Page 41 - DIY Investor Magazine | Issue 33

Despite this, I felt afraid. Every month, my earnings fluctuated, and clients could stop working with me at any moment. When you’re self-employed, there is very little job security.
So, I decided to set aside my extra money and put it in a savings account. Maybe, having several months’ worth of expenses saved up would make me feel better. I began reading about the best accounts and investments. Soon, I became fascinated by the topic and regularly read up on personal finance during my tube journeys to and from clients.
MMM - A DISCOVERY ON THE TUBE
In the spring and early summer of 2018, I consumed a lot
of personal finance content while commuting; I knew about financial independence, and I’d heard about some of the big blogs such as Early Retirement Extreme and Frugalwoods. However, I wasn’t actively pursuing FI – at least, not until I decided to read Mr. Money Mustache’s blog.
I’d heard about him a lot, so one day on a long train journey to one of my German students, I decided to give the blog a go. As soon as I began reading, I knew I’d found something special. Everything he wrote just made sense to me. “Why didn’t I think of this before? It’s so obvious!” I thought.
Over the next few weeks, I read every blog post on his site. By the end of it, I was ready to invest, which I first did in October of 2018.
I’ve always been passionate about reducing my negative impact on the world, so this double benefit convinced me. Additionally, Pete focuses on the community a lot; he often states that FI allows you to spend more time with family and friends and to pursue passion projects.
As an only child from a very small family, I haven’t always had a strong community behind me, so this seemed like a great reason to pursue financial independence.
REASON #1 - THE SHOCKINGLY SIMPLE MATH BEHIND EARLY RETIREMENT
Source: https://www.mrmoneymustache.com/
The “Shockingly Simple Math” post was one of the most important reads for me because it explains the relationship between your savings rate and the time it takes you to retire. Pete has created a table that shows how long you have to work depending on how much you save.
For example, someone saving the standard 10% will need
to spend 51 years at work, whereas someone saving 35%
can cut it in half to a mere 25 years. Most people in the FI community aim for a rate between 50-60%, which allows them to retire in 12-17 years.
One of the things that struck me the most was that these concepts work at every income level. If I earn £40,000 and save £20,000, I will retire at the exact same time as someone who earns £400,000 and saves £200,000.
This motivated me to focus on lowering my expenses before increasing my income. I learned that earning more is only beneficial if you use the surplus to increase your savings rate.
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Pete Adeney, the blogger behind Mr. Money Mustache, is a retired 40-something Canadian engineer with a family. So, why did his content inspire me, a single 20-something woman in London, so much?
WHY DID MMM SPEAK TO ME?
Pete Adeney, the blogger behind Mr. Money Mustache, is a retired 40-something Canadian engineer with a family. So, why did his content inspire me, a single 20-something woman in London, so much?
The answer is that his values are almost perfectly aligned with mine. In his blog, he focuses on how reducing consumption benefits you but also the environment and everyone around you.
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DIY Investor Magazine · Apr 2022