From Broke Phi Broke to Financially Woke – Money Done Right
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 Logan from Money Done Right. At his lowest point, he had over $50,000 in debt. After thinking about what his life would look like if he continued traveling down the same road, he decided to make a pivot and turn his financial life around.
How did he do it? I’ll let him tell you the story…
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
My name is Logan Allec. I own Money Done Right. I’m 30 years old and hail from Santa Clarita, California, where I live with my wife Caroline and our one-month-old son Hunter. Recently, I’ve really been enjoying just taking walks and hiking. I’ve also been trying to make it to the gym to play basketball more.
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 graduated college, I had over $35,000 in student loans, no car, no investments, and no savings. And all of my money was going toward rent and student loans with little left over to prepare for the future. Within a couple years, I had added a $20,000 car loan to this figure, making my total debt over $50,000! One day, I thought about what my life would look like 5, 10, 15 years down the line going on like this — and I had a minor panic attack! I saw myself not reaching the goals and dreams that I had set for myself. That wasn’t the future I wanted, so I determined to make positive changes in my financial life.
What are some of your biggest financial mistakes?
Looking back, I really wish that I hadn’t bought that new car. I should have bought a used one and should have put the money that would have gone toward a new car into the market!
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
I grew up in Riverside, California, a suburban city about fifty miles outside Downtown Los Angeles.
I think the one thing I remember learning about money growing up is that we never had enough of it.
My parents weren’t poor, and in fact the neighborhood I grew up in was quiet and distinctly middle class.
But even so, I do remember money always being something our family needed more of.
So I think the biggest takeaway I took from my childhood about money is that it doesn’t come easy.
How important is becoming financially woke to you? What steps have you taken to increase your financial knowledge?
Money isn’t everything, but it sure makes life easier.
So while becoming financially woke isn’t the most important thing in life to me, it’s something that I know will affect other, more important areas of my life, like how early I can help my parents retire and what kind of life I can provide for my son and any future children I have.
I’m a constant consumer of information to better myself. Early on, this meant going to the bookstore or library and reading books about getting started investing.
Over time, this has also meant participating in forums on financial topics, reading personal finance blogs, listening to finance-related podcasts, and watching YouTube videos on personal finance.
What are some of the key principles you have used to improve your financial life?
There are two key principles, really: increasing income and decreasing expenses.
Early on, to increase my income, I worked as much overtime as I could in my job. I had just moved to Long Beach, a large city in Southern California. I didn’t know anybody there, so I didn’t have friends pressuring me to go hang out. I basically had all the time in the world to work, and in my industry (public accounting), there was plenty of work to go around, so I could clock 80+ hour weeks to make that overtime and double time. I was constantly asking my bosses if there was more work I could do!
I also significantly restricted my spending, rarely if ever going out for entertainment or dining. For breakfast every morning, I had plain oatmeal purchased in bulk. For lunch, I would eat the free snacks in the office. For dinner, I would eat microwaved spinach and frozen chicken breast. I recall one instance where some people I recently met actually did invite me to go eat with them at a Vietnamese restaurant. Not wanting to appear rude, I accepted their invitation — but I brought my own raw meat to cook in a bowl of hot water that I asked the waiter for! I kind of feel ashamed about this now — how cheap was I that I couldn’t bring myself to buy a $6 bowl of pho at a hole-in-the-wall Vietnamese restaurant? — but this just goes to show where my mentality was during that time of my life as I was breaking my paycheck-to-paycheck cycle.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
As a personal finance blogger, I’m reviewing personal finance information on pretty much a daily basis.
I really like The Money Guy Show on YouTube for financial content. And as a blogger, I really look up to The Penny Hoarder and Nerdwallet.
Where are you on the path to financial freedom now?
Not too far along, actually. When I was in the corporate world, I think I would’ve said that I was pretty far along toward FIRE journey for my age, partially due to my constant obsession with making more money and investing it in the market.
Now, however, I invest a lot more of my profits back into the business rather than into stocks or real estate. So I guess it’s more difficult now to say with absolute certainty, “OK, here’s where I am financially, and I’m such-and-such far on my path to FIRE.”
Sure, I can value my business based on some multiple and maybe have a better answer, but online marketing and digital assets and all that comprise such a fickle space that I’d rather not count my chickens before they hatch.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
I know that not everybody has the life circumstances to be as “extreme” as I was in terms of increasing my income and decreasing my expenses. I mean, I was a 21-year-old single guy with no children or real responsibilities other than taking care of myself and my own situation; my parents were relatively young 40-somethings and in good health, so I didn’t have to care for them, although I was happy to assist them financially as my own situation began improving; and I myself was healthy enough to work long hours with little rest. I also had a job that could provide me with almost unlimited overtime opportunities! Not everybody is this lucky.
Obviously life is going to look different for someone with children or parents who depend on them or who has some disability that prevents them from working long hours.
But I do think that most people have at least a little bit of free time in their schedule to pursue extra income opportunities. And I think that most people do have at least a little bit of extra room in their budget to trim a few costs here and there. So I would advise people to take an honest look at where they are spending their time and where they are spending their money, and if there is any wiggle room at all, they should consider how they can make the best of it to break the paycheck-to-paycheck cycle.
How can the readers contact you?
Email me at firstname.lastname@example.org
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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