187. Get Rich in 3 Steps

The Simple Not Sexy Way

I remember when I started my first full time job, I was flown across the country to Connecticut for training and while I was there, I received a text from my one bank that let me know I had over drafted.

Luckily, I had been paid a little for the start of my job and my mistake was that I procrastinated depositing my first check. At least that’s how I remember it. Looking back, I can see I was unaware of how much money I needed for my move to San Francisco. Ignorance was bliss and I got pretty lucky.

However, I’m grateful the over draft happened when it did because it made me realize I wasn’t paying attention to the ins and outs of my money. I didn’t have much before that but had always seemed to stay afloat. I didn’t think past survival.

I wouldn’t say I was a lot more responsible after that, but I at least set up direct deposit. About six months later, after continuous pestering from my mom, I set up my 401k too. After that, I didn’t have any clue as to what I should do with the money I was making. I tried to figure it out and along the way made some bad financial decisions. At the time the trendy thing was marijuana stocks, and I learned the hard way that trendy doesn’t typically line up with reliable. I did save money which was good, but I had no clue how to invest it so I let is sit and do nothing for years.

One reason I was attracted to the Financial Independence Retire Early (FI/RE) movement is that the information on how to grow your wealth is straightforward. Yes, you can complicate it by nerding out on the details, but knowing three basic steps can help many people turn their finances around. I started to really believe this over the last few years as Sammie and I shared what we knew on our podcast and with our friends. We watched so many people go from living paycheck to paycheck to living in abundance.

Sammie and I was inspired to cover these basic steps again this week in our latest episode. We start with saving your money, more than you spend and in an ideal world, more than 10% of what you make. We discuss why index funds are a popular choice for investing. We also have an episode from a couple years ago where we deep dive into index funds if you want to learn more.

Different seasons of your life require different steps. However, with personal finance, knowledge is power! Simplifying that information helped me a lot on my journey. Not only in the past, but I find myself revisiting this as I’m adjusting to living in a higher cost of living city while growing my business.

Is there any piece of financial knowledge that has been key for you? Is there anything you’d like us to explore more? Leave us a comment!

Show Notes:

• How To Thrive on Sabbatical - Michelle’s live online Sabbatical Course starting in September!

• The Shockingly Simple Math Behind Early Retirement by Mr Money

• What Are Index Funds, and How Do They Work? from Investopedia

• FI Number and Withdrawal Rates | Community Q&A by ChooseFI