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“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”
–Mark Twain
That quote, from Mark Twain, is one of my favourite quotes of all time. It also happens to be the intro to the last e-mail I ever sent at work.
Poetic-ness aside, I was actually pretty scared shitless at the time, cringing as my cold, clammy hand hit the “send” button.
But now, after travelling to 18 countries, and easily staying within the safe withdrawal rate of $40,000/year, I can’t help but look back on that day and laugh.
What the hell was I so afraid of?
It seems hilarious now, but back then, no matter how many other FI blogs I read, and even when none other than Mr. Money Mustache himself emailed me telling me my math was sound and that everything was going to be okay, it didn’t matter. I was still terrified.
Because that’s the thing about fear. Fear traps us. Fear holds us prisoner.
Just like that scene from Shawshank Redemption (if you’ve never seen the movie, what the Heck’s the matter with you?). You know, where Brooks, who’d been in prison for 50 years for killing his wife and daughter, is finally paroled and set free?
As his friend Red puts it “They trained him to like it inside the shit house and they threw him out.”
Once let out of the “shit house”, Brooks can’t take it anymore and hangs himself. Apparently, he’d gotten so used to jail, being free made him afraid.
For a brief moment on my last workday, when I hugged my friends good-bye, and walked away from the corporate prison that had swallowed most of my life for past 9 years, I couldn’t help but wonder.
Is this what Brooks felt like?
Am I going to survive outside these prison bars? Or would I get scared and scamper back into another prison soon afterwards?
Fear is a powerful thing. It can swallow you whole if you let it.
But luckily, as I soon found out, there is something much more powerful than fear.
A diversified portfolio.
As it turns out, if we had continued sitting in our little cubical prisons in North America, we would’ve never seen the rest of the world.
We would’ve never met the bike mechanic, who despite not having a college degree, makes 6-figures doing what he loves in Amsterdam.
We would’ve never met the expat from England, with an open-heart-surgery scar across his chest, who now calls Vietnam home. Instead of continuing to work a stressful job which nearly killed him, he now runs an award winning spa, hires locals, and gives back to the community by running an orphanage with his wife.
We would’ve never met the couple, traveling the world with their adorable baby boy, who are living proof that kids don’t stop you from living your dreams.
And we would’ve never seen the sunset, stopped to smell the roses, and fallen head-over-heels in love with this awesome planet we call home.
Instead, we got to do all that and more.
And because of the 60/40 portfolio, which throws off 4% each year to cover our living expenses, we also got to discover one of the biggest benefits of quitting a job:
How much your costs drop when you no longer need to work
No more commuting to work everyday. No more expensive work clothes or dry cleaning. No more eating out all the time or paying annoying “decompression” costs like retail therapy or boozing it up in bars to make up for stressful days.
No more being tied down to an overpriced city. We could move anywhere we wanted to.
As a result, we went to South East Asia, and found out we could live like royalty for less than $25,000 a year. In fact, the hotel we’re currently staying in costs only $27CAD/night ($20USD), has a pool, a rainfall shower, maid service, AND includes breakfast!
By including Southeast Asia, we were able to travel to 18 different countries for only $40,000/year. And that includes expensive countries like Switzerland, Denmark, UK, and Japan. The trick is to travel-hack, use AirBnB, cook from time to time, and mix up the countries.
And you know what else? During this time, since we were able to mostly live off the dividends and let the capital value appreciate, our portfolio actually GREW. In the year since we’ve officially left home, our net-worth went up $27,000.
So somehow we MADE money! While travelling the world!
What was I so afraid of again?
So if you’re afraid of making a positive change in your life, remember that while fear is a useful reminder to be careful and cautious, if you properly manage your risks you have nothing to be afraid of.
Fear will hold you prisoner. A diversified portfolio will set you free.
Oh yeah and hope. Throw hope somewhere in there too…
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Love this post FireCracker…it was very philosophical!
Fear is the mind killer. If we give-in to fear, we give-in to corporate slavery.
Yes, those of us on this path are going to live very different lives than those of corporate drones. That’s scary. The outcome isn’t known…unlike working a 50 hour a week job for 40 years.
We could end-up anywhere! I find it kind of exciting, rather than scary.
Fear of the unknown is what stops a lot of people from pursuing FI. Hell, even for the people who’ve accomplished it, fear tends to sneak up on us from time to time. What I found out though is the trick to fighting fear is to actually do that thing you’re afraid of. Once you are in the thick of it, it really doesn’t feel so scary after all. As long as you have backup plans for anything that might go wrong.
The longer we’ve been retired, the less I feel the fear. Now I just feel exhilarated most of the time:)
I’m glad you are feeling the excitement rather than the fear. Life’s too short to live in fear.
Traveling around the world and even making money meanwhile. You just made my Monday at work even more desperate 🙂 Every time I read such articles I feel really dumb why I haven’t started properly saving and investing 10 years ago. Life would be different know, or at least I’d be so much closer to FI. Anyway, it’s always better to start later than never, isn’t it…?
How I got through work is to think about it as a means to an end. Before I discovered FI, work seemed to just drag on forever. But once I had a goal, I thought of work as the means to reach that freedom, and the years just flew by. It also helped to see the portfolio grow over time. That was very encouraging. Our human brains love milestones, so it really helps if you think of it like rock climbing. You want to look at each individual hand hold rather than how far away the top is.
And yes, it’s never too late to start. Once you have a goal in mind, and move towards it, you will get there for sure.
Great post Firecracker. You really made a good point about how fear holds us back. I know that’s one of the main reasons I paid off my student loans as fast as I could. Having that hanging around me put a lot of fear in me. I couldn’t really quit the awful gig because I needed the money to pay the loans.
Really wish I’d known about FI back when I was in college. Really would’ve made me approach things differently. But hey, I’m still a millennial. Plenty of time to catch up!
That’s the best thing about being a millennial. We have time on our side, so it’s in our best interest to use it to our advantage. With your high salary and your wife’s high earning potential, you guys will reach FI in no time!
Great stuff — love the psychological aspects of money & FI, especially.
Fear is probably the FIRE seeker’s greatest enemy, mostly because some of us use that fear as a motivator to be frugal and save in the first place. So it’s harder for us to let go of it when it really is time to pull the trigger.
True! It is a double-edge sword. But once you tame it, you end up accomplishing a lot. Easier said than done, but I’m glad I had lots of role models (like MMM, JL Collins, Root of Good, GCC, Mad Fientist etc) to follow before I took the leap.
Ah yes….the psychology of fear….I know from experience that it can paralyze you…especially when it comes to investing in the markets. The solution? Educate yourself and make a plan. I make “pro and con” lists all the time for major decisions. Nothing overcomes fear like knowing what you are doing – or at least understanding the risks and rewards. Of course, flying by the seat of your pants (sometimes) makes for a more exciting ride!
I guess that’s why they call it “Analysis Paralysis” right?
I like the idea of “pro and con” lists. It helps sort out the thoughts in your brain and clarify things so they don’t seem so scary anymore.
Some people do fly by the seat of their pants and everything turns out okay. But as a “plotter” not a “pantser” (writing terms ;P) I think that would just drive me nuts :).
I love these posts! We are big chickens. But reading about your and GoCurryCracker’s experiences and travels gives us the confidence and courage to know we can afford the lifestyle and travel. Thank you to both you and GCC for doing the tough reconnaissance work and paving the way. The world awaits!
You’re welcome! It’s always easier to take the leap when you know others have done it successful 🙂
And yes, the world awaits! And it is incredible…
Inspirational. Good to have a Fellow Canadian confirm its doable.
*Canadian high-five*! We can’t just sit back and let the Americans have all the fun, can we? 😉
Could you not give any tips about what your diversified portfolio contains? How do you weigh the different asset classes? Would love to invest successfully too and travel more…
Greetings from Germany
Check out the answer to “What is Your Portfolio Allocation?” on the FAQ page:
https://www.millennial-revolution.com/faq/
We will also be doing a step-by-step tutorial on how to invest in the near future. Just waiting for paperwork approval for the brokerages before we can start.
It’s funny how fear can make an appearance right as you’re about to do something awesome. We recently FIRE’d and we’re on the verge of an extended stay in Mexico. We’re all excited about this trip, but I occasionally find myself wondering if I should go back to work and live a “more traditional” lifestyle. After all, we could easily save another $100k a year with our fat-cat teaching jobs. Fortunately for me, the thought of going back to work never gains much traction, but I’m amazed how that sneaky notion keeps creeping back into my mind.
I imagine that the frequency of such negative thoughts will decrease as I get more accustomed to my jobless, FIRE’d lifestyle. Freedom can be scary in unexpected ways. Great post. Ed
“I’m amazed how that sneaky notion keeps creeping back into my mind.”
Yup, that used to happen to me all the time right after I quit. But now a year later, we have zero regrets and it hardly ever happens at all.
Fear is mostly manufactured by our brains to protect us from threats. But once we do that thing we’re afraid of and realize the threats are all made up, the fear goes away.
Have fun in Mexico! Once you experience the freedom and thrill of travelling, it makes all those years working hard towards FI completely worth it!
My all-time favorite quote.
Yeah, Mark Twain rocks!
I can always rely the markets to go up over the long run. Death and taxes are given but so is the chase for the almighty dollar and greed. If some companies fail there are always other companies to swoop n a fill their spot or a space opens up for another business. This is why i invest in the market overall, not individual companies. The market always self corrects and goes where the money goes, so I dont have any fears when it comes to investing. I also generally avoid bonds and such. Stocks and dividends are much more my things (i get this via etfs i dont invest individually.)
And people dont seem to get that stock markets and the economy arent directly tied (i know this sounds strange but its true) I think thats where alot of fears come from.
Ive learned this by looking at my parents invstements, my parents invested conservative and went majorly into segregated funds and got minimal returns. Honestly they would gotten better just putting into Tbills and such. My mother made more on an 5000 investment in some random dividend mutual fund than she did on those awful awful segregated funds (its worth 8000 approx 5 years later). Some of her funds made practically NOTHING! My parents savings would be double what it is now if they just stuck to some plain dividend mutual funds. Of course ETFs would be ideal. But even reg mutual funds they would have done really well even with the 2008 downturn.
I think the problem is financial education. I didn’t even know what an ETF was until I started working. They never taught it in school and banks are always trying to push shitty mutual funds with high MERs that eat away all your returns.
Once people understand how index investing works, I think it’ll help a lot in alleviating their fears.
Very inspirational, an excellent Monday article indeed!
Thanks, Colby!
Do you wish you retired earlier? Save 800k instead of 1 mill?
I think I mentioned in an earlier comment that you guys will probably build even more networth after you retire 😛
Im still far from FI but one day maybe!
And you were totally right 🙂 Just ride the market, don’t touch the principal and it will grow over time.
And I don’t think you’re as far from FI as you think. Lots of people don’t realize how much their costs drop after they retire and how easy it is to work part-time or a side gig after leaving the 9 to 5.
Agreed re costs dropping. From cinema to coffee, groceries and clothing, costs go down & quality of life surprisingly goes up.
One real surprise for me was to see how much of my old spending pattern was related to work stress & lack of time
Yeah I agree with you about expenses dropping. I still have some way to go since I only worked for 4 years. Right now I’m still in the saving and investing phase. My biggest regret is not doing index investing earlier, I should have started doing it right when I started working. Instead I built up an emergency fund first (1-2 years of expenses) before I really started investing.
Even now I’m unsure how to proceed, the market is high and I don’t want to dump all my money into equities at once.
FIRECracker I also thought your networth would sky rocket because I think you and Wanderer will find plenty of ways to make money. One day you’ll be listed with Financial Samurai and MMM as someone who ended up making more after retirement with their side gigs 🙂
Ha ha. Thanks for the vote of confidence! 🙂
Use dollar cost averaging…that way you have can smooth out the ride and have cash available for buying opportunities.
I have some fear. I am mostly invested in the UK version of Vanguard 60% equity fund. My fear is that bonds look a little like return free risk at the moment.
NB love the blog
Some European bonds have negative yields, so I can see why you fear bonds. However, that being said, it makes sense to diversify by buying bond ETFs. If you completely remove bonds from the portfolio, you run the risk of not having anything to rebalance during market crashes. Bonds saved our butts in 2008, by allowing us to rebalancing and not lose any money.
It also helps to hold part of the portfolio in cash, so you have something to live off while the market is recovering.
Agreed re cash, but I can’t bring myself to leave money just sitting there. In british pound terms, my pot has had an extraordinarily good run in the last 12 months or so and I should take the extra c20% and leave it in cash.
Am lucky that the Mrs is keen to work, so while she can still pay the bills I’ll probably stay invested. Were she to go off income, I’d immediately move a big chunk off risk.
Yup, that makes sense. While she’s working, you can afford to take more risk and have a smaller cash reserve.
Amazing post, as always.
Fear is what is holding me back right now.
Sometimes we call fear “being wise”. I hate to be wise. Dreamers are not wise.
It’s good to be a little wise. But not too wise. As Steve Jobs said “Stay hungry, stay foolish”. Gotta have balance between “dreamer” and “realist’.
I really enjoyed this post and I like how it has a more positive tone (I must tell you, the posts where you seem to address the haters than those of us who get it, sounds angry-ish).
And a bike mechanic makes 6 figures in Amsterdam? I love that city!!
Me angry? NO WAY!!! 😛
And yes, that bike mechanic works 16 hours a day, and LOVES what he does. Every time we went out, he would rattle off all the different types of bikes and point out the ones he fixed. I’ve never met anyone else that passionate about anything.
$40,000/year for *two* people.
I’m impressed and almost speechless.
Even at $50/day for lodging and $50/day for food, that amounts to over $36,000 a year already. Now also add just the bare essentials: health insurance, personal care products, clothing, medication, dental care…
Exactly, that’s why travelling saves you more money than living in North America. In South East Asia, nice digs (hotel with pool,free breakfast, maid service) can be had for as little as $19/day. Food is only $15-20. So we’re only at $34-$39/day for 2 people. Health insurance/medicine,etc all that is all covered by travel insurance ($5/day for 2 people). So to get to $110/day, which amounts to $40k/year, you have TONS of room.
In North America, you could live on 40k/couple as well, but you’d have to cook often and pick a smaller city with cheap rent. Definitely do-able but no swimming pools 🙂
Makes me wish I had started working/saving/investing when I was 7 years old.
I could have retired by age 20.
*only semi joking*
If we have kids, we’re going to teach them to start investing/saving at 5 years old 🙂 Youngest retiree in high-school 😛