Today after 30 years of work I am declaring my freedom! Yesterday was my last duty day. Does that mean I’m not going to “work” any more? No, but we’ll be 100% focused on entrepreneurship at this point and seeing where that journey takes us. Are you still “working” if you are an entrepreneur? That’s a good question. Leave a comment and let me know what you think.
Here are 5 lessons we learned along the way that may help others achieve FIRE. Truth in advertising here, I was in the military and have a pension. The Retirement Police may quibble about whether that is RE or FI or both, but since we have freedom of action now, I’m calling it FIRE. That’s the beauty of FIRE, you get to frame the situation.
Lesson #1:Seek the wisdom of those smarter than you. Read books. Buy a cup of coffee for a guy 20 years older than you that has his act together and seek his advice. The Good Book says in Proverbs (Proverbs 11:14) that there is victory in an abundance of counselors. You don’t have to figure all of this out on your own. I was very lucky when I was first starting out because I ended up in a carpool with some investing savants. These guys were about 20 years older than I was and probably didn’t realize it, but were essentially giving me an advanced class in investing every morning and afternoon as we commuted. You’ve got something just about as good called Reddit where you can ask the crowd just about any question. If you’re wondering where to start, check out the subReddit on financial independence here.
Lesson #2: Save 10% of your gross starting with that first paycheck. When I started out as a second lieutenant, one of my co-workers kept bugging me to invest in this thing called an “IRA”.” I thought “why would I want to toss away $2000 towards something (retirement) that was so far away?” Luckily, those gurus I mentioned earlier convinced me of the errors of my ways. They gave me much wisdom then Mrs Woodworker and I started maxing out both our IRAs.
Lesson #3: You may think you can pick winning stocks, but you’re probably lying to yourself. Instead, invest in low cost index funds and watch dividend reinvestment work its magic. My personal favorite is the Vanguard Total Stock Market Index. If you’re wondering how much of your portfolio to invest in stocks, if you are in your 20s, I’d invest over 90% in stocks. That will give those early investments decades to power you to FIRE. Many people incorrectly say that when the market is down you are losing money. You are only losing money if you sell at that point. Over the long haul, the market has always recovered.
Lesson #4: Bloom where planted. No matter what job you are given, be excellent at it. People will notice and you will be given more responsibility. That will lead to promotions and more income. When I was stationed at Maxwell Air Force Base in Alabama, the squadron gave the new guy (me) the SNACKO duty. For those not in the know, that means one of my additional duties was to keep the snack bar stocked and handle the money. I tried to be the best SNACKO the world had ever seen and created a schedule of fundraisers during times I knew the squadron would be hungry. The leadership noticed that revenues went up and that the snack bar was always fully stocked. That, along with keeping my nose to the grindstone in other areas led to more responsibility.
Lesson #5: Think carefully about WHAT you want to do and WHERE since this will determine your FIRE date. My wife and I kicked this around for about around 5 years until we settled on moving to a state (there are 19) that doesn’t tax military retirement. In addition, the state we are moving to has a much lower cost of living than our current state. It’s much easier to achieve FIRE in a low cost area. Think about your FIRE vision looks like and where you might need to move in order to achieve it.
I hope that helps you achieve your FIRE goals. Best of luck on your FIRE journey! I’d also like to give a shout out to Mr Money Mustache for his prolific guidance on how to live frugally and also Doug Nordman at The Military Guide for his military-specific advice. Thanks guys!
OK, off to the woodshop…I’ve got a commission to knock out…