Being a black belt in finance means to have a net worth of a million dollars.
Just like a martial arts dojo, Your Money Geek is a place where we can learn about personal finance and eventually become financial black belts ourselves. In this series, we get to hear the stories of actual millionaires and see what it took for them to get to that level.
Today’s featured black belt is a fellow blogger and our first female black belt! Dr. Brenda is 55, lives in Virginia, and has three websites going – thefivejourneys.com, Early Exit Academy, and betterlifechallenges.com. Early Exit Academy is a course designed to teach you how to become financially independent, be sure to check it out!
Now for the interview:
What degree black belt are you? (e.g. one million = first degree, two million = second degree).
Give us the break down on your current net worth. What is it invested in and do you have any debt?
My net worth is $1.16 million. Most of that (almost $800,000) is in retirement funds. I own a house valued at close to $300,000. I do not have any debt.
How was your childhood? Was your family wealthy, middle class or low-income?
I grew up on the family farm – definitely working-class Midwestern farm values. There were five children in the family and we were assets (we milked cows and helped with the crops). I remember my father paying me 1 penny for each bale of hay we piled or unstacked from the wagon – not too bad when you consider we could manage 1,000 bales a day. Consequently, my siblings and I struggle with an overactive work ethic!
Did you go to college?
I earned my Bachelor of Science degree from the University of Wisconsin at Eau Claire and then my Master’s and PhD from Syracuse University. I’m a sociologist – not a real sought-after profession!
What is your fighting style? (Career path from first dollar ever made to present).
My career path is filled with potholes. I wrote my dissertation while working as a researcher at the University of California. I benefited from tuition waivers and an assistantship, which left me with very low graduate student debt. Debt that I paid off while I was working. Unfortunately, I earned my PhD at the same time the academic market collapsed and budget cuts led to the loss of my job. Hello unemployment!
It took me three-plus years to grind my way back to a job with salary and benefits. The new job I took was a Crime Analyst for the Atlanta Police Department. I was over-qualified but something about the position appealed to me and it gave me the break I needed. Less than a year later I accepted a position in the suburbs of Washington, DC, where I carried out national-scope research on justice system responses to domestic violence. It was a great job that led me to my last round of employment, which focused on court reform and elder issues.
After almost 20 years in the justice system, I lost my job. I was exhausted, burned out, and tired of the toxic work environment. All those years of saving a good chunk of my salary gave me the freedom to try a new career path, so I spent the last year creating the Early Exit Academy. My passion has returned and I’ve redirected it toward helping others reach financial independence.
Would you recommend people to pursue the same career path? Would you choose a different job if you could go back?
My “career path” was based on passion and left me in a bind when things didn’t go right. But my career didn’t feel like a choice – I was a sociologist at the age of 12 when I fought gender discrimination. I’ve always looked at the bigger picture and I remain fascinated by how changes in structure and process can impact individual behavior.
When I was in my teens, women were discouraged from the sciences. Now that I’m a master naturalist, I wish I had done something more along the lines of environmental science. But truly, my calling was social science research.
The bigger question is whether you follow your brain or your heart. Rarely do the two match up. If I had to choose again, I’d make the same choice – follow my heart.
Have you had any side hustles?
I started blogging in 2017, but it was a hobby and has yet to produce income. My crazy career involved a lot of travel which kept me from side hustles.
If you have a spouse, how have they contributed to your net worth?
No spouse. I did this on my own as a single mom.
How old were you when you became a financial black belt?
At what age did you start seriously saving money?
I’ve always been frugal but I really became obsessed with finances when turned 40. I realized my retirement account reached $100,000 and I began tracking it regularly. It’s been fascinating to watch it go from $100k to $800k in 15 years. I was saving 56% of my salary when I left my last position.
What has been your investment strategy?
For most of my career, I was primarily invested in stock funds in my 403b (now my IRA). But now I’ve moved to a more conservative portfolio given my age and potential need to tap into funds. My former employer offered a Roth 403b and I was able to plow a lot of money into the Roth fund. At the time I could file as a head of household and afford to pay taxes – 27% of my retirement portfolio is in a Roth IRA. My retirement assets are held in Vanguard funds.
I primarily stick to low-fee index funds, but I have some individual stock holdings in my retirement portfolio (Amazon, Apple, and a pot stock – just for fun). With my taxable investments, aside from savings accounts, I like Betterment and a DRiP fund that reinvests dividends (HCN is the stock).
Who was your financial sensei? (Most influential person/source of information in your financial life).
That’s a tough one. The first book I picked up on personal finance was David Bach’s Smart Women Finish Rich. I was captivated by the concept of a dream fund – no one had ever mentioned a dream fund to me! Then I started reading some of the early bloggers. My favorite was J.D. Roth from Get Rich Slowly.
Are you pursuing FIRE (financial Independence/retire early)? If so, how much money do you plan to retire on and are you going to quit working for money altogether?
I’m pursuing FI (financial independence) and my brand of RE (reinventing and exploring). The FIRE movement struggles with those last two initials – retire early. We have a negative connotation of retirement as withdrawing from society, when in reality, most retirees remain very active. My goal is to create an income stream from courses offered at the Early Exit Academy. I don’t see myself ever “retiring” in the stereotypical sense. I plan to keep trying to bring in income as long as I enjoy what I’m doing.
Mind over matter
Do you think psychology plays a more important role than math with finances?
Definitely. My courses address mindsets, habits, and behavioral finances. Most of us are our own worst enemy. We get caught up in consumerism and spend money without thinking about it. The FI math is as basic as it gets – grow the gap between income and expenses and invest the difference. It’s the behavioral changes where people get hung up.
What was your toughest mental opponent on the path to your black belt?
I still have to work on my money mindset and the myths I learned about money. In particular, I still have a notion that it’s wrong to be rich! I was drawn to my career so that I could improve society, not to make money. So I’m still not comfortable that I have a black belt in the first place! As I tell my students, it’s perfectly fine to do what you love to do AND to make money – it’s not an either/or proposition.
There are a lot more financial white belts than black belts out there. How do you think differently than the average person when it comes to money?
I don’t care about status and my needs are very simple. The white belts try hard to impress others and aren’t always intentional about their actions or see the consequences. “Stuff” just isn’t important to me.
What does wealth mean to you? Should everyone pursue it?
I’m wealthy in terms of family, friends, and knowledge. I don’t consider myself to be wealthy financially. It’s not a concept that I think about or strive toward. Financial independence is a goal, but not wealth in terms of assets. We don’t live in an equal-opportunity society so financial wealth is beyond the capacity of many people. And it’s not a value for many.
Should people follow their passions or just do something practical?
At the end of life, most people regret the things they failed to try, not the things they tried and failed. In today’s world, I think it’s possible to be both practical and passionate. You can have an “okay” day job that pays the bills while pursuing a side hustle based on your passion. And one day, that passionate side hustle might just become your day job. That’s the ideal scenario.
What is your weapon of choice? (favorite money tool/app)
I’m going to put on my nerd hat! My favorite weapon is an Excel checkbook register spreadsheet. I love tracking things in Excel.
What has been your favorite way to earn money?
I’m still working on that one!
What’s your favorite way to use money?
Travel! Especially international travel.
What’s your one piece of money advice to us financial underbelts?
Track your money as soon as possible. Contribute regularly and you’ll be surprised how quickly you can build your accounts up to amazing levels. And don’t be afraid to take some risks. This is the time to do it!