025R - Friday Roundup Case Study Part 4

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0 - 12 Jonathan Mendonsa Well Time marches on my friends and so does the path to financial independence it is now the month of June 2017. Unbelievable. And yeah Memorial Day was just here had an awesome time four day weekend. Brad how is your weekend.
12 - 27 Brad Barrett Yeah it was really nice. We had just a good family weekend. Took the kids on a hike at this state park that we have been meaning to go to it for a while and had some friends in town from New York to visit and it's just a good time all around. Yeah what about you Jonathan what did you guys do.
27 - 70 Jonathan Mendonsa I went ahead and took advantage of Sunday and made baby back ribs essentially for the neighborhood. But it was really an incredible value and you break it down I've got four racks of ribs from Costco. I think my total investment there was about $52 and then I bought a variety pack case of beer blue moon also a Costco which they have a really good selection right now pieced all that together on the charcoal grill and it ended up taking me like six to eight hours to cook that four racks there wasn't enough space to do it all at once. But you know you kind of triage it and you set it up and by the end I mean I was thinking per person per meal it was around my investment or that sort of meal was around six to eight bucks a person. Just unbelievable when you think about what that would cost to go out but it was a great time. Everybody came over and just really really fun.
cooking, mealplan
70 - 75 Brad Barrett Yeah that sounds like. Sounds like an absolute blast. How many. How many families did you have over.
75 - 77 Jonathan Mendonsa There were eight adults there. Yeah.
77 - 77 Brad Barrett Sounds good.
77 - 96 Jonathan Mendonsa So this past Monday we had Keith from the wealthy account. And this was actually his first podcast that he's ever done and he did it with us. It was really cool. He did a great job and it's kind of like standing in front of a fire hose and then just saying I think this is a good idea let's do this. And then you just unlatch it and then you just get washed away in the knowledge right.
96 - 135 Brad Barrett Keith is unbelievable. I mean as you're saying that I have this huge smile on my face because that's exactly what I was thinking. And my wife Laura. Listen to the episode as well. And she's a CPA and I'm just blown away. It's it's almost like he said it's a firehose. So it's almost a little too much especially if you're not our episode he talks a lot about small business because that's where a lot of these tax hacks are. And you know it can be a little overwhelming but that's the cool thing about a podcast is you can go back and listen to it when it's applicable to you. So I know I got a lot of value out of it. Laura picked up some things that she's going to use in her own practice so hopefully a lot of people got some value out of it. If not now then in the future.
smallbusiness, tax
135 - 185 Jonathan Mendonsa And I know that is actually the case we've got some feedback from Aubrey who has a blog over money energy freedom life dotcom and said basically you know fantastic episode Keith peppered me with so many ideas I immediately replayed the episode and so far it is just as good if not better the second time around. I only wish the episode was longer so we could all benefit from the experience and insights he brings so she's looking forward to the future episodes that we have planned and she said she really appreciated how his advice was so specific and then how you Brad got him to narrow down on specific case studies. That level of specificity is very rare but valuable So yeah I know that's one thing your mentality when we're having these conversations especially these ones that are so valuable but also very complex I know you make a concerted effort Brad to really figure out what does this look like for an individual that wants to take that first step and then that second step. What does it look like. Building it from ground zero.
185 - 287 Brad Barrett Yeah thanks man I appreciate and that's definitely what I try to do is put my put myself in the in the shoes of someone who is A just starting out and B just wants to take action right. What does this look like for someone like. I want them to leave an episode of choose FI with OK here are my marching orders here's what I'm going to do tomorrow or next week to make a difference in my life. So yeah I mean I think Keith was phenomenal in this episode and hopefully some people especially with small businesses. We have a lot of people out there who if they don't have a business now they're thinking about it. So I think one of the real high level things that he talked about was that S-Corp selection for L.L.C. is and this is something I've kind of played with my own businesses for a while. And honestly I've just been lazy and I haven't done it. And even when I read an article like this that says you know you can save a couple of thousand bucks it just always seemed like a hassle but you know this actually got me off the couch and is making us actually take action. See I'm taking action and hopefully a lot of you out there realize this isn't that complicated. You can find an accountant like Keith or you know just make some calls in your local area and really ask questions of your of your local accountantas. This is not common knowledge. It really isn't. And I know a lot of accountants and Keith is in the top probably tenth of 1 percent but you can find people that are if not as good as him then been pretty darn close. So it's really incumbent on you to find that top tier accountant. Don't settle for the bozo next door or the guy at H&R Block. I mean I can implicate myself here like I am nowhere near the level that Keith is like I went in I would not be able to do this because I don't have the passion for it. So it's it's find that accountant with the passion. I think that that's crucial.
accountant, smallbusiness
287 - 361 Jonathan Mendonsa Yeah absolutely. And I think you know going forward with Keith guys he is excited to come back and get to do individual case studies in individual situations and I think that's going to be the real value. If you just open it up. There's so many different places you can go it's hard to get that focus and to dial in and that one thing that you can learn. So send us your ideas your questions and we'll continue this conversation year round and I'm and I'll learn from it as well. There's nothing better than a great question. And gwain said you know you touched on it at the end but I'm curious when you should form an LLC. If you're just starting your side hustle such as a new blog and it's not making money or just very little money and what are the tax implications for making so little. And Keith has already gotten back to us on that one and said gwain for tax purposes an LLC is not required from day one of a side gig. There might be legal reasons to do so. A small side gig LLC will default to a disregarded entity which has a sole proprietorship for individuals and partnership for multiple owners. The tax consequences are nil since tax matters are handled as if there were no L.L.C. hence the disregarded title. So Keith is super involved. He loves answering these sorts of questions and give us a good one something that benefits our entire community and we would love to for that over to him and get an answer that we can share.
hustle, tax
361 - 421 Brad Barrett And just to jump in on Keith's answer that he's not saying don't do an LLC he's not saying that at all. He's just saying for an individual right as he's saying it's disregarded what that means is this information doesn't get recorded on a LLC or a partnership tax return. OK it just gets recorded on your own. 10:40 it's actually on the schedule C show. Like he's saying there are no tax consequences. It's handled the exact same way regardless of whether it's an LLC or a sole proprietorship but there are potentially business reasons. Like he said there might be legal reasons to do so. There might just be making it seem more official. Which is not insignificant right. I know it only costs. I think like $100 to have an LLC in the state of Virginia. Many states are comparable and to have the appearance of being a formal legal entity as opposed to in my case just Brad Barett off the street. That's worth it for a hundred dollars from me so that's a reason to it. But as Keith appropriately said there are no tax benefits to doing that for for an individual.
421 - 453 Jonathan Mendonsa Other comments if we got in this episode Nylander educator actually popped in to say hi and he said I love Keith solid advice to save 50 percent of your income and simply invest it in low cost index funds. That's almost an automatic path to wealth and I really thought that was valuable you know we have a tendency and I think it's important to do so to make things a little bit more complicated and to flesh out the nuances. But if the only thing you came away with from the show and you never listen to anything else again was to save half your income and invest it in broad based index funds like VTSAX or a Schwab or Fidelity index fund. You're going to do great.
453 - 498 Brad Barrett Yeah and that's actually one of the things that I jotted down about the episode as well and the exact quote that you just said is save half your income. Invest in broad based index funds. It really is as simple as that. And I think here at ChooseFI we try to make things simple so like Jonathan said we we do dive into the nuance from time to time. But what I think people appreciate about our perspective is that we are just normal middle class guys. We're not doing anything special. We're just trying to save money. Right. And in Keith's case it is a guarantee that you will be wealthy if you save half your income and invest it in broad based index funds. So from there he talks about life hacks and making life better and all that kind of stuff that we talk about as well. But man if you have that as the baseline you're going to have a very successful life.
498 - 595 Jonathan Mendonsa So I don't really even know what I don't know that's the problem right. That's what that's the beauty of this show you don't know what you don't know until you do. And then you can go do more research then you know what to google. Right. But there are some things that I think would be a lot of fun to cover. And one of those would be when do you decide to actually go ahead and get an accountant. I think that is a very valid question to answer. How do employ your kids if you're a sole proprietorship. So what that would look like one of the things I think is going to be really cool for second generation fire is everybody considers getting a side hustle. I do not mean a side hustle that is going to make hundreds of thousands or millions of dollars if it does great and I'm happy for you. But I think that there's value to considering a side hustle even if it only makes $10000 a year $5000 a year. I think there's value there both because it gives you an education that you won't get in school. I think it's value there because it gives your kids an education they won't get in school. And I think there's value there because it gives you a way to help your children fund a Roth IRA from the age of six years old. And if we can figure out what that picture actually looks like I think that you'll be able to take that and use it in your own lives very easily so I don't care what that is. I don't care if it's stuffing envelopes. If it's mowing lawns if it's doing surveys online if it's creating a blog if it's creating a product you can go as far with that or as high level with that as you want. But if we can flush that out and create some ideas maybe with Alan with pop up business school and come up with some ideas for a side hustle. And then if we can figure out how to get those to Keith to help us flesh out how we can get that child's Roth IRA account funded from the age of six. The whole time they're grown up and they're maxing out that Roth IRA that is going to be such a powerful tool so I think those are the two pieces of the puzzle that I'd really like to see connected over the next six months to a year. What do you think Brad.
2ndgenfi, accountant, ira, roth
595 - 640 Brad Barrett Yes in sounds cool. I would I'd love for the audience to chime in with and as always send it to us if feedback choose FI dot com out just what you want to see. Keith talk about. I mean there's so many different aspects of taxation of accounting in general right. I mean most people don't even know how to how to keep track of their books and we can ask him about that. Like if a client came to Keith and said What is the most efficient way to just keep track. Very simply of my income and expenses that would help you as my accountant. What would it look like. Right. Like I think there's value in something like that so if you guys have any questions definitely shoot it to us. Not even just the questions but just high level concepts. Just shoot it to us and we'll talk about it with Keith and we'll figure out a way to present it to you that that makes the most sense.
accountant, tax
640 - 699 Jonathan Mendonsa That is awesome and you know I'm actually sitting in my office right now surrounded in shambles by all of my medical records that I'm trying to come up with a system to organize them currently so that I can hack my HSA account. And as you're saying I'm thinking please somebody give me a system please somebody give me a system. I'm working on one. But it's garbage it needs an upgrade. All right guys so let's go ahead and move on into our next segment here. What we try to do is collect feedback from you on past episodes and get your feedback and also your corrections in some cases as well. And this was from Danielle talking about taxable accounts and in the past week's episode we had said taxable savings is really a garbage term. It has a very negative connotation to it but it actually can be amazing an amazing vehicle to put your money into. Once you filled up your other buckets and Danielle e-mailed us and basically said about that conversation I would suggest that you refer to it instead of a standard savings account as a post tax account. It's an account that is established with post tax dollars. What are your thoughts Brad.
hsa, medical, savings, tax
699 - 727 Brad Barrett Yeah I like that. That's a very intuitive way to actually understand this because yeah I think I think when we call it and it's not just us certainly this is the general term but when you call it taxable savings that just confuses the heck out of people so it's more appropriate that this is post-tax. I mean that's that's truly what it is. This is just your savings leftover just your standard savings in life. So that's already been taxed. So yeah I'm I'm on board with this. I think I think we can adopt this. Jonathan what do you think.
savings, tax
727 - 733 Jonathan Mendonsa I'm good with that. Danielle you've left your mark on the show for eternity from here on out. They will be called post tax savings. Thank you for your contribution.
savings, tax
733 - 823 Brad Barrett All right. On last week's Friday round up we had a question from the audience about reinvesting dividends and Dominic actually got in touch via e-mail and said this. He said regarding episode 24 R I personally don't think one should reinvest dividends automatically. If investing in a taxable account or as we now call it a post-tax account as this can complicate tax loss harvesting by creating many tax slots when you sell. So you know I wrote back to Dominic and said that's a very interesting thought. One I haven't considered. Do you have any go to articles or sources that can help the audience with this and he sent an article from Bhogle heads dot org and we'll link to that in the show notes. And just further my answer was I still think at least based on the knowledge I have today for probably 99 percent of people it makes sense to reinvest the dividends. But of course I'm always willing to change my mind. If new info comes along so well I still think my answer is accurate for the vast majority of people. I am certainly cognizant of the fact that we have a lot of high level smart people in here who are going to do this tax loss harvesting So if that is a consideration for you then I highly suggest checking out that article that will have linked up to it in the show notes and as just an aside if you're interested our shownotes you can always reach them if you go to choose FI dot.com. Click on the podcast or really the easiest way. Just quickly get on our email list. You can do that by texting. Choose FI to 44222. Or you can always just head over to choose FI dotcom slash subscribe.
lossharvesting, tax
823 - 878 Jonathan Mendonsa So let's go and have a conversation. This is a second generation fire conversation and one of the things that we would like to do occasionally going forward as a segment is to highlight a career that really sets you up for a nice easy FI path. And this week we want to talk about nursing. This has come up over and over again from different guests and from our audience members who think they've really figured something out and it's worth just taking a second or two to go over some of these ideas with you because even if you're in a specific career and you're already set on your choice and you're not going to change it. I'm in the same place I've I'm past that point. Second generation fire is looking to their mentors their parents and you are positioned to help guide them towards these choices. And if FI is a reality for your family it's reality for you and it's a reality for your kids. Certainly a career that sets you up for the fast track to that is a conversation we need to have. So let's talk about nursing Brad.
2ndgenfi, career, families
878 - 879 Brad Barrett Let's do it.
879 - 1008 Jonathan Mendonsa So first I'm going to go ahead and basically this is is going to be a string of thoughts from different people in our community. And the first one is from aMeeka who has a blog at beats and Lilac's dot com and says I love your show even the opening music. You recently asked the audience about good career options for those pursuing. I would strongly recommend nursing many nurses work with just an associate's degree. Although having a your degree is helpful there are many different types of jobs which keeps things interesting and it's easier than many careers to relocate. You can work a 9 to 5 schedule weekends nights or part time as a hospital nurse. I work three 12 hour shifts a week and it is very easy for me to have six consecutive days off without using any vacation time. It is hard for me to imagine having to work five days a week. Nurses can also make a very decent money. They have access to some of their retirement accounts that teachers have such as 457. There's also the option of travel nursing which could be a good way to travel while earning money and there are further tax benefits. And best of all nursing can be a very satisfying job. So I think that is a great way to get the conversation started. I have a few other thoughts from some other people in our audience. Vicki wanted us to know that she's been an RN for 10 years all working per diem. So I have complete control over my schedule. Minimum shift requirements is four eight hour shifts a month. I frequently work 40 hours over a three day weekend and then take long stretches of time off. My employer is a public hospital in the Bay Area with a base pay of eighty five dollars an hour and up to 20 percent differential depending on the shift work. Oh and they have a 457B. So for me nursing makes FI possible. Those are some really good thoughts guys. This conversation is getting started and it's getting continued week round on our page and on our Facebook group where we get to constantly bounce ideas off each other and make them part of our lives and figure out how to explain them to others that that's what's happening every single day on the show and it's very rewarding. If you have another career that you would like to see highlighted on the show send us your ideas feedback a choose FI dot com or go to our Facebook page and let us know your thoughts. This is really what we live for and it's fun to talk about it's fun to talk about these ideas and just think about things that you had never really considered before. Right Brad.
457, career, tax, teacher, travel
1008 - 1098 Brad Barrett Yeah absolutely. Jonathan and you actually brought up something there that we wanted to announce here on the show today is that we just formed a Facebook group. So this is a private Facebook group for choose FI and and even though we just started in the last week we already have 300 people in that group and it's amazing. I mean there are dozens of conversations a day and it's a nice private place for us to all do what we've been talking about here which is establish a community even though like I said it's only existed for a couple of days. It feels like it's existed forever. People are sharing information back and forth. They're asking questions answering questions it's really a cool thing to see. So the way to get in there is to head over to choose FI dot. Com forward slash Facebook. OK. And they'll be a quick little opt in you'll send us your e-mail address we'll shoot you an email and that I'll have the link to the private Facebook group so should take about 20 seconds to get in there and then yeah we'd love to have you as part of the community. I think that's the best way to take this from a two day a week us talking at you albeit with a lot of community involvement to. A seven day a week community and that's that is what we really want. And we thought this was the perfect time to start this group. It was it wouldn't have made sense four months ago when frankly we didn't have as big of an audience and now there's this groundswell and we see it every day with the e-mails you're sending us and this is the time. So head over to choose FI dot com forward slash Facebook and please join us. We'd love to see you.
1098 - 1153 Jonathan Mendonsa And I cannot stress how excited I am about that. It feels like home like if you've been looking for a place to get your ideas off your chest and see what other people think about them or just to learn other fi hack's life hacks this I've never seen anything like it and I've been a part of a lot of Facebook groups and this one for me is firing on all cylinders and I check it in 8 to 20 times a day just to see if there's something new that I can contribute or something that I can learn and it's not just me and Brad that are in there. I mean you have Joel and Alexis from FI180 com that are in there Jason from winning Williams that are in there Noah from money meta game is in there. Alan is there from pop up business school Seonwoo is in there. I mean these guys are extremely high level thinkers and they're engaged and just like we are. We want to share ideas and we want to learn from you and you know you can get a part of this group you're literally part of the show. Because this is where these ideas get flushed out and brought to life. And then the show is where we present the culmination of these ideas.
1153 - 1199 Brad Barrett All right. So last week we mentioned Camp moustache down in Florida. This coming January 2018 and the tickets sold out within a couple of hours. So which is awesome. We can't wait to meet you guys and we probably should have told Stephen the organizer before we announced it. But at this point that's kind of neither here nor there. But there is still a waiting list and it's conceivable that another event might open up around that time. Not positive by any stretch of imagination but if you are interested in still coming to camp mustache go to choose FI come forward slash camp and you can still sign up for the waiting list. Just to let Stephen know there is still demand for this so. And you never know he might be able to put together another event and make it happen.
1199 - 1228 Jonathan Mendonsa And I will just say there is there is real value to connecting with people on a personal level that shared the same framework the same philosophy. Just doing things just a little bit smarter than the rest of your neighbors. And it's just fun to be able to be a part of a community and get to meet people that are like minds and share their ideas their stories. And I had a blast doing it and Stephen just does an amazing job organizing and setting these things up just a genuinely amazing person. And it's going to be a lot of fun.
1228 - 1458 Brad Barrett All right. So I actually like I mentioned before I have a lot of FI conversations in real life now which is amazing. I have just like a ton of family and friends actually listening to this podcast and just devouring it every week and sending me emails or giving me a call and I actually saw a good buddy of mine Justin who lives in New York City but he is down in Richmond for the long weekend. And what I didn't realize he had gotten together with a bunch of college friends the night before and they were chatting about about the podcasts actually which is crazy to me. And they were talking about the pillars of FI and the $2 per person per meal and the reflexive answer was that is impossible. And they were going on and on and on about how that's just not doable. And actually Laura wrote up an entire list of our our past week's food and it's pretty it's pretty interesting. This was like a just a really straightforward week for us. And I think what we came to the conclusion was we can do $3 per person per meal in our sleep. I mean that is like the easiest thing in the world. And that was even like in this past week we had prepared meal. So one of those say it ain't so type things because I've talked about these but at Wegmans they have these fantastic prepared meals that are actually really inexpensive. So we got this chicken cacciatore from them which is one of the best meals I've had in a long time and it's like it's like $14 which sounds like a lot but to me it's about like portion control. Right so whereas the old me would have just devoured half of that and it would've been seven bucks per person. We essentially divide it into quarters and then it was 350 per person. So something a simple little hack like that like I've found in our little FI game like how. Joel And Alexis talked about making games out of saving money. One of our little games comes down to portion control and it's just not over eating and the way that we that we make it fun is that we say like all right if you take seconds here that ruins an entire leftover because there just simply wouldn't be enough for that second dinner for the two of us. So if I can then cut the cost per meal in half just by making that one tiny little decision that's something I'm going to make 100 times out of 100. You know the right way. So not only am I saving money but this goes back to our our skinny waist fat wallet episode which is you're actually eating less and you're being healthier. So you know this was an instance where this past week we had tacos that Laura made like beef and chicken one night and that was good for three separate nights. She just made extra It doesn't it doesn't take any more time to make an extra pounds of beef. It just cooks there you know. So you're just sitting over the stove and you know that really is another aspect of this too is being efficient. Right. That's what I always talk about when it comes to meals is if you're cooking seven times a week you're doing something wrong. It's just so much more efficient it just makes your life so much easier. We all complain about being busy. Well make a meal that's good for at least two nights. Three would be better. I mean that's it's just not that hard it doesn't take that much more time for that one cooking and then you have leftovers for two extra nights. So anyway long story short is this past week we had six nights of dinner the Laura catalogued here and it cost us $33 in total for the two of us which is approximately two dollars and 75 cents per meal. So that was amazing. And that's a pretty standard week for us if we wanted to go cheaper we could but we eat like kings and you know my my buddy Justin and his wife she was saying like what do they eat to eat like spaghetti all the time. I mean are they eating. Are they healthy. I mean I would argue just similar to Winnie from Go curry cracker. I would argue that Laura is on her way to being an elite level chef. I mean she's phenomenal. And it's just so we're not sacrificing any way shape or form where eating delicious home cooked top quality meals. And yeah I mean $3 per person per meal again we could do it in our sleep. So I think that's very plausible for everyone out there.
Brad_Catchphrases, college, cooking, health, mealplan, savings
1458 - 1535 Jonathan Mendonsa That is amazing. And it strikes me at so many different levels. First of all one that it is doable that you guys not just you're not just doing it once but you're doing it for an entire week. You'll be able to replicate those numbers two the portion control is so critical and it's probably a weak spot in my own life and that I don't spend enough time being OK with a certain amount of portion. I don't think about that as another way to win I'm able to do it very easily when we pre portion things out. My wife will make things in bulk and she'll proportion and in the tens or Tupperware or whatever else and I'll take that portion with me that work no problem. But when I have downtime a lot of down time at home and I'm just given a large there's a large container in front of me I tend to lose that and I think the thing there the disconnect is that intentionality what is the play and are you eating mindlessly Are you actually thinking about what you're actually eating and you kind of know when you're going from grazing to when you're actually eating with a purpose. And I think that one of the little life hacks there that you can implement is how much water are you drinking. So you know if you find yourself constantly eating and moving from one food source to the next and blowing through that portion and then moving onto the next one but you're not drinking any water that may be a weak spot in your in your plan. So just you know think about it think about that I think there's something there not just from a frugal perspective but also from a fitness and waistline perspective because if you don't eat it you don't need to work it off right.
1535 - 1647 Brad Barrett Yeah. No doubt about it. And yeah just as a kind of an aside another reason to join the Facebook group if you didn't already have enough is that Laura is going to be posting a bunch of her recipes in the Facebook group so I know what we're trying to convince her to do to get the top 50 lists together and to post some of these recipes and it's definitely a lot easier for her to do in the Facebook group. So we already kind of teased one that we had our favorite meal that she makes and it was similar to what you were talking about Jonathan with portioning out. Right. So this was like the perfect example which was Laura knows that it's about four chicken thighs for the two of us to have this chicken Shwarma for for dinner and she makes just fantastic right. It's on this non-bread that we got from Trader Joe's and with all these extra toppings this tiziki dip she makes and it's proximately four chicken thighs for the two of us to have dinner for a night. So she cooked 12. And like I said it was we had the four. And while I was I could have theoretically eat more because I'm a pig and I love to eat. I did it because I knew if I had even one extra bite it would screw up the next night's meal. So that was just a real simple you know math. Hey we need we need for per meal we have 12. Here's three dinners. I'd much rather have that third delicious chicken Schwarma meal that I'm looking forward to in two nights. Then just have a little bit extra. So yeah. Long story short is yes she's definitely going to post these in the Facebook group. So stay tuned. And as we always talk about this is a community so this is not Laura dictating on high what's what's good for the fi community. We want to hear your voice. What kind of delicious inexpensive recipes do you guys have that can make a decent amount just come and join the Facebook group and share them I think that's what this is all about it's just sharing these life hacks that make our lives easier and more efficient and help us save money. So yeah definitely join.
cooking, mealplan
1647 - 1649 Jonathan Mendonsa So are you ready for a frugal win of the week.
1649 - 1650 Brad Barrett Go for it.
1650 - 1725 Jonathan Mendonsa All right. So Jake says the problem is packed school lunches. My children do not eat the fruit. We pack them unless it's expensive pouches of applesauce which also produce a lot of trash. Last week I spiral cut and cord an apple for each of them packed them in a little reusable tub that we got from a to go container and the kids ate them up. The apples are fun to eat because they can stretch it out like a spring and it feels more like eating a chip than biting an apple the peel or attachment folds out of the way. If you don't want to peel it I leave the peel on. I had this idea that it was a pain to clean but it's actually just a quick rinse. Now I have the satisfaction of getting my children to eat healthier cheaper and use less packaging. And yes they've been mostly returning the Tupperware. He found it on amazon there about 15 bucks a pop and I went ahead guys and I got the link for y'all Also I'll post that on the home page. As it happens I actually have that and I got it from my grandmother and I for about a three month period of time. Last year was using it every single day because I was getting that much of a kick out of actually getting the spirals and I've gotten away from it. But you know as I have a child now and I can imagine being in a similar position I will break that thing back out and it really is a lot of fun it turns eating apples into going from an apple a day keeps the doctor away to actually a fun game. So really really cool.
1725 - 1868 Brad Barrett So I actually had a frugal win of the week but it's kind of an unorthodox one. I don't love buying gadgets certainly I don't really love buying all that much of anything but especially gadgets because it just kind of fills up the house and it's a real big pain in the butt. So I. As I mentioned before I've signed up for Tim Ferris's email list and he has this thing called five bullet Friday where he sends out just a couple of things that he has. He's getting a lot of value out of that week and one of them was is this egg cooker. OK it's called the dash go rapid egg cooker and we'll link to it in the show. But certainly it's a super easy way he said. The easiest way he's ever found to cook hard boiled eggs and now I am a huge fan of hard boiled eggs. But if you guys ever cook them they're a big pain in the butt. Right. It's. You never know if you get the timing right. You have to boil water. You have to peel the darn things which are just ridiculously impossible and for me that was just an impediment to to making them and making egg salad or something like that every week. And I wound up buying this thing. It was like 17 bucks which really wasn't bad at all. And though I did think about it I still didn't love spending the money for a gadget but I tried it and not only was it the easiest thing in the entire world. Make hard boiled eggs but they were the most delicious. It was the most delicious eggs I've ever had. Now the frugal when here is that what I normally do for my breakfast is I have a quest protein bar that and some carrots some cauliflower and that's pretty much my breakfast every single morning. But if you guys know anything about quest bars they're in the $2 per bar and this is like my one kind of expensive food item which sounds ridiculous to say but now instead of that what I'm doing is I'm substituting at least twice a week a little bit of eggs salad. And now eggs cost about five cents per egg at this point. So for my normal two egg breakfast That's 10 cents as opposed to my $2 quest bar. So I'm saving almost $4 per week. And this was a $17 item. So literally in a month I broke in even and from there on it literally money saving. I mean so while it sounds silly to say that you're actually saving money and there's a break even point on a frivolous little thing for your kitchen like this was a big win for me and I spent a lot of money on these quest bars so this is not insignificant and I'm getting a little extra variety in my in my diet. And it's good stuff all around.
FWOTW, cooking, savings
1868 - 1906 Jonathan Mendonsa Nice. That's awesome. I have a frugal fail. I went to Kroger bought my wife some tea the other day and then forgot to put in my Kroger phone number or my Kroger savings rewards card. I got home and I realized that I'm sure I had paid at least an extra two to three dollars total. Frugal fail. It really caused some mental agony when I realized alright. Guys in our next segment we're excited to introduce you to a new in-house expert and this in-house expert is going to be walking us through the very murky world of student loans and I don't think there's really a better way of doing this other than just playing this voicemail that we got and this is from Mark Resnick who has a blog over at student loan freedom dot com.
college-loans, savings
1906 - 2149 Mark - (voicemail contributor) Hi Brad and Jonathan. This is Mark Reznick with student loan freedom in Richmond Virginia. And I'm calling today to try to share some of my perspective. And to give you a hack and really my perspective on this is from a side of federal student loans and student loans. That's not really within my expertise but because I've already put two kids through college and because my expertise is helping people who have already graduated save a lot of money by understanding every federal loan program that I understand what this hack is all about. And here is my advice my advice and my hack for the day is for those people first looking at putting their kids through school and wanting to save money for those kids being tempted by the government bs telling you to put your money tax free into a 529. Now I understand that this is what the government is suggesting you do. But let me tell you everything about this college thing. Everything that's government related with this college thing is so screwed up. Like why would you listen to this one too. OK. It's tax free money is what they're telling you. And it'll go toward a college it's earmarked it will go toward college but my hack is take the money that you would put into a 529 and over fund a permanent life insurance policy by over funding a life insurance policy. The extra money that you're going to put into that goes to savings cash savings. And it does not count against you for financial aid. That's my that's my problem. My problem with the 529 is that the more money your kid has in his name his or her name when they go to school then the less money the federal government is going to offer your kid. Why should your kid be offered less money than somebody else because you worked your butt off to put money into a 529 program that just doesn't sit right with me. So don't put your money into a 529 and then stop the federal government from offering your kid funds. Put your money into a good name or whatever that name is. Lots of big brands out there. I'm not an insurance guy. I'm not selling insurance. I'm pretty much not all about permanent life insurance but I am for this purpose over fund the hell out of a permanent life insurance policy. Leave it in your name. Put it in your kids day whatever it is that you want to do. But the money will not be used. It will not count against it. Financial aid it will not come up on the financial aid questions. You could always borrow money out of that out of that product tax free by borrowing by taking a loan out of the cash value of that account so that you don't have to worry about it when you reach whatever that age is. You know they'll give it to you tax free. I don't know all the rules that permit a life insurance policy but I do know that if you put your money into a 529 then you're going to eliminate that federal funding possibility and I'm trying to allow you to get every federal dollar that vailable Also while we're at hack's talking about funding before your kid gets into college do not take out private loans private loans are horrible for your kids or you worse if you take out a pair of plus loans as I vomit in my mouth. Do not take out a pair of plus loans. It's poison. Find a different school have your kid find some other way of going to school without taking out private or parent PLUS loans. Borrow every dollar possible at the federal loan program. There's lots of great programs. Once the kid graduates to figure out an affordable payment and hopefully forgiveness at the end at some point in time. This is Mark Reznick student loan freedom in Richmond Virginia. With today's hack. Thank you.
529, college, college-loans, lifeinsurance, savings, tax
2149 - 2203 Jonathan Mendonsa You don't know what you don't know until you do. And I think Mark probably has a better handle on how this federal student loan programs work than either of us do at this point. Now in a perfect world we would like to set up our families to already have all the money ready for second generation fire. And there may be a play here and then I don't know how it works frankly I'm going to be honest I don't know how this would work to hack the FAFSA. And part of that may be sheltering some of your money from the FAFSA by parking it inside of a vehicle like Mark is describing. We just got the conversation started today and I don't think that this puts a period on it rather it would just open it up and we're figuring out where it goes and we'll be able to put this together. The other half of that is if you are already in the federal loan program or you already have it. I think Mark is the one that could really help us game this thing out and show you what your options are for squirming your way out of it down the road.
2ndgenfi, college-loans, fafsa, families
2203 - 2261 Brad Barrett Yes so I totally agree with that second part the first part. I just want to mention that we have not done our research on on this so. I am not 100 percent sure that putting it in permanent life makes the most sense but I think the conversation is important. And together with Mark and with other experts we have and you know the community that we have here I think we can really get this conversation on student loans going and really drill down to what the best answer is. I'm not sure that this permanent life insurance for members of the FI community is is an absolute slam dunk. But but again it's thinking about a problem a little differently which is not just as Mark saying reflexively putting your money in a 529. So I am onboard with that aspect of it. I am not at this point willing to completely say I agree with putting it in an permanent life but that's largely beside the point. I think Marc brings up great points.
529, college-loans, lifeinsurance
2261 - 2296 Jonathan Mendonsa I'll be honest you guys have heard how sketched out in general I am by any other life insurance other than term life insurance. But Edmund who I've told you before is one of the highest level FI thinkers on the planet has said there is some value there but it's not the value that the insurance salesman try to get you to sign up for. It's behind the scenes looking at the problem of a differently value. And so I think we're going to see in this whole conversation over to him just to get his input and see if maybe Mark is on to something that I had never considered and maybe Edmund can help us flush that out as well. What do you think.
2296 - 2315 Brad Barrett Yeah I like that a lot. I don't want to make it sound like I think Mark is incorrect here. I don't know and you know I don't want to explicitly state that that we're on board with this without without doing the research. But yeah I mean if Edmund and Mark can work together and come up with an answer then that's that's a huge win.
2315 - 2327 Jonathan Mendonsa And I wouldn't be surprised if Edmund took this from where. Let's say it's at the 20 yard line. I would be surprised if Ed then went ahead and rushed this thing into the goalpost because he has a way of figuring things out that really shouldn't even be possible.
2327 - 2476 Brad Barrett And I think his his second point on avoiding the private loans that that's very interesting and I actually met with Mark this past week a friend of a good friend of mine connected me with him and just said he is a real expert on student loans and helping people navigate this this really complex system which a lot of people just don't know the rules. And again what we always talk about here is at choose FI is once you know the rules. You can learn how to utilize them to the best of your possible abilities. So I think that is where Mark is going to come in handy as a real expert here on understanding student loan forgiveness programs. There are. He as he described to me I had no idea any of this stuff. And he's describing all these loan forgiveness programs especially for as we talked about with like millionaire educator with teachers and firefighters and police and all public employees he said. Mark said that the people with the best options are those public employees. So what we're going to do actually is Mark's company and its student loan freedom of Virginia. He wanted me to reiterate because evidently there's some sketchy company I think out in California that has a similar name so he wanted to to be sure but we want to open this up to the audience to kind of test out Mark's service. So if there's anyone out there that especially is a public employee that has student loans it can be a significant amount of moderate amount whatever it may be. Shoot us an e-mail at feedback at choose FI dotcom and just let us know that you're interested in potentially working with Mark and we're going to help facilitate this entire thing. You know he accepts no payment before it is entirely locked down and you'll see exactly what benefits show he's going to work on your behalf to basically find out how you can maximize and just to be clear we have no monetary relationship here with Mark in any way shape or form. So we just want if this is something that can benefit our community we want to tell you guys about it so so but we really need to have this one test subject to go through and figure out what the process looks like how much money you can save and hopefully come on and give a quick testimonial or voicemail of how the service was and then we can open up to the entire community and just say you know Mark is our guy for student loans. So you know again just if you're interested in working with him and working with us on this shoot us an e-mail. So thank you.
college-loans, firefighter, police, relationships, teacher, testimonial
2476 - 2514 Jonathan Mendonsa So the overarching theme here is that we want to figure out the student loan situation. One we wanted to know once you already have em which describes most of first generation fire. How to get rid of them as quickly and efficiently as possible. The second half of this conversation is how to avoid them altogether. And that's my second generation fire conversation and that's where you guys can help us because many of you did figure that out you figured out something that I didn't figure out until much later. And you've perfected something that maybe I'm not even aware of. And Brad's not even aware of. So this second voicemail is from Bryce and he has some amazing information to contribute to this particular conversation. Ready for this Brad.
2ndgenfi, college-loans
2514 - 2515 Brad Barrett Yeah let's do it.
2515 - 2718 Bryce - (voicemail contributor) Hey Brian. Jonathan this is Bryce Imhoff and I wanted to share a few strategies that I used to hack college. I graduated just a little over two weeks ago from the University of Arkansas and SCC member school with zero debt and a total of forty seven thousand two hundred nine dollars in scholarships and federal grants. I continue to hear you guys talking about trying to figure out how to hack college and I think I might have some valuable feedback for you on this subject. My tuition was roughly $32000 or $4000 a semester and my parents paid for three out of my 8 semester in school. I decided to get married during Christmas break my sophomore year which required us to completely separate from my wife and I's parents financial support. I then went on to receive $41209 of scholarships and aid in my last five semesters of school. You guys have talked a lot about hacking the FAFSA on the show. And I think there's tremendous value there. But one of the most overlooked sources of aid in universities around the country is current students scholarships through your university specific college and major My university offered the current student scholarship that required you to submit a resume write one or two short essays on some broad topic they assigned and get a few recommendations from an advisor or professor. I received a total of twenty thousand six hundred nineteen dollars in merit scholarships after my sophomore year of college just from applying in a broad general pool of scholarships. I submitted one application for the university wide current student scholarship one for Fulbright college. The liberal arts college on campus and one for the political science department. My junior year I only received $2174 and merit scholarships. But I hacked the FAFSA to make up the difference. My senior year I went through the exact same process of scholarship applications and I received seventeen thousand $445 and merit scholarships over half of the entire cost of my degree in one round of applications. The key to successfully getting current student scholarships is a really competitive GPA and student leadership involvement on campus. I had a really high GPA and I worked a few different jobs on campus that put me in everyday contact with professors and advisors. Each job paid well above minimum wage and there are countless jobs like this on campus. If you really want to get them. Another advantage is that a very small percentage of people apply for current students scholarships and even less apply for departmental scholarships. If you can keep your grades up and stay disciplined each year you set yourself apart a little more and become more competitive especially within your major slash Department which explains my jump in scholarships from my junior to senior year. The second part of how I hacked college was the FAFSA because I was married our parents income was no longer required on our FAFSA's which allowed me to qualify for basically all federal grants available to me. Why merit scholarships were combined with my federal grant aid. I was being paid ten thousand dollars cash per semester after all tuition expenses had been paid. My senior year. So in summary take school seriously and make good grades. Merit scholarships are based on merit. Get an on campus job during the year last summer. That puts you in contact with influential people. If possible go to a public university. I paid $32000 for tuition for four years versus roughly 50 to 60 thousand for a private university apply for every student scholarship again. There is much less competition when applying for scholarships in college versus applying from high school and your ACT or SAT scores don't matter. And lastly and I think this is most important have some skin in the game. My parents were high income earners and I was happy to let them pay for school without any effort on my end. I honestly had a little bit of an entitlement mindset and staring at potentially $20000 in student loans. Lit a fire under me to go make it happen. All right guys thanks again for all hard work on the Web site podcasts and the podcast I hope this provides some value.
college, college-loans, debt, fafsa, scholarship
2718 - 2804 Jonathan Mendonsa Thank you so much for sending your thoughts. That is extremely value added to be honest with you. I've always been skeptical of scholarships on a mass scale and that is my own weaknesses and my own inabilities to be able to visualize that actually working. And I realize now as I'm approaching you know I'm as I'm in my 30s and I'm approaching everything from this optimized path if I just had a single person be able to model that for me if I just understood what the process looked like if I just had someone like ESI show me that you do just one little thing one step at a time. How achievable that really is. And I saw a news article that was recently shared on Twitter from stacking Benjamins. And it was basically this one girl had qualified for over $7 million in student loans scholarships $7 million from 48 different universities and had her pick. And it's just what if you had someone modeled that you knew what the process was and you don't do all the applications at once you just do one little thing at a time one step at a time. What if there was a systematic process that you could use and instead of you even getting a summer job you coach your child through that process and they work on that one bit at a time. Over the course of the summer. And instead of making one or $2000 or $3000 they make from work working at the pool over the summer they earn $7 million in scholarships. That's the value of looking at this problem just a little bit differently. And that's the value of what Bryce is contributing to this conversation.
college-loans, scholarship
2804 - 2865 Brad Barrett Yeah I love that. And I'm definitely going to get my kids on this. And you know whatever. Seven or eight years when my oldest daughter is getting ready to go to school and I think back similar to you Jonathan I think back to when I was in high school and even college like like Bryce's and I was just so stupid and lazy just because I didn't know this stuff and I could've at the time I was in high school probably qualified for full tuition merit scholarships. at Many many colleges but it just didn't cross my mind as stupid as that sounds like. I was so focused on Ivy League schools and things like that and I did wind up getting accepted some of those places. But but man like when you look back on life and you say like who the heck cares about that stuff. If I could have gotten a full merit scholarship somewhere. How could you not do that. And I don't even look into it. I mean how criminal is that. And the I mean this this is huge. And like you said it's it's looking at that problem differently. So I hope that people have the drive that Bryce does. And I hope my kids do and I hope I can I can help facilitate that.
college-loans, scholarship
2865 - 2980 Jonathan Mendonsa And I think I even have an extra piece to add to this. Looking back now when I was at the point where I was in school and it was time to apply for scholarships I think it was already too late. At that point because I hadn't done anything so suddenly I decided oh I need to start looking at scholarships. But at that point it is too late. Right you need to have documented. And again it goes back to our conversation with career hacking and ESI. It is all about accomplishments and so if you know that if you have someone model for you and you know I have this three year window going into the time where I need to start applying for these scholarships I need to have some accomplishments I need to have something that I can talk about I need to have something that I can write about. And you start setting up this three year track before you start applying for them. With that construct in mind this problem gets a lot easier and I don't know. I think there is really something there. And one of the ways that I've found that helps me to organize my thoughts is through a blog and whatever that looks like for you getting in the habit of thinking about your life in terms of accomplishments albeit small ones. Right. I volunteer at the library. I did this I did that. I was able to contribute to my community in these different ways not that you do it all on day one or you do it on one weekend you just do what ESI said you essentially apply the networking principles to your high school years and to your formative years and your parent helps you set that up because this is a second generation fire conversation. They know what it needs to look like. So they tee you up for those activities you're guaranteed to win this game. So next guys we're going to go ahead take a couple of minutes and we're going to talk about Paul's case study something you guys are really enjoying this. And I know that because you've asked me when is the next part coming. You guys are stalling. And yeah and maybe a little bit of something there but we're excited to go ahead and go through Paul's Excel sheet now and talk a little bit about a few of his expenses and how we can view those in terms of his working career now and what those might be after his working career is over. So Brad I have Paul's Excel sheet pulled up in front of me and you got it in front of you as well.
2ndgenfi, career, library, scholarship
2980 - 2980 Brad Barrett I do.
2980 - 3118 Jonathan Mendonsa Let's go and take a look at this. So Paul's already done the heavy lifting on this for us so what he did as he went ahead and tracked all of his bills for 2016. And then from there he went ahead and projected it out to whether or not it would increase or decrease as accurate as he possibly could cause he's. Forecasting in his post FI life. And so what we've done is then take the time to go through these one line item at a time and look at his explanation of why they might increase or decrease. And then we have our own comments to maybe add onto that whether or not that looks reasonable or whether or not maybe there's anything that we can add to that. So first of all I think the number one thing just to set the stage for Paul's spending and 2016 came to $73000. So that is how he set the perimeter of what he thought he might like to have in a post FI world and he projected that his spending in 2016 was it 73000 So he wants roughly $70000 a year in spending available to him which is what the whole scenario was based off of. Is that reasonable. Having said that by Paul's own admission in his post FI life many of these expenses go down dramatically and we'll go through those one at a time. So first off his bills cable and satellite in 2016 he spent $1500 on his cable and satellite package. He anticipates that that's going to go down to $1000 a year in his post-FI life and so he has just cut the cable he's just going to have the Internet plus about about $65 plus about $25 a month and subscription services so right out the gate because of some of the suggestions that maybe we've had he is cutting $500 a year from his budget there for his automobile gasoline and his working career he is spending Twenty one hundred dollars a year in gasoline but you know obviously they're both going to be at home. So there should be they don't need to commute to work five days a week. So there should be a pretty dramatic decrease there he estimates that that will be at least a $600 a year savings there. And I agree with that assessment. His cellular bill they have three. He spent $2000 a year on his cell phones last year. They have three phones. The monthly bills been cut by $65 in the last six months and now they're looking at other options such as taking freedom pop. I would also add onto those Republic Wireless and project FI he hasn't considered those there are certainly a way to decrease that I would imagine. The bar for cell phones if you're looking at this and you're in you're willing to get rid of your premium service you could probably get your cell phone service for sub $60 a month somewhere in that range seems totally doable to me. What are your thoughts Brad.
3118 - 3171 Brad Barrett Yeah for the three of them that's $60 a month so yeah I think that's reasonable. And yeah like we've talked about I think on the pillars of FI episode it's just just like anything with FI it's not expecting perfection. It's understanding that you have to make me a tiny tiny little sacrifice to save a boatload of money. Right. So for my cell phone we have Republic Wireless and our bills come out between 12 and $16 a month depending on the amount of data that we use. But we're just a little bit smarter than the next guy. So it's not streaming Netflix or downloading podcasts. When I'm off of Wi-Fi. Right. That uses data but when I'm in my house I can do anything that I want on my phone because it's over wifi and it doesn't use data. So it's just being a little bit smarter and we're not talking about major things here. And I think I think Paul can extend that to a lot of these different aspects as as Jonathan's going to continue.
3171 - 3266 Jonathan Mendonsa Yeah absolutely. So then another one on here he had a line item for job expenses non reimburse he spent $1800. He anticipates that it would go down to $600. Which makes sense I mean if you have to work there are going to be expenses tied to working and when you're not working you no longer have to worry about that insurance health insurance. Now this is really interesting. He's done some heavy lifting here for us. He spent $4700 last year on health insurance. He anticipates that in the FI world his post-FI life that's going to go down to about $3000 a year. And that's because he's already done the calculations. He says my share of health and dental insurance he expects a bit of a drop under the ACA. He expects to get it down to $250 a month after the subsidies. This is really interesting. We need to explore this and show you how to do that calculation. Frankly it's something that I need to do myself and maybe Paul can share with us exactly what his process was. I know he's going be starting a blog pursuing Fire dot com and it seems like that would be a great article as simply Paul just how to go about calculating your health care expenditures in a post-FI life. So that's very valuable that you took the time to do that but just noticed that when you go to a place where you do not have income you're just living off essentially your portfolio. You are now eligible for subsidies and that will also decrease the cost of your life. And then finally I save this one for last his vacation fund of the $73000 that he documented 23000 of that was vacations. That is a a monster number. That is a completely un optimized number. And it strikes me that with some of the tools that we're talking about on this particular podcast with travel rewards. He's going to be able to crush the bill and he's going to be able to have longer more enjoyable vacations. Right Brad.
healthcare, healthinsurance, travelrewards
3266 - 3424 Brad Barrett Yeah without a doubt. And we mentioned this the last time we talked about Paul's case study and this is this is the easiest area. I mean 23000 of his 73000 was from from vacation. So Laura and I we're talking about our future vacations and and what that looks like for our lives and what is probably going to be is us going somewhere for a month as a family. And that may mean Santiago Chile of his or my brother or Lisbon Portugal or Bangkok Thailand. I mean it could be anywhere and with Air B and B now you can rent an apartment for an entire month for really a fraction of what you would have spent for a luxury hotel and they're going to be add on benefits that not only are you going to be part of the fabric of the city then you don't have to eat out all the time because you have a kitchen you have a refrigerator and that's going to save you a boatload of money. Paul is already doing travel rewards so he's going to be able to fly for free or pretty darn close. So I think there is a real high likelihood he's going to be able to travel significantly more with his wife and do it for a tiny little fraction of this so yeah I mean that when you take out his 23000 and you take out all the other reductions that he's mentioned he's only down to thirty seven thousand dollars in annual spending. So whereas when we initially looked on this and said holy cow he's spending $73000. I mean there's a realistic chance this can be even after you throw in another let's say 10 grand for for travel which I don't think it'll be anywhere near that. He's only at 47000 then so that's cutting a huge amount and I think he can cut it even more frankly. And yeah I think you know that 73 number sounded like a lot but Paul did a really incredible job of documenting that. I mean he even had one time expenses of some dental work that was twenty five hundred dollars in there that those were part of his prior expenses. But but that's not something that's recurring so he's throwing that out right away. He's doing a lot of the travel rewards stuff. So he had almost a thousand dollars in annual fees but that was a very intentional decision because he said he was able to earn almost three hundred thousand chase ultimate rewards miles or points. And that is there's going to be huge benefit for him down the road for that so I was in a sense an investment that he was making purposely. I think he said something like he was taking flight lessons and learning how to fly. So that's something that he's cutting out. That's another $1500 So as Jonathan said the 73 is a very unoptimized version. But even still it's it's not that horrific. But when you get rid of a lot of this stuff you're down to Pauls down to a real fraction. So I know Jonathan wants to jump in here.
families, travel, travelrewards
3424 - 3587 Jonathan Mendonsa I think it would be important not so much that Paul is going to take this last segment and do anything with it but just to document for reality sake that there is a difference between the core expenses what you need to support your family and then your your overall cost of living throughout the throughout the year and you know you have your core expenses and then you have your fluff and when you're relying on your monster portfolio there you are subject to the whims of the market and that's why we talk about sequences of return risk and that's we're big Ern really is able to add value to this conversation and help coach us through over the long haul when the market does this thing it goes up and it goes down. What number can you with some confidence rely on that. It's going to be there the entire time no matter what the market does. And so for the sake of this conversation let's just talk about a range though of what his expenses actually are. So we said that right now last year he spent $73000 if we just optimize his travel with all the other acknowledgements that he's already made things that will go down and we say we'll give him a $10000 your travel budget with the travel being optimized so we've reduced his travel costs by $13000 by using travel rewards. That's going to take him down to $60000 a year in annual expenses. Now Paul has already made some acknowledgments that many of these costs are going to go down in his post-FI life. When you add all those in that is going to take his cost down to $46000. So we have optimized travel and then we have Paul's own acknowledgements that life is less expensive post-fight. He's down to forty six thousand dollars in expenses. Keep in mind that he doesn't have any car payments he doesn't have any mortgage he doesn't have any debt. So all of that is made up from fluff. And when you get rid of the fluff which is you know it's reasonable stuff that all of us have it's Christmas gifts it's leisure it's entertainment it's it's upgrading the home it's buying the throw pillows it's all the little things that all of us do. It's not to say you can't do that. But when you realize that it is fluff it's not necessary for life and you get rid of that. We find out that his actual cost is closer to $35000 a year is essentially like that his his minimum range. They will not be comfortable below that with the lifestyle that they currently have. And his upper range is somewhere around $50000 so that's kind of the range at which their life flows and ebs with their own personal life choices and decisions and they can make those choices based on what they want to do based on the confidence that Big Ern is able to relay with their sequence of return risk. And then also with whatever the market actually does on a year to year basis you know if they're in a situation where they have 50 to 60 thousand dollars in a large emergency fund in cash and that's the money that they have each year their money is old all of their money is at least a year old. And so then as their new returns come in that's essentially what they're deciding to do with it next year so they can almost play this game one year ahead and see exactly what choices they want to make for the following year what are your thoughts about that.
families, travel, travelrewards
3587 - 3635 Brad Barrett Yeah that's interesting. I've never looked at it in that regard but I think the long story short is Paul's in really great shape here. I mean if he has 35000 approximately of baseline expenses Ern already said with Paul's 1.4 million dollar net worth plus Social Security which was a really insightful and essential point that earned mention that there's a really high likelihood of success for FI. For Paul immediately and that was when we were even considering his yearly expenses at a significantly higher rate than than what they actually are here in post FI. So I'm at the point where I'm pretty confident that Paul can pull the trigger any second that he wants or at this point. So I think this has been to me and this has been a really interesting case study. And I know I've enjoyed it. Jonathan.
networth, socialsecurity
3635 - 3638 Jonathan Mendonsa I think Paul can definitely choose fi.
3638 - 3643 Brad Barrett Yeah. Let's let's get him to when he makes that choice to send an in a voicemail I choose FI.
3643 - 3654 Jonathan Mendonsa . I need to have. Like the countdown timer to everything. Epic music score. I choose FI. It's here.
3654 - 3656 Brad Barrett So you can include that right.
3656 - 3745 Jonathan Mendonsa Yeah. So guys next week big Ern. He's already sent us his final thoughts on Paul's case. Paul is in great shape. Go ahead and pull the trigger on this will release Big Ern's final thoughts on this and how it might all flow together in one of the next several weeks. The final piece of this is that this is very time intensive stuff and it's extremely value added so we love doing it. But realistically this will not be a one month type case study we will try to do a couple a year most likely. But you know it's going to be as we have something that really tells a different story and really adds value to the conversation. And we're going to do it a little bit more slowly just to make sure that it's done the right way and that continues to tell a compelling story. So thank you all for your participation on this. And one other little piece that I should tease that we want to do we are making a crowdsourced FI plan Excel sheet and Jason from winning Williams is a an Excel guru and he is helping just take these ideas and turn it into a reality. And currently it's just my brain trying to combine with him and come up with something. But I realize that's silly and you have awesome ideas of things that could be considered for this particular Excel sheet and the ideas that we want to move this off just a simple number game and bringing into people's lives and make it easier to comprehend and understand. So if you have an idea of something that should be included on an excel sheet that's a conversation that we're continuing on our Facebook group every single week. And if you would like to be a part of that private Facebook group you just got to choose F-I dot com slash Facebook and there's a simple opt in form that will give you access to that.
3745 - 3896 Brad Barrett All right. So we want to just do one quick travel rewards. So Laurie wrote in with a question about cruises and basically can you use travel rewards points to save on cruises. That is a very good question. I get it all the time. And the unfortunate answer is there's no fantastic way to save 100 percent of your cruise. There there just isn't it there are no top notch or top tier travel rewards points set up specifically for cruises. But that does not mean that you can't save money. That's the cool thing about travel words is there's almost always a way to save some money. Now the cards that I would recommend for cruises are what we call the fixed value cards the three most prominent versions of them are the Barclaycard arrival Plus the capital one venture and the capital one Sparke miles card. OK. So the way that these cards work is that you just simply use that credit card to pay for your quote unquote travel expense. Now that's the crucial part. A travel expense can be airfare hotel rental cars and cruises among many. That's not the entire list but cruises count as a quote unquote travel expense. So really simply you just use your credit card to pay for the cruise or best case scenario would be if you have a couple of these credit cards. You can make multiple payments or partial payments for your cruise with each card and then you can use your miles and just log in to your credit card account and redeem those miles against that travel expense and it wipes whatever portion of the expense that you have enough miles to cover just off of your credit card bill. So the cruise company doesn't know or care that you have Miles. It's irrelevant to them you're just using your credit card to pay for it. And after the fact you just log in and you redeem your miles and it wipes off a portion or or potentially all of that travel expense off your card. If you have enough miles so really that's the only significant way that I know of personally to save on cruises but between the arrival Plus the venture and the spark miles card and each spouse can can get each of those cards you can save a pretty significant amount of money on a family cruise. So yeah Laurie hopefully that helps. And for everyone out there we do have a real significant travel rewards section on our site. Just go to choose FI. Slash travel. And we have a podcast dedicated to it. We have a bunch of articles we have our our top recommended cards page so it's a it's a really solid resource for travel rewards in general.
travel, travelrewards
3896 - 3910 Jonathan Mendonsa So guys this brings us to the this particular Friday round up and as usual we always like to finish by doing our drawing and it's always for a it's currently for a copy of JL Collins book the simple path to wealth. And we have two winners this week Brad.
3910 - 3912 Brad Barrett Yeah the first winner is Chris.
3912 - 3963 Jonathan Mendonsa All right. And Chris says whenever anyone is interested in joining the community I send them to this podcast and tell them to start from the beginning on Episode 1. These guys act as the hub for the F-I community. They bring a knowledgeable guest and discuss different FI topics than they do another podcast to review what they learned. They read comments people left about the podcast. I mean these guys stumbled on or strategically designed such a good formula to discuss FI topics. I think it works for many listeners. It's like they introduce discuss review then reference back to add to it as necessary as they go. This is why it's important that you start with one and listen to them all because of this podcast and many of its contributors. I have dramatically changed the way I live and will retire. Over a decade earlier than previously planned for 2017 I'm calling it. This is the best podcast of the year. Keep up the good work gentlemen. I am high on FI. Thank you Chris. That is awesome.
3963 - 4034 Brad Barrett Yeah that's that's an amazing review. That's really amazing. Thank you. And yeah our next winner our second winner here is Amy and Amy's reviews says I've listened to every single episode of this podcast some more than once. I really appreciate how well Brad and Jonathan work together and respect each other slightly different perspectives while they're both very knowledgeable. The show also really benefits from a variety of interviews they conduct with others in the FI sphere. They have a good rapport with each other and their gas and their enthusiasm for the topic really shines through. I'm excited to see where they take this. I think this podcast has a very bright future. Keep up the great work guys. Yeah. Thank you Amy and to everyone out there. The best way that you can support us is just take one minute and leave us an iTunes review and just head over to choose fi dot com forward slash iTunes and then Ithat'll show you exactly how to. How do we review. And I like Jonathan said we will enter you into a drawing for every five reviews that we receive. Take a quick screenshot or a picture and just shoot it to us at feedback. Choose FI dotcom we'll throw your name in a drawing and we announce our winners every week on the Friday roundup. So we really really appreciate the support. It is it is the best thing you can do to support us. So thank you.
4034 - 4088 Jonathan Mendonsa And you are guys just so you know Brad sent me a link the other day right now ChooseFI. is listed as a top 100 business podcast on iTunes that blows my mind it didn't exist four months ago. It didn't exist and that is because ya'll are engaged you're telling people about it and you're benefiting from the information it's hitting you where you live. And we're glad we're able to help in some small way that we're able to dramatically decrease the time that you'll be on the hamster wheel. This upcoming Monday we have Physician on fire and he is going be expanding this conversation to include financial independence for the high income and medical professional. It's an extremely valuable conversation. There's an entirely different set of tools that they have to rely on but obviously there's also a lot of overlap and they have a different set of challenges that they face. So I am very excited. I don't think this is his first interview but I think we are one of the first to get him on board and it's going to be exciting to share this conversation with you guys so the fire's spreading my friends and we'll see you next week as we continue to go down the road less traveled.
Jonathan_Catchphrases, highincome

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