The sands of time. Unfortunately, time is not on our side. Once you’re born, the clock is ticking away and life is slowly coming to a close.
That realization isn’t meant to depress you. Rather, I write it to empower you.
I’ve attained phenomenal success over the last four years, and I couldn’t be more proud of myself. I went from being worth less than a baby to managing a six-figure portfolio spitting out thousands of dollars per year in passive dividend income. And this didn’t come about by way of magic.
No, I worked incredibly hard to cut expenses wherever I could - and I’ve been open about all of the changes I undertook to put myself in the best position possible to create a wide spread between income and expenses, and then invest the capital from this spread into attractively priced, high-quality businesses paying and raising dividends.
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A wonderful story. And I’m so incredibly grateful for it.
There’s More To Life Than Money
However, there’s more to life than just growing wealth. There’s life itself. There’s the time side of the ledger.
They say time is money, but I say time is life.
My relentless pursuit of financial independence has been Terminator-like over the last few years, and it’s been really incredible. And it’s the success I’ve achieved thus far that allows me to slow down a bit and enjoy the time I have today. I could have continued on with my Terminator role, but like Arnold Schwarzenegger loses muscles with age, I lose a little slice of life with every day that passes by. Once time is gone, it’s gone forever. And I try to never lose sight of that fact.
So I decided recently to quit my 50-hour per week full-time-and-then-some job at a luxury car dealership where I made my living as a service advisor, and I’m now going to focus on family, writing, inspiring, and investing, which are really my inner passions. I’m going to take the plunge and see where writing full-time takes me. It’s a whole new adventure, and in the end that’s what life is: an adventure. How fun you make that adventure is ultimately up to you.
And while this may just be a temporary interlude for me, I’m anxious to enjoy the moment.
Money Can Always Be Made, But Time Cannot
See, I can always go back to work at a traditional 9-5, if necessary. I can always make more money later in life if blogging doesn’t pan out. But the time I have now as a 32 year-old man will never be mine again. Every second that ticks away is a second I’ll never have again. And this is a fundamental truth that you should always remember: You can always make more money in life, but you’ll never be able to make more time.
So if you’re not pursuing your passion now, ask yourself why. And by pursuing your passion, I mean pursuing either something that makes you happy right now, or pursuing the freedom necessary to indulge your passions once your financially free. Not all passions pay money, and passion shouldn’t be about money anyhow. It should be about being happy and making the most of your time on this planet. But I would argue that most traditional jobs aren’t geared to make you happy; they’re geared to generate the maximum possible results out of you, which would usually be profits for the company you work for. Therefore, use that job to generate the most income possible (while simultaneously minimizing expenses and creating that spread I wrote about earlier) so that you can pursue what ultimately will make you happy.
So if you’re not already completely free and/or happy is it because your monthly nut has grown out of control and you need the money the high-stress, high-pay job you currently spend most of your time at provides? If that’s the case, how can you change that? Do you need the house you live in? Notice I didn’t say want, I said need. Do you actually need as much space as you currently have? What about the car you drive? Do you actually need it? The weekly restaurant visits? The nights out on the town? The clothes you wear?
I’m not saying you need to change your life. But I asked myself these very questions four years ago. And I realized the answer was quite easy: No, I didn’t actually need any of it. I liked living in a luxury apartment building in a gated community. I enjoyed driving a newer model car. And meals at restaurants taste good! But all of these niceties were just holding me back from what really made me happy. I thought they were filling some type of emptiness inside of me where I would exchange my time for money and then the money for the “good life”, but I was actually creating unhappiness from the beginning by exchanging my time for money in an environment I never wanted to be at in the first place, and thus created an artificial “need” for a nice car, prepared food, and an apartment with plush carpeting and crown molding. Damn you, crown molding!
Who Wants To Grow Up And Be Unhappy?
But all of this was just crap in my life that was holding me back from what I knew really made me happy: time to pursue my passions in life. See, to afford all that stuff I had to spend more than 50 hours of my free time at a car dealership putting up with all of the office politics and usual crap. Nobody raises their hand in 4th grade and says, “I want to grow up to work 50 hours per week at a car dealership!”
Equally so, however, nobody raises their hand at a young age and says, “I want to live frugally so I can become financially independent at a young age!” But maybe we should be saying these things when we’re young. Instead, we’re all looking forward to the giant house, the nice car, the fancy food, and the cool clothes. But all these things do is keep you apart from what ultimately leads to more happiness: the time needed to spend with the people you love, the passions you enjoy, the experiences you’ll always remember, and the simple enjoyment in being alive. Being present is highly underrated.
So what’s your “enough”? Have you thought about the number that’s truly enough for you? Or is it just working until you’re 65 and hoping you’ve saved enough to finally start living? What if you could live now? Have you ever thought about that?
I’ll share first! My number is pretty low. I plan on becoming financially independent at 40 years old, where my passive dividend income exceeds my expenses. And I plan on spending somewhere around $1,500 per month in early retirement. That means I’ll need to generate $1,500/month in passive income. So, technically speaking, that is my number: $1,500. Doesn’t sound like much, does it? Well, it’s actually not. However, doing a little reverse math, we can see that in order to generate that type of passive income I’d need to have ~$500,000 invested in a portfolio yielding an overall 3.5%. Am I on track? Well, I started this 12-year journey four years ago, and I have eight years left to reach financial independence by age 40. So I’m about 1/3 of the way there. And great news: I’m currently on pace to exceed my goal of $5,200 in dividend income this year on a portfolio valued at just over $160,000. So I’d say I’m pretty close to on track, although I’m likely going to slow my own progress down with my transition to full-time writing. We’ll see how this changes things!
So, remember, your number might be lower than you’d think. The lower you can get your expenses, the less passive income you’ll need to sustain your lifestyle. Therefore, a smaller portfolio would be necessary to generate that lesser passive income. And even if you pull the trigger a little early and things don’t work out as planned, you can always go back to work and earn money. Time, however, can never be earned. Once it’s gone, it’s gone forever. Furthermore, once you own all of your time for yourself it’s unlikely that you’ll never earn another dollar again through some type of exchange, especially if you’re retiring very early in life.
And I encourage you to take advantage of your enough once you actually achieve it. Don’t fall for the “one more year” syndrome where you actually achieve the passive income number that will allow you to live the life you always wanted, but yet continue to press on for even more money. The time you’ll be missing in the interim, once passed, can never be recreated.
So it’s your turn. What’s your enough? Is my number crazy low or crazy high? Will you fall for the “one more year” syndrome?
Thanks for reading.