While Making Less Than $100K A Year

Ben Le Fort
Oct 19, 2018 · 6 min read
A picture of a person walking into the sunset and holding their hands up in triumph
A picture of a person walking into the sunset and holding their hands up in triumph
“person raising both hands doing peace sign hand gesture on road during daytime” by Wesley Eland on Unsplash

Meet Joel, he is a blogger from Financial 180 and is recently retired, in his early 30’s. Today I want to review his story because I think it is completely relatable to many middle and upper-middle-class families. Joel and his wife went from $10,000 in credit card debt and a negative savings rate to financial independence in 5-years, while they each made less than $100,000 per year.

Making Money Mistakes

Joel and his wife graduated college in 2007 both getting solid entry-level jobs in software engineering. They felt that the “adult” thing to do would be to buy a house. In Florida. In 2007. You certainly can’t blame them for market timing (how would the know what was about to happen?), but this might have been the worst time to buy a house in Florida in the entire history of Florida. It was one of the real estate markets that were hit the hardest by the financial crisis. They bought in at the peak of the market, only to see the value nose dive within months of them taking possession.

So we can chalk that up to a mistake that was difficult to see coming. A mistake that was less difficult to see coming was deciding that the next “adult thing” to do would be to spend tons of money filling their new home up with furniture. This is important to highlight because it is so relatable to millions of families. You get your first “real job” and by that, I mean a job where you are earning above the median income, it can be so tempting to say to yourself “I worked hard to get here, I deserve a lifestyle that matches my new income”.

As tempting as it might be to “level up your lifestyle as you level up your income”, we refer to that in the personal finance world as lifestyle inflation, and it is a sure-fire way to stay on the wealth-building treadmill. As Joel pointed out in an interview on the Bigger Pockets Money Podcast, If he and his wife had just decided to rent for a year out of college, they would have bought in at the bottom of the market rather than the top of the market. It pays huge dividends to get control of your spending and finances before trying to “move to the next level”.

Joel described him and his wife as living an “unsustainable lifestyle” for the first 6 years out of college. The best illustration of this lifestyle was the fact that they got married in Disneyland, which he described as amazing (DUH!) but expensive (DOUBLE DUH!). Weddings are expensive, no matter where you have them and the nice thing about weddings is that if you do it right, you only have one per lifetime.

The more “unsustainable” choices came down to their day to day choices about how they spent their money. At the height of their earning Joel and his wife were each earning close to $100,000 per year, which makes for a very nice household income. This income allowed them to stay afloat and temporarily fund an expensive lifestyle. Some of the indulgent expenses that they consumed included;

  • Eating out almost every day
  • paying for food meal kit services
  • paying for water delivery services
  • Having two cars
  • Joel constantly buying electronic gadgets at Bestbuy
  • His wife falling into the “target black hole” (I love that term by the way) and spending in the range of $600 per month at big box stores.

All of these indulgences add up pretty quick, and even that high household income does not provide enough cash to pay for everything. By 2012 Joel and his wife had spent over $100,000 on “stuff” and accumulated $10,000 in credit card debt. At the time they thought that this level of spending was how you “get the most out of life”.

Then their whole perspective changed when Joel’s wife was in a car accident Thankfully his wife was not seriously injured. They began to realize that spending $100,000 per year was not providing fulfillment in their life. They became aware of the Financial Independence Retire Early (F.I.R.E) movement and started reading blogs like Mr. Money Mustache. They dedicated themselves to taking complete control of their financial lives and were willing to take the action required to achieve Financial Independence.

The Financial 180

There is a reason Joel’s blog is called “FI 180”, they literally did a 180 in their financial lives. Joel’s wife got a $10,000 insurance payout for the value of the car, which was totaled in the accident. If they had not changed their outlook on money, they probably would have used that $10,000 to buy another car. Instead, they did the complete opposite.

They decided to become a single-car household and use that $10,000 to open an investing account with Vanguard, investing in low-cost Index Funds (regular readers of this publication may be noticing a theme of the F.I.R.E community embracing index funds). This initial investment would be the catalyst to their journey to financial independence. Once you become an investor, it becomes so much more natural to keep investing. In one decision they went from “non-investor” to “investor”, which sounds too obvious to bother mentioning, but taking that first step and “getting off the sidelines” is huge in the journey to build wealth.

Joel and his wife began reading different articles and blogs on personal finance to each other and discussing how they could apply the same concepts to their life. This is something I seem to keep coming back to, if you want your finances and your marriage to thrive, you and your spouse need to be on the same page about money.

Once they immersed themselves in the F.I.R.E community they slowly started cutting back their spending and increasing their investment contributions.

First to go was Joel’s vice of spending money on gadgets and electronics.

Then they cut the cord on the cable.

They reduced their internet speed and thus reduced their bill.

then the big one, they learned how to cook! This meant no more giant tabs on eating out or ordering meal kits. I can't stress how easily you can save a ton of money by cooking all (or most) of your meals at home. It costs five times more to eat out at restaurants and three times more to order pre-made meal kits compared to the price of the same meal cooked at home.

These changes were not all at once, it takes time to change your habits. One year after the accident they cut their spending from over $100,000 to over $60,000. A year after that they cut their spending even further down to $40,000. Eventually, they went a bit overboard and hit an 85% savings rate. Meaning they were saving and investing 85% of their take-home pay. Even in the F.I.R.E community, this is extreme.

Cutting their spending by such extreme levels provided them clarity on what they value spending money on. For example, Joel describes his wife as saying they’ve gone too far when they canceled the Netflix account. The $10 or $11 per month had value to them. If you are going to sustain a more frugal lifestyle for the long term it’s crucial to know what you value, and what you don’t. Being frugal should not mean you are miserable.

Eventually, they found their “sweet spot” where they were spending a much more sustainable $30,000 per year. They were able to cut $70,000 of spending out of their annual spending and jacked up their investing contributions.

By November 2017, Joel hit “Financial Independence”. He was able to cover all his living expenses through the passive income provided by his investments. This allowed him to retire from a job that was bringing him more and more stress. Joel’s goal today is not to do nothing but to do work that he enjoys, on his schedule. That is exactly what he does over at his blog.


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This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions

Making of a Millionaire

Stories about money, personal finance and the path to financial indepndence.

Ben Le Fort

Written by

Sharing my journey to financial independence. For freelance inquiries reach me at benlefort1988@gmail.com

Making of a Millionaire

Stories about money, personal finance and the path to financial indepndence.

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