How I Invested Over $50,000 While Tackling Personal Debt in a Few Short Years

By Todd Kunsman


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Back in 2013, I found myself living in an apartment I could barely afford, with student loans, a car loan, and about $1,000 in a savings account. I’d have about $100 left in my checking account to get me through until the next pay period after bills, rent, food, etc.

Que the sad violin ?

Now one bonus for me: I did have a small company 401k started, but I knew very little about it and was contributing like 2%, not even enough for the company match.

How I Invested Over $50,000 While Tackling Personal Debt in a Few Short Years

But I also wasn’t completely ignorant in understanding finances. I understood the value of a savings account, what interest meant, and building good credit, but what I thought were decent choices were actually doing more harm than good.

Then, in late 2014 I was let go from my job right before Christmas and early 2015 I started changing my perspective and figuring out how I could improve my financial situation. It was time to make a change.

In my journey, you won’t find a rag to riches story. Don’t get me wrong, those are super inspiring still and gave me the motivation to do more.

But that’s not the norm and achieving a million+ in savings or net worth is hard to achieve.

Yet, I think what I’ve done over the last few years anyone can truly achieve it and even being to reach financial independence.

Although I’m not completely financial free (yet) I’ve accomplished a few important milestones in the last four years, with more to come:

  • I’ve reduced over $50,000 of debt (student loan debt, credit card, car loan) down to less than $6,000. Just a few months ago I paid off my car loan completely.
  • Built a Vanguard account with over $53,000 invested (Brokerage + Roth IRA + Rollover IRA).
  • And have a savings account for immediate emergencies with another few grand.

I’m pretty happy with those results, considering I also battled job loss and was basically restarting everything I was doing financially and career-wise.

I also saw this: “According to a 2017 GOBankingRates survey, more than half of Americans (57 percent) have less than $1,000 in their savings accounts. While that’s an improvement from last year, when 69% of Americans reported having less than $1,000 in savings, a higher percentage have no savings at all: 39%.”

That is incredibly alarming and scary, but I was there too. Worrying about money sucks.

That’s why in 2014-2015 I started changing my mindset, absorbing as much info as I could, and tackled my personal finances head-on.

Below are the steps I took to improve my financial well-being that I think will help you too and you may even have better results than me. Let’s dive in.

Face Your Personal Finances Head On

Understanding where your money is going, how much all your bills or loans are, or how much you are saving is not the most exciting stuff for most people. Also, it’s something we probably have said, “I’ll do it later.”

It can be scary to think about and looking up your net worth can be quite demoralizing. But you need to get past that, embrace whatever the results are, and set aside time to break down your finances. It’s probably going to be painful at first, but it is the most crucial step you can take.

I broke all this info into spreadsheets to find where the money was going and what my savings rate was. It was pretty ugly, but that gave me more motivation to keep going.

Now I use Personal Capital to help keep track of bills and see how my net worth is changing. It’s free to use and I highly recommend it and wish I knew about it sooner.

But doing this is a great way to catch how much you truly spend on frivolous things, going out to eat, or paying for a service you barely use. I was able to cut spending and cancel memberships right away just but looking at the numbers.

Read, Read, Read, Read

As a kid, I was a big reader and loved crushing through a new book. However, once college hit I really just stopped, not sure if it was laziness or just an overall disinterest altogether. Probably both.

Yet, when it came to learning more about money, investing, and understanding the mindset needed to break the bad financial habits, reading was the key to my education.

It can be a bit overwhelming at first as to which books are the good ones to start with because there are THOUSANDS of books in this genre.

I had some great recommendations during this time and also discovered some solid ones on my own. I’ve added them to the recommended page on this site, if you want to take a look at the full list.

Here are a few that were key:

  • Your Money, Your Life
  • Rich Dad, Poor Dad
  • The Millionaire Next Door
  • Money Master the Game

I’d start with those above if you are interested in changing your finances, but even after that, continue to read. No matter how knowledgeable you become, your financial education never stops. ABL. (Always Be Learning).

Develop A “Pay Yourself First” Mentality

You’ve potentially have read or heard about “paying yourself first” when it comes to finances, but if not that is okay.

I first came across this concept in the book, Rich Dad, Poor Dad, but if you Google search the term you’ll find tons of articles about this concept.

Simply defined: Before you pay your bills, buy groceries, pay a student loan, or anything else, you set aside a portion of your income for saving. This could be putting money into your 401(k), your Roth IRA, your savings account, or other investment accounts. The first “bill” you pay each paycheck should be to yourself.

Sometimes, it can be a somewhat controversial view because paying bills and loans on time matters. But, by paying yourself first you learn a discipline to cut unnecessary spending, take the steps to actually build a consistent savings schedule, and know how much to keep leftover for upcoming bills.

Typically, you’ll pay bills, loans, rent, etc. first and then probably put money towards saving last. But, in the meantime you, see extra in your account and spend it on unnecessary items, extra groceries, or put off saving until the next pay period. That cycle then continues.

By reversing that mentality, your savings rate will greatly increase and you’ll be smarter about spending. It worked for me and was crucial to get my savings rate up.

Develop Extra Income Streams and Invest the Profits

Doing side work, starting a side hustle, or building a passive income stream is one of the best things you can do to improve your savings. Whether that is freelance work, consulting, building an e-commerce store, flipping on eBay, creating a blog, finding a side income will be beneficial.

Yet, whatever income you get from these “side hustles” should be directly invested in your retirement accounts or added to your savings. This will help exponentially grow your savings and boost your investments.

Luckily for us, we are in a perfect time to create passive income, without doing a ton of work each week. Now, some of the ones I listed may take some time to put together, but if you can grow and put forth some initial effort, a few years later you can be making some serious money with minimal work.

Additionally, many side hustles have become serious full-time opportunities for people and can even help you grow in your main career. Starting a blog was key for me to learn more about marketing, SEO, which added more credibility and opportunities for me.

Find Mentors and Experts

This was one of the most important tips when it comes to financial success. Find a mentor or mentors and really pay attention to everything they do.

If you do not have any friends or family that are mentor-worthy in your eyes, look online for experts and even if you do not reach out to them, follow their blogs and advice (Note: do not blindly follow investing advice though, always do your own research too).

You’d be surprised when you reach out to others how willing they generally will be in helping you and providing advice.

What is the worst that can happen when you email someone that you hope to be your mentor? No response.

What’s the best that could happen? Life changing financial advice.

I was fortunate enough to have two friends who I’ve known for quite some time who are financially free and learned more about side businesses and investing. We still talk about investment opportunities, real estate, and various ways to make money.

Be Patient

Patience is one of the most difficult traits to have, not even just for millennials but I think all generations can struggle with this. Good things take time. Of course, you can fast-track things and some people are able to reach the next level faster than others, but patience is still key.

I’ve been at this financial independence journey for just over four years and only have over $50,000 saved. Compared to some people my age, that doesn’t seem to be a lot. But remember, I started from scratch basically, battled job loss, career shifts, car loan, and student loans. I’m pretty excited about my current achievements. Plus, thinking back to the average Americans have saved, I’m crushing money.

But now that a lot of debt has been tackled, I have $50,000+ invested and increased my job salary, the growth of my accounts will start to move quicker than before. Thanks to the compound interest of investments and a growing saving rate, I know my acceleration will be exponential in the coming years.

So don’t be discouraged, even if you are only saving a few dollars a month, it all adds up. In a few years, you’ll look back proudly at your accomplishments.

Honestly, I can’t believe how far I’ve come. Just remember, financial independence is for the long-term with the goal of cutting down your retirement age by 10, 15, or 20+ years.

How are you changing your finances?