Hi everyone – welcome back to my series on women seeking financial independence. Today I have an awesome interview with Financial Orchid – a millennial in the pacific northwest and daughter of first-generation immigrants. Like many children of immigrants, the values of hard work, thrift, and achievement were engraved on her from a young age.
Lets learn more about Financial Orchid and her journey to financial independence!
Tell us about yourself!
Hello everyone! I’m Financial Orchid, a Millennial residing in the Pacific Northwest. I have currently been working full time for almost 10 years now. I graduated during the Great Recession and learned early never to depend on a solo source of income. Like many college graduates, I started out in low wage entry level positions, but in the last 10 years I’ve worked aggressively to build up multiple income streams and invest.
My parents are first generation immigrants from Hong Kong and I moved to North America when I was a baby; however, I speak, read, and write Chinese, and that’s an important part of who I am. I love dim sum, watching Chinese shows/documentaries, and cooking authentic Chinese food. When my parents came to North America they were already late middle aged with a young family. Similar to many immigrants they were forced into the position of self employment, and always encouraged me to become a “professional person” and assimilate into mainstream North American society (aka regular, stable, secure employment) –the typical Asian American dream. As such, I have seen first hand the benefits and drawbacks of being self employed from my parents vs being an employee myself today.
Although today I live and work independently, the frugal immigrant habits haven’t left my DNA. But I’m no where as hardworking and hustling as my parents were. As I watched my income, savings, and investments compound through the market’s heavy lifting, I still haven’t forgotten my frugal roots.
How did you become interested in personal finance, and financial independence?
My parents were always frugal, and lived within their means. Since they were self-employed and older than average parents when they had me, they really could not take on much debt. Furthermore, my parents raised me during periods of high interest rates. That means savers were rewarded, and borrowers paid a high cost. Millennials, however, have not yet experienced this in their adult lives, since they were taking advantage of low borrowing costs and were disincentivized to save when the interest rate rewarded them so little.
When I entered the workforce, I barely made a penny after rent and living expenses, but I was concerned about losing out to inflation (something I learned in business school) and wondered how my meager savings could ever catch up to the largest cost for everyone –housing. I couldn’t afford to hire a financial advisor, because I heard about their excessive fees, and I didn’t even know how to invest in TFSA/Roth IRA. I didn’t understand they were vehicles, but somehow I managed to open an online trading tax free savings account. In college I actually studied portfolio management, and an upper year classmen advised me to play with pretend money through online stock simulation games. Well, I did not beat the market in the stock simulation. I did not know what cap meant in large cap, or what my professor was saying about PE, PV, PB… Why did he somehow expect us all to know what those things stood for?! How come everyone in class seemed to know everything already?! Maybe I wasn’t cut out for a career in the capital markets…
Later I did find the couchpotato website, and found the ideas a lot easier to understand than all the complex Excel modeling my classmates did with VBA programming. Corporate Finance and Portfolio Management were all pretty hard for me to grasp to be honest, but the couch potato investment method, and asset allocation principals were a lot simpler and more straightforward than trying to understand Monte Carlo Simulations. So a few years out of college during the Great Recession and bouncing around jobs, I finally got recruited into a public company that offered stock options, defined benefits pension plan, and whole other slew of benefits a lot of Millennials may not have even heard of. Coincidentally, stocks were at an all time low, so I just funneled whatever I could afford back into the stock market considering I was at the start of my work life. Fortunately, I did understand time value of money, present value, future value, and compounding in my finance classes.
CMO Note – I’d never heard of the Couch Potato website before I got this interview, so I went to take a look. It looks to be Canadian based, which is cool, and is a passive indexing strategy. I hang out at Bogleheads (well, lurk) which talks about many of the same concepts. Love the Couch Potato name!
A lot of personal finance blogs emerged around this time after the Great Recession and today I would credit Financial Samurai, JL Collins, and Mr Money Mustache for introducing me to the world of FIRE.
Tell us about your FIRE journey – and motivation. What does FIRE mean to you?
I don’t have a rags to riches story. In fact, I have to admit my parents did most of the heavy lifting. I did grow up witnessing the volatility though. The mission of my blog is to budget for next generation wealth. There’s a Chinese saying that wealth creation is difficult, but maintaining created wealth is much more difficult. As Millennials that are in the childbearing stage of life now, I see my responsibilities as being able to sustain the wealth created in the prior generation into the next generation.
Personally I find this a lot more daunting task since there is precedence and higher expectations to grow the pie bigger rather than creating the pie in the first place.
What’s unique about pursuing financial independence as a woman?
There are more career opportunities for the Millennial generation than their moms’ generation. We live in a different interest rate environment from our mothers, so we can’t necessarily take their mom’s advice on what they did in their 20s and 30s. A lot of millennial women gained financial education through the Internet. Women consider long term childbearing situations in the beginning of their career. Thus they are proactive to create income opportunities that allow them flexibility to raise children in the pursuit of financial independence. In other words, women are innately entrepreneurial, and hustlers because they are cognizant of glass ceilings, and corporate roadblocks early on in life that will potentially conflict with reproduction. The workaround is to start building multiple income streams as early in life as possible and to avoid marrying a guy with debt as JL Collins advises in his letters to his daughter.
What advice would you have for other women on this path?
If you decide to leave full time employment to take care of young children after a certain net worth value has been reached, I recommend having other sources of active income that complements your current family situation. Such as running a daycare, carpooling service for other kids in your child’s school, or starting a cooking class for other moms. Having your partner on board with this is also important because they have to understand your competing priorities.
For older women who have achieved certain financial milestones and still want to get married, I think it’s important to be flexible. This can be really hard after being financially independent for a long time. The older you get, the more baggage people you meet will carry with them. So if you are slightly older, still dating, or seeing a long term partner, then you may have to adjust expectations. Many people you meet at this stage in life will be carrying student debt, mortgage, or alimony from prior relationships.
If FIRE is part of your core value, then it will be hard to be married or in a common law relationship with another person if they have a vast disparity in wealth from you. You need to decide early on in the relationship how much financial liability you are willing to accept from the potential partner, or want to keep looking. If you are an older woman who is determined on FIRE, then you may want to reconsider whether marriage is still a priority at your current stage in life. This is a highly personal decision and increasingly difficult the wealthier you are.
Where can readers find you?
CMO Here Again
Thanks so much to Financial Orchid for stopping by to share her story! I love learning more about all the different women seeking financial freedom. Her story is one I haven’t had on the site before – as the child of first-generation immigrants, my understanding is that the values of thrift, hard work and achievement are very typical. I also thought her advice to other women was interesting. It’s true that it’s not good to become totally dependent on a spouse/partners income, but I don’t know that you necessarily need to work in a paying job. It’s great if you want to, but volunteering or starting a business are also wonderful options.
Be sure to leave Financial Orchid a comment, and stay tuned for more awesome entries in this series!
Interested in more stories on women seeking financial freedom? Find the full list here.
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