What worked for me is, when you start making a lot of money, for the next 5-10yrs do not substantially upgrade your lifestyle and aggressively invest. Hit that 7 figure in liquid assets number as quickly as possible before you start doing all the luxuries. When you get used to that lifestyle it is really hard to dial back. Luxuries once tasted become a necessity. If you are on the younger side, that 7 figures will give you escape velocity with all the time ahead of you. I have owned a business since 2010( I was 30 at the time), here is my timeline. Wish I had started earlier but spent 20's working for investment managers. Laid off in 09 and had around 70k to make a business happen.
Year 1 - Get to a point I am not losing money every month
Years 2-3 - Start making enough money to cover living expenses
Years 3-5 - Start making good money and aggressively pay down all debt.
Years 5-10 - Making great money and aggressively investing 50-75% of income
Years 10-13 - Hit lower mid 7 figures NW and start enjoying and spending more. Keep investing but not be as obsessively.
Yep. Can only live an unbalanced life for so long. Pays to put in that work on the front end. I am nobody special either, just built a service business and got some wins on the investment side.
Might be! Just a personal observation, seems to be a fairly common trajectory for business owners in the non sexy, not cool and practical industries. People drawn to those business's have a more pragmatic approach as opposed to portraying a certain image or fast easy money. For me at least, I have always had a semi paranoid thought in the back of my mind that I am one major or series of events away from losing it all. I sleep a lot better at night knowing I have a war chest to survive an extended drought or pivot. I have been a part of a few high level business organizations, seems to be a somewhat common theme in the guys who last. Wish you much continued success!
Funny as I’m working to rid myself of that paranoia. Sure I could lose the business, but to you’re point…I don’t even reallly care / doesn’t matter. Why am I still worried about it…?
I spent my 20s in FIRE. Optimized my life around it - moved around the world to maximize income and minimize taxes. I was a mid-level peon in a hedge fund making hundreds of thousands of dollars a year, living in a 80 sqft. box.
There are diminishing returns to savings rates, and it affected all areas of my life. I probably didn't even feel it up until 50-60%... but going from 90-95% was absolutely stupid. My quality of life improved immensely once I backed off to something reasonable. Unfortunately, it took 5 years for me to realize that.
Got there in 2020. You know what happens when you hit FI? You move the spreadsheet box one over, and keep going. Everyone hears about the crazy stories people people stopping at "LeanFi", and they make the headlines, but realistically, three years later, I'm still working. Now it helps that I don't hate my job, but the drive that forces ruthless and relentless optimization toward a goal doesn't just go away. Lapped my FI number a few times over now.
It's really an extension of the old Wall Street "what's your number?". 10mm and a paid off house. Well, Main Street was never going to get there, so they backed out the calculations and went for less ambitious goals. The thing is the wall street number has a pretty big margin of safety (assuming you're not an idiot)... the main street one doesn't.
So what now? Once I got there, there's a peace of mind in knowing that you aren't worried about being laid off or having to deal with a pointy haired boss, but wifi money can also do that - and probably faster with less pain.
Since hitting FI, what have I done?
1. Spent a lot more - focusing on health, eating well, travel, the friends and family I neglected for years
2. Worried a lot less - Life expenses largely in treasuries now. Life is good. Can high risk the rest of it.
3. Look for interesting people to work with and interesting things to do. Doesn't have to be full time, and it's on my terms, and potential financial returns as a secondary factor. I find this much more rewarding than scrimping in a spreadsheet counting down the days until retirement.
Ditto on increasing earnings. Money compounding at scale (say $10M) gives you much more life options than at $500K or even $2M. Instead of being frugal with money...be frugal with time. Sacrificing 20's and early 30's really helped...it sucked to see other people having great time...man so many times I was tempted....I was ready to throw in the towel many times, but just kept pushing. So glad I stayed the course.
If you read the fat fire forums most of the folks didn't get there by pinching pennies. They built and exited a business or they were in a city at super high salaries like FAANG SWE in san fran or medical specialist or CEO.
Yep, the FatFire reddit forum was good for me to see that 95% of people posting in there were business owners that built and sold a business, not Dave Ramsey disciples. I plan to post in there one day.
An idea for future posts...how would you spend your days while you are FI so you don't get disfunctional and still enjoy? Work? Creating more businesses? 50/50 hedonism?
Been following you for a couple of years now. Is it me being duped by societal ideas on how to act mid-life and a tendency for “security”, or is it too late to start on this track when you’re 45? I’m living in the Nordics of Europe, have 3 kids and a house with mortgage and a normal day job as a manager at a SaaS company with ok salary and an ok savings/buffer in both crypto and stocks (not able to buy US T-bills here cheaply afaik).
What would your advice be for older people like me? I have very time over on the side due to mid-life ongoings with young kids that I want to give my attention. What are good ways to get started with failing and learning to build your own business if you can’t invest much more than a few hours per week learning?
The only advice is to suck up the pain and follow the plan. You have no shortcuts just more responsibility and less energy than someone in their 20s. Maybe you can offset being older with identifying opportunities, nobody knows.
You’re only 45…half your life still ahead of you. Get up earlier. Go to bed later. Start a biz with your wife. So many options. Build the base now, when your kids leave you can hit the accelerator.
What worked for me is, when you start making a lot of money, for the next 5-10yrs do not substantially upgrade your lifestyle and aggressively invest. Hit that 7 figure in liquid assets number as quickly as possible before you start doing all the luxuries. When you get used to that lifestyle it is really hard to dial back. Luxuries once tasted become a necessity. If you are on the younger side, that 7 figures will give you escape velocity with all the time ahead of you. I have owned a business since 2010( I was 30 at the time), here is my timeline. Wish I had started earlier but spent 20's working for investment managers. Laid off in 09 and had around 70k to make a business happen.
Year 1 - Get to a point I am not losing money every month
Years 2-3 - Start making enough money to cover living expenses
Years 3-5 - Start making good money and aggressively pay down all debt.
Years 5-10 - Making great money and aggressively investing 50-75% of income
Years 10-13 - Hit lower mid 7 figures NW and start enjoying and spending more. Keep investing but not be as obsessively.
Similar story here.
Years 13 - ? - realize the money only solves your money problems and reinvest in the relationships you neglected the first 13 years.
Yep. Can only live an unbalanced life for so long. Pays to put in that work on the front end. I am nobody special either, just built a service business and got some wins on the investment side.
Are we twins? Lol same story.
Might be! Just a personal observation, seems to be a fairly common trajectory for business owners in the non sexy, not cool and practical industries. People drawn to those business's have a more pragmatic approach as opposed to portraying a certain image or fast easy money. For me at least, I have always had a semi paranoid thought in the back of my mind that I am one major or series of events away from losing it all. I sleep a lot better at night knowing I have a war chest to survive an extended drought or pivot. I have been a part of a few high level business organizations, seems to be a somewhat common theme in the guys who last. Wish you much continued success!
Funny as I’m working to rid myself of that paranoia. Sure I could lose the business, but to you’re point…I don’t even reallly care / doesn’t matter. Why am I still worried about it…?
Obsessive dysfunctional nature I guess lol
Person B is less stressed at his W-2 as his WiFi biz grows.
Because he doesn't care or doesn't need the money, he gets promoted over Person A.
Yep that's also true but didn't bother saying it to give the FIRE guys some hope.
one the things always stuck with me:
You only can save so much. So you have "limited upside" in more money.
But focusing on earning more means unlimited upside.
Best thing you guys have been saying for years.
Yep
I spent my 20s in FIRE. Optimized my life around it - moved around the world to maximize income and minimize taxes. I was a mid-level peon in a hedge fund making hundreds of thousands of dollars a year, living in a 80 sqft. box.
There are diminishing returns to savings rates, and it affected all areas of my life. I probably didn't even feel it up until 50-60%... but going from 90-95% was absolutely stupid. My quality of life improved immensely once I backed off to something reasonable. Unfortunately, it took 5 years for me to realize that.
Got there in 2020. You know what happens when you hit FI? You move the spreadsheet box one over, and keep going. Everyone hears about the crazy stories people people stopping at "LeanFi", and they make the headlines, but realistically, three years later, I'm still working. Now it helps that I don't hate my job, but the drive that forces ruthless and relentless optimization toward a goal doesn't just go away. Lapped my FI number a few times over now.
It's really an extension of the old Wall Street "what's your number?". 10mm and a paid off house. Well, Main Street was never going to get there, so they backed out the calculations and went for less ambitious goals. The thing is the wall street number has a pretty big margin of safety (assuming you're not an idiot)... the main street one doesn't.
So what now? Once I got there, there's a peace of mind in knowing that you aren't worried about being laid off or having to deal with a pointy haired boss, but wifi money can also do that - and probably faster with less pain.
Since hitting FI, what have I done?
1. Spent a lot more - focusing on health, eating well, travel, the friends and family I neglected for years
2. Worried a lot less - Life expenses largely in treasuries now. Life is good. Can high risk the rest of it.
3. Look for interesting people to work with and interesting things to do. Doesn't have to be full time, and it's on my terms, and potential financial returns as a secondary factor. I find this much more rewarding than scrimping in a spreadsheet counting down the days until retirement.
Ditto on increasing earnings. Money compounding at scale (say $10M) gives you much more life options than at $500K or even $2M. Instead of being frugal with money...be frugal with time. Sacrificing 20's and early 30's really helped...it sucked to see other people having great time...man so many times I was tempted....I was ready to throw in the towel many times, but just kept pushing. So glad I stayed the course.
Congrats!
You've covered the "game plan" many times over the years.
This one is the sharpest and most convincing.
Ty fire peeps for the inspo 😂
hahaha
Bull, I fully agree with everything stated. My question is: do you think the FAT FIRE strategy is ok? Make $10M, then take your foot off the gas..
Sure $10M+ and you're done unless some drug addiction or marry a russian
If you read the fat fire forums most of the folks didn't get there by pinching pennies. They built and exited a business or they were in a city at super high salaries like FAANG SWE in san fran or medical specialist or CEO.
They solved the income problem.
Yep
Yep, the FatFire reddit forum was good for me to see that 95% of people posting in there were business owners that built and sold a business, not Dave Ramsey disciples. I plan to post in there one day.
Yeah and the other 5% are LARPs 🤣
FatFIRE (>5M$) is the way to go.
An idea for future posts...how would you spend your days while you are FI so you don't get disfunctional and still enjoy? Work? Creating more businesses? 50/50 hedonism?
Already covered do something you enjoy to make money while focusing on health
Thanks for this. FIRE got me to 1 mil, you are getting me to 5+
You'll get there!
What is FIRE?
Been following you for a couple of years now. Is it me being duped by societal ideas on how to act mid-life and a tendency for “security”, or is it too late to start on this track when you’re 45? I’m living in the Nordics of Europe, have 3 kids and a house with mortgage and a normal day job as a manager at a SaaS company with ok salary and an ok savings/buffer in both crypto and stocks (not able to buy US T-bills here cheaply afaik).
What would your advice be for older people like me? I have very time over on the side due to mid-life ongoings with young kids that I want to give my attention. What are good ways to get started with failing and learning to build your own business if you can’t invest much more than a few hours per week learning?
The only advice is to suck up the pain and follow the plan. You have no shortcuts just more responsibility and less energy than someone in their 20s. Maybe you can offset being older with identifying opportunities, nobody knows.
Start learning ads/copywriting tonight.
Yeah not sure why people ask things like this, the math is the math why does age matter
Just tough pill to swallow that it will be harder due to lower energy
Yep. Time to refocus my free time. What is your top recommendation on the best place to start learning how to do online ads well?
They literally have the articles listed in their last article in a step by step guide for learning e-commerce.
Your first step is to study before asking these basic questions.
You’re only 45…half your life still ahead of you. Get up earlier. Go to bed later. Start a biz with your wife. So many options. Build the base now, when your kids leave you can hit the accelerator.
FIRE = Scarcity. Thats an amazing point. The internet has given us the best opportunity in human history.
How would you calculate that $10M into foreign currency Bull to identify a "make it" value?