Freed by 50

I have a secret. One that I hide even from myself (as best I can). I hadn’t realized I was keeping this secret from myself until very recently, but when I discovered my own secret I was really happy, and then quickly went back to ignoring it.

My secret is this: I’m much further along my journey to financial independence than I’ll let myself believe.

How could this be, you might ask? How could I miss this as someone that calculates my net worth monthly, that checks my stock accounts daily, that knows my bank balance to the penny at any moment? The truth is I didn’t realize I was doing it because I trained myself to ignore certain numbers subconsciously.

Here’s how I’ve fooled myself, and will continue to fool myself.

First, although I look forward to the 15th of every month when I calculate my net worth, I don’t consider the number to hold any particular meaning for me. It’s a nice gauge, and produces a nice graph that generally shows an upward trend when the market isn’t crashing, but it also contains a few subjective numbers that don’t mean much. The main issue with net worth for me is the inclusion of my home value. I include it because I know I have significant equity in my home. However, my home value is only real if it’s actively being sold or borrowed against, and I don’t plan to do either. Zillow and Redfin are cute, but I believe them to have my home overvalued by about $100k, so I factor in a lower number, but it’s still a guess. So when it comes to net worth, it’s fun to track, but it’s not real.

The other number that I hide from myself is my wife’s 403b. This is less out of conscious or unconscious behavior, and more because she’s not currently contributing to it while on sabbatical, and because the crappy company that holds it doesn’t have a decent web interface. I get angry every time I try to log in to the account, so I’ve simply given up and enjoy knowing that somewhere there is a five figure account just compounding over time.

The hardest numbers to ignore, though, are my retirement accounts. And this is the secret sauce of tricking myself into believing I’m not as far along as I really am. Every day, many times a day, I look at my Fidelity account which has my Roth IRA, 401k, and IRA in them. I see those numbers. I track those numbers. But I’ve trained myself to completely ignore those numbers entirely.

My Roth has a low five figure balance, and as long as there are five numbers in the total, I don’t pay attention. I cant contribute to it anymore, so it’s just there.

My IRA has a pretty large balance. I know it’s gone up considerably over time, but I told myself I can’t touch it until I’m 59 1/2 (even though I know there are ways around it). So while it’s nice to see, I tend to look right through it.

My 401k is continually increasing by an appreciable number since I maxed out contributions early last year. As we all know, though, this is another account that’s meant to be touched after 59 1/2. I’d like to stick to that for both this and my IRA and only use them if/when I need them in my 60’s and later. Another reason I ignore this account is that it’s rapidly approaching a six figure balance and I want to celebrate that when it happens, not before.

The only numbers I do look at are my bank account balances and my individual investment account. These are the only numbers that matter because this represents the money that I have immediately available if something bad happens or if I decide to stop working. Combining these balances is a big number, but it’s nowhere near my FI number. Because of that looking at these balances motivates me to push harder to find ways to increase that number. Sometimes it drives me a little mad to think that I’m years away from where I want to be. And that’s when I tap into the little secret in the back of my head that the money I’m looking at is only one third of the total I’ve really saved. With equity, only one fifth.

Why do I keep this information out of my consciousness? Why would I push myself to the edge and not celebrate this obviously great situation? The answer for me is simple. I just have to look at the sentence I’ve kept scrawled on a note that I’ve kept on my desk since I left my dead end data center job 11 years ago: “Don’t get complacent.”

By believing I’m not as far along the journey as I really am, I’ll always keep myself motivated to continue to try new things, to earn more, to save more, to spend less. I wont stop to convince myself that I’m already rich and that I should treat myself to a few expensive things because I have my finances on lock.

This is my secret. I wont let myself believe I’ve made it until I’ve truly made it.