How Get Rich Slowly's Founder Retired at 40. Plus, What Higher Bond Yields Mean for Savers

NerdWallet's Smart Money Podcast

In this episode of NerdWallet's Smart Money Podcast, hosts Sean Pyles and Elizabeth Ayoola sit down with JD Roth, founder of the personal finance blog Get Rich Slowly, who

Key takeaways

• Early financial education is rare; many people inherit unhealthy money habits from their families.
• Paying off debt requires more than just cutting expenses—it also involves increasing income and changing mindset.

Main topics

• Early retirement and financial independence
• Debt payoff strategies and psychological barriers

Notable quotes

"I didn't handle my money well, and I'm upfront about that. I made poor choices, and that's how I got into debt." – JD Roth

Conclusion

JD Roth's journey from $35,000 in debt to retiring at 40 demonstrates that financial independence is

Transcript preview

Speaker 4 (0:00) Today's episode is brought to you by Vinted. Sean, Speaker 2 (0:02) do you have clothes in your trunk that you've worn but have no idea what to do with? Speaker 4 (0:07) You know what? I do not because my car is super clean right now. But I'm betting that you do, Elizabeth. I Speaker 2 (0:13) sure do, Sean, unfortunately. And I've been wondering what to do with these clothes. And then I found out about Vinted. So they're like this secondhand marketplace app. And their mission is to make secondhand your first choice. Speaker 4 (0:26) Yeah, Vinted helps their members find great deals and easily sell the clothes they no longer wear. And that helps give quality items a second life again and again. Speaker 2 (0:35) And it helps the planet too. And we care about the planet, don't we, Sean? We Speaker 4 (0:38) do. Well, Elizabeth, whether you're clearing out a bag of clothes in your trunk that's been sitting there for months and months, or you just have pieces in your closet you don't want anymore, Vinted makes it super simple to refresh your wardrobe, earn extra cash, and give your clothes a second life. Plus, there are no seller fees, so you keep what you earn from every sale. And Speaker 2 (0:56) also, the app is free to download. I think that's a great perk. Speaker 4 (1:00) Vinted makes listing items quick and simple. And once an item sells, Vinted creates a prepaid shipping label for you, which takes out a lot of the burden of sending your items. See Speaker 2 (1:08) what's hiding in your closet or like me, your trunk. And you might be surprised how much you can earn with Vinted. Download the Vinted app for free to start listing with absolutely no seller fees. How do you go from having over $35,000 in consumer debt to having enough to retire early? Well, that doesn't happen overnight. But today we are going to be sitting with someone who has actually achieved this. Speaker 4 (1:35) Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles. And Speaker 2 (1:42) I'm Elizabeth Ayola. Today we are shooting from the beautiful Portland, Oregon, and we have a very special guest in the studio. Now, this episode is a little different from the other ones. Usually you guys are sending us your money questions, but today we have money questions for our guest. Speaker 4 (2:00) Right. We're joined by J.D. Roth. J.D. Roth is one of the originals, one of the pioneers of what you might call confessional personal finance, while also instructing others about how to manage their finances. J.D., welcome to Smart Money. Thanks. Thanks for having me. Speaker 2 (2:13) Now, J.D., I'm so excited to have you here today because listeners and viewers of Speaker 1 (2:17) the Speaker 2 (2:17) show know that I love FIRE because I am trying to get out of workforce. Don't take that personally, NerdWallet. I would love to retire early. So I am here advocating and learning everything I can. And you actually achieve that. You also have a book on Audible about FIRE, which is pretty awesome. Speaker 5 (2:34) I'm really excited about that book. I recorded it during COVID. And so it was released long, long ago. But it was really the climax of my entire personal finance writing career was that book. It's like I took. Everything I'd been reading and writing about for 15 years. And I distilled it into that. Honestly, I had never gone back and reread it or re-listened to it until the drive up here to Portland this morning. And I was listening to it. I'm like, doggone it. I did a good job. I Speaker 3 (3:00) love that. Well, that's good. I love that. Yeah. Speaker 4 (3:03) Well, let's rewind the clock a little bit to when you first started writing about personal finance. I believe it was 2006 or so. Yeah, that's right. 2006. And you had a... Good amount of consumer debt, $35,000 across, I believe it was credit cards, personal loans, auto loan. Talk with us about the debt that you had and how you got out of it. I Speaker 5 (3:19) didn't have any kind of financial education. And growing up, my parents, they didn't know how to handle money. My father came from a very poor background. I don't really know what my mom's background was financially. But growing up, they fought about money constantly. When they had money, they spent it. But most of the time, they just didn't have money. And so they struggled to get by. And so the money scripts, the invisible, like underlying beliefs that I had about personal finance, where if you had money, you spent it. And that's pretty much what I did. I got to college and, you know, in college, at least back in the 80s, they will give a credit card to anybody. college students are a great risk because they're going to earn money eventually and let's get them in debt now. But they Speaker 4 (4:04) couldn't really pay off their credit cards when they were in college because they were broke college students and thought, hey, I can go get a bunch of beer and pizza and it's free on this credit card. Next thing you know, that bill comes due. Speaker 5 (4:13) It's exactly what it was like. It's like it was free. And for me, I like books. So, you know, I would buy a lot of books. What a Speaker 2 (4:18) responsible way to get in debt. I like Speaker 4 (4:23) the way you think. Speaker 5 (4:24) So anyway, I ended up. just racking up a lot of credit card debt. So I had over $25,000 in credit card debt by the time I was four years out of college, which was 1995. And Speaker 2 (4:36) what did that feel like? Because I know it can be very heavy, especially being so young, having all that debt. It felt awful. Speaker 5 (4:41) And yet at the same time... I couldn't stop myself. I would pay it down a little bit on the credit card when I got a little bit extra money, and then I'd just go right back out and spend more. Speaker 4 (4:51) And that's tied to the money script you learned from your parents around spending when you have money, but also spending even when you don't have money. Speaker 5 (4:57) I did not handle my money well, and I'm upfront about that. I made poor choices, and that's how I got into debt. Speaker 4 (5:03) So how did you get to the point from realizing, okay, I'm not great with my money. I've carried this debt for a while now. I need to turn things around and actually write about it. Speaker 5 (5:12) always wanted to be a writer, but I always thought I would write science fiction or poetry or something like that. I'd never set out to write about personal finance. And I was also a nerd and I was also deep in debt. So these three things all magically came together with the advent of the internet. And so in early 1997, I started writing a blog. This is what we called it a web journal back then because the word blog had not been invented. I was not writing about money. I was just writing about my daily life. And eventually, In 2004, I decided I've really got to turn my financial life around. And I started going to the public library of all places and checking out books about personal finance. And being the nerd that I am, I took notes on them. And then I tried to consolidate, what are all these books saying? Are there common threads? And I decided the one common thread between all of these books was, there's no reliable way to get rich quickly, but there is a reliable way to get rich. Rich Slowly. And that was the Speaker 4 (6:08) name of your blog eventually, Get Rich Slowly. Yes. Speaker 5 (6:10) And so on my personal site, I wrote an article called Get Rich Slowly that basically tried to summarize everything I had learned. This is back in 2004, 2005 that I wrote that article. And it went to 2004, 2005 version of viral. There wasn't really... Speaker 4 (6:25) viral Speaker 5 (6:25) anything at that time. But it Speaker 4 (6:27) was being spread through email chains or. Yeah, yeah, exactly. Yeah. Other blogs were sharing it. Yeah. Why Speaker 2 (6:33) do you think that resonated with people so much? Because I think a lot of people struggle Speaker 5 (6:37) with personal finance. A lot of people grow up Speaker 4 (6:40) with these broken money scripts. They Speaker 5 (6:42) don't really know how to handle money. It seems mysterious or overwhelming. I know that there are plenty of people who grow up in families where their parents are responsible with money and they are able to demonstrate good financial behaviors. But I think that's the exception rather than the rule. And so after that was successful, I did eventually say, oh, people really like this. So why don't I start a blog about personal finance and call it Get Rich Slowly? So Speaker 2 (7:05) when you wrote this viral article, where were you on your debt pay down journey? Had you already completed it? At the very beginning. Speaker 5 (7:11) No, no, no, no, no. I was trying to figure out how the heck am I going to get out of this? I Speaker 4 (7:16) had Speaker 5 (7:16) $35,000 in consumer debt, which. Looking back, I mean, that was 20 years ago. And so it probably doesn't sound like that big of a deal to people nowadays. But, you know, it's probably equivalent to $7,500,000 something. It was overwhelming for me. It was just overwhelming. Speaker 4 (7:30) What were some of the main themes from the material that you were synthesizing through your blog that really stood out to you and helped you begin to change the course of your financial journey? Speaker 5 (7:39) Well, the very first thing that really resonated with me was Dave Ramsey's debt snowball method. And I know that nowadays it's popular to hate on Dave, but I don't hate on Dave. I really like Dave Ramsey's approach to personal finance, especially because he addresses the psychological side of things. The math of personal finance is very simple. That's not the hard part. It's the psychology that's difficult. Speaker 2 (8:05) That's so true. Speaker 5 (8:06) And so Dave Ramsey's debt snowball, when I learned about that and actually began applying it to my life. and saw that, oh my gosh, this is actually working, that was a big moment for me. Speaker 4 (8:18) And so for those who don't know, with the debt snowball, you focus on paying off your debt with the smallest balance first, while making minimum payments on your other account. And then once you knock out that smallest debt, you roll the amount you're paying on that into your next biggest debt, and so on, gaining momentum like a snowball rolling down a hill. And so that is a really effective mathematical way to pay off your debt. Some people like the debt avalanche, which is kind of the inverse, where you focus on the highest interest rate debt first, that might be able to save you some money in interest, but it's not as rewarding psychologically as the debt snowball for some people. So it's a kind of personal decision there. But getting into the psychological aspect of it, something that has made me bristle about some personal finance bloggers and Dave Ramsey a little bit too is the shaming aspect of it because there can be a lot of shame around how people are spending money and that can be a motivator for some people. How were you feeling with your debt? Was it a shameful process of getting out of it or how did you actually navigate the emotions you were feeling? Speaker 5 (9:11) You know, at the time, I didn't identify it as shame. I never named