All things YETI are very popular right now. It started with a high-end cooler that will keep contents ice cold for days on end. Useful for a week long camping excursion. But a little overkill for the tailgate or backyard barbecue. The product line has expanded to include everything from coffee mugs to koozies to bottle openers.
Where I work, the tumblers have become quite popular. For a cool $39.99, you can get a 30 oz tumbler to hold your drink of choice. The product description states the double-wall vacuum insulation keeps cold drinks cold and hot drinks hot for longer. Sounds pretty cool. But again, you’re at the office. Not out in the wilderness. Perhaps a little overkill? Maybe a $5 mug will do for holding your cup of Joe?
The point is not to hate on all things YETI. They serve a purpose, and by all accounts serve it well. The issue I see is so many people buying these expensive items for the sake of having something cool and expensive to show off. They’re not really buying it for its functionality, but rather for the status symbol.
More Stuff Won’t Buy You Happiness
Now, a $40 mug isn’t going to break you. The problem is, when people buy items like this it usually isn’t an isolated incident. Advertising has become very good at convincing us we need products we really don’t. Spending $40 here and $40 there really starts to add up. Before you know it, you’re sitting there sipping your Mountain Dew out of your YETI tumbler while seeing if your new iPhone 7 really is water proof and wondering where all your money went.
The sad thing is that people have come to believe they need these things. Advertising does its best to convince us that we’re better off having stuff we don’t need. They convince us we won’t be happy drinking coffee out of a regular mug. You need this top of the line super mug to make you happy.
The problem is, more stuff doesn’t lead to happiness. What does lead to happiness is having control over your life. If you’re not taking control of your own financial future, you’re not going to be happy. It doesn’t matter how much money you make or how much stuff you have.
I can attest to this. My first job out of college was at a CPA firm, auditing public and privately held companies. It’s a tough and demanding job, and the high industry turnover rate proves it. I didn’t hate my job by any means, but I didn’t love it either. Raises and promotions were based more off of time in the system and office politics rather than merit.
I always thought if I could just get to a certain salary level, I would be happy. When I first started out, that number was $75,000. When I reached that mark it became $100,000. But the truth is, reaching these salary levels didn’t increase my happiness.
We are no longer living like poor college students as we did when my wife went back to school. We have plenty of money to meet our basic needs, spend a little more on things that are important to us, and donate to charity. Earning more will only lead to life style inflation. Unless, we take a different path to focus on financial freedom.
Introduction to the World of FIRE
I was first introduced to the world of FIRE (Financial Independence / Retire Early) earlier this year. Before this, retiring early to me meant anytime before 60. When I started to read more about people retiring well before age 50, the light bulb finally came on. Just because the norm is retiring in your 60s doesn’t meant you have to do it that way. If you polled workers across the country if they could choose to retire in 10 years or 30 years from now, what would they choose? Of course they would choose 10 years! I love my current job but I still don’t want to work into my 50s and 60s.
Why then, do people focus on earning more money for the sake of lifestyle inflation? A bigger house, nicer car, and fancier clothes won’t buy you happiness. Maybe they will in the short-term, but not for the long-term. Why not forego these items and focus on achieving financial independence? Think about it. What is more satisfying than knowing you and your family are financially secure? No more worrying about the status of your job and all the other stress that comes with work. No more working because you have to. Work will be something you can choose to do if you find something enjoyable and fulfilling.
Seems like a simple formula. The problem is, most don’t see this as a possibility. They also aren’t willing to forego things that will only make them happy in the short-term for things that will make them happy long-term. When the light bulb finally came on for me, and I realized I could control my financial future and reach financial independence at a young age, that’s when my overall happiness really started to take off.
Take Control of Your Financial Future
What are the steps I’m taking to control my financial future? Earlier this year I talked to a financial advisor who a former work colleague had given my name to. Through these conversations, I realized I didn’t need to pay expensive fees up to 1.5% of my portfolio to effectively manage my money. There are so many tools available on the internet now that make a DIY approach so much easier.
The first thing I did was begin tracking my net worth with Personal Capital. Personal Capital has numerous great tools available for tracking your wealth and planning your financial future. From reviewing fees in your portfolio to assessing if your current savings rate will meet your future financial goals, it really is a valuable tool. If you don’t have a goal in mind and a plan to get there, the likelihood of achieving financial independence is slim to none.
The second step was to increase my savings rate. I was already maxing out my 401k, but did not have a significant amount of after tax investments. This will be a must in order to retire early, as I won’t be able to access my retirement accounts without penalty until 59 1/2. Since May of this year, we have increased our after tax, after 401k savings rate from less than 10% to 35%. I’m anticipating being able to increase that to 40% by early next year, and my goal is to get it up to 50% in the next year or two.
As you can see, taking control of your financial future is easy. All it takes is a decision on your part to actively pursue it, and some discipline to forego instant gratification. It really is that easy.
Readers, have you made the decision to pursue financial independence? What are your goals and how are you planning to get there?