This Nurse is Living Her Best Life (Kinda)- Ep. 11
So many people focus on getting debt-free, but not enough talk about what happens next. So let me dive in and tell you how my journey to financial independence and retiring early continued.
After paying off over $300k in debt from April 2015 to October 2017, I still had $20,000 left in student loans, $30,000 IRS debt, $10,000 owed from my divorce, not to mention what I owed on my house. To eliminate that last chunk of my debt, I sold my house bringing my debt pay off total close to $1,000,000.
Once I paid the last of my loans, I was debt-free!!!!
The feeling of being debt-free is hard to describe, but I'll try. Imagine the experience being something like--instantly everything in your life gets better. Your life improves exponentially, and the world is perfect.
You're set for life, right?
Well, not so much.
This article will focus on what I did, so you can understand what life is like after you become debt-free. Here are some of the essential investments I made, and now I am richer than ever!
Invest in Yourself and Self-Care
When I became debt-free, I invested in myself. First, I decided to hire a business coach, and I joined a wealth-building mastermind with Hilary Hendershott.
Sometimes when you are ready to move onto the next phase of your life, a coach and accountability partners, which came from my mastermind group, are what you need. My group helped me focus my steps and inspired me to take my business to the next level.
Secondly, I invested in self-care. I left one of my jobs to get out of a toxic environment. Being debt-free gave me the flexibility to do what was best for me.
For the majority of my life and most of my nursing career, I always had two jobs. For my part-time benefitted job, I transferred to another location after I sold the house. Unfortunately, that hospital was a horribly toxic work environment. In the eight years, I had been a nurse to this point, I had never seen as many adverse maternal outcomes as I saw in the first few months working there.
The patients weren't being treated fairly, especially African American women. Their care was so subpar. I was scared that I was going to lose my license being associated with these doctors and their unconscious biases.
I would cry en route to work, knowing my pleas for quality improvement had fallen on deaf ears. It was horrible. I even had physical manifestations. My skin was in the worst shape it had ever been and I walked around with dark circles under my eyes from chronic lack of sleep.
Worst of all, I had a miscarriage.
It was horrendous. So at that point, I had a choice to make. Leave for my sanity, my health, myself. The freedom of being debt-free made that all possible.
Days after being debt-free, I bought a Tesla Model X! Don't judge me. I know many people in the FIRE community would frown upon my investment, but here's why I did it.
My car may be extravagant, but she was something I wanted. I am a nerd, and I like gadgets and SUVs. I had three Lexus RXs beforehand, and that was the only car I liked--until the Tesla.
I had my eye on this Tesla forever. So one day, I promised myself when I had enough money to buy a Tesla with cash, I would get it.
After I sold my house and paid off everything off, I had enough money left over to buy the Tesla Model X with cash to spare. So with that plan in mind, I was ready to buy. But, after speaking to my financial advisor, they advised against it. Instead, I leveraged my credit. I negotiated a 1.4% car loan through my credit union and purchased my baby.
For most people, buying a Tesla would not have been the best financial decision. But it was an excellent decision for me. That's what makes personal finance personal. Each person handles their finances according to what's best for them.
My car sparks joy and speaks to me. However, I am very frugal in other ways. I got something I wanted, and if that means I have to work a couple more years before I reach FI, that's OK. I think it's worth it. I have no regrets about my car.
Next, I put the cash I was going to use to buy my car, towards investments, which so far have paid off.
Max Out Investments
With no debt to pay, I had more income to invest. I put money into my daughter's 529 college savings plan, opened an after-tax brokerage account to invest in the stock market, fully funded my Roth Individual Retirement Account (IRA), and maxed out my retirement account at work.
I funded all my tax-advantaged accounts through the end of the year. This swift action helped me when I filed taxes and boosted my retirement savings.
Move to Save Even More
In the midst of me quitting my toxic job, my partner got offered a job in Nevada in Reno. I decided to go with him to Reno but keep my other job--the one that didn't drive me crazy.
So off we went to Reno. Immediately, we had a substantial drop in our living expenses. I don't mind sharing numbers, so here you go.
In downtown Oakland, California, we lived in a small two-bedroom apartment after I sold my mini-mansion. We shared a 1,000 square foot apartment and paid $3600 a month. On the other hand, we were able to buy a house in Reno for about $350,000. So we decided to buy a home in Reno.
My partner is in education and was signing a three-year contract to work with the administrators of the Reno School District. So I did the math and thought, we could buy this house, and after three years it would be a great investment property. For this reason, we purchased, even though we could have rented for less money. The house was in a great community on a golf course with pools. I felt this house would be a resale or rental opportunity.
Another bonus about the house was that it was in the best school district. I'm telling you it was a bomb place to live. Plus, it was right on the border to California. So I was close to California and near downtown Reno. What a prime location.
Be Prepared for When Life Happens
Best news of all came next. I found out I was pregnant with my second daughter. So there I was in going through a high-risk pregnancy because (I might look young but) I'm old. Fortunately, I wasn't dealing with a crazy job too.
One day, I was in a car accident while I was pregnant, and I ended up in the emergency room. That's when I found out that I had a huge cyst, probably larger than the baby, on one of my ovaries.
The good news is I had an excellent delivery. My daughter was born on New Year's Eve. After she arrived, I experienced terrible postpartum depression.
Also, my partner's work status changed. The Reno Superintendent dropped the contract they had with this consulting company and he took another job within the company. Goodbye to that three-year contract.
Hello to a new job in Las Vegas, which is an hour's flight away from Reno or an eight-hour drive. At the same time, I worked in Fremont, California, which is an hour away from Reno by air or a four to five-hour-long drive.
Our crazy commutes, postpartum depression, me being a new mom (again), whoo we had a lot going on. Then, I had to undergo surgery, where I ultimately lost my ovary. I was so hormonal and feeling bad.
Since we didn't have any family in Reno, it was a tough time. So just as quickly as we moved to Reno, we decided to move back to Oakland.
Y'all may not know this, but I love my grandfather. He is 91 years old and helped raise me. So we moved closer to my grandfather and decided to rent. We lucked out and found a house right around the corner from my grandfather.
The home had a lower level. The landlord allowed us to sublet. So that leads me to what I did next.
House Hack to Stack Money
We saved half our rent by subletting.
House hacking is when you rent out a portion of your home for extra income. When I was paying down $1 million in debt, I used house hacking to get debt-free faster.
In the suburbs of the San Francisco Bay area, I lived in a house with five bedrooms and five and a half bathrooms. And once I started getting serious about paying off my debt, I started subletting out the rooms.
My old house was perfect for subletting because each room had a bathroom. During my debt-free journey, I had as many as three people renting in the house at one time. That made my housing costs extremely low.
That's mastering house hacking, you guys. The two most important things you can do to improve your finances is to decrease your two significant expenses, which are your housing costs and your transportation costs.
I was able to reduce my housing costs by house hacking.
You can house hack too. Heck, I did it as a single mom with just me and my baby. And I was completely safe in my house. My renters were trustworthy. I went through a thorough screening process, and one person ended up helping me a lot with my daughter. That was a significant bonus.
Now, I still house hack with two little kids, and they're just fine. So stop making excuses, find your way to make more income, and improve your finances.
Anyway, back to my story.
So we found this house, and our expenses were super low. But what I forgot to mention is that our home in Reno was still on the market. As soon as we decided to sell the housing market slowed down.
So my house was on the market for one month, two months, three months.
I was paying the Reno mortgage and California rent. My situation became extremely taxing.
So whenever in a bind, old habits will arise. I know how to hustle. To bring in enough money to cover our bills, I decided to go back to working two jobs. Before when I lived in Reno, I could work six days a month to cover all of my expenses. But in California, I needed to work more to make ends meet.
I had also decided to invest more money into my business. However, when I made that decision, I also went back into debt for my business. The debt I went into for my business made me so uncomfortable. Plus I was paying a mortgage and rent.
The only thing I knew for sure, was it's easy to find jobs in nursing, especially being in a labor and delivery nurse, which is always in high demand.
Do Reality Checks
In my search, I found the perfect job. I told myself I could work this new job temporarily, for two months or so. And then when I figure out if I like this job, I would drop my hours at my other job where I had health insurance and other great benefits.
Do you know, I went through the process to get on-boarded, but then a couple of days before I was going to start my orientation, I had a total meltdown.
You see, orientation coincided with my daughter's first day of school. And when I tell you, my baby cried so hard, when I told her I wasn't going to be there for her on her first day of school--it made me cry too. As a matter of fact, by taking this job, because they wanted me to work pay shift, I would hardly ever see my kids. I would have to leave for work at five-thirty in the morning, and I probably wouldn't get back until about eight-thirty at night.
My kids are young, but I realized I would never see them. At first, my work schedule had reached a point where I had to realize that it's all
OK to take time to go back to full-time work.
I had to accept it would also take time to pay off my debt. I was not willing to sacrifice the time that I have now with my daughters.
I now work an amazing schedule. Just three days a week, I go to work. I'm able to pick my kids up from school and daycare, see them every day, spend time with him, help them with homework, and work on my business. Things are good.
Embrace the New You
Today, I am happy and whole. One difference is that I am no longer the nurse that makes $230,000 a year. For a long time, that was been my identity, but now other things mean more to me.
I've learned, I don't have to earn a lot to impact my finances. I have to make the most out of what I make. So, I cut my expenses down and work with what I got.
Finally, the house in Reno sold. With those proceeds, I was able to pay off my remaining debt (minus my car). A majority of my paycheck is going towards funding my work retirement accounts, my daughters' college funds, and my Roth IRA.
Things are really on the up and up, and I still invest heavily in this business.
For me, paying off debt was just the beginning. From that point forward, I was starting over from zero. However, as you can see, so much can happen along your financial journey after you become debt-free. Use the days after debt to focus on you and be flexible when life happens.