2931: [Part 1] You Don’t Have to Make $100,000 a Year to Retire Early by Mrs. 1500 of 1500 Days on Frugality

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[00:01:00] Good tomorrow starts with a good night's sleep. Just search for good sleep in your podcast app, and be sure to pick the one from Optimal Living Daily. This is Optimal Finance Daily. You don't have to make $100,000 a year to retire early. Part 1 by Mrs. 1500 of 1500days.com. And I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:25] I have a little bit of a little bit of a problem. I have to make a good job. I have to make a good sleep. I have a good sleep in your life. They're not going to be able to make a good sleep. But you don't have to make $100,000 a year to retire early. Part 1 by Mrs. 1500 of 1500days.com.

[00:01:50] Mrs. 1500 here. When Mr. 1500 first talked to me about the concept of retiring early,

[00:01:57] I was intrigued. Having already retired myself to stay at home with the little 1500s,

[00:02:04] I thought it was a good idea. He told me about some blogs he had been reading,

[00:02:09] Mr. Money Mustache, Retire by 40, Brave New Life, etc. So I started reading them to see what they

[00:02:17] suggested. I'm not going to eat rice and beans every day for the rest of my life just to retire

[00:02:22] early. I have to warn you, this is a long post. Sorry, but I really feel these things need to be

[00:02:29] said. If you can get one money-saving idea out of this, I will feel accomplished. While obviously

[00:02:36] we have embraced the idea, I felt like these guys, Mr. 1500 included, had an unfair advantage over the

[00:02:43] rest of us worker bees. They all are highly paid computer guys, or were before retiring,

[00:02:50] and therefore can easily afford to do this. In my working past, I didn't make a lot of money.

[00:02:57] I topped out around 38 grand a year. Easy for you guys to say retire early, you make three times as

[00:03:04] much as I do. But then I really started thinking about my life pre-marriage. I bought a condo because

[00:03:10] I couldn't stand to pay rent, giving that money away and not having anything to show for it at

[00:03:16] the end of the year. The mortgage on that two-bedroom condo was $425 per month, $15 more than my one-bedroom

[00:03:24] apartment cost me to rent. And it was mine. I drove a very old but extremely reliable Toyota.

[00:03:31] I brought my lunch to work and ate breakfast and dinner at home, most of the time. I still had fun.

[00:03:38] I went to parties at equally poor or frugal friends' houses, where I eventually met Mr. 1500.

[00:03:45] Went to inexpensive plays downtown and attended school. Here's a bit of advice. Don't major in

[00:03:52] fashion design. I had two jobs up until I was just about married. This was really beneficial to my

[00:03:59] finances in two ways. First, the obvious. It brought money in. But second, and equally important,

[00:04:06] when I was working, I wasn't spending money. I wasn't out drinking. I was serving those drinks.

[00:04:12] I wasn't eating at fancy restaurants or shopping with friends, buying $400 purses.

[00:04:18] After a while, my friends started making more money and their cars became nicer, their clothes more

[00:04:24] expensive, their credit card debt more massive. I got married, sold that condo for a 50% profit,

[00:04:31] and moved into Mr. 1500's three-bedroom house. The rest is history. Now, all that said, there were

[00:04:40] still things I could have done differently. Here's a list of things you can do to save money,

[00:04:45] even if you aren't raking it in.

[00:04:48] Number one, rent out your spare bedroom.

[00:04:51] I had a two-bedroom condo, and for a while, my brother was living with me in the second bedroom.

[00:04:57] But after he left, I could have rented out that second room for at least my condo payment.

[00:05:03] This is made even more easy for you now with Craigslist and Airbnb. If you can't afford a

[00:05:10] separate rental house, buy the most bedroomed house you can afford. Buy in a decent neighborhood

[00:05:15] and rent out those extra rooms. Make sure you can afford the whole payment by yourself and save up

[00:05:22] for those months when you don't have renters. But if the rent payments total more than your mortgage

[00:05:27] payment, you are getting someone else to buy you a house. How sweet is that? Another quick bit of

[00:05:33] advice, background check the heck out of your potential renters. Better to have an empty room

[00:05:39] for a month than try to evict someone for non-payment of rent. Number two, take care of your car.

[00:05:46] I did have the inexpensive car and kept up with the small maintenance things on the car,

[00:05:52] like oil changes. If you don't know anything about cars, ask your sister's best friend's boyfriend's

[00:05:58] brother to tell you what you need to do to keep it in top running order. Find a good mechanic who

[00:06:04] isn't going to take advantage of you. My car was ugly, but it got me from point A to point B,

[00:06:10] which is all a car needs to do. Number three, learn to cook. If you can read, you can cook.

[00:06:18] The library has a lot of great cookbooks, and Sandra Lee has an awesome series of recipes that

[00:06:24] use pre-made ingredients that you doctor up to make it homemade. She calls it semi-homemade,

[00:06:31] and I have yet to make one of her recipes that isn't good. Anyone can stir things together in

[00:06:37] a bowl. Take a day to make up a bunch of breakfast sandwiches and put them in the freezer so that you

[00:06:42] don't have to stop at the drive-thru on the way to work because you woke up late. Get a slow cooker,

[00:06:48] and dinner will be ready when you get home. Number four, find a beauty school and get your hair cut and

[00:06:55] colored there. Those people are learning how to cut hair, but the ones cutting your hair are

[00:07:00] almost finished with school, and they're heavily supervised by professionals. You won't leave the

[00:07:06] salon looking bad, and you will get it at a fraction of the cost. Hairstylists recommend

[00:07:12] getting your hair cut every six weeks. I go about every six months. I use nothing in my hair,

[00:07:18] and I have a style that allows me to go this long without a cut. I cut Mr. 1500's hair myself,

[00:07:24] as he likes to wear it in a very short style, and I can cut it with clippers. He's pretty no fuss.

[00:07:30] I know several women who get their hair cut and colored every three to four weeks and pay $150

[00:07:36] each time. No thanks. Number five, don't stand up in weddings for people you don't believe will stay

[00:07:44] together. I remember the first wedding my sister stood up in. The bride had been caught cheating

[00:07:50] before the wedding and somehow convinced the groom to go ahead with the ceremony. My sister spent

[00:07:56] $250 on the dress, $35 on the shoes, $50 on a shower gift, $75 on the bachelorette party,

[00:08:05] and $50 on a wedding gift. And these are prices from 20 years ago, all for a marriage that lasted less

[00:08:13] than one year. I'm going to amend this statement. Don't attend weddings for people you don't believe

[00:08:19] will stay together. After my cousin's second wedding, they went on the honeymoon and then came back and

[00:08:25] immediately got a divorce. I have vowed not to attend any more weddings where I don't truly believe the

[00:08:32] couple will be together forever. I just went to my first wedding since my cousin's disaster, almost

[00:08:38] three years later. I was very happy to attend that wedding and know they will be together until death

[00:08:44] parts them. Number six, delay having children until you can afford them. Now I understand surprises

[00:08:52] happen, but there are ways to avoid these surprises. Take precautions because kids are a lot of work

[00:08:58] and a lot of money. We were married for five years before we had a baby and we planned our pregnancy

[00:09:04] so that we would have enough in our bank accounts so I could stay home with the baby. We don't pay for

[00:09:10] childcare and I get to raise my kids. Again, surprises happen, but if you take steps to avoid those surprises,

[00:09:17] you can get that much further ahead. Number seven, shop the sales and use coupons.

[00:09:25] Coupons aren't just for food anymore. There are daily deal sites all over the internet that offer deep

[00:09:31] discounts for restaurants, services such as haircuts, and even alcohol. There are coupons in the

[00:09:37] paper for department stores, sometimes offering percentages off for full-priced items. But also,

[00:09:43] at the end of the season, you can find percentages off coupons for already reduced items. Use coupons

[00:09:50] at the grocery store. Matching them up to sales can net you big savings. And if you're going to buy it

[00:09:56] anyway, why pay more? Number eight, hear that on tomorrow's episode. You just listened to part one

[00:10:08] of the post titled, You Don't Have to Make $100,000 a Year to Retire Early by Mrs. 1500 of 1500days.com.

[00:10:17] And I'll be right back with my commentary. Okay, so fun fact. Carl and Mindy, the couple behind this

[00:10:24] blog, are good friends of ours. We got close after Carl spoke at the Economy Conference, which is a

[00:10:31] yearly party about money that I created. And you can watch the video of his speech on my YouTube channel

[00:10:37] by searching for the name Carl Jensen. My Midwestern gentleman actually involved him in our engagement.

[00:10:45] And you can hear that whole story on the Mile High Fi podcast. The episode is titled,

[00:10:51] Scarcity vs. Abundance Mindset and Fire. Carl and Mindy were invited to our wedding this past June,

[00:10:59] but they unfortunately couldn't make it. And after reading this article, I think I know why.

[00:11:05] Just kidding. I'm pretty sure they had a legitimate conflict, but I absolutely needed to poke fun at

[00:11:11] them after reading this. I don't disagree with Mindy here. A wedding is about celebrating a commitment

[00:11:17] and a couple. It can be a significant commitment of time and money. So if you don't believe in the

[00:11:24] couple, it's probably best to decline. I love attending weddings, but I've declined a number

[00:11:30] of invitations when I don't feel that I have a close enough relationship with a couple to warrant

[00:11:35] the expense. I don't think that's the case here either. I'm going to choose to believe that Carl and

[00:11:42] Mindy really wanted to come to our wedding. They just couldn't make it. But we're just halfway through

[00:11:47] the article. So for now, have a happy rest of your day. And I'll see you tomorrow, where we'll finish

[00:11:53] up this post and where your optimal life awaits.