Common wisdom teaches that we must work and be productive. Another bit of popular wisdom is the more money we have, the happier we will be. Along with this is the idea that we must buy new and better things. At work, soon after someone is promoted or receives a raise, you see them with new clothes or even a new car. Ultimately, we buy more expensive things to show our success, even if inadvertently.
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Just like everyone else, as we made more money, we had more things. We had everyday things, and we had vacation things – they were often the same things, but our vacation things were compact and usually more expensive.
In addition, we went to more expensive restaurants, parties, and events, so we needed more expensive clothes, watches, and shoes.
We also needed a bigger apartment to hold our expensive things, and we needed to decorate the apartment with art and shiny stuff. The new apartment needed remodeling and updating with the latest appliances. As a result, we had so-called “good debt” – a mortgage. I was even in the process of buying a new expensive car. We needed to fit the part.
With all these things, I should have been happy!
But I wasn’t, and I knew it. I was working long hours, which continued into the weekends to keep up the pace. I was sneaking into the bathroom to draft emails on vacation. This cycle of earning more and buying more was fun, but it was short-lived. Sure, getting new stuff was great initially, but once the novelty wore off, it was on to the next thing. I was never satisfied.
Then it happened: My co-workers and I found out our company was going to be shut down and we were to be fired.
Of course, being fired from your job is always a possibility, but for some reason, this felt different. I didn’t like that despite all my hard work, someone else could disrupt my entire life. Someone else had so much power over me and controlled my life outcomes. Facing unemployment made me feel extremely vulnerable.
Luckily, we found out in advance, which meant that I had the opportunity to respond to what was happening. It was like in the 1946 movie It’s a Wonderful Life, starring James Stewart, where he gets this wake-up call and can live his life differently, except I didn’t do all the good deeds he did. But facing unemployment was a blessing in disguise; it was what we needed to change course and regain power over our lives.
I realized I was living my life wrong. Previously, I had been pursuing happiness externally from achieving, experiencing, or acquiring new things. Consequently, I had a major shift in my financial mindset – I knew I could be doing things better.
I immediately pivoted and re-budgeted our lifestyle. We figured out how to live off of one salary while I saved my income in anticipation of being fired. I took the money we were saving for that new car and made it our emergency fund. We put a moratorium on all discretionary spending. We looked for free things to do in our spare time. We listened to library audiobooks and went for longer walks. We walked everywhere and only bought the essentials.
We made our dinners at home and brought lunches everywhere. When we made plans, it now did not automatically include lunch or dinner and drinks. We started to have people over for dinner instead of going out.
We stopped overspending and bought only what we needed. We became content with what we already had and started to understand that new is not better. We looked for ways to extend the life of the objects we had, to fix them or re-purpose them. We were even exercising more and eating better.
As time went on, something changed in us again. We were happy with not buying. We changed our lifestyle and learned how to pursue happiness internally. Furthermore, we
started to look at our accomplishments – how our bank accounts grew, and our debt decreased. We had a major change in our financial mindset again. I also started to see that if I spent the same amount of energy at work helping others become rich and put similar energy into my personal finances, I would be able to get ahead. I threw myself into personal finance, spending hours understanding what I needed to do to become financially independent.
In the meantime, instead of coming to fire us, our parent company took the assets they wanted and gave our company back to us. As a result, we formed a new company, and I had an even fancier title and made even more money. Now what?! Do we go back to living the lifestyle we had before? Do we buy that expensive new car after all?
How could I? I was spending less money and had fewer things and was happier! This time, even though I was promoted, I was not thinking about buying more. I was thinking about how to invest the money. Since we were already living on one salary, my entire salary went to investments and paying off our debt.
Our mantra became “earn more, spend less, and invest the difference.” We knew that would be the key to early retirement.
I was lucky – I was able to see the wake-up call for what it was and didn’t fall back on old habits and a spendy financial mindset. Facing unemployment and the fear that came with it became my biggest motivation to eventually quit my job. I learned that having less and being happy is a powerful way to live!
This was the start of our journey, which eventually led us to financial independence, quitting our jobs, selling everything, and travelling. For us, that’s what early retirement looks like.
If you're interested in learning about Personal Finance and how to retire, read Your Road to Retirement in Seven Steps (and You Don't Need a Financial Advisor) + Free PDF to Get You Started on Your Personal Finances
