The 5 Things That Mattered The Most

The market giveth and the marketh taketh away.  Lately the market has been doing a lot more taking away than it has giving.

That’s just how the investing game works!  Market prices can vary significantly in any given year, and investors often get way too focused on the price.

“OMG my stocks are down for the year!  I’m going to sell and put my money under a mattress!”

Umm… I hope not!  Prices for things change all the time and people don’t freak out.  Just visit your local grocery store for some great examples — Milk prices can vary every week, either up or down.  The same goes for eggs, meat, and almost all produce.  We live in a market based economy and this is just how things work — including our investments.

It’s unfortunate though, when a new investment heads south.  Investors feel the sting of not being able to predict the future.  That certainly happened to us this year.

We initiated a new investment late this year in Discover Financial Services (Symbol: DFS) and the shares are down 16% since we purchased.  Yikes!

Oh well!  We’ll just keep investing even more at the new lower prices!  If other great investing ideas materialize, we’ll certainly be adding to our portfolio.

But Mr. Tako, Where does all this extra cash for investing come from?

Mainly from our overwhelmingly huge cash pile, and our dividend cash flow engine.  There’s also Mrs. Tako’s income, and the ridiculously small amount of money this blog earns.  All together, we’ve got plenty of cash to keep investing when the markets are down!

We got into this cash-happy situation because we spend far less than we earn, and we’re still doing it today.

Some people believe this is done by pinching pennies, and self deprivation.  It really isn’t.  We lead a very full life — filled with plenty of great food, friends, hobbies, consumer purchases, and even travel.

The real reason why we reached financial independence is lifestyle choices.

So today, I’m going to spell them out…  The 5 Things That Mattered The Most.


1. Learning To Be Handy

From regular arrival of contractor and service trucks to my neighborhood every morning, it’s clear that most people aren’t handy.  They either lack the skills, the tools, or the time to DIY their life.

They simply hire someone to do the work for them.  Why?  Often they assume their time is worth more because they work at a fancy office job.  This can sometimes be a faulty time value of money calculation.

It can absolutely be worth your time to DIY a home repair.  I realized this, and it was a lifestyle decision I made.  I wasn’t born a handy person.  It’s something I learned how to do.

One day, after dealing with a string of over-priced crappy contractors, I simply decided to become a handy and “self sufficient” person.  It’s a skill I’ve been developing for years, and I’ve saved us countless thousands of dollars over the last decade.

The downside?  I probably missed out on a bunch of really good TV shows while I was DIY’ing a home repair.  That, and I’m probably about 10 pounds lighter from all the extra calories burned.


2. We Started Cooking More At Home

This is a lifestyle choice I harp on all the time.  People need to cook more at home to save money.  By this, I mean healthy meals filled with vegetables, NOT microwaving a frozen burrito and calling it dinner.

By my math, we’ve saved ourselves somewhere between $2,000 to $5,000 per year cooking at home.  This might not sound like a lot, but over the span of 10 years it really has become something significant.

butter lime shrimp tacos
Delicious food and a extra $5k a year? Yes please!

We weren’t always this way of course.  We used to eat out a lot…. and by “a lot” I mean three to four times a week.  (That might not sound like a lot to some people, but it was for us.)  Those meals-out probably amounted to $100 a week.

One day we simply came to our senses and decided to make a lifestyle change.  We decided to cook the vast majority of our meals at home.

Our bank account has been flush ever since.


3.  We Gave Up On Perfection

Everyone wants to live a nice life.  They like nice new things, and have this vision in their head about what a good life looks like.  The problem is that things get old.  They wear-out and break.  Fashion changes.  Technology improves.

A “nice life” usually doesn’t include a whole bunch of unfashionable clothes, worn-out appliances, an ugly house, or a smart phone that’s out-of-date.  Old stuff just isn’t cool.

You can chase that good life, but it’s going to cost you.  A lot.

My now 6-year-old Samsung Galaxy Note 2 is old and very uncool.  I honestly don’t care!

For the Tako family, we simply gave up on all that “perfection”.  We embraced the old, imperfect, and out-of-style.  This is entirely a lifestyle choice, but one that saves us gobs of money.

Rather than chasing what’s fashionable, we simply buy most of our “new” clothes from the thrift store.  It’s not “cool”, but we simply don’t care anymore.  Rather than buying a nice new car, we’re happy to keep repairing our older cars.

I’m perfectly happy living with older technology too — like my 6-year-old smartphone phone.  Sure, it won’t turn any heads like a brand-new iPhone will, but I’m extremely happy to have that extra $1,000 in my bank account.


4.  We Bought A Home We Could Afford

Here’s a lifestyle choice that I’ve written about before, but it hardly gets any notice — We bought a house we could afford.

For most people, the phrase “Buying a house you can afford” means the house payments consume less than half the monthly cash flow from your job(s).  This is very much a conventional view.

I have an entirely different point-of-view on the subject.  A home you can afford is one you can buy outright.  With cash.

Even buying a nice big home, we chose to always keep our assets greater than our liabilities.

This viewpoint is certainly not going to make me any friends with the legions of the house-poor, but it’s what we did.  And it made a huge difference.  Rather than buying a house immediately, we saved-up enough cash to buy our first home.

At the time, interest rates were extremely low — so we actually did take out a low interest mortgage, but this is a loan we know we can pay off at any time.  I could write a check today and pay it off.

Most people simply can’t do this.  Their liabilities (usually in the form of a mortgage, student loans, and consumer debt) greatly exceed their assets.


5.  Controlling Our Hobbies

Do you have expensive hobbies?  I don’t.  Nearly all of my hobbies are free OR they earn me money.

Controlling your hobbies is a lifestyle choice that I think most people ignore.  They choose a hobby because they enjoy it, not because they’re taking into account the financial impact of that leisure time activity.

Take this blog for example — I consider it a hobby that pays for itself.  Other than some initial seed money, I haven’t put any money into this blog.  Most months it manages to pay for itself and cover the hosting fees.

I also like to build stuff, and frequently post pictures of my projects on this blog.  Usually in the monthly expense reports.  I’ve made a number of furniture pieces, a bathroom stool, replacement shelf brackets for our kitchen, board games, picture frames, and most recently a bluetooth speaker.

speaker front
I like to build stuff like this bluetooth speaker. This hobby could consume TONs of money, but I make certain it’s a nearly free activity.

Rather than costing me money, I make certain my hobbies are as close to free as I can get it.  Most of my materials are salvaged, even the tools I use are mostly hand-me-downs or free.

This certainly is a harder way to go about entertaining myself, (with sometimes less than stellar results) but the financial impact to me is minimal.



That’s it.  Those are the lifestyle choices that I believe had the greatest impact on our financial outcome.   Individually they might not seem like a lot, but they allowed the Tako family to keep a high savings rate for a very long time.  Even with two kids.

Yes, it is possible to reach financial independence with two kids.

The idea that someone has to deprive themselves by eating rice and beans while living in a freezing cold home to reach Financial Independence, is just not true.  It’s mostly about major lifestyle choices, NOT pinching pennies.

Sure, our spending isn’t as low as it could be.  We could spend less.  But I believe good food and a warm house are relatively small expenses compared to The Big Stuff.  Get The Big Stuff right, and the rest of Financial Independence comes almost naturally.

I suppose we could have pushed our savings rate a percentage point or two higher by trying harder to save more (aka pinching pennies).  We might even have reached FI a few months earlier… but would we have enjoyed the journey?

Probably not.


[Image Credit: Flickr]

16 thoughts on “The 5 Things That Mattered The Most

  • December 12, 2018 at 7:32 AM

    Mr. Tako, great recap on how you reached FI so quickly. A lot of people love the idea of FIRE, but they don’t necessarily love the idea of sacrifice. The trick is to make it seem like you’re not really sacrificing, and then it becomes easy… and ultimately habit.

    BTW, that wood Bluetooth speaker is really cool! I bet you could make that into a viable side hustle (if you ever wanted to).

  • December 12, 2018 at 8:48 AM

    Well said. High savings / disciplined finances are kinda like maintaining the proper body weight – everyone knows what’s required, it’s the execution that makes many balk. There’s an overall philosophy governing your 5 things, and it’s led to a great system for building wealth.

    My eyebrows raised at the “warm house” comment, though. Wanna tell us what the thermostat is set at right now? 🙂

    • December 12, 2018 at 9:14 AM

      When the wife’s away, the heat is off. 😉 Plenty warm for me in the low 60’s. She likes it warmer though, and turns the heat up to 70F when she’s home.

  • December 12, 2018 at 9:37 AM

    One area we still struggle with is DIYing. We get frustrated and impatient and then call others in to help. But it’s a good reminder that fixing stuff yourself has been such a good tool toward FI for your family. It inspires me to keep learning (we also asked for a drill for Christmas).

    • December 12, 2018 at 2:52 PM

      It certainly is a skillset I had to work up to! We’ve easily save ourselves thousands of dollars every year by doing most things ourselves!

      Good luck with the drill!

      • December 17, 2018 at 12:40 PM

        I think part of it is a “framing” or mindset thing. Instead of thinking of it as something that simply needs to get fixed, consider it an opportunity to learn something new — and for those, like me, that work on a computer all day, an opportunity to get away from the screens and use your hands 🙂

  • December 12, 2018 at 12:11 PM

    Hi Mr. Tako – Ever considered having your wife retire to? It seems she doesn’t feel financially independent if she still has to work.

    We finally felt financially independent after both of us stopped working.



    • December 12, 2018 at 2:48 PM

      That’s really up to her. For now, I think she really enjoys her job. But ultimately I believe we’ll move to a much dryer and warmer climate.

  • December 12, 2018 at 1:55 PM

    I think this is a great, short list of ‘doing the big things right.’ Our household follows these same rules, without thinking much about it. Eating at home and buying a house we could afford were huge.

    I think hobbies are an often overlooked source of money drain. I struggle with this one as well. For me, it’s homebrewing- there are always newer, shinier pieces of equipment to brew my beer with.

  • December 12, 2018 at 8:10 PM

    Hi Mr Tako,

    I’m new to the blog, great content!! To be honest, my wife and I were terrible at being frugal. If we followed more of your list we probably could’ve retired earlier. With that said, we wouldn’t have changed anything. I knew savings was important so we automate most of it and invested wisely (like everyone else in the FIRE community), this helped us both retire in our 40’s.


  • December 13, 2018 at 7:53 AM

    Great point about the costs of phones. I’m currently a lecturer at a University and it’s surprising how much the students spend on their phones. In contrast, my 8-year-old Nokia C3 only costs me $25 a year but I did have to place a call and send an email with it in class as they didn’t believe it could connect to any current networks.

  • December 13, 2018 at 2:01 PM

    Can’t agree more, although from time to time I struggle with giving up on perfection.

    And the cost of a phone is crazy nowadays. I mean, dropping over $1k on a phone? No way man! Not to mention how expensive these data plans are.

  • December 13, 2018 at 3:21 PM

    You should really explore selling some of your crafts online. I think that wooden bluetooth speaker is beautiful and could easily sell (not sure how long it takes to make one and what price you feel would justify that commitment).

    You have mastered living a fulfilling life in early retirement and it is because you incorporate all those great principles/techniques.

  • December 13, 2018 at 4:23 PM

    I love being reminded that investing while stocks are down can be a good idea if you’ve researched properly. A company I recently bought is down 35% on when I bought them… but I bought at a peak and all the reasons I purchased the company remain valid (growth potential, fully franked dividends, stable business model).

    I’ve added to my holdings once already, and I’m gearing up for a second purchase.

    (P.S. Mr Tako’s tacos look amazing…)

  • December 27, 2018 at 3:52 PM

    Have you ever thought of starting an etsy shop to sell some of the stuff you and Mrs. Tako make? (like the awesome speakers). I feel like that would be a great side hustle, along with this blog. I know, extra work is probably not welcomed since you’re retired, but if you like doing it anyway, why not put it up and see happens? Or maybe write a recipe book? You definite excel in those areas 🙂

    • December 27, 2018 at 3:58 PM

      Actually, Mrs. Tako did run an etsy shop for awhile. She mostly made things like costumes and cute kids clothes, and did pretty good.

      I’ve definitely toyed with the idea myself, just need to find something interesting I guess! 🙂


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