Thursday, March 20, 2014

How to Stick With a Goal and Reach It

We've been inundated with guests for the past couple of weeks but now our house is blessedly silent (not that I don't like having guests but it can be a bit much when our guest rooms are booked solid for weeks on end).  Oddly enough the refrain we heard most from all of these guests was "I wish we could retire like you guys did".  At which point I silently calculate one couples $400k+ income per year and another guy's $120k+ income per year and his multi-million dollar net worth and have a difficult time keeping a straight face.

So this is how to retire early (or take that trip around the world you've always wanted or build that bug out cabin you've always wanted, etc).

  • Step 1.  Decide what your big goal is.  If you don't have a goal to focus on or have a variety of "I would like to do/haves" in mind you will be too unfocused to accomplish anything of significance.
  • Step 2.  Get out of debt ASAP.  You can do SO MUCH MORE when you aren't dragged down by the weight of debt (ie: imagine your life if you had no credit card payments, no car payments, no house payments, etc).
  • Step 3.  Be ready to give up stuff.  And it really is stuff that keeps you from reaching many goals.  If you must have the latest sports car, eat out every night, have a huge house with an equally huge house payment, or you keep yourself running on the treadmill of life (carting your kids to five separate activities each week or appointing yourself oversee-er of your dysfunctional family to the point that you can't even leave them for a week-long vacation for fear that someone will end up in jail/in court/in other versions of trouble) then you will not get off the hamster-wheel of "normal" life to do something decidedly abnormal (like achieving a kick-ass goal).
  • Step 4.  Be ready to stop being "normal".  As Dave Ramsey says, "normal" is broke and in debt.  Normal is also doing what everyone else is doing and to veer away from such things is (negatively) interpreted as being abnormal (and we all want to fit with the status quo right?  Uh, no). 
  • Step 5.  Think strategically about how you can reach your goal.  For example, we wanted to retire early.  Now there is no way we could reach our goal when we were living in an expensive area (Seattle), had a huge house (and a huge house payment), had new leased cars sitting in the driveway, and had credit card debt.  There was also a growing business to consider, the kids to consider, and a necessary income that was needed during our goal-reaching phase.  The totally radical answer to reach our goal quickly was simple (and simply insane according to some people at the time): we sold our assets (house, business), paid off our debts, returned the cars at the end of the lease period keeping one older paid off car, saw that the kids were situated (easy since they were all adults and gainfully employed), and learned to live (very) frugally on a small military pension.
  • Step 6.  Face the fear and march through it.  Some of the insomnia-inducing fears we considered: will we end up homeless (we did, it wasn't so bad), what will our friends think (initially that we were crazy but we left to travel for about a year before officially settling down and retiring; we didn't see them so their censure ended up being a mute point), can we reduce our income to an eighth of what it originally was and still survive (yes, with ease it turns out), and what if something catastrophic happens (the catastrophe in question was rather nebulous but doing something so radical tends to bring the worst "what-ifs" to mind). 
  • Step 7.  Have a fall-back plan.  This was rather simple and not well thought out but we did have a lot of friends and family who would open their homes to us should we literally end up "living in a cardboard box" homeless.  We had a good-sized emergency fund so worst case scenario we would be able to rent an apartment and "start over" if needed.  We also had a small yet consistent income (a pension, income from some freelance work) which meant we wouldn't end up with absolutely no money to sustain us.
  • Step 8.  Let your goal evolve.  Our goal, in theory, was to retire early.  Along the way we decided to travel for a bit since another goal had been to travel in a more extended fashion than what a few weeks a year allowed.  After months of "hanging out" and traveling from here to there, extended travel kind of lost its luster.  At that point we just happened to be in Las Vegas for the WSOP and some friends mentioned that houses were a steal in the city (this was shortly after the housing market bottomed out, hitting Las Vegas harder than most other cities).  Again, a bit of strategic planning allowed us to come to the conclusion that we could buy a house and by living frugally would not have to work, thus meeting the goal of retiring early.  Goal achieved!
  • Step 9.  Realize that you might reach your goal and find that there were some unintended consequences.  Don't get me wrong, retiring early is nice.  What we hadn't anticipated is that when you are retired and have absolutely nothing to do, you may become bored very quickly.  Becoming un-bored generally requires an expenditure of money (a quick trip to Europe, a fancy restaurant meal, or tickets to the newest big show on the Strip).  Again, by going into strategic thinking mode answers to the problem can be found (ie: enjoy free or low cost activities, work a single short-term gig to acquire the money needed for a larger purchase like a big trip, think about dipping your toes back into business, etc.).
  • Step 10.  Realize that you can always go back to "the way things used to be" (although why anyone would want to do that I have no idea).  Should this goal have crashed and burned, hopping back on the hamster wheel of "normal" life was an option: find a place to live, get jobs, rack up the credit cards again, lease a new sports car, etc (although why anyone would want to do that I have no idea).
That's kind of the tldr; of goal achievement.  To see how others have done similar, life-altering goal achievement projects, check out these links:

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