Sunday, October 14, 2012

Lucky Thirteen

Earlier this week I passed my thirteen-year anniversary* of working for my current employer.  Although this is not the only job I have ever held, this is the only one that I would call a "career" job -- the earlier ones were ways to make a little income during and immediately after my high school and college years.  I seem to be something of an anomaly as nearly everyone I know from my own generation has changed employers at least once, either purposefully or due to factors beyond their control.

My current tenure was almost cut short a number of years ago when the department I worked for was abruptly transferred to another state.  Not wanting to relocate, I hastily found a job with a different group, only to be completely dissatisfied and frustrated with the culture in the new organization.  I gave my notice and sent out a farewell email to current and former peers, only to have one of them quickly recruit me to work with him in a new role in the same company -- the one in which I still find myself employed today.

I work for a large company on sound financial footing.  This has its advantages and disadvantages.  On the plus side, the compensation and benefits are fair and generous.  I am not micromanaged, which allows me to work a somewhat flexible schedule, often from home.  Of course, like many large organizations, there are frustrating layers of bureaucracy and inane policies that leave the employees feeling more like interchangeable parts rather than human beings.  Overall, I would say the positives largely outweigh the negatives, which is why I've been satisfied to remain with the company as long as I have.

Having said that, I have no desire to spend another 13 years working for this company, or for any other.  I am hopeful that before my 25-year employment anniversary, my wife and I will have built up our own finances so that we are no longer dependent on full-time salaries and benefits from our employers.  Of course, this blog is here to track our progress toward this goal.

One of my favorite personal finance books, Your Money or Your Life (by Robin and Dominguez), advises readers to add up all of the money they've ever earned, and then compare it to their current position in life.  By doing this the reader is given the opportunity to reflect on whether they have made the most of their money in the past, and decide whether changes are needed going forward.

Looking back over my own working career, I have to say that I've done a decent job.  On the eve of my first working day at my current employer, I had about $10,000 to my name, half of it in cash and half in a used car.  I also had a college degree and no debt of any kind -- no car loan, no student loans, no credit card debt.  I have my parents to thank for all of this, because they were wise enough to manage their own finances so that I could start my independent life with an education and without having to dig out of debt.  I'm extremely grateful to them for this opportunity.

Thirteen years ago, I was renting a small condo that I shared with my girlfriend at the time.  I was not at all passionate about starting a career, but I needed an income and wanted to stop working the odd jobs that I had been doing to make ends meet up to that point.  Using an online job posting website, I managed to get an interview with my current employer, not knowing much at all about the company.  Fortunately, this was the late 1990s, when the economy was booming, and employers were scrambling to hire anyone and everyone they could.  I was hired based on a single interview.  I started in an entry-level position and worked a lot for the first several years, since overtime was plentiful and I was fearful that by working "only" 40 hours per week I would look like I was not willing to do my fair share.  This was not my preference.  Even then, with meager assets, I was frugal, and had no real ambition to earn money for the sake of more consumption.  My time off was at least as valuable to me as my paid time, even at time-and-a-half rates.  After my 40 hours were up, I wanted to be out hiking the beautiful mountains of New Hampshire, or playing games on my computer, or hanging out with friends.  Somehow I managed to stay in good graces with my managers, working just enough overtime hours to not raise any red flags, but few enough that I was able to keep my own sanity.

Over the first few the years I earned raises and promotions (with salary increases), and eventually saved enough for a down payment on a condo.  Early on, I remember daydreaming about how nice it would be to get rid of the mortgage so I could be free of those monthly payments.  Still, I lived relatively frugally, not choosing to go into extra debt to make major home renovations.  I also avoided a "cash out" refinance like a lot of people were doing at the time, as real estate values rapidly increased in the early 2000s.  I made small extra mortgage payments when I could, and saved steadily in tax-advantaged retirement accounts, maximizing my 401k and Roth IRA contributions every year.

Fortune smiled on me when I met my wife.  Although I knew right away that we clicked on so many levels, it wasn't until at least a year into our marriage that I pleasantly realized we had similar financial goals as well.  She was the one who convinced me that a mortgage-free lifestyle didn't have to be a distant dream.  This was triggered by a minor personal crisis that brought us even closer together.  After we had weathered the storm, we started talking in earnest about what we wanted from life.  We decided to work aggressively toward financial independence so that we could enjoy all of the things we love so much together, while we were both still young enough to fully appreciate them, without having to spend all of our time working.  This led us to embark on a journey to pay off our mortgage first, as quickly as possible:  partly as an insurance policy against sudden loss of income and partly as a way to kickstart our savings.  We knew that once the mortgage was gone, we could funnel all of our extra cash toward an escape fund.

So now, thirteen years later, I find myself (along with my wife) belonging to the exclusive** club of homeowners without a mortgage.  We're clearly in the very high end of savers for retirement and net worth, especially for our age group***.  We are growing our savings and investing for early-retirement income.  And while I must give my wife substantial credit for her contributions since we got married, I certainly would not be where I am today without the influence of my employer over the past thirteen years.  Having a steady stream of income and benefits provided me with a solid financial foundation.  However, while I appreciate the opportunities that come along with steady employment, I hope to continue to build on our current financial foundation.  In the not-too-distant future I want to replace our employment anniversaries with financial independence anniversaries.



*By the way, thirteen years sounds like a long time.  New Kindergarten students in October 1999 are now college freshmen or out on their own.  I feel old.


**According to the US Census, just over 30 percent of homes were owned "free and clear" (without a mortgage) as of 2009.  Of further interest is that almost half of those "free and clear" homes were owned by those 65 years of age or older, leaving my wife and I in the remaining 15-16 percent of the homeowners under 65 years old and without a mortgage.

*** I track our net worth monthly, using NetworthIQ.

9 comments:

  1. That's an interesting story. I can't say that I've always made the right choices in life, but I managed to get my act together in the past 5 years at least. Never really knew what I wanted to do so I joined the military. I feel I have a purpose now and get to see new places across the country & the world.

    Those networth links are interesting. I don't consider myself to be overly frugal, yet over time it is possible to accumulate a lot of assets. Most people think short term. That's the problem. Paycheck to paycheck is not how I want to live.

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    1. Seems like you are in a good situation right now, being able to leverage your army accommodations and save/invest the cash which would otherwise be allocated to housing. Keep up the good work!

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  2. Great article. Congrats on your job and congrats on having a free and clear home:} Thats pretty awesome. Also, biggest congrats on having a great wife. Being gainfully employed is always a good thing. My brother just lost his job a week or two ago, and was working there over ten years. You are way ahead of the 'game' it seems to me.

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    1. Thanks! Having the house paid off is definitely a good feeling -- we wanted to make sure we had that expense behind us so we'd be less affected by things out of our control, like a sudden job loss. Hope your brother finds another opportunity soon.

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  3. hey it's been a month and a half since you last posted, whats' going on?

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  4. All is well. I just needed to take a break for a little while.

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  5. glad you're back! short and sweet or long-winded, doesn't matter, keep 'em coming.

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  6. Im reading your entire blog from start to finish. You and your wife are huge inspirations and this post made me want to comment to show you that your hard work is still helping people. Me and my wife are currently bedside in the hospital with our daughter. She has what may be an abcess the doctors arent sure yet shes fine its hard to keep a 4 year old down lol. Well both of us had to "call off" and go through the stress of feeling like crap cuz in the back of our minds it always feels like you can be laid off for choosing to be with family instead of going to work. I think this may be a breaking point for us. Im 27 and have worked in what i consider a career job for 6 years (got hired straight out of college) and my wife 25 has been working at the same place for 7 years (hired straight out of high school). Ive been investing for 3 years so ive gotten my feet wet but up until this point its been through my Roth IRA and a small taxable account. Through your blog and many others i have gotten to a point where this passive income is becomming more and more important to me. Thank You for all the work thats gone into this blog and know that even after 2 years your blog is helping new people find inspiration to be Financially independent. Thank You and toast to one day clebrating financial independence anniversaries!

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    1. Hey, I'm glad you are enjoying. I haven't been very active on this blog lately because of all of the changes in our lives recently, but I do hope to resume making updates at some point. Best wishes to you now and in the future.

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