The Manifesto

My family in Bocas Del Toro, Panama- Summer 2019. We have started some new adventures this year, not the least of which is the journey toward Financial Independence

Hello, welcome to – Into the Universe. I am a mother of two beautiful humans, one German Shepard, and one fluffy white feline. My husband and I have been married for 25 years and I have been a nurse for 20 years. Over the course of my adult life, I have vacillated between between being very frugal and somewhat spendthrift. I grew up relatively poor, the granddaughter of a super saver ( my Nonnie could squeeze a penny until Lincoln screamed). While I describe my childhood as “poor”, I should also point out that I always lived in a home with my family, I never suffered a single day of housing insecurity. My mother made sure we ate nutritious food and she cooked nearly every meal from scratch. I never went a day without food or with any fear of hunger in my life. While we scrimped and saved, and often did without the finer things in life, we had the basics covered. It’s only now, as an adult and a parent myself that I understand what a tremendous gift I was given by having “enough”. I remember, at the time, being very put out that I didn’t have the trendy purse or the name brand blue jeans that my friends had. Now, I understand not only that we had exactly enough, but that our meager circumstances taught me life skills I would use later in life.

Fast forward to the 2008-2009 recession. We had been living the “American dream” which essentially included working and then spending just about our whole paychecks (outside of bills). When the downward spiral of the crisis hit our neck of the woods, we had a rude awakening. Suddenly, my nuclear family had to subsist with just “enough” or risk financial ruination. We had a goodly amount of credit card debt, a mortgage, a car payment and two growing children. My husband had been laid off and was receiving a small amount of unemployment benefits. Our home mortgage was underwater when the real estate bubble popped, we owed more on it than we could realistically sell it for. Luckily, my job as a nurse was secure…but I certainly wasn’t being offered a raise in that financial climate.

An example of black belt level frugality in Bocas del Toro, Panama. The salty sea air makes the metal rust. This intrepid bicycle owner used an affordable natural resource to make a repair that doesn’t affect the functionality of the bike.

It was during this time that we came to grips with our attitude toward spending and saving. We resolved to make substantive changes. Up until 2008, we had been earning good money as a dual income family with 2 kids , 2 cars and a house. Our financial situation looked like most of our friends and colleagues. We even made snide remarks about our spendthrift friends who seemed overburdened with debt greater than our own. While we were selectively frugal in some areas, we were oblivious to money we were hemorrhaging in other areas. By March of 2009, we had to take a cold hard look at our finances and our previous spending habits. We had been purchasing building materials for home repairs and improvements on credit. We ate out too much. We went shopping as a fun family excursion for the day. We thought nothing of spending ludicrous amounts of money on groceries, paying no mind to sales or loss leaders whatsoever, and buying all our lunches at work, while leftovers ultimately got thrown away. We had been buying clothes and toys for our children brand new from the store. After all, that’s what everyone did…right?

Now, that lifestyle seems ludicrous to me. How can anyone but the filthy rich expect to save and have a robust emergency fund with that kind of behavior? How could we have been so oblivious to our carbon footprint? We abruptly put our credit cards on ice (literally, frozen in a tub of ice in the freezer), as we weren’t initially able to get rid of them entirely because we had no emergency fund yet. If some terrible emergency should befall us, we needed quick access to credit “just in case”. We stopped eating out almost entirely. A rare dinner out was reserved for special occasions only. We stopped purchasing brand new anything. Thrift stores, Goodwill, Salvation Army, secondhand book stores, and eBay became our new best friends. I scoured the freebie local circulars for local entertainment that was free or nearly free. We planned our grocery store trips with greater care than the Allied forces planned the invasion of the beaches of Normandy. Every dollar that we earned had already been earmarked for bills and we couldn’t afford to deviate from that budget. ( or literally risk defaulting on our credit card debt or our mortgage). In what seemed like glacially slow progress, we paid down the credit card debt and managed to save a few thousand dollars for emergencies. My husband got his job back, and we were finally able to breathe easy again. Although we had resolved to never let ourselves get in dire straits again, fast forward another 7 years. Once again, we found ourselves with 2 car payments and albeit small amount of credit card debt due to an expensive and necessary home repair that just couldn’t wait (it was still a debt burden we didn’t want). It was about that time that I came into an inheritance. My sweet and loving grandmother, my Nonnie, had passed away. This was a women who had a much harder life than I would ever know. She had to surmount obstacles that I could never even imagine, just to get an education and a career in a field dominated by men. She worked up until 76 years of age, having amassed retirement pensions from two separate employers, having saved a comfortable amount in her IRA, and a comfortable amount in her taxable mutual funds investment account. The significance of this gift really rocked my world. I overwhelmingly felt that I had to be a good steward of this gift and in my opinion, the best way to do that was to respect her views on saving and credit. I used the funds to pay off both our car loans and eliminate the remaining credit card balance. I scoured all the information I could find on intelligent investing and retirement planning. I used every online calculator I could find to estimate college panning, emergency fund planning, investment planning….. you name it, I had a calculator for it. The only debt now remaining is our mortgage payment. We had refinanced in the summer of 2009 to take advantage of the super low interest rates so our current monthly mortgage payment is under 900$ a month in a city where a 3 bedroom home or apartment would cost most families 1500$ – 2000$ a month. We also have the benefit of making extra payments to the principle so that we can pay it off early, which I expect we will do in the next 5 years.

Our raised bed, enclosed, vegetable garden that my husband and father-in-law built for me 4 years ago. ( to keep the deer out of our vegetable patch)
Those pesky deer can’t chomp on my tomato plants now!
The addition of a kitchen garden helps to reduce our grocery bill, while supplying us with organic fruit,vegetables and herbs for 9 months of the year

I was determined to save as much of my income as possible to replenish the balance that had been used to pay off debt. Additionally, I wanted to invest the remainder using a safe strategy that would protect our future from any emergency or situation that might befall us. I read about Warren Buffet’s investment strategies, I scoured blog after blog for the most reputable examples of sound investment strategy. ( Which- by the way- can I just take a second to sound the alarm about the shit ton of scam artists, hack investors and multi-level marketing schemes out there in the blog verse?!) I finally came across Mr. Money Mustache the MadFIentist, and Nerdwallet. These three sites helped to frame almost all of my strategies moving forward. After all this research, I realized that even my penny pinching tightwad grandma had fallen for one of the most ubiquitous scams of the modern age. She was paying a financial advisor 1% of her investment portfolio to “manage her wealth”. WHAT? What’s worse is that this institution wasn’t even getting her a great return on her investments. She was entangled in several mutual funds with large maintenance fees and continued to carry stocks that had underperformed for decades. Combine that with the 1% diverted to the “wealth management” firm, and it was clear that her possible earnings had been dragged down for decades in fees and piss poor investment decisions. As I started asking some very pointed questions about the services these “advisors” had been giving to both my grandmother and now me, they ramped up their fear tactics to scare hardworking people and convince them they aren’t smart enough to manage their own wealth. I suddenly started getting phone calls assuring me that they “ don’t make money, unless you make money “….even though the commissions on some of the poor performing stocks and funds were ridiculously lucrative for the investment firm. The woman I spoke with tried to to convince me that the stock market and financial planning in general, were a mine field of obstacles and bad investment decisions that could blow up in my face, if I didn’t take her advice. I didn’t believe a word of it, thank goodness. I closed the account and continued my research on sound, intelligent and safe investment strategies. I’m happy to say, after almost exactly one year, we not only remain debt free but I have replenished the amount that I used to pay off our debts thru saving and investment strategies. My 401K, IRA and my Vanguard ETF Investment account are all growing at very healthy rates. By my estimate, I am between three and five years away from FI. ( financial independence for those of you not familiar with the lingo) . Three years would be my target FI number for a fairly frugal lifestyle. Five years would be my FI number with a greater cushion and more leverage.

Right now, our family has the advantage of virtually no debt and we plan on keeping it that way. If we want a vacation, we save up for it. We may use credit cards to take advantage of frequent flier miles or cash back bonuses, but we pay them off as soon as humanly possible (Usually, before the end of the billing cycle). Only very rarely have we had to carry a balance over for more than a month. While my children enjoy the new adventures we have taken in our debt free lifestyle, these are only possible because of our frugal sensibilities.

After biking to a little cove overlooking the island’s cliffs and the Pacific Ocean, we found a cute little Pirate themed bar with very affordable burgers .

I realize that most Americans don’t have the benefit of an inheritance to wipe out most of all their debt in such a short period of time, and I plan to write future posts to address this. Yet, the enormous boost to our ability to save once we were out from under all that debt burden can not be emphasized enough. Suddenly, we had this snowball effect happening. Money that was previously going to a payment (car and credit card) could suddenly be put straight into savings or investments. We found that we didn’t need extended warranties on our cars or other large home appliances because we could just pay for a repair and save the monthly payment on the warranty. We did routine maintenance on our home and cars to prevent more expensive repairs in the future, because we had money in the bank for those routine repairs without having to scrimp in some other area or put it on credit.

There are some in the FI community that may disparage my claim to FI because I didn’t “earn” all the money. However, to those naysayers I would point out that both my husband and I have incomes that have been stagnant for over a decade. While both of us are “skilled” and have had to accomplish a great deal of education and training to do our jobs well, our combined incomes have just recently topped 100K. The majority of FI’ers are either in IT or engineering and are earning more than 100K individually. That is why they can afford to save so much. I have had to employ some next-level tightwad tactics to reach my goal of saving 60% of my income. We spend $ 120 per week on groceries. That’s breakfast, lunch and dinner for 4 people, all the toiletries and cleaning supplies as well. That breaks down to 30$ per week for each human, or $4.28 per day. I would further point out that the care, maintenance and feeding of two growing children has an impact on our ability to save and invest. ( not a complete game changer, I’m just saying- it’s a factor). The food plan for the week has to be carefully managed not only to save money, but because my kids eat an enormous amount of food. I don’t buy a bag of chips for $3.50, when I can buy a bigger bag of pretzels for 1.00. I stock up on nutritious and filling fruit ( whatever is the loss leader that week) and then engineer a few different ways to make it appetizing to my kids. This way, my kids nutritious snacks are covered for pennies on the dollar, compared to the usual junk foods. Having said that, we also believe in quality over quantity. This attention to quality also encompasses services and experiences. For example, I won’t deprive my children of weekly piano lessons just to save 250$ per month. Let me break that down for you: one lesson each ,per week ,costs a little over 30$ per child. We were able to locate a beautiful upright piano on Craigslist about 10 years ago for FREE. Yes, free! Because an elderly woman was having to downsize her belongings and couldn’t bring her piano with her. She was overjoyed that two young children ( six and three years old at the time) would benefit from the gift of her piano. She was happy to give us the piano and we were happy to score such an amazing deal. We found a piano teacher who is EXCELLENT with children, and after 10 years of lessons, we consider our kids’ piano teacher to be a surrogate member of our family. Decades of research on the learning abilities of children have shown that learning to play an instrument is a catalyst for accelerated learning and academic advancement in all other educational areas. Children who play an instrument are less likely to engage in risky teenage behaviors and more likely to have higher grades. By making that monthly investment of 250$ for my children’s piano lessons, I am also putting a down payment on their ability to learn and to absorb new content. We are encouraging neurons and synapses to connect in areas of the brain that they may not have previously connected, if it weren’t for their knowledge of music. So we make this purchase, monthly piano lessons, knowing we are getting a really great deal for our children’s futures. The same can be said for me and my daughter’s Spanish tutor. We found a really good price by researching a bunch of online sites for tutors in our area and we now have weekly Spanish lessons with an amazing teacher. Both the piano and Spanish lessons are investments that have a finite end date, as well. When my son goes off to college ( in less than 2 years…how fast time flies!), We won’t be paying for his piano lessons anymore. Three years after that, my daughter will be off to college and then we won’t pay for her piano lessons either. I estimate that we will utilize our Spanish tutor for about another 1 and 1/2 years while we are both attempting to learn conversational Spanish.

So- that’s pretty much the trajectory of my FI journey up till now. I like to describe our family as financially resilient at present. No, we don’t have enough money to say FU to our bosses ( and ultimately, my husband may never fully retire if he can swing a “work from home remotely” type of gig), but we have enough money to feel safe and stable. We know exactly what our income is and exactly what our outlays will be. If life throws us a curveball, ( like my son having to have thoracic surgery this past year and a 3 day hospital stay) then I know we will be able to handle it. The fear that we experienced during the recession has been vanquished and we never want to be back in that situation again.