The Journey to Wealth: Headwinds, Tide Over, and Tailwinds

It’s amazing to me what a change in perspective or attitude can do to affect the way you practically approach life. I’ve been voraciously consuming FIRE blogs for close to ten years, and it has really driven me to save as much money as possible in order to invest and grow my net worth. It has gotten me to a place where I have a pretty sweet savings pile that should serve my family well for quite some time to come.

I’ve been diligently saving in my workplace 401(k) since 2007 when I started my professional life, and maxing that out since around 2010. At first, the balances seemed small and the growth didn’t seem to make a huge amount of difference. When you only have a few thousand dollars saved and it appreciates 10% in a year, it’s practically unnoticeable. The more you get saved, the more these increases matter.

Financial Tailwinds

We just reached the point in our investment accounts that, should the stock market continue to stick to its historical norm of 7% appreciation (though it doesn’t do this like clockwork), our savings will yield more money each year than we are actively saving from our salaries. Put another way, our invested assets (401(k)s, Roth IRAs, taxable brokerage accounts) are working harder for us than we are. I like to think of this as financial tailwinds. This added boost makes it so simple to increase our savings each year that it’s like running, biking, or sailing with the wind at your back. It’s just… easier.

Tide Over

Contrast this with the outset of my career when I was contributing somewhere around $100 every 2 weeks to my meager 401(k). That point in my life I have now begun to think of as tide over, which is a nautical term for having no wind and just floating until the wind returns and you can start sailing again. I kind of like this comparison because it didn’t feel like I was making a lot of progress on my retirement savings at the time it was happening, but I kept doing what I needed to do until the wind came along to help me. I didn’t really notice the financial winds at this point in my saving accumulation. Or perhaps the wind was there and I just didn’t have a big enough sail with which to catch it.

Financial Headwinds

Compare these two phases to what many people have to go through beforehand: financial headwinds. This is when people try to build their net worth when they have debt. For every two steps forward an indebted person takes, their monthly debt payments put them one step back; or, unfortunately in some instances, two or three steps back. Getting to the delightful time when they can look at their vanquished debt and see their net worth at $0 is a massive accomplishment. Kudos to those who have been able to lift that anchor that had been holding them back to start attacking the tide over period. If you stay steady on your course, you’ll find your tailwinds in due time. Just keep building that sail.