A few weeks ago, I was interviewed by Araminta over at Financially Mint.com.
Araminta told me how she earns money while studying in Edinburgh. I was intrigued: is it possible to combine earning with studying?
I have mixed feelings about university / college education. University can either be a 3 (or 4) year holiday camp where you rack up hangovers and large debts that you never pay off for a degree that qualifies you for nothing. Or it can be a stepping stone to a higher paid, professional career.
It’s a big subject that I’ll return to. For now, I’ll just say that college is no longer the no-brainer it was when tuition was free, there were grants for living costs and only ~10% of people went to college.
One of the things that The Millionaire Next Door tells us is that most make it by embedding frugality into their habits early on…and then continuing to be frugal whilst hustling as their small business or professional career takes off.
That, plus the power of compound interest, means it would be really powerful if you were able to get on The Path to financial independence whilst still at college. Is that even possible? Let’s ask Araminta….
I’ve been on my path to FI for some time now and I hadn’t even realised.
I don’t have a high paying job, I don’t have a super high savings rate and I don’t have a ‘FI number’ that I’m aiming to retire at. In fact, I’m still studying for a degree.
So how’s that work? It all started one very late night in a tiny room in Shanghai. It was one in the morning, and I’d just finished reading Rich Dad Poor Dad: my entire life had changed. I was going to be financially free. I had no idea how, but I knew it was going to happen. I was 18.
Before I go on to tell you my story on the search of financial independence at university, I want to give a bit of context on what the path to FI really means.
What are the paths to FI?
We’ve heard of the more traditional and well-known path to FI: you graduate from college, get a high paying job, save a high percentage of your income so you can get out of there as early as possible. Once you reach FI, your nest egg allows you to do what you want and gives you the choice to work or not.
But FI is about having choices, not just having a huge nest egg. So really, there are other ways of having choices. We touch on this in my awesome interview with Barney; what if you skipped the whole high-income part and went directly to having choices? What if I could live the FI life right now?
No security of having a nest egg, no high-income job, maybe not even a college degree. Is it possible to reach FI without all that? Can you live with choices now…without enough money to never have to work again?
Let’s take a look at my own ‘path to FI’.
It’s September 2017, and I land in Edinburgh, Scotland. I’m excited for my new life here after finishing my gap year travelling, living and working in different countries. The plan: study Accounting with Law at Edinburgh Napier, get a student job and stay here for a few years.
I got a job as a waitress, became a normal college student trying to figure out what management accounting was all about and shared a normal flat in the city centre. That lasted 3 months.
In September 2017 I also started my personal finance for college students blog: Financially Mint. I had Rich Dad Poor Dad in the back of my mind and a mission to be financially free – but had no idea how, so I started a blog about it to help me (and others) figure it out. The more I learnt about money, the less I wanted to be a normal student studying management accounting. I realised I wanted choices. I wanted freedom. But really, I wanted it now. Familiar?
Life took a dramatic change. I got fired from my job (apparently I didn’t move ‘fast enough’ for a waitress), I quit Napier (to my parents’ slight angst) and I changed flat. I enrolled in The Open University studying Business and Finance, I continued working on my website and started earning money with some marketing clients I found through Upwork and eventually through my blog. I also started volunteering for The British Heart Foundation.
Earning while studying
How did I earn money with these clients? I discovered a big demand for Virtual Assistants. If you do a quick search, you’ll see VAs charge around £20-£50 per hour (or more!) something not all bloggers or online businesses can afford. So using my marketing experience from Financially Mint and my own writing skills, I popped on to Upwork and charged from £10/hour upwards.
Not much money, but I was willing to hustle – not only was I earning money, but I was also learning more about digital marketing for my own blog. I started using great tools such as Snappa and SmarterQueue, and really dug into SEO. Next thing I know, I’m doing the podcast show notes for ChooseFI, a truly amazing podcast and community focused on learning about financial independence. I was learning about FI, gaining marketing experience and earning money – triple win.
But don’t get me wrong: I was terrified. Here I am, having to convince others that I don’t waste my time everyday ‘working and studying online’ and that I do in fact have a social life (which has interestingly improved). Terrified, because I was going against what everyone else was doing, leaving the security of university and not depending on a normal job.
That’s when I realised I was kind of on my own path to FI; thanks to the online world, I get to work and study when I want and where I want. And I get to work on something I’m passionate about: helping other students manage their money in university.
You have choices!
Turns out you can go to university for practically free, there are alternatives to getting a job and sometimes paying off your student loans isn’t the best idea. I’m still working for marketing clients on the side, but I have a huge amount of flexibility and freedom. Again, sound familiar?
My income is low, but so is my spending; it’s amazing what you can do with £500/month. No commute to university, drinks at home rather than clubs and Lidl is my best friend. While my friends were blowing money away on takeaway and cigarettes (I’m talking a pack every two days), I spent £15/week on Lidl food and tried my hardest to stay away from tobacco. And it’s important to note that my parents do help out financially and help cover my rent (the fact that they also emotionally support my ‘path to FI’ is still mind-blowing to me).
I’ve been living this new life for 4 months now, and although it hasn’t been all rainbows and unicorns (a lot of ‘WTF am I doing with my life’ moments), it’s a thousand times better than my previous ‘normal student life’.
So am I really on the path to FI? Do I really have more choices and freedom? Or am I just wasting time and should get back to university asap? The daily questions of my mind.
Believe it or not, there is a plan behind all this: to eventually earn money purely doing what I love. This means I need to keep working on the website and taking part in different projects.
In terms of FI: Although I do invest part of my income and do a lot of experiments with money, the goal isn’t necessarily to accumulate a large nest egg to retire on – it’s simply to earn money doing what I enjoy, all while having flexibility and freedom. But I still depend on an income to live. So does that still count as financial independence? Discuss.
Whether the plan works or not, the good news is that I’m young enough to have plenty of time to fail. I have time to search for different income streams, I have time to go broke and start up again, I have time to learn as much as I can about money.
The business and finance degree is my backup plan: if in 5 years I’m still on a low-income, I’ve told myself (and my parents) I’ll get a proper job. A lot can happen in 5 years.
How other students can plan for FI
Good news: you can get started with FI in university. In the interview, we discuss how students can prepare for FI; turns out it really isn’t that complicated. No, you don’t have to go a little crazy and study/work online, but you do have learn to be financially conscious. Start by building good financial habits and understanding the power of compound interest.
Encouraging students to take interest in money will change their lives. Instead of getting a job they dislike and working for 40+ years, they’ll be working towards achieving freedom, whether through flexible jobs or early retirement. Starting so young gives you the option to plan and choose – what do I really want my life to look like?
So if you’ve got a child in university, work on their financial education. Give them books to read, documentaries to watch, blogs to read (hem hem Financially Mint) and help them get started with investing. Once they understand the amount of freedom they could have with correct money management and earning skills, that’s it.
The path to FI is a deeply personal one – each person can design their life how they want. So let’s start designing it early.