My American Dream

The following post is the first part of our traveler financial investment series. As many of us know, travelers sacrifice time away from their families and homes in order to help medical facilities in need. In return for that sacrifice, we are paid well during our contracts. As a result, some travelers tend to experience lifestyle inflation. A phenomenon where more money only results in extra spending.

However, a few travelers, like our writer today, @TravelTechTawny, have decided to use their travel income more wisely. The following article is a great example of how traveler money can greatly benefit one's life when used and invested properly.

Backstory I grew up in a low-income family in the Philippines. My dad was the only one who worked and there were 4 of us siblings. For those who do not know, the Philippines is a third world country. You either have to work your way up to become a doctor, a lawyer or a very successful business man to be able to say that you’ve made it, or maybe that’s how I saw it. To get there, you need a lot of money or you have to be very lucky. I was given the grand opportunity of living the American dream in September of 2017. Coming to the United States with my work visa, $1,000 and 3 suitcases changed my whole life. I started with a zero credit score when I set foot in this land. Looking back, I remember having to Google “What is a credit score?”. I had no clue how the money system worked here. I started with a secured credit card from Discover and Capital One. It took me 3 rejections to land a car loan in February 2018. A good friend of mine had to cosign to have that loan approved. I was in awe with what I could buy with my US dollar income because I grew up not having much material things. The first 4 years I had spent a ton of money on clothes, shoes, food, flights. I used my credit cards a lot. I wasn’t the most irresponsible though, and I knew in the back of my head that I should never pay any interest fees. I had no budget. I did not tithe. I spent and spent to fill the many years of scarcity that I grew up with. The ability to buy anything I can think of with one swipe gave me a different level of high. It was unhealthy. It was dangerous.

When I Started Seeing The Light It was late 2020 when I bumped into a couple of Instagram influencers talking about FIRE (financial independence, retire early), investments, minimalism and travel hacking. I would admit I had a little Dave Ramsey phase as well. It took about 3 months before I took major action from everything I had learned to become financially free. Those 3 months were crucial because there was so much to absorb. I took the leap in February 2021. My Financial Independence Timeline

• January 2021- Had about $2,000 in emergency fund

• February 2021- Payed off car loan (2 years early) and credit cards in full

• March 2021- Kept saving any extra money towards emergency fund

• April 2021- I opened my very first Roth IRA with Fidelity

• I became financially enlightened and started to only spend intentionally

• I followed more young influencers who have made it and are surely retiring in their 30's

• May 2021- I rolled over my old Roth 401k plus the traditional match into Fidelity.

• June 2021- I got engaged

• July 2021- Heavy planning a DIY wedding. My fiancé, now husband, and I combined savings to fund our wedding.

• August 2021- I got married. Roughly, we spent about $10,000 combined for the wedding. My heavy credit card spending is back in the picture.

• September 2021- I moved in with my husband and started my very first travel assignment. Money was good. We paid off all wedding expenses charged on the credit card.

• October 2021- We refinanced my husband’s mortgage for 2 reasons: 1) To add my name into the mortgage and 2) Lower down our interest rate. We got it down from 4.5% to 3.25%. Big win!

• November 2021- I maxed out my very first Roth IRA. I also had the courage and enough knowledge to explain this whole FIRE craze to my husband who, luckily, agreed to my game plan and helped me speed up the process. Two is truly better than one. Having a plus one is a no brainer.

• December 2021- We opened my husband’s Roth IRA.

• February 2022- We fully funded our emergency fund to $15,000.

• March 2022- We maxed out my 2022 Roth IRA.

• April 2022- We plan to max out my husband’s Roth IRA.

• June 2022- I will be eligible for my agency’s 401K and we plan to max it out in 6 months. We also plan to pay more towards our mortgage principal. We crave being totally debt-free!
  

Recommended Financial Order Of Operations:

-Build an emergency fund (3-6 months of expenses) -Pay ALL debt starting from high interest to low interest, with mortgage as an exception, given you have a low interest rate. Start with credit cards, personal loans then student loans if applicable. -401k/403b up to employer match (This step is the only optional one you can move on the top of this list. Do not say "no" to free money/employer match.) -HSA (max $3,650 (single) /$7,300 (married)/yr) -Roth IRA (max $6,000/yr) -Max out 401k ($20,500) -Taxable brokerage, crypto (Invest all you want!) My Simple Investing Strategy I am way too far from being financially free. Our net worth is at around $100K, with about $30K in investments, $20K cash and $50K in home equity. Our FIRE number ranges between $1M-$1.5M, depending on inflation and our choice of comfort when we retire. For now, we focus on our first million. We are able to stay on the right track because we keep it simple. Every paycheck, we make sure to pay ourselves first. After the bills are paid at the beginning of each month, we follow our personal order of investing. When we check off our to do list for the month, we give ourselves a treat. We do not suffocate ourselves into extreme frugality because we try to avoid burnout. Do not time the market. During the highs and the lows, we keep investing. We buy and hold. Period. Do not pick individual stocks. We only buy low-cost index funds. Always check the expense ratios of the index funds that you choose to invest in. An expense ratio of less than 0.5% is very low and a great choice. That’s about it. Set specific goals. Be responsible and meet your goals. Live below your means. Eat healthy and laugh out loud. Nurture and focus on your relationships. Invest early and invest often, financially, mentally, spiritually and physically. Google is a nice friend if you have questions along the way. This is my American dream. Follow me @traveltechtawny on Instagram for financial inspiration and travel lab tech stories. DM me any question and I will be very happy to answer. Student of life, Tawny