[As part of our weekly column by Mr. 1500 of 1500Days.com – a fellow blogger who retired at 43!]

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So, I’m financially independent and no longer work, but I still have a load of debt. And I love it. This debt has made me some serious money. I’ll explain all, but let’s back up for a moment.

Mortgage Debt

That debt is my home mortgage. I bought my last home for about $175,000. I had the cash to buy it outright, but didn’t. And for reasons that I can’t quite figure out, a lot of folks, especially in the financial independence community, insist on paying off their mortgage early. I’m in the opposite camp. I never pay even a dime more than I have to.

The main reason I didn’t pay cash for my home was because I wanted to keep the money around in case an opportunity (rental real estate) presented itself. This never happened, but something much more interesting did.

Paying Off The House vs Investing

I never got that rental property, so left the money in an S&P 500 index fund. I love numbers, so let’s run them to see how this turned out:

• Mortgage: 15 years at 3.25%
• Amount borrowed: $140,000
• Mortgage interest I’ll pay over the course of my loan: $37,073

Brace yourselves, here come the juicy bits. First, the chart below shows the slightly above-average performance for the S&P 500 since I bought my home:

In the time I’ve had my mortgage, each dollar I’ve left invested has grown almost 63%. The means that the $140,000 that I left invested is now worth $228,200. This is a gain of $88,200. So now, we arrive at this:

$88,200 (S&P 500 growth) >> $37,023 (total mortgage interest)

Less than 5 years into my mortgage, I’m up by: $51,177

How do you like them numbers?

But! But!! But!!!

I can feel the anger in the crowd:

The market has been on an incredible run!

It sure has, but in how many 15 year periods has the market returned less than my interest rate (3.25%)? I have no idea how to figure this out, but I’ll bet that it’s not common. Maybe someone smarter like Michael Kitces or Papa ERN has the answer. I don’t lose sleep over this.

A paid off house gives me peace of mind!

Why? Wouldn’t a bigger pile of money give you more peace of mind? If the S&P 500 returns for the duration of my mortgage are consistent with past performance (~10% with dividend reinvestment), my $140,000 will grow to $584,000.

I paid off my house early and now just invest the surplus.

That’s OK, but you’d probably have more money if you didn’t pay off your house and just invested the whole lot instead.

Debt is evil!

I can get behind this one a little bit. If you have no self-control and worry that you’ll blow your money on handbags, golf club memberships and cruises, please pay off your house. Don’t even consider doing anything else.

And I Didn’t Even Mention…

Interest rates will go up: Would you feel foolish if you paid off your 3.25% rate only to have your bank account pay you 5%? My federally insured (FDIC) Internet bank account was paying over 5% in 2006. Banks won’t be paying you 5% (or even 3%) any time soon, but the rate trajectory is upwards.

Powder keg: Once that money is gone, it’s gone. Well, almost. You can take out a line of credit against your home, but those rates are variable. See the point above.

Mortgage deduction: This is overrated, but is still valuable to some.

Let’s Reconcile

You’re mad at me. I know it. While I won’t apologize, I will pat you on the back. If you own your home free and clear, you’re in the minority. Only 20% of Americans are in this boat. You’ve done well for yourself. But you and I have different goals.

My goal is to deploy my money in the most effective way possible, even if it means having debt. And by effective, I strive to maximize my pile. A big pile is peace of mind in my book.

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EDITOR’S NOTE: Many of you of course know I’ll agree to disagree here, but I love me a healthy debate so by all means jump on into the comments and let’s talk about it :) I think Mr 1500’s points are dead on if you’re a more “numbers/logical” type person, however, if you’re a more “emotional” one such as myself, well, you need to do what helps you sleep better at night. What’s the point of having more money in the bank if it makes you miserable?? Only YOU know what’s best for you and your family, so keep all this stuff in mind, but at the end of the day make the calls that are most aligned with your own happiness. No shame in EITHER routes here as both of them increase your net worth! It’s not like you’re blowing your money on crack cocaine!

(It does remind me of another guest post we featured here a handful of years ago though… Hard to feel bad for the guy, but it does prove Mr 1500’s point: How I Lost A Fortune Getting Out of Debt)

[This post, Why I Don’t Fret About Debt, was first published by Mr. 1500 on Elite Edge Money]

[As part of our weekly column by Mr. 1500 of 1500Days.com – a fellow blogger who retired at 43!]

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My cover as a blogger was blown last year when a story about us went viral.

I knew something was wrong when the blog went down. When it finally came back up, I had over 30,000 page visits and it was still before noon. On that day, we weren’t so anonymous anymore.

We then started getting texts from friends and relatives:

Hey, you’re on Yahoo!

You have a million dollars? What???? Huh??

To my surprise, it turned out to be a much less painless experience than I had assumed. No one asked us for money. No one treated us any differently. I was hoping that the article would trigger some interesting conversations about money, but that didn’t happen either.

Life moved on. Except for one person who did want to talk money.

Aunt K Loves Her Job!

One family member was excited to learn about our secret lives. The first conversation took place last year when we had the big publicity. It went something like this:

• Aunt K: That’s so awesome that you’re planning to retire! Congrats!
• Me: Thanks! How about you? At what age do you see yourself retiring?
• Aunt K: Not any time soon. I absolutely love my job. I’d do it for free! I’d like to retire, but probably not until 65.
• Me: That’s wonderful! If you’re doing what you love and you happened to get paid for it, that’s hardly working.
• Aunt K: I know! It’s amazing.

Unfortunately, Aunt K’s bliss was not to last. A couple months ago, we saw her again and she was singing a different tune. While Aunt K loves her core job, there are other problems. She works in a school district that has issues with administration. The state that she teaches in is also mismanaging the teachers’ retirement fund, so she’s worried that all of the money she’s saving may be blown by politicians.

I feel bad for Aunt K. She loves teaching, but the circumstances around it have changed. Just last year, saving money wasn’t a priority and she dismissed the idea of financial independence. Now, she worries that she’ll never be able to stop working when she’s finally ready to.

Excuses, Excuses, Excuses

I hear folks making excuses for not saving All. The. Time. Here are some of my favorites.

“I love my job!”

Aunt K’s excuse is the most common one that I hear. If you love your job, that’s awesome! What an amazing gift in a world where many folks dread their 9-5! You’ve got something wonderful there.

However, will your job always love you? Plenty of folks who worked at Enron loved their jobs too. There are always other factors at play. Robots and artificial intelligence are going to start taking more and more jobs. This will be a major societal change that you don’t want to be on the wrong side of it.

“I’m going to die young.”

This is the favorite excuse of a good friend. He insists that he will die before he’d ever retire, so he doesn’t save. I’m not sure why; both of his parents are in their 90s and he has no serious health problems.

And why would you want to bet on an early death anyway? What’s the backup plan if you don’t die?

“The money won’t be there for me anyway, so why bother?”

Bad things happen to good folks. Maybe you know someone who retired in 2008 right before the Great Recession clobbered us all. Maybe a family member got taken by a Bernie Madoff character. This stuff happens, but not to most. Put your money away and stop worrying.

“I could never do that.”

A friend recently lamented her financial position:

We have nothing saved!

I replied with:

Get rid of the new SUV.

And:

Rent your mother-in-law apartment on Airbnb.

And:

Take local vacations instead of exotic ones.

Every single suggestion was met with the same response:

I could never do that.

Well, I hope you plan on working until a ripe old age because you know that whole retirement thing? You’re never going to be able to do that.

Money doesn’t matter. Until it does.

My mantra in life is this:

Hope for the best, but prepare for the worst.

Optimism is the only way to go through life. And a little preparation can make you a better optimist. Because I’ve taken care of myself financially, I’m prepared to deflect the curve balls that life throws at me. Money doesn’t matter most of the time. But when it does, and you don’t have it, it’s going to hurt.

To the folks who make excuses for not saving money, I say this:

Financial independence isn’t about quitting your job. It’s about options. If you love your job, stay there. It’s much better to work because you want to than because you have to!

And also:

You get nowhere running on the hedonic treadmill. Stuff doesn’t bring long term happiness. Spending time with loved ones and meaningful activity does. A frugal, simple life is the most efficient and rewarding way to live.

If there is anything true about life, it’s that it’s an ever changing, unpredictable journey. If you would told me 5 years ago that I’d no longer be programming computers or have a job, I would have thought you were crazy. But, the serendipitous turns of life are what makes it fun and interesting.

Just save some money so you can embrace the fun opportunities when they present themselves. Save enough so you never have to worry. Money doesn’t matter. Until it does.

[This post, Money Doesn’t Matter. Until it Does., was first published by Mr. 1500 on Elite Edge Money]

[As part of our weekly column by Mr. 1500 of 1500Days.com – a fellow blogger who retired at 43!]

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Life is good in retirement. I’m thrilled to have a net worth of $1,900,000 which enables me to live my life on my own terms. Instead of answering to Mr. Bossman, I wake up and do whatever I want.

On some days, I’ll ride 40 miles into the mountains. On others, I’ll spend hours at the library. Money is a wonderful facilitator. Sometimes, the money even enables questionable purchases like fancy cars and human kites. But I digress…

If I could give you one piece of advice, it would be this:

Never stop learning.

Once you become stuck in your ways, you become an intellectual deadbeat. Don’t do it.

I have enough money so that I no longer have to pay attention to it, but I’ll never stop learning. I discover things about money every week that surprise me and make me a better saver/investor.

Today, I’ll share some of my favorite money hacks with you. I’ll also be sharing questionable underwear choices. Don’t worry, it will all make sense. (Or worry, because there are pictures!)

Money Hack #1: Writing every transaction down

Until recently, I never kept track of my spending. A couple of years ago, I started recording every dollar that went in and out. To state that I was shocked by my spending is an understatement.

Having to answer to a spreadsheet is a powerful behavioral changer. I suggest at least partially automating the tracking which brings me to my next tip:

Money Hack #2: Using a spreadsheet to track your spending

I created a spreadsheet on Google Drive which adds up my spending as I go. Here is my real spreadsheet from April where I blew a load of money on underwear and travel:

If you don’t like the hassle of a manual spreadsheet, you can also use software like Mint or Personal Capital to track your dollars.

And what do I hear? You want to see what $50 underwear look like? No, I probably shouldn’t… You really want to see? OK, brace yourselves sensitive readers. It was a 3-pack:

Money Hack #3: Loving Credit Cards

I wade into dangerous territory here. Credit cards are like nukes. Use them responsibly and they do wonderful things. Use them carelessly and:

BOOM!

People ask me questions like this all of the time:

How much should I sacrifice when I’m saving for financial independence? Should I skip vacations?

You don’t have to sacrifice anything. Here is proof:

What does that have to do with anything?

I took that picture on the Eastern Coast of Kauai where I traveled with my family of four. We woke up every morning at dawn to watch the sunrise and frolic in the surf. We’d hike and snorkel in the afternoon. At night, we ate dinner on our patio, listening to the waves roll in.

In case I’m not painting the picture correctly:

It was one of the best weeks of our lives!

And the best part? All four airline tickets set us back less than $200. We were able to do this using credit card points.

Now, travel hacking is a voluminous subject. If you’re not learned in the ways of travel hacking, check out the Travel Miles 101 course (free and great!) or J’s one-on-one interview with Brad. And if you need a card, you may want to check out Mad Fientist’s credit card tool.

But wait! Before you even consider any of this, you must raise your right hand and repeat after me:

I will use credit cards responsibly! I will never, ever carry a balance!

Don’t let credit cards nuke your finances. Do let them take you to Hawaii.

Money Hack #4: Never thinking of purchases in terms of *present* value

Nothing drives me crazier than when I hear someone say this:

My new car is only $25,000.

It isn’t $25,000. Money invested in the markets typically takes less than 10 years to double. Unless you’re close to death, big ticket purchases can set you back hundreds of thousands over the long term. Think long term to fully appreciate the impact of all purchases.

Money Hack #5:  Using Personal Capital

Life is complicated, and so are your finances. Between my 401(k), savings, checking and investments accounts, I have my money in about 3,384 different places. At least it feels that way.

This problem is easily remedied with a Personal Capital account. Personal Capital aggregates all of your accounts into one place. Here is a screen capture from my own Personal Capital dashboard (it’s OK to look, no underwear pics this time):

Best of all, Personal Capital is free. Who doesn’t like free?

Money Hack #6: Studying computers

This one actually came from my grandmother three decades ago. She knew computers were going to be a “thing” and would say this to me every time I saw her:

Study computers!

My grandmother was crazy in a lot of ways, but this was some of the best advice I ever received. There are loads of unfilled computer jobs. And you don’t have to go back to college for a degree. There are boot-camps all over the United States where you can spend under a year studying and come out with a good job. Many will even refund your money if you can’t get a job.

I did this myself – dropping out of pharmacy school to attend an accelerated program. 30 weeks later, I had a great job and never looked back.

And if you’re still unsure about why you should study computers, consider how many folks in the financial independence community had jobs in high tech. Mr. Money Mustache, Mad Fientist, Go Curry Cracker!, ThinkSaveRetire…

What hacks do you have for us?

I’ve barely scratched the surface here. I’d love to hear about some of your favorite financial hacks? What makes you clamp down on your spending? What tools do you use to grow your wealth?

Hit us in the comments so we can all learn more.

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[Bikosaurus painting up top by my awesome artist friend, Madalyn.]

[This post, 6 of My Favorite Money Hacks, was first published by Mr. 1500 on Elite Edge Money]

[As part of our weekly column by Mr. 1500 of 1500Days.com – a fellow blogger who retired at 43!]

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Since you’re here on Elite Edge Money (BAS), I know that you’re no dummy. You’re actually savvy and smart. There are millions of you that read BAS, so it’s a silly exercise to generalize, but I’m going to do it anyway. If I were to characterize the average BAS reader, I’d say that:

• You’re interested in money and personal finance: At the core, BAS is about money. Duh. Maybe you’ve struggled financially and stumbled across BAS from a Google search. Or, you found BAS from a media mention. In any case, you’re here to learn and better your financial life. Good on you!
• You have character: Most financial thought leaders look like this:

Did you ever think you’d be taking financial advice from someone who looks like J$? Me either.

• You’re unconventional: I’ve always enjoyed BAS because it’s different. Money can be the most boring thing ever. Is talking about compound interest or savings accounts fun? Of course not. BAS makes money fun and interesting. Where else can you read about cults and rich garbage collectors?

I like unconventional. I also like underdogs, so let’s talk about some other sites that I enjoy that you may not have read yet.

Financial Underdogs & Resources

If you read BAS, you most likely read some of the other big blogs. If you’re a Financial Independence junkie, you read Mr. Money Mustache. If real estate is your game, you’re probably a member of BiggerPockets. If you’re old school, perhaps you’ve been reading Get Rich Slowly from the start. While those are all more than worthy, today I’d like to introduce you to others that I enjoy.

And I’ve always liked to root for the underdog. It’s just more fun. Maybe that’s why I’m a Chicago Bears fan instead of the New England Patriots? Or maybe I just enjoy pain. (Hey, stop laughing at me!)

Investing 101 (jlcollinsnh)

The number one question I get is this:

How do you invest in the markets?

The answer is simple:

Low-cost index funds.

Not so fast. This is one of those funny cases when the question is much more complicated than the answer. Are you confused yet? Jim Collins excellent Stock Series explains it all. If you prefer paper, pick up his book: The Simple Path to Wealth.

Financial Wizardry (Mad Fientist)

The second most frequent question that I get is this:

How do you retire early if all of your money is in pre-tax accounts like 401(k)s?

Luckily, this question has an easy answer too. The Mad Fientist explains it all in this post called How to Access Retirement Funds Early. And the Mad Fientist has lots of other great content including:

• How to use a Health Savings Account as a Retirement Account
• Traditional versus Roth IRAs
• And who could forget about the Mega Backdoor Roth

And I couldn’t talk about the Fientist without mentioning the Financial Independence Podcast. Listen to Mrs. 1500 and me here!

Podcast (ChooseFI)

ChooseFI is a newer podcast that I greatly enjoy. Despite being fresh on the scene, Brad and Jonathan sound like seasoned pros. Episode 21 (The Pillars of FI) and 36 (The Why of FI) are particularly good. And if you just can’t get enough of me, here I am again on Episode 14 discussing the Phases of FI.

Real Estate (Coach Carson)

I first met Chad (Coach) Carson at a blogger conference a couple of years ago and was immediately impressed. Chad is a smart guy (Rhodes Scholar finalist), real estate entrepreneur and a genuinely thoughtful person. Also, we both studied Biology, so I finally know someone who I can talk about the Tricarboxylic Acid Cycle with. Geek alert!

Chad’s passion in life is teaching and he offers a free course about getting started in real estate investing. I can’t think of a better resource if you’re interested in real estate. He also offers a paid course when you’re ready to dive into the weeds.

Entrepreneurship (PopUp Business School)

I read a comment on a recent post here that made me sad:

I think it’s real cute that you think living on $40K/year is frugal. Do you have any idea how that sounds to people living on less than $25K/year with no hope of employment?

I didn’t like the attitude behind this comment because I know that everyone has the potential to earn money and live a wonderful life. It isn’t always easy to discover what you were born to do, but when you find it, sometimes it’s hard not to make money.

I recently met an incredible person who helps people from all walks of life with their entrepreneurial dreams. His name is Alan Donegan and he’s one of the founders of the PopUp Business School. In his PopUp course, Alan and his team teach folks how to start businesses with little to no money.

And Alan provides this course for free. There is no up-sell on a future course. Alan funds his school through grants and corporate sponsors.

While PopUp is mostly in the U.K., he’ll be running his first PopUp School Business School in the United States this month in Colorado (sorry, all filled up) and there will be more to follow.  To learn more about Alan and PopUp Business School, listen to his interviews on Mad Fientist and ChooseFI.

High Earners (Physician on FIRE and Biglaw Investor)

The Physician on FIRE is an anesthesiologist ($$$$$), but lives a modest life in Midwestern America. I’ve met him a couple times and he’s just a regular guy who happens to be a doctor. Oh, and he’s a gifted writer and philanthropist.

I also recently met the BigLaw Investor in NYC. Biglaw is an interesting guy who writes about personal finance from the viewpoint of an attorney. Just like the rest of us, lawyers make financial mistakes too. Also, did you know that lawyers make up just 8% of the millionaires in the United States?

I enjoy Physician on FIRE and Biglaw Investor because they show what money management looks like from a perspective that most don’t normally see.

Book (Set for Life by Scott Trench)

I met Scott Trench a couple years ago and was immediately impressed. One of the first questions he asked me was this:

What books have you read recently?

Anyone who likes to read is a friend of mine.

[FYI: If you haven’t checked out Rockstar Finance’s new Book Directory they just put together, take a look when you’re done reading this: Personal Finance Book Directory. They just released a full report on it as well, which you can find here that’s powered by 200 bloggers in the space.]

After I rattled off some of my recent reads, I asked Scott the same question. He mentioned a bunch of brainy books which I added to my list.

And that’s not all. At 27, Scott is Vice-President at BiggerPockets, the real estate investing social network that I mentioned at the beginning of the post.

Scott’s own Set for Life is one of the great books that I’ve read recently.  Scott’s book is a blueprint for millennials that want to achieve financial freedom. Every college graduate I know is getting this book as a graduation present.

Killer Writing and Amazing Insights (Morgan Housel)

I have no idea how I started reading Morgan Housel, but I’m thankful that I did. Morgan is smart, creative and one of the most gifted writers who I’ve had the good fortune to read. Want a hilarious take on the financial media? Read his Honest Business News Update. Here is why time to think is so critically important (Charlie Munger, one of the greatest investors and thinkers of our time, agrees):

I insist on a lot of time being spent, almost every day, to just sit and think.

Here is a listing of Morgan’s recent posts.

Update! (Forgive my stupid male Neanderthal brain)

More than a couple folks have pointed out that this list is comprised of males. Males only. Like a bad fraternity or the audience of a Jim Carrey movie. Doh!

I didn’t mean it. Blame deep biases and my Neanderthal brain. Here are some excellent female bloggers that deserve no less attention than any of the folks already in this list:

• Frugalwoods: I was going to include the Frugalwoods in this post; I haven’t found a better writer than Mrs. Frugalwoods. Plus, her husband hooked me up with some really good beer. I left the Frugalwoods out of the original version because their blog is already massive. Plus, I didn’t want to offend Frugal Hound by calling her an underdog.
• Broke Millennial: I’ve know Erin from almost the start of my blogging career (2013!). While most blogs fizzle out after a couple months, Erin’s career has grown. It’s surreal to see your friends on TV. And, she just wrote an excellent book.
• Our Next Life: Mrs. ONL produces amazing content. Enough said.

Underdogs

It may not be right to call any of these folks underdogs. The Mad Fientist produces one of the top financial independence podcasts. Morgan Housel was a columnist for the Wall Street Journal. However, these creators are so good that I can’t help but mention them. They’ve all improved my life in one way or another.

How about you? Do you have any favorites that you feel deserve more recognition? Let us know in the comments so everyone can see!

[This post, My Favorite Underdogs, was first published by Mr. 1500 on Elite Edge Money]

[As part of our weekly column by Mr. 1500 of 1500Days.com – a fellow blogger who retired at 43!]

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At a recent party, I had a very interesting conversation with an old and good friend (I’ll call him Jeff). It started when Jeff asked me how my work was going. Jeff had no idea that I had quit my job. He also didn’t know about my blog or stealth wealth, but I had a couple strong beers in me already and felt bold, so I let loose:

• Jeff: How’s life? How’s work?
• Me: Well actually, I don’t work anymore. At least not at a typical job.
• Jeff: What? Really!? May I ask what happened?
• Me: It’s a long story, but the short version is this: I had a really bad day at work back in 2012. After that, working until 65 or even 55 sounded like a miserable proposition. I figured out how much money I would need and then made a plan to reach it. At the same time, I started a blog to document the journey. I’ve since reached my goal, so I left my job. I enjoyed working on the blog so much that I continue to do that.
• Jeff: What’s the blog called?
• Me: 1500 Days.

Quick note: I’m much less secretive than I used to be. Major media coverage blew our cover a long time ago, so I don’t care much anymore. And even after telling people about the blog, not many bother to read it (EDITOR’S NOTE: My friends still ask me what my blog is called too – despite telling them every year for 9 years+! I find the only ones who actually care are those who are serious about their $$$…)

Back to our conversation:

• Jeff: Wow, that’s incredible!
• Me: Yeah, life is good! And one thing I want to stress is that financial freedom isn’t about not working; it’s about working at what you love. I make a little money from the blog, but my real paycheck is happiness.
• Jeff: Wow, you know I hide money from Julie? She likes to spend, but I’m a saver too. So, I take the money and invest it.

I had already known that Jeff was good with money because of previous conversations, but hearing that he hid money from his wife surprised me. I’ve heard of spouses hiding money, but it’s always to keep a bad spending habit secret. Before this conversation, I had never heard of a spouse hiding money to invest!

The story got stranger later that night, but I have to tell you about my friends first.

Jeff And Julie

My wife and I met Jeff and Julie about 10 years ago. They were newly married and in many ways, their lives mirrored ours. We were both young couples who had just had our first child. We hung out together until we both moved away. Now, we live near each other again.

I’ve always considered myself fortunate to know them. They are kind, giving, smart and hard working. They have adopted two children they met through the fostering program. I trust both of them like I trust few others.

So, it makes me sad that they’re not on the same page financially. I’ve seen lesser marriages disintegrate over similar issues.

Later That Night…

Julie was at the party too. A couple hours later, Jeff started up the conversation again, but this time Julie was by his side:

• Jeff: That’s so cool that you’ve got your finances together. Julie and I aren’t quite on the same page. I like to save and she…
• Julie: I LOVE to spend money!
• Jeff: See? That’s why I have to hide it from her.
• Julie: It’s just that spending money feels good!

Another quick note: This conversation was strange and made me slightly uncomfortable, but their tone wasn’t antagonistic. Both were smiling. In the past, I probably would have conjured up a lengthy lecture, thinking I could teach a lesson. Now I realize people don’t enjoy lectures, so I tried to gently add my two cents without being overbearing:

• Me: I think you both know where I fall in this argument. It’s OK to spend money, but you should take care of your future first. Spending will provide you with short-term happiness, but financial freedom is forever. And let me tell you; it feels pretty d@mn good!

I let it go and the conversation moved on to something else.

Where Do Jeff And Julie Go Now?

A couple days after the party, both Jeff and Julie liked my blog’s facebook page. Jeff shared one of my posts on social media a couple days after that, so I know they’re paying attention to my online ramblings.

And it’s occurred to me that they might read this. I’m not sure how I feel about that. I don’t want to hurt them in any way and I don’t think they’d be offended, but you never know. If they see this, I hope it sparks more communication between them. They’re already pretty good at that, but more never hurts.

Money is simple and complex all at the same time. At the most basic level, we work and get paid. We take that money and fund our basic needs like shelter, food, and clothing. After that, it gets more complicated. Certain folks like Jeff and me value the security that money provides, so we save it. Others get a similar sense of security, or maybe comfort, from spending.

Jeff and Julie have different ideas of how they want to spend their money. I think that they’ll be OK, but why be OK when you could be great?

How about You?

This conversation made me wonder how many couples are on the same financial page. Money is often cited as a contributing factor to marriage failure. Another friend went through a divorce recently and confided that differences in finances were a major factor in the split.

I’m thankful that my wife and I are compatible in money. If we break up, it will be for something ridiculous like the thermostat setting. Hey, don’t laugh, I’m serious!

Jeff and Julie: If you are listening, know that I’m here for you.

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EDITOR’S NOTE: I actually didn’t feel like this was the worst system in the world? It seems they both know each other pretty well, and although financially it would be better if *both* were on the investing side of things, it’s not like Jeff’s really “hiding it” is he? Julie knows he’s doing it, so it’s kinda working for them… I invest our money all the time without telling my wife the details, but she knows I’m doing it and never has to worry about it. I just lucked out that she happens to be a saver more so than a spender :)

In fact, maybe all Julie needs is a “Spend Whatever The Hell You Want” type budget where each month she gets $XXX to have fun with? So she gets to feel good throwing it around, but Jeff gets to keep doing the investing? As long as their ultimate goals are being met in the end, I don’t see a problem spending money freely if it’s within reason and truly makes you happy… I think that’s the main variable missing here w/ the story – are they both on the same track with what they want in the future? Not everyone wants to retire super early like us nerds ;)

[This post, “I Hide Money From My Wife”, was first published by Mr. 1500 on Elite Edge Money]

[As part of our weekly column by Mr. 1500 of 1500Days.com – a fellow blogger who retired at 43!]

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I really like my life. I’ve arranged my life so that I can do what I want.
– Warren Buffett

I’m a big fan of Warren Buffett, but not for the reason you may think. While Warren is an investing genius, there are plenty of others who have also figured out how to build vast wealth. The trait that makes him really great is that he’s a genuinely good person with plans to give almost all of his billions away to charity. And he’s frugal too, living in the same home for most of his life.

And I love listening to Warren’s folksy wisdom in person every spring. If you’re a shareholder of Warren’s company, Berkshire Hathaway, you have the opportunity to attend the company’s annual meeting. The big party takes place in Omaha and is informally called the “Woodstock of Capitalism.”

It’s a fun event where folks from all over the world ask Warren anything they want during the question and answer session. My wife even asked Warren a question about real estate at the 2016 meeting. Here she is on the big screen:

There is one question that will always stay with me though. At the first meeting I attended, a 20-something year-old asked Warren what books he’d recommend for getting rich. Warren didn’t have many recommendations, but he went on a tangent that was much more interesting. While ruminating on his age, Warren said this:

I’d give away every cent I have to be your age again.

Healthy Is Better Than Wealthy

Warren is a wise man. As he approaches 90, he realizes his days on the little blue-green sphere we all share are almost over. Money means less and less as we approach our expiration date.

Health is the most important aspect of life.

I hadn’t been taking good care of myself until recently. Retiring early has allowed me to go for runs in the middle of the day or swing the kettle bell first thing in the morning. If you don’t have your health, what else matters?

Relationships Are Better Than Riches

Everyone wants to give you advice when they hear that you’re expecting your first child. This certainly happened to me and I quickly grew tired of it. But when I was least expecting it, I received the best child-rearing advice ever.

I was at work when my manager called me into her office. She asked me to sit down and I thought that I was in trouble for playing pranks on my co-workers (not an uncommon occurrence). Instead, she told me that she had advice for me. I was skeptical, but her advice blew me away:

All your children want is your time.

She went on to say that I didn’t need to buy them tons of toys or take them to Disney every year. Just give them your attention. Deep down, that’s what they really want and need.

I walked out of her office in a daze. The advice was simple, but profound. And it made perfect sense. How many times have you seen children act out only because they want the attention and love of their parents? My manager’s words were completely true.

***Quick note: If you’re a parent reading this now on your phone, you have permission to read the rest of this article before setting your phone down and asking your children how their day was. :)

Hundreds of Thousands Don’t Bring You Happiness

I need about $40,000 per year to fund my life. Per the 4% Rule, that means that I need a nest egg of $1,000,000. My portfolio sits at $1,400,000 and I have an additional $400,000 in home equity. For those unskilled in the ways of math, that comes out to $1,800,000.

When I left my job, I expected an instant boost in my happiness. And then it didn’t happen. I started thinking about it and had an epiphany:

The money didn’t make me happier either.

I was no happier as a millionaire than I was when I was just out of college with $60,000 in debt. Wealth doesn’t create happiness. You must figure that out for yourself!

The Paradox of Money

None of what I’ve mentioned requires money. You don’t need money to be healthy. You certainly don’t need it to spend time with your family.

Where does money fit into all of this then? To get money, we must trade our time. You can always earn more money, but you can’t change your expiration date. The only thing you can do then is increase the amount of time where work is optional.

And this is the paradox of money:

It’s simultaneously the most and least important part of life.

While you don’t need money to be happy or healthy, it buys time. And once you have time, you can structure your life optimally. The real goal is this:

Save enough money so that you don’t have to worry about money.

Money is not the end, only the start.

Advice For My Younger Self

If I were to do it all over again, I wouldn’t buy two new cars. I’d hack my living situation with roommates. I’d build wealth as fast as I could to minimize my working life and maximize my freedom years.

Time is a finite resource. If you’re younger than Warren, embrace his wise words and appreciate the years you have ahead of you. Put the pedal down and start living!

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EDITOR’S NOTE: I think about this trade off alllll the time and actually have a saying for it – “I’d rather be young!” That’s what I tell myself anytime I catch myself getting jealous of what someone older than me has that I desperately want :) It doesn’t help when they’re much younger than me, haha, but it does if they’re much older! No way I’d trade decades of my life for more money. Also makes you appreciate how long it takes to acquire such wealth as well – it doesn’t come fast.

[This post, The Paradox of Money, was first published by Mr. 1500 on Elite Edge Money]

[As part of our new weekly column by Mr. 1500 of 1500Days.com]

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I left my job about 4 months ago and haven’t regretted it a bit.

My career didn’t even last 20 years. I started my first real job in January of 1998 and my last day was April 13th of 2017. Leaving wasn’t an easy decision.

I have money security issues and suffered from an acute case of One More Dollar Syndrome (the first cousin of One More Year Syndrome). When I started my journey to financial freedom way back on January 1st of 2013, I figured I would need about a million to quit ($40,000 per year per the 4% Rule). When I left, I had almost $1,400,000 saved up. And this didn’t include $400,000 in home equity.

Despite the big nest egg, picking up the phone to tell my boss the bad news was one of the most difficult calls I’ve ever made. Over four months later, I’m still adjusting, but life is pretty great.

How I Learned to Stop Worrying about Money and Quit my Job

The numbers part of retirement is easy. Figure out your annual spending and sock away enough to last a lifetime. The emotional part; not so easy.

Here is how I learned to stop worrying and quit my job:

#1. I’m frugal and flexible

I planned my retirement money needs according to the 4% Rule which has no shortage of detractors. It isn’t 100% safe, but nothing is. My advice is to stay frugal and flexible:

• Frugality: If you can live on $40,000 per year, it doesn’t take much income to move the needle. Just generating an extra $10,000 turns the 4% Rule into the 3% Rule, drastically improving your odds of never running out of money. You can make $10,000 by renting a room, driving for Uber or getting a part-time gig.
• Flexibility: Being able to react to the curve balls life pitches isn’t just a good strategy for early retirement, it’s a good strategy for life. Don’t get set in your ways. Be mindful of the world and be ready to pivot in the unlikely event that your net worth craters by 50% the day after you quit.

#2. I considered the worst case scenarios, and created backup plans for my backup plans)

Some of my worst case scenarios include:

• Massive stock market drop early in retirement
• Lack of meaning in my life

And one my biggest:

• Boredom

The worst case scenarios are not that bad once you start thinking about them. If the market tanked, I’d step up my side-hustles or go back to full-time work for a year. If I was bored, I’d hire a life coach.

Perhaps my ultimate worst case scenario is this:

I die regretting all of the things I didn’t get around to doing!

I’ve helped eliminate that one by leaving my job. But, I still needed to come up with backup plans for financial disasters. My worrying brain constantly barrages me with what-ifs:

• What if the stock market drops by 50%?
• What if health insurance costs $3,000/month?
• What if my wife or I come down with a major illness?

Here are my backup plans, in order of mild (stock market drops 50%) to terror (in a temporary bout of insanity, I “invest” all of my money in an MLM and lose it all):

• Pick up a side-hustle
• Go back to full-time work
• Sell my home to get the equity ($400,000) out
• Move to a foreign country for cheap living and health care
• Create my own MLM!

Hmmmm, maybe I should implement that last one today… Brace yourselves readers. Today I’d like to introduce you to my new business: Mr. Money Marshmallow!

Just kidding. As much as I enjoy marshmallows, I really, really dislike MLM schemes. And now I’m all distracted. Pull yourself together man!

I don’t think that I’ll have to do any of those things, but knowing that I’ve thought through my worst case scenarios gives me peace.

#3. I realized that risk is OK (or even great!)

Quitting work at 43 isn’t the safe route. If I wanted that, I’d work until I’m 62 and continue to stockpile money. I’d have good insurance the whole time, a decent car, and maybe even… Oh wait, I feel something coming on:

*yawn*

To hell with that. A normal life of safety sounds pretty damn boring. I want to live on my own terms and follow my own ambition. Besides, no one ever did anything great taking orders from Mr. Bossman in a cube, right?

#4. I know that the work I love is my best work

I learned an important lesson on my journey to early retirement:

You can’t retire to nothing.

Retiring just for the sake of retiring is a horrible idea. Any well adjusted human needs meaningful activity to be happy. Many of us get it from work, and if that’s you, you better have something lined up when you leave. TV won’t cut it.

I have my writing. Without it, I probably wouldn’t have left my job. Financially, I would have been better off sticking with my career as a programmer. However, money only funds a certain amount of happiness. At some point, you max out that happiness account and need to move on.

This is exactly what I had to do. I realized that more money wasn’t going to make me happier, but working on my blog, a book, and related projects would.

I Should have Done it Sooner

Everyone says it. And here I am saying it too: I should have left my job sooner.

Chances are, you’ll say the same when it’s time.

Humans have a tendency to let their fears stand in the way of their dreams. We cling to worst case scenarios to justify the chains that bind us. And to make it more difficult, leaving work before you’re old and grey is still an unconventional concept! Humans are followers, and not many members of the herd leave their jobs early.

But I can’t tell you how much I’m enjoying my life now. Every day is different. This is how one played out earlier this week:

• Woke up at 5am (life is too good to spend it sleeping)
• Biked 20 miles up into the mountains (life is too good to not be in optimum health)
• Ate breakfast with my girls
• Worked on three different blog posts for two hours
• Biked with the girls to the library
• Went home for lunch
• Spent the afternoon at the pool with the girls
• Polished up a chapter on a book I’m working on
• Dinner
• Family walk
• Played Ticket to Ride with the family

I left my job about 4 months ago and haven’t regretted it a bit. I encourage others who’ve already reached FIRE to strongly consider it too.

[This post, How I Learned to Stop Worrying About Money and Quit My Job, was first published by Mr. 1500 on Elite Edge Money]

[As part of our new weekly column by Mr. 1500 of 1500Days.com]

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Did you know that the Titanic almost didn’t sink? Here’s what happened:

The captain took corrective action when the ship was about 1000 feet away from the iceberg. The starboard (right) side of the ship brushed the ice, tearing open five compartments (the ship could sustain damage to four and stay afloat). The rest of the story lies at the bottom of the North Atlantic.

The Titanic came very close to missing the iceberg. Remember that it didn’t hit the ice head on; the ship merely brushed it. If evasive action had been taken 2000 feet out (1 minute earlier), the same maneuvers would have been enough to avoid the iceberg completely. If the iceberg had been spotted 3000 feet away, the captain would only need to have given the wheel a little nudge. And from a mile out, a very small input would have been enough.

Are you saving like the Titanic?

Early actions are powerful and the same concept applies to your savings and retirement. Let’s go through an example with the following assumptions:

• Saver Sam puts away $20,000 at age 25
• Spender Steve also puts away $20,000, but waits until age 50
• Neither contributes additional money
• The rate of return is 10%. (This is consistent with the long-term return of the S&P 500 with dividend reinvestment)

Even though Saver Sam never contributed anything after the initial $20,000 at age 25, he’s going to retire at 70 with a healthy nest egg of over $1,400,000:

Spender Steve’s retirement isn’t looking so great. Since he waited until much later to take action, his nest egg sits at only $114,550:

Spender Steve, do not pass Go. Do not go to Boardwalk or even Marvin Gardens. Do not go to the golf course or the beach. It’s time to start looking for a side hustle!

The Problem (and how to solve it)

Just like the Titanic, waiting to save and invest until late in the game is a very, very bad idea. Having to earn income at age 70 isn’t as bad as drowning in the frigid North Atlantic (and may actually be a good thing; work keeps the mind and body active!), but it’s a lot better to work because you want to, and not because you have to.

The problem is that too many folks don’t think long term, which is one of the fundamental keys to success for acquiring wealth (if not the most important one). Never forget this:

You can always work for money, but it’s much better to let money work for you.

And the sooner you put those dollars to work, the more time you give those little guys to multiply. Give them enough time and they’ll earn far more money than you ever will.

The way to convince yourself to save is to consider the future value of every purchase. Allow me to illustrate with a real-life example:

A family member (I’ll call him “John”) made a Titanic move recently. Instead of saving, he traded in a perfectly good car that was paid off for one that costs $25,000. The trade-in, with only 30,000 miles on it, had loads of life left in it. When I asked John about this curious transaction, he replied:

Well, I just wanted the newer model and I have a good job. $25,000 just doesn’t seem like a lot now that I’m out of college.

He took out a loan for the car, but to make the math simpler, we’ll assume he paid cash. It won’t make much difference in the final number. Here is what the $25,000 would be worth at age 70 if it had been invested:

Painful, isn’t it? John’s car didn’t cost him $25,000, it cost him over $1,000,000. And that’s not including the higher insurance premiums either. Sigh…

Don’t be like the Titanic

Know that I’m not telling you to never have fun. I’m only asking you to prioritize saving by doing one or more of the following:

• Keep your old car: It got you around fine in college. Keep it for another 5 years.
• Choose housing wisely: I hate the phrase “starter home.” Why can’t a modest home be a forever home? If you’re young and don’t have a family yet, get a roommate.
• Take advantage of free money: 401(k)s are incredible tools for building wealth. They reduce your taxable income and many employers provide a match (free money!)

Very small inputs early on can have huge effects down the road (or ocean). If Captain Smith had known about that iceberg from 2000 feet out, the Titanic would have sailed on its happy way. There would have been no movie; Leonardo DiCaprio and Kate Winslet could have been in Batman and Robin instead! (Sorry for planting the visual)

If you don’t start saving, you won’t die a horrible death, but you may very well end up working far into your golden years. And that’s a visual I’m not sorry to plant in your heads.

[This post, Are You Saving Like the Titanic?, was first published by Mr. 1500 on Elite Edge Money]

[As part of our new weekly column by Mr. 1500 of 1500Days.com]

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See that sign up there? I noticed it on a hike in Boulder Colorado a couple weeks ago. I had no idea what a paraglider was, but I was determined to find out. The thought of flying greatly excites me, but I always dismissed the idea of owning anything that flies because of the extreme cost.

I didn’t have to wait long to learn about paragliders. On the way back, my youngest child started yelling excitedly and pointing at something in the sky:

I waited for the paraglider to land and then accosted the pilot with questions. He told me that I can get certified in just a couple of weeks and gave me some websites to research equipment and lessons. It turns out that the sport isn’t cheap:

$7,000 (!)

That is a lot money to fly around on a big kite. However, I didn’t have to think about it for even a second; I’m doing it. Flying around the mountains of Colorado will make me happy, so I think this may be the best $7,000 I’ll ever spend. Unless I screw up and spiral to my death. Then it won’t be so great. If that happens, I hope death comes quick! Sorry wife and kids!

Bikes

I love bikes. I love them so much that I have three of them:

The grey Cannondale is a road bike that set me back $950. I take it for rides into the mountains where I push myself until my legs burn. I’ve ridden 128 miles in a day and gone 50 mph on it.

The black Giant is a full-suspension mountain bike that I purchased used for $1,000. I’ve flown over the handlebars many, many times. Somehow, I’ve never injured myself beyond bad scrapes. Knock on aluminum.

The red one is an eBike that I built for about $1,600. This is my commuter machine. I can get around town quickly, eliminating the need for car trips when time is tight.

Beers

Alcohol is toxic. If you’re going to drink something that’s bad for you, it should taste good. These all tasted very good:

There are folks who will spend $500 for one bottle of beer. I’m not that crazy, but I have spent $10 on one. Drinkers of Lite beer think that is crazy. So be it.

Important note: Beer is for after flying or biking!

What I Won’t Spend Money On…

I’ll blow $7,000 becoming a human kite, $3,600 on bicycles (and a skateboard) and $10 on a bottle of beer. Here is what I refuse to spend money on:

Too much house

Money tied up in a house isn’t working for you. Your primary home is usually a poorly performing investment, so every place I buy is modest. I also try to buy homes in need of some love and then put some sweat equity into them.

Fancy hotels

I’m in a hotel room to sleep. They all look the same with the lights out. I pay a little more not to stay in the Bedbug Inn, but fancy hotel chains aren’t for me.

First class airline seats

I never understood why someone will pay $1,000 to sit in a wide seat for a couple hours when they could buy a nice recliner from the furniture store for $400 instead and enjoy it for decades. I’m sure my butt would appreciate those wide seats and my legs would be comfortable with the extra legroom, but it would sure piss off my wallet.

What’s Important to YOU?

You may think I’m insane for paying $7,000 to fly around. A human kite isn’t for everyone, but it will bring me happiness and the money won’t break the bank (as long as the kite doesn’t break!).

One of the keys to life is figuring out what makes you happy and pursuing it full throttle.

“Your problem is how you are going to spend this one odd and precious life you have been issued. Whether you’re going to live it trying to look good and creating the illusion that you have power over people and circumstances, or whether you are going to taste it, enjoy it, and find out the truth about who you are.  – Anne Lamott

We all need meaningful work and activities. At the core is figuring yourself out. I still have work to do, but I’m getting there. How about you?

[This post, Three Things I’ll Spend Money On (and Three I Won’t), was first published by Mr. 1500 on Elite Edge Money]

[As part of our new weekly column by Mr. 1500 of 1500Days.com]

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Recently, J. Money wrote an article on why he doesn’t like owning a home.

A naughty dishwasher hose leaked and caused thousands of dollars of damage to the home he was renting. J. Money describes the chaos:

• Walked into the kitchen and saw air (water?) bubbles on the floor
• Walked into far corner of the basement and saw water dripping from the ceiling
• Looked closer and there was mold on the wooden beams – meaning it’s been dripping for a while
• Mold people come out to inspect and quote a price to our landlord
• Mold people start work on it and find even more mold under the kitchen floor (those bubbles? they were water)
• Cost to fix is now doubled – but that’s only for the mold cleanup/restoration
• To get to the mold they had to rip up the kitchen floor
• To get to the kitchen floor they had to rip up the cabinets
• To get the cabinets back in/re-built a cabinet person needed to be hired
• To get the floor fixed a floor person needed to be hired
• Then on top of it all the AC overheated, tacking on another $268.50 to the bill

Sounds like a nightmare, right? Since J. was renting, the nightmare mostly belonged to the landlord. J. had to move his family out of the home for a couple days, but was responsible for nothing else.

Despite J.’s tale of woe, I love owning a home. I’ve owned my primary residence ever since I graduated college and I’ll continue to do so until I’m old and grey.

Why I Love Owning a Home

I’ve always enjoyed home ownership. Here’s why:

#1. I make money from my homes: Before I tell you how I profit from home ownership, I’ll tell you what not to do. The recipe for not making money is this:

Buy a new home. Choose a cookie cutter model in a new subdivision where the home is priced at top dollar by a builder who knows how to maximize profit.

Bonus points: throw more money out the window and build a custom home

Don’t buy or build a new home. Ever.

I have two strategies that I use to make money from my primary home:

• Love the Ugly Duck: I buy homes in need of love and fix them up, earning instant sweat equity. Of course it’s work, but an added bonus is that I get to make the house my own with finishes that I enjoy. Bye-bye vinyl floor, hello slate!
• Flirtation with Gentrification: I buy homes in up-and-coming places so the gentrification wind is at my back. I look for areas that are experiencing an influx of people and have a solid economy. If the town is still a little rough, that’s OK because it won’t be that way forever.

My current home is the most extreme example of these strategies. In 2013, I bought an ugly foreclosure for about $175,000.

I put a load of work and $100,000 into it. It now looks like this:

At the same time, my town has improved. The shuttered turkey processing plant that was recently torn down will soon be fancy condos. The pawn shops on Main Street are almost all gone. I could easily sell my home for $500,000 today for a profit of about $225,000.

#2. Owning is cheaper than renting: My mortgage (15 years at 3.25%), property insurance and taxes set me back $1264/month on my 4 bedroom, 3 bathroom home. Meanwhile, half of a duplex on my street (2 bedrooms/1 bathroom) rents out at $1400/month. Full disclosure: In addition to the $100,000 and time I spent on improvements, I also put 20% down ($35,200) at the time of purchase. After taking these numbers into account, I strongly believe that I’ll come out ahead over the long term. This brings me to my next point.

#3. 11 Years to Freedom: I have 11 years of payments to go on my mortgage. After that, the home will cost me only property taxes and insurance (currently $250/month). (Editor’s Note: AND MAINTENANCE!!! WHY DOES EVERYONE “FORGET” MAINTENANCE????? ;))

#4. Stability: Moving sucks. Enough said. Well, that’s not quite it. I have children and I want to give them stability. I was fortunate to spend my childhood on the same street with the same friends. I want my children to have the same experience.

#5. Learning Opportunities (more tools): This one is a stretch, but I’m throwing it out there anyway. I like to build and fix stuff. Coming out of college, I didn’t know how to do anything with my hands. Now, I can set tile, plumb a home, wire a home, replace windows, build a custom shower, fix a dishwasher, hang/finish drywall and build a deck (thanks, YouTube!). I can take something ugly and make it beautiful. Bonus: I get to buy more tools!

This type of work isn’t for everyone, but it feels d@mn good once you complete a project. Also, you save loads of money since most of the cost in projects is tied up in labor.

Not for Everyone, But…

I readily admit that owning a home isn’t for everyone:

• If you live in certain areas like Vancouver, New York City, or San Francisco, forget owning a home. You’ll come out far better financially by renting. Sign a lease and call it a day.
• If you move frequently, forget home ownership. Be in it for the long game.
• If you absolutely hate taking care of a home, even mowing a lawn, go find yourself a nice rental. Fixing a broken dishwasher isn’t everyone’s idea of a fun afternoon:

However, if you’re at the right place in life or willing to endure a live-in renovation, maybe, just maybe, home ownership is for you. It’s certainly been worthwhile for me.

Let me know if you need help with your next project. If you live in Hawaii or San Diego, I can be over next week.

[This post, This Is Why I Own a Home, was first published by Mr. 1500 on Elite Edge Money]