Yesterday at lunch, I read about how a blogger retired at age 34. His name was the Mad FIentist (FI for Financial Independence)and he had a lot of great advice to offer and even had an excel spreadsheet that he created to show people how they can plan their road to an early retirement. Welp, a girl has the right to dream so I downloaded the spreadsheet and put in my personal information to see how long it would take me to retire early. The blogger’s instructions said to not alter the spreadsheet and just put in your own information. And so I did. And the spreadsheet calculated the time I have left to an early retirement to be around 6 years!
I really wanted to believe that. But I don’t want to lie to myself so I started looking through the spreadsheet to see what’s included, and what’s not. And I found the reason why I was given this false hope. While the spreadsheet accounts for a LOT of expenses and sources of income, it does not factor in the one thing that’s standing in my way to financial independence, STUDENT LOANS. Yes, I paid off the $17,000 Sallie Mae for the loans I took out in college. But I’m now in my second year of an MBA program and in more student loan debt than I’ve ever been before…about $120,000 and counting. What’s even more devastating is the fact that by the time I am done with the program, I’ll have more debt in student loans than I do in my mortgage. I added a row in the spreadsheet for my student loans and got the real number of years I need to work before retiring. It was not 6 years.
It was a rude awakening. Paying off my credit card debt is not the biggest battle I have to face to accomplish this goal. Its paying off these large expenses namely student loans and mortgage. I can’t even think of early retirement until I eliminate the student loan.So I’ve started to think. How? How would I accomplish that? If you can’t tell by now. I’m not really a patient person. All the plans I make are for how I would accomplish a goal with less that five years of time. How do I pay over $20,000 in credit card debt and $120,000 in five years or less?
For starters, I can’t wait until I finish this program to pay it off. I learned the first time around that compound interest is a bitch when its working against you. I’m gonna have to chip away at it as soon as I’m done paying off my credit card.
Also, Unfortunately, I can’t quit working a 9-5 anytime soon. A steady paycheck makes a lot of things possible including covering my expenses so I can use my other sources of income to pay off debt.
I’m gonna have to increase my income a lot sooner than I thought. I’ll have to work a lot harder on my real estate business. That shouldn’t be bad. I love working in real estate 🙂