After publishing Why We Keep Spending Even Though We Know We Shouldn't, I realized something important: the real reason I wasn’t willing to spend on a vacation rental this summer is because we no longer have financial freedom. I didn't think about this fact until after I got a lot of feedback from readers on how I should spend my money.
After buying our latest home, I sold a significant amount of stocks and bonds to pay for it in cash. As a result, our passive income temporarily dropped from around $380,000 to about $230,000.
Given our annual after-tax expenses were around $260,000 at the time, we suddenly had a deficit. And by my definition, financial freedom means having enough passive income to cover your desired living expenses. The definition of financial freedom using the 4% rule is also a good one, but not as challenging.
Justifying the Decision To Save
While writing that post, I justified not spending on a vacation rental for the following reasons:
- It didn’t feel right to spend on lodging when we already had a free place to stay consisting of 3 spare bedrooms.
- None of the rental homes felt like reasonable value, nor were there any sub-$10,000 options with 4 bedrooms.
- We could use that money to invest in our children’s custodial accounts to help them launch in the future.
- The micro-interactions of living under one roof create meaningful bonding opportunities for the grandchildren.
All of those are valid points. But the main reason I didn’t include? I’m on a mission to regain financial freedom by December 31, 2027, and spending $24,000 (or any amount) on a rental home we don’t need doesn’t help the mission.
If there’s one thing about me, it’s that I’m relentless when it comes to achieving my goals. Whether it was committing to publish three posts a week for 10 years after launching Financial Samurai in July 2009, or vowing to be a stay-at-home dad for the first five years of both children’s lives, I don’t stop until the mission is complete.
The Choices We Make To Achieve Financial Freedom
After renting out our house for a year, selling it for a profit, saving more, and reinvesting part of the proceeds, our passive income has rebounded to about $320,000. Hooray for higher yields and interest rates, along with discipline and time!
Unfortunately, with both kids now in private language immersion school, our annual expenses are around $288,000 after tax. That’s about $360,000 gross, meaning we’re still running a ~$40,000 gross annual passive income deficit. At a 4% rate of return, that means we need to accumulate at least $1 million more in investable assets.
When the stock market was tanking in April 2025, we were closer to $2 million behind our investable asset goal. Holy crap! That was a downer moment.
While I could rebalance our portfolio into more income-producing assets to cover all of our expenses, I’ve long been a believer in growth stocks and private growth companies, especially now in the artificial intelligence space. I want to let those investments run.
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Controlling What I Can Control
Without a steady paycheck to cushion any financial shocks, the main lever I can pull is controlling expenses. So, I made the decision not to spend $24,000 on a four-week vacation rental. At a 4.3% risk-free return, that money could generate $1,032 a year in passive income every year. That's another step closer to financial freedom.
Yes, having my mom and wife under the same roof for five weeks is a sacrifice. But I also see it as a chance to deepen family bonds, especially between grandparents and grandchildren. Both women are lovely people and I believe in their ability to live harmoniously.
Plus, there’s a separate two-bedroom, two-bathroom unit attached to the house that has gone unused for years. I plan to spend two weeks cleaning and restoring it to livable condition. This desire to make improvements to the property is important for the future.
What Are You Willing To Sacrifice?
When I was growing up in Malaysia, I had friends whose entire families of four lived in studio apartments with bunk beds along the walls.
By comparison, four of us sharing three bedrooms and one and a half baths is hardly a hardship. If I can successfully clean up the two-bedroom ADU, then we should have more than enough space to co-habitate for five weeks.
Let’s not forget, we’ll be in Hawaii, not Kabul, Afghanistan. To me, it’s as close to paradise on Earth as you can get. I imagine some people might even scoff at the idea that staying in Hawaii for five weeks in a free home could be considered a “sacrifice” at all. In many cultures, this is the norm.
There are plenty of people who can’t take five weeks off work. Some can't even take two. And many who do take time off end up staying local to save money. My wife and I are both currently DUPs and fortunate to have a free place to stay. This is what my grandfather, may he rest in peace, envisioned when he built the house—for generations of our family to enjoy.
So no, there’s no room service, no pool, Toto washlet, and no 1000-thread-count sheets. Big deal. I’m willing to forgo luxuries to inch closer to our goal of being financially independent again.
Nothing will stop me because I know how amazing it felt to be completely financially free for the 11 years after I left my day job in 2012. I'm sure my wife feels the same way when she engineered her layoff in 2015.
Think of the Alternatives to Feel More Appreciative
Whenever I start feeling dissatisfied about not having the “perfect” situation, I remind myself to think about the alternatives. Doing so always helps me feel more grateful for what I have. Here are our realistic alternatives:
- Having another staycation in San Francisco, Sonoma, or Tahoe (not bad, but not Hawaii)
- Missing out on experiencing a new school that our kids might attend for high school, since their current school ends at 8th grade
- Commuting downtown to work 50+ hours a week under fluorescent lights, trying to climb the corporate ladder
- Traveling for business for weeks at a time (a temporary escape, perhaps, but at what cost?)
- Getting micromanaged by an insecure boss and berated by demanding clients
- Working until 10:30 p.m. during month end almost every month at my wife's job
- Having to go to war to fight for our country's freedom and then dying
- Wishing I had spent more time with my parents after they are gone because we stayed in our own place instead of with them
When I lay it all out like this, spending five weeks with family for free in Hawaii sounds pretty great. We'll be spending the weekends at my Aunt's beach house or at a hotel to break things up.
More Choices I Made to Achieve Financial Freedom
Choosing not to spend on a rental house in Hawaii this summer is just one decision to help re-achieve financial independence. Here are some of the choices I made the first time around:
- Lived in a studio apartment with a roommate in Manhattan for two years to keep rent down while building my career.
- Shared a bedroom with my girlfriend in a 2-bed, 1-bath condo in a noisy part of San Francisco for a year to save more aggressively.
- Saved and invested every bi-weekly paycheck for 13 years, and invested over 90% of each year-end bonus I received to maintain a 50% – 80% saving rate.
- Attended business school part-time for three years for 20 hours a week while working ~60 hours a week in finance to save time and money.
- Woke up by 5 a.m. to write on Financial Samurai for 2.5 years before heading to the office by 6:30 a.m., then wrote for another hour after 9 p.m.
- Bought a second-hand Land Rover Discovery II named Moose for $8,500 and drove it for 10 years instead of splurging on a new car like all my friends.
- Postponed having children by 3–4 years because I was too focused on my career and wanted to reach a target net worth first. This is one of my biggest regrets, waiting so long as an older parent.
- Downsized to a smaller and 40% cheaper home in 2014 to save money and boost semi-passive income by renting out our previous home.
- Skipped out on a a couple of dad's nights out partly because I didn't want to pay $500 for NBA tickets and dinner or be away from family for a weekend in Mexico.
Some of you may not agree with the choices I made, and that’s perfectly OK. You’re not me. Looking back, I’m grateful for most of them because they gave me the ability to negotiate a severance and break free at age 34. I just wished I focused on family planning sooner.
The value of financial freedom far outweighs any of the sacrifices I made along the way. It's not even close.
The Joy of Saving and Investing
Here’s what many people may also not realize: for personal finance enthusiasts like me, saving and investing itself brings joy. The more I save and invest, the more satisfaction I get as a father. As a man, ensuring the financial security of my family is my duty. So, skipping the $24,000 rental or the $2,000 first-class plane tickets doesn’t feel like deprivation, it feels like progress.
Every night we stay at my parents' house is another $800 saved. That brings me far more happiness than lounging in a luxury rental, doom scrolling why stagflation is a key risk to the president's latest tariff policies.
In Hawaii, I’d much rather be outdoors—boogie boarding, snorkeling, hiking, playing pickleball or golf—than sitting inside. In fact, the dumpier the place, the more incentivized I am of getting out of the house!
Personal Choices for Personal Goals
The choices we make in pursuit of financial freedom are deeply personal. You can't tell someone how to spend their money if you wouldn't spend your own that way.
Some may think I'm sacrificing too much. I see it differently. I believe I'm receiving a gift that brings me closer to my financial goals.
When I reach financial freedom by December 31, 2027, I won’t look back with regret for not spending five figures on a rental house. Instead, I’ll be grateful for the time we shared together, no matter how inconvenient some moments may have been.
In the end, being together as a family is what matters most.
Readers, what choices are you making to achieve financial freedom sooner? If you’re already financially independent, do you view these decisions as sacrifices—or simply no big deal? And as we get older, is it natural to lose appreciation for what we have?
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Few people want to make any meaningful sacrifices and, therefore, they get what most people get. It pays to be an outlier in many instances. Do what others won’t to get what others can’t. I went from a net worth of -$185,000 to $2.5M while consistently having people close to me question decisions like home and car purchases.
We live in a townhome we paid off back in 2019. First, we got “why would you pay that off?” At the time, we didn’t have kids. Once we did, people were asking if the townhouse would work (as if we were living in the projects or something). 3 kids later, the paid off townhome is working beautifully. We have since paid cash for a lot to build a “forever” home. I’d say in about a year we will start the build with the goal if it being paid off in a few years.
I haven’t taken a 2-week vacation in 9 years. All these little “sacrifices” compound over time. I love reading your blog. It makes me feel more “normal” since most people find what we’re doing to be abnormal.
Well done Joseph! I’m proud of you! Keep doing what you’re doing and congrats on the kids! Having them has been my greatest motivator to get my finances strong, and I’m sure it’s one of your biggest motivators too.
Fight on!
Great post, Sam.
What I’ve experienced firsthand is that some people are just not interested in financial freedom. The thing is: that doesn’t stop them from judging the spending choices of people who are striving for financial freedom.
My wife and I heard it all the time when we brought 2 babies home to an apartment we owned in an up-and-coming Chicago neighborhood. People couldn’t understand why we do that to ourselves. 5 years later, we now have 3 kids and a great house because of those early sacrifices.
We talk about it all the time- living in our rental apartment was one of the best financial decisions we ever made.
That’s why I love blogs Financial Samurai. We can find support in our spending choices when it’s hard to find closer to home.
Thanks,
Matt
Love it! And what a blessing to have 3 kiddos and own a nicer house. The sacrifices we make earlier on can seem like nothing in retrospect!
We spent the last three years (2022-2024) working through home improvement projects which increased our “normal spending by $200K+ in each of those years. We are wrapping up the last of our projects in 2025 and will have $100K in less spend this year vs. 2024 and will drop $100K again in 2026. In addition, we have identified $40,000 of cuts to bring our spending down to a more sustainable level and comfortable $260,000 per year – covered by current passive income.
I also put my 2 year notice in about 2 months ago and will be “retiring” in March of 2027 at 40 years old.
It feels good to to have cash flowed all the improvements but it also feels better to be counting down to the finish line and bringing the burn rate down – at least for a few year to see how things go.
We currently have a $13.2M net worth.
Nice job with the home improvement projects, and getting that spending down.
Oh, I was meaning to ask you in one of your posts about asking for a raise. What keeps driving you to work and ask for a raise with a $13.2 million net worth?
Seems like you’ve definitely spent a lot of time thinking about this. And you’ve come up with a decision you feel great about. You’re very calculated with your finances and it’s clearly important you are determined to stick to your goals. That’s how goals are typically best achieved.
I love your work and thought provoking topics so I hope you take this with kindness from an outside observer. To me this reads that you made a pretty unilateral decision. “I”s not “we”s. In any case I wish you and your family a great trip and hope you keep your heart open. You may feel things are going fantastic half way in and by the end as well. Try to be mindful that others may feel differently, and their emotions are just as valid. Think of some thoughtful ways to support those having a different experience that don’t cost anything or much at all. It’ll go a long way cuz you’ll need that on a long trip. I say this because when I traveled for a month with my wife, she planned things without really consulting me. She kept saying incessantly how amazing things were and never asked what I wanted to do or if I was enjoying the trip. I didn’t want to upset her because she put a lot of time into planning but I left feeling disappointed and refused to travel more than 7-10 days after that.
Sorry your wife didn’t consider your input more. She was probably very proud that she was doing all the legwork and wanted you to take things easier and focus on something else.
When you brought it up to her about being more inclusive to your opinions, how did she feel and what did she say?
It is true that staying in Hawaii for five weeks can seem like a hardship. But I think there are worse things in life they can help put the trip in perspective.
Although this might seem like a unilateral decision, as the reviewer and editor of my posts, we talk things through a lot. Writing is formalized thinking. Any type of writing is actually the most intentional type of communication there is IMO.
I hope you and your wife can work things out for future longer trips!
Personally, I would happily suck it up and live with my in-laws for 5 weeks in Hawaii, with beach cottage trips over the weekend, I’d my husband made enough so I could leave work permanently by 35! Alas, I’m still working at 45 because my husband doesn’t make much. And I will probably have to work for another 10 years.
To the wives out there with providing husbands, don’t take them for granted. Consider yourself fortunate and show appreciation, instead of put more financial pressure on them to earn and provide. Otherwise, I’m afraid he will leave you for someone who is more appreciative.
Sacrifices are not only for financial freedom, but to get “somewhere” financially. Here are the sacrifices I have made: Attended a university near my parents to avoid student loans, got a part-time job throughout high school and university, lived in an apartment without air-conditioning and drug addicts in the same building, drove a car for over 15 years before buying a new one, kept up with using 2nd and 3rd languages learned, went to vacations every other year, chose quality clothing instead of cheap clothing, worked on my portfolio for my profession during COVID lockdowns and made my own coffee and tea at home.
All thing done just to have the downpayment and the emergency savings. I don’t come from a wealthy background.
Thank you for sharing your story. It’s a powerful reminder that financial progress often requires deep and consistent sacrifice, not just for the dream of financial freedom, but simply to get ahead. You’ve made deliberate, disciplined choices—sacrificing comfort, convenience, and even time—for the sake of building a financial foundation. That’s incredibly commendable.
A lot of people underestimate just how much effort it takes to save for something as basic as a down payment and emergency fund, especially without a financial safety net. Your journey highlights that getting “somewhere” financially isn’t about luck—it’s about grit, strategy, and long-term thinking. Keep going, and thank you again for the inspiration.
Thanks, Sam. Your remark on working minimum wage to stay grounded from one of your posts inspired me to do an inventory on how my “hardships” over time.
Really appreciate you sharing this. It’s a good reminder that financial progress often starts with a long list of practical sacrifices, not just some grand plan for financial freedom. A lot of people assume wealth-building comes from big wins, but often it’s the day-to-day discipline—living with less, working through school, making conscious trade-offs—that actually moves the needle.
Your story shows how much effort it can take just to reach a basic level of financial security, like saving for a down payment and building an emergency fund. That kind of determination doesn’t come from having a safety net—it comes from having no choice but to push forward. Respect!
“The unexamined life is not worth living”, said Socrates (or so we think because he did not write anything down), and I think you have examined the issue from just about every angle possible. It is delightful to see how money, culture, attitudes and status intersect to find the optimal vacation rental.
I am also reminded of the saying “Nothing tastes as good as thin feels”. The best lives are not created from luxuries. I think that as people get wealthier it is easy to shield oneself from “character building” experiences. People who have less disposable income have no choice but to muddle through, there is no alternative. Wealthy people need to be intentional with not getting too comfortable and soft. Perhaps if your son breaks grandma’s favorite vase in the Hawaii house, the memory is unpleasant but it is also valuable and lives on for a looong time!
So, I think there is no right, 100% optimal decision. Nasim Talib in his book “Antifragile” would probably suggest you try several options—spend time with the parents, stay in a hotel, and spend some money for a whole-family experience, maybe a nice luau. Then you have the information to know which choice was best for the future.
You’re absolutely right: as wealth increases, it becomes easier to avoid discomfort and unpredictability, which ironically are often the very things that build resilience, depth, and character. I love your reference to Socrates and the examined life. Trying to make a “rational” decision about something as emotional and nuanced as a family vacation forces that kind of self-examination.
The idea that the best lives aren’t created from luxuries really resonates. It’s those inconvenient, messy, even frustrating moments—like a broken vase or a cramped sleeping arrangement—that often become the most meaningful memories over time. They add richness and texture to our stories.
And yes, I agree—Taleb would likely advocate for optionality and experimentation. We are trying the weekends away route. There’s no perfect formula, but through trial, error, and reflection, we get closer to what works best for our unique circumstances. Maybe the goal isn’t optimization, but layered experience.
Hope you have a nice trip without any hiccups and no major flight delays. I had a lot last year but hopefully things have improved a lot since then.
Good follow up Sam! Reminds me of the lesson I learned early on in my career to respect individual value systems which are unique, with no true right or wrong.
I’d get so mad at a candidate who wanted to continue to negotiate hard to get ‘just’ a few more thousand dollars a year and my boss would laugh at me. He’d point out the person’s background, cultural identity and value system shaped their decision making and how my judgment, and subsequent anger were totally unfounded. It was just business, nothing personal. And no one was necessarily right or wrong.
The same principal applies to savings/spending philosophies, but TRUE financial independence is hard to argue with. We could certainly use a little more of the discipline you espouse in our household , for sure. Thanks for the inspiration and enjoy Hawaii!