Why am I overhauling my life for frugality instead of continuing my path as a middle-class consumptionist suburbanite? Mr. Money Moustache struck a chord in me and awakened a passion I forgot I ever had.
I was six years old when my mom took me to the local bank. She opened up a savings account for me and with it came a passbook. Each time we went to the bank they would print a record of deposits and interest payments in the passbook – super high tech for 1993, I'm sure. I loved seeing a few cents at a time accumulate every month on the $100 or so I had from birthday and Christmas gifts. And then, when we deposited some more money, instead of $.09/month, they'd pay out $.10/month! Getting paid to do nothing? Just from storing my birthday money at the bank – money my mom wouldn't let me touch anyway. Talk about something for nothing. I was hooked.
I knew that the more money I saved, the more I could make in interest. I thought about how cool it would be to win the lottery. With $2 million in a savings account (I didn't know about other investment vehicles at the time), the interest payment would be like $70k/year (hooray for mid-90s interest rates), which was/is a pretty respectable income. And I wouldn't even have to work! Now, how to win the lottery...
And that leads me to:
GOAL: Become financially independent
I want that salary-sized interest payment from my massive 'stash. What MMM has shown me is that there's another way, one where the odds aren't stacked against me (as much). Cut your expenses. Raise your savings rate. Forego material possessions you don't need and conspicuous consumption that's holding you back, and build your 'stash like it's your job.
I know that any goal worth it's weight will have a deadline or a timeline associated with it. This is a big one though and I've been finding it tough to make assumptions and start pinning down specifics. I don't know how marriage and kids are going to fit into my plans for financial independence, and there's a lot of short- and medium-term goals that will lead to The Big One, like paying off my student loans and paying off my mortgage. But I think 10 to 20 years is a good range to target.
Yeah, let's update my goal with an upper bound, to keep things interesting.
GOAL: Become financially independent within 20 years (by 2032)
Much better. By 2032 I want passive income from my investments to equal or exceed my annual expenses. Good goal if I do say so myself. Now let's make it happen.