I’ve played around with the idea of starting this blog for a few years. A quick look at any search engine reveals that there must be hundreds, if not thousands of personal finance blogs out there.
Surely we are approaching an overload of information on personal finance, where everything to be said on this topic has already been said? I don’t think so. According to the Federal Reserve Economic Data (FRED), the most recent monthly average personal savings rate for Americans was just 6.1%. In other words, the average American put just 6.1 cents of every dollar they earned to work for them in the month of May 2019.
What gives? Are people just not smart enough to realize how easily they can cut excess expenses, beef up their savings, and achieve financial independence even if they don’t make a huge salary? Again, I don’t think so.
It comes down to the simple fact that you don’t know what you don’t know. I was never offered any sort of education related to personal finance. No wisdom passed on from my parents. No relevant classes offered in school. Everything I know about personal finance and investing I learned through self-education starting in 2010. My discovery of the FIRE (Financial Independence/Retire Early) movement in 2012 was mostly due to stumbling across it randomly while browsing the web. I think the first article I read was about someone planning to retire by 40. As I dove deeper, my attitude changed from utter disbelief, to cautious skepticism, to realizing “hey, I could actually do this myself.”
The more resources that are available for people to educate themselves about financial literacy, the better. However, I’ve noticed that many of the blogs that I used to foster my learning now post infrequently or have been dormant for years.
After reaching a milestone of $100,000 net worth at age 25 this prompted me to re-evaluate if I had some valuable input in this space. Almost exactly four years prior to hitting this milestone I had just graduated college with over $30,000 in student loan debt; needless to say my net worth started out in the negative. I didn’t get lucky with some hot stock tips and I don’t have a “get rich quick” scam to sell you. What’s more, I haven’t ever made a six figure salary. All I ever did was recognize:
1. The power of the “savings rate” and aiming to save a large percentage of your income (regardless of your actual salary).
2. The power of frugality in reducing unnecessary expenses.
3. The magic of compound interest and putting my money to work for me to generate passive income, so one day I won’t have to work for money.
4. That low-cost, broadly diversified index funds are likely your best investment when striving to build wealth.
5. The dangers of debt, our modern culture of consumerism, and other pitfalls which can prevent you from achieving financial independence.
These five subjects will be the main focus of my blog posts as I aim to share my knowledge and my journey towards financial freedom with you.