When I created this site my goal was simple: to retire by age 35 and to document the 7 year journey. During these past 15 months I’ve gone through many life changes. We downsized to a smaller house, brought a 3rd baby girl into existence, and I quit drinking soda (this was huge for me) and eating french fries just to name a few.
As a family we went through even more financial changes. This site ended up becoming profitable (see below for details). We started generating passive income through our rental property. We began peer-to-peer investing through Prosper. We also started investing through Betterment. We moved the bulk of our investments to Vanguard (VTSAX). And we started tracking our finances down to the penny using YNAB.
A year ago we were doing most of our shopping in bulk at big box stores. Now we’re buying mainly organic (whenever possible) and gluten-free products locally.
And a year ago I was a penny pinching ass (I’m still conscious about my spending, but I’m far more laid back now). Optimizing our finances has opened new pockets of money for us to spend every month, so while our savings rate hasn’t dropped, our disposable income has increased.
My new goal for the future (and the future of this site) is to discuss financial independence to help us leave our full-time jobs and either become self-employed or work jobs that leave us feeling fulfilled. Getting locked into unfulfilling careers for decades can make the rest of life seem bleak, so why the hell should we let ourselves fall prey to this lifestyle?
Being unsatisfied at work typically leads to creating fulfillment in other ways. Shopping. Alcohol. Nice cars. The ability to purchase these things may make your career seem worth it, but they’re just band-aids that cover your problems instead of fixing them.
To find happiness and achieve success — however you define it — you may have to get off the treadmill and leave your job.
What does it take to leave your job?
As a general rule of thumb, you shouldn’t quit your job until you’ve satisfied at least one of three conditions:
- You have secured another job that will cover all of your normal monthly expenses (lateral moving).
- Your passive income has outpaced your monthly spending.
- You have 100 times your monthly spending saved/invested.
Without making enough to cover your monthly expenses a new job will soon become another stressor in your life. It may feel like a nice change of pace, and you may feel happier doing the work that you’re doing, but the fact that you aren’t earning enough will start to eat at your financial house sooner than later. And you may start panicking when the money starts running out and the bills keep rolling in.
Option #2 is the best possible situation, but it takes the most money, and usually the most time. If you can swing it, props to you.
I would almost always recommend option #3 whenever possible. Although similar to the Rule of 300, this plan assumes that at least some portion of your income is going to be generated either by self-employment, or working in a career field that you’re passionate about.
Given a 5% rate of return (8% market returns MINUS 3% annual inflation) your money will last for 10 years without supplementation of income. That’s 10 YEARS to start generating income or to turn your passion into a money maker.
Small businesses and sole proprietorships fail constantly. One of the main reasons behind this is because the business owners rely on their business income to pay for their lifestyles. When you have 100x of your typical monthly spending saved, you’re less dependent on the money that your business is generating, which gives you the freedom to grow without simultaneously having to stress out about paying your mortgage.
My plan for the next two years is to bring my savings up to 100x our monthly spending level. That will give us a solid 10 years to get our shit together. It will give us the independence to leave our current jobs and to explore our options for self-employment.
For those who are less entrepreneurial, I would recommend figuring out what your passions are and once you have 100x times your income saved, try to find a career in this field. Working for other people isn’t always terrible. Personally, I love being my own boss, but it’s not for everyone.
I stated in a previous post that I would disclose the income that this site generates. I don’t know if I’m going to do this monthly or not (if you would rather me not post this stuff, feel free to let me know).
February earnings breakdown for this site:
- Google Adsense (I use it sparingly, mostly on old posts and search engine favorites): $253.51
- FlexOffers (Credit Sesame and Personal Capital): $155.65
- Republic Wireless referrals: $57.00
- Impact Radius (Betterment): $80.00
- You Need A Budget: $84.00
- Bluehost: $270.00
- Amazon: $9.56
- Total: $909.72
I actually had no idea I made THAT much until just now. As you can tell by looking around, I hardly advertise on this site. Most personal finance sites that you’ll visit are filled with ads. They litter the sidebars. Sometimes they’re smooshed into the articles, and they detract from the value of the sites themselves.
My goal is to provide you with the best possible reading experience while occasionally mentioning products that I personally use and love that I think you’ll love as well.
Writing is something that I’m passionate about, and it’s become both a habit for me AND a source of income. This should be proof that it’s possible to earn money doing something you love. Crafting, traveling, cooking, eating, writing, photography, design (graphic, interior, etc) — among other things — can all be considered “hobbies”, but can also generate a decent income — especially if you have the ability to dedicate more time to them.