509 | Getting Personal with Personal Finance | Ginger & Kim

0:00Hi, everybody. It's Ginger, and I'm here today without Brad. Brad. Brad often talks about how this is the ultimate crowdsourced personal finance podcast. So many of the questions and ideas and strategies come from you guys, come from the community. And today's episode is in that tradition. But I want to ask, along with those hacks and analyses, can we get personal about personal finance? So today I'm interviewing Kim, a member of this community who is financially independent. And we're going to talk about how she accomplished that feat. and then I'm going to ask her all of the questions that you are dying to hear the answers to.

0:39So stay tuned and welcome to ChooseFI.

0:49Kim! Ginger! We have to start by telling the story of how we are sitting here in my living room together. By all rights, we should not be here sipping coffee on your couch. It's too bizarre. It's too bizarre. So I met Kim at the Extraordinary Life event in Vegas. And actually, I met her about the last hour that I was at the event. We ended up at the same table. And she's one of those people who you just like instantly, like in the first minute. And you know how it is like that with some people. And there's other people who on paper you have so much in common with and you know that you should be really great friends and it just doesn't work.

1:34And then there's people who you meet instantly and you want to be their friend. I felt that way about you. I was so sad when you said you had to leave. So Kim was one of those people. And we really connected in that short little time. And then I had to catch a plane. I actually got to the airport way too early. and I was like embarrassed for myself, even though no one knew that that's what had happened. I was like, why am I sitting here? But I was so worried about missing the flight. But anyway, so that's where we met. And then recently I was talking to Brad about, hey, let's do some of these more personal interviews.

2:09And I have the person that is going to be the first one up. So I told him about you and I said, okay, I'm going to contact her. We texted back and forth several times. And as you're going to hear about Kim, she is traveling all over and doing so many exciting, fun things and never in one place for too long. So she was in. I was in Utah, I think, when you reached out. And then she's like, I'm going to Seattle and blah, blah, blah. And we're just trying to nail down a date when we can have a conversation, a real conversation. So yesterday. I wrote to Ginger and said, I'm so sorry. I dropped out of contact.

2:46Now I'm ready. I'm more settled. I'm at my sister's house for a little while. I'm in Spokane. And Ginger said, Spokane? Where in Spokane? Because Kim did not know that this is where I live. And I normally live in Connecticut. So I should be on the opposite coast. But as it turns out, my sister and Ginger live on back to back streets. That's right, folks. So I walked over here this morning. It took me about a minute and a half. And now we're sitting here on Ginger's couch in our sweats drinking coffee. Yeah. So let's jump into it. In that short conversation that we had in Vegas, I learned a little bit about your journey to FI, we'll call it that.

3:32And it's interesting. You kind of coined a new phrase, surprise FI. Yes, right? Because I didn't think of myself as being on a FI journey at all. I didn't even know what FI was until somebody told me about it. And in the same conversation, looked at my finances and pointed out that I had enough. So, you know, everybody talks about their journey. And I always say like, I was just surprised by somebody looked at my money and said, you can stop. Actually, I think what he specifically said was, it's as if you've been running a marathon, but you passed the finish line way back there. You can stop running now.

4:15And so what happened after he said that? Well, that was a fascinating conversation. And he himself was about to fire as well. So I started doing all the research, right? I started, you know, looking at the blogs and listening to podcasts. And I mean, I already had the mentality. I'd read Your Money or Your Life years ago. I'd read the Rich Dad, Poor Dad book. And I'd been a Peace Corps volunteer where I'd lived on a very small amount of money each month. And I had a software job in academia. And often I would be sitting there thinking, I could go back to Tanzania and live quite comfortably for the rest of my life on the money I've saved.

4:58But it always felt like a fantasy. It didn't feel like something people in the US actually did. So I never thought about it as if it were a real possibility until suddenly I was there. Yeah. So surprise, Fi, you have enough. Okay. So how long did it take you from that moment, like that conversation to when you quit your job? Oh, it was almost two years. So from that conversation, it took me about six months before I decided to take a leave of absence from my job. And I have to say, if anybody is thinking about leaving their job, but it seems like a really big move, try the leave of absence. Because I got really lucky.

5:39I was able to do the six-month leave of absence followed by a six-month medical leave and try out what it would be like to not have a job, right? So I always tell people it was like when you play checkers and you make a move, but you keep your finger on the piece in case you decide, no, oh, I think I'm not ready for that. And you want to go back. So I was super lucky that I got to try out retirement while still having a job I could go back to. But after that first six months, I think I knew that that was, it felt good. I mean, I can't lie. It felt great. So I took another six months of really like working through the math.

6:18I made my own mathematical, like very complicated spreadsheet. Well, and that's what I did for work is I built mathematical simulations related to healthcare policy. So it was really fun to finally apply all of those skills to my own finances. And yeah, so it was at the very end of 2021. So almost two years after that initial conversation that I really quit my job. And how old were you then? I was 48. The dream. I'm loving it. I have to say, you know, I wasn't really worried about regretting the decision, but I have to say I have felt lucky and privileged and blessed every day that I wake up and I don't have to go to work.

7:02It worked. Yay. Okay. So can we get personal? Oh, bring it on. Bring it on. Okay. So what we want to know is when you quit, how much money did you have? So when I really decided to make the move and gave my boss my notice, I think I had about$1.9 million. So that was like end of 21. And then the market immediately took a downturn and hundreds of thousands of dollars kind of went poof. But I never felt like, oh my goodness, this isn't enough anymore, that I might have to go back to work. I knew that you just need to ride it out. and that's what I did. And it's come back. I mean, it depends on the day.

7:46I checked my Empower account right before this, because I knew you would ask. So right before this conversation, I have about 2.1 right now. Yeah. Okay. So how did you make that decision then? You had 1.9 and how did you make the decision about how much you were going to pull per year? Or were you even thinking that way? Well, I will say I haven't actually started pulling money out yet. I had enough in a big emergency fund. Plus, I've had between some dividend income that's not in a tax sheltered account and a little bit of income from a summer job, plus living really frugally as I do, I probably won't have to pull money for years.

8:27But I did some calculations yesterday. People talk about the 4 % rule. Again, I live pretty frugally. So I calculated that last year, I lived on about 1.4 % of my total nut, right? Yeah, I think I could pull, I don't know, 70 or 80 a year. And last year, I added up everything I spent money on and it came to about$30 ,000. So I feel pretty comfortable about my situation. I'm not worried about running out. And that's a really, it's an amazing feeling to be at a point in my life where I'm not at all worried about money anymore. Yeah. So one question I have about the surprise five that I'm sure other people are thinking, and this kind of gets to what you were saying about the big emergency fund, is for many people, the biggest chunk is in their retirement accounts that they can't access till they're 59 and a half.

9:22And you weren't planning on having a chunk outside of that. So is there money sitting that you were putting aside in just an after-tax brokerage account? Sure. So I did have some money in an after-tax brokerage account. And once I started thinking about quitting, I just also happened to be at a point in my life where I wanted to sell the condo I was living in. And also I had owned half of a, well, I co-owned a multifamily house in New Haven, Connecticut with an ex-boyfriend and he was buying that out from me. So between selling those two properties, I now had a few hundred thousand dollars that were not in a tax advantaged account.

10:05So I am not faced with the challenge of how to pull from retirement accounts before age 59, because I think I'm going to have plenty. So, I mean, I just lucked out that way. That wasn't any planning or foresight on my part. Yeah, but there was some, like you made investments that were smart and you were willing to let go of them at a certain time, that there were choices that you made that kind of got you there. That's true. That's true. I think I was making those choices regardless though. The condo was beautiful, but I bought it at a foreclosure auction, kind of intending to flip it and it never flipped, but it cost more than I was ever comfortable with even while I was working.

10:48I just didn't want to spend that much on housing. I've always just been super, super frugal. And spending that much on a condo with a water view just didn't feel right to me. It felt way too spendy. It didn't make sense for your value system. No, it didn't. It didn't. I've just always felt I get a sense of calm and security from having a pile of money in my bank account. But you know what? I think some of that comes from my first jobs out of college, I didn't love. I did engineering in school for undergrad, and I really loved learning about it in college. And then I did not enjoy my first jobs out of college.

11:28So to me, having money put away meant never having to stay in a job that I didn't like. Yeah. I know that you now have a kind of unusual housing situation. Well, I do have a nice two-bedroom apartment near a certain university in New Haven, Connecticut. it. But it's true. I have not been personally staying in that apartment for the last couple of months. Yeah. So tell us about that. Okay. So I wanted to come out and do some travels, but not necessarily like go all full out van life. So last year I had taken a trip to Arizona to do some backpacking on the Arizona trail. And when I was done, I wasn't ready to go home yet.

12:09So I went up to a car rental counter and asked if they could rent me a car that I could sleep in the back of. I had all of my backpacking stuff with me. And so I basically just set it up like a tent, but in the back of this RAV4. And I had the best time ever. First I went to Sedona, then all the national parks in Southern Utah. And if you're out hiking and seeing the sights all day, it doesn't matter if you're living in a very small vehicle. So this year, I didn't want to be tied down by trying to predict like, well, how long do I want a car for? Where am I going to want to go? Where will I want to return it?

12:45So I drove my own car, which is a small hatchback from Connecticut out here. So I joke I've been living hatchback life. But honestly, it is so much fun. It reminds me of like when you set up a fort when you're a little kid, right? And you have just enough space for you and your things. And I've loved it. Like the other morning when I drove to Seattle to pick up my sister, that last night on my own, I was nestled in the pines, like probably an hour outside of the city, and it rained all night. And I was just snugged into my little hatchback, listening to the rain on the roof and looking out at the pines in the morning, drinking my coffee.

13:27And I was happy. I was so happy. Yeah. Yeah. Right. And it speaks so much to, I think, habituation, you know, that we can get used to a lot of different ways of living. And the same thing we say, oh, well, we get so used to living in a big house. We can also get used to living in much smaller quarters. And yeah, I've done it very successfully. Yeah. You know, I was just going to say one more thing. So years ago, it was after I finished my master's degree, I took a trip to Europe with only a small backpack. And I knew I would love traveling. But the part of that I didn't realize that would so resonate with me was having everything I needed in one small bag on my back.

14:10And that I loved. The minimalism felt so right to me. I loved being able to do whatever I wanted and just be so footloose and fancy free. I am the same way. I wonder if most people are that way. I get such satisfaction from packing as light as possible. And it's even painful. Like I'm going to take two pairs of pants. Do I really need two pairs of pants? But there's something so satisfying about just taking what you need. And I suppose it's because in my normal life, there's like excess everywhere. And so it can feel so good somehow. So satisfying to just like what it actually means to be a person, maybe to be a human.

14:52To not spend time picking out your clothes in the morning, right? It's so funny because I was having these thoughts when I was packing for Vegas, right? The thing about like, do I really need two pants? I went with the two pants, but I was like, this is the crowd. It's not going to judge me if I'm just wearing the same thing every day. Nope. Nope. Yeah. Okay. Can you tell us a little bit about the numbers around your apartment? So you are renting. Is that correct? Yeah. Yeah. And that was actually a really deliberate decision for me. I had previously lived in a two-bedroom apartment in the university area.

15:28So I live right outside of Yale. I can walk to the university from where I am. And when I first moved to New Haven, it was because I got a job there. But previously, I had had a roomy two-bedroom apartment and I rented out the spare bedroom to graduate students and postdocs, a lot of people from other countries who would show up with just a couple of suitcases. So when I sold my condo and the multifamily house, I had one month to decide what I was going to do housing wise. Yeah. Right. And trust me, I thought about, well, I could go just total nomad and just get a storage unit, but I wasn't quite ready for that.

16:04I was like, I'm going to have to like dig through all my stuff and like, just to get my winter clothes. This is too complicated. So I got a two bedroom apartment near Yale. That you rented. That I'm renting. Yes. So I don't own any real estate right now, which is actually really blissful. I love not having the responsibility. So I rent a two-bedroom apartment. I think the rent is around$1450. It's a good deal. Even for New Haven, it's a very good deal. And I have a roommate who's doing a postdoc at Yale. So she's the best roommate I could ever imagine. And it's a great situation because it's in a building that has professional management.

16:43So I don't worry about it when I'm gone. Plus I have the roommate. So I don't worry about what if the roof leaks? What if the pipes break? Like I just need somebody to water the plants and I'm good. I could see it feeling very good too, that you can come back whenever and stay for however long, you know, it opens up that you don't have to have everything planned perfectly. Completely, completely. And because my share of the rent, we split the rent, it's a low enough amount of money that even if I'm not there for a couple of months at a time, I don't feel like I'm wasting a ton of money by having a big house that I'm not currently in.

17:21I have a bedroom in an apartment. And even if I'm paying the rent on that while I'm driving around, it's worth it to not have to find a sub letter or think about any of that. Yeah. I like knowing that it's there for me and it's waiting if I decide to come home. Okay. So you spent about 30 ,000 last year. I did. And we know some of that was on rent. Yes. What were your other big purchases? Well, I bought my car. Oh, this is funny, right? So I sold my 2002 two-door Ford Focus hatchback with crank windows, a stick shift with crank windows, right? It didn't even have automatic door locks, but that car lasted me forever.

18:06And I bought that car used because I was working from home. So I had done software development again for academia from home long before COVID kicked in and a lot of other people started living that lifestyle. So I had deliberately bought a very simple older car because so many days would go by at a time that I didn't even use one. But I upgraded from my older Ford Focus to a newer Ford Focus. So the bottom line is, I bought a new used car for$3 ,500. And that is my camper Focus. Every car I looked at, I would climb in the back of to try out. I think the car salesman thought I was pretty nuts. but it's the perfect camper car.

18:53And I don't care if I'm driving it over dirt roads or if it gets covered in dust. Okay. So I want to go back to some numbers, how you said one point something percent that you spent. Yeah. I think it's about 1.5%. Yeah. And so what are your feelings about that? Like, is that something that you want to change? Is that something that makes you feel extra, extra, extra safe? I mean, I haven't gone out of my way to have a very low spend. This kind of comes naturally to me because I think I am by nature a minimalist. Certainly the fact that I have a 1.5 % spend makes me smile, right? It feels so safe that something really bad would have to happen in the world for me to not have enough.

19:44But I also know that if at some point I do want to buy a house or take bigger trips or buy a bigger car to camp in, right, that I have the money to do that. Okay, let's talk about dating. Oh boy. She takes a sip of her coffee. because I think what I know is that you're not partnered right now, but that you are potentially open to it. That is correct. And that it seems like there might be extra challenges and opportunities, but also real challenges with sort of the life that you're living right now, as great as it is. So can you talk to us a little bit about what that's like? Sure, sure. Right?

20:33So yeah, after I got everything kind of settled with having left my job, I realized using online dating that I'm in a very different situation than most people my age. I mean, previously, my biggest challenge was like, I'm single and I don't have kids. And a lot of men my age are tied down by children. But now I have the freedom to go anywhere and do anything. and I've made careful choices in my life to be able to do that. Like really the thing that I've wanted to do most in my life is travel. And so there just aren't many people in the same situation and that's hard. So, I mean, I'm jazzed that there is a fire dating website, but I just haven't found many people on there.

21:23Certainly nobody in my area of the country. and yeah, it's just a, I'm just babbling now. So I can see how it presents challenges, right? Like to think about it, you're like, oh yeah, I can see that this is tricky, but what does it actually look like in your life? Like, is this a conversation that you're - Well, I mean, what I most want is a travel partner. And so I quickly changed any online personals profile to start out with my situation. You know, at first when I quit my job at age 48, I was almost a little embarrassed by it. It felt too, I don't know, too lucky, too fortunate that I almost didn't want to tell people or too self-indulgent somehow.

22:08Anyway, I'm okay with it now. I've made my peace with that. I'm very comfortable with it now. Yeah. And it's awesome that you're comfortable with it. But I think what you're getting at too is when you tell people that they're going to come to it with certain assumptions and maybe some of those assumptions feel hard? I think the people who write back to me have been mostly super nice, but not everybody's in the same situation. What I want most of all is somebody who can come travel with me, who can live the fun, exciting, adventure-filled life that I want to have. Most people aren't in the same boat.

22:48It can feel a little bit lonely, to be honest. Just the other morning, I woke up boondocked somewhere in southern Utah and had some great conversations with a person who was in a van parked next to me. And we talked about how wonderful it was to have all this freedom and be able to do whatever you want to do, but it can feel very solitary. Yeah. Are you a solitary person in general? Is there some way like you were saying, oh, I'm really a minimalist at heart. Is there some way in which you value being alone maybe more than other people or is that not true? You know, I'm definitely an introvert, you know, a friendly, outgoing introvert, but still an introvert and pretty independent.

23:31I probably have a greater tolerance for spending time by myself than a lot of people. But that said, I like having people around like I can get way too deep in my own head if I'm left alone to my own devices for too long. One thing I thought was really interesting, you said when we were in Vegas around the table, someone had said something about, because Kim does a lot of hiking, she hasn't mentioned this. And someone had said like, oh, that's like scary. You're all alone out there. And Kim said, I'm not alone. Just because I don't have a travel partner, I'm at these public places, and there are other people.

24:08And so there are ways beyond just like the safety thing. I imagine there are ways in which that also feeds that part of you that you're meeting people. Yeah, right. So I've done a lot of backpacking since I stopped working. And always there are other people out on the trails, right? And I've met such wonderful people who are out there as well. And same thing now that I'm kind of driving around and doing that, like, everybody I've met who's in a national park has been like a terrific person. I've had such great conversations with people. So I do talk with lots of people, but, you know, I'm still kind of on my own journey.

24:49And it would just be fun to share that with someone. So you asked kind of a related question to the Donegans when we were at the retreat. And so maybe you could ask that again and kind of talk us through what they said or what your evolving thoughts are on that. So at the very end of our retreat, the Donegans and Brad held an Ask Me Anything. And I raised my hand and asked of Alan and Katie Donegan, you know, how much of you two living your extraordinary life with all of the travels and the workshops and, you know, just leading this amazing lifestyle together came from having met a person who wanted to do the same things and designing your life together.

25:32And they gave a really wonderful answer, right? I think what Alan said was, they looked a little taken aback by that question, but then he gave this answer that just so wore my heart. He said, find a person that you want to live your life with, that you can't imagine being without, and then talk them into living that life with you. You'll get inspired together. He said when they met, you know, they weren't quite on the same page of what they wanted to do in life, but he found the right person for him. And now like, yeah, they live an extraordinary life together. Yeah, they do. That I want. Yeah.

26:08So speaking of the life that you want, what does your extraordinary life look like? Oh my goodness. What's next for you? So we did this incredible workshop together, like Ginger and I, about figuring out what an extraordinary life looks like for you. And we did all these exercises. And I remember thinking, oh my gosh, when I have some time alone, I so want to go think through all of this in more detail and really think about the goals and the things I want to do. And since then, I have been on the road camping in extraordinary places and backpacking. So maybe in a way, actually, while I haven't given it a lot of deep thought, I am doing right now exactly what I want to do.

26:48But to your question, I'll say, when I was working, there were so many things that I wanted to do that I told myself I couldn't do because I was working. Like, I just didn't have enough time and enough mental bandwidth. And now that I have time to do those things, they're not exactly the top things on my list. Sure, I would love to learn to play bluegrass fiddle, but is that the number one thing that I'm going to throw myself at right now? And some of that might be that a lot of those things are kind of solitary pursuits, like learning an instrument or going back and getting better at pottery or things.