My Journey to Financial Independence

It’s been just under a month since I moved into a new home and pieced together my budget. I’ve kicked thrifty mode into high gear. Since moving into the new home with roommates, I’ve been able to save $140 per month on utilities and Internet, $400 per month on food, and $20 per month on laundry. This house has everything included and I’m excited to find thrifty ways to save money.

The Millennial generation has a ton of financial anxiety that is well warranted. I’m one of them. The Baby Boomers call us lazy and entitled, but they had everything handed to them by their parents. If they didn’t, things were cheap! You could finance your way through college and get a good job. Mortgages were easy to pay for with a good union job. However, wages have stagnated since the 1980s' Reaganomics. Costs have massively increased for our generation and student loan debt is through the roof. What should we do with the Boomers still in charge?

I’m in no way a financial adviser, but here’s what I’ve found when investing and cutting down on costs on my FI (Financial Independence) journey. I’ll review a few of the trading platforms I use below and why I recommend them.

Robinhood is my second favorite. There are zero fees and it has a great interface. Over the past year, the money I’ve invested has increased by about 7.5%. This platform allows you to trade American and International stocks, cryptocurrencies, and ETFs. Even if you don’t have a lot of money to invest, which most of us don’t, 7.5% of $3000 is $225. If the stock market typically grows at a rate of 7% per year, you can expect to have a similar return. The key here is time. The stock market can dip and you don’t want to invest ALL of your savings, but with even $1000, you could end up with $75 more. It doesn’t seem like a lot, but reinvest it and you’ll start to see the gains add up over time.

Acorns in the words of Larry David, is pretty, pretty, good. I’m kind of a fan of the app. It’s been like a high interest savings account for me. I’ve been able to gain 8.2% of my initial investment. Subtract Acorns’ monthly fee and that brings it down to 5.72%. Not great, but 5.72% of $1000 is about $57. I like that the app reduces the amount of money I spend by automatically investing money I make on each purchase. This helps me have less cash in my bank account, which in turn stops me from overspending. The only problem is that $1 fee. I’m not sure I’ll continue to use this account, but it has been helpful in helping me save for future vacations.

M1 Finance has to be my favorite. It has an incredibly easy to use interface and allows you to purchase fractional shares of stocks you may not be able to afford. I don’t have $1800 sitting around to throw on a single share of Amazon. I’ve completely automated M1 and the AI is surprisingly better at picking stocks than I am. I’m up 11% with M1. On $1000, that would be an extra $110 of passive income.

Wealthsimple is a simple program to use for your IRA and it also has a 2% interest savings account. Social Security (The program where your taxes go) may not exist if conservatives keep winning in America. Normal banks like Wells Fargo might give you $.005% interest aka garbage. Startups like the investment platforms I’ve mentioned have a much lower overhead cost and actually give back to their customers, unlike your average bank. Wealthsimple has yielded me a return of 7.3% over the past year. It’s good, but I may rollover my IRA into an entirely free program like M1 Finance.

Despite all of these investment platforms, the most effective way I’ve found to reach FI is to reduce the amount of money that I spend. I’m usually able to save 20% of my income and this is great, but I’ve also been hit by some unexpected medical and car expenses. I thought to myself, what if I wrote out a budget that would allow me to save 40% of my income? It’s actually possible! Cooking at home has been a major factor and motivator to meeting my goal. I’ve got a nice kitchen now and I’ve saved about $400 on food this month by cooking at home and prepping my meals weekly. No more hidden costs of utilities, internet, laundry, and trying to eat out just twice per week. This budget is going to take some discipline and I’m up for the challenge. The hardest aspect? Drinking less beer.

Want to support my blog? Click on the links below. Open an account with any of these services and we both get a reward!

Robinhood - Sign up and we both get a free stock

Acorns - Sign up and we both get $5

M1 Finance - Sign up and we both get $10

Wealthsimple - Sign up and we both get $10,000 managed for free for 1 year.