There’s one question we’ve never seen asked in the FIRE community, but it’s a big one. And we’re going to answer it.
With so many people rapidly becoming interested in Financial Independence and taking their first steps down the FIRE road, it’s only going to become more important.
How do you get through Year Three?
This is where we are now, three years into our FIRE journey. We’ve put the basics into practice (honestly, it takes about two years to really start making progress). We’ve upped our income streams, we’ve got some initial investments bubbling away. So now what?
You’ve left the harbour, the wind’s just hit your sails, but there’s no land in sight, and you know there won’t be for many years to come. Even though you’re doing everything right, progress is slow. It feels like you’re going nowhere. This is where it gets hard. So how do you keep moving forward?
This is a familiar problem to us, as marathon runners. And, conveniently, it has the same solution. When you run a marathon, you have a clear (and specific) target - completing 26.2 miles before the course timer runs out. 26.2 miles and a new PB time in my case, devouring that post-marathon Pizza and Beer in P’s case. You’re always working towards it - each step is progress, even when you’re turning a wonderful grey-green colour with exhaustion, and you think you’re going to fall over. I can promise you, there’s always a point in the first few miles of the run where you reach your marathon pace and settle into your stride… and then it hits you. You just have to keep doing this until you see the finish line. It doesn’t feel like you’re making progress; you’re feeling the weight of 23 more miles settling onto your shoulders. Each step actually feels harder, because each step takes a tiny bit more out of you. That 23 miles feels weirdly longer than the whole distance felt at the start, when you were fresh and optimistic… So how do you come through?
The mental game is the biggest challenge for marathon runners and FIRE-followers alike. Each mile is a reminder that you’ve got more distance left to run. If you let it, it’s dispiriting. And even after halfway you still have to keep running. In the FIRE equivalent, you aced this month’s savings goal, but then there’s the discomforting realisation that you’ve got another eighty-four months to go. And those months are all going to be one month long, the inflexible, unforgiving sods.Time is the variable that you cannot adjust for or speed up.
In marathons, we employ different strategies to cope with this. You focus on the tiny wins - speed up for just one song; cheer yourself on at each mile marker you run past. Look out for your beaming supporters, politely bemused that you’re even trying this. Don’t think of the finish too early, just focus on where you are now. Break it down, mile by mile. So here are the powerups we use for marathons and FIRE alike.
Optimise for success: cool, you’ve done the starter stuff. Your savings are automated, you cycle to work, you’re not blowing money on big things you can do without, and you’ve seen a huge change in your savings rate. We’re now in tiny wins territory, and this stuff is super important too.
Some ideas: are you bulk buying your loo roll for the cheapest deal? Do you do your food shopping online so you maximise on deals? How many freebies, vouchers or 2-for-1 offers can you blag? (I subscribe to a newspaper, which was a carefully considered monthly cost. The 2-for-1 vouchers on cinema tickets more than make up for the subscription fee.) Does most of your wardrobe come from a charity shop? Are you sprinkling in zero-shopping weeks? Do you bulk buy pretzels and pre-portion them to avoid the 60p a day pretzel habit at work? P’s workplace has had regular ‘free to a good home’ impromptu offerings - cooking chocolate, beer, cider. Sandwiches. It’s all welcome, and it’s all a few quid saved every time. And those few quid do add up. A fiver a week is £20 a month, which is £240 a year.
Up your income! If you’ve got your spending optimised, then it would be dispiriting to try and punish yourself by continually scraping the barrel. Remember, be frugal, not stingy. Look instead to the other part of the equation: your earnings - boost those (but crucially, don’t change your spending habits).
Since changing jobs is the most efficient way to dramatically boost your income, prepare to do this every few years. Go for those promotions, those diagonal moves, those bonuses. We recently learned of one company that will help you save for your first house deposit through a salary sacrifice scheme… and will contribute money towards that deposit at the end of the savings term. Wish we’d known about that sooner!
Positive tunnel vision. Tunnel vision is usually meant negatively: you’re singularly focused on one goal to the exclusion of all others. The dispiriting and de-motivating aspects of singular focus are the problems we’re trying to address. What do you do when you can’t see the light at the end? To stretch the metaphor, tunnels have markings in them. Look at those.
In P’s case, seeing years and years to go until FIRE, and measuring her progress by the 4% rule or the 25X rule - it’s disheartening. But one thing P calculates is independent income from various sources. So: dividends, income from Ratesetter, money from survey sites - this doesn’t tend to be a whole lot, but knowing that she’s in for the long haul she likes to see how the monthly independent income compares to that month’s spending. Obviously once she hits 100%, financial independence has been reached.
That’s a long way off… but she realised she had recently passed a milestone - over the course of a year, that bundle of independent income more than covers one month of expenses! Nearly two, in fact. That was a lightbulb moment, that was a landmark, that was crossing Tower Bridge. That was “ooh I want to tell C about this right now!”
You don’t tend to pass 4.3 miles in a marathon and go “woo, I’m one sixth of the way through”. However,if you thought of it that way you’d realise it was something significant.
We’re currently hardcore saving for a deposit right now (we even have a wall chart tracking our progress) but we know when we get back to our regular savings routine, it will be a very short leap to make it up to a full two or even three months covered through independent income. And then P will be a quarter of the way there.
You can’t see the light at the end of the tunnel, so can you focus on something else? We have various non-money related goals: for example we take on fitness challenges to keep us motivated and focused elsewhere. We recently started following the Stronglifts 5x5 programme to improve our powerlifting and are now able to pretty much lift our own respective bodyweight.
Speaking of which, we are also working on getting that down. Similarly to FIRE and marathon running, this is a slow process (not helped by the recent opening of a vegan cheese shop at the other end of town) but gives us something to focus on in the interim. Crucially, these are all activities that don’t require us to spend money and aren’t related to saving money either. We’re planning a couple of Autumn marathons so when we get back into the training plans for those, it’ll soon feel like a mental break to stop and look at financial spreadsheets just to get away from the mileage!
So, to wrap it up, those are the ways we try to keep ourselves motivated and focused outside the daily grind of dragging ourselves towards the freedom we crave. Is anyone else reading this in the same boat? How do you keep yourself moving through that tunnel?