015 - Justin Root of Good

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0 - 83 Jonathan Mendonsa I don't think there's a more interesting conversation out there than financial independence. And when you discovered financial independence and the concept of a five for the first time many of us have that light bulb moment in which we start making drastic changes to our life in order to achieve this goal. But this journey often comes with a very predictable and foreseeable pivot. If you're looking for it specifically if you're a parent at some point the conversation has to turn to the next generation and you're looking at it from two perspectives one from the perspective of you are now raising kids while potentially being a stay at home mom or dad no longer working for the paycheck at this point which is a very very interesting look at life. But then the second half of that has to be what does this life look like for your kids. Because you are going to be pursuing and mentoring them from such a different place as maybe the childhood or the family home that you grew up in. This is what we fondly refer to as second generation fire. And to put it suscinctly, How often have you said to yourself What if I knew then what I know now and then apply that to the ultimate life hack which we consider financial independence. How powerful is this to instill these concepts in the lives of the people that you most care about from an early age and how do you do that. We want to explore that today. So I'm excited to have it. Brad here with me in the studio and also Justin from root of God. Justin thanks for joining us.
2ndgenfi, families, lifeoptimization
83 - 85 Justin - Root of Good Thanks so much glad to be here.
85 - 122 Jonathan Mendonsa Absolutely. This is going to be a lot of fun. We've talked to you when we're getting ready for this about kind of what we wanted to accomplish today but I am so excited to really dig through your content. I'm relatively new to your blog. I found you actually from a recommendation of another guest that we had on a few weeks ago millionaire educator and he said he stated that your blog specifically one of your articles $150000 of income $150 an income tax was one of his favorite blog articles of all time and that's pretty high praise so I went checked it out and I'm not surprised that he enjoyed it because it is absolutely fantastic. And what I found is that you didn't just have that article you have I mean how many articles have you right now is that close to 100.
tax
122 - 123 Justin - Root of Good Probably over 100 now. Yeah.
123 - 138 Jonathan Mendonsa And I especially loved your April Fools one from from a couple of years ago. The actual true secret of financial independence is eating cat food for breakfast lunch and dinner. And I got all the way through that one before I realized that you were kidding. I was horrified. Like please let this be a joke. Let this be a joke.
138 - 142 Justin - Root of Good April 1st is one of my favorite holidays Yeah so no we actually do not eat cat food.
142 - 150 Jonathan Mendonsa I'm glad that you can clarify that for our audience. I was thinking maybe Jacob from ERE Maybe he actually would do this. You know maybe maybe someone else is doing it.
150 - 154 Justin - Root of Good Hey seven thousand dollars a year. That's a tight budget to live on. So I mean if you have to eat cat food you have to eat cat food.
154 - 168 Jonathan Mendonsa I hear you man. I hear you. So you know I was going to dig into this article we've covered a little bit of tax optimization already and it looks like you're using some of the same levers that Mr. educator's talked about specifically you had access to that magical thing called the 4:57.
tax
168 - 227 Justin - Root of Good Right. So we had access to 401(k)s for myself and my wife. We were both working and I was a state employee for several years at the end of my career and we have access to not only a 401k but also a 457 which is essentially just like a 401k with two main differences. One of them is you can contribute $18000 maximum to a 401K and another $18000 to a 457 so you can basically double up on your contributions and put thirty six thousand dollars of your salary into these two plans. Second benefit to a 457, that is worth mentioning for those seeking an early retirement. You can withdraw the money at any time penalty free. You just pay tax on it just like a regular withdrawal from a 401K great IRA. So there's no penalty no 10% penalty so very valuable if you have access to 457 and you're pursuing financial independence and want to retire early and get access to that money. It's a great tool to have in your toolbox. Pull money out early and avoid that 10% penalty
401k, 457, career, ira
227 - 247 Brad Barrett Yeah. Justin that is such a key to me and I know I very much emphasize this. When we spoke with millionaire educator but that seems to alleviate all the concern which I've always had about dumping everything in a 401K which is how do I access this early. Obviously there's 72T there's the Roth IRA ladder but man if you have access to 457 it just seems like that is the answer.
401k, 457, roth, rothladder
247 - 270 Justin - Root of Good Yeah pretty much. You know I have probably about two years worth of living expenses stuck in the 457 so any time I know that I can pull this money out and live for two years with what I have available to me. So yes it's a great option to have in terms of having that flexibility to pull money out not have to worry about 72T Roth IRA conversion ladder or some other method of getting access to those tax deferred funds.
rothladder
270 - 307 Jonathan Mendonsa I'm going to read just one single paragraph here which you titled You know shrink your paycheck and it specifically you listed on there I guess all the ones that you could come up with which are no federal tax fraud here just basic tax savings that most people have access to. And you mentioned the retirement plan contributions say your 401K your 457 or your 403B plans you have pension contributions for some people employee stock purchase plans employee stock ownership plans and then dumping money into health insurance dental insurance FSA and health savings account and using some of those techniques you are able to cut your taxable income down from one hundred forty one thousand gross salary in half.
401k, 403b, 457, healthinsurance, hsa, stocks, tax
307 - 309 Justin - Root of Good Yeah something like that about a half.
309 - 333 Jonathan Mendonsa Definitely some powerful tools there. OK so just to our audience this is something we wanted to hit because this article is so powerful it's actually not going to be the focus of what we're going to talk about today. But I want you to go check out that article $150000 of income $150 of income tax. That is something that all of you should be able to use especially with it being what. Going to be going into March. Now as you are hearing this you've got April coming up maybe you can still take advantage of some of those opportunities.
tax
333 - 343 Brad Barrett And just to jump in real quick for everyone listening we will have all these articles and such linked up in the show notes that will be ChooseFI dot com forward slash 0 1 5.
343 - 347 Jonathan Mendonsa So Justin an early retirement at 33. You want to give us an overview.
347 - 400 Justin - Root of Good Sure. Yes. I started working. College or law school actually age 23. I did not practice law I practiced engineering which engineering pays pretty well probably about as well as law would. So I did that for 10 years. Made a whole lot of money over 50 percent every year. I would say sometimes 60 70 percent of my my gross income. My wife also works and we have three kids so that you can have early retirement and you can have kids. It's just you've got to figure out how to make it all work. I've been retired for about three years now. Three and a half years. We were set up in Raleigh North Carolina our home base here. We usually spend summers traveling for between three to nine weeks in the past. We've been to on a road trip to Canada twice through the kind of the Midwestern states. Not sure what you call Tennessee Kentucky Ohio and Michigan.
college, familytravel
400 - 401 Jonathan Mendonsa I would call them awesome.
401 - 450 Justin - Root of Good Yeah I would call awesome I mean there's caves there. There's sports there's big cities there's some cool stuff to see. But we ended up in Canada where the cool weather during the summer we've been to Mexico during the summer for seven weeks and this summer we're going to Europe on 2017 so we're spending nine weeks in Europe this summer in terms of daily life that the kids are in school for nine months out of the year. So we're kind of kind of here in Raleigh for the fall winter and spring and it's a pretty laid back lifestyle. You know I do very little in terms of productive effort every day. So whole lots of relaxation today. For example you know we got this podcast interview but this afternoon might be either taking a stroll through the park going hiking maybe go to the swimming pool. Not really sure. So that's kind of a wide open schedule and I like it that way.
450 - 475 Jonathan Mendonsa Yeah. It's funny you say that's actually you know I still work a 9 to 5 and I remember I think I follow you on one of your social media platforms maybe Twitter and I'm sitting there at my 9-5 I know it's 75 degrees outside. We both live in Virginia and I get the picture of your pasty white feet out on the back porch just enjoying life. Just saying screw you guys early retired and that was that was awesome. And I hated you for it. At the same time.
475 - 495 Justin - Root of Good Yeah that was my intent. So it was you know the wonderful thing about early retirement is that you're able to take advantage of nice weather days in the middle of winter when it's 70 outside. The Those don't happen a lot here. I am I'm not far from down here in Raleigh so yeah I I really great lifestyle.
495 - 535 Brad Barrett Yeah I think one thing that people are worried about when they hear about early retirement is you're going to sit there and be bored. I personally don't find that I I'm not 100 percent early retired but I have a much more flexible lifestyle now and to me that's just such an odd comment. You're going to be bored when you have literally the whole world at your fingertips and you have financial resources I love. You know you gave us a sense of your nice relaxed days. But tell us about your passions. What are you spending time on it. I didn't find many people who have been dedicated enough to become financially independent and retired early are just boring people so I assume you have some type of passions or thing that keeps you busy it might be your kids right and maybe your family and give us a sense of what your life looks like.
families
535 - 616 Justin - Root of Good Yes I mean it's it's really a whole lot of various things small things that add up to very full rewarding days. And kids are a big part of it right now. You know we have three kids the two oldest actually all three of them now are at different schools so there's interacting with the kids doing the carpool thing in the morning. We switch off and in our family so there's that routine. We walk to school here in the neighborhood for the youngest kids or for the middle kid. And then we work on stuff at home with the four year olds that we were working on kind of you know I call it daddy home school daddy preschool getting him to read more books learn new things different ways of working with him just to get him ready for school kind of give him a head start. We're able to go outside. We'll play here. Go out do a little trips to the local museums here in Raleigh. But you know beyond that I really enjoy reading whether it's you know online content news that's current events that sort of thing. I really love the economist so I'm kind of a not not really a finance economics nerd but you know I enjoy reading about international politics international business kind of stuff which you know fits into financial independence blogging kind of world. But really a lot of books have very active Netflix queue which is growing faster than I can watch it. I think I actually watch less Netflix now than I did when I was working which is kind of sad. Other things have taken over my Netflix have it.
blogger, families
616 - 619 Jonathan Mendonsa As long as you caught up on stranger things first.
619 - 621 Justin - Root of Good Actually I didn't enjoy that one that much.
621 - 622 Jonathan Mendonsa Oh really?
622 - 627 Justin - Root of Good But yeah I don't know I couldn't get into it so I watched a couple episodes just never clicked for me.
627 - 631 Jonathan Mendonsa I guess I just I love the 80s all day long every day so that's probably what it was.
631 - 666 Brad Barrett Justin. One thing that caught my eye on your early retirement at 33 article was optimal spouse selection. Now this is what I credit my wife Laura for being more frugal than I am and really kind of targeting us and honing us in on our spending. So I mean for us she's the more frugal one I know when we were down. Jonathan and I actually just went to camp Mustache down in Florida and a lot of people who was a similar story. The wife was frugal and dragged the husband along kicking and screaming and now he's on board. Tell us about if you don't mind up the most about selection and how that how that worked for you and your journey.
667 - 760 Justin - Root of Good Yes I think it starts with a maxim that your spouse can spend the money faster than you can make the money. And I don't want to say your husband or your wife can spend the money faster than you can make it because it could be either one. But I think it really comes down to having a compatible mindset in terms of earning the money and spending the money and keeping the rest of the money and investing it wisely. So if you're if you're at odds with each other in terms of one spouse is a huge spender and the other one is is a big saver. There's going to be a lot of conflict in that kind of relationship so it doesn't mean that you both have to be hard core savers and you know early retirement extreme type of frugality. You know you don't have to go that far to succeed on your quest to early retirement. So I would say as long as you can find someone you're compatible with in terms of similar spending goals similar mindsets. I think it'll smooth the path a lot more and there's always couples where one spouse is really on board and the other one is kind of just either oblivious to it or doesn't really care or thinks it's it's so far out in the future that there's no point in thinking about it. And we kind of started out that way in our relationship where I was more on board with early retirement and financial independence in the first year or two of my working career and my wife which is kind of like OK that's fine you know I'll go along with that. But then as the as the zero started to add up in our in our investment portfolio I think the reality that early retirement was within reach that reality started becoming more like a or I guess the reality became more real.
career, frugality, mindset
760 - 835 Jonathan Mendonsa You know I think that's what's interesting about the fire community in kind of what we're building here in our audience and that so many people don't realize what the other side looks like. It's hard to visualize. Nobody in your neighborhood is doing what you're doing. And when you just kind of start going out all alone and say hey we're going to start saving 60 percent of our income. Why what are we just cheap and they're just not. You don't necessarily understand what the other side looks like. But in our community where there are thousands of people talking about this stuff there's constant examples of what happens when you do have a 60 percent savings rate even for a short period of time. The value proposition becomes more clear you start to understand it even when you're starting you may not necessarily get that but as you move in that direction and more people come forward and are sharing their stories in a way that you can relate to you can understand their decision tree. Certainly if you're listening to this with your partner it starts to make sense and then you're like oh we're working towards this. No wait we're actually getting closer and oh you're not going to have to be at work every other weekend or you're going to be able to be here helping me out as we raise these children together. I think as you get a little closer to it and you start getting some traction and now you're not just paying off debt but now you're actually working towards building something together. It's powerful the freedom and the flexibility. What that means for how your relationship can actually grow and where you can go with that.
debt, savings
835 - 876 Justin - Root of Good Yes really it is really abstract. I think when you're starting out on the path to financial independence it's really abstract. What that kind of a lifestyle would look like that post fire world where you know you program your own daily schedule you're in charge of you know if you want to take nine weeks off and go on a huge summer trip you can do it it's cut. I take it for granted now because I've been retired for over three years now. But it really is. You know we're living like the billionaires of you know the industrial aera where we're able to do whatever we want to within. You know obviously we're not real billionaires but you know we have that freedom and flexibility to really have a lot of latitude in what we do every day.
876 - 925 Brad Barrett Yeah and your most valuable resource is time and that's literally what you have in abundance. You don't need to be a billionaire if you can spend your time as you choose. So yeah I totally hear you there and I just want to kind of dial in on one thing real quick which is our site and our podcasts or its choose FI. So I like to kind of look at when someone started. So just based on your timeline you said you started this at 23 retired and 33 year plus three years so we're talking mean plus years in the past so 2003 2004 when you started this like there were no or at least to me at that time there were no models of people who were financially independent retired early. So I guess A the question to you would be Were there any models in your life or somewhere or did you just come at this organically and how did you know that this was real when you had nobody to look at on the Internet or etcetera.
podcaster
925 - 987 Justin - Root of Good When I started out I found the early retirement forums which is is kind of the people you know people in there today that are posting I still keep up with the forums there and it's really a lot of people that are more you know in their 60s and 70s now that probably retired early 10 or 15 years ago when they were in their 50s. So it's definitely an older crowd than your typical early retirement blog that you see out there where it's someone in the thirties or forties retiring early but that was sort of the framework that I used was following along these other people that had done something similar in the past. It was just adapting it to not retiring in my 50s but retiring in my in my 30s and really it wasn't. I started out thinking it would take me 20 years to get there early retirement. I thought I needed two and a half million dollars to fund my lifestyle. And it just turns out that we were able to become more frugal a little bit but also just dialed in on what we're actually spending I just didn't track it before once I started tracking what we're spending I realized we don't need two and a half million dollars we need closer to half that much.
987 - 1056 Jonathan Mendonsa And I think one of the things that's interesting about that in our community and we're going to do a whole podcast on this so we'll go super deep but in our community. We talk a lot about the safe withdrawal rate and to oversimplify that. Basically what we say is you figure out what your annual lifestyle is costing you. Multiply that times 25 and then whatever number is that's the number you hit. You need to hit in order to essentially be financially independent. So if you want to live off $90000 a year then you need $2.2 million. But on the converse if you decide you know what. Yeah that might be great but I don't really need that in my life because I've paid off all this debt and my mortgage is paid off or it's very inexpensive for where we're at. We actually really are living only cost $30000. Now you need what like $600000 essentially or $700000. So it is how much you need to earn is a very predictable number and it's directly tied to the cost you're living so inevitably once you figure out what the picture looks like you can start to dial it in. And even if you once you get started on this you may find that you are able to actually achieve your goal way sooner because of frugality often is a byproduct of intentionality.
debt, frugality, podcaster
1056 - 1099 Justin - Root of Good Yes. So certainly that's one thing that you do when you start thinking about it in terms of OK if I pick up this $10000 per year expense, whether that's a boat or a vacation home or whatever $10000 per year in early retirement translates to an extra quarter of a million dollars you really need to fund that $10000 per year expense. And so I think when you frame the frame it in that context it makes more sense to try to get a little bit more frugal or find some way to you know to do that vacation home or that boat for free or for cheap because that way you can avoid that extra $250000 requirement in your portfolio and you can retire that much earlier.
1099 - 1147 Brad Barrett Hey Justin I want to I want to shift gears for a second and talk about kids. So in your early retirement 33 you have a section here and kids and I just want to read it because it's it's great writing and it's really funny. Yeah we had them lots of them three to be exact recent really scary news reports indicate it costs like $300000 to raise each kid. I can't figure out how they spend so much money on little creatures whose favorite things to play with are cardboard boxes and shiny pieces of plastic. Up until age seven or so and that 300000 didn't even include college. Now this is something my wife and I talked about all the time when you hear it when you see those annual reports of 300000 or whatever the heck they say it is. Where do they come up with that number right. I mean it's completely ludicrous. And what do you think the kids actually cost you per year.
college
1147 - 1251 Justin - Root of Good I haven't really broken it out directly I think to answer the question about where they come up with this number. I would say it's an average and so if you think about a lot of people who are average and they live an average lifestyle they just they just do dumb stuff they do sub optimal things and when it comes to spending. So if you want to be average then it's going to cost about 300000. If you want to make smart intentional decisions and use your money effectively and make cost effective choices it will cost a lot less than that in terms of what it costs us. I mean we were spending so far in the three years of retirement we've spent between 24 to 39000 per year which included buying a minivan. And we've been on you know the all the international trips we've been on cruises 2 usually two or three per year cruises to the Caribbean with the family so you know we got our kids going to public school. We live in a city. We provide food for them. They have health insurance. There's I think it's cheaper to have five people in the household per person it's much cheaper to have 5 people than it is to have one or two. So there are a lot of economies of scale there as well where you know if you if you buy a single family house it's going to come with three or four bedrooms which is pretty much enough to handle two or three kids. There's always bunk beds. It's a very very cheap way to get extra sleeping space in a house. So I think if you feel like you have to have a five bedroom McMansion if you have three kids yes it's going to cost you $300000. Over the course of a year each kid's lifetime you are a you know until they're 18 you're going to be spending 300 thousand dollars if you can make some small tweaks and some small sacrifices here and there. It can really cost a whole lot less.
families, familytravel, healthcare
1251 - 1260 Jonathan Mendonsa You know I'm still learning the whole Twitter universe and all these things. But if there's ever been a tweet able quote It was if you want to be average it's going to cost 300 grand.
1260 - 1264 Brad Barrett You know Jonathan I looked at each other like Man that is the best quote We've heard so far.
1264 - 1277 Jonathan Mendonsa That was that was definitely going in the show. It's awesome. You know the thing that I really loved about what you just said was you guys vacation the crap out of this world. I mean that's awesome you got three kids and you're going all three plus vacations a year.
1277 - 1281 Justin - Root of Good Yes so far. Yeah we're always looking for actionable tips.
1281 - 1282 Brad Barrett How do you save money on cruises.
1282 - 1387 Justin - Root of Good Well we travel in the off season which is a little bit difficult with the school schedule. But this past year we went right before Christmas and for some reason it was not ridiculously priced. They had we went on the M S M S C cruise line. They have kids sail free promotions pretty often so up to age 11 or 12. The kids are they sail free you just pay tax for their room which is usually about $100 for a seven night cruise. So we we booked we booked the cabin and the kids sail free. It's it's off season. So the rates are probably half or a quarter of what they are in the middle of the summer. And the weather actually is even nicer in the Caribbean during the winter months it's more moderate it's usually cool up here in the mid-Atlantic states. It's a lot nicer down there in the Caribbean and Florida. So we just you know we look out we look for deals this is we a deal we jump on it. We actually we usually buy the cruise through a shopping portal like Ebates. So we go through Ebates get 10 percent cash rebate. When we purchased cruises through Expedia dot com or somewhere like that. So that's that's you know we get a good deal on the cruise and we save another 10 percent from the cashback site and then we actually do a lot of our own kind of roll our own adventure once we're on it on the ship. We don't pay for the excursions which are ridiculously priced many times. So there's a lot in it. We just enjoy the amenities onboard don't really drink a lot of alcohol onboard. We don't really drink a whole lot in general but you know on board it's it's kind of the regular bar prices so we go pretty low on the alcohol and usually you can bring your own bottle of wine onboard a lot of the ships. So we'll do that. But yeah just kind of you know look for good deals and then jump in jump and you see a good deal.
tax, travel
1387 - 1423 Brad Barrett Yeah that's really cool. I love that tip on ebay too. That's something everybody out there should should sign up for that's a very very good one. And also excursions I mean those things are absurd. I don't want to belabor that here but my parents go on cruises all the time and they do those crazy excursions every single stop and it just I mean it essentially like doubles or triples the price here of your actual trip when you could just I mean really planned many of these things on your own and do it for a fraction so it's you know how I look at saving money and being frugal is just being a little bit smarter than the next guy. And I'm always looking for a little hack to do that. So yeah that's that's good stuff Justin thanks.
Brad_Catchphrases, families
1423 - 1447 Justin - Root of Good Yeah. And it's a good example. We've watched people they'll get off the ship and they'll go do the with with dolphins thing in Mexico and they're paying about $200 each for this experience. So for a family a hundred two thousand dollars and we've seen or seen people walk up and negotiate the same exact experience for $100 for the entire family. So you know for a two minute conversation you can save several hundred dollars.
1447 - 1449 Jonathan Mendonsa Wow.
1449 - 1451 Brad Barrett Yeah that's that's fantastic. That's such a great.
1451 - 1454 Jonathan Mendonsa Because I want to swim with the Dolphins.
1454 - 1460 Justin - Root of Good Which is I mean it's cool. I just don't know if I would ever value that a thousand dollars for for 20 minutes.
1460 - 1468 Jonathan Mendonsa But you know what we're really thinking here is the biggest concern that Brad and I have is if we decide to retire early Are our kids going to be OK.
1468 - 1512 Justin - Root of Good Yeah. That's actually a very common obsession with people that are approaching early retirement and they have kids young kids kids are impressionable so they're there watching what you're doing and they say well I want my kids to see me going to work every single day and working really hard because I think that's the way that when they grow up they're going to want to work really really hard. And I think you know there's two parts to that. One is your kids don't see what you're doing at work when you go to work. They see you driving away in the car and you drop them off the school they see you driving away in the car and you go somewhere eight hours a day and then they're busy at school. You come home from work and then they come home from school and you know they don't really see what you're doing they know that you're not at home but they don't really know where you are or what you're doing exactly.
1512 - 1514 Jonathan Mendonsa Such a good point.
1514 - 1567 Justin - Root of Good So they understand like you're busy you're doing something you're somewhere but they don't really see you. You know if you're coding something they don't see you working on on code necessarily. I mean maybe they see you at home you know over your shoulder but they don't really know what you're doing for sure. So I think I think that's kind of an overblown point of hey they're going to see me going off to work every day and they're going to see this hard work ethic and then figure it out. My second point is the other question is the point of life really to just work as much as you can anyway. I mean isn't it a better lesson to teach your kids hey I did this really cool thing where I worked hard for 10 years and saved my money and then I can do whatever I want to for the next 50 years. I would rather teach my kids that than the traditional way of hey you have to go to college and work for 40 years and then maybe if you're lucky and you know if you win the lottery you can retire at 65. I think it's just you got to question the premise of what are you teaching your kids anyway about work ethic.
college
1567 - 1571 Jonathan Mendonsa That's fantastic. Don't you worry that kids are going to worry about family money issues.
families
1571 - 1672 Justin - Root of Good I think that's I think that is a concern. And I guess it comes down to how much you share with your kids in terms of how early retirement finances work and so you know in our situation we've explained to them in general terms there's we have this big pot of money and it generates dividends and interest and we take that that money and we use it to fund what we pay for utilities to pay for food we're paying for vacations. And so the money that we have works for us and it generates money that we can use to live off of. And this is different than most families where they go to work and they have they have a paycheck that they get every two weeks in and that money is what they used to live off of. So I think just in those broad terms it's pretty easy to explain. Yeah you know we're going to be OK and we can always go back to work. I think a lot of families actually have the opposite problem of where they make a lot of money but they spend more than what they make. And so they have actual real money problems and real legitimate concerns about being able to have enough. And so I I don't I don't see it as being a big problem in terms of early retirement and the kids worrying about money as long as they understand the basic premise of it. And I think they get that 8 7 8 9 10 I mean you don't have to be 16 or 18 years old to understand the basics of it. Especially if they have an account a savings account and they see that they get interest on their money in their own account. They understand on a fundamental level. When you put when you invest money or you save money it can work for you and it can generate income even if it's only a few dollars. I mean you know if that same principle still applies and carries over to a much larger sum of money.
families, savings
1672 - 1705 Brad Barrett Just one thing you mentioned in there that I kind of alluded to was when you have money and you're not spending more than than you earn just like everybody else. There's so much less stress in the family also. I mean you read the surveys that money is the biggest stressor in people's lives and that for people like us who have managed to save 50 plus percent of our income. Money is not a stress. Money is a tool that we use and I know we're able to teach our kids and by doing some sort of matching their savings and doing all sorts of creative things to teach them about money and sounds like you guys do similar stuff.
families, savings
1705 - 1749 Justin - Root of Good Yeah absolutely. And we don't provide them copies of our quarterly net worth statement or anything that you know if they aren't. Yeah I mean if they looked over our shoulder our looking at our finances and they see oh there's there's two commas in that networth figure what does that mean. You know that leads to interesting conversations and I don't they don't seem to care a whole lot in terms of the details in cash flow and the minutiae of how our finances operate. I think they know enough to know that our finances are very different than than the average family out there. And I think that gives them that confidence to know that even though we don't have jobs and we're out working like traditional people we still have very very solid finances that can support indefinitely.
families, networth
1749 - 1801 Brad Barrett You know justin I just want to quickly go back to what we talked about the kids seeing you go to work every day and that being a detriment to them if they're not seeing hard work and that's always struck me as similar to you just such an odd an odd thought process to me. Kids don't care if you're working you instill work ethic in them in other ways. And I think most importantly honestly it's about having time with your children and you have all the time in the world. I know I do similar things with Liz. Like you mentioned walking your kid to school. I volunteer at my daughter's school all the time. And there are many other fathers who are volunteering on a weekly basis and it just it affords you all these opportunities to spend time with your children that you just simply wouldn't. When you're working nine to five or eight to seven like most people or whatever it is. Right. Plus the commute. I mean we have time to invest in our children's lives. And that to me is the crucial point.
volunteering
1801 - 1837 Justin - Root of Good Yeah. There have been a number of times where our kids need a little bit of extra help here and there or some intervention and that's when it really drives home the point that you know I have if I need to I can devote 15 or 16 hours per day to helping my kids get back on track on something. And that's where you know whether it's going to school volunteer helping out or whether it's with homework or assignments or they're falling behind or whatever it it's it's having that flexibility in my schedule to just be able to say OK I can drop everything at this point and focus on this one thing to get them back on track.
1837 - 1852 Jonathan Mendonsa You know what I love. We've kind of moved into the advantages of early retirement with kids. And one of the things that I know that you've talked about before is when you retire early you're actually cutting down on your kids cost.
1852 - 1925 Justin - Root of Good Yes so. So that's another big thing is people probably the biggest expense that people face with kids especially in the early years are childcare costs daycares in most areas. Six eight ten twelve thousand per year. Some big cities it could be 20000 per year for childcare in the first four years of their lives. So so if you're if you're going into early retirement and you are having a baby soon or you're planning on starting a family or you know you have a one or two year old being able to save 20000 or $40000 per year on on childcare preschool costs that's a huge cost savings that you can. You can pocket immediately after school care. You know people still pay a not tens of thousands but a thousand or $2000 or sometimes more for afterschool programs which is basically just daycare. So so being able to get rid of those expenses once you do retire early and being able to you know go to get your kid from school or be there when the school bus drops them off or walk to school and pick them up. Not only is it valuable time you spend with them but also you're saving thousands of dollars. And you know you know avoid childcare costs.
families, savings
1925 - 1980 Jonathan Mendonsa I'm going to if you're OK with that I was going to read a paragraph from an article you wrote that I thought was a great summary of what that freedom and flexibility looks like in relationships actually cutting costs so in this particular article you said there's lots of free activities during the weekdays that I'm now able to take advantage of since I'm no longer working. Your local library just up the street offers a storytime for different age groups two to three times a week. The community center next door to the library offers two hours of free open play for kids up to age five twice a week. The community parks hiking trails greenways and pools are also free or almost free and these places are like ghost towns with all the other parents are at work. The cooking at home saves a ton of money leads to a healthier lifestyle and these cost savings are available to you either way. But because of your additional free time and because you have more than two mouths to feed and you're able just to spend $10 on great ingredients and you can make all these awesome dinners instead of dropping 40 bucks on takeout.
health, library, relationships
1980 - 2011 Justin - Root of Good That's a great summary. I can't believe I wrote that but it's great. It's that really summarizes where you're at when once you're able to have more time and more freedom to choose what you're doing each day. You can take advantage of all those activities during the day you know for our for our kid that was he's under age 5 so he's not in in full time school yet. But there's even though we don't send him to a full time preschool he's still out there doing a lot of activities during the week that are then are all free.
2011 - 2019 Jonathan Mendonsa And everything that we've mentioned so far none of that had to do with taxes. I mean there some significant tax savings that offset a lot of that as well.
tax
2019 - 2037 Justin - Root of Good So I figured out with the kids. It saves us while we were working it saved us roughly fifty five hundred dollars per year to have three kids so I don't I'm sure we spent more than fifty five hundred per year on kids but a large part of our Kid expenses were covered by the tax savings.
2037 - 2053 Brad Barrett Hey Justin going back to the will my kids be OK if I retire early. Now Jonathan was kind of sarcastically asking the questions that you pose here but I want to talk about one which is Will my kids suffer an entitlement mentality and a I'd love to hear your thoughts on that.
2053 - 2179 Justin - Root of Good Yeah. That's one that we I think we have to just work with the kids and explain to them our lifestyles is different, what we're able to do a lot of kids are not able to do because I mean in a way we are living that kind of playboy billionaire lifestyle, the trips that we can take, the flexibility not having to work, having both parents able to do whatever whenever I think it. I think it does. It can give that perception that you don't have to work hard to succeed in life. But you know it's we still live pretty frugally and I think and our kids know too, they value a dollar very very much. I mean sometimes they surprise me with their with their natural frugality that I guess they picked up from us. But but it's it's because we talk about money I mean we we we treat money as a tool and we try to get value out of money. So I think when they have they have their own money they can go and spend and when they go to spend that money , you can tell they're trying to think Is this a smart way to do this. Is this a smart way to spend money and talk about you know let's go let's go spend money on A or let's go spend money on B and they can think through the process of. Where how do you spend money what's the best way to get the most value out of this money. You know they can apply that kind of analytical framework in their own heads. So I think when it comes to that entitlement mentality they also know this is our money that we get to spend as parents and that at some point you know they're going to be responsible for going out and earning their own money and they're OK with that I mean they get that this is not like you know they're not going to be Trust fund babies, we just don't have enough money to make them trust fund babies when they grow up and they you know go out on their own they're going to have to earn their own money for early retirement. But you know one of them's already mentioned I'm going to go work hard really really hard for 10 years or 20 years or whatever and then she wants to retire early too. So. So I think they get that. It's not an automatic path to success to have parents who have money. There's also that component of hard work and effort to get you know to get themselves to that to that financial independence goal.
frugality
2179 - 2305 Jonathan Mendonsa I'm going to kind of plug what you just said and also I thought that Brad Knight and throwing around for a while so you and Brad and to some degree myself we we essentially and the audience listening to us. We're a first generation fire. This is really hitting right now this idea of doing what you just did. There's a lot of people that are on this path within the next five or six years and it's peaking. I mean it's really hitting critical mass right now with how it's getting out in the mainstream almost every article new article that's posted as has been uploaded to Business Insider these days. I mean mainstream America is just now starting to really hear about this stuff. But what's going to happen very very quickly over the next 10 years is the audience will still be the same but the focus is going to shift from us as first generation fire to now second generation fire so not only did we start to soak up and live and breathe these ideas but we actually did it and we did it at a young enough age that now we're able to directly impact our kids vision for the future. And so while it's still the same audience we're going be thinking you know how can we instill some of these values and this mentality in this work ethic that is required in order to achieve this. All of us at some point in our life are going to have to trade time for money. But how can we use that as a tool to get more of our time back and that how can we help our kids get started even before we did. I mean start helping them to think about these things at the age of 13 14 15 18 as they go into college and before they get saddled with $60000 in student loan debt. And I think that's kind of where we want to finish this. This is absolutely been fantastic and I've loved digging through this information with you Justin but we wanted to take a period of time to really talk to you about another article that you wrote. That's absolutely brilliant and it's incredibly well-thought out. You've gone through everything you could think of on what college is going to look like for your kids as they approach in the next 10 years here using some of the principles that we've talked about just optimizing everything we said that raising a child can cost up to $300000 for the average family but nobody in this room is average the people listening to this don't want to be average. They want to look for an optimized way to do it so can we explore how to pay for college. while you're early Retired.
2ndgenfi, college, college-loans, families
2305 - 2375 Justin - Root of Good Yeah absolutely. So I think you've got to lay the groundwork early on. I'm talking there are 11 12 13 years old. Start thinking about where they're going to be going for high school. Can they take extra coursework in high school whether it's from the local university or community college. AP classes do they have some kind of credit by exam program. Do they have early college high school like we have here in Raleigh County. Ways to get access to free or very very cheap college credit during high school. So that's something that I did personally ended up going into college with almost 60 credit hours. Almost two years of college credit so that we're out the back you know that's what would you call $50000 a hundred thousand dollars worth of college education right there for probably less than a thousand dollars. By the time I finish high school and those were mostly AP classes taking classes from the university taking some summer school right before real college started. When I was still living at home so just own the margin you know working harder doing better in school focusing on academics getting access to those those college credits early on.
college
2375 - 2394 Jonathan Mendonsa So just before we get too far past that I mean did you have someone explain how to do that. How did you realize that that's a possibility because I came through about just a few years behind you but I couldn't figure out how to piece that. The other and on the perimeter on the periphery I knew a few people that maybe had figured something out. But I didn't know how to replicate that how were you able to piece all that together.
2394 - 2475 Justin - Root of Good I guess it was partly the culture at our high school I went to was very academically focused so there were a lot of kids that were way smarter than me so I just kind of copied them. But I think it just and then I ended up I ended up getting the for the public university here in Raleigh North Carolina State University. I just pulled their course catalog and they had the information on what the curriculum looks like for an engineering program. So I started focusing on you know pretty early on 10th 11th grade somewhere in there maybe 11th grade thinking about what courses do I'm going to be taking in college and what do I need to focus on in high school that that will plug into that college curriculum with the idea being to go ahead and start that college curriculum in 11th and 12th grade. So thinking about you know those physics those calculus classes I did early release for college in the afternoon I went over to the university and took some engineering classes in afternoons as a science elective essentially. But you know they were like thermodynamics and electrical engineering and stuff like that. But just I had topped out at the physics at the high school. So so looking at the college that I thought I wanted to go to which I did end up attending and then working within that curriculum of it. So it's you know for 100 percent fact those classes you're taking will transfer and count at that university because that's always a challenge to spending time and effort and then not getting credit for those courses when you do go to the university.
college
2475 - 2503 Jonathan Mendonsa I cannot highlight enough the importance of what you just that is the thing that people miss and when they're taking a class especially at the high school or community college level it is unbelievably critical that you first go to your final destination your four year school and you find out ahead of time and come up with a plan for how are these going to transfer. Because there is no point to taking an underwater basket weaving class at a community college if it is not in some way shape or form helping you achieve your final goal. It's a waste of your time.
college
2503 - 2757 Justin - Root of Good Yes certainly. And I know I know a lot of people in the financial independence realm end up in engineering and that was one thing that the engineering school was very discerning in terms of what credit they would let in and what they would deny and it had to be you know the calculus based physics classes the calculus based electricity and magnetism classes it couldn't be the regular version of it. So if you took the regular version you would not get credit for that engineering physics in the university and so it is essentially just a wasted wasted money for the AP exam and waste of time and effort. Unless you're going into a non engineering disciplines so you kind of you've got to figure out where you want to head. At some point you know 10th 11th grade which can be challenging but but you know once you once you do figure it out and you to make sure that those credits will transfer in. And I think that the segue into the next big thing of college is once you're there how do you pay for it. Hopefully you can do it in three years if you gone in with some credit and have a you know have an intentional focus on getting a a worthwhile degree that will at some point earn you money and that could be a lot of different things that does not have to be engineering or computer science although that does seem to be very very popular in the early retirement world just because I think it leads to a pretty high salary right out of a four year university. And so you can start earning and start saving a lot of money but once you're there you know there's there's the financial aid aspect of it. A lot of early retirees will do very very very well when it comes to the FAFSA financial aid form that that actually ignores your tax deferred savings so your 401K your IRAs they don't really look at those when it comes time to calculate how much financial aid you'll get based on need. So what really surprised me was how poor we look on paper as firewalkeers so your portfolio I really you know I did not even think that we would qualify for any kind of need based aid going into into college. So several years ago I was kind of like OK you know we're I need to have lots of money and they're going to have to work a little bit. They're in college and pay their way for you know beer money you know room and board that kind of stuff. But we'll wing it we'll figure it out. We've got some money in the 529. And then I actually plugged it into one of those online financial aid calculators and I was like wow they ignore your house and ignore your million dollar retirement portfolio. They're looking at your taxable investments and your cash on hand and your actual earnings and most early retirees have very very low earnings just because they're pulling from investments they're pulling from you know maybe selling some stocks for some capital gains but just not really you know that the adjusted gross income for most early retirees is rather modest they're not earning those six figure salaries anymore most people aren't spending six figures or if they are they're not they don't have a six figure adjusted gross income. So we look poor on paper. We put we look asset poor we look income poor and those are really the things they look at for their financial aid. Unfortunately you know the people that don't really need the aid as much will end up getting it from a societal perspective it's unfortunate but from you know from a greedy self-interested perspective most early retirees will do very well when it comes to financial aid. So I think there is need based aid out there for a lot of people that what will help mitigate some of those college costs. Lots of things you can do. Have the kid live at home for a while if they want to. You know we have local universities here. There are very good. So that may be an option. The kids say they want to do it now and they're age 11 age 10. They say they want to live here. That may change things. So I'm not I'm not banking on that. But you know it will be flexible either way. Once they do end up in college there's lots opportunities to make money while they're there. You know there's there's the bussing tables waiting tables kind of thing. But there's also lots of internships available. You know if you're if you're getting a degree in business or sciences or engineering tons of companies are out there hiring people. In those fields for part time work during the school year and particularly during the summers or through co-op programs. So you get tons of practical experience in your career field. You very often get a salary or wages much higher than minimum wage. You have something on your resume so you have network connections with people in the in the industry already you have a resume that has these jobs on it.
401k, 529, career, college, fafsa, ira, stocks, tax
2757 - 2760 Jonathan Mendonsa So unbelievably critical to get that while you're in school.
2760 - 2782 Justin - Root of Good Absolutely. And so I think you know I kind of ignored those opportunities to some extent I did a lot of them but I didn't I did not do that. The co-op experience where you work at work a semester and then go to school for a semester. But that's you know even if it stretches out your college by six months or a year that just seems like a great program and a great way to fund your college expenses too.
college
2782 - 2790 Jonathan Mendonsa Can you Take a second and just talk just a little bit. I love what you said about college tuition being like MSRP. I would love to hear your thoughts on that.
college
2790 - 2867 Justin - Root of Good Yes sure. So nobody pays sticker for college. Nobody is paying the sticker price. And it is sort of like you know when you walk into a car dealership or a mattress store, you're not going to end up walking out of there paying what their what their sticker price says. And there's financial aid even for you know moderately wealthy people. You're still going to get some financial aid a lot of places. Some private schools are worth applying to just to see you know you may get tons of money to go to a private school. I think public schools usually are. You know if you if you aren't going to get a lot of financial aid public schools offer a great value proposition. But I think just knowing that you know you're not going to be paying the full tuition most likely you're going to get some kind of help somewhere. There's a good chance your kid might qualify for some scholarships. There's tons of them out there that there's very very little competition for these scholarships. And know this is the this is the $1000 Scottish heritage competition or you know the $2000 Asian Pacific Islander scholarship competition. You write a one page essay you submit it there may not be a lot of people writing these essays and you may be you know 20 people may be vying for 10 of these 1000 scholarships. Pretty good odds of getting a thousand dollars for very little effort. So those are worth going after. And then the university itself.
college, scholarship
2867 - 2869 Jonathan Mendonsa And how do you track those down.
2869 - 2943 Justin - Root of Good You know my my 15 year old knowledge of those was you go to the financial aid office and get a book and look through it. I'm sure today there's just a ton of sites out there where you can search and I've seen them I just can't come up off my head. But I'm sure there's Internet sites out there. You just find places that they list all these scholarships and then you know if your parents worked in finance or scholarships if you're if you work for a local credit union or bank at a local credit union they have scholarships. Your local city may ask our ships your high school may have some. Your county may have some that the universities themselves have just tons and tons of scholarships. Make sure your name is in the hat. Where are those scholarships. Talk to people in your in your department. You know if you're in the engineering department civil engineering mechanical engineering whatever participate in those professional societies. That's the way I got several scholarships was the the Transportation Engineering Society at my college. They had you know that was one of those they had they had five scholarships and only four people applied to them. So I got two scholarships one year to $2000 just for fill out a form. And it's surprising how much money is out there and how little people actually care to go after it. But but it's out there especially in the engineering the engineering tech fields. Seems like there's floating in money.
IT, college, scholarship
2943 - 3005 Brad Barrett Justin one thing you mentioned earlier which I really want to emphasize here is hacking college for the financially independent retired early people. Most of our assets are in tax deferred accounts or maybe home equity. So those are exempt from the FASFA you're saying. And our incomes are appear to be low on paper. You mentioned don't just throw out private schools. I want to just kind of touch on this super quick which is I know there are a lot of. Most people would just throw out elite schools because of that. That MSRP you know 60 plus thousand dollars. But I know many of the real elite schools have programs where they offer full tuition and room and board for people who have incomes under X-amount. I think it's some of them. Two of the best private schools in Virginia are the university of Richmond and Washington and Lee and they both have programs. I think it's $80000 of income. So if you are I think further Richmond one it's if you're a resident of the state of Virginia and your income is under 75 you go there for free. So.
college
3005 - 3005 Jonathan Mendonsa Are you serious.
3005 - 3026 Brad Barrett Yeah. No joke. So there are a lot of these programs for people like us for people who are early retirees. So I think obviously second generation fires is just beginning. But I think we all need to kind of be aware of this over the next five 10 15 years how we can really hack college. And even at elite schools for nearly free.
2ndgenfi, college
3026 - 3045 Justin - Root of Good I think some of the private schools use an additional financial aid form, the name escapes me, but some of them do look at those tax deferred assets but what if it's just a straight you know look at your tax form and what is your income. Yeah I mean if they are if you make less than a thousand dollars not too hard to get below that threshold if you're living off of an investment portfolio.
tax
3045 - 3073 Brad Barrett Yeah I agree. I think I spoke with someone at the financial aid department at university of Richmond and yeah it was income and you have to quote unquote qualify for financial aid which I believe to be the FAFSA but obviously I have to look into it a little further before the time may come for my kids to contemplate college. But but yeah you know this is something we all need to be aware of and honestly we need to write articles and do podcasts about this down the road. So everyone in this community can can really benefit from it.
college, fafsa
3073 - 3074 Justin - Root of Good Yes. Sure.
3074 - 3138 Jonathan Mendonsa And what I love what you're doing and kind of some of the the framework that we're operating from is this entire show. And what we're about is helping you figure out, and I'm talking to audience, is helping you figure out how to optimize your life. We're playing inside the rules. We're not telling you to do anything illegal here. All we're saying is our government has set up a program has set up a system a tax system and our educational system has set up a way to help some people out. And if you don't know the rules you can't win. But if you know the rules you can crush this game and do it so much smarter than everybody else is. So when we're at we're now we're talking to Justin Root of good about how what these things he's actually figured out we're trying to just get little pieces things that we didn't already know and then figure out how can we apply that to our life. And then also our kids how can we help stay inside the rules and optimize every single aspect of our life and just we want to win right. I want to win. So everything you're saying is just it's it's hitting every cylinder for me and I'm loving this.
3138 - 3138 Justin - Root of Good Great.
3138 - 3185 Brad Barrett Hey just one last thing about college. So when you were describing yourself in this podcast and B in the article you said you went to a top tier public high school you had excellent S.A.T. scores that could have gotten you into a more prestigious school. I like to go back to that moment of decision because actually honestly I was in a very similar thing top while in high school top whatever one percent as high scores you know got into top 10 schools but didn't go there. I'd love to hear your thought process like how did you know at that point because everything about society unfortunately is keeping up with the Joneses but FI to me is about psychology about being a little bit smarter than the next guy. And I'd love to hear your decision like how did you resist the pull of those prestigious schools.
Brad_Catchphrases, college
3185 - 3268 Justin - Root of Good I guess I can probably plead ignorance here I just really didn't know much about the elite schools. I'll give an example. Duke University is probably 10 or 15 minutes from here and I just really had no clue that it was elite or that it was you know any better than any other school out there or that it was known outside of Durham or outside North Carolina. So I think it was just I just didn't really appreciate it as an 11th grader. You know in high schooler thinking about college. I didn't really appreciate the potential benefits of a more elite school. And conversely I mean I also knew that hey I've got this very easy path lined up here with North Carolina State University. I know how the system works there and how the credits work is right here my hometown is going to be a very easy transition. I can I can start taking classes during the summer. You know I'll have a local support network. I know the town is actually the university was closer to my my home going up than my high school was it was you know is a very familiar territory. So I think I just chose the school because I knew the getting a degree there in engineering would be you'd be a good degree and be very useful and lead to a reasonably good career. But also the costs were very moderate. You know tuition back then was $3000 per year. This was back in 1998. So just very very little required out-of-pocket to go to this great university and get a good degree.
career, college
3268 - 3333 Jonathan Mendonsa I want to just quickly kind of sum this up. One of the things that you wrote in this article and this was essentially your bottom line you said you know what my kids are going to be able to attend college and somehow we're not going to pay for it and we're not going to come out of retirement to do it. And essentially for the best case scenario what I see is it's going to be about $24000. That's going be the cost of attendance for three years and $4000 of that you can get a cut cost on room and board miscellaneous expenses. Maybe they can live at home with us. That is $6500 average need based grant probably free money but maybe some loans $4000 merit based scholarships and grants $6000 and various jobs and internships and $3500 spending from our 529 accounts if this rosy Tennent picture plays out we'll have three years of spending. Thirty five hundred dollars a year. Times Three students. Our outlay will be $31000 in today's dollars and our kids may leave college with a small dose of those dangerous student loans. That's about $10000 less than we have in the 529 counts today. So we're we're very well prepared if this scenario occurs.
529, college, college-loans, scholarship
3333 - 3381 Justin - Root of Good Yeah. So that's that's kind of the bottom line is you know we're talking about very very minimal outlays in this best case scenario which you know I can see it playing out it's not. It's not a stretch to think that it could happen and we've already got the money saved in 529 plans. So I think college is still very doable. As a parent with kids as you're going into early retirement I think you have to have some kind of general plan for it. But I think when you get to specifics I mean it really depends on your kid and how much they're going to be able to make on their own and help you know in terms of scholarships and financial aid and where do they end up in terms of the 80 percent or 99 percent percentile that's really going to determine how much free money they get out there that's merit based. And and also to some extent you know what kind of college they would end up at.
529, college, scholarship
3381 - 3384 Jonathan Mendonsa So do you think that college is still going to be relevant in 10 years.
college
3384 - 3462 Justin - Root of Good I don't know. I mean I I think so I think it makes sense to plan for it and put you know plan on it as as a reality. It takes so long to make these big societal shifts away from you know bricks and mortar classrooms and a four year degree to us as bachelors or you know get a master's after that. I think that's that's what employers are still looking for. For the most part and I know some you know some are elite tech employers might go based on qualifications or tests or challenges and say you know do this and then who ever solves this in the most elite manner. You get a job offer. I think those kind of jobs are very few and far between especially right out of you know at the entry level position. So I think I think that college degree is still a magical piece of paper that gets you into the door of a whole lot of employers that will pay you somewhere between 40 and 60000 per year starting out. So so to try to go through life without a college degree it's certainly possible but you really have to hustle to do it. So I mean my plan now you know looking out six seven years out for my own kids is 100 percent. You know encourage them to go to college assuming it makes sense for where they're at. You know scholastically academically and assuming college is not way more expensive than it is today right now.
IT, college
3462 - 3483 Jonathan Mendonsa All right well that was a great I think just kind of intro into this concept of what's going to happen with college. You know I don't think we covered that as completely as we could and there's a lot there we could probably take each one of those different pieces and really dig into it and maybe we will if you want to come on the show and talk about it tomorrow a future date. But I think right now what it's time for I'm very excited. We're going to introduce you to the hot seat.
college
3483 - 3484 Justin - Root of Good Oh man.
3484 - 3485 Brad Barrett Yeah you ready for this.
3485 - 3493 Justin - Root of Good I think so I'm ready for it yeah. Do it.
3493 - 3520 Speaker In a world drowning in debt and rampant consumption. Trapped by the chains of lifestyle inflation. These questions highlight the secrets of those who are broken free. Welcome to the choose F-I hot seat.
3520 - 3522 Jonathan Mendonsa Did that just blow your mind.
3522 - 3524 Justin - Root of Good Yeah that was lit.
3524 - 3528 Jonathan Mendonsa Question number one favorite blog that's not your own.
hotseat-blog
3528 - 3556 Justin - Root of Good That's a tough one because my own is my favorite but I would say millennial revolution. It's about a young couple retiring in their 30s out in Canada. So it's a little bit different cause it's not U.S. based a little bit different but it's not. you Know not Mr. Money Mustache. They retired early traveled the world and got maybe about a million dollars or so. So when you check it out there they've only been around about eight months. So a relatively new blog too.
travel
3556 - 3565 Jonathan Mendonsa Very cool you know I haven't I haven't checked that out. Millennial revolution we'll. We'll put a link to that in the show notes. It's very cool. Is there any particular article of theirs that you liked.
3565 - 3584 Justin - Root of Good They've got a lot on travel that I like. I can't point to a particular one there might. I think they have a lot on there like a general overview of maybe a multi-part series on how they got to where they are financially. But it really was like earned a lot of money and they took about five years to build up their stash.
travel
3584 - 3590 Jonathan Mendonsa Gotcha. OK. Question number two your favorite article of all time.
hotseat-post
3590 - 3638 Justin - Root of Good In this case I will put my own article from my own blog. It's it's called from zero to millionaire in 10 years and this is this was picked up by business insider and it got over a million views and kind of went viral and so I think it has a lot of popular appeal. And in this article I essentially just present how we started you know age 23 out of college with virtually no assets. We had a little bit both basically built up from zero dollars up to about a million dollars in 10 short years. And you know we did not have big six figure jobs. We worked regular W2 jobs 40 40 hours a week. We got some raises and bonuses. But the big story here is we save a lot of it invested it and over that 10 years it added up to over a million dollars.
college
3638 - 3641 Jonathan Mendonsa That's very cool. Yeah. We'll definitely put a link to that. Down in the show notes.
3641 - 3646 Brad Barrett Alright Justin number three. What's your favorite life hack.
hotseat-lifehack
3646 - 3698 Justin - Root of Good I have to go with Google Calendar. I think it just it's very simple and basic but it just helps me stay organized and follow up on things. And this is all those little silly annoying things in life that you know you want to do something but then you start working on it and then you get halfway through it and then you've got to wait on somebody else to get back to you for a few days. And that's when you forget about it and then all of a sudden you're like oh I forgot to contribute to my IRA this year. I forgot to you know call the cable company back and ask them why are they charging me twice as much money. So I'll just put a little reminder on my calendar that pops up a week from now and says call cable company put $4000 in your IRA. Those kind of things. And so that way it will jog my memory and remind me hey you have to do this. and so it's you know it takes a few seconds to set up each of these little events but it goes off and it reminds me Hey you got to do this.
ira
3698 - 3710 Brad Barrett Do you set those events up on like a recurring annual basis even you know something like put money into your IRA on you know whatever the date one one. Or you know whatever it is like do you set that up recurring indefinitely.
ira
3710 - 3746 Justin - Root of Good Yes actually I do have some of those where once a month this was more when I was working I had some things that would come up weekly or monthly like like put money into an investments will come up on the 25th of the month and that's when I'll basically sweep all the cash out of mine that's out of my checking account. I did not need for that money and put it into investments. I have looked for a job opportunities. I still let it come up weekly even though I'm retired. But just as a reminder. Think about is there anything productive that I want to do today. The answer is no. When I was working the answer was to go check out and see if there's any job offers or make a phone call. Talk to people and see the other jobs out there that are there than what I have right now.
3746 - 3785 Brad Barrett Yeah that's really powerful. I know I actually use an app called to doist. Todoist and I use it in a very similar manner to you actually. What's funny is we did our own Hot seat a couple of weeks ago and I mentioned another thing but that actually is probably my biggest life hack is I've basically put my entire life into to do ist. So all these little nagging things that I had to remember I've outsourced to do at this point. It's I have everything in life recurring I mean down to get new contacts on the contact lenses on the first of every month or change the air filters in our house quarterly.
hotseat-lifehack
3785 - 3790 Jonathan Mendonsa You know I ignore every reminder every single time.
3790 - 3816 Justin - Root of Good My air fiilter reminder just came off and in a week or so I thought they might think like us and that's all thing. Check your tire pressure. That's a that's a monthly thing for me. Air filters every two or three months. All to all those little things that you just forget about doing but there you take five minutes. Very important to do that. That's where Google Calendar or your calendar or to do list I mean any kind of an app like that that reminds you let a computer keep track of all those little events.
3816 - 3864 Brad Barrett Yeah this is so crucial out there. Anyone listening out there please take our word for it. This is huge. I mean the psychological satisfaction of not having to remember dozens upon dozens of these little nagging things your mind is free to actually focus on real things. I mean I don't have this running list of annoying little items that I have to do because I know I'm coming up almost on a year that I've been using to do it so I know literally you know once I get to that point every single thing that I do in life is into it. So I don't need to remember anything anymore. It's great. I mean I as long as you're diligent about it. Right. So if you're diligent and you put everything in there man it is just so freeing. So anyway don't want to steal your hotseat here. So let's move on to number four your biggest financial mistake.
hotseat-mistake
3864 - 3915 Justin - Root of Good This is a tough one. I think we've done very well overall probably I would say law school just because it's three years of life you know tuition was not free so we had to pay for law school. And I you helped me some in my career but not I don't think it was critical. So you know my earnings were delayed by three years because I was in law school and it probably did not pay back in terms of higher salaries or more opportunities but it did to some extent. But I would say that's probably the the the biggest mistake was you know as a 20 year old going to law school instead of just starting work or getting a master's degree in engineering. Well that decision is to stay in school longer because I didn't really know for sure what I wanted to do. I think you know I would've been better off in hindsight just going to work.
career, hotseat-mistake
3915 - 3945 Jonathan Mendonsa Yeah. And I'm sure a lot of people can relate to that. Definitely when you're going through college it's just critical. You think Why am I taking these classes. How is this advancing in the picture and if your goal is to have a 40 year career as a lawyer then that totally makes sense. But if you are at an early age discover this alternate path that we're discussing here make sure that the career choices are making and the classes you're taking you know have a way of fitting into that picture. All right. Question number five the advice you would give your younger self.
career, college
3945 - 3990 Justin - Root of Good The biggest piece of advice would be to stick with it. So financial independence is is an abstract concept when you're just starting out. You know the idea that you'll have enough money to support yourself indefinitely you'll have that that early retirement that flexibility to do whatever you want to with your daily schedule in your weekly and annual schedule. But but you know just stick with it keep investing keep saving keep thinking about the money try to get yourself on that automated path so that you automatically work towards financial independence. We know I did that we reached financial independence but I think that's what you know telling myself or someone else out there who's just starting out in college 20-23 just graduating from college come up with a game plan and stick with it.
college
3990 - 4022 Jonathan Mendonsa And a bonus question your one of the things Brad and I decided to do. We thought it was really cool because the fire community is generally a frugal group of people but we find that. Even though we're frugal 90 percent of the time. That gives us a lot of flexibility with the other 10 and often times we make purchases that will surprise you know our audience and so I know I have things that I splurge on. Brad has things that he purchases and so we were curious what is the thing that you purchased on Amazon last year that you were the most excited about.
hotseat-purchase
4022 - 4084 Justin - Root of Good Oh wow. Probably this was not from Amazon but this is this is from somewhere else that was even cheaper than Amazon which is hard to believe but we bought a set of I guess you call them ultra books for his and hers Ultrabook. They are very similar specs too like a MacBook Pro. It's three pounds or so. And but it's windows and the windows guy it's a Windows machine. But it was only $350. Brand new and usually retails for about six or seven hundred and it's just a nice fast punchy computer 13 inch screen. Very light. And this was you know the idea was traveling with it. Take it with us to Europe this summer so we can stick it in our book bags which have been very light so we can stick in our book bag very very portable with a nice long battery life solid state drive. So it is a tech toy but you know it's useful for helping with the blog and producing producing content on there and just generally making life a lot a lot nicer have a nice fast punchy computer.
hotseat-purchase, travel
4084 - 4124 Jonathan Mendonsa That sounds actually really really cool. I'll check that out. Justin you know. Thanks so much for coming on the show with us. This has been a lot of fun. I know I've learned a lot from it. I'm going to be going back and really diving through some of this information about college and trying to piece together you know my own version of that what what would I do. Taking everything we've kind of put together and really what I want to do right now is kind of just open this up for our audience. I'm sure there are you know you're pretty well known in the space but I'm sure there's a lot of people that have never heard of you before. Have never been to your blog. I'd like to give them a way to to connect with you. How would you recommend that someone that wants to dig through your content and find out a bit more about the stuff that you're doing. How can they connect with you.
college
4124 - 4174 Justin - Root of Good Well the first go to the blog itself and it is at the root of good dot com. And also on Twitter and Facebook so you can probably just search for me on there or follow the links from the blog. I believe it's root of good blog is the username both at Twitter and Facebook so you can put that in there. And yeah I'm pretty active on them on social media. So if you need something shoot me a message on there or go to the Web site there's a contact form on there. Check it out subscribe. And you know you'll get usually an article or two per month right now so you might see some cool pictures of wherever you are traveling or you know what we're what we're spending or what we're not spending money on this month. So some tips on hacking taxes finances investments that sort of thing.
blogger
4174 - 4176 Jonathan Mendonsa Thank you so much. This has been a blast.
4176 - 4179 Brad Barrett Justin thanks again. This is awesome. Really really great conversation.
4179 - 4181 Justin - Root of Good All right. Glad to do it.
4181 - 4189 Jonathan Mendonsa Alright buddy enjoy the rest of your day enjoy your sandals. I will probably block you if I get too many more pictures of you and sandals on 75 degree weather days.
4189 - 4190 Justin - Root of Good It's one of those days.
4190 - 4191 Jonathan Mendonsa I hear you brother go enjoy.

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