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In 2021, I decided to stop doing annual updates.

At that time, I thought I had FI figured out and was just living a “normal” life (so no need to talk about it anymore).

Well, a lot has changed since then!

Turns out, I didn’t have everything figured out :/

I explain more in today’s short podcast episode:

Listen Nowhttps://traffic.libsyn.com/secure/madfientist/eighth-year-of-freedom.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Highlights* How the pandemic changed my outlook on the future * Why my post-FI life is drastically different from what I imagined it would be * Learning how to use money for the first time * The reason I’m focusing more on other investments (and what those investments are) * Why stock picking isn’t great, even when your stock picks outperform

Show Links* First Year of Freedom * Second Year of Freedom * Third Year of Freedom * Fourth Year of Freedom * Fifth Year of Freedom

Full TranscriptMad Fientist: Hey, what’s up, everybody. Welcome to the FInancial Independence Podcast.

So three years ago in 2021, I decided to stop doing my annual updates. And if you’ve followed the podcast for a while, you know every year since I left my job in 2016, I’ve done an annual update talking about what I learned over that last year.

And when it got to 2021, I felt like I was really just living normal life, and I was getting bored making the annual updates because I didn’t really think much had changed. And I didn’t know if I was actually giving any sort of meaningful advice to anybody by just talking about what I had been doing for the past year.

So I decided to stop doing them and it’s amazing how much has changed since then.

So one, I don’t have it all figured out and I’ve learned a lot over the last three years, so I figured I could share what I’ve learned over those last three years and maybe start doing these annual updates again if I continue to learn things, but I’ve also realized that things are going to get really weird with AI over the next decade, and content is going to be able to be created instantaneously by computers.

And really the only thing I have is my human story. And that’s the most important thing. And my unique experiences that I can share and the lessons I learn through actually living this sort of lifestyle.

So both of those things combined made me realize that, Hey, I should maybe do another one of these at least. And then maybe continuing to do these in future years if I have some interesting things to share.

So anyway, so this is my eighth year of freedom post, and I can’t believe it’s been eight years. That’s absolutely insane, and it was actually August 1st that I left my job, but I’m not really on a good schedule these days, and so this is over a month late.

But hey, better late than never.

Anyway, I hope you enjoy it, and this is valuable lessons from my eighth year of freedom.

So the biggest thing since 2021 is really that I feel like I’m actually using money for the first time. My entire life has been saving money, investing money, hoarding money pretty much.

And I don’t think I’ve ever even tried to use it because using it was always the last resort. And if I was using it, that was a mistake because now that money can’t grow anymore. And it’s been a huge mental shift to now try to use it when I’ve just spent my whole life accumulating it. It’s been a lot of fun and I have a article coming out soon, if I can get around to writing it, talking about learning how to spend and actually enjoying it while I’m learning how to do it. And I think that’s been the biggest change. And particularly we bought a house last year. Our last house, I think we sold in 2014 and we’ve just been renting ever since and renting has been great.

But now that we have a son and we want to settle down and we don’t want to have to move every year if we don’t want to. I know my wife never wanted to move every year, but I was always keen to try something new. But now that we have a son in the picture just having a stable place that we can put all our stuff, and as parents out there know you have a ton of stuff when you get a kid, because grandparents just keep buying them stuff.

So we decided to buy a house and that’s been a great purchase. And this is actually the third house we’ve owned. We owned a house in Scotland back in 2005, and then we bought a house in Vermont in 2011. But this is actually the first house that I’ve enjoyed owning.

For anybody on the path to FI out there who is like me and was just like very motivated to get there as quickly as possible, I don’t think I should have owned houses back then, because any unexpected expenses that came up, I would stress about them and yeah, owning a house is nothing but unexpected expenses. So I think yeah, if I was doing it again, I’d probably rent most of the time that I was on the path to FI and then buy after because now I can actually enjoy it and I am enjoying it. It is a luxury. It is a splurge and it’s a great splurge because I’m talking to you from my perfect home studio that I’ve spent months and months designing and building. And I love it so much. And yeah, if I was as tight with money as I was back in my FI days, I wouldn’t have this studio. And I would have been stressing about all the unexpected expenses that have already popped up over the last year and a half.

So homeownership has been amazing. And again, if you would have told me this eight years ago that I’d want to be a homeowner again after the horrors of my previous two homeownership stints, I would have said you’re crazy, but that just shows how much changes as you get older and as your priorities change.

And the other big thing that I would be surprised about back then that I am loving now is stuff. So even though I just was talking about being overwhelmed by too much kid stuff, buying stuff for the house has been a lot of fun. And it adds to my daily joy. So yeah, I didn’t think stuff actually increased my happiness, but it really does.

And I think it’s mainly because I’ve gone so long without any good stuff. So as we were renting, we would always have furnished rentals. And since we moved so often, I hated packing up boxes and moving. So I just limited the amount of stuff I had. So that was, that just meant that we used, all the rental house’s kitchen stuff, and whatever TV was on the wall and sound system was there, we just used that.

But, now that we have our own home, and we know we’re staying here for a while, I bought nice things that I really do enjoy. So anything from, the coffee grinder that I’ve talked about many times on this show and other shows, to just like really nice mugs, to a great sound system for the TV and speakers in every room that make music sound so good and I can just turn it on instantly and just have music following me around the house.

And then obviously the studio is just kitted out with everything that I’ve ever wanted. Speaking of the studio, I’ve set it up so that I can do a video from here now. So if you want these podcasts to be in video form in the future, go to madfientist.com/youtube and follow me there. And if I get enough YouTube followers, I’ll start to make the efforts to do video, which would require me to actually shower before recording these, which today, that did not happen so I’m glad this one’s audio, but. If I get enough followers on YouTube, then I’ll start doing these in video and I’ll give you a little tour of my home studio, which is incredible. So go to madfientist.com/youtube to follow me on there.

So those are two big changes, my love of home ownership and love of stuff.

But going back to the initial point where I’m actually using my money for the first time, I realized that’s a big mistake I made on my journey to FI was just disregarding the fact that actually one day you are going to spend your money and if you’re not really practicing how to spend it you’re not going to be that good at it.

So this has been like a three year journey of trying to get better at spending money and trying to reframe it as something that does get used and you use it to increase the happiness in your life. And the one thing I keep saying to myself is something that I heard in the Die With Zero podcast that I published a few months ago with Chris Hutchins.

And that’s when Bill Perkins said, when’s the party? And I keep saying that to myself in my head, because that’s true. When’s the party? Because even if you don’t spend your money, you’re going to give it away at the end of your life. So there’s a party at some point and somebody who’s going to benefit from it.

So you can either use it during your life and give it away during your life or at the end of your life, it’s all going to be given away and somebody is going to have a party and it may be a charity, it may be your heirs, if you want to be a part of that party, then you need to figure out how to spend it or give it away during your life.

And that’s something I’m really focused on.

So in that same sort of vein as, using money for the first time, I feel like this is the first time I’m appreciating all my past investments. It feels like all my investments are really paying off. So for example, like to buy this house I used my portfolio to do it and that was just eye opening because you’re saving for FI and it’s all just this theoretical thing.

It’s not like you all of a sudden take out all your money, give it to the FI person and they give you all the freedom. It’s not like you’re actually using it to buy freedom. You are obviously, but you’re not clicking a button to do it. It’s just a theoretical thing like, okay, yeah, my bank account says I have this much in it, so now I don’t have to work anymore.

But it doesn’t really feel like you’re utilizing that money. Whereas when I bought the house, I did just do that, which I clicked a button and pretty much bought a house, which is a crazy transaction that I’m going to write an article about in the future as well. Hopefully next year. Cause it was just the most insane amazing financial transaction I’ve ever completed in my life.

So anyway, so that was like the first time I was like, Whoa, okay. So yeah, I did save up a good amount of money and it can be used to buy amazing things like this big stone house in the countryside. But I also feel like, other investments are also paying off. So my focus on health over the last decade and now I’m in my early forties and I still feel like I’m 20 and I’m very thankful for that, especially having a little toddler to chase after and pick up and throw around.

So I feel like, yeah, those past decisions are starting to bear fruit and, like my friendships I get to go home to the States and see some great friends that I’ve had for decades. And we pick up exactly where we left off. And it’s we’ve just never stopped hanging out, which is fantastic.

My 22 year investment in my relationship with Jill has made it possible. greatest human to ever exist in the entire history of humanity. So that investment is paying off in ways I wouldn’t have even imagined. And so it’s making me think of my future investments. And now the money investment is all on autopilot and locked down, and I’m not worried about that, it’s focusing on those future investments.

So again, maintaining health. So that’s a huge focus because I am an older dad, but I don’t want to act like one. So I want to be playing ice hockey and skiing with my son and hopefully doing it for the next 40 years rather than just the next 10 or 20.

So health is a huge focus. And I know that investment pays off, but it’s one of the most important ones, so that’s the one I’m focusing on most.

I’m trying to think about ways to increase the investment in my friendships that I’ve built over the last few decades and figuring out ways that maybe money can help that by maybe, renting an Airbnb where my friends live for a month and just being there rather than just coming into town for a week and seeing everybody quickly, just like actually living there for a little chunk of time every year so that we can just pick up where we left off and continue to build those relationships that I value so much.

And then the biggest investment, investing in my son, which has already paid off in so many ways and has been the biggest gift of FI, being able to be there and spend all this time with him and all this quality time as he’s been growing up and to be there for all the big milestones. So to continue investing in him and enjoying every minute of it along the way.

So again, it’s thinking about ways that money can contribute to that and help that. So rather than focusing solely on the money investment, I’m again, trying to reframe it and think about how I can use money to increase these other investments that are far more important at the end of the day and are the ones that really bring a lot of happiness.

And the other big thing that I’ve been thinking a lot about over the past few years is something I think the pandemic taught me, and that’s, there’s a risk to putting things off. And I think back pre pandemic, I always just thought yeah, I can save all this money and then in a few years I’ll do this.

But the pandemic showed us that, this period of health and peace and free travel, we’ve taken it for granted because it’s all we’ve known and that’s not guaranteed to continue.

So when I think about whether we should take a trip to the States this spring, or if we should just put it off to the summer or fall. I’m less inclined to put things off these days.

And I think, yeah, the pandemic was the thing that really brought that to the forefront of my mind. We were trapped in Scotland for a couple of years and I couldn’t see my family and friends and I couldn’t do the things that I wanted to do and we couldn’t travel freely. So that’s been another motivation to use my money more now, rather than letting it sit there and accumulate more so that I could use more later.

So those are the real big things that have been at the forefront of my mind over the last few years, since my last annual update, and it is a huge mindset shift. But it’s one I needed to have, and I’m glad that I’m having it, and I’m glad I’m in the position that I’m in to enjoy it while it’s happening.

So a lot of the future content I have is going to be based around that. So again, I’m going to have a big article about learning how to spend, because I’ve learned, I think my list is up to 14 things that have really been helpful in that regard. So I’m going to publish that soon, hopefully. I’m also going to do a Perfect Life version 2.0. I have a post called The Perfect Life that I wrote even before I reached FI and I haven’t read it because I want to read it right before I write this new post, but it’s going to be funny to go back to that and see how different I’m living life now than I imagined I would have lived it back when I wrote that article and it’s going to be fun to write a new version of it to see what the future perfect life is going to be looking like now that we can build exactly the life we want. And I feel like we’re doing that and we’re getting very close to our ideal lifestyle, but here we are eight years in and still experimenting a lot and still trying to figure it out. So it’s, yeah, it’s definitely not as easy as you assume it would be.

So the only other minor thing I wanted to chat about is stock picking because, it’s obvious what the downsides to stock picking are when you’re wrong, you lose money or you make less money than you would have if you weren’t trying to pick individual stocks, but I just wanted to touch on two success stories that are still not ideal. So even if you pick the right stock, there’s two examples I have for you. And the first is I bought Nvidia back in 2012. So for anyone out there who knows what Nvidia stock has done since then, that was very early and that money would have grown to an insane amount of money had I held on to it.

But, that’s the problem with picking individual stocks.

Back then I was a software developer and I could see that graphics were going to be more important in future years. And I thought, okay, investing in the best graphic processing unit producer would make a lot of sense.

So I invested and sure enough, I think it went up maybe 20, 25 percent and I sold it and I thought I was a genius and yeah, looking back on it, yeah, it was a good investment, whatever. But had I not sold it, it would be up thousands of percent. So even though it was a success. There’s still a lot of regret there cause I sold way too early.

So that’s one example of stock picking going right, but still feeling like a failure and something that you should have done better.

And the second example is probably around the same time, I think. Apple was trading at around its cash value. So ignoring all the intellectual property it had and all the products and everything, it just was pretty much trading for what the cash it had on hand was.

So I had some money lying around at that time and I was like okay, I don’t see anything else good to invest in, so I’ll just put it into Apple. And so I’ve just left it there and the dividends have just been reinvested up until recently. I turned that off because I was like, this is just getting too big of a chunk of my portfolio.

This was in a taxable account too, which is silly back whenever I did that. So I have this huge unrealized capital gains, so I’d ideally not sell it, because I would pay a lot of tax on it. And yet it’s just becoming an increasingly bigger and bigger part of my portfolio. So even though I want my little fun portfolio size to be 5%, Apple alone is already bigger than that, not even including, Apple’s. Portion of all the index funds I own.

So anyway, so that’s another example of stock picking going right, but then ending up in a sort of difficult situation where a single stock is now a bigger percentage of my portfolio than I want it to be, but if I was to pare it down, then I would be hit with a lot of capital gains taxes.

So there’s just two examples.

Because like I said at the beginning of this, it’s easy to see how stock picking is bad when it goes wrong cause you lose money or you make less money than you could have. But when it goes right, there’s still complications. And that’s why I’m so glad that the majority of my portfolio is index funds that I plan to never sell.

And that just makes life so much easier. You just let it keep compounding. It keeps doing its thing. You’re not switching in and out. You’re not watching it. It’s just growing. And it’s just a much easier way to invest. And it’s no doubt it’s going to be more beneficial than me trying to pick stocks, even if I pick winners, which again, I don’t always, those are two examples of winners, but even then it comes with complications.

So anyway, that’s what’s been happening with me for the past few years.

Expect some more detailed and actionable posts about some of the topics I’ve discussed today coming up. Maybe not this year, maybe early next year. But if you’d prefer these updates to be in video form in the next few years, then just head to madfientist.com/youtube to follow me there. And if I get enough subscribers there, I’ll just start doing them there.

But yeah, I hope you’ve been doing well, and one other thing that I’ve been thinking about over the last few years is just how grateful I am for the Mad Fientist and for you. It’s amazing that I can just go months without publishing anything, and then I send out one email and I get all these lovely replies and suggestions and intelligent people to communicate with. And it’s incredible. It’s just another investment that seems to now be paying off.

So all those past decisions of putting the reader and listener first and not trying to sell some garbage thing that you don’t need or trying to put ads all over the place, i’m happy I made those decisions because now I feel like I’ve built up this relationship with you guys and I’m so thankful for it.

So thank you for listening, thank you for all your feedback and for being kind internet people, because I’m not sure who else out there can send out an email to a hundred thousand plus listeners or readers and then just get all these nice replies and none of the normal internet garbage that I think a lot of people have to deal with.

So thanks for listening. I hope you enjoyed it, and I’ll catch you in the next one.

Related PostFifth (and Final) Annual UpdateIt's been five years since I left my full-time job so here's my fifth (and final) annual update on post-FI life!

The post Valuable Lessons from My Eighth Year of Freedom appeared first on Mad Fientist.

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Out of all the episodes of the Financial Independence Podcast, this is the one I wish I heard when I was on my journey to financial independence

Bill Perkins, author of Die with Zero, joins Chris Hutchins on the All the Hacks podcast to discuss what money is really for – maximizing net fulfillment.

This interview is incredible, so I reached out to Chris to ask if I could share it with you all, and thankfully he agreed!

Listen Nowhttps://traffic.libsyn.com/secure/madfientist/bill-perkins-interview.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Highlights* Why you should maximize for net fulfillment rather than net worth * When is the best time to allocate money to get the most fulfillment * Why you should time bucket your experiences instead of having a bucket list * How to break out of earning-saving-investing autopilot * Why you should fear wasting your life more than running out of money

Show Links* All the Hacks Podcast * Chris Hutchins on Twitter * Die with Zero Book * Bill Perkins on Twitter

Related PostChris Hutchins - Why You Should "Retire" Before You Hit Your NumberThe founder of Grove shares important lessons he's learned as an entrepreneur and explains why you may want to quit your job before you hit your FI number!

The post Bill Perkins – Memory Dividends, Time Buckets, and Maximizing Net Fulfillment appeared first on Mad Fientist.

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To celebrate the release of JL Collins’ new book, Pathfinders, I collected all the best advice from his Financial Independence Podcast interviews!

JL has been on the show three times:

• First, back in 2012 (he was my second guest ever!)
• Second, when his hit book, The Simple Path to Wealth, was released
• Third, during the depths of the Coronavirus crash

That last interview may be my proudest moment as the Mad Fientist (I explain why during the show).

Hope you enjoy this jam-packed episode!

Listen Nowhttps://traffic.libsyn.com/secure/madfientist/jl-collins-highlights.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Highlights* The power of FU Money and why it may be less money than you think * JL’s biggest investing mistake and what he learned from it * Why index investing is superior to active investing * Are REITs and international funds necessary * Why your house may not be a good investment * Thoughts on stock picking and actively-managed funds * What makes Vanguard unique and why it’s best for investors * The three keys to becoming wealthy * Lessons learned from Black Monday * How to prepare for the next market crash

Show Links* First Interview: JLCollinsNH – The Importance of F-You Money * Second Interview: JL Collins – The Simple Path to Wealth * Third Interview: Coronavirus Market Crash – Is This Time Different? * JL’s Website – JLCollinsNH.com * The Simple Path to Wealth * How I Lost Money in Real Estate Before it was Fashionable * Pathfinders: Extraordinary Stories of People Like You on the Quest for Financial Independence―And How to Join Them

Related PostThe Best Advice from Mr. Money MustacheTo celebrate the 10-year anniversary of the Financial Independence Podcast, here are the highlights from my first guest - Mr. Money Mustache!

The post The Best Advice from JL Collins appeared first on Mad Fientist.

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Health is similar to finances in that there are many overly-complex things people say you need to do, but there are just a few simple things that actually matter.

What is the “spend less than you earn, invest in a diversified/low-fee portfolio, and leave it to grow/compound” of the health world?

That’s what today’s post is about!

Parker Hewes wrote a book called Lifelong Youth: The Simple Path to a Long & Youthful Life, and today he shares the eight health behaviors that will do the most for your longterm health and wellbeing.

If you’d prefer to listen to a podcast instead of read the article, he also recorded a short episode that you can listen to on Spotify or Apple Podcasts.

Take it away, Parker!

We fientists are optimizers – endlessly on the hunt for improvement, efficiency, and growth.

We look at every decision with intentionality and a dose of stoicism. This helps us successfully create a life that focuses on what matters most.

And for many of us, health is near the top of that list.

But as people who constantly strive for more information and ideas of how to improve or do things better, diving into the chaos of the health industry can create a fair amount of confusion and overwhelm.

There’s so much information in the health world that it can be difficult to know where to begin or where to focus our valuable energy and time. Like with our finances, we want to get the most bang for our buck when it comes to our decisions about health. But most of the time, the information that we find on the internet is just fluff.

I get it. Humans are attracted to new and novel things. So, when a new diet plan or exercise routine comes around promising bigger and better results, it can be enticing to promote and accept it as Gospel. But when we constantly focus on what’s new and novel, we lose sight of the fundamentals that underpin success. Also, the sad truth is that those new and novel things won’t work very well if you don’t have a foundation of health underlying it all.

So, for those of us who have ever felt lost on our health journey, floundering between various health trends and fads, this article is for you. Because health is not about finding a quick fix in hopes of solving years of problems or inefficiencies…it’s about consistent habits that make healthy behaviors instinctual and natural. And compared to the amount of advice floating around the health universe, the behaviors that truly matter for your life are relatively few.

Thankfully, before I became a financial nerd, I was a health geek. Inspired by my Mom’s struggles with food allergies as well as my education as a doctor of chiropractic, I put thousands of hours into reading research and consuming every health book available (which, in my opinion, are the best places to get your health information).

After roughly 15 years of studying, what resulted was this little book about health that I call Lifelong Youth.

Lifelong Youth means living your life to the fullest. It means you not only live longer, but those years are filled with activity, adventure, and fun.

You don’t just sit on your couch when you reach some arbitrary age, you maintain your youthful exuberance long into the golden years. People admire you as being “the most active 80-year-old they know” because you continue to do the activities you loved in your younger years. You may not have the same spritely pep in your step as your 20-year-old self, but you’re still getting out there and experiencing the world like a 20-something.

To put it in the words of the World Health Organization, you have achieved complete mental, physical, and social well-being, not merely the absence of disease or infirmity.

I define well-being, lifelong youth, and health in the same way. To put it simply, health and well-being mean having more positive life experiences than negative ones. Whether it’s through mental stimulation, social connections, or feeling physically strong and capable, the more positive experiences you can create for yourself, the greater your likelihood of achieving lifelong youth.

With this definition, you have the freedom to choose your path. There is no exact recipe or diet that will get you to a long and happy life. The best plan is the one you will stick to, which means you may decide to focus on different health behaviors at different times. As long as you are thinking about each health behavior throughout your life, recalibrating along the way, and tinkering with new ways to form habits, you will be doing it right.

Thankfully, I have created a simple list of the health behaviors that deserve your attention throughout life. These behaviors have the biggest impact on your health, so developing habits around these behaviors will help you achieve lifelong youth faster and more effectively, without wasting time floundering between the latest dietary trend and exercise fad.

One last thing, before I get into the summary of health behaviors…I want to urge you that it’s never too late to start making progress toward your health.

You can make immeasurable amounts of progress in a short amount of time, which can impact your outlook and quality of life on an exponential scale. And since the organs and tissues in your body are always regenerating, every day is an opportunity to literally grow a new and better body than yesterday.

How you choose to eat, think, move, and act today will provide the resources that your body is using to grow new cells and replace old cells. So, even if you have a history of treating your body less than ideal, you can always get back on track.

Now let’s get to it! Here are eight of the most essential health behaviors that will help you achieve lifelong youth today, tomorrow, and for the rest of your life.

Health Behavior #1: Find Your Sense of PurposeWhy do you wake up in the morning? If you are like most of the longest-living people on Earth, your reason for getting up is to serve a higher purpose in life. And by having a sense of purpose, some estimates say you could lengthen your life by an average of seven years.

People with a strong sense of purpose are happier, too—your attitude about life changes when you feel like you have a reason for living. Just ask a new parent how they felt when they held their baby in their arms for the first time. Or you can ask the happiest cities in the world because a distinct feature of happy cities is that their citizens have a deep sense of purpose.

I have created a workbook to help you get more connected with your sense of purpose. Check it out at lifelongyouthbook.com/resources under the ‘Find Your Sense of Purpose’ workbook, or just download it here.

Health Behavior #2: Eat Food a Caveman Would Recognize as FoodI could go on for days about what kinds of food to eat and why. But, I could also summarize it in a few sentences:

• Eat real food, the kind a caveman would recognize as food.
• “Process” food in your own kitchen, don’t outsource it to some factory or laboratory.
• Only eat when you’re hungry.

I’m not saying you need to eat like a caveman or practice the paleolithic diet, but you should strive to eat food that is just one or two steps away from what it looked like when it was alive (the only exception being some oils and fats). And, in terms of timing, you’re better off eating only when you are actually hungry, not just out of habit, time of day, or boredom.

To further explain, when you go to the grocery store, you should recognize everything in your cart as something that was alive (or came from something alive) very recently. A red pepper, a potato, a ribeye steak, an egg, etc.

You don’t need to get caught up with whether or not a potato is better than a carrot, as long as those are the main foods you’re eating. If you’re doing it right, most of the foods in your home will have a shelf-life of less than a month.

Also, although I believe you can be healthy without feeling like you are making sacrifices, here are a few of the most offensive foods that I think you should limit from your diet:

• Corn. Corn has a high inflammatory ratio, and we tend to eat a lot of it since corn is so prevalent in processed foods and animal products (we feed livestock a lot of corn). Corn is the main reason why factory-farmed meats and animal products are more detrimental than beneficial for you. With its high level of inflammatory fats, corn fattens up cattle and makes them more susceptible to illness. Consequently, those unhealthy biomarkers transfer into your body when you eat meat and milk products from those animals
• Artificial sweeteners, fructose, and high sugar foods (aka sugary drinks). Don’t drink your sugar!
• Wheat flour. Flour tends to be overconsumed, and it creates a large glucose spike in your bloodstream which causes your body to frantically store the sugars as quickly as possible. Most often, your body’s first choice is to create a package of fat for storing the excess glucose. Getting glucose out of your blood is good for your circulatory system and nervous system.
• “Sweet” saturated fats. These include sweet fat or junk foods like baked goods, ice cream, and french fries. But also, you get similarly negative effects from a diet that contains lots of processed animal products as well as processed carbs. Animal products contain lots of saturated fat, and processed carbohydrates get converted to become a major source of excess sugar in your body. So, eating a diet high in processed carbs and high in processed meat (the typical American diet) creates more of these detrimental proteins called AGEs. These AGEs literally cause you to age faster. But don’t worry, If most of your carb intake comes from fruits and veggies (which have a lot of protective fiber), you’re in the clear.

Health Behavior #3: Drink WaterWater enables all life to exist. Considering that you, too, are alive, you probably want to put a lot of water in your body.

If we banned sugary drinks from America and everyone only drank water and tea instead, there would not be an obesity epidemic anymore. If you want to lose weight, the single greatest change you can make is to avoid drinking your calories through sodas, sugary liquor, and other sweeteners.

Also, your brain often confuses thirst with hunger. When you feel hungry, you probably need water more than you need food.

However, I admit that some beverages carry incredible benefits, too. For those of you who just can’t drink water all day, every day, try tea (green/mint/oolong/chamomile), organic red wine, or coffee in addition to your daily water requirements. Only 1-2 glasses of wine per day, though. And when I say coffee, I mean brewed coffee. Those frappe mocha cappuccino concoctions are not coffee; they are sugar in a cup. Try not drinking coffee after 12 pm either, or it will mess up your sleep habits.

Here are a few of my favorite habit-forming tips that helped me drink more water and fewer sugary drinks:

• Use habit stacking to your advantage. If you already have a routine set of habits that you perform every day, squeeze in your new habit amongst the rest (like a habit sandwich). For example, when you wake up in the morning, after brushing your teeth, drink one full glass of water while your coffee is brewing. Here, you have stacked three habits on top of each other: brushing your teeth, drinking water, and drinking coffee. Plus, this habit uses temptation bundling by pairing a habit you want to do (drink coffee) with a habit you need to do (drink water). These strategies will make your water-drinking habit easier to complete every day. Mad Fientist’s Note: Check out my interview with James Clear for more on habit stacking!
• Remove the cues of your bad habit from your environment. For example, seeing a beer in your fridge may be a cue that you “need a beer.” So, take the beers out of the fridge. You can keep drinks in the house for your friends but consider putting them in an obscure location or behind a locked door.
• Swap out your alcoholic or sugary beverage with water, red wine, tea, or coffee. Put it in an opaque cup and see if anyone notices. Or be straightforward and see if anyone cares. Besides giving you a bit of a hard time, I doubt you’ll lose any friends over this.

Health Behavior #4: Sleep Like You Mean ItEvery animal sleeps. So, for 1/3 of the day, every animal is willing to give up eating, mating, and watching out for predators.

Why do we make such costly sacrifices to sleep? Because quality sleep is like the Swiss Army knife of health behaviors. By getting better sleep, you can improve nearly every system in your body. Conversely, if you struggle with an illness or other ailment, poor sleep is likely a contributor.

We have this culture where we are proud to work long hours and sleep very little. People seem to wear poor sleep as a badge of honor. But really, poor sleep decreases productivity and increases all-cause mortality. So, without proper sleep, you’ll die sooner, get sick more often, and be worthless throughout the day.

Here are some other not-so-fun facts that might wake you up to the fact that you should prioritize sleep:

• Men who sleep 5-6 hours per night have the testosterone levels of a man who is ten years older. These underslept men also have smaller testicles, produce fewer sperm, and their sperm have more deformities and less motility. If you want a better sex life, or if you’re trying to have a baby, sleep more.
• Poor sleep messes up your hormones to promote weight gain. When you are sleep deprived, you produce more ghrelin and less leptin, making you hungrier and prone to overeating. Sleep deprivation also raises cortisol levels, which stimulates fat production.
• Your immune system is most active while you sleep. After one night of inadequate sleep (<4 hours), natural killer cell activity decreases by 70%. One night! Since natural killer cells play an essential role in stopping cancer and tumor growth, we could reasonably assume that lack of sleep increases your risk for cancer and tumors. That is why working the night shift is now considered a carcinogen.

Restful sleep is the single best thing you can do for full body health. Your body heals, repairs, and prepares for the next day while you’re sleeping. So, every time you skimp on sleep, you restrict your body from doing its main job, healing!

Plus, there is scientific proof that the more you sleep, the more attractive you appear, and the better you get at managing stress during the day. Sleep makes you better at regulating your emotions and it is a more effective antidepressant than the best drugs on the market. Sleep also alters muscle memory and increases peak force in muscles, which leads to improved reaction times, reduced injury rates, increased accuracy and speed, and decreased fatigue. In other words, your brain is practicing while you sleep! If you want to be a better athlete, artist, employee, etc., sleep like you mean it.

I am a stickler about this health behavior because it is so easy to accomplish, and few things feel better than waking up well-rested. Therefore, you now have a prescription to sleep more. And here are some tips for getting the kind of sleep you need and deserve:

• Regularity is one of the most important factors for quality sleep. Get in the habit of going to bed and waking up at the same time every day, even on weekends. To help form this habit, write down an easy activity that will at least get you started. For example, “At 10:00 pm, I will have my pajamas on, and I will untuck the corner of my bedsheets.” You technically don’t have to go to bed, but you at least form the habit of being ready for bed at the same time every night.
• Create a bedtime ritual. Like shooting a free throw, having a consistent routine will prepare your brain for rest so that you will fall asleep easier. Try reading or listening to a book for 10-30 minutes. Maybe pillow-talk with your significant other is a calming routine for you. Choose an activity that is not very “active.” You want to wind down, not get riled up. To help form this habit, choose an activity that is very easy to complete. For example, use the two-minute rule. Read for 2 minutes before going to bed. Seriously, after two minutes, stop reading. If you are enjoying the book, of course, you can continue, but as soon as you hit the point when it feels like work, just stop. Sleep instead.
• When the temperature of your room is a couple of degrees colder at night, you sleep better. The optimal sleeping temperature for most people is 65o. Also, make sure your bedroom is completely dark. Any bit of light can reduce your sleep quality or wake you up unnecessarily.
• Shut your screens off at least one hour before bed. Blue light from electronic devices can switch off melatonin production and make it harder to fall asleep. Wind down with a book, meditation, or a creative activity instead. Alternatively, you can wear blue blocker glasses or turn on ‘night-time’ mode on your devices.
• No caffeine after noon. Caffeine blocks your production of adenosine (the sleepiness hormone). Adenosine accumulates throughout the day and peaks after 16 hours of wakefulness. If you drink caffeine after noon, your brain won’t generate enough adenosine, and you won’t be very sleepy at night.
• Try not to eat within three hours of going to bed. Eating causes blood to rush to your gut instead of your brain. But your brain needs lots of blood to run your glymphatic system (the cerebral power wash). So, at least once a week, prioritize sleep by eating early and getting quality rest.
• You don’t sit around the dinner table waiting to get hungry, so don’t sit in your bed waiting to get sleepy. If your mind is racing, spend less time in bed. You want your brain to associate the bed with sleep, not a wandering mind. Instead, sit or lay somewhere else in your house until you start getting sleepy again. Try meditating or taking your mind on a pleasant walk.
• Alcohol doesn’t help you sleep better; it just sedates your brain. That’s why people feel so tired after a night of drinking. Their sleep is fragmented and shallow, so they wake up feeling unrefreshed and unrestored, even if they slept over 10 hours.

Health Behavior #5: Move Naturally and PlayDo you ever dread going to the gym? I sometimes do, because working out often feels like work; it’s just not that fun for me.

Thankfully, you don’t have to live at the gym to be healthy. If you are like most people, you aren’t trying to be a pro athlete or an Olympic powerlifter. Your goal is to be generally fit, so you can keep doing the activities you enjoy for the rest of your life. You can achieve this goal and have fun along the way; you don’t have to suffer through the same old workout routine.

Also, being a mover is more important than being an “exerciser.” If you have an active lifestyle that keeps you moving for most of the day, you’ll look and feel better than the desk worker who spends two hours at the gym after work. The longest-living people on Earth rarely go to the gym, but they stay fit and healthy because their lifestyle is a constant expression of movement and exercise.

Granted, weight training is a useful tool — the WHO recommends at least two days of weight training per week. But lifting weights doesn’t have to be a sterile, lifeless routine of sets and reps. If you enjoy weightlifting, be my guest. But if not, there are plenty of other ways to make exercise fun and challenging at the same time.

Besides, being an “adult” and having “responsibilities” does not mean you have to stop playing, imagining, and exploring. These qualities are what make our species successful. In the words of Todd Hargrove, “Play is not about doing things that are immature, frivolous, or trivial. It is about getting absorbed in an activity that is intrinsically motivating.” Play means you practice and fiddle around with different ways of doing things until it falls into place. You tinker and fine-tune until it feels right.

So, whether you are at the gym or out in nature, play around with your movements. By tinkering and fine-tuning, you’ll start to enjoy exercise because your workout routine will look less like work and routine. Pretty soon, you’ll be craving activity, and fitness will just come naturally.

If being creative with your fitness doesn’t come as naturally to you, try these life hacks for integrating more movement into your life:

• Change your environment to prioritize movement and play over lounging around. For example, push your couch far away from the TV and put a mat on the ground instead. You are more likely to sit on the floor and practice mobility if you have space for it. While watching TV, you can play around with different positions and stretches, which is great for movement health and long-term mobility. Also, getting up and down off the floor is a great predictor of longevity.
• Make sports equipment, exercise equipment, toys, and games easily accessible. When exercise is more convenient, you are more likely to do it. Meanwhile, make sedentary activities less accessible and out of sight. Consider putting your TV behind cabinet doors and hiding the remote. Every extra step you add will make your bad habit more inconvenient, and you’ll be less likely to consume it.
• Use gateway habits. Instead of saying, “I will go for a run every day,” say, “I will put on my running shoes at x:xx o’clock every day.” Smaller habits are less ominous, so you are more likely to maintain them.
• Use the two-minute rule — downscale your habit into a two-minute time frame. Once the two minutes are up, you are done for the day. If you want to keep going, you are welcome to, but you don’t have to. Never miss twice, though. If you miss one day, make sure you keep the habit alive tomorrow.
• Join a club, exercise group, or sports league. Creating a culture around your desired behavior helps you stay motivated.

If you’d like a little more guidance on the type of activities that will help you live your best, most active life, follow these activity guidelines:

| Guideline | Description | Examples | | 5x/wk or 150min/wkMove and be active (moderate physical activity) | Moderate activities feel like work, but not in an unpleasant way. Your heart rate is elevated to a point where it would be challenging to sing but easy to talk (60-80% of your max heart rate). | Brisk walking/HikingGardening/YardworkHousehold choresJoggingCycling/Mountain bikingSwimmingPlaying around (e.g., climb, swing, chase, jump, crawl) | | 1-2x/wkDo something heavy | Whether you do these lifts in a gym or outdoors, make sure you expose yourself to all types of movements, not just one or two.Focus on proper form. Quality and control matter more than sets and reps. And remember, have fun! Play around with different movements and make it a game or competition. | Overhead push (e.g., chest/shoulder press)Overhead Pull (e.g., pull up, cable pull-down)Horizontal Push (e.g., push up, bench press)Horizontal Pull (e.g., rows) SquatsHip Hinge (e.g., deadlift)Lunges | | 1x/wk20 minutesDo something vigorous to max out your heart rate | Vigorous activity feels hard and requires willpower to continue. Your breathing rate is high enough that you cannot have a conversation. | Sprint a hill five timesHIIT WorkoutsSprint RowingSprint bikingLap swimming for speed | | PeriodicallyPractice coordination, balance, and ROM | Focus on a movement that you are not very good at and do those movements more often. After all, you are only as strong as your weakest link. | Ankle mobility exercisesWalk on an unstable surface (e.g., slackline, 2×4, curb)YogaPlay sports |

Health Behavior #6: Find Your TribeSocializing is one of the most dependable means of improving your health and happiness. The happiest people on Earth socialize at least eight hours a day, and the world’s longest-living cultures spend much of their after-work time in a social setting.

However, when you hang out with your friends, try to do healthy activities. Instead of drinking and sitting around a table, you might choose to do movement-based activities like hiking or playing yard games. Behaviors are contagious, so if you choose to move, play, and socialize all at the same time, everyone will maximize their health and take another step toward Lifelong Youth. If you want some ideas to spark your creativity, check out the ‘Movement Games’ addendum found at lifelongyouthbook.com/resources. Or, download is here.

To help you prioritize social time, consider joining a club that meets regularly. Some people need a little nudge to hang out with friends, and it helps to have a scheduled time in their calendar. And when you greet your friends and family, try approaching them in three ways: touch (e.g., hug), words of affirmation, and eye contact. This practice helps build stronger relationships and establishes a deeper connection.

Finally, if you’re worried, answer these questions to determine the quality of your friendships and their impact on your health.

• Do your friends smoke?
• Are your friends overweight because of unhealthy behaviors?
• Do they drink more than two glasses of alcohol per day?
• Do they eat an unhealthy diet?
• Are they excited about life, or are they prone to complaints and negativity?
• Does their idea of recreation include watching TV and sitting around, or would they prefer to go outside and be active?
• Are they curious about the world?
• Do they listen as well as talk?
• Are they interested in trying new things, or are they tied to a consistent routine?
• Do they engage with the community and encourage your engagement?
• Do you feel better or happier when you are around them?

Health Behavior #7: Embrace DiscomfortThis may be my favorite behavior from a philosophical perspective.

With a mindset that pushes me to embrace discomfort, I believe you can accomplish anything. That’s because embracing discomfort (or said another way, voluntarily exposing yourself to a small amount of stress) increases your adaptability and resiliency as a human. Those two words, adaptability and resiliency, characterize exactly what it takes to live longer, healthier, and happier. And by voluntarily exposing yourself to small doses of a stressor (and doing so in a controlled way), you train your body to overcome any stressor, even the kind that catches you off-guard and occurs at the worst possible time.

With an ‘embrace discomfort’ mindset, you become the master of your stress, not the victim of it. And realizing you have control over outcomes, your emotions, and even your physiology (your body’s internal responses) is a philosophy that will change your life forever.

Now, the trick to embracing discomfort is figuring out the proper dosage. For every bout of stress that you voluntarily impose on yourself, you will need to play the role of Goldilocks and assess whether you are adding too much or too little discomfort onto yourself. Even though I wish I could give you a universal prescription for how to impose just the right amount of stress, I sadly cannot. Everybody has a different stress tolerance, and your tolerance level is always changing depending on your behaviors, your environment, the stages of your life, and the other stressors you were exposed to today. What I can prescribe, though, is an intentional program of stress exposure that focuses on mindfully assessing how you feel and respond to every instance of voluntary stress exposure.

For example, sun-tanning is a method of voluntarily exposing your skin to the stress of the sun. If you’re doing it right, you will stay in the sun for just the right amount of time so that you get a tan without getting burnt. However, to accomplish this, you need to be mindful of how your skin is reacting to the sun as time goes on. We all know that you can’t just sit in the sun all day and expect perfect bronzing. You have to build up your tan incrementally. If you try to do it all in one day, you won’t be very happy tomorrow.

The same idea is true for any stressor. Each time you expose yourself to controlled stress, pay attention to how your mind and body feel afterward. Could you have pushed a little harder in that workout yesterday, or did you go a little too hard, and you are sore for three days instead of one? Did you feel overwhelmed by the number of tasks on your list today? Did it paralyze you from getting things done? Or were you in the zone, cranking through your tasks with focus and efficiency?

For some behaviors, it will be easy to see the results of too much or too little stress. When you get sunburned, it is obvious that you stayed outside for too long. For most stressors, though, this is not the case. Your behaviors won’t always give you immediate feedback. This is why it’s important to lean into discomfort. Embrace it. Do things that are difficult, challenging, and a little bit uncomfortable. Your body likes to be challenged and pushed, and you are capable of more than you think. When you allow your body to adapt and grow, you’ll be surprised how much progress you can make in a short amount of time.

Exposure to hot and cold temperatures are two examples of the way I embrace discomfort. Incrementally embracing the extremes of hot and cold can have widespread effects on your physical and mental health, and these tactics have been utilized for thousands of years. I’m sure you’ve heard of these methods before, they include cold water immersion (aka cold plunge, ice baths, etc.) and sauna (infrared, dry sauna, wet sauna, etc.). I won’t get into the specific benefits of each method, but you can check out my book and really nerd out if you want to. Instead, I’ll just give you some tips on how to integrate these methods into your life.

1. Do things outside, in all types of weather. The easiest way to embrace discomfort is to step out of your climate-controlled box and experience the real world. Remember, there’s no such thing as bad weather, just bad gear.
2. View stress from a different perspective. Think of demanding tasks as challenges rather than threats. That way, you will no longer be the victim of stress but the master of it. Instead of just “dealing” with discomfort, you’ll embrace it, welcome it, and seek it out.
3. Cold tip: At the end of your shower, turn on the cold for 30 seconds. Yes, it will suck at first, but eventually, you may enjoy the cold. It will wake you up better than a cup of coffee, and you’ll feel warmer when coming out of a cold shower (no more shivering under your towel). As an alternative to cold showers, put an ice pack on the back of your neck for 30 minutes every night. In adults, brown fat resides across your shoulders and down the spine. By placing an ice pack at the base of your neck, you will stimulate brown fat production. This strategy will not work as well as cold water immersion, but it is more tolerable for most people.
4. Hot tip: If you have the luxury, go back and forth between a hot sauna and a cold shower or cold pool. This creates a kind of pumping effect in your blood vessels, which helps clear away toxins and debris.

Health Behavior #8: Practice SpiritualityYou don’t need to be religious to practice spirituality. No matter what you believe, the act of sharing your beliefs with others will add to your health and happiness. This is partly because spiritual gatherings help foster social ties. But spirituality also allows for quiet reflection and mindfulness, which relieves stress. Here are some more reasons why practicing spirituality is good for you:

• Every time you focus your attention on something, your brain rewires itself by establishing new neural connections. With meditation and mindfulness, you often draw your attention toward positive emotions like kindness, love, and conscientiousness. In doing so, you literally reshape the structure of your brain. So, you aren’t just ‘faking it ‘til you make it,’ you reshape it ‘til you make it!
• Meditation also helps deactivate the genes associated with inflammation, which is implicated in almost every chronic disease that affects our aging population.
• After a stress-triggering event, meditation, mindfulness, or quiet repose is one of the best ways to calm yourself down again. In other words, mindfulness helps empty your cup of stress so that it is less likely to overflow and cause damage.

I refer to spirituality as meditation and mindfulness above, but any faith system will likely have similar effects. You could substitute meditation and mindfulness with the words ‘prayer’ and ‘reflection’ if that is what makes you happy.

Either way, I urge you to give your brain some downtime. Unplug for a little while every day, and don’t do anything. Your brain’s default mode is still active during this time, and it is working on problem-solving and creating new ideas. So, even if taking a break seems unproductive, you are more productive in the end.

Finally, a quick tip on the practice of spirituality. Whether it’s prayer, meditation, reflection, or whatever you choose to call it, focusing on your breathing will be impactful and beneficial for your mind and body. A standard breathing cadence for relaxation is to breathe in through your nose for five seconds, hold for seven seconds, and exhale for ten seconds through a relaxed jaw. Exhaling with a slow, long breath will stimulate parasympathetic activity and tell your body to rest, protect, and repair itself.

ConclusionNow, I know it seems like I just added 8 things to your list of to-dos. But, instead of trying to tackle all 8 steps at once, spend some time figuring out which step seems possible to tackle at this point in your life. Similar to knocking out debt with the debt snowball tactic, start with a small, easier win. Then, you can build up steam toward the bigger tasks and behavior changes that may seem a little more daunting right now. Once you get acquainted with the habit formation process, you’ll notice that it becomes easier to accomplish big changes. And as you learned through a few examples in this article, breaking down the behavior change into small, manageable doses will go a long way.

I know you can do this. At the very least, I hope you’re motivated and inspired by the plethora of healthy options you have to choose from. Health does not have to be the suffer-fest you’ve been conditioned to think it is. There is a lifetime of healthy foods and activities that you can explore without ever getting bored. The world is your playground, so get out there, play on it, and stay young along the way.

P.S. There is so much more information in the book about how to form habits, stay motivated, and apply these behaviors more effectively in your life. Plus, I’ve provided a ton of free resources for you on my website: lifelongyouthbook.com/resources. Enjoy!

About the WriterParker Hewes is an adventurer, chiropractor, soccer coach, and author. He loves mountain sports like skiing, biking, rock climbing, backpacking, trail running, and obstacle course racing, which is why his home in Jackson Hole, Wyoming is the perfect playground. Most recently, he’s been humbled to have gotten called back to compete on American Ninja Warrior this year! You can watch him on TV when Season 15 airs. Parker also enjoys consuming endless content in the financial independence space. He plans to be financially independent by age 40. He is also in the process of creating an educational platform about health, wealth, and happiness. So be on the lookout for the Getting Gooder podcast, blog, and book series!

The post Your Money and Your Health appeared first on Mad Fientist.

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On today’s episode of the Financial Independence Podcast, I welcome back Chad Carson from CoachCarson.com!

Chad just released a new book called The Small and Mighty Real Estate Investor, and I wanted to get him back on the show to talk about it.

I’m not a real-estate investor though. So rather than interview him myself, my real-estate-investor friend, Jillian Johnsrud, did the interview for me!

You may know Jillian from Montana Money Adventures, or her new podcast – Retire Often.

She did a fantastic job, so I hope you enjoy their conversation as much as I did!

Listen Nowhttps://traffic.libsyn.com/secure/madfientist/jillian-and-chad-interview.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Show Links* Coach Carson Website | Twitter * Jillian Johnsrud Website | Instagram * The Small and Mighty Real Estate Investor Amazon | BiggerPockets

Full TranscriptComing Soon!Related PostChad Carson - Retire Early with Real EstateChad Carson joins me again on the Financial Independence Podcast to talk about the best strategies you can use to retire early with real estate!

The post Jillian Johnsrud & Chad Carson – Small and Mighty Real Estate Investing appeared first on Mad Fientist.

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On today’s episode of the Financial Independence Podcast, I welcome back Ramit Sethi from I Will Teach You to Be Rich!

I needed someone to come on the show to provide some tough love and Ramit was the only person for the job.

As Ramit mentioned during our last interview, FIRE people are great at knowing what NOT to spend on but we’re not good at knowing what to spend on.

Spending is going to be a big focus on the Mad Fientist this year and I can’t think of a better way to kick off this discussion than by getting yelled at by Ramit so hope you enjoy it!

Listen Nowhttps://traffic.libsyn.com/secure/madfientist/i-will-teach-you-to-be-rich-interview.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Highlights* Why we doubled our annual spending (and was it worth it) * What Ramit did to make me get all clammy and uncomfortable * Why pay less when you can pay more * How to imagine your own rich life * Why you should start wasting some money at a certain point

Show Links* I Will Teach You to Be Rich * I Will Teach You to Be Rich Podcast * Episode 16 – “We’re worth $8 million but I comparison shop for strawberries” * Episode 40 – “We’re worth $5 million, but my wife nearly canceled our trip to save $200” * Money Coaching with Ramit Sethi * Ramit on Twitter | Instagram | TikTok

Full TranscriptMad Fientist: Ramit, thank you so much for being here again. I really appreciate it.

Ramit Sethi: Thanks for having me back.

Mad Fientist: So, it’s been over three years since our last interview, which is crazy. It seems like yesterday. And you’ve been really busy with some new stuff since then, which I’m excited to talk to you about. But there’s one particular topic that we touched on back in our first interview that I really want to dive into today because I think it’s a huge problem in the FIRE community and it’s a problem that I know I have, and it is the fact that FIRE people aren’t very good at knowing what to spend on.

We’re great at knowing what not to spend on, as you mentioned in our interview last time, but we’re not good at knowing what to spend on. And since we talked, I’ve been really working hard at this over the last couple of years and I want to talk through that. But you are the perfect man to push me further and hopefully push everyone in the audience further because I’m sure this is not a unique problem to me.

What do you think about that?

Ramit Sethi: I think that’s true. I think that a lot of people have been taught well… I think that the world teaches us to save, but nobody teaches us to spend. And if you take that concept of frugality to the logical extreme, then you start to see saving money as a virtue and spending money as a sin.

And it’s not, that’s not how it is. In fact, the point of living a rich life is not to save money. It’s not. The point of a rich life, in my opinion, is to design a rich life that excites you and then use your money to live as meaningful of a life as you can. So I’m all for a high savings rate and aggressive investments and earning more. I’m totally for that. But there’s another side of the equation that too many people ignore and that’s what I’ve been very excited about.

Mad Fientist: This is interesting because your site is I Will Teach You to Be Rich. Your book is, I Will Teach You to Be Rich. And I’ve always read that as I will teach you to become rich.

But it was only recently as I’m getting into your podcast more and I’m getting into the journal you just released, that I realized that it actually is, I will teach you to be rich and that’s very different than becoming rich.

Ramit Sethi: That’s right.

Mad Fientist: And my question is, was that intentional because obviously you started the site way back in the day.

But were you thinking about that way back then? Or were you thinking of it in the same terms as I was as I would teach you to become rich?

Ramit Sethi: It is about being rich and I think that we should live a rich life today and an even richer life tomorrow. So I don’t like the idea of I have to wait until I’m 75 years old and maybe just, maybe I can go take that Alaskan cruise or treat my family to a nice dinner.

I don’t wanna live that kind of life. And so, yeah, it’s about being rich and being rich can happen even if you have credit card debt, you can still be rich. So the next question that naturally comes up is what is rich? And I think this is where it gets really interesting, this concept of rich for a lot of people, the first images that pop up in their head are you know, being chauffeured around in the back of a limo, wearing some fur coat and eating on some table that holds like 70 people with some butler.

I’m like, guys, that’s Hollywood. That’s Richie Rich. That’s not reality. A rich life is so diverse. It could be buying a beautiful coat. It could be traveling two months a year. It could be having the freedom to pick up your kids from school every afternoon. So a rich life is yours. It’s not mine, it’s yours.

And you define what it is. And if we start from that premise that you decide what your rich life is and suddenly it becomes a lot more exciting to be able to use money to live that life.

Mad Fientist: Absolutely. Okay. And I’m, and that’s why I’m so excited to have you on, and you’re the only person that I could think of to get on for this sort of topic.

So over the past couple of years, you’ve released a couple of things that are actually very helpful for this goal. So if you could, since I’m gonna be referencing them so many times, would you just tell the audience who may not be familiar with your podcast and your new journal, what those both are about?

And then obviously I’ll be using those a lot as we continue this discussion.

Ramit Sethi: Yeah. So initially I wrote my book, I Will Teach You To Be Rich. It came out in 2009. I re-released it the 10 year edition in 2019, and I had added about 80 pages of material. A lot of money psychology new material. Also, things had changed in the world, and things had changed in my life.

I had gotten married and I had become much more interested in money and relationships. As I started to talk about this, I realized that I wanted more material on this, and I wanted to help people get more excited about money. I use that word excited intentionally because when you asked the average person what words come to mind when you think of money, they go stress, overwhelm, guilt, am I too late or restriction.

I know you FIRE guys love the word restriction. Oh, I love it. They actually love it. I love it. It’s like someone who has a little scab on their arm and they go, Ooh, I’m gonna pick at this scab. It’s like, stop it, man. You know? Okay. You can restrict a little bit, but it’s not the point of money.

So, a couple of things that I did. First I created a podcast, and the podcast is called I Will Teach You Be Rich. And on this podcast you can actually hear me talking to real couples. I’ll just share one example of a couple who has $825,000 in debt and they’re worried that they can’t afford to have children.

On the other hand, you have a couple who has over $10 million of net worth and they still agonize over the price of blueberries, and they still, they can’t go on a vacation that they want to, they only go where the points will allow them. And I go, at what point do you get to actually enjoy your money?

$10 million and can’t even choose the country you wanna go visit. So here’s the thing about this podcast. Most of us have never actually heard a couple sharing real numbers and the fights that they’ve had for 25 years. The tears, the joys and actually getting on the same page. You may have seen a blog post, but you’ve never actually heard a real couple doing it.

And so, because of our reach, we can find these people and they trust us enough to know that they’re willing to come on the show and share it. So that’s the podcast along with a new journal that I released.

Mad Fientist: Yeah, before we move on to the journal, I just wanna say the podcast is incredible.

I would say it’s sort of like being in a psychiatrist’s office and the couple are on the couch and you’re there like assessing it and you’re just eavesdropping on this really personal conversation. And yes, some of the higher net worth episodes have been really, really useful to me, which we’re gonna talk about.

But yeah, the entertainment value and just feeling like you’re sort of eavesdropping on this very private conversation because you have a, you have a psych background a little bit, don’t you?

Ramit Sethi: I do, I do. Although this isn’t therapy. But yes. When I talk about the money with these couples, we will often end up at, you know, what were the words that they remember their mom and dad saying about money?

And oh my gosh, there was a recent episode, there was a couple that lives in the Midwest and they make a very good salary. They make $130,000 and they cannot figure out why they are constantly behind and in debt. And at one point the dad tells me about his daughter coming home from school. And her school had given her like one of those baskets of food that you would give a child who doesn’t have enough food at home, who’s food insecure.

And he was like, full of rage. He was angry. How could they give her that we are not poor. We make $130,000 a year. And so I started talking to him. I said, how’d you grow up with money? He tells me, well, when I grew up, we didn’t have a lot and there were the haves and the have nots. The haves we’re on the other side of the park.

They were the doctors, the lawyers, the people with the big house. We didn’t have anything. Now as he’s grown up, he makes a very good income. The way he talks about money, he still believes he doesn’t have enough. He still acts as if he doesn’t have enough. And there’s a lot of peculiar behaviors that people without money carry into their adulthood.

And when his daughter asks him about spending money, he says, we can’t afford it. So it’s no surprise that when his daughter goes to school and the teachers ask, how are things going? She says, we can’t afford it. And finally, this was the most haunting moment. I asked him, would you talk to your daughter about money?

And he looked startled. He essentially said, why would I talk about money with her? Essentially, I am protecting her from money. Just think about that. In his view, money is a bad thing. It’s evil. It causes problems and stress, and therefore I’m gonna protect my innocent daughter from having to deal with it.

But that’s not how wealthy people treat money. That’s not how someone who’s living a rich life treats money. Think about somebody who’s like very good with food. They love to eat healthy food. They’re gonna talk about food with their kids. Oh, come on, let’s cut this garlic together, we eat this because it tastes good and it mixes well with that.

How come we don’t do that with money? And so when I suggested to him that there are a lot of people who talk to their kids about money, he was bewildered. Why would you talk to your kids about money? Because in his view, money is something to protect kids from.

Mad Fientist: Wow. Yeah. You see people acting how they act with money and even, you know, how I act with money and how some other FIRE people act with money and you don’t really think about what had gone into making them act that way with money and what they’re still carrying around. And it seems like most of our money views and how we deal with having money or having no money all stem from how money was when we were children.

Ramit Sethi: Yeah, it definitely does. And it’s a funny wrinkle in human psychology that even if we are acting in a way that is not serving us, our mind will create a narrative where we end up being virtuous.

So take someone who has 10 million, just as an extreme example, and they are driving all over town to compare the price of gas. And I go, Hmm, what do you think of that? And they’ll say something like this, well, you know, I don’t like to waste money. Or, it’s not that I drive around for everything, I’m just selective.

So we come up with these words that make us seem virtuous when in reality, as a third party, I’m going… you’re nuts! You made more in interest by lunchtime than you would save over the course of five months of driving around to save 10 cents on gas. Why are we doing this? And more importantly, what are you not allowing yourself to do by focusing on these $3 questions instead of the $30,000 questions?

And it’s comfortable because you know, all that one gas station on Main Street always has a good deal and it’s comfortable and you have mastery of it. But actually at a certain point, you have won that game. You’ve won it, and maybe it’s time to turn the page and go onto a new chapter in life.

Mad Fientist: And that’s where your journal comes in.

So please talk about that because that is just recently released and it is pretty much the ideal workbook for coming up with that. So if you could just tell the audience, who may not be familiar with it, what you just released with the IWT Journal.

Ramit Sethi: So, believe it or not, FIRE people, some people actually are never gonna buy a book and compare the difference between a Roth IRA and a Traditional IRA.

I know, it’s crazy. I know. But I learned this myself. I’m like, why don’t you guys just buy this book , and in fact, get it from the library. You’ll solve all your money problems. And there are a lot of people that are just like, mm, I’m not gonna do that. I go, all right, I get it. We have to remember that most people are not buying any book, much less a money book.

And it seems a little ironic because by the time people are 40, pretty much their number one worry in life is money. So you go, well, why don’t you just read this book or listen to that podcast, YouTube. And there’s a variety of reasons people don’t, but I don’t want to sit here and berate people. Well, that’s not true. I do a little bit. But what I wanna do is help them start to live their rich life. And so I created this journal, and it’s called a no-numbers journal. So you get it and I want you to imagine giving yourself the gift of 15 minutes, your favorite cup of coffee, a quiet room, and you get to sit down and dream.

You get to dream about how you wanna use your money. It’s not about your savings rate, it’s not about the Trinity study, it’s none of that. It’s about, if I could spend more on something that would make my life easier, what would it be? It’s about pulling a pen out and sketching out what your ideal day would be, or even your ideal house.

And yes, there is parts about what should I not spend on, or how should I navigate money in relationships? It’s tactile. And I wanted people to start connecting their money with their lives. I can tell you that most people don’t get motivated by seeing a higher figure in their checking account. I know some people do.

Personally, I love it. Okay. I like it. So that’s why I don’t hate the FIRE community, but I understand a lot of it because I like a high savings rate. I like seeing compound interest. And I get that, but most people are not like that. Most people are like, I actually wanna go out to this really nice restaurant and know that I can pay for it without worrying.

Okay, great. Well let’s start there. And when people start to engage with this journal, it’s just a much more relatable way of clarifying what a rich life is to you. And then for some people they decide, Hey, I wanna start optimizing my money and make it work for me.

Mad Fientist: Yeah, and I have a copy and we actually got some good weather here in Scotland over the summer and I really enjoyed just sitting out there with a cup of coffee in the sun, going through it with my wife, Jill, and trying to really think about it because it is way harder to figure that out especially when, you know, we’re so lucky we’ve reached financial independence we can spend on these things. But yeah, as a frugal person, naturally frugal just my entire life. It is way more difficult to sort of push myself in those areas, but it has been helpful and that’s why the podcast and the journal have been really helpful so definitely just wanted to set those up because I’m going to be referencing them a lot.

But I think before we dive in, maybe just give you a quick update of what’s changed since 2019?

Ramit Sethi: Tell me.

Mad Fientist: Yeah, so we talked in 2019, and I think for the prior 10 years to 2019, I, we averaged the same amount of annual spend.

And you will be happy to know that over 2021 and 2022, it looks like we’re doubling that value for our annual spend.

So I’ve heard you on other podcasts where you’re like, you know, people who say they want to change and like, get better at spending, they don’t really mean it, but I, I actually do mean it.

And we’ve actually worked pretty hard at doing that. 2021, we traveled a lot more and spent a lot more than we would’ve on that travel. We experimented, like we did Premium Economy to the States, and then we did Business Class on the way home just to try those both out and compared them.

And then 2022, we just moved into a new house and I’ve been kitting it out. And even my wife one day, another Amazon box arrived and Jill was like, what is happening? And I was like, this spending thing is incredible. I don’t know what I’ve been missing for the last 40 years of my life, so I’ve been really enjoying it and I feel like I’ve made a lot of progress but there’s still a ways to go because even though we’ve doubled our annual spend, we’re still not even spending what the portfolio could generate at a very conservative withdrawal rate and it doesn’t account for any sort of income that’s coming in.

So I am still trying to push myself, but I just wanted to let you know that thanks to our conversation in 2019, I have been making progress and it’s been so fun and way way more enjoyable than I expected. So thank you for that.

Ramit Sethi: Wow. Well thank you. And thank you for giving me the update. And what makes me happiest to hear that is that you’re having fun doing it, which is the point money is supposed to be fun and that you’re doing it together with your wife. That is amazing. That is the culmination. You know, when it comes to money, I’ve learned at the very beginning levels, it’s all about the what… I made a little money, what do I get to buy or what do I want to do with it? And that’s totally cool. I have no problem. You wanna buy a beautiful coat or take a trip? Amazing. I love it. But at the highest levels of personal finance, it is always about the who. Who do I get to bring with me? Who do I get to surprise or delight, and to hear that you’re doing it with your family is just the culmination of what a rich life really should be.

So, congratulations.

Mad Fientist: Thanks man. Yeah, it’s been great. And before we dive into some of the, the newer stuff I’ve learned from your podcast and your journal, I want to revisit something you said in our first interview, and it was something that made me think you were a lunatic at the time, but I get it now.

And that was why pay less when you could pay more?

Ramit Sethi: That’s right.

Mad Fientist: And I was like, yeah, you gotta have to explain that. And still didn’t, I don’t think I really got it. And it was only recently that we just moved into this new place and I love pour-over coffee. That’s like my morning ritual. I love making it. I love drinking it. I love buying the beans, I love everything about it. And I’ve been waiting until we moved into a place where I could get a proper grinder, because I thought that was the coffee grounds were the only thing that were holding me back because I couldn’t get a really consistent grind.

So I bought this thing that is probably the nicest you can get without going commercial. And it is amazing. It is the nicest thing to look at, the nicest thing to touch. Like I just love pressing the button. I love pulling out the tray. I love everything about it. And I don’t think I really understood that before. I would’ve just picked the cheapest thing that does the job.

And this has shown me that there’s a whole other level that it’s just like brings you so much joy that doesn’t even relate to the actual functionality of the thing, just the actual beauty of it and the design. And so I get that now and my question to you is, I wanna find more of that, but for me, it’s hard to distinguish between quality and status.

Like, is a Rolex that sort of experience or is it just the status that makes that price so high? So I don’t know if you have any experience with that, but I would like to find more of that, just like pure quality. And something else you said in our last episode was like, focus more on value than cost.

So I do wanna get better at that, but for me, I struggle, I think to sort of distinguish between the two because I couldn’t care less about status, but I do really love that quality. So any insight into that?

Yeah.

Well, first of all, awesome to hear. I love, I just love hearing your voice and I love hearing anyone’s voice when they get excited about their primary money dial in their rich life.

So coffee and the way you talk about it, the ingredients and the tools, you can tell this is a passion of yours. I think first of all, that quote you know, why spend less when you can spend more? That’s a Dan Kennedy quote, and it is profound. All of us intuitively get this. Especially if you’re a parent, there are certain things you are going to spend anything on.

It could be the right type of diapers. It could be a car with certain safety features. We all intuitively get it when it’s about our kids or our dogs. My goal is to normalize spending as much on yourself as you do on your kids and your dogs. Okay? Everyone looking around right now at their little golden retriever at their side, like, yeah you give your dog the best food.

How come you think 10 times about how much you spend on yourself? It doesn’t make any sense.

So the fact that you have tasted that is awesome. Now distinguishing between higher quality. Well, first of all, my fantasy has always been to take one of my friends who made some money and I just go, Hey, come visit me in New York and I’m gonna take you out for three days and show you how to spend your money. I’m literally gonna show you the skill of how to spend money.

You’re not gonna like all of it. Some of it you’re going to be like, okay, that was not worth it for me. But some of it, you’re going to go, oh my God, now I get it. For example, there are certain things that you can only understand once you experience or touch them.

A certain type of sweater, a picture doesn’t do it justice. A certain type of food. When you see it being made in front of you and you understand where the ingredients came from and how it was sourced. Oh my God, I never knew that much work went into this, and how it tastes is incredible.

On the other hand, I’ve eaten certain meals where I go, okay, I mean, that was fine. It’s not my taste. I’m probably not gonna come back here. But anyway, that’s my fantasy. Unfortunately, no one ever takes me up on it, no one. Maybe the key is that I go, well, there’s just one catch. You have to have an unlimited budget and they go, what do you mean unlimited? They get really scared I’m going to like make ’em spend like $500,000 in three days. I’m like, I’m not gonna do that, but it is gonna be more than you thought, and they’re not ready for it, which is totally fine. I’m not gonna force anyone into spending it. Here’s what I would say as a real answer to your question, which is most people have spent decades viewing the world through the money lens of cost.

That is their primary and sole money lens. When they go to eat somewhere, they look at how much it costs. When they go to book a flight, they look to the right of the screen to find the lowest cost. They sort by cost, cost, cost, cost. And so there’s a couple of isolated things in people’s lives where they’ll spend more.

Okay. But it is very difficult to extend that to other parts of their life. But the way you’re doing it is the right way, which is you find something you’re passionate about and you start to explore.

If I were gonna encourage that, what I would do is I would look at your finances with you and I would say, okay, let’s pick a number that you have to spend every single month on this hobby of yours, coffee. And let’s just, what would be the number that you’d spend every month to make this like a serious hobby for you?

I feel like I, I feel like I’m spending it because the beans, I get high quality beans shipped in from around Scotland. And, and that was the last piece of kit. Maybe there’s something I could do where I could actually like go and learn the espresso stuff and the barista stuff that I don’t do. I just do a pour over, a V60.

Ramit Sethi: So how much?

Mad Fientist: Whew. Maybe another a hundred pounds a month. Not even that much, I guess.

Ramit Sethi: Mmm. Try again. Don’t you have a lot of money, like, oh, I’m not even spending what I should be in my model. And we’re debating over a hundred pounds. I don’t think so. Try it again.

Mad Fientist: Geez. I don’t even know what I would spend a hundred pounds on. That was like…

Ramit Sethi: Well, we’re gonna get to that . Okay. Just pick a number.

Mad Fientist: 250 pounds.

Ramit Sethi: Okay, fine. 250 pounds. Okay. Alright. I know you can afford it. Okay. Cuz I saw you send over some numbers before. So, cool. Now we have a number that’s quite aggressive for what you’re currently spending and, and I love your comment, I don’t even know what I would spend on .

Okay. Well let’s take a second to dream. Coffee is one of the things that makes you passionate. You love it and you wanna get more experience with it. So how would you discover how to go deeper into that hobby of yours?

Mad Fientist: So Edinburgh is a really big coffee city actually, and they have great cafes who have lots of people that are passionate and lots of roasters. So I’d maybe go down there and chat to them about potentially learning more from them in some way or if they had any recommendations for what to do for somebody in my situation, I guess.

Ramit Sethi: How would you use money to make what you just said easier and better?

Mad Fientist: Oh boy. I’m not used to using money for anything, so…

Ramit Sethi: Hold on. Everybody in the FIRE community, just listen, I’m not used to using money for anything. Just except to keep me warm at night as I wrap myself in my Excel model. Yeah. Oh, I love my 52% savings rate. So good. All right, well, we’re gonna learn that skill right now.

Okay. So you just said I might talk to some of the baristas and learn from them, get some recommendations. How could you use money to make that easier and better?

Mad Fientist: I guess I hire somebody to do that?

Ramit Sethi: Yes. That’s a, that’s one thing. Mm-hmm. great. What else?

Mad Fientist: The only other, the only other thing after I said the 250 was like maybe just a weekend in Italy with Jill and you know, compare the Italian coffee and then go to France a couple months later and try their coffee.

I don’t know. I’m struggling.

Ramit Sethi: That sounds pretty awesome. . Okay. That’s amazing. So there’s so many things we could do. First of all, yeah, you could hire some researcher to schedule a bunch of meetings with you and baristas. Second, let’s say you met a barista, you really like him, him or her and they’re like, oh yeah, you know, next time you try to make your morning brew, do it this way. Do it that way. Try this, do. And you’re like, oh, that sounds really good. And you don’t really feel that confident about it you could say, you know what, can I hire you for two hours to walk me through how I make my morning coffee?

Mad Fientist: You know what that’s a fantastic idea because sometimes it just doesn’t turn out and I don’t know why. And I’m like, how am I gonna figure this out because it’s not something I can YouTube or something. Because I don’t really know why that’s not as good as it should be.

That’s an incredible idea.

Ramit Sethi: That’s what money’s for! You use it to get help, to do things easier and better and more joyfully. And all of us intuitively understand hiring a personal trainer or whatever or we pay somebody to cook food for us if you go to a restaurant. How come we don’t just take the thing we’re interested in and say, I’m gonna go find somebody who’s pretty good at this, can you come to my house and help me understand this for two hours? Of course. And then your idea to go to Italy with your wife is amazing. And while you’re there, you can do a coffee tour. And you can go behind the scenes and you can do your own brew and all kinds of stuff. That is how you start to use your money to really experience what is important to you.

That’s a rich life.

Mad Fientist: Now, I’ve heard you do this sort of thing with people on your podcast a lot, but I did not expect this sort of like clammy reaction that I just experienced. So this isn’t even a question on my list because I wasn’t expecting this sort of reaction to those pressing questions.

Why do you think that is? Why do some people just like sort of get all weird when they think of spending 250 pounds on coffee when they have absolutely no idea to do it. Like, it was a really physical reaction I just had, which I was not expecting.

Ramit Sethi: I know. I love it. I wish we could be in the same room right now. It’s quite striking when you see how people physically react to conversations about money, they shrink. I’ll see someone who’s extremely confident and the minute we start talking about money, they physically shrink into the couch . It’s quite interesting. But you know what, I have a lot of empathy for that cuz I shrink when we talk about a couple things in my life that I know I need to do and I’m not.

So for you I think that it is fascinating that most of us have lost the ability to dream about money. That’s really the crux of why I wrote the journal because think about it, day-to-day, again, I’m speaking generally about most people, you get a paycheck, you pay your bills, maybe you have a little bit left over and then you repeat for the next 45 years, or if you’re a little bit savvier, you take your money, you read all the FIRE blogs, and you do your investments and you do another Monte Carlo simulation and then you just repeat that.

But there’s a skill that most of us have atrophied at, which is learning how to spend meaningfully. I’m not saying you go out there and just drop money everywhere and stuff you don’t care about. I don’t do that. I have a very old car, my computer, my phone, they’re not particularly new. Those things are not that important to me.

But there are things that are really important to me, and so I actively seek out how to go deeper and make my life easier. And so I’m not surprised that you had that reaction and that you almost kind of seem to go blank when I asked you how would you do it? But that’s okay. It takes a little bit of coaching.

That’s why I started the podcast and the journal. I want people to see that you can be inspired to spend money even if you haven’t really done it meaningfully in a long time.

Mad Fientist: Right. And this sort of made me think about one of your episodes, episode 40. I loved it. It was someone in a similar situation, they just couldn’t spend their money. It didn’t seem real to them. Which actually is something that a couple of your episodes had that sort of same experience where you’re talking to them and you’re saying, what would a rich person do in this situation? And they can easily explain that. And then you’re like, well, that’s you. That’s, you are that rich person.

Why aren’t you doing that? And it’s a disconnect between, what you have in the bank, because that’s just some number on a computer screen. It’s meaningless. It feels meaningless to me. And I was listening to these episodes like dreaming with them and being like, wow, what an amazing position they’re in.

They could just dream and they can do all these things. And then I kept having to snap out of it and be like, I’m in that position too.

Ramit Sethi: That’s me.

Mad Fientist: It was amazing to hear because, it was more than one episode. And they’re able to give advice to a rich person, but they don’t believe it themselves that they have anything in the bank really.

Have you come across that a lot?

Ramit Sethi: It’s frequent in a couple of different ways. First, for people who are not very savvy with money or not connected to money, it, whatever they have anywhere besides their checking account does not feel real. So people who are fairly rudimentary with money or new to money, the way that they define how much money they have is literally how much is in my checking account.

Okay. And one of the things I try to do is dissuade people from thinking like that. There’s a few little beliefs that people who don’t have a lot of money really follow. One of them is however much is in my checking account, tells me if I have enough money. That’s not how you should be thinking about money.

Another way is I should buy something based on the monthly payment. You know, car dealers know this and they prey on people. We don’t want to think like that either. We wanna do tco, total cost of ownership.

So some of the things that I do on the podcast and in my work is simply showing people a different way to think about money, such as that dad who thought money was bad and he should never talk to his daughter about it.

Well, actually, money can be really good. And a simple way to do it would be to sit your daughter down if they’re really young, you say. Daddy’s gonna log in and pay our bills so we can keep the lights on. Would you like to help me? Don’t you like light? Oh, do you wanna push the button with me? Go ahead, push it and make it like, oh, let’s celebrate. That was so cool. And then as you get older, it can be things like you know, we’re gonna stay for one night in this town. Can you help us pick a hotel? Here’s the criteria and here’s the budget. And of course, by the time they’re teenagers, if you’re taking a trip, they should be planning an entire day on that vacation.

Mad Fientist: So we’re going to get into some some of the stuff that’s really been useful from your podcast and journal for helping me and then some of the other things that over the last couple years that have been really helpful.

But before we do, I want to pick out something that’s in your journal. It says your prime spending years are from ages 40 to 60. So this was a big slap in the face in two ways to me, because one, it made me actually realize that I’m 40 because in my brain I’m still 20. And it was only when I read that and thought about it again that I was like, I am 40.

This is my prime spending years. And two, it was like, all right, I really do need to get serious about this because yes, I feel like I’m 20, so I should just keep saving, but this is my prime spending years.

Ramit Sethi: It’s deeply counterintuitive and uncomfortable to acknowledge that you do have prime spending years.

So let’s talk about this concept because I like that it’s uncomfortable. I like that it makes you think about your vision for spending.

So in your twenties, you have a lot of time, probably not as much money.

And so, I remember for example, we took a backpacking trip with two of my college buddies one summer, and we stayed at the cheapest places. And we were about to sleep in the train station and our guidebook said, don’t do that. You’ll be robbed. And I just remember that trip.

It was amazing. It was full of adventure and sure we didn’t have a lot of money, but it was great. Then in your thirties, you know, again, following a general pattern, people start to earn a little bit more. They do start to spend a little bit more. Forties tends to be focused around family, but in forties people start to have higher incomes.

And in fact, their incomes will peak in a few years after that. But we should also acknowledge that it’s not just about money, it’s also about time. And it’s also about ability or mobility. So you may have a lot more money when you’re 75, but it’s unlikely you’re gonna be going to Everest.

It’s even unlikely that you may even be traveling abroad depending on health. And these are the kind of conversations that people don’t really wanna have. We have a deeply puritanical society, but interesting society that says, save, save, save until someday, but no one ever really talks about that someday.

It kind of reminds me of Indian culture, which is don’t date, don’t date, don’t date. Okay. It’s time to get married today.

And everyone kind of rolls their eyes at that in the Indian culture, but how come we do exactly the same thing in America with money? It’s actually preposterous when you think about it.

So 40 to 60, in my opinion, is the prime spending years. You have money, you have health, and you do have time. Now, if you accept that, listen, you could disagree with me. You could say, I don’t believe that. I think it’s gonna be 65, or, I’m really healthy. Okay, fine. First off, I wanna say it’s not just about you.

I know plenty of people who are healthy, but they have a sick parent or a, a partner who can’t travel for whatever reason, or can’t do the things they wanna do. So sometimes life is not just about you. We have to keep that in mind. But second, what I want you to do using the journal is to create a list of things that you want to do now, in the next decade, et cetera.

So when you do that, you can start to actually visualize what’s meaningful to you and you can start to do ’em. I just don’t want people to live a life of, I will do that someday. And then, I mean, what a tragedy to live a smaller life than you have to. What an even greater tragedy to end up 70, 80, 90, with millions of dollars in the bank if you follow the FIRE community, never actually having done the things you want to do.

Mad Fientist: Yeah, I completely agree. And we’re gonna hopefully help all the FIRE people out there that are like me and who are probably really uncomfortable with this conversation already.

Ramit Sethi: They already turned this podcast off, by the way. This is gonna be your worst listen to podcast of all. They see Ramit Sethi, they’re like no thanks

Or the minute I start making a joke about, you know, their Monte Carlo simulation. Yeah, it cuts too, it cuts too close, doesn’t it, FIRE people?

Mad Fientist: Ah, that’s what we needed. I need the tough love today. That’s what I brought you on. I knew you’re the only one that could do this. So yeah, the journal definitely there’s a lot I want to touch on in there, but before we do the podcast, episode 40 was really helpful in the sense that, like you said, we can spend on our kids or spend on our dog or spend on somebody else.

And in this episode, there’s a woman who really struggled to spend any money on herself and she was worth millions and millions, but would really rarely ever spend on herself And she went to New York with her husband, which that was a whole ordeal trying to even get her there because she had to spend $300 one night on a hotel.

And anyway, they wanted to go see a Broadway show. So she went down to the Times Square Broadway Ticket Office for like the last minute tickets or whatever, the half price tickets.

And she went there because she’s just so used to spending money and you flipped it around on her and said, you know what, you’ve taken tickets from a family that really does need to only pay half price and that’s all they can afford.

Ramit Sethi: I love this story.

So Rachel and Jack, episode 40, they’re one of my favorite couples. He had invited her. He was taking a work trip to New York, and he’s like, come along. She goes, cool.

They were gonna stay at the Moxy Hotel in the East Village, which is a pretty affordable hotel. And she looked at the price and it was $297, which is, for Manhattan, fairly reasonable. And she goes, that is outrageous. I’m not coming. She was just gonna cancel the trip. And he goes, no, come on. I want you to come.

And so she made them stay at a different hotel in Chelsea. And then when the price lowered, the next day, they moved all their suitcases back to the Moxy Hotel. Remember, work was paying for part of this anyway. So I asked, Rachel how much are you worth? And she said, $5 million, I said, could you say that a little louder for the mic, please?

$5 million. Okay, now everyone listening goes, oh my gosh. That’s, that’s so weird. Why? Why doesn’t she just enjoy it? But most of us do exactly the same thing. We do the same thing, whether it’s with a restaurant or a hotel. The way that we act with our money is often rooted when we didn’t have any in our childhood, teen years, or early twenties.

In fact, if I ask people like, how do you decide how much to spend on a vacation? And we really get into it, they, the answer really emerges that they basically have a number in mind. That number was born when they were basically 20, because that’s what they remember about how to plan a vacation. And they have not adjusted that number as they have made more money.

So then she tells us about this Time Square thing and she goes, we actually have no problem spending money on restaurants. We ate out, we ate well. We went to see a show. I said, tell me about that show. So she waited in the line for last minute tickets. This is basically way cheaper discount tickets.

And at this point, I’m like, oh my God, Rachel, you have $5 million and you waited in that line. You didn’t just go to the box office and buy the ticket you wanted. And she goes, no, I needed a deal. So then, you know what I realized? I’m a master of Indian mom guilt . Okay? And so I had to bust it out.

Anyone who grew up with a Indian mom, Asian mom, many types of moms or dads, they go, you know what, it’s my time. I’m gonna leverage this. I’m gonna weaponize this. So I, I did it. I was like, I’m about to become a guilt driven Indian mom. So I was like, Rachel, you realize that there was a family in New York for the first and only time with their kids and as they saw you getting that last Lion King ticket, they saw this multimillionaire woman snatch the tickets outta their kids’ hand.

How do you think those kids felt? And she looked like she was gonna cry. And I was just like, I had the biggest grin on my face. Cause I’m like, gotcha.

Mad Fientist: It was absolutely perfect.

Ramit Sethi: So you know, listen, we have a little fun on this podcast, but the point is I told her, Rachel, you make too much money to do that.

And I said, Rachel, you cannot afford to do that anymore. If you have $5 million, you’re not allowed to be shopping or standing in line for the discount tickets and taking away that scarce commodity from someone else. Now people get a little mad when I say, how dare you Ramit this America? We could do whatever we want with our money.

Okay, you can, but first of all, is it right? And second of all, is it actually serving you? At what point do you get to walk up to the box office and pick the ticket you want? At what point?

Or in episode 16 when Amy and Chris are choosing their vacations based on where they have Marriott points, I go, at what point do you get to choose where you wanna go just based on where you wanna go?

Mad Fientist: That was really good because he said, let’s go to Italy. She started looking into everything she wanted to do in Italy. They have $8 million in the bank. And then I guess last minute he realized that his points weren’t gonna work or something. So they ended up going to Greece and the poor wife was like, I just got my heart set on Italy and here we are in Greece. And yeah, just ruined the whole experience. And I feel for her, because I think I’ve, I’m sure I’ve done that to my wife, numerous times.

Ramit Sethi: Should we get your wife on this call? Is this about to turn into my podcast? This is gonna be amazing.

Mad Fientist: Well, we’ve moved hotel rooms mid trip many times and she hates that so much.

Ramit Sethi: Why do you do that?

Mad Fientist: So, yeah. She would be great to chat to because she would be echoing a lot of the same things that have been echoed in episode 40 and 60.

Ramit Sethi: Here’s the thing, I think that sometimes there’s absolutely virtue in using cost as your money lens, right? Like, if I’m going to buy some commodity, I don’t know, nails or something, well, I don’t go to Home Depot, but if I ever did in a like alternate reality, which is my hell, and I walk into Home Depot, yeah, I want the cheapest nails.

What do I care? It’s a commodity. But I think that sometimes there are higher or different money lenses you can use. If you’re going on a trip and it’s something special, maybe the extra 50 bucks or a hundred bucks actually doesn’t make a difference. In fact, maybe it’s not even about not making a difference. Maybe it’s something you can turn into an amazing experience. You could turn to your partner and say, you know what? For this trip, I really wanna do something special. I know that you’ve always wanted to get a massage at a hotel. I wanna arrange it. So the day we arrive after that long trip, I’ll take care of all the bags, and you just go and get that massage. And when you come back, we don’t have anything scheduled for the rest of the night. You just take a nap and we can just relax. Wow. So notice the difference, not only in spending, but in positioning. To yourself and to your partner. I’m not going there and saying, hey it’s, it’s no big deal. Instead I’m saying, this is going to be amazing and I’m gonna do it for you.

And for Rachel, sometimes what I wanted her to do in Times Square was to be generous to herself. Rachel and Jack had done an incredible job saving money. The classic I Will Teach You to be Rich, way, low cost, long-term investments over a long period of time. They had made it.

And so we find it much easier to be generous to other people than to ourselves. But Rachel and Jack won the game. And so they need to take their winnings and in their case, their winnings might be seeing The Lion King or whatever show with better seats, with more ease to walk in and say, we don’t have to spend two hours of our valuable time in New York waiting in line.

And that’s really what I want people to imagine is the possibilities of using money and actually embracing money as a good thing, not an evil thing that we need to minimize and avoid or hoard.

Mad Fientist: No, definitely. And, since listening to that episode… I have this stack of old t-shirts that I’ve been carting around the country for the last, who knows, 20 years. Because I’m like, maybe one day I’ll need a rag and you know what I mean?

And now, after listening to episode 40, I was like, well, you know, somebody could actually wear this shirt and actually provides a lot of utility here I am storing it for the last 20 years because I think I need a rag. And it’s like, I can buy a $2 rag if I need a rag. You know?

So it’s like, I think that’s really helpful for people that aren’t used to focusing on themselves to sort of like get a little gateway into that and be like, well actually, you know, yeah, this will benefit me because that stack of shirts is finally out of my life and I don’t have to keep carting them around. But then also it’s like, okay, somebody else is going to benefit a lot more from these shirts than I will.

Ramit Sethi: Yeah, that’s a great example. It includes so many elements of some of my philosophies, you know, one of them is $3 questions versus $30,000 questions.

You know, a stack of old shirts, what should I do? That’s a $3 question. Just stop. Let’s not deal with these anymore. The next thing is generosity. Could someone else benefit from these more than I could? Yeah. And the third is being decisive. So many times when I talk to people who have money and struggle to spend it, there’s a lack of being decisive.

And in fact, I think much of what guides the frugality world is a sense of fear. There’s this idea that I’m not gonna go eat at that nice restaurant. That’s not the kind of person I am. And anyway, if I did go eat there, deep down now, I’m afraid I would like it so much that I would trip and fall and have to eat at that nice restaurant every night for the rest of my life.

And I don’t believe that. I think you can have a nice experience and you can also trust yourself enough to know what is enough. And that is really important in a rich life. I’m not saying everyone here just twirl around three times, repeat rich life and then go buy a private jet. That’s not how it works. You need to be able to afford it. I talk about the numbers. I’m not just out here doing some woo-woo life-coach BS. But I also think that you can trust yourself enough to experience something amazing and know that I will never let myself spend more than within our margin of safety.

Mad Fientist: Yeah, absolutely. And that leads nicely to the money rules because actually one of my money rules that I developed after going through your journal is to not limit spending on one-off experiments.

Because like I mentioned before, we flew premium economy to the States and then we flew business class home. And now one of my money rules is to fly premium economy on all flights over five hours because that was well worth the double the price of economy. But then business wasn’t really worth it to me for three times the price of premium economy.

Maybe one day it will, and maybe, you know, I’ll do another experiment once we travel with our new son, which that may change everything. But that’s one of my money rules now because yes, I know I’m not gonna go crazy and just start living this lavish lifestyle that then bankrupts me. And those one-off experiments are really important for pushing my boundaries and finding what it is that it is worth spending on.

Ramit Sethi: Yeah. I love that. It is an experiment. I think we shouldn’t be so worried about getting all of our spending decisions right. I had a program where I talked about the psychology of money and I cover this now, we have a new money coaching program. And one of the principles I shared is that it’s okay to waste money.

Let me explain what I mean. I’m not saying just go out and just throw money around. That’s not what I’m saying. But I’m saying that when you’re in your early twenties, you don’t have a lot of money. You have to make sure that you are being extremely careful. So you might be looking at menus before you go out. You might be declining invitations because you just can’t afford it. Okay, great. That makes perfect sense. But as you make more, certainly in your case, as you have made more and you have a handle on how much you can afford, once in a while you’re gonna spend money on something and it’s going to be a waste.

And that might involve, you got some late fee on some account, and as much as I hate late fees, you discover that it might take you like six hours to get that thing reversed. In your twenties, you’re like, yeah, I’m gonna spend it. I have nothing else to do, and I’m gonna make this company pay. At your stage, you might go, you know what? It sucks and it’s not fair, but it’s not worth my time. Or you might try a certain restaurant or a certain product and it’s just not for you. And so instead of letting the tail wag the dog and saying, wow, I spent a hundred dollars on this thing, I’m going to make it work for me. I’m going to, for example, carry those things around with me to every country, you go, you know what, it’s just not for me. I’m done with it. I’m selling it or donating it. So the more money you make, the more money you will waste. That is natural if you are not wasting a little bit of money, that means you’re probably not thinking about the possibilities of how you could actually be spending it.

So again, just to reiterate, I’m not encouraging anyone to go out and waste money. I am saying that at a certain point it is okay if you incidentally waste a little bit of money because you have a bigger purpose than eliminating all waste of your personal finances.

Mad Fientist: That’s a great point. Because efficiency and lack of waste is what drives a lot of people like me, I would imagine. But you’re right, I’ve wasted far too many hours that I can’t get back on things that obviously don’t matter now in the scheme of money at least.

Ramit Sethi: The efficiency thing always gets me because you’re right, there’s a lot of crossover with efficiency and FIRE, and people they’re like, how dare you not be efficient?

And I just go, are you efficient when you give your husband or your wife or mom or dad a hug? Like do you literally measure how long it’s going to produce the maximum happiness? And they’re just like, no, that would be psycho. I’m like, you’re a psycho by looking at everything through the lens of efficiency.

Maybe sometimes it’s actually not meant to be efficient. There are other virtues besides efficiency… safety, security, a lot of things and so I want people to be more adaptable. If you’re playing the game of life with money, you don’t only have one money lens – cost. You have others, and you use them in the right situations. To do that, you need to be well practiced with all of them.

Mad Fientist: That’s fantastic advice. And I can’t believe it, we’re already coming up to an hour that has gone so quickly. So I don’t want to keep you too long.

I can’t thank you enough. Like I knew you were the only person for this chat and I’m so glad we were able to make it happen.

Obviously I’ll link to your new podcast and the journal and iwt.com. Anything else I should put in the show notes just so people can find you?

Ramit Sethi: For anyone who has questions and wants to stay focused on their money. We have a money coaching program as well. We do a coaching call every month and we have this amazing community. We’ll send you the link for that.

Mad Fientist: Nice.

Ramit Sethi: Maybe you can post it. We’d love to welcome more people into that program too.

Mad Fientist: Excellent. Well thank you so much, Ramit. Really appreciate it. And yeah, hopefully I’ll touch base with you in another three or four years and I’ll have made even more progress.

Ramit Sethi: That sounds great. I always love coming on your show. I love talking to you. Thank you for having me back.

Mad Fientist: All right, buddy. Talk to you soon. Thanks, bye.

Ramit Sethi: All right, bye.

Related PostRamit Sethi - I Will Teach You to Be RichFor the first time, Ramit Sethi from I Will Teach You to Be Rich shares his thoughts on FIRE (Financial Independence, Retire Early)!

The post Ramit Sethi – How to Spend (and Actually Enjoy It) appeared first on Mad Fientist.

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Over the last few years, I interviewed members of my family to find out two things:1. How I became the Mad Fientist (i.e. where did I get my extreme ideas about money) 2. What advice they’d give to parents hoping to raise money-smart children

This is a short but sweet holiday episode to end the year and I hope you enjoy it!Listen Nowhttps://traffic.libsyn.com/secure/madfientist/my-family-interview.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Full TranscriptComing soonRelated PostMy Brother - Using the Power of Money to Pursue Your PassionJoin me for an interview with my little brother that we recorded live in Venice! We talk about growing up, extreme frugality, and how you don't need to wait until FI to use the power money gives you to pursue your passions.

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To celebrate the 10-year anniversary of the Financial Independence Podcast, here are the highlights from my first guest - Mr. Money Mustache!

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Patrick Aime from Aime to Invest shares the important lessons he learned on his rollercoaster journey from bankruptcy to FI millionaire!

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The Escape Artist joins me on the Financial Independence Podcast to talk about pursuing FIRE in the United Kingdom!

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I joined a virtual Bogleheads meeting to talk about life after financial independence and early retirement!

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It's been five years since I left my full-time job so here's my fifth (and final) annual update on post-FI life!

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I finally talked to the person who introduced me to the idea of financial independence - Jacob Lund Fisker from Early Retirement Extreme!

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The Ultralearning Experiment was a bigger success than I'd even hoped and here's what I learned from it (plus a massive announcement)!

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One of my favorite writers, Morgan Housel, shares the investing lessons he's learned from COVID-19, history, and other academic fields!

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It's been 4 years since I left my job and what a crazy year it's been! Here's what I learned from the last year of post-FI life (and the COVID crisis)

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The COVID-19 coronavirus pandemic has caused stocks to crash. Is this a normal bear market or is it different this time? JL Collins is here with his answer.

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Scott Young joins me on the Financial Independence Podcast to talk about "ultralearning" and why it's great for people pursuing early retirement!

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It's been three years since I left my full-time job and this past year was the best one yet! Here's a short podcast episode with everything I learned.

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For the first time, Ramit Sethi from I Will Teach You to be Rich shares his thoughts on FIRE (Financial Independence, Retire Early)!

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Author Cal Newport joins me on the podcast to discuss Deep Work, Digital Minimilism, and the important things you need to consider before retiring early!

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Chad Carson joins me again on the Financial Independence Podcast to talk about the best strategies you can use to retire early with real estate!

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It's been two years since I retired from my software career so find out all the valuable lessons I learned during my first two years of freedom!

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On today’s episode of the Financial Independence Podcast, I’m joined by the president of biggerpockets.com and cohost of the BiggerPockets Money Show, Scott Trench!

Scott breaks down the journey to financial independence into three stages and explains what you need to focus on at each step (and why)!

Listen Nowhttp://traffic.libsyn.com/madfientist/scott-trench-interview.mp3* Listen on Spotify or Apple Podcasts * Download MP3 by right-clicking here

Highlights * The three stages of wealth creation on the path to financial freedom * Why it doesn’t make sense to worry about investing right away * How to create a “financial runway” and use it to your advantage * Why you should try to find a “scalable career” * How to turn your biggest expense into an income-producing asset * The one question to ask before buying your first house hack * The multiple benefits of adding side hustles along your journey

Show Links * Set For Life * BiggerPockets * BiggerPockets Money Show * My Interview on the BiggerPockets Money Show * House Hacking 101: How to “Hack” Your Housing and Get Paid to Live for Free * Thinking in Bets by Annie Duke * Leave a review for the Financial Independence Podcast on iTunes!

Financial Independence Podcast Advice I’ve been recording this podcast since 2012 and at the end of every interview, I always ask, “What’s one piece of advice you’d give to someone pursuing financial independence?”

I’ve received a lot of great answers over the years so I decided to compile all those answers into a PDF, which you can now download for free here!

Full Transcript

Mad Fientist: Hey! Welcome everyone to the Financial Independence Podcast, the podcast where I interview some of the best and brightest in personal finance to find out they achieved financial independence. On today’s show, I’m excited to introduce Scott Trench from BiggerPockets.com. Scott is someone who came on my radar a few years ago because Mindy Jensen, aka Mrs. 1500, from 1500Days.com mentioned quite a few times that I needed to get her colleague, Scott, on the podcast. She said he’s a 20-something who’s doing incredible things with real estate and investing and finances in general, so I needed to talk to him. And any time Mindy gives such a glowing recommendation for someone, I definitely check them out. So that’s what I did!

I downloaded an audio book version of his book, Set for Life, and I really enjoyed it. The thing I liked most about the book was that he broke the journey to financial independence down into three distinct stages, each with their own focus. And this is something that I really am looking forward to diving into today in the interview because I think it’s a really powerful way to make the journey to financial independence not as daunting. And I’m also looking forward to exploring some of the strategies that he used personally to get to the stage that he’s at today like house hacking and real estate investing.

So without further delay, Scott, thanks very much for being here. I really appreciate it.

Scott Trench: Well, thank you for having me, Brandon. I’m very excited to be here.

Mad Fientist: Yeah, this is a long time coming. I’m not sure how long you’ve known Mindy Jensen, but I think ever since she got introduced to you, she’s been like, “Brandon, you have to get him on the show. He’s this young guy that’s doing all these crazy things.” So you’re in your mid-twenties, right?

Scott Trench: Yeah, I’m 27. Two or three years ago, I actually [00:01:46] Bigger Pockets.

Mad Fientist: Mindy has been like, “You’ve got to get him on the podcast. He’s doing some amazing stuff,” which I’m really excited to talk to you about. So let’s dive in! What did Mindy see in you do you think? And what caused her to come to me and say, “Hey, you needed to talk to this guy”?

Scott Trench: Well, I think we both share a lot of interest in personal finance. We both have kind of a similar approach to money in general. I think it starts with a basis in frugality, but then there’s an aggressive investing component.

And both Mindy and I are a little bit more—how do I describe it? We try to be a little bit more creative and adventurous with our investment and money management than maybe just passively investing in index funds. I think that’s why we’re attracted to real estate. I have my eye on maybe branching out into some other types of investments. And I do she does a lot of private lending and other various kind of creative ways to invest and maybe get a diversified or different or higher returns than she can with just stocks.

So, I think that’s where our friendship kind of kicked off, a pretty similar mindset on life and finance and real estate in general.

Mad Fientist: Nice! And yeah, you’re 27 and you’ve done a ton of crazy, amazing stuff so far. You’re now president of Bigger Pockets which is huge. Congratulations to you!

Scott Trench: Yeah, I got promoted to president of Bigger Pockets maybe last Tuesday I think. I don’t remember. It’s been a whirlwind since then.

So, it’s kind of the opposite of FI at this point. I’m now working very long hours and trying to figure out how to grow the company and all that kind of stuff. But it’s very exciting, and it’s like the perfect world for me because I just love Bigger Pockets. I love helping spread the message of financial independence to as many places as I can.

Mad Fientist: And you could do it while you’re on the clock.

Scott Trench: And I do it while I’m on the clock.

Mad Fientist: …which is great. And your boss was on the show, Josh Durkin. He was episode #23.

Scott Trench: That’s right.

Mad Fientist: He seems like a good boss anyway. But that’s awesome. That’s great. Congratulations!

Scott Trench: Yeah, Josh has definitely kind of achieved the dream here. So he’s stepped aside. He has some family things that are going on. So we’re wishing him the best with those. But he’s definitely in a position where he’s able to step aside and step out of the day-to-day and have a young upstart like me kind of do some [00:04:01] for him.

Mad Fientist: That’s cool! So how did you get interested in real estate?

Scott Trench: So, I got interested in real estate as a byproduct of being interested in financial independence in the first place. I started out working at a Fortune 500 company. I wasn’t really interested in that line of work. I was interested in that line of work, but I didn’t want to be tied to it for 40 years.

So, as part of my effort actually to become a better financial analyst at my job, I started listening to and reading all these content on finance and kind of discovered the concept of personal finance at some point. And then, I actually stumbled upon your podcast, the very first episode, and Mr. Money Mustache. And once I heard that, everything clicked for me, and I was like, “This is it. This is what I need to be doing and how I need to be moving forward with my life and with my finances. This is why”—I was already fairly frugal—“This is why I’m saving. This is what I want to do with money. This is why I studied finance in general, in college and with the start of my career. This is it!”

So, thank you for that. Thanks to both of you and him.

Mad Fientist: Yeah, that’s absolutely crazy!

Scott Trench: But yeah, that interest in personal finance is kind of what spurred my ability to save and the accumulation of my first $20,000 to $25,000 for me. And I wanted to do a little bit more than maybe invest in index funds again which is kind of a standard 8% to 10% long-term average return. I wanted to try to see if I could do much better than that. And that is where I became interested in real estate and started listening to Bigger Pockets and becoming a fan of the company there.

Mad Fientist: That’s very cool! I published that episode way back in May of 2012. So, do you think you stumbled upon it shortly after it was published or was this something that happened a little bit later.

Scott Trench: No, in May of 2012, I was graduating from college and getting ready to—no, I graduated college in May of 2013. So I was still drinking way too much better and trying to have too much fun when you published that.

So, I spent all my money throughout the rest of my college, all the money I saved up working in summers and all that—all fun in college, and then a three-month backpacking trip when I graduated. So I started with basically zero—$3000 in savings when I started my career.

But within three months of starting my career, my introduction to the real world, I became very interested again in the concept of personal finance. And that’s when I found your show, some time in that timeframe. I want to say it was probably November or December of 2013 is when I actually listened to your show and got this all kicked off.

Mad Fientist: Wow! That’s very cool. So you mentioned your first $25,000. And this brings up a really cool thing that I liked in your book, which I haven’t even mentioned yet. But you wrote a great book called Set for Life. And you’re kind enough to send it to me. I actually enjoyed the audio version of it in the gym. So you were my gym companion for a good week or two.

Scott Trench: Oh, wow! I’m repaying the favor [00:06:47].

Mad Fientist: Yeah, exactly. So yeah, I really enjoyed it.

But one of the things I loved most about it was how you broke it down to three phases. And the first phase was getting that first $25,000. The next phase is getting that first $100,000. And then, finally, the next phase is getting from $100,000 to financial freedom. So I really like how you structured it.

So, would you mind talking a little bit about that first stage?

Scott Trench: Yeah, sure. So one of the problems that a lot of people have I think when it comes to finance is they’re unable to take any risk whatsoever. They’re unable to take advantage of opportunity. And the reason for that is because they have no cushion. They have nothing to fall back on.

Suppose that you’re making $50,000 a year, if you save $500 a month—which is actually a pretty good savings rate. It’s about a little over 10% of your savings—that means you spend around $4000 a month. So you’re not going to be able to even last one month without your job if you’re starting from scratch until eight months have passed and really six weeks timeframe by the end of the year. So you have no financial runway. If you lose your job, you’re screwed! You run out of money and you have to go and find similar paying work as your only option.

But if you’re able to start increasing that savings rate, you accumulate this cushion, this what I call “financial runway” and “set for life” which allows you to live without the need for wage-paying work on that.

And my book is written for a very specific audience. It’s written for a median income earner that is starting with little to no assets but wants financial freedom.

So, some people are starting from a position where they already have a good $25,000 saved up through whatever fortune, whatever they’ve done previous to this point. But if you’re starting from that point, you don’t really have the option of going out and starting a business because you’re working full time and starting a business is hard work and unlikely to be successful on a part-time effort in the short run. There’s plenty of exceptions to that, and I’m not discounting that. I just think it’s lower odds of success than maybe focusing on savings first.

You’re also not likely to get a big raise at your job at work within the next year. People doubling their income in a corporate type situation, it’s not heard of. It’s unlikely. Also, you have nothing to invest, so you can’t get a higher return on your invested dollars if you have nothing to invest.

So, you really have to start somewhere. And I think for that median income earner starting with zero, it’s with that savings position.

Now, once you achieve a high savings rate and accumulate maybe six months to a year or more of this financial runway, options begin to present themselves in your life, things like you can go and take a job that pays you $40,000 instead of $50,000, but offers you a chance at a big bonus at the end of the year, or you can go work for free for an entrepreneur that you really admire and go learn a valuable skill set, or you can just take that $25,000 and invest or house hack the way I did.

And that’s kind of where we start getting into part two there which is $25,000 to $100,000. But do have any other questions about the…

Mad Fientist: Yeah, yeah. That’s awesome. And yeah, the main focus in that first $25,000 is frugality, which as you talked about in the book, a dollar saved is better than a dollar earned because obviously you’ve already paid tax on that dollar that you’re saving, and it’s worth more to you than a dollar earned because you would pay a bunch of tax on it and have to do work to get it. So, I think that’s really important.

And I think focusing on frugality at that stage absolutely is going to be the biggest impact you can have on your finances.

Scott Trench: Yeah, and I think a dollar saved is better than a dollar earned because of that tax advantage. But also, a dollar saved, at least a dollar of lifestyle—you know, if you can reduce your average monthly spending by a thousand dollars, that’s better than increasing your average monthly income by a thousand dollars for a couple reasons.

One, you’re accumulating that all in savings which is 100% gain because it’s after tax savings that you’re accumulating. But two, you’re decreasing the amount of money that you need to produce financial runway.

So, you might need $25,000 in total cash, liquidity, to finance your $2000 a month lifestyle. But you’ll need about $48,000 to finance your $4000 a month lifestyle. So it gets harder to save, and you need way more the more your average monthly spending increases.

Mad Fientist: Wow! Yeah, that’s a great way to look at it.

So, you had mentioned when you hit that $25,000 stability level, you would mention you could get a job that pays less salary but has a bigger bonus potential, or you could go and work at a startup or things like that. And you mentioned in the book something called scalable careers, which that’s a great phrase that I don’t think I’ve really heard before. So can you talk a little bit about that?

Scott Trench: Yeah. So my first job was at a Fortune 500 company as a financial analyst 1. And I knew very clearly that around the 18-month mark, give or take a few months depending on my performance, I was going to get a promotion to financial analyst 2. And my salary when I started was $48,000. And I knew that my salary at financial analyst 2 would be about $56,000 to $58,000 (again depending on performance).

Well, my goal was financial freedom. And I wanted it as soon as possible. Earning an $8000 raise after a year is great. I know a lot of people that would be happy with a raise of that level. But that was not going to get me expediently towards my goal of a several hundred thousand to a million dollar net worth and several thousand dollars a month in passive cashflow. So that’s not scalable.

And that the step after financial analyst two of course is financial analyst 3, then senior financial analyst, then finance manager, senior finance manager, director of finance, senior director and so on, all the way up to CFO of a Fortune 500 company.

And that’s the best case scenario, is that you go through all of those rungs of the ladder in 20 years. That’s not fast enough. It’s in my opinion as a saver who was able to accumulate a year of financial runway within a year, that was a risky career because I knew that I was not going to have any chance to live up to what I deemed my potential to be.

But on the other hand, if I wasn’t saving, if I had no financial runway, it would be too risky to leave. And so what I’m trying to do with Set for Life and with some of the other things I’m doing is try to help people put themselves into a position where they’re saving enough, where leaving a career track like that where they have very limited upside becomes the bigger risk than taking a chance on something that they believe to be a good opportunity.

Mad Fientist: And that’s why I love these three distinct phases so much. When I started on the road to financial dependence, thankfully, I was already in stage three. I was just working towards that financial freedom. But I didn’t realize that passing those first two stages, my first $25,000 and my first $100,000 gave me so many more options and so much more power to make that journey quicker and more enjoyable.

And that’s why I really like how you laid out the book, is because it’s like, “Okay, you may not have that much money to invest and you may feel like it’s a long way out. But you get to this $25,000 or this one year of runway, and now you have a lot more options. You could drastically change your life for the better.

Scott Trench: Yeah, I think that’s exactly right. And once you have that financial runway, moving into step two here, we’re trying to get to about $100,000 in investable liquidity. And once you get to $100,000 in investible liquidity, now how you invest that money begins to become really important.

So, the goal is to go from a year of financial runway—which is a very modest goal that you can grind out over maybe a year to eighteen months depending on where you’re starting from, what your income is, and where your expenses are, to a goal that has a lot less certainty. There’s a lot more factors. More luck is involved in rapidly going from $25,000 to $100,000 than there is from going from zero to $25,000.

And so, it’s all about increasing your odds of success I guess at this point.

And so, I believe that two things are likely to help people increase their odds of success going rapidly from $25,000 net worth to $100,000. One, go find a new job. Go find a career or an opportunity that you believe offers you the potential to scale, but will not allow you to lose money on a monthly basis. And then, two, house hack.

Mad Fientist: Cool! Yeah, can you describe that again? I know I’ve had Chad Carson on the show, and we’ve talked about it in the 1500s. But for those who may not have heard that episode, could you just describe what house hacking is?

Scott Trench: Sure! So, house hacking as I define it is buying a piece of investment real estate that will make sense as a rental property, as a cash flowing rental property for you after you move out; or otherwise, using your housing to build wealth.

So, for example, a house hack the way I look at it through my lens was I bought a duplex for $240,000 here in Denver in about late 2014. I put down $12,000. And I got a $236,000 loan, something like that after the fees and all that.

And so, I put down 5% with an FHA loan. My mortgage payment was $1550. And my rents were $1150 from the other side and $550 for my side. So if you’re following that, I was collecting $1700 in rent on $1550 mortgage.

Mad Fientist: Nice.

Scott Trench: So, after the other expenses that went into maintaining the property and fixing some things up myself, I was probably breaking even or maybe paying a little bit out of pocket to live on a monthly basis. But that’s a huge improvement from paying hundreds or thousands of dollars in rent per month.

And so, that’s the biggest hack that I can think of, like the biggest trick that a median income earner can do on the side to drastically cut their expenses, and then automatically put yourself in a position to have a significant cash flowing asset after a year or two.

Mad Fientist: Yeah, you mentioned in the book, you’re like, “Turn your biggest expense into an income-producing asset,” and I think that’s really powerful to think of it that way. Yeah, this could be your biggest expense—especially if you’re renting or if you go out and buy your dream home right out of college like some people. that is a huge expense. But what you’re talking about is turning that into an income-producing asset instead. So, not only are you not spending money on that big, major expense, but you’re actually earning money from it which obviously is going to get you to that $100,000 a lot quicker than the normal person.

Scott Trench: Yeah, absolutely. I mean when you talk about average American household spending, 33% of that, the biggest chunk of the pie is going to be in housing, 17% is in transportation, 13% is in food. And then, one-third—that was two-thirds I just described there, housing, transportation and food—one third is everything else. Fun, entertainment, healthcare, insurance, all of that falls into that last third.

So, people always think that that’s where they need to focus on their finances in order to achieve a high savings rate and rapidly accelerate toward financial dependence, but that’s wrong. It’s just that the math doesn’t work like that. The math is telling us that the biggest parts of your spending are in housing and transportation. And if you can house hack—like me, I house hacked close to work, so I could bike to work—you’re able to eliminate basically 50%, lop off half of your expenses, in one single investment.

And again, yes, you’re buying in such a way that it will make a smart cashflowing asset for you once you move on and move out of that property.

Mad Fientist: Very cool! So was that your first property then, the duplex in Denver?

Scott Trench: Yeah, that was my first property. I bought it in northeast Denver, and things worked out. I moved out a couple of years later. And it currently rents for $1400. The mortgage is currently $1400 because I refinanced. I was able to reduce my monthly payments. And then, the rents are about $2600 a month.

Mad Fientist: Wow! That’s fantastic. Have you bought any other property since then?

Scott Trench: I live in another duplex doing the same thing. And I also have a quadplex now that I bought as a regular investment property.

So, I’m trying to buy one every 12 to 18 months and just sustain that system.

Mad Fientist: How is that going in Denver? I know it’s a really hot real estate market these days.

Scott Trench: It’s been going pretty well. I think that it’s increasingly difficult. At the time that we’re recording this, I’m finding it very difficult to find properties. I think it’s going to take me a good bit of time here. But as long as I can find a property that cash flows in a sense where I basically have a very, very good odds at having long-term $500 to $800 a month plus in cashflow on a $50,000 to $100,000—it may not be the best cash in cash return, but I do believe that I can see some solid appreciation over a 30-year holding period in Denver.

So, if I kind of maintain my system of dollar cost averaging through real estate, I believe that I’ll have a good result at the end.

Mad Fientist: Very cool. And how does the duplex compare to the quadplex?

Scott Trench: So the quadplex that I purchased, I bought it for $355,000. It wasn’t in the nicest area. The rents there are $800 per month on each of the units. And the mortgage is about $1700.

So, if you’re following, that’s $3200 in rent on a $1700 mortgage. And I have a couple of other expenses there as well. I believe I currently was able to get—I remodeled and got one of the units up to $925. And I believe that by the end of next year—so that’s the end of 2019—that I’ll be able to get approximately $925 to $1000 per unit, plus I can pass on the utility fees to the tenants.

So, it’ll take me a year or two to get to that point because I don’t want to kick any tenants out or anything or raise the rent too quickly on them. But once I’ve got that stabilized after a year or two, I think I’ll have a very, very nice cash flow on top of what is already a satisfactory cashflow.

Mad Fientist: Alright, good. If somebody is interested in getting started in house hacking, what would you recommend as far as getting duplexes? Are they easier to manage initially? Or do you think go straight for something like the quadplex if you have the capital to invest?

Scott Trench: One of the great things about house hacking is it’s a huge spectrum. So the only criteria that I have that I think that you should really kind of strictly enforce is: “Will this property make sense right now?”, the day you buy it as an investment property if you don’t live there. If you don’t have that option, then you are stuck. You have to live there until things appreciate or rents go up, or the property goes up and you either have to be able to sell it or live there happily.

But if your house hacking correctly, you have three options. And this is the real power of it in a non-financial sense. I could continue living in that property happily forever, I could sell it at a gain alongside all the other homeowners in the area, or I could rent it out.

And in a good market, that’s not so important. But in a bad market, it’s really important because in a bad market, you can’t sell. And so, if you can’t sell, then your only option as a homeowner or a house hacker that hasn’t bought a property that would make sense as a rental is to continue living on the property and paying it.

But if it can cashflow as a piece of investment real estate, then you can always decide to continue living there or keep it as a cashflowing rental. Who cares if it’s underwater in terms of you owe more than it’s worth as long as it’s cash flowing? It’s putting money in your pocket every month.

Mad Fientist: Yeah, absolutely. So, Bigger Pockets obviously has tons of amazing resources for people who want to get into stuff like this. Are there any links in particular you’d recommend? Or maybe you can just send them over, and I’ll put them in the show notes in case people want to know more? And

Scott Trench: Sure! I’d recommend people start from the source. So, the first time that I can figure out anybody actually using the term “house hacking” was by a guy that works here named Brandon Turner. And he wrote How to Hack Your Housing and Get Paid to Live For Free. He uses the example of a quadplex I believe in that post. But I’ll be sure to send you that link, so listeners can go ahead and click on that in the show notes.

Mad Fientist: Perfect! So, that was your first $100,000. The first $25,000 was focused on frugality and cutting expenses. The next $75,000, you’re looking at housing and income generation. So do you want to talk about that final step?

Scott Trench: Yeah, sure. So, the final step I think is it goes on forever basically. I think that the two things that come into play there are going to be entrepreneurship, asset creation, and then investing.

So, once you have a hundred thousand dollars in investable liquidity, if you’re spending less than $25,000 or $30,000 a year, by definition, that means you have years of financial runway, years of the ability to go and take advantage of opportunities, or just simply the cash to make a meaningful investment, at least relative to your spending.

So, I think there’s a couple schools of thought. First, there’s the traditional. And there’s nothing wrong with this plan of index fund investing. Throw all your additional cash into index funds, model it out using whatever percentage return you’re comfortable with. A lot of people will go with something in the 8% to 10% return range for index fund investing over the long term. But you model it out, and you just throw all of your excess cash into a big pile. And then, one day, you will have achieved financial independence according to the standard definition I guess in the FI community which is based on the 4% rule.

So, if you spend $40,000 per year, if that’s your target goal, and you have $1 million in index funds or wealth in general in your portfolio, you’re likely to sustain that in perpetuity.

So, that’s one plan. And there’s nothing wrong with that plan. I invest in index funds. I have a very sizable chunk of my money in index funds for that exact reason.

Another approach that I also use is real estate investing. So, alongside kind of dollar cost averaging with index funds, I try to dollar cost average—and by that, I mean consistently invest, so I’m not buying at the top or the bottom of the market—in real estate.

I just mention I have the three properties. I plan to buy a fourth by, if not by the end of this year, by the end of 2018, by at least kind of spring 2019 to just kind of continue my system. I bought my last property in June 2017.

So, those are two approaches for investing.

But there’s also this whole realm of entrepreneurship. And I encourage people to go out and think about adding side hustles one at a time as they’re going down this path. There’s so many different ways to make money that don’t cost anything but your time, and maybe a few hundred to a few thousand dollars to try out.

You could try starting a blog or a podcast. I mean, that obviously worked out for you, Brandon.

Mad Fientist: Right! Yeah, no, absolutely. I couldn’t agree more. This is like the most opportune time for low cost entry into any sort of business world you can imagine which is super exciting. And I couldn’t agree more that also should be a very important focus for you because if you just work so hard to financial independence, and then have nothing to work on after, nothing that gets you out of bed or gets you excited about starting your day once you reach that point, you’re going to probably be pretty miserable and may want to go back to work.

But having that thing that you’re working on as you’re trying to reach financial independence, then hopefully, by the time you reach it, you’ll have something there that you’re really passionate about and that you can spend a lot of time doing.

Scott Trench: Yeah, I think that’s huge. It’s kind of a funny phenomenon to me because when I was starting out on this journey, all I could think about was getting to a point where financial independence seemed like a realistic possibility. And now that I’m there, I guess I technically lean FI, but I have more work to do if I want to get to the point where I can support maybe an upper middle class lifestyle in a good school district and a family one day. I definitely still have some work to do to get to there.

Mad Fientist: Wait, let me interject. I was listening to your podcast (which we’ll obviously talk about here soon as well). And yeah, your last name is Trench, and you want how many trenchlings?

Scott Trench: Seven to ten trenchlings.

Mad Fientist: So yeah, that could take a nice chunk of change. So yeah, you better keep saving a little bit because 7 to 10 trenchlings, I’m sure, aren’t going to be too cheap.

Scott Trench: Yes. So, I definitely have some higher financial goals than kind of like lean FI for me and maybe like one significant other. And I’m plenty happy doing what I’m doing and kind of continuing along with things.

But it’s funny because I hear these people, they’re like, “Oh, I’m very well into FI. I’m easily a 2% or 3% safe withdrawal rate,” which is much more conservative than the 4% safe withdrawal rate, which means they have much more assets than they need to produce the level of income that they desire. And they’re just like, “I don’t know what I’m going to do after I retire.” The money is not the fear anymore. The leap and I guess the freedom is almost kind of the scary thing.

So, I think that you’re absolutely right to have a passion project, whether it’s personal finance-related stuff or a podcast or a blog or a project or a business in something else that you just want to work on with your free time.

Mad Fientist: Yeah, absolutely. So, it sounds like you haven’t made any sort of mistakes or you’ve been on such a very amazing path seemingly as soon as you got your career? Have you made any mistakes, or is there anything you would do differently if you’re starting from scratch now?

Scott Trench: Yeah, you know, I had the good privilege—and this is not like an intelligence thing. I had the good privilege to discover this personal finance movement and have it make sense to me very early on, and then just kind of dive in or read it. So I was able to basically—from a big picture perspective, I think that I’ve been able to at least avoid any major mistakes.

So, my major mistakes are going to be things like I bought a brand new Toyota Corolla in 2014, kind of before I really wrapped my head around the whole personal finance thing. And that’s a Corolla. It’s not like I bought an [00:29:20]. It cost me $1700. And I still have a little bit to go to completely pay it off. It’s like a 1% interest rate. But that wasn’t a huge mistake.

I picked stocks, and I tried to invest in stocks, and I lost money in 2013 and 2014 when everybody else was making money. All the index fund investors were seeing strong returns. I managed to lose money because I knew better than the market about this couple of Chinese stocks that had more cash than market cap… and I don’t know…

Mad Fientist: Oh, nice. So they’re not even recognizable by name, the companies?

Scott Trench: No, I was just finding these weird financial ratios.

No, here’s what I was thinking. I was like, “Oh, I’m a smarter guy than the market.” This company in China is a Chinese fruit juice company. And they’ve got a hundred million dollars in cash and no debts. And their market cap is $50 million. And they’re profitable.

I mean, if you think about that, how on earth is their market cap less than that? Well, the reason is because Chinese companies all the time—I don’t know about this one in particular—lie about their financials. And no one can go in and audit them and figure that out. And everybody knew this except for me. So that’s how I managed to lose money investing in stocks I guess.

Mad Fientist: Nice! It’s good to make those mistakes early. That’s another good thing. You don’t have to be a superstar investor when you don’t have much to risk luckily. And that’s hopefully when you make all your mistakes and learn all those lessons.

Scott Trench: Yeah. So, I think that from a big picture standpoint, I was able to think about it in a pretty rational way and have the odds in my favor for success. Some of it is obviously also luck. And I think that goes right along with what I just said before, it’s about increasing your odds of success, but understanding that some things are out of your control alongside that.

Here I am today after a string of I think good decisions and good fortune accompanying them, but I look back, and I’m like, “I’m not sure which one of those was a bad decision where I got lucky.” I think they were good decisions and I got lucky if that makes any sense.

Mad Fientist: Absolutely!

Scott Trench: And particularly in terms of appreciation and real estate and stock markets.

Mad Fientist: And I really think you make your own luck too to an extent as well. Obviously, some chance plays a part. But when you’re putting yourself into a position to take advantage of opportunities, and you do have options, and you do have that buffer (like that first $25,000 that we talked about), and you’re able to take advantage of things that other people can’t, and then yeah it may look lucky after the fact. But I think a lot goes into putting yourself into position to be lucky.

Scott Trench: Yeah, I rarely do this, but I just read a book that I’m raving about lately called Thinking in Bets by Annie Duke. And she’s a poker player.

Poker players, at least the ones that are really good, have this really good outlook on things where they’re like, “Hey, here’s the hand I’ve been dealt. My odds of success of winning this hand based on what I know are 70%. And I think I can read my opponents as well as I can to feel comfortable with those odds and set myself up. I’m going to bet on that and go with that.” And that’s the correct decision to make in that game. And they’re fine with that.

And if they lose, you’ve got to be able to not tie the result of losing that hand with “Hey! Oh, that was a bad decision to bet there.” No, it was a good decision. You made the right choice. It just didn’t work out. And if you continue along that line of thinking and apply it to your life, I think that’s how you have just really good odds of hitting success.

Now, of course, you can’t make any bets in the first place if you have no wealth and spend all that you earn. You have no ability to even attempt to put yourself to put some money on that or take the shot on that new career or whatever. So you have to have some baseline of stability, and then work as hard as you can to acquire excess so that you can then go on to take these chances in life that you believe, to the best of your ability, are great, and then obviously do whatever work you can to increase the odds as much as you can to your favor.

Mad Fientist: Very cool! I’m going to put that book in the show notes, a link to the book in the show notes. And I’m going to hopefully get it out of the library as soon as I can because that sounds really good. And yeah, back in my poker-watching days, I remember Annie Duke very well. So that would be cool to read that.

So, I mentioned your podcast briefly, but I definitely want you to talk about it because your co-host is one of the people that has been on my show probably more than anyone else. I interviewed her and her husband in episode #14. She and her husband interviewed me in #26. And then, they both were co-hosts on my show with me on episode #38.

Scott Trench: There were some rapping involved in that show.

Mad Fientist: There was! And that is my question. So, yeah, Bigger Pockets Money Podcast. That’s great. I’ve listened to probably half of the episodes so far. And I’m looking forward to checking out the rest. Your first guest was the same first guest that I had way back in 2012, Mr. Money Mustache (which was a great episode).

So, my question was, “Has she rapped yet?” because she is actually a really good rapper.

Scott Trench: You know, she hasn’t wrapped yet. I think I take all of the thunder for the weird or funny, whatever you want to call it, activities there by telling very lame, bad jokes on each episode, or asking the guests at least.

Mad Fientist: Yeah, yeah.

Scott Trench: But we’ll get her to rap on one of the future ones coming up.

Mad Fientist: Absolutely! She’s good. So yeah, the Bigger Pockets Money Podcast, how has it been going? Have you enjoyed it?

Scott Trench: Oh, I’ve love it! So, the Bigger Pockets Money Show started as kind of a spin-off, an alternative to the Bigger Pockets I guess real estate podcast. And one of my, and I think Mindy’s, big petpeeves with the real estate community is that a lot of people will go in and try to buy real estate and hope that buying that real estate will solve their financial problems. So they’re investing from a position of financial weakness and using some form of creative finance which is kind of, for a new investor, often a code word for “extremely risky leverage” and not investing from a position of financial strength.

So, the goal of this show is to say, “Hey, real estate is one part of a strong portfolio.” And I believe it makes sense for many people. But really, what we’re after here is a strong personal financial position with a good savings rate, a strong income, strong investment returns, and then the opportunity, if desired, to go take advantage of entrepreneurial pursuits.

So, we are interviewing people that have expertise in one of these areas or niches in these areas or stories that embody this kind of approach, so that people are not pigeonholed into one type of investing or one type of real estate.

So, for example, on a basic level, Mr. Money Mustache has an incredible intro because I believe—and Mindy agrees—that the basis of personal finance, the foundation, is always in that frugality and having the mindset of the end goal of happiness and using money as a tool to live out that ideal lifestyle I guess.

And then, we kind of move into more niche topics with future guests. For example, we had Erin Chase on there. And Erin Chase is an expert grocery shopper. And groceries are one of the things that a person that’s interested in personal finance can go out and make a change in immediately. You may not be able to change your lease, you may not be able to start biking to work tomorrow. But you can next week go to the grocery store, plan out your meals, and save a few hundred bucks on your eating bill—and eat healthier and bring that advantage into your life.

But then we go into house hacking. We go into just incredible personal stories. One of my favorites which will be coming out soon is with David Greene who’s a real estate investor. But we don’t talk about his real estate investing, we talk about his personal financial journey where he started as a waiter and found ways to make way more money than all the other waiters at the restaurant, how he saved all that money, how he was able to house hack, how he was able to parlay into his career as a police officer, how he was able to save and accumulate tremendous amounts of wealth while most of the people, most of his peers—and this is in San Francisco. This is in an expensive market—were not able to accumulate anything.

So, the goal of the show is to showcase these different perspectives on finance and enable people to think outside the box of “Oh, real estate is the only way to go about this” or even “Index funds is the only way to go about investing” or “frugality is the only path to financial freedom.”

No, all of these things work. And it’s about putting together a plan that makes the most sense to you based on the perspectives of smart people who have been there and that resonate with you.

Mad Fientist: Very cool! Yeah, I’ll put a link to the first episode in the show notes. And I definitely recommend everyone to check it out.

So, I always end all my interviews with one piece of advice you’d give to somebody who’s starting on the path of FI. So what would yours be?

Scott Trench: Get to a 50% savings rate. I think a 50% percent savings rate kind of—get to a median income, and then get to a 50% savings rate. I think that once you have a 50% savings rate on a median income or greater, that’s when all of this kind of really starts falling into place and the opportunities begin multiplying in so many different directions for you.

Mad Fientist: Excellent! Well, thank you so much for coming on the show. This has been awesome. And thanks to Mindy for putting this together. She was right! It was definitely worth talking to you—lots of great advice.

And if people want to find you, where’s best to find you online, just go to Bigger Pockets?

Scott Trench: Yes. I’m on a lot of social media, but I don’t ever check them. I find social media very overwhelming. So the best place to find me is actually on Bigger Pockets. Just search my name in the search bar, Scott Trench. If you message me there, I usually get back to everybody within a day or two.

Mad Fientist: Very cool! Well, thank you so much, Scott. I appreciate it. And hopefully, I’ll make it out to Denver one of these days and say hello. I’ve never been to Colorado, and I love mountains. So hopefully, it will happen.

Scott Trench: Well, thank you, Brandon. If I ever make it out to Scotland, I’ll have to come and check it out.

Mad Fientist: Absolutely! You’re welcome any time. Alright, man, thanks a lot. Congratulations again on the promotion and the book. And yeah, hopefully, I’ll speak to you soon.

Scott Trench: Thank you so much.

Mad Fientist: Alright, buddy, bye.

Scott Trench: Bye.

Mad Fientist: Hey, I hope you enjoyed that interview with Scott. Before I go, I just wanted to remind you that I went back through all of my previous episodes and collected the answers to my final question that I always ask: “What’s one piece of advice you’d give to somebody on the path to financial independence?” And I put all the answers into a free PDF that you can download.

So, if that’s something you’re interested in, head to MadFientist.com/advice. That’s MadFientist.com/advice. You can download a free copy there. And it contains all of the answers I’ve received since I started this podcast back in 2012. So there’s a ton of great stuff there.

Anyway, thanks a lot for listening. And I’ll see you next time.

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