Although I’ve been blogging for almost 2 years, I’ve been reading personal finance blogs for many years. What I love about this community is that people are so open in regards to how they’ve achieved their goals and what mistakes they’ve made along the way. Most importantly, I love how the community challenges conventional thought, as this has empowered me to forge my own path. In that spirit, I’d like to share with you 5 things I’ve learned from personal finance bloggers.
#1: Financial Independence/Retire Early (FIRE) is a real thing
I always knew I didn’t want to work until traditional retirement age (between 62-70), and figured I’d probably be able to retire by 60 simply by not having any kids. But retirement younger than that didn’t even cross my mind. It’s been eye-opening to read about people who have been able to retire in their 30’s and 40’s, many who actually do have kids. I love reading about Go Curry Cracker, Root of Good, Mr. Money Mustache, the Charltons, Steve & Courtney, and the MadFIentist. They’ve all found a way to achieve financial independence and retire early.
This discovery was a pivotal moment for me. I remember when I started making enough money to very easily live within my means, invest 15% into my 401k and max out my Roth, and have more than enough to put into savings for large upcoming expenses. I was at a loss as to what to do with the amount left over. I already had an emergency fund, was saving the amount the experts said to save for retirement, and all the excess was going into my savings account.
Finding a purpose for that money was life changing for me. Suddenly my money was going towards something, instead of just accumulating in a low interest bearing savings account. It also gave my life direction and has provided me with a great goal to work towards. And if I don’t meet my goal of having the means to retire by 50? I’ll have a substantial amount of money already socked away, making my later retirement all that much better. Still a success, in my mind.
#2: FIRE has different meanings to different people
I’d always thought of retirement as living a life entirely of leisure. And that’s still how I view my own retirement, early or not. But it’s been fascinating to read about the different ways that bloggers envision their own early retirement. Some are traveling the world, others are involved with passion projects. By far the biggest benefit of financial independence is using your time as you see fit, rather than having it dictated by your employer.
I also hadn’t considered that there was a difference between “financial independence” and “early retirement.” But this is definitely a matter of opinion. The definition of each depends on who you ask, as they have different meaning to different people. Just be careful of the retirement police.
It’s been fun to read the stories of Resume Gap and TJ, who are using the basic principles of FIRE to take time to travel. Doing something like this has never crossed my mind, so following their journeys has been inspiring.
There are also bloggers who aren’t necessarily looking to leave the workforce, but instead have the ability to follow their passion instead, even if it means working for the man. A great example of this is Slowly Sipping Coffee, who have devised a plan to have a fully funded lifestyle change.
#3: The existence of the Trinity Study and safe withdrawal rate (SWR)
I’ve read a lot of personal finance books but I’d never heard of the Trinity Study before reading Mr. Money Mustache’s blog a few years ago. Now almost every blogger references it, either in support of or to refute the results. Without going into details, the study determined that a portfolio is statistically likely to last over a 30 year retirement using a 4% withdrawal rate.
This leads to debate over what a safe withdrawal rate actually is, considering that early retirees are looking at a horizon of closer to 50 years. Some bloggers are adamant that 4% is still adequate but I’m a little wary so I’m aiming for a portfolio large enough for a 3% SWR. When I retire, it’s going to be for good. I don’t want to have to worry about re-entering the workforce, especially at an older age.
#4: There are as many viewpoints as there are bloggers
The blogs I especially love are those that challenge my way of thinking. There’s always more than one way to go about things so it’s great to read about different approaches and the reasons behind those. Bloggers like Freedom Is Groovy, Our Next Life, and She Picks Up Pennies aren’t afraid to ask tough questions or write about sensitive topics. I love reading these blogs because they challenge any preconceived notions I may have and provide me with a different point of view.
#5: Spending money is ok – as long as it adds value
For anyone in the personal finance blogging community, you’re well aware that there’s a subsection that prides itself on spending as little money as possible. JD Roth even wrote a post about it. I have no problem with people spending very little of their own money, but judging others on how they spend their money isn’t a productive use of time or energy. We should be building each other up, rather than tearing people down.
I’ll admit that I tried to spend as little as I could during 2016. Life had other plans. While I’m still trying to be careful of how much money I spend, I’ve begun to give myself much more leeway when it comes to things that add value. Anything that makes life easier/better for myself or a loved one gets a free pass. I’m also trying to spend more on experiences. When opportunities present themselves, I don’t agonize over the amount and instead think about the great memories that will stay with me forever.
It seems like the FIRE community is so focused on achieving the highest savings rate possible that we tend to overlook the here and now. FIRE is just as much about the journey as it is the destination. We should be enjoying our lives today, rather than living for the future.
There are so many other great things about the personal finance blogging community and so many wonderful blogs that have truly helped me along my journey. Far too many to name here so be sure to check out the Rockstar Finance blogger directory. There’s so much to learn from people who have various goals (paying off debt, early retirement, etc.) and are all over the spectrum in terms of where they are in their journey.
What have you learned from personal finance bloggers?