Denali Northern Expenditure

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One Change

The Impact of Making Just One Change

A few months before we dove into purging our stuff, Mr. T got new socks. I was reading The Lifechanging Magic of Tidying Up to prepare for the big event. I was just reading the socks section when Mr. T was unpacking his new socks. “This book says you should roll your socks to let them rest.” Probably more to get to me to stop talking about the book, Mr. T dutifully rolled all of his socks. For two months, those perfectly sushi-rolled socks taunted me. They actually seemed happy. Socks. Happy. Crazy? Right? I wanted our whole house to feel that way. Every time I saw his socks, I wanted more! I wanted to dive right in and make it all better.

Recalculating: A New Financial Plan

Welcome to the culmination of a week of numbers! On Monday, we took a look at the historic spending of the Banks family and emerged with an ideal early retirement budget of $51,300 with an after-kids budget of $47,000. Remember that these numbers are all based on maintaining our current lifestyle in our current home in Alaska. Moving will most likely decrease those needs, but since we have data about what we currently spend, we’ll build projections based on the life we currently live.

Inflation, Market Return, and Safe Withdrawal

Today we’re going to take a good look at the three numbers most retirement calculators make you just guess. All three are very arbitrary and are based on future market and economic performance.

Inflation and Market Return

For ease of use, I like to combine inflation and market return. Often, when the market is high, so is inflation. But that’s not always true. So, luckily, some very nice people have combined the two metrics for us in an overview of historic market performance. All charts we discuss below are adjusted for inflation.

Why the YMOYL Wall Chart is the Best Retirement Tool

The book, Your Money or Your Life is said to have introduced the term “Financial Independence” and offers a very specific road map for achieving it. I strongly advocate every person read this book. A large part of the program involves creating a chart. Let’s start with how to create your own chart and then talk about why it’s the greatest thing since sliced bread. In Excel,* or on graph paper on the wall (I will argue for doing both momentarily), start tracking in a point-to-point or line graph form the following numbers:

The Financial Independence Anthem

We’re big fans of They Might Be Giants. They make catchy, intelligent children’s music. My kids were listening to one of their favorite CDs by They Might be Giants, Here Come the 1,2,3sThe Seven Days of the Week song came on and we all started singing loudly. I realized this is it. This is the Financial Independence Anthem. It’s about never going to work and living a dream. Maybe your dream is to play the trumpet. When you reach Financial Independence, you can practice all day every day so Sunday you play best! “Oh no, no I never go to work…”

The Bell on the Fishing Pole: Living in the Present

Want to know EVEN MORE about us? Today we had the pleasure of being interviewed by the great Mr. 1500 Days! Check out our interview.

One morning while we were in Hawaii during Christmas time, Mr. T and I left our sleeping kids in the care of my parents and took a walk out onto a rocky point to watch the sunrise. It was still pretty dark when we arrived, so we sat and watched the waves crash against the rocks. As we sat, we saw a group of fishermen getting ready to fish off the point. They spent about twenty minutes setting up their poles, baiting them, and casting out the lines. Then, they tied bells to the poles and walked away. I watched them leave the poles behind, get out some food, and start visiting with each other. I’m used to Alaskan fishing, which is very hands-on, so it surprised me when they walked away. And I kept staring at the bells.

The Two Things Keeping You From Retirement

The biggest financial finish line in the majority of people’s lives is retirement. Researchers have poured years into studying how to get people to actually take the steps to prepare for retirement because not enough people are doing so. The definition of retirement is to leave one’s job and cease working. Quitting work is the easy part of retirement. The hard part is being financially prepared to no longer have paychecks coming. Everyone is looking for a magic bullet to retirement—the as-seen-on-TV pill for becoming rich. People want to win the lottery or inherit large amounts of unexpected money because otherwise, they just don’t know how they will ever have enough money to retire.

Merry Christmas from the Banks

We’re spending the Christmas holiday in Hawaii, so we will be taking a virtual break until the New Year when we will return on Monday, January 4 with a December plan update. We hope you have a wonderful holiday season with family and friends and spend time on what is the most important. Also, I had another post planned about some little-known facts about reindeer, but Mental Floss beat me to it, so I recommend checking that out. Also, we were interviewed over at Even Steven Money so go check us out there! 

Dream Big

Who are the first people you think of when I say “successful person”? Chances are, you think of the famous people: Steve Jobs, Abraham Lincoln, Mark Zuckerberg, Michael Phelps, Tom Hanks, Adele, etc. Maybe you’ll swing back around to including a relative that isn’t so obviously successful, but more likely, you’ll think about the big names first. There is an endless amount of resources telling you about the habits, routines, diets, and life hacks of “highly successful people” so you can mimic them and be successful too. You’ll even find amazing stories of the failures of successful people that they overcame before they succeeded. But let me focus on the obvious element to success that we hear a lot: Successful people dream big.

First Job? $23,500 is a Magic Number!

Yes, Mr. T and I are on the road to financial awesomeness. But our road is different and complicated because we’re already down a path. So we have to chip our path over to the one of financial awesomeness. We already got a job, bought a house, and started living on nearly all the income we made. Those things don’t allow for a simple path. But what about you? I hear you are about to get your first job out of college! Congrats! That’s an exciting adjustment! I bet you’re looking forward to actually making real money! And guess what? I have great news for you! Your path to financial awesomeness is completely simple! Let me tell you about the magic number:$23,500. Let me suggest that you take whatever offer you are given for your next job and subtract $23,500. Just pretend it isn’t part of the package. Wait, wait, WAIT! Hear me out before you walk away. I’m only asking for FIVE YEARS. I know, that may be nearly half of your offer. But how much money were you making in college? Isn’t that still an improvement? Before you decide, let me show you just what $23,500 can do in five years and why that number is so magic.

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