I’m pretty excited to be launching my Financially Alert Friends Interview Series where I’ll be interviewing special guests from all walks of life.
These interviews will help us to understand how our core beliefs affect our money and personal finances, and ultimately they way we live. If you’d like to participate, click here for details.
Introduction to Today’s Guest
Steve started a software business in 1998 and grew it into a multi-million dollar business before selling it to a larger company in 2009. After transitioning with the new company, he retired early in 2012 at just 50 years young along with his wife.
With his sons off to college, Steve now gets to travel the world with his wife (think Galapagos Islands!). When he’s not traveling or soaking up the Florida sun, he keeps his mind sharp by developing mobile apps and blogging about personal finance and FI in his spare time at We Retired Early.
Take it away Steve…
1) Walk me through how and why you started your personal finance blog? Was the decision easy or hard, why? What’s your core message you’re trying to share?
I retired early (at 50 years old) and we took the first 3 years of retirement to travel extensively (see our travels at http://www.WeBeTripping.com). After the dust settled from our travels, I decided to begin blogging about things that excited me. That happened to be lifestyle freedom, financial independence and technology. So from here, the blog was born (check it out at http://www.WeRetiredEarly.com).
2) Describe your past relationship with money. How has it evolved into your present views today? How do you want it to change in the future?
I started working at a young age (10 years old). I worked for a friend of my father pumping gas at a service station. I saved pretty much every penny and purchased my first car when I was 15.
In college I worked and graduated with no debt. Once I graduated and started earning some descent cash, my views of money changed a bit – I became more of a spender. I didn’t spend all of my disposable income, but I came close.
A few years later, I started a business and had to go back to my more conservative ways of spending so that I could reinvest all profits back into the business. This was a good lesson and put me on better track of financial prudence.
After growing and selling our business, we made enough money to comfortably retire. Now I try to keep our safe withdrawal rate (SWR) to about 4% annually to last for a long retirement. I would not say that I am frugal nor spendy, I’m in the middle.
3) Describe 1 empowering belief you have about money and how it positively affected your life. On the flip side, describe 1 disempowering belief about money (past or present). What has been the effect on your financial goals?
Money provides opportunity. For example, because I am financially independent, I can choose projects I work on – I tend to work on things that excite me. I have also been able to pay for college for my 2 boys and set them up to begin their careers without being saddled with debt.
Money has not affected the way I see myself or how I act. I am still the same person I was before I retired, I just have a lot more freedom. I don’t drive a Mercedes or anything like that – I’m happy with my paid off 2010 Jeep Wrangler.
4) Who taught or influenced you about money when you were growing up? What was the impact?
Indirectly, my father and mother influenced me growing up. We grew up on a farm and money was tight. I can distinctly remember my father and mother frequently arguing over money and I vowed to do better. My father was a saver and my mother a spender. I decided at that point that wanted to make a comfortable enough living that I would not have to stress about money.
5) What is your favorite personal finance book? What’s the best actionable takeaway you got from it?
My favorite financial book is by a friend, Robert (Bob) Charlton. Bob and his wife Robin are an interesting couple. They retired early at 43 years old and did it the old-fashioned way – they worked hard and saved even harder. Now they travel and enjoy life – they are currently in Brazil for 2 months.
After being retired for a few years, Bob wrote a book called “How to Retire Early”. It is a transparent look at how they pulled off early retirement and explains basic finance in easily digestible terms. You can purchase it on Amazon: http://www.amazon.com/How-To-Retire-Early-Retiring/dp/1482653729.
Before reading this book, I was paying a financial planner $500 a month to manage my investments. Reading this book gave me the confidence to manage our finances on my own.
6) What are your top 3 favorite personal finance blogs, and why?
Retire29 (http://www.retire29.com/) – Eric served proudly in the army and is now on a quest to retire early. He reached an epiphany at 29 years old – he wanted to retire early and is documenting his journey along the way. Eric has a great sense of humor, an interesting outlook on life, and has a real flare for writing. I really like his style.
Budgets Are Sexy (http://budgetsaresexy.com/) – J. Money is also aspiring to retire early and regularly posts how he is trending towards his goal. He talks about topics that many of us think about but rarely verbalize. For example, one of recent topics was a discussion about whether it makes sense to tip (or not) on carry out food: http://www.budgetsaresexy.com/2015/11/do-you-tip-on-carry-out-food/.
Financially Alert (https://financiallyalert.com/) – I just recently found this knuckle head and have found myself scanning all of his blog posts. Just kidding – early retirement in your early 30’s is a great inspiration.
7) Describe one investment type/class that excites you the most, and why?
I keep it pretty simple, I have a few mutual funds that generate dividends to supplement my retirement income and the others are index funds and a bond fund. All of my funds have low expense ratios – this strategy carries very little stress and management. I’ve written several “financial independence” articles that explains how I approach investing, you can see them here: http://www.weretiredearly.com/Blog/financial-independence/
8) How much passive income would you need per month to live happily ever after?
What would life look like for you at this level? We live on about $100k per year, which is more than a lot of early retirees, but our portfolio supports that level of spending. This spending level allows us to travel extensively (we travel sometimes 3 months at a time), explore hobbies, support our kid’s college spending, volunteer, and live in a spectacular location in the beautiful Gulf of Mexico, just steps from the beach.
9) Do you discuss money or financial matters with friends and family? Why, or why not?
My wife and I are very transparent with money. We have the same goals and I track our spending for the family. We make a budget and I provide weekly updates to her as to how we are trending for the month. If we start to overspend, we know to cut back to bring things back into alignment.
I don’t really talk much about finance with friends unless the topic naturally comes up. My friends know that I am retired but have no idea what our net worth is. I think money is such a personal matter and people tend to judge others on how much they make, that’s why I don’t choose to talk about it publically.
10) Tell us something about yourself that only your closest family and friends know about.
I learned to ski barefoot at 12 years old. We had a boat and I spent my summer weekends on the lake. It took an entire summer to learn to ski barefoot and I had numerous knots on my head from falling face first. That probably explains a lot…
11) Illustrate a time you made (or saved) money that was so impactful it launched you into a state of euphoria (ie. It made you REALLY happy!).
In 2009, we sold the software business my wife and I had spent 10 years building. Once we sold it, the acquiring company wired a large sum of money to our bank account. That day, we went in to transfer that money to our Fidelity account and once the teller saw our checking account balance, she called in a private banker to cater to all our financial needs.
That money got transferred to our Fidelity investment account almost immediately, but it was enlightening to see how much better you’re treated when your banker sees a large balance in your account!
If you would like to learn more about my story, I included some interviews and podcasts on my ABOUT page: http://www.weretiredearly.com/Blog/about/.
12) Describe a memorable financial blunder you’ve made in the past. What did you learn from it?
I’ve made lots of them but this was the most expensive. When I was in my early 30’s, I made a significant amount of money when a private company went public (I owned stock) – to the tune of about $800k. This was just before the 9/11 attacks and I was investing in a bunch of dot-com stocks. Once 9/11 hit, a good number of those companies went belly up and we lost a lot of that money. Luckily, we kept enough money set aside to start our business that we eventually sold, but it taught me a valuable lesson about investing. Now I don’t invest in individual stocks, I only invest in mutual funds and bond funds. I also NEVER sell in a down economy – I wait until the economy rebounds, it always does!
Readers, how would you spend the majority of your time if you reach FIRE early?
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