Today, Ether to FI checks in with another of his bimonthly updates. Despite some unpleasantness in the markets, his family’s net worth continues to climb, as they’re now worth more than five times what they were when we first met them when he was fresh out of residency in July of 2017, an increase of nearly $400,000 in 17 months.
One of the Aces up his sleeve is something we have in common — a spouse that doesn’t like to waste money any more than he does.
It’s important to be on the same page as a partner when it comes to money matters, and when that page is titled “Frugality” while paired with a high income, wealth is sure to follow.
When my wife goes shopping, she doesn’t come to boast about all the really nice things she brought home. No, she brags about how little she spent and how amazing the deals were. It’s a lovely quality, and one that we share. When you’re married, money is not a single player game. Just be sure you’re on the same team like Mr. & Mrs. E.T.F.
Ether to FI: Frugal Spouses: The FI Superpower
The ultimate financial independence (FI) superpower is a frugal spouse. I have one, and you should get one as soon as possible. This secret was revealed a long time ago. In Tom Stanley’s Millionaire Next Door, he let the cat out of the bag. The first time I read the book, I thought used cars and small homes were the secret to wealth. Those are minor compared to who you choose to marry.
On the financial independence spectrum between make more or spend less, I lean towards the make more camp. Income from a W2 job is tied to the hours of your life you are willing to sacrifice in the pursuit of more money. The trade your time for money treadmill only goes so fast. Eventually, you run out of hours in the day and ultimately have to reduce spending.
If you have the misfortune of a spouse who has never seen an Amazon box they didn’t like and is on a first name basis with every cashier at the department store, I genuinely feel sorry for you. You cannot bring money into the front door of your house faster than a determined spendthrift can throw it out of the window.
In his book The Millionaire Mind, Thomas Stanley has a chapter called Choice of Spouse, which should be required reading for single people. Married people should probably read it too, as it might help us all behave better in the arena of relationships and money.
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The Frugality of Mrs. Ether to FI
Back to the heroine of this story, Mrs. Ether to FI. I have a lot of examples of her frugal tendencies which have helped save me from myself. The latest highlights her superpowers quite clearly.
Mrs. ETF’s nine-year-old car had a severe case of arthritis. It was beginning to creak and groan with every turn of the wheel. You could feel every bump in the road. Most annoyingly, it was going to the doctor’s office (aka mechanic) every couple of weeks.
It looked like it was time to start planning the funeral. The mechanic was finally able to present the chief complaint, and for a small fee of $1500, he thought he could fix the problem. told him it was time to upgrade, so he should hold off on the repairs.
I immediately started shopping for a 3-5-year-old Honda or Toyota replacement for our current car since they are both reliable car brands that hold their value. I estimated it would cost between $20,000 – $25,000 to get the used SUV I wanted. We could make the purchase in cash without touching our emergency fund.
I ran the scenario by Mrs. ETF. The idea of spending $20,000+ on a car made me a bit queasy, but it gave Mrs. ETF an ulcer. She reasoned the vehicle is probably still a good car if the mechanic wants to buy it from us and $1,500 is a lot less than $25,000.
I soon plugged it into an investment calculator, which showed $23,500 invested at 8% over 30 years is $236,500, without adding another cent. The mechanic received his $1,500, the arthritis was treated. The car has some more years left, and our net worth will continue its upward trajectory. Frugal spouse for the win!
The lesson of the story: marry someone more frugal than yourself. You are likely more frugal than the general population if you are reading this article. If you find someone more frugal than you, financial independence is basically guaranteed.
Net Worth Update
Home Net Value: Appraised value – mortgage, this little formula makes my spreadsheet look nicer. By the way, we bought a house. I will write about the home buying process in a future post.
Our net worth is bumping along. I had to adjust a lot of numbers down this month for our various investments. Could this be the rumblings of a recession on the horizon? My magic eight ball is broken, so the plan is the same as always. Buy, buy, buy.
Hopefully, we are headed down, so each dollar is grabbing a larger piece of Mr. Market. We made a decent size jump in our net worth in the last two months. It was a combination of buying an undervalued house and topping off retirement accounts at the end of the year.
Is anyone else excited that retirement account contributions are going up next year? $6,000 for IRA’s and $19,000 for your 401k. I was excitedly telling everyone at work and soon realized I had to keep the holiday cheer to myself. The general consensus was it was already too high to reach.
I could only shake my head.
It seems there are just a few of us in the FI bubble. I keep thinking the secret is out, and everyone will stop working, and leave all the tasks to the robots. I am sadly mistaken.
Happy holidays to everyone, see you in 2019!
The Chase Freedom Flex offers a 5% cash back on categories that rotate quarterly, 3% back at restaurants and drug stores, 5% back on grocery store purchases of up to $12,000 in the first year, and 1% back on all else. No annual fee.
That’s a good illustration of how little the market affects your net worth when new additions account for most of the fluctuation.
Conversely, we see how little new contributions affect my own net worth. We’re more at the mercy of the market. As I learned in my $10 Million Dream article, our future net worth (and potential path to $10 Million) depends less on me working and more on the market treating us well.
Lately, the market hasn’t treated us so well, but a correction has felt overdue for some time. If this drop evolves into the first bear market in ten years, I won’t shed any tears. It is bound to happen eventually, and I’d rather see the market drop and rebound while I’m still earning money and before we implement our retirement drawdown strategy.]
Follow Ether to FI’s progress to FI in his previous posts:
- Post 1: Introducing Ether to FI: A New Attending Striving for Financial Independence. Net worth $80,283
- Post 2: Ether to FI: Obeying WCI’s Ten Commandments & Net Worth Update. Net worth $145,194
- Post 3: Ether to FI: Home Days & Net Worth Update Net worth $176,674
- Post 4: Rest in Peace, E.T.F. A Love Letter from a Dead Man and a Net Worth Update. Net Worth $197,061
- Post 5: Ether to FI: Mrs. E.T.F., Are We on the Same Page? Net Worth $228,109
- Post 6: Ether to FI: Shifting Focus from the “FI” to the “RE” and a Net Worth Update. Net Worth $335,248
- Post 7: Ether to FI: Don’t Call it Retirement (and a Net Worth Update). Net worth $364,089
- Post 8: Ether to FI: Frugal Spouses: The FI Superpower & a Net Worth Update. Net Worth $429,155
- Post 9: Ether to FI: “I hate it. I hate it. I hate it!” Learning from Those You Disagree With & a Net Worth Update. Net worth $489,200
- Post 10: Ether to FI: Waste Not Want Not & a Net Worth Update Net worth $561,532
- Post 11:Ether to FI: Part-Time Work. Full-Time Life! And a Net Worth Update Net Worth $583,566
- Post 12: Ether to FI: Moving Targets & a Net Worth Update Net Worth $718,212
- Post 13: Ether to FI: Embrace the Dip & 2 Net Worth Updates Net Worth $682,028
- Post 14: Ether to FI: Time Waits for No One & a Net Worth Update Net Worth $937,709
- Post 15: Ether to FI: 3 Years to the First Million & a Net Worth Update Net Worth $1,023,261
WCI is having a sale on all courses with a free bonus course included with your paid tuition this week!
In honor of Financial Literacy Week, if you buy either the Fire Your Financial Advisor or the 2020 Continuing Financial Education course, you will not only receive 10% off, but also receive the Physician Wellness and Financial Literacy Conference - Park City course for free.
Do you have a frugal spouse aiding your financial wellness? Or is it the opposite? Give us an example in the comments!