How to Retire Early Even If You Have Kids

Updated : Sep 11, 2019 in Articles

How to Retire Early Even If You Have Kids

Robert Brokamp: In the earlier days of when
I first discovered this whole movement many years ago, many of the people I came across
were people like Vicki Robin or other people who, frankly, didn’t have kids. But more
and more it does seem like people are doing it. They’re able to raise
families while living this. Do you feel comfortable with any of the trade-offs
you might have made, or do you feel like this actually hasn’t been that difficult?
Brad Barrett: I have two young daughters. I have 10-year-old and
a nearly seven-year-old. I think they’ve lived this wonderful life
of abundance because we spend time with them. What do kids want?
They want time with their parents. And I’m not at work all the time. I’m there at home so when they
come off the bus, I’m there with them. We come home. We run home.
We play board games. I mean, I’m playing board games
at four o’clock on a Wednesday. How crazy is that? It’s almost hard, honestly, for me
to imagine that this is real sometimes. Seven years ago when I was working
in an office, this would have been impossible. My daughter Anna knew me in the pre-FI days
and the post-FI days and now she’s getting to, I guess, experience this
life where I am there all the time. So to me, I don’t know what
the trade-off is, honestly. I search for it, and it’s almost like it’s
hard to imagine sometimes what people are spending money on. What they prioritize
over spending time with family and friends. So for me it’s such an obvious choice.
Like what am I giving up? A 2018 BMW as opposed to my 2003 Civic? And you mean I get to spend all this time
with my kids and watch them grow up? That’s so obvious to me. I couldn’t even fathom anyone making the other
decision when it’s presented to them in that manner. But sadly, people don’t think
about that. You go through life. You see what the Joneses next door
are doing, and you emulate it, because sadly we don’t have financial education in
this country. People don’t learn how to do this. They don’t learn what it
means to spend all your money. So I guess I’m fortunate that
on some level I was this natural saver. But I think what’s beautiful about what
we’re trying to do in the FI community is we’re trying to open people’s eyes
to the fact that this is possible. I’m just a regular guy.
There’s nothing special about me. I just happen to be a saver. And even if you aren’t that saver —
even if you’ve made mistakes in the past — you can start today and take action.
So we talked about those levers? Make some choices that will
provide you some space. Will provide some savings
rate and move forward from there. Brokamp: One thing some parents
might think about is college. At some point either you may decide to save
for college or not, or some parents will decide that kids are on their own for college.
What’s your take on that? Jonathan Mendonsa: This community
is a crowdsource community. It’s one of those where best practices rise
to the top, and we find that while you and I might have trouble thinking of a single
solution for our kid; as a whole [as a collective group of people], there are ways
to do college more intentionally. Smartly. There are ways to do college for less. So if MSRP [to grab a term from the car industry]
for college is estimated at $300,000 for my two-year-old to go to college when he’s 18,
there are plenty of people who have a plan to do it for less $40,000. There are plenty of people that have a plan
to do it for nothing, because they know how it works. And I can think of several examples that have
risen to the top which I would be happy to share with you; most notably in Virginia. In Virginia, we have guaranteed admissions
programs in like 23-plus public universities. Barrett: The University of Virginia and
William & Mary, so we’re talking top-tier universities. Essentially you go to a Virginia community
college, you get your two-year associate’s degree, and you check a number of boxes.
You need a certain GPA, but it’s not a 4.0. [I believe it’s a 3.4 that’s in the contract]. This is an actual contract between the Virginia
community colleges and the Virginia university system. So you look at this contract for UVA and
you take X number of courses. You get a 3.4. You are guaranteed admission to UVA.
UVA is one of the top 25 universities in the country. Now as a high school senior,
you need a 1500 on the SATs. You need a 4.2 GPA to get into UVA. Well, if you take the somewhat
unconventional choice to go to community college, you are guaranteed admission to UVA. So you go for two years at a tiny fraction
of the cost [even as compared to a public university], get your associate’s degree,
go in as a third-year student in UVA [or William & Mary, James Madison, or any of those
Virginia universities] and finish up your two years and you’ve got that degree from
that university. That’s amazing. That’s essentially half price right there. Mendonsa: And that’s just
an anecdote for the Virginia area. There are all sorts of little outlier events,
but they don’t necessarily have to be outliers. They’re outliers because
we’re not talking about them as a society. We’re not highlighting them
for our community. There are certainly public programs
that I would like to see expanded. There are things that I would like to see
done to make college more affordable for everybody. But when you’re talking about what I can control
for my kid — with what I can do now — you need to also look at the
scholarship side of things, as well. There’s an app called Scholly.
There’s I know an individual in our community,
and what they did for an entire summer is they looked at the common threads between
all of these different scholarships? Are they merit scholarships?
Are they based on your ethnic background? Whatever it may be, realizing that there were
these common themes, he said there’s probably seven different types of scholarships. He created a template for each one of those
different types, and once he had the templates, then he just rolled through 10 applications a day.
He was getting like 10% to 30% acceptance rate. Think about just doing that instead
of a summer job. Is that an option? If you start looking at your ROI, it so vastly
outperforms your minimum wage job that you got over the summer, it’s truly insane. There’s a caddie program [a Caddie scholarship]
if you act as a caddie while you’re in high school. You can get a free ride to Purdue.
I think that’s called the Evans Scholar Program. There’s a firefighter scholarship. There’s the HOPE
scholarship if you’re down in Florida or Chattanooga. It’s based on the lottery system. I say all this because you couldn’t possibly
write that down and act on every one of these, but what if you had a community of people
that were not just doing it, but documenting it with other people in the community and
best practices rose to the top? And you said, “You know what? If you’re in Tennessee, this is
what you should be looking into. If you’re in Virginia, this is
what you should be looking into.” Can we solve the problem as a society from
this particular podcast platform? Maybe not. But can we highlight for our community what
options are available so you can take ownership of it? Instead of saying, “$300,000. $300,000,”
what if we could just bypass college altogether. This is all, “Hey, college is going to happen.” But right now we know that society is trending
increasingly away towards either a gig economy, a “what have you built economy,” or one
where you look at trade schools. Trade schools in your traditional sense,
but also what about software engineers? We know that you can self-teach this stuff
and we know that plenty of people, if you have taught it to yourself,
are willing to give you that first shot. And we know that once you have
your first job, your degree rarely matters. In fact, an individual I was
talking to is a CEO of a startup. He doesn’t want me to name his name,
because he doesn’t want to be behind this, but I’ll put it out there.
He says, “I’ll be honest with you. Having an MBA actually holds you back a little
bit, because I want to see what you have built. I want to see that process.” And so we have got to understand that the
rules are swiftly changing beneath our feet and not just assume that
it’s college at all costs. Not just assume that it’s
$168,000 in debt for everybody. Barrett: So I think to summarize that it’s
just looking at the problem differently. I think this is how we view the entire FI community
is look at your life, look at these issues, look at these problems,
and just think a little bit differently. Unconventional thinking can get you
further in life and this is a perfect example.


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