How I Went From Welfare Kid to Financially Independent and Semi-Retired at 37

Hello best life seekers!

These days I’m financially independent and spend my time traveling the world or the US and pretty much live how I want without worrying over bills, a paycheck, or anything else in the rat race existence in which most people find themselves. I left all that behind when I semi-retired around three years ago at the age of 37. So how did I get to this wonderful point? After all, as a kid I grew up on housing assistance, food stamps and other welfare programs. Though I went to college, I graduated with six figure debt. Shouldn’t it have been impossible to do what I did?

Here are the five steps that took me from a poverty statistic to financially free.

#1 – A Goal of Getting Ahead

People like to talk about the cycle of poverty and how pernicious it is. You’re born into it and you die in it. That’s the statistic. Growing up, that’s what I saw too. I also watched a lot of middle class/working class people fall into poverty. By the time I was 17, my family had been homeless, my siblings and I in and out of women’s shelters with our mom, and I’d attended seven different public school systems across the US. On the face of things, I should have repeated the cycle of poverty and I almost did.

While I was growing up, so many people around me wanted a better life. You can’t say poor people don’t. Many work very hard. The causes and cures for poverty are endlessly debated. I’m not wading into that quagmire. Instead I’ll show what happened in my own life.

Few escape poverty like me. What made me different? Two things. Without either, I’m not sure how far I would have gotten.

A burning passion. Firstly, I was lucky enough to have a burning passion to get out of poverty and do something with my life. I wanted to travel the world and work for social reform. Looking around, I didn’t see that happening if I stayed in my small hometown with no prospects for a job or the education I wanted. My life also wouldn’t change if I did what everyone else around me did – I’d just become them. Doing the same thing and expecting different results is a known definition of insanity, right? I wanted out and so I knew I had to change course from how my family lived hand to mouth unless I wanted to wind up that way too.

That burning passion for change wasn’t just a wish or dream or an intellectual should that so many have. It was so intense a desire that I couldn’t imagine not working to achieve it. Doing nothing was literally an impossibility for me. It wasn’t a “I will try” to earn money or “I should” work harder. No, it was “I will do everything possible to reach my goal. Period.”

Effective goal setting. Secondly, not only did I have a burning passion, but I harnessed it with structure. Almost everyone wants more for themselves. Few go about it well despite their best intentions or efforts. I was lucky in that I had a goal, a plan, and a reliable means for making it work. You need all three.

My goal was a burning desire to do something successful with my life. As a kid I was never certain what that might be and it changed by the hour but I knew it wasn’t living on welfare, working a minimum wage job and never seeing the world. I thought to be successful and become financially stable you had to go to college. The only way I was going to get there was on a scholarship. My plan became graduating with fantastic enough grades to win a scholarship. Why this goal and not a basketball scholarship or other means of getting out? Some people are born with connections, others with beauty, and still others with talent. I was born with brains and a love of school. That was my edge as a kid and the only one I knew how to sharpen.

So I had a goal of being free of poverty, a plan to get out via college, and used my aptitude for coursework to make it happen. My grades and staying out of trouble were priority number one no matter what drama was going on in my personal life. This razor focus saved me from statistics that torpedoed other at risk kids like me such as teen pregnancy, juvenile delinquency, or drug and alcohol abuse.

With a 4.0 average and high scores on my ACTs/SATs, I earned a full scholarship to a state university – tuition, room and board, and money for books. Even all my meals were paid for. This is important because it allowed me to start my independent life with a clean financial slate. No debt. Nothing. That would change later but starting without that huge burden paid off in the long run.

Having a goal focused on my future was highly important. Most kids my age wanted a car. If I’d focused on that short-sighted and short-term goal, I wouldn’t have gotten far. When you’re poor, you have very few avenues of escape to choose from. Mostly it’s either college or military enrollment. If you’re diligent, you can pick up a skilled trade that’s always in demand. There are those who try the get rich quick method that never pays off. In my own environment, I watched people turn to theft or drug dealing which I viewed as morally wrong and a quick way to self-destruct, land in jail, or get killed.

Numerous paths lead to financial freedom. They don’t all entail college. Many don’t. At the time, it was simply the only path I knew. What’s important is that I had a goal I could live for, be inspired by, and that was obtainable. It would later provide stepping-stones for future moves, introduce me to others and their ways of thinking, and land me in situations and opportunities that were amazingly fantastic.

Key takeaway: Have the goal of financial freedom and the intention of achieving it. Then when you put a plan in place and start working on it, you can only move forward. No goal, no plan, no effort only equals remaining in the status quo or falling further behind. Always have the goal, the plan and the action in progress. Cultivate that burning passion so that it fuels you. It’s what keeps you moving even on difficult days.

#2 – A Focus on Learning

Most people equate learning with education through school and college. I wrongly thought this until graduating from law school with six figure debt. Even though I had a scholarship that covered half my tuition, plus an additional stipend, my small town experience never prepared me for the expense of living in Washington, DC and how much room and board costs there. I went from $300 a month in rent to $900 and it only grew from there. Groceries were crazily more expensive too. I also didn’t know the cost of the bar exam – hundreds to sign up for and three months of not working to study for it 9 to 5 every day through a $3000 course. Hello unplanned for bar exam loan and credit card debt.

I thought once I was making a lawyer’s salary, I’d recoup the cost of law school and its loans. My first year out of school I made $86,000, which I thought was amazing (and it’s indeed better than the average salary even today). However, working like a dog at 60+ hours a week for a year got me only $1000 ahead because of the interest accruing on loans and credit cards, taxes that ate a chunk of my paycheck, and high living expenses. $1000 f@*#ing dollars out of the hole after all that work! I was devastated and envisioned the rest of my life spent working 70 hour weeks in a job I hated. Maybe you’ve experienced something similar.

Less than 10 years later I was financially independent enough to quit my job and start traveling around Asia. When people asked me how long I was traveling for, I’d tell them however long I felt like it. So what happened to get me to that point of freedom after sinking so far into debt and with no hope of escaping? Answer: my ability to never give up and to always problem solve.

Problem-solving debt. Our educational system doesn’t teach us financial literacy except by accident. Despite having four university degrees, I realized I knew nothing and had to start from scratch. I had to study it and boy did I after waking up to the realities of my abysmal economic situation! I’d never had real money before and I knew that to keep it and get ahead, I had to learn how money worked. What I was doing clearly wasn’t working and when something isn’t working, I problem solve. That means reading everything I could get my hands on about money, success, wealth, business, and financial independence. For the next several years, I was a self-taught student via books, YouTube, and websites.

From the near beginning, I used every available hour to either read or listen to audiobooks on these subjects. At work, my headphones were in and I was listening. They were in on my commute and I was reading at home. Pretty much every day. From the humble beginnings of The Idiot’s Guide to Personal Finance in Your 20’s & 30’s to The Millionaire Next Door to The 4-Hour Work Week, I was reading everything in the DC public library’s personal finance, investment, self-development, and business sections. I checked out audiobooks using Overdrive, the app for libraries that lets you check out audiobooks and ebooks. It’s free and amazing. In one year I listened to or read roughly a hundred books – mostly on finance, wealth, business, personal development and success. I learned more than at any other point in my life.

What did these precious crash course years teach me? In this time I learned about the 70/30 rule for how to use money, how to invest for a living, how to be more successful at work, how to properly choose and set goals, and discovered the key thinking habits, traits and actions of succesful entrepreneurs and millionaires. That’s not to mention all the other self-development work I did.

This learning changed my life. We’re talking 180 turnaround. From the moment I started learning and implementing what I learned, my bank account began to blossom. Almost ten years later I left the law firm for the beaches of Thailand.

Key takeaway: If you’re not learning and implementing what you learn, your bank account isn’t growing.

#3 – Value Add

When I went to law school, I went with the goal of becoming a refugee advocate. Then I realized that few jobs were available and those paid so poorly I wouldn’t afford my rent or pay my debts, let alone other expenses – even if I lived on cat food. If I was married and my partner had a decent income, such work might have been possible. Maybe too if I was independently wealthy. But having no familial support and staring down six figure student loan and credit card debt, I decided on practicality.

I went corporate – thus my $86,000 first year earnings after law school. But in DC with over $1500 in monthly debt payments and rent at $1100 and rising, that money goes fast, especially after taxes. My paycheck went not to frequent nights out on the town but to paying extra on my loans and credit cards (which had risen to $18,000). Even making what to me amounted to a lot of money, I only raised my net worth $1000 by the end of a year. So what happened to set me financially free?

Developing an edge. After reading and listening nonstop to books on finance and wealth, I learned that to get ahead you can’t just be average. And unfortunately, even with my brainpower and multiple degrees, I was pretty average. After all, a lot of people have degrees. In DC, one in twelve people are lawyers. The guy sitting beside me at the firm graduated from Cornell. Associates or project managers graduated from Harvard or Georgetown. All were in debt up to their eyeballs and miserable. So yep I wasn’t anything special.

To get ahead, I had to have an edge. Those who make the most money have skills others pay them for and they use that money to invest in money-making enterprises. For me, I had a plan to become a millionaire and retire from the disillusioning rat race in which I found myself. To do that, I ultimately chose two skills to develop – investing know-how and language acquisition, the latter to fund the former and provide a lucrative profession to fall back on in case I failed. I just didn’t plan on failing.

I began reading everything about investing – every technique, style, discipline, etc. I pulled up the entirety of the S&P 500 and DOW trading histories, studied economics and vying financial theories, read about the trading habits of successful investors. And I started investing. Before long I was making money – it’s hard not to in a bull market – but with so much debt and not enough income, I didn’t grow my investment portfolio fast enough for my liking. While I had learned to live within my means, I still wanted to make more money so I could leave the rat race sooner. My investments, though growing, would take longer if I didn’t find a way to beef them up quicker.

Therefore, the second prong of my financial success plan was learning Japanese in order to triple my salary. I went from one crappy 10 week course years earlier to passing the Japanese legal reading exam in 20 months. Why Japanese? First, it was one of the highest paying positions out there in my specialization of e-discovery. Second, it was also the most consistently offered position. Third, almost no one in America who is an attorney knows or learns Japanese. This was my moat against competition. Others asked why not learn Spanish or use my French since it was easier. To me this is short-sighted thinking. Spanish projects were offered semi-regularly but barely paid more than English and had many more fluent people who competed for the jobs. French was barely offered and hardly paid more than Spanish. Japanese? Regularly offered and at 3 times more pay because so few people existed to fill the positions. That’s called an edge.

I went full on immersion in Japanese. We’re talking every waking moment. Headphones in with lessons, music and podcasts on the commute and at work. Japanese TV nonstop at home. Waiting in checkout lines or for a friend to arrive at dinner, I was doing reading exercises and vocab drills. I even spent three months living in Japan. While there I started sending out my resume, got offered a position in DC for a Japanese project, came back and took the required fluency test, passed it, and then worked like a dog at 65 hours a week for 2 years on that case. I banked almost every penny to fund my growing investment account while still paying down my student loan debt.

When I left the job, I was burned out, but my investing ability allowed me to travel all through Asia and the world for the next two years. When I decided to buy a house, I returned to law for a year. Now I’m back to working for myself and living my dream life. The Japanese ability is there for short-term projects for quick infusions of cash or peace of mind about my job security should my investments tank. Even if I forget all my Japanese tomorrow, I have the ability to learn new skills, as well as the determination and discipline to follow through on learning them.

Key takeaway: If you don’t have a value add proposition to offer, get one. Make sure you follow through. That’s how you build financial stability, job security and wealth.

#4 – The 70/30 Rule

78% of Americans live paycheck to paycheck. That’s whether they make $24,000 a year or $250,000. When a paycheck stops, the consequences for both people are pretty dire but until then, the standard of living is farther apart in most cases. Growing up in poverty, I watched relatives, family friends and people around me blow their money on cigarettes, alcohol, clothes and other consumables, and drugs. In DC, I watched the people around me blow their paychecks on entertainment, alcohol, pricy accommodations, dining, clothes and consumables, electronic toys, and drugs.

Don’t misread me. I’m not saying poor people have more problems with vices than wealthier classes or more carelessly spend their money. We’re all human and people are people pretty much everywhere the world over. The discrepancy arises because we all want the same things but the price doesn’t change just because we’re richer or poorer. The price of that $10 pack of cigarettes in New York or $10 six-pack of beer remain the same either way. But if you’re a pack of day smoker, that $300 a month habit is going to financially cripple a poor person, do some financial damage to working class and middle class people, and not be an issue for the wealthy unless they have a penchant for truly expensive tobacco. Throw in a monthly beer, marijuana, shopping or dining out tab and you’ve got problems very quickly if you’re in the lower-income brackets.

Our spending mentality mostly remains the same across classes. That’s why you have 78% of Americans living paycheck to paycheck. When you make more money, you simply have more options to choose from to get yourself into financial problems. Yet when the paycheck stops, you’re in the same boat as the guy living in one of the rundown trailer parks where I grew up. If you’re lucky, you have more skills, connections, and opportunities to stay afloat and land another job. If you’re poor and living on the margin, you can’t afford the mistake of unwise or frivolous spending habits. It’s not fair but that’s the reality of life in lower-income brackets.

In order to get ahead we have to be smart and disciplined about our spending habits. This means avoiding wasting our money on useless drivel and learning the proper amounts to spend on expenses and the good life but also put aside for money-making endeavors.

Bad spending lessons. One of my best traits is the ability to see the consequences of actions. I used to watch my step-father smoke a pack a day, drink like a fish and dabble in various illegal substances. He had no education, no skills, but a penchant for spending on vices that destroyed body, mind and soul and literally put us on the streets. And he always blamed others for our poverty. Meanwhile, my mother, an intellectually gifted and physically fit woman, didn’t want to work and considered herself above most jobs she could get despite also having no education or skills. So many people in my neighborhood lived like that. When I went to college and law school, then graduated into the white-collar world, I learned plenty of people making a lot more money live with similar habits and mentalities.

If you’re living paycheck to paycheck, there are only two paths to financial stability and the wise live them both: make more money or spend less. If you don’t do one or the other, you’re not going anywhere. This is what I saw growing up and still see around me everywhere: people trying to live on money they don’t have but doing not enough to earn more or spend less. They want to be the Kardashians, not the self-made millionaire who works hard but smart, lives within their means, is frugal and plans (read The Millionaire Next Door). Very rarely someone just doesn’t have options due to circumstances out of their control such as those with debilitating illnesses or disabilities, mental health problems or those born without the cognative ability to live self-sufficiently. I’ve met heart-breaking cases like these but in most situations, people have self-agency.

To get out of the welfare cycle, I knew I couldn’t waste my money on things that got me nowhere and would instead destroy my few resources. That meant no cigarettes, alcohol or drugs. Being dirt poor, these were all needless expenses to me. And all three were hazards to my health and since my only asset was my brain, I didn’t want to destroy it with drugs and alcohol. I also had a years old bike, not a car, so that meant no added expenses for car maintenance, gas, parking or insurance. Shopping for new clothes or stuff for my apartment every paycheck? Nope. Hell, I didn’t even drink coffee and viewed a Starbucks latte as a useless extravagance.

As I grew older, sometimes this self-imposed austerity was at odds with my peer group. I saw young professionals in DC drop $70 a night at bars or on dining anywhere from several times a week to several times a month. A friend said that now that I was a lawyer, that made me a baller who could do the same. Shouldn’t I buy a Mercedes, rent or buy a condo, and wear name brands? I disagreed, seeing such waste as a way back to the poor house I had so desperately escaped.

I told myself that once I was financially stable and had built up my wealth, then I could start purchasing the material and experiential trappings of my new class. But until then, I focused on financial stability whatever it took. I budgeted everything and tried to minimize financial risks. Having been homeless several times as a kid, I understood the value of a consistent work ethic and an emergency fund so I did everything to be the model employee my managers wanted to keep around and I made deposits into a savings account so I’d be okay if my job ended unexpectedly. Though this meant living like a poor college student for a few years even during my lucrative Japanese law firm days, I knew that avoiding living like I was wealthy would pay dividends in the future. And it did.

How much money you should be spending. The above spending traits served me well enough but didn’t get me ahead until I discovered the 70/30 rule during my financial crash course studies. It’s all nice and good to have a budget but unless you know the best way to allocate your money, you’re probably doomed to errors in spending. For example, I love travel. So I’d save up and spend most of my money on it. My net worth never really changed because of that. Or I thought ten percent of my paycheck was enough to put toward retirement when it’s not. A lot of people make these errors. After all, when do we ever learn an easy formula for how much to spend and how much to save?

Enter the 70/30 rule.

The 70/30 rule is a reasonable money standard. It says spend 70% of net income on expenses and whatever else you want to spend it on. The remaining 30% goes to money-making enterprises like your 401k, IRA, investments, business enterprises, passive income or things like royalties and licensing income. Living on 70% is reasonable. It is the hallmark of living within your means while safeguarding your future with the remaining 30%.

If you’re living on 70% but putting 30% away for things like a house down payment or college for your kids or a new car, etc, you are basically living paycheck to paycheck because you’re already planning to blow that “savings fund” and be back to square one. When that happens, you’ll have to be working in order to tread water, even at 80. By contrast, putting 30% into money-making activities means you’re growing your wealth and income streams. You can take 70% of any income from them but you must always reinvest 30% to make you more money. Never take from the principal, only from the money generated. If you’re wise, you won’t touch even that until you have to.

Key takeaway: Learn reasonableness in your spending habits. Wise and financially stable people sleep well by spending only 70% of their net income and putting the rest into money-making endeavors. If you’re deep in debt or living paycheck to paycheck, torpedoing yourself by buying perks like frequent nights out, pricy digs and rides, the latest trends and anything else you don’t need is ruining your finances and keeping you in the crosshairs of financial jeopardy. Do you deserve to be able to live the good life? Absolutely. Everyone does but when we’re poor or struggling, we don’t have the luxury of living the high life. We have to focus on getting ahead. Once there, then we start reaping the rewards of our hard work.

When I lived like a college student even though I was making six figures, bought a used rather than new van, and lived with roommates instead of alone in a luxury condo, I sometimes felt like I was missing out on life. Not going out with my friends all the time or attending plays or concerts sometimes sucked. Working insane hours at the firm for more money nearly killed me physically and mentally but ten years after graduating from law school with six figure debt, I quit my job and went traveling around the world. I have two words to describe all those material “sacrifices” I made in pursuit of the good life I envisioned and now lead: no regrets.

#5 – Thinking Like the Rich

The world is not a fair place. If it was, we’d all be born into wealthy homes with amazing parents and with brains, beauty and hearts of gold. I’m a problem-solver so while others around me were smoking up, getting drunk, skipping work or complaining about how the government, taxes, their families, their jobs, their expenses or even the weather was keeping them down, I was looking at ways to problem-solve my situation and get ahead.

Action, not blame. Don’t get me wrong. I complained plenty about these things too. I thought the government should do more to help people, that my taxes were too high, that our politicians were too corrupt, etc. But the thing is, I have no power over those things outside the ballot box. None. Zilch. Zero. Neither do you. The only thing I have power over is myself. For me, every second spent complaining is time spent uselessly. In that moment, I could have sharpened my Japanese, studied another investment, learned a new skill, figured out a new way of using my money to benefit myself or others.

If you want to live paycheck to paycheck, go ahead and blame the government, taxes, and everything else. If you want to be wealthy, think like the rich and look for opportunities while being frugal about your everyday spending. The rich have multiple streams of income that they set up and they are constantly looking for new ones. Those who don’t wind up in the poor house and we read about celebrities going bankrupt or dying penniless all the time for proof.

Financial literacy is a virtue. Another useless belief I had to unlearn was that money is the root of all evil or that it’s not virtuous to be rich. What I found was that there are shoulds and then there is reality. Money can be used for good or evil. Poor people are not the ones founding charities or provinding job opportunities for the community. Not being able to provide for our kids does not make us somehow more virtuous than someone else. It just makes us feel better about ourselves to know at least we’re not those greedy rich pigs sticking it to everyone.

When I was a kid eating at homeless soup kitchens or getting free food from a church pantry with my mom, I never felt virtuous or happy to be poor. I felt embarrassed, ashamed, and worried about where we might be sleeping that night. Money was a very important thing that we never had. Until I learned to appreciate money rather than see it as soul corrupting or something only cheaters and underhanded crooks could obtain, I never had an interest in finding out how it actually worked. Ignorance of financial literacy hampered me big time as it does so many people today.

Whatever my feelings about the rich, the reality of my life back then was that I did not have money, connections, or useful skills to offer the world. In our world, that means poverty and it’s horrible. People may want a different form of government but we live in a system of capitalism. While I may like or hate it, the simple truth is that I’m pretty much stuck with it and so are you unless we move elsewhere. This is the game setup. It could change someday but today it is what it is. The wise learn the rules, their exceptions, and the options available to play it well and they keep learning in order to thrive and enjoy this life no matter the game.

Want to change the world? Go out there and do all you can. My personal belief is that we should all leave this world better for having been in it. Want to be financially independent and retire early? Get financially literate. Play the current game before you and never stop searching for what winning means to you.

Key takeaway: Are you blaming others or are you acting? In this world, we have to act. No one can tell you what success means to you but in today’s society, money is useful to have. Not having enough leads to all kinds of problems. Keep that in mind and realize that all the “shoulds” in this world won’t change the state of today’s paycheck. The financially stable and financially free understand this and act accordingly.

From Food Stamps to Passport Stamps

When I was a kid, I always dreamed of traveling the world like some great explorer or adventurer. Whether we lived in trailer parks, homeless shelters, on family assistance from the government, or with relatives just to get by, I always knew that in my future I was living a different life. I just had to make it to graduation and leave town. After that, I would be fully in charge. Since then I’ve visited or lived in 20+ countries and counting. My life is certainly different and I love it.

Five things got me out of poverty and living financially free by 37:

  1. Having a goal of financial independence
  2. A focus on learning
  3. Gaining an in demand, lucrative skill that few others have
  4. Living within my means but planning for my future with the 70/30 rule
  5. Thinking like the wealthy

If you’re like I was and struggling financially, becoming financially stable is difficult. But it’s not impossible. In fact, it took me only ten years to go from six figure debt to living a financially independent life where I was semi-retired at 37. I truly believe that any savvy, self-motivated person with the ability to learn can do the exact same thing so long as they follow through and put in the work. That’s no easy task but short of someone handing out winning Powerball tickets, it’s the only way. Where will you be in 10 years?

Like this article? Share it so that others can learn these money secrets and start living their best lives now.


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