Turning a ‘Hard No’ Into Financial Freedom

Ivanna Hampton: Rethinking how you earn, spend, or invest can set you on a path toward financial freedom. I talked with the hosts of the rich & REGULAR podcast at the Morningstar Investment Conference in April. Kiersten and Julien Saunders revealed what it’s like when one spouse is excited about pursuing FIRE, but the other spouse isn’t interested in following a retire-early movement. They also stressed the importance of giving side-hustle income a purpose and why they’re now an Aldi family. Here’s the conversation.

Hello. All right, well, thank you Kiersten and Julien Saunders for joining me on Investing Insights. Welcome to MIC, Morningstar Investment Conference.

Kiersten Saunders: Thank you. We’re very excited to be here. It’s our first time, rookies.

rich & REGULAR

Ivanna Hampton: Awesome. Well, I hope you get to check out today’s exhibit hall and get to meet and network. So let’s kick it off with: You guys are here at the conference promoting your own podcast, rich & REGULAR, and I hear that you guys are going to talk about the challenges today’s families are facing. Can you give us a couple of those?

Julien Saunders: So there’s a lot going on with families, but more than anything, I’m just excited that we’re bringing it back to family because there’s so many other things, so many other reasons to be engaged with investing. But I think ultimately the thing that ties a lot of people together is the love and the desires and the ambitions that they have for their families. But that’s not to say that there aren’t some challenges that are happening there. So we’ve been learning a lot, just having our own conversations and trying to lead our own. But certainly we collect a lot of stories along the way. And we’ve been combing through quite a bit of data over the last couple of weeks with the help of ChatGPT to help us make sense of like hundreds of pages of insights and to squeeze that into about a 30-minute conversation.

Are You Comfortable Talking About Money?

Ivanna Hampton: Well, all right. So if you go to rich & REGULAR website, you will see in big blue letters “inspiring better conversations about money.” Now we all know that—money comes up in a conversation, different emotions arise depending on who you are. What would you tell someone who’s uncomfortable talking about money to make them comfortable talking about money?

Kiersten Saunders: I would just explain that conflict is a natural part of the journey. I think a lot of us think the absence of conflict is what makes a conversation productive, or the fact that you’re able to solve a problem at the end of a conversation—that’s what made the conversation worth it. But wrapping your head around the fact that you require some add backs, a lot of these conversations are just dots that will eventually become a line, but it’s not this one and done conversation. Sometimes they’re inconclusive, but you’ve just made progress because you started to talk more about what you’re feeling on the inside.

Joining the FIRE Movement

Ivanna Hampton: So our conversation kicked off something that you guys did in your own lives. You guys decided to pursue FIRE—financial independence, retire early. What was that conversation like?

Julien Saunders: If I were to write a new book, it would start with like what not to say and what not to do. Right. But that was basically all my fault, I’ll accept it. I got hooked on it, I found that world, I fell down the rabbit hole, got very excited, brought it home to my wife and she was like “absolutely not. That’s something that I’m not interested in,” all she heard was beans and rice, peeling apart 2-ply toilet paper to get by and I was like, “Well, that’s not exactly what I’m trying to get us to do.” But for her it was really just a matter of—and she probably explains it better than I can—reframing it and helping her see the reward. Like what do we win, what can we gain? What might our lives look like if we actually are able to do this? Quite honestly, even if we just get halfway there, what are the freedoms and the privileges that we will have given ourselves or gifted ourselves if we get there? And I think that was the thing that ultimately got her. So, originally started with “Well, this is what it would require us to do. These are the things that we would have to stop doing or things that you would take away. But here’s what you win,” and luckily I was able to kind of lure her in with that. Because she is not a morning person, and so the first thing was like, “Imagine being able to sleep in,” and that was it. She was hooked.

Kiersten Saunders: I’d do it.

Ivanna Hampton: So when Julien brought up FIRE, what was going through your mind at the time?

Kiersten Saunders: It was a hard no, absolutely not, absolutely not. But at that time, this was back when blogs and social media specifically geared toward finances were just starting and because of SEO, and because of algorithms, they were all on the very extreme end. There wasn’t that nice middle ground that had the nuance. It was all very rigid, rule-based, you can’t do this, you got to save this, you’re not FIRE unless this. And so I found the extreme frugality very limiting based on how I had already set up my life, I had expenses for hair care and self-care. I had family that I wanted to travel and see. I had plans to be in people’s weddings, and none of that was on any of these blogs. And so I just felt like that would require an entire lifestyle shift, and it was a hard no for me. When I realized and actually went out and met the community and not just based an opinion off of the blogs on Page 1 of Google, I realized that there was a lot more to it and there was a spectrum and that we could define our own path, and that’s what it made valuable for me.

Ivanna Hampton: So which path did you choose?

Kiersten Saunders: It’s still evolving. I think at first, when we were traditionally employed, we followed the pretty traditional path. We were living off of one income, so we had a really high savings rate of over 50%. At our peak, we were saving and investing 70% of our income, but then life happened. Life be lifin’. So we had a child, we moved to a larger house, we had childcare. We started taking care of a financially insecure parent. And so we started to adjust our plan accordingly. And so right now we’re in a season where if I had to pick a label, we’re probably a combination of Coast FI and Slow FI, but I don’t know. I don’t know what you would say?

Julien Saunders: I don’t know that there is a word for it, really …

Kiersten Saunders: rich & REGULAR.

Julien Saunders: I consider myself an entrepreneur, to your point, that’s essentially why we created, or in part why we created that term, because that’s just who we are. We’re in this really in between stage where we do have the freedoms that allow us to do really cool things like this. I get to work with someone that I love. I get to work doing work that I love. Helping people that I love, and it’s more than enough to maintain our lifestyle and, to Kiersten’s point, solve a lot of the problems that we’ve solved. And so it’s a really interesting place to be in.

Kiersten Saunders: If I had to think about what “rich & REGULAR” stands for, it’s that middle ground, where it’s like I’m rich enough to take advantage of some of the freedoms, but I’m not so rich that I’m removed from everyday life. I still have to wake up and clean noses and fold my own laundry. I am still very much one foot in, one foot out. And so the logistics of managing that, so that you don’t end up too far on either side, is what we talk about every week.

Building Generational Wealth

Ivanna Hampton: Awesome. So, I’m hearing three words a lot within the Black community, among my friends, social media, TV: building generational wealth.

Julien Saunders: How did I know that was going to be …

Ivanna Hampton: Yes, we’re going to talk about that. What do you guys make of this movement right now?

Julien Saunders: It is overwhelming. I’ll just be honest. It’s overwhelming because it’s such a gargantuan problem that we’re trying to solve, but I also understand the spirit of it, as someone that is very community-focused and someone that is the first in his family to reach the heights that I’ve reached. One of the first things that you want to do is to look back. There’s this ancient African word called sankofa, which is the idea of looking back so that you can go forward. But when you look at that from an investing standpoint, well, that creates some challenges. What that means is that your money is going backward, right? You’re reaching back, you’re paying respect and honor and in some cases you are financially supporting your parents, your elders, your nieces, your nephews, your community, instead of, or at the cost of, investing for the future, and in many cases investing for your own.

So what we see is that a lot of people are really dealing with this internal conflict. What do I do to be a leader in my family and to represent what some people refer to as the culture is to do all of those things, which you could argue in order to move the culture forward, you have to do some things that are kind of seen as anticultural. And so all of those things are really complex, really messy, highly emotional. But we actually welcome those conversations. That’s the role that food and fun kind of plays because it helps to take the edge off of people who are trying to navigate all of those things, all of those messy emotions, and turn that into tactical financial advice or actions.

The Racial Wealth Gap

Ivanna Hampton: Yeah, because it seems like it requires some sort of balance. You’re thinking about your kids, but then you’re thinking about your parents at the same time. So it’s this kind of sandwich generation effect that people are experiencing. Let’s talk about the racial wealth gap. Morningstar has done research on this, and let me look at my notes, so I hit it perfectly: U.S. Census Bureau data released in 2021 shows median Black households earn $0.62, median Hispanic households $0.74 for every dollar a median white household made. What do you think it’s going to take to build up Black dollars, just as we were talking about you’re looking forward, you’re looking backward: How do we do that?

Kiersten Saunders: I mean, I think policy is what kind of got us into this mess, and so policy is going to ultimately be the thing that brings us out of it. But while we wait for all of the powers that be, there’s a perfect storm of needing public moves, private moves, and individual moves. So the things that we talk about to Black families and to marginalized families across the board are things that they can do as an individual. Things like multiple streams of income, pursuing business ownership, investing on a regular and consistent basis, even if it’s a small amount, making sure that they’re doing estate planning to make sure that there’s a plan should their income need to be replaced. All of those financial foundations are the things that individuals can be doing and be encouraged to do as a means to rally against this overwhelming gap that continues to grow.

How to Turn a Side Hustle Into Extra Wealth

Ivanna Hampton: You touched on multiple streams of income. Let’s talk about side hustles because it seems like either we’re talking about or someone has one, right? How can you turn a side hustle, that extra income, into wealth?

Kiersten Saunders: I thought you’re going to answer.

Julien Saunders: You started to nod your head. I think it starts with practice, right? In our book, we actually talk about this. We have a framework that we’re asking people to follow with respect to how they manage their careers, and in the middle parts and the latter parts of their framework, it’s a matter of what we call “finding your superpower.” You have a superpower. Everyone has a superpower, that thing that they are really, really good at. Obviously, there is a company that’s willing to pay you for that. What we’re asking people to do is say, “Hey, that’s not the only company that’s willing to pay you to do that.” There are tons of financial advisors, real estate investors, smaller companies. You can also create a product. The internet has made it significantly easier for people to create and sell and earn income passively than ever before.

And so it’s really just a matter of trying some things, and I think everyone is motivated by some things. Some people may be motivated by the things or the access or the power that some people have, just like my point with Kiersten earlier was sometimes it’s just a matter of saying these are the things that you’ll be able to do or the frustrations in your life that you’ll be able to wipe away. And that’s a problem that can be solved by a $5,000 product or a $10,000 product. And so it’s like, “Oh, wow, I never thought about my hobby as being the thing that can remove this pain in my life. This thing that’s really, really frustrating.” And I think that’s relevant for people who don’t have enough money, but I think these days it’s also relevant for people who are a little older, that are seeing all these things, maybe they’re a little underfunded. They don’t really want to go back into corporate America, but they didn’t realize that, actually, there’s a little thing that they could do that might be able to earn them an extra $10,000 to $20,000, and they’re really, really good at it.

I came across a podcast, I think it’s called the Cool Grandpa podcast, and I listened to a couple of episodes, and I was so excited because it was the first time that I’d heard a grandfather owning a podcast and owning his space and really embracing technology. And he was getting featured in the press and obviously all of those things lead to growth, subscribers, and, as a result, earned income for him, right? And so those are the types of things that I was not only excited about, but I was also excited to share and show that people who are older and say “Hey, look at this Cool Grandpa over here. We don’t have a Cool Grandma podcast yet, maybe you want to launch it,” or some Cool Auntie, whatever it is. But these are the real things that are happening, and there are people who are making sizable amounts of money doing it. I think it just starts with getting those reps in, overcoming that courage, and embracing the internet and all the other ways of earning income that exist today that didn’t exist a few years ago.

Kiersten Saunders: I’d also add just giving that income a purpose. I think a lot of us go into side hustles trying to apply all of the knowledge and experience from our corporate gigs or what we’ve learned in our nine-to-fives, but the structure of your side hustle and the big company that you work for are completely different. And so we overcomplicate, instead of just saying “I’m doing this to earn the $7,000 I need to max out whatever account I’m trying to max out,” we go into it creating the infrastructure that Facebook uses or that your favorite company uses. You spend all of this money, and you accrue all of these expenses, so it becomes an unprofitable endeavor instead of a tool that just helps you move forward. And so I think the ability to keep it simple, find lots of stories and find inspiration at every income level, don’t just click on the “This person made six figures or seven figures in three years.” Click on the person who earns an extra $1,000 a month, because that could be the differentiator between your financial goals and where you are right now.

Ivanna Hampton: And I see a lot of those articles because I click on them. “You made six figures in one month and you work two hours a day.”

Kiersten Saunders: “Oh, and you’re 12.”

Julien Saunders: I think I read that article. That was just a couple of days ago, and I felt like while the amounts are getting longer, the periods of time are getting shorter, and I was like I don’t know where this stops.

Kiersten Saunders: It’s not going to stop because now, AI.

Ivanna Hampton: Right?

Kiersten Saunders: And you’re not even human. Bring it in.

“Are We … an Aldi Family Now?”

Ivanna Hampton: 15 minutes a day. So I was researching for this interview, and you guys have a blog post that it struck me, it struck me here, because inflation is hitting grocery bills. We’re all looking at the receipt like—this is costing a little bit more than last week. So you guys, I recommend everyone check it out. The headline of the blog post is, “Are we…an Aldi family now?” And I can imagine this conversation after you put the cart back, you got your quarter, you got in the car, and you’re starting it up and you’re like, “Maybe some things are about to change.” Can you describe your experience going from a pricey grocery store to a cheaper one.

Julien Saunders: And so I am so proud that you read that blog post, and I’m filled with joy. I wish Aldi paid me to be here because I would be a proud sponsor of them. But for me it was a turning point. I’m someone who has a strong culinary background. I’m someone who takes a lot of pride in the food that I eat. I remember when I had reached a certain income level, and I was so proud to leave the regular grocery store behind and take my fancy behind to Whole Foods so I could buy all the fancy things. And it was an important part of what Kiersten calls “elevating the everyday,” which is something that we live by because that’s important. We might not be able to drive a luxury car every single day, but we’ve got the best coffee, and that really matters to us in the morning, or we really care about our sheets because we sleep on those sheets, and it means that we’re going to rest well, and all of that is going to lead to just greater happiness in life.

And there was just a very similar feeling with food, but then over the last couple of years, things got a little weird. It was like “OK, this is very expensive.” I don’t know that I am experiencing a 20% increase in happiness, but I’m certainly paying 20% more for the same food and groceries that we were buying just last month, and so something broke in my brain, and I said let me give Aldi another shot because I had went there about a year ago and the particular store that I went to—let’s just say it was not quite there yet. But this time it had all the things that I really, really enjoy, and I just fell in love. For a couple of weeks there, it was almost like a game that I would play to see if I could spend more than $100, and I failed miserably the first four times. I got everything that I needed, but I couldn’t quite ... I would get $91, $93. I would have to literally splurge on something that I didn’t want just to break $100.

And so again I mean the immediate impact on our budget was just like so wonderful. And I hadn’t had that feeling in a while, and so I’ve been really hooked on that. But I would just say for anyone out there that is looking for a way to save money, it’s just reexamine where you are grocery shopping and if you haven’t been to an Aldi or I think the other brand is Lidl or any of those other brands, I think this is certainly an area—food, it’s one of those budget lines where a lot of people just kind of give up and say, “Listen, the house is what it is, the car is what it is, food is what it is,” but food doesn’t quite have to be. And I think Aldi is one of those places where you can get an immediate cost savings. And I would say this as someone with a culinary background: little to no difference in terms of quality of product. And that to me was the best part.

Ivanna Hampton: So the verdict is: you’re still going?

Julien Saunders: Oh yeah.

Kiersten Saunders: Oh yeah.

Julien Saunders: I love Aldi.

Kiersten Saunders: He’s an Aldi fan. I’m surprised he didn’t get the merch. You know they came out with like clothing line.

Julien Saunders: They didn’t have it. They just came out with it looks like an old-school 1970s color like Run-D.M.C. tracksuit situation, and I was going to buy it. I may just end up buying it online, but I wanted to see it in store. I wanted to feel it, but they didn’t have it in store, or it’s just sold out because it’s so cool looking.

Kiersten Saunders: Yeah, you had to line up like Jordans.

Julien Saunders: But yeah, Aldi now has a merch line, and I’m that much of a fan that I may be wearing it.

Ivanna Hampton: They have those weekly finds, I mean and then in the seasonal products that they offer, things sell out.

Julien Saunders: I didn’t understand that at first, but now I’m a big fan and apparently free brand ambassador.

Ivanna Hampton: For now.

Julien Saunders: For now. I’m coming for you.

Ivanna Hampton: So elevated... what was it, elevated …

Julien Saunders: Elevated every day.

Ivanna Hampton: I love that. I’m going to think about that. I’m going to go and play some like “I need to elevate this, I use this every day.”

Julien Saunders: $15—she brags about the soles in her shoe or inserts in her shoes. Just a little things that just make quality of life go through the roof.

Kiersten Saunders: You don’t want to get rid of all of them cause then you stop being funny. Like you got to have something that annoys you a little bit every day. But the things that you touch and experience every day that you can afford to upgrade, like the cost per use because you’re using it every day and deriving a little bit more joy from it, is worth it, in my opinion.

Ivanna Hampton: It’s giving yourself permission to enjoy some luxury.

Kiersten Saunders: Yes, exactly.

Money Conversations and Pursuing Financial Freedom

Ivanna Hampton: So, I got one more question. This has gone really fast. I just want to know: How would your life have been different had you not had that money conversation to pursue financial freedom? Will we have that everyday elevation?

Kiersten Saunders: Everything would be elevated. Yeah, I know my life would be totally different because at that time I was not even thinking about finances. I was one of the people who had a ton of consumer debt. I assumed I had a lifetime to catch up, pay for it. I was always making money, and I assumed that was easier to manage money, so I probably would be in so much debt right now. I would be up to my ears in consumerism and trying to figure out and defining the moment that I’m in as stuck, which is what we hear from a lot of people: I’m stuck, I’m stuck. And what it would require is just someone—like a lot of the people that are here today—helping me kind of untangle that knot that I had created for myself. But I can’t think of another intervention that would have been as powerful as like falling in love that would have disrupted the pattern that I had built for myself and the life that I saw for myself.

Ivanna Hampton: All right. Julien?

Julien Saunders: I know I wouldn’t be where I am. I wouldn’t be rich & REGULAR. I would be rich and miserable. I’d be richer, for sure.

Ivanna Hampton: Different podcast.

Julien Saunders: But I would be completely miserable, and I say this jokingly, but I have several visions of people that I know in my mind, people who have far more measurable financial wealth than we do but come to us asking us for tips on how to live. They don’t quite know. They haven’t learned how to spend. They haven’t learned how to nurture relationships. They have fractured marriages. They have all of these things. They’re suffering from mental health issues, and they don’t really know how to unwind because they spent decades accumulating money. But they have no real way to make a life of it. And so I think I would have likely fallen along those paths. And quite honestly, I know I still have the makings of that in me, I know that I take so much passion in what I do and so much work in what I do. And so for me, it’s a matter of knowing how to turn that part off, get outside, which has been a big thing for me, just sort of reconnect with the broader world and use all of those things to create the lifestyle that we have come to appreciate.

Ivanna Hampton: Thank you, Kiersten and Julien for your time today and for the stories. I live for the stories.

Julien Saunders: Thank you.

Kiersten Saunders: Thank you for having us.

Ivanna Hampton: Sure.

Thanks again to Kiersten and Julien for that fun and great conversation. Be sure to check out their rich & REGULAR podcast.

Subscribe to Morningstar’s YouTube channel to see videos from our team, and say ‘Play Morningstar’ to your Alexa devices for market insights from Morningstar.

I want to thank lead technical producer Scott Halver, audio engineer George Castady, and senior video producer Jake VanKersen.

And thank you for tuning into Investing Insights. I’m Ivanna Hampton, a senior multimedia editor at Morningstar. Take care.

Read about topics from this episode.

How to Have More Productive Conversations About Money

Can You Retire Soon?

How to Find Funds That Address Systemic Racism and the Wealth Gap

11 Charts Examining the Racial Wealth Gap

How to Achieve Black Generational Wealth