
<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/04/Whats-Your-ideal-work-350.jpg" alt="" class="wp-image-21830" /></figure></div>



<p>What is the difference between ‘work’ and a ‘job’? These two words are very similar, but they are not exactly the same. Basically, a job is something you do in exchange for money. Work has a broader meaning. It can be something you do on the job, but work also includes taking care of your family, fixing up the car, training for a race, or helping out at church. Personally, the subtle difference is the key to how I look at early retirement.</p>



<p>I <a href="https://retireby40.org/gave-up-engineering-career/">retired from my engineering career</a> in 2012 to become a stay-at-home dad/blogger. When I left my job, I considered myself retired. But I still had plenty of work to do. I took care of a toddler and worked on my blog. However, I had a lot of freedom to do them the way I choose. Well, being a stay-at-home dad was a job for the first few years, but it got much better later. Once RB40Jr started school, life improved tremendously. Now, I can do pretty much whatever I want. That’s early retirement to me.</p>



<h2><strong>Dream job</strong></h2>



<p>So what’s the point? I’m sure you’ve heard this question before – <strong>what’s your dream job?</strong> It’s a common question from counselors and interviewers. &nbsp;I’m pretty sure most of us aren’t applying for their dream job. We just need money to pay the bills. Anyway, even a dream job comes with plenty of overhead (i.e., BS).</p>



<p>I was very lucky. I got my dream job right out of college and it was great for many years. However, the dream job became increasingly stressful as I got promoted. I had to take on more responsibilities with more seniority. Eventually, it turned into a nightmare and I couldn’t handle it anymore. <a href="https://retireby40.org/my-two-weeks-notice/">I quit</a> and I haven’t regretted that decision at all. Of course, I miss the paychecks, but we’re very comfortable financially now. The tradeoff wasn’t worth it because I achieved financial independence. I can live a comfortable lifestyle even without that job. &nbsp;</p>



<h2><strong>Dream Jobs circa 2012</strong></h2>



<p>You know what, I wrote about my <a href="https://retireby40.org/dream-job/">dream jobs in 2012</a>. It’s been 9 years so let’s go back and see if anything changes. Back then, the plan was to be a stay-at-home-dad until RB40Jr started school, and then I’d consider finding a job again. RB40Jr is now in 4<sup>th</sup> grade! He doesn’t need much supervision anymore. Is it time to go after these dream jobs? Do these old dream jobs from 2012 still sounds good? Or has something changed…</p>



<ul><li><strong>Food truck/cart</strong> – I still think it would be fun to run a food cart for a few years. But only if I have a few good employees to do most of the work. Even then, it would be a lot of work. My friend just started a food cart and she is super busy all the time. It’s exhausting work. The only way I would do it is the cart generates really good income and I can work just 3-4 hours/day. Otherwise, it’s too much work. I’m not that passionate about it.</li><li><strong>Teach Yoga, Tai chi, meditation</strong> – This still sounds like fun to me. It’d be part time and I can help people feel better. Mrs. RB40&#8217;s cousin teaches yoga while studying for his degree in physical therapy, and seems to enjoy it. I don’t think I’m a good teacher, though. I’m too impatient.</li><li><strong>Foreign Service</strong> – We gave up on this dream. Mrs. RB40 went in for the oral interview and she didn’t get the position. She realized that her values and those of the interviewers didn&#8217;t align. I don’t want a boss, so this is out for me as well.</li><li><strong>An okonomiyaki restaurant</strong> – This would be way too much work for me. I still think an okonomiyaki restaurant would do very well in Portland. (After Covid subsided, of course.) It’d be a great place to hang out with friends and drink. Unfortunately, I don’t want to work that hard anymore. Running a restaurant is stressful and very time consuming. This kind of place requires a big initial investment with no guarantee of success.</li><li><strong>Run a small B&amp;B or hostel in a nice tropical location</strong> – I still think this would be a great job. We can meet travelers and enjoy the nice tropical location.</li></ul>



<p>I still think these jobs would be great, but I’m used to a relaxing lifestyle now. These jobs are a lot more structured than being a SAHD/blogger. Also, I don’t want to work that hard anymore. These days, I think the perfect amount of work is 10-15 hours per week. Any more than that and I’d have to really be passionate about the work.</p>



<h2><strong>Ideal work</strong></h2>



<p>I don’t ever want to go back to work full-time. Instead of a job, let’s try thinking about what kind of work we’d like to do.</p>



<p>Hence the question &#8211; <strong>what’s your ideal work?</strong> What would you like to work on if money isn’t an issue? You’d need to be able to do the work or acquire the skill to do so. I mean, it would be so fun to be an astronaut, but that’s unrealistic. I’ll go first.</p>



<ul><li><strong>Blogging</strong> – I enjoy writing a blog post and interacting with the comments. Blogging is a lot of fun and I think everyone should have a blog. The problem with blogging is that it takes a lot of time. I used to blog 3 times per week, but I reduced it to 2 over the last few years. That’s pretty good for now, but I plan to work much less in a few years. Here is my tutorial on <a href="https://retireby40.org/how-to-start-a-blog-why-you-should/">how to start a blog</a> if you’re thinking about it.</li><li><strong>Coaching</strong> – Lately, I think that financial coaching would be a good way to give back. I’d like to coach poor families and immigrants who need help with money. They’re the ones that need help the most.</li><li><strong>Reading fun books</strong> – I love reading science fiction and fantasy books. I enjoyed the <a href="https://www.amazon.com/gp/product/0316311294/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0316311294&amp;linkCode=as2&amp;tag=retby40-20&amp;linkId=b84baafdcc80cd895eb51e21c4bd3eae">Expanse series</a> and Bernard Cornwell’s Saxon Chronicle a lot. They are so good! I also like Mark Lawrence. His latest book is tying all the previous series together. I can’t wait for more. Is there a way to make money by reading books? Probably not. Maybe I should try writing some short stories.</li><li><strong>Small event planning</strong> – This is actually Mrs. RB40&#8217;s dream. She likes the idea of throwing small-scale events (wine or food tastings, themed dinners, or lectures, for example) and loves planning get-togethers at our home. With her regular job, though, she hasn&#8217;t had much time for this.</li><li><strong>(2021 addition) Neighborhood pet/house sitting </strong>– I think it’d be fun to meet local pets and get to know our neighbors more.</li></ul>



<p>Hmm.. My current life is pretty close to my ideal work situation. I work 10-15 hours per week and spend the rest of time relaxing and taking care of things around the house. This isn’t full retirement, but it’s about as close as I’ll ever get. I enjoying being a little productive and I probably won’t ever stop working completely. Even after I stop blogging, I’d find something else to do. I like earning a bit of money every month.</p>



<p>Anyway, it’s interesting to see how my idea of work changes over time. Previously, I thought a dream job would be ideal, but now I prefer to work part-time on fun projects. Being self-employed is really nice, too. I can’t handle having a boss anymore.</p>



<p><strong><em>Okay, it’s your turn. What’s your ideal work? Is it what you’re doing right now?</em></strong></p>
<p>The post <a rel="nofollow" href="https://retireby40.org/whats-your-ideal-work/">What’s Your Ideal Work?</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


What’s Your Ideal Work?


<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/04/Q1-2021-passive-income-350.jpg" alt="" class="wp-image-21818" /></figure></div>



<p>The first quarter of 2021 is over. Wow, what a quarter! The U.S. stock market gained 6% in just 3 months. That’s pretty amazing. Everyone is optimistic about the recovery and investors are the winners in Q1. This is why everyone needs to become an investor. Many workers are still struggling. Working isn’t enough anymore. The way to build wealth is to invest.</p>



<p>We did quite well in Q1 too. Our net worth increased 4.8% and I’m extremely happy with that. It lags the market a bit because I haven’t updated the value of our properties. We also hold bonds and cash. Those didn’t gain much. My target net worth gain is 10% per year so we’re already halfway there in just 3 months. The stock market gained a lot in a short time and gave us a huge boost.</p>



<p>If you haven’t <a href="https://retireby40.org/early-retirement-asset-allocation/">checked your asset allocation</a> in a while, you probably should do it soon. The stock market did so well over the last 12 months. It probably threw your asset allocation out of whack. I think many investors are taking some profit and they are trying to diversify a bit. I’ve been trying to <a href="https://retireby40.org/passive-income/real-estate-crowdfunding/">invest in a good real estate crowdfunding project</a>, but all of them got funded very quickly. I didn’t have time to research. That’s a huge difference from the last few years. Investors and wealth managers are selling and moving the profit into other investments. Ok, let’s see how we did with passive income in Q1.</p>



<p>*FI ratio =&nbsp;<strong>passive income</strong>&nbsp;/ expense</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="640" height="216" src="https://retireby40.org/wp-content/uploads/2021/04/2021-Quarterly-Passive-Income.jpg" alt="" class="wp-image-21805" /></figure></div>



<h2><strong>Passive Income is Key</strong></h2>



<p>Passive income is one of the keys to a successful early retirement. Once your passive income surpasses your cost of living, you achieved financial independence. Money won’t be an issue anymore and you can do whatever you want. I retired before our passive income got there, but I had an alternate source of income – blogging. Luckily,&nbsp;<a href="https://retireby40.org/8-years-after-early-retirement/">early retirement worked out very well for me over the last 8 years</a>. Our household income was good so we kept investing. That enabled our net worth almost tripled over this period and we are very comfortable financially. However, we are still working to&nbsp;<strong>surpass 100% FI ratio&nbsp;</strong>consistently. &nbsp;</p>



<p>Currently, we support our moderate lifestyle with the combination of these income streams:</p>



<ul><li><strong>Mrs. RB40&nbsp;</strong>works full-time. She&nbsp;<a href="https://retireby40.org/can-wife-early-retire-yet/">plans to take a year off in 2022</a>&nbsp;and perhaps retire early after that.</li><li>I blog a few hours per day and work on a few small side hustles.</li><li><strong><a href="https://retireby40.org/passive-income/">Passive Income</a></strong>&nbsp;– We generate passive income from the stock market, real estate crowdfunding projects, rental properties, and other investments.</li></ul>



<h2><strong>FI Ratio</strong></h2>



<p>*FI ratio = passive income / expense</p>



<p>The FI ratio is a simple way to measure progress toward financial freedom. Personally, I think 100% FI ratio is overkill because nobody stops working completely after early retirement. You’ll probably be okay with 80%, but it’s better to err on the side of caution.</p>



<p>In Q1 2021, our FI ratio was really good at 132%. We didn’t spend much and our passive income was good. We haven’t been vaccinated yet so we spent most of our time at home. Once we’re vaccinated, we probably will spend more money on eating out and other fun activities.</p>



<p>Now, I’ll go over each of our passive income streams individually.</p>



<h2><strong>Real Estate Crowdfunding Income: 2021&nbsp;target $5,000</strong></h2>



<p>I started investing in real estate crowdfunding in 2017. My experience has been mostly positive. There were some problems, but I still think it’s a good way to invest in real estate. At this point in life, I don’t want to be a hands-on landlord anymore. Working with tenant can be stressful. Repair and maintenance also takes a lot of time and effort. I’m ready to become a passive investor. However, real estate crowdfunding is a new way to invest and it could be risky. I plan to cap our asset allocation at 10% for this class of investment.</p>



<p>This year, I’ll continue to invest with <a href="https://retireby40.org/crowdstreet" target="_blank" rel="noreferrer noopener">CrowdStreet</a> and PeerStreet. They both have a very good track record. Personally, I like CrowdStreet more because there are fewer turnovers. Most projects last about 3 to 5 years. I could leave my investment alone for a while and just collect the payout. PeerStreet is good, but you have to keep reinvesting because many projects completed early. That’s too much work for me..</p>



<p>Real estate crowdfunding is great because you can diversify to different areas of the country. I’m not optimistic about the Portland real estate market so I’d rather invest elsewhere.</p>



<p>Here is the spreadsheet of my RE crowdfunding investments.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="468" height="345" src="https://retireby40.org/wp-content/uploads/2021/04/April-RE-Crowdfunding-1.jpg" alt="" class="wp-image-21804" /></figure></div>



<h3><strong>Real estate projects I invested in</strong></h3>



<ol type="1"><li><a href="https://retireby40.org/crowdstreet" target="_blank" rel="noreferrer noopener"><strong>CrowdStreet</strong></a> – Currently, we have $92,000 invested with CrowdStreet. I plan to invest $25,000 more very soon. It’s been difficult to invest because new projects close very quickly. The demand is through the roof. CrowdStreet is the best RE crowdfunding company on the market right now. Their commercial projects are first class and they came through the downturn very well. Check out new projects by <a href="https://retireby40.org/crowdstreet" target="_blank" rel="noreferrer noopener">signing up for a free account at CrowdStreet</a>.</li><li><strong>PeerStreet</strong> – PeerStreet is good too. This is strictly hard money lending so the income potential is not as high as equity deals.</li><li><strong>Retail shop ($10,000</strong>). This is a lending project. It’ll last 3 years and pays 5% interest.  </li><li><strong>An apartment in Arizona</strong> ($10,000). This equity deal is going well so far. The estimated cash on cash return is 10% per year. After 5 years, the property will be sold. The estimated total rate of return is about 16% per year.</li></ol>



<h3><strong>Problem</strong></h3>



<p><strong>A fast-food restaurant in Florida</strong>&nbsp;($5,000). This project is in foreclosure. I think we’ll get some money back, but I’m not sure how much. I’d be happy with 80%.</p>



<p>*Estimated ROI is just that, an estimate. There are risks with any investments including real estate. If you’re not comfortable with real estate crowdfunding, I recommend REITs. They are more established and also have good returns. We have some REITs in our dividend portfolio, VNQ and VNQI.</p>



<h3>Invest in real estate crowdfunding</h3>



<p>If you’re interested in real estate crowdfunding, sign up with these companies below and check out their projects. You don’t have to invest if you don’t see something you like. I like to invest with a sponsor who has a very long track record, at least 10 years in the real estate business.</p>



<ul><li><strong><a href="https://retireby40.org/crowdstreet" target="_blank" rel="noreferrer noopener">CrowdStreet</a> </strong>– CrowdStreet focuses on commercial properties across the USA. They have apartments, hotels, storage units, strip malls, medical facilities, and more. The minimum investment here starts at $25,000 which is a bit higher than other companies. They have some great projects lined up, though. <a href="https://retireby40.org/crowdstreet" target="_blank" rel="noreferrer noopener">Sign up for free with CrowdStreet</a> and check them out.</li><li><strong>PeerStreet </strong>– PeerStreet has a very good reputation. Investors can invest in private lending with real estate backing. The only issue I’ve had is early completion. Some projects finished very quickly and I had to spend time to find a new project to invest in. PeerStreet only accepts investment from <strong>accredited investors*.</strong></li><li><a href="https://retireby40.org/realtymogul" target="_blank" rel="noreferrer noopener">RealtyMogul</a> – All investors can invest in REIT deals at RealtyMogul. In addition, accredited investors can invest in private projects and do a 1031 exchange.</li><li><a href="https://retireby40.org/fundrise" target="_blank" rel="noreferrer noopener">Fundrise</a> – <strong>Non</strong>-accredited investors can invest in iREIT here.</li></ul>



<p><strong>&nbsp;*Accredited investor</strong>&nbsp;needs to have over $200,000 of income over the last 2 years or a net worth of over $1,000,000.</p>



<h2><strong>Rental Property Income: 2021 target $3,500</strong></h2>



<p>Currently, we have 2 units in our rental property portfolio. However, I plan to consolidate to just the duplex where we live. I can’t be a DIY landlord anymore because I want to travel a lot more. My parents live in Thailand and they are getting older. I want to spend a lot more time there in the coming years. At this point in life, I’d rather invest in diverse real estate through&nbsp;<a href="https://retireby40.org/passive-income/real-estate-crowdfunding/">RE crowdfunding</a>. Being a landlord is a great way to build wealth, but I need my investments to be more passive.</p>



<p>2021 started off a bit rough. One of our tenants was in Europe since last year and we gave him 50% off. Hence, we’re down a bit so far. The good news is that our tenant just came back! Our rental income should improve for the rest of 2021.</p>



<p><strong>2021 YTD rental income: </strong><strong>-$51</strong></p>



<h2><strong>Dividend Income: 2021 target $16,000</strong></h2>



<p>Dividend income is my favorite form of passive income. Investors own a small part of these public companies and they work for you. These days, I mostly focus on companies that consistently grow their dividend income over the years. This strategy will ensure that our dividend income keeps growing even if we don’t add new money. Currently, we reinvest all the income from this portfolio, but we’ll use it to pay our expenses once Mrs. RB40 retires. If you’re a new investor, here is a helpful post –&nbsp;<a href="https://retireby40.org/how-to-start-investing-in-dividend-stocks/">How to Start Investing in Dividend Stocks</a>.</p>



<p>As for reinvestment, I don’t DRIP. I just accumulate the dividend and invest in a stock or&nbsp;<a href="https://retireby40.org/real-estate-crowdfunding/">real estate crowdfunding</a>. This year I hoped to generate $16,000 from our dividend portfolio.</p>



<p>For new investors, I <strong>highly recommend <a href="https://retireby40.org/firstrade" target="_blank" rel="noreferrer noopener">Firstrade</a></strong>. Firstrade is a great discount brokerage that I used for many years. Recently, they lowered their trading fees to $0. That’s great news! Young investors can buy stock without having to worry about the fees. Most discount brokerages also reduced their fees to zero last year. It’s a great time to be an investor. I remember paying $80 per trade when I started investing. <a href="https://retireby40.org/robinhood" target="_blank" rel="noreferrer noopener">Robinhood</a> is okay for a brand new investor.</p>



<p><strong>YTD dividend income = $3,530</strong></p>



<figure class="wp-block-image size-large"><img width="571" height="422" src="https://retireby40.org/wp-content/uploads/2021/04/April-dividend-1.jpg" alt="" class="wp-image-21809" /></figure>



<h2><strong>Tax-advantaged Income: 2021 target $37,000</strong></h2>



<p>New investors should read these posts first.</p>



<ul><li><a href="https://retireby40.org/start-contributing-roth-ira/">How to start contributing to a Roth IRA</a>. The Roth IRA is the best way to go if you are young.</li><li><a href="https://retireby40.org/what-if-always-maxed-401k/">What if you always maxed out your 401(k)</a>. See the magic of compounding in real life. The 401(k) is the easiest way to invest for your retirement. Don’t miss out on it if your company offers the 401(k).</li></ul>



<p>The money in these retirement accounts isn’t easily accessible at this time (I’m 47), but they still count as passive income. Once we both retire full time, we’ll&nbsp;<a href="https://retireby40.org/roth-ira-conversion-ladder-minimize-taxes/">build a Roth IRA ladder</a>&nbsp;to access our traditional IRAs so we don’t have to pay the 10% early withdrawal penalty.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="554" height="177" src="https://retireby40.org/wp-content/uploads/2021/04/April-tax-advantaged-accounts-1.jpg" alt="" class="wp-image-21810" /></figure></div>



<h2><strong>Somewhat Passive Income – Blogging</strong></h2>



<p>Blogging isn’t very passive for me at this point so this is&nbsp;<strong>not part of my FI ratio.</strong>&nbsp;This year I spend 10-15 hours per week writing, networking, responding to comments, and maintaining Retire by 40. I moved to this schedule when my son started virtual schooling. It worked out very well last year so I’ll probably stick to this schedule for the next few years.</p>



<p>Anyway, blog income was a huge bonus. When I started Retire by 40 in 2010, my goal was to generate about $500/month. After 10 years, my blog income has grown tremendously. I’m very grateful for your support. Thank you!</p>



<h3>2021 YTD Blog Income: $8,241</h3>



<p>We had a good Q1. The first quarter is the best quarter of the year, though. People spend less time online when the weather improves. The blog traffic will slow down and picks up in the fall.</p>



<p>Here is how we generated online income in 2021.</p>



<h3>Revenue: $10,610</h3>



<ul><li><strong>Banner ads</strong>: $5,979. These are the banner ads you see on Retire by 40. I hope to make about $2,000 per month with these ads at some point.</li><li><strong>Affiliates</strong>: $4,631. These are referral fees from affiliate links. If a reader signs up for a service through our affiliate links, then we&nbsp;<strong>may</strong>&nbsp;receive a referral fee. For 2021, I’d be very happy with around $1,000/m.</li><li><strong>Misc:&nbsp;</strong>$300. I got a signup bonus when I opened a new business checking account.</li></ul>



<h3>Expenses: $2,369</h3>



<ul><li><strong>Business</strong>: -$2,260. Business equipment, internet, hosting, email service, CDN, cell phone, etc… I purchased retireby40.com for $1,500. That was the big expense in Q1 2021.</li><li><strong>Travel and meals:</strong>&nbsp;-$1069</li><li><strong>Employee</strong>: -$109. This year, RB40Jr is our part-time YouTuber, photographer, model, and mascot. I’ll pay him $25 for each image and video I use in a blog post and $4 per image on social media. This income will go straight to his Roth IRA. I’m excited to see how this experiment will turn out.</li><li><strong>Estimated tax:</strong>&nbsp;$0. The first estimated tax payment is due in April.</li></ul>



<p>Here is the graph of the revenue, expense, and net income.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="650" height="358" src="https://retireby40.org/wp-content/uploads/2021/04/April-Blog-income-1.jpg" alt="" class="wp-image-21813" /></figure></div>



<h2><strong>2021 Passive Income</strong></h2>



<p>Here is our passive income spreadsheet since 2018.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="554" height="245" src="https://retireby40.org/wp-content/uploads/2021/04/April-2021-Passive-Income-1.jpg" alt="" class="wp-image-21814" /></figure></div>



<p>All in all, we had a pretty good first quarter of the year. Our passive income was a bit low, but it was enough to cover our expenses. That’s the bottom line. The good thing is that the passive income should increase in the years to come. We’re set if we can keep our expenses low.</p>



<p><strong>What about you? How did your passive income perform in 2021 so far?</strong></p>



<p><a href="https://retireby40.org/pcap/" target="_blank" rel="noreferrer noopener">*Sign up for a free account at Personal Capital</a> to help manage your net worth and investment accounts. I log in almost every day to check on our accounts. It’s a great site for DIY investors.</p>
<p>The post <a rel="nofollow" href="https://retireby40.org/2021-quarterly-passive-income-update/">2021 Quarterly Passive Income Update</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


2021 Quarterly Passive Income Update


<div class="wp-block-image"><figure class="alignright"><img src="https://lh3.googleusercontent.com/-9D3uLh0yi4Q/VqKFunpK8HI/AAAAAAAAIMY/B6R4hu69N20/s512-Ic42/Save%252520for%252520Retirement%252520or%252520Childs%252520Education350.jpg" alt="Save for Your Retirement First or Your Children's Education? " /></figure></div>



<p>A while ago, my brother forwarded me this article from the NY Times – <a href="http://www.nytimes.com/2014/03/01/your-money/save-for-retirement-first-the-childrens-education-second.html?_r=1">Save for Retirement First, the Children’s Education Second</a>. The financial planners advise that it is <strong>crucial to save for retirement before contributing to your children’s higher education</strong>. Your children have more options for education than you have for retirement. They can get loans, scholarships, financial aid, attend a community college first, or maybe just not go to college at all.</p>



<p>I’m sure it’s smarter to fund your retirement first and your children’s education second, but I’m one of those people that financial planners butt heads with. Currently, we are able to contribute to our 401k and <a href="https://retireby40.org/529-saving-plans-college/">our kid’s 529 plan</a> at the same time. Life is uncertain, though, and who knows how our financial situation will change in the future. If we can’t fund both our retirement and our kid’s education, I won’t hesitate to put higher education first.</p>



<p>*Originally written in 2014. Updated 2021.</p>



<h2>Family Tradition</h2>



<p>It’s our family tradition to prioritize higher education. My maternal grandparents put their 9 kids through college. They reinvested any extra money in their business and never set aside a retirement fund. Unfortunately, in their later years they didn’t have much money because their business failed. They didn’t have to live in the street, though. Their children sent them money and helped support them in whatever capacity they could. The more well-off kids would send more money than those with less. That’s the original retirement plan the human race had for centuries and I think it’s a perfectly valid plan. Of course, not everyone has 9 kids. It’s better to have a well-funded retirement, but<strong> retirees all over the world make do somehow</strong>.</p>



<p>My parents also prioritized higher education over retirement. They put 3 kids through college. They were able to save up some money for retirement, but not enough to fund 30 years of leisurely living. We’ll have to help support them when they get older and we are already preparing for that day by asking my mom to come&nbsp;<a href="https://retireby40.org/bigger-home/">live with us part-time</a>.</p>



<p>So you can see that it’s our family tradition to prioritize higher education. A good education is a ticket to financial security and I want to give our son a good start in life. We’re not sure how the job market will be like in 20 years, but I know <strong>having a degree is better than not</strong>.</p>



<p>*2021 update &#8211; My mom lived with us for several years. Unfortunately, she <a href="https://retireby40.org/adversity/">developed dementia</a> and we decided to move her back to Thailand. My dad is taking care of her at this time and we send them $1,500 per month. That&#8217;s $500 each from me and my 2 brothers. Eventually, she&#8217;ll need to go to a dementia care facility and we&#8217;ll gladly pay for that. </p>



<h2>Saving for Higher Education</h2>



<p>Saving for higher education is tricky because there are so many unknown factors. </p>



<ul><li>Where will our son go to college? An in-state public university is much more affordable than a private university. </li><li>Can he get scholarships or grants?</li><li>We started saving when our son was born. We had no idea how much college could cost when he&#8217;s 18. </li><li>What if he doesn&#8217;t go to college?</li></ul>



<p>A university education is a very high priority for us so we decided to ignore the uncertainties and started saving right away. I figured it was best to front-load our son&#8217;s education fund. We saved about $10,000 per year in his 529 account for the first 3 years. By 2014, we had about $40,000 in his education fund and slowed down a bit after that. Fortunately, the stock market performed very well since then. By 2021, his 529 education fund grew to about $115,000. We&#8217;re more than halfway to our target.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="600" height="366" src="https://retireby40.org/wp-content/uploads/2021/04/College-Cost-600.jpg" alt="" class="wp-image-21777" /></figure></div>



<p>We decided to use our alma mater as a baseline. The cost to attend UC Santa Barbara should be around $200,000 in 2029. We&#8217;ll continue to add about $4,500 per year to his education fund, but I feel the hard work is already behind us. </p>



<h2>Alternatives</h2>



<p>Saving for your retirement first is the smart way to go, but sometimes you just have to do what you believe in. If we don’t have enough to pay for higher education, then I would cash out some of our retirement funds to help. The financial planners are right, though. There are many alternatives for the kids these days. Here are just some of them for reference. Our son will have to resort to some of these methods if he wants to attend an expensive private school. </p>



<ul><li>Financial assistance from the school and government – scholarships, grants, and financial aid packages.</li><li>Student loans – if they can get a low rate, then that’s a good option. We can help pay it off later.</li><li>Stay at home while attending college.</li><li>Be realistic and avoid touring expensive private colleges if you don&#8217;t have the $$$.</li><li>Don’t have more kids.  Lucky for us, Mrs. RB40 refuses to go through the childbirth process again.</li><li>RB40Jr can work a bit to help pay for college.</li><li>Attend a community college for 2 years then transfer.</li><li>Take online classes. I’m sure this will be a big part of higher education in 15 years. We already got a preview in 2020. Motivated students can learn just as much online.</li><li>No need to save for graduate school. He can get a job and the company might pay for a graduate degree as professional development.</li><li>Any more ideas? Leave a comment and I’ll add them here.</li></ul>



<p><strong>From readers</strong></p>



<ul><li>Parents can work at the university and get some kind of tuition assistance.</li><li>Parents pay for 3/4 of the higher education cost and the kid covers the rest. This is a great idea because the kid will have a stake in the game too.</li><li>You can tap your Roth IRA to pay for college without having to pay the penalty. You&#8217;ll still need to pay tax on the amount withdrawn, though.</li><li>As the cost of daycare goes down, put the difference into a 529. <strong>I love this idea!</strong></li><li>Coverdell Account &#8211; you can contribute up to $2,000/year and get a federal tax deduction.</li><li>Purchase a rental property and use the income to pay tuition.</li><li>Purchase a condo and have the kid live there and get a roommate to help pay for living costs. After 4 years, you can sell it to recoup the cost and perhaps make a little profit. My brother did this when he was in a Ph.D. program.</li></ul>



<h2>Legacy</h2>



<p>Graduation from college without any debt was a huge financial boon for me. I was able to start saving and investing right away and it gave me a big headstart. We don’t plan to leave much to our son and higher education will be it. It will give him a strong foundation to generate his own wealth in life. Some of my friends still owe a ton of money and I really don’t want to put our kid through that. </p>



<p><em><strong>What about you? Are you saving for your children’s education? Do you prioritize retirement or higher education?&nbsp;</strong></em></p>



<p>You can read more about our <a href="https://retireby40.org/529-saving-plans-college/">son&#8217;s 529 account</a> here. </p>
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Save for Retirement First or Children’s Education?


<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/04/Mar.-Financial-Update-350.jpg" alt="" class="wp-image-21738" /></figure></div>



<p>Hey everyone, the first quarter of 2021 is over! Wow, that was fast. I’m starting to feel very optimistic about 2021. It seems like life is going back to normal very soon. Next week, we’ll be eligible for the Covid vaccine and I want to get it done ASAP. Also, RB40Jr is going back to school next week after a whole year away. He is only going for 2 hours in the morning and then it’s back to online learning the rest of the day. But that’s still much better than 2020. He needs to get out of the house. Oh man, it’ll be so nice to have a few hours to myself again. Things are looking up. Life won’t be exactly the same as before Covid, but it’ll be a lot better than last year.</p>



<p>On the personal finance side, we had a very nice month. The stock market keeps going up. Do I detect a hint of a bubble? Not really. I think everyone is ready for life to go back to normal and we are all looking to spend some $$$. The economy will be booming for the rest of 2021. At least, that’s what I hope for. Anyway, our net worth increased and we had a positive cash flow in March. We still didn’t spend much money. However, I think we’ll loosen up after we get the vaccine. The weather is getting much nicer too so we’ll be out and about a lot more.</p>



<h2><strong>2021 Goals</strong></h2>



<p>Here is my 2021 goal sheet. It works really well. Try it out if you can’t keep up with your New Year goals. The key is to go over the spreadsheet at least once a month to track your progress. That way, you can see which goals need extra attention.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="667" height="377" src="https://retireby40.org/wp-content/uploads/2021/04/April-NY-Goals.jpg" alt="" class="wp-image-21723" /></figure></div>



<p>All right! 2021 is turning out to be a great year for me. I already accomplished 4 of my goals and I’m making good progress on others. Here are the details.</p>



<h3><strong>Financial Goals</strong></h3>



<ul><li><strong>Real Estate Crowdfunding $150,000.</strong> I saw 2 apartment renovations project on <a href="https://retireby40.org/crowdstreet" target="_blank" rel="noreferrer noopener">CrowdStreet</a>, but they disappeared after just one day. It seems the appetite for real estate crowdfuning is real. I set $25,000 aside to invest in a good project so this goal should make some progress soon. You can read more in the passive income section below.</li><li><strong>FI Ratio &gt; 110%.&nbsp;</strong>As usual, this is my main goal for 2021. The&nbsp;<strong>FI ratio </strong>is passive income divide by expense. After one quarter, I’m very optimistic. We still don’t spend much this year and I don’t think that will change anytime soon. I’m very with 132% in Q1.</li><li><strong>1-year cash for Mrs. RB40 mini ER</strong>. Mrs. RB40 plans to take a mini-retirement in 2022. I want to have a nice cash cushion before then. Usually, we spend less than $50,000 per year so that’s my target. Currently, we have about $22,000 in our saving account.</li><li><strong>Side hustle income &gt; $3,000</strong>. This goal is just for fun. Side hustling is a good way for early retirees to keep busy and stay active. This year I plan to charge scooters, take surveys, and sign up for cash bonuses. In March, I made $655 from charging scooters. That’s not bad at all. I also made $170 from doing health checkups and completing health plans on the Blue Cross site.</li></ul>



<h3><strong>RB40</strong></h3>



<ul><li><strong>Refresh Retire by 40 – Done!</strong> Whew! I finally completed this goal. It has been on this list for over 2 years. This work required a big block of time and focus. I just couldn’t do it at home. I only finished because I was stuck in <a href="https://retireby40.org/solo-quarantine-week-1/">quarantine for 2 weeks</a> and could focus on it. I hope you like the new design.</li><li><strong>1,000 subscribers on my YouTube channel.</strong> Currently, we have 278 subscribers on <a href="https://www.youtube.com/channel/UCH8PcOiAjrzR3Td6lyvclrw?view_as=subscriber" target="_blank" rel="noreferrer noopener">our YouTube channel</a>. Unfortunately, I didn’t make any new video in March. But we’ll get back on track in April. Making video clips is hard!</li></ul>



<h3><strong>Personal Goals</strong></h3>



<ul><li><strong>Visit Thailand. Done!</strong> I went to Thailand in January. I spent 6 weeks there to check on my mom and reconnect with families and friends. It was great. I would love to retire there 6 months/year.</li><li><strong>Weight &lt; 135 lbs. Done!</strong> In Thailand, the serving size was much smaller than what I’m used to. I lost weight and it is now 133 pounds. Hopefully, I’ll be able to keep it under 135 lbs. for the rest of 2021.</li><li><strong>Estate planning. Done! </strong>We started the process with our lawyer last year. I thought it won’t be done until March, but we completed it right before I left. That’s perfect timing.</li><li><strong>V for vasectomy.</strong> I saw my doctor for an annual physical before I flew to Thailand. She said she can refer me to someone when I get back. We don’t want any more kids. This one is WIP.</li><li><strong>Happiness level &gt; 8. </strong>March was a <strong>9</strong>. I had a relaxing time and didn’t stress out much. It was a good month.</li></ul>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="580" height="371" src="https://retireby40.org/wp-content/uploads/2021/04/April-Happiness.jpg" alt="" class="wp-image-21724" /></figure></div>



<h2><strong>Net Worth (+4.8%&nbsp;YTD)</strong></h2>



<p>I’ve been&nbsp;<a href="https://retireby40.org/personal-capital-track-finances-free/">tracking our net worth</a> since 2006 and it is very motivating to see our progress. Our net increased by 4.8% since the beginning of 2021. That’s insanely good, IMO. My current target is 10% increase per year. Q1 was a great quarter. Let’s see if the market can keep on rising…</p>



<p>Here is a chart of our net worth from Personal Capital.</p>



<p><a href="https://retireby40.org/pcap/" target="_blank" rel="noreferrer noopener">*Sign up for a free account at Personal Capital</a> to help manage your net worth and investment accounts. I log in almost every day to check on our accounts. It’s a great site for DIY investors.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="550" height="267" src="https://retireby40.org/wp-content/uploads/2021/04/April-net-worth.jpg" alt="" class="wp-image-21726" /></figure></div>



<h2><strong>2021 Passive Income ($10,288 YTD)</strong></h2>



<p>Here is a quick summary of our passive income. You can see all the details on my&nbsp;<a href="https://retireby40.org/passive-income/"><strong>Passive Income page</strong></a>.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="554" height="245" src="https://retireby40.org/wp-content/uploads/2021/04/April-2021-Passive-Income.jpg" alt="" class="wp-image-21727" /></figure></div>



<p>March was a great month on the passive income side. Well, it was slow on the real estate side, but everything else was fantastic.</p>



<ul><li>Real estate crowdfunding was very slow. I received just $26 from our investments. It should improve next month.</li><li>Rental income was -$3. One of our tenants is still working from Europe and pays 50%. We’re running a little negative every month until he comes back. It’s not a huge deal because we use his area as working space. It’s helpful while everyone is working/schooling from home. He plans to come back in April so our rental income should see a nice boost very soon.</li><li>Dividend was great in March. We received $1,927 from our dividend portfolio. &nbsp;&nbsp;</li></ul>



<p>In Q1, our FI ratio was 132%. That’s really good, but it’s mostly due to low spending. Our passive income is still a little low. &nbsp;&nbsp;</p>



<p>*FI ratio = passive income/expense</p>



<h2><strong>March 2021 Cash Flow</strong></h2>



<p>Our cash flow was good in March. We didn’t spend much and saved 60% of our income.</p>



<p>Here is the Sankey diagram. You can get a quick overview and see the details below.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="700" height="500" src="https://retireby40.org/wp-content/uploads/2021/04/April-Sankey.jpg" alt="" class="wp-image-21729" /></figure></div>



<h3><strong>Gross Income</strong></h3>



<p>Our gross income was solid last month.</p>



<ul><li><strong>Mrs. RB40’s job</strong>: $8,660.</li><li><strong>Blog income:</strong> $2,298. We had a good month at RB40. However, I spent $1,500 to purchase the domain – retireby40.com. I hope that was worth it.</li><li><strong>Real estate crowdfunding</strong>:&nbsp;$26. A slow month for RE crowdfunding. You can read more at the&nbsp;<a href="https://retireby40.org/passive-income/real-estate-crowdfunding/">RE Crowdfunding Passive Income page</a>.</li><li><strong>Rental income</strong>:&nbsp;-3. The rent was reduced 50% for one tenant while he works from Europe. It’s not profitable at this rate. He’ll be back next week so our rental income should look much better next time. Read more at the&nbsp;Rental Property Passive Income page.</li><li><strong>Dividend Income</strong>:&nbsp;$1927. Solid month for dividend income. See more details on my&nbsp;<a href="https://retireby40.org/passive-income/dividend-stocks/"><strong>Dividend Passive Income page</strong></a>.</li><li><strong>Interest Income:&nbsp;</strong>$0.</li><li><strong>Side hustle &amp; Misc:&nbsp;</strong>$1,072. Scooter charging, health checkup, participating in the wellness plan, and a tax refund! &nbsp;I had a nice month with side hustles.</li></ul>



<h3><strong>Monthly Spending</strong></h3>



<p>This year, I plan to spend about $50,000. So our&nbsp;<a href="https://retireby40.org/a-simple-easy-budget-plan-for-people-who-hate-budgeting/">monthly spending budget</a>&nbsp;is $4,166/month. March was another low spend month. We still haven’t got our Covid vaccine and we’re spending most our time at home.</p>



<ul><li><strong>Housing</strong>: $1,219. This category includes mortgage, home insurance, HOA fees, property taxes, utilities, home improvement, repair, and furnishing.</li><li><strong>Parents</strong>: $500. My brothers and I each sent $500/month to my parent. They don’t have much retirement savings. Fortunately, they live in Thailand so $1,500 is enough. I also own the condo they live in so their housing expense is very small.</li><li><strong>Groceries</strong>: $445. This is a bit lower than our average. We cooked most of our meals at home. In March, we only ordered out twice.</li></ul>



<p>Here are some of the dinners I made.</p>



<p><strong>Osso buco</strong> – I used beef shank instead of lamb for this one. It turned out very well, tender and succulent. However, RB40Jr said it taste just like beef stew…</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="500" height="429" src="https://retireby40.org/wp-content/uploads/2021/04/Osso-Buco.jpg" alt="" class="wp-image-21732" /></figure></div>



<p><strong>Gaeng Hung Lay</strong> – A specialty from Northern Thailand. This is pork belly curry with ginger, peanuts, and onion. It was fantastic, but we can’t eat this too often. This much deliciousness can’t be good for our health.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="500" height="477" src="https://retireby40.org/wp-content/uploads/2021/04/Gaeng-Hung-Lay.jpg" alt="" class="wp-image-21733" /></figure></div>



<p><strong>Kanom Krok</strong> – I got this aluminum pan when I was in Thailand. Kanom krok is a coconut milk and rice flour dessert/snack. These were delicious. &nbsp;</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="500" height="438" src="https://retireby40.org/wp-content/uploads/2021/04/Kanom-Krok.jpg" alt="" class="wp-image-21735" /></figure></div>



<ul><li><strong>Bills</strong>: $23.</li><li><strong>Transportation</strong>: $19. This was for gasoline, insurance, public transportation, and maintenance.</li><li><strong>Entertainment</strong>: $74. We order out twice in March. &nbsp;</li><li><strong>Kid</strong>: $0.</li><li><strong>Pet</strong>: $0.</li><li><strong>Travel</strong>: $377. I reserved a beach house for June. I also reserved a campsite at Yellowstone in July. Summer is going to be great this year.</li><li><strong>Health</strong>: $124. I went to see my dentist and got some prescriptions refilled.</li></ul>



<h3><strong>Others</strong></h3>



<p>I don’t count these as personal spending.</p>



<ul><li><strong>Taxes and deductions</strong>: $2,380.</li></ul>



<h2><strong>2021 Savings ($25,400 YTD)</strong></h2>



<p>Alright! 2021 is starting off very well here.</p>



<ul><li><strong>Joe’s 401k</strong>: $8,000. I made some extra i401k contribution for 2020 to minimize taxes. &nbsp;</li><li><strong>Mrs. RB40’s 401k</strong>: $4,500. She contributes $750 every paycheck.</li><li><strong>Roth IRAs</strong>: $3,000</li><li><strong>529 College Savings</strong>: $0.</li><li><strong>Extra savings</strong>: $9,900</li></ul>



<p><strong>YTD 2021 saving rate = 63%</strong></p>



<h2><strong>March 2021 wrap up</strong></h2>



<p>March was a nice month for us. Our income streams were strong and we didn’t spend much. The weather incrementally improved over the month and it’s beautiful now. Life is good. I can’t complain.</p>



<p><strong>How was March for you? &nbsp;</strong>I hope you had a great month as well.</p>



<p><a href="https://retireby40.org/pcap/" target="_blank" rel="noreferrer noopener">*Sign up for a free account at Personal Capital</a>&nbsp;to help manage your net worth and investment accounts. I log in almost every day to check on our accounts. It’s a great site for DIY investors.</p>



<p>Disclosure: We may receive a referral fee if you purchase or signup for a service through the links on this page.</p>
<p>The post <a rel="nofollow" href="https://retireby40.org/march-2021-goals-financial-update/">March 2021 Goals &#038; Financial Update</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


March 2021 Goals &amp; Financial Update


<div class="wp-block-image"><figure class="alignright"><img src="https://lh3.googleusercontent.com/-NTTsRDh1FO8/V5mdR4YpakI/AAAAAAAAJuE/utETPTSuZcYmKx4vtYydfU8zsmwGWBmXwCCo/s350/DontWait350.jpg" alt="Don't wait until retirement to be happy" /></figure></div>



<p>A while back, Adam and Jane gave us an update on their early retirement situation. Both of them have been ready to quit their job for a long time and they are just hanging on to shore up their personal savings. They planned to work until they are 55 so their pensions will be fully vested. However, Jane got laid off at the end of the year (with a very nice severance package) and she will blaze their path to early retirement. Unfortunately, Adam still <a href="https://retireby40.org/three-years-work-adam/">has to work 3 more years</a> to receive his full pension. His job is becoming even more stressful because his team has shrunk so much. He is the only person left to support that software, 24&#215;7. Ouch, that sounds very painful.</p>



<p>In a stressful situation like that, I firmly believe you have to do something to lessen the pressure right away. It’s not healthy to hate your job because that’s how you spend at least 50% of your waking hours. I hated my corporate job before I quit and the bad vibe permeated all facets of life even when I wasn&#8217;t at the office. The stress impacted my physical and mental health, relationship, personal finance, and even sleep. You can probably endure the stressful situation for several years to meet a financial goal, but you need to have the finish line in sight. You can’t keep going for 10 or 20 years in a stressful job because it will destroy you. Adam and Jane have a lot of tenacity. They endured their jobs for a long time, but Adam still has 3 years left to go. I think 3 years is the limit for sticking it out in that kind of situation. Any longer and you&#8217;d go a bit crazy.</p>



<h3>My last year on the job</h3>



<p>It might surprise you to know that I <a href="https://retireby40.org/dream-job-future/">enjoyed my corporate job when I first started</a>. However, over the years, it became progressively more stressful and I liked it less and less. My last year was unbearable and I should have left instead of enduring that kind of mental anguish. Every day was a foggy haze. I should have started negotiating for a severance package and looked for a different job instead of sticking around. However, it was difficult to think clearly when you’re under constant pressure. Instead of leaving, I kept counting down the days and pushed through it.</p>



<p>When I quit my engineering career, life instantly became better. I was able to spend a lot more time with our son and work more on this blog. These days, my life is mostly stress-free. I can sleep through the night and I have a good relationship with my wife and kid. Sure, I don’t make as much money, but I don’t need to spend a lot of money to relieve the pressure either. I feel a lot healthier now because my physical and mental problems disappeared with the stressful job. That’s priceless.</p>



<p><strong>Don’t wait until retirement to be happy</strong></p>



<p>I call this blog Retire by 40, but it really should be Enjoy Life by 40. I <a href="https://retireby40.org/my-two-weeks-notice/">retired from my engineering career</a> 9 years ago, but I don’t plan to stop working anytime soon. I’m busy every day and I enjoy 99% of it. Being a stay-at-home dad takes up a lot of time. It keeps getting easier. RB40Jr spends more and more time away from home and he&#8217;s growing <a href="https://retireby40.org/being-a-stay-at-home-dad-is-easy/">more independent every year</a>. This year (2021), I even went to visit my parent in Thailand by myself for 6 weeks. In a few years, he&#8217;ll go off to college and I&#8217;ll have all the time to do whatever I want.</p>



<p>The point I’m trying to make is that you don’t have to wait until you’re 60 to enjoy life. Holding down a stressful job that you hate is no way to live. It’s better to find an alternative and enjoy life now. Who knows what will happen in 10 or even 5 years. I knew I’d have a major breakdown if I stuck around much longer at my old job. You might feel like you have to keep working in your job, but there are alternatives. Here are just some ideas if you really can’t take it anymore.</p>



<ul><li><strong>Find a better company to work for</strong>. The job market is getting better now and you might be able to find a better work environment. Some companies have terrible corporate cultures and you don’t want to be stuck there for years.</li><li><strong>Change your group</strong>. Sometimes, changing jobs within the same company can improve your professional life, too. I changed groups a few times at my old company and life improved with new faces and challenges. This is a good option if you have some “golden handcuffs.”</li><li><strong>Change your career</strong>. You can go back to school, interview for a different job, or even start a small business. You don’t have to stay in the same field your whole life. Most of us choose our careers when we were just teenagers. People change and your career might not be the right fit anymore.</li><li><strong>Cut back to halftime</strong>. This option is not available to everyone, but check with your HR department to see if it’s possible. This is the ideal option for Mrs. RB40, but it’s not available from her current employer. </li><li><strong>Side hustle</strong>. Use your spare time to figure out how to <a href="https://retireby40.org/make-money-blogging/">make money with your hobby</a>. I started blogging while I was working full-time. It gave me an outlet and actually made my full-time job more bearable. Everyone needs a little passion in their life.</li><li><strong>Become Financially Independent.</strong> This is a long-term project for most people, but it’s a lot more achievable than you think. Most people with high income have high expenses. If they can reduce it down to the basic living expense, I bet many of them can quit their job in just a few years. Especially if they have been saving for a long time.</li><li><strong>Stay healthy</strong>. Often, we let our health go when work becomes too stressful. I had many health issues due to stress, but I tried to stay healthy by exercising during lunch. I also meditated and practiced yoga to help calm my mind. These healthy habits can be very helpful when life is full of stress. I don’t think I could have gone through the last year of full-time work without exercise and yoga.</li></ul>



<p>I know it is difficult to make a change at work. However, if you have many years (more than 3) left, you can’t stay in a stressful environment. The stress will invade all facets of life and everyone around you will be unhappy. The money and/or work satisfaction isn’t worth putting your family through the wringer for years. You can’t wait for retirement to be happy. You need to find a way to make things work now. However, if you only have a few years left, it might be worth it to push through the difficult period like Adam plans to do. As for me, I am much <a href="https://retireby40.org/8-years-after-early-retirement/">happier and healthier after 8</a> years of early retirement. Money doesn’t mean that much to us after the basic necessities are taken care of. Health, family, and a stress-free environment are much more important for a happy life.</p>



<p><strong><em>Are you putting off happiness until retirement? I think that’s a mistake unless you only have a few years left. Be happy now because the future is uncertain.</em></strong></p>



<p>*updated April 2021</p>
<p>The post <a rel="nofollow" href="https://retireby40.org/wait-retirement-happy/">Don&#8217;t Wait Until Retirement to Be Happy</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


Don’t Wait Until Retirement to Be Happy


<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/03/How-to-Get-Over-Writers-Block-or-Any-BLock-350.jpg" alt="" class="wp-image-21649" /></figure></div>



<p>Hey everyone, I’m having a major <strong>major</strong> writer’s block. This can happen to any blogger, writer, or pretty much any creative. You feel out of sync and the work becomes much more difficult than usual. The flow just disappears. Poof!</p>



<p>My problem began when I went to visit my parents in <a href="https://retireby40.org/how-much-costs-retire-thailand/">Thailand</a> earlier this year. I had such a great time in Chiang Mai. My dad took care of almost everything and I had very few responsibilities. I just had to help my mom exercise every day and help her eat occasionally. My mom’s health was a concern, but she was better than I thought. Hence, I felt good. Also, Covid was under control there so I could try new restaurants and cafés every day. Ahhh, that’s the life.</p>



<p>It was such a stark difference from the US experience where we have been stuck inside since March 2020. I felt disconnected from every US problem since then. Even the <a href="https://en.wikipedia.org/wiki/2021_storming_of_the_United_States_Capitol" target="_blank" rel="noreferrer noopener">storming of the US capitol</a> didn’t really raise my eyebrows. It just felt so far away. Shrug… At the same time, personal finance issues in the US also faded into the background. It was hard to care when I was having a fantastic time in a different time zone (+15 hours). The stock market was going gangbusters anyway so I felt rich.</p>



<h2><strong>Back to the grind</strong></h2>



<p>Unfortunately, every party must end. I’ve been back for a month now and my list of blogging topics has dwindled down to a big fat <strong>ZERO</strong>, zip, nada, zilch! Heh heh, this is why you’re reading about getting over writer’s block rather than a personal finance topic. Fortunately, I know how to do it. I mean I’ve been <a href="https://retireby40.org/10-years-of-blogging-life-changes/">blogging about personal finance for over 10 years</a> and have written 1,400 posts on Retire by 40. (Coincidently, what a nice round number!) I’ve covered all 7 personal finance topics pretty thoroughly and ummm repeatedly. This isn’t new. I’ve had writer block before and I overcame them. Today, I’ll tell you how to get over a blockage and become productive again.</p>



<h2><strong>Get over writer’s block</strong></h2>



<p>The #1 thing to do when you’re stuck is to take action. To get over writer’s block, you have to <strong>start writing</strong>. That’s most of it. That’s the secret.</p>



<p>It was Sunday afternoon and I had less than 10 hours before this post is supposed to go live. Unfortunately, I procrastinated the whole weekend because RB40Jr’s best friends came over on Saturday. It was spring break and the kids wanted to play. It’s all good. They all need the exercise after a long rainy Portland winter. After lunch, I sat down and focused on writing. I knew from experience that once I start writing, the words will come. &nbsp;</p>



<p>At first, it was slow going, but the rhythm returned pretty quickly. Before I knew it, I had 500 words! Here is my process.</p>



<ol type="1"><li><strong>Put on a nice set of headphones</strong> and start my <a href="https://www.youtube.com/watch?v=BoXu6QmxpJE&amp;list=PLK_vcdBfY5bV-sgPrOqpk6T1PU2S58lvz" target="_blank" rel="noreferrer noopener">blogging music playlist</a> on shuffle.</li><li><strong>Pick a topic</strong>. This one was tough because I had nothing. I went with my gut and wrote this post about writer’s block. Otherwise, I’d spent precious hours browsing the internet for a &#8220;better&#8221; topic.</li><li><strong>Just start typing</strong>. This is a stream of consciousness kind of thing. I just type, mistakes and all. I fix some stuff as I go along, but I leave most problems to edit later.</li><li><strong>Edit several times.</strong> This is where I clean up mistakes, rephrase sentences, remove irrelevant stuff, and fill out details.</li><li><strong>Voila!</strong> A 1,000+ word blog post.</li></ol>



<p>This is the classic move &#8211; <strong>Fake it till you make it.</strong> When you’re stuck, you just have to take action and pretend you know what you’re doing. Eventually, it will come. The work might not be perfect, but you will have something to present. If you do it often enough, you’ll improve. The work might turn out to be quite good. This point is important.</p>



<h2><strong>Muscle memory</strong></h2>



<p>The main reason why I can get away with blogging like this <strong>occasionally</strong> is because I’ve been blogging for so long. I built muscle memory over the last 10+ years. Now, when I sit down and start writing, the words just flow. And the result isn’t too bad. Of course, it’s better when the topic is on point (personal finance) and I prepare more. However, I’m just stuck sometimes and I have to wing it. I’m a huge believer in sticking to a schedule. It served me very well so far. I post every Monday, come rain or shine. Even if the blog topic isn’t personal finance, it’s okay. Nobody is perfect all the time.</p>



<p>Anyway, this is muscle memory. Once you master something, you can do it once you get going. This is the same process with drawing, working out, biking, and almost everything. Sometimes, you don’t want to exercise, but you make yourself go to the gym. Once you’re there and start the routine, you feel better and finish the workout. You just need a little momentum and your brain/body will know what to do.</p>



<p>*Here is my tutorial on blogging &#8211; <a href="https://retireby40.org/how-to-start-a-blog-why-you-should/">How to start a blog and why you should</a>. </p>



<h2><strong>Rekindle interest</strong></h2>



<p>Whew, I almost made it through this blog post. I got away with it this time with my winging-it proficiency, but I need to do one more thing to really get over this writer’s block. I need to rekindle my interest in personal finance. Next week, I’ll follow more financial news, blogs, and podcasts. Hopefully, that will rekindle my <a href="https://retireby40.org/early-retirement-blogs-everyone/">FIRE mojo</a>. Ha, a pun! Seriously, I need to rebuild my topic list.</p>



<p><strong>Summary</strong></p>



<p>Alright, here is the summary on how to get over a writer’s block or any kind of block.</p>



<ol type="1"><li>Take action and just do it.</li><li>Keep doing it to build muscle memory.</li><li>Rekindle interest in the topic or you might need to find something else to do.</li><li>Optional &#8211; make a good music playlist that can play in the background.</li></ol>



<p>Keep doing this and you’ll get your mojo back.</p>



<p><strong>Have you ever had writer’s block or got stuck in a rut with your work? How did you get over it?</strong></p>



<p>Image credit &#8211; <a href="https://unsplash.com/@esdesignisms" target="_blank" rel="noreferrer noopener nofollow">Emma Simpson</a></p>
<p>The post <a rel="nofollow" href="https://retireby40.org/how-to-get-over-writers-block-or-any-creatives-block/">How to Get Over Writer’s Block or Any Block</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


How to Get Over Writer’s Block or Any Block


<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/03/Robinhood-350.jpg" alt="" class="wp-image-21622" /></figure></div>



<p><strong>Who loves free stuff?</strong> Me and everyone I know! You’re in luck today because here is your chance to get a free stock. Robinhood, an online brokerage, is giving away one stock when you sign up for a new account. Once you have an account, you can refer friends and you’ll receive another free stock when they sign up. I opened a new account in 2017 and I received a share of Zynga. That was just $3.38, but it’s still nice to get something for free. The stock is chosen randomly from Robinhood’s settled shares, so you could get Apple, Ford, Sprint, or something else altogether. (You need to have a Social Security Number to open an account with Robinhood. ) So what’s the downside? Let’s look into it more.</p>



<p>*Originally written in 2017. Updated in 2021. My Zynga stock went up to $10.11. Wow! It did quite well over the past few years. </p>



<p>Mrs. RB40 got a share of HP when she used my link. Nice! <strong><a href="https://retireby40.org/robinhood" target="_blank" rel="noopener noreferrer">You can get your free share of stock right here</a>. </strong></p>



<h2><strong>Who is Robinhood?</strong></h2>



<p>Robin Hood lived in Sherwood Forest and he was one of my favorite childhood folklore figures. In 2017, I got a book from the library and read it to RB40Jr, but he just wasn’t interested. Kids these days have a lot more entertainment options and I must admit Star Wars space ships are more exciting than Robin Hood running around a forest. OK, I digress. Robinhood is a brokerage that charges no commission when you trade US-listed stocks and ETFs. They came a long way since 2017 and they are quite well known now.&nbsp;</p>



<p>Back then, you can only use a smartphone to trade, but now you can also trade from a computer. The nice thing about Robinhood is that you can buy fractional shares. For example, you can buy $20 worth of Google stock. It&#8217;s nice for new investors who don&#8217;t have a lot of money yet. </p>



<p>Now, you can also invest in crypto. I just purchased $20 worth of Etherium, my first crypto investment! This is completely speculative, but why not. I already spent too much time on the sideline. There is one issue with Robinhood. You can only buy and sell in US dollars. Also, you can&#8217;t use it to buy anything or get the cryptocurrency out. For that, you need a crypto wallet account.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="650" height="243" src="https://retireby40.org/wp-content/uploads/2021/03/ETH-650.jpg" alt="" class="wp-image-21615" /></figure></div>



<h2><strong>Free trades?</strong></h2>



<p>Free stock trading is great, but I am very skeptical. Every company that offers free trading in the past went out of business after a while or changed their model. How can they offer free trading? Well, here is how they make money. Robinhood makes money by charging a monthly fee on their Robinhood Gold account and taking rebates from the trading venues. You can read more about it on their site here &#8211; <a href="https://robinhood.com/us/en/support/articles/how-robinhood-makes-money/">How Robinhood Makes Money</a>.</p>



<p>With Robinhood Gold you can invest up to 2x your buying power and gain access to after-hours trading. This is basically a margin account. You borrow money to invest. I don’t like margin trading because it is risky. You can read more about the <a href="https://robinhood.com/us/en/support/articles/gold-overview/">Robinhood Gold account here</a>. Personally, I’ll stick with the regular account and trade for free.</p>



<p>Also, they don’t pay interest on your cash balance. That’s another way they generate income.</p>



<h2><strong>Robinhood is best for&#8230;</strong></h2>



<p>Robinhood is a great fit for new investors, especially if they’re young and don’t have a lot of money to invest. With Robinhood, you can buy a few shares of stocks and don’t have to worry about the transaction fees. You don’t need $5,000 to start investing. Anyone can start with $20. Investing can be intimidating so I think it&#8217;s great that anyone can start with so little money. The <a href="https://retireby40.org/why-start-investing-young/">earlier you start investing</a>, the better off you’ll be. You&#8217;ll make some mistakes and learn along the way.</p>



<p>Also, young investors are very comfortable with their smartphone. It&#8217;s safe to trade stocks and conduct banking transactions on your phone these days. Life is so much more convenient than when I learned how to invest. In those days, I had to call a broker to buy shares. Technology is fantastic.</p>



<h2><strong>New account bonus</strong></h2>



<div class="wp-block-image"><figure class="alignright"><a href="https://retireby40.org/robinhood"><img src="https://lh3.googleusercontent.com/LLUZoESEioqSyEtzXeyc-DlFRY12LqkalJQrNm3s8v8RfnDKFTH67DKSjGYYOi5KMYx8IS5y29dldq2JWpr5VXIKXXvLTr5EcpKG-t44sld7byANpD_Nj4PEWsyp_xzIHzM5xSYG7cmfZZfaevzBb3VGN7Y5kuAyxBzpgr3-qW1bxDlsS89mPAJztYLt01Zct7ipuMtOrhOGJV_VnrYNVjkQvKukhH0ytzF9tC-zcG6ICjFuFBffbaqIu93m7uAWfX7XzSn6C4beNBOJSEJYKJVHwR1aoANZADxOz4jS_1oXnxU35x839YSRfXvhVtLfswraJcMykB3zUHiwV9D1kF6QxqHsKSKFmKLbMpO9FKZU8CqEgTAQK-waNfJx10xKnLn-TzCLFYyqaqRCcNHxQBG3fw0IQL-pfq67wBSeiXR5Qcph5hQ9CUxVgCYFZEDHha-1qxMq6NbHTU_IxolngKbImSAwP4_o584CBVpa1m_C_CLQcgak480Qp9w2aT8igjsfZukfruYObaeAwcsIM9uvQ18Bk_wA5WljOtrEeP632YTJkwAMoxyl7xqf4m_lhVDv5_L658TemvoD1QHVlctxPmQ9AP8ma_0bqJy4pUK27k0ZS4Ft=w324-h339-no" alt="Get Free Stock" /></a></figure></div>



<p>Here is what you have to do to get a free share.</p>



<ul><li><strong><a href="https://retireby40.org/robinhood">Sign up for a new account at Robinhood</a></strong></li><li>Verify your email address</li><li>Install the Robinhood app on your phone</li><li>Claim your free share. You can do this in the Robinhood app.</li><li>Link your bank account to fund your account</li><li>Share your referral link with friends to get more shares!</li></ul>



<p>I signed up and received my free share in less than 10 minutes so you shouldn’t have any problem with it. The share will take a couple of days to settle so you need to wait a bit before you sell. Also, you need to keep the cash in your account for 30 days.</p>



<h2><strong>My account</strong></h2>



<p>I’m not moving my dividend account at Vanguard to Robinhood. I can trade free there as well. Over the last few years, many brokerages transitioned to a no-fee trading policy. Robinhood is one of the drivers for this transition. I love it. This is a huge improvement from those phone trading days. I think we used to pay over $100 per trade. The price to learn about investing was much higher in the 90s.  </p>



<h2><strong>Get your free stock</strong></h2>



<p>What are you waiting for? <a href="https://retireby40.org/robinhood" target="_blank" rel="noopener noreferrer"><strong>Sign up with Robinhood</strong></a> and get your free stock today! I’ll receive a free stock too when you sign up. Heh heh, that’s why it’s great to have a blog. I have an online platform where I can spread this kind of news and we both benefit. Here is my tutorial on <a href="https://retireby40.org/how-to-start-a-blog-why-you-should/">how to start a blog and why you should</a>. Everyone should have a blog to help track their personal goals. It’s been extremely useful for me and blogging might change your life too.</p>



<p>I’m sure you’re curious what kind of stock you can get so I’ll share my Robinhood portfolio below. These are all the stocks I received from referring new users. </p>



<ul><li>SIRI</li><li>F</li><li>ZNGA</li><li>SPWR</li><li>GE</li><li>CLF</li><li>TMUS</li><li>ADT</li><li>GLUU</li><li>HL</li><li>ASXC</li></ul>



<p>Portfolio value: $696</p>



<p><strong>Do you have a Robinhood account? If not, you should sign up to get a free share? Let us know what you got.</strong></p>



<p><a href="https://retireby40.org/robinhood" target="_blank" rel="noopener noreferrer"><strong>Sign up with Robinhood</strong></a></p>



<a href="https://robinhood.c3me6x.net/c/2088058/840763/10402" target="_top" id="840763" rel="noopener noreferrer"><img src="//a.impactradius-go.com/display-ad/10402-840763" border="0" alt="" width="4471" height="894" /></a><img height="0" width="0" src="https://imp.pxf.io/i/2088058/840763/10402" border="0" />



<p></p>
<p>The post <a rel="nofollow" href="https://retireby40.org/get-free-stock-robinhood/">Get Your Free Stock From Robinhood</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


Get Your Free Stock From Robinhood


<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/03/An-Obscure-Downside-of-Frugality_-Hobbies-350.jpg" alt="" class="wp-image-21555" /></figure></div>



<p>Frugality is great. We achieved financial independence through being frugal and <a href="https://retireby40.org/the-secret-of-saving-50/">saving a large percentage of our income</a>. Now, I never have to work for anyone else ever again. That’s the best thing about frugality. It can help you gain control of your time and autonomy. There are obvious downsides too. Frugal people don’t spend much on luxuries. We don’t have a luxury car, a big fancy house, or blings to impress our friends. Fortunately, that isn’t a huge problem because we don’t care about those things. A huge part of FIRE is prioritizing your spending. You <a href="https://retireby40.org/fire-misconceptions-1-extreme-frugality/">don’t have to be extremely frugal</a> to retire early. If something is important to us, we don’t mind splurging on it. Unfortunately, there are obscure downsides to frugality as well. Today, I’ll talk about one less obvious downside of frugality – hobbies.</p>



<h2>Hobbies</h2>



<p>When I was young and not very frugal, I had quite a few hobbies. Let’s flash back a bit and see what some of them are.</p>



<ul><li><strong>Snowboarding.</strong> I used to hit the slope with a group of friends all the time when I was young. It was a ton of fun to carve my way down the mountain. However, this hobby can get expensive very quickly. These days a lift ticket can cost over $100 and equipment rental around $50. The expense shoots up once you add gas, chains, a good waterproof pants, a stylish jacket, gloves, goggles, helmet, and a cool backpack. Whew! That&#8217;s a lot of $$$. Also, I can’t handle the cold as well now that I’m a bit older. I dropped this hobby a long time ago.</li><li><strong>Ukulele</strong>. I used to play and collect the ukulele. At one point, I had 12 of them! Now, I’m down to just 3. That&#8217;s barely a collection, as any amateur musician knows. Your instrument collection has a way of growing. Luckily, the ukulele is a relatively affordable instrument. A nice guitar can cost a lot more than a nice ukulele.</li><li><strong>Whitewater Rafting</strong>. This one is a lot of fun, but you need a group of friends to go with. Once we all had kids, it became a lot more difficult to go whitewater rafting. Now that our son is older, I should take him to experience it. We went kayaking a couple of times and he liked it.</li></ul>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="500" height="364" src="https://retireby40.org/wp-content/uploads/2021/03/kayak-2-500.jpg" alt="" class="wp-image-21552" /></figure></div>



<ul><li><strong>Video games.</strong> I used to play a lot of video games in my 20s. This hobby can get pretty expensive if you don’t watch it. The bigger problem is that it takes up so much time that can be used productively. Once I <a href="https://retireby40.org/how-to-start-a-blog-why-you-should/">started blogging</a> and had a kid, I no longer had time for video games.   </li><li><strong>Travel</strong>. We still love to travel so this is still on my list. Usually, we take an international trip once per year and several short road trips within the US. Unfortunately, my parents are older and I need to check on them more often now. So we usually go to Thailand and take a side trip somewhere in Asia.</li></ul>



<h2>Being frugal</h2>



<p>Now that I’m more frugal, I hesitate to take up any hobby that can cost a lot of money. Snowsport is fun, but I don’t even want to take RB40Jr to try it. He can learn to snowboard on his own later. Collecting anything is out. That hobby costs a ton of money and takes up too much space. We live in a small home and don’t have room for any kind of collection. These days my hobby is basically being frugal.</p>



<ul><li><strong>Cooking</strong>. I guess this is a hobby. We have to eat so I might as well <a href="https://retireby40.org/category/recipe/">cook at home</a>. It’s healthier and much more affordable than going out to restaurants.</li><li><strong>DIY</strong> home improvement/repair. Is this a hobby? If I wasn’t frugal, I’d just hire people to work on all these home improvement projects. This summer, I plan to refinish the deck, put a covered pergola over it, sand and paint our bathroom, plant a new tree, and tuckpoint part of our brick foundation. These projects will keep me busy the whole summer. (I might hire someone to repair the mortar. That seems like a lot of work.)</li><li><strong>Hiking and other light physical activities. </strong>Exercise is important so I try to add some physical activities into our days. For example, RB40Jr and I <a href="https://retireby40.org/millionaire-charges-lime-scooters-for-beer-money/">collect LIME scooters</a> around the neighborhood to charge. We get some exercise and I can teach him about investing the income. Now that the weather is getting nicer, we’ll do more hiking on the weekend as well.</li><li><strong>Gardening.</strong> Mrs. RB40 is trying to garden more. This is a pretty good hobby. She gets some exercise and we can enjoy the fruit of her labor. Well, that’s the theory anyway. It seems we are not very good gardeners. Our garden didn’t produce much last year, unlike many other gardens on Instagram and Facebook.</li><li><strong>Reading</strong>. We read a lot of books from the library.</li></ul>



<p>The point is my hobbies aren’t very exciting these days. That&#8217;s the obscure downside to frugality. If you&#8217;re frugal, your hobbies probably aren&#8217;t very exciting. Getting older is probably a factor as well. We don&#8217;t need as much excitement as when we were young. Our lives are more even-keeled. One hobby we kept is travel. We enjoy seeing new places and experiencing different cultures. We don&#8217;t mind splurging on that. </p>



<p><strong>What about you? Are your hobbies expensive or frugal?</strong></p>



<p>Image credit: <a href="https://unsplash.com/@visitalmaty" target="_blank" rel="noreferrer noopener nofollow">Visit Almaty</a></p>
<p>The post <a rel="nofollow" href="https://retireby40.org/an-obscure-downside-of-frugality-hobbies/">An Obscure Downside of Frugality: Hobbies</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


An Obscure Downside of Frugality: Hobbies


<div class="wp-block-image"><figure class="alignright"><img src="https://lh3.googleusercontent.com/yNZPfSv1fF0yyUT1qkcRRYXtfkItBcOmjF_J1ZxxpnHna-G4Becz5GN-N71iP0JywDRInzq3EFLVox4fojDrq58dXT9xMlBNhJXLHfKjeNcHPRhkZkoE6X-3PFHv8dURJ-TdAVPax-CnvsbxGdKK4UtFM2ZgKWR_vbW6MXGVOppJLycMBGZ7F-U3RebJJqW2g7fITl0qSD-gx6dZcxWAVyHE6Ls9eJCDdNk68XScYEyFn2vbpH7ksTaElK_XWZeKhCtFsIEn5OzsK5JNcOJBFxQv5YyJIAt1jwE3fM_nEjnvVWfH681aCGweD6JtZ5gm88hWp2ZfXo_1eGv4_R-JKBVWihKJOqC6GRYGS64wbMbaGfCpcscFN8KwUEL25WJDKH9df_85nHNCOMQKzwIEKxPM-O_KCs6BgMngZzWh-Jc5xLEDv7DARsr_wJ6SXB3emCFP5bIgZdB95LkAdRTizTLxhYMh58hEvGapGkY63s71fUtr7k9Ki55DdmTE9Bl2PqnKKDsQzpBBGyIrmHgqp7uIkg9AN0FTNYzzjmphVEIDcfRCJlJVp0VPU8s286eL8Vk_CHzyucSV9KnlvScalxZnelz7rckdVvQFAFWb=w350-h525-no" alt="Are You Obsessed with Early Retirement?" /></figure></div>



<p>A little obsession is good because it drives us to accomplish something. I was obsessed with getting <a href="https://retireby40.org/gave-up-engineering-career/">my engineering degree</a> when I was in college because my parents worked hard to send me there. Many kids were there to have fun, but I just wanted to get through it. Fun was a distant secondary objective. Mrs. RB40 was an obsession &#8211; she went off to Peace Corps for 3 years after college and I was obsessed with <a href="https://retireby40.org/valentines-day-special-a-rom-com-story/">winning her back</a>. (BTW, it worked out despite what everyone said. We&#8217;re still married after 21 years.) Blogging and early retirement were a big obsession for a while, too. I routinely stayed up until 1 am when I was working full time so I could publish a blog post regularly. It was difficult, but I pushed through it.</p>



<p>There were many more trivial obsessions like video games and my ukulele collection. I think a little obsession is fine as long as it doesn’t take over your life completely. This applies to early retirement, too. There are times when it is good to be obsessed with early retirement. However, you have to be smart about it over the long haul.</p>



<h2><strong>Obsessing with Early Retirement</strong></h2>



<p>Early retirement is a marathon, not a sprint. Even if you <a href="https://retireby40.org/the-secret-of-saving-50/">save 50% of your income</a>, it’d probably take 16 years to retire early. It’s just not good to be obsessive about something for that long. Being overly obsessive about early retirement can be a detriment to your health, relationships, and social life. You have to pace yourself when you’re chasing FIRE. It is impossible to sprint the whole way. You’ll burn yourself out if you try. However, there are two crucial spots where it pays to be obsessive.</p>



<h2><strong>When you first learn about early retirement aka FIRE</strong></h2>



<p>There are many reactions when people learn about early retirement.</p>



<ol><li>Indifference – It’s not for me.</li><li>Disbelief – This is a scam.</li><li>Obsessive convert – Wow, maybe I can do this.</li><li>Shocked &#8211; Does this <a href="https://retireby40.org/3-ways-define-financial-independence/">4% rule thing</a> really work?</li><li>etc&#8230;</li></ol>



<p>This is the right time to get obsessive. Most people drift through life without a financial purpose. They make money and spend it just as fast. We’ve been taught that everyone should work until they’re 65. Then they retire to a life of ease. That’s the regular view of work in most developed countries.</p>



<p>We were moderately frugal before I learned about early retirement around 2008. We made good income and we didn’t spend frivolously. However, there was still a lot of wastage. We had cable TV, two cars, a house in the suburbs that was way too big for us, ate out whenever we wanted, took exotic international vacations, purchased stuff without thinking too much about it, and went out often. We lived within our means, but it was a pretty typical lifestyle.</p>



<p>In 2008, we already <a href="https://retireby40.org/what-if-always-maxed-401k/">maxed out our 401k contributions</a> and Roth IRA. That was much more than most people ever did so I thought it was enough. I could have kept working at Intel and then retire 20 years later. It’d still be <strong>early retirement</strong> because I’d be 55 in 2028. We could stay on the company health insurance plan and perhaps have a little pension income. Anyway, we thought we were doing well financially and then I learned about early retirement.</p>



<h2><strong>The Discovery Phase</strong></h2>



<p>I got excited after I <a href="https://retireby40.org/learn-about-financial-independence/">discovered early retirement</a> because it was clear to me that FIRE was within reach. We’ve been saving and investing for over 10 years so our foundation was solid. I could retire way sooner than 55 if we streamlined our expenses. I got obsessive and reduced our spending as much as I could. This boosted our saving rates and shortened my FIRE timeline even more. I didn’t have to wait for the company to okay my retirement. I could do it on my own. It was a good thing too because my job satisfaction plunged as the Great Recession dragged on.</p>



<p>Mrs. RB40 got on board with reducing expenses because she already was frugal. She never liked spending money so it was a relatively easy transition for her. We still lived a comfortable lifestyle. We just removed the stuff that wasn’t that important to us. International trips were still a priority for us because we enjoyed traveling. However, we reduced expenses in all other areas. We ate out less, shared one car, and moved to a smaller home. There were plenty of free and cheap entertainment options in Portland so we still enjoyed a good life.</p>



<h2><strong>The Autopilot Phase</strong></h2>



<p>Once we streamlined our expenses, I got less obsessed with early retirement. There wasn’t much more I could do to reduce expenses after the initial frenzy. I looked for opportunities to create more income, but that was a long process. We got raises at work, invested in dividend stocks, purchased rental properties, and I started blogging. All these <a href="https://retireby40.org/passive-income/">passive income streams</a> took time to build.</p>



<p>Once you get through the initial discovery phase, then you need to dial down your obsession a bit and put it on autopilot. The early retirement journey is a long slog. You have got to be able to enjoy life in the meanwhile. The most important things are to stay healthy and maintain a good relationship with your partner.</p>



<p><strong>Health</strong> &#8211; You can’t compromise on health because you won’t be able to enjoy your money if you’re not healthy. It probably will cost more money in the long run if you put wealth before health. Luckily, being frugal is mostly good for your health. For example, we cook at home very often which is much healthier than eating out. </p>



<p><strong>Relationship</strong> &#8211; The other big concern is maintaining a good relationship with your spouse. Building wealth is much easier if a couple works as a team. Luckily, Mrs. RB40 was already frugal so it wasn’t a big change for her. Also, we didn’t cut out everything that costs money. We still go out occasionally and see a show once in a while. It’s all about finding a good balance.</p>



<p>This autopilot phase can last for years. You have to enjoy life while you’re in this phase. Don’t drive your partner away by cutting back too much at once. If your partner isn’t naturally frugal, then you might need to take it slow and keep chipping away. Also, it’s not healthy to stay in a job you hate for too long. This is a long stretch so you need to do something you can tolerate. It&#8217;s a good idea to find a better job instead of working somewhere you don’t like. You&#8217;ve got to save some energy for the final stretch.</p>



<h2><strong>The End Game</strong></h2>



<p>The end game phase is equivalent to the last mile of a marathon. The finish line is close, but you’re not there yet. At this point, you have to put your head down and push through the pain. That’s how I felt during <a href="https://retireby40.org/my-two-weeks-notice/">my last year on the job</a>. By then, I hated going to work. The stressful job caused a lot of mental and physical anguish that last year. I was miserable, but I didn’t want to make any changes. I guess I could have looked for a better job, but I was so close to the finish line. My mantra was &#8220;<strong>stay the course</strong>&#8221; at that point. I became obsessed with early retirement and went over my spreadsheet every day. Life was not fun, but thankfully, it was only a short time. It worked for me so I think it’s okay to be obsessed during this final stretch.</p>



<h2><strong>Early Retirement Obsession Chart</strong></h2>



<p>Check out this chart I made.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img width="650" height="650" src="https://retireby40.org/wp-content/uploads/2021/03/FIREobsession650.jpg" alt="" class="wp-image-21514" /></figure></div>



<p>This is what I think your obsession with early retirement should look like.</p>



<ul><li>When you don’t know about early retirement, you don’t care about it. </li><li>In the discovery phase, your obsession spikes. This is when you put your financial house in order and set up a plan to retire early.  </li><li>Once you’ve got your finances on autopilot, you should dial it back. After all, this phase can take many years. </li><li>Near the finish line, it’s okay to be obsessed again because you want to get it over with. Whatever you’ve done so far is working so keep it up over this final stretch. Put your head down and push through those obstacles if you need to. I wish you better luck than I had, though. It’d be nice to cruise through the finish line instead of struggling to the end. </li><li>After early retirement, you can relax a little and enjoy life more.</li></ul>



<h2><strong>Pace Yourself</strong></h2>



<p>Whew, this post ran a little long. My point is it could take years to achieve financial independence and retire early. It’s good to be obsessive in your first and final phases of the journey. But you probably shouldn&#8217;t be too obsessive during the long middle phase. Your health and relationship with your partner need to come first. <a href="https://retireby40.org/fire-better-sex/">FIRE is a great goal to have</a>, but don&#8217;t let it take over your life completely.</p>



<p><strong>Where are you in your early retirement journey? Are you obsessed with it? </strong></p>



<p>Image by <a href="https://unsplash.com/@willvanw" target="_blank" rel="noopener noreferrer">William van Wingerden</a></p>
<p>The post <a rel="nofollow" href="https://retireby40.org/obsessed-early-retirement/">It’s Good to Be a Little Obsessed with Early Retirement</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>


It’s Good to Be a Little Obsessed with Early Retirement


<div class="wp-block-image"><figure class="alignright size-large"><img width="350" height="525" src="https://retireby40.org/wp-content/uploads/2021/03/The-Secret-to-Saving-50-350.jpg" alt="" class="wp-image-21507" /></figure></div>



<p>To <a href="https://retireby40.org/declare-financial-independence-day/">achieve financial independence</a>, we need to save and invest. The more you save, the quicker you’ll get there. Unfortunately, the personal saving rate in the United States is quite low. Normally, it is under 10%. At that rate, it will take nearly 50 years to become financially independent. That&#8217;s why most normal workers won&#8217;t be able to retire early. If you want to join the FIRE (financial independence retire early) movement, you need to increase your saving rate drastically. A mere 10% won’t cut it.</p>



<p>Personally, I encourage everyone to shoot for 50% saving rate. This is a good compromise between the length of time (how long you need to work) and how much you can realistically save. <a href="https://retireby40.org/save-50-retire-early/">At 50% saving rate</a>, it will take 16 years to reach financial independence. That’s a long time, but not really that long compared to a normal working life (40+ years). Reaching financial independence could be shortened further by working part-time, a pension, outsized investment gains, and many other factors. The point is to shoot for 50% and you should be able to retire early in a very reasonable timeframe. Even if you don’t reach 50% saving rate, you’ll be better off than almost every household in the US.</p>



<h2><strong>Saving 50% is possible</strong></h2>



<p>We all know it’s good to increase our saving rate. However, saving 50% looks very daunting when you’re used to saving around 10%. You’ll have to save 5 times more! Who can afford to save that much? Today, I’ll show you how to get there. It will take time, but saving 50% is possible. &nbsp;</p>



<h3><strong>1. Cut back a bit</strong></h3>



<p>The first step is to <a href="https://retireby40.org/why-i-love-tracking-our-expenses/">track your spending</a>. This is a very difficult step for most people. In my younger days, I never tracked my monthly expenses. It was a good month whenever I spent less than I made. This is perfectly fine if you want to live a regular lifestyle and plan to retire at a normal age. However, you need to be more diligent if you want to achieve financial independence while you’re young. When you don&#8217;t pay attention to where your money goes, you tend to spend more.</p>



<p>I suggest tracking all your expenses on a spreadsheet for a few months. It really isn’t that hard since most of us charge everything on credit cards. You can just look at the monthly statement and transcribe the charges. This will show you where the money goes. Once you become aware of exactly where you spend, you can prioritize what matters to you and cut back on the things that don’t make a big difference in your life. You can strategize and figure out how to reduce your monthly expenses while <a href="https://retireby40.org/the-secret-to-happiness/">minimizing the impact on your happiness</a>. &nbsp;</p>



<p>This is just a start, though. You can become frugal and boost your saving rate quickly, but there is only so much you can cut. We <a href="https://retireby40.org/fire-misconceptions-1-extreme-frugality/">don’t want to be extremely frugal</a> because most people can’t last long in that state. You want to find a comfortable lifestyle that you can hold the line at for many years.</p>



<h3><strong>2. Minimize lifestyle inflation</strong></h3>



<p>The second step is very simple. Once you’re in a comfortable spot, stay there and avoid lifestyle inflation as much as possible. This concept is simple, but it is very difficult to execute over the long haul. Most households have a low saving rate because they spend more as their income grows. Everyone wants to reward themselves for working hard and making more money. That usually means spending money on nicer stuff. However, freedom is a better reward. If you can minimize lifestyle inflation, you’ll be able to save more and reach financial freedom much faster than any regular person.</p>



<h3><strong>3. Increase your income</strong></h3>



<p>Here is the really hard part. The first 2 steps only hold the line. You might be able to boost your saving rate to around 20% by becoming more frugal. However, you need to make more money to really increase your saving rate.</p>



<p>Let’s look at an example.</p>



<blockquote class="wp-block-quote"><p>*Saving rate = saving / income</p></blockquote>



<h4><strong>$12,000/$60,000 = 20%</strong></h4>



<p>Lena makes $60,000 per year. After cutting back a bit, she can save $12,000. Her saving rate is 20%.</p>



<h4><strong>$32,000 / $80,000 = 40%</strong></h4>



<p>After a few years, Lena makes $20,000 more per year because she worked hard and got a few good raises. Luckily, she read this post and minimized lifestyle inflation over the same period. She channels all of her raises toward saving and investing. As a result of her dedication, her saving rate increases to 40%. It’s getting close to 50%.</p>



<h2><strong>Investment generate passive income</strong></h2>



<p>Let’s see how we can push her saving rate closer to the 50% mark. First of all, Lena invested all her savings over these few years. We’ll assume 7% gains for the sake of simplicity.</p>



<figure class="wp-block-table"><table><tbody><tr><td>&nbsp;</td><td><strong>Accumulated savings</strong></td><td><strong>+ 7% Gains</strong></td></tr><tr><td><strong>Year 1</strong></td><td>$12,000</td><td>$12,840</td></tr><tr><td><strong>Year 2</strong></td><td>$20,000 + $12,840</td><td>$35,139</td></tr><tr><td><strong>Year 3</strong></td><td>$28,000 + $35,139</td><td>$67,559</td></tr><tr><td><strong>Year 4</strong></td><td>$32,000 + $67,559</td><td>$106,528</td></tr></tbody></table></figure>



<p>After 4 years, her investment portfolio grew to $106,528. This portfolio generates passive income for Lena. We’ll assume she invested in a good low-cost index fund and her yield is around 2%. This is part of her income. We can add this to the equation too.</p>



<p><strong><a href="https://retireby40.org/passive-income/">Passive income</a> </strong>= about $2,000</p>



<p><strong>Lena’s saving rate</strong> = $34,000 / $82,000 = <strong>42%</strong></p>



<p>This passive income doesn’t make a big difference at the beginning. Here, it just raises Lena’s saving rate by 1.5%. However, it will become a bigger factor once her portfolio is more substantial. Lena can also invest in a rental property or <a href="https://retireby40.org/our-real-estate-crowdfunding-investment-performance/">real estate crowdfunding</a> to generate more passive income. However, let’s stick with the stock market for this post. It’s simpler for most people. Anyway, her passive income should be much bigger after 10 years or so. It will help boost her saving rate tremendously.</p>



<h2><strong>Side hustle</strong></h2>



<p>One last way to boost Lena’s saving rate is to hustle more. She can pick up a gig or two to generate some extra income. These days, nearly half of Americans have side hustles. Lena can become an Uber driver, deliver food, or take care of pets while their owners are on vacation. The amount of income varies greatly depending on the gig, but I think Lena can easily make $6,000/year on the side.</p>



<p>*If Lena is young, I highly recommend investing in herself instead of spending time on side hustles. She can get additional education, earn a certificate, or learn new skills. If her main career is good, then focus on getting promotions and moving up the ladder. Getting a raise/promotion in your main career is better than making money in the gig economy. On the other hand, if she doesn’t like her main career, she should try to focus on building her brand. She can <a href="https://retireby40.org/how-to-start-a-blog-why-you-should/">start a blog</a>, write a book, or start a YouTube channel. These brand building side hustles can become a new semi-passive income way to generate income. Young people should focus on entrepreneurial side hustle instead of working as a gig drone.</p>



<h2><strong>Everything adds up</strong></h2>



<p>So Lena did all these. Let’s calculate her saving rate.</p>



<p><strong>Saving</strong> = saving from job + passive income + side hustle = $32,000 + $2,000 + $6,000</p>



<p><strong>Income</strong> = active income + passive income + side hustle = $80,000 + $2,000 + $6,000</p>



<p><strong>Lena’s saving rate</strong> = $40,000 / $88,000 = 46%</p>



<p>Well, we couldn’t get all the way to 50%, but you get the point. If Lena keeps this up, she’ll get to 50% saving rate after several more years. Her portfolio will grow every year and generate more passive income along the way. If her side hustle goes well, it’ll bring in more income as well. In the first few years, the saving from her main job will dominate the number. However, the passive income and side hustle income will keep growing. Eventually, she won’t need the income from her job anymore and she’ll have <a href="https://retireby40.org/my-two-weeks-notice/">a choice to retire early</a> or keep working. That’s what FIRE is all about. It gives you more choices.</p>



<p>Last year, <a href="https://retireby40.org/2020-goals-financial-wrap-up/">we saved 58% of our income</a>. It took us many years to get to this point, though.</p>



<p>In conclusion, it will take time, but saving 50% isn’t impossible. Keep investing and your passive income will grow to help carry the load. The right side hustle can help a lot as well. The key to this whole thing is to minimize lifestyle inflation. Most people spend all they make. You won’t achieve financial independence if you spend like that.</p>



<p>Image credit: <a href="https://unsplash.com/@micheile" target="_blank" rel="noreferrer noopener nofollow">Micheile Henderson</a></p>
<p>The post <a rel="nofollow" href="https://retireby40.org/the-secret-of-saving-50/">The Secret to Saving 50%</a> appeared first on <a rel="nofollow" href="https://retireby40.org">Retire by 40</a>.</p>
