LateFIRE Chapter 2: Mind the GAP and KISS Me

Lin Words To Live By 2 Comments

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Hi again! Welcome to stop #2 on my LateFIRE journey. This is the post wherein are contained steps 1 – 10, optimally prioritized for a meteoric rise to financial independence, achievable – despite starting three decades late – at sound-barrier-busting speed via silver bullets, magical strategic mistake-proof moves of unmitigated brilliance, and pixie dust. Do this and become a gazillionaire just like me, overnight! Easy! So excited to share!

Um…yeah…about that…

Although I wish it could be different (because I just love a good dose of silver bullets and pixie dust sprinkles), I am just fresh outta magic.

Darn it all.

Refresher: I looked up one day, dearly beloved, many years into this thing called life [PRINCE: yes always]


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and found myself a bit…well, to be frank, kinda screwed in the finance department of things. I humbly resolved to change.

Oy.  Without a fairy wand, we are going to be forced to use actual tools instead. Cold shower, real world actions. We are going to Mind the Gap, and get KISSed.

“Watch Your Step” in a cute British accent

What GAP Shall We Mind?

The all-important gap between income and outgo! The one into which we need to insert our grubby little fingers and widen painfully. Like a prepubescent’s jaw expander cranked up to 10, we need to make a hella lot of space so that we can have maximum funds available to stoke our FIRE. Momentum consists of diverting cash-ola from stupid things, wasteful things (which, admittedly, are sometimes fun things), to some boringly exciting things called investments, which are going to make our future today-plus-years self super happy.

We need to DO different, because we WANT different.

(My husband and I own our own business, so many of our action items relate to that.)

Expense Side of the Equation: What We Cut

  1. Aspirational spending.

a. Buh-bye Intuit subscription to Quick Books. I never learned it, I don’t want to spend the time learning it, and paying for it every month will not get me closer to learning it, or to using it. I’ll hire a bookkeeper for our business instead (soon, but not now; we will limp along for now doing as we do). Savings: $60/month

b. ActivCampaign, you are leaving with Intuit. Cause we never used you for the grand email campaigns we envisioned for our business. Plus, Mail Chimp is free, and adequate for our needs. It’s not you, it’s me. We’re done. Just go. Savings: $29/month

  1. Crack

a. Cable TV: pay to have brain-shrinking time-wasting trash content and COMMERCIALS main-lined into our home??? Nah. It’s over. Swapped in Netflix instead. Hubs goes to friend’s house to watch special sports games and brings something to eat or drink to say “thanks.” Savings: $111.01/month

b. Hello, my name is Lin and I am a zulily-aholic. You don’t know what zulily is? Good. Do not sign up for daily alerts to any flash-sales-daily-specials site. Especially if you have grandchildren who “need” things. They do not need things. And neither do you. This is a cunning and powerful enemy, dear one; stay out of these scary woods. Savings: $172/month (based on prior 12 months…shhh…I know…)

  1. Tweedle Dee Dumb

a. Got rid of Paychex and implemented Gusto for payroll services. How did I not know about this? Savings: $167/month

b. Solicited bid and switched General Liability (office) insurance. Upped deductible from $250 to $1000. Savings: $21/month.

Total monthly savings from cutting expenses: $560.01

Income Side of the Equation: What We Added

  1. Side Hustle

a. Freelance writing/editing gig. Gain: $500/month

  1. Sublease

a. Rented out Room #1 of our office full-time. Gain: $600/month

b. Rented out Room #2 of our office part-time. Gain: $365/month

c. Raised our prices, approximately 5% (not done in several years). Gain: TBD

Total monthly gain from added income streams: $1465

Total GAP Created So Far: $2025.01 a month. A month!

[GYFG Here: Great job, Lin! This reminds me of the steps Mrs. GYFG and I took back in 2014. This goes to show you that the GAP is relevant in all financial journeys – regardless of age. You can’t get around it.]

Whoa. I had to total that three times. Forest for the trees moment here. Now of course this data is not exact, as we will have to pay taxes on the income sources, and we did not stop buying things as needed (and wanted) for body and home and grandbabies, some of which I had been purchasing on zulily, but the unconscious spending has ended. The $560 I was spending a month that was painless to cut…yikes. Sobering.

We have definitely created a gap to be proud of.

I have said that I feel about 30 years late in the FIRE game. What would 30 years of a gap like this have equaled? $729,003.60. And that’s before counting any interest to have been earned. Yep…almost three-fourths of a MILLION bucks, all things being equal, which of course they are not, and were not. Nonetheless, things would have been different, that’s for sure. The flaming dance of shame might have been a happy dance instead.

[GYFG Here: To further punctuate the point Lin made, that $729,003.50 GAP is before compounding. If compounding that savings at 8% for three decades, you would be looking at a figure close to $3,000,000.]

Enough of that looking back, my friend! Shall we swig the bitter brew of regret on the deck of Ship Yesterday, or shall we quaff the effervescent elixir of celebration and sail into Tomorrow Land? The latter please – get me a double!

 

Wizardry of the Magic KISS

Now I have to admit that I lied just a tad – there actually is a bit of magic afoot! How shall we ensure that our lovely gap does not get sucked up into our outgo again, a la the creeping crud called Lifestyle Inflation, wherein expenditures rise to meet income?

Walk across the rice paper, Grasshopper, and KISS me. Watch closely now…

When I was cleaning out our home office (shameful site of disorganization and chaos), I came across statements from two inactive accounts at the bank where we do our daily business and personal banking: a brokerage account, and a ROTH retirement account. I had no recollection of either of these! Together they contained approximately $5440.

Just for fun, I decided to start throwing money into them. I didn’t overanalyze allocation or fees; I just set up automatic transfers into them from our checking account (one weekly, one monthly). Plus, over time (because I realized that we were not even feeling these transfers), I upped the amounts saved.

Guess what? We will end 2018 with approximately $16,700 in just these two accounts. That is more than triple what we began with when I rediscovered these accounts. I love triple, don’t you?

Triple is YUMMY!

In addition, I initiated automatic transfers on a weekly basis into our business savings and into our personal savings, and also upped those amounts over time. When the Tax Man knocketh for his quarterly due, it is now a painless process from the business savings, cause I’m ready, baby! Personal savings enables us to be ready for emergencies, home upkeep needs, our beloved dog’s expensive last three months of life, the celebration that was our youngest daughter’s college graduation, and so on, without scrambling. Both of these accounts continue to grow beyond withdrawals.

“But LateFIRE,” you ask. “Where is the magic you promised? Where are the kisses?”

Hidden in the process, attentive one. Hidden in the beautiful words AUTOMATIC TRANSFER. I “keep it super simple” (KISS) by making the process automatic. That money gets taken out without a single action from me. Every week! Every month! I don’t have to do a ding-dang thing, make any more decisions (each a potential offramp from the highway of savings) except to ratchet up the amounts, and those cute little accounts just keep getting fatter.

“Where focus goes, energy flows.” (Thanks, Tony Robbins!) Aside from the actual money, the attention I am paying to our finances is generating energy that compounds upon itself, increasing daily. Each automatic transfer is like a promise kept to myself, which builds good habits, strength and confidence, and these also compound.  Plus, I really think our dollars are much happier to have more friends to play with…and happy dollars grow and grow!

Perhaps this is absolutely elementary to everyone reading these words. GYFG readers are a pretty sophisticated lot, after all. But me? Not so much. I still really don’t know s*&t about investments, fees, funds, etc, but hey – who cares? I’m learning. The day is quickly coming when I pivot these funds (and more) into better accounts that I have been learning about. But scoreboard, baby: I tripled our freaking monaaayyyy!

Am I excited to have wasted a lot of years not taking these “elementary” steps? Uh no. And am I excited to blab about my prior lack of knowledge and initiative to the whole dang blogosphere? Well, of course I’d prefer to be sitting at the Big Kids table telling you all about my mad skills generating figures with lots more commas.

But I cannot. Those years are gone. Today is what I have, and today is where I push away the cold stale plate of shame and paralysis, and instead, take a sweet delicious bite out of action. Today I am pretty dang proud of these baby steps, and even though I have a funny tight feeling in my tummy telling alla anybody about it, I still feel like crowing from the roof like a proud rooster greeting a new day dawning.

me..kinda proud

In Conclusion

Mind the GAP. Set up your own sweet KISS system. Perhaps you’ll find more than a few coins under your own couch cushions of bad habits and inattention. I hope you smarty pants consider sharing in the comments the GAPs and KISSes of your own financial journeys; I continue to learn from each of you!

– Lin



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Comments 2

  1. Very fun read! Lin, your lighthearted writing style is refreshing in the PF space. Thank you for the pics that keep it enjoyable, too. Am liking the specific progress in areas that you share, and hope your success in those areas continues. I’ve always wondered about subletting and the potential difficulties. If you ever have some stories about challenges with this, your new chosen software, etc. would love to hear them.

    Thanks for the hard work you do editing and formatting on the GYFG blog, this is one of my favorites! Continued success and thanks for sharing your journey!

    1. Post
      Author

      Thank you for your encouraging words, JayCeezy! I really appreciate your taking the time to comment. In this process of making positive changes, it means a lot. I’m very happy to be part of GYFG; Dom is an inspiration and coach, the only one to be credited for the amazing blog he has put out in the world, but I am really excited to be along for the ride! He is at least the Rock Star portrayed here on the blog, plus a truly genuine and generous person. So young, so wise…

      Subletting has been great. Any problems we have encountered have come down to two things: lack of clear communication (especially up front) and/or personality issues. We have a somewhat open office, with supplies and documents unavoidably exposed, so trust must established early. We call personal references, are super clear (black and white) about what areas and office machines, etc, are included or not, make sure that the applicant can actually afford the rent (get that deposit), and never assume. I’ve learned to offer less access and “goodies” up front, and loosen up over time. Plus, I strive to treat the subletters as the appreciated customers they are in all communications, and at the holidays. Once they are in, and a good fit, they are extremely valuable, enriching our business as well as our bottom line! Overall, it has been a positive experience that enables us to print money out of unused space and time. [My husband just walked by and I asked him for his thoughts on this. Man of few words: “Honesty.”]

      I will let you know about the software…still unfolding…

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