To achieve her FIRE (Financial Independence, Retire Early) goals, Dr. Lakisha Simmons had to redefine her definition of the American dream.
“In 2017, I went through a divorce,” says Simmons, a former associate professor at Belmont University and mother of two boys. “At the time, I was living a life society would call successful; I had a big house, nice cars, and traveled the world. I was living the American Dream… but it didn’t feel like it anymore.”
Simmons felt strapped for cash and was living paycheck to paycheck. It hit her that she didn’t have much money saved in her mid-thirties.
“I stayed in the family home,” she says. “I had one income, three mouths to feed, and was in a huge house that everyone marveled at, but that had turned into a money pit.”
Simmons wanted to get to a better place financially. She discovered FIRE through a Google search about financial freedom and committed to spending less, saving more, investing, and cultivating financial independence. She retired in May of 2021 with $50,000 in cash and $850,000 in investments, creating enough cash flow to pay her family’s bills for the rest of their lives. She’s now a financial educator, public speaker, author, workshop facilitator, and entrepreneur who doesn’t have to work if she doesn’t want to.
Here’s the advice Simmons has for anyone who wants to create financial independence and retire early.
Start By Facing your Numbers Head-On
To get serious about FIRE, Simmons first assessed her current financial situation. As a 37-year-old professor, she made $100,000 a year, had $5,000 in liquid savings, and had $125,000 in her retirement accounts. She also looked at all of her monthly expenses. She used the free budgeting app Mint to track her monthly transactions, and also signed up for an account with Personal Capital to track her net worth.
Simmons had limited knowledge about the FIRE movement and personal finance, so she began reading blogs, articles, books, and watching YouTube videos. She figured out how to calculate her FIRE number and used it as a target to reverse-engineer her retirement plan.
Find Cost-Effective Alternatives and Live Well
After the end of her marriage, Simmons found herself saddled with a large home and all the bills associated with maintaining it. To achieve her goal of FIRE, she knew she needed to make some drastic changes to her financial situation.
“I realized I was strapped for cash and didn’t have much in the bank,” she says. “The mortgage was $2,400 a month, things kept breaking down, and maintenance expenses were adding up. This was not how I intended my life to be. It hit me all at once and brought me back to my childhood. I could see myself as a young Lakisha, where we didn’t have a lot, where we had just enough. I felt like I was going backward instead of forward.”
Simmons knew she had to make some hard decisions as a single mom with two boys. The house was giving her the most stress, so she sold it; the five-bedroom home sold in one day. The transaction helped Simmons walk away with $35,000 in profit that she invested into the stock market, and selling the house cut her annual expenses by $12,600 a year. The professor moved herself and her two boys into a 1,000-square-foot apartment.
She eliminated any expenses she felt were unnecessary, shopped at discount stores, found cheaper alternatives for what she and her children needed, and invested every spare penny into the stock market. Some of her tips include:
- Getting rid of cable for streaming services—a savings of $1,440 a year
- Switching her big provider cellphone plan to Mint Mobile—a savings of $1,620 a year
- Adjusting insurance policies to have more affordable monthly payments
- Shopping at discount grocery stores such as Aldi for lower prices
Find ways to cut expenses, but not at the cost of your comfort – otherwise the savings will be hard to sustain. You can find cheaper alternatives for necessary expenses without restricting your life.
Make More Money, Then Invest It Well
“I was a professor, so I knew I could do speaking gigs,” she says. Simmons launched a consulting firm called BRAVE Consulting where she offered group workshops and online coaching. She also wrote a book that was published in 2018 and began making royalties. She got the extra income she needed and lived on 40% of what she made while investing 60%.
On the investment side, Simmons chose to put a majority of her money in a S&P 500 index fund. She maxed out her 403(b) and 457 investment accounts, which both allow up to $20,500 in yearly contributions tax-deferred. She also maximized her annual investment in her Roth IRA ($6,000), with any other spare income going into a general brokerage account.
Enjoy Life on Your Terms
After four years of hard work, Simmons achieved her FIRE goal in May of 2021 at 41 years old. She had enough in investments and cash to meet her monthly expenses, and her side hustles continue to produce extra income. She put in her notice and quit her day job as a professor.
“When I was on my journey to achieve FIRE, what enabled me to invest so much, and easily, is that I sat down and said, ‘what is the most enjoyable I can live my life in a way in which I value my time,’” says Simmons. “I realized the way I value time is with experiences; it’s not wrapped up in things.”
Today, after achieving financial independence and retiring early, Simmons lives life on her terms. She travels once a month, doesn’t have to have the latest shoes, and has remarried.
“I still drive a 2007 car and live in a modest townhome,” she says. “When I achieved FIRE, the celebration was a nice dinner, because I already live an enjoyable life.”
“I don’t need a lavish lifestyle to be happy.”