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In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.

Millionaire Mommy Next Door

Billy and Akaisha Kaderli

Known to the blog world and on national television as The Millionaire Mommy Next Door, Jen Smith went from working a minimum wage job as a college drop-out to financial freedom as a debt-free, self-made millionaire by age 40. Since Jen didn't inherit wealth or win the lottery, she serves as the kind of example we admire. She has graciously given us time for an interview. Read and benefit from her wisdom below!

You and your husband became financially independent at the age of 40. What was your biggest motivator to achieve this lifestyle?

Initially, FEAR motivated me to achieve financial freedom. I didn't want to repeat my parent's experiences. Money was a constant source of tension and stress when I was growing up. My parents were intelligent, capable and hard-working, yet they lived paycheck to paycheck. My father had always been, and continues to be, a workaholic. My siblings and I always wished that he would work less and spend more time with us. After they divorced, I watched my mom struggle to raise me and my two siblings. We often survived on free lunch tickets and food stamps. I watched my mother approach retirement age with much anxiety over the fact that she hadn't saved for her golden years. In the end, after her successful bone marrow transplant -- and despite the fact that my husband and I promised to provide financially for her -- she starved herself to death because she was terrified of living the rest of her life financially dependant on others.

Jen and her husband on the island of Kauai

Jen and her husband on the island of Kauai

When I was 30, I told my husband, “I don't want to repeat my parents' experiences. I want to be financially-free before we adopt our child. I want to have enough money that we can afford to put our family first – to work only when we want to”. I read books, played around with retirement planning software, and learned to be frugal and downsize our lifestyle. I learned how to make money work for me instead of the other way around.10 years later, at age 40, we were 100% debt-free and we had accrued over a million dollars. We then adopted our daughter. Melia now has two parents that have the financial resources and the free time to put family first.

How long has your website, Millionaire Mommy Next Door, been in existence?

The original website, began in July 2007. Unfortunately, the site was hacked into in October 2008 so I'm in the process of starting anew on my self-hosted domain at

You seem to be very generous in sharing your practical financial wisdom with your readers. I love your comments: "I learned to make money, save money, invest money and spend money in in ways that I find rewarding and fun. No one else cares as much as I do about my money. " Can you explain simply what your investing style is?

Thank you. I've experimented with several investing styles using a diverse portfolio of stocks, mutual funds and ETFs. The strategy I've had the most success with employs the use of momentum investing. I currently use the quantitative approach offered by NoLoad FundX. I use their Upgrader mathematical model to move my holdings incrementally to the new market leaders as they emerge.

The whole family on a recent trip to New York City

The whole family on a recent trip to New York City

Conventional wisdom suggests that because you can’t predict leadership changes, you have to ride through market swings with a diversified portfolio -- including holdings that underperform for a long period of time with the hope that they will add value later. Instead, I hold the positions that do well and upgrade the others. I use the Upgrader scores to tell me when to enter and exit each position. I don't aim to forecast the market -- I look at what the market is doing, not what the market might do. I enter the market after a trend properly establishes itself, then jump on the trend and ride with it. If there is a persistent turn contrary to the trend, I follow the mathematical signal, exit that trend, and upgrade. This might sound tricky and time consuming, but actually, it takes me only an hour or two, once per month.





I've also kept a smaller percentage of our total portfolio using the more popular, long-term passive strategy of buy-and-hold index investing.

Does a market such as the one we have been experiencing change your investment plan?

When even the highest Upgrading scores came in as negative numbers, I personally chose to exit the market. Why? Because this indicated a downward trend in the market. Consequently, since early 2008, I've held a lot more cash in our portfolio than I ever have before.

Family at the New York Stock Exchange

Family at the New York Stock Exchange

How do you spend your money in ways that are rewarding and fun?

We choose to live the good life, not the goods life. We identify our personal and family values and spend accordingly. For instance, we value our health and our planet, so we spend more to purchase organic foods. We value recreational pursuits, so we budget generously for fun family activities, hobbies and personal interests. We love to travel, so we allot a hefty percentage of our annual budget to worldly adventures.

We balance this generous spending by cutting back or eliminating the budget categories that are personally less rewarding. For instance, we buy our clothes at consignment stores, drive a 10 year old car, and live in a “just the right size” home.

In other words, we are do-ers, not hav-ers.

Share with us your best money-saving secret.

In many cases, it makes financial sense to rent your home rather than buy it. But regardless of whether you decide to rent or buy, avoid the temptation to live in a too-big house. You can save big money by reducing your total housing expense – rent/mortgage, insurance, tax, maintenance, repairs, utilities, furnishings – these can add up to big money! Don't aim to keep up with the Joneses – aim to be like Goldilocks and live in a home that is just right.

What is your greatest extravagance?

I enjoy a standing weekly appointment with my massage therapist.

How do you figure the dollar amount to spend each year?

We review and modify our lifetime financial plan (with a tool found in Microsoft Money software) each year. This tool enables us to see if (and how) our money can last throughout our lifetime. We then tweak our budget to match the total annual living expenses that the tool indicates we should be able to safely spend. The Lifetime Planner allows us to play around with lots of “what-if” scenarios, both today and in the future.

Do you own a house or rent? Why?

We sold our last house about 5 years ago and have been renting ever since. Why? Because we could see the handwriting on the wall as home prices rose to irrational and unsustainable heights. People thought we were crazy at the time for “throwing our money away” as renters. Now that the housing bubble is clearly burst, I fight the urge to tell them, “I told you so!”. We invest the difference between the mortgage payments (plus insurance, repairs, taxes, etc) we had been paying as a homeowner and the rent we now pay. Selling our home, downsizing, and renting has contributed significantly to our growing net worth.

As home prices plummet in today's market, we're watching the price-to-rent ratios. When this number drops once again to long-term historical norms, we'll consider buying again.

Jen in her early years as a dog trainer

Jen in her early years as a dog trainer

From your website, I understand that your most difficult challenge to financial independence were unexpected events. How did you manage them, and still maintain your goals?

Plan for the best, prepare for the worst, keep your focus on what matters most and go with the flow. And through it all, CHOOSE to be happy, no matter the circumstances. Research has found that happy people make more money.

From your experience in receiving countless letters from your readers, what is the greatest hurdle preventing others from achieving their own financial independence?

Mindset. Achieving wealth is often more about a mindset than it is about math. For instance, I can remind people that they need to live below their means until I'm blue in the face. But if they don't have their mind and heart wrapped around their goal, they won't do what it takes.

People often tell me that they feel stuck. I hope to inspire, educate and empower others to identify their dreams and learn how to reach them. I hope to serve as someone who reminds people that anything is possible when you seek solutions.

I create treasure maps that help me visualize the life I want to lead. I paste magazine pictures and words onto a poster board, then hang it over my computer and update it as necessary. The more familiar and comfortable you feel with your dreams and goals, the more your thoughts direct your actions. When your actions change, your life circumstances change.





How do you plan to pay for your child’s higher education?

We are educating and empowering our daughter to figure this out WITH us. She is being raised by two entrepreneurial role models who are eager to coach and mentor her to discover her own path to financial freedom. Besides, neither my husband nor I finished college, so we'd be hard pressed to tell her that she needs to get a degree in order to succeed.

Learning how money works begins early!

Learning how money works begins early!

How do you teach your child fiscal responsibility? How do you help your child handle peer pressure in her world?

Modeling healthy personal finance behaviors is the key to raising money-savvy children. Our daughter is only three, but already she's learning how money works. She loves shopping at the Dollar Store for stickers, coloring books and toys. She knows that she needs to earn a dollar before she can go shopping, so she'll offer to dust the living room or take some of her old toys to the local consignment store to sell first.

We talk openly about money with her and always will. Children learn from our example. If we behave as though money management is painful, secretive, or confusing, we thwart our children's financial future. Is this what we want for our children? Of course not. We all want our children to acquire the tools necessary to power their own future financial independence and freedom. Unfortunately, few high school students graduate with any formal personal finance instruction. Children receive the majority of their financial literacy from their parents.





What do you do about health insurance?

We keep our small plumbing business around so we can qualify for a group policy. This eliminates the pre-existing conditions clause. We have an HSA account with a high annual deductible to reduce monthly premiums.

What would you say your biggest challenge has been in maintaining your retirement goals while raising a family?

Some of our living expenses have gone up, but we've managed to cut back on other budget categories to compensate. The biggest bump up for us has been preschool tuition and the additional plane ticket when we travel. Now that she's over two years of age, she requires a full-fare seat.

There are plenty of ways to raise a child well AND frugally. For instance, we buy her clothes and toys at a consignment shop and share restaurant meals with her (they're usually over-sized, anyway).

What is the #1 tip you could give other parents who want to retire early?

Involve the entire family in the planning and process. When the entire family is on board, keeping to a budget becomes easy. The family shares a creative, problem-solving energy and everyone feels empowered. Kids often think “outside of the box” better than adults do. They will surprise you with their remarkable insights and ideas.

One other thing: I don't think parents should work overtime (over 40 hours a week) to reach their early retirement goal. Kids grow up so fast and they really need their parents around, today and everyday. My dad was a workaholic so we rarely spent time with him. That stunk.

Who are your heroes in real life?

People who have a dream, follow their passion, and share their talents with others. Everyone who volunteers or supports a humanitarian cause. We all hold the ability to make a positive difference in the lives of others within our worldwide community. We can all be “everyday heroes”!

In one sentence, what is your philosophy on life, or your motto?

Happiness is a choice -- if you don't like the story your life has become, tell yourself a better one!

We would like to thank Jen for her generosity in answering our questions and if you would like to learn more visit her at

To read more interviews with Expats, Early Retirees and Interesting Characters, click here

About the Authors

Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on

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