In this episode, Brad and Jonathan reexamine the stages and checkpoints of Financial Independence. In our community, a lot of people are just trying to figure out where they are on this path to FI, and while every individual's journey is going to be unique, when you can gamify the process, the journey can be more rewarding and enjoyable.

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• Curious about cryptocurrencies? Is it investing or is it gambling? It’s a topic the community has a lot of questions on, so in this episode we create. framework for the conversation and explore the nuances.
• In the US, we generally want for nothing and true scarcity is something we haven’t recently experienced until this year and suddenly being presented with it creates some interesting psychological reactions.
• It’s good to position yourself to be ahead of the game and be prepared when you hear reports of activities that might affect the supply chain. You don’t want to be doing something at the exact same time as everybody else. See trends, think outside the box, and make your moves ahead of time.
• Colonial Pipeline paid to resolve their ransomware attack with a cryptocurrency, specifically, Bitcoin. Gas pumps on the east coast may be getting back to normal soon, but there’s an ongoing pump and dump issue with crypto.
• The stories of insanely high levels of return from crypto are all over the news and social media, creating a sense of missing out for those who aren’t in the game. So should crypto have a role in your plan for financial independence?
• For Brad, cryptocurrencies have always felt like pure speculation, which is the hope that you can buy it and then sell it later to someone else for more money. Although he is leery of all cryptocurrencies in general, he is interested in learning about the entire sphere of crypto because of all the innovation with decentralized finance and potential for smart contracts and NFTs.
• Although Brad believes there could be work-changing potential, he knows he’s not knowledgeable enough to know what it will look like or pick a particular company or cryptocurrency.
• Bitcoin was the first cryptocurrency to experience mass adoption and the most valuable on a per coin basis. Its value has increased ten times in the last year alone and yet it isn’t the crypto with the highest rate of return.
• At its core, Bitcoin is code. While only 21 million of the coins will ever exist, because it is code, it can be cloned or forked to add new features. There’s nothing magical about it that makes it worth $40,000 or $60,000 per coin.
• There are close to 10,000 different cryptocurrencies all with unique features and various values. Some have done well and some have done insane, but without the benefit of hindsight, you don’t know which are yours.
• It’s important to understand the different parameters that drive the value of a coin, what a pump is, and how they can run in parallel to affect the price.
• In contrast, investing is when you buy an asset of known value and it produces a return of some regular amount over a period of time.
• There are some who state Bitcoin is digital gold. When asked his thoughts on gold, Warren Buffet said that he had no idea where it would be in five years but he knows it won’t do anything between now and then except look at you while Coca-Cola and Wells Fargo will be making money. He would rather invest in something that can produce.
• Jonathan notes that while we are all on the same path directionally, we aren’t always going to agree. Though it’s true gold doesn’t produce anything, he sees it as an excellent store of value and has been more open to gambling on the Doge cryptocurrency.
• Gold has increased in value over the years, not because it produced anything but because the dollar has lost value to inflation while gold has held its value. The same argument could be made for crypto due to the limits on the number of coins.
• Unlike physical gold, crypto is a lot easier to store, liquidate, transfer, and transport.
• Cryptocurrencies have value because we say it has value. Although Brad believes the use cases are still small, he’s open to learning new information.
• In Episode 099 of the podcast, Michael Peterson discussed his non-profit in El Salvador. The use of Bitcoin there has cut down on friction and the fees for sending money from the US to El Salvador.
• Crypto is different from gold though because it is code and we don’t know what it will look like a few years from now. For instance, there are six different versions of Bitcoin.
• Bitcoin takes a lot of energy because of its mining concept for its transactions. All of the Bitcoin mining around the world takes up more energy than the country of Argentina. Other coins use no energy, so Elon Musk has said Tesla will look for cryptos that use less than 1% of the energy of Bitcoin.
• Crypto as a store of value use case has not been proven out yet. Gold, unlike cryptos, has a long history as a store of value and is less like to disappear from our memories like Blockbuster.
• DogeCoin started out as a joke and has grown to a total value of $54 million whose value can move up or down dramatically just based on a Tweet from Elon Musk.
• Last November, Jonathan put $150 into DogeCoin when it was $0.009 a coin. When he looked at it again recently, the price was in the neighborhood of $0.40 a coin.
• There are 130 billion DogeCoin and unlike Bitcoin, they can make more. since it uses less than the 1% of the energy Bitcoin does, Elon Mush began Tweeting about it and pumping the price of DogeCoin.
• Because he didn’t see a use case for it or think the value of DogeCoin would increase dramatically again, Jonathan sold it before it lost value to an Elon Musk Tweet.
• Brad thinks that Jonathan looked at it the right way because he viewed his DogeCoin purchase as gambling. Unlike owning shares of an actual company that can be used to calculate a company’s market cap, crypto is just code. DogeCoin can and does just make more.
• After selling his DogeCoin, Jonathan took $1,500 of the money to invest in another energy-efficient coin with similar features, running on a secure network, with a 10 billion coin lifetime limit. That coin skyrocketed and he sold it before it later came back down.
• Cryptocurrencies are susceptible to pump and dump. Jonathan felt a need to do this show not because he’s a genius with crypto, but because others are potentially losing massively, like whoever bought his coin.
• Anyone can create a cryptocurrency and begin selling a smaller portion of it on social media, building the hype around the coin and pumping up the price. The value increases dramatically, the creators and the early adopters begin to sell and deleveraging their position and let the coin die. As they dump their coin, those who bought to the top lose their shirts.
• Some of these pump and dump scenarios are scams from the creation, but sometimes good coins get pulled in and pumped by a group trying to control the market.
• Jonathan sold his coin when he found out 80% of the coin was held by just two addresses and the rug could be pulled out from under him at any time. Although he made money, his success is not replicable.
• There is a case to be made for gambling as entertainment. You just need to go in knowing that there is a high likelihood that you are walking out with nothing left.
• Brad believes in the decades to follow a couple of winners will emerge and their technology will change the world dramatically. You can prepare for it by educating yourself.
• Speculation can be a continuum. It can be high-risk with varying levels of confidence and potentially high levels of return.
• For cryptocurrencies, Jonathan likes those with a pre-mined amount, are energy-efficient, have liquidity and a lot of partnerships, have utility, play nice with banks and adhere to anti-laundering and anti-terrorism laws. He also believes that while these were created to exist outside of regulation, regulations are coming.
• When taking everything he’s learned about cryptocurrencies into consideration, Jonathan can decide on what cryptocurrencies to purchase that is more calculated than pure speculation.

• ChooseFI Episode 099 Generous Giving on the Path to FI | Michael Peterson

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Dennison, a member of the FI community and recent Salesforce success story, joined the guys today for a special interview. He expressed to us that being adaptable and willing to change your world viewpoints on the fly (especially in the face of the COVID pandemic) has allowed him to achieve great financial and personal success.

• Talent Stacker Salesforce 5-Day Challenge
• ChooseFI Episode 117 Making the Case for Part-Time With Bradley Rice

• Picking back up with our ChooseFI Households of FI family, Zach and Marilyn to hear about all of the incredible progress they’ve made since their last episode.
• Like most people, the last year has turned Zach and Marilyn’s life upside down, only their’s has been positive. Following their conversation with Paula Pant in Episode 247, they were felt encouraged to move forward with a real estate investment when the numbers made sense rather than waiting for a property that met all the specific criteria.
• Within two months of their conversation with Paula, they purchased the home they are currently living in. Since then, they have put money in renovations and just rented out the basement apartment.
• Although the original plan was to do a live-in flip, they are now house hacking after taking out a mortgage with a 2% interest rate thanks to their excellent credit, making their new mortgage the same as the mortgage on their previous home that was half the size. Plus, the basement apartment rent is covering the entire mortgage and then some.
• Zach finished school in 2020 and began working in his field earning a good raise. Rather than let the raise inflate their lifestyle, Zach put the entire raise into his 457 plan.
• Between saving more than $1,000 a month on a mortgage and putting $1,000 a month into a 457, Zach and Marilyn have created more than $24,000 of space in their financial lives.
• Although five years ago, they never would have dreamed of being in their current position, they attribute frugality and long-term planning for their success.
• Being on the path to FI feels so good that it’s something Zach talks to people in his everyday life about. He thinks if you adopt the long-term mindset and stick it out during the first five or six years, seeing the end from the beginning becomes less overwhelming.
• Marilyn says that not having debt hanging over their heads has improved their quality of life a hundredfold. While it did take them six or seven years to get there, it wouldn’t have happened at all if they hadn’t taken that first step.
• In looking toward the future, they have created FU money, which they’ve already reaped the rewards of. When Marilyn’s employer told her to come back to work 100% after successfully working from home during the last year, she decided to quit rather than put her kids back into daycare.
• Jonathan appreciates the power of no and says sometimes when you can say no to your employer, it puts you in a position of power where they might be willing to negotiate.
• Zach and Marilyn’s have no mortgage payment, drive paid-off cars, and have an abundance mindset that allows them to live off around $30,000 and want for nothing. In fact, Marilyn uses a hack from Brad and uses an Old Navy credit card for their spending, and earns points to buy clothes for his kids.
• In comparison, most other American families spend $30,000 on just shelter and car payments.
• When leaving previous jobs, Marilyn always felt a bit of panic, wondering how they would make things work, but with living expenses taken care of, they were in a different place. She felt none of that panic.
• Zach grew up without a lot of money and a scarcity mindset. When interacting with people who were well off, he often felt if that person was wealthy that he couldn’t be. The path to FI has been a mind shift to understanding that everybody can win and to a level of empathy.
• What’s next for Zach and Marilyn? Since they are saving more money than ever before, they are interested in optimizing what they do with it. They have considered more rental properties, but prices are high and inventory is low. Index fund investing is another option.
• Prices are high in their area and they looked into renting out their current home, but it doesn’t meet the 1% rule. They would need to geo-arbitrage a second rental.
• If they were to purchase another property, the downpayment would likely come from an old 401k of Marilyn’s. Zach has looked at rolling it into a self-directed IRA for real estate.
• Since Marilyn left that employer her 401k is with, it should have triggered the option to roll it over to an IRA without creating a taxable event as long as she follows her plan’s rules.
• They also have an interest in diversification, but with the real estate market so high, they want to have cash on hand to make a move if it dips. And if the stock market does something crazy, Zach and Marilyn want to be prepared for it.
• They want to invest, just with a shorter time horizon, so they need to invest somewhere with less risk.
• Jonathan says they need to invest like a 55 or 60-year-old. They can achieve that with investments that provide either income stability or a negative correlation.
• They would love to be able to pay for their next property with cash, but they don’t know when the next deal that makes sense will pop up. It could be anytime in the next five years and ideally, they would like to have at least $75,000 saved up for it.
• Although Zach and Marilyn want to do what’s the most optimal with their money, Brad says it really should be what they are comfortable with. Investing in real estate isn’t for everyone and may provide comparable returns to the stock market. They should keep communicating and figuring out what works for them at the moment as it’s impossible to predict where they will be in five years.
• Jonathan thinks it won’t take long to reach financial independence. With annual expenses of just $30,000, they will need $875,000 to hit FI. With $80,000 in investments and adding $1,500 to it each month, they will have $229,000 in 5 years. In ten years, they will have $451,000, and in 15 years, it will reach $783,000 if nothing else changes.
• Future raises, additional rental properties, or Marilyn returning to work can only speed their path to FI. Both Brad and Jonathan believe they can achieve FI in 10-12 years.

• ChooseFI Episode 247 Households of FI-Zach and Marilyn Talk Real Estate Investing With Paul Pant
• ChooseFI Episode 091 Rich Carey Real Estate | Building a Rental Real Estate Snowball Machine Without Debt
• ChooseFI Episode 313 Are you as Diversified as You Think You Are? With Frank Vasquez

• 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 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.

• 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

• 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 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.

• 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

• 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.

• 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.com/local
• ChooseFI Episode 022 The True Cost of Car Ownership
• Trim Review: Bill Negotiation Without the Hassle
• ChooseFI.com/lemonade
• GoodRx
• MDSave
• Ulta Lab Tests
• Eat Healthy and Save Money with Laura Barrett Cookbook
• Sign up for the free travel course at ChooseFI.com/travel
• 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

• 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.

• Lifehacker.com
• 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
• Haveibeenpwned.com
• 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
• CampFI.org
• Talent Stacker
• Choosefi.com/salesforce
• Wealthfront.com/cash

• 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.

• Website: Grumpusmaximus.com

• 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

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• 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.

• 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

• 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.