Moving The Needle
Moving The Needle
I have been thinking alot about my own good and bad financial habits. Believe it or not, I hate dealing with details. I am much more of a big picture kinda guy. This definitely means that I don’t get mired in the minutia. But, I also have little patience for all the steps that need to be taken for some prudent financial moves. On some level, I am lazy. There are so many little steps I could make to further optimize my finances. Yet, I often find myself asking one basic question. Am I moving the needle?
Is the time/money trade off worthwhile? Often, the answer ends up being no. It may mean that in the end I am less optimized.
Passive Income
I love the idea of true passive or residual income. The idea is that after front loading the sacrifice, income streams can be maintained with little effort. Sounds great. Maybe a lot of work up front, but well worth it.
So I have set out a thousand times to create new businesses and develop new revenue streams. But I always hit a wall. Even the best of side hustles will likely bring in no more than a few extra thousand dollars a month, and they will come with a large commitment of time.
My hospice job, however, already utilizes skills I have invested in heavily in terms of time and money. It pays much more than even a successful side hustle. And it requires little energy. On top of that, it is enjoyable.
While building another passive income stream fits the financial independence playbook perfectly, for me its not moving the needle.
Tax Deferred Savings
I am a failure. I have not been doing my backdoor Roth IRAs. I don’t qualify for an HSA. I am much less advanced in my financial moves than almost any blogger who writes about these issues. Everytime I decide to to do the backdoor conversion I get stuck on all the steps. I have to move all my traditional IRA assets to my 401K. There is the issue of separating out deductible vs non deductible traditional assets.
I am embarrassed to admit that it all exhausts me. Instead, I focus on the fact that my wife maxes out her 401K and gets a match each year. I have a cash balance/pension plan and am able to put away more than six figures in tax deferred accounts each and every year.
Doing the fancy conversions and playing the tax game may indeed get me ahead in the future. But by expending the time, I’m not actually sure that I am moving the needle.
Even if I am dutiful with my Roth conversions, the amount in the account will be dwarfed by my pension and taxable accounts. I could optimize more.
I’m not sure it will matter
Frugality
I could be more frugal. I could eat out less and pack more lunches. What about travel hacking? I can think of a million ways in which I am leaving money on the table. There are so many jobs I could do myself instead of paying for them.
I could do my own laundry. Mow my own lawn. Quit my hospice job and stay at home to entertain the kids all summer.
The possibilities are endless. And they sound horrible. Maybe I would be moving the needle in the wrong direction. Gaining more in terms of net worth and less in terms of happiness.
Final Thoughts
I am far from perfect. I am no financial guru, passive income king, nor tax deferral expert. I use frugality when it suites me. I expend time and pay attention to these issues when I think it has a chance at moving the needle.
Otherwise, I except imperfection.
It will just have to be good enough.
Thank you for your honesty. I read this and it triggers many thoughts.
First, congratulations on your situation. You are where I want to be someday. You worked hard for what you have accomplished. I am really impressed with what you have, especially for someone as young as yourself. The line that got to me the most was: “I have a cash balance/pension plan and am able to put away more than six figures in tax deferred accounts each and every year.” Wow!!
I have hopes I will be able to reach your place in life, eventually, and I’m already retired. My issue is that I’m highly leveraged. Once the debt is paid, I might not reach as high as you have achieved, and will have more than enough to support my lifestyle.
Sometimes I struggle with motivation. Is all this work really worth the effort? Unlike you, I love the detail and struggle with the big picture. Guess everyone has their own struggles.
For me, it’s a matter of goals. What is my next goal? That is a question I ask myself when one goal is achieved. Once I identify a goal I truly want, I have been able to break it down into much smaller, actionable steps, then that is my daily focus. Once I reach my current goal, in about 10 years, “what will my next goal be?”, is something I struggle with today. In the mean time, I focus on my daily steps, and what I can do today to reach my current goal more quickly or easily. This is where I find my most happiness.
My next goal will probably not be financial. I’m thinking along the lines of “What can I do to make this a better world for the most people?” Or maybe “Where can I make the most difference?” Believe everyone who ponders these questions will come up with different answers. Everyone has different skill sets, different things they can, or want to, accomplish.
Things are very tight today so will have quite a few years to mull this over, and hopefully come up with another big audacious goal I would gladly work for. This is where I allow myself to dream, and I like to dream big.
It looks to me like you have achieved your financial goals. You are not a failure. That is a fantastic success story. I would call you a winner. Celebrate your win. It sounds like today you are celebrating with things like meals out, laundry and yard work done by others. You did it! Congratulations!
You are also sharing your success with others, with this blog, podcasts and classes you put on. More great success’s.
I hear you feel you have done, and are doing, what you set out to do. Have you achieved your goal and are in need of the next one(s)?
These are some of the things that come up for me. Hoping you find something that motivates you. I might be retired, and I’m not willing to just sit around and do nothing other than being “retired.” I believe being “financially independent” won’t be enough either, thanks in part to this post. I believe that would not be a good place for me to spend too much time. I need a purpose I can work on daily.
Thank you for giving me something to think about. Hopefully I have given you back something of equal value.
You definitely have. It all centers on what you value. What goals are worth striving for once money is not an issue.