017 - Mad Fientist Origin Story

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0 - 44 Jonathan Mendonsa All right guys you made it to episode 17 and today we have a very special guest mad Fientist. This guy is arguably on the Mount Rushmore of fi. He has been credited with authoring the Roth conversion ladder. How to make the tax code work for the early retiree and get the best of both worlds a world in which you can put your money into your tax advantage vehicles tax free and pull it out tax free using preexisting laws that were already in place that nobody including very very high level accountants had just missed. They just totally missed it. And today we've got them on the show and we're going to take a chance just to take a step back and look at his origin story so this will be a lot of fun to have. Brad obviously here with me today to help me do this. And also Brandon the Mad fientist. Thanks for coming on the show Brandon.
accountant, rothladder, tax
44 - 46 Brandon - Mad Fientist Thanks for having me guys I appreciate you having me.
46 - 54 Brad Barrett Yeah man so we want to unpack the story of the Mad Fientist the origin story. I think you know everybody in this space knows you.
54 - 56 Brandon - Mad Fientist Thank you.
56 - 89 Brad Barrett Yeah you bet. And lucky we've become close friends in the last couple of years met a bunch of times and I've gotten to know you. But I think your readers see all these optimizations. And in my mind I sometimes think of your guinea pig and how is that really Brandon. Or is he as optimized as that. And I'd love to just hear your story to dive into it and say like where did you start. Where do you optimize where do you not walk the walk. And we'll get into all of this obviously but that's kind of what I'm looking for is for you to really share it. Who is the Mad Fientist.
89 - 99 Brandon - Mad Fientist No I'm excited to share it. And you have as you said we've been friends for years so it'll be interesting getting fielding questions from you because you've known me and you've seen me grow and change over the years I'm sure.
99 - 116 Jonathan Mendonsa Yeah for sure. Another thing that's really cool. I think it's a little different is you have thirtysomething odd podcasts and most of them are interview based with different guests but your content really hasn't been featured on a podcast before and you've been writing probably more than you've been doing interviews how many articles do you have now.
116 - 140 Brandon - Mad Fientist Yeah not too many more actually I think. I think I was looking today actually and total number of posts published on my site is about 90 or so. So yeah I guess like 32 of those are in or podcasts so you know the rest are all of the articles but yeah considering I've been doing this since early 2012 it's a shockingly small amount of stuff I've actually published.
140 - 157 Jonathan Mendonsa But it's very heavily concentrated. I mean the information that you've really put together and accumulated you had to dig through the weeds to find this stuff. And I know a lot of people reference it as almost a pillar post. They can go to when they're trying to figure out how to incorporate these really heavy IRS documents into their own life.
157 - 187 Brandon - Mad Fientist Yeah you know I definitely focused on quality over quantity. And any time I would get stressed out about like oh man it's been like a couple months since I've actually published anything. You know I'd always just try to tell myself you know it's not the amount of stuff that I put out it's the quality of it it's always been a focus. A lot of it is my laziness as well although I can't just say that I'm sitting here working 40 hours a week coming up with these amazing articles and that's why it's always you know months in between the publishing stuff. But it's a little bit of both I guess.
187 - 207 Brad Barrett So all your tax optimization articles I think that's where a lot of people know you and know like Jonathan reference you diving into IRS documents. You're not an accountant you're a computer coding. How did you get into this. I can just picture your wife Jill sitting there shaking your head watching you pore through documents like what does that process look like. How do you get excited about that.
207 - 344 Brandon - Mad Fientist So the whole mad Fientist came about because I thought that like I was like everyone else when they stumbled upon this whole world. Like I I found early retirement extreme first and you know I was super excited about it and I was like well this is you know this is what I've been saving for for all these years. This is like this is actually a goal because before that it was like just a goal to get rich and I didn't know why I wanted it to be rich. I just knew I wanted to have a lot of money. I liked managing money. I like thinking about money and planning and all that sort of stuff. But I had no real goal for the money. Like I never wanted a fancy car a big house or any of that stuff so I was just saving for the sake of saving and just have a portfolio. So when I stumbled upon early retirement extreme I was like oh man this is exactly what I've been saving for and this is perfect so. So I was super excited about it but then I knew that there was ways that I could get there quicker if I really put in some research and like dove into something like at the time I thought it was going to be like investing strategy. So I was like oh yeah you know if I really spend some time learning about investing and figuring out all these investing strategies then I can get there a lot quicker. So I was like very well I'll start a site and I'll write about it. And then the need to publish more post will make me actually do the research that I know I could do to reach financial independence quicker. So I started researching into that investing route and I quickly realized that you know passive investing is by far more successful than any other type of investing and yeah, there's a possibility that I could beat the market by actively managing my portfolio, but Really the odds are against me and the expenses are against me and the taxes are against me and all the other things that active investing in you know the downsides of active investing. Those are all against me. So I was like alright well that's not going to work. And then I started looking into some other things and that's where it ended up leading to like the whole tax avoidance thing which when I set out I had no intention of being like the tax avoidance guy and I knew nothing about taxes. I always did my own taxes but they were quite simple so it wasn't like I was doing that in my career before it was like fairly simple taxes I was doing. So yeah I sort of just fell into it naturally just in all selfishly just like trying to find ways to help me get to financial independence quicker.
indexfunds, savings, tax
344 - 364 Brad Barrett But how did that even come about. Like what what even clued you in. Was it something you read on the ERE before I read your stuff and full disclosure. I'm a CPA here. Right. And I honestly I loathe taxes I don't know how I got into that industry but. But like I couldn't imagine sitting there poring through these documents or getting excited about this what actually what was that spark for you. Do you remember.
364 - 498 Brandon - Mad Fientist Yeah. At the time I was reading a lot of personal finance blogs so I put like the first blog I ever read was get rich slowly. And up until that point I didn't know what a blog was which is terrible because I'm a computer science major in college and you would think that being a computer science major I'd be a computer geek and stuff like that but I actually got into comp sci because I was good at math and I liked math. So I was never like a like a computer nerd like up all night hacking or doing anything like that so I really didn't even know what a blog was until I stumbled on get rich slowly and I was like whoa this is just this normal guy called J.D. and he's writing all this amazing stuff about his finances so. So that led to a lot of other sites and I was just consuming loads and loads of personal finance stuff. So I would read these personal finance things and like a recommendation like oh you should do a Roth IRA. You know I'm reading these things and I'm just thinking well, Yeah that for maybe for the whole vast majority of the world that makes sense. But early retirees are such a different breed that all of this like standard financial advice that you just read in here all the time when you're when you're reading personal finance blogs and other mainstream finance sites it just doesn't apply. So I was always like I'm I'm looking at this through the very focused lens of early retirement. So all of this stuff that doesn't really make sense. I want to find the thing that does make sense. And so then I just started running numbers and like looking into that would lead to like oh questions about the tax code. And then I'd have to look into the documents or you know do Google searches and hopefully find an article that maybe somebody else that summarized some part of it. But a lot of the time I was just leading to these tax documents that I had to then investigate. Luckily that was it was so focused that at least I had like a goal. So it wasn't like I was just thumbing through like hundreds of pages of IRS documents to find loopholes that was always sort of like that core idea of this is what I'm hearing all the time. It doesn't apply to early retirement. I'm going to try to figure out a better way. And then it's trying to find the answer. So it was it was a lot more focused.
blogger, college, ira, roth, tax
498 - 540 Jonathan Mendonsa There were like three things that I'm thinking of as you're saying this one. Brad was also getting excited about when he said early retirees are such a different breed and they absolutely are. And all the people that put all that effort into financial planning isn't it always targeted to the person that's going to work for 40 or 50 years and retire at 65 and they collect Social Security. Absolutely. Yeah and you're kind of this front runner. I wouldn't say you are the first but you're definitely a leader in this space and what you did is use cumulated resources for people that were interested in this alternate path that nobody was talking about two or three or four years ago and you built this repository of resources of specific investing and tax optimization advice that only applied to this little niche that we're in.
socialsecurity, tax
540 - 604 Brandon - Mad Fientist Right. And then in the audience helped drive a lot of it as well. So like I wrote one of my first you know tax optimization post and people loved it and I got lots of great feedback and I was like oh so people are really into this as well which then led me to like think well what else what else is out there that could I I can optimize. And then even in some cases one article somebody would leave a comment and say hey have you even thought of this. And then that would lead down an entirely entirely new rabbit hole. And that's how sort of a back catalogue of tax optimizations started being built because you're right at the time no one tax avoidance wasn't even like a buzzword or anything and there wasn't like no one had even mentioned or know knew what a Roth conversion ladder was or any of these sort of phrases that you hear all the time now like none of that was around. So yeah it was just all sort of came about naturally which was really exciting for me because I was learning about these things and you know applying them to my own life so I was speeding on my own journey at the same time that I was helping everybody else speed up theirs.
rothladder, tax
604 - 645 Jonathan Mendonsa And I want to plug both your audience and our audience with this one and just because of what you just said because learning is absolutely a two way street and what you've done and what I do and Brad does and most of us in this community is we get an idea and then we explore that idea and we find out more about it. But until someone plants that seed that it's possible or that it's there it's really hard to get started with it so your audience jumping onto you and they are they are extremely active on your Web site leaving those comments. I mean those comments are incredibly insightful and so when you leave comments on his site or on our site that isn't just there and just collecting dust a lot of times it's the inspiration for us to go get a better answer or do research and that's what Brandon saying that he basically did right that gave you the direction for the next several years.
645 - 719 Brandon - Mad Fientist Right. And that's still what I do so like obviously. Now my site has grown so much that I can't reply to every single comment like I used to which really kills me because like I said I've drawn so much inspiration from those comments. So I don't actually reply to many comments at all now which is terrible. But I would much rather just keep continue like researching things and producing more content. But it's not I don't not read the comments so I'm currently redesigning my site. And as part of that redesign I'm also going through and just like going through every single post and I'm like how can I make this better. How can I improve this and if I can't. Is it worthwhile keeping on my site at all. Should I remove it. So part of that a big part of that process is me going through all of those excellent comments some of which I've replied to back in the day or even recently and some of them I haven't. And going through and then diving into some of those questions either to then add it to the post and make the post even better or to actually do even more research because some of the comments are like leading me down the rabbit hole or so. So yeah it's still that process is still happening just a bit different now that the site has grown so much. But yeah that's hugely important.
719 - 782 Brad Barrett Yeah. Brandon I love things that that just make me see the world differently than when I before I read it and I can definitely point to Jim Collins stock series is one that literally changed the entire trajectory of my investing life and yours with basically not investing in a Roth IRA and then the Roth IRA conversion ladder. Those are things that I just reflexively and this is so Thetic honestly to admit this as as a math person but for me it was always you hear in the public conscience sense that Roth IRA are the best because down the road you pay $0 in taxes on it. Right. But I never looked at the math when I never thought of it from that different perspective of like you said we're a different breed. Right. If you can while we're sure it's all well and good to not pay taxes on it down the road with with your method of putting it in traditional 401k's and then controlling the tax on the back side you can potentially cut your effective rate on that down to zero or pretty darn close. And I'd love to hear you just kind of talk through that real quick. Just just for the audience.
401k, roth, rothladder, stocks, tax, traditional
782 - 821 Brandon - Mad Fientist Yeah that whole thing changed everything for me as well. So when I realized the Roth conversion ladder was possible. That just opened the floodgates for me as far as like really trying to maximize every pretax account that I can so. So up until that point I had been maxing out my retirement accounts and I had thought of my life in two phases it was before standard retirement age and after standard retirement age. So a lot of times especially at that point in the whole community everyone was like I'm not contributing to my retirement accounts because I'm retiring early and blah blah blah. And I was always like this is crazy because early retirement contains standard retirement.
821 - 823 Jonathan Mendonsa It's not exclusive right.
823 - 977 Brandon - Mad Fientist You don't choose one or the other. Early retirement contains standard retirement so I was always of the mindset like all right well I'm still planning for standard retirement so you know this 403B which was a nonprofit version of a 401k that I was maxing out at the time. I'm like you know this is fine maxing this out and yeah maybe I'll have too much in there potentially but I still have to plan for my 65 years to death. So why not use some tax optimize accounts to save for that. So up until I found the whole Roth conversion ladder I was always like just planning two stages of my life. The before standard retirement age and after. So then I started doing research into ways to get that money out of the 403B or 401k or IRA traditional IRA and all those pretax accounts before retirement age. And that's what led to the Roth conversion ladder so the idea behind the Roth conversion letter is you're allowed to transfer money from a traditional IRA to a Roth IRA and you just pay tax when you do that transfer. And then five years later after that transfer you can take that money out of the Roth tax free because you've already paid tax on it. So for an early retiree that's amazing because for a standard retiree they're working their entire lives so they can't do that transfer because they're going to pay tax on that money and if they're earning a full salary then you know they're just going to get taxed. a crazy amount of money on that so it doesn't make sense to do that. But for an early retiree who's you know or whatever retired at 40 they've got 25 years before they hit 65 that they can slowly transfer all of that money over paying the minimum amount of tax just every year basing their role the amount they roll over on how much you know tax free space they have. left or. How much 10 percent bracket space they have left or whatever and they can just slowly do that over years and pretty much get all that money completely tax free. So it's tax free going into the traditional IRA. It's tax free. Hopefully if you plan your roll overs right and then it's tax free when you withdraw from the Roth. So that changed the game for me completely so I was already doing research into some of this stuff. But as soon as I found out that I could actually tap into that money first then it was like all right what is. What is every single way I can contribute my money pretax and then that led to sort of like all these other strategies like front loading and all this crazy stuff that I eventually started researching and writing about. So yeah that was that was a that was as much of a game changer for me as that sounds like it was for you Brad.
401k, 403b, ira, mindset, rothladder, tax
977 - 1051 Brad Barrett Yeah. No for sure I mean that should be an aha moment for everyone out there and you know you definitely will have a link in the show notes for Brandon's article about the Roth IRA conversion ladder. So the show notes are choose F-I Dotcom slash 0 1 7. But yeah just to drill down on that just for for one more second just so everybody understands it's essentially for the early retiree. You have no income. Right. I mean that's that's the the play here. So what you're the taxable event is the conversion. So taking it from your regular 401K and putting it into a Roth as Brandon said that's a taxable event. So let's say you move $40000 over you're going to have $40000 in income on your tax return. But now you have the standard deduction you have personal exemptions. Who knows you might have child credits or something. Your tax rate your effective tax rate on that 40000 that you converted is going to be either zero or pretty darn close. So the play is ultimately pulling all that money out at essentially zero percent effective tax rate. Now obviously the question that should be going your head is OK what do I do with the first five years because like Brendon said you can pull that out after five years. Right Brandon.
401k, roth, rothladder, tax
1051 - 1052 Brandon - Mad Fientist That's correct. Yes.
1052 - 1097 Brad Barrett So I think for the early retiree it would be to have five years of living expenses in your taxable accounts or at least this is how I understand it is to have five years of living expenses in your taxable accounts and you draw that down over that first five years. All the while each year you're doing this conversion. So then you get to year six or whatever it may be five. However we want to call it. And each subsequent year you have that conversion from five years in the past which again you've paid essentially zero in tax on. So on a traditional 401K you pay nothing in tax upfront and you're paying essentially nothing in tax. When you pull it out so I mean that is a remarkable thing. I mean that is a true game changer. So Brandon thank you.
401k, tax, traditional
1097 - 1109 Brandon - Mad Fientist No it was just like I said it was as much of a game changer for me as it was for everyone else that read it. Yeah it just completely changed everything. So I was I was very excited to figure it out.
1109 - 1119 Jonathan Mendonsa The one thing that ya'll haven't mentioned though is how does that come into play with the 10 percent penalty when you're withdrawing your money before you're 59 and a half. Just how does that work into that picture.
1119 - 1130 Brandon - Mad Fientist It's there's no penalty. So if you wait the five years there's no penalty because you can take out you can take out contributions to a Roth IRA any time.
1130 - 1134 Brad Barrett Sorry to interrupt its contributions so yeah everyone.
1134 - 1196 Brandon - Mad Fientist So the contributions to a Roth. You can take out at any time so I could pop five grand into my Roth IRA right now and then tomorrow I could take it out and not get penalized because that's with post-tax money. So the conversion is a bit different. Obviously you're converting it so it's not an actual contribution it's more of a conversion. And the rule there is you just have to leave it in the Roth for five years and then you can take it out. So yeah no penalty at all. If you wait five years and that's why as Brad said you build this ladder so you can either do it two ways you could do it you know just like taking advantage of the lowest tax rate if you don't actually need that money then you could just every year you could convert as much as you want tax free and then that's fine. But if you need the money then convert as much as you need. So if you know in five years you're going to need 40 grand a year then every year you just convert 40 grand you're going to maybe pay a little tax on it. But that's going to be 40 grand that you can then take out of your Roth IRA every year if you continue rolling it over. And yet it's completely tax penalty free.
ira, roth, rothladder, tax
1196 - 1231 Brad Barrett Yeah that's really like I said absolutely crucial so hopefully every one is really taking this in so Brandon I want to actually just kind of go back and go back to your origins. If you don't mind so one of the things that we talked about with Justin from Root of good was was kind of like hacking college and the decision for college and I'd be curious and I don't know the answer to that. And you might not have an interesting story but I'd love to hear it like did frugality come into play with your college decision. Did you do anything that's especially interesting to save money or to not come out with debt. Or did you come out with debt. I would just love to hear it.
college, debt, frugality
1231 - 1241 Brandon - Mad Fientist it wasn't actually. Luckily it was due to not getting my first choice school which is awesome.
1241 - 1244 Jonathan Mendonsa Denied best thing ever.
1244 - 1380 Brandon - Mad Fientist It wasn't great at the time but looking back on it it was so I I applied I was in North Carolina at the time and I'm originally from Pittsburgh Pennsylvania but I'd moved to North Carolina in eighth grade and went to go down there so for college I applied to a UNC Chapel Hill and Duke and Duke was my first school first choice school. But maybe some people in the audience know that Duke is a private school and UNC Chapel Hill is a public school. And I think the tuition difference was crazy. I think Duke was over 25 grand a year at least. And then USC was like right around five grand a year because I had in-state in-state tuition. So I applied to both but I had my heart set on Duke. And then I got waitlisted at Duke and I got accepted to Chapel Hill and I wasn't going to find out if I got into Duke until like really close to when I would start. Pretty much. And so I ended up making the decision and you know like Chapel was beautiful I loved it there and I was like I'm just going to go there and you know it's not as highly ranked as Duke is but it's still you know top 25 school and so I went there and then I ended up not getting in in the waitlist wasn't wasn't successful for Duke anyway. So I'm glad I made a decision when I did and not waited to find out I didn't get it anyhow. So I lucked out. I got into one of my most favorite places in the world now. I love Chapel Hill so much. UNC was a fantastic school. The computer science department there was one of the first in the country and it was it was a great education and there was all in-state tuition. So I left. I left school probably with I don't know. I want to say between 10 and 15 grand worth of student loans still and then I paid $131 a month for I don't know how many years because it was such a low interest rate and it was the oldest thing on my credit report so it was like the best thing for my credit history. So I kept it on there for years and years paying just $131 a month but eventually paid it off my. I then went back to get a graduate degree and that's a little bit more exciting if you want me to talk about that.
college, college-loans
1380 - 1381 Brad Barrett Yeah go for it.
1381 - 1465 Brandon - Mad Fientist So yeah I always had planned. I wanted to try to get either a master's or a Ph.D. or something. But obviously when I found financial dependence I knew it wasn't going to be to get a job it wasn't going to be you know resume motivated or anything like that. But I still wanted to do it I just wanted to see if I could do it. So we moved up to Vermont and because my wife got a job up there and we had we love the mountains and things like that. So we moved up there and when we moved up I realized that we were living like within 15 minutes from an Ivy League university. So I was like Man that would be sweet. And since I didn't get my fancy Duke degree I could do a degree I could get my Ivy League diploma from another good school. So. So I was like I wonder if I could do it for free if I'm an employee. So I started looking into it and it was like yeah if you work here for a year you can get a free master's and only a certain number of programs you could take but you have yet to get a master's in. So at the time I was working remotely for a Boston company and it was that was a good situation. You know I had a lot of freedom and stuff but I was like you know what I'm not going to do that. So I applied for a position a software developer position at the university and I got it. And then yeah I worked for a year and then I applied to the program and got in. And then yeah. And then two years of actually three three years of hell started.
1465 - 1469 Jonathan Mendonsa And sign me up
1469 - 1513 Brandon - Mad Fientist Exactly. If I remember I remember going there and working for that first year and I'm like why isn't everyone getting a free Ivy League degree. This is crazy. Why aren't why aren't people doing this. And then like two weeks into the program and I was like super stressed and I had so much work to do and I still had a full 40 hour week job and I was like this is why nobody is doing it. Like they're not stupid like me. They're not taking this crazy thing on. So see I was pretty miserable but now that I've done and I'm glad I did it. It was actually pretty cool. So yeah. So that was completely free besides some taxes they tax you on the education benefit. But yeah it was a free master so that was a little bit more of an interesting story than my undergrad anyway.
1513 - 1541 Jonathan Mendonsa Yeah that's definitely a hack that you pulled off there. There's definitely different ways of doing it isn't it. I mean but I think the big thing is college is changing the value of college seems to be rapidly changing and to our audience in this rapidly changing environment. You need to be asking these questions. Do I need to go into six figures of student loan debt in order to get a job. And if I decide to make that choice what career path will align with my ultimate goal. Does this make sense though. It's always nice to hear a case study like yours where you know you just did a little differently.
career, college, debt
1541 - 1646 Brandon - Mad Fientist The kids in my program that were getting a master's in their parent like 45 grand a year to get this master's degree. And they were right out of like getting their bachelor degree which was also like whatever six figures were. It's just absolutely crazy and like I really enjoyed the program but it was like I couldn't imagine what kind of job the program would prepare you for. It was very it was like a master of arts and Liberal Studies which was a complete 180 from what I had done in undergrad computer science and it was great but it's like what are these kids doing they're getting so much debt and the job prospects from that that are just not that great. So yeah I I completely agree I think the education landscape is changing so much. And even for computer science like I said I came out of there even though was a great education like I came out of there being able to explain algorithms and you know the theoretical stuff but it was like am i actually going to be able to build stuff like we built a lot of like programs and things like that. But you could have easily you know self-taught which a lot of my colleagues in my career were self-taught and they were great developers so. So yeah I think the whole brand name education isn't as important as I thought it was when I was younger and especially after completing You know an Ivy League, supposedly prestigious thing. You know my my much cheaper state school I would say it was a better education and then I'm sure you could get even better educations if you're just really focus and self teach yourself or you know trade schools or community colleges. There's loads of options but I think it's just a matter of how hard you work in. Yeah it's it's not it's not that name brand yet.
career, debt, trades
1646 - 1657 Brad Barrett No I totally totally agree. I just want to just kind of ask you a couple of quick hit questions if you don't mind your firsts first year in whatever your first job was. Did you max out your 401K.
1657 - 1696 Brandon - Mad Fientist Yes I was my first year was in Scotland so my wife is from Scotland and I studied abroad in Scotland my junior year and we moved over as soon as I graduated and my first job was here in Scotland which is where I'm talking to you from now. And yeah over here it's it's a personal pension and it is my only regret of ever maxing out a retirement account only because this thing is locked down so hard and the funds are terrible like I can't get in I can't get it out I can't get it out at all. I've tried to look into it and try to figure out how to get it out and I cannot get it out of there no matter what.
1696 - 1700 Jonathan Mendonsa What an awesome confession. I love that.
1700 - 1716 Brandon - Mad Fientist So I got this money that's in these terrible funds because that's the only options I have. I can't move it and I probably technically should be reporting it to the U.S. government because you have to report if you have foreign accounts. But I haven't done it in years past.
1716 - 1719 Jonathan Mendonsa I can edit this out for you.
1719 - 1745 Brandon - Mad Fientist That's why I'm still anonymous. So I can share but the rules are different. Like I read some things that say personal pensions you don't have to since it's not actually money like it's going to be a defined benefit. I guess when I hit a certain age so it's not really money. But anyway so it's a big stress this headache and it's not even worth it. So yes I did max it out but that's my one regret.
1745 - 1756 Brad Barrett What's the most expensive car you've ever bought. Oh yeah this is a good one. This is a good story. So and this is one of my secrets I shared at one of the Ecuador Chataquas was which was very embarrassing because.
1756 - 1759 Jonathan Mendonsa Just taking advantage of your honesty.
1759 - 1770 Brandon - Mad Fientist There it was at the Chatauquas you like introduce yourself it's like a truth than a lie or two truths and a lie or something like that. And one of my truths was this and Mr. Money Mustache was right across the room and he was staring at me and.
1770 - 1772 Jonathan Mendonsa Oh you got a truck.
1772 - 1806 Brandon - Mad Fientist No no I didn't get a truck it's got worse I got like a crappy SUV so my wife and I went and lived in China for three months and then within a few days of moving back from China we were moving to Vermont and neither of us had ever been to Vermont. And we had to do all this stuff we had no belongings or car or anything so I leased a Toyota Rav 4 because I was like well I need it for the snow. Don't have time to look into like used cars because up until then I've had only ever had used cars.
1806 - 1812 Jonathan Mendonsa I just want to put into perspective you least a 14 mile per gallon SUV. I just want to clarify.
1812 - 1813 Brandon - Mad Fientist That's exactly right.
1813 - 1815 Jonathan Mendonsa That's awesome.
1815 - 1875 Brandon - Mad Fientist And yeah and I was like well you know renting people rent houses and they appreciate so renting a depreciating asset makes a bit of sense. and then I was like yeah I'll just lease for two years and that's fine whatever. It's just a single payment. So anyway I did that and it was awful. It was a really nice you know whatever is a nice car and it handled the snow ok. But yeah those payments were stupid and then just handing it back to the dealer was stupid. And so yeah that is besides that. That is yeah. That's the newest car ever because it was brand new. Every other car has been at least I would say 10 years old and right now we own a 2006 Honda Jazz which is like the UK equivalent of the Honda Fit which is now my favorite car and that costs like it cost thirty four hundred dollars. And we bought it a few years ago and it's been fantastic. So.
1875 - 1880 Jonathan Mendonsa So yeah what we call that in the fire community an econo hatchback is that. Is that the class that it fits into.
1880 - 1892 Brandon - Mad Fientist Exactly so. Yeah. So I have a little redemption there but yeah that was such a bad thing was such a bad move. But what do you do you live you live and you learn I guess.
1892 - 1893 Brad Barrett Write a blog post about it.
1893 - 1919 Brandon - Mad Fientist And no that I have a blog post that's been in my To Do list for years and it's like all the stupid mistakes I've made because sometimes I think you know obviously I'd put all of my like a finely tuned ideas that I've thought long and hard about and edited and all that stuff on the blog so I don't want people to think that I'm just like yeah done everything right financially. there's so many stupid things I've done in the past so one of these days I'll get around to reading that article.
1919 - 1939 Brad Barrett Nice. Yeah that was actually my next question which is going to be like instances where you like don't walk the walk or optimize things like that. I mean obviously we all make mistakes. Right. So I don't expect you to list out every single mistake you've ever made but like is it does anything jump to mind like where you don't walk the walk of the FI community or your advice.
1940 - 2036 Brandon - Mad Fientist Absolutely yeah. And my biggest and this is something I still struggle with even today even today on my To Do list. I say I have invest in V X-U.S. because I want to increase my international exposure to 15 percent. So this is my to do list to do today and yet I'm looking at the market and it's up and VX-U.S. is up and it was up yesterday which is why I didn't do yesterday and it was down the day before but I was like oh it's going to go down further. And it didn't. It's just been going up since and I still haven't invested. So market timing for me is such a huge problem that I can't solve and I solved it for a bit and I set up automated investing for my taxable account and then I canceled it stupidly because I was like not not oh this is too high I don't want to keep investing in this. And and then it just kept going going up and I haven't invested. And I have so much cash that I need to deploy and it's it's always been a huge problem Luckily the retirement accounts are always automated because that was just coming out a payroll deduction. So that was the least that kept me good. But yeah my my taxable account is either way too much cash or it's stupid like I won't even be like a logical thing like it it'll be like oh VXUS is at forty seven point two one my hockey number is 15 so once it gets to forty seven point one five then I'll buy it and then it just goes up from there and it's like what why why why did they do that. That's just so stupid. So I say that's that's my biggest thing and that's something I still.
2036 - 2047 Jonathan Mendonsa We Are going to set up a lifeline feature for you on this segment called the walk of shame we're going to allow you to lifeline and Jim Collins and have him just rant at you for a second and then we'll get right back on track. We've got a fix for you buddy.
2047 - 2060 Brandon - Mad Fientist Jim knows Jim knows all about it. I talked to him about it constantly. I'm like I'm such an idiot why am I and why am I doing this again. But this is your you're uncovering all my dirty laundry on it.
2060 - 2062 Jonathan Mendonsa Yeah just ruining your brand one question at a time.
2062 - 2097 Brad Barrett No it's hard though man and I'm with you. You know my my issue is not market timing as much as just having way too much in cash and you know just not even contemplating buying it so at least at least you're one step ahead of me. But yeah I mean to me it's all about setting up that just automating everything like if we and this is you know advice for the audience which is take your brain out of this. You know if if brandon of all people can get screwed up with this you can too. And you almost assuredly will like it it happens to everyone. So what you need to do with investing is take your brain out of it. It's that simple.
2097 - 2133 Brandon - Mad Fientist Yep absolutely. And then actually something Jim Collins was saying to me is like I was talking to me about some of this stuff just like this I just like why am I doing this. And he's like know my daughter's probably a much better investor than you because she has no idea what's going on she doesn't pay attention to any of it. And I'm like you know what she's probably right. Like she probably is much better so yeah I completely agree take your brain out of it as much as possible set up your plan and figure out what you want to do. Like I said on whatever percentages and you rebalance if you want and things like that but the actual execution take your brain out of it as much as possible.
2133 - 2139 Jonathan Mendonsa You're going to get off this conversation and still not go invest in that.
2139 - 2141 Brandon - Mad Fientist For whatever reason.
2141 - 2143 Jonathan Mendonsa I want that ticker to be read.
2143 - 2146 Brandon - Mad Fientist Exactly That's so stupid.
2146 - 2179 Brad Barrett So Brandon is your investing. Is it almost exclusively index funds like I mean do you have anything else that that you invest in I guess you know real estate or anything else that there might be a Lending Club or something interesting like that or is it and I don't mean to say that index funds are not interesting but you know that's. That would be the optimized advice right is buy on a regular basis on index funds like Jack Bogle says Wake up 50 years from now and hope to have a cardiologist next to you when you open up that statement. Is there anything that you're doing that's a little different or something that you do that might not be optimized but you just enjoy.
2179 - 2289 Brandon - Mad Fientist Nope nope. I'm pretty good at that. So I am fully in into. Index funds. Way too much cash. Like I said I'm currently at 10 percent international stock market index fund. I want to get to 15 and everything else is in either the total stock market index fund or the 500 Fund and the only reason I'm in the 500 Fund is because I did some tax loss harvesting I think last year or maybe the year before. And and then the market has just gone up straight from there so I didn't want to sell that to get back into my total stock market index fund because then I would have had to tax it. So that's still in there. So there's a little bit of 500 Fund and then to balance out the overweight in the large caps with the five hundred fund I have a small capped tax tax optimize small cap I forget what the ticker symbol is but it's just a Vanguard index fund as well. So I have a little bit in that and that's in my Roth because you know that has more potential to go up more. Obviously having that in my Roth that's going to be tax free when I bring that up. So. So that's it. And that's no real estate we currently rent to furnish a place. We literally don't own anything pretty much. And so no real estate owned two houses in my life but I am a happy renter again and I will be for the foreseeable future so and no lending club that that freaks me out. I it's just like actually your business business partner Brad Alexie has he has an amazing post on Miles Dividende M.D. talking about his thoughts on lending club which I completely agree with that's the best post I think about lending club or any of that P to P lending. And it's just it's like a junkier junk bond that less liquid and higher fees and all this really bad stuff about it. So see I don't I don't touch that at all.
indexfunds, roth, stocks, tax
2289 - 2414 Brad Barrett Yeah. And we actually chatted about that and on your podcast a little bit. And you know it's funny as I was the one who sheepishly said Yeah I have a little bit of money in lending club it was not a tiny amount 15 or 20 k. And since that conversation actually it has been just tanking. I mean it's it's crazy. So yeah I mean it's unbelievable the defaults and this might be like a canary in the coal mine for the larger economy or something but defaults have gone up a huge amount in just the last year or so to the point where my overall annualized return was like 9 in change or it might have been over 10 when we talked and it's down outstanding like the low six. So I mean it's just plummeting. So yeah I mean as loan repayments are coming and I'm pulling it out of there and not reinvest things so yeah I'm getting out of lending club but I kind of wanted to ask you about how you've seen yourself evolve just psychologically as you've gotten closer to FI and now that you're at FI and not working anymore and I could just put a little kind of sidebar story here since I do know Brandon so well I think literally the very first time I met him was in New Orleans at Fin con and we went to the famous place the cafe du monde. And I think we had these little donuts there called Benet's. And literally in order of these things are like $2 and 45 cents or something like that. And first time I ever met Brandon and just knowing him from on line. Him and his wife Jill are across the table from me and they literally split in order of these things. I'm like Man these things are so delicious you can pop them in like two seconds. Here they are eating one and a half Benyus each. And I guess kind of fast forward to last year at Fin con and you know we were out in San Diego and we went to Stone. brewery for lunch. Four of us or five of us I guess. And you guys each had a nice expensive entree and beer beers and it just struck me that you're changed and not fundamentally as a person but you've kind of relaxed a little bit with with your finances and I'd love to kind of throw it over to you and just say look how have you noticed yourself evolve over the last handful of years.
fincon, podcaster
2414 - 2834 Brandon - Mad Fientist Yeah. No I completely agree. I think I've changed dramatically. But I also think old are old habits die hards. So back in the day and probably around that time we were in New Orleans like I was so hyper focused on reaching financial independence so like nothing else mattered. And it was really bad. There is an article on my site, happiness through subtraction, where I talk about this but I didn't realize it but I was getting depressed like we were and living in Vermont at the time and I was really you know we had this really nice house some five acres and stuff but we were in the middle of nowhere and this is also the time that I was getting my masters and the blog was starting to take off and I was taking up a lot of time and obviously I was still working so I was really busy. And all I wanted to do is save money. So like any time like an opportunity for fun with arise, like sometimes I would do it and then I would just be miserable and then I'd be like well why am I doing this I could be at home like either getting homework done or writing a mad Fientist article or whatever and I'd be saving money. So. So for two years we I really isolated myself which then isolated my wife because she's Scottish. And here she is in a foreign country and we're in the middle of the woods and all her husband wants to do is like read tax documents and things so. So it wasn't a good situation at all. And yeah I definitely went into that deprivation area which was bad. So finally my wife is just like you know what is going gone and this is not we can't live like this anymore like you're miserable I think you're depressed and I didn't realize that at the time and she's like I'm not happy because you know we don't do anything and you're not happy I'm not happy so. So once she said that I'd like sort of snapped me out of it and I was like wow yeah this has actually gotten pretty stupid. So we that's we said alright, let's just sell the house let's get out of here let's go back to being closer to friends and family. And we did so then during this like sort of down time not down time but like depressed time. You know I hit my number and I wasn't any happier, at all. And I was like well shit I've been you know planning for this and putting off happiness until I hit this goal and now I hit it and it's like nothing is different. Looking back on it now is like obvious. Yeah. Of course an extra dollar in my bank account on a screen the number on the screen is not going to instantly make me happy but at the time I was like wow this is awful this is terrible. I guess I'm just not going to be happy or whatever. So anyway so hit the number and then we decided we're going to leave and that's fine and then then my work asked me you know I handed in my notice I'm like hey I'm going to Scotland so this is it for me and I didn't plan on getting another job because you know financially independent. And they asked me to stay on remotely. So I was like you know what. Our house hasn't sold yet. You know this is going to be maybe a complicated move. Moving back overseas I was like you know that would make me less stressed because at the time I was like you know pretty much right at the FI number wasn't like loads over anything there wasn't a lot of buffer and I was like you know yeah this is good. I'll just keep working remotely. You know I don't want to have to wake up early when I have to commute. I want to go to these meetings all the stuff that I hated about work. I was like I won't have to do that. I can just code which I love writing code and that will be great. So I did that and I ended up doing that for two years. So we you know we moved back to Scotland we're a lot happier already just off the bat because you know we're we're actually doing fun things with our friends and family and seeing people and interacting with others. But I also was working when I wasn't expecting too so after about I don't know maybe half a year to a year of doing that. I was like you know what I'm just going to let loose I'm going to not worry about money for the first time in my life because like I said before I've always been frugal and I was always saving money and I'm like you know what I'm not going to worry about it. This is a whole salary I didn't expect to have so I'm just going to go crazy. So we went crazy. We spent three months traveling. I told my work I was like hey I'm going on a three month trip so I can either come back when I'm done, or not. And they said Yeah come back. So that was good. And we went on a three month trip and we were eating out three meals a day. Fair enough. We were in Southeast Asia for most of it so it was quite cheap. But we were still even when we got back to Edinburgh we were like it was a new city to us so we like going out and going having drinks and going out and checking out the local restaurants and all that sort of stuff. So we did all that for a year and it just felt like I was just throwing money away. Just crazy. I tallied it up just like I do every year. And I think between the two of us my wife and I we spent 35,000 dollars which I guess we normally fluctuate somewhere between 30 and 33 maybe even 34 the year before, I'm not even sure. it was so insignificant the dent that it made in our actual overall spending that it was laughable. And I was just like this is insane. So all of the habits obviously I wasn't going out and buying a Mercedes and I wasn't doing any thing that I didn't want. Like any anything that like society says you should do if you just spending crazy money. I was doing everything that I wanted, like it felt like I could have and do anything and everything that I wanted and it's just the fact that over the years I've figured out what that actually is rather than just buying what people tell you you should want or what society says you should want or what the Joneses wants or what any of that. I was just buying everything that I wanted and it didn't move the needle that much because I don't need that much which is a huge realization. And it's that's been the probably, I would say the best thing about financial independence and it wouldn't have happened I don't think if I didn't have that extra year because then I would have never tested that upper limit like I tested the lower limit when we were in Vermont and deprivation and all that. But I think testing the upper limit was just as important because now we dialed back our spending like we actually realized we didn't like to travel as much as we did that year because we like having getting excited about the trips rather than just being constantly going somewhere else every month or something. So. So like now it's not deprivation it's not like I wish I was traveling right now. It's like no. Actually this is a great level and it just happens to cost less than traveling every month like we did last year so it's it was great in that it's completely changed me. So yeah if you see me now and I'm going out to a brewery with friends then I'm not going to worry about any of it because it's like wow this only happens every so often it's not going to move the needle at all. I won't even be able to tell by the end of the year and I'm just going to enjoy it rather than you know freak out and pick the cheapest thing on the menu and try to convince Jill to share with me.
family, familytravel, savings, tax, travel, workfromanywhere
2834 - 2896 Jonathan Mendonsa What I think is so amazing about what you just shared with us is intentionally or unintentionally you confined yourself to this box to hit financial independence and then essentially what he described is trouble moving on or establishing with that post FI picture actually looked like there was a transitional phase. It had some ups and downs for you. And then the message that you're sharing now is really powerful it's kind of almost this idea of exploring your outer limits in this FI world which has unlimited flexibility and freedom and you're just kind of trying to find what the perimeters are where can you not go past. And that's what it sounds like you've been doing for the last year or so and I think you kind of painted a really cool picture for our audience and for some people maybe they can learn from that and kind of prepare themselves for it because we fully anticipate that the tools that you're building you know in our community and your community which is probably very shared. They're looking for ways to get to FI faster. And then once you're at FI what comes next. And I think it's cool because you have just gone through that and what you shared with us is what that transition for you mentally actually looks like.
2896 - 2936 Brandon - Mad Fientist Yeah yeah. Yeah what after FI is the huge question. I'm realizing that more and more now how important that is and that's where a lot of my writing is going to go in the future and I'm currently recording all of my sort of thoughts and feelings and all the things that I've gone through since I quit and I'm gonna tally that all up into like you know my first year of Freedom post or something like that where I describe everything. It has been a rollercoaster and there's lots of things that I didn't think about before I took the plunge that maybe I wish I would have. But yeah the question of what's after fires is a huge one.
2936 - 2944 Brad Barrett So Brandon what's the most surprisingly positive part of the post-FI life. That you just wouldn't have anticipated.
2944 - 3023 Brandon - Mad Fientist Oh man yeah it's at first the. The really cool thing so I don't we travel a lot so every single free vacation day was like U-Stop two years in advance because I was planning where we were going to go and things like that. So like every day off had sort of like a trip or something. But every so often maybe around Christmas you'd have like maybe two days off where you weren't traveling. So it was like you know I could do anything these are free days these are days off we're not going anywhere. Anything is possible. So that feeling is like all the time which is really really cool. So we kicked off the post-work life for me by going on a three month trip around the world and I think mentally the whole time I just felt like I was a long vacation or one of these sabbaticals that we had taken before and I think somewhere deep down always expected well you know how to go back to work when we get back. When we got back from that trip and it was the first Monday after getting back in I just woke up and I was like wow this is this is just life. Now there's no plans there's no family commitments or anything. And you have this day off and it's just like unlimited possibilities so that that's just been a fantastic feeling and I think about it often.
family, travel
3023 - 3033 Jonathan Mendonsa Yeah I can see that. I have to imagine that at some point there's this fear that this isn't real. I'm going to have to go back to work. I bet it takes a lot of work to do that and realized no actually did it.
3033 - 3081 Brandon - Mad Fientist Yeah I definitely. It was yeah especially after that big long trip it was you know it just felt like a vacation and we had we had done a few of those sabbaticals before like when I mentioned we lived in China for three months. Like I took three months off to go live in China and we did we did it when we moved back from Scotland to America. We took some months off and so I was used to that feeling of having a few months of freedom. And yeah I was totally When I got back I just felt like I was just going to have to get back to work. And even though that was you know three months after I quit it still felt like yeah right. I'm back to work. But that first Monday when I didn't have to go back and I just had all of these things that I had wanted to get done and I could just start making progress on them. It was just a just a fantastic feeling.
3081 - 3109 Jonathan Mendonsa I think what's been really amazing about this podcast that we just did today basically all the podcast that you've done that have been very well received by everybody that's interested in the fire community. But they've all been focused on other people and I don't feel like you've ever gone to this level of depth about the human element to your own personal story which is so interesting so I appreciate you being willing to explore your story with us both your wins and then also maybe where you strayed away from the path a little bit.
3109 - 3116 Brandon - Mad Fientist Yeah no it's been a pleasure. You guys asked some good questions and it's been a lot of fun so I appreciate you having me on.
3116 - 3137 Brad Barrett Yes so and before we get into the hot seat questions I just wanted to ask one. One last thing that you know we talked about your past but what does the future look like for you. You talk about these projects that you're working on. Is it mostly mad Fientists. Do you have other things that you want to or could possibly share with us today. What does your life look like five years from now. I mean have you have you thought about that as intentionally as that.
3137 - 3244 Brandon - Mad Fientist Yeah. You know it's it's something I think about a lot. When you have the freedom to do anything you have to you start thinking about what what do you want to do with your life. It's it's there's some really deep questions that you know most people don't have to face until they're you know maybe in their 60s or 70s because most people are just on the standard script. They're on the treadmill they're working they're getting married they're having kids they're you know doing all of that. And then when you don't do all of that then you're sort of like well what's the point to me and what what is this all about and what I want to accomplish. So yeah I think about that a lot. And it's it's actually been really good. I've I've been very productive and this is this is something I still you know it's an internal struggle because I have the freedom to not work as hard. And yet I find that I want to work as hard so part of me just worries that I'm working very hard. Because that's just what I'm used to doing. And maybe I should chill out. But then another part of me just knows that I get a lot of happiness from creating things and creating mad Fientist stuff and creating things in other fields and other hobbies that I have and so yeah that's something I'm still debating internally and that's I mentioned the Chatauqua in Ecuador and I gave a talk about you know how we have this opportunity as early retirees to do anything and do anything really well we have. We could if we wanted to be a PGA Tour golfer we could literally practice all day every day not literally know I don't usually misuse the word literally like I did I think I did it twice this time and I don't usually do that.
3244 - 3247 Jonathan Mendonsa I was happy with your use of it. Go for it man.
3247 - 3453 Brandon - Mad Fientist Figuratively if we could practice all day every day and and get really good and potentially be you know a PGA Tour golfer if we wanted to because we don't have to work for a living. We could devote all of our time to our passions and our hobbies. So my talk was sort of focusing on like how to actually master things and how to become the best at these things and in the talk I had mentioned I was like you know I want I have the ability to not work so hard but I have this drive that I want to work as hard as Elon Musk and do like some incredible things. And then Mr. Money Mustache had his talk and he was talking about all these other things about like how all these other things contribute to happiness. And I asked him a question I was like you know you know obviously you saw my talk and I'm really wanting to work hard at all these things that I'm passionate about and I want to make a lot of progress on these goals that I have. And I think being Elon Musk you know he did he doesn't have a very balanced happy life. And how do you how do you like reconcile that and how do I you know not just waste my freedom that I've given myself and just be constantly working and he's. And he's like you know you have to focus on these other things like community and health and family and all of these other things that contribute to happiness. And he's like you know you can be Elon Musk if you want but just do it for a few hours a day and still focus on all those other things. And that was like a eye opening thing for me I was like hey you know what. Like I can dedicate all this effort and timing. But I just don't have to do it all the time. I can I can be Elon Musk for two hours a day which is a tentative blog post that I'm hopefully going to write one day when I get around to it. But yeah. So that was a big eye opening thing for me and that's something I'm trying to focus on is like yes I can devote you know focused effort to these projects that I really want to accomplish and complete. But then I can relax and just like cook dinner with my wife and just like watch a show on Netflix or something and read for a couple of hours before I fall asleep and things like that so. So yes my life has very big defined goals. Mad Fientist related Yes I want to really curate my content a lot more since I've been writing for whatever five years now. It's you know not structured like I would have structured it if it was a book. So I want to like find ways to let people read my content easier or if they're just stumbling upon myself for the first time I also want to write a lot more software I love. I love writing custom software because I love writing code so a lot more mad Fientist software either a travel related or financial related stuff and then yeah just a lot of actual passion creative projects that I want to try to tackle that are very intimidating because you know I I think I've put them off so long in my life because I'm worried that I'm not going to be good at creating something like that. Like more creative space like music and things like that. And I put it off because there's always something else you can focus on you know earning money or hitting financial dependence. But now it's like well you know it's time to put up or shut up so I'm spending a lot of time and more creative fields as well. So.
family, health, hobbies, travel
3453 - 3456 Jonathan Mendonsa All right. Well have you heard our hotseat segment yet.
3456 - 3457 Brandon - Mad Fientist I haven't. No.
3457 - 3468 Jonathan Mendonsa Oh gosh you're in for a real treat. I am so excited for you. Alright hold your breath try not to laugh.
3468 - 3495 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.
3495 - 3498 Brandon - Mad Fientist That is amazing. I'm so glad I didn't know that was coming.
3498 - 3502 Jonathan Mendonsa Probably the most bad ass intro of all time.
3502 - 3502 Brandon - Mad Fientist Really good.
3502 - 3506 Jonathan Mendonsa And it was for a personal finance podcast.
3506 - 3516 Brandon - Mad Fientist That is fantastic. Yeah. I was always proud of my intro music for the just absolutely ridiculous dorkiness of it for my podcast but that is.
3516 - 3523 Jonathan Mendonsa We need to win some sort of campy award. I mean I want a trophy somewhere. We're excited to get a chance to introduce you to this and get you to answer some of these questions.
3523 - 3526 Brandon - Mad Fientist Nice I'm pumped too. Let's do it.
3526 - 3530 Brad Barrett All right. Number one your favorite blog that's not your own.
3530 - 3608 Brandon - Mad Fientist Oh man. Well I have to give you a few. So get rich slowly. Was the first blog I ever read. Like I said so was amazing. I love JD's work so his money boss site is great his his writing is just fantastic so he's always had a long term favorite. And then get rich slowly is what introduced me to early retirement extreme an early retirement extreme changed my life. Obviously that just set this whole crazy path in motion. So those are two two long term favorites but I really don't read as much anymore. Like I said like I mentioned just previously like I'm really trying to focus on creating stuff. So the more I consume the less I create. But there's still a few that I still read and any time Mr. Money Mustache puts out a new post. I know he's got something interesting to say so I'm always excited about that. Wait but why is a great great one just loads of varied stuff there and then I don't know if you guys are familiar with this one money lab dot co. I used to read a lot of like business and small business and entrepreneurship blogs. But then I just pretty much gave them all up just because I don't care about all those money making opportunities anymore. But money lab. It's not do you know how to pronounce the name.
3608 - 3610 Brad Barrett Frank Jeevan E.S.. Is that right.
3610 - 3630 Brandon - Mad Fientist Yes. I think that he does all these really cool experiments and he documents them all. And it's just like so much good information and you just follow along as he's doing it. And it's just it's fantastic like I'm addicted to it so that those are the three that I currently consume any time something new comes out so that's great.
3630 - 3634 Jonathan Mendonsa Now we had someone else mentioned wait but why which I hadn't heard of before.
3634 - 3646 Brad Barrett Yeah. Carl from fifteen hundred days was on and he mentioned that and I recollect Paula from afford anything she mentioned that on her podcast as well. So that's very interesting commonality.
3646 - 3657 Brandon - Mad Fientist Yeah he puts a lot of research into his stuff. He's got a really good sense of humor and he just dives really deep into a lot of interesting topics. I love it. He's he's the man Tim Urban.
3657 - 3660 Jonathan Mendonsa Let's see. Question number two your favorite article of all time.
3660 - 3689 Brandon - Mad Fientist All right. This is going to have to be a post on get rich slowly. That was a book review of early retirement extreme because like I said Get Rich Slowly pointed me to early retirement extreme and I did a Google search because I was like when did I find out about this whole crazy world. And it was back in May of 2011 and it must have been JD's book review of early retirement extreme and that just did everything. And that just changed the trajectory of my life. So that's going to be the one.
3689 - 3726 Brad Barrett Yeah that's really that's very cool and it's funny because one of JD's articles changed the trajectory of my entire life as well as he got me into travel hacking. He wrote an article about five or so years ago about the British Airways Visa card and it was when there was a 100 K bonus. I'm sure you probably remember that. And that was the very first card I signed up for. And what's funny is when we were down at Camp mustache in Florida. JD Was there and I gave a speech on travel hacking there and got to kind of actually teach him how to use the British airways Scott miles how amazingly full circle is that right.
3726 - 3728 Brandon - Mad Fientist And like that was incredible.
3728 - 3735 Jonathan Mendonsa Yeah he created a post taught millions of people how to use them and then they were still sitting there counting.
3735 - 3741 Brandon - Mad Fientist But yeah I read just read a recent Moneyboss article and he mentioned that he's like yeah he's like I signed up for this.
3741 - 3751 Jonathan Mendonsa He started he started typing that as he's listening to Brando sitting next and he started typing that as he's listening to Brad teach you how to use the points. Yeah true story.
3751 - 3771 Brandon - Mad Fientist So weird yeah it's so weird like I've met JD a few times and we've hung out and it is still it's still surreal to me at the time we're hanging out. I'm like you know this guy has really changed the course of my life in so many ways and here I am hanging out with him and then he was even wearing a Mad Fientist -shirt and I was like This is insane.
3771 - 3779 Jonathan Mendonsa He wore it everyday of camp man. You know I met him for the first time and this past January and he is just a genuinely awesome person.
3779 - 3789 Brandon - Mad Fientist Oh Yeah. Fantastic. He's such a cool dude. So yeah it's it's it's it's a pleasure to know him now but yeah it's just amazing how how much he's changed lots of people's lives I think.
3789 - 3801 Brad Barrett Yeah. I'm sitting here wearing my mad fientist shirt and actually Brnadon. You'll be happy. Yes. We're Going to get to choose FI shirt. We're going to pick a nice nice material. I know you don't care about that.
3801 - 3803 Brandon - Mad Fientist The t-shirt quality has to be high.
3803 - 3814 Jonathan Mendonsa Well we've we've we've been asking people different life hacks and what we've basically found the key to clothing. If you're in the fire community is to be guests on different people's podcasts so we're just going to keep that going.
3814 - 3815 Brandon - Mad Fientist Nice nice.
3815 - 3817 Brad Barrett All right buddy favorite life hack.
3817 - 3861 Brandon - Mad Fientist So favorite life hack travel hacking. Obviously I'm a big fan just like Brad but I think it's going to go back to figuring out what makes you happy. Because like I said before being able to feel like you can spend every on everything and anything you want is just a hugely empowering thing. But obviously you don't want to go broke. So really figuring out what makes you happy in it and it changes it really like something that made us happy three years ago doesn't make us happy today and you don't you always have to be you know constantly assessing it. But you know having your finger on that pulse is hugely important to not only being able to hit financial dependence but being able to be happy. You know once you do so.
3861 - 3865 Jonathan Mendonsa Very cool uh number four your biggest financial mistake.
3865 - 4072 Brandon - Mad Fientist So this isn't this is something we didn't even talk about. But it is definitely my biggest one. So we immediately out of college I moved to Scotland to be with my girlfriend now wife. And you know we thought we were adults so we're like well the first thing we have to do is buy a house so we got a 95 percent mortgage and then borrow the rest of the money from Jill's parents. So to buy a car so that we could get to work. And as you know covered the other 5 percent of the mortgage for the house. So. So anyway so we had this house and we did it up over two and a half years and we did really well with it we made over 50 percent in two and a half years and sold it right before the whole world collapsed in 2007. So at that time the exchange rate was really good from us to UK. So we we got like 2.0 97 for all of our pounds and we transferred. We were going to do half and half half transfer to the states and then have just invested in the UK. But luckily the exchange rate was so good so we did more than half the states and then the other half I wanted to invest and I was like all right I'm a big shot now I want to invest in stocks this is finally I can have my portfolio that I always wanted and so I was like I don't know what the hell I'm doing now. So I say I think I just search the internet for financial adviser called some dude randomly. He came over to the house and was giving it all. Oh yeah we'll go out golfing and you know make me feel like a big shot. And then he put me into some mutual funds. He pretty much just picked the five that had performed the best over the last year and he's like look at these things are amazing. Look at all the money they're earning. I was like OK that sounds good. And then he put it in you know 20 percent in each and. And that was it. And then he disappeared or at off into the sunset. And then 2008 happened and you know he got cut in half. Less than half. Pretty much within you know a few months of us investing it. And it had a bunch of crazy early redemption fees and maintenance fees and we're just getting crushed not from the market but we were getting crushed from the market but we were getting crushed from the company that was you know that putting these fees these funds on and we were stuck because if we took it out within the first five years we would have got hit with huge fees. So anyway long story short I should have never. That was when I learned to never trust anyone else with your money. So from then on I took it upon myself to do all the research myself and figure out what to invest because by the end of it like by year four I just had enough it was stressing me out and I was like screw it you know the early withdrawal penalty is less. Now it was only 2 percent whereas it was 4 percent the year before and 6 percent the year before that and 8 percent. And I was like I'm just going to eat the 2 percent. I just won it and then I couldn't I couldn't I couldn't find that financial adviser. I struggled to find the company that actually had our money. So I never found the financial advisor. He was gone. I couldn't find him anywhere. Luckily I had the documentation that led me to find the company where the money was and after you know lots of stress I finally got that money back and I was like never again am I doing that so sorry. That was a long winded story but that was definitely my biggest financial mistake and it was a huge lesson for me.
college, stocks
4072 - 4078 Jonathan Mendonsa Yeah well it sounds pretty painful. Question number five the advice you would give your younger self.
4078 - 4215 Brandon - Mad Fientist Just start. I'm a very analytical dude and I was even more analytical I guess. Back in the day and I would over analyze any sort of thing that I wanted to do until I talked myself out of it. So I had loads of ideas that I wanted to do creative stuff you know Web sites all this sort of stuff. And I would always just think like well I need an LLC So now I need to set up an LLC before I can even start you know a Web site or anything. And then that would be complicated. And then you know that would just take all of my motivation away and then I would never do anything so. So it all came to a head when I turned 30. We went up and went skiing with friends and had a great day skiing and then we having drinks at the bar and then we went back to the chalet we were all sharing and then I had this like 30 year mid quarter life crisis and just had a meltdown in front of all my friends and I was like What have I done with my life I've done nothing and it was awful and my friends still you know make fun of me about it today. And my what like my wife was mad she's like What are you mean you haven't done anything like can you get past it. And I was like it was awful. But it was what I needed so the next minute I just started mad Fientist it like I said I would have over analyzed that to death until I was you know sick of the idea. But I was like forget I'm just starting. So I started. And then I just started writing and I didn't know what I was doing and I deleted posts later because they were terrible and I just got better over time than anything. Yeah just start. And so yeah that is definitely the advice I would give because you figure it out as you go and you don't like I would have never imagined any of this stuff would have got to the point it is now and I never would have if I would just try to think of like what kind of blogger am I going to be or what kind of site do I want for anything. I would've never done anything because I wouldn't have came up with any unique ideas. But the unique ideas came as I just was trying to do it. And I think that's the thing with most most things you just start doing it and then you just iterate and improve and then you find better ideas as you go along and those ideas will never come if you just just hadn't started so.
4215 - 4224 Jonathan Mendonsa OK well we have a bonus question for your favorite thing that you purchased on Amazon last year. And if not Amazon your favorite thing purchased online.
4224 - 4290 Brandon - Mad Fientist Man I don't know if I'd purchased any. Oh I know I did. I did. I did. I got a brand new MacBook Pro. So when I quit my job I had a really nice MacBook Pro and you know I never go back to a PC. I was always against Macs but now I understand why they're just fantastic machines so I had a really nice Macbook Pro and then I got to keep it for a while. And then like a few months later they're like oh hey by the way do you want to send back your computer since it's not yours. And I was like oh no. But then I knew the new version was coming out so I ordered I treated it. You know it was a business expense. I'm just like exactly what I want and I got just got I got the baseline model like literally a 13 inch MacBook Pro without the touch bar thing because I don't need that with no extra memory or anything like that. So it was the baseline MacBook Pro but it's still expensive and it's fantastic. I'm just staring at it now it's so beautiful.
4290 - 4299 Jonathan Mendonsa So for like half a second I thought you're going to say no I didn't purchase anything on Amazon. I was ilke He is the real deal.
4299 - 4317 Brandon - Mad Fientist I really struggle to think of it. I think that was one of the few things that I actually did purchase on Amazon so it's yes. And it's totally worth it I love it every time I and I spend so much time on it so it's yeah it's absolutely worth buying something well-made when you use it constantly so.
4317 - 4395 Jonathan Mendonsa Well this is a real treat getting a chance to sit down with Brandon from the mad Fientists and actually take some time to explore his personal story. So much of what he does is focused on the resources and the tools that are available to the early retiree and many of us the fighting unity recognize the value that he's bringing to the table. But I don't think that we've spent enough time actually exploring his personal story the human element and how the things that he's really good at and the things that he struggles with has led him to the place where he is now. And I think that taking some time to actually explore that and learn from it is useful in and of itself. So I hope that you enjoy this kind of behind the scenes look at what drives the Mad Fientist this origin story if you will. And if you want to connect with him at Philotis definitely go to his Web site mad fientist dot com MADFIENTIST. And also follow him on Twitter at MadFientist. And for those of you that were new to the mad Fientist or were introduced to the Roth conversion ladder for the first time today if you're very interested in that topic and you want to know exactly how it works and have someone break it down for you. We're going to do that on the episode that's going out this Friday which will be episode 17 R our Friday roundup. And if you want to go to that episode you can go to choose F-I dot com slash 0 1 7 R and we'll see you next time. As we continue to go down the road less traveled.
Jonathan_Catchphrases, rothladder

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