From Broke to Financially Woke Interview Series – MikedUp Blog
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 Mike from MikedUp Blog. His story is unique in the fact that he actually chose to become a member of Broke Phi Broke. Now why in the world would he do such a thing? I’ll let him explain…
After you read the interview, check out Mike’s blog. There you are guaranteed to find more highly entertaining and informative content. Also, you’ll find a guest post from me explaining how to not let cognitive biases delay your financial freedom.
I could go on and on, but I’ll pass the mic to Mike…
Introduce yourself. Where do you blog? What are some of your interests outside of financial independence?
Hi, Peerless Money readers! My name is Mike and I am the founder of MikedUp Blog, a personal development site dedicated to helping you find a better version of yourself through improvements in many aspects of life (one of which happens to be personal finance).
I want to first thank Jerry for giving me the opportunity to borrow your eyes for a few minutes and to post on his site. I’ve really enjoyed the posts he;s delivering to his audience and this series has been great to follow from afar! Now, I’m stoked to be here!
When I’m not blogging or running our family business, I’m probably doing one of five things – getting beat by my older daughter in a Pretty Prett Princess board game she got for her birthday, feeding my younger daughter (6 weeks old as of this writing), spending some quality time with my wife, playing some competitive beach volleyball, … or sleeping. All of which I enjoy tremendously.
As far as professional interests go, I’m currently immersed in growing the 2 year old business that my wife owns and I run with her (yes – she’s my boss). During the days, we’re working hard on that adventure, then winding down and enjoying our family time on nights, weekends, and some free weekdays. Finding balance is our current struggle, but I’d say we’re making good progress.
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?
We’ve been functioning member of BPB for nearly a decade and we’re only beginning to come out of it. But the thing with our experience is that we chose that path when a more attractive option (in the short term) existed. We’ve sacrificed in the short term for the potential benefits down the road – we’ll see if that was the right call in about a decade.
My wife started dental school in 2008 when we moved to a new city and set out to take out anywhere from $200,000-$500,000 in student loans for her 4-year program. During dental school, we lived off my $37k salary, tried to pay for a portion of her education, and save at the same time – there wasn’t much room left over and we learned a litany of frugal tips to help us get by.
But great frugal tips can only take you so far when you’re making less than you need to pay out in a month.
Then, after my wife earned her degree and started practicing dentistry, we chose to buy our own dental practice, rather than staying hyper-frugal and paying off all our debt. Much to the contrary, we doubled the debt we had taken out and now owe loans on her education, our home, our business, and a new office for our business… Our monthly ‘minimums’ are enough to induce heart palpitations.
But that is the path we’ve chosen.
And to officially go ‘all-in’ I’ve recently resigned from my well-paying job with our state to dive head first into our business. Foolish or wise…? As I said above, we’ll let you know in about a decade.
But the one thing that hasn’t changed much – whether we’re making $37k or well into the 6-figures, if the income doesn’t far exceed the expenses, there’s a general uneasiness that can have a way of encapsulating your mindset. So we’ve designed our lives and our debt-payoff philosophy such that we’re in the best balance of paying off debt for the future as well as living for now.
At the worst, our total debt neared $1Million. Since that point about 2 years ago, we’ve made significant progress, and if we only continue making minimum payments for the next 8 years, we’ll be completely debt-free (not including our home). At which point, we could choose to knock out the mortgage quickly or build a bigger cushion for the future. Either way – it’ll be nice to have options.
The one wild-card in our case, though, is the success of our business. It has the ability to impact our lives significantly in either direction.
What are some of your biggest financial mistakes?
I think it’s so important to look at the mistakes you’ve made in life – great question.
Most of mine center around being over extended during the financial crisis:
- I leased a BMW 128i for 2 years and paid about $450/month while I was in grad school… Making about $20k annually. I ended up having to find someone else to carry out the remainder of my lease when I nearly drained my savings account making payments. The nail in the coffin was a flat tire… $425 to replace – 1 tire. Yeah…
- I lost 66% of our net worth during the financial crash, then panic-sold our investments at the bottom, and ultimately missed out on significant gains because I was uninvested during 2009-2010… The $20k I lost represented 66% of our net worth and was earmarked for the downpayment on our home. It took us about 6 years to recover.
- We neglected to pay the undergrad portion of our student loans back while we were in the beginning of grad school (she went to dental school and I was on a PhD track for 2.5 years, then converted to a Masters degree and finished in 4 years). During the first couple of years, we accrued nearly another $10k in interest on those loans… I hate student loans with a passion.
Those are the three biggest financial mistakes, although there are many others, financial and otherwise, these 3 have left the biggest mark.
Describe your upbringing. Where did you grow up? What did your parents or teachers teach you about money?
I am an only child who came from an upper middle class family. I got more than I needed and just about everything that I wanted, but it wasn’t just handed to me. I got handed my first W-2 when I was 14 and am fortunate to have worked, a lot – in a bunch of different fields (as a landscaper, men’s fragrance salesman, coach, server, quality supervisor, forensic scientist, blogger, and now CEO…) and in varying places (Ohio, Maui, Costa Rica, the Gulf of Mexico,…).
I ended up playing football in college, spending 3 summers working in Maui, and did my graduate research in Costa Rica – all before I was 22… I am beyond blessed to have had those opportunities.
I grew up in a small town in northeastern Ohio. My father worked in a mill for 7 years, carried mail for 15, then ended up in management with the post office – and retired as a postmaster.
My mother worked in banking since she was 16, put in about 20 years then cofounded her first mortgage company, which did very well. About 7 years after that, she struck it out on her own in the same industry and had similar success… Then 2008 happened.
My family taught me the value of hard work and showed me the joy of turning your mind or your brawn into dollar bills in your pocket. I formed my first landscaping company at 15 and the rest is history.
How important is becoming financially woke to you? What steps have you taken to increase your financial knowledge?
Bro – it’s huge.
You can make all the money in the world, but if you’re not wise enough to either know what to do with it or to find others to advise you (who know what to do with it), then you can earn all the money in the world but you’ll probably end up just like most folks… right around paycheck to paycheck.
The difference – the magical elixir – is education. What are you willing to go and learn today so that you can earn freedom tomorrow? And I don’t just mean reading books and blogs, and listening to podcasts (each of which is a vital component to your financial wokeness), but I’m also talking about getting your hands dirty and putting your theories into practice.
Here’s what I do and have done:
I started investing in an individual investment account at 16. Sure I lost a ton of money during the crash, but I gained a ton before and after – and I learned the mechanics of saving and investing.
I read. And although I’m admittedly not quite as good as I’d like to be in this category, I read books that have been recommended to me multiple times. I’ll also abandon ship if I’m not into a book. For example, The E Myth and Think and Grow Rich couldn’t hold my attention and although they were both highly recommended by a few people – I bailed.
The two most impactful books on my financial life have been Dave Ramsey’s Total Money Makeover and Jocko Willink and Leif Babin’s Extreme Ownership: How U.S. Navy SEALs Lead and Win. I know that speaking Ramsey’s name in the FI community is blasphemous, at best, but the dude found me at a time in life when I needed his lessons. We were low on cash, high on debt, and low on education – he paved the way. And while I’ve moved past his advice, there was a time that he got us on the right path. Extreme Ownership changed my life, our business, and our financial future forever. That book has helped me improve in just about every way, and in fact, I use it as the on-boarding program for our business.
I also listen to podcasts and read great blogs daily, and I detail the blogs and podcasts I love over on my site.
But past all the learning and theory, I’ve probably gained the most financial knowledge through the processes of managing and paying down our student loans, and then while starting our business. There’s nothing like employees with families and mortgages that make you get your financial $hit together. Not to mention our own family that needs provided for.
My recommendation – start a side hustle that requires some type of formational steps (i.e. bank account, tax ID, maybe a website, etc.), and then see what you’re capable of. You’ll probably surprise yourself.
What are some of the key principles you have used to improve your financial life?
I have a running series on my site, “The Financial Pillars for us Millennials” where I discuss each of these foundational topics in detail, but here’s the outline and what I see as the most important things to master in order to get ahead financially:
- We had a huge financial crisis – now what?
- Do what you love
- Protect your income
- Sit down and make a budget
- Eliminate ‘bad debt’
- Learn to live below your means
- Pay yourself first
- Work with knowledgeable professionals
- Negotiate EVERYTHING – from a position of strength
- Diversify your portfolio
With 3 installments left to come… My contention is that if you can manage these 12 principles well, you’ll be financially rich. Then the trick is to make sure your happiness and health follow suit.
How often do you consume personal finance information? Name 3-5 of your favorites sources (books, podcasts, blogs, etc.).
I consume financial content multiple times per day – just about every day…
Am I a nerd? 100% – Yes I am.
Do I love this stuff? Also – yes.
Ashamed? Not at all.
The link above includes all of my favorite personal finance blogs and podcasts but in the interest of diversification, I’ll give you 3 additional sources:
- It’s Your Ship: Management Techniques from the Best Damn Ship in the Navy – There are so many parallels to leadership and financial success. This book is full of takeaways.
- The “Money in the Morning” podcast with Joe Saul Sehy and Bobbi Rebell – I listened to this show daily last summer and loved how (then – just Joe by himself) weaved current events into practical applications for our daily lives. Then, the addition of Bobbi really took this show over the top for me. Love it.
- Personal finance Twitter. Yep, if you follow as many PF bloggers that you can find, you’re bound to find some folks with widely different experiences and opinions than yourself. And that’s where the growth happens; when you can expand your mind and see life through a different lens. Or, at least it’ll serve as some entertainment 😉
Where are you on the path to financial freedom now?
We’re in the 3rd inning and here’s how I see it:
- Pending catastrophe, we’ve taken out all the debt we’ll need for our business and personal lives
- We’ve reduced our total outstanding debt by 10% last year – and plan to at least keep the same pace moving forward.
- I’m establishing the 401k for our business early in 2019, so we’ll be able to begin compounding on the retirement savings we have already put away.
- Our business’ profit grew by 8% last year and we have plans to at least hit that mark again this year.
We’re on the path toward financial freedom, but we’ve got a good ways to go until we’re close to achieving that goal. And because we’ve been laying this foundation for many years, it is so sweet to actually be taking steps toward real progress. Now, all that’s left, is to make it happen.
Is there any advice/encouraging words you can give those who are struggling to escape Broke Phi Broke?
While you can’t change the past, you’d be wise to learn from it. Those mistakes we’ve made as the former versions of ourselves can take two forms… They can drag you down to the depths of normalcy, or you can use them as fuel and teachable moments to help propel your financial journey moving forward.
Create your plan that best fits your life, start taking the steps you’ve prescribed in pursuit of your goals, then get out there and make it happen.
These goals aren’t going to achieve themselves. You need to earn them, day-by-day, with the micro-decisions you make in the moments where the angel on your shoulder is on break, but the devil’s barking in your ear.
In those moments, are you willing to exercise discipline and make the choices that best support your goals?
I hope so – because that’ll be the difference between achieving them… and not.
Good luck. You got this!
How can the readers contact you?
You can find me on Twitter @RealMikedUp or by heading over to my site. I love making new friends and hearing from readers, so please don’t hesitate to reach out!
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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.
Also, please subscribe below if you found his content valuable and want to continue following him as he documents his own journey from Broke to Financially Woke!