After publication Why we know we shouldn’t continue spendingI realized something important: The real reason I was reluctant to rent a vacation rental this summer is because we no longer have financial freedom. I didn’t think about this fact until I received a lot of feedback from readers about how to spend money.
After buying the latest home, I sold a large number of stocks and bonds to pay in cash. As a result, our passive income temporarily dropped from $380,000 to about $230,000.
Given that our annual after-tax expense was about $260,000 at the time, we suddenly had a deficit. By my definition, financial independence means having enough passive income to cover the living expenses you need.
Decision to prove preservation
When writing this post, I don’t think I’d spend money on rent for the following reasons:
- When we already had a free place consisting of 3 spare bedrooms, spending it on accommodation was not appropriate.
- None of the rentals are unreasonable and there is no $10,000 option for 4 bedrooms.
- We can use this money to invest in our children’s custody accounts to help them launch in the future.
- Micro-conversations living under one roof bring meaningful opportunities for grandchildren to bond.
All of these are valid perspectives. but Main Why I don’t include? I’m in one mission To regain financial independence by December 31, 2027 and spending $24,000 on rental homes we don’t need.
If I have one thing, it is that I relentlessly achieve my goals. Whether it was publishing three articles a week after launching the Financial Samurai in July 2009, or vowing to be a full-time father for the first five years of life for two children, I wouldn’t stop until the mission was completed.
Our Choices to Realize Financial Freedom
After renting our home for a year, selling it for profit, saving more and reinvesting part of it in earnings, our passive income has rebounded to about $320,000. Hooray has higher yields and interest rates!
Unfortunately, since both children are now in private language immersion schools, our annual spending is about $288,000. That’s about $360,000, which means we’re still operating a passive income deficit of about $40,000.
While I can rebalance my portfolio to more revenue-generating assets to cover all of our spending, I have always believed in growing stocks and private growth companies, especially now in the AI space. I want these investments to run.
If there is no stable salary to buffer any financial shock, the main leverage I can pull is Control expenses. So I decided not to spend $24,000 on four-week holiday rentals. With a risk-free return of 4.3%, this money could generate $1,032 in passive income per year. This is another step closer to financial freedom.
Yes, having my mom and wife beneath the same roof for five weeks was a sacrifice. But I also think it is an opportunity to deepen family bonds, especially between grandparents and grandchildren. Both women are lovely people, and I believe them.
Additionally, there is a separate two-bedroom, two-bathroom unit on the house that has not been used for years. I plan to spend two weeks cleaning and returning it to livable. This desire to improve property is important to the future.
What are you willing to sacrifice?
When I grew up in Malaysia, I had a friend whose four family lived in a studio apartment with bunk beds on the wall. By comparison, we shared three bedrooms and one and a half bathrooms with almost no difficulty. If I could successfully clean up the two-bedroom ADU, then we should have enough space to work with five weeks.
Don’t forget that we will be in Hawaii, not Kabul, Afghanistan. For me, it is as close to the heaven on Earth as possible. I think some people might even laugh at the idea that a free home that has been in Hawaii for five weeks may be considered a “sacrifice.”
There are many people who cannot take five weeks off. Some people can’t even take two. Many people who do take time end up staying locally to save money. My wife and I are currently liars and are lucky to have a free residence. This is my grandfather, may he rest in peace, imagined as he builds the house, which is enjoyed by our generation.
So no, no room service, no pool, toto washlet, and no 1000 thread counts. event. I am willing to give up on luxury to get closer to our goal of financial independence.
Nothing will stop me because I know that after 11 years of leaving my day job in 2012, I know how amazing it feels. I’m sure my wife felt the same when she lay off employees in 2015.
Think of more grateful alternatives
Whenever I start to feel unhappy with the lack of “perfect” situations, I remind myself to consider alternatives. Doing this always helps me feel more grateful for what I have. This is our realistic choice:
- There is another accommodation in San Francisco, Sonoma or Tahoe (not bad, but not Hawaii)
- Since their current eighth grade ended, we missed the new school where our kids might go to high school, which is the new school where our kids might go to high school
- Commuting in the city under fluorescent lights for more than 50 hours a week, trying to climb the company ladder
- A few weeks of travel (maybe a temporary escape, but how much does it cost?)
- Micro-managed by unsafe bosses and blamed by requested clients
- In my wife’s job, almost every month works until 10:30 pm
- Had to fight for freedom in our country and then die
- Hopefully I spent more time with my parents because we stayed in our place rather than with them
When everything is like this, spending five weeks with family for free in Hawaii sounds great. We will spend the weekend at my aunt’s beachfront villa or hotel to break things down.
I made more choices to achieve financial freedom
Choosing not to spend money on rental homes in Hawaii this summer is just a decision to help regain financial independence. Here are some of the choices I made for the first time:
- Living in a studio with roommates Spent two years in Manhattan to keep rent while building my career.
- Sharing the bedroom with my girlfriend Saving more actively over the year in a noisy 2 bed, 1 bathroom apartment in San Francisco.
- Save and invest every 13 years of biweekly salaryand I receive over 95% of the year-end bonus every year to maintain a 50% to 80% savings.
- Part-time business school Work about 20 hours a week and about 60 hours a week to save time and money.
- Wake up at 5 a.m. write a letter Financial Warrior Before heading to the office by 6:30 am, there were 2.5 years, and then after 9 pm, I wrote for another hour
- Purchased the second-hand Land Rover Discovery II Drive for 10 years for $8,500 instead of splurge on new cars like all my friends.
- Delayed children aged 3-4 Because I was too focused on my career and wanted to reach my target net worth first. This is one of my biggest regrets, just an older parent is waiting.
- Shrink to smaller and 40% cheaper homes in 2014 Save money and increase semi-circular income by renting out our front room.
- Skip dad’s night Part of the reason is that I don’t want to pay $500 for NBA tickets and dinner.
Some of you may not agree with the choice I made, and that’s totally OK. You are not me. Looking back, I thank most of them for allowing me to negotiate severance payments and rest freely when I was 34. I just hope I will focus on family planning soon.
The value of financial freedom is far greater than any sacrifices I have made along the way. It’s not even close.
The fun of saving and investing
This is something many people may not realize: for personal finance enthusiasts like me, Saving and investing brings joy. The more I save and invest, the more satisfied I am as a father. So skipping a $24,000 rental or a top-notch air ticket of $2,000 isn’t like deprivation, it feels like progress.
Every night, we lived in our parents’ house and saved another $800. This brings me more happiness than hanging out in luxury rents, and why the doom rolling stagnates is a key risk to the president’s latest tariff policy.
In Hawaii, I would rather sit outdoors – open air boarding, snorkeling, hiking, pickled or golf – sit inside. In fact, the more trash the place, the more motivated I get to leave my home!
Personal choice of goals
The choices we make in pursuit of financial freedom are very personal. If you don’t, you won’t be able to tell someone how to spend money.
Some people think I sacrificed too much. I think I’m receiving gifts – weeks with family in Hawaii, free stays and a chance to move towards my financial goals. It sounds like a victory for me.
When I reach my financial freedom target by December 31, 2027, I won’t regret not spending $24,000 on a rental home. On the contrary, no matter how inconvenient some moments are, I will thank us for the time we spent together. Ultimately, being with your family is the most important thing.
Reader, what choice are you making to get financial freedom as soon as possible? If you are already financially independent, do you see these decisions as sacrifices, or are you simply not a big deal? Is it natural to lose appreciation for what we have as we age?
Advice for financial freedom
By using AuthorizationThis is a great wealth management tool I have used and trusted since 2012. Empower goes beyond the basic budget and provides insights into investment fees and retirement plans. Most importantly, it is completely free.
If you want to build wealth of over 93.5% of the population, grab a copy of my new American bestseller, Millionaire Milestone: Simple Steps to Seven Numbers. With over 30 years of experience working, studying and writing finance, I have distilled everything I know into this practical guide to help you achieve financial success.
To speed up your financial freedom journey, join more than 60,000 people and subscribe Free Financial Samurai Newsletter. Financial Samurai is one of the largest independent personal finance websites established in 2009. Everything is written based on first-hand experience and expertise.
