How Kim Saves Half Her Income in an Expensive City | Afford Anything Podcast (Audio Only)

Five years ago, at age 29, Kim E. started her first professional, salaried full-time job, working as a firefighter for the City of Austin, Texas. She received a starting salary of $42,000.
Today, five years later, she has saved:
-- one year’s salary ($40,000) in an emergency fund
-- one year’s salary ($42,000) in a workplace retirement fund
-- more than half a year’s salary ($27,500) in a Roth IRA
She also paid off her student loans ($10,000), paid off her car loan (roughly around $16,000-ish), and contributed to an H.S.A. account ($6,000, half of which came from an employer match.) Oh yeah, and she also bought and renovated a rental property.
Translation? Kim has saved (or repaid debt of) $141,500 within five years, as a firefighter with a starting salary of $42,000, excluding the additional money she’s invested into her rental.
She’s saved more than 3x her starting salary, within her first five years on the job.
And she’s done this while earning a middle-class public service salary in an expensive city.
Wowza.
How is Kim saving half of her firefighter salary? And before she became a firefighter, what other frugal tactics did she develop? How did she put herself through four years of college with less than $10,000 in debt? How did she travel before college, when she used to earn $10 per hour? Where does her resourcefulness and motivation come from? And what wisdom can she share with others?
Find out in today’s episode.
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For resources mentioned: affordanything.com/episode139
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#affordanything #personalfinance

[@harrisonjamie794]

I admire the financial independence of people, But you can live better if you work a little more. After watching this I think there are people out there, on the extreme, who plan to die early just to be able to retire early. To each their own but to me, retirement isn't just about not having to work, it's about having the freedom to do whatever you might reasonably want, such as travel, buying things, enjoying life, etc. I don't think I could retire with less than $3m in income-generating investments, maybe $2m at the very minimum. I plan to work until I'm at least 45

[@MarcelPhilips]

Nobody knows anything, you need to create your own process, manage risk and stick to the plan, through thick or thin while also continuously learning from mistakes and improving

[@harrisonjamie794]

@@MarcelPhilips Having an investment adviser is the best way to go about the market right now, especially for near-retirees, I've been in touch with a coach for a while now mostly cause I lack the depth knowledge and mental fortitude to deal with these recurring market conditions, I netted over $220K during this dip, that made it clear there's more to the market that we avg joes don't know

[@MarcelPhilips]

@@harrisonjamie794 Who’s the person guiding you

[@harrisonjamie794]

@@MarcelPhilips credits to *MARTHA ALONSO HARA*, one of the best portfolio managers out there. she's well known, you should look her up

[@MarcelPhilips]

@@harrisonjamie794 Thank you, I just checked her out and I have sent her an email. I hope she gets back to me soon.

[@thelmaespinel8558]

Great episode thank you for sharing, the only thing I wouldn’t do is live in a house with 12 people, I am an introvert and I like my privacy

[@Juan_Hernandez_Jr.]

That's exactly how I feel. I really want to save money, but I just can't do the roommate thing.

[@devinmason]

I just want to thank both of you for sharing. I just started listening to your podcast and am sharing with my friends! Keep up the awesome work. We appreciate it

[@estherh5595]

Kim is really wise, she shows a trend of making choices with a long term goals and how to do it cheap or free, she asked questions and made sacrifices and has a goal in mind.

[@joseaparecidoconceicao7878]

I think to share a house like she's doing now, even when she can afford a complete one, is a valuable example not only about saving money but as a way to enrich life with more relationships.

[@gloriamitchell3518]

Very thoughtful and learned a lot about managing resources.

[@blushcakes]

Such an inspiration:) Really loved this episode with Kim!

[@christinabernat9681]

Fantastic vid. Thank u.

[@R._L.]

A simple life testimony: modest in form, surprisingly rich in insights. Thank you for sharing.

[@cyncity6873]

FASCINATING!!!!!

[@dyhppyx]

Kim you're super cool. I really admire how you don't need things to feel value in life.

[@kimehardt]

Thanks!! :)

[@carolannstevens5814]

Wow!! The world has so much to see!!! I love Kim’s view! It is freeing!

[@Nate1975]

smart lady

[@threeohm]

Kim has great energy. Inspiring story. :)

[@kimehardt]

Thanks Vik!

[@y.peffle2802]

Firefighters have amazing benefits (my husband is one )

[@MegaSunshineyday]

I❤️this

[@kimehardt]

[@darsiedela-cruz3318]

Yay! Another TESC Greener grad!

[@ShannaTrenholm]

Kim is such a low-key and humble badass! Love this episode. (But she is missing the opportunity to max out her HSA as a long-term savings vehicle--instead of viewing it as a medical expense account)

[@IndianOutlaw1870]

I suspect that she has already maxed-out her savings rate and has no further wiggle room.

[@96ej]

Shanna Trenholm I really wish I was in the position to do that as well. I contribute to mine but if someone was a long-term chronic lung condition I always end up using it. I will say though even as a non investment vehicle for myself it's still an excellent option

[@laurenprada3335]

Hi Paula. I love listening to your show. Two questions for the FI community. 1. How do you use some of your invested money prior to 59 1/2? Are penalties being paid? 2. How do early retirees get affordable health insurance? Thank you!

[@Danny...]

I'll answer your 1st question... You don't. Taxes and penalties will be between 40-50% of the money if taken before age 59.5. You can take a loan on the money with no penalty but there's strict rules about paying the loan back so it should only be done as a last resort.

[@laurenprada3335]

Danny, thank you for answering my question. I’ve listened to a couple podcasts from the FI community that talk about retiring early and living on their investments and I was just wondering how they were doing that? I can’t imagine they’re taking that kind of penalty.

[@sarasuperid]

@@laurenprada3335 There are multiple things that can be done. Some of the investments are outside of sheltered retirement accounts and are taxable in the regular manner. Another option is that Roth IRA contributions (not the growth) can be withdrawn without penalty. So if a couple saved 11k a year in their Roth IRAs for 12 years then in their years between 59 1/2 and their early retirement they can pull the 132k in contributions (while leaving any growth in their account) out to live on in between. Lets say they were 53 1/2 at early retirement age, then they would be able to use 22k a year tax free and penalty free until they reach retirement age. Other little work around rules exist out there too. For example, there is a 401k retire at 55 rule. So if you stop working at the company where you had your 401k after you turn 55 you can take distributions from that account without penalty. Another option. If you had purchased a house and lived in it for over 3 of the last 5 years, you can keep a large portion of any capital gains in the home had can be kept tax free. So selling a home as part of early retirement planning is an option too. There are more complicated schemes that also apply, but those are some simple ones.

[@laurenprada3335]

sarasuperid thank you for the information! Much appreciated 😁

[@threeohm]

forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/

[@GrierSun]

There is something icky about boasting about being "frugal" by "sleeping on people's couches" while out "adventuring." It basically boils down to other people paying for your fun. If they don't mind, it is their business. Personally, I would charge such adventurers. After all, I want to expand my income too. ;-)

[@KelFabian718]

This is a Older post from the podcast

[@oab465]

Fuck, she's a beast. Man you deserve all you have

[@kimehardt]

Thanks Gregg :)

[@ArtzyMad]

An "art model" doing "photoshoot gigs" while living with a high roller in San Fran...? 🤔

[@stephtraveler7378]

The math doesnt work. $42k/yr income and supposedly paid off college, no mortgage, yet bought a rental property, and saved over $150k.... All in a mere 2 years. You're not disclosing all your sources of income or you're not disclosing her real financial situation and she's merely pushing book sales based on a questionable premise. And the more I listen, I hear you hooked up with a rich guy that covered your expenses. Can this channel produce a story where the girl doesn't get the help from a rich guy????

[@IndianOutlaw1870]

It was seven years, not two. Five as a firefighter and another two years of employment before that. 1:04:45

[@kimehardt]

@@IndianOutlaw1870 Thank you. Impressive attention to detail. (note: you were totally right on the maxing out HSA comment. I would if I could!)

[@kimehardt]

Hi Steph, what an interesting assumption! No, no help from rich guy. No help from parents, either. Just a really, really strong drive to not be poor anymore. Please note that $42k was starting salary - it has raised over the last 9 years. And over that time I roll as much of my savings into real estate as I possibly can. I don't know that this is the best vehicle, but it is the one that makes most sense to me (so this is the one that I use). Best of luck to you!

[@namitajain68]

How cheap is this sugar daddy comment! Here's a woman who has struggled and risen through hard work+economizing + 7 years of work. Misogyny much.

[@trythinkingforachange4201]

Bullshit - 12 people living together would be pure hell. How long does that last before fights break out? This is another one of those imagine success, live your dream, you are what you think, con jobs. It may work for a few, but for the rest of us, it's just a fantasy.

[@davewendelken]

Well, you've just convinced me I wouldn't want to share living quarters with you...

[@IndianOutlaw1870]

"Whether you think you can, or whether you think you can't, you are right." -Henry Ford

[@phenton91]

Austin is not an expensive city

[@chrismoore9997]

I hear all these shows about how people making 80k and 100k a year as programmers or lawyers or some other high pay field can safe enough to retire in their mid twenties or early thirties. It actually makes me angry. I want congress to pass a law that taxes them to the point they can't afford to live, so they can feel what it is like to be me.

[@euenfheiejrj]

Chris Moore so bitter. Why don’t you use that as aspiration to make money and be more like them?

[@toobier]

It will take a lot more than being broke for them to feel like as big of a loser such as yourself.

[@midnighttrain3323]

Lol funny trolling comment reminds me of the "occupy Wall Street" people

[@IndianOutlaw1870]

Total loser comment. Disturbing.

[@tinawelch2545]

Hi Chris, could I ask how much you make?