From Broke to Financially Woke Interview Series – Get Back on Feet
Today, I am excited to share with you the eleventh 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 Saadain Syed, who currently lives in Dubai, where the cops drive Lamborghinis. Before being able to relocate there, he spent a few years in Broke Phi Broke.
Let’s see what he did to escape!
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
An auditor by day and a blogger by night can be the most appropriate tag line for me. I blog at www.getbackonfeet.com have been working in a public accounting firm for the past 5 years and recently moved to Dubai to work with my wife and son. We have always been fond of traveling and when this opportunity presented itself, my wife was quickly on board. This decision to move to a different part of the world has been great so far.
Coming to interests now, well I have already dropped a big hint in the previous paragraph. Take a guess? Yes – Travelling. I have traveled 5 continents so far and plan to visit the other 2 as well before my baby starts going to school. Apart from that, cryptocurrency takes up most of my time recently. I must admit I got caught in the crypto storm in late 2017 and ever since I have been more and more intrigued by this space every single day.
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?
A little more than $25,000, excluding the car loan. However, after I landed my first job after college, my monthly paycheck was enough to keep me afloat and I was content with that initially. However, I soon realized that I was earning just for my creditors and was trapped in this vicious cycle of interest.
How did this make me feel? Well, I just wanted to quickly get out of it. I got married around that time as well so the motivation to get out of debt increased manifold. I must admit that living paycheck to paycheck made me a much more responsible person. I became more grateful for what I had and started appreciating the little things in life.
This period of life continued for two years. Everything in this life happens for a reason and I am certain living like this was all part of a bigger plan that life had in store for me. This entire ordeal of living paycheck to paycheck taught the importance of saving money.
What are some of your biggest financial mistakes?
- Living on borrowed money: I racked up nearly $10,000 in credit card debt from undergrad. Gas, food, mini-vacations, partying, you name it. My father is a smart man who thought it will be wise to build up credit from the start. Initially, I was doing well with his help, paying off the balance every month. A close to excellent credit score while still in college, credit card companies loved me, and I was offered all sorts of credit cards. Without my dad’s knowledge, I opened two more credit cards lines. My justification was that I’ll pay it off as soon as I land a decent job after graduation. And the rest is history, I was in a financial turmoil.
Now thinking back, I think it should be a crime to offer shiny new plastic cards to an early twenty-something-year-old. Also, I believe, credit score management should be a mandatory subject at every college. Anyway, this is a whole new separate topic and I can go on and on about this. I am planning to write an article on this subject soon.
- Buying a new car: By far, my biggest financial mistake was allowing myself to sign the dotted line for a $28,500 car while earning $50,000 with hardly any savings.
How important is becoming financially woke to you? What steps have you take to increase your financial knowledge?
Extremely important. Now it’s not just about me. There are people who look up to me and are dependent upon me. I not only practice but also try to preach the importance of savings and investing now.
As mind-boggling as it may sound, despite ruining my credit early on in my life, I was always a financially literate person. I was a student of accounting and finance throughout my college life, so I knew exactly where I was wrong and what needs to be done to rectify my situation.
What are some of the key principles you have used to improve your financial life?
Let me break down the key principles into 4 parts:
- Income should be greater than expenses:
This is easy to understand, yet overlooked most often. I cannot stress how important this mantra is if you are going to build a strong financial foundation from the very beginning. Neglecting this principle leads to the unnecessary culmination of debt and you forget how to live within your means.
- Avoid debt at all costs:
Yes, I know that debt is a necessary evil. Sometimes you don’t have any other choice. Major decisions in life such as a car or a house require you to borrow money. Having said that, there is absolutely no need to swipe a credit card every time you go shopping or dine out. Here is a pro-tip: if you have a credit card, keep it locked safely in your bedroom drawer. This way you will avoid the temptation of using it.
Your spending and lifestyle will follow your income increments. People tend to increase their standard of living as the income grows. There is no harm in that, after all, you earn for the betterment of your living standard. However, there needs to be a check after some point. Start auditing your last 6 months bank statement and highlight all the spending you could have avoided.
A person’s financial success starts with a conscious effort to control one’s expenditure. I don’t suggest to live frugally but saving at least 20% to 30% of disposable income will be extremely fruitful in the long run.
This ties back to the previous point. Practicing self-control means to curb the urges to buy something that you want. The quicker you learn to differentiate between needs and wants, the better it will be for you. I highly recommend to read “The Science of Self-Control” by Howard Rachlin which was an eye opener for me.
Where are you on the path to financial freedom now?
Still a long way to go. Race to financial freedom is a constant uphill marathon. Every day I strive hard to achieve that goal and with every passing day, I inch closer to my target. I am happy even if my net worth is few bucks more than the previous month.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
Let me break this down in bullet points:
- First things first – get rid of your debt. I highly encourage you to read Dave Ramsey’s snowball method of tackling debt.
- No amount is too small. Try setting as little as $5 a week aside.
- Put your savings on autopilot. Apps such as Acorns and Stash can help you with this.
- Try spending $0 on “wants” for 30 days and see how you feel about it at the end of the month.
- Start hustling. There are endless options out there. Start selling on Amazon, read about affiliate marketing, use Instagram to make money or just sign up at Fivver.com and see what weird ways people have come up with to make money.
How can the readers contact you?
I would love to get in touch with Y’all. If you have any questions regarding money, savings, investing or just life in general, feel free to reach out to me at firstname.lastname@example.org. I might not have a solution to everything, but I can certainly point you in the right direction.
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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