From Broke Phi Broke to Financially Woke – Grokking Money
Today, I am excited to share with you the latest interview in the From Broke to Financially Woke series! The purpose of this series it to give hope to those struggling to escape from the not so secret group Broke Phi Broke. A group whose chant is, “We ain’t got it. Broke, Broke, Phi Broke! We ain’t got it. Broke, Broke, Phi Broke!”
To help me accomplish this goal, I have invited the best and brightest of the financial independence community here to share their stories. As you read their interviews, pay close attention to the mistakes they made. Take mental note of the success principles they used to turn things around.
When trying to apply these principles to your own life, realize that success in life is rarely linear. You will encounter some struggles. But stay persistent. Keep moving forward.
Our special guest today is Grokking Money. He was born and raised in South India. After his honeymoon, he and his wife moved here to the United States.
Although he landed a well-paying tech job in the Bay area, he lived paycheck to paycheck.
Let’s see what he did to turn things around…
After reading this interview, please check out his immigrant finance interview series on his blog. I love it!
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
I work as a software engineer and work for in the Bay Area. I am a first generation immigrant to the United States and moved here through my employer sponsored work visa. I write about personal finance and focus on building better money habits which can help transform your relationship with money and change your life. You can read more about on my blog – Grokking Money.
Besides Financial Independence I love to read books and watch movies. I also love stand up comedy and am huge fan of George Carlin. He’s the best! I am huge fan of cricket, which is unfortunately not that famous here in the US. I love the shorter version of the game these days, the IPL T-20.
Tell us about a time where you were a member of Broke Phi Broke. How did living paycheck to paycheck make you feel as a person? At your lowest point, how much debt did you have?
I have written earlier about our debt free journey as a 2 part series on my blog. I was introduced to personal finance very late in my adult life. I have lived most of my adult life without knowing anything about even the basics of personal finance like budgeting, saving, or investing. I was completely oblivious about anything that has to do with money and finance.
It was only during my late 20s that I first met with a financial advisor who helped me learn the basics of investing and cash flow management. It was also during the time I was considering getting married and had no savings. Nothing inspires you to set your finances right than marriage and having kids.
Fortunately, the financial advisor literally came in to my life at the right time and helped me. I learned how to consistently save and invest money on a monthly basis to reach my financial goals. Until then I was spending my entire paycheck and more at times. This helped us save for our marriage and allowed us to fund it without going into debt. We even managed to take a nice trip to Andaman & Nicobar Islands for our honeymoon, where we did our first scuba dive. It was truly a memorable trip!
Soon after that my wife and I moved to the US and we somehow found ourselves slipping back to our old habits. This went on for a few years and I was totally unaware of how money worked in the US. The readily available credit cards and the emphasis on having a good credit score, made us spend more.
I was happy to earn a decent paycheck, thanks to my job in Tech. It never crossed my mind to save and invest my income. I have never been a saver in my life. I love to spend money and having a steady paycheck helped make up for my sloppy money habits.
I have written earlier how 2018 was the year that literally changed our finances forever. It was during early January of 2018, we realized that how ignorant and careless I was with my money. I began to feel the stress and anxiety creep in and it felt as though we were stuck. The final nail in the coffin was during the time we were expecting our first child. I remember waking up in the middle of the night and wondering if I was ready for this new responsibility. There were all sorts of fears that engulfed me and I didn’t have any clear answers to them. I wondered if I would be a responsible father and provide for my family.
Living paycheck to paycheck was finally starting to feel as the most dumbest way to live my life. I was convinced that I was just one emergency away from a financial disaster. I needed that security in my life and that’s when I started educating about my personal finance. Being in debt a lot of uncertainty and stress into our lives. This inspired us to pursue our debt free journey.
At the lowest point our life, we had close to $130,000 in debt which included a rental property and 2 car loans. Fortunately we had a big shovel to dig ourselves out of the debt. Since my wife and I were both earning a decent income, we were able to achieve debt freedom in less than 3 years.
What are some of your biggest financial mistakes?
My biggest financial mistake till date has been realizing the importance of budgeting, saving and investing very late in adult life. I have spent a good chunk of my 20s without investing a single dime. I was happy to spend the money I earned.
It was only by the time I turned 28 that I started saving more aggressively into my retirement account. I have since then realized how much time I have lost and have religiously maxed out my 401(k) and IRA accounts. I am taking full advantage of the employer match and the fact that the stock market has provided generous returns in the last decade has helped me a lot in building my net worth.
Fortunately for us, we didn’t fall into the trap of credit card debt. We have always paid off our credit cards every single month. I know this is one of the most common debt in the US. But we are thankful, we didn’t go down that slippery slope.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
I was born and raised in a small town in South India. My father worked as a stenographer and worked for the same employer all his career. He has been through a lot himself and did his best to give us right education. I have a bachelor’s degree in Electronics & Communication Engineering and I completed my masters in Computer Science while working for my employer. I am very thankful to my parents for providing me excellent education. It has helped me pursue a career of my dreams.
Growing up, money was always tight. My mom was a housewife and living on a single income was never easy. We had just enough money to make ends meet but nothing beyond that. So the concept of annual vacations or discretionary spending was all alien to me.
It wasn’t until I started earning did I realize how much I was unaware of things many of colleagues mentioned they were used from childhood. However, I don’t regret anything about my childhood. I had some amazing friends growing up and we had great fun playing cricket all day long during our summer vacations. Like I said before, cricket in India is a religion. Every kid born in India will at some point or the other come in contact with this sport and fall in love with it. You can’t escape it.
Although I did see my parents being very careful with how they spent their money, I didn’t learn anything in particular that stuck with me. So when I started earning money, I fell for the classic mistake of spending it all. It felt as if I was finally able “live my life”. Money seemed to give me that sense of power and freedom. It took me many years to learn how to use is wisely. I wish I had started saving early.
How important is becoming financially woke to you? What steps have you take to increase your financial knowledge?
The biggest regret I have in my life about money is that I didn’t start saving and investing it early enough. When you want to build wealth, the biggest friend you can have is time. If you have time on your side, the compound interest will work its magic.
Better late than never, I finally learned that I couldn’t afford to be ignorant with my money and I had to learn how to manage my finances. It was also this journey, that I was inspired to start my blog – Grokking Money.
When I was working on becoming debt free, building an emergency fund and save for a house down payment (we are still renting and we want to buy a house as our primary residence) I came to know about Dave Ramsey. He literally changed my outlook on money and how to manage it. I started to hate debt and he inspired me to get out of debt and change my family tree. To that end, I am very thankful to his show and his baby steps.
I must confess here that I haven’t followed his baby steps religiously and I still carry a credit card, both of which are not what he teaches. But I have gotten rid of all my consumer debt and several of my credit cards. His teaching have successfully inspired me begin my journey to build wealth. It has changed my relationship with money. I feel I didn’t have a very positive relationship with money before this and believed that building wealth was not a noble pursuit. It sort of explains why I never paid attention to my finances. I am glad all of this has changed.
In order to further my knowledge about personal finance, I started listening to more podcasts on personal finance, read books on personal finance, investing, budgeting etc. I also started my blog. All of these things have helped me to become more informed about how to handle my finances wisely.
What are some of the key principles you have used to improve your financial life?
Ever since I learned about the basics of personal finance, I have internalized some of the principles that have helped me improve my financial life tremendously. Some of these include:
- Live on less than you make.
- Pay yourself first.
- Avoid consumer debt at all costs.
- Focus on your skills and increase your income. Also don’t rely on single source of income.
- Avoid high costs associated with investing. Stick to low cost index funds.
- Always give more than you consume. Strive to provide value to others and you will be rewarded handsomely.
- Stop acting rich and focus on building real wealth.
- Be generous and kind towards others and don’t forget your roots.
- Always have a budget or a spending plan for your income. Don’t spend the money and wonder where it all went.
- Share your knowledge about personal finance to others. This knowledge is truly life changing. So don’t hold back.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
Before 2018 my drive to office involved playing my favorite music albums. But ever since I started learning about personal finance, my commute and any free time I find, is dedicated to listening to personal finance podcasts. I simply love the information I consume and can’t get enough of it.
I have shared my favorite podcasts, favorite books on investing and personal finance on my blog. I highly recommend them to all my readers and anyone who wants to get started in the world of personal finance.
Where are you on the path to financial freedom now?
My view of financial freedom has a slightly different dimension to it. I don’t view it as simply hitting a number so I can stop doing what I am doing and pursue my dreams. I would rather I look at it as investing my time and energy in to pursuits that give me happiness and satisfaction, while having the freedom to walk away from a situation when I need to do. To that end, I invest constantly in upgrading my skills that help me command a good salary in my profession and I then invest my income wisely.
To fulfil my creative desires, I started blogging. I love the personal finance community and the experience of running my blog is nothing short of running a company. You need to dawn multiple hats and think differently. It helps me beat the monotony that arises often from my day job. I have found a perfect balance between the two now.
I don’t intend to take any extreme measures to hit FI early. I just want to enjoy this journey and reach it comfortably. I might be very traditional in that regard. It’s just the way I like to hit my goals. For me being debt free, enjoying my job and pursuing my hobbies is a nice combination of experiencing that freedom. I love the mix and don’t have any higher aspirations than this.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
I have written earlier about how we managed to stay motivated while paying off our debt. I have listed all the techniques we used to stay motivated. If I had to share some key things, it would be:
- Understand your why behind debt freedom.
- Join like minded folks on online groups and find encouragement in their wins.
- Depending on how big your shovel is, the journey can be arduous and time consuming, stick with it. It’s totally worth it.
- Always remember that money is a tool and not an end in itself. It can give you happiness or cause misery depending on how you utilize it. So use it wisely. Respect it.
- There is not right or wrong way to do things in personal finance. If anyone says otherwise, take it with a pinch of salt. Do what applies to your life and situation but always be open to new ideas.
Believe in yourself and no matter how bad your situation looks like today, you can turn things around. All it takes is dedication and a willingness to do what it takes to achieve those goals. Remember that building wealth is a marathon and not a sprint. So pace yourself and don’t burn yourself out.
How can the readers contact you?
You can reach me on different social media platforms:
- Facebook – https://www.facebook.com/Grokking-Money-720826398316583/
- Twitter – https://twitter.com/grokkingmoney
- Pinterest – https://www.pinterest.com/grokkingmoney/
- Blog – https://grokkingmoney.com/
Thank you Jerry again for this wonderful opportunity to share my story. It helped me revisit my debt free journey and recollect how far we have come to be where we are today.
Read more interviews in the From Broke to Financially Woke Series.
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Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.
If you are having trouble saving, he recommends that you join the SaverLife Savings program where you can get a $60 reward after six months (no income requirement). All you have to do is put a minimum of $20 a month into a savings account. Easy, right?
For a fun read, check out his article 10 Signs You’re a Personal Finance Addict to see if you are a personal finance nerd.
Before you go, check out the new From Broke to Financially Woke Interview Series.
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