This guest post comes from my friend Alex Felice over at Broke Is A Choice. Alex makes the point that if I’m a financial role model, we’re all in trouble. And I mostly agree.
I never thought that anything I did was that extraordinary. I’m just a dude who had an above-average income that lived the modest life of my grandparents. I spent much less than I saved and invested the difference. Not much to see here…
Mr. 1500 As A Financial Role Model Is A National Disaster
The FIRE movement is alive, well, and growing! For the financially self-aware this is fantastic news and further proof to all those who follow the FIRE community that early retirement is possible.
A recent article featuring Carl brings another money success story into the mainstream and he certainly deserves it but while highlighting this adventure it brings to light a far more sinister problem that America faces. We are by far the richest country humanity has ever seen, and aside from problems in systemic inequality, we should be flat out embarrassed that the rest of the country thinks saving money and living below our means is newsworthy.
There Is No Secret Sauce
In the article, Carl speaks about his six-year journey from average working stiff to retiring wealthy and enjoying life. I would love to be more excited about the success story but I’m too busy being appalled that what can be done in 6 years by Carl CAN’T be done by the overwhelming majority of people in 40 years! The article specifically quotes Mindy (Carl’s wife) as saying:
There’s not much to learn: Don’t spend a lot, save some, don’t spend everything you make, invest wisely. There’s no secret sauce to it.
This advice is simple, it always works, and yet it terrifies me that someone will inevitably read this and have a profound financial awakening.
Broke Is A Choice
Carl and Mindy don’t claim to live the life of luxury, but they certainly aren’t peasants either. They live reasonable lives and have gained unlimited financial freedom and traded if for the low cost of some non-descript unnecessary luxuries. The camera crew went to their house, how bad could it be?!!? The point is this: how inflated has America’s entitlement grown for minimum standards of living that it requires so many people to constantly be broke? In America, the standard is living week-to-week with no safety net and permanent underlying stress about money. It’s not a state-run program and it’s not because we have a lousy economic model; it’s purely due to poor choices. Carl has made good choices and almost everyone else who is struggling financially is because of bad choices. Being broke all the time is a volunteer operation that people opt into not because of thorough due diligence, but because of apathy. Financial struggle in America is nothing more than volunteer wage slavery.
Where Are Our Standards?
My point of this article is not to take away from Carl, but I am disappointed that the bar has been set so low. The story isn’t how a person went from poverty to radical success, it’s a story about a regular dude who made normal financial choices in the past started making some better ones, and it worked! The story is only amazing because so many people just don’t try AT ALL. I think it’s important we don’t pat ourselves on the back too much, we need stop dancing in the end zone, and stop being so excited to meet the minimum standards. Get your shit together America, Carl shouldn’t be our role model.
Thanks Alex for the wake-up call. I’ve never met someone who didn’t have fat to cut from their budget. The time to get your financial home in order is right now.
View more of Alex’s musings over at Broke Is A Choice.
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I would have thought that frugal living was common sense. Was brought up that way- had lunches from home, did free activities, walked to school (gasp!!!!), library visits, had chores (gasp again! child labor! how dare they?!), and cleaned our house by ourselves. Hell, my mom’s had her same volvo stationwagon since I was a freshman in college. Which was *not* that long ago, thank you. Ok, it’s old enough to get a driver’s license. I just took it up a notch and try to buy most stuff used (except toilet paper. and underwear). The only thing that didn’t occur to me was that I could in fact retire before I was 70 years old. Most of this stuff is all pretty simple and common sense. Maybe not the “invest wisely” because there’s a whole different level of interpretation there- I mean my husband up till about 3 years ago would have said a wise investment is to put it in government bonds- insured and guaranteed, and not in the stock market (any chance of loss to him was too much of a chance of loss). This comment is too long- so I’m done now.
NAILED IT!
And yeah, I agree that the hardest part is to wrap your mind around what to invest in (index funds) and temperament (don’t freak out when the market drops and don’t go nuts when it’s going nuts).
But know when something is a good deal-then snatch it up! The only way to know is to be educated and know what the market cost is.
I agree with this! As I’ve embraced my own frugal changes,, I’ve realised that it doesn’t take very much at all to be on the path to FIRE.. We have a fairly new car (2015 Mazda 3) but we share it between the two of us. We love our home but it’s a unit within walking distance to a train station. Our incomes aren’t great – I’m a teacher and my partner is a graduate software engineer working it a small company close to home. We don’t earn that much (about $130,000 AUD combined) but we both have short commutes, allowing us to focus our time on things that are important to us. Our time together, our hobbies we are passionate about. Our financial position is improving incredibly, We track our net worth and it’s increasing hugely each month. I work with people who are living with their parents rent free and still can’t manage to save money, or get excited to save a few thousand so they can go on a holiday. Trust me, this disaster is not confined to US, we have it just as bad here in Australia (which is not as rich a country, but has less inequality and almost entirely free healthcare and interest free student loans).
It’s an appropriate rant –
It’s not just apathy though – it’s also ignorance… Many people think the buying & spending & keeping up with the Joneses is normal. It’s all they see and it often never occurs to them – or occurs fairly late – to wake up and take the red pill…
Humans have a strong need to fit in and be accepted… if you’re bucking the seemingly ‘normal’ spending trend, you may need to find all new friends and family relationships may become strained. It’s a common theme in FI discussions – how to tell your friends/family, what to do if they don’t understand, how to bring reluctant spouse along, etc.
Unfortunately, until we have more folks doing this, it will seem weird to many many people and Carl & others like him will be held up as a role model … though Alex’s rant should follow along with it to help reinforce WHY that’s so weird.
So true. We shouldn’t need Carl as a role model for finances. It’d free him up to be a role model for his real talent: finding a way to insert a fart joke into any conversation.
OMG! Sounds like my kind of guy.
Your article was good until you got to the “broke is a choice” part. While yes, people who grew up in relatively good school districts with at least one strong parent household along with gender and ethnicity benefits to boot may be “choosing” to stay in the rat race with poor financial choices that keep him or her perpetually living paycheck to paycheck when they do have the finanical means with some lifestyle changes to save better. But to go and argue that someone who grew up in the foster system and is perpetually living paycheck to paycheck in a minimum wage job is doing that by choice is so far removed from reality.
I agree with you in that we all as a nation must make wise decisions about our finances and we should live frugal lives. But in the grand scheme of things, some people are born with some great benefits that many of us who grew up with those benefits don’t even recognize (it bore the phrase, “born on third base when we thought we hit a triple”). And for some people, without outside help of some kind, they will continue to live paycheck to paycheck and no amount of skrimping or living even more frugally will make a difference in their poverty because they are poorer than most of us will ever experience in our lives..
This article is spot on. Broke is a choice! The decisions that affect our lives don’t start with our first paycheck.
In high school, you can decide to smoke that joint and become a “pot head”, letting your free education go down the tubes. You can have unprotected sex, get pregnant, or become a teenage father. Where is your future? Our lives are full of choices that can affect our future.
On the flip side, Do you save all your birthday money? Get a job in high school and save? Or, GASP! Make your education a priority to get into the best college?
From the time they were young, I have told my daughters to always consider their choices in life. One wrong choice can affect the outcome of their lives down the road.
My cousin had a very good job working as a financial planner for a national bank. One day he made the decision to steal a couple hundred bucks from an elderly client. He didn’t stop until he was caught $83,000 later. After his jail time, divorce, and struggle to find a job, he’s living paycheck to paycheck, as he pays the money back.
A single choice. Life in chaos.
BTW, Carl you have been my role model since we first met.
This was going to be my comment too (but stated better than I would have. Being broke is a choice for some, not all.
Warren Buffett always says that he won the “ovarian lottery,” meaning that he was born to good parents and that made a massive difference in his life. I’ve thought about this often because my parents struggled. As a kid, I spent way too many hours worrying if my dad was going to return home alive from one of his drinking adventures. Some of my childhood memories are terrible.
On the other hand, I was born a male and had good teachers. My parents instilled a work ethic in me. We didn’t live in shelters. I was born in a first-world country.
Anyone can make something from themselves, but it won’t be as easy for some of us.
I disagree with the privilege argument based on my own upbringing. My parents had four daughters (I’m the third), so myself and my sisters all have the same start in life (nature and nurture). My dad was an abusive alcoholic and my mom became a single mom when we were all in elementary school. From then on it was free school lunch, food stamps, and mom working nights at the gas station (looking back I think the gas station was a cover for the strip club).
All three of my sisters smoked cigarettes and pot in MIDDLE SCHOOL, and all three of them became teen moms, and only one of them graduated high school. Myself? I abstained from the illegal stuff, avoided sex until I was on birth control, did my homework and actually showed up at school. I got a full scholarship for undergrad and went to graduate school at Stanford. Now I’m 34 years old and one more year until FIRE. All of my sisters have been divorced, none of their children have the same father, and they all still smoke cigarettes and weed every day while going on and off of food stamps and WIC depending on if their job pays under the table (all three have also been strippers). I am happily married with a child, and own my own engineering firm.
How does the privilege argument explain my success, when my sisters were given the exact same start in life, we all attended the same public schools and took the bus, and we all had the same obstacles & conflicts with a tumultuous home life? When people say privilege to me, it is insulting and diminishes all the hard work and not-idiotic choices I made for the last 34 years.
“When people say privilege to me, it is insulting and diminishes all the hard work and not-idiotic choices I made for the last 34 years.”
Wow. Interesting. And I’ve had the same thought because parts of my childhood, while not as bad as yours, were still pretty shitty.
It is easier if you grow up in a stable home, but that doesn’t necessarily guarantee success. I grew up in a town that was half poor and half rich. My home was in the former but I had many friends in the better part of town. The interesting thing is that many of the kids from solid homes turned out poorly. Some got into drugs and one even hung himself in his parents’ basement.
Of course, many of the kids from the poor side didn’t turn out well either. One is in the Supermax prison for a heinous murder: https://www.1500days.com/zen-and-the-art-of-mind-maintenance-i-dont-want-the-world-to-change-me/
I think there is a lot to the nature part of the “nature versus nurture” debate. My older sister was raised just like me, but turned out drastically different too.
In any case, congratulations on your incredible success in life and escaping a very difficult situation.
Interesting that you should mention this… I was just putting together a post about emulating financial role models.
To a certain extent they’re necessary — to provide people with good role models for achieving financial success. Schools certainly doing our kids any favors when it comes to financial education.
So I wouldn’t go so far as to call Carl a national disaster. People do find role models useful, and that’s partly why I think financial blogs like Carl’s or mine are so successful.
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Carl is The Man! And while we can debate whether or not how much where you start truly impacts where you end up (An Everlast song comes to mind here), discipline is a key factor in all of our lives in the FI community. I’m grateful for finding you guys a couple of years ago and the amazing impact you’ve had on me and my family. Thank you!
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The section ‘broke is a choice’ made me think of an ex boyfriend. He generally made okay money, but seemed to always run out. I am a saver, so it just never made sense to me. I know the gas (heat) bill will be higher in the winter, so I make sure I budget (or save) for that. He even let a 401k be disbursed instead of rolling it over. I shudder to think what my financial life would be like if we were still together. I have grown so much, personally, financially, professionally (and a bunch of other -allys I probably can’t name) that I don’t think I would have or could have been bold enough to do if I was still with him.
Thanks Carl,for being a model of what’s possible (including fart jokes), & having this platform to feature guest posters like Alex.
I have come to realize that people usually live the standard set for themselves. If you choose to live a peasant life, that is what you will experience. On the other hand, if you choose to live a prosperous life, nature have a way of making it a reality as you will just be looking for opportunity that will help you make it to pass.
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