Down the Rabbit Hole of FIRE (Finance Independence, Retire Early)

I went from not knowing about the Financial Independence, Retire Early (FIRE) movement to having my world expanded and every financial myth I ever believed destroyed in a matter of three and a half months, and becoming a believer and figuring out my FIRE number.  One podcast grew to two, which then grew to four, until finally I settled on six podcasts, all discussing FIRE in some form.  You may think six podcasts is not a lot, but I definitely do, especially since I never listened to podcasts before being introduced to this movement.  Also, I have a life.

Along with the podcasts, I picked up four books by authors who reached FIRE.  You may not consider four books to be a lot for one topic, but I do (there are other books I want to read, too, and I have a life).  I’m not going to read every book on this topic to grasp the main point and to understand that there are different opinions on the matter.  Just as I’m not going to listen to every episode of the six podcasts.  Each podcast, with the exception of one, has hundreds of episodes (I’m pretty late to the game).  Yeah…No, thanks!  Instead, I chose the episodes and books that are relevant to me.

There’s a benefit to limiting the amount of sources you use to find information (use legitimate sources).  More information equals choice paralysis.  You can gather all the information in the world about personal finance, but it’s worthless if you don’t implement what you’ve learned.  If you come across a personal finance strategy that you like, implement the strategy and stick with it for a few months.  If it’s working well, why change it?  If you want to tweak one or two things, fine, but I don’t recommend constantly tweaking a strategy you’ve implemented just because you’ve come across new information.  Ignore the noise.

The other benefit to limiting your sources is that you minimize redundancy.  In the FIRE movement, you’re either a serial budgeter or you’re not; you’re saving “until it hurts” a la Financial Samurai, or you’re living your “Rich Life” as recommended by Ramit Sethi.  You’re following the traditional FIRE path, or you’ve chosen one of the other four (Lean, Fat, Coast, or Barista).  How many books or podcasts do you need to read or listen to to pick a side?  There’s a lot of information.  At the end of the post, I’ll list the books I’ve read and the podcasts I’ve subscribed to.

How Did I Get Here?

I don’t remember how I became aware of Millennial in Debt on Instagram but discovering her exposed me to people who would change my life.  “Curiosity often leads to trouble,” Alice said, as she stumbled into the rabbit hole.  And you can get into a lot of trouble if you blindly follow personal finance gurus on social media, especially if you believe that you can become a millionaire overnight.  You need to be very, very careful.

What I like about Millennial in Debt is that she’s not selling anything.  She takes the time to breakdown the information and advises you to do your homework on any tips she’s given.  That’s important advice.  You should always do your homework (not research, homework) on any advice given to you, especially if it involves money.  Don’t be the fool who gets conned into something, and don’t believe you can’t get conned either.  Some of the smartest people have been conned out of a lot of money.

Because I’ve been working with Ana Gatson to get my finances right for a year, I reached out to her and shared the information I had gathered from Millennial in Debt.  I trust her to help answer any finance questions I may have.  If you don’t have an Ana in your life and you want to get your finances in order or you want to start investing and need help, please visit her website to see if she’s taking on new clients.  If you can’t afford or don’t want to pay someone to help, then I recommend listening to the podcasts I listened to and reading the books I’ve read (free information is just as good).

Having confirmed the information was legitimate, I sought out more information.  Millennial in Debt was a great starting point, but she doesn’t focus on personal finance.  Her expertise lies in career coaching and pivoting, and I don’t want a new career; I want information on making more money and becoming financially independent through investing in the stock market.  And just as I was seeking this out, Millennial in Debt shared a post from HerFirst100k.  I clicked on the link, watched a few IG stories, and then found out that the founder of HerFirst100k, Tori Dunlap, had a podcast.

I decided to download Financial Feminist, my first podcast ever.  It’s here where I felt my life would change forever.  Because her podcast, the exception, had only forty episodes when I started listening, I didn’t feel overwhelmed and I decided to start from episode #1.  I listened to the first season (twelve episodes) and finished it in two weeks (some time in late August).  The amount of invaluable information I received from those episodes made me feel like I could achieve financial independence (FI) before the traditional retirement age, and it made me realize that I shouldn’t punish myself for past mistakes.  The past is the past.

I continued on to season two, which has more episodes (48).  I was not going to listen to all forty-eight episodes, so I picked the ones relevant to me and the ones I found interesting.  Maybe one day I’ll go back and listen to the ones I skipped.  From here, I moved on to other podcasts and I started reading books on achieving FI.

Where Am I with All of This Information?

First, I need to tell you where I was before I finally reached out for help.  My credit card debt was manageable before I took a career detour, but it became unmanageable my first year as a flight attendant.  By the end of 2020, I owed $36k in credit cards plus $6,500 in student loans.  This was a result of making less and not knowing how to manage money.  I decided I couldn’t repeat the same mistake of my late twenties (I filed for bankruptcy), and I decided I had had enough when my friend, a fellow flight attendant, shared his sister’s Instagram story.

His sister is Ana Gatson, and he was promoting her personal finance business on IG.  I reached out to my friend and asked if he could connect us because I was ready to get my finances in order.  He gave me Ana’s information, and we began what’s been an almost two-year professional relationship; we began working together in April 2021.

Because I desperately needed someone to educate me and hold my hand through the process until I was able to move on my own, I placed my full trust in her.  Ana taught me how to budget, how to save for an emergency fund, and how to invest without having to suffer in the process.  With her help, I paid off two of my credit cards using my crypto earnings (yes, I made $7,500; no, I’m not going to push crypto on you) and my emergency fund (I’ll never use my emergency fund to pay off debt knowing what I know now) by December 2021.  I started investing in my Fidelity Roth IRA (here’s to maxing you out in 2023).  I’m funding a taxable account with E*Trade, and I started investing in real estate through Fundrise.  I still have student loans of $6,500, which I’ve let sit because of the moratorium on payments and interest since 2020 and because I’ve been paying down my last credit card.

Senor Biden, can we expedite the student forgiveness program?  Screw these Republicans!!

---

Let’s fast-forward to now.  I’m working towards paying off my last credit card using the 0% APR balance transfer method (be very, very careful with this).  All my efforts are going towards paying down this interest-free debt and saving and investing.  I need to rebuild my emergency fund, which only has $904.  My goal is to have a year’s worth of expenses ($28k) in my emergency fund (it’ll take a few years), which I will never again use to pay off debt if I ever have debt in the future.

My view on debt has changed (I’m scurrred).  I no longer think it’s okay to carry a balance, and I will never again find myself owing hundreds or thousands of dollars.  If I really need or want something, I will save for it.  I save money monthly for four categories: mail ($10), dry cleaning/shoe repair ($50), haircuts ($70), and gifts ($80).  These categories are rollover categories, which means the money in those categories rolls over month to month.  This is a great method for people who spend a lot during the holidays at the end of the year: calculate how much you spend during the holidays and divide it by 12 to get the amount you need to save monthly.  It’s less painful, and you’ll be able to pay off your credit card in full instead of carrying that holiday balance well into the new year.

My views on spending have changed.  I learned to budget for the most important categories: groceries ($400/mo.), dining out ($400/mo.), miscellaneous ($100/mo.), self-care ($100/mo.).  These categories are not rollover categories except for self-care, which means that I will be over budget if I spend all $400 in my grocery budget.  Budgeting has helped enormously because now I live my “rich life” as suggested by Ramit Sethi.  I don’t feel bad eating out because I have a budget for that.

And not feeling bad about how you spend your money is the most important lesson I learned from Ana, Tori, Ramit, and all of the other people in the personal finance community who promote a responsible mindset around money.  Depriving yourself of what you want is not going to help you save money; it may even have the opposite effect.  You have to understand how to use money to help you get to where you want to be and have the things you want.

Let’s focus on the “help you get to where you want to be” portion of the last sentence of the previous paragraph.  I needed someone, a few people, to help me change my mindset around investing in the stock market.  Because no one ever sat me down and explained how the stock market works and how it could make me a shit ton of money, I missed out on twenty years of growth.  I’m going to turn forty in December, and I let twenty years pass me by without investing a single dollar all because I lacked information.  Jamila Souffrant has a wonderful adage, “When the student is ready, they’ll find a teacher.”  Please don’t wait until you’re forty to find your teacher.

---

I want to talk about making more money.  It’s all about the money, people.  I’m tired of hearing “money is not important” or “money is not the only thing that matters.”  Yes, it is.  Yes. It. Fucking. Is.  Who’s going to pay your rent if you get laid off and you don’t have an emergency fund?  Who’s going to pay for a medical emergency, if you have one, and haven’t planned for it?  Money is everything.  It doesn’t define you and shouldn’t define anyone, but don’t conflate societal perception with personal freedom.

Don’t ever let anyone tell you money is not important because it’s very important.  To this end, stop looking for your dream job a.k.a. following your passion and start looking for a job with a good salary and good benefits that will allow you to realize your dream later. Work is work, people.  And it’s okay for you to realize your dream later in life (thanks, Kristy Shen).  Just as I’m not going to promote the passion hypothesis, I’m not going to promote the Financial Samurai way of working for a great paycheck.  No one in their right mind wants to work from 5:30a-7:00p.  As a native New Yorker, I say, “Get the fucka outta here with that bullshit!”  There are plenty of companies out there offering high salaries and good benefits and a decent work-life balance.  And even if you’re not making a lot of money at your current job, there are ways to increase your income: a raise, a side-hustle, and saving and investing.

In my last post, I mentioned how upskilling helps keep you relevant in today’s job market, and it will also help you get more money.  Taking advantage of a company’s tuition reimbursement benefit is another way to increase your income in the near future.

---

So what can I achieve in the near future?  For starters, I calculated my FIRE number: $815,000.  I’ll be able to achieve this amount if I keep my expenses low and my savings rate high in 12-15 years (I’m aiming for 10 years).  By the end of next year, I’ll have saved and invested a total of $27,242.92 with a total of $33,999.17 to date (rate of return not included in these figures).  I’ll be debt free by the end of 2023.

None of this sounds like the near future, but I remember January 2022 like it was yesterday.  Time flies when you’re having fun, or adulting and not realizing you’re half way through the year and you haven’t done shit.  What’s important is that I have a plan, and I have the mindset to make sure this endeavor comes to fruition.  I would not have been able to think like this if it weren’t for the women and men empowering people with their knowledge.

I fell down the rabbit of personal finance only to find myself walking on solid ground and finding my way towards financial independence.  At 40!  You can get your financial shit together and reach financial independence.  I’ll be posting my financial independence progress in between articles about other things. 

Stay tuned.