Late Starter to FI series #9 – Recovering Women Wealth

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.

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.

 

Image by mohamed Hassan from Pixabay

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.

While I’m not working, working out, playing or doing recovery work, I like to read and obviously, write. People can connect with me on my blog, Instagram, Facebook, Twitter and Pinterest.

getting started checklist

Feeling Overwhelmed?

Use this FREE Checklist to start your journey to Financial Independence

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:

1. No!

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!

What's next?

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. 

Thank you.

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 …  

What obstacles have you overcome to make you the person you are today?

Late Starter to FI series #8 – Mrs Hack from Sustainable Living Blog

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

Image by volker sissek from Pixabay

A note on current circumstances

Many of these stories were submitted before the current COVID-19 pandemic and circumstances may have changed. The authors will update their circumstances if they wish, in the comments below.

We are in uncharted territory and the future looks challenging for a lot of us. My day job is in healthcare – I see first hand the collective fear and anxiety among the public, my colleagues and family. I have never witnessed such widespread panic and confusion or worked under such challenging conditions where information and policy changes daily. I wrote about my experience in this post

Yes, we are late starters – we have come to this Financial Independence (Retire Early) journey a little later than some but our journeys up this point have already been filled with courage and resilience. And these are the very characteristics that will see us through the current crisis.

So no matter what your circumstances are right now, however they have changed, I have every faith that you will be able to adjust and pivot as necessary. 

Maybe our progress will be delayed by a few years; perhaps we need to review our investing plan; maybe we have to tighten our belt further. Or perhaps we just have to sit tight and ride it out without changing anything. Whatever it is you have to do right now to survive and thrive, I know you can do it. 

I hope all of you are well and continue to be safe and healthy. 

 

getting started checklist

Feeling Overwhelmed?

Use this FREE Checklist to start your journey to Financial Independence

Introducing Mrs Hack

I am excited to share Mrs Hack’s story today. Mrs Hack writes at Sustainable Living blog – where she writes about finances and sustainability – the eco friendly and frugal path to financial freedom. You may also connect with her on Twitter or Facebook

Before the COVID 19 crisis arrived in Australia, we had another major crisis – the terrible bush fires that made world headlines. I feel for those who have lost homes and have not gotten back on their feet, only to be faced now with the COVID 19 crisis.

Mrs Hack was writing during the bush fire crisis.

This is her story.

A little about my family and I

Mrs Hack here from the Sustainable Living blog. My husband and I are in our mid 40s living in regional Victoria, Australia (where there are currently bushfires). 

We do have our bags packed, 40 litres of water and a fireproof safe with all our essential documents. Our insurance documents are up to date and hold appropriate cover. However, we’ve been told we live in a defendable town, but then … experts also said the Titanic was unsinkable.

I’m a primary school teacher and Mr Hack is a supervisor in a factory. Neither of us are high income earners. I’ve had a lot of time away from employment or doing part time or casual work bringing up children.

This is also complicated by the fact that one of our children has a complex heart condition and in his eight years has already had four open heart surgeries. There are six children in total, who range from 6 years to 27 years, four of whom still live at home. I have 3 grandchildren – one who lives at home (now 5 weeks old) with us and his 24 year old mum. 

We are also feeling the whole ‘sandwich generation’ scenario, having children to bring up whilst at the same time having elderly parents requiring further assistance. Sadly, my husband’s mother is currently going through chemotherapy for ovarian cancer treatment.

I don’t see us as being much different from other families. We may have more children than the average family, yet we still lead a normal, complicated and messy life.

As well as all the family and work stuff, I also write a blog about financial independence, frugality and the environment. 

How did we get here?

A few years ago, we were feeling a great deal of unease about our financial situation. We knew we didn’t have enough money to retire at the traditional age – based on our birth year, for us it is 67 years. We also wanted to have our mortgage paid off before retiring, plus there were still going to be children living at home as teenagers when we reached 60.

Despite having no debt, apart from the mortgage, we couldn’t figure out what we were doing wrong financially and why we were living payday to payday. Needless to say, we didn’t have an emergency fund and leaned on a credit card to get us through tough times (and there were a few extended hospital stays 300km from home). Our knowledge about investments was non existent.

It was then we came across the Barefoot Investor strategy. We studied the book and followed all the recommended advice and soon had a very good handle on our finances.

At the same time, we were disgusted at the amount of waste our household produced every-single-week and vowed to reduce our environmental footprint.

The combination of getting a great handle on our finances and reducing the amount of rubbish led to an epiphany – that financial literacy was directly linked to environmental stewardship! The less money we wasted, the less waste we created.

 

On the path to Financial Independence

After all these huge changes, it was a case of, what next. What was the next step going to be? Surely we had gone as far as we could go with our finances. Yet, little did we know there was a lot further to go. Learning about the stages of financial independence was quite an eye opener.

When I’m interested about a subject area, I want to know everything I can about it. So being typical me, I browsed the internet, YouTube and the library seeking further financial advice (my typical leisure time is used up by being hungry for knowledge).

I’m not 100% sure what led me to the concept of financial independence. It may have been a Mr Money Mustache YouTube video or it could have been a website article. But, one thing is for sure, once I found out I had to know more!

After much self directed study and number crunching, we calculated we could retire in about 12 years with the mortgage paid off. This would bring us to our late 50s. Whilst to some this may not seem much of an achievement age-wise, for us it was mind blowing. We went from looking like being broke pensioners reliant on the government to being self funded retirees. It also meant we could retire earlier than the expected 67 years.

Later on, we also figured out that as we reached our target number, work could become more flexible.

Our plan

Our target number is to reach $1M in 12 years or less, whilst bringing up a family and paying off the mortgage. This would allow us to live off $40k per annum (using the 4% Trinity study rule) in lean FI until we are able to legally access our superannuation at 60 years of age. I’m estimating our super will be around $400K by then, topping up our passive income to a total of around $56k per year.

Specifically the current plan is to live from the lesser wage following the Barefoot Investor principles. This is important to us as we are not interested in an extreme frugal lifestyle and would still like family outings and holidays and a little splurge money each.

The higher wage will be split 50% into the mortgage, 50% invested in index funds in the stock market. We project our mortgage will be completely paid off in four years – super exciting!

Of course, this is hypothetical and relies on both of us working full time. And, it goes without saying, that the more money we can earn the faster we will reach financial independence. 

Although, we could also get side railed by family needs but even if this happens, we know we are on the right path and that gives us a lot of confidence in the future.

 

Back to Latestarterfire

I am very happy to report that in the end Mrs Hack’s family did not have to evacuate during the bush fire crisis. But it must be nerve wracking, having everything ready just in case. Waiting for that call.

I admire Mrs Hack’s commitment to a sustainable way of living and how reducing her environmental foot print reduces her expenses too. She is an example for me to follow in my own quest to live more sustainably.

I am very sure that Mrs Hack’s creativity and ingenuity (I LOVE that she grows her own oyster mushrooms – this is on my to do list!) will see her and her family through this current COVID 19 crisis and beyond, to reach their goal of financial independence and retire early before turning 67.

What eco friendly strategies do you use on your way to financial independence?

Where can I send your
Monthly FIRE Goals Plan?

By signing up, you’ll also be added to my newsletter

You can unsubscribe any time, I promise.