Author Archives: Fervent Finance

To Buy or Not to Buy

I have always been very interested in researching residential real estate, not as an investment, but as a potential future home. Even when I was a teenager I would be excited on Fridays (before Zillow was around) because the local newspaper would release the real estate section of the paper. It would list all the past week’s transactions, plus it had all the current listings with pictures. I used to dream of being able to buy the big property on 100 acres for a million bucks. In the past couple of years Zillow has replaced Facebook as my time-suck when I’m lazy or want to procrastinate.

Now that I have been engaged to my fianceé for about a month, we have more seriously considered buying a place and have been hitting up some open houses every few weeks. We currently rent a condo that is definitely too big for us, but we pay around 20% below market for it and it gets the job done. My issue is I grew up in the country and our current residence doesn’t have a yard which definitely gets me a little down from March through November. My parents still live in the same house which they built in their 20’s, and that home and property are where some of my fondest memories exist. Helping my dad build a porch, or a closet, or fixing who knows what, mowing the lawn, cutting wood, etc., are all things I remember and enjoyed.

I now think I want something like that of my own – a garage to tinker in or a lawn to host friends and family during the summer months. I know owning a home isn’t all roses and I would have to make time for a lot of things I don’t have to do now (if I don’t want to outsource), such as mowing, clearing snow, and general outdoor maintenance, but honestly I don’t mind those things. I kind of find them enjoyable and I can zen out while doing them. I’m also pretty damn handy if I do say so myself.

Now from a financial perspective, I live in a decently lower cost of living area which helps compared to the Northeast, where I’m from. But on the downside, our area seems to have quite the hot real estate market lately and homes priced right are selling within a couple of days. Personally, I think we are ready to own as we both love the area. Financially, we have no debt and the silly online calculators tell us we can “afford” a home that is three to four times the amount we are looking to spend. We definitely won’t be stretching ourselves if we continue to earn about the same income (or even a decent amount less). For the most part, we would not have to sacrifice any of our long-term investment goals if we decided to own, which is a big plus.

Now for the downsides to ownership. I work remotely. If work ever wanted to put an end to that and I wanted to stay in my current location (where we potentially buy a house), I would most likely have to take a pretty significant pay cut. This is one of the many reasons we are looking well below what the online calculators are suggesting we can spend. I think one of our main goals (since I believe my income is a little less “sticky” than my fianceé’s) is to be able to afford the house and daily lives on her income alone, just in case I decide to pursue entrepreneurship or lose my current job.

Even if we decide not to buy for the foreseeable future, I think I will continue to have my eyes open, ready to pounce on the right place. Owning a paid off home has never been part of my financial independence plans, but it definitely sounds like those who have paid off their homes do not regret it one bit.

Do you think we are ready to buy a home? Or due to my current work situation, maybe it’s not the best idea? 

Slowing Things Down

My life has been a series of events which I have tried to speed up. Normal speed just has never cut it. First example I remember was with making money. When I was too young to have a traditional job, I enlisted my Mom to ask her network if they needed babysitting services for their kids. The day I turned 15, I went around town and figured out who would employ a 15 year-old (with actual W2 income). High school came, and college co-op and AP classes took up my time. Then college came and I wanted to get into the real world, making an adult income as soon as possible, so I graduated in three years.

In my first job out of college I thought I should have been promoted after two years, but I was passed over. So I went out and got another job offer, at which point my employer said “if you stay we’ll beat your new salary and promote you now.” I turned them down, and didn’t look back. I didn’t have time for employers who couldn’t keep up with my pace.

After two years at my new job, things were moving too slowly for me in New England. So, I applied internally for a new job, got it, and they moved me to Manhattan for the new role.

As soon as I got to Manhattan, I discovered financial independence and went 0 to 100 real quick. I had already sold my car when I moved, so I had to find other ways to lower expenses. All subscription services – canned. All the eating out turned to finding the best grocery store options. 401k maxed. Roth IRA maxed. HSA maxed. Figuring out how to engineer my life so that I could get to FI sooner was a frequent mission.

After two years in Manhattan and a life of always speeding things up (and a city that never sleeps), I decided to slow things down. I was now in a long term, long distance relationship. I had to make some choices. While my friends were all buying new cars, new houses, and having kids, I moved to the Midwest, bought a bicycle, and continue to rent.

A few weeks ago I took a week off of work and flew to New England to stay at my parents’ and catch up with family and friends. Whenever I come home, I enjoy the slower pace of life in a rural town with less than 3,000 residents. Walks in the woods. Dinners with family at my childhood home. All good stuff and a nice escape from work where hours rarely keep to 40 a week. When I was in New England, I did some thinking about how things had changed in the past year, and for the better, and boy have they.

The most obvious one to me was that I have made a conscious effort to be more deliberate with my time. Time is one of the only things that can’t be purchased. Nowadays, the things most important to me get a time slot no matter how busy life and work become. Weeks of my PTO are now set aside for visits to family and friends. Sixty to ninety minutes, four times a week are slotted for my gym routine. An hour a couple nights a week set aside for Netflix dates. Non-fiction books on topics that interest me over random cable TV shows. Dinners together are now made a priority rather than fit in around work. Getting around town now requires extra time since I try to do it on my bike as much as possible.

It turned out slowing life down is not a bad thing. It has actually IMPROVED my life. I’ve been very happy to see some folks in the financial independence community starting to float around new mantras, such as “building the life you want to live, now” and not waiting until you have a million dollars in Vanguard index funds to live the life you want. Life (and financial independence) isn’t a race. It’s okay to take the path less traveled, even if it means it’ll take longer to reach your end goal. Enjoying the journey is just as important as reaching the end goal.

Have you made a conscious effort to slow things down? Or are you more of a “life in the fast lane” type?

Time, the Ultimate Commodity

I thought I understood the concept that time is more valuable than money. The way I understood it was that time is finite and cannot be purchased (not yet at least) and money is infinite. This thought has been just lingering in the back of my mind for some time now, but I never really acted upon this knowledge. Sure I may not have gone after that higher paying job because I knew it would eat away at more of the life part of my work-life balance, but at the same time I have stayed in a career that eats up 50 plus hours of my week most weeks. That’s almost a third of the total hours we have in a week. So now two-thirds of my time is either working for someone else or sleeping. Seems like a crummy deal.

My favorite podcast lately (by far – highly recommended) is Invest Like the Best by Patrick O’Shaughnessy. I was listening to the episode where Patrick interviews Chris Cole. At the beginning of the podcast Chris said something pretty basic, yet it hit me like a ton of bricks. I’m going to paraphrase what he said:

Warren Buffet is worth 66 billion dollars and is in his late 80’s. Would you trade places with him? No one would say yes to that. Therefore your time is valued in the billions.

For whatever reason, maybe it was just the mood I was in while I was eating my turkey sandwich and listening, but this blew my mind. My brain started going in a million directions. Why aren’t I doing something I’m passionate about everyday? Why am I working for someone else? Why are golden handcuffs so hard to break? I know time is more valuable than money, but my actions make it look like I believe the opposite.

Obviously my most blatant action that goes against my belief that time is greater than money is my job. To understand why I’m still in my career I put together a quick list of reasons why, off the top of my head: income, health insurance, prestige, cultural norms, the people, money, expectations, scared to leave comfort, at times it is rewarding and challenging, free laptop and cell phone, airline and hotel status, faster time to financial independence, and money. A majority of those reasons have to do strictly with money. What’s up with that?

Now obviously those of us who haven’t reached financial independence must earn an income of some sort to survive. But without a doubt I could figure something out where I work less than 40 hours a week, cover my expenses, and save a little. I think the reasons I don’t are the fact that I want to get to financial independence so fast. I think I’m doing a good job enjoying the journey to that goal, but maybe I could be doing a better job at ignoring things like cultural norms and expectations. Maybe I should just go for it and create something that would give me back more of my time. What is the worst that could happen – I go back to a 9 to 5?

Do you think time is more valuable than money? Do you make decisions based on money even though you know time is more important? How do you condition yourself to make decisions not based on money?

How Did You Select Your College and Major?

Must be a coincidence, but lately I have been hearing about a lot of people that are going back to school in their 20’s and 30’s to get additional degrees in an effort to increase their income. Those college majors people picked when they were 17, 18, or 19 apparently aren’t bringing home the bacon or maybe their career’s earning potential isn’t in line with their goals such as getting married and buying a house, and maybe having a couple kids.

It’s pretty crazy to think that many of us make decisions at age 17 that greatly impact the rest of our careers. Unfortunately, I don’t remember high school teachers stressing picking a major that will pay the bills or going to the state school to save money.

Personally, I began thinking about college seriously as a sophomore in high school. I always did well in math and science and knew if I wanted to do well in college I should probably pick a major which encompasses one of those subjects. As I got more serious about the college hunt in my junior year, something took over my thought process – money.

I knew that I would receive some family support for college but, more likely than not, I would have to foot a majority of the bill. I purchased college guides which ranked schools by major, location, cost, projected income, and other categories to perform my analysis. I was pretty disappointed with the average wages the college guides noted for many majors. My father was a blue collar worker and never stepped foot in a college and I knew his salary was higher than a lot of the majors that my book was projecting. That made me realize that if I was going to spend four years attending college and paying for it, I would need to get a major that would make it worth it financially.

After I conducted all my research I knew it would be a good fit for me to major in a business or engineering field. Both had a math component, and both had good earning potential. I realized I enjoyed the stock market and reading about businesses a lot more than I enjoyed learning how to code (I dropped that awful class in high school) or physics. Eventually during my freshman year of college I settled on an accounting major. It was pretty evident that making six figures by age 30 or sooner was definitely doable, especially with a CPA designation. I had always done well with standardized testing, so I figured this would be a good route to take. Without ruining the surprise, majoring in accounting has been a great move for me, and I’m glad I considered the potential earning power of my degree when I was a teenager.

For those who want their college majors to pay off for them, I would select a major that does two things. First, find a major that you like (not love). Second, find a major that has a six figure earning potential within 10 years of graduating. Now if you can find a major that leads to a career you love and are passionate about, AND earns six figures, well then that is a no-brainer to go after. The last thing you want is a major that leads to a career that doesn’t pay more than a career you could have gotten without the degree, especially if you aren’t passionate about it.

How did you select your college major? Did the degree’s earning potential get factored into your decision? Did you ever go back to school because your first degree didn’t bring home the bacon?

2016 Year in Review & 2017 Goals

2016 is drawing to a close. It has been an extremely busy, yet great year. I moved to the Midwest to live with my girlfriend. I purchased a bicycle that I use all the time (until recently when the weather decided to snow everyday and not break 30 degrees). I traveled a little too much for work and weddings. And I kicked butt financially.

First let’s recap what my 2016 financial goals were when I set them last December:

  1. Max out pre-tax 401kPASS – I planned on doing this by September but actually got there in July.
  2. Max out Roth IRAPASS
  3. Max out my HSAPASS
  4. Pay off my student loansPASS – I’m debt free!
  5. Save 100% of my raise and bonusPASS – This has been going directly to my brokerage account.
  6. Contribute to my after-tax brokerage account as much as possible – PASS

As you can see I batted 1.000 financially in 2016. Moving out of Manhattan to the Midwest definitely helped me on the expense side, while busting my ass at work lead to a pretty decent increase in income. The US equity market has also been on a tear in 2016 which was icing on the cake.

The GF started cutting my hair as well and the $60 clippers I purchased paid for themselves in three haircuts. This will be a $300+ run-rate cost savings for me. Also if you want to test your relationship to see if it is cut out for the long haul, this is one way to test that REAL quick. Luckily we are still together.

Here were my 2016 non-financial goals:

  1. Get to the gym 4x per week and hit a 315# squat, 225# bench, and 405# deadliftFAIL – If I work a “normal” 40 hour week I definitely get to the gym four times in a week. But if we are traveling to visit family and friends, or going on vacation, or I’m traveling for work, this definitely doesn’t happen. Also I have been battling a little knee injury which I am just starting to get over, so my numbers aren’t near where I’d like them to be.
  2. Try and negotiate a remote work arrangement for at least six monthsPASS – I’m at seven months and going strong!
  3. Read more books in 2016Half-PASS – I have definitely read more in 2016 than any other year, but still nowhere near where I want to be. Need to prioritize this more.
  4. Travel – Half-PASS – We went on a cruise in February, but then the rest of my travel was mostly work or wedding related. While I definitely enjoy traveling to see friends and family, the weddings get in the way of the time we have to travel for pleasure. I have also realized too much personal travel is stressful for me, at least while working full-time. I think I need to tone down the travel ambition, at least while I’m working. Maybe this will change down the line once I pull the plug from working for a paycheck.

2017 financial goals:

My 2017 financial goals will remain the same as 2016, with the exception of paying off my student loans since they are gone, and include maxing out all tax advantaged accounts I have at my disposal and investing what is left into my after-tax brokerage account.

2017 non-financial goals:

  1. Get to the gym 4x per week and hit a 315# squat, 225# bench, and 405# deadlift – let’s try this again.
  2. Remain in my remote work arrangement – As long as I can keep up with my current stressful/demanding career, I know I want to do it remotely. I have no plans of moving back to metro NYC to trudging to the office everyday.
  3. Pass the Series 65 – I have been thinking about a second career a lot lately. I’ve been giving financial advice for years to family, friends, and coworkers for free and have enjoyed helping others tremendously. The Series 65 is an exam you need to pass before you can give investment advice for money.
  4. Read more – Self explanatory. I like non-fiction.
  5. Buy a mountain bike – I like my hybrid bike so much I’m going to get a mountain bike as well. There are some nice trails near me that I want shred.

Currently I’m looking forward to two weeks off of work coming up and our trip to Cancun (if anyone is going to be in Cancun the first week of January – let me know!). I hope you all had a great 2016 as well and were able to crush all your goals, financial and not. Thanks for reading in 2016 and happy holidays!

How was your 2016? What does 2017 have in store for you?

Living On One Income

Conventional wisdom says save 10% of your income and you are all set. We all know this is bogus. The only thing that will be set is your working career lasting 40 plus years. The two obvious ways to increase the amount of money you are saving is to increase your income and decrease your spending. There is an interesting life event many people go through where both of these scenarios can happen at once, and it is when a couple moves in together.

As I am in my late twenties and everyone around me is getting married or moving in with their spouse, so I have seen the common scenario. Spouse A pays $900 per month for rent and spouse B pays $900 per month, so when they move in together they get a nicer place in a better location for $1,800 per month. For most people housing is the budget category they spend the most on per month, and they miss an opportune time to decrease it. We all know what this is, it is lifestyle inflation. Couples see their income double when they move in together and start spending more right away.

I have another idea about what should happen when a couple moves in together. Try living on one income. You heard me. Pretend as if you only had one income and try to spend according to that one income. I know this can be a hard task, but hear me out as the benefits are tremendous.

Crush financial goals. In essence, living on one income is saving half of your income (if both spouses earn the same). The extra cash flow left over at the end of the month can pay down student loans, save up for a house down payment, speed up investment goals, etc. Saving half of your income means you can possibly retire in 17 years if you invest it. That is less than half the time of a conventional working career.

Remove money stress. If you’re living on one income and one person gets laid off, what happens? Your savings will go down but you will still be able to meet all of your financial obligations. You might not be paying off debt or investing in your brokerage account with the same vigor, but rent will be paid every month. You will be able to pay for groceries. No debt will be wracked up while the second spouse finds a new job. This also makes it much easier when making the decision if you want to start a family and have one spouse stay at home. Is one spouse really burnt out and needs to take a sabbatical? That’s okay since six months off won’t break the bank. Does one spouse have a passion that does not yield much of an income? It actually is now possible for one spouse to go down that path.

Take risk. If you are living on one income, you can go a period of time without the second income. Does one spouse have a great idea and the entrepreneurial itch? Instead of having to raise money from others to start your venture, maybe you can bootstrap it yourself since your spouse is able to pay all the bills. Starting that business no longer has extreme consequences if it does not work out. We know entrepreneurship is one great way to possibly earn an upper class income and it is much easier to take that risk to potentially earn that great reward if you can live on the other spouses income.

I know this isn’t possible for everyone, but I believe it is something to shoot for at a minimum. If you want to take it even one step further, try living off the income of the spouse who earns less. This will boost your savings rate above 50% and help you crush your financial goals in short order. Financial independence will now be a very achievable goal.

Could you and your spouse live on one income? If so, do you?

Don’t Leave Them Hanging

Don’t leave them hanging. Specifically don’t leave your spouse hanging financially. Recently my girlfriend introduced me to someone who recently widowed. She is in her late 60’s and is now trying to figure out life without her partner. I’m sure it is a scary time as I have lost aunts and grandparents and I know their spouses go through a lot trying to cope with their new life, which I am sure can feel lonely. What makes this situation even harder is being thrown into something you have never had to worry about in your entire life, money.

From what I have seen it is pretty common in a relationship where one spouse may fulfill a certain role and the other spouse may fulfill a different role. Maybe one spouse cooks and the other does the dishes and laundry. Maybe one spouse earns an income and the other stays home to raise a family. Maybe one spouse takes care of the home, while the other handles the money. Now this is where a big problem may lie.

Say your spouse has done the laundry for the last 35 years and you don’t know how to wash your dirty underwear. I am sure your kids or relatives or YouTube could teach you how to run a washing machine and clothes dryer in about five minutes. Don’t know how to cook? I’m sure those same friends and relatives could teach you how to bake some chicken or use a slow cooker one weekend so that you don’t starve. All the years of not washing your own clothes or cooking your own food can be remedied, quite easily I might add. The issue lies if your spouse has “taken care of” the household finances your entire life and never involved you in that process. This can leave scars that are very hard to remedy.

Back to the woman I met. Her husband took care of the money throughout their marriage. Now she is left alone trying to learn how to pay her bills, where the money is, where the debt is, and what to do with their little nest egg they have left. Why? “Because he always handled the money and I maintained the house.” People who do this might think they are helping their spouse by not letting them worry about the household’s finances, but what they are really doing is hurting them. When the person who handles the finances passes away, suddenly loans against life insurance policies make their appearance, credit card collectors start calling asking for their payment, and you are stuck mourning your loss while wondering if you need to sell the house to be able to meet your living expenses.

This is a wake up call to those who think they are helping their spouses or even children by saying “don’t worry about the money, I’ve got it.” What you are really doing is making their time without you that much harder. It might be easy to learn how to mow the lawn or vacuum, but leaving a spouse to scrape together an income in their 60’s to survive is not how it should be done. Invite them to a monthly money talk and make it fun with booze, snacks, and maybe some Frank Sinatra. Make it a team effort. Involve them from the beginning of the relationship, even if it isn’t “their thing.” This will be something that stays with them long after you are gone.

Do you and your spouse handle money as a team? If not, why not?

Upping the Emergency Fund

I have historically been against having a huge emergency fund for those who are employed and living below their means. Savings accounts earn about 1% interest nowadays and I would rather have that money invested and compounding.

Personally I have kept $10,000 in a savings account as my emergency fund. This would cover at least four months of expenses for me currently. I’ve always felt comfortable with that amount for multiple reasons. First, if I were to get laid off from my job I would get paid out severance most likely, along with accrued PTO, which would total over 12 weeks of gross pay. Second, I have no debt and don’t own a home, and therefore large unplanned cash outflows are not something I worry about. Third, I’m an accountant by trade and with my certifications and experience I would expect myself to find another job in short order (I’m an optimist) that would at a minimum cover my expenses.

Lately I’ve been feeling an itch to increase my emergency fund to $20,000 up from $10,000. Below are some reasons why I think I’ve felt that way.

Investment Opportunities – All of my net worth, with the exception of my emergency fund, is tied up in low cost index funds. At some point I’d like to diversify a little bit more. I currently have zero interest in being a landlord at this point, but maybe down the road that may change. I recently came across a real estate private investment opportunity. A friend’s in-laws had been investing through the real estate development firm for years and years and only had nice things to say. After looking at the numbers, reading the investment memorandum, and analyzing the related risk, I figured it would be something I would eventually want to look into further. Unfortunately at this point the investment carries a minimum investment of around $100,000 so I don’t think I’ll be partaking anytime soon. In the meantime I’d like to have some extra cash around for various investment opportunities, if they present themselves and I do my homework and decide they would be a good fit for my portfolio.

Starting a business – I’ve always thought I’d start a business at some point. Right now the golden handcuffs keep me concentrated on my day job, but I could see pulling the plug in the next 5 years or so and trying to make it on my own. Who knows what type of business I’d start. Maybe it would just be doing what I do now as a 1099 employee or maybe it would be something completely different. Having an extra cash buffer will help smooth the transition if I ever decide to go the self-employed route.

Home purchase – I don’t think a home purchase is in the cards anytime soon. I like the freedom of renting and with my current career it just wouldn’t make sense. But I do see a home base in my future. I’m constantly on Zillow when I have down time, so I could see myself potentially going after a great deal if it was a perfect fit for me.

Car purchase – I don’t own a car and things could change in my life that would require me to purchase one. I’d much rather have the cash on hand to do so, if I decide to purchase a vehicle. Cash gives you the upper hand when negotiating a car purchase. I’ve always wanted to try out Uber, and I can’t do that unless I have a car. But it obviously wouldn’t be a reason I would buy one.

Cash is king – Cash gives people a sense of security. I don’t think I’ll ever be kicking myself for having a little too much on hand.

Luckily with my cash flow it should only take me a few months to get my emergency fund up to $20,000. I wonder if I’ll feel satisfied when it’s at that level or I’ll want to push it to $25,000 or $30,000. Personal finance is as much about emotion as it is about numbers.

How much do you have in your emergency fund? What is your reason for having that amount (i.e. strictly numbers based, emotional reasons, etc.)?

Everyday I’m (Not) Hustlin’

It’s been a while since my last post. Summer has flown by as they all tend to do. I’ve settled into my Midwestern lifestyle quite well. The bike I purchased when I moved out here has been getting put to work at least five times per week. I’ve been trying to make it to the gym four times per week. I’ve been traveling all over the place for weddings, holidays, and family events. During travel I’ve been plowing through interesting podcasts. I’ve made a conscious effort to read a lot more. I just finished “How I Found Freedom in an Unfree World” by Harry Browne and I’m now onto the 700 plus page behemoth “Titan: The Life of John D. Rockefeller, Sr.” by Ron Chernow (I’ll report back on this one when I finish it in 2018).

My personal finances have pretty much been on auto pilot for some time now. Moving to the Midwest provided some excitement for a while as I didn’t know exactly where my expenses would fall out. But now that I’ve been here for a few months everything is kind of boring on the financial front again.

Researching personal finance, financial independence, investing, etc., has taken up a lot of my spare time in the past few years. Now I’m at a point where I am at a very comfortable spot with my financial plan. My systems are in place and everything is running like a well oiled machine. My 401k contribution is set to max early in the year, my HSA contribution is set to max, every two weeks I invest my surplus cash into Vanguard like clockwork, my debt is gone*, and I’m happy with my run-rate expenses (haven’t cut cable yet but that may be coming soon).

Even though everything looks great from 30,000 feet, I get a little stir crazy at times. I feel like I should be doing MORE. For the past couple years I have been optimizing everything related to my personal finances. Increasing income, trimming expenses, funding emergency fund, investing, paying down debt, etc., all of which took a lot of work, time, and planning. Now I read other personal finance blogs and everyone is talking about that side hustle life. Making extra money outside their normal day jobs to help them reach their financial goals faster. Honestly reading about all this hustling makes me feel a little guilty that I’m not doing more.

After months of figuring out what else I could be doing, I’ve finally come to terms with the fact that it is OKAY to not pursue a side hustle. By no means do I think it is a bad idea to have a side hustle, I actually think it’s a great idea. But for me right now, it just doesn’t make sense. My day job income has been increasing fairly rapidly as of late allowing me to reach my financial goals much faster than originally projected. Therefore the gap between my income and expenses continues to grow. I no longer have debt looming over my head. The more my day job income increases, the more significant the side hustle would have to be to make a dent in my financial goals. I’ve accepted that it’s okay to use my time outside of work to do things that don’t earn money and bring me joy instead.

Part of this FIRE journey is charting your own path without concern for what others are doing. I know I shouldn’t be comparing myself to others, but that doesn’t mean it’s an easy task. The journey itself needs to be enjoyable. I do not need to feel guilty when I’m going for a bike ride or watching Netflix with my girlfriend instead of starting a business on the side. Some may say it’s risky to have all of one’s income completely concentrated in one source. I would agree to a point, but the further your income moves away from your expenses, the less of a risk it actually is. At the end of the day hustlin’ for me would most likely have a slight positive impact on my financial picture, and a larger negative impact on my personal life. And for that reason – everyday I’m not hustlin’.

Do you ever feel guilty when you’re not leveraging your spare time to earn more income? How have you gone about dealing with it?

* – I paid off my last student loan a week ago. I am now DEBT FREE!

The Stigma of Subsidized

Everyone has been given money, services, or goods at some point in their lives. Usually the main givers are parents. In most cases they at least provide food, shelter, and clothing until the age of 18, at a minimum. In addition, some parents even provide vacations, private music lessons, college education, inheritances, house down payments, cars, investing lessons, and passed down heirlooms. Everyone’s situation is different, but does that mean any one way is “more right” or “more wrong” than the other?

I am a big fan of reddit. In the Financial Independence subreddit there are over one hundred thousand subscribers, many of which share invaluable stories and information which help thousands of other people get ahead financially and reach their FIRE goals. Some people ask advice about how to start on the path to FIRE. Others share how they FIRE’d at 35 years old. Others ask what to do with a recent windfall.

Time and time again I’m shocked at the responses people receive if they received a leg-up financially. Parents paid for college? That is cheating on the path to FIRE! Aunt Ada worked as a secretary until she was 70, always saved money, and left all her grand nieces and nephews $30,000? Well those grand nieces’ and nephews’ financial accomplishments from then on aren’t earned. I don’t know where this negativity stems from. Maybe it is jealousy or it is just internet trolls who have nothing better to do.

I honestly could care less how you got to the financial position you are in? What people have to realize is everyone’s family and upbringing are different. So inherently their financial lives are going to have different paths than yours. In my mind, someone who was taught about retirement accounts and saving half their income growing up will be much better off than the person who received a free college education and $30,000 gift coming from a family that didn’t talk about money.

From growing up in a very rural town, to working in Manhattan, to now living in the Midwest, I’ve seen all sorts of financial situations. Some friends have fully supported themselves since 16, others are in their late 20’s and receiving large amounts of parental financial support such as Manhattan apartment down payments from their parents.

Personally my parents provided the necessities (and more) until I was 22. They would of done it longer but I wanted to act like a grown up and move out on my own. My family covered a little over one year of college and I footed the rest of the bill. Does that mean I’m better than my peers who had all four years paid for by mom and dad? Do my financial accomplishments matter more? HECK NO!

I know that if anyone was to hand me a check for ANY reason, I would put a huge smile on my face and say THANK YOU! Does that make me wrong? I sure hope not.

What is your take on being subsidized financially? Do you receive all gifts (even monetary) with open arms? Why the stigma?