Courage and Compound Interest

When you learn about compound interest for the first time, it will blow your ever-loving mind. The example often given is this: would you take $1 million today, or a penny that doubles every day at the end of 30 days.

Most people would take the million. But people who know about compound interest will take the penny.

They know that, in the beginning, the penny will look like the wrong choice. On day one, your penny is doubled to two pennies, day two you have four pennies, day three you have eight pennies, and so on. After around 20 days, you will still only have $5000.

Maybe you should have taken that million.

But hold on, because this is right where things take off. At the end of the month, a mere ten days later, you will far surpass $1 million, your final take home would be closer to $5 million.

This is the basic idea behind investing early and often. The more you can invest and the earlier you can invest it, the greater the likelihood that compound interest will start creating wealth in ways you may never have imagined.

The concept of compounding isn’t just limited to money. I personally believe it extends to our skills as well as mastery of new information.

I’d like to think that, since retiring from my profession (thanks to compound interest), I have the unique opportunity to compound more than just money. I’m building new skills as we speak (or, as I type to be exact). I look forward to engaging in my world in new ways. Which is not always easy or straightforward.

In order to do that, I am also building the skill of being able to be uncomfortable.

And thank goodness I am.

Because, any time I am in a new group of people something uncomfortable happens.

We get to talking, introducing ourselves, and the question comes up. “And what do you do for a living?”

When I answer that I was a dentist for nearly twenty years but chose to retire early, I am typically met with raised eyebrows.

More polite people will look at me in disbelief before gathering themselves and saying something like “Wow! Good for you!” Followed by “What do you do with your time?”

But, there is a certain percentage of people who will actively push back. Claiming that it cannot be possible to do such a thing. That it seems a waste of an education.  They ask me if I’m worried about finances or the potential for destitution.

Now, maybe it’s my youthful genetics. Maybe it’s the Botox. Maybe it’s my sparkling personality. But I get a strong sense of parental shaming in these scenarios. As if I am a teenager making a flippant decision that will land me face down in ditch in my eighties, starving because I could no longer afford cat food.

Not exactly light cocktail hour fare, but it happens from time to time.

What I find most interesting about this push back is that it comes from people who have never had the financial terror of owing $200k + in student loan debt. Or who never faced being fired for having a baby. Or who bought their first house in the 1970’s with one part time income while going to university.

The thing is, I’ve thought a lot about finances since I was a kid.

To start, I grew up in average household in a very wealthy town. There were differences between my family and a lot of other families in my town. We had everything that we needed, but the contrasts were obvious to me.

Beginning at the age of 13, I worked most evenings and weekends in order to afford things like gas or clothes, but also to save for college. While I got a few scholarships, it was nowhere near the amount needed to pay for college. So, at the ripe old age of 18, my parents co-signed for my student loans.

I remember feeling distinctly uncomfortable about this.

Being in debt to anyone weighed on me.

But everyone like me took out loans (not the kids whose dad’s names were on their ivy-covered college buildings). I lived with uncomfortable feelings about this throughout my schooling. During summers, I worked my ass off to try to cover the costs I could. Every month while school was in session, I filled out scholarship applications and did essays.

There was one summer where things were so financially tight, that I picked wild herbs and other edible plants to flavor my food and supplement a meager diet of beans, rice, and bread.  Throughout this summer, all I thought about was whether or not I might make enough money for my family contribution to my tuition. It was make or break. If I couldn’t make enough, I would have to withdraw from school.

And on and on.

The fact is, I have not only thought about my finances, but I have also been really close to the edge of the aforementioned ditch. And honestly, there was wild asparagus growing there.

More to the point, money has been front of mind since I was fairly young. I always needed a strategy around it, around having enough.

Stepping away from work sounds extreme, maybe like a flippant decision. But the fact of the matter is that it was calculated and executed with a great deal of thought, and more than a little bit of anxiety.

But before I go totally off the rails in, let’s just be honest here, this rant…I want to pause and acknowledge something.

If you’ve never seen anyone do something another way, then the possibility might not exist for you. I mean, until I learned about the possibility of achieving FIRE, I might have never tried to achieve it. But, it took a bit of discomfort to realize that I needed to change, that I needed to be open to a new possibility.

The cognitive dissonance of meeting someone who is doing something different, feels untenable. The hostility I encountered over my early retirement wasn’t against me, per se, rather it’s against a new idea. An idea never encountered before.

But, and maybe this is why this is a rant, people who give me the most push back are those who think that I am not their equal in some way.

Meaning, if it was easy to retire early, loads of smart people, like them, would be doing it. And I think people feel uncomfortable unpacking that… which is where the parental lectures are coming from.

To a certain degree, they are totally correct. I’m not all that smart. I’ve made a great and many financial mistake in my day. A lot of it was due to ignorance. Some of it was due to unavoidable life circumstances. But most of it was because I couldn’t clearly see a different possibility. 

But when I did, I went for it; I dove headfirst into the various discomforts of a new way of being. I had to have the courage to be unconventional.  Even if it meant picking wild onions and lambsquarters by the side of the road.

Because, like compound interest, each seemingly silly or countercultural decision I’ve made has more than doubled not only my net worth, but my ability to withstand, and empathize with whoever just doesn’t get it. 

And empathize I do.

As I’ve mentioned elsewhere in the blog, it took an existential crisis for me to realize the possibilities in my own life. To admit to myself that I was running someone else’ playbook. It took me years of denial and discomfort to come face to face with my fears and insecurities. And I’m still finding new things to face every year.

Like uncomfortable cocktail party conversations.

But, as I gain comfort with discomfort, I can smile through these difficult but skill-compounding situations. They are just another shiny penny invested well.