Financial Priorities: The Origami Master Plan & Blueprint
This is what the average person’s life looks like:
Always playing catch up, always reacting to one situation after another. Never realizing what was truly important.
I look at this trajectory and ask myself: did these people ever make any real choices at all? Or did they just end up accepting the choices that had already been made for them?
An Origami Blueprint
This gets at one of the core tenets of this blog: our refusal to accept the results that most people get. It’s about setting priorities and making sacrifices in order to live deliberately, to create a life we can look back on that’s truly our own.
If we had to design our own origami life, what would it look like? Obviously, a lot of it would be dependent on choices we haven’t made yet.
But here’s a rough sketch:
Our 20s - Asking the Right Questions
1. Build a Fuck off Fund
It’s not enough to simply pay off our debts to society (i.e. student loans). We need to build a fuck-off fund to ensure that society will always owe us.
With a 6-12 month fuck-off fund, employers owe us better compensation, banks and credit card companies owe us better bonuses. Basically, we need financial leverage over everyone who might otherwise have leverage over us. This means that before we spend a single dime on anything that’s not essential to our survival, we first buy the option to tell someone to fuck off.
2. Be Done With Retirement
Retirement sounds like a terrible idea. Hanging out by the beach, sipping mai-tais, with no purpose or meaning besides “enjoying your old age” is not our idea of a good time. Who wants to wait around to die?
This is an advantage Jennie and I have over most people because it makes our retirement number far more attainable: we simply need to make sure we have “enough” by the time we’re too old and decrepit to work (not by some arbitrary age of 65).
Our minimum number happens to be $700,000. Working backwards, assuming a 6% annual return for the next 35 years, this means we need to have $90,000 ($45k each) invested by age 30. After 30, even if we don’t invest another dollar, the magic of compound returns will ensure that we’ll have at least $700,000 by age 65.
This is why we lived in shitty basement apartments in Toronto and a room the size of a closet in Boston - to make this minimum number happen.
3. Build a Travel Fund
This is where readers find us today, as we track our progress through our Money Diary. Keep in mind that this came after a considerable amount of pain moving through steps 1 and 2. But what better time is there to take our lumps than in our 20s?
Our 30s - Finding Answers
1. Insure Ourselves Against Loss
At age 30, we’ll be purchasing 30 year term life and disability insurance to protect ourselves against catastrophe (i.e. protecting our downside). Also, the younger you are, the cheaper the premiums are.
2. Build Our Own Freelance Business & Pursue Creative Projects
Start traveling and take some major creative and professional risks.
3. Have Kids (maybe)
We're still on the fence about this. See our blog posts on the subject.
Our 40s - Expansion Phase
1. Grow Our Business & Creative Projects
It's too early to say how this will play out.
2. Save for Child’s Education
Taking a cue from Ivan's parents, no expense will be spared for their education. After that? They're on their own.
3. Support Our Families
At the end of the day, family's still family. No matter how terrible their life choices were.
Our 50s - Consolidation Phase
1. Continue to Grow Our Business and Creative Projects
Again, too early to say.
2. Invest in Other People
We'd like to eventually be in a position to employ other people or help them start their own projects
3. Pay for a House With Cash
We covered our rationale for this in The Hidden Cost Of Home Buying.
Our 60s and Beyond
1. Never retire
Retirement is basically tacit acknowledgement that you can no longer add any economic value to the world.
2. Give 90% of our wealth away
We'll leave our potential offspring with the remaining 10% and hope they don't squander it. The rest goes back into society. The only things Jennie and I hope to leave behind are a few ideas, not a burdensome estate that our beneficiaries never earned.