Since rebooting our blog two months ago, I have had a few people send me messages asking about the gap between when we first started thinking and blogging about financial independence and now. First, I am excited to know that there are a few people who are currently reading the blog, and second this is a topic that has been on my list to discuss for the last several weeks. I have been trying to capture the details of why we essentially had our project go off-track (but not off the rails). Part of the reason I wanted to post something on this topic was to provide a little context to our path, and always be willing to show and admit that sometimes not everything goes as planned. I think too often there are some in finance, especially blogging, where everything posted seems to paint this perfect picture and path if you follow a set of well established guidelines and principles. While this may work for some from a purely mathematical or logical perspective, real life tends to be far different and varied especially when we add emotion, changing circumstances, privilege, luck, and other variables typically beyond our control. We all also have changes in plans that that we purposely make that has an impact on our goals as well as our life perspective. For us we simply want to be open that sometimes things just don’t go as planned, and even if you are extremely committed to something, there are still events that can seriously change the approach, focus, and outcome while pursuing financial independence.
So first a little backstory about our FI project before our recent reboot (both publicly on our blog and privately in our house)…. Near the beginning of 2015 we formalized a plan to pursue financial independence after a lot of reading, discussion, and thought exercises. We were luckily in a place already that made this fairly achievable based on us already being decent savers, not having a very extravagant lifestyle, and both fortunate with our careers (academia and consulting work). Based on the life we were currently living and what we expected and hoped for in the future we set a goal to save $1,200,000 at which point we would consider ourselves financially independent, while still undecided on the retire early part. At the time we had one child, a fairly low cost of living and were doing fairly well with both in my job at a university, and my wife working for herself doing contracting work. In early 2016 we were actually near our original FI number, far earlier than expected, then a series of events (both those under our control and out of our control) occurred. So here are the cascading series of events that not only changed our plans, but really took us away from thinking about and working towards financial independence from the end of 2016 until the beginning of 2019.
The first event which was completely our choice was the decision to add a second child to our family. While I certainly don’t want to go into significant detail about our experience in this post, especially the medical aspects, I will say that this decision to have a second child is far more complicated, and a lot more expensive than a typical pregnancy and birth. On top of that many of these expenses were out of pocket expenses not covered by insurance.
Next, when our new child was only 1 month old, we moved from Florida to North Carolina where I accepted a new job at a new university. While this was a great move for many non-financial reasons, it did come with an initial $10,000 per year pay cut, but I have not regretted this decision a single day since I left my old employer.
In early 2017 my father, who had been battling cancer for years, became terminal and deteriorated very quickly before passing away a few months later. This was gut wrenching to watch unfold and as anyone who has experienced an event like this, it very quickly causes a lot of reevaluation of life and priorities. This was the point that I pulled the plug on my original blog, and probably stopped thinking about financial independence all together for almost two years.
Finally, one last issue really had a huge impact on me not long after my father passed away. I had been dealing with my own medical issues for a while that needed to be addressed and had been neglected for many years. I don’t want to delve too far into my personal medical history, but this area caused a significant amount of downtime from recovery, time away from work, a reevaluation of my life, and from a financial perspective a big setback. Unfortunately a significant portion of medical expenses I incurred over this period of time were improperly denied by insurance, and I am still fighting them to this day to get reimbursed for coverage that should be required by both my policy and by law. It is a significant amount of money, and I am not sure if it will ever be resolved. This has all had to be paid out of pocket while waiting and hoping that it is resolved in the future. When I am able, I will write more about this in a separate post.
So it is evident from the list of events above that we had a few setbacks. A couple of these items I discussed have a direct financial cost that impacted our path and timeline, but there was a lot more than just the financial costs that came from these events. Clearly medical bills and having a new child create a measurable and specific cost associated with them that impacted our savings progress and net worth, but there is another part to this I wanted to highlight, and that is the psychological and emotional impact that these events played in our financial life for the past two years. When these series of events started, we lost complete focus on our financial goals, and I personally stopped caring for a long period of time. We made some questionable purchases that were made without consideration of the long-term financial impact, we took a few extra trips (really big trips) outside of our normal budget/travel hacking plan because I started to care less about tomorrow and only cared about right now. I personally dealt with my own mortality because of my own medical issues and also watching a parent deteriorate so quickly that I just didn’t care about finances. These attitudes and decisions were starting us down a path to undo a lot of work we had done to reach financial independence and maybe even solvency if it had continued for a longer period of time. Looking at all of this in hindsight it is easy to simply say we will all have our challenges and difficulties (health, relationships, job pay, etc.) along our individual paths and that is to be expected. What is hard is to convey the actual emotional state that changed during this time and try to put it into words in this post. I think I really wanted to write about this because no matter how well-thought out our plans are, there are many things that can impact us in a deep emotional way that at the time changes our perspective on everything. I will say after coming out the other side I think we have a stronger desire and much more motivation to pursue financial independence, but it was a real rough patch that we went through during this period.
There are a few positives that helped during all of this from a financial perspective, and it is where I drew the inspiration for the title to this article. We really did go off-track for a while, but fortunately we did not completely go off the rails and destroy or significantly set-back our plans by more than a few years. One of the things that helped was that so much of our savings system was automated. Having money withheld from my paychecks into 403(b) and 457(b) accounts before the remainder is deposited into my checking account kept most of the pre-tax savings in place. Not having access to that money while being employed was probably also very important during this time. Because of the state I was in, I am not sure that if I had easy access to all of my money that I would not have simply started spending a lot of it just because I could and did not care. As it was I was already spending money from savings and after tax accounts to pay for medical costs, but luckily the majority of our money is held in accounts that we really can’t access easily. During this time period it also made me realize that in the future, continuing this type of automation is important, and I will need to plan to implement some of the same type of systems in reverse once we start drawing down our savings and investments. If there is a lesson that I learned during all of this and one I hope to convey to others, it is to never underestimate your own emotional state and thought processes when it comes to your personal financial path, and I say this as someone whose primary expertise is in the area of learning and cognition. Leave room for the non-financial aspects of life and make plans to address them and make sure you have a support system in place!
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