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Optimized-GRADUATINGDEBT FREE (2)You’ve probably heard a lot of stories recently about new graduates with mountains of student loan debt. It’s not uncommon to hear of students with $100,000+ in school loans. Today I wanted to share a success story with you that bucks this trend.

This story is about a young woman who made different choices when it came to saving and spending money in general, and dealing with school debt in particular. Now at just 24, Natalie is completely debt free – except for the DC apartment she bought with a 10% down payment. In this interview you’ll hear how she paid off her student debt on the day of graduation, paid cash for a car, and started saving and investing before she was old enough to vote.

Book Review: Retire Before Mom and Dad

Podcast of Interview with Natalie

Topics Covered in the Interview

  • How Natalie managed to save $3,000 while in high school
  • How and why she began investing at the ripe old age of . . . 18
  • What types of investments she prefers
  • How she almost got into more student debt than she realized
  • Why she took a semester off of college and how it helped her financially
  • The sacrifices she made to avoid debt, including some regrets she now has
  • How she paid cash for her first card
  • Her favorite personal finance books

Resources Mentioned in the Interview

Transcript of Interview

Rob: Natalie, welcome to the show.Natalie: Hey, it’s good to be here, Rob. Thank you.

Rob: I’m so thankful for your willingness to take time out of your day and to talk with us. You’ve shared with me through email a bit of your story that relates to personal finance and investing. I know that folks will learn a lot from your experiences.

Natalie’s Background

Why don’t we just start off, Natalie and kind of give folks an idea of who you are?

Natalie: Yes, sure thing. I’m 24 years old. I currently live in the Washington Metropolitan area. I’m originally from New York City, but I came down to DC by way of university studies, so I did about four years of undergraduate studies in DC and decided to stick around when I graduated a couple of years back. I currently work in the finance industry in the DC area. I do quite a bit of travel for my work, and I think I have an interesting story to share with your listeners, so I hope that they enjoy it.

Rob: Yes, I think you do. I’m curious: do you enjoy the traveling that you do?

Natalie: I do. I love the travel. I get an opportunity to meet with a lot of really great clients in the financial service industry. Not to mention, I get per diems when I go out, so that is not a bad deal.

Rob: Do you save some of those per diems?

Natalie: Secretly, I do. But I never tell my colleagues that.

Working Through School

Rob: Given what I know of your story, that answer doesn’t surprise me. For those listening (just a little bit of background), like other folks and listeners who I have interviewed, Natalie and I kind of met via email. She had sent me a question, and we just started conversing back and forth in email – through email. I have a high level understanding of her journey as it strictly relates to personal finance and investing. We’re going to walk through that.

Natalie, what I like to do is go all the way back to before college when you were in high school. From what you’ve told me, you worked during high school, right? You had a job.

Natalie: That is correct.

Rob: What did you do?

Natalie: I actually went to boarding school during high school. Most of the work that I did was in the summers. Even though I was away at school, they gave some students an opportunity to work in the cafeteria on the weekends. I would actually take my precious weekend and get up in the morning and help to serve the students that I went to school with, which was a little bit of a dent to the pride. But I was willing to do it to earn a little bit of money while I was away at school.

And then, during the summers, I was part of a program in New York City called Summer Youth Employment. Basically, it’s run by New York City. You go through, and you apply and they set you up with an employer. The city gives the employer a subsidy to employ low-income youth in the city, which I was one. I did of a variety of jobs through that program for about three summers.

I worked for the Parks Department for one summer. I worked with pre-K children one summer. I also worked on a newsletter initiative for Public Health on a different summer. That’s kind of the bulk of my work experience throughout high school.

Rob: And from those jobs, how much money were you able to save by the time that you headed off to college?

Natalie: I had roughly $3,000 in the bank when I headed to college. That seemed like a large sum at the time, but as I was going through my studies, I realized that it wasn’t much to offset the cost of being a college student.

How She Saved

Rob: Here’s what I’m trying to figure out. You know, in terms of college tuition, yes, $3,000 isn’t a lot of money. However, in terms of what a high school student saves, it’s phenomenal. I worked all through high school, but I have to tell you that I didn’t save a nickel. I spent every dime I made.

Here’s what I’m trying to figure out: what motivated you? You had to make some sacrifices to save that amount of money. What motivated you to do that?

Natalie: I think that I am just one of those people who are really wired to be a saver. I remember being 14 years old and going to Staples and getting a little personal ledger where I could write down everything I spend – everything that I took as income and everything that I have retained at the end of the month. I was always so motivated by seeing that retained earnings number growing from month to month.

That was what gave me more pleasure than eating out or spending money on other odds and ends. There are ways to have inexpensive outings in New York City. There‘s just so much to do there. I got a lot more pleasure from growing my savings than from doing expensive activities on the weekends and during the summers.

Rob: I like how you refer to it as retained earnings. Is it a fair guess that you did not call it that when you were 14 years old?

Natalie: Most likely not.

Rob: Yes, that comes from my days of evaluating financial statements. So, you think that you’re just wired that way. You referenced to the jobs that you had. Some of them were in New York City. You got them because you came from a low-income household.

Natalie: Correct.

Rob: Do you think that somehow, that experience growing up motivated you to save?

Natalie: I think it was. I think that growing up in a low-income household, I was always motivated to break that cycle a little bit. I was definitely never in a position where I was wondering where my next meal came from, but I definitely lived in a paycheck-to-paycheck household. Recognizing that early on and seeing my mother go through the shackles on how to pay for this bill and that bill, I wanted to make sure that I was never in that position when I got older.

You are absolutely right. That was the motive for me to really make sure that my personal financial house is in order.

Rob: It’s interesting to me because I grew up in the same situation where I didn’t miss a meal but where it was very much paycheck-to-paycheck for a lot of my younger years and growing up to high school. But, unlike you, that point in my life didn’t motivate me to save. That came later. As I talk to more people, I deconstruct why some people like you go get a ledger at age 14 so you can track your retained earnings.

You saved $3,000 while others didn’t. Part of it may just be that some people are hardwired to do that. But I think all of us can learn it. Okay. So you saved $3,000 in high school. You headed down to DC for college. How did you pay for college?

Taking Out Student Loans

Natalie: Again, going back to being from a low-income household, I was eligible for a pretty substantial amount of scholarship money from the school. They were very generous. Basically, the scholarship covered my tuition but it did not cover room and board. Quite frankly, I knew quite a few people at the school who were in the same situation, and you can really take advantage of being in that situation because you can get a lot of control over your non-tuition expenses.

So I tried to manage that side as much as possible. In the beginning, I was living in a dorm, and I needed more money in order to cover the dorm costs and some of my food costs because I wasn’t making very much money as a work-study student. But since the tuition was covered, that was a huge burden off my shoulder. But again, I still needed the loans for some other expenses.

Rob: So you got student loans to pay for basically room and board?

Natalie: That’s correct. Yes.

Rob: I’m just curious. I actually had a listener who emailed me the other day. The email was about student loans. I’m going to try to do some more about it. Specifically, it was: When you were getting your student loans, did you just contact someone at the school’s Financial Aid Office to figure out what the best options for you? How did you figure out which loans you could get? What were the best options?

Natalie: They actually serve it up (at least where I went to school) on a platter when I first got my acceptance notice. It’s all part of the student package. I knew the loan type – Stafford versus Perkins loan – and the amount for each. They actually put it very clearly on the line items. How much each was going to be? What they don’t tell you is the log-in information for you to be able to access it online. It’s a cruise somewhere in space, and you can’t really get a handle on what the full balance is until you do some investigative research yourself to find out. You use a log-in username and password to access that information.

Rob: Did you eventually track all that information down so you could see how much you had borrowed?

Natalie: Not until after my sophomore year, actually.

Rob: Okay. That is interesting. So for the first two years, I’m sure you had some rough idea of how much you had borrowed, but you didn’t know the exact amount.

Natalie: Yes, that is correct.

Rob: That is interesting coming from someone who got a ledger at 14 years old. Did that drive you crazy that you didn’t know the exact amount?

Natalie: Yes, I’m a little ashamed to say that. I didn’t do the investigative research that I should have until I was coming off at the end of my sophomore year. I knew what the line item amounts were. But for example, I didn’t know how much interest had accrued on my unsubsidized Stafford loans. For my subsidized loans, I knew that what I saw on paper was going to be what I saw when I graduated because there’s no interest that accrued on them. But for the unsubsidized, I was completely clueless. Not to mention, there were also origination fees that they don’t outline on that line item sheet.

Rob: Oh, that is interesting. So you had fees just to get the loans and as you said, some were subsidized and interest was not accruing. But, you also had unsubsidized loans where interest was accruing.

Natalie: Yes, that is correct.

Investing at 18

Rob: You mentioned that at around the end of your sophomore year, you figured out your balance. I want to talk about that. But before we do, let me just take a step back. One of the things that you said on your email to me is that starting at age 18 you started investing in an index fund.

Natalie: Yes.

Rob: I didn’t even know what an index fund was when I was 18 years old. What prompted you to do that?

Natalie: There was a book called Multiple Streams of Income that was published by a gentleman by the name of Robert Allen. It was published several years ago. My mom handed it to me right before I left for school. I don’t really remember the reason why, but I remember this new book when I went off to school. A lot of the strategies that he mentioned in there were a little out of reach for me because I just I didn’t have my hands on a lot of money to be able to execute some of the things that he is recommending.

But I distinctly remember flipping to one page and he wrote, “If you don’t do anything else in the book, at least do this: a simple S&P 500 index fund. Put money in it every single month, and don’t touch it, ever.” And I thought, “Okay, that’s something that I can do.”

He also added a note in there saying that “you should commit to investing $50 a month.” And I said, “Okay, I can do that.”

I knew that I can at least pool in and consistently give $50 a month for this fund. So, I picked up the phone. I called the mutual fund company that was recommended in the book, and then I immediately started giving contributions of $50 a month for the fund.

Rob: Wow. I’m looking at the book now. I don’t think I’ve read it although it looks familiar to me. I’ll link to it in the show notes so other folks can check it out if they want to. I’m curious, which mutual fund company did you use?

Natalie: Sure. It was through Transamerica Investment.

Rob: Okay.

Natalie: Then I actually think that they have sent up their account minimum to open up an account. But at that time, it was only $50 a month to get started.

Rob: Minimum investments seem to rise over time, but a lot of them will allow you to open up an account and fund it at a lower amount if you do automatic withdrawals each month. I’m curious. Do you know what prompted your mom to give you that book? Was she very focused on investing and that sort of thing?

Natalie: I think that she recognized my desire to get out of the paycheck-to-paycheck cycle that my family had been in for so long. One thing that she figured she could give me was knowledge to help me with that fight. She had given me books like Multiple Streams of Income, Rich Dad, Poor Dad, and other books of that nature that I just kind of gobbled up in the years before college and when I had gotten to school.

Rob: What do you think of Rich Dad, Poor Dad?

Natalie: You know, it was difficult for me to execute some of the strategies on that book. Again, it’s sort of like Multiple Streams of Income. First of all, I wasn’t old enough to do a lot of the stuff that they had mentioned. Also, I didn’t have my hands on the funds needed. But all in all, I thought that it was a well-written book. I’m sure that some of the folks who followed the strategies through the ’07 and ’11 period had some difficulties in the market. But I personally thought that it was a well-written book.

Rob: Yes, I did, too. I don’t agree with everything that Kiyosaki preaches about money. The thing is, even if you don’t do real estate, which is his focus, you can apply the principles in that book to anything – even in investing and in index fund (even though he seemed to think that those are slow ways to get rich). Anyway, I suppose that that’s a topic for another podcast. I think it’s probably his best book, and I have read several of his.

Okay. So you read the book. It said that you should put this money in and don’t ever touch it. Do you still have that mutual fund?

Natalie: You know, this is probably something that we’ll get into a little bit later on, but I actually cashed it out to pay my last student loan right when I graduated.

Rob: Well, that’s a good way to use the money, right?

Natalie: Right.

Paying Off the Debt

Rob: Let’s go back. You were in college. You’d gone through two years and now you’d gotten what you need to log-in to your accounts to see how much you’d borrowed. What was the number?

Natalie: The number was $12,000.

Rob: How did that number hit you?

Natalie: It was a little difficult to see at first. I had no idea that it accumulated that much. Like I said, I had a rough idea how much it was but I didn’t think that the amount had gotten to the $12,000 range.

Rob: So when you saw that, what did you do?

Natalie: Let me take a step back for a second. I read Dave Ramsey’s book before I did the research to find my loan balance. And one of the things he very clearly outlined for his Baby Step Two is to get an idea of all the debt you have – precisely how much it is. This was one of my action items – go in and make sure that I knew exactly how much I owe at student loans.

Rob: And you are referring to the book Total Money Makeover?

Natalie: Total Money Makeover. I’ve read it cover to cover in a matter of a couple of days, and I started taking action on it. As soon as I saw that number, I thought that I had to take care of it as quickly as possible.

Rob: How did you do that?

Natalie: To offset that $12,000 of student loans that I have had, I had about $5,000 in savings at that time. Between what I had saved when I entered college and what I had saved two years after I had gone into college was not very big of a difference. The jump was from $3,000 to $5,000. I’ve been delivering newspapers from my first two years of college, and, as you can imagine, it didn’t pay very much, and it also didn’t give very many hours. So I had a difficult time edging up my savings during that time.

Rob: Okay, but let me just make sure that I got your story correctly. You were delivering newspapers while you’re attending school full-time?

Natalie: Yes. I would wake up at 6am, two to three days a week to deliver newspapers.

Rob: And from that income, you saved $2,000?

Natalie: Yes, I did. I also worked the summer in between. But most of it was newspaper earnings.

Rob: I think that that’s phenomenal. Okay, you read Dave Ramsey’s Total Money Makeover. You had $5,000 in the bank, but you had $12,000 in loans and you still had two more years of college.

Natalie: Right.

Rob: So what was your plan then?

Natalie: I had an immediate “I’ve got to stop the bleeding” moment because I knew that if I hadn’t done anything, the loan balance was going to double by the time I graduated. I was already signed up to study abroad in the fall of 2010, so I knew that my ability to earn income was going to be limited. But then, I knew that I had to have a solid action plan to pay down this debt when I got back from studying abroad.

It turned out that I had to take out another $3,500 in loans to study abroad, but I made a very difficult decision at that time to take off a semester after I had gotten back from the study abroad program so I could work. The income that I earned during the period that I worked from January to August 2011 put me in positive net worth territory finally.

Rob: In other words, the income you earned during those eight months was enough to pay off your student loans?

Natalie: Yes. I was putting away about $1,300 to $1,500 a month when I was working.

Rob: You’re free to decline to answer this question. You said you were putting away between $1,300 to $1,500?

Natalie: That is correct.

Rob: On what kind of income?

Natalie: I think that in the beginning they were paying me about $16 an hour, but I got a raise to $18 an hour. The caveat that I should throw in here is that I was living under my brother’s roof at the time, so I was paying nothing by way of rent. I would also eat meals with his family in the evening, so that was a huge help.

Rob: Did you work 40 hours per week?

Natalie: I was working a 40-hour a week. That’s right.

Rob: I mean, I was just doing a quick math here but that’s maybe about $3,000 before taxes.

Natalie: Yes. I was living on very little, and my brother worked on the same company so I carpooled with him to work. I mean, I really had very little by way of expenses.

Rob: I guess by this time you had $15,500 in loans, right?

Natalie: Yes, that’s about it.

Rob: You were able to obviously save. We’re talking roughly 50% of your gross income. And through eight months of work, you have saved up enough, along with what you had already saved, to pay off your loans. Now, you were to go back to school. So how did you deal with the room and board expenses of two more years of college?

Natalie: I actually didn’t make a move to pay off all my loans until right when I graduated. I kept the money that I had saved in a savings account. I kept the loan money. I didn’t take any immediate actions to pay that down. When I went back to school, I actually had to dip into a little bit of the money that I had saved during that eight-month working period, so that was a tremendous help with helping me pay for my room and board expenses going forward. And I also moved off campus into a studio apartment that I shared with someone. That significantly reduced the amount of my expenses.

Rob: Okay. Did you keep working?

Natalie: I kept working in a work-study capacity when I finished the long-term internship that I had done. So I was back down to making the newspaper delivery type wages.

Rob: And were you still able to save money on those low wages?

Natalie: No, I wasn’t. For that period that I went back to school, that first semester, I was not able to save anything. But I was okay with that because I was in the positive net worth territory, and that just put me at ease.

Tracking Her Net Worth

Rob: Were you actually tracking your net worth during this time?

Natalie: Yes. I have a net worth spreadsheet, and I tally it up every month so I could see it that way. I wasn’t good about it – some months here and there. But, I was good enough about it to be able to go back and do the research for this interview.

Rob: Okay. How many years worth of data do you have?

Natalie: The summer of 2010, when I mentioned that I first looked up my loan balance, I believe that that was the first year that I had done a net worth calculation. It was really simple because I had the investment account that I mentioned, the savings account, and the loan. So it’s just the two assets and the one liability.

Rob: Right. And do you still track your net worth today?

Natalie: I do.

Rob: Do you find it encouraging looking back to where you were and seeing how far you’ve come?

Natalie: It’s incredibly encouraging. Four years ago, I didn’t think that I would reach the kind of numbers that I have today. It has been four years since I really got serious about getting out of debt and building assets. That tracking that I did over that time… I attribute a lot of my success to just being able to see with full transparency how much progress I was making every month.

Rob: Yes. And it kind of keeps you honest if you have a bad month. It’s like that for me, anyway. I’m trying to lose weight. If I know that I’m not doing a good job, I don’t want to get on the scale, right? It’s also like that with finances. If you know that you had a bad month and now that the end of the month is coming, it’s painful to figure out your net worth. But your tracking forces you to kind of stay on track as best as you can.

Natalie: It does. And you can do course corrections accordingly, so it’s good to have those information in front of you.

Rob: Right. I have tracked our net worth for a long time and then like you, I had some periods of time when I hadn’t kept up with it. I’ve been pretty good about it for the last several years. But I have old net worth statements going back like a decade ago. When I look at those, it’s really eye-opening. It’s like, “Wow. Slowly but surely, we’re doing okay.” It can be very, very motivating.

Natalie: Yes. I can imagine looking back a decade from now and I will have my 20-year old net worth statements. What feeling will I have during that time when I look back at the negative net worth I had at age 20?

Rob: Yes. I suspect that you’re going to look and be very happy with how you’ve progressed.

Natalie: I sure hope so.

Rob: One thing you said to me (and I just want to make sure that we got this right) is that you realized what your net was. You read Dave Ramsey’s book which said “no more debt.” For the last three semesters of school, you did not eat out a single time. Is that literally true or you’re just saying that you didn’t eat out very often?

Natalie: I guess it’s not literally true. There were a few times here and there but I would confidently say that 95% to 98% of my meals were either prepared by me and brought to work or eaten at home.

Rob: Okay. So you’re working in school. You’re good with how you’re managing your money. You graduated at the end of 2012?

Natalie: Yes. I graduated in December of 2012.

Rob: When you did that, you were able to take the money you’d saved at that point and pay off your student loans?

Natalie: The last week of classes, I just made a big $20,000 chunk payment on my loans, and I was done with it forever.

Rob: Now, $20,000? Was that because of accrued interest?

Natalie: That was because of accrued interest and an additional loan that I had taken out. The school had an arrangement where we had to take out loans since we were getting scholarships from the institution.

Rob: Really?

Natalie: For the last loan that I took out, I actually just put the loan into my savings account and then paid it back when I was graduating.

Rob: The school… Wait a minute. If you get a scholarship, the school mandates that you also go take a loan out?

Natalie: That is right because their first option is that you don’t have the financial need for the scholarship if you’re not taking the loan as well.

Rob: That is just insanity.

Natalie: I thought that it was incredibly strange when I first heard that. I denied the loan and then I got a call from the Financial Aid Office that said, “We’re going to ship away your scholarship money if you don’t take this loan.” Of course, I needed to scramble to take the loan. But I just thought that it was ridiculous that that was one of the stipulations.

Rob: The cynic in me starts to think, “Okay, does the college profit when you take this loan? Do they get some fee? Do they get some origination fee or something?” I have never heard that before.

Natalie: I hadn’t heard of it before either. I hadn’t encountered that situation, but it’s very real.

Rob: Did the loan accrue interest while you had it out, or was it an interest-free term while you were in college?

Natalie: That loan was actually serviced by my university, and they did subsidize the interest on it.

Rob: That’s good.

Natalie: Yes. But still, I have a hard time coming up with any reason on why they would mandate a student take out that type of loan.

Paying Cash for a Car

Rob: That’s right. That is odd. I haven’t heard of that before. Okay. So you graduate, you pay off your student loan, you have no debt, and you get a job. Then, you’re just consistent with basically everything you’ve told us. You paid cash for your first car. How did you do that?

Natalie: I had some money saved up above and beyond what I had to pay for the student loan. And then I also had a signing bonus from the company that I joined. I literally took my signing bonus money, went to a used car dealership, got a pretty good deal for a car, and I just drew a check for it and drove it off the lot.

Rob: So you bought a used car?

Natalie: I bought a used car – 2011 Chevy.

Rob: Okay. Can I ask you how much you paid for it?

Natalie: I paid $10,750 for it.

Rob: Now, did it kill you to write that check?

Natalie: Oh, absolutely. Interestingly enough, I actually don’t include my vehicle as part of my net worth calculation these days. When I wrote that check, I just thought that I was saying goodbye to that money.

Rob: You know what, Natalie? I think that that is absolutely the right way to think of it. I do the exact same thing. We all know that cars are going to depreciate and then you’re going to get rid of it eventually. Then, you’re going to get a new one.

Natalie: Exactly.

Rob: It’s painful. I paid cash for my last car. It’s painful. But sometimes you need to experience that pain to keep you from doing something dumb with your money.

Natalie: I completely agree.

Rob: Did the dealership have any reaction to the fact that here comes this young person into their dealership and pays cash or strokes a check for a car?

Natalie: Yes. It’s interesting that you mentioned that. It’s a very small dealership but the buzz got around the office very quickly. Actually, a couple a folks (the financing gentleman who works there and the gentleman who was selling me the car) were both trying to convince me to get a loan for it. I had to convince them that that wasn’t necessary. It wasn’t in line with my philosophy. So finally, they took the check and let me drive off with the car, and the rest is history. I’m still driving the car to this day.

Rob: It’s funny. I bought my last car which is a used Toyota in McLean, Virginia, which is a very well-to-do area of Northern Virginia. I walked in with my laptop because I was going to do a wire transfer. I made the comment… I was just thinking that it was a very wealthy area. I bet a lot of people pay cash for their cars. And I said, “I bet this happens a lot – people come with a check or people come in with their computer and they would do a wire transfer to pay for their car.”

He looked at me and he goes, “No, you’re the first.” And I thought, “This is just crazy.”

Natalie: Wow.

Rob: Anyway, the thing is, car dealerships make a fortune if you borrow through them on a car loan. They’ll definitely try to convince you to take out a loan if they can.

Natalie: Right. That part didn’t surprise me. Naturally it’s in their best interest to try to convince consumers to take out a loan.

Buying an Apartment

Rob: So you graduated not even two years ago?

Natalie: Not even—about a year and a half.

Rob: What have you done since then? I think you’ve bought a condo, right?

Natalie: I did. When I first started the job on March 4, 2013, I was still living in a shared studio apartment, so compared to my income I was paying very little in rent. And, I was also traveling, as I mentioned earlier. So my transportation and meals were paid for by my company. I really didn’t have much by way of expenses and was able to go into overdrive and save a tremendous amount of money in 2013. Enough to the point where I had 10% to put down on an apartment in DC.

Fortunately, they’re trying to do quite a bit more lending for apartments in DC, so I was able to get a conventional loan which is 10% down.

Rob: Oh, great. Did you have to pay part of a mortgage insurance?

Natalie: I do not have to pay PMI, but the interest rate is a little higher than I would have liked.

Investing and Advice

Rob: Okay, yeah, yeah. That’s just fabulous. Now, are you investing?

Natalie: I actually just started contributing to my company 401k plan last month because after the condo purchase, my next goal was to build up 6 months cash reserves, and I just hit that goal a couple of months ago. Then I immediately signed up for my company’s 401k plan.

Rob: Can you give us a sense as to how you’re investing the money? In other words, what kind of mutual funds?

Natalie: I’m doing a 10% contribution from my gross income right now. And I just wanted everything directed into an S&P index fund. I’m in talks with the financial planner right now to get some more advice on how I can invest the money into something in line with my retirement goals. But, just as an immediate action to get started, I did fully, 100% in the S&P.

Rob: I actually think that’s a great way to get started. My sister has a similar situation a couple of years ago, and she was asking me what to do. I said, “If you’re just starting out, just put it in an S&P 500.” She was in her 20’s then.

And it’s well diversified so that if you’re young enough you can work towards a more diversified portfolio with bonds or international funds— maybe even some REITs as some point. But, if you’re just starting out contributing money, you’re starting out with relatively small amount so money and it’s just a simple, easy way to get started. Does your company match any of your contributions?

Natalie: They do. I actually was invested with the 401k program until I hit one year with the company and that was in March, 2014 so I’m eligible for a 6% match, but they don’t kick it in paycheck to paycheck. They kick it in at the very end of the year.

Rob: Okay. It sounds like you’re doing fantastic. If you look back, what mistakes have you made? I mean, as I hear your story I can’t find too many. So, do you look wishing you had done things totally different?

Natalie: To be completely honest, I think there’s such a thing as being too much of a tight-wad with your money. I believe I missed out on some experiences in college because of the fact I was taking every opportunity to work during breaks and summers. So I didn’t get to enjoy a lot of those activities that some of my peers did. Well, yes, they do have student loans to pay back for the most part, but I think that I could have found a little bit of a tradeoff between working and freeing up some money to be able to travel and do other things.

I think that even impacts me to this day because having worked for about a year and a half now, I haven’t taken a single vacation. I think I still have that ‘hustle mentality’ that I had during my undergrad years. So, it’s kind of a little difficult moving away from that.

Rob: That sounds like something that you’d like to try to be able to do?

Natalie: Yes, absolutely. I think it just takes some baby steps. So, what I’m hoping I can do once I start meeting with the financial planner is if they can tell me, “Okay, Natalie. If you save this percentage of your income you’ll have this much left over for fun money in a month.” I just need someone to tell me that it’s okay to spend a little on items that are not necessarily necessities. That way I can enjoy some of the income I’m making.

Rob: Right, right. Sometimes it is helpful to get a third party view of anything. In this case it is finances. It can give you a perspective that is perhaps hard to achieve or reach on your own.

Natalie: Right, and that’s exactly what I’m hoping to get. Just an unbiased point of view on things.

Rob: That’s fabulous. You mentioned a number of books that you’ve read. Are there any others you liked, whether it’s personal finance or investing?

Natalie: The Millionaire Next Door is a book I really enjoyed. I think I read that in my second year of college. Richest Man in Babylon, which I’m sure you’ve read, is another one I really enjoyed. Actually, one of the favorite books I think I read during my sophomore year was a book called, A Million Bucks by 30. It was written by someone who graduated from UGA (I think) then moved up to New York and lived in housing projects while making $40,000 a year.

He does a full description in the book of how, from the age of 22 to the age of 30, he was able to become a millionaire in New York city.

Rob: I will link to all of these in the show notes. I’ve read The Millionaire Next Door and The Richest Man in Babylon but I have not heard of A Million Bucks by 30. But looking it up… I’m looking at it right now on Amazon, and I love the subtitle— How to overcome a crap job, stingy parents and a useless degree to become a millionaire before (or after) turning 30.

Natalie: That was exactly what pulled me in, that tagline that he put on there.

Rob: I’m not sure what I think about stingy parents, but other than that I think it looks interesting. Okay. I will link to those in the show notes. I appreciate your time today in sharing your story, particularly as it relates to getting through college without any loans. Certainly you had tremendous help with scholarships. But even so, you could have easily come out of school with $30,000 or $40,000 in loans just for room and board— and you didn’t. And what you did have you were able to pay off in full.

I just think that’s such an important story for people to hear because right now, so much of what the press is preaching is all these helpless, hopeless college students who just can’t help but get a liberal arts degree and $200,000 in debt. I think we need more people out there with examples like you saying, “No, no, no! That’s not your only choice. You’re not a victim here. You can stand up and make some decisions on your own, improve your situation and get through college without a boatload of loans.”

That’s just my prospective. But itsounds like that’s obviously what you were able to do, and do well.

Natalie: Yeah, absolutely. And by no means do I think my story is unique. As I mentioned earlier, I knew several other people I went to school with who had the same scholarship I had, but because different choices were made, like you mentioned, they graduated with $30,000 or $40,000 in debt as opposed to being able to wipe off that debt as soon as they graduated. It’s funny… I was listening to a program on NPR recently where they were honing in the difference between the sticker price and the net price of college.

While it’s true that on paper college looks to be very expensive (and for many people it really is) what you see in those publications about how much ‘X’ university costs per year, is usually not what your average student is really paying. So there are ways to work with the financial aid office to make sure college can be affordable for you.

Rob: Okay, good. The friends (or acquaintances) that you mentioned had the same scholarship as you did that still graduated with a lot of debt, are you in contact with any of them now?

Natalie: Yes, I am.

Rob: Do you guys talks about this. Do they say, “Man, I wish I’d done what you did. These student loans are awful!” You mentioned you had some regrets about not having more fun in college, but do they have regrets about how they handled the money?

Natalie: It’s a very delicate topic (my personal financial situation) especially when I talk to friends. I even sometimes have to hide the fact that I’m a homeowner because when people find out, I’m sort of treated a little bit differently. And I think some of my friends are a little bit in awe of what I’ve been able to accomplish, but I don’t want that to be a differentiator between myself and them. I think some of my friends who do know about the car situation and the apartment situation quite frankly think that I have extreme amounts of parental help and didn’t work as hard as I did.

So I typically stay away from that topic. But I do often hear my friends talk about shelling out $300 or $400 for student loans per month or how they feel so poor, and I just can’t relate to those topics so I typically just play a listening role whenI hear those discussions come up. And I try to avoid those discussions as much as possible.

Rob: I can certainly understand that. Okay. Natalie, again, thank you so much for you time. Is there anything else you’d like to share with us before we bring this podcast to a close. Anything else you think folks can benefit from? Any other experiences that perhaps we haven’t touched upon?

Natalie: I would simply reiterate the fact that I don’t think my story is unique. While I was eligible for hefty scholarships from school, again, there are lots of other scholarships that students can write essays for and get funding for when they go into school. There are ways to minimize your debt load or completely eliminate it. It’s a shared burden of both the student and parent. I think the student should take it upon themselves to work in college and to be able to have some ‘skin’ in the game when it comes to funding their education. And also, parental support is very critical.

Rob: Right, right. And the other thing is, the college you choose is important too because they vary in price, significantly.

Natalie: They do. And I was fortunate enough to go to a private institution that had pretty generous scholarships. But had that not been an option, I actually, probably would have gone to community college for two years then transferred to a state school because there still is incredible value in following that method.

Rob: There really is. And it’s a lot less expensive. Again Natalie, thank you so much for taking the time to share your story. We really appreciate it.

Natalie: Thank you very much, Rob.

Author Bio

Total Articles: 1083
Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Article comments

Esther says:

We loved this podcast! Thanks for sharing.

Ryan Guina says:

Very inspirational story, Natalie. I’ve seen too many people just assume that debt is a way of life and accept it without questioning whether or not there is a better way. I hope your story reaches a lot of people and inspires them to make similar financial decisions. Best of luck to you!

Natalie says:

Ryan – Thank you for the feedback! One thing that I did not mention during my discussion with Rob is how my debt freedom (as well as my path to debt freedom) has had a positive impact on my career. For example, I made it a point to tell the short version of my debt free story during most of my job interviews. I received four full-time job offers in the months leading up to graduation and I strongly believe that explaining my journey to the various interviewers that I met with played a key role.


Aaron says:


Thanks for sharing your story. My family and I certainly enjoyed hearing about your dedication to improving your financial position. This is a great lesson for my children.

Two of my son’s passions include traveling and financial services. I certainly wouldn’t expect you to name your employer, but would you be able to provide any details regarding the type of job you currently have (maybe a job title)?


Natalie says:

Hi Aaron,

I am happy to share some additional information. I work in Management Consulting (think Accenture, KPMG, PricewaterhouseCoopers, etc.) and the group that I am aligned to interfaces with clients in the financial services industry. The work is purely project-based – the shortest project that I worked on lasted three months and the longest was eight months. My colleagues and I are typically on the road four days per week and back home the remaining three days.

Contrary to what many people think, this is a salaried position. While it is highly important to make sure that 90% or more of your time is spent doing client work, the larger consulting firms will still pay employees their (often fixed) salaries when they are in between assignments (also know as being on ‘the bench’).

Hope this helps!

Alan Corey says:

Congrats on all your success, Natalie!!

And thank you mentioning my book on the podcast as well, I’ve gotten a lot of new traffic from your shout out, it’s very appreciated. The way you are going, I’m looking forward to reading your book soon. Whatever happens in the future, you’ve already accomplished more than most. So bask in your success, you’ve earned it.

Keep it up and keep on inspiring.


Natalie says:

Thanks, Alan! Back in college, I posted a video review of your book on YouTube. One of the highlights of my undergraduate years was when you embedded the video on the blog website that you were running at the time. I am looking forward to reading (and perhaps reviewing) your newest book!

Alan Corey says:

Oh that was you! So cool.