As a member of the personal finance community, I’m amazed at how many people are a part of it. Unfortunately that often means that I can’t always keep up with everyone. It’s a shame because there are some wonderful bloggers with their stories and advice on handling finances responsibly and with fun.
To counteract that and get the word out on other sites, I’m interviewing bloggers in the community. Pauline from Reach Financial Independence is the star this week.
What inspired you to start Reach Financial Independence?
I had been writing for several travel blogs for years, and after over 5,000 posts, I was burned out and wanted to get out of the travel niche. I was reading PF blogs and felt like I could add my voice, especially when it came to living abroad, early retirement and deliberate life choices. I started RFI two years ago, then another blog called Make Money Your Way where I talk about ways to make extra money by investing, improving your career, freelancing and online endeavors. Then I bought a third site, The Savvy Scot 9 months ago, which has a focus on saving money and self improvement.
There are a lot of financial independence blogs that are covered by people who have amassed quite a bit of investments. You’re tackling it from another perspective – becoming financially independent even more the fortune rolls in.
How did you decide that this was the FI path for you?
Ever since I graduated college, I knew the traditional route was not for me. I always chose time over money and wanted to find ways to become independent and work wherever I wanted, whenever I wanted. So I lived in four countries while working decent jobs and saving money, and finally left my day job in the UK almost five years ago, to live life on my own terms. I could live off investments, but it gets boring to do nothing, so I relocated to Guatemala, bought a small house that I turned into a guest house, a 90 acre piece of land that I am developing into a residential complex, and I am blogging in the side.
I also ventured into trading, invested in cattle and other alternative investments as a way to diversify. I believe that with a high rate of savings, you can become independent in just a few years, even if for some it means you still need to hold a part time or freelancing job, you still get more free time than the average employee. I could have waited more until I had a big nest egg, but I guess I was impatient, and I also believe that if everything goes wrong and I need to go back to work someday, I can find any minimum wage job quickly and start again from there.
Fear is often your biggest barrier, without fear, you can open many doors. For example I took some risks by investing big sums and depleting my savings, which worked well and gave me a higher return than a safe 0.5% savings account, but I realize that it is not for everyone.
RFI had a post about how mind-set can trump strategies when it comes to financial independence. Could you get into that more?
There is no get rich quick strategy that works without huge risks. The secret is sticking to a high savings rate and smart moderately risky investments for a long period of time. Like a diet, it can get really boring after a while, unless you have the right mindset. It can seem like a daunting goal, but if you take a small action every day to reach it, you will.
You own property, including a place you rent on AirBnb. For those interested in having rental property, what’s been your experience? How hands off/on is the rental?
My little house in Guatemala is open to travelers who wish to rent it short term. Compared to traditional rental property, this is pretty hands on. You have to prepare the place every time a guest comes, clean it, change the soaps, we even cook them meals if they wish, meaning I have to be on site or pay a staff to attend guests. Generally they won’t tell you at what time they’ll arrive so you wait until they do, wait until they are ready to eat, then clean and wait until they go to bed. It is time consuming.
I still own a rental in the UK which is very hands off. I bought the property new so maintenance is minimal, I find new tenants online, the old tenants show them around, they pay via online transfers. It is as close as it gets to passive income. But I wish I was closer sometimes, just in case.
What’s the biggest financial mistake you’ve ever made? What have you learned from it?
I would say tying my money for long periods of time when I didn’t know what my life would be for the next few years. For example I bought a rental property in Paris before leaving for a year to travel, then settling abroad. Managing it from the distance was complicated as it was not a good tenant, and several times I had opportunities to invest elsewhere that were much better and for which I wish I had had the cash. I try to think things through now before committing big sums to long periods of time. There will always be another opportunity so no need to rush to grab the first one.
Finally, what are your goals for the next year on RFI?
At the moment, my blogs are a hobby, not a business, so I don’t have any big business plans, although I do have a goal to make $60,000 blogging this year which is on target!
On RFI, I want to keep bringing a different approach to money and life. I live an unconventional life and that is what my readers like to hear about. I will keep talking about more general money topics on my other two sites. RFI has recurring posts about life in Guatemala, how my projects are going, how 10% of my income goes to education and computer literacy projects in my village, and so on.
I want to keep showing people that you can live any life you choose if you are determined to make it work. It can be staying in your hometown and having more time for your kids or for a side project, making enough money to travel the world for a year, whatever suits you. As long as you work for it you can reach anything.
Thank you Pauline for doing the interview!