Welcome to interview #4 in the FIRE With Kids interview series!
Meet Nick, a 36-year-old (former) pharmacist, who both retired and became a new parent this year.
After reaching financial independence in 2019, Nick finally pulled the trigger on early retirement when his daughter was born this year, so he could spend more time with family and begin pursuing his passions.
I really enjoyed learning more about Nick and his family during this interview!
I can personally relate to Nick’s struggles with career burnout and the unhealthy ‘treat yourself’ spending mentality that resulted from it. That was certainly a motivator in my own FIRE journey as well. It was also interesting to read about his experience with the vision of what early retirement would be like vs. the reality (because… kids).
I’m excited to share Nick’s story with you! I hope you enjoy learning more about his family’s journey as well.
About the FIRE with Kids interview series
I designed this interview series to connect with and share the stories of other families with kids (or dependents) who are pursuing financial independence, with or without early retirement.
Reaching financial independence is a huge feat regardless of your circumstances. However, adding kids into the mix provides another layer of nuance and additional challenges.
I hope that by sharing different stories and voices, more people will find an example that they can connect with and feel empowered to begin their own FIRE journey.
We believe that families come in all different shapes and sizes, and all are welcome here. If you’d like to share your family’s story, please read my interview series intro post for further details and contact me.
Now on to Nick’s interview…
BACKGROUND
Tell us about your family
We are a family of three—me (36), wife (36), and daughter (7 months). My wife and I both worked as pharmacists in Florida for over 9 years before our daughter was born.
We really enjoy traveling and have taken a few road trips with our baby to the beach and to see historic sites. We have much more to come later this year including her very first domestic and international flights. Send your thoughts and prayers please.
FINANCES
Do you budget and/or regularly track your expenses?
We are super into budgeting…said no one ever. But seriously, tracking expenses is a big part of what allowed us to achieve financial independence, along with increasing our income and investing.
We track expenses manually daily in an app and double check that we’ve correctly logged all purchases once a week. We focus our discretionary spending on areas that support our core values of adventure, health, and self-development. If it doesn’t support those goals, we reduce our spending on it.
What are your average annual household expenses?
Before our daughter was born, we spent between $50,000 and $60,0000 a year. Now that she is in the picture, we anticipate spending an additional 10-15k a year.
Besides income taxes, where do you typically spend the most money each year?
The majority of our spending goes toward housing, food, and travel. And with our new baby—laundry. So much laundry.
We love value-spending … what do you happily splurge on?
We love spending our money on new travel experiences. Sometimes that looks like a South African safari and other times it will be a Hong Kong hike.
One of the coolest things we’ve done was snorkeling with sharks in Moorea. It was so thrilling! Now with the baby we’re focusing more on slow travel with longer stays in Airbnb. The only sharks these days are of the baby shark variety.
What’s your annual household income and/or typical savings rate?
Our savings rate for 2021 was 72% of our income. Prior years have been between 50-70%.
Do you have any income streams in addition to your primary job?
Our other income streams come from various side hustles like opening bank accounts for bonuses, reselling, and credit card hacking. I was a points millionaire way before I hit my FIRE number. We earn dividends and interest from our investments. I have also started a new business as a FIRE coach to help others on their path to financial freedom.
Do you have any debt? If so, what is your paydown strategy?
In total, my wife and I had an insane $300,000 in student loan debt. Pharmacy school is crazy expensive. But our relatively high incomes allowed us to pay it off in about four years after graduation.
That was possible because we made big monthly payments and avoided lifestyle creep, unlike some friends of ours who immediately bought luxury cars and huge houses. Because some of our student loans were initially around 7%, we focused on paying those down the first year, and then refinanced to 4.6%, and then again to 2.9%.
Despite this strategy, we didn’t delay investing in our 401ks, HSAs, Roth IRAs, and taxable accounts.
When deciding where our money should go, we debated the ‘correct’ order to do it. We even sought a financial advisor’s opinion. He basically told us to pay down the debt first and come back when we had more money to invest. That left a bad taste in my mouth, and it motivated me to do my own research. I realized that we needed a more balanced approach. So, we decided to do both.
What’s your current investment strategy?
We have a buy-and-hold index fund strategy. Big shocker, I know.
Our portfolio allocation has changed since I retired. Previously, we kept over 90% of our net worth invested in stocks, with the rest in cash and bonds. Now we keep just over 80% in stocks, with the rest split between cash, bonds, REITs, and a very small amount in crypto.
Financial Independence / Retire Early (FIRE) with Kids
When did you discover the FIRE Movement, and why did it appeal to you?
I discovered the FIRE movement during my research on student loan repayment. I found J.D. Roth’s Get Rich Slowly blog and initially thought it was an interesting idea, but not something that I wanted to pursue.
However, as I continued to work at my stressful job, with only a few weeks of vacation a year, I got burned out. I realized that FIRE might allow me to pursue what matters the most to me—spending time with my family and having memorable experiences together. I feel so fortunate to be around my daughter during her earliest years to witness all of her milestones.
Where are you currently at on your financial independence journey?
Our family achieved financial independence in 2019. However, I didn’t actually retire until a few years later when my daughter was born. Even though I “retired” from my 9-5 job, I still have other endeavors that I’d like to pursue, such as growing my business and investing in real estate.
Is there a target “FIRE Number” or safe withdrawal rate you are working towards?
Using the traditional 4% rule, we’ve reached our FIRE number. We try to keep our withdrawal rate below 4% though, since we are working with a longer time horizon.
Are you planning to retire early? If so, what do you envision early retirement will look like?
I am currently retired early. It looks different than I imagined. There are no margarita and movie marathons with an infant around. In the earliest months, it was great to focus my energy on caring for our new baby. But as my daughter has grown and we’ve gotten the hang of this parenting thing, it has freed up time to pursue other projects.
Overall, I have to say it’s much better than working for someone else. Although my new boss is still very demanding… just smaller.
Do you plan on working after reaching financial independence? If so, will you make any changes?
I have found that working on something meaningful gives me energy and motivation. Since I am no longer obligated by my employer to be somewhere, it can be easy to fall into the trap of idling. A schedule is essential. I have structured my life around maximizing my use of time to pursue my goals.
One of those goals is helping others reach FIRE. I am so passionate about FIRE that I have started coaching people one-on-one who want to reach their own money goals.
Did you make any changes to how you manage your money after discovering the FIRE movement?
Absolutely. I redirected my spending from areas that didn’t align with my values to areas that did. For example, I used to go to bars and restaurants every weekend. I developed a ‘treat yo self’ mentality.
I justified these costs thinking that I deserved those things due to my grueling job. Months of indulging wreaked havoc on my waistline. FIRE forced me to see how this was detrimental to both my health and my finances.
What’s the worst financial mistake you’ve made?
Trying to time the market.
At the start of my investing journey, I lost thousands of dollars holding individual stocks and believing that I knew when to enter and exit a position. Jim Cramer isn’t the only bald guy who has made terrible picks.
What additional challenges does having kids add to the pursuit of financial independence and early retirement?
We LOVE traveling and realize there is probably a short window of time where we have the freedom to take family trips whenever we desire.
In the past we preferred visiting places during the off-season to avoid crowds and peak prices. But once she starts school, we will have to readjust this strategy.
In your opinion, are there any negatives to pursuing FIRE with kids?
If your idea of FIRE involves driving your kids around in a Lambo SUV and then parking it at your McMansion, it will probably take you longer to get there. It’s certainly achievable but you will likely have a harder journey.
How do you plan to teach your kids about money?
I will teach my daughter the basics first. Then when she’s older I’ll give her an allowance for chores.
That said, I am so excited that U.S. school districts are finally beginning to include personal finance education in schools. It is long overdue and I’m sure will be much more useful than memorizing the quadratic formula.
WRAPPING UP
What advice would you give to families just starting out on their FIRE journey?
Plan how you want your life to look like BEFORE you retire early. Decide how you want to spend your new freedom and figure out why you want to FIRE in the first place. Do you want to start a business? Travel the world? Volunteer? Maybe you want to do all three.
If you neglect this step, you may find that reaching FIRE isn’t as fulfilling as you anticipated.
Where can readers learn more about you and follow your journey?
Follow me on Instagram @FromBurnedtoFired. I post personal finance tips and document our experience with retiring early.
Do you have any questions for the FIRE with Kids community?
Any tips on how to manage a lap infant on a long flight?
Is there anything else that you’d like to share?
Kids aren’t cheap, but not every decision should be purely financial. The joy our daughter has brought to our lives is invaluable. Expensive…but invaluable.
I hope you enjoyed FIRE with Kids interview #4!
Thank you again Nick for taking the time to share your family’s FIRE story!
If you have any other questions for Nick, or thoughts on the question he posed above to the community, please share in the comments below.
Are you ready to share your family’s story?
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