016R - Friday Roundup

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Time Speaker Text Tags
0 - 16 Jonathan Mendonsa Welcome to the fifth edition of The Friday roundup today we're going to talk about the importance of gold in your investment portfolio, reverse mortgages and all the benefits of breastfeeding. April fools. Guys welcome to spring.
16 - 22 Brad Barrett Jonathan couldn't resist. Yeah he's a big April fools then we have to toss that in there.
22 - 30 Jonathan Mendonsa Yeah and I actually have my wife is due here and I had to go to a breastfeeding class last night so if I had to deal with that. So do you all.
30 - 36 Brad Barrett Yeah. And so you're a couple of weeks away from the due date. Congratulations it must be getting pretty exciting over there.
36 - 63 Jonathan Mendonsa We are ready man that nursery is good to go. If I have to assemble one more thing. I just I mean not going to have any hair left and I have a solid I had a solid head of hair. It is. It's been fun though it's super exciting the rooms painted the nursery stuffs assembled. My wife did tell me that the crib was too low and she's demanding that I raise it so I may have one more assignment coming my way. But yeah I think the bags are packed. We're just we're just in go mode. So when it's here it's here and we're ready for it.
63 - 84 Brad Barrett Nice. Very very cool. Yeah. As you know I have two kids there and it's funny in my head that I always want to say young kids but you know my youngest is almost five and a half now. It's amazing how the time flies by and so you know definitely obviously it's hard those first couple of weeks when you know they send you home with this child that you have no idea what you're doing but.
84 - 86 Jonathan Mendonsa You're going to have to start worrying about dating soon.
86 - 88 Brad Barrett Try to enjoy what's that.
88 - 90 Jonathan Mendonsa You're going to have to start worrying about dating soon.
90 - 92 Brad Barrett Yeah. Don't start.
92 - 96 Jonathan Mendonsa I don't have any hacks for you with that one man. I got I got absolutely nothing. Good luck.
96 - 101 Brad Barrett Yeah. Yeah. We're not looking forward to that but hopefully we've got a we've got a couple of years so we'll see.
101 - 206 Jonathan Mendonsa Well yeah so life's good man. April is going to be an awesome month it's going to be a transformative month for me in many many ways. So we're we're super excited about it. But this week this past Monday we dropped our we dipped our first toe into the real estate world with Chad Carson and it was an awesome episode and it was on house hacking. So if you haven't listened to it yet I'm sure you have. But if you haven't that is one to check out I mean there's different like pillars in the community that we rely on we always talk about index investing frugal living as a vehicle to you know get to FI and Brad and I are big fans of travel rewards using that as a way to decrease expenses. So just doing everything a little bit smarter we've started the conversation about college hacking how to you know get that degree without going six figures in debt. And this particular conversation is another pillar that so many people that have achieved financial independence have used and it's probably one of the scariest ones you know because there's so many unknowns about it. And one of the things that Brad and I have really committed ourselves to is to try to simplify this just a little bit. But there's someone out there that I think that has already done that you know extremely well and all we really have to do is just point you to him and that's Chad Carson and his Web site coach Carson dot is absolutely fantastic. And he is just as good on a podcast as he is with his own writing extremely relatable extremely understandable. ABC's it for you and it gives you the 101 the high level and the low level picture. And I figure I feel like if you spend enough time with him and with his content you're going to be able to go and take action with that. I know that's how I felt after finishing that conversation.
college, debt, househacking, indexfunds, podcaster, travelrewards
206 - 384 Brad Barrett Yeah same here for sure. I I thought you know he was the perfect co-host. And you know that's how we like to view our quote unquote guests as co-hosts. You know this is this is a conversation. And and you know he just did a really wonderful job. He's just you know I've I've had the good fortune of meeting him and just a really wonderful guy. I mean honestly he's just down to earth guy like you know. It's funny because I didn't know he was a big time D-1 Crimson football player until I read the article after he was in on the Mad fientist podcast. There was an article about like you know he was up for like the Butkus award. It's like the nation's best linebacker. Like him he was like a fantastic you know one college football player and like I mean not to overly stereotype but like you would think someone like that would you know even years later would it in some way shape or form you know show that you know know like be pompus or something. But I would've never guessed in a million years I mean. And again that's kind of silly and I don't I don't generally like to stereotype. I mean he's the most unassuming guy just down to earth and you know one of his quotes was you know keep it super simple and try to do the fundamentals well. And he said that you know he kind of learned that from football actually. And you know that's just such a great life lesson not just not just a real estate lesson or a financial independence or personal finance lesson but but just not life lesson. You know keep it simple. Life does not have to be complicated and you know if you do those fundamentals well and you show up day after day and put the hard work in you know think good things are going to happen you know it might not be everybody looks for this instant gratification in life and you know the good things might not happen. You know if you want to start working out and have a you know six pack abs or something ridiculous like that like it's not going to happen in a week you know I can bet you that it's probably going to happen in three to five years or maybe less if you really dedicate yourself. But but if you think it's going to happen in a week or two and you get frustrated and give up. Well I mean you were always bound to fail and that's you know a silly example obviously. But but I mean it's just like it's a microcosm for life. You know you do the fundamentals Well you show up week after week month after month. And I mean good things are going to happen to you. And you know what Chad said about real estate which I think is also very relatable is is you know do the extra effort that the other guy is not doing. You know I mean he's literally out there walking neighborhoods on a Saturday morning with his kids for hours upon hours. You know just in the off chance of just meeting somebody having a conversation and you know not doing it in a seedy or contrived manner but just being like just a genuinely nice person and just trying to learn about a community like. To me that was like such an eye opening comment by him like most people. Right Jonathan. They're not going to go out and spend five hours on a Saturday. Week after week to learn things about different communities they're just not.
college, podcaster
384 - 461 Jonathan Mendonsa Yeah. Yeah absolutely. You know I try to think about with each with each podcast everyone especially the ones that are just it's not philosophy but it's like action driven like do these one two three four steps. Who is this perfect for and with this particular one. And in my time at real estate in general I'm talking specifically about house hacking. This There's something here man I mean there is like in our community where you are a DIY person you're learning these new skills and you've figured out how to incorporate it in your life and maybe your you're in this kind of range where you're 18 to 30 somewhere in that range or maybe you have a kid and that's going to college you know something like that. Like I told both my brothers you have to go read this article you have to listen to this podcast I have another friend you know that single and kind of in this transition phase and I said you know when and look starting to look for renting a new home or purchasing a new home. This is the sort of thing that can change your entire financial future. It completely can change the trajectory of of where you're going if you're starting from scratch. I mean totally starting from scratch and you're open to anything new. Just looking for a lever that you can pull to change your financial dynamic. This is it man. I mean this has got to be it.
college, househacking, podcaster, talentstack
461 - 518 Brad Barrett Yeah. Without question and it's another kind of unconventional choice which I think is is kind of what I like to view Fiats. You know it's not difficult choices it's not like extreme choices nothing that we've talked about in our you know 20 plus episodes now is in my opinion is extreme. I just don't view it that way. It's just thinking about a problem differently thinking about the world a little bit differently. You know if you saw a picture of Chad's first house hack which you can we'll link up in the show notes and it will be ChooseFI dot com forward slash f r 0 0 5. But yeah I mean you know we'll link to his house hacking article. I mean that house was hideous. Honestly most people would look at it and run as far and as fast as they possibly could. But Chad saw gold there you know. And that first house hack propelled him to. He now has 90 rentals which is.
househacking, housing
518 - 523 Jonathan Mendonsa That's crazy. That's amazing. It's a large scale man. Yeah.
523 - 586 Brad Barrett No I mean that is that is no joke I mean he has built himself you know quite the Empire in and I mean it starts with one thing it starts with one unconventional choice right and like. And that's how I view fire. I mean it's just again not to beat a dead horse here but just thinking a little bit differently and you know that's something I'm going to talk to you about later. You know since you posed a difficult question to me the last time on the you know paying off the mortgages you know I'd love to hear like if someone came to you and said you know hey Jonathan describe what is financial independence how would you describe it for me. What are the pillars you know how would you describe that. And you know we could talk about that now are we could you know punt that for later in the episode. But but you know to me it's it's it's making a couple of right choices. And you know where you live and your housing it's certainly one of them. You know your car is another you know your cell phone not spending as minuscule as that sounds like not spending 150 bucks a month but spending 20 on project FI or Republic Wireless and you know food and not you know wasting tons of money going out to eat. You know it's.
586 - 636 Jonathan Mendonsa Now listen to what you've just said and then think about the shows that we've done. Like that's what we've been unpacking. I'm literally answering that every single week with you with how we're going to each individual lever that we've pulled and ones that we want to pull and ones that we're working towards. I mean when we talk about the I love our I love our logo man I've loved it I've loved it from the first conception you know and then it kind of kept getting better and better and better. But you're on this journey and you got to take a first step and then another. And we're literally walking through every single lever that we can think of to get there and then get there faster. I mean this is what it looks like when you go when you talk to people at these different camps that have achieved it. This is what they did now. Did they do everything that we're talking about. No probably not. But in one shape or form these are the levers that they pulled. And when you get enough of them down that the journey writes itself you get there.
637 - 720 Brad Barrett Yeah. No I hear you and yeah I love the logo as well because because it is that choice you know it's making a series of little choices but these little choices add up you know over time they really do. And you know it's one that's been on my mind since this past weekend we were hanging out with some of our friends. You know one of the parks here in Richmond and just walking around enjoying the day and you know somehow the topic of this new podcast came up and you know this friend of mine is very financially astute and you know I knew it would be a you know something that he was actually interested in and he was you know asking questions and I was really trying to to unpack it and you know when it comes to the question of how were you saving 50 to 70 percent of your of your income. You know it's hard. It's funny because I was trying to answer it. And and I was just coming back to these couple of things. But it's hard to convey that without paper and pencil saying like you know just these couple little choices and maybe you know five to 10 of these little choices really do make the difference between saving five to 10 percent of your income and 50 to 70 percent you know. But but like I almost found myself stumbling and being like well am I a bozo. Like not being able to explain this properly when I'm here you know on a podcast. to Many many thousands of people you know multiple times a week trying to convey this. But but you know it it's hard to unpack to someone who is has no concept of it.
podcaster, savings
720 - 878 Jonathan Mendonsa And you're trying to you're trying to basically unpack what you're trying to do there is even beyond the scope of what we're doing here because you're trying to then give them all the levers in a five minute elevator speech which is impossible it's impossible you know and there's no not even a single article can really do that you would check out after the first 5000 words it's a book. But we're giving you an audio book we're giving you a live version of the audio book and we're living it out in front of you and yeah it would be difficult to to show all of the things that just every day you know normal Americans do this just stupid with money. Right. And then you just make a few smart decisions and what are those smart decisions. Well it might be hard for me to piece it together to you in 45 seconds but I can unpack it one at a time and I can create a big picture and a little picture and we can go into depth and each one of these. And yeah can you imagine a scenario where you're 25 years old and your first home your rent is either free or maybe you're only paying $200 a month and everybody else is paying down your mortgage for you and you're getting all this experience as a landlord and for 10 years of your life or five years of your life you have no mortgage payments going out the door essentially and at the end of that because of all the renovations and things that you've put in you're either able to sell it for profit and keep all that money tax free or you're able to get out of the unit that you are running and now you're bringing an extra five or six hundred dollars a month and when you move into your next place you've basically created 600 to a thousand dollars a month or more and just income for life. It's there for perpetuity. I mean that is just that is a game changer. But that's a single game change and you don't need to necessarily do that one but you can you can pick. You know you can pick and choose these you can make your own picture. And I just think that's the power of the framework that we're trying to create the story that you got that we're trying to create. You don't have to do all of these different things but this is viable. You know this is totally viable now is Brad going to take his family. You know of of four and get them to go move into a fourplex and start from scratch and do all these. Well I would say probably not. That's probably not going to be. That's not going to be the lever he chooses to pull. But would I encourage everybody I know including my siblings you know as they're single They're just starting out they're just now looking into getting their first home and their options are either picking you know the cookie cutter condo with the homeowners association fees or the second option is to find a triplex duplex or quad and do something like this. You know you realize the difference in there and their 20 or 30 year outlook without one choice. It's just there's no comparison right now.
househacking, tax
878 - 986 Brad Barrett It's the biggest game changer possible for for someone in that boat. There's there's no question about it I mean it would be remarkable. Right. Because that is the biggest line item in people's budget is housing. And yeah I mean if you could cut that down to essentially nothing in your early 20s I mean that is that's a true multimillion dollar game changer over a 40 year life. And you know investing life I mean that's it. It is as big a game changer as you can come up with. And you know it's funny because I was having that conversation with my wife Laura precisely this morning actually before we started recording as you know she listened to the episode yesterday and you know she was like you know this wouldn't really work for us but that would have been something cool to think about. You know before we had kids and and I think maybe we're a little too conservative or snobby or something you know I don't think of myself as a snob by any means. But you are about like the precise area we live in and the school district we live in and such. And you know there are people in the FI community like like Justin from root of good who I think in his article he said you know they went out of their way to not pick the top school district in the area. And you know I like that was something we probably should have asked them about because I was I was curious about it but when we get them on a second time maybe we can. But I you know if we were a little more open about that which we probably should be. You know we could do this or we could live in a much lower cost of living area even within the Richmond area. And you know it's something that I think you know maybe we didn't make that choice in our 20s but because honestly we weren't aware of it. I didn't know anything about this house hacking but gosh if I could go back it would be such a cool cool thing to do. And I mean just to pay and pay absolutely nothing on your and your mortgage every month or your rent is. I mean again it's just a game changer.
househacking, housing
986 - 1103 Jonathan Mendonsa And it also strikes me that this is another pillar for second generation fire. You know me and you didn't know any of this stuff. When we were in our teens and in our 20s but and also we were starting from scratch or in debt when we're 18 or 20. But if you get yourself into a position where not only are you are you not in debt but you have a six figure you know six or seven figure portfolio and now your kids are coming up to the pipeline and I know there's some very mixed feelings about setting your kids up or leaving them an inheritance and I'm not telling you what you have to do there but even for the people that are talking about not leaving their kids an inheritance I would imagine that there will be they will be imparting to them these ideas to help them get started and make the smart financial choices. And you know if my son is 17 18 20 you know or we're starting to think about what's our first home going to look like. And we're thinking well you could either stay at home to save money right or you know you're a mature person that's really demonstrated that you've you know figured a lot of this stuff out. Maybe we start looking into how we can set you up with your own house hack. And now I get to kind of live it through you to some degree and help coach you through this process and get you set up with that first home and maybe that single decision is enough for you to just you know race toward the FI finish line on your own without needing any of that you know the portfolio that the first generation built. And I can just see that I think that that conversation whatever it ends up looking I have no idea what that conversation is going to look like. I mean I'm I'm not even there yet at the door but I'm about to you know it's going to be a reality soon. So the next you know 20 years of my life in some shape or form are we thinking what is kind of conversation going to look like with my son how am I going to tee him up for that. And I guarantee you house hacking will be on my radar as you know he approaches his 20s. It will be. There's no way for me to know what it takes up a solid portion of my free thoughts now when it comes to how can you just supercharge the path the fly.
2ndgenfi, debt, househacking
1103 - 1193 Brad Barrett Yeah I mean that would help him with a lot of maturity. I mean literally being a landlord. Right. I mean he'd be around his his tenants he would put some sweat equity into fixing the place up. I mean that's like that gives a lot of life lessons as well. Not only on the financial side but you know I know just just kind of pivoting to like my own my own life and like the couple a couple of decisions that we made that really helped us on the path to FI are are both real estate related actually and you know I know you kind of actually mentioned this as the other option but you know I credit my parents letting me live at home after college for free as one of the real game changers in my financial life I mean I was able I lived at home while I was working for one of the big accounting firms on Long Island. I lived at home for two and a half years and I mean I was able to essentially save just about every single dollar I made and just stock away you know I forget the exact number. You know tens of thousands of dollars certainly. And you know that helped me then you know propel my entire financial life. I mean if I was out on my own you know in a thousand plus dollar apartment then I mean I would just simply would not have had that money. And you know that was a decision that a lot of my friends made to to live on their own and you know and be these mature adults and blah blah blah. But I mean this is such a game changer and I'm very happy with my 22 year old self that I had the presence of mind to do that. I lived at home.
college, landlording
1193 - 1277 Jonathan Mendonsa I would totally be open to that you know because in our community or in our fire you know mentality. You know we don't think about boomerang children right where this idea where you go out you get your $60000 education all financed in loans and then you can't find a job. And so you know you're just you've got nothing. So you come back to the house and there's no real plan there's this indecision. I think with what you're talking about coming back home is a lever that you can then pull again to supercharge it. I mean that's why the second generation fire. That's the conversation man that's gotta be it. I mean how what does it look like when the silver spoon becomes unnecessary and instead of that you're just you're just raising these kids that have all this knowledge that you didn't figure out until your late 30s and 40s and you've figured it out early compared to your peers right. That's when you figured it out but now you're raising them in a way that shows them what that other picture looks like and you're helping them make those decisions or choose those those line items that can just have such impact on their financial future at a younger age. I hope that I'm not just talking out there nothing is going to happen with this. I hope that that is actually something that I can do. It certainly helps when we grow this community when we make this idea more mainstream because you certainly are fighting the tide of you know materialism and marketing that's being pumped at you from every single media outlet that's out there.
college-loans, househacking
1277 - 1413 Brad Barrett Yeah and again it's about thinking a little differently like you know you mentioned the boomerang kids and you know a lot of people in popular culture think you know that's such a negative thing and you know kids are just being lazy and you know all of this like kids these days you know kind of nonsense but like it's again it's just reframing it. If you look at that like you said as a lever to pull to to help your kids succeed in life then I mean they can be financially responsible and living at home. They don't they don't need to be on their own paying bills. I mean if they can if my kids can show me they're at home and they're saving doing all the right things and saving money and you know that's that's a huge win for me. I don't need them to come back from college. You know I'd love them to be here. You know what I mean. That would be fantastic. And you know it just I know I alluded to this in a prior is like my brother was a perfect example of you know somebody that could be viewed as you know a quote unquote negative boomerang kid you know after he graduated college I mean he you know he went to Tufts University which is like a top 25 school in the country honors graduate came home and was waiting tables for a couple of years because you know he just didn't he didn't have a direction then. And you know most people would look at that as a negative. But he was living at home not paying anything and expense at that point. And while he was waiting tables he was saving thousands upon thousands of dollars and ultimately tens of thousands of dollars. And you know that was a game changer for him. So you know. Well again that could be looked at as a negative thing. He turned it into a big positive and that helped him springboard himself into a very successful life. And you know enabled him to buy a house when he moved down here to Richmond. And you know with just all of these positive things happen then you know he now has a career and he's you know set and you know that was just a little blip but it wasn't a negative for again because because he was smart you know. And like I said in the other punkins whereas they're all of these executives who are driving around and BMW isn't in THEIR MC mansions and not saving money. Those people are viewed as successes in life which to me is just such a silly thing like if you're not saving money in my opinion like you're really not that successful especially when when you have a decent income it's just like that's just not someone I look at as a success and really hasn't.
career, college, househacking
1413 - 1619 Jonathan Mendonsa Yeah. No no. Totally valid points. And I love hearing your perspective on it. Ok so like I told you all we kind of like to open up these doors for conversation and then we never just stop and move on especially when we feel like we haven't reached yet and how could you ever possibly reach the end. Now if you want more content on real estate you know go to go to Coach CARSEN dotcom sign up for an email as we've told you before how fantastic it is. You will not regret it. It's a it's a phenomenal e-mail list. Brad and I are not done with real estate. We are going to be tiptoeing into this. We realize how powerful of a lever real estate is as you pursue financial independence. I think one of the things that we believe in a similar manner to Chad is that it is a vehicle to get us to financial independence we're not interested in owning the Empire State Building. You know we're not trying to get Trump Towers what we are trying to do is we're trying to explore all the different levers that you can pull to hit financial independence for your family. And so one of the things that we've decided to do is actually start building a real estate team. And we've kind of got an outlay of what that's going to look like we're going to start doing this as we approach 2018 and 2019 really get that up and rolling. And we're going to be bringing people on to help us help coach us through that process. Specifically I mean Coach Carson has agreed to come back you know and kind of help mentor us through this process. He's already gone to the end and figured out and we think there's real value in showing you what it looks like in the process. And so you know we're talking a little bit of everything a little bit of flipping a little bit of of passive income just through rental properties. We're going to kind of try to explore it all and see how it fits in our own lives and what we want to do and we're going to get into it slowly and our ideas start from scratch. Document it as we go show you what we're doing and show you where we do it wrong and where we do it right. Get people to come in and can mentor us through the process and show us how to speed up the learning curve in everything we're doing. We're sharing with you so you can kind of live it with us. And also if you're doing that along with us because one of the things that you tell us over and over again and we love it. I mean this is the perfect feedback. You know I've heard other people talking about it with the way you all present it. I'm actually able to take action and I did this this and this. I mean that is the best e-mails that we get I mean really those are the ones I showed my wife every time and let her read them because it adds value to my day. But that's what we want to keep doing. So we're going to go out and do X Y and Z in real estate and then we're going to present it to you and then if we fail on something we're going to go out and find someone and have them help us figure out why and how we can do it better that sort of thing. So this is all coming when you sign up for our e-mail list and you tell us you're specifically interested in real estate information. I realize that you signed up for that maybe already and haven't gotten an e-mail about it because that's something that's coming up but we're still figuring out what that structure looks like and how to best present it. So that's going to be probably more towards the end of 2017. But if you indicated that's something you're interested in we gotcha. And we'll be keeping you in the loop on that as well as obviously on the podcast as we go forward. So we actually have some other guests that have kind of are in our radar that are telling us they would like to come on and present some content in this space as well so you know this is not going to become a pure real estate show but we do obviously recognize what a powerful lever it is so we are going to be including that just like we do many of the other content that will be on our somewhat recurring basis over the next several years. And I mean I know I'm excited about that how about you Brad.
families, housing, passiveincome, podcaster
1619 - 1634 Brad Barrett Yeah without question I mean it's something that again you know I've mentioned a couple of times. I know very little about real estate investing but it's something that I'm open to you know to be perfectly honest. It's something that scares me a good bit.
1634 - 1680 Jonathan Mendonsa we want to do it the right way. I think we can if we between you know instead of it just being your single perspective. You know and you make the decision and you're the only one that can be held accountable for it you know. And so when you're right you're right but when you're wrong you have no one else to bounce it off of. I'm hoping that if we kind of if we build this team out and we get these mentors to coach us through it we can do it and maximize the reward and minimize the risk or at least make it a reasonable amount of risk if that makes sense. So I'm excited to be doing it with you because I think that you are way more skeptical about deals in general than I am. And I think that will make a good balance between being very gung ho and very number oriented. So hopefully we'll be able to nip the analysis paralysis in the bud with that with the two of us working on it.
1680 - 1681 Brad Barrett Sounds like a plan.
1681 - 1890 Jonathan Mendonsa OK. So this brings me to one other quick thing and this is just how choose F-I works and our audience you all need to be aware of this so that you can participate. We know that you are interested in making this a community that's what we want. We've said that from the beginning. And one of the things that we have been saying is that we want and need your input. And one of the things that we've been teasing is that at a certain point we're going to get to the place where you are going to be able to actually leave us a voicemail a voicemail feedback and it will get played on the show especially if it adds to the adds to the content that we're trying to present. So there's a couple of things that one is that right now we have 45 written reviews on iTunes we told you and this is from the very beginning. Once we get to 50 written reviews the voice mail feature is getting added to the web page. You're right there at the door if you've been wanting to do it but haven't quite pulled the trigger. This is your week go pull the trigger. Leave us a written review on iTunes go to choose F-I dot com slash iTunes. It'll take you straight to iTunes page. Alternatively you can just go to iTunes and search for choose F-I one word and then just go to reviews and then just write us a short you know written review. Obviously you know that is the number one way that you can help us right now. We're not asking you to send us donations. We're not asking you to listen to our sponsors at this point. You know that. But right now this is just the number one way that you can say thank you for putting this content together. But on top of that this is what we've been telling you we want to get your input on this shall we. Frankly it scares me sometimes. How smart are our audiences because you send me emails and I have to spend time researching it because I'm like they are ahead of me in many cases and I don't want to I want to make sure that I'm adding value to the content that you already have locked down. And so Brad and I you know we take what we're saying on the show very seriously well you know not seriously as in we hold ourselves up. But seriously as in we want to present good accurate information to the best of our abilities. And so we're all really really smart. And we've obviously picked up on that and we look forward to getting your input on the show. We know it adds value so please please consider going into iTunes leaving us a written review and we would love to add that voicemail feature. And here's how it will work. Once it's set up if you send us a written comment on a Monday after the show drops immediately you need to send it to us that Monday or you leave us a voicemail that Monday if you get it to us the same day the Monday episode drops. We record this Tuesday morning. This is being recorded Tuesday in the morning so you got to get it to us on Monday. But if you do that any time on Monday there is a solid chance that your comment or or message is going to be included on that Friday episode. And how much value does that add to our community when they have these different perspectives and feedbacks and case studies all these other things so I hope that you all get as excited about that idea of crowdsourcing this show as Brad and I do. But we need your help with that we need you to help first by giving us the written review and second by leaving us the feedback on Monday. It will be a big deal. So let me just go ahead and segue into this. This last week we did get a significant number of iTunes reviews and I'm going to read just a couple of them. Ken 9 0 7 says this is my favorite podcast for learning about frugal living intensional spending smart investing and travel hacking. Brad and Jonathan have really nailed it. I look forward to learning something new every episode. Keep it up and Steigen says that this podcast delivers great content from all around the Fi community. One great thing about the show is the challenges that both guys go through in their own journey and the thoughts behind their decisions. Choose F-I doesn't present only one way to accomplish your goals but how so many others are doing it their way including listener feedback. Great stuff guys.
podcaster, testimonial, travelrewards
1890 - 1954 Brad Barrett All right the book babe says I love this podcast. Jonathan Brader so are authentic humble and helpful. There's not a lot of judgment on this podcast just steps that can help you get closer to fi. I love that they produce two podcasts a week to this podcast can help keep you on track. And Jeff says I'm new to the fire world but read the classic. Your money or your life. Years ago and I had no idea that those ideas were taken up by a whole host of great financial minds and people looking to push towards financial independence. The ChooseFI show it's easily the best out there for these concepts and I've already made significant changes to my strategies including fully funding our tax deferred savings and moving my IRA funds to vanguard more than that Brad and Jonathan are very personable and are great at conveying these concepts in a user friendly and congenial manner. I'm always happy to see their new podcast come up in my feed and look forward to many more. Yeah that's just really great feedback. You know we cannot tell you how much we appreciate it. And to hear that people are taking action is just it's just the most gratifying thing for Jonathan and I so thank you very much.
ira, podcaster, savings, tax
1954 - 2244 Jonathan Mendonsa And fire is catching on man. I mean this month we're probably going to hit or come close to hit 50000 downloads so essentially what our third month of recording we're about to hit 50000 downloads in almost I don't know how many countries there are in the world. So I'm not going to ask you I'm going to let you slide pretend that you do. No but I mean literally over 80 countries. This podcast is being listened to and so I hope that we're able to convey some some knowledge that is not just you know American centric I know a lot of the core stuff that we talk about. Everybody should be able to apply and I know obviously with some of the Vanguard stuff that is kind of America centric but hopefully you will be able to grab the piece of that that you can use you know in your particular country and as we come up with different resources for different place places. We'll try to share those with you as best you can. I think it will help as this becomes community center because obviously you know as someone who lives in Virginia I don't spend a lot of time studying Canadian investment techniques and you know so I'm sorry but I but I would love to obviously be able to provide you all place that you can you can find information that you find helpful and I think a lot of the core of the show including even index investing should should be very very helpful for you. So Brad and I very very much want to be open to feedback and even you know criticism when there when there is some and we try to analyze it and see you know is that valid is there something that maybe we didn't do right or that we should do better. You know I don't I don't really have an ego. I'm very proud of what we're producing here but I don't I'm OK to be wrong. And then I don't mind changing my opinion on something if we if we see something that we need to change. But just to give I guess a shout out. I became aware that we'd been mentioned on the Internet on libertarian investments so I guess give me a shout out here. He says I recently listened to a podcast episode of radical personal finance and this episode there were two guests talking about financial independence. The two guests have their own podcast called choose FI one of the guests was talking about how he paid down a big student debt and the six figures and casually acknowledge that his higher than average income help. Luckily the host of the show Joshua stopped him and basically said that having a higher income is a big piece of the puzzle and paying down debt and or achieving financial independence. It's something that some may have taken for granted in the podcast episode I referenced above. There was another throwaway line by the guest. He said there are better ways to earn a six figure income without going into debt. I wish the host had asked him his thoughts on this. It's interesting to get someone's take on how to earn a six figure income without college considering that the large majority of people are not earning this much. So I think this kind of is a nice conversation. You know I'm trying to decide is he just wrong or is that what we said. You know I didn't go back and relisten to the episode again. I know it was kind of on the fly but I think there's a couple things there that I wanted to touch on. One was the first part about how having a higher than average income helped pay down big student debt. Totally true. Totally true. And hopefully you did not go into six figures a student loan to get a job that paid you know 40 grand a year. I kind of did the math you know before I went into my degree I knew that I was going up to six figures in debt. I knew that I would earn a six figure income. Having said that there are many of my peers that graduated the exact same time as me that have you know 200 plus thousand dollars in student loan debt you know five years out of school. And so you know my choice was you know absolutely play the defense first crush my expenses send our very extra dollar to student loans and I don't want to you know marginalized. It was hard it was not fun. And I'm almost done and so I think probably I always have a more optimistic spin and it's more you know take the circumstances that you've been handed and then figure out how to optimize them. And you know if you do that then ultimately down the road you're going to win. So I don't have a whole lot more to add on to that. Yeah obviously it's easier to pay down debt if you have a big if you have a big income. So you know yeah you're right about that. The other one was he says I wish you know he talks about how we had mentioned that there are better ways to earn a six figure income without going into debt. I wish the host asked him his thoughts on this. It's interesting to get someone's take on how to earn a six figure income without college considering that the major large majority people are not earning this much. So this one I think there's more to actually talk about. I think what you all have seen Brad and I discuss over the last 20 minutes over the last 19 episodes is just hammering all these levers that you can pull to first crush your expenses. But now we're getting into the cool. You know really cool stuff how to play offense how to increase your income. And so there's a couple of things that come to mind you know you don't necessarily need to have one person to earn six figures. You could just have two people to earn 50000 you know a married couple each making $50-100 grand a year. I think it works right. I mean I don't think the making 100 grand between two people is something that's that complicated. I'm not saying everybody has to do that but just at the most basic level you know that that's a reasonable situation. Am I right Brad.
college-loans, debt, highincome, indexfunds, podcaster
2245 - 2568 Brad Barrett Yeah I think without a doubt. I mean you know obviously there are many millions of people that that aren't making $50000 dollars each. But I think that that is at least reasonable for you know a middle class family to have. You know let's just say on average you know to $50000 a year salaries. I mean I don't think that's that's snobbish of us who are you know extraordinary. So you know I mean obviously it's harder to get to Fi with with a low income you know an extraordinarily low income but you know like Jonathan said that that's not unrealistic. I think this is a very very valid comment. And you know I love being challenged by this kind of stuff and you know just one thing that stuck out to me was you know they said it is interesting to get someone's take on how to earn a six figure income without college. And I don't think that's what Jonathan was saying at all. I think what you're saying without going into 160 eight thousand dollars worth of debt. And I think that's that's an important distinction. You know Jonathan obviously knew he was going to have a pretty high salary and you know he at that point made the decision that it was worth it to go into debt and you know he might redo that decision today. You know with what he knows now. But but regardless it's you know that without college is not what we were saying at all. It's you know can you take the tools that you learn from you know Justin from root of good or you know what sun Wu is going to put together. And you know Edmund tee is going to put together on how to hack college and how to do it and come out without a significant amount of debt you know. Are there professions where you can get six figures without needing a doctorate. You know accounting jumps out at me. You know I was in accounting you know. Now I only needed a four year degree. I think now you technically need a master's to get a CPA which is sad that I don't know that precisely but you know but you can do that in four years potentially. You know there's some programs that allow you to do that are certainly FI. And that's not unrealistic to get to get a CPA you know engineers. There are many people coming out with no engineering degrees that can get significant income. So you know are there ways to do this a little bit smarter than Jonathan's. You know $168000 worth of debt yeah that. Yeah I mean I think that's what Jonathan was saying and you know what's funny is actually with this comment is it actually brought to mind that radical personal finance episode. And and you know this comment kind of put it all on Jonathan but I think part of the comment was actually from for me saying you know my wife and I were both CPA is and you know Josh Rashid's kind of came back and said Well isn't it easier with you know two significant incomes and you know this kind of talks or touches back on unconventional choices which is my wife Laura has been a stay at home mom for the last nine years. And that was an intentional decision that we made. That really changed our entire lives. Honestly you know like I've mentioned a couple of times we're from we're from Long Island New York and you know when we got married in 2005 we said to ourselves like we cannot live the life that we want to live on Long Island. And we we just can't. And it would require us to work full time jobs forever you know to afford a you know a shack of a starter home in a somewhat decent town for you know 400000 plus with $12000 a year taxes on those houses. I mean that's that's the norm for what my friends are paying up there. And you know that was just not something that appealed to us at all. And you know we made the unconventional choice of moving within two months of getting married and picking up our entire lives and moving 400 miles south to Richmond Virginia where you know we albeit bought a nice house a nice four bedroom house in a very good part of town. But you know we went out of our way to make the decision to buy a house that we could afford. On just my salary because we were pretty darn certain that we that Laura was going to stop working and stay at home with her kids and I mean that was a decision we made years in advance. And you know again that's an unconventional choice. And that was not an easy choice by any means. That was a hard choice but it's set us up for this easy life and you know that comes back to that quote I heard on a Tim Ferriss podcast which is hard choices easy life easy choices hard life. And you know the easy choice would have been to stay on Long Island with our family and our friends and you know we would have struggled forever. We would have not been able to reach by not even close. And you know we made the hard choice to uproot our entire lives and come down here. But knowing forecasting years in advance of what we could do with you know just one salary in live comfortably so you know I was pretty imprecise on that radical person finance and you know implied that you know Laura and I were both you know a middle manager type. CPA is a big company is in and made a hefty income and that's just simply not been the case. We've been living on one income for the last nine years and have still reach FI on. you know nowhere near a huge income by any means so you know I definitely this provided me a really great opportunity to clarify that. And you know let the audience know that sometimes it does require unconventional choices. And that was not an easy thing for us. But but it's been it really the best choice we could have ever made.
Brad_Catchphrases, college, debt, families, housing
2568 - 2775 Jonathan Mendonsa And also just for the sake of plugging something but I think it kind of goes to this as well. If you go to our our home page which by the way by the time you see this the home page will be completely different than it as you know was even a week ago. I've done a total redesign on it. The idea was to really allow you all to get deeper into the content and help you just you know see all the different things that we're putting together. And I think it came out really really well. But one of the things that is on there has always been on there is our free book our free ebook the blueprint to financial independence and unpacks idea how with the next generation second generation fire if you implement the different hacks that we've been talking about and put them into this one single story. You know you're going to be you could if you start early enough so second generation fire you can be financially independent by the age of 30 without ever making a six figure income frankly without ever making more than 35 or 40 grand a year. It's just completely doable and so it's not to tell you that that's what you have to do or that if you miss that window you know you can achieve financial independence that's not the point. But it's to illustrate some of these levers how they go together and how you implement them all for that second generation fire. They need it they're not going to need to earn even $60000 a year is not going to be necessary. So I don't know I really like putting together is just kind of a compilation of thoughts that I had in kind of different things that I'm going to be thinking about as I raise my son. So I think I hope they all enjoy that. Just take a look at it. It's only nine or 10 pages so it's just kind of a quick read. But I think you'll like that. We also got a message from Ken and Ken says Hi I recently discovered the financial independence movement and it's been life changing. I've always been relatively frugal but by making some of the simple changes outlined by you and your guest I've been able to optimize taxes investing travel and frugal living. These things add up to making FI feel like an impending reality. Thank you. And then Ken had some suggestions for a future podcast he said. Let's talk about libraries and he said some of his favorite library benefits include digital e-books on hoopla and overdrive. He said this is a great way to get e-books on your phone or Kindle. Travel Guide books and cookbooks used to always buy these now they never do tax preparation guidance museum passes kids programs meeting space and conferences. Ken I tell you what if you want to and you feel open to it. You know if you want to write that up into an article just kind of unpack those in detail some of the benefits. I would love to post that in an article on choose FI to really cause I know how many people in the financial independence space love and feel passion about libraries. I would love to say it sounds like you're really taking advantage of that. Just put that together in an article and sent it our way. I'd love to feature that on cheese FI. That sounds really cool and Ken also said you know I've heard you guys are on the 10 for 10 year figure a lot when talking about the time it takes to reach FI. I think this may be attainable for many of your listeners. It may be unrealistic for those with lower incomes. From reading a number of blogs it seems like the magic number for comfortable and frugal living is between 30 to 40 K per year based on the 4 percent rule that means reaching a net worth of between 750000 to $1 million to reach his goal in 10 years you needed after tax income. Between 90 and 120000. Assuming a 5 percent annual rate of return while this income may or may not be typical among your listeners it's certainly above the median income for the US. I don't mind hearing the 10 year figure mentioned but it ought to be it would be nice to have in context of earned income even an income of 60000 could lead to a working career of 20 to 25 years which is way shorter than the standard. Keep up the good work.
2ndgenfi, podcaster, tax, travelrewards
2775 - 2802 Brad Barrett Yeah and that's that's a great a great comment and great feedback certainly and. You know we're kind of focusing here on on criticism because they think it challenges us and you know this is criticism. You know quote unquote because obviously Ken is Ken is saying a lot of really super positive things here and you know it's easy for us to read the happy stuff right. Like we get dozens of emails a week it's been just. Honestly Jonathan read like the most amazing week of feedback we've ever gotten and.
2802 - 2804 Jonathan Mendonsa It's got real accelerating.
2804 - 2964 Brad Barrett It was amazing. I mean we're were like texting back and forth like oh my god did you see that that e-mail that just came through. It's just it's been the most incredible week. But you know it challenges us to read this you know slightly negative stuff and you know I would I would call this slightly you know Ken is right. I mean like I think one thing that you know I hope we have not been careless too much about it is the 10 year mark. You know I whenever I try to say and I say 10 to 15 years and realistically for most people 12 to 15 years is is going to be a much more attainable goal. But you know like Ken said even a 20 to 25 year working career is way shorter than the standard as he said. And you know that would put most people decades ahead of where they were going to be anyway right. I mean most people unfortunately as we see from all these stats of people saving nothing for retirement and being you know essentially broke in their 60s and 70s like most people are going to wake up 40 years from now and be broke like they are today. That's just that's the sad reality of the American consumer culture. Yeah but if you if you listen to this podcast if you read articles from all these you know many many financial independence sites you're going to make those little changes that are going to add up to potentially millions of dollars over 40 to 50 year investing life. And that is ultimately what we're going for here. Sure it's wonderful to see people who have reach in 10 to 15 years. But but you know even if you can't take Ken's point twenty to 25 years is amazing. Right. If we if you could tell me that every single one of our audience member is going to take action on a couple of things and reach financial independence in 25 years. I would take that in a heartbeat. I wouldn't even think about it. You know that's that's the biggest win possible. Right. And of course there will be people who reach it in 10 years but more realistically you know 12 15 17 years something like that. That's not too shabby right. So you know Ken unquestionably brings up good points here. You know does a higher income help. Of course it does. Of course it absolutely does. I mean would this be. Is it easy to reach by on a $20000 year income. No I mean it's not. So you know are we are you know we may be tailoring this to people who you know like Jonathan said you know $100000 a year sounds like a you know when you just say that number it sounds like an astronomical figure but you know two $50000 a year spouses or partners or whatever. That's not unrealistic. So you know in my mind that's what I'm thinking of rather than the highly paid you know hundred year single employees. So you know it's just about perspective. And you know I think this is a very valid comment for sure.
20yearstogo, career, highincome, lowincome, podcaster
2964 - 3027 Jonathan Mendonsa And this is definitely you know this is not the show for the high earners. I'm not saying that we do have high earners that listen and we love it and we appreciate you all. And we hope that you're getting value from this but this show has always the focus has always been helping middle class America build wealth one life at a time that that was it. And I think we have content for low income America I think you're going to get benefit from this show. I think this is for you as well. But you know the idea has always been middle class America is working their tails off and then making it Social Security. That's all that they have. You know that's it. And it could be so much more the picture can be so much rosier. And how many people are getting even in a perfect world they're getting to debt free and then they think that's it that's all there is oh we're debt free. We're done. There is so much more. And we're we're just trying to next level this for you we're just trying to unpack it and all these cool things that you can get all the flexibility in the options that are available to you once you reach Fi. And as you're on the path to Fi.
debt, lowincome, socialsecurity
3027 - 3109 Brad Barrett I just wanted to read one really positive e-mail just because this one just stuck out to me when I read it I instantly responded you know we're reading that on the Friday roundup So I want to want to maintain my promise here. This is from from talis and she said first of all this is great stuff. I stumbled upon the interview you did with Joshuah on radicle personal finance and thought I'd give choose FI a listen. So glad I did. Soon after I got hooked on your show and I got my husband to listen to you as well. And the result has literally been life changing. We're 28 and we live in Iowa where the cost of living is already relatively low. However we always consider ourselves to be more frugal than most of our friends and neighbors yet had no clear plan for our future. Since listening to this podcast we made some big changes to our investments and actually put together a plan on paper for our early retirement. The way you package your material makes it super easy to make changes right away. We appreciate the content and are looking forward to more. Our biggest concern is definitely walking away from the benefits of a corporate job. We hope to hear more about health insurance side hustles and other hacks for the self-employed and she said yes Brad. I just finished your travel rewards course and we sign of her first travel rewards card. So yeah. Congrats. You know from the bottom of my heart for taking action I mean this is really remarkable. You know Jonathan I'll throw it over to you. I know you love this one.
healthinsurance, hustle, travel
3109 - 3149 Jonathan Mendonsa It was really inspiring. That's what I want to hear. You know I just have this vision so you know the Dave Ramsey people you get to get debt free and you call in and you do the shout like we need to do a FI shout. And then you know what if we're still doing this podcast 10 years from now can you imagine a world in which ten years from now we're still doing this podcast and forget about you know what what what Target we're saying our some of our audience is going to hit in 10 years some are going to do it in five or six Summerbee at 10. I mean it's common. And what if what if we get to the point where they're able to do a live call and we're able to have that conversation. They said you know what pulled the trigger. We're there we're done. How much cooler is that. That is the coolest Yeah. That is the coolest conversation ever right.
debt, podcaster, ramsey
3149 - 3178 Brad Barrett Yeah I mean eight you know 10 years from now we talked to Talis and her husband and you know they started their path with us and they'll be at FI right I mean right there in a low cost of living area in Iowa. And you know are already more frugal and now they have this plan for early retirement. I mean that's that's as good as it gets. So yeah I mean that's a cool thought honestly Jonathan right. Like 10 years from now people that listen to our first couple of podcasts will be at FI And that's just that's just fact.
3178 - 3339 Jonathan Mendonsa Talis I will build I will build a section on the web page for the case study on how you did it once you get there. I mean we will just and that would be cool to right. Looking at different case studies of what people's financial situation was and what levers they chose which lovers they pulled to hit fi you're going to get this really complete rounded picture. Right now there's probably about close to 100 high level bloggers and of those high level bloggers maybe I would say you know 20 to 30 percent of them have kind of unpacked the details of their finances and what they what levers they actually pulled to hit there. And you know there's so many more people that are doing it. Those are just the ones that chose to document it. And what if we could give you a platform to share that information and I think that's what we're about. We're really we just want it we want to mainstream this thing. I mean because it should be it should be mainstream. There's no reason for it not to be it's so powerful. So correction. And this is not a correction this is a debate and it's still ongoing. But Isaac has given me some some feedback here and he says Isaac thinks the Roth is the worst place to invest and he references some articles by go Curry cracker. I love it. It's so deep and intense that I'm still having to study it. I'm not ready to make that announcement yet but I've got to say Isaac I've been looking at it and mind blown. I don't meaning Brad knows what I'm talking about right now. So we're going to have to go both back to the drawing board and take a look at this but when we unpack it we're going to do a battle cage match of the Roth versus the 401k versus the other investment taxable accounts we're going to bring all the information that you sent us plus some other stuff. We're going to try and unpack for you the power of these different boxes buckets and you know where you know where you can pull it. I thought I knew all the answers. Isaac you blew my mind with that last email you sent me so I saw that. So we'll get that out to our audience over the next couple of months. We also have a comment from Jonah. Jonah says you know because you mentioned dollar cost averaging a few times on the show wanted to send some dead data your way. Dollar cost averaging massively underperformed lump sum investing. The only reason you should be Dollar cost averaging is if you are too leery of putting it all in at once or if it makes you feel better about investing. Go ahead and do it but just know it looks like historically you're missing out on about 4 percent rate of returns and we're going to do an interview with with Jim Collins later on. And he made a great quote which I'll go ahead and steal from the news right now and he said you know one of the things that they think makes more of a difference it's not timing the market. It's time in the market. I thought that was really powerful. You know I definitely think the dollar cost averaging approach is a psychological one more than it is a math one. But you know Jonah thanks for sending that out there. I think we'll probably come to a conclusion over that over the next year or so.
401k, blogger, roth
3339 - 3495 Brad Barrett Jonah I completely understand your point and it's a great one. I've read a bunch of those articles. Certainly I know the mad Fientist has had some. And you know again this comes down to math versus psychology. And I think you know we're trying to do here is not be perfect necessarily because you know humans are flawed animals right. We have these brains that that trip us up. And I think getting over the psychology from most people is very very difficult. You know once you're there then you optimize the heck out of things right. Like then without question time in the market matters. And like you say lump sum investing is based on the math is without question based on what I've seen better than dollar cost averaging. It just is. But that said many people are leery of taking all the money they've saved or maybe they haven't invested. Right. And they just have money sitting in a savings account or something and they're just leery of taking whatever it is 5000 10000 $20000 and dumping it all on the stock market on one given day. And you know you mentioned that you know the the only reason as you say you should be Dollar cost averaging is if you're too leery of putting it all at once. And and that is exactly it. But you can't discount how important that is for people because most people if given the choice of dumping it all in and then seeing the stock market decline 10 percent over the next three months or just not investing they will pick non-investment And that's just that's the reality of most people's situation. So if that means you know putting in $1000 a week for 20 weeks and that gets them in the market. Well that sure is going to be a whole lot better 20 years from now than the person who just kept their money in savings for that 20 years. So I think we all can agree on that. So you know I look at this as as as an exercise in psychology and overcoming you know our our brains weaknesses basically. And I know you know like I'm always the first one to say like I fall down on a lot of this stuff too and I have these mental weaknesses where I still dollar cost average and it's ridiculous like on a percentage basis like you know the new money that I just moved into Vanguard like of the percentage of that money to my total amount invested in the stock market is immaterial at best and yet and so of course math would suggest just put it all in it's you know it's completely immaterial. But I still dollar cost.
savings, stocks
3495 - 3495 Jonathan Mendonsa Did you really.
3495 - 3537 Brad Barrett I swear I did. I did it over a shorter period than I normally would. So at least I'm happy with myself in that regard. But it's still hard. It's just hard. And I know you know my wife will listen to this and you know she she is maybe more adamant about dollar cost averaging. It's just there's some weakness that we have when it comes to investing and I'm cognizant of that. And I and at least am taking steps to just get that extra money into the market because I know it's sure as heck better over a five week period or a 10 week period than just keeping it in savings. So I consider that a success. You know maybe Jonah would say that's a half success or failure. But but I'm ok with that. You know.
3537 - 3585 Jonathan Mendonsa Absolutely. Alright so next we have our travel rewards segment where we pose a couple of travel rewards questions from our community to Brad. And Ben says love the podcast. Thanks for doing it. He says I am planning out my reward strategy for the year and I had a question regarding the Southwest companion pass. I have had a Southwest preferred card for five years. I want to go for the Southwest companion passes early as possible in 2018. So at last through 2018 and 2019. So here's my question. Should I open my first Southwest card in October 2017 so that most of the spending occurs in 2017 but that the fifty or sixty thousand bonus points will hit my southwest account in early 2018. Or is there some risk to this approach. So I should wait to open the first Southwest card until January 2018.
podcaster, travel, travelrewards
3585 - 3889 Brad Barrett Yeah this is a great question. Really really great question. I'll definitely pack it in the second I just wanted to. For people who are new to the podcast you know check out our podcast episode on travel rewards. It was episode 9 so you can go to choose F-I dot com forward slash 0 0 9. Or if you're on a you know iTunes or podcast player just download episode 9 and we have a lot of resources there we're really trying to build that out. You know we have a page with you know our top credit cards we have some suggestions on how to get started and all that kind of stuff. So definitely check that out. That's really really good resource so. OK Ben is talking about the companion pass specifically and you know this is one of the highest value items in all of travel rewards. Without question because what it does is you get this companion pass where you get you bring your designated companion with you on any Southwest flight whether you pay with points or with cash and you get to bring them for free so and the cool thing about how this works is once it's Once you've earned it it's actually good. Through December 31st of the year following. When you've earned it. So for instance it's it's March of 2017 now. If you earn the companion pass now it would be good through December 30 of 2018. So that's like 21 months essentially. So naturally as you can imagine the the whole trick is earning it as early as possible in a calendar year. So it's good for that entire calendar year and the following calendar year and the way to earn this is to actually earn one hundred and ten thousand Southwest miles in one calendar year by one person. OK. So the easiest way to do that is through these credit cards sign up bonuses. As Ben alluded to. So there are three Southwest cards that have either fifty thousand point bonuses most of the year or currently at the time are recording this. The Southwest business card has a 60000 mile bonus so. And the other two are the premier and the plus have 50000. So let's just say for argument's sake you opened up the business card and one of the personal cards and you hit the bonus requirements which you know their spending requirements and a certain amount of time you would automatically get the companion pass because the 60000 point bonus from the business card and the 50000 point bonus from the personal card would be 110000 boom automatically triggers your companion pass. And it would be good through 12:31 of the following year. So now Ben's question is about timing and this is crucial. He's asking is there some risk to the approach of opening it in October and then putting some of the spending on it and then hopefully getting all the points to hit in January. And there is unquestionably risk to this and I have heard many people unfortunately who timed it wrong or hit their minimum spending requirement in the month prior. And you know got the 50000 points in November or December of one calendar year and got their other bonus in January of the following calendar year. And you know that's just not good enough because you need 110000 points earned in one calendar year. So the whole thing is screwed up then if you do that so unfortunately. And you know I've also then heard situations where Chase has and you know chases. Absolutely wonderful with these bonuses. But it's a little unpredictable when they're going to give you that the actual Southwest miles whether it's when you hit the minimum spending requirement or after the close of that statement. So you know I have some very anecdotal. Most people say that the points hit after the statement close you know it comes anywhere from a couple of days to a couple of weeks after that statement close when you hit the minimum spending requirement. I actually heard this one anecdotal report in the last couple of days about one of our community members who who actually got the bonus points triggered and sent to their Southwest's account before the statement closed. And I never heard of that before and that that kind of scared me. So you know Ben that that is definitely a concern. So you know the worst case scenario would be you plotting this all out and then getting some of the points in December and then the whole the whole strategy is gone. So to me the best possible time to do this just to avoid any risk is to open them in let's say early to mid December you know apply for them. They'll show up a couple of days later maybe a week later. You do your spending and you know then make certain that all the points hit in January of 2018 so you'll have it for essentially 24 months at that point or 23 plus months which which is remarkable. So yeah I mean that's definitely my advice. You know please don't open it up in October that's just that's just too high of a risk in my opinion.
podcaster, travelrewards
3889 - 3913 Jonathan Mendonsa And by the way Ben I'm going to probably do the southwest this December with you so well-timed question. Alright question number two. Jed says I want to open some cards and get in all the points I already have a lot of Delta miles but nothing for hotels and we're probably two years or so away from taking a vacation where we could use them. Now I know a lot of the cards have annual fees. What's the best strategy for accumulating points before the fees eat away your margin.
3913 - 4175 Brad Barrett Yeah this is this is a good question. It's something that obviously is important to people. And you know a long term strategy is important as well. And as far as hotel points hotel hotel points are really really easy to use. You know for a lot of people they like hotel points better than the airline miles because airline miles have they. There are some there are some limits. You know everybody hears the horror stories of blackout dates. Right. And you know what. In most scenarios that's just a finite number of award seats available at like the quote saver level so you know we look at that as many people who aren't really aware of the rules. Look at that as a blackout and they think it's a scam. You know and I think that's just misinformation honestly. But but you know regardless it's still a limitation. So airline miles are a little more difficult then than Hotel point certainly because most of the major hotel chains have have a rule where if there's any standard rooms available to pay for it you know with a regular cash booking you can use your points to book that room. OK so most hotels except for you know the most popular hotels most hotels are not at full occupancy every single night. They're just not. So that opens up a whole lot more availability to use hotel points so you know that's kind of like definitely a low hanging fruit of the travel rewards world is hotel points. Also Southwest actually since we just talked about that Southwest does not have any of those award limitations either. It's just like a simple function of their cash price is how many points of cost so you know for families especially for larger families who need to book three four five award seats Southwest is a really easy way to go about this so. But anyway getting back to hotels is you know I especially like Hyatt Hotels and Starwood Hotels because I find there award charts to be very very reasonable. I know with Hyatt I often find Hyatt Hotels in category 1 and Category 2 which are only five thousand points and 8000 points respectively. I find those readily available in cities that I want to visit. And you know 5000 points that of 50000 point bonus goes a whole heck of a long way. Right. You know you get 10 nights in a in a category 1 Hyatt and those can be really nice hotels. You know certainly like the Hyatt Place and the Hyatt houses of the world you know free breakfasts that kind of thing. So we definitely focus on Hyatt and the easiest way to get Hyatt points is through Chase ultimate rewards. So as we've discussed previously there are cards like the sapphire reserve the sapphire preferred the ink business preferred and you can transfer those points from Chase to your hyatt account. Okay. So from that point on they become Hyatt points and they are no longer related to your credit card now. You know it is not in any way shape or form our place to tell you whether to close a credit card or do any of that stuff. That's that's not what we're here to do. But you know obviously if if Jed here is worried about annual fees you know he has to make a decision. You know how much value he's getting out of that card. But you know if he so chose he could transfer those points out and they'd become hyatt points. And again they're not related to the credit card any longer. So you know that is probably a pretty good long term strategy for for Hi-Point certainly. And with Starwood there are a lot of very easy ways to rack up Starwood points. There are actually right now through April 5th 2017 there's an all time high bonus on the Starwood Amex business and personal cards. It's thirty five thousand point bonus when you hit all the spending requirements and and that's the highest bonus I've ever seen in that card. And while 35000 points does not sound like a massive amount the star would award chart is just so fantastic. I mean you can get category one in two hotels on the weekends they have lower lower prices. It's like 2000 and 3000 points per night if memory serves. And yeah which is amazing. Right.
families, travelrewards
4175 - 4180 Jonathan Mendonsa So I mean you can get several days a week several weeks at the hotel and.
4180 - 4281 Brad Barrett Get a couple of weeks at a Category A category one hotel which is amazing from one bonus and also right because the star wood and Marryat are now merged. You can actually take Marriott points and transfer them to become Starwood points. OK. Marriott points are worth a whole lot less than storage points. It's actually three Marriott points for one Starwood which doesn't sound too fantastic of course but but in my opinion I'd rather have 30000 Starwood points than 90000 Marriott points so you know that's that's another nice easy way there are a bunch of married cards. Like I said there's a bunch of Starwood cards so you know again once those points are sent to your Marriott or Starwood account every month automatically from the credit card they're not related to that credit card anymore. So those are points in your Starwood account. At that point so you know then it becomes any account activity similar with with Hyatt is any account activity whatsoever resets the expiration clock on all those points so you can keep those points going almost indefinitely just buy any little bit of activity even you know transferring 1000 points from Chase ultimate rewards which is the lowest amount you can that would reset the clock on all of your high points or making one charge on your Starwood card for $2 right. That would those two points would get sent over to Starwood and it would reset the expiration clock on all those points so you know just there are lots of very easy ways to keep points going. So yeah I hope that that gives you a pretty good overview of what to do with your points.
4281 - 4501 Jonathan Mendonsa Those are great answers. Brad I definitely think that'll be something useful and then also two things with that one. Go check out our travel rewards page. And then on that if you want there is a free excel file that you can get access to and that will actually give you a list of all the transfer partners that we talk about how to sign up with their accounts individually which are all free in Excel files free. But once you do that you can set up accounts for each one of those. So if you need to take advantage of some of those advance transfer techniques you should be able to do that so. OK. Well that's basically comes the end of today's segment where we go on what's what's going to be going on with ChooseFI here. well this upcoming Monday we've got mad fientist on this is going be episode 17 and it was worth the wait. It is fantastic. The podcasts that we're going to release on Monday unpacks the story of the mad fientist it really is an origin story. It is you know his mentality his mindset kind of what drove him to create the content that he drove what he struggles with what he's good at. It really is behind the scenes look at you know his life over the last you know what are the five six seven years. And he has had such an influence on our community the fire community that it is a podcast that we were desperate to do. And I think it came out really well and Brad was just as excited about it as I am and I hope you all enjoy because I don't think that y'all will have seen anything quite like that out in the podcast arena. Also all the Choose FI I told you about the home page go check it out. Choose FI dot com right now it's been a completely redesign home page. When we initially started we wanted everybody to hear that used F-I story why we needed to take that first step. You know us now. Right. So we want to get you deeper into our content. See all the cool things that are going on so that home page represents that I'd love your feedback on that. So feedback could choose FI dot com if tested if something's not working or if you have an idea for how to make it better. I love your feedback and on the feedback Swaine stash which by the way is a great handle. He follows us on Twitter and he has a podcast crucible podcast and it has nothing to do with FI it's a videogame podcast. But he suggested that we open a slack forum so that as an app that you can use to have a conversation with your community while the podcast is rolling out that's some next level big league stuff and Brad and I are pretty excited about the idea. We want to make this a community driven show. We visualize a two to three year future in which this is like this is a full time thing for us and were kind of because we love spending time with you guys talking about this content and you hear in our voice we love it. And I think we're going to be exploring ideas for how we can get you even more involved than you are now. This isn't going anywhere I choose FI is going to be here in 2018. And so we want to get you involved and we want to get you involved early So we're starting to spend more time on our Facebook page. That's a great place for you to actually go and leave your feedback on an episode. I mean as you I've started to figure out if you leave us a comment you leave us anything we can use we jump on it. I mean we love your input so you're like wow what are the odds actually mentioned my comment. Well it's pretty darn good because we love your input on that same. You know if you have an idea for what next level stuff that we can do to make this community better let us know. We're interested in that feedback right now. So anyways all your thoughts your ideas your comments e-mail it to us at feedback at Choose FI dot Com if you want to get on our email list. You can go to choose F-I dot com slash subscribe or if you're listening to this on your podcast device and you don't have access to you know getting on the Internet at the moment. You can text choose ephi to 4 4 2 2 2 just text choose FI to 4 4 2 2 2. And we look forward to grow and together. And we're just having a lot of fun with us as we continue to go down the road less traveled. Brad any final thoughts.
Jonathan_Catchphrases, mindset, podcaster, travelrewards
4501 - 4619 Brad Barrett Yeah just to echo what Jonathan said we are loving this. This is really the most exciting project I've ever been involved in. And you know we think about this all day everyday we just we absolutely love it. And you know you guys are the lifeblood of choose FI. And please you know keep the questions the comments criticisms just keep them coming. We love it. And you know we just cannot do this without you. So another thing I would ask is if you have you know the personal finance and the FI blogosphere if you will. It's humongous. And you know we don't know everybody by any means. We don't we don't have the time or expertise to really research hundreds of blogs but we want your input if you if there's someone who's you know a cutting edge thinker or just doing something different or somebody who has a great story you just shoot us a real super quick e-mail feedback at ChooseFI dot com and just let us know you know send us the article that you think is really great and we can get that person on the podcast and and talk through that. That article you know that's what we're all about here is you're not having these guests come on and just do like the typical meet and greet and you know let's hear two minutes of your story and you know the typical stuff we want to unpack on a deep level what people are doing that's different and really a game changer. So you know you can help us become acquainted with these people and we can get them on and have them explain their story to our entire audience and in turn the whole Fi community. So that is absolutely crucial to us. And you know just again to the iTunes reviews you know that is really the biggest thing you can do to help us. It's just take 30 seconds. Go to iTunes and just leave us you know. Hopefully a five star rating and just a quick one or two line review. It is. It really means the world to us so yeah I mean that's that's my big ask for the audiences you know just keep the feedback coming. And if you do have a couple of minutes just just leave us a quick review.
blogger, podcaster, testimonial

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