“If you want to take the island, burn the boats.” – Julius Caesar
I have heard the quote above cited many times over the years, noting Anthony Robbins uses it frequently in his programs and speeches. Its origin dates back more than 2,000 years ago when Julius Caesar was seeking to conquer lands outside of Rome. In short, Caesar had his soldiers burn their ships upon arrival. In doing so, he sent a clear message to his men as well as the enemy. There was no plan B. There was no option for his men other than to give all they had because the only alternative was certain death. They were committed. I don’t know about you, but there would be no greater motivation to take an island than death.
At this point, you may be asking how does burning your boats relate to my current situation, personal finance, or the pursuit of FI? Let me tell you. When there is a fall back option, it is human tendency to take it. I am human, therefore, I am not immune to this tendency. I know this, acknowledge it, and want to utilize this knowledge to my benefit. Today’s post is a follow-up to my last post where I talked about beginning a new chapter in my life. Although it is not life and death, this quote has been meaningful for me in deciding next steps over the last week couple of weeks. My next chapter is beginning to take shape, and I have decided that I want to take the proverbial island, and I am ready to burn the boats.
A Time of Reflection
In my last post, I shared with you that I just ended employment with my MegaCorp job of 10+ years. Today’s post is intended to be a follow-up from where I left off.
I am still processing the spectrum of emotions that come with making a change of this magnitude, and I will likely continue to do so for some time. I can say at this point that any negative emotion associated with leaving the job did not last very long. I have never been one to dwell on the past. In fact, I would say that I actively strive to lean forward in my life, both personally and professionally. I feel like this has served me well up to this point, and I don’t plan to change now. For that reason, I immediately began to shift my focus to the future.
The day after I left my job, Mrs. Henry and I decided to pack up the kids and head down to one of our favorite get-away spots on the coast. The trip was one of the most spontaneous trips we have ever taken. In some ways, the trip was intended to be a celebration of sorts since new opportunities are on the horizon. I also hoped the trip would allow time for me to decompress, reflect, and begin to consider my next steps. It is not hyperbole when I say that this trip was everything we had hoped it would be. We spent quality time together as a family. We celebrated the unknown and what lies ahead. I was able to reflect on the past as well as look to the future. Mrs. Henry and I spent time discussing our definition of happiness and what that looks like now and potentially in the future. We had genuine conversations about what we really wanted out of life. It was a great week all around. In the end, I was able to achieve clarity. My mind is no longer racing with indecision, what-ifs, or worry. I have a mental clarity that I have not had in some time. If I am being honest, I didn’t expect to gain such clarity so quickly, but it happened. I can only conclude that I already knew the answers to the questions I had been asking myself. I only needed to quiet my mind and listen.
That brings me to today’s post. Today, I not only wanted to share what’s next, but also share with you a few take-aways from my past week of self-reflection. I hope that some of you can relate in some small way so that it may help you now or at some point in the future.
Acknowledging the Silent Killer
“So many people spend their health gaining wealth, and then have to spend their wealth to regain their health” – A.J. Reb Materi
I frequently hear people citing some derivative of the quote above. Sometimes this quote is utilized to support the argument that there is no point in saving money for retirement because old age is not guaranteed and you may be too old or sick to enjoy it when you get there. As you would likely conclude, I vehemently disagree with this argument. Saving is a foundational tool to generating wealth and wealth allows you to have more control of your time. Time is everything.
My goal in starting this blog was to share my journey as well as what I have learned about personal finance, investing, and the pursuit of financial independence. As I said in my first post, I identify with HENRYs because I am a HENRY. I am friends with HENRYs. I work with HENRYs. I have family members who are HENRYs. In addition to having an above average income and not being rich yet, HENRYs tend to have something else in common that often isn’t talked about. HENRYs are often stressed out. An above average income typically is coupled with greater responsibility and greater accountability. There is a reason that many experts refer to stress as the silent killer. Stress can and will eat away at your body and your mind, and you may not even know it is happening. I am talking about more than just temporary periods of stress that may be associated with a big deadline or an impactful decision. I am talking about the underlying baseline of stress associated with your work. It is there whether you want to acknowledge it or not.
Much like a frog sitting in water slowly being brought to a boil, your level of stress can and will often continue to increase throughout your career as you take on additional responsibilities or make more impactful decisions for you or others. Sure, some people cope with stress better than others. However, some people also just hide it better than others. Regardless, stress will often catch up with you one way or another and sometimes it may be too late. In the course of building our wealth, we often sacrifice our health as well as our time to include the best years of our life. If we are fortunate enough to make it to financial independence on a traditional timeline (i.e. traditional retirement), we often then have to spend our wealth to try and regain our health. This is typical of many Americans, but I believe it to be especially true for HENRYs. This in part is why I started this blog. The pursuit of early financial independence offers an alternate path.
Over the last week, I have gained a better appreciation for the stress I was under in my job. Don’t get me wrong, I have always known that I had a baseline level of stress associated with my work. I also knew that it was steadily increasing with each promotion or increase in scope of responsibility. What I didn’t stop to consider was the magnitude and the impact it was taking on me long-term. I don’t think it was possible to truly see and acknowledge the amount of stress that was there without completely cutting ties with the job and associated responsibilities. I now realize I was a frog in water slowly being brought to a boil. I can now begin to acknowledge the silent killer that was slowly sneaking up behind me.
Mindset is Everything
“Mindsets are beliefs – beliefs about yourself and your most basic qualities and abilities.” – Carol Dweck
The concept of a fixed vs. a growth mindset was first developed by psychologist Carol Dweck. She is well known for her book, Mindset: The New Psychology of Success. According to Dweck, “In a fixed mindset, people believe their basic qualities, like their intelligence or talent, are simply fixed traits. They spend their time documenting their intelligence or talent instead of developing them. They also believe that talent alone creates success—without effort.” Alternatively, “In a growth mindset, people believe that their most basic abilities can be developed through dedication and hard work—brains and talent are just the starting point. This view creates a love of learning and a resilience that is essential for great accomplishment.” [1]
Graphic by Nigel Holmes – Based on Research by Carol Dweck / Source: https://www.mindsetworks.com/science/Impact
On the surface, a fixed vs. growth mindset seems pretty straight forward. I would suspect that most reading Dweck’s definitions above would categorize themselves as having a growth mindset. I know I would. However, as we know, humans are complicated. The human mind is complicated. Everyone may identify with one mindset more than the other based on their belief system. However, everyone also likely exhibits traits of each mindset in different parts of their life or at different time periods in their life. Over the last week, I have come to realize that despite identifying with a growth mindset, I was still demonstrating a fixed mindset in some aspects of my life. I came to this realization while asking myself the question below.
Do I have a fixed vs. a growth mindset?
At first, I asked myself the global question. Do I believe talent alone creates success? Absolutely not! Do I believe my abilities can be developed through continuous learning and hard work? For sure! My answers to these two questions alone would lead me to conclude that overall I have a growth mindset. However, I needed to dig deeper. I continued to ask the question above over and over. However, this time I asked the question through the lens of each area of my life. I also asked myself the question below through each lens.
How do I measure success vs. failure?
According to Merriam Webster, success is defined as achieving the favorable or desired outcome. [2] Failure on the other hand is defined as the lack of success or a falling short or omission of occurrence or performance. [3] Those with a fixed mindset tend to avoid failure at all costs. In doing so, success becomes defined by simply avoiding failure.
As you can imagine, my definition of success looked very different in each area of my life. However, I could not shake the realization that in some areas of my life, including my professional life, success was being defined by simply avoiding failure. I had arguably developed a fixed mindset in this area. I had become successful professionally and now success was defined less by continued growth and taking risk and more by avoiding failure. As I noted in my last post, comfort can be the enemy of growth. I was comfortable, and as a result, I had unconsciously began to embrace a fixed mindset. I continued on in a job I was no longer passionate about with an organization I no longer aligned with. I needed a catalyst for change. I wanted a catalyst for change. Now that I have it, I have been reminded that mindset is key, and a growth mindset is important in all aspects of my life and is central to my happiness.
Embracing the Power of F-You Money
I have mentioned F-You money many times before. F-You money is defined differently to different people. For some, F-You money is the equivalent to achieving FI. Once you hit your FI number, you can work on your time. You can literally say F-You to anything because you don’t need to earn money to support your lifestyle since your invested assets do it for you.
For others, F-You money is having 3 – 6 months of expenses saved. The ability to support yourself for 3 – 6 months gives you options you would not otherwise have. If you are in a toxic situation, become burned out, or simply need to make a significant change in your life, this amount of money can allow you to do so to some extent. Your timelines is finite, but the options are there nonetheless.
For me, F-You money is somewhere in between. I define F-You money as having at least 1 – 2 years of expenses saved in liquid investment or savings vehicles. For me this includes, money in savings and taxable brokerage accounts. It does not include such things as retirement accounts or savings otherwise earmarked for “retirement” since these accounts are not as easily accessible.
Note: I do not consider my taxable brokerage at face-value in the context of calculating F-You money. Since the market in the short-term can be volatile, and I invest in equities in my taxable brokerage, I assume ~ 60% of the overall value to account for a potential 40% drop in a severe bear market. Different people will calculate it differently, but this is generally what I am comfortable with.
There are a few reasons why I consider having at least 1 – 2 years of expenses liquid as F-You money. The first reason is relatively straight forward and arguably very obvious. HENRY’s make an above average income. An above average income is not as easily replaceable in the event of a sudden and unexpected job loss. As a HENRY, you may need a longer run-way to replace your income. You don’t want to get in a situation where you have to settle on a job that is less than ideal simply because you did not give yourself long enough of a runway timeline wise. Of course this is highly dependent upon your specific industry, the nature of your job, and the sources of your income to include other income streams. As such, this may not apply to you as much depending upon your circumstances.
The second reason may not be as obvious, but is equally if not more important. 1 – 2 years of expenses liquid allows you to take additional risk that may not otherwise exist. This is where the real power lies. I have read before that the full power of F-You money cannot be experienced until you actually flex your proverbial F-You muscles. I am not in a position to do so, sort of. If I am being honest, the loss of my job was not exactly flexing my F-You muscles. As I stated in my last post, my departure was not completely by choice. I think this is important because I want to be clear that I am not claiming to be some FI crusader who flexed my F-You muscles and walked into my boss’ office and gave him or her the middle finger. However, by having F-You money, I am positioned to be able to react differently. When given the option, I could walk away. When given the option, I can now take on additional risk if I choose. I am free to pursue options that may not otherwise be available. This is possible because of F-You money. Now that I find myself in a position to define and write a new chapter in my life, I find myself experiencing the true power of F-You money. I find myself ready to flex my F-You money muscles, and I must say, DAMN it feels good.
The Next Chapter Takes Shape
“Happiness is a direction, not a place.” – Sydney J. Harris
I likened my journey to a space-flight in my last post, and I talked about having options. On the one hand, I could make small adjustments to my trajectory. I could leverage my experience and skillsets to get a similar position in a different organization and continue along a similar career path. This option would arguably be less risky. It would be more familiar and more comfortable. On the other hand, I could make large adjustments to my trajectory or even change my destination entirely. I could seek out the unfamiliar. I could take a risk. I could potentially become uncomfortable. In the end, the choice was clear. If you haven’t figured it out yet, I am choosing the latter. Mrs. Henry and I spent the last couple of weeks discussing some of the things I noted above as well as many other aspects of our life past, present, and future. In the end, we kept coming to one conclusion. Why not… Why not take a risk? Why not take on a new challenge that takes us outside our comfort zone? Why not embrace the growth mindset? Why not redefine success? Why not flex our F-You muscles and leverage our achievement of Coast FI to our advantage? Why not…
So…What’s Next
So what does this all mean? I don’t have all the answers yet, but a few things are now clear.
I have mentioned in a few posts that Mrs. Henry decided to start a business in 2020. We formally created the business in 2021 with the intent to launch and begin to slowly grow the business this year. Mrs. Henry and I were both excited to start this adventure together, but we were concerned about the time that it would take to launch and grow the business while both of us were working full time. We would not have been fully committed. That is not the case any more. I now have the opportunity to shift my time and focus to the new business, and pursue my dream of entrepreneurship. By consciously choosing not to re-enter corporate America, I feel that I am burning the boats to some extent. Yes, I do have the option to eventually go back if absolutely needed. However, in the short-term, I am committing 100% to the endeavor. I am making a psychological commitment to cross a line, and I don’t plan to ever cross back.
In addition to pursuing the business full-time, I want to continue to grow the blog. I truly believe you can save for a better tomorrow while still living your best today. I feel a sense of purpose in sharing this message and the concepts and techniques behind it with other HENRYs out there. I now can spend more time producing content and trying to further spread the message. In addition to the concepts behind pursuing and achieving FI, the blog will also serve as journal of sorts where I continue to document and share our journey. Although I may be changing my trajectory, I still identify as an average HENRY in the pursuit of financial independence. At this point, I have no clue what the future holds, but I do know one thing. “Happiness is a direction, and not a place,” and I am convinced now more than ever that I am headed in the right direction.
Regards,
Henry
References:
[1] Dweck, C. S. Mindset: The New Psychology of Success; Gildan Media Corp, 2007
[2] https://www.merriam-webster.com/dictionary/success
[3] https://www.merriam-webster.com/dictionary/failure
*** All photos credited to Unsplash.com