Stephanie McCullough (00:06):

This is Take Back Retirement, the show that’s redefining retirement for women. Retirement is an old-fashioned cultural concept. We want to reclaim the word so you can make it your own. I’m Stephanie McCullough, financial planner and founder of Sofia Financial, where our mission is to reduce women’s money stress and empower them to make wise holistic decisions so they can get back to living their best lives.

(00:29):

Kevin Gaines is my longtime colleague with deep expertise in the technical stuff: investments, taxes, retirement plan rules. He’s a little bit nerdy and quantitative, I’m a little bit touchy-feely and qualitative. Together, through conversations and interviews, we aim to give you the information and motivation you need to move forward with confidence. We’re so glad you’re here.

(00:54):

Coming to you semi-live from the beautiful Westlakes Office Park in suburban Philadelphia, this is Stephanie McCullough and Kevin Gaines of Sofia Financial, an American Financial Management Group. Say hello, Kevin.

Kevin Gaines (01:05):

Hello, Kevin.

Stephanie McCullough (01:07):

Today we have a great guest, Jackie Cummings Koski. Jackie has overcome, as you will hear, poverty, divorce and the struggles of single motherhood. And yet she was still able to retire from her corporate job of 20 years in 2019 at the early age of 49. And the whole time she’s made less than six figures. She openly shares how she overcame those adversities and the wake-up call that totally changed her view of her finances.

(01:35):

And now four years later, after leaving corporate America, she’s 53 and following her big dream of creating a financially literate society. Let’s dive into our interview with Jackie. Jackie Koski, welcome to Take Back Retirement.

Jackie Cummings Koski (01:53):

Thank you, Stephanie. Hi, Kevin.

Kevin Gaines (01:55):

Hello. Good to meet you.

Jackie Cummings Koski (01:57):

How are you guys? Yeah, I’m so glad to be here. Thank you for having me.

Stephanie McCullough (02:01):

Absolutely. I’m excited.

Kevin Gaines (02:02):

Appreciate you being on.

Stephanie McCullough (02:04):

So I love your story and there’s a lot of facets to it that are of interest to us and hopefully to our audience. But why don’t you tell us a little bit about where you are now and the sort of quick version of how you got there, and then we can dive into the details.

Jackie Cummings Koski (02:25):

Yeah. Well, where I am now is that I recently retired from my corporate job, retired super early at the age of 49, so that’s probably the most thrilling thing. And it just sort of opened up so much freedom for me to do what I wanted to do and financial literacy and education was that thing for me. And so the big question, and I guess the big pivot for me was retiring from our corporate job, how to even get to that point. It was terrifying when I first did it.

(02:56):

But the short story is I grew up in rural South Carolina down a dirt road. I hated it and I never want to live down a dirt road again. But I was raised by a single dad with six kids. We were in poverty, and it was really tough. He was a great dad. His work ethic has stuck with me throughout my whole life.

(03:16):

So all I remember from growing up is that I didn’t want to be poor when I grew up, and I wanted a better life for me and my family. So I decided to go to college. To me, that was the most straight line to get to a good job, to be able to make money and never be poor again. So I ended up getting married pretty young in my twenties. I had a daughter and corporate America worked great for me for a really long time. I was happily married, got a daughter.

(03:48):

And after being married about 12 years, ended up getting a divorce. And that was devastating. That changed a lot for me because what I thought was going to be a shared journey ended up being pretty much solo with a kid in tow. So that was when I decided I needed to get my money together. I needed to get my finances right because there’s that thought creeping up again about I didn’t want to be in poverty again.

(04:14):

So when I finally woke up, I would say it was probably a good two years after I got divorced, before I started kind of waking up and realizing I needed to do something and that I never wanted to feel the way that I felt at the time that I got divorced, particularly with finances. One thing that stuck with me was that there was a big disparity in what I had in my retirement account, 401(k) at work than what my husband had. And we made similar salaries, had a similar match. I had $20,000 and I thought I was doing pretty good. At that time, I’m in my mid-30s and my husband around the same age, and again making about the same money, he had $120,000.

(05:02):

Yeah, huge difference. I since did some sleuthing and just figured out just a few nuances of why he was invested in different things. His things were more aggressive. He had stock of the bank that he worked at. At the time, this was a very large bank, and bank stocks did great at the time. Now that would not be the case today, but I started finding these little nuggets of things that made the difference and they just added up over 10 years with compound growth, the divide became bigger and bigger.

(05:35):

So one of the first things I did, I ended up joining a stock investment club. They were really smart people. I was learning from them. It was supported by a nonprofit organization called Better Investing. And that was sort of the baseline to me finally realizing how important it was to invest, to not be afraid of the stock market. So I went gung ho on all of my tax advantaged accounts, my 401(k), my Roth. I had an IRA that I rolled over, and then also my health savings accounts. I invested in my health savings account.

(06:09):

So by the time I was doing that 10 or 12 years or so later, I found something called the FIRE Community, Financial Independence, Retire Early. I was a bit older, but it was very enlightening for me because it was pretty simple with what they were doing, live on less than you earn and invest the difference. But that was what kind of got me to the point where, you know what? I think I can leave my job and retire early because I really want to focus on personal finance and educating other people.

(06:40):

So at the age of 47, I kind of got to that spot, but I wasn’t quite ready yet. And I stayed at my job for another two years. And at 49, I ended up retiring early from my corporate job. And I guess my whole idea of retirement had kind of changed over time, but I knew that there was other things I wanted to do and I didn’t want to worry about the money part. And that was my reason for retiring early and actually calling it that versus just a career change. So that’s kind of how I got there.

Stephanie McCullough (07:12):

So what I want to dig into is that change in your mindset from being kind of however it was you felt about finances at the divorce, and you can tell me how you feel. I don’t want to put words in your mouth, to feeling more confident, as you said, getting over that kind of fear of investing. Can you dig a little bit into how that felt after the divorce?

Jackie Cummings Koski (07:35):

Yeah, after the divorce, it was emotionally draining and it was very hard to think about anything else. And that’s why I say there was about two years from my divorce before I decided I needed to do something. I was probably a bit paralyzed with everything that was going on. My relationship had ended, my marriage had ended. Now I’m a single mom trying to hold down a job. My career became much more important in terms of just putting food on the table.

(08:06):

So I just felt so vulnerable. I felt very financially ignorant when I saw that disparity. And like I said, that’s just the one thing that sticks in my head. There was a lot of other little things and I just needed time to breathe to kind of get over that hump. And there was just going to be no moving forward without making peace with the transition I was about to make in my life.

(08:35):

But once that happened, and again, two years, some people might say that’s a long time. Some people might say that’s not enough time, but that was about the time that it took me to mentally get there because that mental block, the emotional part, is just too strong of a force to really be able to make moves and to actually take action.

Stephanie McCullough (08:55):

I think that’s so true, and that’s one of the things I feel like that the financial industry doesn’t do a very good job of acknowledging is that there is a lot of emotional roadblocks and obstacles to taking control of one’s money and whatever it might be, but it’s real. And instead of just saying, get over it and do it, like no, that’s not how it works. So I love that you’re sharing that you went on your own journey to getting to the point where you felt okay learning more and diving in about it. And then it seems like you kind of went at it with a lot of energy.

Jackie Cummings Koski (09:33):

Yeah, sort of little steps in the beginning. I happened to be talking to a coworker of mine. She lived in Boston and I live in Ohio and we’re talking about stocks because I enjoyed learning about stocks, I enjoyed learning about the stock market, but I was kind of afraid of it. And I remember when we were talking, she was actually younger than me and she mentioned this nonprofit organization that supported investment clubs and individual investors called Better Investing.

(10:03):

And she was like, “Yeah, they’re all over. You should just google it.” So I googled it and I found one that was near me. And what I liked was that their meetings were open to the public. So it was a cool chance for me to just observe, see what they’re talking about, see if I was even interested. Honestly, in my mind at the time, I’m like, is this for real? Is this a scam or whatever? And the fact that they were a nonprofit, really made a difference to me.

(10:25):

And as I’m able to go to as many meetings as I want, I probably went to six or seven of those meetings just to observe. And they just met once a month. And I love that they were so smart. In my mind, they were all smarter than me. And so after a little while, I decided to join and they invested real money, just small amounts, like a hundred dollars a month I think was what you could invest. But it was more about their learning and the education and then you could do whatever you wanted to do in your own portfolio.

(10:55):

And I think part of why I enjoyed being around these people is because I met them after my divorce. So they didn’t even know that I was married because I felt like for a long time around my friends and family, it was like, “Oh, the poor single mom, you just got divorced.” It was always this pity party and I wanted to get away from that pity party.

(11:11):

So it was really nice to be able to just talk about the stock market and talk about things that other people enjoyed that I had in common with. So that was my first step. And boy, all these bells and whistles started going off. It’s like, okay, so if I grow my money in the stock market, then that means the money in my 401(k) is in the stock market. And I get this tax advantage. Why am I not maxing that out? 6% is not enough, 10% is not enough.

(11:38):

And then I started looking at any other tax advantaged that counts. I needed to be maxing those out first. So I started maxing out the Roth and then also learned about HSAs and that you can invest in HSAs. I think I was kind of an early adopter with that, but it really made sense to me.

(11:57):

So once I had those accounts, I was living very comfortably off of what was left. It was never a problem. My salary was, I would say, it’s kind of average. I live in Ohio, so that’s a low to mid-cost of living area. And so I was probably making around like $80,000. I was in sales where I got some variable commissions. So some years were good, some not so good. But I never made over six figures.

(12:25):

So I wasn’t a high earner, but I was able to comfortably max out those three accounts. And I guess once I had in my head that this was my money and it wasn’t in some black hole that I couldn’t use until I was 90, that made a difference too. So when I knew I was going to retire early, the money was feeling more real and it did add some enthusiasm and sort of, excuse the pun, but a little more fire behind it knowing that I could actually use this money before I turn 59 and a half or before I get really old where I can’t enjoy it.

Stephanie McCullough (12:59):

Well, I think that’s one of the big barriers too, is that we have this present bias as human beings and it’s hard to imagine what our future self is going to seem like, live like, need, want. So did you find, you mentioned when it felt closer, that was a little easier?

Jackie Cummings Koski (13:15):

Well, I mean it felt so much more exciting to know that I’m going to be able to cut out a little early and actually follow my dreams. From the time that I got divorced, I learned so much about money and personal finance. And so I started doing workshops, wrote a book to my daughter called Money Letters to my Daughter, that was truly a labor of love. And I was doing all this education because I wanted to give back all that I was learning about personal finance, but I never dreamed that I would’ve been able to do it as more than a side hustle while working my regular job.

(13:54):

And when that started to become clear that I could, that was my why and it just made so much sense. So then I’m of course mapping out and looking at some different scenarios of how could I really make this work. Took a little while to get my head around it, but it just started making sense. And so every penny I was putting in those retirement accounts, that was my money. Whether it was at the beginning, the middle or the end of retirement, I was building that nest egg and coming up with what my numbers were to make sure that I would be okay retiring early for the rest of my life.

(14:35):

So it became a fun thing for me. I was no longer so fearful like I was at the time of my divorce.

Kevin Gaines (14:44):

So what inspired you to write the letters to your daughter?

Jackie Cummings Koski (14:49):

Yeah, well that will forever … If I ever write another book, this will forever be my greatest work of all time because I really wanted to be able to pass on everything that I had learned about personal finance. But at the time I was writing the book, my daughter was a teenager. She was 14 when I started. I wanted to give it to her for her high school graduation gift, but she wasn’t listening to anything I was saying.

(15:14):

So part of my program in undergrad was journalism, so I enjoyed writing. So that was my outlet. So I’m like, how do I get this information to her? She’s not listening to me. So I thought I’d write a book. And when I saw it was the environment in getting a book published had changed, so I decided I wanted to put all the … and I wrote it in a way that a 14, 15, a teenager could understand.

(15:40):

And so I kept it very simple, but I also wrote it in a series of letters. Instead of chapter by chapter, it was the letters like, “Amber, here’s what I want you to know about credit. Your credit score is available everywhere now. You don’t need to …” So I had all these little things that I’ve put in letters and I signed off on all of them, “Love, Mom.” And I’d put like, “Love, Stage Mom,” or whatever letter I was writing, whatever mood I was in, that’s how it was written, hoping that that would be a way to increase the likelihood that she would actually read them.

(16:16):

And she did. I know when I was writing the book, she was really the only one that knew I was writing it. So I would say, can you read this and see if it makes sense? So she actually read the book before the book even got put together without even knowing it.

Stephanie McCullough (16:30):

Ah-ha.

Jackie Cummings Koski (16:31):

I know, right?

Kevin Gaines (16:32):

And what did you get out of writing? What did you discover as you were doing this?

Jackie Cummings Koski (16:36):

That’s a really good question. I learned a lot about myself. This was to my daughter and I ended up thinking a lot about my dad. My dad died when I was 18, three months before I graduated from high school. So he never got to see me graduate, he had six kids. And I guess during the time I was writing the book, I kind of just realized we’re all put on this earth to do something. And in his case, I think it was to raise his six kids.

(17:00):

I was second to the youngest. I had a younger sister that was 17. And so we’re all grown. We had seen his work ethic and that was his mission on this earth is how I looked at it. But I thought a lot about what I learned growing up. And you don’t have to be wealthy to teach about money. You can still have good habits. And I had a lot of good habits that I got from him that I think were very, very helpful.

(17:28):

Had we had more money to do things with, then maybe things would’ve looked a little different, but those habits are simply scaled. He told me, “Live on less than you earn.” He told me, “Always save something.” So those things were ringing true. So that was the biggest surprise to me that I thought so much about my own childhood and the lessons my dad had taught me.

(17:50):

And so part of the book was kind of dedicated to him because I think so much of what I learned growing up just kind of flowed over to what I wanted to pass on to my daughter and via those letters.

Stephanie McCullough (18:05):

I love it. So when you said that after the divorce you felt financially ignorant, do you think you were being a little hard on yourself?

Jackie Cummings Koski (18:15):

I probably was, but if anyone has gone through a divorce, we are hard on ourselves. Is this my fault? What did I do wrong? We’re really hard on ourselves and I was hard on myself. But I do … Ignorant is kind of a harsh word, but it’s just not knowing. So I guess based on the formal definition, I didn’t know and I was ignorant. And honestly, I guess I might have been a little harsh to myself, but that actually gave me a little more motivation to say, “Never again. I was stupid then and I was ignorant then, but never again.” I want to talk about in the past tense.

Stephanie McCullough (18:58):

Yeah, I love that. And I would say very few people … I’ve talked to people who’ve decided to go learn about personal finance, but very few go get master’s degrees and pursue their CFP. And you’ve really taken it to another level. Why do you think it spoke to you so much?

Jackie Cummings Koski (19:16):

Yeah, it took a while because I had my own opinions about the financial planning industry. I’d not been exposed to it when I was younger. Heck, I retired myself and I didn’t have a financial planner. So the formal industry I honestly wasn’t a big fan of. But I knew I loved financial education, I knew I loved teaching other people. So somehow naturally, I was angling towards financial planning and turns out through getting some education and participating in some programs, the profession is changing and there are so many new approaches to it. And that gave me hope.

(19:56):

And I think once I retired, I was asking myself, now I got all this time. Now what do I want to do to fulfill this dream of mine? I had this big dream of creating a financially literate society. I still do. So I decided to get my master’s. And part of going to get my master’s to be honest was when I was an undergrad, I was working full-time plus two jobs, and I was taking a full load at school. And I was just taught to work hard for what you get.

(20:24):

And so obviously something had to give, and you can’t work 50-plus hours and take a full load at school and do okay. So it was my grades. So the lowest GPA you could have and still graduate at the college that I went to was a 2.5 and my GPA was a 2.6. Yeah, I made it and good Lord, I was so glad that your GPA is not on your certificate. So that made me feel better.

(20:58):

However, I knew that I was capable of doing so much better and hated that it didn’t show up in my grades because when I was in high school, I was in advanced classes, I got all A’s and B’s, I was a pretty smart kid, I thought. So that still stuck with me, my crummy GPA. So I’m like, you know what? I’m going to go back to college. I didn’t want an MBA, I didn’t want a boring program. Some of those programs I looked at, they would put me to sleep.

(21:27):

And I had a friend of mine to say, “You know, an MBA is not the only master’s degree you can get?” I’m like, “Really?” For some reason I’m thinking MBA is a master’s degree and I guess it is, but there’s a bunch of other ones. So I started looking, I found this wonderful program at Kansas State University for financial therapy, but to get the master’s, it also had these six other financial planning classes. And I took the classes really wanting to move towards my master’s in financial therapy. But it turns out these six classes were to sit for the CFP exam, it fulfilled the education portion.

(22:04):

So I’ve got my other classmates and they’re all doing it to get ready for the CFP. And I’m like, “Oh, I’m not taking the CFP, I’m not interested in doing that.” And somehow I fell down the rabbit hole. You know what? I attended an Externship, it was 2020 COVID. So there’s some good things that came out of COVID. The FPA, Financial Planning Association had this Externship led by this wonderful lady named Hannah. She’s amazing.

Stephanie McCullough (22:29):

She’s incredible.

Jackie Cummings Koski (22:30):

So that gave me an opportunity to see, it was probably 20 or 30 different financial professionals, financial planners, CFP professionals and their practice. And they were open in sharing their model, their approach, their clients. And I’m like, “Oh, it’s not just what I had thought in my head for so long.” And so I figured, okay, I could stay on the outside of this profession and trash talk it, if you will, or complain about it, or I could be a part of it and be a part of the change.

(23:04):

So I decided I want to be a part of the change. And that was the thing that got me to say, you know what? I think I can do this. Honestly, going through my master’s program and those financial planning classes, they were tough. I did get through by the way, and I graduated with a 4.0, I got it perfect. And that’s the thing where when you make mistakes, you end up being better for it. And I don’t know if I would’ve cared if I got a 4.0 if I did okay in undergrad, but I’m like, you know what? I knew I could have done better. So I’m going for the gusto I’m going to try to have a 4.0 in every class. And I did. And so I got that do over.

(23:40):

So I’m thinking what my approach and what I’m thinking and my vision is not quite the typical financial planning model, but neither is all these wonderful people that was willing to share what they were doing, including your firm. And so that made all the difference for me. I was afraid of the exam because the exam is a beast for sure. But I got through it.

(24:02):

And again, I wasn’t working a regular full-time job. So I was fortunate, I was privileged to have more time than someone that’s working full-time or having a kid or having a family because that’s a lot. So I’m like, you know what? If I’m going to do it, I’m going to do it now and studied for it. And I passed it the first time back in November is when I sat for it.

Stephanie McCullough (24:26):

Woo-hoo. That’s awesome. Congrats.

Jackie Cummings Koski (24:27):

Thank you.

Stephanie McCullough (24:28):

That’s a big one.

Jackie Cummings Koski (24:30):

It was a beast.

Stephanie McCullough (24:32):

Yeah. Oh, I just love that. All right, maybe this is backing up a little bit, but one of the things you had mentioned to me is that your idea or your definition of retirement changed over time. Could you explain a little bit more about that?

Jackie Cummings Koski (24:46):

Yeah. So I thought that retirement, again, growing up with my dad and everything, you get a good job, you get benefits and then you get a pension, and you’re done at 65 or 70. And so that was my vision and my understanding of what retirement was. But as time went on, I started changing how I viewed retirement and my definition of retirement, and I can’t apply my standards of what retirement is on someone else and vice versa.

(25:17):

So I started thinking of it in terms of I just don’t want to be tied to a job belonging to someone else for 40 hours. Now for some people, that might mean they want to run their own business, which as I have learned, still takes a lot of time. And I needed a break. I needed a real break from my company. I was there for 21 years, but I needed the break because what I did had nothing to do with what I wanted to do.

(25:44):

So there was no shifting or real transitioning. And to me, retirement just meant that I don’t have to depend on the job and I can truly remove the obstacle of money to be able to do what I want. And when I say do what I want, it’s like something that really satisfies me, that really excites me. And I really want to leave this world in a better place than when I came here. That’s important to me.

(26:17):

And it’s like, how am I going to do this? So I had to retire from my corporate job. Now if I were a career changer, I would’ve just probably shifted onto something else. But I did, and I took a break to went back to school. That was two years. Not only am I not making money, but I’m spending money. So I just see retirement as something totally different than I used to.

(26:40):

It’s that break from working the 9:00 to 5:00 or even running the business. And I didn’t know if maybe that was going to be it. And maybe I just continue slowly just helping people along the way and leaving it at that. But I ended up doing all these other things and that’s how it worked out. You’re never going to be able to predict the future. And some people are very bored in retirement and they decide to go.

(27:06):

I mean, think about, I’m horrible at sports, but who’s the football guy that just retired again?

Kevin Gaines (27:15):

Tom Brady.

Jackie Cummings Koski (27:16):

So Tom Brady, how many times does he retire? It’s because you don’t know. He thought he was ready to retire and he did retire. But then he’s like, “You know what? I’m kind of shifting. I think I want to go back.” So it’s okay. It’s okay to not have all the answers, but retirement just means to me that you are making that break from just the hustle and bustle. I feel like I had the freedom to actually explore, to open my mind to things, to have a little bit of a whiteboard without all these commitments being so rigid. So yeah, my definition of retirement definitely changed over the course of time.

Kevin Gaines (27:55):

So you’re starting to join in this investment club, you’re learning about stocks and everything. When did you discover the FIRE movement and what appealed besides the obvious of, “Hey, I can stop working at 50 or 45 or 55,” whatever the case may be? But what beyond that appealed to you that made you take that next step?

Jackie Cummings Koski (28:20):

So the FIRE Community, and FIRE stands for Financial Independence, Retire Early. So it was definitely after I wrote the book. I was already into personal finance and financial education. And the main thing I remember was that I love listening to podcasts. I’m an auditory learner. And when I first started listening to podcasts, there was like five. Oh yeah, I know what happened.

(28:47):

So when I was working for my corporate job, we were doing something called the Carriage Day, and we were cleaning up this park and I got injured really bad. I actually broke my ankle. They had to call the ambulance. This was horrible. They had to call my daughter and took me by … So anyway, I’m healing and I had to be on short-term disability, workers’ comp and all of that. So you can’t do any work when you’re on workers’ comp and disability and all that.

(29:12):

So that’s when I started going through my podcasts again and I was looking and they were now niches. There were sort of financial literacy and then you would see real estate, then you would see financial independence, then you would see retire early. And I was the biggest skeptic. I’m like, retire early, that’s ridiculous. And there was some guy that was like 20-something years old talking about it.

(29:35):

And you know what was missing for me? The numbers. I’m like, “Well, how much do you need?” And finally, there started to be more transparent people talking about it where they would talk about their numbers. 25 times your expenses is what you want to look at. You want to grow the gap between how much you spend and how much you earn, which again these are things that my dad talked about just using different languages.

(30:00):

So it was valuable to me for people to share their numbers. And so I said, okay, if I ever start talking about this and teaching other people, I do want to share my numbers because it meant a lot to me. Even if I weren’t in their situation, let’s say for instance, at the time, I was a single mom making a modest income, living at a low cost of living area. But there might have been a couple with no kids both making $150,000. So I knew that, all I had to do was sort of make the appropriate adjustments and it still made sense to me.

(30:33):

So I think what was really helpful was that I could put numbers to it. I’m not an engineer, but I do love numbers, and I love figuring out how things work. That was when I first did my first net worth statement. So 2013 was the year I did my first net worth statement. I’ve never done a net worth statement. I’m in my late thirties here, so that made sense. So 25 times my expenses, that made sense. I’m like, “Oh, I’m already there.” And I just needed more of a buffer, I think, than the average person. So it took more than that.

(31:06):

And so when I was able to actually put numbers to it where it made sense to me, and it seemed like they were the only ones that were being transparent like this and thinking that it is possible to cut out early, and they were solving for the problems that everyone talks about in terms of why they don’t retire early. Things like health insurance, figure that out. Things like how do you get your money out of your retirement account before you’re 59 and a half or 55, figure that out, all these things.

(31:37):

And most of the people in the FIRE Community seemed like pretty smart. The people that I was following and listening to were pretty smart. I mean, I would double-check things and made sure they made sense, but that’s what attracted me to the FIRE Community. And I knew that I was kind of probably on the older side of FIRE because there were people in their early 30s and 35, 36, retiring early, and I was like 38, 39 at the time, late 30s, and felt like I was a little late. Again, it’s all about perspective. So if I’m around a bunch of FIRE people, then it seems late. But anywhere else, it seems really early.

(32:16):

So I love the transparency and I love that I had some solid numbers to work with that I could apply to me and my situation because there was hardly, at the time or early on, it wasn’t many single people with kids. It was mainly like if you had an avatar for FIRE people, see if you guys agree with this, it would be young, high income, male, no kids. That’s what it was initially, so I’m obviously not any of that. But I made adjustments. I made adjustments and applied it to my situation and came up with what I was getting pretty comfortable with.

(32:55):

Like I said, I do wish I would’ve retired a little early. That’s the only regret I have. But at the time, I gave myself two more years because I felt like I just needed more of a cushion.

Stephanie McCullough (33:06):

So I think one of the maybe knocks against the FIRE movement, maybe from people who haven’t dug into it a lot, is that, oh, they’re all just about extreme deprivation and cost-cutting to the bare bone and living on canned beans and having no cell phones and internet, no luxuries of any kind. Did you find that you had to cut expenses when you went down that road?

Jackie Cummings Koski (33:29):

Well, I didn’t really, because my strength or my superpower was saving and investing. So I never really did a budget. The way I came up with my budget is I took my salary and I subtracted everything. I was contributing to my accounts and subtract out like 10% or 15% for taxes. And whatever was left, that was what I lived on. And that’s how I came up.

Stephanie McCullough (33:55):

That’s called the anti-budget-

Jackie Cummings Koski (34:00):

Yeah, the anti-budget. So unfortunately, I do see those extremities out there representing the FIRE Community. And so I understand why people get that imagery because if that’s what major media’s putting out, that’s what they’re looking at. But if you dug below the surface, it’s definitely more diverse. It’s definitely so many more approaches, and everybody’s got … I always say, everybody’s got a superpower and everybody’s got something that is just a big challenge for them.

(34:24):

For me, my big challenge was the fact that I was a single mom and I was making a modest salary. But my superpowers were understanding investing and starting … In my mind, I was starting early maxing out these accounts that some people are just realizing that they should allocate their money that way, and how taxes work. I’m a nerd like that, but taxes make a big difference. So my tax rate ended up being so low because I was maxing out my 401(k)and maxing out my, not the Roth, but maxing out my HSA. So between my HSA and my 401(k), that brought my taxable income down quite a bit.

(35:02):

So for me, definitely, and also having a teenager kind of hard to script too much. They want the car and they’re very expensive, participating in sports. So I never had a need to do that at all. So the minimalism and the frugality, I never did.

(35:20):

Now, because of the way that I grew up in poverty, I was always very conscientious about what I spent on things and how much things cost, so that may have been just a natural trait that I had where I didn’t have to go through my budget line item by line item. If I want to go out with the girls and we want to have drinks at a nice high-end restaurant and the drinks are $18 each, hey, I’ll do that sometimes. I’m not doing it every day, but that’s okay.

(35:50):

But also, let’s say for instance, I enjoy driving a really nice car, but I’m going to get that car in the smartest way possible. I usually will get it three or five years old. I pay cash for it and I keep it for 8 to 10 years. So, I don’t have to drive a clunker to say that I’m smart with my transportation.

(36:10):

Everybody just has a different perspective, and I think it’s always really kind of dangerous to assume from just one or two people that you might have been exposed to, to come to the conclusion that the whole group is that way. And I catch myself as well. We all have biases and I have my own bias, and I try to check them at the door and say, “The one person I met was that way, but if I’m interested enough, I’m going to dig a little bit more.”

(36:37):

And at being a part of the FIRE Community, I’ve definitely met so many brilliant people and that’s how they came out with all those little subcategories. I hate labels because I get labeled enough, but like Fat FIRE who are people that want to retire early with a ton of money or Barista FIRE where they still are working at some part-time job to get benefits. There’s definitely a variety, and hopefully someone is truly kind of interested or just curious. And that was me, I’m like the curious cat. I was very curious and that caused me to dig a lot into it.

(37:13):

And the conclusion that I came up with is that it was doable for me. And the people that are doing it, they all have their own little superpower or their own approaches, but they’re all a little different.

Kevin Gaines (37:27):

When you did your first net worth statement, what inspired you to do it? Why did you do it? What did you get from it? Did it inspire you to do other things?

Jackie Cummings Koski (37:41):

Yes.

Kevin Gaines (37:41):

How important was that?

Jackie Cummings Koski (37:42):

That was so important, Kevin. Honestly, doing a net worth statement, that was probably one of the most powerful exercises I had ever done with my finances. And I think what got me to do it before is listening to podcasts, and this is listening to a lot of the FIRE ones where they were talking about their net worth. And I’m like, “Oh, maybe I should try to look at my net worth.”

(38:07):

So the cool thing about a net worth is that you’re pulling all this money together from all these different places. I never thought of them as an aggregate. I had this old IRA rollover, my 401(k) at work, what I had in my savings account. I had a little brokerage account at the time, the money I had with my investment club, the equity that was growing in the house. So I never looked at all that together.

(38:30):

And this is also a good exercise, you start to think about what forgotten accounts do I have where I worked at that employer 10 years ago, and I just left it there. So I pulled everything together, started adding it up, and I really didn’t have a whole lot of debt. Again, I’ll credit my dad for that because he was not a big fan of debt. Of course, I had my house, so that was the biggest debt, but no overwhelming credit card debt. I got a tiny little bit of a student loan. I think I ended up taking one out my senior year in college. That had been paid off at that point, so I didn’t hardly have any debt.

(39:04):

So by the time I did it, I think my first network statement, I probably had maybe around a hundred thousand dollars. And again, this is a house that probably had very little equity, but I didn’t even think it would’ve been that good. I would’ve assumed that I was in the red. But when I did that, I started tracking it. And we didn’t have all the cool apps that you have now, so I just used the spreadsheet. It was fun to me to start to do it because I was in accumulation mode, so it’s going up. And most of the time that I’m doing this, this is post 2009 and 2010, so the market is looking really good.

(39:47):

So, it was exciting to see your money grow. I was updating it every month and it wasn’t that much because really I didn’t have a ton of accounts and all that, but it was a really cool exercise and it was a great starting point for me to know where I was and to track it. So now I can go back and look at where I started and what I have now.

(40:10):

That’s a powerful thing. I’m not feeling financially ignorant anymore. So that was a big deal for me, and that’s why I mentioned the 25 times your expenses sort of your FIRE number. So, that led me to believe, okay, what other things can I project or can I sort of estimate or run some scenarios? From then on, I knew that it was helpful when I had things on paper or somehow able to track it and just organize my thoughts versus just kind of thinking I should put more of my 401(k).

(40:41):

I made projections. So as I was approaching retiring from my corporate job, I started doing it about three to four years ahead of time, and I had all four years. And what I was putting in, in which accounts, estimating a certain growth rate, I was mostly in stock. So every year I would update and see, “Okay, here’s how close I am to that. Here’s how close I got to what I was estimating.”

(41:10):

So it was fun and it was a powerful exercise, and I appreciated having that type of relationship with my money versus what I had before.

Stephanie McCullough (41:20):

Well, and I love the idea that following the numbers can be fun because I think, again, a lot of women especially get into this circle of worrying about what the numbers are going to say about them and wanting to do the head in the sand thing, and I’m not going to look because it’s going to be so ugly. But you can’t measure your progress until you know where you’re starting from. So I think that is powerful.

Jackie Cummings Koski (41:42):

And the people that I work with, I will usually tell them, if you do a net worth statement, it’s okay if it’s in the red. We’re just looking for movement. And you don’t even have to pull all your accounts together before you feel like you’ve made movement. Maybe the first step is get a yellow pad and start jotting down the accounts you think you have forgotten about. Maybe the next step is creating headers for the categories that you want to track or that you know will go into your network, so just little steps at a time to make you feel good that you’re at least moving in the right direction.

Stephanie McCullough (42:20):

So you did mention that it was fun to watch your accounts in 2010, ’11, ’12, when the markets were going up. What advice do you have for people maybe in current times when the markets are a little bit more bouncy?

Jackie Cummings Koski (42:32):

I know it’s scary as heck, right? It really is. So for me, and maybe some of us that have been through other recessions, I do remember 2008. And the good takeaway from 2008 was that that’s when I really started investing and understanding investing. So the reason why my net worth grew as fast as it did, I would say 10-ish years from having a hundred thousand to around a million-ish or something. But during that 2008, that just was like the wind beneath my back because the old adage of buy low, sell high, almost no one does it because it’s scary.

(43:18):

So the way that I think of the market going down, the banks went down like crazy yesterday, the last few days, the last week. What I’m thinking is, wow, it’s a great time to buy banks or to get the right bank or to get a bank fund or whatever, however you want to do to get to invest in it.

(43:42):

So I think just knowing that looking back on the history of the stock market was helpful to me, to see that in big chunks, the market does pretty well. If you’re looking at one year, because I’ll have my friends that will say, especially if I’ve looked at their 401(k) with them and kind of helped them understand it, they’ll say, “Oh my God, I looked at my statement from 2022 and it’s horrible. It’s down 15%.” And I’m like, okay.

(44:11):

And so this is a teachable moment, and I’m like, “You know the S&P 500, the 500 largest companies, was down 20%.” “Oh, really?” And I’ll say, “You know what would make you feel better? If you go look at the three-year performance and the five-year performance and a 10-year performance if it’s available, you’ll feel a lot better,” trying to say that long periods of time matter so much more than just a snapshot in time.

(44:37):

Unless you needed that money in one year, which you probably shouldn’t have invested in the stock market anyway, one year’s time doesn’t matter. And the moves of the market, again, kind of knowing how historically the market performed, the moves of the market is that it’s not a straight line. It’s going to go down.

(44:53):

As I tracked my net worth, it didn’t just go straight up. There were some divots, 2008, 2009, it went down and then it came back up, and then it went up some more. So just looking at my own and whoever does their own net worth, you will start to see that too, that it’s going to go down sometimes.

(45:15):

So, stay the course and try to look at longer periods of time, and it’s just going to make more sense to you because the question is, do you need this now, in the next year or two years, or do you need it in 10, 15, or 20 years? That makes all the difference. If the answer is 20 years, then see if you can find a 20-year history if you really want to be fair about comparing it. But it’s hard. It’s an emotional thing. It doesn’t feel good to anybody.

Stephanie McCullough (45:42):

Yeah, exactly. And I think that’s what we have to acknowledge is the emotional side of it.

Jackie Cummings Koski (45:45):

Yeah. We have to acknowledge that.

Stephanie McCullough (45:50):

So Jackie, if people would like to follow you and learn more about what you’re doing in the world, how could they do that?

Jackie Cummings Koski (45:54):

Well, I am on social media a bit. Instagram is my most fun place, but my screen name there is FInomenal Woman, so capital F, capital I, and then nomenal Woman. FI is financial independent, and it’s giving homage to my favorite poet, Maya Angelou. So, FInomenal Woman is my handle. My daughter helped me come up with that.

(46:15):

And I have a Linktree. That’s Money Letters, my business, just Linktree/moneyletters. And that’s all the work that I’ve done, my contact information. And I would love to connect with you guys. I love talking about the stuff just like you do. I love the podcast. I’m a listener, and I was so glad I found it. And I just connected to what you were saying and how you guys were approaching it.

(46:40):

So yet another example of why I decided to move in the financial planning space, because there’s great people like you guys.

Stephanie McCullough (46:50):

Thanks so much.

Kevin Gaines (46:50):

Thank you.

Stephanie McCullough (46:50):

Thanks, Jackie, for joining us today. I really appreciate your time and insight.

Jackie Cummings Koski (46:54):

Oh, thanks, Stephanie and Kevin. This was so great.

Kevin Gaines (46:55):

Thank you.

(47:01):

So, wow, as always a ton to unpack. I think probably the most important thing that I got was that she moved at her own pace, meaning she was talking about going through the divorce where it left her mentally. And she was prepared to get there to make those next steps, but she wasn’t ready initially despite people saying, “Oh, you got to start worrying about this, that, or the other.” It was her own pace. And when she was ready to take those next steps, she took them.

(47:40):

But she didn’t try jumping the gun and which we all know, if you’re not ready to take a particular step, it can lead to some bad consequences, failure. Then you start worrying about it, and then you just ignore it saying, “Well, it didn’t work,” whatever. She moved at her own pace. And I think she definitely needs to be congratulated for knowing herself on what she could and could not handle at any particular moment.

Stephanie McCullough (48:06):

Well, and it might have been tough at the time, but I think there is a lot to be said for giving yourself some grace. Like, “Hey, I’m going through a lot right now. I know where I want to get to and I’m going to tackle it. But today, I just got to get through the day.” I remember when I had young kids, and I certainly wasn’t going through what Jackie was, “But hey, I fed everybody today. They’re still alive. That’s a win. We’ll wake up tomorrow and start again.”

Kevin Gaines (48:31):

Exactly.

Stephanie McCullough (48:32):

And I love the story of joining the investment club as a way to dip her toe in the water and start some stuff. She went and just watched the meetings for a little while, and then she joined. So again, it’s baby steps, baby steps, and taking one step at a time. Joining an investment club is not going to be the right solution for everybody, but it was a way for her to start feeling more comfortable, start feeling more educated and empowered and finding like-minded people.

(49:01):

And I think that’s another interesting piece of that journey story, is that she found the communities that supported her and helped her feel more confident in taking these financial actions towards her own stable future.

Kevin Gaines (49:16):

And the other thing she got out of that was it led her to a place where she wasn’t the divorced one. Remember how she was talking about that it was nice to have a place she could go and be herself and not the current version of her past. And if you think back to our divorce series, that’s one of the things that a lot of people were speaking to, which is you find your own path but look for what’s going to allow you to move on.

Stephanie McCullough (49:55):

So you know because the name of our podcast is Take Back Retirement, we cannot overlook her own personal definition of retirement and how it changed over time. It really went from kind of the standard cultural definition to what worked for her. And I like this idea for her retirement meant taking a break, a full-on break, not doing it on the side while still working, getting herself to the position where she was confident financially, and it took two years longer than she thought it would because she felt better with that buffer. But to take that full break and figure out what was next at that point.

(50:40):

She’s not going to be sitting in a rocking chair knitting the whole time. She has dreams of changing the world. And as she said, you can’t predict what’s going to come up. It’s okay not to have all the answers, which I love because I’m always forever saying you don’t need to know all the answers. You need to know the questions to ask and have the guts to ask them. And it seems like creating that space in her day and mental capacity of stopping working for a while was what she needed to ask herself the questions of what’s the right next step for me? How can I explore what that might look like?

Kevin Gaines (51:18):

Which leads to a very important next step as far as a concrete action that she took was a net worth statement. And don’t get hung up. I would say don’t get hung up on the term net worth. It’s like, “Oh my gosh, it’s going to be this, it’s going to be that.” Really all the net worth statement is, is an inventory. It’s what you have both assets and debts, but you have it. It’s just a list. It’s nothing more than that.

(51:50):

If you choose to do the math, then it becomes a net worth statement, but you don’t even necessarily have to take that step if you just find it too overwhelming. Like she said, just put down a list of everything you have and you think you have. If nothing else, you may find something you forgot about. Retirement plan from an old job is a very common problem in the world. A lot of people switch jobs they lose track of, may only be $5,000, $10,000, but you know what? Damn it, it’s your $5,000, $10,000.

Stephanie McCullough (52:22):

And a net worth statement is a snapshot in time. It represents what you own minus what you owe on that particular date. It is not a judgment on your character. It is not destiny forevermore. It’s just a snapshot and it gives you the information, the data from which to maybe make some decisions like, “Oh, you know what? I’m not necessarily comfortable with how that came out. What can I do to change it?” As opposed to, “Oh, I’m a terrible person. I can’t believe that the number is only this,” or whatever it might be.

(53:05):

Remember, we’re setting aside that self-judgment and looking at this as data points. We’re taking on our scientist selves, our investigator self. Oh look, here’s some data. Okay, what does it tell me? And if I want to change it, how can I go about making that change?

(53:22):

Speaking of that, I just love, I know she wrote the book 10 years ago, but I love this idea of creating some kind of legacy for the kids. So her book is called Money Letters: 2 My Daughter. We will link to it and as she said, she’s learned a lot more since then, but she wanted a way to pass on what she had learned in the area of personal finance to her then teenager who didn’t feel like hearing it and probably couldn’t have used it back then anyway.

(53:50):

But I think that’s a great lesson. You don’t have to be the world’s foremost expert on personal finance to find a way to pass on what you do know, the lessons you have learned to whether it’s your progeny or just someone else in the world, I think that’s an awesome step that a lot of us can follow.

Kevin Gaines (54:09):

Well, I think it was awesome was how she got her daughter to read the damn book.

Stephanie McCullough (54:14):

I know. Tricky, tricky. Help me out, daughter.

Kevin Gaines (54:15):

Help me out, daughter.

Stephanie McCullough (54:16):

Well, I hope you enjoyed our conversation with Jackie. We’ll have lots of links for you in the show notes. Thanks so much for being with us. We’ll talk to you next time. It’s goodbye from me.

Kevin Gaines (54:30):

And it’s goodbye from her.

Stephanie McCullough (54:32):

Be sure to subscribe to the show and please share it with your friends. Show notes and more information available at takebackretirement.com. Huge thanks for the original music by the one and only, Raymond Loewy, through New Math in New York. See you next time.

Disclaimer (54:48):

Investment advice offered through Private Advisor Group, LLC, a registered investment advisor. Private Advisor Group, American Financial Management Group, and Sofia Financial are separate entities. The opinions voiced in this material, are for general information only and are not intended to provide specific advice, or recommendations for any individual security. To determine which investments may be appropriate for you, consult your financial advisor, prior to investing. This information is not intended to be substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.