Category: Retirement

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Late Starter to FI Series #37 – Enough Time To …

photo of water, sky and mountain

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

photo of water, sky and mountain
More time to enjoy nature

I’m excited that today’s Late Starter, Mrs ETT agreed to share her story. She’s a frequent commenter on this blog (thank you!) and used to blog at Enough Time To.

I didn’t realise that our stories had a lot of similarities, one of which was that we’d both paid off our homes when we found FIRE.

Mrs ETT no longer blogs at her site so please comment below as a way of connecting with her.

 

A little about me

Thanks, Latestarterfire, and hello fellow FIRE followers!
 
Mr ETT and I are DINKS who moved to regional New South Wales in 2018. I work in data after a varied career in science, health support and a small stint in teaching. Mr ETT works in cybersecurity.
 
We are in our late 40s/early 50s. I used to blog at enoughtimeto, about using FIRE to buy time to do all the things I want to do. Like blogging again, for example …

 

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Childhood memories of money

I had an upbringing in the 70s where Dad worked and Mum stayed at home, until we reached high school (I think?). I guess we were middle class. Money didn’t feature strongly in my childhood.
 
My earliest money memory is going on an excursion to the Australian Museum in primary school. We were allowed to take money to spend at the shop. I can’t remember what I bought, but it was all for me.
 
When I got home, instead of being excited, Mum accused me of being selfish for not buying things for the family. I still remember that she said, “you used to be so generous”. I couldn’t have been older than 10.
 
Another memory is that we were all at the bank, and Dad had withdrawn a chunk of cash, which was placed in an envelope. I’d never seen so much money! I was excited and tried to ask them about it, but (rightly) I was shut down because it had to be a secret that he was carrying it on his person.
 
I got my first casual job at 14 years and 9 months old. We were paid in yellow envelopes that I walked straight to the bank with and deposited. Mum taught me to budget in a lined notebook, but even then, there was no discussion of household finances, other than we were expected to pay a token amount of board.
 
I think all these experiences added up to me being a saver. Spending it in the wrong way got me into trouble; money is secret and needs to be controlled.
 
Of course, since discovering the FIRE community, I’m learning that there are other ways to think about and use money.

Lightbulb moment

We had paid off our mortgage, and I was feeling lost. I don’t like debt, so we paid extra on every single payment from the beginning (interest rates ranged from 6% to 9%).
 
Once that was done, however, there was no new goal. I had no clue that there even could be one!
 
We succumbed to some lifestyle creep, but the feeling that we should be doing more became so uncomfortable that I started adding extra to our Superannuation (retirement account). It was the only thing I knew about at the time.
 
The story of how I discovered the life-changing world of FIRE has been told on Adventures with Poopsie’s blog. That must have been around 2015/16, so I was in my early 40s.
 
Latestarterfire – I love your Frugal Hound story – Mrs Frugalwoods inspired me to start living more frugally too. That blog post was published in 2018 – it’s so amazing what you’ve achieved since then!

Our financial situation then

At the time, we had little to no debt. Maybe a car loan? But by then we were borrowing a maximum 50% of the value of a car so it wouldn’t have been much. These days, we save for replacement cars, no more loans.
 
The only retirement savings we had were in Super, and we weren’t contributing extra. We had paid off the home loan using an offset account, which I kept open to act as an Emergency Fund. Of course, at the time I didn’t know that’s what it was called.
 
I had some NRMA shares that had been parcelled out to members when they initially floated, so no work/research done by me.

I also held a Perpetual Managed Fund, as it had been recommended in Money Magazine, but again, I didn’t understand it. At all. When I finally closed it, I realised it was a balanced approach that had probably lost me money over the years. Live and learn.

First steps on the path to FI

Reading, reading, reading and more reading! Also listening to some FIRE podcasts.
 
I think my first action step was to put a small amount of money into Acorns (at the time, Raiz now). That allowed me to dip my toe in the water with about $1000 and get a feel for how the markets moved up and down.
 
After that, we opened a Vanguard Managed Fund. That is still where the bulk of our savings outside of Super lie. I also started using YNAB and revising our expenses down.
More time to visit wineries

How far along the path to FI are we now?

Unbelievably further than I thought we could be. I find it gob smacking how simply having a plan and implementing it can grow your money so significantly.
 
Sometimes I think the numbers can’t be real, and I find myself back in the spreadsheets and double checking the budget. We are about 70% along, and we’ve never been hard-core FIRE. I used to feel sad seeing other people’s savings rates and comparing ours. Yet, even so, here we are!
 
How do I feel? This is hard. Suddenly, the end is in sight.
 
There is a real possibility we can retire in 5 years, but we are in the long, boring middle. We are Coast FI and Flamingo FI.
 
Latestarterfire – Coast FI is where you’ve saved enough that you’d reach FI at traditional retirement age without investing a cent more;
 
Flamingo FI is coined by Money Flamingo – where you’ve saved half your FIRE number and you’ll reach FIRE in the next 10 years without investing any more (assuming a 7% rate of returns) You can semi retire and just need to work enough to support your current lifestyle.
 
Mr ETT has been making serious noises about enjoying our time now instead of waiting. I also worry that I spend too much of my time envisioning the future, and not enough living in the present.
 
Hearing about the whole Die with Zero* conversation (I haven’t read it yet), we are fighting to establish a new normal. If we let go a bit, can we still reach FI at 55?
 
Do we still want to fully retire, or would/could we continue working, just less? Will our FIRE number increase if we start spending more?
 
Although this is confusing and a bit painful, to be honest there’s no wrong answer. Whatever we decide will bring its own benefits.
 
*Latestarterfire – I have read it and I like the philosophy. It’s about doing things with your money while you can. For example, there are things on your bucket list that are meant to be done at certain ages. It’s too late to backpack around Europe in your 70s.
 
It’s not about being irresponsible with money. And if you want to leave a legacy to your family or charity, then set aside that amount of money first and spend the rest. Instead of spending your money and leaving the leftovers to your family/charity when you die.

How did COVID affect our strategy?

COVID didn’t change our strategy. We were both lucky enough to work in industries that weren’t affected, although we had relatives who couldn’t work due to stay at home orders.
 
But the relief of being where we were with our FIRE savings can’t be overstated. Even if both of us lost our jobs, we could have continued with no change in lifestyle. If called upon, we could have helped our family members.
 
We are so grateful to the entire FIRE community for sharing their knowledge and experience.

Specific challenges or advantages of starting late

Time is the challenge. But as I said above, even when you think you don’t have enough time, you might be completely surprised at what you can achieve.

“Early” is relative. When we first started FIRE, our initial goal was to retire before pension age, at 67. Then it dropped to 60. Now our stretch goal is 55. If you’d told me that in 2016, I would have laughed and laughed.

Starting late means we have life skills, and a whole range of contacts. Hopefully we have more experience in research and the ability to take a balanced look at things.

Depending on our past, we might be earning more than we’ve ever done. And if nothing else, maybe we can look back at our pre-FIRE selves and enjoy the memories of what we did with the money back then 😀

What's next?

Figuring out whether we continue to push for the next five years, or whether we slow down and take a Flamingo FI approach. Or maybe some balance between the two. Continue to read and listen to others in the FIRE community, and to share the concept in person where there’s some interest. Maybe one day I’ll begin blogging again!

Back to Latestarterfire

Thank you, Mrs ETT for sharing your story!

It’s interesting to read about your childhood money memories and how that has shaped you as a saver. It reminds me that we can unwittingly pass on our money stories to the younger generation.

I totally agree with you that it’s “gob smacking how simply having a plan and implementing it can grow your money so significantly.” It’s hard to envision it when we first begin our FIRE journey. And that’s why it’s so important to just start anyway.

I think we are at the same stage of our FIRE journey. I know exactly what you mean by the long, boring middle 🙂 You can see that the end is in sight. But you’re not quite there yet.

I feel your questions keenly – “If we let go a bit, can we still reach FI at 55? Will our FIRE number increase if we start spending more?” because these are the same questions I ask myself.

It’s all a balancing act and I can’t wait to see what you decide in the end. Whatever you decide, you’ll have enough time to spend in nature and visit wineries 🙂

 

Are you in the long, boring middle years of pursuing FIRE? What are your thoughts about reaching your destination?

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Late Starter to FI Series #36 – Catching Up to FI

image of headless medical people holding stethoscopes

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

image of headless medical people holding stethoscopes

I first came across Bill while listening to the Earn and Invest podcast by Doc G (Jordan Grumet) –  Episode 361 – The Consequences of Being Unconscious With Your Money.

A lot of what he shared resonated with me as a late starter – how backloading our finances is so much harder than frontloading it when younger. And the guilt of not being better with money earlier in life.

So I reached out to ask if he would share his story here. Thankfully he said yes!

You can reach Bill at two Facebook groups he administers – Catching Up to FI and Financial Literacy Project

And now over to Bill …

A little about me

My wife and I are reasonably high income physicians, in emergency medicine and psychiatry. We’re empty nesters now, in our late 50s and living in Tennessee after a long chapter in Chicago with our Aussie Labradoodles.

Lightbulb moment

I only woke up to the notion of financial independence at age 50. I’d been asleep at the financial wheel and almost crashed. It had been a 20-year Rip Van Winkle slumber. I realised suddenly that I had an irresponsible, unconscious and unintentional money mindset.
 
I could offer plenty of excuses, but they don’t make me feel better. Shame, grief and disbelief overcame me initially. At times, regret still haunts me. We had lost so much time without taking care of our future.
 
An acute financial depression ensued. I felt panicked and lost. Our financial realisation arrived simultaneously with family health issues, transitional job stress, downsizing and a growing awareness that I had a conflicted relationship with money.
 
The weight of all this nearly led to a mental breakdown. Yet my tale is an optimistic story of recovery, thanks to a dramatic change in our financial attention and direction.
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The early years

As is often the case, our relationship with money was forged in childhood. I grew up in a middle class patriarchal household. My mother was a nurse and then a stay-at-home mum. My father was a state-employed physician and sole breadwinner. My parents divorced for many reasons – money among them. We had enough, yet were led to feel like we lived in constant scarcity.
 
Neither my wife nor I had any constructive money behaviours to model. There was also an utter lack of formal personal financial education. We learned to care for others without learning how to care for our financial selves. Somehow, it always seemed there would be a time to take care of this “later on”.
 
We exited medical school in our early 30s. We had no idea how to allocate the money from our first real paychecks. I now know the recipe for financial independence. Start early. Insure your human capital. Increase your income. Spend less than you earn. Save the difference. Avoid consumer debt. Invest in a simple portfolio of low cost index funds. Let compounding work for you.
 
It’s simple but not easy. We didn’t know any of it at the start. Immediately out of our residencies, we started a family. We were blessed and overwhelmed with fraternal twin boys. One of them had significant developmental challenges requiring years of intense focus. Happily, in the end, our concerted efforts paid off.
 
We bought a big doctor’s house and new cars. We hired high-cost financial ‘advisors’, among them insurance salesmen. We established an inflationary lifestyle that led to a paycheck to paycheck existence. We spent first and saved the leftovers.
 
Who knew what dollar cost averaging was? There was a never-ending litany of distractions from our money managers. It’s scary for me to think how common our story is, especially among late starters to the financial independence movement.

Mistakes along the way

Our biggest mistakes happened during the Great Recession. We completely renovated our “forever” home in 2007. Housing money was cheap and plentiful then. By 2008, we were suddenly underwater on the mortgage and house-poor.
 
In addition to our paltry savings rate, we panicked and sold stocks. Committing a cardinal financial sin, we “de-risked” our portfolio at the worst possible time. We missed out on a significant portion of the subsequent bull market recovery. Our non-fiduciary advisor just let us do it. We had no idea what we were doing.
 
In the end, we emerged from a 20 year wind tunnel of spending with less than $1 million in savings. It was 2016, and we realised that our retirements loomed ahead. At age 50, ignorance was no longer bliss.
Luxury speed yacht near tropical island in Miami, Florida
Not Bill's actual boat!

First steps on the path to FI

I went down the investment book, blogging and podcast rabbit hole. Analysis paralysis set in for a time. I wished someone had created a personal finance education platform just for physicians.
 
Then I discovered it’d been done. Driven by his passion for giving doctors and other high income professionals a “fair shake on Wall Street”, Jim Dahle had already created The White Coat Investor.
 
With this knowledge now in hand, the race was on to take over our financial lives. We fired our financial advisor from the big private bank. We moved our investments from actively managed mutual funds to passive index funds at Fidelity Investments and Vanguard Group.
 
We left only our checking accounts at the bank. We opened a high yield savings account at Ally for our emergency fund, and created various savings funds for the intentional needs and wants that we’d identified as still worthwhile.
 
Our gains were still punctuated by mistakes. Fortunately, we had exited a whole life insurance policy and purchased term life insurance. Unfortunately, we had used the proceeds of the whole life policy to pay cost overruns on our home renovations. Fortunately, we moved from Chicago to lower cost Tennessee. Unfortunately, we’d build our own house there.
 
Mistakes are best made when you’re young and have time on your side to recover. We certainly made mistakes, but now our time to recover was dwindling.
 
We finally realised how leveraged our lives had become. To get out of debt and reverse the tide, we shoved our savings rate from the single digits to 35% to 40% of income. We saved as much as we could without eating rice and beans. Painfully, in 2019, we downsized from our costly custom home.
 
We kept shedding our materialistic weight, including selling our pleasure boat. Appropriately named YOLO – you only live once – it described our old way of living.
 
Lifestyle inflation was insidious and easy. Lifestyle deflation is much, much harder. Yet, amazingly, our overall quality of life isn’t much different than before.

Can you wake up too late to catch up?

Sadly, I think the answer is yes.
 
It’s never too late, however, to take control of your financial life. If the best time to plant a tree was 20 years ago, the next best time is now.

Our relationship with money has changed

We just don’t let money slip away any longer on the mindless consumption promoted by our culture. Those dopamine hits are short lived. The Joneses may appear rich, but they probably aren’t wealthy.
 
We’ve chosen to enjoy the present, but not sacrifice our future to it. I know that’s not assured, however. From my work in the ER, I know that planning on those future golden years can be an illusion.
Lily and Rudy

Will we reach FI?

Today, we’re well on the way to financial independence. The goalposts still move a bit, but right now, 63 to 65 is our target retirement age.
 
Critical to achieving this goal is following our formal investment policy statement and an intentional life plan. Even with all our progress, our current phase of mindful living can still feel like the hardest part.
 
Why? The problem lies with our late start.
 
It’s hard to stay on the straight and narrow when we’re surrounded by a community of early starters and early retirees. We have some ground to make up, while our peers can be more relaxed with money now.
 
We’ve amassed roughly 3.5 times our net worth since 2016. Our home’s value makes up 20% of this total. College for our twins is paid off. Thanks to a modest windfall, we paid off the last of our debt a few years ago – and treated ourselves to a hot tub.
 
A debt free life has brought extraordinary peace of mind. The hot tub is good for our aching backs. Our nest egg still needs to grow a bit to meet our anticipated retirement spending. We are works in progress, but now it feels like we can get there in time.
 

What's next?

Stay the course. Stick to the plan. Which is easier said than done. We have less time to recover from mistakes, and yet we still make them.
 
The question I often ask is this:
While late starters like us are probably the predominant demographic in society, why do they make up such a small part of the voices in the financial independence community?
 
We’re the silent majority and should speak out to help others that come after us. There’s no better time than now.

Back to Latestarterfire

Thank you so much, Bill for sharing your story.

“Lifestyle inflation was insidious and easy. Lifestyle deflation is much, much harder.”

This is so true and is a hard lesson for us late starters to learn. After years of living above our means or constantly upgrading our lifestyle because we’ve worked so hard to earn our money, it’s a shock to the system to have to tone it down.

Staying the course now is hard, I agree. Especially when you see many others in the community who are much younger retiring early. But I firmly believe that your time will come too. You’ve already made so much progress and being debt free will free up so much more to shovel into investments and savings.

I look forward to listening to your new podcast with Becky – Catching Up to FI. If there are any readers who’d like to participate in the podcast, please reach out to Bill. The more we share our stories, the more we spread the message that it’s never too late to take control of our finances and save for retirement.

 

How has lifestyle inflation affected your ability to save for retirement?

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