friends on FIRE: Recent Episodes
Maggie Tucker, Mike O'Leary
🎤On a mission to get friends to talk about money 🔥Sharing our FIRE journeys, personal finance advice, and frugal tips Hosted by 2 Friends on FIRE - Mike + Maggie Leave a voicemail or text us at: 404-981-3370
the friends on FIRE podcast retired about 312 days ago, and Maggie started a new podcast called Inside Out Money with a rotating set of co-hosts. Inside Out Money is about to launch their 50th episode, and in anticipation of that we're sharing one of our top 10 episodes so far - Episode #24 with Maggie and Greg discussing the surprising truth of early retirement and how they're feeling 500 days into early retirement.
Maggie shares the trailer to her new podcast Inside Out Money, which is now available wherever you listen to podcasts.
Visit the Inside Out Money website to learn more, or find it wherever you listen to podcasts.
This week is our final friends on FIRE episode. We share our memories, fun stats, and closing thoughts as we wrap up what has been an amazing experience for both of us. Thank you to everyone who has listened to and supported friends on FIRE over the last 200 episodes!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In our Q&A, we cover topics such as passion projects versus getting paid for work, sharing our net worth, mechanics of withdrawing money after retirement, when Mike is going to retire from work, prepping finances for having kids, finances for newlyweds and joint accounts, talking to your adult children about money, FedNow, Mike’s favorite soap scent, and more!
Show References:* Friends on FIRE podcast #190 - The financial mechanics of early retirement * 2023 Financial Checklist (scroll to bottom of page) * Friends on FIRE podcast #034 - Split or Combined Finances
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In our Q&A, we cover topics such as travel hacking updates, friends on FIRE transition, transitioning investments from a financial planner to a new brokerage account, Greg’s Tesla story update, how to talk to your adult kids about money, and expensive wedding-related activities.
Show References:
- Book: The Psychology of Money
- Friends on FIRE etsy store
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
The fiends on FIRE podcast shares a BIG announcement, and a special request for all of our listeners.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
No notes this week! We hope you enjoy the episode.
Show References:* Article: There’s a quicker, cheaper way to go to college, but fewer students are trying it
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This is part two of our discussion in episode 192 on toxic career pressure. In the last discussion, we talked about the benefits of jobs with progression and “careers” and the downsides. Next, we share some advice on how to manage those pressures and find happiness where you are in your job:
- Work to eliminate the need for financial growth.
- Experiment with your friends and family to see how much they care about your professional accomplishments.
- Find satisfaction in the tasks.
- Go the opposite way from sacrifices for your career and seek more flexibility.
- Surround yourself with like-minded people.
- Stop comparing yourself to others.
- Explore activities outside of work where you can find validation, praise, and enjoyment.
- Create a vision for your whole life and figure out the role work should play in that.
Top 3 Takeaways:
- Everybody goes through this, and having strong feelings of insecurity and doubt is normal.
- Decide if the race to the top is a race you’re genuinely interested in, and if not, step off the track.
- Your job doesn’t define you. The people who care about you will remain there no matter your title.
Show References:
- friends on FIRE podcast #192 - How to let go of toxic career pressure and be happier at work – Part 1
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We explain what happened this last couple of weeks with Silicon Valley Bank and Signature banks collapsing. We discuss how it reminds us of 2008 and what’s different this time. And we discuss how and why it happened and what it might mean for you.
Show References:
- friends on FIRE podcast - #033 - Mike Explains the Economy
- friends on FIRE podcast - #173 - Article: 7 ways a recession could be good for you financially
- friends on FIRE podcast - #180 - Article: Raising the alarm on the US economy
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Having a “career” and a job with progression is, in many ways, a great privilege. You’re paid to learn new skills and master them, make friends, influence decisions, and grow as a person. And you’re paid for it, sometimes very well. But for many people who work in competitive hierarchical organizations, it’s easy to find yourself wanting things that cause anxiety and depression; and we don’t even realize why. We go along with the narrative that more is better, that titles are what we want, and that we need to sacrifice pieces of ourselves to get there. If you’ve ever wondered what it’s all for, this episode is for you.
It can be a good thing to have aspirations and to grow. You should absolutely spend part of your life growing and spending your time doing something you feel good about. What we are talking about, though, is when we embark on a journey that isn’t what we actually want. Some people might really want this out of life, and that’s great. Knowing what you want and being happy is a rare gift. Many more people think they want it, but find out too late in life that it didn’t really matter to them.
You are not your job. And your job doesn’t determine your value as a person.
- Organizations of all complexities need hierarchies. That’s how work is managed with structure.
- In theory, the more challenging the job or, the more value it brings, the more it gets paid. But that’s not really how it works in practice with corporations.
- Hierarchies in both title and compensation are also social cues: how much respect someone is owed, how dedicated they are, and how important their superiors believe they are.
And we go through life thinking this stuff is really important because of a few factors:
- Where does the messaging come from? Ask yourself who is telling you that the better title is important. It’s the executives.
- Why does this messaging exist: two reasons, the first being the ego of the people at the top, but more importantly, it creates obedience to the system.
- Companies need a pipeline of people to have continued operations, so they need people to want those things. It’s not for you, it’s for the shareholders.
- It gives companies power because when they have something you want, they can get more of you in exchange. You will sacrifice more for it.
- All of this creates a reality for people where their self-worth and happiness are inextricably linked to their career success.
Let’s take a step back, though:
- When we look up an organization, they’re all just people. Some are happy, some are miserable. Some are really smart, some aren’t. Some started from nothing, some got everything handed to them. They’re just normal people.
- For those of you who’ve progressed, are you happier now? What are you happier with, and what are you less happy with?
- Do your closest friends and family care more or less about you because of your title?
- Have you had to sacrifice something really important, and was that trade-off worth it in retrospect?
- Are the people who held higher roles still admired now that they’re gone?
- Have you ever been to a funeral where someone talked about their career accomplishments?
This affects everybody to some degree.
- We want what other people have
- We want to be treated fairly
- We want to be recognized and appreciated
- We want our sacrifices to mean something
Top 3 Takeaways:
- Careers and progress can be meaningful ways to learn skills, make relationships and grow as a person.
- Understand, though, if it’s really you that wants this or if you are reacting to social pressure.
- Listen to our next episode if you’re struggling with this pressure to hear our advice.
Maggie’s top learnings from spending a year researching, signing up for, and using ACA marketplace insurance:
- Plan ahead, this takes time and research. We discuss how you can price out and see the different plans, how the number and types of plans are quite complicated, some tips regarding the application process, and whether or not you need to work with a broker or rep.
- Understand the levels of plans. There are bronze, silver, gold, and platinum plans, and they are explained here.
- Understand how subsidies work, as they can be quite generous if you’re not working or on a low income. We explain how the subsidies work, how you can estimate your AGI (adjusted gross income), what happens if you misestimate your AGI, and how you can proactively manage your AGI.
- Understand how cost-sharing reductions work. The cost-sharing reductions are clutch and only available on the silver plans.
- You’re likely going to need to change doctors and maybe even adjust medications. This is OK. A lot of things are going to change for you in early retirement, and in the grand scheme of things, these are doable changes. We recommend consulting with existing doctors and being very detailed oriented about which doctors and medications are covered in which plans.
- Fight for your rights and ask questions and double-triple-check! If the marketplace says a doctor is covered and the doctor says they aren’t, do more research on both ends.
We wrap up this episode by sharing what Maggie and Greg are paying for 2023 insurance premiums.
Top 3 Takeaways:
- Your options for medical insurance are not limited to employer-sponsored plans. Insurance on the marketplace can be quite affordable if you’re truly retired and/or living on a lower income.
- Do your research and plan ahead.
- Learn about and understand the subsidies and cost-sharing reductions. This is what makes marketplace insurance affordable.
Show References:
- friends on FIRE podcast #118 - It’s benefits season! So how do you pick the right ones?
- friends on FIRE podcast #139 - Medical insurance in early retirement (part 3 of 5)
- friends on FIRE podcast #128 - Creative ways to save on medical expenses
- A one-page guide to the Marketplace
- Learn more about healthcare.govs plan categories
- Shop Healthcare.gov - See plans + prices
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
A reminder of how early retirement works:
- You know your math. You know what it costs to live for a year, your net worth, and other key future financial needs.
- You save up enough money to fund the rest of your life. You really need compound interest at work to do this effectively. We talk through the 4% rule or 25X rule, end-of-life planning spreadsheet and concept, and more.
- You keep your cost of living low. This might include getting debt-free.
The different levers that could be available for income during early retirement:
- Cash
- Deferred compensation programs
- Investment income - selling off investments, dividends, etc.
- Passive income/side hustles - rental property income, a new hustle you start, selling off a rental property
- HSAs
- More advanced techniques to get to your retirement funds early - e.g. Roth IRA 5-year ladder conversions
- Part-time or full-time work - You can always go back to work! This might be your backup plan, your parachute cord, or perhaps a new passion you discover and are excited to do.
- Generally speaking, though, you need to make sure that you’ll have enough cash every year to cover your living expenses until you’re 59.6 and your retirement funds kick-in.
How you plan your withdrawal strategy for early retirement:
- It depends is the real answer. It’s going to be different for everyone based on the reality of their portfolio and their goals.
- We share high-level how Maggie and Greg are funding their early retirement.
- What should you do? Have a plan, understand the levers, and consult with someone if needed.
- To early retire, meaning before 59.5 in our definition, you’ll need to have income + safe withdrawals of taxable accounts. So if you need $100K a year, you need to find a way to generate that cash. Having passive or some active income makes things infinitely easier and less risk. You’ll need to plot it out though: If I have $1M of taxable assets and that grows at 5% a year, if I withdrawn $110K a year for 10 years, you’d basically eat up most of that and then could start using your retirement accounts.
- How specifically do I start withdrawing money? We discuss short and long-term capital gains and other factors you’d want to consider. We also briefly discuss how these withdrawal strategies change for 60+.
Top 3 Takeaways:
- There are a bunch of different ways to fund and structure early retirement.
- Make a general plan for how you plan to do yours.
- Understand the principles Know that you’ll need to adjust and pivot your plan over time.
References:
- Friends on FIRE podcast #004 - Spending Less – Pillar #1
- Friends on FIRE podcast #005 - Growing Wealth – Pillar #2
- Friends on FIRE podcast #006 - Finding Freedom – Pillar #3
- Mike’s Book: Your New Relationship with Money
- Friends on FIRE podcast #112 - How to know if you are FI
- Friends on FIRE podcast #096 - Freedom is the ultimate financial goal, not retirement
- Friends on FIRE podcast #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
- Friends on FIRE podcast #138 - How a family of 5 can afford to retire at 41 and 43 (part 2 of 5)
- https://cfiresim.com/
- Social Security Administration website
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We’ve all been there before: a shiny new toy breaks after a month and the store won’t take it back. Or your credit card is charged the wrong amount, and the company won’t or can’t fix it. In most cases, these problems can be easily resolved with a few basic tactics. And in almost every case, you have at your disposal additional tools to make things right.
Overarching advice:
- Purchase from reputable companies. (e.g. Amazon, REI, Patagonia)
- Save your paperwork.
- Do your research and assume there’s a resolution.
- Be respectful but clear.
- Save your communications with vendors.
- Build your case and be prepared to provide the evidence.
What can you do?
- Initiate a return. Many online retailers have efficient return processes. Most even come with a return label with your product! The easiest thing to do is just package it up and send it back.
- Request service under the manufacturer’s warranty. Almost everything comes with some sort of warranty. Save the details of this coverage, and chances are that your issue can be fixed ASAP.
- Call customer service or visit the store. Be nice. Dealing with customers is a HARD job. Show them some respect, and they’ll likely show it to you in return. If all you want is a credit of some sort, the same applies to discussing a broken product.
- Take to social media. Because of the public nature of social media, many companies staff their online service teams differently. Depending on the brand’s strategy, you could either get enhanced support, such as real-time response and dedicated manager-level care agents who are empowered to resolve issues. You might also get a bot, which is not helpful. A company’s strategy here can tell you a lot about how much they value you as a customer.
- Dispute the charge on your credit card. In many cases, you can do this online without interacting with an agent. Click on the charge, click through the dispute flow, and provide a little information. Make the credit card company do the work here!
- File an insurance claim with your credit card provider. Not all credit cards offer this, but higher-end ones will usually partner with a 3rd party to provide extended warranty and insurance coverage.
- File a complaint with the Better Business Bureau. If none of the above tactics work, file a complaint with the BBB. It’s a super easy process and is done completely online.
Top 3 takeaways:
- Companies usually try to do the right thing, but when they don’t, get what you deserve!
- Behind the companies are still people, and you should always treat them with respect.
- Leverage all the tools at your disposal to make things right, including social media, credit cards, and customer service.
Show References:
- Amazon ice packs Maggie is so excited about
- Maggie’s favorite Patagonia underwear
- Better Business Bureau - File a complaint
- Friends on FIRE podcast #043 - Know and use your credit card benefits
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie’s top 10 product’s she loves:
- Bose noise-canceling headphones
- Airpod pros
- Apple laptop and iphone and how they seamlessly work together.
- 1password password management tool
- My cast iron pan (always pan vs. lodge cast iron pan)
- Instant pot and air fryer (they are a power couple, so they go on the list as one item)
- Library card
- Weighted blanket
- Scanner
- Tesla
Mike’s top 10 product’s he loves:
Mike doesn’t officially have a list, but if he did, it would include his computer, iphone, some sort of a cloud storage solution, an air fryer, and maybe his library card and some power tools.
Show References:
- Friends on FIRE podcast #117 - The ultimate paper-free way to control your financial life
- Friends on FIRE episode #035 - 10 F.I.R.E. Extinguishers + How to avoid them
- Friends on FIRE episode #158 - Control your lifestyle to find financial freedom
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We get the most questions/issues brought up about spouses and partners not being aligned with money. When you’re aligned, it’s awesome. When you’re not, it can be really tough. In episode 109, we talked about why and how to talk to your partner about money, but there’s a whole deeper level and approach to really being open and vulnerable with your partner financially. One term for it is financial intimacy, and we like this term. Finance can be a very intimate and vulnerable topic for many people, and it’s why many people don’t want to talk about it.
What is financial intimacy?
Financial intimacy refers to the level of trust and comfort that couples have when discussing and managing their finances together. It's a measure of how open and honest partners are with each other about their financial goals, habits, and challenges. Couples with high financial intimacy are able to talk openly and honestly about money, share their financial goals and dreams, and work together to achieve them. They have a shared understanding of their current financial situation, including income, expenses, debt, and savings, and are able to make decisions together that align with their shared values and priorities. On the other hand, a couple with low financial intimacy may have difficulty discussing money, may have different views on spending and saving, and may not have a clear understanding of their shared financial situation. This can lead to conflicts, mistrust, and financial stress. Financial intimacy is important because it can help couples build trust, reduce stress, and work together to achieve their financial goals.
Financial intimacy does not come naturally to everyone, it takes time and effort to develop it. Every relationship dynamic is unique, but here are some general tips and ideas to improve your financial intimacy:
- Have a positive attitude and focus on a shared vision for the future. Remember that talking about money can be stressful, but approach the conversation with a positive attitude and focus on the future, and how you can achieve your financial goals together. Discuss your financial goals and dreams and work together to create a plan to achieve them. What is more romantic than planning for your future together?
- Set aside regular times to talk about money. Avoid bringing up financial issues when one of you is already stressed or tired, instead, schedule a specific time when both of you are calm and can give the conversation your full attention. This can be weekly, monthly, or whatever schedule works best for you. And consider making this time fun, perhaps it’s a financial date night once a month or even a romantic take on money. For example, we light some candles and open up the spreadsheets before we get between the sheets. I only spread my sheets for someone who I can review a good spreadsheet with.
- Discuss your concerns and priorities. Identify what you see as the main financial problems or challenges you're facing and discuss how you both feel about them.
- Listen actively and try to understand your partner's perspective. Avoid criticism or blame, and instead, focus on finding solutions together. Listen to your partner's concerns and perspectives and try to understand where they are coming from.
- Be vulnerable and dig deep to develop open and honest communication. Share your feelings and thoughts about money, and be willing to listen to your partner's thoughts and feelings. This vulnerability is an important part of intimacy. The messiness of a discussion is how we make connections with your partner.
- Establish trust and accountability. Be honest about your actions, keep each other in the loop, and hold each other accountable for achieving your financial goals.
- Share responsibilities. Establish clear roles and responsibilities for managing the household finances and stick to them.
- Be open to compromise. Understand that you may not always agree on everything, but be willing to compromise and find solutions that work for both of you.
- Seek professional help if needed. If you're struggling to improve your financial intimacy, consider working with a financial planner or therapist to help you navigate the process.
- Start early. Test the waters while you’re dating early in a relationship, and then bail if it’s clear it’s not possible.
Financial intimacy is an evolving process, and it's important to continue to work on it over time. And it’s not just about money; it's also about trust, respect, and open communication. By building trust and respect in your relationship, you'll be able to have more open and honest conversations about money, which will ultimately help you to build a more financially intimate relationship.
Money can bring you closer together in your relationships. Money issues are never just about money, they are always stemming from something else. If you can’t get to that something else, then you’re not reaching a level of true intimacy with your partner.
Top 3 takeaways:
- Financial intimacy is important. Money can bring you closer together in your relationships. It may be a tough or awkward path for you, but it’s important.
- As your relationship grows, strive to mirror that growth in your financial intimacy.
- Set a financial date with your partner, even if it’s not your first financial discussion.
Show References:
- Friends on FIRE episode #23 - Happiness Sex and Money
- Friends on FIRE episode #34 - Split of combined finances
- Friends on FIRE episode #90 - Why you don’t need a financial planner
- Friends on FIRE episode #101 - Friends don’t talk about money, but they should
- Friends on FIRE episode #109 - Talking to your partner about money
- Money on the Table series on YouTube
- Playing with FIRE book
- Playing with FIRE Documentary
Episode Summary:
In this week’s episode, we share how to protect your child’s financial identity and create a strong credit store to set them up well for the future. We dig into why this matters and the specific steps and recommendations for what to do.
Episode Notes:
Let’s start with the typical protections: credit freezes and credit monitoring. Monitoring is like having a security camera in your house, while freezes are like having a wall around your house.
So why not just freeze a minor’s credit? Not that simple. You need a report to start a freeze. And the only way to have a report is to open a line of credit. See the problem? But there’s a way to protect your child and build a long credit history.
- Step 1: Freeze your child’s reports at Transunion, Equifax, and Experian. Equifax and Experian now how a specific form for a minor’s freeze. For Transunion, you’ll need to write a letter.
- Step 2: Check for any issues: If your child is over the age of 13, it's possible to search for a credit history for anyone over the age of 13 using the AnnualCreditReport.com. If your child is under the age of 13, parents must contact each bureau by mail and provide identity documentation.
- Step 3: Assuming everything goes well, add your child as an authorized user to every credit card you have, assuming the cards allow it. This sometimes, but not always, triggers the credit bureau to report history on that social.
- Step 4: Pay your bills! Don’t ruin it for your child by messing up your credit score and the kids.
Let this above approach ride for 18 years and your child will have protected credit reports and a strong history of credit. This can help them with student loans, new credit cards, opening a bank account, renting, buying or leasing a car, or buying a home. All of these things can also become very difficult if the child was the victim of identity theft.
A few additional things you can and should do to protect the identity of your child:
- Keep their Social Security number safe.
- Educate them about online activity and monitor it.
- Don’t share personal info unless absolutely necessary.
- Shred everything.
What else can you do to build credit for a child?
- Co-sign a small loan with them.
- Open their own credit card if they're old enough.
- Open a credit builder card.
Top 3 takeaways:
- Identity theft is a big problem for kids and can go unnoticed for years.
- It’s easy to protect their credit report by placing a freeze with the credit bureaus.
- Adding kids to your lines of credit can help them build strong scores.
Show references:
- Experian Form: Requesting a Minor's Credit Report, Fraud Alert or Security Freeze
- Equifax Form: Minor Freeze Request Form
- Transunion Freeze Page
- Friends on FIRE podcast #043 - Know and use your credit card benefits
- Friends on FIRE podcast #044 - Credit Scores + Do they matter?
- Friends on FIRE podcast #048 - Is Credit Monitoring worth it?
- Friends on FIRE podcast #134 - Travel hacking our way to 1 million points in 2022
- Javeline study: Child identify fraud
- Credit Building Cards
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Why boundaries matter:
- Boundaries create future freedom and capacity for unexpected things, also known as margin.
- You need to get good at saying no to protect your time and your money.
- Setting boundaries is a form of self-care.
- Setting boundaries is just setting expectations; you need to set expectations so others will have clear guidelines on how you’d like to be treated.
- Not having boundaries can lead to resentment, burnout, feeling taken advantage of, feeling taken for granted, hurt, or anger.
- Not having boundaries can make you feel responsible for others’ happiness over your happiness. However, there are times when being “selfish” is quite important.
- Setting boundaries is taking responsibility for your own life. Or, in the case of money, your finances!
Setting boundaries with your time:
- Boundaries are just setting expectations. You often may need to say NO to things to set those expectations.
- Setting boundaries is about taking yourself and your time seriously enough to give it a voice in your life and advocate for yourself.
- Setting boundaries is having integrity. If I say yes to something, I want to show up with my best self, and I can’t do that on everything.
- We often make commitments based on some hopefully future version of ourselves that may not exist. Consider the future when deciding what to commit to, and be realistic. Remember what it feels like to be overcommitted and think about that feeling when deciding something.
- Flip the script and reframe things. Don’t feel guilty about setting boundaries and taking the freedoms you need to be happy and balanced in life; feel guilty for not doing this.
- Remember, every time you say yes to someone else you are re saying no to your kids or your other priorities.
- Know your why.
- Set time limits or constraints.
- It’s either a hell yes or a no way. Limit the in-betweens. Though if/when it’s appropriate, you could present some alternatives; e.g., I can’t do that, but here’s what I can do instead.
- You can say no after you’ve already said yes.
- Leverage an accountability partner or friend. Run things by them in advance. I often use my husband Greg for this.
- Remember that you must put the oxygen mask on yourself first before you can help other people. Your oxygen mask is boundaries.
- Keep a “no log.”
Setting boundaries with your money:
- Saying no to yourself and saying no to your kids.
- Mindset around what creates true happiness - it’s not stuff.
- Avoid FOMO.
- Avoid lifestyle inflation.
- Avoid trying to impress other people, aka keeping up with the Joneses.
A few final thoughts and warnings on boundaries:
- Don’t let boundaries be an excuse for being lazy or cheap.
- We need to balance freedom/self-care with the impact we have in life.
- We need to re-frame and re-shape our self-image to have the confidence to set boundaries, reframe our inner dialogue to remove guilt and judgment from the idea of setting boundaries and invest in your growth in this area to create freedom and let ourselves and others see the value we create.
Top 3 takeaways:
- Setting boundaries is a good thing; think of it as setting expectations.
- You need to get good at saying no to protect your time and your money.
- This is a journey, and be kind to yourself as you get better as this; your confidence will grow over time.
Show References:
- Friends on FIRE episode #035 - 10 F.I.R.E. Extinguishers + How to avoid them
- Friends on FIRE episode #158 - Control your lifestyle to find financial freedom
- Friends on FIRE episode #045 - Essentialism + Money
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We asked you for money etiquette discussion and situations, and you all delivered! We discuss the following etiquette questions and situations you all shared with us on Instagram:
- Someone asks you to pay for something and says they’ll pay you back, but it’s been weeks or months.
- Feeling pressure to donate money at work for numerous wedding/baby gifts.
- A shared AirBNB, and I can afford or prefer a nicer place and am willing to pay more.
- Extended family vacations. Some families can’t afford the trip. How can we best handle this? Same for friends' trips with multiple families. Is it OK for some to contribute more/less to the trip?
- Ugh, the never-ending dance of itemizing the restaurant bill or splitting it evenly??
- Splitting the bill at big group dinners when you didn't order as much as everyone else.
- Gift Giving! How to navigate wanting to give simpler gifts when another person gives expensive gifts?
- How much to spend on wedding gifts, especially when invited without a plus 1.
- Paying for your own plate at a awedding / wedding money gifts?
- What do you buy for someone that has so much more than you do?
- How to tip guys at a hotel or airport taxi stand who hail a taxi for you.
- When holiday gifts are “in budget” but don’t look like enough quantitatively?
- How to handle a friend that always asks about your finances but never shares theirs?
- Is it polite to talk about maxing out accounts if you don’t know for sure if the other person is able to? Or is knowledge power?
- Family asking to borrow money and will pay it back on payday (in a few days) then you have to chase for it.
Top 3 takeaways:
- Money can be an awkward topic for everyone. We all face situations where we need to improve our muscle of being open and honest about money with our friends and family.
- You do you!
- Be kind and honest.
Show References:
- Emily Post podcast
- Friends on FIRE episode #168 - How to ask for a raise
- Friends on FIRE episode #109 - Talking to your partner about money
- Friends TV clip “The One with Five Steaks and Eqqplant splitting Money.”
- Friends TV clip “Ross’s birthday is a little pricey.”
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Episode Summary:
In this week’s episode, we do a full-year expense review and share what each of our families spent this past year. We share our total spending for the year and break down our top spending categories, which areas we’re feeling good about, and where we’d like to improve in 2023. We also share additional reflections and financial goals as we kick off 2022.
Episode Notes:
We always find it interesting to learn what other families spend in a year, so we’re sharing what it costs our families of 4 and 5 to live for a whole year. First, we remind everyone why and how we track our expenses and some details on what’s included, and then we dig into the details.
Top 3 takeaways:
- It’s an important investment in your finances and relationships to track and review expenses with your spouse.
- There’s no perfect way to do this. You can be as detailed or as high-level as you want to be. It’s called personal finance for a reason.
- It can be fun and helpful to review and discuss this with another family.
Show references:
- Friends on FIRE episode #109 | Talking to your partner about money
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This is now our fourth year of podcasting!
Mike and Maggie discuss several topics:
- What we’ve been up to on the holiday break.
- What we’re most excited about in 2023.
- Our 2023 intentions and goals.
- How do we make these intentions stick?
Top 3 takeaways:
- Take some time to reflect on last year.
- Take some time to set some intentions for this year.
- Finally, put some practices in place to create good habits around your intentions.
References:
- 2023 Financial Checklist (scroll to bottom of page)
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This is our 181st podcast episode, and we’re very proud of consistently producing an ad-free podcast for the last three years; we haven’t missed a week! We each share our top reflections on the year and what we think of each other’s reflections. Our reflections are a mix of personal and financial topics. Mike reads Maggie a poem, and there might be more tears. We hope you enjoy the episode, thank you for another fantastic year, and we can’t wait to continue this journey with you in 2023.
Show References:
- C FIRE simulation tool
- IF poem by Rudyard Kipling
- Article: The idea of finding a career with 'purpose' is a lie and you should focus on finding tasks that you love, according to this influential researcher
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
No notes this week! We hope you enjoy the episode.
Show References:
- Michael Burry, Elon Musk, and Mark Zuckerberg are raising the alarm on the US economy. Here are 8 recession warnings from top commentators this week
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Peer pressure is all around us. There is pressure from marketers, kids, friends, complete strangers, and all around us!
What is peer pressure?
- Peer pressure, by definition, is “a feeling that one must do the same things as other people of one's age and social group to be liked or respected by them.”
- There is also active and passive peer pressure. Active is someone saying, “oh you gotta get a Tesla so you can be my bessie with a Tessie.” Passive is me seeing you have a Tesla and then really wanting one.
- I believe there is positive and negative peer pressure, otherwise known as good and bad influences.
- Keeping up with the Joneses is peer pressure at its finest. You’re doing it for them, not for you.
The good kind of peer pressure:
- We all want to feel accepted and valued by others. It takes courage and confidence to buck the trend. And some peer pressure can be good! Let’s talk about that for a moment.
- The positive effects of peer pressure can include a sense of belonging and support, increased self-confidence, and learning new hobbies and interests. FI and FIRE are great examples of the positive effects of peer pressure.
- The whole reason and spirit of why we started this podcast were to get more friends to talk about money. Talking to your friends about money is a form of good peer pressure if you do it appropriately.
- If the peer pressure is motivating and encouraging, that’s the sweet spot! But, if it starts making you feel bad about yourself, that’s when you want to reassess things.
- More examples of the good kind of peer pressure: Felipe/Shannon sharing their expense tracking and budgets, Mike doing the same, a friend who wants to do a no-drinking month challenge with you,
What strategies can help handle negative peer pressure? And how to find more of the good kind of peer pressure and get it into your life:
- Pay attention to how you feel. Recognizing peer pressure and being able to name it is half the battle.
- Plan and communicate. Pack special snacks if you know you’re going to feel pressure to buy your kids snacks at the movie theatre with another family letting their kids buy whatever they want.
- Have a candid conversation with the person pressuring you. For example, tell them something isn’t in your budget or how it makes you feel when they talk about a particular topic.
- Make up an excuse if you have to. For example, you may find with some people; you can’t have a direct and candid discussion. You can’t change everyone; you can only control yourself.
- Set boundaries and say no when you need to. Back up a no with a positive statement. You may need to be repetitive to ensure your boundaries and no one comes across clearly.
How to find more of the good kind of peer pressure and get it into your life:
- Surround yourself with more of the people you truly want to emulate. “You are the sum of the people you surround yourself with.” Sum is the perfect word here cause it can add up quickly if you surround yourself with people focused on materialism and acquiring more and more.
- If you don’t already have that community, go out and find it! It’s online with things like Instagram, Facebook, and youtube. It’s in person with local meetup groups and events like CampFI and EconoME.
- Invest in fostering friendships with similar values and beliefs. You have to put time and energy into friendships to foster them.
- Avoid people and situations that trigger peer pressure and don’t feel right to you. Leave a situation if it feels uncomfortable.
Encouragement to stick to your values in the face of peer pressure:
- It’s hard enough for adults to do this; imagine if you’re a developing teenager. With teenagers and kids specifically, give them opportunities to earn money through an allowance and extra chores. Then, let them manage that money and the decisions themselves with guidance from you. They need boundaries set for them; it’s how they learn.
- Flip the script. Change your mindset and how you’re contextualizing and adding perspective to these situations and decisions.
- It’s all about balance and tradeoffs.
Top 3 takeaways:
- There’s good and bad peer pressure.
- Find more of the good.
- This is hard work. Don’t beat yourself up too much if you succumb to peer pressure. But continue to work hard to overcome it.
Show References:
- Friends on FIRE podcast #144 | Inflation is out of control! What is happening?
- Friends on FIRE podcast #158 | Control your lifestyle to find financial freedom
- Friends on FIRE podcast #035 | 10 F.I.R.E. Extinguishers + How to avoid them
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In October, the IRS announced that the contribution limits for several savings programs were increasing in 2023. This might not have made it onto your radar, but it’s a big deal and something you should be aware of. Federally regulating savings plans help you legally reduce your tax bill, and over time this can be a considerable amount of money.
Want to be a savings all-star in 2023? Start by maxing out the plans available to you. But let’s start with a quick refresher on tax-free and tax-deferred plans.
A tax-free program is one where you don’t pay income taxes when you withdraw. There’s a distinction though between forever tax-free like a Health Savings Account and a future tax–free Roth account where you’ve already paid income taxes on the contributions. We’ll get into that later.
A tax-deferred program means you contribute pre-tax to an account and thus reduce your taxable income. As an example, contribute $10,000, and you might save $2,500 in taxes. But when you withdraw it in retirement, you pay income taxes (hopefully lower taxes since you’re retired and have a lower income then).
2023 limits:
- 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $22,500, up from $20,500. Over 50: The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $7,500, up from $6,500.
- IRAs and Roth IRAs increased to $6,500, up from $6,000. The IRA catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost of living adjustment and remains $1,000. Remember Note that you can do both an IRA and a Roth, but the combined contributions can’t exceed the limit.
- Health Savings Accounts is $3,850 for self-only coverage, $7,750 for family coverage. Individuals 55 and over may contribute an extra $1,000 to their HSA.
What does this all mean, and what do you do?
- The main principle to understand is that you want to save on taxes when your tax rate will be highest and pay it when it is lowest. So if you are in your peak earnings, save taxes now. If you are just into the workforce, pay it now.
What should you do?
- If you want to really crush your savings goals in 2023, start by maxing out your employee plan, likely a 401k. $22,500 per person. You might need to do a little math to determine what % of your salary will contribute that amount.
- If you are eligible for a Roth IRA, max that out, but note that your income might disqualify you. $6,500 per person.
- If you can’t do a Roth, do a traditional IRA, but also note that you may not be able to deduct it. If you have an employee plan, your income may prohibit you from deducting the contribution. Also $6,500 per person.
- If you have a high deductible health insurance plan, which we recommend, max out your HSA.$3,850 per person.
That’s a lot of money and might seem out of reach, but the sooner you can max these out, the easier it will become to maintain it. Your lifestyle inflation will become based on these and you won’t need to make harder choices later.
Top 3 takeaways:
- Understanding pre-tax and post-tax savings plans is an important part of achieving your financial goals.
- Always strive to max out what the IRS allows.
- If you have aggressive financial goals in life, you’ll need aggressive savings habits, and it can start with these programs.
Show References:
- IRS website
- Friends on FIRE podcast #114 - What’s a rothIRA and do I need one?
- Friends on FIRE podcast #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
- Friends on FIRE podcast #142 - What’s your 401k invested in?
- Friends on FIRE podcast #016 - 401ks are your BFF!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Episode Summary:
In this week’s episode, we interview Jessica from The Fioneers and talk about designing a life you don’t want to retire from. Jess spends a lot of time talking, thinking, and writing about how people can use the financial freedom they are building along the way to Financial Independence (FI) to design a life they don't want to retire from. We also talk with Jess about changes she’s seen in the FIRE movement over the years, the power of community, how to leverage experimentation to build confidence, and her exciting custom campervan buildout.
Episode Notes:
Jess from the Fioneers is a full-time human being and a part-time writer and lifestyle design coach. She is a Co-Founder of The Fioneers, an AWARD-WINNING financial independence blog focused on the intersection between financial independence and lifestyle design. She also provides coaching, courses, and retreats on career discovery and lifestyle design for people who want to take unconventional paths and design lives they love. In her free time, you can find her spending as much time as possible outside, perfecting her sourdough pizza recipe, and road-tripping in her campervan.
In this discussion with Jess from the Fioneers, we cover many topics, including:
- What the Fioneers have been up to since we last had them on in Episode 42
- Jess quit her job 2+ years ago and is enjoying entrepreneurship
- Corey just quit his job and is spending six months on a sabbatical focused on burnout recovery
- Their camper van experiment and the resulting decision to spend $150K+ on a custom built-out camper van
- Their goal to be location independent
- Definition of SlowFI and CoastFI
- The difference between financial independence and financial freedom
- The shifts Jen has seen in the FIRE movement in the last few years
- The lifestyle design framework that Jess uses with her clients and that her and Corey have used themselves. What, why, and how.
- How they are approaching medical insurance as entrepreneurs
- The power of community when trying to build an extraordinary and unconventional life
- How to leverage experimentation to build your confidence and take bigger steps
Show References:
- Friends on FIRE podcast #042 - The Fioneers Interview
- The Fioneer’s website
- The Fioneer’s on Twitter and Instagram
- The Fioneer’s SlowFI Facebook Group
- Outdoorsy app
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
What is the arrival fallacy?
- The arrival fallacy is the false assumption that once you reach a goal, you will experience lasting happiness. Many people become less happy after attaining something they have been striving towards. They were happier during the journey and less at the destination.
- Dr. Tal Ben-Shahar, a Harvard-trained expert on positive psychology, created the term itself. Dr. Ben-Shahar says, “the arrival fallacy is the illusion of reaching a destination or goal and realizing that the achievement doesn’t make you as happy as you thought it would.” He then adds, “while most people can predict what might may them happy, they usually misjudge the preconceived intensity and overall duration of said happiness.”
- It makes sense that when you’re on a journey to some big audacious goal, from a big project launch to becoming a doctor to having a child to early retirement, you believe at the end of it, you’ll reach an enduring level of happiness.
- Once people arrive at a goal and realize the happiness doesn’t last, they set another bigger, better goal, constantly seeking something they believe will arrive at lasting happiness. And it doesn't. That’s the fallacy.
- People experiencing the arrival fallacy might also mask their unhappiness that increases after their goal is achieved. This concept is often called “escalation of commitment” and is a human behavior pattern where someone facing negative consequences from a decision, action, or situation continues the behavior instead of altering their course. They are escalating their commitment to some path, even as they learn it might not be the path for them.
- People mistakenly confuse happiness with reaching an achievement.
- Happiness is a lifelong journey. It’s not one achievement. It’s not one place you arrive at and then stay at. The insight here is that happiness is a journey, not a destination.
Is the arrival fallacy affecting your happiness?
- Maybe. Probably. If you’ve reached a goal and you’re not feeling continued happiness from it, then you’re likely experiencing the arrival fallacy.
- You may feel incredibly happy after achieving a big goal, and that’s awesome and hopefully the case. We don’t mean to imply that working hard towards a goal can’t create happiness. The arrival fallacy and what we want to help you avoid is the idea that achieving that big goal will create enduring happiness. It will create a short-term dopamine hit of happiness, and you need to design a life where you get those dopamine hits on an ongoing basis. Happiness is a lifelong journey, and we feel happiness through our relationships, community, and daily life efforts.
- Most of the ways you can fight the arrival fallacy involve changing your mindset. Of course, mindset is the solution to so many things in life, so we’re not surprised by this!
What can you do to combat the arrival fallacy and improve your happiness?
- Identify the core issue you believe is making you less happy or unfilled, and make sure the goal indeed corrects that.
- Do your research. Know what you’re getting into. Talk to other people.
- Adjust your expectations. Based on the research you’ve done, adjust your expectations. Go in “eyes wide open,” and stop telling yourself you’ll be so happy when xyz happens. It’s not an arrival fallacy if you know what you’re getting into and you’re not expecting immediate and lasting happiness from a career path. On the contrary, setting your expectations too high creates more unhappiness and can lead to depression and other types of malaise.
- Set smaller, more practical goals. Enjoy the efforts and journey you’re taking on the path of something versus expecting the final arrival on the path to be what creates happiness.
- Appreciate that happiness is your life journey, not the destination.
- Envision your future. Ask yourself what you’ll do after you reach a goal that will continue to make you happy?
- Create new goals. Setting goals and then starting the journey to achieve them can make you happy. But let’s bring that back full circle, as you need to understand the arrival fallacy so you can set your expectations on how you’ll feel as you accomplish these new goals.
- Things take time. Be patient.
- Handle hard better. This is a super short and inspiring talk from Duke’s women’s basketball coach Kara Lawson. She says life will “never get easier; what happens is you handle hard better. What happens if you become someone who handles hard stuff better, not someone waiting for the easy.” Understanding the arrival fallacy helps you to handle hard better.
Top 3 takeaways:
- Happiness is a journey, not a destination.
- Invest in that journey and design your life to optimize what truly makes you happy.
- Money, or early retirement, won’t magically make you happy, but it can give you the freedom to design a life filled with more of the things that do make you happy.
Show References:
- Article: Arrival Fallacy: How to be happier
- Duke Basketball Coach Kara Lawson Video: Handle Hard Better
- Book: Designing Your Life: How to Build a Well-Lived, Joyful Life
- Book: The Pathless Path: Imagining a new story for work and life
- Friends on FIRE Episode #140 - Maggie’s early retirement “bucket list” plans (part 4 of 5)
- Friends on FIRE Episode #158 - Control your lifestyle to find financial freedom
- Friends on FIRE Episode #144 - Inflation is out of control! What is happening?
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Hygge is the danish concept of coziness but with specific elements.
How to build hygge:
Warmth
- Wrapping yourself in a blanket. Sitting by a fire. Cuddling on the couch.
- What it’s not: sitting on a hot beach. Hygge is warmth when it’s cold outside.
Light
- Soft light and contrasting light with shadows. Candles, Christmas trees, soft lamps.
- What it’s not: lots of light, white light, bright light
Smell
- Rich smells of winter or sweets or baking.
- What it’s not: It can really be anything you feel adds to the mood.
Taste
- Coffee, hot chocolate, pastries
- What it’s not: Probably not a bowl of candy, but if that does it for you, go for it!
Marketers know all this stuff and will tweak advertising to create hygge settings. Just watch some ads now and see. But don’t get confused: hygge is not a new TV in your living room, even if the commercial has warmth, light, food, and family. To achieve hygge, focus on the easy essentials that don’t cost a lot!
Top 3 takeaways:
- Hygge is an amazing atmosphere for the holidays, and we recommend trying it out.
- Marketers will try to leverage your subconscious desire for hygge to encourage you to buy stuff you don’t need.
- Hygge essentials are probably already in your house, but if they’re not, they can be found inexpensively.
Show References:
- Little Book of Hygge
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We introduce Alexa Kwartin, a family law attorney in Atlanta, GA, who gives her perspective and advice on prenuptial agreements, aka prenups. We then dig into a detailed discussion on prenups with Alexa.
What is a prenup?
- A prenuptial agreement, aka prenup for short, is a legal document that two people create before marriage. It typically lists all assets and debts each person has entering into the marriage and specifies what should happen to those items if the marriage were to end. You can also have a similar document, called a postnuptial or postmarital agreement, that is entered into during the marriage.
- A prenup can help you pass separate property to children from prior marriages, clarify financial rights and responsibilities during your marriage, avoid arguments in the case of a divorce because it would specifically lay out things like alimony, and protect spouses from each other’s debts.
- We’re perhaps stating the obvious here, but both parties must agree to a prenup; you can’t have one person write up a prenup on their own.
- Each state has its own laws regarding what can and can’t be included in a prenup, which is one of many reasons why we recommend consulting with an attorney on this process.
Why prenups are a good thing, and why you shouldn’t be afraid of them:
- It’s not just for the wealthy and super-rich. Couples of more modest means, or even deep in debt, are increasingly seeing the value of prenups.
- Prenups have a bad rap, and we don’t think it’s fair.
- If you don’t have a prenup, your state’s laws will dictate what happens to your property in the case of a divorce or death. Each state’s laws vary, but they will dictate what happens to property acquired during your marriage and sometimes even property you own coming into the marriage. Marrying someone is a contract between the couple, and with that contract comes specific rights regarding what happens to your marital assets. Your spouse could take on $50K in debt without telling you, and then you get divorced, and half that debt is your accountability in many states.
- Creating a prenup allows you to decide on these things when you’re in love and in a kind and compassionate mindset. That seems fair for everyone involved. So many things can go wrong in a marriage, things you could never predict or imagine; prepare yourselves. Hope for the best, but plan for the unexpected and worst. It’s the best wedding gift you can give your love!
- It’s like free premarital counseling - you have to have financial discussions.
- Is money your concern? A prenup can save you money in the end. Best case, you have a happy marriage and never need or use the prenup. Yeah, we hope that’s how it works out for most people. And you’re willing to pay crazy amounts for rings and weddings, and none of that protects you. Worst case, you get divorced, and it’s a smoother and less expensive divorce because you already agreed to these things in advance.
- You need to make sure your prenup is done properly and on the “up and up,” or it could be judged as unfair during divorce proceedings. For example, both parties need to be represented by a lawyer, or there’s a high likelihood a judge would question its validity.
Prenup advice and tips from a family law lawyer:
- Who needs a prenup?
- Should you adjust a prenup over time if big things financially change in your marriage?
- Can you DIY a prenup, or do you need to hire a lawyer?
- Are prenups enforceable by a judge in the case of a divorce?
- What can a prenup do, and what can it not do?
- Are there any unique considerations for same-sex couples?
- What is a postnup, and when might that be needed vs. a prenup?
Top 3 takeaways:
- Everyone should at least thoughtfully consider if a prenup is right for them.
- Don’t let prenup myths and misconceptions be the reason you don’t get one.
- Consult with an attorney if you’re considering getting a prenup; it’s worth the investment in marriage and your financial future.
Show References:
- Alexa’s website: Kwartin & Levine
- Kwartin & Levine on facebook
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
No notes this week! We hope you enjoy the episode.
Show References:
- Washington Post Article: 7 ways a recession could be good for your financially
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Kids' sports have become notoriously expensive, competitive, and time-consuming. What is driving this? We first hear from our listeners. And we got so many more responses than we’ll read here.
Let’s first talk about what makes sports great:
- Health and Fitness
- Teamwork
- Practicing and growing a skill
- Potentially finding and developing expertise
- Learning to win and lose gracefully
But not everyone is having this wholesome experience. Many families can’t afford to participate, and those who can sometimes find themselves in such a competitive environment that it becomes stressful.
What to remember about the cost of kids' sports:
- This is an industry that leverages your desire to support your child.
- It can create a narrative that to be successful your child must participate in a certain way. And that way has high costs.
- Equipment can be expensive; like everything, the quality only matters to a certain degree.
- Traveling can exponentially increase your participation costs and take up a tremendous amount of time.
What can you do about it?
- Remember that this isn’t just money; it’s time for you and your child. So there is an opportunity cost. Make sure you have enough time to fulfill other needs in your life.
- Let your kid try things out. Push them to explore, but don’t push them too hard if they don’t enjoy it.
- If possible, lean towards less expensive and accessible sports with many kids. High demand usually creates more competition, which lowers costs.
- Consider forgetting the idea that your kid is getting a college scholarship. They are limited even at the highest level.
- Remember that you’re the parent, and ultimately you decide. So help your kids make informed decisions. Create trade-offs for them with time and money.
Top 3 takeaways:
- Sports are an amazing way for kids to stay healthy and develop important life skills.
- Pay-for-play sports are an industry like any other, so scrutinize what you’re being sold.
- Whether or not your kid is good at sports doesn’t make you a better or worse parent.
Show References:
- Washington Post Article
- CBS Article
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We know these events are founded in meaningful and religious traditions, but let’s be honest, many of those traditions have turned into big expensive parties. We share how much we spent on our weddings. We discuss the historical etiquette of who pays for weddings and some stats and insights.
Things to consider as you’re deciding how much to spend and how to approach these big expenses in your life and your child’s life:
- Nobody cares. Just kidding, these are important events and worth making memorable, but make it memorable for you. Then, the people who truly love you will find it memorable because of that alone.
- There are no rules for these items. Even if there were rules, rules are meant to be broken, especially archaic and inflated rules. It’s personal finance, and everyone will make unique decisions about this stuff.
- Plan your wedding as though no one else will be there. What do you want it to be?
- Don’t succumb to peer pressure, keeping up with the Jones, or lifestyle inflation.
- Explore the root of a tradition and stay true to that; not everything it’s become as the world has become fancier and more modern.
- Realize there are alternative ways to do these things, and you can buck the trend if you want to.
- Really consider if you’re willing to go into debt for these things. Then, ideally, manage within your budget.
- It’s going to require discussions about money with your spouse and family. There may be some tough and awkward discussions. If you can’t manage these discussions, then you may not be ready to get married.
- Be transparent with your kids when and where appropriate. You can explain this stuff to a 13-year-old, 16-year-old, and especially a 25 or 30-year-old. Don’t be afraid to disappoint your kids, instead reframe it as a teachable moment. Consider proposing tradeoffs and options to your kids. And finally, remember that not getting everything you went and deciding on tradeoffs teaches kids important lessons. It builds humility, financial acumen, work ethic, and the ability to delay gratification.
Top 3 takeaways:
- Everyone’s approach can and should be different based on their situation and values. Be intentional!
- Don’t succumb to peer pressure.
- Talk to your kids about this stuff. It’s okay for them to understand some of these things earlier in life, so they aren’t surprised.
Show References:
- Emily Post Institute
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start off by sharing an update on our 1 million point goal in 2022. We have both beat our goal and have earned 1.3M+ points across 9 cards and our two families. We provide a refresher on travel hacking and how to do it and then dig into how to start maximizing the use of your points.
Travel hacking redemption general reminders:
- The value comes from bonuses, not from normal spending. So if you want to play the game, you need to churn.
- You apply for a card, meet the minimum requirements (for example, spend $3,000 in the first 3 months), and then the points are deposited into your account.
- Hotel points are generally worth about $0.005 apiece. Airline miles are around $0.02 apiece. So on normal credit card spending, that’s .5% and 2% back.
- When you’re looking for ways to use your points and miles, always do the math. If a hotel room costs $50 or 50,000 points, pay with cash! Because those 50,000 points can likely be used to get $250 or more in value later.
- Think of your miles and points as cash, and do your due diligence.
- Using the valuation of $0.02 per mile, 1,000,000 airline miles are worth about $20K, more or less, depending on what you use them for.
What’s your earning strategy?
- Pick 1-3 hotels and 1-3 airlines and focus your earnings on those.
- It’s better to have 200K miles with three airlines and 100K with six because you need to be able to cover the whole cost with miles or pay an unreasonable cost to buy miles.
- For airlines, get coverage across the major alliances: Skyteam, Oneworld, Star Alliance. We’ll get into why later. For hotels: Choice, Marriott, Hilton, IHG
- EARN! EARN! EARN! Don’t mess around. Don’t dabble. If you’re serious about free travel, you need a lot of points to give you the most options.
- Don’t keep the cards past a year. The perks might be nice, but if you want to be eligible for the card again in the future, you’ll need to cancel it. 100K miles in 2 years is better than Group 1 boarding.
How do you redeem these?
- Understand the value. Hotels are roughly a half a cent a piece, airlines roughly 2 cents a piece. Don’t give up your points for a bad redemption.
- Hotels are easy so let’s start there. Pricing is dynamic, so regularly check for changes in price and rebook. Use credit cards for free nights or like IHG’s card, 4th night free.
- On to airlines. Search every program you have points with and see what’s available.
- Be flexible. Points and miles are dynamic. More popular times of the day or of the year are more expensive. So check the calendars to see if leaving on a different day or time is a better deal.
- Check Alliance partners. As you build up your portfolio or get transfer points like AMEX or Chase, you can tackle level 2 of searching, which is with International carriers.
- Booking Internationally can be overwhelming, so the key is the volume of searches.
- What if you don’t know where you want to go?! Follow travel blogs for flash sales and promotions. Consider paying for flight deal notification services. Once you get some options, you have to go through the searches. There’s no easy way around this. Once you find a deal, book it and enjoy the trip.
Top 3 takeaways:
- Know the value of your points and treat them mostly like cash.
- Dedicate some time to thorough searching. It’s the only way to find the best deal.
- This approach to earning points and then using them takes extra time, so realize this is a tradeoff in your time versus your money. And it can be a fun tradeoff!
Show References:
- Mike’s American Express Platinum Referral Link
- Maggie’s American Express Platinum Referral Link
- Mike’s Chase British Airways Referal Link
- Maggie’s Chase IHG Referral Link
- Friends on FIRE Episode #134 - Travel hacking our way to 1 million points in 2022
- Friends on FIRE Episode #152 | Travel hacking thru the summer and 1M point goal update
- Award Wallet - Free Loyalty Points Tracker (they also have a paid version)
- The Points Guy website
- The Points Guy Free Travel Tracking App
- The Points Guy Beginning Guide to Points and Miles
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion with Liz from LizGetsLoaded, we cover many topics, including:
- How she grew up financially
- Why she started LizGetsLoaded and what she’s gained from it
- Her early retirement plans
- Charitable giving and effective altruism
- HSAs and how she manages and tracks hers like a retirement account
- Anxiety and money
- Financial independence as the ultimate emergency spending account
Show References:
- LizGetsLoaded Podcast
- LizGetsLoaded Blog
- LizGetsLoaded on Instagram
- Book: The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically
- Book: Work Optional: Retire Early the Non-Penny-Pinching Way
- The life you can save
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We learn Mike’s never asked for a raise, but he is a finance business partner who is often the one approving raises. And Maggie has successfully asked for at least one raise and was in a leadership position where she was often asked for raises and the person deciding if it was going to happen or not. We share our best tactical advice on how to ask for a raise.
How to ask for a raise:
- Do your research. Know your worth in the market, either through other job postings or offers, what you know someone else makes at your company, etc.
- Know your performance and value at the company. What have your past performance reviews been? Above-average? If so, you might have a strong case. If not? It’s likely not going to happen.
- Don’t point to knowing someone else’s salary, it’s not a core reason to get a raise. It’s more likely to put you, the person whose salary you somehow know, your hiring manager, and HR in an awkward spot. There are plenty of reasons why people are paid differently. Focus on what you feel you’re worth and the desire to get paid for your worth.
- The best advice Maggie was ever given is don’t demand something right now. After managing people for a decade-plus, she now sees why this advice was given to her. It’s tough when you put someone on the spot and demand something right away, the answer is rarely going to be yes unless it’s a small company and you’re talking to the owner who can agree right on the spot.
- If you have an actual competing offer from another company, that is one of the easiest easy to get a raise but be ready to go take that other job if they call your bluff. You can either actually resign and wait for them to ask if there’s anything they could do to keep you, or you could upfront let them know you’re looking and have an offer, but you’re primarily only looking due to wanting to get paid more equitably and that you’re willing to stay if they can increase your salary.
- Be respectful, be patient, and think like a people manager. A huge piece of this is how you ask for it, not even what you ask for. The how is critical.
- Don’t be resentful if you don’t get what you want. You can either leave or stay and be engaged, but staying and showing your frustration will be picked up on by everyone, and you’ll have lost the opportunity for future favors.
We wrap up by discussing how to negotiate more money when you’re switching companies for a new job.
Top 3 Takeaways:
- Know your worth and what you care about.
- Don’t ask for something today; ask for a plan to get to where you want to be.
- Know your talking and your walking points.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk a lot about saving money, as that’s a key way to grow your wealth, improve your finances, and reach financial independence. The other way to do these things is to increase your salary through a promotion, asking for a raise, and just being indispensable at your job! This week we’re talking about getting a promotion, and next week we’ll talk about asking for a raise. We’ve learned a lot over the years, and here’s our biggest career advice to all of our listeners:
How to get promoted:
- First, let’s start with what it’s not about. It’s not about being the best software engineer, analyst, or project manager. And it’s not about how long you’ve been doing some job. It’s about if you can inspire, influence people, execute, think strategically, execute a vision, simplify a complex message, and manage pressure and stress. Are you compassionate? Will people follow you? It’s truly the old adage, “what got you here won’t get you there.”
- Understand that it’s as much about timing as it is about you. The right role needs to open up at the right time.
- Leverage your current role to show you have these leadership competencies for the next role. Do your current role differently, pick up new projects or work cross-functionally to show your capabilities for the next level.
- Find different roles and gain diverse experience. Depending on company culture, you might have to take multiple laterals before even being considered for a promotion.
- Leadership roles involve tons of decision-making, recommendations, and influence. And to persuade people, you can’t just tell them what to do, you need to understand where they are coming from, be able to speak their language (perhaps literally), and simplify complex topics to make others understand them. Give people options, pros and cons, and let them come to the same decision you’ve come to.
- Be a strong public speaker. Speak powerfully and prolifically. If you’re quiet and shy, you are unlikely to be considered for larger leadership roles. This takes practice and focus, it doesn’t come naturally to some of the best speakers out there!
- Build your relationships and network.
- Find leaders who inspire you, and learn from them!
- Define your personal brand and make every interaction bring it to life!
- Lastly, remember that it really comes down to one person: the hiring manager. It’s their decision, and promoting you will need to help them be more successful. Remember your job is always in service to someone, no matter what level you are; maintain a service mindset and lack of an ego, and that can make you incredibly successful in your career.
Also, it's okay not to want to get promoted. Not everyone wants more responsibility or accountability. It is okay to want to focus on being the best you can be at your job and leave it at that.
Top 3 Takeaways:
- It takes hard work to be successful.
- It takes EQ as much as IQ, and you must lean into the softer skills, often more than the hard skills.
- As you succeed in your career, the money will come, and you need to be prepared to handle it responsibly.
Show References:
- Book: What Got You Here Won't Get You There: How successful people become even more successful
- Book: Linchpin: Are You Indispensable?
- Book: The Art of Happiness: A Handbook for Living
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start off by sharing some of our own financial anxieties. Finances can be one of the most stressful and anxiety-ridden topics for many people. Anxiety is normal, and we all have it to some extent or another. We can do many proactive things to cope with and mitigate our financial anxieties.
All the financial anxieties we’re talking through can be solved or mitigated thru a combination of three things:
- Education
- Preparation
- Community
We talk through the financial anxieties that our listeners shared on instagram. They fall into a few main categories:
- Spending Money + Budgeting
- Having enough / Retirement
- Relationships + Family
- Housing
- Investing, stock market volatility, inflation, recessions
- Health insurance + medical costs
Top 3 takeaways:
- Financial anxieties are a real thing! We all have them to some extent or another.
- You can do things to cope with and manage these anxieties proactively.
- Appreciate how far you’ve come already (just for listening to a financial podcast, seriously), and then continue forward thoughtfully on your financial journey.
Show References:
- Netflix documentary - Get smart with money
- C FIRE simulation tool
- #148 | 8 ways to tackle your financial fears
-
130 | Where meditation and money meet
-
060 | Budgeting vs. Tracking Expenses
-
083 | Travel Hacking with Julia from Geobreeze Travel
-
134 | Travel hacking our way to 1 million points in 2022
-
006 | Finding Freedom – Pillar #3
-
095 | How to stop caring what people think and start living
-
112 | How to know if you are FI
-
138 | How a family of 5 can afford to retire at 41 and 43 (part 2 of 5)
-
160 | Debt-free college with Jason Brown
-
034 | Split or Combined Finances
-
109 | Talking to your partner about money
-
056 | Paying off your mortgage is a great investment
-
133 | How to put a value on your time
-
123 | The one thing you need to do to plan for a traditional retirement
-
068 | 5 Simple Steps to Investing
-
158 | Control your lifestyle to find financial freedom
-
139 | Medical insurance in early retirement (part 3 of 5)
-
128 | Creative ways to save on medical expenses
-
096 | Freedom is the ultimate financial goal, not retirement
-
042 | The Fioneers Interview
-
158 | Control your lifestyle to find financial freedom
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Scams are everywhere and have been forever. It’s not just Bernie Madoff-scale swindlers out there, though. It is so easy to reach individual investors via social media that scams have flourished. So let’s first talk about some guiding principles that you should remember:
- If it were such a great deal, the person who invented it would keep it a secret and make a trillion dollars.
- If it were such a unique opportunity, why would they come to you, not someone with much more money.
- If you don’t understand why it’s a good investment, then there is a pretty good chance it’s not. Trust your gut.
Now let’s talk about our list and some actual scam types:
- Multi-level marketing.
- Purposefully unclear and misleading instructions.
- Ponzi schemes.
- “Guaranteed” high yield plans that are well above the market.
- New Cryptocurrencies.
- Penny stocks or any stocks about to “explode.”
- Anyone asking you for your account number or to send money.
- Anyone doing something offshore.
- Someone on Instagram who you think you know/trust and they are all of a sudden asking you for money or personal info.
Some stuff to generally stay away from that aren’t scams per se, just potentially bad ideas.
- Anyone asking you for cash to invest in a new business where the ROI analysis is performed by them.
- Putting money with people or companies where it’s not instantly available. Liquidity and delays allow things to go south without you being able to do anything about it.
- Crypto.
- NFTs.
Specific tips to avoid scams and further protect your identity and finances:
- Don’t trust anyone.
- See #1 above.
- If it’s not 100% clear how this person or company is making money, then skip it.
- Turn on 2-factor authentication on all of your financial accounts. Many require it.
- Use strong passwords. Don’t repeat. Keep them somewhere safe. We love 1password.
- Don’t ever give out personal or financial info over the phone to someone who calls you. If they claim to be a company you work with, hang up, and call them back via the phone number on their website.
- Freeze your credit. See episode 48
- Call your kids or someone you trust and explain the situation. Get a 2nd, 3rd, and 4th opinion before acting.
- When it comes to money, just assume that everyone is working in THEIR best interest, not yours.
Top 3 takeaways:
- If it were such a great deal, the person who invented it would keep it a secret and make a trillion dollars.
- Scams, fraud, counterfeit, etc. are as old as economies themselves, global and not going away. Be cautious.
- If you don’t understand why it’s a good investment, then there is a pretty good chance it’s not. Trust your gut.
Show References:
- Investor.gov
- Friends on FIRE episode #048 - Is Credit Monitoring worth it?
- Price of Avocado Toast podcast 3 part series on MLMs
- Book: Bag Lady Papers, The priceless experience of losing it all
- Friends on FIRE episode #116 - Are you ready to invest in Crypto?
- 1Password
- Liz Gets Loaded venmo tip
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion with Sarah from Budget Girls, we cover many topics, including:
- How she grew up financially and what she learned from it.
- Her first job out of college was making $24K and then she got laid off.
- She committed to never being terrified about being out of money again.
- How fear can be very motivating.
- How she learned to get better with her finances.
- The many jobs and side hustles she has had over the years.
- Gamifying her side hustles.
- Her best thrifting advice.
- How she got into rental properties and the concept of ethical landlording.
- Her good and bad experiences with short-term rentals.
- Talking about finances with her boyfriend.
- What she would put on a billboard to tell the world.
Show References:
- Budget Girl Website
- Budget Girl YouTube
- Budget Girl Facebook
- Budget Girl Instagram
- Budget Girl TikTok
- Budget Girl The Budget Club
- Budget Girl Etsy Shop
- Budget Girl Money beginners playlist
- His and her money.
- Frugal debt-free life.
- Holiday Move Bingo on Budget Girl Website.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We’re now 162 episodes into this passion project called Friends on FIRE, and we’ve covered a lot! But if you’re just being introduced to the idea of FIRE or Financial Independence Retire Early, some of our advice might seem a bit overwhelming or confusing. So we’re going to simplify the steps you need to get started.
- Know your why. Any goal needs inspiration. Visualize what you want in life and keep that as your purpose to help you through the hard times.
- Get your partner on board. If your partner isn’t on the journey with you, or worse, moving in an opposite direction, it’s much harder to get started toward financial freedom. So get them on the same page and know this could take years!
- Track your expenses. What a critical piece of the puzzle. How do you know how much you need to retire if you don’t know how much you spend? Spoiler: it’s impossible.
- Track your net worth. Knowing what you have allows you to know how much time you can buy back, aka when you can retire or achieve financial independence. Tracking expenses without tracking net worth is like heading on a road trip with a broken fuel gauge.
- Cut your expenses. Once you know how much you spend, start cutting it. Cut it back to the bone, just until you begin to feel the discomfort. You don’t need to live in squalor, but if you have ambitious goals, you need to take dramatic steps. Start to save as much as you can. Some tips: groceries, cell phone, eating out, home services/DIY, etc.
- Invest your excess. This can get complicated, so we’re going to simplify this: just put it all in the market. This comes with risk, and you could lose money, but over time the market has consistently delivered if you diversify. The FIRE community loves VTSAX, an all-stock market ETF. We encourage you to learn about investing and start to make decisions based on your goals and risk appetite, but in the meantime, VTSAX is a reasonable place to start.
- Calculate your 4%. Financial independence just means that you have enough money to cover your expenses for the rest of your life. An easy way to calculate this, which factors in investment growth over time, is the 4% rule. Take your spending and multiply by 25, and that’s your goal number. Then, you can withdraw 4% of that a year and be ok.
- Set your target. Set an aggressive time target to keep you motivated. Think you can retire and 55? Make it 50, and we bet you’ll find yourself ready at 45. But if you don’t set a time, you’ll probably just keep kicking the can down the road.
- Take advantage of company benefits and savings programs. Every company is different, but whatever yours offers, consider signing up. 401k, HSA, deferred compensation, stock purchase plans, etc. These can be lucrative and help you on your journey.
- Do your own taxes. Taxes are a huge component of your financial picture, so why outsource them into a black box? Understanding how your money is taxed will help you make better decisions in the future, so buy TurboTax and do it yourself.
- Start living some of the changes you want to make in retirement. Lastly, don’t wait for some magical time in your life to start doing the things that make you happy. Start them now. You might not be able to do as much or as many, but you’ll start living that future life. Perhaps you’ll learn it isn’t what you thought, or perhaps you’ll refine it over time, and your later life will be that much better. Start now, though.
Top 3 takeaways:
- Understand your why. Set a vision for your life and a time you want to reach it.
- Track your expenses and net worth. What gets measured gets better!
- Don’t wait. Don’t wait to start working on your finances. Don’t wait to start doing the activities that make you happy.
Show References:
- Book: Designing Your Life: How to Build a Well-Lived, Joyful Life
- Friends on FIRE podcast #109 - Talking to your partner about money
- Friends on FIRE podcast #060 - Budgeting vs. Tracking Expenses
- Friends on FIRE podcast #027 - Why Tracking Net Worth Matters
- Friends on FIRE podcast #021 - Cell Phones and TV and Internet, Oh My!
- Friends on FIRE podcast #147 - How to save on your cell phone bill
- Friends on FIRE podcast #068 - 5 Simple Steps to Investing
- Friends on FIRE podcast #090 - Why you don’t need a financial planner
- Friends on FIRE podcast #123 - The one thing you need to do to plan for a traditional retirement
- Friends on FIRE podcast #016 - 401ks are your BFF!
- Friends on FIRE podcast #142 - What’s your 401k invested in?
- Friends on FIRE podcast #014 - Tax Time! Yay!
We kick off this episode by reading some listener comments and questions and addressing some quick thoughts on long-term care insurance. Then, Maggie shares some recent observations on time as she’s transitioning into her new early retirement life.
What is Parkinson’s law?
- Parkinson's law is the adage that work will expand to fill the time allotted for its completion. Or said another way, the more time you allow for a task, the less effort you will put into it. If we give ourselves an entire week to complete a task, then the task will increase in complexity and fill that entire week. The task itself might be able to be completed in 30 minutes or 2 hours, but we will spend time stressing about it or worrying about how we’ll get it done. Then we’ll just likely wait until the last minute to get it done anyways. So the extra time we might allow ourselves to do a task isn’t necessarily filled with the work needed to do the task or improve the quality of our work.
- If you’re familiar with procrastination, which we think we all are, then you’re already familiar with Parkinson’s law; you just maybe didn’t know the term.
- Research suggests that when given a task we consider how much time is available to do it versus how much time we need to complete it. So our mindset shifts us to take as much time as we have versus as much time as we truly need.
What can we learn from Parkinson’s law with our TIME?
- Recognize that the goal posts are always moving, either by you or by others for you. Getting more done won’t make you feel on top of it.
- Set shorter deadlines. You will worry and stress less and get creative with better ways to do things. Yes, it’s a self-imposed deadline but set it and respect it, and it can do wonders to keep you focused.
- Time-box your work. You could use something like the Pomodoro technique, which is effective for many people. This method breaks down your work time into 25-minute chunks with 5-minute breaks in between. You can use this approach to put time limits on various work and activities and create more focus. Be realistic.
- Work smarter, not harder. Be judicious and selective about where your time goes.
- Save the new time you’ve gained for what matters to you. If something took you 2 hours and you found a way to do it in 1, don’t then double your output and return to 2 hours. Keep that time free.
- Remember YOU control your time, and in theory, you have 100% control over it. Yes, things will come up you can’t anticipate. But you choose how to respond. You choose if you watch TV or if you do something else. You choose how effectively you spend at least some of your time at work.
- Understand this concept. A deadline won’t increase productivity, but understanding and accepting the idea of Parkinson’s law and adjusting our habits and work practices can.
How can we apply Parkinson’s law to FIRE?
- 5am Joel, who we’ve had on the podcast a couple of times, even leverages Parkinson’s law to think about the length of our careers. In an excellent article he writes he says, “Careers are supposed to be 40 years long, so we allow them to be 40 years long. If we truly believe that time is 100% within our control, we can choose how long we want our career to be.” We love this!
How can we apply Parkinson’s law to money?
- The same principle applied to money would be: your spending will expand to fill the amount of money you have available.
- If we have more money, we’re more likely to spend it. It’s akin to lifestyle inflation or keeping up with the Joneses. It’s a lot easier to keep up with Jonese’s if you technically have that amount of money available.
How can we apply Parkinson’s law to improve our finances?
- First off, when you have less time, you spend more money to outsource work or create efficiencies. So if you get better with time, you 100% will get better with money.
- When you constrict the amount of money you have, just like time, you will realize you can get by on so much less and still be happy.
- Hide your money from yourself. Put it into your 401k, your IRA, your brokerage account, or real estate.
- Avoid lifestyle inflation. We did a whole recent episode on this, and we talk about it often. Don’t move the goal posts for what you think makes you happy. If you are always wanting something more you will never be happy.
- Set a budget and stick to it. This could be budget categories or an overall spending target for the year. Pretend you have less than you do. It works for us.
- Practice delayed gratification. Eventually, you can spend money on something, but first, you have to pay yourself, be within your budget, and all of the things we discussed.
…
Top 3 takeaways:
- Understanding Parkinson’s law will add value to your life. No one is immune to it until you find your ways to overcome it.
- It applies to your time and money.
- Consider what you can do to commit to overcoming Parkinson’s law with your time and money, and start forming those habits!
Show References:
- Bose Noise-Cancelling Headphones
- MostlyMinimal Life - How noise cancelling headphones make me a better parent
- Book: Four Thousand Weeks: Time Management for Mortals
- Book: Essentialism: The Disciplined Pursuit of Less
- American Express Platinum Card Referral Link
- Friends on FIRE podcast #158 - Control your lifestyle to find financial freedom
- Rich + Regular Blog: The overemployed working two full-time remote jobs
- 5am Joel Blog: Retire Early with Parkinson’s law
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this episode, we discuss how we’ve been back for about a week since our European summer adventures ended. We then dig into:
- What worked well and what could have been even better (WWW and EBI)
- Listener questions on how much we budgeted, how much we spent on ice cream, hotels vs. aribnbs, if we experienced anxiety while spending, minimalist packing tips and how it worked out, things we’re most grateful to return home to, drones, eating vegan while traveling, food quality in Europe, prices in Europe, drones, and more.
- The exact amounts we each spent during our family's 32 and 39-day European summer vacations. We each play “price is right” first to guess each other’s total spending.
Top 3 takeaways:
- We spent a lot of money traveling this summer. This is a money category that is a priority for both of us.
- Tradeoffs and intentional spending are real, even while you’re on vacation.
- Tracking your expenses on vacation can help you budget and plan for future vacations.
Show References:
- Friends on FIRE episode #157 - Live from Europe – Summer adventures with friends on FIRE
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
Jason is from Miami, Florida and now lives in Atlanta with his wife and two sons. He has a bachelor’s in communication and a Masters degree in professional writing. He’s worked in various public relations, media relations, marketing, writing, and editing roles. He’s the author of Margin Matters: How to live on a simple budget and crush debt forever and IT IS POSSIBLE!: How I Earned Two Debt-Free Degrees...and How You Can, Too.
In this discussion with Jason Brown, we cover many topics, including:
- How he was raised financially and what his parents taught him.
- He learned about money by watching his parents and how they spent money. They never sat down and had a specific discussion with him; they instead modeled it with their behavior. He was always taught that if you can’t afford it, you don’t do it.
- Jason was the first person in his family to go to college.
- The resourcefulness he learned at a young age.
- Jason shared his college journey, what degrees he earned, and how he funded each.
- Debt is the easy or lazy way out, and it’s just too easy. There are other ways to attend college without going into debt.
- One of the biggest lies we’re told in society is that you have to take out debt to go to college.
- Thoughts on student loan forgiveness.
We discuss several tips for getting through college with less debt or debt-free:
- Dual-enrollment.
- In-state college.
- Leverage your high-school guidance counselor for help and support.
- Scholarships and grants.
- Visit the scholarship office at your college, even once you're already there! Then, keep applying even after your first year.
- Explore if your state has a state-funded scholarship program, such as some states' lottery-funded scholarships.
Show References:
- Jason’s Book: IT IS POSSIBLE!: How I Earned Two Debt-Free Degrees...and How You Can, Too
- Jason’s Book: Margin Matters: How to live on a simple budget and crush debt forever
- Jason’s website Margin Matters
- Jason’s YouTube Channel
- Scholarships.com
- Fastweb Scholarships
- College Board
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
The average family spends hundreds, and some thousands, per year on toiletries and personal care items. These are often the items that are part of a trip to Target, the grocery store, or a quick Amazon purchase; you likely don’t realize how much you’re spending as it adds up quickly.
Many products fit into the categories we’re talking about:
- Personal maintenance items such as shampoo, deodorant, and facial products.
- Make-up, nail care, and bath/spa products.
- Medicine, vitamins, and supplements.
- Cleaning supplies for your home.
- Personal care staples like toilet paper, hand soap, dishwasher soap, etc.
We talk through ideas and tips for how to save money on toiletries and personal care items:
- Be a personal care minimalist. Consider what you really need.
- Focus on being intentional and values-based in your purchase decisions. Focus on quality over quantity. Also, consider when quality matters versus does not.
- Use up what you already have, even if it’s not your favorite product. For example, use up old toothpaste, shampoo, etc., before you restock on things. Don’t allow yourself to stock back up or buy some new product you’ve wanted until you use up what you already have.
- Use less of the product each time you use it. For example, you don’t need as much toothpaste or toilet paper as most people use.
- Ensure you use up all of the product before recycling the packaging. Cut things open if you have to.
- Consider what stores you’re buying things from. Walgreens is expensive for some items but also has a great store brand. Sams Club and Costco can sometimes be a good price.
- Do you really need it? Consider getting to the root cause of why you need some products. For example, something like Kleenex is costly; consider using toilet paper instead.
- Buy generic and store brand items. The ingredients are often identical.
- Re-fill items with generic items. If you like a nice or special-looking soap container in your bathroom, consider keeping and reusing that container and refilling it with Aldi’s antibacterial hand soap; it’s 25% the cost of some other brands.
- Seek out tried and true classics vs. fancy marketing machines. For example, CeraVe lotion is highly recommended by all dermatologists, is a quality product, and has a fair, reasonable price. I could instead find many overpriced and overly marketed lotions when CeraVa is arguably a better product.
- Minimize your makeup and consider if/when you really need to wear makeup.
- Make your own! Mike makes his soap. Maggie makes her household cleaning products.
- Don’t get pulled into multi-level marketing MLM product schemes. These products are often much higher priced, and the quality is often not better.
- Use coupons and look for things on sale. The Flipp app helps find sales and deals on specific products.
- Take care of yourself naturally, and you need less of all of these products. For example, if you’re exercising, eating healthy, getting enough sleep, meditating, and so many other things, you’ll need less medicine and “personal care” items.
Top 3 takeaways:
- Be more thoughtful about your decisions for your wallet and the environment.
- You probably only need a quarter of what you usually buy out of habit.
- Test and learn. Stop using some things for a short time, use less, or switch products. You might learn a lot.
Show References:
- Johnny Harris Shampoo Video
- friends on FIRE episode #017 - Crazy frugal stuff we do
- friends on FIRE episode #111 - Gift economies and buy nothing groups
- Fiends on FIRE episode #128 - Creative ways to save on medical expenses
- Flipp app - Flyers, shopping lists, weekly ads
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We kick off with a discussion on lifestyle inflation and the point at which inflating your lifestyle builds true happiness versus just costs you more and more. The end goal is to find your appropriate level of happiness and spending and draw the line there.
Lifestyle inflation is the result of a few things:
- Pressure from peers and society to showcase your income level.
- An internal desire to reward yourself for hard work.
- A need to give your career progression meaning.
- The idea that paying for services will save you time or create convenience.
When you can identify the desired level of lifestyle spending and hold it steady, you will be consistently happy, but your savings rate will skyrocket as that additional income is saved and invested. Also, lifestyle inflation isn’t always a bad thing if monitored and controlled. If it outpaces your earning and savings rates, it can spell disaster. A reasonable rule should be that your savings should increase by the same as your income does.
What you can do to avoid lifestyle inflation:
- Track your expenses. It’s easy to let your spending inflate when you’re not looking at it.
- Keep your end goal in mind and understand there is always a trade-off.
- Remember that nobody cares about your lifestyle. They don’t care about your stuff; they don’t care about your clothes or where you go on vacation. People don’t care. So don’t try to impress them.
- Take the opportunity to reevaluate your spending and what level of happiness it actually creates. Then, use this exercise to scale stuff back. And do this regularly.
Top 3 takeaways:
- If lifestyle inflation becomes a habit, you’ll never have enough.
- There will always be someone richer, something nicer, more expensive, more luxurious.
- So inflate your savings rate, not your spending rate.
Show References:
- Friends on FIRE episode #095 - How to stop caring what people think and start living
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We’re both on vacation, so no detailed episode notes this week! Listen to the episode and we hope you enjoy the check-in while we’re traveling.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We start with a discussion on the role public libraries play in society. They offer free resources to everyone and anyone, boost local economies, keep communities healthy and connected, and are a safe refuge for the homeless and underserved.
General tips for leveraging your local public library:
- Think about what’s in your expenses now that you could be getting for free at your public library.
- Every location has different books and resources, especially digital.
- You can join multiple libraries. For example, if you have a rental property in another county or your parents live somewhere else, you can sign up for a library card in that county.
- You can request that your library carry a book they don’t currently have.
- Always check your public library first, and N=never buy a book unless you’re public library doesn’t have it.
- You can quickly and easily request holds and transfers from other libraries.
- Sometimes you have to be patient with wait times for digital or physical books. Plan ahead.
The fantastic amenities and resources available at most public libraries:
- Physical books, audio books, and ebooks. Libby and overdrive apps are free and connect to your library account.
- Kids books! Teach your kids about audio books; they are great for road trips, extra bedtime after you’ve read to them, when they get older, and when they can’t sleep.
- Private meeting and study rooms.
- Computers and printer access.
- Events and activities for you and your kids. Share some examples. Speakers too! Summer reading challenges and prizes for kids. They have kid, young adult, and adult programming such as exercise classes, craft classes with supplies, stories and s’mores, graphic novel book clubs, story time for little kids, robot crafts, teen book clubs, and more!
- Tickets to local attractions like the zoo, aquarium, museums, state parks, and more!
- Puzzles.
- Movies and music.
- Magazines.
- Newspapers.
- Tables and work space.
- Free wifi.
- Wireless hotspots for 21 days at a time. Use it for travel!
- Chromebook access for a week at a time.
- Reference databases.
A few final public library tips and ideas:
- It’s like a free coffee shop and coworking space, and you won’t be tempted to buy something because they don’t sell anything. Bring a water bottle and snack. They don’t allow food, but you can discretely drink water or sneak a bit of a granola bar; just don’t break out a sandwich and picnic and start eating it.
- Librarians are so helpful and nice! Ask them questions. Be their friend!
- Explore different libraries around town! Some of them are cool and different. Our kids like seeing new libraries. Some of them are pretty cool and modern or historic!
- Fun spot to take your kids for study groups and homework.
- Your kids have libraries at their schools also!
- Keep in mind the hours. For example, our favorite library is 10 am-5 pm most days but is open until 8 pm three nights a week.
Top 3 takeaways:
- Join your public library!
- Visit it and ask someone at the front desk about the various benefits that could be unique in your area.
- Setup a digital app like Libby for audio and ebooks.
Show References:
- Libby free app, by Overdrive
- Hoopla App
- Friends on FIRE episode #115 - How to learn anything for free
- Article: 7 reasons libraries are essential now more than ever
- Article: 23 reasons why your library is the most important place in town
- Book: Art of Happiness
- Book: Beautiful Ruins
- Book: Your New Relationship With Money: Mastering Money, Growing Wealth, and Finding Freedom in a Culture Trying to Make You Broke
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion with Diandra from That Science Couple, we cover many topics, including:
- How her mom taught her to be frugal at an early age and to present what what you saved before what you spent.
- How she got her masters without any debt by being a teaching assistant.
- She was initially very focused on how to grow in her job and financially.
- She was diagnosed with thyroid cancer at 23, which shifted her mindset on many things.
- The turning point where they had to decide if they wanted to travel or have a shiny apartment.
- The three focuses of That Science Couple: Financial independence, Lifestyle Medicine, and Minimalism.
- The power of combining all of these topics for greater success in life.
- Diandra’s recommendation on how and where to get started.
- If everything is important, then nothing is.
- Specific and tactical tips to improve your lifestyle today.
- Inflation’s impact on the cost of food, and a detailed comparison from their blog.
Show References:
- That Science Couple Blog
- Article: Keys to a full life with venn diagram
- Article: Eat for health
- Article: Accepting inflation, can you be frugal and eat healthy?
- Nutritionfacts.org
- The pomodoro technique
- Book: Dr. Dean Ornish's Program for Reversing Heart Disease: The Only System Scientifically Proven to Reverse Heart Disease Without Drugs or Surgery
- Book: Prevent And Reverse Heart Disease: The Revolutionary, Scientifically Proven, Nutrition-Based Cure
- Book: How to Stop Worrying and Start Living
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion, we cover many topics, including:
- Thoughts on if Maggie has slowed down yet or not.
- How they’ve been spending their time.
- Habit tracking.
- How relaxed they both are and how sleep has improved.
- They are hitting a nice stride of slowing down and relaxing.
- The immediate feeling of more margin in their lives.
- Being more present and engaged.
- The feeling of being untethered from a lack of structure.
- The discomfort that comes from being untethered and not having forced structure into your day.
- Parkinson’s law: “Work expands so as to fill the time available for its completion.”
- How they are feeling about work with six weeks of distance between it.
- Maggie’s reading Cashing Out right now and highly recommends it!
- Greg’s 30-day social media and news cleanse.
- Maggie’s realization of appreciating the present moment and not worrying about how the future will unfold.
- The feeling of financial freedom.
- They are optimistic for the future and starting to feel all the feelings they were hoping for in retirement, such as slowing down, being more present, and feeling less stressed.
Show References:
- Way of Life habit tracking app
- Parkinson’s law
- Book: Cashing Out: Win the Wealth Game by Walking Away
- Book: Your New Relationship With Money: Mastering Money, Growing Wealth, and Finding Freedom in a Culture Trying to Make You Broke
- Rich Roll podcast: Extend your life: Peter Diamandis, MD on the future of health & longevity science
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Episode Summary:
In this episode, we answer a bunch of recent listener questions. We answer questions on partying off your mortgage versus saving more into a 529 for college, if now is the right time to put money into the market, how much money to keep in a cash emergency fund, and how to balance income while planning for early retirement. We then discuss how to breakup with your financial advisor, rental properties, and Roth IRA conversion ladders.
Episode Notes:
We start off by sharing a recent listener story and win, and then dig into some listener questions:
- Should I pay off extra on my mortgage or save more into a 529?
- Is now the right time to start putting money into the market?
- How much money should I keep in cash in an emergency fund?
- Do you track your tax payment in your spend tracker or your annual expenses?
- How should I plan for and balance where my income comes from in early retirement versus later in life from retirement funds?
- How do I break up with my financial advisor?
- How did we get our first rental property, and how much did we put down?
- Would we consider an airBNB property versus a long-term rental?
- Can you share a more detailed explanation about Roth IRA conversions and Roth IRA conversion ladders?
Top 3 takeaways:
- Send us your questions!
- We will answer them directly or in an episode like this.
- If you send us really detailed questions it’s sometimes hard for us to answer without knowing more about your personal situation. We have considered doing some financial coaching, but likely won’t do anything with that until later in 2022 after the summer, or in 2023. But feel free to reach out if you’re particularly interested and eager to learn more.
Show references:
- Friends on FIRE episode #025 - College – Choosing your Approach
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #090 - Why you don’t need a financial planner
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start with an update on how we’re doing against our 1 million point and mile goal for 2022. We’ve signed up for 9 different cards totalling 800K+ in points and miles, and we’ve been able to reach the spend targets through already planned expenses in our lives.
We talk through a number of things in this episode:
- A refresher on how travel hacking works.
- How you should value and redeem points and miles for tavel.
- How we are using points to fund our summer travel plans.
Show References:
- Friends on FIRE Episode #134 - Travel hacking our way to 1 million points in 2022
- Award Wallet - Free Loyalty Points Tracker (they also have a paid version)
- The Points Guy website
- The Points Guy Free Travel Tracking App
- The Points Guy Beginning Guide to Points and Miles
- The Points Guy - Best Credit Cards
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk about what debt is, the concept of good and bad debt, and how much debt the average person is in. We remind people about a previous episode covering various ways to pay off your debt.
Strategies to make paying off debt more enjoyable, and dare we say FUN:
- Decide on your why. Visualize how your life will be different when this debt is gone.
- Set a clear goal and a schedule to get there. Don’t just say $100K in 2 years; set a clear goal for each month or week to get you there.
- If you are married or have a partner, explain your plan and get them on board. Or better yet, co-create your plan. You’ll need their support.
- Reward yourself. For every milestone, celebrate success. Don’t spend a lot on this, but feel free to spend $50 on dinner to celebrate that $5,000 debt payoff milestone.
- Visualize it. If you are motivated by visualizing things and checking your progress, create a fun total meter or set of squares to color in as you pay off chunks of your debt. Visualizing the total debt you have to pay off in smaller chunks and then getting to check off or color in progress as you make it will help keep you motivated.
- Gamify it. Consider using an app, your visual tracker, or whatever you want to “gamify” paying off debt to make it more fun. You could do the game yourself or include other friends with similar goals.
- Get an accountability partner and share your results; this could be someone you know in real life or an online friend.
- Share your results with the FI community! Share them with us, and we’ll give you some positive feedback.
- As you make progress, ramp up your momentum. $100 a week might have been hard at first, but you will likely adjust and can do more after a year. Continually push yourself to do better and pay it off faster.
- When you finish, share your story. It’s a huge accomplishment, and you will inspire others.
- Throw a party to celebrate! Don’t go into debt to throw a party, but find a way to celebrate!
Top 3 takeaways:
- Unless your debt is generating incremental wealth for you, you should work to pay it off ASAP.
- Pick your payoff method and stick to it. We recommend paying off your highest interest-rate loans first.
- Celebrate your successes, however small. You want the journey to be rewarding.
Show References:
- Friends on FIRE episode #107 - Why you should reject Dave Ramsey’s Debt Snowball Method, and what to do instead
- Friends on FIRE episode #056 - Paying off your mortgage is a great investment
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
If you’ve been watching the stock market in 2022, it’s been mostly bad news. High-flying stocks from 2020 and 2021 have been crushed. Solid favorites have dropped dramatically, and all the headlines are talking about recessions.
We recap some past episodes where we discussed how the economy works and inflation, and then dig into what’s likely impacting the recent market declines.
- Covid required an influx of liquidity because the economy ground to a halt.
- Fed lowers interest rates and starts pumping cash into the economy.
- The government started providing stimulus to consumers, including increased unemployment.
- More money and lower rates drive prices up because people are less sensitive.
- Inflation starts to take over and prices skyrocket.
- Fed needs to raise interest rates to lower inflation. But higher rates makes borrowing to grow expensive and slow down business, which in turn freaks out the stock market.
The fed's job is to balance the economy, and this is all cyclical. It’s happened many times before and will happen many times more. This is about taking emotion out of investing and how to discipline yourself into making better decisions. We encourage everyone to look at the market’s performance over time and have a broader perspective. We discuss some of the pitfalls to avoid with investing in the stock market. We wrap up the discussion with our advice on what you should do during any stock market decline.
Top 3 takeaways:
- We’re in a normal cycle of inflation, tightening fiscal policy, and stock market correction. Don’t freak out.
- Don’t gamble with your money. Invest consistently through ETFs to lower your risk.
- When things seem really bad, resist the urge to make emotional decisions. By the time you’re freaked out, the chances are that the worst is over.
Show References:
- Sign-up for free daily news Skimm update
- Friends on FIRE - Episode #033 - Mike Explains the Economy
- Friends on FIRE - Episode #068 - 5 Simple Steps to Investing
- Friends on FIRE - Episode #144 - Inflation is out of control! What is happening?
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion, we cover many topics, including:
- The benefits of giving more or less notice when leaving a job.
- The reactions of coworkers as they shared they are retiring, and how that’s changed over time.
- How they both became more efficient when they knew they were leaving and were better able to focus on the things that really mattered.
- The high and low of their last week of work.
- If they are having any regrets or second thoughts about leaving their jobs.
- The role campFI played on their journey.
- How they are both feeling, and how those feelings evolve through this process.
- They also answer some specific listener questions.
Show References:
- Friends on FIRE episode #138 - How a family of 5 can afford to retire at 41 and 43 (part 2 of 5)
- campFI
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Even though Maggie has accomplished a massive amount of things financially and has put herself in a position to retire at 41, she’s still afraid of a lot of things.
We talk through a few things related to fear:
- Everything Maggie is afraid of. It’s a lot of things.
- The definition of fear.
- The good and bad sides of fear.
- “Courage is not the absence of fear, but the triumph over it. The brave (wo)man is not she/he who does not feel afraid, but she/he who conquers that fear. -Nelson Mandela
8 ways to conquer your financial fears:
- Be kind to yourself. Accept that fear is normal, especially when you’re taking the path less traveled.
- Listen and learn. Educate yourself thru books, podcasts, youtube, blogs, and more!
- Know your numbers. Track your expenses + net worth. What gets measured gets better.
- Calculate your fears. Put #s against your fears, worst-case scenario them. You can deal with them.
- Remember, you’re resilient. Your skillset is strong; you can work again and do whatever is needed.
- Write it down. Write down your fears, imagine the worst, rank, and prioritize them.
- Breathe + Meditate. Leverage the science that proves breathwork and meditation can help you with fear and anxiety. And the good news is these practices are easy and free.
- Find your community! Surround yourself with like-minded supportive people. Your community is powerful!
Top 3 takeaways:
- Fear is normal.
- Courage is not the absence of fear but our ability to triumph over our fears.
- There are things you can proactively do to push through your fears, so do them!
Show References:
- campFI
- Book: Bag Lady Papers
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #130 | Where meditation and money meet
- Mostly Minimal Life: An introduction to fearFIRE
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
The average person is paying $60-100 a month for a cell phone plan, but in reality, we think that’s way too much! Most people can get solid and reliable coverage for $25-40 a month. This is our advice for what to consider as you research and explore new cell phone plan options.
Do your research and decide what you need:
- Where do you live, and who has good coverage? These days all carriers tend to have excellent coverage.
- How much data do you need? For example, unlimited data usage versus are you OK with a cap on your data usage.
- What type of phone do you have or need?
- How many lines do you need?
Pre-paid plans vs. traditional cell phone bills
- Almost all carriers have cheaper plan options if you go with a “pre-paid” plan. We explain what these plans are and why they cost less.
Some of the best low-cost cell carriers out there
- Their offers are constantly changing, so when you’re ready to look into things, you need to go and see who’s offering what. Even if we made a massive spreadsheet highlighting and comparing them all, someone’s would change next month.
- Consider offer stacking. For example, you can sign-up through Rakuten for cashback or a sign-up bonus using a friend's referral link.
- The best discount companies we have found include Visible, Cricket Wireless, Mint Mobile, GoogleFI, Tello, and pre-paid plan options with any of the big networks like Verizon and AT&T.
Approaches for traveling internationally
- Pick up a local SIM card or rent a wifi hot spot while traveling.
- You can buy international time/packages through many previously mentioned carriers, but they can get quite pricey. So if you go this route, manage your data usage proactively while traveling!
Top 3 takeaways:
- You're likely paying too much if you’re paying more than $40 a month for your cell phone plan.
- Do a little bit of research or accept someone else’s research and make a change to save money today.
- Don’t get sucked into clever marketing. Generally speaking, cell phone plans are a commodity product, and you’ll get the same service from everyone.
Show References:
- friends on FIRE episode #021 | Cell Phones and TV and Internet, Oh My!
- Visible referral link - first month is $5
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion with Landshark, we cover many topics, including:
- Where he came up with the name LandShark.
- How we grew up financially as the child of immigrants.
- His parents instilled in him the idea of being smart with his money and not wasting it.
- His career as a lawyer and how he was initially inspired to seek financial freedom.
- His early influences in the FIRE space.
- The concept of what enough is. How much does someone need?
- His career as a lawyer has been successful and has allowed him to have the means to retire.
- He transitioned from an equity partner in a law firm to a consultant/contractor as he eased into early retirement and finished his cases.
- His initial early retirement plans and what he wants to focus on. Four areas he plans to focus on: exercise, creation, learning, and family time.
- What he learned from the Marshall Wildfires and how he’s now helping his community through it.
- The problem that many people are underinsured. Double-check your insurance policy to ensure you’re ensured enough to truly replace your home.
- Life is short, and we’re not going to live forever. It’s so important that we live mindfully and focus on our values.
- “We’re not as important as we like to think we are. To our employers, we’re all replaceable. You don’t need to ask yourself for permission to live the life you want to live; you just need to do it. A lot of people don’t because it’s easier to stay in the situation you’re in.”
- How making a change is hard and living your life without regrets.
- Think about the things you value in life and prioritize those values.
- He’s benefiting from Wife-FI, which is that his wife is still working so he can stay on her medical benefits.
- How he talks to his kids about money.
- His biggest life lessons and advice.
Show References:
- www.landshark.org
- https://twitter.com/iamlandshark
- https://www.facebook.com/iamlandshark
- SNL (Saturday Night Live) Landhsark Skit
- Mr. Money Mustache
- Vogleheads forum
- Mint - Free budget tracker and planner
- Personal capital
- Book: Vogleheads guide to investing book
- Netflix show: Inventing Anna
- Stockpile (we said Splitwise accidentally, but we meant stockpile)
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start off by sharing some stats on why sustainability matters. This is for us; this is for our kids and the next generation. We need to leave this earth better than we found it, but we’re not always doing that. We’re skipping past some basics like bringing bags to the grocery store or installing a digital thermostat, hoping to challenge your way of thinking and encourage you with new tips and ideas.
Little daily things you can do to improve sustainability:
- Use less of things. People think they need way more toiletry-type products than they do. You don’t need a full pump of hand soap; you don’t need as much toothpaste as you’re likely using, you don’t need as large of a pile of face soap on your hand, etc.
- Get every last bit of things before throwing them away or recycling them. Cut open your containers if you have to; get creative about getting that last bit of something!
- Use cloth napkins instead of disposable paper towels and napkins.
- Reuse glass and other containers. It takes about 4,000 years for glass to decompose. So reusing those glass containers vs. buying fancy storage containers is a great practice.
- Compost. It saves water, conserves landfill space, and reuses food scraps for a meaningful purpose.
- Wash your clothes in cold water. Up to 90% of the energy used during a washing machine’s cleaning cycle goes into heating the water, so use the cold setting.
- Make your cleaning supplies. Make a simple cleaning solution from water, vinegar, and peppermint essential oils (use any scent you like).
- Buy and use metal straws.
- Use reusable k-kups. It saves tons of money and is better for the environment.
- Don’t buy pre-packaged snacks. Instead, buy them in bulk and then put them into reusable Tupperware for individual servings for your kids or selves.
- Don’t buy bottled or sparkling water in cans. Instead, consider investing in a soda-sense or Berkey water filter. Also, use refillable water bottles and always pack them when you’re out and about.
- Buy less canned foods and buy things like dry beans. You can cook them in your instant pot so quickly.
Bigger lifestyle things you can do to improve sustainability:
- Eat less meat. We’re not going to try and convert you, but the reality is eating less meat can save you money and reduces your carbon footprint.
- Control the temperature in your house. Keep it a bit less warm in the winter and a bit less cold in the summer. Put on a sweatshirt if you’re cold. Put on a tank top if you’re warm.
- Install low-flow showerheads. You can find many on Amazon or at your local home improvement store.
- Consider becoming a one-car family. Could you get by on this? Of course, there could be times you need to call an Uber, but that’s still a lot less than the cost of ownership of a car.
- Consume and buy less physical stuff. Keep the things you have for longer. It puts less in our landfills and is better on your wallet.
- Buy used items. Consignment shops, sites like eBay and Poshmark,
- Minimize the disposable products you will buy.
- Join a buy-nothing group in your neighborhood!
- Eat out less. We just did a show on this!
- Live in a smaller home! Smaller homes come with less furniture, less cleaning materials, less heating and air, less water, and a smaller mortgage.
Top 3 takeaways:
- We need to do more to help and support our environment. Sustainability practices help the environment and your wallet too.
- It starts with you. Your small changes do have a meaningful impact!
- We challenge you to pick a few new practices you will try out and commit to for the next 30 days. And then hopefully 30 years!
Show References:
- friends on FIRE episode #017 - Crazy frugal stuff we do
- friends on FIRE episode #111 - Gift economies and buy nothing groups
- friends on FIRE episode #143 - We have food at home and so do you
- Mostly Minimal Life: Paper towels are silly
- Article: 50 facts for 50 years
- Article: How to save money by going green
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
What is inflation?
- Inflation is the steady rise in the cost of goods and services. It’s normal and part of a healthy economy. In theory, a healthy economy sees wages rise as the cost of living increases.
What drives inflation?
- Supply and demand can both drive inflation. Think of it like this: If there’s a bad harvest of oranges, the price of those oranges will go up because there is less supply. But if people go bonkers for oranges, they start to compete, which drives up prices. If any of these things are sustained, that’s inflation.
- More money can also cause inflation. If you are suddenly flush with cash from a bonus at work, you probably care less about a few dollars extra for dinner, right? We see this when the Fed pumps money into the economy for cheap. Think home mortgages.
Is inflation bad?
- Inflation is good but at a manageable pace. So right now, we’re not in what’s referred to as hyperinflation, but its ramp has been fast.
- The Federal Reserve’s main job is to control inflation, and they do this by managing interest rates. Cheap interest rates can jump-start the economy, but too much cash or for too long can cause inflation.
How is inflation measured?
- “The CPI represents changes in prices of all goods and services purchased for consumption by urban households.” - US Bureau of Labor Statistics. “Indexes are available for major groups of consumer expenditures (food and beverages, housing, apparel, transportation, medical care, recreation, education and communications, and other goods and services).”
- What inflation isn’t, though, is your everyday expenses increased by 7% or whatever the official inflation number is. If you don’t pay for rent or aren’t buying a car or sending your kid to college, your inflation number is different.
But some things I’m buying are the same price!
- That might be true. Not everything is more expensive, but most things are. Marketers are savvy, though, and they’ve tricked you. It’s called “Shrinkflation.”
- That box of cereal might still be $4, but check the weight as it’s 25% less now. The box is taller but thinner. You get more Cadbury cream eggs, but they are all smaller.
What can you do to mitigate inflation?
- The first thing is just to control your spending. The less you spend overall, the less inflation will impact you in absolute dollars.
- Shop differently. Supply chain struggles are real, so if you buy something imported by ship or air, that will see a big cost increase. So instead, shop local, shop smaller, ship items together, or wait altogether.
- Check the cost per unit. This applies mostly to food, but see how much you spend per oz or unit and compare prices that way, not by overall cost.
- Remember that inflation is a real thing that will impact your future. It’s easy to just calculate in a flat percentage increase year over year, but also think about the big purchases like houses, cars, medical care, and college.
- Lastly, just deal with it. It’s a reality of capitalism, and you’ll be ok. Control what you can control, and don’t worry about what you can’t control.
Top 3 takeaways:
- Inflation is a normal part of healthy economies.
- The inflation numbers you hear in the news are based on the Consumer Price Index and reflect the aggregate increase of all things being sold.
- Keeping your spending low is extra important now, so use current inflation as a reason to scrutinize your expenses and keep them low.
Show References:
- friends on FIRE episode #111 | Gift economies and buy nothing groups
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We dig into tips and advice to eat more at home and, in the process, eat out less.
Food and eating out are typically among the top 5 largest expense categories.
- Many people don’t realize how much they are spending eating out. Some families easily spend $5-10K a year and do not fully realize it. Like all things, we recommend you figure out how much you’re spending and ensure it’s intentional and how you want to spend your money.
- Mike and Maggie share how much they spent eating out in 2021.
Benefits of eating at home more often:
- It’s usually healthier.
- It’s often faster and can save you time.
- It saves you money.
- Sometimes it tastes better.
- You will likely feel better afterward, physically and mentally. You will be less stuffed and feel emotionally better about your financial and health decision.
- It makes you appreciate eating out more when you do it on a more limited basis.
- It keeps everyone in the family happy. Have you eaten out at a restaurant with kids before? Enough said.
Tips for eating out less:
- Set a monthly budget for eating out if budgeting is your style and approach.
- Set a goal for how much less you want to spend if that’s more your style.
- Keep food and snacks on hand that you love and make you happy. The more well-stocked your fridge and pantry are, the less tempted you’ll be to eat out.
- Make a plan! We’re referring to meal planning here. You’re less likely to deviate or make a last-minute decision when you have a plan.
- Have some emergency meals always on hand in the freezer or pantry. So when you’re tired but not craving to eat out, you’ve got something quick and yummy you can prepare. One of our favorites is public goods ramen.
- Have a shortlist of easy meals everyone likes.
- Get inspired with recipes that align with your lifestyle and skillset. These could be simple and easy recipes that only use a few ingredients if that’s your jam, more complex ingredients and recipes that challenge you in the kitchen, or something in between! Recipes are free and easy to find on sites like Pinterest and Google.
- Plan ahead for busy nights or periods. Make extras and freeze things. Prep things the day before when you have time.
- Get help! If you’re in a relationship, take turns on who’s in charge of dinner. Get your kids involved in the prep-work and make it a family event.
- For work, pack your lunch and pack extra emergency lunches and snacks.
- Keep non-perishable snacks and water in your car at all times.
- Pack ahead for outings and trips to avoid eating out emergencies.
- Use your freezer! You can freeze bread, milk, meats, soups, and so many other things and then pull them out as you need them.
- Save eating out for social or special occasions.
- Get creative on hosting social occasions at home versus at a restaurant. Even with social occasions, consider suggesting an at-home pot-luck meal or group approach to meal planning. Consider hosting a fun-themed dinner party.
- Learn to make a takeout meal you love at home. You might even like it better!
If/when you do eat out, here are a few tips for spending less:
- Find affordable places you love, and only spend more when it’s a splurge.
- Have a snack before you leave home so you won’t place a frantic hangry order when you get there.
- Limit the alcohol as that can be expensive. Instead, have a drink at home before you go out, or BYOB if the location allows for that.
- When you’re traveling, consider booking a place to stay with a kitchen. Even if you don’t have a kitchen, you can still buy simple ingredients at a local market and pack a picnic or prepare simple meals.
Top 3 takeaways:
- There are many great benefits to eating more at home vs. out.
- Set a budget or spending goal for eating out.
- Eating out is fun and enjoyable, but try to approach it more as a treat than a convenience. Be intentional when you choose to eat out.
Show References:
- friends on FIRE episode #024 | Save on Groceries
- friends on FIRE episode #063 | 5 Ways Shopping at Aldi Will Change Your Life
- Recipe generator for leftover ingredients
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We are not professional accountants, financial planners, or attorneys. We are sharing our opinions and thoughts, and we do not know your personal situations, so our advice may not be applicable to you. But we did stay at a Holiday Inn Express last night!
Our point is we’re here to talk about these things with you, not to tell you what to do. So we recommend you spend some time researching these concepts for yourself or talk to a financial advisor.
A 401k and 403b is a retirement savings account that allows you to save money pre-tax, invest it, and start withdrawing it penalty-free at age 59.5. You pay taxes then, in theory, at a lower tax rate. Roth 401ks are the opposite; you pay taxes now and not at withdrawal. Many companies will give you a choice between a 401K or a roth 401K.
The 401k itself has fees, and then your investments have fees, so over time, it gets expensive. Consider rolling it all into a self-managed IRA when you leave a company.
401ks almost always have limited investment options, and this is by design. Companies want you to see this as a benefit, not be overwhelmed by it. You can typically invest in:
- Money Market Fund
- Target Date Funds
- Bond/Treasury Funds
- Other Equity Funds: Small Cap, Large Cap, International, High Growth, and Broad Index
It’s all about your appetite for risk:
- Money market is like cash and basically no risk.
- Bonds are lower risk.
- Target date manages risk by adjusting the mix of cash, bonds and equities.
- Broad index funds have some risk.
- Equity funds generally have the highest risk.
The higher the risk, the higher the return. But, again, we’re not advising you on what to invest in.
A target date fund will give you some peace of mind if you are risk-averse. Remember that over a lifetime of investing, it will all go up.
Top 3 takeaways:
- 401ks allow you to invest savings pre-tax and let it grow.
- Investments are usually limited, and you can see what the fund options are actually invested in.
- Picking the right investments depends on your appetite for risk. So do some research and see if you’re comfortable with the individual stocks within a fund and the fees.
Show References:
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #114 - What’s a rothIRA and do I need one?
- Friends on FIRE episode #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion with Jack and Mark, we cover many topics, including:
- Jack and Mark share their stories of retiring and exiting Corporate America.
- Why they decided to leave their jobs.
- Taking risks.
- Enjoying the process of putting the pieces together.
- Acclimating to your new environment and having a plan for how you’re going to approach things.
- Focus on making it a celebration.
- The idea that Maggie can do anything she wants, and have time for it.
- Writing down your core values, what’s important to you.
- Change and how the body tends to resist change, but it can be exhilarating.
- How to face your fears and not be afraid.
- The process of throttling down and how it took them years. When you’re used to running 90mph and then you jump into retirement, it takes a while to throttle back and relax truly.
- How quickly you will fill your time with other things.
- Don’t make big life decisions right away, instead, test things out and take notes.
- A directed lifestyle vs. an undirected lifestyle.
- The idea that once you relax, a new vision for your life will appear.
- Reinventing yourself in early retirement.
Follow friends on FIREfr
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
When Maggie tells people she’s retiring, the most common question she gets is about medical insurance, and the second question is what she’s going to do with her time and if she will get bored. Of course, she will not get bored. She has a lot of plans and goals!
Why she is using the term bucket list:
- The formal definition of a “bucket list” is “a number of experiences or achievements that a person hopes to have or accomplish during their lifetime.”
- The term bucket list has been around forever, and it often has connotations of things you want to do when you find out you’re dying or crazy big-time adventurous goals you want to get to someday.
- Maggie got the idea to use the term “bucket list” around my early retirement plans from Chris and Deb with Go Bucket Yourself. We had them on the podcast on episode 131 - An unconventional and extraordinary life with Chris and Deb.
What’s on Maggie’s bucket list?
Maggie has defined her Freedom Five for how she plans to spend her early retirement intentionally:
- SLOW down and be present. Meditate daily. Single-task. Finish things. Be more present when doing things. Slow down. Spend more quality time with kids, husband, family, and friends. Organize and minimize! Learn how to relax.
- HEALTH and fitness. Eat well, more natural and home-cooked food and less processed food. Take vitamins. Workout more often and with more variety, like building strength through push-ups and pull-ups. Strengthen core to prevent future back issues and other injuries. Take daily walks.
- LEARN things. Explore ideas and curiosities. Build furniture. Learn to make things vs. buying them (soap, candles, bread, etc.). Do more DIY projects. Learn to quilt from mom. Learn aikido. Read more books + listen to more podcasts.
- HELP people and causes. This is a mix of everything from helping within her community at her kid’s schools to helping friends and family to helping people halfway around the world. Friends on FIRE podcast is right at the top of this category! Make other people’s lives easier. Volunteer.
- ADVENTURES and travel. Be more adventurous and experience-driven, large and small. Spend more time finding great travel deals. Travel the world, with and without the kids. Plan family adventures and teach kids the value of experiences and travel.
Maggie also shared a glimpse into her husband Greg’s plans and goals. His retirement plans are a bit less to-do focused than Maggie’s. Instead, he plans to focus more on building strong habits and intentions.
We close out this episode with Maggie sharing a feelings update now that she’s about 30 working days away from her early retirement.
Top 3 Takeaways:
- The concept of a bucket list is fun. It’s a new take on a “to-do” list of sorts.
- There’s value in spending time thinking about how you want to spend your “early retirement.” If you can’t think of anything, you might want to rethink your actual plan and approach.
- You can have a bucket list without retiring! Dream big and small! Simple things can have a significant impact on your day-to-day happiness.
References:
- friends on FIRE podcast #131 | An unconventional and extraordinary life with Chris and Deb
- friends on FIRE episode #096 | Freedom is the ultimate financial goal, not retirement
- https://gobucketyourself.com/
- The Bucket List movie
- Book: Animal, Vegetable, Junk: A History of Food, from Sustainable to Suicidal by Mark Bittman
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Insurance is the number one question we get when we tell people we are retiring. Also, everything we’re sharing on insurance is specifically relevant to those living in the United States.
Key considerations and thoughts on insurance during early retirement:
- Insurance is just a product you buy. It’s not some special club only for people who work for established businesses. You put in more than you get out on average, which is how insurance companies make money.
- It’s going to be more expensive than what you currently pay as part of a W2 job. We now appreciate how much our employer has been paying all these years! Either you’re paying the expense, or your employer is.
- Think of it as the cost of your freedom. You can get frustrated and feel trapped because of it, or you can do your research, plan, and budget for it, choose the best options, and move on with your plans and dreams. Just accept it.
- You should budget for this and include it in your annual cost of living estimates in retirement. You also need to budget for medical expenses in addition to the cost of insurance.
- Do your research and ask a lot of questions. Healthcare.gov outlines several roles that can help you; they have navigators, certified application counselors, and agents/brokers that can help you.
- Remember, once you get insurance, there are many other ways to save on medical expenses. We did a previous episode on creative ways to save on medical expenses.
There are several paths you can go for insurance:
- Cobra for up to 18 months. Warning, it’s expensive. Your company HR person can share the rates with you for your company. You’re paying your portion of the cost and then also what your company has been subsiding for you all these years.
- Healthcare.gov / ACA plans. This is what Maggie plans to use, so we’ll share more on this later.
- Private health insurance. Yes, you can go directly to private insurance companies to buy insurance. The big downside here is these don’t allow you to qualify for marketplace subsidies.
- Healthcare sharing ministries such as medi-share. We’re not experts on these, and we’re not going down this path as we don’t ideologically qualify.
- Newer models like sidecar health. The biggest negative is there is a max of what they cover for specific types of care, which they call a benefit amount (e.g., average joint replace the should cost this much, so that’s the most we’ll cover). They cover you up to a certain amount, but you could be in trouble if you have something really expensive. We feel comfortable covering the small stuff, but we want insurance for the big crazy stuff, and that’s where SideCar health lacks, in our opinion, so it’s not for us right now. And it’s new and doesn’t have enough history for me to feel comfortable relying on it.
- You could enter into some sort of part-time employment arrangement to get insurance.
- You could technically go without insurance. It’s no longer a legal requirement in the US. We would never recommend this.
- If you’re traveling full-time, other types of insurance like travel insurance medical coverage. Some of these only work if you also have a traditional plan for it to sit on top of, so do your research and read the fine print!
- Move to another country and get resident status or qualify for medical coverage there. We’re not experts on this, but it’s possible, though not easy, and there is a lot of content out there if you’re curious about this path.
What is Maggie’s plan?
- We’re putting our kids on our ex-spouse's plans. That’s a nice benefit we each have that will make the cost significantly lower.
- We’re NOT doing cobra. It’s too expensive and not worth the incremental cost to us.
- We’re going to do a plan through healthcare.gov. We’ll do a high-deductible plan so we can participate in HSAs because HSAs are awesome! There are many plan options on the healthcare.gov marketplace, so you’ll want to spend some time comparing the different plans. The site is straightforward to use, and you can put in your doctors and medicines and see which plans cover which things. We will have to switch some doctors, but it’s a tradeoff we’re willing to make.
- We’ll augment it with travel insurance when traveling in the US or abroad.
- Specific offices and practices have plans for dental and visual, or you can just go without and pay cash as you need services. We plan to sign-up for the dental plan at our existing dentist’s office, and we’ll pay cash for vision needs as we have them.
What is medical insurance going to cost us in early retirement?
All of these numbers are for two adults.
- Current premiums through our employers: $201 a month, $2416 a year.
- Cobra would cost us: $1,251 per month; $15,018 per year
- Without subsidy healthcare.gov plans: Range of options from $1,032 per month; $12,384 per year TO $1,993 per month; $23,916 per year. That’s a big range, $6K a year per person to $12K a year per person, but it shows you the range of options available. We’re not yet in our 60-day window, but we’re likely going to land closer to the bottom end due to going with a high-deductible plan so we can do an HSA: $1252 per month; $15,018 per year (Aetna CVS Bronze)
- With Subsidy, healthcare.gov plans: The $15K a year option noted above will cost us full-price if our annual salary is $190K or higher. If our salary gets below $80K, we will be eligible for a subsidy of $11K+ a year, and our annual insurance cost will come down to $3,750 per year.
Top 3 takeaways:
- You need medical insurance, but there are various options and tradeoffs to consider.
- Budget for it and do your research in advance.
- Explore the subsidies as it makes the cost of insurance significantly more affordable for the average family or person. Then, plan strategically to leverage them.
Show References:
- friends on FIRE episode #128 | Creative ways to save on medical expenses
- friends on FIRE episode #059 | The amazing tax benefits of FSAs, HSAs, and DCAs
- friends on FIRE episode #062 | How to choose the right medical insurance at work
- Learn more about healthcare.govs plan categories
- Shop Healthcare.gov plans + prices
- Article comparing private insurance vs. marketplace plans
- A Purple Life post - My medical insurance plan
- World Nomads Travel Insurance
- Healthcare sharing ministries John Oliver segment
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie and Greg are leaving two high-paying jobs at the peak of their earning potential. They have been financially and mentally preparing for this for years, though they weren’t sure when they would take the plunge. Yes, they can work again if they have to, and it comes down to it, but they do not plan on doing anything “for the money” in their future. Maggie digs into how they prepared to retire early, the financial aspects of how they will fund their retirement and their feelings as they get closer to this next adventure.
How they financially prepared to retire early:
- They’ve always been somewhat naturally frugal, though they still splurge on many things.
- They’ve lived below their means and had large salaries. So that mix made it reasonably easy.
- They were fairly late to the investing game. Maggie didn’t start investing until 2016, above five years ago, when she was 36.
- Maggie has participated in her company’s DCP or deferred compensation plan.
- It’s the combo of saving a lot and getting their living costs reasonably low.
- They have avoided lifestyle inflation as their salaries started getting higher.
Their money plan during retirement:
- This is all a mix of what they will make and what they will spend.
- As a reminder, their cost of living is low. We just did an episode a couple of weeks ago on what it costs our families to live in a year.
- They will fund their retirement through a mix of deferred compensation plans, rental property passive income, and investment income. They will withdraw investment income as a last resource and will only withdraw the amounts they need as they need it, so it protects them from ever having to take out large sums of money if the market is in decline.
- They are also hoping we spend less in retirement. They will save on taxes, they plan to do more travel hacking and finding deals, and just live a simpler life in many ways.
- They can also tap into their 401ks through a conversion ladder as a complete backup, but they do not plan to do this unless there is an extreme emergency. This approach also requires planning five years in advance.
Update on how Maggie is feeling:
- She is starting to realize her mindset is shifting around money. She’s never felt any scarcity around money in a long time and instead has felt abundance. Right now, her paycheck is almost nothing due to deferred compensation, and they are getting closer to realizing what it feels like to spend money when you have very little coming in.
- She is telling more and more people, and that’s coming with its own set of feelings.
- This is an adventure, and while she’s scared of many things, she’s lately more afraid of what life will look like if they don’t make this change.
- Mike reminds Maggie that she’s better on herself, and he has confidence in that bet!
Top 3 Takeaways:
- Early retirement is possible if you financially prepare in advance. It’s not about how much you make; it’s about the gap between what you make and spend.
- They will make some adjustments to how we spend money and their lifestyle, even if it’s just temporary, while they get their feet wet and see how things are going.
- This is a brand new set of feelings and emotions, and they are all working through them daily. They talk every day about how they feel and what emotions are coming up.
Show References:
- friends on FIRE episode #132 | Full-year expense review with our spouses
- friends on FIRE episode #108 | Mid-year expense review with our spouses
- friends on FIRE episode #096 | Freedom is the ultimate financial goal, not retirement
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie’s decision to resign did not happen overnight. As she shares that journey, she specifically digs into why she is retiring early, how she resigned, and what’s next. Throughout the discussion, Mike shares his observations on this journey and decision.
Why Maggie is early retiring:
- 1) High-demand job and overall stressed and burnt out.
- 2) Life is short. She wants to spend more time with her kids, family, and herself. SHe wants to be more present and engaged.
- 3) She can afford to. She’s been preparing financially for this and has achieved “financial freedom.”
How she resigned:
- She told her company. It was stressful at first, but in the end, it was just saying the words, and then it was real.
- She chose to give 6+ months' notice.
How she feels now:
- She’s feeling a healthy mix of excitement and fear. It oscillates between these two feelings about every 5 minutes on average. Though in the end, she does know she’s on the right path.
- She knows she should have more fears about not doing this than doing this.
- She’s thoughtfully observing and trying to appreciate all of these “lasts” that may have previously been stressful.
- She wonders how she will learn how to relax once she’s not working, which we’ll dive into in a future episode.
- She discusses the responses from other people as she tells them her news.
Top 3 Takeaways:
- Maggie is retiring! She’s 41.
- Greg is retiring! He’s 43
- This is awesome!
Show References:
- Friends on FIRE episode #132 | Full-year expense review with our spouses
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss a wide range of topics with Diania:
- Her new kittens, and how they are so young they don’t yet have fear.
- Her mom instilled in her to never let a man take care of her.
- How she was raised financially and surrounded by powerful women growing up.
- It’s been almost exactly one year since Diania quit her job.
- How she’s managing joint finances with her boyfriend, with a mix of joint and separate accounts.
- She’s planning to create a prenup with her boyfriend before they get married. The idea that a prenup is an insurance policy and that they are still betting on their relationship.
- How marriage is legally the most significant thing you’ll do aside from dying.
- She shares her money story and how it started in her 20s being financially illiterate.
- She spent her 20s focused on her income, not her expenses.
- What matters more than income is the gap between your income and your expenses.
- She discovered the Mr. Money Mustache blog and it was like a refreshing punch in the face.
- She realized how much she was wasting her privilege.
- She got out of $30K in debt in 11 months.
- How she successfully negotiated remote work and an unpaid two-month sabbatical to hike the Camino de Santiago.
- One of the first things she did to reign in her finances was to start tracking her finances.
- What is the value underneath that spending, and what is a more resourceful way to get that value?
- How we are conditioned since birth to be consumers and desire luxury; she had to rewire her brain to have more appreciation for the abundance she already had in her life versus constantly wanting more.
- Changing your underlying desires versus using willpower so that spending less is sustainable.
- World Domination Summitt inspired her to create and launch EconoMe. She wanted people to feel like their life was full of possibility if they could just figure out this really important resource (money).
- The people around us, for better or for worse, influence us.
- The power of being surrounded by people in this community.
- Money is this common interest that brings us together, but it’s just the tipping point of what brings us together.
- There’s no one right way to do this. There is only your right path.
- We all have a unique story because we’re all writing our own stories.
Show References:
- Mr. Money Mustache Blog
- CampFI
- EconoMe Conference
- EconoMe on YouTube
- Optimal Finance Daily Podcast
- World Domination Summitt
- Friends on FIRE episode #109 - Talking to your partner about money
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Expense tracking spreadsheet
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Let’s talk dating! While you can use this advice in your current relationship, we’re going to focus this discussion on the early stages of dating and being in a relationship.
What’s the etiquette on who is even supposed to pay for things?
- Dating etiquette factors could include timing, gender, cultural and regional nuances, financial situations, and more.
- We discuss some advice from different friends on same-sex couple financial dating etiquette.
- This is a personal decision, like all things personal finance-related.
Tips for how to deal with things:
- Remember this isn’t yet a special occasion, you’re just trying to get to know someone. Your splurge for special occasions, you don’t need to splurge for first dates. “Don’t blow your load on the first date,” my friend Chep says.
- Be upfront, let the person you were starting to date know that you were on a budget. If that scares somebody off, then you likely are a good fit with that person anyways.
- Remember, if anyone is bothered by these things or being upfront about your budget or financial reality, then you’ve likely dodged a bullet early on and that’s a good thing to learn upfront.
- Consider each person‘s financial situation. If one person has a lot more money and is able to spend more, and wants to do more expensive things and it’s fine paying for it for both people, that’s probably fine. But if one person makes significantly less money, they shouldn’t be expected to do things that are out of their budget or to pay for someone else to do those things.
- Considering taking turns paying for things.
- If this is a heterosexual relationship, If you are the woman, make it clear to the guy that you’re down to do some simple and less expensive hangouts and/or you want to split things. Heck, do this in any relationship.
Tips for saving money during the various stages of the dating process:
- This is perhaps the most amazing tip of all on how to save money while dating, date someone who believes in FIRE as they are most likely pretty frugal! There is actually a dating site called FIRE dating. It’s the first-ever dating website for people into Financial Independence, and of course it’s free!
- Research inspiring content like Atlanta Cheap Date, a loose guide to cheap entertainment in and around Atlanta. Looking for something similar in your area.
- Consider doing a facetime virtual meeting or date first, as this could save you a lot of money and weed out a lot of people who aren’t the right fit for you. You don’t need to spend $50, $100, or $150 to find out that there’s no vibe or connection with someone, especially if you can figure that out on a quick facetime chat. Covid made this an acceptance first way to meet someone, so use it to your advantage!
- And if/when you do first meet in person, dinner and drinks are expensive, and if there’s not a connection then find it out early. It sucks to pay $200+ for a date night out, and then realize that it’s just not a good fit. In the first meeting you’ll likely know if it’s got potential or not, so keep the first meeting less expensive.
- Get creative. You can be fancy and keep things special, while also saving money. For example, go to a bougie grocery store or deli and pick up some really good food and drinks and make a special picnic set up in a local park.
- Pick a really interesting and unique place. A quirky and unique place can take the experiential and memorable place of a super high-end or expensive place, especially for a first date. For example, a food tour of Buford Highway in Atlanta.
- Look for free festivals and concerts in your area; they can be a really fun activity, a great way to get to know someone, and also not expensive.
- Change up the time. Consider coffee or lunch dates initially to get to know someone.
- Plan an at-home date night. If you’re feeling safe about having the person over to your home, invite them over and cook for them, or order in take-out and have a Netflix and chill night. This is not recommended for a first date.
- Don’t be afraid to whip out a coupon on a date!
- Consider skipping any flower delivery. If you want to surprise someone, deliver them yourself and you’ll save tons of money.
- Remember, if they are bothered by any of these approaches, then they are not the right person for you!
Top 3 takeaways:
- Be true to yourself and don’t plan dates that contradict who you really are.
- Get creative - you can date and “flex” without spending massive amounts of money.
- Remember, if they are bothered by any of these approaches, then they are not the right person for you!
Show References:
- FIRE Dating Site
- Atlanta Cheap Date
- friends on FIRE episode #082 | How to show your love for free or on a budget
- friends on FIRE episode #109 | Talking to your partner about money
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start this episode with a couple of basics on travel hacking and credit card churning:
- If you're nervous about it, don’t be! Millions of people play this game. Mike has played it for a decade, earning millions of miles, and his credit score is near perfect. It works if done thoughtfully.
- There are many card types:
- Hotels, Airlines, Cash Back, Retailers, etc.
- Banks like Chase, Citi, US Bank
- Card providers like Visa, Mastercard, American Express
- Business Cards, Consumer Cards
- The variations of these create so many opportunities for sign-up bonuses.
How it works
- The value comes from the sign-up bonuses, not from everyday spending. So if you want to play the game, you need to churn.
- You apply for a card, meet the minimum requirements such as spending $3,000 in the first three months, and then the points are deposited into your account.
- When you get the points, here’s how you use them:
- Hotel points are generally worth about $0.005 apiece. Airline miles are around $0.02 apiece. So on everyday credit card spend, that’s .5% and 2% back.
- Always do the math when you’re looking for ways to use your points and miles. For example, if a hotel room costs $50 or 50,000 points, pay with cash! Because you can likely use those 50,000 points to get $250 or more in value later.
- Think of your miles and points as cash and do your due diligence.
- Our one million miles goal is worth about $20,000.
Risks + Considerations for travel hacking through credit card churning:
- Canceling a card hurts your score because it lowers your available credit, raising your credit utilization. But it doesn’t hurt a lot if you have different types of credit and a good history. Do not ever cancel your oldest or first credit card, as that’s your years of credit history and will impact your credit rating.
- Canceling a card might get you “flagged” by a card provider, but we’ve never gotten denied for a card, which makes us think that if it’s a factor, it’s a minor factor in them approving you.
- Mike typically keeps a card for a year, canceling before the fee or just over a year if there’s no fee. And he has never had an issue.
- Remember that many cards now will only let you earn a bonus once per lifetime, so you can’t get the same 100,000 miles from the Delta Gold Amex card. But there’s a Delta Platinum Amex, a Delta Gold Business, and a Delta Platinum Business. There are so many opportunities; you won’t run out. Check out thepointsguy.com for a great list of cards.
- Don’t do too many at a time. Banks won’t approve you with too many open lines of credit. Also, it’s hard to manage, and you may end up missing a bonus. We recommend you do 2-3 a year if you're starting out. And then ramp up to maybe 5 or 6 when you’re good at the game.
How to make it work
- Keep track of your points with a site like Awardwallet.com. Mike’s been using Award wallet for over ten years. It shows your current balances, links to your accounts, and notifies you when your balances are about to expire.
- Think ahead to where you want to go and have a general plan for the types of points you want to use and earn. For example, if you live in an area that doesn't fly Southwest much, don’t get a ton of Southwest points that you have no plan to use. On the other hand, getting Delta SkyMiles is a no-brainer if you live in Atlanta, a Delta hub.
- Think ahead of big expenses coming up to have your cards in time for those expenses. Remember it can take 2-3 weeks for that card to arrive after you’re approved online.
- Remember to pay these new credit card bills, or it will ding your credit, and you’ll get charged late fees and interest, which you don’t want.
- Remember, you can do personal and business credit cards if you have a business or LLC.
We wrap up this episode by sharing some of our upcoming summer travel plans and how we leveraged points to book those trips.
Top 3 takeaways:
- You could easily rack up 500,000 in travel points this year, especially across a couple who hasn’t done a significant amount of travel hacking already.
- Be thoughtful and intentional about how you approach this, and it can be very lucrative if done well.
- This approach to earning points and then using them takes extra time, so realize this is a tradeoff in your time versus your money. And it can be a fun tradeoff!
Show References:
- Award Wallet - Free Loyalty Points Tracker (they also have a paid version)
- The Points Guy website
- The Points Guy Free Travel Tracking App
- The Points Guy Beginning Guide to Points and Miles
- The Points Guy - Best Credit Cards
- friends on FIRE episode #044 | Credit Scores + Do they matter?
- friends on FIRE episode #133 | How to put a value on your time
- friends on FIRE episode #132 | Full-year expense review with our spouses
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Putting a dollar value on your time is a challenging task, but not for the reasons you may think. It’s not black and white and can vary dramatically by the situation, but we can all go through the same thought process to help us make good decisions with our time.
As listeners of the show will know, we both value our time as a very precious resource, but you may be surprised to learn what time we’ll give up and what time we won’t.
Let’s first start with some time myths:
Myth: I have no free time.
Why it’s wrong: For most people, your schedules are what you make of them for most people. You may currently be stretched too thin, but it’s all within your control. You are as busy as you let the world make you to a large degree.
Myth: I make $100/hr, so anything that costs me less than that I should pay for
Why it’s wrong: You’re not working every second of the day, and not every hour you work directly translates to money. Your annual salary might work out to be $100/hr, but you’re getting that regardless of if you mow the lawn on Sunday morning or not.
Myth: It saves me time to have someone else do it.
Why it’s wrong: True, if someone cleans your house, you save time, but not all the time. You need to seek out and hire that person; you need to schedule with them, answer questions, pay them, inspect their work, and deal with their issues. So you don’t save two hours of cleaning; you save one hour of real-time and spend the other hour managing the process.
Myth: All time is created equal.
Why it’s wrong: Your energy shifts throughout the day and some people have more energy in the morning versus at night. Not all time is created equal, so there’s value in recognizing when you have more energy and leveraging that and appreciating when you have less energy and expecting less productivity in those periods. If you try to spend all of your time in a hyper-productive mode you will burn out.
Questions to ask yourself to evaluate spending decisions based on the value of your time:
- Could I be incrementally making money with the time? If so, how much?
- How much time would it take me to set it up and manage the work someone else is doing?
- How much do I dislike the task?
- What else could I be doing with that specific time?
- Could I move this task to a different time of the day or week that works better?
- Would the quality of my work have an adverse outcome?
- Are there safety or legal concerns?
- Would I learn a new skill, improve a skill or challenge myself?
- What’s the cost difference?
- Where is your money spent going, and is it to a good cause or someone else trying to support themselves?
- The cost is the last question, and when you’ve answered those, you can ask yourself, is this specific scenario worth that specific dollar amount?
Let’s talk through some real examples:
- Hiring someone to clean your house every other week for 2 hours.
- Taking a 2-stop 25-hour flight vs. a 1-stop 10-hour flight.
- Doing your own yard work every other week for 2 hours.
- Doing your own taxes once a year for 5 hours.
Top 3 takeaways:
- Your time is valuable, but that doesn’t mean you always need to pay someone for it back.
- You don’t always save as much time as you think you do by outsourcing.
- There’s no formula for putting a dollar value on your time. Still, if you evaluate each scenario independently, you will identify what you are willing to spend to buy it back over time.
Show References:
- Book: Off the Clock: Feel Less Busy While Getting More Done
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We find it fascinating to learn what other families spend in a year, so we’re sharing what it costs our families of 4 and 5 to live for a whole year. If you’ve ever wondered what we spent in an entire year, well now you’ll know! We dig into why and how we track our expenses, what it costs our families to live for a whole year and reflections on a year’s worth of expenses.
Why we track our expenses:
- One of the most important financial metrics every person or family should know is what it costs them to live for a year, even if it fluctuates year to year. This is one of the most important numbers you need to know for early retirement or general financial planning.
- The best way to reduce your expenses is to know where your money is going. Then, what gets measured gets better.
How we track our family’s expenses:
- Mike and Britta manually track their expenses by keeping receipts and logging them into an excel sheet.
- Maggie and Greg leverage Mint to track all expenses. They track expenses in Mint, categorize them, and then download and summarize them in excel every 3-6 months.
- We worry less about the how and more about making sure we have a handle on what we’re spending as a family. Some people prefer apps such as YNAB (you need a budget), though we prefer a free approach vs. paying for an app or service.
Before we review things in detail, some additional context:
- These numbers do not capture any of our income; they are focused on our expenses. This does not include any rental business expenses or child support for Maggie and Greg.
- We have also both paid off our mortgages, and ironically we did it through a lower cost of living, and now it’s even further reduced our cost of living. It’s the compound power of spending less!
Full-year review of our families spending levels:
- We each share our total expenses and top categories of spending.
- In addition, we each share the top things we feel good about and areas where we’d like to improve in 2022.
Top 3 takeaways:
- It’s an important investment in your finances and relationships to track and review expenses with your spouse.
- There’s no perfect way to do this. You can be as detailed or as high-level as you want to be. It’s called personal finance for a reason.
- It can be fun and helpful to review and discuss this with another family.
Show references:
- Friends on FIRE episode #109 - Talking to your partner about money
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #117 - The ultimate paper-free way to control your financial life
- Friends on FIRE episode #060 - Budgeting vs. Tracking Expenses
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss a wide range of topics with Deb and Chris:
- How they each grew up financially and what it taught them.
- Their limiting beliefs about money.
- Deb’s health issues and how that motivated her to think differently.
- When it clicked that Deb didn’t need more money, but she needed more time.
- How quitting their jobs didn’t solve all their issues.
- Their rental property empire, how they’ve built it up, and what money it’s generating for them.
- The fears they have.
- Their timeline and the various financial decisions they made along the way.
- How Deb realized she couldn’t do it all. She couldn’t be the perfect mother, be perfect at her job, etc.
- What is the real meaning of their life, and what is it that they really want?
- Chris’s 2 year quit-iversary.
- How they are spending less on their kids because they pay their kids as part of their rental property business, so their kids mostly spend their own money on the things that they need.
- How low they’ve gotten their annual cost of living down to, minus discretionary items.
- The concept of destination addiction.
- The reality that you might need to step away from your daily stresses to decompress and truly figure out what makes you happy and what you need.
- How they are spending the encore portion of their lives, and how their blog and podcast have allowed them to serve and inspire other people while also filling their buckets.
- Their billboards would say: (1) Don’t put your dreams on a waiting list. (2) If you truly loved yourself, what would you do?
Show References:
- Go Bucket Yourself website
- Deb’s Book: The Other Side of Perfect
- Deb’s Book on Amazon: The Other Side of Perfect
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Happy new year! Everyone is focused on their new year’s resolutions, working out, eating healthier, and ultimately becoming better versions of themselves. Well, our best advice for becoming a better version of yourself this year is to start meditating. And the good news about meditation is that it’s completely free. Everything you need to meditate you each have on your person right now. And if you have a smartphone, you have an extra resource to help get you started and stick with it.
In this episode, we dig into:
- What is meditation
- The benefits of meditation
- How meditation can improve your finances
- How to meditate
- Suggested free apps that can support your meditation practice
- Our thoughts on paid meditation apps
Top 3 Takeaways:
- Meditation is an incredibly powerful tool, and it’s scientifically proven.
- Meditation is easy. People often overcomplicate their expectations on meditating and think they can’t do it. Anyone can do it!
- Meditation can help your relationship with accumulating more things, which will, in turn, help your finances.
Show References:
- 9 types of meditation: Which one is right for you?
- 27 meditation statistics for your well-being in 2021
- Transcendental Meditation
- Insight TImer App - #1 free app for sleep, anxiety, and stress
- Audio Dharma app - Freely offered by the Insight Meditation Center
- Andrea Fella Working with Desire dharma talk from Audio Dharma - a free talk that discusses desire
- Smiling Mind App (free)
- UCLA Mindful App (free)
- Headspace App (paid)
- Calm App (paid)
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We kick this episode off with a listener comment about greentoe.com and read some of the awesome reviews you all have left us over the last few months. We so appreciate it when you all leave us written reviews on apple podcasts.
This is our 129th episode and our 52nd episode this year. We haven’t missed a week since we started in Jan 2020, and we even did two episodes for some weeks during the start of covid. There’s so much to reflect on! We dive into our year-end reflections, favorites, and predictions:
- What we’re most proud of
- What we’ve learned
- Our favorite podcasts this year:
-
083 | Travel Hacking with Julia from Geobreeze Travel
-
085 | Untamed + Money – Mike and Maggie talk about their feelings
-
086 | Leaving Corporate America and changing the way we work with Rich + Regular
-
090 | Why you don’t need a financial planner
-
121 | Career advice from 30+ years in Corporate America
-
078 | A conversation with the ORIGINAL friends on FIRE (Mike’s dad + his friend Mark)
-
095 | How to stop caring what people think and start living
-
103 | Spending more time with your kids, a case for FIRE
-
093 | How to blow $600K with The Price of Avocado Toast
-
122 | Outrageous generosity, charitable giving, and gratitude, with Joel O’Leary
-
127 | Our early retirement plans and why are we still working!?
-
- Your favorite podcasts based on # of listens:
-
112 | How to know if you are FI
-
106 | Retiring at 30 with A Purple Life
-
108 | Mid-year expense review with our spouses
-
086 | Leaving Corporate America and changing the way we work with Rich + Regular
-
107 | Why you should reject Dave Ramsey’s Debt Snowball Method, and what to do instead
-
110 | Automating your finances to create better financial habits
-
096 | Freedom is the ultimate financial goal, not retirement
-
113 | 8 tips for financial wellness
-
109 | Talking to your partner about money
-
- The awesome people we got to meet and interview this year:
- Mike’s dad and his best friend - #078 | A conversation with the ORIGINAL friends on FIRE (Mike’s dad + his friend Mark)
- Julia - #083 | Travel Hacking with Julia from Geobreeze Travel
- Kiersten and Julien - #086 | Leaving Corporate America and changing the way we work with Rich + Regular
- Jose - #091 | Millennial Money Mentoring with Jose Hernandez
- Haley and Justin - #093 | How to blow $600K with The Price of Avocado Toast
- Joel - #122 | Outrageous generosity, charitable giving, and gratitude, with Joel O’Leary
- Nicole and Nadia - #102 | Twinning your way to financial freedom with Nicole + Nadia, aka the Wealth Twins
- Court - #124 | The Modern FImily – A retired family of 4 living happily on $30K a year
- A Purple Life - #106 | Retiring at 30 with A Purple Life
- Maggie’s brother Alex - #116 | Are you ready to invest in Crypto?
- Jesse - #119 | What’s in your best interest with Jesse Cramer
- Predictions for 2022
References:
- Greentoe.com - Name your price on cameras, TVs, appliances, and more!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk through many creative ways you can save on medical expenses:
- Leverage an FSA for any medical expenses if you’re eligible, so you can save pre-tax dollars to cover medical expenses.
- Leverage an HSA or Health Savings Account if you’re on a high-deductible plan.
- Ask if there is a cash rate is for medical services and consider paying cash versus using your insurance.
- Leverage mail-order prescription services.
- Leverage Teladoc services.
- Find out what services cost before you go in for a service; don’t be afraid to ask questions.
- Use GoodRx for their applicable services, and save on prescriptions and doctor’s visits.
- Plan ahead about the timing and spacing of non-time-sensitive medical expenses.
- Check your bills thoroughly to make sure you’re getting charged correctly.
- Research and ask questions on covid-tests, immunizations, and other related services.
- Avoid going to an Urgent Care office unless it’s critical.
- Avoid going to an Emergency Room unless it’s truly an emergency.
- If you’re a part of a blended family, get as many kids as you can on the same medical plan, even if they move across different households between parents.
- Consider a hybrid approach to who’s on what plans across our household.
- Consider not having dental or vision insurance and instead just paying out of pocket as you have needs, or explore signing up for a services plan at your local provider’s office.
Show References:
- 15 ways to save on medical expenses - Mostly minimal life blog
- Goodrx
- Friends on FIRE episode #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
- Friends on FIRE episode #062 - How to choose the right medical insurance at work
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In response to many listener questions, we finally share our early retirement plans and talk about why we’re both still working and when and why we’ll stop working. Then, Mike reads a poem, and Maggie starts crying. This might be the first time Maggie has cried on the podcast, but it definitely won’t be the last!
We share why we’re both still working:
- We like our jobs and the company we work for
- We’ve been able to negotiate some flexibility at work, from part-time schedules to summers off.
- We get paid well for what we do, and we like the extra padding we’re able to add to our FI funds.
We also talk through the one more year syndrome, what we’re afraid of in leaving our careers, and the importance of following your dreams and taking the road less traveled.
Top 3 Takeaways:
- We do plan to retire in our early 40s.
- We’re assessing things in our lives as we go, and if any of the important items are out of whack, we will adjust our plans accordingly.
- Don’t be afraid, and get caught up in one more year syndrome. Be true to your why and what matters to you in life.
Show References:
- Robert Frost’s Road Not Taken Poem
- Landshark’s Blog
- Wait by Why - The tail end
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We walk through the parts of our 2021 financial checklist that are most applicable at the end of the year and suggest more detailed episodes to check out if you want to dig into more detail. The most important items to remember at the end of the year include:
- Max out as much as you can put into your 401k, 403b, rothIRAs, and/or IRAs
- Do your backdoor rothIRA conversion if you take that approach
- Check your emergency fund, brokerage accounts, etc., and review how you’re doing versus your goals. Then, consider and take action on any changes you want to make.
- Max out your college savings 529 plan contributions if you want to take advantage of your state’s tax benefits for college savings contributions.
- Review any of your debt and see how you’re doing paying it off.
- Make sure you’ve used all of your FSA or DCFSA funds before the end of the year. Review what you’ve already spent, and make plans to use any remaining funds before the end of the year as they are “use it lose it” funds.
- Be thoughtful about your medical expenses and review your deductibles to optimize when you plan for certain non-urgent medical needs.
- Claim any other financial benefits that your company offers before the deadlines; for example, some companies have programs like Virgin Pulse to earn health savings dollars.
- Review your expenses and how you’ve done throughout the year on spending versus your goals.
- Prepare yourself for 2022 goals and decide what you want to tackle next year.
- Consider if you need to sell any stock to optimize for tax-loss harvesting.
- Consider any charitable giving you’d like to do before the end of the year.
We also run through our 2021 goals and share all of the areas where Maggie’s beating Mike. Only half-joking, Mike’s also doing awesome against his goals! The purpose of this discussion is to thoughtfully and intentionally set and review goals. Don’t beat yourself up if you’re missing some, especially if you know why and you’re aligned with the tradeoffs you made throughout the year. Instead, feel good about the progress you’ve made, the learnings you’ve gathered, and take that momentum into wrapping up 2021 strong!
Show References:
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 Financial checklist available on friends on FIRE website for free
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #114 - What’s a rothIRA and do I need one?
- Friends on FIRE episode #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #25 - College - Choosing your approach
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Target is a lovely place, but it’s also a dangerous place. It’s full of temptations, from cute clothing to adorable home decor to delicious snacks and more things I never knew I needed. And don’t get us started on the dollar spot!
A few of our tips for spending less at Target or any similar store:
- Don’t go inside the store:
- Limit your trips as much as possible. The less you go, the less you’re tempted. I maybe go once a month lately.
- Avoid walking inside the store when you need things: leverage order online and pick-up in-store or at the curb. Target now offers this for cold groceries too!
- Leverage Target’s app and free shipping for Red Card members and have items shipped to your house, so you don’t have to walk into the store.
- If you do have to go inside:
- Avoid the dollar spot. Just walk right past it. You’re strong. You can do this!
- Don’t bring your kids. It might be cheaper to hire a babysitter if you have to because kids constantly ask for stuff, or they distract you so much that you’re stressed, and you make poor decisions to get out of the store.
- Go in with a list.
- Ditch a shopping cart, and grab a handbasket or get wild and go basket-free.
- Overall savings tips:
- Get a Red CARD so you can earn 5% off all purchases.
- Use the app. The Target app is full of offers, gift card rebates, discounts, and more.
- Leverage Target’s price-matching for sales on previous purchases within the last 14 days. You can find more details on their website.
- You'll get five cents off your total purchase for each reusable shopping bag you bring and use in-store.
- If you have a moment of weakness and buy something you later regret, you can return it!
Top 3 Takeaways:
- Limit the times you go into any physical stores.
- When you do need things from these stores, avoid walking into the store.
- When you do go inside, bring a list and go by yourself.
Show References:
- Target Price Match Policy
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Court and Nic are a married couple with two beautiful children, living retired in Canada on about $30K a year. We discuss a wide range of topics with Court from Modern FImily:
- How she was raised financially
- How she first learned about financial independence
- Paying off $65K in loans dring 2.5 years
- Finding your people and community and how it leads to further optimizations
- Her frugal lifestyle and some of her approaches and tips for saving money
- How to save money while still socializing and making connections with friends
- How to continue to cut costs while not depriving yourself along the way
- How they save on the top three expense categories; housing, transportation, and food
- How they spend less than $30K a year as a family
- How to hack your life to save money
- The excitement and pleasure of finding a good deal versus spending money
- Questioning why we’re all working so hard to buy fancy things just to have to keep working a grind for 30 or 40 years
- How to have a meaningful life without having to break the bank on it
- The power of compounding interest
- The difference between frugal and cheap
- The importance of downtime
- Being a valuist - figuring out what brings value to you and your life and then cutting out the rest and the fluff. Being a valuist is getting your spending in line with what you value.
- How they make friends in their early retirement lifestyle
- Her billboard sign: Prioritize your most precious resource, time!
Show References
- Mr. Money Mustache’s blog
- Modern FImily blog
- Modern FImily on Instagram
The government creates tax benefits for two main types of retirement savings accounts: IRAs and Roth IRAs. And within those categories, there are multiple kinds of account types. But let’s explain the difference simply: an IRA is tax-deferred, meaning that you don’t pay income taxes on the contributions; you pay it when you make a withdrawal. A Roth IRA is the opposite, where you make contributions after tax and then never pay taxes again.
Forget about the tax part for now though, because this is really about compound growth and the opportunity cost of your purchases now. We’re going to share some examples of how much money you could have based on different scenarios. Remember that we’re using simplifying assumptions like a constant growth rate of investments and ignoring capital gains taxes. The point is not to give a specific number but to show the massive impact of saving now and saving consistently.
| * If you max out your 401K at 20,500 for 5 years when you're 25-30 and never put anything in again, then at age 65 you'll have $1.35M. Your 102K investment turned into 1.35M | | * If you put in $5K a year for 20 years from 25 to 45, and never put in anything again, then at 65 you'll have $848K. A similar 100K investment became 848K, but that's $498K less than if you had invested the same amount earlier in life. | | * If you put in $2500 a year for 40 years from age 25-65, then you'll have $534K. That's almost a million less than if you had put in the same amount of money earlier on. | | * If you put in $2500 a year for 25 years from age 25-50, and then at age 50 decide to max it out at 20K a year for 15 years, at age 65 you would have only $1M (but in this scenario you put in $362K vs. my other 3 scenarios you put in only $100K) | | * The lesson here is: sacrifice and save earlier on in your life and it will pay off |
So what is the one thing you need to do to plan for a traditional retirement? SAVE. RIGHT. NOW. The more, the earlier, the better. At the same time, it’s never too late to start.
You may need to make some tradeoffs earlier on in life to do this, but we think the tradeoffs are worth it. Examples of things you could sacrifice to be able to max it out earlier in life:
- Control your housing expenses. It’s most people’s #1 expense category. Don’t buy a house quite yet. Instead, consider having a roommate or other forms of house-hacking. LIve with your parents for a year.
- Don’t buy a fancy new car.
Here are a few additional tips related to retirement accounts:
- Make sure your 401K is invested versus just sitting in cash!
- Make sure you’re maximizing your employer match.
- Invest your 401K aggressively if you’re comfortable with this, especially if you’re young and don’t need it anytime soon.
- Try to avoid the target date funds. They are less aggressively invested, and they have higher fees on them.
Top 3 Takeaways:
- You can easily reach a traditional retirement with your 401K if you save early, consistently, and at a reasonable level.
- Your purchase decisions now impact you many times greater in the future because of compound growth.
- It takes time to build momentum, but trust us, saving now is the most important thing you can do.
Show References:
- Friends on FIRE episode #18 - House Hacking
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #114 | What’s a rothIRA and do I need one?
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss a wide range of topics with Joel:
- Value in automating your behavior of giving back
- Hands-on approaches to giving and being generous
- An abundance mindset
- Adding some personality into your giving
- The ripple effect of how you feel once you give
- Paying it forward
- Prosocial activity
- Inter-dependence in communities
- Outrageous generosity
- Uncommonly patient
- Being more intentional with your giving
Joel also shares some creative ideas for being generous:
- Visit a grave of a deceased family member for someone who can’t make it there
- Operation Elf
- Gift your airline miles or hotel points to charity
- Donate your time and expertise pro bono - doing favors for people with your skillset
- Sign-up for Amazon Smile, and a percentage of your purchases can go to a cause of your choice
- Giving up something you don’t need and reallocating that to a cause that does need things
Top 3 Takeaways:
- Being outrageously general and giving back matters.
- Like all things personal finance-related, it’s personal. Give what you can when you can, whether your time, money or more prosocial behavior!
- Challenge yourselves and others to take a step back and be thankful for what you have and what you can personally give to this world.
Show References
- Friends on FIRE episode #061 - Habits, happiness, and hard work with 5am Joel
- Book: The most good you can do by Peter Singer
- 5am Joel Post - My friend is outrageously generous
- Budgets are Sexy article: How to include charitable giving in your budget and other ways to give
- Budgets are Sexy article: Volunteering sucks, but it’s also kind of awesome
- Find a Grave
- Operation Elf
- Charity Water
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Episode Summary:
In this week’s episode, we share 30+ years of wisdom and advice from our combined 30+ years working in Corporate America. We talk through our experiences working in Corporate America, what we’ve learned, and what has made us successful over the years. We share the importance of worrying about yourself, being kind, choosing your battles, making good choices, being indispensable, always looking for solutions, giving back, and taking care of yourself. If you do all these things, we believe you’ll find career success, and with that comes money, so continue building strong financial habits.
Episode Notes:
Mike has spent most of his corporate career working in corporate finance-related roles, and Maggie has spent most of her career working in digital marketing, marketing strategy, and eCommerce product management. We’ve both been successful and well thought of and been paid well as a result. We’ve learned a lot over the years.
Here is our biggest career advice to all of our listeners:
- Worry about yourself. The only person you can control is yourself. Don’t compare yourself to others, in your head, or aloud to your superiors and colleagues.
- Be nice. Bodhicitta, "enlightenment-mind, is the mind that strives toward awakening, empathy, and compassion for the benefit of all sentient beings.” Find your empathy and compassion towards other people. Assume the best. Play nicely with others.
- Make good choices. Life is made up of choices. You choose your path. You choose your response. You choose your attitude.
- Work with intention. Take a step back and decide who you are. Be mindful, and define your purpose. Focus on the journey and not the destination.
- Speak the truth. Say what you think. Give feedback. Practice radical candor. Care enough to be honest. Be a part of the solution.
- Be a linchpin. Do the work. Don’t phone it in. Don’t care about credit; care about change. Provide such value that you are not easily replaced.
- Better is possible. We are all a work in progress. We are all imperfect. Drive positive change in the face of negative conditions, and appreciate where we are.
- Less is more. Simplicity. Minimalism. Want Less. Do More.
- Give back. At work and outside of work. You are wealthy. Effective Altruism. Conscious Capitalism. Leave things better than when you came.
- Take care of yourself. Eat Well. Sleep. Exercise. Meditate. Take your vacation.
- Be you, whoever that is. Lean in to what makes you you. Practice who you wish to become.
Top 3 Takeaways:
- It takes hard work to be successful.
- It takes EQ as much as IQ, and you have to lean into the softer skills, often more so than the hard skills.
- As you succeed in your career, the money will come, and you need to be prepared to handle it responsibly.
Show References
- Book: Linchpin by Seth Godin
- Linchpin Manifesto
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
People are already predicting this will be a more expensive and chaotic holiday season due to labor shortages and supply chain issues. The holidays can be a tricky time of year, emotionally, financially, and physically. We’re eating too much, gaining weight, being stressed at work as it’s been a long year, and buying things to make ourselves feel better. So don’t get too caught up in “oh, it’s the holidays” and spending too much money. This is the perfect year to focus on reigning in your holiday spending!
Last year we did an episode on 6 ways to save during the holidays, but we’re upping it with a list of 25 ideas for saving this year!
25 tips to take control of holiday spending:
- The deals are already here, so you can start shopping now. Avoid last-minute shopping, especially this year. Amazon has already rolled out Black Friday-level discounts, and Target announced their “deal days” online. Many are predicting a lot of things will be sold out before December.
- Shop local. Shopping at smaller, local retailers can help you avoid shipping costs, delays, and higher prices due to supply chain issues. And support your local community and businesses!
- Make a shopping list. Do not just go browsing stores with no plan. That’s a recipe for disaster. Making a list will save you money when you’re shopping any time of year, but especially during the holidays.
- Think about what your kids need vs. want. Mix in some needs to their gifts. Almost half of my kid’s Christmas presents are things they need, like new pajamas.
- Set a budget for your gifts for people, especially children. If you just keep picking up different things for your kids over a couple of months, you’ll have way more than you need or intended.
- Set spend limits to keep things reasonable. Consider discussing and setting spend limits with friends or family where this might be helpful.
- Spend within YOUR budget, not other people’s budgets or expectations.
- Consider a gift exchange. If you have a group of friends, co-workers, or family that you’ll be with and would typically all be expected to buy gifts, suggest doing a white elephant style or more traditional gift exchange.
- Avoid the season’s “hot” gifts. They’re overpriced, and if they’re great, you can get it for half off in 6 months. If it’s on the cover of the Amazon catalog, avoid it.
- Tame and limit the holiday decor. It’s great if you love holiday decor, but all things in moderation. For example, you don’t need new holiday pillows for your couch every year. I have a few bathroom holiday towels I put out, and I’ve been putting out the same towels for 15 years. They spend one month in action, so they last a long time! Instead, focus on creating hygge or holiday coziness, which doesn’t cost a lot of money.
- Spend reasonably on the holiday entertaining. You can make an amazing charcuterie board from Aldi or Trader Joes; it doesn’t have to break the bank. Keep things simple, fun, and affordable! Remember the holidays are about spending time with your friends and family, not impressing them with fancy things.
- Consider buying things second-hand or used.
- Get creative and make things!
- Give the gift of your time. For example, give your partner a coupon book for a massage or give your kids a coupon book for a game of four square.
- Give your kids a rain-check if there is something they really want where the price has gotten unreasonably high. Then, get it for them in March 2022 when prices get back to normal.
- Leverage coupons, offers, and sales. This could be choosing clothing for your kids from Sams Club and Costco or looking at the offers inside your credit card app to see where you can score a great deal.
- Always google search for a coupon or discount code before you make any purchase online. And considering using apps like Honey to ensure you’re getting the best deals and coupons.
- Earn cash-back, points, or miles on your purchases. Use a cash-back site like Rakuten to get a little something extra for our purchases. Or put your gifts on a credit card to earn points or miles for travel, but make sure you only charge things you can pay off in that same month.
- Opt-in to emails from your favorite stores, so you get notified about their best deals. On the flip side, if you don’t have self-control, don’t do this, as email marketing might cost you more in the end.
- Get your spouse or partner to agree to no gifts this year!
- Consider gifting experiences over things.
- Find a less expensive alternative for Santa pictures, family pictures, or mailing holiday cards.
- Give back in your time or money to others in need this holiday season, and do this in place of traditional gifts.
- Realize that you don’t need to spend a lot during the holidays to be happy. Avoid keeping up with the Joneses and lifestyle inflation.
- Remember that you’re at the end of the year, and you want to finish the year strong!
- Don’t be afraid to return things you get that are unwanted or unneeded. Again, we have a whole episode on this!
Top 3 Takeaways:
- Remember what the holidays are all about. Spend some time thinking about what makes the holidays special for you.
- Commit to a budget for your spending on gifts and entertaining this holiday season, and track your spending.
- Realize that you don’t need to spend a lot during the holidays to be happy. Avoid keeping up with the Joneses and lifestyle inflation.
Show References
- friends on FIRE Episode #069 - Reconsidering the Holidays – 6 ways to save money this holiday season
- friends on FIRE Episode #79 - How to return unwanted or broken gifts
- What is Hygge?
- Honey - Automatic coupon codes, promos, and deals
- Invisible Hand - Find the lowest price on shopping, flights, hotels and rental cars
- Go Budget Girl - Where to find affordable holiday family pajamas
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss a wide range of topics with Jesse:
- How Jesse grew up financially and what it taught him.
- How The Best Interest got started.
- His five core pillars on the Best Interest are: (1) personal finance is personal, (2) money involves math and psychology, (3) money isn’t a dirty subject, (4) optimize your success-to-stress ratio, and (5) personal finance isn’t rocket science.
- The financial order of operations.
- His love of the YNAB app.
- If given the chance, what he would write on a billboard.
- His recent engagement and why his future brother-in-law was wearing a ghillie suit.
Show References:
- David Foster Wallace Commencement Speech - “this is water” reference
- The Best Interest Blog
- The Best Interest 5 Core Pillars
- The Best Interest Financial Order of Operations
- The Best Interest Podcast
- Amazon: ghillie suits
- You Need a Budget App
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
For most companies, the October and November timeframe is when employees can select their benefit options for the next year. It can be a complicated and cumbersome process, but the most frustrating part is often evaluating the medical plans. They are by design complicated. The rest are simpler than they seem.
Here are the common types of benefits programs:
- Medical, prescription, dental, eyecare
- Additional medical such as critical-care of hospital insurance
- Health Savings Accounts/Flex Savings Accounts/Dependent Care Flexible Spending Accounts
- Life Insurance
- Retirement and Savings Plans
- DCP
- Employee stock discount programs
- Discount programs (mattresses, life insurance, etc.) - I have a strong POV here!
We review each of the above types of options and consideration at a high level, and reference past episodes where we cover these topics in more detail.
Top 3 Takeaways:
- Benefits season is exciting!! Leveraging the right benefits can be lucrative and valuable, so spend the time researching the right decisions for you.
- Taking advantage of these benefits is important, but don’t beat yourself up too much trying to squeeze every dollar of value.
- For benefits where you contribute money like savings plans, try to max those programs out!
Show References:
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
- Friends on FIRE episode #062 - How to choose the right medical insurance at work
- Friends on FIRE episode #081 - Everything you need to know about life insurance.
- Friends on FIRE episode #114 - What’s a roth IRA and do I need one?
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Evernote is a multifaceted cloud-based software platform for note-taking and record-keeping. It can serve a multitude of purposes, but we’re going to focus just on the record-keeping benefits.
We each share our personal experiences with Evernote, how it works and why we love it so much.
How Evernote helps with your financial management:
- You have access to your records from anywhere because it’s in the cloud
- The documents are protected and backed up
- If you need to return an item to a store, you have the receipt
- If you need to do a warranty repair, exchange, or find out if your item is under warranty, you have the receipt
- If you aren’t tracking expenses or are just starting, you can look back through receipts to find comparison expenses.
If you want to declutter your life of paper, be more organized, have better access to your records, or just track your finances better, Evernote is the way to go.
Top 3 takeaways:
- Financial records and receipts are a real headache, but they are important to keep.
- Going entirely digital helps declutter your life and gives you better access to your important records.
- Evernote can do so much more than just scan and hold documents, but even at its most basic function, Evernote is one of our most valuable subscriptions.
Show References:
- Evernote - summary of their free and paid plans
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start off defining some key terms so everyone understands what blockchain, cryptocurrency, bitcoin, and NFTs are. We then discuss our own personal experiences with each of these. Finally, we wrap up the episode discussing the pros, cons, risks, and a decision tree to help you decide if you’re ready to invest in cryptocurrency.
Show References:
- Skimm money decision tree - Are you ready to invest in Crypto
- Coinbase - What is cryptocurrency
- Book: Sapiens: A Brief History of Humankind
- Dutch tulip bulb market bubble
- Grayscale bitcoin trust
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
You can learn how to do just about anything for free. There are so many amazing resources available to all of us.
Some of our favorite free resources:
- YouTube - Youtube has some of the most amazing and well-produced content, from how to fix a wheelbarrow tire to how to fix your roof if squirrels are eating the lead on your pipe boots to how to fix a leaking faucet.
- Books - You can learn so much from a non-fiction book, from financial stuff to gardening to self-improvement. The Libby app, your public library, and little free libraries are your avenue to getting access to books for free. The Libby app is a free app where you can borrow ebooks, digital audiobooks, or magazines from your public library. You need a library account, which you can get at your local library, and then you use that to do a one-time sign-in process, and it’s so simple to use after that. It works almost exactly like Audible, except you have to check out a book, you may have to wait for more popular books, and you have to return the digital download so you are on a timeline. My husband and I both quit audible 3+ years ago, and now primarily use Libby. If you really do for a book that’s incredibly important and not on libby, you can buy individual credits and start/stop your membership.
- Podcasts - Well, you’re listening to one right now, so we think you already get the concept that you can learn some amazing things through podcasts.
- Instagram - Instagram is also full of great content, from the posts themselves to people’s stories. The bookmarked/saved stories are at the top of many accounts having amazing content saved within them. One of my favorite accounts is @gocleanco and they have stories saved on how to clean almost anything from your washing machine funk to how to “strip” sheets to give the life again.
- Blogs, starting with Google to find the right ones. Open a number of different links to compare what you’re learning and look for consistency, trusted sources, and other nudges that the info feels legit. Don’t forget to pay attention to sponsored listings in the search results, as we would suggest you focus on things with strong “natural search” rankings as it’s a nod from Google it’s a frequently visited and trusted website, versus just about anyone can buy a paid ad on google. Image search can also come in very handy if you want a quick visual of something.
- Pinterest - I especially love Pinterest for recipes. I own many cookbooks, especially from when we first went vegan. But I bet 99% of the recipes I cook today from Pinterest. My cookbooks are displays on a shelf. It’s just easier and faster, and I can search based on some ingredients I have handy.
- WebMD and googling health issues. It can sometimes save you a trip to the doctor or reinforce that you do need to go. The risk with this is some items can really freak you out.
A few reminders as you’re leveraging these free resources:
- Google is your friend. Google “how to…” and you’ll find an answer.
- Google incognito is your other friend.
- Remember many of those “free” resources you are actually paying for in some way, so take full advantage. Libby is funded by our tax dollars, as it’s associated with public libraries. YouTube video creators are making money off the ads in their videos, so are some podcasts. To be clear our podcast isn’t making money from you because we don’t have ads, and that’s an intentional decision for us right now.
- Still support the content creators and causes you care about in whatever way makes sense for you.
- Start with the free resources first, and fully exhaust them before you consider paying for something.
- There are a lot of things you could hire someone else to do, but it can save you a lot of money and be incredibly satisfying to learn how to do it yourself. Give it a try, and if it doesn’t work out, then explore a professional.
- Consider asking someone to teach you how in person through a local neighborhood group, especially if it’s a more complicated hands-on task.
- Invest in a good pair of headphones that work for you, and you can learn things while you’re multi-tasking. We listen to books, podcasts, and sometimes youtube videos while I am cleaning the house, doing yard work, going on walks, running, and just about anything I can do while listening.
- Remember to be safe, and don’t get in over your head in a situation that’s not safe. This could be electrical work if you’re not properly trained on safety, dealing with heights, getting underneath a car, or dealing with poisonous or toxic substances.
Top 3 takeaways:
- You can learn just about anything for free, and from a legit expert or professional.
- It’s satisfying to learn new things and figure out how to do something yourself. It keeps your brain sharp!
- Always start with exploring free resources before you immediately assume you have to buy something. Libby before audible is a perfect example. Public library before Amazon. Youtube before you hire someone.
Show references:
- Libby
- Money on the Table series on YouTube
- GoCleanCo on instagram
- Epic Gardening on YouTube
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
There are two main types of retirement savings accounts that the government creates tax benefits for IRAs and Roth IRAs. And within those categories, there are multiple kinds of account types. But let’s explain the difference simply: an IRA is tax-deferred, meaning that you don’t pay income taxes on the contributions, you pay it when you make a withdrawal. A Roth IRA is the opposite, where you make contributions after tax and then never pay taxes again.
The key here is that you want to skip paying taxes where they are going to be highest. If you don’t earn a lot now, a Roth probably makes sense. If you do earn a lot and pay high taxes, you probably want a traditional 401k tax deferral.
There are 3 types of Roths:
- Roth IRA: $6,000 contribution limit, or $7,000 if you’re over 50. There are income limits though, so if you’re married, your MAGI is $198K. Single is $125K. After that, your contributions start to phase out, and eventually, you’re restricted.
- If you’re not eligible for a Roth IRA, you can still do what is called a Backdoor Roth conversion from a typical IRA.
- Roth 401k: Works just like your employer 401k except contributions are made after-tax. Same $19,500 limit and you’ll get a match.
- Mega Back-Door Roth: This one is cool. If your company offers an “after-tax” 401k, you can make contributions up to $38,500. But only when the plan allows you to, which is likely only when you leave, can you roll that into a Roth. You’ll pay taxes on the earnings, but you can make a giant contribution to a Roth.
Why are Roths so amazing?
- Won’t pay taxes again.
- Easier income planning for retirement.
- You can rollover IRAs and other Roth products into your self-managed Roth.
So what should you do?
- Check your company plan to see if you have a Roth 401k or after-tax 401k.
- Consider if your tax bracket will likely be lower or higher in the future.
- If you’re eligible, contribute to a Roth IRA.
- Consider switching contributions from a 401k to a Roth 401k if you think your tax situation will favor it.
- Don’t overthink this. Doing one and choosing the “wrong” one is better than being paralyzed by decisions.
Top 3 takeaways:
- Roth IRAs are an amazing tool to minimize taxes in the future.
- Choosing between an IRA and a Roth comes down to your current taxes vs. your future taxes. Avoid paying whichever is higher.
- This is just one tool for savings, so try to max out your contributions on a Roth and every other tool you have at your disposal.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
After reminiscing about how we met and started this podcast, we jump into a live discussion on financial wellness.
What is Financial Wellness? Let’s think about it as we would physical wellness:
- Physical wellness means your body is working efficiently. You can exercise and move easily, and those activities are enjoyable.
- You aren’t chronically sick or get sick often.
- You aren’t in pain, and normal activities don’t cause pain.
- And you can recover from injuries or sickness quicker when those things do happen.
- Having an accountability partner or group will help you through those tough workouts.
- Lastly, physical wellness means living a long, happy life.
Now let’s talk about financial wellness in the same way:
- Your management of financial resources operates efficiently, and you can spend money on the things you need to live a happy life without trouble.
- You aren’t under a mountain of unmanageable debt, and surprise expenses don’t create hardship.
- Losing your job or needing to support a family member doesn’t ruin you financially.
- And when you do lose income or have new expenses, you can rebound quickly and return to your path.
- Having an accountability partner will help you reach your goals.
- Lastly, financial wellbeing has the same goal of living a long, happy life.
So how do you get there? We’ve narrowed this down to 8 bits of advice to achieving financial wellness. And keep in mind that like physical wellness, this is a journey. You don’t run a marathon the first time you try jogging. It takes time.
- Create a goal. Work on it with your partner, parents, or kids. Think of it as a group effort, and work on it with your partner, parents, or kids. What do you want your life to look like? What do you want to be able to do?
- Develop a net worth mindset
- Track your expenses and work hard to reduce them.
- Stop caring so much about what people think. They don’t care, so why should you?
- Learn to manage your money and don’t outsource it until you are confident in your ability to make the right decisions for yourself.
- Have an emergency fund of at least 6 months of living expenses.
- Max out the tools available to you before spending on other stuff, such as 401k, HSA, pay down your mortgage faster, and eliminate your debt.
- Review your progress regularly to help build momentum and pivot when needed.
Top 3 takeaways:
- Financial wellness is very similar to physical wellness in that it’s a constant journey to self-improvement.
- Spend some time getting close to the details of your finances and learn how to manage them effectively.
- You need a powerful goal that keeps you motivated, and accountability partners will help.
Show references:
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #056 - Paying off your mortgage is a great investment
- Friends on FIRE episode #095 - How to stop caring what people think and start living
- Friends on FIRE episode #107 - Why you should reject Dave Ramsey’s Debt Snowball
- Friends on FIRE episode #090 - Why you don’t need a financial plannerMethod, and what to do instead
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 Financial checklist available on friends on FIRE website for free
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start by reading a couple of listener questions on how much is enough to retire and what you need to consider yourself financially independent or work optional. The answer to these questions isn’t necessarily hard to figure out, but it’s super specific to the individual, making general advice and rules less useful.
Financial advisors will help you determine financial independence by income replacement. If you make $100K and live off that, you should need $100K in retirement and you’ll be ok. But this is because they don’t know your expenses or your desired lifestyle. So you might be working towards retirement at 65, where you can earn $100K, and you only need $50K. Then you’ve worked way too long.
The traditional FI definition, as decided by the FIRE community, is the 4% rule. Said another way, 25X your spending. So if you have 25X your spending, you can withdraw 4% each year and never outlive your money. So if you spend $50K, your FI number is $1.25M. $100K and you need $2.5M. You could put that into an index fund, and you’re good to go. This could be the case for someone, but let’s break this down a bit:
Benefits:
- It’s simple.
- It’s a great guidepost to help you gauge progress.
- It provides structure to how to manage your money by automating it to a degree.
Drawbacks:
- Having an accessible portfolio of 25X your expenses for many people means choosing taxable accounts vs. retirement accounts, paying down a mortgage, etc. This approach would incentivize you not to pay down your mortgage, which we think is a great idea.
- It doesn’t encourage you to diversify into other investment classes like rental properties.
- It may not actually work over a very long period of time. If you’re just barely at the FI number, there’s no room for error. A couple of years of negative returns, a big medical expense, or needing to help aging parents, and you’d need to make a change. Vanguard did a study showing the 4% rules probability of success, and as you’d imagine, it’s a higher probability of success the older you are.
So how do you know you’re ready? What’s a better plan? The 4% rule, in our opinion, let’s you know when you’re ready to start planning. For example, if you spend $50K a year and your FI number is $1.25M, then when you reach that, then you can start your planning. So this is the bare minimum you’ll need to help you avoid running out of money.
Everyone’s situation is unique, but let’s look at how this works: what will your expenses look like for the next 5 years, 10 years, etc.? Will you own a home or rent or travel? Will your kids go to college? How’s your health? Once you estimate these expenses, you can look at your cash flow.
The listener wanted a checklist: “if you have this, this, and this, you are good to go!”
- Is your net worth at least 25X your spending?
- Are you able to live off passive income or non-retirement account withdrawals before reaching age 60 without depleting them?
- And then at age 60, are your accounts large enough to meet 4% withdrawals?
- Are you comfortable pulling from your 401k doing a conversion ladder? This matters because your 401k is in your 25x math.
- What’s your level of comfort with the risk and the idea of going back to work? One of my favorite reminders is that your worst-case scenario is everyone else’s every day.
What would a super-strong early retirement look like?
- Retirement accounts that are already 25X your spending, meaning that if you were to deplete all other resources by age 60, you’d have much more than 25X ready to go.
- Getting your cost of living low, for example, paying off your mortgage.
- Passive income to cover your living expenses or the majority of your living expenses prior to tapping into retirement accounts. This can be taxable accounts or rental income, for example.
The 4% is more of a guideline to let you know if you can start planning to retire. Barely meeting it is pretty risky over the long term unless you’re prepared to go back to work.
All this said, pursue the life that makes you happy. If you want to stop working and can accept some risk, go for it. You’ll figure things out.
Top 3 takeaways:
- The 4% rule means you have 25X your savings and have reached a traditional definition of FI.
- Use it as a starting point, not a final goal.
- Plan for more than you think you need. You never know what the future holds.
Show references:
- Article with Vanguard study: The FIRE movement confronts the 4% rule
- Friends on FIRE episode #90 - Why you don’t need a financial planner
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 financial checklist available on friends on FIRE website for free
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We consume so much as a society, and we all have an opportunity to take a reframe how we think about consumption and how we go about acquiring what we need and want.
What is a gift economy?
A gift economy or gift culture is a mode of exchange where items of value are given away instead of being sold, usually without any expectation or agreement of future expectations or rewards.
Benefits of a gift economy:
- You meet new people.
- It feels good to give and receive help.
- It builds community.
- Your items may actually last longer. Many mechanical items can go bad when they don’t get actively used. Many electronics end up out of date when they don’t get used (eg an old kids iPad where Netflix isn’t making app versions for the ios anymore).
- You save money!
- It’s better for the environment. Less consumption, less items get wasted, less to the landfill.
Ideas and tips for becoming part of a gift economy:
- Look for and join a buy-nothing facebook group in your area. Go into facebook and search groups. Most have rules where you’re only allowed to join one buy nothing group, and it should be the one that’s closest to your area. It’s meant to be community and adjacency based, so the goal isn’t to go and join a buy-nothing group in some fancy neighborhood 30 miles away - most of the administrators won’t even let you join.
- Look for and join other parenting and neighborhood groups in your area. Go into facebook and search groups. Ask neighbors and friends.
- When you think you need or want something, first ask yourself some questions: Could I get away with borrowing this item? Do I need to own it forever? Could I find a used one? Is it likely one of my neighbors owns this thing?
- When you know what you need or want, go to each of these types of groups and be clear about what you need. Though Mike often likes to be brief, sharing context can sometimes really help because it gets neighbors involved in your story. Let them know you need paint for the neighborhood school’s play backdrops and you’re seeking donations before you all go and buy new paint. Let them know you’re building your son a treehouse in the backyard and you need to borrow a curricular saw for a week; tell them about how you once did this with your dad and how excited you are to recreate the experience with your son.
- Think ahead, and be patient. This method may take longer if you just go and buy something on Amazon, so mentally prepare yourself. Though sometimes it only takes 20 minutes, and the next thing I know a neighbor has lent me a car battery charger and even offered to drop it off! You might get a response right away, or your post might sit for a week before someone replies.
- Think about good friends and family you can text to ask if they have something you need. Even consider sharing things with your friends and family.
- Remember it’s about giving and not just getting! A gift economy works when you pay it forward, and give as much or more than you get. Often when you take things to Goodwill and other mass donation centers, many things end up in a landfill or don’t make it into the hands of someone who will really use and appreciate those items. You may notice you get more enjoyment from actually connecting with the person who is going to give whatever you don’t need anymore a second life.
- If all else fails on the above methods and you really need something, consider renting it or buying a used product.
Top 3 takeaways:
- Fostering a gift economy mindset has many benefits, the least important of which may be it saves you money.
- Search for and join a buy-nothing group and other neighborhood parenting or neighborhood groups in your area.
- Start giving things you don’t need anymore to the buy nothing groups right away, and then next time you need something go and ask those groups before you buy.
Show references:
- Buy Nothing Project on Facebook
- Clutter Stats from Becoming Minimalist and Relevant Magazine
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Automating your finances can have a positive impact on your finances. It can help you put certain tactics and behaviors on autopilot, creating simple habits that take almost no thought each week or month. The less you have to think about remembering to do something, the better chance you’ll actually do it.
The benefits of automating your finances include:
- It saves you time to focus on other higher-thought activities, especially those activities related to your finances.
- It puts good financial behaviors on autopilot, increasing the chance that you’ll make positive money choices. The less you have to think about it, the better you can do. You’re essentially creating better habits with the click of a button! We wish all habit-building was this simple.
- It allows you to pay yourself first. When you get your money to where it needs to be quick, there’s less of a chance you’ll have a chance to do something “bad” with it.
- It avoids human error on forgetting to do something or pay something. Can help you avoid late fees or lost opportunity cost from forgetting to pay a bill on time
Specifics ways you can automate your finances:
- Automate your savings. You can set up automatic transfers from your direct deposit paycheck with your company or do it within your bank account online login. For example, setup for $250 to be moved from your checking account to your savings account on the 1st and 15th of each month. We suggest you increase your automated transfer to savings and investment accounts over time, even if it’s just small increments. Small steps add up and build momentum.
- Automate your investing. Same as with savings, you can automate transfers of money to your investment accounts and actual purchases of investments. If you know this will help you, consider moving your investments to a platform that allows for automatic investing. For example, platforms like Wealthfront and M1 have simple and effective auto-investing features and capabilities.
- Setup a 401-k auto-increase. With some 401-k programs, you can set an increase to start on a certain date, which can help you hit an increased goal and perhaps not even remember or notice the impact.
- Automate paying your bills. You can sign-up for automatic payments on anything from credit cards to electric bills. I prefer this as it saves me a ton of time and ensures I never miss a bill.
- Automate tracking your expenses. Tools like Intuit’s Mint or YNAB (you need a budget) can help you automate your expense tracking vs. doing it manually. Mike still does his manually thorough he might be in the minority here! Maggie has done it manually but now uses Mint and then spends some time reviewing, cleaning up, and summarizing the data from Mint.
- Automate tracking your net worth. We’re old school on net worth tracking, so we like to do this in excel, but do what works for you. We care more that you track your net worth and less about the how. There are popular apps like Personal Capital that allow you to capture your net worth easily, and also, many investment apps like Wealthfront let you link in all of your accounts and easily see your total net worth. Unfortunately, these apps don’t do a great job at historical tracking. In addition, they often have issues with one account or a piece of real estate, so I like using these apps to capture all of your accounts faster but still manually tracking in an excel or google sheet each month.
- Automate notifications about unnecessary fees. Apps like personal capital or Mint are free and helpful in that they provide notifications on overdraft fees, late fees, and additional fees you want to avoid. If you catch an issue like this early, you can quickly fix whatever caused it, and you can often call the financial institution and request they removed the fee.
- When in doubt, Siri can do everything and use her to improve your finances too! Siri is pretty amazing. You can hold down a button on your iPhone and say, “Siri, remind me on the 1st of every month to increase my savings rate by 10%,” or “Siri, remind me on the 1st of every month to track my net worth.” I am less familiar with Android devices, but I imagine they have some similar features and functionality. You can also check out our 2021 financial checklist for a set of things you might want to ask Siri to remind you to do.
As you start to automate your finances, keep these additional tips in mind:
- You still need to keep an eye on things; this will save you a lot of time in between.
- Check all of your account settings and see what can be automated. Don’t assume your account or system doesn’t allow automation. Login to your account and browse around, call customer service and ask, chat customer service and ask, google the company or service name and automation. Sometimes, you have to get into the system and start a transaction to see the various automation settings and options. You may be surprised by the sophistication of what is allowed.
- Consider switching accounts to ones that offer automation. It’s a meaningful feature that’s worth switching accounts over.
- This is safe and low risk. In today’s modern world, it is very safe to set things up this way. There’s a risk with anything, but this is a very low-risk area.
- This isn’t a forever setting. You can adjust your settings and approaches anytime.
- The more of a cushion you have in your accounts, the easier it is to automate things. However, if you’re living paycheck to paycheck, be very cautious about automating things as you could mistime things, and your huge credit card bill gets paid two days before your paycheck comes in.
Top 3 takeaways:
- Automation can have a positive impact on your finances.
- It’s simple and takes only a few minutes to set up.
- You should get started today! Pick at least one account that’s not already automated, and get started!
Show references:
- Wealthfront
- M1 finance - the super app - with $50 referral code from our friends prescriptions + paychecks who are big fans of M1!
- Personal Capital
- Mint
- YNAB - You need a budget
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 Financial checklist available on friends on FIRE website for free
- Friends on FIRE episode #016 - 401ks are your BFF!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We started with a few listener comments and questions, and then dig into our best advice on talking to your partner about money. Money and your finances is an important thing to talk about with your partner. Even if you both come from different backgrounds or perspectives, you still need to talk about it openly and get to some common ground and practices.
Talking to your partner about money is important. Do not avoid this discussion.
Your finances can have a big effect on the health of your relationship. Money should be like kids, religion, politics, or any other important topic that you want to be aligned on before deciding to make a life with someone. You should not be afraid to talk to your partner about it, whether you’re early on in a relationship or ten years into your marriage; it’s never too late. Knowing each other‘s views and willingness to listen and take feedback and adjust approaches is important to have a healthy relationship. At some point, if your partner is not willing to talk about or budge on these topics, it could be an issue you’re not able to get past, but it shouldn’t be an issue you’re afraid to talk about. Are you afraid to talk about whether or not they want kids? Maybe earlier on you are, but eventually, it’s a topic you need to talk about; money is the same! The question of kids often comes up earlier in a relationship, and if it’s not a fit, then it’s not a fit. We would put money into a similar category, except it might be easier to adjust and shift somebody’s view on money than their view of whether they want kids.
Here are a few stats on divorce and money to remind you why this matters:
- Feeling that one’s spouse spent money foolishly increased the likelihood of divorce 45% for both men and women.
- Couples that argue about finances at least once a week are 30% more likely to get a divorce.
- Higher annual incomes can decrease the risk of divorce, and couples that build wealth together vs. debt together have a higher success rate.
- Various studies cite that 30-40% of divorces happen over disagreements about money. Money fighting is the second leading cause of divorce, behind infidelity.
On the flip side of these stats, getting aligned with your partner about money can be incredibly empowering and a big positive boost for your relationship. We also did an episode on Happiness, sex, and money (Episode #23); we talk about how improving your finances increases your mental health, physical health, self-esteem, sex life, and overall happiness.
Tips + Tactics for talking to your partner about money:
- Start talking about your life goals and your WHY. What’s important to you? What’s important to your spouse? How long do you want to work? How do you envision your retirement? What are your dreams? What are your fears? What makes you happy? If you have kids or plan to have kids, what’s important for you re: their schooling and college?
- Admit your own mistakes, and consider starting with yourself before you even encourage or push your spouse in any way. You can tell your spouse what you’re doing and see if they willingly jump on board, but don’t push too hard before you’ve got your own house in order. Yes, you might need to cut back your spending while your spouse is still getting you further into debt; swallow your pride and control what you can just to get started.
- Be vulnerable. Do things to make the discussion non-confrontational, like hold their hand while you’re talking to them. Be loving and kind. Don’t be confrontational and judgemental. Express your own fears, your doubts, and listen to theirs. Think about what will make your partner feel safe and loved during this discussion.
- Gather all of your numbers together into one spreadsheet, piece of paper, whatever makes sense for you. Know where you currently stand. Track your net worth.
- Discuss and create goals for each of you individually and for you as a couple.
- Co-create plans to reach those goals.
- Make it fun, and build in rewards. Perhaps each month, when you do a finance check-in discussion and budget review, you do it over takeout from your favorite restaurant (assuming that fits into your money goal). Set up rewards for you two as a couple if you meet certain financial goals. This could be a vacation if you hit your budget six months in a row or if you reach your debt-payoff target.
- If they like a good friendly competition and that inspires them, then do a budget-tracking exercise to see who can spend the least amount of money in a month. If they hate competition, then definitely don’t do this!
- Find the angle they are interested in and lean into that, even if it’s a bit different than where you were initially headed. For example, maybe they are excited to become debt-free, but they are less focused on early retirement. That’s okay, and take the initial progress of getting to debt-free. Take this one step at a time if you need to.
- Create a curriculum to listen to together. @thepriceofavocadotoast listened to Dave Ramsey book together while in the car. Read a book, watch some YouTube videos, or listen to the same podcast. “Money on the table” is a good YouTube series to watch together to open up some discussions, or read or watch Playing with FIRE.
- Suggest a podcast or two to friends to get others to open up the conversation with them. The reality is sometimes it’s just easier to talk to strangers about things versus your good friends.
- Call in a pro if needed. Sometimes you just might need a 3rd party. We recommend you find a money coach for this, not a financial planner.
- Consider talking to some other couple friends if your partner is open to that approach. If they are not opening up to this topic with you, they may not be ready to talk to other people, but when you are we have an episode on how to talk to your friends about money.
Top 3 takeaways:
- It’s incredibly important to discuss money with your partner. It’s not a topic you can or should avoid.
- Start by getting your own house in order; sometimes that can be contagious and the easiest path for everyone.
- Start the topic with your partner, and be thoughtful in your approach. Ask questions, listen, and don’t judge. Pick a few tips from our list that you think would be most appropriate for your situation.
Show references:
- Friends on FIRE episode #23 - Happiness Sex and Money
- Friends on FIRE episode #34 - Split of combined finances
- Friends on FIRE episode #90 - Why you don’t need a financial planner
- Friends on FIRE episode #101 - Friends don’t talk about money, but they should
- Money on the Table series on YouTube
- Playing with FIRE book
- Playing with FIRE Documentary
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We share why and how we track our expenses, what it cost our families to live for six months, what’s working well, and what we want to improve.
Why we track our expenses:
- It’s incredibly helpful to know how much it costs your family to live for a year and even know how much that fluctuates year to year. You need to know this number for most retirement calculations and any planning around your financial life.
- The most successful way to improve your spending is to track it, review it, and thoughtfully discuss it with your spouse. If you need advice on talking to your spouse about money, stay tuned for next week’s episode.
- Also, check out episode 15 on expense tracking and our expense tracking template on ETSY if you need a template to get started.
How we track our family’s expenses:
- Mike and Britta manually track their expenses by keeping receipts and logging them into an excel sheet.
- Maggie and Greg used to log things manually in excel, but now they leverage Mint to track all expenses. They track expenses in Mint, categorize them, and then download and summarize them in excel every 3-6 months.
- Like with most things, it’s most important that you do this, and we care less about how you do it. Some people prefer apps such as YNAB (you need a budget), though we prefer free approaches vs. paying for an app.
Before we review things in detail, some additional context:
- This does not include any income; it’s just our expenses.
- Maggie and Greg have separate accounts, but they still 100% handle our finances together. They track things together, review things together, and plan everything together. We did an episode discussing separate vs. combined finances, but even separate finances don’t fully mean separate if you have strong transparency and communication.
- None of our expenses include rental property or podcast expenses, as those are considered business expenses against our LLCs.
- We have both paid off our mortgages. And we did it through having a lower cost of living and expenses.
- For privacy reasons, Maggie and Greg have not included child support in their numbers, but this is an additional expense, and they do track it. It’s also not a controllable expense, so they don’t spend too much energy discussing it.
Mid-year review of our families spending levels:
- We each share our total expenses and top categories of spend.
- We each share the top things we feel good about.
- We each share the top things we feel we could do better with.
Top 3 takeaways:
- There’s significant value in tracking and reviewing your expenses with your spouse and maybe even your kids if they are old enough.
- There’s value in comparing your expenses with another family. It created some interesting dialogue and learnings.
- This is still personal finance. We spend very similar levels in total, but on very different priorities and things.
Show references:
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Dave Ramsey is an ultra-popular guru for personal finance, but his advice and style are divisive. In episode 93, we talked with Haley and Justin from the Price of Avocado Toast podcast, who hate the guy. But millions love him. What he might be best known for is his Debt Snowball Method for becoming debt-free.
Here’s how it works from his website:
Step 1: List your debts from smallest to largest regardless of interest rate.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.
The strategy here is psychological more than financial, and that’s where we take issue. Ramsey argues that you need momentum to pay off debt. But this comes at the expense of higher costs. So we recommend you should instead pay down your highest interest rate debt first.
If you’re listening to Ramsey or this podcast, you have motivation. It might not be strong yet, but it’s there. The way you gain momentum, in our opinion, is to grow that net worth every month!
Hear us out:
Download our net worth tracker and list out your debts. If you have $10,000 of debt at 20% and $1,000 at 2%, you’re paying $2,000 in interest on the former; on the latter only $20. When you are tracking your net worth, you will see those numbers. And if you are paying down the higher interest rate, your net worth will be growing faster because you are eliminating more costs and saving more money.
Paying $100 off on the first loan saves you $20 a year in interest. On the other hand, $100 on the smaller loan saves you only $2 a year. Which of those cost savings is more motivating?
Here is the process we instead recommend for paying off your debt:
Step 1: List your debts from smallest to largest interest rate.
Step 2: Make minimum payments on all your debts except the highest interest rate.
Step 3: Pay as much as possible on that highest interest rate.
Step 4: Repeat until each debt is paid in full.
Let’s also talk about high interest and low-interest loans over the long term. High interest is devastating to your net worth. We’re talking about anything over 5%. So don’t sign up for it! Get out of it ASAP. It will kill your finances. But low-interest-rate loans you can look at differently. This isn’t to say that you should get them or keep them, but if you have them, think about the trade-off.
If you have student loan debt at 2% and you’re not contributing to your 401k, don’t pay down the debt just yet! You’re missing a 100% ROI on that match. You do need to get rid of that debt, but do the 401k first and then start cutting your living expenses elsewhere to pay it off. Paying off debt needs to be analyzed within the framework of your total net worth.
Top 3 takeaways:
- Dave Ramsey is mainstream, and therefore his advice might not always be golden.
- Pay down the highest interest rate loans, not the smallest. Your net worth will improve faster.
- Avoid debt as much as possible, but think strategically about the opportunity cost for paying down the lowest interest rate loans if you have debt.
Show references:
- Friends on FIRE podcast Episode #027 | Why Tracking Net Worth Matters
- Friends on FIRE podcast Episode #093 | How to blow $600K with The Price of Avocado Toast
- Friends on FIRE Net worth tracking spreadsheet on Etsy - $3 (if you can’t afford this, please email or DM us on Instagram and we will get you a copy for free)
- Dave Ramsey’s Debt Snowball Method
- Friends on FIRE podcast Episode #056 | Paying off your mortgage is a great investment
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss a range of topics with A Purple Life:
- She was raised by a single mom, and money was tight, so she learned to be frugal by necessity.
- When she went to college, she swung in the opposite direction, moved to NYC, and lived an expensive lifestyle.
- She talks through how her approach to being more or less frugal has adjusted at various times throughout her life, and most recently, how it’s been since she retired.
- She is a 3rd generation, early retiree. Her mom retired when she was 55, and what she learned from that.
- Why she moved from NYC to Seattle to geoarbitrage her cost of living.
- How she has lived a very intentional lifestyle.
- What her annual cost of living is and how she keeps her cost of living incredibly low.
- How she and her long-term partner manage their finances.
- What it’s like to be fun-employed.
- What it was like emotionally when she finally took the plunge, quit her job, and retired.
- Retiring during a global pandemic and how she had to adjust her travel plans as a result.
- Her learnings and observations since she retired: being present, birdwatching, napping, and curiosity.
- The joy of not setting goals anymore.
- Her travels and learning about all the new places they are visiting.
Show references:
- A Purple Life website
- A Purple Life on Instagram
- A Purple Life on Twitter
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Everyone’s travel realities are different. Some choose where they go based on price; some are going to visit families and need to be in a certain location. It’s interesting and helpful to hear what other people are spending on their vacations, just like it is helpful to compare spending across all spend categories. Vacation spending can be particularly different based on the purpose of your trip, the size of your family, and many other factors.
We break down what we each spent across airfare, lodging, car rental, food, clothing, and gifts. Then, we compare our total spends for two very different two-week vacations with kids. We also share the cost area where we cut back and areas where we splurged.
Top 3 takeaways:
- Travel costs money, but it’s a great category to spend in. Very few people regret the money they’ve spent on travel.
- You can cut back in some areas and splurge in others. Try to avoid splurging on every category and be intentional.
- Hearing how others spend their money can help you prioritize and justify your spending.
Show references:
- Friends on FIRE podcast episode #098 | 11 tips to plan your dream summer vaxication
- Friends on FIRE podcast episode #083 | Travel Hacking with Julia from Geobreeze Travel
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk through what property taxes are, how they work, and then share a step-by-step process for appealing your annual assessment. Each year most counties or cities re-assess a property’s value, and this is what your annual real estate taxes are based on. Most years, they assess that your value has gone up, but the increase can often be much higher than actual sale prices. Therefore, you can and should look at comparables of recent sales in your neighborhood and consider appealing the assessment. This is something you can do for your main home or any rental property. The general preparation process is similar in any area, but the specifics of how you file your appeal may vary by county or city.
Like many things, you can hire a 3rd party to do it for you or do it yourself. If you don’t have time, consider hiring a company with a money-back guarantee. If you do have time, do it yourself!
If you use a 3rd party, remember:
- Find a reputable company with a low upfront fee or a money-back guarantee. Ask neighbors and friends in person or through a neighborhood chat group or online group.
- These companies can automate/scale the process we outline below. Once you see what’s involved, you’ll realize they are making a nice mark-up on the service they are offering you.
If you choose to DIY, here’s the step-by-step process:
- First, create a simple spreadsheet with the following columns: address, # of bedrooms, # of bathrooms, square footage, sale date, sale price, and price per square foot. You will fill in almost all of the fields from Zillow and then calculate the price per square foot in excel.
- Document your property’s key statistics of what they were appraising your house at last year and what they are proposing the new appraised amount is for the upcoming tax year. This will be in the assessment letter they mail to you each year, and it’s also publicity available on your county’s assessment website.
- Go to Zillow, map to the area right around where your house is, filter by sold properties within the last 12 or 24 months, and then start looking at those properties.
- You want to find and calculate the price per square foot that recent properties have sold at in your very nearby surrounding neighborhood. Only look at nearby houses within the same zip code or within the few streets right around you. If there are fewer sales, you can go further out, but keep it very close if there are lots around you.
- Start capturing the above properties into your spreadsheet, and see how those comparables stack up against your property’s price per square foot. You want to show that they are overvaluing your home versus what recent sale prices show the price per square foot should be. Some recent sales won’t support your case, but others likely will. You want to find 10-30 comps that support a lower assessed value for your property. Keep the properties that support your case in the spreadsheet, discard the others that don’t support your case.
- Based on the comps you find, suggest what you think a reasonable assessed value should be for your home. Don’t shoot unreasonably low, but feel free to get aggressive and ask for what you think is fair if you have solid comps.
- Follow the instructions included in your assessment letter for how to appeal. Most will allow you to mail in a letter, and many now have an online appeal process. Read those details before preparing the above info, just in case anything is unique about your area’s appeal process.
- Write a simple letter explaining your rationale, and submit it via mail or online. We’ve included a brief template below. That’s it! And then eventually you’ll hear back, or you’ll get your tax bill, and you’ll see if they reassessed it to be lower.
Template for an appeal:
Dear Dekalb County Board of Tax Assessors,
My property (Property ID #XXXX located at XXXXX) has been overassessed for property tax purposes. Please accept this evidence supporting a lower assessment for the property. Each argument has merit in its own right and should be considered separately. This evidence is not an appraisal, and it is not an opinion of market value. I have selected these comparable sales in my very close surrounding neighborhood. I believe my property is eligible for a reduced assessment based on the sales of these comparable homes nearby. The comparable properties I have selected are similar in size and features to my property.
Your current assessment of my property has my average $/sq foot as $XXX. The comparables I have attached show $/sq foot ranges from $XXX-XXX, the majority of which are under $XXX.
Based on the below comparables, I suggest a more appropriate fair market value would be around $XXX,000, which is the equivalent of $XXX per square foot. This is still above almost all of the comparable sales I have found in my neighborhood.
Thank you for taking the time to review my appeal and information. If you have any questions, I can be reached at XXXXXXXX.
Sincerely,
XXXXXXXXX
(see friends on FIRE website for visual of spreadsheet that supports this appeal letter template)
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk about the “why” of wanting financial independence. For both of us, this is it! So we share some perspectives about the time you have with your kids. Maybe you are already painfully aware, or perhaps it hasn’t hit you yet, but when we talk about financial independence and all the tactical advice on how to get there, you have to have the motivation to do so.
Mike talks about his childhood and how his parents retired at 42 to spend more time with him and his sister. They’d travel for months at a time over the summer, but it wasn’t just vacationing; Mike’s parents also spent an exorbitant amount of time doing the little things: lacrosse practice, homework, Boy Scouts, etc.
Raising kids can be like ships passing in the night. Here is why it’s so challenging:
- Being “Present” with your kids is hard, even though you might not realize it.
- Your recovery days of the weekend are the best opportunity for deep connections with your kids.
- Vacations are painfully short and usually interrupted by work.
- Your truly useable time with kids is tragically brief.
- The irony of working is that we think “we’re providing for our families,” but we’re missing the time with them. Kids need their parents, and parents want to be with their kids. We interviewed The Retired Toddlers very early on, and they built their whole life around the idea that you can do both: you can provide for your family and spend all your time with them.
Top 3 takeaways:
- If you have or want kids, make being with them your “why” for reaching FI.
- Don’t beat yourself up if you’ve missed some or all of this opportunity. Do what you can now with what you have.
- Kids value your time, not your money. Be with them.
Show references:
- Retired Toddlers website
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss a range of topics, and Nicole and Nadia share their story:
- They grew up in South jamaica queens in a housing development, living paycheck to paycheck.
- They never had any guidance on money, but their mother always made it work.
- The only time money came up in a discussion was when money was an issue, like when they were maybe facing eviction.
- The only time money came up was when money became an issue.
- They learned very early on, whatever money they did have come to them, they saved.
- Do well in school, change your environment, and get a better job to change your circumstances.
- Their mother wouldn’t let them work when they were younger because she wanted them to focus on school. The way for them to help out was to do well in school.
- “We didn’t want for nothing.” To them it means they didn’t care about material things, and they had everything they needed.
- NY was very fashion-focused when they were growing up, and they didn’t have the money to buy air jordans or acid-washed jeans. It helped them growing up as they didn’t care about material things.
- An inadvertent gift their mother gave them was dropping the material things and only caring about the things they really needed. They don’t spend money on things they believe are materialistic.
- Her mother made them tough cookies from the beginning. They wore business casual clothes in school and started following their own path at a young age.
- They decided to go to Columbia University because Columbia offered them the most money.
- Tip: Get a job at the financial aid office at your high school, so you’re the first in line to know what scholarships and financial aid are available, and apply first!
- First-generation college and the process of learning how to succeed in college, because depending on where you went to high school, no one preps you for this
- Mom passed away suddenly in their senior year of college
- When they got out of school and started interviewing, it hurt them that they didn’t do enough internships, but they were both able to get interviews at Goldman and got the jobs!
- One of the things that have followed them is that they always knew a little information but not as much as others around them, and no one specifically taught them how to do things.
- “So many things that we take for granted can be such a leg up for other people.”
- Growing up in poverty and then navigating new environments.
- What inspired them to leave it all behind and start the Wealth Twins. Their mother passing away early and their experiences being in NYC on September 11th were part of it.
- They didn’t want a job to dictate what was happening in their lives.
- Co-workers that gave them advice to always save 10% of every dollar they make.
- The ATM receipt story that helped inspire their savings increase.
- How they became loyal to the check not the company.
- Nicole’s defining moment when she decided to walk away from Goldman. They got new jobs that gave them respect plus responsibility.
- The advantages of growing up poor. As long as you’re resourceful, you’ll always be able to make something happen.
- What they learned from Corporate America - worth ethic, becoming organized, solve problems, access to people at the same job but living very different lives, working with others focused on their finances, and the concept of being a dedicated learner.
- Don’t let anyone break your confidence and make you think you have to stay in some job - don’t let their belief impact your belief in yourself.
- You’ll be taken for granted very easily if you let it happen.
- What inspired them to leave their corporate jobs and start the Wealth Twins
- They always thought access to information was a big thing that could change lives.
- Wealth Twins want to teach people they can be financially free or independent, and it’s not about how much money you make but about how much money you keep.
- They want to start a revolution. They want to help the people that were like them. It’s not that people aren’t working hard; it might be that they don’t know where to turn to get information.
- The FIRE journey isn’t something you need to do alone. Share information with others, hold your friends accountable and save your money to give yourself choices. Don’t get caught up in the “RE” part of far, but focus on financial freedom.
Show references:
- Wealth Twins bio on Nadia and Nicole
- Wealth Twins website
- Wealth Twins on YouTube
- Wealth Twins on Instagram
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We are willing to “show off” the front-end of things that cost money, through the cars we’re driving, the house we live in, and the clothing we wear, but we’re not willing to talk about what funds all of that. We dig into why that is, the benefits of talking to our friends about money, and ideas to get you started.
Why is talking to your friends and family about money so taboo?
- It’s how many of us were raised. It’s rude to talk about money.
- It makes people feel self-conscious, judged, or shameful. And it could range from because someone has credit-card debt, all the way to shame for having more money than others around you do.
- They don’t know where to begin. We’ll help you here!
- It’s not a fun topic for everyone. It’s stressful to many, as many feel they are behind on what they should be doing financially.
- Financial views can differ by culture, political affiliation, or religion. But that’s no reason to avoid talking about it. We’ll talk about politics and religion, so why not money?
The benefits of talking to your friends about money?
- It will improve your finances! When you learn what other people are doing, you have a benchmark, and you all get better as a result.
- It will improve your friendship! You get into more meaningful conversations about what matters in life. You get to know each other on a deeper level. Being vulnerable with your friends strengthens your friendships.
- *Parents and children should be considered “friends” here too.
Ideas for opening up the conversation:
- Start small! Share a recent challenge you had understanding something complex. Your friend probably has had the same experience. You might even get a helpful response from their experience.
- Compare what you’re spending on everyday expenses like groceries, homeowners insurance, car insurance, and utilities.
- Remember, you don’t have to share everything. You’re not turning over a P+L to your friends. You don’t have to share your salary. You can share as little or as much as you want. You can talk very hypothetically about things or just dive into some aspects.
- Host a fun personal finance-themed dinner party. The people who don’t want to talk about money won’t come. Lay out some ground rules and best practices, like this is a safe and confidential space. We don’t judge. We treat this like vegas.
- Start a budget-tracking exercise with your friends where you all track your living expenses for 3-6 months, and meet once a month to check in.
- Be disarming and humble when you bring things up. This isn’t a competition. Avoid shaming people or coming across as judgemental.
- Once you break the seal, it opens things up!
- Suggest a podcast or two to friends to get others to open up the conversation with them. The reality is sometimes it’s just easier to talk to strangers about things versus your good friends.
- If you can’t get your real-life in-person friends to talk about money, just keep listening to podcasts, engage on social media, and make new online friends that will speak to you about money.
Top 3 takeaways:
- Many benefits come from talking to your friends about money.
- Start with yourself, and be willing to be open and vulnerable with your friends. This will motivate others to open up then.
- Start small, and don’t overshare until your friends are also ready.
Show references:
- Prescription and Paychecks Instagram account
- https://www.linkedin.com/news/story/how-much-do-millennials-make-4395537/
- Article: How much money do millennials make? It’s no longer a taboo question.
- Article: Talk money with your friends — it might just improve your finances
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We cover a bunch of topics during our 100th episode extravaganza:
- We ask each other three blind questions.
- We each share our top 3 favorite episodes and why.
- We share YOUR top 10 favorite episodes based on the data, number of listens.
- We answer listener questions from when we plan to retire to 401-ks to what to do with your extra cash.
- We read some recent comments and reviews.
- We listen to some bloopers, mostly of Maggie.
- We thank you all for listening, being so supportive, and being amazing friends on this journey with us!
Top 3 takeaways:
- Take your big passion ideas and make them happen. We did this when we started this podcast, and we’re so happy we did!
- There’s value in friends talking to friends about money.
- Our listeners are why we do this. You all are fantastic, and thank you!
Show References:
- Price of Avocado Toast podcast on Apple Podcasts.
- What the FI guy blog
- Mike's top 3 favorite episodes:
-
078 | A conversation with the ORIGINAL friends on FIRE (Mike’s dad + his friend Mark)
-
050 | Maggie wants a new car and Mike stages an intervention
-
061 | Habits, happiness, and hard work with 5am Joel
-
- Maggie’s top 3 favorite episodes:
-
086 | Leaving Corporate America and changing the way we work with Rich + Regular
-
061 | Habits, happiness, and hard work with 5am Joel
-
090 | Why you don’t need a financial planner
-
- Top Ten Episodes based on the number of listens:
-
029 | Mentor Series – Mark Horstman with Manager Tools
-
086 | Leaving Corporate America and changing the way we work with Rich + Regular
-
064 | Adventures in Opting Out with Cait Flanders
-
061 | Habits, happiness, and hard work with 5am Joel
-
078 | A conversation with the ORIGINAL friends on FIRE (Mike’s dad + his friend Mark)
-
056 | Paying off your mortgage is a great investment
-
076 | How to set 2021 financial goals that stick + 2020 goals recap
-
072 | Money lessons from Tim Ferriss’s Tools of Titans
-
068 | 5 Simple Steps to Investing
-
067 | Wants vs. Needs: 8 Tips for buying less stuff!
-
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mike opens the episode sharing stories about his collections growing up and how enjoyable they were for him. Baseball cards, comic books, PC Gamer magazines, rocks, coins, Star Wars toys. Yes, Mike was a nerd. Mike also accumulated a lot of stuff from his grandparents and parents, whom he admired deeply. Maggie also liked collecting rocks; what a coincidence!
Over time, we all accumulate stuff. It can be collectibles, or family heirlooms, or stuff that has some sort of practical value. But at some point, and we’d argue at frequent points in your life, you need to step back and think about if you need this stuff.
Collectibles usually are worthless:
- Mike shares his baseball card realization
- When something is sold “as a collectible,” it’s not. The Mickey Mantle rookie card is a collectible because it was a cheap toy for kids when it was made. Decades later, people developed a desire for it because of its scarcity. Baseball cards sold even in the 60’s and 70’s were already being produced because people found value for the scarce items. When Mike was collecting in the 80’s, it was a gimmick.
- To tell if your collection has value, pull out what you consider the most valuable items and check eBay. Check what they’re selling for, not asking. We bet you’ll find they aren’t selling for much.
- So what do you do? Find someone who will appreciate them for what they are.
Just because it cost you money doesn’t make it valuable
- We’re all guilty of this: we spend $50 on a commemorative item from some event and then hold it for 20 years. But just because the supply/demand curve at the time put that price at $50, that doesn’t mean it’s worth that much or anything now.
- Check eBay to see if it has value. If it does, sell it! If it doesn’t, give or throw it away.
You don’t want to accept that something was a bad purchase
- It’s ok to make purchase mistakes or to change your mind. If you bought a new jacket and then realize you hate it, don’t hold onto it for ten years, making yourself feel guilty. Give it away, and you’ll feel better.
- An excellent rule for deciding whether to get rid of something now is to ask yourself, “Would I buy this again today if I didn’t already own it?” If the answer is no, then let it go!
You MAY use this in the future (aka just in case items)
- Our homes are filled with practical stuff. Let’s look at paper clips: you have them, and they serve a purpose. But you’ve had 200 for years and use maybe two a year. You can get rid of almost all of them. Or all of them! Even if you do end up needing it in the future, you can always just grab one from your office or your kid’s school, right?
- Also, think about the cost to replace an item IF you need it later. You may give away 20 things and then find out you need 1 of them later; if it’s cheap, then you’re still better off overall by decluttering the 20 items.
Ask your parents about family heirlooms
- Mike is guilty of this: he had some items from his grandfather, and even though he no longer used them or displayed them, he held onto them.
- Get “permission” to let it go. Mike asked his dad what he thought about giving some of these items away, and the response was an emphatic “don’t worry about it!”
- It can be good to hear from someone closer to the item that it’s ok to let it go.
Think about the next generation
- What is really important that your family keeps for you after you die.
- Let those be known and tell them to forget the rest.
- Don’t burden your family with a bunch of stuff they’ll hold onto and feel guilty about for decades. Leave them with the important things and the stories about them.
- Imagine if you died tomorrow. Sorry, it’s a terrible and sad thought, but just imagine it for a moment. Imagine your partner, your parents, your kids, or a good friend coming into your home and going through all of your items to decide what to do with them.
Top 3 takeaways:
- There’s value in letting go of things in your life and having less stuff. Stuff isn’t what creates happiness.
- Most things don’t have material value, so don’t worry about the dollars.
- Going through the process of letting go helps you identify the essential things in your life that bring back memories and give you joy.
Show References:
- Book: Let It Go: Downsizing Your Way to a Richer, Happier Life
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Travel is such an important part of many people’s lives, including ours! When you’re ready to get back out on the road, you might need to put in a little more leg work than normal to plan that dream vaxication. Here are our top tips:
- This should go without saying, but get vaccinated. And if you’re not vaccinated yet, don’t travel yet. It’s not worth it for you or the travelers around you.
- Start planning right now. The trend in travel right now is short windows between booking and staying. That drives prices up, so book now for your summer trip. One of the things you can do to start planning now is consider signing-up for credit card offers for travel hacking.
- Avoid the tourist traps, not just because they’re tourist traps. Popular beaches for example are going to be insanely packed and expensive. A trick for testing how packed a place will be is to look at hotel and car rental prices for the time you want and other, less popular times. If a hotel is $100 on a Monday and $500 on the days you are there, it’s going to be too busy.
- Airfare might still be expensive. Flights to popular destinations are going to be normally priced, if not more expensive. Consider alternative destinations and you can score a deal.
- You might need to forgo the car rental. In the depths of the shutdown last year, rental car companies had to sell off much of their inventory. The result is massive demand and no supply. IF you can get a car, you might pay $200 a day for a sedan!
- There are many great hotel deals to be found in destinations that are still recovering. Look for specials to include breakfast or hotel credits in addition to lower nightly rates. But also check out AirBNB and VRBO for house rentals if that’s your thing.
- If you can’t find deals on hotels and airfare, consider your points, but don’t waste them. Get a good redemption rate of about $0.02/mile for air and $0.005-1/point for hotels. Divide the cost of booking by the total points to get this number.
- Skip the restaurants. This is especially relevant today, but in general, buying and preparing most of your own food can save you hundreds a day. Find a place with a kitchen or kitchenette to at least make and bring lunches for the day.
- You might need to pre-order tickets and battle it out for limited spots. In order to balance a surge in visitors, while maintaining social distancing, expect certain places to release limited tickets. Check this for the activities you’re interested in BEFORE you book your travel.
- Research the location you’re going to first, and cost out any unique covid-related travel requirements they have, such as travel insurance or covid-tests.
- Be respectful and wear a mask, and wear it properly. Congrats on being vaccinated, but be mindful that we have a societal responsibility to end this pandemic. Even if you are unlikely to contract covid, your example helps reinforce good behavior.
Top 3 takeaways:
- Start planning any vacations right now.
- Consider destinations away from the summer surge.
- Treat this like any other vacation by controlling costs for the little things and focus on the memorable events you’ll take back with you.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
There are two types of revenge-spending we’ll talk about today:
- Post-pandemic revenge spending is a concept of spending money on the things that the pandemic prevented you from spending on or took from you. It’s spending money to make up for lost time. This could be on vacations (aka “revenge travel”), clothing, restaurants, parties, or home projects.
- A related kind of revenge spend that’s constant is stress-induced. You work so hard you get burnt out and then take revenge on the stressor by spending money.
Many people saved more and spent less during the pandemic, and now they are going to start spending more and saving less. Don’t get caught in this trend; instead, buck the trend! Avoid going overboard on spending and preserve some of the long-term benefits of the good this past year has brought.
Here are some of our tips for recognizing + avoiding revenge-spending:
- Recognize and appreciate that some people don’t have the privilege of revenge-spending as they are unemployed or still suffering from other negative impacts from covid. This perspective sometimes helps me to put my own desires in check. Perhaps consider donating to a local charity or non-profit and helping those less privileged than you during what is still a difficult time for many people.
- Some level of post-pandemic spending is great. As with all spending, ensure it’s focused on your priorities.
- Did your work wardrobe work for you last year? What’s wrong with your clothes from 2020? Remember that and give yourself some time to get reacquainted with the clothes you already have and wear them to work before filling any gaps in your wardrobe. Listen to episode 95 “stop caring about what other people think” episode for some inspiration to not buy new clothes.
- If you put on some quarantine weight and now your work clothes don’t fit, consider focusing on getting back to the weight you were at pre-covid. It’s healthier and will save you money!
- Take the learnings from the last year and incorporate them into your “new normal.” You learned to cook and eat at home and that this could be enjoyable, so do more of that.
- Take your time and think about purchases before you just jump on things.
- If you saved extra money during the past year, then bank it instead of spending it. Do the math of what all the money you saved over the last year will be worth with a few years of compound interest, or better yet, a couple of decades.
- Splurge, but choose where you splurge. It’s not splurging if you do it on everything.
- Create a budget.
- Force a waiting period to spend money. Take your time. Think about things first.
- Find other ways to reduce your stress without spending lots of money. We did a whole episode on self-care on a budget or for free. Check it out for some inspiration!
- Revenge-spend on travel, but keep your splurges in check with your other financial priorities and goals.
Top 3 takeaways:
- Be aware of what revenge-spending is, so you can recognize what is happening.
- Agree on your spending priorities and where you’re going to allow yourself to splurge.
- Commit to putting in place a waiting period on new purchases to avoid impulse-revenge-spending.
Show references:
- Friends on FIRE Episode #57 - How to practice self-care for free
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
What is financial freedom?
- Financial Independence most simply is the idea that you’ve saved enough money that your money saved, passive income, dividends from money saved, etc., can last you the rest of your life, and you never need to work again. The math supporting this concept is often much lower than most people realize.
- Our podcast name and the community we’re a part of use the term FIRE, which stands for Financial Independence Retire Early; it’s not about retiring early; it’s about financial freedom. The concept of retiring early turns some people off because they enjoy working and don’t want to retire, or the concept of not working seems lazy and unproductive. That’s great if you enjoy your job or working and want to do it forever. Realize that could change at some point in your life.
- Financial freedom is having options.
- Financial freedom gives you the option of retiring early or doing whatever the f*ck you want. And we want to retire from Corporate America one of these days, that’s no secret for both of us, but we won’t retire and do nothing. Well, we might do nothing for a while to catch our breath. We will retire from this type of life and lifestyle.
- It’s a path many people don’t realize is attainable. They never thought about it. They are raised thinking the world works only one way and don’t know there were alternative paths.
Why might you want to seek financial freedom?
- Financial freedom provides you with security, options, and ultimately happiness.
- Having the freedom to do whatever you want is seriously better than any feeling in the world. You’re not held captive to any particular circumstance or situation in life.
- It gives you a sense of confidence to be yourself and stay true to your ideals. If something isn’t working for me, I have the ultimate freedom to walk away. I have the freedom not to get caught up in politics at work and not have to step on other people to get to where I want to be.
- You are buying your time back. Time is the most scarce item in the world.
- It allows you to pursue your passions, even if those passions don’t bring in a certain size paycheck. And sometimes pursuing passions requires trying things out and failing at something before you’ll ever make any money from your passions.
- There are many types of financial freedom you can seek. You can seek complete freedom, partial freedom of not needing to make a lot of money, or nothing at all. The industry has coined many types like Lean FIRE, Fat FIRE, Coast FI, Slow FI, and even Barista FI.
How can you seek financial freedom?
- Live on less than you make. This is always known as living below your means.
- Have a higher than average savings rate.
- Invest your savings early and often.
- Understand and trust the math. Know what it costs you to live per year, and know your net worth.
- Work hard and take pride in your work! Be a linchpin, as Seth Godin coined the term in his famous book. For 99% of the world, there’s no “get rich quick” path to financial freedom.
Top 3 takeaways:
- It’s not about retiring early; it’s about seeking and attaining financial freedom.
- Financial freedom gives you the ultimate in security, options, and as a result, happiness.
- Almost anyone can attain financial freedom with a bit of focus and follow-through.
Show references:
- Fioneer’s types of FIRE
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 financial checklist available on friends on FIRE website for free
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #68 - 5 Simple Steps to Investing
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
What we mean when we say “care” is not noticing, or observing, or making a reactive judgment; it means genuinely caring, for better or worse, about that person. Let’s play a little experiment: how many people did you see exiting or entering their cars the last time you were out? You maybe noticed one nice car or a terrible car, but do you remember any of the people? Now, if your best friend pulled up in a 2003 Ford Explorer or a 2021 Maserati, would you CARE about them more or less?
We’re not saying people don’t care about you as a person or aren’t kind; we’re saying they don’t care about so many things that you might think they do. And the faster you realize this, the quicker you can prioritize your money on the things that really matter in life.
A conversation Mike has a lot has to do with LinkedIn and updating a profile. People are worried that when they update it, people will know they’re looking. Mike’s response is always: no one will notice because they aren’t actively looking at your profile. And they wouldn’t care anyway because every single person is looking out for their own career.
People are too busy thinking about themselves to think about you. And your purchases are wasted on them. When you realize this, you’ll have much more substantive conversations and relationships with people. You’ll talk about what really matters.
And if someone does like you more or less because of something you bought, that’s not real friendship or real love.
Be honest. Ask yourself if you’re doing something because it matters to you, or because you’re trying to impress someone else. If it matters to you, then go for it. But make sure you’re skilled at realizing what really matters to you. You’d be shocked to realize that many people don’t actually know what matters to them.
Some beautiful quotes from the internet:
- “The eyes of others are our prisons; their thoughts our cages.” ― Virginia Woolf
- “Your time is limited, so don’t waste it living someone else’s life.”—Steve Jobs
- “I don’t care what you think about me. I don’t think about you at all.”— Coco Chanel
- “I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” - Maya Angelou
It’s not about the stuff; it’s about how you make people feel. And what’s interesting is that having super fancy stuff can often make someone feel bad. So remember that by having just what you need, you’ll actually make your friends and those around you feel better enough with what they already have.
Top 3 takeaways:
- Nobody cares about the stuff you buy. They’re too busy hoping you care about their stuff.
- Figure out what truly matters to you and not trying to keep up appearances for other people. This is the key to unlocking more happiness and better finances in life.
- People do care about how you treat them and how you make them feel. Be a good husband, wife, partner, father, mother, son, daughter, friend. People care about that.
Show references:
- Book: The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life
- Chaco’s slides on Zappos
- I wore the same jeans all week, and no one noticed
- 10 clear reasons why you shouldn’t care what others think
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Location
- Pick a place you are comfortable, whether it’s large or small. We recommend natural light and a view of some nature, but don’t sacrifice comfort or ergonomics for the best view.
- Think about what it’s next to and what makes the most sense for you. Maggie has selected an office location with the most windows that is furthest away from where her kids hang out, as it helps to avoid noise and distractions, but they also know where to find her if they need her. If your kids are younger you may need a place purposefully close.
- If you do not have a lot of space, get creative within your own personal space limitations. Consider re-doing a closet into an office closet, or even a mobile workstation so you can move around to different spaces as they are free.
Technology
- You need a big monitor. Or two. This is a worthwhile expense. Look for a used one before you buy a new one.
- You don’t need a $3,000 laptop, but don’t skimp either. $1,000 will get you a great one. Less than $500 and you’re likely to run into performance issues that won’t be worth the savings.
- It should have a large monitor unless you are going to just dock it.
- It should have a meaningful amount of RAM. At least 8GB.
- It should have a SSD, at least 500GB.
- It should have numerous external ports for connecting USB and HDMI cables.
- Get an external keyboard and mouse. It’s worth the investment.
Ergonomics
- Get a desk and chair combo that creates the right height. Your feet should touch the ground (or a footrest) and your arms should rest at a 90-degree angle on the table.
- Your monitors should be at eye level.
- Consider a footrest to help with xyz. Maggie still uses her medela footrest from when she was nursing, you can also purchase one for about $20 on Amazon, or as Mike suggests you can use a box for free!
- The costs of not getting ergonomics right can be expensive, so give this some attention. Ignoring this could cost you doctor’s visits, rehab, or medication.
Stuff + the miscellany:
- You don’t need other gadgets unless they are solving a specific and material problem.
- Minimize your office supplies. So much is done digitally that you really don’t need a lot of office supplies.
- Keep the space clear of crap. Whether it’s the corner of a room or you have an entire room, keep it as clear and clean as possible. Lots of studies suggest this helps your focus, and for those easily distracted this is clutch!
- Reuse existing things you already have vs buying new things. Repurpose an old desk, use an unused dresser for storage, repaint a bookshelf.
- Consider used first. Now that schools are going back you may find a great used desk or monitor online. Ask on local neighborhood groups before buying new.
- Make a DIY erase board. Maggie bought $5 project panels from Home Depot instead of spending $150+ on a fancy dry erase board on Amazon. And consider DIYing other things you may need or want in your office setup.
- Find out what your Company will let you expense. It can’t hurt to ask. Unless Mike is your Finance guy in which case, don’t ask.
- Printing things are expensive. You can work almost 100% digital when you’re remote, and you’ll save money if you do.
Top 3 takeaways:
- Spend a bit of time to think through the best setup for you.
- Invest in the key things that really matter for you, and then explore used things before buying new.
- Keep it clean and organized. There’s no office cleaning crew like you had at work, you’re now responsible for keeping your space tidy.
Show references:
- Home Depot dry erase and chalkboard panels - $5 each, 2 ft. by 4 ft. (perfect for a smaller panel, or to do multiple panels across a wall)
- Home Depot Eucatile Tile Board that can be used as a DIY dry erase board - $13, 4 ft. by 8ft (perfect for a larger covering to cover most of your wall, or you can cut it down to any custom size)
- Lowe’s marker board that can be used as a DIY dry erase board - $12, 3 ft. by 4 ft.
- Home Depot dry erase paint - $22
- Command strips on Amazon
- Foot rests on Amazon
- Forbe’s article on how to improve your working from home game with these hacks - some great tips in here, though we don’t recommend buying any products you don’t truly need. In case you need a reminder on that, check out Episode #067 | Wants vs. Needs: 8 Tips for buying less stuff!
In this discussion with Haley and Justin, we cover many topics, including:
- How they were each raised by single moms and not taught anything about money. They saw their parents suffering, and they wanted more.
- How they got a $600K inheritance and quickly blew it without really knowing where it went.
- Lifestyle inflation.
- No matter how much money you have, if you don’t know how to handle your money, you could have some serious regrets.
- They are still paying for their past decisions.
- How to find fulfillment with less stuff.
- They are happier now, living on less.
- They are doing things for the future.
- They have made some serious sacrifices to get their shit together.
- Their money mistakes were so big, and now they are so close to being debt-free.
- The debt has been an enormous burden.
- Why they don’t follow Dave Ramsey anymore.
- Leading with shame and guilt to improve your finances versus leading with inspiration and positive encouragement.
- People think the more money you have, the happier you’ll be, but not the case.
- Their recent decision to sell their money and move to an area with a lower cost of living. This is a massive financial power move!
- They learned to budget.
- The importance of having financial literacy in school and teacher curriculum.
Show References:
- Price of Avocado Toast on Instagram
- Price of Avocado Toast podcast on Apple Podcasts.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
After discussing our recent covid vaccinations, we dive into a probably too-long vent about our pet peeves. Eventually, we get to the power moves that we recommend everyone strive for.
Financial pet peeves that drive us crazy:
- Shaming others about their financial decisions. It’s personal finance. You can share what you’d do, but once someone else has made a decision, let it be, it’s their money. On that note, please know we don’t mean this list of pet peeves to be shaming; this podcast is our personal views on finances.
- Not taking advantage of your company’s 401k match. It’s free money, and that’s 100% immediate ROI.
- How retailers convince you that you saved money on something when you actually bought something you didn’t truly need. That’s not how saving money works.
- Letting your kids have whatever they want. We are parents of 5 kids, so we are talking from experience here. Kids will ask for lots of stuff; it’s your job to manage what they need vs. want. And kids will throw fits and not like you briefly when you say no, but they’ll learn boundaries, and they’ll be okay. And they’ll slowly learn that stuff doesn’t create happiness.
- The sneaky way banks convince you that refinancing your mortgage and adding 30 more years to whatever you had saves you money. It might save money in the short-term on your monthly payment and future interest, but often the total cost of the loan is more if you add up the ten years you’ve already had a mortgage to the 30 years you just extended it to. You’ve now spread your mortgage over 40 years.
- The idea that because mortgage interest is deductible, that means it’s good to have.
- The idea that the bank tells you “how much house you can afford.”
- That renting a house is throwing your money away.
- Unscrupulous and misleading sales tactics. I know they work, but that doesn’t make them OK. Just share the price upfront, and be clear + simple about what you’re selling and why. Be cautious, ask questions, assume someone else is trying to sell you something.
- Retiring after only a few years in the workforce.
- That insurance companies are somehow your friends.
- I work hard for my money, and I deserve X item.
- When people dismiss saving money because they “want to enjoy their money.”
- Buying crap you don’t need, especially if it’s to impress other people or just mindless shopping.
- Using credit cards to buy things you can’t afford and don’t need.
Financial power moves that make us happy:
We’ve broken out our power move recommendations into four main buckets. It’s important to keep in mind that power moves, like interest, compound. So the more you do, the more your wealth and happiness will grow. Strive to do all of them. Don’t just pick the ones you think are easier or are already doing. If they seem hard, that probably means they will be valuable to you!
- Foundational:
- Tracking your expenses and net worth. What gets measured gets better.
- Spend less than you make.
- Save as much as often and as early as you can.
- 15-year mortgage, or paying your longer mortgage off faster.
- House hacking.
- Driving a shitty car.
- Investing:
- Investing in index funds when you’re young. Power of compound interest.
- Maxing out your 401k.
- Maxing out an IRA each year, on top of your 401K.
- Leveraging an HSA.
- Superfunding a college fund early, and then letting it grow longer. Power of compound interest.
- Work and Development:
- No matter how much you want to retire early, work for 10-15 years like you’re planning on working until 70.
- Work hard and take pride in your work. Don’t be lazy. This isn’t a get-rich-quick scheme.
- Other:
- Finding an accountability partner. This is why we did this podcast, to encourage friends to talk to friends about money.
- Not caring what people think about you.
- Using credit cards for all of your purchased to earn cash back, points and miles, and then paying it off each month. Amazon Visa and Delta Skymiles are Maggie’s favorite two cards for daily purchases. And level this up with travel hacking with credit cards, if you can handle it.
Top 3 takeaways:
- Financial education and literacy improve all of our financial situations. The more we know, the better we can do.
- Avoid financial missteps as much as possible.
- Take advantage of as many financial power moves as possible.
Show References:
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 financial checklist available on friends on FIRE website for free
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #18 - House Hacking
- Friends on FIRE episode #35 - 10 FIRE Extinguishers + how to avoid them
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #059 - The amazing tax benefits of FSAs, HSAs, and DCAs
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In this discussion with Jose, we cover many topics, including:
- Jose’s story of how he came up as an immigrant to the US, which is a big part of his personal story.
- What Jose learned about money growing up. He saw many financial challenges growing up and experienced some limiting beliefs and not-good ideas regarding money.
- How Jose shifted from baseball to a career in finance to being a finance entrepreneur.
- Helping his parents because he feels capable, not obligated.
- Working hard and believing in yourself.
- Pushing through adversity and the odds stacked against him.
- Jose’s views on financial planning and financial planners.
- What drives Jose to do what he does.
- How the financial industry needs to change.
- Why he started Financial University and how it can help you today. His goal is to spread financial literacy, which is typically not taught in schools.
- The impact he’s been able to have on other people during a critical time in their financial lives.
- The importance of goals and what you’re trying to accomplish.
- Jose’s quality of life now vs. growing up.
- How he can solve problems and serve people, and also be compensated for it.
Show References:
- Financial University
- Millennial Money Mentor on Instagram
- Millennial Money Mentor on Twitter
- Millennial Money Mentor on Tik-Tok
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie shares her various stories of working with four different financial planners, all different types. They all taught valuable lessons on why she doesn’t need a financial planner, and not one of them did anything of value or anything that Maggie couldn’t have done on her own better.
There are a few different types of financial planners:
- % of portfolio + fee/commission-based - The majority charge you a % of your portfolio. They also make fees/commissions on various products that they sell you from insurance to mutual funds.
- Fee-only financial planning - aka a fiduciary - There’s a newer trend in the last decade of fee-based that charges hourly in theory, but many more established ones charge a start-up fee, and then monthly, quarterly, or annual charge. There are resources like NAPFA and XY Planning Network that provide more information and directories on these advisors.
- Financial coaches - There’s a growing trend of financial “coaches” that often charge hourly or for a package of hours. These we’re the least offended by, and if you need help budgeting or getting your finances in order, this could be a good investment. You can get a lot of this content for free or for small fees if you’re willing to take a more DIY approach, but if you’re not going to and this would help you, then investing a bit in this area could be a solid investment for you.
Why we think you do not need a financial planner:
- They cost you a lot of money.
- Their fees tend to be hidden or taken out of your investments. You often don’t receive a monthly bill, though they disclose their fees upfront and on any formal statements or tax documents.
- The costs may seem small, but they add up significantly over time.
- You can do it just as well yourself, if not better.
- Financial planners are trained and incentivized to make you think this is difficult, but it’s not.
- They do not offer a value-add service that’s worth paying for, for the average person.
- Index funds are all you need - listen to our episode on getting started investing.
- Research shows your performance in index funds will match or beat anything actively managed.
- They aren’t as smart as you think they are - many of them are very “old school.”
- They often aren’t familiar with financial independence or early retirement.
- They are not trained or incentivized to optimize your taxes.
- They aren’t skilled in more advanced tactics like rothIRA backdoors or rothIRA conversion ladders.
- You have to do the hard work either way.
- You still have to gather all of your documents, have tons of conversations, and think about what you want and what’s important to you.
- They don’t care about you more than they care about themselves.
- You are the only one who will always put your best interests first - you can’t outsource this.
- Financial planners are trained and incentivized to use sales tactics on you.
- Any financial planner who’s tried to sell you whole life insurance should raise a big red warning flag that they are likely focused on trying to make large commissions and not what’s best for your financial situation.
- You should learn about this stuff yourself.
- Understanding this stuff matters, and it doesn’t have to be overly complicated.
- You can keep it simple and learn slowly.
Top 3 takeaways:
- Don’t be intimidated by managing your finances, and don’t fall for someone’s sales tactics that try to overcomplicate and push you into things you don’t understand and don’t need.
- You can do this yourself. It’s simple. Check out our 2021 checklist if you’re not sure where to begin. Read a book!
- Start now. Go and do the next step for you today.
Show references:
- Episode #68 - 5 simple steps to investing
- Template for $3 at friends on FIRE etsy store – 2021 Financial Checklist
2021 financial checklist available on friends on FIRE website for free - Six reasons why you don’t need a financial planner
- Maggie’s favorite personal finance books
- XY Planning Network of fee-only financial advisors
- NAPFA
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Here are Mike’s 5 reflections on the year:
- It’s important to identify little rewards for yourself, even if they cost money. Self-care is a real thing, and it’s something Maggie does well, and I’ve learned from her this year.
- The world’s shared experience seemed to find solidary in was no match for continued political partisan and racial tensions.
- Working from home has exposed the ridiculousness of the traditional office model. And I look forward to what I believe will be a renaissance for new models of employment.
- And along those same lines, the complete collapse of so many norms reinforced for me how meaningless so many “normal” things are: clothes, cars, gadgets and jewelry, and expensive services. It’s hard to see those things for what they are when there’s so much noise. But when the noise stops, they are exposed as ridiculous wastes.
- Travel is the most important activity in my life. I have renewed my commitment to leave the workforce soon to travel far and for long periods.
Here are Maggie’s 5 reflections on the year:
- This year reinforced and reminded me that I truly value the simple things in life, and it’s mostly all I need. It reminded me to appreciate the simple things in life and take enjoyment from them, like taking a walk in the middle of the day. And it reminded me there’s a better way to live.
- The flexibility provided by working remotely is something I want and desire more of in the future.
- I reaffirmed the value of financial freedom and why it matters to me. If things “go back to normal,” I have the freedom to do whatever I want. It’s a beautiful feeling.
- In a year of social inequality and racial injustice coming to a head, I learned what allyship truly means. I learned it’s no longer good enough to just not be something, but instead the importance of being more vocal and proactively anti-racist and what that truly means.
- I re-learned about the importance of civility and how much it matters in my life and to the world. This year, as a country, we lost the ability to disagree civilly on many topics. Financial topics are an interesting comparison to this; we have some strong financial views on here. We realize not everyone agrees with us, but we think talking about things can improve all of our lives, even if we disagree. And we hope and strive to disagree civilly and respectfully.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
So if you’re ready to make that lifestyle choice, let’s go through how you do it as cost-effectively as possible.
The house needs to be an area that’s also desirable by other people; otherwise, it won’t appreciate, and you’ll spend even more money on the house.
Determine how much you should spend by applying with a bank. Don’t make yourself crazy trying to find the best rate. It won’t make a huge difference when you factor in our later advice. You definitely need 20% but check if making a larger down payment will get you a lower rate. Look at the monthly payment options and a loan amount that’s well within your cash flow. And we mean WELL WITHIN. Factor in future costs like child care if you’re buying a home pre-kids. We can’t stress this enough: do not max yourself out on the monthly payment.
There are all kinds of ways to get a mortgage. In our minds, they're all sort of the same. Don’t go chasing the lowest rate you see on the internet. Just like the internet, you get what you pay for. Keep in mind that loans will almost always get sold unless it’s through a large institution. You can do a Rocket Mortgage search, for instance, but also check with your primary bank or a trusted mortage broker. In the end, choose an apparoch you feel comfortable and confident with.
Next, get a 15-year loan if at all possible. A 30-year, $500,000 loan at 5% means that your first monthly payment is $2,684, with $601 of that being paid towards the principal. Now let's look at a 15-year loan: with a shorter term, you'll get a better rate from the lender, so let's use 4.5%.
You should be paying off that sucker ASAP. 15-year loan and pay it off faster. You will get killed on the total interest. You could very well spend as much on the interest as you will on the house over a 30-year loan. And if you refinance and get a new term, you’ll probably spend more than the cost of the house! A mortgage is not good debt, and it’s different than a mortgage for a rental because the rental generates CASH. Your primary residence does not.
Consider house hacking and refer to our episode 18 on house hacking with Andrew Kerr to learn more about it. If you can generate some cash, that’s awesome. But use that cash to pay down the mortgage.
With a good loan strategy, consider what work the house needs and if it adds value. If it had a modern kitchen, but you don’t like the color granite, don’t buy it and plan to renovate. Only do the work that adds value. If it doesn’t add value, just consider a different house where you can find that.
Put in a competitive offer based on your agent’s feedback. Don’t low ball too hard, but don’t make an asking price offer if it’s not worth it. How do you know? Look at comps. An hour on Zillow, and you’ll get a good idea. This is not HGTV or Million Dollar Listing, so don’t try to game it too much.
Do a detailed inspection and make sure you understand the house. Bring your parents or experienced homeowner friend with you. Mike personally doesn’t ask for much if anything from sellers because he thinks if t’s not material in cost and it wastes time and frustrates people. Maggie will push a bit harder.
If the inspection doesn’t yield a crack in the foundation or Murder Hornets in the walls, you can close on the house. Make sure you have your paperwork in order. Lenders need everything, and it’s usually last minute. It’s a painful process, so prepare yourself.
And after weeks of stress, at around midnight the night before closing, everything gets the green light. Go sign the paperwork and celebrate.
Top 3 takeaways:
- You determine how much house you can afford, not the bank.
- Borrow money for as short of a period of time as possible for your primary residence.
- Do your homework, but don’t kill yourself over the minutia. It will be ok.
Show References:
Mortgage Payoff Calculator on Etsy for $3
Friends on FIRE episode #18 - House Hacking
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Buying a home to live in is a lifestyle decision, not an investment decision. The industry wants to make you believe it’s a wise investment decision, but that’s apples to oranges. But buying a home can be one of the best decisions of your life. Here are some of the non-financial reasons to buy a house.
- Safety
- Schools
- Beauty
- Space
- Quiet
- Proximity to things of importance
- The intangible of having it be “yours”
- Renovations!
But don’t pick those things because you want to impress other people. If you have 2 kids, you don’t need 8 bedrooms. Buying a home is a lifestyle choice, so make sure it’s YOUR lifestyle, not someone else's.
Let’s talk about the market. Interest rates are low and the listener says, BUT, they’ve been low for a while. They were also super low in 2012 when I bought my first house. So don’t sweat it too much. The people who tell you that the time is now are likely the ones selling you the mortgage or hearing that narrative from the banks.
To understand how interest rates work, let’s discuss mortgages work:
- You put some skin in the game with a downpayment, typically 20%. If you put down less than 20% you often have to pay PMI, or private mortgage insurance. PMI costs between 0.5% and 1% of the mortgage annually and is usually included in the monthly payment. The bank lends you 80% to buy the home.
- You then pay the bank back interest and principal each month.
- You pay the % interest on the balance on the loan. It can be SUPER expensive.
If you borrow money for a long time, you’ll pay more interest but less cash each month. A shorter loan is the opposite.
How much should you spend when buying a house? Don’t trust the bank! They don’t care about your lifestyle or your goals. They want you to borrow as much money as possible. So if they approve you for a $500K loan, do not borrow all of it.
In addition to borrowing costs, you have taxes, maintenance, repairs, renovations, not to mention new furniture, art, towels to match the tile, curtains to please your new aesthetic, it goes on and on. It’s expensive.
You might also make money on the property value, but you need to see the whole picture.
Mike and Maggie share the specifics of their own personal homes and what they’ve put into them vs. what they are worth, further supporting the theory that homeownership is a lifestyle decision.
Mike shared a quote from his book, “Whether you own a home or plan to buy a home, it’s better to look at the asset in terms of cost reduction, not future gains. You should be asking yourself, How can I buy and maintain this home for as little as possible.”
So should you buy a house? It’s a lifestyle choice. Is this what you want with your life? Are you willing to incur these costs?
Our Top 3 Takeaways:
- Buying a home is a lifestyle choice, not an investment choice.
- Buy a home for the right reasons.
- Expect to pay a ton of money over time, but if you pick a home for the right reasons, you’ll never regret it.
Show References:
Mortgage Payoff Calculator on Etsy for $3
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie first met Kiersten and Julien at work over 10 years ago, and Mike more recently met Kiersten when we did some shared personal finance talks at work. We start off by discussing our 36+ years of combined experience in Corporate America, and what it taught us, the good and the bad.
We discuss a number of topics with Kiersten and Julien:
- Their experience reflecting on their 20+ combined years in Corporate America, what they did and didn’t see coming, and the good and bad parts.
- The importance of having enough money saved to walk away when it’s time.
- How you can do your job better when you’re not focused on the financial aspect.
- How money shapes people’s truths.
- The concept of hiring smart people and letting them do their jobs.
- How incentives drive behavior at work.
- What people get from work other than an income; it can be people’s identity and what they take pride in.
- What is the acceptable length of a career?
- How we constrain everything else in our lives, but we don’t constrain work.
- Some of their observations on how race impacted their experience in Corporate America.
- How exhausting it feels having to constantly “perform,” and not perform as in doing a good job, but perform as in being someone other than your true self to try to fit in.
- There are few incentives for larger corporations to change.
- Accept things for what they are and chart your own path to freedom.
- Consider a parallel path developing your own income sources while working in Corporate America.
- Learning your full worth as you start to step out on your own.
- How work doesn’t have to be a lifetime endeavor.
- How it’s time to reevaluate the value of employee retention programs as a whole (e.g. forced fun). Imagine a world where we started to embrace the true nature of this relationship, which is a transaction, a price in exchange for my labor and contribution.
- A lot of people don’t need or want the fluff. Reappropriate the funding to other places.
- How to give people the capacity to create change.
- Loosening the chains of the standard workweek could dramatically change the way people work, and make them more effective.
- How we break down work to the bare essentials.
- What are the natural cycles of a modern knowledge worker?
- Removing the romance from traditional employment.
- How to meet people where they are.
Show references:
Rich + Regular Blog
Money on the Table series on YouTube
Rich + Regular on Instagram
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Untamed is written in 3 parts: Caged, Keys, Free. Although the book is written in short chapters that jump around both in time and topic, the book’s general structure supports the broader realization that the author wasn’t in the life she wanted or that was true to her. And then through realization and life changes, she finds that freedom. So we’re going to talk about the parallels to money. Because it’s all well and good to know you’re not happy or fulfilled, but there is a very real requirement in making a change and that’s money.
In the prologue, the author tells a story about taking her daughter to the zoo and sees a cheetah. They are told that the cheetah leads a good life, but the author recognizes that even though the cheetah has its basic needs and leads a life that others determine to be “good”, it actually longs to be in the wild, despite being born in captivity.
In Part I: Caged: Being caged is about doing what’s “right”, doing the things we “should” do, etc. We can all relate to this.
How we are supposed to live our lives:
- How to look:
- Where to go to school:
- Where to live:
- What to drive:
- Where to work/what to be:
Then, the lack of money traps us and puts us in a cage. Which I don’t think we even realize we’re in, just like the cheetah. But it doesn’t feel right. And many people find themselves in a life they can’t afford, in a job they don’t like, and totally unfulfilled. It’s this realization that leads people to FIRE. You don’t discover the community built around quitting your job unless you start searching for it.
In Part II: Keys
What are the keys to free yourself from the cage? Money is a powerful one. It allows us to step out for a moment to see what things could be like. The big one for us, is that annoyances or frustrations that would cause most people to drink and just bear it because they need money, causes us to say, “Do I even want to keep doing this anymore?”
Maggie believes your mindset around stuff and happiness and “Keeping up with the Jone’s” is one of the most powerful keys because it helps you not spend all of your money. You aren’t trying to impress other people, and you don’t believe you’re suffering. Doyle says, “When a woman finally learns that pleasing the world is impossible, she becomes free to learn how to please herself.” It’s not about impressing someone else, learn that and you’re free. You have found the key to the cage.
Your FI number is the key. If you want to have the freedom to make a big change in your life, you need “enough” money. And then you make the rules.
Another key is finding passions. The author talks about feeling right and not, and a passion feels right when you find it. The author would call this, “feeling warm.”
In Part III: Free
Doyle struggles with the idea that she should suffer by staying with her husband, in this life she doesn’t want, for her kids. One of the themes is that being a woman and mom is about being selfless, but she wants to be brave and set the example to live a life true to yourself. So, spoiler alert, she leaves her husband and marries Abby Wambach, the soccer player.
Once you decided that you need to make a change and then you save like crazy, you can reach FI. Now what! You now have the freedom to lead an intentional life, not the life people are telling you to live.
- “We can do hard things.” It can be hard to save money and build wealth. It can be hard to resist temptation and not do what everyone else is doing.
- “Being human is not hard because you’re doing it wrong, it’s hard because you’re doing it right. You will never change the fact that being human is hard, so you must change your idea that it was ever supposed to be easy.”
- “What the world needs more women who have quit fearing themselves and started trusting themselves. What the world needs is masses of women who are entirely out of control.”
- “The braver I am, the luckier I get.”
- “I am a clinically depressed inspirational speaker. I am a diagnosed anxious person whose main job is to convince people that everything‘s okay.. Please note that if I can be these things, anyone can be anything.”
Top 3 takeaways:
- It’s ok to come to the realization that the life you're living isn’t exactly what you want.
- You shouldn’t suffer through it, and growing your wealth will provide the keys to freedom.
- Be brave and make a change!
**Bonus - If this isn’t obvious by now, read this book. And get it from the library!
Show references:
Book: Untamed by Glennon Doyle
Glennon Doyle’s non-profit, Together Rising
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Here’s the situation: when you hire someone or some company to do work for you, you either know specifically want you need or you ask them to evaluate and tell you. Either way, the business is evaluating your situation and wants to make as much money as possible. They are already there and incurring costs.
They will provide you a list of everything they “recommend” that you pay for. And in many cases, consumers are too lazy, too confused, or too unsure of themselves to push back. It’s important to analyze what is being presented to you carefully, but train yourself to be skeptical. Or perhaps cautiously pessimistic. Maybe the car dealer found a leaking gas tank that could cause your car to explode on the highway! You should fix that. But if your air filter looks dirty and “really should be replaced soon,” ask some more questions.
Here’s how it works:
- You are coming to them because they are the experts. So right off the bat, they have the upper hand. You don’t know how to fix your transmission!
- They investigate things you don’t usually see, both figuratively and literally. I mean, have you ever opened up a gearbox?
- They find every single thing that they can justify you fix with a straight face. Your grass will look greener with an iron treatment.
- They might even pressure you. If you don’t trim your azaleas with hand shears each month, they won’t bloom right.
- They set a deadline or some other timeframe to convince you it’s a real thing. You’ll need to come back in 6 months to make sure your car is ok if we don’t take care of it now.
Maybe it’s all true. But almost always, it’s not. And you need to understand how to handle these situations. Disclaimer: if someone tells you something that doesn’t result in them profiting, consider it more closely. And if your doctor tells you you need something, just do it.
Here’s how to handle these situations:
- Assume you’ll be taken advantage of, or that someone else’s job is to get as much of your hard-earned money as possible.
- Generally speaking, serious issues and requirements also have laws enforcing them.
- If a service is not included in a base package, consider it optional. If it were that important, they’d just have that be part of their service.
- Do research beforehand. The more knowledgeable you are or even just appear to be, the less likely someone is to try and take advantage of you.
- Get a second opinion, and let them know this is a lot of money for you, so you’ll need a second opinion. See how they respond to that.
- Try to fix it yourself or at least investigate. If you can fix a part of something or replace one piece, you can demonstrate more knowledge.
- Ask questions:
- What is this?
- Why is it needed?
- What happens if I don’t do it? Weigh the risk.
- I mean really, what would be the worst thing that could happen?
- Is there a cheaper alternative? Different product, grade, etc.
- Decline what you think is unnecessary and let them push back on you. If it’s serious or a prerequisite, they’ll tell you.
- Make a decision and stick to it.
Over time you’ll find some people and companies you can trust because they’ve been straight up with you from the start. They’ve told you that you don’t need xyz.
If you can become better at managing these situations, it will save you tens of thousands of dollars. Don’t rely on people to give you the best deal. Yes, they’ll fix your problems. But they’ll also fix problems that don’t exist. They want to make money. And it’s up to you and only you to protect your cash.
Top 3 takeaways:
- When you ask a business for help, they’ll almost always come up with more things you “need” their help with.
- Be skeptical and challenge them. Ask questions and find out what you really need.
- Understand the real repercussions and the real risks. Small risks for small expenses are fine. But don’t take risks with your health!
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Julia started learning about travel hacking only three years ago, and she quickly has become a trusted expert in the space and is pushing for more diversity in the travel hacking community.
We discuss a number of topics with Julia:
- How Julia got started in the travel hacking space
- Why it’s a great time to start learning about travel hacking.
- The practical results of what you can enjoy from travel hacking, with examples from Julia’s recent Bahamas trip. They enjoyed a free hotel, very inexpensive flights, and upgraded travel experiences!
- Julia teases some more complex topics like the status match merry-go-round, and you can listen to her podcast to learn more about
- The different strategies people take on travel hacking, from enjoying limited first-class travel trips to a higher-volume of more economy-focused travel
- The fastest way to learn travel hacking is by talking to and engaging with others in the community.
- Julie encourages people just to start interacting with the community.
- Ask yourself, “What do you want to accomplish through travel hacking?”
- Travel hacking is the art of getting free travel, using loyalty programs set by hotels and airlines, and credit cards.
- There is a misconception that to get a lot of these points you either have to fly a lot, sleep in a lot of hotels, or spend a lot on your credit cards. That’s actually not true, and there are different strategies in place so you can optimize rather than maximize all of your efforts!
- Julia is adjusting her future personal travel hacking focus from being about the quantity of trips and shifting to the quality of her travel experiences.
- Tips for travel hacking for kids.
- Julia is pushing for more diversity in the travel hacking space and talks about her journey to represent more diverse points of view in this community.
- The importance of using credit cards responsibly.
- Julia’s personal money goals, and prioritizing travel hacking vs. micro-managing and saving tiny amounts of money on other things in your budget.
Show references:
Geobreeze Travel on Instagram
Geobreeze Travel
Geobreeze Travel Hangouts
Go Curry Cracker
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
People often try to show their love through fancy gifts, but that’s usually not the most effective way to show your love. We talk through the importance of learning your love languages, other considerations for how to show your love, and ideas for showing your love on a budget.
Love languages
- Figure out your and your partners love language. Also, hope that your partners love languages focus on the four that cost less money! It’s ok if they don’t. You can take the quick online here, and it takes 5 minutes.
- Share and discuss the results with your partner. Communication about things like this is so important for your relationship, and such an easy thing to do.
- The five love languages are:
- Physical Touch
- Words of Affirmation
- Quality Time
- Acts of Service
- Receiving Gifts
- Notice four of the five love languages do not involve spending money, and you can easily come up with ideas across all five that don’t involve spending money.
Things to remember when giving gifts:
- It’s the thought that counts. That’s not just a saying.
- Remember that if someone only likes you because you lavish them with gifts, then it might be a sign it’s not the right person. Early on in a relationship is when there can be the most pressure to shower someone with gifts, but we would argue that’s actually when it's most important to reign this in. Gifts can be distracting from what’s happening in a relationship. When you strip all of that away, you find if you’re truly compatible and what someone values and cares about. If someone doesn’t like you because you’re on a budget or trying to show your love in budget-friendly ways, that might be a sign that they are not a great long-term partner. We’re not suggesting you be cheap, but there’s a fine line here, and you need to decide what’s right for you.
- Consider your budget and lifestyle, and consider gifts that fit within that.
- The best gifts may take some time to think about and come up with. Sit back and think about what they truly love and value within their top love language categories.
- Show your love year-round, not just on Valentine’s days or other obligatory holidays.
Ideas for showing your love for free or on a budget:
- Physical Touch - Give a massage, plan a romantic snuggle on the couch with a good movie, or uhm, you know, get physical.
- Words of Affirmation– Write a love letter, write a poem, make and write a beautiful card, or just sit them down and tell them how you feel about them.
- Quality Time– Block a focused chunk of time to spend together, plan an outing, put your phones away and be focused, go on a hike, or spend time doing something they enjoy doing.
- Acts of Service– Wash the dishes, clean the house, fold the laundry, finish that project that’s been driving them crazy, or xxx.
- Receiving Gifts – Consider gifts that are smaller and thoughtful but not very expensive. Make them a coupon book, or consider Joel’s 100-day book idea. Gifts should be within your budget and lifestyle. If you have tons of money, then go for it and splurge. If you’re in tons of debt, take it easy here.
Top 3 takeaways:
- It doesn’t cost money to show your love.
- Learn your and your partner's love language, and use that knowledge for good!
- Take time to think about thoughtful gifts and consider all the details to make the gift special.
Show references:
5 Love Languages Quiz
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start by discussing our own experiences with life insurance, and then we dig into all of the details and common questions around life insurance.
Three basic types, with the first two being the most prominent:
- Term Life
- Pay a monthly premium for a fixed payment made upon your death with a fixed term. Pretty inexpensive.
- It’s simple and can be purchased everywhere.
- Whole Life
- There’s no term, but you get a payout at death as long as you keep paying your premiums.
- It’s pretty expensive.
- Pretty scammy. Salespeople get massive commissions because it’s incredibly profitable for insurance companies.
- Positioned as an investment, but only after many years is the plan worth more than you’ve put it. And even the payment upon death isn’t as good as you could get just investing.
- Many people who have already bought a whole life policy would still benefit from canceling it and cashing it out now. It is not the sort of thing where you should just stick with it once you get into a whole life policy.
- Accidental Death and Dismemberment
- Only pays upon death or gruesome injury caused by accident.
- It’s not technically life insurance, but we include it here because it’s the cheapest option by far, and for healthy people, you're much more likely to die in a car accident than of natural causes.
- There’s also something called Long-term disability insurance. Many would argue this is more important than life insurance. It protects you from a loss of income if you become injured or sick and can’t work. We’re not going to cover this in-depth, but it’s something to consider, and we’ll do a show on it in the future.
Do you need it?
- Like all things, it depends.
- It’s peace of mind that your family will be taken care of if something happens to you, so for most people, that’s worth it.
- If you’re already financially independent, then you don’t need it. The whole point of life insurance is to make sure your family is taken care of if something happens to you. If something happens and you already have the amount a policy would be for in the bank, then you’re fine without it.
How much will it cost me?
- It could range from $10-200+ a month - The cost varies based on your age, # of years, current health, and the company quoting you.
- It’s like all things, do your research and shop around for the best rates. If you have access to USAA, they have some of the best rates.
- If you already have life insurance, it could still be worth it to shop around five years into a policy and it might still be cheaper.
- Most companies offer a basic plan at no cost and additional coverage, which is subsidized or at a better rate. Remember that life insurance often goes away instantly the minute you no longer work for the company. We think of this as just extra icing on the cake, but it’s not the cake. Don’t rely on this. We suggest avoiding adding additional coverage through your employer and going through a personal policy for any life insurance needs you have. It can also take a couple of months to get a new policy in place, so you can’t just be covered the day you find out your lost your job and replace your work sponsor’s life insurance.
When + how long should I have life insurance?
- If you have other people depending on your income to live comfortably, then you should consider life insurance.
- Think about the quality of life you want for your partner and children if something happens to you. Do you want their college paid for, the mortgage to be paid off, etc.
- Get it priced out at different options, and then think about what’s important to you. For $1M it might cost you $65 a month, and then for $500K it might cost $40. Decide if it’s worth that extra $25 a month for you to have twice as much for your family. This is a personal decision.
- You can’t increase the length without redoing your entire policy, but you can reduce the length by canceling it whenever you don’t want it anymore.
- You can stop paying on a term policy at any point, and it will cancel. This means if you get a 20-year policy and then become financially independent in 10 years, you can just cancel your policy.
Where do I get life insurance?
- Like all things, shop around!
- You can call a few companies to get quotes, or you can use a comparison site like policy genius to get a bunch of initial quotes. Beware, when you fill out forms on sites like these, you’re often going to get a ton of follow-up emails and phone calls, as you’ve just given your info out to lots of companies who sell insurance.
- If you’re eligible for USAA, we highly recommend you check that out. If you have a family member who was in the military, you may be eligible. We’re eligible because my father-in-law was in the military.
- Like with all things, make sure you choose a reputable company with high ratings. Nerdwallet has a good listing of best-rated insurance companies.
- The process includes a fairly lengthy application, usually online, with lots of questions about your medical history and lifestyle. Then there’s an in-person physical, and most companies send someone to your house to take vitals, blood, etc. They often will require copies of medical records if you have certain conditions or have had recent procedures.
- The shopping process and then getting your medical appointment and approval can sometimes take a couple of months, so don’t delay and get started today!
Top 3 takeaways:
- Life insurance is ideal for most people to have.
- Understand what you need and how it works.
- Shop around for the best pricing, and don’t buy more insurance than you need.
Show references:
Policy Genius
USAA Life Insurance
Nerdwallet life insurance info
Nerdwallet life insurance calculator
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mike and Maggie both exercise regularly, including running, hiking, walking, yoga, free weights, and youtube and other classes you can access from home. And the best part is, we do it without spending a lot of money. Staying physically fit is incredibly important to us, but we’ve found ways over the years to do it for minimal cost and that works for us. This is an area of spending we believe is okay if you’re committed to it as it’s so important to your health, but you also don’t need to break the bank to stay fit.
There are three key things you need to workout, so let’s talk about each of them….
Clothing/gear
- Don’t fool yourself. Don’t tell yourself that you need to wear lululemon workout clothes or look a certain way to go running or do yoga. Get the clothes you technically need to be successful and call it a day.
- Earn the gear/clothes. Don’t let yourself invest a lot in a new activity if you’re not yet sure you’re going to like it. Borrow, rent, or go cheap on things until you know you’re going to commit to something.
- Quality over Quantity. We focus on quality over quantity. Maggie workouts a lot, and so she’s already doing laundry so it’s not a big deal to have fewer workout clothes if you’re already doing laundry every few days.
- If you use the gear, then invest in good gear and feel good about it. If you know you’re not going to use it, then question yourself aggressively before buying more stuff.
- Take care of your workout clothes and they will last years longer. Wash them in cold water and avoid drying them. Maggie never dries her workout clothing. Buy a $30 drying rack on Amazon, and it’ll save you a ton of money as your clothing will last so much longer. And this is the case for many other types of clothes beyond just workout clothes.
Access to equipment:
- Tons of workout activities require zero to little equipment. For example: running, walking, yoga, hiit classes, core classes, etc.
- Inexpensive workout equipment that can serve multiple purposes:
- Exercise bands, $10+
- Exercise or yoga mat, $10+
- Inexpensive free weights, prices vary from $20 - hundreds of dollars
- Pullup bar that you put above a door, $30-40
- Create a workout space in your home if you have the space. And make it as nice as you can to motivate you to want to work out. We have a TV and apple TV in ours so I can watch TV while I workout, and it’s just a nice room I enjoy going into.
- Consider buying used gym equipment if you’ll get your money’s worth out of it. We have a treadmill, exercise bike, and a bo-flex.
- Bo-flex was used for $300
- Treadmill was around $900 15 years ago, from play it again sports
- Bike was about $250 over 10 years ago, on sale
- Do you get free access to a gym through your work?
- Paid gym membership. This is my last choice. We personally prefer working out at home and outside, as it saves me a ton of time and money. There was a time when my kids were younger and I didn’t have a choice but to workout at home as I couldn’t leave them alone, but now it’s an active choice. The time is takes to drive to a gym, pack my clothes, drive home all sweaty, etc. It’s just not an enjoyable experience for me.
Access to motivation + classes:
- There are tons of free + really quality classes on youtube. From yoga, to hiit (high intensity internal training) classes, to cross-fit style classes. Search for classes on things you’re interested in, for example… you want a hiit class to all taylor swift songs, it’s on youtube! These are two of Greg’s favorite youtube yoga channels:
- Five Parks Yoga with Eric Sampson
- Muscle + Mat
- If you can afford it, there are some paid online subscriptions that give you access to tons of classes, but be cautious about what you really need vs. want here. A few I’ve used over the years:
- Beach body on demand
- Apple fitness+. Maggie is using it now. It syncs to your apple watch, and it’s pretty cool. We have been doing dance classes with the kids.
- Gym memberships that give you classes. If you’re paying for a gym membership, by all means take advantage of everything it has to offer, from the classes to the free childcare.
Top 3 Takeaways:
- Commit to improving your physical fitness this year. It’s good for you, and it will also help you on your financial fitness journey. They are linked!
- Don’t fool yourself into thinking you need to spend a lot of money to be healthy and stay fit. It’s just an excuse. Everyone listening to this podcast likely has access to what they need to start working out today FOR FREE. You just need your body and youtube.
- Consider investing in some equipment to improve what’s available to you at home. Research what you can get used, inexpensively, or perhaps even for free.
--
Show References:
- Forbe’s Article: 3 Vicious Cycles: Links Among Financial, Physical And Mental Health
- $30 drying rack on Amazon
- Five Parks Yoga with Eric Sampson
- Muscle + Mat
- Beach body on demand
- Apple fitness+
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
It happens to everyone. We get a gift and we just don’t like it or need it. Sometimes we’re with the person and have to accept it and feign enthusiasm uncomfortably. It’s painful, we know. But when you get a gift you don’t want, don’t let it clutter your life. Try to put it to good use by making someone else happy or by exchanging it for something you do like.
How to handle unwanted gifts
- Sometimes you just don’t like or want the gift, and that’s ok.
- In almost every case, the gifter struggles with what to get you and just wants you to know they are thinking of you.
- If you returned it or regifted it, and the original gifter asks how you are enjoying it, just lie. It’s ok.
- Sell your gift cards! Check out Raise.com to sell yours. And also, check out what’s for sale.
And here’s a tip for future years: tell your friends and families what you want or don’t want. Set limits and boundaries to ensure you don’t get stuck with unwanted gifts in the future.
Because the holidays are in a big part for kids and toys, and because those toys can be of terrible quality, we know they make break. Sometimes immediately. What happens when you buy your kid a toy and it breaks Christmas morning?
How to handle broken Gifts
- Return to the retailer
- The person at the counter doesn’t care about you. Don’t invent an elaborate story. Just walk up and tell them you’d like to return it.
- Return to the manufacturer
- This information is usually hidden deep inside websites, but it’s there. Sometimes, the manufacturers prefer you contact them before going to the retailer because it’s more cost-effective.
- File a claim with your credit card
- Many credit cards offer insurance for damaged items. It doesn’t matter if it’s your fault!
- The filing process can be a bit tedious, and that’s by design. Stick with it, though, and you will likely get a statement credit for that item.
Top 3 takeaways:
- It’s ok to not like all your gifts. Don’t hold onto something you don’t want.
- When a gift breaks, don’t give in. Get a refund or exchange.
- It is the thought that counts, so consider doing fewer physical gifts for your loved ones and find interesting ways to show them you care.
--
Show references:
Raise.com
043 | Know and use your credit card benefits
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mike has shared before that his dad retired in his early 40s, and this lifestyle approach inspired Mike’s FIRE journey at a young age. Maggie has been trying to get Mike’s dad on the show for a while, and we finally succeeded when Mark and Jack invited themselves on the show.
In this discussion with Jack and Mark, we cover many topics, including:
- Jack and Mark met at work, just like Mike and Maggie!
- They found a common interest in saving enough money so they could jump out whenever they wanted to.
- Jack and Mark nicknamed themselves the Pros of Dover.
- How they each grew up and what it taught them about money.
- The importance of values and how they learned early on they had the same values.
- A Franklin planner influenced parts of Jack’s life and journey.
- Jack read this book at 28, which inspired him on this journey: Cashing in on the American Dream: How to Retire at 35. He would not recommend this book today though!
- Two books that Mark found inspiring: Rich Dad, Poor Dad and The Millionaire Next Door.
- Avoiding lifestyle inflation and keeping up with the Joneses.
- Accumulating money is buying yourself options for later in your life. It’s all about accumulating a big next egg so you can have options when you leave work.
- At a young age, Jack realized that he had all of these other personal goals he wanted to pursue in life, outside of work.
- Fairly early on, Jack got his company to agree he could take summers off to travel with his kids. He structured his job around what he wanted, and he wasn’t afraid to ask for what he wanted. He decided to keep making money as long as possible until it wasn’t fun anymore.
- When he decided not to take a job when his company was moving and instead retire early to spend time with his family, he got a letter from the CEO praising his decision.
- The importance of being in sync with your partner on values.
- The bureaucracy and stress of some jobs can become all-consuming. Being on call 24/7 with the advance of new technology and how disruptive it can be. Keeping in mind what you’re at work for and why you’re doing it.
- Jack’s love of log paper. We think this is basically graph paper, but we’re still not entirely sure. Mark still has one of their projection net worth curves from 1995!
- Jack doesn’t think math is Mike’s thing. Maggie was shocked by this statement!
- If performance is measured, performance improves!
- If you just continue to save a lot of money and do it at a consistent rate, you’ll get there.
- Jack always treated saving money as a hobby. Trying to keep the same spending level year over year became a fun challenge for him.
- Value-based thinking eliminates a lot of remorse.
- Regrets are difficult as you don’t know what the alternative future would have been.
- The problem that Jack sees with people who want to retire early is that they don’t have a clear plan on what they are going to do post-retirement. Have a plan and vision for how you spend your life!
Show References
Book: Cashing in on the American Dream: How to Retire at 35 (they don’t recommend!)
Book: Rich dad poor dad
Book: The millionaire next door
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
It’s hard to remember all the things you need to do throughout the year, so having a checklist really helps. This is comparable to a home maintenance checklist for your house. It’s hard to remember you need to change your air filter in November and cut the ivy off the trees a few times a year. If you have a checklist, you’re on a much better path to accomplish your goals for the year.
We’ve created a starter checklist to then take and customize for your personal needs and goals. Download the checklist, remove the things that don’t apply to you, add additional unique custom items that apply to you and we would never know, and then manage and track your progress throughout the year. Remember, what gets measured gets better!
We talk through this checklist at a high level and share some thought-starters and recommendations on each of the items on it. Most of the items are self-explanatory, but we also share which podcast episodes could be helpful if you need additional details and inspiration. The sections of the 2021 financial checklist include:
- Financial Management and Organization
- Retirement Savings
- Savings and Investments
- Debt Payoff
- Employer Benefits
- Cutting Expenses
- Credit and Credit Card Management
- Wills and Estate Management
- Taxes
- Giving and Giving Away
Top 3 takeaways:
- Download and use this checklist, it’s helpful.
- Make the important financial responsibilities part of your routine. When they become habitual, it won’t seem like work.
- Keep at it and celebrate your successes throughout the year.
Show References
- Template for $3 at friends on FIRE etsy store - 2021 Financial Checklist
- 2021 financial tracker available on friends on FIRE website for free
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start with a bit of reflection. What a year it has been! There have certainly been ups and downs, both personally and professionally, but as a team, friends on FIRE has had it’s best, and only, year ever!
- We aired 75+ episodes.
- We reached 35K downloads.
- We were a finalist for a Plutus award.
- We made a ton of great friends in our interviews.
- We had fun together.
- We had a positive impact on people’s lives.
For our main topic to close out the year, we revisit the importance of goal setting:
- The importance of setting goals
- Run your life like a company.
- What gets measured gets improved.
- Only when you track and measure results can you adjust and improve.
- Managing goals in a changing environment like Covid
- Things outside your control change all the time. You need to figure out if your goals need to change or you just need to persevere.
- Goals help get you through challenging times. They keep you focused and motivated.
- SMART goals: Specific, Measurable, Assignable, Realistic, Time-related
- Talk about and align goals with your spouse or partner
- Need them on board
- Getting them on board when they different with money is another episode
- But if they are not on board, don’t use your spouse as an excuse. You control what you do. Start with yourself and set the example.
- Common goals with friends
- Accountability
- Fun
- Track them!
We encourage everyone also to take some time to step back and consider more qualitative progress in 2020. Take some time to reflect on this past year, note some highs and lows, and capture the standout moments. Some ideas for capturing those moments are:
- Go back and look at your calendar to trigger memories and moments.
- Look at your photo reel on your phone, google photos, or wherever you archive your photos.
- Take a scroll through your notes or journals if you keep one.
We each share our standout moments in 2020. We wrap up this episode by sharing our 2021 goals.
Top 3 takeaways:
- Goal setting is the most important first step to making changes in your life.
- Make your goals SMART.
- Take a few minutes to reflect on 2020, especially the qualitative highs and lows.
Show References
- friends on FIRE etsy store
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website:www.friendsonfire.org
friends on FIRE etsy store
In this discussion we Tom we cover a number of topics, including:
- Tom has been a teacher in Chicago public schools for 25 years.
- He grew up in a middle class household, but he never really learned how money worked as a child. They did not talk about money a lot. When they couldn’t afford something, they just didn’t buy things. They didn’t talk about investing or how money can work for you. He was told to find a job with a good pension to take care of him. He didn’t realize how money works until his mid-40s.
- He eventually noticed he wasn’t really paying attention and he was spending all that he was earning. They had racked up credit card bills and were living paycheck to paycheck. They were leasing cars, using raises to buy more stuff, and one day they just got fed up with things.
- Lifestyle creep. They were aware of the pain of not being able to keep up and not do as much as their friends and family members are doing as their...embarrassment from falling into debt.
- One of the first times he was really aware was one summer when he didn’t have enough money to make it through the summer when he’s not receiving a paycheck as a teacher.
- Major turning point.. He was miserable and he didn’t know why. They felt out of control. They were counting on these future raises, but the lifestyle creep was killing them.
- He started watching all of these youtube videos and reading books and learned so much about better ways of managing their finances and living.
- Turning their finances around has improved their relationship and happiness levels. The best part is that they are communicating more, setting goals together,etc.
- They learned about zero-based budgeting and attached their budget with a vengeance.
- Within 3 years, he went from barely $300 left in their budget each month to $43K in cash, all of their debt paid off except for mortgages, and drastically changing their approach and relationship with money. Some of the ways they cut back include cutting back XM radio, magazine subscriptions, and changing SUV leases to more affordable cars.
- Tom has one rental property, and he shares how not to get into the rental property market. He would not recommend his approach to others, but it’s worked out OK for him in the end.
- Tom has read a lot of books, and his favorite recommendations are in the show links below.
- Tom shows that you can live within your means and achieve financial freedom on a teacher’s salary. It reminds us that having your finances in order is achievable at most salary levels.
- Tom believes you can better control your finances if you just take the time to learn this stuff.
- Tom shares some of the work he’s doing to improve transparency in the 403-B programs offered to teachers in his area.
- Tom shares what he is now teaching his kids about money.
Show References
- Tom’s blog: Whatthefi.com
- Tom on instagram: @whatthefiguy
- Book: Rich Dad Poor Dad: What the Rich Teach their Kids About Money
- Book: Dave Ramsey - Total Money Makeover - a kick in the butt to attack debt, focused on the baby steps
- Book: The Barefoot Investor: The Only Money Guide You'll Ever Need
- Book: The Book on Investing In Real Estate with No (and Low) Money Down: Creative Strategies for Investing in Real Estate Using Other People's Money
- Book: The Simple Path to Wealth: Your road map to financial independence and a rich, free life
- Book: Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School
- Book: Retire before mom and dad
- Book: The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
- Bigger Pockets Website + Podcast
- Stockpile app he uses with his kids
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We are joined by one of Maggie’s best childhood and adult friends, Erica. Erica has been curious about values-based investing for years, and when she posed several questions to Maggie we thought it’d be fun to bring her on this podcast for the discussion.
What is values-based spending?
- You may see a lot of different definitions of this out there.
- To us, values-based spending or values-based budgeting is the idea of spending your money in alignment with your values and priorities. To do this, you need to be clear about what matters to you. And if everything matters, then nothing matters.
- Prioritize what matters to you and what you care about. Set up your budget and spending practices in those areas, and reduce your spending in other areas.
Our thoughts on values-based spending:
- It’s important! Everyone should do it. We do it.
- This is why tracking your expenses matters. If you don’t know where your money is going, you can’t put in the work to align it to your values. Do you value travel? Great, then it’s OK to spend more money on travel. Do you value fast food and random crap from Target? Cool, well then quit spending money on fast food and random crap from Target.
- Budgeting vs. Tracking Expenses episode reminder. Tie values into either approach.
What is values-based investing?
- We define values-based investing as making financial investment choices based on your personal values and views, vs. just a company’s performance. This could mean looking at a company’s product, actions, or leaders and seeing if they align with your values.
- There are company’s you believe have a positive impact on the world, from our culture to society to the environment. There could be company’s you think are indifferent and company’s who are doing damage.
- Values could include your faith, health practices (e.g. we’re vegan and don’t want to support the meat industry), climate change, environmental policies, human rights, diversity/inclusion, etc.
- Values-based investing could mean screening more things in, screening things out, or both.
- Most banks or trading firms will offer recommendation or lenses on this that you can research more:
- Betterment markets some of their funds as “With our new and improved Socially Responsible Investing Portfolios, you don't have to choose between investing in companies whose values align with yours and your performance goals.”
- Fidelity will let me screen ETFs for various factors, and one is a socially responsible screen. There are 101 ETFs across multiple categories I can drill-down into.
- Other funds include: NACP, SHE, and WOMN. When we researched these funds and looked at the individual stocks within them, they look very similar to top S&P 500 firms. Judge for yourself, but we think you’ll be surprised to see what’s in these funds and the how low the bar is set of what makes it in to the fund.
- Vanguard ESG US Stock ETF (ESGV): screened for certain environmental, social, and corporate governance (ESG) criteria.
- Invesco Solar ETF (TAN): First Solar (FSLR) and SolarEdge Technologies (SEDG), TAN is a way to invest in the solar energy trend without going all-in on a single company
Our thoughts on values-based spending:
- It’s important to understand how investing actually works, before you start to tie your values to it. A company exists to create value for its shareholders.
- Everything in life is a trade-off, and so is values-based investing. You’re trading off profit vs. you feeling good about something. That’s a personal decision.
- Diversification is always an important consideration. It’s not an OR thing, it’s an AND thing. Perhaps I want to start moving more of my money into the company’s who’s mission and beliefs I align with. I buy so few individual stocks this is less applicable at times. I want to invest my money in a location that’s going to perform decently and not ruin the world. It’s all about continuums and scales (e.g. I won’t do this as it’s so far against my values, but I will invest my money in broad ETFs that contain facebook and amazon stock).
- Read the fine print. Some things will be marketed to you as if they are socially responsible, but dig into the details. See what companies are in the ETFs and read what their requirements are and how they hold companies within accountable.
Top 3 Takeaways:
- When you buy shares of stocks it doesn’t go to that company directly, it goes to the other investors.
- Erica’s dad might be right, altruism and investing don’t always mix. You can invest and make money, and also be altruistic. They may be separate activities, but you can do both things.
- You need to understand that if you are receiving a message about something from a company (for profit or non-profit), someone is marketing to you. You need to be skeptical and do your own research.
Show References
- Book: The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically by Peter Singer
- Give Well
- Charity Navigator
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie first met John O when she saw him speak at Plywood People, a nonprofit in Atlanta leading a community of startups doing good. John spoke about how hope can make all the difference, and hopelessness can destroy communities.
We discuss many topics with John Onwuchekwa:
- John first and foremost describes himself as a husband and father.
- How a lot of people come into disenfranchised communities and take but don’t give.
- John’s early years and what it taught him about money. John is the son of two Nigerian immigrants. His parents were hard-working and frugal. He then had friends who mentored him at a young age about money and budgeting. They taught him to know where every cent goes.
- A lot of people think it’s about the amount of money you have versus your attitude about money.
- Most people think they have money problems, but really they have insecurity problems. And money just becomes a tool for chasing approval from people.
- Logic isn’t what drives people. What drives us are our loves. Until you find a security that’s more stable than money, you’ll constantly be in the same place.
- Start with the attitudes and what drives you. Your values!
- As his church, they require premarital counseling and financial counseling is one of their modules.
- The history of coffee. It involves a goat. John realized coffee was an area of injustice.
- John rode MARTA, Atlanta’s public transportation system, to observe the city and it’s trends. The coffee supply chain is like watching the MARTA line drive north. He observed that it starts heavily black on the southside of Atlanta, and turns more white as you go north. Black people are getting off the train before it gets to some of the city’s most prosperous areas. Coffee is the same in that it is often grown in and comes from historically black areas, but then it turns more white throughout the supply chain as it gets to an end customer.
- He learned from Willie Jennings that geography is never an accident. Those observations that you make aren’t incidental, they are very intentional.
- A more intentional pivoting for people to move into disenfranchised communities and invest in it.
- In 2020 when covid first hit the US, he heard Andy Crouch talking about how this was the ice age and we needed to pivot how we did business. He took this advice early on and pivoted how Portrait coffee started. It’s proven to be an incredibly successful approach.
- Everyone’s story has a sense of luck, as in the right place at the right time.
- Luck favors the prepared.
- The Black Lives Matter protests this summer, and how people were forced to sit back and understand the importance of
- Willingness to help without the requisite wisdom to know what to do always leads to a disaster. Willingness met with wisdom.
- John has found that there are a lot of people that are willing to help, but willingness to help without the requisite wisdom to know what to do always leads to disaster. Willingness needs to be met with wisdom. Things are complex and we need to process
- The importance of learning.
- John shares his top three recommended books for those who want to learn and educate themselves on systemic racism better. The book names are in the show notes below.
- Reading history as written from the perspective of the people that were shafted, and realizing that the problem that we see goes deeper than what we thought that it was, so charity can’t be the way that we solve such a complex problem.
- Part of what makes offering solutions before people have done the work to understand the nature of the problem is that even saying what you say in the solution can be misinterpreted if they don’t have the schema to place it in. If people don’t know what has led to the nature of the problem, then we can’t start to solve it.
- The importance of buying from black owned or minority businesses and entrepreneurs. People don’t know all that’s gone into it, so it can seem like this blanket affirmative action. It seems discriminatory and miniscule at times. It’s small like an acorn is small. Acorns start off small, but they can become oak trees.
- Your actual dollars on where you spend them matter like acorns planted in the ground matter.
- People have to learn.
- “A problem well-defined is a problem half solved.” - John Dewey
- People often don’t want to really understand the nature of the problem.
- The people who have done the most significant work are the people that have spent the most time understanding the nature of the problem. By the time they dive deep and see how far things go, they’ve got a million action items they can take. They aren’t spending as much time saying what can I do.
- Step 1 - Learn. Step 2 - Use your dollars wisely to support minority businesses. Step 3 - Learn some more.
- John’s podcast, launched in 2020, is called four in the morning. To him, getting up at 4am is an act of hopeful defiance. Each day he is reminded that just because it’s dark outside, it doesn’t mean that it’s not morning. The sun doesn’t have to be shining for it to be a new day. He just wants to get up and wait for your circumstances to catch up. The sun is eventually going to rise. You have the choice to rise up and inspire other people to hope.
Show References
- Portrait Coffee
- Portrait Coffee video - explains Marta reference in more depth.
- John’s Four in the morning podcast
- Andy Crouch article
- Book: The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa Baradaran
- Book: Democracy in Black: How Race Still Enslaves the American Soul by Eddie S. Glaude Jr.
- Book: When Affirmative Action Was White: An Untold History of Racial Inequality in Twentieth-Century America by Ira Katznelson
- Book: Me and White Supremacy: Combat Racism, Change the World, and Become a Good Ancestor by Layla Saad
- Plywood People
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
It took Mike about 2 weeks to read Tools of Titans by Tim Ferriss. It took Maggie about 48 weeks to read Tools of Titans. In Maggie’s defense, it was 647 pages and 2020 was a doozie of a year and it threw a lot of interruptions her way. Either way, in the end, they both read it. And Maggie used her 48 weeks to take better notes on it than Mike did.
Our top money-related insights and lessons from Tools of Titans:
- Stuff and how it won’t make you happy. More broadly, happiness and money.
- Derek Sivers quote on a billboard, “It won’t make you happy,” to be placed outside of shopping malls and car dealerships.
- Naval Ravikant said, “The most important trick to be happy is to realize that happiness is a choice that you make and a skill that you develop. You choose to be happy, and then you work at it. It’s just like building muscles.” He then went on to say, “In any situation in life, you only have three options. You always have three options. You can change it, you can accept it, or you can leave it. What is not a good option is to sit around wishing you would change it but not changing it, wishing you would leave it but not leaving yet, and not accepting it. It’s that struggle, that inversion, that is responsible for most of our misery. The phrase that I probably use the most myself and my head is just one word:accept.”
- The role of money in your life
- The idea of enough. Our wants vs. needs episode. Studies about how your happiness doesn’t increase after you have some basic level of money to take care of yourself.. after that more doesn’t buy happiness. It often does the opposite.
- Money is a great servant but a terrible master.
- Knowing your target monthly income and ideal lifestyle cost.
- “What’s my real target monthly income. TMI. For the latter, in other words: how much does my dream life—the stuff I’m deferring for “retirement”—really cost if I pay on a monthly basis.”
- Why you, sometimes, spend money.
- “Trying to get everyone to like you is a sign of mediocrity.” - Colin Powell
- “If you stop caring about what others think, you’ll magically start spending less money.”
- The chains money can put on you. Be careful!
- “If you find yourself saying but I am making so much money” about a job or project, pay attention. These are warning signs that you’re probably not on the right track.
- “It is far better for a man to go wrong in freedom than to go right in chains.” - Thomas Huxley
- Financial freedom
- There is a chapter titled “How to earn your freedom”. It’s worth reading a few times. “Instead our insane culture of fear, fashion, and monthly payments on things we don’t really need - we quarantine our travels to short, frenzied bursts.” In this way, as we throw our wealth at an abstract notion called, “lifestyle,” travel becomes just another accessory - a smooth-edged, encapsulated experience that we purchase in the same way as buying clothing or furniture.”
- The trend of vacations towards a “more simple life.” “Purchasing a package vacation to find a simpler life is kind of like using a mirror to see what you look like when you aren’t looking in the mirror.”
- Naturalist Edwin Way Teale wrote in his 1956 book Autumn Across America…. “Freedom as John Muir knew it, with its wealth of time, it’s unregimented days, its latitude of choice… such freedom seems more rare, more difficult to attain, more remote with each new generation.”
- Thoreau said that we end up spending “the best part of one’s life earning money in order to enjoy a questionable liberty during the least valuable part of it.” We’d love to drop all and explore the world outside, we tell ourselves, but the time never seems right. Thus, given an unlimited amount of choices, we make none. Settling into our lives, we get so obsessed with holding on to our domestic certainties that we forget why we desired them in the first place.
- “Thus, the question of how and when to start vagabonding is not really a question at all. Vagabonding starts now. Even if the practical reality of travel is still months or years away, vagabonding begins the moment you stop making excuses, start saving money, and begin to look at maps with the narcotic tingle of possibility.” Vagabonding to me is a metaphor. Your goal may not be to vagabond, but the goal of financial freedom is the same thing.
Top 3 Takeaways:
- Read inspiring books. They are full of so much inspiration and learning.
- It doesn’t cost money to learn new things. We both checked out this book from the library.
- There is no one single path to success or to fulfillment. Learn from others, test out their methods for yourself and when you find something that resonates, try it. If it works for you, stick with it.
Show References
Book - Tools of Titans by Tim Ferris
Book - Designing Your Life: How to build a well-lived, joyful life
Article - How your salary and the way you spend money affect your happiness
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk through what entitlement is, how it can be both good and bad, how it relates to your finances, how it can help you in your career, grow confidence, and more.
What is entitlement?
Entitlement is defined as the fact of having a right to something or the belief that one is inherently deserving of privileges or special treatment. I think when most people hear the word entitlement, it comes with negative connotations. People think of entitlement as a bad thing. They picture trust-fund kids or people who don’t appreciate everything they have and take things for granted. Yes, that’s one view of entitlement. There is another angle on entitlement. If we go back to the definition itself, it’s the belief that you deserve something or have the right to something. Entitlement from this angle can be a good thing, though it is a fine and nuanced line. The good side of entitlement is that when you’ve worked hard for something, you then grow confidence in yourself and your abilities, and you should feel entitled to certain things as a result.
How does entitlement relate to your personal finances?
- Your mindset is critical to reigning in your finances.
- You need to sharpen the good side of entitlement and dull the bad side of entitlement.
- You need to work hard to make money. It doesn’t come magically to the majority of people. You need to work even harder to save your money.
- If you continuously feel entitled to things, you will not work hard enough, and you spend too much money and thus not save enough money.
- You’ll feel like a victim and, as a result, won’t feel compelled to make changes that could result in progress.
The bad side of entitlement and things to remind yourself:
- You are not entitled to have a specific type of job. If you approach life this way, you’re less likely to save and live below your means. You should prioritize an emergency fund so that if something suddenly happens to your job, you’re not stressed, and you can handle things financially.
- Entitlement can create a mindset of specific emotions and expectations that are hard to manage. If you approach life constantly feeling entitled to certain things, you won’t work as hard for them, and you may constantly be disappointed.
- Victim mentality. Growth vs. fixed mindset. Scarcity mindset.
The good side of entitlement and things to remind yourself:
- When you work hard for something, you deserve good things. And often, those good things come in the way of money. This doesn’t mean you get to spend all the money, or it defeats the purpose of you working so hard for it.
- If you’ve saved up an emergency fund or are on a journey to financial independence, then you should feel entitled to feel good about what you’ve accomplished.
- Entitlement can breed confidence, and confidence can bring happiness. Be proud of what you’ve accomplished in life.
Top 3 Takeaways:
- Understand what entitlement is, and the good and bad side of it, and how it relates to your life.
- Avoid the bad sides of entitlement. Don’t ever take things for granted, and work hard for what you want in life.
- Focus on the good side of entitlement. If you’ve worked hard for something, then feel good when you’ve achieved it. Take the confidence and pivot it into a purpose-led life.
Show References
Playing with FIRE book
Playing with FIRE Documentary
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Black Friday is the day after Thanksgiving when stores and customers lose their minds, and a lot of mindless shopping ensues. The term Black Friday refers to the idea that stores sell so much that they are in the black, which means profit. In the red means a loss. Cyber Monday is a new idea but functions in the same way. And we can’t forget that Black Friday isn’t like a whole month of “sales” and such. It’s a big deal.
Mike loves Black Friday because it’s a family event. For 15 years now, he and his sister would go out early on Friday and go shopping. Then with their spouses and then with their entire families. It’s about getting fancy Christmas coffees and Starbucks and just enjoying the decorations and perhaps some good sales. It’s never been solely about shopping.
But there are some deals to be had, and here’s how you own them.
8 Ways to Conquer Black Friday:
- Sign up for alerts at Blackfriday.com.
- Have a plan. You don’t need to be fixed entirely on this, but say, for example, “I’m going to buy a jacket.” And then enjoy picking your favorite jacket from the store you decided to shop at. Don’t just show up and say, “Oooh, nice jacket!” This is like going grocery shopping without a list. If you don’t have a plan, you’ll do a lot of mindless shopping and will buy too many things you don’t need and perhaps can’t afford.
- Go with family and friends. Not only is it more fun, but you’ll have some accountability partners and people bugging you to “get moving,” which prevents you from lingering.
- That deal you see? It’s probably not a deal. Know the tricks! Here are some common ones:
- Buying more than you otherwise would to save money. You’re in fact spending more.
- Buying now for future savings. You’re almost certainly going to forget.
- Familiarize yourself with the tactics, and for all of the purchases during the year that you don’t “need” immediately, just wait. Not only will you probably change your mind, but you’ll save on something you were going to buy anyway.
- Ignore doorbusters. It’s almost always some low-quality item designed to get you in the door and buy something else.
- Don’t buy a TV. You’ll be ok. Cheap TVs are always cheap for a reason.
- For commodity items, compare! If you want to buy a new Xbox game as Mike does, they are 100% the same and always the same price, so check Target, Walmart, Best Buy, etc., and then wherever you can save $5 or $10, that’s the place you buy!
Show References
Blackfriday.com
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start by talking about what we each enjoy about the holidays: spending time with friends and family, and that work slows down a bit. Somehow the holidays have evolved into a time where people spend so much time and money shopping, and it’s not the spirit of the holidays. We urge everyone to reconsider how they are spending their money during the holidays and offer specific tips and suggestions on saving money this holiday season. Mike talks about hygge, and Maggie reminds people to talk to their friends about family about what’s important to them during the holidays.
We talk through six ways to save money this holiday season:
- Fancy photoshoots + holiday cards – Reconsider spending hundreds of dollars on fancy staged family photos shoots and then mailing paper cards to everyone you know. Instead:
- Consider taking a casual DIY approach to holiday photos, or explore using a photographer that is just starting out and charging cheaper rates.
- Consider digital cards instead of paper cards and stamps.
- Consider making a charitable donation, in honor of your friends and family, with all of the savings from your photos and cards.
- Wrapping Paper and wrapping accessories – Reconsider spending any money on this. Instead:
- Re-use and save wrapping from other
- Use the inside of brown paper bags from the store. You can also draw on it to decorate the outside of the gift and get creative.
- Gifts – Reconsider buying tons of gifts for tons of people. Instead:
- Consider experiences over physical objects.
- Consider limiting the number of gifts you buy for your kids.
- Focus on gifts that people need (pajamas, new clothes, art supplies, etc.).
- Tell your family members you don’t want or need anything. Tell them what you’d rather have instead of physical objects.
- Consider making homemade and creative gifts using any special skills you have.
- Consider putting money into kid’s college funds instead of some gifts.
- Santa Pictures – Reconsider spending a bunch of money on Santa pictures. Instead:
- Consider finding a less expensive location or option.
- Look for a coupon or discount.
- Opt-out of this, especially if your kids are old enough and no longer believe in Santa.
- Holiday Décor – Reconsider spending a bunch of money on inside and outside décor. Instead:
- Consider how much holiday décor you need. You can enjoy decorating for the holiday and not have to spend much. A few decorative items or areas can be enough.
- Save items from previous years and re-use them.
- Buy things while on sale at the end of the previous year’s holidays.
- Holiday Activities – Reconsider spending lots of money on holiday activities. Instead:
- Consider limiting the number of activities you do. It can cost $150-200 for a family of 5 at these activities. We will do one big activity each holiday season, but we limit it.
- Make your own fun and inexpensive traditions. For example, drive around, look at other people’s holiday lights while enjoying hot cocoa in the car, or plan a holiday-themed family game night.
- Ask grandparents or other family members to gift experiences instead of physical gifts.
- Find a place to volunteer and give back.
- Give Back – As you’re reconsidering how you spend the holidays, remember that this can be a crucial time of the year to give back to others in need. In addition to doing for good others, it also feels good for you and your family. Volunteering or find other ways to give back. It can also be a great experience to teach your kids.
Top 3 Takeaways:
- Remember what the holidays are all about. Spend some time thinking about what makes the holidays special for you.
- Track your spending and make a budget to be more aware of how much you are spending during the holidays. We recommend you do this all year, but it’s especially important during the holidays.
- Realize that you don’t need to spend a lot during the holidays to be happy. Avoid keeping up with the Joneses and lifestyle inflation.
Show References
What is Hygge?
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Before we get into the specifics, let’s do a recap of how investing works and why it’s critical to financial independence.
Investing in the stock market is essentially buying pieces of companies. This is overly simplified, but you can buy an individual stock, so a share of Apple. You can buy a Mutual Fund, which is a bucket of investments managed by someone else. Or you can buy an ETF or Exchange Traded Fund, which is a piece of many individual stocks across the whole stock market, or industry, etc.
The stock market is based on buying and selling, driven by what investors believe is a specific company’s future value. When there are more buyers than sellers, the price goes up. When there are more sellers, the price goes down.
So when you buy into the stock market with companies that do well, your investment value goes up. There are always winners and losers, booms and busts, but the stock market’s history is that overall it increases by about 7% annually. And there’s this thing called compounding growth: If you make 10% on $100 in a year, that’s $10. But when you reinvest that $10, the next year, you earn 10% on $110, which is an additional $11. Over time, this is huge.
The last thing is fees: ETFs and Mutual Funds charge fees, and these can add up over time just like compounding growth. It’s a compounding fee. So look for the expense ratio detail before you buy something. The recommendations we’ll get to are both low cost.
Here are some warnings:
- Don’t try to time the market
- Don’t gamble
- Don’t put all your money into a small set of investments.
Here are the 5 easy steps:
- Apply online for a brokerage (Vanguard, Fidelity, Schwab, Trade, RobinHood)
- Deposit some cash, usually via ETF
- Pick a broad ETF like
- Vanguard Total Stock Market ETF (VTI)
- Schwab U.S. Broad Market ETF (SCHB)
- Fidelity ZERO Total Market Index Fund (FZROZ)
- When your money arrives, go to “Trade”, select “Buy” and type in the ticker symbol.
- Complete your transaction by entering how many shares. Select the order type as “Market” and submit. We recommend also selected “reinvest dividends” to achieve that compounding growth.
And if this is too much, check out Wealthfront or Betterment for an even simpler way to invest.
Top 3 Takeaways:
- Don’t overthink it. But also don’t be too risky if you’re new.
- Get started today. The earlier you get started, the better.
- Continue to learn. This episode gets you over the hump, but you still need to know what you’re doing.
Show References
Charles Schwab
Fidelity
Vanguard
Wealthfront
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start with how we’ve both absentee voted and early votes, and share a reminder for everyone to get out there and vote! We then discuss how excited Maggie is for this topic, and Maggie tells Mike how he feels about the wants vs. needs. Our views on wants vs. needs have evolved over the years. We share our combined 77+ years of wisdom on this topic.
The definition of wants and needs:
- A need is something you cannot live without. A need is a shelter, food, water, some types of medicine or medical care, clothing, and other things you truly can’t live without. And within these needs, there are levels and layers of what’s truly a need versus something you just want. For example, some shelter, food, water, and clothing level is a need, but just a very basic level. The basics are clean water, rice and beans, some veggies, clothing that covers your body and keeps you warm, and a basic enough shelter over your head. Everything beyond that is a want or a desire that you have.
- Mike explains Maslow’s hierarchy of needs.
- A want is something you desire to possess or do, but not something you need to live. There are wants within almost every category of real needs. For example, you need to eat. You want to eat fancy cheese, out at a restaurant, or take the kids out for ice cream. You need to drink clean and safe water. You want to drink bottled water, sparkling water, craft beer, or expensive wine.
The difference between wants and needs and why this matters:
- There is a fine line between wants and needs. Being able to recognize that line can be the difference between you meeting your financial goals or not.
- If you spend the time breaking down what is a want vs. a need in your life, you could have some aha moments about what you truly need and how you’re spending your money.
- We are not suggesting you constantly deprive yourself. We do suggest you appreciate and recognize the difference between wants and needs, and use that insight to influence better purchasing decisions and savings habits.
- Escalating commitment is an important concept to understand. It’s a human behavior pattern where you increasingly face negative outcomes from a decision or investment you’ve made instead of stopping and changing your course. There are so many examples of escalating commitment with purchases. It’s very similar to the idea of lifestyle inflation. You buy a big fancy house, and then you need to fill it with furniture, and then you need a housekeeper because there’s too much for you to clean. You now live in this nicer neighborhood, and all of your neighbors are driving fancy cars, so you think you need to drive a fancy car. Don’t fall prey to this!
- Remember that it’s normal to struggle with this, and we all do! Nobody’s a perfect robot who can always resist all of the marketing out there.
How to you minimize and manage your wants:
- Stop impulse purchases by instituting a waiting rule. Use the 30/30 method coined by the Minimalists, someone else’s idea, or create your own rule. The Minimalists created a 30/30 rule to help them stave off impulse purchases, and it’s to wait 30 hours for any purchase over $30, and then if it’s $100 or more, they wait 30 days. We have personally used some version of a waiting rule many times, and we often find the impulse passes with some time, and we no longer desire the item anymore. We’ve also heard of others who put things in their Amazon shopping cart if they want them, and then they only let themselves order from Amazon once a month, and by the time they go back and see all the things they have put in their cart they no longer want most of it.
- Create a purchase accountability partner, and run all new purchases by them. Make sure it’s someone who will hold you accountable versus someone who will enable you to buy tons of stuff. This could be your spouse, a good friend, or even someone you met within the personal finance community on Instagram. Find a friend, and use each other to discuss and approve each other’s purchases before they happen.
- Ask yourself some tough questions, and be honest with the answers. Is this something you will use regularly? Will this bring you joy? Do I have room to store this item? Am I willing to get rid of something else to bring this new item in? Can I truly afford it? Will it add value to my life? Am I buying this because I want it, or to impress someone else?
- Minimize how often you allow yourself to walk into a store or visit a website. Avoid getting into situations where you will be tempted to buy things. Out of sight, out of mind is a real thing.
- Walk around your house and look at all of the things you already own. Remind yourself how much stuff you already have, be grateful for it, and ask yourself if you truly need more. Learn to be content with what you already have.
- One in and one out rule. If you decide you’re going to get this new thing, agree to give up something else for it.
- Research less expensive or chapter alternatives to what you want. This could be buying something used, waiting until it’s on sale, using the public library, or borrowing it from a friend.
- Remember the purpose of marketing. Remember that it’s someone’s job out there to convince you that you need this item to be happy and to take your money in exchange for that. Sometimes that recognition itself reminds us not to fall prey to brilliant marketing. Don’t let the marketer win!
Top 3 Takeaways:
- Continually work to distinguish between your wants and your needs. It will help you make better decisions. Understand that the majority of the things you buy are likely wants and not truly needs. Recognizing this can significantly cut down on your purchases, expenses, and ultimately your cost of living.
- Use the tips mentioned above and tricks to minimize impulse purchases and situations where you’ll be tempted to buy things.
- Be grateful for all that you have, and save your money for future financial freedom or retirement.
Show References
30/30 method coined by the Minimalists
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
People involved in real estate often talk about it like it’s the most lucrative way to make a living. But real estate is like any other investment:
- All investments come with risk
- All investments take experience and lots of work
- All investments require money to start out
Mike starts by explaining his new venture: a partnership LLC with his friend Liz whom he met at AT&T. Funny story; he met Liz just like he met Maggie: discussing benefits, savings, and investments at work. They decided that East Atlanta was the right location for good rental culture, affordable housing, and the likelihood of value appreciation. So they started an LLC and began looking for houses. They established their criteria, their strategy, both short and long term, and their budgets.
After a few months of looking, Liz texts Mike one more and says, “We found it. You in?” The next day they were under contract.
How do rental properties work financially?
- You need to find a place that will actually rent. Will people want to live there?
- Unless you have the cash, you’ll need to have a down payment. Typically 20%, although there are creative ways around this, which Mike doesn’t recommend.
- Get a mortgage for the remaining 80%.
- Then your rent (your revenue) needs to cover your costs.
Misconceptions:
- Rental properties just churn off cash. They might create some positive cash flow, meaning your revenue exceeds your expenses, but it’s typically not that much. Think about it. Why would someone rent a place for $2,000 when they can own it for $1,000 a month.
- It’s passive income. These things take a lot of work. And the less work you want to do, the more you need to outsource, which eats into your cash flow.
- It’s easy. If it were easy, everyone would do it and be multi-millionaires.
Why is real estate different:
- It’s easy to borrow money. It’s called debt when it’s bad and leverage when it’s good.
- Let’s look at Mike’s real example. They bought at $265K and put down $66K, 25%. They’re renting it for $2,000 a month, or $24K a year. That’s almost 10% of the purchase price a year. But they only spent $66K, which means that the return on cash is nearly 50% a year. What other kinds of investment can do that?
- Real estate is relatively stable. If you have a place where people want to live like the heart of Atlanta, the value will almost always go up.
- It’s self-sustaining. The renter pays your expenses, pays your principal, and hopefully pays you a little extra cash.
- Over time, you can cash-out refinance and use the appreciation to leverage up and buy more.
Downsides of real estate investing:
- Requires a good bit of cash.
- Illiquid investment
- Bad renters
- House problems
- Long term play unless you’re flipping
- Must have the mental stomach for it
Top 3 Takeaways:
- Rental properties are an investment like anything else. There are no guarantees.
- The benefits of rental property as an investment comes primarily from the ability to borrow money for it.
- It requires a lot of work, so if you’re not ready for repairs, tenants, and headaches, don’t do it!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We start with a 2020 goals check-in and review. And for each goal and result, we share what they are grateful for.
What gets measured gets better and here are how we set goals using the SMART method:
- Specific
- Measureable
- Achievable
- Realistic
- Time-Bound
- Mike’s 2020 Goals:
- 15% net worth growth - Mike is currently trending at 8% growth, but still feeling good about it given the year.
- 20% annual spending reduction - Mike is trending at 28% on the year, which is impressive!
- Read 10 books - Mike has read 29 books in 2020.
- Be a better vegan - Mike scores himself a B on this goal. He found some recent motivation in Rich Roll’s book Finding Ultra.
- Be a more mindful minimalist - Mike scores himself an A- on this goal.
- Maggie’s 2020 Goals:
- 15% net worth growth - Maggie is beating this goal at around 20% net worth growth so far.
- Deferring 75% of my income not tap into savings - Maggie is on track!
- Spend more quality and focused time with my kids and husband. - Maggie scores herself a B on this goal.
- Read 11 books - Maggie has read 37.5 books in 2020.
- Mostly minimal life - Write a blog post once a week, or 52 a year. - Maggie scores herself a D/F on this goal and has essentially given up on it to be pragmatic and focus on other goals.
- Meditating - Maggie scores herself a C on this goal.
Show References
Rich Roll’s website (and podcast)
Rich Roll’s Book: Finding Ultra: Rejecting Middle Age, Becoming One of the World's Fittest Men, and Discovering Myself
Vitamix Blenders
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start off telling Cait how excited and special we feel to have received an advance copy of her new book. Cait shares a bit about herself, and then we dive into some discussion and reflections on her new book.
Here are the main topics we dig into with Cait:
- How Cait became a financial blogger
- How Cait paid off $30K+ in debt
- Starts, stops, and shame along the way
- Happiness vs. Contentment
- Rambling vs. Adding Context
- Taking things step by step
- Giving yourself permission to try things vs. always requiring a long-term commitment
- Adventure and accountability partners
- Judgement
- Cait’s idea to organize the book around the hiking journey and hiking themes
- Cait’s next adventure
Our favorite takeaways and nuggets from our discussion with Cait:
- Cait has had a lot of starts and stops, some shame, and a lot of feelings. This is normal and OK! She used blogging as a tool, and looking back she wishes she had been kinder to herself and not deprived herself so much.
- Cait says in her book that she doesn’t think happiness is a great way to measure our lives. She instead measures her life through contentment. She thinks happiness could be an unrealistic goal in life, vs. seeking to be content feels right. She wants to make sure that her needs and wants are being met, and that she’s content with her choices.
- Cait 100% validates that Maggie doesn’t ramble, but she instead adds a lot of context.
- Giving yourself permission to just try something. Don’t put too much pressure on yourself, and just be OK experimenting and trying things. And combine that with taking things step by step. Just take one initial step, then take another.
- The importance of accountability or adventure partners. And the importance of picking an accountability partner who knows what your best interests are and is going to reflect that back to you. Someone who will help you dig deeper rather than enable things that may not be the best path for you. You need the friend who’s going to tell you what you need to hear vs. what you want to hear. A friend who would say, “I am not judging you, I am reflecting back to you what you’ve told me is important to you.”
- When others are judging you, it’s all about them and has nothing to do with you.
Show References
- Book: Adventures in Opting-Out: A Field Guide to Leading an Intentional Life
- Book: The Year of Less: How I Stopped Shopping, Gave Away My Belongings, and Discovered Life is Worth More Than Anything You Can Buy in a Store
- Cait Flanders website
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Chelsea’s love of Aldi inspired her to start an Instagram fan account where she posts about her everyday shopping at Aldi as well as Aldi’s famous special buys. Though she was first introduced to Aldi as a kid when her parents shopped there, she initially didn’t shop there as an adult. She then got reacquainted with it a few years back, and it didn’t take long for her to get hooked. And only a matter of visits, and seeing the cost of a cart full of groceries, before her husband was on board as well.
Aldi sometimes gets a bad rap in the US. In Europe, where Aldi began, it’s just a nice grocery store chain. Europe doesn’t have airplane hanger size grocery stores, so everything is small. But in the US, it feels different and to many people, different is scary.
We give Chelsea some rapid fire Aldi Q&A. Listen to the podcast to hear her answers:
- What is the best thing you’ve ever bought at Aldi? Weirdest thing?
- How many different Aldis have you been to?
- How many different countries have you visited an Aldi in? Or what country would you want to visit an Aldi in?
- Do you ever shop at other grocery stores?
- Have you ever been to a Lidl and does it make you question Aldi?
Most importantly, we finish with the impact Aldi has had on our lives personally and financially,
Our 5 Ways Shopping at Aldi Will Change Your Life:
- A smaller store makes shopping easier and faster.
- A smaller store makes you a grocery minimalist and you’ll be happier because of it.
- Recurring international speciality items makes it easy to explore new cuisine.
- The Special Buys can save you a ton on the essentials items from gardening equipment to pool toys to clothes to home decor. But don’t just buy this stuff unless it’s items you need!!
- The prices are so. Damn. Low.
Show References
Aldi for President on Instagram
Friends on FIRE episode #24 - Save on Groceries
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
For most companies, the October/November timeframe is when employees are able to select their benefit options for the next year. It can be a complicated and cumbersome process, but the most frustrating part is usually evaluating the medical plans. They are by design complicated.
To start, you should listen to episode #10 where we discuss car insurance. It’s all pretty similar.
Some key facts to keep in mind about insurance:
- Insurance companies make money by paying out less in benefits than they take in fees. They are a for profit business. They’re not your friend or your good neighbor.
- Over your life, this means that you’ll pay more than you’ll get in benefits. Probably a ton more!
- You need to identify where you are most likely to incur a loss and choose insurance wisely for that situation.
- Protect yourself against the catastrophic, not the ordinary expenses.
How Insurance Loss Calculations Work
- Let’s 1% of customers are likely to have a heart attack.
- And it costs $50K for bypass surgery.
- The insurance company needs $500 needed per person to cover loss expenses.
- This is generally how your premiums for any insurance are structured.
Insurance has 4 primary mechanisms:
- Premium - Per-period fee to Insurance Company
- Deductible - The minimum costs the customer must make before coinsurance benefits start
- Coinsurance - The % of expenses covered after meeting the deductible
- Out-of-Pocket Maximum - The cost ceiling a customer won’t pay more than
How do you choose what’s right for you?
- Insurance Providers need to cover roughly the same cost from every customer.
- Premiums, Deductibles and Expected Covered Expenses combine to equal roughly the same cost based on statistical averages.
- Providers try to accurately forecast paying slightly less in benefits than they take in premiums.
- A higher premium means a lower deductible. Whereas a lower premium means a higher deductible.
- There’s no easy answer because all plans have different details which make rules of thumb hard to provide. However, if you don’t expect to have a lot of medical expenses, the lowest cost plans are the best. If you do expect to have recurring expenses for chronic issues for example, you might be better off with a higher premium, lower deductible plan. But you need to read the details.
- Spend time forecasting your specific needs. Call you doctors to ask what things cost with and without insurance, think about best-case vs. worst-case and forecast it out in different plans, and make sure the doctors you care about are covered.
- Check which providers work best for your preferred network of doctors and hospitals.
- Check which plans cover specific needs the best for known issues you might have.
- Remember that only a high deductible plan is eligible for a Health Savings Account. Others qualify for a Flexible Spending account only. For more info, check out episode 59.
- Consider your family situation and how to split things up. For example: Kids usually have one fee no matter how many you have, so try to get all of the kids in your household on the same plan, even if you have a blended family.
Top 3 Takeaways:
- Treat all your insurance the same by selecting only what you need based on your lifestyle and likelihood for events. Protect yourself against the catastrophes, not the ordinary and small expenses.
- In most cases if you’re relatively healthy, a high deductible, low premium plan will be the most cost effective solution for you.
- Do your research though. There are nuances to every plan which could make or break a decision for you. Read the fine print!
Show References
Friends on FIRE episode #10 - Car insurance is just as bad
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
When Joel was 22 he moved from Australia to Hawaii and met his soon-to-be wife, and then they eventually settled in LA. Joel worked incredibly hard in sales for many years and was quite successful, and then in 2018 he decided to take a sabbatical and has since discovered a lot about himself and what makes him happy. Joel further proves our theory that talking about money can improve your life and the life of those around you.
We discuss a number of topics with Joel:
- Joel explains how 5am Joel was hatched at a party one night talking with a friend. It started as a 30-day experiment, and turned into a new way of life.
- He explains the many benefits that getting up early has brought into his life, including increased productivity. He believes the pros outweigh the cons. The main benefits include:
- Productivity - he just got more stuff done. Instead of playing catch-up at the end of the day, he was doing preparation and planning in the AM and he helped me.
- He started crushing it at work.
- He spent more time learning and learned how to do a ton of new things.
- He thought proactively about things he could do to help his wife.
- His health improved as he had more time to work out. Even just 20 minutes in the morning would make him feel good all day long.
- As Maggie and Joel debate the merits of getting up early and Maggie considers changing her own habits, Joel equates getting up early to paying yourself first. Everyone is given 24 hours in the day, and they often don’t pay themselves first and do the most important things first. Getting up early is a good way to pay yourself first.
- In the years since Joel started getting up at 5am, he had an epiphany of why he gets up in the morning. He used to get up just for work. Now he gets up for himself, for his wife, and for many personal reasons that are for him and not for anything else.
- His parents taught him a lot of great lessons about money. His mom taught him how to budget, save, and work hard. His parents taught him how to be an independent self-sufficient human being so all credit to them.
- The Bigger Pockets Money podcast is the first time he heard the term FIRE. And as they sat down and reviewed their finances they realized they were already half-way there just based on how they had been living.
- Joel’s biggest financial pillars and focus include: (1) Believing you can and knowing it’s within your power to change things. (2) Track your spending. If you don’t track where your money is going, you don’t know what your future looks like. To build a good future you need to know where your money goes. (3) Earn more income when you can to keep growing your net worth.
- Joel now focuses more on the lifestyle along the way. He used to just focus on the numbers, and then realized it’s not all about the numbers. He started to think, why can’t I have some of those benefits now. His focus right now is more around the lifestyle vs the numbers.
- Joel is also figuring out how to be happy along the way. His biggest focus right now is happiness no matter how much money he has. He wants to live his happiest and best life.
- He once thought “when I hit financial independence, I can do all these things” and then he realized he can do all of those things right now. He realized that the benefits of financial independence can be enjoyed along the way.
- He is ok extending his financial independence date because he’s finding more happiness in a slower journey.
- He encourages people to focus on what makes you happy now and what fills your life with joy, and focus on building that now vs later.
- Everyone’s path is different. Doing what everyone else is doing led him off path a couple times in life. Figuring out for himself is a better way to go.
- Getting married and talking about money a lot more catapulted their financial journey too. They realized they could be different and not live like everyone else. His wife is his accountability partner.
- He started this habit of writing each morning when he got up at 5am, something positive and motivating. His email started to spread and people asked to receive it. He writes a little bit about personal finance in that blog, and he once got a reply from “J Money” who subscribed to his list. They reached out to him to ask if he wants to write for the blog budgets are sexy, and that is how that opportunity came about.
- Joel quit his job in 2018 to take a sabbatical. He admitted it’s tempting to go back for the money. He admits the biggest thing he was scared of in life was having no money. To confront his fears he quit his job. He just needed to step away and remove work and income from the equation.
- Joel says the epiphanies and life lessons he’s learned since taking time off his previously demanding job has been life-changing.
- Joel talks about how it’s hard work to build wealth. Life is hard work. Life itself is work. He used to think work was the enemy in life, and how he realizes it’s a tool. Mindset shift that work is on your side. The second you think you’re going to stop working, you’re taking a lazy way out. No matter what it will always involve hard work. Money doesn’t come easy, it’s a lot of hard work.
- The more effort you put into life, the more you’re going to get from life.
- People can sometimes have unrealistic expectations about work and retiring early. Your financial journey has nothing to do with others, it has to do with what you were dealt with and you have to work from that.
Our top 3 takeaways for this episode:
- The importance of your mindset and believing that a better financial path is possible. And tracking your spending to get there!
- Enjoy the journey. Focus on your lifestyle and happiness along the way. Don’t just focus on the numbers.
- Life is hard work, no matter what path you choose. And money doesn’t come easy, it’s the product of hard work.
Show References
5am Joel
Budgets are Sexy
The Bigger Pockets Money podcast
The Minimalists
The Fioneers
Rich + Regular
Book - The Bag Lady Papers - The priceless experience of losing it all
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We both focus more on tracking our expenses vs. budgeting. We thrive on spending as little as we can, though Maggie does splurge more than Mike does and Maggie believes in spending top dollar in some categories of her life. Although we focus on tracking expenses, we know a lot of people who really focus on setting and keeping to a budget.
If you’re budgeting, then you’re tracking to some degree as you need to do that to know if you’re meeting your set budget. But you could decide to only track, and not set a specific budget goal.
Budgeting:
- Setting a dollar limit for categories of expenses you can spend in a time period. Typically this is based on your income, but can also be for one-off or special purchases.
- Pros:
- Helps develop discipline by creating a goal.
- Can help alleviate the guilt of spending money if you give yourself permission to spend up to that budget.
- Cons:
- You’ll always spend right up to or over your budget, even if you don’t really need something.
- While helping create discipline to do so later, it doesn’t by itself drive better performance over time.
- Best to use this method if...
- You don’t have a lot of discipline, and you know you need and do better with clear boundaries.
- You’re on a fixed income.
- Systems: Dave Ramsey envelope, YNAB, Mint app, personal capital, etc.
Tracking Expenses:
- Cataloging every expense you have, reviewing it regularly and changing your spending habits because of it.
- Pros:
- Creates a tool for continuous improvement.
- Creates a great record of expenses for research or comparisons
- Allows you to better forecast your income needs in the future, which is an absolute requirement if you’re interested in FIRE.
- Cons:
- Sometimes makes it hard to splurge if you’re constantly measuring yourself against previous months or years.
- Time consuming
- Tedious
- Best to use this method if...
- Budgeting hasn’t worked for you in the past.
- You can’t explain where your money is going.
- You have aggressive financial goals.
- You’ve already established some level of discipline.
- Systems: Manual spreadsheet like we do, Mint app, personal capital, etc.
Top 3 Takeaways:
- These are two different ends of systems and approaches, and they each have their benefits. Think of them as a progression. Move from budgeting to tracking as you establish discipline.
- Budgeting is easy, but the results can be mixed. Tracking is hard, but the potential is huge.
- Whatever you decide, you need to understand where your money is going. Until you establish a method to improve your spending, chances are it will continue to get worse because the economy is set up to get you to spend more and more.
--
Show References
Personal Capital
Mint
YNAB - You need a budget
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Though this topic might not feel exciting to some, this is the sort of stuff you need to understand. Medical and dependent care expenses add up, and these are all vehicles and tools to help improve your financial situation. So if they are available to you, then learn about them and use them!
FSAs - Flexible Spending Accounts
- What is an FSA?
- A special account you put money into that you use to pay for qualified out-of-pocket health care costs. E.g. co-pays, medicine, prescriptions, etc.
- Why is an FSA important?
- It’s tax free. This means you'll save an amount equal to the taxes you would have paid on the money you set aside.
- What else should you know about FSAs?
- You choose the amount you want to put into an FSA during annual benefits enrollment and then it comes out of your paycheck on a pro-rated basis throughout the year. You cannot change the amount unless there’s a qualified event that allows you to change your overall benefits (e.g. a divorce, birth of new child, a global pandemic, etc.).
- The money you set aside has to be spent within the calendar year, or very close to it. Read the fine print of your specific FSA. There is usually a couple month grace period for filings into the next calendar year, but it’s for expenses during the calendar year you saved it in.
- If you don’t use/get funds reimbursed buy the deadline noted, the money gets forfeited back to your company.
- There are maximum limits to how much you can put into an FSA, set by the federal government. For 2020, it’s $2,650 per year per employer. You and your spouse could both max it out if you’re expecting a big year of medical expenses
- How do I decide how much money to put into an FSA?
- Do your best job to estimate what your family's medical expenses will be in a future year, based on what they’ve been in the past and what you anticipate happening. You can never plan perfectly for this. If your family has really low medical expenses, consider a high-deductible plan and then put into an HSA which doesn’t require you to think about the amount.
- Plan ahead, so if you know your child will need braces in 2021 then put a big amount into your FSA. If a big medical expense pops up mid-year, and it can wait until the following year then hold off on it and put money into an FSA to pay for it. Plenty of medical expenses can wait. But also, plenty can’t!
- Call your doctors and ask what something will cost so you know. Forecast things out!
- When you leave your company, what happens to the FSA?
- Your FSA is tied to your job.
- Any money left unused in your FSA when you leave a job goes back to your employer. This means you need to use it or lose it during any notice period you have of leaving a job, whether it’s your choice or not to leave.
HSAs - Health Saving Accounts
- What is an HSA?
- A Health Savings Account is a type of savings account that lets you set aside pre-tax dollars for qualified medical expenses.
- Why is an HSA important?
- It’s a great tax-free savings vehicle that allows you to further diversity your portfolio.
- What else should I know about HSAs?
- It’s only available if you’re on a high-deductible medical plan. We’ll do an episode soon on how to compare and think about different medical plan options for 2020, but HSAs are a meaningful reason to go high-deductible.
- You choose the amount you want to put into an HSA during annual benefits enrollment and then it comes out of your paycheck on a pro-rated basis throughout the year. You cannot change the amount unless there’s a qualified event that allows you to change your overall benefits.
- There are maximum limits to how much you can put into an HSA, set by the federal government. For 2020, it’s $3,550 for a single-person HSA or $7100 for a family HSA.
- You do NOT have to spend the money you put into an HSA in that calendar year. You can if you need it, but you can also use it as a “savings account.” MJT Comment - I now have 10K in an HSA and I can use it in 4 years if I have some massive ER bill for me or one of my kids.
- You can spend your HSA funds to pay for qualified medical expenses for any of your dependents.
- You can’t double-dip on HSAs and FSAs on the same expenses. You cannot submit something for reimbursement to an FSA and then also claim it to an HSA.
- You generally can’t use HSAs to pay medical premiums, but it can be used for just about any other medical expenses (copayment, deductible expenses, coinsurance, etc).
- How do I decide how much money to put into an HSA?
- Max it out! This is like your 401K, put as much into it as you possibly can, especially earlier on so it can grow more, tax-free, over time.
- When you’re 65 you can withdraw it for any reason without penalty, only paying taxes on the earnings.
- When you leave a company what happens?
- You can keep it forever and use it whenever!
- You need to proactively make sure your HSA funds are invested! Otherwise they will default to sitting as cash, which is a huge missed opportunity.
- Make sure you invest it! Don’t just leave it sitting as cash.
- My HSA requires you leave $1,000 sitting in cash, but the rest can be invested and then sold at any time to turn back into cash just like any investment.
- Similar rules to your other investments.
-
1 - Choose something! Don’t just leave it as cash
-
2 - Read the fine print! For example, my company offers a “MyAdvisor” tool to help you make investment suggestions, but it charges a % monthly.
-
DCAs or DCFSAs
- What is a Dependent Care Flexible Spending Account?
- A DCFSA or DCA is a pre-tax benefit account used to pay for eligible dependent care services. Dependent care can include pre-school, before or after school care programs, summer camps, child or adult daycare.
- Why is a DCA or DCFSA important?
- It’s a powerful tax-free savings vehicle that allows you to save pre-tax for what can be very large expenses for your children, aging parents, or other dependent expenses.
- What else should I know about DCA or DCFSA?
- It’s not just for children’s expenses. It could also be for aging parents who need care while you’re at work.
- You choose the amount you want to put into a DCFSA during annual benefits enrollment and then it comes out of your paycheck on a pro-rated basis throughout the year. You cannot change the amount unless there’s a qualified event that allows you to change your overall benefits.
- There are maximum limits to how much you can put into an DCFSA, set by the federal government and then there may also be limits set by your company on top of that. Your benefits enrollment system will tell you. The federal government limits in 2020 are $2500 per year if you file your tax return as married filing separately and $5,000 for joint tax returns.
- You and your spouse can have your own DCAs, but your combined annual contributions at a household level cannot go beyond the federal limits.
- A unique rule for DCAs that I just learned about is that your maximum annual contribution cannot exceed the lesser of you or your spouse’s salary. So if you’re single, you cannot contribute more than you earn in a tax year. But if you’re married, you cannot contribute more than you or your spouse earn. So if you earn $50K or $500K, but your spouse earns $1,000 a year from a small job, then your maximum DCA contribution cannot exceed $1,000. This is to avoid someone who has a stay-at-home spouse also filing for government benefits (tax free earnings for dependent care) when one of the people is arguably able to provide that care. Be strategic about the worth of any odd jobs a spouse may have that limits you ability to save tax-free into a DCA.
- You have to spend or claim your DCA funds within the year.
- You can spend your DCA funds to pay for any qualified expenses for any of your dependents.
- How do I decide how much money to put into a DCA?
- Plan ahead and estimate out your expenses. A lot of companies considered this global pandemic a change in circumstance and allowed people to adjust their DCA contributions since people’s child care expenses suddenly drastically changed.
- 2.
- When you leave a company what happens to your DCA?
- Your FSA is tied to your job.
- Any money left unused in your FSA when you leave a job goes back to your employer. This means you need to use it or lose it during any notice period you have of leaving a job, whether it’s your choice or not to leave. The goods news is the funds are pro-rated coming out of your paycheck so it’s likely you have incurred those expenses and can file for reimbursement before you leave.
Top 3 Takeaways:
- You should always take advantage of these accounts when available.
- The benefit of these accounts is the tax savings, and though it may not feel like immediate money in your hands, each tool has huge savings benefits that will help you save money and grow your net worth.
- Be thoughtful and plan ahead to know your expenses and how to best utilize these accounts.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk about money, but it’s not really about money. It’s about being happy. Living a fulfilling life. Money just helps you get there. Either to reach your full potential or get you to fulfillment faster.
- The reason we do all this is, this whole FIRE thing, as we’ve mentioned, is not to do nothing, but to do everything we’re passionate about.
- Maggie’s passions: Helping people, minimalism, organizing things, buddhism, creating beautiful PPT decks, explaining complicated things more easily, reading, listening to podcasts, watching TV, being active and running, travel, this podcast!
- Maggie’s thoughts on passions: Do you want to live to work, or work to live? She used to live to work. And with age, kids, etc. she started wanting to work to live. And this doesn't mean you can’t enjoy your job. It just means you recognize the role your job plays in your life.
- Mike’s Passions: Travel, videography, Building/creating things, finance and helping people w/finance. And doing this! I wrote a book about it and am doing a podcast about it, because I am so damn passionate!
- Mike’s thoughts on passions: The first part of his book is called “Time to Start Over with Money” and the idea is that in order to be better, grow faster and achieve financial independence, it’s not about the money. It’s about creating a purpose for money. And find your passions.
- And we’re both passionate about being parents and creating rewarding lives for our families. Does’t need to be super lofty like saving the world.
- Discovering your passions gives you a reason to save and the motivation to make difficult trade-offs seem worth it. So find your passions! It is the most important thing you can do to create a rewarding life.
- The people that find a passion as a child and find fulfillment till their death are rare. Most people either don’t find it until later in life or don’t find it to the same degree. So don’t compare yourself to others.
- If you don’t have something now, make it your mission to find it! Take classes, visit new places, create the opportunity to find a passion you can keep your whole life.
- Figure out what really makes you happy. What creates energy for you vs. drains energy. This mind-mapping exercise Maggie once did from Design Your Life.
Once you narrow in on your passions, you need to decide the role your passions play in your life. Does it need to be how you generate income? Maybe not.
- Do you want an activity you can do while also working? If so, this is OK.. your job might just be what allows you the $ to live and pursue other passions outside of your income generating job. Perhaps you’re a teacher so you can have extended travel over the summers. This is OK!
- Do you want to replace just some of your income with a new passion job?
- Do you want to replace all your income with a new passion job?
The first step applies to all of these: Pilot your passion. Test it out! See if dipping your toe into this future delivers the results you want. Next:
- For the winery idea, visit a bunch. Talk to the owners. Interview them. People love to talk about their work, especially if they are also following their passions.
- Join a professional group or community. It builds your network and also exposes you to more of the world.
- Volunteer, work part time, take a month off and work somewhere.
- Start a podcast and see if you like it!
Now let’s talk about finances in the case where you want to quit your job and pursue this passion full time:
- If you want to replace all your income, you’ll need a solid business plan and an acceptance of the pressure that will come from making a business work.
- If you want to replace some of your income, this is where it gets easier. If you have savings, can live off dividends and passive income or have a working spouse, then you can still pursue a viable business, but without the same pressure. And this is what we recommend:
- Save like crazy
- Develop some passive income streams or get alignment on your partner continuing to work
- Spend a year piloting and learning
- When you have a viable plan and the financial ability to live off little to no income from it, do it!
Top 3 Takeaways
- A rewarding life requires passions. It could be one passion, it could be 10 passions.
- Passions give you a reason to be better with money because you can live out your passions quicker or more fully. Your passions can be your why.
- Save your money, invest it and create an environment where you don’t need to win or lose at starting a business. Keep it a passion. And if you can make it a commercial success, that’s amazing.
--
Show References
Book - Designing Your Life: How to build a well-lived, joyful life
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
After a bit of discussion on what Mike and Maggie both think about self-care, we dig into how self-care doesn’t need to cost any money. Self-care that costs tons of money is often not actually beneficial, but instead a distraction from what’s really happening and an avoidance of what you really need.
Ideas for ways to practice self-care for free or on a budget:
- Exercise or get outside.
- Go for a walk outside
- Go for a hike - explore a new nearby spot to hike
- Eat Healthy(ier).
- Eat some vegetables
- Put good real food into your body
- Drink lots of water
- Be a kid with your kids, or someone else’s kids, or some adults!
- Run through a sprinklr when it’s hot outside
- Chase your kids around with water guns or water balloons
- Play in the pool with your kids. Like really play with them!
- Take a hot bath. Or a cold shower. Whatever you’re into.
- Write down things you’re grateful for.
- Read a book, alone, somewhere quiet.
- Turn off social media and/or your phone altogether.
- Meditate.
- Sit alone quietly enjoying a cup of tea and reading your favorite blog, or listening to your favorite podcast.
- Massage - Get your partner to give you a massage, and return the favor.
- Intimate time with your partner - from cuddling to anything else!
- Curl up on the couch and watch a good romcom movie, or scifi movie, or whatever you’re into.The entire LOTR trilogy. For those like Maggie, LOTR stands for Lord of the Rings.
- Dance like nobody's watching. Or watch tik-tok for 10 minutes, but set a timer! Too long on social-media and it’s not self-care.
- Sleep in. Plan ahead to make it happen. Leave a note and activity for your kids. Tell them the night before what the expectations are and that they get XYZ if they entertain themselves until 10AM.
Top 3 Takeaways:
- Prioritize self-care. Figure out what matters to you, and make time for it!
- Realize good self-care doesn’t need to cost money.
- Commit to spend more time on self-care right now. Block some time on your calendar, make plans with your partner to watch the kids, or whatever it takes to make sure you have some self-care time coming up soon.
--
Show References
My Self Reliance YouTube Channel
Netflix and Chill definition @ urban dictionary
--
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We dive deep into the mechanics of mortgages and explain some of the misconceptions about them, while also promoting the benefits of paying down that debt.
- How mortgages work.
- You put some money down to demonstrate skin in the game and lower risk for a bank.
- Bank lends you money over 15, 20 or 30 years
- You pay back some of the equity, called principal payment, and then interest.
- You have a schedule of payments; first payment is high interest, low principal. Over time that flips.
- $300,000 house, $60,000 down, so a $240,000 mortgage. At 4% interest, your payment will be $1,181. At first interest is $828 of that, principal is the rest. But interest decreases as your balance decreases. So more is just “savings” as principal.
- Why mortgages are good
- It’s a lifestyle choice. It allows you to live in the place you want and provide the life you want for you and your family.
- It’s yours. You make decisions, you decorate it and modify to make yourself happy.
- It can appreciate in value.
- Why mortgages are bad
- You pay interest. There’s a cost!
- But what about tax deductions? Only above the standard deduction of $24,800, otherwise the government is just giving it to you anyway. Don’t get lulled into the belief that because you might be able to get a deduction benefit, that interest is a good thing.
- They don’t go away. For 30 years you are on the hook for that payment.
- Owning a house, not the mortgage, requires you to pay a ton in taxes, fees, repairs, etc. It’s expensive.
- Why paying it off is a good idea.
- Back to Mike’s original challenge. He thinks it’s a good financial move in many cases. The argument against is that you can “make more in the market.” If you have $200,000 lying around, perhaps you could invest and make 10% vs. your 4% mortgage. You can also lose 10% or 50%. Or maybe you have $200 more a month. Could you practically invest that monthly amount and do better?
- But it’s not just about what you could do in the market. It’s about diversifying your portfolio. Having money in the market, at different levels of risk and then having some in real estate is diversification.
- The math: risk free, guaranteed savings of the interest rate.
- Why paying it off is a bad idea.
- You are over-indexed in real estate.
- But most people who get to the point where they can pay off a mortgage will have a reasonable amount of their net worth in the market.
Our top 3 takeaways for this episode:
- Diversify your portfolio by paying off your mortgage
- Lower your fixed expenses and make it easier if you lose your job or want to be FI
- Houses are lifestyle choices, not investments, so always look to lower your costs
--
Show References
Mortgage Payoff Calculator on Etsy for $3
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mike talks about when he first started credit card churning 10 years ago and how he too felt a bit scared and confused. We talk about “Churning”, which means you sign up and cancel, sign up and cancel and just churn through as many as you can. And if you're nervous about it, don’t be. Millions of people play this game. I’ve played it for a decade, earning millions of miles and my credit score is near perfect. It works.
We cover a whole ton of info on how the game works:
- We recap credit scores:
- 35% payment history
- 30% amount owed, AKA credit utilization
- 15% length of credit
- 10% new credit
- 10% credit mix
- Having cards and paying them regularly helps your score.
- There are many card types:
- Hotels, Airlines, Cash Back, Retailers, etc.
- Banks like Chase, Citi, US Bank
- Card providers like Visa, Mastercard, American Express
- Business Cards, Consumer Cards
- The variations of these create so many opportunities for sign up bonuses
- You apply for a card, meet the minimum requirements like spend $3,000 in the first 3 months and then the points are deposited into your account.
- The value comes from bonuses, not from normal spend. So if you want to play the game, you need to churn. But don’t spend money you don’t need to and always pay off the cards each month.
- Canceling a card hurts your score because it lowers your available credit, raising your credit utilization. But it doesn’t hurt a lot if you have different types of credit and a good history.
- Canceling a card might get you “flagged” by a card provider, but I’ve never been denied for a card, which makes me think that if it’s a factor, it’s a small factor in them approving you.
- In regards to monthly fees, in many cases, you can call in right before, call them up, say you want to cancel and they’ll waive it or give you a retention offer.
- Mike typically keeps a card for a year, canceling before the fee or just over a year if there’s no fee. And Mike personally have never had an issue.
- Now keep in mind that many cards now will only let you earn a bonus once per lifetime, so you can’t get the same 100,000 miles from the Delta Gold Amex card or whatever. But there’s a Delta Platinum Amex and a Delta Gold Business and a Delta Platinum Business. There are so many opportunities. You won’t run out. Check out thepointsguy.com for a great list of cards.
- Don’t do too many at a time. Banks won’t approve you with too many open lines. Also, it’s hard to manage and you’ll end up missing a bonus. If you’re starting out, do 2-3 a year. Ramp up to maybe 5 or 6 when you’re good at the game.
- Lastly, keep track of your points with Awardwallet.com. Mike’s been using it forever. It shows your current balances, links to your accounts and notifies you when your balances are set to expire. We’ll include a sign-up link. Mike’s used it for 10 years at least.
Our top 3 takeaways for this episode:
- Don’t be afraid of credit card churning. Pay your bills on time and you’ll be fine. If you want points and miles, you need to churn cards. The bonuses are what makes the effort worth it. You will likely only be eligible for a card’s bonus once, but you can find a handful of cards for every reward program, so work your way through the portfolio.
- Use a site like awardwallet or manual tracking to keep track of what benefits you have so you’re careful about meeting rewards bonus deadlines, using things before they expire, etc.
- Know what you’re getting on redemption value to make sure you’re getting the most for the points or miles you have.
Show References
Awardwallet
The Points Guy Credit Cards
Disney+
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This is one of those episodes where you’ll just have to listen to get the details. Enjoy!
We start off with sharing a few voicemails and comments from our #52 Episode - Maggie wants a new car and Mike stages an intervention. We had no idea this would be one of our most popular episodes so far. It’s very interesting to hear everyone’s different perspectives on cars, but more importantly how they rationalize and consider different purchases.
Then we dive into an enlightening discussion with Angela Buttimer, and cover many topics:
- The Zone of the unknown that we are all in right now. We don’t know how long this is going to go on, how it’s going to play out. Even if people have done well financially so far, we don’t know what the future holds. The reality is there are high levels of stress and anxiety around finances for many people.
- Most people come to talk to her initially apprehensive and don’t want to have these discussions on money. This is often because their relationship or finances are in trouble. Most people aren’t happily coming in to talk about money and their relationship with money.
- She suggests people go back to their very first memories about money. Search your memory banks. Can often go back that far to how you’re reacting about money in the present. Think about the highs and lows you’ve had around money. Many thoughts are subconscious and can really impact how you feel about money now.
- People will talk about sex, politics, and religion way before they want to talk about money.
- Research points to the majority of people (over 70%) have negative emotional states around money. A lot of anxiety, fear,confusion, stress, and depression over money.
- There can be a sense of defeat and helplessness around money for many. This can manifest itself into behaviors like putting your head in the sand and avoiding dealing with your money issues. People often don’t know their financial numbers as they don’t want to face it and deal with it. This is why we often talk about the importance of tracking your expenses and net worth.
- People should know their numbers so they know what they need and what they desire.
- People have to make their own shifts, and she just presents the information to them.
- She often helps people connect the dots to their psychology history and how they grew up with money.
- Angela weighs in on Maggie’s desire to buy a new car and a specific type of car. Angela describes herself as a “car gal” and agrees that she wants what she wants in a car, and is supportive of Maggie’s desire to own a specific type of car. As human beings, we’re not just brains, we have our heart too and that plays into our decisions.
- We are connected to the brands that we buy from a brain, gut, and heart perspective. The question is often, can you afford the indulgence that your heart wants to make?
- Angela discusses how different relationship dynamics can impact financial decisions. She shares how so much goes back to our relationship with our parents, how they modeled their own relationship with money, and how our parents engaged us with money.
- One of the factors we know from research is that people who are influenceable tend to stay in a relationship, and that goes for money and anything else. Can I be influenced by my partners needs, wants, desires?
- Some people are super rigid with money, and some super indulgent. Sometimes people make a commitment to partnership with no discussions around money.
- Lifestyle consequences of financial decisions - Having to go back to work, having to reduce care for their elderly parents or not send their kids to the college they want to go to, etc.
- Angela shares her own personal beliefs about money. She sees money as her connection to freedom and choices, and thriving and dignity. She is very money positive. She grew up in a family of entrepreneurs where they had very lean times and very fat times, and she learned to surf those waves with a lot of ease and grace. She looks at money as a tool, and as an energy exchange. When she spends money she says arigato, as a way of blessing what’s coming in and what’s coming out.
- Angela’s top advice for people is that she encourages people to not put their self-care on the back burner right now. It’s more important now than ever to invest in your own well-being. Make yourself a priority.
- Angela shared her feelings on social media. She sees the beauty in connecting with fabulous people all over the globe. She also limits it. Research shows if you spend more than 20 minutes on social media the depression starts to kick in. Take breaks with it. She often does not access social media on the weekends.
Show References
Angela’s Website
Angela on Facebook, Twitter and Instagram
Angela’s TEDx Talk “Defusing Stress with Mindful Mojo”
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss and answer the following questions submitted by college students:
- How do I start investing in stocks?
- Which credit card do I pick and what are some tips on how to manage it (first credit card)?
- Explain taxes to me
- Is a Roth IRA something I need to look into?
- What are your tips for how to start saving early?
Show References
Nerd Wallet credit card comparison website
Friends on FIRE episode #23 - Happiness, Sex, + Money
Friends on FIRE episode #35 - 10 FIRE Extinguishers + how to avoid them
Friends on FIRE episode #39 - Adulting + Money
Friends on FIRE episode #51 - 10 Ways for College Students to Save Money
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Our top 10 tips for saving money while in college:
- Control your housing expenses
- Get roommates!
- It’s fun to meet new people, or live with your friends
- Can decrease costs for shared expenses
- Choose housing wisely
- Buy used textbooks
- A lot of school bookstores have the option to buy used books instead of new.
- Amazon also has options to buy books used
- Buy an older version of the book
- Saving money on food
- Think/plan ahead – make a list before you go to the store
- Think about where you shop - e.g. explore lower-priced stores like Aldi or Lidl
- Take advantage of free food on campus
- Learn how to cook, even just easy stuff. PETA college cookbook. Use pinterest for recipe ideas.
- Purchase your own coffeemaker
- Save money by not having to purchase coffee every morning
- Buy a reusable coffee mug
- Student discounts!
- Tons of places have student discounts, from restaurants to technology products
- Find them and use them!
- Stay on your parents’ insurance
- Take care of yourself - minimize health expenses
- Brush + floss your teeth.
- Go to student university facilities
- Make money where you can - e.g. Sell items you don’t need
- Sell old clothes (Poshmark, eBay, Facebook Marketplace, Plato’s closet)
- Side Hustles
- Tutor for subjects or standardized tests
- Limit spending on alcohol
- Drink and eat before you go out
- Order the drink specials
- Take advantage of campus amenities!
- Your fees include gym access. Use the school gym, don’t buy a membership to another.
- If you have to pay for “swipes” to a dining hall, use those to get food instead of going out to eat.
- Learn about other campus amenities and leverage them to avoid other expenses as much as possible. Free coffee in the library? Drink it!
- Finish in 4 years or less
- All of these savings opportunities above are pennies compared to the cost of tuition, expenses, etc. but also the opportunity cost of not-yet-working. Once you start working, you will quickly be able to get into a better financial position.
- All that being said, if you can take some time off before you start working to travel do it now!
Show References
PETA College Cookbook
Poshmark
Creative ways to save money in college
Student Guide to Budgeting
Student discounts
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We get started with a voicemail from Maggie’s mom, which is why you all need to call or text us and leave us a voicemail question, or tip and we will play it on the air - 404-981-3370. In her voicemail she asks if you should take a 0% car loan if a car dealer is offering one and use your money to invest or pay cash for the car.
This is our 50th podcast episode, and it’s actually a very fitting topic as we dig into the importance of having friends challenge you on purchases, especially big ones. Sometimes friends and peer pressure can have negative consequences on your finances and convince you to do things that aren’t so responsible, but the good things about having “friends on FIRE” is that they are challenging you to do the opposite. Friends on FIRE are friends that challenge you to make more thoughtful and responsible decisions for the right reasons.
Maggie wants to buy a 2020 Subaru Ascent, and her top justifications for buying a new car, and this specific car, include:
- A car with a 3rd row / towing capacity - Maggie has 3 kids and wants to be able to travel with extra family members and their kid’s friends, take their 5 bikes on trips with them, and more.
- She likes the idea of a new car as she’s very clean and treats things more nicely than most people.
- She can afford it and would pay cash for it, and it doesn’t affect her retirement timeline. She works hard and wants to treat herself.
- She likes Subarus.
Mike asks Maggie many questions, including:
- The cost of the car
- The cost of her current car and how long she’s had it
- The cost of the previous car before that and how long she had it
- Trade-in value for her current car
- Number of years she commits to driving this new car
- The longest period of time she’s ever owned a car
Mike’s supportive of Maggie buying a used car that better meets her family’s needs, but he’s not supportive of buying a new car or this specific car. Mike’s rebuttal reasons to Maggie for how he would think about a purchase like this as a framework for her decision. This same framework could be used for any large purchase decision:
- You can find a used car with all of the similar bells and whistles for half the cost of this new Subaru.
- Mike breaks down the cost difference of the new car and specific brand Maggie wants, of $40-50K vs. a car with all the functional benefits of what her family needs for $20K.
- The simple things and functional needs can be found in a $20K car (vs. a $40-50K car).
- He asks questions of whether the brand, a new car, etc are worth a premium $20-25K to Maggie.
- Just because you have money doesn’t mean you should spend it.
- Brands and not getting hung up on a specific brand. It’s all marketing. Maggie can’t even explain why she’s so enamored with Subarus, but she is.
- Mike goes through a “how much is it worth to you” exercise with Maggie, and it does challenge some of her thinking of what premium she’s willing to pay for a new car and for a Subaru Ascent specifically.
Our top 3 takeaways for this episode:
- Encourage your friends to challenge your purchases. Your friends are friends because you share values, so their feedback will help you.
- Cars are still the worst. By worst we mean they can be one of your biggest life expenses when in reality they are really a utility to get you from point A to point B.
- Understand the premium you are paying and what exactly you are paying it for. If you still want to make the purchase, at least you have been honest with yourself.
Show References
Friends on FIRE episode #9 - Cars at the Worst
Subaru Ascent
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Ben is a divorced dad of 2 living in New Hampshire that started the blog and podcast FIafter40 in early 2020. We start off with a brief discussion on the reality that divorce and money is often a topic people don’t talk about. Money itself can be taboo, but throw in divorce and it’s a tough topic for many. We believe talking about money can improve your life, and this is the case before, during, and after a divorce also.
We discuss a number of topics with Ben:
- How he is earlier on his path to financial independence because he got a later start in life.
- As a child, Ben didn’t talk about money much. He remembered his parents avoiding opening mail because of bills and he himself learned to avoid conflict and just not talk about money as it could be a contentious topic.
- Ben shares how he didn’t really take a hard look at his financial habits and situation until he went through his divorce. He shares that sometimes you have to go through certain experiences to really learn this stuff.
- He’s learned over the years he can tend to avoid conflict. This self-reflection and awareness is important for creating new habits around money and moving forward productively.
- In Ben’s first marriage his wife was actually better with money than he was, but their entire marriage was paycheck to paycheck. It was a slow build. And he admits he was likely the bad influence on her financially. They got to a place in their marriage where they were treading water and that felt like a good thing.
- He did not want to fight about money so he would just avoid the topics. He would shut down the discussion if things got at all difficult, and just say don’t worry I’ll deal with it. But he didn’t really deal with it.
- Around the time Ben got divorced, Ben was at a point in his life where he felt like everything should be peeking financially, but instead it was falling apart. He couldn’t change that relationship or what happened, but he could improve things financially.
- Going through a divorce triggered some good behavior changes for Ben. Some good things and bad things came out of it financially. On the positive side, they had to sell their home which gave them back a lot of equity and they had to review all of their assets which gave them a hard dose of reality on their finances. On the harder side, he now had the burden of child support and alimony which can put a significant drain on his finances.
- Ironically, the first time he and his then wife sat down and had legitimate conversations about finances was when they were going through a divorce after 12 years of marriage.
- They were in denial about what they were doing with their money. This is the stuff they should have been talking about the whole time.
- His FIafter40 blog first came about as a way to personally document this journey he was going on.
- Ben discusses talking about finances as you’re entering a new relationship post-divorce, and shares that the blog and podcast definitely create a more transparent environment to discuss money.
- We each share some insights on our relationships and how we’ve talked about money and brought each other along.
- We discuss pre-nups. Ben’s never considered on, and Maggie tries to convince Ben why they are so important and valuable. We make some comparisons between wills and prenups.
Our top 3 takeaways for this episode:
- Be open and communicative with your partner about money. Talk about the specifics of your net worth, financial specifics, and what’s important to you financially in life.
- If you’re living paycheck to paycheck and just barely getting by, spend some time assessing what you’re spending your money on. Improving your finances together with your spouse can have a positive impact on your relationship.
- Though divorce can be tough financially, it can also be the trigger you may need to do some self-reflection and improve your finances. You can take a tough situation and turn it into a positive.
Show References
FIafter40 Website
FIafter40 on Instagram
FIafter40 on Twitter
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In order to determine if credit monitoring is worth the expense, we break down the specifics of what it is, what benefits it provides and what other options are out there to get the same protection.
- What does credit monitoring cover?
- Provides real time monitoring of your credit report to alert you to changes and/or new accounts being opened.
- Provides copies of your credit reports.
- Provides benefits for identity restoration and insurance services, lost-wallet protection, fraud resolution support, etc.
- Provides Dark Web monitoring, which is sort of mysterious.
- How you can DIY a version of credit monitoring:
- You can freeze your credit, which is a double-benefit as it’s a great excuse when you’re in a store and someone is trying to push you some store credit card, just say “oh, sorry, would love to but I have a lock on my credit.”
- Federal law entitles you to a free annual credit report from each of the three credit reporting agencies
- Most credit card companies or other free services like Credit Karma will give you your credit score for free. Also, you don’t really need to know your credit score on a regular basis if you’re not charging things you can’t afford.
- Many of your banks and accounts will let you add an extra verbal password to your account
- How do you decide if it’s worth it to pay for a service or not?
- This is a personal decision, but you need to weigh the pros/cons and risks/tradeoffs for your personal situation
- Most people don’t need it, but on the flip side it’s insurance and insurance is there as a backup in case you have an unexpected situation so it’s all about your frame of mind. Why would you treat this any different than car insurance, homeowners insurance, etc? The odds of getting your identity stolen vs. getting in a car crash are actually higher.
- Like many things, the peace of mind could be worth the cost.
- If you’ve been a victim of identity theft, like Maggie, you may be more interested in it.
- How much should you pay?
- Services range from $15 - $30+ a month. Some companies offer family plans, some only offer individuals.
- The more reputable companies include:
- LifeLock - $10-30 a month
- Zander Insurance - $6.75 per month/$75 per year, Family Plan of $12.90 per month or $145 per year
- Identity Guard - $13-17 per month
- American Express CreditSecure - $16.99 per month
- Identity Force - $15-20+ per month
- ID WatchDog - $15-20 per month
- Make sure you find a company that provides monitoring across all 3 credit bureaus vs. just one (e.g. ID WatchDog’s basic plan is just Equifax).
- Read the fine print - some of them have an arbitration clause in the terms of service, where you’re waiving your right to a class-action lawsuit
- Zander is the cheapest, but they actually are ID Theft Protection and not credit monitoring. The credit monitoring part you can do yourself, and that’s why they claim to not offer that in their package.
- Do you need credit monitoring for your kids?
- Probably not, but it’s definitely a plus that some of the services do offer it.
- What do you do if your credit is stolen?
- Move quickly!
- If you have a monitoring service, call them and they’ll handle some of it for you but you still have to do a lot on your own
- Call companies right away to file complaint and let them know you’ve been a victim of identity theft
- Credit companies have entire departments who do nothing but investigate as lots of people claim fraud but actually made the charges or expenses themselves. You have to prove to them you were actually a victim.
- Credit monitoring is like insurance - you often have to deal with and pay for a lot up front, and then after the fact the insurance will make you whole if they decide it’s a valid claim. It does not just magically fix and pay for everything.
Top 3 Key Takeaways:
- Credit monitoring provides certain types of protection. Understand what they are and what you’re paying for vs. what you truly need.
- You can get most of the protection by simply freezing your credit with all three credit bureaus.
- Make the decision that is right for you. As always, spend money on things you’re passionate about and care about - if this is one of them then go for it.
Show References:
- How to freeze your credit
- Credit Karma
- NerdWallet
- Best Identity Theft Protection of 2020
- How to check your child’s credit report
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Jen and Jill kick us off with the best descriptions we’ve ever heard two friends give each of each other, using terms like dry and witty and a tall glass of water. We spend a good bit of time exploring Jen’s relationship with the state of Pennsylvania.
We discuss a number of topics with Jen and Jill:
- How they each grew up and what those experiences taught them about money.
- How they first met and started the Frugal Friends podcast.
- They share their why for being frugal and what drives them.
- Why Jill is moving to Florida.
- Jill and her feelings about the state of Pennsylvania.
- Values-based spending - How to spend more intentionally and based on your values.
- Getting more connected to the decisions you make about money.
- Budgeting vs. tracking expenses and how they are related but different.
- How paying off debt can be isolating from your friends who aren’t on the same path or in the same spending habits as you are.
- Time vs. money and the idea you can take some things off your plate and have time to do other things you enjoy. Consider re-evaluating what you are clenching your fists so tightly for?
- Frugality and how it should not be a race to the bottom. It’s about being intentional with your limited resources. It doesn’t need to be about deprivation and taking things away, but instead about how you’re going to fill those voids with other things. Though we sometimes think it’s a race to the bottom on how little we can spend each month, perhaps it should instead be a race to how much life we can live for as little as possible.
- Jen tells a story about a trip to Uganda and recognizing that each person would hire out a lot of the things that we’d typically do ourselves amongst families that didn’t have a lot of money themselves, but enough to provide a job to others. It’s part of the culture to help out fellow community members and neighbors if you’re able to.
- There are different extremes on the pendulum of how people are living their lives financially, and you could go so far in one direction where you’re not living your life because you’re constantly doing everything yourself and making yourself miserable or you could outsource everything and do nothing productive with your time. Find your radical middle that blends both sides of this for your specific life.
- The lakes of Pennsylvania.
- Inflatable hot tubs.
- They are launching a new frugal friends 6 week workbook coming out August 7th. Follow them on social media to learn more about it when it launches.
Our top 3 takeaways for this episode:
- Talk to your friends about money. Good stuff comes from it. It’s how Jen and Jill bonded and became good friends. It’s how Mike and Maggie bonded and became good friends.
- Being frugal and responsible with your money doesn’t have to be a race to the bottom. You can avoid extremes and find your own personal radical middle.
- Pennsylvania?
Show References
Frugal Friends podcast
Frugal Friends community on Facebook
Frugal Friends on Instagram
Inflatable Hot Tubs
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We revisit the SMART goals framework. Ideally, your goals should be Specific, Measurable, Assignable, Realistic, and Time Related (that’s SMART). There are a few versions of what SMART stands for out there – don’t get too hung up on the specifics, just set some goals that are specific, measurable, and time-bound.
We also talk about how we’re struggling at times to stay motivated during Quarantine, and Mike shares some insights on how he stays motivated and disciplined.
Mike’s 2020 goals and mid-year progress:
- 20% Spending Reduction: Mike’s at 37%
- 15% net worth growth: Mike’s at 3.2%
- Read 10 Books: Mike’s read 14
- Be a better vegan: No significant progress, but Maggie isn’t too hard on him.
- Get more into minimalism: A big success!
Maggie’s 2020 goals and mid-year progress:
- 15% Net worth growth: Maggie’s at 11.4%!!!
- Live off of 25% of her salary and not dip into savings to augment her lifestyle: So far, so good.
- Read 11 Books (because of course she wants to beat Mike): She’s read 21, and it’s a mix of audio books and physical/kindle books.
- Spend more quality and focused time with her kids and husband (with phone off): Maggie admits she can do better here.
- Meditate 260 times (5X a week on average): Doing OK but not so great, but committed to doing better in the 2nd half of the year.
- Write a blog post once a week for Mostly Minimal Life: Maggie is at 42%, so she’s missed 15 weeks and completed 11 weeks. She’s committed to making up for it in the 2nd half of the year.
- Post a new podcast once a week for friends on FIRE: Crushing it!
Our top 3 takeaways for this episode:
- Set goals, write them down and discuss them with someone else to create accountability.
- Measure your goals throughout the year to find out if you are on track or off track.
- Be flexible and kind to yourself. If you can reach all your goals, reset them and keep on making progress.
Show References
Maggie’s complete list of books she’s read in 2020
Atomic Habits
Small Great Things: A Novel
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie starts off with a recap of the vacation she just got back from, and we share a voicemail from a listener with some additional tips for how to save money while on vacation.
The book Essentialism is mostly centered on learning and using the principles in your professional life, but the principles easily translate to your personal finances. As the author shares, “the way of the Essentialist involves doing less, but better, so you can make the highest possible contribution.” We discuss how this applies to your personal finances and money. Mike is a natural born Essentialist and very focused and disciplined. Maggie is more of a minimalist with belongings but has to try much harder to be an essentialist with her commitments and priorities. We discuss what we’ve observed about each other, and then dive into our learnings and thoughts from the book. Mike share’s some of his favorite passages from the book:
- We can either make our choices deliberately or allow other people’s agendas to control our lives...this requires, not just haphazardly saying no, but purposefully, deliberately, and strategically eliminated and the nonessentials, and not just getting rid of the obvious time wasters, but cutting out some really good opportunities as well. Instead of racing to the social pressure pulling you to go in a million directions, you will learn a way to reduce, simplify, and focus on what is absolutely essential by eliminating everything else.
- Essentialists see trade-offs as an inherent part of life, not as an inherently negative part of life. Instead of asking, “What do I have to give up?” they ask, “What do I want to go big on?”
- The best asset we have for making a contribution to the world is ourselves. If we underinvest in ourselves, and by that I mean our minds, our bodies, and our sprites, we damage the very tool we need to make our highest contribution.
- (In reference to the “reverse pilot” practice) The Executive simply stopped publishing the report and waited to see what the response would be. What he found was that no one seemed to miss it.
- When we are unclear about our real purpose in life--in other words, when we don’t have a clear sense of our goals, our aspirations, and our values--we make up our goals, our aspirations, and our values, we make up our own social games. We waste time and energy on trying to look good in comparison to other people.
Key Takeaways:
- Essentialists see trade-offs as an inherent part of life, not as an inherently negative part of life. Instead of asking, “What do I have to give up?” they ask, “What do I want to go big on?
- Essentialists have clear goals and purpose, and so should you! Spend money on those things. Don’t let others or society set them for you in the form of material things.
- With money and with life, focus on only the most essential things. You’ll be more focused, happier, healthier and of course, have more money.
Show References
Essentialism: The Disciplined Pursuit of Less
Small Great Things: A Novel
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Here’s the rundown of what we discuss in this episode:
- What a credit score is:
- 3 agencies produce credit scores: Experian, Equifax, Transunion
- It’s like a SAT score for college entrance, it helps lenders evaluate your credit-worthiness based on a score.
- It’s only real purpose is to help you get a loan: house, car, credit card. It does have some secondary purposes like it could get pulled if you’re trying to rent a house, get a job, etc.
- How is it calculated?
- 35% payment history - How long have you consistently paid your bills?
- 30% amount owed, a.k.a. credit utilization - Having a lot of cards actually helps if you aren’t spending all of it.
- 15% length of credit - How long has credit been available to you.
- 10% new credit - Opening a new card doesn’t impact your score a lot
- 10% credit mix - Having a mortgage, credit card, car payment, etc. all help a tiny little bit
- What really matters?
- Pay everything on time, over time.
- The tiny fluctuations of applying for a new card or having your report “run” don’t matter if you are always paying your bills
- How to protect your credit and credit score
- Freeze it! - Freezing a report is like building a wall around your credit report. Credit monitoring is like leaving the door open and installing a camera
Our top 3 key takeaways for this episode:
- Credit scores mainly matter if you want to borrow money and we advocate being debt free. And your score really only needs to be good enough, so it’s not something you should stress over.
- Pay each of your bills on time and in full every month and your credit score will be fine. If you’re not able to do that, ensure you pay the minimum payments on time each month.
- Freeze your reports at Experian, Equifax, Transunion.
Show References
Equifax Security Freeze
Experian Security Freeze
Transunion Security Freeze
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This is a surprise episode, where Maggie prepped the topic and notes from a blog entry she did on Mostly Minimal Life and then Mike just weighed in off the cuff. Mike reminds us how insurance works and that he used to work for an insurance company that provided many of these benefits to credit card companies. We discuss each of the credit card benefits below, and some tips and considerations to keep in mind for each:
- Global Entry or TSA Pre Fee Credit
- Baggage Delay Insurance
- Lost Luggage Reimbursement
- Trip Cancellation / Trip Interruption Insurance
- Extended Warranty Protection
- Purchase Protection
- Travel Accident Insurance
- Car Rental Insurance
- Concierge Services
Our top 3 key takeaways for this episode:
- Research and understand your credit card benefits.
- Write down the benefits and log them somewhere so they are easily accessible to you as you need them in the future.
- Use these benefits. Keep them top of mind and remember you have them vs. paying for other duplicative services or upsells.
Show References
Credit card benefits I never knew I had from Mostly Minimal Life
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
The Fioneers share a number of great stories and insights:
- We always like to ask people how they grew up financially. Corey grew up always hustling and earning money and was focused on what he could buy with money. He grew up believing money is a tool, not positive or negative, that can be used to get what you want, whether an experience or item. Jess grew up in a household that rarely had money stress, though she knew her family was pretty frugal. One thing very formative was when Jess went to college her dad sat her down and gave her two options, both that involved her not getting into debt. He said she could go to a school with scholarships or get a job to help pay for college.
- They shared their why for financial independence and how it has evolved over time. It’s less about retiring early for them, and more about building financial freedom that we can utilize along the way. They are not in a huge hurry to “retire.”
- They want the journey to financial independence to be as remarkable as the destination.
- They are focused on how they can use this financial freedom we gain along the way to live a life that is aligned with our values and our priorities and this vision that we have for our ideal life.
- Their motivation for financial independence, both a push and pull. What is it pushing you away from, and what is it pulling you towards? One of their early motivations was when Jess was working in a toxic job environment. So at first they were pursuing it to get away from that, and then eventually it was to get towards more freedom.
- Corey started on this journey about five years earlier than Jess, and over time she slowly came along on the journey. Jess initially didn’t understand what they were saving money for and wanted to enjoy her life and spend the money she earned. Jess had a level of guilt about having money, from her childhood and growing up having money and from her international travels and seeing so many people without money. That perspective has shifted over time.
- Corey initially excluded himself from being part of this community as he thought he had to have a higher income job than he had.
- The idea of incremental freedom. If they saved just a little bit more they could get more freedom and flexibility.
- The way Corey finally convinced her and got her on board was getting her to read Your Money of Your Life. From that book she realized there were people making intentional decisions about how to live their lives, and then she also started to learn the mechanics of retirement.
- They talk about the vacation in the woods of Maine in 2018 when they came up with the idea for the Fioneers. They wanted to Focus more on happiness along the way and they realized there weren’t any voices that had that type of message. They also share how they landed on the name itself. They are adventurers and like to explore new things. Pioneers are the first or trying something new. They wanted to chronicle the journey they were going on.
- They heard feedback from others that they pushed themselves so fast and hard they were making themselves miserable in pursuit of this. They didn’t want that to be them. They didn’t want to focus just on where they were going but how they would get there, so they termed the coin Slow FI. It is a happy balance of pursuing it but keeping the end in mind, and it’s not just a financial number. SlowFI is not a particular number, it is more of a mindset that I’m going to use my financial freedom to help me build a life I love right now.
- They also popularized the term CoastFI within the FIRE community, which is when you have enough already saved for retirement that it can continue to grow so you can retire comfortably at a traditional retirement age.
- Their ultimate goal is they get to a place where they can run a location independent business and make enough to cover their cost of living.
- Jess shared how she started having severe stress and anxiety attacks and ended up taking some time off and then quitting her job. It made her rethink a lot of things in her life.
- One of their biggest pieces of advice to people is to make lifestyle changes that are slow and incremental and design your life along the way vs waiting for the distant future to make a change.
- The effects of burnout and how a lot of people are pushed towards financial independence because they are burnt out in their job. Realize that once you get through this stage of burnout, you’re likely going to want to do something. It would be such a shame to live 10 more years in a toxic job just so you can retire early and then realize you want to keep working anyways.
- They have some upcoming projects they are excited about, including a new coaching business Jess is starting, focused on lifestyle design.
- If they had it to do all over again… Corey would embrace hobbies and activities even if they cost a little bit of money. And Jess would have gotten involved in their finances earlier in life. She stayed in a toxic job longer than she needed to and if she’d understood their finances better she may not have felt like she had to.
Show References
The Fioneer’s on Twitter and Instagram
The Fioneer’s website
The Fioneer’s Private Facebook Group
Your Money or Your Life book by Vicki Robins
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss our summer vacation plans, and jump right into how to save money on your next vacation.
Our top advice for saving money while on vacation:
- Saving money on airfare - Let’s be honest, most of you aren’t worried about this right now, so we’ll save this topic for a future episode.
- Saving money on accommodations -
- If it’s a hotel, look for deals and even consider signing up for a credit card to get a ton of hotel points and use them. You need to do this in advance though as they all require a few months of purchases before you earn your sign-up bonus.
- Do your research and explore various options.
- If you’ve found a rental property on VRBO or AirBNB go and google search to see if you can find the main site the house is rented from. Sometimes if you book it through this the rates are cheaper and fees are lower.
- Don’t just look at the nightly rate. Sometimes the fees can vary greatly from property to property, so look at the fully loaded cost of the property vs. just the nightly rate.
- Consider a less popular or in-demand location. Maggie share’s how she booked a house in Florida for 2 weeks for less than half the cost of other homes in other more popular beachfront destinations. The house has a pool, is on a canal for kayaking, and is 20 minutes to the beach. This is good enough, and the kids will have a blast!
- Look closely at the extra amenities offered. The house may come included with 2 bikes, 4 bikes, 2 kayaks, etc. Look for houses that have the amenities you would otherwise pay for, and prioritize those. Maggie just booked a house on a canal and her #1 priority was finding a house that included 2 kayaks as weekly kayak rental was going to cost $300-500 per kayak!
- Saving money on food
- Think/plan ahead. Don’t get stuck in places hungry where you’re forced to buy overpriced food. Plan ahead and pack lots of snacks and water bottles.
- Ideally book a hotel or house with a kitchen or kitchenette. This will save you so much money and allow you to eat at “home.”
- Go grocery shopping and stock up on what everyone loves, including extra treats! This will inspire you to cook and eat at home. Consider going shopping before you leave your house if you have room in the car as sometimes it’s easier and cheaper to do grocery shopping in your hometown vs. in the vacation destination city you’re in.
- Pack a cooler and fill it with ice. This will let you transport your cold items from location to location, but it also could help you do a make-shift kitchen in hotels. Maggie’s family traveled with a cooler in Ireland for 2 weeks, and they would take it into hotels with cold milk and other items, and it provided enough to ensure they could eat breakfast and snacks at home and avoid eating all meals out.
- If you don’t have a kitchen, think about non-perishable items you can pack to cover basic meals and snacks. For example, you could have bananas and pop tarts for breakfast, apples and peanut butter for a snack, and so on.
- Save money on activities
- Plan and think ahead.
- Research for groupons, online coupons, or sales. See if they have certain days where kids are cheaper or there are discounts.
- Don’t overbook yourself. If you rented a house with a pool or by the beach, then that’s your activity so you don’t need much else! What’s the point in paying for a place with a pool or by the beach if you’re going to leave everyday to go on excursions? If you do book some activities or excursions, space then out to every 2-3 days so you have downtimes at your rental house in between to just relax and enjoy what you booked it for.
- Look up the location community calendar in the city/area you’re staying in. There are often free activities happening, from markets to kids plays to live music. Put these things on your calendar first, and then find things to do that cost money to add around this.
- You are there to relax and spend time with your family. Take a minimalist approach to vacation and enjoy the simple, and free, things.
- Bring what you can from home. If you’re able to take your bikes along, do it! If you’re able to bring some pool floats or beach toys from home vs. being tempted to buy them at a local store, bring them from home!
- Saving money on “stuff”
- You will visit stores and your kids will ask you for things. Remember you’re the adult and you can say no.
- It’s OK to do some shopping while on vacation, especially if it’s for items that you’ll use and keep as a memory. Maggie loves to buy clothing she already needs while on vacation, as it serves as a nice memory and vacation is often when she has time to do a little shopping.
Key Takeaways:
- Don’t overspend on vacation. Align what you spend on vacation with what you have to spend right now. Sometimes you might be in a position to splurge, and other times you might want to be more cost conscious. Either way, you can go on vacation and enjoy yourself, and save money!
- Plan and think ahead. You can save so much just by putting some thoughts into your food and activities plan in advance.
- Try a new approach for your vacations and perhaps you’ll find some things you enjoy from it.
Show References
Untamed book by Glennon Doyle
Paper Towels are Silly
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Elaine is a Phi Beta Kappa graduate of Harvard College (1979) and the Yale Law School (1982). Her firm, Kwartin & Levine, LLP, focuses on wills, trusts, probate, family law and elder law. For the past 26 years, Elaine has represented over 800 individuals and families in a variety of legal matters but primarily estate planning, wills and trusts, and probate. Elaine has helped clients with practical solutions as they address the stresses and difficulties of raising children, as well as end-of-life planning and transitions in this complicated world. Her clients range from young married couples to the elderly, life partners and single people.
We really enjoyed our discussion with Elaine, and covered a range of topics:
- The core documents that someone needs:
- Will
- Revocable trusts (in some states)
- Advanced directives for healthcare, a.k.a. Healthcare power of attorney
- Financial power of attorney
- HIPAA authorization
- Beneficiary designations for life insurance and retirement plans (often you specify who will inherit those assets and it won’t go through your will)
- The life-stages that are important to consider and how each document helps during different life stages (e.g. getting sick, after you die).
- Why it’s important to hire an attorney to prepare these types of documents vs. trying to DIY or use a service like legal zoom. We also vouch for this as we have both used attorneys. We’re quite frugal in our lives, but this is one area where we recommend investing and doing it right with a properly trained attorney.
- Every state has its own sets of laws that apply after death. You should hire an attorney from your state who is well versed in wills and trusts.
- Elaine walks through what the process looks like with her firm to create an estate planning package (wills, medical power of attorney, financial power of attorney).
- In an attempt to help people budget and understand what estate planning with an attorney might cost them, Elaine shares rough estimates of what it costs for her firm to prepare estate planning documents.
- Using a partner in firm - $2500 for a couple, and $2,000 for an individual
- Using an associate in firm - $200 for a couple, $1700 for an individual
- Though this costs money, the risks of not doing this are so high that we believe it’s worth the investment. The risk of not having proper documents in place include leaving your family with internal strife, lawsuits, difficulties transferring properly, bills that go unpaid, mortgages that get foreclosed, children from blended families cut out, and more. You are investing in the peace of mind that you’re covered if something happens to you or if you die.
- Elaine shared some scenarios that add complexities to your estate planning, and some of the thing’s families need to consider. Those examples include blended families, families with special needs childrens, eledery couples, same-sex couples, people who own small businesses, and more.
Show References
Kwartin & Levine website
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This episode was inspired by a 23 year old who left us a voicemail that said, "I am new to this adulting thing, so if you have any advice for me...” We love the honesty and vulnerability in that statement, and so we will do our best to give our best “adulting” advice for everyone in their early 20s, though really the same advice applies if you’re in your 30s, 40s, 50s, or beyond. And for those who have never heard the term “adulting” before, the dictionary defines “adulting” as “the practice of behaving in a way characteristic of a responsible adult, especially the accomplishment of mundane but necessary tasks.”
Our top “adulting” with money advice:
- Avoid debt. Don’t go into debt for things you don't need and can't afford. If you already have debt, aggressively focus on paying it off. Get into the habit of paying off any bill the month it’s due. Credit card debt should NEVER be carried over.
- Buy a reasonable car, aligned to how much money you have/make. Don’t buy a fancy car. No one cares about your car.
- Think differently about your home and real estate. Buy a cheaper house than the bank might approve you for. Get a 15 year mortgage, or if you can’t afford that reconsider your home choice. Run the math on renting vs. a mortgage… it might be Ok to rent.
- Consider house hacking while you can, it’s a bit easier when you’re younger. Buy a place and have 3 roommates to cover your mortgage. In episode #18 we interview Andrew Kerr from the househacking podcast, listen to that and listen to his podcast for more specific tactics and inspiration.
- Manage your mindset and realize what’s important in life. Too many people realize these things later in life, and have lost decades of better financial practices. The earlier you realize it and change our practices and approaches the better. Don't keep up with the Joneses..instead keep up with Mike and Maggie. We just did an episode on top 10 FIRE extinguishers and talked about these topics more, so check out episode #35 for more on this.
- Be aware of what lifestyle inflation is and avoid it. No one cares about your stuff. You're not entitled to an income, you’re not entitled to a nice car. Don’t take these things for granted if you are fortunate enough to have them available to you.
- Research, learn about, and then take advantage of every benefit your company has to offer. This could be anything from your 401-K, to HSAs (Health Savings Accounts), to FSAs (Flexible Spending Accounts), to discounts on large purchases like mattresses or insurance.
- Invest early and often. Understand compounding interest and take advantage of it.
- Max out your 401k as early as possible.
- Invest in the market - simple and basic. Start buying low cost index funds. Use something like Wealthfront if you’re intimidated by how to get started. Go open an account with Vanguard or Schwab and buy something like:
- The Schwab US Broad Market ETF (SCHB) tracks the Dow Jones Broad Stock Market Index – the largest 2,500 publicly traded companies in the U.S.
- The Vanguard Total Stock Market ETF (VTI) tracks the performance of the CRSP U.S. Total Market Index, which is all stocks on the NYSE and NASDAQ.
- Develop a tolerance for market fluctuations. Don’t beat yourself up if you lose. Don’t congratulate yourself too much if you win. A $10 loss might seem huge when you have little invested. Over time, you’ll want to be able to emotionally deal with $10K losses. Or $100K losses. Start now and it will get easier.
- Don’t gamble and play with the market - just keep it simple and basic and keep buying in at a young age, and stick with it.
- Track your expenses and net worth early on.
- Don’t get into a long-term relationship with someone who is not like-minded with you about money and what’s important to you in life. It’s OK if they have some different views on money, but if you can’t have open and honest communication about things like money then there’s a problem. Yes, we are suggesting you potentially reconsider your relationship choices. This is the time to truly think about what’s best for you and make strong decisions. It will make your relationship stronger down the road if you have these tough discussions upfront. Also, consider a pre-nup, even if you think you have nothing to protect. We’ll do a whole episode on this, but it’s something Maggie highly recommends, to protect both people in a relationship.
- Lastly, pursue your passions. If you can make it your career, that’s amazing. If you can’t, make it your hobby. When you have hobbies and passions in your life, you have less need to fill your life with “stuff” and waste your money.
Key Takeaways:
- Avoid debt. Minimize your car, house, and other big debt items.
- Take advantage of compounding interest and invest early and often.
- Communicate early and often with your partner, and if that doesn't work then choose a new partner.
Show References:
- Friends on FIRE episode #9 - Cars are the worst
- Friends on FIRE episode #18 - House Hacking
- Friends on FIRE episode #35 - 10 FIRE Extinguishers + how to avoid them
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- Househacking Podcast
- Wealthfront
- Vanguard - VTI
- Schwab - SCHB
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We discuss our difficult day at work where a major furlough, a temporary leave, impacted the employees. We also share our thoughts on the current economic environment that is causing such massive unemployment situations and provide some advice on how to handle losing your job or being furloughed. It’s first important that you get as much info as you can. Understand what’s happening, understand your options. Make a plan! Read everything your company gives you! Read it twice.
6 Steps to deal with a job loss or furlough:
- Step 1: Accept it emotionally. 40M+ people are unemployed. It’s not your fault and we’re all in this together. Things will get better. But ground yourself with the worst case scenario.
- Step 2: Listen to our episode on living like you lost your job, #22.
- Build the emergency fund---now
- Stop spending money---now
- Reevaluate all your lifestyle commitments--now
- Step 3: File for unemployment insurance.
- Unemployment insurance is an employer tax that pays you a benefit if you are unemployed. The benefits can range from $200-$550 a week. And can last up to 26 weeks.
- The federal government has expanded these benefits to include situations like furloughs and reduced hours..
- Step 4: Request mortgage forbearance if you can’t pay.
- Forbearance is when your mortgage servicer lets you pause your payments for a short period of time.
- This is not forgiveness of the payment. At the end of the period, you’ll still owe those payments but the repayment plan varies by provider.
- Step 5: Extend your medical insurance
- Your employer might provide benefits coverage for a period of time, if not, you can pay for it yourself through COBRA: the Consolidated Omnibus Budget Reconciliation Act of 1985.
- You're eligible to keep your health coverage for up to 18 months. It will be expensive, as your employer was subsidizing this before, but it might be your only option
- Or get on your partner’s insurance. This qualifies as a life event and you can sign up outside the enrollment period.
- Or sign up for the Affordable Care Act, the Health Insurance Marketplace. Obamacare.
- Step 6: Prep for another job
- If you’re furloughed, hours cut temp, etc. really make a calculated decision on what you need to do for your own personal situation. If you’re confident you’ll be able to return to your company soon and you can afford the reduced pay for a while, then ride it out. If you’re worried you won’t return and you need a full-salary paying job ASAP, then start looking.
- It will be tough to find a new job. But that doesn’t mean you shouldn’t try. Job hunting is a skill based on experience, so start building that experience now. Don’t get discouraged, and keep at it!
- Update your resume.
- Update linkedin.
- Connect with your network
- Apply for jobs.
Our top 3 takeaways for this episode:
- This isn’t your fault
- Use this time to cut your spending and reevaluate your lifestyle and all related expenses.
- Take advantage of government programs like increased unemployment and mortgage forbearance.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We really enjoyed our discussion with Joel, and covered a range of topics:
- How personal finances have such an impact on our entire lives, and he really enjoys seeing the impact his advice can have on people’s lives.
- He shares some personal stories about how we grew up with money and how it shaped his views and emotions around money.
- He doesn’t want money to be a contentious topic for people. We’re willing to talk about almost anything except money.
- How he ended up working for Clark Howard and all that he’s learned from him over the years.
- He has no shame when it comes to the saving money game.
- He’s improved his ability to let go of some things around saving money over the years.
- How he and Matt have are adjusting during this quarantine, and that the How To Money podcast has now dedicated their Friday episodes to talking about quarantine topics.
- The importance of being more intentional about finding ways to connect with your spouse during quarantine.
- Frugality is making a comeback right now, and saving money matters so much more now than it did 3 months ago.
- The only thing he’d change over the last 10+ years is to be more generous and have a healthier view of money earlier on, and he talked about how good it feels to see your money do good work for others around you.
Show References
How to Money on Instagram
How to Money Facebook Group - a great place for people to talk about money and ask questions
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Ronnie starts off by sharing his career journey and walking through some of the decisions he made along the way, including going to business school where he met Mike! He talks about all of the people who have helped him along his journey, and how important it is to use our networks and ask for help and advice when we need it. Ronnie spent many years working in consulting, the cruise industry, PR/marketing, and more, before he decided to jump into the world of entrepreneurship and start Spark Cooperative with two of his former co-workers and friends.
Ronnie and his family have a more laid back approach to their personal finances and he explains how that looks for his family. We also talk about paying off your mortgage, using financial planners, emotions and how they impact your personal finance decisions, and more.
Ronnie shares his thoughts on magic, patterns, inflection points, privilege, and much more:
- The process of communicating with his wife along the way and importance of communication.
- Some of the best advice he received from a mentor: (1) Get a handle on your financials. (2) Services are great, but own some intellectual property. (3) Think about what your blue ocean is, what you can do better than anyone else.
- You don’t want to be paid for your time, you want to be paid for your expertise.
- It pays to take care of people and be there for people. Be caring for people and be there for when you don’t need anything in return.
- How he was raised and how hard-working his parents are.
- If partners can’t agree, it turns into a partner-shit, instead of a partnership.
- Privilege and how much of it he sees around him. As he works with larger and larger players his eyes are open to all of the privilege that money brings with it. No one teaches those without that privilege how to play in that world, from negotiating to preparing your terms in a way where you won’t get taken advantage of.
- You shouldn’t be selling into a crisis. You should instead be asking where you can help, and then helping.
- As covid is impacting their business, they are focusing on over-servicing their clients.
- The little comforts we’re all finding during the pandemic. It’s OK to eat a tub of ice cream every night if that’s what you need right now.
- Don’t be scared of entrepreneurship. Learn about it and explore it if you’re curious. There’s financial freedom to be gained in there if you do it right.
Show References
Spark - Ronnie’s company
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start off with a reminder on what FIRE is really all about. FIRE stands for financial independence retire early, and we tend to focus as much on the financial independence portion than we do on retiring early part. Retirement for us is not about doing nothing, but instead about doing what we want, when we want, how we want, and on our terms. It’s about the freedom to have choices on how we spend our time.
There are 10 FIRE extinguishers we talk through:
- Your mindset. You may hear about the concept of financial independence and think, “I can’t achieve that.” That’s a myth. Almost anyone can reach FIRE. It’s not about how much you make, it’s about how much you spend. There are people on teacher’s salaries who have worked hard to reach financial independence. It’s available to you if you want it.
- Keeping up with the Joneses. This is feeling like you need things just because you’re trying to impress someone else or have what they have. You live in a certain type of neighborhood and you feel like you can’t drive into it with your 2003 Ford Explorer, but you can!
- FOMO - Fear of Missing Out. Not related to impressing others, but seeing others on social media primarily, having fun and wanting to do the same.
- Lifestyle Inflation. Also “lifestyle creep”, where what you have slowly becomes normal and you always want just a little bit more. Often as your salary gets higher you spend the incremental amount to inflate your lifestyle.
- Your spouse or partner not being on board. If you have a partner or spouse in your life, then this journey is undoubtedly easier if they are on board. We share some ideas for getting them on board.
- Criticism or judgement from others. This is the opposite of many of the items above. You actually could feel somewhat isolated on this journey and get some level of criticism or judgement from your close friends and family. Don’t let that deter you! Remember why you’re doing this. We recommend connecting with like-minded people to expand your friend group to others that you can relate to more.
- Your kids guilting you into things. Remember, you’re the parent and you’re in charge. Telling your kids no builds character and teaches them important lessons about what’s important in life. You might think you’re depriving your kids, but that’s not true, you’re instead teaching them important values and principles.
- A job loss. Though it’s hard to avoid this and sometimes just happenstance, you can do some things to ensure a lesser chance of this happening. Make yourself indispensable at work. Maggie loves the book Linchpin if you need some guidance here. You can also proactively manage your career, network, and skills so that if/when you do experience a job loss, you’re more easily prepared to find a new one.
- Aging parents who need your help. We recommend you speaking with your parents about their finances, and planning proactively to ensure they are in a good spot. Don’t be afraid to discuss this with your parents. Also consider long-term care insurance and other proactive efforts to avoid these costs hitting you.
- An unexpected big event. This could be anything. It could be a huge medical expense, an injury that stops your ability to work, a lawsuit, the death of a loved one, or many other things. There’s not much you can do to avoid this, but there are things you can do to financially prep for this so you’re not overly put out when something does unexpectedly happen.
Our top 3 takeaways for this episode:
- Almost anyone can reach FI if that is their goal and priority, and if they are willing to potentially make some sacrifices. We actually don’t think of these things as sacrifices, as we’re building towards something important we care about.
- Be mentally strong. Half of these extinguishers are all in your head and can be solved for by your mindset.
- Plan for the things you can plan for, and don’t stress about the other things. For example, don’t stress about an unexpected big event if there’s nothing you can proactively do about that now.
Show References
Linchpin book by Seth Godin
Linchpin Manifesto
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Maggie reads a review from apple podcasts, and gets vulnerable with some feedback she received on her voice. And we answer a voicemail from Alex about what to do with extra savings at the end of the month.
Mike + Maggie’s overall advice is that there are different considerations and life stages or situations where split vs. combined finances could be appropriate. Maggie is a proponent of split finances, which she believes can create less opportunities for disagreements or conflicts on how money is spent. Also, split finances shouldn’t be taboo or a bad thing. It doesn't mean you don’t love each other, or that you’re not being communicative about money and financial goals. Mike is on the combined finances train and believes it is often necessary and best if one person is not working outside the home or staying home with the kids (which is incredibly hard work!) or if there is a really large difference in salaries. Additionally, combined finances allow for a more streamlined approach to money management, portfolio investing and analysis (the stuff Mike loves).
Maggie shares her views on pre-nups, which we’ll cover in a future episode. Whatever you do, you should always come together to review your finances as a family together.
Our top 3 takeaways for this episode:
- Decide what is best for you, in your life stage and situation. It can always adjust over time.
- Manage your finances together with your partner and communicate, regardless of whether you decide to do split or combined finances.
- When in conflict, choose love over money. Aim to choose compassion and love in any financial discussions. Your relationship is more important than money.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
In an attempt to explain the economy to everyone, we talk through a number of topics during this episode:
- Broad economic realities that unemployment is at an all time high and the stock market took a huge drop and then rebounded dramatically because of government intervention.
- The highest new unemployment claims during the 2008 recession was ~600K, and we’re seeing 5-6M a week right now.
- We are unsure how long all of this will last, but consumer confidence is down. Though this is unprecedented, bear markets are not.
- How you can understand the economy by explaining how a CEO runs a company to how you run your personal finances.
- Your household personal finances have some key activities:
- You make decisions based on expectations of cash flows
- You borrow money
- You invest in certain assets
- Companies are the same:
- Companies have real estate, supplies, employees, etc. All based on expectation of cash.
- When that cash stops, they have to either absorb it or reduce costs.
- 5 main things you can do with cash and how that compares to your personal finances:
- Reinvest into the business--renovate your house
- Pay shareholders--give it away or spend it on your family
- Acquire something--buy a new house
- Pay down debt--pay off mortgage
- Stock buybacks--Mike’s not sure what the equivalent is
- Companies have a disincentive to just hold cash. And households just don’t like to, but they should.
- So when this all hits, companies, like people, can’t pay their bills because they have no cash.
- Companies with an emergency fund like a household can survive longer.
- Why is the market rebounding?
- The situation now is cash flow, so the government is basically flooding the economy with cash.
- Unemployment benefits are increased
- Business can get loans
- Sectors are getting bailouts
- Mike explains what the Fed is
- It’s like taking a personal loan though. You have cash, but you haven’t created any value. The fundamentals of your life are no different, you just have cash now to pay bills.
- The situation now is cash flow, so the government is basically flooding the economy with cash.
- The economic fallout of what is happening will be significant and last for many years. We recommend managing your personal finances with this in mind.
- The good news is that we’re seeing some fascinating human behavior coming out of this. The world is uniting around a common cause, and we’re seeing people unite around a uniquely unifying event in a way we’ve never seen before. This means we’ll get through this as a world, but it will be a tough road for many to get to the other side of this. And the other side may look different than things look today.
- Mike also shares that his favorite sources of financial information and news are Yahoo! Finance and the Motley Fool.
Top 3 Takeaways:
- Companies are like households in that they spend money based on the expectation of cash flow.
- Companies don’t have an incentive to keep cash because of investor demands, but you do have an incentive to keep cash.
- This will be tough. Live like you lost your job. Don’t take risks with your health or your money.
Show References
Yahoo! Finance
Motley Fool
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Scott has traveled all over the world working in the military, and now lives in North Carolina. Scott shares how he got into the financial independence movement, and how he started his life financially. He admits he started out spending all of the money he earned, and then as he got older started shifting and thinking about saving and longer term goals. Scott explains how military pensions and retirement work and how it’s changed recently. He also shares how he tries not to impart his own financial goals on his clients, but instead focuses on what his client’s goals are and helping them achieve those goals.
In listening to many of Scott’s Sheepdog financial podcasts, we realized there’s so much similarity between military and civilians from a financial standpoint. We are more alike than different, and all have the same goals and desires.
A few of our favorite sheepdog financial episodes include:
-
22 - Changing How You Think About Money and Retiring Before Mom and Dad with Rob Berger
-
30 - FI with Doug Nordman
-
37 - Moving with the Military with Maria Reed
We really enjoyed our discussion with Scott Vance from Sheepdog financial. Please listen to hear more about Scott’s story. Check out his podcast in the show-notes.
Show References
Sheepdog Financial Podcast on Apple iTunes
Zapier software - Scott mentioned a recent valuable pirchase
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start this episode off with a voicemail from Maggie’s mom. Then we dig into a review of what expense categories are up and down during the past two months, and why. We give a peek into what we spend money on each month and discuss our overall spending levels. We also share a few recent splurges. Mike has finally learned how to splurge!
Our top 3 takeaways for this episode:
- Grocery delivery is expensive. Consider if you really need it and if it’s worth it.
- Going into a store often leads to overspending, even for the most disciplined. This is one reason why your spending may be down. Perhaps take that as a learning for the future to keep your spending levels down.
- Track + manage your expenses right now. It’s always important, but it’s especially important given the current economy right now.
Show References
Flour + Time Vegan Bakery in Atlanta, GA offering free delivery!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk through three core areas of focus for decluttering:
-
1 - Decluttering tips and a plan for minimizing what you already have:
- Read some inspiring books, podcasts, blogs, or watch some youtube videos
- Know your “why” and what’s motivating you.
- Start with yourself vs. trying to get others on board before you’ve made progress.
- Start with easier categories first and finish with more complicated categories like sentimental items.
- Figure out a process and approach that works for you - there are many to choose from.
- Take pictures of sentimental items versus feeling like you have to keep them all.
- You do not need to spend money on organizing supplies to declutter your home. Challenge yourself to focus on decluttering without spending any money.
- Consider what items you declutter that can be donated or sold. Selling items is a great way to make some extra money.
-
2 - Limiting new items you bring into your life:
- Decluttering can simplify your life, but limiting new stuff is how you can create better financial health and save for the future.
- Don’t buy anything you think you need/want that day. Wait at least a week, and then decide if the urge is still as strong. You will often notice it goes away.
- Put a shopping ban in place. If you do need something then sit with that desire for a while. Think through how it’s making you feel to want that thing and why you might want it. At the end of the shopping ban you no longer have the same desire for that item.
- Stop going to Target. Seriously. Target has free 2-day shipping for red card holders, so consider using that to avoid as many trips to Target.
- The 1 in and 1 out rule. If you bring in something new, you have to get rid of something old.
-
3 - Digital Decluttering
- We only scratch the surface on digital decluttering, but consider how you are managing your digital clutter also. For example, a cluttered desktop on your computer can be very distracting.
- Consider financial decluttering opportunities to simplify your bank accounts, stock accounts, etc. But also recognize at times you may need to create additional accounts in order to leverage different financial opportunities (e.g. FSAs, HSAs, IRAs).
- Consider scanning items and using tools like Evernote to easily capture/store documents.
Our top 3 takeaways for this episode:
- Think about your why and use that to motivate you.
- Prioritize spending time decluttering right now or very soon. Remember stuff doesn’t create happiness, and it’s actually quite the opposite. Set a goal to spend a certain amount of time each day and get your whole family involved with that goal.
- Set some intentions and goals about how you’ll limit new items you bring into your home.
Show References
The Minimalists
Minimalism Documentary on Netflix
Becoming Minimalist - Joshua Becker
Marie Kondo’s Book - The Life-Changing Magic of Tidying Up
Courtney Carver Project 333
Poshmark
Article: A trauma psychologist weighs in on the risks of 'motivational' pressure during quarantine
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mark Horstman is an incredibly accomplished business leader and personality. He graduated from West Point, served in the military for many years, had a successful business career, and now has two popular business and career podcasts (Manager Tools and Career Tools). He runs a successful consultancy firm, Manager Tools, and has written two books (The Effective Manager and the Effective Hiring Manager). And on top of all of that, he’s a father of 7! He’s accomplished a lot throughout his life, and shared his wisdom and life experiences with us.
We tap into many topics throughout this discussion, from how Mark grew up, to what he taught his kids about money, his favorite books, and his views on productivity and retirement. Mark shares his views on “lean living,” which is a term he coined that was inspired by lean manufacturing and lean supply chains. Mark also shares some of the things he’s been doing to save money lately.
Mark talks about the concept of “race don’t chase,” which he has multiple podcast episodes on. The race don’t chase concept is from the business world, but heavily applicable to personal finance. Race don’t chase is the concept that when the market turns and things start going down, what you’re supposed to do is cut your expenses faster than your revenue drops. You race your revenues to the bottom of the market, so you can be profitable even when your revenues are going down.
Mark leaves us with some final wisdom and life advice to 1) tell the truth, 2) be kind, 3) save and do not fall into the trap that the things you have will bring your joy, and 4) give back. Mark has been podcasting for 15 years and also shared some great advice with us on podcasting.
Please listen to enjoy all that Mark has to share!
Show References
Manager Tools Website
The Effective Manager by Mark Horstman
The Effective Hiring Manager by Mark Horstman
Manager Tools Book Reviews
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
As we talk through the relationship between minimalism and money, we highlight a few key topics:
- We start with a few definitions of what minimalism is.
- Stuff costs money. Less stuff helps your finances.
- The difference between being frugal and minimalism.
- Minimalism combats the pressure of lifestyle inflation.
- Most Stuff does not create happiness, beyond a certain point of some basic life needs.
- For many people, more stuff actually creates stress and unhappiness, but you don’t realize it in the moment. Less stuff = more happiness.
- There are many benefits to having fewer physical objects in your life, and we share those benefits.
- Use this time to re-think what really matters in your life and try to be more intentional about what you bring into your life.
- We share a few recent articles that are connecting what’s happening in the world right now with the corona pandemic to leveraging it as a time to define a new normal and bring more intentionality into our lives.
Our top 3 takeaways for this episode:
- Frugality and minimalism are not the same, but being a minimalist will save you money.
- Realize that stuff doesn’t create happiness. And whether you realize it or not, the more things you have, the more time and money it takes to maintain them.
- Take this time in the world to re-evaluate what really matters to you, and decide the value you place on stuff and why. Be more intentional.
Show References
The Minimalists
Minimalism Documentary on Netflix
Becoming Minimalist - Joshua Becker
Courtney Carver Project 333
Article: The Minimalists - Renewed
Article: Prepare for the ultimate gaslighting
Ministry of Supply - Maggie’s favorite dress shirts
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
After we reminisce about how they first bonded at work, Maggie starts rapping a re-make of Missy Elliott’s Work It. Then we share our thoughts on net worth:
- Mike thinks net worth is so important that he covered it in every section of his book Your New Relationship with Money.
- Net worth is the value of all of your assets minus your liabilities.
- Tracking and monitoring your net worth to guide all of the big decisions in your life is one of the most impactful things you can do to improve your financial life.
- It’s important because it gives you a holistic view of your finances and gives you the visibility you need to make decisions that grow your net worth.
- We suggest tracking your net worth manually in excel and provide a net worth template below in the show links.
- The initial view of your net worth could be depressing to you, but it’s important to face the reality of what your net worth is or isn’t and then make improvements from there.
- Mike urges everyone to develop a “net worth mindset,” while Maggie just keeps singing her re-write of “work it” by Missy Elliott.
Our top 3 takeaways for this episode:
- Every decision you make about money comes down to one question: How will this impact my net worth?
- A net worth chart, reviewed regularly, enables you to make strategic decisions through intentional organization.
- Evaluate the dollar amount you are growing relative to your spending to determine if you are growing enough.
- Surprise 4th one! Net worth is the most important tool you have.
Show References
friends on FIRE net worth tracking excel file
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Episode Notes
Chris shares his story of how he learned about financial independence after getting out of pharmacy school. The Mad Fientist podcast was a game-changer for him, and he’s also been inspired by Mr. Money Mustache, JL Collins, and many more leaders in this space. Chris talks about humble beginnings, and how we grew up with a frugality mindset. This has also given him an appreciation for how far he has come with his family. Chris talks about lifestyle creep, getting his wife on board, and teaches us about barista FIRE and coast FIRE.
We really enjoyed our discussion with Chris from Inspire to FIRE. Please listen to hear more about Chris’s story. Check out his blog in the show-notes.
Show References
Inspire to FIRE website + blog
Follow Inspire to FIRE on Instagram and Facebook
Inspire to FIRE - How to use a roth conversion ladder for early retirement
Inspire to FIRE - What’s my FIRE number
Inspire to FIRE - How to prioritize your investments for FIRE
Mad Fientist
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start by sharing our college stories, which were very different from a financial perspective. Maggie went to the University of Georgia, had a full state-funded tuition scholarship, was given a smaller amount of money from her parents to help cover costs, and worked multiple jobs. Mike went to the University of Michigan, paid full-price out of state tuition, was given a very large amount in college savings from his parents, and did not work though he played on the lacrosse team which was a big time commitment.
In this episode we discuss:
- Is college worth it? Do you need to go to college to be successful in life?
- Is there any benefit to going to a more expensive or higher-ranked college?
- You should trust your gut and make decisions based on the reality of your kid(s) and their capabilities and unique needs. Even consider the ROI of a college investment and what your child is planning to do with that degree after college.
- How should you pay for college? There are scholarships, credits your kids can earn while still in high-school, loans, kids working during school, and more.
- How can you plan for it now? Save early by starting a 529 plan. Contribute as much money as possible as early as possible, so that it has as much time to grow as possible.
- Mike explains the pros and cons of choosing your own state’s 529 account vs. another. 529 accounts from different states and how that all works.
Our top 3 takeaways for this episode:
- College is worth it, so plan for it.
- But make sure the specific situation is worth it for your child: rank of school, cost of school, benefit for the kid, cultural fit, ROI of the cost of their education vs. what it’s going to help them with in life.
- Don’t saddle your kids with debt. This doesn’t mean you have to pay for your kids college, but you do owe it to them to educate them about their options, trade-offs, and what debt means.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Groceries are an expense you can control, while still eating healthy. There are many things you can do to save on groceries, and cut down your monthly grocery bill. We talk through our top tips for saving on your groceries:
- Believe it’s possible. Try different stores and you’ll be surprised.
- Track how much you’re spending so that you know where you’re at today, and then can measure and appreciate the progress you’re making!
- Plan ahead, make a list, and don’t go when you’re hungry or hangry.
- Consider where you’re shopping. Check-out Aldi, it’s cheaper and has some really great quality food.
- Be thoughtful of cost. Be flexible. Don’t just buy anything anytime. Focus on what fruits/vegetables are in season and less expensive.
- Don’t let your kids just put anything they want in the cart. Set limits. Teach them to check prices.
- Look at the price per ounce or per count on things - most stores mark it.
- Shop organic where it matters. Some categories it doesn’t matter in.
- Buy store brand where it makes sense. Most of the time it does.
- Don’t buy non-grocery items, like toiletries, at the grocery store unless you know they are cheaper.
- Don’t buy pre-prepared foods or pre-cut fruits and vegetables. They are incredibly expensive vs. the individual ingredients. Ask yourself if the convenience is worth it for you.
- Do not buy bottled water. It’s terrible for the environment too.
- Use everything. Don’t ever let anything go bad.
- Eat what’s expiring first.
- Freeze fruits or veggies about to go bad and then put in smoothies.
- Do the pantry challenge - only eat what’s in your pantry vs. going shopping for new food. You could likely eat for weeks on what’s in your pantry. There are some great websites for finding recipes for random ingredients you have (see show references below).
Our top 3 takeaways for this episode:
- Believe it is possible to spend less than you are now.
- Plan ahead through making a list, doing meal planning, now shopping while hungry,e tc.
- Pay attention to prices. Pay attention to what things cost per ounce, pe item, or at different stores.
Show References
https://myfridgefood.com/
https://funcheaporfree.com/
Pinterest is a great resource for free recipe ideas
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start out with a crazy frugal tip from a listener. Then we jump into the topic at hand. We remind people that money can buy you happiness, by having so much saved up that it buys you freedom and the feeling of confidence.
There are so many benefits to improving your finances. We cover the top 5 reasons we believe you should improve your finances and get financially fit.
1 - Being financially fit will improve your sex life. Let’s face it, if you’re overwhelmed by money problems, you’re not in the mood.
2 - Being financially fit will improve your mental health. Money concerns and insecurity cause stress. Stress impacts your mental health.
3 - Being financially fit will improve your physical health. See: #2
4 - Being financially fit will improve your self-confidence and self-esteem. You will have the financial cushion to see you through tough times.
5 - Being financially fit will make you happier. The feeling of freedom and options is one of the most amazing feelings in the world. Some people think that being frugal or saving money will require suffering, but if you spend some time really thinking about what makes you happy we think you’ll realize most of those things are tied to money.
You don’t have to be perfect. Making small changes and better choices everyday can have a positive impact on all of these areas.
Our top 3 takeaways for this episode:
- Money CAN buy happiness, but not in the way you think.
- Figure out what makes you happy. Figure out your why, perhaps it’s one of the reasons we covered today.
- Get more financially fit and you’re guaranteed better sex. You’re welcome!
Show References
Mostly Minimal Life blog post on Playing with FIRE book review where they introduce the idea to make a list of the top 10 things that make you happy.
Mostly Minimal Life blog post on How Noise Cancelling Headphones Make Me a Better Parent
Lots of articles supporting the idea that your finances and sex life are linked, from Huffington Post to Budgets are Sexy to Men’s Health
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mike and Maggie advise that everyone should live as if they’ve already lost their job, and then be delighted everyday that they continue to remain employed. A job can be taken away at any moment, for any reason. We all need to be emotionally and financially prepared for losing our jobs at any moment, especially now.
After Maggie shares a story about how one of her long-time heroes and mentors has been listening to their podcast, they jump into the topic at hand and share their tips:
- Start an emergency fund now. For the year ahead, we advise much longer than the typical 3-6 months. You should ideally have 1-2 years saved up. Yes, that may sound aggressive, but it will feel amazing to have that kind of an emergency fund in place. You’ll feel invincible!
- One way to double the size of your emergency fund overnight is to cut your living expenses in half.
- To create an emergency fund, you may need to adjust your lifestyle and expenses.
- Understand how much money it costs you to live off of. Create your bare-bones budget so you know how much you need in your emergency fund.
- Stop spending money now.
- Yes, you may want to support local businesses and that’s admirable, but if you do not have an emergency fund in place yet, then you should be supporting your family “business” before you support other things. We know this may sound unpatriotic or self-serving, but it’s the responsible thing to do right now. Put the oxygen mask on yourself before you can help others. An emergency fund is your oxygen mask.
- Start expense tracking right away, so you know where every dollar is going. Listen to our Expense Tracking Gone Wild Episode #15 for more detailed guidance and we offer a suggested template.
- Consider cancelling things you’ve already signed up for, it’s often not too late if you call within a few days of your credit card being charged.
- Cancel anything and everything you can. Then look through things again, and cancel more.
- Do some crazy frugal things you never considered doing to save money. Listen to our Crazy Frugal Stuff We Do Episode #17 for some ideas.
- Enable credit card notifications on your phone so you get a push message or text every time you have a credit card charge. It will make you more aware of where your money is going on a day to day basis.
- Make this your new motto: If I was unemployed, would I still buy this?
- Good news, you can do all of this and still be happy! People always think spending money makes them happy, but it’s just not true in the long-term. Buying things fills a temporary void, but it’s only temporary. Creating an emergency fund will make you happy in the long-term. We promise!
- Focus on getting yourself ready for a job hunt, just in case! This is always a good best practice. Use any downtime you may have to brush up your skills. Take some free online courses. A lot of companies have been recently opening up their online courses for free, such as all of Yale’s courses on Coursera.org. Get your resume updated and ready. Overall, just get mentally and physically ready.
Mike uses his 60 seconds on the mic to walk us through his bedtime routine. And then Maggie takes over as usual.
Our top 3 takeaways for this episode:
- Create an emergency fund.
- Stop spending money.
- Get prepared mentally and physically to lose your job. Be ready! Prepare for the worst, and then be delighted every day someone keeps paying you to do something.
Show References
Manager Tools website
Manager Tools RSS feed of their covid focused podcasts
Yale’s free courses on Coursera.org
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Mike and Maggie start with a listener comment about cars and safety and if people really care what you drive, and if that matters (hint, it doesn’t). We hope this episode will save everyone some money!
Mike + Maggie’s overall thoughts on each spending category:
- Cell Phones
- Mike has his entire extended family on one family plan and they settle up once a year. They use Cricket prepaid, on the AT&T network and pay $140 a month for 6 lines.
- Maggie’s husband uses verizon and recently went from paying $150 a month to $40 a month, thanks to Mike’s advice to switch to a prepaid cell phone plan. Greg got the exact same coverage with the same company and saved $1300+ a year.
- All of the major networks offer very similar quality and speed.
- The base service for a cell phone plan can be quite cheap, as low as $25-35 a month.
- The trick is to find and switch to a prepaid cell phone plan.
- TV
- Mike and Maggie both have not had cable for many years, and don’t miss it all.
- There are plenty of less expensive streaming services if you really need full access to network/sports channels.
- Maggie is paying for Amazon Prime and CBS All Access (just for Survivor back seasons), and has a free year of Apple+ Streaming.
- Mike has Amazon Prime (his sister is a credit card holder and you can gift free Prime to one other family member through that), Netflix and Disney+ (3 year deal).
- Maggie recommends turning streaming services on and off as you don’t need them all on at the same time. She will turn on HBO for a few months and catch up on HBO shows, and then turn it off and switch to another service and catch up on shows there.
- Look into getting a digital antenna. They are inexpensive and can often get you good quality on local network channels.
- Also, if you’re really feeling ambitious you could consider watching less TV. Mike and Maggie have slightly different views on if this should really be a goal.
- Internet
- Maggie is paying $50 a month for AT&T Internet. It suits their needs most of the time, but sometimes they get annoyed by a slower speed/things freezing.
- Mike is paying $95 a month for a gigibit of AT&T fiber internet. This is a splurge for Mike as it’s important to him and he does a lot of video editing so needs the speed.
Our top 3 takeaways for this episode:
- Do some research and understand what your options are, so you can make an informed decision.
- Prioritize what matters to you, and where you want to spend more vs. less.
- Consider turning things on or off and modifying your plans throughout the year.
Show References
Amazon Prime
Apple TV+ Streaming
Wealthfront
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Mike surprises Maggie with a Friday night phone call that turns out to be a podcast episode. Apologies for the poor audio quality on this episode. We are both quarantined and still working through how to record remotely.
For those listeners that don’t know, Mike and Maggie work for the same company and they work in the travel industry. Due to the impact of Coronavirus on the travel industry, they both got the news Friday morning that their salaries are cut 20% along with many other benefits temporarily stopped. Maggie rambles on various thoughts, as usual, and Mike does his best to keep them both on topic.
Mike and Maggie talk about the range of impacts on people, from losing just one paycheck to the impact on the FIRE (financial independence retire early) community. We share our impromptu thoughts and advice on how to handle what is happening right now:
- Be cautious about how you’re spending your money.
- Consider changing your habits now, in anticipation for what will be tougher times ahead for many.
- Prepare for the worst - act like you’ve already lost your job.
- Follow what’s happening in the world and in the economy, and ensure you’re educated to make the best decisions for you as possible. Do this without watching the 24/7 news cycle as that’s just too much and not healthy for most. Find the right balance of staying informed, but not getting obsessed with the news cycle.
- Practice gratitude. Find the good in what’s happening around you day to day. Notice and appreciate the silver linings of the things happening around you.
- Control what you can, and don’t dwell on the things that you can’t control. You can mostly control the way you’re spending your money.
- Do your best to get through what is a tough time for many people on many different levels.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Mike and Maggie share their thoughts on the coronavirus or COVID-19 pandemic. We share a number of recent social media perspectives that are shaping and influencing our own views on the impact this is going to have on our world and in our communities. We then dig into the the domino effect the virus has had on the global economy, first with travel. As people stop traveling, hotels and airlines start to suffer, but the people working for those companies suffer more. Many hourly and low income workers are being affected by travel bans, cancelations of conferences and sporting events. When those people stop earning, they stop spending, and that starts to hurt the economy. When these pauses in travel and events go on too long, people lose their jobs and companies fail. This is why a recession could be coming.
We share our thoughts on how we’re thinking about money and making decisions during this tumultuous time. It’s important to stay level headed and remove emotion from your decision making. Don’t buy all in, don’t sell it; think about your decisions and approach the market with a plan.
Our top 3 takeaways for this episode:
- The financially vulnerable and the working class are going to be hit hardest, and that can lead to a recession. We all have an opportunity to show empathy and sensitivity during this time, and also think about how we can help those in need in our communities and afar. This could be helping someone who is elderly in living alone or helping someone who is more financially vulnerable. Our point is, many listening to this may be losing money in the market right now, but that’s a very small thing compared to the impact this will have on the most financially vulnerable parts of our world.
- Do not panic buy or sell in the market. Try not to get too excited about the wins, or beat yourself over the losses. And definitely don’t gamble. Think through any decisions or changes you want to make in your investment approach, and make decisions with great thought.
- Use this as an opportunity to get more financially fit. It is more important now than ever. There are many things we can’t control during the days ahead, but the one thing you can control is how you’re spending your money. Use this as a time to get your finances in shape.
Show References
Social media posts mentioned:
- Rich and Regular’s post
- FIRE myself by 40’s post
Coronavirus offers "a blank page for a new beginning" says Li Edelkoort
Mostly Minimal Life blog post - Coronavirus and working remotely + kids out of school
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
The highlights of Andrew Kerr’s discussion on House Hacking include:
- There was a time when Andrew realized he was making great money, but hating life. That’s around the time he discovered real estate, and started doing house hacking. At one point Andrew owned 40 rental units!
- Andrew uses real estate to build his long-term wealth and get to financial independence.
- Andrew walks through the 6 types of househacking he’s defined:
- Roommate
- Income Suite
- Accessory Dwelling Unit
- Small multi-family (duplex, triplex, quad)
- Live-in Flip
- Work Provided Housing
- The six different types of house hacking can fit into different times in your life when they may be appropriate, for example when you’re younger the roommate style may be a different fit vs. when you’re older and have a family the income suite, accessory dwelling, or other styles may be a better fit.
- Andrew has been able to live for free and/or pocket money every year through his approach to house hacking.
Mike and Maggie also share a detailed update on their 2020 goals for the year.
Show References
Andrew Kerr’s website - https://fibyrei.com/
Househacking Podcast on Apple Podcasts
Andrew’s Ultimate Guide to Househacking
Follow Andrew Kerr on social media The Househacking Podcast on instagram and Facebook
Maggie’s weekly goal tracking spreadsheet (COMING SOON - check back soon for link)
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Sometimes we do some things that others might think are crazy, but we often wear these as a badge of honor. We hope you find some of these entertaining and thought-provoking. Getting frugal with things can be fun and let your creative juices flow!
Many of these activities are not just frugal, but they are also better for the environment.
- A dab will do it - People think they need way more toiletries type products than they do. You don’t need an entire pump of hand soap, you don’t need as much toothpaste as you’re likely using, you don’t need as large of a pile of face soap on your hand, etc.
- Cutting open toiletry containers to get product out of them - Maggie will cut open a shampoo bottle, toothpaste tube, face soap container, etc. and it allows her to get to all of the product that’s stuck inside and won’t come out of the normal packaging design. She often gets 10-20% more out of a product when she does this.
- Buying discounted gift cards - Mike buys discounted gift cards in advance when they are on sale or available for cheaper in bulk and keeps his eye out for sales. He will also double-triple dip and put the on a credit card he’s earning points/miles on, and sometimes even login through Rakuten (formerly eBates). He keeps a drawer full of the gift cards and saves 20% on average at many of these locations.
- Hair - A few ideas on hair-care:
- Cut your hair with a flowbee. Maggie’s husband does it!
- Cut your hair shorter to limit how often you have to get a haircut.
- Mike loves the great clips coupons. He won’t get a haircut until the coupon appears!
- Paper Towels - Maggie doesn’t use paper towels, because they are just silly!
- eBay - Mike looks for everything on ebay before he buys it elsewhere. He will buy a screwdriver on eBay from Hong Kong for 40 cents and wait 6-8 weeks for it to arrive by ship. He does this with little adapters, batteries, miscellaneous electronics, etc.
- Kids related items:
- Say No. This can save a lot of money, and show kids what’s important in life.
- Eat what’s going bad first from the fridge, to avoid wasting food.
- Always pack snacks and food on road trips, travel outings, or just out and about town, etc.
- Keep emergency snacks, water bottles, etc. in your car.
- Greeting cards for holidays - Maggie doesn’t buy greeting cards and instead usually makes them for people. Mike has a very unique approach and you’ve got to listen to really appreciate it!
- DIYing things - Cleaning your own gutters, mowing your own yard, etc.
- Pre-paying bills can save money, so always research and weigh the options.
- Maggie did a whole year of not buying any new work clothes. She’s considering doing it again in 2020.
- Public Library - Using the public library for books, audio books (using the Libby app), passes to free things in your area, DVDs, and much much more! Sometimes you have to be patient and wait for the book you want
- Controlling the temperature in your house - Keeping it a bit less warm in the winter, and a bit less cold in the summer. Put on a sweatshirt if you’re cold. Put on a tank top if you’re warm.
- Mike frequently calls to cancel his various services, utilities, etc. and pretends to cancel. They always transfer him to the retention department where he usually gets a discount.
- Maggie and Mike both eat free food at work if it’s around even if it’s not our first choice, and then we will save whatever we had planned on eating for another day.
Our top 3 takeaways for this episode:
- Question if something truly adds value or convenience to your life, and if you really need it. If not, don’t pay for it.
- DIY, bring yourself, reuse, etc. to save money.
- It’s OK to be a little eccentric. Do it and be proud!
Show References
Paper Towels are Silly on Mostly Minimal Life
eBay
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We start the episode with a discussion on how delicious Maggie’s chocolate protein smoothie is. For those in suspense, the recipe is frozen bananas, chocolate protein powder, and soy/cashew/almond milk. Maggie’s entire family loves it! Mike is underwhelmed.
401ks are tax-deferred savings accounts, which means contributions reduce how much of your income is taxable today, delaying your tax bill to the future when you withdraw it. The idea is you save money now, it grows, and then hopefully you’re in a lower tax bracket in the future.
Mike + Maggie’s overall advice on 401ks is:
- At the bare minimum you should be putting in the % that your company matches. Most companies provide a specific percentage 401k or 403b match to their employees, and it’s a huge benefit that companies offer. At the very least, you should be putting in the % your company matches, or you’re leaving money on the table that is meant to be part of your compensation package from your company.
- Even better is to max it out to the IRS limit, which is $19,500 in 2020 and typically increases each year.
- The younger you are the more important it is to put money into your 401k as it’s going to grow more over time. If you think you can’t hit the max, think about where your money is going and consider challenging yourself to limit your spending so you can afford to put more into your 401k. This is a great example of delayed gratification.
- The myths of 401ks:
- That you can only put in what your company matches. Not true. You can put in up to $19,500 in 2020 if you’re in the US.
- That you should have a specific balance by a certain age. Not true. Listen and we’ll share why.
Other topics we cover on this episode:
- Be careful about the timing of how you’re hitting the maximum amount vs. how your company pays out their match. Most companies pay out the match per paycheck, so if you max out your 401k before the end of the year you could be missing out on the company match for the last paychecks of the year after you hit that max.
- You can access and withdraw your 401k funds at the age of 59.5. If you withdraw before the age 59.5, you’ll pay a penalty. If you withdraw after that age, you’ll pay an ordinary income tax as you’re pulling the money out.
- The difference between 401ks and Roth 401Ks. You’ll have to listen to this episode to get the details on this one.
Our top 3 takeaways for this episode:
- Participating in a 401k at the amount your company matches is the absolute bare minimum you should be doing.
- Try to max out your 401k to your IRS limit and start now as the younger you are the better. Sacrifice now for the future. It might feel hard, but you can’t do it!
- 401k is just one piece of your overall financial journey. A 401k alone is not going to get you to financial independence, but it is one key piece.
Episode Summary
On this episode Mike and Maggie address their #1 requested topic so far: expense tracking! We talk about how what gets measured gets better. And then we break down the specifics of how we each approach expense tracking. Money doesn’t need to be a taboo topic, so we also encourage you to share your expense tracking through monthly reviews with a friend, partner, or spouse. After listening to our thoughts, click the link below to get your very own customer friends on FIRE expense tracker!
Episode Notes
This is our most asked topic, and we share a listener question from Leah that many people can relate to. Mike shares that he’s been tracking his expenses in a detailed way for decades, and Maggie talks about how much detailed expense tracking made her more aware of her spending and improved her spending habits. What gets measured gets better! Also, having peer accountability with Mike was incredibly helpful.
Mike and Maggie each share the specifics of how they track their own expenses. They both use a basic excel template to manually track all of their expenses, and then summarize them into categories. There is value in tracking things down to the penny and being able to visualize what you’re spending. Mike saves his physical receipts and/or notes on expenses, and logs them in at the end of the month. Maggie uses Mint to capture all of her expenses from various accounts, vs. saving real receipts, and then manually logs them into an excel sheet 3-4 times a month. She really enjoys seeing the progress throughout the month. But make no mistake, it’s a tedious and boring process. But that’s the purpose: to change the way you view your expenses. Click the link below to get your very own custom friends on FIRE expense tracker!
Getting in a routine of doing this makes it easier from month to month, and eventually you’ll get excited to review your progress at the end of each month. Accountability is one of the most important pieces of the process. You’ll get the biggest impact by reviewing your expense tracking with someone else and getting their feedback. Review it with somebody or even send it to us!
Mike shares advice that “whoever controls the number controls the narrative,” and how detailed expense tracking can also help with getting a spouse or others on board. When they see the numbers of where things are going it can really help.
We close out this episode with a riveting discussion on whether beanie babies still have any value!?
Our top 3 takeaways for this episode:
- Track every expense, by category and by month.
- Look for savings opportunities in every category you are tracking. Choose a few each month to focus on, or if you’re an overachiever focus on them all at once!
- Review it with a friend or a partner. Hold each other accountable, and be vulnerable and transparent during the reviews.
Show References
friends on FIRE Spend Tracking Excel Sheet
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Episode Notes
Maggie starts off by reading some listener messages, and then we dig right into taxes! Mike talks about how he “loves” taxes and uses it as an opportunity to wrap up his fiscal year, whereas Maggie just files her taxes because it’s the law. Mike and Maggie share how they first got to know each other at work by talking about taxes, which means Maggie goes to the finance guy at work for tax advice even though that’s not remotely close to his real job.
The topics we cover include:
- Tax Brackets - Mike explains our marginal tax bracket system in the US, which I’m sure you’ll find fascinating.
- Taxable Income and different ways you can reduce your taxable income, through tax credits or tax deductions.
- Deferred Compensation Plans
- Capital Gains Taxes
- How to file your taxes - DIY vs. using an Accountant. Why you should do your taxes yourself. The biggest myth is that your personal situation is too complicated to figure out, but for the majority of people this just isn’t true.
- How you can optimize your tax situation in 2020 - Understand what benefits are available to you within your company, your investment strategy and being mindful of short term vs. long term capital gains.
Our top takeaways for this show are:
- You need to understand your taxes.
- Most people should be doing their taxes themselves.
- Reducing your taxes is a key to financial independence. Pay as little tax as legally possible because it accelerates your financial goals.
Show References
Turbo Tax
2020 Tax Brackets (IRS)
Capital Gains Taxes (IRS)
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We are back in Mike’s closet recording this interview with Adam. We first explore what guys actually talk about, but Mike and Adam couldn’t quite answer that one.
Adam shares his background with us, and why he made some of the career choices he did over the years. After a number of years working in government and Corporate America, Adam made the leap to pursue his passion in photography as a career path.
Adam shares his view that a lot of people are “just fine” in their jobs and lives, but may want something more. The way Adam treated his finances gave him the financial cushion and freedom to make a big change in his life. It also helped that his wife had a steady job that provided them solid insurance.
Adam talks about all of the items he considered when starting his own business, from start-up costs to equipment to business insurance. He also said he went into this career change knowing he would make less money than he did in his corporate jobs, but he was okay with that. His income now can fluctuate from year to year, but he plans his finances accordingly.
We discuss a number of other topics with Adam:
- How he got into instagram and now has over 100K followers, and the importance of differentiating yourself and being authentic.
- He suggests having a “no thanks” fund so you can afford to say no to certain things if they don’t bring you joy.
- How much time he spends hustling for new clients vs. doing the work itself.
- How your initial dream and vision might adjust as you learn more about things and start to explore your passions.
Show References
Adam’s Instagram Page
Adam’s Website
Matt D’Avila’s YouTube Video - The Three Year Rule
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
This is the first friends on FIRE episode recorded from Mike’s master bedroom closet. Apparently the acoustics in closets are supposed to be ideal for recording. You’ll have to tell us if that’s indeed the case.
We interview our five kids ages 3 to 11, and our goal was to interview them to either validate or invalidate our views on how our lifestyle and money decisions impact their lives and happiness. Their answers range from funny to inspiring to confusing.
The cuteness factor of this episode is definitely the highest of all friends on FIRE episodes. We hope this teaches you that you can raise happy and healthy kids on a budget!
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Rebecca calls in to share a neat “jar system” she does with her child. We love this tip and thank you for sharing!
We then get into our suggestions of how you can be very thoughtful with how you spend your money and at the same time teach your kids lessons about what’s important in life. This requires a little more discipline and thought, but it’s attainable. The topics we cover include:
- Controlling the stuff you buy for your kids. Mike shares about his trips to Target with his kids.
- Get good at saying no to your kids.
- Set an example for your kids on what’s important in life. Show your kids what’s important to you and teach them about limits. You are the adult. You set the example and make the decisions, not your kids. We think some people forget this. Holding your kids to the same standard that you set for yourself.
- Teach your kids that they don’t need stuff to be happy. We know this isn’t easy, but it’s possible.
- Have open and honest discussions with your kids about money.
- Clothing and how much kids really need in terms of clothing.
- Toys and how much toys kids really need.
- Books and leveraging the public library.
- Eating out with kids.
- Activities with kids.
- Education for kids.
- College for kids.
Our top takeaways for this show are:
- Talk to your kids about money.
- You’re the adult, and you’re in charge. You can say no to things. You can set boundaries.
- Our kids have a lot to be thankful for. They aren’t suffering because of how we limit their spending and decisions. There is real suffering happening in this world, and it’s not related to any of the limitations or things we’re talking about here.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We start off by addressing a call-in question about about getting random stock tips from friends and family. You’ll have to listen to hear Mike’s advice on this one, and Maggie reminds people insider trading is illegal.
Mike + Maggie kick off the car insurance discussion by disclosing what they are each paying for car insurance:
- Mike uses Amica and his car insurance is paying $1440 for a 2003 Ford Explorer and 2014 Ford Edge.
- Maggie uses AllState and her car insurance is $2900 for a 2016 Toyota Prius V and 2011 Prius.
Mike shares how insurance companies calculate insurance costs and his thoughts on how much insurance you really need. Insurance is to protect you from the big catastrophic loss, not the little stuff.
Our overall recommendations on car insurance are:
- Ask yourself what you’re really protecting yourself against with your insurance. Understand the detailed costs and breakdown of your insurance costs so you can make an informed decision of what you need and want vs. not.
- Shop around every few years to make sure you still have competitive rates.
- Do not pay for services you do not need. For example, almost always choose the highest deductible. Pay upfront to get the additional savings vs. paying monthly, quarterly, etc.
Other topics we cover on this episode:
- Maggie shares a very long story about Don at Progressive and what a lovely experience she had with him as he prices out some competitive insurance. Progressive recommended they have much more limited coverage on Maggie’s older car given the value.
- Consider USAA if you’re eligible or have any family members that were in the military that could provide you eligibility.
- Mike shares some of his favorite TV shows.
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We start off by addressing a call-in question about how people earlier in their careers and starting out their lives can balance saving for retirement while also trying to save for a house, prepare for kids, and more. You’ll have to listen to hear our thoughts on this one!
Mike kicks off a discussion with cars by sharing a story about his grandfather who used to work for Ford, and reported to Henry Ford directly. Mike and Maggie then share what kind of cars their families drive:
- Mike drives a 2003 Ford Explorer and his wife drives a 2014 Ford Edge.
- Maggie drives a 2016 Toyota Prius V and her husband drives a 2011 Prius.
We discuss how cars are very expensive to own and operate, yet there is very little difference in their utility between an inexpensive car and a really expensive car.
Why are cars the worst? To clarify, we mean they are the worst financially.
- Depreciation. Some people claim cars are investments, but an investment is something that appreciates over time. Cars instead depreciate over time. Always and quickly.
- The way most people buy cars is very costly. People often lease or finance cars, and often ones they can’t quite afford. Financially speaking leasing is costly idea. We discuss a number of different expert’s points of view on how much you should spend on a car, from Dave Ramsey’s (your car should not total more than half your annual income, only pay cash for a car, and never buy a new car unless you have a net worth over $1M), to the Financial Samurai (only spend 10% of your annual income on a car).
- If you have a more expensive car, a bunch of other related costs are also magnified, from maintenance to repairs to insurance.
Mike + Maggie’s overall advice on cars is:
- Stop caring because nobody else cares about what you drive. Check out Accidentalfire’s Instagram post re: what you think people are thinking about your car vs. what they are really thinking.
- Be honest with yourself about why you want a certain car.
- Buy something that’s modest, preferably used, and pay cash.
Other topics we cover on this episode:
- Consider thinking about how much longer you will need to work to cover the cost of the type of car you want to drive.
- Maggie and her thoughts on Maseratis, and how nice cars make her nervous.
- Mike talks about his 2003 Ford Explorer, a lot.
Show References
Accidentalfire’s Instagram post re: what you think people are thinking about your car vs. what they are really thinking.
Playing with FIRE book
Playing with FIRE documentary
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We have a great conversation with the Retired Toddlers, Michelle and Jake. They have a unique and unconventional approach to early retirement, with the idea of retiring while their kids are young to be able to travel the world and enjoy quality time with their young kids. You can always work later! They talk about how they have prioritized their spending on travel, and how it still might surprise people how much they save by not having a house, cars, utilities, insurance, trips to Target, etc. and all the other typical life costs. Jake shares a meaningful conversation with his mom that prompted some of their decisions to change their lifestyle.
Prior to making the decision to travel full-time, they had always lived their lives in a financially responsible way and it set them up for this journey they are on. For example, they only had one car when they lived in Tampa and it worked well for them (they also admitted they don’t care about cars). Michelle and Jake share their views on keeping up with the Joneses and lifestyle inflation. They’ve never felt like they need to keep up with others as they have their own desires and ambitions.
Michelle and Jake share some insight on how they travel and the financial aspects of their travel. They define themselves as comfort travelers vs. budget travelers. Their monthly travel expenses can vary from $5K a month to $10-15K for some more expensive trips. They have a good mix of being more budget conscious and splurging. It’s all about value to them, which isn’t always cheap.
...and they are still saving for retirement and prioritizing that along the way!
One of our favorite quotes from the Retired Toddlers is that “you don’t have to wait to live your life until you’re older, have more money, etc.” Their decision to make this move while their kids are young has been reinforced so many times throughout the past few years. They also gave some advice to “treat travel like a lifestyle.”
Show References
Retired Toddlers on Facebook
Retired Toddlers on YouTube
Retired Toddlers on Instagram
Retired Toddlers website
Follow friends on FIRE
Leave us a voicemail or text us: 404-981-3370
eMail us at: friendsonfiremm@gmail.com
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
We spend a bit more time talking about flowbee. Maggie shares her theory on how she injured her shoulder (spoiler - link in show notes). More importantly, we talk about the importance of setting goals.
We debate the quote around “what gets measured gets done” or whatever that quote might be. You get the idea! Our new quote is “what gets measured gets better” -friends on FIRE.
We discuss the SMART goals framework. Ideally, your goals should be Specific, Measurable, Assignable, Realistic, and Time Related (that’s SMART). There are a few versions of what SMART stands for out there - don’t get too hung up on the specifics, just set some goals that are specific, measurable, and time-bound.
We also discuss the importance of discussing goals with your spouse or partner. Getting your partner on board with your goals is likely the most important part of achieving your goals. But in the case that you aren’t aligned, don’t let it be an excuse to what you can personally control.
Maggie and Mike both share their 2020 goals.
Mikes 2020 goals are:
- 20% Spending Reduction (Maggie’s unsure how Mike can do this given his expenses are already pretty streamlined, but Mike thinks it’s possible)
- 15% net worth growth
- Read 10 Books
- Be a better vegan (Maggie is super excited about this goal!)
- Get more into minimalism (Maggie is also excited about this goal!)
Maggie’s 2020 goals are:
- 15% Net worth growth
- Live off of 25% of her salary and not dip into savings to augment her lifestyle
- Read 11 Books (because of course she wants to beat Mike)
- Spend more quality and focused time with her kids and husband (with phone off)
- Meditate 260 times (5X a week on average)
- Write a blog post once a week for Mostly Minimal Life
- Post a new podcast once a week for friends on FIRE
Other topics we cover on this episode:
- How much fun it can be to set goals with your friends! (Half-sarcastic, half-serious)
- Maggie admits she hasn’t set enough financial goals over the years, but this year she is setting specific financial goals!
- Mike invites Maggie to come and walk through his house to do a minimalism audit (or perhaps Maggie invited herself over, it’s unclear).
- We compare tracking calories to tracking your finances. Tracking things that precisely definitely helps your awareness of how things are moving along.
Show References
Weighted Blankets on Amazon
The specific weighted blanket that Greg got Maggie for Valentine’s Day. Maggie highly recommends it. Sometimes she even Meditates under this blanket, and she believes it enhances the meditation.
Rich + Regular’s Eat Better on a Budget
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
We talk about our priorities and the purpose behind finding financial freedom. We share what we would do with more freedom in our lives. Maggie would spend more time with her family, more time outdoors, more time giving back to her community, and traveling. Mike would spend more time on his hobbies, with his family and kids, and traveling. Ultimately, we would spend more time doing the things that bring us the most joy, and leading slower more focused and present lives.
We talk about the importance of figuring out your financial independence number. And better yet, figuring out your savings rate and annual expenses, and thinking about how many years of expenses you need to save each year. When you start to break down your savings and expenses per year this way, it can further motivate you to save more and spend less, and move you along on a journey towards financial freedom.
Other topics we cover on this episode:
- The exercise from playing with FIRE of writing down the top 10 things in life that make you happy.
- Why Maggie can’t finish a thought.
- How freedom is one of the things Maggie values most in life.
- We both look at our net worth when we are stressed out in life. It reminds us we have other choices in life.
- Confidence that when and if we need to get other jobs again we could.
Show References
Playing with FIRE book
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
Mike talks about his new $48 REI jacket and clarifies how saving money works. Maggie admits her biggest financial regret over the last two decades was saving a lot, but not investing and growing her savings.
If you’re overwhelmed by the choices and complexity in investing options, we encourage you to simplify things and just do something now. Like now-now. Like stop reading this, and go make some changes. If you don’t know where to begin, then open up a Wealthfront account. Ok, after that come back and keep reading or listening.
Mike explains how compounding growth works. You’ll earn returns upon your returns upon your returns. Which is why it’s important to start investing early on, even if just smaller amounts.
We talk about the importance of taking advantage of your company’s 401k match, and even better max out your 401k if you can afford to.
Other topics we cover on this episode:
- Investing in the stock market. Mike talks about ETFs (exchange traded funds).
- When overwhelmed by options, just do something broad and diversified now.
- You need to save money so that you have money to invest. You need to know your level of lifestyle expenses so you know how much money you need to grow to sustain your lifestyle.
- Why we would never ever ever invest our money through a financial planner that charges an ongoing % of your annual assets invested through them.
- A little friendly competition - Mike and Maggie are going to each invest $5,000 for 90 days and see who’s investment does better. We’ll provide check-ins on progress at 30, 60, 90 days. We have no idea what the winner gets, so if you have ideas let us know.
- Comparing cholesterol to 401k performance, and which you’d rather have performing well.
- Maggie finally stumps Mike on the “Mike’s minute on the mic” question, as Mike answers with an “it depends” answer.
Show References
Wealthfront
REI
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book:
Your New Relationship with Money
The first pillar of FIRE (Financial Independence Retire Early) is spending less money so that you have more to save and invest. But spending less money doesn’t need to mean being less happy. The key to finding freedom is finding the level of spending that makes you happy and keeps you financially independent.
Maggie talks about the flowbee for a while, and Mike questions if people want to hear Maggie talk about flowbees.
We talk about identifying the categories of things that are important to you and avoiding lifestyle inflation.
Find the few things that you’re really passionate about and spending on those things. Identify the things that don’t add value to your life, and cut them out. Figure out the level of sustained happiness that can carry you for the rest of your life.
In order to spend less, it’s important to track your spending and truly understand where every penny goes. Only then can you improve. This is really critical. Track your expenses and get into the mindset that this is something you want to measure and improve. Maggie talks about getting a no-spending high when she’s tracking her expenses.
Over time and as you make more money, you’ll want to increase your spending. A bigger house, a nicer car, more luxurious travel; it will never end and you’ll always want more. Recognizing and avoiding lifestyle inflation is a key factor to retiring earlier in life.
Other topics we cover on this episode:
- You can be happy and spend less in your life.
- The inverse relationship between stress and spending money.
- The motivation behind why you want to save money.
- Whether money can buy happiness or not.
- Maggie cleaning her gutters herself.
- Maggie continues to make Mike lose his train of thought.
- Mike talks about Black Friday and how he capitalizes on a company’s need to meet their year end revenue goals.
Show References
Playing with FIRE book
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
FIRE is a journey toward freedom. It’s not just about “retirement” as many people think of it, or not doing anything. FIRE is the freedom to pursue your passions and not need certain type of job or paycheck to maintain a certain type of lifestyle. Finding freedom takes a lot of work and for some, and may be easier for others. The key pillars are the same regardless of your financial situation - Spending Less, Growing Wealth, and Finding Freedom.
The journey is different for everyone, as is the destination. Mike’s approach is technical, methodical and measured. Maggie’s is driven by minimalism and frugality. We both believe that controlling lifestyle inflation is the key to financial freedom and happiness. There is a way to go about a very happy life without spending 100% of your income. Parts of that can become isolating at times, but there are ways to get past that. Talking with your friends about money and the idea of financial freedom can help us all along our journeys, and we talk about how it has helped both of us. We also debunk the myth that happiness is tied to having more stuff.
We break down the 4% rule that many people believe is the key to retiring early. The goal is to get to 25X your annual spending amount, and then withdraw 4% each year. We think this is a bit aggressive, and we personally take a more conservative approach with higher savings goals. We talk about whether you include your house net worth in the math, how to think about retirement funds, and more.
On “Mike’s minute on the mic,” Mike talks about his biggest financial regret.
---
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Having stuff and spending money is a way for people to show their value to society because personal success equals financial success and stuff equals financial success. Dig into that a bit and there’s really no connection between spending money and being successful or having value.
There’s some sensitivity around money because it’s complex. Not understanding how finance works can create a barrier for people to discuss money. But only when you talk about it, ask for help, and believe you can learn, do you grow past that barrier.
Being frugal and embarking on a FIRE (Financial Independence Retire Early) journey can be isolating because a consumer-culture promotes spending, not saving. But when you discuss money with your friends, you find that you’re not alone in your thinking, and together you can improve your finances through talking about money together.
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
Opening up with your friends about money creates stronger bonds because of the shared vulnerability that is displayed. Sharing what can be intimate details of your spending also sheds light on what’s truly important in your friends’ lives. Talking about money with your friends creates trust, accountability and stronger bonds.
Not talking about money can mean living in a bubble, failing to learn, grow and develop stronger financial skills. And you can miss the opportunity for stronger friendships.
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money
An introduction to friends on FIRE, a new podcast launching January 1, 2020. It's a 🎤on a mission to get friends to talk about money. Hosts Mike + Maggie are two friends on their own FIRE 🔥journeys. Join them on a fun and informative podcast about personal finance.
Follow friends on FIRE
Leave us a message: 404-981-3370
Visit our website: www.friendsonfire.org
Other Links
Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money