Choosing sufficiency even when the money is flowing out

My spouse was venting to me today about fighting losing battles over thousands of dollars with various adversaries – a rental car company that refuses to let us out a reservation we didn’t know we made, an incompetent insurance agent that locked us into a premium plan we didn’t want, and a landlord that won’t refund us any money for our shower being out of order for a month.

Well, I said to her, if it makes you feel any better, that money is peanuts compared to what we’ve lost in our investment portfolio over the past few weeks.

Only a few months ago, we had reached a major milestone – our second FI target, a figure that would have been able to sustain our family of four at a comfortable standard of  living provided we did some modest belt-tightening.

We were still reaching even higher for our third FI target, a figure that would have enabled us to continue living the way we are now with plenty of travel and occasional spending splurges. But in the past few weeks, the number at the top of my Personal Capital page has tumbled down to well below that second milestone. And God only knows where it will end…

Of course this is terribly painful to watch. But it hasn’t devastated me as much as it would have in an earlier life.

Partly, this is because I’ve known that the market was going to blow up at some point. History says that even a diversified stock/bond portfolio can experience a -40% drawdown in any given year. We’re nowhere near that yet, but it could very well happen.

Partly, this is because I’d like to think I’ve gotten older and wiser and I recognize that my Personal Capital number is of no value when compared to the real treasures of my life: my kids, my spouse, our health, our family and friends. I’m also aware of the fact that by sheer luck, I’ve been born into the right circumstances to put me in the top 0.14% (according to the Global Rich List) wealthiest people in the world. Even if I lost half of my wealth, I’d still be the top 0.26%. So I hardly deserve to even think “woe is me.”

And partly, this is because I’ve been actively trying to choose an attitude of sufficiency. Sufficiency is indeed a choice. Lynn Twist writes in her book “The Soul of Money”:

By sufficiency, I don’t mean a quantity of anything. Sufficiency isn’t two steps up from poverty or one step short of abundance. It isn’t a measure of barely enough or more than enough. Sufficiency isn’t an amount at all. It is an experience, a context we generate, a declaration, a knowing that there is enough, and that we are enough.

Sufficiency resides inside of each of us, and we can call it forward. It is a consciousness, an attention, an intentional choosing of the way we think about our circumstances.

Sufficiency is not a message about simplicity or about cutting back and lowering expectations. Sufficiency doesn’t mean we shouldn’t strive or aspire. Sufficiency is an act of generating, distinguishing, making known to ourselves the power and presence of our existing resources, and our inner resources. Sufficiency is a context we bring forth from within that reminds us that if we look around us and within ourselves, we will find what we need. There is always enough.

I suggest there is enough in nature, in human nature, and in the relationships we share with one another to have a prosperous, fulfilling life, no matter who you are or where you are in the spectrum of resources. I suggest that if you are willing to let go, let go of the chase to acquire or accumulate always more and let go of that way of perceiving the world, then you can take all that energy and attention and invest it in what you have. When you do that you will find unimagined treasures, and wealth of surprising and even stunning depth and diversity.

What a concept! And what a relief! Watching hundreds of thousands of dollars drain out of our nest egg is still painful, but I’m beginning to understand what Twist is talking about when she compares money to water. Money is meant to flow in and out of our lives. Even if we tried our damnedest, we can’t hold it in should the market forces go against us.  We also shouldn’t let it stagnate by trying so hard to protect it that we don’t spend any away. Our responsibility is to steward this force as best we can and use it to support our deepest values.

I’m also realizing that financial wealth is only one measure of success. Of course, I’ve always known that in my mind. Yet living in a society where money is the ultimate scorecard, it’s hard to know that in my heart. Watching my mom struggle to figure out her livelihood in her sixties has been an eyeopener. Financially, she’s set. But her livelihood, defined as a means to support a life of purpose, has never been more in question as she faces a potential divorce. Financial security is only a means, never an end.

On my bathroom mirror, I’ve taped a postcard that says “I have enough, I do enough, I am enough.” I know I won’t always feel that way, but I will declare sufficiency.

Why my last year of work before FI is turning out to be the hardest…and how I’m surviving it.

After a decade of working the career ladder, spending conscientiously, running the numbers, and daydreaming about the day I get to call it quits, I’m now one year away from reaching my financial independence goals.

It feels really good. But, it also makes for a serious case of Senioritis. I’ve spent the last six months in a state of extreme negativity towards my job. My job was always a means towards an end, but in the past I found satisfaction and even enjoyment in parts of it. Now, the work week is a source of dread. And instead of my stress-levels dissipating as I near the end, they’ve skyrocketed. Every incoming email or additional responsibility becomes yet another thing I have to get through before I get to move onto my “real” life.

It’d be natural to accept that this last year is just something I have to grind through. But I’ve decided that’s not good enough for me. First, a year is still a long time. I spend too many hours at my job to accept that there’s no option but to suffer through it. Second, I firmly believe happiness is a choice. It’s not my job itself that makes me suffer; it’s my attitude towards it. And whose to say that even after I remove my job from the equation, I won’t face other things in life that I wish I weren’t there?

Happiness comes from embracing reality as it is in this moment. So how I am embracing my current reality, which includes showing up at an office every day to a demanding job?

What I’m doing to not only survive, but thrive, in my last year of work:

  • Find “one thing” you want to accomplish in your career before you leave, and let everything else go. My one thing is to be a kick-ass manager, which means helping my team grow professionally and personally. At this point, delivering project X or achieving business goal Y really has no meaning to me. But people always matter, and I still have an opportunity to make a meaningful impact in my remaining year as their boss. The hard part is letting the rest go, because it WILL get uncomfortable if you’re used to always being on top of everything. But embrace the chaos. It’s the way to peace.
  • Change up your work situation so you can find new challenges to be excited about. I really couldn’t bear the thought of dragging myself through the same 1hr+ commute, to the same campus, and in the same business unit as I have been working for the last decade. So I took an international transfer to Zurich, Switzerland. On top of giving my family a whole new adventure and an opportunity to live in Europe, I also got a 30% bump in salary for cost of living adjustment. Awesome!
  • If you can, reduce your hours. It’s probably better financially to stay at your job and work part-time than quit prematurely because you just can’t take it anymore. Last month, I moved to 90% time which means I work from home Friday mornings and take off Friday afternoons. While it’s only a 10% reduction in time and pay, it’s made at least a 25% increase in my everyday happiness.
  • Start living your post-FI life now. After writing my “Ten Year Plan for a Remarkable Life,” I realised that my ideal life is actually quite simple and achievable today. So instead of daydreaming about everything I’m going to do with all my post-FI free time, I try to live that life now as much as possible. These include: Daily time for exercise and meditation. Luxurious breakfasts with the family. Reading and writing (including this blog) for pleasure. World travel (yes for Switzerland!).

Life is too short and unpredictable to defer your happiness to post-FI. What are you doing to find joy in your situation today?

January 2016 Financial Report Card

How’d we do in our first month against our 2016 budget goal to reduce spend by 30%+ compared to last year?

We went over budget by 11%, or $360. This was mainly due to an intentional overspend in gifts given and dining out (Baby ModelMinority is coming soon and we’re enjoying our last nights out), and a way-too-high heating bill that I’m going to be much more careful about.

Our net worth tanked along with the market, dropping -4.9%. While it hurts, I’m feeling relatively okay about it. We’ll stick to the plan and keep our money in the market in accordance with our asset allocation. I may even put some more in later, depending on how we’re progressing against our value path (more on how to use value-path investing to mitigate risk in another post).


January 2016 budget

We went over unintentionally on utilities, due to a $198 heating bill that is 2x(!) our average bill. I worked from home most of January and it was unseasonably cold, so the heat was kept on nearly all day. Oops, time to turn off the heat and put on a sweater!

In contrast, our dining over-spend was done consciously. Baby ModelMinority is due in early March, and we’re trying to get out with friends as much as possible before life gets a lot more complicated. February will probably also go over. Compared to the $795/mo. dining spend that we averaged in 2015 though, this is still an improvement.

Groceries was slightly over. We’ve been trying out Green Chef and Blue Apron, which are meal services that deliver fresh ingredients to your door that you cook yourself according to their easy-to-follow and delicious recipes. Clearly, this is not the cheapest way to cook at home. But it is still cheaper and healthier than eating out, which is what we’re trying to wean ourselves off of. After trying both services, we’re sticking with Green Chef. It’s slightly more expensive ($80/wk vs $59/wk for Blue Apron), but it’s organic, the portions are bigger, and the food is tastier.

Gifts was another conscious over-spend. We had a couple of baby showers and my brother’s big 30th birthday.

Clothing & Personal Care spend should go down after this month, as we still owed one last payment on the massage club subscription that has since been canceled.

Net Worth

January 2016 net worth

Ouch! This represents a $60K loss in January, and that’s painful to see. My asset allocation helped to mitigate some risk relative to the stock market, but it did not help that my company stock  tanked by 10% over the month.

Se la vie. Good thing my meditation practice and gratitude journal seems to be working in keeping me grounded. After all, money can always gained back. Time, on the other hand, can never be recovered. And with Baby ModelMinority due in a month, my remaining time as a dependent-free adult is truly precious!




Retiring by 2018: Our Journey to Financial Independence (with breaks in between)

Ever since a grueling stint in my early 20s as a junior banking analyst in which I watched my colleagues trade in their lifeblood for wealth and career progression, I’ve been determined to escape the same fate. My initial plan was to look for a job with a much more manageable work/life balance, avoid financial commitments that would keep me obligated to work (e.g. taking on a big mortgage or getting a MBA), and take periodic sabbaticals like my year-off in my mid-20’s to volunteer in Asia and again with my wife-to-be in our round-the-world trip from 2011-2012.

I’ve managed to stick to this plan for the last decade, and I was feeling pretty good about my gradually growing net worth thanks to a reasonable budget (at least compared to the standards of high-wage earners in the Silicon Valley). I figured that things would go like this for more-or-less the next two decades, until I could fully retire at the still-respectable age of 50: Put in my hours at a well-compensating 9-5, take a long sabbatical every 5 years, and live within a reasonable budget.

But then two years ago, my mind was blown when I read Extreme Early Retirement: A Philosophical and Practical Guide to Financial Independence.  While my plan is already quite radical to many in my circle who could never imagine departing from their careers to take a year off or retiring short of 65, it was not nearly radical enough once I got exposed to the ideas in the EER community.

The problem with my plan was that it still required me to keep holding a job in my current field in order to keep bringing in high wages. Now, my job isn’t bad by any standard – work/life balance is great, colleagues are lovely, there’s plenty of intellectual challenge, and it pays well – but it’s still a job. It means that’s 50 hours per week that I can’t spend with the people I love or undertake a hobby or explore a new career path that could be more fulfilling (but less compensating). It also means physically tying my family to a location, which is difficult for a wanderlust like me.

Hence, I’ve embarked on a path to full Financial Independence by the end of 2018, or age 37 for me and age 39 for my wife. Our net worth has gotten a huge boost in recent few years, thanks to a meaningful stock grant from my employer that then doubled in value. And since 2013 and my enlightenment in EER, we’ve also worked on reducing expenses by ~15% every year and increasing our savings rate. But our expenses are still way, way too high to sustain post-retirement, and our focus going forward will be to cut these even more radically.

ModelMinority’s Path to Financial Freedom

Financial independence plan

The red line are my actual expenses excluding tax, which will be dramatically lower after retirement given loss of income. While I’ll still have some kind of tax bill post-FI, it should be minimal if I play my cards right so I’m just taking taxes out of this equation for simplicity. The green line is my projected passive income, based on 3% withdrawal rate from net worth. This is more conservative than the typically accepted 4% safe withdrawal rate, but that’s what I feel comfortable with given how early we’re trying to retire. The blue line (which is graphed on a different axis) is our net worth.

The point of freedom is when the red and green line intersect, and my goal is to have them intersect at the black line which marks my goal expense budget and my goal passive income. This means I need to continue socking money away to build up my net worth, while decreasing my expenses further.


ModelMinority’s Annual Expenses

I’m embarrassed by these numbers, but I’m putting this out there to show our ongoing rehab from the high-spending life. 

Annual expenses

ModelMinority’s Budget Breakdown

Again, rather embarrassing. Highlighted line items are especially atrocious (how are we spending that much money to feed a family of two women?).


What we have to do between now and our 2018 FI goal: 

  • Reduce our annual spend to $60K. This means a 30%+ reduction in costs, compared to our spend for 2015. There are some big expenses that will naturally fall off, but we still have a long way to go when comparing our budget to that of other FIers. Also by 2018, we hope to be a family of four so we need to take into account added cost of the kiddos. Our plan for meeting the new aggressive budget:

Dining: This is honestly the most difficult bucket. We truly enjoy good food and even moreso when it’s enjoyed with good friends. Given that the end goal of this entire exercise isn’t to accumulate money, but rather to enjoy life more fully – we refuse to let money prohibit us from dining out with friends or on special occasions. However, what we can cut is all the mindless dining out we do because we failed to bring lunch to work or because we were too lazy to cook (which accounted for at least $1K in 2015). We’re also receiving a fancy espresso machine from a relative who is moving, so no more excuse to casually spend at Starbucks either! Our bottom line philosophy on this one: We will still dine out, but we’re committed to dining out mindfully.

Home/General: We’ve been fostering a dog for a friend this past year, and when the dog goes in January that will naturally reduce $1800 in costs. Also no dog means a cleaner house, so we’ll reduce housecleaning from 2x/mo. to 1x/mo., another $500 savings.

Clothing/Personal Care: We’re cutting our subscription to a massage club where we both have been getting monthly massages, which saves us $1157. I’m also on the hook to cut my personal care expenses in half ($250 savings), and we’ll cut our clothing budget from $350/mo. to $100/mo. Still very beefy compared to the truly frugal budgets I’ve seen from other bloggers, but a dramatic reduction from where we’ve been.

Gifts Given: In 2015 we went nuts with a lavish gift for my mom’s 60th birthday (a helicopter volcano tour in Hawaii) and numerous other gestures of financial generosity to our friends and family. This is another tricky one – we feel incredibly fortunate to be in the financial position that we’re in, and we don’t want to become Scrooge McDuck just to accumulate more wealth for ourselves. We’ll see how this one goes but we are committed to making more homemade gifts and gifting experiences rather than things, which will make the gifts we give more meaningful and less expensive.

  • Get our net worth to >$2M. Based on a 3% withdrawal, that’s how much we need to sustain $60K/year spend. Even with my wife planning to leave the workforce next year to care for our first kiddo (we’re expecting in March ’16), I feel like it’s possible to achieve this by our 2018 deadline assuming the market does not crash.
  • Live life to the fullest in the meantime! I could consider these next 3 years as a deferral of pleasure for the sake of future rewards. But life is too short, and the future is never certain (e.g. the market could crash, our health could be compromised). We need to enjoy the moment, because we’ll never have them again. To this end, I’m turning my maternity leave next spring into a 6-month mini-sabbatical which will include a RV roadtrip across North America and a trip to Mexico. In reality, we could get to FI much sooner by having my wife stay in the workforce and cutting my leave short – but we want to enjoy parenthood, and these first years will fly by only too quickly.


Learning to fight for my joy

Let me be real. I’ve been doing terribly in my attempt to rest. In large part, I can blame this on too many good things happening to me at once. In the past 30 days, I got a big promotion at my day job, the wife and I successfully went through phase one of our IVF fertility treatment, we signed our first distribution deal on our film (more on this passion project another time), and…drum roll…we just got invited to speak at a TED event next month. 

As I’m writing this all out, it’s no surprise that I’m thrilled and totally overwhelmed at the same time. I’ve been working towards this promotion for the past year and half, but now that I finally have it, I’m worried about whether or not I can actually live up to my new position as a Director. The success of the first phase of our fertility procedure is a HUGE relief, but I still can’t allow myself to hope for more. And the TED invitation is the biggest thing to have happened to this passion project, yet of course I’m panicking at the thought of the speech itself. What’s clear to me is that if you don’t intentionally take time to celebrate your successes, it’s all too easy to allow the pressure of achievement overshadow your joy. 

As a way to put some rigor and discipline around resting (yes I know it’s ironic, but that’s who I am), I adopted a few goals based on the 90-day action plan espoused by performance coach Todd Herman:

  •  Process goals: My goals here were to meditate 1x/day, go on a meditation retreat, and do something restful everyday. Meditation fell off the table for much of March and April, but I’ve been bringing it back here and there in the form walking meditation (typically post-dinner walks with the dog). I was hoping to go on an official meditation retreat, but the best I managed to schedule is a weekend getaway with some Buddhist friends which will include some scheduled meditation time. As for doing something restful everyday, I’ve been more mindful about this than ever, though execution is still haphazard. My most restful day was one that I had no choice over – after my fertility procedure, I was pretty drugged out and couldn’t do much other than play video games and eat ice cream for the rest of the day. And all guilt free – oh the bliss!
  • Performance goals: My goal here was to feel less guilty about taking a break. Emotional hang-ups don’t get cured overnight, and neither will my unhealthy preoccupation with staying productive. But, I have been reminding myself of all the reasons why rest is necessary for creativity and well-being. I’m doing a decent job of putting time limits around work so that I make sure to step away from my desk and do something rejuvenating every few hours.
  • Outcome goals: My goal here was to get restored and give myself space for insight and self-reflection. Hmmm…no, I can’t say I’m anywhere near feeling restored. In fact, it feels like my life is this roller coaster ride that looks like a lot of fun to everyone else, but really it’s all I can do to just hang on for dear life. For now, my main relief comes from cuddle time with my wife, quiet walks with the dog, and Trader Joe’s mini mint ice cream sandwiches.

Sometimes I also find relief by staring at the net worth number posted on my Personal Capital account to remind myself that the promised land of Financial Independence and infinite free time is only a few years away. But as much as the idea of the future brings me anticipatory joy, I also know that life is lived in these moments right now, no matter how harried and crazy they may feel. After all no one knows what the future may hold, and these may be my only moments.

So this weekend, I promised myself to take time out from the errands and obligatory social events to do something that I truly enjoy. I looked up a new hiking route just 20 minutes from my house, and I was delighted to discover a beautiful 8-mile mountain trail with postcard views of the rugged California coastline. So often, just making the small intention to enjoy the present moment can yield such surprising rewards.