How much better off would we be if we had financial education sometime in our 13 years of mandatory formal education?
No one teaches us about financial literacy.
We need to take it upon ourselves to learn it.
Once we finally learn about it, we have already created good and bad habits.
After diving deep into the personal finance world, you eventually hear about Financial Independence (FI) or Financial Independence Retire Early (FIRE).
Financial Independence (FI) seems unrealistic and far-fetched for the average person, especially if you do not make $100,000+.
However, anyone of any income level can pursue it.
Just like financial literacy, everyone has the right to pursue Financial Independence.
We are a regular family who does not make a 6 figure income.
We have a modest income of $80,000 and we are on the journey to FI.
What is Financial Independence (FI)?
Financial Independence (FI) is building up a significant nest egg so that you can eventually quit your job and retire early.
Once you quit your job, you live off of the nest egg you have built by withdrawing a small amount to live off each year, and you can live off of passive income (if you have any).
The meaning of Financial Independence (FI) is not black and white, and it has many variations.
Each individual/family determines their own financial goals and lifestyle goals.
The essential key to achieving Financial Independence is paying attention to how much you make, how much you spend, and how much you save.
Who are we?
We are a military, enlisted family pursuing Financial Independence since 2018.
Before being a stay-at-home mom, I was a labor and delivery nurse for seven years.
We are a single-income family of 4 (soon to be 5) living in Japan.
We both grew up in a low-middle-class to a middle-class family.
Our parents did the best they could to meet our basic needs (food, home, and clothing).
However, we felt poor.
My parents immigrated from the Philippines to the US with elementary and high school education.
My brother and I, first-generation Filipino Americans, were their glimpses of hope.
At 22yo, I graduated college with my BSN (Bachelors of Science in Nursing) with $40k-45k of student loans.
I joined the Air Force as a nurse, and in exchange for three years of my commitment, they paid off $28,800 of my student loans.
With my first real job out of college, I made $50,000-$55,000.
I made more than my mom or dad alone.
It was the first time I no longer felt poor.
While in the military, I paid off the rest of my student loans, invested in the Roth IRA, lived with a roommate, and had no car or credit card debt.
In hindsight, I didn’t spend as much as I could.
But I also wasn’t saving as much either.
In 2013, I got out of the military and became a nurse in California, making $115,000-$120,000.
Before making this income, my brother and sister-in-law introduced me to Dave Ramsey.
I was intrigued by the movement, and my then-boyfriend (now husband) and I followed his plan for 2-3 years.
One day, my fiance told me he had orders to England. That meant I would have to leave my dream job in our dream location and say goodbye to my damn good salary.
By this time, my income increased to $130,000-$135,000 by switching to another company.
In 2016, we got married and started our life together in England. I hustled for a job and made only ⅓ of my salary.
We lived off my husband’s income and used my salary for investments and traveling. Our dual income was $100,000.
In 2017, we started our family and decided to be a single-income family. Our income went down to $60,000-$65,000.
By this time, we knew we were doing well financially.
We wanted to do better but didn’t know-how.
We didn’t have a spending problem, but we had an income problem.
In 2018, I stumbled upon Financial Independence (FI) and came across the Choose FI podcasts.
It forever changed our life.
We learned how to be more intentional with our money and started building a life we love now.
Where are we now?
After only three years of being in the Financial Independence (FI) world, a big move from England to Japan, our net worth is $400,000, all in investment accounts.
Our income in Japan is roughly $80,000 on a single income, two kids with one more on the way, no debt, no mortgage, and one bachelor’s degree. We have had no inheritance or financial help from family members.
We are not close to financial independence, but we are sure climbing up the ladder towards it.
Related Post: I’m on My Mini-Retirement & I’m A Stay-At-Home Mom
What does FI (Financial Independence) mean to us?
When you first learn about FI, your initial knee-jerk reaction is to cut down your expenses (and your life) to nothing.
You think of ways to increase your income.
And then you come up with a plan so that you can retire in 10-15 years.
However, the longer we have been on the FI journey, we have formed our own meaning of FI.
We decided to be happy and enjoy life now with our young children while saving for our future.
For us, FI means:
- Building generational wealth.
- Going on family vacations 3-4x a year.
- Saving for retirement and our kids’ college.
- Buying a suitable home with an affordable mortgage in our ideal place.
- Creating experiences with our kids and seeing extended family members more.
- Using our military pension to supplement our income so that both parents do not need to work.
It does not mean retiring in our 40s or 50s.
What are our goals?
Short term goals:
- Save and invest enough money to increase our options after military retirement
- Spend more time with extended family
- Increase our savings rate
Medium term goals:
- Attend graduate school & transition into civilian life with little to no debt
- Buy a house with a hefty downpayment in our ideal location
- Increase our income by 1.5-2x
Long term goals:
- Work towards a career that aligns with our passions
- Find a job with flexible hours and provides purposeful and meaningful work (salary is no longer the driving force of whether or not to take the job)
How are we doing it?
- Budget fiercely and pay ourselves first: Investments and savings are automated, and then we live off whatever is leftover.
- Drastically decrease our materialistic consumption: We don’t shop sales and try to get things used first. We actively avoid malls/outlets.
- Do many low costs/free activities as a family: We utilize many parks or free activities our community offers. We avoid theme parks or places with admission fees.
- Do weird challenges to save money: We do multiple no-spend weekends. I am also challenging myself to buy only 30 new clothes/shoes for this year.
- Name what matters. We have a list of the top 10 things we value as a family, and we put our energy, time, and money towards those things.
Related Post: Ultimate Checklist: How to Live Frugally on One Income
Will we RE (Retire Early)?
Most likely not.
We are not interested in retiring early but rather living an intentional life right now.
We want to build generational wealth, so our overall goals are much bigger than retiring early.
Pursuing Financial Independence takes a lot of discipline and being intentional with the money you have.
Imagine taking your family on memorable vacations without worrying about how you will pay for them.
Imagine knowing that you have your retirement set and have money left over for your kids.
Imagine making money decisions according to your family values.
It would be easy to say no to some things and easily say yes to other things.
We aren’t a unique family with access to lots of money, nor do we make a lot of money.
However, I do realize our privilege in having a modest income and the ability to invest.
We are an ordinary family trying to give our kids a better future.
And we are damn good about being intentional with our money.
Only you can decide where your money goes and what your future looks like.
Make that decision today and see how you can start your journey to Financial Independence.
You can do it!
I believe it!