Our second FIRE anniversary passed without so much as a post, four months ago. So, how are things? In a word: great. We’re hopeless. We cannot conceive of spending entire days in someone else’s building, doing work that benefits that someone else. Better yet, the memories of our former corporate lives fade by the month. Otherwise…
2017 Numbers: FIRE Transparency
Everyone does FIRE differently and “retired” means a lot of things. For us, Financially Independent and Retired Early means we do not need to work to survive, but still do paid work we enjoy. We do this without intention or any sort of plan. We take work (or don’t) as it comes, and set no financial targets for annual income.
This year, we have not worked many billable (i.e. official self employed) hours: 600 between the two of us from January 1, 2017 through today, about 66 hours per month (33 hours per person) per our bookkeeping software. This does not include hours spent on all paid work we do, like casual side gigs for cash or trade, but it’s reasonably accurate.
Income wise, we’ve earned $85,000 so far. This is about the same as 2016, which was $90,000. We’ve done different sorts of work for an entirely different set of folks than we did last year, and yet our income is the same.
Spending wise, we’ve used $22,000 of that $85,000 to live on. Being 75% of the way through the year, this seemed low. Before we entered FIRE (and in order to achieve it), we spent $32,000-$34,000/year. Since FIRE, we haven’t altered our spending. Then I remembered that our property tax bill hasn’t arrived yet! Property tax in full, plus basic expenses for the remainder of the year and some year-end charitable donations, will bring our 2017 spending total over $30,000 to what’s normal for us.
Related to this, FIRE life has a consistent, seasonal cadence. July and August have little to no work, because everyone else is on vacation. Things pick up a bit in the fall before slowing down before Thanksgiving. January through May/June are slammed.
Can’t Stop the Entrepreneurship
When we entered FIRE in June 2015, the six months that followed were a revelation in brain space, time, and creativity. Without corporate work occupying our valuable thinking time, we got all sorts of ideas for new businesses, or ways to help existing ones. We loaned money to one small business at 2%, got it back, and are now re-investing that full amount in another small business, in which yours truly might become a very part-time partner. I’m not sure. Even that still feels like too serious a commitment in my FIRE life.
I’ve written business plans for numerous small businesses, gratis, and may also continue a relationship with one of those, likely as a board member.
This work has been a LOT of fun.
Mental Overhead = Automatic Frugality
I love the phrase mental overhead, also known as cognitive load or emotional labor. It’s the mental cost of stuff, and of acquiring and managing the stuff. This mental cost prevents us from spending any actual money.
New windows? We could use them. Ours date back to the 1970s and we have very few windows, so replacement costs are low. Ah, but there’s the mental overhead: Researching all the types of windows available. Learning what the city of San Francisco will and will not permit. Visits from people to measure the windows. Reviewing estimates from said people. The communication: phone calls, blah blah. People not showing up when they say they will.
I literally cannot bear the thought. Another year passes without new windows. Likewise cabinet facings, a built-in shelf, and house painting, though the latter looks more pressing. Sorry, neighbors across the street. I can’t even.
In FIRE life, mental overhead decreases over time (unlike at work, with managing a new hire, for example), but feels higher at the outset. Fortunately, this non-monetary cost has the benefit of translating to money savings!
I saved the best part of FIRE for last. Earlier this year, we became primary caregivers for an elderly family member, following their emergency hospitalization. If we’d not already entered FIRE, this incident would have forced our decision. There is no way we could both have fulltime jobs and properly care for our family member.
I have a LOT more to say on this that I’ll save for later. The short version is:
Holy Mother of God, the U.S. has the most expensive, vile, ineffective, wasteful, and fraudulent “care” system on the planet. I mean, holy s**t! This is like the Communist “make work” system, with 15 people who all do one thing vs. one person who can do 7-15 things! We cannot age in the U.S., uh uh, no way in hell. We’ll have to do what so many retired Americans have done and look into overseas living at some point. Glad we have family in Europe… Will that help us?!
Caregiving is a full-time job, especially in the mental overhead department. As eye-wateringly expensive as the U.S. system is, those costs do not include the free labor, by millions of people like us (and with far fewer resources), whose unpaid work sustains this s**t system, managing appointments, prescriptions, supplies, visits, caregivers, bills, bank accounts, the insurance, literally everything. Something’s got to give.