Snowball of Early Retirement

51 thoughts on “Snowball of Early Retirement”

  1. Very true and great motivational topic. Once you get decently on the turn around path it starts to build on itself. Money begets money via interest, so your investments begin to return more a year then your paycheck. Your lifestyle level becomes ingrained so you stop wanting for the next big thing. The behaviors just become you.

    1. “The behaviors just become you” – very well stated, and completely true. The more we do them, the easier they are to do, and we begin automatically making the best financial decisions for us. It’s a wonderful feeling!

  2. Absolutely true! And once that snowball get so powerful and big that it is bringing so much investment income that it is basically a third salary for the household…that’s when the magic happens!

    1. Exactly! And this is the single point that I can’t quite get Mrs. Vigilante to fully grasp my excitement over. I tell her: “In a few couple of years at this pace, we will have enough money saved that our average expected returns would be greater than what we are able to contribute. Isn’t that INSANE?!” She doesn’t seem to think so. I think that’s a huge turning point, where financial independence becomes as close to a sure thing as you can find outside of death, taxes, and political ads in October.

    1. I agree, this is one of the amazing parts about financial independence and early retirement. Habits become ingrained that we don’t even think about them any longer. They become automatic. Almost like auto-pilot run by our financially-trained subconscious minds. 🙂

  3. Love the football analogies, Steve. Are you holding out telling us about your secret football stardom? Is that the next career after early retirement? Pull up to the practice fields in your airstream?

    I definitely agree about momentum and snowballs. Although it was a bear to get through, I loved reading Warren Buffet’s biography The Snowball because it was apparent not only how his money snowballed but also his skills, his intelligence, his ability to communicate, and the strength of this relationships.

    This is a long quote, but I think it’s appropriate for the power of snowballing your early retirement efforts:
    “Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favour all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamt would have come his way. I have learned a deep respect for one of Goethe’s couplets:
    Whatever you can do, or dream you can, begin it.
    Boldness has genius, power, and magic in it!”

    1. Ha! I wish! Football happens to be my favorite sport. 🙂

      I haven’t read Buffet’s biography, but it seems to be pretty much in-line with this post, albeit accidentally. Perhaps the snowball is even more powerful than I had thought!

  4. I’m a big believer in momentum and it is a powerful tool in achieving any goal. When I was taking IT certification exams, once I worked hard and passed it, that gave me more confidence and motivation to start on the next one. Its hard to admit sometimes, but in many cases its the mental blocks that hold you back. In my experience, about 90% of things I wanted to do werent half as bad I made them up to be. You just have to push yourself, come up with a plan, and get started. Sometimes I’ll just break them up into smaller achievable tasks. Each completed task is a building block. You just need to have some patience and before you know it you’re there. This could be saving for retirement, cutting back on your expenses, working towards a degree, or cleaning out your garage.

    1. Totally, Arrgo – life is very much a mind game. Once we get passed the mental barriers that we put up for ourselves, things suddenly become much easier to deal with. And I agree, most of the things that I believed to be “difficult” weren’t all that tough after all. The more accomplishments that we have under our belts, the easier it is to address the next challenge. 🙂

  5. Repetition makes us better for sure. You’re not going to be able to lift more if you only go once a week. To see progression you need a plan, and you need to hit the gym multiple times per week. Same thing with FIRE.

  6. Momentum is huge when you work towards a financial goal.

    Unfortunately, reverse momentum can be a huge factor too and that’s why you see people in poor situations only end up worse.

    Kudos to you guy for adopting the mindset where you are going to retire at a certain time regardless of the money. The “one more year” syndrome is real, but it sounds like you’ve mostly avoided it.

    1. Thanks TJ. Yeah, we’ve never considered working another year. We’d easily have over a million if we did, but we don’t need a million to retire, and there will always be opportunities on the road to make some extra cash if we feel like working a bit. And in the end, we’d rather work a little bit while living the lifestyle that we enjoy than continue to be stuck in a situation that doesn’t really provide us with a lot of fulfillment.

  7. Very inspirational!

    It’s definitely a different mindset that a lot of people have. I think the excitement to get to financial independence and freedom drives people even more as they realize that it’s actually possible… which leads to that snowball effect.

    I’m excited that you guys have made it and can’t wait to join you in that realm in the near future!

    — Jim

  8. Thanks for writing about this. It’s a cool concept. Most of us know about the debt snowball but the early retirement snowball can be even more empowering. We hit our $$$ target at least a year earlier than anticipated due to building up those good habits. As Green Swan said, watching your investments put forth another salary is a huge benefit of building momentum. If only we could convince folks who haven’t started investing that the day will come where they see their money making money.

    1. I’ve found that some people just don’t want to be helped. It’s easier to feel sorry for one’s self, I suppose, than face reality and make some changes in life. It all begins from within. 🙂

  9. We totally agree with this snowball analogy. We have found this in our “early retirement” journey also. After I quit my job to chase my dream job for a HUGE pay cut, we thought that would derail us. But after a few months of running numbers on the drastically cut income, we are still right on track! The only difference is that now we both love our jobs, and we might stick it out an extra year or so just because we are quite happy. Actually, if we lived in a more ideal town with a better climate, we might be tempted to work for like 10 more years!!!

    1. Loving your jobs definitely makes a huge difference, and not a lot of people can honestly say that they do (I certainly can’t!). But, having the option to work another year in a job that you actually enjoy might not be too bad of a scenario. 🙂

  10. Great Post Steve…and so true! But I have a bad habit of underestimating the time everything takes! 😉

    So let me ask you a question: Let’s say stock market valuations dropped 50% tomorrow (or next week), would you still reach your goal early?

    I think most folks on the path would say “nope, I’ll be working awhile longer”.

    My point is, we’ve had awesome returns the last few years. It’s great to be positive, but that might not continue.

    1. Thanks Mr. Tako. No question about it, the market definitely helped. If the market dropped 50% tomorrow and we lose half our investments, then no, we certainly wouldn’t be ahead of our goal. That’s not to say that we wouldn’t still retire, but we’d do so under much, much different circumstances.

  11. That’s very true. 🙂 We’re still in the getting-out-of-debt phase of our FIRE dreams, but it really does snowball in unexpected ways! For us, it’s almost become addictive. I guess you could say that saving money is one of our favorite hobbies. 🙂

    1. It is addictive, isn’t it? Watching your money grow and work for you is definitely something that I’ve gotten used to, as I’m sure many of us have. 🙂

  12. “Whatever the goal is, we begin work to achieve it. We practice. And, things become easier the more we practice.” – LOVE IT!

    Putting in some hard work (and perhaps some uncomfortable situations) short term can have huge long term payoffs… if only more people would take a better look at their priorities and adjust appropriately.

    1. Thanks Brad. At this point I’m not sure that many of us know what our priorities are, unfortunately. We think we know. But it shouldn’t take a drastically life-altering event to suddenly knock us out of our spending fantasy and into reality.

  13. I definitely saw the ‘snowball’ effect when I realized that the retirement money that we had accumulated was producing more in returns than the amount we were adding. It’s a great feeling to see the result of adopting good financial habits pay off.

    1. I couldn’t agree more, Carl. It is great to see, and shows that investing *generally* works. There are ups and downs, of course, but over the long term. it works.

  14. Another thing that happened to us after Mrs. SSC’s big paycut was receiving no paycheck for 3 months. We thought it would be pretty tight, but doable and in the end, we were still able to save ~$3k/month and didn’t feel pinched or tight about anything. It was like, “Whoa, we really do live off of less than one paycheck!” hahahaha

    It’s just become the new lifestyle, so it didn’t seem uncomfortable or anything like that at all.

    Like Mrs. SSC pointed out, I’m still amazed that even with her big paycut we’re still on track for 2018. Surprising where you can find money to invest when you’re mindful about it and not just spending willy nilly.

    1. Awesome story – losing a whole paycheck but still saving WAY more money than the majority of Americans is a great thing to be able to say. It goes to show you that saving doesn’t have to be tough. It does take discipline, though! 🙂

  15. This post reminds me a lot about a book called “The Compound Effect.” Essentially, the author of that book talks about how little actions we do compound into big effects later on. An extra step here, an extra dollar saved here, a little healthier eating, and over the long run, you’ll see huge differences in outcomes.

    The same thing is true here. A little big of saving there, a little bit of foregoing something now here, and over time, those effects add up big. You don’t even notice it!

    1. Sounds like a good read, Financial Panther. It’s true that the decisions that we make today can and do have profound effects later on. They don’t have to be BIG changes, either. The small things, when taken as a whole, can add up to amazingly powerful sums!

  16. Resonates with me. I actually feel uncomfortable now when people suggest we go out for lunch or diner (not that it’s always a good thing, mind you). No later than today, a colleague wanted to go out for lunch. I planned ahead, told him I had already packed my own lunch (true), and suggested we met at a place where he could buy some takeout so we eat together in some public area. Worked great, saved me $10, and we both enjoyed our lunches and each other’s company.
    I wouldn’t even have thought of that 2 years ago, I would probably have thrown away my own lunch or something…

    1. Truthfully, I probably would have jumped at the chance to go out as well a couple years ago. But then again, I LOVE going out to eat, even if it’s just for a $10 lunch. That’s been the toughest thing for me to change over the years. Good on you for having the discipline not to give in, but to meet your colleague half way. 🙂

  17. Thanks for the big shout-out, buddy! I do think market gains are helping us be ahead of the game. But the snowball is real! We’re now projecting ending up at a place where we’d still be fine with a 40% market drop. Not that we want that drop, of course, but we could ride it out. Feels pretty awesome to know that! Look forward to all of us crossing the finish line in short order!

    1. You’re welcome, ONL! I’m looking forward to crossing that finish line as well. Just a couple more months, now. Then, the real fun begins! … or so we hope. 🙂

    1. Thanks Penny! That’s awesome to hear, and I’m very glad that my words resonate with you. That definitely keeps me coming back to write more. 🙂

    1. Hehe! I know it will, Maggie. It might already be, in fact. I’m sure some things are easier for you now than they used to be…things that you probably thought were tough when you first started your drive to FIRE. Maybe? 🙂

  18. Well written post, and so true! As someone who spent a long, long time ignoring my money, now that I’ve started watching it, I find it fascinating. Watching money beget money, seemingly out of thin air, reeks of magic to me. Like an open mouthed child watching a magician, a hat and a rabbit, I want to see the trick over and over again. This makes me want to put more money away, to watch the trick become bigger and better and more unbelievable. And the more I put away, the easier it becomes to put away instead of spend.

    1. “…I want to see the trick over and over again.” Ha! Cleverly worded, and I absolutely agree. It’s a trick that I never get tired of watching. 🙂

  19. Some of us are achieving the goals early, and the numbers are huge who have reached their goals just at the right time. Things get even more interesting as we more practice and perfect at what we do.

    Snowball becomes even more functional when a person has achieved their goals and dreams, but that just doesn’t stop them from dreaming a new target. Nevertheless, we all tend to take that hype and set an aim for the next step.

    It’s true that many of us seek to retire early as a millionaire, but experts (Those who are a millionaire) said that they are moving forward to make it even more massive, so there is no stopping even after the retirement.

    1. There is no stopping after retirement…I like that! Retirement should just be another phase in our life, not some stopping point for being productive. The younger we are when we retire, the easier that will be to achieve. 🙂

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