How a Copywriter Planning Early Retirement Does Money

Trisha (not her real name) is a 30-year-old copywriter in Reno, Nevada.

So, Trisha, how much are you making?

I make about $49K/year.

When you say you’re a copywriter, is that a freelance thing, or are you working full-time for an organization?

I work full-time for the local university — it’s a salaried position. I basically write whatever needs writing for their fundraising department.

It involves a lot of stuff that’s not writing, but writing is the bulk of it.

Got it. So you know pretty much what you’re going to make for the year.

Yes, definitely. My husband is in the same boat — $61K/year with pretty much no variation except a small bonus.

All of our money is joint, so I think of us as making $110K/year.

How do your earnings compare to your expenses?

It varies a little month-to-month, but in general we save about half our combined salaries. So, expenses are around $40K/year-ish, taxes get around $15K and the rest is savings.

I’m including paying down our mortgage as savings.

That’s an interesting perspective! Do you view your home as an asset equivalent to savings in the bank?

Sort of — the way I think of it is that we’re paying for the future privilege of not paying rent. Like, if we had invested that money, we could use the returns on the investment to pay our rent, but we bought the house instead.

Does that make sense?

Absolutely, although I’m really curious about where we can get investment returns that’ll cover rent payments, because I want in on that investment!

Haha! Fair point. I guess that’s why we bought the house — it’s worth about $275K, and if we had invested that, there’s no way it would return enough to cover our rent in perpetuity. Therefore homeownership makes sense!

I look forward to our commenters either vehemently agreeing or disagreeing with you!

As do I!

Besides your mortgage, do you have any other outstanding debts?

Nope. We use a credit card for all our expenses but we pay that off every month. My husband had about $10K in student loans after college but we knocked those out a couple years ago, so just the house at this point.

Nice! What about retirement? Is that included in your 50 percent savings rate as well?

It is. That mostly gets taken out of our paychecks before we see them.

My husband contributes about $10K/year to a 401(k), and his employer matches about half of that. 14.5 percent of my income automatically goes into the state pension fund, and the university “matches” that.

Then I try to max out both of our IRAs each year.

The pension is defined benefit. It feels grim to me to see so much money/month going into a state-managed bucket that I can’t see or control, but I figured that the rest of our money is managed by us, so having a defined-benefit pension is a good hedge against the entire financial system crashing around us.

It sounds like you’re doing everything “right” — you’re earning, you’re saving, you’re debt-free, and you thought carefully about the finances of homeownership before buying a home.

How do you feel about your money and how you use it?

I feel a lot more conflicted about money than I want to feel, given how secure we are on paper.

The problem — and this is obviously a lovely problem to have — is that we could technically afford pretty much anything we wanted in the immediate term (since we’re saving half our income). But I don’t want to be working a 9-to-5 job until I’m 65, or even until I’m 50.

So we’re covering all of our immediate expenses and then everything else is going toward this vague future goal of “having enough.” It makes it hard to gauge what’s worth spending money on in the short term.

When I was younger (poorer), it was easier to determine what was worth spending money on, because I had far more wants/needs than I had money for, so I had to prioritize.

Now it’s like, why shouldn’t I buy a new pair of skis or a hot tub or whatever when we can technically afford it?

So yeah, conflicted.

I love the idea that when you have less money, you have to prioritize, so it’s easier to be clear about what you really want. (Food. Clothes. Rent. Maybe one ticket to a movie sometime.)

Yes! No skis.

Skis aren’t even on the table!

Exactly! Anything other than the $1 naan bread from the fast-food Indian restaurant across the street was off the table.

Now I find myself dithering over whether we should really be spending $6 on goat cheese when surely cream cheese would be an acceptable substitute (it’s not).

And then I realize I have no effective gauge of what’s worth it.

Cue the tiny violins.

Do you do any of those tricks or mind-games, like “put it on a list and if you still want it 30 days later, you can buy it?” (The goat cheese will probably be expired by then, though.)

YES! We have a rule that if we curse ourselves for not having something 10 times, we can buy it.

Which explains why my husband is still shoveling snow with a regular metal shovel — he cursed it for the eighth time the other day.

I feel like there are ways around this rule: what if your husband cursed at the shovel three times in a row, for example?

Definitely not. The curses need to stem from unique situations. He’d only be cheating himself!

So you make these types of purchases from a place of desperation, almost. Or “anti-joy.” Does this object bring me misery? Does it bring me misery ten times?

What about buying stuff you want? Just because you want it?

That is the crux of it. I feel like “just because we want it” could get out of hand so quickly.

My husband is definitely more likely to buy something that will make his/our lives easier, just because he wants it. I will suffer until something truly becomes necessary.

It all comes back to having enough — if we both lose our jobs and the stock market crashes and we have simultaneous medical emergencies and our pets both develop diabetes, we’re going to rue the day we flippantly bought that snow shovel.

Or you’ll become Mr. Plow.

A dream.

Do you have a budget? YNAB in particular seems like it might be useful in your situation. You could say “okay, I have enough money for the next six months of basic expenses AND cash left over for that goat cheese.”

I’ve tried YNAB for a hot minute, but it ended up just sort of feeding my money insanity so I ditched it.

I keep track of our net worth and our expenses, so I know where we’re at financially and how badly everything would have to fail in order for us to be truly broke. Truth be told, I usually buy the goat cheese, but there’s always this nagging feeling that I’m being too indulgent.

It’s the same on the other side of the equation — we have stable jobs with decent salaries, but I know we could be in an even better situation if I picked up freelance work on the side.

This is one of the reasons why I love The Billfold — the question “when is enough enough?” seems to come up again and again from every angle. There’s no right answer.

So I’m trying to be content, and to quiet the nagging voice that says I should be doing more.

Are there great wants/needs that aren’t being fulfilled?

Negative.

Is it more like “What if I don’t have enough in the future?”

Yes, specifically “What if I don’t have enough to retire early?”

That’s my primary goal, and I guess a “want” that’s in danger of not being fulfilled: I want to have enough money to not work anymore, and I want it as soon as possible.

Well, there are plenty of financial communities on the internet for that. 😉

Mustachians, unite!

When you think about early retirement , do you see it as a realistic goal? Have you done the math on your savings/investments?

Very roughly. My retirement goal is $600K and a paid-off house.

It wouldn’t be RETIREMENT retirement, where we never work a day again, but if we had those numbers then I’d feel comfortable with both of us quitting our jobs and then taking part-time freelance work.

Or just taking time to tinker for a few years and explore other ways of earning money.

If you continued your current savings and investment plan, how many years would it take for you to hit that goal?

10!

That’s great!

So, mentally retired by 40.

And even if something comes up, you’ll be enormously financially prepared to handle it.

That is the goal, for sure.

So, with that in mind, my final question: what is your advice for Billfold readers?

The best advice I’ve received and implemented is: Spend money on what’s most important to you and let everything else fall away.

That, and get a Republic Wireless phone for god’s sake.

And buy the proverbial goat cheese every once in a while.

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