The Differences Between Us

Ah traffic!  Just like the old days when I worked a 9 to 5 job, I recently found myself stuck in horrible commute traffic again.  Miles and miles of jammed-up traffic, barely inching forward.

Before you start thinking I’ve joined the ranks of the working again, you should know that this was during our recent family vacation to Texas.

Rest assured I haven’t re-joined the ranks of the working — I’m still very much enjoy my life of adventure, investing, making great food, and raising my kids.

We simply timed our travels badly and got stuck in Houston commute traffic.  Yay?

So there I was — stuck on the highway in our rental Nissan Versa amongst the endless ranks of giant SUVs and super-sized commuter trucks.  It would have been the perfect time to lay on the car horn and scream out the window about the injustice of wage-slavery and consumerism…

I totally should have done that.

Rather than road-rage like a crazy person, I reminisced about the decisions that got me to where I am today…

What decisions did I make that led to my different outcome in life?  What different path did I take to reach a life of financial independence at age 38?


Decisions, Decisions!

Are most people really all that different?

While it’s true that everyone comes from different backgrounds (some rich and some poor), our society still enjoys a fair amount of social mobility.  It is still very possible for a hard working young man or woman to rise from the depths of poverty to the height of wealth.  It’s unusual, but it can happen.

Attaining financial independence is very much the same; achieving a different outcome in life is really about making different decisions.

Make the right decisions and you could find yourself with a financially independent life — one without the need for a job, plenty of time to travel, and the ability to pursue whatever makes you happiest in life!

Make the wrong decisions, and you could find yourself in a mountain of debt, working at a job you hate, and living paycheck-to-paycheck (with nary an end in sight).

fork in the road
The proverbial fork in the road comes down to just a few important differences.

In my case, it was just a few investing decisions that made a HUGE difference — and I’m not just talking about investing in stocks or real estate.

I’m also talking about how I invested my time…


Difference 1: Education

Education is really where the differences started.  I view education that happens after high school as an investment with a potential return.

In my case, I spent the time (and borrowed enough money) to invest in a Bachelor’s degree.  By the time I got that fancy piece of paper, I’d rung-up over $50k in debt.

Lucky for me, the investment paid off.  I was able to attain a good job that paid a decent salary.  (Mind you — not a great paying job, just a good one.)

Getting a good education makes all the difference when you’re starting out in life.  Suddenly you’re no longer trying to survive on minimum-wage jobs, but you actually earn enough to have a little extra money at the end of the month.

It’s that extra money and what you do with it that makes all the difference.  If you play your cards right, it can eventually lead to financial independence.


Difference 2: Excess Cash

Some people view extra cash at the end of the month as “fun money” — money to be spent on restaurants, travel, entertainment, alcohol, or maybe some nice new clothes.  Anything not spent this month is then saved for spending at a later date.

This is really just deferred spending.

My view on excess money has always been a little different — instead of seeing excess cash as money to be spent, I saw this as cash that needed investing.

In the beginning, I wasn’t investing in stocks — I was simply using the excess cash to widening the gap between me and financial failure.  This first “investment” was a cash cushion to protect against potential job loss or other small financial disasters.

Eventually I started making “real” investments in stocks, bonds, REITs, or preferred shares.   It started small, just a couple of hundred dollars per month.  Those hundreds eventually became thousands — dollars that would never be spent on pleasurable pursuits like nice cars, travel, or fancy clothes.  It would be invested permanently.

300 dollars
At first, it’s just a few hundred dollars extra — but what you do with that money makes all the difference in the world!

Mrs. Tako and I saved our money carefully for years — and you can see exactly how much we saved in this post.

I never believed that excess cash was there to make my life pleasurable.  I viewed it as a lucky break that my skills were actually worth more than the cost of keeping me alive and sheltered.

One day everyone’s luck runs-out.  I was simply preparing for the day when it happened to me.


Difference 3: Investing Is A Skill

As the money began to build-up, I started to get serious about investing — I sent myself back to school for a masters degree, investing in even more education.  This eventually helped me get a higher paying job, which expanded the excess cash I had available every month.

Meanwhile, I spent every spare minute I had reading investing books.

You see — I’m a firm believer that the most important education happens outside the classroom.  A degree from a fancy college IS NOT going to teach you how to get rich — YOU have to teach yourself how to do that.

tako jr. studying
Education isn’t only something that happens at school!  Financial education is something you have to learn outside the classroom!

Some people attain wealth by simply becoming incredibly good at their jobs.  They climb the corporate ladder.  This usually leads to a high paying job, but also a very stressful work-life.

Other people achieve wealth by starting their own successful businesses.  This is a HUGE amount of work (usually far more than 40 hours a week), and many small businesses fail in the first 5 years.

For me, it seemed the most likely path to building wealth had to come from compounding.  I simply needed to compound my money for a lifetime and I would be wealthy.  (This is actually trickier than it sounds.)  In order to do that, I needed to be a good investor.

So, I read every investing book under the sun.  A few of them were actually really good books.


Small Differences Matter

These days, I have two kids and a lot less time on my hands… but I still work to continuously expand upon these three main differences:

  • I continuously try to educate myself and learn new skills — For example:  If something breaks, I simply teach myself to fix it.  (Mrs. Tako now believes I can fix anything!)
  • I carefully invest any excess cash.  I track our expenses closely (which you can see in my monthly reports) and we still spend very little on “entertainment” and other “junk” expenses.
  • I read every investing book I can get my hands on.  I believe investing is a skill that must be honed, and not a random lucky event.  I’ve become a much better investor because of it.

These differences don’t sound very big, do they?  They’re really not!

At first, they were nothing — tiny differences between me and the next person.  But, over time they’ve compounded into something much larger.

So the next time you’re stuck in commute traffic, think about this post — What’s the difference between you and the person in the car ahead of you?  Are you different enough to achieve a different outcome in life?  Will those differences compound to bring you a wealthier, healthier, and happier life?


[Image Credit: Flickr1, Flickr2]

29 thoughts on “The Differences Between Us

  • March 28, 2018 at 4:31 AM

    I had a sign on my computer for a long time that said, “A millionaire is made $10 at a time.” Those $10 are found in the places you mentioned–fixing things yourself, eating in, etc. I was looking at how much you and your wife were able to save in your taxable accounts. That’s really incredible. Those small differences have added up to a lot of freedom, Mr. Tako!

    • March 28, 2018 at 2:08 PM

      They definitely did. We got a lot better at being efficient as time went on too! 🙂

  • March 28, 2018 at 5:28 AM

    I think most don’t understand that financial independence is a relatively straightforward series of decisions. This is especially true for those of us who had the privilege of having stable childhoods. The hard part is being emotionally in a place you can make those “good” simple decisions. Your mind is harder to change than your habits.

    • March 28, 2018 at 2:10 PM

      Definitely — if you don’t have the right attitude, saving is going to be really hard!

      Also, having the right attitude about investing makes a world of difference.

  • March 28, 2018 at 5:47 AM

    “It’s that extra money and what you do with it that makes all the difference.”

    Amen to that! I think of wealth as a tiny snowball that you very slowly start pushing down a hill. Eventually, that snowball through the miracle of compounding picks up more snow as it rolls. Finally, it start getting bigger and bigger and just rolls itself with almost no effort from you.

    I think I first heard this analogy from Buffet, so I’m not being too original here. 🙂 But it is a great analogy!
    Mr. Freaky Frugal recently posted…Right investing effort

  • March 28, 2018 at 5:55 AM

    “My view on excess money has always been a little different — instead of seeing excess cash as money to be spent, I saw this as cash that needed investing.” See, this is where you and I used to differ a bit. Albeit I never went overboard on the spending, the lack of investing is where we got hit hardest.
    Lesson learned, moving on!

    • March 28, 2018 at 2:12 PM

      Seems like you’re a pretty good investor these days Cheesy! 🙂

      I think you’ve got it figured out!

  • March 28, 2018 at 5:58 AM

    These are all great decisions! I’m at the stage where I’m learning about investment while saving up cash at the same time. I think one of the biggest financial decisions of my life is marrying a frugal (not cheap) husband. It saves me lots of headache and money down the road 😀

    • March 28, 2018 at 2:13 PM

      Marrying the right person makes a HUGE difference. I was lucky enough to marry the best wife in the world.

      She might not be interested in blogging, but she definitely gets the concepts.

  • March 28, 2018 at 7:52 AM

    Ugh, I hate traffic with a passion too. It’s such a huge waste of time. Anyway, those are good inflection points. I still need to learn about investing more. The subject is pretty dry and you need to keep learning. It’s not easy to be a better investor.

    • March 28, 2018 at 2:14 PM

      Investing is something we have to spend our entire lives learning. Even Buffett and Munger say “We’re still learning”.

  • March 28, 2018 at 9:04 AM

    Education is huge. For the next generation it will be even tougher, we are now in a society where pretty much every job requires a degree.

    For us the biggest difference came down to simply volunteering to work overseas, where they paid our housing and gave us bonuses. This allowed us to invest almost every penny earned.

    • March 28, 2018 at 2:17 PM

      A degree used to be an easy way to bump yourself into the realm of “excess cash”. It’s definitely getting harder. The *right* degree helps.

      If every job requires a degree in the future, saving might just get a little tougher.

  • March 28, 2018 at 9:08 AM

    “I totally should have done that.”
    YES!! You should have. It would have been hilarious!

    Well I think it’s the compounding of Life too. One thing rolls into another, a good foundational education builds into a higher one. Without that and no one is different from a destitute coal miner left behind.

    • March 28, 2018 at 2:20 PM

      Too true Lily! The problem is, many people stop educating themselves once they get a degree.

      Today’s highly paid engineer is tomorrow’s destitute coal miner.

    • March 28, 2018 at 2:21 PM

      Hi Jim! Absolutely! Small differences compounded over a very long time make a huge difference!

  • March 28, 2018 at 10:12 AM

    “What decisions did I make that led to my different outcome in life? What different path did I take to reach a life of financial independence at age 38?”

    Self-reflection and a deliberate and strategic approach to your life and managing your finances is what lead you to the different outcome. Not rocket science but as you correctly point out, compounding your earnings for a lifetime “is actually trickier than it sounds”.

    The great thing about the modern age of the Internet is that there are plenty of resources explaining the many ‘different paths’ that lead to FI and the decisions that lead to them. All the knowledge required to get to FI is waiting ready to be stumbled across and for those looking to find it.

    I can’t imagine how people survived before t’interweb!


    • March 28, 2018 at 2:27 PM

      Back when I was a kid (just before the interwebs were invented), I spent a lot of time at the library and reading encyclopedia. Oh, and we memorized phone numbers! Crazy isn’t it?

      I can still remember about a dozen phone numbers from when I was a kid!

      Today, encyclopedias are almost extinct… which is probably a good thing! The biggest problem with the ol’ interwebs though, is the accuracy of the information is suspect.

    • March 28, 2018 at 2:28 PM

      Yep, the motivation and a winning attitude is required! 🙂

  • March 28, 2018 at 2:21 PM

    Where I come from, what you’ve done is commonly called “having your sh*t together”. Plain and simple. Or more professionally, taking active control of your life for a better outcome. Kudos!

    • March 28, 2018 at 2:33 PM

      Thanks Accidental FIRE!

      Believe it or not, there’s a whole bunch of people that would disagree with you — Some people tell me I’m wasting my life, and I’ll be living on the streets soon without a job. 🙂

  • March 29, 2018 at 11:09 AM

    ” A degree from a fancy college IS NOT going to teach you how to get rich — YOU have to teach yourself how to do that.”

    So true. Your mistakes in real life teach you way more than school ever could. And you’re right, the only different between you and the person in the car in front of you is growth mindset versus fixed mindset. One lets you continuously improve, the other makes you stagnant, blaming everything on fixed “talent” from birth. Investing isn’t a talent. It is a skill that is learned and then improved on, just like any other skill.

  • March 29, 2018 at 1:07 PM

    What a great way to think of compounding, in terms of skills and learning! It is so true, if you invest the time to learn how to fix your sink, you now have that knowledge forever. And it may pay off again in the future, or you may be able to help a friend or family member in a similar situation, or you could even start a side hustle someday if ever you needed the money/got bored. Just one small example, but you get the point. 🙂

  • April 6, 2018 at 2:07 PM

    Highly inspiring stuff! I tend to draw the comparison during bicycle commute season. Normally I’m thinking of how great I feel being able to pedal along unimpeded by traffic jams.

    I’d also contribute to the list that it’s really important to solve the happiness equation first before becoming a master of all things finance. We tend to pursue the almighty dollar pretty fiercely, often at the expense of relationships and pursuits less tied to money. Speaking for myself – it’s been a personal challenge.

  • April 12, 2018 at 4:15 AM

    Great post. You and I have followed a similar path. I wanted to be financially independent. I did not however aspire to become a CEO or to open my own business. The next option was to live a frugal life, save, and learn how to become an investor. It was a path that matched my personality.


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