Destroying Debt and Building Wealth: Our Origin Story

Not every origin story begins with green glowing plasma or radioactive spider bites. Some origin stories begin with something far worse.

Truckloads of debt!

Sure, it’s not going to get the Hollywood treatment, but that makes it no less significant.

When it comes to destroying debt and building wealth, it’s all about the moment when we discover that spending every dollar we make is a dumb idea.

The moment we discover saving money and investing are the secret sauce to building an awesome financial future.

The moment we discover how much money we save every month directly correlates to the time we spend hustling for more money.

And lately, we’ve been getting quite a few questions about our own origin story. So maybe it’s time to share.

In the Beginning

In the beginning, we looked pretty much like everyone else. Making money. Spending money. Financing things we felt like we could afford. You know the scene.

We started this trend separately before we were married, so when we finally celebrated our wedding, we also celebrated the merging of all our financial baggage – two student loans, two car payments, and all our credit card bills.

Maybe your celebration looked similar.

Of course, we prided ourselves on being “not as bad” as the people around us. It was easy to find worse cases than ours, but that was mostly due to our low income keeping us from being approved for more serious debt.

But right before we got married, our pastor at church handed us a book called Financial Peace written by this guy named Dave Ramsey. Maybe you’ve heard of him. Lots of people know that name today.

We didn’t.

In a moment of diligence in preparing for our combined lives, we actually read the book.

And we talked about it.

And we thought this crazy concept of managing our money made some sense.

Now I’d be lying if I told you everything magically changed in that moment.

In truth, most of these crazy ideas – paying off all our debt, building up a cash fund for emergencies, investing all the money we were no longer forking over in debt payments – seemed impossible.

This was mostly because we didn’t know anyone who actually lived like this.

I mean nobody.

But even with a healthy dose of skepticism, we got started.

We were young, broke, and just starting out in life, so what could go wrong?

Worst case, we end up living a miserably frugal life for a few years and end up with no debt and no happiness.

In that case, we could just go back to living life like everyone else buying nice cars and going on fancy vacations through the power of borrowed money.

But a funny thing happened. This “managing your money” concept worked.

Baby Steps 1 and 2 – Saving $1,000 and Destroying All Debt

Following the plan, we started doing a budget.

It was a slow and rocky start, but insanely enough, we started having fun eating at home, selling our crap on eBay, and watching our net worth climb out of the negative digits.

One reason I think Dave Ramsey’s plan works for so many is that it is incredibly simple.

There are 7 baby steps and you do them in order.

That’s the kind of simplicity we needed to start changing the way we handled money. We just needed to put one foot in front of the other, not a grand choreography of dance moves.

After 3 long years of killing our debts, we were finally debt free.

Our net worth was finally $0.

We were finally worth nothing! Financially speaking, of course.

Getting out of debt was long and grueling work, but it was also extremely empowering. It taught us that there truly was a different way to live that didn’t involve excessive consumerism and trying to immediately satisfy our every desire.

In a way, we had become free of the cycle of keeping up with our friends and coworkers.

That alone was a huge weight off our shoulders.

Baby Step 3 – Save up 3 to 6 Months of Living Expenses

So now that we had no debt payments at all, we took all that extra money we had every month and started piling it up in our savings account until we had a full 6 months’ worth of living expenses just sitting there providing a solid buffer between us and life.

Our need for debt was almost entirely eliminated by our choice to live on less than we made each month, and having a pile of cash at the ready to take care of any unexpected expenses.

(I say almost because we were getting ready to buy a house, so the debt monster was getting ready to come back, but we were much smarter and this time we had a plan.)

Baby Step 4 – 15% of our Income Invested for Retirement

This is where the real fun starts.

A pathway through the jungle. (Panama)

We spent the first 3 Baby Steps slowly watching our net worth crawl out of the negative abyss.

Finally, our net worth went positive for the first time in our entire lives, and from here on out, everything we did was going to push it to further heights.

Dave Ramsey’s method recommended that we stop all investing during the first 3 Baby Steps to get through those steps faster.

We didn’t do that.

I had already been contributing a good portion to my 401k at work, and stopping entirely was something I just couldn’t bring myself to do.

But I did reduce my contribution to the 3% that my company matched. Getting a 100% return on my money was just too good to pass up.

I’m weak like that.

Mathematically I have no idea how much this slowed us down paying off our debt, but I look back and consider it a net win because we actually completed those Baby Steps.

It would have been a loss if it had slowed us down to the point where we gave up, quit, and went back to our old ways. But that didn’t happen.

We were hooked on killing debt.

Like brutally killing it.

With our debt an ancient memory, (ancient, as in like sooooo many weeks in the past) we went back and bumped up my 401k contribution at work.

We also opened 2 ROTH IRA’s, one for each of us, and started contributing as close to the maximum amount we could to those each year.

Suddenly our net worth was really climbing.

Baby Step 5 – Save for Kids College

With no kids at this point, and being unsure when or how many would magically appear in our lives, we put this step on hold.

When our first son was born, we opened up a 529 college savings account and started contributing to it somewhat regularly, but it turns out we still had a lot of internal soul searching to do to figure out how much value we placed on college.

We hadn’t really talked about it at the time, but today, with 4 kids bounding around our house, we know that college is probably important, but probably not worth the insane sticker price.

One day I’ll write a post about our current thoughts on the college education system, but for now, know that we’re not putting a whole lot of effort into “education only” funds like 529 plans.

The future of college is just too uncertain, and have you seen what can be learned for free on the internet? I’ll assume you have.

Baby Step 6 – Pay off Your House Early

When we started this whole process we were just getting married and living in a small apartment.

Eventually, we moved to San Antonio without jobs and continued to live in an apartment.

Eventually, we bought our first house, and that meant signing up for more debt in the form of a mortgage.

We already had some pretty negative feelings toward debt, and had put significant energy and effort into destroying all of our debt at this point. So piling on a mortgage didn’t feel great, but we just didn’t see a way around it.

We had fully embraced the cash for cars plan, but we just weren’t disciplined enough buy into the cash for houses plan.

So we did a lot of research before buying our house.

In Houston, I was commuting an hour to and from work each day. I was NOT going to do that anymore, so our house had to be within 2 miles of my workplace.

We also knew that my wife wanted to be a stay-at-home mom once our baby bundles started showing up, so we planned for a mortgage we could support solely on my income alone.

Yes, the mortgage company thought we were crazy for not taking all the extra money they wanted to throw our way. But at this point we were used to people looking at us like we were weird.

We’ve discovered that destroying debt, saving money, and building wealth is a great way to become an outsider in our society…but you get used to it.

Finally, we willingly signed up for a 30-year mortgage for a lovely house we knew we could afford completely on my income.

We honestly had no idea that just 7 years later our mortgage would be completely paid off.

I mean, we had a plan to pay it off faster than 30 years, but who pays off their house in 7 years?

It turns out we were even weirder than we thought.

Baby Step 7 – Build Wealth and Give a Lot of it Away

At this point, we were completely debt free, including our house, and investing a ton of money every single month building up a pile of wealth.

According to the Dave Ramsey way, we could just keep doing this for the next 30 years and retire multi-millionaires enjoying life and blessing people all the way through.

That’s not a bad plan at all.

But in a spare moment I had among all this freedom and financial peace we were living in, I rediscovered this other odd financial guy I had encountered a few years earlier.

Discovering FI (Financial Independence)

A few years before paying off our house I had stumbled upon this crazy guy’s blog titled Mr. Money Mustache. His thoughts on debt were right in line with ours. (Debt is stupid.)

But he also had this other crazy idea – that if you could save up a bunch of money, you could actually become financially independent and retire early.

Not like a little early. Like 30 years early.

In fact, he had retired at the age of 30. That sounded insane to me, and it took several months of research and studying and discovering others in the FI community who were doing the same thing for me to realize this was actually possible.

I slowly started sharing these concepts with my wife, who was currently a stay at home mom with our 3rd child on the way.

She was skeptical, but receptive to the possibilities.

We started dreaming about what it would look like if both of us were home raising our children?

What if we had free time to pursue our other passions that always seemed to get pushed to the side?

What if I could travel and pursue my photography?

What if she could commit to singing 20 or 30 hours a week?

As followers of Jesus, we loved traveling across America and experiencing different faith communities. What if we had the time to travel the world and spend not just a 2-week vacation someplace, but 2 months or 2 years, actually building relationships and community connections in a foreign country?

How incredible would that be?

We were hooked.

We devoured Mr. Money Mustache’s blog, then Go Curry Cracker, then the Mad FIentist, Jim Collin’s Stock Series, Millennial Revolution, 1500 Days, Root of Good, Our Next Life.

The list goes on. The people were incredible, the stories powerful, and the willingness to share refreshing.

So today, we’re on our own adventure to reach Financial Independence. We now have 4 kids and are living a blessed life that is paving the way for a future that is far different than the average middle-class family.

We’ve still got a few years to go before we’re truly FI, but so far the entire journey has been worth every moment.

(Update: I officially retired in June 2019. Read more about that here.)

And it all started with a good friend and pastor who handed us a book called Financial Peace by Dave Ramsey.

It was impossible for him to know the path that small gesture would put our lives on. We had no idea either. But we are forever grateful for a friend who cared enough to help us out.

Have Experience, Will Blog

And, ultimately, that is what led us to start this blog. We recognize that we will always be limited in the number of people we are able to reach and help in person.

We want to encourage and help you to dig deep and find the discipline within yourself to get rid of your debt, start saving money, and begin building wealth. If you will do that, you will be able to impact people that we never could.

And who knows, together we might be able to have some fun and help others in ways neither of us can even imagine now. How incredible would that be?

And it all started with the simple act of reading a book.

What is your origin story? How did you come to discover that there is life after debt? Who are some of your heroes that are motivating you to change your life for the better? We would love to hear your stories in the comments.