Hi all – I’m Liz, the Chief Mom Officer, and I’m so happy my friend Physician on FIRE has invited me over to the site today to talk all about one of my favorite topics – overcoming challenges on the way to Financial Independence (FI). In fact I like to say I’ve been pursuing it for 20 years now.
I’ve been an avid fan of all things personal finance and investing since I was a teenager, reading The Wealthy Barber at my local library at sixteen. That may have given me some significant advantages in being financially smart, but life has thrown a number of obstacles in my way. Despite them, I’ve never given up on the financial freedom journey – and I never will. When life knocks you down, you just need to get right back up again and keep on going.
Today I’m an MBA, breadwinner (sole income earner) and mother of three, earning a high income in Information Technology at a very large company. I’m going to have my mortgage paid off by 40 (just like PoF), and I’ll reach financial independence sometime in my early 40’s, while fully funding three kids’ college. I also run a moderately successful website, Chief Mom Officer. Looking at this information, perhaps you would think I’m pretty darned successful.
But it hasn’t been easy.
Playing The Hand You’re Dealt
What do I mean by that?
Let me tell you a story.
Let’s say there’s a young woman – very bright but got in some trouble in high school. She didn’t do overly well there, and when it comes time for college, she’s going to have to pay her own way.
So she gets a full-time job with tuition reimbursement, working 40 hours per week at a large company’s call center earning $22k per year while going full time to community college evenings and weekends. When finished with two years there, she switches over to the inexpensive in-state public college.
Since she’s still working full time while going to school full time, there are no fancy internships or fun summers abroad like her classmates. She’s married at 21, and in her last semester of college they find out that they’re expecting a baby. So two months after graduation, they welcome their oldest son into the world.
Since they can’t afford daycare, this couple goes through quite a few different working arrangements. At first, he works third shift at his factory while she works a normal work day at the bottom rungs of IT at that same large company. But that results in him getting almost no sleep.
So he leaves the factory for a few years and works part-time renovating old apartments into condos. It’s approaching the top of the housing market (although no one knows it), so there’s a lot of demand for this work. That eventually ends, and he goes back to full-time work – but second shift now, which helps with sleep.
She’s also working her way up the IT career ladder at her corporation, doing pretty well now. They sell the condo she purchased at 20 instead of renting an apartment, and use the proceeds to buy a house.
They have another son a few years later. Shortly after she starts her MBA to fulfill a long-held dream of getting a “better education” than she did originally, and to seek an even better future. During statistics class, she gets a text message from her husband that his factory is closing. It’s 2009, the Great Recession, and jobs aren’t exactly easy to come by. So he stays at home with the boys while she continues to work and get that MBA.
In 2011, Everything Went To Hell
You see, the husband, 37 at the time, has had several diverticulitis attacks over the past few years. The doctors recommend a surgery called a laparoscopic partial sigmoid colectomy, which removes the part of the intestine causing issues. The surgeon describes the operation as a relatively simple one, with a few days recovery in the hospital, and a 99% chance of going just fine.
But nothing goes right.
First, it can’t be done laparoscopically, because apparently there’s internal damage due to a prior intestinal rupture. The surgeon refers to it as the “worst non-emergency surgery” she’s ever seen.
After a few days in the hospital, he’s not getting better. In fact, he’s getting worse.
Eventually the hospital does a CT scan and discovers that one of the staples holding the intestine together – isn’t. For those not in the medical field, that’s a really, really bad thing.
He goes in immediately for emergency surgery, and afterward, is rushed to the ICU. His blood pressure and oxygen levels crashed. He’s in septic shock, a deadly runaway reaction to infection, which often results in multiple organ dysfunction syndrome (organ failure) and death.
Now this 32-year old woman is not only working full time and pursuing an MBA, but also needs to arrange for childcare for their two kids and provide care for her husband.
He’ll remain in the ICU, in a coma and on a ventilator, for a week. After waking up, there are months — and years — of more medical issues. He spends a month away from home in the hospital and short-term rehabilitation. After he’s home, there’s at-home nursing care, extensive physical therapy and another surgery – an ileostomy reversal six months later.
Since this all happened, he hasn’t been able to work full time. After a short stint in a part-time job, he discovers his abdominal wall has totally disintegrated – shortly after they learn they’re expecting their third child. This led to the need for a seven-hour long total abdominal wall reconstruction, and other few months recovery when that child is six months old.
Let me ask – what kind of financial future would think this couple has? Maybe they were foreclosed on when he lost his job in the Great Recession. Or they’re buried under massive medical and other debt. He can’t work, she needs to support the family herself, they have three kids – perhaps they’re collecting disability and living paycheck to paycheck.
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Seeking Financial Freedom Saves You From A Sad Future
I’m sure you’ve guessed by now that this is my story.
It was after reading The Wealthy Barber as a teenager that I realized you didn’t need a tremendous income to become wealthy. You needed discipline, wisdom, determination, and time.
So I started saving and investing for retirement with my teenage job at a local restaurant and amusement park, then in that $22k per year job. I understood that small amounts saved, starting at an early age, would have huge compounding power years down the line. So I always saved and invested 10-20% of my income, even when it was low.
When my son was born, despite just finishing college myself, I started a college fund for him with the dream that one day he would not have to go through what I did.
Remember in the story I mentioned the sale of that condo? Well, I knew from my financial reading that owning was usually better than renting if you were going to stay in the same location for a while. I made $65k on the sale of that condo, rather than paying rent for six years. It enabled us to move into a house that would fit our family comfortably no matter how many kids we had.
When my husband lost his job, we still saved and invested. After he became ill, we were able to take the hit to income and huge expenses simply by ratcheting down retirement to the level of the match (6%) and stopping other saving/investing for a year.
It was after that horrible medical event that I became determined to become financially independent as soon as possible, rather than in our 50’s or 60’s as I had originally thought. I got rid of the small amount of “normal” debt we had accumulated over the years and turbocharged our savings and investments.
Over the years my income has increased from that $22k per year in my first full time job to nearly ten times as much today. After having lived at a lower income level for a long time, we have no desire to ratchet up lifestyle. My husband doesn’t collect social security disability or anything like that, we simply live on part of my income.
Even though we have three kids we drive cars, not SUV’s, and both are owned free and clear (mine has 114k miles on it). We still live in the same house we bought all those years ago, even though our family now consists of two adults, a teenager, a ten-year old and a toddler. The house will be mortgage free before I’m 40, and we’ll likely reach financial independence shortly thereafter.
I’m not alone in the financial community in overcoming obstacles on the path to a brighter financial future. Not that long ago, I published the story of my friend Dave the FI Journeyman, who had a similar start to mine in community college. And there’s the Gen Y Finance Guy, who left a comment on one of my posts after reading Dave’s story. He’s gone from a welfare upbringing with drug addict parents, to the C-suite.
Even though my own journey has been a difficult one, I don’t waste my time and energy complaining about it, or being envious of others. Whenever I see financially independent folks featured in the traditional media, there’s a chorus of comments about how they “had it easy”. Of course it’s easier to achieve financial freedom if you don’t have kids, have one kid instead of three, went to a prestigious school, always had a high paying job, or whatever other advantage you can think of.
Some of us are dealt worse hands than others. Wasting time and energy complaining about the hand we’ve been dealt, rather than simply playing it, keeps us from financial freedom and success.
When you’re pursuing financial freedom, the most important parts are to (1) start where you are, wherever that is and (2) to not give up. If you always live below your means and save and invest, even at a low income, you will be successful. Even if you’re derailed from the journey for a while, being on this kind of financial path brings tremendous rewards and opportunities. Especially when things go wrong.
So, as Dory the fish would say, “Just keep swimming.”
Thanks again to my friend PoF for having me on the site to share my story.
[PoF: Thank you for sharing your story, CMO. It’s one I was somewhat familiar with, having been a follower of your blog for most of its existence. I didn’t know all the details, though, and it’s remarkable that you’ve been through all this and have emerged in a better financial position than many who have been dealt much more favorable hands.]