(audience applauding) - All right, everyone. Welcome, and thanks for being here. My name is Gauri. I'm on the board of the John C. Bogle Center for Financial Literacy, and we are thrilled to have this panel of FIRE all-stars. Their bios are ubiquitously available, so I'll just touch on a few key points, starting with Paula Pent.

She has a master's in journalism from Columbia University. Her first job out of college paid $21,000, and when she left her last job working for someone else, she was making $31,000. She quit work to travel the world, start the Afford Anything podcast, which has, get this, over 30 million downloads, and she recently recorded her 500th episode a few months ago.

We're very grateful to have Paula. (audience applauding) And she also owns a few rental properties, so she has unique firsthand insight with rentals. Next, Karsten Jeska has a PhD in economics from University of Minnesota. Shout out to Minnesota. (audience applauding) He's worked at both the Fed and Bank of New York Mellon Asset Management, and he's taught at UC Berkeley as well as Emory.

He retired in his 40s, having achieved FI, and he has over 60 blog posts of over 200 that address sequence, safe withdrawal strategies, and he has a CFA, so he definitely knows his numbers. Next, we have Jackie Cummings Koski. Jackie is a CFP and also the author of Wiley's Fire for Dummies.

They could have chosen any luminary in the fire space. They chose Jackie. Jackie also escaped poverty, divorce, and single parenthood to achieve FI in her 40s, so she will provide unique perspectives from all of those aspects. And then we have Dr. Jordan Gromit, who folks heard in the last panel.

Jordan is a hospice physician, so he has unique insights on what folks regret and don't regret towards the end of their lives. He's written over 1,000 related blog posts, and he has a lot to share on meaning, purpose, and identity. He is the author of Taking Stock, a hospice doctor's advice on financial independence, building wealth, and living a regret-free life, and he has another book on its way.

So with that, we thank the panelists. (audience applauds) We're gonna try to touch on things that are less covered in the space, but we'll also keep it foundational for folks new to the space. So we'll start with, what's the most useful, atypical, personal finance advice you'd like to share?

Start with Paula. - Sure. I'd say the most atypical personal finance advice is to embrace spending, because I think there's this myth that being quote-unquote good with money means, oh, you just don't spend it. Save as much as you can, hoard as much as you can. The higher your savings rate, the better.

But in fact, being good with money means aligning your money with your values. And so to the extent that you can spend your money on what you value and don't spend your money on things that society pressures you to spend on, but that aren't actually important to you, the better you are at being a capital allocator.

- I think my entire blog is atypical advice, but if I had to pick one, I would probably say that if you do a safe withdrawal strategy in retirement, you want to personalize that, right? So you want to take into account your personal parameters, your horizon, how much requests do you want to leave, how many gifts do you want to give along the way, what kind of additional cash flows are coming in or out.

That makes a huge difference. So just the 4% rule of thumb is probably not gonna work for most people. It's a good starting point, but you should customize it more than that. And then on top of that, so in addition to these idiosyncratic parameters, you also want to look into market parameters, right?

Are you retiring at the peak of the market or at the trough of the market, right? Safe withdrawal rate can't be 4% all the time, right? So you want to be more cautious. If you're at the peak of the market, you can probably retire with a lot more than a 4% rule if you're retiring say in 2003 or 2009 or at the bottom of the market in 2022.

So that's my atypical advice that shouldn't be atypical. - Okay, thank you. - I think atypical for me, it would be starting, like when you start your fight journey or you start getting your finances together, start with the thing that lights you up the most, the things that actually will get you moving.

Traditional thought is, oh, start with a budget, start with your expenses. And that's true, but if you freeze in your tracks and you procrastinate 'cause you absolutely hate that thing, you're never gonna like move forward. So at least start with the thing that you like the most. For me, that was investing.

And all this personal finance stuff comes full circle. So you'll eventually get there. But I say, start with what is going to actually get you moving. - A lot of people dream about FI and whether they achieve it or not, sometimes it's very different than their expectations. What doesn't FI solve that people expected it to?

And what does it solve, whether expected or not? - So these are related answers, but what it doesn't solve, and let me give, before I give you the punchline to that answer, I'll give you some context. Many people I know use FI for a well-funded career change. So they don't necessarily want retirement as defined as a complete permanent and irreversible cessation of income.

They're not looking for retirement in that context. They're looking for a career change, perhaps to something that's much lower paying, but that is very well-funded where they have financial security. What, and anecdotally, what I've seen a lot of people experience is that they'll change careers into something they think will be more fulfilling, but their new boss sucks, you know, just as much.

Like the day-to-day reality of what they think they're going to enjoy is actually not that great. And so FI doesn't necessarily solve that, but to the second part of the question, which is what does it solve, it brings into clarity and focus what is important to them. So it isn't necessarily as simple as, oh, I'm a software engineer, but I would really enjoy working at an animal shelter.

You know, I mean, people might think it's that, but then it actually turns more into, oh, what I actually enjoy is working for an organization in which I have a lot of autonomy. You know, it'll bring that into focus more. - Yeah, so one thing I always tell people is that if you view FI as getting rid of the job you hate or the job that you're bored in, the problem is you might then also hate early retirement and you might be bored in early retirement.

So it's, maybe the job is not the problem, maybe you are the problem, and you might have to change other things in your life. And so a few observations from my personal retirement, right, when I was working, I always longed this idea. So when I'm retired, I'm gonna go skiing every day of the week.

I'm gonna go hiking every day of the week because these are things that I really cared about. And now I live in the Pacific Northwest and I have that option every day. I'm not even using it as much as I thought I would, right? Because there are other fun stuff to do, just taking my daughter to the school bus and picking her up.

I mean, that's already a great day in my life. I don't need that much more than that to make me happy. So some of the things that you think you will do in early retirement, then you realize you have the option and you're not even going to do it.

But it's nice to have the option, right? Because then what you do is, Pacific Northwest, the weather is not always that nice, then instead of going every day, right, you wait for the perfect day to go hiking and skiing. And even though I might actually do less skiing now, when I do it, I'll make it count and make it enjoyable.

But really every day is enjoyable, just doing small things and maybe very, very, very small. And some people might think meaningless things, but that turn out to be very meaningful, like hanging out with family, visiting family, traveling more. And so keep that in mind when you plan for retirement.

- Yeah, and I think it just doesn't solve your relationship problems. People that are Phi, they still get divorced. They still have healing that they may have to do with their parents or their kids or friends. And so that piece, that Phi stuff, it just magnifies who you are.

So I think it just doesn't really change a whole lot of the relationship stuff that goes a lot deeper. - Simple. So what are ways to spend that actually provide fulfillment, sustainable fulfillment? - So I would start, instead of starting with the question, how can I spend more money?

I would start with the question of, what are the things in my life currently that bring me the greatest sense of fulfillment? And what are other ways that I can amplify that or magnify that? And by virtue of, if it's how can I spend money, it's almost like a solution looking for a problem.

So I would start instead by flipping that on its head, take money out of the equation entirely. What are the things that are most fulfilling? How do we make that more? - For us, it's travel. So we like to travel very extensively. So this year we have a travel budget of I think 10 to 11 weeks.

So when I say travel budget, we don't look at the money. Well, the money is there, we can spend that. I mean, as long as it's not astronomically expensive. So our budget is more in terms of the weeks and the time constraints that we have, not so much in terms of the monetary constraints.

So we spent two weeks in Japan in the spring. We just came back from a six week trip to Europe. Because I didn't get back to Germany on that trip, I flew once more and spent another week in Germany to visit family just recently. And then we do another trip in December and do a cruise to the Panama Canal from LA via the canal to Miami.

So for us, it's travel. And then we also try to combine that with having family together. So we sometimes make basically family reunions out of that. So that's fulfilling to us. And we have almost infinite budget to do that. - Yeah, I know that that's a hard one for a lot of people.

I think sort of taking away what's worth spending money on or how do you like switch on this spend versus save is to, I guess think about like, think about your values and think about like legacy. And that money part to me is just the obstacle that kept you from doing it before.

And now that you don't have that obstacle, wow, how many times would you wanna take a big vacation with your kids or do all the things that you thought about doing when you were young? And you might have to take a walk down memory lane and just say, you know what, the money part is no longer an issue for me.

So I wanna do it. And I feel like it's just gonna take some practice 'cause it is a big mindset shift to go from saving your entire life and now you're ready to spend it, but it's just totally worth it. Think about kids, grandkids, everyone else in your life.

- So I think you can't buy your way into becoming who you wanna be, right? So if you wanna be a runner, you can buy as nice shoes as you wanna buy, but until you start doing the things, you're not a runner. But you can use money to clear the way to become the kind of person you wanna be.

So you can use money to hire a babysitter so you have time to go training, and you can use money to hire a trainer so you're stronger. You can use money to pay for your admittance into the Boston Marathon. So I think the idea is to use money in support of those things that are most important to us.

- Hear it. So in retrospect, a lot of people who've achieved FI say, I sacrificed so much along the way, I was miserable, and even though I'm FI now, it wasn't worth sacrificing to the extent I did. What, in your experiences, is worth sacrificing, and what isn't? - So I like the idea of plan for the future, but don't live in it.

And I think that what often happens is when we defer happiness, we live in the future. And so anything that would cause that, that would cause the negation of the present moment is not worth sacrificing. So, I mean, there's the obvious answers of health, relationships, you know that already, that's not new information.

But where that comes into practice on a day-to-day level, I think is worthy of constant inquiry, constant re-self-examination. And a thought exercise that I really enjoy is what decisions would I make if my lifespan was only five more years? And what I like specifically about five more years is that, okay, if it's next week, there are certain things that I just can't do by next week.

But five years is a long enough time span that I can make some serious changes. But, you know, but it's not like I don't have the, it doesn't, I don't have the same set of assumptions that I would if I was imagining that I'm gonna live to 100. And so, therefore, time is gonna stretch on forever.

So I use that thought exercise a lot. - Yeah, my philosophy is called stealth frugality. So we want to be frugal. We don't want to waste money on things that we don't need. And we're environmentalists, right? We don't want to waste energy, for example. But we don't want to be so frugal that people start talking behind our backs.

So when I announced my retirement at the job, there was not a single person who told me, yeah, I knew you were doing that. Oh, you're such a penny pincher. I tried to do everything that kept me happy socially. And, of course, it might have delayed my retirement by about six months, but it was obviously worth it to go out to work lunches and to drive a car that looks like we're actually splurging a little bit, but it wasn't actually that expensive.

And so this is a little bit of a riff at this idea of stealth wealth, right? I remember Lief was sitting there, he had a brilliant blog post on stealth wealth. So we don't want to flaunt our wealth, but I don't want to also be so frugal that people think there's something wrong with you.

And so the stories for people who, basically, there was a lawyer in Seattle who was sharing people's Netflix passwords, right? If you do that as a lawyer and people start talking behind your back, well, she's kind of cutting corners there, right? You don't want to do this frugality so much that it even hinders your advancement at the office.

What I liked about going out for lunch and coffee is you hear the most recent gossip, right? You can rub elbows a little bit with the powerful at the office. And, I mean, not in a sleazy way, but, I mean, in a positive way. And it didn't hamper my retirement saving much, but it made the ride much nicer.

And then on top of that, right? So remember this Mr. Money Mustache calculation, right? If you cut your spending to a really tight budget, you get faster to retirement, but then you also have to keep that lean budget also in retirement, right? I mean, if you already hate it while working, right?

And that means it's not just until you reach retirement, then in retirement, you have to keep that low budget. And I think it's maybe don't be too frugal, spend on the things that are meaningful to you. I mean, I have certain things and you will have certain things and it might delay your retirement.

And if it's five years, even, it's still worth it to have an easier path to retirement. And then also in retirement, when you keep that little bit more generous budget. So it's definitely worth it. And by the way, the FIRE community, we almost have to blame ourselves a little bit, 'cause if you want to become a blogger, right?

You almost have to retire early, really, really early, right at this, this is the great talking point for you. And then you might get an interview with the Wall Street Journal or the New York Times. The earlier you move, the more are your chances to gain that publicity, but we can't all be like that, right?

We are all in some way, regular early retirees. And so plan the path like you can live with this for the rest of your life, basically. - I think that's such a misnomer. Like, I know FIRE people get blamed for being frugal and minimalist and all of this stuff.

And I never felt like I fell within that camp. And to me, it's just a matter of prioritizing the things that are important to you. And it might be different than someone else. Like, you know, we have some FIRE people that might brag about, you know, having 300,000 miles in their car.

That's totally fine, but that's really not what I want to do. I want to buy a nicer car, but I live in a low cost of living area and my housing costs are pretty low. So I never felt like I had to be, you know, an extreme minimalist or extreme frugal, but we get that, you know, avatar, right?

So when people are asking me about it, they're like, "I like to spend money." And it's like, you can still spend money. It's like, you should never, don't deprive yourself and don't make yourself miserable 'cause guess what? You're not gonna stick with it. So, you know, the whole, you know, what do you have to give up?

And, you know, trying to, you know, cut back on every little thing, that's just not fun. And no one wants to stick with that. So I'm trying to get rid of that whole thing that seems to be around FIRE. And like you said, you know, the media picks up on that.

They want the most extreme stories. And so that's where it comes from. So I try to sing a different song to say, "Look, you really need to enjoy it." And if I could have retired six months sooner because I cut back my coffee, then fine. I don't mind working six months.

You know, it's just not that big of a deal, but just don't deprive yourself and make yourself miserable. - The answer to when you sacrifice too much is burnout. And so if you think about it, anyone who's done something and sacrificed for something they loved or something they believed in, it's an act of love.

You don't burn out when you're doing it as an act of love. Difference is when you're doing it for FIRE, you're doing it as an act of love towards yourself. And when it stops being an act of love, you burn out. And I was a perfect example of this 'cause I went through medicine.

I got burned out very quickly because I just wanted to get to financial independence so fast and I worked so hard. And then I had to leave mostly. What I found is that I loved a touch of medicine, the piece of doing hospice. What if I had found that in the beginning?

Like I would have never burned out. I would have probably never left. I wouldn't have gotten to financial independence as quickly, but it probably wouldn't have been necessary. And so I think if you find yourself burning out, you've gone too far. If the excitement, if you're sacrificing and you're excited about it and you're like, this is an act of love towards myself or my family and it feels good, then you're probably doing fine.

- Clearly work provides a lot of meaning, purpose, and identity for folks. And Jordan touched on this in the last session. How should folks prepare for lack of meaning, purpose, and identity in the absence of work? - I'd say don't prepare for the lack of it, prepare for a shift in it.

So don't retire away from something, retire into something. So you don't want to be rudderless, like you don't want to be going nowhere. Have a thing, and that thing can change. That thing likely will change. But just have a thing that you're doing that gives you some type of purpose.

- Yeah, so I am fortunate, right, because I retired from finance. And what am I doing now? Talking about financial stuff. So I basically decluttered my life and I can do what I love without having to deal with performance reviews and sexual harassment training or anti-sexual harassment training, obviously.

So, and all of this corporate stuff that you started to hate about your job. So I'm very fortunate, obviously. I can't imagine how somebody who is a firefighter and then retires from that and can't do what he loves anymore or a medical doctor, potentially, right? So I, yeah, so, I mean, for me, obviously, I picked up something that I can do after retirement that's still fun and intellectually challenging and also solves the issue of social interaction.

So in my hometown of Camas, Washington, just under 30,000 people, we have five fire couples. So us plus four more. And then some of them, many of them, actually, I met through my blog during the local fire meetup, monthly meetup meetings. So, yeah, I mean, so you basically cover the intellectual, the social corners, physical, right?

I mean, I have tons of stuff to do in the Pacific Northwest. And so I think that was something. So I always say that some of this emotional stuff, I can wing that in retirement. I just make that up as I go along. And so I'm more of the finance geek and math geek.

So I thought that that's harder to fix if you get it wrong. But so, I mean, don't look to me in terms of emotional support in early retirement, if you know my blog. But yeah, I mean, I definitely, maybe intuitively and naturally, I took care of that myself and through that fortunate circumstance that I can still talk and think about finance.

- Yeah, I think it's definitely a shift, like Paula said. I was at the same company for 21 years. So that was my identity. Like any conferences I went to, it was because the company told me I needed to go to that conference. The friends that I had, it was a built-in friendship network at work.

Some of them were extraordinary. Some of them weren't extraordinary. But I think I ended up working two years beyond reaching my fine number. I think when I reflect, I think a part of it was that I knew I had to make the shift of what am I gonna be doing afterwards?

What am I interested in? It was a lot of the financial stuff. So I start going to conferences that I chose. I started doing things with people that I chose. And slowly within those two years, it made a difference. Now my network wasn't just LexisNexis where I work for.

It was outside of that. And I almost think about the trade-off that I made. My new friends were friends that I chose in circles that I wanted to be in, that shared the same things that I shared. But it took a couple years for it to really click and say, "Okay, I think this is a shift that I wanna make." But for 21 years, that was the identity.

And my job, my workplace, chose those things for me. And now I'm choosing them for myself. - You know, I think there's a lot of talk about what happens when you leave your job, and especially if you're someone from the financial independence community and do this early. I guess I would argue with the fact that you lose your identity when you leave your work.

If your work was your identity and your purpose and your meaning, you probably wouldn't leave or you do what Earn did, which is leave maybe the job, but continue the work. I think what we're really asking is how do I, in general, identify our sense of purpose and meaning and identity, and probably we're in jobs that don't actually fulfill those needs.

So I think a lot of us have a sense of purpose and identity that have been given to us or that we've given ourselves 'cause they were convenient. And most people who get to the place of fire are like, "This isn't fulfilling me anymore." And so it's not how do we not lose that sense when we leave work, it's how do we develop it more authentically in the first place.

And I think that has to do with a lot of searching into purpose and identity. The last talk before this was all about how we find our anchors of purpose and how we define ourselves around them. So maybe I'm splitting hairs here, but I think if you are finding a loss of purpose and identity truly when you leave your job, then you probably shouldn't be leaving your job or at least not your industry, 'cause if that's really purpose and identity to you, why are you leaving?

- Great, thank you. I should add that we're interested in audience questions. So there are notepapers and pens throughout where you're sitting and folks are walking around. Just raise your hand and someone will come over and grab that question. So how about explaining the pursuit of fire to friends who just can't relate?

- I don't. Easy. Yeah, if people are curious about it and they have questions, they're welcome to ask. But if they don't bring it up, I'm not gonna bring it up. So I just don't talk about it with people who don't show any, who don't proactively initiate the interest in it.

And the other thing that I've noticed, so oftentimes, you know if you're at a cocktail party and there's just that, like everybody's opening question is, so what do you do, right? And I know a lot of people who have struggled to say like, well, I'm retired, 'cause if you say that and you're 40, like there's a lot of questions that come with it.

And I've also noticed for myself, like if I say, oh, I'm a podcaster, then there are, people get really excited, and then there's a bunch of follow-up questions. And then we just end up talking about work, which like, you know, why do you go to a cocktail party just to sit there and talk about work the whole time?

That seems like a terrible use of your time off from work. So I kind of have fun with it. Like sometimes I tell people, I'm like, okay, you know those desiccant packs, those silica gel, like Stay Fresh desiccant packs? I am the assistant regional sales manager for a B2B desiccant silica gel pack company.

And then I have like a little silica pack in my purse that I'll pull out. So sometimes I'll just goop around to do something like that. And later on, if like, you know, I'll be like, just kidding, I'm a, actually I was on Netflix, you know? But like, yeah, sometimes I'll just kind of have fun with it and make it playful, because that's just so much more interesting than rehashing the same tired conversation that you've had about work over and over and over and over.

- Yeah, so I've been going back and forth to the response to that. In the beginning, I was too afraid to say I'm retired, right, you come up with something else, and then you say it's retired. But after you say you're retired, it kind of shuts down the discussion almost in many cases.

Other people then do follow up question, well, how did you do that? And then you explain. And quite amazingly, sometimes you find people who were already intuitive without even knowing about fire, intuitively, they are on board with this already, right? Because I mean, in the U.S. right, we have this fantastic system where if you have the right parameters and the right intuition and discipline, there are lots of options to accumulate wealth, right?

And not everybody uses it, but the people who use it can accumulate wealth very quickly and you might actually win some people. Because if somebody had told me about the fire community before 2015, I would have been one such person. And I guess I could have benefited from some additional advice.

And yeah, so, and in German, there is actually another word for retirees, called Privatier, which is, that also has a very bad connotation. It sounds a little bit like stuffy old money, which of course, that's not what we are, right? We are mostly self-made people. So it's very hard to, if you talk to people who are not in our system, and this can go any way, right?

I mean, you could intrigue people, but then they lose focus and interest very quickly. You could bring more people on board or some people say, well, this is not for me. And thank you, but no thank you. I mean, we've tried to push some people where we see, I mean, you have to get your finances in order and start contributing to your 401k, where there's really only so much you can do.

And as you can lead the horse to the water, but can't make it drink. So that thing applies there. So yeah, it's difficult. I mean, I'm not trying to be too preachy, but I will try to at least make an effort to bring people into our world. - Yeah, so Paolo was saying, you don't really talk about it unless someone asks you.

I was doing the same thing. And then I wrote "Fire for Dummies." So the jig is up. (laughs) When I left my job, and even a little bit while I was still working there, I did discover my small P purpose, which was financial literacy and education. I wanna teach everybody, mainly younger people about basic personal finance stuff.

I keep up with how many states require personal finance in order to graduate from high school. It's 26. So I used to say, I teach people about their money. And usually people are interested to talk about money. So they'll continue asking follow-up questions. I like the podcaster idea. I've only been doing it for less than a year, but I think that's something people love to talk about.

But yeah, so it gives me a chance to sort of mention what is passionate to me. I don't go into it any more than they want to, but typically, like doctors might have this happen where you tell people you're a doctor, and they're like, "Well, I got this itch on my back," or something.

(laughs) So they'll say something about their money. "Oh, my 401(k) is all screwed up." Or, "Yeah, I've been trying to get my money right. "I have a question." So usually that gives them an opportunity. It opens up the door for them to ask a question or whatever. And I'm on this big mission to try to make money not a taboo topic to talk about.

So I guess I kind of see it as an opportunity to open a conversation about something I really love talking about. So as a young hospice doctor, from time to time, I would be asked to go see a patient or a family. And I'd walk into the room, and we'd start having the death conversation.

And they had already signed up for hospice, but they clearly didn't want to hear it. They were in denial, they're not dying. Their family members were in denial, they're not dying. And I spent maybe the first six months trying to tell them they were wrong, and all it caused was anxiety and stress and unhappiness.

And so from that, I learned that you meet people where they are, you can't drag them to where you are. And I think that goes along with fire, too. Even with a spouse, all you can do is meet people where they are and be intentional and clear on who you are and what you believe.

And when they are ready to hear it, they will come back to you. Otherwise, it's hard to drag them kicking and screaming to where you are. - Great, thank you. I want to pick up on the spouse thread in a minute. But since employer-sponsored health insurance is such a big barrier for people taking the leap towards leaving their jobs, can you share some insights into demystifying health insurance outside of employer-sponsored health insurance?

- Just don't get it. (laughing) - So I have been purchasing individual health insurance since 2008, so pre-ACA. I will say, since the ACA started, it's more expensive, but it's also easier to get, and it covers more. So I think a lot of the questions around how to get it have kind of, like, the logistical, like, what do I do?

Well, there's a, like, online marketplace, and you go and you compare plans. But in terms of the monetary thing, what I encourage people to do is just think of it, you know, I think people often, they see it as this kind of special line item that is somehow different than any other given line item on your budget.

Like, a discreet 800 or 1,200 or 1,600, depending on how many people you're covering, a discreet X amount of money per month is no different than X amount of money spent on anything else, and you simply budget for it. Like, it always struck me as strange that no one ever came to me and said, but how do I budget for my mortgage?

You know, 'cause everyone expects to budget for their mortgage. No one ever said, how do I budget for groceries? Even though, you know, maybe your grocery bill is kind of, maybe you've got a family of four and your grocery bill is sort of high. But, like, if people expect to budget a given amount for a given line item, there never tend to be questions about it.

But if people aren't used to something, then it's sort of treated like this unique category. So what I would say is, don't think of it as special. Just think of it as any other category. - Yeah, so we have private health insurance. It's a high-deductible plan, and our premium is quite affordable.

And even if we have to pay the premium plus the maximum annual out-of-pocket spending, I mean, it wouldn't ruin us financially. It would be kind of sort of painful. I mean, it wouldn't derail our retirement. So it's almost that the problem solves itself. Either you have such a big budget in early retirement that you can just afford to pay that, or you actually hack the Affordable Care Act and you keep your taxable income so low that you get the ACA subsidies and pay relatively little in premium, and also your out-of-pocket maximum is very low.

And I always, it gives me heartache when I read blog posts about this. Maybe we shouldn't advertise that too much, right? If some politician or media picked that up and says we are some multimillionaires that keep their taxable income really low and then get the ACA subsidies, they were not intended for you, right?

They were intended for just ordinary, lower-middle-class families. But yeah, I mean, there's some blogs, I think Justin, Root of Good, he has really good content on how to hack that and get all sorts of other interesting means-tested benefits. I think he gets his cable TV really cheap. I mean, he's a multimillionaire, but he's watching free cable television, basically.

And so there are ways to hack that. I don't think it's as much of a headache as some people want to make it. - Yeah, I would agree that the ACA is not as much as a headache as people think, but remember that it is state-specific and to an extent, county-specific.

So if you're talking to someone that has a family of five in the state of California, that is very different from a single person like me that lives in the state of Ohio. So do your own research. You don't even have to sign up for an account, but it's only income-based, not assets.

So that's just the rules right now. You can call it a hack if you want. But I always like to make the point that this whole question or dilemma about health insurance when it's not tied to a job, again, I worked for the same company for 21 years, and I was used to that health insurance through my job.

But the FHIR community isn't unique in trying to solve that problem. You've got self-employed people. You've got small business owners. You've got solopreneurs. All of those people have had to solve this problem for a long time. So either talk to them or realize that there are plenty of options.

Some people I know have chosen to go with a health-share ministry. That's not really health insurance, but it's an alternative. If you're going back to school, that's an option. I had a list of seven different things I considered for health insurance once I decoupled from my job. So there are a lot of options, but every single article I've seen for the last 10 years that talk about somebody that retired early, I still hear the same thing.

But what do they do about health insurance? So it's just still something that people just can't grasp because in the US, it's so closely tied to our job. - Yeah, I don't have a lot to add except to say that for 99.5% of people, it's either gonna be the ACA or some form of insurance broker with average rates.

Yes, there are people who try to gamify it with health-sharing ministries, farm insurance, expat insurance, going back to school. I mean, there's all sorts of little ways you can try to gamify it if you want, which generally don't work for most people. But there are some way if that really gets you excited, go for it, but otherwise, it's gonna be ACA or private insurance broker.

- Great, thanks for that. So picking up on the spousal comment earlier, even if not in your own relationships from your fire work, you've gathered a ton of insights from others. What would you share for folks who are disconnected with their spouse or partner in terms of the pursuit of fire?

- Yeah. I would say that that is a microcosm of being disconnected in your values. So the core conversation that you need to have is not about fire, but rather about the alignment of your values and the alignment of the direction that your shared lives are taking. And once those come into alignment, then fire can be a part of that, may or may not be a part of that.

But the values and the direction in which you're moving, that's the fundamental underlying conversation. - Yeah, so my wife has been on board with this whole fire idea for as long as we know each other. So I mean, she was in the loop about what we were planning to do, and she was looking forward to that.

So I don't think there was any concern. After we fired, we sold our condo and we traveled for seven months, sometimes in a cruise ship cabin, as I think it's 168 square feet. It was just three people, my wife, my daughter, and I really on constrained spaces. And we didn't hate each other afterwards.

So it was a good sign. It's not that I had much doubt about it, but in the back of your mind, it could have been a little bit of doubt there. But yeah, I mean, it's obviously, the reason why you're together is you probably have the same values and the same plan.

So my wife was on board. There were some people where, I mean, when we announced that we fired, so the wife and the husband, right? The wife talked to my wife and the husband talked to me, and they both independently told us that we couldn't do what you do.

I mean, I want to be at the office for 12 hours a day. I mean, I couldn't stand being at home for that long. And then the wife said the same thing. I'm glad that my husband goes to work 12 hours because I need to do stuff at home and I can't have him in my hair.

And amazingly, after COVID, they're still married. So I think it worked out even for them when they were at home together. But yeah, I mean, I think if your wife is on board and on board early on, but of course it could create some friction, right? Where somebody finds out about fire and is really excited about it, what if your spouse is not?

So that would be a problem. I mean, in the case of my wife and me, we have been talking about this kind of stuff from way early, from when we started dating until we got married and through marriage and then in retirement. So we were on the same page.

- Yeah, most of the people that I've talked to that do have a partner or a spouse is really more about talking about what you want your life to look like. If you're not going to work every day, do you want to see each other every day? And so you both have to kind of get to the place of what you want your life to look like and then the finances kind of come next.

Because we're emotional creatures, how do you feel and things like that. And I kind of use the analogy like, so credit scores for spouses. If you're going to get a mortgage and one person has a 650 credit score and somebody has an 800, guess what your rate is gonna be based on?

The lowest credit score. So you have to, whatever the other person wants, whatever, I guess the lowest barrier to entry, that's gonna be what you have to end up doing. You have to somehow agree on that. You don't both have to necessarily even retire at the same time, but you both have to come to an agreement and you're only gonna be able to do what the lesser of what the other person wants to do.

- I mean, I think we have two problems here. One is there's a misnomer. I mean, someone may want to fire, may not want to fire, but everyone wants financial freedom. So I think we need to reframe this as everybody wants financial freedom. You and your spouse are both gonna want financial freedom.

So I think it's much safer to stick with that as opposed to fire, which maybe one spouse wants and one spouse doesn't. The other issue is information asymmetry. So typically I'm a man and this tends to be a man in a relationship, not always, but tends to be, is the man and women are going to run a marathon together and the guy starts two hours early and then expects his wife to finish at the same time he does.

Usually the partner who's really interested in fire has been reading fire blogs, listening to fire podcasts and reading fire books for months, sometimes even years before they've even brought it up to the spouse. And then to imagine that all of a sudden you're going to introduce it to them and they're gonna get on board and be caught up to you within weeks or months is just not reasonable.

And so I think a lot of these people who are finding this information asymmetry and they're finding one really wants to push forward with this plan and the other doesn't is that the person who's ahead needs to stop and slow down and let their spouse catch up with them.

- Great, thank you. So consolidating two different audience questions, post-FI, what is your percentage asset allocation and dollar-wise annual spend to the extent you're comfortable sharing? - Well, I mean, so for me, I have not stopped working. In fact, I work now more than I worked when I was pre-FI.

So, but my asset allocation, I'd say half of my net worth is in like, half of my net worth is in equities, the other half is in real estate. Within my investable portfolio, I have a barbell allocation, so I'm equities and cash. I don't have any bonds. And then as far as my equities go, I have a mix of just total stock market and small caps.

- Sorry, can you elaborate on why no bonds? - I guess I see the rental property portion of my portfolio as the essentially equivalent to the fixed income portion of my portfolio. So rental properties provide me with an income stream, which I just reinvest. And yeah, and then the equities are the equities.

And then of course, they're counterbalanced by the cash allocation. Yeah, we have about a little bit over 10% in real estate. And then the financial assets is about 75, 25. So 75% stocks, 25% bonds or bond-like, I would call it. And so I also do a little bit of option trading.

So, but that's on top of the existing portfolios. I don't have to take anything out to do option trading. So that's on margin. That's about, in a taxable account, that's about 40% of my portfolio. And yeah, so spending is, so we, our annual needs are somewhere in the six figures, on the low six figures.

So just a little bit above 100K, I guess. And that also includes while paying for taxes. And, but so that's covered in that too. And yeah, so that's our financials. - And actually, annual spend was part of the question. - I honestly have no idea. Like, don't really know.

I don't keep a budget. I'm a fan of what I call the anti-budget, which is just, and this is not for everyone. This is just me. Just make, set a savings goal. Make sure that you are siphoning enough to savings that you're matching your savings goal. And then everything else is yours to spend.

And I just keep a big enough buffer in my checking account that I know that I've got more cash than I need. And so I don't really have to think about it or worry about it. So I have no idea what I spend. - So for me, well, this is the first time I'm hanging out with Paula.

We got way more in common than I thought. So I hope it's not blasphemy, but I don't have any bonds either. I believe in fixed income. I just don't like bonds being that. I think someone might've talked about it earlier, where I'm more likely to do, like right now how you use savings accounts are pretty good.

I bonds, I have a little bit of that, but no bond funds. I lean growth. So I do Vanguard and I prefer a Vanguard growth index fund versus like a total stock market or S&P 500. I do have a single stock portfolio. I think I always will. I just nerd out on researching great companies.

And that's just something that I enjoy doing. Let's see, that's my allocation. Oh, so my spending is very close to what I spent when I was working between like 40 and 45,000. I was saving, I had about a 40% savings rate. So I just no longer have the savings rate and I've been retired for five years.

Every year looked different. So there were some years where I had to pull off not even 4% really. And there was one year where I did have enough income where I didn't have to pull off anything at all. But these were passion projects, things I enjoy doing. So I'm not quite ready to say I'm under retired because I'm not consistently trying to do the hustle or work anybody's full-time or even part-time job.

So that's kind of what my post-FI life looks like. - You did. - All right, so I would say roughly I am 90% equities and 10% a mix of bonds, real estate, and cash. I plan to continue that even after my wife stops working, which is gonna be next year because I'm not really worried about sequence of returns risk 'cause I'm always gonna make some money.

So if I make a third or a fourth of what I used to make doing things I love, I'm gonna cash out those equities and be happy even if the market's down. I don't care because my staple draw rate's gonna be probably less than 3, less than 2.5, just by the fact that I'm making some money.

As for how much I spend a year, I'm not going to give you a number, but I wanna, you know, what do you think I spend? Take a second and think of that. What do you think I spend a year? All right, multiply it by three and it's probably more accurate.

(audience laughing) - Can I tack on one other quick thing that didn't come up, that doesn't come up much is social security. I personally did not include it at all in my FIRE number and my FIRE plans, and most FIRE people don't. So once I retired and I cleared the cobwebs out of my head, I wanted to do my own research and see the viability of social security, and I learned a lot.

So even if I decide to take my social security at 62, I'm still at $2,500 a month adjusted for inflation for the rest of my life. So that is what I consider my backstop if any of this fails. So I think that fails to get mentioned sometimes. - Excellent.

So it seems we're at time, but we have two more audience questions that I think you guys will provide profound insights to. So I'm gonna squeeze them in. I'm gonna ask them both at once, answer them to the extent for each, as you feel we can squeeze in the last few seconds.

So one, lessons learned from a financial mistake you made, and then how to begin the pursuit of FI as a late starter. - Okay, I'd say the biggest financial mistake that I made was in my 20s, I hyper-focused on frugality. And it was because, as you said at the beginning of this, my first job out of college, I made $21,000 a year.

That was in 2005 dollars. So you can adjust it for inflation. My most amount of money that I ever made working for somebody else was $31,000 a year. That was in 2008. So adjust that for inflation. That's the most I ever made as a W-2 employee for someone else.

Because of that, I lacked the confidence to believe that I could make money. And so I was obsessed with just penny, like ridiculous penny pinching. I was completely focused on the, like live on as little as possible side of the equation. Because I lacked the confidence to understand that I could make more, particularly given that I just had no aptitude for STEM.

And I was like, well, if I'm not in a STEM profession, then how can I ever make money? And so that kind of negative self-talk and those limiting beliefs and those limiting ideas, that was my 20s. And that was probably the compounding effect of not focusing on making more, has compounding reverberations for the rest of my life.

What was the second question? - Starting FI as a late starter. - Starting FI as a late starter. I would, first, I wouldn't think of yourself as a late starter. My dad did not open his first retirement account until he was 50, five zero, 50. He came to the United States in his late 30s.

He got his, he went into a PhD program. He got his first job at 41, making U.S. dollars. Opened his first retirement account at 50. He's now 83 years old. You know, like he had a good 25 years to like buy a home and buy his first car and raise me.

And save for retirement. So even if you're 50 or 55, don't think of yourself as late. That's a limiting idea because life is long. Like if you're planning on living to 100, you know, you're like 50%, 55% of the way through. You know, you've got a lot of time left.

- Let me answer the second one first. So the biggest objection to even getting started to investing is that people always say, well, the market is really expensive right now. So why do I even start now? And my personal experience has been, I started investing, first job out of grad school, started working in Atlanta in 2000, right at the peak of the dot-com crisis.

I increased my salary going to the private sector in 2008. Again, right around the market peak. And then each time I either started investing or I increased my investing, it was right around the time, the market peak, and you had the horrible recession and bear market around the corner.

And people ask me, isn't that particularly bad timing? I said, no, it's great timing 'cause you get the dollar cost averaging through the trough. So I always tell people, I mean, don't try to time when you start. I mean, the time to invest was yesterday or last year or 10 years ago.

So you might as well do it right now. Don't try to time that. When you start is a lot less important for savers than for retirees. Because I'm gonna be on another panel and there I'm gonna preach. We have to be careful if you retire at the market peak.

That makes it more dangerous in terms of sequence of return risk. Sequence of return risk, the flip side of that is dollar cost averaging for savers. So if you start saving, don't worry about when you start saving. If the market is up, write the momentum. If the market is down, well, then you do the J.L.

Collins thing. Oh, the market is down, you can buy stocks at a discount. Either way is a good time to invest and to start investing. And don't get discouraged by that. It's the bigger mistake to not start investing than to start investing at the wrong time. And yeah, I mean, a mistake.

I mean, obviously I had some youthful sins, spending and wasting money on durable goods that obviously are not that durable. They just depreciate. And so when I was young, but by the way, at that time, I thought I had a high savings rate. I thought I wore 20 to 25% is much higher than the U.S.

average. But then maybe if I had found the FIRE community a little bit earlier, I would have done that a little bit better. But anyways, I still retired at a pretty young age. Either way. - Thanks. And Jackie and Jordan, speed round. - Yeah, speed round. Okay, so my biggest mistake was probably, I didn't have enough in a brokerage account.

I should have, I had like a 10 or 15 year bridge. So I wish I would have had that. So I wouldn't be touching any of my Roth that you want to grow much longer. And as far as getting a late start, I think it's really a state of mind.

And that's the main thing. People are hard on themselves. You know, they wanna beat themselves up. And there's plenty of reasons why the every average American or the average person is a late starter. So it's just sort of forgiving yourself, acknowledging why you might've got a late start and just start.

- I think the topic for a podcast. - Yeah. - Biggest mistake I made was I outsourced my finances to a financial advisor because I was too busy being a doctor. And I think everyone should understand their finances, whether they have an advisor or not. And that was something that I really paid for in the end.

And I'm so glad I do it now. As for people who think they're starting late, I think the easiest, most straightforward thing to do is there is a podcast by Jackie Kosky and Bill Young called Catching Up to Fi. And I think if you go there, you will learn a lot of stuff.

- Fantastic. Thank you. Let's have a hand for this panel. (audience applauding) (audience cheering)