As much as I like to like to encourage people to get better with money, I wouldn’t describe reaching financial independence as easy.
Sure, it’s not like coal mining by hand or ploughing a field without a tractor.
But society today has a way of offering us easy options. The problem with easy choices is that they come back and bite us in the backside later. I’m talking about things like debt, convenience, upgrades, premium offers, buy now pay later deals and so on. But I’m also talking about career and other life choices.
So if you have 2 choices, take the one that offers more challenge upfront with higher rewards over the long term. Learn to do hard things.
Today’s reader case study expands on this…
The Escape Artist
“Hard choices, easy life. Easy choices, hard life” Jerzy Gregorek
My partner and I recently hit our ‘number’. We are both in our mid to late 30s (with two young children) and are now financially independent.
The media tells us it’s basically impossible for millennials to save money or do well in life… but I’m not so sure about that. The way we’ve achieved financial independence has been through a pretty simple formula; two incomes (one of which got large, without ever being epic), not spending stupidly… and living well within our means.
Despite being a 40% taxpayer for most of my career, “yellow sticker” foods have been a habit since I discovered them as a student, with a lot of staples coming from Approved Food – a site I recommend to anyone. Likewise cars, where I have always set myself a £2,000 limit and then run them into the ground.
Still, saving money only gets you so far. To build wealth, you need to start by earning. I have done this by cultivating a career in applied mathematics over the past 15 years. You have a complex calculation with a lot of moving pieces? I can help with that.
Some background on me. I come from a very ordinary white working-class background in the East Midlands.
My Dad started off working in a car spares warehouse before becoming a coal miner. My mum worked in the Co-op.
I remember being sat in the car in a dark car park, after my dad had been made redundant from the pit, waiting for him to do an interview at a factory. He didn’t get that job. This happened more than once.
I was about 9 at the time but my general thought was something along the lines of ‘fuck that’ and deciding that I would be the person people wanted to hire, instead of the person trying to get hired.
I often had bread and butter sandwiches for my packed lunch at school. Those, and seeing how little financial security my parents had, made me not want that life. I didn’t know what was out there – the first time I met someone wearing a suit was at University – but I knew there had to be something better. I mean there must be? There were some villages not that far away with nice houses and fancy cars… how did other people buy those?
I went to a below-average state school and had no role models for a professional career. I was the first in my family to stay in school beyond the age of 16. But I did have the “leg up” of being intrigued by puzzles, maths, computers and science from an early age (credit to my mother for encouraging me and raising me as a single parent after my parents split up).
This continued throughout my education, with maths and science GCSEs, then A-Levels – maths, chemistry, and computing. These subjects are hard and you have to put in the graft to learn them, but you’ll be learning skills for life. Embracing that set me up well for the future and I gained entry to a Russell Group university to study applied mathematics.
Of course, if you have a degree in a STEM subject, that’s a good start going into the world of work but there are no 100% guarantees. It won’t get you the job, but it gets you an interview. You then start your career from square one; you might have a good degree, but so does everybody else.
Here’s how I think about hard work. John Gruden (NFL coach) said something to his team that resonates with me – to paraphrase “we may or may not be the most talented team, but we can be the hardest working team – because that is in our control”.
I acknowledge I’m lucky to have been born in a Western country, able bodied, and with some intelligence / aptitude. Yes, I was bright… but I was never the best (see my rejected Oxbridge application).
Could everyone do what I do? Probably not, but of those who “can”, even fewer “do”. The truth is that many people don’t apply themselves. I think this is where there is the real fall off, resulting in a shortage of good people with skills (and a lot of wasted potential).
Aiming to master my craft, I saw it very much as “go hard or go home” – if you do something you are interested in, and you see it as your “craft”, then you’ll do better than someone who sees it as a 9-5 and then goes home to watch Netflix. You’ll probably do more hours because you start to really engage deeply with the problems (and gain more satisfaction from solving them), but you will be more valuable and get paid more.
If you can focus on your actual career (instead of a second job side hustle) you’ll probably get paid better for all of the hours you work (i.e. an increased salary) rather than just the marginal few you do outside of your core working hours.
Discipline is important – seeking mastery, and reinvesting in yourself for the long game, rather than flitting from thing to thing, “retraining” with a 6 week online course in the hope of making a quick / easy buck.
Alongside work I’ve formalised my experience with postgraduate qualifications in my field. Postgraduate education is tough in evenings and weekends (revisiting mathematical proofs after 10 years was…challenging) but knowing the theory and having the credentials to go with that helps when meeting new clients, or potential clients.
Over the years being focussed on my career meant I progressed within it – my work was getting recognition (at least within my niche), and I was learning more and more. From that the money follows naturally (although you still have to negotiate!).
Once I was earning good money, I then saved it – unfortunately not finding out about investing in the stockmarket until later on, but at least I used my savings wisely to build a house deposit, pay down the mortgage when I had one, and save money for the future.
So really I’m talking about a path to advancement through expertise. There will be hard choices to make, no doubt about that. Do you want to stay caught up on the latest methods and industry news, or do you want to watch Strictly on telly? One brings instant gratification, but the longer term view bring satisfaction and happiness. This is basically the marshmallow test writ large.
Running is a hobby of mine and I run a lot. I have very little talent, just enthusiasm and a willingness to grind out the training. In long distance running, the key to success starts long before the day of the race. To do well in an April marathon, you’ve got to bank the miles through those grim winter months.
The mindset that helps with endurance, applies equally to career as to running; you don’t just show up and do well – the preparation is what makes the success. Similarly there are strong parallels to the world of FI, with thousands of smaller previous decisions adding up to success.
So is the path I’ve followed the one to get megarich; CEO or hedge fund level? No, I could work for the next 30 years and I’d still never have a private jet. On the other hand, with the path I followed you’re going to do well and not have to worry about money (provided you don’t spend wastefully).
My career trajectory in the last 18 months has had another boost with a promotion (the cumulative results of hard work compounding) beyond where most people level out. This definitely accelerated our savings (as we didn’t spend any more money) and brought forward our FI date by about 2 years (the extra earnings just get dumped into savings).
What that has meant is instead of one of us being over 40 when we hit FI, we’re both under 40 – neither here nor there really.
My partner is no longer working but me, I’m not leaving my career any time soon. I’ve invested a lot of “sweat equity” into what I do, and now have a position where people bring me interesting problems and let me work with talented juniors to solve them. I started as a kid liking puzzles and now I get paid to solve bigger puzzles, how cool is that?
Instead I see the rewards of my career as a pile of casino chips: I can cash out whenever I want. I might love what I do now, but will I in 5 years? 20 years? I get to keep on playing the game by choice (earning more chips as a by-product); using the skills I’ve spend a lifetime building – largely out of intellectual curiosity. When I’m done is up to me – after all, I’m FI.
The Internet Retirement Police may say continuing to work a 50 hour week is not retirement but I’m doing what I want to do, on my terms. Living my best life, as The Kidz would say.
So there it is, my approach to reaching financial independence. It doesn’t involve side hustles or living on cat food. Just pushing yourself to be as good as you can be whilst living modestly.
With hard work and hard choices, compound interest applies to career progression as well as to investing.