3 Common Money Mindset Traps of Late Starters to FIRE and How to Overcome Them

Illustration of blue head with money signs in a thought bubble

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We all know what is good for us.

More exercise.

Eat better food.

Save for retirement.

Sometimes, we even know HOW we should go about doing it.

So, what is stopping us? Or preventing us from starting? What is the difference between those of us who persist and those who quit when the going gets tough?

The answer is – our mindset.

The longer I’m on my FIRE (Financial Independence Retire Early) journey, the more I realise how many hang ups I have about money. And that how I think or feel or believe about money ie my money mindset, greatly influences the outcomes I’m trying to achieve.

When I first learned about money mindset, I thought it was all a bit woo woo. I’m practical, if nothing else! I wrote about how I transformed my limiting money beliefs after reading Jen Sincero’s book – You Are A Bad Ass At Making Money.

If you are a late starter like me, we’ve had a lifetime of absorbing these beliefs and attitudes. Most of the time, we’ve done so unconsciously, picking them up from our childhood and life circumstances.

I’ve discovered these are the 3 most common money mindset traps for late starters who are pursuing FIRE. Let me know in the comments if any of these resonate with you.

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I've NEVER been good with money

There’s probably a lot of proof that we haven’t been ‘good’ with our money. But I’m sure there is also proof that we’ve made some sensible financial decisions in our past. It’s just that our brains prefer to latch on to the negative side of things.

I know for me, the thought that I’ve never been good with money has a lot to do with not investing once I bought my house.

If only I hadn’t stopped investing, I’d be FIRE’ed by now. This is a refrain that can go on repeat in my head, especially when it’s a stressful day at work. And I just want to be FIRE’ed RIGHT NOW.

But it also frequently turns into – see, you should’ve been better with money. You’ve NEVER been good with money.

To turn that around, I now think – But I AM taking action now. I am investing in and out of superannuation (retirement account) and saving via sinking funds. I know my priorities now. I have a plan of action to reflect that and I’m following it. I am getting better with money.

In other words, I give my brain something else to think about. I present it with evidence that I am making better decisions around money.

If the thought ‘I’m good with money’ is too far reaching for you, then use a ‘bridging’ thought – ‘I’m getting better with money’.

It's too late for me now

What’s the point? I’m already in my 40s, 50s … it’s too late for me now. Whatever I do now will not be enough, so why bother? I’m destined to never retire.

Sound familiar?

I thought the same thing when I discovered FIRE at 47.

But then decided to have a go anyway, as we Aussies like to say.

After all, if I did nothing, I’d be in the exact same situation as I am now. There is just the chance, however slight, that my situation may improve if I did something, anything.

And it is AMAZING what taking action will do.

Despite starting later than most in the FIRE community (where the ‘traditional’ FIREee retires in their 30s),, I am on track to retire at 55.

Sure, I had some savings in retirement accounts including one that I hadn’t contributed to for decades. But had I not started to take action when I did, my retirement savings would still be slumbering.

I consolidated the two superannuation accounts and decided what to invest in. And now, I’ve reached Coast FI.This means that even if I never contributed another cent to my superannuation, it should continue to grow to my desired number by the time I can access it at age 60.

So it’s never too late to start taking action. Any improvement in your finances is better than no improvement at all.

I'm not gung ho enough for FIRE

Then once I embraced FIRE, I felt like a fraud in the FIRE community.

I wasn’t eating rice and beans. My food costs for one person is more than that of a fellow blogger with a partner and 2 children.

The young ones are side hustling with a passion and negotiating pay rises. I don’t want the extra responsibility to justify a pay rise. I’m trying not to get back on the path to burning out – been there, done that. Never again, shudder!

A few years into my FIRE journey, I can say with confidence that it’s best if you don’t compare your circumstances, savings rate, priorities etc with anyone else’s.

The better question to ask is – am I progressing in the right direction? If the answer is ‘yes’, leave it be. You’re doing a good job.

Can you do it faster? More aggressively?

Of course you can. But what is the trade off?

Consider your mental health. For example, juggling jobs or side hustles may result in a lack of time to spend with family and friends. Consider your health. Is the extra stress causing other medical issues such as high blood pressure?

Your FIRE journey is yours, unique to your circumstances. Know what you will give up to reach FIRE faster and know what you won’t. Sometimes, it’s only for a while until we sort out our finances and that’s ok.

My philosophy is that there is no point in reaching my destination of FIRE, only for ill health (physical or mental) to sabotage my enjoyment of it.


The shame

What we don’t talk about much in the FIRE community is how much shame we carry around these negative money mindsets.

First, there’s the shame that we haven’t been good with money all our lives. We are ashamed of the debt we racked up. We are ashamed of our paltry retirement savings.

Then there’s the shame that we’ve left it so late and now must play catch up. We have to learn from the young ones crushing it.

Lastly, there’s the shame that somehow we are not doing enough, not gung ho enough to be in the ‘proper’ FIRE community.

We may not have it within us to go back to living like we did at college – eating two minute noodles and vitamin pills (which is exactly what my friend did at university). Not now when we are finally earning decent incomes and are used to a more comfortable lifestyle.

Late starters, we must forgive our past selves. And grant our current selves more grace.

We can’t change our past mistakes and dodgy financial decisions. BUT our future is very much in front of us.

The second half of our lives is still ahead of us. We may live till our 90s!

We owe it to ourselves and our families to get our $h*t together now and start taking action.

Earlier retirement is possible. That dream holiday is possible. Whatever your dream is, it is still possible.

We know better now. We can do better now. If we start taking action.

It’s time we let go of our shame and our past and embrace our future.

Money affirmations

I know all this sounds a bit woo woo but it works. Once your brain is presented with a different view, it will start showing you evidence of things working. And opportunities will open up.

These are some of my favourite money affirmations.

Choose one appropriate to your situation and repeat it to yourself daily. Write it in your journal. Put it on a sticky note on your bathroom mirror so it’s the first thing you see in the morning and last thing you see before bed. You get the drift.

– I am taking charge of my financial destiny

– Every action I take will lead to financial freedom

– I am getting better at managing my money

– I enjoy telling my money what to do

– My financial future is not set in stone. I have the power to change it.

– I am grateful for all the money I have

– My financial future is so much brighter than my past

– I am capable of making good financial decisions

– Money comes to me easily and abundantly (this is mine right now!)

– I deserve financial abundance

Now, please don’t think that just by saying or thinking these affirmations, it is enough for you to reach FIRE. Of course not!

But together with deciding what your priorities are and taking action such as reining in your spending, increasing your income and investing the difference, it will do wonders for your financial situation. And they will keep you focused on the job at hand.

Final thoughts

The 3 money mindset traps for late starters to FIRE can be overcome by thinking new thoughts and taking action.

Positive money affirmations can help us by reinforcing the actions we are taking towards financial independence. They interrupt our pattern of negative thoughts and feelings of shame.

Most importantly, it’s time to forgive our past selves for the financial mistakes we made. And move forward with confidence that our financial future is much, much brighter than our past.

So, late starters, don’t let these money mindset traps stop you from getting started on your FIRE journey. Or derail you from your plans.

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Late Starter to FI Series #35 – Finally Time to Live

Allen, his wife and 2 teenage children in a cave

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 or Facebook or Instagram.

And if you’ve missed any of the previous stories, you can catch up here – Late Starter to FI series


Disclosure: Please note that I may benefit from purchases made through my affiliate links below, at no cost to you. Additionally, as an Amazon Associate, I earn from qualifying purchases. Thank you for your support

I first came across Allen from Physician on FIRE’s Sunday Best and was excited to discover another late starter. Thankfully, he agreed to share his story here when I reached out. I am very grateful at the depth of what he’s shared.

You can connect with Allen at https://finallytimetolive.substack.com

Allen, his wife and 2 teenage children in a cave

A little about me

Hi, I’m Allen. I live in the US (Florida) with my wife, Maile, our two teenagers and our Labrador Retriever, Magic. Maile and I just turned 50 this past year. Magic is also about 50 (in dog years).

We have both spent the majority of our careers working in technology, which has paid well. We are very fortunate. However, for much of our working careers, those fat paychecks went straight into other people’s pockets to support our lifestyle.

We like to travel. One of the things we have learned from this community is the idea of “slow travel” or becoming “slomads” and that has changed our entire mindset on what retirement looks like.

We also like to learn new things so we have been investing time in learning Spanish. We intend to spend several months each year in Spanish-speaking countries, and we like the idea of speaking the local language to help us connect with the culture and people we meet.

I’m new to blogging, but people can usually find out what we’re up to from our substack newsletter / blog at https://finallytimetolive.substack.com

Childhood memories of money

When I was growing up, if we talked about money, it was in the context of “things”. Affording things, or not being able to afford things. The topic of money came up when it was time to buy groceries, clothes for school, a new car, or other stuff.

I guess I was raised with somewhat of a scarcity mindset. At times as a kid, I felt like I was financially a liability, because things that I wanted (or sometimes needed) provoked stressful conversations about money. That shaped my decisions and behaviour going forward.

Here’s an example that I can remember: I’m the youngest in my family and all of my older siblings got their own car and began driving at 16. But when I turned 16, I told my parents a lie. “I’m not ready to drive yet, Dad” I said. It wasn’t true, but I had heard my parents talking (and maybe worried?) about the cost of auto insurance. So I waited a year.

I haven’t done a lot of reading on the scarsity vs abundance mindset, but I think growing up worrying about affording basic necessitites has probably made me more risk-averse as an adult. I started investing money late in life, and I probably still hold too much cash.

With our own kids, we are trying to strike a balance between teaching responsible spending, while also helping them see that this is a world of abundance and opportunity. I love and use Paula Pant‘s philosophy in our family – We can afford anything. We just can’t afford everything.

I wrote a post about how communicating about money changed our family’s retirement trajectory – We Don’t Talk About Bruno, And By Bruno I Mean Money


Lightbulb moment

This will be a very roundabout answer on how I found FIRE, but it’s the way it happened for me:

Around 2018, I was pretty dissatisfied with my job. So my first instinct was to re-skill. As a manager in technology, you don’t always get to do something tangible. It’s a lot of meetings and emails, and it is easy to feel a little disengaged and not adding value.

I started to develop a little bit of Imposter Syndrome because there were always young, hungry managers surrounding me who are hyper-engaged in everything.

I thought I could maybe transition back to an engineer and be happier. Then at least I could write some code and feel like I did something real at the end of the day. So I took a Java programming class, and then an advanced Java programming class. At the end of it, I told myself ‘Wow, I just did some pretty complicated stuff.”

I don’t know why I made this connection, but learning one hard thing (Java) led me to think about what other hard things I could learn, and investing came to mind.

I love podcasts, so I searched for investing-related content and began learning a bit about value investing. The value investing ecosystem eventually led me to the Choose FI podcast, which is really about life optimisation more than anything.

Choose FI led me to Go Curry Cracker, Mad Fientist, Mr Money Mustache and many others.


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Our financial situation at the time of finding FIRE

We had little, to no debt, when we found FIRE. We paid off our house before we found FIRE, but that was more due to a scarcity mindset and wanting to feel secure. I think we had about $10000 in our emergency fund and we had legacy retirement accounts scattered all over from job changes throughout the years.

We were lucky in that we had at least done the conventional things right. We invested in 401K plans, though we did tinker with them too much. We started to build up our taxable account, wanting to apply some of the value-investing ideas we had learned.

We were investing in individual stocks and actually did pretty well on our picks. The thing is, we lacked conviction. We were only confident enough to invest a small amount in each company we researched. We got good returns, but we weren’t making big bets. We would have $25000 invested across 5 companies, and then $75000 just sitting in cash. 75% of our taxable portfolio wasn’t working for us.

We finally started aggressively automating monthly investments into a total market index fund and continued to do so all through the pandemic. The rate of return was lower, but we were putting more of our portfolio to work so our bottom line was better.

We started to transition our mentors in investing away from Charlie Munger and Warren Buffett to JL Collins, Paul Merriman and Jack Bogle.

First steps on the path to FI

Our first real FI step was to communicate with each other about what our goals were in retirement. We needed to get on the same page.

Before I started throwing spreadsheets at my wife on the ‘how’ of FI, I needed to sell the ‘why’. We needed to really crystallise what we wanted Life 2.0 to look like.

Then it became easier to make some of the sacrifices that FI demands.

Other factors that influenced my view on finances

My Dad worked very hard and had a lot of passion for his job. Unfortunately, much of his retirement savings were tied up in the stock of the private company he worked for. The company went bankrupt, and a majority of his savings were lost. When he was finally downsized, he was in his 70s. He couldn’t realistically hit the job market after that.

I watched my parents abruptly transition from a comfortable middle class lifestyle to being forced to live off of about a third of their prior income. They lost so much and eventually separated.

I learned then that you can’t rely on your paycheck to always be there. We all get older. And as our salaries increase, it’s only a matter of time before our name appears on the wrong side of a company’s cost reduction spreadsheet.

Americans, in general, are woefully underfunded for retirement, at least if they want to maintain their current lifestyle.

By FIRE standards, my parents had plenty of income, even after all of that happened to them. But they weren’t emotionally ready to cut their lifestyle. The change was just too abrupt.

Allen and family

How far along the path to FI are we now?

I retired in June and my wife still runs her own consulting company. We are in a pretty tough bear market right now, so it is fantastic that she is still bringing income into the house so that we don’t have to sell in this market.
My emotions ebb and flow between being confident and completely insecure. I wrote about some of my anxiety on our blog – Do We Have Enough? Has This Been A Terrible Mistake? Fear & Anxiety In Retirement

Thoughts on early retirement

Before finding FIRE, we were aware that we had a lot of savings in 401Ks and IRAs from various jobs, but it all seemed untouchable until full retirement age. One of our early ‘aha!’ moments was learning about Roth IRA rollovers, not only for tax savings but as a mechanism to access your retirement accounts early. Once we discovered how that worked, it made everything else seem possible.

Like many in the community, we have put together a pretty robust spreadsheet with our consolidated numbers across all of our accounts. I am a pretty detailed individual, so I wanted to see how our retirement balances looked each year.

We also used a very conservative investment yield of 5% and our numbers still took us into our nineties. Seeing our financial life laid out, year after year, really gave us confidence in the plan.

I was pretty dissatisfied with my job so I had been ready to retire for years. Having said that, it was pretty obvious we were entering deeper and deeper into a bear market. So we took a half step into retirement, with my wife continuing to run her consulting business for a while longer.

Retired is a word that I struggle with. When I first left the corporate world, I called it a sabbatical. Maybe I was afraid to assign some permanence to it. At a recent CampFI, I heard the term Financial Independence/Recreational Employment, and I liked that a little better.

The FIRE community is very industrious in my experience. Even those I’ve met over 40 don’t want to just sit on a beach and drink out of a pineapple. They just want more control over their own time and energy. I’ve spent my whole life regretting that I never started my own thing, always nesting in the safety of a big corporate job.

With my new freedom, I’ve thrown myself into writing with a very simple goal: Write 50 great posts. Strengthen that muscle. Build an audience. And then we’ll see.

Others' reaction to my early retirement

I think when you first learn about FIRE, you want to tell the world. You want to proselytize FIRE to everyone you know. But everyone is in a different place, living their own lives. It almost never goes well when I corner someone at a party and start trying to talk to them about FIRE. It’s maybe why I write about financial independence. It helps scratch that itch of wanting to tell everyone without freaking them out at a dinner party.

When we told our friends and families about our plans to FIRE, they were super congratulatory and supportive. My dad was a bit “flabbergasted”, to use his word. We haven’t had too many probing questions, though we’d be thrilled to answer them. They just accept us and all of our crazy ideas. I also think, being 50, we aren’t all that special. If we were doing this in our thirties, I’m sure we would receive a more puzzled response.

I heard this phrase in the GoWithLess Facebook community (which I highly recommend if you are into slow travel):

“They don’t know if we’re filthy rich or dirt poor”

Specific challenges or advantages of starting late

I’m going to make a pretty broad assumption, which sometimes gets me into trouble. But I’m going to assume that the people drawn to the FIRE community late in life are not in a dire situation. They are not heavily in debt, with terrible credit, and they are not getting pay day loans to stay above water.

For someone in this situation, while there are certainly things to learn from the FI community, there are more basic challenges to solve, and those may be better tackled through credit counselling programs, and even the Dave Ramseys of the world.

For those fortunate to have done the basics – remained employed, received steady rises, built some home equity, and contributed to available retirement accounts – like us, you are probably not starting from zero. You likely have some assets.

That is your advantage. You’ve been on the hamster wheel for decades, and have something to show for it.

So what’s the challenge?

If you’re like me, you are pretty far removed from your days of driving 15 year old cars, having room mates and eating modest meals. We become accustomed to paying up for convenience or comfort at our age.

So the big questions for us were: Can we get a handle on our spending? Can we get off the hedonic treadmill and stop throwing money away?

We found that if we could start spending like we were just out of college, and still find a way to be happy, that we could retire tomorrow.

That is easier said than done. We have found that cutting back on comfort spending is kind of tough. The FI community likes to talk about the ‘big three’ – Transportation, Housing and Food but don’t underestimate the challenge of making good $10 decisions every day.

We have created and thrown away a lot of budgets over the years, until we finally figured out that our impulse purchases are a very emotional thing. And ’emotional me’ doesn’t care about my pretty little spreadsheet. I wrote about how we changed our approach to budgeting and finally mastered those impulse buys – Until You Start Budgeting Emotionally, You Won’t Stop Spending Emotionally

What's next?

We are still maybe five years away from both of our kids launching into adulthood. Once that happens, my wife and I will do slow travel for about half the year. We’d like to hike the Camino de Santiago while we still have “young knees”.

Ultimately, we expect we will settle somewhere international as full time expats when we grow too tired of jumping on airplanes. We will have travelled all over, to some amazing places with great culture, food and low cost of living.

I think slow travel, besides being cheaper than how most people travel, gives you that extra time to answer the question “Could we live here?” We think that answer will be yes many times over, and the difficulty will be choosing between say, San Miguel de Allende, Mexico or Porto, Portugal.


Back to Latestarterfire

Thank you, Allen for sharing your story especially about your experience of retirement. I totally relate to that fear of ‘What if I’m making a monumental mistake?’

And the struggle to rein in spending when we’ve gotten used to a certain level of comfort in our lifestyle. I would go so far as to say that is, in my opinion, one of the greatest challenges of the late starter to FI. I love that you’ve incorporated emotional impulse spending into your budget!

I also resonate with your experience of a scarcity mindset from childhood – it is hard to change that mindset and know when enough is indeed enough.

Looking forward to reading more about your activities in early retirement!

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