Optimize

We all know  there are Pillars of FI.  Principles that we hold dearly as we climb the precipice of financial independence, optimize, and heave ourselves over the top of the mountain.  These principles are straight forward.  They are the steam of our engine, the overwhelming cascade of waves that powers our water wheel.

Traditionally these pillars, in some version or another, center around making, saving, and investing.  Again, no rocket science here.  But I think we sell ourselves short by accepting those three as the end of the story.  In my opinion, there is one more pillar that is just as important and can supercharge the others:

Optimization.

Before we go there, lets review.

Make

These are the hustles and the side hustles.  We in the FIRE community are great at exploiting revenue streams.  There are countless blog posts, podcasts, and discussion forums about how to maximize the W2 Asset class.  We know how to produce, how to get promoted, how to ask for what we are worth.  The art of hacking our way into free graduate degrees and college educations.  We know how to maximize our skill sets in the work place.

We are side hustle kings.  Many of us have become defacto landlords.  We monetize our blogs. Sell on Etsy and Ebay.  We are financial consultants and subject experts.

We’ve got this one down.

Save

These are mostly our life hacks.  Again, we got this.  We know how to slash expenses, recognize the hedonic treadmill, and refuse to bend to hedonic adaption.  Also we utilize georbitrage, travel hacking, and go on spending fasts.

We talk about high cost of living geographies and move to lower.  Some of us have left  our houses and now we rent.  We use our bikes instead of cars.  Some have posted about the cost effectiveness of one grocery store versus another.

Let’s not even get started on mobile phone services!

We spend ludicrously low amounts a year, and yet still travel the world like kings.

Invest

Ok.  Low fee, broad-based index investing.  Move on.  Move on.  Nothing to see.  Avoid stock speculation.  In fact, avoid any type of speculation or bubble.  Tulip Mania, South Sea Company, Tech bubble, yada, yada.

Avoid paying tax at all costs.  Backdoor Roth.  Max out your 401k, 403b, HSA.  Roth conversion ladder.

I could go on and on, but it’s been covered elsewhere.

Optimize

This, I think, is the ring leader of all the other pillars,  To optimize is to make the best or most effective use of a resource or situation.  Those who are most successful in the FIRE community do this expertly.  They learn how to balance their time and activities into a stream-lined and highly efficient process.  Lets look at Mr. Money Mustache.

In 2017 he announced the opening of the MMM World Headquarters Building.  He bought a good property, underpriced, in an optimal location,  This was an opportunity to invest.

He quickly turned the building into a coworking and gathering space for Mustachian Entrepreneurs.  By charging a monthly fee, his long-term investment became an immediate money maker.

But then he was also able to save, because now he had a cool place to work and meet people instead of renting an office or traveling to restaurants and bars.

And on top of it all, he was able to have fun, build a community, and do a little carpentry on the side.

That is optimization!

My Example

I previously blogged about my not so frugal car purchase.  I didn’t, however, mention that the dealership is very close to a number of nursing homes I work at.  Previously, I would visit patients for an hour, than spend another hour at the computer writing notes.  Now, I do it a little differently.

I leave the nursing home immediately after seeing patients and drive to the dealership.  I  plug in my car and save on electricity.  Then I go into the building and enjoy a complimentary coffee.  That’s $4 that will no longer be going to Starbucks. I open my computer and using the free wi-fi, finish my charting on my nursing home patients so I can send in my billings and make money.

When I’m done, weather permitting, there is a hiking trail adjacent to the parking lot.  I can take a thirty minute walk, get some exercise,  and listen to a ChooseFI or the  Afford Anything Podcast and learn how to invest.

And that’s just the beginning.

In fact, I believe in optimization so much that even now as I am writing this blog, I am sitting in a meeting for one of the companies that I consult for.

Oh, wait, someone is trying to get my attention.  I better put this away…