with it. Which ones are you actually going to make happen and which ones will you leave up to chance? You likely can’t do them all, at least not right now. So take those that are non-negotiable and write them on a new list. Next, figure out when you will want/need to have them done by. This is somewhat arbitrary as you don’t 100% know what life will give you in the future but just pick dates.

Want to have your mortgage paid off in 10 years? Write it down. Want to start a business in 5 years, put it down. Personally, I have a financial goal of having at least $100,000 in investments on my 30th birthday, which is coming up quick in under a year. I’m going to make that goal happen. I am that serious about it.

We all need goals. I need them and you need them. They should be hard goals too. Don’t wimp out on yourself. Set some hard goals and tell other people about them so they can hold you accountable. Setting goals is probably the most important thing you can do to change your future. It has been in my life.

Action #5: Change your Present Direction to Point Toward Your Big Goals

Look, hopping on the freeway that’s going to take me to a $100,000 investment portfolio by the time I’m 30 is not the same road that I used to be on. I had a zero net worth at 26. What would my net worth have been if I had stayed on that path? Um, it would have been zero by 30. I know all kinds of people who have already turned 30 or will be soon that likely have a zero net worth. That would have been me. But instead, I’m planning to pass the 30 year old mark with a 6 figure investment portfolio and be well on my way to reaching financial independence.

Quick, put your blinker on, squeeze in between the two cars next to you, move over and take this next off-ramp if you need to. Get off of the road that’s taking you in the wrong direction. Once you set your goals and figure out where you want to be by when, get on the right path to get there. That means changing yourself, who you’re friends with (in some cases) and what you do. I used to watch TV almost every night. I now only turn my TV on once a week because I’m blogging so much. I used to smoke. I’m now riding my bike to work. I used to eat at Taco Johns several times a week. I now bring my own lunch to work 5 days a week. I used to buy toys all the time in Best Buy. Today, I don’t step foot in that place.

I changed my habits. In the process, I’ve made incredible progress in just 3 years, going from nothing to 4-5 times my annual expenses in savings/investments. I’m on track to make my goal by 30. I may have to make pretty big sacrifices still too. But, I’m ready and willing to make them. My goals are important to me and I set my date, which means I will do whatever I can to make it. Will you do all you can to make the things that matter most to you happen?

It’s been a while since I’ve smelled the sunscreen on my skin. What a beautiful scent it is. It’s not just the smell of it that’s so great, but the fact that it makes me happy to smell it. It comes with gobs of happy memories. It reminds me of swimming in the outdoor swimming pool in the town I grew up in as a kid. It reminds me of weekend camping trips with my family many years ago and the afternoons we spent out on the beach. It also reminds me of ocean front days that I’ve spent taking in the rays. It’s sure to bring thoughts of happiness from some of the best times in my life. Sunscreen is worn, and smelled for that matter, on the best days. It’s a recipe for happiness. It means you were outside, many times with people you love, taking in the sun and enjoying the outdoors. That’s what life’s all about.

But over the past several years, the days where I’ve smelled sunscreen have gotten fewer and fewer. Over this past year, I would guess the number is under 30. That’s under 10% of the days, which is certainly not enough. I don’t know about you, but I’m convinced that we all need to be smelling more sunscreen. In fact, we should be out in the sun (with UV protection in place), every nice day of the summer.

So why aren’t we? What happens to us that stops us from being outside more? Speaking from my own life, I can tell you what’s going on. It all started when I got my driver’s license. My days of riding my bike everywhere ended. Suddenly, I was able to sit in a comfortable chair and be transported at 55-70 miles per hour to get where I wanted to go. Heck, it was so comfortable that my friends and I used to sit in our comfy chairs and cruise around town at night for fun. Being outdoors just didn’t have appeal to us teenagers and we had all that power and laziness available to us.

Then after graduating high school, I worked more and made more money. Then I went to college and eventually moved to the big city. Sure, I went out on some walks (that’s how I got to class many days), but all in all, I didn’t spend much time outside. The air conditioner was too good. The video games were too fun. Laziness was too… easy. And now, pushing 30 years old, I’ve spent a shocking percentage of my last 10 years indoors. Most of my happy memories of sunscreen happened when I was a kid. What happened to my twenties? I spent them being indoors, going to college and working.

Of course, going to college and working have treated me well. I’ve managed to both pay off my debt and accumulate four years of living expenses in savings and investments. In addition, I have some pretty rad internet marketing and small business experience. I have even found many things that I’m passionate about and have set goals for the direction I want to take my life in the future. Was all this indoor time wasted? No, but I believe it’s something that needs to change.

We should all be smelling sunscreen every day in the summer. I’ve been spending too much time underneath florescent lights staring at a computer screen. As I’ve dreamed of before, I dream of spending the summer just hanging outdoors and doing traveling. I certainly am in a financial position to be able to do it. What holds me back is that I have responsibilities to others, which I plan on following through on. But in my future, I plan to break free from the work 9-5, 40 hour a week lifestyle. When it will happen depends on where I’m able to create an income somewhere in the range of my expenses. The important thing isn’t whether or not I’m able to do this now, it’s the fact that I’m working toward this goal.

Just like I empower and encourage myself, I want to take this time to reach out to you. Do you want more summer days where you smell sunscreen all over your skin mixed with a slight sunburn? Are most of your happy memories of being outside getting distant? Perhaps it’s time to turn that trend around. And perhaps the end goal is not to have two more weeks of vacation each year, but to turn your whole life into a vacation. My end goal is to build a business that fits my life and reach financial independence, not to tailor my life to fit my paycheck.

My life and happiness come before stuff and income. I want more sun. I want to burn through sunscreen like I do gas in my car. Oh yes, and because I want you to hold me accountable, I’m going to announce here that I plan to ride my bike to work at least four of the five days this week. I’m practicing a little Mustachianism because I believe it will get me further down the road to this life I’m preparing for and designing for myself.

The thing that I’m afraid to break to these friends, peers, colleagues and even in some case, family, is “I live on a different planet than you”. I don’t mean for this to come off as arrogant and I’m certainly not implying that I’m better than anyone here. It’s just that I can’t tell them the full scale of what I’m doing because I’m living on a different planet.

So how does a person who’s living on half or less of their income live in a world that spends everything they make? Here’s how it’s done:

Keep It To Yourself

Telling your friends and family that you want to become financially independent in your 30′s is sure to shock their system. Although we know that it’s possible and that others have either already done it (Mr. Money Mustache), or are making serious progress towards achieving it (Dividend Mantra), regular people just don’t understand the things we humans can accomplish when we put our everything into it. And since people just can’t seem to handle the shock this craziness gives them, it’s best if you keep your crazy plans of early retirement/financial independence on the down low.

Write About It

Even though most people can’t seem to handle the craziness of you taking your life by the horns and changing it forever, there are others out there who want to hear about it. Some people want to know if what they’re feeling is okay. Sometimes, people are looking for inspiration. There are people out there who will seek out what you have to say and who’s lives you can impact by sharing your story, your “why” behind what you’re doing and your progress on making your goals happen. When I started to bore my family and friends by talking about saving money after getting out of debt, I turned to my new blog as a channel to talk about what I was doing. None of my real life family or friends wanted to hear about this. But luckily, there are thousands of people like you and me out there who apparently do want to hear about it. So I say, start a blog (sign up for a BlueHost account and install WordPress) so you can talk about all the great stuff you’re doing in your life. There are people who want to hear about it and you can help people change their lives by sharing your story.

Develop Friendships with People Like You

A few months back, I reached out to Jason from Dividend Mantra to say hi. I connected with his blog and his story. We’re on similar paths. He’s around my age, works full time, saves over half of his income and has plans to reach financial independence/early retirement within the next 10 years. What a coincidence because that sounds a lot like my position. We’re now pretty good friends and we’ll be meeting for the first time in Florida next month. He’s a great person to talk to about all of this. When I’m on a different planet than everyone else I know here, he helps me feel like I’m on the right path anyway. When you’re doing crazy things to achieve the lifestyle you really want to live, you need to partner up with friends who will encourage you and motivate you to keep going. Regular people who aren’t “into” the stuff you’re into won’t offer much in the way of encouragement. Make sure to reach out and build these friendships.

Help Others Move to Your Planet

Little by little, I’ve persuaded people in my life to live differently. No one I know has completely adopted my strategy on going all in to achieve financial freedom, but I have definitely influenced change in people for the better. My sister and brother in-law just got out from under the soul crushing weight of debt this month. They did it over the course of the past few years while having two kids (my sister has stayed home with them) and with my brother in law finishing up his college degree (while being the breadwinner). What the….? Yes, they kicked it. They are debt free now and I influenced it. How awesome is that? If you’re doing awesome things and you can’t help but spill a little of the inspiration and persuasion out on those who are willing and able to pick up on it, by all means do it. You’ll likely help those people change their lives. What better thing is there?

Always Respect Others and Their Decisions

I try real hard to not come off as the preacher type. I also try not to judge others. Obviously, I disagree with the spend/work/spend rat race and am paving my own path out of it, but what about those who are happy on that path? Good for them. You won’t hear me judging people and calling them names because they choose to buy big houses or BMW’s with their paychecks. I won’t do it and I don’t believe it’s good for you to do it either, but who am I to judge? Do what you want and I’ll do what I want. I respect people who spend all their money. I just choose not to live like that. This blog and my attitude in general is one of helping people who want to be helped and letting everyone else alone. Go spend your money and live your life normal people. Just don’t ask that I live that way. I value respect and treating people kindly, no matter how they choose to live their lives. I think there’s enough nastiness and hate out there. That is not who I am and I wouldn’t recommend being like that to anyone.

It’s tough living on a different planet from those you interact with. But dangit, I keep at it because I know I am making my future better and that’s worth everything to me. Sometimes, the things that are the hardest are the best for you. No, actually that’s almost always the case, isn’t it?

I’ll let you come to that conclusion. Until the age of 17, I was raised by one of the cheapest dads I knew. And…. after watching him struggle with cancer in my teens and eventually die at around my 17th birthday, I think you all that are judging me can back the **** off at the fact that I had my college paid for.

Yes, I know some people had it and have it WAY worse, but why does this always have to be a war on who has it worse? Let’s all just shove it and start where we are at today. Today is life. Today is all we have. So, number one, back off people. And number two, let’s all stop judging each other. Life will hit us all in different ways AND God will bless us in different ways.

In my early twenties when I was in debt, partially from college loans and partially from a third nice car, which I financed 100% of, I was on my own without parental assistance. And I had gotten myself into $25,000 of debt. Dangit, it sucked.

Today, I’ve been out of debt for two and a half years, although I’d still be paying on my car and my student loans if I wouldn’t have decided to ATTACK my debt. Why did I do this?  Well, first, because, DEBT IS HORRIBLE and IT SUCKED being in it. I was paying out $410 each month for my loans and only bringing in $2,000. Let’s do the math here. Over 20% of my take home pay was GONE before I even got it.

And before I stopped my idiocy, I was even doing dumb things like opening a new Target credit card to buy a TV and putting a $1,500 computer onto my U.S. Bank credit card. Yes, I actually did that, and both of those within 2 months of each other. So, let’s just say that I had an average credit card bill of $400 or more each month as well, which is debt too.

Debt…. it’s…. um…. SOMETHING YOU NEED TO ATTACK. It’s not okay to be in it. Yes, I know, you may not have “had it easy” like I did. My gosh, get over it. Why are people mad at me for being out of debt? I got myself out. I could have done it the other way and spent myself into oblivion. And if I did, I would be more accepted in society, apparently. People would say, gosh, I feel sorry for that Kraig. He lost his dad as a teenager and now he’s just got a rough life. Poor him.

But, since I pulled my head out in my early twenties, stopped spending like I was in congress, and got the hell out of debt, there’s a change of mindset. I’m now the guy who had it easy. After all, I must have, if I am doing well financially today. I must be cheating the system.

The truth is, I’m not cheating. I’m a person who earns a regular income. Here’s the unique way I’ve decided to live: I spend less than I make. Crazy idea, I know. Oh, and the reason I’m able to spend less than I make and for that matter save and invest money to change my future, is because I ATTACKED my debt when I had it.

I cut cable, I stopped going out to eat, I said no to friends and family, I sat home on weekends, I had boring summers and I held on to my crappy, hand-me-down furniture. I have lived what most call a “boring life“. I sacrificed and I went crazy because I wanted to get out of debt more than anything in my life. It was my SINGLE most important goal at the time. Sometimes, you need to focus and get so mad at something (a good kind of mad), that you will do everything in your power to get out of that mess. I did that with my debt and that’s why I’m out.

Having things given to you is rarely a good thing for you. That’s not why I’m out of debt. Oh, and by the way, on my college expenses, I lived at home for my first two years and went to a community college. Don’t tell me that I’m where I am financially because of hand outs. Just don’t do it. And I won’t judge you either. We should be helping each other, not bringing each other down.

Further along those lines, my mind took that concept further. What if money wasn’t in the picture? What if I had enough of it (I know, it was hard for me to picture this too, but bear with me) that I didn’t need anymore, ever. What would my life look like? What would I change?

My boss actually asked me this question a couple weeks ago when at a Twins game (How cool is it that we get to go to company Twins games?). He asked, “Kraig, what would you do with $5 million? I said, I didn’t know. He then asked, “Tell me the first 5 things you’d do”. I said, “Okay, fine. The first one you won’t like though. I’d quit my job.” Whether or not I should have told my boss that, who knows. But it’s true, I’d leave my job. Not because it’s not a great place to work, but because the reason I work a job at all is for money. Without that need, I wouldn’t have one.

So again, what would I do without this need for money? Have you ever asked yourself this question? It’s not easy to answer. But here’s the first bunch of thoughts that entered my mind:

I’d Stop Working at a Job

Like I said above, I’d stop this. Yes, having a job is the respectable thing to do. But without the need for money, I’m not working at a job anymore. Jobs are a pain in my opinion. I’m just not cut out for a job. I want to make my own decisions. I want to do my own things. I want to change my direction when I see fit, which brings me into the next point.

I’d Start a Business or Two

I really already have. You’re looking at it. This blog is my micro business that is the incubator/test subject for my future self and future business ventures. You have to get started somewhere, and this is my starting line. If money didn’t matter, I’d start a business or two, even if I wasn’t making money at first. Of course, I’d always go at it with the goal of making money, because making money on something is a good indication that you’re adding real value.

I’d Spend Time with Family and Friends

If money was no longer a concern of mine, then I’d have all my time back. With 40 plus hours of my week back in my own hands, that opens up a lot of possibilities on what I can do and where I can go. With family and friends that always welcome my company and could use my help with things, I’d be spending a bunch of time with them to do just that. A couple friends back home have houses that they could always use more help with. My mom has a list of initiatives that she’d like help tackling. My sister/brother in-law would likely welcome an extra hand here and there, since my cute little nephews are running around getting into everything. My brother is inviting as well and loves company. I have real value to offer those that I care about. I’d offer that value much more freely if time and money weren’t obstacles anymore. That would obviously do wonders for my relationships as well.

I’d Travel, Enjoy Nature, Exercise Outdoors and Take Pictures

I dream of taking month long trips at a time. Many of my dream destinations lie quite close to here. I feel like I could spend a month in Yellowstone and surrounding areas alone. I’d camp, hike, bike and take in the beauty both with my eyes and with my camera. I’m a closet landscape/outdoor photographer. I love the stuff, but have it on the furthest back burner in my life. It’s too bad. My dream “job” has always been to travel and do landscape photography. I really appreciate the beauty we have on this earth and not only do I love taking it in, but I love capturing it. If money were no option, I’d do more traveling, more enjoying nature and more taking in of the world’s beauty.

My best guess is that outside of money, I’m a person who gives my time to those I care about to help them and be there for them. I’m also a person who wants to build something that adds value to people, such as a blog, a community, a program to help others, etc. Any business I’d ever try to build would entail something I believe would help others. In addition, I’m a person who wants to enjoy the beauty of this world and take it in.

Who are you outside of money? Have you ever thought about it? If you haven’t, I have to warn you, it’s pretty tough to do. Our culture has programed us to never think that way.

Now, I don’t pretend to be an expert investor. I just started investing last fall, right before the presidential election. The market had been headed north for a few years at that point, in which I missed out on its gains. After making up my mind that I wasn’t going to be buying anything with my fairly large savings account, I decided to start investing. Being a follower of Mr. Money Mustache and Jim Collins of jlcollinsnh, I started to buy into the whole idea of index investing. I even read the book, A Random Walk Down Wall Street, to further my knowledge of this strategy. Whether or not index funds are the best way to go, I’m not here to give advice on. Some would say that picking individual stocks is a better idea. Others, like my friend Jason from DividendMantra.com, would argue that dividend growth investing is the best way to go. Hey, whatever floats your boat. I think those strategies are pretty rad. But, I am a believer in the strategy I’m taking, which is investing in index funds.

The path I’ve chosen is at the recommendation of Jim Collins of jlcollinsnh. He has a stock series on his blog that I have to admit, was the single biggest help I had in learning what to do with my growing savings account. Jim laid it all out there and set the expectation with me that the market goes up and down, sometimes in huge amounts. He says if you’re going to invest in stocks, you should invest for the long haul and STAY THE COURSE if you want to grow your wealth and not lose your rear end. So after reading his series and thinking hard about my risk tolerance, I took a look at myself, my spot in life and decided that I could handle it and stay the course if things got rough.

Things have been real cushy in the past 6 months that I’ve been investing. The market is up over 10% since I opened my Vanguard account and started shifting money over to it. I’ve seen an increase in the value of my assets of over $5,000 in that time frame. It’s been quite exciting. I’ve read that I should always use caution when trying to time the market, or in other words, trying to use price fluctuations to my advantage. Many argue that this can’t be done effectively by the majority of people, over the long term. I’m not sure what my stance is on this quite yet.

Here’s my strategy on it all. I like to follow Jim, as I believe he knows what he’s talking about, but I also like to follow Warren Buffet, who OBVIOUSLY knows his stuff. Here’s the quote that I do my investing by:

“Be fearful when others are greedy and greedy when others are fearful.”

And so, I’ve bought on the down days. I have not sold, because I am a long term investor, in it for the long haul. I plan to continue to build my portfolio out until the day that I’m financially independent. Even after that, I don’t ever plan to sell assets at a higher rate than they will be growing at. I plan to be a long term investor, never really decreasing my portfolio’s value over the long term.

Back to Warren’s quote. I think he’s dead on. As noted in the book “A Random Walk Down Wall Street” and in Jim Collins’ stock series, the market fluctuates like mad. However, it always goes up over the long term. Why does it fluctuate? Because people speculate like crazy. When the media tells the whole country that a “fiscal cliff” is approaching, people panic and sell their stock, because they think the market will tank. The same thing happens with a presidential election, where emotions go wild.

Right after the election, people freaked out. I believe they thought that Obama would wreck the economy with his spending plans. The market took a dip after his election. I bought stock. Then at the end of the year, the news scared the crap out of everyone with worries of a “fiscal cliff” approaching if congress didn’t come to a deal. Investors panicked and sold a bunch of shares, causing the market to drop. I bought more shares.

And today, with worries over China’s economy, the market took it’s biggest dip since last November. Shares of VTSAX, the stock I own, which is the Vanguard Total Stock Market Index fund, dropped $1.00 per share. I own 1,418 of them so I lost $1,418 today.

Some would say ouch, but what did I do? I bought another $5,000 worth of shares today. I’m in a great cash position and I believe that the market is being fearful right now, which means it’s my turn to be greedy.

Am I scared? No, because I have a bunch of additional capital sitting in the bank that I can buy more VTSAX shares with at a discount, if the market keeps dropping. I’m all about buying cheap stock, so bring it on stock market. Keep going down, I dare you.

It’s pretty great when you can lose $1,400 and not have to worry about it. That just means that you’re investing a ton of money and you’re that much closer to reaching financial independence. If you aren’t willing to take the hits of a drop in the stock market, you won’t be set up to ride the growth of it when it takes off.

Can you do it too? Of course you can. Here’s how:

Step 1: Track Your Finances – How do you think I came up with that $50,000 number and the 24 month timeline? The data is sitting in my Mint.com account, that’s how. I have 3 and a half years of income and expenses sitting there for me to slice and dice and evaluate in any way I want. I can see how much I make each month after taxes. I can also see how much I spend each month after everything is paid. The difference that’s left over is my net income, or if I was spending more than I make, my net loss each month. If you’re going to save your money on purpose in order to reach big goals, you need to track your finances. How do you do this? You sign up for Mint.com, immediately. Here’s how to get started.

Step 2: Cut Your Expenses – Back in early 2010, I was well on my way to tracking my expenses. Once I realized how high my spending was, it brought on a lot of stress, because I spent a lot of money. My fixed bills were even high. I had that $350 car payment, my student loan payment, HD cable and internet, etc. Something had to give because I just wasn’t making much progress. And then….. I planned a vacation. And then…. I had to get emergency dental work done (and I didn’t have dental insurance). To make a long story short, I was spending as much or more than I made. Dammit, is what I finally said, because I was sick and tired of being broke. It was time to cut.

So I cut my cable TV subscription that I loved so much. I cut my eating out. I cut my free flowing entertainment budget. I just said, “that’s it”. I stopped spending my money. And during that summer of 2010, I didn’t do much at all that required spending money. And you know what? I was out of debt 7 months later. It…. paid…. off….

Step 3: Get Out of Debt – That’s right, I made a decision to get the hell out of debt. I could have made excuses for why I should stay in debt. I could have said, “well, it’s only $150 per month” or “it’s a low interest rate”, but I didn’t. I listened to what the rich were saying, which was “get and stay out of debt”. The truth is people, debt holds you down. As long as you keep your income tied up in payments, you’re not going to build any wealth. In case you’re wondering, “How do I get out of debt, Kraig?”, boy do I have news for you. It’s simple, you start listening to Dave Ramsey, immediately. He has a live radio show every day during the week from 2-5pm EST, which you can listen to in two ways:

• Live at DaveRamsey.com
• After the fact on iHeartRadio

Step 4: Start Saving what will now be YOUR Money – WOW, did it feel good when I was finally out of debt. It felt good because finally, it was MY money that I was saving. It wasn’t GMAC’s money. It wasn’t the Federal Student Aid’s money. Dangit, it was my money. And so I started saving it. I mean, it was on auto-pilot at that time. I had already cut my lifestyle. Now, I just needed to keep living the way I lived while digging myself out of debt. It wasn’t that hard to do, honestly. A crazy thing happened while I started saving my money after being out of debt for the first time…. I got a couple of raises. Weird…..

To save 50 grand after getting out of debt there really is only one rule: SAVE…..YOUR….MONEY…. Pretty straightforward, isn’t it?

Step 5: Become Boring - Just last week while dining out at a very fancy and tasty restaurant for my 29th birthday, my friend’s girlfriend once again called me a cheapskate. It’ll happen when you’re saving this kind of money. The truth is, I’ve been saving over half of my income for 3 years now. That doesn’t happen while living the most exciting life of all your friends. It happens by being boring. Yes, I missed out on the joy of buying fellow drinkers at the bar a round of shots. Yes, I wasn’t able to fly to Mexico last winter and to Tahoe for skiing last month. Darn, I even missed out on the fun of upgrading my car to a fancier SUV with navigation. Oh, and the most boring of all, I have stayed in my 800 sq ft run-of-the-mill one bedroom apartment for coming up on 6 years instead of buying a house of my own like many of my co-workers have done.

Gosh, I could have a yard for grilling out, a garage for polishing my car (or even parking a classic car or Harley in), but I don’t. I have a one-bedroom apartment with a small deck (that I can’t have a grill on). The point is, it can be a boring life when you’re saving money. But by boring, I mainly mean that you won’t be showing it all off. It’s likely to be mundane. That kind of thing happens when you’re doing incredible things.

Step 6: Keep Going – The final and most important step to being able to save $50,000 in two years on a regular income is to keep going. I didn’t quit when the going got tough. Saving half of your income is not easy. It’s tempting to want to spend it. It’s tempting to go buy a house when you reach a 20% down payment. It’s tempting to go and get what you “deserve”. But I had and still do have bigger and better goals in mind than “stuff” or “lifestyle”. I am on a mission to change my future, reach financial independence and start and build a business of my own. You’ll need to be willing to keep at it once you start if you want to make this happen in your own life.

That’s how I did it. I saved half my income for over three years. I’ve also been fortunate in other ways by inheriting some money from my grandma and buying mutual funds before a major upswing in the stock market so I’m doing even better than the progress I’m mentioning here. Guess what happens when someone who’s saving half their income receives a blessing such as a financial windfall or a major upswing in the stock market where they’ve invested a big chunk of money? They save it. Once the habits are formed, they are hard to break. If you’re where I used to be, broke or in debt, you can change it. It will, however, take time (sometimes a lot of it), a significant amount of internal motivation and perseverance.

But… you can do it. I believe in you.

Right around the time that my cash first started accumulating above and beyond my emergency fund, I started this blog. If you go back and read those first posts, I was mainly striving for a larger bank account balance for ambiguous reasons. I talked a lot about creating flexibility and options in my future. I discussed the idea of getting rid of my credit cards (which I still haven’t done, although I don’t use them anymore). I also talked quite a bit about wanting to save money to pay cash for my first house. I was one confused person, but I was certain that I wanted to be wealthier than I’d ever been before. The reason… was kind of unclear.

Then sometime last year, I started to believe a house wasn’t what I really needed. After that idea subsided, I decided to invest my stash of cash, since having it parked in a savings account was helping my bank but hurting my net worth. So I invested my money with a lot of help from the stock series posts of jlcollinsnh. And what a nice boost my savings have gotten since that day in October 2012, when I first opened a Vanguard account. I’ve earned over 10% on my money since October.

With all this investing and not wanting to buy a house in the near future, I’ve been on an early retirement or financial independence kick. I’ve been reading blogs like Mr. Money Mustache as if they’re going out of style (obviously they are going into style instead) and even discussing the idea of striving for financial independence here on this blog. I calculated that at my current rate of income and spending, I am on track to reach financial independence in right around 9 years.

It’s all quite exciting. But the biggest question of all is, “Is early retirement what I’m really striving for?” I don’t think it’s about retirement, but instead about freedom. There are a couple ways to get this freedom, one being deferring it for 9 more years, while I pile up the necessary $500,000 it will take me to never have to worry about money again. Or the second way, which is to build and maintain a lifestyle business.

What’s a Lifestyle Business?

A lifestyle business is a business that one builds, that caters to their life and their hopes and dreams and allows them to live the way they want. Yes, it requires work, but the goal is to engineer your lifestyle business in a way that fits in well with the life you want to live.

I’ve been intrigued by this idea lately. The idea of this is very similar to what I’ve envisioned for myself since being a kid. My sister and brother would recall a younger me dreaming of owning a fancy motor home someday instead of a house and living in it, going from place to place and experiencing it all, out there.

I’ve discovered a couple blogs on this topic lately:

1. Tropical MBA
2. Location 180

I’ve also discovered a podcast on the subject, called the Lifestyle Business Podcast, which is co-created by the author of Tropical MBA.

While listening to one of these podcast episodes the other day, I was prompted to immediately go out and get the book, The 4-Hour Workweek, by Tim Ferris. And so I did. And…. I read the whole 400 page book in 2 days, which is a definite speed record for me.

The Philosophy of The 4-Hour Work Week

It’s a good book. I’m not about to recap the whole thing, but Ferris has an incredibly unique perspective, one I’ve never heard before. He’s inspiring for one. By the time I was 50 pages into the book, I knew I had to finish it quickly and I knew that a lifestyle business was for me (which, like I said before, I’ve pretty much always known). Secondly, Ferris is all about helping you build a business that you don’t have to be working at. I’ve read this strategy before in The E-Myth Revisited, and have always agreed.

Here’s the thing about the 4-Hour Work Week type of business that’s different from the norm. A 4-Hour work week kind of business takes 4 hours a week to run. Why and how? It’s that way on purpose, so Tim can live the life he wants to live. And it was built that way through that very principle being the end goal. Ferris didn’t accidentally build something that ran on it’s own. He did it on purpose.

It’s not that he doesn’t like work, it’s that he likes traveling and other fun things more than sitting at the office. Can you blame him? I can’t.

These lifestyle business gurus (other than Ferris) seem to be in the same boat, although I hear less from them about the whole not working many hours thing. Their main goal is to build a business that allows them to be location independent and not stuck in some office cubicle. If they want to travel all the time, their lifestyle business will be built to allow for that. It’s all about building something that fits your life, which is the opposite of building your life to fit your job, like almost ALL OF US DO.

So, I’m Pretty Into This Stuff

All in all, I’m digging this lifestyle business stuff. As you know, I’ve always been interested in starting my own business. I’m now convinced that a lifestyle business is the type I am aiming to build. And as far as the 4-Hour Work Week strategy goes, why the heck not? Many weeks, I’ll likely be more than excited to put in the time working at whatever it is I am doing, which I will obviously love. But other weeks, I’ll want to ditch it all and go to the beach, go spend time with my family or go camping in the mountains for a week at a time. So yes, I am going to want the option of only working 4 hours a week if I choose to.

So, now for your thoughts. Have you thought much about this kind of “job” or “business” or whatever you want to call it? I’m pretty convinced that this is the future for most smart and talented people like all of us, not office/cubicle jobs. But it could be 50 years before this begins to really take off. How unfortunate for those who wait.