From the bi-line in my title, you can see that I acknowledge I was a super-consumer, prior to the recent decision to become a Frugaler.
Why did Mr. Happy Frugaler choose to transition from the free spending life of a super-consumer to a more spending concious Frugaler lifestyle with a heavy focus on the Debit side of the Income Statement?
This goes back a long way, but the theme that drove me here has repeated itself heavily over time.
To fully expand the story, I’m going to travel back in time and share some historical details of my life and the journey I’ve shared with Ms. Frugaler and our two little Frugalers!
Let’s go back to University, it was where I quickly displayed horrible financial acumen. Knowing I needed to get through University and not being eligible for student loans, I chose the next best alternative – credit cards! Yes, I committed a horrible foul in the FI world, funding my life with credit cards. The key was, I’d had a year off in University and worked full time so had a decent limit on the cards. All school year I’d utilize the cards to pay my costs and at some point I’d have to have the hard conversations with the credit card company to say “sorry, I can’t pay” 😳, to which they’d generally say “What???”. That was when I’d have to explain that I was a student with a part-time job and no cash! Don’t worry, I’d promise, I’m going to be working full time over the Summer and will pay you in full, which I did!
Once I graduated with an Accounting Degree (yes, why I use debits and credits so much in discussion), I went straight to work at one of the Big 4 Accounting Firms in the City, as did my future wife. My wife, from Day 1 was always on top of our budget, cash flow and finances. From that day, I never carried a credit card balance again (I learn fast and I correct that last statement – I never carried an interest bearing balance).
Two years later, we acquired our first home and were set to be quite well off over time, it was approximately 2004 and if you know what happened in the City of Vancouver over the last 11 years, you’d know we’d have made a killing on that home, especially because it was in a super-hot area of the City, Yaletown.
Unfortunately, I’d been working insane hours, was under a lot of stress from studying the Summer and writing the UFE (the Canadian CA equivalent of the Bar Exam, only harder 😉) and had a mental breakdown – Depression. I’m never public with my mental illness, which is sad. Unfortunately, there is still an overwhelming Stigma of Mental Illness. Apparently, if people were aware of my illness, nearly 25% of people (1 in 4) wouldn’t hire me.
In this depressed state, I made some unfortunate life choices and put Ms. Frugaler and I behind where we should be. Ms. Frugaler and I sold our home, at a modest profit, and left the Country / Province for a period of time (4 years).
In that time, we had amazing life experiences, personal, financial and economic growth and I was diagnosed with depression because things were going downhill and someone suggested I call our Company’s Employee Assistance Program, which was one of the most important calls I ever made. If you know someone close to you that you’re concerned for, I absolutely urge you to have them reach out to a similar program. I’m still on the medication, to this date, that I was provided and it returned me to the man I was.
Throughout this period, I wasn’t making the best financial decisions and Ms. Frugaler was holding everything together. Why stress about money I’d say, we both are continuing to advance our careers and make more and more money, why worry about the toys I’m buying, I can continue to just work harder and harder and longer and longer!
We returned to Vancouver in 2008, we’d missed the boom, the equity required to buy a home with our first little Frugaler on the way had climbed significantly; however, if we’d not sold our first apartment, we’d have been able to trade for a house, straight up, with our equity increase – WTF, I’d already have hit the goal: Million Dollar Club.
Fortunately, we’d saved enough to get in the market again and purchased Multipe homes over time, climbing the Vancouver property ladder until we lucked out when the Olympic Village Ghost Town Fiasco occured and prices were absolutely slashed! What the Fuck, I said to my wife, this makes no sense. This is absolutely going to be one of the best places to live in this city 10 years from now – 100%! We managed to acquire a home that would fit our growing family (Ms. Frugaler was pregnant with the second little Frugaler) at a price that was absurd and affordable for us ($700,000). Well, when I say affordable, that was a stretch, literally. It was absolutely a stretch financially for us and Ms. Frugaler had to do some amazing financial engineering and planning to ensure our success – budgeting, cash-flowing, managing every dollar! She was awesome; unfortunately, I wasn’t paying attention, wasn’t reading the budget or cash flow and didn’t modify my spending – I just kept focusing on making more money!
Despite that, or as a result of that, by the time we moved here after a two year pre-building wait, we were in a pretty good financial position with our new home assessment being $1,068,000, a $368,000 increase on an investment of $140,000 (the Presale deposit).
Financially we were climbing, saving, investing, and my career was going gangbusters, but there were roadbumps along the way until I landed the opportunity of a lifetime after a year of tremendous stress! Unfortunately, the role of a lifetime, which is going amazingly well, was insanely busy and stressful, mentally, physically, and emotionally in the first year and I was working hours that were tremendous! As an example, see the graph of my weight gain over the first year:
The weight gain was only a piece of it, I was also emotionally and physically exhausted! I know that a lot of people get tired, even me historically, despite people wondering how I can maintain such a pace. Unfortunately, while I normally bounce back incredibly fast, there was no bouncing back on this one, absolutely none. I was in a fog, completely drained in all ways. After two months, I was getting scared and I decided to seek out medical help, I feared the following: Adrenal Failure and it turns out I may have been accurate.
I did some blood testing and visited a Doctor of Naturopathy, where I learned that my hormones were absolutely gone – my T-values were at the level of a 70 year old, my estrogen was climbing. All of these things helped explain physical distress, mental fatigue and fogginess, anxiety, waking up sweating profusely in the middle of the night and reduced desire for intimacy (wow, this was an odd one).
Fortunately, I’m in a position that allows me to take a step back and refocus myself on my health, which reminds me of the following quote that is attributed to the Dalai Lama regarding people: He sacrifices his health in order to make money. Then he sacrifices money to recuperate his health.
This is what I’d done this whole time – I had sacrificed myself, always in the pursuit of more money and I was killing myself, literally!!! Why, what was the point? So I could save the magic $10,000,000 that all my friends discuss, which would pay you $400,000 per year using the 4% rule, but why $10,000,000? Why the need for $400,000 per year…I’d never made this much so what made me think I’d need it in retirement? Also, how long would it take to get there – 65, 70? Was I really going to do this to myself for another 30 to 35 years? Absolutely not, insane!
So, what did I do? I started to read about early retirement, I read the blogs of: J. Money – Budgets Are Sexy, Mr. Money Mustache, and Jim Collins. They inspired me to really start examining my life and ensuring that I was focusing on the right things – physical, mental and financial health! For the first time ever, I said “Ms. Frugal…Those budgets, cash flow and net worth statements, can we look at them?”. I know she was shocked, she always is at my 180 degree changes in behavior and lifestyle but she responded with vigor to the idea of focusing more on the Income Statement Debits and being more frugal. After all, she felt that she’d been doing it alone for years now and her partner was waking up to the real world.
How do I feel now that we’ve made this decision? How do I feel now that I’ve looked at our net worth statement and we’re exceeding $600,000 and targetting $1,000,000 in under three years? It feels great? I feel less stress, I know that if things don’t improve and the stress doesn’t disappear, that I will likley walk away at 45 (9 years) and pursue other paths in life that offer me growth personally and professionally in avenues I haven’t explored, perhaps something that is part-time that allows me to focus on training for long-distance endurance events, or travelling the world – regardless, I don’t feel locked in and “stuck” anymore. I realize that I have enough Fuck You Money to survive a disaster and I have a skill-set that should allow me to make close to $100,000 per year relatively stress free at multiple jobs, given the skill-set and tool-kit I’ve deleveloped as a result of the stresses and long hours of the past 15 years.
For the first time, the darkness of the tunnel is showing a light and I’m excited for the future again and realize that I will achieve my dreams and they don’t require $10,000,000 but perhaps a mere 25% of that number (yes, MMM it would be lower if I lived in a city with lower cost of living, specifically housing)…When we get to $2,500,000 on the blog, which I’ve estimated to be within my 9 year time frame, it will be great to be able to say how life is, how work is, how the stress is, and whether I will keep going or, at the mid-life age of 45, retire into the sunset. The little Frugaler’s will only be 14 and 11 and I’d have some great formative years to still spend with them and Ms. Frugaler…We will see….Time will tell…
Mr. Happy Frugaler