Hi, I’m Mr. Fi Guy, or as the world knows me, Taylor. Why did I decide to start a blog educating people on such a boring topic like personal finance? I mean seriously, there are so many more exciting topics, but the issue is, few things can impact a person’s life like personal finance. So here’s a little more insight in the “history of Taylor” and why I’ve taken to personal finance at the ripe old age of 29.
I grew up in a great household. I had great parents and a big family with all the opportunity I could hope for. I never wanted for anything, and never really understood money since we always had enough. I just played sports, hung out with friends, and lived my life in the bliss of ignorance about the sacrifices my dad made to give me the life I had.
While I have never been really bad with money or made any huge financial blunders, my natural inclination is to spend. I set up my account with Mint.com back in July 2013 because I heard about it from a friend and it seemed like a cool service. At the time I was single and making just over $30k a year in my first job out of college. I was excited that I was able to consistently save money for the first time in my life, usually $100-$300 a month. Little did I know, a little fireball who would change everything was about to enter my life.
In late 2013, at the age of 26, I got married to my wife, who was earning a whopping $12 an hour with her freshly completed Bachelor’s Degree. Even though we were making barely any more money than I was when I was single, our Net Income skyrocketed. If you don’t believe me, check out the chart.
You can see when my wife’s income started in November (income is represented by the green bar) and when we both got our first big bonuses in April. The gray line represents our net income every month (after-tax income minus expenses). In the immediate months leading up to our marriage in October, my net income was actually negative… life happens. In the beginning, our saving wasn’t crazy, between November and May we averaged a net income of $1,081.
Because of my wife’s frugal tendencies, we were able to average a 40% savings rate for the first 7 months or our marriage, and it’s only increased from there.
The Richest Man in Babylon
Having a frugal wife was just the first half of the major life changes I experienced in late 2013. The second was a book written in 1926, The Richest Man in Babylon. My older brother recommended the book to me years earlier, but it seemed like a stupid book, and I didn’t think about it any further.
My first apartment with my wife happened to be directly across the street from a public library, and we started going there almost immediately after we got married (remember we’re frugal). For the life of me, I can’t recall what drove me to the business section, but I remember seeing the Richest Man in Babylon and I thought about my brother’s advice years ago and decided to give it a go.
I almost couldn’t put the book down, I finished it in 3 nights. The lessons and allegories that George Samuel Clason used to teach the simple lessons of building wealth and creating financial independence were truths that rank true to my financially illiterate mind
“A part of all you earn is yours to keep, it shouldn’t be less than a tenth no matter how little you earn” – Algamish, pg 14.
“Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.” – Algamish, pg 14.
“What we all call our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.” – Arkad, pg 29.
“It is the income one builds, the golden stream that continually flows into one’s purse that makes the purse alive.” – Arkad, pg 32.
“Before you entrust your investments into any field, acquaint yourself with the dangers which may befall your principal.” – Arkad, pg 34.
Since that time, I have continued to read more Books and my wife and I have worked hard to increase our incomes, but we have followed Arkad’s advice and have protested increasing our spending to match our income. Now our savings and Net Income is no joke (the chart below doesn’t even factor in savings to our 401ks, HSAs, or extra mortgage payments):
I share all of this not to pat myself on the back, although I am very proud of the progress we’ve made in less than 5 years and the 70% savings rate we’ve maintained over the past 12 months, but rather to highlight the simple path we’ve taken:
- Spend (way) less than we make
- Continually seek to maximize our income
- Resist lifestyle inflation
We don’t live in a shack, and we don’t live a life of constant deprivation and want. We try to cut out the crap and only buy things we truly value. We focus on getting the big things right once (setting up automatic direct deposits for investments, buying a reasonable house and cars, and getting our recurring expenses (insurance, phone bills, internet bills) as low as possible, and trying not to sweat the rest (although that doesn’t always work for my frugal wife).
Just as Arkad, the Richest Man in Babylon, taught me all those years ago, I hope to offer simple tips, tricks, and principles that can improve your life and give you a brighter future, a future you can look forward to.