From Broke Phi Broke to Financially Woke – Millionaire Dojo
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 Nathan from Millionaire Dojo. He and his wife have reached a net worth of $100,000 on a $50,000 salary.
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
I’m Nathan and I blog over at Millionaire Dojo. I’m 25 and married my wife when we were 23. We live in a small house, in a small town, in Georgia.
Some of my interests outside of financial independence are training in Taekwondo (does my blog name make a little more sense now?), flipping things on eBay, and listening to podcasts on various topics. I love learning about history, psychology, business, religion, and science.
My wife and I have traveled to a new place every year since we’ve been married and we really enjoy that. I’m working on my travel hacking skills so we can travel on the cheap in the future.
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?
When I was 18, I made a really dumb decision and ended up getting a DUI. My parents made me own up to my mistake and I had to pay for every cost associated with the arrest. My court date was a few months after the arrest, and my driver’s license was suspended for a year. After I got my license back, I had to start from scratch at 20 years old with no money in savings.
My dad let me work with him for a little while until I had enough money to buy a car and then I got a job at Kroger. I was making $7.25 an hour at Kroger, and only got 20 hours of work a week. We lived in a very rural area, so I had a 30-minute commute on top of my tiny income and work schedule.
Thankfully, my parents let me live with them until I got my own house and got married, so I always had a place to sleep. It took me a good while to grow my income from minimum wage. I was just breaking even for several months while I worked part-time at Kroger. I hoped I could get promoted, but never made it anywhere with that.
I felt pretty crappy about my situation. My girlfriend (now wife) was working with her dad in the movie industry and making a killing compared to me. I wasn’t necessarily jealous, but I definitely felt embarrassed that I couldn’t save even a couple hundred dollars a month. I didn’t have many friends or resources to help me out, so I just felt stuck.
I ended up getting a second job at Quick Trip and finally was able to start saving a little bit of money. I worked at both Kroger and Quick Trip for a few months, and that was a nightmare. Several times, I would clock out of one job, just to clock in to the other. It got old quick.
I didn’t know anything about the personal finance community or blogs at the time, so I had no idea there were all kinds of side hustles I could be working on.
I luckily never had any debt throughout my broke phi broke phase. I bought the cheapest car I could find and paid cash for everything. I didn’t buy many things at all until I increased my income.
What are some of your biggest financial mistakes?
I don’t have a huge financial mistake, I just didn’t start saving aggressively until a couple years ago. Before I stumbled upon financial independence (FI), I thought I was doing good to save 5% or so of my income. I planned on working a corporate job until I was 65 and retiring at the normal age.
The DUI was probably my biggest money mistake because I sat on my butt for the year my license was suspended. My parents only had satellite internet and it was too slow to do any serious internet browsing.
I was also a bit depressed during that year and should have looked into things I could be doing to grow my skills while I was just sitting around. I wasted a good year of my life when I could’ve been learning how to code or something like that.
I didn’t know that you could learn valuable skills without going to college, so that’s probably one of the reasons I didn’t do anything.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
I grew up not far from where I live today – about an hour away from Atlanta. My parents live 30 minutes away from any kind of town, so going anywhere was a long commute. I’d say I had a better childhood than a lot of people.
My dad’s a preacher, so we were in church every week and that was good because we were home-schooled and the church added community to our lives. I feel like I had it much easier than a lot of people do, so I’m grateful for that. We always had more than enough money to live a comfortable life.
For some reason, I’ve always been fascinated by money. When I was really young (too young to know stealing was wrong), I decided to take all the money from the church offering home with us. That must have been embarrassing for my parents! Stealing aside, I’ve always been a saver ever since I was little.
When I was a teenager, my parents got a Dave Ramsey course for young people and had us watch it. I really enjoyed that course, but by the time I got my first job, I had forgotten most of what we learned.
I stayed out of debt, mostly because I didn’t see any need to acquire it. I’ve always enjoyed having the least amount of bills possible.
Once I got engaged, I figured I should probably learn how to handle money like an adult, so I went back to my Dave Ramsey roots and start listening to his podcast. I got hooked on that for a long time and eventually, I knew every answer that Dave was going to give when a person called into his show with a question.
How important is becoming financially woke to you? What steps have you taken to increase your financial knowledge?
Becoming financially woke is the difference in having a mediocre life where you’ll always have to devote a large portion of your time to work, or achieving FI and owning your time to do whatever you like. It’s important to me, but I realize not everyone wants to quit their job.
After I had been listening to Dave Ramsey for a while, I thought I knew everything I needed to know about money. That’s a dangerous place to be. Dave only covers the basics when it comes to finance and he doesn’t mention early retirement at all. He suggests investing 15% of your income and retiring at a regular age of 65.
If I didn’t have a friend who introduced me to the Mr. Money Mustache blog, I’d still be a Dave Ramsey follower, doing the basics. Once I learned about the FI community, I went all in and started completely optimizing my finances.
I read every article Mr. Money Mustache ever wrote and then I started branching out to other people in the FI community. A few months later, I came across a podcast called ChooseFI.
The hosts of ChooseFI – Brad and Jonathan have put together a resource of information that anyone can consume and become FI in a matter of 10-20 years. There are a lot of experts in the FI community and almost all of them have been on ChooseFI to share their best money tips. It’s hands down the best podcast for learning how to become wealthy.
What are some of the key principles you have used to improve your financial life?
My wife and I have never had any debt other than our mortgage. We drive old cars and neither of us got 4-year college degrees. I did classes at a community college to build up my resume and land my current IT position. We were able to avoid student loans this way.
I started using a budget with Dave Ramsey’s Every Dollar app and it has really helped us stay on top of our finances. Since I’ve got all of our expenses listed out in one place, I can go through each one and see if there’s anything we can do to cut costs.
We don’t keep strict numbers on each budget category since our ultimate goal is to spend $0 each month. We’re spending as little as we can without depriving ourselves too much.
The first thing we did with our finances when we got married was combine them and set aside an emergency fund. You can be sure that something expensive is going to come up unexpectedly and it’s nice to have money set aside for these situations.
To build wealth, we’re investing our savings into passive index funds. Back when I was just a Dave Ramsey follower, I had no idea where to begin when it came to investing. Thankfully, after consuming so much content from the FI community, I feel like we’re on the best investing path out there.
Another key thing we do is give 10% of our net income to the church. Giving money each month keeps us in the habit of being generous. I only want to accumulate money so I can enjoy it and help others out.
Eventually, I want to have enough money to be set for life and still have a source of income that we can use to make the world better in some way. I love making contributions to the greater good!
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
I used to consume personal finance information every single day, but I’ve cut back to a couple of times a week. I love learning about money, but there are other areas of life that I’d like to devote more time to learning about.
I haven’t read many books on money because there are so many blogs out there with all the information you need and they don’t require me to go to the library to read them for free. I did enjoy a book called The Magic of Thinking Big. The message behind the book is to think positive about your life and it will inevitably become better. It’s a great pick-me-up!
For learning how to live frugally and find happiness in frugality, I suggest reading Mr. Money Mustache. He’s a really good writer and has so many unusual tips for saving money.
For investing, I suggest JL Collin’s stock series. After reading this series, you’ll know everything you ever need to know about investing. Investing in Index funds might be boring to some people, but it’s so easy and allows me to spend more time learning about other things.
If you’d rather listen than read, I’d suggest ChooseFI. Brad and Jonathan do such a great job of asking their guests good questions and providing a great story with each episode. I could listen to this podcast all day (and did when I was trying to get current on episodes).
Where are you on the path to financial freedom now?
We’re still a good ways off from being FI, but we recently hit a net worth of $100k. My goal is to hit a net worth of one million, so it’s cool to be 10% of the way there at age 25. I’m hoping I can double our household income over the next few years and really ramp up our investments.
I think we’ll easily be financially free in our 40s and hopefully pull it off in our 30s. We’ll just have to see what I can do to boost our income. I’d love to spend the second half of my life devoting my time to causes I care about.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
You aren’t stuck where you’re at. With the right mindset and effort, you can climb out of this pit of despair and become wealthy within a short amount of time. Your life becomes what you think it will. If you think you’re always going to be stuck, you’re always going to be stuck until you stop thinking that way.
Be stupidly optimistic. Read The Magic of Thinking Big and start thinking you’re going to turn your life around. Get on a budget, start looking into extra income sources, pay off any debt with extra income and then see where that gets you in 5 years.
How can the readers contact you?
You can follow my journey to becoming a millionaire on my blog Millionaire Dojo. If you ever want to chat about anything, shoot me an email! You can also hop over to my Facebook group where we mostly talk about selling on eBay as a side hustle.
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.
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