I’m writing this from the great state of Michigan after a 19-hour trek from Florida. Ever since I got here I’ve been busy integrating myself into a new lifestyle, and I’ve been spending a ton of time with family. Of course, moving up on a holiday weekend means everything is crazy, and everyone is home from work and anxious to see me. It’s been fantastic to reconnect and take advantage of the small things in life which is hard to do when I’m almost 1,300 miles away from everyone.
So the costs are in for the big move, and it came out to: $131.89. Not bad!
This broke down into $117.42 for gas and $14.47 for food. Although, my last gas stop came only 15 miles away from my final destination. I was trying to make the cross-country move on less than $100, but it wasn’t meant to be!
I’ve read stories about people moving across the country and spending thousands of dollars on doing so, as professional movers with their big trucks can add up quickly. Well, I didn’t hire any movers. Furthermore, if anything didn’t fit in my little Toyota Corolla, it didn’t go with me. I guess this cheap and easy move across the States just goes to show how an attachment to material possessions can be an expensive habit. For me, I have a few items in my possession that I’d hate to go without: My laptop is probably chief among these items, as it would be difficult (but not impossible) to share this journey, check in with other investors, and follow my portfolio/passive income without it. But, in general, I just don’t need a lot of stuff around me to make me happy. I don’t derive happiness from stuff; I derive happiness from experiences in my life – experiences like writing, reading, investing, and the fantastic backyard barbecue I was a part of yesterday afternoon. And these experiences require time, which is really at the heart of what this journey to financial independence is all about.
However, while this move was financially inexpensive, it was costly in other ways. As I’ve discussed before, I left behind a relationship that was really fantastic. It’s hard to admit to someone that doing what’s best for your long-term happiness ultimately leads to separation from one another. Luckily, I couldn’t have asked for a better partner, and she’s been incredibly understanding and supportive through the whole process. She knows my family well, and she gets why I’d want to be closer to them. And, of course, I left behind Florida. Palm trees, blue sky, sunshine, and no state income tax. Just writing that sentence makes me think I’m crazy! I guess I miss the days of living extremely frugally while I ate super cheap and used my little scooter to get around town; those were golden years for me. However, we grow as people over time, and life changes. I would think life would be pretty boring if it were the same thing every day. So I look at this as an adventure, and I’m truly happy to be back near family after five extremely productive and successful years in Florida. The big challenge will be replicating some of that success back home here, so we’ll see!
As I mentioned above, this trip took almost exactly 19 hours. I drove straight through, stopping only for fuel and food. And I made sure to combine these two every time I got off the freeway. And since this drive was 1,289 miles that means I averaged 67.8 miles per hour over the course of the entire journey. Slower than I anticipated, but I think about 1/3 of I-75 was under construction. At least, it sure seemed that way!
So what if I were able to drive a little faster? Well, if I would have been able to average 73 miles per hour on the way up – still reasonable with the speed limit being 70 through most areas – I would have made it here in just over 17 1/2 hours. That’s an extra hour and a half of my life! And that extra time didn’t even require much extra effort. I think what this exercise shows is that just a little extra input over long distances makes a big difference in the results.
Now, think about that in investing terms. I’ve been investing for just over four years now – starting in March 2010. Let’s say I would have been able to invest just another $100 per month over the last four years. At a 10% annualized return – should be easy considering the S&P 500 is up 75% over the past four years – that’s an extra $5,921.18 in my portfolio, and that’s not even counting the extra two months of April and May due to the fact that most online calculators (like the one I used) like to use years for calculations. Plus, that return is much lower than what I probably could have produced. And that $5,921.18 would be generating $207.23 in annual dividend income based on a 3.5% yield (similar to my own portfolio’s yield). That’s an extra $200+ per year in completely passive income that would likely outpace inflation for the rest of my life, eventually growing into much, much more income as I reinvest it back into my equity stakes, growing the portfolio and passive dividend income. A drip turns into a stream pretty quickly.
Seemingly small sacrifices can make a huge difference over a great period of time. Extrapolating that $100/month example out over 30 years and you’re looking at $227,932.53. Now that stream turned into a river. Maybe I should grab a flotation device since this example is drowning me in cash, because that kind of principle is generating almost $8,000 per year in growing dividend income. And while this example excludes the effects of taxation and inflation for illustration purposes, you get the gist of how small steps can make huge differences over time. It just takes patience, persistence, perseverance, and consistency. Simple concepts, but extremely powerful allies if used correctly.
So remember to make the small sacrifices, reap the surprisingly big rewards over great periods of time, and enjoy both the journey and the destination.
Did you enjoy your holiday weekend? Do you believe in the power of small sacrifices over time?
Thanks for reading.
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