RPF0114-Nords_Interview

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00:00:29.600 | It's really not every day that you actually get to interact with a patriarch or a godfather

00:00:36.800 | of an industry, but today we have that chance.

00:00:40.000 | And even better, you will like and appreciate the fact that not only is today's guest an

00:00:47.280 | early retiree, but he's somehow figured out how to actually stay retired and not earn

00:00:55.840 | any money or do any work or...

00:00:57.760 | Well, okay, he does do work, but at least he doesn't earn money doing it.

00:01:02.560 | Welcome to the Radical Personal Finance Podcast.

00:01:23.040 | My name is Joshua Sheets, and today is Monday, December 8, 2014.

00:01:27.920 | I've got a good one for you today.

00:01:29.280 | My guest is a man named Doug Nordman.

00:01:32.160 | If you've ever interacted at all in just about any early retirement forum or online discussion

00:01:38.000 | about money, I bet you've seen him.

00:01:39.920 | He goes by the handle of Nords.

00:01:41.520 | Well, if you didn't see Nords, I'm sure you saw one of his Hawaiian shirts.

00:01:52.080 | He's known for having a pair of jeans, a pair of flip-flops, and a Hawaiian shirt on just

00:01:57.840 | about any time you meet him, and I think that's awesome.

00:02:00.560 | These are some of the perks that you get when you are actually a financially independent

00:02:06.560 | early retiree.

00:02:07.680 | Also, one of the perks that you get when you leave the military and after however many

00:02:11.520 | years of keeping your hair short, you get to grow it out into a very nice ponytail.

00:02:18.320 | So, my guest today, as I mentioned, is a man named Doug Nordman.

00:02:21.280 | Doug is a really awesome guy.

00:02:23.120 | He and his wife both retired early, and he has gone on, and well, he and his wife, they

00:02:29.040 | live in Hawaii, and the cool thing is that they've actually stayed retired.

00:02:32.880 | They actually don't do anything for money.

00:02:35.200 | Although he does blog, he blogs at a website called themilitaryguide.com, the military

00:02:41.360 | guide with hyphens in between.

00:02:43.280 | So, he blogs there, but he gives away all of the information, excuse me, all of the

00:02:47.360 | revenue from the site goes away to military charities.

00:02:51.600 | He's also written a book for retirement to give advice in the military space, and all

00:02:57.360 | of that money, those revenues are given away as well.

00:03:00.560 | One of the coolest things about Doug is he's been around in the early retirement space

00:03:04.480 | for quite a while, and today, I hope you enjoy this conversation.

00:03:09.360 | It's part personal story, personal lessons, but then it's also a good bit about the actual

00:03:14.480 | history of the early retirement movement.

00:03:17.680 | Enjoy.

00:03:18.680 | So, Doug, welcome to the Radical Personal Finance Podcast.

00:03:22.640 | I appreciate you being with me today.

00:03:24.080 | Thanks, Joshua.

00:03:25.080 | It's good to be here.

00:03:26.080 | So, I think of you, and I'm going to have you tell your story here, kind of introduce

00:03:31.920 | yourself, but I think of you as one of the patriarchs of the early retirement space,

00:03:37.040 | and so this will be fun.

00:03:39.440 | I like patriarch a lot better than geezer, but yeah, that works.

00:03:43.560 | So, I brought you on today to talk about the history of retirement, and you are a successful

00:03:50.200 | early retiree.

00:03:51.200 | To the best of my knowledge, you retired early, and you've been able to stay sort of semi-retired

00:03:55.480 | early.

00:03:56.480 | So, I'd love for you to share your personal story, and then also, primarily what we're

00:04:00.200 | going to focus on today is talking about the history of early retirement and its evolution

00:04:04.880 | over time, but what's your story as it surrounds money and early retirement?

00:04:09.960 | Well, I joined the Navy right out of high school and started my career in the early

00:04:13.480 | 1980s in the submarine force and retired from that after I got my 20 years in 2002, and

00:04:21.160 | as I was coming up on retirement in the '90s, I started trying to figure out what I wanted

00:04:25.200 | to do with myself after I left the military, and I wasn't really happy with what looked

00:04:30.240 | like the options and opportunities, and when my wife and I were both in the military back

00:04:37.240 | in the '80s and '90s, we were both on active duty, and then later on, she moved from active

00:04:41.480 | duty into the reserves, and so she and I have been a dual-income couple for our working

00:04:47.680 | years.

00:04:48.680 | She retired from the reserves in 2008, and as we were saving our money, we were very

00:04:54.680 | busy, as you might imagine, in the service, and it was easy to be frugal when you're

00:04:59.680 | on sea duty or deployed or either just underway all the time working hard, and so we'd always

00:05:06.120 | try to save at least one income whenever we could, and over the years, we noticed that

00:05:09.840 | was compounding very nicely to the point where it was almost like having a third income in

00:05:14.440 | the house, and as we got through the '80s and into the '90s, it became more easy to

00:05:21.520 | calculate how much you'd need for retirement.

00:05:24.720 | Back in the '80s, if you wanted to figure out when you could retire, you had to send

00:05:29.040 | away for a notebook or a workbook or maybe you could get a floppy disk from a finance

00:05:36.200 | company, and most of them would assume that you were going to retire at age 65.

00:05:40.020 | If you wanted to retire earlier than 65, you had to figure out what math they were using

00:05:44.980 | in their tables, and you had to do your own formulas, and you had to extrapolate your

00:05:48.800 | own stuff, and so that wasn't even on the radar of most financial companies or most

00:05:54.560 | planners or even most investors back in the '80s, and then in the '90s, people started

00:05:59.560 | getting a little more flexible.

00:06:00.560 | They were starting to see people retire earlier and realized that maybe age 65 is not the

00:06:04.720 | traditional retirement date.

00:06:07.920 | In retrospect, years after it was published, I discovered a book that had been written

00:06:11.960 | in 1984.

00:06:13.880 | It was written by Paul and Vicki Terhorst.

00:06:16.200 | I don't know if anybody knows this one anymore.

00:06:18.360 | It's been out of print for years, but it's called "Cashing in on the American Dream,

00:06:22.560 | How to Retire when You're Age 35."

00:06:26.560 | I remember finding that book when I was 41 years old, and I was thinking, "Crap, I missed

00:06:30.520 | the deadline.

00:06:31.520 | I was too late."

00:06:33.200 | He was an accountant at a consulting firm, and he managed to save enough money to actually

00:06:39.140 | retire in 1984.

00:06:41.100 | That was one of the very first people that I was aware of who early retired.

00:06:44.760 | He and his wife, Vicki, became expatriates.

00:06:48.440 | They became world travelers, and they spent the last 30 years going from one country overseas

00:06:54.120 | to another.

00:06:55.120 | I mean, from South America to Europe to Asia, they've been everywhere.

00:06:59.520 | What really made an impact on me and my wife was in the early '90s with the publication

00:07:04.000 | of a book by Joe Dominguez and Vicki Robin called "Your Money or Your Life."

00:07:09.000 | Have you heard of that one?

00:07:10.000 | I have.

00:07:11.000 | In fact, I've actually read "Cashing in on the American Dream" years ago, but "Your

00:07:14.280 | Money or Your Life" was one of my favorites from an early age that completely shifted

00:07:18.320 | how I thought about money.

00:07:20.440 | It was still on my top 10 recommendations list.

00:07:24.680 | Oh, absolutely.

00:07:26.080 | The movement lives on today.

00:07:27.240 | I mean, Vicki's kept the website going for years and does seminars and still talks about

00:07:31.880 | it with everybody she can get a hold of.

00:07:33.680 | It made a big difference in 1992.

00:07:35.520 | I think that was one of the first times that anybody had seen a widely publicized way to

00:07:40.600 | save your income and get to the point where you had more passive income.

00:07:44.920 | At that crossover point, that chart in the book is very important for a lot of people

00:07:49.320 | these days.

00:07:50.320 | So, we used that.

00:07:52.240 | As the '90s went on, we began to realize that we were getting closer and closer to that

00:07:55.420 | financial independence.

00:07:56.420 | I'd say by late '99, early 2000, it looked like we were probably going to make it.

00:08:02.280 | We had been saving 50% of our income for 20 years.

00:08:06.320 | If the math is done and you look at the safe withdrawal rate and 25 times your annual spending,

00:08:12.120 | it looked like we were going to make it.

00:08:14.360 | I retired in the summer of 2002, so it's been just over 12 years.

00:08:19.520 | We've taken our retirement finances through two recessions and everything's worked out

00:08:24.440 | fine.

00:08:25.440 | I mean, the recession itself is not fun, but it's nice to see that your retirement savings

00:08:29.600 | will carry you through, that your investments are working out the way they should.

00:08:33.000 | By now, we're comfortable with volatility and we understand how things are going to

00:08:36.560 | work and we all feel like we know what our spending is going to be.

00:08:41.200 | From here on out, we're just enjoying ourselves.

00:08:44.000 | You used the word semi-retired, but it's all for fun now.

00:08:48.480 | I haven't had a W-2 or any income for 12 years.

00:08:52.680 | I give away all the income from the book and the blog that I get to military-friendly charities

00:08:57.720 | and that helps people want to contribute more advice and stories for future editions of

00:09:03.080 | the book and for other books that I'm going to write someday.

00:09:05.200 | It's what I always admired most about Joe Dominguez, author of Your Money or Your Life.

00:09:11.600 | If everything I've read about him was correct, it seemed that when he retired, he actually

00:09:15.280 | retired and didn't go on to try to make a bunch of money telling other people how to

00:09:19.280 | get rich and retire.

00:09:20.400 | It seemed that he really did walk his walk and just simply lived on his portfolio and

00:09:27.240 | either gave away or he gave away, I think, income from his book and some of those other

00:09:30.880 | things, right?

00:09:31.880 | Is that correct?

00:09:32.880 | Oh, absolutely.

00:09:33.880 | By the time he died of cancer in the late '90s and by the time that was occurring, he

00:09:39.960 | had still continued to put all of his investments in treasury bonds and he was living off of

00:09:45.520 | treasuries and inflation was just eating away at him.

00:09:49.480 | By the time he died, he was living in a group home and I think he was managing to live on

00:09:53.320 | a very small amount of money, something like $8,000 or $9,000 a year.

00:09:57.200 | So he stuck with his portfolio through the rest of his life even though Paul Terhorst,

00:10:02.360 | the writer of Cashing in an American Dream, he started out all on certificates of deposit,

00:10:07.480 | all on CDs in 1984, which you could do with interest rates back in 1984.

00:10:12.560 | But even Paul by now has moved to a mix of index funds from the S&P 500.

00:10:18.520 | But Joe did not do that and he never attempted, as near as I can tell, to profit off of Your

00:10:23.840 | Money or Your Life.

00:10:24.840 | I'm sure people took care of him, but he didn't attempt to go on a world tour and make himself

00:10:30.120 | filthy rich.

00:10:31.120 | Was he burned by Wall Street?

00:10:32.840 | It just seems so strange that that's always what you have to, whenever I give the book

00:10:36.320 | away, and even in the updated version they mention this, but I always have to say, "Listen,

00:10:40.080 | you can't necessarily do this on treasuries anymore."

00:10:43.520 | Was he just burned by investing or do you have any idea why he was so committed to that

00:10:47.320 | investing course of action?

00:10:49.760 | He made his first million by the time he was 29 years old, I believe, in the late 60s.

00:10:56.280 | And I think he just felt that he'd seen enough and he wanted to do his own thing.

00:10:59.920 | I don't know that there was any particular trigger or trauma or event, except the realization,

00:11:05.120 | of course, that every day that he was working, he was losing that much of his life and he

00:11:11.040 | wanted to save and be able to do his own living.

00:11:14.240 | Interesting.

00:11:15.240 | So when you were setting out, did any of these, and it's been at least a decade since I read

00:11:20.920 | Cashing in an American Dream, so I don't remember anything that's in it.

00:11:23.440 | I've tried to track down, for the show, I've tried to track down Paul.

00:11:27.920 | I haven't been able to find him yet.

00:11:29.240 | If any listener knows how to get a hold of him, I'd love to interview him and some of

00:11:34.880 | the other people as well.

00:11:36.920 | But did they talk about actually any metrics?

00:11:39.800 | For example, today we commonly talk about 25 times annual income, but did they talk

00:11:44.000 | about any metrics or was it more of the idea at that stage?

00:11:46.840 | Well, no, for them it was the idea.

00:11:49.320 | And of course, he's an accountant.

00:11:51.120 | He was able to take his CPA skills and figure out how to project his cash flow and the assets

00:11:55.840 | he'd need for that.

00:11:57.040 | And what he did was look at his spending that they could achieve overseas in various inexpensive

00:12:02.600 | third world countries and figure that out with the CDs.

00:12:07.000 | So when they retired, 100% in CDs and they knew the income from the CDs was going to

00:12:10.360 | pay their costs of living overseas.

00:12:12.320 | Got it.

00:12:13.320 | Yeah.

00:12:14.320 | Going from 17% CD rates for a six month CD back in, I don't know what year that was,

00:12:19.920 | to today.

00:12:20.920 | I would imagine your income plan would collapse if it were still based on CDs.

00:12:26.120 | Don't try this at home, folks.

00:12:27.120 | These are trained professionals and we didn't know much back then.

00:12:30.640 | How old were you and your wife in 2002 when you retired?

00:12:33.880 | I retired at age 41 and she was slightly behind me in age and our daughter was almost 10 years

00:12:39.880 | old.

00:12:40.880 | I don't know if you've raised kids, but at that age it's what I refer to as the danger

00:12:44.880 | zone.

00:12:45.880 | So I was glad to be able to spend more time at home with her.

00:12:47.880 | Sure.

00:12:48.880 | Yeah, my wife and I have a one year old son at the moment.

00:12:51.760 | So we're not there yet.

00:12:52.760 | All I got to say is it gets better.

00:12:55.640 | Awesome.

00:12:56.640 | We're enjoying it now.

00:12:57.960 | So if it gets better, we're excited about that.

00:13:00.600 | How big of a role in your financial planning did the military background make?

00:13:04.960 | And I assume you did your 20 years in order to get the full payout amount.

00:13:09.720 | What big a role was the military pension system in your retirement?

00:13:13.920 | It started out as barely covering a portion of the bills.

00:13:17.560 | When you retire from the US military, you at 20 years get a pension that's based on

00:13:23.400 | approximately 50% of your base pay.

00:13:26.600 | And when I say approximately, we use an average of the final three years of the highest pay

00:13:30.820 | you've had during that 20 years and you get 50% of your base pay.

00:13:35.960 | What that works out to in real terms is that you have your regular military paycheck and

00:13:40.720 | your housing allowance and your food allowance and maybe some CPA or some bonus pay for other

00:13:46.160 | specialties that you have.

00:13:47.640 | And then you go and you retire, your income drops to about one third of what it was during

00:13:51.920 | your working years.

00:13:52.920 | Because again, that pension is based on your base pay and you don't get any extras for

00:13:57.200 | any of the allowances you've been earning over the years.

00:14:00.400 | So most people are caught unawares.

00:14:02.680 | They think, "Oh, well, I'm making $80,000 a year when I retire.

00:14:05.640 | I'll get a pension of $40,000 and life will be good."

00:14:08.600 | Not so fast.

00:14:09.760 | If your income is $80,000 when you're on active duty, all of your income, your allowances

00:14:14.640 | that are not taxed as well as your taxable income, when you retire, you'll be looking

00:14:19.680 | at a pension more around $23,000, $24,000 because of that issue with base pay.

00:14:26.040 | And back then we had retired with a mortgage on our home and we had expected that we would

00:14:31.880 | be able to fit that into our finances.

00:14:33.720 | What we anticipated was that I'd use the military pension to buy the groceries and pay the mortgage

00:14:40.200 | and the rest of it we'd handle from our investments.

00:14:42.840 | You know, the 4% safe withdrawal rate, we had enough investments to make that work.

00:14:48.060 | And then, I did not anticipate this at all, but then interest rates started dropping in

00:14:53.560 | the 2000s after the recession and we started refinancing.

00:14:58.480 | And so, over the years, the military pension rises with a cost of living adjustment just

00:15:03.740 | like Social Security.

00:15:04.740 | It's the same COLA.

00:15:05.740 | Over the years, 12 years of military retirement, my pension has risen by 27%.

00:15:12.680 | But more importantly, we've refinanced this property enough that our mortgage payment

00:15:16.560 | has dropped by 40%.

00:15:18.120 | And so, today, my pension, $42,000 a year, covers almost all of our spending.

00:15:26.420 | We could live on that $42,000 a year if we cut back and had to do that with non-discretionary

00:15:31.680 | expenses.

00:15:32.680 | But of course, we spend a little more money for entertainment and travel.

00:15:36.400 | But it's been very reassuring to know that the military pension and the inflation adjustment

00:15:40.160 | have covered us over the years and taken care of us.

00:15:43.040 | One other big advantage for the military retiree is cheap healthcare.

00:15:47.240 | I don't know if you track the numbers, but military retirees can get health insurance

00:15:52.800 | through TRICARE.

00:15:54.840 | The full coverage program, TRICARE Prime, has a monthly premium of about $55 tops.

00:16:03.600 | It rises a little bit every year with inflation, but again, it's one of the cheapest health

00:16:07.440 | programs around and it's enabled us to retire as well.

00:16:10.800 | If you looked at other insurance policies that you could get through the healthcare

00:16:14.480 | exchanges through the ACA, it costs, what, eight, ten times more than that for people

00:16:19.180 | even without pre-existing conditions.

00:16:21.120 | So those two factors, cheap healthcare and the cost of living adjustment on the military

00:16:26.680 | pension have been a big factor.

00:16:28.680 | Yeah.

00:16:29.680 | I've never actually worked with anybody who was on TRICARE.

00:16:33.160 | I briefly studied it in a textbook for one of my registered health underwriter classes.

00:16:39.040 | We had to do a bunch of stuff on TRICARE.

00:16:41.200 | It always struck me as something that I wanted to research more.

00:16:45.040 | In order to be eligible for TRICARE, do you need to do, what are the benefits, in order

00:16:49.120 | to be eligible for TRICARE after termination of service, what are the requirements for

00:16:54.080 | that?

00:16:55.080 | Do you know?

00:16:56.080 | You get TRICARE Prime or TRICARE Standard when you retire from active duty.

00:17:00.280 | When you retire from the reserves, and the reserves are a little different from active

00:17:04.380 | duty, the reserves in National Guard, you retire and you're awaiting your pension to

00:17:08.740 | start at age 60.

00:17:11.040 | When you retire from the reserves of the Guard, you can also get a form of TRICARE insurance.

00:17:15.280 | It's called TRICARE Retired Reserve.

00:17:17.740 | That is not subsidized by the federal government, so you end up paying a fairly high premium.

00:17:21.560 | It might be as much as $600 or $900 a month, depending on individuals or families.

00:17:27.880 | That is a good insurance program to have to bridge the time from when you stop drilling

00:17:33.160 | with the reserves or National Guard until you start your pension at age 60.

00:17:38.160 | Everything else requires you to be on active duty or be in drilling status with the reserve

00:17:42.720 | or National Guard.

00:17:43.720 | The TRICARE programs assume that you're in uniform.

00:17:49.060 | When you get to Medicare age, you might have heard of TRICARE for Life, which is a supplemental

00:17:53.900 | Medicare insurance.

00:17:55.260 | That pays a second payer to Medicare for military retirees that are age 65 or over, as soon

00:18:01.060 | as you start Medicare.

00:18:04.020 | How big of a difference does military or can, because I know now you write specifically

00:18:10.780 | towards the military audience.

00:18:13.240 | How big of a difference do the other ancillary benefits in addition to salary and in addition

00:18:17.740 | to healthcare expenses?

00:18:19.060 | For example, housing provided, I'm not fully, my dad was in the Navy in the subs, but I've

00:18:26.580 | never been in.

00:18:27.580 | I know that a lot of other stuff is covered.

00:18:31.020 | How big of a difference does that make from the perspective of an early retirement?

00:18:34.620 | Twenty, 25 years ago, it used to make a substantial difference.

00:18:38.540 | Big box stores have cut that down quite a bit these days.

00:18:41.920 | For example, you used to try to retire near a military base so that you had access to

00:18:45.820 | a commissary for food and used to try to go on a base to buy cheap gasoline or to be able

00:18:51.900 | to use the exchange.

00:18:53.340 | Costco, Walmart, Sam's Club, all of those big box stores have followed up on that model.

00:18:58.940 | Today, the prices are pretty close.

00:19:01.580 | You generally know what's cheaper at Costco and you know what's more expensive at Walmart

00:19:05.780 | and you know where to buy gas on base at a good price.

00:19:09.140 | I would say that the base access is not as significant as the cola and the healthcare.

00:19:17.240 | Some people though, you take great comfort in being able to go on the base where you

00:19:21.200 | know the culture and you know the places that are familiar to you.

00:19:25.420 | You can go work on your car at the auto hobby shop.

00:19:28.860 | You can go pull your car in and rent a lift for the ridiculous sum of like $5 or $10 an

00:19:34.140 | hour.

00:19:35.140 | You can go join the gym and have a workout program there or a runner's club.

00:19:39.540 | Again, it's a very nominal fee for retirees.

00:19:42.660 | People enjoy doing that.

00:19:44.820 | We're much less tied to military bases in retirement than we used to be 25 or 30 years

00:19:49.900 | ago.

00:19:50.900 | I'm going to read a paragraph here, but the question is, "Do you think that joining the

00:20:01.300 | military would be a primary strategy for someone who's primarily interested in saying, 'How

00:20:10.020 | quickly can I retire?'"

00:20:12.700 | And before you answer that, I want to read a paragraph as an introduction here.

00:20:16.500 | This is from a Yahoo Finance article, which you are very familiar with both this article

00:20:20.620 | and the follow-up.

00:20:22.100 | But the paragraph here is about a young man named Anton Ivanov.

00:20:31.020 | And the story was that at 27 years old, he had become a millionaire.

00:20:34.980 | And one of the primary ways that he did this was by joining the military, which allowed

00:20:39.380 | him to save 60% of his income.

00:20:41.500 | And this paragraph in the story here says, "Fortunately, military life was the perfect

00:20:45.820 | environment for a single person looking to save.

00:20:49.080 | The bulk of his fixed expenses, housing, food, transportation, insurance, were covered.

00:20:54.180 | He set up automatic transfers for his savings and investment accounts and followed a strict

00:20:58.340 | schedule.

00:20:59.340 | First, he maxed out his annual Roth IRA contribution.

00:21:02.100 | Then he contributed the maximum to his annual thrift savings plan, the federal employee

00:21:06.100 | version of the 401(k).

00:21:07.940 | Then he split the remaining balance between his brokerage account and the savings funds

00:21:11.460 | he keeps for future real estate investments.

00:21:14.180 | While he studied here and extra cash through one-off web design and programming gigs, he

00:21:17.780 | got through freelance job sites like elance.com and odesk.com.

00:21:22.500 | He estimates these side jobs added another $15,000 to $20,000 to his annual income."

00:21:27.420 | So if that paragraph were true, then this sounds like basically the ultimate retirement

00:21:33.220 | plan.

00:21:34.220 | Join the military, all of your expenses are covered, save 50% of your income, use all

00:21:37.140 | your extra time to earn extra money, and invest it wisely.

00:21:40.940 | Comment away.

00:21:42.980 | It actually works.

00:21:45.220 | It's the real proof, the real system.

00:21:47.500 | And it's a shame that he went and lied about his actual sources of his assets and destroyed

00:21:53.740 | his credibility.

00:21:54.740 | I take that very personally because he's a military veteran.

00:21:57.300 | You should know better than to lie like that.

00:22:00.260 | But the reality is that all those methods he describes work just fine in the military.

00:22:04.500 | I'd even go a step further and say that in the military, when you're in uniform, you

00:22:08.620 | are extremely familiar with deprivation.

00:22:13.020 | You're used to living outdoors for weeks at a time.

00:22:15.660 | You're used to living in a very small space with a very small bed and very limited storage.

00:22:20.940 | You're used to working long hours and strange hours.

00:22:24.480 | You're used to only being fed once or twice a day if you're out in the field.

00:22:28.620 | There's a whole bunch of different things in the military that we put up with that even

00:22:33.780 | convicts in the federal prison system have lawyers who have given them more privileges

00:22:37.420 | and more rights than some people in the military.

00:22:41.780 | And yet, it works.

00:22:43.900 | And by that line between frugality and deprivation, you can easily save 40 to 50% of your pay

00:22:50.340 | while you're in active duty, even if you're single, even if you're married.

00:22:54.440 | Either way, you can still try to save 40 to 50% of your money while you're in uniform.

00:22:58.900 | And the way that he lays out the savings program is exactly where you're supposed to do it.

00:23:04.300 | Max out your Roth IRA, max out your thrift savings plan, put the additional money in

00:23:07.860 | taxable accounts, and plan for your transition.

00:23:11.260 | It works.

00:23:12.260 | The math is there and the money from the military is there.

00:23:15.220 | Admittedly, when you join the Navy or any of the services at the age of 17 or 18 years

00:23:20.020 | old, you're going to have a very small paycheck.

00:23:22.060 | And you might be challenged even at maxing out the contribution to your Roth IRA.

00:23:26.580 | But the longer you stay in the military, the more your pay rises, the more you get promoted,

00:23:30.180 | and the easier it is to max out your Roth IRA, your spouse's Roth IRA, your thrift savings

00:23:34.780 | plan, and that accelerates and compounds.

00:23:37.740 | So everything he said, it works.

00:23:39.820 | It's just a shame that he had to lie about his assets.

00:23:42.020 | Yeah, and the backstory on this is as we record this on November 25th, a couple days ago it

00:23:48.340 | came out.

00:23:49.340 | The backstory was published that I just referenced.

00:23:51.580 | But then some days later it came out that the man had evidently lied about the entire

00:23:55.940 | thing and the bulk of his million dollar net worth, I guess he actually was a millionaire,

00:24:01.580 | but the bulk of that million dollar net worth was accumulated through his, like an inheritance

00:24:11.980 | that he had received of some kind.

00:24:13.740 | And that was the primary source of wealth.

00:24:16.340 | And so the problem was that it may have violated the actual facts, and that is a legitimate

00:24:23.780 | issue, violated the actual facts, but that doesn't take it away as a useful example.

00:24:29.220 | Exactly.

00:24:30.220 | And again, he destroyed his credibility there, but the math still works.

00:24:34.540 | And I'd encourage all service members today to keep maxing out their contributions to

00:24:38.740 | their IRAs, to their thrift savings plan, and save as much as you can for as long as

00:24:43.300 | you can.

00:24:44.300 | The reason is because in the military you're extremely experienced with being frugal, and

00:24:48.460 | you know when you've gone too far because you've experienced deprivation too.

00:24:53.500 | How much does, at 18 years old, someone joining up, 18, just a rank and file person, how much

00:25:01.820 | does an 18 year old recruit make, would you guess?

00:25:04.660 | It's pretty pitiful.

00:25:05.660 | It's about 17, $18,000 a year in paycheck.

00:25:09.340 | But again, housing is subsidized or free.

00:25:12.580 | Food is subsidized or free as well.

00:25:14.620 | It depends on where you're stationed and whether you're married or not.

00:25:17.940 | And the total compensation package when you just join the military is probably about $30,000

00:25:22.820 | to $35,000 a year.

00:25:24.980 | Again that's highly dependent on what part of the country you're living in and whether

00:25:27.620 | you're stationed overseas, because the living allowances that you get for food and housing

00:25:32.180 | will vary with the location you're stationed in.

00:25:36.060 | And I would add to that, that after you've been in the military for a couple years, you're

00:25:39.740 | probably getting at least one promotion if you sign on for a very technical field or

00:25:44.700 | if you sign on for a little longer commitment, like six or eight years, then you get a couple

00:25:48.620 | more promotions.

00:25:49.980 | So that starting salary is like going into a McDonald's and working a minimum wage job.

00:25:54.940 | However, if you were doing the equivalent of working at McDonald's, then by the way

00:26:00.660 | the military works it, within six years you'd be running that McDonald's.

00:26:03.860 | And that's what happens in the military is that with a six or eight year enlistment,

00:26:08.460 | you'll be at least up the ranks to E5 or E6 and you'll be looking at annual compensation

00:26:13.260 | of, again this depends on skills and where you're stationed, of between $50,000 and $75,000

00:26:18.980 | a year.

00:26:19.980 | I have a friend who owns a bunch of McDonald's and if you apply yourself in six years you

00:26:26.020 | can be running any McDonald's in the world.

00:26:28.820 | It's not, that's right, it's not about the skills, it's just about the work and the persistence.

00:26:33.860 | You know, I don't know if your father was a nuclear trained submariner or not.

00:26:36.780 | He was on the last of the diesel boats.

00:26:38.820 | Oh, okay.

00:26:39.820 | Diesel boats forever, guy.

00:26:42.820 | The nuclear trained officers today in the submarine force are able to, at their sixth

00:26:48.500 | or seventh year of service, make over $100,000 a year on a bonus contract.

00:26:53.780 | It's as high as $130,000 a year total package just for all the nuclear training and for

00:26:59.140 | being willing to stick around past that initial obligation for a few more years.

00:27:03.460 | Right.

00:27:04.460 | I'll tell you an interesting story, I'll make it very brief, but Admiral Rickover actually,

00:27:08.220 | he rejected my dad and when he applied to the program because his grades weren't good

00:27:14.340 | enough and he was very hard working but he was working full time and going to school

00:27:19.900 | full time and he'd gotten his engineering degree and he was rejected.

00:27:23.820 | So he stayed on the diesel subs but looking back on it later, he was on the last of the

00:27:29.620 | diesel subs.

00:27:30.620 | And they sold it to, it's parked in Arkansas, Razorback I think is what-

00:27:35.020 | Oh, okay.

00:27:36.020 | Of course it's Razorback.

00:27:37.020 | Yeah.

00:27:38.020 | That was the boat that he was on.

00:27:41.020 | But he looks back on it and he says one of the greatest blessings that he ever had was

00:27:44.460 | that he didn't wind up in the nuclear program just because at that time, the lifestyle,

00:27:49.660 | I mean it was so difficult as it was to be on the diesel boats and out on six month cruises

00:27:54.620 | and just the sheer difference of intensity that it would have required from the nuclear

00:27:58.860 | program.

00:27:59.860 | And he was glad later with hindsight that he was, that passed over for that.

00:28:05.460 | I got a chance to speak with the Admiral myself three days before he retired and he was a

00:28:10.740 | little grumpy about it but that's how I got in the program.

00:28:13.780 | After he had what, he was the one who completely changed the rules for how many years, right?

00:28:18.820 | Exactly.

00:28:19.820 | So that he could keep running the Navy long past anyone that was supposed to be around.

00:28:23.740 | Well, they actually passed some new laws.

00:28:26.420 | Congress passed new laws after he retired because by that point, he'd outlived all his

00:28:30.220 | supporters in Congress.

00:28:33.820 | It did make us very intense and focused over the years.

00:28:36.940 | In the last 12 years, I spent a lot of time trying to slow down and not be so intense

00:28:41.940 | and focused about certain things just because of my submarine nuclear training background.

00:28:46.420 | I believe it.

00:28:47.700 | So let's continue on the early retirement theme.

00:28:50.520 | So your early influences were Paul Terhorst's book, Cashing in the American Dream and then

00:28:57.820 | Your Money or Your Life.

00:28:58.820 | But you've watched this develop.

00:29:00.560 | So today, I've come in on the tail end of this stuff.

00:29:04.940 | Basically now where it's this massive, I think it's a massive movement all across the world.

00:29:09.720 | What were some of the other developments and especially how did the online community develop?

00:29:16.120 | I was dialing into bulletin board systems with a modem back in the late 90s.

00:29:21.520 | Back then, one of the more popular places to have an internet discussion was The Motley

00:29:26.480 | Fool.

00:29:27.480 | This was back when The Motley Fool was a brand new startup and very popular among people

00:29:31.480 | because all their forums were free.

00:29:34.640 | They had a very robust retire early homepage there that had a lot of people posting on

00:29:40.000 | it and a lot of discussions back and forth.

00:29:42.400 | Then The Motley Fool tried to charge a monthly fee.

00:29:45.000 | It was some ridiculous sum like $5 a month to be a member of The Motley Fool forums and

00:29:49.360 | that led to a mass exodus.

00:29:52.720 | That business plan did not work out well for the fools but the residents there on the retire

00:29:57.960 | early page left and went to a new forum that was started by a guy who's still in the business

00:30:03.380 | today.

00:30:04.380 | He started his forum in 1996.

00:30:06.360 | It's the retire early homepage.

00:30:08.280 | His name is John Greeney.

00:30:10.880 | He retired from the oil and gas industry in the Houston area back in the late 90s.

00:30:17.240 | Even today, it's been 18 years, he still posts to his forum I'd say four or five times a

00:30:22.880 | year.

00:30:25.340 | They all moved over there and they started doing the same research and discussion that

00:30:28.880 | they'd been doing on The Motley Fool.

00:30:32.320 | Another forum got started in 2002.

00:30:36.080 | This is one that I've been associated with for over 12 years now.

00:30:40.020 | It's called the earlyretirement.org website, early-retirement.org.

00:30:47.920 | That got started in 2002 by a web designer, a guy who had retired from an IT job.

00:30:55.840 | He said that when he was working in the late 90s that one of his office mates had a retirement

00:31:01.980 | ceremony and they made a big joke out of putting all kinds of retirement stuff on a door to

00:31:06.200 | his office.

00:31:07.920 | One of them was a printout from that John Greeney retire early homepage that had all

00:31:12.240 | the information about early retirement.

00:31:13.760 | That was the first time that this guy at earlyretirement.org had thought about early retirement.

00:31:19.640 | What he managed to do was not only to retire early, but he and his spouse bought a small

00:31:24.680 | boat, a trawler, a 36-foot trawler.

00:31:27.160 | They actually spent their time cruising up and down on the intercoastal waterway.

00:31:32.760 | He was running the forum from his cell phones in the afternoons after they would tie up

00:31:37.720 | somewhere he'd get online with his cell phone at some pitiful data rate and manage the forum.

00:31:45.160 | That went on from 2002 to about 2005.

00:31:48.560 | The forum kept growing the whole time as more of us got in there and got interested in figuring

00:31:53.440 | out the math and the lifestyle behind early retirement.

00:31:56.520 | That was Dory36.

00:31:58.720 | He named his online presence for the boat.

00:32:01.720 | He was on a 36-foot trawler.

00:32:05.040 | I had worked on that forum when I retired in 2002.

00:32:08.800 | About 2004, I started asking questions about the lifestyle and the finances.

00:32:14.200 | I'd been, of course, early retired for 18 months by then, but I was just checking in

00:32:18.200 | with the experts here to make sure I didn't miss something.

00:32:20.520 | I wanted to make sure I understood all the factors and had accounted for them all.

00:32:24.440 | I wanted to know if the, I wouldn't call it a failure rate, I'd call it a recidivism rate

00:32:30.240 | was higher than 50%.

00:32:33.200 | I wanted to know if people were just sitting around for a couple of years and then going

00:32:35.920 | back to work.

00:32:36.920 | I was, "Oh, no, no.

00:32:39.400 | If you're having fun and you're early retired and you're enjoying life, it's probably going

00:32:42.440 | to continue like that for the rest of your life."

00:32:45.520 | That was very reassuring.

00:32:46.520 | I hung around on that board.

00:32:47.760 | I've been posting there since early 2004, over 10 years, almost 11 years now.

00:32:54.720 | There have been a few other sites over the years.

00:32:57.040 | One other site that started up in 2004 was started by a retired radiologist.

00:33:05.200 | His poster name is Raddr, R-A-D-D-R, Radiation Doctor.

00:33:11.640 | He did a lot of math and number crunching back then.

00:33:13.840 | He figured out a lot of the math behind the 4% safe withdrawal rate.

00:33:18.560 | He looked at long-term retirements.

00:33:21.120 | The original 4% safe withdrawal rate was for a 30-year survival on a portfolio.

00:33:26.720 | He did research, some of the first research I'd seen, to extend that out to 50 years.

00:33:30.760 | Of course, he came up with a slightly smaller number, but it was encouraging to see that

00:33:34.600 | it could work.

00:33:36.360 | His board is also still active these years, after all these years.

00:33:42.360 | He did a lot of the website research and then left that as a webpage and then went on and

00:33:46.360 | started a forum.

00:33:47.360 | I'd say the next big initiative was Morningstar.

00:33:52.840 | The Monopoly Fool was one of the first places to have a robust bunch of forums about investing

00:33:58.200 | in retirement, but Morningstar also had a bunch of forums of their own.

00:34:03.520 | There was an incident, I'd say around 2006, 2007, I'm not exactly sure when, a lot of

00:34:10.440 | the boards were not very well moderated by Morningstar.

00:34:14.280 | One of the forums that they had there was the Vanguard Diehards.

00:34:17.960 | They had a notorious troll on there.

00:34:22.360 | That troll just completely ruined the environment for everybody.

00:34:26.560 | It actually inspired a number of the Vanguard Diehards to break off and start their own

00:34:30.080 | forum and that became Bogleheads.

00:34:32.080 | Interesting.

00:34:33.080 | Yeah, that was the start of Bogleheads.

00:34:35.000 | It was the problems that Morningstar had taking care of moderating their own forum.

00:34:40.640 | I think it's been one of the greatest things to happen for early retirement.

00:34:43.480 | The Bogleheads have done a lot of work to make sure everybody understands not just early

00:34:48.280 | retirement but investing and conventional retirement, whatever retirement you want.

00:34:53.880 | One of their biggest contributions has been their wiki.

00:34:56.000 | They've put together a very robust archive of information articles on retirement, investing,

00:35:02.080 | and lifestyle.

00:35:03.680 | We've contributed to a substantial archive over there for the military as well as for

00:35:07.580 | other types of occupations and other people that are interested in either a traditional

00:35:12.400 | career and retiring in their 60s or early retirement or maybe they're just interested

00:35:16.680 | in working for the rest of their lives or living overseas, however they want to do it.

00:35:20.040 | Let me ask you a question and interrupt your time flow here with a question about forums

00:35:23.720 | because I personally have really enjoyed a lot of forums and have learned from them.

00:35:28.760 | I've recommended to many people, including clients, that the best place to go is to find

00:35:33.280 | a good forum and ask people.

00:35:34.840 | But I have two concerns about that.

00:35:38.120 | The first one is a small concern that usually forums are organized around one specific theme

00:35:42.680 | so you've got to find the right forum.

00:35:44.500 | For example, if you are in the Bogleheads forum, you're going to get acolytes of John

00:35:50.040 | Bogle, which is nothing wrong with that, but there are other points of view and that would

00:35:54.480 | be different than I've never been in the forum, but I'm sure there's a Berkshire Hathaway

00:35:58.680 | stock owners forum somewhere.

00:35:59.680 | I've never been there, but I'm sure it exists.

00:36:01.800 | So that would be a different perspective.

00:36:04.080 | But my bigger concern is how to figure out who knows what they're talking about in the

00:36:07.800 | forums because I've privately connected and I've privately contributed and anonymously

00:36:14.080 | contributed in a few forums, which I think is one of the big major values.

00:36:17.520 | But there are a few forums where I've publicized who I am.

00:36:19.920 | Probably the one I've participated in the most is the Money Mustache forum, which is

00:36:23.240 | a great forum, but sometimes I go in there and I see somebody giving bad advice.

00:36:28.120 | The other day I posted somebody had a question on life insurance and I only had time, but

00:36:33.800 | I said, "Let me give it..."

00:36:35.640 | The question was I'm 23 years old and I went in and they said, "What kind of life insurance

00:36:41.960 | should I buy?"

00:36:42.960 | And I said, "Well, that's a great consideration and it's a topic I know my stuff in."

00:36:46.720 | And they were trying to figure out the difference between the AICPA offerings versus others.

00:36:53.000 | And all I simply said was I said, "Don't buy level term life insurance.

00:36:56.240 | Buy annual renewable term life insurance at your age."

00:36:59.720 | And that's a very unusual but very, very strong and I feel very strongly about that perspective.

00:37:07.120 | But I'm very qualified to go in and defend that, but I'm not willing to dedicate the

00:37:11.740 | time to going into the forum and saying, "Here's why you need to listen to me."

00:37:18.360 | And I don't want to go in and get in an argument with people, but the problem is that many

00:37:21.760 | people are very well intentioned, but they might not have necessarily the level of technical

00:37:26.160 | background to understand what they're doing.

00:37:27.640 | How do you figure out who's blowing smoke and who knows what they're talking about in

00:37:30.960 | a forum?

00:37:31.960 | You have to do your own due diligence.

00:37:34.160 | And so somebody will come across in a forum, they may be very articulate, very reasonable,

00:37:37.960 | their name may be Anton Ivanov, and you have to figure out if what they're saying is not

00:37:43.600 | only making sense for your particular situation, but whether you can find that information

00:37:47.880 | and confirm it at other websites.

00:37:50.160 | I try, every time I talk about military benefits or pay or military retirement, I try to back

00:37:54.920 | it up with the source from either a study or from the instruction on the Department

00:38:00.200 | of Defense website or some other credible source.

00:38:03.480 | And it's that way when you're talking about early retirement or investing.

00:38:08.120 | You'll go to a study somebody has done somewhere, maybe it's something as simple as a Vanguard

00:38:12.760 | marketing sheet, but it might be something more thoroughly researched, like the work

00:38:16.840 | that Wade Pfau is doing on the safe withdrawal rate, or some old stuff like the original

00:38:22.200 | Behnken thought about the safe max withdrawal rate, or even the Trinity study.

00:38:26.840 | So you have to read, you have to get familiar.

00:38:29.200 | I would not blindly go into an internet forum and say, "Oh, hey, great, this anonymous guy

00:38:33.240 | on the internet says I have enough assets to retire.

00:38:35.280 | Good, I'm done."

00:38:36.280 | Instead, you've got to go sit down and do your reading and do your math and figure out

00:38:41.040 | from a retirement calculator or from whatever books or whatever other authoritative websites

00:38:45.800 | you personally trust whether you want to do this.

00:38:49.000 | And it's not just, "Is the math there?

00:38:51.480 | Can I do this because the math works?

00:38:53.680 | Can I do this because a research study and a computer simulation say this works?"

00:38:57.920 | You also have to have a personal level of comfort that might actually be a bigger challenge

00:39:02.140 | than saving enough assets.

00:39:04.600 | And that personal level of comfort can take a while to develop.

00:39:08.000 | You may figure out that you have more than enough money to last the rest of your life,

00:39:11.320 | but you still have to figure out how you're going to live your life and what you're going

00:39:14.040 | to do with your time.

00:39:16.000 | And the joke on most of the early retirement forums is, "What are you going to do all day?"

00:39:21.160 | And there are other books and other websites to go to for that to help you figure out what

00:39:25.480 | your interests are and how you're going to occupy your time.

00:39:27.760 | And I think that being responsible for your own entertainment is a big challenge for some

00:39:32.700 | people especially if they identify closely with their job.

00:39:36.540 | That can hold up the transition and make it even worse if they're actually laid off or

00:39:41.980 | fired.

00:39:43.500 | So there's a big emotional component to retiring early that is very reassuring to get from

00:39:49.500 | posting on internet forums and reading what other people have to say about early retirement.

00:39:53.140 | But again, you've got to do your own due diligence, got to read, got to figure out if this is

00:39:57.020 | really going to work for your personal situation.

00:39:59.380 | I don't have many concerns about the personal finance issues or even like saving money issues.

00:40:04.620 | Those things are fairly simple.

00:40:06.180 | What I have concerns about are when people get into specific discussions on specific

00:40:11.500 | products.

00:40:12.500 | For example, there's a massive difference between one insurance product from one company

00:40:17.140 | versus another or versus from one annuity product to another annuity product.

00:40:21.640 | People often throw, I observe, many contributors throw the baby out with the bathwater and

00:40:28.400 | say, "Oh, no, you can't.

00:40:30.280 | Don't ever buy annuities."

00:40:31.640 | Forgetting the fact that Doug Nordman is living on one annuity right now called the military

00:40:37.520 | pension system and will have another one called the social security system.

00:40:42.160 | Doesn't mean that there's anything wrong with an annuity, it just means you got to get a

00:40:44.320 | good one and it's got to fit.

00:40:46.320 | And then the other thing is when people often get into legal advice surrounding trust, estate

00:40:53.080 | planning, tax planning.

00:40:55.240 | I used to think that the advice was good and then I learned.

00:40:59.360 | As I've grown, then I've learned, the problem is I just don't have time to contribute.

00:41:04.320 | So I love forums.

00:41:05.560 | I think they're awesome.

00:41:06.560 | I always just worry though, I hope people are backing it up with their own due diligence.

00:41:11.400 | It's a great place to gather ideas and to gain from stuff.

00:41:16.040 | I've learned so much stuff in forums that I can never find in a textbook, but got to

00:41:20.120 | back it up with some research.

00:41:21.120 | Oh, and you've got to learn the vocabulary so that when you do go talk to a financial

00:41:25.360 | professional, you know what questions you should ask and you are listening for the keywords

00:41:29.760 | and the caveats and other tricky phrases that might make you get the wrong impression.

00:41:36.360 | I always love people say, "Hey, I'm going to go talk to a financial advisor.

00:41:42.000 | What options do you have?"

00:41:43.600 | Because man, it's the greatest thing in the world when a client comes in.

00:41:46.640 | I come from the background of a financial advisor.

00:41:48.600 | It's so wonderful to work with a client who knows their stuff, knows the questions they

00:41:54.080 | should be asking and allows you to spend your time showing off your skill and your knowledge

00:42:01.680 | answering something that's better than, "How do I save money?"

00:42:05.040 | Well, the other thing is you can educate yourself for free on an internet forum and then go

00:42:09.480 | into that financial advisor's office and start a project that may only take an hour to explain

00:42:15.160 | to you instead of five hours to educate and then explain to you.

00:42:18.120 | So it saves quite a bit of money just educating yourself.

00:42:20.760 | I tell people that financial advisors have to know a little bit about everything.

00:42:25.120 | They've got to be a mile wide and an inch deep on every topic of finances.

00:42:29.080 | But a person that is saving for their own early retirement, they only have to be an

00:42:33.760 | expert on their finances.

00:42:35.440 | They can be an inch wide and a mile deep on their own financial situation.

00:42:39.320 | That's all they need to talk about with a financial advisor is to know what they need

00:42:42.720 | to understand for their personal situation.

00:42:45.080 | They can get a lot of that from an internet forum and then confirm it with a professional

00:42:48.760 | if they're not certain that's what they want to do.

00:42:51.640 | They can gather some good data as far as points of concern.

00:42:55.960 | "Here's what I should be watching out for."

00:42:59.280 | Someone like me can say, "Well, have you considered this, this, this?"

00:43:02.680 | Work those things together.

00:43:03.680 | The key is the financial advisor can know your actual details.

00:43:07.960 | And that's the difference that I've observed.

00:43:10.880 | At this point, when someone says, "This is what you should do without knowing details,"

00:43:15.120 | I'm done.

00:43:16.120 | That's bad advice.

00:43:17.120 | Well, the more you lurk, the more you post on internet forums, the more you hang around

00:43:22.440 | the advice that people are giving, the quicker you'll be able to see who's just using absolutes

00:43:27.240 | and negatives all the time and they only see things in black and white instead of the shades

00:43:30.980 | of gray, others who are stuck on one particular topic and never figure out how to take a more

00:43:36.480 | nuanced view of things.

00:43:38.400 | It takes a while to see that when you're on an internet forum, but that's why I like sticking

00:43:41.440 | with one for a while to understand the personalities and the backgrounds of the people who post

00:43:45.400 | there.

00:43:46.400 | Until we all start posting our tax returns and our salary structure and our paychecks

00:43:52.480 | on internet forums, we're all going to try to keep those details private.

00:43:55.800 | So you have to figure out what's right for your own situation.

00:43:59.080 | So the bogey heads grew and then early-retirement.org grew.

00:44:05.320 | Were there more developments after that that made a big difference?

00:44:09.800 | We started crowdsourcing on early-retirement.org forum.

00:44:14.100 | One of the posters was an entrepreneur and a guy in a tech business in the '90s and he

00:44:20.520 | had just retired early.

00:44:22.920 | His idea was that he was not going to completely retire cold turkey and never work again.

00:44:27.000 | He wanted to retire and do a little of this, a little of that, maybe some consulting, maybe

00:44:31.040 | some part-time work.

00:44:32.040 | He really didn't know what he wanted to do with the rest of his life, but he expected

00:44:36.280 | to live a life where he did some work all the time as long as he was capable of it.

00:44:41.760 | His name is Bob Klyatt.

00:44:44.080 | Bob went on to write a crowdsource book from the early-retirement forum called Work Less,

00:44:49.000 | Live More.

00:44:50.000 | That came out in 2005.

00:44:52.800 | Bob's pick on that book was one that he had a lot of personal stories in there from the

00:44:58.280 | posters on the early-retirement website.

00:45:00.960 | He also had a lot of advice from us, enough advice to the point where he went out and

00:45:05.760 | he paid a programming firm to simulate a different type of withdrawal system that no one had

00:45:12.500 | looked at until now.

00:45:14.880 | Bob was one of the first guys to develop a variable withdrawal strategy in retirement.

00:45:22.680 | What that meant was that you could retire and start taking money out of your portfolio

00:45:27.720 | at what you think was the safe withdrawal rate of 4%.

00:45:31.040 | But then if a big recession hit, you could cut your spending back a little bit and not

00:45:35.600 | have to cut it back too severely.

00:45:37.840 | Bob was able to actually hire a computer firm that could do the programming and do the analysis

00:45:41.840 | and show that in retirement, a variable withdrawal system would allow your portfolio to survive

00:45:49.240 | longer.

00:45:50.600 | Nobody ever been able to figure this out before because it's just too complicated.

00:45:53.720 | The original research on retiring assumed that you spent the same amount every year

00:45:58.200 | adjusted for inflation because that was the most the computer programming could handle

00:46:02.040 | back then.

00:46:03.280 | So Bob's contribution was nice to see a variable system, which is the way that I spend in retirement.

00:46:09.980 | No matter how logical or how experienced you are, when the market's up, you're going to

00:46:13.800 | probably spend a little more money.

00:46:15.240 | When the market's down and everybody's jumping out of second-story windows, you're probably

00:46:18.880 | going to spend a little less money in a recession.

00:46:21.800 | Bob also used that crowdsource model to get a lot of content for the book and that really

00:46:26.720 | helped him write it, was being able to have people email him stuff and he would try out

00:46:31.360 | snippets of chapters on us and he would ask us questions about the text or the conclusion

00:46:37.160 | of the book.

00:46:38.160 | The publisher had a hard time with understanding the concept of early retirement.

00:46:42.000 | So he was able to show that there was a big forum where this was discussed all the time

00:46:45.960 | and explain to the publisher what was going on and they bought into it.

00:46:50.680 | When I saw Bob do that, I thought, "Geez, you know, the military service members that

00:46:55.200 | retire, they've already got a pension adjusted for inflation and they've already got cheap

00:46:58.400 | health care.

00:46:59.400 | There should be more military retirees.

00:47:01.160 | Where are all the military retirees who are going to do work less, live more?"

00:47:05.080 | And that's how my book got started.

00:47:07.280 | We crowdsourced on the same model that Bob Clyatt used.

00:47:10.200 | We got a bunch of advice and stories from service members and their families and veterans

00:47:15.000 | and military retirees.

00:47:17.160 | I would write a chapter and farm it out to 20 or 30 people and take their feedback and

00:47:22.680 | keep working it.

00:47:24.160 | I took it very slow and took it very leisurely, but over the next six years we wrote a book

00:47:29.720 | and published that as the Military Guide to Financial Independence and Retirement.

00:47:34.360 | Now, Bob has gone on in his, he calls it, semi-retirement to become a sculptor.

00:47:41.760 | Oh, he is an incredibly talented sculptor.

00:47:45.760 | He was one of those guys who always enjoyed high school art classes, but when it was time

00:47:49.160 | to go to college, his father suggested he should study business and get a real job instead

00:47:52.720 | of being an artist.

00:47:55.000 | So Bob avenged himself by retiring early and going back and starting his art.

00:48:00.840 | But he has done amazing work.

00:48:02.560 | He lives on a suburb of Long Island near New York City and he has a lot of art galleries

00:48:08.940 | around there that he exhibits in and his last name is spelled C-L-Y-A-T-T, Cliet, Bob Cliet.

00:48:16.480 | And look him up in the internet for Bob Cliet Sculptures.

00:48:19.280 | He does wonderful work with figures of people's bodies and people's heads and abstract, a

00:48:27.280 | take off on a sculptor of a person or somebody out there doing something like leaping or

00:48:33.120 | dancing.

00:48:34.120 | He has figured out how to do amazing structural things with sculpture.

00:48:38.400 | I had no idea when I sat down to watch him do a video of how to make a head out of clay.

00:48:43.560 | I had no idea there was so much engineering in it.

00:48:45.760 | And Bob has done a lot of work on it.

00:48:48.040 | He's actually traveled to foundries in the People's Republic of China to build sculptures

00:48:55.120 | of his art three or four foot high.

00:48:58.600 | A head that big cannot be built out of just clay.

00:49:01.360 | It has to have a bunch of infrastructure inside it.

00:49:03.800 | And then he's figured out how to do the metallurgy behind casting it.

00:49:07.040 | So he's just done tremendous things in retirement with art.

00:49:10.560 | And he's living his dream.

00:49:11.560 | He's having a wonderful life.

00:49:12.960 | And his spouse keeps having to bring dinner out to the art studio late at night after

00:49:17.280 | he's waiting for something to cool or he's experimenting with some new technique.

00:49:21.280 | He has really figured out what he's going to do all day.

00:49:24.760 | And I feel the same way after I got the book written and published that I had never had

00:49:29.840 | a day when I felt bored or where I felt unfulfilled or had trouble figuring out what I was going

00:49:35.080 | to do with myself.

00:49:36.720 | And Bob and I, we immediately connected on that basis.

00:49:39.280 | And we've been good friends for the last almost ten years now.

00:49:44.920 | This to me is one of the things I love about early retirement is just not viewing it as

00:49:51.640 | a goal but viewing it as a milestone that I think of.

00:49:55.520 | It's a journey.

00:49:56.520 | Right.

00:49:57.520 | Because my observation, maybe you know somebody.

00:50:00.640 | I've had people ask, "Can you bring someone on who doesn't work?"

00:50:04.000 | And I'm like, "Well, the people who actually have the money to retire, they don't quit

00:50:08.320 | working.

00:50:09.320 | Now, they may quit working for pay.

00:50:10.320 | It sounds like you've done that.

00:50:11.760 | Have you done that fully?

00:50:12.760 | Are you doing anything that earns you money?"

00:50:14.960 | No.

00:50:15.960 | All the income from the book and the blog income goes to military-friendly charities.

00:50:21.440 | And there's a couple of reasons for that.

00:50:22.920 | One of them is what we're going to now start calling the Ivanov reason where you want to

00:50:26.680 | be completely transparent about your income and your assets.

00:50:29.440 | But the other reason is that it encouraged people to contribute their advice and their

00:50:33.640 | stories.

00:50:34.640 | I said, "Hey, if you help me write the book, then when we start giving the royalties to

00:50:38.040 | charities, you get a vote on which military charity gets the royalty money."

00:50:42.120 | And it really encouraged people to volunteer that I think otherwise would not have been

00:50:45.400 | interested.

00:50:46.400 | That is so cool.

00:50:47.960 | I love the crowdsourcing of books and ideas.

00:50:53.480 | What a cool world we live in.

00:50:54.520 | Well, you know that you can go out there and write an e-book and you can freelance an editor,

00:51:00.120 | you can freelance a cover designer, you can freelance a copy editor, whatever you need.

00:51:04.440 | And you can also crowdsource that.

00:51:05.720 | If you've got enough people who are happy to help, there are a lot of people out there

00:51:08.560 | that are retired artists, retired editors, retired copywriters, retired authors.

00:51:13.080 | And if they want to help you with your project, they'll contribute the labor.

00:51:16.600 | It's inspiring to them and it's fun.

00:51:19.560 | I also wanted to touch on, you talked about the variable withdrawal strategy.

00:51:22.680 | This is one of the things I love about the early retirement community is in general,

00:51:27.080 | the challenge that there's often a very different language that's spoken between mainstream

00:51:31.720 | financial advisors and the early retirement community.

00:51:35.720 | And what I think people often forget, at least in my observation, is that the mainstream

00:51:39.760 | financial advisor's job, it's so rare to find someone who's saving 10% of their income that

00:51:45.240 | you're almost excited when someone's saving 10%.

00:51:47.840 | Now you run across somebody who's saving 20% or 30% or 50%.

00:51:55.520 | It doesn't happen in a financial advisor's job.

00:51:58.720 | So you can forgive us if we're a little bit surprised when someone says, "I'm saving 70%

00:52:04.080 | of my income.

00:52:06.240 | What do you think about my financial plan?"

00:52:07.680 | This is not something that we see every day.

00:52:09.480 | And not only that, but you realize they're probably going to retire earlier than you

00:52:12.920 | are.

00:52:13.920 | Right, right.

00:52:14.920 | Yeah.

00:52:15.920 | And just because someone's a financial planner does not mean they're good with money.

00:52:17.560 | I know a lot of it sounds horrible, but it's the truth that I know a lot of financial planners

00:52:22.880 | that are close to broke.

00:52:26.600 | And people often forget that, I think, when I use the term financial planning, that's

00:52:31.120 | application of skill.

00:52:32.600 | Is an application of financial knowledge and skill to a specific problem.

00:52:36.700 | It doesn't mean that somebody has the same lifestyle goals as their client may have.

00:52:41.640 | It really bothers a lot of people.

00:52:43.960 | And right or wrong, I think if it bothers you, find a different advisor who does have

00:52:48.080 | that.

00:52:49.080 | I mean, this business is very much a business like many other things.

00:52:52.880 | But the point is that when you give me the opportunity of having a variable withdrawal

00:52:59.160 | strategy with a retiree client, where they're willing to adjust their income significantly

00:53:04.200 | based upon market performance, even though I certainly can design a plan that doesn't

00:53:10.000 | take it into account, that margin of safety is an amazing thing.

00:53:14.560 | And it just brings such a buffer to the decision that it relieves the stress on me as a planner.

00:53:21.660 | That's very abnormal, because most of the time, the clients that a planner may be working

00:53:27.440 | with, they're coming to the age of 65 and they've barely got it.

00:53:31.440 | And they're not willing to change their income.

00:53:33.100 | And they're not willing to change their lifestyle one bit, because after all, they've worked

00:53:36.480 | towards this retirement plan and everything is based upon spending a higher level of income

00:53:40.620 | in retirement.

00:53:41.620 | It's a very tough financial planning nut to crack.

00:53:43.680 | And so just the ability to learn to be flexible with expenses and live a great lifestyle on

00:53:48.800 | varying expenses from year to year, your planner will love you if you give that scenario to

00:53:53.840 | them.

00:53:54.840 | I don't think people anticipate that actually is going to happen.

00:53:59.000 | They see that they want to live the same lifestyle in retirement that they had before retirement,

00:54:03.440 | only they just don't want to have to go to work.

00:54:05.560 | And they don't appreciate that there will probably be a big spike in spending during

00:54:08.960 | that first five years of retirement, just as you all run around and enjoy life and travel

00:54:12.940 | and fulfill all the things you swore you were going to do as soon as you could get out of

00:54:16.160 | the office.

00:54:17.360 | But over the 30 or 40 years of a retirement, it turns out that by the time people are in

00:54:23.680 | their 70s or 80s that they've done most of the things they really wanted to do.

00:54:27.280 | Most of the expensive experiences have been experienced and most of the expensive objects

00:54:31.480 | have been purchased and used.

00:54:33.400 | And people start to focus on the things that are very important in their lives and they

00:54:37.160 | don't necessarily cost much money.

00:54:39.760 | And there have been surveys and urban studies, but it's mostly anecdotal data that says as

00:54:45.340 | you get older you tend to spend less money.

00:54:47.600 | And so that's a variable retirement withdrawal system right there.

00:54:51.220 | And nobody has really tried to figure out how to quantify that.

00:54:54.100 | And Bob, with his system, was one of the first to figure out how you can cut back just a

00:54:58.260 | little bit during a recession without having to take a huge whack at your lifestyle.

00:55:02.580 | I like the approach of having some annuitized income that covers your bare bones of your

00:55:07.820 | spending.

00:55:08.820 | Do you have to pay all your non-discretionary expenses?

00:55:11.420 | Do you have enough annuitized income to cover that during a big bear market?

00:55:16.020 | And if you can handle that, then you can handle all the rest of the surprises that come up

00:55:20.620 | in your life.

00:55:21.620 | You can even go out there and spend the money on a fantasy vacation one year and then cut

00:55:25.520 | back another year and make up for it.

00:55:27.380 | So that is very human.

00:55:29.060 | It's the way we all like to spend our money and measure chunks to cover certain activities

00:55:34.640 | or certain events.

00:55:35.640 | And we don't want to have to be a regular rigid computer program.

00:55:39.700 | So if a financial advisor can come up with a couple of rules, like Bob Clyde's system

00:55:44.420 | or some other types of variable withdrawal systems I've seen over the years, all you

00:55:48.780 | got to do is whip out the rule book and see what you can do and figure out how to live

00:55:51.580 | within that.

00:55:52.580 | It's a wonderful way to give yourself the confidence to retire before the traditional

00:55:56.220 | age and not have to worry about money when you are retired.

00:55:59.220 | Yeah, the safe floor, the floor of income is what we call that approach.

00:56:04.940 | That's the one I've always found to be the most intuitive for people.

00:56:07.660 | It really helps people make sense.

00:56:09.900 | I don't remember.

00:56:10.900 | I just went and looked up Clyde's book and I realize I've read it because I recognize

00:56:14.540 | the cover, but I don't remember his system.

00:56:16.340 | What was his system that he laid out in there?

00:56:18.580 | Well it's frequently confused with the Trinity study of the 4% safe withdrawal rate.

00:56:23.340 | And let me briefly mention the Trinity study's system is that you take your 4% when you retire

00:56:29.260 | and then every year you raise that by inflation.

00:56:31.540 | So the Trinity system, you start at a 4% withdrawal rate and every year you boost it by the inflation

00:56:36.200 | rate.

00:56:37.420 | Bob has a different version of that.

00:56:39.420 | Bob starts at 4% every year.

00:56:42.260 | Every year that you're retired, at the beginning of the year, you withdraw 4% of your portfolio.

00:56:46.300 | You don't even think about inflation.

00:56:48.540 | If the stock market was up the last year and your portfolio is up, you start in January,

00:56:53.020 | you withdraw 4% of that portfolio and that's the money you're going to live on that year.

00:56:57.060 | If the stock market's up, that's fine.

00:56:58.940 | You're not going to have much of a problem with that.

00:57:01.260 | When the stock market is down though, Bob gives you a variable system to soften the

00:57:05.660 | blow.

00:57:06.660 | If the stock market loses 20%, the nightmare scenario is that the following year you would

00:57:12.860 | have to cut all of your spending by 20% and people are not willing to do that.

00:57:17.940 | And Bob's computer research was able to prove that you could cut your spending back a little

00:57:21.940 | bit.

00:57:22.940 | So Bob's system says if the stock market's down, instead of taking 4% next year and having

00:57:27.460 | to whack a big spending cut, take 95% of what you took last year.

00:57:32.100 | Just take a little spending cut.

00:57:34.060 | And so instead of having to cut way back because the market was down, you cut back just a little

00:57:39.300 | bit from what you had last year.

00:57:41.180 | And if the market's down the next year, well, you just take 95% of what you'd spent the

00:57:44.900 | year before.

00:57:45.900 | So you're cutting your spending a little bit by a few percentage points until the market

00:57:49.940 | recovers.

00:57:50.940 | And then once the market recovers, you go back on the 4% of withdrawal every year.

00:57:55.900 | And if the market's flat, same rule, 4%.

00:57:58.820 | And what he was able to show was that over the 30-year period and even longer, that that

00:58:03.420 | variable withdrawal rate would get you through the bear market.

00:58:06.540 | The big problem with the Trinity study is that if you got through a severe bear market

00:58:10.860 | in the first five or 10 years after you retired and you were boosting your withdrawals every

00:58:15.900 | year for inflation in the face of that big bear market, you could chew way into your

00:58:20.220 | portfolio during that first five or 10 years and it would never recover.

00:58:24.660 | And one of the more popular threads on Radder's board is the Y2K retiree.

00:58:32.300 | And he's had a thread running.

00:58:33.380 | It's been 14 years.

00:58:34.720 | He's had a thread running there on the Y2K retiree who retired in January of 2000 when

00:58:39.620 | the NASDAQ was approaching its all-time peak.

00:58:43.260 | And this hapless retiree has rigidly followed the Trinity study.

00:58:47.860 | And every year he's taken an inflation adjustment on his 4% safe withdrawal rate.

00:58:53.140 | And by now, because he's been boosting his spending every year for retirement, he's looking

00:58:58.180 | at a withdrawal of about 10% of his portfolio every year just to keep adding the inflation

00:59:03.820 | adjustments onto his original 4% withdrawal rate.

00:59:07.060 | And it's become clear after 14 years there's just no way that his portfolio is going to

00:59:10.420 | recover from the damage that was done by the 2001-2002 bear market.

00:59:14.660 | He just took too much money out during that.

00:59:16.900 | And in the 2008 recession, that's more or less the final sentence on the possibility

00:59:22.240 | of his portfolio ever recovering.

00:59:24.960 | So Bob being able to show that you could vary your spending during a recession was a big

00:59:29.260 | step forward, I think, for people.

00:59:31.020 | And today, you can probably find five or six more systems of variable withdrawal rates

00:59:36.180 | with different rules and different systems and different processes.

00:59:40.580 | And there's even different ways to run a portfolio.

00:59:42.380 | I know people who are going to wait until they can survive on only the interest and

00:59:46.900 | dividends from their portfolio.

00:59:48.180 | They're never going to touch the principal.

00:59:50.180 | They're just going to keep working until they build a portfolio big enough to have the dividends

00:59:53.900 | and the interest that they earned from their investments support their lifestyle.

00:59:57.440 | And they'll live like that.

00:59:59.520 | Makes me wonder with this retiree, makes me wonder if did they set an age, this hapless

01:00:04.840 | Y2K retiree, and could they have adjusted it with him taking Social Security at some

01:00:09.560 | point and gotten that complicated with it?

01:00:12.720 | I think Social Security would eventually save him as his portfolio is running out.

01:00:17.140 | But that's what he'd be living on for the rest of his life is Social Security.

01:00:20.140 | So I don't think that a particular age was chosen for this guy.

01:00:23.560 | It was probably in his 40s or 50s, of course, the typical age group of most early retirees.

01:00:28.920 | But no, they didn't count on him being saved by Social Security.

01:00:32.640 | Poor guy.

01:00:33.640 | Oh, well, we will eulogize him.

01:00:36.760 | We will eulogize him as the perils of sticking to a fixed plan.

01:00:41.360 | Well, that's a neat system.

01:00:43.640 | I'm glad you reminded me.

01:00:44.640 | I need to, one of my reading projects for next year is I'm going to really dig through,

01:00:48.400 | I've read some of the literature, but I'm going to try to develop a comprehensive survey

01:00:53.640 | of all of the studies that have been done on safe withdrawal rates and see if I can

01:00:58.160 | bring that to the show and kind of talk through the developments.

01:01:02.560 | Has the movement grown, the early retirement community?

01:01:06.240 | I guess community is a better word than movement.

01:01:08.000 | Has the community grown?

01:01:10.800 | I think so.

01:01:11.880 | It's grown that there's more people.

01:01:13.120 | I don't know if it's necessarily grown as a part of society.

01:01:16.560 | For example, the number of people who get on the Internet every year goes up by 50 or

01:01:20.720 | 60%.

01:01:21.720 | And so every year there are plenty more people learning about early retirement.

01:01:24.760 | But I couldn't tell you whether 1% of society is interested in early retirement or whether

01:01:29.200 | it's risen to 2% or 4%.

01:01:30.880 | I can't tell you if the worldwide interest in early retirement has gone up over the years

01:01:35.400 | as a percentage of the humans on the face of the earth.

01:01:37.880 | I do know that with all the calculator tools out there that people are beginning to realize

01:01:42.880 | that as they approach an age where they might have enough finances to be able to retire,

01:01:47.520 | they're able to convince themselves that yes, it is feasible, the math does work, and yes,

01:01:51.320 | you can do it.

01:01:52.320 | And you just did not have those tools back in the '70s or '80s unless you happened to

01:01:56.200 | cash out of a large inheritance or a business and know that you could live off those dividends

01:02:01.080 | for the rest of your life.

01:02:02.520 | Today, you can figure out your sources of income.

01:02:05.340 | You can figure out how you want to structure your portfolio.

01:02:08.600 | You can figure out how your assets are going to work together to give you your income for

01:02:11.840 | the rest of your life.

01:02:12.960 | And you can approach that with a high degree of confidence that even if you retire in your

01:02:16.640 | '30s, that you'll still be able to sustain yourself for the rest of your life.

01:02:21.320 | And plan B may be going back to work.

01:02:24.720 | And that may work for the years until you're in your '40s or '50s.

01:02:27.680 | But after that, the idea of going back to work may be less attractive and you may not

01:02:31.720 | have the skills to find a job when you're in your '60s.

01:02:38.000 | You didn't mention in your timeline, you didn't mention Jacob Lund Fisker and you didn't mention

01:02:45.000 | Mr. Money Mustache.

01:02:48.200 | Did they add to the conversation?

01:02:49.800 | Oh, definitely.

01:02:50.800 | And you know, in this timeline we're discussing, we're barely into the late 2007, '08.

01:02:56.600 | So keep going then.

01:02:57.600 | Don't let me interrupt you.

01:02:58.600 | Keep going.

01:02:59.600 | I've got another phone call in 10 minutes, but we can keep going for hours.

01:03:04.320 | The next two big initiatives were of course Jacob Lund Fisker, who I think started his

01:03:09.160 | forum probably in 2010, 2011.

01:03:11.640 | I'm not sure exactly when he really came online.

01:03:14.760 | And probably 2008, 2009 now that I think about it, because in a couple of years he passed

01:03:19.680 | the torch to Mr. Money Mustache.

01:03:21.640 | But Jacob, of course, had learned the extreme frugality approach.

01:03:25.880 | You can either save up more money to support your retirement lifestyle or you can drastically

01:03:29.740 | cut your expenses.

01:03:30.740 | And that was a big step forward.

01:03:33.200 | As Jacob has said, it was never about retiring early.

01:03:35.800 | It was always about a sustainable lifestyle and minimizing your footprint on the earth.

01:03:39.880 | And that's what made it so easy for him to pass the torch to Mr. Money Mustache.

01:03:44.920 | That was early 2011.

01:03:46.800 | And I'd say that everything he's taken from Jacob and developed since then has grown a

01:03:52.440 | huge following of people that are happy to have somebody who supports their frugal and

01:03:57.000 | their green lifestyle aspirations.

01:03:59.640 | And oh, by the way, if you do this for 20 years and do it with more than half of your

01:04:03.000 | pay, you can retire early.

01:04:04.400 | That's just the icing on top of the cupcake there.

01:04:07.200 | Yeah.

01:04:08.200 | So something, there's a skill that Pete, I first, I don't remember, I think I originally

01:04:13.840 | found Your Money or Your Life was my path into knowing about it.

01:04:17.280 | Because for me, I grew up reading personal finance books about, say, 15% and you'd be

01:04:20.960 | rich at 65.

01:04:22.400 | And then I read Your Money or Your Life.

01:04:24.280 | And that totally just surprised me.

01:04:25.760 | And I think that led me to early retirement extreme was kind of my entry into learning

01:04:29.760 | more about it.

01:04:31.360 | But I think that the work that Mr. Money Mustache is doing, though, is although he's not as

01:04:37.940 | accessible as mainstream, he's a lot more accessible than Jacob was.

01:04:43.940 | And his skill with writing, being funny and engaging.

01:04:47.200 | And then the thing that I most appreciate, and sometimes I get concerned he's going to

01:04:51.240 | cross this line, but that Money Mustache is he steers away from a lot of the technical

01:04:57.160 | topics.

01:04:58.160 | So as a financial advisor, I would often struggle to say, "How do I get this concept across

01:05:02.820 | to a client?"

01:05:04.360 | And I would send him a Money Mustache article.

01:05:06.560 | And that Money Mustache article, a lot of times, was funny enough, but straightforward

01:05:10.340 | enough that they would read it and then it would make them think.

01:05:13.200 | And they would say, "Oh."

01:05:14.200 | And they would start reading around.

01:05:15.680 | And because he steered away from the technical topics, he didn't say, I mean, he did a little

01:05:20.400 | bit about indexing.

01:05:22.800 | But he didn't say, "Here's what you've got to do," which is where it becomes difficult

01:05:29.120 | to recommend something to your clients because you have to give it all kinds of caveats.

01:05:32.360 | "Well, this here.

01:05:33.360 | Listen to this and this and this, Mr. Client.

01:05:35.240 | Here, read this book.

01:05:36.240 | But you have to ignore .7, 13, 14, and 67."

01:05:39.640 | And that's really tough.

01:05:40.760 | That was where it came to, I used to give away Dave Ramsey's books.

01:05:43.880 | I would carry them by the box and I'd have to give so many caveats that finally I said,

01:05:47.680 | "They're not going to read the book."

01:05:49.680 | So I was able to send them his blog articles.

01:05:52.160 | And I've sent dozens and dozens and dozens.

01:05:54.960 | And I've had many clients where it's just enough who his writing is the perfect fit

01:05:59.520 | for is kind of high income, middle class income, high lifestyle spending.

01:06:05.920 | And he makes it sound so easy.

01:06:07.760 | Like, "Oh, how crazy for you not to be able to live on $20,000 a year.

01:06:12.760 | What's wrong with you?

01:06:13.760 | You're a weak, flabby guy."

01:06:15.040 | He makes it sound so easy.

01:06:16.680 | And it's so funny, but there's a ring of truth to it.

01:06:18.920 | I had a lot of clients come back and say, "Wow, that really helped me.

01:06:22.600 | Now let's figure out a plan for me."

01:06:24.960 | And so I feel like he's probably done more to advance the cause for the early retirees

01:06:32.000 | than many others because it's so accessible for middle income professionals, which is

01:06:36.440 | in my mind where you have the easiest go of high income, high lifestyle, a couple of optimizations

01:06:42.140 | to the lifestyle, and all of a sudden, high savings.

01:06:44.640 | Well, it's very clear what's valuable to him, what brings value to his life, and it's not

01:06:49.320 | spending money.

01:06:50.320 | And that helps people figure out what brings value to their own lives and how they can

01:06:54.240 | cut their expenses and just spend the money on the things they enjoy.

01:06:59.760 | This has been a great podcast conversation.

01:07:02.000 | We should continue it.

01:07:03.000 | Yeah, this has been fun.

01:07:04.000 | I was just going to...

01:07:05.880 | Last question and we're done because you got to get the other phone call.

01:07:09.800 | What do you actually do all day?

01:07:10.800 | Yeah, what do I do all day?

01:07:11.800 | I start the morning, literally every morning, I check the surf forecast to see what I'm

01:07:16.960 | going to be doing that day because if the surf is up, I'm going to rearrange my priorities

01:07:20.520 | and go find some.

01:07:22.380 | But otherwise, I get up in the morning and I write, I work on an article or a book or

01:07:26.800 | a chapter or a post for the blog and I'll work on that for 20, 30 minutes or so.

01:07:31.800 | And then the rest of the day is free and I'll usually do some chores in the morning.

01:07:34.880 | We've got home improvement or yard work to do around the house and I enjoy a lot of the

01:07:38.800 | reading I do on the internet.

01:07:39.800 | I probably keep up with 50 or 60 blogs through an RSS feed and I enjoy catching up on that.

01:07:45.240 | I enjoy reading in general.

01:07:46.760 | It doesn't have to be personal finance.

01:07:48.360 | I'll read for a couple hours every day.

01:07:50.200 | And my spouse and I spend time together, go for walks, exercise, just everything else

01:07:54.800 | that everybody else does except I get to do it every day, all day.

01:07:59.320 | And if I need to go surfing, I can change the schedule and do what I need to do and

01:08:02.680 | catch up later.

01:08:03.680 | Doug, thanks for coming on the show.

01:08:05.960 | I really enjoyed having you.

01:08:07.200 | Thanks, Joshua.

01:08:08.200 | This has been great.

01:08:09.200 | Pretty cool, eh?

01:08:10.200 | Doug, thanks so much for coming on and for sharing some of the history.

01:08:16.160 | I love learning about it and there's more history there than I ever knew about.

01:08:22.520 | And what a cool way to build a life.

01:08:25.320 | One of my dreams is that from a young age, we can help more and more people be financially

01:08:30.480 | independent from an early age.

01:08:32.360 | Now whether or not financial independence is measured from the perspective of never

01:08:38.080 | having to work again, I think that's awesome and that's a really great definition.

01:08:42.720 | But even just the attitude of being financially independent and a little bit of money piled

01:08:45.800 | up can really make a big difference in people's career choices and to help people make a transition

01:08:50.320 | and stop doing mind-numbing work and be able to pursue the things that are of great interest

01:08:58.320 | to them.

01:08:59.320 | So, very cool.

01:09:00.320 | Doug, thanks so much for coming on.

01:09:01.320 | I hope you enjoyed this show.

01:09:02.320 | If this was your first time listening to the show, we'd be thrilled.

01:09:06.120 | We're here every day, Monday through Friday, with in-depth, hardcore financial planning

01:09:09.760 | talk, lots of great interviews like this, a wide range of subjects.

01:09:16.920 | So make sure you come by and subscribe.

01:09:18.400 | You can subscribe on iTunes or on Stitcher.

01:09:20.720 | Hopefully within a couple of weeks, I'm working on an app which will work on every device

01:09:24.640 | and you'll be able to subscribe directly on the application and bypass some of the problems

01:09:28.040 | that some of the external applications have.

01:09:30.840 | If you would like to connect with me, joshua@radicalpersonalfinance.com is my email address.

01:09:35.480 | You can find me on Twitter @radicalpf, Facebook.com/radicalpersonalfinance.

01:09:39.040 | Let's read another review on our way out, a short iTunes review.

01:09:45.440 | This one comes in from Cal Maniac.

01:09:48.160 | Cal says, "All steak, no sizzle.

01:09:51.600 | Joshua is genuine, intelligent, and an excellent communicator.

01:09:54.360 | His insights and perspectives are truly outstanding.

01:09:56.680 | He is data-driven, skeptical, and thinking about the big picture, yet very much down

01:10:00.720 | to earth.

01:10:01.720 | No gimmicks or other typical flashy financial BS.

01:10:04.400 | In one word, this podcast is brilliant."

01:10:06.200 | Cal, thank you so much.

01:10:08.520 | Thank you.

01:10:09.520 | That means the world to me.

01:10:10.520 | I really appreciate it.

01:10:11.520 | Thank you to each one of you who has left me a review on iTunes or on Stitcher.

01:10:15.120 | I appreciate each and every one of those.

01:10:16.560 | They help the show rankings from time to time for help to other people find us as we go

01:10:21.680 | on.

01:10:22.680 | If you've enjoyed this show, I'd be thrilled if you would consider joining the Irregulars.

01:10:25.640 | That's the membership support program which is how I've designed to support this show.

01:10:31.760 | Details can be found at RadicalPersonalFinance.com/membership.

01:10:35.960 | Have a great day, everybody.

01:10:59.960 | Thank you for listening to today's show.

01:11:23.520 | This show is intended to provide entertainment, education, and financial enlightenment.

01:11:31.520 | Your situation is unique and I cannot deliver any actionable advice without knowing anything

01:11:37.800 | about you.

01:11:39.520 | This show is not, and is not intended to be any form of financial advice.

01:11:46.880 | Please, develop a team of professional advisors who you find to be caring, competent, and

01:11:55.240 | trustworthy and consult them because they are the ones who can understand your specific

01:12:01.280 | needs, your specific goals, and provide specific answers to your questions.

01:12:08.280 | Hold them accountable for your results.

01:12:11.000 | I've done my absolute best to be clear and accurate in today's show, but I'm one person

01:12:16.000 | and I make mistakes.

01:12:17.560 | If you spot a mistake in something I've said, please come by the show page and comment so

01:12:22.160 | we can all learn together.

01:12:24.360 | Until tomorrow, thanks for being here.