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Growing up in the early 90s, I was never taught about financial literacy. However, the building blocks were laid from a very young age when it came to understanding the importance of living below my means and not spending more money than I had. I learned that if I wanted something, I had to work for it and exchange my time for money. The idea of creating passive income, or putting my money to work was a foreign, under the radar concept for me.
I do not come from money. My first job was at 16, working at a donut shop, making $5.15 an hour. After decades of living below my means, side hustling and investing, I retired from my corporate software sales job at the age of 37. I discovered that the harder I worked, the luckier I seemed to be. Putting myself in the position to be lucky through hard work gave me a lot of opportunities that I otherwise would have never had.
My struggle with investing
I first started investing in the stock market at the end of 2007. Unfortunately, I didn’t have a crystal ball because shortly thereafter, the global economy entered into one of the worst recessions in modern history. At the time, I was working as a teller at Chase Bank seeing the panic in people's eyes as they came to withdraw their life savings in fear of losing all their money.
Despite losing most of my money in the stock market during the 2008/2009 Great Financial Crisis, I learned a valuable lesson that has stuck with me all these years. Investing is emotional.
I thought the only way to invest was to time the market. I had to only buy stocks when they were low and only sell them when they were high. Sounds easy enough, right? Unfortunately, I wasn’t that lucky when it came to timing the market. I was too fixated on timing the market instead of time in the market. At this point in my life, I felt hopeless and ready to surrender to the idea that I was playing in a rigged system. It took me many years to build up the emotional fortitude to start investing after losing so much during that challenging time.
While working and building my portfolio, I never tracked my progress or analyzed how my portfolio was performing. I wish I had a tool like Snowball Analytics when I first started investing to help me with this.
How the FIRE movement changed my life
In 2018, I found the Financial Independence, Retire Early (FIRE) movement. At the time, I worked in a high-stress environment where I knew I couldn't last until the traditional retirement age. As a result of this, I started consuming every piece of content around FIRE that I could find. I was intrigued by the idea of buying my freedom. At first, like many others, I struggled with my own internal naysayers. I would catch myself thinking that reaching FIRE was only for more fortunate people and that I could never actually achieve something like that. It felt like I was standing at the bottom of Mount Everest.
While pursuing FIRE, I learned that there is no one size fits all and that all roads lead to Rome. When most people think about FIRE, they think about living off the 4% rule, but this was not how I wanted to achieve FIRE. I was inspired by what JL Collins shares in his book, “The Simple Path To Wealth”. However, instead of focusing on investing with the total US stock market with VTSAX or the ETF version VTI and living off the 4% rule, I focused on building a dividend portfolio where I could live off the passive income. I invested primarily in low fee dividend growth index funds with a focus on keeping things simple. I now live off my dividend portfolio an no longer rely on a corporate job to pay for my living expenses.
Focusing on FIRE with dividend investing changed my life because it helped me overcome my greatest challenge - controlling my emotions. This is because I prioritize the income my investments produce, rather than looking at the share price or total value of my portfolio.
Financial independence, feeling light as a feather
In 2023, I reached what is called Barista FIRE. Barista FIRE is where you are living off your investments but also working part time at something that you enjoy. Barista FIRE has allowed me to buy back my time and focus on other passions in life. I now spend the bulk of my time with my family and creating dividend investing and financial independence content on my YouTube channel Dividend Growth Investing.
While pursuing FIRE, I would often wonder what it would finally feel like once I reached my goal. Now having achieved financial independence for 2.5 years, the best way I can describe it is feeling light as a feather.
Let me explain. Imagine you are going through life wearing a backpack and someone constantly fills that backpack with rocks. While working in various jobs to earn a living, my backpack got heavier as it felt like more rocks got added with time. But once I reached financial independence, it was as if suddenly someone took that backpack off and I was free. I was light as a feather.
It’s ok to be different
Having read thousands of comments on my YouTube channel over the years, I have found that most people are distracted with the illusion that they are going to pick that one stock at the right time and hit it big. Most people focus all of their energy on picking the right stocks and building their wealth in their brokerage. I focused my energy in a different way by building my wealth outside of my brokerage account with the intent of bringing the money into my investment account. This allowed me to automate all my investments so that they could compound and grow passively. This really helped me control my emotions and have a long-term mindset.
Planning for my financial future is complicated enough, but I don’t believe investing should be. Focusing on a dividend growth investing strategy has been one of the best decisions I’ve made when it comes to creating generational wealth for my family and reaching financial independence at the age of 37.
