At one point, my wife and I had a combined income of $140k yet still lived pay check to pay check. Money in, money out. Lifestyle creep set in and it became harder each year to make ends meet.
Eventually we had children and my wife had to leave her job to stay home with the kids. And due to a lack of financial planning, we started to incur debt. We lacked the financial mindset to budget, so we couldnt’t figure out what was wrong.
I thought of starting a new job that might improve my income but found little opportunities I would enjoy. My frustrations started to show in my work and at home. Thankfully my wife knew I needed a mindset shift.
She showed me a youtube video of a Chicago police officer who had some of the same frustrations and began investing in real estate – Jemal King, the 9-5 Millionaire. For some reason, this was my spark.
I began learning and reading as much as I could about this thing called ‘passive income’. It started with Rich Dad Poor Dad (my spiritual guide) and morphed into 50 books about finance.
I shifted from a scarcity to abundance mindset and saw opportunities all around me that I was never aware of before.
I began eliminating our debt, built our savings rate to 53%, bought a cash flowing rental, got rid of subscriptions, leases and other boneheaded financial decisions (ie moved from actively managed funds to index funds, dropped whole life insurance, ended car leases).
I even started a blog about our journey at whatthefi.com and try to help others understand how they can turn around their financial situation.
Today, we are happier, motivated, and on our way to becoming financially independent.
Wow! Honored to be featured this week and appreciate all you do for us (later) FI starters! Love this blog!
Tom
You are welcome, Tom! Thank you for sharing your story 🙂
I have 1 sinking fund, but a spreadsheet that divides it into 10 categories.
Two are for the board that my 2 sons still living at home pay me. Little do they know it, but when they have a major life event (probably marriage but it could be something else) each child will get back every penny they’ve paid me. Ssssh!
That is fantastic! As I’ve said before – they are lucky boys, those sons of yours 🙂 Maybe a house deposit?
Fantastic plan!
Hey Tom
Such an awesome story that I can identify with completely. Have followed a very similar life path to you.
Also switched from a scarcity mindset to an abundance mindset and had the same lifestyle creep and sucked into consumerism.
It is amazing how quickly you can turn it around once you know and focus. Good luck with FIRE
Thanks Alan! Really appreciate the kind words! Yeah that lifestyle creep & consumerism can creep up on you quick! It’s amazing how quickly you can turn things around with just a little financial literacy and mindset change. Good luck to you as well!
Seeing the money you earn as a resource for the future and not a plaything (or a reward) to be consumed right now is a mindset adjustment I wish i had had years ago – I am sure many of us do.
Welcome to the LatestarterFire Club Tom!
Shaun
Thanks Shaun! Great to be a part of the LatestarterFire Club!
Great article! I’m a teacher too, enjoyed hearing a similar perspective.
Where do people keep these sinking funds? Separate online accounts, or…..?
I started my sinking funds at my local bank (Chase) but I soon found they were not very friendly about opening multiple funds (or understood what I was doing). They also charged me with fees galore; minimums fees, transfers fees, you name it.
I soon moved most of my sinking funds to Fidelity online as they don’t charge any fees and reimburse ATM (not that I use it much). A few months ago I moved my emergency fund to a HYSA at ALLY bank . The interest was at the time near 1.5% but has now fallen to 0.8%. Of course these are all the the U.S. I find that online banking is easier and more non-fee friendly wherever you’re at.
“Acting my wage”, ha! I love it! Great story. You have accomplished so much. Very inspiring.
Thanks for sharing your story Tom, don’t stress to much about being ‘late to the party’ the only thing that matters is that you are working upward from here. Great stuff, and you are actually way better off / further ahead than a lot of people I work with in their 40s (high wages usually = high spending). Cheers mate