In his early 20s, Bobby Hoyt was establishing his post-college life. He had a decent job as a high school band director, making $50,000 per year and was slowly paying down $40,000 of student loan debt. He was planning a wedding, thinking about buying a car and wondering if he had the money to buy a home.
He had no idea that a conversation held during a weekend waterskiing trip would forever change the trajectory of his life. When discussing his student loans, on which Hoyt was making the minimum required payment of $350 per month, a friend of a friend — who turned out to be a well-off entrepreneur and savvy money manager — offered him sage advice on how to pay off debt.
“He said to me, ‘Before any of your expenses get inflated, you have to make the biggest loan payments that you can,’” said Hoyt.
For Hoyt, the friend’s comment really made an impact. Hoyt grew up in a stable middle-class home, and both of his parents had secure, well-paying jobs. Yet, they still struggled financially.
“They had financed their house, their cars. They did a lot of the things that baby boomers did — because it was really easy to borrow money,” he said. Even as adults with grown children, his parents still tussled with debt, and they weren’t happy about it.
In that moment, on the boat, surrounded by million-dollar lakeside properties and luxury yachts, Hoyt decided to he didn’t want to follow in his parents’ financial footsteps.
“It sounds silly, but standing there, I realized I wanted to at least give myself the opportunity to own those things around me one day,” said Hoyt. “I didn’t think having debt would ever get me to that point.”
A Major Mindset Shift
Almost immediately, Hoyt and his then-fiancée made drastic changes to their standard of living, all for the sake of throwing as much money as they could at his outstanding $40,000 student loan balance. Hoyt said he:
- Rented the cheapest housing he and his fiancée could muster
- Backed off on new car offers and decided to keep driving the old truck his father had gifted him before college
- Stopped going out to eat
- Bought no new clothes
It wasn’t always easy. Hoyt, who worked in a high school, was the subject of a lot of ribbing.
“I had five sets of work clothes, and I put them on a rotation,” he said. “I didn’t buy any new shoes, and that was a big thing. ‘You have the nastiest shoes,’ the kids would tell me.”
Even so, Hoyt stuck to his plan. “Those kids poking fun, they don’t pay my bills,” he’d remind himself.
Then, there were his friends. “You want to feel like you’re successful, and it’s hard when you see your friends buying stuff and you think they must be making so much money,” he said.
What he realized later, though, is that having things does not necessarily indicate financial success.
“My friends bought new cars, they bought houses. A couple of years later … they were in a lot of debt,” he said.
Meanwhile, by that point, Hoyt didn’t have any debt.
Opportunities That Come With Financial Freedom
Hoyt graduated in December 2011. He started making payments on his student loans in August 2012 when the grace period ended. He paid them off in March 2014 in just over a year and a half. There was no magic solution, he said. He just lived cheaply and chipped away at the balance as best he could.
But then the magic happened.
“After I paid off my loans, I was like, ‘Why aren’t more people doing this?’” he said. “I started a blog because not everyone knows how to live beneath their means from the start. It got to be pretty popular. People really liked the message.”
Meanwhile, he continued to live well beneath his means and used his new excess capital to build up a safety cushion that eventually came to total a year’s worth of income.
With just nine months of blogging experience under his belt, Hoyt was emboldened by his new, debt-free financial situation and flush bank account. It turned out, he loved managing a website and, even though he also loved directing the high school band, he saw that that job would financially plateau in a short period of time.
“It was a big leap of faith, but I left my job in June to pursue my new career full time,” Hoyt said.
Without the stability that comes from a debt-free lifestyle and an over-funded emergency savings account, it’s a move Hoyt most likely would not have made. Even so, within two months’ time, he said had replaced the monthly salary he had earned as a band director and was comfortably building the life of his dreams.
Even so, Hoyt’s new career looks somewhat different than he had originally envisioned. He still runs his blog, Millennial Money Man, but the majority of his income is earned through inbound marketing consulting gigs. “My first client was someone who liked my blog a lot,” he said. “I was then able to leverage that relationship to get other clients.”
How You Can Do This, Too
Today, a portion of Hoyt’s income is derived from offering financial advice to his blog readers. Hoyt attributes his success to two factors:
1. Living Simply and Well Beneath His Means
For people looking to emulate his success, Hoyt suggested making the biggest loan payments they can. For those without debt, he said, “Live beneath your means. Let your friends pass you. Let them finance new cars. You’re going to see them, and you’re going to be jealous, but stick to your plan anyway.”
“It doesn’t matter how you do it, but live as cheaply as you can and avoid the debt that everyone else gets into,” he said.
2. Through the Advice of a Mentor
Hoyt met his mentor by chance, but that’s not the only way. “Find someone you look up to financially and pick their brain,” he said. “Successful people love to share their story and to offer tips. Ask them how they did it, and they’ll give you a good answer. They’ll offer creative strategies.”
Your mentor might not be your parents, Hoyt advised. “Mine aren’t in the best financial position,” he added.
Even so, it’s worth the effort to seek out a mentor. “I wouldn’t have paid off my debt if I hadn’t,” he said.