Do What You Got To Do

I heard this great quote from Denzel Washington:  “Do what you got to do so you can do what you want to do”.

He told this to his kids to get them to do their homework before going out to play.

When you look at folks who have mastered their money, they do this.  They do the tough stuff so they can do the fun stuff.

Debt makes it too easy to bypass the “got to do” but–beware–it completely derails the “want to do”.

If I had to say there was one thing that allowed me to retire early, it was that we built a lifestyle that didn’t required debt.  We’ve been debt free since I was 40 and have not had any consumer debt (car, credit card, furniture etc.) since I was 24.

It is difficult to create your dream future when you are still paying for your past. But rather small sacrifices, made consistently will eventually allow you to reach your dreams.

How did we do it?

We didn’t spend money on crap we didn’t care about. We were very intentional about our spending or as Mr. Ms. Liz says, “we beat spending decisions to death”.

You have to be a bit different from those around you. If your life’s goal is to fit in, this part will be really tough. I wrote about my struggles in The Math is the Easy Part.

You have to find your balance between living for now and living for later.

There are a whole bunch of things we just didn’t do because we valued savings more than those experiences and things. I wrote about some specifics in Little Decisions Help You Reach Your Dreams.

If you have any consumer debt (credit cards, furniture etc.), do whatever you need to do to get out of it. Get an extra job and cut your expenses until you’re living on rice and beans. Put all of your extra money towards your debt.

The math says the Debt Avalanche method is the best way to pay off debt. But the best way is really the one that works for you. Just pick one: Debt Avalanche, Debt Snowball or Debt Bonfire.

Create goals within your goals and celebrate your success. Say you have $10,000 to pay off, celebrate when you get to $9,000 then $8,000 and so on.

Follow my 12 steps to a Kick A$$ Life. It takes you from your first emergency fund to debt payoff to retirement savings and investing.

I want you to save for your dream. Even if you’re not exactly sure what your dream is, save for it. I didn’t know I wanted to retire early until I really, really, really wanted to retire. Thankfully, I had saved for it.

Do what you got to do so you can do what you want to do.

Photo credit: Our fabulous tour guide on my iPhone in Lower Antelope Canyon near Page, AZ

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We’ve Become Early Retirement Evangelists

Have you ever had someone show up at your door and try to sell you something? I’m not talking about a neighborhood kid raising money for something–I’m totally OK with that. I’m talking an adult who wants to sell you on their religion, their cleaning product or their home improvement services. Annoying huh?!

But now, I want to walk door to door and tell people how great early retirement is. Can you imagine how that conversation would play out?!

Ok, I’m not going to walk door to door. When we get a little in our liquor, we do try to get all of our friends to join us on this early retirement adventure. Mr. Ms. Liz especially. “Why are you working?” “You don’t have to work, right?”

It reminds me of conversations I’ve had to have about why we don’t/won’t/didn’t have children. Half hour conversations about our decision process and then they still assume we weren’t able.  BTW I don’t know if we were able . . . because we never tried.

Decisions like early retirement or family composition become foundations for our lives.

And interrogating people about why they work when they don’t have to or why they don’t have children is like asking people why they do or don’t believe in God. It chips away at the foundation of their lives.

But I think we’re just trying to communicate how kick a$$ fun it is to not work. Yep, it’s really fun. So occasionally we do some chipping.

Our biggest limitation in retirement has been our love of our normal lives. This is why we haven’t embarked on an epic trip or bought a camper. We love our normal, everyday lives and the people we get to hang out with. We don’t have a strong desire to leave either.

I no longer define my success by my salary, my company’s success, or my leadership role. I define success by the amount of joy I have in my life. The joy in my friendships, the joy in keeping active, the joy in improving my Pickleball game, and the joy in connecting with people through this blog.

Sometimes, I wish we would have done it earlier.

We could have been more frugal. We could have skipped the new cars, the stupid big home, the vacation home, boat and some expensive hobbies and travels.

I could have been better at chasing money–taking jobs I would have enjoyed less but for more money.

We could have retired as soon as we reached 25x our annual spend. Depending completely on the math behind the 4% rule.

Other times, I think we did it just right.

Life is about balancing living for now versus living for later. We could have been super frugal, erring on the side of living for later and not made it to later. We’ve both lost people far too early and know all too well that there are no guarantees.

I also think about how increased frugality would have affected our friendships. Traveling, camping and boating deepened them. I don’t have a biological sister but I have three sisters from other misters. Would we be as close if we hadn’t survived sand storms, medical emergencies, and wine shortages? Oh, and that time we forgot to bring the camp grill . . . and the stove? Thankfully, I’ll never know. But I do know beef tenderloin is quite delicious when cooked over a fire on a marshmallow skewer.

In my mind, chasing money isn’t a race worth winning. I got out of accounting for a few years in my mid-twenties and hated it. My happiest day was when my bank statement would arrive and I could reconcile it. Not lying, I’m such a dork. So moving from accounting to another role would have made me miserable. No amount of money is worth misery.

I’m a worrier and a planner. If I had retired with just barely the resources I needed, I would spend my retirement worrying about money. We waited until we had saved over 30 times our cushy retirement budget. And we have fallback plans for our fallback plans. I worry about money not at all. I budget it, I track it, I forecast it but I don’t worry about it.

And although this may seem unnecessary, it was important to me to leave my staff and my company in good hands. I spent 17 years there, my colleagues and employees were like family. When I did leave, I left them with someone more capable than me. I set her up for success the best that I could and she was more than ready.

So if we show up at your door and try to convince you to join us on this early retirement journey, please be kind. It really just means we’d like to hang out more and we want you to experience your best life. And for us, we found our best life when we retired.

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What Can You Control?

When Mr. Ms. Liz takes me on a particular grueling mountain bike ride, my mantra is: “What can I control? Speed and Attitude.” Because once I’ve committed to a ride, that’s truly all I can control.

The same mantra works when thinking about our investments and our financial goals.

Last week was terrible for the stock market. The S&P 500 went down 3.7% to 2,762. People . . . are . . . freaking . . . out.

The last time the S&P closed close to 2,762 was way back in January on the 11th. What were we doing on January 11th? Celebrating. Yes, celebrating that the S&P 500 was up 3.5% for the year.

So this same result, separated by two and a half weeks produces a completely different reaction. Freaking out . . . or celebration. Interesting huh?!

I’m writing this on the morning of February 5th, the S&P 500 is up 3.3% for the year. If the market continued at this pace, we’ll finish the year 34% ahead. I’m not suggesting that would happen, but if it did, we’d all be patting ourselves on the back for what brilliant investment strategists we are.

But, instead we are freaking out. And who knows, it may continue to plummet and turn into a true bear market. If you read last week’s post, you know I’m staying the course. Continuing to invest aggressively for a retiree.

How do I sleep at night? Not great, thanks for asking but my poor sleep habits aren’t due to concern over my investments. My cash cushion helps me sleep. 15% of my invested assets are sitting in CD’s and cash. That 15% represents 7 years of my current spending. This is my dry powder if the market tanks.

I laid out my drawdown plan in this post: How I’ll Fund My Retirement. I intend to live on that cash when the market drops 10% from it’s all time high and replenish it when the market returns to the high. With this cash, I won’t have to sell when the market is low. Because you don’t really lose anything unless you sell.

This cash cushion reduces my speed but improves my attitude. And, yes, with the market performing as it has since I retired, I would have been way better off to be fully invested. I just did the calculation and it made me a bit sick to my stomach–two more years of expenses would have been covered. But the stress wouldn’t have been worth it.

So how are you feeling? Are you freaking out? If you truly are, this may be a good time to reassess your risk tolerance. That’s just a fancy way to say maybe you have too much in the stock market. Because if it scares you too much, you’re likely to do something unwise. Like sell your investments when they are down and then you really lose.

Do a quick gut check. Take the total amount you have invested in stocks and stock mutual funds and multiply it by 35%. That’s how much you’d lose in a typical bear market. Could you keep on keeping on? Or would you sell?

If you’d sell, you have too much in the stock market. Google risk tolerance questionnaire and look for one from Vanguard or Charles Schwab. Answer the questions and it will suggest a more appropriate asset allocation for you.

I have to admit, the thought of losing 35% makes me sick.

But I wouldn’t have to change how I live. I’m sure I’d cut some expenses. Just like I did when we were in the great recession though our earnings weren’t impacted much. A bit less eating out, a bit less traveling, more careful shopping etc.

And I know I wouldn’t sell. Because I’ve been through it before. Here’s the chart for my entire investing history–1990 to today:

S and P my history

You can barely see the blip that was last week. I’ll stay invested because I’m convinced the market always goes up. Over the long term, it always has.

All I can control is speed and attitude.

Did you do the 35% downturn calculation? How did it make you feel? Do you need to change anything so you can sleep at night? Tell me about it in the comments!

I was going to update this after Monday’s continued sell off but the answer remains the same. I’m keeping on keeping on. If you’re freaking out, do the gut check and take a risk tolerance quiz. If it gives you a recommendation significantly different from where you sit today, start working out how you can get your investments to align better with your risk tolerance. Seek out a real expert–a fee only financial planner who meets the fiduciary standard. You don’t want to lose sleep over your investment allocation.


Investing is risky, this reflects my opinion and is for entertainment purposes only.  Proceed with caution, do your research and seek professional advice if necessary.

Photo credit: Mr. Ms. Liz in the McDowell Sonoran Preserve, Scottsdale, AZ

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Should I Sell Now???

January 2nd, 2017 I published an article titled The Stock Market Seems Really High . . . Should I Sell?

It’s gone up 18.5% since then including dividends. Since I have 6% built into my long-term plan, I’ve seen three years of returns in the last year. And that doesn’t count January of this year–I’m up another 5% just this month.

Should I have sold? Clearly No.

Should I sell now? Who knows.

I’m not selling. I always stick to my plan–even in the terrible downturn in the great recession, I’ve always stuck to my plan.

The reasons the market seemed really high a year ago have worsened.

The Price/Earnings ratio is pushing 27 where the historical mean is closer to 16. This compares the price of a stock to it’s most recent 12 months earnings.

The Schiller Price/Earnings (aka CAPE Ratio) ratio is pushing 35 where the historical mean is closer to 17. This compares the price of a stock to it’s most recent 10 years earnings. There’s only one other time this indicator has been higher.

And I’m sitting tight. It feels a bit scary, but not as scary as you might think.

Here’s what takes the scary out of this stock market for me:

First, and most importantly, my expenses are low enough I can continue my current lifestyle even if the market drops 35%. And if it’s even worse, I have fallback plans for my fallback plans.

Second, we’re seeing the impact of tax reform–corporate tax rates went from 35% to 21%. This one change boosts corporate income 21.5%. When a corporation made a dollar pretax in 2017, they kept 65 cents; now with a dollar pretax income, they’ll keep 79 cents. That 14 cent difference represents 21.5% more earnings. That’s huge.

Third, corporations are using tax reform as an excuse to increase wages. And I say hallelujah. The disparity in the opportunities for the working class and the investing class is concerning to me. I believe we all benefit from working class folks earning a livable wage. And we all benefit as these wage increases are immediately turned into spending which increase corporate earnings and the cycle repeats.

Fourth, there are few good alternatives to stock market investing. Interest rates paid on bonds and cd’s remain at historic lows. The historic means for the P/E and Cape ratios referenced above, reflect times when these rates were much higher.

But here’s the real reason I’m not getting out of the market:

I’m not smart enough to know when it’s time to get back in. I’d dare to suggest you aren’t either.

So we sell today and the market continues to rise. Do we decide we were wrong and jump back in a rising market?

So we sell today, and are geniuses–our timing is spot on perfect. The market tanks tomorrow–it drops 10%, do we get back in? How about when it drops 20%? . . .

And in the meantime, our money is earning 2% if we’re lucky, we’re probably not even keeping up with inflation.

OK I’m not selling but I did do one little tweak. 

My careful readers know I’m a huge fan of VTSAX–Vanguard’s Total Stock Market Index Fund. With the exception of some legacy investments that would create a large tax bill if I sold, everything was in VTSAX.

But earlier this month I moved about 15% of my invested assets to VTIAX which is Vanguard’s Total International Stock Index Fund. With our stock market so frothy, I thought it made sense to have a bit of international exposure. Especially since the value of our dollar is declining against foreign currencies.

So that’s it, I’m staying on track but with a little tweak. How about you?? Are you making any changes to your investments?


Investing is risky, this reflects my opinion and is for entertainment purposes only.  Proceed with caution, do your research and seek professional advice if necessary.

Photo credit Ms. Liz from our back deck.

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The Real Goal . . . Happiness

You wouldn’t think I’d need a reminder of this but I did. I was listening to the Choose FI Podcast this weekend. They were interviewing Todd Tresidder who writes at He was talking about different paths to financial independence and said something like “really it’s all about happiness, what makes you happy”.

People achieve Financial Independence (FI) in many ways. The loudest message is that reaching financial independence takes frugality, and in many cases fairly extreme frugality. Every decision is weighed against the financial impact. All spending must be a hack of some sort.

Some of us are hard wired to be optimizers and hackers. We love finding the best deal, spending hours to save tens or hundreds of dollars. And if this describes you, all I can say is bless you. I have a few of you on my speed dial. If I need to know where to get the best deal on a [fill in the blank], I call you.

And I’ve written about my frugality and some of my hacks. Because I reached financial independence by keeping my spending low in spite of increases in my salary. Growing that gap between what you earn and what you spend is essential if you want to hit your ambitious financial goals. Continue reading “The Real Goal . . . Happiness”

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How Income Taxes Work and My $0 Tax Bill

Taxes seem really complicated. So complicated that a reader asked me to write about how they work so here goes.

No, not all CPA’s are tax experts. Though I had to have an understanding of how taxes worked in order to pass the exam, my work has never involved income taxes. But, we’ve always done our own taxes, even when they were complicated by business sales and rental property.

Even if you hire someone to do your taxes, no one cares about your money as much as you do, so you need to be at least a bit knowledgeable about them.

I use Turbotax. I buy it at Costco in late December/early January when it goes on coupon special. I like answering all of their questions and making sure I’m getting it all right. The Federal e-filing is free and the process is super straight forward. There is an extra $20 charge for e-filing the state return but I still do it because it’s just so easy.

I use last year’s software to get an idea how our current year will pan out. I make a copy of last year’s return and replace the numbers with estimates for the current year. With Obamacare subsidies and the 15% bracket limits, earning an additional $1 of income can cost thousands in additional taxes and premium credit paybacks. So being able to play with my current year’s numbers is important. I know last year’s software won’t be completely accurate but it will be close.

Do you really know how much you are paying in federal income taxes? Continue reading “How Income Taxes Work and My $0 Tax Bill”

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You CAN Break the “Rules” and Still Get Here

Being retired early is like a really good chocolate cake. Once you’ve experienced it, you want everyone you care about to enjoy it too.

I’ve been writing so much about budgets lately, my readers are probably saying “enough!”. But I truly believe I reached financial independence because I budgeted and tracked my net worth. When people want to get their financial act together, I suggest they start with a budget. It’s one of my rules.

But you CAN successfully reach financial independence in spite of breaking almost all of the “rules” of personal finance.

I’ve spent a ton of time reading FI/RE (Financial Independence/Retire Early) blogs since I Googled “Can I Retire Yet?” after a particularly trying day at work. There are hundreds of these blogs but most of them were saying this:

Get or stay out of debt
Live on less than you make
Invest the difference

BAM! – simple right? There are a bunch of ways to do this and each of the bloggers (now including me!) are trying to help you by sharing their path to FI/RE with you.

There are fewer paths than you would think: Continue reading “You CAN Break the “Rules” and Still Get Here”

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It’s Budget Time!

Queue the Fixer Upper “It’s Demo Day” excitement because it’s budget time! Y’all know I spend New Year’s Day working on my budget and this year is no exception. Vanilla latte, Rose Bowl Parade and my budget . . . so cozy.

You know I love my budget but if you don’t love the idea of a budget, skip it. Yes, gasp! you can skip a budget. Decide what percentage of your income you are going to save and set up automated transfers to get that money out of your checking account. Invest it and live on what is in your checking account. Read my Budgeting Doesn’t Work For Me post for more help.

If you’re still reading, YAY! let’s budget! But what does budget time look like? Sorry but it’s even less exciting than you probably think. It takes about an hour, maybe an hour and a half. 99% of my budget this year will be exactly the same as it was for 2017.

Exactly the same you ask? Shouldn’t I increase each budget by inflation or some amount? Nope, I shouldn’t and I don’t. My “spending” category is my largest one and includes groceries, going out to dinner, buying clothes, etc. It’s pretty much anything other than utilities, vehicle/boat expenses, gifts and vacations. And my “spending” budget is the exact same amount as it was in 2006. Yep 12 years ago. Continue reading “It’s Budget Time!”

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You Only Get One

This time of year, I like to reflect on my life. I think about my good fortune and share some of it with others through our donations. I think about what I’d like to add to or subtract from my life. And though I don’t like to make resolutions, I do like to make plans.

Because we only get this one beautiful life and I don’t want to waste it. Some of us will get many years and some of us will get far too few. But no matter the number of years we receive in this, our one beautiful life, we all want to thrive.

Thriving for me probably won’t look like thriving for you–we’ll each have our own definition or vision of what thriving looks like.

I have several visions that help define thrive for me. Continue reading “You Only Get One”

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Do You Make New Year’s Resolutions?

I’m kind of jealous of people who can make a New Year’s resolution and stick with it. Resolutions don’t work for me. In the past, my resolutions have typically been about starting an exercise program or losing weight. By the end of January, little progress was made and little thought was being given to whatever resolution I had set. So now I don’t bother to make resolutions.

Want to know the best resolution ever made?  Mr. Ms. Liz walked into his office one January 2nd over 30 years ago and his colleague and good friend asked if he had made any resolutions. He replied that he was going to “find himself a woman” that year. I walked in that office 24 days later.  Resolution achieved!

So I love a good “resolution” though I no longer make them myself. I do use the excuse of the New Year to set my financial goals. I guess I could call that a resolution right? As you learned last week, I finalize my full year budget on New Year’s Day. Continue reading “Do You Make New Year’s Resolutions?”

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