New town, no job…no friends?

There is so much to look forward to when you move: setting up a new home, a chance to purge the junk you’ve accumulated, exploring your new town – just to name a few. All of those things and more are very much the same when you’re no longer working. In fact, you’ve got more hours available each day to enjoy them! And you can make those numerous Lowe’s / Home Depot trips at times far less busy than you could if you still worked. But there’s something important that you don’t often see discussed on FIRE blogs or videos: the challenges of making connections and building friendships in a new town without a workplace as a central meeting point.

A brief review of recent history

I left my job nearly fifteen months ago and my family moved a few weeks later. Our new home is about three hours away from where we used to live. That means our friend group of more than eight years is within range for weekend visits, but of course those require planning. In addition, all of my close friends are still working full time – or even quite a bit more. That means weekdays are totally out and weekends are their main time to “get everything else done”. So our availability is totally different, which makes perfect sense. Admittedly I have a hard time remembering this sometimes when awaiting replies to my many text messages (sorry!).

A few weeks ago there was an otherwise inconsequential event in my life that started me thinking more about this topic. As we discussed on a recent episode of Two Sides of FI, I had made weekend plans with friends near our former home. For perfectly sensible reasons, my friends needed to postpone. I was really disappointed, and even more so than I’d let on to anyone involved. The change of plans made me feel like I didn’t matter as much to my friends as they did to me – which was of course a very silly and wholly irrational reaction. But the emotions I felt were very real, I assure you.

Why was this little thing so impactful? I had really looked forward to those plans, it seems. But why? Sure, it would have been fun to see friends. But we didn’t have anything monumental planned for that weekend, after all. And we’d likely all get together in just a few weeks (we did, and it was great). The answer is pretty simple: I haven’t made many friends since we moved, and I’m almost solely relying on my out-of-area friendships for that connection. There are a variety of reasons I haven’t yet made many friends in my new town, COVID being just one of them. But there’s a simpler reason well within my control, and one I just hadn’t yet realized.

Making friends for the world to see

Your place of work is not the only opportunity to make friends, of course. Many people build friendships through civic groups, clubs, or places of worship. But at least for me, my closest relationships have always come from the workplace, so it’s what I know best. There is no easier place for me to find like-minded people, and the collision factor of working in an office provides many opportunities to learn about people. From there originate the kernels of what later yields close friendships. It’s a very different beast to start from zero in a new area where you are no longer working – at least for me, anyhow.

My ever-astute wife, Lorri, pointed out something rather eye-opening to me while filming 2SFI: I hadn’t really been doing very much to make connections and build new friendships since moving. Honestly I hadn’t really thought that my inaction was such a big part of it but of course she was 100% right. People clearly weren’t lining up on our doorstep to introduce themselves and hang out with me – I have no illusions that I’m so interesting or fun to be around such that they’d want to do that. So naturally I had to be much more motivated about the whole thing. Obvious, right? Truly, it hadn’t been to me until that moment.

Current status + steps taken so far

I’m not lacking for social interaction in our new town. In fact, one of the very reasons I took the job one day a week at the winery tasting room is for that engagement with others. That goal has been achieved, and I’m really enjoying it. But it’s not likely I’ll make effective friendships from a largely tourist customer base. However, just working in wine has given me a springboard to meet others in the industry who clearly share common interests with me, and that’s been great. Lorri works part time at a brewery. As you’ve gathered, I like beer, and frequent those establishments as well. So any of these things could well yield friendships. Recently, I’ve started to more actively seek out opportunities to meet industry folks. I think I’m off to a good start and have met some great people but clearly need to keep it up.

As I wrote above, clubs are also a great place to connect with people through common interests. Both Lorri and I are 20+ year homebrewers and love engaging in activities around beer. There is no local club dedicated to homebrewing in our town, so we are starting one! After polling for interest in a few online forums, our first meeting is a week away. I’m excited for the possibilities here. In addition to hopefully making a few good friends, this is also an opportunity for me to teach, something I really enjoy. So even if I’m wrong about it being a great way to make friends, I know I’ll find benefit from starting up this organization.

Where do I go from here?

I think persistence is the name of the game for me at present. As described, I’ve taken a few smaller steps to put myself out there more and actively seek opportunities to connect with people. And I’ve met some nice people who I enjoy hanging out with. But I also know that I’m just getting started. I need to follow up on the leads I have and also seek more. There are a few people with whom I feel there could be a connection. I need figure out if that’s true or if they might just be nice acquaintances. It takes time to build good friendships, after all – and that’s OK. I certainly believe it is effort well spent.

I will certainly continue to get together with my very good friends who live out of the area – several are irreplaceable in terms of their importance to me. And I don’t want that to change! But realistically, I also need to keep seeking opportunities to make friends locally. This town is where we’ve chosen to live and at least for the foreseeable future, will remain. It just makes good sense to find a couple of good friends nearby. Wish me luck!

image source: Photo by Duy Pham on Unsplash

How we decided where to live post-retirement: A discussion

Part 1:

Part 2:

We didn’t just throw a dart at a map and end up on the Central Coast of California, did we? Of course not! Those who have been following this blog for a while may recall that I’ve written about this topic previously. Re-reading that post, I think there’s plenty of good content in that article and I’d still recommend checking it out. But we can always improve on our work, right? To that end, our most recent Two Sides of FI episodes are a two-part series on this important topic. And in my opinion, the conversational format of our YouTube channel is a great match for this subject!

Of course not everyone chooses to relocate in retirement. They may well have a paid-off house in a town they love, have built up a network of good friends, and are very happy where they are. But particularly in the case of those who are on the FIRE path and elect to retire early, a move is often in the cards. This is commonly the case when one lives in a (very) high cost of living area, like the San Francisco Bay Area – as I did. My family really enjoyed the eight years we spent there, but had always planned to move to a lower cost of living area once I stopped working. That’s a great starting point, but how to proceed with the search to find a new home town, particularly when your options are so numerous?

To learn more about the process my family followed and how my show partner, Eric, is doing the same, please check out the videos linked above – or the podcast version (parts 1 and 2) If a move is definitely or likely to be in your own future plans, I think you’ll find value in the approach we discuss. If you would like a free copy of the “Where to Live” tool that we discuss, you can find one for download at the episode’s show notes.

Invest early and often to ensure your financial goals are met!

Last week we posted “Don’t Make These Financial Mistakes on the Path to FIRE!“, our longest Two Sides of FI video to date. We had so much to say on the topic that even with splitting our edited footage into two parts (part 2 is now live as well!), it was still long. Why? It’s simple: none of us come into this world as personal finance wizards. We stumble through life making financial mistakes in assorted ways. Most of us make lots of them! That definitely turned out to be the case for us, and we enjoyed discussing our many misses along the way. I encourage you to check out the video!

The episode originally had much less of a clickbait-style title. But when we saw the early traffic wasn’t at our usual level, we amped up our marketing! As I suspect we all know well, humans are rather emotional creatures. Many people worry a lot about money, often for very good reasons. But even the more fortunate among us are no less emotional about cash. So our sensationalist headline did result in an uptick in views! Thinking about our conversation in this episode prompted me to write about a common issue that we discussed: wishing we’d saved more, earlier. Read on and avoid our mistakes…

Most of us get a slow start when it comes to saving and investing

Few of us had the knowledge and/or initiative to become big savers growing up – even if we had jobs throughout our teens, as Eric and I both did. As soon as we start earning money, we generally spend it. Sure, plenty of us start savings accounts – we did too. But humans aren’t born with a desire to save and invest. Generally, someone has to introduce us to the concept and convince us of its merit. Unless you’re from a wealthy family, that often doesn’t occur until your first “real job” after high school or college – and only if you’re fortunate enough to work somewhere with a retirement savings plan like a 401(k) or a 403(b).

Even if we do take advantage of those workplace plans, many of us fail to realize the merits of participating fully. How many among us have contributed to a retirement savings plan but didn’t save enough to achieve the full employer match? That’s equivalent to saying “no thanks!” to free money. Yes, I know it can be hard in those early years. As I whined about often early in my career, I was the lowest paid of all my college friends in my first job out of school. It can feel like a real struggle to meet all your obligations and save enough. But even if not right out of the gate, as soon as you can, it’s important to kick up the savings. It will yield huge leverage over time as I’ll share below. Not doing that soon enough is a common financial mistake – one often not realized for many years. A sobering fact: according to Vanguard, in 2020 the median 401(k) balance at age 65 was only $65K. That means half have saved less than that.

The best time to start is yesterday and the second best time is today

So you got a slow start – or haven’t invested at all. Is it too late now? As some will know, one of my favorite podcasts is The Money Guy Show. I’ve been listening to it (now I watch on YouTube) for 8 or 9 years. The title of this section is something I’ve heard hosts Bo and Brian say many times over the years. Sure, it’s best to start saving early (and often), but is it ever too late? Technically, no – but playing catch up becomes harder and harder over time. One of my favorites of the great free resources they have on their website is the Wealth Multiplier. It describes how much money you need to save and invest monthly to reach $1M by age 65. How big of a difference can a few years of savings make? Check out this snippet from their chart:

My favorite take-home from this picture is one they point out often: you have an 88X multiplier on your savings when you start at age 20. In other words, every dollar you invest at 20 can yield $88 by age 65. By comparison, at age 25 that multiplier is down to 44X, at 35 it is less than 13X, and just over 7X by age 40. Download the full table and you’ll see that it only gets worse from there. Translating that into monthly savings, you’ll agree there’s a huge difference between saving $95 vs. $780 each month comparing ages 20 and 40. Wow, right? Particularly for those who don’t love math, I think this image best shows the power of compound interest over time as compared to a graph.

Putting it in context

Eric and I both saved early on and took part in 401(k) plans and other savings vehicles over time. But neither of us would say we took full advantage of those plans in our earliest work years when the multiplier was huge. As we discussed, we did have some financial missteps, challenges, and setbacks along the way – I got divorced, we had student loans, my expenses went up due to relocation, we started families, etc. But even so, in hindsight we know we could have saved more, sooner. We didn’t prioritize saving as early as we could have. Neither of us fully investigated the investment options available to us in those early years. We are both fortunate to have gotten much smarter about things eventually, and benefitted from our career successes which enabled financial catch up. But things could have gone very differently if we hadn’t.

I won’t go into all the details here, but there are many other aspects to consider on this topic, some of which we touched upon in the episode. There are a variety of different tools available for investing depending on the country in which you live; each of which has their tax benefits and other aspects to consider. In the US, these include Roth IRAs and Health Savings Accounts (HSA), just to name two. Particularly if you are early in your career or maybe even still in college, I encourage you to investigate these options. Roth IRAs in particular are a very powerful tool and are available to you as soon as you have earned income. Wisely, Eric has already gotten his working age kids into Roth plans!

But isn’t it difficult? I don’t know where to start!

Above all, don’t panic! This does not have to be complicated! If you have a workplace savings plan and are wondering how to get started, look into target-date mutual funds. These are simple and effective plans that run on autopilot. They have very low fees and auto-balance your portfolio between stocks and bonds relative to your age and time to retirement. And if a plan isn’t offered through work? Have a look at some of the Books listed on our Two Sides of FI website. In particular, I’d recommend The Simple Path to Wealth by JL Collins. This fast and easily digestible read is chock-full of investment guidance that you will understand immediately and can readily apply. It’s very popular for a good reason.

Now get out there and save! I wish you all the best in your financial journeys!

image credit: Photo by Tech Daily on Unsplash