Financial Independence

Interview with Liz from Chief Mom Officer

Today we have an interview with Liz from Chief Mom Officer. She is a breadwinning mom to 3 boys with a stay at home husband. She climbed up the corporate ladder to earn over 6-figures and now also writes about her life, ideas, and tips over at


Who are you and what do you do? What is your story? Where did you start, where in the journey are you, and where do you ultimately want to end up?

Hello, everyone! I’m Liz, and I write over at Chief Mom Officer – a blog dedicated to helping moms with their money, work, and frugal family life. I’m also an IT project manager for a Fortune 100 company, and the mother of three boys (13, 9, and 2).  Today I’m a six-figure earning MBA, but I wasn’t always a high earner.

My story is one of lots of struggle and hard work to get where I am now. I started by working my way through undergraduate school in a full-time job, going to school full-time nights and weekends, earning only $22k per year. My first job in IT earned me only $35k per year, but at least I was completely debt free, having leveraged my full-time work income as well as employer reimbursements to get there. From there, I worked my way up in income both quickly and slowly. I’m currently 36 years old and leading up $10 million of IT development work in my full-time job, in addition to running a successful blog.

I’ve had personal finance and investing as my hobby ever since I was a teenager. In fact, I like to say that I’ve been on a journey toward FI for the last 20 years. Unfortunately, five years ago, my husband nearly died of septic shock, which was totally unexpected for a 31-year-old mother of (then two) young kids. It took a while to work through that emotionally and financially. I’ve been through job losses (my husbands), job instability during the Great Recession (my own, when my company almost failed), and a medical catastrophe.

Fortunately, we’re now back on the up and up. I have no debt except the mortgage, which I’m on track to get paid off entirely before I’m 40. I’m also aggressively saving for my three kids college – paying off the mortgage is part of that plan. I’m targeting overall financial independence within the next five years, barring any additional crisis. But if something happens? I know I can deal with it.

How did you get started on the path to FI?

I’ve been chasing FI since before it was called that (old lady here). When I was a teenager I would read books like The Wealthy Barber and see just how simple it was to reach financial freedom. My goal has always been financial freedom/financial independence, where I wanted to have enough saved to cover my expenses indefinitely

Please describe what FI really means for you?

I’ve never had the goal of stopping work entirely. My goal has been to be financially free to do what I want – launch a business, work part-time, find location independent work when my kids are older, and other such things. I’m the family breadwinner while my husband is a stay at home dad to our three boys, so I need to make sure we always have enough for food/electricity/phone/heat/etc.

What are your criteria for saying you’re FI?

My criteria are the following:

  • No mortgage – I need to be completely debt free
  • Fully funded my college compact agreement with each of my three kids
  • Enough in pre-tax accounts to sustain my “traditional” retirement and old age using the 4% rule, with a reasonable projection of growth over time
  • Enough in post-tax accounts to sustain my lifestyle until I can tap the pre-tax accounts, plus a buffer for opportunities, unexpected events, etc.

Would you say you are more inclined to the not working anymore part of FI or the freedom part of FI?

Definitely the freedom part. FI doesn’t mean not working anymore. FI means you can choose whether or not you want to continue working in the same capacity, or not, or do something else entirely without needing to worry about the money.

What is your preferred way to invest? Do you have a preferred asset class in particular or asset allocation?

Index funds all the way! I’ve been with Vanguard since the early 2000’s, when I first had enough to open an account with them (and before it was “cool”). I’ve been a lurker over on the Bogleheads forum since it was the Morningstar Die-Hards, and feel strongly that a simple index fund portfolio is all you need.

I will say it was hard to hold on to that philosophy through the 2000’s. When I graduated from college, we were in the middle of the tech crash. Then a few years later, the Great Recession wiped out years of savings and investments in a matter of months. People talk about how they’ll be buyers in a down market, but let’s just say that if you haven’t experienced a real crash, you don’t know how you’ll really react. It’s much harder than you think it is to watch years of savings vanish like that.

So, the first 10 years of my investing life, I made nothing in the market. I believe the S&P 500 gained something like 1% over all those years.  But I had set a solid financial foundation through regular saving and investing, and that foundation has skyrocketed through the bull market.

Do you invest automatically on every paycheck?

Heck yes! It’s the only way to go. Right now, I automatically have investments in my 401k, college funds, and my mortgage payoff account.

What are your favorite financial tools?

My Excel spreadsheet. I’ve yet to find any app that beats it, although I’ve looked pretty hard.

What are your thoughts on house ownership vs. renting?

Well, I’m writing this from my home of 11 years, so for me personally, I’m very much for home ownership. I bought my first property a few months after I turned 20 – a condo purchased right before the home price run-up of the early 2000’s. I made over $60k on that condo just for living in it for a few years. That money became the down payment on this house.

When I bought this house, it was in early 2006 – near the market peak. So, on this house, I haven’t “made” anything, but I also haven’t lost anything because I haven’t sold it. We bought with an eye to expanding our family, so we didn’t have to move again (moving is expensive and a pain!). We had one kid (then two years old) at the time. Now we have the three boys and there’s still plenty of room for everyone.

When I moved out I made the deliberate decision to buy a condo instead of renting an apartment, and if I hadn’t done that I wouldn’t have had the down payment for this house. Had I not had the down payment for this house, I wouldn’t be sitting on a ton of equity and be on track to have no mortgage/rent payments by the time I’m 40. So I’m solidly “team homeownership”. But you need to look at your individual situation, and the market where you live, to know if it makes sense for you.

What is the worst financial decision you have ever made?

Letting my family sneak into some debt in our late 20’s/early 30’s. I was getting my MBA at the time and had changed companies, which caused me to miss out on some reimbursements. I took out loans to bridge the gap. We also had gotten a car loan and got burned with the “use the credit cards for everything and pay them off every month” strategy.

After my husband’s near death experience, I wised up. No more credit cards – now we use debit for everything that’s not travel or an online purchase. No more car loan – it was paid off entirely and I still drive that car (102k miles now!), with our other car purchased for cash. And that student loan was entirely paid off just months after I finished the MBA.

What is the best financial decision you have ever made?

Getting my undergraduate degree and MBA. Even though I incurred some debt (which, as I mentioned, I paid off in a few months), my salary has gone way up due to all that hard work and sacrifice to get both degrees. There are lots of people I know who started where I did but made different choices, and they’re still stuck in the same kinds of jobs I had 15 years ago.

What are your plans once you retire?

To not retire! I have plenty of hobbies that would keep me busy, but I’d also be working. Maybe I’d become a CPA (I was an Accounting undergrad) or a CFP for a fun second career!

What is the number one advice you can give a millennial starting out?

Save and invest early, even if you don’t have a specific goal. It’s more important to get into the habit and lay a solid financial foundation for yourself than to be striving toward something specific. Then, once you have a goal (starting a business, buying rental property, becoming FI, putting a down payment on a house, etc.) you’ll have the foundation to get you where you want to go.


Financial Independence

How to Reach Early Retirement and be Happy

Way before even thinking about early retirement, we all have that moment when we sit down and think; what do I want out of my life? You can have a great job, great family, health and all but still do not know what you want out of life.

For me, this was at 23. I was working full-time, one year in a great relationship and thinking about getting a house. Few goals in mind but I was not thinking of early retirement quite yet.

Extreme early retirement

Each pay, I was investing a large part of my income simply because I wanted to buy stocks. I saw the appeal of owning companies I liked such as Apple, Tesla, Facebook but I did not have any long-term plan or vision.

It took me a while but I finally took the decision to minimize my spending and increase my savings in the hopes of buying a house. With a concise plan in mind, I started cutting on anything that did not give me joy-for-the-value.

how to cut the cord

Slowly, cable was replaced with Netflix. Bar nights replaced with house parties. Soon enough, it all added up to good savings. After a year of investing, I sold all my stocks and we bought our first house.

I saw what others were splurging on but came to realize that it was not things I needed to be happy.

In my field of finance, for example, almost everyone drives to work in a brand new BMW or Mercedes. I was walking to work, living downtown, so I did not have a car. Once we needed one we got a used, 2007 SUV with low mileage and paid cash.

Here is the thing about cars, they are monetary sinkholes. On average, a car will lose 40% of its value in the first three years. So I thought to myself; what do I want to spend my money on?


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Older cars can still look nice and still run great! The other advantage of spending less on the purchase of a car is the incredible savings you will make paying cash rather than taking out a loan. Car loans can go up into the double digits of interest. You will end up paying almost double the price for that fancy new toy. You can see my calculations behind my car purchase if you want to see the reasoning of my purchase.


We live well, eat well, travel a lot… but always live under our means.


It is all about the lifestyle.

I really wanted to save enough for a down payment in one single year. That was not an easy feat but I achieved that.

As I continued to earn, I continued to save and invest. Had to think about the next goal, the next thing to save for… For me it was; early retirement.

If that is what you want to, you are at the right place. The very first steps are to cut the small things since they are the easiest to stop and often add up to a good chunk of your spending. Restaurants, bars, snacks, and outings can really add up.

You should really take the time to make a budget and track your expenses or use platforms such as Personal Capital to do it automatically. Once you have paid off any high-interest debt you have, you can start saving and investing.


Pay yourself first

Besides budgeting, you can set up automatic savings and invest a portion of each paycheck. Then, live on what is left to drastically increase your savings rate.

You do not need to be born in wealth or make a million dollars a year to be wealthy. Fortunes build themselves but you need to steer it in the right direction.

If there is one thing to keep in mind is that as a young saver, you have every chance in front of you. With dedication and perseverance, anyone making an average salary and living below their means can retire early.

Life is meant to be lived. If a slight change in lifestyle can get you to save and reach financial freedom, go for it!


Living on half our salaries

The basic goal I have given myself is to live on half my income and invest the rest. If you can live below your means and save a good chunk of your income, your dollars will work for you.

Your savings rate is a cornerstone to the number of years you will need to stay in the workforce.  The more you save, the less you actually live on and therefore, afford that lifestyle in early retirement.


Your personal savings rate =

Annual savings including any employer match (or any debt repayments) x 100

Total income less taxes, plus any employer match


For example, if you end up saving about 75% of your income, you are buying yourself three years of retirement for each year at work. With the magic of compounding, you will be able to generate enough passive income to pay for your lifestyle after a few years of hard work.

From previous research, we can assume that withdrawing 4% of our portfolio, adjusted for inflation, is safe to last and survive major market crashes. If one would want to retire on a  4% withdrawal rate, it would only take 7 years of work to save up enough money to safely retire solely on investments.


Use every advantage you get

Personally, I am currently saving 50% of my income each year and I am hoping to save up to 70% soon. When used in the proper tax-advantage accounts (401k / RSP), your savings will actually lower your taxes and you will barely feel the hit.

For example, I am currently at a 45% marginal tax rate, this means that for every dollar I invest in my tax-advantaged accounts, I actually feel a hit of only 55¢ (I got this figure since earning $1 working would only give me 55¢ to spend). This figure is even lower if you get an employer match!

I have included below a chart to illustrate the power of your savings rate. Feel free to play around with it in this interactive version. If you want to either pay off debts quickly or start saving for early retirement, you should learn to boss around your finances and build a strong budget. Bringing yourself closer to the 50% savings rate, or more can make any goal achievable relatively quickly.


saving rateSource:


Change your mindset

Savings are only a mindset. If you are thinking about it as something easy, it will be easy. To increase your savings rate, you need to start thinking:

How much can I save by doing this?

rather than

How much can I spend on this?


I am not saying you should not shop around and look for the best prices. However, you should definitively think about how much you will save by not buying that thing.

To put it in perspective, someone that makes 50,000$ a year, for example, would be left with about 35,000$ (depending on the state but we are assuming here).

Now assume he is Mr. Average American saving only 6% of his salary like the majority of Americans do today. This means he could retire after only 62 years of work (so at about 80 years old!). Basically working until the government or a private pension pays for his retirement.

10 frugal tips to save money

If he is so average, Mr. Average probably pays 100$ a month for the newest iPhone with a nice big data plan that he probably does not need. He probably never thought about it but if he just saved that 100$ a month instead of spending it on a phone, it still adds up to 1200$ a year.

This small saving alone could actually decrease his working years to only 51.4 years and just like that, he can retire 10 years earlier by skipping the data plan. (Assuming 5% market returns. and that your current annual expenses are equal to your annual expenses in retirement)

Now, instead of following the average, if you choose to save half you are income like me, you can relax and enjoy the security of having a safety net and become financially independent after a few working years. Your future self will thank you when your safety net will grow enough to become your retirement nest egg!

Then, you can work (or not) on whatever you want to. You will have the leisure to live your life at your own pace, doing whatever you want.


Saving does not need to be a burden

It cannot be said enough; if you can live on less, you need to accumulate less wealth to support your future self. The basic idea is to hold 25x your annual expenses in investments to sustain yourself in whether or not you generate more income.

This comes from the assumption that a 4% withdrawal rate per year can sustain you with a very high rate of success. I suggest you play around yourself with cFIREsim or Personal Capital’s free tools to test out scenarios to really get the grips of it.

.Welcome to my blog and best of luck. Stay happy! Xyz.