ESI Money

The stress of motherhood/childcare etc…was too much and my husband was increasingly traveling for work and at that point made a great deal more money than I. Obviously I don’t make this level of income so I have money periodically transferred from my Vanguard taxable account. In addition to our savings plan, his life insurance made it possible to me to live a comfortable life, help our daughters pay for college and become independent and productive people. As mentioned above, I am trying to narrow my interests and come up with a plan to enjoy retired life and be involved in a new career/volunteer work.

The best summary of the book is found early on in the following: I began to realize that there was a profound success secret hidden within that roller coaster: if we would just keep doing the things that got us from failure up to survival in the first place, the things we already know how to do and were already doing, they would eventually carry us all the way to success. One reason is that the difference between wealth and failure often comes down (in large part, not totally) to the small, simple, daily habits we build around our finances. The book summarizes much of this in the essential points from chapter 3: Simple daily disciplines—little productive actions, repeated consistently over time—add up to the difference between failure and success. The slight edge is relentless and cuts both ways: simple daily disciplines or simple errors in judgment, repeated consistently over time, make you or break you.

Back in 2000, I did move from a tech position to a management position within one company, which netted me a $20,000 increase in salary plus a 15% bonus plan, but I discovered I don’t like being in management, so I’m not sure how early (and at 52, I may be a bit old for the “retire early” label, at least as the FIRE folks define it), but over the past year, I’ve made a concerted effort to start saving more to achieve that. Hers was paid off in 1 year and mine will be paid off in one more year, about 3 years into a 6 year loan. Why would your current employer pay you another $10,000 or $20,000 a year when you are working there for less now?

Some people never get rich because of circumstances beyond their control conspire against them to keep them not rich (I won’t even say “poor”, simply “not rich” at this point). I may be rich compared to my neighbor but he’s rich compared to a guy who lives in a poor neighborhood but that guy is rich compared to a guy who lives in a city in Africa and he’s rich compared to someone in the slums of India. To end up with $532k at 65, assuming you start work at 22 and can invest at an 8% return, you would need to save/invest less than $1,650 a year for your 43 working years. So while not everyone can become rich (by definition) and not everyone can improve their net worth (circumstances will conspire against some to a level that no one could overcome), the vast majority of Americans can improve their net worth and get it to the point where it’s substantially higher than what they’d otherwise have.