I am a pretty optimistic person. If you read this blog regularly, I think you’ll find that I’m generally focused on the positive more than dwelling on the negative. Lately, though, I have found myself struggling to maintain a completely sunny outlook, as progress has been quite slow, and we’ve entered a bit of a lull on the path to FIRE.
It’s not that things are going poorly. In fact, a large number of things which will positively affect our progress towards early retirement are that close to coming online. The new rental property that I purchased late last year (and closed on in February) will hopefully be completely occupied and cash flowing by the first of June. I incorporated my consulting business as an LLC last month, and that should start to reduce my taxes very soon as well.
Despite all of these positive steps, I’ve still been feeling down about the lack of bottom-line progress. My safe monthly retirement income, which is a calculation of the amount we could safely withdraw on a monthly basis if we were to retire today, hasn’t changed substantially in almost six months. Getting the new rental property operational has been one expense after another totaling thousands of dollars. No single item has been outrageously expensive or even terribly unexpected– we are talking about a hundred-year-old house, after all. It just has felt like such a grind. Wake up, start working, discover another item that needs repair. Approve estimate. Approve eviction of existing tenant who hasn’t paid her rent since I bought the property. Wake up, start working, discover another item that needs repair. Approve estimate.
Oh, and when it comes to setting up that LLC? There’s countless layers of bureaucracy to wade through, whether it’s the secretary of state, the state tax board, the IRS, or even my local bank. My accountant, who happens to also be the one used by Mr. Money Mustache, hasn’t been responding to my emails in the past several weeks, and I have had to explain how to calculate my maximum individual 401(k) contributions to his employees several times (maybe I should just send a link to the blog instead?). Six weeks in, they still haven’t shown me a tax calculation that results in any savings for me, and my emails asking for clarification have been ignored (though they were quick to invoice me). They’ve billed me to set up a lease agreement for my home office space that they have yet to deliver. I can only guess that they have taken on more work than they can handle thanks to their recent publicity on MMM. I am, to say the least, frustrated.
In my less optimistic moments, I look at my expenditures over the past few months, and I wonder whether I’ve gone completely off the rails.
FIRE is Like Building a Skyscraper
If you live (or have ever lived) in a city, you may have seen a skyscraper being built. For months, hundreds of workers toil deep in the ground. They clear away the earth, pound girders hundreds of feet into the ground, then pour a strong foundation of rebar and concrete to support the weight of dozens of floors.
At first, it seems that there’s no progress whatsoever. People file in and out of a glorified hole in the ground, and there’s little sign of the skyscraper that will one day take its place. After the foundation is complete, however, something amazing happens. Almost out of nowhere, the building springs out of the ground, and floors are added at an astonishing pace. Almost before you know it, a mighty marvel of modern engineering stands in the place of an undignified pit.
It doesn’t take a lot of imagination to see how this metaphor applies to the path to Financial Independence. Everyone’s journey starts with the building of solid foundations. Want to start investing, but neck-deep in credit card bills? You are clearing away the earth as you pay off all of that debt. Want to earn income from a rental property? Every cost involved is a girder driven deep into the ground that will one day support a lifetime of freedom.
Truthfully, even knowing this, I’m still battling through discouragement. I wanted to share these experiences for everyone who might read and wonder why it is that personal finance bloggers only ever seem to have good news for you. The truth is that some days are just a struggle. We’re all building the foundation of the rest of our lives, and sometimes that’s a grimy, irritating, infuriating business.
In the end, there’s only one way to look out from the top floor, and that’s by starting in the basement.