An Introduction to Financial Independence with Chris Mamula, Brad Barrett and Jonathan Mendonsa

Scott: Welcome to the BiggerPockets Money podcast show number 92 with the guys from ChooseFi, Brad, Jonathan, and Chris.

Jonathan: You could not have increased your income overnight, but what mindset, what questions, what skillsets did you develop to get where you are today that allowed, the earn more the equation to be the almost inevitable?

Male: It’s time for a new American dream, one that doesn’t involve working in a cubicle for 40 years barely scraping by. Whether you’re looking to get your financial house in order, invest the money you already have or discover new paths for wealth creation. You’re in the right place. This show was for anyone who has money or wants more. This is the BiggerPockets Money podcast.

Scott: How’s it going everybody? I’m Scott Trench and I’m here with my co-host, Ms. Mindy Jensen. How are you doing today, Mindy?

Mindy: Scott, I am doing fantastic. How are you today?

Scott: I’m doing great. Had a wonderful fun time just hanging out with three of some of the best students of financial independence around and Brad, Jonathan and Chris today.

Mindy: I always enjoy having Brad and Jonathan on the show. This is our first time with Chris and we don’t really dive too much into his money story, so we are definitely going to have to have him back so that he can share it with us because I think he’s got another very interesting approach to money, but no, today we’re talking about the new ChooseFI book called Choose FI: Your Blueprint to Financial Independence, and I think this is just a really awesome book. Very, very easy to digest book on how to start down the path to financial independence. It’s one thing to hear from people who say do this, do that. You have to do it this way. You have to do it that way, but this book doesn’t really frame it in that context. This book says, “Here are the things you need to do. Here are ways other people have done that and probably something in there can work for you too.”

Scott: Yeah, really love the case study approach, the variety of perspectives gathered for it and some of the great discussion in that book and today we’re going to have the privilege of talking with the three co-authors, Brad, Jonathan, and Chris. Although I hear that Chris was perhaps the workhorse in putting together some of these to give him a big shout out and we’ll kind of walk through some of the perspective around this. We’ll start with how to get started approaching the concept of financial independence and then we’ll go through three of the kind of key categories that you need to unearth in order to move towards this in the spend less, earn more and invest approach, and then what that does for you as you progress along that continuum towards financial independence.

Mindy: What that does for you is progress you towards financial independence where you eventually end up with all of the options in the world and the happiest self you’ve ever had. Oh, spoiler alert.

Scott: Yeah. In all of our cases and that means hosting a podcast on financial independence, so there you go. All right. Should we bring them in?

Mindy: Yes. Chris Mamula. Welcome to the BiggerPockets Money podcast. How are you doing today?

Chris: I’m doing well and I’m excited to be here talking to you.

Mindy: Before I completely ignore our other two guests, we have Brad Barrett and Jonathan Mendosa. Did I say that right, Jonathan?

Jonathan: Yeah. [crosstalk 00:03:08] we’re friends. I’m super excited. I feel like every time we practice this you get just a little bit better at it.

Mindy: Someday I’ll be just kicking it right off.

Male: Right.

Mindy: And they’re also here to talk about the ChooseFI book, which is called Your Blueprint to Financial Independence. Chris… let’s see, Brad and Jonathan said that Chris basically wrote what, 112% of the book?

Jonathan: Yeah, I think I’d love to Chris, do you kind of describe how you parsed it down, but effectively when we started the podcast, we had this vision for how we could take the principles and create something out of them at some point, and I remember verbalizing this to Brad. Then we got this email from Chris like within two weeks of that basically saying the same thing, but with more… it was completely flushed out and I was like, oh, this would be amazing. We should work together on this.

Brad: Yeah, because as you guys know, certainly from being podcasts hosts a podcast is simply not linear. Right? I mean we’re having different guests on. It’s really all over the place. I mean that in the best possible way, but there’s no way someone could start at episode one and have their path to FI in X number of episodes. They have to jump all around, so what Chris envisioned was, how can we make this blueprint for FI? We just thought… we really thought it was an amazing idea.

Scott: Yeah and I’ll chime in here. I’ve obviously been a big fan of Brad and Jonathan and the ChooseFI podcast and all the work that you guys have done over there and this book and I think special thanks to Chris for all your hard work in kind of architecting maybe the work here. I think it’s just a great extension of what you guys have been doing and the great work you’ve been doing there. It’s a really well thought out and clearly it is that linear approach. You’ve got several clear sections and a great framework about how to approach FI in that and I was hoping that we could kind of chat about maybe that framework here today with the five of us and kind of get our thoughts on how you’re approaching that so Chris, would you mind sharing the framework that you brought into?

Chris: Yeah, sure. I think that a lot of personal finance is kind of guru driven. Like somebody says this is what I did and they create this five or seven step program and you’re supposed to follow it and the reality of the situation is we all have a different story. We’re all starting from different points. We’re all going different places and so that’s not really how it works for any of us and so either people get frustrated and don’t do anything at all, or maybe they will try to follow like somebody’s program and they get stuck and what I have found that worked for me is just through trial and error as I just kind of took bits and pieces of lots of different people’s philosophies and I can’t say I have a great original idea of my own, but I just kind of stole from a lot of people and put it together to create something that did work for me.
What my thought process was, was I was going to start the podcast that is ChooseFI, something very similar and so when I heard these guys were starting it, I mean, it would be great to say that I had this vision and that I would work with these guys but I kind of think like a lot of people, I kind of actually was a little bit angry when I heard they started it and I didn’t want them to succeed, but because they kind of stole what was going to be my idea, I thought but as I started to listen to it, they weren’t bad and they were doing a lot of the stuff I wanted to do and I couldn’t help but become a fan so I thought instead of trying to compete with this, why not just reach out to them? And there was definitely an element of luck.
I mean I don’t think anybody could have known how much the ChooseFI platform was going to explode into what it has and I just reached out early enough and first off… just early enough that I can get through to them and also as Jonathan was just alluding to, they just had this conversation about turning this into a book and so the timing there was pretty impeccable so there was definitely an element of luck to it, but that’s how it kind of all came about and how it started.

Scott: Awesome, so could you quickly introduce us to the framework that you guys have applied to the concept of financial independence that you kind of lay out in the book?

Chris: Yeah, I mean if I can kind of just describe it in a couple of sentences. I guess what I tell people is you have to kind of learn the rules to know what to do but I think a big piece of that is, first you have to unlearn a lot of rules that people kind of… and I’m kind of like, people are watching this like air quotes like, the people know these rules, like you retire at age 65 like that’s not a rule. College’s the right answer for everyone, that’s not a rule. Your house should be X percentage of your income, that’s not a rule. You finance your car, that’s not a rule yet people just follow these blindly because that’s what they see everybody doing, so we really had to start with deconstructing that and creating a new mindset.
The first section is really about that, is just kind of realizing that most of the things that people just accept and if you just start to question things, you see that things fall apart pretty quickly and you don’t have to follow any of these things and you can kind of choose your own path and do whatever you’d like.

Scott: For me, from all three of you guys. What are some of the things that you question that began to fall apart, maybe when you began to discover financial independence or the concepts here go down the rabbit hole?

Jonathan: Yeah, this is pretty cool, so at least for two out of the three of us that are talking with you guys today, we chose the advanced medical degrees. In my particular case I just thought the key to reach financial independence, really the key was just to have a high end karma [inaudible 00:08:15] to study job at all costs and I didn’t really think about some of the other factors that go into that, so let’s just play this out.
I decided to become a pharmacist and I based that on what I looked back relatively small amounts of information, but I knew pharmacist did pretty well from a financial perspective and that it looked like, at least at the time that the industry was pretty healthy. It’s a pretty good industry to be in and so for me, that looked like four years of undergrad and four years of pharmacy school and getting a doctorate and then I graduated with $168,000 in student loan debt and then I wanted to pay down my loans, because this is the fiscally responsible thing to do and so I took four years to pay it off.
It’s a 12 year loop really just getting back to broke in my very early 30s and it’s fine. You can very easily say, wow, this person now has the entry level six figure salary and they have no debt and that’s a great position to be in. Like it really is. I mean objectively it’s a good position to be in, but in retrospect with all the interviews we’ve done, it’s barely optimized. I mean a lot of people that we’ve met that have figured out these rules and understand some of the things we’re talking about, they are effectively… they can be done by 30 or 30. Scott, you’re going to be done by the time that I was getting back to broke, probably going to keep going and I’ll see you… there’s no retire here, but in terms of becoming financially independent, we know that that standard playbook is suboptimal when you have more information.

Scott: I got a question on that. How does that make you feel when you started questioning these rules and realize that you are going to complete that loop to get back to zero?

Jonathan: Yeah. You feel like just a hamster on a wheel, and at this point I should also say that my job was no longer lighting me up. I think it just didn’t make me happy anymore, not because I was paying down my loans, but just because I didn’t do enough research before I got into the industry and the job that I got into just no longer fulfilled me at all. My counterpart that’s still deeply six figures in debt and has allowed lifestyle inflation to take over, they really feel stuck. I didn’t feel stuck. I just was kind of irritated and I decided to find another ladder to put my wall against, and I came up with a plan… that’s a different part of my story and there’s a lot of hope there for people that have made a choice and feel locked in that you can undo that you can change your story entirely, but you don’t have to.
The sooner you get information, the sooner you find this idea and you can start asking different questions and you can create a different path for your future self. It’s really possible and it’s amazing to me. I mean you inspire me, Scott, your book Set for Life inspired me. It’s the book that I handed to my younger brother… talking about our book, but I mean, your story personally, you’ve done a lot of this stuff. It’s pretty incredible.

Scott: Well, I appreciate it, but I think that that’s a great point here is just like when does that questioning of the rule… the rules of the game begin for people and what I’ve kind of observed is that a lot of people seem to maybe be resistant to questioning some of these things that they’ve applied themselves to for their entire lives and at that turning point I think is a great way to kind of frame the conversation here because if you don’t start… once you start questioning these things in a real way, like have I been approaching my entire way I viewed money and my career the wrong way? Which is a pretty existential question. You can’t maybe make as much progress against this goal as you can once you’ve kind of began going down that rabbit hole. Maybe, Brad, do you have any experience that kind of showcases that?

Brad: Yeah, that’s a great question. It reminds me actually of Gretchen Rubin’s Four Tendencies, right, with the questionnaire. I suspect that questionnaires are overrepresented in the FI community and just going back for me it was questioning what does success look like? All right, so maybe it’s more of like a high level… I can’t point to one particular instance, but I remember being like 22 or 23 and people around me in my accounting firm buying BMWs and I had my like old… this was before I had my-

Jonathan: What were you driving before golden [inaudible 00:12:00].

Brad: Oh boy. I had a brown Mazda and that barely functioned but it got me to my job and I just thought, I don’t know, I never got caught up in the material stuff, in the fancy gadgets or fancy clothes or cars or things like that. Somehow another… and I wish that I could place where the message hit home, but the concept of net worth versus looking wealthy was something that was always on my mind, and I think about my brother, he graduated from Tufts university which is a top whatever, top 50 or better school and he really didn’t have a job after graduation. He had a psych degree and just whatever, it didn’t come together for him right away but he worked at like… I forget, it was a chain called the Ground Round I think. He was a waiter and a bartender.

Mindy: I worked there.

Male: Nice. How cool Mindy. Wow.

Brad: And he saved 90 plus percent of his income because he lived at home. He didn’t have very many expenses and he had at that point, after a couple of years, he had tens of thousands of dollars in the bank and I’m sure every single person who looked at him, walked in there and said, “Oh, this is just some kid waiter.” But yet, he was probably one of the wealthiest people in there, right, but it makes you question society and societal expectations of what is wealthy. What does it really mean? Is it just looking wealthy or is it being wealthy? And I think I’ve always tended clearly towards the latter.

Chris: I mean, I can certainly tell you when my kind of big turnaround, but I mean, I think I naturally was somewhat of a person who questioned things from day one, so my wife and I both came from fairly modest backgrounds and so we were just very anti-debt. We wanted to get out of debt and so we started living off her salary and using everything I made when I was in grad school to try to get us out of debt and then within my first couple of paychecks we were debt free and it was working for us, so we just stuck with that and we lived off her salary and I don’t quite know where we had the wisdom and the insight to do that because none of these, the FI ideas were out there then.
So for 10 years we just lived off of her salary and banked mine, but the things I didn’t question were number one, I didn’t really do a lot of looking into this because normal people like us, we can’t retire at 30 or 40 that just doesn’t happen, so I never really questioned it and then you hear all the time investing is complicated and you have to have an advisor and like there’s so much incentive for the financial industry to make things complicated, so I never questioned that and so I just made mistake after mistake throwing just all this money, handing it to an advisor, never doing any due diligence, never asking question of why are we doing the things that we’re doing and it took me 10, 12 years so I finally woke up and that wake up moment for me was we didn’t think we could have kids and my wife, we found out she was pregnant and it was like wow.
On one hand, like we kind of deep down we always wanted kids, so there’s, we were happy but then we were just kind of on this path where we were going to kind of, we call it like the dirtbag lifestyle. We’re both climbers and kind of ski bums and we were actually just getting prepared to just wing it. We had no financial plan, we had no financial knowledge and we were going to move West and then we found out she was pregnant and I think both of us actually had a little bit of almost depression and I’m a bit embarrassed to say it now was how much… I mean my daughter is the joy of my life, but so we just kind of slid for like six months and then finally I did start questioning and saying I want to retire now even more than ever.
I wanted to have this freedom even more than ever and that’s when I got into the whole [FIRE 00:15:30] movement and that really made me start questioning and it really has kind of transcended beyond finance and made me question why do I believe almost everything I believe and it’s really kind of changed my life and that’s why I’m so passionate about this and that’s why I wanted to write the book.

Mindy: I didn’t question anything. I mean do you question that the sky is blue? It’s blue. It’s blue because that’s what you’re always told and you don’t question that the grass is green because that grass is green, the end. You work until you’re 65. Retirement age is 65. You don’t question that just like you don’t question is the sky blue or is the grass green because that’s just what it is. Water has no taste and milk is white.
Like there’s… so when I did never questioned it, my husband was having a terrible day at work. He questioned it and he’s like, “Oh my God, this is just a math problem.” And you read the 4% rule and you’re like, well that makes sense. It’s not out of the ordinary to assume that you’re going to get eight to 10% return in the stock market on average, I’m not guaranteeing that, but it’s not out of the ordinary to be able to do all these things. It’s not out of the ordinary to grow your investments to $1 million and then be able to live off of $40,000 if you can live off of $40,000 now.
Once you start looking at it in a different way, it’s so easy but until it’s explained to you, until it is introduced to you, if you are not a questioner or until you go find it if you are a questioner, the sky is blue, the grass is green, and you work until you’re 65.

Brad: No, and I certainly agree with what Chris said about this kind of transcending personal finance. I’ve seen this in my own life with my health and fitness and what I’m putting into my body, what I’m eating, right, like you’re saying Mindy, there are just “universal truths”, and we use that tongue in cheek here, but, you see when you experiment on yourself and when you question what actually works in practice and it’s neat to kind of go through life with that as the guiding light of maybe trust but verify, or just experiment. Have fun with that and Scott, I’d love to hear from you actually, if you don’t mind. When did you first start questioning this?

Scott: Yeah, by the way, I think that this conversation is so great because this is… and I love that you started off the book with this concept of like, these are the questions, this is how you get going with this, because I think that you can’t start down the path toward financial freedom without having done what we just discussed in our own different ways here. Now, for me it was, I kind of was lucky to discover this right away after graduating college and starting my first job.
I went to work for the worst company to work for, United States of America. They won an award for this in Business Insider or something like that.

Jonathan: I looked it up after I heard the first time.

Mindy: Officially the worst company.

Male: They [crosstalk 00:18:18].

Scott: [inaudible 00:18:19] so, I look around and I’m three months into the career and I see all these people working the same job and they’re all finance professionals in the finance departments, and I’m wondering like, what’s going on here? Like this is like a choice and I know I’m going to be here for the next several years unless I figure out some way to get around this or accelerate faster. I actually start researching finance in order to be a better financial analyst and in the course of those studies, I began discovering the concept of personal finance and Mr. Money Mustache, the Mad Scientist, a couple of these other podcasts and blogs and that was really what opened my eyes to it.
Where, hey, oh, if you could accumulate a certain amount of wealth, you can live forever on that and to me that was a 15, 20 year journey which was a lot better than a 40 year journey and then over time, as I dug farther and farther into it, I discovered real estate investment, I discovered entrepreneurship, I discovered extreme frugality. How to earn more income, those types of things and was able to find mathematical ways to increase my probability of achieving the goal faster and faster and faster but it all starts I think with just that… for me it was that concept of the 4% rule that, hey this is just a math problem. Once you solve it you’re good to go, and then it be [crosstalk 00:19:34] accelerate-
Jonathan: Just a math problem. That is at its heart what gets me so excited about this, right, because get rich quick is usually a scheme that’s begged behind some level of complexity that has you going ever farther into a funnel with an upsell waiting for you and to get the actual secret, it’s just a math problem then we can focus on the different sides of the equation.

Scott: Well, let me ask you this guys. How do you frame the conversation to attract and get more people interested in this? How do we convert people who are not currently questioning it to begin going down that path so that they can move toward FI as well?

Chris: I mean, I can just say what I did in the book and what attracted me to these guys, what I think they do really well is most people don’t care about money. Most people don’t care about numbers. I think you have to use stories and I think stories will draw people in and I think that’s the key and then having all these different stories, all these different examples and then from that being able to pull out principles that apply.
Like for you, I know you used a house hack and we think that’s an incredibly powerful principle and we talked about that frequently in the book, but there’s a limited segment of the population that are actually going to go do that, so what’s the key to that is, housing is the biggest expense and if you can totally eliminate it, that’s a complete game changer, but if you’re not going to do that, what are the other levers you can pull to lower your housing costs? And there’s a lot of them, you don’t have to house hack.
We kind of went through that with everything, with car/transportation, also with food, with taxes and there’s all these different things. You don’t have to live in extreme lifestyle and you don’t have to do it exactly the same as you or I or Brad or Jonathan or Mindy did, but you do have to do something. You have to take action and that’s really what we kind of emphasize is taking other people’s stories, making your own story, and then getting people to see that you have to take some action, otherwise things won’t change. You can have all the knowledge in the world, but if you don’t take action, you’re going to be stuck.

Brad: Yeah, I agree with that and I think we’ve certainly been talking about this being a math problem and it clearly is, right, but for me it starts as a psychology issue. This is about mindset. It’s about what do you want your life to look like? What are your goals? Can you get on the same page with your significant other if you have one? How do you want to spend your time? For me, whenever I’m looking to get someone into FI, it starts more with what are your goals and what do you want out of life? How do you want to spend time with loved ones?
These are the things that light us up. It’s not… you know, many of us in this call might be math geeks, and we might get some fun out of it, but most people out there that’s not the way to their heart, which is ultimately in my estimation what drives this change, so I like to start with the motivation first.

Scott: Love it. I love that there’s motivation in stories and I think that those are great ways to get through this and maybe we can kind of get into those as we kind of move through some of these principles. One of the principles that I think all of us unanimously agree on that is central to the discussion around moving toward financial independence is the concept of spending less money and reducing the amount of your lifestyle cost, right, and that does two things for you. One, it allows you to accumulate capital faster and two, it reduces the amount of passive income you need to generate in order to sustain financial independence.
What are some of the principals and maybe some of the key tactics that you guys think about when you’re thinking about how to cut your expenses?

Jonathan: I’ll let Chris hop in here, but I wanted to just say like I think there’s two steps in front of that, so one is like it will be helpful for just for our audience to think about this as an equation. I know we’ve covered it in the past and I know you’ve covered on the show, but just as we kind of go through this framework, the equation, right, the simple math problem you’re trying to solve. What you earn minus what you spend is equal to this difference. We sometimes refer to that as the gap and you can work on… focus on any one of those and right now we’re talking about spend less, but if you’re going to start, I’ll spend less, which I agree is typically the place to start.
In order to do that, you have to even take a step back and you have to know how much your life costs and so spend less is always tied to first knowing, and starting, stepping on the scale after Christmas or whatever after the holidays, knowing how much your life actually costs and then you can effect change because you can look for where you are disproportionately weighted and usually if you’re talking about maybe five or 10 years, 15 years of financial drift or you’re just not paying attention, it’s paycheck to paycheck. I can afford the payments, I got this, it’s fine. It’s all working.
It’s going to be painful to start reeling that in. You have to start mapping it out and you can use high tech solutions for this or you can use low tech solutions, so [nopad 00:24:07], or you can use different types of budgeting apps, like YNAB or Mint or whatever. You can come up with your own. Brad probably uses some form of Excel that’s, I don’t know, all sorts of [inaudible 00:24:16]. There’s lots of ways and ways to do this but universally the principle here is if you have financial drift, as with anything you’ve got to do some forensics and find out where your money’s going.

Chris: And kind of the way I think I approach it is, so we talked first about unlearning those roles that so many people “know”, but there are actually rules that you have to learn and I think the first one is just, we talk about the simple math, but math is… those are rules and whether you like it or don’t like it, two plus two will equal four every time. You have to learn basic math and that’s all that savings rate equation is, is you spend less than you earn. Whether you want to be frugal and approach it from the, what’s your spending side or if you want to approach it from the earning side, whatever you do to create that gap, you have to create it one way or the other and it’s just basic math at its core.
I don’t think if you start there with most people that’s going to excite them, but once you get through those limiting beliefs and you get people started, you do have to understand that the rules of math and then that transcends… again, that’s a principal like when you get into investing, fees matter no matter what and through all these different themes the rules of math that doesn’t excite people but you do have to learn that and then there’s just basic laws.
You have to learn the tax laws, is like, I made so many mistakes because I never took a lot of time. I thought that was too complicated and I just threw away tens of thousands of dollars year after year because I never learned the rules. When people sign up for credit cards, people in this community will use travel credit rewards and get free trips around the world but they’re giving away that to us but they still have the biggest buildings because they’re making a lot of money on people paying interest on their credit cards because people don’t learn the rules.
A credit card is not a good or a bad thing, it’s just a tool. A certain investment’s not a good or bad thing, but you have to learn the rules and I think that transcends throughout everything, every section of the book. That’s kind of how I broke it down and then we got into individual things and we can dive into any of those that you want to but that’s kind of how I approached it from a high level looking at it.

Scott: Got it. Yeah. Thank you guys for that clarification. I guess what I’m kind of more wondering there’s, I love this. You’d have a framework that you’re approaching this with, hey these are the rules of the game and all that. Maybe you can kind of elaborate on that and kind of give us an idea of why you chose to focus on the spend less part of the deal first or second in the book, right after the kind of question, everything and just get started. Was that kind of central to your argument there in the work?

Jonathan: Yeah, for me, and I was certainly that, Chris, the actual author of the book talk through this, but for me it’s about accumulating early wins, right, and having those kind of snowball. I think while earn more [inaudible 00:26:41] an essential part of this equation, that is not something you can set into place tomorrow. Whereas with spend less, you can make changes and see, “Oh wow, this isn’t deprivation.” Right. I think that’s what so many people get worried about when it comes to, “Oh, I’m going on this financial diet.” Right, and my life’s going to be miserable. I don’t look at it that way at all. I personally have set up a framework of a life that just simply doesn’t cost that much, and when I do that, then I can spend in other ways and spend on things that I love spending money on.
Scott, you and I have talked about CrossFit. That’s not cheap, but I have no issue spending on that. My wife and I enjoy wine and craft beer. I have no issue spending on that either, so it’s not about depriving yourself. It’s not about pinching every penny. It’s about just finding something that works for you but rest assured, you need to make changes.
If you have no savings or no savings rate or a negative savings rate, clearly you’re never going to get to financial independence, so you have to make changes and there are things that you can do in the short term, like just simply go out to dinner fewer times that week and you can see, “Oh wow, maybe I can make a game of this. Maybe we can get a cheap bottle of wine and cook at home and have a great conversation.” Which is what we’re actually looking to get from that hundred dollar dinner out.
We’re not looking for the fancy food, we’re looking for a conversation, so let’s make the happy hour outside and then eat dinner out in the back porch or something like that and have it… make it something fun. For me, it’s about how quickly can I implement this and how quickly can I see that there’s no negatives to this. It’s only positive. I can get all that I want out of these experiences and save money in the meantime.

Mindy: Yeah. Liz from Frugalwoods has a really great episode of what… she was on our episode 10. She has taken her spending and made it into a game. She decided of course as everybody does, “Oh, I discovered this, I’m going to cut out everything.” And she’s like, “Wow, that kind of sucks to not have, like I really want seltzer water.” And she went from taking a 99 cents seltzer water two liter bottle and now it’s like 0.01 cents a serving because she makes it at home with her little soda stream, but instead of getting the gas from the soda stream, she goes to the welding supply store and buys the big thing of gas and she wanted that in her life, but she didn’t need to keep spending that much for it.
How can I gain this? How can I bring this cost down? She cut out her yoga and discovered that she really missed it, so she looked for ways to continue to have it in her life and just not pay as much for it. She ended up working the front desk for like a half an hour before or after the class and then got it for free, so just because you like something doesn’t mean you have to give it up. Just because like something expensive doesn’t mean you have to give it up. You can find ways to make it cost much less and still keep it in your life but you’ll find other things that you cut out you don’t miss it all.

Jonathan: Yeah and the recent playing with FIRE documentary, [JD 00:29:53] had this amazing quote and he was basically saying, and we use this term internally a lot, what is it in this life that you value? And in this quote that I’m about to reference JD is basically says, find the things that you value and spend lavishly on those, right, but the things that you don’t value cut them ruthlessly and it allows you to put your attention, spend more of your time and your attention to things that really do mean something to you and the problem is when you can afford the payments on everything you value nothing.
You just don’t. It’s just that we can have it all. You’re not sacrificing to get anything in particular, so just doesn’t have the same weight. If you can kind of go through this process of knowing how much your life cost, cutting things almost to the point of deprivation, you can always add it back but it’s really hard to know whether or not you really care about something until you like test the waters a little bit and push the boundaries and so it’s really cool when you let something go and you realize that, wow, I missed that. Then bring it back. Just bring it back. It’s no problem. It’s not forever. You’re finding out what really adds value to your life and in the process you may save a lot of money.

Chris: Just to jump back to Scott’s original question, why did we kind of put spend less first then more and more then invest better? When I started writing, so my story was that we had a big portfolio already. We had a huge savings rate. We had our paid house paid off when I discovered the whole FI thing and so I was like, I’m going to change the world. I’m going to put this out there and everybody’s going to just change everything and I really quickly realized that I was kind of a unicorn like there aren’t very many 35 year olds who have a six figure portfolio where this stuff even matters what a 1% investing fee does.
Most people aren’t saving anything and most people don’t have that gap between whatever they make, no matter how much they make, like I worked in the medical profession. I have a lot of doctor friends and people think doctors are rich, but most doctors just spend up to their income, and so you have to start where people are and so like Brad said, the first thing you can do for almost everybody is you can find something to cut out and you can start getting wins and you need that. You need to develop momentum. I think that’s the place to start.
Earning more is a great concept. I am not a naturally frugal person and I encourage people to look to earn more, but it’s hard to do that overnight. It takes time and the principles we talk about in the book, you can’t just enact them. It’s not a get rich quick scheme. It’s principles that over a year, over five years, over 10 years you’re going to earn more because you’re adding value to people and we teach how to do that, but it’s not going to happen overnight and then until you have investible assets, the investing section is really pretty worthless and I think most people think you get rich by investing and so we kind of made a point of putting it at the end and until you have something to invest it really… not to say you shouldn’t start learning about it early because you can not make the mistakes like I made, but people just get the horse before the cart and I think a lot of times or the cart before the horse.

Jonathan: Scott, if I could actually send this back to you, I’d love your thoughts on this just because your story is the perfect case for this. Like you could not have increased your income overnight, but what mindset, what questions, what skill sets did you develop to get where you are today that allowed the earn more of the equation to be the almost inevitable?

Scott: Yeah so I love it and by the way, like I just totally agree with the premise of that for many people, maybe most who go and want achieve FIRE, that cutting your expenses is the best way to start because typically to your point, Chris, that you don’t have money to invest, getting a high return on nothing is not a valuable exercise, right, and then you can enact it immediately. You can decide what you actually value and focus on that and then Jonathan, to your point, your question just asked here, I see a huge correlation between income generation potential and savings rate and this is something that I don’t think is talked about a lot, but when I left my job earning $48,000 a year to join a startup with fewer benefits and no guarantees, that was me pursuing an opportunity to somebody who’s spending all of their income and has no savings. That’s an unacceptable risk, right, and that difference I think is highly correlated in my mind at least.
This is where I have a controversial opinion about, at the time I didn’t contribute to retirement accounts because I needed that liquidity. I needed that concept. I needed that access, that financial runway in order to pursue the greater income opportunity and the greater career potential. I think that’s why I like to go with the earn more as a kind of secondary focus. That answer your question, Jonathan.

Jonathan: No, it absolutely did and that’s the heart of it. When you have bandwidth in your life, whether it be financial or time, not every… you de-risk your life. You de-risk your life. You’re able to take what other people would view as incredible risk and intolerable risk and turn it into as you pointed out, opportunity and if you can open yourself up to enough opportunity “luck factor” will strike. It’s inevitable and I’ve seen that in people that have worked with us, who’ve kind of picked up opportunities over time. They were positioned very well because frankly they didn’t need us, and this is just very selfishly… but I see that in particular, I’m talking about one individual, his name’s William.
He modeled some of his choices after what he heard you did when you shared your story on our show, and he’s like, if that works for Scott, I can do something similar and he modeled a lot of the decisions he made with opportunities that he positions himself for because of that, if you can open yourself up to that framework, that mindset, control what you can control in the short term, which is your spending, right, and then as a result of that, your savings rate and then you reclaim bandwidth in your life and then you start asking better questions, increasing your zone of awareness, being ready for “opportunity” or maybe some people call it luck to strike. It’s like the external world, but you know that you’ve created a structure for your life that acts as a forcing function for these opportunities.

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Scott: Chris, I love how we just kind of have transitioned here so seamlessly to the income generation part here. What are some of the things that you think about when you’re putting together your values, principles, tactics, tricks, whatever, when you’re approaching that question of how do I generate more income down stream?

Chris: Yeah, so I mean I think the overriding principle that I started that whole section of the book with is, you just have to add value to other people. I think a lot of times we start thinking about how can I make more, how can I get more for myself? And when… again, it’s kind of like a lot of this stuff with FI, just changing the whole mindset and flipping everything on its head but when you think about how can I add value to other people, that value is going to come back to you because they’re going to appreciate it and it may not be overnight and again this is kind of going back to getting quick wins with the spending less. You may not see this as quickly, but if you apply these principles, they almost invariably over time, eventually they’re going to pay off because you’re looking at other people’s needs first and serving them and then the other thing is you’re able to do that because you have de-risked your life.
If you need every last penny to cover your mortgage and make your car payments and pay your life insurance and all these things that most people have in need, it’s hard to necessarily do that, and it can kind of sound like almost like pie in the sky thinking but when you’ve cut your core costs and if you don’t need that next paycheck and you can play the long game instead of having to play the short game and push everything and force things, I think that’s a really big key, so I think all of this ties together. You can’t necessarily just take one thing in isolation, but when you view this whole FI mindset as a overall framework, it just works.

Brad: And Scott, something you said before reminded me, which is increasing the odds of success and I’m not sure if you got this specifically from Annie Duke and her book Thinking in Bets, but I know you and I have both read and thoroughly enjoyed that book and that’s kind of how I think about this is, on the earn more side at least for me, it’s building skills and relationships and I think if I do those things that it’s going to increase my longterm chances of success.
I can’t point to each individual skill or each individual relationship as “Wow, that led directly to this.” But I can tell you over the last, I guess probably 10 years since I first started my first failed… ultimately failed online business. It has led me to the point where now I’m the co-host of ChooseFI and it’s making a difference in people’s lives and I could not have envisioned that when I started a website called [soccertools.com 00:40:47] okay. That was it, right.
I was literally copying in essence or creating my own version of English Premiere League soccer tables, right, the ultimate final results. That was what I was literally doing. I was learning how to do it in HTML. That was 10 years ago, probably almost to the day and here I am. I can’t chart that path for you, but I can tell you that every step and everything I learned in every relationship I built helped me get here.

Scott: Love it. One of the themes I’m picking up here is like again, there’s step by step guides and clear math that goes into cutting your expenses. When it comes to trying to earn more money, there’s only probability. It’s a probability game and you don’t know what that’s going to look like downstream, right. How do you guys think about philosophically the idea of certainty versus potential when it comes to this? Like for example is, do you perceive higher income opportunities to be less certain than maybe that kind of lower base salary or is that a trade off that people are going to have to kind of consider for themselves? Or is that just in my head?

Chris: I think like one of the things we talked about in the book… so now we’re jumping back to the very first chapter, but we talk about instead of looking at FI as like this dichotomy, you are or you aren’t, you’re working or you’re retired. As you progress along I think that mindset changes. I am not a risk taker, like I “retired” at 41 and I rock climb and I ski and I do all that stuff and I think people hear that and then maybe think that, well this guy’s a little bit crazy and he takes risks but I actually… I think I’m extremely conservative and I’m extremely driven by fear, sometimes to a fault and so what have I and progressing along this has allowed me to do is yeah I kind of played it safe and I had a career as a physical therapist where I can make a decent income. We had a high savings and I got to this point where am I FI can I retire.
If I had to follow the draw down and live that lifestyle, I would have been probably scared but I knew I had enough that I can start living into the life I wanted to and taking more chances, so like with this book for example, I’ve gone two years and I basically had no income and I’m perfectly fine and it allowed me to kind of develop this book, work with these guys to find a bigger platform and take all these things, that de-risk thing, because there’s really no downside of, we don’t sell a book. It really doesn’t affect me at all, but we have tremendous upside and so that’s kind of the way I look at risk and I think FI allows me to pursue things that have a lot of upside with really no risk to myself, so that’s I think a key distinction.

Scott: Would you call that playing to win?

Chris: Yeah. Yeah. I think that’s a good way to state it.

Scott: I love this. I think obviously the two parts to this are earn more, spend less, increase that monthly after tax or, pretax or however you’re just… this general rate of wealth accumulation that you’re building. Once you get past a certain point though, the investment, the returns that you generate on that wealth accumulation begin to matter more and more in an increasingly important in this journey to financial independence. How do you guys approach the topic of investing in terms of… from a philosophical standpoint?

Jonathan: Yeah, this is one of those areas where our communities kind of collide and there’s a lot of overlap obviously, but there might be some natural biases on both sides. I think the heart of it on both sides is to keep it simple. You should be able to understand it. That’s the clear place. We’re exactly in the same place and for some people, simple looks like real estate. In your case you’re like, I don’t want to do 401(k)s, I don’t want to invest and you had this plan to take this capital invest it and crush it. You had a clear plan. It was simple. You could explain it and made sense. On my end, simple looks like I don’t want anything to do with real estate right now. I want to keep it very simple, focused on a high savings rate, pay off my debt and focus on broad base low cost index funds and go that for a while.
I think both of those are fine if you’re clear on your vision, you don’t necessarily have to choose but I think the heart there is you keep it simple. People try to sell complexity. They really do. They tried to use complexity as well to hide how much they’re carving away from you, right? Look over here, you know, and I think if you can have a playbook, it should absolutely make sense. You should be able to explain it. You should be able to understand it and that’s really the core, and so for me when I heard a JL Collins, the stock series, the Simple Path to Wealth, for the first time investing was distilled down into something and I was like, that makes sense.
When I decide to invest in a low cost broad based index fund, I’m not picking the winners and the losers, I’m just trying to keep up with the market. When the market goes down, I’m going to go down with it and I’m going to invest the whole time and when the market goes back up, I’m a dollar cost that average into the sunset. It’s going to be great and so what that allows me to do is it removes the fear that I think is also used against you and you see that all the time with clickbait articles that tell you… they’re selling fear and pessimism. They’re monetizing your assurance of your own plan and so I think at its heart, and I think Chris does a wonderful job taking… didn’t say you don’t just have to do broad based low cost index funds that Jonathan and Brad and a lot of the FI community are fans of but here is like a simple version that will work for you and again, find those principles.
If you look at house hacking, what you did… I mean Scott, let’s talk about your story, man. You look and you found a way to cut your housing costs to zero. In fact, live for profit, simultaneous you paired that house near your work so you didn’t need to drive and somehow that also affected your grocery budgets, somehow, I forget the parallel there, but basically you crushed your groceries, your transportation, your housing. That’s like 50% plus of most people’s budget, so in your early 20s when you weren’t making a whole lot, when most people were just paycheck to paycheck, you automatically by default carved out a 50% savings rate.
Are we going to say, “Oh no, you didn’t do it the right way. That should have been in your 401(k).” No, you had a plan and you crushed it and you followed through on it but you also took action. You took action because it’s simple and you could explain it to yourself and explain it to your friends and family and they may not have understood right away but I think they get it now.

Chris: And kind of tying it back to that, you know, you have to understand basic math, so kind of the way I framed it in the book is we took it back to that and Mr. Money Mustache chart with the incredibly simple math and for most people they’re going to… again, they’re going to kind of go to the adviser or go to their 401(k) plan because that’s “what you do” and you only have one lever to pull. You either up your risk by taking on more stocks or if you… they say, well if you can’t tolerant risk, maybe you should put more bonds in your portfolio and that’s literally the only lever and first off, you might change your returns by 1% or so a year and over time, yeah, that’s great but if you’re not going to tolerate risk, so if your portfolio goes down 30% instead of 50% you’re still going to panic, and some people are just not meant to invest in the stock market and that’s fine.
Some people they just don’t make enough money particularly if you live in a high cost living area and you just can’t create enough gap to get to your goals, so you need to have different investment paths. Again, it does come back to math and choosing an investment strategy that A, matches your personal goals and then two, your personality. Are you willing to put in the work to do real estate? Do you have the temperament to sit through big draw downs if you’re a stock market investor, you have to know yourself and you have to know the math and then match the investment strategy for you with what’s going to get you where you want to go and that doesn’t mean you have to choose only one, but probably better to start with one and then you can always branch out too.

Mindy: Possibly the best explanation that I have heard of this is, David Stein was on our show episode 86 a couple of weeks ago and he said, “Look, if you cannot explain in detail what you are investing in, you have absolutely no business investing in that.” And I take that to heart with cryptocurrency. I can’t explain it. I don’t have any interest in it. I should absolutely not be investing in it and I’m currently invested 0%.

Brad: I disagree with you Mindy. I understand the cryptocurrency perfectly, and that’s my nothing in cryptocurrency.
Jonathan: Brad, depends like he does it. I just don’t understand it. Just explain it to me again?

Brad: No, I think there’s a lot to that Mindy, about understanding, right. I can vividly remember an insurance agent coming to my house and trying to hawk. I think it was variable universal life VUL policy and this guy had no idea what he was talking about and I was just like gleefully asking questions because I mean I wasn’t necessarily-

Jonathan: Anything in this world is to watch Brad interact with it, with glee. It lights me.

Brad: I wasn’t necessarily being a jerk, though, I mean there was certainly part of that, but like part of it was also all right. There has to be some essence of, I don’t know, simplicity or truth in anything and if we can get to that and I can understand it and understand why this makes sense for me, then great, I’m going to look into it but we couldn’t get to that point. I’m fairly confident that I made the right move walking away from that. In fact I’m 100% competent obviously but-

Mindy: I was going to say I have no idea what it is and I’m 100% confident I made the right move.

Brad: But for me, my bias is longterm. Like everybody’s been saying here, you have to know yourself, you have to know your plans, you have to know your strategy. For me, it’s longterm. When I was introduced to index funds and the power thereof by Jim Collins, as Jonathan mentioned, that just seemed like a fundamental truth to me and if I’m going to invest in the stock market over a 50 plus year period, I think my highest probability of success is through index funds. I sleep very well at night invested in index funds and I understand that over a short period of time there’s a theoretical chance that I could do better investing in individual stocks or trying to pick a mutual fund that might outperform but I’m fairly confident over a 50 plus year period that my plan works for me and is going to give me a very high probability of success.
Again, is how I approach it mentally and I think at the end of the day, if you can sleep soundly with your plan, then it’s the right plan for you.

Scott: How do I go about doing the research or putting together that philosophical foundation to lay a plan, whether it’s index funds, real estate, what’s your kind of advice in thinking through that?

Jonathan: Well, I mean, I think part of it is making sure that you can explain it to somebody else and it’s absorbing the information until you feel very comfortable with it. I think most of us look for people that have done this to some degree and that provides some feedback loops, some confidence that comes with that. I would say in terms of like the investment strategy does this work. I think that JL Collins wrote that stock series for his daughter and had zero interest in investing whatsoever and so he created as one an unassailable yet simple philosophical discussion on why he believed this was the best path for someone that isn’t interested and wants to keep it simple.
I’ve talked to his daughter once or twice and it feels like, it didn’t work right away. She wouldn’t interact with them. Had no interest and over time, especially as she’s seen many, many other people looked at this as a source, it’s grown on her and now they’re able to talk about this and it’s really like a wonderful relationship they have and it’s something she still isn’t super interested in it but she trusts that it works, right. I think it takes a couple of touch points. Have you ever noticed Scott, as far as you’ve come with BiggerPockets, it’s like to some varying degree you can go back and you can tell your friends and your family about this concept of personal finance and financial independence and financial freedom and you just can’t get them to listen.
Like they just don’t care and you’re like, don’t you realize what’s going on how amazing this is and how awesome is this? And they don’t buy in right away but then maybe they hear other touchpoints and other people and maybe they listen to a podcast or radio show or… it starts coming at them from other directions and over time if he can go from, you only live once, right, which is kind of this bumper sticker to you’re born to do more than pay bills and die, which is financial independence, then it starts to click and it starts to shine through.
What I love that Brad does such a great job highlighting is understanding people’s motivations and incentives. What is it that they get excited about? And that takes the relationship and it takes some time but I think if the message is simple and it’s core it’s fundamentally right, then it spreads. I mean, and that’s what we’ve seen with this community. I think you’ve been able to kind of over time through different messengers and the diversity of experience, you’ve been able to say what is the pattern? And kind of shed the stuff that’s just extra.
It’s just dead weight that’s holding on and holding the message back and really get to something that has the ability to change lives and that’s why I get excited that people are talking about this with the intensity that they are is, it’s an important conversation and I think it is halfway a philosophical one.

Brad: Yeah and for me it comes back to understanding information sources. You can take in every piece of information, but you have to be able to discern what is true or closer to truth and what is just junk. A lot of people are trying to make money off of you, right, there’s a financial incentive, there’s some motivation that they have. For me, I’m looking for information sources that are as unbiased as possible. Everybody has some level of bias, but I’m looking for people that I think are aligned with me and are not trying to enrich themselves off of me, so that’s kind of my general framework for approaching information and why we’ve mentioned Jim Collins multiple times. He’s provided this wealth of information and he’s looking to get nothing off of me. He was trying to educate his daughter, so that makes sense to me, right.
I think a lot of things and a lot of gurus, and there’s some secret behind this that you have to pay the $6,000 upsell for. Like that doesn’t inform my life and my life philosophy. It just, it can’t. That’s kind of… I think hopefully Scott, this is getting to the heart of your question is like just like how I approach information. Again, it goes back to what I said probably half hour ago, which is, just in my own life I look for patterns, I look for information that seems true based on multiple sources of information that I’ve taken in. I try to experiment low level where it’s not going to necessarily be a huge detriment to me and that’s both financially and health wise.
I think that’s kind of the general framework at least with which I approach it and obviously I can’t tell you or Mindy or every listener out there like these are the sources. Those are the sources for me but I think if you look at incentives and motivation, I think it’s hard to go wrong with that as an initial foray.

Chris: Yeah, I think the only thing I could add to that is just starting with the end in mind, so does this even make sense? Is this a path worth going down for me? And then I totally agree with what Brad just said just to kind of reiterate a couple of key things but like I also… JL Collins was my intro to understanding how to invest, but I think some people think you can read it and because JL Collins said it, it’s the truth and for me, my initial thing was, well first off who’s JL Collins? Like anybody can write anything on the Internet, so he talked a lot about Vanguard, so I wanted to go right to the horse’s mouth.
I started reading John Bogle’s books and then I got into the Bogleheads and there’s a lot of different theory within that and I don’t think any of us know what is going to be the optimal portfolio or the optimal path until you are 40 years down looking back but you can go in knowing why you’re doing it and that’s going to make you stay the course, which is very important and not jump from thing to thing chasing the next hot trend or the next hot idea. If you have the principles and the foundation. I think that’s the key as far as investing goes.

Mindy: Yeah, I think it is a sure fire way to guarantee massive losses by chasing the next sure-fire thing, the next hot stock tip because the people who are telling you that are either trying to dump their own stock and running up the price so they can drop it or they just don’t know what they’re talking about and I think it’s a lot more of the latter than the former. There’s just no shortage of bad information out there. I got a hot stock tip just a couple of weeks ago and it turns out to not be so hot. Spoiler alerts.

Jonathan: Yeah, normally it’s Facebook ads, will run for cannabis and crypto in December of this past year. I mean, that’s the sort of pattern that you see and when you see it everywhere to the point where it’s noise, where you can’t it’s… you know something’s coming. It’s terrifying and so what if you can just ignore the noise and focus on a simple path that’s very encouraging and allows you to stay the course with confidence.

Mindy: Yeah. Here’s a pro tip. Don’t get your stock tips from Facebook.

Male: Print it.

Mindy: Yeah. When the cryptocurrency was like running up and Bitcoin was at 20,000 or whatever it was, I watched in my… I’m in a lot of these different financial Facebook groups and I’m just scrolling through Facebook. It’s like, let me teach you all about Bitcoin. I know you don’t know anything about Bitcoin because I’ve been following you for years. Like this person would say, “I’ve got a course on it and here’s my post.” And it’s like, no and then as soon as that goes away, then you see all these other things. Oh look at what I’ve done. I bought Amazon. Wow, how do you make money on Amazon? What a surprising stock tip. There’s just some things that you’re like, I know you don’t know what you’re talking about. Facebook is not a place to get stock tips.

Jonathan: I was talking to someone recently and they were telling me… in this case they were referring to their parents, but I think this is one real thing. The great thing is if you find this young, you have time. The great thing is if you find this when you’re a little bit older, you also have time and I think one thing as you’re finding this in your like, later 40s man, you’re like, oh, this is great. I found in my 20s but now I need to do better than average. Now I’ve got to get better than market returns. Now I need that hot tip, I’ve got to make up for the last whatever, and that’s… when you start thinking like that, that’s really when you get taken advantage of because somebody can play off that and they can tell you, here’s how to get a 720% return. Here’s how you can double your money overnight. Here’s how you can use a highly leverage deal to crush this [inaudible 00:58:53].
As soon as you start hearing that, I’m going to crush this game because I’ve got a secret tip and they’re probably selling you their secret tip, you’re going to get played. The great thing is while get rich quick usually ends up with you bitter and your money in someone else’s pocket, again, it’s just a math problem. If you can keep it simple, if you can understand it, if you can explain it, this is going to end out really well and your 10 year future self is going to be giving you a standing applause. That’s what you want. Can we make small choices that lead us to a better place? Don’t get sucked up on this [FOMO 00:59:25], where you have to do this last minute thing because of this incredible return opportunity.

Scott: I think the key that I’m picking up here is this longterm focus that you fundamentally understand and I can say that this is what I try to apply in my own approach to investing and basically all the other components of wealth generation we got here, like longterm how do I keep my expenses really low? How do I make choices that keep them low? Longterm how do I increase my probability of greater and greater income generation? Longterm, how do I make sure that I’m going to earn a solid longterm average return, right, and stocks are a great way to do that. Index funds you know… not you know but I presume that I’m going to get that close to the 10% compound annual growth rate that the S&P 500 has produced over the last 100 years.
If you’ll disagree with… we can get into arguments about that number all day long, but just that presumption of like, what is the correct longterm decision here? And then what’s amazing has been as I’ve applied that thinking the short term wins seem to be piling up as I’m applying that long term philosophy there.
Jonathan: That’s great. Just because you make actions now, you don’t just see the results when you’re 65. You have the 65 year old mindset, right, but you get those wins all along the way, but they don’t change your investing decisions. You set your course. It’s great to point that out.

Scott: All right. I’m spending a lot less money. I’m earning a lot more money and I’m investing according to a proven longterm philosophy that I understand completely. What happens then? What’s the final step here with all this?
Jonathan: I think this is something that Chris struggle with a lot and he’s still struggling with to some degree. This book, in some way was a way to kind of highlight that. I think at its core, the thing that we’ve all kind of latched onto in our community seems increasingly embrace it. This is not, what are you running from? This is about what are you running to, what does it look like to design your future? And I think for many of us that doesn’t look like retirement necessarily although that may be the initial question that certain of us in this room I’ve looked up at one point or another, but it does look like crafting a future that you can get excited about, so Chris, I think of the ones at this little [pow 01:01:27] here, you are the only one that is technically “retired”, right?

Chris: Yeah. I think I was all in on that idea that retirement was the goal when I was all about doing that and even now one of the blogs that really influenced me, and this is my now home on the Internet, but it’s called Can I Retire Yet? I literally started with the question being that simple, like I cannot wait to escape this kind of life that I’m living. I wanted something different and we talked about, we were just going to kind of live this kind of outdoor dirtbag scheme on lifestyle and then once we found out we had my daughter, we became much more serious about understanding the technical aspects, but it was still about escape and it was about retirement at that point in a traditional sense and like now on the blog, on our header, because my blogging partner he started this site and he had retired by 50, so we just added me up there and put retired by 41.
People just really get bent out of shape if you say you’re retired and you’re doing anything or like… I’m a stay at home dad or I’m a writer or I’m anything but retired and people get really bent out of shape and I mean, as I look at it, as I stepped back when my original goals for doing this, I wanted to be involved with my daughter. That was probably my primary goal when we got serious. I mean we spend so much time together, we go to every school event, we ski with her, we ride bikes, we do all this stuff.
I wanted to have time for myself. I see so many parents that they choose between being a good parent and giving up yourself or being selfish and kind of not being the greatest parent. I’m able to get out and do these things, seek adventure, do the stuff I want to do and at the same time I can write a book and I can contribute on my blog and I can do these other things that have impact, and so if that’s not really retired yeah, then guilty but yeah, I mean people just really struggle with that and they’ll give you a lot of pushback because people have this vision of retirement and again, that’s one of those things that there is no rule of what retirement is, but certainly people have pretty strong opinions and feelings about it.

Male: I always envisioned it as a set of incredibly risky hobbies like you.

Chris: Yeah. I guess I’m a little bit abnormal there. You won’t see me on the golf course very often.

Male: Me neither.

Mindy: Same. I liked that you said this, Jonathan. It isn’t about the retire early part. I have had jobs that I absolutely hated and I don’t have that anymore. I can’t imagine quitting right now because I do have children, but they’re in school and I said this a lot. They’re in school 35 hours a week for 40 weeks a year. I work almost those exact same numbers, so it’s not like I’m giving up time to be with them and I get to do this. I mean, this is not a hard job. This is a fun job and I actually feel guilty. I say this frequently and it’s not just a soundbite.
I feel guilty sometimes when the girls are downstairs at the kitchen table fighting with each other and I’m getting ready to go to work and I’m excited to get to work because I love what I do. I feel guilty as I’m walking out the door. Bye sweetheart. Have fun wrangling the fighting girls. I’m going to go talk about real estate, which is my favorite thing. I can’t imagine quitting and anybody who thinks that I am any less financially independent because I have a job, I don’t care what they think.

Jonathan: I love your story Mindy. Can you ever imagine working in a job that you didn’t like at this point? Like with your ability to do anything or not do anything, can you imagine being in a… is there any possibility that you would ever be in a job that you didn’t enjoy at this point?

Mindy: No, because if it stops being fun, I’m going to stop being there.

Jonathan: The amazing thing is the financial independence. There is no downside to having more options in your life. That’s the entire premise for this.

Mindy: None. You can like your job and still pursue financial independence. My sister is a teacher and she loved her job and then some things changed and she’s like, wow, now I understand what you’re talking about. She doesn’t have the option of leaving her job because she isn’t financially independent. I mean she’s a teacher. Come on.

Jonathan: I think some teachers can be financially independent.

Mindy: Yeah, no, you’re right, no. Teachers can be financially independent, but we pay them so little and I think they deserve million dollar salaries. Anyway but yeah, she never planned for retirement because she loved her job so much. That’s the best time to plan for early retirement because when you love your job, you can envision doing it and financial independence isn’t this like desperate slog that you’re tying to get to at any cost but when you hate your job, you’re like, “Oh my God, how can I get out?” And it’s kind of all consuming.

Chris: Yeah. I think Scott touched before on like playing to win and my wife has a situation very similar to kind of the decision you made when you went to BiggerPockets but… so her company that she works for now, they reached out to her so like… first off when I tell people her working conditions, I think a lot of times people don’t even believe me, but they reached out to her. She didn’t reach out to them so like they said, “Where do you find this job?” Well you don’t, they found her and then it was kind of risky.
She was the seventh employee going there so if we needed the income and we knew that we needed her to have a job that was going to succeed, she probably wouldn’t have taken it so we would’ve stopped right there but then it allows her to work remotely. Our company’s out of Northern Virginia. We live in Utah, so that was the next step. It gave us location independence.
I was like, well, maybe this is worth taking the risk and then it was like, well, they wanted her to work full time but we said that’s to nonstarter because she was already working part time. This was after we had our daughter, so we said, “Well, what if we work 30 hours a week?” And they said, Well, we want full time.” She said, “Well, I don’t think I’ll do it.” And they said, “Well, okay, we’ll give you 30 hours a week.” And then we still couldn’t solve the healthcare problem. So, we said, “If we work 30 hours a week, can we get health care?” And they said, “Yeah, I think we could swing that.”
I mean, when you have this ability to play to win, you can kind of create working conditions so good that why would you retire? And that’s kind of where we’re at now. Yeah, I mean there’s just so much… it all builds on each other and you’re not going to see this immediately and you really have to kind of play that long game but if you do things for the right reason, for the long enough, these things do happen and her exact situation, is that replicable? Absolutely not. It’s a tiny company and 10 people, 20 people in the world work there now, but can you find something similar if you’re willing to play that long game? I think it is very replicable for a lot of people.

Jonathan: Well, this goes to the fact that you get a lot of the benefits of financial independence long before you reach it. That control is continually coming to your side of the equation to your side of the court and just a couple examples just with people that we’ve met and just in the last couple of days that have been listening to our show, one of them said… well actually here’s a very recent example. I had asked Brad, “What’s something that you think you can’t do? Just anything.” Something you can’t… I can’t travel with my kids because they’re in school. What would it look like to be able to flip the script on that and just be able to do it? What were the questions that you would need to get answered and he kind of went through a list of things that he would have to research in order to go to pull that off.
Someone in the audience listened to that and for them it was like, how do I spend more time with my kids. While I’m working full time… it’s her and her husband both work. The kids are in afterschool daycare and [inaudible 01:08:13]. Yeah I have to pay for the afterschool daycare. Maybe if I could just work remote or reduce my hours, something like that, and they realize the worst the boss could say is just no, right. The boss can just say no, in which case they can come up with a plan. They have other options. They could look to do something else, but like they want this, this is now a priority, so she went to the boss with that mindset in mind, I have the control. I don’t need this job. I could replace it with something else. We’re fine. We’re in great shape. We live well below our means and we have a great savings rate and a great savings and she took him her list of demands and the boss immediately said, “Yes.” And now what does it look like?
Now she’s able to get the same pay she’s getting now, she’s able to cut in her actual in office hours by a 25% and the rest is just remote. That means that her kids now actually get to come home with her. She no longer has to use afterschool care and so she’s effectively getting a raise. A raise and more flexibility in her life just because she had that power and she wasn’t afraid of no, and she wasn’t afraid of no because she had bandwidth in her life. That’s opportunity. It didn’t rely on her hitting on a number but it did rely on her saying, my employer needs me more than I need them.

Brad: Yeah and clearly for us FI is about options. It is about accruing that power. It’s not about this binary, I’m not at FI or I’m at FI. That’s a silly way to look at this. You accrue power and options all throughout this journey. Every step closer you have more of that and I think that is just… Scott, it actually goes back to my answer to your question about cutting expenses, like it’s those wins. When you can rack up those wins and stack them together, you feel this sense of empowerment and then it becomes real, right. Like think about how much more powerful you are with 20 grand in the bank. 50, 100 right, then you start getting into huge numbers, right.
Think about how many more options you have. For me, the RE in this FIRE acronym, that’s kind of cute. That’s the only reason at this point where we keep it around at all, is that it has a neat little ring to it.

Jonathan: The FIRE is spreading.

Brad: Right, I mean that is the only time we mention the RE because it is a distraction otherwise, because people get bogged down in this nonsense of what’s retirement and what isn’t. I think that’s just absurd. What we’re talking about here is financial independence and that’s why we’ve called our podcast and this book ChooseFI, you’re making a choice to pursue financial independence and that is extraordinarily powerful.

Scott: Yeah. Love it and my favorite thing about this… yeah, I’ve said this a million times is, the point of this, the point of why I do what I do and why you guys do what you do and why we’re all such zealots about this financial independence thing here is, you’re using the word power. I’ll use the word potential. Your ability to realize your potential continues to multiply the farther along the spectrum that you go and maybe this controversially, the earlier you go about producing the situation… so that the further you can get along the path to FI and the earlier you can do it, I just believe that that gives you that much more chance to realize that potential and leave that mark on the world, whatever that is downstream.
This is a multiplicative effect that I think can change the world over time in increasing odds each passing year. The more people that become financially independent and that’s kind of the mission. That’s the whole point of BiggerPockets… BiggerPockets Money. All the stuff I do is to enable that reality to come about and I think it’s good. That’s just the way it should be so…

Jonathan: We love working with you guys on this. I think it’s a big project.

Scott: Yeah. All right, well I think this has been a great discussion and we should probably transition to our closing segment here, which I think we were not going to do the Famous Four that we always do because… a Famous Four multiplied by three, too many.

Jonathan: I knew I was coming on the show, Scott. I knew you were going to ask me a joke and I don’t have any jokes. I was like Googling them, so I can have something [crosstalk 01:12:09].

Scott: We’re just going to ask you to tell us jokes. It’s exactly [crosstalk 01:12:11].

Jonathan: And I got this [crosstalk 01:12:11]-

Mindy: I was going to say it’s the famous two.

Jonathan: Famous two.

Male: Jonathan I’ll do my joke as well.

Jonathan: I’m just going to do one. You get one joke. It’s all you. I got this off. I’m reading. This is on, budgetsaresexy.com. He has funny money jokes, so there’s a bunch there. You’re ready for it.

Scott: All right.

Jonathan: Alright. A frightened investor goes to his financial planner and ask if he’s at all worried about the volatility of the market these days. The planner replies that he sure does. In fact, he says that he sleeps like a baby. The frightened investor was amazed. Really? Even with all the fluctuations. Yup. I sleep for a couple of hours, then I wake up and I cry for a couple hours.

Male: Well, he needs to read the Simple Path to Wealth.

Jonathan: He should read the Simple Path to Wealth.

Scott: Hi Brad. We’re expecting big things here. What you got on this [inaudible 01:12:56].

Brad: I’ve got nothing. Isn’t this where Mindy’s extra list comes in handy?

Jonathan: Come on Mindy.

Mindy: Yes. Okay. I went into a pet shop and asked for 12 beads. The shopkeeper counted up 13 and he handed them over. You’ve given me one bead too many. He said, “That one is a freebie.”

Male: Ah, I see what you did there.

Mindy: That’s from Dad Jokes on Twitter, which is @dadsaysjokes, which I actually kind of like, even though I hate these debt.

Chris: This was our breakfast conversation. I told my daughter I was doing this show. I said, “You’ve got to give me your best jokes.” She’s six and this is high risk over the internet, but I’ll give it a go. Knock, knock.

Jonathan: Who’s there?

Mindy: Who’s there?

Chris: Interrupting cow.

Scott: Interrupting cow who?

Chris: Moo.

Male: Ah nice.

Male: I was just trying [inaudible 01:13:48] get that with the timing I was a little nervous.

Brad: I’m just going to get a new cow joke. What do you call a cow who jumps over a barbed wire fence?

Mindy: I don’t know.

Jonathan: I don’t know.

Brad: I’ll do a destruction.

Jonathan: Oh God, oh no.

Scott: And on that note it’s been fun.

Male: This is a lot of cow jokes.

Jonathan: Mindy, does he have a list in front of him? Does he have these memorized or does he like look them up in the background?

Male: I recently discovered Instagram and I’ve been posting finance jokes to Instagram [inaudible 01:14:15] effect.

Jonathan: Oh no.

Mindy: Okay, I have one more.

Scott: It’s a [inaudible 01:14:21] underscore Trench everybody if you-

Mindy: Nice, well played [inaudible 01:14:24].

Chris: I was just going to say my original blog was called Eat the Financial Elephant and it actually came from reading a highlights. I had a patient with her granddaughter and I was reading a highlights and I was like the riddle, like how do you eat an elephant? And it’s one bite at a time. That’s actually where my original blog came from. I have a history of reading highlights for the jokes.

Jonathan: Awesome.

Male: Love it.

Mindy: Well, you and Scott will be very good friends then. Those jokes are terrible. Okay. Now here’s the last question because they did say it’s the famous two. Well, I guess it’s more of a command. I liked calling it a question but Scott didn’t like that so tell me-

Scott: Because [inaudible 01:14:58] more questions and then have five questions, so you have to do four questions to command or [crosstalk 01:15:02]-

Mindy: That’s what makes it funny.

Scott: You could change it to five questions.

Mindy: No, it’s the Famous Four, the same five questions we ask everyone. That’s what makes it funny.

Jonathan: All right. I’m sure you’ll get it worked out.

Mindy: Chris.

Male: Make sense.

Mindy: Tell me where people can find out more about you, that’s my command.

Chris: My home on the internet is at caniretireyet.com. That’s the best place to find me and I’m pretty responsive there and obviously I’d love everybody to check out the book, choosefi.com/book.

Mindy: And then Jonathan and Brad. I’ve heard that you guys are online somewhere.

Brad: Yeah, we have a podcast called ChooseFI and as Jonathan is holding up the book here for the YouTube audience, this book releases October 1st and yeah, you can find it anywhere books are sold but yeah, like Chris said, if you head to choosefi.com/book it’ll forward you to the appropriate place. So, yeah, we’d love for you to check it out.

Scott: Yeah, I just want to chime in that, love the book love your guys podcast and for those of you listening, I know that a lot of folks who listen to BiggerPockets Money also listen to chooseFI and I think vice versa as well and so I think that there’s a lot of complimentary information that we kind of share from time to time, so definitely encourage everybody to check out both shows if you’re continuing… interested in getting even more financial independence content because we’re big fans of you guys.

Jonathan: Well, we obviously do more than reciprocates, Scott, we love what you and Mindy I’ve created both in the BiggerPockets [inaudible 01:16:24], but also with BiggerPockets Money. I think the flavor of your show is phenomenal and we hope everybody in our audience comes to check it out.

Mindy: Okay. Chris and Jonathan and Brad, thank you so much for your time today. This is really helpful and very exciting. I’m so excited for your new book. I know you’re going to sell a batrillion copies so-

Jonathan: A batrillion.

Mindy: A batrillion. That’s a new word that I just learned.

Male: [crosstalk 01:16:44] people are going to go check it out from the library, right?

Chris: Yeah. Well we are… I was just talking to Brad this morning, I was asking have you or [Alar 01:16:52] put in the request there? It does need to be in the library. We need to make sure it’s there.

Mindy: Request it from the library.

Jonathan: But you get a copy for a friend because [inaudible 01:16:57].

Scott: Buy the book and request it from the library. Yes, please.

Jonathan: There you go.

Mindy: There you go.

Chris: Batrillion is a big number, so we got to hit it from all angles.

Mindy: I hope you guys printed it up. Everybody is going to buy 12.

Male: But on demand provided courtesy of BiggerPockets.

Mindy: Okay, and with that we are out of here.

Scott: All right. That was just all of the people from ChooseFI. Mindy, what’d you think?

Mindy: I loved it. I loved it. I loved talking to Brad and Jonathan. They’re such genuinely nice people and all they want to do is help you become financially independent too. The book is fabulous. I think the content that they are going to bring to the world is exactly what the world needs to hear.

Scott: Yeah. They’re very thoughtful and careful about how they kind of articulate their thoughts as well, I really appreciated that. You could tell there’s a lot of experience and thought and knowledge that they were drawing on every time they answered a question from us, and really appreciated that and learned quite a bit here, so bit privileged and like I mentioned, their philosophy I think really manifest itself really well in their new book.

Mindy: Yes. Do you do have it right there in front of you? I thought you were-

Scott: I do. I did get an advanced copy, had a hardcover, the Choose FI: Your Blueprint to Financial Independence.

Mindy: Available wherever books are sold.

Scott: Yes. That’s right.

Mindy: So, Scott, our show ran really long because when you get five finance nerds talking, they talk for a really long time. We should get out of here.

Scott: Let’s do it.

Mindy: We should say thank you to all of our lovely listeners who have spent time with us over this last hour ish, and from episode 92 of the BiggerPockets Money podcast. I am Mindy. He is Scott and we are out of here.

Scott: Goodbye.

Mindy: Goodbye.