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Diversifying Your Income on Your FI/RE Journey

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Diversifying Your Income On Your FI/RE Journey

As part of our Women’s History Month series, Cinneah (the founder of Flynanced) and I co-hosted a series of incredible roundtable discussions with some of our favorite women in the personal finance space with the goal of fostering rich intersectional conversations around money.

Kiersten Saunders is co-founder of the award-winning blog rich & REGULAR. We asked Kiersten to talk about the first part of the FI/RE equation - our income. We can negotiate our salaries,  we can pivot into higher paying jobs, we can build up side hustles. We asked Kiersten to share the mindset that’s needed to achieve these things. Here’s what she had to share. (You can watch the full recording of the roundtable discussion, We Choose FI/RE, here).


Our Start with FI/RE

My husband and I found the FI/RE movement back in the day when most people were anonymous. You didn't know their real names, what they looked like, or what kind of careers they were in. Their personalities had this dogma - like an almost religious way - of achieving FI/RE. It was very rigid - “You have to do this thing. You can only eat beans and rice. You’ve got to split the ply on the toilet paper.” 

It was very non-inclusive and for that reason I was not interested in it for a while. We had paid off all our debt and the next step - the level up - would be to pursue FI/RE, but I was not interested because everyone seemed so extreme.

A lot of it was because of the way that it was presented. It was presented as simply a math equation. You achieve fire when you hit this number and there's no other work to be done. We started our blog in 2017, we really started bringing out the emotional part of it. If it was as simple as achieving a math equation and just following a formula, there would be a lot more early retirees in the country. There wouldn’t be a retirement crisis. There is an emotional aspect to it, and it's important that we all prepare for that before you're retired, as a part of the journey.


Let’s Start with Income

To me, it starts with income. Yes, you can save, budget, and be as frugal as possible, but there is a floor to that living in the United States. There's just not a whole lot of social support and services where you can get things that are covered for you. It costs a lot of money to live here.

What we did in our journey was burn both ends of the candle. We definitely were frugal in the areas that mattered. There are some places where I just could not cut because I'm not built that way, but we were frugal in the places that mattered. And we spent on the things that we value - things like travel, food, wine, things that make us happy.
Then we worked on income and with income, it really was about that belief system. Our labor model, as it stands today, is broken. The idea that you are paid a flat wage for an entire year's work -  it doesn't matter if you have a hell of a week or shi**y one - your check doesn’t change. Wrapping our heads around whether that idea is feasible or one that we want to sign up for and how playing with that idea could change our timelines is what accelerated our journey.

So, we acquired a rental property in 2014, and then we flipped our primary property to a second rental property in 2017 or 2018. We started in real estate and then we ended up moving past being real estate investors.

It was a little too much work for us. It was a fun time, but not the way that when we looked at the long-term trajectory of how we wanted to spend our time with what we wanted to do. Then we started an online business. We started a blog and a digital media company, and the quality of this income has been bar none above the quality of the income that I was receiving at my salary job and the quality of income as a real estate investor.


Figure Out What Works For You

I would encourage everyone to decide that you don't have to wait. You don't have to wait for a boss or a manager to see your worth. You don't have to wait for some company to hire you. The mindset shift that everybody needs to start to wrap their head around is income going from something that you ask for or that you earn to it being something that you attract or create. I know that sounds very metaphysical but stick with me for a second.

Once you understand how assets and capital work in this country, it starts to shift your budget a little bit. It's easier to say no to the things that have no inherent value or they don't appreciate over time.

I’m not saying that you can't buy the things that you love, that you enjoy, or things that are just pretty to look at, but it does make you kind of focus on the things that are going to produce income for you and put you in the driver's seat for your income. One of the challenges that I've always had with the FI/RE number and “25x your annual expenses” is that it assumes things are static. 

Last year we spent way more money than we would in a normal year because we were moving houses and our son started a new daycare. (By last year I mean 2019. 2020 does not count because of COVID.)  In 2019 we spent way more than what we normally would. In 2020, it dipped. And then in 2021, it's normalizing again. With all of the uncertainty in the world with market spikes and market declines, if you hold tight to that number, you're going to be fine on Tuesday and not fine on Friday. 


My Advice to Everyone

There has to be something that anchors you and what makes you financially independent.

For me, it's taking full responsibility for my income. I know that in the apocalypse I can go outside and forage some potatoes and figure out how to sell chips on a corner to make sure that my family has a roof over its head. It's like building that resilience around how you remain in this world without depending on some of these institutions that have proven that they fail us over and over and over again.

I think that's a really important part of the journey. Even if you are gainfully employed, you love your job, it's well paid, you don't have anything to worry about. I talked to a bunch of tech employees the other week that recently became almost instant millionaires because of their company’s IPO. They were there early and the company went public and they described themselves as the happiest Black people on earth. I told them that my advice for them remains the same: find ways so that you’re not putting all of your eggs into the basket of any one institution.

Nothing lasts forever. It's about building internal resilience so that you can take yourself through retirement or “recreational employment” as somebody called it on Twitter, which I loved, through the rest of your life and not have to worry about something as trivial as income. 


Next Steps


About Kiersten:

Kiersten Saunders is co-founder of the award-winning blog rich & REGULAR with her husband Julien, and producer of the original YouTube series, Money on the Table which blends their passion for food with conversations about money.  Together, they paid off $200,000 in debt and their story has been featured in The NY Times, Forbes, CBS This Morning, Marketwatch and more. Her personal mission is to inspire other women of color to use money as a tool to improve their quality of life.