The main rule of this book is to be frugal. Frugal people generally drive Ford 150's, work with blue collar workers and do not drive luxury cars.
Posted on 11/07/2022 6:36:01 PM PST by nickcarraway
Tanner Firl doesn’t understand why anyone would need a budget.
“It never made sense to me,” the 29-year-old tells CNBC Make It. “Most people have a problem not spending money. We have almost the opposite problem.”
Firl and his wife, Isabel, who live in Minneapolis, are practically allergic to spending money on anything they don’t see as a necessity, a shared attitude that plays into the couple’s financial strategy.
Firl is part of the FIRE — short for financial independence, retire early — movement, and specifically adheres to a strategy known as “lean” FIRE. Practitioners of this version of FIRE look to supercharge their savings rate by cutting out as many extraneous expenses as possible.
So far, Firl stashed away roughly $380,000 and hopes to save at least $625,000 to fund an early retirement at age 35. A portfolio of that size would provide his family $25,000 per year in annual income.
Currently, Firl is the primary breadwinner for his family, which also includes his 1-year-old son, Teddy, and three cats. He earns $135,000 a year as a software engineer, and about half of each paycheck goes toward food and living expenses every month. He invests the rest.
Here’s how Firl says his super-saver lifestyle is setting him up for early retirement.
Pursuing FIRE from an early age: ‘It all seemed to make a lot of sense to me’ Growing up as one of six kids in Rochester, Minnesota, Firl learned about the importance of stretching a dollar. Family vacations meant packing into the van to visit family members or spend time at free-to-enter national parks or monuments. Lunch breaks typically meant pulling over for roadside PB&Js.
The Firl family wasn’t hurting for money. They just wanted their kids to learn to work for the things they valued. “Whenever we wanted something as a kid growing up, we would have to spend our own money to buy it or wait until a birthday or Christmas,” Firl says.
As a result, Firl followed his siblings’ lead and got a paper route as a school-age child and worked all the way through high school. By the time he got to college, he’d discovered a blog written by Peter Adeney, also known Mr. Money Mustache, one of the foremost figures in the FIRE movement. Something instantly resonated.
“It all seemed to make a lot of sense to me: basically just spending as little as you can so you can live your life as fully as you want,” says Firl.
Firl graduated from the University of Minnesota in 2015 with a degree in mathematics and scored a job at the National Security Agency that paid an annual salary of about $66,000 a year. That same year, he and Isabel, who had been high school sweethearts, got married.
Within two and a half years, the couple had saved enough to put a down payment on a house in Minneapolis, where they lived upstairs and covered mortgage payments by renting out the basement on Airbnb.
The frugal path to FIRE The Firls purchased their second home for $185,000 in 2018 and sold their first home not long after when managing it as a rental became cumbersome. They put up the basement in their new home for short-term rentals, but had to abandon that plan when Teddy arrived in 2021. The house’s floor plan is just 675 square feet — close quarters for a couple of new parents, one of whom intermittently works from home.
As Firl’s salary has risen to the $135,000 he currently makes, the couple have resisted “lifestyle creep” and maintained their commitment to frugality. If the family needs something, they hunt for it for free on online marketplaces such as Craigslist.
“We also have garnered a reputation with our friends and family as being very frugal and thrifty,” Firl says. “We do end up getting a lot of free things just because a family member will see something free on the side of the road, and they’ll think that we might we might like it.”
Additionally, the couple doesn’t have to shell out much for any of their hobbies. Tanner is an avid runner, podcast listener and board game player, while Isabel writes and runs a Twitch stream. They both enjoy playing video games in the evenings.
Plus, the couple have whittled their food and pet supply budget down to $200 a month thanks to frequenting a food waste non-profit to cover groceries.
“For 25 bucks a bundle — a bundle is about half a carload — they just give you a ton of food and then you drive off and you have probably half your groceries for the month, if not more, depending on how much you want,” Firl says.
Looking forward to a financially independent future Looking to the future, Firl acknowledges that aiming to live off $25,000 a year may not seem like enough. But he’s confident they can make it work.
The figure assumes the house will be completely paid off by then (he currently pays about $1,100 a month in mortgage payments, homeowners insurance and property tax) and that he’d theoretically qualify for deeply discounted health insurance through the state of Minnesota.
Still, given how his life has changed in the past few years, Firl understands that he’ll have to be flexible when it comes to the exact dollar amount and timing of his early retirement. If he and Isabel decide to have more children and move to a bigger home, for instance, that might change his calculus.
When Firl does hit $625,000 in savings, he doesn’t necessarily plan to switch to a life of leisure. “Retiring … is not about sitting on your couch watching Netflix all day or going to the beach and getting a really nice suntan,” he says. “It’s about getting to do whatever you want in life.”
For Firl, that means having the power to walk away from a job that isn’t bringing him fulfillment or taking a gig that he’s more passionate about, even if it pays less money.
Ultimately, no matter what his retirement looks like, you can be pretty certain of one thing: The frugality isn’t going away.
“In life there’s no short supply of experiences, and most experiences that will make you happy are probably free or extremely cheap,” he says.
To each his own.
The nice thing about real estate you can keep your own hours.
I’m used to a turn key style business, where business might be open during set hours but I can still do my own thing as long as I remain on site.
For me, it would be like living at home because I would have all the amenities in the back of home, like a fridge and stove and whatever else.
I retired 5 years ago after making the decision early in life to pay off my house FIRST. The secret my father-in-law revealed to me was to “stay out of debt”. The house was the big nut, but after that I found out that so much money was spent on things I could do and repairs I could make. As a result of not being afraid to try anything myself...and watching hundreds of YouTube DIY videos, I would estimate that I can repair 85% of anything that goes wrong with my house or car. All those avoided expenditures turn into money that stays in my investment accounts, earning more money.
Also, if it’s busy enough than you can hire somebody to run the business while you just do the accounting.
“ So far, Firl stashed away roughly $380,000 and hopes to save at least $625,000 to fund an early retirement at age 35. A portfolio of that size would provide his family $25,000 per year in annual income.”
$25K is tough now.
Then in 10 or 20 years, after inflation, it will be Impossible.
Except Biden years are like dog years in that scenario.
He might try calling that “being frugal”, but I’d call it freeloading. Not much different than if he and his family squatted in someone else’s property, and he boasted about how his “frugality” was saving them on housing expenses.
This guy is delusional about his prospects of retiring at 35 on the bankroll he’s proposing. Even retiring at a normal retirement age, it is essential to figure out what you need to live the lifestyle you expect, then take that number and double or triple it, minimum. So many forget what inflation (just normal 2 or 3% inflation, not even Biden-level) does to the cost of living over time. And most people will live longer than they tend to estimate as well, so that’s an additional factor.
One can work hard, not gamble, not take big vacations, try to invest wisely, and have a family member (including a sibling, or member of a sibling’s family) that got hit with a terrible hardship, and one then realizes why he was blessed with prosperity.
When you have your health, surviving is not a day to day challenge.
Once his house is paid off, $25K should be plenty to live on, especially if he has a large savings to fall back on. But, he'd better have a good health insurance plan.
I made ends meet for my family of 4 on $33K, and the mortgage was 60% of my income. Life wasn't exactly glamorous then. But, if I'd had no mortgage, $25K would've been easy to live on.
Yep
I was blessed greatly while my father lived with me
Yes
Some are rather arrogant thinking it couldn’t possibly happen to THEM
(They can’t imagine it. It has to happen to them for them to understand it.)
And that is it in a nutshell.
Cant fully grasp why people want to retire that young (age 35). These should be the peak productive years of one’s career and earnings. I’m 66 now and looking back I just cant fathom being retired at age 35 or even 45. Maybe take a sabbatical year off but not full retirement. Just my own opinion.
He earns $135,000 a year as a software engineer, and about half of each paycheck goes toward food and living expenses every month.
He is spending half? He needs to cut back.
Plus gain about 30lbs and stop running.
Food waste non-profit sounds like enhanced dumpster diving.
No job is perfect but if you have one that makes it easy to go to bed early and easy to wake up early why quit?
I’m in my 70’s and plan to retire at the end of the year.
I’m not exactly looking forward to it.
I told him to sell his 3000 sqft house in CDA, ID for 1.3mm last March. Now its around 900,000. Told him to move to rural AR where they can get a 3000 sq foot house for <$300,000.00. <200 if on well/septic.
I'd help him save the money since I'm a banker/broker but he just hated not being able to spend money he earned. Oh yeah, he's the type that will not get a will or trust.
Told my wife, NO funds from us when he asks. None. We have small kids.
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