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Mr. SmartFI, of the not coincidentally named site The Smart FI, didn’t start pursuing FI (financial independence) because he was looking to retire early (the RE part of FIRE – financial independence retire early). It wasn’t cool or trendy back in 2006 to stop eating out, skip vacations to save money or to drive crappy cars. And yet, these were all things he and his wife did.
Well, if necessity is the mother of invention than desperation is the mother of motivation. After their first child, Mrs. Smart FI put her career as a nurse on hold to stay home. With another child soon to join the family, they felt the strain of trying to survive on one income living in the suburbs of Seattle.
As they trimmed expenses and started to tighten their belts, they were able to make ends meet. Not only that, but they began to thrive financially. Now, with Mrs. Smart FI back to work part-time they’ve become such financial rockstars that they save 40% of their income by avoiding lifestyle inflation and stupid spending!!
Today Mr. Smart FI runs his blog as a way to share his journey to FI with other like-minded people. And his hope is to spread the message that it really is possible for normal, regular people to achieve FI.
It’s my pleasure to welcome him today to Band of Bloggers as he shares the wisdom he’s gained on his journey to FI.
What is the one book (or books) that you have given to your friends? Or what are one to three books that have greatly impacted your life (money related or not).
Two years ago, I set a goal to read twelve books in one year (one book per month). At least one of those books had to be a nonfiction book.
Of course, I put off reading the nonfiction book to the twelfth month. Time was up, so I took a trip to the library up the road, and there on the shelf sat Rich Dad Poor Dad, by Robert Kiyosaki. At the time I was listening to the Biggerpockets Podcast (real estate investing) and the guests raved about the book.
I checked it out and read it cover to cover, almost nonstop. I have never looked at nonfiction books the same.
The book was incredibly motivational and helped me to focus on buying assets over liabilities all while creating multiple streams of income.
The book stresses powerful lessons and I recommend this relatively short, easy to read book to anyone wanting to make changes in their life. There were so many good financial lessons in the book.
It’s a must-read.
Band of Bloggers True Confessions
Me (in red…as always) I love books. I really do. But here’s the thing, I have a bias against certain books. No, no, no, I’m not some crazy right/left-wing nut-job who hates any book written by someone with a different point of view.
Not at all. I love to hear other people’s point of view and to challenge my own thinking on a topic.
No, the books I don’t like are ones with…are you ready for it?
The author’s picture featured prominently on the front cover.
Now in recent years, I’ve had this particular bias challenged. One of my favorite money books is Dave Ramsey’s Total Money Makeover. And if you notice, you can’t miss Dave’s picture on the cover. I also really enjoyed he and his daughter Rachel’s collaboration on Smart Money, Smart Kids, which again has their giant heads staring back at you.
I guess my feelings have always stemmed from the idea that if you had to put your face on the cover of a book, you were trying to sell something (not just the book), and I never wanted to feel like I was being sold while reading a book.
With that said, I’ve heard MANY people talk about Rich Dad Poor Dad as being one of their top personal finance books. Maybe it’s one that I’ll have to check out on Audible or through my local library.
What purchase of $100 or less has most positively impacted your life in the last year (or in recent memory)?
I finally bit the bullet and purchased an Instant Pot. All the ladies I work with rave about their beloved pot, so I had to see what all the fuss was about.
They were on sale on Amazon the day after Thanksgiving and I took out the credit card and have not looked back. My wife and I are constantly finding new recipes to cook in the magical cooking machine.
There’s an internet cult following, so new recipes are all over the web on various blogs and Youtube channels. The wonderful thing about this cooking device is that it has so many functions. It is a slow cooker, yogurt maker, pressure cooker and can even saute foods. Also every once in a while I go on a low carb kick and I eat a fair amount of hard-boiled eggs. The pressurized cooking makes the eggs beyond easy to peel.
I’m not one for cooking gadgets, but the Instant Pot has found a place in our kitchen.
Instant Pot = Instant Value
I couldn’t agree more with Mr. Smart FI here. I’m a valuist (others may call me cheap) and I don’t mind spending money on things that really improve life.
For a long time, the Instant Pot seemed so gimmicky to me. Ya know, it was the latest fad in cooking right up there with the Ronco Food Dehydrator (did anyone actually own one of those things) or the Ginsu knives (why would you need to cut a leather shoe in half with your kitchen knife??).
With all that said, I was curious.
So when my wife started talking about getting one and we saw them on sale on Amazon, we pulled the trigger.
And I have to say I haven’t been disappointed. They really are pretty amazing devices. You can do all sorts of things with them, and I know we’ve barely scratched the surface of what they’re capable of.
And I have to echo the thoughts about the hard-boiled eggs. I LOVE hard boiled eggs as a snack. But the process for doing them in a pot is long and involved. All in your looking at 45 minutes between boiling the water, cooking the eggs, cooling the eggs and then finally, peeling them. And peeling them is often a pain in the butt.
But with the Instant Pot they take 6 minutes, I cool them in a bowl of cold water (ice cold works best), and then peel them in minutes. All told it’s SO much faster and the eggs peel WAY easier!
All in all, even though they cost close to $100, Instant Pots are worth it. (As I’m writing this my wife is whipping up tacos in our Instant Pot in 15 minutes!!)
And if you’re into buying quality products other frugal people love, check out my post on these KILLER products that’ll make your life better!
Tell us about a time when you were REALLY scared to do something. How did you handle it?
I was Valedictorian of my senior class in high school, an honor I obtained with a 4.0 GPA.
There was one big problem though.
I couldn’t give a speech to the graduating class due to fear of public speaking. I was literally terrified.
I remember the principal telling me that I had earned the valedictorian honors and I broke out into a cold sweat. How did I handle the situation? Admittedly, I mishandled it. I told them I wasn’t going to give a speech. I can’t even remember what lame excuse I gave. Fortunately, the salutatorian was eager for her public speaking opportunity and let me off the hook.
At the young age of 18, I thought I was the only person who was afraid of public speaking. I now know most people get nervous in front of large crowds.
I recall the story of Warren Buffett who was so afraid of public speaking, he took a Dale Carnegie public-speaking course to face his fear head-on. He actually dropped out the course the first time due to anxiety and had to retake it a second time to gain control of his fear.
Warren Buffett is quoted as saying, “You can improve your value by 50 percent just by learning communication skills–public speaking.” The value of being able to speak to people and clearly present an idea to a crowd is invaluable.
I would love that moment back. I had an opportunity to stand in front of hundreds of people and tell them what was on my mind.
Now I have trouble getting my wife to listen to me.
The Power of Mistakes
We all have things we regret. For me, I’ve got a few financial regrets. First, I really wish I wouldn’t have bought a new car. That decision alone probably cost our family $30,000 and I don’t even want to THINK about how much it cost over my lifetime if I had invested some of that money.
Another biggie is not investing MUCH earlier than I did. When I think about the fact that I could’ve been putting away money from the age of 18 in a tax leveraged account, I shudder.
But here’s the thing. There’s NOTHING I can do to change the past. I can’t get a do-over, and neither can Mr. Smart FI.
What we CAN do, however, is change the future.
We can analyze our mistakes, learn from them, and use them to grow into better versions of ourselves in the future. It’s called having a growth mindset and it’s critical to finding success in whatever you do. Whether it’s winning with money, growing as a blogger, or overcoming a fear like public speaking, use your past failures as fuel for the future!
What advice would you give to a smart, industrious, newbie blogger as they start out?
I am hardly in a position to give advice, given I’ve been blogging less than a year. However, there are a few things I’d say.
Hopefully, you didn’t watch one of those Youtube videos showing how easy it is to make $100,000 per month as a blogger. Yeah, I’ve seen them, and I was a bit surprised to learn that it’s hard to make one dollar per month, let alone $100,000.
Don’t get me wrong, there is money to be made on the internet, but you have to be incredibly motivated. Ironically, most of the money seems to be made by bloggers selling courses to other bloggers, but I digress.
My motivation to start a blog was to inspire and provide resources for financial newbies looking for ways to grow wealth. As it turns out there are about 2000 financial blogs on the internet doing this already, but I am not deterred.
The unintended consequence of starting a blog was the ability to interact with so many smart, like-minded people. I have truly enjoyed these last few months and have interacted with other bloggers I now call friends.
The Compounding of Small Actions
Mr. Smart FI hits the nail on the head when he talks about how hard it is to make money with a blog.
It’s not easy. I’ve been at it for over a year and have made less than $1000. All year. And when I think about the time I’ve put into my blog, my hourly wage would be down-right scary.
But here’s the thing. Most people in my position would’ve quit. In fact, most blogs don’t last beyond a year because they don’t see the results they were hoping for. They make very little, work a TON, and throw in the towel.
But because I’m in it for the long-haul, I take a different perspective. If you’ve ever heard of the compound effect or read the great book by Darren Hardy, you’ll know why.
According to author James Clear, “the compound effect is the strategy of reaping huge rewards from small, seemingly insignificant actions.” Essentially, at the start you’ll be doing things, things for a blogger that might include writing, optimizing for SEO, networking, and guest posting, but not seeing huge results. Your pageviews will be low, and your income almost nil.
What you’re doing though, is investing in the future. As you continue to make these small yet intentional decisions, over time you’ll see MASSIVE rewards for all of your hard work.
In my mind, I’m in the infancy of my online business. I’m only a year in. I’m still working on establishing my voice, my brand, my identity. As I hit my stride, I FULLY expect to see all of my hard work pay off and for me to reap the rewards.
What common advice should they ignore?
Again, take my advice for what it’s worth. Early on in your blogging journey, focus on just writing quality content. I would not worry about traffic or page views.
Blogging is not a sprint, it is a marathon.
I have seen people get frustrated with their results and turn to paid courses where they feel they can take their blog to the next level. There’s no need to go spend hundreds of dollars on guru courses early on in your blogging career.
I say, just focus on your story and the traffic will come with time.
See above for my thoughts on blogging being a marathon, not a sprint.
I have to say, however, that I do think it’s important to find a community of people who can help you along in your journey.
For me, this HAS come in the form of a few paid courses.
A few months into my blogging journey I joined Making Sense of Affiliate Marketing which was instrumental in helping me get my first affiliate sales. Not only that, but the private Facebook group has been AWESOME when it comes to answering questions, helping me build my business and growing my network. It’s allowed me to build relationships with people I never would’ve been able to otherwise. And she’s got a deal coming up for Black Friday from November 23 to November 26. Just use the code BLACKFRIDAY2018CC to take full advantage!!
The other course that has been awesome is the Billionaire Blog Club (newly renamed to Dare To Conquer). DTC has an AMAZING Slack group with channels focusing on everything from Pinterest to SEO. I often ask specific blogging questions and get responses often in minutes. And the founder, Paul Scrivens (aka Scrivs) has some KILLER courses on all sorts of different topics. His Pinterest course was the whole reason I was able to get my Pinterest game going.
Now I hear what Mr. Smart FI is saying. You shouldn’t be rushing out buying all sorts of courses and thinking that they’re going to solve all of your problems.
You have to do the work. But these courses give you a roadmap of the work you need to do and they provide a community to help you on your journey. This prevents you from working hard but doing a lot of the wrong things. This can lead to discouragement and eventually, to quitting.
In my mind, being able to avoid these pitfalls is well worth the price of a few high-quality courses.
Which is better? A goal that is smaller and you achieve it, or one that is too big and you don’t? Why?
I believe that succeeding at small easily achievable goal sets you up for more success. Dave Ramsey built his whole Debt Snowball philosophy around small achievable goals. The Debt Snowball works because once you achieve a small goal the momentum builds and you carry that momentum to the next goal. Essentially, you’re compounding your success.
In a way, this is kind of a trick question. Because in my mind, the correct answer is actually to set big AND small goals. And Mr. Smart FI teased this out.
If all you set are small, UNRELATED goals, you’ll never get anywhere. Yes, you might feel good that you’ve reached a few goals, but you won’t experience the life-changing outcomes that come from setting HUGE goals and reaching them.
Likewise, just setting MASSIVE goals can be super overwhelming. Saying you want to pay off $200,000 of debt is not only unrealistic in the short term, but it can also be discouraging just thinking about how far you have to go.
Instead, if getting out of debt is your big goal, you need to break it down into smaller, more achievable steps. And like Mr. Smart FI said, that’s exactly what Dave Ramsey has done with his Baby Steps. There’s a reason why Ramsey’s methods have been so wildly successful in helping people get out of debt.
And breaking down your big goals into baby steps will work for you too.
What are the top 3 most common money problems you’ve seen people consistently fighting to overcome?
Taking out more student loan debt than you can afford to pay with your salary once beginning work
Clark Howard, the radio personality, has a good rule of thumb. Do not take out more student loan debt than the first year salary you expect to make in that field of study. For example, a nurse fresh out of college starts with a yearly salary of $50,000. That nurse would not want to take on more than $50,000 in student loans.
I see this all the time at work. Newly minted professionals fresh out of college have been struggling financially all through their education. Now they have a good paying job and have some extra cash. Inevitably they buy a new car. Not just any car. It’s the shiny new car of their dreams. Seriously, a new college graduate should not be driving a Mercedes or Lexus. Most of them don’t know what a 401k even is.
Planning for the unknown
This money problem is all too common for not only new college graduates but adults of all ages. These days it seems like everyone is living a little too close to financial ruin. You need money for the unknown events that are certain to come your way in life. Pets get sick, you get sick, water heaters break, and cars break down. These are all unplanned events that are, for the most part, out of your control. You need money in an emergency fund to pay for these events. The last thing you want to do is pay 18% interest on a $2000 credit card balance because you were not prepared. I am going to sidestep the debate of whether or not to invest emergency fund money, but PEOPLE please have some money set aside for the unknown!
Ditto to all of this. Seriously, check out the following posts that deal with each of these topics in A LOT more depth.
Bringing It All Together
Ok, can I just say that I LOVE Mr. Smart FI’s outlook and attitude when it comes to handling money? He is BANG ON when it comes to the simple (but not easy) practices that lead to building wealth and eventually Financial Independence.
And he and the Smart FI family are well on their way to achieving this.
These aren’t lessons that have just been read about in a book or online and never tested in reality. Mr. Smart FI is living proof that the pillars of personal finance and financial independence not only work but that they can be put into practice by anyone. It’s inspiring to see “ordinary” people doing extraordinary things. Thanks to him for giving us a window into how he’s winning not just with money, but in life.
It was a privilege to have him join our Band of Bloggers.