My father passed away at the end of 2018. Two days after my birthday. A year later I received a small check from his inheritance and that started me on my journey to become debt-free.

That was December of 2019. The beginning of 2020 showed a lot of promise. I planned a trip to Southeast Asia. I discovered that I had cash leftover from an old medical retirement account and I used some of my father’s money to make my initial debt payment.

I decided not to use my inheritance to pay down all my debt but to build a sizable emergency fund. The reasons were purely psychological. While I understand the amount of interest I was paying for my debt should motivate me to pay that first, I needed a bit of a cushion to feel like I was able to tackle any emergency that came up.

Inheritance to Emergency Fund

We had been there. Nearly bankrupt and trying to make ends meet only to get into an automobile accident and going further into debt. This left me hesitant to use my inheritance and instead put it into the bank. That left me with whatever I was putting into savings from salary to pay down the debt.

I paid off some of the smaller amounts immediately. I used a combination of both the snowball and the avalanche methods to rank all of my debt and then I jumped right in.

When the initial lockdown for COVID-19 was initiated we were already on our way to debt-free. With a reduction in costs, we reevaluated our budget. Using savings from transportation and other work-related costs, we added more to debt.

Painting My Entire Financial Picture

As I went through my entire financial picture I discovered some interesting things. I went back through my retirement accounts from my previous employer and not only realized what I thought was a pension was actually a 401(k).

Additionally, I found out that I had a medical retirement account that could only be used for qualified medical expenses. Since I had left the organization I could use this money now and not wait for retirement. This gave me an extra $4000 to use for debt since I had enough receipts to get the reimbursement.

Painting the entire picture made me look at everything, spending, saving, my business, my job, my car, and even what we were spending on necessities. It was at this time I started the blog. I already had the domain name from another venture that ended years ago. I changed the focus and used it for personal finance.

Rebranding

I went back to my Twitter account and rebranded. I also wrote my first few posts and put them on LinkedIn. I immediately got a good response and reconnected with a few friends from the past.

Writing the blog was more of keeping track of my own life, but if it helped others I was happy. I don’t expect to make much money from this but it helps me stay on task.

The biggest benefit was starting to become a bigger part of the financial side of Twitter. I have already met and interacted with quite a few people and have been happy to learn from all of the others that were there before me.

FIRE and My Future

Learning about the Financial Independence / Retire Early (FIRE) movement I started looking at my own life. Can I achieve financial independence? Can I retire early? I was making more money now than I had been three years ago. Paying down my debt would put me in a much better position to achieve this.

Mapping out my goals I made a plan. To save $500,000 by the time I am 55. Obviously, this was an ambitious goal but looking at where I was and what I had even got halfway there would be a success.

Starting with a negative net worth at the beginning of this year, I began to see the progress. By June I had a net worth of about $20k. By August, I was approaching $40k. Today my net worth is close to $70k. This was a combination of paying down debt, increasing my savings, adding to retirement, and starting an investment account.

Investing in the Market

With the initial lockdowns, the markets collapsed. Many friends sold off their stock but I started thinking now was the time to start. I did a bit of research and found some advice on index funds. After a few weeks, I jumped in feet first. I opened my first account with Ally, however, I opened the wrong type.

Ally offers two types of investment accounts, self-directed and managed. Since I had done the research I wanted to do a self-directed, but the initial account was managed. Deciding to keep the one and open another I put money into both accounts.

Starting at $500 in June I now have $3700. I contributed more as the market increased and am now receiving dividends for both accounts. I plan on contributing more to each moving into 2021.

Adding to Retirement

Now that I was paying off debt and had extra savings I focused on my retirement accounts. Rolling over my old account gave me a bit of a boost. Having all the separate accounts took me a bit to evaluate my finances but having them all in one account made it easier.

This also gave me a good indication of what I would need for retirement. My employer offers free consultations with our account representatives so I took advantage of a virtual meeting in August.

The information I received was that without doing anything I was right on target to retire at 67. This gave me a bit of comfort, but it also motivated me further. If I get a bit more aggressive in my savings and investing I could retire a few years earlier, or retire with a lot more money.

Recently I upped my percentage to six in one account and two in my other. This gives me a combined eleven percent with the employer match. I also automated my savings for my personal investment account and opened a Roth IRA.

Now I have a managed and self-directed investment account, a Roth IRA, a 401(k), and a 457 plan. Currently, all my accounts total $86,861.56. Add that to my emergency account which is just shy of $10k and I have close to $100k saved.

What the Future Holds

I still have a bit of debt and have had to take a break for the holidays but by January most of my debt will be close to zero. The only debt left is my car payment, which I am currently paying extra each month to pay it off early.

Overall this year has been good financially. We have weathered several storms and have been able to focus more on paying down debt.

I realize my privilege and that a lot of other people are suffering. We had been there before and had to declare bankruptcy. Fortunately, we learned from those mistakes. I also have been spending time giving back. Not just writing this blog but contributing time and money to a local anti-hunger organization.

Starting my MBA

Additionally, I invested time and effort into myself. This year I started my MBA and already have made progress. So far I have a 4.0 in the three courses I have taken and plan on finishing it up in the next two years. My company pays for the majority and I will not have to go into debt to pay for any of it.

I am looking forward to what is in store for 2021 and hope that I can maintain this progress. I know there will be some changes on a personal relationship level that I will not get into yet, but I feel like there is nothing that I cannot accomplish in the next year.

My goals:

1. Reach $100k in my retirement accounts
2. Invest more in my personal accounts
3. Save for six months of expenses
4. Continue to pay down debt including my automobile loan
5. Maintain my 4.0 in my MBA program
6. Travel to Korea – when things open back up.

I will turn 50 this next year and I feel like I have just begun to live.