Financial Independence (also known as FI). I know, I know, talking about money can be taboo but it’s an important part of our life (really everyone’s life) so we decided sharing our situation and long-term goals with you would help hold us accountable to our longer term goals and maybe also give you some tips to help on your own journey to FI.
I was not on the same financial page.
I was making a much smaller salary, around $45K a year. I was not saving really much of anything but I was putting money into a 401k, not maxing out, just getting the company match. From what I can remember, I had about $6k in credit card debt, $12k on a car loan and about $5k on a student loan. So I came to the relationship with more debt but compared to the average American, $23k in debt is still less than normal. I remember our company gave everyone a pay cut at the 2008 recession and it was pretty barebones living. I had to cut my cable and internet and I ate several meals a week of potatoes.
Literally, I would go to Walmart, buy a huge sack of potatoes for $4 and then bake them in my microwave for a week straight. They were super cheap and filling!
Finally, probably about a year into our relationship, I started to wise up about money. I was tired of living paycheck to paycheck and I knew I didn't want to live this way the rest of my life. I was ready to start a new chapter. So I stopped my bad shopping habits and started heavily paying down my debt. (Yes, I was that girl that would go to the Houston Galleria on payday and spend half my paycheck on clothes and then survive on tuna for the next two weeks) I paid off most my credit cards pretty fast and when we knew we would get married one day, Andrew helped me pay off my student loan in a lump sum.
What Sparked an Interest in FI?
Fast forward a few years later, we were married and looking for something to watch on TV one night. Somehow, I have no idea how, but we stopped on the Suze Orman’s Show. We didn’t know it that night, but this was life changing for us.
An ah-ha moment.
We obviously liked the show because we started tuning in each week to learn more. We listened as people called in with questions and asked Suze if they could afford to buy things based on their financial situations. We learned so many financial concepts on that show and, even though we didn’t realize it at the time, our journey to financial independence was beginning.
Back then (around 2012) we hadn’t heard the words “financial independence” or “financial freedom” and we didn’t know that was our ultimate goal but we did know we wanted to save a lot so we could become millionaires one day.
Our journey to our current net worth is a little unique but not impossible for those working corporate jobs.
In Houston, when we were married we were both employed in the oil and gas industry so we had good salaries and were making the most of them by maxing out our 401k’s and still building up a robust savings account - we wanted 1 year of expenses, which was around $60k. I grew up in a family where one of my parents was laid off quite often due to the cyclic energy industry. So personally, having a large saving account is important so I never feel insecure about how we will get by, especially since I married someone in that same industry! I also think more people are seeing the need for a larger safety net with coronavirus and the impact it has had. And we made sure to live below our means and pay cash for everything.
Going overseas meant 2 things that greatly helped our FI journey. 1) decreased daily expenses and 2) greater income to save. So those two things combined - less expenses and more money really helped us exponentially speed up our journey to a million dollars.
Our Privilege
We also need to acknowledge our privilege here. We are both half white and I’m half Mexican, Andrew is half Bolivian. Our parents cared about our grades and upbringing greatly and they helped pay for college. Really, our parents paid for the majority of our schooling. And we are in our mid-thirties with no children which has impacted our saving rate.
And we acknowledge we didn’t do anything to be American - we just are. We have lived in very poor areas of the world where even if people wanted to change their life projection, it’s just so unlikely their life circ*mstances will ever change. But in the USA, people are able to change their life with hard work and determination. And that in and of itself is a HUGE privilege we don’t take for granted.
Acknowledging our upbringing and our privilege, along with our hard work and sacrifices we are well on our way to financial freedom and our focus right now is on growing our passive income to pay for our life expenses without needing a traditional job.
