Simple Inspiration Interview featuring Eat The Financial Elephant

Financial Elephant

Are you dreaming of financial independence or early retirement?  But not sure were to start or what to do.  Well you will enjoy this week’s interview with Eat The Financial Elephant.   eatelephant

Their blog is about their journey to financial independence and early retirement (by age 40). The emphasis of their blog is to show that you do not have to be extreme in any means to achieve this type of success. This husband and wife both came from average backgrounds and started out with virtually nothing, have never been extremely frugal and have earned above average professional salaries but neither have ever earned 6 figures in any year. They live fairly standard lifestyles (on the surface) that include living in a nice home, being a two-car family, working normal jobs and recently becoming parents. They have made major financial mistakes, especially in the area of investing. They believe their lives are different than most because they have dedicated much of our time and resources to seeking new and exciting adventures. They have traveled the world in pursuit of hiking, climbing, skiing and mountaineering in beautiful places, attending major music and sporting events, and learning about other cultures.

Let’s hear how they have simplify things so they can retire early but still enjoy life alone the way:

What event lead you to decide you needed to change your lifestyle?

We have known for a while that we didn’t want to work forever and live a traditional lifestyle. Our original vision was to become “Dirtbag Millionaires”. However, we had no real plan and no urgency as we had become complacent living a fairly standard busy professional lifestyle.

In fall, 2012 we had two major life events that really made us reassess our priorities and speed up the time frame. First in September, my cousin who was a great friend and inspiration to both of us died after a battle with cancer. This made us realize how fragile and potentially short life can be.

Then in October we had our daughter after 11 years of marriage and thinking kids were not a possibility for us. This made us realize that we had an opportunity that few parents will have. We could both retire while our child is young.

Most families today have 2 working parents. Virtually every family has at least one full-time “bread-winner”. Trying to balance work, parenting, marriage and other relationships and interests is very challenging. We had an opportunity to spend the time we want with our daughter without sacrificing our interests and relationship if we could free up all the time we were spending working.

We knew we had to try it.

What steps did you need to take to make sure you could do it?

At first, we simply thought it was an issue of understanding finances so we started reading everything we could about investing and retirement planning. We fired our financial advisor and took over managing our own investments. We developed a financial plan that made sense for what we wanted to do with our lives.

As we continued to read and learn, we realized we also really needed to change our thought process. We needed to redefine what retirement was to us. We needed to define what we wanted from life and figure out how to pursue this life that we want, rather than viewing retirement as some magical thing that would solve all of our problems.

What was your biggest challenge or roadblock when it came making that change?

I think the biggest challenge is learning to trust ourselves and think independently. As a society, we are trapped in this herd mentality of all thinking, acting and living essentially the same existence.

When taking an unconventional path for your life, everyone wants to tell you that you’re crazy and it is so risky. However, as we have taken the time to get a deeper understanding of the issues we face and develop plans and contingencies we realize that much our fear and anxiety are just a fear of the unknown. We’ve learned to block out these voices that are not offering constructive criticism but just reinforcing fears that are not based on facts or logic.

How will you feel once you reached your goal and are able to live the lifestyle you desire?

This is an interesting question because I feel that many people get all caught up in thinking that life will become magically better once an arbitrary goal has been achieved. We started off on this path and found that we were becoming more dissatisfied with life, even as we progressed towards our financial goals.

Our site was originally meant to document our journeys to financial independence and early retirement, learning the fastest and most efficient ways to these goals. However, we continue to grow and change. We now realize that we need to gradually transition, working less and less until we find a place where we achieve balance in our lives and we are living a lifestyle that we never want to retire from, which may or may not include working for money.

What are your current financial goals?

We are currently working toward our written goal to increase our assets and decrease our expenses to the point that we have 20-25X our expenses by May 1, 2017. However, this is a pretty arbitrary goal and one that we are constantly re-evaluating.

What tools do you currently use to manage your finances?

How’s this for simple? We have two Excel spreadsheets. One to track all of our investments. One to track our spending. We also have a one page Word document that contains our entire wealth/investment plan.

What is the biggest change to your finances that has enabled you to live your current lifestyle?

We have always just naturally lived below our means and been good savers, basically having a 50% savings rate (after tax) by living off of Mrs. EE’s salary and banking mine.

The only major changes we have made are to greatly decrease our tax bill  and investment expenses by learning to manage our own investments. We also continue to gradually become more efficient and cut wasteful spending that we find since we started tracking our expenses over the past couple of years.

Why did you start the Eat the Financial Elephant blog?

We realized that we got tremendous benefit from reading other blogs in the early retirement/financial independence community. The information and insights we gained from them was so different from the same things we heard over and over from mainstream sources and our financial adviser. We realized that we could never pay back all of those people that helped us so much.

We started our blog to share our successes as well as our failures/mistakes to help others. We looked at it as a way of paying forward all that we could never possibly pay back to those that helped us.

The blog has had the unintended consequence of being very motivational to us to continue to learn and develop our plans more completely and we’ve unintentionally created a support system of people we otherwise would have never met that follow along and advise and encourage us. It is a pretty awesome thing.

What type of feedback have you received since it started?

For about 6 months we were just learning how to drive some traffic our way and we had little consistent traffic or feedback and almost quit on several occasions.

Since the beginning of 2015 we have had a few opportunities to get some exposure and have been steadily growing and feedback has been overwhelmingly positive.

What three things do recommend in order to simplify your finances?

1. Pay yourself first through automated withdrawal from your paycheck. We always put one income directly towards getting out of debt and then transitioned to saving/investing money in this way once we were debt free. This allows you to build wealth quickly without ever missing the money.

2. Use your 401(k) (or 403(b) or whatever version you have available through your job) to combine automated savings, free money if getting a match, tax benefits up front allowing you to save more money, and tax-free growth as long as the money stays invested. All these benefits can be had with one simple decision.

3. Use a cash-back rewards credit card (unless you are horrible with credit and spending). It allows you to make a little money in a completely passive way doing something you would already do, gives you consumer protection and makes tracking your spending very simple.

What are your best savings tips?

1.) We’ve always started with a big picture view with savings. Early on we realized that the biggest expenditures for almost all working Americans are housing, transportation and food. For those that go to college, this is also a massive expense. Optimize in these areas to get some BIG wins before trying to fine-tune everything at once.

2.) Learn to manage your own investments. The finance industry has great incentive to have you focus on returns while ignoring taxes and expenses. The only things you can actually control are taxes and expenses and managing your own investments gives you an opportunity to save massive amounts of money in these areas (with no loss or even improved returns on investments).

3.) Track your spending. We never did this until starting our early retirement planning about two years ago. Even with a high (50%) savings rate, we were amazed at the wasteful spending in our budget that we never even realized.

What percentage of your income are you saving?

For 2015 we should be at about 70-75%. Traditionally, it has been 50% give or take (see questions #7&10)

What book, blog, or podcast would you suggest to someone who is looking to simplify or improve their finances?

I would recommend “The Stock Series” at jlcollinsnh.com where he lays out his “Simple Path” for wealth. It is great for anyone from beginner to seasoned investors and emphasizes simplicity in building wealth.

What advice or thoughts you would like to share with others who are looking to simplify?

Financially, focus on the very big picture items. Buy a house that is affordable and pay close attention to location in relation to work, family and any other things that you do frequently. Find the most economic form of transportation that makes sense for you. By doing these two things you will be able to develop a high savings rate by controlling housing and transportation costs. Then immediately take that savings and automatically start pouring it into automated transactions to your investments, preferably in tax advantaged retirement accounts, which will start saving you on taxes. Now you will automatically be building wealth every month without ever thinking about it.

In life in general, I think the most important thing is to develop an attitude of gratitude. Many people, including at times ourselves, spend a lot of their lives focusing on what we don’t have and feel that we always need to have and do more. The more we learn to just slow down and appreciate the things we already have in life, the happier and more satisfied we become.

Thanks for sharing your story with my readers.

Please check out Eat The Financial Elephant to learn how you too can retire early without having a large salary.

You can also follow their journey on twitter @elephant_eater.

To read previous interviews in the series click below

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If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you.  Enjoy the rest of your week. Til next time, take one step at a time to simplify.

Simple Inspiration Interview featuring Sarah from Frugal Millionaire

Frugal Millionaire

This week’s Simple Inspiration Interview, I have the pleasure to interview Sarah from The Frugal Millionaire.

On The Frugal Millionaire blog, Sarah blogs about her journey towards financial freedom and early retirement.

If you’re looking for tips on saving money, reducing your stress when it comes to money or hoping to become self-employed yourself, I recommend checking out her blog!

Let’s hear how Sarah has been able to simplify her finances:

What event lead you to seek financial freedom?

The biggest change in our finances came when we found out we were expecting our first baby. When that happened, we transitioned from living off of two incomes to living off of one income so I could stay home with our daughter. Fast forward three years (and add another baby!), and we’re now working at being completely debt free in order to give ourselves more options with our careers and lives.

What does financial freedom mean to you?

Financial freedom, to me, is not having to work and being able to support our family via passive income, savings, rental properties, etc. More than likely, both my husband and I will continue to work even after we achieve financial freedom because we both work for ourselves and love what we do.

How do you plan to achieve financial freedom?

We’re hoping to purchase our first rental property within the next two years. Ideally, rental properties will become our main form of income. We also try our hardest to save all of the income I make from freelancing and live off of my husband’s income.

What area of your financial life did you need to improve so you could seek financial freedom?

Definitely cutting out unnecessary expenses was a huge one for us. My husband and I used to go to Starbucks daily, for example. When we started our journey towards financial freedom, we cut cable, we reduced how often we ate out, we viewed Starbucks as a biweekly “treat” and not a necessity, we reduced our utility usage, etc.

What did you do first to begin the journey to financial freedom?

Started living off of one income while still taking in two! That was the biggest transformation we made and it has allowed us to save a good amount of money. Living below your means is vital to financial freedom.

What was your biggest challenge or roadblock to achieve your goal?

We have two little girls and it’s challenging not to give them everything they want. We make choices daily to save money and always have our end goal in mind.

How did you overcome this challenge or roadblock?

Focused on the end goal always! My husband and I are both extremely open with each other about our finances and we’re on the same page. We talk about finances daily, usually multiple times per day, whether we’re discussing upcoming bills, savings goals or long-term goals.

How will financial independence change your life?

We can work on projects we both believe in, we can spend more time with our kids and each other, we can travel and we can reduce our stresses caused from living such a hectic life.

How long will it take you to reach your goal of financial independence?

Since we’re both self-employed, it’s really tough to say. We hope to be financially independent within 15 years, though. That will put us both in our 40s.

Have you automated your personal finances to help you achieve your goal?

We automate a few mutual fund accounts, but everything else is done on a monthly basis since we never know exactly how much income we’ll be taking in.

What have you automated?

Our mutual fund accounts with USAA.

What advice or tips would you give to others who want to achieve financial freedom?

Start today!! I would advise to first pay off all consumer debt followed by building a nest egg. Then, work towards living off of one income or living way below your means. Save everything you can and make conscious decisions every day in regards to your spending. Consumer items are tempting, but they won’t bring you any closer to your long-term goal of being financially independent.

What book, blog, or podcast would you suggest to someone who is looking to simplify or improve their finances so they could achieve financial freedom?

When I first started on my journey, I read “The Millionaire Next Door” and “Rich Dad, Poor Dad.” They both were just what I needed to motivate me towards viewing my money as a tool to work towards financial freedom.

Do you have an emergency fund established, if so how did you determine the amount needed to fund it?

Of course!! Dave Ramsey recommends $1,000 in an emergency fund. We have a few different savings accounts – one is for emergencies and it has roughly $2,000 in it, one is for taxes since my husband and I are both self-employed, and one is for a down payment on our next home.

What app or tool helped you the most when it came to simplifying?

We use Mint.com to track our expenses.

What percentage of your income are saving?

Between 25-50% depending on our income for the month.

What’s your best savings tip?

Live below your means or take on extra work / side jobs that are strictly for savings. The only way to save is to live on less than you make, plain and simple!

Any other thoughts you would like to share with others who are looking to simplify?

You don’t have to simplify in big ways like downsizing your home or trading in your family SUV for a more economical vehicle (though, of course, those things are great!). You can simplify by starting small. I hang my clothes instead of use the dryer, we cook from scratch as often as possible and my kids do not have many toys. Living a simpler lifestyle starts with make small changes each day!

Thanks Sarah for sharing your story with my readers. As I mentioned earlier I am sure many can relate to your story.   You provided some great advice to help those who want to simplify and live a simpler life.

If you would like to learn more about Sarah, check out her blog Frugal Millionaire or follow her on twitter @frugalmillionaire1.

To read previous interviews in the series click below

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If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you.  Enjoy the rest of your week. Til next time, take one step at a time to simplify.

Simple Inspiration Interview featuring Shimeka from Design the Life You Want

Shimeka

Do you feel stuck in a job you don’t like or feel you can not get ahead in life?  Well this week’s Simple Inspiration Interview may just help you change those feelings.  This week I have the pleasure of interviewing Shimeka from Design the Life You Want.  We all have a vision of the life we want to have but many times that vision does not always become reality.

Design The Life You Want is about reclaiming your power as a creator. You have the power to produce the results in your life that you want. Design The Life You Want offers are bi-weekly podcast episodes which interview entrepreneurs and experts who address the common challenges that people face when they want to transition from employee to entrepreneur.

Let’s hear how Shimeka has simplified her finances as well as how she has designed the life she wanted:

What event lead you to decide you were not living the life you envisioned?

I was introduced to a network marketing company in my mid-twenties and realized that being an employee was never going to get me where I wanted to be in life.

How long did it take you to realize that?

It probably took a few years to figure it out. I graduated from college thinking that I was going to climb the corporate ladder. I ended up taking a job in a call center, desperate to get a job before my student loan payments kicked in. I later went to work for a “a good company” in the area and still had hopes building some sort of career. However, the negative interactions from the customer service interactions began to take its toll. I HATED my job and the area where I live didn’t really offer corporate career opportunities. I live in the call center capital of the world, or at least it feels like it. I realized that I had been living a life that required me to put my destiny in someone else’s hands.

What steps did you need to take to change it?

I just quit one day with no plan. I didn’t take the steps that I should have. I had the discretionary income to pay off or pay down my debts, but I was an “in the box” thinker at the time. I should have created a financial plan to address the debt and minimize the risk associated with quitting my job.

What was your biggest challenge or roadblock when it came making that change?

My biggest roadblock was me. I decided to buy into this pipe dream of network marketing success, but did not have the action to produce successful results. I was paralyzed with fear and refused to step outside of my comfort zone. As a result, I spent my 401k, maxed out my credit cards and messed up my credit. I do not regret leaving the job, I just regret the poor financial decisions that I made afterwards.

How did you feel once you made the change?

I felt liberated, but I was delusional at the same time. I kept this charade up for a year before I decided to look for another job. It was one of the most humbling experiences of my life.

Why did you start Design The Life You Want?

I realized that there are a lot of people who want to quit their jobs in order to pursue their dreams. When I asked what was holding them back, there were a few common themes, including finances. I wanted to create a platform to help people overcome those challenges and empower people to live by design and not by default.

What type of feedback have you received since it started?

The feedback has been very positive. I am pleasantly surprised and how receptive my audience has been to me. I started a podcast because I wanted my personality to show and I had not figured out a way to do that with my writing.

What are your current financial goals?

My primary financial goal is to improve my money management and pay off my credit cards. Now, that I am in a better place financially, I find it easier to lose track of what I spend. My biggest variable expense is food and that will be the first project from a money management stand point. I will use the savings to apply to my credit card payments. I other financial goal is to increase my income. I have been using my discretionary income to pay for the cost associated with launching my business. By increasing my income, I will be able to use the business revenue to cover business expenses. This will free up even more discretionary income to pay off debts.

What tools do you currently use to manage your finances?

Online banking is my favorite tool. It’s quick, easy and cost effective. At the same time, it can be more of a challenge to keep up with expenses. I have always balanced my accounts mentally, even when I wrote checks. However, with some items being drafted out of my account, it is hard to keep track of those types of expenses.
What one thing have you done to enable you to live your current lifestyle?
I have never tried to keep up with the Jones’. I get this from my parents, who live very frugal lives. I will also be the first to admit that I do splurge on technology. I treat myself to the things that I really want and that is it. We still have a big square 32inch television in our living room. It would be nice to have a big flat screen tv, but we really don’t need it. I rarely spend money on clothes, shoes or home decor.

What three things do recommend in order to simplify your finances?

– Use online banking. You can manage your accounts, set up notifications and pay your bills.
– Opt for electronic bill notification. This cuts down on the amount of paper mail that you receive.
– Make some of the money that you are saving harder to access. Instead of using your regular bank, find another one located across town. This makes it accessing the money more of a hassle, unless you really need it. It may not be simple from an implementation standpoint, but it is a simple way to leave the money alone once you put it there.

What’s your best savings tip?

I like to save large sums of money versus small systematic sums of money. For example, we save the majority of our income tax refunds every year. The reason why I like this approach is because it is extra money. You don’t need it to pay for any necessities. In my early twenties, I would get a performance bonus every year. I would get few thousand dollars in extra cash and blow it. I don’t remember much of anything I spent that money on, except when I bought a Yorkie. I promised myself that I would never let large sums of money slip through my hands like that ever again. I have been saving my bonus money for eventual maternity leave (whenever I do have kids), because I want the option to stay home even after my paid leave is over.

What book, blog, or podcast would you suggest to someone who is looking to simplify or improve their finances?

I am a big fan of Gen Y Finance guy. I was really impressed with his approach to reaching his financial goals and even interviewed him on my podcast. He offers a detailed look into his personal finances and tells great stories at the same time.

What advice or thoughts you would like to share with others who are looking to change their life?

You have the power to change your life, right from where you are. The first step is to believe that you can and the next step is to start working on an idea. Start listening to podcasts related to your area of interest. You will begin to learn strategies that you can implement in your own life.

Thanks Shimeka for sharing your story with my readers. As I mentioned earlier I am sure many can relate to your story.   You provided some great advice to help those who want to simplify.

If you would like to learn more about Shimeka, check out her blog and podcast which is Design The Life You Want.  She also offers one on one coaching for those who want to break free from the employee mindset and take their businesses to the next level.  She is also working on her first book so keep an eye out for it. You can also follow them on twitter @shimekism.

To read previous interviews in the series click below

[button_2 color=”green” align=”center” href=”http://simplefinanciallifestyle.com/category/interview-series”]READ MORE SIMPLE INSPIRATION INTERVIEWS[/button_2]
If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you.  Enjoy the rest of your week. Til next time, take one step at a time to simplify.

 

If You Don’t Do This You Will Probably Not Gain Control of Your Personal Finances

Financial Assessment

Have you ever wondered how you can gain control of your finances?

Have you ever wondered whether or not you will ever find the time to manage your finances?

I have seen many individuals who make a good income and struggle with managing their finances.

It’s unfortunate when a few small changes can help them save time and get their finances under control.

I know you want to have control of your finances so you can have a financial peace of mind as quickly as possible.

And that’s why I am going to show you what you must do first to begin gaining control of your finances so you can have the financial peace of mind you desire.

In fact it’s the same place everyone who wants to achieve financial peace must begin.

This one simple thing is:

Understand where you currently stand financially

The fastest and easiest place to start helping you get your financials under control is to know where you currently stand financially.  To gain control of your finances you need to only look at your current financial situation. It will help you know what changes need to be made.

The best way to do this is to perform a financial assessment.  It’s the first step in your journey to simplify and to have an understanding of your current finances. Doing a financial assessment answers the questions you need to ask in order to simplify your finances.

To begin your financial assessment take a few minutes to think about what your current financial situation looks and then write it down. Your entire financial picture can be seen on your monthly statements. To help you have better picture of what your current finances looks like gather all of your bank statements, debt statements (credit cards, mortgage, student loans, or other debt),and investment accounts (retirement and non-retirement).

Also gathering the statement will show you how many accounts you have and what is paperless and what is not paperless.

Now that you have gathered your statements write down your thoughts on what your finances look like. Many times we believe our finances are better than or worse than we thought but the only way to determine this is to actually take a look at them instead of just guessing. I have assumed things were better than they were but once I took a look at the situation it was worse than I thought so the best way to do this is to look for yourself.

Additionally while you have all of your statements in front of you why not construction a personal financial to determine your current net worth. Is it positive or negative? There you go. You have seen just one of the 9 steps to simplify your finances so you can begin to have the financial peace of mind you desire.

So the secret is to know where you stand first.

I have created a cheat sheet and checklist to help you begin to simplify your finances within 30 days.

To gain access to the checklist and cheat sheet click below to get your hands on this which can help you get control of your finances within the next month.

Til next time, remember to take one step at a time to simplify.