What if financial independence is something you could build for yourself, before you even hit 40?

Katie and Alan Donegan did exactly that.

No lottery win, no trust fund, just a determination to live simply, stack their cash, and build a life where they didn't have to answer to anyone else.

They retired at 35 and 40, and now travel the world while running Rebel Finance School, a free money course that's helped thousands of people worldwide sort out their finances.

Financial journalist Frances Cook sits down with the Donegans on the Making Cents podcast to find out what it actually takes for normal people to reach financial independence and retire early.

In this episode:

• The three financial levers they pulled at once - spend less, earn more, invest - and how that took them from $0 to $1 million in about ten years
• Why friends and family thought their frugal lifestyle meant they'd lost the plot, and how to be financially disciplined without being miserable
• The one investing move Alan says he'd make from day one if he could go back
• Why fees are one of the only proven predictors of how well an investment fund performs, and what to check on your own KiwiSaver or index funds
• Why getting on the same page with your partner about money can matter more than any spreadsheet, budget or savings plan
• How to keep spending on what you actually value while cutting everything else, so you save without feeling like you're missing out

Whether financial independence feels like a pipe dream or you're already working towards it, this episode breaks down real, practical steps for building wealth, investing for the long term, and designing a life on your own terms.

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Production and video editing by Lana Byrne

Audio engineering by Tash Chittock

Filmed by Fanaticals

Having enough money to live life on your terms sounds like something for millionaires and trust fund babies. But what if it's something you could build for yourself before you even hit 40?

Because Katie and Alan Donegan did no lottery win, no trust fund, just a determination to live simply stack their cash and build a life where they didn't have to answer to anyone else. Certainly not a boss. They retired at 35 and 40 and now live a pre pretty good life, including recently traveling to New Zealand.

So of course I had to yank them into the studio to find out what's the secret for us normies to make financial independence a realistic dream.

You've basically got three main levers. Spend less, earn more, invest your money. So we pulled all three at once. Zero to a million was probably 10 years.

Getting there wasn't all spreadsheets and good intentions though. There were years when people around them thought their frugal life had made them lose the plot.

People look at us and be like, I don't want to be traveling nomadic weirdos like you.

No, like you've missed the point.

Do what you want to do.

You don't have to be weird like us. You can be weird like you.

But they're adamant. Being disciplined doesn't mean being miserable.

It's about knowing what does and doesn't matter to you and then being smart about living your life around. Around that.

There are things that people call once in a lifetime adventures, which I started to think, well, I wonder how many of those we can do a year.

So welcome to Making Sense. It's the podcast people who want financial freedom without giving up their coffee.

I'm Frances Cook, financial journalist and fellow financial freedom seeker who makes money simple for you today. Financial independence for us normal people.

This episode of Making Sense is supported by Odoo, the affordable way to get your business working smarter. Go to odoo.com that's o d double o.com for more.

I want to help as many people as possible build a better life for themselves by understanding and taking control of their money. You can be part of how that happens. First, make sure you're subscribed wherever you like to listen, whether it's YouTube, Apple Podcasts or Spotify.

And then send your favorite episode to a mate. Then we can all level up with money together. The show grows and I can keep bringing you the money info that actually moves the dial. Welcome in team.

So pleased to have you because we were chatting a bit off camera about having stalking your work for quite a long time and the amount of people you have helped. But it all actually started with yourselves because you did hit financial independence, retired early. Was it 35 and 40 that you respectively hit it?

Yes, I was five years slower than.

Katie in most areas of our lives. There we go.

So go on. What was the big thing that helped you hit financial independence? Did you get super rich? Did you win lotto?

There was no lottery, there was no super rich. There was none of that. There was no inheritance.

Inheritance. Mommy and daddy didn't pass us tens of thousands of pounds or dollars. There was none of that. It's really interesting, isn't it?

People think that there must be some kind of luck involved.

And of course, like there's certain advantages that we have, you know, to be born at this time, to be born in the uk, to be born to kind, caring parents. Yes, we have those advantages. But there's no, I don't know, no kind of outsized thing of. Well, we were handed money, we were given something.

I was never given money, but I was. My lucky moment happened when I was 20ish or something like that. My parents were getting divorced. I worked in the family business.

You do not want to work in the family business when your parents are getting divorced.

Yeah, sounds complicated.

My family crashed. I quit my job. I went to see my girlfriend and said, like, I have lots of time, let's go away together. And she said, I don't love you anymore.

Oh, gosh.

So I lost my job, my family and my girlfriend all in one go. And this guy Matt looked at me and said, you're in a bit of a mess, aren't you? You should read this book.

And he gave me a self development book when I was 20 and that book started me on a journey of learning. So I guess my moment of luck was someone handing me notes from a friend and it changed the way I looked at life changed.

I bought his other two books that week. That inspired me to do more books courses and it sent me on a 25, 30 year journey into self development.

So when you talk about the moments of luck, for the people listening to this podcast right now, this might be your moment of luck. We are here to give you the tools and insights that have helped us achieve it and share it. But that was my moment.

So I was given a book and that changed my life at a real low point.

Like you, like everything came for you at once there that must have. Your world would have felt like it was ending.

It did at that point.

That was a. Yeah, I had bad things happen to me when I was younger that actually I really wish I hadn't experienced them, but they made me who I am today. And mine was.

My dad went bankrupt for 3.6 million pounds, which in today's money is 10 million pounds, which in New Zealand dollars is 24 million New Zealand dollars. He went bankrupt for and he gambled away the family home.

And I was left in court arguing to keep a roof over my mum and my brother because we couldn't afford a lawyer. And I decided that was never going to happen to me. I decided that money was something that needed to be tackled.

It also left me with a lot of scars, that money was something that can rip your family apart, money was something that can destroy you. My mum would repeat, money is the root of all evil. She missed off the last bit or the first bit, the love of money, but she would repeat that.

So I was left with a lot of money scars. But it also left me with the motivation that that was never going to happen again.

Yeah, isn't that interesting? I was literally just thinking about this last night that I feel like I've been very lucky to meet a lot of very successful, very motivated people.

I feel like so many of them do have quite big scars or a chip on their shoulder of some sort and it's really pushed them to do big hard things.

And it's interesting where you've got both the good and the bad of that experience where you're like, this pushed me to create stability and security, but at the same time I had all of these thoughts and feelings around money.

Is that something which you're still dealing with, where you are trying to take sort of the good aspects of that while shedding the other sort of money scars? Is that an ongoing process or do you feel like you've dealt with it?

The self development book and the self development journey. I eventually went on a course that talked about beliefs and the summary of that was, have you ever taken the time to choose what you believe?

Most of us have inherited beliefs from our parents, beliefs from these painful situations, all these different beliefs.

We've inherited them and we believe them, but we've never gone and pulled them out and gone, is this the belief I actually want to keep and will it help me in my life? So I pulled lots of them out like, money's the root of all evil and went, well, it's not the money, it's the people that are the problem.

It's the people that do weird stuff to get the money. And that changed the way I looked at it. Whether you can say it was luck that I was handed the book. It was.

But I then put myself in a position to go to these courses and to learn as much as I can and to individually go through and think what do I actually believe and does it help me? And I've become a big fan of. I prefer beliefs that will help empower me than ones that trap me or maybe even are truer.

You can believe people are good, you can believe people are bad. And we've all got examples of both. But which one helps you to have a nicer life? That's been a very conscious process over the last 25 years.

The Allen before you was built. He wasn't born this way.

So at what point in that process then did you discover the financial independence movement and were you guys together yet or did that come before or after.

You were kind of just coming out of the of your parents getting divorced, weren't you? We both independently flew all the way to Costa Rica to do a volunteer project. We lived 37 miles apart in the UK but we never would have met.

And yet you met in Costa Rica.

Yeah.

So we were, we were both actually in a bit of a pickle in our lives for different reasons.

Tell me about your pickle.

I'd spent my whole life comparing myself to other people and competing and trying to be the best. Spoiler alert. I'm still doing it, so I'm working on that. Haven't quite learned my lesson yet.

Despite the many identify Yep, really hard to stop.

Many, many painful experiences to this day, but I keep doing it.

So I had crashed out of uni because I spent most of my life up to that point comparing myself to other people, trying to compete, trying to be the best. And then I got into a really good university and suddenly I wasn't the best.

There were some very smart people around me and I kind of crumbled and lost my identity, couldn't function so went back home, lived with my parents for a while and got a part time job eventually and was always very savvy, very frugal, very. I enjoyed watching the money accumulate in my piggy bank.

It wasn't invested, it was in a piggy bank or the equivalent thereof, just sat in a savings account. My mum, I love my mum, asked me this question, said, are you gonna do something?

Are you gonna like have an adventure with this money that you've been saving. Like, what are you gonna do with this? Looking back at it now, I wonder if she was just trying to get me out of the house.

I mean, like old old.

But, you know, mature adults, they have.

Their lives like, you know, percentage difference. That's quite. It's getting smaller and smaller as we age together. But I was like, who is this, like, masterful man?

Oh, very nice, but completely intimidated as well. And he said to me, katie, you know, you can live any life you want. I was like, what do you mean? What do you mean?

It's like, you don't have to follow this standard path that's been set out for you.

You know, you get the good grades at school, you get good grades at uni, you get a graduate job, you know, the standard path that if you want to be on that path, great, but consciously decide to do so. And Alan was like, do you consciously want to be on that path? And that broke my brain.

I was like, I think it still does to this day, despite the very unconventional path that we've taken together since then. I was like, oh, what do you mean? And I battled against that for some while, didn't I?

Then I was searching down high street going, where's the asset shop? There must be something around here.

There's the bookmakers, there's like the sausage roll shop, the coffee shop, but there's no asset shop, pie shop, no asset shop. Where is it? And we spent years going, how do you buy an asset? And eventually our first assets were to investment properties.

And then the north, or I liked, published a book on, on personal finances. And I learned about index funds that completely changed the game for us. Like, ah, you can put your money in an index fund. It won't go straight up.

It'll be volatile, but you'll get 10, 12% a year on average. Like 10, 12% a year. That's, that's huge. So we decided to start investing in index funds that slowly built up. Our confidence built up.

We found out about the financial independence community around the world. I was very committed. I would fly anywhere in the world to learn something. Learning was the game.

So we flew all the way to Ecuador to meet Mr. Money Mustache and J.L.

Collins and the Mad Fientist and learned all about index investing and met people who'd retired in their 30s and that inspired me that it was possible. And then we went full out to do it. And just as an asterisk. Just because we retired at 40 and you're 42 doesn't mean you have failed.

You can still sort your finances out and it doesn't matter how old you are, you can always improve your financial situation. And what we've discovered running Rebel Finance school is the 40 year olds go, well, it's too late for me. I can't. It's too late.

To which the 50 year olds laugh they go, well, you're talking about 40 year olds, you'll be fine. I'm 50, it's too low for me. To which the 60 year olds look at the 50 year olds and go, what are you talking about?

Like you're fine, you're still young. Us 60 year olds, we've got it tough. And I had an 80 year old email me, he was just starting to move his investments around, change his money.

It is never too late to make a difference in your financial world. You might feel like it is, you might feel regret for lost time, but you did the best you could and you just have to make changes from now.

Yeah, yeah. And taking control of what you can control.

I always like, I think one of my bugbears sometimes in how financial independence can be framed, not always by people in the community, but sometimes is. It's sometimes seen as retirement or nothing. And like early retirement can be great. But even if you just FYI, I.

Can tell you it's pretty.

The Nintendo will come back to. Some of your travels have really, really given me fomo. But yeah, it's. You can have all sorts of different versions of it. Right.

Is even just sort of taking control of your finances at different points in your journey. Did it sort of change your life along the way as well as that end goal?

100%. Because then you start being able to make different choices. You've basically got three main levers. Spend less, earn more, invest your money.

So we pulled all three at once because we were kind of excited about this.

We get a little bit obsessed about things, don't we?

Maybe. So we got our expenses down, we started investing and then there was basically this opportunity arose from Katie at work.

And it was your boss's fault that it happened?

Oh, it was fully my boss's fault. So a lot of people were leaving my company. I used to work for Deloitte. I was an actuary and, you know, a consultant actuary for insurance companies.

And my boss had noticed a lot.

Of people were leaving contracting to make extra cash.

And he said, the problem with this, Katie, people are not thinking ahead where they want to be in five years time. You really want to think where you'll be in five years time. So he really got me thinking of, okay, where do I want to be in 5 years time?

And we had just discovered this idea of financial independence. I was like, oh, I want to be not working whatsoever in five years time. I'm definitely going to leave. So I can.

I managed to triple my income in by doing that one move. And a lot of people say, well, the only reason you were able to do this was because you earned a lot.

It's like, no, we earned a lot to be able to do it.

It's like just thinking about it differently as well, that it was something that we were so focused on and something that was very important to us, that we spent hours plotting and scheming and we go on walks around the town that we lived in trying to figure out how do we accelerate our way there.

At that point, Katie had to quit her job without having something to go to because they wanted people short notice. So we had to hand in our notice and take the risk that there wasn't any work to go to. And we did that because we worked out.

We had two years of Runway. So even if we didn't earn anything, if Katie didn't work for two years, we were going to be okay.

So our savings and our investments, we were nowhere near financially independent, but we had enough that we felt secure taking that risk.

You had the stability to make a big leap, which you couldn't have made otherwise. And that big leap was part of what propelled you on the journey.

Yes.

And it didn't feel like a risk at all because the fallback plan was, oh, I go and get a normal job, like a full. A full time job.

Okay. Which is where we were to begin with. Go back.

Go back with my tail between my legs and be like, hey, can I come in?

Sorry I did that.

All is forgiven, right? Thanks, team. Okay, let's talk a bit more about the earnings side because I know people have questions on that.

So if that's one of the big levers, you can pull the Earning more because, I mean, I did my due diligence on you guys and I do think, you know, you had very decent incomes but it wasn't like crazy stuff. So run me through Katie, we'll start with you and then we'll come to you.

Alan, what you were earning and how you leveraged that up to make the most of it.

When I first started at Deloitte, I was earning 27,500. I think it was 28 and a half thousand, thank you very much. Okay. Actually our big goal for our money together was we wanted to own a home together.

That was such a big focus, wasn't it? And Alan had just recently gone self employed so we couldn't rely on the mortgage companies were not going to look at his income.

So it was solely done based on my income. And I was doing my professional exams and every exam I passed, I got a pay rise. So I was incredibly focused on passing those exams.

I was very diligent, I was studying all the time.

We worked seven days a week in exam period for probably two to three months because that was the focus period. And Katie would study for the exams at the weekend, I would work on my business at the weekend. And we felt like we were both in it together.

So we worked hard for a period of time to make that happen. But it paid off with the exams.

Over time I got the pay rises from exams, pay rises from promotions. By the time I left Deloitte, I think I was on about £85,000 a year. So yeah, tripling my salary, that, that is a decent chunk of change.

But that was short lived as the boost to get there. And we've struggled with this a lot.

We want to inspire people and we don't want them to think, oh, okay, so you're on 240 grand a year, therefore that's how you could do it. I'm on nowhere near that money. Of course I can't do it. So we've always really struggled with how we tell this part of the story.

Because you don't have to do what we did. You don't have to live how we lived. You don't have to retire and quit your job as young as we did.

But please take control of your money and do something differently and use the steps that we took. Regardless of where you're starting from. The same steps apply as I say that and how much I earn.

To some people that feels a huge amount of money, to others it doesn't. It's all a matter of perspective and I just really Want to get people to understand that that was something we were focused on.

And that is not the only reason we were able to do what we did.

We did not achieve financial independence because of the big salaries. We earned the money to achieve it. And I think that's what we want to say, people. So if you're listening to this going, I could never earn that much.

Well, maybe you could earn more. Maybe you could ask for a pay rise. Maybe there's a different career path, maybe there's a different job. Maybe we could help inspire you to earn more.

Because every extra dollar or pound that you earn, you can put that away and get it working for you.

That earning side of the equation is. So it's where we have a load more mental blocks. I believe, like it's, it, it can conceptually. And applying the idea of, of spending less.

Okay, I can get that.

I can say, okay, maybe I'm going have as many takeaways, whatever it is, but the idea of earning more, then you start to have questions of like, self worth and what am I worth and what should I ask for and do I really have those skills? It's challenging in, in a different way. And I think one that's much harder to face up to.

And going back to talking about beliefs to believe that that's possible. We just want to inspire people to think, how might you earn more? Not just go, well, I can't earn more, of course I can't earn more.

Well, I think very much what you were just saying before as well, Katie, when people, you know, it's so tied up in those feelings of self worth. And I think that's one of the reasons why it's really good to not see it as this black and white.

You know, you've achieved financial independence or you haven't.

Like I've put out videos before on, you know, things like the levels of financial freedom and how each level is so worth having and you can't get from level one to level five, you have to go up each one. And I look back at my own journey and I'm, I'm still building, I'm still doing my thing.

But even to be, you know, debt free, $1,000 in savings, right?

And then you're feeling more secure and you're making decisions out of a secure place, and then you're like, okay, I'm going to get a pay rise and I'm going to start investing and then you can maybe go for the job that you're not sure if you're going to get. It, but you're able to make that big swing that can make a big difference because you're operating from a place of security.

And then I was able to launch my business not knowing if that was going to work out again, a big swing because I had six months saved up and I could survive. And every big swing I've made along the way has been made possible by smaller swings before it.

And I couldn't have achieved any of the other things that I did. And it's, it's, it's levels. But anyway, Ellen, your income as well, so you started a business as well. Was that crucial to your earning?

Was that part of your journey?

And I was then left with, I need to find another job. So my mum forced me to sign on at the job center to get benefits. And I had to report to the job center once a week.

It was gray and dark and it sucked the life out of me. And they did an amazing job. Cause I never wanted to go there. It was the last thing I wanted in life. But I couldn't find a job I wanted.

And so I thought I'd start my own business. Great timing. Yeah, I was thinking that, but you just have to have a go. And the first two years weren't great.

I learned a huge amount and then it slowly grew after that. And I was never particularly in it for the money. Like the most I'd make is 60, 70 grand a year.

I earned good money and I did something I loved and I taught courses, I helped people. And then the funny thing was the business kept going without me.

So when I retired, it kept going and I kept having a small amount of income after that afterwards, which was fantastic. And it spread around the world. And the courses we teach are now run in Arabic and French and Spanish and all over the globe.

If you could sum up my entire career and life, it would be, I've learned something that's helped me and then I've tried to share that with people. So I learned confidence, tried to share that. I learned how to present was like, that's good. And I made lots of money teaching people how to present.

Then I learned Time management, because I was very inefficient. And I was like, this is amazing. I get so much done. So I taught other people. Then I learned to start a business and taught other people.

And then eventually finances. And it seemed logical to me, like, ah, we've fixed our finances. I never had to work again. This is amazing.

Alan always asks difficult, challenging questions.

I'm annoying.

That's what I wanted to say, but I thought I'd be a little bit more polite. Alan asks really annoying questions that push you and stretch you to think about things differently.

Which in hindsight, you're like, okay, that was a good question. Thank you for pushing me. One such question has led to one of the greatest joys of my life, which sounds really cliched. Anyway, it's true.

He said, what can we create rather than consume?

Everyone was watching Netflix. They were like, how can we defeat Netflix in lockdown? And I thought, this is the worst spending of your time ever. Like, forget consuming.

What can we create. What can we create?

And that's when Rebel Finance School was born. It was this free course that we just put online. It's like, well, we've figured out some stuff about money. I think we can help people.

It's completely free. People are always like, what's the catch? Is there going to be some kind of upsell at the end?

And we get to the end of me, like, well, thanks for coming. Have a nice life. Let us know how you get on. And they're like, oh, I thought there.

Was an upsell or something. No, we just give it away.

We just want to volunteer our time to help because you got to have.

Something to do in retirement. Retirement in inverted quotations.

Your version of retirement is very active.

Yeah, I've never worked harder. When we're running Rebel Finance School, it just.

We are going to have a break afterwards.

Yay. It's. It's all consuming in the best of ways because it's. We get inspired and we want to. It helps. We get to learn as well.

Because you can't teach something until you fully understand it. Yeah. Feeling like you're making a difference. Feeling like you're doing Something significant in the world.

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It's everything I wish I'd had when I was starting out. Head to Francisco Co NZ/Invest. I'll also pop that link into the show notes for you. Right, back to it. Walking back a smidge then.

And you said three levers. It was earning more, spending less and investing. So let's spend a little bit more time on those other things.

Because you did also very much commit to spending less, right?

Yes.

Because of course you can spend any amount of money in this world.

Really easy to spend a lot.

It is so fun. It is fun spending money. We can all.

Yep.

So in that case, how did you live a good life while spending less? What were sort of the main levers that you pulled?

We kept our base costs very reasonable. So the three main categories that we think of as the biggest categories most people have is your housing, your food and your transport.

We lived in what was supposed to be a starter home, you know, like a two bed flat. People around us like, why aren't you going up the levels? Why are you not going to the three bed house, to the four bed house?

The family literally said, when are you moving into a proper home? What is improper about my house? I love this place. Back off.

So we had a very small mortgage on that. Our outgoings on our flat were very low. Transport. We had a little Skoda Citigo. Do you have Citigos here?

I'm not sure. I do have Skoda.

It's the smallest one.

Smallest ones. And we loved that.

And it was very inexpensive, secondhand and all that jazz.

And then food.

We at the same time were very health conscious and were cooking in, making salads, making big batch cooking of food and putting in the fridge and just take a box each day for lunch and for dinner. So we kept those base costs very.

Low, didn't turn the heating on until mum came around for Christmas.

And people like, oh, it's so sad living like a small life. I'm like, excuse me. During that time we traveled to Thailand, Estonia, Ecuador. Like we spent what to us at the time felt like a lot on travel.

And people thought, well, how are you able to do that? Well, I've chosen to keep my base.

I spend nothing during a normal week.

Do you know what's funny on that is I've thought about that one a lot because I'm constantly trying to sort of live the best life I can in the smartest way I can do.

And I think the big thing about that is when you've got those core costs down, those core costs are the ones that you're locked in, you must pay no matter what changes. Whereas those one off things, and they've done studies on happiness, having something to look forward to, experiences, right.

Every sort of roughly three to six months, that's huge for your happiness. The anticipation is part of the fun. And it's also like a one off cost.

If you spread that across several weeks, it's actually pretty low across those weeks. And it's easier if you run into trouble to say, actually life has happened, can't do that now, what a shame. Sad about it, but it's gone.

Whereas those, if you moved house, it's quite hard to move house again if life changes. And so I think the big thing about that is you're optimizing for being smart with your money, being smart with your happiness too.

Because the smaller life you can be perfectly happy with like you say you loved your house and those, those big things to look forward to. And that actually across all of your other spending, actually not that big of a spend, even if the lump sum price tag might look big.

I think it's a really smart way to kind of hack your brain as much as anything else, right?

It really is. So we had those three levers, levers, I forget which language I'm speaking sometimes. And so it was keep the cost low, up the income.

And we called that create a gap. We actually wrote a song. One of our retirement projects, we launched a band called the Revolutionaries. It's on Spotify. If you want to listen.

There's a song called Create a Gap, which the key line is create a gap, invest your dough. Over time it grows. Anyway, I can't sing, but I wrote the lyrics with Katie and it is all about the gap.

If you have a gap, well, you can do stuff with the money. But many people don't have a gap. They spend everything they earn every month and they're on a zero gap.

Some people have negative gaps where they're spending more than they earn and they're putting it on a credit card and that leads to disaster over time financially.

So we had a huge gap and then we took a everything from that gap and put it into index funds in tax advantaged accounts, which I know you don't quite have the same accounts in New Zealand we have, but you do have Kiwisaver and you do have access to probably better index funds than we have access to in the UK.

And PI funds for those who are high earners. It helps a little bit.

Yes.

Yeah. No, I think that's really smart. It's the odd thing, isn't it?

It's simple, it's not necessarily easy, but you know, if, if you can find the way to get yourself mentally invested in it, that makes it a lot easier. And so spend less in the way that works for you, earn more, invest it and then stick with it for a period of years.

How long did it take you from the period of when you thought, right, we're going for this to hitting your financial independence number?

Zero to a million was probably 10 years.

Wow.

Which is incredibly quick in some ways.

I think I'd say to everyone listening to this, people always overestimate what they can achieve in a year and underestimate what they can do in a decade, but you have to stick at it. And I think that's the bit.

If you set up the systems, you create the gap, you set up auto investments, then you just forget it's happening and go back and live your life. And if you have an exciting enough life, time will pass really quickly and then you'll be there.

And we were very consistent with it and it was never. People are like, well, how did you put up with all this sacrifice for so many years? What are you talking about?

We lived this wonderful life and we were so excited to keep building. We were focused on buying our freedom. Every time that we bought, used that gap to invest, I bought a little bit more of my freedom.

And it's addictive. And we were playing it as a game together and we'd spend Hours figuring this stuff out. It was so much fun.

You go into a store and you look at the stuff and you go, do I want this and plastic thing or do I want freedom? When you say it like that, you're like, I don't really want the plastic thing. Give me freedom, Give me freedom.

And every pound, every dollar was spent on freedom. And it's a grand concept. Basically, it just means putting it in an index fund and allowing it to grow over time. That's what it means.

But it bought our freedom and we retired. I was 40, so 28 years before standard pension age in the UK. I bought 28 years of my life back to do anything I wanted with.

That's really cool. And the thing is, as well is, I think sometimes people will hear that million dollar end point and they think, well, how could I earn that much?

But I think the key is you don't have to. Exactly. The investing right is pushing you along as you go. Talk me through a little bit of that.

It's compounding. And then people think, oh, compounding takes time.

Yes, it does.

However, it's working from year one. So you invest your money and your money is working for you.

I got a DVD ROM and the course was how to write a movie in a month. It's a cool course. I always wanted to write a movie, but I never had a month.

I am nothing if not stereotypical.

I went to Hollywood, wrote a movie on the plane on the way home, we did our finances, laptops out, spreadsheets out, and we had spent more money than we had ever spent. LA is expensive if you've not been there before. We blew a lot of cash. It was incredible. But the money was gone.

Then the second step of the finance meeting is to do your net worth. So we checked to see how our investments were and our net worth had gone up.

We were worth more having not worked for two months and spent more than we'd ever spent before on our way home. And that just blew my mind. I'm there going, how is this possible? It also then brings up the question of why are we going back?

Why, Especially with the weather come on, we're not known for the best weather in the uk.

It's very grey, very grey. So that was the point that we went, okay, there is something to this investing stuff.

And those dollars in the field were working far harder than I ever could and they have continued to do that. So we retired with a million invested. Now seven years later, we're worth 2.7 million invested.

And that's due to compounding and growth and the continued money at work.

So when you say people are like, well, how do I save or earn my way there?

You don't.

You don't. You invest your way there. If you try and save your way.

There, I take you forever.

That's not growing for you. That's barely keeping up with inflation. You have to invest it to get it working.

Investing is your superpower.

Yeah.

And I think as well, yeah, I have people get in touch with me and they'll be like, oh, it's, it's been about eight months and it hasn't grown very much. And I'm a bit worried, you know.

Eight months, yeah.

And in the first year or so that's often the case. Right. You give it a bit of time.

It's hard, isn't it? As humans, we want to see the results. And you're like, well, I've tried and this is important to me. This is money and this is money I've worked for.

Where are my results? And it takes some faith to say, okay, well this is for the long term. Well, that's what we think about, of investing, of investing for the long term.

Buy and hold forever, live off a small amount when it comes to the point that you want to live off it.

And it does take some faith to say, okay, I know this is for the long term and to put up with that volatility, that change in prices in the short, perhaps to medium term, and just knowing that over time, there's never been a time in history over a 14 year period where the stock market hasn't gone up.

I think I want to say to everyone listening to this, you can improve your finances. But the really fascinating thing is an extraordinary result is built out of routine, mundane actions.

So our extraordinary result of retiring early was Bills out of chatting about tax as we walked around Basingstoke. It was built out of investing in a simple index fund. Really boring. It was built out of working, going, how can we get a pay rise at work?

How can I land a new client? How can I do this? Make an extra phone call? The extraordinary is rooted in the mundane. But everyone wants the big victory immediately.

And I just keep saying to myself, primarily, but anyone else who'll listen to me, just do the simple boring things. And simple boring compounded over time creates magic. But we just don't seem to want to do it. Cause we, like, there must be a secret.

Someone tell me the secret. Must be a secret. These rich people, they must have a secret.

Tell me you're saying boring that. I think what you mean by boring is it looks unextraordinary. And if you can fall in love with the boring in inverted commas, we didn't see it.

Well, it's not exactly thrilling, is it? Investing in index funds.

Excuse me.

It's not like riding. It is cool and I love it, but it's not like riding a roller coaster or some kind of winning the lottery.

But it can get you to riding the roller coaster.

Exactly, exactly. But that's what I mean by it's just the simple, mundane things. And you won't feel.

You're not going to feel the big thrill putting your first hundred pounds in an index fund. Maybe you will, and then you'll be a week later, like, why hasn't it worked? The Donegans told me it would work. Why hasn't it worked?

Yeah, wait a while, keep doing it. And over time it gets there. But the extraordinary is rooted in the mundane actions that you take day to day.

That's a real. And they stack. They stack to be bigger than the sum of the parts, which I think is the real big thing that people often miss.

Katie, is there anything that was sort of along the journey that you feel was the biggest lever that you pulled? Like the number one thing that you would say, if someone else is wanting to get started, what would be the big area? You'd say, focus here.

It can have a bigger result than you think.

The biggest lever for me was accelerating my income. That's not necessarily reproducible for everyone.

Although going back to what we were talking about earlier, I would challenge you to challenge that assumption in terms of what people can do to make progress. It's not rocket science. Spend less than you earn and invest the difference.

And for us, looking at where our money goes, and that's what we teach people at Rebel Finance School is like, people say, I just don't know where the money goes.

And we say, shall we look?

And we look. And pretty much everyone that looks at where their money's going finds waste, finds things. I didn't remember I even had that subscription.

I don't even like that thing. Why, why, why do I still have that thing? And it can look like small amounts, but it's kind of a.

A function and a mindset of, I'm looking after my money, I know exactly where it goes. And then if you. If you don't know how much you're spending, you can't know what your target is to get to that freedom.

Or how do you know how much spending you need to cover? You just don't know. And people will you ask someone how much they spend, they will add up their fixed costs in their head.

They'll say, well, my mortgage or my rent is this. I spend this much on my car, I spend this much on food. Add in a bit of other stuff. They always forget things. There's so many other little bits.

Oh, it was that person's birthday. Forgot about that. Oh, yeah. What about the gym? I forgot that. Oh, what about this? What about that?

And just having that firm grip that is such a foundational piece.

And I think people dismiss it as something that's, oh, that's not sexy, that's not exciting, but it's so important both in terms of getting your spending under control, if you feel that you need to, and to set that target. It's so. It's like the beginning and the end of the journey. It kind of comes full circle.

Absolutely. Alan, what about.

Was there anything while you were on the journey that you were like, this is not technically a smart use of my money, but I'm doing it because life is for living.

I like coffee. A good Americano. I don't need lots of milk in it, thank you very much. I just want a really nice Americano.

So I would still spend money on a nice coffee out, because it was. It was for me and it made me happy. Speaking my language, not the smartest financial choice. I could probably could have made it at home.

I could have done something different. I could have made my flask of coffee. I could have done that. But it made my life a little bit happier having those coffees. And then the holidays.

The UK is grey and wet most of the year, so we needed to escape, so we would always book holidays. We did it in a fairly smart way. We used to Go. Okay. Where's the cheapest flight to anywhere in South America? Non smart decisions. Coffee, holidays.

But it's the things I valued. And that's what we always say to people, is spend in line with your values.

So many people spend money on things that they don't value just to impress people they don't care about.

Stop.

No one cares. Just spend money on things that make you happy, and if you do that, you'll have a happier life and save money.

And even if people do care, do you care that they care? I don't know.

Like I used to. Yes, true.

I definitely do some things that, like, people. People probably think is weird.

I want to know who those are now. You can't say I do weird things and then just leave us hanging.

I have many. Well, moving to Teow Mutu was one. People are very weirded out by that, especially a lot of my old media colleagues. I get a lot of questions.

And you're still happy there?

Yes.

I live next door to horses. It's great. On my lunch break, I'll eat an apple and then feed the quarter.

The horses.

I'm pretty sure my neighbor doesn't mind. I hope they don't have the horses on a special diet.

It.

If they are, I'm ruining it. But, you know, these sort of things, and I'm just.

I think when you have confidence in your own decisions and confidence in why you're making them, it's such a great buffer against caring about what other people think because, you know, within yourself, it's the right thing.

And I think when you take the time to, as you've said several times, being intentional on what you want and what do you actually want, what do you actually value? And when you take the time to do you think about those things, it makes it so much easier to make some of these decisions. Right?

Yeah, it was. It was easy. People would look at our. They knew we were earning pretty good money.

They'd look at our small flat and our small, cheap car and be like, what are you doing? But to us, it was like a symbol of this is what we're about and this is what we're doing, and we know exactly why we're doing it.

I completely relate to what you said, Francis, that this is. It was easy. It was not like, oh, they think we're weird. I was like, yeah, I'm weird. Yeah, I'm doing something highly unusual here.

I'm weird and I'm proud of it.

I was a little bit embarrassed of our car occasionally because it got A lot of scratches towards the end.

Oh, the pizza boy.

There was a pizza boy that drove into our car and he hit every single panel down one side and bounced his bike off. Everything destroyed the side of the car and then rode off. It was like a hit and run. No, we never got the money back. We never repaired it.

So I was a little bit embarrassed with our car. And I would drive. I used to run presentation skills workshops for Microsoft, and I'd park around the corner so I couldn't see my car.

It was a little bit like.

You know, there is a certain image that you're supposed to portray of success. And if you're trying to teach these people and they see you in an unsuccessful inverted commas car, then I think there is that judgment.

I think you need to be aware of how you're perceived, particularly if it affects something that's important in terms of, are they gonna listen to you when you have this valuable information? If they think, oh, he's not successful, why should I listen to him? You know, we all have these judgments about people.

Everything we're talking about today is about helping people design the life they want to live. Because I think success is different for everyone. To some people, it does mean the big holidays. To some people, it does mean the nice car.

To other people, it means time with the people they love around the kitchen table, coffee in the morning with the person you love, reading the magazine or reading the newspaper. I know. Whatever success means to you, money is the tool to achieve it. Money is the destination.

And people look at us and be like, I don't want to be traveling nomadic weirdos like you. Oh, maybe this isn't for me. I'm like, no, you've missed the point. You do what you want to do.

You don't have to be weird like us. You can be weird like you.

Yeah.

Can we make that the tagline for the episode?

I love that.

That is just absolutely brilliant life advice in general. Like, tattoo that somewhere. That's so good. Well, because, of course, now you talk to people about their money lives constantly. And this is.

You know, you first popped up on my radar. I've talked to Ruth from the Happy Saver a lot. Anyone who hasn't listened to her podcast. Absolutely should. We love her.

She has talked to you guys extensively as well. And so you popped up on my radar.

And then so many people have mentioned Rebel Finance School as something that was a game changer for them, and it changed their approach to money, made them sort of figure out sort of the little simple Tools and tricks. And now you're. What was it? 50,000 People.

In the latest intake, 50,000 people from 91 countries are on Rebel Finance School. This year. We have three specific country tax sessions. Uk, USA and New Zealand. We don't even do the Aussies. They're very upset.

We are cool.

The Aussies come and they're like, why has New Zealand got a suffix section and we don't?

Because we're special.

Yes, you're special. Love the kiwis.

So good. But, you know, you really made a difference for a lot of people and I love that.

And I think the fact that you do it for free is just incredible because I, as someone who dabbles in this space, I know how hard it is to do a good course and to put it together. It's actually a lot of resources. It's not free for you guys to put on, is it?

No.

We lose money every year running the course for the services, the mailing software, the online software, some graphics design help, all sorts of stuff. But it's. It must cost us 20 or 30 grand a year to give away this free course. But that's our philanthropic donation. That's our gift to the world.

We gladly do it. We're not saying, oh, cost some money. Yeah, it costs us money. It's a fact. We love doing it.

And, yeah, I mean, ideally, it gets to a point where it breaks even.

It'd be lovely if it breaks even. That's not the purpose. The purpose is to help people.

And if you think people think we're weird for doing it, but what I don't think they understand is if you think of someone who's in their 80s who volunteers at the charity shop, this is our version of that. I'm not in my 80s yet, but it's my version of that.

I have my time free to do whatever I want to do and I choose to spend my time and my money helping other people with their finances. That is what I want to do with my time and money.

And so.

And then when I'm not doing that, I want to go on theme park rides and I want to have amazing brunches and eat nice coffee and travel the world and run along the beach and do all sorts of fun stuff.

So good. All right, then. So, on this latest round, was there anything. And I'll hit you both on this one.

Was there anything that stuck out to you in terms of something that a lot of people could improve relatively quickly and it would make a big difference for their life? I'll Start with you, Ellen. Katie, you're next.

I think a relatively quick one is fees. Fees on your investments. Stolen yours. Come up with your own fees on investments.

They did a study of all of the different factors that could determine whether the fund you invest in is good or not.

So they looked at number of companies, invested, diversity, number of countries, alpha levels, beta levels, all these technical terms that some of them I understood, some of them I didn't. And the only statistically significant predictor of whether a fund would perform well over time was fees.

Wow.

And it's the only thing I've found in the world where the less you pay, the better results you get. Nothing else compares. Coffee, pay less, get better coffee. That doesn't really work in life or go to work. If I do less work, I'll get better results.

That doesn't work. But investing, do less work and pay less does work. So check the fees on your kiwisaver.

And you have some total world funds in New Zealand that you can pay 0.06 or 0.06% fees. You have very low fee ways to invest. And if you wanted one thing, check what you're paying. If you're paying over 0.1 or 0.2, it's too much.

You should be paying less.

Love that. Solid.

Agree.

All right, Katie, he stole your thunder. Have you thought of a new one in terms of.

It's not necessarily a quick win. It can be something you need to work at over time, but aligning with people around you and getting on the same page together.

One tip for that, don't start with the details and the numbers and the spreadsheets and, oh, I heard this woman, Katie, on the podcast, she said, you must track your spending. Don't start with that. Start with what life do you want to build together. Start with the vision, start with the future.

Start to think what would get them excited.

And then slowly, maybe later, a few conversations later, start to introduce the numbers and say, hey, how about we could set our finances up so that we could do more of that thing that you love. So that can be a massive unlock for people. And we.

Some of the comments I get that we get from mobile finance school participants that I'm most proud of are like, yeah, the investing weeks were great and I learned a lot, but being on the same page as my partner with this stuff changes my life. The real game changer. I feel emotional thinking about it because it is such a big thing. It's so important. And I've.

We felt the pain of us not being Aligned with money, with all sorts of different things.

And when you are lined up and when you are going on two three hour long walks around bathing soap because you're so excited and you're so on the same page and you're so working together, I want people to feel that and have that in all areas of their lives. And I know that is. That takes effort and it takes work and it's worth it.

You can walk in any town other than Basingstoke and have the same.

We don't all have to go to Basingstoke to this, actually.

Avoid it if you can. No, I love it. Amazing. Stoke is beautiful. One pro tip question for everyone listening.

If you want to ask your partner, if you were banned from working, what would you do with your time? So actually, those type of questions where you ban someone from doing something forces them to be creative in another area.

You are living the values, I think, that you have shown other people. You have built up the life, you have built up the freedom, and you are doing it, which is incredible.

And I was complimenting your hoodie earlier and it came from within. Nintendo Land. Yeah.

Nintendo World and University.

Nintendo World, sorry.

It's quite out there. I do appreciate that. I think when I first met you just now, Francis, I saw you glance down at the. I heard you thinking, what's going on?

No, I'm into it. I'm so into it.

Yeah. And I was like, oh, should I wear this? And it's like, do it. It's you.

It is you.

It's like personality and like being you. And I think so often we kind of hide some parts of ourselves because we're like, well, how are people gonna think? But more and more.

So I'm just like, we're more and more embracing. We bought our freedom and our investments have gone up and we wanted to live life.

So Katie was 40 a couple of years ago, and I just wanted to do something amazing. So I pretty much booked every adventure we could.

We went to Disney World, we went to Las Vegas, we went on safari in South Africa and Namibia and all around South Africa. It was incredible. We traveled to New Zealand and Australia and we just wanted to live life.

Yes.

And there are things that people call once in a lifetime adventures, which I started to think, well, I wonder how many of those we can do a year.

And this is the thing, is you are now able to live. What is it? Ramet Seti, your rich life thing. And this is yours.

And you're literally here hanging out in this glorious hoodie, which is a memento from some of your great adventures. I love this idea of you can just go out there and grab life. Do it. So this is your retirement life now.

Basically helping other people with the finances, getting meaning from giving back and then traveling around and having amazing adventures.

That explains it pretty well.

That's our version of what we wanted to do with our life.

How good?

Any improvements? Is there anything else you still want to do? I feel like that's ticking a lot of boxes.

There's always a new frontier to explore. I had a few health issues recently.

I'm heading towards 50, which I know the 60 year olds don't think is that old, but to me I'm heading towards 50 and I'm thinking, okay, health is one of the next adventures. I want to learn more about, work on and improve as I get older.

We are definitely going to focus on health and looking after our energy because if there's one thing I've learned, people say I don't know how you do all this stuff like how do you have the energy, how do you have the time? And the thing is, quite often it's not time, it's energy that goes first.

So if you think of an exhausted parent that's worked all day and then looked after the kids.

Oh, when I look in the mirror, yes,.

Continue.

And then 8pm comes and you're wiped out and you've technically got time but no energy and energy is the limiting factor for most people. It's not time because then you end up sat on the couch like doom scrolling TikTok or just so you've got.

A camera in my house. Is this what you're telling me? What's happening here? This is feeling way too on the nerves.

So we've. My idea is for me, I want to focus on having energy because I get annoyed when I get tired. And I think that is the sign of a life you want to lead.

If you are having the Sunday night blues because you don't want to go back, something in your life is not working and we need to make changes. If you get to the point where you are annoyed that you're tired, then you're living the life you want to live.

The only next question is can you get more energy? Can you have more energy to have more fun during a day?

That's really cool.

Okay, so if you were to go back to your past selves at the beginning of this journey and you were going to say one thing to either do differently or do more of that, you think other people could Learn from Katie, starting with you. What do you think that would be?

To work on my happiness along the way. As much as I was working on my finances, I deferred that and still working on it.

It's a lifelong thing and it's something that I put off because it felt like messy and scary to look at some of the thought patterns and beliefs and behaviors that I had and still working on that now. And I wish I'd started earlier.

What has helped with that so far?

I think the thing I'm working on at the moment is going back to the fundamentals. There's a genius book called the 7 Habits of Highly Effective People by Stephen R. Covey.

And I think I'd lost sight of a lot of those fundamental things. So he talks about beginning with the end in mind. He talks about being proactive. He talks about being.

Not relying on other people for how you feel about yourself. And we talked earlier about how I would compare myself to know my worth and still do to some extent.

And coming back to those fundamental principles and remembering that it's. He's got this wonderful line in the book saying it's an inside out job, meaning you start from the inside.

And I think I still haven't quite built the strong core of who I am and what I'm about. So that means that I allow the world to dictate how I feel about myself rather than being strong in how I feel about myself.

So that's what I'm working on at the moment. And that book has been very useful.

I love that. Aren't books brilliant? You spend like 25 bucks and sometimes they're fine and you're just like, well, okay.

And other times you get like a little bit of an earthquake in terms of how you see the world for 25 bucks. Like, are you joking? What an incredible investment.

It's so good.

Love that. All right, Alan, your thoughts.

Number one, skip all the heartache of weird investments and just bought a total world index fund at the start.

If I could go back 25 years and tell myself just forget everything and put it in timple Total Word index fund and leave it, we would have been done years earlier. It would have just been so much easier and so much less heartache on the journey.

But we wouldn't have the stories that we now tell on Rebel Finance School to help people going, like, don't make all the mistakes we made. We made a lot of mistakes. It still turned out well. We still have an incredible life, but here's all our mistakes.

So I think the main one is just invest in a simple total world index fund from the start and then remember to live your life along the journey because lots of people forget, like, well, I'm just waiting for financial independence. Stop waiting and live your life. It's not binary. And actually, if you're not having fun now, having a million in the bank is not going to change that.

If you can't have fun in your life right now, that's what we've actually got to fix. Then. If you can find happiness along the journey, I'm pretty confident you will be happy when you get there.

If you're sad along the journey, I'm pretty confident you'll be sad when you get there, because you will still be you, no matter the number in the bank. So let's work on your happiness on the journey and then you will have a good time.

There is such a beautiful world to live, explore and people to meet.

I love that. What a nice note to leave things on.

All right, if people want to know more from you guys and maybe join Rebel Finance School for next time, where can they find you?

Well, they don't necessarily need to wait till next time. We run the course live once a year. But when we leave the videos up for months and months so people can find us, just Google Rebel Finance School.

Yes, the New Zealand session is up right now that we did with Ruth the Happy Saver. So just Google Alan Donegan, Katie Donegan, Rebel Finance School. Like, we're not very difficult to find. Actually quite easy to find us.

You're probably going to have to try to avoid us now you've heard of us.

Yeah, the algorithm is going to start pushing it. Guys, I have loved this chat. This has been so much fun.

Every time you come back to New Zealand, please come back to my studio and let's just do this again.

We would love to. It's been incredible.

Now, look, if you have loved this chat as much as I have, send it to a friend. Then we can all level up our money together. Until next time, have a great day.

This podcast can only give you general information about how things work in most situations. It's not individual financial advice. If you're after that, a financial advisor is always the best bet.