FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40

Here we are again with our next installment of the FIRE Community Guest Interview Series!

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having “A” (who wishes to remain anonymous) on to tackle our interview questions.  “A” is our very first European interviewee (living in one of my favorite European cities – Krakow, Poland!) and I’m pumped to continue sharing stories from all over the globe.  “A” has a unique story in which she and her husband have ties to both the US and Poland.  As someone who also has to navigate through two countries tax systems, investment platforms, currencies, rules, etc. I understand how tricky it can be to not only navigate through both systems but also trying to put a figure on your FIRE number/goal.  It’s crazy how many similarities we have in our stories even though we are on other sides of the globe.  “A” is a wife, mom, invests in index funds & rental properties, and is SO close to her FIRE number.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with “A”, please check out her Instagram account @fire.myself.by40 or leave a comment on this post. Without further ado, take it away “A”!

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1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

The idea of financial independence has always been close to my heart – as a kid I loved the Duck Tales and the Scrooge McDuck swimming in a pool of money and not really going to work. For someone who grew up in communist Poland, and wo grew up with the surrounding scarcity, this has been a true dream.

I rediscovered the idea, and the plan, when I was an adult, and we were building a house with my husband – we were able to cash flow a lot of it, and because the entire building duration was only 11 months, we realized how much we actually can squeeze out of our paychecks! That was in 2013.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

It wasn’t until 2017 that we found FIRE blogs, and were able to define the FIRE goal, and dedicate all energy towards it. In the years 2013-2017 we were working to pay off the loan for the house (we had a mortgage on the land), and radically improved our savings rate, and salaries. We knew we were saving, but we did not have a goal of freedom in mind, more a “perhaps we can get a villa in Cote D’Azur someday” kind of a goal – 550-600k euro. To a girl in me who visited Nice in 1990, right after the fall of communism, this was the dream and for the first time in my life I felt that I could achieve it in my life.

But the more we calculated, and the more we saved, the more I looked for investment and saving blogs, and I discovered Mr Money Moustache, and I was hooked!

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today?

I don’t know if my numbers are useful, as we have a unique situation of two nationalities, two countries of investments, and low cost of living place, but our goal, all in sits around what other bloggers report – just shy of 1mln$. Our goal is to have passive income from all cash bought apartments that covers our daily cost of living in the country we live in, and have about 30% buffer coming from USD index funds. And a 401k which is a separate thing, not covered in the main goal, that we won’t touch for decades.

Our savings rate is around 85%, but it’s hard to calculate because of the multiple income streams and investing in properties, where we cash flow their purchase in big buckets.

We both work from home, 40 hours a week. We both have a few side hustles – I teach project management, hubby does some editorial work, proofreading, he wrote a book about living in Poland and …he’s acting in movies! We also did some tutoring, I was receiving PhD scholarship on top of my salary, we have rental income, so we generally have a lot of income streams, and we really like to be busy.

We have officially started our project “100 month towards FIRE” in September 2017. We are 93% complete, and we have 2 months left, which is 53 months sooner than originally planned!

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

Once we decided to buy freedom, instead of the house in the Cote D’Azur, we feel very calm. We can take on a lot of crazy ideas – work on climate change efforts or take more risks at work. We travel, we eat out, we enjoy our life. What has changed is that we don’t feel the need to buy stuff, and when we do buy something, we spend a lot of time before we make the decision.

5. What do you spend your money on and what don’t you spend your money on? Do you use a budget?  Do you track your expenses?

We spend 100% of our money using a card or bank transfers (only about $50 per year using cash). This allows us to track every penny. I have a master Excel sheet with high level budget for each month, and I forecast my earnings and spending for 12 months ahead, showing my cashflow for each month – this is really helpful when buying apartments with cash!

Our few largest categories of spending are: travel, food, and personal, that includes both extra health expenses not covered by our insurance, and courses, and clothes/books/music. We eat out 2-3 times a month, we go out for a coffee date 5x a month. We travel each quarter. We pay for any course we feel like we want – currently learning Swedish. These are things that we enjoy and do a lot.

We don’t really buy stuff – clothes go in the one-in-one-out category, and often buy second-hand. We don’t buy electronics, and if we do, try to use airline miles for it, or buy second-hand. We don’t spend money on bottled water, or pre-made freezer food, or Uber, or takeaway food. We decided to keep only 1 streaming service at a time, because 2 don’t bring double the fun. We use our iPhones until they die (currently year 4 on them, and these are first ones we ever owned), and I’m typing this on a computer that is 8 years old.

You get the point 😉 if it works, why replace it has been our philosophy in consumption.

6. What brings you happiness and joy? How much money do these things cost?

We are lucky to live in a low cost country, and in Europe, where you can drive to many amazing places, or fly really cheap to great destinations.

We spend about $3,500 per year on travel, and we travel a lot – once a quarter at least.

Eating and drinking out is always an event – we don’t do takeaway, because we don’t go out to avoid cooking, but go out to spend time together and look at the world and enjoy it. We spend about $150 per month on it.

We also spend about $1,300 on personal education per year – be it courses, or language classes, things that are fun, and help us grow as humans.

7. As a FIRE member living in Europe, can you try to shed some light on some on the differences you’ve encountered along your journey (both pros and cons) that are specific to those within Europe?

Pros: property taxes. They are really low, and they help us to keep a really good ROI from our rentals. We tried to invest in a property in the USA and the insane taxes halved our income, it wasn’t worth it. We currently pay about $50 per year on each of our properties.

Cons: difficult eviction laws for non-payers. We carefully screen tenants, and have been blessed so far, but I’ve heard stories.

Cons: lack of 401k equivalent. My system in Poland allows for max of $1,500 per year contribution to the system. This is really not enough to make it a useful vehicle.

Pros/Cons: Europe is not one country, and each country has different tax laws, making it difficult and expensive to invest pan-European. We stick to one country here, and it makes us feel like a lot of eggs in one basket. But it’s also a pro – there are a lot of cheaper places to live and invest, while still enjoying the European values, social care and relatively short distances.

8. Since you have experiences in both the US (where your husband is from) and Europe, can you try to explain to those of us in North America how your FI journey in Poland differs for someone in the US or Canada?  

First of all, education is free here, so I started with no student loans. If you want to, you can keep getting new skills for close to no cost. I did my Masters, and my PhD, and even got hard cash in a scholarship, while working a full time job. The key cost here is always housing – it can eat up to 50% of your salary if you’re not careful, so house hacking is a way to go. Housing is also the biggest piece of people’s wealth, so this is where most people keep their retirement money – not ideal as it does not move well.

The taxes here are high in comparison – 18% (for a salary up to $22k per year), and 32% above, plus social security, giving healthcare and retirement, but it also gives a security net: paid sick leave, maternity, and unemployment (very low but some). This helps with the immediate needs.

Salaries are pretty low in comparison, but there are a lot of industries where you can get up to the global salary, while living in the low cost country – I work in pharma, IT is good too – I get 80% of a German salary, in comparison to other industries where we get 25-30% of their pay.

There are a lot of entry-level jobs in S&P500 companies in the city of Krakow in their internal outsourcing branches, and while they only pay ~1700$ per month gross, it’s more than an average salary, and you can make a good start. This is what attracts a lot of expats who make a move to Poland to get started and “life hack”. We have a lot of US friends who moved here, finished their university (MA degrees) and have great corporate jobs, not believing how easy the life is for them in comparison to what it was back in the US, and how high their BA degree student loans are.

The start in adulthood looks very different here: you study for free, live in a sub-let room, and don’t own a car. And when you graduate, you get a job, buy a small starter apartment, still don’t own a car, and get one closer to 27 years old when you need one to visit in-laws. This means that we save a decade worth of interest rates on a vehicle, and thousands of education costs, and make the home ownership the first large purchase (and average studio price is $80k for 320q ft place).

9. As a follow up to the above question, are there any differences to living in Poland vs any other European country that would impact your FIRE journey? I know the cost of living is much lower compared to many Western European countries but is there anything specific to Poland (not just Europe overall) that has helped/hindered your FIRE journey?

Western EU countries in comparison to Poland would offer me 50%-80% higher cost of living, and 20-40% higher salary in my field of work, so it would have taken me much longer to get there. My excel showed a relocation at this point is not a good move, unless we want to have the experience of living somewhere fun.

They offer typically better healthcare, maybe better schools, but since my son is 21, I don’t really need schools anymore, and he can move to study abroad. For healthcare, as EU citizens, we can still relocate and join their systems, which we are actually considering as we will eventually age. With this in mind, we are carefully looking at the cost of living in other countries so that our FIRE budget can cover it if needed.

The one thing that Western EU countries might have been better for is the government pension plans – ours sucks, and while it takes a ton of money from my pocket each month, I don’t really count on it in my math for FIRE.

10. What is your investment strategy? Do you invest in mutual funds, index funds, dividend growth stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years?

Our current goal is:

45% real estate in Poland;

19% 401k (100% index funds); not counted towards the FIRE goal

36% Vanguard – 14% in Bonds funds, and 22% in index funds

We started with a goal much heavier in real estate, but since all the apartments are in one market, we decided to switch. Similarly, we decided to put some bonds into the mix to calm down our aggressive portfolio in Vanguard. We learn as we go, and it’s possible that we will end up with still a different distribution, but that is where we are now, and it makes us comfortable.

11. If you could go back in time and change things, what would you have done differently?

Start sooner! I started my career in 2006, so I defined my FIRE goals only in year 11 of my career. Think how far would we have been if we had defined them sooner!

I really couldn’t do that much before 2011 – this is when I got my first corporate job in major pharma, and settled things down after my divorce, met my husband and started to settle down. But we should have started in 2012 – so we fiddled around for 5 years (building and paying off our house in the process, but had we started in 2012, we would have built a smaller, cheaper one and invested the rest). We would have also probably done heavy 401k investing, and rebalanced the 401k portfolio sooner, had we known how it all works. My husband has not been maxing it out for ages and sat on $200k of cash accumulating for a decade! Insane move from our today’s perspective.

12. Has discovering financial independence changed how you view your job and life overall?

Oh yes! I have been negotiating my salary much more aggressively. When I know that my job is not forever (because FIRE), I can push harder, and get more of it, so that I can be done sooner. I think I am much bolder at it too – using gamification not just to track my spending, but also to see how high can I get up in corporate life. I have nothing to lose, because I know that we are so close to FIRE that we can make it even if I get fired, so I go for it. And people actually appreciate that in me – the confidence, the bold moves, and the ability to hold it steady in times of stress, things a lot of women in leadership are learning. I believe that my FIRE journey and financial security has given it to me.

I also know that in case my job really sucks, I can quit now, and with a modest lifestyle, I can make it until something else comes up. This is the so called f*ck you money.

13. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds without getting hit with a penalty?

We have some 401k but not much – hubby started in it too late. My Polish equivalent is similar – with very low limits per year, it’s a nice to have, but frankly, I don’t count it towards my goal.

We will keep them in, and research the back door options of withdrawal once we need it, if we need. I hope we don’t need it. 🙂

14. As a parent pursuing FIRE, have you found that having a child has greatly delayed your timeline to FIRE?  On average, how much money have you spent on your child per year?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?

I never really calculated that, but I don’t think so – now that he is on his own, our cost of life has only slightly decreased. Yes, we have been paying for a private school for him, but we have replaced this expense with extra courses for us now, so it’s not really a cost that significantly delayed our FIRE date. Kids are not an expense, they are family – and we do all of that for family.

15. As a parent, what have been some of the most expensive child related expenses from your end?  What are some of the best items or experiences you’ve spent on your child to date? What were some baby/child related items that you thought you needed by didn’t really need?

My son was born when I was in college, and so I was living on a shoestring budget, with a lot of hand me downs, so the answer is – nope, you don’t need “that”. Instead, take that $5,000 you were about to spend on the gadgets you think you needed and see it become a fund for college education for them if you live in a place where it costs money, or for a property down payment if you don’t.

16. As a Polish resident pursuing FIRE, what are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs? What do you estimate your post-FIRE health costs to be per year?

Currently, we’re covered as long as I’m working. After we’re done, we have essentially 4 options:

1. Register as unemployed and get coverage – not really preferred as it rules out side hustles, and it’s borderline unethical…
2. Start a business and pay a fee (this ia also contributed to the retirement social fund) – it’s the most expensive option, but for any teaching hustles or even rentals, it may still work out ok
3. Get the insurance from side hustles – it’ risky as this may be patchy
4. Pay a fee and just get inured

The last one is probably the one we will go for, but we haven’t decided yet. It’s about $150-200 per month, so it’s not that huge. This gives us access to public healthcare.

We have a second coverage, partially funded by my company – private insurance that gives us access to any outpatient doctor and tests. We now co-pay $80 per month for it, and it’s not bad, but if we have to pay much more than that, we will reconsider. Each visit costs about $25, so unless we use it at least 3x per month, it makes more sense to do it out of pocket (yes, private doctor’s visit is $25 in Poland).

We are, as mentioned before, considering EU-wide options for our older age.

17. Where do you see yourself in the next year, 5 years, 10 years?

I am sure we will remain active. We just don’t really know where – we want to travel, but also I want to combine my corporate experiences, with my science background, and mission to make a world a better place – sound cheesy, no?

I know it’s not a very concrete statement, but I don’t see it clearly yet. Female president? UN? WHO? Who knows. Be bold and brave is kind of what I can afford now.

I think we will start with the beach life and sleep and it will get old very fast. So we will be allowing our minds to be idle in order to discover the next big thing. We will be 40 in 2022 when we hit FIRE. We will have both 16 years of professional careers under our belts, and another 30 years of prospective life ahead. We can fit two full new careers there, if we want to.

If we don’t, we can keep calm and beach baby! Isn’t it what FIRE is all about?

18. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money such a taboo topic?

Some do, some don’t. My parents are still not believing me, even thought my Dad retired early in 2012 at the age of 57 – he can’t believe I would walk away from such a salary and career. My Mom is still working, even though she is in retirement age – for her the work is a passion and she doesn’t do it for money. Some of our friends know, and some are even pursuing the same path.

But we haven’t made it official, at work, or with all our friends – a long as we’re still working and growing the careers. And that is why we keep the Instagram account anonymous.

19. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?

Start with your WHY, then with your WHAT, and then HOW. So ask yourself why you want to pursue it, what kind of life are you looking for, and make your adjustments as you go, until you figure out how you can get there.

Don’t treat any of the missed consumption opportunities as a punishment, don’t feel like you’re refusing yourself a good life now, for the foggy life in the future, as it’s like a bad diet – it’s a guaranteed yoyo effect, and you will jump into spending right away.

Rather ask yourself what do you really want in life, what brings you true happiness and fulfilment. And if it is the work, and the daily latte, go for it. But if it is to spend time with your family, enjoy long walks and not being rushed – maybe FIRE is for you, and the daily latte is not worth it.

20. What has been your greatest accomplishment to date?

I am really proud of my career accomplishments – born in communist Poland, I remained there and grew as the country did. I am proud of being able to do great things at work – be it help develop novel therapies, mentor others, or be a disruptor to the status quo – I feel often that I hold a front row seat to the world events, because of my role and what I have done. I know there is a good mix of my culture, education opportunities, and many lucky streaks – so I humbly accept that, but I am still really proud of it, and I want more.

This is what I have learned – women tend to undersell their own accomplishments, and they feel ashamed to admit how awesome they are. Moreover, women tend to admire guys who do this, and condemn women who do this. So as a firm believer in women power, I shamelessly do this and encourage other women to do this – say what you are good at. Show what you are good at. So thank you for this question!

21. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

ModernFImly, Millenial Revolution (and their book, Quit Like A Millionaire!!), Mr Money Moustache, Frugalwoods, and Our Next Life are my go to places for the FIRE motivation and tricks.

22. How can people get in contact with you? 

Find us on Instagram at fire.myself.by40, I am happy to answer messages there!

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Wow, “A”, you have every right to be VERY proud of all your accomplishments!  Here are some of our key take-aways from this interview:

• “A” shows how important it is to have multiple income streams. Not only is their savings rate crazy impressive, they also have built a diversified portfolio with very conservative backs up (i.e. 30% buffer of cash flow coming from index funds + 401k in the background).
• I am sooooo jealous of those living in Europe and access to super cheap/efficient transit to visit other countries at extremely affordable prices.
• Has anyone noticed how us FIRE freaks are pretty in tune with consumption and trying to leave as little of a footprint on the environment?  It’s a win for both your wallets and mother nature once you figure out that a simple life can be a happy life.
• I love “A‘s” comment on going out to eat vs take-out.  We too think of eating out as paying for an experience vs paying for someone else to cook our food to then bring home.
• $50 in property taxes?!?!? Excuse me, WHAT?!
•  I love the idea of gamifying your job and pushing the boundaries because you know you need your job more than it needs you.  This reminds me of my switch to part-time and how a FI mindset allowed this to happen.
• It is SO true that FIREing at 40 means you could still have multiple career changes ahead of you if you so please to keep working.  The beauty of FIREing young means you still have SO much life left to do whatever you so desire with.
• I just love the setup of European countries in which education is for free and public transit is robust so your first form of debt likely doesn’t happen in your late 20s when you purchase a modest size studio or condo.
• Way to speak up about women! We need more successful women out there encouraging others to own it 🙂

Thanks again “A” for being a part of our FIRE Community Guest Interview Series.  Major congrats to her hubby for recently leaving his job and she is sooooo close to her FIRE date – amazing!  In next month’s interview, we jump back to Canada to an awesome minimalist family in Vancouver showing how a simple life is a happy life.  

Did you enjoy this interview? Any additional questions for “A”? Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36

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