financial freedom | The Caleb Barney Collection

Chasing money

What do you benefit if you gain the whole world but lose your own soul? – Mark 8:36

As a competitive, ambitious, frugal, investor-minded individual who comes from humble beginnings, this graphic speaks to me.

The competitive side of me wants to be in the top 1% of everything I do (including financial-related goals).

The ambitious side of me wants to prove to myself, my family and friends, my acquaintances, etc. that I can do anything I set my mind to.

The frugal side of me wants to have the financial security money can bring.

The investor side of me hates waste and focuses on being as efficient as possible (like investing in assets and having my money work for me).

But when I think about what’s really important in life and what brings me the most joy, it’s not money…

I’m happiest when I’m hanging out with family – whether that’s at home, going on mini adventures to the zoo, watching our kids hang out with their cousins/aunts/uncles/grandparents, or going on our yearly trips to Mohican, Hocking Hills, or the beach.

I’m happiest when I’m working out and competing with friends at the gym (whether or not they know I’m competing with them is up for debate).

I’m happiest seeing friends and playing board games with them for game night or going out and grabbing something to eat.

I’m happiest finding people homes to live in or to invest in and negotiating the best terms for them.

And when I think about all that makes me happy, I realize that I don’t need to always be chasing 💸…life is easier with money, to be sure. But as long as I’m keeping things in perspective and still able to enjoy life while pursuing money, that will be enough for me.

Don’t lose your family, friends, or health chasing money. Because in the end, what do you benefit if you gain the whole world but lose your own soul?

Don’t go broke trying to look rich.

I saw this post from FinancialSimplified on Instagram and loved it. How many people spend above their means just to try to impress other people?

If you have the “keeping up with the Joneses” mentality, it’s going to take you a really long time to build wealth. And if you’re ok with that, that’s fine. But if you have children, maybe it’s time to shift that mindset. I say this for a few reasons…

1) It is your duty as a parent to live responsibly, and to teach your kids to live responsibly. This goes for health, work ethic, attitude, teaching them about money, etc. If you have bad money habits and idolize material things or trying to impress others with your new clothes, new shoes, new car, etc, what does that teach them?

2) You don’t have to leave your adult children anything. At that point, they should be self-sufficient. I remember my dad saying that when he passed away, he wanted his last check to bounce. I have the complete opposite mentality. When I pass away, I want to leave my kids with millions. As long as I’ve given them the proper financial background so they don’t blow the money, and I’ve raised them to be good human beings (moral, just, etc), I’d be more than happy to relieve any sort of financial burden from their shoulders. If you don’t have to worry about how you’re going to pay your bills, it gives you the freedom and creativity to try new things that can be more fulfilling.

We never know when we’re going to pass away. If you’re not financially set, or if your passing will create hardship for your significant other and your dependents, you need to have life insurance set up. It’s a small cost for you right now, but if you leave this earth without it, the people you love most will suffer the most – not only emotionally, but financially too. If you needed two incomes to pay for your house, child care, food, transportation, and general living, what kind of stress and struggle will your family encounter if you pass away and they’re left with nothing?

3) You owe it to yourself. Why is it that we love ourselves so much, we are all so selfish in a way, but we care about what other people think? Why should other people’s opinions of us matter when they don’t really even know us?

You know yourself. Are you buying that $500 fancy wallet to impress yourself, even if there is no money in it? If I did that, I would feel worse about myself. Why cave into others’ expectations? Why have no money left over to spend on an experience with my wife and kids? And, not only that, but you’ll feel like an imposter too. Sure, you look rich. But you’ll know that you don’t actually have the money to back it up.

Don’t go broke trying to look rich. Don’t try to impress people you don’t know, you don’t like, and who don’t have to deal with your poor financial decisions.

We all have to start somewhere. Live within your means. If people laugh, just know that as long as you keep saving and investing money, trying to increase your income constantly while it increasing your spending, you’ll eventually have the last laugh. You’ll get to retire early when they are still slaving away in their 9-5.

Smart debt versus dumb debt

If you’re buying an asset that makes you more money (whether through appreciation, cash flow/dividends, or tax benefits) than it costs to borrow (paying down your principal and interest while more than keeping pace with inflation), you can make a legitimate argument to go into debt to invest in that asset.

If you’re going into debt to buy something that doesn’t make you money, you’re giving into your inner child.

Only borrow money to buy things that go up in value. Otherwise pay all cash for it or not at all.

Remember what you’re working for

For the high achievers out there, remember what you’re working for. Some people refer to this as finding your “why.” Why are you working so hard? What is it that you really want?

Sure, you may like what you do, you may find enjoyment getting recognition or accolades from your employer, or you want to be seen as successful in the eyes of your peers/family members, but is that in alignment with what you actually want?

I’ve been working hard for a long time. I worked in high school, worked my way through college, and upon graduating I worked multiple jobs and many hours of overtime to pay off any student loans I had, pay off cars, a mortgage, etc. But after having kids, I had to re-prioritize my life goals. Did I still want to earn financial freedom? Absolutely. But I need to do it in a more sustainable way so I can see my family. Working 60-70 hour work weeks will help me earn income, but at what expense?

The questions I had to ask myself were:

1) What am I working so hard for? What is my new why? The answer to this, I think, is to create the best life possible for my family. That doesn’t necessarily mean to have or to make the most money though. Instead, I think it’s to raise respectful children with good work ethics who are happy with life…and me NOT being around just so I can earn more money or do something I’m “passionate” about is actually a very selfish thing to do.

2) Instead of racing the the financial freedom finish line, am I willing to maybe work a few more years to have a better quality of life (more free time to spend with my family, friends, and hobbies)? The answer to this is yes. What’s the point in rushing to retirement when you might lose your family (say, if you get divorced as a result of never spending time with your spouse), you lose your health (because you’re “too busy” to work out), lose your friends (because you never hang out with them anymore), and have no hobbies (are you just going to sit at home and watch tv all day)?? That life would be so unfulfilling to me.

So, as I conclude, I just want to say that everyone is different. We feel different things, have different goals, and are in different stages of life. Our life experiences are different. Our expectations are different. There is no right or wrong when it comes to why you’re working as hard as you are. But the key thing is to think about what you’re working for and adjust your time accordingly.

How to be financially prepared when things go sideways

The difference between an emergency fund and a sinking fund, as illustrated by The FI Guy.

Most financial experts recommend having at least 3-6 months of expenses set aside as an emergency fund. This is used for true emergencies/things that you weren’t expecting (like a job loss or car accident). Hopefully these things never happen, but if they do, at least you’ll be covered. If you have to dip into your emergency fund, re-supply it as soon as you can to get it back to where it needs to be.

The “sinking fund” is something not as many people know or talk about. This is for known future expenses. For example, if you’re a 1099 self-employed individual, you better be setting aside money for taxes, because the tax man comes around every year to collect. And guess what? The car you drive? It will need an oil change and new tires every so often. Christmas and birthdays? They come at the same time every year, so if you plan on giving gifts, you should put money away in a sinking fund to cover those expenses.