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"About Us" Part 2:   Why We Could Retire Early


What Gave Us an Edge Financially

Our parents gifted us each with college educations so we entered the work force with $0 debt.

Bill's parents financed his advanced education; mine gave me 'starter' funds in the form stocks.

We entered our professions chosen in high school right out of our post-college training with no interruptions.

We chose not to have children.

We have essentially identical beliefs and issues about money.

We met taking an economics class at age 24 and together deeply learned the lesson about the "time value of money."

We began investing in the stock market at about age 26.

We didn't increase the cost of our lifestyle as our income rose.

Bill's unexpected income surge coincided with Reagan's tax cut programs, literally compounding our benefits.


Asset Accumulation

Delayed Gratification

In hindsight, we were seemingly obsessed with accumulating assets. Despite very modest incomes, we'd saved enough money for a down payment on a house when we were 28 and my father (a real estate broker in another city) noted that we almost had enough money for 2 down payments. At his suggestion, we bought our first home with a smaller down payment than planned.

The next year we scrimped and saved to fatten the remaining sum every way we could. We heated 1 small room in our new house as our 'winter living room' for years and kept the rest of the house at a  brisk 55 most of the time. The purchase of an electric blanket helped. We were able to buy a second house as rental in a little more than a year.

We noted that our friends were furnishing their first homes with inexpensive furniture that would have to be replaced in a few years, so we decided not to buy proper furniture for our new home. In the 5 years we lived in our 'starter house' the only new furniture we bought was a love seat for the living room. The bed stayed on the floor until we were 32 when we bought our second and last home. Until then, we also used a dining room table and shelves that I constructed and an eclectic assortment of used chairs I refinished. "Wait and buy higher quality when we'd be replacing the first batch of furniture" was our strategy to conserve assets.

We did most of the smaller improvements ourselves on both our homes and our rentals until more extensive work needed to be done at the time of sale. We joked about doing everything but roofing and pouring concrete. We applied buckets of paint inside and out, laid tile, installed vinyl flooring, laid a room of carpet, glued down countertop laminate and all the other usual  upgrades that came along. For years we were intent on trading our time for money as we wanted to keep our money growing in the market.

Lighting Up

Moving out of our starter home into a nicer place in our mid-30's was part of the process in shifting the priorities. We moved out of the first house on a very noisy street into a quiet neighborhood, we slowly furnished our home, and we began living more comfortably.

Bill still remembers the day when he realized that the balance had tipped, that he was now ahead to pay someone else to make the next round of repairs on our 'beater' truck, that his time was now better spent in his profession. Our focused attention on building a nest egg for ourselves was clearly working and his rising income took the pressure off.  We didn't however peg our lifestyle to our income and continued to heavily invest in the stock market and now had 2 rental homes.


Investing In Ourselves

One place we weren't stingy and didn't scrimp was when it came to investing in ourselves. Most of Bill's colleagues elected not to do advanced training so that they could begin earning a professional income sooner. Bill opted to advance his credentials at 2 junctures though it meant remaining on a stipend-level income for an additional 4 years. Though it turned out to be a financially rewarding investment, the decision at the time wasn't about money but about being willing to pursue one's professional interests without bowing to financial pressures. We each made several career decisions that were financial setbacks but we always considered the financial freedom to follow our interests as our top priority.

Coming Up For Air

Much to our surprise, when we began questioning our "all work, no play" lifestyle in our early 40's, we discovered that we almost had accumulated enough assets to retire early. We'd taken the 'time value of money' lesson to heart and had invested everything we could from the beginning of our relationship and it was working--our assets were multiplying nicely. We'd hit the critical mass point in asset accumulation and our savings were clearly on a trajectory towards giving us financial independence.

At that point, we began planning the next phase of our lives, an "all play, no work" phase. We weren't quite there financially, but we could see the opportunity. So, once again we reigned in our fairly modest spending so as to pump more cash into our investments to make sure we hit our target numbers. And it was during this phase that we began developing our new vision of becoming international cyclotourists. We didn't know what would come after that, but we were committed to giving ourselves a second chance at life with a radically new lifestyle.


More "About Us"

The last file in "About Us" was written in response to a friend's question about investing. It became obvious that we couldn't share any investment advice without looking at the bigger picture, which is what we recorded in "What We Learned the Hard Way About Investing."

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