One of the big lessons in FF1 is, in the end, “it’s just math.” It’s something I repeat multiple times in the course. Personal finance is just math. And not very hard math. In its essence, the more of your annual income that you save and invest, the faster you can stop working.

Of course it’s actually harder to do that math. How do you live frugally (defense) and yet at the same time make a good salary way above what you’ve decided to spend (offense)? I read recently that to live the life you want, you have to know the price and then pay it. And how many people are willing to pay it?

It’s really about the principles you live by.

Most of you know my personal story, but it’s worth repeating here. This comes directly from Lesson 1.7 in the FF1, with two sentences bolded as bookends of a larger point:

I grew up in a Chinese immigrant family who fled the Communists. Money was tight. When I was in college, my personal budget was $5,000. When I graduated in 1994, I got a job as a paralegal at the Justice Department and made $25,000 and spent $15,000. I felt rich! I was spending literally three times more than I was used to. I decided then and there, philosophically, environmentally, financially, that that amount was enough to make me happy. So I decided that that was what I was going to spend annually from there on out. After that, I

- spent 3 years in law school, no income

- worked for 2 years as a corporate lawyer at $120,000

- worked for 4 years as a Quaker schoolteacher at $30,000 + free housing

- spent 4 years (two 2 year stretches) underemployed/looking for work/changing careers

- worked 6 years in nonprofits, earning between $25,000-$70,000

Each year, I only spent $15,000-$25,000 and invested everything else. When I got laid off in 2014, I realized that I had made enough money not to have to work anymore.

In 1994, I decided philosophically, environmentally, and financially to live under certain principles. In 2014, twenty years later, that resulted in FIRE (“financial independence, retiring early”).

Interestingly, FIRE was never the goal. The goal was to live my life a certain way: voluntary simplicity, integrity, and stewardship. FIRE was the by-product. Now that I teach Financial Freedom, I can narrate a story about about saving and investing, hitting the cross-over point, and then getting to build the life I wanted, like traveling and creating and then selling Portland Underground Grad School. But I wasn’t try to gain financial independence (although I suspected it might happen). (Note: I did read Your Money or Your Life and Small is Beautiful, in college which were major influences on wanting to live simply). I just believed in certain things and was willing to live by them.

"Most people’s money problems are actually connected to a lack of fundamental direction in their life.” - Your Money or Your Life, Vicki Robin

There are plenty of FIRE bloggers who just decided that they wanted to retire early, figured out the numbers, and then did it. Most people can’t do that. I think for most people, achieving FIRE will be the result of deciding what their values are and living by them. In the words of Omar from The Wire, you’ve got to have a code.

What does a code do?

1. It gives you something to believe in. Why did I live on $20k a year? Because spiritually I felt it was enough. Because I wanted to limit my environmental damage by limiting my consumption. What I believed in was more important than spending money.

2. It simplifies decision-making. When I decided to live on $20k a year, it eliminated a lot of choices. I didn’t have to think about the car or clothes I wanted to buy or the vacations I wanted to take. Voluntary simplicity isn’t only financial simplicity, it’s mental simplicity. The noise is gone.

3. It built habits. I’ll let you in on a secret: I didn’t keep a budget. I still don’t. For those 20 years, I looked at my bills, but never worried about it. Why? Because I believed in certain things, and was willing to live that way, my spending was regular and consistent almost every month. When your savings rate is 50%-60% every month, you don’t sweat the details.

You can get all three these by either having a code, or easier, by having a community. You’re the average of the five people you spend the most time with. If a culture of frugality and saving/investing is around you (think immigrant communities), all this is a lot easier.

if you don’t have the right vision, no amount of strategy or tactics are going to help you. Your beliefs lead to actions, which lead to habits, lead to results. A lot of people want the results. But are the consistent actions there? Again, it’s knowing the price of what you want and paying it. And it’s easier to pay it when you have a code or a community.

Do you have a community around you? What do they believe in? What principles do you live by? That’s going to decide if you can live the math.