Momentum Series Interview – The Financial Journeyman: Deciding To Be Free
This marks feature #22 in the Momentum Series – an interview series to share the stories of bloggers from across the personal finance community.
The goal is to showcase their story, the wins, the losses and the actionable advice that others can take value from and insights about their blogging journey. Whether that be conquering debt, maximizing career earnings, the road to financial independence or other strategies for financial and blogging success.
This week I’m excited to welcome Dave from the personal finance blog The Financial Journeyman to the Momentum Series.
On The Financial Journeyman, Dave creates high-quality content on all areas of personal finance. From saving and investing to travel hacking and smarter spending, I’m a fan of Dave’s work.
Today, Dave shares his financial journey, top money resources, what financial freedom means to him, blogging experiences and more.
If you want to connect with Dave:
Let’s get into this! Ladies and gentleman please enjoy Momentum Series Interview – The Financial Journeyman: Deciding To Be Free.
My Name is Dave from The Financial Journeyman. I am 42 years old and live in Scranton, Pa with my wife Lori and our dog Brady. My passions are saving, investing, blogging about personal finance. My interests not related to money are fishing, working out, reading true crime and mystery books, and watching football.
My blog is thefinancialjourneyman.com. I write about many different topics related to money. Some of the topics that I write about include savings, financial planning, investing, travel hacking, behavioral finance, intelligent consumerism, and careers.
I have a BS in Business Management and a MS in Organizational Management with a focus in Human Resources Management. Both degrees were earned at Misericordia University located in Dallas, Pa.
For the past 8 years, I have worked as a Human Resources Recruiter in the healthcare field. Prior to working in HR, I worked in Marketing for 4 years.
How were you first introduced to the financial independence movement/mindset? What were your expectations with money and retirement and its role in your life before that?
I discovered the financial independence movement/mindset long before it was mainstream. In 1997, I was 20 years old, working on an assembly line during the day, and attending college in the evening. The work was hard and I did not want to waste my earnings. After I saved up $1,000, my Dad told me that I should consider investing my savings. He bought me a book on investing and another book about savings. I was fascinated by the power of compound interest. My goal was to retire early and live off of my investments. In order to make that goal a reality, I learned one of easiest ways to do so was to save a high percentage of my salary and to invest in mutual funds.
Before I got into saving and investing, I would just spend the money on stupid things like new clothes or going out partying. Fortunately, I did not spend my money carelessly for a long period of time or go into debt. I was only working full time for about two years when I realized I had nothing to show for all of my hard work.
Being introduced to building wealth gave me direction. As a young man, my life was not on track. After I discovered that financial independence was possible for anyone who was willing to make a few sacrifices, it changed my life forever.
What strategies and tactics have you implemented in your to life to best set you up for financial success?
After I learned about the power of compound interest, to maximize the growth of my money, I had to feed that money making machine. I am a big believer in a high savings rate. Even when I was earning less that $30,000 per year, I lived a no frills lifestyle to save more than 30% of my earnings.
Over the past 10 years or so, both my salary and my wife’s salary has grown by more than 100%. Instead of upgrading to a brand new house or taking on debt, we kept our focus on increasing our savings rate every year. Finding ways to save more and more becomes a lifestyle.
My recipe for success has been to combine that high savings percentage with a mix of simple investments. Almost all of out money is invested in index funds. We max out our 403B accounts (401K for not-for-profit companies), Roth IRA accounts, and save money in taxable investment accounts.
By focusing on savings, I never chased performance. In my 20’s I was invested 100% in stocks. Over the years, I have added more and more fixed income investments to our portfolio.
Have you made any major financial mistakes? If so, what was the outcome and what did you learn from these mistakes?
Sure, everybody makes financial mistakes. When I was 18, I bought a used Audi. It was a total lemon and when I traded it in I lost thousands of dollars. The worst part was that when I traded it in, I still owed a few thousand dollars the loan. That was my first and last major mistake with debt.
From an investing standpoint, I never made too many major mistakes. When I started investing, I bought a few actively managed funds along with index funds. One was the Janus Worldwide fund. I bought this in 1999 prior to the dot.com bubble popping. I bought it to add international holdings to my portfolio. It was mostly made up of foreign technology stocks. It lost something like (40%) per year for 4 years.
That was when I started to go almost exclusively towards index funds. Index funds do have bad years, but it is based on the index they track. Plus they are low cost and tax efficient. Instead of trying to beat the market, I am happy with average market returns.
Is there an area or area(s) of your own personal finances that you’re still looking to better master and improve?
Right now my household savings rate is more than 50% of our earnings. I do not try to save more than that. What I do try to do is get the maximum value out of the 50% that is spent.
I have been working on reducing the amount we spend on food, utilities, and other boring expenses. That way we have more money available for spending on what we enjoy like travel or hobbies.
If you could send a memo to every 18-22 year old in North America about better managing their finances and understanding money but it could only be 3 sentences long, what would that memo be?
- Avoid consumer debt and limit good debts such has home loans.
- Start saving 15% of your salary in a target-date fund on day one of employment and increase that percentage of savings by 1% every year until you are saving 50% of your income across various retirement accounts.
- Create a budget so you have mastery over your finances and can track where your money is being directed.
What are some of the most influential resources that have shaped your money mindset or financial situation?
- The Lazy Person’s Guide to Investing
- The Millionaire Next Door
- The Bogleheads’ Guide to Investing
- How to Think About Money
There are many great blogs. I like to read about bloggers who are relevant to my personal financial situation. For example, I am planning on retiring in my early 50’s, so ESI Money and The Retirement Manifesto are two bloggers who fall into that group.
An area of personal finance that is new to me is travel hacking. I have been travel hacking for less than one year. The Financial Panther writes good content on that subject.
There are other financial bloggers who might have a different lifestyle or career from my own, but write good content about investing. Some of those bloggers include Physician on Fire and Chief Mom Officer.
Apps or Services
I use the eBay app for tracking my auctions.
Personal Capital is a great free service, but do not check it frequently enough to have the app on my phone.
When you think of freedom and financial independence what does that mean to you?
Money equals freedom and freedom equals happiness. I am not retired, but am what we in the personal finance community refer to as being financially independent. I have about 25 years worth of living expenses in savings. If I lose my job tomorrow, I don’t have to worry about paying my bills or my lifestyle declining. If my car breaks, I can pay whatever it costs to fix it or buy a new one. In other words, I do not stress too much about money.
My goal is to retire early, but I do not want to look past the blessings of being financially independent. At this stage of my life, I am living the dream. I have a good career and enjoy building wealth. If I want something, I buy it. If my current work situation changes and I get stuck with a boss who is a jerk, I simply resign and go do something different.
What are the current goals and timelines of your own journey to financial freedom?
My goal is to retire in 10 years. At that point, I will be 52 years old. It might sound old by those who are in the financial independence community, but it is very a very young age to retire. Most of the people who I know have worked well beyond that age.
As for savings, I want to keep my household savings rate around the 50% range. I am hoping to receive a 6.5% rate of return on our investments. We are projecting to have around $2,500,000 at that point.
My wife is a Public School Teacher and will receive a pension upon retirement. Since we will have income from the pension, we will not enter retirement withdrawing 4% from our investments. We will start with a 2% withdrawal rate and go from there.
We will decide on when to take Social Security in the future. That is too far off into the future to make a decision today. We are not, however, leaning towards taking it early.
Can you explain your mindset around the K.I.S.S. approach to financial independence?
When I decided that I was going to create a personal finance blog, the first thing that I did was start reading other finance blogs. Some of these blogs had a manifesto or mission. They wrote down their core beliefs.
I gave it some thought and wrote down what I believe in. Life is a process. It is important to have direction and to have faith in your plan. I sat down and wrote down a few bullet points that can be used as a map to reaching financial success.
I wrote it using short bullet points. I used understatement for a reason. It is a map. The K.I.S.S. approach is a list of principals and practices that I have learned from my own experience on the journey toward financial independence.
The most important part of planning is to have a plan that you can follow. If there is doubt when things get scary, you need to go back and create a plan that you can stick with during good times and bad. When it comes to reaching financial independence, I have found that having faith in the process to be invaluable.
If somebody has recently discovered the idea of financial independence, where do they get started? Are there some essential tips or strategies applicable to most people?
Start by writing it all down. What is your household income? How much debt do you have? Write down your monthly living expenses. How much money do you have in savings and investments?
Take a good look at where you are starting from. Don’t get overwhelmed. Reaching financial independence is a lifetime endeavor.
If you are in debt, paying off consumer debt like credit cards or car loans is the best place to start. Once that debt is paid off, all of the money that used to go towards paying off debt can be used for saving and investing.
The key to success is taking small steps. Strive to make progress. Every debt that you pay off is a victory. Every extra dollar that you can add to your savings is a success.
Financial independence is a lifestyle. It has been my lifestyle for over 21 years. I did not start out financially independent. I started out earning $300 per week and was willing to mail $100 per week to my investment account with Charles Schwab. I did the best that I was able to do with what I had to work with.
To join the financial independence community, a person does not have to be financially independent. To join, you just have to want to be financially independent and have the willingness to take whatever steps are required for your personal situation. Membership begins when the psychic change occurs.
When did you first start blogging? Was there a specific launching off point or what influenced you to go down that path?
The Financial Journeyman was launched in April of 2017. A attended a local Bogleheads Chapter Meeting in Philadelphia, Pa. I brought my friend Tim with me who I often talk about money and investing with. On our ride home, we started talking about blogs and he suggested that I start on. Tim works in IT and said that he would build a blog for me. I took him up on his offer and that was how my blog was born.
Is there a mission statement or underlying purpose to what you intend to accomplish with The Financial Journeyman?
My mission statement is: Deciding to be free: My Journey Toward Financial Independence.
The key work is “Toward”. Financial Independence is finite. Once you reach financial independence, you have to work to maintain and grow your wealth. Great fortunes are lost everyday.
Do you have any specific goals with your blog(s) over the next 12 months? What tactics are you planning to leverage to accomplish these?
My goal is to continue to grow traffic. My approach has been basic. I post about 5 times per month. My content is promoted on Twitter and by way of group blog sharing. Over the next 12 months, I am planning on doing more guest posting. I am also brainstorming a monthly round-up of what I think is the best content produced by other personal finance bloggers.
If you could recommend 3 of your blog posts for Making Momentum readers to check out, what would those be?
Any final pieces of advice or recommendations?
If you are thinking of creating a blog, do it for yourself. You don’t want to look back and one day wish that you have written. It is a wonderful process to share your thoughts and ideas with the universe.
Any special shoutouts?
I will close by thanking everyone who has taken the time to read and comment on my blog. Knowing that one person has enjoyed or has gained something from my blog keeps me moving forward.