#075 | A teacher’s mid-life financial turnaround with Tom from What the FI

December 21, 2020

Episode Summary:

 

In this week’s episode, we’re joined by Tom from What the FI Guy.  Tom is a teacher, a father, a recently turned real-estate investor, an avid reader, and many more things.  Tom reached a point of frustration in his 40s, and has made a complete 180 in his financial life.  In three years, he went from living paycheck to paycheck and living beyond his means to owning a rental property, paying off all debt except mortgages, and building up a $40K+ cash reserve.  Tom’s story is inspirational and approachable, and he shares the journey he went on to turn around his financial life.  He has a blog titled What the FI and you can also find him on Instagram @whatthefiguy.  

 

Episode Notes:

 

In this discussion we Tom we cover a number of topics, including:

 

  • Tom has been a teacher in Chicago public schools for 25 years.
  • He grew up in a middle class household, but he never really learned how money worked as a child.  They did not talk about money a lot.  When they couldn’t afford something, they just didn’t buy things.  They didn’t talk about investing or how money can work for you.  He was told to find a job with a good pension to take care of him.  He didn’t realize how money works until his mid-40s.
  • He eventually noticed he wasn’t really paying attention and he was spending all that he was earning.  They had racked up credit card bills and were living paycheck to paycheck.  They were leasing cars, using raises to buy more stuff, and one day they just got fed up with things.
  • Lifestyle creep.  They were aware of the pain of not being able to keep up and not do as much as their friends and family members are doing as their…embarrassment from falling into debt.  
  • One of the first times he was really aware was one summer when he didn’t have enough money to make it through the summer when he’s not receiving a paycheck as a teacher.
  • Major turning point.. He was miserable and he didn’t know why.  They felt out of control.  They were counting on these future raises, but the lifestyle creep was killing them.  
  • He started watching all of these youtube videos and reading books and learned so much about better ways of managing their finances and living.  
  • Turning their finances around has improved their relationship and happiness levels.  The best part is that they are communicating more, setting goals together,etc.  
  • They learned about zero-based budgeting and attached their budget with a vengeance.  
  • Within 3 years, he went from barely $300 left in their budget each month to $43K in cash, all of their debt paid off except for mortgages, and drastically changing their approach and relationship with money.  Some of the ways they cut back include cutting back XM radio, magazine subscriptions, and changing SUV leases to more affordable cars.  
  • Tom has one rental property, and he shares how not to get into the rental property market.  He would not recommend his approach to others, but it’s worked out OK for him in the end. 
  • Tom has read a lot of books, and his favorite recommendations are in the show links below.
  • Tom shows that you can live within your means and achieve financial freedom on a teacher’s salary.  It reminds us that having your finances in order is achievable at most salary levels.  
  • Tom believes you can better control your finances if you just take the time to learn this stuff.  
  • Tom shares some of the work he’s doing to improve transparency in the 403-B programs offered to teachers in his area.  
  • Tom shares what he is now teaching his kids about money.  

 

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Show References

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