Minimalism and FIRE

Minimalism and FIRE

I just want no things.

 

This is a somewhat new feeling to me. I always have wanted something. Whether it be an extra candy bar when waiting in line at the store as a child, or a new toy as a way too old adult – I have always had pangs and cravings of desire. I never was one to spend all that much but I certainly could always find some dumb thing that I wanted at the time.

 

As I age I have come to despise possessions. The less things I can own the better. The problem lies in the fact that I slowly came to realize that I thought I could buy my way to happiness.

If only I had the gaming system my friend has, I will be happy.

If only I could buy this item from my favorite cultural group, I will be happy.

I was kidding myself. Nothing external will ever bring internal happiness for any lasting time. I think, like many do, that consumerism has become a massive danger to not only personal happiness but likely the planet as well. Three or four moments really leap out at me as I view my progression along this path. I am sure more will come along but these are the main signposts I can currently point at that lead me here. 

 

Lost Something?

The first time I realized that material possessions may not be the best route was when I tried to order my first ever apartment cleaning. Utilizing the new hip app Handy, I scheduled a cleaning for a Saturday afternoon while I was at work so I would be out of the way. Got the $80 introductory rate, showed her I wanted her to focus on communal areas, and off I went to work. Not twenty minutes after arriving at my desk, I get a phone call; ” we have a problem.” While bringing her supplies out to the street, she managed to lock not only herself, but my cat, outside of the apartment. At the time I lived on a legit highway, and she was telling me that she had to go to her next appointment.

I freaked out, telling her in no uncertain terms to not leave my cat and jumped back on the train. In my scattered rush to get back home, I proceeded to leave my gym bag on the train, stocked with $700- $1000 in electronics. Gone in one dumb moment. A Kindle, a Nintendo 3DS, random electronics, some of my favorite games, clothing, shoes. So many gadgets lost and yet I truly felt an ambivalence, if I couldn’t have them I certainly didn’t want to compound the situation by crying about them. My cat was completely fine, and that was all I remotely cared about. My attachment to a few dumb lost items, expensive as they may be, couldn’t come close to the feeling of relief that my best friend of years was safe and sound. This can also be a anecdote as to why one should do your own housework!

 

Oculus Failure

Last year around this time I was flying high. I was succeeding at work, being top dog every month for multiple quarters. The money was flowing well. It was around this time that I started to listen to my friends the Jones’s. “You deserve to enjoy that money,” they whispered. “Buy something for yourself, enjoy your youth.” To be clear, I always enjoy myself. I have a very good handle on my happiness levels, splurging is not going to get me there. However I certainly had some spare cash just sitting there, and the Oculus Rift had just been released. As a childhood nerd, virtual reality is my Mecca, I have been waiting to worship for my entire life. Now as an adult I can finally indulge!

I spent $2,100 on the electronics and a further $500 for a solid desk setup to organize everything. I played hours of virtual reality for the first few weeks, trying any and everything it had to offer. This was the early days so there were few costly games, and I was able to get free trials to many now paid apps due to being an early adopter. It is now almost one year later and I have had the goggles on maybe once in the last two months. It turns out, that the real world makes me happy enough. I do not need to close myself off in a mainly solo experience with huge goggles on my face. I do enjoy showing any friends that visit what the future will entail, but I rarely have the time or inclination to put them on myself. I had waited my entire life to play in Virtual Reality, spent an excessive amount of money, and am not measurably happier for it.

 

Stoicism

I recently read the highly recommended, Guide to the Good Life. This is a book that goes in depth about the ancient life philosophy of Stoicism and is a great primer for living a life in accordance with its principles.

Stoicism is a mental model for viewing the world, and the tenets allow you to live a life that is most in accordance with a peaceful one. I never was one to take random life rules as wrote, but when I found how much similarity there was with this mindset and my own, I was hooked. By nature, stoicism and minimalism go hand in hand, and many of the principles of the FIRE movement (self sufficiency, DIY skills, planning for the negative)are paramount as well.

While I grew up Roman Catholic, it never really stuck. I went to church for years with family, but my personal studies and exploration led me to too many logical inconsistencies to live my life like. After hearing about this book and reading much of the source material, I can see that this is a much better fit mentally. This is a philosophy that I can foresee a huge number of people will slowly embrace. They may not label themselves as a stoic rather than whatever religion they might be, but the principles will convert many due to their simple and effective message.

 

Financial Tracking

This is my latest and favoritest. While this may be super simple to some people, I didn’t track anything until this past year. About 5 months ago I started to get everything together and finally have a strong semblance of my financials and where they stand. While I used to religiously check Mint and Personal Capital, the spending was not being understood as much as it should. I could see the money going, but abstract categories that were auto tracked just was not doing it. I needed to personally sit down and do all the numbers by hand. The final stage of manually inputting really throws things into a stark perspective – do I really place enough value in this purchase for me to commit a whole line item to it? This is a silly question, but I find that this check alone causes me to accumulate so much less garbage – not for being cheap, but on a new strange value/effort scale that prides itself on less things and transactions.

 

So while I have an Amazon wish list still, it’s mostly junk. I could splurge and add more peripherals to my computer or buy more frivolous hangout clothing, but I don’t. I really just do not need any more things. Having food, clothes, and shelter – I want to learn to be happier with less. Not only is that the state of things for a majority of the world, but I also just believe that is a path to true happiness. I wish all of you the best luck in your own personal development journey, and if you are having a rough go of it, maybe try instituting some minimalism. It may change your life like it did mine !

FIRE Too Soon

Learning about the Viability of Fire Too Early

And sprinting towards an unknown future

 

I find myself fortunate in that I have the freedom to constantly change my mind how I feel about my life and my relationship with work and money. While not financially independent yet, my savings allows me to have some level of FU mentality in that at this level of lifestyle I can be more picky about how I will go about achieving the next few slices of independence. I don’t have to take any deadbeat work that would make me saw my arm off in boredom.

 

I was taught about FIRE through a cousin of mine who showed me a bunch of great books within a year or two of graduating college. I was already the broke kid at a rich school, there wasn’t much I could take away at that point. Prior to that I really had never thought about money all that much. I am thankful that everything was provided for me to be sure, but that does remove some of the hustle I could have had. Not that I had everything I ever asked for – I still worked plenty, but I just never wanted anything of much value. I suck at math and I was generally uninterested in thinking about the future, so I slowly ramped up in the community till I have now been tracking my financials religiously for 4 months.

It sucks.

 

Learning about FIRE too early is deadly. You will see people asking questions along the lines of – ” if I stay in my dead end job and save 70% of gross for the next 13 years with a 2% yearly raise I will be FIRE at 48!”

Kill me.

Life is long and weird shit happens. Who in their right mind thinks this way? I don’t consider myself a particularly flighty person by any sense of the word but still how can you pretend to plan out the next year effectively much less the next ten? I do not know if I want to be in the same country next year. I don’t know if I want to be doing the same task for the next 5 or 6. I have never had a single step in my life where things went according to plan, so why would saving and working fall in line all of a sudden?

 

If I had learned about this stuff even earlier I would be tearing my hair out counting down the minutes of my life from as young as 21. I was a late bloomer to many things in life and I think that turned out to be a blessing. Having an over emphasis on financial focus and retiring would effect the psyche and choices of one so young. Oh prefer instead to slowly learn as I did, that way I can appreciate how lucky I am to have experienced all sides of the coin. I have spent. I have saved. I have bought frivolous expenses. I have lived on ramen. Having been at each level I think places me on more even footing when looking and viewing the world.

 

Now obviously it doesn’t suck entirely – I am being facetious. I am purely focusing on the over emphasis that your mind will place on this stuff once your plan has crystallized in mind. That will unfortunately always invariably happen as once you set up the financial plan – there is frankly not much to do but sit and wait. The way people write online you’d think they trudge back and forth slowly staring at the numbers tick by. I can’t do that. I live in New York city and I know way too many people that have died before 35. I work hard for both my future and my current self. So while I focus on the big wins – most would be appalled at the lavishness of some aspects of my life.

 

Hoarding your money and watching your life on a spreadsheet is bad. Live it instead. Set it, forget it, and just live within your mental means. Automated investing is all that is needed. If you set up your automation correctly and then learn to appreciate all the less expensive things in life you will never want for anything.

FIRE: Paper vs Digital Reading?

FIRE: Paper vs Digital Reading?

My first and greatest love in life has always been reading a good book. Starting from a young age I would delve deep into a novel for hours at a time, often disregarding those around me to an extreme level. My parents and grandparents indulged me to no small extent and I steadily read my worries away for my entire childhood. I had little to no friends due to this up until middle school, at which point I sacrificed some small amount of reading time for video gaming, which allowed me to relate to other kids much more easily.

My library continued to grow as I never even considered selling or giving a book away. Each book had a piece of my soul, they are actually fragments of my memory. I can look at each and vividly I will have moments leap back at me from years past.

 

E-Books

I currently own a few different e-books, notably the Kindle Paperwhite as well as the base model Kindle Fire. I have in the past used the early Nexus 7 tablets for a variety of purposes. I also have access to an iPad with specialized software through my girlfriends work, as well as a number of different cell phones all with books on them. I will say that I bring my Kindle Fire absolutely everywhere I go, even when I am reading a paper book or two at the time. Suffice to say that I have had my fair share of these devices.

 

Pros

Future is Now

This is a daily carry future item. Having grown up with people in science fiction movies using holographic displays and tablets, this is one of our current tangible connections to that future realm. Being able to walk around with a tablet with internet access and AI voice assist is as futuristic as you are going to get for an extremely cheap price point. This is a reminder that we are at an inflection point in history in some regards, a tangible link. Most other futuristic tech is going to be large ticket items, gene therapy, space stations, photon torpedo’s. Currently you can buy a Kindle for $35 – they are selling them in six packs as an incentive these days. At that price point, they become practically  disposable and the cost/risk assessment is pretty easy. Most hardcover new releases are $25+ and have limited use by comparison.

 

Capacity

One of the most key factors in this debate is the portability of an entire library of books on one device. This is fantastic for those situations where you finish one book and pick the next one right up. I learned first-hand the danger of this in conjunction with long series books. In 2015 I was gifted the entire Wheel of Time series and got stuck in a 9 month period where that was all I read. Any spare moment I had was spent plowing through thousands of pages, and when I finished one, the Kindle rolled me right to the front door of the subsequent one. I got into such a routine that it became difficult to tear myself away to any other book!

 

Free Books

For those of us concerned with Financial efficiency, this is a huge boost. I continually stumble upon great books that are just randomly free when you download them on Amazon. Whether it is a promotion the author or publisher is running or some kindle policy, in the last month alone I have read The One Thing and 4 Minute Marketing Plan completely free without really understanding why.

 

Freedom of Information

Sharing books on a mass scale is so much easier with digital files. Now everyone will have their own opinions on legality and the freedom of information, I am not going to be the one to tell anyone what is right. I know many friends that pool their resources and share a massive .mobi file Google Drive library. Torrents abound to give you most any book you may be looking for, so the cost of reading can end up dropping massively depending on the individual.

 

Digital Reading Tools

When using one of these e-readers, you can significantly technologically upgrade your reading style within the various menus and sub menus. If you find a difficult or foreign word, you can easily highlight and search on Google with just a few finger taps, unlike paper in which you would have a more complex task ahead. you can choose to read in portrait mode, or with a night shade light on. I have no use for complex note taking functionality, so most of this utility is lost on me. These type of improvements tend to make it more complex to do the simple things like add a bookmark or go to the table of contents for example.

 

Versatility and Utility

Being able to multi task is the key winner here. Having a classic book on Stoicism in hand, and then remembering you need to buy a ticket for tonight’s concert, doesn’t even require putting down the book anymore. With a few taps this book turns into a personal journal, or a movie camera, or a gaming platform. The amount of flexibility this provides is worth the cost of any of these gadgets alone. Having a notebook on hand that never needs a pen, or a calculator, or a Skype session. All too useful.  Much of this utility is likely a duplication of the phone everyone carries that would be equally useful for any of these tasks, so your mileage may vary.

 

Cons

Layout/Editing

I have had some pretty varied experiences in regards to the layout and editing of these digital books. When I read the aforementioned Wheel Of Time series, every page would have about 20 random spaces added in the middle of words causing poor flow and readability. I also feel that I see a much higher number of spelling errors possibly due to shoddy conversion work. This is something that will vary from publisher to publisher but can be pretty annoying and made me not enjoy the book as much.

 

 

Size

Depending on your common reading habits this may not pertain to you. I generally used to read mass market paperbacks found in the used pile at a book store. Small enough that I used to carry a book in my back pocket pretty much everywhere I went. With that being the case, every e-reader is generally larger than that. If you are reading the newest hardcover novels on the regular than this point will be null. You will save ample weight by switching to a sleek digital book than lugging around thickly bound tomes.

 

Resolution

The act of reading on a screen is dramatically different from reading on old fashioned paper. The way that reading on a computer tires your eyes is continued with most any of these devices as well. The main fix is to look into readers like the Paperwhite, which has a look similar to old graphing calculators- less like a screen and more like an actual print book. The paperwhite does have limited functionality when compared with an iPad for example but it is one of the best midway choices.

 

Over -Versatility?

These tablets and readers have various levels of utility to be sure, but often times I have found that it can be more than whats needed. Having a book to read for a nice quiet mental relaxation period is very easily disrupted by the flashiness of the Angry Birds notifications that get pushed to you if you fat-finger the wrong button. I often find that I load my Kindle Fire up with too much media that it does not even have space for more books. Having a flashing “Low Memory” warning kind of rousts you from the reading zone.

 

FIRE scale 7.5

Paper

What really needs to be said about the classic paper tome. People generally do not believe me when I talk about how many books I own or have read. It helps that a lot of them were childhood pulp garbage! I grew up on paper books and to this day have a book near me almost every moment of the day. Whether they are serving as current reading material, decoration, paper weight, or reminder – paperback books are an important cornerstone of what makes me who I am. I am not averse to change so I have tried E-readers in depth, but it is difficult to not harbor childhood biases. As long as we are aware of them and compensate accordingly, the results of this arbitrary contest should prove official.

 

Pros

Classic

Paper books are timeless. The original method has just been the bedrock of human learning and development for so long that it is extremely difficult to change your life to entirely digital. Classic always has more authenticity and right-ness to it, and reading in the same method as like scholars of years gone by is no different.

 

Cheap

Thanks to the old fashioned distribution model surrounding books, digital copies are generally going to cost more than buying a used paperback. Most books are 1 penny on Amazon with a $4 delivery fee. Digital copies will end up costing $5-10 for what amounts to a file transfer of non tangible goods. In a sane world, I would like to actually receive a discount for saving paper and not wasting printing costs, but we are not there yet.

 

Giftastic

I generally dislike giving gifts. Giving or receiving a book is a bit different in my mind though as it has a depth to it if done with thought. Someone who knows you is gauging that you may be interested in the prose, and trust you to hand you the copy that they enjoyed so much. With digital it is extremely rare for someone to lend out books in such a manner, the act of sharing is not as heartfelt in my experience as the physical copy was never lost to the original owner.

 

Smell

If you grew up a reader, the smell of being deep between the pages is one that is a cornerstone of our entire sense of childhood and personal identity. I grew up with my nose buried in a book. It’s impossible for me not to love the smell of fresh or old ink. Not hard to imagine, but a Kindle does not tend to have a smell, nor should it!

 

Expendable

This is an important thing to note in line with my Stoic roots. Losing a paperback is definitely saddening and getting them dirty or messed up is never fun. The difference between losing one book and your whole e-reader is a drastic one to say the least. While some are inexpensive, iPads easily run $400 plus just for the sake of branding and having the ecosystem. Instead of being sad you lost your lucky bookmark, you are instead trying to remotely lock and wipe your personal data from a misplaced reader. The amount of times I have lost my pocket sized novel for NYC bar nights are innumerable, I would not be so flippant were they a more substantive item.

 

Cons

Space

I live in 380 square feet with my girlfriend and two cats. Both myself and my companion love books and have thousands in our personal libraries. Even if it is our most common decoration we still only have a few hundred on display at any one time. The rest are packed in boxes in dry spaces in family attics as frankly, there just is no space! NYC living is not kosher with having a massive library, a digital reader allows you to accomplish everything without using that precious space. Future plans include a full library and reading room, so they are not a total waste, just not in the cards for right now.

 

Environmentalism

Trees. My ethical and moral compass becomes louder as I age. I am not yet at the tree hugging phase, but in the future I can see this becoming a problem as we continue to over indulge in the free resources of our planet.

 

FIRE scale

8

Winner

Impossible to say. I am too biased and I can admit that. I will say that I was a long time holdout but decided to try E-readers and currently use both. I carry one paperback and my digital with me in my gym bag. The weight is negligible and I do use the reader for writing notes at times as well. Being able to choose which type of viewing my eyes will be dealing with is much better than forcing it, and I really do enjoy them both and will have both for the rest of my life likely.

 

Cats Vs Dogs

Cats vs. Dogs – Whats the most FIRE-able Pet?!

I have a silly confession to make to you all. You may start to think very differently about me after this because all my co-workers seem to.

 

At work I am known as the crazy cat lady.

 

Minus the fact that I am a male, I don’t get the moniker because frankly I love all animals! I have grown up with animals my entire life and really don’t understand people that don’t actively like them. My issue is not so much with the nickname itself, more so it’s accuracy. Because as far as I am concerned I really am more of a crazy dog person that is currently without a dog. I have owned 10+ canines, volunteered with numerous rescue shelters, and trained security dogs, but because I have 2 cats right now I am suddenly a weirdo!

I don’t mind the association. Being the weird guy at work certainly has its positive and negative connotations. But it did make me wonder about animals and the FIRE community. I personally couldn’t imagine my life without an animal around me often, but is it the most optimal choice? I’ve read some odd point of views of pets with this lifestyle and thought it worth exploring once and for all which pet fits best with FIRE!

 

Cats

I am a somewhat recent cat convert. Through college roommate mixups, I ended up acquiring a Philadelphia hoodrat kitten and then recently adopted another little one on death row at the shelter so that she had company. Turns out cats do not like new company that much, the fighting and body slamming each other at all hours of the night has made this an interesting year.

Estimated Yearly Costs

ASPCA estimates $600-$1000 a year

Pros

Low Effort

If you want a pet to bring you joy it should fit into your current lifestyle. During the wealth accumulation phase of life, long hours at work and little free time is the name of the game. Cats require very little attention from you, often I will pet my cat too much and they will walk away bothered. There is no need to take them outside for a walk and if you wave a string in their face or leave a few empty cardboard boxes around they will self entertain endlessly.

Background Entertainment

Watching any animal is a joy. Much better than staring endlessly at a computer or tv, cats will often just do extremely unusual and humorous things that you catch out of the corner of your eye. Often times they will provide much needed comic relief at opportune moments and they help serve as a reminder to stop and enjoy the simple things in life.

Cathartic

Cats show love just like dogs. It is very different to be sure but the effect is the same. Your blood pressure will be lower and you will feel better coming home after a long day to something that relies on you. Depending on how friendly they are, having a cat give you a head bump asking for a pet or purring extremely loudly at you in contentment is enough to turn even the worst day around.

Pest Control

Free mouse trap for life. Honestly. Living in a less grandiose apartment becomes slightly less sketchy because your feline friend will spend every waking hour patrolling your abode. If a mouse or bug scurries anywhere, they will proceed to have the time of their lives making sure it’s not your problem. I have watched my cats take down months twice the size of their face, I didn’t want them to it kinda just happens at times! For anyone that is not comfortable dealing with pests, getting a free cat from the shelter not only saves their lives, but stops future you from shrieking like a little girl indefinitely. What price can you put on such a thing?

Cons

Nocturnal

Not entirely true but wow are my cats active at 3-4am. Attacking each other, attacking invisible enemies, attacking the drapes. Our REM time is their play time. I care less for my own sanity than my downstairs neighbors as my pets have a habit of galloping loudly on the hardwood hallway which I can imagine might get old. My solution has been to disorganized the hallway enough that its no longer a straight run just waiting for a sprint. Small problems in life.

Not Enough Love

Dogs provide more of the truly unconditional love that many people seek. There is no way around that, dogs look at you as their Lord and savior. A cat tends to look at you like it is doing you a favor by not walking away every time you breathe. This may be mildly disconcerting but over time you will begin to appreciate the intricacies of a cats love. Unlike a dog which wears its heart on its sleeve, a cats love is conditional, and it’s display will fluctuate drastically depending on the factors like the mood, setting, and context of the interaction. More like a human, it becomes rewarding to figure out how to receive the type of affection desired on a recurring basis as cat behavior is generally inscrutable.

Poop in a Box

Yeah. What can you do. I would rather have poop in a box then have to take them out for a walk a few times a day. If you make this a part of your daily habits you should never notice a smell and you will laugh at dog owners as they freeze to death miserable on their walks.

 

Dogs

I consider being around dogs for my entire childhood to be an extremely important aspect of my early development. As a strange and quiet child with few friends, dogs allowed me the outlet for emotion that others often receive from their peers. I have owned numerous dogs myself, and regularly volunteered with shelters around the city to help re-home and adopt innumerable others. My family used to own a guard dog training facility, so growing up we had protective dogs present to socialize them. I fully expect to own dogs in the future when they fit my lifestyle better.

Estimated Yearly Costs

ASPCA estimates $600 – $1800 per year

Pros

Unconditional Love

The love a dog gives you is truly like no other. It saddens me that some people could go cradle to the grave without seeing pure adoration in the eyes of a canine. I have been in numerous relationships and have a very supporting family; yet nothing compares to the eyes my last dog used to give me every time I came home. These animals miss your presence when you are out of sight behind a door, their joy knows no bounds when you come home after a long day at work.  

Exercise

I am certainly not about to go on a 2 mile jog with my Tabby cat, dogs have this category down. Those that have an active outdoor lifestyle are well served by this type of companion. I used to love walking my dog deep into state parks, and equally loved yelling at her as I brushed ten thousand burrs out of her fur an hour later. Having a silent companion to enjoy and appreciate the wilderness makes you remember to appreciate everything. “Why do we need so much to be happy when my best friend is so happy biting a oversized tree limb he found on the ground?” Having a pup right alongside you as you accomplish your fitness and health goals makes things less lonely for sure.

Social

I never knew much about this factor till I moved toward an urban area like NYC. Dog parks are plentiful and hotbeds of socialising. A generalisation at times as many do sit on their phones while their dogs gallant, many people will be happy to do some light idle chatter mainly oriented around dogs. For a mild weirdo like myself, having an instant topic of conversation makes the pain of small talk much less terrifying and possibly even enjoyable. Making friends because you dogs made friends is also a beautiful feeling, I have met many longtime friends this route.

Cons

Time Commitment

Dogs are a much larger commitment than cats. The solitary nature of the cats allows a fair bit of freedom, they can be left alone for a day and a half without issue. This makes overnight trips feasible. Not so with a dog. You need to be available to walk them multiple times a day and provide them direct attention for bare minimum 30 minute to an hour. You can ignore your dog but the outcome will be an unruly and uncooperative animal. This is one of the major sticking points for me currently. I do not want to feel too tied down, and the time commitment of a dog is on par with having a child. With my cats I can leave for extended periods, and either give them extra food or leave them with family and not intrude too much. Going on vacation and leaving your dog with someone is a major responsibility to put into someone else and not something done regularly with ease.

Effort

Dogs require training and exercise. Even the smallest pipsqueak Yorkshire terrier needs to be potty trained and walked otherwise they become lethargic balls of flab. Cats know to poop in a box and generally don’t want to play with you all that much anyway. Mine certainly enjoy playing, but if I do not have time it does not cause a crisis for them. With a dog if you don’t put the effort in, you will end up with an animal that you don’t like and could potentially be a hazard.

 

Alternatives

For brevitys’ sake I kept this mainly to the age old cats and dogs debate. These are not the only animals that our species has domesticated, you may find that your FIRE lifestyle fits great with more exotic animals in it. The legalities of exotics vary from state to state so they can end up being a limiting factor when it comes to freedom. No Tigers in NYC but all day in TX apparently. The care of exotic animals also requires a more in depth process of training, they haven’t had millennia to become man’s best friend. Sugar Gliders for example, require intense bonding during their early imprinting and a lot of effort to avoid becoming a nuisance for life. Also the more exotic the animal the more costly the upkeep. Getting a Boa Constrictor and feeding it small animals will likely become quite the line item on your budget as it ages.

 

That said, there is no clear winner! I personally have chosen cats because they fit my lifestyle currently, your life may be different. I fully expect to eventually own a veritable menagerie, my greatest happiness would be taking pictures of cute animal friends and helping animals worldwide to have a better go of things than they have been. I’m not so much as working towards retirement as working till I can feel secure enough to jump full time into conservation work basically!

Do you make pet decisions based on financials? Or on lifestyle?

 

Commission and FIRE

FIRE and a Variable Pay Structure – or Selling FIRE

One thing that I note is very rarely brought up is FIRE for people with a less defined yearly static pay. I currently work in Sales at a technology company and my base last year came out to less than 1/6th of my total take home pay. My months fluctuated wildly anywhere from $1,200 to $27,000 in commissions. This is the type of sales that people say they wouldn’t have the strength or willpower to do and I have managed to stay on top for the past three years straight.

 

I never see much guidance for these types of situations. I don’t know if I am doing the most optimal thing by doing it the way I am but I figured I would share my top tips for when your pay is dramatically variable.

 

Organizing

If you don’t have the luxury of standardized and reliable paychecks, organization is going to be your biggest friend. The more organized and aware you are of your money and it’s locations and accessibility, the better you will be. For years I was disorganized and did not have my house in order, just assuming I had the appropriate safety nets and systems in place. I was fortunate to not run into many issues, but now that I have been zealously tracking my financials for the past few months, I can tell you the peace of mind is invaluable. Writing down even the most obvious things such as daily transactions allows you to mentally have more grounding when it comes to the ins and outs of your cash flow. Knowing how much you have available at what levels of liquidity can give a sense of peace that takes a lot of the sting out of the variable nature of the pay.  

 

Live on Last Month

This is the standard advice given by most of the members of the cult of YNAB. Live on last month’s income. If you can get ahead of your finances to the point where your budget is accurately in line with your income, there will be no difficulties with bills as you have a majority of you daily living accounted for. This is an even more important budgetary mindset for sales than most as the extreme variance in pay can cause constant issues. Once you get to this point you can blame any difficulties on your own lack of self control with discretionary spending.  

 

Low Overhead

This is a rule in life in general but unless you are extremely confident in your pay, keeping your life low key is going to be one of the biggest headache savers. Though sales jobs do tend to make more money than the average salaried person, the pay is tied to an organization and its policies which you generally have little control over. I say this only as I know many a sales person that is doing fantastic with their current resources, and then the well dries up and they are left with a fragment of what they had not two months back. The life is fickle, and unless you have a long history of reliable payouts, you better guess well what sort of mortgage you would be comfortable with.

 

Credit Cards

Most every single financial transaction I do in a month is done on one of my credit cards. I tend to clear them off in full every month, purely using it as a rewards benefit for spending. This has allowed me to keep my utilization low and leave me with an 820 credit score and more credit facilities than I have use for. This also allows you to have every transaction tracked for your future perusal and analysis.  The more important usage of credit cards for variable pay structure workers is for when you do have that one month that sinks you. Sometimes the sales just are not going your way, and even if you’re not living any special way your hourly just won’t cut it. This is when you can leave whatever balance is needed until next month to take care of. Some key rules here in that you need to be sure to pay as much as you can this month, paying the minimum puts you in a psychological hole. And you also need to be sure you plan to clear it in the next month or two as otherwise the debt will affect your selling !

 

Ride the Happy Middle

A guy at my work hit a random stroke of luck on his first full month. He managed to get his hands on two major deals that slipped past more experienced hands and set a new record interning for first 30 days on the phone. Instead of being modest and grateful, he has continued to spout off at all opportunities proclaiming himself the second coming of the lord. New Rolex before the check had cleared, this person forgot that not 30 days prior a friend had saved him from working at a Sprint kiosk selling phones for the next five years. Things took an immediate downturn as they do with beginners luck, and he is muddling through the rest of his first year. You will have some amazing highs and some ridiculous lows in this type of career, the ones that last will learn to ride the happy medium. Not becoming too excited with victory nor too chastened with defeat, finding peace and happiness with consistency will calm the non stop roller coaster of emotion.

 

Bank Each K

For commission it is extremely difficult to set a definite savings rate as it is very important to be flexible.  Forcing yourself to put away more than you can handle is foolhardy and causes undue anxiety. I have had much greater success with living modestly and saving as much as possible with the main mental rule of throwing every spare round thousand into my account. I never have more than $999 sitting in my checking. Anytime you have extra money in your account, you start to notice the dumb things your co-workers spend their money on. New watches, cars, ugly mating prospects. Instead of being reminded of all the spare money each time you see your account, just transfer every dime away. Once it is in your taxable brokerage account you will generally have the self respect not to take it out for a frivolous purchase. What’s better is that you can practice stealth wealth by bemoaning how poor you are and having the empty account to back it up with a humorous view. Most all my bills are paid by the day commission lands, and little to no transactions occur in my actual cash account so the likelihood of having an overdraft is slim. If you constantly leave yourself cash poor, you will see massive gains compounding below deck, and future you can spend to their hearts content.