Meet Fernando!
Fernando and I originally met through the Effective Altruism community, made up of people who are passionate about maximizing global wellbeing through evidence-based research and action. We found immediately that we have A LOT in common. We’re both super into the FIRE lifestyle (Financial Independence Retire Early), started nonprofits that support charitable giving, and we’re both fantastic dancers. Just kidding, Fernando is a professional ballet dancer, whereas my “skills” start and stop at a wedding dance floor.
Fernando is one of the few folks I have met pursuing FIRE with a career in the arts. And I LOVE that. Sometimes FIRE gets a bad reputation. The stereotype is an overpaid, highly, frugal software engineer who spends their days hacking the system by eating all their lunches at work, showering only in their office bathrooms, and working out by lifting heavy rocks to avoid expensive gym fees. The reality is there are ALL DIFFERENT TYPES of people out there pursuing FI with different aspirations and ambitions, and Fernando is one of them.
Fernando is doing ALL THESE AMAZING THINGS – not only is he working towards an early retirement, he also gives a significant chunk of his income to charity. Combining those two things is not easy, and he’s run into some financial bumps along the way.
Fernando shares more with us about his personal finance journey and his top #4 mistakes.
Read on....
Tell us how you learned about FIRE.
I was first introduced to the concept of FIRE when I was 19, after I had just moved from London to Texas to start my career as a professional ballet dancer with the Houston Ballet. I’m not sure where I first stumbled across the concept, but it was almost certainly some YouTube video (thank you algorithms!)
I remember being attracted to the autonomy that FIRE seemed to bring to people’s lives. I loved the idea of being financially self-sufficient and not being beholden to others, especially a manager or boss. I vividly remember committing to reach FI as soon as possible while doing the thing I was already doing – dancing my heart out.
I’ve always been frugal and good with saving money, but up until that point I had never taken the next step of investing the money I saved. By the end of my first 10 months as an apprentice in the company, I had roughly $10,000 saved up in my bank account, but not a dime invested.
I had been on a personal development kick since my late teens and I started digging into a bunch of the classic personal finance books that were being recommended like Rich Dad, Poor Dad, Money: Master the Game, and The 4-Hour Workweek. These books helped me see money as a means and not an end (a tool), remove some of the limiting beliefs I had around money (e.g. money is only made by exchanging it for time), and understand the vital role that investing plays in the process of building wealth.
What is the biggest achievement you have made when it comes to finances?
I would say the top two are:
Reaching “Coast FI” by age 22: “Coast FI” means that even if I don’t invest another cent for the rest of my career, I will still reach my retirement portfolio goal of $1 Million+ by the time I’m 65. This is made possible because my retirement portfolio would continue to grow over the years, even if I didn’t contribute more money to it. In fact, I actually surpassed this goal because at the age of 22 as by that time, I had enough saved and invested to hit my $1M target by the age of 41!
Increasing my net worth by >500% in two years, while simultaneously donating ~20% of my salary each year to effective charities: This was a huge paradigm shift for me, as I previously thought FI and philanthropy were incompatible. However, I’ve since realized that one can easily incorporate giving into their financial planning and even leverage the added motivation it can bring to achieve greater financial goals!
What about the flip side? Share your biggest mistakes.
I have made countless mistakes on my path to FIRE, but here are the four biggest:
Not starting earlier: It took me nearly three years to start investing the money I’d saved. Had I slowly invested into an S&P 500 index fund during that time, I would have yielded a return of 15% per year, or 52% compounded. While not terribly significant in the short term, this difference would have resulted in a >30% larger portfolio size by traditional retirement age.
Not being aggressive enough: I am fairly risk-averse by nature, so the first investment I ever made was a $30,000, 16-month Certificate of Deposit (a secured loan to a bank) with fixed interest of 2.6% per year. In retrospect, this investment was far too conservative given the growth I wanted. For context, a stock market index fund would have yielded 8-10% more per year during that same time period. This experience, however, taught me the importance of considering the opportunity cost when looking at different investment opportunities. Since then, I’ve learned how to comfortably take on more risk and I attribute much of my rapid financial growth to this fact. In addition to investing, one of the strategies I’ve taken on is househacking, where you buy a property with a small down payment, live in it for over a year while renting out the spare rooms or units, and then move out with a rental property in your portfolio and savings from living rent-free for a year! I’ve done this twice, and now I own two rental properties that pay for themselves and cash flow between $300-$600 per month.
Shiny Object Syndrome: Through the early years of my financial journey I fell for many ‘get rich quick’ investment strategies, like penny stocks and swing trading. These experiments were stimulating and made me feel like I was actively making ‘money moves’, but in truth the highest yielding, lowest volatility, and least effortful strategy over time has been ‘dollar cost averaging’ into broad and diversified index funds. Slow and steady wins the race!
Not maintaining a large enough safety cushion: I left my full-time job in the summer of 2022 to bootstrap a new nonprofit project, leaving behind my financial security with it. In retrospect, I wish I had built up a larger emergency fund to give me a greater financial runway. As such, I think there is tremendous power in having 3-12 months of living expenses saved up with the intent purpose of using it in a situation such as this…this last point being key, as it makes no difference if you have the money to spend if you’re not going to feel comfortable spending it.
What is the biggest obstacle you are facing at the moment?
My greatest fears around finances all have to do with spending money on myself now that I don’t have a stable income coming in. I had no problems spending money when I was making more than enough to live on, but now that I’m working with much smaller margins, I have a harder time justifying my spending. In essence, the frugality that helped me so much when I was making money is now what holds me back: being able to freely spend the ‘spending’ money I have.
Tell us more about your nonprofit project and other good stuff you are working on!
I’m currently working to help professional and celebrity artists have a greater positive impact on the world by connecting them with the most effective charities and guiding their support efforts. The arts community has done an amazing job of using its collective voice for change and I aim to leverage this energy to help as many individuals as possible in the greatest way. If you know any professional artists who want to have a greater positive impact, send them my way!
I also signed the Giving What We Can pledge several years ago and have been donating between 10-20% of my gross income ever since. For the sake of simplicity and due to moral uncertainty, my giving strategy looks something like: 25% GiveWell Top Charities, 25% Animal Charity Evaluators Top Charities, 25% Longtermism Funds, and 25% EA Community Building (EA Infrastructure Fund and Charity Entrepreneurship). I also give to charities that I have a close personal connection to, for example Charity Water.
If you could give one piece of advice to other students what would that be?
If there were one piece of advice that I could give to other students looking to reach financial independence it would be to start right now!
In my experience, the hardest step is going from 0 to 1, so if you can take even the smallest step as soon as you finish reading this, you will be in the top 1%. Write down a financial goal, visualize the why behind it, open up a high yield savings or retirement account, anything! Most of these tasks can be completed in less than five minutes, but it takes most of us 5 months to take the first step. Doing so immediately can give you the momentum you need to take off and will help you make the most of compound interest!
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A huge thanks to Fernando for sharing his story with the Y&S community! Make sure to check out his work with Artists of Impact.
Boost your Wallet. Wellbeing. World.
Rebecca
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