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041 | The High Cost Of Living Path To FI

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In today’s podcast we discuss the High Cost of Living Path to FI with ChooseFI community members Paige and Sam who live in Los Angeles and have been pursuing FI in a HCOL with sub-$50,000 per year jobs.

Podcast Episode Summary

  • Episode 41: A conversation with Paige and Sam about pursuing Financial Independence in a high cost of living area on a lower income
  • Paige pushed back on our limiting belief that you “can’t” achieve financial independence on a low income in a high cost of living area
  • Sam introduced Paige to MMM but Paige ran with it from there
  • Paige’s back story
  • Paige had a negative net worth in her mid-40s
  • Since Paige has earned and lived in the $30,000 range she is used to that and now that she’s making more she can save that difference
  • Paige intends to hit early retirement in 2025 and has a 50% savings rate
  • She uses her Roth IRA as an “emergency fund” since she can withdraw the contributions at any time tax and penalty free
  • Sam’s story behind retiring “early and often”
  • He did not have student loans and also his parents modeled investing for him well before he was earning income himself
  • Sam’s parents always put gifts and other money into his investing account instead of giving it to him to spend
  • Sam is technically at his FI number, but he does still continue to work
  • Sam’s history of his apartment renting in Los Angeles and sharing apartments with roommates to lower the costs (over a 20+ year period)
  • Sam has never made more than $50,000 in a year
  • Having to be slightly more intense to reach FI in a low cost of living area. The best way being to live with roommates and not having a car payment
  • They don’t buy new items – the “alley provides” and they can find free stuff on the street or at Goodwill, etc.
  • They are very deliberate and intentional about saving money on food and groceries
  • Limiting beliefs on why people like Paige and Sam couldn’t retire early and pursue financial independence and why they rejected them
  • The big three items they can control: Housing, Transportation and Food
  • There are so many free activities in a big city, so it is easy to keep a nearly $0 entertainment budget in a city
  • They are not minimalists at all, but they just don’t buy new things.
  • Sam is an extreme DIY-er and picks
  • How did Sam become a DIY-er?
  • You don’t have to agonize over decisions when you aren’t trying to maximize or perfect each buying decision
  • How they approached their home buying decision differently with the mindset of people who can fix essentially anything
  • Buy a house that is just bad enough that the flippers don’t want it – per Paige
  • What is the long-term play for their new house? Do they intend to buy other homes to fix and sell?
  • Extreme ownership of your decisions and knowing what you want
  • Paige’s plan for early retirement and how to make it to 65 and social security where she’ll get a ‘big raise’
  • Hot Seat questions

Listen to Brad and Jonathan’s thoughts about this episode here.

Links from the show:

Books Mentioned in the Show:

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.
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