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From Financial Integrity

Jonathan - What To Invest In?

  • Urban, Upper midwestern United States
  • Multi-adult household
  • No children/2 cats

I had a terrible problem: what to invest in? I'm a fiend about getting out of debt; so much so that we paid our house off 10 years early on a 15 year loan. A year before I knew we would be free from the evil (but necessary) mortgage debt, I started looking into investments. The money we would be able to save once the house was paid off had to go into something! But what?

  • Stocks I had bad experiences with already and no interest in following the market.
  • Commodities I had no interest in either: you have to follow those markets even more closely.
  • Bonds I didn't understand and would not "keep up with inflation" anyway.
  • Mutual funds and annuities: why would I pay those fees?
  • I live in all the real estate I care to own.
  • Gold is kinda interesting, but where do you store it? Safely? So you don't get robbed/killed?

My wife was tired of listening to me ruminate and crabbed to a coworker about my fixation: I kept going back to the library for more books. Her coworker gave her a copy of Your Money or Your Life (Thanks Bobbie!). I read it one weekend. I left chapters 8 and 9 for last and was reading them while lying on the living room floor. They were a bombshell: I could see a way out of working until I was dead and knew we could do it. I was so excited I was screaming "Yes!!! Yes!!!" and pounding the floor. This behavior is very much out of character for me. My wife reacted: "I've created a MONSTER!", but she read the book too and got on board.

One month after paying off the house, I quit my job (sour relations with the bosses and I left thousands on the table in uncollected bonuses I didn't want to wait around to receive) and went back to school full-time to finish my first Masters. After paying my share of the bills and tuition, I had $178 to last me for nine months of personal expenses. I squeeked it out, learning I could live on far less and it could be fun too.

Twelve years on I'm more firmly convinced than ever debt is intrinsically evil. We are getting closer to financial independence every year but are in no hurry. Our employment situation is relatively stable, not onerous, and leaves enough time for outside activities we enjoy. I have measured my own personal inflation rate, overcome my irrational fear of inflation, learned about far more investments than just bonds, and started accumulating Treasury bonds to fund our post-employment life.

In the year since I wrote the above, the market has tanked and my Tbonds from the early 2000s are much more valuable - as if I would want to sell them. People have quit laughing at me for buying them however. They are beginning to see the value of conservative investing and not just following the investment herd. Setting an example can be very powerful if you are willing to talk about it non-confrontationally.

My wife and I also cashed in some under-performing (even for the current market conditions) assets and purchased a new house. For cash. There is no way we could have done this if we had remained unconscious about the flow of life-energy, as expressed in dollars, in our lives. We now walk to work most days, decreasing our costs and carbon footprints, increasing our exercise without having to set aside precious time to "go work out", and having some "think time" without having to pay much attention to traffic or listen to the noise on the bus.

The new house has a single-car garage; this will reduce our costs significantly over the period we plan to live in this house. Running the numbers, I expect the savings from not needing two cars, two insurance payments, two license tags, and two of everything needed to maintain two vehicles, pays for more than half the cost of the new house.

And it all started with a little book...  ;-)

This page was last modified on 27 January 2010, at 01:39. This page has been accessed 12,119 times.