Hello folks! I have something special for you today, a FIRE-side chat with Ricard from Escaping to Freedom! The FIRE-side chat is an interview series I’ve started to share the journey toward FIRE (Financial Independence Retiring Early) from others. I’m a believer that personal finance is personal and it is important to find our own path toward FIRE. I think hearing from others is a great way to help us formulate our own ideas and our own path.
So without further ado, let’s hear from Ricard!
First, tell me a little bit about yourself. Who you are and what’s your story?
Hello! My name is Ricard Torres, hailing from Barcelona, Spain.
I used to always follow the norm: get good grades, go to university, get a respectable job. Pretty much what most people do. The only problem was that it wasn’t making me happy. I had everything I thought I wanted, yet there was something missing.
After weeks of looking for what was missing, I learned that the only reason that I wasn’t happy was because I wasn’t passionate about my career and I had to spend 8+ hours in an office, pretending to be busy. I kept showing up every weekday just to earn some money. That was it.
I figured that if I could replace the income I was making, I could use my life to do really meaningful things – way more than just filling in spreadsheets and creating Powerpoint presentations all day!
So I challenged myself: If I could save up a large amount of money, I’d be able to quit my career and become an entrepreneur. I’d be doing something that I felt a real connection with while eventually having a much higher earning potential.
So that’s what I’m doing now. I’m growing the income I earn from Escaping to Freedom and other side hustles so that I can maximize my savings rate and accelerate my journey to financial independence.
When did your interest in personal finance begin? Did your parents have an active role in your financial literacy growing up?
To be honest, I didn’t really think about money too much until I was about 25. I just knew that I wanted money to buy the things I liked – and to survive, of course! In my uneducated mind, there was no point in saving money for the future – if I saved anything, it was to buy something expensive down the line.
Looking back, I was such a fool!
My parents taught me about not spending crazy amounts on stuff that you’ll be bored of after a few weeks. They also instilled the idea that one should never borrow money or spend above their means. Apart from that, my financial education was pretty average: I got a weekly allowance that I had to manage and save in order to go out with my friends or buy videogames.
The funny thing is that my dad works as a mutual fund manager, so he really understands the power of compound interest and the stock market – yet he never forced me to save and invest. I guess he wanted me to realise it by myself!
At what point did you learn about and begin your FIRE (Financial Independence Retiring Early) journey?
I remember the exact point where it all started.
It was during a car journey with my girlfriend after a long week at work. We were both feeling pretty miserable about our working lives and how little time and energy we were left with in the evenings and weekends. She then asked me:
“Is this it? Is this all there is to life? Are we just meant to go to work, drain ourselves and only really live on the weekends?”
Believe it or not, that comment was so profoundly powerful that it sparked my journey to financial independence. After the car journey, I started looking online for other ways to live life, and that’s when I stumbled upon the financial independence community of bloggers!
After reading about what some of them had been able to achieve I knew this was the right path for me to follow.
FIRE Journey Questions:
Where are you currently on your path toward FIRE (Financial Independence Retiring Early)? Just starting, retired already, or somewhere in the middle? When do you expect to reach your goal and what’s your strategy to achieve it?
I started around two years ago and it’s been going well! I’m focussing on dividend growth investing, so my portfolio consists only of large, stable stocks that increase their dividend payout every year: the likes of Coca-Cola, Johnson & Johnson, or Chevron. It’s a great feeling to be paid more every year without fail!
According to the spreadsheet that I made for myself, I should be reaching financial independence somewhere between 35 and 39. It depends on a few variables, mainly how much money I am able to earn in the next few years.
Tell me how you would consider your FIRE (Financial Independence Retiring Early) journey to be unique.
I think that most people who are trying to achieve FIRE rely on a single paycheck from their 9-5 jobs. While this is also how I started my journey, I decided to take a risk and start my own business.
The thing with a business is that it’s difficult to make money at first. There is a lot to learn, and you need plenty of time for things to just fall into place. However, there isn’t an earning ceiling – you can earn as much as you can make.
This is what I believe will happen: I’ll fall behind on my plan to FIRE now, but after a few years I’ll be making way more that I ever would have by being an engineer – even with a few promotions and bonuses.
Strategizing FIRE Questions:
What has been your primary motivation to reach FIRE (Financial Independence Retiring Early)?
I see way too many people with jobs that suck all their time, energy and happiness. These people often have young children who they only see late in the evenings and on weekends.
I’m doing everything I can to prevent myself from becoming one of those people. I want the freedom to spend time with my future children and to live a happy life without much of today’s levels of stress.
I can’t remember where I heard this first, but I hold dear the advice that it is important to “retire to” something rather than “retiring from” something. What will you be retiring to?
That’s great advice, and it’s definitely what I’m going after. Rather than really retire, I’d like to spend my time doing things that I love, but won’t necessarily bring me any money.
I love the idea that mastering any skill takes 10,000 hours, which equates to about 10 years if you spend 20 hours per week on whatever it is you’re trying to learn. That means that every decade I could do something completely different. In my 40s I could become a musician, in my 50s I could open an animal haven, and in my 60s I could create independent movies.
When money is taken care of and you have all the time in the world, anything is possible. Life unlocks itself.
What will your housing situation be like in retirement? Do you plan on moving to a low cost area, to the beach or mountains? Or will you become nomadic, traveling the world more freely?
I definitely plan on spending a few years traveling the world and living in different places for a few months at a time. However, I’d like to have a base somewhere, with a fully paid-off house which would bring my expenses down.
Since I plan on being financially independent at a relatively young age, I imagine I’ll have young children (scary thought!), so I don’t think we’ll be moving anywhere during the first few years.
Wealth Creation Questions:
Retiring early is quite an extraordinary feat…and requires some pretty extraordinary behaviors to rapidly create wealth. In your focus on wealth creation, do you tend to gravitate toward making more money or arresting expenses?
I believe that reducing expenses must always be the first step in everyone’s path towards FIRE – and it wouldn’t hurt the average person either! It’s vital to understand how much money you need to spend in order to lead the life you want. I always focus on happiness – if something is a little expensive but brings me a lot of happiness, I’ll count it as an essential.
While cutting expenses can get you far, it’s also limited. There is only so much you can cut your expenses – unless you move somewhere much cheaper.
On the other hand, there isn’t really a limit to how much money you can earn, and it might be easier to do. If you’re already being frugal, cutting another $100 a month could mean a big decrease in your quality of life. However, making another $100 would only take you a few hours a month and anyone can do it.
While controlling expenses are important, you still need to live and enjoy life. What is one or two of your favorite areas to spend money on?
For me, it’s all about “happiness efficiency” – I always scrutinise the happiness that I’m getting from a purchase compared to its price. The things that aren’t cheap but make my life so much better are videogames. I spent close to $2,000 building my own PC, but the years of joy that I’ve received from it have far outweighed the initial expense.
I also never say no to going out wit friends or family. Restaurant meals or drinks aren’t cheap, but they’re often the only viable way to see some people who have super busy lives!
I tried being that guy that drinks tap water when others are drinking beer, but it really wasn’t worth it. I’ll now just have a couple of beers and just have a great time! The $10 I’ll spend are definitely happiness-efficient.
If you won the lottery or received a large inheritance to the tune of $1 million or so, what would you do with it and why?
I would first focus on becoming financially independent! I’d invest it all into dividend-paying stocks that were discounted. I’d make sure to space my purchases over maybe 2 or 3 years to make sure to capitalise on the various dips – and to dollar-cost average.
$1 million would definitely allow me a comfortable life, so anything I made after that could go to better causes. I really want to start giving to charity – both financially and with my own time. Once I reach FI that will be my focus.
I also have this idea of creating “care packages” for my nephews and nieces – and my own children when they come! I would maybe start different brokerage accounts and invest something like 50k in each. Within a few decades, they would become an important source of income which I could hand out to them if they every needed them.
They could then use these “care packages” as the basis to their own FI journeys – if they wanted to!
What is your favorite finance and non-finance related book, podcast, magazine, blog, etc and why?
The finance book that started everything for me was The Richest Man in Babylon. It opened my eyes to what was possible when you saved and invested. I think it’s a great starter book as it’s easy to read and also pretty entertaining.
My favourite book otherwise is probably The Shadow of the Wind. It’s set in my hometown of Barcelona and it’s an ode to books and writing stories. It’s phenomenal – and also pretty well-known worldwide.
What advice would you give to folks considering or just starting their journey toward FIRE (Financial Independence Retiring Early)?
The best advice would be to crunch the numbers. Make a spreadsheet and see the incredible power of compound interest. When I realised how much my money could grow with time I was convinced that I needed to save, invest, and reach FIRE!
We all suffer from moments of low motivation when nothing seems to go according to plan. That’s when a spreadsheet that shows you how your money will grow comes in handy. It’s a great motivational tool. Math don’t lie!
If you are a fellow blogger, where can I find you?
You can find me over at EscapingtoFreedom.com. I help people who are stuck in jobs they don’t like to escape the 9-5 by building an online business and taking control of their finances.
Thank you so much for having me! 🙂
Thanks for sitting down and chatting, Ricard! What a great interview! Definitely a favorite and one that I can relate to in many ways.
I hope you give Ricard at Escaping to Freedom a follow and check out his blog. Look for more FIRE-Side chats to be featured here in the future.
Thanks for taking a look!
The Green Swan