Category: FIRE

“What’s your FI number? What’s your FI date?”

People often talk about financial independence like it’s a fixed, static point. When your portfolio reaches $X value, or your monthly passive income is $Y per month, you’re FI.

“When did you reach FI?,” people will ask, as though it’s a one-way door with a distinct date, comparable to graduating from high school or college.

Today’s podcast guest, J.D. Roth, offers a fresh perspective: FI isn’t a fixed point. It’s a continuum, a spectrum.

He says there are seven stages along the road to financial independence, which include:

1: Dependence: This is what we experience when we’re five years old: total reliance on someone else.

This is also what we experience as adults if we depend on our credit cards for basics like groceries and utilities, and we can’t pay the balance in full at the end of the month.

2: Solvency: You can make your minimum payments, and you’re not adding new credit card debt to your monthly balance.

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Jillian Johnsrud grew up at the poverty line. Her mother had two children by age 19, and Jillian was raised in a town of 700 people, living in a home that struggled to afford the basics.

She married her husband when she herself was 19 years old. During their first year of marriage, they lived in a camper and earned a combined income of $12,000.

Her husband joined the military after graduating from college. They relocated to Washington D.C., where they earned a combined $60,000 per year. They saved half of their income and used their savings to wipe out $55,000 of debt.

At 22 years old, Jillian and her husband adopted a son. Two years later, at age 24, the couple had accumulated their first $100,000. The following year, they gave birth to a second child.
Jillian and her husband continued saving half of their income. Eventually, they bought a house in cash, invested in two rental properties, and built a portfolio of index funds.

By age 32, Jillian and her husband achieved financial independence. And they built this on a modest five-figure income.

How did Jillian and her husband live on $12,000 per year? How did they save their first $100,000 by age 24? What sacrifices did they make? And how did reaching financial independence change their relationship with money? Find out in this raw, emotional interview.

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Can you imagine living on 44 cents a day?

Kristy Shen doesn’t need to imagine it. She lived it.

Kristy grew up in rural China, where 85 percent of the population lived in abject poverty.

When she was eight, her family emigrated to Canada. In Kristy’s eyes, her family’s newfound ability to buy a can of Coca-Cola meant that they had “made it.” Kristy loved her Coke can so much that she turned it into a toothbrush holder.

Years later, Kristy met Bryce Leung at university, where they were classroom lab partners. They married, settled in Toronto and started saving for a downpayment on a house.

When their down payment savings hit $500,000, they started to question the wisdom of dumping their money into an expensive personal residence.

Fueled by curiosity, they stumbled down the financial independence rabbit hole. After countless hours of research and number-crunching, they ditched their plan to buy a house and invested their $500,000 into the stock and bond market. Around seven years later, their net worth reached $1 million.

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Michael Robinson and his wife, Ellen, achieved financial independence at age 33. They ‘retired’ (they still enjoy working) three years later at age 36 on two five-figure incomes. Today, Michael and Ellen are raising their two children to be bilingual by slow traveling throughout Latin America.

Michael and Ellen blog about their FIRE adventures at uncommondream.com. They believe that “the Uncommon Dream is the dream pursued – the dream met with planning, action, and sacrifice. With just a dream and those three tools, you can accomplish almost anything.”

Today, Michael joins us on the show to talk about the seven ways that he and Ellen escaped the rat race and achieved FI at 33.

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Earlier this year, Cody and Justin from The FI Show interviewed me and asked some excellent questions about my journey to financial independence, entrepreneurship and passion, and minding the gap between your income and expenses.

We talk about the importance of side hustling and how to create a well-paying job from your skills.

We touch on real estate and why I chose this strategy to reach FI.

We also discuss the bone I have to pick with the financial independence movement.

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It’s September! If you’ve been listening to the show for the past few months, then you know that I’m on what I’ve dubbed my September Sabbatical, in which I’m traveling the globe and taking a break from podcast production.

In light of that, we’re digging through the archives and airing some of my favorite interviews on the show, in between airing interviews I’ve done on other podcasts.

Welcome to another episode from our archives! This one was recorded in March 2018, and Dr. Wade Pfau had a ton of insight into the four percent rule that so many of us are concerned with.

First, here’s a brief history of how the four percent rule came to be.

In 1994, William Bengen decided to look at 30-year timespans throughout U.S. History, beginning with the year 1926.

He worked under the assumption that a retiree held 50 percent stocks (in the form of S&P 500 Index), and 50 percent bonds (intermediate-term government bonds).

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We are really digging into the archives with today’s episode. This originally aired back in 2016!

Besides being another fun and fascinating interview, this is one of our most popular episodes. Which isn’t surprising, given the topic we’re exploring. 🙂

Financial independence means many things to many different people, which might be why we find it challenging to settle on a definition that everyone can agree on.

Regardless of what your personal definition is, Joshua Sheats, a financial planner and host of the well-known Radical Personal Finance podcast, says that financial independence can be separated into seven stages.

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