Think Personal Finance is hard? Poppycock!

46 thoughts on “Think Personal Finance is hard? Poppycock!”

  1. You don’t have to be gifted to understand personal finance.

    Furthermore, the gifted / smart / well heeled aren’t going to be good with personal finance without an education and interest in it.

    Physicians are by most measures fairly intelligent people. But many are lousy with personal finance. Most don’t take the time to learn, even though it’s much simpler than the stuff we need to know to perform the day job.


    1. Appreciate the comment, PoF. I agree, this stuff is much simpler than what most doctors do for a living. You don’t need years of med school to figure out personal finance. In fact, you don’t need much school at all.

  2. You are spot on with this Steve and I wonder what your thoughts are on whether the movement toward FI has increased because of people like you explaining things this way? I understand there are millions of people (at all income levels) who will never “get it” – but are the numbers of people “seeing the light” to FIRE increasing? It seems like it to me. Learning and staying the course is key!

    1. Thanks Vicki! I’m not sure if this has influenced the FI movement, but I sure as hell hope that it has. My goal is to make this subject as approachable as possible by anyone. Honestly, I think people do understand what it takes, but they aren’t necessarily willing to DO what it takes to get there.

      And then there are those who just believe that you gotta make hundreds of thousands of dollars and “get lucky”. Those people are lost causes…

  3. Goes to show that you don’t need to be in the top 1% of your high school (GPA-wise) to be successful. And now you are likely in the top percentiles for income and wealth and choosing to retire early! Not saying school isn’t important, but there are also a lot of other important factors in life.

    1. Thanks Green Swan. I absolutely agree – it’s not that school is *completely* meaningless, but it definitely doesn’t prepare you to retire early. I SHOULD instill the basics of personal finance, though. It seems like some schools do while others don’t.

      My school certainly didn’t.

  4. I remember getting drummed out of the advanced math class in 8th grade, had no business being there.

    There are a lot of misconceptions around what it takes to retire early, or even retire at the “normal” time comfortably. What you laid out above smashes all those thoughts and you are going to be walking proof soon enough!

  5. I was a little embarrassed when I went looking for answers on how to clean up our debt. Personal finance boils down to common sense. How could I have overlooked this for some many years. It was the behavior piece we had to overcome. Once we did that it was pretty easy.

    This is a life skill all high schools should be teaching for gifted, smart, average or any student that will listen.

    1. It’s amazing how common sense it really is. I do acknowledge that it’s easier for some than for others, but that definitely doesn’t mean the same principles don’t apply. They do. It all starts, like you said, with a little common sense.

  6. As a teacher (and former student!) of a gifted program, oh boy…do I agree with you! My favorite part of seeing old classmates is how many of them talk to me like I’ve fallen on hard times since I’m “only a teacher”. In public education, giftedness basically means you did really well on a handful of standardized tests when you were really young. Parts of it are wonderful because kids really are challenged (more?). But you are spot on. There’s a beautiful simplicity to the basics of personal finance that we just don’t focus on as a society. I love this! It’s all about trying to make the knowledge more accessible.

    1. Thanks Penny! I was a horrible test taker. I would completely over-think questions when the answers were so obvious. I remember beating myself over the head once I got my graded paper back. “Oh, of course!” was a common utterance in my school days. 🙂

  7. Oh my gosh, YES! I was in gifted programs, and did we get any more instruction in personal finance? In how to be happy? NO! I definitely don’t see my former gifted classmates living an better than anyone else. I know that being in that track in school helped me in some important ways, but as Penny said, it just means I was good at a few tests, not that I was better at life. So, so true that anyone can learn about PF and understand what it takes to retire early!

    1. In my case, former gifted students are doing…okay, just like me. They have regular jobs at regular institutions around the country. That’s not to say that some of them aren’t “above and beyond”, but that’s also not to say that non-gifted students aren’t “above and beyond” as well. Once school is over, your “giftedness” takes a back seat to the realities of life.

      Thanks for your comment!

  8. Learning about personal finance is pretty simple! I guess some people’s financial situations are a bit more complicated, but the average person can follow this advice without too much complication. Definitely don’t need to be “gifted.” Whatever that means.

    1. Thanks Kalie. I definitely agree, this stuff isn’t tough in concept. The hard part can be applying it to your life, but even that need not be overly complex. We tend to make things more difficult than they need to be, sometimes. Okay, many times… 🙂

  9. Nope, it’s definitely not complicated…and I wouldn’t say I’m gifted at all. We didn’t even have a gifted program in school!

    But I will say that I’ve got smarts in a few spots, and I’m actively trying to develop the skills and smarts in a few spots. Personal finance is just one of those spots.

    I believe doing something with conviction is more important than being gifted.

    1. You definitely have the right attitude, Mr. Tako. You know where you excel and also where you might be weaker, and you work to improve your weak areas. That’s what we ALL should be doing in life!

  10. There is a horrible irony in being well educated such that we can work in a great job, to get onto the housing ladder and to enhance our lives by acquiring cool stuff. Social media, peer pressure makes that worse for most.

    I had a conversation with a colleague who has a Ph.D. and nearly twenty years of innovation in his career with multiple granted patents to his name. He is as smart and gifted as they come. We were discussing the retirement of another colleague and when I mentioned the importance of low costs within his 401K, he looked at me as if I was from moon base alpha!! Questions ensued about “how to find out about the costs he was paying”, “what can I do about this”, “why does it matter”. It was enlightening and sad at the same time. A few screen shots from the “help section” of our 401K site had him on his way. I will be following up with him in a couple of weeks to see what he has learned and done, if anything…..

    1. So many intelligent people “don’t have the time.” I used that excuse for quite awhile.

      Yet, I had time to devote entire weekends to watching football, hours every week to watch movies or TV. Staring at the Facebook feed, etc…

      It’s more of a lack of motivation than time. I think I failed to understand how easy it would be to understand the principles of personal finance. It only gets easier with websites like yours and many of the other commenters.

    2. Interesting story, Mr. PIE. That doesn’t surprise me too much, but it’s always interesting to observe the personal finance habits of those who are deemed “smart”. I suppose it just goes to show that regardless of how smart we are (or think we are), there are always areas ripe for improvement.

  11. I like to say that personal finance is “simple” but it isn’t always “easy”.

    Understanding what needs to be done really isn’t rocket-science. Building the discipline to stick with the plan is much more of a challenge though – that’s the “hard” part. It’s the emotional pull of “I want it now” versus the logical drive toward financial security.

    1. I completely agree, Brad! It’s the discipline to apply sound personal finance habits to your life that’s the challenging part. That’s the toughest hurdle to pass, but once we do, it’s all just a waiting game them.

  12. Personal finance is a lot like other topics, easy to understand once you do the research. Want to lose weight or gain weight? Read about macro-nutrients and stop wasting time on fad diets. What to learn about investing the easy way? Read about index funds and ignore the investments being touted and advertised. Want to buy a used car? Read about negotiating so you don’t overspend. A lot of topics are easy to understand once you put the time and effort into researching them.

    1. “A lot of topics are easy to understand once you put the time and effort into researching them.” – It’s funny how that happens, isn’t it? If we want something bad enough, we tend to be able to figure out a way to make it happen. All of us in the PF community are doing just that! 🙂

  13. I was not a “gifted” child either and struggled in a lot of subjects, similarly to you. I read slow, and often missed the content and it took some time before the math lessons would click. But I did learn that if I stuck with it, that I would eventually get it. I didn’t need to instantly understand a subject to know that I could learn it. Many of the gifted students in my school (not all) barely had to work to grasp a subject. They tended to be lazier for it. For FI, what you really need is perseverance and follow through, with a dash of discipline.

    1. “For FI, what you really need is perseverance and follow through, with a dash of discipline.” – Well written, Jolly Ledger, and quite accurate!

      Thanks for your comment.

  14. #1 is what resonates with me the hardest, Steve. That lead into #2 (stop spending money) and eventually to #3 (invest the surplus). I like the logical flow to the 3 step process. As each day goes bay, I want to be financially independent more and more. As you say, personal finance is easy. There is no need to pick ‘fancy’ investments where there’s plenty of target date and low cost index mutual funds out there now. It seems like when you talk investing with some, they gravitate towards a high powered stock broker or someone to pick their investments. You do not need to scour company financials looking for the next Tesla or Apple. You can do well with mutual funds and reduce your risk at the same time. It’s easier now than ever to save, invest wisely, and create a balance portfolio that yields great returns for perpetuity.

    1. Hey Josh! I don’t believe there is much to be gained by getting into the weeds with investments and stock options. Sometimes, so-called finance professionals want to make it seem complicated so you enlist (read: pay for) their services, but it need not be that way. We can all make investing insanely easy. My wife and I sure do.

  15. Great post! It’s funny, both of my kids “qualify” for the gifted programs and both utterly refuse to participate. One says it’s “too much work” and the other just doesn’t want to be singled out. I let them make their own call.

    Personal finance is simple – much less about the numbers than the mindset. It’s #1 that people have the most trouble with, but is the thing you absolutely have to have to get anywhere. If you say you “should” pay off debt or save more money, you don’t really WANT it bad enough. The changes can be hard, but if you have the burning desire for the results, it’s much more likely to happen.

    1. Good for your kids! I thought the very same thing, too, when I was in school. I didn’t qualify anyway so I wasn’t even given the choice, but the last thing that I wanted to do was…more work. That seemed hellish. Your kids have natural economic sense.

      Thanks for your comment, Amanda.

  16. Since I early retired in April, many people are asking me how I pulled it off our what the “secret” really is. As you write, I am always amazed by how people overcomplicate early retirement. For the most part, it is simple math. I often tell people save half your income and you can retire in 16.5 years. That’s a simple way of stating how straightfoward the math is.

    1. You say “retired”, but I say “made me insanely jealous”. 🙂

      And you managed to put this even more simply than I did. Save at least half your income and you’ll be retired in a decade and a half, even if you’re just starting out in your career. Kick up your savings even more and retire IN a decade.

  17. Steve,

    I gotta say that I luv your outdoor pictures from your previous articles!! I can’t wait until I retire in 3 years.

    I agree with you 100% on steps 1,2 &3.

    People on these financial blogs are NOT NORMAL! We usually hate our jobs and we become frugal to save money to reach FI by investing. We want our money to work for us instead of we working for money.

    Most ppl are trained to consume and to only save 15% of their income which will take 43 years and they will be 65 when they retire.

    From day one, we saved 50% or more of our incomes. For the last 5-6 years, we saved 85%. We are late to the FI party when we reached FI 3 years ago at age 49 with tax free munis. It is GREAT that you and the many bloggers that did it so young! It does help having a larger income but IT IS WHAT YOU SAVE THAT COUNTS!!! Since we are ULTRA financially conservative, we will have passive income 3x expenses with our munis, pensions at 55 and 401Ks at 60. With SS at 62, we would have 3.5 times expenses.


    1. I don’t know as if all frugal people working towards FIRE hate their jobs. I definitely am not in love with what I do professionally, I would just rather have more time to do my hobbies. If I truly hated my job, I would find something else even if it meant a pay cut and delaying FIRE by a few years. It’s better for my mental health to halfway enjoy my working time before I exit to a life of relaxation.

      Plus, many of us still work in our early retirement. It’s funny how a hobby can turn into a money making venture given the time.

      I honestly do not believe that many professionals realize the math behind early retirement. It’s fun to have the stuff, but once you realize how it sets you back, the stuff does not seem as important. Educating those not in the know is what this (and other) blogs are all about. I honestly had not through about extreme early retirement until after I went through Dave Ramsey and found MMM looking for ‘what’s next?’. Prior to that, I figured retiring around 55 was early.

    2. Hi Adam,

      First, appreciate your kind words regarding my photography. Thank you!

      Congrats on only being three years away from retirement! And it definitely sounds like you guys are completely setup for retirement. Passive income beyond your expenses is an incredible thing…it means your investments just keep growing…and growing…and growing.

  18. I love this post, Steve! I’ve got about 5 versions of something similar in my notebook that all basically say the same thing: this ain’t rocket science.

    Once you get bit by the FIRE bug then it’s hard to think about anything else! The hardest part for me has been breaking bad habits, namely eating out. Give up my car? Sure! Cut cable? No problem! Stop eating out…..uh, hold up there boss. Maybe someday, but not today.

    Also, excellent use of poppycock. I’d like to see a balderdash used in a future post as well! 🙂

    1. Lol! Balderdash…I’ll make a note of it and see if I can work it into a future writing. 🙂

      And just like you, I LOVE eating out. I love the environment. I love the atmosphere. I love the whole process. That’s been my biggest sacrifice since streamlining our expenses and maximizing our savings. Like you, the cars and other stupid stuff didn’t phase me a bit, but the restaurants…Ugh!

      Thanks for your comment.

  19. I feel we are giving our educational system a pass here. Mandatory classes on personal finance should be the standard in HS. College……more mandatory classes on personal finance. People are entering their adult lives with no clues about budgeting, retirement plans, compounding, living within a budget, mutual funds etc. but, they finished with a four year degree. If our education system does not think it is a priority, then our kids will not either. Personal ownership !!!!! Ya, I get that but, come on…..young adults need to be shown the way to financial freedom and at best, not always digging out of a hole. As parents are we to blame? In some ways yes….we enable our kids through generous sports activities, no focus on “getting a job” early in life (14-18) and not making them pay for stuff they want. Steve

    1. Hey Steve – I agree, personal finance should be included as standard curriculum in today’s classrooms. I understand that some districts do teach personal finance, but it’s hit-and-miss. I certainly didn’t have this instruction in the classroom when I was younger. Parenting also has a lot to do with it, but I’m also not sure that I’d want to take the advice from some parents out there about personal finance. 🙂

  20. “You don’t need to be a personal finance wizard to control your own destiny.” Hey now, I take offense to that… 😉

    Seriously though, there’s a reason I chose my site’s tagline as “Demystifying the Magic of Personal Finance.” There’s no magic, it’s all just napkin math. If you understand basic subtraction and know how to register for facebook, you possess the skills necessary to accumulate massive wealth in this country.

    1. Ha! Thanks for the comment, Mr. Money Wizard. I like the phrase “napkin math” to describe this. Heck, I’d go so far as to say that you don’t even need to understand how to add and subtract. You just gotta save and invest, that’s it. Then, let the natural course of things take care of the rest. Historically, you will build wealth…sometimes, quite rapidly.

  21. I was SO TERRIBLE at math throughout school. It’s funny though because I wore glasses growing up, all the way through high school, so people would always assume I was smart and gifted…simply because I wore glasses, haha.

    When people say they want to retire but investing is too complicated, they don’t want to do it, etc. I always point them towards robo-advisors or target date funds. No excuses! Almost anyone can do it if they remain committed and consistent in their habits!

    1. Ha! The glasses thing was always interesting to me. And you’re right, there is no excuse for believing that investing is somehow complicated. A targeted retirement account takes minutes to setup. Boom, done.

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