The seemingly CRAZY financial choices that we made that completely transformed our financial lives for the better in 5 years (no, not a get-rich-quick crypto scam, just an insane personal story)
I laid awake for two hours last night just thinking through each of the seemingly crazy-ass financial and life decisions we needed to make over the last five years that somehow all worked out.
Many (most?) of our friends thought we were NUTS and they actively worried about our decisions, but we ended up completely transforming our financial life thru some very unconventional and counterintuitive decisions. And doing so while managing to deal with two aging parents who hadn’t appropriately planned, financially or otherwise, for their own aging.
Departing (sometimes wildly) from convention has never bothered me, and—whew boy—is that obvious over the last several years.
Some of the counterintuitive strategies we used:
a good way to pay off our debt is to reduce our total income
we need to move my dad to an assisted living facility that he can’t afford and doesn’t accept either insurance or government assistance, and we’ll need to pick up the resulting shortfall
it makes sense to sell the house early in a housing value explosion, before we gain much of its current value
we should buy a different house that we can neither live in, nor rent out, and won’t yield much additional equity
instead of taking the next big promotion in your career, you should instead semi-retire at age 40, without even a fraction of the resources you’d need to retire on
since they can’t afford to, we should pay the mortgages of both of my parents
it's good to continue to turn down easy promotions at work, even if they pay more money
let's continue to travel more than nearly anyone we know
And, yet, each of these decisions helped lead to the wholesale transformation we had!
We went from an embarrassingly high amount of credit card debt (measured in tens of thousands of dollars), no cash savings, two car payments, $70k in student loans, and about 20% equity in our house...
to:
...zero debt (no credit cards, no student loans, no car payments), a fully paid-off mortgage (the same one we sold, actually!), reduced our ongoing fixed costs by >500%, saved enough cash to go 5 years(!) with no income, quadrupled our total net worth, and also build a travel fund that’s paying for a 100-day trip around the world.
…all in 5 years.
Fucking crazy, right? Absolutely crazy. Insane. Sounds like an obviously scammy infomercial for crypto or some get rich quick scheme, or someone who won the lottery or came into some huge fortune. If anyone tells you that they have a credible plan for easily turning that situation around, run the other way. Fast.
But, it just so happens that we actually did do that! Like, in real life. Between 2019 and today.
Each of those counterintuitive steps actually made sense as a legit strategy (hard as that seems to believe), and was 100% tailored to our own specific situation. Combined, it wasn’t just some Hail Mary pass with little chance of success, but it did contain some significant risks, and while we had the broad strategy throughout, we were not assured of the end outcome. We, essentially, had to thread the needle on several different issues, in the right order and without unforeseen bad luck, to come out the other side in as remarkably good of a state as we did.
It’s not a specific path I’d recommend to any other person (this is not financial advice), but I’m thinking of writing up a long narrative of what we did, and why. It's a personal story about our own lives, not a gameplan to implement. While I think we should all talk about money a lot more than we do (especially with family and friends!), I’m not planning on posting this publicly. However, I am happy to share it with folks who are curious. Perhaps there’s a nugget or strategy in here that sparks something in your own life. At the very least, you’ll get a sense of the crazy-ass shit we’ve been up to the last five years.
I’m not sure when I’ll get it written up, and it’s going to be looooong, but if you’re interested, shoot me an email at @scott at my rscottjones.com website and I’ll add you to the bcc list, and one day you'll have something interesting to read in your inbox (this is one-time email, you're not joining some ongoing newsletter list).