$0 to $300k Net worth... A 10 year journey

I mark the beginning of my financial journey as April 2014. I had been teaching for a year and a half and saving more than I earned to the point where I had some extra money in my savings account gaining .5% interest. I was fortunate enough to have a co-worker that was more knowledgeable than me and he talked to me about opening up my first Roth IRA and pointed me towards the legendary Mr. Money Mustache, and the Millionaire Next Door for some light financial readings.

I can’t say that I was immediately hooked but it did get the wheels turning towards financial independence. Quite a lot has occurred in my life over the past decade. I went back to school to get my master’s degree. I bought and sold a house (even took money out of my Roth to do so). Bought a new car. Changed jobs. And have spent my summers roaming around the country camping, fishing, and hiking. Today, my personal net worth topped $300k for the first time! I write this not to flex but to try to show a real-life long term perspective on our paths to wealth and to illustrate that the snowball effect is real and slow and steady investing does payoff in the long run.

In the last 10 years I’ve learned a lot about personal finance. Not all of the information came at once and I still learn more about it each day. However, I have gotten to the point that I can put my finances on autopilot. I no longer keep a detailed budget and track every expense. I don’t spend much time researching the markets deciding what stock to pick. I know what to do with the money once I get it at this point so my views have shifted to trying to make more money to put into the system. Here are a few priorities that I had a long the way to get me to the point of having my finances on auto-pilot.

Spend less than you earn.

I was fortunate to grow up in a household where this was heavily emphasized so I never knew any other way. As I mentioned before, after a year and a half of teaching I had built up a fair amount of savings just by spending less than I was making. It’s a simple concept that can be much more challenging to execute. I was fortunate to start teaching in a small college town so a lot of my expenses were much cheaper than other places in the country. That first year is tough as you’re navigating new terrain and a new way of life. I kept things cheap and my entertainment tended to be exploring nature (Free), happy hour busch lights and dominoes pizza (Cheap). I got the second cheapest one bed-room apartment in town and drove my old Toyota Camry the 12 miles to work each day. All of these things kept my expenses down and allowed me to build up a bit of a cushion in my savings account.

2. Tracking your budget.

After grinding that first year or so I loosened up a bit on the budget and started finding things I wanted to spend my money on. I spent the next few years trying a variety of spreadsheets and budgeting apps to help curb that spending (I had graduated from happy hour Busch Lights to craft beers from my local brewery). Keeping spending down as I got raises from my employer meant I had even more money to save and invest each month. I tried mint, personal capital, YNAB and my own personal spreadsheet. All 4 of these had a role in tracking net worth and progress towards my goals. Cutting the extra stuff I didn’t like out of my budget each month lead to even more that I was able to put away. Ramit Sethi puts it better than I do, “Spend extravagantly on things you love, and cut costs mercilessly on things you don’t.” This resonated well with me now that I was a few years into my financial journey. I still wanted to live my life full of things I enjoyed but wanted to cut out those hidden costs of thing I could care less about. I am always the first one to suggest going out to eat, heading down to the brewery, or packing up and planning a 2 week vacation. However, I could really care less about what phone I have, what clothes I wear, or how expensive my home is. Tracking my budget for those years really helped establish spending patterns in my life to the point where I don’t have to think about it much anymore. I don’t use any budgeting software at this time because the years of using it established my routine, now I just stick with it.

3. Investing the Extra

With my budget habits solidified the next step is to put those extra dollars to work. Life-style creep is real. With each years raise it’s so easy to subtly spend more and more, I know I do. Now, with every raise, I adjust the amount of money that is auto-invested from my check. This means that roughly the same amount is being deposited into my bank account each month of every year even though I get a raise every year. When I never see the money I never think about spending it. So not only is my money growing with my low cost index funds but I am actively contributing more to it every year. This has been a huge step in the journey. Automate that and free up some brain space for yourself.

4. Increase Income

This has been my latest quest. Now with moving to Higher-Ed and having a more complicated source of income I am constantly looking for new duties to add and more places to invest my time that will help bring in more income. At the public school level this takes the form of extracurricular activities. Maybe you don’t want to be a coach or an advisor but every event that happens needs workers and for a lot of schools that’s a paid position. It can be getting your masters to get a pay bump. It can be a job with a different district or a new role within yours. It can be a summer or weekend job if you’re one of those crazy teachers that looks for work in the summer-time! It can be a challenge in public education to find ways to increase your income but it is definitely still possible.

It seems straightforward but that’s my simplified path these past 10 years

Spend less than your earn
Track your expenses
Invest the rest
Increase income

Put the extra money in some low-cost index funds and let the market do it’s work for you. For some insight. In the last 10 years my rate of return is 14.6% and the vast majority of my holdings are in total market index funds. Set it and forget it. My favorite kind of investing.

Hopefully this is motivation for you to set out on your own financial journey or some motivation to keep stacking away!