(Posted here because Instagram doesn’t let me be long-winded enough)
Yesterday marked my two-year anniversary of becoming debt-free. Two years ago, I removed that monkey off my back and was overjoyed. I’m just as happy now to say that I’ve stayed debt-free ever since. In a weird twist of fate, yesterday also became the day I hit another major milestone. Up to this point, I’ve felt extremely awkward sharing actual numbers regarding my finances, despite talking incessantly about investing and such online. A lot of finance bloggers share their assets freely and others keep things private, even keeping their identities hidden for fear of judgment from friends or bosses. Hell, I’m not even a damn finance blogger! I’m too lazy/unfocused for that or any serious article-churning venture concentrating on one particular subject (Hence the state of this half-abandoned site).
I just like sharing the occasional thing to help inspire/motivate/educate friends if they’re interested. Because when you learn helpful shit, you want to share with the people you care about. So in the spirit of transparency, and to hopefully inspire (not gloat), I hit $200k yesterday. $200k net worth. Mind you, I didn’t go from 0 to 200,000 just in those last two debt-free years. I already had a decent amount building in my 401k for the last ten years. But I barely had a clue how the damn thing worked, just a vague notion that it was “important to save for retirement”. I put the bare minimum in throughout my twenties, all the while continuing to struggle with my no-budgeting, debt merry-go-round from hell, convinced that I would NEVER have enough to retire. And the only reason I saved what I did was because it was pulled from my pay before I got the check. If it dared hit my bank account, you best believe it would be SPENT. But after clawing my way to zero debt and sticking to it, I managed to grow my net worth three times as much in the last two years than I did in the last ten.
Furthermore, I didn’t actually save a whole $200,000! Plenty of that is investment growth. Which is why I harp on the importance of investing. If I just stuffed that extra cash in a savings account, it would have added up to a lot less (not to mention, taxed to hell). I ran some numbers yesterday and discovered that while I saved and invested plenty last year, I made an additional $27,617 in returns. That’s over $27k extra in one year for doing absolutely nothing, just for having the money invested in the total stock market instead of sitting in a bank account. True passive income.
I didn’t have any special insider information, I didn’t scour message boards and finance articles from “experts” predicting what hot stocks were about to skyrocket, and I didn’t sweat bullets nor develop an ulcer watching the news as stock prices yo-yo’d up and down because the winds changed, a mouse farted, or Elon Musk tweeted something wacky that day. I just continued to budget and stuck whatever extra I had at the end of every month into my total market fund (and into an S&P fund through my 401k which happens automatically before I get paid). Set it and forget it. Kinda like a savings account, but a savings account that actually GROWS.
I’m digressing. I just hope this paints a clearer picture as to why I’ve become passionate about this stuff. Am I obsessed with money? No! Frankly, I hate it. I hate that our lives are dictated by it. I wish we lived in a Star Trek future in which money was obsolete, we all freely had our basic necessities, and everyone simply worked for the betterment of mankind. Also, rad spaceships and transporters. But we’re not there yet. What I AM working toward is freedom. Freedom to spend the limited time I have with this life how I see fit. Freedom to pursue what matters to me regardless if it brings in a check. And freedom to joyfully and generously give to others in need without thinking twice. And investing (after mastering budgeting and living below your means) is a powerful tool to yank that goal line of financial independence much closer.
And by the way, investing is not the ONLY WAY to financial freedom. I enjoy it because it’s essentially the most powerful-yet-lazy path to wealth. Some people get into real estate, flipping houses and/or renting them for ongoing income. Some people start businesses. Some people don’t worry at all about financial independence because they’re already doing what they love and will do it forever! Regardless of your personal aspirations, it is still imperative to save. I think the pandemic solidified that to everyone if it wasn’t clear already. Life happens, the unexpected happens, and we all know how much housing and healthcare costs in this country… ☠
All that said, if you’re currently feeling helplessly trapped under your own debt mountain, if you’re feeling intimidated rather than invigorated, defeated rather than inspired… don’t worry! I know, I know, easier said than done. Despite how far I’ve come, there are still days when all I can focus on is how far I still have yet to go, how life is short and it feels like I’ll be in this grind forever, etc, etc. But that thinking is destructive. As corny and old-fashioned as it sounds, the usual advice for life’s lofty challenges rings true: One step at a time. Just focus on that one step in the right direction, that one little change you can make. Work on saving a little bit more this month, paying a little more off the credit card, saying yes to a couple hours of overtime for that little boost. Just try. Make it your mission. Try, stumble, get up and try again. You can do it. I believe in you.
We were meant to do more than just pay bills and die.