Afford Anything

You Can Afford Anything ... Just Not Everything. What's It Gonna Be?

“We are literally the millionaires next door”- says me, to the Washington Post

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Washington Post Financial Independence FIRE movement 3

Guess what? The Washington Post published an interview with me about the Financial Independence, Retire Early movement (the FIRE movement).

They asked if it’s possible to save half of your income. They asked about the accuracy of Suze Orman’s statement that you’ll need $5 million to retire early. (Spoiler alert: No. You don’t.) And they asked if everyone who reaches financial independence then spends their time blogging about said topic, because if that’s true, then what’s the point?

(I answered a similar question in this week’s podcast episode, as well.)

Here’s a snippet from the Washington Post interview:

Q: What appeals to you about FIRE?

When I graduated from college in 2005, I accepted a job as a newspaper reporter with a starting salary of $21,000. I worked at this newspaper until 2008, and my salary at the time I resigned was $31,000. That’s the highest income I’ve ever earned working for someone else.

I freelanced during the evenings and weekends, and my best-paying clients at the time offered 50 cents per word. This amounted to an hourly rate of $50 to $75.

It became clear to me that I could earn much more money as a freelancer than I could as a newspaper staffer, so I quit my job and dedicated my time to building a full-time income as a self-employed freelance writer.

But I knew that this path would create income volatility. As a “solopreneur,” there would be periods of feast and famine. I started aggressively saving and investing so that I could “self-insure” against the risk of needing to find another low-paying job.

Ironically, I didn’t come to FIRE because I wanted to retire. I came to FIRE because I wanted to work, and FIRE allowed me to build a safety net — through my investments — that would allow me to remain self-employed, even if I had a few rocky months.

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You can read the full interview here: Can you save half your income so you can retire early? FIRE advocates say it’s possible.

Enjoy!

 

 

 

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Why the FIRE movement is misunderstood

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Mind the Gap - Paula Pant

The FIRE movement is misunderstood. The drama of the last two weeks proves it. The question is, how can we fix this?

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Ohhh we have a new supporter!!

Last week, Suze Orman called FIRE “dumb and stupid.”

“When I was 30 I was dumb and stupid as well, okay?,” she said in an interview with Yahoo! Finance, adding that she’s “pissed off” at people pursuing early retirement.

But since then, she’s taken more time to learn about the movement — and she’s in support.

In a Facebook post titled “What I Hate — and Love — about FIRE,” Suze writes:

“Financial independence – count me in!
“Retire early – yikes, that’s where I jump off the bandwagon.

“… in my world, retirement means not working. Full stop. I was told that this was indeed the focus of FIRE, and that early was 30s or 40s, not 55. The math of that makes absolutely no sense. And I said so.

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“Two Million Dollars is Nothing. It’s Pennies,” says Suze Orman

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Want to retire early? You’ll need at least $5 million, more likely $10 million, says famous financial personality Suze Orman.

I should know. She said that to me, directly, on my podcast.

I asked Suze for her opinion about a frugal, flexible person who wants to retire early with a $2 million portfolio. She warned that retiring would be a massive mistake.

“Two million dollars is nothing,” Suze said. “It’s nothing. It’s pennies in today’s world, to tell you the truth.”

Wait, what?

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“Why I Hate the FIRE Movement,” says Suze Orman

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Suze Orman Why I Hate the FIRE Movement

A few weeks ago, I received an email from Suze Orman’s publicist, asking if I’d be interested in interviewing Suze on my podcast.

“Duh,” I replied.

Suze is a legend in the world of personal finance. She’s appeared on Oprah multiple times, published 10 mega-bestselling books, and hosted The Suze Orman Show on CNBC from 2002 to 2015. She’s one of the most famous voices in this space.

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“What I’ve Learned from Building an Eight-Figure Business” — an interview with Rand Fishkin

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Rand Fishkin on stage

I’ve been following Rand Fishkin’s career for years. He has one of the best rags-to-not-quite-riches-yet stories I’ve heard.

Rand is a college dropout who spent his early 20s spiraling into a deep debt hole. His problems began when he tried to grow a marketing company but funded it in the worst way possible. He leased office space, rented booths at conferences, hired expensive contractors — and paid for everything with a personal credit card. Yikes.

His credit card debt ballooned to $150,000. He couldn’t make the minimum payments, so he defaulted. The late fees and penalty interest rates caused his debt to swell to more than $500,000.

Anyone else might have declared bankruptcy, but Rand stayed the course. He doubled down at work. He decided to specialize in a marketing niche, search engine optimization, which set him apart from the pack.

He brought new clients into his business. He developed internal tools to use for his clients, then started selling subscription-based access to this software.

Dollar by dollar, he pulled himself out of debt. His company grew into an eight-figure business.

A few weeks ago, I interviewed Rand on my podcast about the lessons he learned from his early mistakes. Here are five takeaways from that conversation.

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You Can’t Change History From the Middle of the Bell Curve

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“If Elon Musk has asked people what they wanted, they would have said better gas mileage.

“But Elon never bothered asking. Because he knows he can’t change history from the middle of the bell curve. And he knows design by consensus, by definition, leads to average results.”

Last week I published a transcript of the speech I delivered at the World Domination Summit, in which I challenged people to be true to themselves despite the fact that others may not like it.

A few days later, WDS released the video of the speech. (I had no idea they were going to release it so soon! I thought it would take a couple months.)

It’s the most heartfelt talk I’ve ever given. It’s deeply personal, and it describes a philosophy I’ve been creating for years. I’d encourage you to watch it here:

Thanks! Leave a comment and let me know if it resonated with you. Enjoy!

— Paula

 

 

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How to Live Louder than the Sound of ‘Should’

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WDS 2018: Paula Pant from Chris Guillebeau on Vimeo.

One month ago, I made a speech at the World Domination Summit in Portland about the importance of being yourself, even if this requires setting difficult boundaries or relinquishing your people-pleasing tendencies.

If you’re a creative entrepreneur, such as an artist, writer, musician, designer, craftsman, entrepreneur, or any other type of creator … this is advice you might not have heard before.

I argue that your best business move is to stop giving a sh*t about what other people think. Even your customers.

It’s a counterintuitive philosophy, one that runs contrary to the seemingly-benign “I want to help others” mindset that’s preached in the world of online entrepreneurship. I argue that your effect on others is outside of your control, so the best thing you can do is be yourself and let the chips fall where they may.

Bending over backwards to please others is inauthentic and, ultimately, ineffective. People will be served the most when they see a confident, strong person who is true to themself.

As long as you’re acting ethically and not intentionally harming anyone, you’re doing your job. It’s not your responsibility to coddle others or act overly-diplomatic at the expense of your voice.

Here’s the speech. If you’ve ever struggled to find your inner voice, especially within your career or business, I think you’ll enjoy this.

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How Much is Enough?

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Laptop, a candle and roses on a table

The idea behind financial independence is that your passive income — typically through investments — is enough.

But how much is enough? Enough for what?

The typical reaction that many people have to this question is to define “enough” based on their current standard of living.

For example: “Right now, my spouse and I are 27 and 29, with one child, age 2, and we live in San Diego, and our expenses are $5,000 per month. That’s our definition of enough, and as soon as we reach $5k per month in passive income, we’ll be financially independent (FI).”

Hmmm. I don’t think you need to be a master logician to spot the holes in this reasoning.
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How to Stop Talking Yourself Out of Your Dreams

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How to overcome your fear and live your dreams

I once asked my friend Monica: “What would you do for a living, if you could do anything in the world?”

I expected her to pause, but she knew the answer immediately.

“I’d open my own clothing boutique,” she said.

It was a fitting response (no pun intended). There’s a positive feedback loop between talent and passion. We enjoy what we’re skilled at, and we’re skilled at what we enjoy. Monica loves clothing; every outfit she wears is a masterpiece.

Monica lives in a city of 5 million people. She could certainly find a niche for her boutique somewhere in her city. It’s an achievable dream. It requires hard work, but the formula is established: Raise funding. Rent a space. Source material. Learn bookkeeping. Advertise.

But Monica thinks it’s a pipe dream. She makes zero effort towards it.

Monica holds a ‘respectable’ office job — $40,000 a year plus benefits in a quiet suburban office park – and this fall she’ll start graduate school.

And I’m scratching my head.
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This was Every Landlord’s Nightmare …

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The excellent, the normal, and the terrible. Two weeks ago, when I visited my rental properties, I saw them all.

The excellent, the normal, and the terrible. Two weeks ago, I saw them all.

I’d like to share the harrowing story. It’s a story of triumph, resilience, and late-night burritos. A story that immersed three days of my life — and is now over, chapter closed, with nothing else needed for at least another year.

It’s the story of three rental units:

  1. One that’s excellent
  2. One that’s normal
  3. One that’s everybody’s worst nightmare

Let’s start with the horror story first.
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