The Focused Investor 5 – Terrence on Helping Those In Debt

For this post in the Focus Investor Series, we have Terrance – a friend I made at FinCon last year. He has a strong opinion about budgeting and debt that I fully support!

Written by Adam on May 9, 2019. Updated January 17, 2020.
6 min read. Investing. Leave a comment.

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This is the fifth post in Minafi’s The Focused Investor series. This series is a chance to hear investing opinions and takes that may differ from my own, but are core to someone else’s investment strategy.

Each Focused Investor article touches on 3 parts:

  • Who’s writing and why are they writing about investing?
  • What is one core investing opinion you believe in?
  • What advice do you have for someone getting started?

The goal of this series is to see what different investors feel is the most important core opinion about investing and share how they believe someone could get started today.

Consumer Advocates
Consumer Advocates

This week features Terrence from I met Terrence at FinCon 2018, and we bonded over Puerto Rico, Florida and of course finance.

Hola! Mi nombre es Terrence Gordon.

Terrance in Puerto Rico

Buenos dias from Puerto Rico! I am a 35-year-old community editor with the online consumer product review site,, one of the most trusted sources for life’s most important buying decisions regarding everything from personal finance and insurance to home & lifestyle products, among other things.

I relocated to Puerto Rico in 2018 for my career, moving from my hometown of Denver, CO. Although this is not my first move from Denver, it was still difficult to say goodbye to family, friends, and my students (I was formerly a K-5 teacher). 

I wanted the opportunity to grow both professionally and personally, so I moved to this beautiful island to join a great company that is making decisions easier for consumers like me.

Moving into my new apartment, having a new salary, and figuring out daily expenses like how much groceries cost here, how much is auto insurance, and what’s the price of gas, made me sit down and put together a new monthly budget.

My goal is to retire early, which is why I connect so much with the Minafi – Minimalism + Financial Independence philosophy. My biggest challenges was figuring out how to become debt free, which is a big step, but one I believe is necessary to becoming financially soluble and independent.

What is My Core Opinion on Financial Independence?

The other day my new friend from Puerto Rico told me that she only thinks about her debt when she pays her bills. The image of an iceberg immediately came to mind – like, she’s only paying attention to the amount she owes on her monthly bills and completely ignores the total sum of her debt, including accrued interest, which is quickly growing just under the surface.

Millennials and Gen Z’s ages 18-24 currently carry an average of $22,000 in debt, with student loans understandably being the biggest contributor to debt for this age group. Millennials ages 25-34 carry an average of $42,000 in debt, with credit card debt being the lead source of debt for this group.

Therefore, my core opinion is this:

How do we help younger generations of Americans become debt-free and gain financial independence?

Core Investing Idea

There are many financial budgeting methods out there for you to choose from, but my go-to method of personal finance is to follow the 50-30-20 rule.

Puerto Rico
Beautiful view of Puerto Rico

How Do You Get Started on a Monthly Budget?

So, here’s the hardest part about setting a budget: getting started. Well, at least it was for me. It took some discipline to adapt to the 50-30-20 rule, but I did it, taking one baby step at a time. But first, what is the definition of this budgeting rule?

If you haven’t heard of it before, the 50-30-20 rule was promoted by Elizabeth Warren in her book titled, “The Ultimate Lifetime Money Plan.” The rule is to set a monthly budget of after-tax income using three categories or buckets: 50% goes to needs, 30% to wants, and 20% to savings. Sounds easy right?

Here’s a further break down of the categories:

  • Needs: this encompasses your living expenses, including rent, utilities, phone, gas, and groceries. It also includes insurance, student loan, credit card, and personal loan payments.  
  • Wants: this is your discretionary spending budget for a month. Use it as you wish!
  • Savings: this is your nest egg. If you are just starting to save, you may want to set an initial savings goal of say $5oo – 1,000, putting the funds into a savings account prior to investing in a money market, mutual funds, or stocks.

Let’s say you bring home (after taxes) $2,700/month. Your monthly rule percentages translate to $1,350 for needs, $810 for wants, and $540 for savings. Make sense?

The way to get started is to list out all of the after-tax income you make in a month and then list all of your debts with associated monthly payments. 

Use a pad of paper if you have to – just make the list so you know what’s coming in and what’s going out. I know for me it was a bit of a shock when I first saw the numbers in front of me.

After you have done this, calculate your 50-30-20 amounts to find out if you can manage your needs with the percentages presented. This includes being able to make at least the minimum payments on all of your loans and credit card payments. After that, if you can manage it, implement the plan at the start of the next month and watch as your savings start to grow.

I’ll leave you with a piece of advice I still get from my dad. “When it comes to a monthly budget,” he said, “Pay yourself first.” He meant, put away your savings first, then take care of your bills. That has stuck with me, although I didn’t always follow his life lesson, but I do now. And for some, it may be hard to follow for various reasons. 

Setting a personal budget is also putting yourself first because it can help take you on the path to financial independence.

For more by Terrence, check out

Do you write about investing and want to contribute to The Focused Investor? I’d love to work with you! Check out The Focused Investor page to see how.


About Adam

Hi, I'm Adam! I help millennials invest to reach financial independence sooner than they ever thought possible. Want to see what you could do to reach FI sooner? You're in the right place!

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