How our family is saving ~ 80% of income

Boat2Riches

English - February 14, 2020 15:43 - 38 minutes - 70.3 MB
Self-Improvement Education Business Investing buildingwealth financialgoals financialindependence financialstability immigrantcommunity immigrantfinance immigrants immigrantsuccess makemoney personalfinance Homepage Download Google Podcasts Overcast Castro Pocket Casts RSS feed

Previous Episode: 2. How Growing up Poor made me a Millionaire

Next Episode: 4. Real Estate Investment Strategy for Immigrants

Juan is from Bogota,
Colombia. He played tennis all his life, as his dad is a coach back home. In
fact, tennis is what enabled Juan to come to the U.S. when he was 18 years of
age, to study in college on an athletic scholarship. At the time, Juan spoke no
English. He finished college, stayed in the U.S. for grad school, and is now
working as a CPA in a tax firm.

Tennis brings Juan to the U.S.

Juan shares what it took to obtain the athletic scholarship that allowed him to attend college for free in the U.S. He didn’t know much about America when he first arrived in South Carolina. He genuinely felt lost. Juan grew homesick and was not yet fully aware of all the benefits that the U.S. could offer him in the long run. He traveled back to Colombia for frequent visits and, with time, he felt less and less homesick.

Learning
English

When it comes to learning English, Juan initially focused on learning just enough of the language to obtain “pass scores” on standardized tests.

After his first semester in college, one of his teachers pulled Juan aside and gave him some tough love. She recognized his potential, and told him that he must take school more seriously. Juan started recording his classes and re-listened to them often to fully grasp the course material.

Living all by himself
in the middle of South Carolina, in a place where a lot of people didn’t speak
Spanish, Juan was quickly forced to assimilate. After his first year in America,
his language skills drastically improved. He continues to work on his English
to this day.

Choosing
a career in Finance

Juan chose Business
Administration as his major. After college he struggled to get a job, so he
went directly into graduate school for an MBA. He paid for the MBA with help of
academic scholarships, thanks to good grades and a high GMAT score.

After graduate
school, Juan got a job with PepsiCo. He didn’t find it terribly exciting and
later accepted a tennis-related job in Miami. After that opportunity fell
apart, Juan moved back to North Carolina with his long-term girlfriend and
enrolled for another master’s degree in Accounting.

His new degree from a
far more prestigious university made it easier to find employment since
companies were willing to sponsor his work visa. Juan found a job with a great
company and he’s been with them ever since.

Discovering the Financial Independence Movement

Juan has always been frugal and debt averse. He observed how his wife’s colleagues, who established themselves with great jobs and were being paid higher salaries, were struggling financially and really stressed about money. In 2015, Juan and his girlfriend (now wife) were living on a single income, and it felt like they had a better handle on their personal finance than most working professionals. He started his own website to spread financial literacy.

That’s when he learned about Mr. Money Mustache and his MMM blog. The concept of financial independence resonated for Juan and inspired him to supercharge his savings to realize the dream of the “ultimate freedom – time freedom”.

Their 10-year
plan

Juan just turned 30.
He is married and raising a year-old daughter. The family of three presently
lives in Raleigh, North Carolina.

Juan uses his finance
and accounting background to be strategic and very specific when it comes to his
journey to “financial independence retirement early” (FIRE). On his blog, he
shares his family’s 10-year plan, and posts quarterly expense report updates.

Their original plan
was to save around $60-70K per year, for the next 10 years. After that, using
the 4% annual withdrawal rule (he is going with 3.5% to be conservative), they
would be able to cover their living expenses. Their goal is to bring $30K of
passive income annually, so they are aiming for an $850K portfolio. They invest
into index funds due to low costs and their simplicity.

Since he instituted his
plan, the family went through many changes: they both received promotions at
work; they had a daughter and purchased a home. They had to adjust but they are
still on track to achieve their objective by the end of 2024.

How do
they keep expenses low?

Housing – live in a relatively smaller place, close to work. Transportation – minimal driving, buy used cars with cash, bike to work whenever possible. Food – cook at home vs. eat at restaurants. Go out maybe once a week, so it feels like a special treat.

What’s
next?

Now that Juan and his
wife received their Green Cards, it feels like another level of freedom. They
can pursue side hustles, which were previously not an option due to work visa
restrictions.

Long term, their ideal
life might be back in Colombia, closer to family and friends.

Advice
for Fellow Immigrants

“If there is a visa restriction, stay competitive: focus on studying and developing skills; bring value to an employer so they are willing to sponsor you”

“Stay true to your values, don’t buy into consumerism and keeping up with the Jones’s”

From the tax perspective:

Know residency rules for tax purposes. Max out 401K to receive a tax deduction. Have an exit plan for your investments, if you might need to leave the U.S.

Resources
Mentioned

Books (affiliate links):

Simple Path to Wealth

Work Optional

Blogs:

Mr. Money Mustache https://www.mrmoneymustache.com/

RootofGood https://rootofgood.com/

Mad Fientist https://www.madfientist.com/

GoGurryCraker http://www.gocurrycracker.com/

Millenial Revolution https://www.millennial-revolution.com/

JL Collins https://jlcollinsnh.com/

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