Bogleheads® Conference 2024 FIRE All Stars with Jeske, Pant, Grumet & Mecham

00:00:00.000 | (audience applauding)

00:00:03.160 | - All right, everyone.

00:00:06.400 | Welcome, and thanks for being here.

00:00:08.520 | My name is Gauri.

00:00:09.440 | I'm on the board of the John C. Bogle

00:00:11.680 | Center for Financial Literacy,

00:00:13.840 | and we are thrilled to have this panel of FIRE all-stars.

00:00:18.840 | Their bios are ubiquitously available,

00:00:21.400 | so I'll just touch on a few key points,

00:00:24.680 | starting with Paula Pent.

00:00:26.520 | She has a master's in journalism from Columbia University.

00:00:31.520 | Her first job out of college paid $21,000,

00:00:36.280 | and when she left her last job working for someone else,

00:00:40.040 | she was making $31,000.

00:00:43.080 | She quit work to travel the world,

00:00:45.480 | start the Afford Anything podcast,

00:00:48.240 | which has, get this, over 30 million downloads,

00:00:52.680 | and she recently recorded her 500th episode

00:00:56.840 | a few months ago.

00:00:58.360 | We're very grateful to have Paula.

00:01:00.080 | (audience applauding)

00:01:03.360 | And she also owns a few rental properties,

00:01:05.520 | so she has unique firsthand insight with rentals.

00:01:09.640 | Next, Karsten Jeska has a PhD in economics

00:01:14.520 | from University of Minnesota.

00:01:16.680 | Shout out to Minnesota.

00:01:18.540 | (audience applauding)

00:01:20.240 | He's worked at both the Fed

00:01:22.360 | and Bank of New York Mellon Asset Management,

00:01:25.360 | and he's taught at UC Berkeley as well as Emory.

00:01:28.680 | He retired in his 40s, having achieved FI,

00:01:33.160 | and he has over 60 blog posts of over 200

00:01:37.760 | that address sequence, safe withdrawal strategies,

00:01:42.760 | and he has a CFA, so he definitely knows his numbers.

00:01:47.560 | Next, we have Jackie Cummings Koski.

00:01:51.200 | Jackie is a CFP and also the author

00:01:54.880 | of Wiley's Fire for Dummies.

00:01:56.880 | They could have chosen any luminary in the fire space.

00:01:59.840 | They chose Jackie.

00:02:01.780 | Jackie also escaped poverty, divorce,

00:02:05.920 | and single parenthood to achieve FI in her 40s,

00:02:10.600 | so she will provide unique perspectives

00:02:13.200 | from all of those aspects.

00:02:15.420 | And then we have Dr. Jordan Gromit,

00:02:18.000 | who folks heard in the last panel.

00:02:20.080 | Jordan is a hospice physician,

00:02:22.560 | so he has unique insights on what folks regret

00:02:25.560 | and don't regret towards the end of their lives.

00:02:28.200 | He's written over 1,000 related blog posts,

00:02:32.160 | and he has a lot to share on meaning, purpose, and identity.

00:02:35.720 | He is the author of Taking Stock,

00:02:39.480 | a hospice doctor's advice on financial independence,

00:02:42.740 | building wealth, and living a regret-free life,

00:02:45.280 | and he has another book on its way.

00:02:48.040 | So with that, we thank the panelists.

00:02:50.400 | (audience applauds)

00:02:53.400 | We're gonna try to touch on things

00:02:57.600 | that are less covered in the space,

00:03:02.520 | but we'll also keep it foundational

00:03:04.280 | for folks new to the space.

00:03:06.200 | So we'll start with, what's the most useful,

00:03:08.840 | atypical, personal finance advice you'd like to share?

00:03:13.040 | Start with Paula.

00:03:13.960 | - Sure.

00:03:14.800 | I'd say the most atypical personal finance advice

00:03:20.640 | is to embrace spending,

00:03:22.520 | because I think there's this myth

00:03:23.920 | that being quote-unquote good with money

00:03:26.840 | means, oh, you just don't spend it.

00:03:29.480 | Save as much as you can, hoard as much as you can.

00:03:32.080 | The higher your savings rate, the better.

00:03:34.480 | But in fact, being good with money

00:03:36.800 | means aligning your money with your values.

00:03:40.400 | And so to the extent that you can spend your money

00:03:42.520 | on what you value and don't spend your money

00:03:45.440 | on things that society pressures you to spend on,

00:03:48.160 | but that aren't actually important to you,

00:03:51.040 | the better you are at being a capital allocator.

00:03:54.440 | - I think my entire blog is atypical advice,

00:03:57.480 | but if I had to pick one, I would probably say

00:04:00.160 | that if you do a safe withdrawal strategy in retirement,

00:04:04.600 | you want to personalize that, right?

00:04:06.120 | So you want to take into account your personal parameters,

00:04:08.520 | your horizon, how much requests do you want to leave,

00:04:12.320 | how many gifts do you want to give along the way,

00:04:14.640 | what kind of additional cash flows are coming in or out.

00:04:18.240 | That makes a huge difference.

00:04:19.360 | So just the 4% rule of thumb

00:04:21.160 | is probably not gonna work for most people.

00:04:22.640 | It's a good starting point,

00:04:23.840 | but you should customize it more than that.

00:04:26.080 | And then on top of that,

00:04:26.960 | so in addition to these idiosyncratic parameters,

00:04:29.200 | you also want to look into market parameters, right?

00:04:33.360 | Are you retiring at the peak of the market

00:04:35.400 | or at the trough of the market, right?

00:04:37.640 | Safe withdrawal rate can't be 4% all the time, right?

00:04:39.960 | So you want to be more cautious.

00:04:42.160 | If you're at the peak of the market,

00:04:44.200 | you can probably retire with a lot more than a 4% rule

00:04:47.640 | if you're retiring say in 2003 or 2009

00:04:50.680 | or at the bottom of the market in 2022.

00:04:52.920 | So that's my atypical advice that shouldn't be atypical.

00:04:57.360 | - Okay, thank you.

00:04:59.800 | - I think atypical for me, it would be starting,

00:05:04.800 | like when you start your fight journey

00:05:07.520 | or you start getting your finances together,

00:05:09.920 | start with the thing that lights you up the most,

00:05:12.160 | the things that actually will get you moving.

00:05:14.800 | Traditional thought is, oh, start with a budget,

00:05:17.440 | start with your expenses.

00:05:18.400 | And that's true, but if you freeze in your tracks

00:05:22.200 | and you procrastinate

00:05:23.360 | 'cause you absolutely hate that thing,

00:05:25.560 | you're never gonna like move forward.

00:05:28.000 | So at least start with the thing that you like the most.

00:05:30.680 | For me, that was investing.

00:05:31.960 | And all this personal finance stuff comes full circle.

00:05:34.520 | So you'll eventually get there.

00:05:36.280 | But I say, start with what is going

00:05:38.720 | to actually get you moving.

00:05:41.160 | - A lot of people dream about FI

00:05:44.440 | and whether they achieve it or not,

00:05:46.080 | sometimes it's very different than their expectations.

00:05:49.080 | What doesn't FI solve that people expected it to?

00:05:53.760 | And what does it solve, whether expected or not?

00:05:56.880 | - So these are related answers,

00:06:02.560 | but what it doesn't solve,

00:06:04.200 | and let me give, before I give you the punchline

00:06:06.960 | to that answer, I'll give you some context.

00:06:09.280 | Many people I know use FI for a well-funded career change.

00:06:14.280 | So they don't necessarily want retirement

00:06:19.520 | as defined as a complete permanent

00:06:23.200 | and irreversible cessation of income.

00:06:28.200 | They're not looking for retirement in that context.

00:06:32.040 | They're looking for a career change,

00:06:35.520 | perhaps to something that's much lower paying,

00:06:38.800 | but that is very well-funded

00:06:40.400 | where they have financial security.

00:06:42.440 | What, and anecdotally, what I've seen a lot

00:06:44.920 | of people experience is that they'll change careers

00:06:48.240 | into something they think will be more fulfilling,

00:06:51.480 | but their new boss sucks, you know, just as much.

00:06:55.520 | Like the day-to-day reality of what they think

00:06:59.320 | they're going to enjoy is actually not that great.

00:07:02.800 | And so FI doesn't necessarily solve that,

00:07:05.880 | but to the second part of the question,

00:07:07.880 | which is what does it solve,

00:07:09.600 | it brings into clarity and focus what is important to them.

00:07:14.440 | So it isn't necessarily as simple as,

00:07:16.840 | oh, I'm a software engineer,

00:07:19.240 | but I would really enjoy working at an animal shelter.

00:07:22.880 | You know, I mean, people might think it's that,

00:07:26.200 | but then it actually turns more into,

00:07:28.480 | oh, what I actually enjoy is working for an organization

00:07:32.720 | in which I have a lot of autonomy.

00:07:34.640 | You know, it'll bring that into focus more.

00:07:38.080 | - Yeah, so one thing I always tell people

00:07:41.400 | is that if you view FI as getting rid of the job you hate

00:07:46.320 | or the job that you're bored in,

00:07:47.920 | the problem is you might then also hate early retirement

00:07:50.840 | and you might be bored in early retirement.

00:07:52.600 | So it's, maybe the job is not the problem,

00:07:55.120 | maybe you are the problem,

00:07:56.200 | and you might have to change other things in your life.

00:08:00.600 | And so a few observations from my personal retirement,

00:08:04.480 | right, when I was working, I always longed this idea.

00:08:07.320 | So when I'm retired,

00:08:08.600 | I'm gonna go skiing every day of the week.

00:08:10.640 | I'm gonna go hiking every day of the week

00:08:12.720 | because these are things that I really cared about.

00:08:14.640 | And now I live in the Pacific Northwest

00:08:16.840 | and I have that option every day.

00:08:18.880 | I'm not even using it as much as I thought I would, right?

00:08:22.200 | Because there are other fun stuff to do,

00:08:23.400 | just taking my daughter to the school bus and picking her up.

00:08:26.000 | I mean, that's already a great day in my life.

00:08:28.520 | I don't need that much more than that to make me happy.

00:08:31.960 | So some of the things that you think you will do

00:08:34.240 | in early retirement,

00:08:36.040 | then you realize you have the option

00:08:38.640 | and you're not even going to do it.

00:08:39.800 | But it's nice to have the option, right?

00:08:41.680 | Because then what you do is,

00:08:43.440 | Pacific Northwest, the weather is not always that nice,

00:08:45.600 | then instead of going every day, right,

00:08:47.440 | you wait for the perfect day to go hiking and skiing.

00:08:50.000 | And even though I might actually do less skiing now,

00:08:53.160 | when I do it, I'll make it count and make it enjoyable.

00:08:57.000 | But really every day is enjoyable,

00:08:59.440 | just doing small things and maybe very, very, very small.

00:09:04.440 | And some people might think meaningless things,

00:09:06.720 | but that turn out to be very meaningful,

00:09:08.480 | like hanging out with family, visiting family,

00:09:10.720 | traveling more.

00:09:12.120 | And so keep that in mind when you plan for retirement.

00:09:16.320 | - Yeah, and I think it just doesn't solve

00:09:19.600 | your relationship problems.

00:09:21.080 | People that are Phi, they still get divorced.

00:09:23.920 | They still have healing that they may have to do

00:09:27.600 | with their parents or their kids or friends.

00:09:32.080 | And so that piece, that Phi stuff,

00:09:34.240 | it just magnifies who you are.

00:09:35.880 | So I think it just doesn't really change

00:09:38.400 | a whole lot of the relationship stuff

00:09:39.920 | that goes a lot deeper.

00:09:41.160 | - Simple.

00:09:42.960 | So what are ways to spend that actually provide fulfillment,

00:09:47.960 | sustainable fulfillment?

00:09:53.800 | - So I would start, instead of starting with the question,

00:09:57.640 | how can I spend more money?

00:09:59.720 | I would start with the question of,

00:10:02.480 | what are the things in my life currently

00:10:05.520 | that bring me the greatest sense of fulfillment?

00:10:08.560 | And what are other ways that I can amplify that

00:10:12.600 | or magnify that?

00:10:14.360 | And by virtue of, if it's how can I spend money,

00:10:18.040 | it's almost like a solution looking for a problem.

00:10:21.640 | So I would start instead by flipping that on its head,

00:10:24.200 | take money out of the equation entirely.

00:10:26.480 | What are the things that are most fulfilling?

00:10:30.200 | How do we make that more?

00:10:31.560 | - For us, it's travel.

00:10:34.560 | So we like to travel very extensively.

00:10:36.640 | So this year we have a travel budget

00:10:39.240 | of I think 10 to 11 weeks.

00:10:41.840 | So when I say travel budget,

00:10:43.520 | we don't look at the money.

00:10:44.640 | Well, the money is there, we can spend that.

00:10:46.320 | I mean, as long as it's not astronomically expensive.

00:10:48.320 | So our budget is more in terms of the weeks

00:10:50.880 | and the time constraints that we have,

00:10:53.000 | not so much in terms of the monetary constraints.

00:10:55.560 | So we spent two weeks in Japan in the spring.

00:10:58.120 | We just came back from a six week trip to Europe.

00:11:00.960 | Because I didn't get back to Germany on that trip,

00:11:04.360 | I flew once more and spent another week in Germany

00:11:07.200 | to visit family just recently.

00:11:08.680 | And then we do another trip in December

00:11:11.120 | and do a cruise to the Panama Canal

00:11:13.560 | from LA via the canal to Miami.

00:11:16.440 | So for us, it's travel.

00:11:18.000 | And then we also try to combine that

00:11:20.040 | with having family together.

00:11:22.280 | So we sometimes make basically family reunions out of that.

00:11:26.400 | So that's fulfilling to us.

00:11:29.240 | And we have almost infinite budget to do that.

00:11:33.840 | - Yeah, I know that that's a hard one for a lot of people.

00:11:38.000 | I think sort of taking away what's worth spending money on

00:11:43.480 | or how do you like switch on this spend versus save

00:11:47.400 | is to, I guess think about like,

00:11:50.800 | think about your values and think about like legacy.

00:11:56.520 | And that money part to me is just the obstacle

00:11:59.880 | that kept you from doing it before.

00:12:01.920 | And now that you don't have that obstacle,

00:12:04.400 | wow, how many times would you wanna take a big vacation

00:12:07.160 | with your kids or do all the things

00:12:08.760 | that you thought about doing when you were young?

00:12:10.560 | And you might have to take a walk down memory lane

00:12:12.200 | and just say, you know what,

00:12:13.320 | the money part is no longer an issue for me.

00:12:15.360 | So I wanna do it.

00:12:17.800 | And I feel like it's just gonna take some practice

00:12:20.000 | 'cause it is a big mindset shift

00:12:21.640 | to go from saving your entire life

00:12:23.520 | and now you're ready to spend it,

00:12:26.360 | but it's just totally worth it.

00:12:28.560 | Think about kids, grandkids, everyone else in your life.

00:12:31.360 | - So I think you can't buy your way

00:12:35.440 | into becoming who you wanna be, right?

00:12:36.960 | So if you wanna be a runner,

00:12:38.480 | you can buy as nice shoes as you wanna buy,

00:12:40.640 | but until you start doing the things, you're not a runner.

00:12:43.360 | But you can use money to clear the way

00:12:45.960 | to become the kind of person you wanna be.

00:12:47.720 | So you can use money to hire a babysitter

00:12:50.240 | so you have time to go training,

00:12:51.720 | and you can use money to hire a trainer so you're stronger.

00:12:55.360 | You can use money to pay for your admittance

00:12:58.920 | into the Boston Marathon.

00:13:00.400 | So I think the idea is to use money in support

00:13:03.400 | of those things that are most important to us.

00:13:05.400 | - Hear it.

00:13:06.240 | So in retrospect, a lot of people who've achieved FI say,

00:13:10.840 | I sacrificed so much along the way, I was miserable,

00:13:15.160 | and even though I'm FI now,

00:13:17.120 | it wasn't worth sacrificing to the extent I did.

00:13:21.000 | What, in your experiences, is worth sacrificing,

00:13:25.240 | and what isn't?

00:13:26.880 | - So I like the idea of plan for the future,

00:13:31.320 | but don't live in it.

00:13:33.320 | And I think that what often happens

00:13:34.960 | is when we defer happiness, we live in the future.

00:13:40.760 | And so anything that would cause that,

00:13:43.880 | that would cause the negation of the present moment

00:13:47.080 | is not worth sacrificing.

00:13:50.480 | So, I mean, there's the obvious answers

00:13:53.320 | of health, relationships, you know that already,

00:13:55.960 | that's not new information.

00:13:58.240 | But where that comes into practice on a day-to-day level,

00:14:02.660 | I think is worthy of constant inquiry,

00:14:07.080 | constant re-self-examination.

00:14:10.160 | And a thought exercise that I really enjoy

00:14:13.600 | is what decisions would I make

00:14:17.440 | if my lifespan was only five more years?

00:14:21.760 | And what I like specifically about five more years

00:14:24.400 | is that, okay, if it's next week,

00:14:27.240 | there are certain things that I just can't do by next week.

00:14:32.240 | But five years is a long enough time span

00:14:34.640 | that I can make some serious changes.

00:14:38.040 | But, you know, but it's not like I don't have the,

00:14:42.920 | it doesn't, I don't have the same set of assumptions

00:14:44.860 | that I would if I was imagining

00:14:46.160 | that I'm gonna live to 100.

00:14:47.240 | And so, therefore, time is gonna stretch on forever.

00:14:50.560 | So I use that thought exercise a lot.

00:14:53.140 | - Yeah, my philosophy is called stealth frugality.

00:14:57.880 | So we want to be frugal.

00:15:00.160 | We don't want to waste money on things that we don't need.

00:15:03.840 | And we're environmentalists, right?

00:15:06.640 | We don't want to waste energy, for example.

00:15:09.400 | But we don't want to be so frugal

00:15:10.880 | that people start talking behind our backs.

00:15:12.800 | So when I announced my retirement at the job,

00:15:15.840 | there was not a single person who told me,

00:15:17.280 | yeah, I knew you were doing that.

00:15:18.480 | Oh, you're such a penny pincher.

00:15:20.400 | I tried to do everything that kept me happy socially.

00:15:24.200 | And, of course, it might have delayed my retirement

00:15:26.240 | by about six months, but it was obviously worth it

00:15:29.120 | to go out to work lunches and to drive a car

00:15:32.820 | that looks like we're actually splurging a little bit,

00:15:35.520 | but it wasn't actually that expensive.

00:15:37.760 | And so this is a little bit of a riff

00:15:41.320 | at this idea of stealth wealth, right?

00:15:43.120 | I remember Lief was sitting there,

00:15:44.560 | he had a brilliant blog post on stealth wealth.

00:15:46.520 | So we don't want to flaunt our wealth,

00:15:49.000 | but I don't want to also be so frugal

00:15:51.820 | that people think there's something wrong with you.

00:15:54.520 | And so the stories for people who,

00:15:58.100 | basically, there was a lawyer in Seattle

00:16:00.880 | who was sharing people's Netflix passwords, right?

00:16:04.320 | If you do that as a lawyer

00:16:05.780 | and people start talking behind your back,

00:16:07.480 | well, she's kind of cutting corners there, right?

00:16:09.440 | You don't want to do this frugality so much

00:16:12.000 | that it even hinders your advancement at the office.

00:16:15.320 | What I liked about going out for lunch and coffee

00:16:19.080 | is you hear the most recent gossip, right?

00:16:21.080 | You can rub elbows a little bit

00:16:23.120 | with the powerful at the office.

00:16:25.320 | And, I mean, not in a sleazy way,

00:16:26.920 | but, I mean, in a positive way.

00:16:29.440 | And it didn't hamper my retirement saving much,

00:16:32.920 | but it made the ride much nicer.

00:16:36.200 | And then on top of that, right?

00:16:37.440 | So remember this Mr. Money Mustache calculation, right?

00:16:40.640 | If you cut your spending to a really tight budget,

00:16:43.880 | you get faster to retirement,

00:16:45.360 | but then you also have to keep that lean budget

00:16:47.820 | also in retirement, right?

00:16:48.960 | I mean, if you already hate it while working, right?

00:16:51.560 | And that means it's not just until you reach retirement,

00:16:54.240 | then in retirement, you have to keep that low budget.

00:16:57.200 | And I think it's maybe don't be too frugal,

00:17:01.800 | spend on the things that are meaningful to you.

00:17:03.600 | I mean, I have certain things

00:17:04.760 | and you will have certain things

00:17:05.960 | and it might delay your retirement.

00:17:08.040 | And if it's five years, even,

00:17:10.000 | it's still worth it to have an easier path to retirement.

00:17:13.480 | And then also in retirement,

00:17:14.840 | when you keep that little bit more generous budget.

00:17:18.440 | So it's definitely worth it.

00:17:20.320 | And by the way, the FIRE community,

00:17:21.760 | we almost have to blame ourselves a little bit,

00:17:23.920 | 'cause if you want to become a blogger, right?

00:17:25.720 | You almost have to retire early, really, really early,

00:17:28.560 | right at this, this is the great talking point for you.

00:17:31.120 | And then you might get an interview

00:17:32.980 | with the Wall Street Journal or the New York Times.

00:17:35.320 | The earlier you move,

00:17:36.480 | the more are your chances to gain that publicity,

00:17:40.580 | but we can't all be like that, right?

00:17:42.560 | We are all in some way, regular early retirees.

00:17:46.600 | And so plan the path like you can live with this

00:17:50.540 | for the rest of your life, basically.

00:17:53.140 | - I think that's such a misnomer.

00:17:55.120 | Like, I know FIRE people get blamed for being frugal

00:17:58.920 | and minimalist and all of this stuff.

00:18:00.760 | And I never felt like I fell within that camp.

00:18:05.320 | And to me, it's just a matter of prioritizing

00:18:08.380 | the things that are important to you.

00:18:10.220 | And it might be different than someone else.

00:18:13.040 | Like, you know, we have some FIRE people

00:18:15.080 | that might brag about, you know,

00:18:16.800 | having 300,000 miles in their car.

00:18:18.360 | That's totally fine, but that's really not what I want to do.

00:18:21.520 | I want to buy a nicer car,

00:18:23.080 | but I live in a low cost of living area

00:18:24.880 | and my housing costs are pretty low.

00:18:27.600 | So I never felt like I had to be, you know,

00:18:30.560 | an extreme minimalist or extreme frugal,

00:18:33.560 | but we get that, you know, avatar, right?

00:18:36.200 | So when people are asking me about it,

00:18:38.600 | they're like, "I like to spend money."

00:18:40.160 | And it's like, you can still spend money.

00:18:42.040 | It's like, you should never, don't deprive yourself

00:18:45.040 | and don't make yourself miserable 'cause guess what?

00:18:46.920 | You're not gonna stick with it.

00:18:48.320 | So, you know, the whole, you know,

00:18:50.880 | what do you have to give up?

00:18:52.320 | And, you know, trying to, you know, cut back on

00:18:54.640 | every little thing, that's just not fun.

00:18:56.440 | And no one wants to stick with that.

00:18:57.920 | So I'm trying to get rid of that whole thing

00:19:00.800 | that seems to be around FIRE.

00:19:03.320 | And like you said, you know, the media picks up on that.

00:19:06.160 | They want the most extreme stories.

00:19:08.440 | And so that's where it comes from.

00:19:10.800 | So I try to sing a different song to say,

00:19:13.360 | "Look, you really need to enjoy it."

00:19:15.600 | And if I could have retired six months sooner

00:19:19.160 | because I cut back my coffee, then fine.

00:19:21.600 | I don't mind working six months.

00:19:22.920 | You know, it's just not that big of a deal,

00:19:26.200 | but just don't deprive yourself

00:19:28.880 | and make yourself miserable.

00:19:30.280 | - The answer to when you sacrifice too much is burnout.

00:19:34.560 | And so if you think about it,

00:19:36.280 | anyone who's done something and sacrificed

00:19:39.520 | for something they loved or something they believed in,

00:19:42.840 | it's an act of love.

00:19:44.720 | You don't burn out when you're doing it as an act of love.

00:19:47.480 | Difference is when you're doing it for FIRE,

00:19:49.320 | you're doing it as an act of love towards yourself.

00:19:52.080 | And when it stops being an act of love, you burn out.

00:19:54.880 | And I was a perfect example of this

00:19:56.240 | 'cause I went through medicine.

00:19:57.560 | I got burned out very quickly

00:19:58.920 | because I just wanted to get to financial independence

00:20:00.640 | so fast and I worked so hard.

00:20:02.680 | And then I had to leave mostly.

00:20:04.920 | What I found is that I loved a touch of medicine,

00:20:08.160 | the piece of doing hospice.

00:20:09.400 | What if I had found that in the beginning?

00:20:11.560 | Like I would have never burned out.

00:20:12.600 | I would have probably never left.

00:20:13.680 | I wouldn't have gotten to financial independence as quickly,

00:20:15.960 | but it probably wouldn't have been necessary.

00:20:18.920 | And so I think if you find yourself burning out,

00:20:20.960 | you've gone too far.

00:20:22.680 | If the excitement, if you're sacrificing

00:20:24.600 | and you're excited about it and you're like,

00:20:26.120 | this is an act of love towards myself or my family

00:20:28.640 | and it feels good, then you're probably doing fine.

00:20:31.800 | - Clearly work provides a lot of meaning, purpose,

00:20:35.200 | and identity for folks.

00:20:36.800 | And Jordan touched on this in the last session.

00:20:39.120 | How should folks prepare for lack of meaning, purpose,

00:20:44.000 | and identity in the absence of work?

00:20:47.440 | - I'd say don't prepare for the lack of it,

00:20:49.240 | prepare for a shift in it.

00:20:52.000 | So don't retire away from something, retire into something.

00:20:57.000 | So you don't want to be rudderless,

00:21:02.880 | like you don't want to be going nowhere.

00:21:04.800 | Have a thing, and that thing can change.

00:21:08.280 | That thing likely will change.

00:21:10.840 | But just have a thing that you're doing

00:21:13.960 | that gives you some type of purpose.

00:21:17.400 | - Yeah, so I am fortunate, right,

00:21:19.080 | because I retired from finance.

00:21:20.720 | And what am I doing now?

00:21:21.920 | Talking about financial stuff.

00:21:23.280 | So I basically decluttered my life

00:21:26.000 | and I can do what I love without having to deal

00:21:28.840 | with performance reviews and sexual harassment training

00:21:32.520 | or anti-sexual harassment training, obviously.

00:21:35.440 | So, and all of this corporate stuff

00:21:39.680 | that you started to hate about your job.

00:21:42.640 | So I'm very fortunate, obviously.

00:21:44.640 | I can't imagine how somebody who is a firefighter

00:21:47.720 | and then retires from that and can't do what he loves anymore

00:21:51.240 | or a medical doctor, potentially, right?

00:21:53.200 | So I, yeah, so, I mean, for me, obviously,

00:21:57.080 | I picked up something that I can do after retirement

00:21:59.880 | that's still fun and intellectually challenging

00:22:02.800 | and also solves the issue of social interaction.

00:22:06.280 | So in my hometown of Camas, Washington,

00:22:09.040 | just under 30,000 people, we have five fire couples.

00:22:13.160 | So us plus four more.

00:22:14.840 | And then some of them, many of them, actually,

00:22:16.640 | I met through my blog during the local fire meetup,

00:22:21.640 | monthly meetup meetings.

00:22:24.840 | So, yeah, I mean, so you basically cover the intellectual,

00:22:29.160 | the social corners, physical, right?

00:22:33.600 | I mean, I have tons of stuff to do in the Pacific Northwest.

00:22:36.520 | And so I think that was something.

00:22:40.480 | So I always say that some of this emotional stuff,

00:22:44.080 | I can wing that in retirement.

00:22:47.240 | I just make that up as I go along.

00:22:49.520 | And so I'm more of the finance geek and math geek.

00:22:52.400 | So I thought that that's harder to fix if you get it wrong.

00:22:55.720 | But so, I mean, don't look to me

00:22:58.160 | in terms of emotional support in early retirement,

00:23:02.240 | if you know my blog.

00:23:03.840 | But yeah, I mean, I definitely, maybe intuitively

00:23:06.720 | and naturally, I took care of that myself

00:23:09.680 | and through that fortunate circumstance

00:23:12.240 | that I can still talk and think about finance.

00:23:15.320 | - Yeah, I think it's definitely a shift, like Paula said.

00:23:19.160 | I was at the same company for 21 years.

00:23:21.960 | So that was my identity.

00:23:23.120 | Like any conferences I went to,

00:23:25.000 | it was because the company told me

00:23:26.440 | I needed to go to that conference.

00:23:28.040 | The friends that I had,

00:23:29.280 | it was a built-in friendship network at work.

00:23:32.200 | Some of them were extraordinary.

00:23:33.680 | Some of them weren't extraordinary.

00:23:35.680 | But I think I ended up working two years

00:23:38.920 | beyond reaching my fine number.

00:23:41.520 | I think when I reflect,

00:23:43.080 | I think a part of it was that I knew I had to make the shift

00:23:46.080 | of what am I gonna be doing afterwards?

00:23:50.000 | What am I interested in?

00:23:50.920 | It was a lot of the financial stuff.

00:23:52.640 | So I start going to conferences that I chose.

00:23:56.080 | I started doing things with people that I chose.

00:23:59.120 | And slowly within those two years, it made a difference.

00:24:02.000 | Now my network wasn't just LexisNexis where I work for.

00:24:06.040 | It was outside of that.

00:24:07.880 | And I almost think about the trade-off that I made.

00:24:11.620 | My new friends were friends that I chose

00:24:14.120 | in circles that I wanted to be in,

00:24:15.840 | that shared the same things that I shared.

00:24:18.200 | But it took a couple years for it to really click and say,

00:24:21.960 | "Okay, I think this is a shift that I wanna make."

00:24:24.600 | But for 21 years, that was the identity.

00:24:28.480 | And my job, my workplace, chose those things for me.

00:24:32.120 | And now I'm choosing them for myself.

00:24:34.380 | - You know, I think there's a lot of talk

00:24:37.160 | about what happens when you leave your job,

00:24:39.520 | and especially if you're someone

00:24:41.160 | from the financial independence community and do this early.

00:24:44.520 | I guess I would argue with the fact

00:24:46.080 | that you lose your identity when you leave your work.

00:24:50.100 | If your work was your identity and your purpose

00:24:52.280 | and your meaning, you probably wouldn't leave

00:24:53.600 | or you do what Earn did, which is leave maybe the job,

00:24:56.100 | but continue the work.

00:24:58.080 | I think what we're really asking is how do I, in general,

00:25:01.480 | identify our sense of purpose and meaning and identity,

00:25:04.240 | and probably we're in jobs

00:25:05.840 | that don't actually fulfill those needs.

00:25:08.500 | So I think a lot of us have a sense of purpose and identity

00:25:10.960 | that have been given to us or that we've given ourselves

00:25:13.400 | 'cause they were convenient.

00:25:14.640 | And most people who get to the place of fire are like,

00:25:16.980 | "This isn't fulfilling me anymore."

00:25:19.320 | And so it's not how do we not lose that sense

00:25:22.000 | when we leave work, it's how do we develop it

00:25:23.880 | more authentically in the first place.

00:25:25.720 | And I think that has to do with a lot of searching

00:25:27.760 | into purpose and identity.

00:25:29.400 | The last talk before this was all about

00:25:31.120 | how we find our anchors of purpose

00:25:33.160 | and how we define ourselves around them.

00:25:35.160 | So maybe I'm splitting hairs here,

00:25:38.160 | but I think if you are finding a loss of purpose

00:25:40.520 | and identity truly when you leave your job,

00:25:42.280 | then you probably shouldn't be leaving your job

00:25:44.000 | or at least not your industry,

00:25:45.000 | 'cause if that's really purpose and identity to you,

00:25:46.760 | why are you leaving?

00:25:47.760 | - Great, thank you.

00:25:50.320 | I should add that we're interested in audience questions.

00:25:53.480 | So there are notepapers and pens

00:25:55.920 | throughout where you're sitting

00:25:57.820 | and folks are walking around.

00:25:59.160 | Just raise your hand and someone will come over

00:26:01.480 | and grab that question.

00:26:03.440 | So how about explaining the pursuit of fire

00:26:07.680 | to friends who just can't relate?

00:26:09.760 | - I don't.

00:26:12.800 | Easy.

00:26:15.800 | Yeah, if people are curious about it

00:26:19.200 | and they have questions, they're welcome to ask.

00:26:21.780 | But if they don't bring it up,

00:26:23.880 | I'm not gonna bring it up.

00:26:25.480 | So I just don't talk about it

00:26:28.700 | with people who don't show any,

00:26:30.980 | who don't proactively initiate the interest in it.

00:26:34.760 | And the other thing that I've noticed,

00:26:36.680 | so oftentimes, you know if you're at a cocktail party

00:26:40.140 | and there's just that,

00:26:42.040 | like everybody's opening question is,

00:26:44.200 | so what do you do, right?

00:26:46.360 | And I know a lot of people who have struggled

00:26:48.880 | to say like, well, I'm retired,

00:26:50.280 | 'cause if you say that and you're 40,

00:26:52.240 | like there's a lot of questions that come with it.

00:26:54.680 | And I've also noticed for myself,

00:26:56.240 | like if I say, oh, I'm a podcaster,

00:26:58.540 | then there are, people get really excited,

00:27:00.720 | and then there's a bunch of follow-up questions.

00:27:03.680 | And then we just end up talking about work,

00:27:05.720 | which like, you know, why do you go to a cocktail party

00:27:09.620 | just to sit there and talk about work the whole time?

00:27:12.000 | That seems like a terrible use of your time off from work.

00:27:15.780 | So I kind of have fun with it.

00:27:18.320 | Like sometimes I tell people,

00:27:21.640 | I'm like, okay, you know those desiccant packs,

00:27:24.680 | those silica gel, like Stay Fresh desiccant packs?

00:27:28.520 | I am the assistant regional sales manager

00:27:32.240 | for a B2B desiccant silica gel pack company.

00:27:35.640 | And then I have like a little silica pack in my purse

00:27:38.400 | that I'll pull out.

00:27:39.440 | So sometimes I'll just goop around

00:27:43.680 | to do something like that.

00:27:44.520 | And later on, if like, you know, I'll be like,

00:27:47.600 | just kidding, I'm a,

00:27:49.520 | actually I was on Netflix, you know?

00:27:51.460 | But like, yeah, sometimes I'll just kind of have fun with it

00:27:56.460 | and make it playful,

00:27:58.400 | because that's just so much more interesting

00:28:01.240 | than rehashing the same tired conversation

00:28:04.860 | that you've had about work over and over and over and over.

00:28:08.800 | - Yeah, so I've been going back and forth

00:28:13.440 | to the response to that.

00:28:15.040 | In the beginning, I was too afraid to say I'm retired,

00:28:17.560 | right, you come up with something else,

00:28:19.000 | and then you say it's retired.

00:28:20.600 | But after you say you're retired,

00:28:22.280 | it kind of shuts down the discussion almost in many cases.

00:28:25.000 | Other people then do follow up question,

00:28:26.640 | well, how did you do that?

00:28:27.600 | And then you explain.

00:28:29.280 | And quite amazingly,

00:28:31.560 | sometimes you find people who were already intuitive

00:28:34.920 | without even knowing about fire,

00:28:37.160 | intuitively, they are on board with this already, right?

00:28:40.280 | Because I mean, in the U.S. right,

00:28:41.460 | we have this fantastic system

00:28:43.480 | where if you have the right parameters

00:28:47.400 | and the right intuition and discipline,

00:28:51.440 | there are lots of options to accumulate wealth, right?

00:28:53.960 | And not everybody uses it,

00:28:55.320 | but the people who use it can accumulate wealth very quickly

00:28:59.320 | and you might actually win some people.

00:29:00.760 | Because if somebody had told me

00:29:01.960 | about the fire community before 2015,

00:29:04.000 | I would have been one such person.

00:29:06.640 | And I guess I could have benefited

00:29:08.840 | from some additional advice.

00:29:11.240 | And yeah, so, and in German,

00:29:14.520 | there is actually another word for retirees,

00:29:17.240 | called Privatier, which is,

00:29:19.400 | that also has a very bad connotation.

00:29:21.440 | It sounds a little bit like stuffy old money,

00:29:24.000 | which of course, that's not what we are, right?

00:29:26.200 | We are mostly self-made people.

00:29:28.800 | So it's very hard to,

00:29:30.560 | if you talk to people who are not in our system,

00:29:33.160 | and this can go any way, right?

00:29:34.560 | I mean, you could intrigue people,

00:29:36.120 | but then they lose focus and interest very quickly.

00:29:40.560 | You could bring more people on board

00:29:41.960 | or some people say, well, this is not for me.

00:29:43.620 | And thank you, but no thank you.

00:29:45.080 | I mean, we've tried to push some people

00:29:46.920 | where we see, I mean,

00:29:48.400 | you have to get your finances in order

00:29:50.000 | and start contributing to your 401k,

00:29:51.680 | where there's really only so much you can do.

00:29:53.360 | And as you can lead the horse to the water,

00:29:55.600 | but can't make it drink.

00:29:57.000 | So that thing applies there.

00:29:59.920 | So yeah, it's difficult.

00:30:01.600 | I mean, I'm not trying to be too preachy,

00:30:04.040 | but I will try to at least make an effort

00:30:06.680 | to bring people into our world.

00:30:09.360 | - Yeah, so Paolo was saying,

00:30:12.240 | you don't really talk about it unless someone asks you.

00:30:14.000 | I was doing the same thing.

00:30:15.400 | And then I wrote "Fire for Dummies."

00:30:16.720 | So the jig is up.

00:30:17.960 | (laughs)

00:30:20.040 | When I left my job,

00:30:24.360 | and even a little bit while I was still working there,

00:30:27.120 | I did discover my small P purpose,

00:30:29.760 | which was financial literacy and education.

00:30:32.400 | I wanna teach everybody,

00:30:34.360 | mainly younger people about basic personal finance stuff.

00:30:39.360 | I keep up with how many states require personal finance

00:30:42.520 | in order to graduate from high school.

00:30:43.760 | It's 26.

00:30:44.840 | So I used to say, I teach people about their money.

00:30:48.360 | And usually people are interested to talk about money.

00:30:50.480 | So they'll continue asking follow-up questions.

00:30:54.440 | I like the podcaster idea.

00:30:56.680 | I've only been doing it for less than a year,

00:30:59.000 | but I think that's something people love to talk about.

00:31:02.080 | But yeah, so it gives me a chance

00:31:03.600 | to sort of mention what is passionate to me.

00:31:06.280 | I don't go into it any more than they want to,

00:31:08.320 | but typically, like doctors might have this happen

00:31:11.280 | where you tell people you're a doctor,

00:31:13.480 | and they're like, "Well, I got this itch on my back,"

00:31:15.560 | or something. (laughs)

00:31:16.640 | So they'll say something about their money.

00:31:18.640 | "Oh, my 401(k) is all screwed up."

00:31:21.000 | Or, "Yeah, I've been trying to get my money right.

00:31:23.520 | "I have a question."

00:31:24.720 | So usually that gives them an opportunity.

00:31:27.040 | It opens up the door for them to ask a question or whatever.

00:31:30.640 | And I'm on this big mission to try to make money

00:31:33.600 | not a taboo topic to talk about.

00:31:36.120 | So I guess I kind of see it as an opportunity

00:31:38.560 | to open a conversation about something

00:31:39.920 | I really love talking about.

00:31:43.160 | So as a young hospice doctor, from time to time,

00:31:45.760 | I would be asked to go see a patient or a family.

00:31:48.240 | And I'd walk into the room,

00:31:49.440 | and we'd start having the death conversation.

00:31:51.320 | And they had already signed up for hospice,

00:31:53.260 | but they clearly didn't want to hear it.

00:31:55.260 | They were in denial, they're not dying.

00:31:56.920 | Their family members were in denial, they're not dying.

00:31:59.800 | And I spent maybe the first six months

00:32:02.480 | trying to tell them they were wrong,

00:32:03.800 | and all it caused was anxiety and stress and unhappiness.

00:32:08.120 | And so from that, I learned that you meet people

00:32:10.280 | where they are, you can't drag them to where you are.

00:32:13.840 | And I think that goes along with fire, too.

00:32:16.120 | Even with a spouse, all you can do is meet people

00:32:18.800 | where they are and be intentional and clear

00:32:20.660 | on who you are and what you believe.

00:32:22.960 | And when they are ready to hear it,

00:32:25.160 | they will come back to you.

00:32:26.380 | Otherwise, it's hard to drag them kicking and screaming

00:32:28.580 | to where you are.

00:32:30.040 | - Great, thank you.

00:32:30.880 | I want to pick up on the spouse thread in a minute.

00:32:33.460 | But since employer-sponsored health insurance

00:32:37.360 | is such a big barrier for people taking the leap

00:32:40.560 | towards leaving their jobs,

00:32:42.520 | can you share some insights into demystifying

00:32:45.400 | health insurance outside of employer-sponsored

00:32:48.680 | health insurance?

00:32:49.680 | - Just don't get it.

00:32:51.080 | (laughing)

00:32:53.340 | - So I have been purchasing individual health insurance

00:32:59.560 | since 2008, so pre-ACA.

00:33:04.060 | I will say, since the ACA started,

00:33:07.380 | it's more expensive, but it's also easier to get,

00:33:11.380 | and it covers more.

00:33:12.800 | So I think a lot of the questions around how to get it

00:33:17.860 | have kind of, like, the logistical, like, what do I do?

00:33:22.220 | Well, there's a, like, online marketplace,

00:33:24.920 | and you go and you compare plans.

00:33:26.580 | But in terms of the monetary thing,

00:33:30.460 | what I encourage people to do is just think of it,

00:33:33.580 | you know, I think people often,

00:33:35.220 | they see it as this kind of special line item

00:33:38.480 | that is somehow different than any other given line item

00:33:41.640 | on your budget.

00:33:42.820 | Like, a discreet 800 or 1,200 or 1,600,

00:33:47.820 | depending on how many people you're covering,

00:33:52.260 | a discreet X amount of money per month

00:33:55.100 | is no different than X amount of money

00:33:58.540 | spent on anything else, and you simply budget for it.

00:34:02.180 | Like, it always struck me as strange

00:34:03.900 | that no one ever came to me and said,

00:34:06.220 | but how do I budget for my mortgage?

00:34:09.060 | You know, 'cause everyone expects to budget

00:34:11.680 | for their mortgage.

00:34:12.820 | No one ever said, how do I budget for groceries?

00:34:15.480 | Even though, you know, maybe your grocery bill

00:34:18.220 | is kind of, maybe you've got a family of four

00:34:20.020 | and your grocery bill is sort of high.

00:34:21.920 | But, like, if people expect to budget a given amount

00:34:28.660 | for a given line item,

00:34:30.060 | there never tend to be questions about it.

00:34:32.260 | But if people aren't used to something,

00:34:34.060 | then it's sort of treated like this unique category.

00:34:38.400 | So what I would say is, don't think of it as special.

00:34:42.300 | Just think of it as any other category.

00:34:44.700 | - Yeah, so we have private health insurance.

00:34:47.500 | It's a high-deductible plan,

00:34:49.740 | and our premium is quite affordable.

00:34:52.280 | And even if we have to pay the premium

00:34:54.860 | plus the maximum annual out-of-pocket spending,

00:34:58.160 | I mean, it wouldn't ruin us financially.

00:35:00.060 | It would be kind of sort of painful.

00:35:01.980 | I mean, it wouldn't derail our retirement.

00:35:04.820 | So it's almost that the problem solves itself.

00:35:06.920 | Either you have such a big budget in early retirement

00:35:09.420 | that you can just afford to pay that,

00:35:11.000 | or you actually hack the Affordable Care Act

00:35:15.620 | and you keep your taxable income so low

00:35:17.760 | that you get the ACA subsidies

00:35:20.340 | and pay relatively little in premium,

00:35:23.060 | and also your out-of-pocket maximum is very low.

00:35:26.740 | And I always, it gives me heartache

00:35:29.960 | when I read blog posts about this.

00:35:31.600 | Maybe we shouldn't advertise that too much, right?

00:35:33.760 | If some politician or media picked that up

00:35:36.200 | and says we are some multimillionaires

00:35:38.280 | that keep their taxable income really low

00:35:40.740 | and then get the ACA subsidies,

00:35:43.200 | they were not intended for you, right?

00:35:44.620 | They were intended for just ordinary,

00:35:47.080 | lower-middle-class families.

00:35:49.800 | But yeah, I mean, there's some blogs,

00:35:52.680 | I think Justin, Root of Good,

00:35:54.960 | he has really good content on how to hack that

00:35:58.300 | and get all sorts of other interesting

00:36:01.020 | means-tested benefits.

00:36:02.500 | I think he gets his cable TV really cheap.

00:36:05.100 | I mean, he's a multimillionaire,

00:36:06.260 | but he's watching free cable television, basically.

00:36:09.660 | And so there are ways to hack that.

00:36:12.260 | I don't think it's as much of a headache

00:36:14.260 | as some people want to make it.

00:36:16.620 | - Yeah, I would agree that the ACA

00:36:18.460 | is not as much as a headache as people think,

00:36:20.540 | but remember that it is state-specific

00:36:23.420 | and to an extent, county-specific.

00:36:26.140 | So if you're talking to someone

00:36:28.100 | that has a family of five in the state of California,

00:36:30.660 | that is very different from a single person like me

00:36:32.740 | that lives in the state of Ohio.

00:36:34.260 | So do your own research.

00:36:35.860 | You don't even have to sign up for an account,

00:36:38.020 | but it's only income-based, not assets.

00:36:41.660 | So that's just the rules right now.

00:36:43.220 | You can call it a hack if you want.

00:36:44.940 | But I always like to make the point

00:36:48.020 | that this whole question or dilemma

00:36:51.460 | about health insurance when it's not tied to a job,

00:36:54.140 | again, I worked for the same company for 21 years,

00:36:56.460 | and I was used to that health insurance through my job.

00:37:00.740 | But the FHIR community isn't unique

00:37:03.420 | in trying to solve that problem.

00:37:05.540 | You've got self-employed people.

00:37:07.380 | You've got small business owners.

00:37:08.820 | You've got solopreneurs.

00:37:10.700 | All of those people have had to solve this problem

00:37:12.960 | for a long time.

00:37:14.220 | So either talk to them or realize

00:37:17.620 | that there are plenty of options.

00:37:19.480 | Some people I know have chosen to go

00:37:21.280 | with a health-share ministry.

00:37:23.320 | That's not really health insurance,

00:37:24.800 | but it's an alternative.

00:37:26.200 | If you're going back to school, that's an option.

00:37:28.860 | I had a list of seven different things I considered

00:37:33.860 | for health insurance once I decoupled from my job.

00:37:37.740 | So there are a lot of options,

00:37:39.060 | but every single article I've seen for the last 10 years

00:37:42.040 | that talk about somebody that retired early,

00:37:44.520 | I still hear the same thing.

00:37:46.080 | But what do they do about health insurance?

00:37:47.840 | So it's just still something that people just can't grasp

00:37:50.400 | because in the US, it's so closely tied to our job.

00:37:54.760 | - Yeah, I don't have a lot to add

00:37:56.240 | except to say that for 99.5% of people,

00:37:59.040 | it's either gonna be the ACA

00:38:00.160 | or some form of insurance broker with average rates.

00:38:03.840 | Yes, there are people who try to gamify it

00:38:06.040 | with health-sharing ministries,

00:38:07.760 | farm insurance, expat insurance, going back to school.

00:38:10.760 | I mean, there's all sorts of little ways

00:38:12.400 | you can try to gamify it if you want,

00:38:14.000 | which generally don't work for most people.

00:38:15.840 | But there are some way if that really gets you excited,

00:38:18.360 | go for it, but otherwise,

00:38:19.600 | it's gonna be ACA or private insurance broker.

00:38:22.160 | - Great, thanks for that.

00:38:23.800 | So picking up on the spousal comment earlier,

00:38:27.040 | even if not in your own relationships from your fire work,

00:38:31.080 | you've gathered a ton of insights from others.

00:38:33.760 | What would you share for folks

00:38:36.480 | who are disconnected with their spouse or partner

00:38:39.520 | in terms of the pursuit of fire?

00:38:41.680 | - Yeah.

00:38:42.520 | I would say that that is a microcosm

00:38:50.960 | of being disconnected in your values.

00:38:53.280 | So the core conversation that you need to have

00:38:57.000 | is not about fire,

00:38:58.840 | but rather about the alignment of your values

00:39:01.800 | and the alignment of the direction

00:39:05.480 | that your shared lives are taking.

00:39:08.480 | And once those come into alignment,

00:39:11.480 | then fire can be a part of that,

00:39:15.200 | may or may not be a part of that.

00:39:16.920 | But the values and the direction in which you're moving,

00:39:20.300 | that's the fundamental underlying conversation.

00:39:23.520 | - Yeah, so my wife has been on board

00:39:27.400 | with this whole fire idea for as long as we know each other.

00:39:30.520 | So I mean, she was in the loop

00:39:31.920 | about what we were planning to do,

00:39:33.520 | and she was looking forward to that.

00:39:34.920 | So I don't think there was any concern.

00:39:38.040 | After we fired, we sold our condo

00:39:41.240 | and we traveled for seven months,

00:39:43.360 | sometimes in a cruise ship cabin,

00:39:45.360 | as I think it's 168 square feet.

00:39:48.040 | It was just three people, my wife, my daughter,

00:39:50.160 | and I really on constrained spaces.

00:39:52.340 | And we didn't hate each other afterwards.

00:39:54.280 | So it was a good sign.

00:39:56.080 | It's not that I had much doubt about it,

00:39:57.400 | but in the back of your mind,

00:39:58.560 | it could have been a little bit of doubt there.

00:40:00.540 | But yeah, I mean, it's obviously,

00:40:02.200 | the reason why you're together

00:40:03.960 | is you probably have the same values and the same plan.

00:40:06.560 | So my wife was on board.

00:40:08.080 | There were some people where,

00:40:09.280 | I mean, when we announced that we fired,

00:40:12.160 | so the wife and the husband, right?

00:40:13.960 | The wife talked to my wife and the husband talked to me,

00:40:16.920 | and they both independently told us

00:40:18.960 | that we couldn't do what you do.

00:40:21.060 | I mean, I want to be at the office for 12 hours a day.

00:40:23.820 | I mean, I couldn't stand being at home for that long.

00:40:26.280 | And then the wife said the same thing.

00:40:28.800 | I'm glad that my husband goes to work 12 hours

00:40:31.760 | because I need to do stuff at home

00:40:33.120 | and I can't have him in my hair.

00:40:35.200 | And amazingly, after COVID, they're still married.

00:40:38.860 | So I think it worked out even for them

00:40:42.560 | when they were at home together.

00:40:44.800 | But yeah, I mean, I think if your wife is on board

00:40:48.760 | and on board early on,

00:40:51.160 | but of course it could create some friction, right?

00:40:53.160 | Where somebody finds out about fire

00:40:55.680 | and is really excited about it,

00:40:57.160 | what if your spouse is not?

00:40:58.960 | So that would be a problem.

00:41:00.160 | I mean, in the case of my wife and me,

00:41:02.280 | we have been talking about this kind of stuff

00:41:05.320 | from way early, from when we started dating

00:41:08.760 | until we got married and through marriage

00:41:11.840 | and then in retirement.

00:41:13.120 | So we were on the same page.

00:41:14.520 | - Yeah, most of the people that I've talked to

00:41:18.000 | that do have a partner or a spouse

00:41:21.080 | is really more about talking about

00:41:22.480 | what you want your life to look like.

00:41:24.520 | If you're not going to work every day,

00:41:25.760 | do you want to see each other every day?

00:41:27.600 | And so you both have to kind of get to the place

00:41:30.480 | of what you want your life to look like

00:41:32.400 | and then the finances kind of come next.

00:41:35.360 | Because we're emotional creatures,

00:41:37.440 | how do you feel and things like that.

00:41:39.560 | And I kind of use the analogy like,

00:41:41.880 | so credit scores for spouses.

00:41:44.480 | If you're going to get a mortgage

00:41:46.240 | and one person has a 650 credit score

00:41:48.720 | and somebody has an 800,

00:41:50.440 | guess what your rate is gonna be based on?

00:41:52.400 | The lowest credit score.

00:41:53.760 | So you have to,

00:41:56.240 | whatever the other person wants,

00:42:00.400 | whatever, I guess the lowest barrier to entry,

00:42:02.520 | that's gonna be what you have to end up doing.

00:42:04.960 | You have to somehow agree on that.

00:42:06.720 | You don't both have to necessarily

00:42:08.280 | even retire at the same time,

00:42:09.920 | but you both have to come to an agreement

00:42:11.760 | and you're only gonna be able to do

00:42:13.480 | what the lesser of what the other person wants to do.

00:42:17.280 | - I mean, I think we have two problems here.

00:42:20.520 | One is there's a misnomer.

00:42:21.720 | I mean, someone may want to fire, may not want to fire,

00:42:24.440 | but everyone wants financial freedom.

00:42:25.960 | So I think we need to reframe this as

00:42:28.520 | everybody wants financial freedom.

00:42:30.080 | You and your spouse are both gonna want financial freedom.

00:42:32.200 | So I think it's much safer to stick with that

00:42:34.400 | as opposed to fire,

00:42:35.240 | which maybe one spouse wants and one spouse doesn't.

00:42:38.160 | The other issue is information asymmetry.

00:42:40.080 | So typically I'm a man

00:42:41.400 | and this tends to be a man in a relationship,

00:42:43.520 | not always, but tends to be,

00:42:45.000 | is the man and women are going to run a marathon together

00:42:48.520 | and the guy starts two hours early

00:42:50.240 | and then expects his wife to finish

00:42:52.360 | at the same time he does.

00:42:53.600 | Usually the partner who's really interested in fire

00:42:57.080 | has been reading fire blogs,

00:42:58.880 | listening to fire podcasts and reading fire books

00:43:01.280 | for months, sometimes even years

00:43:02.720 | before they've even brought it up to the spouse.

00:43:04.840 | And then to imagine that all of a sudden

00:43:07.000 | you're going to introduce it to them

00:43:08.240 | and they're gonna get on board

00:43:09.320 | and be caught up to you within weeks or months

00:43:11.560 | is just not reasonable.

00:43:13.760 | And so I think a lot of these people

00:43:15.040 | who are finding this information asymmetry

00:43:17.200 | and they're finding one really wants to push forward

00:43:19.200 | with this plan and the other doesn't

00:43:20.480 | is that the person who's ahead

00:43:22.800 | needs to stop and slow down

00:43:24.360 | and let their spouse catch up with them.

00:43:26.800 | - Great, thank you.

00:43:27.880 | So consolidating two different audience questions,

00:43:31.720 | post-FI, what is your percentage asset allocation

00:43:36.440 | and dollar-wise annual spend

00:43:39.280 | to the extent you're comfortable sharing?

00:43:41.320 | - Well, I mean, so for me, I have not stopped working.

00:43:49.760 | In fact, I work now more than I worked when I was pre-FI.

00:43:55.040 | So, but my asset allocation,

00:43:58.080 | I'd say half of my net worth is in like,

00:44:02.280 | half of my net worth is in equities,

00:44:03.760 | the other half is in real estate.

00:44:05.400 | Within my investable portfolio,

00:44:08.120 | I have a barbell allocation, so I'm equities and cash.

00:44:11.040 | I don't have any bonds.

00:44:12.640 | And then as far as my equities go,

00:44:14.720 | I have a mix of just total stock market and small caps.

00:44:22.240 | - Sorry, can you elaborate on why no bonds?

00:44:24.960 | - I guess I see the rental property portion of my portfolio

00:44:31.920 | as the essentially equivalent

00:44:34.200 | to the fixed income portion of my portfolio.

00:44:37.480 | So rental properties provide me with an income stream,

00:44:41.720 | which I just reinvest.

00:44:45.360 | And yeah, and then the equities are the equities.

00:44:48.360 | And then of course,

00:44:49.200 | they're counterbalanced by the cash allocation.

00:44:52.560 | Yeah, we have about a little bit over 10% in real estate.

00:44:56.520 | And then the financial assets is about 75, 25.

00:44:59.480 | So 75% stocks, 25% bonds or bond-like, I would call it.

00:45:04.480 | And so I also do a little bit of option trading.

00:45:08.320 | So, but that's on top of the existing portfolios.

00:45:10.880 | I don't have to take anything out to do option trading.

00:45:13.200 | So that's on margin.

00:45:15.280 | That's about, in a taxable account,

00:45:18.160 | that's about 40% of my portfolio.

00:45:20.560 | And yeah, so spending is,

00:45:22.000 | so we, our annual needs are somewhere in the six figures,

00:45:26.320 | on the low six figures.

00:45:27.320 | So just a little bit above 100K, I guess.

00:45:30.760 | And that also includes while paying for taxes.

00:45:34.080 | And, but so that's covered in that too.

00:45:38.240 | And yeah, so that's our financials.

00:45:43.240 | - And actually, annual spend was part of the question.

00:45:46.340 | - I honestly have no idea.

00:45:50.000 | Like, don't really know.

00:45:52.040 | I don't keep a budget.

00:45:56.400 | I'm a fan of what I call the anti-budget,

00:45:58.840 | which is just, and this is not for everyone.

00:46:02.280 | This is just me.

00:46:03.480 | Just make, set a savings goal.

00:46:08.080 | Make sure that you are siphoning enough to savings

00:46:11.960 | that you're matching your savings goal.

00:46:14.140 | And then everything else is yours to spend.

00:46:16.480 | And I just keep a big enough buffer in my checking account

00:46:19.960 | that I know that I've got more cash than I need.

00:46:24.960 | And so I don't really have to think about it

00:46:27.480 | or worry about it.

00:46:28.760 | So I have no idea what I spend.

00:46:31.020 | - So for me, well, this is the first time

00:46:35.960 | I'm hanging out with Paula.

00:46:36.960 | We got way more in common than I thought.

00:46:39.080 | So I hope it's not blasphemy,

00:46:40.520 | but I don't have any bonds either.

00:46:42.000 | I believe in fixed income.

00:46:44.480 | I just don't like bonds being that.

00:46:46.820 | I think someone might've talked about it earlier,

00:46:48.520 | where I'm more likely to do,

00:46:50.280 | like right now how you use savings accounts are pretty good.

00:46:53.400 | I bonds, I have a little bit of that, but no bond funds.

00:46:57.400 | I lean growth.

00:46:59.120 | So I do Vanguard and I prefer a Vanguard growth index fund

00:47:04.120 | versus like a total stock market or S&P 500.

00:47:08.280 | I do have a single stock portfolio.

00:47:10.260 | I think I always will.

00:47:11.360 | I just nerd out on researching great companies.

00:47:16.040 | And that's just something that I enjoy doing.

00:47:19.460 | Let's see, that's my allocation.

00:47:22.320 | Oh, so my spending is very close to what I spent

00:47:26.320 | when I was working between like 40 and 45,000.

00:47:30.600 | I was saving, I had about a 40% savings rate.

00:47:33.500 | So I just no longer have the savings rate

00:47:35.880 | and I've been retired for five years.

00:47:37.680 | Every year looked different.

00:47:39.880 | So there were some years where I had to pull off

00:47:42.020 | not even 4% really.

00:47:44.120 | And there was one year where I did have enough income

00:47:47.600 | where I didn't have to pull off anything at all.

00:47:49.960 | But these were passion projects, things I enjoy doing.

00:47:53.840 | So I'm not quite ready to say I'm under retired

00:47:56.640 | because I'm not consistently trying to do the hustle

00:48:00.680 | or work anybody's full-time or even part-time job.

00:48:03.800 | So that's kind of what my post-FI life looks like.

00:48:06.880 | - You did.

00:48:10.720 | - All right, so I would say roughly I am 90% equities

00:48:15.720 | and 10% a mix of bonds, real estate, and cash.

00:48:21.720 | I plan to continue that even after my wife stops working,

00:48:24.720 | which is gonna be next year because I'm not really worried

00:48:28.760 | about sequence of returns risk

00:48:29.840 | 'cause I'm always gonna make some money.

00:48:31.280 | So if I make a third or a fourth of what I used to make

00:48:34.760 | doing things I love, I'm gonna cash out those equities

00:48:39.200 | and be happy even if the market's down.

00:48:40.960 | I don't care because my staple draw rate's gonna be

00:48:43.000 | probably less than 3, less than 2.5,

00:48:45.600 | just by the fact that I'm making some money.

00:48:48.360 | As for how much I spend a year,

00:48:50.480 | I'm not going to give you a number,

00:48:52.120 | but I wanna, you know, what do you think I spend?

00:48:55.520 | Take a second and think of that.

00:48:56.480 | What do you think I spend a year?

00:48:58.120 | All right, multiply it by three

00:49:00.560 | and it's probably more accurate.

00:49:01.800 | (audience laughing)

00:49:03.440 | - Can I tack on one other quick thing that didn't come up,

00:49:05.720 | that doesn't come up much is social security.

00:49:08.520 | I personally did not include it at all

00:49:11.200 | in my FIRE number and my FIRE plans,

00:49:13.400 | and most FIRE people don't.

00:49:14.840 | So once I retired and I cleared the cobwebs out of my head,

00:49:18.640 | I wanted to do my own research

00:49:20.280 | and see the viability of social security,

00:49:22.520 | and I learned a lot.

00:49:24.480 | So even if I decide to take my social security at 62,

00:49:29.480 | I'm still at $2,500 a month adjusted for inflation

00:49:34.320 | for the rest of my life.

00:49:35.600 | So that is what I consider my backstop

00:49:38.040 | if any of this fails.

00:49:40.880 | So I think that fails to get mentioned sometimes.

00:49:44.120 | - Excellent.

00:49:44.960 | So it seems we're at time,

00:49:46.640 | but we have two more audience questions

00:49:48.480 | that I think you guys will provide profound insights to.

00:49:51.320 | So I'm gonna squeeze them in.

00:49:52.560 | I'm gonna ask them both at once,

00:49:54.160 | answer them to the extent for each,

00:49:56.340 | as you feel we can squeeze in the last few seconds.

00:49:58.720 | So one, lessons learned from a financial mistake you made,

00:50:04.000 | and then how to begin the pursuit of FI as a late starter.

00:50:09.000 | - Okay, I'd say the biggest financial mistake that I made

00:50:15.480 | was in my 20s, I hyper-focused on frugality.

00:50:20.200 | And it was because, as you said at the beginning of this,

00:50:23.720 | my first job out of college, I made $21,000 a year.

00:50:27.280 | That was in 2005 dollars.

00:50:29.720 | So you can adjust it for inflation.

00:50:32.080 | My most amount of money that I ever made

00:50:35.920 | working for somebody else was $31,000 a year.

00:50:39.560 | That was in 2008.

00:50:41.360 | So adjust that for inflation.

00:50:43.100 | That's the most I ever made

00:50:44.200 | as a W-2 employee for someone else.

00:50:46.720 | Because of that, I lacked the confidence

00:50:49.240 | to believe that I could make money.

00:50:51.280 | And so I was obsessed with just penny,

00:50:53.920 | like ridiculous penny pinching.

00:50:56.680 | I was completely focused on the,

00:50:59.760 | like live on as little as possible side of the equation.

00:51:03.480 | Because I lacked the confidence to understand

00:51:07.200 | that I could make more, particularly given that

00:51:09.600 | I just had no aptitude for STEM.

00:51:12.240 | And I was like, well, if I'm not in a STEM profession,

00:51:15.280 | then how can I ever make money?

00:51:17.400 | And so that kind of negative self-talk

00:51:19.280 | and those limiting beliefs and those limiting ideas,

00:51:21.880 | that was my 20s.

00:51:26.040 | And that was probably the compounding effect

00:51:28.440 | of not focusing on making more,

00:51:30.500 | has compounding reverberations for the rest of my life.

00:51:35.520 | What was the second question?

00:51:37.080 | - Starting FI as a late starter.

00:51:39.240 | - Starting FI as a late starter.

00:51:42.600 | I would, first,

00:51:44.240 | I wouldn't think of yourself as a late starter.

00:51:48.660 | My dad did not open his first retirement account

00:51:53.120 | until he was 50, five zero, 50.

00:51:55.560 | He came to the United States in his late 30s.

00:51:59.120 | He got his, he went into a PhD program.

00:52:01.920 | He got his first job at 41, making U.S. dollars.

00:52:06.920 | Opened his first retirement account at 50.

00:52:09.960 | He's now 83 years old.

00:52:12.640 | You know, like he had a good 25 years

00:52:18.560 | to like buy a home and buy his first car and raise me.

00:52:25.080 | And save for retirement.

00:52:27.340 | So even if you're 50 or 55,

00:52:32.040 | don't think of yourself as late.

00:52:35.480 | That's a limiting idea because life is long.

00:52:38.840 | Like if you're planning on living to 100,

00:52:41.120 | you know, you're like 50%, 55% of the way through.

00:52:47.000 | You know, you've got a lot of time left.

00:52:49.000 | - Let me answer the second one first.

00:52:51.760 | So the biggest objection to even getting started

00:52:55.000 | to investing is that people always say,

00:52:56.640 | well, the market is really expensive right now.

00:52:58.240 | So why do I even start now?

00:53:00.080 | And my personal experience has been,

00:53:02.600 | I started investing, first job out of grad school,

00:53:06.520 | started working in Atlanta in 2000,

00:53:08.880 | right at the peak of the dot-com crisis.

00:53:10.980 | I increased my salary going to the private sector in 2008.

00:53:16.920 | Again, right around the market peak.

00:53:20.080 | And then each time I either started investing

00:53:23.280 | or I increased my investing,

00:53:25.080 | it was right around the time, the market peak,

00:53:27.120 | and you had the horrible recession

00:53:28.440 | and bear market around the corner.

00:53:30.280 | And people ask me, isn't that particularly bad timing?

00:53:32.640 | I said, no, it's great timing

00:53:34.520 | 'cause you get the dollar cost averaging through the trough.

00:53:37.440 | So I always tell people,

00:53:38.280 | I mean, don't try to time when you start.

00:53:41.480 | I mean, the time to invest was yesterday

00:53:44.360 | or last year or 10 years ago.

00:53:45.940 | So you might as well do it right now.

00:53:47.320 | Don't try to time that.

00:53:49.280 | When you start is a lot less important for savers

00:53:52.880 | than for retirees.

00:53:53.720 | Because I'm gonna be on another panel

00:53:55.680 | and there I'm gonna preach.

00:53:57.680 | We have to be careful if you retire at the market peak.

00:54:00.840 | That makes it more dangerous

00:54:02.300 | in terms of sequence of return risk.

00:54:04.080 | Sequence of return risk,

00:54:05.120 | the flip side of that is dollar cost averaging for savers.

00:54:08.320 | So if you start saving,

00:54:11.640 | don't worry about when you start saving.

00:54:13.620 | If the market is up, write the momentum.

00:54:15.920 | If the market is down,

00:54:17.160 | well, then you do the J.L. Collins thing.

00:54:18.960 | Oh, the market is down, you can buy stocks at a discount.

00:54:22.720 | Either way is a good time to invest and to start investing.

00:54:26.600 | And don't get discouraged by that.

00:54:29.680 | It's the bigger mistake to not start investing

00:54:32.480 | than to start investing at the wrong time.

00:54:34.280 | And yeah, I mean, a mistake.

00:54:35.520 | I mean, obviously I had some youthful sins,

00:54:38.840 | spending and wasting money on durable goods

00:54:42.240 | that obviously are not that durable.

00:54:43.560 | They just depreciate.

00:54:44.640 | And so when I was young,

00:54:46.520 | but by the way, at that time,

00:54:48.640 | I thought I had a high savings rate.

00:54:50.200 | I thought I wore 20 to 25% is much higher

00:54:52.640 | than the U.S. average.

00:54:54.440 | But then maybe if I had found the FIRE community

00:54:57.960 | a little bit earlier,

00:54:58.800 | I would have done that a little bit better.

00:55:01.280 | But anyways, I still retired at a pretty young age.

00:55:05.040 | Either way.

00:55:06.300 | - Thanks.

00:55:07.140 | And Jackie and Jordan, speed round.

00:55:09.560 | - Yeah, speed round.

00:55:10.400 | Okay, so my biggest mistake was probably,

00:55:13.220 | I didn't have enough in a brokerage account.

00:55:14.920 | I should have, I had like a 10 or 15 year bridge.

00:55:17.720 | So I wish I would have had that.

00:55:19.120 | So I wouldn't be touching any of my Roth

00:55:20.920 | that you want to grow much longer.

00:55:22.920 | And as far as getting a late start,

00:55:24.520 | I think it's really a state of mind.

00:55:27.020 | And that's the main thing.

00:55:28.220 | People are hard on themselves.

00:55:30.120 | You know, they wanna beat themselves up.

00:55:32.400 | And there's plenty of reasons why the every average American

00:55:35.400 | or the average person is a late starter.

00:55:37.800 | So it's just sort of forgiving yourself,

00:55:39.640 | acknowledging why you might've got a late start

00:55:41.960 | and just start.

00:55:43.640 | - I think the topic for a podcast.

00:55:45.800 | - Yeah.

00:55:46.760 | - Biggest mistake I made was I outsourced my finances

00:55:50.800 | to a financial advisor because I was too busy being a doctor.

00:55:53.720 | And I think everyone should understand their finances,

00:55:56.440 | whether they have an advisor or not.

00:55:58.040 | And that was something that I really paid for in the end.

00:56:01.080 | And I'm so glad I do it now.

00:56:02.920 | As for people who think they're starting late,

00:56:05.120 | I think the easiest, most straightforward thing to do

00:56:07.720 | is there is a podcast by Jackie Kosky and Bill Young

00:56:10.740 | called Catching Up to Fi.

00:56:12.260 | And I think if you go there, you will learn a lot of stuff.

00:56:16.480 | - Fantastic.

00:56:17.320 | Thank you.

00:56:18.160 | Let's have a hand for this panel.

00:56:18.980 | (audience applauding)

00:56:22.160 | (audience cheering)

00:56:25.160 | [BLANK_AUDIO]

Bogleheads® Conference 2024 FIRE All Stars with Jeske, Pant, Grumet & Mecham

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