Freed by 50

It begins.  This is the day I put my goals on paper and set my financial freedom adventure into motion.  I’m John and I want to be financially free on (or before) my 50th birthday.  Today I am 38 years old.  In fact I’m exactly 38 years and four months old.  That gives me 11 years and eight months to reach my goal.  Plenty of time!

Up to this point, I have lived multiple financial lives.  In my teens and early 20’s, I had next to nothing.  I made just enough money to support my life.  If I earned four thousand dollars in a summer, it was spent by the following summer.  I rarely earned money while school was in session, so I was forced to budget my summer income so that it would last a whole year.  This included gas, car insurance, food and partying.  The lion’s share of the budget went to partying, a bad habit I’d carry into my mid-twenties.

In my mid to late 20’s, I was earning an above average salary in comparison to my peers, and spending the majority of it.  At one point I had three cars, and although two were paid off, I had a massive insurance bill.  I even put $5k down on a lease for my Acura to keep the payments low!  I foolishly bought a condo I couldn’t truly afford with an absurdly laid out mortgage structure and 5% down.  I financed a lot of my partying on my credit card.  I convinced myself that I needed to take $10k worth of specialized computer training despite having a Computer Science degree, and financed that on top of my student loans.  These were the bad years.  Just about the only thing I did right, aside from making sure my bills were all paid, was consistently contributing 10% of my income to my 401k, and even that was wrong.  I was taking on debts and convincing myself that I was ok because I was putting money away for retirement, rather than just not taking on debts.

Right around the time of my 30th birthday I wised up and started fixing my financial life.  By 32, my credit cards and college loans were paid off.  I had cut down to one car, the Acura, which eventually cost me another $5k just to sell.  I had a great job with a six figure salary, and I had just met the woman I would eventually marry.  She was way better at frugality than I was, and we combined forces to improve our financial lives together.

Together, we managed to pay for our wedding in cash while paying off large chunks of my wife’s student loans.  During that time we were also forced to pay for an entire HVAC system in cash when the whole thing died one day.  After our wedding, we saved for a sizeable, but still sub-20%, down payment on our house and covered our closing costs, moving costs and the loss on our condo in cash.  I would consider my early 30’s a financial win.  I did make some mistakes, especially in the housing department, but overall it was a great success.  I also increased my 401k contributions, opened a Roth IRA and started my wife on a 403B account when she started working a full time job.

Today, I’m 38, my wife is 29 and we have decided that we want to be financially free as soon as possible.  My 50th birthday seemed like an appropriate deadline.  Any time before that and we’ll be elated, any time after and we’ll be disappointed.

We currently have about 20k in savings, 120k in retirement accounts, 42k in student loan debt and a 370k mortgage.  We don’t carry any other debts, we pay off our credit cards each month and any major purchase we need to make is carefully planned and saved for.  Still, we are far from our goal of financial freedom.

We just had our first child this year, and we plan to have at least one more (most likely two more) by the time I’m 40.  Raising our children while staying on the course to our goal of financial freedom will be the hardest part.  I have faith that we will make it.  I will continue to catalog our wins, struggles and knowledge here.