Welcome to the Finding FI interview series where we highlight and learn from individuals focused on achieving financial independence and the strategies they are using. Everyone is at different stages of their FI / FIRE (financial independence, retire early) journey, so let’s learn from their personal stories and be inspired.
Finding FI Interview #36
Today I have a special guest Mr. AR from accidentallyretired.com. He has an incredible story of entrepreneurship AND early retirement. So, let’s sit back and learn from this amazing guy… how in the world do you “accidentally retire”!? Take it away, Mr. AR!
Finding FI Question #1
What’s your story?
I am a 36-year-old entrepreneur who has started and sold a few businesses. Most recently, I was a CEO of a $15M Revenue company that I ran for 10 years with my business partners and ended up selling twice (long story)!
But after the second time selling our company, and after working for a public company for 5 years without truly being in the driver’s seat, I decided it was time to pursue something new.
My plan was to initially take a mini-retirement for six months…During this time, we went on a few COVID-friendly trips, spent a lot of time playing with my kids (two boys ages 3 and 5), reading books, and golfing.
I have been loosely following personal finance sites for the past couple of years but had been “too busy” to really take anything on myself. I had started to become increasingly frustrated with my financial advisor but didn’t feel like I had the chops to really do something about it.
However, during my mini-retirement, I started to dig in. I read more blogs and I started to run more scenarios on my potential early retirement. The more I dug in, the more that I realized that a) I should take over my finances and invest in Low-Cost Index Funds and b) we were close enough to 25x expenses that I could likely FIRE in some capacity.
Michael here – I love it. Some of my favorite stories are about entrepreneurs who sell and buy back their businesses! Good for you for digging in and taking back control of your finances.
Finding FI Question #2
What types of routines and/or life hacks do you use?
Oh I love routines and life hacks! I started morning pages journaling (from The Artist’s Way by Julia Cameron) during my mini-retirement and haven’t looked back.
Every morning my kids wake me up, I get them plopped in front of the TV, then I make coffee and pull out my journal. I write about 2-3 pages depending on how much time I have.
My morning pages have turned out to be a really useful and fun routine. I simply write. It may be venting about something going on, complaining about how I am feeling, or it is sometimes more profound and exploratory. And it was through my journaling that I realized that I wanted to start Accidentally Retired.
I have written about some of my other life hacks/routines on AR including my life mantras, but my favorite routine is using my happiness spreadsheet. I initially picked this up from Jim Collins, and every day I go onto my phone and I give my day a score (+2 to -2). I combine the scores with a gratitude journal of sorts listing out my “Top 3 Things of the Day”. This can be anything from my meals, to a moment with my kids, or something new I did that day, etc.
My happiness tracking has been a huge barometer for my life. It has helped me to realize that I was no longer enjoying my job as a CEO. After tracking my days for over a year while I was CEO, most of my bad days were coming from work. This helped me to realize that I NEEDED a change.
Michael here – It’s amazing what becomes apparent when we place metrics on things we truly value. I love your happiness spreadsheet. That’s really cool. It sounds like you and I are definitely aligned with gratitude.
Finding FI Question #3
Describe your past relationship with money. How has it evolved into your present views today? How do you want it to change in the future?
I grew up mostly in upper-middle-class neighborhoods. My Dad is a lawyer and my mom has had a variety of careers, but always worked hard and made good money. So while money was mostly never an issue, my parents tended to fall into the “keeping up with the Joneses” trap.
Throughout most of my childhood, the messaging from my family and society at large was clear. Make money. Get a big house. Impress neighbors. Be successful.
As I got older, I saw us continue to get bigger and bigger houses and fancier cars. Yet my parents were stressed about money too much. I realized at some point that we were living above our means (or at least toeing the line) and though my parents made a lot of money they were spending too much of it.
So this has influenced a lot of my thinking about money.
My wife and I both read The Millionaire Next Door when we were in our early twenties, and it all clicked. Most millionaires aren’t the ones buying the flash cars or the big houses. They are the ones smartly saving and investing their money.
I never have felt that I needed to be frugal, but I wanted to be smart with my financial decisions. My wife and I like to indulge in things that make us happy, but we try to do it in places where we can really get 10X for our money (travel for instance) and cut back the rest.
Michael here – Thanks for sharing a real example of “keeping up with the Jones”. I admire that you realized this relatively early in life and it sounds like you’ve found a nice balance. Like you, I also enjoy indulging in certain things that make us happy… i.e. food, tech, etc.
Finding FI Question #4
Do you discuss money or financial matters with friends and family? Why, or why not?
My wife and I have made the decision to not share any of our financials publicly or even with family.
Because of this, it has created some interesting discussions when I first decided to take a mini-retirement and now am living a secret-ish FIRE. Our friends and family all are asking me what I am going to do next. They ask my wife if I have anything in the works (in other words, is he getting a job?).
So we have tried to skirt around this as much as possible. We have tried to indicate that we simply have a big emergency savings account for situations like this, and we are being patient to figure out what I’d like to do next (all true). My hope is through my side hustles, we can create the narrative that avoids having other people worry about our finances.
And in general while we may discuss cars, or renovation costs, or how much our cable bill is, we try to keep it to that. So while I would love to discuss 401 (k)’s with my siblings and friends, money conversations happen very infrequently.
I don’t consider myself to be a financial expert AT ALL.
I just took over my finances less than six months ago. While I have always tried to be smart and thoughtful about money, the fact is that my earnings have had more of an impact on my finances than any saving or investing.
Being an entrepreneur and having equity in a business, even if it was split with my business partners, have been the best investments that I have made.
Michael here – I do find your comment fascinating. And while you may not have known a lot about personal finance, my assumption is you did understand the cash flow of your businesses. It certainly sounds like you’ve had some healthy earnings in your career.
Finding FI Question #5
When did you first hear about FI/RE?
I’m not sure when I first heard the terms FI/RE. I think it was probably by following the site ESI Money. I loved reading the millionaire interviews and first saw the terminology there.
But my first real introduction to this type of concept was with The Four Hour Work Week by Tim Ferriss. My wife and I actually have the book displayed in our bedroom.
I am not sure why, but I have always just felt like I wanted to live a life not tethered to the typical 9-5. I wanted to start my own business, I wanted to work less and enjoy life more.
I think this was probably from seeing my parents hustle and work hard, but seem like we were treading water financially growing up. It was also from seeing my Uncle who made lots and lots of money, but seemed incredibly stressed and unhappy. I just didn’t want that.
So when Tim’s book came along, I devoured it and ever since then I have wanted to take a mini-retirement and perhaps retire early altogether. I actually put early retirement as a goal, back in 2011 when I was 27.
Michael here – Wow. The power of a goal is undeniable. I love that you knew what you wanted (or didn’t want in some cases) and focused on achieving it.
Finding FI Question #6
Why does FI or FIRE appeal to you?
It’s strange because I really do get a lot of pleasure out of working and being productive. But I think that what appeals most to me, is being able to do it on my own terms.
My wife and I have worked to build up an emergency savings account that could support us for up to two years. Doing that alone, really helped to give us the feeling of financial safety that we needed.
For me personally, I knew that I could always step away from my job at any time and be able to figure it out. I never wanted to have to work for a paycheck. I never wanted to have my own career in someone else’s hands.
I still want to be a productive member of society, but I want to do it my way. And that is what is most appealing about reaching FI and FIREing.
Michael here – Great insight about FIRE. Sometimes people assume we “FI” because we just want to unplug and live off the grid. But it’s much more than that. It’s about being productive in a way that aligns perfectly with our talents and interests.
Finding FI Question #7
What does RE (retirement early) look like to you?
So as you know, my retirement was accidental. My kids are still very young and I want to be there for as much of their childhood as possible.
I want to be the Dad that can take them to the park every day. I want to be the Dad who can coach all of their sports teams and take them to the golf course after work, etc. Maybe that’s not a normal Dad, but it sure seems like it’ll be a lot of fun.
So my family is my number one priority.
Then managing our financials and building up passive income sources is going to be next up.
Right now, we are very much on the cusp of 25X our expenses, so I am balancing figuring out how we can continue to live our same lifestyle (not cutting too much), and optimizing my asset allocations to both seek returns and begin to bolster passive income streams.
Michael here – I will tell you firsthand that spending this extra time with your kids is more precious than anything. I’ve been home with my kids since my daughter was 1. AND it still went by in a flash! An extra $1-2M more in net worth would never make up for this time I had, so I definitely think you’re on the right track here. 🙂
Finding FI Question #8
What type of FIRE are you pursuing (i.e. leanFIRE, FIRE, fatFIRE)?
Right now I am pursuing Partial FIRE. I am enjoying writing on Accidentally Retired, and hope that can eventually lead to some income (though not passive).
Then I also want to continue to consult when opportunities arise and also potentially build my own portfolio of websites to own and operate.
But I want to do it all within a shortened 4-5 hour workday. I want to be able to take whatever days off that I want, and take 4-8 week vacations if desired.
The last couple of weeks I have had a good taste for this, I have golfed once a week, hung out with a friend via Zoom once a week, and then worked ~4 hours a day on my side hustles. And it has been rewarding, productive and fun!
Michael here – I think you’ve found a nice mix here!
Finding FI Question #9
Do you believe sacrifice is necessary in order to achieve FI? Why, or Why not?
I think yes and no. This is going to entirely depend on each person’s situation and potential path to FI.
Even though I backdoored to FI, I had to take calculated risks. In the early days, I was working 7 days a week. 5 for my full-time job and 2 for my side hustle that I eventually was able to turn into a full-time gig.
From there I had to experience several failures and setbacks before I found my business partners.
Then I had to quit a good-paying and secure job to go and work for not one, but two startups to support myself.
It took years of hard work and stress to build a company from nothing into a $15M a year company. There were vacations in which I had to put out fires, last-minute business trips, and all-nighters that I had to pull to reach our goals.
So whether you are working to advance your career, your business or your finances, there is some level of sacrifices involved.
To me, the sacrifices were calculated and worth it. Whenever I left a secure job to go to an insecure one, I knew that at the very least I would learn quickly. So even if I “failed”, I would still be advancing my career in some way.
Michael here – No doubt your journey has required persistence and the right mindset. Congrats for taking your company from $0 to $15M… that’s an incredible feat!
I don’t know if I’d say you “backdoored FI”… more like you busted the door down.
Finding FI Question #10
Is a side hustle a key component of your FI / FIRE journey? (i.e. second job, side biz, real estate investing, etc.)?
Yep! As discussed earlier, I am currently in Partial FIRE. I am enjoying writing for Accidentally Retired and “working” on it roughly 3 days a week.
Initially, I was looking to invest more heavily in Real Estate. I read some great books and started to look for a vacation property to run as a short-term rental. However, after looking at many deals and really calculating everything out, I realized that it was not going to be a truly passive investment.
I’ve also spent a lot of time analyzing websites that are for sale. I like this route over the vacation rental, because I feel that I can directly impact the value of the business a lot more. My plan will be to buy a small website, fix up anything that needs fixing, and then automate any tasks so that it can eventually become a passive income source.
There is more risk involved with buying websites over real estate, but I think the potential gains and the cash on cash returns are far superior to real estate. I still would like to eventually invest more directly in real estate, but with the market as crazy as it is right now, it just doesn’t seem worth the hassle.
Michael here – You’re right that real estate isn’t necessarily all passive. However, it is possible to get it pretty darn close. You will have to build a team of good property managers tho. Or, you may want to check out real estate syndications or trust deeds for more passive types of real estate income.
However, with your entrepreneurial knack, you could very well be positioned nicely to profit from digital assets. I’ll be following!
Thanks again, Mr. AR for sharing your incredible insights. Cheers!
Readers, what is your favorite takeaway from Mr. AR’s story?
Want even more FI inspiration? Check out my new book The F.I.R.E. Planner.
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- Financial Update Report – April 2021 - May 3, 2021
- Finding FI Interview #36: How a 36-year-old CEO Accidentally Retired Early - April 26, 2021
- Unlock your full financial potential with The F.I.R.E. Planner - April 12, 2021