Mike Tyson once said “everyone has a plan till they get punched in the face.” The opposite was true for me. It took a solid punch to the face for me to wake up and realize that I needed a plan. This is the story of how my 14 months of extended unemployment led me down a path to financial independence and early retirement.
High School Sweethearts
This story doesn’t start with my extended unemployment. It begins in November 1998 when I married the girl I’d dated throughout high school. Three months before we got married I had enrolled in my Sophomore year of college and was living several hours away from her. But after 3 weeks I couldn’t stand the thought of being away for another day, so I withdrew from school and moved back home to be with her.
A few months later we were married. I was just a week away from turning 22 and she was 20.
Work or School?
After moving back home the plan was to get married and start creating our new life together. I’d gotten a full time-time job as a car salesmen. I’d work during the day and go to school at night. But being a car salesman provided a few challenges:
- The hours were long
- It was 100% commission-based
- The pay was good … if you could sell
Long hours on the car lot interfered with class and study time. I was making more money by selling cars than I could make anywhere else with just my high school diploma and no work experience. So although the commission-based nature of the job made my paychecks very inconsistent, the money was still decent and quitting for a lower-paying job with better hours didn’t seem like the right move.
I’d picked a job that made it very tough for me to go to school.
Choosing Work over School
So I sold cars full time for just over two years instead of going to college.
Eventually I left the car business and took an office job where I was selling merchant accounts over the phone. The pay wasn’t as great, but at least I had an hourly rate, which made budgeting easier. Plus, I could still earn commissions, so the potential for more money was always there.
But I wasn’t a great salesman. So that larger paycheck never really materialized.
One day while sitting at my desk I vividly remember thinking to myself, four years from now I can still be doing this, or I can be a college graduate with more options.
Choosing School over Work
Four years later I was a college graduate with more options.
Shortly after I’d had that epiphany my wife and I took the steps necessary to get me enrolled in college. She worked one and two jobs at a time to cover the majority of our bills, and I overloaded my class schedule and enrolled in summer semesters to graduate ASAP.
While going to school full time I took on a few part-time jobs and picked up some side hustles here and there, got student loans, and even received a scholarship to help get by.
During this time we had babies #1 and #2, so we were also both sleep deprived the whole time. Being poor and exhausted sucks in every conceivable way.
It took three just over three years to earn that degree, but we finally got it, and in the end were rewarded with our first “real” job that paid a respectable wage.
My salary was $36,000 per year and it felt like we’d hit the lottery after squeaking by financially for so many years. This newfound wealth was also our first experience with lifestyle creep.
More money lead to a better apartment & newer car. No savings though.
Climbing the Corporate Ladder
I consider myself to be a reasonably bright guy and a hard worker. My boss must have thought so too because over the next 3+ years my starting salary grew from $36,000 in 2005 to just over $60,000 in mid-2008. We were also further in debt than we’d ever been, and still didn’t have a penny saved.
2008
By this time we were rollin’ in two new cars. And living in a brand new house (bought at the peak of the housing market). We also had a few grand in credit card debt.
2009
In late-2008 I took a new job with a new company and got a small raise, and a lot of job stability. I really liked this company and job. My salary was up to about $75,000 per year, which I liked quite a bit as well. Baby number three was born in 2009.
2010
In 2010 I was recruited away by another company that was offering a 15% raise. Although I enjoyed my current job and company, greed took over and I accepted this new job, along with their raise and I was now earning $84,700 per year, with a 10% bonus and great benefits. Baby number 4 joined our family this year as well.
In just a few short years my salary had climbed from a then eye-popping $36,000 per year, with no benefits, all the way up to $85,000 plus bonuses, stock options, a 401k, health, dental and vision benefits.
I was 34 years old. I’d been married to my high school sweetheart for about 11 years. We had four amazing kids. Life was good!
But the future wasn’t looking so hot. We had exactly $0.00 saved and a total net worth of negative $305,000. Change was needed. Quickly.
Changes
About this time my wife and I came up with our ‘Get Out of Debt Plan.’ I knew something needed to change financially and one day while driving home from work I stumbled across the Dave Ramsey radio show. I’d never heard of this guy before, and on this particular episode Dave was, rather harshly I think, telling some poor sap to sell their freaking cars and swap them for something they could actually afford.
I was amused at the “tough love” this radio guy was dishing out, but at the same time his advice to the caller resonated with me, and a seed was planted. I’d realized that in one fell swoop I could not only eliminate many tens of thousands of dollars in car debt, but we could also free up money each month that could be used for paying off other debts.
The thought of creating a bit of financial breathing room was exciting!
Destroying Our Debt in Two Weekends
I approached my ever-supportive wife with a plan to eliminate all debt, with the exception of our house, ASAP. She was on board and within about two weeks I’d sold both of our new cars and was left with about $6,000 left over from the transactions.
My wife’s new SUV was replaced with a low’ish mileage, 9 year old minivan. We paid about $5,000 cash for the van and with the remaining $1,000 I bought a then 20 year old car with unknown miles for $700 (it was a 1989 Dodge Ares K car).
The van, while still a used minivan, at least looked nice. My K car however was butt ugly! I didn’t care though because both cars were paid for and it felt great! And just like that we’d eliminated a huge amount of debt and freed up a significant amount of money in our monthly budget.
About a month later I was unexpectedly let go from my job and didn’t find another one for 14 very long months.
I refer this this time of extended unemployment as our Dark Year.
The Dark Year: 14 Months of Extended Unemployment
The minuscule amount of money we’d managed to start saving was gone almost instantly. Unemployment benefits were just enough to keep food on the table and lights on in the house, but not much else. Had we not sold our cars when we did, they almost certainly would have been repossessed by the banks.
We were in serious danger of losing our home, which we’d bought in late 2008 at the peak of the housing market. We were so far underwater on the home that we couldn’t sell it unless the bank was willing to agree to a short sale.
After a about 4 months my unemployment benefits ran out. Two more times during our Dark Year I would apply for, and receive, an extension of these benefits. But unemployment benefit extensions don’t, and shouldn’t go on forever. Eventually that well ran dry.
In an attempt to get our hands on whatever cash we could, we sold almost everything we owned that had any value at all. My wife and I took a janitorial job cleaning an office building one night per week. An old high school friend let me work for his demolition company for a few weeks. Another friend threw a couple of freelance projects my way. My parents and in-laws put tires on our car and bought groceries for our family more than once.
Thank God for family and friends!
The Unsuccessful Hunt For Employment
During this fourteen month period it was my full-time job to find a full-time job. As days turned into weeks and then months, the pressure to find employment kept increasing.
That mounting pressure began to negatively impact my ability to interview well. Knowing how desperately I needed a job, I felt the weight of the world each time I’d interview, and I’d choke. There were times that I could feel interviews slipping way, and it was beyond frustrating.
I walk away from other interviews thinking that I’d just nailed it! Then I’d hear nothing from that company, and it was depressing.
Extended unemployment was affecting every aspect of my life. As a husband and provider this was a soul-crushing, humiliating, confidence-destroying time which mercifully came to an end when I *finally* received a job offer in November 2011.
A Light At The End of the Extended Unemployment Tunnel
A couple of times during my extended unemployment I’d flown out of state to interview with potential employers. In October 2011 I’d been flown to Seattle for interviews with a well-known company. It had been a grueling two and a half day interview process, that I didn’t think had gone particularly well.
When it was all over I was at the airport, boarding my return flight home when the job recruiter called me. I’d just left their campus a couple of hours ago. “If they’re calling this soon, it isn’t with good news,” I remember thinking to myself.
I answered un-enthusiastically, anticipating the bad news, “Hello, this is Ty.”
“They LOVED you and want to offer you a position!” the recruiter excitedly responded. My eyes immediately welled up with tears and the lump in my throat was painful.
I couldn’t believe it! I was sure I’d bombed the interviews. Could this really be happening? I hung up the phone and immediately called my wife to tell her the news. Our Dark Year was coming to an end.
Surviving Extended Unemployment
This new job would take us to another state over 1,000 miles away from home, away from our family, friends, and all that was familiar to us. But there was not a chance in hell I was going to turn it down. I’d tried unsuccessfully for a year to find work in our home state, but had no luck.
Righting our ship required us to take some drastic moves, which after being unemployed for so long we were happy to make. But even though we had this job offer in hand, actually moving to a new state and coming up with enough cash to cover first and last months rent (plus a deposit), plus moving expenses wasn’t something I could do on my own.
My final slice of humble pie came when I had to ask my dad and brother for money to help pay for a moving truck and cover our rent.
Those were some extremely tough times. I’m glad they’re in our rear view mirror.
Present Day
Fast forward just over seven years and I’m still working for that same company. A few weeks ago I turned 42 years old and a just a few weeks before that I celebrated my 20th wedding anniversary with my high school sweetheart.
Our four kids now range in age from 18 to 9 (boy, girl, boy, boy). My wife stays home to take care of our kiddos. I’m the only source of income for our family. We live in the Seattle area, which is the 8th most expensive city in America to live in, and we’re thriving on a single income.
But it hasn’t always been this way. Only recently, at the ripe old age of 35, did I finally get serious about finances and retirement, oddly enough because of a link I found while browsing a college football message board. That day two guys were having an online argument about whether or not Costco was worth the cost of a membership (it must have been the off season).
Discovering FIRE
Early in my Dark Year I found this link to a blog post where a guy that called himself Mr. Money Mustache had done a Costco vs. Safeway comparison. I read through the Costco post. Then read another post. Then I stumbled upon an article that literally changed the course of my financial life titled The Shockingly Simple Math Behind Early Retirement.
Right there before me, laid out in shockingly simple math, was a path to financial independence. For a guy that was pretty much just going along with the ebbs and flows of life, this was like a lighthouse calling me in. Who knows how or why these things happen, but that blog post resonated with me.
It didn’t matter that I was flat broke, unemployed, had no job prospects and was in danger of losing my house. I couldn’t stop thinking about this concept. I was curious about my own situation and what it would take to retire early, and without even knowing that it had happened, I was officially all-in on the FIRE movement.
Prior to that point in my life I was like a lot of people that know they should be saving, maybe they even do save a little bit, but they don’t know what to do with that savings. Or how much to save, or what else they could and should be doing.
So we end up just plodding along through life knocking out one day at a time and before you know it you’re approaching retirement age and hope like hell you’ve got enough saved and that Social Security covers the rest.
How Extended Unemployment Led me to Financial Independence
It took a solid punch to the face for me to get serious about money. It wasn’t until I lost my paycheck that I realized just how dependent upon it I truly was.
During this time I also came to understand that the best thing money can buy is freedom. And financial freedom really doesn’t cost that much.
When I started my new job I vowed that I’d never put my family in a situation like that ever again. It’s been just over seven years since I accepted that job and now we’re just a few years away from financial independence.
Finishing Strong
Today life not only feels good – it is good! We’re not there yet, but we’ve got a plan to Get Rich Quick’ish, reach financial independence and retire early. Rather than buying stuff (i.e. garbage) with our money today, we’re investing it so that we can buy our financial freedom tomorrow.
The plan is to retire early at 49. When all is said and done we’ll have gone from broken and unemployed to financially independent in 13 years.
Chime in!
Thanks for reading. Have you gone through extended unemployment? How did you get through it?
- Ty Robertshttps://www.campfirefinance.com/author/ty-roberts/
- Ty Robertshttps://www.campfirefinance.com/author/ty-roberts/
- Ty Robertshttps://www.campfirefinance.com/author/ty-roberts/
- Ty Robertshttps://www.campfirefinance.com/author/ty-roberts/
- Ty Robertshttps://www.campfirefinance.com/author/ty-roberts/
LIGHT A FIRE UNDER YOUR RETIREMENT!
“Best thing money can buy is freedom”. Beautiful. Great article that outlines how certain events can change the way you manage your finances.
Thanks for this, really reiterates how U am living and how I choose to manage finances.
Thanks, Pete. Glad this resonated!
What an inspiring story! Bouncing back from such a long employment period is certainly not easy and I’m glad you’re making great progress towards early retirement.
Thank you, Little Seeds! Finding a new job was just the first step to bouncing back. It took even more time to catch back up and get to the point where we could begin making progress. That probably requires a follow-up post to go into all of those details!
Wow! What an amazingly inspirational story! Turning a dark time in your life around to being able to retire at 49 just goes to show we should never give up. Thank you very much for sharing.
The Dark Year fundamentally changed my relationship with money. Not sure if I’ve ever recovered from it, or if I’ve become a new person because of it? Either way, I’m glad it’s over and I’m really looking forward to turning 49 🙂
Ty,
Thanks so much for sharing your story. I loved the line, “And financial freedom really doesn’t cost that much.” That’s what I try to tell my family when they tease me about our “obsession” with FI. It only takes a few tweaks over time, and we don’t feel like we’re giving anything up. In fact, as our money situation has become stronger, we feel like we’ve gotten so much more than just worthless consumer junk.
My husband’s two layoffs in one year were also the catalyst for us to change our money situation and start on the path to FI. There’s nothing like a layoff (or two!) to change your plodding-along perspective.
Two layoffs in a year? Yikes!! I’m 100% with you – changing your approach to the big ticket items (housing, transportation and food) goes a long way! The hardest part seems to be changing your attitude and view on money.
Thanks for sharing
Sometimes I tell people that I am reaching for fire as a form of unemployment insurance
My own 7 month unemployment thought me how little I needed to get by on
I felt like hell because I did not have a job but when I look back on it I did not spend more then my unemployment insurance check
No health insurance no kids
But I was ok
I use to believe I needed 10k per month to retire now I have 4K for rental and goal is 6k
At 6k I am good to go should be there in 1-4yrs at 45
People say never use fear to make decisions but the fear of not having income is what made me buy my first 4plex and reach for fire
Fear is a great motivator for me in this case and I can’t wait to start cashing in on this self-funded unemployment insurance that I’m building 🙂
Thanks for sharing your story Ty. It’s inspirational. Anyone can turn it around if they put their mind to it. Great job putting yourself and your family in a position to become financially independent.
Luckily, I never had to deal with unemployment. Those 14 months sound really rough.
All the best.