Welcome to the Late Starter to FI series!
I am a Late Starter – I did not discover FIRE (Financial Independence Retire Early) concept until I was 47. This was way later, I thought than others who seem to have it all together in their 20s and 30s.
Since I started to write about my own journey, I have discovered there are many more Late Starters like me, yay! It is such a relief knowing I am not alone.
I want to share our stories, our unique perspectives and show that it is absolutely not too late for us.
So in this series, I particularly highlight those of us who start our FI journeys in our 40s, 50s and 60s. And explore questions such as ‘where do we start’, ‘can we still retire early(ish)’, ‘what are the specific challenges for us late starters’. We look at our past, not to castigate ourselves but so that you can learn from us.
Please join in the conversation in the comments below. I encourage you to share your story if you fit the profile of a late starter. You absolutely don’t have to be a blogger or podcaster to share your story. Please email me at email@example.com or connect with me on Twitter, Facebook or Instagram.
Today, I am very honoured to share Deanna’s inspirational story here. Please note, I do not use the word ‘inspirational’ lightly.
Take it away, Deanna.
A bit about me
Hello, I’m a 47 year old single gal from the good ‘ole United States of America. I currently reside in Ohio and have a fulfilling career as an account manager for a broker/third party administrator.
Additionally, I just celebrated 10 years of sobriety. Part of my calling in life is to help other women in recovery. Furthermore, I help women with gaining financial control of their lives and I blog at Recovering Women Wealth.
I live a very active lifestyle and have fun playing outside, whether it be on the ski slopes in the winter or on the bike path and beaches in the summer. While I am still active in quarantine, I’ve slowed down a bit.
My family is of key importance to me and I love being Auntie Dee to an awesome niece and two stellar nephews.
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My light bulb moment
Well, my real light bulb moment came in 2009 when I was in a destructive relationship and addicted to drugs and drinking. Literally, I was on something 24/7 but somehow, I was still managing to function and maintain my job.
Although, underneath it all, I was completely broken. It was the darkest time in my life. Fortunately, I hit my bottom, admitted defeat, prayed and surrendered to a program of recovery. Ultimately, this program led me back to my faith in Christ.
I spent the early years of my recovery working on forming new habits, reconciling with my past, making amends, forgiving and receiving forgiveness. All good stuff, right? Well, this stuff set the stage for me to have the capacity to work towards financial peace as well.
In 2014, I began to work on paying down my debt. In the process, I did lose my home to foreclosure but was able to make some extreme choices, like moving back in with my folks at the age of 42, in an effort to pay off my debt.
On December 29, 2017 I paid my final payment and became debt free for the first time in 23 years!! All in all, I paid off $46 763 in about 3 and a half years on an average salary.
By the time I paid off my debt, I had already learned about Financial Independence Retire Early (FIRE) movement via the ChooseFI podcast. So I was 44 when I first learned about the concept of Financial Independence (FI) and was 45 when I fully started implementing a savings rate with the intention of hitting it.
FI appeals to me because it equates with freedom and choice. As a woman of faith, I go where God calls me. I know by achieving FI, I’ll be freed up to go further and do bigger things for God.
With the COVID-19 pandemic, I’m only further convinced of the importance of not only having financial stability but also being financially independent. The year 2020 is proof that we just never know what is around the corner.
Emergency + Money Problems = Bigger Problems
Looking back ...
I was raised in a middle class two parent Christian household. My parents have always been wise stewards with their finances. They did and do things like:
– Living within their means
– Having no consumer debt other than a mortgage most of their lives
– Saving and paying cash for cars
– Saving for their children’s education
– Lastly, planning and saving for retirement
Unfortunately I learned none of these things growing up mostly because I was rebellious against them. I had a very strained relationship with my father. Additionally I was always searching for completeness in things outside of myself (relationships, drinking, drugging etc)
That being said, I did recognise that money equated to freedom but it was short sighted and all I wanted was to be out on my own at any cost. I began living with debt at the age of 18 and that became a habit for the next 23 years of my life.
I did go through a divorce and bankruptcy at the age of 27, went to graduate school in my 30s on loans, and financed what I couldn’t afford.
Additionally, it’s probably no surprise as my addiction waxed and waned, I spent a lot of money to feed this also.
On the way to FI
The first step I took was figuring out all the tax advantaged accounts I was eligible for and then began maxing them out. For me, this includes the following accounts:
– Employer Sponsored Simple IRA
– Health Savings Account
– Individual IRA
Additionally, I do some post-tax investing. The majority of my investments are in low cost broad based index funds.
In light of the market’s recent volatility, it’s really important to understand that investing is for the long haul. In the short term, anything can happen but in the long run, history shows us the market always goes up.
How do I keep my cool especially being that this is my first bear market since becoming an investor? I have an investment policy statement before I began. Moreover, I know my risk tolerance. As I get closer to my retirement, I adjust my assets to be invested more conservatively.
In addition to my investments, I have a savings account for the following things:
– 4 to 6 month emergency fund
– future car
– skiing and vacations
– future house hack
How am I able to so this? By being intentional with my lifestyle choices. I practise mindful spending, meal prepping, driving a paid-for car and short radius living.
Disclaimer: After writing this interview, I bought a new to me used car and financed part of it – you can read about it here. However, it will be paid off in the next several months so I am only financing it for a total of 5-6 months.
How my relationship with money has changed
The first thing that changed in me when I was paying off my debt was that I didn’t need to spend money to feel joy. I really thought about what I valued and for me, that answer was relationships. There are plenty of ways to foster relationships without spending a lot of money. For example, taking a walk, working out, playing board games, hosting friends over for dinner and the list goes on and on. I think #SurvivingCOVID19 has also taught us about the simple pleasures in life.
I would do nothing differently because all that I’ve been through and have overcome has chiseled me into the woman I am today. I am blessed and now I get to help others. Sure, if I could go back, I wouldn’t choose a life with addiction but the truth is we cannot go back. So I embrace where I’ve been and how it’s made me stronger.
Specific challenges for late starters
Hmmm, being someone who’s come back from a mountain of hard obstacles mid-life, I think the hardest challenge we can face is mental. We have to overcome questions like, is it too late? Look how much time I’ve lost? And only if?
However, I’m here to say:
2. All the stuff we’ve been through has made us who we are. So, stand proud!
3. Glance back to learn but look forward for growth!
The main financial advantage I see in starting late is that at age 50, we are allowed to put more into some of our tax advantage accounts.
And the main life advantage I see is that we’ve gained wisdom and hopefully know how to pace ourselves to enjoy the road to FI rather than steamrolling our way there.
Where am I at now?
I’m making better money than what I was making when I was paying off debt. I’m still employed during the pandemic fortunately. My savings rate is around 50% and I’m satisfied with that.
Although, I’m a fan of progress so I continue to work hard in my career and look to keep growing my income. My lifestyle is comfortable so if my income grows, so will my savings rate.
At this rate, I can retire around 60 which is earlyish. The good news is that I’m doing what I’m called to do now. I was planning on going to Uganda in the Spring for a mission trip but alas, it’s been postponed to 2021. Prayerfully, I’ll still get there!
I’m well on my way to FI but still about 12-13 years away from achieving it. That may seem like a long time compared to some of the stories which get featured in the big media outlets.
However, let’s pause for a second. Ten years ago, I was just getting sober. Six years ago, I began to focus on paying down my debt with intensity. Two years ago, I began maxing out all the tax advantaged accounts I could get my hands on as well as some post tax investing.
If I can truly achieve financial independence in 15 years, that’s amazing.
Additionally, I do cut back on many areas of life but I also am enjoying the journey. That being said, I’m just fine with my current pace.
My plan is to keep on writing, living my dreams, helping women, spreading my faith, and saving money. I’m thinking about how I can teach more, in particular with my blog, so stay tuned for more on that …
Back to Latestarterfire
Deanna, thank you so much for sharing your story here. Although I have heard and read your story many times before, every time I come across it, I am inspired anew by your determination and grace; your faith in God and steadfastness in following His ways; your commitment to helping others to manage money wisely and your willingness to share your story with humility.
There is so much to learn from Deanna’s story. I love in particular, her point that for us late starters, it is often a mental challenge; to ‘glance back to learn but look forward for growth’. And to stand proud – all our life experiences have made us who we are. Let’s all look forward and grow together.
I am personally inspired to write a investment policy statement – been meaning to do that for a while but I’m a great procrastinator …