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How would your life change if you reached Financial Independence and got to the point where working is optional? What actions can you take today to make that not just possible but probable. Jonathan & Brad explore the tactics that the FI community uses to reclaim decades of their lives. They discuss reducing expenses, crushing debt, tax optimization, building passive income streams through online businesses and real estate and how to travel the world for free. Every episode is packed with actionable tips and no topic is too big or small as long as it speeds up the process of reaching financial independence.
481 Episodes
The nature of work has drastically changed over the last year. Has its impact on you been negative or positive? And does that impact your choices on the path to financial independence? As a result of these changes, how we do work is something we can now question and work to make it align with how we want our weeks and months to look like. The concept of a Red X month is something first introduced to us by Vincent Pugliese and one that has been sacred to the Barrett Family. Brad puts a big red X through the month of August each year so they can spend the month doing whatever they want. The ability to do that is a benefit of FI. In order to spend more time with family, this summer, the show will move from its standard two shows a week format, to just once a week. What is your why? Brad says the words “enough” and “balance” pop into his head. We are driven to get to the point of financial independence but it can sometimes be difficult to find balance or understand when it’s enough. Success isn’t how much money you have in your bank account or how high your savings rate is. It’s having balance and living a life by design. Jonathan is reminded of a phrase, “What got you here, won’t get you there.” All of the work that goes into earning more, spending less, and optimizing the difference puts you at risk of losing sight of your why. At some point, you need to wind it down and step away. The one-more-year syndrome where you worry you might not have enough comes from a scarcity mindset. It can be easier and less scary to keep doing what you are doing. The hard work is psychological and needs to be contemplated years before leaving work. You can start doing the work ahead of time by starting small and experimenting. Jonathan doesn’t know that he would be good at vacations. He’s always thinking about something related to this community or Talent Stacker. He realizes that comes at the cost of missing out on spending quality time with his family and his life may be out of balance. He thinks Brad is probably better at handling the contentment side of things. Many of us feel like if we aren’t actively trying to advance that we are failing. When you are in a position of strength and know what you value and where you can provide value, you can design a work life that works for you. A lot of employers are looking at how they can save money with less physical real estate. You have the chance to be a squeaky wheel and present your employer with a work proposal and provides them with an ROI they are looking for. Work is not always going to be stress-free. Where does it cross the line from reasonable to toxic? Brad thinks he feels stressed more than he should for his overall level of stress, but that it’s because he is out of balance. He suspects it’s due to a feeling of only being half there and a constant feeling of guilt. Life isn’t perfect and neither are we. We need to have some self-compassion, realize our issues, and try to get a little bit better every day. If you conduct a root cause analysis on your stress, you can figure out a way to solve it. Jonathan says that his pharmacy job was a former source of stress because it didn’t meet his needs for autonomy, mastery, purpose, identity, and connection. Having FU money enabled him to leave it behind to pursue ChooseFI instead. Knowing what your options are is one way of dealing with a toxic work situation. You can start by testing small and doing things to make your life a little bit better. You don’t need anyone else’s stamp of approval anymore. It’s not necessary to go into debt to start a business and there’s never been a better time to start learning for free. Balance has characteristics that are identifiable. It feels like you are in control of your time and you are able to allocate it where you want. If you have autonomy, mastery, purpose, identity, and connection, you should be able to control your time. Resources Mentioned In Today’s Conversation ChooseFI Episode 211 How to Negotiate Your Salary Without Burning Bridges | Financial Mechanic ChooseFI Episode 168 Make Time Sign up for the free 5-day challenge If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
What You’ll Get Out Of Today’s Show Do you want to give your children the tools they need to guarantee their path to financial independence? If you give them the right skills, becoming a millionaire can be a mathematical certainty. Achieving the objective of becoming a millionaire isn’t nearly as important as the process of getting there. Success is in the journey. For many of us, we made a lot of mistakes before finding the right information and learning that there is a better way. When you understand the power of compounding, you know how plausible it is to become a millionaire, and what you need to put away each month to get there. Much of the journey comes down to mindset, empowerment, and believing that you can make changes to better your life. It starts with the little changes that make your life 1% better. It’s time to stretch the tactics we use and apply them to a different age bracket. We generally talk about investing timelines starting around the age of 20. But how early could you really get started and why would you want to get started at an earlier age? For Brad, the reason is dual-pronged. He thinks the concept of saving for retirement is misdirected and he would frame it differently. Retirement is so far in the future, it’s harder to get behind during your younger years. However, the concept of financial independence is something people are more willing to take action on. Financial independence means you can control your time and have the autonomy to make decisions and you can take advantage of retirement vehicles such as 401Ks and Roth IRAs to reach FI. Financial independence is a better framework for talking about and planning what it is you want to do with your life as well as giving yourself options. The Make Your Kid a Millionaire article emphasizes Roth IRAs. Bradd says there has never been a great explanation of how people can take advantage of a Roth IRA for children who have earned income. Most children don’t have jobs that allow them to contribute to a 401K, 403b, or 457. A source of earned income does allow them to make after-tax contributions to a Roth IRA where that money can grow tax-free forever. A 12-year-old will have 47 years of compound growth before making withdrawals. All of the growth, dividends, and capital gains distributions will be tax-free compared to an investment account where they would be taxed. The current limit for Roth IRAs is $6,000, but you may only put as much of that limit in as you have earned. A child earning $5,000 in a year would only be able to contribute $5,000, not the $6,000 limit. Although ChooseFI doesn’t generally suggest the Roth IRA as the first investment vehicle to use, the strategy is different for children. For adults, some financial independence strategies help to control your marginal tax rate using specific pre-tax retirement accounts. When adults are in a low marginal tax bracket, an argument can be made for locking in the low tax rate with Roth contributions. However, children with much lower incomes, already have low marginal tax rates. Since they can generally only choose from traditional or Roth IRAs, it’s likely in their best interest to pay the small amount of tax and then shelter that income from taxes for the rest of their lives. Although allowance and pay for chores around the house don’t count for earned income, there are some categories of work kids may do that do count but you’ll want to be careful documenting, such as newspaper routes, babysitting, mowing lawns at other people’s homes, acting, photography, acting, modeling, or working for a parental-owned business. Regular jobs at private or public companies that comply with your state’s child labor laws definitely count as earned income. In the article, an example used discusses a child who mows lawns and earns $4,000. His parents decide to contribute $3,000 to a Roth IRA. The contribution does not need to be made with the exact same money the child earns. Parents or grandparents could make the contribution as long as it does not exceed the earned income or IRA contribution limits. Matching programs are a great way to teach financial lessons. Similar to a company 401K match, parents or grandparents could incentivize a child to contribute to their Roth IRA by agreeing to match contributions dollar for dollar, or two dollars for every one. If a 9-year-old were to put $3,000 into a Roth IRA once, never contribute again, and not touch it until the traditional retirement age of 64, that child would have almost $124,000. With the power of compounding, a child needs to contribute just $1,500 each year of their lives to ensure a million dollars at a retirement age of 64. In contrast, someone waiting until the age of 31 to begin investing and maxes out their Roth IRA with $6,000 each year until age 64 will only have $764,000. The difference between the two net worths is the result of the powers of compounding and time. The Rule of 72 is a way to predict how many years will take your money to double based on an interest rate. You take the number 72 and divide it by your interest rate. 72 divided by an interest rate of 7% results in money doubling roughly every 10 years. Compounding on a big number adds up quickly. A child could theoretically put in a large amount for just a few years, never contribute again, and end up with a higher net worth than with the $1,500 each example. The article contains different scenarios to help foster the conversations parents can have with their children about the impact time can have. Break through the initial resistance to get started and set up a system to reinforce good financial habits so that your child can build their own trust fund. It’s hard to put a price tag on the psychology of teaching your kids about investing early. They will have a better foundation and desire to learn and get even better. It’s good to teach them the time value of money while they aren’t relying on it to pay for their survival needs. Resources Mentioned In Today’s Conversation ChooseFI’s article Make Your Kid a Millionaire: Roth IRA for KidsSuze Orman’s $199 9 Steps to Financial Independence Online Course ChooseFI’s FREE Financial Independence 101 Course ChooseFI Episode 318 All the Hacks | Chris Hutchins Raising Your Money-Savvy Family for Next Generation Financial Independence by Carol Pittner and Doug Nordman If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
After four years of talking about the aggregation of marginal gains and the idea of getting 1% better, ChooseFI has accumulated quite a lengthy list you can stack together. If you can invest a little bit of time to fix something, you’ll never have to invest that time again. Brad recently decided to move away from paper files and bills to join the digital age, while Jonathan has been using a subscription service to stop the paper junk mail sent to him. Chris Hutchins shared a final hack with Brad after the end of the last episode that didn’t make it into the recording. Chris uses a browser extension to view book availability at his local library and borrow or place a hold on it. Brad and Jonathan selectively pick from the list of 100 ways to get 1% better with your finances, starting with #3, Reading (or Listening) to One New Finance or Investing Book Each Month. Jonathan thinks this tip could be expanded to include non-fiction books that improve you in some way. #4 on the list is to learn a new skill. It could be for obtaining background knowledge, gaining a marketable skill, or simply for interest’s sake. Although complacency can be seen as a bad thing, don’t mistake complacency for contentment. Other tips include getting outside to exercise or try a new hiking or biking trail every week. Mix things up. There is a never-ending stream of free YouTube exercise classes to choose from. Are you aware of your local FI group? While COVID has kept us physically apart, we are coming to the other end. You can invest in your local community. As for dealing with debt, Brad says you need to sit down and be honest with yourself. Understand what you owe, who you owe it to, how much you make each month, and how much you spend. If you spend more than you make, you need to stop right now, and at least get to the point where you aren’t adding more debt. Once you get to that place, Jonathan says you can look for ways to optimize your debt payoff, such as zero balance transfers. And then work to improve your credit score by putting a system in place, like autopay, to ensure you never miss a payment. If you do not have $1,000, you don’t need an emergency fund, you need a crisis fund. You need $1,000 that doesn’t have a bill attached to it that you could draw on in a crisis. Once you have that, then you can think about building an emergency fund. Use your tax refund to establish your crisis fund. Next, don’t give the government an interest-free loan and work it so that you don’t get a tax refund. The opportunity cost of having the government hold your money for a year is potentially big. When financially responsible and on the path to FI, you don’t want a big refund. You want to be saving and investing it all year long. You can learn to do just about anything on YouTube, especially do-it-yourself home repair tutorials that will save you money. Even replacing your incandescent bulbs with LED is easy to do and saves on energy costs. While lowering your hot water heater temperatures and adjusting the thermostat won’t make you wealthy overnight, stacking these tips with others is the whole point of getting 1% better. Declutter your home and donate or sell items to simplify your life. Owning a car costs a lot. Trying to manage the payment for a new car every 5 years versus buying a car and driving it for 15 years can have a dramatic impact on your path to FI. The one decision to drive a new car for 15 years, made just three times over an adult’s lifetime can result in a $742,000 difference. If you can stack car ownership savings with other money savings hacks on food, or housing, it can mean a difference of multiple millions. It doesn’t need to be about deprivation but just doing a little better than average to end up with millions more than your counterpart who is drifting through their financial life. #33 on the list is to shop your car insurance every year, which Brad extends as something to be done with all your insurance policies. Make it a yearly “to do” task. Unfortunately, companies don’t incentivize customers to stay, they incentivize customers to leave other companies to come to them. Even if you don’t want to switch, at least try and negotiate a better price. There are even companies who will do this for you. There are a few ways to optimize healthcare, such as using a high-deductible health care plan with an HSA, prescription discount tools, and locking in medical service prices with websites, such as MDSave. The health benefits of focusing on exercise and healthy food choices can not be overstated. 80-90% of the treatment modalities would go so much further if stacked with a healthy diet and lifestyle. To keep food costs in check, Brad and his wife, Laura, try to anchor themselves to a $2 per person per meal goal. Laura has even curated a series of healthy recipes that fall within that cost. Everything is negotiable. When Brad had a recent medical procedure, he simply asked if there was a pay-in-full discount and received a 30% discount. Saving puts money in your pocket, and so does earning more money. There’s never been a better time for a side hustle. CampFI’s are back! Brad will be attending the mid-Atlantic CampFI over Memorial Day weekend. Resources Mentioned In Today’s Conversation ChooseFI Ep 317 All the Hacks | Chris Hutchins PaperKarma Library Extention 100 Ways to Get 1% Better With Your Finances Find your local group at ChooseFI Episode 022 The True Cost of Car Ownership Trim Review: Bill Negotiation Without the Hassle GoodRx MDSave Ulta Lab Tests Eat Healthy and Save Money with Laura Barrett Cookbook Sign up for the free travel course at ChooseFI Episode 311 How to Travel for Free | Stereo Live Q&A The Chase Sapphire Preferred Card – Great for Cash Back or Travel Rewards Subscribe to Brad’s newsletter, The FI Weekly CampFI If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
Life gets busy when you have a new baby, so Chris Hutchins is on a quest to learn all the hacks, optimize his life, and share what he’s learned with you in his new podcast, All the Hacks. The goal of the podcast is to help listeners upgrade their lives by living more exciting, fulfilling lives without spending a lot more money and optimizing it all along the way. Life hacks tend to fall into one of three camps. It clicks with and becomes second nature, you find a way to automate it so you don’t even have to think about it, or it’s too much work and you never do it again. If you can find where optimization and excitement intersect, it’s a huge win for you and your family. When Chris thinks about life hacks, he thinks about different aspects of his life and what the important parts are, such as family, work, finances, shopping, travel, and self. Categories may also be broken down into multiple subcategories. Jonathan says the idea of life hacks and living his life in a slightly more optimized way is what led him to financial independence which he says is the ultimate life hack as it helps us reclaim our most precious non-renewable resource, our time. Coming out of a year of lockdown, it seems like everyone is planning to travel somewhere. Chris recommends using Google Flights to get quick insight into flight prices with flexibility on airports and dates. For hotel planning, Chris says it’s often a choice between a better price or a better experience. Trip Advisor recently launched Trip Advisor Plus, a paid membership service that allows them to offer hotel rates around 7-8% off because the rates are not available to the general public. However, booking directly with the hotel will likely get you a better experience. In addition to booking directly, reaching out to someone on the sales team or the general manager will often get you an upgrade or some sort of amenity. You may be able to find the names of individuals by seeing who is responding to reviews on Trip Advisor. Having status with the hotel can help as well. A family life hack Jonathan and his wife began doing is creating a shared family photo library and build a slideshow of their favorites from the year. Brad believes another life hack is just being a good person and making personal connections because it makes others want to go to bat for you. A lot of customer service reps have the discretion to do things for you that they wouldn’t if you get angry with them. Website account hacks are becoming more commonplace and passwords are frequently stolen so using the same password for everything can be trouble. Check to see if your account has been part of a data breach at Haveibeenpwned. A password manager makes it easier to use unique passwords for all your accounts. Increasing security with two-factor authentication helps make your accounts even more secure. Chris has a fireproof box in his home where he keeps important documents and the one password he uses with his password manager 1Password. In the event of death or incapacitation, a legacy binder has all the information loved ones need to manage your affairs. As mentioned on the show previously, Brad uses ToDoist to track all his tasks. Chris says that you can’t use any software system like ToDoist for an hour and see the magic. Commit to it. When it comes to renting cars, Chris rents with Avis using a Costco discount. He says to make sure if you’re a member of something, you find out if they have deals for you. Autoslash and Turo are additional ways to possibly save money on rental cars. Chase and American Express credit cards have offers to save many when using their cards. Listener Jessica asked about life hacks for type A career women and mothers on the path to FI. Chris thinks there is power in being incredibly passionate about a company you want to work for. He also says you can negotiate your salary all of the time especially if you present data that you are being underpaid. Before having their baby. Chris was able to find almost half of the items on their baby register in the second-hand marketplace, which allowed them to have everything they wanted and not skimp out on their savings rate. Similarly, Brad’s wife Laura is able to plan ahead for the future and buy seasonal clothing for their daughters at tremendous discounts. Another life hack, meal planning, is something that Chris and his wife just purchased for introducing their baby to solid foods. He says there is a bare minimum of what your time is worth. While they could have done it for free, buying the meal plan freed up a lot of their time making the cost worth it. Jonathan says for baby clothes, his wife was able to make out like a bandit using local buy nothing groups. Plus, she has been able to arrange a neighbor exchange to keep kids in clothing as they grow. And within their home, they rotate toys to keep them interesting. Another resource Jonathan has for Jessica is Dour and Carol’s book, Raising Your Money-Savvy Family, while Chris recommends moms’ groups, who share information and recommendations with each other Chris says meal planning is his biggest hack when it comes to cooking. He uses Paprika to save recipes, meal plan, and grocery shop. Steven Boyer from CampFI recommends if you cook something often, keep all of the items you use physically together. Brad used a little hack like that to remove the pain points he was experiencing make his morning smoothie prep go more smoothly. Holly says if you have a separate freezer, you can buy meat in bulk when they are on sale and then have them whenever you need them. Although Jonathan and his wife tried once a month meal prep, they have moved to cooking two to three meals a week and eating leftovers. Chris says he intentionally scales his meal sin Paprika up so that they have leftovers. Brad likes to reduce the paradox of choice by eating the exact same meal every day for breakfast and needs a system for lunch. To reduce her paradox of choice and frustration, Leslie created a capsule wardrobe for her closet by pretending she was packing for a three-week trip. Chris has been culling his wardrobe by separating the clothing he has worn and washed from what stays in his drawers. The things that have remained in the drawers he can get rid of. Karen’s daughter hates the idea of college and has an entrepreneurial mindset. Chris says there are so many opportunities to learn these days but the hardest thing is to tangibly identify something you can do. Get experience. Starting something doesn’t mean it has to be your full-time job. You can explore the entrepreneurial side while doing something else. Learning new skills is valuable. Try a bunch and see what lights you up. You don’t need to go to college anymore to earn an above-median income which is something he discusses in the Talent Stacker podcast. Jonathan and Bradley Rice built a job placement program around Salesforce which might be something Karen’s daughter would be interested in. Chris says automation is magical and one of the things that drew him to work at Wealthfront was financial automation where he works on automation that directs your money where you want it to go automatically. Resources Mentioned In Today’s Conversation ChooseFI Episode 071 Silicon Valley FI | Chris Hutchins | Grove ChooseFI Episode 121R How to Get Any Job ChooseFI Episode 311 How to Travel For Free | Stereo Live Q&A Sign up for the FREE travel rewards course! Google Flights Trip Advisor Plus 1Password ChooseFI’s recommended legacy binder ToDoist Autoslash Turo The Buy Nothing Project Raising Your Money-Savvy Family for Next Generation Financial Independence by Carol Pittner and Doug Nordman Paprika Recipe Manager Talent Stacker If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
Back in another installment of ChooseFI’s Households of FI series are Troy and Lindsay. In episode 241, Brad helped them calculate their FI number, but Lindsay is a teacher with the potential to earn a pension. In this episode, they touch base with Grumpus Maximus to discuss the health of their pension. While the conversation is geared toward the health of the Virginia Retirement system, others who are eligible for pensions will learn where to access data about their own pensions and interpret it to assess its health. Linsday is 32 and in her seventh year of teaching under the Virginia Retirement System. Troy is 34 and an IT professional working on government contracts and does not have access to a pension. Troy and Linsday have a young son. Grumpus Maximus is a retired military officer who lives in New Zealand with his wife and two kids. Grumpus experienced a post-traumatic breakdown around year 16 of his military career that had him calculating whether or not it was worth staying in the military for the additional years required to earn his pension. Many defined benefit plans these days have different levels because they are so expensive. The Virginia Retirement System (VRS) has 3 options, 1, 2, and a hybrid plan. Linsday is on option 2. Both COVID and having their son have had Troy and Lindsay thinking about the future of their careers. The possibility of working from home or retiring early were things they began to consider, but the VRS’s calculators would allow Lindsay to play with numbers to look at retirement before the age of 58. After some investigation, Grumpus found that 30 years is the standard full vestment period, but partial vesting is reached at just five years, although it wouldn’t pay out until also reaching the minimum retirement age. Option 2 appears to be tied to the social security retirement age, so taking it earlier likely results in a reduced benefit. Lindsay wants to understand how to calculate what her pension would be. Grumpus says there is a way to calculate it but warns that doing it this far in advance will require a lot of assumptions. The retirement budget Troy and Lindsay are shooting for is around $4,000 per month. They can go online to calculate the pension amount and then see how big the gap is. The smaller the gap is, the more valuable the pension is. Lindsay’s pension has a COLA which hopefully negates inflation and makes her pension more valuable and allows her pension’s purchasing power to remain the same. The VRS pension also does not replace social security, so she will have social security income coming in as well. Her pension also has other earned pension benefits (OEPB), like life insurance, health insurance, and the option of survivorship. The Grumpmatic method of calculating a pension’s worth includes a pros and cons list, which includes pension benefits, but also personal issues. It takes into account the non-mathematical considerations, such as happiness, job satisfaction, and potential changes to the pension system. He encourages everyone to write the list down on paper to create a physical record of why the decision is being made because it shouldn’t be purely a numbers-based decision. When asked about how Grumpus and his wife came to the decision that they did, he said several factors played into the decision. It was a transition for his wife to go from career to full-time parent wasn’t easy. They even had marriage counseling. Troy had trouble even finding information on Lindsay’s pension. Grumpus says because he’s been looking t pensions for so long, he knows what to look for. In addition, Boston College runs The Center for Retirement Research and has a public plan database with most of the major state and city plans in it. With Public Plan Database, you can get an overall view of what the pension plan looks like. It also compares the plans to national averages which can give you an idea of the overall health of your plan. Virginia’s plan is not fully funded for all current and future obligations, which is pretty much average. Very few public plans are fully funded. An accounting change in the late 90s also changed many pensions from 100% funded to underfunded and then the market crash from the .com bubble didn’t help. Most plans have steadied since then at around 75%. The American Academy of Accuraties came out with a paper stating that there is a myth claiming anything funded at 80% is well off and won’t have issues in the future. It’s better to look at the trend lines for the last five years. If they have been going down, there is cause for concern. Grumpus warns that all the funding spent on COVID this year may impact pension funding. If states skip paying into plans, it will need to be rolled into future payments. That is shown in the database as ARC payments. In Lindsay’s pension plan, she is accruing cash that she could roll over with the interest into an IRA after five years of service. Grumpus says that goes in the pro column for leaving since she could take what she’s earned with her, but he says there are very few cons to her system overall. The VRS pension uses a formula based on age, the number of years worked, and average annual salary. There is a multiplier for every year worked of 1.7%. Payments will start right away if she works to full-retirement age. Concerning health insurance under VRS, credits are accrued for the length you stay that contribute to a subsidy. If you leave, you won’t keep that. Because of the COLA, it makes for an easier pension calculation, but there’s no magic equation to spit out a yes or no answer. The goal should be to have a fully-formed decision. While she is enjoying teaching from home, Troy and Lindsay are considering a second child which could change how she feels. Grumpus says the advantage is that they don’t have too much time invested into the pension yet. Teachers have other ways to invest money, such as 403bs and 457s. Lindsay could be doing those in the meantime to give herself flexibility. People who have pensions need to make some real in-depth considerations from both a financial and psychological perspective. Not every decision comes down to money. You have to decide what works best for you. Grumpus Maximus Website: Resources Mentioned In Today’s Conversation Get the ChooseFI ebook bundle for 20-25% discount! ChooseFI Episode 221 Introducing Our Households of FI!! | Part 1 ChooseFI Episode 241 Households of FI Troy & Lindsay and Brad Calculate Their FI Number Public Plans Database Children will gain money management skills with The Simple StartUp. The Golden Albatross: How to Determine if Your Pension is Worth it? by Grumpus Maximus The Center for Retirement Research at Boston College If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
In last week’s Facebook Live episode with Frank Vasquez, he pointed out that we are in the Golden Age of Investing. In this episode, we explore what that means and if we appreciate how good we have it. In an ideal world, we would all like to maximize investment returns while reducing volatility. Holding uncorrelated assets helps to prevent catastrophe. But what is the goal of investing? Although it’s a broad question, Brad believes the ultimate goal is to accumulate wealth. Investing itself is a very broad term, but it is essentially when the money you have saved is working to produce additional income for you. Financial independence is getting to the point when you have saved and invested enough to get to the point where working can become optional. In the last 20-30 years, investing has become fundamentally easier. Even Brad’s first investing experience 20 years ago under the old system was a negative one, where he and his lack of knowledge were taken advantage of by an unscrupulous advisor. Back then, you needed an expert to help you invest money and paid dearly for it in the form of fees. When many of us think about saving money today, it is through a savings account or certificate of deposit where the bank holds your money and pays you an agreed-upon interested rate in exchange for being able to loan out your money at a higher interest rate. Based on current interest rates, it would take a very long time to make a meaningful return on money invested in this way. A more aggressive form of investing would be owning shares of a company’s stock and the value increases as the company become more profitable. Bonds are where a company, the government, or other entity raises capital by selling debt. You buy the debt and are paid back with interest. Mutual funds are yet another investment that first came about in the 1920s, but mutual funds really rose to fame in 1975 thanks to Jack Bogle when he created the Vanguard First Investment Trust. It was game-changing for modern-day investing. With mutual funds, you own a little piece of many different companies with one investment. In the case of an S&P 500 index fund, you would own a little bit of the top 500 largest companies, although it is cap-weighted, meaning you own disproportionally more of the largest companies and less of the smaller. The index funds approximate the market and so you don’t need to pick individual stocks to invest in, which is good since we tend to do so poorly at stock picking both on the information and behavioral side. Owning a single stock is a risky position. If something goes wrong, the investment can become worthless and your money is gone. You can mitigate that risk by diversifying your investment across multiple companies. Jack Bogle changed the game in 1975 when he decided you didn’t need to pay for experts to put together and manage mutual funds comprised of hundreds or thousands of companies. Computers could use an algorithm to manage a fund designed to track a particular index. He predicted you could get a better return from owning all the winners and all the losers and keeping the fees rock-bottom low than with an expert team picking stocks. Although the entire investing industry laughed at Jack Bogle, after 25+ years of data, the results show Bogle was right. The process dominates over one of actively picking stocks, especially with a timeline of several decades. Today, in the index fund space, there has been a continual race to the bottom when it comes to lowering index fund fees and the expense ratio today has been cut by a factor of 10 or more. Something ChooseFI has discussed over and over again is how much of an impact fees can have on your investments. An extra 1% fee can lower your net worth by as much as 30-50%. It’s because index funds with expense ratios of 0.04% or lower that say this is the Golden Age of Investing. It’s no longer necessary to pay 0.75-1.5% expense ratios or 5% front-load fees. In addition, changes to the tax code have made it possible to control our tax rate. In 1974IRAs became available, followed by 401Ks in 1978, Roth IRAs in 1997, HSAs in 2003, and 457bs in 2010. These investment vehicles allow us to control our tax rate and save for financial independence. With the exception of Roth IRAs, all of the other accounts are pre-tax, so that every dollar going in reduces your taxable income. Some couples may even be able to reduce their taxable investments by $78,000 if they have access to both 401Ks and 457bs and max out their investments, possibly reducing their taxes to 0%. Investing on your own today could not be easier. It can be done on your own, online, in about 15-20 minutes. Even better, you can automate your investing and send over an extra you have when you have it. The barriers to entry are also lower than ever before. You don’t need to have your money sitting on the sitting lines until you have accumulated enough to invest. You can start with $10 or $20 and invest in Exchange Traded Funds (ETF) if you don’t have enough to meet the minimum investment for a mutual fund or even buy fractional shares. Brad has his finances on autopilot even if it is suboptimal. He suspects many of these new companies are moving toward a system where everything is connected, will be able to optimize everything, allowing customers to keep anything extra invested. Jonathan believes making investing seamless is magical. Using dollar-cost averaging as an example, it guarantees a mathematically favorable average price for your investment. Brad thinks the most obvious benefit is behavioral. You don’t need to think about when to buy or what the market is going to do. Our brains screw us up with investing more than anything. There are a few other forms of investments, outside of stocks and bonds. Real Estate Investment Trusts (REITs) are basically mutual funds for different types of real estate, or ETFs made up of stocks in different types of commodities. Investing in a business, crypto, collectibles, NFTs, art, or single commodities are all other options. Speculation and investing can be conflated terms, but they are different. Speculation is not based on the fundamentals of a company or asset. Last Fall, Jonathan bought $200 worth of DOGE and just sold it for $5,000. While the gain is real, his purchase was entirely speculative. He remains skeptical of cryptos in general but sees where there may be value in cases where a problem is being solved, such as XRP and Swift. With any investment, you don’t want to be the one left holding the bag. Know what your risk tolerance is, what your timeline is, and what your goals are. With buy and hold investing in large swaths of the market, you don’t have to worry about whether or not you have the winners or the losers. The market is self-cleansing. As long as you keep living below your means and investing the difference between income and expenses, you’re going to be successful. Resources Mentioned In Today’s Conversation ChooseFI Episode 313 Are you as Diversified as You Think You Are? With Frank Vasquez Register to receive a copy of Brad’s weekly email, The FI Weekly, right to your mailbox! ChooseFI Episode 013 The Unfair (FI) Advantage of Teachers | 457b Motley Fool article: Dollar Cost Averaging: What Investors Need to Know If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
The Households of FI series continues! In this episode, we touch base with Kristi, the single mom from Minnesota who. New to FI, Kristi is working to get on the path but has questions about her company’s Price-to-Earnings (P/E) Ratio and the Employee Stock Purchase Plan (ESPP). How to evaluate what a company’s stock is worth is not something many of us index fund investors know a lot about, but it’s good to be familiar with it. Individual stock selection is something that Brian Feroldi gets excited about, making him the perfect mentor for Kristi and her ESPP questions. The only individual stock Kristi owns is her company’s stock. She is able to buy her company’s stock for a 15% discount with up to 10% of her income. She has been buying this stock since beginning her career six years ago and has accumulated a lot of it. Because she didn’t know anything about investing prior to finding the FI community, she nows calls this her biggest financial mistake and has finally started selling a bit of it. She originally thought that sell the stock with the lowest cost basis to realize the largest gain would be the best strategy, but now questions if that is the best move. Brian says a lot of publicly-traded companies offer ESPP, like Kristi’s. Company plans vary somewhat, and it sounds like her company purchases lots of the stock on a monthly basis at the end of the month. As long as Kristi holds the stock for two years, the 15% discount is taxed as ordinary income, and capital gains are taxed as long-term capital gains. Discounted stock sounds like a great deal, but Kristi has a lot of risk tied to her company. Her salary, bonus, retirement plan, benefits, and career capital all rely on the company. Purchasing employee stock increases the risk even more. When Brian started his career, his company offered an ESPP, and although he was bullish on the company, he chose not to participate as a risk management strategy. He already had too much riding on the companies success to risk adding to it. Although the company did well and he would have increased his wealth, he is happy with the choices he made because he was maximizing his potential net worth, while assuming as little risk as possible. Although her company is a blue-chip business and low-risk company. Kristi will need to ask herself how much risk she wants to be tied to it. Brian says ESPPs are great, but you’ll want to make sure you are taking care of everything else first, such as an emergency fund, 401K, debt, and IRAs. Although her company is the only individual stock she owns, she is somewhat interested in owning other individual stocks. She can add that in over the top of the bulk of investments in index funds, while remaining diversified, and still feel good about her long-term compounding chances. Kristi would like to know how to evaluate an individual company’s stock for investing in the short-term and long-term. She knows the P/E ratio is something to look at and her company’s P/E ratio is 18.66. Brian says a P/E ratio is a tool you can use to evaluate stocks, but it’s important to know when it is appropriate to use and when it is not. First, Brian says he never invests in a company short-term, or less than three years because it’s impossible to know what a stock is going to do in the short-term. Long-term stock prices are driven by earnings power and earnings growth which is the company’s profitability. In P/E ratio, the P stands for price or the price of one share. E stands for earnings, the net income or profits per share. The difference between those two numbers is the price investors are willing to pay for $1 profit in the company. With Kristi’s company, for every $1 in earnings power generated, the market is willing to pay 18.66 times that number. Brian says it’s helpful to flip that number around and think about it as an interest rate. Take 100 and divide it by 18.66, to get 5.35% on the company’s earnings power. But is that good or bad? Context is key. When looking at over the last decade, Kristi’s very stable company’s P/E ratio varied from 30 to 12. Since the current P/E ratio of 18.66 is on the lower half of that range, Brian says the stock is more likely to be in bargain territory than it is to be overly expensive. Next, Brian pulls up the company’s net income over the last decade, which has been mostly stable with a few spikes and other periods when it has fallen. This needs to be compared to the P/E ratio as the highs and lows may be artificial. Another metric Brain says to look at is the price-to-sales ratio, which is the price of the business divided by the sales, or revenue per share. This ratio eliminates the one-time swings and tends to be much more stable. Over the last decade, her company’s ratio varied from 5 to 2 and is currently at 3, again leading Brian to believe the stock is in buy territory. If you have an ESPP, you want to look at the minimum holding period, know when you are outside the short-term capital gains, and the other details of your company plans. Consider rolling it over to an investment outside your company once the plan requirements have been met and it meets long-term capital gains requirements. Long-term capital gains have preferential tax rates. The line of delineation between short and long is one year. Investment gains are not subject to tax until they are realized. If selling an investment held less than a year, the gain will be taxed as if it was ordinary income, or whatever your top marginal tax rate is, which for most is 20-24%. Gains from investments held longer than one year are as taxed as long-term gains, which for most people is 15%. For those who have access to an ESPP, it is part of your compensation but will require a bit of research because there is some risk in tying up so much of your wealth into one company. Resources Mentioned In Today’s Conversation ChooseFI Episode 224 Introducing Our Households of FI!! Part 2 ChooseFI Episode 259 Kristi and Big ERN YCharts Stockrow Is an Employee Stock Purchase Plan Worth the Risk? ChooseFI Episode 024R The Friday Roundup | How to Hack Your ESPP ChooseFI Episode 200 Stock Fundamentals With Brian Feroldi Get started on your own path to financial independence and take the 5-day challenge! If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
The goal of diversification is to ensure access to a lot of upside without being exposed to an unacceptable downside. But are you as diversified as you think you are? Long-time community member, Frank Vasquez says there are three roles bonds have in your portfolio, income, stability, and diversification. The Holy Grail Principle focuses on what the concept of diversification really means. It doesn’t mean different, it means uncorrelated. Investors can use online websites to calculate the correlation of two assets that results in a number ranging from 1 to -1. The closer the number is to 1, the more highly correlated they are. A number close to 0 indicates the assets are uncorrelated and move randomly with respect to each other. A negative result means the assets are negatively correlated and typically go in opposite directions. Why would an investor want assets that are negatively correlated if that means while one is doing well, the other is not? In the accumulation phase when an investor is trying to build wealth, they probably would want negatively correlated assets. Upon reaching FI, they may be helpful when attempting to ensure the highest safe withdrawal rate. Safe withdrawal rates for each portfolio will vary slightly and range from 3-5.5%. There are websites online to help calculate the rate for different portfolios. Frank has three adult children who he advises to max out their retirement accounts in basic index funds. The next bucket to fill is an emergency fund, followed by a taxable brokerage fund to used toward a down payment on a house. His son’s brokerage account used a risk parity-style portfolio, which is good for intermediate-term savings. When first starting out, money invested is a big pile of future cash. You invest a little each year and should get it into risky, growth-oriented, and reliable investments, which are stock index funds. Until you have $100,000 in your account, being invested in one fund is perfectly fine. It’s about earning and saving at that point. After the first $100,000, earnings begin to mean a little more and you can embrace a little more complexity. In the four phases of investing for retirement, the first two are earning and saving and are the most important to get automated saving going. Phase three is investing and the fourth is managing the investments to ensure they don’t blow up or go away. Long-term accumulation comes first in a portfolio, and Frank’s son is extremely frugal, making the risk parity portfolio possible. But what considerations are there if you are looking to transition index funds into a risk parity portfolio? The first step is to figure out where you are going and where the goal is. Next, look at what you have and what needs to be transitioned. Start the process when you hit your FI number or about five years out from when you think you are going to need it. You don’t want to be 100% equities and have the stock market crash two years before you retire. A risk parity portfolio does not stop earning money. The return is approximately between 6-8% after inflation, but the tradeoff is you are also only getting half the volatility of the stock market. You can’t optimize the performance of your portfolio in the future, but you can control your expenses, modify them, and take less in one year if you need to. Treat all of your assets as one big portfolio. You don’t want to incur unnecessary capital gains in your taxable accounts, so moving funds in retirement accounts is appropriate. The least movement possible is best and anything taxed as ordinary income should be put into retirement accounts. Risky parity is a style of investing that has become more accessible to everyone with no-fee trading. It is finding uncorrelated or negatively correlated assets and combining them to reduce the risk of the overall portfolio. The main driver of the portfolio is going to be stocks at 4-60%. The most diverse thing from stocks are Treasury bonds, like long-term Treasury bonds, at 20%. Gold may be an alternative. Bonds are not good income generators anymore. The go-to places for income sources are REITs and Preferred Shares. If you want to invest in something like Bitcoin, make sure you have a volatility match to it. Listener Andy asked about what percentage of a stock portfolio should be in international stocks. Frank says the issue with international funds is that they are highly correlated with US funds so they aren’t very useful. When Frank is deciding on investing in something, he looks at how useful it will be in his portfolio. He looks at its correlation with the rest of his portfolio and its volatility. You don’t want to put very much of something with high volatility in your portfolio. Listener Luke asked about Frank’s views on factor investing and if has or plans to have small-cap value funds in his portfolio. Franks says he does have small-cap value in his portfolio because they are less correlated with the overall stock market than an international fund. Franks says you want a basic and diversified two-fund portfolio that covers the whole market would consist of large-cap growth and small-cap value funds. The correlation between a total stock market fund and an S&P 500 fund is extremely high and a kind of false diversification. Although index funds are cap-weighted and gaining more and more of the larger companies over time, they are also self-cleansing in that companies doing worse fall down or fall off. Small-cap value funds do the reverse. When a company gets too big, it gets kicked out. Holding both types captures each end of the spectrum. According to the Macro Allocation Principle, what matters most in investing are the macro allocations between stocks and bonds. According to Jack Bogle, any 60-40 stocks to bonds portfolio is going to perform 94% the same way as any other 60-40 portfolio. Listener Claudia asks what a bond tent would do to her sequence of return risk. Franks says a bond tent is an old-fashioned way of dealing with sequence of return risk, but he says it’s not functionally different than buying a short-term or intermediate bond fund. Bonds should move opposite of the market, but lately, they have moved with the market. Franks says different bonds behave differently. Some do not provide much diversification. Focus on Treasury bonds for diversification. The hallmark of a very diversified portfolio is when you see different things moving in different directions at different times. Rental real estate and stocks have a low correlation, so it can be a good way to diversify, although sometimes they can move together as in 2008. In Frank’s mind, diversification should mean uncorrelated, it doesn’t mean having lots of stuff. Frank’s podcast is focused on risk parity and he has created six sample portfolios at Fidelity that he discusses each week. While Frank likes to nerd out on this stuff, you don’t need to to become a successful investor. Frank Vasquez Website:  Risk Parity Radio Podcast: Risk Parity Radio Podcast Resources Mentioned In Today’s Conversation ChooseFI Episode 194 The Role of Bonds in a Portfolio Portfolio Visualizer Portfolio Charts The Four Phases of Saving and Investing For Retirement ChooseFI Episode 176 Flexible Spending Rules for Early Retirees Using Gold as a Hedge Against Sequence Risk – SWR Series Part 34 The Little Book of Common Sense Investing by Jack Bogle Money for the Rest of Us Podcast Money for the Rest of Us by J. David Stein If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
In 2008-2009, the American dream of a home with a white picket fence turned into a financial nightmare, sending many families underwater for a decade. After looking at the numbers, there’s an ongoing debate over homeownership. Owning may not be the right decision for everyone. Scott Trench and Mindy Jensen from BiggerPockets join the show to discuss home buying and their new book, First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes. Even if you’ve already purchased a home, Scott and Mindy’s book is a masterclass to help you rework the process during your next home buy. According to their book, “…a smart home purchase will not only give you a place to live, but also offer flexibility, financial stability, and the chance to recognize and increase in that home’s value over time”. Is purchasing a home a good investment? Mindy says, “Maybe”. Housing is an expense whether buying or renting. The more you buy, the more you are spending, and the less wealth you will have. Don’t ask how much can you afford. How little can you spend to meet your lifestyle needs and what’s the best financial decision to meet those needs? There’s a lot of math behind a buying vs. renting decision. As a real estate agent, Mindy tries to stop herself from asking clients how much they can afford. Instead, she asks about the price range, what kind of home they are looking for, and what condition it should be in. Mindy’s home is an investment, but that’s because she buys dumpy homes, fixes them up, and forces the appreciation. However, she says the average person shouldn’t consider their home an investment. For the average buyer, appreciation will generally occur over the course of the ownership time period, but it is the product of the housing market around you. It tends to appreciate 3-8% year over year. Selling after just a few years of ownership won’t make much when you sell, in fact, you may lose money to closing costs. For regular buyers, a home is a place to live, not an investment. Roughly 10% of a property’s purchase price is out the door in closing costs the moment you buy it. If you don’t improve the property and force the appreciation, you have to allow appreciation to carry you back over time. Over a long period of time, the returns on your home are low compared to investment alternatives like the stock market. When deciding to buy or rent, what’s the breakeven point? Scott and Mindy assume a 3.5% appreciation rate, which comes from the Case-Shiller Home Price Index. At that rate, the breakeven point comes in 5-7 years. The higher the appreciation rate, the faster you reach the breakeven point. You don’t need to live in the property for the 5 to 7 years to reach the breakeven point, you only need to own it for that time to make it work. You could rent it after you move out as an exit strategy and increase the desirability of buying. If you rely on a lending calculator to answer the question, “How much house can I afford?”, you’ll end up being house-poor. Median incomes and home prices around the country differ more than other categories, such as food. All the disposable income over what is needed for day-to-day life can go to your scarcest asset, which is housing in many high-cost-of-living areas. There is no rule of thumb for what percentage of income you can spend. It’s about how little house you can buy and eliminate all of the waste. When making the rent vs buy decision, Scott says the biggest variable to consider should be time, then what your appreciation is going to be, what you can do to force the appreciation, and then exit strategies. There can be a dramatic difference between a home you would want to live in and one you could potentially rent. First-time home buyers tend to live in the property, but it’s likely they won’t live there forever and should make the smartest choice by thinking outside their own needs. Mindy suggests using the internet to research what you need versus how can you rent it out. It’s not a smart financial maneuver to decide you want to buy a house today and put an offer in tomorrow. Do some research and figure out what exactly you want. Most people go in with the framework of buying the house they like and pray that it goes up in value so they can sell at a profit. But when you buy a home, there are three eventual outcomes. You live in it, rent it, or sell it for a profit. Keep all three of those in mind when buying. If the chances of you moving are almost zero, it’s a great idea for a first-time homebuyer to begin looking for their forever home, but Mindy thinks the whole idea of a forever home is garbage. It’s not realistic for a 20-year-old to be able to afford the 3000 square foot home and stay there for 30 years. Lenders, real estate agents, and contractors are all incentivized to have you buy the biggest home you can afford because they make the most money that way. If you don’t focus on the first home being your forever home, you can have more assets available for when you are in a place to get what you want. The first step is to be clear where you fall on the “live in it forever, rent it out, or sell for profit” spectrum. Next, figure out the price range for what you want. Don’t look at the active listings, look at what has sold in the last 180 days. Finally, narrow that search down to the 10 properties you would have purchased yourself. That gives you a realistic idea of your market. Mindy says the exercise can be a great way to screen agents as well. If they are unwilling to do this for you, cross them off the list. You should interview the agent before deciding to work with them, keeping in mind that their incentives are not necessarily aligned with yours. Find someone considerate of what you want. The home seller is usually paying the commissions of both agents involved in the sale of a home, though for it’s usually very practical for a first-time homebuyer to have an agent represent them. The next step in getting a good deal is waiting for the home you want to come on the market. Be pre-approved or pre-qualified for a loan and be ready to view the property as soon as it comes available and make an offer that night or the next day. It’s not a rush decision because you already pre-determined what you wanted to buy. If you think through the exit strategies before buying your first home, you won’t feel trapped by your decision if something like a job opportunity in another city comes up. In a hot real estate market, the fear of mission out can be real for first-time homebuyers. It’s a hot market right now, but it’s not going to continue forever. Make offers based on the numbers, not out of emotion. Scott is currently renting because it’s a cheaper way to fund his lifestyle right now and there’s too much risk for him to assume with buying. Other than student loan debt, a first home purchase may be the biggest financial decision you make. It’s worth spending a little time thinking about it. Scott and Mindy from BiggerPockets Website: BiggerPockets Podcast: BiggerPockets Podcast Resources Mentioned In Today’s Conversation First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen BiggerPockets Home Buyer Bonus content If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
“When you are financially whole in the way I’ll teach you to be, you won’t have to live in fear. You’ll have a plan for each area of your finances so that they are constantly working on your behalf“. — Tiffany Aliche America’s favorite budget expert, Tiffany Aliche joins us to discuss her new book, Get Good With Money. Financial fear can come from financial trauma and drama. When you know that the money you are making isn’t quite enough for the things that you absolutely need, or you can foresee a future when your finances will not be okay, most of us carry that fear secretly and with a sense of shame. Tiffany wants her community of more than 500,000 Dreamcatchers to release that shame, focus on solutions, and create plans that actually work. According to Tiffany, wealth is more than just money in the bank. It’s really a mindset, which is the building block of personal finance. People often chase an end goal without a foundation to ensure they will still be okay if something were to happen. Tiffany’s teachings are foundational. The goal is to give you the foundation that you need to go on greatness, such as investing at a high level, buying the home you want, or starting a business. For many of us, fear comes from a lack of knowledge and it takes an external, traumatizing incident to awaken us. Tiffany wants to reach people before they get to that point by normalizing financial education early on. Tiffany’s approach is three-pronged: knowledge, access, and community. She delivers knowledge through her blog, The Budgetnista, and podcast, Brown Ambition. For access, she showcases other financial educators, like the ChooseFI Foundation, to those who want a financial education for the children and community. And finally, she built Dreamcatchers for the third prong, community, so that people know they are not alone. The 10 components that constitute financial wholeness are budgeting, savings, debt, credit, and learning how to earn for the first tier. In the second tier, she includes investing for retirement and wealth, insurance, net worth, your professional money team, and estate planning. This foundation of financial wholeness is what you build the rest of your goals, hopes, and dreams on. While writing her book, Tiffany decided to Google, Jake the Thief, a man from her past who had caused her financial trauma. She discovered that he had escalated his thieving behavior from poor 20-something-year-old women to defrauding the United States Government and he is currently sitting in federal prison. Jake’s story is a cautionary tale. Sometimes the wrong thing or risky behavior works for a short period of time. But it’s important to learn how to manage your money from the ground up versus from the top down because you can lose it all if you don’t know how you really built what you built. Tiffany ended up with credit card and student loan debt and a mortgage she could no longer pay for, In total, it was around $300,000 in debt. That experience taught her that her father was right, slow and steady wins the race. She now takes her time and is very methodical with her decisions. Even it means taking a loss, she’ll take a short-term loss if it means a long-term win. Once she built her foundation, she was able to build wealth much more quickly. She wants others to have the opportunity to build the life that they want. After reading her book and matching one of her workshops, Jonathan says he likes how good Tiffany is at organizational structure and categorizing things. With budgeting, Tiffany assigns control categories to expenses. First, she lists all of the expenses and then assigns them to categories. The first category is B, or bills, like a mortage. Some of those bills are usage bills that fluctuate depending on usage, such as water or electricity. She puts a U in front of those Bs. Everything else is a C, meaning cash or choice expenses, because these are expenses you have choices over, like haircuts or gas for the car. Categorizing in this way can help determine if you have a spending-too-much issue, or a not-earning-enough issue, when there isn’t enough at the end of the month. If most of your money is going to Cs, you are spending too much because of your choices. If most is going to Bs and UBs, you aren’t making enough to take care of your financial responsibilities. When things are temporarily tight, you know you can look at your Cs and make some cuts there first. If it’s not enough, move to the second level, UBs. If that’s still not enough, move up to the Bs. Tiffany’s father taught her in an age-appropriate way about the financial consequences of her actions and says it’s a lesson we could learn as adults. A budget isn’t deprivation, Tiffany says it’s your “say yes plan”. Budgets are like your mom. She wants to say yes, but there is an “if” button. You can do the things you want, but only if you’ve lined yourself up in a way that makes it sustainable and safe. If you can master your budget and look at it differently, it is there to accommodate your goals, hopes, and dreams. But it might require you to give something up. Jonathan thinks Tiffany’s book speaks well to those who are broke. When writing it at the height of the pandemic when people were losing jobs and scared, she didn’t want to leave behind those starting in negative territory. She wanted to give them permission to focus just on their sleep, health, and safety. It’s okay to focus on expenses related to health and safety and tell everyone else that you don’t have it right now. You will get to them when you get to a safer place financially. 30% Whole is the chapter Jonathan thinks is worth the book’s price all on its own and you really need to know these tips if you are in debt, such as dealing with debt collectors or mortgage lenders during foreclosure. You can insist on a debt verification letter to verify that they have the right to inquire about it. Debt freedom is a goal, but it’s not the goal. You can be debt-free and still broke. Financial freedom is an incomplete picture. There may still be holes in areas like insurance and estate planning. The FIRE movement is great, but Tiffany believes there is a holistic view that is missing. Not matter how high or low your income, financial wholeness is available and accessible to everyone. Tiffany Aliche Website:  The Budgetnista Podcast: Brown Ambition Resources Mentioned In Today’s Conversation ChooseFI Episode 240 From Financial Imperfection to America’s Favorite Budget Expert | Tiffany Aliche Get a copy of Tiffany Aliche’s book at If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.
Winter is over, spring is here, and Brad and Jonathan have hosted their fifth live event on Stereo! With the new season and sense of hope, people are beginning to think more about traveling and travel rewards points. Start thinking about a trip you want to take and join us on Stereo next week for a live group travel rewards coaching call with Brad. The focus of this episode is college. How can you do college for less or do you even need to go to college at all? After more than 400 episodes, optimization tactics related to college have popped up frequently. What has changed for 2021, what are the best practices, and what should you be thinking about? In the FI community, we take a step back, see the world for what it truly is, and look at a problem a little bit differently. Society tells us that college is on the path to success, but knowing what we know now, there may be another way or a way to improve the ROI of going to college. Back a generation or so ago, it wasn’t uncommon for a college student to be the first in their family to attend college. College was seen as a way to make it into the middle class. It may have been true then, can still be true in some ways today, but the difference is the cost of college has risen dramatically while the earning potential did not rise at the same rate. We have to be looking at college through the lens of ROI and understand what we are trying to get out of it. College signals that you can follow the rules, but an undergraduate degree doesn’t necessarily mean you have skills or mastery over something and it’s skills that matter today. No one can afford to go to college for one hundred thousand dollars and come out earning $50,000. It will create financial chaos for a decade or more of your life. Most people’s incentives to go to college fall into one or more of these three areas: wanting to have the college experience, access to higher-income jobs, or a love of learning. The college experience was not high on Jonathan’s list of priorities, nor was attending a prestigious university, so he did two years of community college before transferring to Virginia Tech. Brad’s goal for college was to get a job upon graduation. Though he was accepted to Ivy League schools, he chose not to go to them as they were too expensive and opted for the University of Richmond instead. If having the college experience or getting into the right school are top priorities for you, listen to ChooseFI episodes 114 and 154 to learn more about how to discount the cost of college using test scores and the FAFSA. In episode 083, Cody Berman talked about how he approached applying for scholarships as if it was a part-time job and thought about it systematically. Rob, from The Simple StartUp, called in to say that his parents used geo-arbitrage and moved back to Ireland so that Rob and his siblings could go to college for much less. For graduate school, Rob coached women’s soccer in a graduate assistantship so that he was able to get his Master’s for free and earn a stipend. In episode 138, Anthony Gary discussed how he hacking his college room and board costs by becoming a Resident Assistant. Other past guests have talked about utilizing niche scholarships, like ones for golf caddies. One listener left a voicemail asking how to incentivized kids to apply for scholarships. Jonathan would like to try and gamify it for the kids and Brad believes that there are a lot of merit scholarships available if which college your child attends isn’t concerned with attending the most prestigious schools. He and Laura have made it clear with their daughters that they don’t care about prestige when it comes to college. Choosing where to go to college may mean saddling yourself with student loan debt for decades. We are having 17-year-olds make these decisions that can negatively affect their lives for decades without thought or counsel. Jonathan suggests slowing down and providing kids with a better option. In 202, the average cost of college was $110-120,000 and the average annual income for a graduate was $50,000. It’s a lot of debt for a young adult to get out from under. A little bit of optimization can make it so much easier. If looking to improve test scores, considering investing and paying the fee for test preparation services from companies like Edison Prep. Chase called in to talk about the ROI of college in the military. He is in the National guard and gets reimbursed from both the military and his employer for going to school. When you chose to put the time in to serve our country, it’s possible to optimize the compensation package and never have to work again. Options to pay for college and serve include ROTC and the US military service academies. Marjorie called in about geo-arbitraging college. She attended college in Puerto Rico for a fraction of the cost in the US mainland. Many states have a guaranteed admissions program where you can attend community college for two years and then are guaranteed acceptance to a four-year-school, saving two years of higher-priced tuition, but make sure you know what credits will transfer over to the university. How can you test out a college? In addition to getting college credit for AP courses, dual enrollment while in high school can be an option. CLEP testing is a little-known secret as discussed in episode 238 with Millionaire Educator. Another listener called in to mention Scholarship For Service, where you can get tuition and fees paid along with a $25,000 academic stipend with a requirement to later work for a federal agency. This program is similar to the Department of Defense Smart scholarship mentioned by Sunny Burns in episode 139. If your desire to go to college is for the love of learning, do you really need to go to college? Jonathan says that they have proven there is a replicable path to earning six figures a year without going to college. The son of ChooseFI’s CEO, Edmund Tee, is earning his associate’s degree while in high school thanks to dual enrollment then plans on taking a gap year to pursue Salesforce through Talent Stacker. Resources Mentioned In Today’s Conversation Inspire your 10-18-year-old with the free download 102 Business Ideas for Young Entrepreneurs.  Learn why the Chase Sapphire Preferred is one of our favorite travel rewards cards. ChooseFI Episode 114 Demystify College Scholarships | Brian Eufinger | Edison Prep (Start at [4:00]) ChooseFI Episode 154 Hacking the FAFSA | Brian Eufinger Seonwoo Lee (Start at [4:05]) Edison Prep ChooseFI Episode 083 A Second Generation FI Case Study | Cody Berman | FlytoFI (Start at [15:00]) ChooseFI Episode 138 How to Get Paid to Go to College with Anthony Gary (Start at [12:50]) Colleges and Universities That Award Merit Aid ChooseFI Episode 095 A Military Path to FI | Military Dollar (Start at [40:00]) ChooseFI 238 How to Test Out of College While You’re Still in High School | Millionaire Educator Modern States Scholarship For Service ChooseFI Episode 139 Reaching FI With Real Estate With Sunny Burns (Start at [5:35]) DoD Smart Scholarship Visit ChooseFI’s college resource article: Should You Go to College in 2021? Ditch the spreadsheets and upgrade to NetSuite. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
Do you have a budding entrepreneur at home? Help them bring their business ideas to life, learn the value of money, and gain future-proof skills. About a year ago, Rob Phelan, launched The Simple StartUp workbook and live coaching series aimed at helping kids aged 10-18 develop their first business idea. This episode will highlight lessons learned from his program. The Simple StartUp has given Brad a language to talk with his own girls about business and entrepreneurship. His daughter, Molly, has grasped the concept of affiliate marketing and how it might help her Gardening Gals business. Molly and her friend are now making slime and thinking about the costs of each component in the slime like little businesswomen. Rob says even if she doesn’t become an entrepreneur, she is learning personal finance skills, problem-solving, how to break down costs, and return on investment. These are conversations every parent can be having with their child as we are all customers of different businesses. Rob has put together a document that parents and kids can use as a launch board. Access it for free at At the core of any business idea is something that will solve a problem for someone else. The Simple StartUp tries to help kids get past the idea that they need to come up with the perfect idea before they can start a business. In reality, you’re going to go through multiple businesses or many iterations with your business. It does not need to be super creative or innovative to get started and learn about the process. In his document, Rob came up with 102 ideas that kids ages 10-18 can start at home right now if they have some skills and equipment available. The kids taking Rob’s course usually start with assets they already have by thinking about their skills, hobbies, and interests. They go through a thought exercise of thinking about complaints people have and what solutions they propose for solving them. Can they solve it in such a way that people are willing to pay for it? Parents can prompt their children to go through the thought exercise themselves when they have a complaint about something. Everyone has something that they are marginally better at than the people around them. Annalise messaged Jonathan to let him know that her Easter cards have been released. In The Simple StartUp, she has learned what a powerful selling tool word-of-mouth marketing can be and is working to create super fans by reaching back out to previous customers like Jonathan. What Analiese is doing is core to business development. Like Kevin Kelly states, you can make a living forever if you have 1000 true fans. Recommendations from someone people trust are better than any PR you can pay for. Rob has made some changes to the course since last Summer and Fall. Parents have been requesting to have immediate access to the course to feed existing passion and excitement rather than wait for the next cohort to begin. Not every kid needs the structure of a group course. As an alternative, Rob has created a self-paced, on-demand course that any entrepreneur can start right now. It includes video lessons and an online community of course alumni. The next cohort course will be The Simple StartUp Summer Challenge, beginning at the end of June and running for six weeks. How can parents foster these conversations with their children and help them start? Use the 102 Business Ideas document as a starting point and ask them to come up with other ideas for solving the problem and then how it could make money. The Simple StartUp student, Arianna, started a finger puppet business after talking through the business idea with Rob. She began using free tools create awareness for her product and after receiving positive feedback, switched to Etsy which would direct customers to her. She has learned a ton in the process and had fun doing it. Arianna’s mother, Shelia, began listing to ChooseFI to learn how to take care of her debt but when she heard about The Simple StartUp, she thought it would be perfect for her teen. Initially, Arianna wasn’t thrilled about doing a program over the summer, but she reluctantly agreed. Nervous at first, she liked the videos and found everyone in the chat to be friendly. When coming up with her idea, Arianna knew she liked crafting, plus her grandmother had taught her how to sew. Outside of class, Sheila helped Arianna understand terms like profit and to use coupons when purchasing supplies. Arianna’s lightbulb moment came from selling items in the video game Animal Crossing. She realized she could incentivize people to buy more with quantity discounts. Her business name is Plushet, a mash-up of plushie and puppet, and its mission is to bring the family together through imagination and puppets. Arianna discovered that she’s pretty good at making logos after making one for a fellow classmate. Not only does Arianna encourage other kids to take the course, but says it’s better than video games and she would also even like to do it again. Sheila believes the course opens the door to learning new skillsets. Resources Mentioned In Today’s Conversation Get free instant access to 102 Business Ideas for Young Entrepreneurs Annaliese’s store: Creative Card Designs Get on The Simple StartUp Summer Challenge waitlist! Purchase The Simple StartUp workbook. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
After four weeks of hosting the live weekly show via Stereo, Brad and Jonathan continue to refine the format and come up with ideas for improving the experience. Jonathan needs some specialized dental work performed and the dentist he found is out-of-network. Insurance isn’t going to cover much in this situation, but thankfully, it doesn’t put him in financial straits. As they reminisce about being children of the 80s, Brad and Jonathan come to the conclusion that time moves on and the rulebook changes. If you are stuck in a world that doesn’t exist, you aren’t going to be successful. Be aware that things change and be open-minded. Google is coming out with its own certificate programs in project management, data analytics, and user experience design through Coursera what will cost most around $250. Google is partnering with 130 other companies to partner with them to hire the graduates of these programs. In past decades, a college degree may have mattered, but in 2020, employers are looking for what can you do or what have you done, not necessarily the degree. Listener Colin called in to say that he started a side hustle last year teaching people computer programming and asked about how to go about finding new clients. Jonathan says that as a business owner, Colin has a product he has created and needs to figure out how to deliver that product, ensure a great experience, find new customers, and finally scale and grow the business. For Colin’s business, is there an awareness problem or is there a problem converting awareness into sales? Brad says something that has worked for him is making connections within his niche and be authentic. Jonathan suggests establishing yourself as a subject matter expert using LinkedIn and Quora and a blog or podcast to begin attracting people interested in the subject. Another thing Colin should do is demonstrate his course has value, get testimonials, and constantly test and iterate. Marjorie called in because she knows how much Jonathan loves the Paprika app, but recommends a similar app called Whisk. It can download recipes from the internet, but you can also take pictures of recipes to upload to the app. Plus, it organizes recipes really well, has a weekly meal planner, and can create a shopping list. The next caller said she loved the coaching call that Jonathan did with Corrine and would love to hear more of those kinds of episodes. Jonathan worked with Households of FI member, Corrine to map out her FI number. Jonathan recommends watching the video for that episode because he shared a lot of screenshots while working with Corrine. Similar to the recipe app Whisk, Brad said that he could have saved money on his recent CT scan using MDSave. Instead of being charged $2,093 for his scan, a provider found through MDSave would have cost him just $289. He was eventually able to negotiate the bill down to around $1,300, but that is still much higher than he needed to pay. The next caller from LA is a side hustle addict. He has been self-employed his whole life and realizes that his nest egg is very small. He wants to know where he should focus his investments for retirement. The caller has a choice between a SEP IRA, a Simple IRA, and a solo 401K. There may be some advantages to using one over the other depending on the size of the business. Brad has set up a SEP IRA and thinks that a solo 401K would have allowed him to defer more money by contributing as the employee and employer. A SEP IRA only allows for employer contributions. If he still meets the income thresholds, the option for a Roth IRA may also be available. There is little downside to contributing to a Roth IRS since contributions can be withdrawn tax and penalty-free. The next caller shared what they would do if looking for a career move. For their technology and financial services company, they would focus on people and find out everything they could about them so that they could engage in relevant small talk. This advice follows nicely with the points Chris Hutchins made in episode 121R. A weak point for a lot of is how can you build a system around building authentic relationships over time? This was something discussed with Jordan Harbinger in episode 233. The next caller wants to know how to account for a mortgage that you expect to pay off during retirement when calculating your FI number. Jonathan plans to pay his mortgage off before beginning to drawdown his investments, however, he calculates his FI number based on what his life costs with a mortgage. It gives him a bit of a fudge factor. Your FI number is calculated by taking your annual expenses and multiplying it by 25. If you plan on paying your mortgage off before retiring, remove the payment from your annual expenses. While principal and interest can be eliminated, taxes and insurance will not be and should be included in your annual expenses. A multi-phased approach will need to be employed to calculate your FI number if planning on paying off the mortgage during retirement. Listener Phil called and left a voicemail asking about tax tips for those with side hustle income and how to balance work-life, side work, and life in general. Jonathan thinks turning a hobby into a business is a great way to explore something within the confines of a business entity. Brad’s tax tip is good record keeping and keeping things separate from your personal accounts. Jonathan also likes the thought of putting advertising expenses on a business card that earns travel rewards, like the Chase Ink Business Preferred, since advertising is a legitimate deductible business expense. A work-life balance can be tough. Jonathan says the biggest misconception is that you’re always going to be balanced all of the time but there will be sprints and tilts. It’s how it averages out over time. Experiment and test a bunch of different things, but don’t put a massive amount of time into something with no ROI or thought to the balance and other areas of our life. If you aren’t going to be in balance and there are other people relying on you, have a conversation about it. Communication will always buy you more room. Map out the cadence to your life and realize where you have control of your time. You might have a boss that needs to sign off on it, but if you work for yourself, you don’t need to ask for permission to make time. Resources Mentioned In Today’s Conversation ChooseFI Episode 121R How to Get Any Job ChooseFI Episode 304 Mapping Out Your FI Number | Households of FI with Corrine MDSave ChooseFI Episode 274 Tax Planning 2020 ChooseFI Episode 289 The Roth 401K ChooseFI Episode 233 Networking with Jordan Harbinger Join us for the next live show at ChooseFI Episode 168 Make Time Learn why the Chase Sapphire Preferred is one of our favorite cards. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
Diania Merriam is the Chief Economeist behind the EconoMe conference, a two-day event at the University of Cincinnati whose roots are in the FIRE movement. In 2019, Diania was preparing for the launch of EconoMe in the spring of 2020. She could not have anticipated the risk of a global pandemic impacting her conference, but it was successfully held on March 7, 2020, just before the event location’s shut down. The 2020 event hosted 250 attendees and nine expert speakers. After putting 20 months of work into the conference, Diania was gratified to hear that 90% of participants loved the event and would recommend it to a friend. Getting together as a community is something that has been missed in the financial independence community over the last year. While some may label the movement as a cult, that is s misconception. Like many others in the financial independence community, Diania felt the need to share content to make it accessible and help those receptive to the message get their financial houses in order, much like Mr. Money Mustache did for her. She finds that many people have preconceived notions and assumptions, thinking that it won’t work for their personal situations, but Diania believes putting more content out there will help others it’s a mindset and there are no hard and fast rules. Although some may believe you have to be a white 3o-something male with a tech career to be in the FIRE movement, Brad points out that is far from the reality ChooseFI sees in its Facebook and local groups. Brad says that 90% of the responses to his weekly email are from women. Financial literacy is for everyone and FIRE is merely an aggressive and enthusiastic brand of it. Though there seems to be an assumption that those in the FIRE movement earn high incomes while eating rice and beans, Diania says in truth, it is rather agnostic when it comes to income. It might be easier for those with high incomes, but those with lower incomes can also improve their finances. The way to improve your finances is to increase income, decrease spending, and invest the gap. What is most important is the gap. The loudest voices in the space tend to talk about frugality because it’s the easiest thing you can do when first starting out, however, ideally, you should be doing both. Jonathan gets angry at the assumption that there’s little to nothing you can do to increase your income. You aren’t stuck at your current salary level. A lot of personal finance content revolves around sacrifice and struggle, but there is a sense of optimism in the FIRE community. You have control over reducing your expenses and increasing your income. Coming across FIRE content helped Diania realize how much privilege she had and enabled her to be honest about how wasteful her spending really was. For Brad, the heart of financial independence is optimism and an internal locus of control. You can affect change on your life with tiny actions that compound, resulting in success. For awhile, Diania wanted to be the female Mr. Money Mustache. It took her a while to realize she needed to be herself and figure out her own flavor of FI that was based on her own goals. Diania’s original plan looked a lot like other bloggers, where she would reach a net worth of 25 times her annual expenses and then retire at 40-years-old. However, life presented other options and she began to ask what she wanted out of life and what she wanted to create. Now she feels like slowing down instead of just racing to meet her FI number. Jonathan likes to think about life in terms of five and ten-year timelines. Ten years ago, did you have any idea you’d be where you are today? Brad notes that just being on the path to FI gives you the space to explore what you want your life to look like and what you want to focus on. The nuts and bolts of money is pretty easy to figure out. Figuring out how you want to spend the next 60 years of life is harder. Like Diania, because Jonathan was on the path to FI, he was to explore interest-led learning, turn it into an income stream, and eventually leave his career as a pharmacist. One of the lessons Diania has learned is that your money is only as valuable as your clarity on how you are going to use it. When her work situation started to degrade and become toxic, she realized she was already at Coast FI and had enough FU money where she could take some educated risks and look at self-employment. Being at Cost FI meant that Diania had already saved up enough money that would grow enough to support her in retirement. In the meantime, she only needed to cover her annual expenses without adding to retirement. Her life right now looks a lot like how she would want it to look if she was at FI and retired. Retirement has a branding problem. Another misconception about FI is that if you are retired, you aren’t working. Regardless of your age, if you are retired, you shouldn’t be sitting around doing nothing. EconoMe was born out of Diania asking herself what she would do if she no longer had to work for money. She wanted to create a party about money. Why wait for retirement? Is there a way to change your life around and do it now? Greed is another misconception associated with the FI community, but Diania believes FI puts you in a position to be really generous. She has experienced the generosity of those in the community who have been generous with their time to help her with her conference dream. When you have figured out money for yourself, there’s nothing left to do but help other people. For example, 20% of the EconoMe conference attendees were over 50 or had already achieved FI, but there were there to share knowledge and cheer others on. Diania thinks the benefit of having money is to be able to share it in some capacity through what you create and the gifts that you give. Brad agrees with the generosity of the community. FI allows you to rethink how you relate to people and gives you an abundance mindset. A quote Dinia loves is, “If you look at your inner circle and you aren’t inspired, you don’t have an inner circle. You have a cage“. She is incredibly inspired by all the people she has met in the community. The three most important resources that have a huge effect on your life are time, money, and energy. The people you surround yourself with have a huge effect on your energy. Is FI a fad that everyone will move on from in exchange for the next big thing? Diania doesn’t think so. Like time and energy, money is a resource and we’ll always be fascinated in optimizing our resources. FIRE is an identification with something to build habits and meet goals. There has been an identity and support system created around it. Rather than thinking of FI as a fad, Brad thinks we are normalizing the conversation and there are more and more people to talk to about it without feeling like a weirdo. The EconoMe conference will be held this year on November 13-14 at the University of Cincinnati. Some of the speakers and activities have already been announced and can be found on the website. There will also be more breakout sessions to facilitate learning from each other. Tickets are on sale now. However, if large groups are not allowed to gather by November, EconoMe will not pivot to virtual. Instead, they have backup dates of March 19-20, 2022. The decision and notification will be made by September 1, 2021. Earlybird tickets are available until April 10th. 200 tickets are available at $149, and then the price jumps to $199. Diania Merriam Website:  EconoMe Conference Podcast: Optimal Finance Daily Resources Mentioned In Today’s Conversation ChooseFI Episode 150 Accountability | Diania Merriam EconoMe Conference Get started on your own path to financial independence at If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.      
It’s the third edition of ChooseFI’s live and interactive show via Stereo. You can submit a question, feedback, or comment, and find out how to join us for the live event by visiting Brad and Jonathan are getting high on life. Not only have Brad’s daughters started back at in-person school, but he and Laura were also able to attend a Crossfit class together. Meanwhile, Jonathan is successfully combating fatigue by getting the right amount of sleep, cutting out caffeine, and maintaining high hydration levels with juices. In an ongoing effort to get 1% better, Brad recently reviewed his credit card bills. He found a $50 recurring charge for his daughter’s saxophone rental and decided to buy it for $500 rather than continue incurring the rental fee. He suggests doing this twice a year and asking if those recurring charges are continuing to serve you. Jonathan recently canceled his Netflix subscription and wonders if there is a way to the effort of it and streamline our finances. In a hypothetical example of a $2,000 car loan with a 2-3% interest rate, Jonathan asks if Brad would just pay the balance off versus keeping a monthly payment. At that low of an interest rate, Brad would not, but because of the intersection between math and psychology, there are others so debt adverse that they would pay it off. For higher interest debt or 8-12% or more, Brad believes that is more of a hair-on-fire scenario in which paying the debt off as quickly as possible would be best. Regardless of which side of the scenario you fall on, there is nuance and stigma. Rather than allow others to tell you what you can and can’t do, it’s important to know yourself and why you make the choice you do. Understanding the why behind the car payment is a better thought exercise. If it’s because it gives you the cash flow to finance even more stuff, it can grow to become a difficult position is dig yourself out of. Financing allows you to trade your most precious non-renewable resource, time, for more stuff. With every dollar you are saving, are you using it to invest, or are you buying more stuff? If you are continuing to buy more stuff, then you are still in the trap and aren’t looking at money as a tool. Because Jonathan is a spender, he wants to keep things simple and doesn’t like having structural payments. In the hypothetical scenario, he would feel the need to pay off even a low-interest rate car loan. The first listener voicemail wants to know how much in retirement is enough to adequately cover long-term care. His original goal was $10 million at age 65. According to the 4% rule, that would give the listener $400,000 a year to live off of, which is a big number. It comes down to what does your life cost? Traditional retirement calculators all start from the point of “what do you earn today”, rather than “what does your life cost”. Your income is irrelevant. In retirement, you need to cover what your life will cost. Health care insurance is based on actuarial tables put into place to ensure the provider doesn’t, in aggregate, lose money on you. The same is true for long-term care insurance. It’s priced so that providers don’t lose money on you. What is the effort to reach a $10 million balance to cover the cost of long-term care costing you in terms of time and health now? You can focus on putting systems into place now that give you the best chance to reclaim decades of quality life. Rob Phelan, fromThe Simple StartUp, called in with a question about being open to new technologies and investments. Brad isn’t a first-mover on anything. However, he has a diverse set of interests and prides himself on knowing when the tipping point is to jump in earlier than the average person. He’s done some reading on non-fungible tokens (NFTs) and believes they could be transformative 10-20 years from now. Jonathan’s process is curation and synthesis. When he reads, he skims everything and sees the point when something new becomes real. He’ll do a deep five if it fits into one of the buckets he’s interested in. He’s been doing that deep dive into crypto and blockchain, but not NFTs. While neither Brad nor Jonathan can get behind spending $2.5 million for Jack Dorsey’s first Tweet, they do agree digital ownership is interesting because of all the unique ways the concept could be implemented. Next up is a seven-year-old who says they want to learn about investing. It starts with saving. What Brad tells his own kids is that life gets so much easier if you can save money. If you spend every cent you earn, it takes away a lot of choices in life and gives them fewer options. The higher you can make your savings rate, the more freedom you’ll have. As for investing, think long-term, like many decades of investing. With a long investing horizon, the best chance at being really wealthy is with low-cost broad-based index funds or ETFs. When Jonathan’s kids are older, he thinks he will try and attach a real company to the discussion and carve out a portion to invest in it. It would be one they know and has products they get excited about to help make the feeling of ownership real. Natalie called in to say that she just opened an M1 Finance account for her traditional IRA contributions as well as a savings account so she can earn 1% on it. However, she’s never done a portfolio rebalance. Rebalancing can be scary and easy to avoid. It comes back to having a plan and an investor policy statement and not letting your brain get in the way. M1 can do this automatically and there may be some tax consequences if it is done in a taxable account. Rebalance in your portfolio totality, not within individual accounts. If you don’t have a plan, go and figure out what your goals are and have the plan match them. Rebalancing can also be done by making weighted contributions. James, who is in Jonathan’s podcasting course, asks about speeding up his path to FI by purchasing multi-family real estate by withdrawing from a 401K and obtaining a HELOC. While there are likely both success and horror stories of others who have gone that route, Jonathan would look for ways to avoid 401K withdrawals or taking a line of credit against your home. Brad would only go into his 401K as a last resort. 401K withdrawals are subject to a 10% penalty and would be taxed as ordinary income. Rather than a 401K withdrawal, Jonathan says that if the deal is good enough, the money will come. Bringing on additional investors may be an alternative. Network, be creative, and try to cap the downside. Resources Mentioned In Today’s Conversation Join the live show Tuesdays at 7:30 Eastern with Stereo! ChooseFI Episode 297 From Pandemic Layoff to $100K+ | A Salesforce Success Story Start your new language learning journey today with Babbel and get six months for the price of three with promo code “ChooseFI”. ChooseFI Episode 016 House Hacking with Coach Carson If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
Jonathan checks back in with Corinne from the Households of FI series to look at her numbers, goals, and map out a FI plan. Financial independence is not about having the most money. In the pursuit of FI, the math is simple, but the math will change depending on your goals. It’s important to start with understanding what you want your ideal day to look like. Following Corinne’s last coaching session with Jillian, she learned how to build good habits and strategies to get closer to the goals she wants. One of the strategies she’s using is her phone to set reminders for the goals she wants to achieve. The reminders hold her accountable without her having to remember everything. Jonathan pointed out one of the great pieces of advice from the episode with Jillian was her advice to explore the goals you find yourself resisting giving even two minutes to. What is it in your subconscious that is sabotaging your goals? Corinne is on track to become a partner at her firm but that comes with a lot of expectations. In an exercise with Jillian, she was asked to write down what her ideal day would look like. to start, she’s been writing down which activities are energizing and which are draining. It has helped her to manufacture her day to be the kind of day that makes her want to get up and go to work in the morning. She discovering that she doesn’t have to work as many hours as everyone one else. She can balance it out, earning a little less money while being happier. We can make time to make each week more memorable and enjoyable when we spend less time on meanless activities. When you take what earn and subtract what you spend, what you are left with is the gap. When you live paycheck to paycheck, there is no gap. Corinne earns $120,000 a year as an accountant. She was in a five-year program where she got her Bachelor’s and Master’s degree that gave her enough requirements to take the CPA exam. Due to a scholarship, she graduated without any student loan debt. A similar recent graduate starting out now would make around $50,000 a year. She was able to double her salary and excel by narrowing her focus and becoming an expert in that space. In her industry, there are clearly defined roles with specific salary ranges. Increasing income requires the desire to progress and take on more responsibility. Becoming a partner wasn’t always on her radar, but she liked the idea of having ownership in the business. Corinne hasn’t researched the details of the retirement payout for partners at her firm, but there is some form of payout in retirement. Since she is on the trajectory to becoming partner, being able to project the retirement payout will help to calculate her FI number. One of Jonathan’s favorite income tax calculators is at because it will incorporate state and local taxes. Using Corinne’s salary, he calculates her federal tax plus FICA and Social Security is $29,227. Since she maxes out her 401K, it reduces her tax to $23,000 and saves her more than $6,000 in income tax. The income she brings home is then $77,445, or around $6,500 per month. Now looking at Corinne’s expenses, her mortgage is approximately $1,000 and she spends $500-550 a month on food. She does not have a car payment but between gas and other expenses, it’s around $100 a month. Utilities run $400 per month. Additional budget categories include dining out and shopping for $500, charitable giving at $200, housekeeping is $100, and her HOA bill is $150. Though travel is on hold at the moment, she’s like to budget $250 a month for vacations. And finally, an additional $200 was included to cover odds and ends. Corinne’s total monthly cost-of-living is $3,375. To find out her gap, Jonathan takes her net monthly pay of $6,500 and subtracts her monthly expenses of $3,375 to calculate a gap of $3,125 each month. Jonathan suggests putting the gap to work for her as quickly as possible and sending it to her investment strategy. Before doing this exercise, Corinne had no idea what her gap was and grabbed a random number to move to savings. To start working on a plan for financial independence, Jonathan uses net worth and age. Corrine’s 401K balance is about $150K and her taxable account has another $100K making her invested net worth $250,000. She is 32 years old. Using ChooseFI’s simple Retirement Projection calculator, Jonathan plugged in Corinne’s numbers. Her FI number is $1,012,500. Next, Jonathan uses ChooseFI’s Future Value of Investments calculator to project how many years it will take Corinne to reach her FI number through both the growth of her current invested balance and her monthly contributions. Using an 8% rate of return, in 10 years Corinne will have $1.4 million far exceeding her FI number. Sometime between 7 and 8 years is when she will reach financial independence. The exercise is energizing for Corinne who previously thought she would need to eat rice and beans to reach financial independence in 10 years. She was nervous to see the numbers but now finds it motivating. Her next step will be to ensure she’s taking that extra money every month and putting it to work for her. Once you’ve got what you earn, what you spend, identify the gap, and decide what you’re going to do with the gap, you’ve got your FI plan in place. Resources Mentioned In Today’s Conversation Join the live show Tuesdays at 7:30 pm Eastern on Stereo! ChooseFI Episode 243 Households of FI | Corinne and Jillian Johnsrud Watch ChooseFI episodes at ChooseFI Episode 168 Make Time Take ChooseFI’s free 5-day challenge. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
In the second episode in the series of taking the show live online via the Stereo app, listeners ask questions and interact during a replay of this live podcast from Tuesday evening. Experimenting with this new show format, Brad and Jonathan are adding to their talents stack and themselves getting better through the often mentioned concept of the aggregation of marginal gains. Unfortunately, just because you make progress in an area, it doesn’t always mean you hold on to those gains. While your finances can be put on autopilot, physical and mental health are areas prone to backsliding. Take a little time for self-care. While reaching financial independence isn’t as simple as packing your lunch every day, it can be symbolic of the transformation to a mindset to take care of all the small things. It’s that effort, in the aggregate, that gives you the space to increase your savings rate, optimize investments, and earn market gains. Brad has been trying to apply the concept to his health, which has also required that he overcome several limiting beliefs. All of the changes he’s been making are small, like stretching, doing pushups, or yoga in the evening while watching TV with his family. And after hearing about how important vitamin D is to metabolic health, he tested his levels and found out they were dangerously low. In his attempt to live a more examined life, Brad has noticed certain foods lead to inflammation, and that his energy level fluctuates with the seasons. Likewise, Jonathan has been examining his use of caffeine and trying to decide if he is better off with it or without it. He would prefer to have a natural, steady energy state. He’s noticed that by decreasing processed sugars, he has more energy and wakes up fresher. Brad has been using a 10-minute nidra yoga YouTube video as a guided sleep meditation and says it’s like getting a two-hour nap. Listener Jackie left a voicemail asking about taking a little risk by putting emergency funds into the bond market. Jonathan says there’s no one answer, but he thinks we need to look at what we’re protecting ourselves against and the opportunity cost that comes with having a lot of money on hand to handle emergencies. Most of us will benefit from having $1,000 in the bank to start, and then moving to one or two months of expenses in cash. As your net worth grows, Jonathan would prefer to have the money in a fully-funded emergency fund grow. Since recording episode 066 with Big ERN, Brad has been trying to come up with a true financial emergency scenario. He’s been unable to think of a scenario when he might need cash in a hurry that couldn’t be covered immediately with a credit card. In a true emergency, he has invested assets he could sell and transfer to his checking account to then pay the credit card bill. When you keep an emergency fund in a savings account, the opportunity costs are the potential gains that could have been made by having those funds invested. Jonathan keeps a couple of months of cash flow. In addition to retirement investments, he also has a taxable brokerage account with M1 Finance. His investment pies in M1 have been allocated for different timelines. For his shorter timeline fund, he thinks about it more like a retiree would and wants it stable. Therefore, he keeps it in a fund that is negatively correlated to the stock market, such as bonds and precious metals. For emergencies, one of the benefits of M1 Borrow is access to a low-interest margin loan against your invested non-retirement assets. The second listener voicemail asks about the ability to convert and access 401K investments after a five-year waiting period for someone who retires early. Brad believes the listener has a Roth 401K, in which contributions are made with after-tax dollars and may be withdrawn tax-free. The five-year waiting requirement applies to Roth IRA Conversion where traditional 401K contributions are converted to a Roth IRA and it is a taxable event. When rolling over money from a Roth 401K to a Roth IRA, it is not taxable and there’s no wait to access contributions. At 59 and a half, all of the money may be accessed penalty-free. A listener in the Netherlands wanted to know if Brad and Jonathan would consider having a guest from another country on the podcast. Since the FI movement is worldwide, ChooseFI has listeners from all over. Exploring non-American guests is definitely something to be examined for general FI topics, as it would be difficult to speak about other countries’ tax codes. The ChooseFI local groups in international locations would be a great option and resource. Listener Gavin asks about how best to decide post-FI plans. Jonathan stresses that FI is a number and not an action. It does not mean you have to leave your job. FI gives you options, time, and resources and allows you to explore what you want to do with those. Having some space financially allows you to make choices from a position of power. You can make small-scale tests before wholesale life choices. The money is the easy part. Figuring out what lights you up is the difficult part. Listener Natalie has connected with the idea of maximizing her savings but is sitting a significant amount of cash while she decides between renting and buying. She wants to know how easy it is to put money in the market if she might need it in three to five years. Of the big traditional brokerages, Jonathan thinks Fidelity is the easiest to learn from a user interface perspective. Of the software-based institutions, he likes M1. Brad says from purely a conceptual-level, it’s easy to get money in and out of the market as they aren’t subject to the same rules retirement accounts are. However, it’s good to note that the stock markets have business hours and may be closed when you want to make a transaction and that some companies like M1 limit when transactions can take place. In live feedback of the 401K discussion, a listener pointed out that there is a phantom five-year clock on in-plan Roth conversions. Marjorie left a voicemail that she is trying to get her family back in Puerto Rico on board and is looking for Spanish language FI resources. Jonathan has been helping Lorena start a Spanish language personal finance podcast, De Peso a Peso. Resources Mentioned In Today’s Conversation Join the live show Tuesdays at 7:30 pm Eastern! The Tim Ferris Show The Peter Attia Drive Podcast Ulta Lab Tests The Huberman Lap Podcast Yoga Nidra ChooseFI Episode 066 The Emergency Fund…Is it a Bad Idea? with Big ERN ChooseFI Episode 194 The Role of Bonds in a Portfolio Risk Parity Radio ChooseFI Episode 292 The Complexity in Simplicity at M1 | Brian Barnes M1 Finance Review: Completely Free Automated Investing ChooseFI Episode 289 The Roth 401K and Meal Planning Made Easy Find your local ChooseFI group. ChooseFI Episode 049 Alan Donegan and The Escape Artist | The Aggregation of Marginal Gains ChooseFI Episode 117 Making the Case for Part-Time with Bradley Rice ChooseFI Episode 047 The Cult of Home Ownership and Crushing Geo-Arbitrage | Millienial Revolution De Peso a Peso Podcast Join Jonathan’s free podcast course at Talent Stacker. If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
We are checking back in with Vivan from our Households of FI series who has been paired with mentor, Tae from Financial Tortoise, to go over strategies, best practices, and considerations for multiple generations living under one roof. In many Asian cultures, adult children are responsible for taking care of and being financially responsible for aging parents while also raising their own children, often referred to as the Sandwich Generation. Whether or not being financially responsible for parents is part of your culture, caring for or assisting them to make decisions as they age may be in your future. Tae writes from the perspective of the Sandwich Generation on his blog, Financial Tortoise. Living with him and his wife are his two kids and both of his parents. During the last 10 years in this living arrangement, he’s paid off $105,000 in student loans and is pursuing financial independence. Vivian has been fighting breast cancer while dealing with a separation and child custody battle. She also has her mom living with her, who is helping out with her child, but she finds that there are generational differences leading to misunderstandings. She has questions about what kind of disability or long-term care insurance she would be getting for them. At 61, Vivian’s mom doesn’t yet qualify for Medicare and hasn’t applied for Social Security, but she does have a small pension from working for the Los Angeles School District. Tae thinks there may be healthcare gap insurance available if her mom qualifies. Her mom retired from work last year. If she applies for Social Security early at 62, she’ll earn 20-30% less. If she waits until age 700, she’ll earn 20-30% more. As long as she has paid into Social Security for at least 10 years, she is eligible. If she hasn’t been receiving paper summary statements, she can check online and see what her estimated benefits will be. Tae’s parents moved in with him right when they began collecting Social Security. They didn’t understand retirement accounts, but they did have real estate and rolled over equity into the down payment for a new home they could all live in and Tae took over the mortgage. Since Vivian’s mom lives with her, she shouldn’t have major expenses and her pension and Social Security should be enough to live one, but she would like to travel so Tae suggests looking into travel hacking. As for healthcare, Vivian’s mom retired because of health issues and is no longer able to work. She currently pays for private insurance, but at 61, there isn’t an ideal solution until age 65 when she becomes eligible for Medicare. She will need to enroll 3 months before she turns 65. Basic Medicare is covered, but if she wants things like hospital visits covered, she will pay a premium that is taken directly from Social Security if she is collecting it. Tae does not have long-term care insurance for his parents because it is hard to find affordable long-term care insurance now, but skilled nursing and assisted living may be alternatives. The best thing you can do is to take care of yourself. He thinks people in the FI community have the advantage of having more time to spend figuring out a care solution when the time comes. Vivian asked if Tae his FI plan included healthcare spending for his parents. He does not, but he does plan for them to age in place, which means maintaining the larger home. Living through the Vietnam war has created conflicts in some areas, like hoarding food and water. Her mother helps out with cooking, child care, and food costs, but Vivian pays for everything else. One of the reasons why Tae decided to try co-habiting with his parents was for help with childcare. It helped them fully commit to their careers. While there can be a huge cultural chasm when living with your parents as adults, Tae has learned empathy and takes time to try and understand where they are coming from. Rather than try to control what his parents are doing with their money, Tae tries to ensure his own expenses are as strong as possible. If something were to happen with his parents, if his own finances are strong, he’ll be able to figure out how to deal with it. Vivian is trying to save 50% of her income as a pharmacist and her parents think she is being stingy, which runs counter to many Asian cultures where you wear your wealth. She was excited when she found ChooseFI because she previously believed you needed to have your own business to become financially independent. She’s now following the advice in The Simple Path to Wealth. Saving for college is another question Vivian has. Tae’s children are 4 and 6 but he’s started 529 accounts for them since there is some flexibility with them. However, he believes the future of work could look different. He thinks about how he can help his children become productive adults rather than blindly save for college. Tae thinks it’s good to start thinking about estate planning with her parents. He and his wife just did their own, setting up a trust and power of attorney which motivated his parents to do the same. There is a cost for everything and there are both positives and negatives when putting families together under one roof. You have to be aware of it going in. The major takeaways from Tae and Vivian’s conversation are the need for managing the gap before Medicare kicks in, navigating Social Security, and feed estate planning. Tae Website:  Financial Tortoise Resources Mentioned In Today’s Conversation ChooseFI Episode 186 Mulitple Generations Under One Roof With Financial Tortoise ChooseFI Episode 221 Introducing Our Households of FI! Part 1 ChooseFI Episode 255 Vivian Connects with Leslie Tayne The Simple Path to Wealth by JL Collins Smart Money Mama’s Family Emergency Binder Get started on your path to financial independence at If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
What are you getting hung up on with relationships and money? We continue the conversation in Part 2 of the Relationships and Money series with Jillian Johnsrud. Although March is finally here and the sunshine is motivating Jonathan to push away the processed carbs in favor of broccoli and hummus, Richmond’s recent ice storms had Brad using his stash of travel rewards for the first time in over a year. Travel rewards come in handy at home too. After losing power from the storm, Brad called up a local Hyatt to see if they had power and was able to use 5,000 with Hyatt to book a room, and quickly move his family out of a cold home for the night. If he had been short on Hyatt points, he could have quickly transferred Chase Ultimate Rewards points over to cover the rate. Even if you aren’t ready to travel now, plan ahead and start stockpiling travel rewards points now so you have them once you do want to travel again. Take the travel course at to learn how. The next roundup episodes will feature Alan Donegan and focus on building a business in 2021. Submit a voicemail with the questions and concerns you would like to have addressed at Have a question on a different topic? Submit your voicemail and join the live radio shows held on Stereo, Tuesdays at 7:30 pm Eastern. In Episode 300 with Jillian, she discussed how your past money story motivates you and creates fear as it pertains to money and relationships. Part 2 of the series examines being financially independent while still dependent. Listener Asia is engaged and works full-time while her partner is still going to school and works part-time. They each have vastly different money stories and have started combining finances. Her partner is still receiving some financial support from her parents. While her partner wants to begin become more independent, Asia wonders if it would be smarter to continue as things are. Jonathan sees three issues with Asia and her partner’s situation: attachment, boundaries, and economics. For Jillian, one of the elements was what habits and practices Asia’s fiance can take to feel like a financial grown-up and equal partner in the relationship. She also considered what it might mean for the fiance to receive from her parents, as well as what it might mean to the fiance’s parent to give. Jonathan sees nothing wrong with accepting help so long as there are no boundary or communication issues or strings attached. Brad thinks it sounds like a positive situation but is also concerned about ulterior motives. After graduating college, Brad lived at home with his parents while saving 90% of his income which gave him a huge jumpstart on his path to FI. Jonathan noted that there could potentially be some tax-filing issues that could be related to the child tax credit and paying for dependent healthcare that could be important to figure out. Jillian says society’s rules don’t matter, you can write your own rules of what it means to be a financial grown-up without there being a contradiction. Help can be a sweet thing family can do, but even she had issues with family members trying to control her with financial assistance while she went to school. There are other things you can do to feel like a financial grown-up, like tracking expenses or coming up with a debt repayment plan. You can be a financial grown-up, take advantage of opportunities without taking advantage of relatives as long as your goals are aligned and they want to see you succeed. Brad wants to be able to help his kids out when they are older. He respects parents who charge their children rent and teach them to be financially responsible, but he hopes to instill those lessons throughout childhood. Listener Precious will be getting married soon. So far they have been sending money back and forth to each other, but she wants to be more efficient and is wondering what the best way to begin combining finances is. While Jillian wants to believe all love will last forever, she advises against opening up a credit card together in the first few years of marriage due to the bills being divided up in a painful divorce process. However, opening up a joint checking account is a good baby step since at worst only the money in the account can be spent without going into debt. How much each person contributes and what bills get paid from it opens up the lines of communication. When you are young and your finances are simple, combining all of your finances makes a lot of sense. In contrast, Jillian’s financial life is much more complicated and if she had to remarry, she isn’t sure she would combine her finances with anyone else. Credit card and car debt can be kept separate, but it’s usually better to have both names on a home loan since real estate is an asset being grown together. But also so that it doesn’t become a painful process to untether if necessary in the future. In a new marriage, Jonathan says he wouldn’t feel comfortable being a co-signer on a credit card since he would be legally responsible but have no insight into what was going on until it crashes into a wall. On the other hand, adding an authorized user gives you more control and insight into how the card is being used and it can be revoked. Brad and Jonathan have their own bobblehead figure! It was given to them by All-Star Money for being creators of content who inspire readers to improve their financial situations and helped develop an engaged personal finance community. Jillian Johnsrud Website: Podcast: Everyday Courage Resources Mentioned In Today’s Conversation Join us for the live show Tuesdays at 7:30 Eastern on Stereo.  Travel more and spend a lot less with the ChooseFI Travel Rewards 101 course. The Chase Sapphire Preferred Card—Great for Cash Back or Travel Rewards ChooseFI Episode 300 Relationships and Money with Jillian Johnsrud ChooseFI Episode 186 Multiple Generations Under One Roof With Financial Tortise Create a powerful money plan with The One Hour Millionaire Course and get $30 off with the code “ChooseFI30”. All-Star Money’s All-Star Originals If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI’s 3-card credit card strategy.  Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.  
Comments (52)


Having trouble downloading this one.

Mar 2nd

Amber Ackerson

I never thought to use instagram or twitter to find work. great podcast!

Jan 14th

Matthew McKibben

I bought my first rental property Jan 1st 2020. it's a triplex in St. Paul, MN. I'm house hacking with the lady and we paid $245,000 for it. it needed a little work but we moved into the rough unit and have completed everything but the bathroom remodel. we are now living in an almost 1/4 of a million dollar property and pay about $340 out of pocket after all bill's and cap x. we now own our own property and are able to save an extra $860 a month because we are no longer paying $1200 to rent our old apartment. I got laid off for over a month because of Covid-19 and idk if we would have been able to afford our apartment. House hacking has not only increased my net worth but it also saved us from needing to move into my parents house to be able to afford our other responsibilities.

Nov 6th

Steve Diahy

what was the point of this episode

Sep 25th

Rute Silva Brito

Really interesting episode that will literally save me a ton of money! Thank you.

Jul 18th

Astrid Poole

You lost me at "we both had high salaries"... not relatable.

Jul 9th

Chad Crispell

Excellent episode.. Inspiring.. its just math! taketh what the alley giveth !

Jun 26th

Guillaume de Lamaziere

good for you

Jun 7th

Mr Charles

I have enjoyed this podcast from the beginning but no more. They're more focused on politics and censoring people at their Facebook page

Jun 4th


Great podcast but they have massively uped the number of adverts.

May 16th


This podcast has truly disrupted my status quo in all of the best ways possible. I was never a good saver or investor. After finding this pod in 2017 my wife and I have made incredible financial strides and it's all owed to Brad and Jonathan and their super informative, easily digestible, game changing teachings. These guys come off just like regular dudes that are extremely interested in getting this super power out to as many people as they can. Thank you Jonathan & Brad please keep up the great work...the fire is spreading!

Mar 5th

Steve Diahy

would of been nice to hear more of the how to and info on their portfolio

Jan 27th

Kim Litinas

Great podcast! Connected with me.

Dec 8th

Karen Meyer

guys, i love your podcast! after listening to this episode i purchased The Simple Path To Wealth and Choose FI. thank you so much for all you do...for educating me and giving me the tools i need to do this!!

Nov 19th

Gaurav Tewary

The maths is way off! If you’re paying 35% tax and need to spend $1000 post tax, you need to earn almost 1600, not 1300$ pre tax. 1600*.65=1040

Nov 18th

Ephraim Muchemi

This is such an amazing episode! It was relevant and due.

Oct 8th

Aaron Webb

this is super helpful!

Sep 30th

Christopher Wills

Super podcast, I have been listening for just under 2 years and the content is still relevant. great job covering a variety of topics associated with reaching FI, lifestyle and just being a good human.

Sep 16th

Clare Tyler

a lot of preamble! 15 mins in and haven't addressed the podcast title. I'm sure theres great info here but it makes for hard listening. I would appreciate a to the point style.

Sep 6th

Jenn l

how do you find the baseline point cost in order to determine the sweet spot?

Sep 4th
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