While I just had a birthday, I did not receive any kind of ‘news’ on this day. I can still go by the moniker of NoTrustFund. However, I have been thinking a lot about what it would mean to have a trust fund. Not in a general sense, but for me specifically. Would I do anything different with my life? Would I choose to spend my time differently? In an ideal world the answer would be no, but in reality? And how much would I need to have so I could live my ideal life today, if I’m not already?
“It’s Between You Ears”
A very wise reader of mine who has many more years under his belt told me, “It’s between your ears”, when he first heard the title of this blog. And oh is he ever right. As I am still relatively early in my career, my human capital, or my earning power, is by far my most valuable asset and I don’t take that lightly. I have worked hard my whole life to study hard, invest in my education, and grow my career. I intend to keep growing and learning for the rest of my life.
However, I have also been focused on my finances and career from the second I graduated from college and I have seen how powerful it can be to have your finances in order. This focus has allowed me to graduate from business school almost debt free, put a 20% down payment on my first house, and build a nice retirement account for someone in their mid 30’s. With this kind of focus, and that of the like-minded Mr. NoTrustFund, what can we accomplish?
“Do Anything We Want But Not Nothing”
In my mind creating this ‘trust fund’ is very different than reaching our crossover point, or financial independence. While it might be somewhat close to this number, it is not a number that would allow us to stop working completely. No, when I think of creating my own trust fund I think of the line Buffet uses for discussing how much money he plans to give his children. He wants to give them ‘enough money so they would feel they could do anything, but not so much that they could do nothing”. This amount of money would be somewhere between a “F-You Fund” (a post I’ve been meaning to write since day one and still have not done) and financial independence.
Balancing Today With Tomorrow
Creating my own trust fund is about taking responsibility for my own life and thinking about what it means to have enough. It’s about coming up with a number where I would feel comfortable hitting pause for a couple of years. Not doing nothing, but also not gunning for the next promotion. Feeling like it’s ok to tread water for a few years while I put my family first. Or a number where either Mr. NoTrustFund or I could try something entrepreneurial for awhile.
Given the name of this blog I am a little shocked it has taken me this long to write this post. It seems so obvious as I write this, even though the idea only recently started forming in my mind. It is clearly at the root of wanting to take out a smaller mortgage and pay off our house as soon as possible. But beyond that how much would we need to have? College savings for the kids? Retirement savings of a certain amount? What if we want to send the kids to private school? Is just having the house paid off enough? These are the things I need to figure out, with Mr. NoTrustFund, but also for myself. As someone who has always been very financially independent, there are aspects of this idea that really are mine to figure out on my own before we can discuss the bigger picture as a couple.
So I’m curious. What would you need to have covered to feel like you had your own trust fund? Would you need to have reached your crossover point and be financially independent? Or some lesser amount? Are you shocked it’s taken me almost two years of writing this blog to get to this post?