Wednesday, June 15, 2016

Sustainable Gratification


I enjoy playing video games....

Okay, maybe that is an understatement. I LOVE playing them. I really get into the story, the challenge each level poses, the realism of modern games. And I love the social aspect of playing with friends, competing, advancing, and the infamous "level up!"

But it is an useless habit.It's fun, but useless.

I've spent most of my spare time as a child playing Video Games, and don't have anything to show for it, except a bunch of old cartridges with sentimental value and some memories. While these things are not inherently bad, and while some argue video games can teach useful skills looking back  I would have chosen to spend that time doing somethings else; something more productive.

I am a different person now than when I was a child. I have different priorities, habits, goals, and ideals. But I still love playing games. With my 20:20 hindsight, you would think it would be easier to say no, and choose to work on something productive.

But.....it's not.

There is a difference between the progress I make in a video game, and the progress I make in my writing. Both are progress, but any progress I make in a video game is fleeting. It is gone as soon as I stop playing. It can be satisfying to beat a particular level, or solve a puzzle in a video game. And entertainment has its place. However,  I find myself craving a deeper level of satisfaction. And a major proponent for deeper satisfaction is sustained gratification.

Everything we do provides varying levels gratification. This impacts the choices you make, and reinforces those choices. Some actions provide instant gratification. We tend to draw unto these choices. Fast Food; Video Games; Keeping up with the Kardashians, they all provide immediate gratification. These are clearly not good life choices. But people make them every day because its easy.

The Burger King mentality, "I want it hot, fresh and I want it now."


Sustained gratification requires more work, discipline, self-control, and foresight. It doesn't provide immediate rewards, but they are longer lasting and much more fulfilling. Writing a blog post, for example, is an act that takes a lot of work, planning, re-writing, editing, etc. But when you see the final product, someone else gains some sort of benefit because of your hard work.That gratification was delayed, and will last a lot longer that if you ate a cookie.

Now you may be wondering how this connects with early retirement. There is a reason why most people do not retire in 10 years (some don't retire at all!). It's hard!!! It isn't easy to save, to cut expenses, to make do with less, to repair the things that break instead of buying new things, to ride your bike to work instead of driving your car, to work at a job you are not crazy about (or even hate), to track your expenses and make adjustments to your budgets, or to make dinner instead of eat out after a long day. It's really hard. But.....is it worth it?

For some, maybe not. Live in the moment. YOLO. Whatever. For me, it is. I want that freedom of time. I do not want to be a slave to debt, or to a corporation, or addiction, or to anything. I want to make time for what matters in life: My family, friends, and following my passions, like ending poverty and making affordable healthcare worldwide.

But in order to get there, I am going to have to work, and Work Hard!!

What would be worth the sacrifice for you?

Tuesday, June 7, 2016

My Ideal Lifestyle




At the very beginning of my journey, I sat down and wrote down my perfect lifestyle. I gave a lot of thought into it, and wanted to share it with you.

"I spend as much time with my family as I want. My greatest efforts and talents go toward improving my relationship with my family. I work on projects that excite me. I am not nearly as concerned with the traditional definition of 'success' as I am concerned with how much I enjoy working on my projects. I seek knowledge from them, and look for ways to apply the knowledge I gain in other future projects. These projects motivate me, excite me, drive me, and fulfill me. They help others, and make life a little better. I have the freedom to choose what I work on, when I work on it, and how long I work on any project.

"My family and I live frugally, but comfortably. We live off earnings from sound investments and rental properties. We do not need, nor want, the latest and greatest things in life. We are happy with what we have, and don't depend on material gratification. We take care of the things we have, fix the things that break, and seek gratification from relationships and experiences. We live well within our means.

"We spend quality time with our children each day. We help them with schoolwork, teach them Gospel principles, and they know they are children of a Heavenly Father who loves them. We all make mistakes, but don't let those mistakes ruin our day. We improve, and keep moving forward. We laugh, play, explore, are creative, learn, and teach with each other. We go on family outings, pray together every morning, and spend at least one family meeting a week. There is no contention in our home.

"Each child has a project that they work on regularly; something that interests them. Each member helps the other members of the family with their project. TV plays a minimal part in our lives. Memories are created every day.

"My wife and I spend time with each other each and every day; just the two of us. We have our own projects that we work on together. We love each other with all our hearts, and can devote as much time to each other as we desire. We enjoy each other's company and are in no rush to move on to the next project.

"We are happy because we are together."

I have come to realize that the main reason people seek after financial security is to increase their happiness. My main goal is to free up time spent at the office, and have my needs and wants met. I understand not all wants can be met. 

If you search Google for a definition of need and wants, you will find a general definition: Needs are what we need to stay alive, while wants are everything else.

I disagree to an extent. Now, I am no psychiatrist, but it seems your needs are dependent upon you goal. If my goal is to simply survive, then my only needs are shelter, food and water, healthcare, and clothing. But my goal isn't simply to survive. My goal is to live a full and happy life. And to achieve that goal, I will need a few more things.*

For starters, I need to be around the people I love. Without them, life would be empty. I need to be fulfilled, or make a difference; make my difference. I have unique talents and abilities that I can use to help others, and to make the world better in some capacity. I also need my wife to be happy. She isn't happy all the time (no one is...) but I have a deep need to make her happy. 

Those are just a few of the things I need to live a full and happy life. Each person is going to need different things to live a full and happy. These things are not material. Very few material things actually increase happiness. 

Call to action: Goals should be set with a specific result in mind. The end result for my 10 Year Retirement is having freedom over my time, and quoted above. What is your ideal lifestyle? There is no wrong answer here, because it is YOUR life. I would love to hear your goals and how they help you achieve your ideal everyday life.

*Note: I understand you will always need food, water, shelter, healthcare, clothing, etc. to live a happy and full life. These are basic needs on Maslow's hierarchy of needs, and you need these basic needs fulfilled in order to start worrying about higher level needs. But when the goal is 10 year retirement, I assume all basic needs are met.

Friday, May 27, 2016

Needs Vs. Wants


I'll admit it. I want that car. It is fast, good looking, and a legend. I could buy it. It may be a little tight, but I could make it swing. But the real question is: Do I need it?

A common stress point for budgets are deciding if a purchase is a need, or a want. In the heat of the moment, a want can seem incredibly similar to a need. I have been playing with a set of guidelines that help me distinguish between a need and a want.

1. Is this purchase a replacement (need), or an upgrade(want)?

If I am purchasing a new pair of shoes because my old pair is worn out, and no longer functional, then it is a replacement, or need. If I am buying another pair of shoes, cause the old ones don't look new anymore, then it is an upgrade, or want. This applies to large purchases as well, such as cars. If I am selling my current 3 year old car because the newer model is better, then it is an upgrade, or want.

2. Do I own any existing alternatives?

If you have something that does the job (car, shoes, clothes, etc) take care of it, and get your money's worth! Each time you replace something, you are spending money that could be working for you, and letting that Yap-yap dog run amuck in your living room. Then he poops on your rug, and you reward him with a milk bone. It may feel restrictive, but you need rules for your money or it wont work for you.

3. Will I still "need" this in 24-48 hours?

This is a popular test to help decide if you really need something. Unless you are Rain Man, you probably don't perseverate on everything you want. Sooner or later, you will forget about that new shiny purchase, and focus on your true needs and the problems that currently present themselves. It can't be a compulsive buy if you wait a day or two before purchasing.

4.  Will this make me happier than achieving my goal (i.e. 10 year retirement)?

I use this question the most. I want to have freedom of time and choose what I work on each day. I want that freedom so much more than I want a new car, no matter how fast or sleek it is. It doesn't matter that I can afford it, because I want freedom and total control over my time infinitely more. 

What do you want? What is your ideal day-to-day life? How could learning how to say no* help you achieve your goals?

*This post is by James Clear, one of my favorite writers. The post is specifically about saying no to achieve health goals, but I believe the principles can be transferred to any area of life: financial, social, educational, etc.

Wednesday, May 25, 2016

Yap Yap Dogs


A Journey to Retirement  starts like any other journey, with a single step. In my next few posts, I plan to catch the reader up to speed of where my journey has started.

Probably once of the most crucial initial steps is creating and sticking to a budget. A budget is basically a set of rules for your money to obey, and without a plan you'll start to wonder where you money went. 

Money is like a little yap-yap dog that goes crazy if unattended and untrained. Before you know it, you are spending $300+ a month on eating out, you buy 10 pairs of new Nike shoes cause they were "on Sale" and $500 a month on a new car that has lost its new car smell. If you can't make your money work for you, that little yap-yap dog will eat you alive.




Don't let those beady little eyes fool you...he's a killing machine!

I found this out the hard way, going over $5,000 in credit card debt, and nearly $10,000 in student loans. I don't know what clicked, but I made a decision to free myself from the bondage of debt. I bought whatever I wanted, and it felt good. But the feeling didn't last, and I quickly felt the weight of my decision. Buying what I wanted, in the moment I wanted it wasn't freedom; it was addiction. I wanted to use my money to work for me, and not to work for my money. 

Fast forward a few years, and here I am: a budget lover.  I know where my money is going, what it is doing, and how often it misbehaves. I have put my yap-yap dog through training school, and it is beginning to behave. Below you will see my monthly budget. 

Monthly Budget


·         Home: Mortgage & Rent---------------------------------$1,217
Business Services: Rental Property Expenses-----$1,250
Gifts & Donations: Tithing-------------------------------$460
Food & Dining: Groceries-------------------------------$350 
 Bills & Utilities: Utilities (Gas, Power, Water)--------$254
Home: Home Improvement-----------------------------$100
Auto & Transport: Service & Parts--------------------$100
Travel: Vacation------------------------------------------$100
Auto & Transport: Gas & Fuel-------------------------$80
Bills & Utilities: Mobile Phone--------------------------$80
·         Shopping--------------------------------------------------$75

·         Gifts & Donations: Christmas Gifts-------------------$67

·         Kids: Babysitter & Daycare----------------------------$60

·         Bills & Utilities: Internet---------------------------------$50

·         Food & Dining: Restaurants--------------------------$50
·         Misc Expenses: Shelly Money------------------------$50
·         Misc Expenses: Matt Money--------------------------$50

·         Auto & Transport: Auto Insurance-------------------$46

·         Entertainment: Family fun-----------------------------$45

·         Entertainment: Date Night-----------------------------$45
·          Kids: Baby Supplies------------------------------------$40
·         Auto & Transport: Car - Other------------------------$35
·         Gifts & Donations: Gift - Other------------------------$26
·         Gifts & Donations: Birthday Gifts---------------------$20
·         Health & Fitness: Medical------------------------------$15
·         Food & Dining: Shelly's Food-------------------------$5
·         Food & Dining: Matt's Food---------------------------$5
·         Entertainment: Music-----------------------------------$4
·      Everything Else------------------------------------------ $71

    Total                                    $4,750

      Savings Goals
·         Savings -------------------------------------------------- $800
·         3 Month Emergency Fund-----------------------------$250
·         2nd Rental----------------------------------------------- $250
·         School Loans ------------------------------------------  $137

Goal Total                                                 $1,437

Grand Total                                               $6,187



Generally, I earn ~$3,437 after tax income. My wife earns around $1,250 a month working part time, and our rental provides $1,500 a month. That totals to $6,187. Now, some months run a little lean (say my wife doesn't have as much work as normal) or a little rich (three paydays happen in a single month) but it all averages out. Any unplanned income goes straight into Savings. Examples of this are tax rebates, bonuses, and so on.

We continually make adjustments on our budget. For example, I had budgeted $40 per month for natural gas (show here as part of the total utilities budget) and after 4 months, I realized that would be far too low. So we bumped it up to 65 and took the 25 from another category, Everything else. A good budget takes time to work out the kinks.

We track our spending with Mint.com. I don't have any affiliation with Mint, Intuit, or any of its subsidiaries, and to be frank, I don't care if you use it. It just makes tracking your money a lot easier. You could also try Personalcapital.com, You Need a Budget (YNAB) or a host of other similar aggregate financial trackers. 

Once you are tracking all your spending, you start to see weak spots; places you can target to make the most improvement. I noticed I was $200-300 a month in fast food. Once I noticed this, I was much more motivated to eat at home, and plan meals ahead of time. But until you start tracking your money's movements, you won't know where to attack.

How about you, reader? How do you track your spending? Have you seen any benefits from keeping your Yap-yap dog in line?

Wednesday, May 18, 2016

Starting the Journey...

In my last post, I mentioned my biggest goal at the moment, to retire in 10 years.  I have to admit, it is a little unusual. Many people see it as unobtainable, or impossible; a dream. But I know it is possible. I just have to break it down.
Like all giant obstacles, my goal has several sub-goals, achievements, and steps. This post will allow me put them all out on paper (so to speak) and publish my plan to keep me accountable.
The way I see it, my early retirement has 3 parts:
  1. Decrease Expenses
  2. Increase Income
  3. Save, save, save!
Each of part have a common purpose of early retirement. Each goal has additional sub-goals.
  1. Decrease expenses
    • Create a budget
    • Track expenses
    • Make adjustments as necessary
    • Pay off Student Loans
    • Pay down Home/Rental
  2. Increase Income
    • Finance Industry (Main job)
    • Real Estate Rentals (Side Hustle)
    • Investment Income
  3. Save, save save!
    • 3 Month Emergency Fund
    • 401(k) contribution (with match)
    • Traditional IRA contributions
    • HSA contributions (with match)
    • Taxable Brokerage Account
There are also different micro-goals that I see as mandatory for success. I have recently spent some time getting to know myself. How I tick, what motivates me, what frustrates me, etc. And I have realized that I am more inclined towards many small/short tasks rather than big projects. Its not so much about the challenging aspect, rather the way my mind seems to be wired to feel success.  These are specific numbers or milestones I want to have in each respective sub-goal.

  1. Decrease expenses
    • Create a budget
      • Consistently stick to a budget (12 months +)
    • Track expenses. Make adjustments as necessary
      • Show downward trend in spending
    • Pay off Student Loans
      • $1200 loan paid off by 2017!
      • $4500 loan paid off by 2018!
    • Pay down Home
      • Balance $235,000
    • Pay down Rental
      • Balance $196,000
  2. Increase Income
    • Finance Industry (Main job)
      • Increase income to $100,000 by 2017
    • Real Estate Rentals (Side Hustle)
      • Increase monthly income to $500 by 2017
    • Investment Income
      • Reinvest all income for 2017
  3. Save, save save!
    • 3 Month Emergency Fund
      • Save ~$10,000 by May 2017
    • 401(k) contribution (with match)
      • Increase contribution to 25% by 2017
    • Traditional IRA contributions
      • Contribute $11,000 for wife and I by 2017
    • HSA contributions (with match)
      • Maximize HSA $6750 by 2017
    • Taxable Brokerage Account
      • Increase balance to $5,000 by 2017
Each micro-goal has its own steps for accomplishing the micro-goals. The Scientific geek inside me calls these nano-goals, since 1 nano-goal is equivalent to 1x10^-3 micro-goals. Anyhow...

  1. Decrease expenses
    • Create a budget
      • Consistently stick to a budget (12 months +)

    • Track expenses. Make adjustments as necessary
      • Show downward trend in spending
    • Pay off Student Loans
      • $1200 loan paid off by 2017!
      • $4500 loan paid off by 2018!
        • $137/month
    • Pay down Home
      • Balance $235,000
        • mortgage $1217/month
    • Pay down Rental
      • Balance $196,000
        • mortgage $1050/month
  2. Increase Income
    • Finance Industry (Main job)
      • Increase income to $100,000 by 2017
        • Look for ethical Financial Advisory firms
    • Real Estate Rentals (Side Hustle)
      • Increase monthly income to $500 by 2017
        • Save $250/month excess from Rental to increase Real Estate portfolio
        • rentals
        • raw land seller financing
    • Investment Income
      • Reinvest all income for 2017
        • contribute excess savings to Betterment
  3. Save, save save!
    • 3 Month Emergency Fund
      • Save ~$10,000 by May 2017
        • currently at $5,900
    • 401(k) contribution (with match)
      • Increase contribution to 25% by 2017
        • currently contributing 5% plus 3.75% employee match - 8.75%
    • Traditional IRA contributions
      • Contribute $11,000 for wife and I by 2017
        • currently $0
    • HSA contributions (with match)
      • Maximize HSA $6750 by 2017
        • currently $2050/year + $1000 employee match
    • Taxable Brokerage Account
      • Increase balance to $5,000 by 2017
        • currently $0
And then I have events that I haven't quite tied into my 10 year retirement journey. 

  1. $100,000 in liquid assets
  2. $1800/month in rental income
  3. $1500/month in investment income
  4. $250,000 in liquid assets
  5. $500,000 in liquid assets
  6. Student loans paid off
  7. Main residence paid off
  8. Rental paid off
  9. Additional rental paid off
  10. Monthly expenses met by passive income
  11. RETIRED!!!!
There you have it! Not completely comprehensive, but a good place to start. I hope to update this as I make more progress. I hope you keep me accountable. ;)