Front Loading Your Life

front load your lifeI ran across the term “front loading” your finances awhile back. Unfortunately, I don’t know where exactly where I found it in order to attribute the author of the article. Essentially front loading is what I’m doing.

Front loading is an easy concept. Do all you can now in order to do what you want later. For us now that means paying off all debt (including the house), reaching a net worth of $1m, investing as often and as much as we can, and living frugal to make it happen. Later for us means we retire around 55 years old to travel and do things we enjoy.

Reasons I think front loading is for me and could be for you.

Interest income over time
Investments into the stock market have proven to have an average around a 9% increase on the S&P 500 for nearly the last 100 years. If you’re patient and diligent, you’ll make money on your money. I’ll admit this can get nerve wracking watching some stocks dwindle, but some are winners and balance out the duds. Right now I’m hovering around a 7% gain on my stocks.

Destroying debt is always a good idea
There is no denying that debt is bad. According to Matthew Frankel at, the average American household has a total debt of more than $130,000 and that debt burden is costing the average household more than $6,600 in interest per year–about 9% of the average income. We use Dave Ramsey’s snowball plan (Baby Step Two) get out to debt as it makes the best sense to us.

Set a financial foundation
This is more than just having a nest egg or a rainy day fund. This involves a multi-pronged approach. For us it means first having an emergency fund. Ours would cover us for at least 6 months in the unlikely event that we both lose our jobs. Second, investing in our retirement. For us that means my husband’s matched workplace 401k, maxing out a Roth IRA for me, putting extra cash into stocks and buying rental property. Finally, making a commitment to stay in the house we have now until the mortgage is paid off…and even then staying here until we can no longer go up and down stairs. In our town the housing market is increasing by about 12% annually. When we do decide to downsize in 30-40 years, that should give us a pretty good return.

Tax deferment
I will admit that I find tax deferment confusing, but I know it’s a good thing. It’s mostly for your IRAs and 401ks and allows you to make more money now, and pay taxes on it later when you’re likely in a lower tax bracket in retirement. I found this article at John Hancock Investing to be the best explanation of how this works.

I always love learning more. What do you do to front load your finances?


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