Mama Purple Answers Your Questions: Ask Her Anything

After Rich and Regular published a joint interview with me and Mama Purple y’all started asking more about my superhero of a Mom. To date, she is the only person to write a guest post for this site and did so describing her journey to retire at 55.

Well, now it’s time to take that post to the next level! I put out the call for y’all to ask her your own questions and you delivered:

A reader asked to hear more from Mama Purple on my blog and shockingly I got her to agree to step back into the spotlight! So, what questions do you have for her🤔? She retired at 55, 5 years ago, after not investing in stocks until she was 40😱. pic.twitter.com/ueXwnjCgVM

— A Purple Life (@APurpleLifeBlog) October 10, 2020

So in a rare turnover of this blog, I’m putting the keyboard in her capable hands. Take it away Mama!

MONEY

How has being a woman of color impacted your relationship with money?

I think the largest impact is realizing that none of my family members were familiar with investing. They only saved money either in a bank’s savings account, in CDs or in bonds (and going back 2 generations, under the mattress as a result of the depression era).

Also, my parents were always very against me quitting a job, especially when I did not have another one to go to. They were very big on “it’s a good company and you should stay there and be ‘loyal’ to them.” I was never loyal to any company and I believe that since none of my relatives worked in Corporate America, and I never heard any discussion on getting more money or advancing in Corporate America, it was because that these opportunities were not afforded my parents so their relationship with money and certain types of jobs were different than mine.

Why did you decide you wanted to stop working? What made you able to retire? (Low expenses? Budgeting? Income from other sources? Low cost of living area?)

I wanted to stop working because Corporate America was sapping the life out of me 🙂 . I changed companies often thinking it would be different at a different place. I worked for major conglomerates, for a non-profit and even for myself, but I was always miserable and felt that life was passing me by. When I saw that my retired parents were able to go visit their grandkids, travel and do whatever they wanted to do whenever they wanted to do it, I felt that was my only solution – to make that happen for myself because I was living too much for a company and not for myself.

I believe my ability to retire had everything to do with how I have always looked at money. I have never lived beyond my means and I have never spent money I didn’t have. I’ve never been in debt except when buying our house and even then we accelerated payments and paid 2 houses off in half of the mortgage payment schedules.

I have always lived in low cost of living areas, so that has helped as well. I did generate income from other sources, but only because I had private school tuition to pay for and that tuition was not in our everyday expenses. I am a firm believer in education, however, I did not have much faith in the public school system in Georgia so I vowed to never send my child to a public school in that state.

As a result, I had to find a way to generate additional income to pay for that private education, so I taught online at night for 7 years.  This allowed me to pay for Purple’s schooling and never have to take out a loan to do so. All of that income from online teaching went to pay for her high school and college tuition.

What’s the best lesson you’ve learned about money?

The best lesson was learned from my father. He told me to never spend all you earn and that whenever I get a raise or a bonus to act as if I never got it since I was living without it previously, and just save it.  He also taught me to pay bills on time and to pay credit cards in full. He hated being in debt and he passed that on to me.

Are you strict about sticking to a budget?

I have never been strict with a budget. I typically spend the same amount each month on everything – not much deviation – and my/our expenses have always been that way. There are no surprises with our expenses since we did not buy things outside of our necessary items (we rarely went out to restaurants and grocery costs were always pretty consistent). If there was an unexpected car repair, home repair or child “repair”, that’s what our savings were for and if it was more than we had, then we would delay it until we had the money to pay upfront.

Does anything still frighten or worry you about money?

Absolutely nothing – honestly. Once we got a financial advisor that we trusted and once my daughter (Purple) showed me articles outlining the stock market average gains over the past 100 years, I am not frightened at all!! I started investing right at the dot.com bust in 1999-2000, then came September 11, 2001 and my investments tanked again, then it was the October 2008 crash and my investments vanished again and now here we are, retired with COVID in 2020 and I am not at all worried. In all of these scenarios, the money has come back – always.

Also, I have never been afraid to quit a job.  I have always been one of the first people to raise my hand when a severance “package” is offered to leave the company, even if I had no other job lined up at the time. The lump sum payment I received was always incentive enough to leave and usually, I had been putting out job feelers anyway. I never worried that I wouldn’t have enough money because I had always saved my money, so even in those times when I was not working yet or wasn’t making as much money as previously, I was never worried about having or getting money.

How has your retirement balance changed in those 5 years with spending and interest earned?

Our balance has actually remained pretty constant over these 5-6 years (we invest 50% stock, 50% bonds). In the 5 – almost 6 years of retirement, we have only had our current advisor for the last 3 and our “gouging” advisor in the first 2.5 years. Because a prerequisite for us to retire was to pay off our primary mortgage, and also, we wanted to qualify for the ACA, so our “income” had to be monitored therefore our spending had to also be monitored in order to keep us under the threshold to receive healthcare credits from the ACA.

Are you using the 4% rule?

I haven’t specifically used the 4% rule. Instead, I wrote out all of our expenses and then in order to keep our income under the ACA threshold mentioned above, I determined how much had to be reduced from our expenses in order to meet the income requirements. In determining the amount we needed to have invested prior to retiring, I believe the advisor used a similar calculation to the 4% rule, but I never have.

How has COVID affected your retirement income?

It has actually increased our income. At the end of 2019 when the stock market was at an all time high, I told our advisor I would be needing a substantial amount of money for 2020 and 2021 travel expenses.  He withdrew that total travel amount in January 2020 plus the income we receive each month for the 12 months of 2020, and placed all of that money into our money market account.

Well, when COVID hit, all of our travel plans were cancelled so I received refunds or credits and we now still have that cash in our money market or bank account and have not had to disturb our investments this entire year so that they can recover without us touching them.

What is something you wish you’d known in your 20’s?

I wish I knew to not be scared to invest in the stock market and not to worry about not being able to “touch” a 401k until 59 ½.

What strategy did you use to invest in your 40s? I feel that I am so late to the game and have no idea how to catch up.

I didn’t really have a strategy. I only knew that I loved saving money and it wasn’t until I was in my late 30s that I started paying attention to my companies’ 401Ks and investing in general. Prior to that, I didn’t even invest in any company’s 401k because I didn’t like the fact that I could not access my own money until I was 59 ½. Instead, I wanted to just save it myself  (dumb).

But when I was about 39 or 40 and working at a large electric utility company, there was a huge push (aka bonuses attached for the executive leadership) to get everyone signed up for a 401K. So I had more and more people talking about it and the company offered “free” financial advisors and there was one woman on my team who felt comfortable talking to me about her own 401k and showing me its value (she was about 5 years younger than I was), she had already accumulated over $300K – that woke me up.

I became interested and started investing in the company 401k, but I still relied too much on the advisors offering suggestions on that investment “strategy.” Regardless, just continuing to put money into the 401k got me off to a good start and then my husband and I decided to invest more money outside of the 401k and that’s where we really got burned by so many financial advisors but yet still continued to save and invest (even in bad investments and high fees but still not as bad as the .25% bank savings account rates).

LIFE

What do you do for fun?/What do you most enjoy spending time on?

I love to travel and experience new adventures with my daughter. I am always looking for some type of unique excursion for us to do. We have already done hot air ballooning, dirt bike lessons, a cooking class, zip-lining, salt cave meditation, walking a half marathon, rock climbing, and lots of spas and snorkeling in some of the most beautiful reefs around the world. I also love doing absolutely nothing while lounging in my pjs and watching dumb reality shows 🙂 .

Have you needed to adjust your lifestyle since retirement?

I actually have adjusted my lifestyle for the better in retirement.  I often would “do without” and deprive myself of such luxuries like even taking a vacation – not so in retirement. I take vacations whenever I want, wherever I want. Prior to retirement, I only owned 4 cars since age 22 and would pretty much drive them to the ground. I never purchased anything fancy but instead always went the practical route. Now, when my current car goes kaput, I will treat myself to a nice car (still nothing too fancy or luxurious) but with some “bells and whistles” that I would have never gotten on the previous 4 cars.

HEALTHCARE

What do you do for health insurance?

Since retirement, I have used the Affordable Care Act and received a healthcare credit with a very high deductible so most of our doctor visits are paid out of pocket. Starting in 2021, my husband and I will both collect social security so our income will not qualify us for any healthcare credit and I will have to pay a higher premium for 3 years until I receive Medicare.

TRAVEL

If 2021 looks like 2020, what travel plans will you have?

I will travel domestically and will also go to whatever countries will allow Americans since I have no limitations and can quarantine if necessary before and after.

A Purple Conclusion

And that’s Mama Purple everyone! I hope this gave you some insights into a (almost) 6 year early retiree who started later in life and (I believe) provides a solid example of how it’s never too late to improve your financial situation 🙂 .

If want more Mama Purple in your life, here are her other appearances:

1. Bigger Pockets Money Podcast
2. Latestarter FIRE post

Do you have any other questions for Mama Purple?