Coping with income transition to your authentic career
Note: This is a long-winded answer to Gemel's income reduction question in the thread "Following your technique Adam". I thought this subject deserved it's own discussion since it is perhaps the most challenging aspect of the authentic career journey.
I started my five year plan in late 2010. My first priorities were focused on arranging my financial affairs to remove the dependencies between my lifestyle and my job income. About that time I read the book Early Retirement Extreme (http://earlyretirementextreme.com/) by Jacob Fisker. The book is truly a "paradigm shift in economic perspective" in which Jacob explains how he succeeded in transitioning from an overly specialized large-company job to a retirement lifestyle within 5 years. The word “extreme” in the book’s title is not an exaggeration so it’s up to the reader to determine what their minimum standard of living is and how far to take the concepts in the book. I immediately put the book into practice and consequently my wife, daughter and I have made enormous changes in our economic lives. Perhaps the best way to explain it is to list specific changes I’ve made in only 3 years. My intention here is not to brag at my former lifestyle but rather to simply demonstrate the economic accomplishments that are possible in a short time.
Vacations – Then: Regular Hawaii vacations or some other expensive place. Now: Have a small camper (R-pod) and we drive to nearby camp-grounds.
Car – Then: BMW V8 sedan and Mercedes convertible that both required constant and expensive maintenance. Now: Eight year old Honda Element and Toyota.
Housing – Then: Owned a custom remodeled home in a San Francisco desirable neighborhood. Now: Rent a 510 sq ft mobile home in a trailer park outside San Francisco.
Entertainment – Then: State-of-the-art home theater and hosting large parties. Now: Board games with close friends.
Food – Then: At least twelve meals per week at restaurants. Now: Virtually every meal cooked at home from fresh food.
College – Then: Expectation of attending expensive school. Now: Only considering affordable schools with solid ROI and low living expenses.
Savings – Then: Savings rate of 5% of my income (i.e. for every year I work I can afford 2 weeks with no pay). Now: Minimum savings rate of 75% of my income after taxes (i.e. for every year I work, I can afford 3 years with no pay).
Keep in mind that my salary has gone up during this time and my co-workers continue to drive new BMWs and take first-class vacations in Europe. I’ve learned it takes consistent determination to make changes outside of a crisis. Which brings me to the question about coping with the changes:
– It was obviously important to build agreement with everyone in the family about our goals in doing this and that we all really want to succeed. My wife was initially not in agreement at all. Compared to her friends she was already a bit frugal but she had much more to lose socially than I did. This was a particularly tough period because we had competing goals. Nevertheless, I set parameters for my expenditures and stuck to them even though she would continue to spend the same as before. I turned down attending expensive birthday dinners and balked at buying pointlessly expensive gifts for friends. I changed everything that was within my power to change without her approval (e.g. car, clothes). I lead by example for many months and demonstrated my new found financial agility and described the new life that I was working toward as freedom from drudgery. I reinforced how much things actually cost by announcing how many hours of work it would take to pay for it and that if we didn’t buy it, we wouldn’t have to work those hours. Then one day a surprise change occurred and she became this superb money-saving-idea-generating machine. It was her plan to shop opportunistically at farmer’s markets and thrift stores, to cook at home, and to take camping vacations. Once we were a team again, big changes started happening quickly.
– We had to stop many activities with friends. It was initially a problem to find activities we could do with existing friends who expected us to continue taking foreign vacations with them, or join them for dinner at expensive restaurants. We turned down these invitations honestly with statements like “We have retirement savings goals that we haven’t met yet so we choose to only spend within our budget. Would you like to come over for a home-cooked dinner instead?”
– We were required to radically change how we spent our time at home. We had fired the maid, gardeners, and stopped eating at restaurants. The consequence is a lot more labor in keeping the house in order. Initially this was tough and was a major impetus in moving to a smaller rental home and is now very manageble. We bought a child's "chore-chart" (thrift store!) and put it on the fridge to make sure every task that needed to be done was assigned to someone. The suprise to me is that while I have more chores to do, I have about the same amount of free time because I am no longer attending so many pointless social events.
My 5-year plan is still on track and I'm glad I took care of the financial challenges first. Now I know that I can be a lot more selective in my authentic career choice and I've developed the financial skills to take advantage of almost any terrific opportunity that presents itself.
Great post Gratitude, I came across it as I am in early stages of building a more resilient lifestyle and my wife is not on board (yet) so I am looking for ways to be able to talk to her about it without degenerating into heated arguments. I am trying to talk with her about some of the ideas behind the crash course, not too earnestly but I don't think she is very interested. She is happy to live in the moment and continue with the consumerist, keep buying more stuff lifestyle.
I have got her around to the idea of getting ourselves debt free and she has consented to a small vege patch but I have to tread carefully, as she recently spat out "I am not going to become Felicity Kendall from The Good Life!" I had to stifle a laugh at that but she was deadly serious. I think it was her way of saying don't push me too far. It does not really help my cause that she is a forthright and fairly extroverted character while I am quite reserved – why is it that some people think that if you are the loudest in a debate or discussion that makes you more right? I should not speak too ill of my beloved, she cares for me very deeply and does a wonderful job looking after our family.
Can anyone out there provide some tips or point me in the direction of guidance about how to deal with a skeptical partner?
Here's guidance you should find helpful on "Dealing With a Reluctant Partner". It's written by Chris' wife, Becca:
This always comes up as a big, emotion-laden topic at our seminars. Becca has done a good job of distilling down the main points of our advice in this piece.
Great post Gratidude! I'd guess your happiness level either didn't change or increased. Would you comment on that.
I've discovered that my deepest level of peace and happiness is not contained in anything material nor is it in any special situation or activity. It's in me already! For me that discovery let me drop unnecessary things, activities, even some people.
Thanks for sharing! Best to you in the coming difficulties!
Many thanks Adam. I’ll just (try to) take it slow and not push too hard. If the student is ready the teacher will appear!
Thanks for the support Don and Jansen.
Jansen – In my situation I found that being an example worked slowly but assuredly. At first, I focused solely on my behavior and didn't comment on hers. To get the food I wanted, I said I would shop for my own groceries and cook for myself (highly unusual). I started buying castile soap and making my toothpaste. When I got the economy car, she knew I was very serious. In my experience, anyone can shuffle off the consumerism habits that most people grow up with, but it takes a few years of seeing how it's done.
Don – My happiness has indeed been boosted by these lifestyle changes, but perhaps not the expected way. Having less stuff, the increased flexibility, and the broad-spectrum detachment from belongings, activities and people have all significantly contributed to my self-peace. However the major impact on my happiness was not for these reasons. While having less stuff has made me noticeably more peaceful, the major contribution to my happiness has been because of my measurable progress toward achieving my goals. From time to time, I honestly miss my former luxury cars and home theater. When I start thinking of trading-in my old Honda for a plush car, I remind myself that a plush car takes me further from my goals. All of my goals support realizing and performing my major definite purpose on Earth (which is admittedly a bit vague at the moment). Steady progress toward a well-defined goal makes me profoundly happy.