018R - Capital Gains Harvesting Never pay taxes again

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1 - 24 Jonathan Mendonsa All right guys you've officially made it to Friday. Spring is here. You've run out of excuses not to exercise but I'm sure you'll still think of something. But in the meantime let's go ahead and walk through today's podcast. We're going to be taking a hard look at capital gains losses and how you can implement it as you supercharge your path. to FI welcome to the show. Hey Brad how are you doing today buddy.
24 - 58 Brad Barrett Hey Jonathan I'm doing great. Doing Great. We got a beautiful day here in Richmond. Just spent the weekend actually up in Washington D.C. with my family which is cool. We got to use our travel rewards points to stay in this really really nice Hyatt Hotel it was the Hyatt Place National Mall and it was only like twelve thousand points a night for like a 300 plus dollar hotel room. So that was you know three cents per point which we always talk about and trying to maximize that. So yeah it was. It was fun. Really great trip and yeah just back to real life now.
familytravel, travelrewards
58 - 109 Jonathan Mendonsa Yeah I wonder in our audience I know we've got some high level travel rewards people in our audience but we also got a lot of newbies but as as you guys start to really try some of these Send us your stories of what you've pulled out do the math on on your redemption and what sort of return you got. You know we really like hearing these stories and also sharing them with other people. I think it's just it's just a lot of fun. Brad I treat this travel rewards thing as a game and it is fun because you get to move stuff that you are paying with post tax dollars and probably was adding stress to your life and you get to move it to this essentially tax free you know game that we can all play and then just share it with each other and learn from it. So I know that Jeremy from the episode earlier this week probably had the best redemption that either of us has ever heard of. But Brad you just did it three points and I mean that was pretty solid too.
tax, travelrewards
109 - 112 Brad Barrett I mean it's cute. It's cute.
112 - 113 Jonathan Mendonsa Nice try. Nice try.
113 - 135 Brad Barrett Twenty cents per point. But that said we were very happy with that because you know the two nights they would cost us well over $700 and we got it for 24000 chase ultimate rewards awards points so yeah I was very very very pleased with that redemption. Certainly. But I guess that kind of pales in comparison to his amazing business class redemption. But we all do what We can right.
135 - 141 Jonathan Mendonsa And well have you ever done a business. Did you ever have you ever redeemed yourself for a business class.
141 - 145 Brad Barrett You know I haven't. Which is kind of embarrassing basically. You know on this.
145 - 151 Jonathan Mendonsa Oh no I'm with you I'm super stingy with my points and I want to extract every little drop from. But it didn't hold him back did it.
151 - 177 Brad Barrett No it sure did not. Yeah. I'm with you. It's with me. We have a family of four and we're trying to travel one or two family vacations for free or close to free every year with points and in order to do that we need to maximize those points as best we can and just doesn't make sense for us to do the business or first class redemption. So I don't certainly don't begrudge anyone who makes that choice because man it would be awesome. But yeah we just we just haven't as of yet.
family, familytravel
177 - 211 Jonathan Mendonsa And I'm thinking if I want to do. I want to start thinking because my child going to be born here guys it's probably coming within the next week so this is this is a reality for me but I'm thinking I'm already thinking about that first trip to Disney World so I think Brad we should really sit down and go through how to do the Disney World trip and take either a full Monday if you think it's a full Monday episode or maybe we can do it on a on a Friday round up but just go through exactly what cards to open what the order looks like how long it takes you to put it together. And then how you were able to organize that for not just you and your wife but you did it for your in-laws and your parents right.
211 - 231 Brad Barrett Yeah yeah. All eight of us went and it was a really great trip. And just one of those things memory maker you know not to be sappy but yeah I mean it's just really cool. We all saved a whole boatload of money and got to do this trip together when in all likelihood it might not have happened or it certainly wouldn't have happened in that capacity. So yeah I mean I was really really cool.
231 - 266 Jonathan Mendonsa And we'll set that up maybe. Guys just keep it on your radar Brad and I like think these ideas out and we try to create a short list of what's coming up. We'll try to go through that with the all within the next two months so just keep posting for that. But I'll make sure that we follow up and do this for yall. Because I think it is so valuable I think almost everyone that's listening to this and really I don't care if you're in the United States or whether or not you're listening to us from Ireland I mean you're probably at some point that thought process was you may go to Disney World. I mean it's just it is a it is a global phenomenon so and it's a very expensive one. But if we can show you how to get there for free it might be something that more of you all can take advantage of. And how cool would that be.
266 - 308 Brad Barrett Yeah I did want to mention because Jonathan alluded to it his wife's due date is literally in eight days from when this publishes So we're going to try our best to keep up our publishing schedule here of twice a week but it just might not be realistic. So bear with us if the Friday round ups don't come out for a couple of weeks. You know Jonathan spending time with his wife and his new son so obviously please cut him some slack here. He's working like crazy on this podcast and the site. And you know obviously the last thing I certainly want him thinking about is this podcast while he's spending time with us with his newborn. So yeah you know again congrats in advance and just I did want to mention to the audience.
308 - 498 Jonathan Mendonsa Yeah life changing events are in my very near future. But yeah I appreciate that. OK. So let's get right into it. We want to do what we always do and really go through the episode that we had this past Monday with Go-Curry Cracker and just go through some of the concepts that he really laid out for us. And I think the story that we told on Monday that Jeremy laid out for us. For me it finally sank in. Now that I read I do a lot of reading and I have read his articles. But capital gains and losses were something that always felt slightly out of reach for me. I really couldn't take hold of it and figure out how to use it in my own life but I figured it out. This past week with that episode that did it for me and now I have a plan for how I'm going to use that. I mean that's a tool that honestly a lot of you that are in the FI community and are actually probably fairly advanced in the community have probably avoided. Frankly I think it's one of those that feels a little bit too complex so you probably more or less just stick with the 401k maybe funding the Roth. I mean you just do some of the same or the very simple techniques that are easier to grab. The Roth conversion ladder that we just talked about capital gains and tax harvesting our advanced stuff. But they're doable and I don't think they have to be as complex as as you think. And so this last Monday we really went through it and I think we told you how it would work. And then today we're going to try to do is maybe go in even more detail. But Brian I wanted to real quickly let you all know that there is a tool that almost everybody in the fi community especially the ones that blog about it use and Brad and I have used it for literally the last five years and that is personal capital and personal capital is a wealth an expense tracker. You can sync it up with your Vanguard Fidelity Schwab your 401k accounts even if they're with your employer usually there's a way to connect that and you can have all of your different accounts in one place. And this is incredibly valuable for you as you create this framework as you're tracking your finances as you're tracking the growth of your of your passive income in your investments and you're coming up with a plan on how you're going to get it out. You need to be able to track it. Now we're not talking about day trading we're not talking about seen it. So you know when to sell when to buy. We highly recommend that you automate those and you ignore that. All that noise and we'll talk more about that with the Jim Collins episode that's coming out but it is important to track your net worth to track your investment income. And we highly recommend personal capital for that. We've set up a link for you all if you had not. Somehow you've not heard of that and you want to get access that go to choose a dot com slash PC that's appears and Paul C as in cat and it will take you directly to our link so that you can download that and start using that today. Take 15 minutes set it up with all your accounts. You can put it on your iPad your phone whatever you want your computer and you can have access to all your accounts in one place and it's incredibly useful. So just keep that in mind if you want to use it go to choose FI dot com slash PC and the best part is it is 100 percent free. We use it. We recommend it. End of story. Go check it out. Choose if I dot com slash PC.
401k, gainharvesting, networth, passiveincome, roth, rothladder
498 - 597 Brad Barrett All right Jonathan So let's let's talk about the episode that we released on Monday with Jeremy from go curry cracker. All right so I have a ton of takeaways. I always when I listen to our episodes I probably listen to them three to five times every single week. I just take notes. I've got a ton of little things here you know aside from the tax gain harvesting and the tax loss harvesting which which is crucial I always like to look at the little things the little decisions and some unconventional choices which I know I mentioned a few times in the episode but just something really simple like how Jeremy and Winnie go to the farmer's market at the end of the day and are able to haggle and save a couple of extra bucks and get a whole bunch more produce and food. Again it's a tiny little thing and those couple bucks or even 10 $20 that they saved every time they win is not really going to move the needle all that much in the grand scheme of things. But it's just such a perfect illustration of how we live our lives just slightly differently. And another one was when I talked about how we took our trip to Disney World when my daughter Molly was just going to turn three because if we went 10 days later it would have cost us an extra 400 bucks. And they went on their business class trip when his son was under 2 and could still be a lap child. And it's just it's taking just a little closer look at life and just knowing what the rules are maximizing them and just thinking a little bit differently than the next guy. We're not doing anything crazy taking a 3 year old to Disney World. It's not revolutionary in and of itself but just looking at that rule a little bit more closely. Again just saved us 400 bucks. That's a neat little hack just for being a little bit different.
gainharvesting, lossharvesting
597 - 678 Jonathan Mendonsa Yeah. And I think really the way that Jeremy lives his his life the life that he's chosen that he's created. Yeah he can do anything he wants at this point. I mean him and Justin from a root of good you know they are kind of these billionaires of yesteryear where they're not, time is theirs. it's a tool that they can use they can do whatever they want with it. They control it and they get to make choices. And what's interesting about the people in our community is once they make it to FI the choices they actually make when they have unlimited time and essentially at this point unlimited money they're not blowing through it. It's not like they come to the end of this game. And then now they are it's total. There are total hypocrites with everything they did to get there. They're still essentially living the same life except they're placing all of their time into those things that we talk about, their family, their children, their interests and their passions. And so Jeremy's favorite thing to do is is just to go spend time with Winnie and go down to these farmer's markets and look for deals on bread and vegetables does he mean like you said does he really need to save 30 cents. No. But that is that is something that's that's a process that's him spending more time with his spouse. That's relationship building tool and that's something that an activity that they get to do together which is totally which is totally consistent with the life they lived to get there. And I think that's just beautiful.
families, relationships
678 - 812 Brad Barrett Yeah. No I totally agree. And you know this life that he's built I think you know I want to just talk about some quick hit things that really stuck out to me. You know when his mom basic when he left his job and his mom asked him you know basically Son do you have an emergency fund and he he said he had a 60 year emergency fund. You know how freakin amazing is that. I mean I can't even imagine the look on her face. And they already started a Roth IRA for their son. And just again knowing the rules even though he's two years old they open up a Roth IRA for him because he had earned income and that earned earned income of course was through you know modeling for for the blog and Winnie's book but I mean how cool is that right. They paid him. They had contracts you know legitimate stuff paid him a couple of hundred bucks and dumped it all into a Roth IRA like that. It's just it's again it's it's thinking differently it's these little things that are going to set you up for success down the road. And you know just quick hit going down my list here is he talked about that moment when he walked out of his job right which was just so powerful to me. Which was you know it's it's what Jim Collins talks about with his F-you money concept which is you have been saving and taking the power back in your life. And he walked in there and I guess he had some kind of personality conflict or some kind of issue and instead of saying oh yes I'm going to do X Y and Z to fix this. He just said all right I think it's time to pack it up. I'm out of here. Right. I mean how powerful is that. And obviously that doesn't mean that compromise isn't good in life. We're not talking about that kind of stuff. It's just in this exact instance what he was getting from his job. It just wasn't worth making these changes. And he was already on his Fi number and that was that. That's just really really cool to me. And again also about his job like he was talking about the confidence level that he had to work with you know before predating that would just dramatically increased because of this power that he had in life that he wasn't beholden every second of every day to this job. And fearful that some elusive they were going to fire him. Right. Because he did something wrong or didn't file the TPS report correctly or some garbage like that right.
emergencyfunds, ira, myfinumber, roth, savings
812 - 813 Jonathan Mendonsa I see what You just did there
813 - 840 Brad Barrett Yeah right. And wasn't that the exact perfect. You know you and I were sitting there when he was talking about it and I wrote down on the computer office space question mark question mark. It reminded me of that meeting when when you know in the in the movie Office Space and it just reminded me of that scene when Peter was sitting there in the meeting with the Bobs and he was just you know so disconnected from work and you know their thought was wow this guy is a go getter we should promote him you know how.
840 - 841 Jonathan Mendonsa That's Exactly right.
841 - 851 Brad Barrett Right how perfect was that. It was an amazing and like and Jeremy lived that in real life like I mean that was just such a cool thing. So yeah it definitely got a kick out of that.
851 - 862 Jonathan Mendonsa All the office space quotes are coming back to me including the boss. Yeah I'm going to need you to go ahead and come in on Sunday too that'd be great.
862 - 865 Brad Barrett Yeah that's a good movie Man I haven't seen that in a long time.
865 - 927 Jonathan Mendonsa It's going to go back on the short que now I'd forgotten about it. I'm Definitely going to go check that one out. But no it is it is powerful and I am an employer and an employee as many people will be during their working career and what a strange feeling that would be to have an employee that doesn't need you doesn't need your income. Just that would be such a strange dynamic. It would totally shift the power structure. And then on the flipside of that for me how powerful would that be for me as an employee to be evaluating my job both ways both do I enjoy doing this am I doing this because I love doing this do I need this in order to feed my family is my boss being supportive of me. Do I have a job that appreciates what I'm bringing to the table. That entire dynamic changes when you have F-you money or when you're at FI. And I mean almost everybody listening to this that has a job should be able to visualize what the two sides of that coin would look like and how quickly that dynamic would shift if they no longer needed the income.
Jonathan_Catchphrases, career, families
927 - 1044 Brad Barrett Yeah and you know I'm going to tell a story actually that I've never told anyone other than my wife literally and something similar happened to me when I left my job to work full time on my websites and it sounds so petty honestly. Years later we're not petty but just miniscule. But it was just like the straw that broke the camel's back and I had been thinking about leaving my job for a while. You know I had these Web sites that were growing and in all honesty making some money but not a huge amount and certainly not enough to replace my income by any means. But I had this feeling that they could be something if I spent the time on it and I just didn't have the guts honestly to make that move and I wasn't at FI like Jeremy was so you know it wasn't as clear cut of a decision for me but it was one of these just ridiculous like office dynamic moves that the boss in his. And I hate that phrase but the boss in his infinite wisdom decided to just unilaterally change the work hours. It was all of a sudden we had to come in at 8 o'clock instead of 8:30 and it just ticked me off to no end. It was like that absolute garbage face time. Nonsense that is everything I hate about corporate America that it's not the value of your work. It's not how efficient you work it's just literally the number of hours that your chained to that desk. And it was just such like a ridiculous power play and that like you can hear it in my voice. It pisses me off to this day. And honestly that was it. Within I think a couple of days I basically said to Laura I can't do this anymore. I'm out and walked in put in my notice and got the heck out of there. And that was a combination of A. having a you know growing business that I could really sink my heart and soul into and and being well down the path to FI albeit not at FI. But the conjunction of those two things just gave me that power to say you know what every other sucker has to deal with this. I don't and yeah it.
1044 - 1052 Jonathan Mendonsa That Is so powerful. You had to do it and then freak out about your decision at all those optics are such contrasts there.
1052 - 1066 Brad Barrett Yeah. Yeah it was it was a very interesting time. And you know honestly looking back on it I'm not sure how I had the guts to leave a very safe job but man it was the best thing that I ever did in my entire life. All Yeah.
1066 - 1113 Jonathan Mendonsa Well this is not the quit your job show necessarily but certainly this is the show where we try to move the power to your side of the equation so you make the choice because you hold the cards. That's what we're trying to do we're trying to move the power to your side of the equation and then you can make that choice. Now there are some people that are going to work for 40 years and there is nothing wrong with that. There's absolutely nothing wrong with that. And there are other people that are going to work for ten and be done and there's nothing wrong with that. But wouldn't it be cool if everybody listened to this got to choose based on what they loved. Which one they wanted to do. And how many people are forced to do the 60 year career and they work from the day they graduate high school or college or get out of their parents house all the way up until they got enough and often they're in the assisted living facility because they just can't do it anymore.
career, college
1113 - 1253 Brad Barrett Yeah and that's what it's all about is choosing Fi and choosing what you want to do in life. You know like Jonathan said we are not here to say quit your job leave corporate America start your own business. Be an entrepreneur. I mean that's fine for some people but honestly it's extraordinarily difficult and very very stressful. So by no means is that like the panacea for everything that ails you in life. So not arguing that in and of itself but we're arguing taking the power back and the simplest way to do that is to control your finances and control your financial future. So I think enough said on that topic. But that's a crucial point for you guys to remember out there. All right so the last thing that I wanted to mention about the episode which I think is just really crucial and I know we've mentioned it a few times this is about investing philosophy. When we asked him what his favorite blog it was JL Collins and the reason wasn't because he loved the stock series and that was the most essential thing he had ever read though he did indicate that it was important. But what he liked most about what Jim had to say was Jim's philosophy on investing and how Jeremy said he doesn't even look at the stock market. And this is a guy who has a good bit of money invested obviously. And the way that he chooses to invest is to put it into those two Vanguard index funds and just let it roll because nothing good happens when you look at the stock market. Honestly like only as we've talked about with Brandon from the mad Fientist as I've repeated a few times like when you let your brain get involved in investing it is almost invariably going to screw it up. You need to just have belief in the math and have belief in what we've talked about and what these experts who we've had on have have conveyed that the best way to amass wealth over the long term is to invest in these low cost mutual funds. And sure your money there are going to be market corrections. They're even going to be market crashes in the next 40 50 years. That's a guarantee. If you can't deal with that psychologically you're going to have a very difficult time investing and growing wealth in the long term because you need to stay the course. You cannot time the market. You just can't. If you do you're going to screw it up I guarantee you that. So that was my last you know quick hit from the episode. The investing philosophy is just so crucial.
hotseat-blog, indexfunds, stocks
1253 - 1350 Jonathan Mendonsa You know it's good. My last takeaway was just for him that financial freedom clock started once he got to broke and you're in one of two different places one at maybe one to three different places. You know you are either just discovering this for the first time and you are buried in debt or you have 20 30 40 120000 in debt. You know you've got to claw your way out. And for him it took him six years to pay down 40000 back in the 90s and he didn't take vacation. He worked overtime. Everything was committed to that. But once you get to zero. Being broke is a blessing. Being broke is starting from scratch. Being broke that your financial freedom clock starts from there and from there it took him 10 years. It was a 10 year journey. And so depending on you know where you are when you're hearing this. I love the idea that broke is a great place to start from as opposed to six figures in debt. So just think about that. I thought that was a great way of looking at it. You can do this. We're sharing all the tools that have been compiled by other people not by us. These are not Brad and Jonathan ideas. We're reframing these for you guys in a way that makes sense to me. I think it makes sense to Brad we've been able to talk these ideas out see where the weaknesses are see where it could be maybe just simplified maybe put into practical examples. That's what we're doing. And so the next thing we're going to do we're trying to do this more consistently is showing you how another middle class couple could use the tools that we talked about earlier to supercharge their path to FI. So this next segment that we're going to hop into is our case study of the day and I'm excited about it. You ready for this Brad.
1350 - 1351 Brad Barrett I am let's do it.
1351 - 1516 Jonathan Mendonsa OK so let me set the stage here. So today we're going be looking at a couple and so married one child and the make 120000 so it doesn't really matter whether or not it's just one single person making a hundred and twenty thousand or it's one person makes 50 and the other person makes 70. At the end of the day the IRS really doesn't care but they're married they have one child. They're both 30 years old and they both have enough money to max out their 401k so they are going to put 36000 into their401 K's that's going to go in pretax. That's going to leave them with 84000 to work with after they've fully funded their 401k. From there I calculated it out and it looks like with the child included. So a married couple with the child included they're going to owe about eight thousand dollars in federal tax for the sake of simplicity were ignoring state tax which is going to leave them with seventy six thousand dollars of net income. And then from there they are living this entry level middle class lifestyle that we've talked about and they have $40000 of living expenses. And to our audience you know you can play around with these margins. Nothing in here is fix the idea with these case studies is that you take the little bit that applies to your life and you figure out how to use these actual tools so nothing is locked in stone. But just this is the math that we're working through today. So based on that math assuming that they decide to live this entry level middle class lifestyle and they commit to only spending somewhere between 40 and $50000 they're going to have somewhere around twenty nine thousand to $35000 in after tax income that they can invest in taxable accounts we're going to say just assume for today that they are going to have $29000 to invest in investable taxable accounts. That's that's what we're going to go with. Now this couple would be eligible to put in either a Roth IRA or into a taxable account. We're going to focus on the taxable accounts next. We want to illustrate the point. The power of capital gains. So there's a huge debate on whether or not to take advantage of Roth IRAs or whether or not just to skip them altogether and Jeremy go Curry Cracker is one of the instigators of this debate. And I think there's probably room to have that discussion for sure for sure. I think it's very very interesting. But today we're going to talk about just taxable account. So the reason why capital gains harvesting are so interesting is that they are taxed differently depending on the marginal tax bracket that you've fallen especially in the United States. We tax W-2 income or your paycheck one way and we x long term capital gains a different way. And so as long as you fall within the 15 percent marginal tax bracket the federal government chooses not to tax your capital gains up to this point Brad. Have I said that all fairly concisely and accurately.
401k, gainharvesting, ira, roth
1516 - 1588 Brad Barrett Yeah no that's accurate and. Jeremy added that qualified dividend so it's qualified dividends and long term capital gains are taxed at a zero percent rate. If you are in the 10 or 15 percent marginal bracket for your normal federal income tax which just looking at the tax table from 2016 it looks like the 15 percent bracket goes all the way up to seventy five thousand three hundred for a couple that's filing married filing joint. So that's a that's a significant amount and that's the taxable income. So that's already reduced by their standard deduction or if they itemize even better. And the personal exemptions so for this family that you mentioned they have about $24000 additional deductions just from their personal personal exemptions and the standard deduction. So I guess theoretically they could make somewhere in the vicinity of ninety nine thousand dollars. That would then be reduced again to get them down below that 75 three. So I keep going guys setting the stage here. But yet that's important info to add.
childtaxcredits, tax
1588 - 1626 Jonathan Mendonsa Ok so to put that into context basically what we're saying is if all of your income were to come from capital gains because you don't work and you are a millionaire and billionionaire you just drawing that out on an as needed basis you could draw up to almost $100000 a year in capital gains and live off that and you would pay $0 in in taxes because the federal government has decided not to tax long term capital gains. That's that that's the key. That's how you never pay taxes. Now the other half of that is if you were to make $100000 a year of W-2 income you would have to pay a 15 percent tax on that essentially.
1626 - 1706 Brad Barrett Jonathan can I jump in. Please please. Just to clarify real quick so it wouldn't be 15000 exactly because just the way our graduated income tax tables work is the first 18000 and change. Eighteen thousand five hundred is taxed at 10 percent according to the table that I'm looking at. And then anything over that 18000 550 is tax at 15 percent. I think that's important. You know most people don't really understand how our income tax works at all. They think oh I'm in the 28 percent bracket so that means that every single dollar I make is taxed at that rate. And that is just completely inaccurate. You know for instance if you make one dollar over the bracket it's not like all of your prior dollars are taxed at that highest rate. It's just that one last dollar. That's the concept of the marginal dollar. The next dollar. So that's really important for people you know outside of this case study just you know put that aside. Most people just don't understand how the tax system works so I think that's really really important that everybody understands there are these tax brackets and it's the first x number of dollars are taxed at 10 percent the next Y number of dollars are taxed at 15 and etc. etc.. So as you make more money every marginal dollar is taxed depending on these back as they're taxed at a different rate. So hopefully that makes sense.
1706 - 1781 Jonathan Mendonsa Yeah. Awesome. I am so glad that you stopped me and interjected with that. That is a huge point that I was about to breeze right by. So thanks for slowing me down on that. All right now so we've we've gotten through some of the basics here we need to get through all that information so that we could then take a look at how this couple would actually use these tools that we talked about. So here's the play. And here are the assumptions we talked this couple going to max out their 401k. And then after their living expenses they're going to have $29000 leftover for investment. They're going to put that into a taxable Vanguard account. We're going to assume that they make an 8 percent rate of return on this and that they're going to invest from the ages of 30 to 40 so it's a 10 year essentially a 10 year timeline that we're looking at for this couple. So if they invest 36000 in their 401k at 8 percent for 10 years that will come out to about 560 $3000 that will be in their 401k so that's all pretax. And then there are the remainder of the 29000 we talked about there are going to be investing that into a taxable vanguard of VTSAX at 8 percent for 10 years and that should that would come out assuming an 8 percent rate of return at about 450 three thousand dollars. Now that we've we've we've set the stage here. We want to take a look at what channeling these advanced FI techniques would look like for this specific couple. Are you ready for this Brad.
401k, indexfunds
1781 - 1870 Brad Barrett Yeah let's do it. I do want to just mention that you know we're obviously this is very general. So you know we have a lot of really brilliant people out there and the audience you know just keep in mind we're trying to explain this on on a podcast. It's difficult to do you know we we're making some big assumptions and we're not including like Jonathan says state taxes we're not even including payroll taxes in here you know. So I mean there are there are things that kind of move the needle here but just bear with us. I think it's an important illustration for everybody out there. And you know also like Jonathan mentioned these people have $40000 a year in expenses which you know using the 25 times rule you know the 4 percent safe withdrawal rate they would need to have about a million dollars to be at. FI And that's almost exactly what Jonathan calculated when you add up the 563 K in the 401 K accounts and the 453 thousand in the taxable accounts. That's just a shade bit over a million bucks so that's a decision. They did this in 10 years. Some people might not feel safe just retiring right at that. Exactly 25 times you know I'm a little more conservative with my money than most people. So for me I'd probably work an extra year or so just to pad it a little a little bit. But under the definition of FI that most people consider this couple is at FI. They have 25 times their annual expenses and they are ready to rock and roll. So that's the decision they made. So yeah I just wanted to mention that real quick.
1870 - 1887 Jonathan Mendonsa So Brad what we really want to do is take a look at what the play is for this for this individual. How should they go about using capital gains harvesting to their advantage while using it right alongside the Roth conversion ladder.
gainharvesting, rothladder
1887 - 2049 Brad Barrett Yes so I think I think the play here as as we discussed on the Mad Fientist episode and on last week's Friday roundup is you know they want to maximize the Roth IRA conversion ladder as much as possible. So we have determined that especially for this couple I think when with the millionaire educator episode we talked about free money and you have about $34000 for a married couple with one child in free money to do this conversion. So what that means is with the personal exemptions the standard deduction and the $1000 child tax credit which if you kind of back that out and turned it into deductions essentially means you get $34000 where you would pay zero dollars in tax on it. OK. So we are going to assume that they are going to convert $34000 a year from their 401 K which once this couple left their job they would have to roll that out of the 401K at their old company. Put it into an IRA with Vanguard or Schwab or fidelity and then they can do this conversion every single year. You know we would advocate 34000 as the number there because you know we want them to pay zero dollars in tax. That's the goal here. Especially considering they have so much money in their taxable accounts which is just savings. As we've discussed that 453 could just be sitting there in cash. You know it's not as we're going to discuss this in Vanguard and that's where the capital gain harvesting comes in. But they do have a sizable amount of taxable savings that they can use to live off of. So even though their expenses are 40000 a year we're going to do the 34 K in conversion every year. So what we need to get them to year 5 which again if you listen to prior episodes the Roth IRA conversion you can convert that money but you cannot pull it out tax and penalty free until a five year seasoning period passes. So on day zero you can make that conversion. But then you have to wait five years to pull that amount out. OK and then you get it because it's a Roth IRA essentially contribution at that point. That's what it's considered. You can pull it out. Tax and penalty free. All right so that's the whole concept of the Roth IRA conversion ladder that you're doing that every single year. So six years hence you pull out the 34000 you put in on year 1 7 years down the road you pull out what you put in and year two etc. etc. so you just keep doing that. And that's to get your Essentially your 401K out entirely tax and penalty free and well before you're 59 and a half which is when you normally can can access that penalty free. So Jonathan did that make sense as a lead in anything you want to clarify.
401k, gainharvesting, ira, rothladder, savings, tax
2049 - 2052 Jonathan Mendonsa No that was perfect. That's exactly what we're going to do with the 401k.
2052 - 2181 Brad Barrett Cool so. So that's the play there. You know obviously they need to get to year five. And luckily they have $453000 in their taxable accounts that they can pull out $40000 each year to live off it. OK so that's what gets them birdges them to that point that they get to access the 401 K money. All right so that's crucial as well. Now the cool thing is because as Jeremy pointed out to us with the tax gain harvesting they still have a lot of space leftover to harvest all these gains and pay zero dollars in taxes on them. So as Jonathan mentioned they're putting in. They put in $29000 a year. So they put in $290000 over a 10 year period in actual you know after tax savings but they grew to 453000. OK. So they have 163000 in unrealized gains that when they sell those mutual funds they need to pay tax on that or they would if they were a normal person. Not at FI and not knowing all these advance strategies that we know. But that's so that's the cool thing is they can actually go after the the mutual funds that have the largest unrealized gains and sell those because they still have all this space. You know as we discussed they have up to almost $100000 in total gross taxable income if you will before deductions and they've only had 34000 in a taxable event for the conversion because as we know that is a taxable event so that counts as taxable income. So that leaves them over $60000 of potential tax gain harvesting just every single year which is amazing. You know they only have 163 thousand of unrealized gains anyway so they can get all of that gain out without ever paying tax on it either. So there's a lot lot to do here and essentially these guys are are never going to pay tax on any of this money which is incredible to me.
gainharvesting, savings, tax
2181 - 2232 Jonathan Mendonsa So there's two points that we need to add to this in order to round this picture out. One is this is why you see some controversy on the go curry Cracker Web site talking about why he does not fund a Roth IRA and puts all of his focus into taxable accounts. That seems counter-intuitive at first glance because with a Roth IRA everybody knows that you don't have to pay taxes on the gains or the earnings but it totally makes sense when you take this episode into context and you realize that based on the tools that we've just laid out for you capital gains harvesting you're going to be able to not only never pay taxes on these taxable investments but you're going to be able to then get access those dividends and on those gains anytime you want whereas with with the Roth if you've done it that way those would've been captured up until you're 59 and a half on all the gains. So a lot more flexibility this couple has access to this in their 40s as opposed to in their 60s which is kind of cool.
gainharvesting, ira, roth, tax
2232 - 2233 Brad Barrett Yeah. That's a very good point.
2233 - 2259 Jonathan Mendonsa So keep that in mind. The second point is that $100000 line that imaginary line right there they're using that 34000 is being taken up by the conversion. And the difference that's how much window they have to realize these gains anytime they want. So like Brad said so if they have Brad what is the number you said they have 1603000 of unrealized gains when they go to sell those investment accounts is up the number that you came up with.
2259 - 2262 Brad Barrett Yeah that's. Yeah just back of the envelope I could figure.
2262 - 2321 Jonathan Mendonsa So you know they could essentially convert 60000 a year for three years and now. And just within a three year window. All of those gains have been realized and they won't pay a dime in tax on it which gives them a lot of flexibility in a lot of choices going down the road. The key for that capital gains harvesting was that because they are just trying to take advantage of this bracket that the federal government has created for them. They're essentially just selling the Vanguard stocks or the vanguard funds that have done really well then they're not paying taxes. They're saying hey federal government you can tax me you can tax me because I made money on this and the federal government says no thanks we don't want to. And so now they've realized it at that higher number. And then they're just re buying it again. So I know some of you probably have questions about wash sales and for the sake of capital gains capital gains harvesting it doesn't matter. You can essentially sell your VTSAX and then go right back in and buy your VTSAX. So if you didn't need that money you could literally just put it right back in to Vanguard. Not a problem.
gainharvesting, indexfunds, stocks
2321 - 2349 Brad Barrett Yeah that's that's really powerful stuff. And hopefully this illustration made some sense. Obviously anybody has any feedback or any information. It's conceivable that we got a detail or two wrong but because this is very complex but this is our understanding of how this situation works. And you know what's cool is we can always get Jeremy back on and we can talk through a another example. So if you've got something for your life you know send it our way. As always you can reach us at feedback at choose FI dot com.
2349 - 2421 Jonathan Mendonsa All right guys so Brad always after we do one of these case studies we always like to go ahead and go through a couple of the iTunes reviews and we had several come through this weekend. Again we really appreciate it. It helps us get our message out there. It helps us make this a more mainstream idea it helps us get access to you know new guest. So thank you for taking the time to leave a review. And these are just a couple that came through this week. Jacobs says Great show super cheesy intro. Be ready to skip 30 seconds. Love these guys real specific advice you can implement. Jacob man. Come on. Embrace the funk. It builds character man. But yeah Brad and I we both know it as it is. I guess a campy intro it is definitely a funky intro but we love it and we're enjoying doing this. Someone else said Good Show learn a synonym for unpack it and I'll listen more. Yeah that's fair that's fair I got a lot of flak for that this week. It's kind of like a virus. You know it's for life. It's hard to escape it. Once you embrace it so beware. But I am trying to tangle it from my vocabulary and I think I had I had a 0 percent unpack ratio today so I think I've done a good job so far but it's been very very difficult. Very good.
2421 - 2451 Brad Barrett Yes we're at zero times saying unpack so far and it's funny. I have never used that phrase in my entire life. But Jonathan has used it and for some reason like when I'm doing these podcasts like that just flows naturally. But we both listen to the episodes and we realize like holy cow we're saying that word a ton of times. So yeah. You know something as silly as this is like guys we listen to it and we also listen to your feedback so something as even as minuscule is that we are definitely going to lose that word from our vocabulary. So do not worry.
2451 - 2501 Jonathan Mendonsa All right. And then Lex guy 21 says Brian Jonathan are an amazing team. I have been marathoning this podcast for the past two weeks and I finally finished today. There is undoubtedly an avalanche of details and specifics in their episodes and they deconstruct topics wonderfully and then Lucy 1990 says thank you for creating this. I've been listening for a while while I'm out walking. I really like that you're talking details it's helpful to hear the nuts and bolts of how to approach FI. I enjoy other podcast on the subject. They're inspiring but often thin on the steps to take as someone who tinkers with spreadsheets and experiments with different things I appreciate and look forward to hearing more about your experiences. So guys thank you so much for leaving that feedback. Please continue to leave us those feedback on iTunes and I mean it just it's the number one way you can help us get this message out right now. We absolutely appreciate you guys. Thank you so much for that.
2501 - 2578 Brad Barrett All right guys so we're going to move on now to some questions from the audience and we've actually been getting a number of these where one of the spouses or significant others are are really into this concept and the other one either isn't into it or just hasn't become aware of it yet. And the question is how do you approach your spouse about this. How do you try to to make this a lifestyle that that you both can live without there being animosity or any kind of issues like that and Kevin sent in this one case study where he said Hey guys I love your podcast. I've slowly been converting my my wife to a FI life she came from a formerly ultra wealthy family. Five million dollar house $100000 a car etc.. Any advice for me. We've made some small changes like changing from leasing a Mercedes to buying a Kia bringing lunch to work. The Costco plan you guys laid out but it's hard to kick our $700 a month in restaurants budget. I'm starting to cook more. But Costco has nothing to offer my wife's Ruth. Ruth's Chris Palet. So yeah. Kevin wants to know you know what would we what would we advise him. And Jonathan you want to jump in. I think before I send it over you like you know we don't have the perfect answer to this but it would be interesting to kind of talk through like how we would approach. That's right. Yeah.
2578 - 2642 Jonathan Mendonsa And dude you're screwed. Well We'll take a stab at this if we can do. That has got to be so challenging though and I don't know completely what I would do in your situation. I have never had or even been close to having the ultra wealthy lifestyle I can imagine that that that is just has got to be challenging. But having said that you know I will be to be honest I'm the spender in my family like I'm the one that wants to spend money. There's people and Brad is one of them that are you know minimalism for minimalism sake which is totally cool. You know I totally get it I have a foot in that world and I and I appreciate it and understand that mindset. But I also you know if I were a millionaire or billionaire I don't know I don't I don't have a problem spending money if I have it. My biggest gripe is that in general most people that are bought into the consumerism and materialism in this country and probably in the world sacrifice their future for the now and so it's kind of that we're just finding that balance that gives you the best of both for me. So my perspective on this may be a little different but this is going to be a great conversation I'm excited to have it. Brad did you have any initial thoughts.
families, mindset
2642 - 2827 Brad Barrett To me it comes down to happiness and I don't think Kevin is screwed here at all. I know you're kind of jokingly saying that but rich people are not different from us. Poor people are not different from us. It's just people have what they've grown up with. First off and second like a lot of people substitute happiness in life for buying things and buying expensive things. And like Jonathan said I'm kind of a minimalist. I would love to own nothing. I certainly certainly don't want to buy expensive things because you know that would just freak the heck out of me honestly. You know I'm driving around on my 2003 Honda Civic which is a perfectly lovely little car but man I never worry about it. You know like one time somebody hit me in the parking lot like just tap my bumper and flexed some of the paint off. But he left a note when he was so apologetic. I'm like dude it's a 2003 Civic. I don't care one iota. You know like it doesn't impact my life I'm like you know. This guy was like so stressed out and then he was thrilled after what you know he was so thankful and and I mean if I had a Mercedes like some other moron and spend $50000 on it of course I'd be worried about I'd be worried about it every second like. And you know that's not to say there aren't expensive things to buy in life because I'm not someone who's going out and buying cheap stuff. That's not how I live my life. I'm buying stuff that I get value out of. So sometimes I mean buying something that's more expensive than the next guy might buy. But you know maybe I've made a determination that I'm going to get some additional satisfaction out of that or additional years of value or something like that. So you know hopefully that kind of makes sense on how I approach spending but but more so just going back toward what Kevin's actual question is. What does your wife value and what does she get happiness out of is she. And I'm not a psychologist. I'm not playing an armchair one here. But is she actually enjoying the $700 a month in restaurants or would you guys like to cook together. Like how Winnie from go curry cracker does. Right like she said I'm going to be the best chef in town because A she loves it. And B it is less expensive but it's also something that they can spend time together on as opposed to you know oh let's run out and pick up some prepared food from the local food store or let's go out and get a pizza or something like it can actually be something that you enjoy as a couple. So for me it's finding those things. It doesn't mean not spending money in life. It really doesn't. But it means just spending it intentionally with happiness and enjoyment at the root of every decision. So in my opinion buying a Mercedes is not going to give me five times the value of buying or satisfaction or happiness or buying my civic. So that's where the decision comes from for me. So I think maybe sit back and not do it in like this overly enthusiastic and ham handed way of like hey what do you get happiness out of you know like I mean that's not going to. Your wife is going to recoil in horror from that conversation but like try to find things that you guys enjoy doing that don't necessarily cost a lot of money. Right. Like that would be my first step.
2827 - 2921 Jonathan Mendonsa Yeah. I think also it's the small steps too. You know you're you're probably I mean I guess you could do a radical overhaul but I think a radical overhaul happens more when both people are on the same page. I think when you have people that are opposite ends you're looking for common ground and you just make up small steps and I think Brad's tip about finding the things you love and the frugal analogs and doing more of those. It's going to have more of an impact for you. So you know I think probably look at the different line items in your budget and see which ones you can have an impact on you've already done that a little bit. You know by changing from the Mercedes to the KIA packing a lot I mean you're doing some really good stuff. And so it sounds to me like if you're actually first of all starting to track your finances you're in better shape than you were before. Right. And now then the next play is alright. You're saying it's hard to kick the $700 month restaurants out of the budget if that you know if that's the if that's the biggest line item. That's the thing we're focusing on what can we do. That gives us 80 percent of the same enjoyment. But for a fraction of the cost. So the Costco is not cutting it for well I make steaks that make gourmet steaks and my wife's favorite thing in the world is for me to actually go ahead and spend the time on a gourmet steak meal. Maybe you do a gourmet steak meal at home and you do the wine and you create the scene. But you do it at home and you're doing it together. There are frugal analogs for everything. It's certainly not Ruth Chris or chipotle. It doesn't have to be there's something in the middle there. And so I think you certainly just look for what gives her happiness like Brad was saying and try to figure out how you can do a frugal analog for that.
2921 - 3048 Brad Barrett And just just last thought. Especially if you know this restaurant budget is a significant portion of it. Maybe your wife doesn't enjoy cooking. Maybe you're. You're the cook like you mentioned. You know I'm starting to cook more well experiment right. Ask your friends on Facebook for their favorite recipe that is a little bit different and you know not just like chicken parmesan or something. If your wife is looking for an exotic dinner well you can make them at home. But obviously if you're trying to get her on board with this lifestyle like asking her to do more is not going to necessarily be the ideal scenario so it's not oh honey you know it's time for you to cook this lavish dinner. If Kevin wants to take this over then then make it something fun that you become the best chef in your city or your town. Right. That's a fun thing to experiment on for years. And my wife Laura is the cook in our family and she just loves it. And like we talked about on a prior episode like we're always trying to like refined like our quote unquote like top 50 list. You know this is what we have like like a running list of of our favorite meals. And as a new meal comes in that's fantastic it kind of like supplants you know number 50 on the list. And you know realistically we're never going to make that again because as we discussed when we cook we always cook for leftovers so you know realistically Laura is only making one or two meals a week at the most because of how we shape our meal planning. So a top 50 list of Millhouse is going to last almost an entire year. You know we might not make something that we love more than once or twice a year. So you can make a game out of it you know make it fun and make this delicious food that your wife can enjoy. So you know I think you can take that. You know that's 8400 dollars a year in restaurants. You don't have to cut that to zero. You know like my wife and I we like going out to breweries with friends. We're not getting meals there necessarily and spending $100 when we go out. We're spending you know 20 bucks on a couple of beers and that's fine. You know that's not going to add up to $8400 a year. Obviously you know we go out maybe once a month or thereabouts and go to a brewery once a month with friends and that's a pretty cool little social life and that's not a ton of money out of the budget.
cooking, mealplan
3048 - 3240 Jonathan Mendonsa Yeah. You know I didn't even notice this but Kevin listed some stats at the top and he said that between the two of them it's 75000 and 55000 in terms of income 32 and 28 years old. And then they have 40000 in the Roth. And they have no debt. So was just thinking about that. That is actually what we did our case study on in terms of a financial picture you got two people at the age of 30 with a $120000 joint income and they have no debt. So it's a 10 year plan for you guys. So you know you're just going to have to. You start with where you are and you see where you can move towards. But one of the things that always helps is having an idea of what the other side actually looks like instead of just being frugal for frugal sake which is wonderful. Having an idea of what you're working towards and what you're working towards together as a team and your timeline if you were to implement these things would be pretty short. I think that's about a 10 year timeline. So take it for what it's worth. I hope that helps. But we've had three people at minimum I think we had closer to five people email this week basically mentioning you know something about you know one spouse whether it was the husband or the wife went both ways. One person and totally onboard. And then how to get the other person to come along. And what that tells me is that we've convinced you I think I think we have shown you enough. We've given you enough options. We have explored what this looks like to sell you on it and now you're just trying to say how can I get my spouse onboard and maybe I'll just listen to a few of the episodes together. Maybe you just implement a few of the things that we've shared with you like for instance maybe the travel rewards maybe you start traveling the world for free and getting those little wins under your belt those things that you couldn't have done even with your normal spending patterns you couldn't have afforded that but now you can do a trip to Europe you know and you can do it for free. A frugal analog maybe a few of those little ones are enough to convert you to the other side. So I know that in my life it didn't. It didn't get all the way to here immediately. It was one little thing at a time. And so you just take one step and then the next one and being the spender in my family and just from what I told the earlier it was kind of hard for me to get to the point where I identified completely with Brad like everything that Brad says. I generally agree with now. Now what will it look like far on the other side. I don't know if I'll be in the same place but the steps that I'm willing to go through now I want to do exactly what he's doing and maybe the reason why I want to do it is different but the process that I'm willing to go through is exactly the same. I am going to be a minimalist. I'm going to focus on frugality. I'm going to focus on the entry level middle class lifestyle and I'm going to get to FI after FI what does it look like. Would I still maintain an entry level middle class lifestyle. Well probably somewhere close. But you don't necessarily have to I don't think that you have to feel that way in order to still embrace the things that we talk about. But for everybody the entry level middle class lifestyle is a tool that you can use to get to FI faster. So that's just kind of my own particular perspective on it. All right guys. So for this next segment we like to take a travel rewards question and we have one from Kurt and he says travel hacking for hotels. So he says Can you address travel have ideas for hotels instead of airlines. I'm in a unique spot where I already don't have to pay for flights but I would really like to get some cheaper hotels. Brad what are your thoughts.
10yearstogo, frugality, roth, travelrewards
3240 - 3658 Brad Barrett All right. I like hotel redemptions as well. They're a lot easier than airline redemptions because most hotel major hotel chains have a policy where if you if they have one standard room available for you know regular cash bookings then you can use your points. OK. So that's a really important thing to remember that it's not limited to just a couple of award seats on one random United Airlines plane or something like that. It's if the Hyatt Place in Washington D.C. which you know I just stayed in if they have any of their quote standard rooms so that's nothing no deluxe no upgraded no nothing like that just a standard room if they have that available to book regular with cash you can use your points. All right so that means you can use hotel points very often up until the last minute because you know most hotels are not at full occupancy every night. I mean the vast majority of them are not. So it gives you a lot more flexibility with that you can do last minute bookings there's no last minute booking fees that I know of on any of the chains. So those are all just very positive little things to keep in mind certainly. And you can get some pretty good value. Like I mentioned earlier there are lots of Hyatt Hyatt Hotels that I find a Category 1 through 3 which are either 5000 points a night 8000 or 12000 respectively and you can get some pretty darn good value out of those and find some nice hotels. When we went to the San Francisco Bay area this past summer with my family we actually stayed at the Hyatt House in Emeryville which is right there and you know Oakland San Francisco area. And yeah that was I think it was eight thousand points a night when we booked it I think it might have jumped up to 12000 but that's still a really good redemption. So you can find a lot of a lot of solid value with Hyatt and Starwood especially. So I would if it were me starting from scratch I would focus on earning as many of those points as possible. So for Hyatt there while there is a Hyatt card the bonus on that is actually two free nights at any Hyatt in the world. OK. So those are not the traditional point bookings. Those are just two free nights. So now naturally you want to want to use those at a $100 a category one Hyatt. You'd want to use them at. You know the category 7 ultra luxury hotel in New York City the Park Hyatt or the Park Hyatt in Paris or Sydney Australia. So that's the play with those kind of cards. When some of them offer two free nights I know there's a Hilton reserve card that offers something similar. So you always want to go for luxury hotels when you get those. But as far as earning Hyatt points the easiest way is actually through Chase ultimate rewards. So we've talked previously about like the Chase Sapphire preferred which is our number one card the Chase Sapphire Reserve and the ink business preferred. There are a bunch of cars that chase in cash. There are a bunch of cards that earn these ultimate rewards points. So the goal is when you have one of the premium cards like the sapphire or the ink business card those points are transferable to 11 different airline and hotel partners and Hyatt is one of them actually. So you can just send those points over to Hyatt and then make the booking. So for instance what we did when we booked 2 nights at this Hyatt in Washington D.C. was we took 24000 points from our chase ultimate rewards account and I transferred them over to my Hyatt Hotels account and just literally booked the hotels 20 seconds later. You know I made sure the availability was there for those award nights that I wanted and then transferred the point because once you transfer them you cannot send them back to chase. OK. So that's an important point to remember. So that was that was like a two minute exercise. Found the hotel found the availability and then sent the points over from Chase. Refresh my Hyatt account and just booked them. So like I said a couple of minutes and boom that was done. Saved us $700. So yeah that was that was really solid. Starwood is another one where there are lots of redemptions for what would be considered fewer points if you will and I'll talk about that in a second. But you can get redemptions at the lower levels for 2000 or 3000 points a night on these weekend nights and even like Category 3 is only 7000 points at night. And the offer the fifth night free on five or more night redemptions So for like twenty eight thousand points you can get five nights in a category 3 hotel because it's only 7000 point a night. But you only need to spend for four of them. That's right so that's the 28000 and you get the fifth night free. So there are a couple of Starwood Amex cards there's the personal and business. And also there are Marriott cards. Ok Marriott the redemptions are generally terrible. They usually like 30 plus thousand points a night for even just like standard junkie Marriotts. So I don't generally recommend Marriott for the sake of booking Marriott hotels but since Marriott just bought Starwood you can actually transfer Marriott points over to Starwood now which is really cool. So because the Marriott points are worth so much less it's actually three Marriott points get you one Starwood. So that would be like 30000 Marryat equals 10000 Starwood but just keep in mind that you can move them back and forth. If you find you know good Starwood or Marriott redemptions So you know that touches on most of where I'd start you know there are some Hilton Hilton cards as well that you can rack up just a huge number of Hilton points. But you know similar to Marriott they they cost a lot. It's 30 to 40 thousand points a night in many many Hiltons. So you know your hundred thousand points just aren't going to go that far. But you know as long as you're aware of that you can still get value from those card sign ups and then just final point is there are cards like the Barclay Card arrival plus and the Capital One venture that you can just use to book your hotels and just pay for them like normal you know check out you just use that credit card and then you can log into your credit card account after the fact and use your miles to wipe out that expense off your credit card bill. OK. So that's you know a nice way if you can find a good deal on a hotel. That's a way to get like the Barclaycard arrival plus currently a time of publication that's a $500 bonus so you can get five hundred dollar hotel rooms from that one card bonus. So you know that can go a pretty significant way as well. If you can find good deals so that would be my my you know five minute explanation of how to use traveler rewards points for hotels. So hopefully that helps.
3658 - 3849 Jonathan Mendonsa Wow dude. That was awesome. This is why you're the expert. That was a very thorough explanation of everything. You should consider all the different ways that you can approach travel rewards with hotels. Excellent excellent stuff there buddy. And if you are just hearing about travel rewards for the first time because maybe you've just found out about the choose Fi podcast and you want more information on exactly the tools and techniques that Brad and I and a lot of our community now actually use to travel the world for free. You can go to choose FI dot com slash 0 0 9 and we have a great introduction to travel rewards in general and you will learn everything you need in order to get started. So I hope that helps. All right guys so we'd like to do just a short segment about where choose f is going Brad and I told you that the next several weeks are going to be a little bit uncertain just with everything that I'm going to have going on personally but we are going to try as best we can to get you all some additional Friday round ups this upcoming week. We have JL Collins. He is going to be showing us exactly how the stock series came together and we're going to be exploring exactly what that looks like for you. Now he does a wonderful job just on his blog actually going through the individual levers that you can pull to go through the simple path to wealth but I had always wanted to do this almost as an audio book companion to that because he is such a storyteller. I mean that the man is amazing. And you're going to enjoy this so we don't yet know how many parts the stock series is going to be. But Jim has agreed to come back and do really as many as we need to in order to do it right. So this upcoming Monday will be the first part in that series on the stock series and it's going to be fantastic. So that's that's just one thing to look forward to. We also have another episode coming up on the face the staples of fi specifically looking at what the entry level middle class lifestyle exactly what that looks like. J.D. Roth we are planning on getting him on the podcast in the somewhat near future. We're still trying to pin down that date as well as Christy from millennial revolution. So those are two other people that we're very excited about. We have one episode coming up that we want to do on the true cost of car ownership where we really take a look at exactly the cost of your cars and we're going to give you the formulas you need the math you need to really take a look and figure out exactly how much your car is actually costing you. And I think it's going to be very insightful. I think it's going to change the way that you look at cars and really help you figure out exactly what it would look like to actually win when purchasing a car. And I've always lost at that so I'm just really bad at it. So it's incredibly useful for me and I think it's something that you will find useful as well. And we have a few other ideas some people have suggested that maybe we take a look at robo advisors. It's not something that I have done a whole lot of research into. I know there's a big debate out there. And almost like a mini feud although I think it's in good fun between go Curry cracker and money mustache about whether or not to use robo advisors. And I know Tim Ferriss is also a fan of one of them as well so I think that will be interesting. We're going to start doing a little bit of research before we hop into that but that's on the radar also. So I'm kind of excited about it I think it's going to be a fun two to three months I think there's a lot of good information coming your way. Brad Any final thoughts.
3849 - 3934 Brad Barrett Yeah I'm just really excited for Monday's episode Episode 19 with Jim Collins. I mean we're really very fortunate that he spent so much time at this. I mean I think it's an hour and a half episode and it's just really phenomenal. As as Jonathan mentioned Jim is a wonderful storyteller and I think you're I think you're going to enjoy the episode. So please stay tuned on Monday. Just a couple of short days from now and check that one out for sure. And the other item is just that we always want your feedback we always want your input. You know I was thinking the other day like our frugal wins and frugal fails of the week like you know. Sure. Jonathan and I might have one or two things here and there to throw in but there are thousands of you listening to this podcast and we want to hear your frugal when we you are frugal fail of the week just. Shoot us an e-mail. Put the subject frugal win and send it to feedback at choose F-I dot com and just just send us a two line thing with what your frugal of the week was and we'll read it out on the podcast on Friday. And you know we want to make this as community driven as possible. We're not here to sit here and give our opinion for two hours and sermonize about this and that that's not what we're doing. We're making this what we hope to be the hub of the financial independence community online. And the only way that happens is with your feedback and your input. So please anything that you have just send it to us via e-mail feedback. at Choose FI dot com. feedback at ChooseFI dot com.
3934 - 3946 Jonathan Mendonsa All right guys if you want to get in on our email list and you want to get the latest up to date tax hacks life. HAcks Fi hacks frugal wins and guest post. You can go to choose F-I dot com slash subscribe.

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