From Broke Phi Broke to Financially Woke – Let’s Build This Thing!
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 Thomas from Let’s Build This Thing! At his lowest point, he would sometimes run out of money by the 5th of the month. Not that long ago, he was making $21,000 a year as a school teacher.
But now he’s making 20 times that amount. What did he do to turn his financial life around? I’ll let him tell you…
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
My name is Thomas and I am the Chief Builder over at Let’s Build This Thing! I help small businesses focus on the next step and find their path towards growth. I am a former teacher, current techie, serial entrepreneur, and a lover of all things basketball, music and coffee (especially together).
[Editor’s Note: If you are a lover of all things basketball, be sure to check out The Last Dance on ESPN!]
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?
The Quick history:
I grew up poor but was so well cared for by my mom that I didn’t realize we were any different until I was older. Once I started earning a little bit of money of course I spent it like crazy, finally having the forbidden fruit. As a young teacher making $21,000 a year (and not that long ago) I was also certain I was going to be a rock star simultaneously. I played music 4 nights a week and racked up all kinds of debt with instruments and recording equipment.
Without the debt, I couldn’t play or run around the country so I was grateful for the opportunity. I got my masters degree which helped make a few more dollars but I still spent it like mad, sometimes being out of money on the 5th of the month and having to eat pancakes for the rest of the month or rely on the generosity of friends. (Sidebar: I do have 9 different pancake recipes that I can whip out at any time. Side hustle #37 forthcoming)
Fast forward I meet the love of my life, we get married and a year later are getting ready to welcome our son into the world. At this point I had started to put on my big boy pants and was slowing down the recklessness. After all, my wife was another kind of lady and deserving of better than my best. While I was still on a decent but low teacher salary she was a principal and making big bucks. (relatively speaking of course because we know education is not fully valued at its worth…by comparison she was rolling in it.) She was good with money by default not by any teaching. Never had credit cards and didn’t spend much so she had a chunk of change sitting waiting for bigger things.
We were headed for bigger things and the realization that she made the money in the family but when she stayed home to be with our son, we would be living on my salary. So she sat me down, we talked about the situation and we made a plan. She paid off all of my debt and said we could never do that again. Five months before she left on leave, we stopped using her money and started living on my measly salary. We relearned how to enjoy life and get by on ⅓ of our total earnings and socked the rest away for paying off the remaining bills and dealing with what a baby would bring us. That test run gave us the confidence to move forward and work towards increasing my income.
Increasing My Income
I initially upped the ante by getting a second related part-time job working with kids after school. I had transitioned to doing tech in schools and didn’t have to correct anything anymore so I could work and make more money after school. They offered me a full-time job and so I was working 6 days a week, doing 1.5 jobs and earning a little closer to what my wife was making beforehand. It took a few years but I got there. The long hours and the need to earn more was a constant those first few years but the time my wife and son had at home together was worth it.
Then the tech job hit the fan and I was confronted with a dilemma. I was working part-time at a few schools to try to make the tech job into a 2nd full-time job despite the wages being so much lower. The problem was the district did not allow me to get benefits paid by so many places and no one wanted to pick up the tab alone so I was forced to become a contractor and fend for myself.
Becoming an Independent Contractor
Taxes were crazy and my hours had been cut but I was free to work with anyone I wanted. I started my company and systematically started showing up anywhere I could to be of help to someone and make my name known. Pretty soon I was managing 5 schools, 8 schools, ten schools and so on. I became a leader in the local tech community and a resource of the other techies. Sooner than later the techies were calling me to help them out as well as old friends were now principals hiring me to do their tech management. I never pitched a client again. Referrals have done their duty as I have become the go-to in my little neck of the woods.
I was able to 20x my original income as a techie and grow the business to a small firm with employees. I made the decision to go all in 5 years ago and we keep growing. That move has now quadrupled our family income since we first started and my wife is now working part-time so we have even more to be grateful for.
It has not been fast or easy and is still with plenty of challenges but we are living a pretty sweet life with hopes for leveling up again in just a handful of years. I am now teaching the craft to younger folks, helping them get their foot in the door and showing other entrepreneurs the many paths as they build their thing.
What are some of your biggest financial mistakes?
I’ve had more than a few bad car leases but I’ve finally learned that it is a bad idea.
I also moved a retirement fund straight into a Roth IRA and was penalized severely. This happened all before I ever found the FIRE community or anyone that could have talked me down from that painful cliff.
We have racked up debt at points in our journey due to those decisions and others but the silver lining is that has forced me to learn how to earn even more.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
My mom raised 4 of us by herself without really having a steady job. She had learned every trade and still at 72 can fix things better or instruct the young bucks that come to fix things in her apartment building. We had very little extra but people always looked out for us. We had so many guardian angels over the years and now are repaying their kindness in our own kindness.
My mom never had any credit and lived paycheck to paycheck until I was in college. Along that way we had so many ups and downs. I can remember being small and having a car fire and watching as our rent money went up in flames. My mom jumped back into the car to save some of it, burning her hands. It was so sad but I now fully understand how hard she worked for the life we had and what she accomplished.
Since college she has continued her frugal lifestyle, earning more and more while having very little in expenses. She may have been the original FI but she never really wanted to retire. It was so foreign to her. She finally retired again and hopefully for good this time. Her nest egg is something pretty although she never really invested it. Despite all of that she has enough to last her until the end and plenty of kids to help out if she ever decides to blow the wad.
How important is becoming financially woke to you? What steps have you taken to increase your financial knowledge?
It is important to me to get all things in order because I want to be able to enjoy our life now and not wait for retirement. We have had too many people leave us ahead of their time and there is no guarantee that we will see those years so we are taking our time now and enjoying it.
I hope to have the means to rewrite the script in another 5 or so years and be location independent. It is not so much so I can sit on a beach in the tropics but more so we can take care of our family on all sides of the country and not be bound to jobs that require us to be in one place.
I learn so much more about all of that now as I have watched my mom spend on what was truly important to her and forget the rest. Prior to that I only have Ramit and I WIll Teach You to Be Rich as my education. That has the inspiration for much of the systems and growth we have experienced since I was broke.
What are some of the key success principles you’ve used to improve your financial life?
Setup systems and keep to them. I have bills come out of one checking account and funny money in another. I don’t steal from those anymore.
The systems and habits are more important than the quantity. If my excess this week is $5 it is invested. If it is $500, it is invested. Same habit; different result. Every raise is invested and I try to live off the same amount regardless. Get the habits in place and the numbers will take care of themselves eventually.
I am always looking for ways to learn more and earn more so I can take the summer to drive the country or buy a house and not worry that we will be in trouble. I am conscious of my spending but more conscious of how I can earn more.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
Pretty often. I seem to have landed in the FIRE part of twitter despite not preaching that myself and have followed many smart people there. I like Jillian Johnrsud, still love Ramit Sethi and then a bunch of smaller folks that make me smile more.
- Do You Even Blog – not financial but his topics follow that undercurrent.
- Chad Carson
- Shaun Has a Blog– Project Palm Tree
- Broke is a Choice
Where are you on the path to financial freedom now?
We are doing well with our saving and investments but there is always more to be done. I am hoping to have the next phase in plan and “retire” in 5 or so years. It will likely be closer to Barista FIRE or Coast FIRE than true FIRE since I am a serial entrepreneur. The day I retire I will sleep, the next day I will start 30 new businesses.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
Start today and get the accounts in order. It can be done. Even $5 a week is worth putting away in getting things in order.
Pick one habit to change and start little tests to see if you can rearrange the cue but get the same reward. Dealing with the source issue is sometimes easier than we realize, although elusive.
Get an accountability buddy to have someone to put it out to the world. Big change starts with the next decision.
How can the readers contact you?
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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