- BI spoke to three late joiners of the financial independence movement.
- They began saving and investing in their 40s and 50s and preparing for early retirement.
- Their strategies range from safe investments to living on the bare minimum and strict budgeting.
Gina Murilo was on the verge of turning 50 with nearly $40,000 in consumer debt and just $69,000 saved for retirement. Now nearly 57 and living in the Chicago area, Murilo has a net worth of more than $1.1 million and is on track to achieve financial independence within three years.
Murillo had a child in her early 20s and worked a variety of jobs to support her family. She was a single mother for most of her adult life and didn’t receive child support. After working as a paralegal, she graduated from law school in her early 40s, but she didn’t like her job as an attorney at a big law firm. At age 49, she took a job that nearly doubled her salary.
She became interested in the financial independence movement after reading blogs like Mr. Money Mustache. She accepted a $35,000 pay cut to join a small law firm, which set her on the path to financial stability.
“If these people were able to achieve FI in less than a decade in their 20s and 30s, I saw no reason why I couldn’t do the same in my 50s,” Murillo says. “What I lost in salary, I gained in work-life balance.”
She created a debt repayment plan and saved about 40-50% of her net income of $120,000-140,000. She tracked all her expenses, cut out unnecessary ones, and invested a portion of her income. She paid off her debt within 18 months and improved her investment strategy to get higher returns. After a few years, she loosened her spending habits, including on things she valued, while still keeping her expenses low.
“When I started this journey, I thought I’d never retire,” Murillo said, “and now I’m just a few years away from retirement.”
Though Murillo started her path to financial independence later in life, she’s one of many Americans who are on pace to achieve their goal of early retirement. While there’s a lot of attention in the community to those who retired well before 65 or started on that path at a young age, Gen Xers told Business Insider they’re working to bring attention to “late bloomers” who are digging their way out of years of debt or only started budgeting in the middle of their careers.
Late-start investors told BI that many of their financial goals are achievable despite years of financial uncertainty, and while they all say it took years of hard work to get back on track, they agreed that their strategies are not out of reach for many Americans.
The path to financial independence
Bill Yount, 57, grew up in a middle-class family, went to a state medical school and became an emergency physician in his early 30s. He finished his residency with $30,000 in credit card debt and “a bit of” student loan debt.
His success in employment led him to undergo lifestyle changes: he got married, bought a big house in a good neighborhood, had two children, and bought a new car, all of which put him in debt.
“We got caught up in what I call a 20-year funnel of life: raising children, working two jobs, relatively high income from being a physician, but a paycheck-to-paycheck lifestyle, with an inflated lifestyle as the paycheck goes up,” Yount said.
During the Great Recession, he and his wife sold many of their stock holdings out of fear of another economic downturn, resulting in long-term losses. All the while, they didn’t prioritize saving for retirement.
By the time he turned 50, he and his wife had a net worth of nearly $1 million, but he realized he needed a change and set a goal of having $2 million saved by the time he retired.
Yount read dozens of books on personal finance, listened to hundreds of podcasts, and started tracking his spending, especially after his wife returned to work full time. He adopted simpler investment approaches, like Vanguard Total Market Funds and short-term and intermediate-term Treasury bills. He also dabbled in real estate, but it didn’t pan out as well as he expected.
His savings have increased to about 40% of his total income, and he’s cut his living expenses by moving to Tennessee and downsizing his home in half, using a method he calls “backward budgeting” — saving a big percentage of his income and basing his spending around the remaining amount.
In less than a decade, he and his wife have grown their net worth to more than $5 million, and he’s used his success to help younger entrepreneurs with his podcast and website. Catching up with FI.
“Late starters feel isolated and embarrassed, and they don’t want to tell anyone that they’re not good at talking about money,” Yount said, adding, “Late starters feel unspoken in the financial independence movement, and that’s when they find us. They all say they’ve found their people.”
Strategies for latecomers
Jackie Cummings Koski, 54, grew up “very poor” in South Carolina, one of six children raised by a single father, and to pay for her college education, she worked 50 hours a week while attending classes.
Her first job was in corporate communications for Walmart, then she became a store manager in Ohio, she got married a year after graduating college, had a child soon after, and sold her Walmart stock to put a down payment on a new house.
When she faced a divorce in the mid-2000s, she discovered that her ex-husband had saved far more than she had: She had just $20,000 in her 401(k), while he had more than $120,000 in investments.
A single mother, she took time to regroup in her late 30s and began learning more about finances while working as an account manager at the data analytics company LexisNexis. Through an organization called Better Investing, she joined the Model Investor Club and learned more about investment strategies. She began maxing out her 401(k) and health savings account, with the goal of achieving FIRE.
She started investing in 2008, when relatively low prices in the aftermath of the financial crisis allowed her to get high returns on many of her investments. She invested in growth index funds through Vanguard, which were less risky than individual stocks.
She attributes her financial growth in her 40s to people who helped her understand financial topics. She used to worry about not having enough money for retirement, but after listening to advice from podcasts, she created a plan for what it would take to save 25 times what she spends. She didn’t want to wait until she was 65 to put her money away, so she learned how to withdraw money early from her retirement accounts.
She acknowledged that her trip wasn’t perfect and said she could have put more money into a brokerage account, sold her spare car and cut back on some things, but she said it freed her up to spend money on vacations without having to budget every penny.
By age 47, her net worth reached $1 million, which was roughly 25 times her expenses. Because she had never made six figures in any role, she wasn’t mentally ready to retire yet, so she worked two more years and retired with $1.3 million.
She then went on to earn her Masters in Financial Therapy and Personal Financial Planning and became certified as a Certified Financial Planner and Certified Financial Counselor. Over the past few years, she has served on the advisory boards of various financial institutions, provided consulting services to organizations, been a financial educator for startups, co-hosted Catching up to FI, and written a book called “FIRE For Dummies.”
“Anyone can Google it, anyone can read a book, but you don’t know what you don’t know,” she says. “I’m a firm believer that evangelists matter.”
Are you part of the FIRE movement or live by its principles? Contact this reporter. nsheidlower@businessinsider.com.
