Personal Finance Interview with Pauline Paquin on Reaching Financial Independence for Mint.com
There's a lot to love about frugal living says Pauline Paquin, the writer behind Reach Financial Independence, a blog that focuses on attaining financial independence through savings, hard work and simple living.
She likes that she only spends money on what she needs. She makes food from scratch, controlling quality and improving her health. She doesn't own any unnecessary furniture and she doesn't hoard useless items, which frees her to move to other countries on a whim in the search of the next adventure.
"I like that all the money I do not spend on things buys me freedom and time," she adds.
We recently caught up with Pauline to learn how she reached her financial goals and why she believes living with less makes you rich.
Can you tell us a little about Reach Financial Independence? When and why did you start the blog?
Reach Financial Independence started in the summer of 2012, after I had read personal finance blogs for years and decided I wanted to have my own voice on the matter. I talk about how hard work and a high rate of savings can help you be financially independent, quit your job and follow your dreams.
Who should be reading it?
Anyone who enjoys talking about finance, travel and self-improvement. I focus mainly on early retirement, life as an expat in Guatemala and smart money moves to improve your finances. Most of my readers are between 25 and 45 and trying to become above average financially, so they can gain more freedom.
Why is being financially independent so important to you?
Financial independence is freedom. Whatever your dream is, you can make it happen if you are financially independent. You can quit your job, take another one that pays 80 percent less but that you really enjoy, travel the world, stay at home and take care of your kids, start your own freelancing business ... whereas if you are tied to a day job it is much harder to take the leap.
For me it is also important to support myself and not be a burden for anyone.
Can you describe what you do now - how do you earn a living? Where do you live now?
I live in Guatemala and have been for the past year and a half. I earn money from the three blogs I owned, Reach Financial Independence, Make Money Your Way and The Savvy Scot, all of which focus on different aspects of personal finance. I also run a small guesthouse in Northern Guatemala.
Those would be my active sources of income that I need to work for if I want to maintain. I also am a landlady and have a few other investments that provide passive income.
I do not need my active income to live on but really enjoy both activities, and I like to keep busy so those are my endeavors of the moment.
How has traveling and living around the world impacted your views on money?
I traveled for a year right after college and the main eye opener was that during that year I didn't need many of the items I had packed. You can live on so little it is amazing. Rotating three tops and three bottoms, you could have enough clothes for a year. Traveling has taught me that, as well as many human lessons, about people living in what one would call poverty, yet being humanely richer than most "rich" people.
Traveling has also triggered that need for free time and freedom in general so when I got back to a 9 to 5 job I was really motivated to work hard, save hard and make another early exit.
By our count you've lived in six countries - of all of these countries, which one do you admire the most in terms of how money is viewed and handled?
I would have to go with my home country, France. I often complain that access to credit is pretty difficult, as the criteria are very strict, but we are taught from an early age to make do with what we have, live within our means, save money and invest for our future.
Having credit card debt is really unusual, so is a car loan; a few students graduate with loans but for the great majority our only debt is our mortgage.
What's your definition of frugal living?
Frugal is stretching your dollars as much as possible without affecting your comfort or your values. We all have different values and levels of comfort, but for me it is paying a high price for a quality item that I will use every day, like a laptop, splurging on things I do enjoy, like travel or good food, and saving as hard as possible on the rest.
For example, I am 33 and have only had two cars for a total of two years. Buying a car is simply not important to me.
Frugal living is also about limiting waste, the same way I do not buy things I do not need, I try to limit food waste, energy waste, time waste ... as it is a useless way to spend your money.
What's been the most surprising way you've found to earn extra income?
I was checking the university paper as a student and found a cosmetic lab looking for volunteers to test a lipstick. I don't remember how much I made but it was a nice payday just to put makeup on.
I am also surprised that my blogs bring in so much money and allow me to earn extra income from anywhere in the world with an Internet connection.
What are some of the simplest ways you've found to save money/spend less?
Limit the waste. The average household throws away 30 percent of the grocery bill. Leaving the heat on with an open window wastes energy for nothing. If your closet is full, don't go shopping, look for something you haven't worn in years and wear it again. Just by spending only on things you need you will save a lot of money.