Author: Latestarterfire

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Late Starter to FI series #10 – The Useful Root

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 info@latestarterfire.com or connect with me on Twitter, Facebook or Instagram

 

Disclosure: Please note that I may benefit from purchases made through my affiliate links below, at no cost to you

Camping sunset

Today’s Late Starter is Amelia who writes at The Useful Root – a blog about financial independence, frugal food, decluttering and sustainability.

“Money is the root of all evil and yet, it is such a useful root that we cannot get on without it any more than we can without potatoes” Louisa May Alcott, US novelist

What an awesome quote, Amelia! 

The best way to connect with Amelia is through her email – mrsroot@theusefulroot.com and in the comments on her blog. 

Without further ado, here’s Amelia!

A little bit about me

I’m a 47 year old living in Austin, Texas with my husband and 11 year old son. We have two little mutts and a very handsome cat. I have a full time 9-5 administrative position at a public university. We are a two income family. 

I love being in nature and ‘glamping’ (glamour + camping) is one of my favourite things to do with my little family and friends. We have a small travel camper that we take to the many beautiful state parks in the area.

I enjoy cooking all types of food and having friends over for get togethers. Although I don’t have a green thumb, I like gardening and trying to grow vegetables (with mixed outcomes) in two raised beds on our property. 

I’ve lived in the US for 38 years but I lived in Australia as a child. My family is French, including myself. When I was a baby, they travelled from France by boat to Australia and we lived in Sydney and Canberra mostly. They are chefs and gave me my passion for all things food and cooking. 

I have worked with my current employer in various positions for over 15 years but before I joined the world of office workers, my husband and I took a stab at being entrepreneurs. We owned a restaurant together here in Austin for 5 years. It was a lot of hard work and stress. After that experience, we ditched the food industry for good. 

The hubs started his own concrete floor staining business which he runs successfully to this day. I bounced around to a few different jobs until I landed an entry level office job at the university. Having never been to college it was a foreign land to me. 

But after working there a year, at the age of 31, I was inspired to pursue a college education. I completed my business bachelors degree in supply chain management (of all things!) while working part time. This is how I racked up over $30 000 in student loans. 

I worked one year in corporate America at an engineering company. I hated it. I got pregnant with my son, quit that job and was able to stay home with him for 11 months. When it was time to go back to work, I came back to the university and have been working there ever since.

I love reading, audiobooks and podcasts. I love fiction as well as memoirs and learning how to get the most out of life. I consider myself a lifelong learner and self improver. I enjoy looking for ways to set up systems and habits that optimise our daily life. Looking back now, I can see I was attracted to supply chain management because of system optimisation. 

In addition to striving for financial independence, I also try to continuously declutter our home and look for ways we can improve our daily sustainable practices to lessen our impact on the planet. These passions – financial independence, food, sustainability and decluttering are what I write about on my blog.

 

 

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Looking back ...

We have had numerous financial ups and downs in the past, including bankruptcy and a serious illness that almost took Mr Root’s life in 2010. I had very bad timing for getting pregnant and taking 11 months off work to stay home with my son during the financial downturn in 2008-2009. 

But we got back on our feet and have had two good steady incomes for about 9 years now. There was no excuse for us not to be doing better. We had been experiencing lifestyle creep and were trying to keep up with the Joneses!

Amelia and Mr Root

Finding FIRE

I found the FIRE movement in January 2019. The previous year’s holiday season left me feeling depleted and resentful, having repeated the yearly cycle of spending money we didn’t have on gifts and the holidays. 

We both had good jobs but carried too much debt and weren’t  saving money for our future or our son’s college education. We had no plan except to just work as long as physically possible into our old age and hope for some kind of financial windfall (lotto?). I was anxious all the time but didn’t know what to do about it. 

We made attempts in the past to do better with money.We read Dave Ramsey’s book – Total Money Makeover and even hired a Financial Peace consultant. The budget overwhelmed me and we couldn’t seem to get past maintaining a small emergency fund and slowwwwwly paying off debt. Despite our efforts, we were in a rut of living paycheck to paycheck and financing the rest. 

I came across an article in the NY Times titled “How to retire in your 30s with $1 million in the bank” – about people who were part of the FIRE movement. I found it interesting but thought it wasn’t something I could do because I wasn’t a 20 something engineer making a six figure salary. But I was curious to learn more and followed the links to more content. One was to Mr Money Mustache which again was intriguing but I couldn’t see myself as someone who could achieve what he did because I was too old, didn’t make enough money and had too much debt.

But I kept digging and found The Frugalwoods and Tread Lightly Retire Early which included Meet the Women of the Financial Independence Movement page. I went down the rabbit hole and devoured all the content I could. I read Your Money or Your Life, Simple Path to Wealth, and started bingeing the Choose FI and House of FI podcasts. 

I found that there were all kinds of people in different situations doing their own versions of FIRE. This helped me see that it was not too late for us. We may not be able to retire early but we could at least retire eventually which was better than our previous plan to just work until we die!

The fundamentals of FIRE just clicked with me. It made my brain sing. I loved the anti consumerism, not keeping up with the Jones’s approach to financial health. The simple formula of reducing spending, increasing income, and saving/investing as much as possible made sense. The light bulb went on and I had an epiphany that we were living beyond our means and we needed to make changes – stat! 

At the time I was 46 and the hubs was 49. I shared what I was learning with him and he was in.

 

Numbers, numbers, numbers

At the time we found FIRE, we had $63 000 DEBT (not including the mortgage):

$8000 credit cards at ~ 16% interest

$25 000 student loan at 6.125% interest

$19 000 camper loan at 5.99% interest

$11 000 solar panel loan at 6.79% interest

$83 000 mortgage at 3.875% interest

Emergency Fund: less than $1000

We saved $125 a month that went to our emergency fund. My employer automatically withheld about 7% pretax dollars for a tax advantaged retirement account. Neither of us were contributing anything else to any other retirement plan or college fund. Not including what was withheld from my paycheck I calculated that we had a savings rate of 1.69% from our take home pay. Preposterous!

On the path to FI

The first step we took on our path to FI was to track all of our income and expenses. In Your Money or Your Life, Vicki Robin insists that you MUST track everything in and everything out. I told Mr Root that I wanted to start by at least doing that. We could do it for three months and see what we observed and go from there. 

I chose to use MINT. It’s free and I find it very easy to use. You can enter all of your accounts, loans etc into one place. This was great because until doing this, I really had no idea exactly what our debts and assets were. It was very illuminating! 

Within the first month, we were making changes. The simple habit of tracking what we spent gave us much needed clarity. We started cutting expenses at the grocery store and cancelling subscriptions. 

I also did The Frugalwoods’ “Uber Frugal Month Challenge“. This really helped me change my mindset by challenging me to see things in a new way through a lens of frugality. 

For example, I had a haircut scheduled in February that would cost $85. I just cancelled it! I decided I could find a cheaper place to go if I really needed a cut or I could just cut my own bangs and let my hair grow out a little. I had never thought about this expense in that way before. I just regularly scheduled haircuts every 10 to 12 weeks because I thought that’s what I was supposed to do, whether I could afford it or not.

 

Our progress so far ...

We are one year into our FI journey now. We have changed so much and made a lot of progress. We now have 3 months worth of expenses saved up in our emergency fund. We are credit card debt free. We have cut our loan balance for the camper in half. 

I feel personally transformed. I feel empowered and so positive about the future. I no longer stress about money the way I used to. 

We have a plan and that feels so good.

I also enjoy my 9-5 job more now. I don’t feel like a hamster on a wheel anymore. The purpose of my job is to make money and now that I have a plan for that money and understand the power behind managing it, I have a renewed appreciation for the good fortune of having a dependable steady paying job. Here’s a post I wrote about our progress in the first year.

The road ahead

I estimate it will take around another two years for us to pay off our debt, not including the mortgage. Then we’ll maximise contributions to the 457 tax advantaged retirement account I opened last year. This is a retirement account I have access to as a state employee. It’s special because there are no penalties for withdrawals before age 59 and a half. 

We’ll need to decide if we want to open an IRA for Mr Root or just invest in rental properties or both. I can start collecting my full pension, another benefit of being a state employee, at age 57. So I plan to continue working until then at least and so will Mr Root.

The years following debt pay off will be all about saving and investing. If I need to work one or two more years past the age of 57, I will. We’ll just have to assess our situation once we get there. Hopefully by the time I’m 57 and Mr Root is 60, we’ll be able to leave our full time jobs. Our house will be paid off in seven years. Our goal is to have a few rental properties which we’ll be free to manage in our retirement. 

The plan to retire before I turn 60 is retiring early for me. Before finding FI, we had NO plan. No financial plan, no retirement plan. We just stressed about not having a plan, not saving any money, and assumed we’d have to work into our golden years.

Tomatoes from Amelia's garden

Challenges as a late starter to FI

The challenge with being a late starter is the shorter timeline we have for saving. We don’t have the benefit of 20 to 30 years in the stock market to let the magic of compound interest do its thing. 

It’s especially difficult to be a late starter if you have debt like we do. Debt payoff can be excruciatingly slow and it’s tough to know if we should be paying down debt or investing as much as possible, or both. The amount of years it will take us to pay down the debt are years we could be investing but we chose to pay it down before putting our full efforts into investing. It’s important to us to be debt free.

We plan to boost our passive income with some real estate. Once we are debt free we’ll need to maximise contributions to our tax advantaged accounts while saving for a rental property or two.

The upside to being a late starter is that we don’t have as many years ahead that we have to worry if our investments will last long enough to support us. Someone retiring at 30 may need their investments to support them for the next 60 years ahead.

My relationship with money

Now that I’ve found FI, my relationship with money has most definitely changed. I have always been a hard worker and knew that I needed to work to make money. But that’s where my knowledge about money ended. I just thought if you wanted to make more money, you had to work harder, longer, sacrifice more, be a business mogul or the CEO of a Fortune 500 company.

Now I understand that it’s not necessarily how much money you make, it’s what you do with it that matters. Had I known when I was younger what I know now I would have done things very differently. 

I would have saved and invested at least 30% of my income all these years. I would not have financed new cars. I wouldn’t have cashed out employer supported 401Ks when I changed jobs. I probably would not have opened a restaurant or if I had, I would have been a lot smarter about the financial decisions that were made around it which ultimately led to bankruptcy. I would not have taken out student loans.

Ah well, better late than never, right?

Good money decisions I made before finding FI? Can’t think of any! Ha! 

What's next?

This year I want to get better at budgeting. I think we can be saving more if we get even more laser focused on sticking to a budget and living below our means. I have never been good with budgets so this will be a challenge.

I also want to work on selling something every month to increase my income. Either by selling items I have on hand from decluttering, or finding thrift store items that I can fix up and sell.

Can I make $50 more this month, and maybe $100 the next? Anything extra I can bring in, I can put towards paying down our debt. We’ll first finish paying off the balance on our solar panel loan and then start hacking away at my giant student loan as it holds the next highest interest rate. Gosh, I can’t wait to obliterate that debt!

Since finding FI, I have learned a lot about different approaches to life optimisation and productivity. Optimisation and productivity or “living your best life” are concepts that are intertwined with achieving FI.

In addition to kicking up our FI game this year, I am excited about working on my blog. I want to focus on writing more. I get great joy out of it but I haven’t gotten into a regular writing schedule. Being a full time working parent of a young child can make it challenging to squeeze in writing time. I haven’t been disciplined about sticking to a schedule. Instead I have just been grabbing chunks of time whenever they pop up. 

This doesn’t work well for many reasons. One that particularly bothers me is that most of my ‘free time’ is on the weekends and I have serious guilt over spending time at my computer when I could be spending that time with my boys.

So, going forward, I am implementing some optimised systems and positive habits that I have learned. I busted out a spreadsheet and created a writing schedule. It requires waking up at 5am so wish me luck! I have all kinds of things I want to write about FI, frugal food, decluttering and sustainability. 

I want to spread the FIRE!

COVID-19 update

My family and I are safe, feeling healthy and doing well. For this we are very grateful.

Since I last wrote, things have changed a bit. In January, we paid off our solar panel loan, yay! In February, signs were starting to show that COVID-19 was going to be a potential problem for the US. I blew my grocery budget in order to stock up on pantry items just in case things got weird. Rather than pay the balance on my credit card at the end of the month like I normally do, I made only a small payment, deciding that I wanted to keep our cash funds available in case there was an interruption to our income.

We have also decided to pause our debt payoff plan for now so that we can save as much as possible for our emergency fund.

I wrote a post about it here.

Our current situation is that we are quite fortunate that we are both able to continue to earn our income for now. I now telecommute full time until further notice, but for sure through the summer, and maybe into the fall. Mr Root is in construction and has had a steady amount of continued business, thankfully. He works with just two employees and no other trades on the job while they are working. Construction is considered an essential service in Texas and is allowed if precautions are taken. For now, we feel like it’s a safe environment for Mr Root.

Texas is observing shelter-in-place until at least May. Public schools will finish out their school year online so Root Jnr is home, safe with us. 

In the meantime, I am learning to use YNAB budgeting tool and fully intend to continue on the path to FI somehow someday.

Back to Latestarterfire

Amelia, that is an amazing amount of debt to have paid off in such a short time!

To recap, you have paid off $8000 original credit card debt, $9500 camper loan and $11000 solar panel loan – that’s $28 500 in 13-14 months. Congratulations!!

COVID-19 has affected us all, even those of us who still have jobs and are healthy. There is an underlying anxiety that just sits below the surface. I am writing from experience here. We do what we can to survive.

You are still on the FI path, with your budgeting and aim to reduce  expenses. Your focus has shifted from debt payoff to building your emergency fund. That is understandable as we seek financial security in these times of uncertainty. Fingers crossed, your income will continue uninterrupted. And you can start your debt payoff plan again soon.

Thank you for sharing your story with us – and keep spreading the FIRE 🙂 Please stay safe and healthy!

How is your debt payoff plan going in light of the COVID 19 crisis? Please share in the comments below

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Special COVID 19 Update – Late Starter to FI series

Photo by Fusion Medical Animation on Unsplash

Are you wondering how our Late Starters #1 to #7 are doing in the current COVID 19 pandemic crisis? How has the crisis affected their overall strategy to retirement? How are they coping overall? 

Well, wonder no more … this is an EPIC round up from around the world. So, grab a cuppa and settle down to catch up with what has been happening …

# 1 Project Palm Tree

Covid 19 is interesting. We have been in Work From Home mode for 5 weeks now. I still get dressed as if I am going to work, after all my usual morning routines. I even ‘walk to work’ a 20 minute round trip from home back to my (home) office. Gets my mindset changed from at home to being at work.

Both my partner and I are lucky enough to still be employed and both are able to work from home. I am an architect and the bulk of our work is hospitals, labs and teaching spaces, so we are busier than ever. My partner is an accountant for an online retail store, and sales for home office furniture and home sports equipment have seen them break sales records on multiple days. So both of us are working long hours and often on weekends – something that’s easy to do when your dining table has become your place of work.

Plus you want to be seen as a hard worker earning money for the business when they start making redundancies. I have been through this before.

To be honest, I love working from home. If I had a separate home office, I would aim to make it permanent.

Still paying 50% more against our mortgage than required, and we have upped our payments against our offset, which is also our emergency fund  – trying to get our emergency fund up in case things go pear shaped. Currently sitting at more than 12 months between the two of us, possibly more.

Finally looking to move my superannuation across from my managed fund to an industry fund – I know it’s the right thing to do but my financial planner has filled me with so much information on why I need to stick with her expensive fund. I have terminated her services though. Just haven’t moved the fund.

Image by Quang Nguyen vinh from Pixabay

We are not eating out, of course, but we have started indulging in the local cafe a few times a week – a coffee for him and a chai latte for me, and a cake each! Support the local business. We are (mostly) vegan and so sometimes order in a meal from our favourite restaurants, but mostly we just cook for ourselves. We had thought about buying ready meals from our favourite restaurants and that we might do soon – there are some good deals out there and again, supporting our favourite businesses.

I have a membership at our local council pool ($11/week) which has been suspended while they are closed. I also have a membership at a Yoga Studio which I have had for a couple of years – $160 per month. They haven’t offered any sort of discount during lockdown. I think they should offer a discount since all their instructors are paid per class, so in theory the only overhead they have is rent. But I feel like I should be supporting them because I have the means to do so. Plus, they may still be paying their instructors. Who knows?

I bought a yoga mat which finally arrived. Doing classes on YouTube but it’s not the same as being in the studio. I really miss swimming laps at the pool!

I also haven’t had a hair cut in weeks. I normally get one every 3 to 4 weeks and it’s been close to 8 now. Luckily, she’s a great stylist (should be – very expensive; my one indulgence) so my hair still looks great (bit ragged around the ears). I also stopped shaving so I have this weird facial hair thing going on. I haven’t even styled it. It looks pretty disgusting. I am just experimenting. Even though you can still go to the barbers, I might wait till lock down restrictions have been lifted and then go to an old school barber and get a proper beard trim.

I am also doubling down on efforts to get a side hustle up. Work out ways to monetise my blog. And I have an idea for an information portal website to earn money through banner ads. Pat Flynn style – watch this space.

I think working from home has given me a taste of the ‘Tim Ferris’ lifestyle. I want more.

It makes me more determined than ever to develop many side gigs and make those my full time gig, long after I reach financial independence.

Connect with Shaun at https://projectpalmtree.com

 

#2 A Simple Life

If you read my blog, you will know that it is the simple things in life that I enjoy and we can still do many of these things. Having to remain at home is not having a great impact on our life as prior to the lockdown, our weekends were often spent in the house doing cleaning, gardening and DIY. We live in a small village, surrounded by lovely countryside and not far from the coast.

Over the Easter weekend, we hiked down to the coastal path and enjoyed a few hours out in the countryside. If this is not your thing, I would really encourage you to take the opportunity to enjoy your environment. Even if you live in a city, there will still be plants and wildlife to discover.

 

Photo by Sam Healey on Unsplash

As you know from my last post for Latestarterfire, my main focus is paying off my mortgage and saving more money so that I can work part time when I’m 55. Even with the current health pandemic, that is still my goal.

There are occasions when I wish that I didn’t work in the public sector, usually when I read suggestions about asking for a pay rise or getting a promotion, but at the moment I’m so grateful to be employed by the government. This means that I am still employed full time, although all my job is being done at home over the phone and by Skype. Unlike many others, this means that my income is exactly as it was before anyone ever heard of the corona virus and I do realise how lucky this makes me.

With my income at the same level, this means that I am still able to make those mortgage overpayments which bring the possibility of part time work closer. The other positive is that my outgoings have actually decreased. There’s no spending on petrol or any social activities. For April, I therefore have £200 left over and am trying to decide what to do with it.

The bad news is that my savings were running at a return of -20% at one point, but as I write are now back to only -3%. As I have only recently discovered the joys of index investing, I am actually showing a loss since I opened the account. I have kept my nerve though and haven’t sold anything. In fact, I’ve invested a bit more than usual because they say ‘everything is on sale’. 

Unlike those people in their twenties who have a decade or two before they need to draw on their pot of money, I only have four years before I plan to put my nest egg to work. The question is whether that is enough time for the stock market to rally. As anyone with any sense knows, no one has the answer. At present, I am therefore wrestling with the question of whether to invest my surplus income into my ISA or add it to our monthly mortgage overpayments.

So, on the whole, we are doing okay during these strange times. I am trying my best to keep positive by not listening to the news too much and instead, focusing on personal development podcasts to improve my mindset and try to use the extra time that we have in a productive way rather than just increasing my television viewing! I hope that you are all managing to do the same.

 

#3 Heavy Metal Money

We are all adjusting to a new normal of quarantine, isolation, rationing and balancing home schooling with working from home. I wrote about how I’m coping here.

Chris in the middle of Thrash Metal Legends, Testament!

From a strategy standpoint, I haven’t really changed too much. Even though it can be scary, and markets are very volatile, I’m maintaining the same investment strategy because I’m in it for the long game. Ensuring I continue to invest in my 401K, and other investment accounts. 

I briefly talk about how I’m investing here in 2020. Because I’ve worked hard to live frugally, on much less than I earn, I’ve been able to be very intentional on where my money goes in terms of retirement and investment accounts.

Because the market was falling, and essentially any investments we can buy are now ‘on sale’, I was able to scrape together any savings and add it to my brokerage account. As I mentioned earlier, since I’m investing for the long term, probably about 7+ years out, I’m still somewhat gambling that the market will recover and have gains by then. Some would say I was foolish to do so. Some would say I’m still ‘timing the market’. But, I’m investing in index funds, and historically, they should represent gains by my retirement. 

Connect with Chris at Heavy Metal Money

 

#4 Adulting World

So much has happened in the last 6 weeks that I am only just surfacing for air now. 

I am one of the lucky ones that has managed to keep my job during this turbulent time. For that I am truly grateful. The lines at Centrelink, the increased demand on food banks/charities and the small businesses who have no choice but to shut down are all heart breaking to see. Within the bounds of staying home as much as possible and staying safe, I am trying to spend more on take aways where possible to help out where I can.

On the financial side, my focus has changed quite a bit. Prior to the craziness and sudden stock market crash (hands up anyone who lost $$$$$). I actually just did my monthly numbers and had to take a few minutes to process it as in my case the loss was many tens of thousands.

That kind of loss in one month is breathtaking – as I’m sure it is for everyone who has money in the stock market. As Dave Ramsey says, the stock market is like a roller coaster, you only get hurt if you get off mid ride; ie sell when the stock market goes low. So I am holding on and watching to see what will happen. And isn’t volatility just like a roller coaster ride – except way less fun!

A renewable energy source - image from Pexels

When it all hit the wall and news of so many becoming ill and dying, I went into survival, probably panic, mode. I bought about 3 weeks of food, hired a treadmill at home and watched with increasing concern on rumours of runs on the banks etc. At that point, I decided to go even more safe and pulled most of my redraw funds into a separate bank account with a completely separate bank.

My concern was that if the banks were impacted by reduced mortgage payments etc then they could freeze the redraw funds. Normally redraw is where I keep my emergency funds, but not now. I also wanted to have the 6 months funds ready if my company shut up shop as I would have to get myself interstate to go back home.

So, with all that done, I continued to watch what was happening on the Australian and global stage.

Normally I’m pretty critical of the government and ScoMo (Australian Prime Minister) is a bit of a scone (how BAD was his handling of the bushfires!), but in this situation, I actually cannot help but praise their response. I acknowledge that some people will still be in terrible financial trouble but this government has read the situation and instead of bleating about the surplus, they did exactly what they should do – they threw money around like confetti to a large amount of the Australian community. And so they should. It was, and still is, critically important that people focus on their health and not put their lives at risk for money. Sadly, we have seen the result of that in the US – that is  a humanitarian disaster in the making.

I accept that we will all be paying for the debt in decades to come, but that is so much better than the horrendous losses of lives and livelihoods that could have been. I am more than happy to accept contributing to paying off this debt if it means that my and other’s family and friends stay safe and healthy. No amount of money is worth a trade for their lives.

On a personal front, given that the interest rates are now likely to remain at their near zero levels for the next few years, I’ve done a 180 degree turn in focus. Before the crash I was focused on a 60/40 split of excess money between paying down the mortgage on the rental property and putting money into shares. Also, putting money into getting myself organised for ultralight long distance hiking. 

I am still paying extra on mortgage, but only twice as much instead of about 6 times. I have made sure that the emergency fund stays plump and add a tiny amount to it each week. I don’t feel secure unless I have this ready to draw on in a time of need. Other than that, every extra $ is now being thrown at shares. I can’t help but feel that this opportunity might be my last big crash before I retire and I want to take every advantage of it that I can.

Lots of time reading articles on this crash versus previous ones leads me to wonder if it will be V, L or U shaped. Well, no matter, I can still see the advantage of building the portfolio now while things are ‘on sale’ with a view to enjoying the rise whenever it is. Some have even stated that we will likely see next an increase and then a far worse drop, say 50% before the share market will recover. Don’t know if I would bet on that but it will be interesting to watch.

The other thing that has changed is my retirement date. I thought maybe it might be in about 3ish years. Given everything that has happened, that is now probably closer to 5ish years, but sill significantly earlier than the normal age of 67. 

Life has become an endless round of long days at work, arriving home, dumping everything into one area, run in and shower, wash all clothes, disinfect keys, cards etc to be able to touch them the next day safely, sleep and then go to work again. Weekends and even Easter was spent sleeping and recovering. I am still doing all this every day and the constant stress is pretty wearing. 

I may look at changing jobs to something easier soon, but the fear when I consider that is more than I can cope with on top of everything else at this time. So, will put that aside until later.

 

#5 Educator FI

Photo by JESHOOTS.com from Pexels

Wow, the world sure changed quickly, didn’t it? My wife and I are both educators. March and the first half of April were a blur while we spent our time and energy trying to ensure students are supported during the closure. This kept us from paying much attention to the financial impact. I wrote about Pandemics, Priorities and Public Service.

Now that we’ve had time to look at it – it hasn’t affected our plan much but it has changed our timeline. We are fortunate that we’ve remained employed and paid during the crisis. Given where we are in our careers, we don’t expect that to change.

We’ve continued to contribute to our investments. We’ve always been buy and hold index fund investors so the market fluctuations don’t change our strategy – though I can’t pretend it’s fun to watch.

Some of our expenses have gone down with stay at home, but we’ve balanced that out by intentionally spending more to support small business and give to charities. We’re fortunate, so we want to help smooth things for others if we can.

We’d originally projected to become financially independent by July 2022. We may still make it, but it’s less likely than before. It all depends on when the crisis ends and how long the recovery takes.

The crisis and market downturn have been a test of our plan and we’re okay with the results. Our plan is solid, but FI may be farther off. It’s a good reminder that you can control your actions, but not always the outcome.

Connect with Ed at EducatorFI

#6 Fire For One

Photo by The Lucky Neko on Unsplash

The short answer is no, COVID 19 has had zero effect on my strategy, primarily because my focus for the next few years is to get my mortgage paid off. Probably the main thing is that I was planning to change the investment mix in my superannuation, but I’ve put that on hold for the moment until things settle down.

I’m very glad to have secure employment, but also very glad I have an emergency fund. 

Read what Fire for One wrote about what she was stoic about and what she was grateful about here.

Connect with Fire For One 

#7 FI after 50

Like every other non essential worker during the pandemic shut down, I’m hunkered down at home. The big silver lining for me is spending time with my kids, ages 17 and 21. They’re getting ready to fly away from the nest and I will likely never have as much time with them again. Ever. So I’m loving that part of the shut down. 

I’m also enjoying waking up to my body clock rather than an alarm clock, taking long walks, writing and watching The Crown. 

That said, everything else is a bit scary.

First are health concerns. I’m worried about my parents (ages 84 and 90), who live in South Florida – a hot spot for the virus. And although I have no underlying health problems, I turned 60 in December so am in a higher risk category myself, as are my sisters and many of my friends. 

 

Deb and Obi

Then the financial concerns. I had to close my preschool, of course. The very generous parents of kids in my school all paid me for the month of April, despite the closure. I can’t count on their continuing support, especially if this goes on for a long time. So I furloughed my three teachers, who were all able to apply for unemployment benefits. I also applied for the Paycheck Protection Program, which is supposed to provide funds to small businesses under the new U.S. Cares Act. With those funds, I would be able to hire back my staff and pay them for eight weeks, as well as recoup some lost profits (which would tide me over). These are loans that I would not have to pay back if I used them according to the rules.

Unfortunately, the money for this program ran out before my loan was approved (and I applied within a day or two of applications becoming available). So now I’m waiting for Congress to appropriate more money to the program. Even then, I don’t know if my application will make it in before the new funds are gone.

So a lot of unknowns. No one knows when businesses can open up again. Much of that depends on the universality of testing, which remains a distant hope here in the US.

And even when things do start to open up, do I open my preschool? Two of my teachers are in their 60s (as am I). We know well what efficient germ spreaders children are. At the same time, people need childcare if they are to return to work. So I’m not sure what to do.

In the meantime, we’re waiting to hear about my daughter’s summer dance program in NYC and the training program she’s planning to attend in San Francisco in the fall. If those are cancelled, it will save me a lot of money – but it will break my daughter’s heart. We’re also waiting to see what will happen in the fall at my older daughter’s college. Again, if they keep the campus closed and go to online classes only, I’ll likely save some money, but she’ll be so unhappy to miss part or all of her senior year.

I have been working on my blog, which has not yet made any money (of course, I haven’t added any affiliate links. I love the writing, but have so much work to do to improve my marketing skills – work I don’t enjoy). I’ve been thinking about other income generating ideas, especially one connected to the blog. I would love to become a financial coach, especially working with people nearing retirement age who haven’t saved enough. I think I’d be good at it, but I’m fighting mindset issues including imposter syndrome.

My seven-year-to-retirement plan will definitely be impacted, but the future is so uncertain that I can’t yet make a new one. At the moment, I consider myself very fortunate. I have my health, my family, and enough money to be okay for a while. But like many, I’m living with the gnawing anxiety of possible long term financial disruption.

I hope all of you Latestarterfire readers remain safe, healthy and in good financial shape.

Back to Latestarterfire

Thank you, everyone for contributing to this special COVID 19 update and sharing your current strategy with us. It is so interesting to read how COVID 19 has affected us, living in different parts of the world. This is a truly global crisis, with far ranging implications on how we live, work, connect with others, and of course our finances are impacted as a result.

Lessons I learnt from our Late Starters:

(1) Use this time of working from home to explore new income streams 

(2) Support local businesses and increase charity contributions if we can

(3) Emergency funds are CRUCIAL to surviving an … emergency – a pandemic would classify as an emergency

(4) Continue to invest in retirement accounts and index funds 

(5) Continue to pay down debt – some still aggressively, others pulled back a little

(6) Continue to track expenses and decide what to do with any excess funds – boost emergency fund, pay down mortgage, invest more in index funds, help local businesses 

(7) Take advantage of any government schemes to help us through this period (I hope you have better luck in the next round, Deb) 

(8) Once again, it is a question of time. Timelines to retirement may be delayed – no one knows by how much – lots of uncertainty and unknowns – all depends on how fast the recovery is after the crisis ends

(9) Enjoy our time of enforced quarantine and isolation to connect with partners and children living with us

(10) There are still simple things in life we can enjoy in lockdown – from going for long walks to a chai latte and cake 🙂

(11) Our worries and hopes are universal – we worry about the health of our families and economies, and hope for a swift recovery

Thank you for reading and connecting during this time of stress and anxiety. And once again, I really appreciate our Late Starters sharing their updates with us.

Please stay safe and healthy (physically and mentally), everyone! 

 

How has COVID 19 affected your FI strategy and life in general? What lessons did you learn from our Late Starters?

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