I read an article recently by Live Free MD, via the White Coat Investor. It was about Financial Indpendence being a continuum, not a specific number. In other words, it’s not something you reach all of a sudden; as your portfolio grows your goals should grow with it.
I like Live Free MD’s philosophy on money, and you should head over to his blog if for no other reason than to read about how he paid off $400,000 in debt in a few short years.
His post on Financial Independence being a continuum was a fun read that laid out fairly specifically his goals at different stages of his net worth. He is absolutely dedicated to reaching FI, and it was interesting to see how he laid out specifics for what he would do at each stage, especially in regards to how much vacation he would allow himself if he was at $0 net worth vs. $500k net worth and beyond.
One decision we made (albeit a little late) in regards to our careers was to leave the bright lights of the city and move to a more rural location. When our early jobs weren’t working out the way we wanted them to, we made a choice: Go where the money was.
What we gained with the move was an instant rise in income (that has continued to go up) in exchange for living somewhere that others may see as less than desirable. Obviously, there are a lot of downsides to living “in the sticks” as well, but I feel that those have been hashed over plenty of times in pop culture and the mainstream, so I won’t delve into them too much, at least not today. This is a Rural-Positivity thread!
Saving money on stuff really isn’t that hard. Honestly, it’s not. It’s a matter of looking at what you’re spending money on, deciding what matters and what doesn’t, and cutting out the stuff that doesn’t. It’s not a magic formula, but it takes a little introspection and some discipline.
Some things aren’t really optional. Life and disability insurance, rent or a mortgage, food and utilities; these are things that you really can’t live without. There are certainly ranges of costs that you can choose from in those categories, but the bottom line is you’re going to spend some money on those things because you have to.
It’s the other things in life – the vacations, the dinners out, the entertainment – that are harder to reduce or eliminate, because we just aren’t wired to give up things we like. Still, grown ups have to make tough decisions sometimes, and we did that when we decide to cut the cord (and yes, I realize that giving up cable is not a life or death decision, but still… it was tough for us!).
In my last post, we went into some pretty specific details about why I feel that Dave Ramsey’s financial plan doesn’t work for high-debt young professionals. One of the big issues I have with it is that it doesn’t call for any retirement investing until after your student loans are paid off. I think this is the biggest flaw in Dave’s plan, and as much as I love his work and have been personally inspired by him, this point deserves some deeper inspection.
I know what that post title sounds like. You’re thinking, “Here’s another entitled Millennial, complaining about how tough life is.”
I’m going to make a statement right off the bat: Dave, if you’re reading this (verrrrrry unlikely, but just in case), let me just say that there is no one that I need to thank more for getting me interested in personal finance. I know that the title of this post is a little harsh, but it’s really not meant to disparage how good Dave is at what he does. In fact, I’d go as far to say that when it comes to inspiring people to learn about their finances and encouraging them to get out of debt, nobody does it better. It’s a noble mission he’s on, and he’s helped countless people improve their lives through his programs, including me.
It’s almost impossible these days to go on any personal finance blogs that discuss student loans in depth and not see articles/ads/links on refinancing. There are several major student loan refinancing companies right now that are starting to have a large presence online, but newer companies are popping up every day as well. Especially for people that graduated with similar debt to that which we have (interest rates in the 6-8% range), refinancing is almost a no brainer.