Bogleheads® on Investing Podcast 014 – Chris Mamula, host Rick Ferri (audio only)

00:00:00.000 | [MUSIC PLAYING]

00:00:03.480 | Welcome to Bogleheads on Investing, podcast number 14.

00:00:15.280 | Today, we have a special guest, Chris Mamula,

00:00:19.960 | author of the new book, Choose FI, Your Blueprint

00:00:25.240 | to Financial Independence.

00:00:27.360 | [MUSIC PLAYING]

00:00:30.760 | My name is Rick Ferry, and I'm the host

00:00:41.000 | of Bogleheads on Investing.

00:00:43.640 | This podcast, as with all podcasts,

00:00:46.360 | are brought to you by the John C. Bogle Center

00:00:48.760 | for Financial Literacy, a 501(c)(3) corporation.

00:00:53.280 | Today, I'm pleased to have Chris Mamula,

00:00:56.960 | one of the authors of a new book called

00:00:59.160 | Choose FI, Your Blueprint to Financial Independence.

00:01:03.800 | The other co-authors of the book were Brad Barrett and Jonathan

00:01:07.560 | Mendoza.

00:01:08.960 | These young men have written a truly fantastic book

00:01:13.240 | for not only young people, all of us should learn from them.

00:01:18.280 | I am very pleased to have with us today

00:01:20.280 | one of the co-authors of Choose FI, Your Blueprint

00:01:23.840 | to Financial Independence, Chris Mamula.

00:01:27.120 | Welcome, Chris.

00:01:28.880 | Thanks for having me.

00:01:29.760 | And it's an honor for me to be here with so many people who

00:01:32.520 | I read and follow, who I've seen have been your prior guests,

00:01:35.840 | and not to mention Mr. Bogle himself.

00:01:37.480 | So it's quite an honor.

00:01:39.120 | Well, you have quite a story yourself.

00:01:40.680 | And I want to start out by you talking about your background

00:01:44.600 | and how you got to writing this book and also your blog,

00:01:48.840 | Can I Retire Yet?

00:01:50.600 | and all the great work that you've

00:01:52.480 | put into the FI community.

00:01:54.080 | So why don't you start out telling us a little bit

00:01:56.120 | about yourself.

00:01:57.880 | Sure, so I graduated with a Master of Physical Therapy

00:02:00.880 | in 2001.

00:02:02.560 | And so I had 20 years of formal education

00:02:05.240 | from kindergarten through grade 12

00:02:07.180 | and my bachelor's and my master's.

00:02:08.560 | But in that time, I never had any financial education.

00:02:11.860 | So like most people, we spend all this time

00:02:14.080 | learning to gain the skills to earn money.

00:02:16.600 | But nobody really ever teaches you what to do with it.

00:02:19.200 | So I was pretty fortunate in that my parents instilled in me

00:02:22.600 | just a kind of a disdain for debt, I guess you would say.

00:02:25.800 | And so from day one, I was a great saver.

00:02:28.560 | My wife had a similar upbringing to me

00:02:31.280 | in that she wasn't raised with a lot of money,

00:02:33.760 | but she didn't have that foundation.

00:02:35.280 | So she had some debt.

00:02:36.960 | And going into our marriage, we didn't

00:02:38.720 | want to get married with debt.

00:02:40.120 | And that's something we talked about together.

00:02:42.440 | What we agreed to do was just live off of her salary

00:02:45.120 | and use everything I made to get us out of debt

00:02:47.720 | before we got married.

00:02:49.080 | And that was working really well.

00:02:50.500 | So it's something we just kind of stuck with.

00:02:52.520 | And so we always lived off her salary and saved mine.

00:02:55.600 | And our careers kind of grew in parallel.

00:02:57.760 | So we basically had a 50% savings rate our whole lives.

00:03:01.040 | But we really didn't have a plan because we

00:03:02.840 | didn't know what we were doing.

00:03:04.400 | And so I kind of always bought into this idea

00:03:06.900 | that investing is complicated.

00:03:08.760 | So we invested with an advisor, and we really

00:03:11.160 | did no due diligence.

00:03:12.720 | And I kind of bought into this idea that retirement is at 65,

00:03:16.240 | and maybe early retirement was 55 or 60

00:03:19.160 | if you're really lucky and you do everything right.

00:03:21.400 | And so again, we had no plan for that.

00:03:23.040 | So we just kind of fumbled through life

00:03:24.840 | until around 2012, about 10 years after getting started.

00:03:29.800 | We didn't think we could have kids.

00:03:31.540 | My wife found out she was pregnant.

00:03:33.000 | And so I realized I had to get serious about finance.

00:03:35.640 | And that's when I kind of stumbled

00:03:37.980 | into the early retirement, the fire blogs,

00:03:40.360 | the financial independence, retire early.

00:03:42.480 | And they really changed my life.

00:03:44.160 | So that's kind of what motivated me to start

00:03:46.520 | writing about the topic.

00:03:48.520 | Chris, I want to get into the FIRE movement, F-I-R-E.

00:03:52.760 | What does it stand for?

00:03:53.960 | When did it start?

00:03:55.840 | What's the motivation behind financial independence,

00:04:00.760 | retire early?

00:04:01.720 | And what are the different splinter movements from that?

00:04:06.440 | Can you describe the whole culture of FIRE for us?

00:04:09.880 | Yeah, sure.

00:04:10.560 | So let's just start with the definition.

00:04:12.640 | So FIRE is Financially Independent, Retire Early.

00:04:15.560 | It's kind of a catchy, cute acronym.

00:04:17.560 | But in a lot of ways, I think it turns people off,

00:04:19.680 | because people get hung up on the whole retire early,

00:04:22.080 | and people have perceptions of what retirement means.

00:04:25.520 | And so in some ways, we're trying to move away from that.

00:04:28.320 | We really focus on financial independence

00:04:31.080 | and really don't focus too much on the retire early.

00:04:34.480 | I think what it's all about is just really lining up

00:04:37.160 | your values with your spending.

00:04:38.840 | So typical advice is you save 10% or 15% of your income,

00:04:42.480 | and that puts you on a path where you're going to retire

00:04:44.760 | in your 60s or 70s.

00:04:46.520 | And basically, we just kind of flipped that on its head

00:04:48.760 | and said, if you can save far more than that,

00:04:51.480 | you can free yourself up and become

00:04:53.000 | financially independent much earlier in life.

00:04:55.120 | And then if you choose to retire, you certainly can.

00:04:57.240 | But most people that I've come across in this movement

00:05:00.520 | choose to go on and do just bigger and better things,

00:05:03.120 | and things that more line up with what

00:05:04.760 | they want to do versus what they have to do to earn an income.

00:05:08.000 | And as far as the origin, I guess

00:05:10.200 | I probably have to credit Vicki Robin, whose

00:05:12.440 | book Your Money or Your Life was published in the early '90s.

00:05:15.320 | And it was very popular at the time,

00:05:17.000 | but kind of like most books, it kind of fell off.

00:05:20.200 | Even she didn't know that a lot of the early FIRE bloggers

00:05:22.700 | kind of picked up on her ideas and turned it

00:05:25.400 | into this FIRE movement.

00:05:27.040 | And the early influences were kind of all looking the same,

00:05:30.760 | like white males, engineering, really focused on maybe

00:05:34.000 | spreadsheets and optimization and frugality.

00:05:37.040 | And so when I got into writing in 2013--

00:05:39.960 | and honestly, I kind of fit a lot of these stereotypes

00:05:42.200 | because I'm a white guy, and I was part of a higher-earning

00:05:45.600 | professionals, and we had no kids.

00:05:47.600 | And then, like I said, I got serious once we had one child.

00:05:50.360 | But I was in the health care industry,

00:05:52.320 | and I don't know anything about spreadsheets.

00:05:54.200 | I didn't know anything about finance.

00:05:55.720 | And so I was kind of--

00:05:56.760 | at the time, I think I was diversity.

00:05:58.960 | But I think a lot of that initial perception

00:06:02.520 | is kind of what people still think,

00:06:04.000 | and it's like this monolithic thing.

00:06:06.760 | When really, there are so many different stories now.

00:06:08.920 | And I think this FIRE message is really

00:06:11.120 | attractive for parents looking to create space in their lives

00:06:13.960 | to spend time with kids, maybe older adults who are way

00:06:16.840 | behind on retirement savings.

00:06:18.520 | And this lets them supercharge that.

00:06:20.360 | Or just people burnt out on careers who want

00:06:22.200 | to do something different, and it gives them

00:06:24.920 | some leeway and some courage to do something

00:06:26.980 | different with their life.

00:06:28.060 | So it's definitely a much more diverse community

00:06:30.400 | than I think people perceive it to be.

00:06:32.800 | And you started a blog about this.

00:06:34.220 | Can I retire yet?

00:06:36.940 | So actually-- so I started writing back in probably 2013,

00:06:40.700 | and I wrote a little blog called Eat the Financial Elephant.

00:06:43.580 | And it's based on that riddle, how do you eat an elephant?

00:06:47.140 | And you do it one bite at a time.

00:06:48.480 | And it's because I felt so overwhelmed by finance.

00:06:51.300 | And it was really-- a lot of it was to hold myself accountable.

00:06:53.900 | And I built a little audience, but nothing--

00:06:55.700 | I wasn't having any kind of impact.

00:06:57.540 | So as I was leaving my career in 2017,

00:07:00.740 | this movement, this idea changed my life.

00:07:02.700 | And I wanted to reach more people.

00:07:04.220 | And I wanted to maybe change some

00:07:05.980 | of those perceptions of what fire looks like to people.

00:07:09.460 | But I didn't have a platform to do it from.

00:07:11.220 | And my idea was to start a podcast

00:07:13.420 | and talk to different people who influenced me.

00:07:15.980 | And then-- so Brad Barrett and Jonathan Mendonca,

00:07:18.960 | they started the Choose FI podcast a few months ahead

00:07:21.620 | of that.

00:07:22.340 | And so I reached out to them probably in April of 2017.

00:07:25.100 | And we agreed to partner on the book.

00:07:27.260 | And then in August of that year, there was--

00:07:30.140 | the Can I Retire Yet blog was started

00:07:31.680 | by a gentleman named Darrow Kirkpatrick.

00:07:33.780 | And he had built a nice following.

00:07:35.220 | And I loved that blog.

00:07:37.000 | But I kind of sensed he was burning out.

00:07:38.620 | He was a one-man show doing it.

00:07:40.060 | And so I reached out to him and said,

00:07:41.860 | would you be open to a partner?

00:07:43.500 | And he was receptive.

00:07:44.420 | So I kind of-- before I actually, quote unquote,

00:07:46.700 | "retired" from my physical therapy job,

00:07:48.300 | I had my next two projects lined up.

00:07:50.060 | And so I've been writing with Darrow at the blog

00:07:52.540 | since, I guess, December of--

00:07:54.260 | or since January of 2018.

00:07:56.700 | You feature other bloggers and other podcasters

00:08:00.900 | all the way through the book, which is extremely well-written,

00:08:03.280 | by the way.

00:08:03.620 | You're a great writer.

00:08:04.540 | This is a very, very well-written book.

00:08:07.340 | I read it cover to cover, very easy to understand,

00:08:11.780 | very easy to follow, a lot of great information in there.

00:08:15.400 | But one of the things you did throughout the book

00:08:17.360 | was you were referencing all these other blogs

00:08:19.580 | and all these other bloggers and all the different points

00:08:21.940 | that they were talking about.

00:08:24.340 | And you have a whole list of bloggers and podcasts

00:08:27.900 | and so forth in the book, which is really

00:08:29.820 | a wonderful reference.

00:08:31.260 | But in your site, you started writing about this

00:08:33.960 | and you started focusing on this culture.

00:08:37.300 | And I really want to talk about the culture of Fi

00:08:41.140 | because it's very similar to a Bogleheads culture.

00:08:44.060 | The Bogleheads started maybe 20 years ago,

00:08:46.460 | first on the Morningstar forum, and then we went out on our own

00:08:48.980 | and had our own bogleheads.org website.

00:08:53.380 | But it is a culture and it is a community.

00:08:56.860 | The Fi community is very similar,

00:09:00.060 | and the goals of both communities are very similar.

00:09:03.660 | There might be a little bit of a generation gap.

00:09:06.220 | So could you talk about the Fi community and the culture?

00:09:09.860 | Yeah, sure.

00:09:10.420 | And first off, thanks for the kind words about the book.

00:09:13.100 | I really appreciate that, especially coming from you.

00:09:15.340 | But I was just in Detroit promoting the book,

00:09:18.420 | and I was staying with a guy named Joe Saucihai.

00:09:21.540 | And he has a pretty popular podcast

00:09:23.900 | called Stacking Benjamins.

00:09:24.980 | And it's kind of comedy mixed with personal finance.

00:09:28.260 | And he and I had a really great conversation.

00:09:30.940 | And he kind of pointed out to me that there's 300 million people

00:09:35.140 | in the United States.

00:09:36.580 | And so even if you have 3 million people

00:09:39.320 | that you're reaching, which even the Bogleheads or even

00:09:41.940 | maybe Dave Ramsey and Sue Zorman,

00:09:44.100 | when you get to that level, nobody's

00:09:46.540 | really reaching that percent of that number of people.

00:09:49.500 | And if you are, that's 1% of the population.

00:09:52.140 | So overall, as personal finance, I

00:09:54.860 | think we're failing to get out and reach people.

00:09:57.540 | And so there's a lot of snipping back and forth

00:09:59.740 | between these, like maybe the Boglehead community and the Fi

00:10:02.380 | community and the Dave Ramsey community.

00:10:04.380 | And really, we need to be building upon one another

00:10:06.640 | and pointing out what each other is doing well

00:10:08.780 | so we can reach a bigger audience.

00:10:10.620 | And with Choose Fi, that's what they did is they kind of--

00:10:13.900 | I think a lot of personal finance is guru-driven.

00:10:16.300 | And what they kind of do is they highlight people

00:10:18.660 | who just have compelling stories.

00:10:20.580 | And in each episode, they really focus

00:10:22.460 | on what are the actionable steps people can take.

00:10:25.100 | And we tried to build on that in the book and say,

00:10:27.860 | how can we take the key lessons, and then we kind of just

00:10:30.300 | put it in a more organized fashion

00:10:31.700 | than you really are able to on a podcast.

00:10:33.820 | And kind of building up everyone and choosing

00:10:35.900 | the best of what everybody is doing versus kind of snipping

00:10:39.140 | and trying to kind of protect your little piece of the pie.

00:10:41.980 | We really want to grow the pie and reach a much bigger

00:10:44.180 | audience.

00:10:45.140 | And so I think where, like you said,

00:10:46.780 | there's just so much overlap between the Fi community

00:10:49.220 | and the Bogleheads messaging.

00:10:50.980 | And so I think if we could kind of work together and reach

00:10:53.580 | a bigger audience, it's way more productive,

00:10:55.780 | and we're going to be able to help a lot more people.

00:10:57.500 | And that's kind of where we're trying

00:10:58.700 | to take things right now with the culture and the community.

00:11:01.460 | Well, that's great.

00:11:02.260 | Because for us at the Bogleheads,

00:11:05.500 | we are always trying to figure out how we can reach more

00:11:09.340 | people.

00:11:10.380 | And our push is to try to reach out

00:11:13.100 | to other communities like yours and work together with you

00:11:17.940 | to better educate more people.

00:11:19.460 | Because that's really the goal of everyone.

00:11:22.220 | This is so important for society and so important

00:11:25.060 | for our fellow citizens and make them better investors.

00:11:29.540 | And get them away from the hawks on Wall Street.

00:11:31.860 | I mean, you talk about that in your book.

00:11:33.580 | And I think you did a great job, by the way,

00:11:35.540 | talking about your story of 10 years

00:11:38.260 | with the financial advisor before you finally

00:11:40.660 | realized what was going on.

00:11:41.900 | I mean, that happens everywhere.

00:11:43.420 | And it's a majority of the population are trapped in that.

00:11:46.340 | And I think that by working together,

00:11:48.620 | these different groups working together,

00:11:50.220 | will help just make the message more powerful and louder.

00:11:54.500 | Because we don't have a lot of money,

00:11:56.100 | and you don't have a lot of money.

00:11:57.900 | And so we're fighting against a trillion-dollar industry that

00:12:01.460 | has, it seems like, unlimited wealth.

00:12:04.340 | Yeah, and I can't agree with that more.

00:12:05.980 | And like I said, if you kind of look at the things

00:12:08.980 | that we kind of argue about in the personal finance

00:12:11.180 | community compared to where people are,

00:12:12.980 | just as we record this, last week

00:12:15.620 | there was an article in The Wall Street Journal

00:12:17.620 | about how so many people were going to now seven-year car

00:12:20.260 | loans from five-year car loans.

00:12:21.580 | And the average savings rate-- I mean,

00:12:23.220 | I know this is something we cited in the book.

00:12:25.140 | It's like 5% across the population.

00:12:26.740 | So like I said, yes, I mean, there are little things.

00:12:29.420 | Each of us could do better, and we can help each other improve

00:12:31.960 | our messages, absolutely.

00:12:33.100 | But I mean, overall, I think when

00:12:34.780 | we could be really helping people who are just missing

00:12:37.460 | and not getting the big picture.

00:12:39.220 | We're not competing against each other.

00:12:40.860 | We're competing against the Kardashians, and the NFL,

00:12:43.700 | and the things that people like build their life around

00:12:46.180 | while they have no idea what an expense ratio is

00:12:48.220 | or anything like that.

00:12:49.620 | We're going to go through the book now

00:12:51.200 | and what you've done, how you've organized it.

00:12:54.200 | I think the very first thing that struck me

00:12:55.900 | as I was reading one of the earlier chapters

00:12:58.420 | was the stages of financial independence.

00:13:02.260 | And I've never seen this before, what the stages are.

00:13:04.980 | And you list them out from one through seven.

00:13:08.820 | And I'd like you to quickly go through the stages,

00:13:10.900 | because I think they were really well done.

00:13:13.940 | And I appreciate that.

00:13:15.100 | And again, like you said, you complimented my writing.

00:13:18.180 | And I wish I could take credit for these ideas.

00:13:20.140 | But again, what we did is we built on all these ideas.

00:13:22.540 | So this was a blogger who was on the podcast,

00:13:24.900 | and he talked about this.

00:13:26.300 | And I think traditional finance, it

00:13:28.140 | focuses so much on retirement and retirements,

00:13:30.660 | like the end goal.

00:13:31.980 | And what we really wanted to do is reshape the conversation.

00:13:35.140 | And so we started with just really once you get to zero,

00:13:37.780 | if you're out of debt, and really, you

00:13:39.540 | can define it in a number of ways.

00:13:41.660 | But most people, they're kind of trapped

00:13:43.460 | because their mortgage payment, their car loan payments,

00:13:45.800 | maybe they still have student loans, credit card loans.

00:13:48.100 | And so their next paycheck is already

00:13:49.860 | spent before it ever comes.

00:13:51.540 | So just getting to zero, however you want to define that,

00:13:54.900 | is so powerful, because it starts to let you

00:13:57.340 | start choosing going forward.

00:13:59.700 | And then as you start to build on that,

00:14:02.540 | just having a fully funded emergency fund,

00:14:05.420 | that's a hallmark of personal finance.

00:14:08.580 | And that's really like a Dave Ramsey concept

00:14:10.660 | I've seen a lot, where you have six months of your expenses

00:14:13.940 | saved.

00:14:14.780 | And I think that's great advice, but if you

00:14:16.980 | look at traditional advice, they say

00:14:19.460 | you save 10% of your income, say.

00:14:21.340 | So if you're doing that, after a year,

00:14:23.860 | you're going to have basically a month of savings.

00:14:26.180 | And it's going to take you about five years just

00:14:28.180 | to get that six months of savings built up.

00:14:30.240 | And it's no wonder people fall off, because it's so slow,

00:14:33.180 | and you don't see any momentum.

00:14:35.140 | So what we do is we say, if you can build a higher savings

00:14:37.540 | rate, and we just hypothetically throw out the number 50%

00:14:40.140 | savings rate, for one thing, that's

00:14:42.220 | going to lower the bar of how much it takes

00:14:45.160 | to save to get six months of savings

00:14:46.860 | by being a little bit more frugal

00:14:48.300 | and watching your spending.

00:14:49.740 | And also, that frees up the money to save.

00:14:51.820 | And if you can save 50%, now you can

00:14:53.460 | have a six-month emergency fund in only six months,

00:14:55.980 | instead of five or six years.

00:14:57.500 | And so it's a total game changer,

00:14:58.860 | and it lets people to start have freedom and peace of mind.

00:15:01.420 | And we just kind of build up through the phases

00:15:04.060 | till you get to ultimately full financial independence,

00:15:06.700 | and then even financial independence with cushion

00:15:08.740 | is our last level, where you're having greater than 30 times

00:15:12.420 | your annual expenses.

00:15:13.940 | And you can pretty safely retire at that point

00:15:16.980 | and even be comfortable to maybe grow your spending,

00:15:19.180 | depending on how the market does.

00:15:20.560 | So really trying to reframe that conversation

00:15:22.940 | from an all or nothing to a conversation

00:15:25.140 | where your power is growing and building throughout the phases.

00:15:29.220 | In the next chapter, you get right into the whole thing

00:15:32.860 | isn't really about money.

00:15:35.220 | It's about having the right way.

00:15:38.340 | The money is just a facilitator of that.

00:15:41.980 | So the money is just a tool.

00:15:44.300 | What you're really going for before you even go for the money

00:15:47.420 | is a philosophy.

00:15:48.420 | And you talk a lot about philosophy.

00:15:50.700 | Yeah, so kind of the framework I wrote the whole book with

00:15:54.220 | is that you have to learn the rules.

00:15:55.980 | And you mentioned briefly my bad experience

00:15:58.340 | with the financial industry.

00:15:59.460 | But I think a lot of people, they go in

00:16:01.740 | and they know the rules.

00:16:02.760 | They know that you get a college degree

00:16:05.700 | so you can get a good job.

00:16:06.940 | And then once that starts, the first things you do

00:16:08.940 | is you buy a house.

00:16:09.820 | And you determine how big of a house

00:16:13.020 | or how much you spend based on your income.

00:16:14.820 | And you can spend x percent.

00:16:16.660 | And you buy two cars.

00:16:17.620 | And everybody knows you buy them with loans.

00:16:20.940 | And this kind of goes on and on.

00:16:22.300 | You save 10% so you can retire at 65.

00:16:24.900 | And none of these things are rules.

00:16:26.500 | So kind of where we start is you have to unlearn the rules

00:16:29.780 | and just kind of get over all these things

00:16:31.580 | that people just blindly accept.

00:16:33.220 | And really, a lot of this is just about

00:16:35.180 | asking better questions so you can get better answers.

00:16:38.300 | And then once you unlearn the rules,

00:16:39.980 | then we kind of get into the rules of

00:16:41.620 | what is the math behind saving?

00:16:43.540 | What are the rules you have to know to invest wisely?

00:16:47.220 | What are the rules to grow your income?

00:16:48.540 | And all these little levers you can pull.

00:16:49.820 | But I really think unless you unlearn the rules first

00:16:52.420 | and break down those things that people quote unquote know,

00:16:55.220 | you're gonna really have a hard time.

00:16:56.960 | - As we move along in the book,

00:16:57.940 | you have a section called Becoming a Lifelong Learner.

00:17:00.980 | And I looked at that and I said that is perfect

00:17:03.020 | because I happen to be writing a book right now.

00:17:05.360 | And I will give you the name and selfishly promote it,

00:17:07.900 | but it's not gonna be out for a little while.

00:17:10.140 | It's called A Few Good Funds,

00:17:12.380 | The Genius of Simple Investing.

00:17:14.900 | And the last chapter is all about lifelong learning.

00:17:18.420 | So as I'm reading your book,

00:17:19.900 | it says become a lifelong learner

00:17:21.340 | because it is so important that once you have the concept,

00:17:24.100 | once you have the philosophy, once you get it,

00:17:27.340 | once you set yourself up,

00:17:29.460 | it can easily be forgotten and go by the wayside.

00:17:33.020 | And the second thing is,

00:17:34.260 | one thing that really not only helps you,

00:17:36.060 | but helps a lot of other people,

00:17:37.700 | is not only your lifelong learning,

00:17:39.980 | and you get to this in the book very quickly,

00:17:41.720 | is once you learn it, teach other people.

00:17:45.060 | And teaching other people helps you stay the course.

00:17:48.260 | I thought that was fascinating.

00:17:50.220 | And I was actually including the exact same things.

00:17:52.620 | I was reading your book.

00:17:53.700 | I just saw so many things

00:17:55.540 | that you just did such a great job bringing out.

00:17:58.300 | - Yeah, thank you.

00:17:59.140 | And yeah, and it's kind of funny,

00:18:00.940 | like when I talk about my background,

00:18:03.620 | that five years ago, six years ago, I had no clue.

00:18:07.580 | I didn't know what an index fund was.

00:18:09.260 | I wasn't utilizing my 401(k)

00:18:11.380 | 'cause my advisor said that he had better investments for me

00:18:15.020 | and I totally bought hook, line, and sinker.

00:18:17.020 | I mean, I was completely clueless.

00:18:18.780 | And now I'm writing this book,

00:18:19.960 | which is hopefully gonna have a pretty large impact

00:18:22.620 | and be read by a lot of people.

00:18:24.580 | And it's just that matter of,

00:18:26.500 | I realized, okay, I'm making a lot of mistakes

00:18:28.500 | and it's easy to wallow in that

00:18:30.100 | and feel bad for yourself or get angry.

00:18:32.300 | But what I did is said, okay, I need to correct course

00:18:34.680 | and I need to keep learning

00:18:36.020 | and then learning at a deeper level.

00:18:37.420 | And then as I was doing this

00:18:38.580 | and seeing the impact it had on my life,

00:18:40.460 | yeah, I almost felt an obligation

00:18:41.900 | to share it with other people

00:18:43.780 | so they could do the same thing.

00:18:45.640 | And in some ways, I think you get imposter syndrome

00:18:49.300 | that who am I to be qualified to write a book

00:18:51.980 | about personal finance and investing?

00:18:53.940 | And on the same token, I think I'm the perfect person

00:18:55.820 | 'cause I know exactly how all those people

00:18:57.960 | that really need to get this message are thinking

00:18:59.580 | 'cause I was stuck in that pattern for, like I said,

00:19:01.900 | 10 years before I finally started questioning things

00:19:04.500 | and figuring it out.

00:19:05.340 | So, yeah, I mean, I think that's super important.

00:19:07.820 | - Yeah, what we find is right is in many of this stuff

00:19:12.300 | about personal finance and investing and taxation,

00:19:15.940 | all of this is routine.

00:19:18.100 | I mean, these are the rules and all you're doing

00:19:21.100 | is figuring out how to put it all together,

00:19:23.060 | how to link it all together, and then writing about it.

00:19:25.860 | I mean, we're not creating any kind of a new way

00:19:30.780 | to invest in real estate,

00:19:32.140 | and we're not creating any new way to invest in index funds.

00:19:34.940 | I mean, it's all out there.

00:19:36.260 | We're not trying to recreate the tax code in any way.

00:19:39.380 | It's all out there.

00:19:40.740 | It's just a matter of putting it all together

00:19:43.580 | and showing how it all works together

00:19:46.860 | and explaining it to people in a way

00:19:49.460 | where it makes it easy to understand.

00:19:52.340 | And so me, I don't take any credit for anything I've done

00:19:56.300 | as far as index funds and talking about ETFs

00:20:00.380 | and asset allocation and all that,

00:20:01.740 | because it's all out there.

00:20:03.300 | It's just a way in which you explain it

00:20:05.300 | and being able to explain it to people

00:20:07.100 | so that they understand it.

00:20:08.620 | So in a way, teaching people how to do it.

00:20:12.580 | And I think that's really where you have a real knack

00:20:14.980 | and a real skill to be able to do that

00:20:16.300 | because your book is so good at teaching people.

00:20:19.100 | - And again, I appreciate that.

00:20:21.380 | And a lot of that is just, again,

00:20:23.180 | because it's not really me.

00:20:24.860 | I mean, yes, I'm the one writing it

00:20:26.180 | and putting it together and organizing it,

00:20:27.700 | but we've taken a lot of people who were super generous

00:20:31.820 | with sharing their stories on the podcast with those guys.

00:20:34.340 | And then they were generous with allowing me to take that

00:20:37.220 | and kind of put it together.

00:20:38.820 | And then we kind of repackaged it in a way

00:20:40.780 | that just makes it consumer friendly.

00:20:43.220 | And particularly to people who aren't maybe inclined

00:20:46.620 | to be in the Bogleheads community

00:20:48.060 | or to be inclined to be saving large percentage

00:20:50.620 | and be in the FI community

00:20:51.860 | and just take it to ordinary people

00:20:53.300 | who most need this message and really make it accessible.

00:20:55.620 | And that was what we wanted to do with this book

00:20:57.620 | and not be judgmental and not be dogmatic,

00:21:00.380 | but just saying, look, here's the different options

00:21:02.220 | that you have.

00:21:03.060 | Here are people with really inspiring stories

00:21:05.140 | that probably somebody in there

00:21:06.500 | is gonna look a lot like you.

00:21:07.980 | And you can kind of take their story

00:21:09.820 | and take the things that you like from it

00:21:11.140 | and then take from other stories

00:21:12.220 | and put together your own path

00:21:14.020 | to achieve financial independence.

00:21:16.140 | - Yeah, you wrote in here that you do not have to adopt

00:21:19.060 | anyone else's definition of success or failure,

00:21:22.060 | but to gain traction on the path to FI,

00:21:25.140 | you do have to determine what you value

00:21:28.220 | and then start spending your time and money accordingly.

00:21:31.060 | So as you figure out what's important to you,

00:21:33.420 | and then you start on that path.

00:21:35.020 | - Yeah, and there's a term,

00:21:37.940 | and I'm not sure quite where that came from,

00:21:39.540 | so I'm hoping we didn't steal this from somebody,

00:21:40.980 | but we call it a valuist.

00:21:42.660 | And instead of saying like you have to be frugal

00:21:44.780 | or you have to be a minimalist,

00:21:46.660 | you don't have to be anything,

00:21:47.540 | but you do have to figure out what you value

00:21:49.980 | and then does your spending reflect that?

00:21:52.100 | And for a lot of people, I think,

00:21:53.380 | if you were being very honest and looked at it,

00:21:55.340 | a lot of people would say no.

00:21:56.820 | And if you think that you have to suffer and sacrifice,

00:22:01.020 | frankly, none of us, including me,

00:22:02.580 | are going to be able to save 50% by scrimping and saving.

00:22:06.820 | You do it by cutting out the things

00:22:08.380 | that you don't value anyway

00:22:09.620 | and you spend the money where you do value.

00:22:12.540 | But a lot of those things that, again,

00:22:13.780 | people just do reflexively,

00:22:14.980 | like buying the biggest house they could afford

00:22:16.700 | or the most car they can afford.

00:22:18.220 | I mean, if that's truly what you value,

00:22:19.740 | then by all means, do it.

00:22:21.180 | But I question how many people are happier

00:22:23.740 | because they have a bigger house or a fancier car.

00:22:26.780 | And if it's not, then cut it and be honest

00:22:29.900 | and don't be afraid to make changes.

00:22:31.700 | - You talk about the three big things

00:22:33.060 | and you just hit on them.

00:22:34.260 | You talk about the way to get a high savings rate

00:22:36.300 | is to focus on the big things that you can control

00:22:39.380 | that are the big budget eaters, if you will,

00:22:41.380 | and that is housing, transportation, and food.

00:22:45.860 | And those three things together,

00:22:47.940 | if you can control your housing cost,

00:22:50.300 | if you can control your transportation cost,

00:22:52.700 | if you can control your food cost,

00:22:54.780 | then you can bring more money to the bottom line.

00:22:57.260 | - Yeah, and I kind of talked how my wife and I

00:23:01.060 | just stumbled into getting a lot of those things right.

00:23:03.840 | There was no fire movement back then.

00:23:05.860 | And so we just kind of stumbled into it.

00:23:07.660 | So we were getting a lot of the big things right.

00:23:09.900 | And so for us, it was really pretty easy

00:23:12.060 | because if you don't inflate your lifestyle,

00:23:14.460 | and you can live pretty comfortably,

00:23:16.180 | and then as we had our basics with the housing and the cars,

00:23:19.780 | kind of, it was locked in,

00:23:20.940 | and we were able to inflate our lifestyle

00:23:22.580 | as our careers grew.

00:23:23.420 | So we were traveling more and doing fancier things

00:23:26.060 | and eating at better restaurants and things like that.

00:23:28.300 | But because we had the key things just locked in

00:23:31.020 | and we were living so far below our means, it was easy.

00:23:33.980 | Unfortunately, for some people,

00:23:35.420 | you're gonna find this later in life,

00:23:36.780 | and it may feel a little bit of sacrifice,

00:23:39.260 | and you're gonna feel a little bit of the pinch

00:23:40.980 | if you have to go back to get those things right.

00:23:43.700 | But really, if you don't get those things right

00:23:45.620 | one way or the other, either by starting well

00:23:47.380 | or by going back and making changes,

00:23:49.060 | it's really hard to develop that savings rate

00:23:50.940 | because those things,

00:23:52.060 | if you look at the average person's spending,

00:23:53.980 | they make up such a large percentage

00:23:56.500 | that if you don't get those big things right,

00:23:58.480 | it's gonna be very hard.

00:24:00.340 | - And one of the other things, of course,

00:24:01.420 | that's big for everybody is paying taxes.

00:24:04.220 | And I've found in talking with people

00:24:07.260 | that on the investing side and how to set up their accounts

00:24:11.060 | so that the right assets are in the right accounts

00:24:13.020 | and just how to structure the whole thing,

00:24:14.900 | and even when they were doing distributions,

00:24:17.940 | doing Roth conversions, I mean, the whole tax code

00:24:22.100 | and working the tax code to the maximum that you can

00:24:26.500 | for your advantage from savings to distributions

00:24:30.400 | to knowing where all the break points are

00:24:33.080 | for things like Medicare charges,

00:24:36.780 | for retirees and so forth,

00:24:38.600 | to understand the tax code as an investor

00:24:42.300 | and to work that tax code gets you so much more money

00:24:47.300 | than trying to go out and pick

00:24:48.700 | any actively managed mutual fund that might outperform

00:24:51.700 | that it's not even a comparison.

00:24:53.820 | You spend your time on taxes and you have a whole chapter,

00:24:56.580 | a whole section in here about working the tax code

00:25:00.420 | to your advantage, and I think it was a really good chapter.

00:25:04.160 | - Yeah, and I think that's where the book gets really fun.

00:25:06.680 | So, I mean, some people, it's gonna be pretty easy,

00:25:09.860 | the housing, cars, and food,

00:25:10.900 | and some people, it's really gonna be a struggle,

00:25:12.860 | but you have to get those things to get the savings rate,

00:25:15.120 | but once you can do that, and it's really simple things,

00:25:17.700 | like just using your work-sponsored 401(k) account.

00:25:20.360 | For a lot of people, that's the easiest

00:25:21.660 | and biggest thing you can do.

00:25:23.540 | Doing things like learning to be a index fund investor

00:25:27.620 | and cutting your expenses,

00:25:28.980 | like it can be seen as a sacrifice, I guess,

00:25:31.780 | for people, if you say you have to live in a smaller house

00:25:33.780 | or drive a less fancy car, but I mean, I personally,

00:25:36.300 | I've never met anybody that said,

00:25:37.780 | man, my life would be better

00:25:38.700 | if I just paid a little more taxes

00:25:40.220 | or if I could just pay my financial advisor

00:25:42.340 | a little bit more.

00:25:43.540 | So, I mean, those things, I mean,

00:25:44.540 | they add so much value to your life

00:25:45.860 | and you're actually spending,

00:25:47.300 | and we're talking big dollars less.

00:25:48.860 | Like, I know for me, we talked about some of the mistakes

00:25:50.700 | I was making as I became a do-it-yourself investor

00:25:53.360 | and bought into the index fund philosophy.

00:25:55.980 | I started saving about $10,000 in taxes

00:25:58.420 | and $10,000 in fees every single year, year over year,

00:26:02.180 | and those things were adding zero value to my life.

00:26:04.280 | So, I mean, talk about something that's easy to do

00:26:07.420 | because it makes your life better and you become wealthier.

00:26:11.860 | It's a no-brainer.

00:26:12.760 | - One of the big expenses for young people, of course,

00:26:17.460 | is going to college and you spend an awful lot of time

00:26:19.980 | on talking about things like college or hacking college

00:26:24.500 | and how to pay for college.

00:26:26.220 | And I think the whole hacking college idea,

00:26:29.140 | it was really unique.

00:26:30.520 | I had not heard it before.

00:26:31.500 | Again, you know, always learn something

00:26:33.260 | by reading other people's material

00:26:35.740 | and the whole hacking college idea was really new to me.

00:26:39.180 | Could you describe that?

00:26:41.140 | - Yeah, so I talk a lot about my mistakes,

00:26:44.400 | but if there's one thing that I did right,

00:26:45.980 | so my wife and I, between us, we have six college degrees

00:26:49.460 | and we did that with, she had about,

00:26:52.820 | we started with about $20,000 of debt from her undergraduate

00:26:56.100 | and otherwise we did it all without any debt.

00:26:58.620 | And it's been such a game changer

00:27:00.540 | compared to most people we see coming out.

00:27:02.600 | Like the average physical therapist who I was mentoring

00:27:05.440 | when I was working as a physical therapist,

00:27:07.060 | they were coming out six figures in debt.

00:27:08.620 | So it's a complete game changer.

00:27:10.580 | And I really think a lot of it is just,

00:27:12.500 | I'm again talking about like just questioning the rules.

00:27:15.500 | I think most people think that to go to college

00:27:18.380 | and to do it without debt, you have one of two paths.

00:27:20.540 | You get lucky and you get a scholarship

00:27:22.380 | or you have wealthy parents who are able

00:27:25.100 | to fund you the whole way through.

00:27:27.580 | And what we found is just, I think a lot of times,

00:27:31.060 | you know, if you have a hammer,

00:27:33.040 | everything starts to look like a nail.

00:27:34.880 | And I think college, just debt to finance college

00:27:38.160 | is so easy.

00:27:39.140 | So if you limit that or eliminate it completely,

00:27:42.460 | there's so many more options out there

00:27:44.020 | from working through college to, you know,

00:27:46.980 | to looking for different scholarships,

00:27:48.660 | smaller scholarships that people don't bother applying for

00:27:50.860 | 'cause they don't think they can get to, you know,

00:27:53.340 | doing like when you're in high school,

00:27:55.860 | getting some credits that apply to your degree.

00:27:59.020 | And most of the people we profiled use all of these

00:28:01.700 | and some other strategies.

00:28:03.640 | And if you are able to do that

00:28:05.340 | and you get a little bit here and a little bit there,

00:28:07.420 | you can drastically reduce the debt

00:28:09.460 | or eliminate the debt and come out debt-free.

00:28:11.300 | And that's a complete game changer.

00:28:13.180 | And it's funny that I've had a lot of positive feedback

00:28:15.980 | about that chapter.

00:28:17.660 | I absolutely loved our editor.

00:28:19.300 | And we actually cut a couple chapters

00:28:21.140 | and made some big changes,

00:28:22.060 | but she actually recommended we cut that chapter.

00:28:24.220 | She said, you know, a lot of people are writing about that.

00:28:26.220 | And that was the one place where I pushed back

00:28:29.000 | and we left the chapter 'cause I think it's so important.

00:28:31.700 | And one of my co-authors on the book, Jonathan,

00:28:33.700 | he actually came out of school $168,000 in debt

00:28:37.120 | and it was a big piece of his story.

00:28:38.720 | And when you can kind of contrast

00:28:40.120 | and you see like it took him basically a decade of working

00:28:43.400 | and saving to get out of that just to get back to zero

00:28:46.200 | versus some of these people in the book, myself included,

00:28:48.720 | who were able to get out debt-free.

00:28:50.040 | And again, it's just a, it's a total game changer.

00:28:52.040 | So yeah, hopefully we can add to the conversation

00:28:54.080 | and instead of making it a black and white,

00:28:56.000 | college is good or college is bad.

00:28:58.240 | I think for a lot of people, it's very valuable,

00:29:00.600 | but you have to approach it in the right way.

00:29:02.800 | - You talked in here a little bit

00:29:06.400 | about making college pay.

00:29:09.680 | In other words, well, you know,

00:29:11.640 | you wanna maximize the benefit from your degree

00:29:14.640 | and minimize the cost.

00:29:16.720 | And by maximizing benefit,

00:29:19.640 | I'm glad to see that you wrote a lot about,

00:29:21.960 | go out and get a degree

00:29:23.240 | that you can actually use to earn money.

00:29:26.120 | I mean, to spend $200,000 on a degree

00:29:28.600 | that you're gonna make 60,000 or $50,000 a year on

00:29:32.720 | just doesn't make any sense.

00:29:34.000 | I mean, you talk about college as an investment

00:29:36.560 | where you expect to get a rate of return on that investment.

00:29:39.960 | And I have not seen a lot of that

00:29:41.560 | and I'm glad that you brought that up.

00:29:43.600 | - Yeah, and it kind of ties together.

00:29:45.040 | I mean, I think any of these things in a silo,

00:29:47.680 | they maybe don't make as much sense.

00:29:50.080 | But when you look at the whole grand picture,

00:29:51.960 | again, we embrace being a lifelong learner.

00:29:54.400 | And you look at like the things that I've done

00:29:56.640 | with learning to manage my investments

00:29:58.120 | and how much that's paid off

00:29:59.520 | and learning to write

00:30:00.440 | just by sitting down at a keyboard every morning

00:30:02.380 | and picking up some books at the library.

00:30:04.640 | You can learn everything,

00:30:05.660 | but I didn't need to go get a journalism degree

00:30:07.760 | and I didn't need to go get a finance degree

00:30:09.520 | to be able to do these things.

00:30:10.640 | So there's a lot of things you can learn for free.

00:30:12.240 | I mean, we live in an amazing world

00:30:14.040 | where many of these things,

00:30:15.180 | you don't have to have a degree

00:30:16.760 | and you can be pretty successful.

00:30:18.400 | I mean, some things like if you wanna be a doctor

00:30:20.040 | or you wanna be a lawyer,

00:30:21.240 | obviously you have to have the paper

00:30:22.520 | that says you're qualified to do that.

00:30:24.560 | But then even at that,

00:30:25.720 | you really have to approach that decision

00:30:27.680 | more wisely and like you said as an investment

00:30:30.040 | versus this is good at any cost

00:30:32.440 | because there's plenty of examples

00:30:33.960 | where that's just not the case.

00:30:36.260 | - You also provided advice for what to do at work.

00:30:39.400 | I don't mean saving in a 401k,

00:30:41.280 | I mean, how to manage your career.

00:30:43.680 | And it was even a little chapter in there

00:30:45.860 | about how to manage your boss.

00:30:48.520 | And I started reading that saying,

00:30:49.760 | manage your boss, what's that about?

00:30:51.380 | Maybe you could enlighten us.

00:30:53.720 | - I think a lot of people just think,

00:30:55.840 | you can go and work hard and you're going to be rewarded

00:30:59.680 | and maybe you will, maybe you're gonna be lucky,

00:31:01.620 | but a lot of times that's not the case.

00:31:03.680 | If you can learn to add value

00:31:05.760 | to whatever situation you're in

00:31:07.640 | and learn what your employers value

00:31:10.440 | and then deliver and even over deliver on those things.

00:31:13.920 | And then sometimes this can kind of almost seem

00:31:16.720 | self promotional or taking too much credit,

00:31:19.400 | but you're your own brand.

00:31:21.160 | If you're doing above and beyond work,

00:31:23.200 | then you need to point that out to your employer

00:31:25.080 | and you need to maybe set up regular reviews

00:31:27.920 | and just things so that they're aware of what you're doing

00:31:30.520 | and how you're adding value.

00:31:31.720 | And that way it doesn't guarantee

00:31:33.240 | you're going to be compensated for those efforts,

00:31:35.480 | but at least you're aware.

00:31:36.880 | And then if you're not at that employer,

00:31:38.440 | then you have something objective to go to a new employer

00:31:40.520 | and say, look, this is what I've been able to do.

00:31:42.600 | And again, that is not my idea.

00:31:44.560 | That was from the blogger,

00:31:45.880 | it's called ESI Money is his blog.

00:31:47.800 | He was the president of a hundred million dollar company.

00:31:51.080 | And this was his framework that he laid out

00:31:52.960 | and we thought it was brilliant.

00:31:54.160 | And again, I agree it's something I had not seen anywhere.

00:31:56.600 | And a lot of the things my wife and I did

00:31:58.280 | in our own career, in our own house,

00:32:00.080 | but I've not seen it really put into writing in one place.

00:32:02.920 | So by being able to take all these people's best ideas

00:32:06.000 | and to organize them into one book,

00:32:07.560 | yeah, I agree that added a tremendous amount of value.

00:32:10.360 | - Brian Tracy talked about invest 3% of your income

00:32:13.880 | in yourself to guarantee your future.

00:32:17.200 | As I read that, I said, that makes a lot of sense.

00:32:20.360 | Can you dig into what Brian said a little more?

00:32:23.520 | - I think one of the things that the FIRE community

00:32:25.880 | is criticized for is being hyper frugal,

00:32:28.680 | almost to a fault where we don't want

00:32:30.000 | to spend money on anything.

00:32:31.640 | And honestly, there probably is some truth

00:32:33.160 | by some people in this community.

00:32:34.960 | And so what we really want to do

00:32:35.840 | is kind of push back a little bit and say,

00:32:38.080 | it's not just about cutting your spending,

00:32:39.880 | but how can you spend and how can you invest on yourself?

00:32:42.800 | And so just some little things,

00:32:44.840 | and we use an example in the book I know

00:32:46.360 | of a guy named Scott Trench,

00:32:47.840 | who's now I believe is the president at BiggerPockets,

00:32:50.360 | which is a real estate investing platform.

00:32:52.440 | But when he was really young,

00:32:53.760 | he had the good fortune of being invited

00:32:55.380 | to a mastermind group of real estate investors.

00:32:58.600 | And he started, he just kind of in his head said,

00:33:00.680 | I'm gonna buy each of these guys lunch

00:33:02.160 | and try to just pick their brain if they would let him.

00:33:04.480 | And they did, and it kind of led

00:33:05.740 | to some pretty great opportunities for him

00:33:08.400 | from being more comfortable to start investing

00:33:10.640 | in real estate competently,

00:33:12.360 | to eventually kind of leading to the connection

00:33:14.100 | that got him his current job.

00:33:15.200 | So just little things of thinking differently

00:33:17.520 | and investing back into yourself

00:33:19.000 | versus trying to save every penny,

00:33:20.920 | it can really add up and change your life over the long haul.

00:33:23.960 | - The book gets into actual investing,

00:33:26.600 | putting the money to work.

00:33:27.640 | And of course, you're an advocate

00:33:28.740 | for low cost index fund investing

00:33:30.680 | and not trying to go out and pick funds

00:33:33.040 | or stocks that are gonna outperform the market.

00:33:35.560 | One of the things about this chapter,

00:33:37.120 | though, as I was reading it,

00:33:38.920 | invest in index funds and understand the 4% rule,

00:33:42.440 | which we'll get to in a minute,

00:33:44.560 | was as I was reading this,

00:33:46.440 | there was so much in there that I had just,

00:33:49.960 | was like reading my own life in many ways,

00:33:52.440 | and all the things that I went through

00:33:54.520 | with figuring out what the philosophy

00:33:57.560 | of investing should be,

00:33:59.000 | and how indexing works and why it's better,

00:34:02.160 | and then going to develop a strategy,

00:34:04.520 | and then finally finding the discipline.

00:34:06.120 | I mean, you have it all in here.

00:34:07.280 | It's all here, and you did a great job.

00:34:09.860 | The 4% rule, though, is one thing

00:34:11.440 | that I wanted to get to right now,

00:34:12.920 | which is this idea that you could,

00:34:16.620 | at least initially, the Trinity study

00:34:20.220 | from a few years ago, which said,

00:34:21.940 | "Gee, if you withdraw 4% of your money

00:34:24.220 | "out of your account, then you can do that

00:34:27.320 | "for the rest of your life and not run out of money,

00:34:30.100 | "so get to some level where you can withdraw 4%,"

00:34:32.660 | but that has changed recently.

00:34:34.820 | I mean, the numbers have changed,

00:34:36.740 | but you still talk about it in the book.

00:34:39.780 | - In the FIRE community,

00:34:40.700 | I think we're maybe criticized for oversimplifying things,

00:34:45.300 | and so a lot of times, we'll define financial independence

00:34:48.220 | as when you have 25 times your annual expenses,

00:34:51.100 | meaning that you could spend 4%.

00:34:53.100 | I agree that that's not a valid rule,

00:34:56.220 | that if you're gonna retire in the traditional sense

00:34:58.300 | and start drawing down, and particularly

00:35:00.220 | for early retirees who have a 50 or 60-year

00:35:03.660 | potential timeframe versus a 30-year timeframe

00:35:06.200 | that the Trinity study was based on,

00:35:08.180 | but I do think it's a great rule to get people started.

00:35:10.680 | I think it's a great way to shift your mindset

00:35:13.420 | from people think to retire, you have to have X percentage

00:35:16.740 | of what you earned in your peak earning

00:35:18.340 | or your later earning years,

00:35:20.100 | and this kind of flips that whole thing on its head,

00:35:22.060 | and it makes us start focusing on what are you spending,

00:35:25.260 | and what is the multiple of your spending,

00:35:27.180 | and I think that's a much healthier

00:35:28.860 | and better place to start from,

00:35:30.700 | and then we have people in the FI community.

00:35:33.140 | One that we feature in the book,

00:35:34.420 | and he's probably the most prominent is Karsten Jeske,

00:35:37.500 | and he writes the blog Early Retirement Now,

00:35:39.660 | and he's done a whole series on safe withdrawal rates,

00:35:41.980 | and it's just great work,

00:35:43.380 | but I think it really does make you change

00:35:45.340 | that whole framework to get started,

00:35:47.020 | and it also, we talked about like investing fees,

00:35:49.180 | and if you assume you can withdraw 4% a year,

00:35:53.020 | it makes that one or 2% that you're paying annually

00:35:55.620 | in investing fees, it kind of puts some,

00:36:00.380 | I guess, context to that.

00:36:02.140 | When you say, you know, if you can withdraw 4% a year,

00:36:04.300 | but you're paying 2% between your fees to your advisor

00:36:06.940 | and then fees to the funds,

00:36:08.660 | that really only leaves you 2% for yourself,

00:36:10.580 | and that makes that 4%,

00:36:12.700 | it puts everything into perspective.

00:36:14.780 | - You talk a lot in the book about investing in index funds

00:36:17.980 | and keeping costs low, keeping taxes low, and so forth,

00:36:22.980 | and I wanna read something you put in here

00:36:24.940 | because it's so true,

00:36:26.420 | talking about how Wall Street tries

00:36:28.340 | to make everything complex,

00:36:30.580 | and I've been saying for a long time

00:36:32.260 | that if you're an investment advisor or you're a broker

00:36:35.380 | and you make things complex for your clients,

00:36:38.420 | you have job security,

00:36:39.900 | you think you're building job security

00:36:41.940 | because they don't understand really what you're doing,

00:36:45.300 | so they kind of throw up their hands at one point and say,

00:36:47.300 | "Hey, look, you're the expert, I'm trusting you,"

00:36:50.380 | and that's exactly what you wanna hear

00:36:51.900 | as a financial advisor,

00:36:52.980 | but not exactly what you should be saying as an investor.

00:36:57.060 | And you put in here,

00:36:57.900 | "There's a tremendous incentive for the financial industry

00:37:01.020 | "to promote feelings of inadequacy, fear,

00:37:05.240 | "and confusion in investors,"

00:37:07.500 | and that is so true.

00:37:08.780 | - And that was just from firsthand experience.

00:37:11.940 | I lived it for, again, a decade,

00:37:13.780 | and I felt so overwhelmed,

00:37:15.860 | and then eventually, after I took control

00:37:18.460 | of my own finances, I talked to my parents,

00:37:20.460 | and they kind of were in that same boat,

00:37:22.100 | so I kind of had to help them figure things out

00:37:23.900 | and get through, but I mean,

00:37:25.020 | you see that over and over with everyone who I talk to

00:37:27.460 | that you feel like you have to go to the advisor

00:37:30.940 | because they are the quote-unquote expert,

00:37:32.860 | and they just foster that feeling of dependency,

00:37:35.660 | and it's great for them,

00:37:36.500 | but it's not great for you as an individual investor,

00:37:38.860 | so it kind of goes back to you just have to learn the rules.

00:37:41.660 | - A lot of young people now are turning towards

00:37:45.860 | quote-unquote robo-advisors to invest their money,

00:37:49.740 | and I'm talking about Betterment and Wealthfront,

00:37:53.900 | and now just Vanguard.

00:37:55.460 | We heard through an article in Investor News

00:37:58.440 | is going to be launching a true online-only robo service,

00:38:03.260 | and their fee is going to be undercut everybody, of course,

00:38:06.260 | because that's what Vanguard does.

00:38:08.020 | How do you feel about these robo services?

00:38:10.420 | Are they a good thing for people,

00:38:13.020 | or do they make things too simple

00:38:15.660 | where you end up relying on them?

00:38:17.700 | - Yeah, so I mean, I'm not a huge fan,

00:38:21.100 | just because I don't have a problem with using an advisor

00:38:24.580 | of any sort if they add value,

00:38:27.100 | but for me personally, I don't see the value add

00:38:29.580 | of a robo-advisor.

00:38:31.300 | I think what they maybe do is they give a false sense

00:38:34.940 | of security because they're using these algorithms

00:38:37.780 | that if you follow this, then you're going to do better,

00:38:40.880 | and frankly, nobody knows what's going to do better

00:38:42.900 | in the long term, and what we do know, though,

00:38:45.260 | is that they're adding a cost,

00:38:46.340 | and they'll point out that their cost

00:38:47.820 | is maybe a quarter or a half a percent

00:38:49.540 | compared to traditional advisors, maybe charge 1%,

00:38:52.940 | and so any fee savings are good,

00:38:54.660 | but you can just do it yourself,

00:38:57.340 | and if you go in with that humble attitude

00:38:59.700 | that I don't know what's going to be the optimal portfolio,

00:39:03.060 | I know why I'm choosing the portfolio I am,

00:39:04.980 | and I'm going to stick with it for the long haul,

00:39:07.160 | I don't know that they're going to add any value

00:39:09.900 | with the portfolios they're going to put you in,

00:39:11.980 | but I do know for certain that it will cost you

00:39:13.780 | that extra quarter or a half percent,

00:39:15.580 | and again, again, that kind of sounds like a small number,

00:39:18.680 | but if you look at it, again, with that concept

00:39:20.660 | of maybe the 4% rule, or like we said,

00:39:22.700 | maybe that's not valid, maybe it's a 3% rule,

00:39:25.020 | and so if you're paying a quarter or a half percent,

00:39:27.220 | that's a substantial amount of the income

00:39:28.700 | you could potentially live off of,

00:39:30.300 | and again, if it's adding value, then great,

00:39:32.180 | but I don't see necessarily a great value add

00:39:34.840 | that they're providing.

00:39:36.700 | - There are some advisors who point to a study

00:39:41.380 | or an opinion piece by Vanguard

00:39:44.620 | who says that advisors can add up to 3% alpha

00:39:49.620 | in a portfolio, they call it advisor alpha,

00:39:53.140 | and they sort of backdoor into this idea

00:39:55.880 | that because advisors can change your behavior,

00:40:00.500 | because they can lower your fees somehow,

00:40:03.840 | I guess by using index funds,

00:40:05.460 | and because they're better at doing investing than you are,

00:40:09.820 | that they can add up to 3% alpha to your portfolio.

00:40:14.820 | How do you feel about that?

00:40:17.980 | - So when I started writing,

00:40:21.260 | we talked a little bit about my background,

00:40:22.700 | and so I was very dogmatic that everybody should be

00:40:25.300 | a do-it-yourself investor,

00:40:27.500 | and then as I started dealing with real-world scenarios,

00:40:30.940 | my parents being a great example,

00:40:32.940 | readers that call right into the blog

00:40:35.160 | and ask me these questions,

00:40:36.580 | and I realized there's a lot of complexity

00:40:38.900 | in people's situations,

00:40:40.500 | and so I do think if you have a complex situation,

00:40:43.300 | maybe you had bad advice before

00:40:44.820 | and you need to get out of products

00:40:46.980 | that aren't in your best interest,

00:40:49.060 | if maybe you have a unique circumstance,

00:40:51.300 | maybe you have a special needs child or something like that,

00:40:54.880 | there are scenarios where I'm certain

00:40:56.820 | that an advisor could add value,

00:40:58.940 | and then for other people,

00:41:00.740 | they're not going to do the simple things that it takes,

00:41:03.460 | simple rebalancing and things like that,

00:41:06.160 | so maybe they add some value there,

00:41:08.440 | but 3% seems like a lot,

00:41:10.900 | and especially across a general population,

00:41:13.060 | I have a hard time buying into that.

00:41:15.260 | - It's possible that advisors might add 3%

00:41:18.540 | to a small, minuscule number of people,

00:41:23.880 | but in general, at least in my practice,

00:41:26.740 | and I'm just doing an hourly advisor model now,

00:41:30.300 | the people I'm seeing are much, much more ahead than that.

00:41:35.300 | A good advisor might add a quarter of a percent, maybe,

00:41:40.540 | but not three.

00:41:41.660 | - Yeah, especially on an annualized basis.

00:41:43.300 | I mean, that's a lot of change.

00:41:46.580 | - And so one of the battles that I'm fighting

00:41:48.180 | is this 1% AUM fee,

00:41:50.020 | where if advisors are charging a 1% fee

00:41:53.300 | to a million dollar client,

00:41:55.180 | and .9 on a two million,

00:41:56.780 | and .8 on a three million,

00:41:58.420 | and it ends up being 10,000, 18,000, $24,000

00:42:01.960 | to pretty much just manage a simple index fund portfolio,

00:42:06.120 | and then maybe doing some financial planning as well.

00:42:09.180 | How do you fall on that debate?

00:42:12.820 | - So kind of getting away from the book,

00:42:15.400 | but kind of on our blog, again,

00:42:16.540 | we have a lot of people that write in,

00:42:18.520 | and that's generally the advice that we give,

00:42:20.780 | is that you find somebody that's fee-only,

00:42:23.960 | and that's gonna provide advice on an hourly basis,

00:42:27.460 | on an as-needed basis.

00:42:29.180 | I think that gives you the best chance

00:42:31.200 | to have the least conflicts of interest,

00:42:32.900 | and then we recommend that you find somebody

00:42:35.760 | that is a fiduciary,

00:42:36.860 | although I do understand that doesn't guarantee anything,

00:42:40.540 | but I think that gives you a better chance also.

00:42:42.660 | And so that's the general advice that we give,

00:42:44.420 | but I think in general,

00:42:45.980 | finding good financial advice is very challenging,

00:42:49.060 | and I think anybody that thinks that they can hand over

00:42:51.700 | to anybody under any model and not be a part of this,

00:42:55.260 | I think they're in for a rude awakening.

00:42:57.500 | I think there's just so many conflicts,

00:42:59.380 | and it's just really challenging,

00:43:01.000 | so you have to be invested in the process.

00:43:03.580 | - I think that's great advice.

00:43:05.160 | I wanna get into active management,

00:43:07.300 | and here's where I just thought

00:43:09.140 | you did a fantastic job in the book,

00:43:10.780 | 'cause it just opened my eyes up to,

00:43:13.320 | wow, what a whole new way of looking at active management,

00:43:16.760 | because when you start talking about

00:43:18.160 | active management in the book,

00:43:20.000 | you're not talking about investing in index funds

00:43:23.200 | versus investing in actively managed funds.

00:43:26.200 | You describe active management

00:43:27.760 | as something quite different than that.

00:43:29.800 | - Yeah, so I mean, I think a lot of times

00:43:31.940 | when you go to a financial advisor,

00:43:34.220 | they think in terms of stocks and bonds,

00:43:36.000 | because that's how they're paid,

00:43:37.520 | and I think it's extremely difficult

00:43:39.480 | to beat the market by investing in the market.

00:43:42.080 | So I think if you're going to be a stock and bond investor,

00:43:45.800 | you should probably be an index fund investor

00:43:48.080 | for the vast, vast majority of people.

00:43:50.240 | But I don't think it's impossible to beat the market

00:43:52.720 | by investing outside of the market.

00:43:54.440 | So maybe investing in your own personal business,

00:43:57.960 | or investing in real estate

00:43:59.600 | where you have much more control over

00:44:02.080 | getting into a small market

00:44:03.760 | where you have a competitive advantage,

00:44:05.680 | and you can put in some sweat equity,

00:44:07.580 | and you can utilize leverage in a relatively safe way.

00:44:10.580 | And I think for a lot of people,

00:44:12.320 | if you can't develop a high savings rate

00:44:14.200 | like we talked about earlier in the interview,

00:44:16.500 | but you still want to become

00:44:17.640 | financially independent more quickly,

00:44:19.840 | again, it kind of goes back to learning the rules

00:44:21.960 | and understanding the basic math.

00:44:23.680 | Investing in index funds may not get you there

00:44:26.680 | on the timetable that you want to,

00:44:27.940 | so you need to find a different path.

00:44:29.480 | And so that's where I think investing in your own business

00:44:32.120 | and/or investing in real estate,

00:44:34.120 | either on their own or in combination with index funds,

00:44:36.920 | that's going to give you a realistic chance

00:44:39.360 | to get to where you want to go.

00:44:41.720 | - And just to clarify,

00:44:44.640 | your version of active management is invest in yourself,

00:44:49.640 | invest in businesses that you start,

00:44:53.800 | invest in real estate directly.

00:44:56.640 | These are the active management things

00:44:59.080 | that you could be doing, which would really build wealth,

00:45:01.960 | as opposed to going out there

00:45:03.960 | trying to find active managers in the mutual fund space

00:45:07.960 | who you think might outperform the market.

00:45:10.280 | And I just thought that was a great insight

00:45:11.880 | and I completely agree with you on that.

00:45:14.480 | - Yeah, and I think that kind of goes back

00:45:15.920 | to the way we framed it.

00:45:17.220 | I think we probably will get some pushback

00:45:19.800 | because it kind of goes back

00:45:20.960 | to that definition of retirement.

00:45:22.680 | And so we kind of, we just don't really care

00:45:24.200 | about that definition of retirement,

00:45:26.000 | but we kind of look at these as investments.

00:45:28.120 | And some people will say, well, you're not really retired

00:45:30.000 | 'cause now you're an entrepreneur.

00:45:31.680 | You're not really retired because you're a real estate

00:45:34.640 | investor and you're out managing properties.

00:45:36.280 | And certainly there's truth to that.

00:45:38.680 | But the bottom line is, are you building the lifestyle

00:45:41.480 | that you want to live in alignment with your values?

00:45:43.960 | And so if you can work a couple of hours a week

00:45:46.320 | on a real estate, as a real estate investor,

00:45:48.440 | or as on your own business that you set up as a business

00:45:51.340 | and not a job where you can step away from it

00:45:53.400 | without the business shutting down,

00:45:55.160 | I would view that as an investment.

00:45:56.600 | And people are certainly can feel free to,

00:45:59.680 | we can agree to disagree on the terminology around that.

00:46:03.440 | But I think that that's the way

00:46:04.760 | that you can have outsized returns on your money

00:46:08.180 | versus trying to roll the dice by taking more risk

00:46:11.280 | than you can tolerate or getting into some hedge fund

00:46:14.680 | or somebody that wants to take huge fees

00:46:16.480 | and promise outsized returns.

00:46:18.320 | And I just don't think that that's reliable

00:46:19.920 | for really anybody and particularly

00:46:23.120 | for the vast majority of investors,

00:46:24.940 | I would certainly stand behind saying that.

00:46:27.360 | And I want to get back to something you just mentioned

00:46:29.400 | because it's a great line in the book.

00:46:32.700 | Scrap the idea of retirement completely

00:46:36.500 | and focus on building lives we don't want to retire from.

00:46:41.500 | I think it was just a great line.

00:46:43.500 | That's exactly it, isn't it?

00:46:46.100 | That's really what this FI fire movement really is about.

00:46:49.900 | It's about this whole archaic idea of slaving away

00:46:54.180 | until you have enough money to retire.

00:46:56.620 | If your employer lets you later on down the road,

00:46:59.620 | get away from that idea and focus on building a life,

00:47:02.620 | not just a job or not just a career,

00:47:05.580 | but a life that you don't want to retire from.

00:47:08.180 | - Yeah, and I normally write at the website,

00:47:10.940 | can I retire yet?

00:47:12.500 | And I found that blog

00:47:14.300 | 'cause I was literally asking that question.

00:47:16.260 | To me, it was all about retirement

00:47:17.860 | and it was all about escaping this career

00:47:20.020 | I was not satisfied with.

00:47:21.780 | So my partner at the site, Derek Kirkpatrick,

00:47:23.660 | I mean, he's just a really smart and detailed planner.

00:47:27.380 | And as I really kind of got into

00:47:29.380 | what does a traditional retirement entail,

00:47:31.900 | I mean, what I realized is,

00:47:33.660 | yes, it's going to free me from these things I don't like,

00:47:36.140 | having my time dominated by a job is the primary one.

00:47:39.500 | But now it's going to introduce

00:47:41.020 | a whole nother set of stresses where,

00:47:43.060 | what is my day-to-day purpose?

00:47:44.380 | Where as a physical therapist,

00:47:45.420 | I was going in every day and helping people.

00:47:47.460 | And so how am I going to replicate that in my everyday life?

00:47:50.740 | And we talked about, we were savers

00:47:52.460 | because we enjoyed that feeling of abundance.

00:47:55.140 | And if you're drawing down your investments,

00:47:57.520 | it's going to be a whole different feeling of scarcity.

00:47:59.660 | And every day you're stressed about money

00:48:01.100 | where money was never a concern.

00:48:02.420 | So I think a lot of people just oversimplify it

00:48:04.620 | and think retirement's going to fix their problems.

00:48:07.260 | And really you're trading one devil for another.

00:48:09.340 | And so how I approach it now is,

00:48:11.820 | how can I get the things

00:48:12.700 | that I really wanted from retirement?

00:48:14.380 | And so for me, that was time with my young daughter,

00:48:16.940 | time to get out and seek adventure with my wife

00:48:18.620 | while we're both young and healthy,

00:48:20.180 | to having some freedom to just step back

00:48:22.260 | and just have some space in my life.

00:48:24.480 | How can I create that without all the downsides

00:48:27.060 | of that scarcity that come with a traditional retirement?

00:48:30.340 | And that's really what it's all about.

00:48:32.100 | - When I was getting into the last chapter now,

00:48:33.900 | up to page 300 or so,

00:48:35.260 | I ended up drawing this little diagram.

00:48:39.500 | There's something you might see on a road,

00:48:41.100 | a sign that shows you could either go straight

00:48:44.260 | or you can take the sharp left-hand turn.

00:48:46.340 | And there's two arrows, one arrow goes straight

00:48:48.820 | and the other one makes the sharp 90 degree left-hand turn.

00:48:51.900 | And I drew that in the book

00:48:54.300 | and I put standard path was the straight line, right?

00:48:57.860 | That was the work till 65, get the gold watch.

00:49:01.220 | That's what we all, at least my generation,

00:49:04.180 | was kind of taught.

00:49:05.380 | And on the left hook, the pivot, if you will,

00:49:08.820 | that went 90 degrees the other way,

00:49:10.660 | I put choose FI, because to me,

00:49:13.580 | that's what it's really all about.

00:49:15.020 | It's changing the whole dynamics of the equation.

00:49:17.940 | - It's really funny that you say that

00:49:20.380 | because we kind of went back and forth

00:49:22.300 | on how we were gonna title the book.

00:49:24.100 | And it was between like your blueprint

00:49:26.540 | of financial independence versus a roadmap

00:49:28.420 | to financial independence.

00:49:29.900 | And my original vision of the cover was exactly that,

00:49:32.700 | like a road sign that has like an arrow

00:49:34.300 | that splits in different directions.

00:49:36.340 | So that's just, it's really,

00:49:37.820 | that's a astute and kind of amusing observation

00:49:41.100 | that you wrote that, 'cause that's exactly where we were,

00:49:43.660 | one of the two ways we were gonna go with this.

00:49:46.260 | - Well, it was easy to draw that figure

00:49:47.740 | because it's exactly what you're talking about in the book.

00:49:49.900 | I can see it.

00:49:50.740 | And quite frankly, when I look back at my own life,

00:49:52.580 | this is what I did.

00:49:53.780 | I didn't quite know what I was doing,

00:49:55.820 | but that's what I did.

00:49:56.700 | I took the left-hand turn.

00:49:58.540 | I started my own business when I was 40 years old

00:50:01.780 | because I didn't wanna continue to work

00:50:03.700 | in the brokerage world where they controlled everything

00:50:05.740 | and controlled my destiny.

00:50:06.740 | I wanted to do it on my own.

00:50:08.220 | I knew it was a big risk.

00:50:09.580 | My son came up to me in the second year of the business.

00:50:14.060 | He was a junior in high school and he comes up to me

00:50:16.180 | and he's crying.

00:50:17.020 | And I remember him crying and I'm like,

00:50:18.860 | "What's the matter?

00:50:19.700 | What's the matter?"

00:50:20.540 | He goes, "I can't believe you left this great paying job

00:50:22.860 | "to start this business in your living room."

00:50:25.220 | Literally, I was sitting in my living room

00:50:26.540 | at a desk in our living room where I set up shop.

00:50:29.020 | I said, "You have to trust me.

00:50:30.020 | "This is gonna work.

00:50:31.020 | "You have to believe me.

00:50:32.300 | "I know what I'm doing.

00:50:33.140 | "This is gonna work.

00:50:33.980 | "Everything's gonna be just fine."

00:50:35.420 | And it was.

00:50:36.940 | But it is a scary thing.

00:50:38.260 | It is a scary thing to get off that treadmill, if you will,

00:50:41.460 | the hamster treadmill and actually get off of it

00:50:44.420 | and take that left-hand turn

00:50:45.740 | and choose to do something different

00:50:47.660 | and choose to financial independence in a different way.

00:50:50.660 | Is it gonna work?

00:50:51.700 | Yeah, it will work.

00:50:53.900 | You know why?

00:50:54.740 | You're gonna make it work.

00:50:55.780 | That's why it's gonna work.

00:50:57.220 | - I had that exact experience, actually.

00:50:58.980 | So my dad started, he was an entrepreneur.

00:51:01.660 | He was a newspaper photographer

00:51:03.340 | and by all means, he was pretty successful,

00:51:06.180 | but he just hated it.

00:51:07.460 | And so he quit and started his own business.

00:51:09.140 | And I witnessed the struggles of an entrepreneur.

00:51:11.940 | And one of the things, again,

00:51:13.020 | we talked about investing in your own business

00:51:15.220 | and kind of how these concepts all tie together.

00:51:18.180 | I think a lot of people don't do what you did

00:51:20.660 | or what my dad did because they're afraid.

00:51:23.580 | And it's a healthy fear if, again,

00:51:26.940 | if you need that next paycheck

00:51:28.260 | or you're going to lose your car or lose your house.

00:51:30.900 | But by embracing these concepts

00:51:32.500 | that we talked about earlier in the book

00:51:33.800 | with cutting your core expenses

00:51:36.340 | and by building up some cushion

00:51:38.220 | so you're not paycheck to paycheck,

00:51:39.860 | even if you're not financially independent

00:51:41.340 | where you can retire, but if you have a year

00:51:43.700 | or five years or now 10 years of runway,

00:51:46.780 | where's the risk in that?

00:51:47.700 | I mean, you have a lot of time to figure things out

00:51:50.720 | and to get on the right path.

00:51:51.860 | And so I think it's going to embolden a lot of people

00:51:54.300 | to live into that life that they want to live

00:51:56.020 | versus being just stuck in fear.

00:51:57.940 | And that was really much more of the take-home message

00:52:00.860 | than anything about retirement.

00:52:02.420 | - And there's an entire community out there to support you.

00:52:08.140 | I mean, it's called the FI community,

00:52:11.660 | which is what this book is all about.

00:52:13.540 | It's talking about this community of people

00:52:17.660 | who are there to help you.

00:52:18.860 | And they are, I went to FinCon conferences,

00:52:22.620 | which are financial blogging podcast conferences.

00:52:26.940 | I went to the first one when it first came out

00:52:28.700 | and I've been to several.

00:52:29.640 | And it's just a great community of a lot of young people

00:52:33.140 | and some older folks like me,

00:52:35.340 | over 60 that try to make an appearance,

00:52:38.020 | but it's a great community, a support community

00:52:41.380 | for people who are looking to do something different,

00:52:45.720 | looking to take control of their lives.

00:52:48.020 | And change their lives for their better,

00:52:50.740 | for the better for the children

00:52:52.260 | and the better for the grandchildren as well.

00:52:53.860 | So this community, the Choose FI community,

00:52:57.020 | the FIRE community, it's all good.

00:52:59.020 | What you've done with this book is really great.

00:53:01.060 | And if you could just take a few minutes

00:53:02.540 | to talk about some of the kind of the special people

00:53:06.540 | who have helped you write the book

00:53:09.540 | and have helped you come to the messages

00:53:13.420 | that you've come to the book.

00:53:14.300 | I know you talked about Brad and Jonathan,

00:53:16.140 | and could you just go over your list?

00:53:18.420 | - Yeah, so I mean, I think when I originally

00:53:21.380 | started writing the book,

00:53:22.940 | a lot of those early thought leaders in the FIRE community.

00:53:27.740 | So going back to like Vicki Robin,

00:53:30.340 | but then I think the person that really picked it up

00:53:32.820 | and started this whole thing

00:53:34.020 | was a guy named Jacob Lundfisker.

00:53:35.940 | And he wrote, it was called "Early Retirement Extreme"

00:53:38.580 | and it lives up to its name, it's pretty extreme.

00:53:41.140 | And he talks about like an extreme frugality

00:53:43.500 | and getting to retirement as quickly as you can.

00:53:46.020 | But I think people started building off of his ideas

00:53:48.380 | and Pete who's known as Mr. Money Mustache

00:53:52.500 | and his blog is, it's been phenomenally successful.

00:53:56.740 | And he's kind of taken Jacob's ideas

00:53:58.740 | and taken it more to the mainstream.

00:54:00.480 | And there was kind of that whole core group

00:54:02.500 | of kind of that engineer type.

00:54:03.700 | So Mad Scientist, Go Curry Cracker, Root of Good,

00:54:06.220 | I think were the original bloggers there

00:54:08.520 | that kind of grew this community.

00:54:10.220 | And then as far as like investing

00:54:11.740 | and linking to the bogleheads,

00:54:13.700 | there's a blogger called J.L. Collins.

00:54:15.980 | And his blog is just called JLCollinsNH.com.

00:54:19.180 | And he's written a book called "The Simple Path to Wealth."

00:54:21.420 | And he was really who introduced me

00:54:23.260 | to the idea of index investing.

00:54:25.600 | And he considers John Bogle one of his heroes.

00:54:28.220 | And I started reading his stuff

00:54:29.700 | and I started reading Mr. Bogle's work

00:54:31.100 | and getting into the bogleheads community.

00:54:32.940 | And so that was super valuable to me.

00:54:35.640 | And then there's just a couple bloggers

00:54:37.980 | that were kind of out there in front of me.

00:54:39.860 | Todd Tressiter, who writes at the blog Financial Mentor.

00:54:42.900 | And my partner now at the blog Can I Retire Yet

00:54:45.460 | is Daryl Kirkpatrick.

00:54:46.420 | And I think a lot of people don't even maybe consider

00:54:48.620 | those two as part of the FIRE community

00:54:50.400 | 'cause they're a little bit older

00:54:51.460 | and a little bit further out ahead.

00:54:53.140 | But Todd really was the first person I heard talking about,

00:54:55.660 | you know, it's not about retirement.

00:54:57.060 | And, you know, he called it the pro-leisure circuit

00:55:00.500 | where maybe you're gonna go out

00:55:02.200 | and whatever it is for you, hiking, skiing, traveling.

00:55:06.380 | And, you know, it's gonna be great for six months.

00:55:08.460 | And then you're gonna get bored

00:55:09.280 | and what are you gonna do next?

00:55:10.700 | And for Daryl, my partner now,

00:55:12.560 | he just kind of was more even keeled

00:55:15.180 | and not extreme and not all about optimization

00:55:17.780 | and frugality, but instead like about

00:55:20.180 | what really matters to you and how do you design that.

00:55:22.560 | So all of those people and many, many more

00:55:24.820 | who've now come behind them

00:55:26.580 | and contributed their own stories

00:55:28.040 | have all really contributed to the book.

00:55:30.140 | And when I started writing, I thought that was the story.

00:55:32.980 | I thought that was the book.

00:55:34.140 | So all of those people were tremendously influential

00:55:37.420 | on my journey and putting that message together in the book.

00:55:43.020 | - Your two authors, Brad and Jonathan,

00:55:45.820 | have a podcast called Choose Fi,

00:55:48.420 | which has been extremely successful.

00:55:50.500 | And a lot of the information in the book

00:55:52.620 | comes from those podcasts.

00:55:55.780 | - They've done a great job at bringing in a lot of voices.

00:55:59.020 | And I originally thought that the book

00:56:00.900 | really was kind of collecting

00:56:02.100 | these original thought leaders and their ideas.

00:56:04.560 | But what Brad and Jonathan have done a great job of doing

00:56:06.820 | is bringing in a lot of different voices

00:56:08.540 | and a lot of different perspectives

00:56:10.140 | and learning from many different people.

00:56:12.620 | And then the other thing,

00:56:13.860 | even bigger than building the podcast,

00:56:16.180 | they've really built a community.

00:56:17.320 | So like when I was starting,

00:56:18.580 | we talked about like I was saving 50%.

00:56:20.380 | And I knew I wanted something different,

00:56:22.580 | but I didn't know how to find other people

00:56:24.460 | on a similar journey.

00:56:25.940 | And what they've done is they've created first

00:56:27.780 | a Facebook community,

00:56:28.840 | and now it's turned into these Choose Fi local communities.

00:56:31.220 | So like I'm in the Salt Lake City area

00:56:33.540 | and every month we get together.

00:56:35.220 | And it's just a community of people,

00:56:36.620 | of like-minded people who you can support one another

00:56:38.980 | and learn from one another.

00:56:40.060 | And that's just so valuable

00:56:41.300 | when you're trying to do something

00:56:42.400 | that's so different from what you're seeing every day.

00:56:45.160 | And I think that's just tremendously life-changing

00:56:48.500 | to have that support group

00:56:49.740 | and people can find them wherever they're at in the country

00:56:53.020 | and kind of build it into whatever you want it to be.

00:56:55.900 | And having a place where people can go and meet up

00:56:57.840 | on a local level and support one another, it's phenomenal.

00:57:00.740 | - The book is called Choose Fi,

00:57:04.680 | Your Blueprint to Financial Independence.

00:57:07.020 | Chris, Brad and Jonathan did a fantastic job with this book,

00:57:10.340 | highly recommend it for everyone.

00:57:12.680 | I learned a tremendous amount

00:57:13.920 | and I've been around for a while

00:57:15.440 | and I've read a lot of books.

00:57:16.740 | And sometimes when you pick up a book,

00:57:18.840 | you think you're gonna read the same old things

00:57:20.880 | over and over again.

00:57:21.700 | I'll tell you, I learned an awful lot from your book, Chris,

00:57:24.400 | and I really appreciate you being on the show.

00:57:26.800 | - I really appreciate you having me,

00:57:27.920 | and that means a lot coming from you.

00:57:29.800 | So I'm quite honored to hear that.

00:57:32.080 | - This concludes the 14th episode

00:57:35.960 | of Bogleheads on investing.

00:57:38.400 | I'm your host, Rick Ferry.

00:57:40.540 | Join us each month to hear a new special guest.

00:57:43.900 | In the meantime, visit bogleheads.org

00:57:47.260 | and the Bogleheads Wiki.

00:57:49.020 | Participate in the forum and help others find the forum.

00:57:53.260 | Thanks for listening.

00:57:54.300 | (upbeat music)

00:57:56.880 | (upbeat music)

00:57:59.460 | (upbeat music)

00:58:02.040 | (upbeat music)

00:58:04.620 | [BLANK_AUDIO]

Bogleheads® on Investing Podcast 014 – Chris Mamula, host Rick Ferri (audio only)

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