Let’s begin with some definitions:
leanFIRE: Retiring on just enough to exist. You may have to:
- eat dog food
- live in a musty basement
- keep the thermostat at 55 in the dead of winter
But you don’t have to work.
fatFIRE: Retiring with way more than you need. You can:
- go to Taco Bell every night for dinner (skip the $.99 menu and go for the big-ticket items!)
- enjoy triple-ply toilet paper (your delicate tush deserves the ultra-plush!)
- travel to exotic locations in your fancy camper-van
When I quit work, I wanted neither leanFIRE nor fatFIRE. Wife Mindy would not have been happy eating pet food and I never wanted to eat at fancy restaurants like Taco Bell every night.
We Could Have Failed
Looking back, we may have come close to subsisting on cat food:
Prior to quitting work, I thought that we’d need $1,000,000 to retire. Per the 4% Rule, that would allow us to live on $40,000 per year. The problem was that we never actually kept track of our spending; I just pulled the $40,000 number out of my keister (“buttocks” to the layperson).
Anyway, when I did start keeping track of spending some years later, the actual number was more like $60,000 per year. Whoopsie!
But then, some things went our way:
Wife-FI
I had never thought that Wife Mindy would go back to work. However, at about the same time I was hanging up the keyboard, she dusted hers off. This was the result of serendipity (“a happy, chance event” to the layperson) and hard work. BiggerPockets is most likely the last job she’ll ever have and she’ll leave whenever she no longer likes it. In the meantime, the extra money has been nice.
Crazy Markets
If someone had said this to you on January 1, 2020:
In the next 10 months, a pandemic will kill over 1,000,000 humans worldwide and put the president of the United States and the prime minister of the United Kingdom in the hospital. Furthermore, it will shut down parts of the economy for extended periods of time.
And then that person asked:
How will the stock market react?
I’ll bet you wouldn’t have said that the markets would be at all-time highs. But here we are. And that isn’t the whole story. Since I quit way back in 2017, the markets have been on a tear:
Side-note: The incredible unpredictability of the markets is why you should NEVER TIME IT!
Side-Hustles
I started this blog to amuse myself, fix myself, and hold myself accountable. Then, some of you started reading my silliness and it started making money. That was never my goal, but I’ll take it*.
Mindy obtained a real-estate license a while ago. The only reason she got it was to save us money on transaction costs when we flipped homes. But now, lots of friends want to buy houses in Longmont and ask her to represent them. Woo hoo, more money, more local friends.
Big Tech, Big Money
I’m a nerd obsessed with nerd things. This even means investing. Before I knew what an index fund was, I bought Amazon, Google, Facebook, and Tesla stock. Being stubborn (not selling) has served me well:
So now, we find ourselves sitting on a net-worth of over $3,000,000, way more than we ever planned for or even imagined. And the batsh*t crazy thing is that I believe the best is yet to come. I believe that Tesla has a decent shot at becoming a $2,000,000,000,000** company by end of decade.
(I could say “2 trillion,” but typing all of those zeros is a lot more fun.)
So, we’ve found ourselves in a position of fatFIRE, from a money standpoint at least…
When leanFIRE Goes To fatFIRE
So now that the bank account is fat, we can live and spend pretty much how we want. We can’t buy a yacht or helicopter, but there are plenty of other ridiculous objects we could throw our money at. And, I would throw my money at them if I thought they could make me happy. More on that in a moment.
Here is how fatFIRE has changed our lives:
I Don’t Sweat The Little Stuff Now
I was at Home Depot over the weekend buying insulation for my soon-to-be-finished basement. While there, I wondered if I should put sound deadening material in the ceiling to help muffle noises from above.
I thought about my daughters’ rivalry (“violent fights” to the layperson) that go on for many hours every day:
And immediately put the sound insulation material on top of the pile:
I’ve been known to research stupid little purchases for hours. It feels good to have let this go. You only have so much time and so much mental bandwidth.
I Still Optimize Though
That $850 pile of building materials only cost $725 because I downloaded a coupon. Before driving to Home Depot, I thought about everywhere else I had to go and figured out the most efficient way to route my trip. I also took the seats out of the vehicle so I could maximize my load. I’ll always be an optimizer. I have no tolerance for waste.
The Big Stuff Doesn’t Matter Anymore
I used to lust after silly things when I was younger:
Some day. I’ll have a Ferrari and a $10,000 home theater system!
Now that I can have these things, it just isn’t the same. It doesn’t hurt that I already owned a semi-fancy car and let it go because it didn’t bring joy.
If I thought something was going to bring happiness, I’d buy it without hesitation. However, the Happiness Filter is a strong one through which most objects do not pass.
Making Money Is Fun
It’s been years since I’ve watched a TV series. My entertainment is studying The Future (in caps and bold for dramatic emphasis!). I may or may not have sat on the toilet for an hour this past weekend devouring videos of Tesla’s latest FSD (Full Self-Driving beta). Sometimes, I even invest based on my toilet-time-learnings. My other current obsession and potential investment is SpaceX. Rockets, oh yes…
And I talked to a friend over the weekend about a couple of new ventures. Entrepreneurship is fun. It’s even more fun if you’re doing it with friends and the primary goal isn’t money.
Side-note/ don’t-sue-me stuff: Don’t take investment advice from me! I have a VERY HIGH tolerance for risk. Also, why would you take investment advice from someone who writes about toilets and plays with plastic dinosaurs?!??
Giving Away Money Is Fun
I’ve started something new with the daughters. In between fights, I have them research charities and we donate money every month to our favorites. Our last two donations when to the Arbor Day Foundation (yay trees!) and Save The Children (Yemen is an incredibly sad tragedy of horrible scale).
Giving money away:
- teaches my children about generosity
- teaches my children about the less-fortunate
- makes me feel all warm and tingly inside
Be Optimistic
I’m a natural-born pessimist so that heading wasn’t easy to write. However, most of the time, life turns out OK.
There are a million people who will tell you not to trust the 4% Rule or tell you that a health condition will drain your bank account or say that the world is about to change and the stock market is doomed. I think that these arguments discount the benefits of early retirement. Because I have time for fitness and I no longer have a stressful job, I’m more likely to have fewer health issues. If my bank account starts running low, I’ll move to a cheaper part of the world.
Your life won’t be the same as mine, but I’ll bet that something you do in retirement generates income. If you’re frugal, even small amounts of income go a long way to increasing success. For example, if you can live on $40,000/year, a small hustle that brings in $10,000 brings your 4% withdrawal down to 3%, greatly minimizing risk.
Don’t let others’ fears get in the way of your dreams.
Lifestyles Of The Dirty And Smelly
I’m happy for our new fatFIRE riches. But perhaps the most interesting part is what hasn’t changed. The car I drive is from 2003. Taco Bell still tastes good. I mow the lawn and shovel the driveway. I still work really hard too.
I’m about to finish up my basement. We’ll add almost 600 square feet of living space to the home including a new Thinking Throne (“toilet” to the layperson).
About a month ago, I patched up the floor I had opened to add the new thinking throne. I was hauling concrete down to the basement in 5-gallon buckets. It was rough work. After about 20 minutes, I encountered Younger Daughter who had a look of revulsion on her face:
- Daughter: Dad! You’re so dirty! And what’s that smell?
- Me: Me!
- Daughter: Oh, yeck!
I wouldn’t have it any other way.
*Making money in retirement is a controversial topic. Am I really retired? I don’t know and more importantly, I don’t care.
Writing these ridiculous blog posts with stupid pictures and 7th-grade humor makes me happy.
I’ll add $60,000 of value to my home by finishing off the basement. The sense of accomplishment and learning new skills is why I’m doing it though. The work makes me happy. The space I’ve created for my family is going to be awesome.
My favorite quote on the topic of meaningful work comes from Voltaire’s Candide, one of my favorite books:
“I should like to know which is worse: to be ravished a hundred times by pirates, and have a buttock cut off, and run the gauntlet of the Bulgarians, and be flogged and hanged in an auto-da-fe, and be dissected, and have to row in a galley — in short, to undergo all the miseries we have each of us suffered — or simply to sit here and do nothing?’
That is a hard question,’ said Candide.”
**Tesla! So yeah, I just said that the company may be worth 2 trillion some day. Those who look at Tesla as a car company are getting it all wrong. Tesla is many things including battery technology, manufacturing, and green energy production. Perhaps the most interesting part of Tesla is the services it is starting to offer with the car. Full Self Driving, insurance, supercharging, and infotainment come to mind. The breadth of what Tesla is doing is amazing and will change the world if it pulls it off. Don’t expect this to happen overnight though. This story will play out over many years. Meet me back here in 2030 and we’ll see if I was right.
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Great article! I don’t always comment but I always read! What about the fires in Colorado? How close are they to you?
Thanks for the kind comment.
Fires! We could see them from our neighborhood which was disconcerting. However, they were still at least 10 miles away. Hopefully, they mostly out after the snow we had this weekend,
it’s a good feeling to let go of those nickel and dime decisions once you have enough and then a big cushion on top of enough. mrs. me likes to buy little junky things sometimes and it used to privately drive me nuts. you know what, though? it seems to make her happy and it’s not like we’re talking about $200 items like another purse or some designer clothing.
nice job on that basement. i don’t know how much value our attic art studio renovation added to our value last year but i suspect it’s a lot.
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That’s nice to hear. It’s hard to change once you live a certain way for 20 years.
I always thought I’d loosen up a bit when we’re older, but maybe we’ll stay pretty cheap.
FatFIRE still sounds good to me even if I don’t plan to spend that much. 🙂
Great job on the basement.
Ok…I’ll ask…what are the boxed out areas in the basement pic? Shelves? Mini beer fridges?
We just finished up our small bathroom remodel. My boss, she’s pushing hard for the laundry room remodel which includes tile floor. Never done tile before…so I spent some time on youtube. What’s your thoughts on Ditra Tile Membrane? I went through your 33 hour bathroom remodel and didn’t see you use the ditra.
Mini beer-fridge! Ha! They are just some built-in shelves. I’m trying to spice the basement up a bit. Having just a big grey box seems pretty boring…
Ditra is awesome, but expensive. I’m confident to work without it, so wouldn’t spend the money. I would only use it if the floor underneath had issues. Let me know if you need help.
A life of abundance over scarcity is a beautiful thing, It’s even better when the ‘abundance’ part are things that really matter, which usually aren’t material. To quote Lenny Kravitz: “It’s a beautiful thing to really realize what you don’t need.”
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That is a great quote! I only wish I would have figured that out before I had the money!
Great stuff Carl. You’re definitely doing it the right way and enjoying life. Don’t sweat the little stuff is important. 🙂
Thanks Bob!
PoF’s leanFIRE lifestyle is my fatFIRE haha.
It is great both you and Mindy enjoy the home renovation projects. I once tried replacing a faucet and the numerous trips to home depot made me glad I choose to write code for a living. Fixing bugs in software never got me wet 🙂
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Haha, plumbing can suck. There was one day I went to Home Depot like 5x for parts…
Amazing Carl, great job. Even though I don’t like picking stocks and don’t want the risk and wasted time of analyzing them, I do regret not buying Amazon, Google and some of the other tech giants a few years back when I thought about it. Oh well, my simple index strategy has still made me rich enough 🙂
Keep the goofy posts comin’, love ’em!
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I’m mostly an indexer now! Buying stocks consumes valuable mental bandwidth. Also, no empire lasts forever. Will Google or Amazon be around in 20 years? If not, will have ridden the stock to $0? Hard questions…
Congratulations on the unexpected riches. I love how you’ve approached it AND how it’s paid off for you. As I get closer to FI and walking away, I’m starting to think about these things. I envision time spent learning and doing interesting things, and hopefully my wealth grows a little bit, too. Not having to think about the money part too much is the biggest benefit.
You bring up a point I see a lot in the FI circles like the FI subreddit: There seems to be a lot of pushback to the 4% rule, saying it’s not really safe, you should think about 3.5 or even 3%. I’ve even seen arguments that only 2.5% is truly safe.
But the truth is, none of them are truly safe. There is no such thing. What we’re really talking about is probability and risk tolerance. The chance of a portfolio collapsing is always non-zero. It’s just that probabiliy by the time we get to the 4% rule is so low that it’s highly improbable. But improbably doesn’t mean impossible, and it never is, even at 1%. Someone with a higher risk tolerance might consider 5-6% to be acceptable. Most of us feel comfortable with 4% because it’s in a range where the probability of failure is low enough to be acceptable, and we feel confident in our ability to overcome the rare circumstance that might lead to a portfolio toward failure.
I feel like thinking in probability is almost a pre-requisite for FIRE. When I encounter resistance to the idea, it usually comes from a whatabout argument. Missing from the counter argument is an understanding about the probability of what they’re pointing out. There is a nonzero chance I will be hit by a bus, but I decide that the risk is low enough and trust enough in my bus-collision mitigation measures to feel that the risk is worth is.
I think most FIRE writers such as yourself, who have pulled the trigger, understand this of course. But thinking in probability is what I see missing from folks who don’t understand the principles of FIRE.
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Yeah, great comment!
I think about this stuff all of the time. One other random thought I’ve had is this: I may end up in a rough place financially late in life and that would suck, but I’m good with that since it meant I got to spend decades of my life in a great place. Would you rather live a pretty great life from 40-80 or from 60 until death? I’m going with my younger years.
“Don’t let others’ fears get in the way of your dreams.” Or your own fears!
So timely! I’m getting close enough to pulling the plug in February (hoping for my bonus) that I’m starting to socialize it with a few people for accountability. I’m not where I originally planned to be financially but I’m at the FU point and the workplace shenanigans are getting unreasonable. I started a small side gig this summer that is going well and have a couple other potential ideas if needed. Plus, Taco Bell is always hiring if I really need money, right?!
Pros: I’m so ready to be out of the corporate world and regain my time. I’m also starting to feel a bit of moral concern continuing to sell my time to a company I don’t respect. My daughters FAFSA will be based on my 2022 tax returns so quitting in 2021 will benefit her 🙂 (maybe this is a stretch?!)
Cons: I make a shit ton of money to do very little and have complete autonomy and flexibility over my schedule; knowing I’m not quite where I want to be financially and the money is so easy right now, I am really struggling with the “just one more year….” and of course… but what if the market tanks (as it probably should at some point) and doesn’t recover by the time I need to start withdrawing?!
Kim and I were just talking this morning that we knew the “just one more year” struggle would happen when we are close and here it is just as expected!
Hey Tina, how the hell are you?
It’s very hard to give up easily earned shit-tons-o-money! And if I had to guess, the next 10 years won’t be the best for the markets. However, with your new free time, you may spend more time working on your side-gig which will result in more money from that. And I would just have some cash laying around to help ride out any sequence of returns issues.
These calls are always tough to make. Turning down easy money IS NOT easy.
First, you may be spending too much time in an entirely unhealthy position.
Even if it’s made you lots of money through some thorough contemplation.
😀
Second, I’m very happy to see the note about charitable giving and using it as an educational opportunity for your kids. That’s awesome. Hats off to both of you.
Not only will they learn, but they’ll see you as a healthy example. Maybe it’ll encourage them (and for them to encourage others) down the line.
It’s like the reverse of generational wealth but in a good way. Very cool.
And third, you guys have always had a great story. You do you, sometimes it’ll make money. Whatever. As long as you’re aiming for what makes you happy, well-adjusted people—that’s what matters. Cheers!
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“First, you may be spending too much time in an entirely unhealthy position.”
I assume you’re talking about Tesla? If so, my conviction is strong and I’ve grown more confident lately. It is speculative and there is certainly danger there, but if it went to $0, it wouldn’t change anything for us. So, I’m sticking with it!
It feels good to give back. I hope the girls turn out to be better humans as a result too.
Haha, Carl—no, not a financial position!
“I may or may not have sat on the toilet for an hour this past weekend devouring videos of Tesla’s latest FSD (Full Self-Driving beta). Sometimes, I even invest based on my toilet-time-learnings.”
A very different kind of unhealthy position! 😀
Although, I could give you grief for having a portfolio heavily weighted by Tesla. 🙂
Great article! I wish I as handy enough to renovate houses, but unfortunately I am not. I had my doubts about TLSA and unfortunately I did not buy at $50 per share. I think you are correct though about it being the next $1T company and beyond.
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Oh man, DIY is easy! YouTube can teach you to do anything! I just wired my basement (I had never done major electrical work before) and didn’t electrocute myself even once! 🙂
Tesla is great. One more thing they should make is lots more profits =) when do you expect that will happen?
I’m impressed by real estate markets where doing renovations results in increased value. Our local property market is pretty depressed at the moment so you’re only recovering around 70% of the cost of any improvements. So it’s really only for your own enjoyment at this stage. But hopefully a buyers market and be able to find some deals =)
Big profits will come! For now, Tesla is plowing everything back into the company which is exactly what it should be doing.
Renovations: Yep, it wouldn’t make sense if we paid someone to do this stuff. For example, my basement will come in around $10,000. If I had paid someone, it would have cost north of $50,000.
The renovations also wouldn’t make sense if I didn’t enjoy the work. We already have enough money, so life now is about maximizing happiness.
yeah, even if I do the stuff myself it still runs at a loss. Labour costs are tiny here (like $20 per day tiny). At the moment renovations are for fun and personal consumption. Property has been in the pits for a while and will likely remain so with the economic issues locally.
Anyway, I’ve started looking elsewhere for gains, and it seems online businesses are doing far better with a global audience. I can always invest into RE funds elsewhere if I’m missing that aspect for my portfolio =)
I was wondering if you would comment on the % of pre versus post tax investments that you have.
Was your strategy always to max out pre tax first during your working years ?
Is that strategy still the same now ? Perhaps given your age future RMD considerations factor in decision for new money that is being invested.
To your point about Crazy Markets, I cannot tell you how many people I know that panicked at the bottom because “It is only going to keep going down” and “There is no way it is going to recover any time soon”. Most of them pulled out, at or close to, the bottom and a few still haven’t gotten back in because they don’t want to buy in higher. It is crazy to see people change their whole mindset and say “This time is different” as soon as they feel some pressure..
I love reading about people like yourself that have defined their plan and stuck to it and because of that getting to benefit from it’s success.
I enjoy your posts and writing style. Keep them coming!