SuperMoney Interview Series: Mr. and Mrs. Groovy of Freedom Is Groovy About Achieving Financial Independence (Even If You’re Late to the Party)

Mr. and Mrs. Groovy, who blog over at Freedom Is Groovy, are big proponents of financial independence, small government, and leading a groovy lifestyle. We caught up with the Groovys to hear their advice on saving money, tackling debt, and living frugally.

Tell us a bit about yourselves. Why did you decide to adopt the “groovy” moniker (and start a blog)?

We got our financial act together rather late in life (in our 40s) but finally figured things out. We made a few bold moves to turbocharge our path to financial independence, such as relocating from high-cost New York to low-cost North Carolina; and we thought other people could benefit from our experience, especially late bloomers. Mr. Groovy has always been a fan of the 60s – the television shows, the music, and the politics – and the groovy moniker is his homage to that era.

Even though you’re a big proponent of keeping the government out of your life, you still have to pay income taxes – so what advice do you have for Americans in order to make this process as painless as possible?

The best way to lower your exposure to the tax man is to fund your workplace retirement accounts. This tax-deferred mechanism dramatically lowers your income tax bite. Through our use of a 401(k) and a 403(b), we were able to cut our taxable income in half for the past four or five years.

Other than taxes, what are some of the ways that government intrudes on the financial lives of people? How can this meddling be minimized or avoided?

One word: regulation. A great way to avoid it is to gravitate to those parts of the economy that are new. A perfect example is the Internet. If you can start an online business rather than a brick-and-mortar business, you can avoid a crapload of regulations. We’re not trying to be disparaging, but avoid the coasts, especially New York and San Francisco if you can. If you want a perfect example of how regulations can grind you down, read the book My Korean Deli by Ben Ryder Howe.

If someone were to say to you, “I know I have to start thinking about and planning for my retirement, but I just don’t know how to get started,” how would you respond?

Open a Roth IRA with Vanguard, and then automate your monthly contributions. Even if you start at age 40, you’ll still have $440,000 by age 65 if you max out your Roth every year. Keep it simple and choose two mutual funds (60% total stock market fund and 40% total bond market fund), and never waiver! The market will tank at some point, but you need to keep contributing.

What suggestions do you have for people who are in their 40s or 50s and haven’t begun to save for retirement?

Do the same thing as in the above paragraph, but with two additions.

The first one pertains to marriage. If you are married, stay married. If you’re not married, try to get married. Retirement is the ultimate team sport.

The second one pertains to geoarbitrage. If you’re not already living in a low-cost state, plan on moving to a low-cost state when you retire. Your Roth IRA and Social Security benefits will go a lot farther in North Carolina than they will in New York.

Do you have any strategies for people who are trying to slow or stop their household debt accumulation?

You gotta track expenses. You gotta see where your money is going. Once you know where your money is going, you gotta attack the biggest ticket items first. If your largest expense is the house (mortgage or rent) do whatever you can to downsize. Supporting a 1,500 square foot house is a lot easier than supporting a 4,500 square foot house. A one-bedroom apartment is a lot cheaper to rent than a two-bedroom apartment.

Once you’ve minimized expenses as much as possible, shift to the income side. Get a second job or a side-hustle. If you have a spare room, list it on Airbnb and get some additional cash flow. The bottom line is you gotta stop the bleeding, and tracking your expenses is the first step in the financial cauterization process.

Tell us one “secret” to help people make progress toward financial independence that they can start putting into practice today.

Our secret is: be boring. Don’t try to impress others. Live under the radar. Don’t be flashy. For example, we’re perfectly satisfied driving around in our 2004 Camry. We don’t need a 2016 Lexus to be happy. If you’re able to live modestly, you’ll spend less than you earn. Keep doing that for thirty years, and you’ll be set.

In the future, will it be easier or harder for people to become financially independent?

Easier, because people will have more options. For instance, tiny homes and container homes are very recent phenomena. Ride-sharing and driverless cars didn’t exist ten years ago. In the future, the need to own a car will not be as imperative as it is today for a lot of communities. College, as we know it, is not going to exist in 10-15 years. You won’t need to spend $80,000 on a college education when you can take courses online for nothing (or next to nothing) and still learn a valuable skill.

Need some help in getting out from under your debt?