031R - The Friday Roundup

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Transcript

Time Speaker Text Tags
1 - 21 Jonathan Mendonsa OK we're back so we're recording on Tuesday morning for our Friday episode. And as usual just a way for us to address thoughts from our community figure out maybe what we missed what we can explain better and also highlight the thoughts of the Fi community as it adds value. So I have Brad here with me in the studio. Hi Brad how are you doing today.
21 - 31 Brad Barrett Hey Jonathan I'm doing really well. Seems like summer is in full effect here in Richmond. I know where going to hit I think 100 degrees the next three days so it should be nice and warm.
31 - 39 Jonathan Mendonsa We're seven months into 2017. This year is just flying by. I guess you have some vacations coming up here pretty soon you're going to take a trip in August.
39 - 62 Brad Barrett Yeah we're going early August actually taking this random journey through New York State which is a departure for us. We're basically just driving so we're driving from Richmond up to Long Island to visit our family for a week and then driving up through upstate New York stopping at a lake house and visit Lawrence College and then actually over to Niagara Falls which should be a lot of fun.
college, families
62 - 64 Jonathan Mendonsa Are you doing this in the Honda Civic with your two kids.
64 - 78 Brad Barrett Haha that would be very impressive and FI like but no we're doing it. in the Toyota Highlander which is also a 2003's so I don't feel so bad. But yeah that would be would be a pretty car.
78 - 123 Jonathan Mendonsa Please include me on that. Instagram's right. I really see that in our community. A lot of people have talked about slow travel and this idea of just taking a little bit more time and focusing on activities rather than just expenses. And I love to get a chance to see what other people are doing because everybody has done these uniquely awesome things that when you hear about you're like wow I really want to try that. And when you put yourself in a position where you have more time you suddenly feel like you're more likely to try new and interesting stuff that other people have modeled. So you're not having to find out whether or not it's awesome they've already proven it. Now you're just deciding whether or not you want to take some of your extra time and try it.
travel
123 - 158 Brad Barrett Yeah that makes sense. And this really is kind of slow travel esque trip. We're not trying to do too much we're going to four different locations in two weeks and it should just be a nice relaxing family trip. Nothing too adventurous other than I guess seeing Niagara Falls and going to Canada which would be the first time my kids ever leave the country. I guess technically we thought of course with all of our million plus miles that we have left over from all of our travel rewards stuff. We of course thought about going to Europe or South America or something but we just kind of decided that this would just be a nice chilled trip. So it should be fun.
families, travel, travelrewards
158 - 185 Jonathan Mendonsa I do think it is going to pose some interesting situations for our audience and for our podcast because obviously me and you both think that spending time with family and doing these types of trips are very important. But we are now just now really transitioning to the point where we're really featuring this podcast as a full time thing for both of us and I don't know if we've necessarily figured out how vacations that we're going to want to take or going to work into those podcast so we're definitely going have to jump through some hoops to figure it all out.
families
185 - 229 Brad Barrett Yeah I guess for the audience this is a little behind the scenes look and when Jonathan says full time I mean we're spending 20 to 40 hours on this podcast every single week which is kind of crazy when I when I actually add up all the time. But yeah I mean you and I have been frantically trying to figure out how we're going to get all the Monday episodes ready through basically like August 21st I think August 20th but then goodness like the roundups I'm not 100 percent sure how that's going to work out. But rest assured everyone out there we will we will get a round up in some way shape or form out each of those weeks. But I don't think you and I really thought through it like a travel schedule or like what a FI lifestyle looks like when you're publishing I guess 104 podcasts a year. You know.
travel
229 - 232 Jonathan Mendonsa We're going to make it work.
232 - 236 Brad Barrett It's so much fun. I will deal with that but that is it is pretty tough.
236 - 250 Jonathan Mendonsa Mondays seem easy enough because we just come up with a really awesome concept and then we explore and we record it. But when you're doing a live show like the Friday round up that requires that you check in each week there is definitely a strategic aspect to that that we're going to have to work out.
250 - 255 Brad Barrett Yeah. Here's hoping for some Wi-Fi in a hotel right.
255 - 329 Jonathan Mendonsa All right. Let's go ahead and do this. This week we went back and essentially did part two of the travel rewards series. We focused on essentially what happens after you finish the chase gauntlet where we encourage anybody that's interested in travel rewards to start. If you want more information on that you can go to choose FI dot com slash 0 0 9 or just listen to the ninth episode of the podcast that will walk you through beginning to end everything you need to know to understand and execute on travel rewards. But at some point you come to the end of that and you're trying to figure out what to do next. And the Monday episode that we featured really explored what comes after that and also gives you a prototype to look at with executing a specific trip and a very valuable trip for most families by teaching you how to go to Disney for free. Which as Brad said like they're not whether or not you think it's any value whether or not you think it's overcommercialized at some point if you have kids it's going to be on teh plate the play that you can say no but they're going to be asking for it. So if you can do it for free and put this little tool in your back pocket I think it changes the equation and makes it more possible makes it easier to do this. And even aside from that just as a standalone It was a great way to look at a specific trip and also as an extension of what to do next. It gave us a chance to explore some of these additional cards. Right Brad.
families, travelrewards
329 - 453 Brad Barrett Yeah that's a good summary for sure. And while we focus on Disney this really was a larger concept of what to do with your strategy going forward essentially. And in speaking with my wife Laura about the episode since she looks at this as a fan of the show and someone who's just listening for the first time she wanted me to kind of clarify a little bit that when I said that we're stopping opening credit cards. I just wanted to clarify that we didn't just open up a few Chase credit cards and then just stop. Essentially we had been doing this for years and had really gone through many different cards so I think we earned at last count in total about two and a half million miles and points between the two of us. So I mean that's an astronomical figure it seems still for me hard to believe but when you have these 50000 point bonuses and get extra bonus miles and all sorts of different things. Two and a half million miles is not inconceivable over a five to seven year period. So I definitely didn't want to give up the impression that we just opened up a handful of chase cards and then we shut it down. We like I had mentioned on the episode there are all these other really top tier cards from the other banks. So this is not a all or nothing chase scenario by any means you can and should definitely go through many of these other cards from AMEX and Citibank and Barclays and Capital One etc. and that's the point that we've found ourselves at which was all right we've opened up a significant number of these cards and we're now locked out of chase. So at that point we decided for ourselves and now a lot of other people who are really into travel rewards might have made a different decision than us but for ourselves we decided we wanted to stop opening up cards for a period of time and try to get back under the 5:24 rule and be able to actually apply and get approved for Chase Credit cards so that's really kind of where we find ourselves now and hopefully that little bit of clarification helps.
travelrewards
453 - 569 Jonathan Mendonsa So each week we basically open up the floor to our community and our Facebook group which you can access by going to choose if I dot com slash Facebook and essentially on this thread that we open up each week we try to collect feedback on the episode and find out what we missed what we could've said better. And we generally explore that on our Friday round up and this week Noah had several comments for us and I should just say real quick that we have two moderators on our Facebook group and it's Noah and Seonwoo. Noah has a Web site at money metagaming common and Sun Wu as a Web site at five by 40 dotcom and they have absolutely stepped up and are offering so much value on almost every single question or comment on that Facebook community group. These guys are incredibly smart. I mean they they continually blow both Brad and myself just a way by the level of knowledge and basically bringing their A-game to the table with every single idea that's posted so we can't thank them enough and just wanted to give them a quick plug here. But aside from that Noah had some specific feedback on this Monday episode and he basically said you guys kind of posted a false dichotomy there this past week and after looking at it again I tend to agree with him Brad and I essentially came to the end of that episode and said you have a choice. You can either go back and go through the the outline that we laid out with Chase once you come to the end of it or you can move on and do other cards. Noah challenged us by saying if you're married it doesn't have to be one or the other. You can essentially pick up this perfect hybrid that allows you to get the best of both worlds. And he says for couples let one spouse get a new Chase card every approximately five months or so to stay under the 5:24. The other spouse can go as hard as they want on other credit cards. Outside the chase cards and they can fill in all of the spending gaps with cards from any bank and not worry about their 5:24 status which to him is kind of the best of both worlds. And frankly even though I consider myself a creative thinker I was kind of visualizing doing one or the other. I think that's incredibly value added.
569 - 593 Brad Barrett Yeah it's a great comment by Noah for sure I like this and it's funny. Sometimes you just don't think outside of your own little box. So for instance Laura and I have been opening up cards for years we're both well over 5:24. So for me it was an either or. So there wasn't this hybrid available but now that we'll both be back under 5:24 I'm going to take Noah's advice here and do precisely that.
593 - 610 Jonathan Mendonsa And on this same topic John had a question for us and he was talking specifically about the cash value cards. He said I'd like to understand why you'd get a card that you can negate travel expenses at 1 cents per mile instead of just getting a regular cashback card. Brad Well let's go ahead and talk about that for a second.
travel
610 - 761 Brad Barrett Yeah. This is a really good question John. And I think the real simple answer is it's all about the sign up bonus the signing bonus for these travel rewards cards is everything. That's where the real money is be made the real value comes. So for instance just to run through the numbers right. Let's say you open up a Barclaycard arrival Plus which right now is the top bonus on any of these fixed value cards that he's mentioning. And it's a time of recording here it's a $500 bonus when you spend $3000 in the first three months. So if you spend $3000 and just got on on some normal card and got 1 percent Rewards that would be worth $30 to you. OK. Not Nothing but not all that great really. Whereas if you put $3000 on this Barclaycard arrival Plus you would actually earn the fifty thousand point bonus plus you'd actually earn another six thousand points for that three thousand spend. So in total it would be 560 dollars worth of value which when you take that 560 and divide it by the $3000 spend that comes to 18 point six seven percent a really rebate more or less on your $3000 spending. So that far surpasses the one percent or even 2 percent you might get on the best possible regular cashback card or rewards card. That's why the sign up bonuses mean everything when it comes to this strategy. And of course you always have to do what you're comfortable with. But we advise as many of these singup bonuses that you can get while still of course being smart with your credit cards right. Paying them off on time and in full every single month and not spending any additional money than you would otherwise if you just use cash or debit or a check or whatever whenever people use. So yeah I mean eighteen point six seven percent is incredible. And frankly I've seen cards where like the British Airways card we wound up ultimately getting more than 100 percent in value back on the redemptions which was just bonkers to me. I mean I was I was incredible. So yeah. In summary John really great question but you can see why these signup bonus is really just juice the whole reward structure in your favor from one to two percent to upwards of 15 to 30 percent which is clearly a huge upgrade. So that is travel rewards in a nutshell. It's earning these Sign-Up bonuses and really understanding the value of them.
travelrewards
761 - 837 Jonathan Mendonsa And it works perfectly for the long term player. If you're willing to do this over time I mean the limiting factor here is the minimum spends when you're going for the sign up bonuses you're never going to go out you're going to open five or six cards all once that would be as Brad says that's crazy talk. So he does want to space this out and make it a part of your lifestyle and you're just allocating your normal spending and you're doing it over extended periods of time which is how you can end up in a situation three years from now where you'll find yourself like Brad where you haven't spent any extra you're still saving 50 or 60 percent of your income and now you have three million miles which You've redeemed for two to three vacations each year. And as you get closer to your goal and you have more and more free time you're actually able to use these points in the most optimal way possible as you learn these additional strategies to do more and more game changing vacations and adventures with your family for free. So we had some interesting feedback good ideas come from the audience and a lot of times what happens is by Brad and I sharing our conversation twice a week in some way inspires our audience to remember something that they've already done and essentially riff off what what we did and share their experiences which allows us to riff off what they're doing and Pastor FI shared one with us. Brad did you want to. Did you want to read that.
Brad_Catchphrases, families, savings
837 - 874 Brad Barrett Yeah sure. So Mark who goes by Pastor FI here said hey there Brad. Listening to the July 4th roundup as soon as you mentioned Mother's Day and restaurants I bolted upright about 20 years ago it dawned on me the Mother's Day and Father's Day were a complete disaster on Mother's Day as you pointed out you cannot get into any restaurants. Are crowded and the service stinks. On Father's Day you couldn't get on to any golf course anywhere. So my wife and I switched them fathers they became mothers they and mothers they became fathers. I could get on to any golf course I won it on Mother's Day and my wife and I could go to any restaurant we liked. On Father's Day it worked perfectly.
874 - 878 Jonathan Mendonsa That's so cool. So do do people not go to restaurants on Father's Day is that not done.
878 - 890 Brad Barrett Yeah I don't know that that is news to me. I thought when Laura and I were talking about this afterwards that I didn't realize that I would imagine people go but I think like most families go out for Mother's Day. Right. So they're just packed.
families
890 - 1026 Jonathan Mendonsa Yeah you're right. It's definitely going to be a downturn for sure. That's interesting. I hadn't even considered that. Very cool. So Frank said devoted wife and I have been in Brad's corner on holidays and birthdays ever since our first Valentine's Day dinner which was held a nice empty restaurant not on Valentine's Day in 1991. We purposely stay home most holidays and reschedule all birthdays for convenience. We were married at the Jersey Shore several weeks after Labor Day when everyone had left. By the way and he had another tip for us. If you ever have an itch to go to Vegas or Orlando style theme park which he says hopefully not but Brad and I obviously have spent a little time talking about that the best time is the first two weeks of December. Businesses looking for conference space on the cheap often take advantage of this the best time to go to a nearby romantic bed and breakfast is usually the Saturday after Thanksgiving traveling to your parents or in-laws a day or two after Christmas and have a second one there. If you have to go somewhere on Thanksgiving try to do it early morning on Thanksgiving Day itself. Never go to the beach pool etc. on Memorial Day Labor Day or the 4th of July. Yep I was there. If you don't have to drive late at night or early in the morning if you have to go rescheduling important days travel events is a supreme life hack. Our kids wonder why anyone obsesses over doing something on any particular day and why people waste much of their lives waiting in line with the lemmings. I want to get out of that line. Oh and as a general rule do all of your shopping as early in the morning as possible. You can tell Frank has gamed things out for a long time and he just has a system in place and it seems like such an obvious choice. And the first time you hear it. Wait we're not going to celebrate Valentine's Day on Valentine's Day. All right you're going to have a conversation but once you work through it and then you take two steps out and look at it from the outside in. Outside of all the commercialism and the marketing and you realize this is just a made up day with no significance. The significance is what you're putting into it setting that time aside for your family once you're willing to realize the construct that you've allowed yourself to be trapped in and just adjust it slightly. Everything is better. So again it's all about messaging as Brad and I have said over and over again and I think as long as you spend some time getting that messaging right with your spouse you can easily sell that and everybody wins. It's just a win all the way around.
families
1026 - 1235 Brad Barrett And it's what we are talking about right which is looking at a problem a little bit differently. And both Frank and Mark said essentially the same thing. Right. Like like Frank said our kids wonder why anyone obsesses over doing something on any particular day. And yeah I mean this is the supreme life hack like you mentioned. It's just think outside the box a little bit. The entire concept of FI is thinking about the world differently and just being a little more optimized. And I think how you spend your time is a huge portion of it. It's not just how you spend your money it's how you spend your time. So for all those people who are walking around out there saying how busy they are and you know being frazzled all the time and not making any changes that's what I don't understand. To me I look at life as like a game where I can make things easier for myself and better and ultimately live a happier life that I can choose what I do with my time. Isn't that what we want to do. Like why as Jonathan says like why be on the hamster wheel and the hamster wheel doesn't just have to be corporate America. I look at the hamster wheel as life in general for most people. It's just the same thing day after day week after week year after year and there's no progress there's no end game I mean things like how Joel and Alexis from FI 180 say they made a game out of every single aspect of FI and certainly their spending and how can we cut 10 percent off our credit card bill or 50 percent do that with your time and just look at the world slightly differently. Like how Jonathan just mentioned about about marketing. I always kind of look at places where even like businesses I know are funneling you to make purchases. And this is a little kind of outside the box. But even back in the day when I used to drink soda as abhorrent as that seems to me now. You go to Teejay Fridays and they're charging you $2 for a soda that costs them two cents. And in my head I'm like screaming No don't go to the profit centers. That's what they're trying to funnel you towards other restaurants are trying to funnel you in on Mother's Day when they can charge double the prices for really nothing particularly great or nothing different then two days before or two days after and you have to waste precious hours in line. It just makes no sense to me. So one other thing Frank mentioned which is a neat little life hack is traveling on Thanksgiving actually. So we have flown from Richmond to New York City to LaGuardia Airport on the Thursday morning of Thanksgiving. The place is a ghost town. You've never seen an airport as empty as LaGuardia on Thanksgiving morning. It's really it's crazy. You could basically do cartwheels down down the center of the aisle and no one would see you. So that's a great day to travel. Just like trying to accumulate these life hacks. And that's what we can do here. At chooseFI. So hopefully when you guys are listening to us it's not just about Mother's Day it's not just about oh Brad said it was great to travel on Thanksgiving. It's try to look at your life and figure out when you can do this. So don't go to the food store on Saturday at 3pm. Everybody is there. That's crazy. If you want to make your life a little better try to find a different time even if it means getting up a little early one day. You're going to do a lot of shopping in a third of the time. And with so much less stress. So just try to accumulate those things and then tell us about them. Tell the community that's what ChooseFI is this community of people who are helping each other live these optimized lives so that's how I look at this in general.
lifeoptimization, travel
1235 - 1304 Jonathan Mendonsa An interesting pivot here which is it goes back to stuff. But it's it's going to be a little controversial So we're going to try and go about this the right way. But I think it will prompt you to do some introspection and to have some dialogue that that may be very interesting especially when you're talking about things and doing things slightly differently and looking at things slightly differently in the context of specifically maybe Mother's Day Father's Day but by extension birthdays Christmas and that is the topic of holiday cards. Can we just talk for just like 20 seconds about how ridiculous it is that you feel compelled to buy cards for your three or four family members not just for their birthday but then also at Christmas and then Mother's Day and then Father's Day and then Valentine's Day and then your anniversary and you're get well cards and you're thinking of you cards and you walk into your local market and those cards are selling for seven ninety nine a pop and you feel the pressure to get it individualized. One with an Audio Note that comes with it every single time. Can we just think for a second and just talk about how ridiculous that is that there is an entire market that takes up literally 10 percent of a store selling these cards.
families
1304 - 1370 Brad Barrett Yeah. And that is that is a very good point and you know it's funny. I don't think a lot of people realize when we do these roundups a lot of times it's it's really UNSCRIPTED. You know you and I are just kind of ripping off each other and actually I was wondering if you were going to go into something about presents and gifts and we will talk about that in a minute because that's actually where I was going to take this next. So this is a pretty good segue into that but that kind of reminds me of the profit center that I was alluding to with coke or getting a beer out at a restaurant for $6 when it could cost you you know 67 cents to get it at your local Wal-Mart or wherever and yeah. Could there be any worse example than a greeting card or birthday card that costs three to seven dollars as Jonathan said for really nothing just a piece of paper. Yeah. This is like a colossal colossal waste of money. And I know personally we don't buy cards anymore. Laura and I write each other cards on our actual sheet of printer paper. That's what we do and we just like dated and we actually save all these. So we have a box of these really nice letters that we write to each other. So that's kind of what we do. Just because I mean I know it's small fries. I mean you're talking a couple of bucks.
1370 - 1430 Jonathan Mendonsa It doesn't have to be though. I've seen people coming in over and over and over again. Once a month the purchase cards at 799 a pop and then many times they don't even do anything but fill out the name of the person and say congratulations or thinking of you or something like that. Do you think that card carries any value for that person unless there's a 100 dollar bill tucked in it. It doesn't it's getting thrown away or putting in the trash a week later. Maybe they hold on to it for two to three weeks because they feel guilty about throwing it out right away. You know maybe taking Brad's mentality which is just do it a little smarter maybe you purchased some very nice card stock that's blank and doesn't have any messaging attached to it. Maybe you don't just do it on your eight and a half by 11 printer paper but you do it on some nice cardstock to me. Ok I see the value there and if there's a great message attached to it I am a sentimental person. I get the value of a great note or message. I'm not saying that you shouldn't do that. I think a written letter carries a lot of weight. I'm just talking about buying into this stupid commercialism that says you need to spend seven ninety nine twenty five times a year in order to show that you love someone it's just crazy.
1430 - 1560 Brad Barrett Yeah that is crazy and that kind of ties into what I'm talking about with with presents and I'm curious what you and Danny do and I'll talk about myself first. Just to give a little full disclosure here like Laura and I do not do presents for anything. Birthdays Christmas Valentines Day Nothing we do essentially no presents. I mean maybe like a tiny little thinking of you thing for for Christmas it will be you know 10 or 20 dollars at most. But I mean realistically all those holidays that people are frantically trying to find jewelry for their significant other on Valentine's Day and spending hundreds of dollars I just don't really understand that. What is it Jonathan is it like a show of love. Is it that I know this is going to sound weird but to me it's it's like a substitute for happiness. And that's kind of why we try to focus on what actually makes us happy in life as opposed to looking forward to these trinkets and holidays. And I think I might be a little jaded because for whatever reason we always had like big issues surrounding presence when I grew up and how things had to be perfect or people would start crying and it was just this like disaster and it's just always left a sour taste in my mouth and it's like what does a present have to do with anything or why do you have to waste hundreds of dollars when you're a team 365 days a year. There are better ways to show that you love someone than to go out and waste money. That for most people they just simply don't have. So not only are they spending money on nothing but then they're putting it on a credit card. Right. For most people whereas for us we don't bother with them. If there's something that we value and this goes back to the valuist term that Brad coined in a prior Friday roundup and if there's something we value in life we buy it. We don't sit and pine over it or wait until our birthdays are coming up or Christmas or something like time. We just we just buy the thing because there's no special significance if it reaches the value threshold that we want to make a purchase we make the purchase right. That's like that's the point of having money and having flexibility. So so yeah. Anyway that's that's kind of how we deal with that. But Jonathan I'm curious what when you go ahead to steer.
valuist
1560 - 1696 Jonathan Mendonsa This conversation that you started is probably one of the most powerful and controversial things that we've talked about on this show. I have not figured it out. I am fully in the lemming camp. I get presents for everybody that I feel like I have to get presents. I can tell you I hate it. A little part of me dies every single time I have to buy 15 people presents at Christmas. It's not because I don't I'm cheap and I don't want to spend the money. I just it's just dumb. It just I can feel it. I'm buying into a false construct and I currently get gifts for anybody that it's in their timeline. I budget it out. I have the money. You know I go by the Dave Ramsey Christmas isn't a surprise. You have 12 months to prepare for it you should have money set aside to have the money set aside to have a budget to spend on them I don't go crazy with it but it eats at me that I know that there's a smarter way and frankly you just have to have somebody else show you what's possible. I think that there's so many different layers to this the next layer to this is that essentially especially with and I'm not talking about the extended family presence that's a whole another construct. There's a political environment there. There's all sorts of other things that go into that. But I think what I thought was so interesting that you and Laura don't buy presents for each other. And to me there's something deeper there that's really cool that's worth just taking a second to explore. The main thing that strikes me is that in many cases when you're buying a present for someone the emotional component that's added on to that is because that present is almost an apology for the lack of time that you've spent and on that one day the president says hey I appreciate you and I know that I don't get to spend a lot of time with you. But here's this amazing president that's going to make up for you know 12 months of ignoring you or not been able to spend any time with you. And here is the day to acknowledge of how awesome you are now. That's amazing. That's great. Everybody should be acknowledged. But aside from that one of the reasons I think you don't feel any pressure to have that singular acknowledgement is that you have 365 days of acknowledgement because your primary focus is spending time with your family and with loss. And that's what you all do. Why do you need an additional day to acknowledge that when you have 365 of them and your life has been structured you've designed a life in which your family is your first priority. And I think in that construct buying a present doesn't seem necessary. I don't know what do you think Brad.
families, ramsey
1696 - 1768 Brad Barrett Yeah I mean I think that that is a really good way to put it. Yeah I mean we prioritize our lives around happiness and around spending time together and we're not perfect. I mean we are very much a work in progress. And just every day I think I think that is the point though is progress. Right. And like this touches on what I was talking about before with the hamster wheel of life and it's humans crave progress and crave seeing incremental improvement or just seeing some light at the end of the tunnel. So while happiness is not a light at the end of the tunnel necessarily You should be constantly focusing on it and working on it just find ways to make your life better and easier. And it all ties into it so it's a wonderful positive feedback loop that really is how I look at this so it's just a focus on the things that matter in life. It's not spending five hours at the mall trying to find the perfect present to tell your significant other or whomever that you love them show them that you love them every day. And me just little things that don't just make your life easier and happier. So that is how I look at it for sure. And yeah I mean Jonathan not to you keep pressing you but like you and Danny do like the.
1768 - 1771 Jonathan Mendonsa I AM FULL ON presence man I am.
1771 - 1774 Brad Barrett Hundreds of dollars for Valentine's Day.
1774 - 1778 Jonathan Mendonsa No no no. OK. OK. I'm within the realm of reason so I think I have.
1778 - 1782 Brad Barrett But that is what people there right like that's not unreasonable. For Like many Americans.
1782 - 1866 Jonathan Mendonsa Yeah it's a moving scale right. Always try to get better I think. Probably Valentine's Day. Fifty bucks would be like the max that we would consider spending on Valentine's Day on like a singular gift although maybe we'd go get a dinner and some of that would go out the window but I don't think you know we certainly don't drop $500 a thousand dollars on on on on a wasn't for Valentine's Day I don't think either of us feel that constraint it is more just the acknowledgement. I think there's kind of a cap of around probably $50 that we would we would spend so it's a scale right. There's a there's a pretty big spectrum there. It's a it's a pretty small percentage of our of our discretionary income so it's definitely doable. And that's been baked in because all this has been done within the context of a budget. But I wish that I could just step out and acknowledge the fact that I'm buying into a construct that I in my core irritated by and find another way of doing it and ultimately it's about my wife's happiness right is about Danny's happiness so I truly believe that if I could get to a situation where I'm able to give her more of my time and more of my support and that would be far and above a better replacement for any one particular gift that I could give her. She does not need stuff but she does want us to take some time and acknowledge that our relationship has value that we are putting the time in to grow our marriage. And Valentine's Day for her I just think represents that so if we can find a way to separate that from a monetary expense she'd be 100 percent for.
relationships
1866 - 1925 Brad Barrett Isn't this interesting now when you're saying that I was thinking of the episode we had on the front around where we were talking about the wife had Ruth's Chris taste and the husband wasn't 100 percent sure how to even change right or broach the topic. Clearly you're not saying Danny has expensive taste by any means so not implying that in any way shape or form. But but it just reminds me of that conversation that they had and it wound up that she just wanted more of his undivided time and that's what you're saying there but I still think there's some combination. Like you're still maybe conflating that with the present. And like who knows what Danny wants and this is not like an existential worry for you as far as the $50 Valentine's day or I'm not saying that but isn't that interesting that like maybe that's a conversation you guys can have and it might come back to. Like I remember one time you had a fleeting mention of we do grocery shopping together we're like the weekly Costco trip and that's one of her favorite hours of the week. That just reminds me of it's such a similar parallel.
1925 - 1950 Jonathan Mendonsa You know it's so funny if you spend time talking about this you almost immediately can self reflect on where your weak points are and what you could do better. And I guarantee you if I were to offer you sweetheart I will go spend $200 on a gift for you today. That's option A or option B is I shut off my computer I lock my phone in the drawer and we just spend the day with no electronics like I know which one you'd pick right away. That would be it would be a no brainer.
1950 - 1956 Brad Barrett Oh yeah. She'd probably trade two years of presidents for one full day of undivided no phone.
1956 - 1977 Jonathan Mendonsa And then the moment the moment that's incredibly sad is I'd be like ah I don't know about this. But you need to you've got to separate because even that you can find your addictions even in things that you think are fine. Once you find out what you're addicted to try to get rid of everything and then find out where your pain points are. There's something there.
1977 - 1979 Brad Barrett Yeah. No that's true.
1979 - 2002 Jonathan Mendonsa OK. So Brad and I want to start this next segment off by playing a voicemail that we got almost a month and a half ago from Scott who reached out to us to basically say that he thinks the fi community is long overdue for a documentary and we want to talk about this. But before we do that we want to set it up by playing this voicemail that we received. Hang on just a second.
playingwithfire
2002 - 2103 Scott - (voicemail contributor) Hi Jonathan hi bread. This is Scott Ripken's here down in San Diego California. Just wanted to first off say Love the cast. Listen to every episode and really enjoyed the most recent one last week with the wealthy accountant. It's pretty incredible Keith is awesome that was great and I'm actually setting up an LLC as we speak. So it's very poignant to what I'm doing is awesome. So thank you for what you guys do really enjoy it in the community needed something like this so thank you. And because of that actually my love for the podcast and the way you guys do things your style. I wanted to reach out to you. I am actually spending about the next year or so creating a documentary about FI and the community that has really transformed my life. Me and my wife and I believe has the power to transform a lot of things in this country and maybe even in this world. So I am pursuing that as a storyteller. Ive got about 10 years under my belt directed a documentary full feature documentary that was debuted in South by Southwest and had a nice little tour of 20 cinemas across the country and you can find my work at Scott reckons dot com that scottireikens dot com. I'm also at a company called St West dot com where myself my business partners have been pursuing for the last decade or so. But anyway I would love to chat more with you about that. I've got some plans for how I can get started on that. And I wanted to just kind of talk to you guys about a few things to see if you're interested in this. I'd love to hear from you guys see if you're interested at all. Love to tell you more about Doc and what I intend to do. And all that so awesome. Looking forward to hear from you. All right thanks guys.
accountant, playingwithfire
2103 - 2146 Jonathan Mendonsa So of course Brad and I got this voicemail and we were through the roof excited because this community does deserve this documentary and obviously we feel that this information has the ability to transform lives transform our culture transform the world and and provide everybody a platform from which they will be able to pursue their own personal happiness. So we immediately reach back out to Scott. And this was followed by several conversations which were incredibly exciting to be a part of. And frankly for our community this is just a behind the scenes look at what's going on. And I just wanted to basically take a couple of minutes and talk to Brad about it get his thoughts live and then let you know where this is going in the very near future. So Brad where do you think we should start with this.
playingwithfire
2146 - 2172 Brad Barrett Yeah well I mean this was and is maybe the most exciting thing going on in the FI community at the moment. And Jonathan as you always say the fire is spreading. My friends right like that is what we're doing here at ChooseFI. We're not just trying to talk to a closed group of people and kind of all Patersons in the back how we found this super power. Right. So you know that's fun I guess. In and of itself. But but.
Jonathan_Catchphrases
2172 - 2175 Jonathan Mendonsa It is a pretty cool club.
2175 - 2273 Brad Barrett It a very cool club no doubt about it. But I mean the point at least from my perspective is is growing this movement and trying to get other people to see that we're not doing anything crazy here. But yet we're building these lives of financial security happiness and financial independence right where we can retire quote unquote or really choose what we do with our time. Right. And that it's just such a powerful concept that for me this Choose FI podcast is is my life's goal. Right. That's that's where we are at this point. I consider this my life's goal to help spread this message. And when I heard this voicemail from Scott about doing a documentary and him spending a year of his life on this it just further reiterated that point to me that there are other people crying out for this information and in talking with Scott and getting to know him over the last month or so him and his wife have dived into this concept as much as anyone I mean they're literally moving from beautiful San Diego and moving to a low cost of living area and they're pursuing FI. And they are well down that path now. And this documentary is the logical offshoot of that. So yeah I mean it's just it's really neat. And you know we're not pushing this documentary because we think it's going to help us or choose FI or anything like that. You know we don't care about that stuff. We just want more people to learn about FI and through seeing some of Scott's work and speaking with him and hearing his excitement. I think this is the real deal. And yeah I mean that's why we're going to continue to talk about it here on the podcast.
playingwithfire
2273 - 2454 Jonathan Mendonsa And so we're trying to figure out what is the best way to do that. And we think the next logical step is that we are actually going to have Scott come on the podcast in the very near future and share his story share how he found the rabbit hole and where he is now and where he's hoping to go with this. And then for our community we want to bring you behind the scenes that watching world we'll find out about this in the next year or so. And we we actually anticipate that this is something that very likely could be picked up by the mainstream. So Netflix Amazon Prime a lot of those big venues there's a very high chance that this can end up being featured. But this is about the FI community and we don't think you need to be ambushed by it. We would like to bring you in on it and see it as it's getting built step by step. And so we want your feedback. We want your ideas. This is something that's going to feature for instance the Camp mustache that's coming up in Florida that will be a part of this fincon coming up that will be a part of the some of the Chatauquas that will be a part of this documentary potentially interviewing people in our community that very likely may be a part of this. So there's a lot of moving parts here. And essentially the idea is that there are so many different walks of life inside that focus lens of FI. There are so many different ways to take it. People that have made radically different yet unconventional choices yet have a lot in common. And wouldn't it be cool to feature some of those stories in a compelling way that basically says just try doing things just a little bit smarter than your neighbor. Just think about the choices that you're making and put your emphasis and your priorities on things that will actually make you happy. Pursue happiness. And so we want to do what we can to support this and to support the FI community every step of the way. So part of this will be raising money for this documentary. And Scott has already created a Kickstarter campaign which is going to go live in the very near future. I believe he's still looking for feedback on how to tweak it and make it as useful as possible and I've invited him to feature that thread on our Facebook community group so I think on that group he is going to post a thread of what he's come up with for Kickstarter levels because there are there are some real costs to creating a documentary even if it's a low cost documentary you've got to essentially raise money for travel. Raise money for the hotels you stay in and for that period of time there is although it will not cost a lot. In terms of the relative cost of making a movie or anything like that there are some very real costs that need to be covered in order for him to really be able to give up a year of his life and put his focus on this community. So anyways this upcoming week we're going to get a thread posted on our Facebook community group he's going to post his ideas for the Kickstarter campaign. And all we're really looking for is your feedback on whether or not those look like good ideas and how you would consider tweaking it to make it even better. As we continue to push forward with this and if you are interested in that or interested in our Facebook community group super simple just go to choose FI dot com slash Facebook. There's a very simple opt in form and we will send you an invite to get you into that group. OK so next on this Friday round up we want to feature a question from Bonnie and she posed this question. The wealthy accountant and he's already gotten back to us with feedback so this is a two part series and we're going to play both of them for you right now.
accountant, chautauqua, fincon, playingwithfire, travel
2454 - 2537 Bonnie - (voicemail contributor) Hi Brad and Jonathan this is Bonnie. First off love this show. Thank you both very much. My husband and I both listened to it. I have a question that maybe for one of you or for the wealthy accountant my husband and I are somewhat late to the fire game or FI were just 51 and 58 but we're gearing up to execute soon our plan is to jump off our nine to five stressful jobs here seeing and travel around for a year or two. So during that time that we have no earned income. Are there some smart tax strategies or tax advantages or things that we could implement that might help us down the road and be more successful at FI. Please note that we have about 80 or 85 percent of our wealth is currently in 401k or tax deferred accounts. We each have a 401k through employment over the years. And I also have a rollover IRA from the 401k at one point. We recently sold her home. So we're renting and my husband also has a pension that we can start at any time where it can also be cashed out. So any advice that either one of you can provide or the wealthy accountant we would welcome that and I would hope to add that to our successful F-I strategy. Thank you both again. Bye.
401k, accountant, ira, pensions, tax, travel
2537 - 2546 Jonathan Mendonsa OK. So we got this voicemail. That was incredible. It's the perfect conversation to send to Keith and get his input. And we did that and he's gotten back to us and we're going to play his response now.
2546 - 2711 Keith - the Wealthy Accountant Hello Bonnie. This is Keith from the wealthy accountant Brad and Jonathan give me your all your questions of all your early retirement and congratulations to you and your husband. From what I have here from my notes as I listen to this is that you're 51 and your husband is 58. You are going to be retiring very shortly here now and you want to travel for a few years so there will be no income you have most of your money in retirement accounts like 401k is now. There's some good news and some bad news. The good news is is that with no income your standard deduction for a married filing joint person in 2016 which will be adjusted up a little bit for 17 and your exemptions are also four thousand fifty dollars so the twelve thousand seven hundred standard deduction and the 4000 $50 exemption for both you adds up to twenty thousand eight hundred dollars. So you want to get twenty thousand eight hundred dollars out of this account using zero percent tax bracket the 10 percent tax bracket for a married filing joint person is eighteen thousand five hundred fifty dollars which means you could take three 39000 $350. And if that's your only income you would have a tax of 1855 five dollars which would be a an effective rate of 4.7 percent. Now the bad news is is that you're both under age 59 1/2. You can still take money out under Section 72 without a penalty. But there are some limitations. The first is that you have to use an R&D calculator or a 72 T calculator to determine how much you can take out the IRA. Administrators can help you do this once you have that amount. If you take that amount and start that process that's Section 72 t distribution from a retirement account. You have to continue doing it for five years or age 59 1/2 whichever is longer. Now your husband's 58 so if you can hold out for a little bit or if this is going to start when you when he hits 59 1/2. The good news is this is a really easy call. We just take the money from his account there is no penalty nothing to worry about. If you take it from his account before he turns 59 1/2 even 59 in three months than under 72. You started the process. You would have to continue taking that amount for five years. You on the other hand if you took it from your account it would have to be done until age 59 1/2 because it's longer than five years. So you have to go with whichever one is longer now because you are in retirement taking money out of your accounts. For example if there's a $25000 allowance on the 72T to take out 25000 each year for five years or longer might not be an issue but it's something to consider. There are also potential state income tax issues as well which I'm not calculating here I don't know which states you have come from. So I hope that helps. I congratulate you on your retirement. I hope you enjoy your travels and I look forward to hearing about all the exciting adventures you have.
401k, accountant, ira, tax, travel
2711 - 2741 Jonathan Mendonsa I love this. This is a chance for Keith to unpack what could be a very complicated discussion but it's his area of specialty and so he can talk about it with ease and because it's a very specific case. He can do more than what he could do if he was just creating some generic scenario. He has actual data to work with. A real scenario. And so he can give you optimized information for the place that you are. And I think first of all Keith for taking the time to provide that feedback for Bonnie.
2741 - 2785 Brad Barrett Yeah. So I just wanted to emphasize Keith's point about Bonnie having her husband potentially wait until he's 59 1/2. That seems like a nice easy path of least resistance if they possibly can wait that long. And also I thought really interesting how he added on and showed her what the 10 percent bracket would be. So I mean they can essentially pull out I think Keith said thirty nine thousand dollars and have an effective tax rate of 4 percent and change so I mean that is a minuscule amount of tax on $39000 of income. So yeah I mean that just really good insight from Keith and just again this is the value of having these in-house experts so yeah. Keith thank you for your time and Bonnie thanks for that question.
tax
2785 - 2843 Jonathan Mendonsa So one of the things I love is that five runs so perfectly in tandem with the side hustle and we will use both of those to aid the other and speed up your progress ultimately to be FI. And one of the cool things with the sidehill sales people say I don't have ideas but the great thing about this show is that we're crowd sourcing ideas and on an on almost daily basis something new is coming across. Brad or myself it's come across our radar and frankly when it's just inspiring We want to share it with you and hopefully give you a chance to think about whether or not any of these tools will work in your life. And a couple of cool things happened after we posted the Friday roundup last week and I wanted to take a second because I know Brad had actually followed up on his collection of just stuff these collectibles are right. All of us have some form of collectibles from our childhood and he had an excessive amount of collectibles up in his attic so I know he's been making some strides with that game plan right Brad.
2843 - 2943 Brad Barrett Yes I have. So yeah I mean one of the big things that we're always trying to get across here is take action right. Like we tell the audience to take action and we need to do it ourselves and model it. So the way I got started it was just kind of googling I figured these comic books were essentially worthless but I was just googling a couple of things and I saw some surprising values. Some of these comic books might be worth like hundreds of dollars if not thousands of dollars if they were in pristine condition and now. So that got my FI spidey sense was tingling a little bit since we're talking comic books here. So I instantly perked up and I'm like I've got to check this out. But keep in mind these things have been in my attic for the last 12 years and it is boiling hot up there so I figure like oh great here I have these comic books that I thought were worthless and now I think are potentially worth thousands of dollars but they're probably melted beyond all comprehension. So I actually went up into my attic last night and hey Jonathan you should have seen me. I was dripping sweat. I couldn't see out of my glasses. I mean dripping sweat it was ridiculous as I'm carrying down what I'm counting now are nine boxes of comic books. I'm going through it. I'm thrilled to say that they're all still very very good condition. So that's good stuff. But amidst all the chaos of my attic I realized that I didn't find the one box with what I had kind of cordoned off as the most valuable comics so I still haven't come across that. And I'm hoping that they're up there. So actually what's funny is I have on my To Do list for today right after we get off the phone is to head back up into the attic and try to search through these things so.
2943 - 2946 Jonathan Mendonsa Hopefully hopefully Molly didn't throw those away on you.
2946 - 3069 Brad Barrett Yes she might have or somebody might. So yeah that would be a real kick in the butt right you. I kept for 12 years maybe probably 30 years almost at this point in 25 years. Thousands of comic books that might be worthless and I lost the one valuable box. But yeah I'm hopeful that I'll come across it and then yeah I found a Web site that will help you appraise your comics. And they do it in a pretty reasonably intelligent manner. So I'm I'm hopeful that that will work out. And if not I'll just sell sell them on eBay piecemeal you know or at least the the more valuable ones. So yeah I mean that is kind of my update. So rest assured everyone I am listening to what are we talking about here and taking action. But unfortunately my wonderful little oasis of office here is now overrun with nine humongous boxes of comic books. Yeah that's where I am and Jonathan I wanted to kind of tee you up for something really cool that happened just a couple of days ago we got an email from David and I thought this was hilarious the subject was I want to hire your wife Dot dot dot and I'm like I'm cracking up because I know who the heck knows where this going. And it's like hey guys I'm not sure how to start an email like this but great show. I want to hire your wife to narrate my book. And I just thought this was the coolest thing I'm going to read one more little section here and then I'll let you tell the story. But he's saying I wrote a book a couple of years ago for fun but it just sat there. I sent it to family and friends and I had very positive results but never did anything more with it. Listening to your podcast about side hustles was the kick in the rear. I needed to take my book to the next level. It's currently being edited and should be done in the next couple of weeks. I've always wanted to make it into an audio book as well. Today after listening to the Friday round up the side hustle unpacked and Jonathan you mentioned in passing that your wife wants to narrate books. I really jumped out of Mike Perry Winkle carseat with glee how freaking awesome would it be if she got her start narrating a fellow choose FI followers book that he just happens to have already written. She can turn that dream into an almost immediate reality.
hustle
3069 - 3154 Jonathan Mendonsa And it's so inspiring and cool and I'm very grateful that David reached out to us because it is exactly the opportunity that my wife was looking for and she jumped on it. So we've already work something out. And frankly she's already started reading it and done a sample chapter and just very very excited for her to get a chance to really explore her passion. And I think there's something really cool that they're both able to do this together they're able to to share these two complimentary skill sets. I would never be able to write anything like David wrote it. It's a very impressive book that he's pieced together and my wife I believe is going to be perfect for this so she's already created a sample work and sent it over to him. And what's really neat. We talk about doing things a little bit smarter. It doesn't cost anything except for time to write a book but potentially once you've gotten it published it's passive income for life. That's one of the things that's really compelling about becoming an author. And so I love that idea as a side hustle. So I think that's a great way to actually look at one creating passive income streams down the road and to sharing resources that allow you to both get closer to your goal. So just kind of kind of neat and as a quick aside going back to Brad Brad I'm kind of like a closet comic book nerd. I could never bring myself to actually buy them. But I'm very interested in seeing your collection so before you sell these things off you should take a couple of snapshots of just the volume and which ones you had and post them on our Twitter feed. I'd be very interested in seeing what was buried up in your attic for 13 years.
hustle, passiveincome
3154 - 3162 Brad Barrett Yeah I can definitely handle that. Yeah that's one of the things I need to do is kind of organize it by title and and such. So yeah I will definitely do that.
3162 - 3169 Jonathan Mendonsa OK so let's take a second and talk about a couple of frugal wins of the week from our community group. Our first one that we had was from Kayleigh. Did you want to read that.
3169 - 3272 Brad Barrett Yeah. So she said here's my frugal Win of the week. Me and my fiance had a $10000 plus wedding planned with all the FI resources. And your podcast we decided to move up our wedding date from December to August and are having a backyard party which will cost us only $1000. We are using the difference to pay off debt and speed our journey to financial independence. Thank you for all that you do. Yeah that is awesome. I mean that's a $9000 savings plus on on a wedding. And you know the money is going to pay down debt and speed that path to fire. So that is that is a huge win. All right and Ruth one in the week. She said When I started recycling my trash was cut by 75 percent. I split the trash pickup with the next door neighbor now. And I thought this was a cool one because I've kind of alluded to this in passing where I guess I've had a different take on it kind of sharing different things with your neighbors. Like a lawn mower or a leaf blower or something like that. Because realistically these things sit idle. Ninety nine percent of the time. And it would be cool if you could actually pool resources as a neighborhood and not have to have. In my case 10 lawnmowers for the 10 houses on this block would be kind of a cool thing and actually one thing that I've thought of as well is actually trash pickup if it wouldn't be such a difficult conversation societally to go out to my neighbor and say hey you want to split garbage. I feel like they look at me like I had a thousand heads and maybe that's my own mental hang up and I should just get over it and say hey let's do this. This would be a nice money saver for both of us. Neither of us are using the full extent of the garbage lets share and let's save resources so Ruth actually did this. And yeah more power to her. I think it's great.
FWOTW, debt, savings
3272 - 3383 Jonathan Mendonsa But I have a reframing on that one is that first of all if it were your buddy so you're living next to a friend so you have a sense of community that lowers the bar and makes it a little bit simpler. The second half of that is I was thinking Yes pretty cool but I don't want to be giving someone $5 a month. On the flip side of that you've talk about cashflow in the past basically saying that cash flow at some point really doesn't become an issue and you can make decisions based on saving money. And I was just thinking while it might be weird to say hey can I give you five bucks a month to split your trash with you. Maybe that's weird. But what if you said hey I tell you what I want to split this with you and I'm willing to give you 60 bucks just to let me throw my little bit of trash that I have you know in your trash pail. You know once a week or twice a week would that be cool. I bet you they would say yes that I would say yes to that. If it were a reasonable request done the right way and just dropped that money all at once pay for it for a whole year and then not have to worry about it anymore. So I think again it goes back to framing it goes back to messaging and it goes back to community. All these things end up being tied together. So thanks for sharing Ruth. OK it's time to bring this episode to a close and we like to finish each episode by reading a few iTunes reviews and we actually do a drawing for a copy of JL Collins book the simple path to wealth. And if you want to be a part of that drawing all you need to do is go to choose F-I dot com slash iTunes. There are some very simple instructions on how to leave us a written review on iTunes. Or you could also leave it on stitcher although I don't have a tutorial for that I believe it's pretty simple. Leave us a review on either of those platforms and then just let us know that you've done that and you can just send us a message at feedback at ChooseFI dot com letting us know the screen name that you left it under so that we can match it up. And then every week on the Friday round up we announce our winners for that drawing. And currently we do one copy of the book for every five submissions that we get. And yeah please do that please be a part of it. And I believe Brad how many winners do we have today.
savings
3383 - 3429 Brad Barrett We have two. Yeah we had nine people e-mail us so yeah we're giving away two books today and the first winner is Andrew and Andrew said it's a revelation. The best way to start my week in every episode there are nuggets or actionable items as Brad loves to call in Jonathan and Brad speak about the pillars of financial independence in great depth. Choose FI is a unique crowdsourced project where the fi community drives the show. I had a frugal win last month contributed all my bonus to my 401k plan. Not only did I defer my federal taxes but also got a 4 percent employee match added over $10000 to my 401k plan. The fire is spreading. And yet that's just a great review Andrew and congrats on your frugal win of the month.
401k, Jonathan_Catchphrases, testimonial
3429 - 3431 Jonathan Mendonsa And ok Brad who is our second winner.
3431 - 3433 Brad Barrett Yeah it's Kyle.
3433 - 3483 Jonathan Mendonsa OK and Kyle says life changing podcast I love choose FI and let me tell you why. I've read tons of books on personal finance since my teens including all the rich dad poor read books and many more. I've had a goal of financial freedom for a decade but until I heard Brad and Jonathan in this podcast I had no clear plan or definition of what I was actually trying to achieve. The way they can bring together all the sources of information you need and summarize it in one hour podcasts that leave you with actual steps to move forward is amazing. I'm 30 now and feel like the last three months has done more for my personal growth than the last 10 years. Keep up the great work guys. Thank you so much for your feedback. Thank you for joining us. Twice a week on Monday and Friday and all the days in between. On our Facebook community group the fire is spreading my friends and we'll see you next time as we continue to go down the road less traveled.
Jonathan_Catchphrases, testimonial

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