It has been a few months now since I started thinking about early retirement as a reality. What happened since then is a lot of reading and learning about personal finance, taxes, investing, minimalism and other related things. The more I read and learned the angrier I got. It turns out I had wasted so much money and time over the years on things that didn’t mean much and didn’t bring happiness to our lives. What a waste!
Some may consider this post as a bitching session. And they are probably correct on their assessment. But everyone needs to let it out every once in a great while. I think me being the blogger gives me that right. So, where do I start?
I will start with the most boring of all. Item #1: Taxes. I always let others do my taxes. Firstly, it was supposed to be a complicated process. All the codes, rules, and stuff. Secondly, IRS was being considered a monster back then (little exaggeration doesn’t hurt anyone) and letting someone else do my taxes took the responsibility of making a mistake away. At least, that was what I thought back then. Everyone else was doing it that way why wouldn’t I? Below is copies of receipts showing how much I paid to H&R Block for simple tax prep work back in 2000, 2001 and 2002 (Can you even believe the amounts? I feel ashamed.):
Am I doing my taxes now? No, not yet. How much did I pay last year though? $65. This is more manageable. Does it make me mad to remember what I paid a decade and a half ago? What do you think? Of course, it does. BTW, why do we always do our taxes so close to the deadline? May be my procrastination was responsible from it. Blame is diverted. Mission accomplished. ?
Item #2: Retirement Accounts. Wasted insane amount of years by not maxing out my 401K or not putting anything at all. Can you believe that? It sounds ridiculous now. But I am sure back then I had my reasons. Probably not good ones but reasons nonetheless. I even noticed a note on one of those H&R papers mentioning no money being put in my 401K. Another shame on me moment.
Another bad one on my part is $2000+ dollars I kept in my SEP IRA account in Bank of America. This money was given to me by my previous employer. It has been sitting there since the beginning of 2004 and made a whopping $200 in last 12 years. I am sure some of the Early Retirement guys would quadruple that money by now. ? I just opened a Vanguard Traditional IRA account and will be moving that money there with my old employer’s 401K and another Rollover IRA account I have with another investment company.
Item #3: Consumerism. Well, well. We liked to buy things, didn’t we? Yes, we did. We bought even more items for the kids. I wanted them to have what I didn’t have when I was a kid. I feel like shopping is like a sport in this country. Everybody loves it and everybody is on the looked for a great bargain. Who cares about the distinction between NEED and WANT? That line was blurred a long time ago in US. The whole economy is built on consumerism. We only look at Gross National Product to see how good the country is doing. All that matters is consumption and money spent.
One thing I did not go crazy on was cars. If we bought a new one we bought something cheaper (base model) without bells and whistles like a Honda Civic or a Honda CRV. Having said that, I once bought a used luxury car. To be honest, once was enough. They are nice to drive but expensive to maintain. Another live and learn moment.
Now that we found minimalism and simple living we are off the wagon. No more mindless shopping and buying things because they are on sale or may make us feel better. I need to simplify my life and I need it now more than ever .
Item #4: American Dream and the House. What a load a crap. I think the American Dream is gone. This was one of the things we did because it was what everybody else did. We weren’t trying to keep up with the Joneses. But we thought that when you make more you needed a bigger house. We justified it because the kids needed more room to play. So far, we have owned three houses. Hold on a second. That is not true. We owned part of it and the bank owned the rest. The current one we live in was a total overkill. It was not necessary. On top of that it was probably one of our worst investments. I hate taxes and they are killing me in this house. It is justified due to the good school district. Luckily, only a few years left for the little guy to be done with high school. Then we are free and clear. BTW, I don’t even want to wait that long to sell the house. We probably should sell it and rent for a year or two.
Item #5: J.O.B. Job or working for someone else. What is so bad about it? 9-5 routine, cubicles, politics, coworkers, supervisors, commute (even though my commute is not bad it is still a commute), not my first choice as a job, and …….. I am going through the motions. Days, months, years go by and many more on the horizon without any enjoyment or satisfaction if things continue the same way. Safety and good salary is a pacifier. The job itself is not satisfying. Even though it has provided for the family for a long time and allowed wife to be a full time mom or part time worker depending upon the year, it’s pure propose always has been the money. That is it.
What all this mean? It means we need to get on this Early Retirement band wagon and do whatever is necessary to reach our goal. We have a timeline and defined numbers. Can we make it? Time will show. But, rest assured, we will do whatever we can to get there. Seeing others already accomplished this dream gives us courage.