027 - Slowly Sipping Coffee

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Time Speaker Text Tags
0 - 19 Jonathan Mendonsa Alright guys you asked and we answer we went out and asked slowly sipping coffee if they'd join us on the show today. This is probably one of the best blogs that you haven't heard of. And we're super excited that Jay is joining us in the studio today to unpack the story of slowly sipping coffee. Welcome to the show guys. Brad I'm back in the studio today. How are you doing buddy.
19 - 34 Brad Barrett I'm doing really well. Yeah this should be a really good episode. We had a ton of people mentioned that they wanted us to interview Jay from slowly sipping coffee and we got him on. This should be good. I read through a bunch of his blog and it's just really interesting writing should be a good conversation for sure.
34 - 54 Jonathan Mendonsa You know one of the things is you don't know about someone until you do. And I had never heard of slowly sipping coffee and then we had three of our guests who are prolific writer saying we love these guys and I went and checked it out and it doesn't surprise me why. Fantastic writing style fantastic story and definitely someone that their message resonates with me so I'm excited that we can do this today as well. How are you doing Jay.
54 - 55 Jay - Slowly SIpping Coffee I'm doing great thanks.
55 - 63 Jonathan Mendonsa We're excited to get a chance to go through this slowly sipping coffee story. You know you're a personal finance blog not a barista blog where does that name come from.
63 - 116 Jay - Slowly SIpping Coffee Oh it was pretty funny. Thanks. First of all thanks for having me on. Yeah we actually came up with the name of our blog while we were sitting around at a Starbucks. We were sitting there thinking about a blog and well if we want to track our early retirement journey or preretirement as we were calling it back then what should we do and we have realized well it was our Friday off because we have every other Friday off or at least I still do. We are sitting there having like our morning kind of coffee dates and we realize that hey our life has got super busy crazy with both of us in these jobs and we really want to just get in some more of being able to have time and freedom to sit around and just slowly sip coffee like we are doing on that Friday morning as opposed to grab the coffee and head out the door to get to work and being at work and having to have coffee there. So that was pretty much it. The vision of what we wanted our life to be. Once we hit FI was to be able just to sit around and slowly sip coffee.
116 - 134 Jonathan Mendonsa That does sound perfect and I am the one that's probably the most guilty of guzzling it but I think I even wrote an article up on this last year like doing coffee and doing it right is one of my serious passions in this world. And Brad can confirm that for you I get a huge kick out of making the absolute perfect cup of coffee.
134 - 151 Jay - Slowly SIpping Coffee Yeah I actually read that article it was pretty interesting so it's funny because I stumbled across roasting my own coffee which you know again with the coffee name in the blog or whatnot you would think I'd be super meticulous with coffee. But I do like roasting my own. So I got a lot of what you were talking about there so resonated with me.
151 - 153 Jonathan Mendonsa Nice. Nice. Well thanks for the feedback.
153 - 168 Brad Barrett So Jay you and your wife were sitting in Starbucks talking about a blog but I'm assuming your journey to FI or you know whatever it is you may call it and we're going to talk about that later. But I'm sure that started years before. Give us the origin story of your life and your FI journey.
168 - 279 Jay - Slowly SIpping Coffee It started probably about five years before that maybe Mrs. SAAC had a rough patch to work and was just not being fulfilled in her job. Not getting any satisfaction out of it. And when she started Google in early retirement. FI how can I get out of the rat race sooner. She stumbled across a couple of blogs with Mr. Money Mustache being the most influential one for her and be in a pretty heavy numbers person and already have that retirement spreadsheet put together before she knew about any of all of this stuff. She had just started crunching numbers and seeing what it would take for us to be able to retire early. Ironically her pre retirement spreadsheet you know before she found out about early retirement already had us able to walk away at 45 if we wanted to and which I didn't believe it then. And wouldn't tell people that it's because it took a while for me to get on board with it. But after about three months of reading those blogs she started sending me some stuff. And my initial reaction was hey no way. I've already lived off 25K a year, I'm not quitting this job right now just to go do that So I don't have to work. It's not that bad for me. So it took a while for her to get me on board with it. But yeah it was a similar situation how I got on board probably about three or four years after that maybe I had also gone through a rough patch at work and had been going through her spreadsheet going through her spreadsheet and she was still projecting living off of say 50k a year. And I was just I didn't see how it was possible. And then she sent me our whole last year's spending. And I was able to see we really have lived off of that. You know it's like if you take out the daycare you take out the mortgage because we're buying the house and all of the extraneous stuff. Yeah it didn't seem like we were cramped it didn't seem like we were stingy or super budgety and I was like holy heck what can we do to speed this up. Is there anything we can do and that's when I got on board with it.
279 - 313 Jonathan Mendonsa You know two things really struck me one. I love the Miss SSC is the powerhouse behind you guys. That's amazing. I don't have a lot to add to that but I it's definitely inspiring. I also love that you guys are Excel sheet nerds you know Brad and I did this episode very recently called the pillars of FI and we probably should have included being an excel sheet nerd as a pillar of FI. We love spreadsheet. They are probably one of the sexier things in the FI community. I love looking at numbers. I love that FI. Is a function of the math and Excel proves that. So do you guys share your Excel sheets or any of the templates that you use with people on your Web site.
313 - 340 Jay - Slowly SIpping Coffee Yes actually we do have the one that we use as a template. I think it was in a December post from two years ago so maybe a 2015 December post we've got. I think it's titled something along the lines of our Christmas gift to you x or Excel spreadsheet. And we actually had some links to some other bloggers that had their Excel spreadsheets as well as kind of commingling of other bloggers we knew with the Excel spreadsheet. So we do have that on online where you can find it. Yeah.
blogger
340 - 357 Brad Barrett Yeah that's great and we'll definitely link to that in the show notes for sure so everybody can check them out. And just real quick through going back to when your wife found this originally was she keeping an Excel spreadsheet before she found Mr. Money Mustache and the other blogs. Without really the aha moment for her.
357 - 414 Jay - Slowly SIpping Coffee Oh god no no she had a spreadsheet way before probably I even came into the picture. To be honest. So her financial background and financial savvyness is years and light years above mine. So she had already gotten her spreadsheets and basically she'd started updating it. And adding stuff into it now that we both had really good oil income jobs and 401k matches and extra money she was trying to figure out what to do with it beyond just stimulating the economy. And that little bit of investing that we had been doing. And so at that point her dad had just fully retired and had a Morningstar account so she would go in there and research stuff. And our conversations would go along the lines of and thinking about investing and blah stocks or blah funds or whatever and here's the risks and here's the rewards. What do you think. I just sort of look at her and say Yep sounds good to me. It's this 100 percent trust on my end. So fortunately she's not a crook or you know.
401k, highincome, stocks
414 - 418 Jonathan Mendonsa Well she has kind of invested in the results right and needs to work for her too.
418 - 419 Jay - Slowly SIpping Coffee Yes exactly.
419 - 438 Brad Barrett So when you said a couple of minutes ago on her pre fi spreadsheet she had you retiring at 45. You're saying in her original versions of the spreadsheets before she found anybody before you supercharge any of your savings or did anything that you found on FI blogs she already knew you can retire early. I mean am I hearing that right.
savings
438 - 483 Jay - Slowly SIpping Coffee Yes. I mean I found it accidentally because she was e-mailing that around to some of our coworkers at our company and because they were wanting inputs on a how should I set up my 401k What should I invest in. What's good. And she's like oh I've got it in a spreadsheet I can send to you and send it to one of our friends so was sit in that cubicle right next to mine opened it up and literally said oh my god you guys are retiring at 45. And I said what's let's she said here on this spreadsheet that says you guys can retire at 45. And I said yeah no that's that's just some black magic you know voodoo wizardry. I wouldn't believe those numbers. But yeah they were they're saying in theory yeah we would be able to retire around that time anyway.
401k
483 - 490 Jonathan Mendonsa I love the in the slowly sipping coffee household the answer is no. It's on this. It's on the spreadsheet Jay. It's on the spreadsheet. It works trust me.
490 - 493 Jay - Slowly SIpping Coffee Yeah that's pretty much it.
493 - 510 Jonathan Mendonsa You know Jay one of the things that really resonated with me about the story that you guys were telling was your own perspective when she was sending you all these Web sites for these uber extreme minimalist and early retirement folks and just I would love to hear your particular take on how you are resistant to that. And then where you decided to go with it as well.
510 - 589 Jay - Slowly SIpping Coffee Yeah. I mean seriously a lot of my initial knee jerk reaction was that Chris Farley skit where on SNL where he's talking about the kids and doing drugs because you'll end up living in a van down by the river and I mean that's the image that popped into my head every time she's talking about living off 25 grand a year. Similar kinds of numbers. And so I mean my perspective is I came from a pretty low income household fairly poor, just you know one income three kids and I was like why in God's name do you want to go from very comfortable oil job salaries very easy job. You know we both like what we do and just walk away from that. You know in another five or 10 years or whatever it was going to be. And why would we want to scrape by and just make ends meet just so we don't have to work because it just didn't make sense to me. And it just brought back memories of when I was younger and having to worry about money and money being such a huge stressor. And will we have money for groceries. Are the lights going to get turned off. Is the water going to get turned off are we going to get those turned back on? like those were the visions dancing in my head when she first brought up f.i and we can save X amount to live off X amount but that it might be a little tight and it just did not seem to be a future I wanted any part of. To be honest.
589 - 590 Brad Barrett Can you tell us about your lightbulb moment.
590 - 662 Jay - Slowly SIpping Coffee The light bulb moment pretty much came with a series of emails back and forth between Mrs. SSC and myself and I was at my new job she was at her old job and so we did a lot of correspondence with e-mail and it essentially just went back and forth. She sent me the spreadsheet again as she does a lot and I look over it and reply to her. Yeah I just don't see how this is going to work. I mean you're say in 50 grand but I just don't see it in the spreadsheet and her reply which it typically is as oh my god what don't you see. And so it's another snippet of the spreadsheet with lots of stuff highlighted and marked out of this column is what we spend now. Now this column is our fI budget that doesn't have daycare because the kids are older doesn't have the mortgage doesn't have all of the convenience stuff that we pay for now and at the bottom of that is the number that we would it would take to live off of. And I don't know why I hadn't seen it it's the same spreadsheet she'd been sending me for years but for whatever reason it just clicked at that point and I was like oh my god how has it taken me almost six years before I've gotten on board with this or realized oh yeah this is doable.
662 - 671 Jonathan Mendonsa Because she is already using the highlighter. I Mean that's the critical part and not just one color highlighter you've got to use multiples. And then it helps when you circle it as well. The key point.
671 - 677 Jay - Slowly SIpping Coffee Yes. Big arrows pointing to kind of a smack in the forehead sort of look that went along with it.
677 - 684 Jonathan Mendonsa So now she's listening to this thinking. Yes finally somebody gets it.
684 - 715 Brad Barrett So Jay took your Wife six years of trying to beat this into your brain for you to actually get it. Six years. And so she found the FI blogs she had been on this journey and what goes on. Not to be stupid but what goes on in the household. I'm assuming she does the finances. She obviously knows the spreadsheet. Is it just OK we're going on our merry way and she's going pedal to the metal towards FI. And I don't even know how to ask the question honestly because I'm just trying to understand the mindset and the conversations within the household.
mindset
715 - 923 Jay - Slowly SIpping Coffee So the conversations at the beginning were fairly minimal because again it started with me with that initial spreadsheet. So I knew she's investing money in the background beyond our 401 Ks and I was fine with that and pretty much trusted. You know you're making the right choices. I'm pretty aggressive. So unless you're taking it to Vegas. Anything short of that I'm fine with so I don't get that aggressive with it. But whatever else. Sure. And not so much in bonds like let's go more growth stuff. So we were both on the page same page there. But beyond that we didn't really I mean honestly we really didn't discuss a lot of my only contribution towards it at the beginning was coming in with a mountain of debt. And so she started trying to get all of that debt like 60 grand or so in school loans and about 15 16 18 grand or so of credit card debt. And she wanted that all paid off. As soon as possible. So she was taking a lot of our money in the first year or two and just throwing it towards that. So at the very beginning it's not like we started off with our full salaries just to run around and dance around and dollar bills kind of stuff. It was not fairly tight budget but a little restrictive budgets. And so once those got paid off all of a sudden we freed up all of this cash to be able to invest. And she just started putting that towards investments. And the other big thing was our credit card bill like we noticed it had been pretty high every month. And sure it got paid off every time but it was still higher than we wanted it to be. And so we just did a little money challenge of hey can we cut our credit card bill by 10 percent this month. I mean that's kind of ridiculous but sure we shot for 10 percent and with almost no effort we got almost 25 percent. And so then we decided hey what if we cut it by 50 percent. And we decided that the next month we hit 50 percent pretty easily and it was seriously just by being more conscious of what we were spending stuff on and asking Do I want this or do I need this and to put it into financial terms that essentially freed up like two grand a month that we had just been pissing away and eating out going to target because we're bored go into other stores because we're bored and not questioning anything that gets tossed into the cart. It's kind of nauseating thinking about it how much we are just frittering away on nothing. And so for us that freed up a whole nother 24 grand a year that we are able to start investing outside our 401Ks those were more of the conversations that we had not necessarily Oh this is going to get us further down the road to FI. But more of hey what can we do to cut spending. And we have allowances. So it was hey what if our allowances cover first it went to allowances covered pretty much anything that's specific to just me or just Mrs. SSC. So that's for instance eating out. If I go out to eat for lunch or at work or anything that would come from the allowance if I went to go pick up some homebrew supplies that would come from my allowance. Things like that if I went to buy a videogame allowance. So first they were covering things like that and then the scope started to widen to say work clothes because Mrs. SSC was buying a lot of work clothes at that time and thought of this is coming from the regular budget. You don't really buy a lot of work clothes. Maybe we should put that in there too. And so it was more a lot of conversations related to just spending and day to day kind of spending as opposed to a whole lot of conversations about investing and trying to hit this target goal of early retirement.
401k, college-loans, debt
923 - 948 Brad Barrett Yeah that makes sense too. Of that roughly $2000 a month and you're going to cut out how much of that it sounds like both of you were were in on this spending so it wasn't just you or just Mrs. SSC. Can you give us some breakdown like how much of it was just errant items that target or eating out or you know do you have any kind of breakdown of how you cut out. Twenty four thousand dollars a year in just random frivolous spending essentially.
948 - 1023 Jay - Slowly SIpping Coffee Eating out played a big part in it. I mean I would say probably we have that overall number going out to eat was at least 30 40 percent of that I would say and reach still cooked at home a lot . We made a lot of meals at home but it was easy just to go out and grab appetizers on the weekends or grab drinks or go out with friends and grab something to eat if we didn't feel like cooking at night. That was a big part of it. The other one we realized was moving from Chicago and Denver respectively down to Louisiana. We got brutal heat wave of the Gulf Coast summer and we realized that it's kind of like the opposite where down there you can't go outside for about three months four months of the year but that's just in the summer. So our thoughts became to go to Target and wander around if we were bored or to go to world markets or places like that and yeah we would just not really questioning this we through random stuff into the cards. And when you do that once or twice a week and spend a couple of hundred bucks a week it adds up quickly. Costco Oh my God. That was another one that is super. We couldn't go into that store and walk out with under three hundred dollar bill. Almost every time and it would just be random stuff. Nothing specific. Sometimes salon stuff sometimes food stuff but yeah that was another huge huge one.
cooking, mealplan
1023 - 1045 Jonathan Mendonsa That's awesome. And it hits me where I live dude. You know I think Costco is an amazing way to save money but wow you know if you if you go into it with the wrong perspective you're going to be thrown hundred dollar bills out the window. It's like Christmas every day all day you're always finding something new. And so there's definitely a fine line there between capturing the discounts the real savings that they offer and not hemorrhaging unnecessary dollars.
savings
1045 - 1060 Jay - Slowly SIpping Coffee Oh totally agree. It can be it can be a very great place to shop and a very great way to save money but you definitely have to be strategic about it. Have a list when you go in and not just feel like oh shiny. Let's put it in the carts. So yeah.
1060 - 1102 Jonathan Mendonsa One of the real dangers that I think that I fall into and I think that you fall into. I know you've talked about is this idea of lifestyle creep. So you've bought into the idea of financial independence you've bought into the idea of capturing this 50 percent savings rate and just destroying your recurring expenses and now you're to place we have all this discretionary money we haven't actually made the choice to assign those numbers to a place like assign it to VTSAX or some sort of investment fund. And so you just have it hanging out longer and then over time you say I deserve it we've already made all these really big moves and this discretionary spending ends up getting captured at these fun things that you do that now you have more discretionary spending but because you haven't assigned it to investment to your future is just getting sucked up in the now.
indexfunds, savings
1102 - 1128 Jay - Slowly SIpping Coffee Yes. So I mean that's I totally agree. Because going back to the type of conversations around our household is centered on like you said cutting out our current spending trying to get it down to reasonable levels. And while I wasn't actively say lets put this in VTSAX or anything like that fortunately in the background Mrs. SSC wasn't letting those piles of money just sit around every month and get one or two percent interest in the savings at the bank.
indexfunds, savings
1128 - 1131 Jonathan Mendonsa Dude she is like a super hero. I mean you're just documenting her awesomeness.
1131 - 1146 Jay - Slowly SIpping Coffee Oh no I swear I you know it's like a joke about that she's the best financial decision I've ever made in my life. But good Lord if anybody has as a CFO I mean that's she's essentially the CFO of our household and yeah there couldn't be a better one to run it.
1146 - 1160 Jonathan Mendonsa So you know you guys have this really cool concept that you talk about and you wrote an article which we'll link to in the show. It's called Goodbye fire Hello FFLC so fully funded lifestyle change. I'd love to hear you talk about that. You know maybe in context.
FFLC
1160 - 1352 Jay - Slowly SIpping Coffee Yeah that whole fully funded lifestyle change again ties back into the slowly sipping coffee blog name in the sense that it may be a year or six months into the writing for the blog we realized yeah we're both kind of too busy and she is definitely more type-A. I'm more of I can be fine with retirement and finding something to keep myself busy but we realize we don't necessarily want to quit work just for the sake of quitting work. We just want a lifestyle change because the life that we created for ourselves is just ways too hectic and not sustainable. And one of the things that we realized was easy for us to be able to go into this lifestyle change and look at it like that versus retirement is unlike a lot of our coworkers who have two oil salaries come in and we hadn't gotten trapped by lifestyle creep. So where we have $60000 cars that aren't paid off well we still don't have $60000 cars but we don't have this recurring bills every month that we don't have all of the trappings that come along which typically come along with that sort of those sorts of incomes. I mean we didn't have a pool at our house. We don't have the latest greatest smartphones or the most super high mega data plan or any of that kind of stuff. I mean yeah we get along and we exist and have a great life and it's really comfortable. But it's just by again being conscious with our spending and realing that stuff and we are able to realize that we really don't need a whole lot of money to live off every year. So it's like being able to avoid that lifestyle creep that comes along with two oil salaries or any salary. I mean good grief I had lifestyle creep when I went from making 30 grand a year to 50 grand a year. I wasn't any richer by any means because I just spent it the more it came in. And it's so easy to see that happening that we realize what we don't have that we're comfortable we like what we have. We just want that lifestyle change or we can get a lot more freedom and we can have a lot more time to spend with the kids. And so that's what we started looking into. And then coincidentally oil industry took a downturn and all of a sudden both of us were looking at layoffs and talk about change in your perspective. I mean there for a while it was the moderately funded lifestyle change as opposed to a fully funded because it's like well on the one hand if we both get laid off I was sort of kind of I wouldn't have been sad about it because It'd be a kick in the butt to be like. All right. Well let's start this. It's not going to be at the level we wanted but I know we'll make it work because we're both pretty smart people and we can figure something out. But I was kind of on the fence if we had both gotten laid off or not. But fortunately that didn't happen and we didn't have to go down that road so but it did take the lifestyle change mentality into overdrive because we realized one we're fine living in a smaller efficient practical House versus the monstrosity that we landed in Houston. Two me much rather has a lot more freedom and time to get to spend with our kids and with each other as opposed to working 10 11 hour days. Once you add in that commutes having the kids in daycare or school the whole time or having them with some kind of nanny afterwards because again we'd be working the longer days. So yeah that was what we're started shooting for as opposed to say airquote early retirement.
1352 - 1413 Jonathan Mendonsa Yeah I love that. You know I wonder if choose FFLC is available as a domain name. I don't think it has quite the same ring as choose FI but the FFLC really resonates with me and I think FI is kind of this an umbrella term that contains financial independence that contains FFLC it contains. And i love that you can choose what it looks like but FFLC is very empowering. It kind of takes the pressure off you know it doesn't. You don't have to have a perfect number you know a lot of people get really fussed about is it 4 percent or is it 3 percent. Is the money going to run out. If I never work another day and I'm only relying on just my withdrawals. But FFLC I think does kind of change the metric and it talks more about wow because of the choice that you made because you decided to fully fund this lifestyle change if Miss SSC were to get laid off how crazy and awesome is that. Only in this FI community that we're in. Are you suddenly like Wow this might be an opportunity where we actually get to pull the trigger on this thing and actually try it as opposed to you know your world is over. It's the end the end of all.
FFLC
1413 - 1497 Jay - Slowly SIpping Coffee I can attest that of all the people that were going through the layoffs we were probably the two least stressed about it because yeah I mean like you said we'd set up our lifestyle where it's like if we lost her income we'd will still be fine on my income. And I know couples that were just sweating it because they didn't get the bonus so one year so they had to come up with some other way to pay property taxes because they don't have an emergency fund because they just spend everything as soon as it comes in. And a lot of those kinds of couples. Yeah they were super stressed because everything cost a lot of money and their lifestyle that they created is just it needs both of those incomes. And so fortunately ours was not necessarily in that point not a backup plan. Well we'll pull the ripcord put the house up for sale and start looking for a job and even if it's only 30000 $40000 a year job we've got years of data on a spreadsheet that says hey we can make that work especially if it's in a cheaper cost of living area and yeah it was really empowering and still is to know that well if everything just goes to crap tomorrow if jobs get lost or things happen it's not the end of the world for us. Yes it would suck. Yes it would create some hard times but it is a really nice feeling to know that hey we're going to come out on top and we'll be good and we've got multiple plans to choose from and act if something like that came down.
emergencyfunds, tax
1497 - 1536 Brad Barrett Hey Jay So while we're on the topic of talking about friends and family in the oil industry and you're talking to these potential layoffs I want to actually go back to something you mentioned about you know maybe 15 minutes ago where your wife sent the spreadsheet to your coworkers and friends and from the sound of it that had your real numbers in it because or at least an approximation of it because they said oh you can retire in 45. So I guess my larger question is have you spoken about fi to your family and friends and what do they think about it. Do you have you been able to convert anybody is that even a goal. Do people know about the Web site. You know I'm just endlessly curious about how it's impacted your real life and your real life relationships.
families, relationships
1536 - 1575 Jay - Slowly SIpping Coffee I haven't necessarily tried to convert anybody but Mrs. S. S.C's family knows about our plan and is fairly intimate with our plan and at least for the first couple of years they were a bit more harsh on it than I was especially her dad because he had recently just retired and he just couldn't. It's from the old school mentality of no. You retire closer to 60 65. Not necessarily anything before 50. And in your early 40s. No. No. That's though you guys are accounting for everything. But I have to say after seeing in again the spreadsheet that.
families
1575 - 1577 Jonathan Mendonsa No one could resist the spreadsheet.
1577 - 1641 Jay - Slowly SIpping Coffee I know. Well and especially he is an engineer and so he even more so relates to spreadsheets. But you know it's something that we openly discuss with those guys and even our most recent foray into purchasing a plot of land out by hill country. They came up to visit us and they are even on board with that and they've gotten really supportive. Once it's like they see the numbers and they realize how little we do live off of every year. And yeah I mean it's hard to argue about that number. So he's gone from being staunchly against it to really for it especially with us getting to have more time with the kids because he worked a whole 50 hour weeks or that sort of thing and just wasn't around as much as he wanted to be with his kids for his job. So yeah he sees that aspect of it as being a real huge plus as far as coworkers and other friends or colleagues some of our close friends know about our plans in a very vague sense that you know we're probably going to check out another three to five years that we don't necessarily say oh yeah we're hoping for two years you know kind of a thing.
1641 - 1649 Jonathan Mendonsa It definitely does help to soften it around the edges. I can understand the reluctance to just say yeah I could be done in six months or I could be done in a year.
1649 - 1701 Jay - Slowly SIpping Coffee Yes. Yes exactly. Because they can come off bragging sounding very easily you know and it's not meant to be like that at all. One of the things is I mentor some people at work and I talk to a lot of the really the newer hires that are late 20s mid 20s and the one thing I do is just try to keep impressing upon them like save as much as you can now keep your lifestyle costs down keep that kind of spending down and put it into other investments because you know I bring up with them in 15 years. Yeah you love your job now but in 15 years maybe you're going to get burnt out on it and maybe you'd rather go work at like animal shelter because you're really passionate about that or maybe you'd rather go work at any other thing that you get more satisfaction out of. And if you can start saving and putting stuff aside now you can create that freedom for yourself to get to go do something like that.
savings
1701 - 1723 Jonathan Mendonsa I am like passionate about what you just said. And because of that I want to hop in what is so powerful about that is you may be the only voice in that person's life that's saying anything close to that at all. You know every other influence you have says you need to get this this middle class lifestyle which has the nice house and it has the newer car. And you know and you deserve it.
1723 - 1757 Jay - Slowly SIpping Coffee Yes. Yeah. I mean again. Especially come in from that same mentality of this is all this stuff I couldn't have when I was a kid and I see that a lot with these guys and I just try to just trade to remind you at some point. You're going to want to do something else besides work in this job. And at some point you might want to live outside of Houston or another oil town and you've got the freedom you've got the opportunity to set up your life however you want it to turn out but you have to start thinking about it now because otherwise in 10 years you're going to wake up and be like oh my gosh how can I get out of this. And you'll be 10 years behind.
1757 - 1771 Brad Barrett So Jay do you think any of your mentees have actually taken that to heart and have started on any kind of FI path like have you introduce them by any chance to like a Mr. Money Mustache sure. Any of these Web sites or is it just you talking about it generally.
1771 - 1871 Jay - Slowly SIpping Coffee No actually it's pretty funny. I've sent out lists and links to all kinds of different. Usually it starts with trying to introduce some to what is an index fund or what is a mutual fund because most of the time I get these shocked horrified looks that no finance is way above my head. And my take is hey if I can figure it out anybody can figure it out because I am not fiscally minded at all. And it's actually way easier than you would think. And so I've got lists. A Word document essentially with a bunch of links to yes different sites like I wouldn't say Mr. Money Mustache is one that I send out because he's so extreme. I don't want it to have the effect it did on me and scare them off . But like one of my favorite articles that I email out says one that Paul apan wrote called I don't know how to invest and I'm afraid of making expensive mistakes. And essentially she goes through this whole article and explains this is what a 401k is you know but she puts it in terms of like think of it as a tea cup or a coffee cup. That's one of the articles that I send out a lot to how to create just a simple three fund couch potato of a show and one of my mentees here sharebuilder and this when you can put a hundred dollars every two weeks from every paycheck automatically in there and then you can take that and you can buy the same sorts of index funds or mutual funds or ETF's from this account that you don't have to have a minimum if you can only afford a quarter of a share. You can buy a quarter of a share if you can only afford 10 shares at a time. You can do that and you don't have to save up a huge chunk. So it's like also trying to go down those paths. There are other ways to live life. besides this work until you're 60 and then retire kind of mentality for.
401k, indexfunds
1871 - 1885 Brad Barrett Jay for People getting started on the FI path who are out there in the audience listening. That document sounds fantastic. Do you have that as a giveaway on your site. And if not do you think you could share with us so that we could include it in the show notes of this episode.
1885 - 1889 Jay - Slowly SIpping Coffee Sure. Yeah I can I'll find that and send that over to you guys in e-mail.
1889 - 1900 Brad Barrett OK wonderful. So yes so everybody listening to this we'll have it. If you head to the show notes for this episode to choose FI dot com. We'll have this as a download it sounds like a really valuable valuable document.
1900 - 1947 Jonathan Mendonsa And in general Guys if you guys have just our audience if you all have trouble getting like if you want to get the show notes in your e-mails as soon as it's released just in general you can subscribe to our email list. Just text ChooseFI That's one word 4 4 2 2 2 and then as soon as this episode or future episodes are released if you are on that list you'll get an e-mail prompt just letting you know and then you'll get access to all these all these different tools. So J one of the things that really strikes me and I thought you did a wonderful job of laying out is you build this FI plan and then depending on your determined risk tolerance you come up with a strategy that may adjust based on what your actual results are. Did I say that close to correctly and can you maybe guide us through your thought process or through Mrs. SSC's thought process on how to balance risk to to a FI plan.
1947 - 2173 Jay - Slowly SIpping Coffee Sure. You know it's funny when you're talking about the 3 percent or 4 percent or that sort of thing because just last week I had the same conversation with her you know regarding risk and regarding that and I realize oh god I'm more driven by hey how do our numbers compare to a 4 percent rule and this 3 percent is three and a half something along those lines. And she approaches it strictly from numbers because they said if he ever run that you know what what we're said in that year and she's like you know why do I care. It's just a number. It could change some years. It might be 7 percent some years it might be 2 percent. But I've got that off guilt's in there and it all works out regardless of what it is. And they have made her go in and add another column so I could see because I realize my risk tolerance is more pinned say around a 4 percent rule. And for me it was really comfort in seeing that. You for 85 90 percent of the years. We're at three three and a half percent withdrawal rates. However she doesn't really give a flip about it because she just looks at the numbers and wants to make sure it all works out well in the end. And so like from a risk looking at our risks. The biggest thing that changed kind of our numbers was initially Mrs. SSC loves running C fire sim and fire cow and see in those projections. And granted there are historical. It doesn't show anything forward or whatnot. But for her it gives her a nice comfortable warm fuzzy to see that that's where hitting I say 100 percent or 98 percent. And one of the big drivers of getting our number changed and our years moved up was me stumbling across Mr. Money Mustache forum talking about 80 percent is probably just as probable as 90 percent. And they were just discussing back and forth. Who cares if it's 80 versus 90 or 85 versus 90 year white target 90 percent success rates because that 10 percent could happen and it could still be a failure. You know and it was more driven of the first five to 10 years what you do with your money has more to do with it than whatever See fire sim spits out as a. Success rates. And so when we started loosening the limits and the upper limits and lower limits and looking at it it's more of OK we probably won't need less than let's say 35 that year. And we don't when they go above pulling out say 70 grand a year and you start putting those caps on it and loosening things up in those regards. Yeah. It's like all of the sudden even though we're airing more risky or we have say an 80 85 percent chance of or 85 to 90 versus Mrs. SSC you feel more comfortable with a 95 to 100. We don't really care if it was moved down or where they land in that sense. And so I think it's just a lot of it being looking at this stuff and dealing with this stuff so much and kind of talking about it more around the household and what our plans are like with this job and we move out to say Canyon Lake. I'm not going to get the same type of job but I'll probably find some kind of a job. And you know it's like even if I can find something that it just isn't $400 a month that covers allowances which is a huge chunk of our budget I'd be like 15 percent of our yearly budget. If I could just find an odd job that did something like that. So taking that into account really lowered our fear of this whole plan failing really. And it's like maybe that increase there risk with it and that's OK we're not saving We're now at work in two or three more years just so we can have an extra hundred thousand or so on top of our pile. Because in the long run that could disappear with like one cancer scare or with one drop in the stock market or like it or not. If we started looking at that and it's like it just doesn't make sense. Once we hit a certain point to keep working just to add to it.
2173 - 2218 Jonathan Mendonsa I love that bridleway are putting ourselves in a position where we get a lot of enthusiasm we get a lot of great feedback but we also get a lot of fear. You know people that are worried about that 1 percent that 5 percent that 10 percent chance that it doesn't work and you know Miss SSC have has moved you guys to a totally different framework where you have a 90 percent chance of success plus. And if it doesn't work you guys have got a strategy to balance that out. And so is that a 5 percent chance is that 10 percent chance is that 1 percent chance. Keeping you in the workforce for an extra 10 years. That sounds like a pretty poor tradeoff. And frankly J We love talking to you. But right is it just me or does miss SSC sound like the coolest person in the world. I think she should be on the Mount Rushmore of fire.
2218 - 2226 Brad Barrett Yeah. I think we should add her. She sounds amazing. I really want to. Hopefully we can get you guys back on at some point in and get her on the podcast as well.
2226 - 2275 Jay - Slowly SIpping Coffee No I think that would be great because she drove home that exact points at me three weeks ago when we were discussing the home building and you know size of it and all of that. And I said if I just worked like two more years we could have X more amounts saved and put away on top of our number. And she gives me this look like I don't know like a chimp looking at a banana or something like what are you thinking. And so she again just goes back to numbers and says look you're going to be talking about two more years and you're only going up a little bit. More savings on top of the overall savings. The tradeoff isn't worth it like it doesn't pay out to just keep work and just because of some fear that's oh my god this plan won't work. And yeah it was you know maybe an hour or two of discussion and at the end of it I'm like 2019 barring some nuclear holocaust I'm good to go.
savings
2275 - 2279 Brad Barrett But it's so awesome. Is there anything out that you just want to talk about generally.
2279 - 2361 Jay - Slowly SIpping Coffee The other the only other thing that I pretty much try to drive home is that there are so many people in the FI community or that are new to it that find oh well it's easy for you guys to do this because you both made six figure salaries or because you're an I.T. guy and you make six figure salary or everybody that's doing this started off with a six figure salary. But the main reason that we did this and were able to do this was not because of our salary it was because of the fact that we cut out all of this just frittered away discretionary spending and we reeled in our lifestyle creep and we said investing and having some money to invest is more important to us than eating out two or three times a week and it's more important to us then going to target and just buying stuff because we can once or twice a week and those little decisions add up to having a lot of more income to invest so that we are able to get to this point easier and I mean for instance Mrs. SSC able to take a teaching job where she took a six figure cut in hersalary. That is such a nice freedom for our family because our whole schedule has changed and opened up and become so much greater that I wouldn't if we had to go back to how it was it's not worth that six figures to head back into that equation. So it's you can do this and you can get to this point without having a six figure salary. So don't be scared off by that.
2361 - 2390 Brad Barrett Very cool. You know that's really powerful and insightful and I think that it adds a depth and just a great perspective and a balance to really this framework that we're building. So you guys are doing some really cool stuff over there and you know we're giving Miss SSC a lot of credit. But you're turning these ideas that she has into stories. You're moving them off the Excel sheet and really into people's lives. And I think there's some power there so we're excited that we got a chance to do this with you and now we're excited to introduce you to the hotseat. You ready for this Buddy.
2390 - 2392 Jay - Slowly SIpping Coffee Definitely. Let's do it.
2392 - 2397 Jonathan Mendonsa Let's do it.
2397 - 2424 Speaker In a world drowning in debt and rampant consumption. Trapped by the chains of lifestyle inflation. These questions highlight the secrets of those who are broken free. Welcome to the choose F-I hot seat.
2424 - 2427 Jonathan Mendonsa We try to go big or go home. Jay were you ready for that.
2427 - 2427 Jay - Slowly SIpping Coffee Yes.
2427 - 2433 Brad Barrett Alright Jay So question number one your favorite blog is not your own.
hotseat-blog
2433 - 2464 Jay - Slowly SIpping Coffee I have to say this be a toss up between fifteen hundred days and our next life. Mainly because neither one really delves into finance and they do more storytelling or philosophical type questions or that sort of thing as opposed to say like an early retirement now which I also love that one that it's very heavy and that's where I go when I need a dose of finances or something along those lines. But yeah I definitely like the next life because it's more philosophical thought provoking questions still related to Fi.
2464 - 2473 Brad Barrett But you know what's funny is actually while we're recording this podcast someone just sent us an e-mail saying you really need to get our next life on the podcast. That's very very timely.
2473 - 2475 Jay - Slowly SIpping Coffee I would second that so.
2475 - 2477 Brad Barrett It sounds like a future guest for sure.
2477 - 2485 Jonathan Mendonsa Alright Question number two your favorite article now we go back and forth. This going to be one of your own or it can be one somewhere else that really had an impact on you.
hotseat-post
2485 - 2509 Jay - Slowly SIpping Coffee I have to say though when I mentioned earlier is definitely the one that has had the most impact on me as well of an article. I don't know how to invest. And I'm afraid of making expensive mistakes because it's just laid out really well and you know when I read that I was already past that point. But it struck me I just kept that link and that's what I send out to other people that are just getting into investing. So that's definitely one of the favorites.
2509 - 2539 Jonathan Mendonsa You don't actually want to take a second and plug Paula. Some people do something so unique and have their own style that's so unique that you just can't help but just stare at it. And I would say you know money mustache has a very very unique style right. But Paula panned her writing. I've never seen anything like it. Just as you're about to check out she grabs you back you know and she could have you in for a 5000 word article and she is an amazing writer and yeah absolutely almost anything she produces I will take the time to just to spend five minutes and read it because it's going to be good.
2539 - 2551 Jay - Slowly SIpping Coffee Yes. And you know it's funny. I'm not into real estate investing don't want to get into it at all. So I hadn't really ever read much of her stuff but that article. I keep it I send it out. I refer people to it a lot so.
2551 - 2554 Brad Barrett All right. Question number three your favorite life hack.
hotseat-lifehack
2554 - 2582 Jay - Slowly SIpping Coffee And to say this would be a toss up between roast and my own coffee or home brewing. I mean they're both. I like the coffee one because you know besides that it saves money. You can get five pounds at a time and you can change the roast and all that sort of thing. I mean you can have this fresh issue it's pretty much any time. Or possibly the homebrewing but I'd say from a life hack sort of thing roasting my own coffee save some money that way and getting really good quality coffee. It's got to be the best thing and I've stumbled across so far.
2582 - 2586 Jonathan Mendonsa All right. Jay. Question number four your biggest financial mistake.
hotseat-mistake
2586 - 2624 Jay - Slowly SIpping Coffee There's so many to choose from. I don't know where to start. But I would have to say probably the biggest financial mistake for me is cashing out a 401K just for no good reason. I just thought oh I could use this money and oh I calculated that no I still him out ahead versus what they were then even after the penalties and all of that. So in my mind it was a win win. And then again many years later Mrs. SSC. points out. Yes. That if you hadn't cashed it out it would be worth about 60 grand or so by the time we could access it which would be another year of fire. So it's the weight of this.
401k
2624 - 2630 Jonathan Mendonsa Yeah I would say in the Fi community that might be one of the seven deadly sins unless you're doing it in the context of a roth conversion.
roth
2630 - 2638 Jay - Slowly SIpping Coffee Yeah I didn't even really need it for anything. I was smitten. You know it's just like I said I'll take the money.
2638 - 2655 Jonathan Mendonsa That's funny that actually reminds me of one of my first jobs I had when I finished and I was probably only 18 years old and didn't have any idea of FI or fire or financial planningor anything. I cashed out one to I think it was only twelve hundred dollars from this time at this job but I cashed out one too and that's funny. It was a long time ago.
2655 - 2662 Brad Barrett Alright Jay The advice you would give your younger self and this has to be other than marrying Mrs. SSC which I think is a slam dunk.
hotseat-advice
2662 - 2699 Jay - Slowly SIpping Coffee Yes. Yes. Besides that I would say I probably would say I would have to try and convince myself to not spend more than I earn because remember all of that credit card debt I came into the marriage with and yeah quit treating student loans is like a life supplement infusion and that comes around every semester because again it gets back to spending more than I earn. But I take max out student loans every year get just use that as though this will help cover if I want to go out at night or anything along those lines, not thinking I'm going to have to pay this back at some point. So yeah I didn't do myself any favors. Let's just say that.
college-loans, debt
2699 - 2718 Jonathan Mendonsa I'm right there with you and we are the same tragedy that was a lost decade for both of us. But I'm glad to know that someone was able to get you back on track and you guys are just crushing it now so you know thanks for sharing this. This little piece your world with us. Thanks for taking the time to write it all down. And how can our community get in touch with the guys if they want to see and check out some of the work they've been doing over the last year or two.
2719 - 2728 Jay - Slowly SIpping Coffee We have our blog over at slowly sipping coffee dotcom and all of our well there you can contact us if you have any more specific questions with email.
2728 - 2732 Jonathan Mendonsa Jay We'll let you get out of the rain. And thanks so much for taking time out of your morning to do this with us.
2732 - 2735 Jay - Slowly SIpping Coffee Thanks for having me on. It's been really awesome and I really appreciate it.
2735 - 2808 Jonathan Mendonsa Yeah absolutely. Absolutely. Slowly sipping coffee was a guest that we had. By popular demand and at the end of this episode I hope you see why. And the great thing anybody that wants to share their specific story. Don't be afraid. Oh well it's all been done. There's no room for me. Yes there absolutely is room for you if you have a story that you want to share if you've made a single radical choice or you're considering making a radical choice. There is room for you in this space. And what I love about it what they've created one. I love everything about Miss SSC. She really is a game changer Two. I love their framework that they built with a fully funded lifestyle choice. Like I said we're getting all these e-mails from people asking us about the 3 percent versus the 4 percent. And the point is you guys are saving 50 percent of your income you're living for a fraction of the cost and you're putting the difference towards buying your freedom. You're going to be OK. It's going to be OK. And hopefully that you enjoy just getting yet another person's perspective on this. And it was an engaging perspective and we are excited to share it with you guys so your questions your Feedback feedback. at Choose FI dot com if you want to get on our email list. Please go ahead. Go to choose FI dot come forward slash subscribe and you know the fire spreading my friends so we'll see you next time. As we continue to go down the road less traveled.
Jonathan_Catchphrases, savings
2808 - 2810 Speaker You've been listening to choose fi radio podcast.

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