I’m 21 and pursuing the path to financial independence
This guest post from Cody is part of the “money stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all stages of financial maturity.
In January, I attended Camp FI in Florida. While most of the attendees were thirty- or forty-somethings pursuing early retirement, one young man stood out. We were all amazed at the presence of Cody Berman, a 21-year-old hustler who defies the Millennial stereotype. Cody works hard, saves tons, and has a vision for his future. I asked if he'd be willing to share his story with GRS readers. Here it is.
From a young age, my parents instilled the value of saving into me. Throughout my early childhood, my father would match my contributions to my savings account dollar for dollar. This made me excited to save birthday money and miscellaneous earnings because the money would double. (Thanks, Dad!)
When I turned eleven, I started my first job working in the snack shack at my uncle’s local disc golf course; I earned five bucks an hour. Throughout middle school and high school, I worked various jobs and saved nearly every penny. At age sixteen, I bought my first car with the money I had accumulated over the years. I still drive that car to this day.
During high school, I took several AP courses and received college credit for them. If I had only known then what I know now, I would have taken nearly every AP course and CLEP exam available. When it came time to select a college, I was torn between Bentley University and the University of Massachusetts Amherst. I calculated that Bentley would have put me in approximately $80,000 of debt after four years but that I could attend UMass Amherst virtually for free. My frugality won. I chose the latter.
Making the Most Out of College
Upon my arrival at UMass Amherst, I joined as many clubs and organizations as possible. Simultaneously, I obtained a job as a teacher’s assistant to financially support myself. After several weeks of attending dozens of meetings for multiple groups, I decided that the Investment Club, Fixed Income Fund, and Finance Society were particularly interesting to me. [J.D.'s notes: Where were clubs like these when I was in college?]
I soon realized that in order to get a leg up on my peers, I needed an internship. I applied to nearly thirty positions and heard back from only one. That summer, I worked in a low-tier operations role at a small branch of a major bank.
I came back sophomore year with increased confidence and a motivation to achieve the best internship possible. This time, I applied to nearly 35 positions and received responses from about 20% of them. Initially, none of my top prospects were interested in me.
Then, one day in early April, I received an email from a private equity company who asked me to come in for an interview. Three interviews later and the position was mine. That summer, I commuted two hours each way to my internship and worked long days. I thought I was on my way to become a rich, successful investment banker. What could be better, right?
Finding Financial Independence
During my junior year, I networked relentlessly and received offers from various top-tier investment firms. I knew that whichever firm I chose to work for following my junior year would probably be the firm I received a full-time offer from. I aimed for high-caliber, high-paying jobs in New York City.
It was during this year that I discovered the financial independence movement and realized something important: Time is more valuable than money.
Because of this newly-acquired perspective, I declined all of my high-powered NYC offers and chose to work for a financial firm that valued hard work, respected work-life balance, and compensated for overtime (extremely rare in the finance space). My friends and mentors all thought I was crazy for turning down the ultra-high-paying, high-stress offers, but I knew that I was making the right decision.
Once I discovered the financial independence movement, I was immediately attracted to the idea of a side hustle. I wanted to unlock an alternative income stream to allow me to reach my financial freedom quicker. I took steps to start a t-shirt company and tutoring business, but both failed due to lack of interest and commitment.
Eventually, I collaborated with James, a mechanical engineer friend of mine, and we created the ultimate side hustle: Arsenal Discs. Our company manufactures premium golf discs and equipment for the disc golf sport.
My passion for disc golf, coupled with my business mindset, made me a great fit to run the finance and marketing arms of the business. My business partner James, who loves to design and create, complemented my weaknesses perfectly by taking over the technical, engineering side of the business.
An Alternate Path
I see too many adults miserable in their jobs, complaining about money, and never having the time to do things. I've decided that this was not the life I wanted. I want freedom.
This yearning for freedom initially stemmed from my resentment of authority and being forced to perform tasks that I found neither useful or beneficial. Financial freedom grants you autonomy to work on projects that you're truly passionate about. Once the need for a financial reward is eliminated, then altruism, passion, and authenticity foster motivation, not money.
My goal is to have a deep impact on society and, ultimately, the world. Whether this be through financial consulting, global volunteerism, or content creation, I strive to change others’ lives for the better. I feel that the typical nine-to-five job won't grant me this satisfaction, and even if it could, I’d like to discover that career from a position of financial independence, not financial need.
I'd also like to help other young adults discover the road of financial freedom.
In my three years since discovering and advocating for the financial independence movement, I've had only one friend reach out to me for guidance. Most people in my peer group can’t be bothered with planning for their financial futures. They're just finishing college. They may have just accepted their first job offer. The last thing they have on their minds is their financial situation ten years from now.
My advice to any college-aged reader out there is simple: Continue living on your college budget, even after you begin your career. As Jim Collins says, you can eventually reach financial independence by following one simple rule: “Save more than you spend and invest the rest”.
A single, twenty-something with no kids can easily live on $20,000 or less per year by making educated financial decisions. With the average graduate salary just topping $50,000 in 2017, a young adult can start with a nearly 60% saving rate! Using Mr. Money Mustache’s shockingly simply math behind early retirement, and assuming income grows at the same rate as expenses, that person could reach financial independence in eleven years. That’s incredible!
Plans for the Future
Luckily, I'm not alone in the path to financial independence.
My girlfriend Lauren, who is frugal by nature, is 100% on-board with my plans. It’s hard to argue against the idea of financial freedom in five years or less! Plus, I have my mom Ruth to thank. She's turned me on to new blogs, podcasts, and other sources of information to add to my ever-growing repository of skills and lifehacks. She's been extremely supportive in all of my efforts, whether it's my studies, new ventures, or financial planning.
I'm a firm believer in creating multiple income streams to diversify risk. At this point, I have my high-paying W2 banking job, my side hustle, and miscellaneous side jobs and weekend jobs earning me income. I plan to further accelerate my wealth accumulation through real estate (e.g. house hacking, live-in flip, etc.). Developing these passive and semi-passive income streams will allow my saving rate to soar.
My hope is to work for less than three years in a traditional nine-to-five job. Instead, I'd rely on my (hopefully) successful side hustles and real estate ventures. Once I reach this point, I can put all of my time into passion projects, volunteerism, and traveling. I’m sure to make some mistakes along the way, but the goal of becoming financially independent at age 25 sounds too good to not pursue.
Nothing that I'm doing involves prodigious intelligence or tremendous abilities. I’m not a genius. I’m just a guy who wants to truly enjoy life and extract as much value out of it as possible. All it takes is a game plan, hustle, and ambition. The rest will follow. It’s never too late to take back control of your life.