I’ve been reading about “personal finance” on the internet for quite some time now, and for most of that time, I’ve felt like I’ve been doing pretty well. I’m not drowning in credit card or student loan debt. I don’t spend more than I earn. I make a decent salary.
But I’ve come to realize that despite working in the Silicon Valley software industry for years now, I have very little of substance to show for it. My house is pretty nice, but I don’t really own more than about 5% of it. My bank accounts aren’t completely empty, but without raiding my IRA, I really could only support myself for a month or two if I lost my job. Even if I did raid the IRA, it’d give me less than a year. I have brand new cars and some really impressive vacation photos, though.
After seeing it mentioned many times, I finally spent some time reading through Mr. Money Mustache’s site and it has changed my entire outlook. I realize that what I really want is security and freedom – the kind you can only get when you know that even if you quit your job tomorrow, you’d still be able to provide food and shelter for your family. With enough money in the bank, you are secure in case someone else decides they no longer benefit from writing you regular paychecks, and you’re truly free to tell anyone “no” and go do whatever you like — even if it doesn’t pay as well, or pay at all. Starting now, my primary goal is to make that possible.
The number $30,000 is pretty arbitrary. I picked it because it seemed like a realistic goal to reach in a year. Thirty thousand dollars in one year on a software engineer’s salary, how hard can that be, right?
So, here’s steps one and two, which I’m going to work on simultaneously:
- $30,000 in liquid assets (cash/stocks/whatever).
- No more than $2,000/month in non-housing expenses (I think to start, I’m not including health care costs, either, I can change this goal whenever I want).
$30,000 is only a start. Once I hit that, I should be up to speed, and then we can *really* cover some distance. This site will track my progress, and the changes my family and I make in our lives to get there.