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Tuesday, July 7, 2015

Lack of Value

Posted by Tim Stobbs on July 6, 2015

Perhaps the most common question I get about our financial situation is something along the lines of: how do you save so much?

Well to be honest saving 65% of your income gets easy after a while, so perhaps the easier way to answer the question is simply: I value what I’m saving for.

People often have good intentions with savings so about once a year around RRSP time they think a bit more about it and consider if they are saving enough.  Yet they fail to realize something critical….if you aren’t saving now that shows me you can have good intentions until the end of time and won’t save you a dime.

Look where you are spending your money now and they shows me what you value.  Do you value comfort over convenience?  So you might end up buying more comfortable furniture rather than meals out. Or the other way?  Perhaps you value your appearance over your substance?  Then maybe you buy a knock off designer purse rather than saving for a real one.  Either way isn’t right or wrong, but merely shows you what you value in life.

Me?  I value freedom over comfort, honesty over appearance and love over convenience.  Yes it sounds a little bohemian, but it is true.  These values drive my habits and thoughts more than a spreadsheet to live the life that I do.

Which is perhaps why I drive people I little nuts when they try to understand my success.  They get confused by my willingness to spend over $300 on some higher quality wine kits, but I will rarely buy a book even when I love them.  Or the fact we only have one car when it fact it is a bit of an inconvenience once in a while.  On the surface the issues can look odd, but mainly because the values the under pin them are likely different then your own.

For example, I dress moderately nice at work, but I refuse to wear a suit.  I hate wearing suits so even when I present the highest people in the company I still wear a only a tie, not a suit jacket.  I don’t care about appearance to others that much.  Or the fact I love good food, but rarely eat out…I like to cook instead.  I value quality over convenience.

This of course leads a person to consider who exactly they are.  What are you values?  Then after that painful process of self discovery you can then push yourself to align your spending with your values.  At this point something utter fantastic happens: life gets easy.

Pardon?!?

Yes, when you are spending with your values (rather than the values of others) the decisions you make become obvious.  You know what you value so the choice to save now or spend later is obvious to you.  You spend enough to be happy in life, but know that you wants will exceed your income on a permanent basis.  So once you have arranged your spending to align to your values, saving the remainder isn’t a chore or even an effort….it merely makes good sense.

The real difficulty I’ve found is combining your family values into something that everyone can life with.  So you learn the art of compromising….a LOT.  In my case, it means we spend much more on hot water than I would ever like to, but my wife gets to enjoy her luxury of very long hot showers.  Rather than debate it every day, I got her to agree to a lower flow shower head and now shut up about the water bill.

On the flip side she has put up with my odd little projects like collecting raspberries from the backyard all summer long into a bag in the freezer so I can make a little five bottle batch of raspberry wine from scratch.  It would have been much easier to just buy the bloody berries in the first place, but I wanted to make my wine from local ones.  So we agreed, we would save half the berries.  She rolled her eyes and did it anyway…then proceeded to roll her eyes again when she tasted the first bit of the wine.  It was one of my best yet and now I’m saving berries all over again this summer.

The real trick to combining values is to know the core ones are in agreement. They don’t have to be the same, but enough alike for you to both be happy with the spending that you do.  After nearly 15 years of marriage my wife and I have that down to an art form, which is reason we stay married.

So what do you value?  Does your spending align with it?

The Unknown Road

Posted by Tim Stobbs on July 3, 2015

So I finally started down an unknown road at work, figuratively speaking.  During my mid-year performance review with my boss I planted an idea with respect to my career goals.  I actually wrote on the form for near term goal (1 to 3 years): retirement or reduced hours to approximately 50%.  Then I submitted it to my boss to see if any fireworks ensued.

Oddly enough, the entire conversation was oddly civil and straight forward.  From my boss’s point of view he wants to keep me around as long as possible, so if we need to look into options to make that happen he is at least willing to explore them and ask how it could potentially work.  If we can find a compromise that works for both of us, why not look into it.

I made it clear I don’t expect changes immediately (after all I’m still working on building my savings), but I would like to know what options may exist.  Currently we are exploring a few different ways to make something like this happen including:

  1. Cut back to half time.  This would be using the same policy that let me drop down to 90% currently.  The issue here is figuring out how picks up some of the work that I’m no longer doing.
  2. Cut back time and reuse the budget to pick up another employee.  This one is a bit trickier to pull off and requires some help from HR on what is possible and what isn’t.  The idea would be to free up enough budget from my current position to allow another person to come on board and pick up the remaining work.  In effect splitting the budget from my job into two.
  3. Shift to a contractor role.  I had thought of this idea myself a while back but somewhat discounted the idea as the work involved to setup and obtain clients while still working.  This way would be easier as I would start with one client right off the bat, which would make the shift easier.  The downside of course if contractor budgets are often the first things to get squeezed out during budget cut backs.  So my income would be more unstable and there is a risk of me being hung out to dry.

Of course I’m not sure where this is going to end up, but I figured that it would be worth the time to at least explore semi-retirement with my current workplace.  Oddly enough I sort of discounted this idea in the first place as I thought they would shoot it down at once, but the reaction has been more hopeful than I would have guessed.

Anyways, worse case scenario it doesn’t come to anything, I finish my savings and just leave in about two more years.  Best case would be dropping down to 50% by next year and staying in semi-retirement mode for a three or more years until I get enough savings to leave entirely or just get sick of the entire thing and pull the plug.

Has anyone else had much like convincing their employer to allow you to go part time?  Any tips or ideas?

Down the Rabbit Hole: Writing New Book

Posted by Tim Stobbs on June 24, 2015

Holy crap?!?! I didn’t realize I haven’t posted here for so long.  Sorry about that folks.  I’m currently down the rabbit hole of writing a new non-fiction book.  After struggling for a while, I finally got a workable angle on it and I’m roughly half finished (~38,000 words so far).  So yes, you get less posts in the short run as I get consumed by my project.

Working title is: Break the System.  So while I do touch on some similar topics as my first book, Free at 45, of financial independence and happiness, I widen the scope of this one considerably to bridging any large scale change to your life.  So weather it be shifting careers, changing your hobbies or following your crazy dream of your ideal life or even just retiring at 65, I want to help you make the change with this book.  You can see why finding a workable angle has been a problem for me. ;)

Just so you know, my writing process tends to go like this…lose myself brain dumping ideas, and writing parts of chapters for several weeks until I get close to a workable first draft.  Then I shift to edit mode and hack the crap out the first draft and cut back to the core ideas/chapters I want to include in the book.  For example, in Free at 45, I cut a full third of the chapters from the first draft (30 chapters) to the second draft (20 chapters).  I expect something similar this time around as I cut back on duplication or too much similarity between chapters and hack out those ones that don’t support the book that well.  Then after that I clean up the book a bit more I’ll be sharing it with a few people for some beta reader feedback.

I’ll keep you all in the loop as the book moves along and I’ll try to remember to actually write the odd post here as well.  Have a great summer.

Tim