158 | Real Hourly Wage | The Frugal Engineers
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Episode Highlights
Frugality
Kim shares her journey towards embracing a frugal lifestyle, highlighting the importance of living within one's means. She recounts her experience during a gap year at Disney World, where she learned the hard way about financial boundaries. Despite earning $9 an hour, she attempted to match the spending habits of a partner earning significantly more, leading to financial strain 1. Kim emphasizes the value of enjoying life on a budget, noting, "You can have a lot of fun when you're earning $9 an hour and getting all the free benefits of working at Disney World. It's just a different kind of fun."
You can have a lot of fun when you're earning $9 an hour and getting all the free benefits of working at Disney World. It's just a different kind of fun.
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Her story underscores the importance of financial awareness and the impact of lifestyle choices on one's economic well-being 2 3.
Investment
Kim discusses the decision to move away from costly financial advisors, highlighting the benefits of self-managed investments. She shares a personal story about her mother-in-law, who was paying $10,000 annually to an advisor for services that could be done independently 4. Kim explains, "You meet with this person once every three months and you're paying him $10,000 a year. So it's essentially a $2,500 an hourly rate that you are paying this person to do the equivalent of Amazon online shopping for you."
You meet with this person once every three months and you're paying him $10,000 a year. So it's essentially a $2,500 an hourly rate that you are paying this person to do the equivalent of Amazon online shopping for you.
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This shift not only saved money but also improved her mother-in-law's quality of life in retirement, demonstrating the power of financial literacy and independence 5.
Hourly Wage
Understanding one's real hourly wage is crucial for financial independence, as Kim illustrates through her own experiences. She explains how calculating her real hourly wage revealed the true value of her time, prompting a shift from traditional employment to freelancing 6. Kim notes, "When I realized that I could sell my brain by the hour at that higher rate, just directly to the client, I knew, I need to do this."
When I realized that I could sell my brain by the hour at that higher rate, just directly to the client, I knew, I need to do this.
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This realization allowed her to work more efficiently and ethically, ultimately leading to a more fulfilling career path 7.