This series, Small Steps, Big Changes, focuses on people starting the FI journey later in life. They may feel hopeless, overwhelmed, and unsure of how to put their financial house in order.
Does this sound like you? If so, welcome! Reading the Small Steps, Big Changes articles will show you that no matter how late you start, small actions add up and can measurably improve your financial life and sense of security.
The story you’re about to read, though, is different.
Yes, Lory T and her husband came late to the FI movement. They didn’t know about the magic of compound interest, didn’t save or invest much, and expected to work forever.
And of course, the Covid-19 pandemic throws many unknowns in their way.
But all along they have been living intentionally and with awe-inspiring self-sufficiency and frugality.
Hold on tight – their DIY abilities will blow you away.
DIY to Retirement
Meet Lory T
Lory, who recently turned 50, came to the United States from the Philippines at the age of 32 with her husband and two sons, who were four and nine at the time.
Landing in a small town in rural Maine, Lory, an RN, worked about 24 hours per week when her children were young. She arranged that part-time schedule because of her commitment to hands-on parenting, wanting to shape her children’s values and, along with her husband, to be the major influencer in their lives.
“We made enough money to cover our needs,” Lory says, “and would have enough to go out and have fun with the children every now and then.”
“No fancy vacays,” she continues, “just traditions like going to Boothbay Harbor once every summer for a lobster dinner, always getting together for birthdays and holidays, cutting our Christmas tree at a nearby farm every December, and going to Funtown/Splashtown once a year.”
Even Before FI, A Life of Amazing DIY Frugality
“He built our house from the ground up … I make my own soaps and lotions … we grow or raise about 90% of our food.”
Lory says that she and her family started with the “money-saving stuff” long before they got into the FI movement.
“First off,” she says, “my husband and I are big DIY’ers. He built our house from the ground up. He fixes his car and maintains the house, including electrical, plumbing, generator, furnace, chimney, and more.”
“He also fixes the tractor, which we use for rototilling the garden and plowing our loooong driveway in the winter, as well as our TV and computers (he used to build PCs). I cook, bake, and can, and make my own soaps and lotions, lip balms, and face creams, and I sell some, too.”
Her family maintains a big garden during the summers. “I learned home canning and other food preservation techniques,” Lory says. “My husband’s parents raise chickens and pigs, and his brother raises cows for our meat animals, which are slaughtered every fall. We grow or raise about 90% of our food.”
Impressive, right?
At the same time, though, Lory liked to shop on Amazon. A Prime member since its inception (until she found FI and decided it wasn’t worth the cost), she says that online shopping was one of her biggest expenses. She liked to buy tech gadgets and kitchen gizmos, mostly in service of her soap and lotion-making venture.
She also spent as much as $650 on Christmas gifts for her children (thankfully, without going into debt), and sank a lot of money into her hobbies.
FI Goals and Concerns
Although Lory originally thought she’d be working forever, she would now like to reach her FI number in the next 10 to 12 years, so she can retire and pursue other interests.
One possibility in retirement is expanding her side hustle selling soaps and lotions, without having to go back to work if the business fails.
She would also like to explore other hobbies such as learning aquaponics, and to continue with homesteading.
In addition, she hopes to be available to homeschool any future grandchildren if their parents allow her to, and to help take care of her husband’s aging parents if necessary.
Lory’s main concern is that because she started late on this journey, she might not have enough savings by the time she’s ready to retire.
She also worries that she might have to make mortgage payments if her husband does not consistently bring in money from his business. He covers the mortgage, and she pitches in only when he is unable to make payments.
Other concerns include the possibility of caring for her aging parents either financially or physically, although her sister in Canada takes care of them at this time.
Although she and her husband currently enjoy good health, Lory has a history of bulged and ruptured discs, which, while not debilitating at the moment, once left her left leg temporarily paralyzed. Back problems might at some point interfere with the physical demands of her job as a nurse.
Business Ventures
Lory’s Side Hustle
Because of excessive hand washing and use of hand sanitizers on the job, Lory’s hands would easily break out.
Wondering what to do with the excess lard she rendered from their pigs and surplus milk from the cows, she says, “I started dabbling into soap-making and then later lotion-making, which proved to be beneficial in restoring my skin health.”
Considering this more of a hobby than a business, Lory does bring in enough money to cover the cost of supplies.
Currently, she’s focusing on increasing her overtime hours at work rather than expanding her side hustle. The OT brings in more money, and she prefers to work extra hours rather than spend her time at home preparing bottles and bottles of lotions to supply to local stores.
Mr. T’s Business
Lory’s husband manufactures and sells EMP-protected portable solar power generators. He does everything himself, from design to manufacturing to shipping.
Mr. T self-studied Arduino programming in order to program his solar panels to follow the sun or the brightest light source. He designed the sensor and 3-d prints a lot of the parts. He creates his own PCBs for the electronic circuits and solders everything himself, as well as welds the frame to hold the panels.
If you’re not already impressed, you will be when you check out his website.
While Mr. T did a lot of complicated programming for his sun-trackers, he has not sought a patent because of concerns about the expense.
Lory and her husband both feel stymied by their lack of knowledge about growing a business. “Like me,” she says, “I suspect that my husband does not really have the business acumen to boost his profit.”
Saving and Investing History, and Finding FI
“I did not know what to make of the information … the concept was too foreign to me.”
In the past, like many of us, Lory did not give much thought to investing.
At her first job, she contributed only 2% to her 403b plan. After nine years of working there, she only had $10K in her 403b account.
She did contribute to NextGen (Maine’s 529 college savings plan), mainly because of the free money offered through grants and matching funds, but she was not actively saving money.
Lory sums up the confusion so many people feel about investing.
“I did not know what to make of the information I was getting in the mail,” she says. “Although we had newsletters that talked about investments, the concept was too foreign to me. I did not understand a bit of it.”
When she changed employers, she didn’t roll over her 403b right away, nor did she immediately enroll in the 403b plan offered at her new job, although new employees were immediately eligible. She finally signed up after receiving an email about it, first at 2%, then 5%, then 10%.
Finally, her employer offered an appointment with a financial advisor and sent an email with a checklist of items to discuss. That checklist was Lory’s introduction to the concept of Roth IRAs and high yield savings accounts (HYSAs).
“I never knew such things existed,” she says.
She opened a HYSA and convinced her sons to do the same. She tried to read up on Roth IRAs, but they still sounded too foreign to her.
“I just couldn’t grasp the concepts,” she says, but by that time she was seeing the $10K in her 403b grow by about $1,000 or more every year since she left it there untouched.
“I truly realized the power of compounding …”
“I truly realized the power of compounding, and was showing the statements to my sons,” Lory says. “But I still was not sure how to go about helping them with investing.”
Then she came across a free ebook by William Bernstein, If You Can: How Millennials Can Get Rich Slowly. She tried to understand it mainly because she wanted to be able to teach her sons about personal finance while they were still young enough to take advantage of time and compounding interest. She thought they could all learn at the same time.
“I did not fully understand it after the first reading,” she says, “but I liked that it had a list of books at the end of each chapter to read more on the subject he was talking about. That got me into reading up more. And the more I read, the more I understood.”
As a result of reading this short ebook, Lory opened a Roth IRA with Vanguard. Last year, she maxed it out, and almost maxed out her 403b. While she could have invested the maximum “catch-up” amount of $25K, she opted to save a bit more than $19,000.
She also opened some short-term-goal investment funds in Betterment and SoFi, and opened an account with Personal Capital. Lory loves “seeing every account, cash flow, how much I saved, etc.”
Still, Lory feels that she has a lot to learn. “While we are both good with handling money in the sense that we have always lived within our means (and now we are definitely living below our means),” she says of herself and her husband, “we both are not that good with investing.”
Because of the irregularity of his income, Mr. T has not started investing.
Income and Expenses
Income
Lory’s job: Anywhere from $75K (base plus differentials) to $84K (OT’s).
Lory’s Soaps and Lotions Side Hustle: Self-sustaining but not profitable.
Mr. T’s business: Nets about $30K on average.
Expenses
Mortgage: $114K, refinanced last October at 3.875% for 20 years
Home/car insurance: $300 monthly, including car insurance that Lory covers for her sons, or $3,600 annually
Health Insurance: With her employer-sponsored program, she pays $200 biweekly; about $433/month, or $5,196 annually
Short and Long Term Disability Insurance (through work): $47 biweekly, or $1,222 annually
Groceries: About $100/month, or $1,200/year. (Isn’t this an astonishing number?!?)
Gas and car maintenance: About $1,500/year
Debt: $11K remaining on a car loan at 1.9% interest (2016 Rav4 hybrid that she bought brand new)
Streaming services, subscriptions, internet/phone: $90/month, or $1,080/year
Cell phone subscriptions: $80/month, or $960/year
Utilities: $350/month, or $4,200 annually
Heating (wood, oil, kerosene): $2,500/yr
Fun/entertainment (birthdays and special occasions), gifts: $1.5K/year
Cleaning supplies, toiletries, miscellaneous: about $20/month, or $240/year
Investments
Lory has a 2045 aggressive portfolio in a 403b with her former employer, and another 403b at her current job, which she contributes to on a dollar cost averaging plan and currently maxes out. In that one, she has 70% in VFIAX and 10% each in VBTLX, VSMAX, and VIMAX.
She also has a Roth IRA with Vanguard Target Retirement 2040, which she started last year and has maxed out. She plans to max it out this year as well.
In addition, she has an HSA with HealthEquity, on autopilot advisor, with a moderately aggressive portfolio which she does not currently max out.
Finally, she has a 529 plan (called NextGen in Maine, with matching). She might close this unless her older son, who is considering switching from a career in teaching to one in physical therapy, goes back to school.
Steps Lory and Her Husband Have Taken Since Finding FI
In addition to focusing on her investments, and despite the DIY ethic that has saved her family thousands of dollars over the years, Lory has reduced expenses since finding FI.
Cutting Hair at Home
“I’ve been cutting my own hair for about three years now,” she says. “I never was impressed with the paid job, so I figured instead of paying for unsatisfactory service, I might as well buy the clipper and do it myself.”
Getting Rid of Cable
Lory worked on convincing Mr. T to ditch cable and instead to stream movies on Netflix and Amazon Prime. It took a while, but he finally agreed and they now save $80/month.
Leaving Amazon Prime
Also, while Lory and her husband were Amazon Prime subscribers, with their sons riding on their accounts for the free 2-day shipping, she recently discontinued her account (he still uses his account for business purchases). This saves $120/yr. Discontinuing Prime also helped Lory resist the temptation to buy things.
Saving on Coffee, Cell Service, and Water
Other steps she’s taken include switching to a regular coffeemaker from a Keurig, with its expensive coffee pods (not to mention the plastic waste they create); dropping US Cellular in favor of Straight Talk, a less expensive prepaid option; using water infused with the frozen berries she collects during the summer instead of buying coconut water by the case; and eating out less often and more intentionally (special occasions only).
Reducing Food Waste
Lory’s husband used to resist eating left-overs, but he’s become a convert. Now they also make more of an effort to use up what they’ve stored away, including homegrown potatoes, onions, carrots, garlic, and more, which, along with the meat in their freezer, can sustain them for more than a year.
Saving on Gas and Clothes, and Decluttering
Even though her employer provides free gym membership, she works out at home to save on gas and reduce wear and tear on her car. She’s cut back on the clothes and shoes she buys, and has begun decluttering and even selling some books.
Enjoying Life’s Simple Pleasures
Lory and her family enjoy simple pleasures like going to national parks and beaches in the summer and patronizing an inexpensive local movie theater. “Hubby and I both love to read and enjoy movie nights at home,” she said.
“Saving money for us is not too overwhelming. We just stopped unnecessary spending and are more intentional.”
Possible Additional Steps
Lory and her husband are doing great, living well below their means and now (Lory at least) investing aggressively. With their self-sufficient life style and focus on frugality, their future looks bright.
If they really want to accelerate their path to FI, though, they might want to consider the suggestions below.
1. Eliminating the Car Loan
First, Lory might consider eliminating her $11,000 automobile loan by selling her car and buying a less expensive but perfectly serviceable used car.
This makes sense especially because of Mr T’s ability to do all the maintenance and upkeep himself, which he isn’t doing on her 2016 Rav4 hybrid “because of all the bells and whistles.”
I did a quick search on CarGuru.com for 2016 Rav4 hybrids, and saw them priced in Maine anywhere from $16,595 to over $20,000. If she sold hers for, say, $18,000, she would have $7,000 left after paying off her loan, which she could use to pay cash for another car.
It might be hard to go from a newer hybrid to an older, higher-mileage car that runs only on gas – but something to think about if she wants to get rid of debt as soon as possible (even debt at a 1.9% interest rate).
2. Stepping up the Home-Based Businesses
Both Lory and her husband have businesses with the potential to make a lot of money.
Overcoming Mindset Issues
One of the biggest obstacles they face is mindset: the belief that they lack the business acumen they need to grow their ventures and increase profits.
But they’re both obviously highly intelligent, can-do people, with the ability to learn and master new skills if they choose to.
Free or Low Cost Resources for Business Growth
Many resources exist to help with marketing and other aspects of developing a successful home-based business. Skillshare and Udemy offer low-cost courses on everything from social media marketing to website design. Investment in paid online courses can sometimes bring in big returns.
Often a personal mentor can make all the difference; in Lory’s area, an organization called Score Maine provides business mentors to entrepreneurs.
For a success story of a home-based business similar to Lory’s soap and lotion venture, she might want to listen to this episode of the Side Hustle School podcast. It profiles a couple currently making $50,000/month – yes, a month – by selling homemade soaps online.
Other Possible Side Hustles
If Lory isn’t interested in growing her current side hustle, she has many other opportunities for starting a money-making venture that could bring in income to help her reach FI and to continue sustaining her if nursing becomes too physically demanding.
How about making videos teaching people to make their own soaps and lotions? Or videos, courses, or even a blog about homesteading, growing food, canning and preserving, or other ways of living a self-sufficient life style?
Other ideas include teaching in-person classes to people who want to learn these skills. Or how about hosting week-long learning retreats for novice homesteaders, who could help with some of the work of taking care of the garden or food preservation while they gain new skills?
The possibilities are endless.
Growing Mr. T’s Business
Mr. T’s business also has SO much potential for growth, especially with climate change and its resulting severe weather incidents that knock out power for weeks, or months, at a time. Many, many people would be interested in his sun-tracking generators if they knew about them.
From the information Lory provided, it sounds like her husband loves to focus on the design and construction of his products and not on marketing.
He might need to find someone else to manage that part of the business, perhaps a college kid majoring in marketing who could gain valuable experience by working at low cost, or even on commission, to design and implement a marketing plan.
Seeking Help
In Harry Potter, Dumbledore tells Harry that at Hogwarts, help will always be given to those who ask for it. The headmaster could have been talking about real life, particularly those seeking help to grow a business. Resources abound. For example, here’s a list of organizations that offer free or low cost services to help companies in Maine grow.
If Lory and her husband want to grow their businesses, seeking help – online or in person – is the first step.
3. Continuing on the Path of Self-Education
When Lory agreed to interview with me, she said that her main source of overwhelm on the path to FI was understanding the ins and outs of retirement planning, particularly as outlined in the Bogleheads’ Guide to Retirement Planning. The book put her on “information overload.”
I think Lory has created so much positive, forward momentum with her finances that at the moment, she just needs to stay the course. Instead of worrying about the details of annuities and withdrawal strategies, she should keep on keeping on.
At the same time, it always makes sense to increase knowledge and understanding, and in the years ahead as she approaches FI, she will want to have a handle on how to manage her money as she approaches and enters retirement.
Rather than trying to swallow it whole, perhaps she can take one piece at a time. Spend a few months just learning about Social Security, or several months to explore the tax implications of different withdrawal strategies.
If Bogleheads seems too overwhelming, put it down and seek knowledge elsewhere. If anyone has suggestions for easy to understand books, blogs, or podcasts about retirement planning, post them in the comments.
The Pandemic
Lory is on the front lines of the fight against Covid-19. Last we spoke, she was working many over-time hours to cover colleagues who were out sick. She was also facing the scary (and unconscionable!) prospect of working without adequate PPE’s (personal protective equipment).
With their DIY skills and incredible self-sufficiency, along with OT hours at work, Lory and her husband are in a good position to ride out the worst of the economic impact of the pandemic.
Hopefully, she’ll stay the course with her investments and wait out the market downturn, however long that turns out to be.
Lory, thank you for caring for the sick during this difficult time. I’m sure my readers join me in sending out good wishes for your health and safety.
A Lot to Look Forward To
Lory and her husband are in great shape and have so much to look forward to.
Now, while they’re still working, and in the future as they look towards retirement, they enjoy a life they built from scratch. They spend time pursuing passions, appreciating simple pleasures, and being with family.
What could be better?
I want to thank Lory for sharing her inspiring story. She has a lot to teach us about self-sufficiency (especially during the time of corona!) and taking action to achieve her goals, and I wish her the best of luck as she continues on the road to FI.
I love this series! It’s amazing how small steps can lead to big changes over time. I am so impressed with Lory’s DIY skills! And omg that grocery budget blows my mind. Her and her husband have come so far and made so much progress. I hope they making progress and stay safe out there.
Lory is truly impressive! And yes, small steps can make a big difference!