It wasn’t until I saw a Kiplinger magazine on the boyfriends table and read it that I started to understand what it meant to manage money. Like a lot of folks I did not grow up learning about finances. It was not taught in school. And it was not talked about much at home.
Pretty much everywhere I went money was a taboo subject. I learned so much about money in that one article that I was hooked. I went to the library and checked out about five books on personal finance.
I know in the beginning it was a lot of Suze Orman and people I saw on television like celebrities whose books I read. Then I moved on to money experts like Peter Lynch, Warren Buffet and John Bogle. I also found books by money bloggers.
I remember over time going from $5,000 to $150,000. I increased my 401k contributions every year and eventually got to saving over 25% of my income! I knew that it was not enough to just open an investment account. I had to also invest that money.
A huge misconception is that if you open a brokerage account for Roth IRA then you are investing. Wrong. You have to tell the money where to go. If you don’t, its like putting popcorn in the microwave, shutting the door, and then saying to the microwave now pop without setting the timer telling it how long to actually cook the food.
I didn’t know this either. I just did what my 401k told me to do. Pick a fund. And that’s okay. You are just getting started.
What really helped me go from $0 saved to slowly making my way to over $250,000 in investments was watching a show on CNBC it was called…The Suze Orman show.
I took a much needed hiatus for the last few weeks to come to terms with the new world order of life during the COVID-19 lockdown.
I did the usual. Stockpiled water, canned goods, cereal, and toilet paper.
Now I’m back.
If this blog could talk, I am sure it would have asked me this question.
After making sure I had food, water, and medicine to stay physically healthy, my mind started wondering about my fiscal health.
Then I thought, shouldn’t people also be making sure they are staying not only safe, but also financially solvent during the pandemic.
Much like Angela Chase (Claire Danes) was constantly obsessing about her crush Jordan Catalano (Jared Leto) in My So-Called Life (MSCL), I would find myself constantly obsessing over my finances.
For those of you who are unfamiliar with the show, My So-Called Life is an American teen drama television series from the 90’s that aired on ABC and then in reruns on MTV for years after it ended with only one season.
The plot surrounded a young 15-year-old girl that spent much of her time trying to figure out life and navigate being on the cusp on adulthood. The cast also just recently did a virtual reunion and reunited back together in 2020.
Now, back to my story.
I needed a fiscal safety net and plan in place that would allow me to weather and fiscal storm, including the coronavirus.
With over 33 million people filing for unemployment, I needed to shore up my resources.
My So-Called Finances needed my full attention. I was up for the undertaking.
START FROM THE FISCAL BEGINNING
Many of my lessons about money started when I was very young. I knew it was very important to have money so that you could take care of yourself and your family.
I got in the habit of saving when I was only three years old. That habit hasn’t changed. I have technically always been a saver.
However, along the way, I got lost. Kind of the same way that Alice did in Wonderland.
I too found myself in a maze of things I did not understand. I needed those signs like Alice got.
You know the ones. They said things like; Drink me.
By high school, I was an angst ridden teen with a penchant for spending. Then it hit me. Maybe I should start reading about this money stuff.
My 401(k) would be my new boyfriend.
As, time went on, I started obsessing about retirement. The hand-to-mouth existence dd not appeal to me.
I thought about what the heroine, Angela, in MSCL would do. She would probably start reading a book and asking a friend for advice.
I knew the same way Amy March did in Little Women that I would not be pauper.
Fun Fact: Claire Danes also starred as Beth in the 1994 adaption of the book.
Therefore, I had to change some things. They say the first step to solving a problem is admitting that you have one. It hurt to see that low bank balance, but it had to be done. To know where you are going, you have to know where you are.
The first step was to set a goal. If I had something to aim for, then I had a purpose. The goal: A one million-dollar 401(k).
LEARN HOW TO BECOME FI
The Tools to Succeed 1. Learn skills to sell for money You need the skills to become Financially Independent (FI).
I wanted to be fiscally savvy. Therefore, I had to read. Angela started off the show reading the book, The Diary of Anne Frank.
I started my FI journey reading a Kiplinger magazine. Then from there, I started watching the Suze Orman show. I knew I didn’t want to sit at a desk for 12 years only to end up sitting at a desk for another 40. I needed a plan. Being able to escape the rat race sooner rather than later appealed to me.
I started devouring personal finance books and blogs. Some of my personal favorites are The Automatic Millionaire, The Millionaire Next Door and I Will Teach You to be Rich. Then you have to decide on a path. I chose passive investing.
That turned on the light-bulb for me. Wealth building is about action.
Building wealth would take time, sacrifice, and work.
PASSIVE VS ACTIVE WEALTH STRATEGIES
Some people choose to start a business, become doctors, lawyers, actors, musicians, consultants, chefs or to make their fortune. I would get mine by investing.
I still needed a career to get paid. So, I found an employer to buy time form me and I equally willing to sell time to them. You can work in the public or private sector.
You can get further up the income ladder by gaining skills in the public sector and then selling them at a markup in the private sector to arbitrage your valuable skill assets.
I picked a job in finance. Once I got that job offer, I made the choice to start investing ASAP.
The 401(k) offers a maximum contribution of $19,000 and the IRA (Traditional or Roth) offers a max of $6,000. That is a total of $25,000 annually. I got my start with 6% and a match of 3%. Then, I slowly started working my way up by increasing my contributions by 1% a year.
2. Passive strategies There are two strategies here: A. Live below your means (LBYM); B. work smarter not harder.
Your employer wants to make more off of you than they pay you. Your work will not go unrewarded, but will be under-rewarded. Therefore, it is your job to invest in yourself by saving for your retirement.
CREATE AN INVESTMENT ATM
You must save enough to start earning large amounts of interest off your principal investment.
3. Accumulation phase Your job here is to start contributing as much as you can to your 401(k).
After, saving a 6-month emergency fund so you are no longer living paycheck-to-paycheck, start putting in every dollar you can into your accounts. Save until it hurts. Even if all you can afford is $50 a month. Save something. This will eventually become your own personal ATM.
It will be like a vending machine. You step up, put in your request, and the machine hands you what you want.
The RMD has now gone from 70.5 to 72. Therefore, you can let your money ride on the interest gravy train for an additional 1.5 years. On a million-dollar portfolio, that would mean an additional $105,000 with a 7% rate of return.
KEEPING IT PASSIVE
Building up your assets. I started with $5 and then went on to my first $100,000 and beyond. It can be done.
4. Passively build a sizable investment pool Find ways to earn income.
This can be with royalties from writing a book, collecting rent on rental properties, or renting out your parking space.
The goal is to trade time up front to build an income stream that with essentially last forever. Then you can kick back and relax.
If you have to sell 40 hours a week or the sum of 2,080 a year, you should get something out of the deal. Simple math can change your life.
I knew that one-million could spit off $50,000 of income forever with a 5% return. I just had to get there first. When I got to the point where my next money milestone was going to be $300,000, I knew I was on to something.
FREEDOM IS THE ANSWER
Why invest so much money? It’s simple. The answer is freedom.
Free from worry over how to pay bills, over how you spend your time, and quality of life.
Money equals power.
Money lets you be more confident.
Debt consumes as it only takes from you and gives you nothing.
The way to build your confidence is through positive experiences. Paying off debt then saving and investing that money will give you that. This in turn will build your self-esteem.
My favorite scene in MSCL was the one in the episode titled, “self-esteem.”
Confidence is key my friends. It attracts things to you. In Angela’s case, it was Jordan. Oops. I meant to say Jordan Catalano. For some reason on that show, he could never just be Jordan.
So, you see in the end, that you can get what you want. You just have to be patient, ask for it, and work for it. They say ask and you shall receive. Try it. I did.
Thank you! And you should let me interview you for my blog. I see you posting everywhere. You're one of the hardest working men in the blog business. pic.twitter.com/o5ZrI7ke8J
So yes ladies and gents, this post happened from a tweet!
He seems as passionate about writing and blogging as I do!
I was born for this, born for this It’s who I am, how could I forget? – Macklemore
How I feel about blogging.
“Tonight, darling, we are going to right a lot of wrongs. And we are going to wrong some rights. The first shall be last; the last shall be first; the meek shall do some earth-inheriting." – John Green, Paper Towns #papertowns
Let’s get right down to it! It goes down in the DM!!! It goes down. It goes down!!! 😂 Yo Gotti – Down In The DM
The blog and the interview was done by Miriam of Greenbacks Magnet, but those lyrics up top are by Yo Gotti.
INTRODUCING
Welcome aboard all! All are welcome!
Welcome to Greenbacks Magnet. Home of attracting Greenbacks like Magnets! 🤣Can I help you find financial freedom?
I want to thank you all for coming along this financial journey with me as I study the self-made and do blog interviews. You know, you are all my copilot’s on this magic carpet ride.
In the illustrious words of #Aladdin Genie, “You ain’t never ever had a friend like meeeee!!!”🤣
Let’s Meet Dave!!!
I actually met Dave at FinCon. He was positive and had a great attitude. That was the thing I remember about him most. He may not have known it but I thought to myself now there’s someone I would not mind working with. 🤔
And here we are today.
Another day, another breath (another breath) Been chasing dreams, but I never slept (I never slept) – Glorious Macklemore featuring Skylar Grey
I told Dave I thought he was one of the hardest working men in the blog business. I said that because I would go to read a post by a personal finance blogger and he would have already been there and posted the very first comment!
I couldn’t keep up with him! And I work HARD!!!
I remember seeing a comment on one blog post he did and he said, “Oh get out the popcorn. I see an interesting comments section coming on this post.”
Yep, that’s Dave.
What it felt like to meet Dave at FinCon.
He’s a genuine guy. 😉
Let’s talk about how Dave caught on financial FIRE!
DAVE STARTS A FINANCIAL FIRE BLOG
GBM: Hey Dave!! You should let me interview you for the blog! 5 questions tops! If it will get this ball rolling. I know you’re busy, but I promise to keep it short and snappy. Scouts honor. 😉
Dave: Hey Miriam, I will have to ponder these and will get back to you, interesting questions 😉
What is FIRE? It stands for Financial Independence Retire Early.
There are tons of blogs out there on the topic.
I even wrote a post called How do you play with FIRE?
WHAT IS FIRE?
According to Camp Fire Finance, the elevator pitch for FIRE is this, “When your investments generate enough money to cover your annual expenses you’re financially independent (FI). At that point work is optional and you can retire early (RE) if you want to.”
Basically, you have more than enough money coming in to stop working. Usually, this requires anywhere from $1 million to $5 million dollars depending on what you want or need to spend to maintain your lifestyle or that of the one you dream of having.
For example, if you decide you want to withdraw at least $80,000 a year, you would need to have a $2-million-dollar portfolio.
This is how I visualize myself on FIRE! 😂💋
Jennifer Lawrence in the Hunger Games was serving them eye candy with that dress. It was literally ON FIRE!!!
To stay on theme, I will pick this image for Dave. 😉
Let’s get to the interview. 😊
Dave: Hey Miriam, here are my responses.
1. How did you come up with your blog name?
I named my blog Accidental FIRE because I reached FI accidentally – meaning I wasn’t intentionally trying to get to a point where I didn’t have to work anymore. I just wanted as much of a nest egg as I could get because I come from a background and family that has no money. So it was about building security in my life. But when I discovered the 4% etc it then accidentally became about working less too.
Good for you! 👍
It’s great to have goals. I call that a win!
GBM Miriam: Some people may think building a nest egg from the ground up is impossible. I say personal finance is not rocket science. It is about earning, saving, and consistency.
Thanks for keeping it 💯and sharing that.
2. Any favorite finance books? What’s on your nightstand?
My favorite financial book is “The Simple Path To wealth” by JL Collins because it does the best job of boiling the basics down to make a FI path, well, simple. On my nightstand now are two books “War Letters: Extraordinary Correspondence from American Wars”, and “The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure”. Also my eyeglasses and a candle.
Well ok ✌That’s some good reading material right there. 👍
GBM Miriam: I am actually reading The Simple Path to Wealth by JL Collins right now! I guess great minds think alike! 😉
This was me in school. 😂
Even today, if I’m not reading, I like to exercise. 🤣 I like to keep busy. No idle hands.
I still read comic books too! My favorite is Red Sonja.
She Devil with a Sword
Fun Fact: The Marvel comic Red Sonja was turned into a film in 1985 starring one of my favorite self-made people to quote Arnold Schwarzenegger.
“Don’t focus on getting to $1 million; focus on getting to $2 million.” – Arnold Schwarzenegger
I heard that little gem when Mr. Schwarzenegger was doing a radio interview.
I’ve learned to make every dollar count. Focus on turning every $1 into $2. Instead of $1 million focus on $2 million. I learned that from @Schwarzenegger 😉
Just my 2 cents. Smooches 💋
How Arnold Schwarzenegger Totally Recalls making $20 million-dollar paychecks https://t.co/bINnB2OlIp
3. What’s the most interesting thing about you that we wouldn’t learn from your resume?
I’m a pretty good juggler.
Awesome! 👍That’s pretty cool.
4. What’s in your wallet? How did you start building wealth?
If you mean what kind of credit card I have a US Bank VISA that gives great reward points and that I use for everything. I started building wealth as soon as I started working when I was 16, I’ve always spent less than I made. But I started supercharging my wealth-building after reading a copy of Money magazine in 1995 and putting money in index funds.
Nice! 👌
GBM Miriam: I actually started after reading a Kiplinger magazine around 2007. I also put my money in index funds like the VFINX 500 index with Vanguard, which tracks an index like the S&P 500.
I try to save and invest over 40% of my income.
Although it is now closed to new investors you can put money into the VTSAX which is 80% comprised of the 500 largest companies in the United States.
Your story on how you grew up and got started building wealth reminds me of the song Glorious from Macklemore.
I feel glorious, glorious Got a chance to start again!
I loved it in the Crazy Rich Asians movie trailer.
I couldn't be afraid to face my reality. I had to live my truth and say to myself just stop charging and use cash.
5. What 80’s film best describes your relationship with money or the lifestyle you would like to have?
I guess I’d pick “Stand By Me” It doesn’t have much to do with money but I love the movie because it reminds me of my childhood – being in a small pack of super close friends and exploring and maybe sometimes getting into thins we shouldn’t have. And I’m still friends with all those guys today so it’s fun to reminisce about when we were younger and our knees didn’t hurt so much!
I hear you! 😉
Love that movie! It had some inspiring words. Love the 80’s. 💖
You know? Dialogue like this. 🤣
GBM Miriam: Seriously, though that film makes me tear up at the end every time. A great coming of age story about friendship.
Why we blog about finances?
I’ll let Skylar Grey answer that:
We gon’ be alright, put that on my life When I open my eyes, hope I see you shine Now I feel glorious, glorious I feel glorious, glorious
Well, we have come to the end of this interview. Hope you had fun.
Here at Greenbacks Magnet we like to have fun. And I had a blast!!!
GBM Miriam: Thank you Dave for stopping by!! I sure hope we will see each other again at the next money meets media conference as FinCon19 is coming to DC! But if not, there is always Twitter and DM’s. 😉
I bid you all farewell. Until we meet or tweet again.
I will give you one of my farewell messages that I tweet as a show of my appreciate for you hanging out with me here at Greenbacks Magnet.
Hope you had fun with me today and my Lipstick confessions. I must bid you all a good night. And go back to my regular identity. May the 80s live on forever in our hearts. Smooches💋 Greenbacks Magnet
