The mindset shift that led me to early retirement

Posted by on 31 July 2018 in General Early Retirement

Most people would say that life has a blueprint. You study hard at school, get a good job, buy an expensive house, and then work hard to pay it off. Along the way, you get to indulge in life’s luxuries because — well — you’re working hard!

I must admit that for the first decade of adulthood, I subscribed to the same blueprint. I studied hard and graduated with a competitive role at a multinational consulting firm. For a few years I worked long hours and paid my dues; hoping to eventually make Partner and earn enough money to retire.

But in the process I noticed something interesting: as my salary increased, I spent more. And as I looked at the Partners at my firm who were earning great money, they were still working well into old age. Why were so many seemingly wealthy people working for so long? Were they happy?

I’m sure that some of those Partners enjoyed their work and continued to work by choice. But I couldn’t reconcile the fact that so many earned great money, yet continued to work well into old age. Surely, given the choice, most people would choose to retire and spend time doing what they are passionate about.

Over time, I came to a realisation. As we earn more money our expectations and desires grow, so we spend more and more money. Unfortunately, this doesn’t make us happier. So we continue to spend to try and ‘catch’ a happiness that continually eludes us! I later discovered that psychologists call this the hedonic treadmill.

The Partners at my first were stuck on the hedonic treadmill. Their salary increased — but so did their expensive lifestyle. Big houses, private schools, expensive holidays and fancy dinners were preventing them from saving for their retirement.

It took me five years of working before I came to this realisation. Over the last five years, I spent lots of money on things that didn’t make me happy. My peers and I had just started earning a good salary, so we did what anybody in their early twenties would do: we bought expensive things!

In some respects, I’m disappointed about how carelessly I treated money. But in other respects, it was a good way to learn what not to do.

So what now?

I think everybody would benefit from a little introspection about what’s important in life and the role that money makes in achieving those things. For me, the most important things are time to spend with people I care about and the financial freedom to focus on what fulfils me. Life’s short, I want to make the most of it.

To do these things, I’ll have to drastically minimise the time I spend in the workforce. It’s a pretty lofty goal, and it will require some serious sacrifices, but I genuinely think it is achievable.

I’m now 30 years old. Today I start my journey to financial independence in earnest and my aim is to ‘retire’ at the age of 45.

For those that harbour secret desires of financial independence, I hope this blog will help motivate you to take the first steps. I am documenting my journey to illustrate that it’s not impossible to make significant changes in the way you approach money and life. Not only will I pass on everything that I learn during the process, I’ll be transparent with my mistakes so you can try to avoid them.

Hopefully there won’t be too many mistakes though…

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There are 2 comments on this article

  1. Avatar for Dan Montgomery


    Hi Dan,

    Thank you for sharing. I’m a fellow Aussie diving headstrong down the FIRE route too. The tough part is sustaining the patience day in, day out. The goal is so clear that I’m struggling to enjoy the day to day whilst in the pursuit of financial freedom. Any tips to combat the impatience, or any experiences you can share? Thanks

    • Avatar for Dan Montgomery

      Dan Montgomery

      Oh I know what you mean! I dream of the day that I can leave work behind.

      This won’t suit everybody but I’ve come to the realisation that building a business is the fastest (and maybe the most enjoyable) path to FI. So I find that looking for opportunities and thinking through how I might be able to grow/diversify my sources of wealth helps with the impatience.

      Another thing that I find helps is to set small goals and reward my achievements. That’s the main reason I track everything on the Net Worth Reports page. I can feel the progress 🙂

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