A Brave New World

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I’m going to tell you how I came upon the cheat code to life. This is something that is not taught in school, advertised on commercials, or known by most of your parents. It’s so shockingly simple that it almost seems intentional that it’s hidden away or quietly whispered. I want to scream at the top of my lungs, “YOU DON’T HAVE TO WORK UNTIL YOU DIE!”

So here’s my story, you’ll see that I’m nothing too special, but I happened to find the right information at the right time.

Growing up, I was taught that money was the root of all evil. This stemmed from money being the main source of stress in our lives. We never had enough money to buy the things we needed or what we wanted. We always had hand me downs from my grand parents. We never turned on the air conditioning or the heater. The attitude my parents took to was that you had to swindle others to get ahead in this life. They were so scared of losing money in the Wall Street “Casino” that they didn’t invest a single dollar. While my mom worked hard to stretch every penny coming in, my dad, despite supporting us, blew alot of money on cigarettes and alcohol.

Eventually my parents got their act together. It took my mom giving my dad an ultimatum for him to change his habits. My dad eventually quit smoking and drinking, they stopped fighting, and they started actually saving for their future. It was then, I remember them talking about how they would never be able to retire. Luckily my dad worked for the post office so he had a pension he could rely on. Even though they had extra cash set aside they were too scared to actually invest and continued the frugality I grew up with.

It was at this point I started looking into universities. My parents made it clear that they did not have the funds to pay for my college. I had to either work or qualify for scholarships to cover the charges. During High School, I focused on taking dual credit classes at a local community college and earning college credit through AP courses to help mitigate costs. When I eventually did get accepted to various colleges I picked the one that would give me the most scholarship money. I also factored in the fact that I could live with my parents if I picked a local university.

Long story short, I eventually graduated college with no debt, I had a nice professional job lined up upon graduation. Many of my friends at this point bought new cars or got awesome apartments close to town. I decided to live with my parents to build up some savings before navigating the “real world,” much to the chagrin of my then fiance. I eventually saved up for a 20% down payment and bought a house and got married to my college sweetheart.

It was at this point I was working crazy hours at my new job. All the work I had put into university and my degree had left me with a career that required 60 to sometimes 80 hours of work a week. I remember being in East Texas auditing a small conglomerate of local businesses owned by a single individual. This guy was a former lumberjack with no college education. When I was reviewing his businesses and all the ins and outs I realized he was drawing almost $1M a year from it. I was arrogant then, I thought, “I’m smarter than this guy how does he make so much more money than me?” I eventually asked him how he got to where he was.

He basically told me, he always knew that he didn’t know everything. He focused on what he did know but also relied heavily on others to help him.

“I’m not arrogant enough to think I’m always the smartest man in the room. I was a C student and I learned at an early age that I should always get the A students to do my work.”

That statement bothered me immensely at the time. What was the point of all of this!? Did I work so hard just to make someone else rich? Shouldn’t I get paid more because I have a college degree? How come I have to work so many hours for a fraction of what he makes?

There were all immature questions. I didn’t know that this man spent 2 decades as a lumberjack learning how his business worked. He worked hard to learn who his customers were and built relationships with them. He learned about Chinese companies that couldn’t get enough lumber in their local region and were desperate for more product. At the time there was no distribution chain to get the wood from East Texas to China. He saw this opportunity and had the resources to move in on it. He had been living extremely frugal for these two decades and invested everything he had in trying to get the wood from East Texas to China. Once he built this distribution chain, he got more capital to improve his processes, to buy other local businesses and expand his wealth. It was a snowball of wealth, that reached a point where he didn’t really have to run his business anymore. He simply monitored that everything was running okay.

I saw this and strove to one day start my own business. I also started googling “How to retire early” as well to see how other people had broken free from 9-5 jobs. It was then that I came upon the blogs Early Retirement Extreme and Mr. Money Mustache. I saw in these blogs the “A students” I was looking for. These were guys that had already achieved what I wanted out of life. Rather than come up with the answers on my own through trial and error I wanted to copy and paste what they had done.

So as far as I could tell there were two ways of getting away from a 9-5 job:

  1. Work your ass off, save up some capital, see an opportunity, and put all your eggs in that basket, be competent enough to hire the best people to manage it, and eventually make the company interdependent and self sustaining.
  2. Work a normal 9-5 job, save at an extremely high rate, invest in index funds (I’ll explain these later), and quit your job once your safe withdrawal rate of your nest egg exceeds your spending.

Of course there were many more ways of building wealth than this, but these were the maps I had at the time.

Shortly thereafter, I invested in some rental properties and became a landlord. It was during this time we had it made. I was married at the time so we had double incomes. I bought a very cheap house that we could easily afford. I even partook in some international travel, buying some consumer electronics, and some fun distractions. The difference between me and others is that I was saving almost 70% of my income. I avoided restaurants, fashionable clothing,  The amount of money we were saving was impressive and kept snowballing to higher and higher contributions. I eventually got a better job and my pay increase pushed the rate of growth even further.

It was at this point my fatal mistakes came to pass. Despite all of this seemingly positive momentum, I had let my marriage fester into a loveless roommate situation. I eventually sold my rental properties and rolled the money into a “nicer” house (lifestyle inflation). I was filled with arrogance and pride that I could do anything I set my mind to. I told myself I would “fix” my marriage and finally improve it to a standard I deemed worthy of me. This is when I realized that these maps I had been following had only my needs in mind.

Even though I communicated my wife that these were the paths I wanted to take, they weren’t what she wanted. She didn’t protest or resist, in fact she seemed to be on board, but deep down she resented me for not living in the moment more. It became a constant source of stress for her to scrutinize every expenditure she had. Our sex life was lackluster. When I tried to communicate my needs it devolved into arguments about how controlling I was and further exacerbated resentment. I eventually reached a point where I wanted to live in the moment more and wanted to throw my FI plans out the window to stay with her.

This was weak and unprincipled.

I think she realized this and finally called it quits. She grew up much different than I did. Her family took trips, went out to eat, and didn’t talk about money. At the time I didn’t realize how much of my childhood experience I brought into the relationship. I’m sure there was some kind of balance we could have achieved, but the ability to communicate never materialized.

At the end of the day, I lost some money in the divorce, but that was trivial compared to the human connection I let atrophy. The divorce triggered a period of self reflection and growth. I spent my days focusing on life dimensions I’d always just put on the back burner: Happiness, Social Interactions, Exercise.

I look back on those first couple of months of solitude with a sense of accomplishment rather than despair. Even though I lost this connection, I still feel like I’m working towards something great. The ability to escape from a 9-5 job is still my primary goal, but I’m also learning how to live along the way. I’m hoping that if I take the time now to develop the life I want to live, I won’t be left at the end of my journey at a destination I don’t recognize. I’ll run through the basic components of the “cheat code” in the next blog post.

Listening to: