It’s been awhile since I’ve run a new Educator on FIOR interview. I’m thrilled to kick the series off again with Lance from TeachMoneyLife. I think you’ll enjoy this one!
If you’d like to participate, just email me and I’ll make it as easy as possible. I love sharing stories of educators taking charge of their financial lives.
On to Lance!
Tell us about you.
As a young kid I was always fascinated with money. I grew up spending much of my free time in my grandfather’s sporting goods store, where my mother worked. My brother and I would spend our summers playing baseball in the yard, running the cash register, stocking shelves, sweeping floors, and chatting up the locals. It’s where I learned to count money, what sales tax was, and how profit margins worked.
I was a naturally curious kid and loved to learn. I also had a “motormouth” and was always butting into conversations with customers and other adults. I used my knowledge of money and my many conversations with customers to sell products to others who came in. If a fisherman came in looking for a “secret spot,” I had a plastic map and a sharpie ready to sell my knowledge to them for a dollar. Cheap- I know. I’d show them the lures that were “hitting” AND had a higher profit margin for the store.
As a nine year old kid, I was quite the asset to the family business. I eventually grew into selling handmade crafts, doubles of my baseball/Yugioh/Pokemon cards, and grab bags of unopened McDonald’s toys. I got paid an “allowance” for helping in the store, and made a deal with the wood carving business next door to sweep his floors daily and pick up the glass eyeballs that he dropped.
It was this curiosity and drive that led my grandparents (both sides) to invest in my personal finance education. Both sets had always gifted me US Savings bonds for my birthday and Christmas (well- technically, birthmas). My maternal grandmother worked in the local bank and would bring me in to talk with the bank manager and show me about saving and investing. My paternal grandmother belonged to an investment club and bought me 5 shares of Coca-Cola for my 11th birthday, along with a set of personal finance books that have forever changed my life.
It was only a few years later that my father’s logging business was beginning to struggle and eventually had to declare bankruptcy. Having helped for a couple years do his bookkeeping with him, I was more privy to the hardships than my brother. I used to listen to my parents discussing finances even if they thought they were alone. It was a bleak time, despite my father’s seemingly endless ambition and work ethic. As I graduated high school, I watched as he broke his back through three job changes post-bankruptcy, eventually landing himself a great upper management job in a construction company.
It was the sum of my experiences that motivated me to be better with my finances, and to never accept that a career can limit my potential. Going into teaching (my dream career), I often got the line “why would you want to do that? You’d make so much more money as a lawyer, doctor, or in finance? You’re too talented for teaching.” It’s these limiting beliefs about teaching that pushed me to start TeachMoneyLife and to help guide other teachers into turning this negative view of our income potential and worth, into quietly wealthy lives.
What do/did you like most about working in education?
Working in education was always a dream for me. Ever since I was in Mr. J’s seventh grade social studies class, I knew I was destined to be a social studies teacher myself. There is just something about inspiring passion and a love for learning in children that gets to me. It’s truly the kids and the interactions with them that is my favorite part about teaching. It is never a dull day with middle school students.
What do/did you like least?
The part of teaching I enjoy the least- definitely faculty meetings. I mean, how often are they actually productive? Save us all time and headaches, and just make it an email! Am I right?!
What is your Why of Financial Independence?
Financial independence is the true first goal for anyone seeking to build wealth or master personal finance. The basics get you to financial stability. But financial independence is a game changer and requires discipline, persistence, and perseverance.
My WHY is that I want to become financially independent before my son is twelve years old (ten years from now) so that I can focus less on trading time for money, and more on my family life, and on helping other educators reach financial independence too. In my mind, financial independence will mean that the pressures of trading my time for money will be gone, and I can focus on my family, other passions, on creative thoughts, and on being an even better educator, should I choose to continue to work.
Just like when I was a teenager and graduated high school and went off to college, I was seeking independence and freedom in my choices. Financial independence will bring the next level of independence that I seek. One that allows me to truly enjoy and explore all that life has to offer without fear of failure.
Are you:
- FI Curious – Just learning and becoming interested in financial independence
- Future FI – On the path, but still learning. Destined for financial independence!
- FI Success – Financially independent!
I am FUTURE FI, I am on the path and still learning and applying the knowledge. My main crutch has been that I did not apply all my knowledge in a strong enough way when I was younger. I saved like a mad man, and was incredibly frugal, but I left off the investing, fearing a financial emergency that would require cash. I also was blessed with entering the teaching ranks two days after graduating college, and to be done paying into my NYS pension fund after three years of paying in my 3% (I joined super early thanks to a high school summer job I had). So, I didn’t get super serious about investing and building wealth until after we had our son, and felt like we had mastered the art of saving with having a young child. I don’t see our financial independence future being that far off for us. With even more belt tightening and some more hustle in our step, we could be there very quickly. But, we will get there when we get there. We do want to enjoy our time together now, while not spending like crazy.
Share any financial numbers you are comfortable sharing.
I am very glad you’ve asked for some specifics because all too often I think teachers (and the public in general) treat our finances like some sort of taboo. I am sure there are people way better off than me, and some who are not on our level, and that’s fine! As long as we are all moving forward positively and being inspired by each other’s progress!
My wife and I treat everything we have as OURS. Nothing in our family is divided up as hers or mine, and we’ve been that way all throughout dating (we had separate accounts but split most everything). So when you see these numbers they are representative of two people, one who has always been super frugal and knowledgeable about personal finance, and one who is learning-in-progress.
My current liabilities are as follows:
- Roughly $30k in student loans for me
- $160k mortgage
- Roughly $60k in wife’s student loans
Our assets include:
- $180,000 home (we bought with an FHA three years ago)
- $12,000 in an emergency fund (3 months expenses)
- $2,000 in our savings account for travel, home improvements, etc.
- A cushion of $1,500 in our primary checking account (after all expenses are paid each month)
- A secondary checking account for spending money that holds $100, replenished with another $250 every two weeks. We typically pay for groceries/gas out of this account as well.
- I have $3,000 in savings bonds ($2,000 of which earn 4%!)
- I own $1,200 worth of Coca-Cola stock (that gift I mentioned earlier)
- $1,200 in wife’s IRA invested in $VTI
- $1,200 in son’s 529 invested in low cost target date fund
- $1,100 in my 457(b) plan
Our net worth is currently at -$49,000 without adding in the value of our cars ($15,000). This does include our home valued at $180,000.
Overall, our assets, particularly our investments, need some work. We are looking to dramatically increase our investing now that we have paid off some debts we had (auto, student loan, credit card (0% interest)).
Our income fluctuates a little bit, as my wife works varying hours each week, but always north of 30 hours. Mine is more predictable as a teacher with 25 pays scheduled throughout the year (4 are paid in lump without insurance on June 30th). Together, we are on track to close the year at just shy of $100k in earned income.
Tell us about your path to FI.
What are your successes/wins?
On our path to FI, our biggest success has been affording a career switch for my wife. She was a school social worker at the same district I am in, but the position was not what it was advertised as, and became progressively destructive to her mental health. She left the position and took a part-time job as a hospice social worker just five minutes from our house, and has never been happier. Initially, we thought this was going to stunt our progress towards FI, but in fact, it’s done the complete opposite! She is the breadwinner by a good amount now that she has been promoted to full-time, received a couple quarterly bonuses, and a pay raise all within her first 6 months!
Beyond that success, trading in my Chevy Colorado for $4k over what I owed and buying a Toyota Corolla cash, has been our second biggest win in recent memory. By opening up an extra $500 a month in cash flow, we have really been able to relax a bit about money, and just focus on our positive growth.
What are your challenges?
Our biggest challenge is fighting the food budget. We don’t waste much, but are consistently over where we’d like to be. Together, we wanted to sacrifice more to increase our investments but just coming up short, are our two biggest challenges so far.
What is your long-term goal? Do you have a FI target?
Our general long term goal would be to have enough in our retirement accounts (roughly $1 million) to allow my wife to be work-optional with our son (and future siblings). And to create other income streams that replace her income, so that we can continue to accumulate assets for FIRE.
My personal FIRE goal would be:
- $500,000 in non-retirement assets (combined)
- $25,000 in income other than teaching
- 20 years of teaching
That would allow me to leave teaching if I so choose at the age of 43, with a pension that would pay out $2,000/month if I elected to take it at age 55 with penalty or $2,765/month at age 62 without penalty.
If you become financially independent will you:
- Retire early?
- Continue to work in education? (How/why?)
- Do something different?
I think I would continue to work in education. But you are asking me right now, and I’m not feeling bad about education right now (on Thanksgiving break). So, ask me again on Monday! Just kidding. I’d probably continue to work in education in some capacity until I am at least 50. My son will be 25 years old when I am 50, which will ensure I at least see him through college (if he chooses to attend).
Tell us about a short-term goal you’re working towards.
My current short term goal is to max out my wife’s IRA in 2021 by contributing $500 every month, and to increase my 457(b) payroll deduction every two months in 2021.
Who/what inspires you?
There are so many amazing people around me physically and on the internet that inspire me every day. However, I’d have to say my grandfather who just passed right before Halloween 2020. He was an incredibly hard working employee, who had a great work-life balance, invested consistently, enjoyed a great pension, and loved his family very much. His work in the community inspired me to want to leave a bigger mark on this earth before I leave, beyond my contributions as a teacher, mentor and coach.
What’s something you want to say to other educators about financial independence?
Pay yourself first before you have a chance to even see the money. Avoid high fee investment products and services, and invest in low-cost index funds in a long-term buy and hold strategy. Make sure that your money is working just as hard for you as you did for it. Because while we love our work, it’s always good to have a nice nest egg waiting if the energy and drive for education ever wanes. And avoid lifestyle creep.
Is there anything you’d like to get feedback on from the community?
Personally, I’d love for the community to just openly share what we all as education-personal finance bloggers can do to help start new teachers on the right financial foot (or transform the financial lives of ones already in education). What knowledge, information, and guidance could they use, and on what in particular. And what would they like to see or be able to share with the new teacher or co-worker just down the hall on day one to help them have a better financial life. Whether that’s a series of posts, an e-book, a podcast, or a physical book, I am sure there are enough qualified and willing voices to create that for the community to share and use. I’d love to collaborate with others to create something for the community to use.
Where can readers reach you if they want to connect?
Website: Teachmoneylife.com
Email: Lance@Teachmoneylife.com
Social Media:
Twitter: @money_teach
Facebook: @TeachMoneyLife
Instagram: @TeachMoneyLife
Pinterest: @TeachMoneyLife
Don’t forget to pop over to Lance’s site at Teach Money Life.
If you want to read other stories, you can find all Educator on FIOR interviews here.
I enjoyed reading this Lance (and Ed). I think the most cringe worthy thing I hear from teachers when it comes to personal finance committee a the notion that we are “all set” because we have a pension. I was told that by many fellow teachers when I first started and I believed them. I’d love to be able to go back and start saving earlier. Every young teacher should get that message.
Great post, Lance.
I’m retiring at 57 in 2 week’s time at the end of our school year – I’m in Australia.
The love of the actual classroom teaching hasn’t waned – it’s all of the other stuff that has gradually sucked the life out of the job – so your plan to future-proof yourself to be in a position to leave when you want to is a good one.