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My journey to achieving F.I.R.E (Financial Independence Retire Early) has not been paved with rainbows and sunshine. In terms of the Choose FI Reluctant Frugalist vs. Aspiring Minimalist, I started on the Reluctant Frugalist end of the spectrum. Let’s say I made some financial mistakes; AKA did lots of dumb shit. All of these decisions happened in college, but luckily, I was able to see the error in my ways and thankfully corrected my behavior. It just took me a bit longer than it should have to figure it out. Many positives set me up well from a financial perspective, but I just had some poor money habits that I had to work through to start walking the path to FIRE. I still have urges to buy stupid stuff now and then, but I’m much better than I used to be.
Let’s start from the beginning. I had a pretty normal middle-class upbringing. I went to church, always had good grades, played sports, participated in extracurricular activities and was accepted into a Big Ten college. Thanks to an academic scholarship and help from my parents, I did not have to take out student loans to attend college, so I started off on the right foot. The summer after high school, before I started college, I got a job at a nearby fiberglass manufacturing plant paying $12 an hour. I recruited some of my friends who were also hired so I would have someone to carpool with. The work was difficult, if you’ve ever worked in a fiberglass plant you know what I’m talking about. It’s not climate controlled so during the summer it was probably 90 degrees Fahrenheit, and on top of that I would wear long sleeves as fiberglass is very itchy, there were plenty of weird smells, and you had to do the most boring repetitive tasks over and over again for 12 hours. Two of my friends only lasted a week. This wasn’t my first job, that was scooping ice cream at a local ice cream parlor, and although this job paid more, it was a rough transition from cushy high school life. However, I made it through the entire summer, saved up between $3,000-$4,000 of spending money for my freshman year of college and learned some valuable life lessons. My last day there that summer my boss said to my friend and I “anytime you think about skipping class, just remember this place” yes sir, message received would not be skipping class anytime soon. I still remember the feeling I had walking out of there only last day, it felt like total and complete freedom, very similar to how it felt leaving my last job just a few weeks ago.
So college starts, and initially I am pretty frugal with my money. I worked hard the entire summer packing fiberglass and working until 2am in the morning, no way was I going to blow this money on stupid stuff. But, as you can probably guess my discipline waned over time. Not just on average college expenditures like food and beer oh no my freshman year I had a different spending problem, nutritional supplements. This sounds so dumb typing it now, but here goes. Throughout high school and into my freshman year of college I was extremely into bodybuilding. Its something I’ve enjoyed since the 8th grade and throughout the entirety of my adult life with some years being more dedicated than others but I digress. There is nothing wrong with bodybuilding at all, I think everyone should follow an exercise program, its one of the cornerstone habits I’ve kept to make me who I am today. But, during my freshman year I developed a terrible habit of buying nutritional supplements. In high school when I was living with my parents there was no way my mom would allow this, she thought they were dangerous, unregulated and would not let me take anything beyond basic protein powder. So college rolls around, and I am a free man, parents aren’t around, don’t have to listen to them, and I have my own money I can treat myself to whatever I want. So I buy some supplements- protein, creatine, pre-workout, post-workout. Then the habit continued to get worse, I would come home from class and research sports supplements for hours, always looking for something to give me an edge and help me grow bigger muscles and get stronger. Now besides the fact that this was stupid and I should have been focused on the big 3- sleep, diet and the actual exercising part it was also bad for my wallet. I would estimate that I wasted somewhere close to $1000 on sports nutritional supplements during my freshman year of college. So, not really off to a good start with saving and investing, to say the least. But, before it got better, it continued to get worse.
My remaining time in college lets just say was not the best time in my life financially. First I went to zero and then I started going into the red. My sophomore year, right at the end of the spring semester before I moved home and worked to earn money for the next year. I went to a Detroit Tigers game for a fraternity event and knew I didn’t have very much money left but didn’t know exactly how much I had, but I found out very quickly. I tried to buy a $9 hotdog from one of the vending counters, and my debit card was declined. Haha talk about embarrassing, have your debit card declined in front of your girlfriend and all of your friends because you can’t afford a hotdog. My girlfriend and I then proceeded to get into an argument because she wouldn’t buy me a hotdog and I had to settle for peanuts instead, smh.
Fast forward to my junior year of college, I live in my fraternity house with all my friends. Now there were so many positives for me in joining a fraternity the lifelong friends, the parties, the social circle, and the competitive environment. My grades actually improved when I joined a fraternity because most of the guys were business majors, so you had people to study with and compete against on tests. However, from a financial perspective joining a fraternity was less than ideal. I spent more money on food, alcohol, keeping up with the trends to buy the coolest new clothes, but my biggest mistake was getting a new TV. Junior year I moved into the fraternity house with a 32″ box TV. Now, this TV was newer and had decent picture quality, but it was still a box TV, not a sleek flat screen like everyone else seemed to have and it was 720p vs 1080p that just simply wouldn’t do. But, I couldn’t stop myself, I envied everyone else’s TVs, playing Call of Duty on their flat screens was way better than my tiny POS. So I decided I had to have one. I found the one I wanted a 42″ flat screen at Best Buy with good reviews. There was just one problem, I didn’t have any money. The TV was $800, and I didn’t even have that much in my account, but I still had to have it. I had a credit card but had always paid it off in full every month, never had I let a balance sit on it and accrue interest, never. I knew better than that, my parents had taught me better than that. But, I had to have that TV, I had to fit in, I just had a burning desire to get a sick new TV, and it wouldn’t go away. So what did I do, headed over to Best Buy and bought that new TV on credit. My plan was simple, pay the minimum each month until I got a summer job or internship and then pay it all off. The only problem with that was the internship I got that summer was back in my hometown, so I had to move back in with my parents. If my dad found out about the TV, I think he would have killed me for making such a stupid financial mistake. So, my mom taking pity on me decided she would help me hide the TV from my father at one of her friend’s houses. So the entire summer I made enough to pay off the TV and picked it up from my mom’s friends house on the way back up to school for my senior year. My dad eventually found out about the TV and all we could do was laugh.
After, the TV incident my last year of school I did things somewhat similar. I had blown through all of my savings on food, booze or clothes, but it was my last year of college, and I had a job lined up. There was no reason I shouldn’t enjoy myself I thought. So I had racked up probably $1500 of credit card debt just to continue drinking and partying with my friends. Luckily I did have a good job lined up, but I had to pay off the credit card debt as well as start paying for a $15,000 car loan.
My first few years in the real world had some ups and downs financially, but I started getting on the right track. Let’s start with the positive first. One of the first things I did coming out of school was to read a book recommended to me by my friend and roommate Michael. It was called “I Will Teach You to be Rich” by Ramit Sethi. I would recommend this book as the first starting place for someone to get their personal finances in order. It inspired me to automate my finances monthly with a portion going to a high yield online savings account for an emergency fund and also a small portion to go to investments for long term growth. The book also does an excellent job showing the average costs of significant life events that many people will experience in their lives- buying a car, purchasing a home, average wedding costs, etc. This really opened my eyes to the real importance of saving for the future, but I still had a long way to go and frivolously wasted money on useless things in the here and now.
My journey continues in Part II here.
Key Takeaways
1. Environment is everything. If you’re around people that care about having large flat-screen TVs and expensive clothes then your behavior will reflect that. Especially if you already have a natural tendency for purchasing fancy things.
2. Little purchases add up
Resources
- Choose FI Reluctant Frugalist vs Aspiring Minimalist
- Michael Wings It
- “I Will Teach You to be Rich” by Ramit Sethi
- All About Van Life with Casey Hogan of Towing Wild Oats | NOF #85 - October 6, 2021
- Traveler vs Digital Nomad, Freedom and Balancing Work While Traveling with Rax Suen of Nomads Unveiled | NOF #84 - October 4, 2021
- Real-Estate Investing, Turnkey Rentals and How to Stop Trading Your Time for Money with Eric Martel of Martel Turnkey | NOF #83 - October 3, 2021
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