[Hey guys! This is the start of Mr. 1500‘s weekly Wednesday posts here on the blog. We thought we’d kick it off with the backstory on how he came to reach financial independence, as it’s something most of us are still striving for (including myself!). We hope you enjoy the new column!]
April 13th of this year was my last day of work. I left a high paying position where I worked from home, had incredible flexibility, and worked with great people. I gave up a lot, but haven’t looked back for even a moment.
Just 17 years ago, I was neck-deep in $60,000 of suffocating college-loan debt.
But we have to back up even further to explain how I got to where I am today. While I’ve made most of my money in the past 5 years (this is how compound interest works), the events that propelled my journey to financial independence (FI) started when I was a child.
There are six of them that stand out. The first one happened over 30 years ago when I was just 12.
The Six Events that Propelled Me to FI
#1) Losing 6 Weeks of Pay
Net worth: $12.00, and then $0.00
My parents called my sister and I into the kitchen for a big announcement. In less than two months, we’d be going on a vacation to Silver Dollar City, an amusement park in Missouri. My mother also told us that they’d start paying us an allowance of $2.00/week so we’d have money in case we wanted to buy a souvenir there. Whoopee!
Looking back, my parents got a great deal. To earn my $2.00, I had to:
- mow the grass (a large lawn with an ancient lawnmower)
- trim the bushes (it felt like there were a million of them)
- cut the grass under the bushes with a hand trimmer
- take out the trash
- pick up dog poop
All of this work took at least 4 hours per week, but I was so excited to be earning money that I didn’t care. By the time we jumped in the family van for vacation, I had $12.00 in my brown, velcro wallet. I felt rich. Then, it was gone.
On the first day at the amusement park, I lost my wallet and along with it, all $12.00. I checked the Lost and Found, but it wasn’t there. My mother was a strict, no bullsh*t type of person who was less than sympathetic. At one point, I was lamenting my loss when she looked at me and said:
You should have been more careful. I guess you won’t be getting anything.
I felt broken. I had put in lots of work to earn that $12.00 and it was gone.
That day taught me not to be careless with money. And it went deeper than simply keeping my wallet safe. It was the first time I appreciated the work that goes into earning money. I’ve been mindful with how I spend my dollars ever since.
#2) The Most Valuable Day of My Life
Net worth: -$40,000 (college debt)
When I was in my junior year of college, a girlfriend told me that we should go to a weekend investing seminar that she learned about in accounting class. I immediately thought that it was a pyramid scheme or some kind of scam, so I resisted. She was really excited about it, so I gave in and we signed up.
The seminar was legitimate. It was given by a non-profit group whose goal was to educate people on the importance of saving and the basics of investing. Early on in the seminar, one of the speakers explained that anyone with dreams of getting rich quick should leave. For those who were patient though, there were ways to acquire wealth.
I learned about compound interest, diversification, the effect of mutual fund fees on returns and why individual stocks are a bad idea for most people. This was the information that everyone needs to know, but isn’t usually taught in school.
However, the most valuable advice came during the second day of the seminar. The instructor was talking about the importance of giving investments enough time to grow. He paused for a moment and looked around. Eventually, he locked eyes with me in the back row and said what may be the most important words I’ve ever heard:
Your advantage is your youth. Start now.
My eyes nearly popped out of my head. And the fire was lit. It would still be a while before I started to earn real money, but when I did, I started saving. The girlfriend and I didn’t last, but the lessons did.
#3) Finding a Good Partner
Net worth: -$60,000 (more college debt)
My wife and I have been married for 15 years and I couldn’t be more fortunate. In my wife, I have someone who:
- isn’t interested in silly status items like $800 purses
- works hard
- is a genuinely good person
And it almost didn’t happen. When I met her, I was so busy with work that I had no interest in dating. In one of my better decisions, I relented. The rest is history and mostly marital bliss.
She has put up with a lifestyle that most wouldn’t tolerate. Mostly relating to live-in flipping. In the most recent example, we spent the last four years fixing up a home while raising two children. For much of that time, we both worked. At the low point, it was about 10 degrees outside and the furnace went out. To add to the misery, the house was torn apart and everything was covered in drywall dust from demolition.
I don’t remember her ever complaining. We’ve been able to accomplish what we have because we complement each other.
#4) Flipping my First Home
Net worth: $120,000 (college debt conquered!)
I became a home flipper by accident. I had bought a small home after college and it needed some work. Contractors are a pain to deal with, so I taught myself basic plumbing, electricity and tile setting.
We unexpectedly made $100,000 in profit when we sold the home. Best of all, the gains were tax-free (see the 2 out of 5 year IRS rule). Shortly before closing on the sale, my wife and I looked at each other and said:
Let’s do this again.
We bought another home that needed a lot of cosmetic work, but was structurally sound. We did this with almost every house from that point on. The core of our nest egg was built flipping homes.
#5) A Bad Day at Work
Net worth: $700,000 ($550,000 in investments and $150,000 in home equity)
I was a saver and was doing pretty well. How many 37-year-olds are closing in on a net worth of $1,000,000? But I was living a normal life. We had just bought a nice home in a cookie-cutter suburb. Our kids had good schools. Life was fine. Then, my job gave me a huge kick in the ass.
I had a horrible day at work. I was a software developer and there was a bad bug in the code. I thought I was going to get fired and the stress was incredible. I hardly ate for a week and lost 10 pounds. At one point in the ordeal, I said to myself:
I can’t do this for another 25 years.
I googled something like:
How do I retire early?
Google introduced me to JD Roth and Mr. Money Mustache (MMM), but I was skeptical. I thought they were both selling some kind of scam. MMM retired in his early 30s. No one does that. And then I looked at the numbers he presented. People may lie, but numbers don’t. This MMM guy was telling the truth. On the same day I discovered early retirement, I did 3 things:
- Calculated my FI number: I needed about $40,000/year or a million dollars in savings to retire per the 4% Rule.
- Figured out how long it would take to accumulate $1,000,000: 1500 days was the magic number.
- Changed up our life: We would sell our $400,000, 4500 square foot home and move into something much more modest. Our next home was an unloved rental that had gone into foreclosure.
The code bug wasn’t as bad as I initially suspected, and I didn’t lose my job. However, I was now on the path to early retirement.
#6) Finding my Passion
Net worth: $1,000,000+
There was one great big thing I didn’t realize when I started my journey to early retirement. It was this:
Money is nothing more than a facilitator. It’s just a tool. Money is an empty goal.
So, I had a goal of leaving work, but I had no idea of what I’d do after I left. For a while, I felt like an idiot:
You have this huge goal of quitting work that you’ve been writing about for a couple of years, but you have no idea of what happens after that? Better figure it out dude!
I felt lost, empty and ridiculous. You can’t retire to nothing.
And then I realized that the answer had been with me the whole time:
Write, dummy, write!
My Passion Reignited
I had always enjoyed writing and even considered studying journalism in college. I decided against it because the job prospects weren’t so great. I ended up working as a software developer, but never forgot about my passion for writing. Thus, why I started 1500Days.com.
While I did eventually start making money from 1500 Days, in the first 3 years it made less than $1,000. But that didn’t stop me from working furiously on it. I was staying up until midnight during the week, working on weekends and carrying around a notebook to record ideas at all times. I did it because I loved writing. I considered giving up a couple times, but when I stepped away, I realized how much I’d miss it if I hit the Delete button. I always went back.
Working as a software developer, I brought in substantial income. Working as a blogger, I bring in substantial happiness. While I’m thankful for the money, the latter is much better.
And now look – I’m writing here at Budgets Are Sexy! :)
And that’s how I became financially independent in 32 years.